Time to Get Bearish? (EP.401)

Summary

Animal Spirits Podcast - Episode 401: "Time to Get Bearish?"

Release Date: February 26, 2025
Hosts: Michael Batnick and Ben Carlson

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1. Market Outlook and Economic Indicators

The episode kicks off with Michael and Ben reflecting on the increased caution among investors regarding the economy and the stock market. They delve into the factors influencing this sentiment, highlighting that the current market sentiment isn't driven by a significant market downturn but by underlying economic signals.

Key Insights:

• Economic Slowdown Indicators:
  Michael references Neil Dutta, an economist at Run Mac Neil, who suggests that the prevalent concerns about tariffs and uncertainties are merely "red herrings" masking a genuine economic slowdown. Dutta anticipates a decline in long-term interest rates, a sell-off in equity prices, and deteriorating job market conditions ([03:16]).

• Market Stability vs. Caution:
  Despite the market being relatively stable—with the S&P 500 only 2.5% off its all-time high and the VIX at 19—Ben observes that sectors like industrials are showing persistent weakness ([05:32], [07:00]).

Notable Quote:

Ben Carlson ([03:20]): "Things have been going pretty well... people are searching for ways to say that things are slowing."

2. Taxation and Wealth Inequality

A significant portion of the discussion centers around wealth inequality in the U.S. and its implications for the economy. The hosts examine data showing that the top 10% of earners now account for 50% of all consumption, up from 36% three decades ago. This concentration of spending power among the wealthy is identified as a critical driver of the current economic landscape.

Key Insights:

• Consumption Power of the Wealthy:
  The Wall Street Journal reports that the top 10% of wealth accounts for half of all consumption, indicating a heavy reliance on affluent individuals to sustain economic growth ([16:31]).

• Berkshire Hathaway's Tax Contributions:
  Ben discusses Warren Buffett’s annual letter, highlighting that Berkshire Hathaway paid $26.8 billion in taxes last year, which constitutes 5% of all corporate taxes—a figure he finds staggering ([22:05]). Buffett emphasizes gratitude towards the U.S. government despite the hefty tax contributions.

Notable Quotes:

Michael Batnick ([17:05]): "The top 10% of earners now account for half of all spending. That's a huge, huge number."
Ben Carlson ([22:05]): "Berkshire Hathaway pays a lot of money... Berkshire last year made four payments to the IRS that totaled $26.8 billion."

3. Robinhood’s Strategic Shift and Crypto Market Dynamics

The hosts critique Robinhood’s transformation from a stock trading platform to one heavily focused on crypto and options, likening it to a "casino." They analyze Robinhood's recent quarterly performance, noting a significant increase in transaction-based revenues driven predominantly by crypto and options trading, with traditional equities contributing less than 10%.

Key Insights:

• Revenue Streams:
  Robinhood's reliance on crypto and options trading is highlighted, raising questions about the sustainability and ethical implications of such a business model ([28:27]).

• User Experience:
  Michael shares a personal anecdote about difficulties withdrawing crypto from Robinhood, underscoring potential issues with platform reliability ([30:05]).

Notable Quote:

Ben Carlson ([28:33]): "They make almost all of their money on crypto and options. Not much on stocks."

4. Housing Market Trends and Millennial Homeownership

Michael and Ben explore the robust performance of the U.S. housing market in 2024, which saw a 5.2% increase in housing values despite high mortgage rates. They note a significant rise in millennial homeownership, now owning over 20% of the U.S. home market, with their total home value increasing by 18.8% year-over-year.

Key Insights:

• Millennial Impact:
  Millennials are making substantial inroads into the housing market, potentially becoming the largest group of homeowners in the near future ([36:14]).

• Sustainability Concerns:
  The hosts express skepticism about the long-term sustainability of current housing trends, citing high down payments and increased housing costs that strain budgets ([37:00]).

Notable Quote:

Ben Carlson ([36:43]): "Millennials are making up some ground very fast on these older generations. And so I know it seems like young people can't afford to buy anything these days, but young people are getting into the housing market at a very fast clip."

5. AI Adoption and Human Bottlenecks

The conversation shifts to the role of Artificial Intelligence in various industries, with Tyler Cohen of Marginal Revolution contributing the idea that human bottlenecks—such as regulatory approvals—limit the rapid adoption of AI advancements.

Key Insights:

• AI Productivity vs. Implementation:
  Tyler Cohen argues that even as AI increases productivity (e.g., drug discovery rates), human-related constraints like FDA approvals slow down practical applications ([32:16]).

• Personal Use of AI:
  Ben shares his experience using AI tools like ChatGPT for writing a book, noting both the benefits and limitations of relying on AI for consistent feedback ([33:05], [35:25]).

Notable Quote:

Ben Carlson ([32:16]): "Human bottlenecks become more important the more productive AI is. Let's say AI increases the rate of good pharma ideas by 10 times. Well, until the FDA gets stacked together, the relevant constraint is the rate of drug approval."

6. Media and Entertainment Critiques

Michael and Ben briefly discuss their views on recent TV shows and movies, expressing strong opinions about their quality and appeal.

Key Insights:

• Zero Day and Limited Series Preferences:
  Michael expresses enjoyment of the limited series "Zero Day" despite poor reviews, illustrating differing personal tastes ([50:08]).

• Marvel Cinematic Universe Flops:
  They criticize the declining performance of MCU movies, questioning the future viability of the franchise ([39:15]).

Notable Quote:

Michael Batnick ([39:15]): "It was a two minute clip that was shared on Twitter yesterday... I'm feeling a little bearish and that these things could be a headwind."

7. Parenting and Personal Anecdotes

The hosts share personal stories related to parenting, highlighting challenges and lessons learned.

Key Insights:

• Teaching Effort and Resilience:
  Ben recounts a story about his daughter’s soccer performance, emphasizing the importance of effort over innate talent. He reveals that her lackluster performance was due to illness, underscoring the unpredictable nature of parenting ([44:45]).

• Family Health Struggles:
  Both Michael and Ben discuss recent illnesses affecting their families, adding a personal touch to the episode ([47:13], [47:31]).

Notable Quote:

Ben Carlson ([44:47]): "The only two things I care about. I care about having fun and trying your best. If you don't try your best, then that's the only time I really get disappointed."

8. Upcoming Events and Personal Plans

Towards the end of the episode, Michael and Ben discuss their personal plans, such as attending a Knicks game and dealing with time zone challenges. These segments provide a glimpse into their lives outside of market and economic discussions.

Key Insights:

• Knicks Game Plans:
  Michael talks about attending the Knicks game in Memphis to celebrate his and Ben’s 40th birthdays, sharing humorous anecdotes about time zones and event planning ([42:01]).

• Car Purchases and Reliability Concerns:
  The conversation touches on considerations for purchasing reliable vehicles, with Michael contemplating switching from a Jeep Wrangler to a Toyota SUV for better reliability ([41:37]).

Notable Quote:

Michael Batnick ([41:37]): "I think I'm just going to get a Toyota. Something reliable. Old reliable, know what I mean?"

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Conclusion

In this episode of Animal Spirits, Michael Batnick and Ben Carlson offer a comprehensive discussion on the current economic landscape, market sentiments, and the intricate dynamics of wealth inequality. Their candid personal stories and sharp critiques of sectors like crypto and entertainment provide listeners with both professional insights and relatable anecdotes. The blend of economic analysis with personal experiences underscores the podcast’s commitment to exploring the multifaceted nature of markets, life, and investing.

