Winners and Losers From the Stock Market Rally (EP.412)

Summary

Animal Spirits Podcast Summary

Episode: Winners and Losers From the Stock Market Rally (EP.412)
Release Date: May 14, 2025
Hosts: Michael Batnick and Ben Carlson

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1. Market Reactions to Tariffs

Timestamp: [04:12]

Michael and Ben delve into the recent tariff negotiations, highlighting the market's response to the U.S. tariffs on China. Michael remarks, “I don’t give him [Trump] credit for putting out bad policies in the first place. I do give him credit for backtracking” ([04:55]). They discuss how the initial aggressive stance on tariffs led to uncertainty but eventual concession, mitigating fears of a prolonged economic downturn.

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2. Retail vs. Wall Street Investors

Timestamp: [06:38]

The hosts examine the contrasting performances of retail investors versus Wall Street. Ben notes, “Retail was right again” ([07:08]), referencing a day when retail investors significantly bought stocks, leading to notable market gains. They discuss how retail investors have defied traditional expectations, challenging the dominance of institutional players.

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3. Market Sentiment and Predictions

Timestamp: [09:20]

Michael and Ben analyze market sentiment indicators, debating whether the recent rally has staved off a recession. Michael suggests, “We stopped it after a month, there probably… even if growth is slower for a few months” ([21:49]). They explore various data points and expert opinions, concluding that while volatility remains, the market's resilience has played a role in preventing immediate economic decline.

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4. Private Equity in Retirement Accounts

Timestamp: [41:05]

A critical discussion unfolds around Savers Basic Capital’s new product offering leverage in 401(k)s. Michael questions the sustainability, stating, “What happens if the private credit yields compress” ([25:59]). They express concerns about the high leverage ratios and potential risks if expected returns from private credit do not materialize, emphasizing the need for due diligence.

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5. AI in Education and Its Implications

Timestamp: [23:11]

The conversation shifts to the increasing use of AI in academic settings. Michael shares a New York magazine article about students using ChatGPT to complete essays, highlighting a user’s admission: “With ChatGPT, I can write an essay in two hours. That normally takes 12” ([27:19]). They debate the impact on learning, with Ben adding, “If you cheat at everything, you’re just going to cheat yourself” ([29:02]).

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6. Cryptocurrency Trends and Coinbase

Timestamp: [31:13]

Michael and Ben discuss Coinbase’s entry into the S&P 500 and its recent stock performance. Ben observes, “Coinbase, since it went public, is down 4.8% in total” ([32:46]), contrasting it with Bitcoin’s surge. They explore the decoupling of Coinbase from Bitcoin’s performance, pondering the reasons behind the cryptocurrency's recent gains despite institutional setbacks.

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7. Real Estate Market Trends

Timestamp: [33:03]

The hosts analyze regional real estate dynamics, focusing on the contrasting trends between the South and Northeast. Ben shares his personal experience listing a house in Long Beach, noting challenges such as “tiles sagging in the bathroom” and “foundation issues” ([37:26]). They discuss broader market indicators, including rising inventory in Florida and declining rates in New York, attributing these to shifted demand and economic factors.

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8. Pop Culture and Personal Anecdotes

Timestamp: [48:21]

In a lighter segment, Michael and Ben touch on various pop culture topics. Ben expresses his passion for the NBA, specifically the Knicks' playoff performance, stating, “I am a very emotional Knicks fan” ([56:27]). They also discuss TV shows like "The Last of Us" and "Cops," sharing personal views and recommendations, adding a personable touch to the financial discourse.

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Conclusion

Throughout the episode, Michael Batnick and Ben Carlson provide insightful analyses on recent market movements, investor behaviors, and emerging trends in both finance and broader societal contexts. Their balanced approach, combined with personal anecdotes and critical viewpoints, offers listeners a comprehensive understanding of the current economic landscape.

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Notable Quotes:

• “Retail was right again” — Ben Carlson ([07:08])
• “What happens if the private credit yields compress” — Michael Batnick ([25:59])
• “With ChatGPT, I can write an essay in two hours. That normally takes 12” — College Student ([27:19])
• “I am a very emotional Knicks fan” — Ben Carlson ([56:27])

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For more insights and updates, visit Animal Spirits Podcast.

Transcript

[Michael Batnick]

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[Ben Carlson]

Welcome to Animal Spirits with Michael and Ben. Ben, I live in the Northeast and I've got four seasons. The weather's not great for about depending on the year, seven months out of the year. Let's call it like October to March. Ish. Five months, seven months depending. You're in the same boat, maybe even worse than I am.

[Michael Batnick]

Oh yeah, we get four good months a year.

[Ben Carlson]

Ooh, pretty much. Okay.

[Michael Batnick]

No, I don't know. It's. No, Some people like the fall. It's really just there's three bad months. The worst months are January through March because I can handle December because of Christmas, but once we get to January, February and March, then I'm over it.

[Ben Carlson]

So I love the seasons. There's something about the cadence of oh, I'm we're here in the year. I think having shitty weather makes me appreciate the great weather that much more. Or, or is that a lie that we tell ourselves to make us feel better about living with horrific weather?

[Michael Batnick]

I don't think is it a lie. I appreciate the summer way, way more because we don't. We and we make sure we pack it all in. In the summer, and we don't take it for granted.

[Ben Carlson]

All right, well, anyway, why are we talking about the weather? Because it's the best time of the year, at least as far as I'm concerned. We've got the entire summer ahead of us. The skies are blue and we're coming to Chicago to enjoy the sun in the Midwest the first week of June. This is going to be. A lot of us. A lot of us at Wealth Management are coming. We are opening an office at the salt shed on Goose island, which is spectacular. I cannot wait to see it. It's been a long time. Long time coming. So we started in 2018 with just four employees there. Brian, Jonathan, Anna, and Colleen. And now there's 11, maybe 12 or 13 on the way. There's a lot of room for aggressive expansion, as Heath Ledger said in the Dark Knight. And we're super excited. So if you are an advisor or a prospective client and you want to talk to us, find out what it's like to be at Red Holdswealth Management, email [e-mail] Put Chicago in the headline and we're excited to see you there.

[Michael Batnick]

So When I joined RID Hold 12, I was the seventh employee, I believe. So we now have more people in Chicago than we had in the whole firm when I, when I joined. Wild, aggressive growth.

[Ben Carlson]

Where, where was the S and P when you joined? Do you remember? Or, I mean, you could Track.

[Michael Batnick]

This is 2015, so.

[Ben Carlson]

Oh, my God. Was it, was it, was it 1900? That's. I'm making that up. Where was it?

[Michael Batnick]

I can look it up right now because it was 10 years ago. So, I mean, we're talking in the 2000. Like 2000, probably maybe a little less than that.

[Ben Carlson]

Wait, did we. Did your 10 year anniversary with us pass and we missed it?

[Michael Batnick]

No, it's in September.

[Ben Carlson]

Okay.

[Michael Batnick]

I got it marked on my calendar. It actually is right when we're in future proof. So that's wonderful. Good timing. All right, so what did we learn about the. Do we. What do we call the. What happened with the tariff deals in the last couple weeks? Backtrack, caving? I don't know. The Wall Street Journal had a story where they said, like, listen, the market made everyone realize this was just not a good idea. And I think I actually give Trump credit for backing off because a lot of the stories and quotes made it sound like he was going to dig his heels in and say, no, I'm going to do this. I don't care what Anyone says. And so I don't give him credit for putting out bad policies in the first place. I do give him credit for backtracking.

[Ben Carlson]

Yeah, I think there, there was, there was a lot of debate. Rewind, I don't know, six weeks ago, there was a lot of debate. And I said on the show, whatever happens, it, it wasn't obvious at the time to anyone. It wasn't obvious what he was going to do. And with the benefit of hindsight, it would have appeared to be obvious, but there was very much an open question of he's not going to relent. There was a lot of people, a lot of people who genuinely thought lol. That he didn't care about the market.

[Michael Batnick]

His own cabinet members were saying this. His own people, spokesman for the White House were literally saying, so yeah, all right.

[Ben Carlson]

He, I don't know if he changed his mind or whatever, but, but thank God.

