The Stock Market Is Doing Something We’ve Never Seen Before (EP. 463)

Summary

Animal Spirits Podcast, Episode 463

Title: The Stock Market Is Doing Something We’ve Never Seen Before
Date: May 6, 2026
Hosts: Michael Batnick & Ben Carlson

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Episode Overview

In this episode, Michael and Ben explore unprecedented trends in the stock market, discuss seismic changes in corporate growth, and dissect the psychological and structural dynamics driving today’s economy and investing landscape. Highlights include record-breaking Big Tech earnings, the evolution of stock market participation, the perils of prediction markets, the real impact of rising oil prices, and what AI may mean for jobs, markets, and society. The hosts maintain their signature balance of data-driven analysis, curiosity, and wry humor throughout.

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Key Discussion Points & Insights

1. Investor Personalities & Market Predictions

[01:53–05:20]

• Michael opens with reflections on Paul Tudor Jones’ recent interview, emphasizing how personality shapes investing style and outlook:
  • "Certain personality types are more well suited for certain types of investment disciplines. And that’s why these kind of predictions...you have to take it with a huge grain of salt.” – Michael [04:26]
• Hedge fund managers, traders, and bond guys often tilt bearish—not due to superior foresight, but their need for market action.
• Ben observes that for years, top-down market valuation concerns (like CAPE ratio) were center-stage debate, but those warnings have repeatedly failed as bull markets endured.
• They're skeptical of historical valuation alarms, noting that present dynamics (ownership, global participation, technological change) break from the precedent.

2. America’s “Over-Equitization” & Global Stock Ownership

[06:43–08:46]

• The U.S. has hit unprecedented levels of equity ownership (over 55% of households), leaving other countries in the dust.
• Michael questions claims that the U.S. being "over-equitized" is a risk. With more people owning stocks, higher market cap/GDP ratios make sense:
  • "Of course the stock market is going to be higher as a percentage of GDP. More people own stocks." – Michael [07:43]
• They foresee international equity ownership rising, driving global market expansion.

3. Big Tech’s Supernova Earnings – “Quadrant That Shouldn’t Exist”

[08:59–13:35]

• Ben shares that Big Tech (“Mag 7”, i.e., Meta, Microsoft, Alphabet, Apple, Amazon, etc.) are showing both staggering size and growth:
  • "At that annual revenue growth, you should not be able to grow at the rate with which they’re growing..." – Ben [10:20]
• Recent earnings: Alphabet beat EPS expectations by 90%, Amazon by 70%, Meta by 56%. S&P forward earnings up 27% in Q1, highest since pandemic base effects.
• Tech capex is surging; e.g., the Big Four are hiking capital expenditures 77% over record 2025 levels.
• Free cash flow at Meta: up from $6.4B to $19B in two years, with operating cash flow rising from $19B to $32B in eight quarters. [15:49]

4. "We’ve Never Seen This Before" – AI, Anthropic, and Unprecedented Growth

[17:19–18:31]

• Anthropic's revenue growth outpaces anything in American (or world) business history, even Standard Oil:
  • "If the company’s current growth rate were to continue by early next year, they’d be taking in more money than any company in the world." – Michael [17:26]
  • “No precedent. We’ve never seen this before.” – Ben [18:16]

5. Stock Market Doubling Since 2022 & Bond Market Pain

[18:39–20:11]

• S&P 500 is up 100% from 2022’s lows, defying bearish expectations during the “recession panic.”
• Despite raging stocks, long-duration government bonds (e.g., TLT) have endured a brutal 40% drawdown, with returns negative for 11 years:
  • “If you sat through a 40% crash in this thing...and didn’t diversify your bonds, that’s your fault.” – Michael [20:16]

6. Inflation, Gas Prices, and the Market’s Indifference

[20:24–29:14]

• Gas prices spike ($5–$6/gallon in many places); hosts banter about the annoyance, but note inflation-adjusted costs aren’t historically extreme.
• Despite consumer angst, stock markets remain unfazed by higher gas and oil prices:
  • “It seems like we could get $6 a gallon gas in the country on average, and the stock market still won’t care.” – Michael [21:47]
• Analysis shows fuel efficiency and wage growth offset headline fuel costs for most.

7. Wealth Inequality: New Gilded Age or Historical Echo?

[33:02–34:30]

• Noting a viral tweet on Elon Musk’s net worth versus US GDP, hosts compare modern wealth concentration to the early 20th century, concluding things were even more skewed in the past.
• Yet transparency is new: "But thing is, no one knew about it. There weren’t these stats that showed people." – Michael [34:21]

8. US National Debt – Virtue Signaling or Real Danger?

[34:44–37:09]

• Steve Eisman quote: “The deficit is Wall Street’s version of virtue signaling...nobody asks why none of these predictions even come close to happening.” [35:12]
• Hosts agree the system’s reliance on Treasuries is fundamental; crisis is unlikely unless a truly superior alternative emerges.
• Main risk is seen as inflation, not “system-wide implosion.”

9. AI, Automation, & The Job Market's Future

[37:47–42:24]

• Sam Altman (OpenAI) shifts tone: “We want to build tools to augment and elevate people, not entities to replace them...job doomerism is likely long-term wrong.” [37:50]
• Ezra Klein example: automation didn't kill accountants, it boosted demand. “Computers can do much that humans once did, but they didn’t put humans out of work...The ability to do more made people realize there was more to do.” [40:31]
• Hosts expect business formation to accelerate and displacement to be offset by new kinds of demand, but recognize real transition pains for some.

10. Housing Market: Bubble Again? Not So Fast

[42:24–44:22]

• National home price index looks parabolic vs. last housing bubble, but today's boom lacks the rampant leverage, speculation, and bad loans of the 2000s:
  • “All the bad stuff that we learned our lesson on last time we figured out. And it's another thing we just kind of moved on and...dealt with it.” – Michael [44:02]

11. Private Credit, BDCs, & Risks Under the Hood

[44:22–46:28]

• Software/AI disruption risk in private loans is broader than headline numbers suggest, with notable portfolio overlap across major BDCs. Non-accruals rising, but public returns remain flat/positive.
• Hosts see much of the panic likely overblown.

12. Prediction Markets: Who’s Really Winning?

[46:28–50:42]

• Recent exposes show 0.1% of users take home 67% of profits (almost $500M) on platforms like Polymarket.
• Most users lose; insider knowledge is a real risk. Ben: “Only 75% lose. Whereas with day trading, 80% lose. Are you out of your mind? You’re bragging about this?” [50:17]
• Hosts are bullish on the future potential of prediction markets, but call for serious clean-up.

13. TV vs. Movies, Millennial Parenting, & Recommendations

[51:03–end]

• Ben notes TV production quality now rivals (or exceeds) most movies.
• Data shows millennial dads do 4x more childcare than boomers, but both hosts reflect humorously on the intense, all-consuming nature of modern parenthood and cultural shifts.
• Fun segment: The Bat ETF—tracking Michael's consumer purchases and their correlation to the S&P 500.

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Notable Quotes & Memorable Moments

• On Big Tech’s Growth:
  "At that annual revenue growth, you should not be able to grow at the rate with which they’re growing." – Ben [10:20]

• On Stock Ownership:
  "Of course the stock market is going to be higher as a percentage of GDP. More people own stocks." – Michael [07:43]

• On Gas Prices:
  "It seems like we could get $6 a gallon gas in the country on average, and the stock market still won’t care." – Michael [21:47]

• On Wealth Inequality:
  "But thing is, no one knew about it. There weren’t these stats that showed people." – Michael [34:21]

• On National Debt Panic:
  “The deficit is Wall Street’s version of virtue signaling...nobody ever asks the question, given all the agita around the deficit, why have none of these predictions ever even come close to happening?” – Steve Eisman [35:12]

• On AI & Work:
  "We want to build tools to augment and elevate people, not entities to replace them...job doomerism is likely long-term wrong." – Sam Altman (tweet, recapped by Michael) [37:50]
  "Computers can do much that humans once did, but they didn’t put humans out of work...The ability to do more made people realize there was more to do." – Ezra Klein (read by Ben) [40:31]

• On Prediction Markets:
  "Only 75% lose. Whereas with day trading, 80% lose. Are you out of your mind? You’re bragging about this?" – Ben [50:17]

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Detailed Timestamps

| Time | Segment | |--------|---------| | 01:53 | Reflections on Paul Tudor Jones interview, personality & investing styles | | 05:49 | Market valuation warnings (“CAPEs”) & shifting narratives | | 06:43 | US over-equitization, global stock ownership stats | | 08:59 | Big Tech earnings—Mag 7, “quadrant that shouldn’t exist” | | 12:31 | S&P 500 earnings growth (27% YoY) | | 13:35 | Record tech profit margins & capex surges | | 15:49 | Meta’s unreal cash flows/capex figures | | 18:39 | S&P 500 doubles since 2022 low; bonds (TLT) still hammered | | 20:24 | Gas prices, consumer pain, and inflation (history, implications) | | 33:02 | Wealth inequality: Musk vs. Rockefeller, historical perspective | | 34:44 | Government debt, Eisman quote on “virtue signaling” | | 37:47 | AI, Altman's messaging shift, automation/job market outlook | | 42:24 | Housing market: are we replaying the 2000s bubble? | | 44:22 | Private credit, BDCs, and under-the-surface risks | | 46:28 | Prediction markets, insider trading issues | | 51:03 | TV vs. movies, millennial parenting, cultural shifts | | 57:41 | The Bat ETF, Michael’s consumer purchases & lifestyle commentary | | 61:01 | Movie & book recommendations, fun banter over recent culture |