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For more insights and discussions, tune into the next episode of Animal Spirits Podcast every Wednesday morning.

Transcript

[Michael Batnick]

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[Unknown]

Welcome to Animal Spirits, a show about markets, life and investing. 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 Ritholz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Gritholz Wealth Management may maintain positions in the securities discussed in this podcast.

[Michael Batnick]

Welcome to Animal Spirits with Michael and Ben. The podcast last week feels like a year ago.

[Ben Carlson]

It does, I agree. Time is moving in weird places these days. Got a million emails from people. The support and the feedback was amazing. I still can't believe how willing people were to share their stories with me and everything else that they're going through.

[Michael Batnick]

I saw it firsthand, Ben. We did an event in Naples last week with Belsky, and we walk into the theater and everybody came up to me, or everybody who did come up to me said something to pass along their condolences to you.

[Ben Carlson]

Yeah, it was. It was a very nice bright spot for me in a tough time. And so many people offered advice. And some people said, I know I've gone through something like this and nothing I can say it'll help. And that was good to hear. But I thought there were some good quotes from people. One of them that a lot of people said was like, love survived survives death. And that, like grief is just showing how much love there was in the first place. I thought that was pretty good. This is what I've never heard before. Sometimes when you're in a dark place, you think you've been buried, but you've actually been planted pretty good. I thought the best analogy that people shared was just that grief is like a wave or like the. The ocean and the tides that are constantly coming in.

[Michael Batnick]

Yeah.

[Ben Carlson]

And the other one I never heard of was someone said, you know, it's going to be weird once the adrenaline runs off. And I never thought of it that way. You wouldn't necessarily think to call it adrenaline when something really bad happens to you, but you do get this crazy internal feeling of something. And yeah, when that wears off, it's almost like a comedown. Not a drug guy, but it feels like something like that where you come off of it and you, when it wears off, you're kind of like, ugh, you're just like exhausted or so, yeah, all of that. But yeah, all the, the love and support from everyone was very, very helpful for me. So I, I really appreciate it.

[Michael Batnick]

Ben. It feels like yesterday. Air quote. Everyone got cautious on the economy in the market.

[Ben Carlson]

Yes. There's a lot of people just tapping the brakes, at least.

[Michael Batnick]

Yeah. And it's interesting because we're going to talk a lot about what's causing these reactions. And I'm really happy to say that it's not necessarily the stock market. We're starting to see cracks in the market that might be reflections of what we're going to talk about. But it's not as if there's a scenario where the market fell 12% or we're like searching for reasons to be cautious. You know what I mean?

[Ben Carlson]

That's true. If something goes wrong from here, people are going to know the reasons.

[Michael Batnick]

Yeah. Which is kind of, which is, I don't know, maybe the way it should be. The S and P is 2 1/2% off its size. The Vix is at 19. So like credit spreads are, you know, fine. So it's not like there's panic in the market. And not that there's panic anywhere, but people are starting to flag some cautionary signs. And we'll start with Neil Dutta, economist at Run Mac Neil. For those of who don't know who he is, Neil was one of the few, maybe the only economists going into 23 that said actually there's not going to be a recession. When there was a 100% chance, Neil stood against, against the tide and said, I don't think so. And now he's turning cautious. So these are his words. Much of what we see in the financial press, tariffs, uncertainty is a red herring, an ex post rationalization for an economic slowdown that was already in motion. That was pretty interesting. He says we remain of the view that a passive tightening of monetary policy is the dominant risk and that has important implications for financial market investors. I would anticipate a decline in longer term interest rates and a sell off in equity prices as risk appetite wanes for the economy, expect conditions to deteriorate in the jobs market. And then his partner, I'm assuming it's this is Jack. Well of course it's Jeff, not Neil. So on their Twitter account, Red Mac Renaissance Macro Research at redmac llc, Jeff has a chart showing industrials and industrials relative to the S and P. And industrials are the most economically sensitive sector in the S&P 500. In the market, Jeff says industrials flagging weakness for months. Global growth, selection for months higher and quits rates near the lowest for the month. Housing impaired for months. Blame tariffs all you want, but that's a tempest and a teapot. Real issues have been brewing for a while.

[Ben Carlson]

Is this just a case of things have been really good for a while and they, they couldn't keep getting better.

[Michael Batnick]

I'm so glad you said that because that was, that was going to be my angle on this whole thing. I, I love this, I want to say this in the context of, of being a markets person where you have the s and P up 20 something percent in 2023, up 20 something percent to 2024 expectations through the roof. The stock market can't go up forever in a straight line and absent a wall of worry you get things like this. And so you need fear, you need doubt. And I think that if the economy muddles through at 1.5%, two and a half percent, if the market is flat to down. In the context of the secular bull market that we are in, this is, this is how I would prefer it.

[Ben Carlson]

We were due for a healthy correction and we haven't, we haven't got one yet.

[Michael Batnick]

We haven't even got one. So here's another one from Kevin Gordon from Schwab. Using a bespoke chart on a 12 month average basis, housing starts have completely rolled over from their peak nearly three years ago, falling from 1.67 million to 1.37 million. Now recessions have always followed a rollover in housing. Housing starts and the only question is timing. Now always be aware of a single variable analysis but there are multiple signs that the economy is slowing down. And again, no reason like this is not, we're not a no reason for panic or anything like that, but just some context and if we should get a sell off or a correction or a pullback or even God forbid, a bear market, it's okay, we're going to be okay.

[Ben Carlson]

Yeah, things have been going pretty well. Steve Cohen, someone tweeted this out yesterday. I don't know where he was talking with someone was It a Mets thing or something? I don't know. He had a Mets hat on. I guess he just wears that all the time now. I never asked you, are you a Mets or Yankees guy? You're a Yankees person?

[Michael Batnick]

Grew up a Yankees fan, but I broke up with baseball in like 2007, maybe, maybe a little bit later on.

[Ben Carlson]

That that's not a surprise. I just, I don't get how people end up being jets and Mets fans.

[Michael Batnick]

In terms of what, just the punishment or literally how it happens?

[Ben Carlson]

Oh, yeah, it's. It just seems like severe punishment. So Steve Cohen was on a, it was a two minute clip that was shared on Twitter yesterday. And he just said, listen, I'm starting to. I'm actually pretty negative for the first time in a while. And he said, tariffs, if they're enacted, that's a tax. Slowing immigration means the labor force won't grow as much. And the Doge thing, it's austerity. And it's funny, I haven't heard anyone say that yet, but one of the reasons that Europe lagged so far behind the United States coming out of the 2010s out of the great financial crisis is because they implemented austerity and they slowed government spending. And so whatever you feel about government spending and our deficit and the debts and all this stuff, if we're slashing government spending left and right, that is a form of austerity. And he was saying, I'm not predicting that there's going to be some big calamity. I'm just saying for the next year or so, I'm feeling a little bearish and that these things could be a headwind and maybe the best is behind us.

[Michael Batnick]

Ben, I'm a, I'm a midwit meme guy. I'm the guy on. Well, that's not true. So in some ways, unfortunately, I am the idiot in the middle. But in this case, I'm the genius at the one end and the dumbass on the other end who share the same views, which is that good news is good news for the market. Right. Even if the market sells off on good economic data and a weakened economy, bad economic news is bad for the market. I don't try not to get too cute. So you have interest rates falling pretty sharply, at least at the longer end of the curve. The 10 year, which had that one hilarious in hindsight, spike two weeks ago is down from a peak of 40 down to 4. 3. Pretty big move. And it's weakening in my view, because the economic outlook is weakening as it should be right. Weakening economy, falling interest rates. Now, you could say I'm not going to, but you could. Well, aren't lower interest rates going to be good for growth stocks, good for the market? I'm not going there. Bad news is bad news.

