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- [00:00]
Michael Batnik
Today's show is brought to you by Nasdaq. Ben. Todd Sohn made an incredible chart showing the declining percentage of the S&P 500 of the consumer staples sector. The consumer staples sector. So Costco, Walmart, Pepsi, like, maybe some of those are discretionary, but, like, things that you can't live without. Right. The staples are smaller the whole sector than Microsoft, than Nvidia, then Apple individually.
- [00:35]
Ben Carlson
Oh, I didn't know that.
- [00:35]
Michael Batnik
The NASDAQ 100 swallowed the consumer staples sector. I mean, a long time ago, but now just individual components are bigger than the entire staples sector.
- [00:46]
Ben Carlson
So NASDAQ tells us that the NASDAQ 100 started in 1985. Eight of the 10 biggest companies in the world are in it. It's like on the heels of the S and P in terms of name recognition. Now in terms of a benchmark, I feel like this is all happening, right? It's getting there. It's very impressive.
- [01:03]
Michael Batnik
I mean, how about this? If you told me 10 years ago, it would have been like, come on, right? It would have been unthinkable. But, yeah, you're right. The gap is definitely closing.
- [01:11]
Ben Carlson
Yeah. So the largest Q's ETF is the Invesco one. It's $300 billion or more now.
- [01:19]
Michael Batnik
How much is in spy? Probably double that, I think, but still.
- [01:22]
Ben Carlson
So, yeah, it's very impressive. So if you want to learn More about the NASDAQ 100 ecosystem, check the link in the show notes and visit nasdaq.com to learn more. Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnik 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.
- [01:50]
Michael Batnik
This podcast is for informational purposes only.
- [01:52]
Ben Carlson
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.
- [02:04]
Michael Batnik
Welcome to Animal Spirits with Michael and Ben. It was almost a catastrophic rug pull in Michael's FanDuel account over the weekend. And it's not about my money. It's about you, Ben. And I. I feel for you. That was. That was one swift kick in the pants.
- [02:23]
Ben Carlson
How are you? Listen, as a Detroit Lions, I tweeted out after the game that 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.
- [02:35]
Michael Batnik
I felt your pain. That was tough. That was so.
- [02:38]
Ben Carlson
I've never seen. Because college sports are very big in the Midwest, so in Michigan, but we have Michigan fans and Michigan State fans and Ohio State fans and Notre Dame fans.
- [02:47]
Michael Batnik
So let me ask you, how big of a Lions fan are you?
- [02:50]
Ben Carlson
Well, the thing is I.
- [02:51]
Michael Batnik
Are you able to. Are you like, were you like, okay the next day or.
- [02:54]
Ben Carlson
Oh, no, I was depressed all weekend. I was extremely depressed. My daughter kept telling me, like, stop telling me how depressed you are. And I can't. I'm sorry, I gotta stop talking about it. But I've always been a bigger college fan than pro fan. But I've really gotten into. I've followed the Lions forever, but it's not like I ever had my heart really into it because they were like the laughingstock of the NFL for years and years and years.
- [03:14]
Michael Batnik
And now, to make matters worse, not to pour SOT in the wound, but you had Ohio State win last night, which probably was whatever.
- [03:20]
Ben Carlson
No, I'm okay with that because Michigan beat them. So Michigan is a de facto back to back champion. So I'm okay with that one.
- [03:26]
Michael Batnik
But you're losing your offensive and defensive coordinator. Like, this should have been the year.
- [03:30]
Ben Carlson
Yeah, no, it's, it's. There's no positive spin on it. It was, but I. So I mentioned like all the different college fans in the state of Michigan, but for the Lions, every Saturday and Sunday, I've never seen more Lions gear. Like, everyone was into it. It was like the whole state kind of shut down. And so, yes, unfortunately for the Lions fans, it's, it's painful, but I was expecting it. So we move on.
- [03:53]
Michael Batnik
I wasn't considering the wagers in my account, but I was bailed out by the bank of Buffalo. Shout out to Benny markets. Yeah, tough loss. Tough loss. Okay, one quick plug. I think we said this before, but I'll say it one more time. Me and the team are coming to Naples. Josh and I are doing a live TCAF with Brian Belsky, which is sold out, unfortunately. But we're going to be there the week of February 17th. So we're coming in the 19th, Wednesday, we're out of there on the 21st or Friday. But we are meeting with clients and prospective clients and advisors that want to talk and learn about what it's like to be an advisor here at Reddholds Wealth Management. So if you want to learn more about meeting us. Infoitholswealth.com and we tried to get A.
- [04:40]
Ben Carlson
Batnik Carlson family trip together for this. But I'd already had something else planned. It was the last minute. I blame you for asking me. Too late. But we tried.
- [04:51]
Michael Batnik
Okay.
- [04:52]
Ben Carlson
One of these years.
- [04:53]
Michael Batnik
All right, so I was on the train. Where was I Saturday night? Oh, was it Saturday? Friday, Friday I was at the Nick game. I was at the Nick game. And I'm on the train and I see Trump of this 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? And I'll just continue listening to my podcast and not buy it. So I'm guessing most, I'm guessing our audience under 40, let's say, has heard of the official Trump meme coin, but maybe our audience, let's say over 50, is completely oblivious as to what happened over the weekend.
- [05:36]
Ben Carlson
Possibly, yes. And I want to preface all this by saying, you and I, I think, for being labeled trad fi guys by the crypto community, which always seems like a put down when they call you trad fi, like, you know, it's the Hill or the Mao meme looking down.
- [05:50]
Michael Batnik
I'm part Chad, but I think we've.
- [05:53]
Ben Carlson
Been very fair to crypto over the years. And in fact, we've gotten a lot of people in the traditional finance space who always say, like, guys, stop talking about crypto.
- [06:00]
Michael Batnik
What?
- [06:00]
Ben Carlson
You know, this thing is a joke. Don't talk about it. And we, I think we've been very fair. So I just want to preface any comments we make today with the fact that we have been very fair to the industry. We've had a lot of podcasts on it. A couple six weeks ago, our podcast was titled, like the Bitcoiners one. Right. Like, we've, we've given praise to crypto, but I think one of the cool things about the industry at the outset was how much hope there was to, like, change the world and build cool stuff. And it seems like every bull market that we've lived through for crypto, it's been like, hey, listen, we're going to smart contract this. We're going to tokenize that. We're going to make this more efficient, going to make that more efficient. We're going to do this. And I kind of feel like this bull market, they're not even pretending anymore.
- [06:38]
Michael Batnik
Okay.
- [06:39]
Ben Carlson
They're not even like pretending that we're going to build something cool. It's just, it seems to me, at least in terms of the attention.
- [06:44]
Michael Batnik
Yeah, but, but it's all gambling and.
- [06:46]
Ben Carlson
Meme coins and pump and dumps and it's kind of depressing.
- [06:48]
Michael Batnik
Yeah, no, I hate it. I hate it. And this is not. They would label this cope. Listen, I love that there's people that got rich off this coin that like.
- [06:57]
Ben Carlson
Yeah, I don't, I don't care about.
- [06:58]
Michael Batnik
I love that there's people that experience life changing money. What I hate is everything else. The fact that an incoming president did this right before the inauguration. What I hate is the fact that for every person that made life changing money, there's people that are going to lose life changing money. And this is. You say, like, we've been very fair to the crypto industry. I don't even think this is a crypto industry thing because. Because most real legitimate people in crypto are not happy with this. They're not celebrating this. This is a shit stain on the industry and I don't think anybody's excited about it.
- [07:30]
Ben Carlson
But I feel like the industry has celebrated the meme coins and stuff. And like, that's where they have made a mistake is saying that, like, and I've heard, I've seen legitimate people trying to say, like, listen, meme coins are the thing that get people into the, into crypto and it's the gambling and speculating against people.
- [07:44]
Michael Batnik
Those are French dumbasses.
- [07:46]
Ben Carlson
But the fact that meme coins have been allowed to be the thing for this cycle, at least it feels like that to me has been the mistake of crypto. And then, then once the rules are taken away and then all hell breaks loose, then this is what happens.