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Takeaways

• Today’s market environment is fundamentally distinct from past eras, both for reasons of widespread participation and the nature/scale of corporate growth, particularly in tech.
• Traditional valuation metrics (CAPE, stock/GDP ratios) may not tell the full story in an era where equity ownership and structural dynamics have evolved.
• Big Tech’s revenue and profitability are breaking precedent—the “quadrant that shouldn’t exist.”
• AI will create real disruption but may spark new business formation and productivity surges, echoing past waves of technological change.
• Market worries—about bonds, oil prices, government debt—may be overplayed, at least until feedback loops produce genuinely new vulnerabilities.
• Prediction markets are dominated by insiders and bots, echoing pitfalls seen in other retail trading venues.
• Parenthood and culture are changing just as fast as markets, for better and weirder.

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For questions, feedback, or to share your own market theories, email [e-mail].

Transcript

[Michael Batnick]

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[Ben Carlson]

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[Podcast Narrator]

Welcome to Animal Spirits, a show about markets, life and investment. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

[Michael Batnick]

Welcome to Animal Spirits with Michael and Ben. Michael, I want to start our podcast off by talking about another podcast. Okay. Paul Tudor Jones has on Invest like the Best with Patrick o'. Shaughnessy. You listened, I assume. Very good. He's a very engaging person. He seems like the kind of guy that you'd want to like sit on a porch with and have a whiskey.

[Ben Carlson]

Seems like a great guy.

[Michael Batnick]

Yeah, very like happy, jovial. Something about the southern accent I think just makes people sound nicer. Anyway, I thought this interview was very instructive in how to think about the personality of investors. Hedge fund managers. I want to get into that a sec, but I want to read you something that, that Patrick shared on Twitter. That was from the interview. So he says we're 252% of stock market cap to GDP now. In 1929, we're 65%. In 1987 we got to 85 to 90% in 2170%. He says if you think about the periodicity of significant bear markets since 1970, we get a mean reversal about every 10 years. And he also says that basically we're over equitized as a country. We have the highest individual equity weightings in the history of the country. He says the problem is that if you buy the S and P at the current valuation, the 10 year forward return is negative when you buy the S and P with a P of 22. That's what history shows. Okay? So he's saying, like, listen, he said valuation matters a lot and the stock market's really high and it's gonna be really hard to make money from here with any kind of long term view. Now if you just pull that out of there, there'd be two ways of looking at this. One would be, oh, this guy's right. If you look at the history and there's been charts of this forward PE at 22, 23, whatever it is, forward returns are not very good. So you'd say, how could you argue with that? The other person would say, these hedge fund managers have been saying this for years and they've been wrong for years. Don't listen to them. After listening to this interview, I didn't take any of that away from this. Here's what I took away from this. And you can see, I want to see if you took the same thing. He started the interview talking about how he always was kind of a Warren Buffett hater. I thought that was pretty interesting. I didn't realize that he's like, I poo pooed Whatever Buffett did, I thought his just thinking and acting for the long term, he kind of got lucky. He got a few ideas. He just rode the long term. He just wrote a long term trend. And he said, my personality won't allow me to do that. I'm a trader so I don't have that Buffet in me. And he's talked about how in 1987 he was predicting there was going to be a depression after the crash. And I thought, oh man, that's very interesting because Dalio in 1982 predicted there was going to be a depression in the United States. The start of perhaps the greatest bull market of all time. And I just thought that I think certain personality types are more well suited for certain types of investment disciplines. And that's why these kind of predictions like you have to take it with a huge grain of salt. So I thought his. Him explaining his personality and the way that he is hardwired like he has to be a trader, he has to be a speculator, he doesn't have the ability to be a long term and that's why he constantly is talking down on markets like that's why a lot of hedge fund managers are. And anytime you see a bond manager go on cnbc they talk about how bearish they are. It's because it's part of their personality. It has nothing to do with their forecasting abilities. It's all personality driven thoughts.

[Ben Carlson]

Totally. Yeah. 100%.

[Michael Batnick]

Then you get that out of his like listening to him explain his background because I've never heard many interviews with him him being bare. Because he's been bearish for a while. I think he's, he's made many bearish comments over the years. It makes so much more sense when you think about it from. In those terms.

[Ben Carlson]

Yeah. It is kind of wild that we're now here in 2026 and it doesn't happen so much anymore. But like in 2015, 2014 people were talking like it was a daily thing how expensive the stock market was. I don't think new participants realize that we used to argue about the CAPE ratio and why forward 10 year returns for stocks were going to be depressed in 2014.

[Michael Batnick]

You remember when Jesse Livermore did that whole huge 5,000 word epic on philosophical economics which if you're, if you weren't in the blog game around then that was. Those were the must reads. He was talking about that in like 2015 about how you. The market isn't as expensive as you think it is based on Cape.

[Ben Carlson]

Yeah, that's true. Now in fairness I was pushing, I was pushing back against Cape making the point that it is, it is different this time. But also I didn't. I expected returns to be lower. I genuinely did.

[Michael Batnick]

Yeah. We were saying temporal temptation.

[Ben Carlson]

Yeah. I also think that the market is obviously not cheap. Okay. Do without what you will probably not going to have. Have another 14% compound annual growth the next decade could happen. I don't know. What if AI and robots keep going? Could certainly could happen. But the part that I thought that I, that I would push back against is like the over equitization of America.

[Michael Batnick]

Yes.

[Ben Carlson]

This is the richest country on the planet and almost all of the wealth has been created by equity, by being a business owner. Why wouldn't Americans piggyback people like Elon Musk, who we'll talk about later, and all these people who made their fortunes building businesses.

[Michael Batnick]

So look at this.

[Ben Carlson]

Why would we not be over? Why would we not do that?

[Michael Batnick]

Look at this chart I just put in here. Paul Kow shared this today. It's, he says no country comes close to the US in stock ownership. And it's the United States at the highest. And this is through 2024. So it's higher now. I think United States is by far the highest at 55%. Canada's almost 50. You go to India, 6% of the country owns stocks. China is 7%, Germany's 14%, Japan, 15%. And here's the thing that I don't get too about the this is the Buffett indicator, the GDP to stock market gdp. It's so much higher now than it was in the past. In 1929, 2% of the country owned stocks. In 1987, 20% of the country owned stocks. Today it's 60%. Of course the stock market is going to be higher as a percentage of gdp. More people own stocks. There's more wealth in the stock market.

[Ben Carlson]

Yes, this, this is exactly what you would expect. It would be weird if it weren't the case.

[Michael Batnick]

Yes. If more money kept pouring in and it wasn't growing. So that, yes. My question is, you look at this country ETF or country and ownership thing, a lot of people would say, well, the US Is going to come down, but what happens when the rest of the world catches up?

[Ben Carlson]

No, the US Is not going to come down. This is the share of households with stock market exposure.

[Michael Batnick]

Yes. This is going to only increase this only I'm saying some people would say this is going to come down. It has to. It's never been down. My, my, I know.

[Ben Carlson]

By the way, by the way, I know you're not saying that. Yes, it absolutely is not going to come down.

[Michael Batnick]

Now this is a permanently high plateau.

[Ben Carlson]

Yeah. As a percentage of like, you know, household exposure. That's a different story. Right. Because of the market corrects. That number will pull back. But in terms of the percentage of people owning stocks, this number will only go higher, which it should go to 100%. I know it never will, but that's the goal.

[Michael Batnick]

And more people in other countries, as the barriers to entry have now been broken down, are going to continue to. There's going to be, India, in China are not going to be under 10 forever. They're going to have way more equity investors in the future as people gain more wealth in those countries.

[Ben Carlson]

Yeah, so last week we got, we got big seven, the max seven reported earnings. And part of what the bears could not foresee, nobody could have foreseen this, I don't think, is that these companies would continue to grow at the pace that they've been growing at and not just continue, that it would accelerate. So this guy, these are mind boggling

[Michael Batnick]

numbers that we're looking at right here.

[Ben Carlson]

Yeah. So I listened to all the calls last week, except for I don't think, I think not Microsoft. I did not do Microsoft. That one's too complicated for me.

[Michael Batnick]

When you go on quarter, do you listen, do you still listen to the CEO talk or do you go straight to Q and A?

[Ben Carlson]

It depends who the CEO is.

