It's Like Free Money

Summary

The Compound and Friends: "It's Like Free Money"

Release Date: December 12, 2025
Featured Guests: Josh Brown, Michael Batnick (The Compound), Joe Weisenthal, Tracy Alloway (Odd Lots/Bloomberg)

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Episode Overview

This rich episode brings together the hosts of The Compound and Friends (Josh Brown and Michael Batnick) and the "royalty" of financial podcasting, Joe Weisenthal and Tracy Alloway of Bloomberg’s Odd Lots. The group dives into the state and future of markets, AI's impact on investing and business, trends in podcasting, the transformation of New York's economic life, the mechanics and psychology of prediction markets, and the shifting definitions of "free money" in the stock market. Underneath the humor and camaraderie, the discussion offers valuable insights into macro trends, financial narratives, and how traditional and new market mechanisms are changing.

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Major Discussion Points & Insights

1. Life in the Office, Post-Pandemic (00:15 - 03:42)

• Hybrid return: Odd Lots’ Tracy joins in-person 3-4 days/week; in-person work trends are Tuesday-Thursday.
• NYC's resilience: Despite recession fears, the city is bustling—crowded trains, packed restaurants.
• Quote (Joe Weisenthal at 01:03):

  "If there is a recession, you will not see any evidence of it in New York City right now."

2. Behind Podcasting: Production & Scheduling (03:35 - 05:15)

• Production insights: Odd Lots and The Compound discuss challenges with advance booking vs. flexible content needs.
• Evergreen vs news-driven: Joe and Tracy often bank evergreen episodes but react fast when news hits.

3. Market All-Time Highs & "Big Numbers" Fatigue (05:24 - 07:47)

• Markets are at all-time highs.
• The Dow approaches 50,000, but it’s met with apathy, demonstrating how quickly investors recalibrate to larger numbers.
• Quote (Michael Batnick at 06:35):

  "We're not talking about Dow 50,000 yet. 2.7% away."

4. Changing Market Narratives: From AI to Crypto (13:12 - 19:19)

• Oracle’s stock crash: The company had its worst day since 2002, but broader markets shrugged it off—cracks in the "AI stocks hold up everything" story.
• Sentiment shift: The group traces recent turning points, notably Sam Altman's shaky podcast appearance, which led to skepticism about AI business models—as previously happened with crypto after SBF’s infamous Odd Lots episode.
• Quote (Michael Batnick at 15:21):

  "[SBF] effectively explained his Ponzi scheme... you could literally draw maybe not a price line, but a sentiment line the day before you aired that episode and the day after—and the day after started a new chapter in the crypto market."

5. AI, Productivity, and Ubiquity (20:15 - 24:51)

• AI as a catch-all narrative: Even old-line companies like insurance giant The Hartford are rallying on AI buzz; every management team claims an AI angle.
• Broad reach: The "AI" story is so widespread it colors sectors like banking and insurance, not just big tech.
• Profitability focus: Sentiment has shifted from AI hype ("vibes") to demanding proof of actual revenue.

6. Pop Culture, Media & Market Psychology (24:39 - 27:03)

• Group discusses Time Magazine’s "Person of the Year" cover being a group of AI architects, and the history of Time’s covers cursing stock prices (Bezos, Musk).
• Quote (Joe Weisenthal at 25:18):

  "...that might have been one of the most vindic--given where media [is]. It was about the dawn of social media... Might have been 2006... Babe Ruth calling his shot..."

7. Federal Reserve Actions and Liquidity (28:41 - 34:06)

• Recent Fed moves: Dovish cut despite inflation still high and growth robust; multiple dissents among Fed presidents.
• Liquidity management: Tracy notes the Fed's active liquidity approach, targeting specific events like the April tax date.
• Quote (Joe Weisenthal at 32:44):

  "The opening paragraph of the statement said inflation has risen since our last meeting... The stock market's at all time highs, inflation is above target... It's rising and they're still cutting. So by implication that is extremely [dovish]."