[Michael Batnick]

I honestly think this, the big CEO has got to him. I think Jamie Dimon and the Walmart CEO, the retailers, I think those people who are constantly, Tim Cook, I think all of them coming in and saying, listen, this is going to be a catastrophe if you keep these tariffs as high. It's not good. So Joe Weisenthal said, the two big losers today, this is yesterday, this is right after the deal was announced. People hoping for a Trump led economic catastrophe, which I believe that there was a decent contingent and this is pro Trump and anti Trump people. I think certain people wanted to see the system burn, which obviously is something I never want. I did not want, I do not want to see a recession or anything bad happen. Then he says members of the big chess party who thought the tariff announcement was some brilliant strategic plan that would reshape the global economy in a way that was beneficial for the US because we kind of got the muddle through a situation where, yes, there's still tariffs, they're higher than they were before, it's not nearly as bad as it looked on Liberation Day. And it's not gonna reshape the global order. It's gonna cause, I don't know, it's gonna cause slower growth and little higher prices, but it's not gonna be the awful left tail situation some people might've thought.

[Ben Carlson]

Not to put too much emphasis on one day, but it was a big day. Fokker. The S and P was up 3% on Monday.

[Michael Batnick]

3% days are not that common.

[Ben Carlson]

No, they're not. And I don't think anybody would have been surprised to have seen a sell the news type of event. Given that we had a V shaped recovery, the S and P is flat on the air. Holy shit.

[Michael Batnick]

Yeah, it's less than 5% from the highs. Can we say definitively retail investors were right again and the Wall street was wrong?

[Ben Carlson]

Retail was right. Walter Bloomberg, if he's a real person, I guess we'll never know. Tweeted on April 4, Retail investors bought $4.7 billion in stocks on Thursday. Largest level over the past decade. And I remember Ready blog post. Well, I remember way back to, I don't know, four weeks ago. Retail is not going to capitulate. Like if you're looking for the flush or the gigantic volume crash, like that's not what they do. And I guess it could have gone differently, but anybody that's been dunking on retail or waiting for capitulation, change the plate. You got to change your mental model. Did I just say mental model? I did. You got to change it. These the rules of yesteryear. It's out. Retail doesn't do what you think it's going to do. So retail won again.

[Michael Batnick]

Yeah. So I did this tweet yesterday that said the S and P at the start of the year was 5881. Yesterday it was 5811. The 10 year started at 4.6% and now it's 4.5%. Nothing ever happens, I guess. Was that officially the most.

[Ben Carlson]

You know which part of retail wasn't right? And maybe we just throw this in the trash can forever. The American association of Individual Investors, they.

[Michael Batnick]

Got all beared up.

[Ben Carlson]

Dead wrong.

[Michael Batnick]

Okay, how about this? The younger version of retail has been right. The older version, because that's mostly baby boomers, right?

[Ben Carlson]

Uh huh.

[Michael Batnick]

So I think it's the younger retail crowd now. I'm the captain now, right? Yeah, that's them. So was this officially the most unnecessary bear market of all time?

[Ben Carlson]

Has to be right, necessary. I'm not gonna do the line. I'm not gonna do the line.

[Michael Batnick]

Why did we, like, why did we do this? This is my question. Why, why did we go through all this, I guess just to debate the fact that this is bad policy. And now we know.

[Ben Carlson]

Okay. Yeah. I don't think anybody would argue that this was well conceived or, you know.

[Michael Batnick]

I, he, he wanted to try to touch a stove. He touched it and he said, all right, all right, okay, okay. That's hot.

[Ben Carlson]

Getting back to Wall street being big losers, our friend Michael Antonelli tweeted out, this is from May 2nd in Barron's stock market bulls have gone into hiding why our money pros are the most bearish in nearly 30 years. Oh, boy.

[Michael Batnick]

Yeah, we just talked about this last week, didn't we? It's. But was it all sentiment, though? That's the thing. Was sentiment bearish, but positioning wasn't? That's, that's my thinking. Because the money flow, I don't know. Institutions were selling, I guess.

[Ben Carlson]

Dude, there's so many different money flow data points that you could look at, from CT's to Global Fund managers to retail to hedge funds to this to that.

[Michael Batnick]

Right. It's hard to know for sure, but we know market went up. Guess what people bought. I saw this headline from this is from CNBC last week and I kind of caught the piece on CNBC as it was happening. So Paul Tudor Jones says the stock market will hit new lows even if Trump cuts China tariffs 50%. And I feel like every time we've had a correction and it bounces back, the hedge fund managers come out and say, we're going to retest the lows. Or Jeff Dunlock, look at these. Look at these headlines. They say it every single time. And one of these times they're going to be right. But they say every single correction because.

[Ben Carlson]

Nobody looks like an idiot for saying we're going to retest the lows. Nobody gets in trouble for that.

[Michael Batnick]

Yeah, but that's what they. All the headlines are always the same. We're going to retest the lows. You just wait. It never happens.

[Ben Carlson]

The rest are asymmetric. If I'm in the headline, I'm not saying that was the low. We might retest them. All right. If you're wrong, who cares if we.

[Michael Batnick]

Get a mild recession, Will we, Will we still. Because again, the bad recession has been taken off the table. It would seem that, that I think is we can all agree on if we get a minor hiccup and slowdown, do we count this. That as the. We already. We already priced that in and we're moving on.

[Ben Carlson]

All right, listen, here's here another winner.

[Michael Batnick]

It's changing by the day.

[Ben Carlson]

Of course, Investor psychology for the win. And we hammered this at the time, as I always do. I love the. These data points from Ryan Dietrich and Sentiment Trader. That shows what happens when you've got an extreme move in the market. Because that's not sentiment, that's not positioning, that's not this opinion or that opinion. It's what are. What is the market actually doing? And we called this out at the time and we actually got an email. It'd be really nice if you could like go back and look at all of these data points that you cite on a go forward basis. Well, we can't do that. But, but Ryan did do this. Ryan tweeted on April 9, what happens 1 month, 3 months, 6 months, 12 months later? And it had a perfect track record. When you've got that amount of buying power, especially coming off like a washout, that is really, really powerful stuff.

[Michael Batnick]

Don't fight the price. Right. And the price is less emotional than the sentiment.

[Ben Carlson]

That's right. Here's a wild data point. Fat Tail Capital tweeted this via City. You've only needed to own the S and P for 60 minutes in the last month to capture the full 17% of the recovery.

[Michael Batnick]

So that, that's because you got the initial 10% bump into one day and then the other ones were just overnight immediately. So we've gone from like, if you miss the best 10 days to if you miss the best 10 minutes.

[Ben Carlson]

I chart can make for, for our platform for advisors, Exhibit A. We're doing a chart of the week. And he had a great idea. You know, there's, there's a chart like, what happens if you miss the 25 best days, 25 worst days. And like, advisors love that. And I understand why they love it, but it's kind of because, like, nobody's actually missing the 25 best days. It's, it's a good thought exercise. It proves a point that we're trying to convey. Time in the market is better than timing the market, et cetera, et cetera.

[Michael Batnick]

However, boy, advisors love that phrase.

[Ben Carlson]

Oh, they love it. Oh, they love it. Yeah.

[Michael Batnick]

Time in the market. Better time ing the market. Yes. You have to enunciate ing.

[Ben Carlson]

Anyhow, so what if you sold at the lows of this year when we were down 19% on April 8, and you just said, I'm out. This is too, it's too much. We're gonna go way lower. And guess what? Somebody did that. Right? Obviously, for sure. So let's say that you sold on April 19th, on April 8th. And then the next day we had the 90 day pause, right? That was the 10% update. And let's just say that by some miracle you said, whoa, that was a huge mistake. I'm going to get all the way back in. And let's just assume that, I don't know, four people did that on the planet Earth, right? That had like the mental flexibility to go out on April 8th. Whoops, I made a mistake and got back in just the next day. Okay. So had you just done that, and had you only missed that one day, look what your returns are. You would. You would be flat if you held, or you would be down 9% if you only missed that one day. And of course, if you sold and never got back in, you're down 19%. For me, the highs. It really is unbelievable how much of an impact missing just one good day is.

[Michael Batnick]

Not to mention the psychological impact of that, of going, ah, no. So when we. Every week for Ask the Compound, we get all these emails in from people asking us questions, and we take them from the Animal Spirits inbox, we take them from the compound, we have all these different inboxes, and we put them all together. And Sean sends me an update of these questions. And after a week, after Liberation Day, we got the questions, and it was the big. I sent some of them to you and Josh and I said, oh, my gosh, this is the worst sentiment I've ever seen. And we read them all, and it kind of felt like I was being a financial therapist. And I said at the time, like, listen, I understand the bearishness, but a lot of people said, listen, I knew this was gonna happen. This is why I sold when he became president. Cause I knew it was gonna happen.

[Ben Carlson]

Yeah. What do you say now?