[Michael Batnick]

That's fair. I'm still a Q and A guy.

[Ben Carlson]

Well, I mean, that's where the good stuff is for the most part. All right, so anyway, just, you know, I was talking with you and Josh. The, the numbers, the top line numbers just defy anything. There's this guy, Evan Armstrong, who has a subset called the leverage, and he has a chart that shows on one axis the market cap. I'm sorry, the annualized revenue. Yeah, the. Okay. The annualized revenue on 1, on the x and then the year over year revenue growth on the Y. Okay, okay. And he calls this the quadrant that shouldn't exist. And it's Meta, Microsoft Alphabet, Apple and Amazon. And it shouldn't exist because at that size, at 80 billion, 100 plus billion, whatever it is, at that annual revenue growth, you should not be able to grow at the rate with which they're growing. Right, the size and the precedent. No, so I, I know we've been beating this, this drum for years. Years, years, years. You cannot compare these companies to companies in the 70s like or, or the 60s or the 80s or the 90s for that matter. Maybe the 90s are a little bit closer, I suppose, but not really. Not really. But if they weren't doing this, the reason, the reason why, like the reason why some of these calls are hard to digest is Amazon, for example. There's so much going on, there's so many different business lines in there. And Google as well, and Microsoft of course, forget about it.

[Michael Batnick]

This is the whole. Every time the bull market keeps going, someone says, yeah, but if this would have happened, then it wouldn't have kept going. This is the thing. If you had told me in 2017 when Scott Galloway's book, what was it called, the Four.

[Ben Carlson]

The Four.

[Michael Batnick]

Yeah, it was about Amazon, Facebook, Microsoft.

[Ben Carlson]

Yeah, you told me that wasn't the top. Nope, not even close.

[Michael Batnick]

If you would have said these companies are still growing just as fast now as they were then I would have said impossible. It's impossible. They can't. So Warren P had this thing where he says earnings boom is really accelerating now. Forward estimates are now up 25% year over year. And this is, he's saying like this, this is insane. So I look, I'm, I, I look it up. I said why is this happening? Of course the Mag7 is part of it. But so I looked at. This is from fact set. Seven sectors are now reporting double digigit earnings growth for Q1 2026 led the Communications Services 53%. Tech 50% and Communication Services basically is tech. And then consumer discretionary at almost 40%. Listen to what they. These companies beat on their EPS surprises. Alphabet beat by over 90%. Amazon by was 70%. Meta by over 56%. It's absolutely insane. The Mag 7 was 61% above expectations so far with earnings.

[Ben Carlson]

I forget where I pulled this from. Or maybe you pull this from somewhere. During the past week, earnings growth for The S&P 500 for the first quarter increased to 27% from 15%. If 27% is the actual growth rate for the quarter, it will mark the highest year over year earnings growth rate reported by the index since Q4 2021. And guess what?

[Michael Batnick]

Which included low base effects.

[Ben Carlson]

Yeah, a little bit of a different.

[Michael Batnick]

Remember that was a thing for a while, like once the base effects go away.

[Ben Carlson]

Yeah.

[Michael Batnick]

Remember the other one was what happens when the excess savings from the pandemic goes away? You don't hear that one much anymore, remember?

[Ben Carlson]

And at the risk of just sounding insanely bullish, how do you not sound like a.

[Michael Batnick]

How do you say data like this and not sound like a cheerleader? It's impossible.

[Ben Carlson]

I know. No, but I don't know. I feel like we're telling the truth. If it sounds like we're being cheerleaders. All right, guilty as charged. I suppose I'm telling you what's happening in the market. What if we. We had a conversation with Crane shares earlier in the week. What if robotics is the next thing like humanoid robots? And maybe that's a pipe dream, but maybe it's not. What if that's the next 5 trillion dollar market?

[Michael Batnick]

So in Dreesen Horowitz, A16Z has these charts of the week now, which is pretty cool, and they show the margins to your point about the 70s they see not your grandpa. Stock market profit margins at all time high again.

[Ben Carlson]

And yeah, don't ever show me the cape ratio. This that from the 50s when profit margins were 5%. You are comparing computers and something else. Something else. Ben, think of something clever.

[Michael Batnick]

So Financial Times says they talk about Google's numbers and they say big tech's AI spending plans rise to $725 billion. And they show the capex just keeps. Every quarter gets higher and higher and it's not coming back. This is from Mike Zuccardi.

[Ben Carlson]

Wait, I'm just staring at these numbers. I shared this with you and Josh. Let me just pull this up.

[Michael Batnick]

Okay, sorry. The one was the big four, which is Amazon, meta, Microsoft, Google are together expecting to spend 77% more in capex than last year, which was a record 77% more than the 410 billion they spent last year. Just these four companies alone.

[Ben Carlson]

So meta a company that the. The stock market is not. Excuse me. Super excited about right now. I think it fell 9% after earnings and there's no bounce.

[Michael Batnick]

You a buyer here?

[Ben Carlson]

I'm not. Purchases of proper.

[Michael Batnick]

Your paper count.

[Ben Carlson]

Nope. Purchases of property, plant and equipment was $6.4 billion for the quarter in 2024. In the first quarter. All right, just two years ago, that is 19 billion. So it went from spending 6.4 billion to 19 billion. Well, you would expect free cash flow to get destroyed, right? Because that's a lot of the Part of the narrative is their free cash flow is eroding really quickly. It's all being financed by debt. They're not going to be able to pay for this. Their free cash flow in the first quarter was 12.5 billion. And the most recent quarter is 12.3 billion. How? Well, their net cash provided by operating activities went from 19 billion to 32 billion in 1, 2, 3, 4 and 8 quarters.

[Michael Batnick]

Wow.

[Ben Carlson]

19 to 32 in 8 quarters. And think about how long the pandemic. How long ago the pandemic was. I'm only looking back to 2024. What was Facebook pre Covid.

[Michael Batnick]

And the stock market, the Stock's in a 24% drawdown at the moment.

[Ben Carlson]

So yeah, I don't, I don't. I don't think the market is the market. I is certainly not showing signs of euphoria, at least not in the Max 7. The stuff that's going on with the chip names is starting to worry me a little bit.

[Michael Batnick]

Western Digital, Sandisk, Micron. Yeah.

[Ben Carlson]

Now the, the earnings are up. I did this With Josh last year, last week on what are your thoughts? The earnings are up like 10x. So maybe what do you expect the stock to be doing? I think in one case, I think Santa's, the owners might be up 50x year over year. Not kidding. Something nuts. So I guess you would expect the stock to be, you know, going along in concert. But it's a lot of market cap. It's like up. See if you like. Micron goes up 8% every day. There is a lot of, there is a lot of chase.

[Michael Batnick]

Those stocks are up. Those stocks, they're like the new quantum computing stock. Seems like. So you mentioned the cash flow part. Bank of America via Mike Zakari Hyperscalers. Capex as a percentage of operating cash flow was 70% in 2025. Expected to be greater than 90% in 20. Holy smokes. They are just going for it. This is crazy too. This is from the Atlantic.

[Ben Carlson]

Hold on a sec. Capex as a percent of operating cash flow.

[Michael Batnick]

That's nuts. Correct. So this is below 25% in 2012. Now it's going to be 90%. This looks like a stock chart. Okay, give him the Zach Galifianakis gift there, Duncan. This is another crazy one. So the Atlantic had this piece on Anthropic, okay, so they say Anthropic's revenue is increasing faster than Zoom's during the pandemic, Google during the early 2000s, and even standard Oil during the Gilded Age. If the company's current growth rate were to continue by early next year, they'd be taking in more money than any company in the world. Not, not like 10 years out, not five years out, just the current trajectory to next year. Their revenue would be higher than anyone else. I don't know, man.

[Ben Carlson]

No precedent.

[Michael Batnick]

No.

[Ben Carlson]

We've never seen this before.

[Michael Batnick]

Yes. If you're comparing this to anything in

[Ben Carlson]

history, we've seen high growth. We've never seen gigantic rapid growth like this. Just never happened before.

[Michael Batnick]

It's not. All right. Exhibit I'm going to.

[Ben Carlson]

I'm going to take the under. I'm going to guess that they don't have the most revenue in the world. A year from now. I'm going to guess that the growth slows down.

[Michael Batnick]

You know, going out on a limb, that's probably fair. Maybe we'll be wrong. Exhibit A Chart of the week. This one surprised me. I didn't know this chart could. Matt sent us out last week. Exhibit a for advice.com if you want to learn more. We're now a double from the lows of 2022, the S&P 500 is up 100% from the lows. See, when inflation was at 8% in the fall of 2022 and the world seemed like, okay, there's recession is like any day now or we're already in a recession. You bought back, then you're up 100% in the S and P. It's pretty good.

[Ben Carlson]

I didn't think that should have got it all in.

