Economic Data Deteriorates, Private Credit Struggles, Retail Traders Give Up

Summary

The Compound and Friends

Episode: Economic Data Deteriorates, Private Credit Struggles, Retail Traders Give Up

Date: March 24, 2026

Hosts: Downtown Josh Brown & Michael Batnick

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Episode Overview

This episode dives deep into the weakening economic landscape, challenges within the private credit and housing markets, and the substantial retreat of retail traders from the stock market. Downtown Josh and Michael offer candid, sometimes acerbic commentary on the contradictions and confusion in the current economic data, discuss how structural imbalances are affecting average Americans, and explore where risk and opportunity might lie as markets shift.

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Key Discussion Points & Insights

1. The State of the US Economy

Main theme: Economic data is deteriorating, with rising concerns over growth, employment, inflation, and consumer sentiment.

• GDP Shocks:

  • Hosts note a dramatic drop in GDP forecasts—from 5.4% growth (Atlanta Fed GDPNow, January) to 0.7% (March).
    • "We came into January talking about like 4 or 5% GDP, and now we're scraping the bottom." —Josh [02:57]
  • Josh calls the economy “terrible” due to its downward trajectory, even if it isn’t absolutely catastrophic yet.
    • “The economy is terrible because I always think about the economy as something that's on its way in one direction or the other, and the direction that it's on its way to is the wrong direction.” —Josh [07:30]
  • Michael’s more nuanced: “It's middle. It's not great at all, obviously. I wouldn't say it's terrible. It's somewhere in between.” [06:39]

• Labor Market:

  • Flattening job creation: Private payroll growth is anemic (<33,000/month), and ex-healthcare/social assistance, jobs are down.
    • “If you pull out healthcare and social assistance, private payrolls are actually down. Manufacturing jobs are down. Retail jobs are down.” —Josh [05:15]
  • “The labor market's soft. Not a lot of hires, not a lot of fires. Initial jobless claims look totally fine.” —Michael [06:39]

• Inflation & Consumer:

  • Price increases shifting from goods to services, creating “weird stuff” in consumer prices; inflation not abating as hoped.
  • “Consumer spending is pretty sluggish... Retail sales are not growing.” —Michael [06:39]

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2. Private Credit: Struggling, Redemptions & Liquidity Squeeze

Main theme: Private credit funds are facing mounting stress, with increasing withdrawal pressures, downgrades, and the risk of liquidity crises.

• Redemption Pressure:

  • Apollo is keeping withdrawal rates at 5% vs. 11% requests—described as “the problem.” [08:47]
  • Moody’s downgrades FSKR Capital Corp to junk, underlining sector risk.

• Systemic Risk:

  • “The entryway is the size of a football field and the exit is... the size of a phone booth. And everybody wants out at the same time.” —Josh [30:10]
  • Mismatch between public/private vehicles, liquidity and redemption obligations highlighted.

• Market Impact:

  • Publicly traded BDCs like Lennar down 50%+, stocks trading down on expectations of a tough fundraising environment—not portfolio implosions per se.
    • “I don't think the stock is down 40% because people think Apollo's whole portfolio... is going to blow up. ...the dream has gone up in smoke.” —Josh [34:58]

• Media Perception:

  • Coverage focuses on retail investor pain and the “Monopoly men” at the top; hosts note difference between actual credit blow-up and loss of growth narrative.
    • “The media just... love it. It's like catnip.” —Michael [31:27]

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3. Housing Market: “Frozen Solid”

Main theme: Housing is in a deep freeze, with historically low transactions, high rates, and mounting inventory, potentially leading to falling prices.

• Data Recap:

  • 30-year mortgage rates above 6% for years.
  • Existing and pending home sales at 10-year/all-time lows. [10:38], [12:39]
  • Inventory rising—but attributed more to lack of buyers than strong building.

• Consumer Impact:

  • “This is the most important part of the economy for most Americans. Outside of whether or not they have a job...” —Josh [12:50]
  • The real wealth effect for Americans is closely tied to home valuations and liquidity, versus stocks.

• Distortions:

  • Home builders now offering record incentives (14% avg. discount), reminiscent of 2010 crisis.
    • “That's completely abnormal. Way elevated versus our experience in the last 10 years.” —Josh [15:43]

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4. Retail Traders: Activity & Market Sentiment Collapse

Main theme: Retail trading drove recent rallies but has now essentially “given up,” with volume and interest declining as favorite stocks falter.

• Trading Activity:

  • Citadel Securities posted record profits in 2025—“They absolutely feasted on retail activity which is now 25% of the market. Obviously it's pulled back since.” —Michael [19:16]
  • “The stock market sucks and they're getting burned... It's just not fun anymore.” —Josh [20:17-20:35]

• Market Leadership Rotation:

  • New market leaders are unfamiliar to most retail investors (e.g., energy, industrials)—retail loses interest.
    • “They're not buying energy stocks and industrials, they're just not, they haven't heard of these names.” —Michael [23:31]

• Retail Platforms & Meme Stocks:

  • “Robinhood... down 54% from its highs.” —Michael [21:25]
  • “DoorDash is in a 45% drawdown.” —Michael [24:01]

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5. AI, Employment & The College Grad Crisis

Main theme: The job market for college grads, especially in STEM and office roles, is collapsing as AI adoption accelerates and companies restrain hiring.

• Unprecedented Flip:

  • For the first time, unemployment is higher among recent college grads (6%) than the broader workforce (~4.2%).
    • “Unemployment rate for college grads is now 6%... we've never been in an environment where it was harder for a college educated kid to get a job than for a non educated kid our entire lives until the last five years.” —Josh [48:50]
  • “Even computer engineering, 8% unemployment.” —Josh [49:53]

• Hiring Sentiment:

  • Companies “hanging tight,” waiting to see what AI can automate before adding new headcount.
    • “Let's wait and see where all this AI that we're spending all this money on, let's see what it can really do before we just add the requisite body count.” —Josh [52:11]

• Political Implications:

  • Hosts anticipate this will soon boil over into a political flashpoint, particularly as new grads job search in late spring.