[Michael Batnick]

I said, all right, okay, fine. And that's. I'm not trying to rub it in, but this is. What do you do? And this is not to say, like, the market is not over. The market keeps going. There's never a winner and a lo.

[Ben Carlson]

Yeah, it never ends.

[Michael Batnick]

It keeps going. The market could stay volatile. It could go down, it could go up. Who knows? But the. The impact of yourself right now is how do you feel and what do you do and how paralyzed you become. If you made. If you pulled that trigger and said, I'm out. I'm pulling the ripcord. I'm going to cash now. What. That's why we always say, like, have the feelings, whatever feelings you want, don't always act on them. Especially if it comes to taking extremes in the market and making a huge move one way or the other. Like, if we were down 10% and you said, I'm gonna go leveraged long all in. I don't think that's a good decision either, because the market continued to fall right. Like that. I think the extremes in both directions. You be careful. Mentioned before. This is from the New York Times. The tariffs are still here. And they did this chart that shows what the tariffs were. From February 1st on. It went from 10% to 20% to 54%, to 104%, to 145%. Now back down to 30%. And China, China's kind of took a. Their retal. Retaliatory tariffs took a similar path. These are still much higher than they were before. Right. And I think a lot of people probably assume there, there's room to come down further. I don't know why, why 90 days is always the, the deal here.

[Ben Carlson]

But, but I think a lot of al. A lot of people also think that the headline numbers are not going to be the final numbers because there's gonna be carve outs all over the place.

[Michael Batnick]

Yes. Right. So 30% looks like the baseline, but okay, Apple and then chips and semiconductors and maybe it's lower than that. But again, I think what this does is just the small businesses are kind of gonna be the ones that get screwed. So this is probably why the stock market has been willing to look past all this and it know it. It. The stock market assumed this would happen, or I don't know how all knowing and all seeing it is, but the Wall Street Journal.

[Ben Carlson]

Wait, hold on. Pause, pause, pause, pause, pause. Another winner is the stock market not always right, but always more right than we are as individuals. Two weeks ago, maybe three weeks ago, what show were we on? Two weeks ago, maybe with Neil Dutta, I was like, tell me, tell me how this makes sense, how this stock market rally makes sense. And I've been bullish, but tell me how this makes sense. It doesn't make sense to me. You're telling me that earnings won't be impacted. You're telling me that confidence isn't being impacted, that multiples shouldn't be lower than they were than where they were before this happened. And again, it's not over, but the market called bullshit and the market was right.

[Michael Batnick]

And it does still seem to be like there will be a more. There will be. It is more muted than people would have thought a month ago when the Liberation Day stuff came out, because that was again, the catastrophic. This is going to be a huge impact. But now it's like growth is going to be a little slower than it would have been otherwise and earnings will probably be a little lower. Isn't that still fair to say? I think so, yeah. So the Wall Street Journal had this piece about a guy who builds tiki torches in North Carolina and how he's already down from to five employees from 12 and how they had one order that went from $5,600 to $8,700 and these people are already trying. Like they said, they're paralyzed. And like, what do I do? So do they get immediate relief now, these people? Is it still unknown? Because I don't know. So Ryan Peterson says the our ocean freight bookings from Trinity US increased 35% the first day since the trade deal. A big backlog is looming. Soon the ships will be sold out. So we went from worrying about empty shelves and there's to now. All right, everyone back in the pool and hurry up and get it back over here. And so I guess that Christmas is saved.

[Ben Carlson]

I thought this was a good take to the shipping point from Spencer Hakimian. Sorry if I'm not pronouncing this last name right. He said shipping rates are about to explode the second that the pause on Chinese tariffs was announced. Every single company is going to rush to have their inventory sent out of China. There isn't enough access to capacity to handle all this shipping at once. Here comes the second part of the completely unnecessary and unavoidable disaster to the supply chain that we will experience. So to the point of was this an unnecessary bear market? Well, it certainly wasn't unnecessary.

[Michael Batnick]

Imagine if you worked at supply chains, right? Yeah, but I mean, don't you think as far as the big corporations go, they pulled forward a lot of stuff and now, yes, they're going to rush. And if things, I don't know, it seems to me like things will probably be the worst case scenario. Was this lasting another three to six months and that is a really bad scenario. The fact that I kind of nipped it in the bud after a month there probably. I'm sure there will be disruptions in certain places not nearly as bad as it would have been if he kept the tariff so high.

[Ben Carlson]

I guess the people that are in favor of the way that this was handled would say that if Trump didn't go so hard in the paint that the threats would not have been taken seriously and he had to do this in order for deals to have been made. Now, okay, maybe let's see what the deals are. We don't know yet. Right. Like, let's see what the ultimate outcome of this is.

[Michael Batnick]

Right. It doesn't seem like a lot of concessions have been made and it seems like we were negotiating with ourselves in a lot of ways, but who knows? I saw this from that Faber last week and it just, it seems like corporations didn't really seem to be planning on these tariffs being high just because of their plan. So he said companies listed on the blue Chip S&P 500 said last week they expect to repurchase $192 billion of their own stock over the coming months. The highest figure in weekly data going back to 1995. It's also the biggest three month tally on record of stock buybacks. 518 billion. So that doesn't sound to me like corporations were planning for some terrible event to happen and pulling back. They were continuing to charge and maybe these plans have been announced but corporations did not seem to care in all of this thing.

[Ben Carlson]

All right, so corporations, they were the.

[Michael Batnick]

Ones who seem to assume they're going to be fine.

[Ben Carlson]

They're obviously buying their own stock. Dave Nadig did some analysis looking at the top 10 ETFs by flow.

[Michael Batnick]

And.

[Ben Carlson]

Probably not surprisingly V. The Vanguard S&P 500 ETF brought in 15. Nearly $15 billion. Vanguard total stock market bought and brought in nearly 4 billion. So yeah, they bought the dip in size. This was a gift to retail investors who were able to keep calm.

[Michael Batnick]

It's interesting though that the short term bond funds are on here too. So it was not only stocks but it was T bills.

[Ben Carlson]

That was number two. Which makes sense too. Why not.

[Michael Batnick]

But. But also getting decent Vanguard short term bond fund. So I guess it's. So those were the people that sold though, probably. Right. That moved to T bills. So there was people buying and also people selling.

[Ben Carlson]

Yeah.

[Michael Batnick]

Which. Which is what makes a market. Is this the first time that we could say it's possible the market stopped a recession from occurring and it's still possible we get a minor slowdown and it's technically a recession? I don't know. But the Kelshi odds went from 75% last week. We talked about to 41% now the.

[Ben Carlson]

Odds of a recession.

[Michael Batnick]

Yes. Do we. Do you think that the market potentially stopped a recession from happening by over. By reacting as it did to these announcements? Because again, I think if this stuff would have gone on for. Dragged out for another three months or so, then a recession was almost all but guaranteed. The fact that we stopped it after a month, I think there's. Even if again, growth is slower for a few months, it seems like we should be able to have the muddle through scenario.

[Ben Carlson]

Bucher Kappel had a good tweet. Rest in peace. Main street over Wall street lasted like six days.

[Michael Batnick]

That was fun. This surprised me from Jason Furman. I never would have believed. I think you sent me this, this chart. So he looked at wage growth in the last quarter century compared to the quarter century before. So this is 2000 to 2024 and 1976 to 2000. And he looked at the real hourly wage growth by percentile. So top decile all the way to the bottom decile. And the period this century knocks it out of the park and totally destroyed that other period. Would anyone have ever guessed this in a million years? No, I wouldn't have. I would have assumed. Oh, in the 80s and 90s, wages grew way higher. And I looked at this, the inflation rate was almost 5% in the first 25 years and it's been about 3% in the ensuing 25.

[Ben Carlson]

So I was about to say people don't like to hear this, that things are pretty good, but I don't like that line. People don't like to hear this because who doesn't like to hear that? I mean some dipshits on the Internet don't like to hear that.

[Michael Batnick]

Yeah, people on social media, Right. I think people on social media hate good news. But other than that.

[Ben Carlson]

Yeah, yeah, no, that surprising stat.

[Michael Batnick]

All right. A bunch of people sent us this chart or this story and wanted to hear our take on it. You got a lot of emails on this too, I assume, right? DMs and emails. Okay. This 30 year old startup is bringing leverage to 401k. Savers Basic Capital has a new product. Here's their pitch. They will offer savers on 401ks and IRAs $4 in leverage for every $1 saved. At current rates, the cost of that extra money will be about 6.25%. The start thinking goes they will find private credit investments that Yield more like 9%, meaning they will throw off enough cash to cover the borrowing costs and then some mix in some traditional stock market exposure. And assuming those private credit yields persist and that equities gain in line with historical averages, startups said savers can expect low double digit returns. So four to one leverage. Thoughts?

