Slate Money — "Markets Will Be Markets"

Podcast: Slate Money
Host: Felix Salmon
Date: July 5, 2025
Guests: Barry Ritholtz (Wealth Manager), Elizabeth Spiers (NYT), Emily Peck (Axios)

Overview:

This episode of Slate Money serves as an upbeat, insightful roundup of the latest in business and finance, marked by the US stock market's record highs. Host Felix Salmon, joined by co-hosts Elizabeth Spiers and Emily Peck, welcomes back financial pundit Barry Ritholtz. The group tackles big questions: What really drives markets to new highs? Are these highs a bullish or bearish signal? How does fiscal policy, the value of the dollar, and investor psychology interact in today's environment? With humor, pop culture references, and candid wisdom, they dissect the complex mood and mechanics of 2025’s financial markets.

Key Discussion Points & Insights

1. The Emotional Rollercoaster of Markets

• Human Behavior and Market Fluctuations
  • Barry Ritholtz reflects on market psychology:

    “It is the normal state of human affairs to engage in fight or flight when you are threatened in any way…There is no mechanism for: what do you do when equities are down 15% because of a surprise policy announcement?” (03:00)

  • Even experts find themselves riding the waves of sentiment. Barry emphasizes calming his clients:

    “I spend half of my day just trying to tell people, ‘take a breath, we'll get through this.’” (01:57)

  • Main takeaway: Emotional overreaction is universal, but managing it is key to financial health.

2. What Drove Markets to New All-Time Highs?

• General Volatility AND Real Policy Changes
  • Barry explains:

    “Yes, stocks are volatile and yes, something changed to cause things to return to new all time highs.” (03:53)

  • Major drivers discussed:
    • Policy Reversals and White House Backpedaling: Market relief from a “90 day pause” in damaging new tariffs/policies, following earlier turmoil.
    • Weaker US Dollar: With multinational companies in the S&P 500, a weaker dollar means overseas earnings translate to bigger profits in USD (07:26).
    • Anticipated Fiscal Stimulus: Large tax cut and spending packages, with the co-hosts debating whether these are truly stimulative or just help top earners/corporations.
      • Felix: “If the fiscal stimulus is aimed at corporations, that’s like the most direct way of juicing the stock market.” (10:56)
      • Emily: “Stock market is not the economy… Good for corporations doesn't mean it's like a fiscal stimulus in the way most people understand fiscal stimulus.” (11:13)

3. Historical Echoes & Economic Philosophy

• Barry references the HBO show The Gilded Age to point out how economic debates remain unchanged:

  “It’s amazing, it’s over a century and change later, it’s the same exact conversation.” (12:19)

• The conversation pivots to differing approaches:
  • Keynesian Policy: More direct help to lower/middle classes.
  • Supply-side/Tax Cut Policy: Benefits capital holders, corporations, and higher earners.
• Notable Quote:

  “When we shift over to, you know, targeted tax cuts and reducing corporate taxes, guess who that’s going to benefit?” (16:03)

4. All-Time Highs: Sell Signal or Buy Signal?

• Momentum vs. Value:
  • Felix: “This is the classic tension in investing: value (buy low, sell high) vs. momentum (going up, stay in).” (16:56)
  • Barry notes that “momentum” approaches often outperform:

    “People who don’t care about value and only care about momentum generally outperform the people who care about value for precisely this reason.” (16:56)

• Emily sums up the retail experience:

  “Always. Like, I can’t get back in, I can’t get back in. They keep going up, they keep going up. And that’s why you’re not supposed to get out ever.” (17:28)

• Behavioral Challenges: Many investors regret either getting out too soon or missing rebounds.