[Michael Batnick]

All right, damn it. Let's give some bad news. I think this is bad news. TLT the iShares 20 year plus treasury bond, long term government bonds now have a negative return over the past 11 years. Nowhere for 11 years. Still in the 40% drawdown from the highs of early 2020, mid-2020, because rates have gone from essentially 1% or something to 5% now or something. Was this the easiest crash of all time to hedge of a pretty substantial asset? This is long term. Government bonds are a substantial asset. I don't know how many trillions of dollars are worth, but it's a lot.

[Ben Carlson]

What do you mean? Was it the easiest thing to hedge

[Michael Batnick]

because all you had to do is go short term? It was the easiest hedge of all time within fixed income.

[Ben Carlson]

Oh, yeah, I think that's fair. I don't think the time set bias. I think that's fair.

[Michael Batnick]

I think if you sat through a 40% crash in this thing and you've been in it since 2020 and didn't diversify your bonds, that's your fault.

[Ben Carlson]

Harsh, but fair. I. I did notice for the first time, gasoline is expensive. I filled up the tank, my wife's tank, by the way. I got a bone to pick with my wife. I don't know if your wife does this. There's never any gas in her car.

[Michael Batnick]

Okay.

[Ben Carlson]

Never. It's. Oh, the. It's somehow miraculously, the light is always on when I go in there. Except this time, There was only 10 miles left, and I had to take Kobe and his friend to art. So the, the. The gas light was like going on and off, and Kobe was like, daddy, you got to pull over. It's saying, it's saying pull over immediately. And I was like, I think we're gonna be okay. So I filled with the tank, and I think it cost 90 or so.

[Michael Batnick]

So look at the text message I put in here for my wife. Holy shit. Gas is $5 a gallon. There's something about rounded numbers that get the human brain to, you know, no one ever says, oh my gosh, gas is 4.75 a gallon. It's the round number thing.

[Ben Carlson]

I paid way less, relatively. I think mine was like 425. But I noticed the bottom line that that happened. I feel like that happened fast.

[Michael Batnick]

No, very. Look at the price of. Look at the chart of average gasoline prices. It shot up like a cannon. And it seems like the way that this works is that when oil prices rise, they rise. Like, what do they say? Rise like a rocket, fall like a feather. Is that kind of how gas prices happen?

[Ben Carlson]

I've never heard that before, but I like that.

[Michael Batnick]

I mean, I didn't make it up, but that's what's happening now. And it still seems like. I mean, we're. We're probably. I don't know, it seems like we could get $6 a gallon gas in the country on average, and the stock market still won't care. Is that possible?

[Ben Carlson]

The stock market still won't care?

[Michael Batnick]

It's funny because we're in a place where it seems like every six dollars is high.

[Ben Carlson]

I think. I think we're.

[Michael Batnick]

I mean, in a lot of places, we're getting pretty darn close.

[Ben Carlson]

Oh, you know what? I asked Charka to make this for me. A chart of gasoline versus the S&P 500.

[Michael Batnick]

I bet there's not much of a.

[Ben Carlson]

My suspicion was there's nothing there.

[Michael Batnick]

Yeah, I'm guessing there's not either. But here's the thing. Every single oil analyst, every single geopolitical analyst, every single investment pundit right now is thinking like, listen, the energy markets are all screwed up and no one is paying attention to this. But doesn't this seem like the most telegraphed risk we've ever seen? Like, it seems like everyone knows about it. There's no one that, if you're paying attention, you know about this. You know that energy stuff is true. So look at the chart from the Financial Times. Scroll down a little bit. The loss of oil supplies in 2026 is the biggest of them all since 1973. Bigger than the Iranian Revolution in the late 70s, bigger than the Arab oil embargo, bigger than the invasion of Kuwait, Iran, Iraq war, all these other things that happen in the Middle East. This is by far the biggest supply. And obviously, oil is. Is more. There's a bigger supply than ever because there's more people. But this is the Austin Powers where the guy is standing in the way of the steamroller. Get out of the way. Get out of the way. That's what this is, right?

[Ben Carlson]

Yeah. This morning, I think Robin rolled over onto the remote control and the TV Turned on and it was the local news. So I guess before Good Morning America, whatever it is, local news. And it started with gasoline prices, fire in the city, another fire. Somebody got stabbed in the face, murder. And then somebody spray painted a swastika on somebody's front door. I was like, what the. Is this. Is this for real? And I feel like we've had this conversation over the years. Like, this is just what the news is now. But this wasn't like. It wasn't like channel 12. It wasn't like that local news. It was like, it was one of the major networks. It was either channel four or channel seven. And I don't know why I'm talking about this, but, like, this is just what the news is. It's unbelievable. Literally.

[Michael Batnick]

Hang on a sec.

[Ben Carlson]

Gasoline, fire, fire, death, swastika. And then I turned it off. I'd had enough.

[Michael Batnick]

Sorry, I got a busy day. Doordash just came for me.

[Ben Carlson]

That's okay. You don't have to apologize.

[Michael Batnick]

No, this is. This is why I've essentially checked out of news. Like, I don't really. I pay attention to financial news, economic news. I've checked out of the actual news networks. I don't like to watch them anymore because it's just depressing. Is that. Does that make me a bad citizen?

[Ben Carlson]

No, no, they're not. They're not. They're doing you no favors. I have mixed thoughts about this, Ben. I mentioned that I have that brick thing, right, where you lock your phone. And I primarily did it because I don't want to be with my kids on my phone. But I realized one of the problems is in the morning I wake up and now I'm just on Instagram for an hour in the morning in bed,

[Michael Batnick]

from doing one thing to another.

[Ben Carlson]

Well, my screen time did not decrease. I'm embarrassed to tell you how much time I spend on my screen. You know, Apple gives you, like, your screen time for the week. So I blocked Instagram and I have hardcore mixed thoughts. I feel like I'm. It's a. No. I have it. I'm still. I'm on Twitter and Instagram. I'm on Twitter on my computer, and that's enough. I logged into Instagram today on the computer for the first time. I've never done that before. I was a mobile only desktop.

[Michael Batnick]

I know you could do that even.

[Ben Carlson]

But this is a big step. Cutting off Instagram. That's huge. Where am I gonna shop? How am I gonna find my fitness influencer stuff? Speaking of that, somebody. I did. I did Peek into the comment section because you guys shared something funny.

[Michael Batnick]

You had to get roasted for that thing last week.

[Ben Carlson]

I said, I wonder what people are saying about my fitness. So LaRosa, our colleague, said, this has to be the most ridiculous you've ever bought.

[Michael Batnick]

Right?

[Ben Carlson]

I almost crashed trying to zoom in for a better view while driving. Somebody wrote, that was the dumbest workout machine I've ever seen. And then somebody replied, I know. Lol. Can't you just swing your fist without a guide now? Yeah. Imagine I'm just doing this. There's resistance. There's resistance. So my Instagram purchases are obviously gonna tank, which I. I don't really love that that's where I get all my. But I did buy. I did buy one more thing, Ben. One more. My. My transition to fitness influencer is almost complete, so I'm not feeling great about my body. There, I said it. Feeling old. I'm looking old. Don't feel great. Body issues, Ben. You know what I bought? So my. I also bought this for practical purposes. You know, I have a rickety back. My back is, like, just aching all the time. I can't play basketball anymore, so I need to strengthen my core. Planks are very good for you now.

[Michael Batnick]

Yeah, I do planks.

[Ben Carlson]

Yes. Yeah, of course you do. The problem with planks, Ben, hurts your arms. So I bought, you know, the wrestler Edge. So Christian and Edge, you don't know wrestling. They have a. They. They have a mat. So it's like 2 inches of foam with grips and a timer. So guess what I've been doing every day, Ben? Planks. I'm getting in shape. And it doesn't hurt your arm or elbow at all. Pureplank.com Get 20 off. Now. You can't get any percent off, but it's working for me.

[Michael Batnick]

Why don't you buy a yoga mat?

[Ben Carlson]

Yoga mat? Those are this thick.

[Michael Batnick]

Your arms are that sensitive. You can't go on the.

[Ben Carlson]

I have sensitive. I have sensitive bones.

[Michael Batnick]

Okay. Got a bridge to sell you. Okay, So I think you put some charts in here from duality research, why gasoline is. And part of it is percentage of wages. Price of gasoline hasn't gone that much farther. Average cars are more fuel efficient than they were in the past. That matters a lot. So this is great stuff.

[Ben Carlson]

No.

[Michael Batnick]

Yeah. Adjust for fuel efficiency. Like, it's. It's much lower. I had Sean do.

[Ben Carlson]

Whoa, whoa, whoa. He did three adjustments. He did three adjustments.

[Michael Batnick]

Fuel efficiency, wages. Okay.

[Ben Carlson]

He adjusted for wages, huh? Right. Because we're comparing. Yeah. Guess what? Average hourly earnings have gone up a lot over the last 50 years. He could he adjusted for fuel, average fuel efficiency and then as a percentage of wages adjusted for fuel efficiency, the double adjust.

[Michael Batnick]

That's pretty good. So I had Sean just give me an inflation adjusted gas price going back to 1990. And we're essentially today on an inflation adjusted basis where we were in 2004 and 1990 for gas prices, just inflation adjusted, which obviously takes.