[Ben Carlson]

All right, so you're paying six and a quarter percent and you're getting 9%. Smells like free money.

[Michael Batnick]

The rub is obviously the borrowing rate. Seem like this is the kind of thing that if rates were still at 3% you'd go, this makes a lot of sense. And I think the traditional economic theory would state, well listen, if you're a young person in your 20s or 30s and you have three or four decades to save, you should be using leverage. Like that's economic theory is why wouldn't you take advantage of human capital, your biggest asset? Time compounding. Yes, this makes sense. That obviously doesn't always mesh well with reality, but we've We've heard enough people who say, listen, I've heard everything you guys have said on leverage ETFs. I don't care. I'm investing in these things there. So there's people who probably would be willing to pony up and do this.

[Ben Carlson]

I have to say that I just. My comment about free money, I think obviously that was sarcasm. I was joking. Please don't take that literally. Especially when the 9% on the other side of the six and a quarter is. And God knows what sort of private credit instruments. But yeah, Ben, you're 100% right. If, if you could borrow money at 3% and invest market over long periods of time, I can get on board with that. But that's not this. And so, I don't know, I haven't, I haven't done enough research. But certainly the, the, this caught the Internet's attention and then some.

[Michael Batnick]

I would love to talk to these guys and learn more about it. But the thing that worries me the Most is the 4 to 1 leverage. And I'm guessing the reason they did that is because that gives you enough juice to get these high returns.

[Ben Carlson]

I want to learn more about like the, the margin and the collateral and all that sort of stuff. And what happens if this goes wrong. And I want to learn, I want to learn more about the downside.

[Michael Batnick]

Yes. What happens if the private credit yields compress and. Okay, but it's.

[Ben Carlson]

Or what happens if the 9% ends up being 4% or worse? Yeah, I have questions.

[Michael Batnick]

Yes. All right. New York magazine had this story about how everyone is using AI to cheat in college. Did you read this one? Okay. A lot of Internet people talking about this. So they interviewed all these college kids and they said, I just dumped the prompt from my class into ChatGPT and hand in whatever it spat out. This person said, they wrote, you know, they interviewed all these college kids anonymously and they said AI wrote 80% of every essay turned in. He said at the end I'd put my own finishing touches on it, put my 20% of humanity, my voice, and that's it. They asked this. I was a girl. She said she rarely sit in class when she didn't see other students, laptop open to ChatGPT. Toward the end of the semester, she began to think she might be too dependent on the website. She already considered herself addicted to TikTok, Instagram, Snapchat, and Reddit. And she said, I spend so much time on TikTok, hours and hours until my eyes started hurting, which makes it hard to plan and do my homework. With ChatGPT, I can write an essay in two hours. That normally takes 12. So she's saying, chatgpt, help me do homework faster so I could rot my eyes out on TikTok.

[Ben Carlson]

Nice.

[Michael Batnick]

So I really don't blame these kids for doing this. Like, I don't get mad about this. Do you think that there was. And this is going to sound like I'm poo pooing college, but was there ever really an essay that you wrote that you thought like that really helped me become better at my job someday?

[Ben Carlson]

No. Well, me? No, I didn't. I don't know if I wrote a single lesson in college.

[Michael Batnick]

Did you cheat in college?

[Ben Carlson]

Dude, I didn't even show up for the tests.

[Michael Batnick]

That's true. I didn't. I mean, we didn't. It was. It would have been harder to cheat for us back in the day. The only time I. I did a homework assignment once where a friend said, hey, can I look at your homework assignment to make sure I did it right. And he copied my whole assignment. And so we got called into the professor's office and he said, guys, have anything to tell me? And I'm thinking, what are we talking about here? And my friend knew immediately. And he goes, obviously one of you copied off the other one because your answers are exactly the same.

[Ben Carlson]

What a dumbass.

[Michael Batnick]

And yeah, friend really screwed me on that one. But I think if you have the ability to do a paper on chat GPT and you do it and your professor gives you a decent grade, that's on the professor, not the student. I think it's the colleges have to keep up and give different types of tests. And also I guess the student is harming themselves in some way. Like using a chat GPT created something in your. In your own work life is probably not going to go. It could help you in certain aspects, but most of the stuff, the work, people are going to see right through it.

[Ben Carlson]

So I've spent zero time thinking about this, so I don't want to really comment, but I think the one thing I would say is if you cheat at everything, if you just take shortcuts, you're just going to cheat yourself. You're not going to develop the skills and the whatever. Now, I mean, a counterpoint is like.

[Michael Batnick]

Wow, that was very inspirational.

[Ben Carlson]

No, the counterpoint is like, you're right, you're right. 12 hours on essay. How is that like a good use of anyone's time?

[Michael Batnick]

Yes, that's the thing. You have to be creative. But I think the whole, my whole Thinking on AI is just that anyone who has a little bit of creativity, that's what's going to shine. Because if this stuff is all just going to be regurgitated. Regurgitated. I can't say the word. And easy to do. Like, that stuff is going to be meaningless. I told you. I got a demo from a fintech firm a couple of weeks ago, and they showed me how they're pulling stuff from the Internet to create custom blog posts for financial advisors. And they sent me a couple of them, and they were so bland in useless. I thought, well, this is, this is not helpful to anyone. It's helpful to summarize if you don't understand the topic, but if you're actually trying to educate someone and show them and get their attention, like, no one's ever going to read this.

[Ben Carlson]

Yeah.

[Michael Batnick]

So, like, I think people who are creative, those are the ones that are still going to stand out. But if you, if you're just doing bullet points on everything. Yeah, you're right. You're. You're. You're cheating yourself. That sounded like a parent to a kid talk. Right? You better save that one for your children someday.

[Ben Carlson]

Yes, I'm very responsible. All right. Speaking of AI, I've been talking about the quarter app a lot because they've built a LLM processor into the app and more investors in cora. I've said that before, just full disclosure there, but it is just so, so freaking cool. So I asked the chat, what did I say?

[Michael Batnick]

The important thing is, is that the only thing that it's pulling from is not the whole web. It's just company earnings reports and presentations.

[Ben Carlson]

Right. And then it's like directing you to it. I asked, did they mention anything about Bitcoin in the call? And this is for Schwab. And it gave me, like, the answers or the quotes, and then it, like, directed me right to it. And this is just such a small example of what's to come with AI. And it's. It's exciting.

[Michael Batnick]

Put a pin in this one, because I got. I use it. I use it more. So I'm going to talk about it for some other thing, but, yeah, go ahead.

[Ben Carlson]

Okay. So last week there was an announcement that Coinbase, which. Which is entering The S&P 500, kind of amazing. Coinbase.

[Michael Batnick]

That's kind of a big deal, isn't it?

[Ben Carlson]

It is a big deal. Coinbase has agreed to acquire deribit, the world's biggest trading platform for Bitcoin and ether options, for roughly $2.9 billion. This morning. There was news that Robinhood is acquiring, I think, a similar company in Canada for $250 million. So Bitcoin and ETH have gone absolutely nuclear over the last ethos.

[Michael Batnick]

Up like 65% in a month.

[Ben Carlson]

Yeah, it's, it's, it's unbelievable. So I was looking at the chart of, of Bitcoin and Coinbase and Ben, take a look at this. This three years, Bitcoin and Coinbase were tracking each other pretty damn closely, and it's been a nasty decoupling. Like, when did this happen? I guess in December, early January. Massive underperformance from Coinbase. I'm not exactly sure what's going on, sort of. Huh. That's interesting.

[Michael Batnick]

That is surprising. So you'd have been. Because you'd have thought Coinbase would be like a leveraged way to play Bitcoin, but Bitcoin has been a way better.

[Ben Carlson]

Option, I would have thought. All right, so I was, I'm scratching my head, like, why is the price going up?

[Michael Batnick]

Wait, hang on. Since. Since it went public. And when did Coinbase go public?

[Ben Carlson]

I'm guessing 2021.

[Michael Batnick]

I guess that's right, because it went public right at like a peak. So Coinbase, since it went public, is down 4.8% in total, which is probably surprising to some people. So it's basically gone nowhere. But it had a huge drawdown. It had like a 85% drawdown or something.