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Notable Quotes

• “The housing market is just absolute ass.” —Josh [10:38]
• “This is the opposite of the pandemic. When you listed a house, you sold the house in 20 minutes... the ratio of sellers to buyers is in a historic imbalance.” —Michael [14:41]
• “The retail trader from '23 to '25 kicked the shit out of professionals.” —Michael [23:16]
• “I do believe that this is overblown. I do believe that the incumbents are ultimately going to be the biggest beneficiaries... But the sellers are in control, period. Hard stop.” —Michael [44:53]
• “If anyone is still out there and hasn't killed themselves yet, let's do make the case.” —Josh, dark humor as segment transition [54:19]

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Important Segment Timestamps

• Economic deterioration & weak GDP: [02:57]–[08:02]
• Private credit/BDCs struggles: [08:47]–[18:53], [29:00]–[38:21]
• Housing market deep dive: [10:36]–[17:25]
• Retail trader washout: [19:16]–[24:01]
• AI and college grad employment crisis: [45:37]–[54:19]
• Quick hits: Expedia & Clear stocks, “Halo” trade in AI-resistant assets: [24:42], [54:19]–[56:16]
• Mystery chart—memory chip stocks as current bubble: [56:16]–[57:58]

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Memorable Moments

• Josh's recurring use of "ass" and "terrible" to describe markets/housing, setting the episode’s exasperated tone.
• The bickering over just how bad “terrible” really is for the economy, reflecting honest disagreement on market semantics.
• Detailed breakdown of private credit vehicles and their liquidity traps—a cautionary tale for retail participants.
• The insight that the real wealth effect in America still centers on housing, not stocks.
• Lively banter and dark humor about job prospects for college grads (“If anyone is still out there and hasn't killed themselves yet...”) and the AI disruption.

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Final Thoughts

This episode provides a frank, unsparing assessment of current economic woes—from weak labor and GDP data to frozen housing, and the fallout in private credit. The hosts lament the vanishing tradeable opportunities for retail, while warning of a brewing crisis among younger job seekers as AI transforms white collar employment. Still, they highlight that new investment opportunities could soon emerge from price dislocations, especially in distressed private credit—if you pick your spots carefully.

Actionable Insight:
If you're interested in private credit, “choose your fund very carefully,” as the entry point may improve, but risks abound.
—Josh [39:13]

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For more expert takes and charts, visit The Compound’s YouTube or podcast feed for this and future episodes.

Transcript

[A]

So sorry we're late. We're live now, I think, guys. Give it. Confirm, give us, give us a sign. Tell us that we're actually here. All right, Sorry. I was busy negotiating a ceasefire in the Gulf. The street looks like we got everything under control. I think it's a 30 day ceasefire.

[B]

Did you read that? I saw a Tweet.

[A]

All right, 30 days. Yeah, 30. Well, we already won, so I don't even understand why it's a right. Wasn't there a victory? All right, we're back. It's another edition of all all new edition of what are your thoughts here on the compound channel. First time listeners and viewers, my name is downtown Josh Brown, here with my co host Michael Batnik. Michael, say hi.

[B]

Hello.

[A]

Hello, you guys. We're super excited to see everybody that's here for the live. I saw literally every pounder I've ever heard of, plus all sorts of new names and faces. Thank you guys so much for showing up. Last week we broke a record, had over 2,000 people come for the live. We'll see how we do tonight. We have an ad read. We'll get through this and then we'll get right to the show. We have tons to do. Tonight's show is brought to you by Betterment.

[B]

That's right, Josh. Every rea knows attention. You don't want to turn people away, you don't want to require high minimums and you want to help clients who are just getting started because that's. That's where long term relationships begin. But here's the truth. Those simple accounts, they take a lot of work. Account opening, trading, rebalancing. And before long, your staff and back office are underwater and trying to stay afloat. That's why established areas are turned into Betterment Advisor Solutions. It's the platform built for segmenting your book and streamlining those smaller and simpler accounts. Explore what segmentation can do for your business today. Lower your operational lift, but keep your standard of service high. All with Betterment Advisor Solutions. Your biggest regret will be not doing it sooner. Learn more at bettermented. Slash Better Advisors.

[A]

Slash Advisors. All right, thanks. Thanks to Betterment. Not only are they a sponsor, we actually use the service ourselves at Ritholtz. And we appreciate it.

[B]

This episode is sponsored by Clearbridge Investments. A manufacturing comeback combined with resilient consumer spending and the tailwinds of monetary and fiscal stimulus confirm a healthy economic backdrop that should continue to support broadening equity leadership going forward. Position your investment portfolio for wider equity participation and with fundamentally driven Clearbridge active Equity Strategies, Clear Bridge, a Franklin Templeton company. Go to clearbridge.com to learn more.

[A]

Okay, let's not beat around the bush here.

[B]

Don't do it.

[A]

The economy's just not good and it's going in the wrong direction in many ways. Not in all ways, but in many ways. And it's super noisy and hard to just stare at any one data point and try to draw a conclusion. And we don't try to do that. But like we came into January talking about like 4 or 5% GDP and now we're scraping the bottom. We're talking about 0.7% growth and I know that number moves and it's varied and it is prone to constant revisions. So it's not the end all be all. But I do not think it's a good economy right now. It's certainly not as good as it was last year and the year before. And, and it's, it's, it's mid as hell and I think the market is sort of reflecting that some extent. What do you think?

[B]

I don't know. The market doesn't really care about the economy.

[A]

I think there's chart on

[B]

which on

[A]

Friday The S&P 500 broke below its 200 day moving average for the first time since May 2025. And then after the close Trump tacoed the Iran situation with a tweet about we're in talks with the Iranians if there's any left and they want to be cool and we're going to figure some shit out. And then Iran came out and said no, nobody's talking to you. There are no deals, there's nothing even, even being discussed. The market didn't seem to really care. This is like par for the course. And then it looks like today after, after the close there was some sort of a cease fire announcement. And that's great, we like a cease fire I guess. But the reality is it doesn't matter that much outside of the price of oil. What, what to me I think is really worth talking about. Thank God earnings growth is holding up. I think that's what's keeping the S&P 500 from being down worse than 7% because almost everything else that you could point to seems to be going in the wrong direction. And I want to show you a few things and just get your, your read on the situation. So Brian Westbury at First Trust is talking about the hard numbers. Real GDP growth for the fourth quarter of last year according to Atlanta fed GDP now which is a model they were talking about 5.4% in January. Now it's 0.7%. Um, we've had a bunch of punk labor reports. And private payrolls were up 33,000 per month. Jerome Powell said the other day, there's been effectively zero job creation so far this year. And Westbury points out, if you pull out healthcare and social assistance, private payrolls are actually down. Manufacturing jobs are down. Retail jobs are down. The inflation numbers are not good either. He calls them bizarre. Producer prices rose 0.7% in February, are up 3.5% over a year ago. But the increases are on the services side, not the good side, which is actually not the thing that people were worried about. And yet here we are. Prices for Goods in the PPI are up 2.5% over the last year. Services are up 3.8%. So that's strange. There's some weird stuff going on with consumer prices as well. It's very tough to look at this through the lens of a normal economy because so much of this has never actually normalized from the pandemic. But when you put those things together, it's just not a pretty picture. On the hard data side, what are your thoughts?