[Ben Carlson]

So depend. You're saying it depends why rates are falling right now.

[Michael Batnick]

All of this, all of this could be a moot point by Wednesday evening when in video reports. I do think that a lot rests on the reports of Nvidia. The market is kind of hanging on by a thread. A lot of the back seven names, particularly Microsoft, like, look like shit. And if Nvidia crushes it, knocks it out of the park, reaffirms the story, and it's up 12%. All of this is in the rearview mirror. But if they do the opposite and they fall 12%, it's on in a bad way.

[Ben Carlson]

That could be. Yeah, that makes sense to me. That could get things rolling. I also will say that anytime a hedge fund manager has turned bearish in the past, whatever, 10, 12 years, they've been wrong. So it's worth pointing that out. And I still think you give the US Economy the benefit of the doubt. But yeah, you're right. People are, it's like the beginning of the end of the beginning or however you say that. Right.

[Michael Batnick]

And allow me to.

[Ben Carlson]

People are searching for ways to say that things are slowing. I think.

[Michael Batnick]

Allow me to preach for a moment, if you will, Ben, if you are one of these people and there are lots of them who have been either collecting, you could say hoarding cash, or have more of their money in fixed income than they otherwise would have and have been waiting for a sell off. If we get it, if we do get it, put some money to work. You know, that's not like, not a market call. But if you've been waiting and looking for an excuse, you might get it next week or this week.

[Ben Carlson]

Speaking of market timing, we were at a soccer tournament this past weekend and I heard two of this. I was, we were waiting to get in. You know, the worst part about the game is there's a game before you and then you're waiting for the other teams to leave the parents to get out of their spot so you can come take their spot. Right. But the parents take forever to leave their spot. So they don't.

[Michael Batnick]

And your horn is broken. So what do you do in this situation?

[Ben Carlson]

Yes, exactly. So they don't, they don't let the. No, no, I'm talking about on the sidelines. You're standing there, there's a game before you, right? The parents, they line the field, okay, you need to sit down, right? But they, they are taking their time conversing and socializing and talking to their kids.

[Michael Batnick]

The post game schmooze.

[Ben Carlson]

Yes, the post game schmooze. Way too long for a lot of parents. You have to be. You have to be. Have enough self awareness to go, you know what? We're gonna do the schmooze over in the parking lot away from whatever's going on right now. We can't stand here and take up these spots for these other parents trying to get their good spot for the next game.

[Michael Batnick]

That's rude.

[Ben Carlson]

Anyway, so I heard these two dads talking, and they're both talking about market timing, which is kind of funny. And I just caught. I know I'm kind of listening, doing one of these. And one of the dad says, six months ago, man, I rolled over an ira. I get the money, it's in cash. I decided not to put it back to work, and I sit down in cash, and I sit on it, and the market keeps going up. And I sit on it, the market keeps going up. Then I get FOMO and I just rush all in and I put it in. And the other dad's saying, I did the same thing with an Iraq. And just market timing is not. It's not good for you, not good for the psyche. He was talking about, like, all the emotions that it brings about.

[Michael Batnick]

It's awful.

[Ben Carlson]

And just. He just go, I'm never doing that again. I'm just gonna put it to work and not think about it. I want to be like, yes, yes.

[Michael Batnick]

I think we, we all, we all do. We've all done it, except for Ben. So if anything, I'm pointing the finger at me, not you, but. Yeah, no, it's. It's. It's hard. Especially. Especially like, when. For the IRA situation. I totally get that.

[Ben Carlson]

Yes. That's the problem with that is you get the money.

[Michael Batnick]

Speaking of market, market timing, I love this tweet. I'm skipping ahead a little bit, but Loom Dark tweeted. It's amazing. Come here.

[Ben Carlson]

The newest member of the family.

[Michael Batnick]

Is this the cutest? You know, I was afraid to get another dog just because my wife works. My two kids are busy, I travel a lot, and I'm so in love. I didn't realize how much I needed her. Like my. My dog Bianca died in April, and my heart has been empty, and now it's full again.

[Ben Carlson]

I said the first time that you have the dog like lay by you or lay its. Lay its head on you. That's when you know, right?

[Michael Batnick]

Oh, pure love. Okay, so Loom Dart tweeted. It's amazing how much money people can make by idly allocating into stuff. It's even more amazing how much money people lose by trying to actively trade stuff. And it's even more amazing how heavily people shit on the first while they fail the second.

[Ben Carlson]

It's well said. I like it.

[Michael Batnick]

Chef's kiss. No notes. Well done.

[Ben Carlson]

All right, so Torsten Slok has this thing about the Doge related job cuts. And so he says total employment. So they're Talking about there's 300,000 federal job cuts and a lot of people are making a big deal out of this. And he says total employment in the United states is about 160 million. With 7 million unemployed right now. 5 million people change jobs every month. I don't think people realize how dynamic the US economy is that 5 million people are changing. That means they're not unemployed, they're getting new jobs or leaving old jobs. In that context, 300,000 federal employees loss is not that much. That's obviously to those individuals, that stinks. To the statistics wise, it's not as big of a deal. He says, also, for every federal employee, there are two contractors. As a result, layoffs could potentially be closer to 1 million. So it's. It could be a lot of people. So people are wondering if this is something to worry about. I mentioned last week that my brother was a federal employee and he would always talk about how they had all these consultants that worked for them. Deloitte, I think, was a big one. And he actually decided at one point, I'm sick of working for the government. I want to work for the contractors. They seem to have it better. So he went and got a job at Deloitte and realized they make you work like 80 or 90 hours a week and said, no, no, I'm going back to the government. It's not worth it. But there is a lot of that where all these consultants come in and work. And I wonder if getting rid of that is something, but you're not necessarily firing that person. It's just not another job for that consulting firm. So I guess what I'm trying to say is this really stinks. Those federal employees. I don't know if this is a huge, huge thing for the labor market. What do you think?

[Michael Batnick]

You know what? I'm gonna take a pass on this one. I just don't know enough to have an opinion.

[Ben Carlson]

It's hard to. I guess it's hard to say. I do think it's hard to worry about the consumer yet. And I continue to give the economy the benefit of doubt. So this is from our friends Ryan and Sonu at the Facts vs. Feelings podcast who always give us nice shout outs. Great guys at Carson Wealth. So they look at all these different consumer credit charts. They show delinquencies are very low relative to incomes and they've been going up a little bit, but since this century, about as low as they've been. They show credit utilization. And so credit cards and home equity, like, how much are we using the pre pandemic average? We're way below for home equity. Like, people have a lot of room to run there. And I've been mentioning this that people want to take on credit, they can. Maybe they're not using it because rates are so much higher. Debt service. So this is household debt service payments. Percentage of disposable income is rising. Still well below average. It's rising.

[Michael Batnick]

That's pretty sharp.

[Ben Carlson]

Yes. And then credit card debt as a percentage of disposable income is still way, way lower than it was in the 2000s before the 2008 crisis.

[Michael Batnick]

Yeah, but that, but that doesn't matter. It's a direction.