[Ben Carlson]

Wow. All right, so anyway, so why. Why are the coins mooning. Chris Berniski is a real person in Twitter, crypto Twitter. And he tweeted, who has the best data driven explanation for eth's recent massive move? Narratives are a dime a dozen. I can make them that too. I can make them to show me the data. And I was like, oh, awesome, this is, you know, I'll find something in here. There's nothing. You should have seen the responses. It was one joke after another. I'm like, you know, this serious person should have serious. Maybe some serious responses in the replies. Nothing. Nothing. Nobody knows Sometime.

[Michael Batnick]

Sometimes nobody knows anything.

[Ben Carlson]

Yeah, people just make.

[Michael Batnick]

Shut up.

[Ben Carlson]

Oh. Because whatever. I don't know. You can make something up, so can I. But I was very much looking forward to seeing some. Some data. And I don't know, they're going up because they're going up now like this. I'm sure there's reasons and whatever, but like a, an actual. What was the catalyst for the 65% move in the last week or whatever it was for eth. And it turns out your guess Is as good as anybody else's.

[Michael Batnick]

Nobody knows More buyers and sellers.

[Ben Carlson]

There we go. You nailed it, Ben. All right, let's talk about real estate. So Bespoke tweeted a chart. The active listings by region, and the Midwest, the West, and the Northeast are all tracking each other pretty closely. Mostly down into the right. A little bit of a pickup. But the south, holy gazole. The south is skyrocketing. So I went to Fred and I.

[Michael Batnick]

Looked Florida take, right.

[Ben Carlson]

Housing inventory in Florida. So Florida is at. I don't know if there's an autumn high, but for the last 10 years, Florida is at a high. It is skyrocketing. If you compare, it's one of the.

[Michael Batnick]

Few places that's higher than pre pandemic.

[Ben Carlson]

Yes. And if you compare that to New York, for example, New York is down to the right because there's a freaking housing recession. Right. There's no turnover. And so the story in Florida is what? Just the. The over the over.

[Michael Batnick]

A lot of people that came there.

[Ben Carlson]

Yeah, people move too much.

[Michael Batnick]

Ton of people moved there. The prices went up a ton. And now demand was saturated, I guess, and people are trying to sell, and it's much harder to do because there's not as many people coming. Like, all the people who are going to go to Florida, for the most part, a lot of them already came. They pulled. I think they pulled forward demand. That's kind of my take. But, yeah, it's crazy to see that the supply. That's actually a place where supply is. So we should start seeing more price drops there.

[Ben Carlson]

So I listed my house in Long beach on April 1, and I would have thought that it would have sold, like, in two seconds. Now, the house is a little bit interesting in the sense that there's not a driveway. It's. It's like a bungalow, and it's two blocks from the beach, and it's. It's renovated. It's a very desirable location. But there's. It's called a walk. So there's like a. There's a slab of concrete that goes through the. The block, and there's houses on both sides of it. So it's a bit of a pain in the ass. It's not like if, you know, for a conventional family, it's a little bit tricky.

[Michael Batnick]

So where do you park? Is there an alley or something on the street?

[Ben Carlson]

You park on the street.

[Michael Batnick]

Okay.

[Ben Carlson]

So I got an offer last week, which I mentioned on the show. So somebody emailed us with a subject title. Michael's Real Estate. Green Thumb. He said, michael, when you talk about your real estate adventure, selling your place in Brooklyn without an agent, buying your house on Long island moments before price houses exploded, or the stupid luck of buying this rental in Long beach, you always talk about it as mindless good fortune, but clearly it's a trend. At what point does it become real estate business savvy? Maybe you have a green thumb or one not for real estate. It's a curse to be great at something you hate doing. But you have a knack for real estate investing. Maybe you should go to real estate consulting. And I said to the person, oh, yeah, just wait until this podcast. So, earlier in the week, I haven't had a lot of offers. I had one crappy offer and one offer that was accepted, and it turns out that the tiles were sagging in the bathroom, which is, I don't know, I guess, not too unusual. But it turns out that they were worried about damage from the foundation, and the buyers were getting skittish, and maybe we had open permits from Sandy that weren't closed out. And I said, all right, okay, okay. You know what? I said? At least. At least it'll be good content for the show. At least it'll be good content for the show.

[Michael Batnick]

So did they back out?

[Ben Carlson]

So they. They got. They. They did another survey or inspection or whatever, and I think we're okay. I do have to go to the town and close out permits and all this sort of nonsense. But anyway, I thought it was hilarious that this guy's saying that I'm good at real estate. It's like, dude, literally dumb luck. And I. Not only am I not good, this might be terrible. This might be catastrophic.

[Michael Batnick]

This is a total case of the easy money has already been made, and you have to be a really good investor and understand locations and rental dynamics and all this stuff to make money going from forward, from here. Right? Like, yeah, you and I.

[Ben Carlson]

So I have a friend who's like, dude, why you. Why are you dumping your. Your mortgages at 2.9%? Like, why are you selling? And I'm like, because I pulled forward 20 years of returns, and I don't want the headache. And this is a headache if there are foundational issues, like, and. And, like, what if, like, there's roof issues? Like, I don't know. I don't want this nonsense in my life. I don't need it. I did great.

[Michael Batnick]

And you said, I'm moving on. You go six months without a person who's renting. Yeah. All right. New York Times had a Stir. Oh, wait, one more on the, on the rental thing. So Noah Kagan talked about this, and you, you gave a good thing like, yeah, I pulled forward all these years. He said he bought a property in 2017 to Airbnb it. He bought it for 315, put 63 down. He sold it for 377. But he said he also, he, not only appreciation, he paid the mortgage down, but he paid taxes. He paid a bunch of ownership costs. So his total profit, he said, was only $11,000 after he actually accounted for all the costs of having. So he basically said, you know, he would have been better putting it in the S and P. So a lot of it is just, I guess, location and luck, and you just never know on these things. There's another side of it. It's a lot harder than it sounds.

[Ben Carlson]

Yeah.

[Michael Batnick]

All right. New York Times, they looked at where young people actually are becoming homeowners. And the overall housing homeownership rate in the US is 62%. The highest one for people under 35 is in Minnesota, and that's 51%. Michigan's right around 49% as well. The lowest ones are Hawaii, New York, and California. That's not a surprise. I guess Hawaii is the worst. And they said, what's the, like, what's the deal? And it's basically just price to income. That's the thing. West Virginia, Alabama, Mississippi, Kentucky, Minnesota, they all have very good income to average sales price ratios. But the prices are, average price in Minnesota is like $300,000. Right. And in Kentucky, it's 225 or something. So there are still places like, do you see this? The Pope's childhood home in Chicago. So someone found. The Pope's childhood home is for sale. It's $199,000. I think it's in the south side of Chicago. Three bed, three bath, 1200 square feet. Look at this thing.

[Ben Carlson]

Unbelievable. Yeah. Houses were affordable in the 60s. Yeah. Okay, no offense.

[Michael Batnick]

This is the 1960s house, and it's still affordable today. It's just how many young people would be willing to, to buy it. And some people will, but most people probably won't. All right, I have some housing renovation anecdotes.

[Ben Carlson]

Go ahead.

[Michael Batnick]

I feel like I'm seeing housing renovations everywhere. I, I, I'm seeing, you know, you see the big dumpsters in the garage in the, or the driveway.

[Ben Carlson]

Yeah, yeah.

[Michael Batnick]

And you see a big addition going on, or I feel like I'm seeing. And maybe it's just the time of year and people decide to do these projects in the spring in Michigan and not have to do them in the winter. But I feel like people have finally said enough's enough. I have my 3% mortgage. I don't care if the HELOC rate is 7. I'm doing something because I'm, I'm going to end up being in this house for 10 more years or whatever it is. So I'm seeing, I'm seeing renovations everywhere. I think people have finally said I'm not going to move. I'm going to fix my house up. I don't care. I don't have any data to back this up. It's all anecdotes.

[Ben Carlson]

Okay, that works.

[Michael Batnick]

I guess that's going to be you with your, with your rental house. So you mentioned the quarter stuff. I use this because I talked to Michael Sidmore last week on as the Compound and he talked about how all the private equity calls these days for KKR and Apollo are talking about putting private equity into target date funds. And so I looked this up and I, I put, typed it in. Private equity managers mentioning target date funds. And it pulled up, as you mentioned, it pulled up the actual presentation and the co CEO at Apollo and then Mark Rowan, or Mark Rowan from Apollo and Scott Nuttle from KKR all talking about how like, listen, there is a huge opportunity. There's $15 trillion in four 1Ks. We want to put these into target date funds. And I just, I can't help but think that retail is the bag holder here. I'm not saying that the, the results are going to be completely awful. But Bloomberg had this story saying, wait, hang on, so Harvard is selling.