[B]

The thing that drives the economy is consumer spending. And consumer spending is obviously going to be impacted in a bad way by higher gas prices. The good news is the stock market doesn't trade off gdp. But the bad news is the GDP is contracting, I think, because the consumer is probably weakening. And it is a middle. It is a muddied picture, as it almost always is. There's some good, there are some bad. Retail sales are not growing. Consumer spending is pretty sluggish. So I would describe the economy as fine. It's not like the defaults are picking up in a meaningful way. The labor market's soft. Not a lot of hires, not a lot of fires. Initial jobless claims look totally fine. Continuing claims look totally fine. So it's. It's middle, I would say, like it's nothing. It's not. It's not great at all, obviously. And it's. I wouldn't say it's terrible. It's somewhere in between.

[A]

I think it's terrible because I don't think of the economy as being a stat in a static condition. Good or bad, you think what's stable? I think the economy is terrible because I always think about the economy as something that's on its way in one direction or the other, and the direction that it's on its way to is the wrong direction. So that's why I would say that's why I personally would say this economic situation actually is terrible.

[B]

I don't think. You know, terrible. You don't know what that word means.

[A]

I'm not saying it's the worst economy I've ever seen. I just think it's a terrible economy. We have had interest rate cuts. We now have fiscal stimulus in the form of the tax bill that was passed last year, which takes effect this year. We have this AI boom that is absolutely creating economic activity. And you add all those things up and they're not really helping most people.

[B]

Well, it's creating economic anxiety is what it's created.

[A]

I mean, look, I. I think it's not great. And you, you said there's no problems with credit yet or what did you say? How did you phrase it?

[B]

I said credit quality is fine, more or less. I mean, there are pockets of problems.

[A]

Yeah, the pockets of problems are getting bigger. This is Peter Bockva Today shifting gears to private credit. I'm sure you all saw the Apollo news. Keeping its withdrawal rate at 5%, which is the right thing to do rather than satisfy the 11% requested. The fact that 11% is being requested is the problem. Also the Moody's downgrade of the FSKR Capital Corp. Private credit fund to junk status. Yes, I do believe some credit issues are surfacing, but will instead state here again the unhealthy relationship between private credit and some in retail with the differing time horizons and views on liquidity. Either way, an increase in redemptions and a rise in default rates or will lead to a higher cost of capital for borrowers and a tightening of lender lending standards. So that's what I mean. It's not like in. It's not in the. In the garbage yet, but that's the direction. So when I say terrible, these are the things that you don't want to see. And here's Peter posted a chart of the LSTA leveraged Loan Index. I'm not sure the. I think on the Y axis he's indexed to 100. Yeah, I think he's indexing to 100. But again, we're. We're talking at. Not the absolute level. We're talking about directionally. This is not the right direction. Is not what we want to say.

[B]

Yeah, financial and financial conditions are tightening and the cost of capital is going up. Interest rates going up meaningfully is not really what you want to see. So I'm not here to say that the economy is good by any means. I think terrible is a bit of a stretch. In fact, I know it is. Here's what I will give you though. It is remarkable to me, and I know we're about to talk about it, that the economy has done even fine considering that the housing market, a third of the economy is absolutely frozen. Frozen solid.

[A]

Ass.

[B]

Ass.

[A]

The housing market is just absolute ass. Look, chart on. Okay, there's a lot going on here. The top line is the 30 year mortgage rate, which drives a lot of. Obviously if you have a low fire low hire environment, you're not seeing huge dislocations in the labor market. The only other thing that would have as big of an impact would be what the cost to borrow to buy a home is. And it's stuck above 6%. It almost fell below for like 10 seconds. But this is now multiple years of a 6% plus 30 year mortgage rate. Here's in the next pane, US existing home inventory. And you can see a pattern of higher lows. Inventories are starting to rise. I wouldn't say that on the surface that's definitely a negative because I think for a lot of reasons we've been under housed and we've wanted to see that comeback. But I think it's more indicative not of a lot of building, but just a lot of not buying. The next, yeah, U.S. housing starts, okay, we're doing some more building. It's not, it's not shooting the lights out, but not, not the worst thing. The bottom pain though really for me is the story. This is US existing home sales. And you can see we are at what looks to be 10 year lows, 4 million US existing home sales. These, this is year over year data they're showing you. When you look at the trend and to Michael's point, since the middle, since let's, let's call it 2023, it's now almost the middle of 2026. It's basically three years of a flatlining US existing home sale. And that wears on people because people that want to sell aren't, aren't getting the amount of interest from buyers that they hope they get. Prices are affected, et cetera, et cetera. Let me show you a couple. One other thing.

[B]

Wait, hold on. Before I do that, I'll do you one, I'll do you one worse. If you look at US pending home sales. So combining existing and new, all time low, all time low, nothing is happening now.

[A]

What, why is that? Why, why does that matter? Here's where I want to go. So I said the economy's terrible. This is the most important part of the economy for most Americans. Outside of whether or not they have a job, this like, like 1, 2 and 3 is, do I have a job? Okay, great, number one. Number two, what is the situation with whether or not I can buy a house, sell a house? What's my home situation? And then number three probably has something to do with a car. And that's it. It's not the stock market. It's not bitcoin. This is not the things that really matter to most people. Roughly 65 to 70% of Americans own a home. Housing accounts for 25 to 30% of total household assets. For the median family, it could be 70% of their net worth. And that creates maximum sensitivity in the consumer economy, the real economy, to the prices of houses, the availability of houses, what they're worth, whether or not they could be sold. And that is the real wealth effect. Away from the top of the K. A 10% move in home prices produces a meaningful change in perceived wealth for most households. A 10% move in stocks doesn't really change all that much on the ground for, for the economy. And here is the case. Shiller 20 home price index. So these are the 20 biggest housing markets in the United States, averaged. And what you can see here is we may be going negative in, in home prices on a year over year basis. Home prices are up 1.4% year over year, which obviously is not the end of the world.

[B]

So what, dude, this is not the story. The story is the chart that shows the number of home buyers. This is. Danny, this is the problem. This is the whole kit and caboodle, so to speak. There are. This is the opposite of the pandemic. When you listed a house, you sold the house in 20 minutes. Best and final, who's going to one up it right now? There are. So the ratio of sellers to buyers is in a historic imbalance. And the.

[A]

It's almost 2 to 1. For the people listening, it's. It's 2 million versus 1.3 million buyers.

[B]

So the big problem, I mean, this is you're looking at it, but it's that home prices aren't budging. They're not coming down, and they probably will, and they definitely have to. And you combine that with the fact that mortgage rates are going in the wrong direction, it's really ugly, and it's not getting better.

[A]

So Redfin says there were 630,000 more sellers than buyers in February.

[B]

Yeah, that's 40 gross.