[Ben Carlson]

So these things are rising, I still think. But if you put all these together, the consumer is still in a pretty good place. So the Wall Street Journal had the.

[Michael Batnick]

Wait, hold on, just. You're right about that. I think. I think you're absolutely right. The economy deserves the benefit of the doubt and the consumer deserves the benefit of the doubt. That doesn't mean we can't have the stock market sell off.

[Ben Carlson]

Oh, totally. Yes. The stock market as gains have been so good that it won't take much to freak out the stock market. I agree. So the Wall Street Journal had, I think, the story of the week and the stat of the week. So they said the US Economy depends more than ever on rich people. And so they show that the top 10% of wealth accounts for 50% of consumption. That's up from 36% three decades ago.

[Michael Batnick]

That surprised me. A lot of these numbers surprised me.

[Ben Carlson]

Yes. I don't know what I would have put it at. 50% seems high. And so you can see it's changed. Where the top 10% of earners now account for half of all spending. It's a huge, huge number. So they said between September 2023 and September 2024, the highest earners increased their spending by 12%. Spending by working class and middle class households meanwhile, dropped over the same period. So this is the thing that's keeping this going is wealthier people. So they also said taken together well off people have increased their spending far beyond inflation while everyone else hasn't. The bottom 80% of earners spent 25% more than they did four years ago. That's pretty close to the inflation over that time. Top 10% spent 58% more.

[Michael Batnick]

Wow. Wow.

[Ben Carlson]

This is, this, these numbers are bananas. Right? And so what stops this train? Because you could say, well it's, this is the wealth effect. We just need a bear market. We had a bear market in 2022. Did this slow people down from spending money? Because I think you could say that the people who are 2022, we were.

[Michael Batnick]

We were still coming out of the pandemic a little bit.

[Ben Carlson]

Yeah, I guess so. This is a little further along than the recovery. I just think another thing is people will say, well the next time we have a financial crisis, that'll fix this inequality thing.

[Michael Batnick]

No, it won't.

[Ben Carlson]

Will it? No, it won't. I don't know what changes this. And I don't see certainly the rest of this decade this inequality thing getting even better. I think it gets worse.

[Michael Batnick]

Well also I agree with you, unfortunately. But the top 10% of earners are probably supporters of the administration and what's going to get them to slow down their spending?

[Ben Carlson]

I don't know. So look at this other. These are. I had chart could put this together for us. So, so it's Again, the top 10% makes up 50% of all consumption for consumers. They also hold 2/3 of all wealth in this country. 87% of the stocks, 84% of the private businesses and 44% of real estate. The top 10% essentially drives almost all the economy. So you say what's going to slow the economy? What's going to slow consumption? Because consumers make up 70% of the economy. What's going to slow the top 10%? I guess you have to say, to your point, maybe it is just a nasty bear market and a slowdown in the stock market and housing prices stop rising. I don't know because we had that couple year period where the labor market was kind of wonky and people on the lower end got huge raises. And actually for a little bit we had wealth inequality that at least income inequality. That changed a little bit the labor market. The labor has no negotiating power anymore because the labor market is slowing.

[Michael Batnick]

That was a quick moment in time. We spoke a lot about that during the pandemic but that is long behind us.

[Ben Carlson]

I don't see what stops this train. Josh had a really good piece a couple weeks ago about how there's rich people everywhere. And he says.

[Michael Batnick]

He said this. I'll let you read in a sec. But he said this in the TCAF episode with Robert Frank. And it was one of those things where I was like, why didn't I ever think of that? Like, so spot on.

[Ben Carlson]

Yes. The whole point was, like, when you grew up, everyone had that, like, one kid in their class who was really rich, but no one really cared that much because it was like, oh, he's the one really rich kid. And Josh's point is that rich kids are everywhere now. And obviously this is a metaphor that there's so many more rich people now everywhere. And it is so true. And what gets them to stop spending money? I don't know.

[Michael Batnick]

I was thinking about, like, some of the cars in my neighborhood today versus when I grew up. And what were even the nice cars when we grew up? It was like a Lexus, maybe.

[Ben Carlson]

BMW was a big thing for. I remember if you drove a Beamer, that was a big thing.

[Michael Batnick]

Yeah, that's true. That's true. I do remember one person said that. Drove a Beamer, but. But there was like a handful. Not a handful. Maybe more than that. But it was like a spattering, you know. Now every mom drives an X7.

[Ben Carlson]

Yes. Everyone drove a minivan. Every parent drove a minivan. When we were growing up, it was. It was actually kind of a luxury to see someone driving an SUV.

[Michael Batnick]

True. Remember the QX4? That was like the first, like, cool SUV. And then the, you know, maybe that was Jeep Grand Cherokee came before that. But there's a. There's a lot. There's a lot more money than there was when we were growing up.

[Ben Carlson]

So this is one of the reasons that being rich, it's harder than ever to be happy because there are so many other rich people.

[Michael Batnick]

Oh, yeah. Wow.

[Ben Carlson]

Right? Yes, exactly. Yeah. Tough.

[Michael Batnick]

Shut up, asshole. Nobody cares.

[Ben Carlson]

Okay. Berkshire Hathaway Annual letter.

[Michael Batnick]

Wait, wait.

[Ben Carlson]

I hate to be. What do you got?

[Michael Batnick]

We don't need to read Josh. We just went over. But yeah, that was a great post.

[Ben Carlson]

I put it. But yeah, it was very good. So I hate to be morbid, but I guess that's the mood I'm in lately. There's probably not many of these letters left. How old is he? 95. It's pretty impressive that he's still doing it at his age and still going, isn't he? 95 years old, Bob.

[Michael Batnick]

Something like that. Yeah.

[Ben Carlson]

And so you pull out something that I was actually gonna pull out, too, that Berkshire Hathaway pays a lot of money.

[Michael Batnick]

So he says, also, he's one of us. He did the if you stretch the money type thing.

[Ben Carlson]

Oh, did he?

[Michael Batnick]

But I thought this was great.

[Ben Carlson]

So he said, to be precise, Berkshire last year made four payments to the IRS that totaled $26.8 billion. That's 5% of all corporate America paid in taxes, which is just insane to me that they come for 5%. But I guess if you. What size are they of the stock market? 3% or something? Yeah, 2%. Anyway, so he talks about all of this, and he. But at the end, he doesn't bitch and complain. I wrote a blog post about this three or four months ago, and I said, here's some things that I never want to be when I grew up, and one of them I don't want to be when I grow up is a rich guy who complains about taxes. That's just the tackiest look that you can have if you're a rich guy, ultra rich guy. And your whole thing is, did you see how much I paid in taxes last year?

[Michael Batnick]

Listen, I agree.

[Ben Carlson]

Just shut up.

[Michael Batnick]

You complain to your accountant, and you shut up. I said to Bill, anything I could do for taxes, he said, move to Florida. He said, I'm not moving to Florida. Anything else? You complain to your accountant, and you shut up.

[Ben Carlson]

Yes. So Buffett says, thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send you even larger payments than you did in 2024. Spend it wisely. Take care of the many who, for no fault of their own, get the short straws in life. They deserve better. And never forget that we need you to maintain a stable, stable currency. And that result requires both wisdom and vigilance on your part. So he's saying, like, yeah, it stinks. We pay so much of taxes, but we look at this as, like, this is a privilege.

[Michael Batnick]

Is there anything lamer than being a Buffett hater? He hasn't even beat the mark of the last 15 years.