[Ben Carlson]

So you're, you're not, you're, you're not a skeptic, you're a cynic on this.

[Michael Batnick]

I think, I don't think it's going to be like, oh, it's a private equity, it's a bubble and it's going to burst. But listen to this. Matt Levine wrote about this. This is from. So this is Matt Levine via Financial Times. Financial Times says big private equity investors are taking advantage of a flood of capital from wealthy individuals to cash out their buyout fund holdings at higher prices. Despite the industry's year long downturn. Some of the largest evergreen funds and they're saying these evergreen funds, they put all the money in and instead of waiting for a capital call when there's a deal to be made, they have to put that money to work right away. So these interval funds and evergreen funds have bought large swaths of private Equity funds from institutional investors who are seeking liquidity after a dearth of distributions. That extra demand has helped prop up prices for stakes and private equity funds in the secondary market, even as institutional investors have cooled investing in new funds because buyout firms have had trouble exiting their investments. One advisor said, there's a lot of money flowing into these evergreen vehicles and they're under pressure to employ it quickly. So I just think that the returns in these funds are gonna be far lower than people assume.

[Ben Carlson]

Yeah.

[Michael Batnick]

Because they have to put the money to work right away. But they are also the bag holders for the institutions, don't you think?

[Ben Carlson]

In some cases.

[Michael Batnick]

I think it's gonna be a lot of cases. They have to put that money to work right away. If it's an evergreen interval fund, it's not like you wait. Cause the institutions, they have a capital call when the deal is ready to be made, and they don't know when the deals are gonna happen. And they invest the money when the deal happens. These funds, they have to put the money to work. It's like an ETF or mutual fund.

[Ben Carlson]

Yeah.

[Michael Batnick]

I'd be happy if someone wanted to poke holes in this, but I feel like retail is going to be the bag holder.

[Ben Carlson]

Yeah. I'm. For the record, I'm not taking the other side. I'm just. We'll see.

[Michael Batnick]

I'd be happy if someone could point me to, say, ben, no, you're wrong. It's going to be fine. And maybe if so much money is pouring in to the RIA channel and the wealth management channel and they do get targeted funds, maybe there's going to be so much money pouring in that it's not going to matter that much for a while. I just think the results are going to be. It's going to be lower than people have in their.

[Ben Carlson]

But also, it depends, what are we talking about? Infrastructure, private credit, real estate, private equity secondaries, like buyouts. What are we talking about?

[Michael Batnick]

All of it. If trillions of dollars is flowing in, all of it's going to have lower returns. You would think, right?

[Ben Carlson]

Yeah.

[Michael Batnick]

Or it's going to have. Or it's. Or they're going to be forced to use higher leverage to make those returns.

[Ben Carlson]

But I'm saying, my, my, the idea that retail is going to be the bag holder for institutions. I think, I think, yes, in some cases. No doubt. There's no doubt about that. And I think that there are. So not to get bogged down on that comment because there are a host of issues with private investments in 401ks. But I think it's inevitable. I mean, it is, it is coming.

[Michael Batnick]

That's the thing. You might not like it, but it's coming regardless. All right. We've talked about Jonathan Clements before. About a year ago he received the news that he had life threatening cancer. He doesn't have a long time to live. I think they gave him a year and he decided to start a program. And Jason Zweig wrote about this and Mike Piper wrote about this at the Oblivious Investor. And he's going to try to help young people age 18 to 24 start their own Roth IRA. And they have to go through like a personal finance class to do it. And they're gonna help assistance opening a Roth IRA and $1,000 grant to fund the account, which I think is just a fantastic. And I guess the Bogle center is helping. We'll put a link in the show notes. But there's a way that you can give money. So I gave some money to this. I'm not asking anyone else to do it if they want. But I think it's an awesome, awesome legacy that he's putting through.

[Ben Carlson]

Yeah, that's what I was going to use. What a wonderful legacy for Jonathan Clements, who has done a lot for tens of thousands of individual investors over the years. And I love that Jason is helping spread the good word here. So I, I also will be making a contribution.

[Michael Batnick]

And he has a new book out called the Best of Jonathan Clements Timeless Wisdom. And it's all his old Wall Street Journal articles that I grew up reading and that. And so William Bernstein and Jason Zweig helped put this off the ground. I actually did a blurb for the book, which I was happy to do, but check that out too, especially for personal finance people out there.

[Ben Carlson]

So, Ben, I traveled yesterday. I'm at Future Proof Colorado and I'll see you later in the week actually.

[Michael Batnick]

On the West Coast, San Diego, which means what's translated roughly to Wales?

[Ben Carlson]

Vagina. Of course it was. All right, so the real id. I was a bit nervous because of course my passport is also expired. I don't have a real id, the overnighted birth certificate. So the good news is that if you have a passport that is at least in New York, I don't want to speak for the rest of the country. I don't know what it is. Wait a minute, am I going to be stuck in California anyhow? If your passport is not more than a year old, TSA will let you through. Clear would not let me through. And I only mentioned that to say that the line for clear was by far, by far, by far, by far the shortest I've seen it in years.

[Michael Batnick]

Clear wouldn't let you through. Huh? Interesting. No, you'd think the scan of the eyes would be better than. Would be more. Would trump the id.

[Ben Carlson]

Yeah, but we already know that Clear.

[Michael Batnick]

I think Clear is a scam. I'm. I'm of the opinion Clear is a scam. It always takes way longer than TSA PreCheck. It never works for me.

[Ben Carlson]

This time it would have worked phenomenally because there was, like, three people in front of me. I only mentioned that just as an anecdote for travel, because we know travels, travel soft. Actually, this surprised the shit out of me. I was listening to the Disney call, and they're talking about the theme park. All right. Hugh Johnson, the cfo, said bookings right now for Walt Disney world for the third quarter are up 4%. And that's with about what we would say is 80% in, 80% in. And then for the fourth quarter, bookings are up 7%. That really surprised me that it's still rising. Bookings are up 7%. Quarter over in the fourth quarter.

[Michael Batnick]

Yeah, I would have thought Disney would be falling off by now.

[Ben Carlson]

Right. Ben, I saw. Remember a few weeks ago, I made the. The. The grand proclamation that Cops is my favorite show ever? I think I have to walk that one back, but.

[Michael Batnick]

Okay.

[Ben Carlson]

But I will say that without a doubt, Cops is in my top 10 for most hours viewed of any show of all time. Might be top five because it was on forever. I watched so many episodes of that show.

[Michael Batnick]

See? So you were watching Cops when you should be watching. You shouldn't be watching Seinfeld.

[Ben Carlson]

True. Anyway, there's a new show on Max. All Access PD in Grand Rapids. It's basically Cops in Grand Rapids on Max.

[Michael Batnick]

Oh, really? Okay. I hadn't heard of this.

[Ben Carlson]

Right. Should check it out. All right, this is. This is a. Wow. NBA NBC announced. This is Peacock. Michael Jordan will be a special contributor to the NBA on NBC. And I saw a table from Sportico. Top 10 highest paid athletes of all time. Jordan's earned $4.1 billion, inflation adjusted. They've got to be paying him a fortune to get him out of bed for this.

[Michael Batnick]

Yeah. Cause that's all from nb. That's all from Nike, obviously.

[Ben Carlson]

Right.

[Michael Batnick]

Can I share a secret? He's not. He's not gonna be any good at it.

[Ben Carlson]

I don't know. I don't know. We'll see.

[Michael Batnick]

Remember how bad he was on snl?

[Ben Carlson]

I don't remember that.

[Michael Batnick]

Can't be good at everything.

[Ben Carlson]

There's a new movie coming out, Godzilla X Supernova. You excited for that one? Ben 20:27.

[Michael Batnick]

My son, my son will eat that one up. He's seen every Godzilla, King Kong movie. All right, I, I, I appreciate a good take. So I don't want to do a takedown here, but the Atlantic had a story saying, is this the worst era ever for pop culture? And I appreciate the take. So he says, According to a YouGov poll, Americans rate the 2000s as the worst decade in a century for music, movies, fashion, TV and sports.

[Ben Carlson]

Not tv.