  “The fear is, ‘Oh, I don’t want to look like an idiot.’ That shouldn’t be the driving factor.” (17:35)

• Cycle of Buying the Dip (‘BTFD’):
  • Barry traces decades of “buy every dip—until it doesn’t work, and then the cycle resets”:

    “Until there's the next 10, 15 year bear market, until that muscle memory gets beaten out of people, it works. They’re going to continue to do it.” (20:03)

5. Investor Psychology and Risk Appetite

• Felix posits that some people simply aren’t cut out for equities—a key element in risk tolerance.
  • Barry’s categories: Real estate devotees, entrepreneurial risk-takers, catastrophe preppers.
  • Barry quotes Rich Bernstein:

    “When someone says the dollar’s about to collapse, all this terrible thing is happening. What they’re really saying is everyone else in the market is stupid. The collective wisdom of the market is totally wrong. And I figured it out.” (25:00)

6. Currency Markets & The Weakening Dollar

• What’s Driving the Dollar Down?

  • Barry: Since the dollar has been at the top of its 50-year range, a pullback isn’t shocking. Partly due to momentum, partly rate differentials, and global rebalancing.

    “The dollar has been the weakest currency in the world all year and it continues to weaken.” (27:21)

  • Felix stresses rate cut expectations:

    “The overwhelming reason for the decline in the dollar is actually just this vibe that inflation is coming down… the thing that drives FX is the difference in interest rates.” (31:14)

  • Barry adds: Increased European defense and fiscal spending, influenced by US policy, might be shifting flows from the US to Europe (33:33).

• Is It a Crisis of Faith in America?

  • Emily: “The fashionable argument is people don’t believe in America anymore… That seems like that is actually not what's happening.” (34:31)
  • Felix: Refutes the "end of American exceptionalism" narrative, citing bond and equity flows.

7. Market Breadth, Liquidity, and ‘Magnificent 7’

• The market rally isn’t just mega-caps; it’s broadened to international and smaller stocks.
  • Barry: “We've seen the market broaden out… it’s expanding from mega to large and small and mid cap. And so the world seems a little more balanced than it was over the past year or two in terms of growth.” (37:49)
  • Persistently high global liquidity is hunting for investment homes.

Notable Quotes & Memorable Moments

Pop Culture & Humor

• Felix and Barry joke about going from Candide’s optimism to Pulp Fiction’s “Be cool, Honey Bunny.” (02:48–02:58)
• Barry, on decades-old coupon schemes:

  “Like cancer points.” (41:11, on collecting Camelbucks for prizes)

• Paper 401(k) rollovers:

  “I love the fact that 401k rollovers still work with paper.” (22:35)

Timestamps for Important Segments

• [01:29] — Market mood shift, reopening discussion with Barry Ritholtz.
• [03:53] — Why did stocks hit all-time highs? Policy changes, dollar, stimulus.
• [08:30] — Debate: Is tax-cutting legislation real fiscal stimulus?
• [14:28] — The pendulum swinging from labor to capital, and its implications.
• [16:36] — Are all-time highs a warning? How momentum and value investing differ.
• [20:03] — The psychology and practicalities of "buy the dip."
• [27:21] — Why is the US dollar weakening? International context and implications.
• [34:31] — Addressing narratives of lost faith in US assets.
• [39:09] — Start of the light-hearted ‘Numbers Round’ segment.

Numbers Round: Fun & Offbeat

• Emily: 750 million coupons redeemed (2024), down from 3.3 billion in 2010 — the era of extreme couponing is over. (39:14)
• Elizabeth: 1 in 5 adults has chatted with a romantic AI, per BYU study; whimsical AI “Vladimir” who only complained. (41:50)
• Felix: $30 billion — total estate tax collected, a pittance compared to what could be, due to loopholes. (43:03)
• Barry: 492 all-time highs for the Dow between 1982–1999; it’s normal for markets to hit peaks frequently in bull runs. (45:21)

Concluding Wisdom

• Barry: On selling in fear:

  “I don’t want to make that 1 in 500 bet that the most recent all time high is the one you have to sell. Then you have to start thinking how am I going to get back in?” (46:29)

• Felix (joking):

  “Sell everything. Sell it all. Spend it all on luxury goods and general silverism. And YOLO.” (46:51)

Message to Listeners:
Stay invested, beware emotional overreactions, and recognize the complicated dance of policy, psychology, and global balance sheets that drive markets. And maybe—after a lifetime of saving—don’t be afraid to splurge a little.

For more lively finance discussion, tune in to future episodes or join Slate Plus for bonus content.