[Ben Carlson]

I don't. His. His legacy to me has only grown stronger in recent years. When you see how many rich and powerful people have just. Just, like, degraded themselves and just look like bad people. The fact that Buffett remains a pretty darn good guy. He's not perfect. If you read his biography, he is not the perfect guy. Not the perfect family man, the perf.

[Michael Batnick]

The personal stuff was weird, but even, like, yeah, we know he's a shark. We know he's not necessarily the jolly person that he portrayed, but come on. Like you could count on one hand that people, the number of investors that have done more for the average investor just in terms of learning and communication and being steadfast and long term and all that sort of stuff and not being an asshole about paying taxes. I think it's been a pretty good role model, even if of course like everybody else, imperfect. Now also, I guess you could say, like the people that like worship Buffett are maybe just as odd as the people that trash him. But so he. So they paid, as you mentioned, Ben, $26 billion, $27 billion in taxes. And he said just to conceptualize because money is sort of hard to, to think about at that level. If Berkshire had sent the Treasury a $1 million check every 20 minutes throughout all of 2024. So visualize 366 days and nights because 2024 was a leap year, we still would have owed the federal government a significant sum at year end. That's what $27 billion is. A million dollars every 20 minutes and then some.

[Ben Carlson]

So how much could you save on taxes if you move to Florida? What are we talking here?

[Michael Batnick]

Maybe, I don't know. I'm not a tax guy. I don't even know what's New York state taxes? 8%.

[Ben Carlson]

I would find it very hard to let taxes. Our taxi bill always says this, like, don't let the tax tail wag the rest of your decision, Dog.

[Michael Batnick]

Right, I agree. But we're like normal people. I would say that for. If you sell a business for $60 million and you could move to Florida or you could give the government $7 million, I'm making that number up at that level. I get, I do get it now. Counterpoint is like who gives a shit if you have what you're. You know what I mean? Like if you have so much money, who even cares? But to each their own. I do understand. Even if I think probably not what I would do, but maybe one day, who knows?

[Ben Carlson]

Think about how many people live in California, in New York, where taxes are very, very high.

[Michael Batnick]

Yeah, right. Yeah. All right, so let's talk about the stock market. So even though I mentioned like the S and p is only 2 1/2% off its all time highs, that of course never tells a full story. And looking inside the market as I do. Ben, you don't. I do.

[Ben Carlson]

There is not a stock market. It's a market of stocks.

[Michael Batnick]

There is reason to be concerned and concerned. It's all relative, not bearish. But there are, there are yellow signs flashing. So, for example, Bespoke tweeted, while growth and momentum stocks were in the doghouse this week. So like Reddit crushed. Paler. Crushed Rigatoni. All of those, all of those quantum.

[Ben Carlson]

Computing stocks like Rigatoni just makes me laugh. It's a pasta.

[Michael Batnick]

All of the momentum stocks. Not all. A lot of the momentum stocks really got hammered in the past week or two. But on the other side, you have consumer staple stocks ripping. So last week, Hershey up nine and a half percent, Constellation Brands up eight and eight percent, James Mucker, Kraft, Heinz, Monster Beverage, Dr. Pepper, Pepsi, Clorox, all ripping. These are the type of like, that is the true flight to safety, which is probably not what you want to see in a bull market. Bespoke also tweeted, the home builders have had their worst four month performance relative to the broad market since the housing financial crisis in the late 2000. So they showed the S&P 500 performance relative to the home builders. And that's blowing out of the wrong way.

[Ben Carlson]

It makes sense that homebuilders eventually had to. With mortgage rates continuing to stay higher for longer, they had to roll over.

[Michael Batnick]

And again, for me, all of this is building the wall of worry that you love to see. Now, I don't like to stand by lose money. Never feels good to lose money. But we need this. Here's another sign that there's really, really not a lot of investor behavior change, at least according to this metric. So our Fred Tod son. Excuse me. Excuse me. You okay, Ben? You look disgusted.

[Ben Carlson]

No. Has anyone ever been happy with someone else's sneeze before?

[Michael Batnick]

No, of course not. Nobody ever said, it's a great sneeze, man.

[Ben Carlson]

Great sneeze.

[Michael Batnick]

Really love your style of sneeze. Nobody looks good sneezing. Not even George Clooney. Okay, he has a chart showing levered long versus inverse ETFs AUM. And levered long is still going straight up to the right. And there's a little bit, a little bit of money coming into the inverse one. So Todd says a reversion to the mean for lever long and inverse assets would go a long way to easing excess in the market. And I would agree with him.

[Ben Carlson]

It is interesting how they, they, they really close the gap during bare markets.

[Michael Batnick]

Yeah.

[Ben Carlson]

That people really hop into those inverse probably at the wrong time though, don't you think? People, they peak right at the bottom, basically.

[Michael Batnick]

Yep.

[Ben Carlson]

Which you don't know in advance. Oh, all right. Good one on Robinhood I saw the other day. So this is not a novel take, but Robinhood is essentially a casino now. So this is Robinhood. Posted this from their latest quarterly call. I'm a little behind here, but I just am catching up on stuff.

[Michael Batnick]

Credit to Robinhood. I go through a lot of quarterly calls, not to brag. And they easily, easily have one of the cleanest, prettiest decks that tell the best story. Like there's not a lot of footnotes what's going on here. It's just, it's boom. It's very self explanatory credit to them.

[Ben Carlson]

So they looked at their trans transaction based revenues and it was up 200% year over year to a record in Q4. So they knocked it out of the park. But they break it out by equities, options, crypto and other. And equities are less than 10%. They make less than 10% of their transaction based revenue on equities. It's almost all crypto. So you know, 40% or so is crypto or more than 50% is crypto. And then I don't know, looks like the other 40% or so, 30% is options. They make all of their money on crypto and options. Not much on stocks. I mean credit to them for like leaning into the degenerate economy or whatever you want to call it. But they started out being a stock market like stock market trading app. Right. And they are not that anymore at all. So what do they make? Do they just have really wide spreads on the crypto trades? Is that it? I know. I think I did notice that when I sold my bitcoin that the spread was very wide.

[Michael Batnick]

Oh yeah. Oh yeah. I still can't get my crypto out of Robinhood by the way.

[Ben Carlson]

So I know I wimped out and just sold half of my bitcoin. So Bitcoin's under 90,000 now. I don't know, it's 88,000 or something that that's at a pretty good plunge with almost 20% downturn. Do I have to wait till it gets like 75 to claim victory for selling or not? Or do I have to like wait longer? I want to just know when. When does the victory lap get to take place for me for selling at 100,000?

[Michael Batnick]

Well, it depends what the future holds. Because if it goes back to 150, is that lap negated?

[Ben Carlson]

Depends if I buy anymore.

[Michael Batnick]

All right, let's talk about crypto for a second. So these are the tailwinds for crypto at the moment the SEC just dropped their case against Coinbase. Same thing with Robinhood. There's more deregulation coming. There's the potential. I don't know if it's nonsense or not, but the potential for the bitcoin.

[Ben Carlson]

Did the SEC case against Coinbase matter, though? Just. I mean, they would have paid a fine. I don't. Did it?

[Michael Batnick]

Not specifically. Just the whole mosaic, the whole. The tailwinds for crypto. You have crazy inflows, right? Crazy inflows. And yet. And yet. And yet. Bitcoin is 18% off the highs. Yet. Sam Bankman, fried, tweeting weird shit last night about Doge. I don't know what's happening there. And I say this not to dunk, not as a hater.