- [08:00]
Michael Batnik
All right, so I think, I think we pulled some tweets to sort of go through the story to explain what the hell just happened over the weekend. In my opinion, this, I mean, this makes Gamestop look like a joke. Right? This makes Fart Coin the quaint. This is the. This is the craziest thing I think I've ever seen in financial markets. Like, the incoming president did this right before the inauguration. So here we go.
- [08:24]
Ben Carlson
Yeah, but the. But the Dogecoin and Fart Coin were the predecessors to this.
- [08:28]
Michael Batnik
Yeah.
- [08:29]
Ben Carlson
You don't. They had to walk before.
- [08:30]
Michael Batnik
Yes.
- [08:31]
Ben Carlson
Trump Coin could run or whatever. Right?
- [08:32]
Michael Batnik
Yeah. So, Jana, Jim Chanos said, I'm afraid the golden age of fraud may not do justice to the next four years. This is going to get a lot crazier. I'm not saying that, like, this might be the peak craziness, but, like, throw everything out the window of how dumb you think this can get or how Big the numbers can get. Because it's just going to get crazier.
- [08:50]
Ben Carlson
Well, because the rules have been thrown out. So the, I think the, the, really, the way that I would like to put this in historical precedent is the 1920s was the first time they really rolled out financial products in like the roaring twenties because things were so happy and crazy and all this innovation and people got absolutely wrecked by these things. And I think, and after that you had to have the creation of the SEC and all these banking regulations and unfortunately I think that's what it's going to take is taking all the rules off the table for crypto. Because I've seen, I saw a lot of crypto people even saying like, oh wait, so crime is legal now? And they weren't kidding.
- [09:26]
Michael Batnik
Yeah.
- [09:26]
Ben Carlson
So I do think that like, yeah, there's going to be life changing amounts of money to be made, but there's going to be so many people that get taken advantage of and lose a lot of money as well.
- [09:34]
Michael Batnik
Well, hang on to that point. I think that everybody knows what's going on. So listen, I feel bad when people get rugged and wrecked, but I think at least, at least everybody knows that this is pure gambling. You know what I mean? Like it's a little bit different. I'm not saying it's better, but everybody knows that it's pure gambling. There's no illusion that there's any fundamentals coming or anything else. It's pure gambling. So if you do get wrecked, really that's your fault.
- [10:04]
Ben Carlson
Well, for sure. If you, if you lose money in this space, yes. That's, you take personal responsibility. It's, it's too bad that there are grifters and charlatans that are going to be taking advantage. But yes, apparently, I guess it's fair game now.
- [10:16]
Michael Batnik
Okay, this is from Vidamo on Twitter. Actually insane that a career grifter managed to surprise a whole industry of grifters who are expecting him to grift with unprecedented levels of grifting. Well said. I have nothing to add. Chairlift capital. I fully understand why China banned crypto. This is collapse of society type stuff. So to reiterate or to iterate, because I don't think we said this earlier, I don't know what percent of the float that Trump owned. Is it 80? It's some ungodly number. So normally with a meme coin, the developers will own, I don't know, 20% of it. Right. With this, Trump owns almost all of it. So the supply is very, very, very small. So yeah, this is. I think if there's. I'm, like, really grabbing for, like, not going to dark places. I think this is a much bigger online story. Like, I don't think that, like, most of the population understands, thank God, what's going on, because it's so right.
- [11:18]
Ben Carlson
I don't think my parents would get this right.
- [11:19]
Michael Batnik
Like, it's so. It's so dark.
- [11:21]
Ben Carlson
No offense, mom and dad.
- [11:23]
Michael Batnik
Somebody. Somebody else tweeted, gary, come back. You were right in reference to Gary Gensler. I was listening to Joe and Tracy this morning with Austin Campbell, I believe is his name, who is a serious person in the crypto industry, like stablecoins, professor banking, like, the whole background, a real person. And he made a great point. 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 that Trump then galvanized to help win the election and, you know, contribute to all the craziness going on. Yeah.
- [12:04]
Ben Carlson
And whatever he was trying to hold back on, like, what did it accomplish?
- [12:08]
Michael Batnik
It boomeranged. It had the opposite intended effect.
- [12:12]
Ben Carlson
Yeah, it did. Whatever they were fighting against, it had no positive benefits.
- [12:16]
Michael Batnik
No, he didn't do anything helpful. Okay, here's another one from Chairman Berb Bernanke. Look, you have to admit, it's at least a little funny that the guys who spent the last four years screaming about how corrupt Nancy Pelosi was for buying cues and. And Nvidia are just straight up doing crime in the Salana meme coin trenches.
- [12:37]
Ben Carlson
Yeah, it would be nice if, like, at least part of the ownership came with, like, hey, if you buy this coin, we're going to send you some Trump sneakers and Bibles. Right. But there's. They're not even pretending like this is anything other than a transfer of wealth.
- [12:51]
Michael Batnik
And then Noah Smith wrote a. Wrote a post on this, and he was basically saying, listen, if somebody wants to bribe Trump, like, how would you stop it if somebody's just buying Trump coin? How could you prove that there's. That there's any. You know, it's like, what. I think the. I think the coin's gonna go up. I'm not allowed to buy something. I think it's gonna go up.
- [13:11]
Ben Carlson
Yes. I think that's the scary part is that this and the fact that he's putting people in positions of power for regulations that are gonna look the other way if anything did happen. So it doesn't matter one thing.
- [13:23]
Michael Batnik
We didn't mention is that from the time of launch until the peak it was up, I saw a stat like more than the S&P 500 over the last 45 years or some crazy number. It was up like 50,000%. It went from 0.00 whatever, up to a $70 billion market cap, like overnight, and it's down by half. But still just. Just wild stuff. All right. I think Howard had a pretty sober thought on where we've come and where we're going. Howard said re latest Trump and crew grift being bad for crypto. I've been telling people the following. People still went west when they heard their friends were killed by Indians. Now, whatever. I don't know if it's a perfect analogy, but I think it's pretty good in the sense that, like, crypto is still going, like digital stablecoins, tokenization, like, all of that is still coming, and this clown sideshow is not going to stop it. It's not going to. It just. So I think that was a good way to think about it yesterday.
- [14:14]
Ben Carlson
Right? They still. The ETF was a big deal. If bitcoin is able to supplant gold as the digital gold, that's obviously a huge deal. The stablecoin thing is a big deal. By allowing people in other countries to get access to the dollar in a stable way like that, that stuff, crypto has made inroads. I just. This. The fact that this stuff just sucks out all the oxygen out of the room. And we know that there's smart people in the crypto industry. We've talked to them, we've met with them, we know some of them, but it seems like they are being pushed to the side very slowly but surely.
- [14:48]
Michael Batnik
No, I don't think so. I don't think so. I think the loud voices. I think the. I think, again, I saw a few real crypto people cheering this on.
- [14:57]
Ben Carlson
Oh, yeah, No, I saw a lot of them saying, like, I can't believe this is happening. This is not what we signed up for.
- [15:00]
Michael Batnik
This completely delegitimizes a lot of the work they're doing. So, yeah, it's nasty stuff, all right. And Ben, perhaps the coup de grace. There was a pastor from Detroit yesterday at the inauguration that. That did some speaking and he launched a meme coin, or there was a meme coin launched and it was given to him. I don't know. But he did a video, you know, encouraging people to buy. What is this? Lorenzo. A Lorenzo coin. I just. Come on.
- [15:36]
Ben Carlson
I mean, the hope is that fine Every charlatan and grifter does one of these meme coins and there's so much supply that eventually people just stop caring and it stops mattering. And enough people lose money that they go, okay, I'm not going to gamble on this stuff and speculate anymore. Because you mentioned like the returns going from zero to 70 billion or ever. Of course, that's astronomical. What was it, a dozen people who did it, who got in at the very beginning? And I mean that's.