8. AI's Real Impact on Jobs and Economy (34:37 - 38:59)

• Productivity gains: Tight labor markets pushed companies to adopt tech and AI, boosting productivity, but the real effects on headcount are still uncertain.
• Job loss or stagnation: Companies may not shed workers immediately, but new jobs may not get created at historic rates (see recent-graduate job struggles).
• Cyclical hiring and firing: The pandemic triggered extreme hiring/firing cycles; a new catch-up hiring cycle may come if AI productivity gains are overestimated.

9. Global Yields, Deglobalization, and New "Growth" Narratives (39:05 - 43:01)

• Rising yields despite cuts: Longer-term government bond yields are up globally, even as rates fall in the US.
• Globalization vs. deglobalization: Both have proven "good for investors"; now, the trend is re-shoring (e.g., European AI/software), boosting local markets.
• Quote (Joe Weisenthal at 40:46):

  "...when you reduce trade, that's anti-productivity... So you have more money coming into a less productive system. I think there's good reason to think that inflation over the medium to long term will just be higher..."

10. Money Market "Bubble" & the Myth of Cash on the Sidelines (44:27 - 45:39)

• Record flows into money market funds (~$8 trillion) while stock markets set records; rates have fallen but cash has not moved.
• They debate whether this is truly "cash on the sidelines" (Josh: "This is absolutely cash that's on the sidelines", 45:28), or a financial riddle (Joe: "I never... established whether that's a myth or not. It's a riddle.", 45:24).

11. Stock Market ‘Rigging,’ HFT, and the Democratization of Access (46:52 - 50:13)

• Gambling vs. investing: Betting apps and prediction markets rise, but are still fundamentally different (no positive bias).
• Legacy US capital markets are still the "fairest, most democratic" in the world; spread costs and manipulation are marginal compared to other countries.
• Quote (Joe Weisenthal at 47:17):

  "...look, are there issues with the stock market? I suppose, but the US, like, real legacy capital markets is probably the fairest, most democratic legitimate market to have ever existed in history."

• HFT outrage and "rigging" complaints are now passé; people care less, and retail trading is more widespread.

12. The Rise and Risks of Prediction Markets (51:59 - 56:30)

• Exploding volumes: Kalshi and others raising huge amounts for "prediction markets" mostly driven by gambling flows.
• Insider risk: No clear protections—in some cases, insiders could use private info to bet.
• Still, institutional use lags; real money and liquidity are concentrated in sports, not financial outcomes.
• Potential: Tokenization and prediction contracts could partly democratize trading in private company equity, blurring the public/private distinction.
• Quote (Michael Batnick at 56:30):

  "I am going to make a prediction you could bet on though. We will see the launch of a prediction market hedge fund."

13. Private vs. Public: The SpaceX and IPO Boom (58:35 - 62:53)

• SpaceX IPO plans surface; expected $1.5T valuation dwarfs previous records.
• Public market appetite: Debate whether there is demand for multi-trillion dollar tech IPOs.
• Impact on Tesla: Would investor enthusiasm split between Elon’s public vehicles?
• Private equity and tokenization: Complex capital stacks make tokenizing real private exposure tricky.
• The trend: Private companies replacing government entities in key services (SpaceX, Starlink, etc.).

14. Macro Strategy & Wall Street Targets: The "10% Free Money" Debate (64:39 - 68:21)

• Chart: Most years, the S&P exceeds even bullish consensus targets; strategists are often not bullish enough.
• Average 2026 Wall Street target is for another 10% gain—remarkably consistent, despite huge macro and market swings.
• Quote (Joe Weisenthal at 68:07):

  "It's insane that... by and large, it's like 10% year after year after year. It's just like, free money..."

15. Podcasting Reflections & Odd Lots’ 'Secret Sauce' (68:31 - 72:57)

• Odd Lots’ longevity ("the Simpsons" of finance podcasts), and the satisfaction of putting unknown experts in front of big audiences.
• Quote (Joe Weisenthal at 69:54):

  "There is literally nothing more satisfying than finding that person no one has heard of and like, oh, that person’s amazing. Like, that is. That’s the dream."