[Ben Carlson]

How does he post from Twitter?

[Michael Batnick]

I have no idea.

[Ben Carlson]

From prison?

[Michael Batnick]

I have no idea. I have a healthy bitcoin allocation, so this is definitely not a dunk. But I will say this. If you are one of these people who, over the last couple of months, felt FOMO and didn't own any bitcoin and you're not buying now. Never buy bitcoin.

[Ben Carlson]

Yeah. Don't be one of those people who asks, why didn't I buy it at 100? Now you won't buy it when it's back in the.

[Michael Batnick]

If, like, like I said, if you wanted to buy and you felt like you missed it and you're not buying now, do not buy at higher prices because bitcoin is on sale. And whether it goes low from here, who the hell knows? But. But I would say that again, given the. Given the bullish backdrop on news and the fact that the. The price is breaking down as if you're a bitcoin bull. Not what you want to say. Not what you want to say.

[Ben Carlson]

All right, I want to talk about AI for a second. Tyler Cohen at Marginal Revolution had a really good piece about why he thinks the AI takeoff is relatively slow. Because people keep saying it's. It's amazing how great these models are. Why aren't more people using them yet? And he says, this is what I thought was good. Human bottlenecks become more important the more productive AI is. Let's say AI increases the rate of good pharma ideas by 10 times. Well, until the FDA gets stacked together, the relevant constraint is the rate of drug approval, not the rate of drug discovery. And I do think humans are going to be the. The like. Will people start adopting these and using. I think that human bottleneck is interesting. So I've started using imr I found my favorite use case so far and I use it occasionally. So I don't know if I told you this. I've been working on a book for like a year and I needed to give myself a time constraint to sort of.

[Michael Batnick]

How is it possible that you've been working on a book for a year and you never told me?

[Ben Carlson]

I told you this.

[Michael Batnick]

What's a book called?

[Ben Carlson]

I don't have a title yet.

[Michael Batnick]

What's it about? Bitcoin?

[Ben Carlson]

Yeah, it's a book on the long term. I'm thinking about calling it the Big Long, but I don't know if that's too cute. We'll see what people think. And so I'm writing the book. And then I. I talked to Seth Godin a few months ago and he said every chapter in my book that I wrote, I uploaded it into one of these large language models and I asked for feedback. And he said it was actually pretty helpful for me. It didn't like, rewrite the whole book, but it gave me. It helped me fill the holes. And so I decided to do this. So I finished a chapter and I upload it to Chat, GPT or Claude or any of these. I've been using them all just to try it out. And the feedback is instantaneous. That's the craziest thing to me is how quickly it happens. Here's this 2,500 words from a chapter, and here's instantaneous feedback. Your tone changes from this paragraph to this paragraph. Your stories are really good here, but you need to add a little more meat to the bone, all this stuff. And the feedback is actually relatively helpful. Now here's what I noticed, though I wonder if part of it is a parlor check, because I did the first chapter and I was blown away. I could not believe how good the feedback was. I need to add more here. I need to have a better transition here. I need to have a better concluding thought here. But then I uploaded another chapter and it basically told me the same thing. And then I did another chapter and it kind of told me the same thing again. And I wonder if it's kind of just a parlor trick.

[Michael Batnick]

Well, but what if your deficiencies were the same for each chapter?

[Ben Carlson]

But the thing is, the way I look at it is if it gives me two good pieces of feedback that, oh, you know, you're right, I need to put. I need to have this transition be better or I need to have a better title here. Whatever it is, if I can get one or two little pieces from it, then it's worth it for me. And it's actually been very helpful. I've changed total the way the chapter looks. I move this from the bottom to the top and because of what the AI says. So it's actually very helpful to get this feedback. My one thing is I'm thinking about the human bottlenecks. What are people going to do when the AI tells them something that they don't like or don't agree with?

[Michael Batnick]

Meaning? What do you mean?

[Ben Carlson]

Are they going to keep using it? I don't know if it just, if it offers opinions that, that like you can't take constructive criticism or whatever it is, are you still going to use those if it offers you stuff that you don't like to hear?

[Michael Batnick]

So your, your main use case for now is editing?

[Ben Carlson]

Yes.

[Michael Batnick]

Are you doing that for blog posts too or just for the book?

[Ben Carlson]

I have not used it for blog posts yet.

[Michael Batnick]

What, what are you doing with the book? You self publishing?

[Ben Carlson]

No, I, I signed with a publisher with Herriman House, Craig and the team there. So I'm working on it. But yeah, I needed to put it. I needed a deadline, so I actually forced myself to finish it.

[Michael Batnick]

All right.

[Ben Carlson]

Yeah, I'm using amr. All right, this is from Redfin. Real estate gains in 2024. This is interesting. So they said the combined value of U.S. homes gained $2.5 trillion in 2024 to reach 49.7 trillion. I think you and I had talked a bunch of times during the last couple years, like, what are housing gains going to be? So they said in 2024, housing was up 5.2%. Pretty good gain again, which no one would have believed if you would have told them, in 2021, mortgage rates are going to be 7%, like the whole year, and housing is still going to gain 5%.

[Michael Batnick]

Right? Right.

[Ben Carlson]

They also showed millennials now own more than 20% of the US home market, with their generation's total home value rising 18.8% year over year to 9.7 trillion in the third quarter. So millennials are making up some ground very fast on these older generations. And so I know it seems like young people can't afford to buy anything these days, but young people are getting into the housing market at a very fast clip, and millennials will be the biggest homeowners in due time.

[Michael Batnick]

I know that we've spoken about this before. What's the stat on how many, what percent of millennials are getting assistance from their parents? Do we have that number?

[Ben Carlson]

I don't remember exactly. Sounds all right.

[Michael Batnick]

I don't know how people buy a house right now without help.

[Ben Carlson]

I don't either.

[Michael Batnick]

Like where, where is somebody getting $250,000 down payment or that's high. $150,000 down payment and then seven grand a month.

[Ben Carlson]

Yeah. The old budget thing was people are spending 30% of their money on housing and now it's probably 50% or 60%. I think it's, I think that's part of it.

[Michael Batnick]

Yeah. The math can't work. The math can't math forever.

[Ben Carlson]

Everything is just going to that.

[Michael Batnick]

Well, one of the things that I do want somebody, somebody said this is not my take but like maybe we were thinking that Trump cares about the s and P500 but what he really cares about is long term interest rates.

[Ben Carlson]

Okay. But the funny thing is is mortgage rates haven't fallen that much. They're still 6.8% or something. Yeah, they fall a little, not a lot.

[Michael Batnick]

Well, the spread hasn't, the spread has not come down at all.

[Ben Carlson]

That's why I said in our Slack channel the other day I think the Fed should be buying mortgage bonds. I've been saying this for a while now and it sounds really stupid because the last time they did it it really messed up the market. But what else do they need to do to get the spread to fall on those? I don't know what else can be done.

[Michael Batnick]

What's a bigger threat that we continue to. The market continues to do what it's doing, which is nothing fast. Or the Fed starts buying mortgage bonds and I don't know enough about the mechanics to know cause, effect, impact, all that sort of stuff. But let's just, let's just assume that it's that easy that they start buying mortgage bonds and spreads go from 150 basis points down to 70 or whatever. Is there a danger that the housing market would start to reheat and inflation would reaccelerate? I feel like the first scenario is more is more dangerous.

