Animal Spirits Podcast – Episode 396: "Trump Coin" Released on January 22, 2025

Hosts: Michael Batnick and Ben Carlson
Producer: The Compound
Description: Animal Spirits explores markets, life, and investing through insightful discussions. Hosts Michael Batnick and Ben Carlson delve into current financial trends, personal anecdotes, and broader economic themes.

1. Introduction to Market Shifts

The episode kicks off with Michael Batnik highlighting Todd Sohn’s insightful chart on the declining percentage of the S&P 500’s consumer staples sector. He emphasizes how giants like Microsoft, Nvidia, and Apple have eclipsed the entire consumer staples sector in market size.

Michael Batnik [00:00]:
"Todd Sohn made an incredible chart showing the declining percentage of the S&P 500 of the consumer staples sector... staples are smaller the whole sector than Microsoft, than Nvidia, then Apple individually."

Ben Carlson expresses surprise at this shift, noting the NASDAQ 100's growing dominance since its inception in 1985.

Ben Carlson [00:35]:
"NASDAQ tells us that the NASDAQ 100 started in 1985. Eight of the 10 biggest companies in the world are in it... The gap is definitely closing."

2. Personal Anecdotes and Light Banter

The conversation swiftly transitions to personal stories, with Michael sharing a recent financial mishap involving his FanDuel account, humorously blaming Ben for the "swift kick in the pants."

Michael Batnik [02:03]:
"It was almost a catastrophic rug pull in my FanDuel account over the weekend. And it's not about my money. It's about you, Ben."

Ben responds with a relatable sports analogy, discussing his experiences as a Detroit Lions fan and the emotional toll of their performance.

Ben Carlson [02:22]:
"I've always kind of wondered what it must be like to be a Perma Bear and just lose all the time. But I know because I'm a Lions fan, I know what it's like to be a Perma Bear now."

Their exchange showcases the hosts' camaraderie and sets a casual tone for the episode.

3. The Rise of Trump Coin and Crypto Concerns

A significant portion of the episode focuses on the emergence of "Trump Coin," a meme cryptocurrency associated with former President Donald Trump. Michael narrates his initial encounter with Trump Coin on a train, contemplating its speculative nature.

Michael Batnik [04:53]:
"I see Trump Coin. I'm like, what? And I didn't really think a ton of it. And then I thought, wait, should I buy this with the nonsense that's going around?"

Ben Carlson provides a balanced perspective on the crypto industry, acknowledging past innovations while expressing concern over the current trend of meme coins and speculative assets.

Ben Carlson [05:35]:
"The industry has celebrated meme coins and stuff. That's where they have made a mistake—saying that meme coins are the thing that gets people into crypto and it's the gambling and speculating against people."

Michael Batnik [07:30]:
"This is a shit stain on the industry and I don't think anybody's excited about it."

The hosts debate the sustainability and ethical implications of such speculative ventures, comparing the current crypto landscape to historical financial booms fraught with fraud.

Ben Carlson [08:50]:
"The 1920s was the first time they really rolled out financial products in the roaring twenties... After that, you had to create the SEC and banking regulations."

Michael Batnik [10:04]:
"It's pure gambling. If you do get wrecked, really that's your fault."

4. Regulatory Challenges and Industry Impact

The discussion moves to regulatory perspectives, with references to Gary Gensler’s role in the crypto sector and the unintended consequences of stringent regulations.

Ben Carlson [12:03]:
"Gary Gensler caused so much damage because he created the crypto army. Had he just let these damn ETFs come into existence, he would not have galvanized an entire group of people against him."

Michael echoes this sentiment, critiquing ineffective regulatory measures that have potentially fueled further market instability.

Michael Batnik [12:16]:
"He didn't do anything helpful."

They explore how lax regulations could lead to increased financial crimes and consumer losses, undermining trust in the crypto ecosystem.

Ben Carlson [13:11]:
"This could end up being bearish for crypto. Other say, numbers to the moon. I don't think you could have a take bullish or bearish from here on what that means."

5. Societal Impacts and Generational Shifts

The hosts delve into the broader societal implications of crypto phenomena like Trump Coin, particularly focusing on generational attitudes towards money and wealth.

Ben Carlson [22:18]:
"Gen Z hasn't had to live through a financial crisis. It could be 20 years until we have one, but eventually, that alters your perception of risk."