[Ben Carlson]

So not adjusting for inflation, which is obviously absurd. Not adjusting for wages and fuel efficiency. That's like saying houses cost so much more money than they did in the 1970s on a nominal basis without talking about A inflation and B, houses are a lot bigger and better. There's double the square feet. Obviously they're more expensive.

[Michael Batnick]

But this is also why gas prices will annoy people and people will complain about it and it isn't more annoying to spend more to.

[Ben Carlson]

It is annoying.

[Michael Batnick]

It sucks. Yeah, it does suck. But consumers will probably be okay as a whole. Some won't, most will. That that's probably where we fall on this, right?

[Ben Carlson]

That's right. Then this is a garbage store really.

[Michael Batnick]

But that's kind of the, the way that things have worked for this whole cycle. Something happens, it annoys people, but people kind of just still push through it and we're okay. That's where, that's where we've landed. See the Economist covers that's still in la la land. Why oil prices are not high enough, not yet high enough. They're kind of thinking the same way, I think. You know, I, I, I thought about there's a macro forecasting rule here because people have talked about, hey, if the Strait of Hormuz is not open by X date, we're screwed. If you're a macro forecaster, never give a date. Always just keep it open ended. Listen, if the straight up Hormuz doesn't open, energy markets are screwed. Oil is going to give a get an amount, you have to give an amount. Never give a date because the date thing, it always comes to pass and then you realize like, oh wait, nothing happened. Push back a month, don't give a date. Something to think about.

[Ben Carlson]

Sage advice, Ben. All right, this is a garbage survey. The share of Americans who say their financial situation is getting worse. So it's at an, it's at an all time high as far as this poll is concerned.

[Michael Batnick]

Yeah, it's a Gallup poll doing yes and Axios did this.

[Ben Carlson]

So right now the reading is 55%. And for context, during the great financial crisis, which was both great as well as a crisis, that number did not reach quite close to 50%. So more people are saying that the financial situation is getting worse now than in 2008. Or more likely, surveys are broken and. Or more likely, this survey is complete bullshit.

[Michael Batnick]

You can't trust them anymore, these surveys. You can't trust them. There's no way in any objective measure that people's finances are worse off today than they were in the financial crisis.

[Ben Carlson]

All right, but I want to. I want to read a tweet to you from this guy, Peter Diamandis, MD. I don't. I'm not.

[Michael Batnick]

I read his book. He wrote a book, like, 10 years ago talking about, like, the abundance in the future or something. Pretty good.

[Ben Carlson]

Not familiar with his work. He said Elon Musk just crossed $800 billion, roughly 2.7% of the entire US GDP. The last person to hold that much of the American economy, John D. Rockefeller in 1913. It took a century for anyone to match him. Rockefeller had oil. Musk has the future. Now that obviously, this is a lightning rod of a tweet, right? That in a vacuum, doesn't bother me so much. Now, say what you will about Elon, he's created a lot of wealth for others, obviously for himself. But that's what we do in this country now, you know, Is it. Is it crazy? Yeah, it is crazy. That's. But that's how. That's how this country works. That's capitalism. That's our system, for better and certainly for worse. I didn't love his response. His response was 10 trillion or bust. Now, I don't know if he's kidding or not. Whatever. He's obviously provocative, but come on, dude.

[Michael Batnick]

All right, so I was reading this week. Don't scroll down. I got a trivia question for you. So Today, the top 10% holds roughly 67% of the total wealth in America. Obviously, very. Wealth inequality is a thing, right? Two thirds of the wealth is held by the top 10%. I'm reading this book called Wall Street A History, and they're talking about the wealth concentration heading into the 20th or in the early 20th century, like, heading into, like, the roaring 20s. The top 5% of the population back then controlled what. What level of wealth? This is in the early 1900s, when

[Ben Carlson]

Vanderbilt died, and I guess when did he die, the late 1800s. He. There was some crazy stat. He had, like, as much money as. I forget what it was. Whatever, it doesn't matter.

[Michael Batnick]

It's way, way worse.

[Ben Carlson]

Top 5% controlled 80%, 90% of the wealth.

[Michael Batnick]

Crazy how much worse it was back then. This book says it's.

[Ben Carlson]

It's not wealth inequality. It's like it's massive wealth inequality between not just the haves and the have nots, the people that control this amount of money and everybody else.

[Michael Batnick]

Yes, right. And a power.

[Ben Carlson]

Right. It's. It's the people with, you know, whatever.

[Michael Batnick]

That, that number.

[Ben Carlson]

20 million and up.

[Michael Batnick]

That number blew me away that it was, that it was that much worse back then. But thing is, no one knew about it. There weren't these stats that like, showed people. Right.

[Ben Carlson]

Yeah. Rockefeller wasn't tweeting.

[Michael Batnick]

Right. All right. Government debt. This is from the Wall street journal. As of March 31, the country's public debt, publicly held debt was 31 point. Well, they got three decimal points. 265 trillion. Just over GDP. So it's 100% of GDP now, the national debt. This is the kind of chart you show people that you really want to scare them. Right. Look at this.

[Ben Carlson]

US Publicly held debt as a share of gdp.

[Michael Batnick]

Yes. So I pulled this, the Steve Eisman quote from when he was on TCAF with you guys, which was what, six months ago or so. Ish. 10 months ago.

[Ben Carlson]

Sounds about right.

[Steve Eisman]

The deficit is Wall Street's version of virtue signaling. People get on TV and they're like, they try to one up each other. I am against the deficit. And then the next guy says, oh, he's not against it. I have so much more against the deficit.

[Ben Carlson]

I hate it most. I hate it more than him.

[Steve Eisman]

He's nobody.

[Ben Carlson]

Okay?

[Steve Eisman]

And nobody ever asks the question, given all the agita around the deficit, why have none of these predictions ever even come close to happening? I think what they all miss is that the entire. Like I hinted at before, the entire financial system of planet Earth runs on treasuries.

[Ben Carlson]

All right, so true. It's like, what, you don't care. You don't care about putting all this debt on your grandkids? How selfish are you? You're leaving them the bill to pay for it. It's all virtue signaling.

[Michael Batnick]

I just, my whole thing is, I agree with him that, like, we run the financial system for better or worse until there is a something better than Treasuries that people are willing to put their money into. How is this ever going to be a crisis?

[Ben Carlson]

I don't know. Well, I guess maybe it's worth worrying about only in the sense that if it does, if we go over the line like this is. This is the system itself, right? Like, you can't, like it can't break because it's everything. The whole, It's a whole kitten caboodle.

[Michael Batnick]

Right.

[Ben Carlson]

I said that last week, didn't I?

[Michael Batnick]

If a better system comes along, that if something, if there is a better alternative to Treasuries in the US dollar.

[Ben Carlson]

No, I know. My point is it's worth, it's worth worrying about. Even though I don't like the hyperbolic constant worrying, it seems to be a waste of time.

[Michael Batnick]

I just seem to think that inflation remains the biggest risk of all this spending, not like a system wide crash. That's where I fall on like, oh my gosh, everything's going to implode. That.

[Ben Carlson]

Yeah.

[Michael Batnick]

I just don't see that as being a big worry.

[Ben Carlson]

Well, I have good news on the inflation front. At least here in midtown Manhattan. I got Chipotle today. It has been a minute. Then 1285.

[Michael Batnick]

I feel like you're in an abusive relationship with Chipotle because you, you like break up once every six months and then come back and tell us you got back together.

[Ben Carlson]

I'm basically done ordering Chipotle only because I'm just not in the city that much, you know, I mean, there is

[Michael Batnick]

one right next to our office in New York.

[Ben Carlson]

Yeah, so convenient. But I remember it broke the $14 barrier.

[Michael Batnick]

So you think that they, they lowered prices at Chipotle?

[Ben Carlson]

I know they did.

[Michael Batnick]

Okay, that's good.

[Ben Carlson]

It is good.

[Michael Batnick]

All right. Do you think that the AI people finally got the memo? This is Sam Altman tweeting last week. We want to build tools to augment and elevate people, not entities to replace them. I think a lot of people are going to be busier and hopefully more fulfilled than ever. And job doomerism is likely long term. Wrong. Okay. I'm hopeful for a future where people who want to work really hard have incredibly fulfilling things to do, and people who don't want to work hard don't have to and can still have an amazing life of prosperity. PR people finally got to them right? Said, hey, guys, come on, stop talking about how this is the end of the world. Stop talking about labor market apocalypse.

[Ben Carlson]

Not doing them any favors.

[Michael Batnick]

Maybe I am. What do you call it? A Cassandra. I'm a glass apple person. I tend to agree with them. Even if he. I don't know if he believes this or not. I agree with his statements more than I do with Dario from Anthropic.