[A]

46.3% more sellers than buyers. That is the largest gap since Redfin began tracking this in 2013. And a huge jump from this time last year when there were 29% more sellers than buyers. And we didn't think that was great. This is way worse. And it's, it's, it's seasonally adjusted, which means this is, this is not just about, oh, it's March, wait till May. It's a, it's a bigger story. There are 2 million people selling a house right now and just not enough, not enough interest in buying. One other thing. One of the big home builders, Lennar, in order to maintain sales in the current environment, they spent an average of 14% on the final sales price on incentives in the first quarter of this year, which is back to 2010 levels. They had to do this shit after the housing crisis. So in other words, a $450,000 home sold with a 14% incentive rate translates to Lennar handing over $63,000 to the buyer in the form of incentives. And this is. Here's a chart. What you're looking at is Lennar's sales incentives on home deliveries as a percentage of the revenue of, of that home. And you can see this 14% level is completely abnormal. Way elevated versus our experience in the. No. In the last 10 years. And, and obviously they can't keep doing. You can do that to get through a weak season. You can't just do that forever.

[B]

So needless to say, the stock got. The stock got whacked hard. It's in a 50% drawdown.

[A]

They whacked it off, Michael, big time.

[B]

And it's obviously not just Lennar. You look at Py doctor, all of the home building suppliers. I said this to Ben today in the pod. A great example of how difficult individual stock picking is. Since April 2021, there have been $9 trillion worth of cumulative home sales. Actually, 9 trillion. You can only imagine how much of that flowed through to Home Depot's bottom line. Tens of billions of dollars. Literally.

[A]

Oh, yeah.

[B]

The stock is flat since then.

[A]

Yeah. So. Right. So what does it take for that thing to go up? What's. What's this collection of charts you have here?

[B]

So just tying a bow on this. Where are we in the economy? Jobless claims are strong. Continuing claims are sort of elevated. Red Book sales are song. Strong travel. We'll talk about that later. Strong card spending. We know it's K shaped. Bankruptcies are rising. Not great. Business formation is surgery. We don't speak about that often, but maybe we'll do that one week.

[A]

Bank loan desperation.

[B]

Well, I don't know about that. There's. There's a lot of technology that's embedded in that. It's never been easier. But anyway, it is a mixed economy for sure. And if I'd say is it getting better, is it getting worse? I obviously it's getting worse.

[A]

Hence terrible.

[B]

Not the same thing. All right, let's do this. We're going to talk about the retail trader washout. And I'll open the story by sharing this. Citadel securities nets record $12 billion trading hall in 2025. Up 25% from the previous full year.

[A]

Oh my God.

[B]

And you could think of the Citadel as the rake. They are the market maker. Every time you buy an option or sell an option or this or that, they're just scraping pennies every day. A lot of pennies. So they absolutely feasted on retail activity which is now 25 of the market. Obviously it's pulled back since. So some charts from Gungeon that showed that retail traders have. Have retreated. All right. We're looking at a chart of retail volumes. And the chart shows the retail as a percentage of total single stock volumes over a five day period. And it hit a fever pitch, fever peak, I should say a crescendo if you will of 15% and has cooled off.

[A]

When was that? December.

[B]

December.

[A]

Yeah. And this is like off, like literally off a cliff. But I'm trying to figure out does that happen in a lot of January's? I'm just looking back at the chart and I'm trying to see.

[B]

I don't think this is a seasonal thing. I think it's a stock market thing. The stock market sucks and they're getting burned. Get to that more in a second. Zero DTE options. So options that expire in 25 minutes after you buy them are near a one year low as a share of total S and P contracts. And I think this is.

[A]

That's the gambler. That's the gamblers running out. Running out of money after five or six trades went against them. It's just not fun anymore.

[B]

It's not fun.

[A]

That's what, that's the reality. And, and I get it. The dispersion in the market, the rotations, the fact that some of the most popular stocks, not just amongst retail but like period are among the biggest losers this year. Stocks that no one's ever heard of or leading the market like it's, it's not a retail market. You know. Two of the biggest stealth winners are in the market today.

[B]

And Disc and Sienna, like throw those out.

[A]

Those are fun at. And T and Verizon.

[B]

Right not fun.

[A]

No. No retail investor is trading that shit.

[B]

That's Jenny Harrington. Credit to her. Yeah.

[A]

And Jenny's no fun. No, I'm just kidding.

[B]

All right, so Goldman says Thursday saw the most selling from long only investors across their trading floor since they began tracking in 2022. And of course the lack of activity from retail investors is whacking off Robinhood in a real way. The stock is down 54 from its eyes.

[A]

I mean this. So this thing is, this thing is trading like, like they had horrible news. I don't, I don't think Robinhood has had horrible news. I just.

[B]

Well, they did, they did. It's. So options are the number one money maker.

[A]

Yeah. Crypto number two.

[B]

Crypto number two. And the, the buy. The dip, the dip keeps dipping. So it's. Listen, these people, these traders can come back in a blink. So I'm not, I'm not in any way, shape or form suggesting that they're gone forever, but a lot of the things that kept them coming back obviously is just not working.

[A]

What do you mean? These people. You're talking about my Gen Z friends. They'll be back. They'll be bad and they'll come back smarter.

[B]

Of course they will.

[A]

I think 2024 and 2025 were sort of toxic environments in that they gave people, or 23,2 for that matter. I basically think we had a three year period of time that gave people a false sense of ability and the dips were bought quickly. The glamour stocks led the market. There's a lot of intuitive stuff going on like AI is a hot theme. Therefore buy all these AI stocks and they went up, yet you had things like Oracle doubling. Like, I just think it was an environment that lent itself to like retail, retail alpha, if that makes sense.

[B]

Like it does make sense. The retail trader from 23 to 25 kicked the shit out of professionals, just.

[A]

They did, yeah. And now this. Right, and now this year you, you just have like stocks that the retail trader is not interested in or aware of or leading the market.

[B]

They're not buying energy stocks and industrials, they're just not, they haven't heard of these names.

[A]

Right? They've never been in a market environment where these names led. I think industrials have the, I think industrials as a sector have the most stocks that are still up or something like that. People, this is, these are not Robinhood stocks. These are companies that make boilers and, and, and fences. Like these are, they just, they don't, they don't rise to the, the level of awareness for the Gen Z investor, you know what?

[B]

Stock is rightly getting whacked in a big way and this goes to the hurting consumer because this is quite literally the first thing that you stop doing. Door dash. Door dash is in a 45% drop down.

[A]

Yeah. When you're. When the first thing to go. That's right. When the cost to fill your tank goes up 30% in a month.

[B]

Now, dude, that's. You get off your cutting back and you find that food.

[A]

That's right. Getting your makes Once you. Why don't you make a grilled cheese. Get off your ass and cook something. All right. I am now at the point where I'm reading a Halo article every day. Some days, 3, 5. I can't even keep track.

[B]

Bloomberg has a Halo section on their website.

[A]

I'm going to sue everybody. I don't know what else to do.

[B]

You just be flattered, that's all. So you can.