- [16:01]
Michael Batnik
Wait, hold on. There was. How many wallets were there? Was there a million or a hundred thousand? There was a lot of people dude that bought it. A lot of people bought this.
- [16:12]
Ben Carlson
Yeah, but I don't know, it's just. Did you see, I saw this meme going around from the Big Short where Steve Corella, Steve Isman says, I don't get it, why are they confessing? And the guy says, they're not confessing, they're bragging. That's the stage we're in. And again, I saw a lot of level headed people be like, okay, what is like the game theory here of if there really are no regulations, no rules and very shady gray stuff, gray area stuff is available, what does that mean? And some people say that's this could end up being bearish for crypto. Other people say, no numbers to the moon. And I don't think that you, that you could possibly have a take bullish or bearish from here on what that means.
- [16:49]
Michael Batnik
I think, I think crypto is like a freight train and this is just like a, a rock that gets in the way.
- [16:55]
Ben Carlson
I do, I do think though, this kind of stuff, enough of it could end up being a very big black eye.
- [17:01]
Michael Batnik
It already is. It's good. This is horrendous.
- [17:05]
Ben Carlson
Yeah. If he opens up the curtain and it shows, like, okay, this stuff means nothing to me. Maybe it means nothing to the people who care about this. That's a bad precedent to set. Like none of this means anything. It's all made up. If people start thinking that and that takes hold, that is not a good narrative to have. Because part of the reason crypto has gotten so big is because the narrative has been positive. It's innovation and we're digital tech, you know, digital money and all this stuff. If that narrative starts shifting, that's a bad thing for crypto. Right. Because we know there are no cash flows, there are no behind it.
- [17:38]
Michael Batnik
I don't think that's going to happen. But I would take nothing, you know, I would take nothing off the table, anything is possible. All right. Sort of related. But for our advisors out there, Mark Meredith tweeted, politicians are clearly above the law, while somewhere there is a financial advisor getting fined for texting a client and not archiving it properly.
- [17:57]
Ben Carlson
Amen.
- [17:59]
Michael Batnik
And that's not just for our industry. You can, you know, every industry could say something similar about dumb regulations that you know are onerous.
- [18:08]
Ben Carlson
Right. Yes. I, I, I think if we wanted to launch an Animal Spirits meme coin, our compliance officer would have a problem with that.
- [18:15]
Michael Batnik
Probably in a similar vein, there's now over 100,000 CFPs and I don't know, Ben, we've been getting a lot, a lot of emails in our inbox from younger people going down the CFA route. And we've said it before and I will probably say it in future episodes. If you are looking to get into the wealth management industry, the CFA is the wrong designation.
- [18:36]
Ben Carlson
Definitely.
- [18:37]
Michael Batnik
Okay. It is the right designation if you are trying to be a true analyst at a bank or something like that.
- [18:45]
Ben Carlson
Portfolio manager, security analyst, research analyst, that sort of thing.
- [18:48]
Michael Batnik
Yeah. Like, so am I saying that you can't thrive in this environment, in this industry with the cfa? No, that's not what I'm saying. But if you're a young person, you're like, hey, which one should I take? The CFP is ten times more valuable. Okay. And it's reflected in the numbers of people that are taking the CFP versus cfa.
- [19:04]
Ben Carlson
There's going to be so much need for financial advice in the years ahead that that to me is the biggest bull market over the next 20 or 30 years is taking care of all the trillions of retirement assets for baby boomers.
- [19:13]
Michael Batnik
Yeah. Okay. So I want to just put a bow on this. Kyla Scanlon said traditional limits like physical constraints, geographic boundaries or institutional checks stop mattering because digital attention moves instantly and globally while narrative overpowers physical reality. Once this feedback loop starts, it's self reinforcing. Attention creates wealth. Wealth enables power. Power shapes perceived reality and reality drives more attention. So this is the world that we live in. You probably hate it. I hate it. It's not going away. So I'm, you know, I'm not, you know, I don't know. I don't know. I'm trying here, deal with it. I guess that's what I'm trying to do.
- [19:53]
Ben Carlson
My, the biggest thing for me that I think is the detraction in society is the fact that there's this idea, I think for a lot of people, especially young people, that everything that happens online is just not real life. And you have, you get this like nihilism about the Internet. Like, well, nothing people say and do matters and the fact that that's bleeding into real life and you get this financial nihilism and well, nothing matters because it's okay. It started digitally, then it gets into real life. That is the part that scares me that if you have this nihilism view of the world, that nothing matters. Lol. It's okay. Everything, everything is a meme. Everything is joke. That, that when Internet bleeds into real life, that's I think, where problems begin.
- [20:29]
Michael Batnik
Can you imagine being 19? When I was 19, I was a complete and total blob of a person. I was not, I was not a grown up. That was the opposite. I can't imagine myself at that age seeing somebody that I know, another jackass, make life changing money. There's no way in the world that I wouldn't stop everything I was doing and focus my attention on creating overnight wealth. And you could only imagine the path that leads you down even if you happen to hit it right. It's just so toxic and unhealthy for these young people, usually young men. It's awful.
- [21:11]
Ben Carlson
That's why I color myself lucky for not having lived through the Internet or social media at a young age. So I do feel for young people that have to live through this. There are so many more opportunities you can get because of this.
- [21:22]
Michael Batnik
But imagine seeing your friend, imagine seeing somebody you knew make a million dollars. Wouldn't you just stop everything that you were pursuing?
- [21:31]
Ben Carlson
Right?
- [21:32]
Michael Batnik
Everything. Why I'm not going to class. I could be on the computer, I could be making millions of dollars trading meme coins.
- [21:37]
Ben Carlson
Right. Doing nothing. Yes, motivation goes out the window. I agree, it's really bad, but it's. And it's not going to get better, right? What, what makes it get.
- [21:49]
Michael Batnik
I guess just to, just to try and make myself not go to a dark place. Every generation has something like this. I don't know. I don't know, man. I'm trying. It's. It's not good. Oh, it's true.
- [21:57]
Ben Carlson
It's true every gen. The thing is, young people these days are going to have to experience some sort of comeuppance. We, the millennials, are less risk, are more risk averse because we live through the great financial crisis. The younger Gen Z cohort hasn't had anything. Yeah, they had the pandemic, but guess what? That was the opposite of a comeuppance in terms of finances.
- [22:19]
Michael Batnik
But I don't even know that Any sort of like a Trump coin wipeout or whatever would stop them, right?
- [22:23]
Ben Carlson
No, I mean, I mean, I'm talking financial crisis. Like every, every generation goes through a financial crisis that changes their view of risk and, or their perception of risk. And Gen Z hasn't had to live through one of those. It could be 20 years until we have one, but eventually that's the kind of thing that, that alters your perception of risk.
- [22:42]
Michael Batnik
I hope we're making a bigger deal of this than it actually is, but I do think it's a big deal.
- [22:47]
Ben Carlson
That's true. I. Yes, I agree.
- [22:51]
Michael Batnik
Okay. All right.
- [22:52]
Ben Carlson
I had Matt make me some charts because one of my favorite economic statistics of the last few years is just the fact that we've been in a recession for two months of the past 15 plus years. I think it's been 15 and a half years since the 2009 one ended. And so I had chart kid Matt do this for me. The National Bureau of Economic Research has this data going back to like the 1800s, but I took it back to the 1900s and I looked at the percentage of time spent in a recession. Maybe this is good point to my last follow up on Gen Z in the early 20th century. Something like 40% of the time we were just in a recession. So like the economy was expanding 60% of the time, 40% of the time we were in a recession. That has fallen in the 2010s was the first decade where we didn't have a recession. But this has obviously fallen a lot over the years as the economy has matured. I think we could say, I don't want to say like the US was an emerging market back in the earliest 20th century, but it was obviously not as mature and dynamic as it is today. And then you look at the time spent in bear markets by decades and it's kind of similar where it was much higher in the past. I don't know what happened in the 1910s where 50% of the time was in the, in a bear market, but as far as I can tell, 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.
- [24:09]
Michael Batnik
We had 19.9.