[Ben Carlson]

So do I. So Ezra Klein was writing in the New York Times in an op ed, why the AI job apocalypse probably won't happen. And he said the more automation there is, the more people value a human's touch. Take coffee. It was once a laborious. It was once laborious to make espresso at home. Now Nespresso machines are everywhere. Has that led to Starbucks closing and neighborhood coffee spots dropping in prices? Of course not. There are more baristas than ever. There are more coffee shops than ever. Coffee as a commodity led to more demand for coffee as an experience, he said in 1979. So bear with me, I'm gonna read for a sec. In 1979, VisiCalc, the first electronic spreadsheet, was released for the Apple II. It could do in minutes what previously took teams of accountants days. There were predictions of mass unemployment for bookkeepers instead, the number of accountants quadrupled over the next 40 years. The spreadsheets didn't replace the accountant, Maximoff writes, it unleashed latent demand for financial intelligence that had been there all along, waiting for cost to fall far enough to be demystified. So they talk about Javon's paradox and he says this, Maximoff thinks, is what AI is likely to do even in the industry's most exposed to disruption. He thinks that in part because it happened before, quote, in every major occupational group that adopted computers heavily, employment grew faster than in groups that did not. Computers eliminated specific tasks within jobs. But the resulting cost reductions created so much new demand that the occupations expanded overall. Computer. And here's Ezra speaking. Computers can do much that humans once did, but they didn't put humans out of work. The ability to do more made people realize there was more to do.

[Michael Batnick]

I agree with this. And someone's going to say, you idiots, this is different.

[Ben Carlson]

It is different. It is different, but, and also it's confusing because for all the reasons we don't need to get into about the obvious threats that AI poses, but there will be layoffs that are blamed on AI and part of them will legitimately be AI. But we heard from Coinbase this morning, coinbase is cutting 14% of their staff. It's 700 people. And they're citing AI. Of course the stock is, you know, crypto is not, you know, not, not hot right now.

[Michael Batnick]

But he also said like, yeah, crypto's in a winter, we're in a bear market. So it makes sense to. Yeah, and they obviously over hired, but yeah, this is, and there are going to be certain industries. I just, I'm, I'm having a more positive view about this now probably than I did six months ago even.

[Ben Carlson]

Well, here's another one positive Positive view. Torsten slack. He said AI's most exposed industries keep hiring. Nearly 2 million workers in the Philippines now work in call centers, up every year since 2016. And through the AI boom again. This is Javon's paradox in action. As AI makes call center work cheaper and faster, companies are buying more of it, not less. And then finally, Derek Thompson. Patrick Collison, founder of Stripe, tweeted, stripe Atlas just hit 100,000 all time incorporations. And Derek said Stripe data shows that startup incorporations are way up and startups and AI are seeing faster growing revenue than is historically normal. For now, AI agents are better at creating firms than destroying jobs. So I haven't all of a sudden gone from worrying about AI to not worrying about AI, because I think I. I don't think this. I know this. Everybody knows this. That there will be displacement.

[Michael Batnick]

Yeah. The worries are legitimate in some areas for sure.

[Ben Carlson]

Yeah. But it's not black or white.

[Michael Batnick]

Yes. And I do agree that, like, business formation is going to explode and it's going to keep exploding and the ability to start your own thing will be easier than ever because you can ask all the questions in the world that you want. Alec SAP Stapp put this in the housing bubble in late 2000s. Looks quaint by comparison now. Okay, imagine showing this to someone 10 years ago and trying to convince them that today is not a bubble when the last one looks like it's. We left it in the rearview mirror.

[Ben Carlson]

This is cute, but it's like this is kind of a dumb chart. No offense. Only because. Or it's not dumb. It's incomplete. Because it was the leverage, it wasn't the prices.

[Michael Batnick]

Wait, what?

[Ben Carlson]

This is showing the national price index.

[Michael Batnick]

Yes.

[Ben Carlson]

And the reason why there was a real estate bubble in the 2000s isn't because real estate prices were going up 15% every year. It's because prices were going with no equity down.

[Michael Batnick]

Yeah, you're right. It was both. It's just. It's interesting to try to explain to someone how prices could be up as much as they are in the 2000s without having that stuff happen, without having the leverage, without having the home equity line of credit craziness. Like, without the. It's. It's hard to fathom. It would have been hard to fathom. We could have this boom without that stuff, without the speculation and people buying eight houses and eight condos. Right. And the strippers who are buying three condos in Las Vegas or whatever like that. We didn't have that this time.

[Ben Carlson]

Yeah.

[Michael Batnick]

Look, I found this I'm not trying to pat myself in the back here. We've been talking about this forever. I wrote why this is not another housing bubble in April of 2021.

[Ben Carlson]

What was the TLDR?

[Michael Batnick]

It's just because people locked in low rates, people had way higher credit scores and people weren't borrowing their faces off and they weren't doing the adjustable rate mortgages. Like all the bad stuff that we learned our lesson on last time we figured out. And it's another thing we just kind of moved on and we. We dealt with it.

[Ben Carlson]

All right, let's do private markets real quick. So Pitchbook did an analysis of private credit loans and top public BDCs.

[Michael Batnick]

Does it feel like we moved on from this risk in terms of like the zeitgeist?

[Ben Carlson]

Well, because, you know, you said it best. We can only pay attention to so many panics at once.

[Michael Batnick]

Yeah. We move on.

[Ben Carlson]

And also prices stabilize. Right, like that. That helps. So this doesn't Sound great. They're Q4, 2025 takeaways, key takeaways. Software exposure and related AI disruption. Risk is larger than surface level number suggests. Oh. Software alone accounts for 25% of the top 10 BTC's portfolio fair value. And the real exposure runs deeper once you look past sector labels. Not great. First, lean yields contracted by roughly a point over the past year. Lower base rates and tighter cash spreads drove the decline. Not great. Non accrual stress is growing in dollar terms even as headline counts hold flat. Not awesome. And then lastly, borrowers overlap is deeper than investors might assume. Some names appear across five or six BDCs simultaneously, meaning a single credit event ripples through multiple portfolios at once. Okay. All right. So not awesome. Yeah, not awesome stuff. And then I was looking at some of the performance of the biggest publicly traded BDCs. Gallup Capital, Blue Owl, Aries. And I'm looking at the total return year to date. And it's like, what are we talking about? Golub is up 4.5%. Blue owl, like the. Which is like the eye of the storm is down 1.2%. Yeah, sure, it was down. It was down worse. It's just. It's a lot of energy. And I understand why. I understand why we spent so much time by private credit. It just feels like outsized given. It feels unfair and fair in certain ways, but it's. It's flat.

[Michael Batnick]

So this could be a situation where a lot of the weekends got chicken out at the same time.

[Ben Carlson]

Yes. And also tbd. Right. Because we don't know what AI is going to do to the software in these portfolios. So we shall see. But I'm glad.

[Michael Batnick]

Take a while.

[Ben Carlson]

I'm glad that we're moving on because it did feel like it's getting overdone. All right, let's do so survey prediction markets. Bloomberg and the Wall Street Journal both ran some stories on this.

[Michael Batnick]

So I made the joke on Twitter that this was like the same summer when Deep Impact came out at the same time as Armageddon. And remember there was Dante's Peak and the volcano movie came out at the same time.

[Ben Carlson]

Yeah.

[Michael Batnick]

I think there was a Mars Red Planet 1 where it's like they got the same idea. So Bloomberg and the Wall Street Journal both did independent studies of somehow they opened up the books and figured out who's making money and who's losing money. They both did it. Good numbers. And the TLDR is not great for people who are on these platforms.

[Ben Carlson]

No, shocker. Here's a good one. On Polymarket, there's Noah. Colin tweeted this. On Polymarket, The Journal found 67% of profits go to just 0.1% of accounts. That means less than 2,000 accounts netted a total of nearly half a billion dollars. I said this a couple months ago and I will bang the table on this. Bang the drum on this. You should not be allowed to wager on outcomes that can be known in advance. For example, you can't know who's going to win a basketball game. Now there might be a player if you want to whatever be annoying. There might be a player that's like trying to throw the game but in general just stop. You can't know who's going to win the the a basketball game. You can't know how many Teslas will be delivered in 2030. Right. Or how many humanoid like things like that in the future events. Nobody knows. But if there are things that you can bet on where a small number of people might have that information, cannot bet on it.

[Michael Batnick]

Well so Obviously, yeah, that 0.1% is obviously is mostly insider trading. The thing is cannot do it. You would think that they would want to get rid of this because that's causing people on their platform to lose money. That money comes from the losers of those bets. The fact that the 0.1% accounts for all the take home profits, they should want to root out that bad behavior. Right. They should not want that to stay there.

[Ben Carlson]

So you said this is what, this is what the prediction markets are for. Will Gamestop buy ebay? Great. Nobody knows.

[Michael Batnick]

Right.

[Ben Carlson]

You want to wager on that, get closer to the truth, because there'll be a marketing. I'm all for it.

[Michael Batnick]

Should Ryan Cohen be able to bet on that from gamestop? No, he should not be able to bet on that.