[Michael Batnick]

They also. So I gotta push back here. So they said in music, new releases accounted for a little more than a quarter of the albums consumed in the US Every year. Greater and greater percentage of the album streamed online is catalog music, meaning it is at least 18 months old. Now, here's my pushback on this. Imagine going back to someone in the 1990s and telling them, you can get any song you want to play for $14.99 a month. You can play it across any device you want. We didn't have access to old music like this in the past. The reason we listen to new music is because it was the only thing on the radio or TRL on mtv. If I had access to old music in the past that I didn't have to spend $15 on a CD for, I would have listened to it. So, I mean, you could make the case. Music was better because music was better than the 90s, let's be honest. But I don't think it's just the fact that we have less new releases out and people aren't listening. People are listening to old music because you already know it's good. Like, I used to buy CDs for one song. There'd be a good single. You'd buy the whole CD and you'd go, ugh, this whole CD sucks. But I bought it for one song. Plus, I mean, we have the biggest, one of the biggest musicians in history right now, Taylor Swift. So I will say movies are way, way worse. And so he made the point that all the movies are sequels. And I agree with that. Movies are worse, but TV shows are so much better. Think about it. We have movie stars in new TV shows all the time. They drop. And no one's ever even heard of these shows. All of a sudden, Netflix. I'm going to talk about this in my reviews. Had a show with Tina Fey and Steve Carell and Will Forte. Nicole Kidman's in TV shows all the time.

[Ben Carlson]

TV. You could argue TV's never been better.

[Michael Batnick]

Never been better. Remember, in the past, it was a huge leap for someone to go from TV to movies. In the 1990s, no movie star in their right mind would ever do a TV show. No, that was like the end of the line for you. You can follow your favorite sports teams unlike anytime ever before. You don't have to wait for SportsCenter to watch highlights. My wife used to buy Us Weekly to watch. Like, hey, look, this celebrity's buying a coffee now. Celebrities literally post their own stuff on social media. You can follow every intricate detail of their life. Podcasts have celebrities on them. Celebrities have their own podcast. So I'd say pop culture has actually never been better in many ways.

[Ben Carlson]

Yeah, that's a good take. It's a good take.

[Michael Batnick]

That's. That's my take.

[Ben Carlson]

Remember the Gateway 2000? We spoke about that the other day.

[Michael Batnick]

Wasn't a cow the mascot for that? That was like, everyone had a gateway computer. In the late 90s, early 2000s, everyone had a gateway computer.

[Ben Carlson]

And, yeah, singles were a thing, right? Like, you would literally buy a single song on a CD.

[Michael Batnick]

Yeah. It might have, like, three songs on it or something for like, 5.99.

[Ben Carlson]

Yeah. Things are not so bad. Somebody said that we should. That the opposite of Canary in the coal mine is Canary in the gold mine. Don't hate it. Pretty clever.

[Michael Batnick]

That's not bad. I like it. Yep.

[Ben Carlson]

Somebody Canary in the Bitcoin mine. Isn't Uber mail, just DHL, FedEx. Someone should invent an Uber mail. They just pick up and drop off your mail. This is how you know Ben is a man of the people. You know, I didn't know that DHL and FedEx would come to your house either. Is that a thing? That's awesome.

[Michael Batnick]

I just. I want. I hate going to the post office to do so I want someone to put it in the envelope for me, put the sticker on everything. That's what I want.

[Ben Carlson]

Apparently, that's. That's dhl. All right. Awesome.

[Michael Batnick]

All right. I mentioned a few weeks ago that I had to run in with a goose. The goose were coming, geese were coming after me, and I said I wouldn't mind stepping on one of their necks. These things are jerks. They poop everywhere. They're mean. This is from my office complex. Dear tenants, we are aware that the geese on the property become a persistent issue. It comes to the point where we can no longer realistically keep up with the mass and disruption they cause. To address the problem, we have contracted a professional company that will implement a method known as goose hazing that'll involve the use of trained herding dogs that will be brought on the site, unleashed to chase off the geese and discourage them from returning. This is a humane and effective method, Duncan. The dogs and their handlers will be on site at random time, 20 times per month through mid December. Do not interact with the dogs. So they're. These dogs are going to scare the geese away, which I've never heard of goose hazing, but I would have thought it would have been meaner than it actually sounds.

[Ben Carlson]

Okay.

[Michael Batnick]

All right. What do you got for recommendations?

[Ben Carlson]

All right, I've got a bunch of stuff better. You. Where are you with the studio?

[Michael Batnick]

I'm probably six episodes in, and I think it's a very hit or miss show for me. Some of the episodes I'm like, eh. And some of them, I think are great. Like the one I told you where he goes to a gala with a doctor girlfriend and he's debating all night how the entertainment industry is just as important as being a doctor. And I thought that episode was great. I thought they totally nailed it. Some of the other episodes, I can take it or leave it, so it's a hit or miss show for me, but I still am enjoying it.

[Ben Carlson]

All right, so I love the show, even if I don't love every episode. I like that it's contained. But I agree with you, some episodes are better than others. But I just.

[Michael Batnick]

You're right. Every episode stands on its own. You don't have to watch the other episodes to know what's going on.

[Ben Carlson]

So at the end of the most recent episode, they do an award show. And at the end of the show, there's no spoilers. At the end of the show, Seth Rogen gets in the car, and I just love. And there's like, just Hollywood trumpet music playing. And I just love being. I love being in Hollywood with them. I really. I'm really enjoying it. As a matter of fact, the most recent episode at the award show, they got Ted Sarandos to be in the cast. Like, he had a pretty sizable role in the show. And I thought, like, huh, Every episode.

[Michael Batnick]

Has one or two really good cameos.

[Ben Carlson]

But the guy. But the guy who was Netflix is on Apple. Is on a show on Apple. That's interesting.

[Michael Batnick]

Yeah, but he's kind of a celebrity himself. Couldn't you see him leaving Netflix someday and running one of these other studios?

[Ben Carlson]

Sarandos was courtside last night, sitting next To David Zaslav at Madison Square Garden.

[Michael Batnick]

How mad were you that you had to miss the game and not be there for that last night?

[Ben Carlson]

Um, it's the best game in the Garden. Uh, I'm trying to think of the last best game of the year.

[Michael Batnick]

Cause were you there on Saturday when they got smoked?

[Ben Carlson]

Yeah. It was not fun.

[Michael Batnick]

Okay, so are you allowing now that the Knicks have won, and they would have won it regardless if Tatum got hurt, but Tatum's hurt. I don't know if he's coming back. Are you allowing yourself to think about.

[Ben Carlson]

You don't know if he's coming back? We know he's not coming back. He ruptured his Achilles. We're not espn. We're allowed to say it.

[Michael Batnick]

Okay. Are you allowing yourself to envision going to the finals now? Are you? Not even.

[Ben Carlson]

I am.

[Michael Batnick]

Okay.

[Ben Carlson]

No, I am. I am.

[Michael Batnick]

Like, I'm. You're like. You could be thinking, like, I could be going to a Knicks game in the finals.

[Ben Carlson]

Yeah. So I am a very emotional Knicks fan.

[Michael Batnick]

Yeah. You tell me your wife made you take a walk after last week's game.

[Ben Carlson]

No, my. My texts are insane. I'm not like. I'm not like, don't worry, guys. We got this. Like, that's not. That's not where I. Where I stand. I thought this Knicks team underperformed all season. In fact, not. I thought the Knicks. This Knicks team underperformed all season. Our defense was alarmingly bad. I did not think that Mitchell Robinson coming back was going to change the defense as much as it had. But there was just something missing. There was something not clicking about this team all season, including throughout the playoffs. We were down 20 points in the first three games against the Celtics.

[Michael Batnick]

Pistons gave you guys a good game every game.

[Ben Carlson]

Yeah. So the Celtics are obviously the better team. Like, I'm not an idiot.

[Michael Batnick]

Right?

[Ben Carlson]

So. So, yeah. So going into the series, I thought we were 8 to 1, and I was not. I'm like, that's not attractive. I'm not doing that. I'm not betting that Josh bet that credit to him. So, yeah, I thought we were gonna get smoked. Even after, like, I thought we were gonna get killed in game three or, I'm sorry, game four. So now that we are up game three games to one, the series is over. Whether or not we win it in five or six, whatever, the series is over. Obviously, I feel bad for Jason Tatum, et cetera, I gotta say that. But I really do. But, yeah, no, I'm there. I think that we can beat the Pacers for sure.

[Michael Batnick]

And Pacers would have been like a. Even before these series would have been like a. 30 to 1, probably, right? 20 to 1.

[Ben Carlson]

Yeah. Yeah. Who'd have thunk it? I'm very happy. I'm very, very happy.

[Michael Batnick]

Yeah.

[Ben Carlson]

It's been a long time. It's been a long time.

[Michael Batnick]

My daughter's been staying up with me watching NBA playoffs and she has to. Usually it's her bedtime and there'll be a game on at the end in the fourth quarter, but can I just stay up and I let her stay up and it's been an amazing second round.