- [24:10]
Ben Carlson
Yes, it was 19.8 I think in 2018. And I think we called it a bear market at the time.
- [24:15]
Michael Batnik
So okay, point taken, point taken. That definitely was a bad market, by the way. I will die on that hill. That wasn't felt like a bear market at the time.
- [24:22]
Ben Carlson
We called It a bear market. It wasn't even if. Yeah. So we. We rounded up. But my point is that, yeah, this, the pandemic obviously was this crazy period of time that was nuts. But in terms of history, we've had it pretty darn easy these past. This past decade and a half in terms of economic and market outcomes.
- [24:42]
Michael Batnik
Counterpoint, the noise has made it 50,000 times worse.
- [24:49]
Ben Carlson
Fair.
- [24:49]
Michael Batnik
I don't think people in the 1980s really thought about the stock market much at all relative to how much we.
- [24:54]
Ben Carlson
Think about it today or the economy. People.
- [24:56]
Michael Batnik
The amount of it was an afterthought.
- [24:58]
Ben Carlson
Yes. The amount that we talk about the economy is never been higher. I totally agree.
- [25:03]
Michael Batnik
So, yeah. So I think the declines and the recessions have more than been offset by the noise.
- [25:11]
Ben Carlson
That's true. Yes. And if we had a recession 40% of the time for a decade, it was 20 some percent in the 2000s because we had two recessions in that first decade of the century. But I don't think society could go on. We would all just lay in the fetal position and not do anything with our lives.
- [25:27]
Michael Batnik
Can't go on. Must go on. Do you remember that episode of Curb?
- [25:31]
Ben Carlson
Not really.
- [25:32]
Michael Batnik
Okay.
- [25:33]
Ben Carlson
All right. What's going on here? You're the money market guy. This is from bar chart. Bank of America via bar chart. Money market funds just saw their weekly inflow of $143 billion, the largest since April 2020. What is going on here?
- [25:47]
Michael Batnik
You don't remember the beloved ant episode?
- [25:49]
Ben Carlson
I don't think so.
- [25:51]
Michael Batnik
Larry put in the newspaper. They misspelled beloved ant to beloved. And I can't say what the word is.
- [25:56]
Ben Carlson
Oh, okay. Yes, I do. Good one. So what's going on here? Why is there so much money? We're having all this speculation, all this craziness. Stock market's going nuts.
- [26:04]
Michael Batnik
I don't know, man. This is a. This is a head scratcher.
- [26:07]
Ben Carlson
I don't have a good answer. Because rates are falling. Is it just because yields are rising on bonds? So people are going, no way. I'm. I'm sitting out of bonds for a while. Is that potentially it?
- [26:18]
Michael Batnik
I don't know. There are just some things that don't have answers. So last week saw the largest spike in bearish sentiment from the American association of Individual Investors. So did people get scared? But that's. It's. It's just so much money. I. It doesn't. It doesn't add up.
- [26:33]
Ben Carlson
No. Yeah. And this to me means more than people getting all bearish on a survey. This is actual dollars.
- [26:40]
Michael Batnik
Yeah, I don't have a good answer.
- [26:41]
Ben Carlson
Okay, so I have a bunch of weird relationships on email with people who have read the blog or followed our podcast over the years.
- [26:48]
Michael Batnik
Okay, define. What do you mean by weird?
- [26:50]
Ben Carlson
So I have. There's one guy on my blog who I will occasionally hand up. I have a typo.
- [26:58]
Michael Batnik
A pen pal?
- [26:59]
Ben Carlson
No. And there's this one guy who the only time he ever emails me is saying, hey, I think you used the wrong word here, or you misspelled this or you. And all he does is give me advice on my typos.
- [27:09]
Michael Batnik
Do you engage?
- [27:10]
Ben Carlson
And I would just say, thank you. And I think one time I wrote him back like, hey, man, I really appreciate you give me this. Because I can read it 10 times and not see the typo. But you read it once and you see it, and he's very kind about it. He's not a jerk. And he's probably emailed me a hundred times over the years. Anyway, there's another one where this guy tried to, like, he. He's a foreign investor from France. And he emailed me saying that, like, I bet that if I just invest in the MSCA MSCI All World Index, I'll beat whatever portfolio you could put together or something. And I don't know, I'm like, oh, yeah, whatever, sure. And so every year he sends me an update on this bet that I never really made, but it's kind of.
- [27:42]
Michael Batnik
Funny holding your feet to the fire. Gotcha, asshole.
- [27:46]
Ben Carlson
So every year I get this email in January and he said, this year in the MSCI All World, I was up 29%. And I said, no, no, no, no, no. I said, that's. No, you're not.
- [27:54]
Michael Batnik
Oh, he's using his. His currency.
- [27:56]
Ben Carlson
Yeah. So I said, the MSCI world was up 17% or something last year. And he said, I'm in France. So I never. I never even. I don't know why this didn't come to me. The strong dollar is so good for foreign investors. This is why all the foreign money is pouring in here. A strong dollar. So he was up almost. He was up more than the S and P because the dollar was so strong for a foreign investor, because the strength of the dollar is bad for US Investors investing internationally. Right. That's. That's been a headwind. And we've said that that's actually a potential catalyst for international outperforming, is the dollar finally rolls over, but he's saying, no, no, no, the strong dollar has been great for us. It supercharged my returns because of the currency. I don't really think about that. Foreign investors have got to be loving this.
- [28:39]
Michael Batnik
Yeah. There's always another side to the coin.
- [28:41]
Ben Carlson
There we go. All right. Another one I had Chart Kid make for me. So don't quit your day job. Is this is this website that pulls together all the net worth and income data. And I've used it a lot over the years. It's like different percentiles of net worth by age and by demographic and generation, all these things. And he has one that looks at the median top 10% and top 5% of income going back to like the 1960s. And I plotted this out and this.
- [29:13]
Michael Batnik
This does not look like it's inflation adjusted.
- [29:15]
Ben Carlson
This is not inflation adjusted. This is. But he. If you look at my blog post, I did inflation adjusted in there too. Or he does at least. But this is crazy to me. We went from $100,000 being the top 10% in 2014 to 150k in 2024. Top 5% went from 132,000 to 200,000. And it's not like this is like a shrinking pool of people. It's still the top 10% and top 5%. That just shows the. How these goal posts are constantly moving and that yes, these prices went much higher, but in a lot of cases for people, the incomes went even higher than that. Right. Top 10% is up 50% income wise.
- [29:50]
Michael Batnik
Well, after the meme coins, it's gonna.
- [29:52]
Ben Carlson
Be even higher, I guess so, obviously. Yeah. And if you do look at the, the inflation adjusted dollars of these. It's not just inflation. The, the money has, has gone further over time. Like the inflation adjusted 1994 level for the top 10% is like right around 100 grand. And so it's actually 150 now.
- [30:17]
Michael Batnik
Think about the composition of individual incomes and the people in that top cohort today versus 30 years ago.
- [30:26]
Ben Carlson
That's the thing. It changes. Right. It's not the same exact people.
- [30:29]
Michael Batnik
The ability for you to make more money today is dramatically higher than it was a couple of decades ago.
- [30:34]
Ben Carlson
Right. People don't stay in that meat. Some people do, obviously, but usually don't stay in the same income cohort your whole career.
- [30:40]
Michael Batnik
Because there really used to be doctors, lawyers.
- [30:45]
Ben Carlson
Oh yeah. There's many other ways to become rich these days.
- [30:49]
Michael Batnik
Bankers, like, there's just so many other avenues these days.
- [30:52]
Ben Carlson
I think I've mentioned this before. I remember. I feel like the 90s being a doctor was like, that was the very prestigious. Right. I mean, obviously if you go to a dinner party or some sort of cocktail function and there's a doctor there, people still will like Pepper the doctor there.
- [31:08]
Michael Batnik
Still? Is there still?
- [31:09]
Ben Carlson
Yeah. Oh, you're a doctor. What kind? Oh really? And then like yeah, there's some prestige but it's not like it was in the past. Right. Remember NY's Wide Shut? Tom Cruise was a doctor. Which is kind of hilarious to think of Tom Cruise as a doctor. But that was like the prestigious big job back then.