[A]

I'm super flattered and litigious and I'm not even asking for money. I just want people to be like, downtown. Josh Brown made this up, popularized it, coined it, and we're using it as the premise for yet another research report. Yet another article belongs.

[B]

It's in the public domain. You did a public service.

[A]

But I want something, so I'm not asking for a lot.

[B]

I just want something to be like, you want credit. You keep asking what you got it. You have the credit. Nobody doesn't know that it's yours.

[A]

I did think this was a good article. I emailed the reporter. Don't you worry. I was like, hey, you know who I am? It's my shit you're writing about my shit. This is Bloomberg. Private capital firms are starting to swap software systems for hard hats as the AI boom forces the industry into a quick rethink of its priorities. Blackstone, Bain and Brookfield have all been talking of an increased focus on heavy assets with low obsolescence. This so called Halo trade is targeting makers of everything from ship engines to conveyor belts that are considered less likely to be made extinct by AI. And then they got a quote from Jonathan Gray at Blackstone about it. And then they said it's also in Europe and it's global. Halo is everywhere.

[B]

Did you ask, did you ask where that chart came from? They showed a chart in the, in the article that shows the, that counts the number of mentions of the word Halo and it goes back several years. I don't understand what.

[A]

No, like it says, it's. It says data based on prepared remarks and management Answers. No way. No way.

[B]

No.

[A]

No way. You can't tell me. On 200 conference calls in 2021, CEOs said the word Halo.

[B]

It says, literally mentioned Halo in transcripts uploaded to Bloomberg terminal. Nobody said the word halo unless it was by accident in 2021.

[A]

You know what this is like? You know the movie where the guy wakes. He's a singer songwriter. He wakes up in a world where nobody knows the Beatles ever existed.

[B]

Yes.

[A]

And he. And he becomes the biggest star in the world because he likes. He starts recording. I want to hold your hand and. And he becomes the biggest. Like. What do you mean? Like, did I just wake up in a world where people were using this term that I invented two months ago in 2021? What is. What is this chart? What. What are these. What are these people trying to do to me?

[B]

I guess you actually steal it from somebody else. That would be.

[A]

I'll kill you. I'll take my. My tire thumper and I'll put an end to you. All right, all right, I'll put it. Put the chart up. Let's do the chart.

[B]

I think this is kind of interesting.

[A]

This looks good. You getting long here?

[B]

No, I'm not. But for all the hemming and hawing, the thing hasn't. The thing. Listen, what's.

[A]

What's the. What's the nominal. What's the nominal yield right now?

[B]

It's March 22nd. It's March 24th. This thing has obviously puked. This is the pub, by the way. This is an ETF of the publicly liquid BDCs, and it's gone sideways since February 3rd.

[A]

Yo, I am.

[B]

I am not. I am not calling a bottom. I'm not. But here's what I want to say about these things.

[A]

Where did it come from? At 17, it went to 12, and it was. At 17, it was probably yielding 8%. What is it yielding now? 13. Not that they're gonna pay any of that out.

[B]

You know how we say all the time that news follows price if the stocks aren't going a certain direction, like wherever the stocks are going, that's. That's the narrative that is written about it.

[A]

Usually.

[B]

Yeah, almost always. Sometimes. Sometimes there are obvious.

[A]

There are events that change. Yeah, yeah, I'm with you on that.

[B]

This is really interesting because I. I'm not faulting entirely the media for writing about this. How could they not? It's juicy, it's salacious. The asset class has. Has 10x. It's transparent. It's high fees. Like, they should be covering it, but and also if they didn't, or if they stopped, and I know that's not their job, the prices would not be doing this. Or maybe not the prices, but like, it's really interesting for all the heming and h. And we're going to continue to cover it. A bad year for the. The private BDCs. And these are public. Like, what does a bad year look like for cliff water? Because 2008 was down 6% for the index. So is a bad year down 2%? That'd be really bad. It's just kind of hilarious that we're spending this much time as we should. And we will. And yet the context is this thing could fall 2% and that would be really, really, really bad.

[A]

I. I guess I'm not following what you mean. It felt it already fell. These are the potentially more than 2%.

[B]

These are the public.

[A]

Oh, you're talking about the private ones.

[B]

Yeah.

[A]

Well, I think the story here is not about the price of the public BDCs or the. Or the private BDCs. I think the story is we have a situation where ordinary Muppet money was herded into 20 or 30 different products. Some public, some private. Unfortunately, in the case of the private BDCs, the entryway is the size of a football field and the exit is. Is the size of a phone booth. And everybody wants out at the same time because they think if they don't get out now, the prices will be worse and maybe even if there are advisors in the mix, which of course there are the reputational risk as well. And that's really the story. And I don't know that I know the people that cover this professionally and are investors. They're focused on the prices and the values and the navigation and the discounts. And I get that. I'm saying, like, for the media, the story is about, oh my God, they did it again. They got all these regular people to buy all these bizarre instruments and now it's going bad. And why they really love this is every single person that runs one of these private equity firms also owns a professional sports team.

[B]

Yeah.

[A]

They are Monopoly men. They are a lot of billionaires with capital Bs. And the media just. They love it. It's like catnip.

[B]

So they love it. It's a lot of. I knew this is bullshit. So throw this chart up. This is the. This is the NAV of Aries. Publicly traded. You could buy tomorrow. Not saying you should. This is a chart of the nav. So not the price. Okay.

[A]

The net asset value of all the assets.

[B]

Right.

[A]

Based on their own. Based on their own calculations. It needs to be said.

[B]

So. So it's worse than that. It's based on calculations of a third party that they paid to come up with the nav.

[A]

Yeah, I mean, so.

[B]

So show the next chart. So that's the. That's the public one. And this is the private one. And this is the historical performance of Apollo's debt solution bdc.

[A]

Right. This doesn't trade. This does not trade.

[B]

This does not trade.

[A]

They tell you what it's worth every time they put out a report.

[B]

This line of up and to the right with zero interruptions. And there has been some shit between. Between January 2022 and now. Now went down a little bit. Actually went down more than a little bit. But since then, straight up to the right. This is the part that the media rightfully says. Wait a minute. Yeah, hold on. You're telling investors that you've got 600 basis points above SOFR, no volatility.

[A]

Yeah.

[B]

Up until the right only always semi liquidity. All right, Okay. I want to use Apollo again. Look at this portfolio. This is for their private bdc. They don't have a public one. This is for Apollo's private bdc. Show the portfolio overview. There are. Show the industry diversification. John, do we not have that? Oh, I put this in late. My bad. All right, anyway, there are. This is 100% first lien, 96% floating rate. And unlike B CRED, who. I said 26% of the portfolio is. Is software related.

[A]

Oh yeah, with not what?

[B]

Apollo? With Apollo, it's 12%. There we go.

[A]

We have it.