[Ben Carlson]

I don't mind the bandwagon, fans. I love it. But I never stopped in the last decade in the Tracy McGrady, Penny Hardaway, Michael Dolec, Othello Harrington. I could go. I can name 150 players that were absolute dogshit. I never stopped.

[Michael Batnick]

So I can tell based on your wardrobe, you have more Knicks gear than any person alive.

[Ben Carlson]

So to be on the other side of the mountain, I mean, I'm going to cry if we go to the finals. I'm going to cry to go to the Eastern final finals. Yeah, it's. It's very special for me. So I'm, I'm enjoying the. Out of it.

[Michael Batnick]

All right, what else we got for recommendations?

[Ben Carlson]

I listened to two episodes of the Blocks podcast with Neil Brennan that I've mentioned in the past that were both phenomenal.

[Michael Batnick]

Neil. Neil deserves to give us some, some tips or something because we keep sending.

[Ben Carlson]

People to his podcast, so good. I listen to Johnny Knoxville and Jim Norton, and Jim Norton is a, is an absolute filthy maniac, and I mean that in the best way possible. He's a stand up comedian and he's, he's something else. All right, credit to the last of us. Are you. Did you bail? Ben? Are you still watching?

[Michael Batnick]

I'm still watching. Give me your take and I'll give you mine.

[Ben Carlson]

Okay, so I'm not a Die Hard. Like, I very much enjoy the show, but I'm not, I don't. I'm not like, I'm ready when I, when I finish the show. I'm not thinking about what's going to happen next week. I enjoy it. And after Joel died, I was like, wow, they really did. Actually. Hold on, let's rewind. Actually, you know what? No, we don't need to rewind. It's episode four already. Sorry, we're keep, we're keeping going. So after they killed off one of the main characters in episode two, I was like, all right, let's see how they do it. And I faith in the writers and the faith, I think was rightly placed because I thought episode three and four was. Were. Did not skip a beat at all.

[Michael Batnick]

Okay, I have a totally different take. I think it's one of the dumbest TV decisions that's ever been made. Well, they're gonna.

[Ben Carlson]

They're following the. They're following the video game.

[Michael Batnick]

Great. Piss off the video game people. He was one of the only reasons I liked the show. I'm still going to watch. I think it's okay. I do not think that the young girl, she was a sidekick. She's not a main star. I know they're gonna bring other people in. They brought Jeffrey Rush in and Catherine o' Hara. I think it's who or why not wait to kill him at the end of the season? Why? I think it's. He was the best part of the show. Why? Who cares what happened in the video game? Did you like Inexplicable. I think it's one of the stupidest TV decisions I've ever seen, and I'm still going to watch it, but it totally makes the show not as good for me.

[Ben Carlson]

All right, well, let's see. That's a premature take. There's six more episodes.

[Michael Batnick]

All right. The first two back, it's like, they're okay, but it's not the same. That's where I'm at.

[Ben Carlson]

All right, two more. I was listening to Nicolas Cage on the Big Picture with Sean Fantasy. He has a new movie called the Surfer, which I have not seen, and he said he told Sean Fantasy that he almost. Oh, Sean Fantasy said, which one of your movies do you think is underappreciated? And he said, matchstick Men, which is one of.

[Michael Batnick]

Oh, I like that one.

[Ben Carlson]

I think my favorite Nick Cage movie ever. Maybe. I would have to think about that phenomenal movie. Absolutely. That rocked my world when I saw it.

[Michael Batnick]

Come on, man. Nick Cage was in the Rock.

[Ben Carlson]

The Rock, Conair and Snake Eyes and Face Off. That was a run anyway. But he took that role instead of Tim Robbins in Mystic River. That would have been weird.

[Michael Batnick]

Oh, yeah. That wouldn't have worked. Him trying to do a Boston accent.

[Ben Carlson]

No, I don't think so. All right, anyway, finally, on the airplane. I had a lot of work to do in the airplane. Not to brag, so I watched in the background. Perfect airplane movie. 2 hours and 15 minutes. Not great action. You could look up, whatever. You're not really missing much. Den of Thieves, Pantera with.

[Michael Batnick]

I Just watched the first one recently. So should I watch it?

[Ben Carlson]

Okay. On an airplane? Like, it's not, you know, it's not like I wouldn't say fired up on a flight.

[Michael Batnick]

I do like to do that on. So I have a long flight to San Diego later this week. So I, I do like to put on a movie in the background, even if I'm doing answering emails. And.

[Ben Carlson]

Yeah, this is, this is like, this is perfect for that.

[Michael Batnick]

So we Talked about how TVs better than movies now. And so I think a lot of the shows. You said your friends and neighbors could have been a movie. I still like it. I think the one where they went to Princeton recently, I thought that was a great episode of tv. Did you watch that? Where they took their daughter to Princeton? I think Jon Hamm and Amanda Pete have great chemistry. I think your dope thief show could have been a movie too. I thought that one kind of went off the rails a little bit.

[Ben Carlson]

Oh, did you watch it?

[Michael Batnick]

I'm still watching. I'm not done yet. But I feel like at the middle of it, it kind of lagged. Like, that could have been a movie. Here's one. Four seasons on Netflix. It just showed up. It's Steve Carell, Tina Fey, and Will Forte. And if you look. And it's. It's. It's three married couples who go on like four vacations together, and each every two episodes is them going on another vacation. I'm only three episodes in, and it's just. It's a half hour show. It feels like a movie. And Steve Carell is great. Tina Fey. I'm a huge Will Forte fan. I feel like the Last man on Earth, which was on Fox, is one of the biggest, the most underrated TV shows of the last 10 years. It was hilarious. Wait, do you enjoy the show?

[Ben Carlson]

Four seasons, you know, it's so funny. So. So we're watching it too. Although watching it, that's a stretch.

[Michael Batnick]

Is the house in upstate New York. It looks like an upstate New York house.

[Ben Carlson]

I haven't. I don't think I've got there. I think I watched the first episode and a half and we were watching.

[Michael Batnick]

That's what it is. They're at the house on the lake.

[Ben Carlson]

Okay. I'm not. I was, like, falling asleep. But we were saying to each other, like, who is this show for? It's like, it's just. I don't understand the audience. And I'm thinking, like, it's for my dad, I think, and no, it's for Ben, apparently.

[Michael Batnick]

Oh, my Wife and I love this show. It's like the fact that the husband gets mad at the wife for playing video games on her iPad all the time. I don't know, maybe it's just a lot of quirky things that we noticed that are realistic to us, but you.

[Ben Carlson]

Know what I was saying, I love it.

[Michael Batnick]

I think it's great.

[Ben Carlson]

Okay, maybe I'll just.

[Michael Batnick]

It's just a light.

[Ben Carlson]

It's very light.

[Michael Batnick]

Yeah, that's what. It's a light. It's not too deep. I don't. Sometimes I don't want deep shows. I want just light and happy and fun.

[Ben Carlson]

Yeah. No. So for me, it's a perfect sleeping show. And I guess it's a Ben show. That's who it's for.

[Michael Batnick]

You know, I have a feeling that you don't pay attention to a lot of shows because I mentioned Johnny Knoxville being on the studio the other day and you said, when was he on the studio? And then literally the whole first two episodes of the four seasons are at a house on the lake and you're like, oh, I must not got there yet. Have you been watching these shows?

[Ben Carlson]

I think I was following Zipper the Four Seasons. But wait, hold on, hand up. I admitted last week I am a very bad watcher.

[Michael Batnick]

Apparently. You're probably just. You're a phone guy. I always get mad at my wife for not paying attention to a show when she's on her phone because she misses stuff and she asks me what happens. And I said, get off your phone and pay attention. This is a no phone show.

[Ben Carlson]

This is why airplanes movies get a 30% premium for me. Because it's the only time where I'm.

[Michael Batnick]

Like, locking on, you actually pay attention.

[Ben Carlson]

That's why I go to the movie theater. It's a hack. It gets my attention span.

[Michael Batnick]

All right, any closers here? We good? Is the volatility completely gone for the year? I don't think I'd be willing to say that quite yet. Market's up again today.

[Ben Carlson]

Is the tariff related volatility gone?

[Michael Batnick]

Okay, that's a good question.

[Ben Carlson]

That's a fair question. And I would say maybe.

[Michael Batnick]

Okay. Personal emails, personal responses. Animalspiritscompoundnews.com thanks to our production team, as always. Remember, we got video on Spotify, video on YouTube at the compound. What else? I don't know. That's it. See you next week.