- [31:24]
Michael Batnik
Where do you stand in that movie as a TC guy?
- [31:28]
Ben Carlson
It's not watchable. It's like watch it one time and that's it.
- [31:33]
Michael Batnik
I really enjoyed it. I only saw it one time but I, I quite liked it.
- [31:37]
Ben Carlson
I've seen it a couple times and I, I, I tried but not one of my favorite TC movies. Just a little, little too out there for me. All right. A lot of people were sharing this last week. The MBA is in the job market. From the Wall Street Journal. The share of job seeking MBA graduates about without a job three months after graduation. So for Harvard and MIT and Stanford, Duke, Michigan, Chicago, this has all risen from. It was 15% or so in the 20 in 2020 it got as low as like 5 or 10% for some of these. Now it's going back up and it's like eh, 20% ish is the average. And this is three months after graduation. A lot of people were saying oh this is a bad sign for the job market. The people who are getting MBAs are idiots obviously. Like what are they thinking?
- [32:16]
Michael Batnik
This has nothing to do with the job market. I think it's more of a reflection on people not wanting to hire these people. This is more, this is more of a reflection of the current environment I think and I don't mean the job market.
- [32:26]
Ben Carlson
And I, that's my thinking was, I don't think this, I don't take this as like a terribly bad sign. And I don't know if 80% of your classmates get a job within three months of graduation. That sounds pretty high to me.
- [32:39]
Michael Batnik
I don't, I would also like to see this chart zoomed out a little bit or a lot of it.
- [32:42]
Ben Carlson
And they also say that at Columbia, MBAs who land jobs tend to get sized will play with median base salaries starting of 175,000. So to your point maybe, yeah, maybe companies are just cutting back on hurrying those types of roles. But it's still, I don't know if 80% of the people in these MBA programs are getting a job within three months. That still seems pretty decent to me. I don't think that's a terrible sign of things.
- [33:05]
Michael Batnik
Yeah, neither do I.
- [33:06]
Ben Carlson
Okay.
- [33:08]
Michael Batnik
All right. So Matthew Klein wrote a piece for the Overshoot where he spoke about a potential inflation boogeyman that nobody's talking about. And it's China. Like, what if China. What if there's a recovery in China? So he shows a chart. The pandemic has forced down Chinese consumer spending relative to prior trends, especially for services such as education, recreation, and healthcare. So this chart is showing Chinese per capita consumption expenditures, especially their spending. And one of the lines is housing, clothing, food, alcohol, and tobacco. So things that are more or less sticky and that's been trending a little bit lower. But then he compares it with all the other items, and it. It looks like it crashed.
- [33:53]
Ben Carlson
So discretionary items have just down 20%.
- [33:55]
Michael Batnik
Yeah. So the Chinese consumer is in bad shape. So he says it is entirely possible that the Chinese economy will remain in its current funk and continue to be a net source of supply for the rest of the world, suppressing both demand for physical goods and inflation in the U.S. but if Chinese policymakers arrest the downturn, much less find a way to get consumer spending and bad business investment back on track, the Fed and other central banks might find themselves having to deal with a new inflationary impulse from abroad. Definitely not in anybody's parlay.
- [34:26]
Ben Carlson
That is interesting. It also is interesting that the US Is literally like the only country that took off and spent way more money. Probably the pandemic. People cut back in Europe, they cut back in China.
- [34:37]
Michael Batnik
We don't stop. We don't stop. Ben, I was at the Dairy Barn yesterday. Do you have. Do you have Dairy Barns in your town?
- [34:42]
Ben Carlson
No. Explain me to the right.
- [34:43]
Michael Batnik
So you probably do, but maybe, maybe Dairy Barn is just the name of the one in my town. It's a little. It's a little food stand on the corner. At least it's on the corner of one of my roads. And it's like a drive through. And it's like a. It's like a mini 711 drive through.
- [34:57]
Ben Carlson
Okay. No, we don't have.
- [34:59]
Michael Batnik
You have those? No. Okay.
- [35:00]
Ben Carlson
What do you. What do you get there? Just groceries.
- [35:03]
Michael Batnik
Yeah. Like, not like. Like they have catch. They have condiments. Eggs, milk, juice, cookies.
- [35:09]
Ben Carlson
Like, got you stuff that you forgot. Okay.
- [35:12]
Michael Batnik
Yeah, that's exactly right. Stuff that you forgot. So I've got to get eggs. So I went to the dairy barn, got eggs and a stick of butter. And he said, $15. And I said, how much? And he said 15. I'm like, whoa.
- [35:27]
Ben Carlson
He's like, how many eggs are we talking here?
- [35:29]
Michael Batnik
A dozen? He said, he said, eggs cost me $7. I sell them for eight. I'm like, they cost you seven. He goes, I've never, this never happened before. Never pay. You know, it's usually never above 5, but it's. He said, and I'm only taking 8 because how much can I charge you guys for. For a dozen eggs? Wild, right?
- [35:52]
Ben Carlson
He definitely fudged those numbers a little bit, let's be honest.
- [35:54]
Michael Batnik
No, no, no, no, no, no, no, no. You've maybe been sleeping on the eggs numbers. Eggs are, Scott, are rocketing again.
- [36:00]
Ben Carlson
I still think on a per meal basis, eggs are a good deal. If you count two eggs as a meal and you're paying $7 for them, $8, that's a pretty good.
- [36:08]
Michael Batnik
No, it is, but eggs should not cost $8 and two eggs is not a meal. Come on.
- [36:12]
Ben Carlson
It's funny though, how eggs became the thing because like the, the obviously the, the price of eggs are very volatile. We've seen this happen. They spike and then they go back down.
- [36:21]
Michael Batnik
I think the current one is the bird flu is having a big impact, so it'll pass.
- [36:25]
Ben Carlson
But it's just funny how eggs have become the one thing people have latched onto. Like why wasn't it milk or something else like that?
- [36:30]
Michael Batnik
Well, because everyone, not everyone. Eggs are consumed by a lot of people.
- [36:34]
Ben Carlson
But I think the reason people pay so much attention to it is because the price is volatile.
- [36:39]
Michael Batnik
Are you a milk drinker?
- [36:40]
Ben Carlson
No, I'm not seven.
- [36:42]
Michael Batnik
Yeah. Okay. There's people that drink milk.
- [36:44]
Ben Carlson
Yeah, yeah. They're seven year olds. It's my son, he drinks milk.
- [36:47]
Michael Batnik
Yeah.
- [36:49]
Ben Carlson
Okay. Good news of the week. I filled this one in this week. This is from the Wall Street Journal. I've often wondered, how are self driving cars going to work on the snow I don't like. It's really snowy and cold here. You can't see the lines on the road. How, how are those sensors going to work? Goodyear says it is rolling out new tech that uses information about the type and make of the tires, plus weather information pulled off of vehicle cameras to predict exactly how long it would take to break in certain conditions. They also said using the front and rear cameras and third party weather information to determine road conditions, they can take into account the model and age of the tire to create an accurate prediction for how soon a car should start braking at any given moment. They also said they could create even more accurate prediction if the tires in question were embedded with Goodyear sensors to gauge road friction. How much are tires gonna cost in the future? I just had to get.
- [37:35]
Michael Batnik
They're already expensive.
- [37:36]
Ben Carlson
I just had to get one. I drove over a nail and had to get a tire repaired. And it was like, I don't know, $350 for one tire and they didn't even put it on for me. Bell tire. Thanks a lot.
- [37:45]
Michael Batnik
Good year? The worst. What's that from?
- [37:48]
Ben Carlson
I don't know.
- [37:49]
Michael Batnik
Naked Gun.
- [37:50]
Ben Carlson
Okay. Somehow our movie references are never on the same.
- [37:55]
Michael Batnik
Yeah, but we're two ships passing in the sea.