[B]

Okay, so look at this industry diversification. It's 12% software, 7% healthcare providers and services, 6% financial services.

[A]

Look how many slices there are.

[B]

All right, so my point is. Dude, this is not gonna blow up. And I don't know anything. Okay? I don't. Maybe I look like a giant jackass, but these are not dumb people. In fact, they're the opposite.

[A]

Yeah, but this is the problem. But this is the problem. You're referencing Apollo. They are the best in the world at what they do. There's 50 other companies in the same space that are not as good at Apollo. Don't have the pedigree, don't have the track record, don't have the amount of analysts covering, you know, all of these credits that are in these portfolio. Like you're you. You can't show the gold standard and draw just like you wouldn't show the worst player in the industry. And say, this is what it all.

[B]

So the point is, they are getting swept up in this just like everybody else. There's no reason why they would be immune. The stock is down 40%.

[A]

Yeah.

[B]

And historic default rates, whatever they are. Like. I guess my point is this. This stock is trading like their loans are going to absolutely get cremated. And maybe they will. Maybe.

[A]

I don't think so. I don't think so. I don't think the Stock is down 40% because people think Apollo's whole portfolio of loans is going to blow up. I think you're wrong. I think the Stock is down 40% because it went up 100% on the expectation that Apollo was going to be able to grow 20% a year for the next five years as it onboarded 20 million retail investors. And that dream has gone up in smoke. And with it, the multiple associated with that sort of growth. And what you're seeing is give back from the gains. This was one of the big winners over the last few years as private equity and private credit came into their own on Wall Street. This stock went up huge. So did Blackstone. So they all did. But this one went up a lot. And what you're seeing now is not a referendum on the credit quality of their loan portfolio. No way. This down way more. What's actually going on is people are saying, oh, shit, Worst fundraising environment ever coming up for the next one to three years while they wait for us all to forget about the redemptions and the asset gating. And that's the reality. And people could look at it, oh, it's cheap. Yeah. Probably is. It's also going to be left for dead. I don't think people are going to forget so easily.

[B]

I agree.

[A]

I don't.

[B]

All right. I.

[A]

That's what. That's what you're. That's what you're witnessing here.

[B]

I completely agree. Everything you just said is correct.

[A]

The.

[B]

The difference.

[A]

Really good at this.

[B]

The difference between the BDCs and the interval funds. They look almost identical. The difference is the interval funds have a legal obligation to buy back up to 5% of the shares outstanding on a quarterly basis.

[A]

Yeah.

[B]

And so Cliffwater is the biggest interval fund, and they will be buying back 5% of shares for who knows how long, and who knows how long their credit facilities last. And who knows if they have to offload some of the loans. This is all to be determined. This could blow over. I don't think it's probably. I don't think it's going to. It's going to Be a while. The loans could turn out to be fine and people could settle down, but the private BDCs have no legal obligation. Now, there could be bigger problems if they just say, no, we're just not doing it. We're not giving you guys money back this quarter. It would impair. It's for the betterment of the shareholders. We'll see how this plays out. But it is obviously not going away anytime soon.

[A]

Yeah. And you know, a lot of the apologists for the space and the defenders have said, well, look at B reit. They were in the, you know, they were. They had their turn in the sleeping bag as everybody beat them with bars of soap and batteries and socks. I know it's oddly specific, but I went to a very violent summer camp and they had their time. And then B. REIT eventually was able to say, okay, redemptions are no longer an issue. Call us whatever you want. You could have back because the ship was, was righted. They steadied the ship. They, they lasted, they lived through it. And so a lot of people have said that's what will happen here. And maybe that's true. And I hope so. I just don't know that this is going to go the same way. There's real estate. Real estate, sorry, real estate. A real estate portfolio has a tangible quality to it that a portfolio that is 40% soft. SaaS software just doesn't have.

[B]

Ding, ding, ding. The problem is these companies say, listen, the historic default rate is this and the historic recovery rate is 94 cents on the dollar. We're senior secured. We get paid back. Yeah, the equity will get wiped out. We'll get paid back with what? There's no factories or land or, or inventory. It's software. What are you getting paid back with?

[A]

That's right.

[B]

So a better comp and also not apples to apples is I follow the substack Covenant Light who writes all about this type of stuff. And Apollo was in the middle of it. Remember the energy trade, the unwinded, 2014, 2015. They've been through. Yeah, they've been through that with this. So they survived. Listen, they're going to survive this. I mean, this. Let's not be, you know, ridiculous here, but it is going to be a very slow bleed and where it ends, nobody knows. All right, let's keep it moving. We just did a lot of that.

[A]

I mean, do you want the good news?

[B]

I love good news.

[A]

New opportunities are being created. If you do, if you do not have money at risk now and you were ever interested in Exploring adding private credit to your portfolio you like. Over the next year you're gonna get a crack at I think some distressed valuations in the space and choose your, choose your fund very carefully if this is something that you want to do. Definitely a better entry than two years ago when it looked made off Esque. Just every month it's up. No, I'm not, I can't. Believe me, I won't be the one that gives you the timing of it.

[B]

I only mean, I only mean literally the price have not come down yet. And this is part of the problem is that there are, there is leverage here. And if these companies are tapping their credit facilities at the banks and they can't mark down their loans because guess what, some of their covenants get triggered or tripped by the banks. It's like, wait a minute, you can't, you can't have them with a three times leverage. Like, no, you got to sell. You, we need some money like a margin call.

[A]

So then that's more selling of portfolio holdings, which puts more pressure on the overall asset class.

[B]

But, but it's, it's not great.

[A]

I'm, I'm not saying like rush off the sideline. I'm saying if you were interested in the space, okay, it's about to come your way. You didn't have to chase it.

[B]

Yeah. Let's talk about the stock.

[A]

Not all bad.

[B]

Okay, so software got whacked off again today. I mean that was, that was a baby bounce, dude. So throw this, throw this chart on the screen.

[A]

We did have some bounce to my credit. I didn't believe the bounce on Monday.

[B]

Okay. To my credit we had, we had, we had rotation today, which is good. Financial stopped going down. You like that at least? Well, at least the big bank stopped going down. We had 260 stocks I think were up today. But the NASDAQ was more decliners than advancers.

[A]

Is Microsoft. Does Microsoft go down every day?

[B]

Pretty much. So let's go through some charts. This is igv. It's Salesforce Tire Thumbs, Microsoft.

[A]

This chart, this chart looks like it looked me the wrong way on the subway.

[B]

Just so this thing went from like that candle to 75 and it, you know, it's a baby bounce and it can't even sustain that for a minute. Like not good, not good. Next chart please. I threw two in igv. Here, let's. Okay, perfect. Thank you, John. Microsoft. Are you kidding me?

[A]

I mean it's got like, it looks like the devil character from South Park. Look at the horns at the top.