[Ben Carlson]

Yeah. I agree that keeping it this high is, is difficult for a lot of people and it slows future building. Right. It's going to make inflation worse in the future. Don't you think the Fed could get spreads to contract by simply saying if these spreads don't come down soon, we're going to buy mortgage bonds. I think the spread would narrow immediately if they just said something. They don't even have to do it.

[Michael Batnick]

So I subscribed to a substack. This guy Scott Mendelssohn who writes about the movie industry and he was talking about Brave New World. Did you take George to see that?

[Ben Carlson]

That. The Disney movie?

[Michael Batnick]

That's the Captain America one.

[Ben Carlson]

Oh, no.

[Michael Batnick]

Okay. Supposed to be really bad.

[Ben Carlson]

For some reason, he's not a big Avengers Marvel guy.

[Michael Batnick]

Okay, you know what? We spoke about this last week. Our ability to ascertain whether movies could be good or bad from the trailer. And I said, I don't watch trailers. Which of course is not accurate because every time I'm in a theater, all you see is trailers. So. But, but, but here's. This is what I prefer I saw. So I follow a Twitter feed called Bloody Disgusting. And they tweeted kevin Bacon stars in Prime Video's action horror series the Bondsman as a bounty hunter who gets a second chance at life by tracking down demons who've escaped from hell. See, I could tell that's gonna be trash. All I need is two sentences. Tracking down demons. Kevin Bacon. That's what he's doing. Who've escaped from hell. Sorry, out.

[Ben Carlson]

Yeah, right.

[Michael Batnick]

I don't need a trailer for that. I'm out. All the way out. Okay. Anyhow, so before. So Scott Mendelsohn says before the summer of 2021, there had never been an MCU movie that dropped more than 62.2% in its second weekend. So what they're looking at is the number of people that went for the first weekend versus the drop off for the second weekend. He says A Brave New World is the eighth such movie in two and a half years. Three and a half years. Joining Black Widow Eternals, no Way Home, Doctor Strange and the Multiverse of Madness, Thor, Love and Thunder, Ant man and the Wasp, Quantumania and the Marvels. Holy shit, what a slate of bombs. Is Marvel like cooked? Are we done?

[Ben Carlson]

Isn't this like Josh's theory on spacs? Like the thing that upended spacs is just so much supply hit the market. It's the same thing with Marvel movies.

[Michael Batnick]

So I think until we like get a new X Men like these, these secondary and tertiary characters. Done. No more, please. It's enough. It's enough. Nobody wants it. All right, we got two emails.

[Ben Carlson]

Market, I'm fine with.

[Michael Batnick]

Yeah, I'm. Yeah, we got two emails like this. Michael's TV read the Samsung logo on a Sony tv. If it's a qd, oled, Sony tv. The panel inside is made by Samsung Display. The image processing and power supplies are made by Sony. It's possible that if it froze, the panel could be in a weird mode that would show a Samsung logo. Thank you, Internet or listener.

[Ben Carlson]

Listen Is this kind of like how, how Alexis is basically a Toyota? Like so Sony and Samsung are kind of the same thing, you know, like a Lexus and a Toyota. It's basically the same thing. They just make it a little, little nicer.

[Michael Batnick]

Yeah.

[Ben Carlson]

Okay, so that's I was thinking about.

[Michael Batnick]

So my, my car, I took the Jeep Wrangler to get the puppy. It was a three hour drive and it was not a pleasant drive. I was thinking about what my next car is going to be and I was thinking like, should I just get a Toyota Corolla? But I need an suv. So because of the kids, on the one hand I'm tempted to like go all the way to the top end, but on the other hand, I think I'm just going to get a Toyota.

[Ben Carlson]

Toyota what?

[Michael Batnick]

I would not say, just those are great cars. Toyota suv. I don't know.

[Ben Carlson]

Okay.

[Michael Batnick]

Something reliable. Old reliable, know what I mean?

[Ben Carlson]

Makes sense to me.

[Michael Batnick]

All right, Ben, I. I'm going to Memphis on Friday night to watch the Knicks play the Memphis grizzlies for our 40th birthdays. My friend said, let's go to the Knicks game. We're gonna. One of our friends is a hustler, not a swindler, but he's very good at navigating. And he was able to somehow procure courtside seats like literally on the floor next to the scores table. Oh, so I'm gonna be wearing my bright, my bright orange Knicks hoodie so I'll be featured on television.

[Ben Carlson]

So you're gonna eat barbecue and go to the Knicks game for your 40th?

[Michael Batnick]

Yeah, I have to take a flight the next morning. Robin's like, you idiot, Kobe's birthday party's on Saturday. How many times do I have to tell you? Why do you do this every year? You. So my flight was supposed to land at 3:00, his party's at 3:30. So I sat there. Does he really need me at the party? Just kidding. So. So I'm taking a flight the next morning at 7:00. But I discovered, I didn't discover. It's Memphis is central time. And I gotta be honest, I think this might surprise the listeners, especially Mr. Troglodyte. I'm actually pretty good at US geography. Okay, I'm pretty good. But I was surprised. I was surprised. Maybe I'm telling on myself to learn relearn. I forgot. It's been a while since I looked at the US map. A lot of my US mapmanship is from 8 years old. Look how far west Tennessee is, it's Central time. How are you Eastern time?

[Ben Carlson]

People in New York always find it hard to believe that Michigan is still eastern. We're the furthest west you can go pretty much. You know that John Denver this map.

[Michael Batnick]

That John Denver's full of shit, man. That's what I think about Michigan. You're not Midwest, you're Mideast.

[Ben Carlson]

It is weird because you drive down to Chicago, which is not that much further west than Grand Rapids and it's in central. It doesn't seem to make any sense.

[Michael Batnick]

I always felt like Illinois and Indiana should, should be flip flopped.

[Ben Carlson]

Here's the thing I didn't realize though. Some of these like half of Nebraska is mountain and half of it central. I didn't know that you could break it up by state. I thought it'd be the whole state.

[Michael Batnick]

Oh, wow. So anyhow, I have to wake up at, at 3:30 Central Time, which is.

[Ben Carlson]

Ready an hour earlier in the morning.

[Michael Batnick]

Well, my flight's at seven.

[Ben Carlson]

Oh my God. Skip the game, man.

[Michael Batnick]

Skip. Skip the game.

[Ben Carlson]

I'm just kidding.

[Michael Batnick]

This guy should skip his birthday party.

[Ben Carlson]

Don't go to bed.

[Michael Batnick]

This is the only time in my life I'll have the opportunity to sit courtside because the prices in Memphis are significantly different obviously than in New York.

[Ben Carlson]

Okay, story time.

[Michael Batnick]

Go ahead.

[Ben Carlson]

So my big thing as a parent, I might have mentioned this before. I tell my kids, because you cannot teach talent when it comes to youth sports or any sports. Right. Like you go to some games and you go, this kid is bigger, faster, stronger than all the other kids. You just tell, it doesn't matter how much you practice, you're never gonna be as good as that kid.

[Michael Batnick]

Yep.