- [37:58]
Ben Carlson
I still think that the sensors and stuff are not like my wife's car. Her cruise control will only work if the weather is perfect. If the weather's not perfect, all her sensors lock up and she can't put cruise control on, which is very annoying. But sometimes the weather looks worse than it is and the roads are fine. I just think that we're going to get a situation at some point. You see this in the south now with whenever it snows. We have people who live in Charlotte and Nashville and stuff that work for us. And they talk about how if it snows like an inch, the whole city shuts down. People are going to be reliant on these Waymo self driving cars in the future and there's going to be bad weather and the whole fleet is going to shut down.
- [38:37]
Michael Batnik
Okay. So people that live in areas of snow sort of scoff like, oh, you get an interest in when the city shuts down. However, yesterday, I don't scoff.
- [38:48]
Ben Carlson
I get it. Because they don't have the infrastructure.
- [38:50]
Michael Batnik
Exactly. So yesterday, for whatever reason, my town didn't put salt on my main roads and it was a sheet of ice. And like the side streets getting to the main road were a sheet of ice. And so I was slipping all over the place. Like I saw one car almost like do a 360 and it wasn't a big snowstorm, but the roads weren't salted, which is bizarre. But in these southern cities, they probably don't have trucks with.
- [39:16]
Ben Carlson
They don't have the snow plows, they don't have the dirt or the salt.
- [39:18]
Michael Batnik
They don't have those giant piles of salt to salt the road. So yeah, the city shut down when you can't drive.
- [39:23]
Ben Carlson
Yes. As a northern guy who lives in the north, I'm not going to make fun of the southern people for being wimps when it snows, but it's not the big whims. I'm kidding. I know. No, trust me. The first time it snows here every year, people tense up and they drive so slow and they. Yeah. And then they have to get used to it. All right. I did not realize this. Do you have Sonos in your house at all? Sonos speakers. So I have a Sonos.
- [39:45]
Michael Batnik
You don't really hear about Sonos so much these days. It was very hot.
- [39:48]
Ben Carlson
So listen to this. I didn't realize this is from the Wall Street Journal. Sonos, the company that makes premium audio equipment, rolled out a redesigned app last year that was supposed to improve the user experience and accelerate the company's pace of innovation until. One of the most disastrous software updates in recent history of consumer technology. Now I have Sonos. I have. I just have one of the little speakers. I got it, I don't know, five years ago. And then I have one of the little portable ones. So I don't have a huge Sonos this in my house. Right. I put it on in the background when I'm reading or something. But I did notice six months ago, all of a sudden, my app was very glitchy. It was slow. It would, like, reset on its own. It would not connect. And I felt like, ah, it must be my Internet or something. Or maybe the piece. The Sonos one that I have is five years old, so it doesn't work as well anymore. And I didn't think anything of it, but apparently the app was so bad that they said, like, the. For whatever reason, the software wasn't keeping up with the technology and they had to update the app. And they said they. People couldn't use basic features, they couldn't access their audio system, and they just. The CEO went out. $500 million market cap is gone. Look at the graph here from when the new app was released and how the. How the company just crashed.
- [40:49]
Michael Batnik
Yeah, not. Not nice.
- [40:51]
Ben Carlson
Look at the product. Look at it over. I think it's down 70% from the highs, and it looked like a Meme stock in some ways, but I didn't realize this. So I feel like an idiot for never checking a Reddit board or something to understand why my Sonos app wasn't working. But how do you. How is that even possible? This is literally your whole company, right? And you fumble this this badly. I can't even imagine.
- [41:13]
Michael Batnik
That's odd.
- [41:14]
Ben Carlson
Okay. It was a good, good product, too. But, yeah, it feels like a chore when I'm using it now, because it doesn't. It takes forever to work. It's a pain in the butt.
- [41:23]
Michael Batnik
And it still Is so I'm looking at. I'm looking at Apple stock chart. It's weird. It went straight up and now straight down.
- [41:32]
Ben Carlson
I think you just need. I think you just need to short it and get it over with.
- [41:35]
Michael Batnik
No, no, no. Well, no, I'm not. Come on. We're never one of the great American companies, but I feel like you.
- [41:40]
Ben Carlson
But you've been on Apple's corner for a long time besmirching the company. I think it's time for you.
- [41:45]
Michael Batnik
No, no, no, no, no. Well, yeah, a little bit, but more besmirching the stock price. But. Oh, yes, speaking of. And besmirching in the sense that.
- [41:53]
Ben Carlson
What are you looking at with the chart?
- [41:55]
Michael Batnik
I don't understand why it was up 30% last year. Nothing happened.
- [41:57]
Ben Carlson
So it's down. It's in a 15% drawdown right now.
- [42:00]
Michael Batnik
But it's like straight down, which is kind of interesting. But the reason why I even bring up Apple is because speaking of, like software updates, people on the Internet have been all over this. But I found it yesterday for the first time. The photo app update. What in the world? It used to be so easy to find pictures. It was month, day, day, month, year or whatever.
- [42:18]
Ben Carlson
Yeah.
- [42:18]
Michael Batnik
And I looked at it yesterday. I wanted to show my friends, like, what, where my what?
- [42:23]
Ben Carlson
This is a blanket statement, but it does seem like that that is the. One of the things that is lacking with a lot of tech companies is just where's the common sense?
- [42:31]
Michael Batnik
Where's the ingenuity, Ben, by the way?
- [42:33]
Ben Carlson
The ingenuity. They're smart, they innovate. The common sense is often lacking.
- [42:37]
Michael Batnik
Somebody sent us an email recommending, or maybe just shining light on the fact that your knockoff AirPods, Ben, they're garbage. They're garbage. Oh, look at, look at this chart under random. It's called Engine. There's a Reddit engineering porn.
- [42:51]
Ben Carlson
Okay?
- [42:51]
Michael Batnik
And it shows inside fake AirPods and it shows Apple AirPods and two counterfeits scrutinized with X ray vision. I have no idea what we're looking at, but look at it, Ben. Look at it.
- [43:05]
Ben Carlson
But the thing is that they last longer than my AirPods. They admit the quality is probably worse, but they still last longer.
- [43:12]
Michael Batnik
Yeah.
- [43:13]
Ben Carlson
Okay. Getting back to our income thing. So Lance Lambert interviewed a mortgage broker from Washington D.C. in Fast Company. And this was interesting because they were talking about how do people like how they change their threshold for monthly payments? And this guy's saying, my average first time home buyer now says $3,500 comfortable compared to 2,000 to 2,500 previously. And he's saying, like before housing prices rose and rates went up. So this is four or five years ago probably.
- [43:40]
Michael Batnik
But wait, hold on, hold on. Do you think that's a function of. I think it's more of a function of how much houses cost versus how much people are making. Like you just move the goalposts. All right, that's what they cost.
- [43:47]
Ben Carlson
Now listen. So those looking for a family house now say 6,500 or 7,500. Previously was 4,500. I'm also seeing more people comfortable with 8,000 to $10,000 mortgage payments than ever. Honestly, the first in the first 20 years of my career, I don't believe I ever had a mortgage payment offered over $10,000. Now I have a few of those each quarter.
- [44:05]
Michael Batnik
That's wild. That's so much money.
- [44:07]
Ben Carlson
And so you see these numbers and you go, how is this possible? And obviously it is because prices are. But you go, well, who can afford this? And he says, keep in mind, in my region, incomes have exploded higher. I can't seem to meet anyone who makes less than 130k per year. Those who used to be considered high income, 250 to 300 now make 450. It's just a different world now. Like that's the only explanation. Right? People are making more money to afford these.
- [44:30]
Michael Batnik
Yeah.
- [44:31]
Ben Carlson
Otherwise, how does the economy keep chugging along?
- [44:34]
Michael Batnik
Do you think there's anybody who thinks like when we go back to normal is coming?
- [44:39]
Ben Carlson
There's a lot of people who think that. And that's never happening.
- [44:43]
Michael Batnik
No, no, there's no normal. This is it. There's a new normal. Shout out to Mohammad.