[Ben Carlson]

Yeah, yeah, but. But even he doesn't know now. Maybe, I guess as it gets closer. But you would assume that's reflected in the data. Either way, stuff that people can know in advance, get rid of it.

[Michael Batnick]

What is this thing? What is a. What is. Apart from Bloomberg that says that bots netted 131 million at the expense of other poly market users. Is that just algorithms that are trading?

[Ben Carlson]

It's like market makers. Okay, this is hilarious. This is really hilarious. The head of comms at CalShe, the Wall Street Journal, came to us with a profitability analysis of public calci profiles of public calcium profiles, which was inaccurate because the majority of traders keep their profiles private. So we did the analysis ourselves and gave it to the Wall Street Journal. Our analysis showed that Cal State traders win more than they do on day trading options, sportsbooks and futures. Are you kidding me? That's like saying cocaine is healthier than crack. And like, doing a victory lap. It's the first time we've given out that data. We debated whether or not to give it out, but we figured it was better than a shoddy analysis that showed people lose a lot more than they actually do. So this is the chart. They showed the percentage of traders who lose and yeah, prediction markets, only 75% lose.

[Michael Batnick]

This is a brutal chart. I didn't see this.

[Ben Carlson]

Only 75% lose. Whereas with day trading, 80% lose. Are you out of your mind? You're bragging about this? You have a better chance of making money in prediction markets and options.

[Michael Batnick]

Look at these numbers. I'm not.

[Ben Carlson]

I'm not a prediction markets hater. I love gambling. And I think that, like. Yes. Even though I hate that it's. It ruins lives. It's lots of things that runs live. It's a straw man. I want to go there. I love gambling, but clean it up. Yeah, clean it up.

[Michael Batnick]

You can't have the insider these numbers that options lose money 90% of the time. Sportsbooks lose money 95% of people who are on there.

[Ben Carlson]

Lukawa made a chart at Sherwood showing that Robinhood made more money on event contracts and cryptocurrencies in the most recent quarter.

[Michael Batnick]

Wow. Which says a lot about both industries at the moment, obviously.

[Ben Carlson]

Yeah. Ben, let me ask you a question. Are TVs now movies in terms of quality? How Come. Beef is so good in terms of production now. Somebody emailed me like, Beef went off the rails. It jumped the shark in. In season two. I. I'm guessing this person didn't watch season one because it was the same thing where it was sort of plausible, and then it just went completely kablooey.

[Michael Batnick]

Yeah, right.

[Ben Carlson]

Like, I don't know. It's. It's absurd. That's sort of the point of the show. It's an absurd show, but just the production. Now, you might. You might not have liked the way that season two ended or season one ended or whatever, but that's not the point. The point is, like, the gap in quality between shows and movies is massive. And it's opposite. It's, like, backwards. Whereas, like, all of the Netflix movies are such garbage. Like, they're just. They're just garbage. Movies are crap. They're. They're not well done. And I think they know it. It's quantity over quality, whereas. And not all tv. A lot of the TV is crap too, but just seems like the quality in TV is. Is better in a lot of cases.

[Michael Batnick]

It's also crazy to think that almost every show now has a movie star in it. There's movie stars in all the shows now. There's shows that are out with movie stars that you've never heard of these shows before, and you go, wait, that's on right now. Nicole Kibbon's in another TV show. It's kind of hard to wrap your mind around. Yes, the quality is way better. We started Beef. It's a hard show to watch because just things keep happening that are bad to people, but you want to keep watching to see what happens.

[Ben Carlson]

It's like the opposite of rooster. It's like, it's not a very. It's not a very chill show. You don't. You don't watch that to relax.

[Michael Batnick]

Yes. I can see why you like it, though. All right. Derek Thompson did a good piece on millennial parents, and they have the numbers here. Millennial dads do four times more childcare than boomer dads did. And it shows that every generation does more childcare per day than the previous. The silent generation didn't do a whole lot right. Baby boomers did a little more. Gen X did a little more. Non millennials do more. This is just obviously a sign of learning and progress. And then it's not. It's not like saying one generation is better than the other, because I think you could make the claim that there's a lot of millennial parents who Are so helicopter that it's bad for their kids. Right. But this, this is. This isn't something new. You notice this with all the other dads around you too, right? That they are just so much more involved than the previous generation was. It's. It's obvious.

[Ben Carlson]

A lot of factors in here. I feel like I am with my kids all the time. All the time. I'm home when they get home. I'm home when they go to bed. I guess it's like normal. I'm with my kids all the time. It's all weekend. And if I sound like I'm complaining maybe a little bit. It's a lot. It's a lot. I had a fantastic relationship with my dad growing up. Still do. And I never saw him. We didn't live in the same house. Mean, my parents were divorced, so I saw my dad like twice a week. And I think I probably spoke to him every day. I can't remember. I'm. You know, we're getting old, but so I'm not saying that, like, that was good. This is bad. This is good. That was bad. Like it's, you know, it's. It's. It's not black or white, but I am. I was thinking this weekend, like we just did kid. The entire weekend.

[Michael Batnick]

Yeah. Yeah.

[Ben Carlson]

And it's. It's. I don't know. It doesn't. It kind of feels. It kind of feels a little nuts.

[Michael Batnick]

It's impossible to go to a kids event of some sort, sports or whatever, without hearing another parent talk about how busy they are with sports for other. For their kids. Oh, this morning we did this. And we did this. You hear that same conversation every thing you go to. But.

[Ben Carlson]

And we're not. We. We don't. We're. We don't overdo it with activities in the sense that, like, my kids are not doing 19 sports. I don't have, like, superstar athlete kids. Like. But it's just. It is. My goodness, is a lot. Derek says something that I'm gonna. I will take on Butch with. Oh, did I put this in here? So anyway, there's a chart in here. I'll get. I'll get back to that. In a second birth of first child. So there's a chart that shows dad's health declines. Guilty as charged. But his life satisfaction remains high. Look at this health. That's kind of wild, right? I mean, this. That's been my experience, not yours, Ben. You bucked the trend. But not that. I was a model of health before my kids were born. But holy Shit.

[Michael Batnick]

This is when we had twins. I realized that if I'm going to have energy to continue living my life like I want to, I need to change like my health. Because three kids and no sleep and like. So I made a con concerted effort to change my health when my twins were born.

[Ben Carlson]

Oh yeah. Okay.

[Michael Batnick]

I mean I. I got one of these weights that I do this with and I do it all day.

[Ben Carlson]

Oh, here it is. All right. This chart. I'm going to, I'm going to call on this. Maybe this doesn't make me sound good, but I'm. I'm giving you my opinion.

[Michael Batnick]

Okay.

[Ben Carlson]

Dads like child care more than watching tv.

[Michael Batnick]

Really? Like, look at me, I'm.

[Ben Carlson]

I'm making a face. Do they really? Do they really? Because I gotta be honest, I don't. I love watching TV and I love my kids. But. So Kobe is not. Kobe is now staying up until, I don't know, 9:15, give or take.

[Michael Batnick]

When the kids used to go bed at seven o', clock, you had a lot longer to just like decompress. Right?

[Ben Carlson]

So guess, guess what time I go to sleep. I'm like sleepy at 9:45. I'm exhausted. And with these playoffs, forget about it. I'm really tired and I wish I could watch more tv. And I know we talk a lot about tv, but it takes me a lot longer to get through a show and listen. I know it's like that's normal, right? Like we don't, you know, we have to prioritize our kids and we do and I do. But I like watching TV more than I like being with my kids at 9:15 at night. I'd rather be watching TV.

[Michael Batnick]

At a certain point we have figured out how to. I'm going through the 90s catalog with my kids now and it's like if we're going to watch tv, I want to watch TV with you. So this week we watched the River Wild with my kids. Loved it.

[Ben Carlson]

So good.

[Michael Batnick]

I introduced my daughter Libby. She likes rom coms now.

[Ben Carlson]

We watched Sleep River Wild is a tough watch for kids.

[Michael Batnick]

Yeah, it wasn't as bad as I thought.

[Ben Carlson]

When they not kidnapped. When they take the dad and they're beating the shit out of him.

[Michael Batnick]

Oh yeah, Sleepless in Seattle. I watched with my daughter the other night. Just perfect rom com. So anyway, I'm trying to. Yes. Make them sit more still and watch with me too, but. Yeah, you're right. Give and take, right? There's trade offs as always. I like this comment from last week. We need the Bat etf, B A T, Batnik etf. Invest in all residential H vac, like carrier unreliable. Automakers, Stellantis, Tata Motors, Auto Finance, Ally Auto Parts. What is that, O'Reilly? New refrigerators and even mudroom components. Home Depot and Lowe's all tracking Michael's major consumer purchases. Let's see if it outperforms the S and P. Well, track this.