[Ben Carlson]

So I just tell my kids the only two things I care about. I care about having fun and trying your best. If you don't try your best, then that's the only time I really get disappointed. So my daughter had a game last Thursday. She hadn't had a game in a while. It had been like a little rust, maybe winter break and just wasn't indoor soccer wasn't trying at all. And she's our, she's our littlest daughter. We always thought she'd be the, the, like the cheerleader, the princess because she, she first started playing soccer like age 4 and she was one of those kids that was scared of the ball. And after one year playing she said, I'm done. I don't want to play soccer. And we said, fine. You, you don't seem to be that into it. But then she watched her older sister play. And I think she realized, like, oh, this is what soccer is. And then she came back, like, two years later and said, I want to play. And she goes out there, and she's aggressive. And, like, the first game she's back, she scores, like, seven goals. And I'm not saying this to, like, brag as a parent, but she, like, she something. Something, you know, switch flipped in her. So we go to her game the other day on Thursday night, I believe it is, and just the effort's not there. She's standing around. She's not running. And my wife and I are kind of elbowing each other, like, what's going on here? She's. She's not. She's usually really aggressive, and she just is not playing hard. She's not trying. She's just a dud. And so after the game, I said, all right, this is a teaching moment. I said, did you do the two things that I always ask of you? Did you have fun? Did you try your best? She said, well, I think so. And I said, I don't think. And I thought. I'm thinking to myself, I'm being a good parent here because I'm teaching her a lesson that every time we go on the field, we try our hardest.

[Michael Batnick]

Yeah.

[Ben Carlson]

She didn't make any excuses. She got kind of mad that I even brought it up. Whatever. We get home, she goes to bed because it was late. Ten minutes after going to bed, she walks downstairs and says, I threw up everywhere. And it turns out she wasn't trying very hard because she was very sick. So I felt about this small. And it turns out the reason she goes, you know, I did kind of have a stomachache during the game. I said, yeah, obviously, she puked. She proceeded to puke all night. Some sort of norovirus. And I realized this is what parents every year say this like, man, something is going around, huh?

[Michael Batnick]

But this is what you say to school.

[Ben Carlson]

So she threw up. This is one of those pukes where you just throw the comforter and the sheets in the. In the trash.

[Michael Batnick]

Yeah.

[Ben Carlson]

There's no even try to. And then the next night, my son got it, and then I got it. So that was a fun weekend. It just ripped through our house.

[Michael Batnick]

You called me yesterday. You sounded dead.

[Ben Carlson]

I haven't had one of those days since I first got Covid, which was, like, five years ago, where I had to spend all day in bed. Yesterday, I feel better today, but I needed a day, and I haven't had that. Usually, if I'm a little Sick. I'm fine. I can still continue to work. Yesterday, I had nothing.

[Michael Batnick]

Yesterday at Kobe's basketball practice, one of the boys hit a shot and did one of these. The double middle finger.

[Ben Carlson]

What?

[Michael Batnick]

And I immediately texted Rob. I'm like, how does it. How is. How could. These boys are 7 and 8. How is it possible that parents, a lot of parents not unique to this person, would just like, tolerate that behavior?

[Ben Carlson]

Kids definitely these days have more. They. Bigger celebrations than they had in the past. Like, I see kids all the time. They score, they, like, flex their muscles, you know, and. And they do a lot more of the celebrate. Like they.

[Michael Batnick]

I get that. But like the. The middle finger, that's pretty bad.

[Ben Carlson]

I've. I've never seen anyone do that in the NBA even. They probably get fined, wouldn't they?

[Michael Batnick]

All right, Ben, we were supposed to put together our top 10 list of TV shows. I assume you didn't do it because of the neurovirus. I didn't do it either. Giving you the.

[Ben Carlson]

I did it.

[Michael Batnick]

Oh, you did. All right. We. For next week.

[Ben Carlson]

All right. Yes, I actually. Yes, I did it.

[Michael Batnick]

All right, my bad.

[Ben Carlson]

I should have tears. I like the top tier. The maybe. And then trailed off and did make it.

[Michael Batnick]

Okay, so I'm watching Zero Day on Netflix. It's a limited series, which. That's right up my alley. I prefer one. One. One series to. Or one season to two for most shows. For example, the show paradise on Hulu. I'm really enjoying it. It's a really fun show. I don't need a second season. It got renewed.

[Ben Carlson]

Yeah, I agree. We watched a few episodes. That seems like it could be a one season kind of show.

[Michael Batnick]

Yeah. So anyway, so. So the limited series zero day, it's with Bobby D. It's with GLP1 Jesse Plemons. Are you watching this at all? No, he's super skinny. And. Oh.

[Ben Carlson]

GLP1 Jesse Coleman. Okay, gotcha.

[Michael Batnick]

I was talking to my dad about it and he said, oh, I heard it was awful. I said, really? And then I went online and yeah, reviews are pretty bad. I gotta say. I don't. I don't get it. It's not. It's like a. It's a spice and espionage spy hacker attack, which is my type of show. And I'm. I'm enjoying it. Although. But now the bad reviews are in the back of my head, like, am I enjoying it? No, I am enjoying it. I like it.

[Ben Carlson]

54% of rotten tomatoes. Okay. Here's the thing, though. For our TV list, you can't have a miniseries count as a TV show, though. A miniseries is essentially a movie to me. Ooh.

[Michael Batnick]

So you can't include Band of Brothers, your favorite show ever?

[Ben Carlson]

No, can't Chernobyl, nothing like that. You can't include a one season show in the best TV shows of all time because.

[Michael Batnick]

Okay, fair enough. Anyway, yeah, so zero day. I'm enjoying it.

[Ben Carlson]

So you think it's okay? Okay. All right.

[Michael Batnick]

Yeah, it's six episodes. It's, it's, it's Robert Dairo, you know. Good.

[Ben Carlson]

I'll try it.

[Michael Batnick]

And Court of Gold, another documentary. I guess it's six episodes too, about the Olympics and not just the U.S. like, it covers Serbia and France and it was so good. Watch with Kobe. He loved it. The last. I mean, the Serbian game was great, but the French game where Steph just went nuke nuclear was incredible. So much fun.

[Ben Carlson]

Remember watching those? I've been watching a ton of new stuff. I continue to watch White Lotus and I just the way that they, I don't know if you watched the new one yet. The, the three women, the way that they talk about each other behind their back is just so perfect.

[Michael Batnick]

It's so good.

[Ben Carlson]

It's so. That gets me. Someone emailed in and said, hey, I, I, I gave this movie to you and you never watched it. You never mentioned it. So I decided to try it last week and it was on Paramount. It's called Together. Together.

[Michael Batnick]

Never heard of it.

[Ben Carlson]

Ed Helms. And I didn't recognize the female lead, but I thought she was pretty good. It's a.

[Michael Batnick]

You love Ed Helms. Who doesn't? But you really do.

[Ben Carlson]

I do like Ed Helms. It's a movie about.

[Michael Batnick]

Hold on, hold on, hold on. All right. A young loner. Excuse me. A young loner becomes a surrogate mother for a single middle aged man who wants a child. Their unexpected relationship soon challenges their perceptions of connection, boundaries, and the predictors of love. Yeah, this sounds like a bad movie.

[Ben Carlson]

Definitely a bad movie. And it's kind of a movie that could have been very cheesy and over the top, but it was very subtle and understated and I didn't love the ending, but it was a, it was a good sort of touching movie. Very well done.

[Michael Batnick]

Okay. Not for me or what do you think?

[Ben Carlson]

No, not for you.

[Michael Batnick]

Okay.

[Ben Carlson]

It's about all I got.

[Michael Batnick]

Okay. We good? All right, again, thank you everybody for the outpouring of support for Ben. It really was incredible.

[Ben Carlson]

Very touching.

[Michael Batnick]

Inbox a mile long Animal spirits@the compoundnews.com we'll see you next time.