Michael Batnik [19:53]:
"Every generation has something like this... That's what I'm trying to deal with."

They discuss how the pervasive online presence and meme culture can distort young people's financial priorities, leading to increased financial risk-taking and nihilism.

Ben Carlson [20:29]:
"If you have a nihilism view of the world, that nothing matters, that's a bad narrative for crypto."

6. Economic Indicators and Market Sentiment

Shifting back to economic discussions, Ben presents data on recession periods, highlighting the unprecedented economic stability in the past decade despite underlying market noises.

Ben Carlson [24:09]:
"The 2010s were the first decade ever where we didn't have a recession or a bear market. It's never happened in the history of modern finance."

Michael counters by suggesting that increased information and market noise have amplified perceived economic volatility.

Michael Batnik [24:42]:
"The noise has made it 50,000 times worse. I don't think people in the 1980s really thought about the stock market much."

They debate the accuracy and impact of economic indicators versus societal perceptions shaped by constant media exposure.

7. Housing Market Dynamics

A segment is dedicated to the US housing market, discussing the discrepancy between investor valuations and consumer realities.

Ben Carlson [44:05]:
"Top 10% income is up 50% income-wise."

Michael Batnik [45:09]:
"They're saying shares of single-family landlords are trading at 35% and 20% discounts to their net asset values."

They analyze how institutional investment influences housing prices and the challenges it poses for average homeowners, questioning the sustainability of current market trends.

8. Technological Innovations and Failures

The hosts touch upon advancements and setbacks in technology, particularly focusing on self-driving cars and consumer electronics.

Ben Carlson [36:21]:
"Goodyear is rolling out new tech that uses information about the type and make of the tires... to predict exactly how long it would take to brake in certain conditions."

Michael Batnik [41:22]:
"Sonos rolled out a redesigned app... one of the most disastrous software updates in recent history of consumer technology."

They critique the balance between innovation and practicality, highlighting how technological failures can significantly impact consumer trust and company valuations.

9. Cultural Reflections and Personal Stories

Interspersed with financial discourse, Michael and Ben share personal stories and cultural observations, adding depth and relatability to the episode.

Michael Batnik [35:03]:
"I bought eggs and a stick of butter for $15. He said, 'I've never paid above $5, but now I'm charging $8.'"

Ben Carlson [51:20]:
"My twins do basketball at the YMCA. It's like first and second grade teams... $20 a person to go."

These anecdotes illustrate everyday economic pressures and the evolving landscape of consumer expectations.

10. Entertainment and Leisure

The conversation lightens as the hosts discuss movies and television, reflecting on personal tastes and cultural media.

Ben Carlson [52:19]:
"I saw the Kieran Culkin, Jesse Eisenberg movie... It's one of the realest movies I've felt in a while."

Michael Batnik [54:07]:
"I watched the first episode of American Primeval last night. Super violent."

Their insights into entertainment choices offer a glimpse into how cultural media intersects with personal lives and societal trends.

11. Closing Remarks and Future Outlook

As the episode wraps up, Michael and Ben reflect on the continuous evolution of markets and societal norms, acknowledging the unpredictable nature of future developments.

Michael Batnik [58:06]:
"It's going to get crazier."

Ben Carlson [58:12]:
"Don't get."

They reiterate the importance of staying informed and adaptable in an ever-changing financial landscape, hinting at more in-depth discussions in upcoming episodes.

Highlighted Quotes:

• Michael Batnik [07:30]:
  "This is a shit stain on the industry and I don't think anybody's excited about it."

• Ben Carlson [12:03]:
  "Gary Gensler caused so much damage because he created the crypto army."

• Michael Batnik [19:53]:
  "Every generation has something like this... That's what I'm trying to deal with."

• Ben Carlson [24:09]:
  "The 2010s were the first decade ever where we didn't have a recession or a bear market."

Conclusion

Episode 396 of the Animal Spirits Podcast offers a multifaceted exploration of contemporary financial trends, personal experiences, and societal shifts. Michael Batnick and Ben Carlson provide a balanced yet critical analysis of the burgeoning meme coin phenomenon, regulatory challenges within the crypto industry, and the evolving dynamics of generational attitudes towards wealth. Through personal anecdotes and data-driven discussions, the hosts shed light on the intricate interplay between market forces and societal behaviors, encouraging listeners to navigate these complexities with informed skepticism and adaptability.

For more insights and updates, visit Animal Spirits Podcast.