[Ben Carlson]

I haven't said it yet, Ben, but getting a mudroom. I am getting a mudroom. You haven't been to my new house. Contractors and you walk into my house and there's, like, little, tiny, like, there's like tiny little cubbies for the sneakers and stuff. And there's no, like, hangers. So we just throw everything down and then you walk up the steps. So I don't know where to put everything. So we're getting mud room. I'm selling. I sold more crypto to. I know. I bought more crypto a few weeks ago. Whatever. I'm. I need. I need some cash. What are you going to do? Right. Got to buy a mud room.

[Michael Batnick]

So you have to, like. You're, like, doing. You're moving walls and stuff.

[Ben Carlson]

I'm moving walls and stuff. Yeah.

[Michael Batnick]

All right. That's fun. I think we should have Claude track this portfolio for us. All right. A bunch of people sent me this. You had the. What do you call it? This guy. That guy there was. There was LeBron thing going on where he said, get a load of this guy is a new meme. And that's when we hadn't added to the list. Get a load of this guy.

[Ben Carlson]

Get a load of this guy.

[Michael Batnick]

Yeah, that's a good. That's pretty good.

[Ben Carlson]

Ben, I tagged you on Instagram because you wrote a new book and you. Your handle is Ben Carlson 007 or something. 007, is it. Are you a huge bond guy?

[Michael Batnick]

No. 7 was my number in high school. I was just trying to get seven into it. So, no, I'm not a bond guy at all. And to be honest, I. I don't. I'm not really on Instagram, so I didn't even know that you tagged me on something.

[Ben Carlson]

Okay, well, I did.

[Michael Batnick]

Oh, okay.

[Ben Carlson]

Well, I am. I am quite torn about this Instagram stuff, I gotta be honest, because I really love it.

[Michael Batnick]

You're right.

[Ben Carlson]

And I. But I'm worried that if I don't have Instagram or Twitter on my phone, I really am going to lose connection with the outside world a little bit.

[Michael Batnick]

See, I just. I only have.

[Ben Carlson]

I can't help myself. I'm an addict.

[Michael Batnick]

I only have the bandwidth for one social media thing. My wife always gets mad at me because she sends me like funny memes on Instagram, but I never check it. And she always gets mad at me for not checking.

[Ben Carlson]

Like that's how I know what people are doing that I care about. You know, like friends and family and stuff.

[Michael Batnick]

We have to be like me. I don't care what my friends and family do. That's fake lives now.

[Ben Carlson]

You know, I think, but I think, I think if I just look at Instagram for 20 minutes a day on, on the computer, that should suffice. I don't need on my phone.

[Michael Batnick]

Okay, 20 minutes, hour, and then you're back to square one.

[Ben Carlson]

Yeah, Yeah. I need some recommendations, people. I've got a non stick pan and guess what doesn't work. Shit sticks. I know there's probably chemicals. I know there's like a whole. You know, people have a lot of feelings. I'm sure Duncan could chime in on the nonstick pans. I got like the hex pan or whatever it's called. And I remember my eggs are sticking. So I also. I need a full. I need a full reboot on my kitchen stuff. I still have like plates for my wedding, I suppose, but like, if you were to look, if you were to walk to my house. My kitchen is a disaster in the sense that nothing matches. I've just like hodgepodge. I've forks and spoons that don't match. I have cups that I need like a. I just need like to throw everything out and start over.

[Michael Batnick]

We did an Airbnb and we found some silverware we really liked and we, we bought the silverware because it, like the functionality of it. I've been using AI for so much more when it comes to shopping. Would you. I want to buy this. Well, what about these things? And I. How about this? And I, I have back and forth all the time about shopping now about big ticket items. Okay, let's do recommendations because we had to go soon. Marty. Supremes on hbo. Max. I watched it. I feel bad because I feel like I'm constantly a hater of the new movies that everyone loves.

[Ben Carlson]

You didn't like Marty.

[Michael Batnick]

Come on, dude, listen, it was really well acted. It was really well. It was like a cinematic. It was very visually pleasing. I'm not sure what the point of this movie was. I thought, I'm gonna watch a guy who's like a ping pong project.

[Ben Carlson]

Yeah, true. You're right. It wasn't about absolutely nothing.

[Michael Batnick]

Well, what was the point when, like, the bathtub fell through the floor and then they lit the gas station on foot? Like, weird. It was. The plot jumps that happened in this movie were so bizarre. And I didn't understand, like, what, what was the point of, like, a bathtub fell on top of a guy and his dog? Like, I don't. It made. It had nothing to do with the plot. It was bizarre. The stuff that happened in this movie from a plot perspective. I was like, well, I didn't, I just didn't get the choices. It didn't make sense to me. It was very high quality. The acting was great. I love seeing Gwyneth Paltrow again. Shalam was, you know, he was, he was good. I didn't understand what the point of this movie was.

[Ben Carlson]

You're breaking my heart, Ben. I can't get behind you on this.

[Michael Batnick]

I'm sorry. I, I. Are you ever going to watch this movie again? One time in your life? There's no way. It was very high quality.

[Ben Carlson]

I will watch it. I will watch it. If I'm on a JetBlue flight and there's nothing else to choose from. I, It's. I, I had a great time watching it.

[Michael Batnick]

It was high quality. I don't understand the point of it. Just, it's just like one bad.

[Ben Carlson]

It's no train dreams. A guy looking at the sky, missing his family.

[Michael Batnick]

Yeah, that actually has some meaning to it.

[Ben Carlson]

Sure. All right. What else? What else do you hate?

[Michael Batnick]

My audible recently. The History of Money by David McWilliams. And it's a history book that just goes through the power of incentives and money and how it happened. And there was two stories in here. Anytime I have a new nonfiction book, I just want some anecdotes to pull out. There was two. Two of these that I've never heard before. Tell me if you've heard these before. One, during World War II, because he lived through Weimar Germany in hyperinflation. Hitler was planning on. Hitler had counterfeiting going on day and night, and he was going to drop out of planes, like $10 billion on London and try to try to give them hyperinflation. He was going to try to wreck the system using money. And supposedly it got. The war got too far on and it never happened. But this was a actual thing. They had counterfeiters at concentration camps making money that they were going to drop in London. And the funny thing is, if that happened today, I don't know you, you would never have enough airplanes or currency. Think how much, how many Trillions of dollars we spent in the pandemic. It would be impossible to do today. 2. Supposedly, there's a theory that the wizard of Oz was a movie or a book written about the downsides of the gold standard. I'd never heard this theory.

[Ben Carlson]

I've heard that before.

[Michael Batnick]

Okay, I never knew that. Anyway, two anecdotes from that book I really like. Like most history books, there's a lot in there that, you know, it's probably unnecessary, but I. I enjoyed that one. One more thing.

[Ben Carlson]

Yeah.

[Michael Batnick]

I listened to your CAA book, and I listened to your Three Kings book, the Spielberg.

[Ben Carlson]

Oh, you listen to the CA book? How good was that?

[Michael Batnick]

Here's the thing that it's. Those books are very interesting with the stories. Also kind of depressing that I feel like to be in a position of power that big, you have to kind of be a bad person. And I don't know how to reconcile that in my brain. Well. Well, not a bad partner.

[Ben Carlson]

Everybody loved him.

[Michael Batnick]

But, like, the. The people in power, you almost always have to step on next to get there.

[Ben Carlson]

Oh, yeah, yeah, yeah.

[Michael Batnick]

Take money that could have gone to other people. And that's the part that's kind of. It kind of bummed me.

[Ben Carlson]

Did you like the. Did you finish the. The King's book?

[Michael Batnick]

Not yet, but it's. I never knew the story of DreamWorks like that, so it's. It's news to me.

[Ben Carlson]

That's great. All right. Last thing I. I saw season. I saw episode one of your friends and Neighbors. And you know what's interesting about that show? I'm not sure how the season's gonna unfold. Whatever. It's a fine show. I enjoyed it enough. I feel like there's, like, this weird paradox where the characters are simultaneously so unrelatable in terms of the life that they live. Right. Like, the luxuries and the way they all look and whatever. Like, I don't know anybody like that. Right. I. I don't live near people like that. I don't know anybody who would be on that show. And yet their characters feel themselves, feel very relatable in terms of what's. You know what I mean? Like, just in terms of what's going on. Like, what actually matters to their life, the relationships.

[Michael Batnick]

Like, I love John and Amanda, John Hammond, Amanda, Pete. So that's why I watch the show. I'm still. I think season two is good. We're. We're. We're all caught up halfway through the season. I like it. Zach Lowe was on the last show.

[Ben Carlson]

Okay. Okay. Yeah, I heard he's with an og. Makes a. Makes an appearance.

[Michael Batnick]

Yeah, there's an NBA player.

[Ben Carlson]

Okay. All right. Okay. That's about it. We are out of time. Edible spirits@the compoundnews.com. thank you very much for listening.

[Michael Batnick]

Hey, listen, it's not always gonna be like this. There's gonna be a correction. Stocks will go down. It's not always going to be like, oh, my gosh, this is so amazing. But enjoy while it lasts.

[Ben Carlson]

All right, we'll see you next time. Thank you.