[B]

It just looks like three. It looks like season.

[A]

How could you buy this?

[B]

Well,

[A]

every candle is redder and longer than the one before.

[B]

I will be buying the absolute snizz out out of Microsoft.

[A]

But not 350 support at 350.

[B]

Maybe. We'll see.

[A]

Well, that was the liberation. That was the liberation day bounce at 3.350was a false breakdown. And then that gap, that gap up is when Trump tacoed.

[B]

I need. I need a down 4% day that closes up 2%. When that happens, I'll buy it. But not before that. Now they're getting to Google.

[A]

Why don't we. Can we. Could we pause on Microsoft? Why not just buy calls? You don't want to be long. This stock, you just want the bounce, right? You see it at 355.

[B]

Just.

[A]

Just buy the 375 calls. Isn't that like a base. That's a bit. It's a base hit. It's a base hit, but you commit very little capital, and it's not like a position in your portfolio.

[B]

Okay, I will report back on that. I like where your head's at. Alphabet, like the secular winner has now broken below previous support. Not great.

[A]

I wrote this up. I wrote this up in best stocks in the market with Sean yesterday. And I basically said this. I hate this chart. Not everything we write is like, go buy this. We said, lay off Alphabet here. It's a no man's land, technically. And we said, apple looks like it's about to break its 200 day. And that might have happened today. So I just, I look at these stocks and I understand what's happening. They're being used as a source of funds.

[B]

Yeah.

[A]

And they're big, and there's a lot of money and there's a lot of liquidity in these stocks. And people want liquidity right now.

[B]

All right.

[A]

And they're just pulling it out.

[B]

Last chart. Chart. Kid made this for me. I wanted him to show me since. Since Software bottom on 20. On 223. What stocks? So there was a lot of balances, but as we can see in the. On the left, a lot of stocks bounced and rolled over. They did not keep their bounce. A lot of stocks did. So here's the stocks that did not bounce. And there's, there's, there's others. But. And these. And these are particularly the stocks that have been in the AI disruptive camp. Okay, So S and P Global, a stock that I bought and sold, rolled over big time. Same thing with crowdstrike. Same thing with Salesforce ServiceNow Workday, Adobe and FICO forgot about it. My God. End of the winter camp.

[A]

We said that. But we said this. We said with those stocks you can't prove a negative. The sellers are basically saying, I know they are in some way disrupted. I don't know the extent. Therefore I'm selling every update until I lower my risk here. The sellers are not saying like what's the valuation? It's a much more existential issue here. And you can't none of those servicenow can't come out and say, all right, we've proved it. Eureka. Here are the results from the lab. We are 100% undisruptible. Nobody could say it.

[B]

We. Knowing what little I know, I do believe that this is overblown. I do believe that the incumbents are ultimately going to be the biggest beneficiaries. Totally, totally erroneous, depending on your time frame. Prove it right now. Prove it right now. The sellers have. The sellers are in control, period. Hard stop. That's it. And they might look foolish.

[A]

Some of those stocks have insider buying. Doesn't matter. Nobody cares.

[B]

Yeah, nobody cares. So these are good buy. Well, what's your risk tolerance? How much tolerance pain do you have?

[A]

Blah, blah, blah, blah, blah.

[B]

Okay, stocks that did stick the landing. Dell Expedia, that's a surprise to me. Netflix and even that rolled over pretty hard today. So maybe that didn't into it. Same, same deal. Actually, you know what, A lot of these stocks rolled over today. Palantir Block. So yeah, man, it's hard. The sellers. The sellers are in control right now

[A]

of these names, those, those news clips with the five hour lines at Atlanta Airport and, and LaGuardia. Could you imagine? But those are like advertisements for being long Expedia because look at what, look at what people are willing to endure in addition to the higher jet fuel price, raising ticket prices, people are standing in LaGuardia for five hours just to get somewhere. That's super Polish. Expedia in an alternate universe. All right, we're doing this college grad unemployment thing. I'm telling you, I think I'm onto something. I think this is going to be a politically explosive issue come June when yet another wave of college graduates leaves the commencement ceremony, spends 30 days hunting for a job, looks at mom and dad and goes, I don't know what you want me to do. And I know that this is an acute thing to me because I'm in this. And so I know part of this is like me projecting this onto everyone. But it's too big to ignore. It's too big to ignore. Copilot Tools LLM Tools. These things are carrying out the exact functions that had formerly been the province of the college aged college grad Excel monkey for decades. And hiring managers at companies are being told, stop. Don't bring on. How many peak college grads do we normally hire? 60. Okay, hire 10. Let's see what happens. Hire 10. Give the older people more AI. Let's see what happens. Axios wrote about this today. Chart on what you're looking at here is 1,000 U.S. adults. The gold line is non college grads and the pink line is college grads. And they're asking people what they think. Is this a good time to find a quality job? And as you can see, in the non college grad camp, things look okay. 44% says yes it is. 27% college grads say it is a good time to find a job, which means almost three quarters say that it's not. Workers with higher levels of formal education are way less optimistic than those with less school. And just to like put a bow on this, that is the widest gap on record going back to 2001. So it always was the case that people with college degrees were more confident about whether or not it was a good time to get a job than people without college degrees. And that is now flipped and the gap is exploding. The unemployment rate for college grads is now 6%. For the overall economy, it's like 4.2 or 4.3. And then they took a look at. Indeed, there were 29% fewer job listings for software developers in March than there were pre pandemic. That is massive industry shrinking. 27% fewer marketing jobs, 36% fewer listings for media and communications roles. These are college education jobs and they are literally vanishing right before your eyes. We made two charts. I know Sean and Matt worked on these. I want to put these up. This is a beaut. This is unemployment rates for recent graduates versus all workers. And I want you to pay attention, Michael and audience to the red. This has been a trend that's been enforced since the pandemic and has gone into hyperdrive since the advent of ChatGPT. And when the bars on the bottom are in the red, that is a higher unemployment for recent grads versus all workers our entire lives. This goes back to 1990. We have never been in an environment where it was harder for a college educated kid to get a job than for a non educated kid to get a job our entire lives until the last Five years and now it's picking up steam. Let's do this. Unemployment by major. Now don't laugh at people that got an anthropology degree. You ain't so, you ain't so brilliant yourself because look what's right below that. Computer engineering, 7.8% unemployment rate. Computer engineer, let me repeat. Computer engineering, 8% unemployment. Computer science, 7% unemployment. Remember 10 years ago where you laughed at people and said learn to code. Those are those people. 8% unemployment for the people that quote, learn to code. So you could laugh at the art history people and the environmental studies people. And, and, and you can do that if you want. You're going to laugh at a computer science major. The 10 majors with the lowest unemployment, Special ed, miscellaneous education, elementary education. So that's tax dollars, guys. Agriculture, foreign language, geography, engineering, social services, nursing, and secondary education. So plenty of employment still in government supported types of jobs and in education and not much else. So we have a lot of people educating people who are going to come out of school and not have anything to do. And it looks like it's getting worse. And I do think this will become a political issue and the AI thing is going to be under the microscope like never before. And you're gonna see, I don't know if it's the Republicans or the Democrats, but somebody's gonna push back on all this and ask the question out loud, why are we allowing this? And I'm not telling people how to feel about the issue, but I really do think it's going to come to a head this summer. What do you think?