- [44:47]
Ben Carlson
Interesting one from the Wall Street Journal on investors versus homeowners. So they say Wall street thinks US home prices are overpriced. Housing could be any overvalued anywhere from 10 to 35% based on how investors are acting. So they say shares of single family landlords invitation homes are trading at 35% and 20% discounts to their net asset values, according to analytics firm Green Street.
- [45:10]
Michael Batnik
So you kind of these back in the day. Oh, man. Good thing I got out. These stocks look like trash. American homes front is the other one.
- [45:17]
Ben Carlson
Yeah. So it's saying like that the gap of their nav, like what they own versus what it's worth in the market is widening. It says it's widened by 10 percentage points in the last year. So there's a big discount. They're saying if you use that to value home prices Home prices are way overvalued.
- [45:29]
Michael Batnik
So they're saying, but that, but that's a stretch. So these are the rent to own companies.
- [45:32]
Ben Carlson
Yes.
- [45:33]
Michael Batnik
Right. Instead of, instead of buying a house, you just rent it from whoever the institutional landlord is.
- [45:38]
Ben Carlson
And they're saying like the cap rate is now 4%, which is way too low when you're borrowing 5 or 6 or 7% to. So it doesn't make sense, but so better.
- [45:48]
Michael Batnik
You a buyer? You buyer?
- [45:49]
Ben Carlson
No, no. But this is the reason why there's a difference between being an investor in homes and being an owner in homes. Right. Like, you don't have to worry about cap rates when you buy a house for yourself.
- [45:59]
Michael Batnik
Right, Right.
- [46:00]
Ben Carlson
Where the investors really do have to. So I don't think this says anything about the valuation of home prices in the United States. It just says it's not a very good time to be an investor in residential homes.
- [46:10]
Michael Batnik
I love it. You're spot on.
- [46:12]
Ben Carlson
Buying versus investing.
- [46:14]
Michael Batnik
Yeah, spot on. Walter Bloomberg, real person We'll Never Know tweeted in December. Redfin said if he's not a real.
- [46:25]
Ben Carlson
Person, then he is the biggest person at risk of AI replacing his job. Right.
- [46:31]
Michael Batnik
Home prices posted their biggest gain in nearly a year, jumping 6.3% to a median of $428,000.
- [46:40]
Ben Carlson
Wouldn't it be funny if lower mortgage rates actually caused housing prices to fall too? For some reason, like, it seems like the higher rates are only making housing prices stubbornly higher.
- [46:49]
Michael Batnik
I don't think that's impossible. It's probably too cute for that.
- [46:51]
Ben Carlson
It is. I don't, I don't know. I just don't know what stops this train for housing prices. It seems like high rates are good for housing prices because no one wants to move. Low rates should be good for housing prices because it should spur demand. I don't see what the.
- [47:03]
Michael Batnik
There's no negative catalyst.
- [47:05]
Ben Carlson
Doesn't feel like it. All right, from Eric Finnegan. This kind of ties into our original talk about Gen Z. Gen Z is the most money centric generation we've ever seen. So they talk about how they ask 12th graders, how important is money and wealth to you? And 36% say extremely important, where for probably 25 years it was 25, 26% and lower. So you had this whole generation of, I guess, younger people coming up that money was kind of important. Now it's all of a sudden taken off and money is extremely important to people. And this makes, this actually makes sense to me with the Internet and social media and that sort of Thing.
- [47:44]
Michael Batnik
Yeah.
- [47:45]
Ben Carlson
Making it mean more to people. I kind of get it, why this is happening. To your point. No looking back.
- [47:55]
Michael Batnik
No looking back. All right, Ben, let's, let's, let's. Speaking of. Actually, let's look back. Let's look back.
- [48:02]
Ben Carlson
The Wayback Machine.
- [48:03]
Michael Batnik
There we go. So, Ben, remind people, because I think we only do this one. We should do this more often.
- [48:08]
Ben Carlson
Yeah. We had a listener of the show who created a randomized chart from any of our past podcasts, and I clicked it this morning and this one, I believe from the New York Times popped up. And it was the cumulative monthly job change was we gained 22 million jobs from October 2010 to February 2020, right before the pandemic, and then we lost 22 million jobs in the blink of an eye between March and April.
- [48:36]
Michael Batnik
What a chart. Unbelievable.
- [48:39]
Ben Carlson
I think if you ran the historical simulation of that pandemic happening at any point in time, historically, I think we are in the top 99th percentile of outcomes of how good it actually went versus how badly it could have gone in so many different ways.
- [48:58]
Michael Batnik
I would say for the economy. Yes. I would say the lockdowns, in hindsight, were not so great.
- [49:04]
Ben Carlson
No. But I'm just saying that the whole. How everything worked out, it.
- [49:08]
Michael Batnik
For the economy. Yeah, For.
- [49:10]
Ben Carlson
For everything. For. It could have gone so much worse. It could have been. It could have turned out to be like the Spanish flu and it targeted 30 year olds or something that died. But, you know, I'm just saying that I think it went as well as it possibly could have, considering the circumstances. All right. A lot of dollars to Donuts feedback.
- [49:31]
Michael Batnik
A lot of dollars to Donuts.
- [49:32]
Ben Carlson
Craig on Bluesky says donuts used to be around 10 or 15 cents in the 40s, 50s, and 60s. So it's like saying 10 to 1 makes perfect sense. That's all we needed to hear.
- [49:41]
Michael Batnik
You know what? I might incorporate that into my language from now on.
- [49:44]
Ben Carlson
Dollars to. Yes, that's whenever you bet. Right. I'm doing a Michael's Dollars to Donuts parlay.
- [49:51]
Michael Batnik
I do feel like. I do feel like. I'm not gonna say how I feel, but I do feel like this is Bill's year.
- [49:56]
Ben Carlson
I hope so. That that's a Torch fan base. I'm rooting for them.
- [50:00]
Michael Batnik
We're all done with Kansas City. Everyone outside of Kansas City, no offense, we're all done with it. It's enough.
- [50:05]
Ben Carlson
Yes, I agree. A lot of more people liked my game show idea than you did. You poo pooed it right away. A lot of people. A lot of people have comments.
- [50:12]
Michael Batnik
Listen, listen. I am a market guy, okay? If the market tells you you're wrong, hand up. I was wrong, I guess, because a lot of people were, like, in support.
- [50:19]
Ben Carlson
Of your idea, and someone said the game show you mentioned about people being chased through a city does exist in the uk it's called Hunted. Drop someone off with cash and told to evade capture for 30 days. They do celebrity versions, which are funny as they go in luxury yachts. Okay, so I guess it does exist. All right, couple story things. So my kids all are in basketball now. My twins do basketball at the ymca. So they're. It's like a first and second grade team. My daughter is on one team, my son's on another. So we're there a lot. And so this past Saturday, we went there, and I don't think that sports venues and sports infrastructure was prepared for millennial parents and the amount of millennial kids that would be born, because there are not enough courts, there's not enough fields, there's not enough parking, there's not enough stands. We go to the ymca and, you know, there's grandparents there, and there's cousins or there's brothers and sisters running around, and there's not enough place to sit, and there's just people surrounding the courts, and it's just mayhem. And my wife and I are just like, this is awful.
- [51:20]
Michael Batnik
Great observation. I. I thought the same thing this weekend. Literally. Because the infrastructure's from the 60s.
- [51:25]
Ben Carlson
Yes. They didn't build enough parking spot. Like, in the past. Not as many people came to watch these young kids play sports. Like, we'd be lucky in the past to get one of our parents to show maybe right now. Everyone goes, the grandparents go. There's not enough parking spots. There's not enough courts. So we end up paying more money for, like, we sometimes for my daughter's basketball tournaments, we pay, like, $20 a person to go, because.
- [51:47]
Michael Batnik
How does that work?
- [51:48]
Ben Carlson
Good question.
- [51:49]
Michael Batnik
I don't know literally, who. What is. What do you mean? You pay when you get there or something. How does it work?