[B]

I agree with everything you said. I think this is terrible. I'm surprised that it's only 5.6% or 6 point whatever it is. I would have thought it would be higher. I don't know how this manifests itself politically. I don't know what the solutions are.

[A]

I think that number will be, I think that number will be 6 to 7% by the time this next wave of college grads, they don't graduate until May.

[B]

Yeah. Who's hiring us? Who's hiring these kids?

[A]

I mean, many of them will get hired, but less than last year, certainly less than the year before. And again, it's not that there are no jobs. It's not the labor market is crashing, it's a slow to hire environment because people are like, well, let's just see, let's wait and see where all this AI that we're spending all this money on, let's see what it can really do before we just add the requisite body count that we've been headcount. I should say that we've been accustomed to adding each year, like almost on, on, on automatic. Let's not be automatic. Let's. Let's hang tight. And you're seeing that sentiment multiplied by, I don't know, 8 million businesses large and small. And this is what the, the net result is. And people are not going to be happy.

[B]

Here's what, here's one area that I could see hiring continue at the pace that it was historically. Heavily regulated companies, banks, for example, that need to carry favor in Washington. They say, you hired 2,000 kids last year. You're not hiring one. Less than 2,000 kids this year. Something like that. I know that's a, that's a Band aid.

[A]

JP Morgan spent the last three years telling people that they're basically automating their own jobs. And then, and then, you know, it's not even about laying people off. It's the not hiring.

[B]

Yeah.

[A]

And that's why I think the labor statistics that we're all citing to say that the economy is pretty good. It's holding up, it's hanging in there. It's misleading. It's older people at the top of the income scale who just aren't worth replacing because the AI is not skilled. Those people are fine young people who now not only can't afford to buy a house, also can't afford to fill their car's gas tank and have no idea where they're going to get hired. It almost doesn't matter what they have a degree in.

[B]

Yeah.

[A]

This is, I'm telling you, it's terrible.

[B]

And I mean, I agree.

[A]

I shouldn't be this hard. This shouldn't be this hard.

[B]

This is the, this is, I think, I think the biggest, like Hume humanitarian kind of crisis is strong word, but this is the big one. This is really good.

[A]

If anyone is still out there and hasn't killed themselves yet, let's do make the case.

[B]

All right. So you mentioned that, that what's going on in the airport is, is a great case for Expedia. I actually made the case last year. I don't remember this. In September, I made the case for clear. And my case was not scientific. It was just. I heard on Patrick o' Shaughnessy's podcast and I remember she said I am a animal and I want to bet on her. And I. And I never did. And, and the stock is absolutely on fire for reasons that are. For reasons that are very, very obvious.

[A]

Why did you buy? You just, you just Forgot to buy it.

[B]

I just kind of forgot about it. John. Saw the stock price up there.

[A]

Yeah.

[B]

So massive buying, massive breakout, huge volume.

[A]

When did you. When did you tell us about this?

[B]

September.

[A]

Holy. It was like 30 bucks.

[B]

Yeah. So I, you know, probably not the best entrance today, but if it has a low volume pullback, I probably still won't buy.

[A]

This is just clear at the airport. Let's just clear the eye scare. That's it. So I'm sure people don't cancel this. They get a free. They get a free trial, and then they start paying.

[B]

The retention ratio is actually less. Less good than I thought. It's like 92%. It's not bad. They actually stopped reporting it, which is a little bit concerning. But ironically, I'm sure that people that pay for Clear were losing their goddamn minds, because that was probably no better than tsa. I mean, I'm sure it was a little bit better, but I bet you the clear line at LaGuardia was at the exit at this point. So the company is working, the margins are improving, the cash flow is accelerating. But what an unbelievable commercial this experience has been for.

[A]

Yes. Are those people, like, speed running the security line, the people that have cleared?

[B]

Probably not, because I better, but it's probably better. But it's probably terrible because I've been in many clears around the country where there's just too many people. There's nothing they could do about it. I know you get more monitors, but I was at Miami two weeks ago, and I went straight through with Clear. It was wonderful. So I don't know.

[A]

But don't worry. They sent ice to the airport to help with the TSA lines. And if the. If the militias are not successful at speeding things up, they will send in UFC fighters, I'm told is the next wave of source. I think. I feel like it'll be fine. All right, let's do mystery chart, and then we'll get out of here. My mystery chart, please pop it up for us. All right. This is a sector of stocks. It's global, and probably the only one that looks like this right now.

[B]

Yeah.

[A]

And I would love to hear what you think it is.

[B]

Well, these have to be energy stocks.

[A]

Final answer?

[B]

No. What am I looking at here?

[A]

You're looking at stock charts.

[B]

Oh, Individual stocks.

[A]

They're all different stocks. And I told you, it's international. There it. Some of them traded different currencies, so. Sean, like, normalized it.

[B]

Final answer?

[A]

Yeah, okay. You'd be wrong, sir. Pop it.

[B]

Oh, okay.

[A]

Oh, the. Oh, the Only other sector that's up.

[B]

Yep, that's.

[A]

You made a good guess. You probably made the guess that I would have made because I don't know what these charts look like. Chart back on, please. This is SK, Hynix, Samsung, SanDisk, Micron, Western, Digital.

[B]

Western. Western.

[A]

I'm sorry, my bad. These. These stocks are just. I don't know even know what to say. This is this year's bubble. It'll. It'll get real ugly for the people that buy it today, I assume. Although maybe I would have said that a week ago. And they were all up another 15%.

[B]

So just sell before everybody else does.

[A]

Sell. Right. Sell before everyone else does. All right. Great job with the chart, Sean and John. Thank you, guys. All right. Hey, everybody. Did you know tomorrow is Wednesday, which means an all new animal spirits podcast with Michael and Ben for the YouTubers right here on our compound YouTube channel. Speaking Spotify, Apple, anywhere find podcasts are played. We'll have an all new Ask the Compound after that. That'll be live. Duncan and Ben Carlson are taking your questions. So get those questions into us. What is the email address? Guys, I think it's Ask. Ask the compound showmail.com. ask the compound showmail.com if you want to have your question featured by Ben and Duncan and their special guests on Friday, we'll have an all new Compounded friends. Can't wait to see you then. Thank you guys for listening. God bless. Good night.

[C]

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