- [51:54]
Ben Carlson
So. So they have a tournament at this field house or something, and there's 20 games going on, and each person to get in cost $20. It's unbelievable.
- [52:04]
Michael Batnik
Just, like, just to watch.
- [52:05]
Ben Carlson
Yes. Isn't that insane? She's 10 years old, and we're paying, like, $90 a weekend to.
- [52:11]
Michael Batnik
Hey, don't complain. It's gonna be $30 next year probably.
- [52:16]
Ben Carlson
Okay. Recommendations?
- [52:19]
Michael Batnik
I got really light week for me. Go ahead.
- [52:21]
Ben Carlson
What do you Got. I got a lot a real pain. This is the Kieran Culkin, Jesse Eisenberg movie. Okay. I saw a little bit of this.
- [52:30]
Michael Batnik
Is Ewart and all over it.
- [52:31]
Ben Carlson
Okay. Totally a Ben movie. And at first when I watched it, I was gonna say, michael, don't watch this. I think you have to watch this movie.
- [52:37]
Michael Batnik
Say no more. I'll watch it tonight.
- [52:38]
Ben Carlson
Okay. This is one of the better movies.
- [52:40]
Michael Batnik
Why do you say that?
- [52:41]
Ben Carlson
All right. Well, it's about two cousins. So first of all, Jesse Eisenberg wrote and directed this, and it's one of the most. It's one of the realest movies I've felt in a while. Like the Conversations. And it's not over the top at all, but it's about two cousins. Their grandma dies. She's from Poland. She was a Jew living in Poland who then immigrated to the United States from Poland. And they go. After she died, she left them money in her will saying, I want you to visit where I was from.
- [53:06]
Michael Batnik
Love it.
- [53:07]
Ben Carlson
And it's 90 minutes, which is a huge premium for me. Kieran Culkin plays essentially a more sensitive version of Roman Roy, but he was fantastic in this movie. And it was just. I don't know, the whole thing. It was just a very well done movie. Like, really good piano music throughout. It was just like a very beautiful movie. I really, really enjoyed it.
- [53:30]
Michael Batnik
You ever see the Squid and the Whale? Yes, one of my favorites.
- [53:33]
Ben Carlson
Very good. Jesse Eisenberg is great. And he's very. In this movie. He's good, too. The funny part to me was at first, he's driving to the airport and he's talking about his son, how he loves skyscrapers, and he knows all the floors of the skyscrapers. And this just must be a thing with boys, because that's all my son is doing now, all day, every day. All he ever wants to talk about since we brought him to the Hancock and I went to the Empire State Building, all he wants to talk about is skyscrapers. The Burj Khalifa is his favorite thing in the world. That's all. He wants to go to Dubai for spring break so he can go see the Burj Khalifa.
- [54:05]
Michael Batnik
That's hilarious.
- [54:07]
Ben Carlson
Yes. All right.
- [54:08]
Michael Batnik
Did you watch Severance yet?
- [54:10]
Ben Carlson
Yes.
- [54:11]
Michael Batnik
I'm in a holding pattern. I'm going to. I'm going to wait until a few episodes get. Get backlogged.
- [54:15]
Ben Carlson
I would rather. I wish it was a bingeable show. I told my wife, God, I wish I could just binge this show. We watched the finale again. It's I forgot how good it was because it's been a while since it's been out. By the way, a real pain is on Hulu.
- [54:25]
Michael Batnik
Oh, fantastic.
- [54:26]
Ben Carlson
Yeah, so you don't have to rent it.
- [54:27]
Michael Batnik
Speaking of finales, the finale of Landman. They landed the planet. I'm excited for season two, Jack.
- [54:33]
Ben Carlson
Okay, good. We're halfway through. I will pick up. Conclave is on Peacock. You heard of this one?
- [54:39]
Michael Batnik
I have to finish it.
- [54:40]
Ben Carlson
Okay.
- [54:41]
Michael Batnik
I love Ralph Fiennes. One of the best.
- [54:43]
Ben Carlson
My wife and I commented on this. He is one of the most believable actors of his generation. Right. Like, you believe every role he plays. Like, you believe him as this cardinal, right? Yes. I guess it's one of those. It's a film. It's probably too long, but it's just extremely well done. Yeah. Good stuff. Finally, American Primeval on Netflix. Have you heard this one?
- [55:06]
Michael Batnik
Oh, I forgot. Yeah, I actually, I watched. I watched first episode last night. Super violent.
- [55:10]
Ben Carlson
Super violent. Very gritty. Pete Berg did it. He's a guy who did Friday Night Lights, and he has Taylor Kish in it. Who is Tim Riggins?
- [55:18]
Michael Batnik
Which character is that? Taylor Kish.
- [55:20]
Ben Carlson
Yeah, the guy with the long hair. He who should have been a bigger movie star for some reason and just wasn't. I think it's because.
- [55:28]
Michael Batnik
Oh, you know why? It was John Carter.
- [55:30]
Ben Carlson
Yeah.
- [55:30]
Michael Batnik
Ruined his.
- [55:31]
Ben Carlson
Another one. My son loves that movie. But, yeah, this has a field of revenant to it. But when you watch a show like this, because I guess it's kind of historical fiction, because it is about the Mormons coming and Brigham Young. But do you get the sense that, like, man, we know we've talked about this in the past, but how awful would it have been to live during that time?
- [55:49]
Michael Batnik
Oh, I just think about how bad everyone smelled.
- [55:51]
Ben Carlson
Yes. It's. Everything is so dirty and smelly and like, oh, this guy says something. I don't like, dead. I'm gonna kill him.
- [55:57]
Michael Batnik
Yeah, right.
- [55:58]
Ben Carlson
Just no, like, there's no, like, squaring up like, in a fight video on the Internet now. It's just like, no, I'm gonna shoot you in the head. That's it. I don't agree with you. You're dead. But the fact that people still. Because this is the Howard Lindsay point earlier about people were getting killed in the past, but they still went west anyway, that they. They still had this hope to go west, despite the conditions being so awful and taking God knows how many weeks to ride a horse and carriage through the rough train to get there.
- [56:26]
Michael Batnik
Yeah, there's no stopping progress. Even though at times like there's some. There's some dark stuff out there.
- [56:32]
Ben Carlson
Yes, this is.
- [56:33]
Michael Batnik
This is a wild one, Ben. Really, really, really, really and truly a wild what Weekend with the Trump coin stuff and the Melania coin. Oh, we didn't talk about Melania Coin.
- [56:43]
Ben Carlson
The thing is, you said this is the craziest thing you've ever seen, but I don't know, for some reason this stuff doesn't. It doesn't. Like, there's no shock value anymore. I guess I'm not surprised by this stuff at all.
- [56:52]
Michael Batnik
They launched Melania Coin on Sunday to nuke Trump coin.
- [56:56]
Ben Carlson
Boy, that's gotta be a weird bedtime conversation. Let's check the market caps to see which between husband and wife, which one of their meme coins is worth more these days. But don't you think that every influencer on the Internet is going to want their own meme coin now just for, like, cachet and.
- [57:11]
Michael Batnik
Yeah. All right then. Stay warm, I guess. I hear it's cold out there.
- [57:20]
Ben Carlson
It was negative 8. Wind chill. The thing is getting back to being wimps, like on American Primeval. Like, I. I hit the automatic starter on my car and I get in the car and my heated steering wheel is on and my seat is. Got a heater on it, too. And I don't drive a luxury vehicle. I drive a Ford Explorer. And we are so much more spoiled than people were in the past. So it's much easier to handle than it was. If you're an advisor, check out the unlock advisorunlock.com we'll have more of that coming in the weeks and months ahead. Anything else to plug?
- [57:51]
Michael Batnik
Nope. Naples, et cetera. All right. Animalspiritshcompoundnews.com thank you for listening. Stay sober, have fun. But not too much fun. We'll see you next time.
- [58:05]
Ben Carlson
It's going to get crazier.
- [58:06]
Michael Batnik
It's going to get crazier.
- [58:12]
Ben Carlson
Don't get.