• Rarely do podcasts fail—the bar for guests is high, and the show sometimes chooses not to air episodes if the chemistry isn’t right.

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Notable Quotes & Memorable Moments

• "If there is a recession, you will not see any evidence of it in New York City right now." —Joe Weisenthal [01:03]
• "Stock market doubles all the time." —Michael Batnick [06:50]
• "Every number that we talk about on Wall Street is now probably in the trillions. It’s all trillions from now on.” —Michael Batnick [07:11]
• "What happened on Brad Gerstner’s podcast with Sam Altman... something shifted. Not gradually... he had a horrible podcast appearance... not even on a news network." —Michael Batnick [16:13]
• "AI is so huge right now that it touches literally everything." —Tracy Alloway [20:45]
• "[The Fed statement] said inflation has risen since our last meeting and remains elevated...and they’re still cutting." —Joe Weisenthal [32:44]
• "This idea that in America... 10% year after year after year. It's just like free money." —Joe Weisenthal [68:07]
• "There is literally nothing more satisfying than finding that person no one has heard of and like, oh, that person’s amazing." —Joe Weisenthal [69:54]

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Key Timestamps for Segments

| Topic | Timestamp | |-----------------------------------------------|---------------------| | Podcasting logistics & NYC life | 00:15 – 05:15 | | Market all-time highs, Dow 50k | 05:24 – 07:47 | | Oracle, Market’s reaction to AI stocks | 13:12 – 14:40 | | AI, productivity, and “vibe-driven” stocks | 14:40 – 24:51 | | Time’s Person of the Year, Media & Markets | 24:39 – 27:03 | | Fed actions, liquidity, & market reactions | 28:41 – 34:06 | | AI, hiring/firing, job market dynamics | 34:37 – 38:59 | | Global yields, deglobalization, Europe | 39:05 – 43:01 | | Money market funds, cash on sidelines debate | 44:27 – 45:39 | | Stock market “rigging,” democratization | 46:52 – 50:13 | | Prediction markets, gambling vs investing | 51:59 – 56:30 | | Private vs public markets, SpaceX IPO | 58:35 – 62:53 | | Year-end targets, 10% “free money” debate | 64:39 – 68:21 | | Odd Lots podcasting philosophy | 68:31 – 72:57 |

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Tone & Style

• Conversational: Banter, in-jokes, and plenty of ribbing between longtime friends/colleagues.
• Candid & Humorous: Willingness to poke fun at market narratives, themselves, and even the absurdities of the industry.
• Smart & Analytical: Deep dives amid the laughs—especially around AI, market structure, and future predictions.

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Takeaways for Non-Listeners

• US stock markets remain robust and, surprisingly, appear less dependent on AI/Big Tech than consensus narratives suggest.
• AI is permeating every corporate narrative—sometimes with substance, often with "vibes."
• The Fed is cutting rates despite rising inflation, and money market funds are seeing enormous inflows despite lower yields.
• Prediction and betting markets are booming, but they’re not (yet) rivals to trading equities; risk of insider info is high.
• Podcasting in finance is maturing—with Odd Lots paving the way by focusing on unknown experts and agility in production.
• Longevity in financial content comes from ability to adapt and continually elevate the conversation—rather than simply tracking hot industries or personalities.
• The idea of "10% free money" in US stocks (via passive investing) persists, despite enormous annual uncertainty.

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This summary captures the substance, quotes, humor, and structure of the episode’s wide-ranging discussion—making it approachable and useful to anyone, whether or not they listened.

Transcript

[Josh Brown]

Which are cool, but so that you don't stray from the mic, which you guys.

[Michael Batnick]

So this is going to be. This is going to be amazing.

[Josh Brown]

The sounds are critical.

[Michael Batnick]

Michael and I have a plan for this episode. Okay, we're just going to let you guys do an odd lot. Since we're just going to sit back.

[Joe Weisenthal]

Can we just ask you questions?

[Tracy Alloway]

Yeah, that sounds great. Actually.

[Michael Batnick]

We're just. We're just going to hang and let you guys do what you do. Sick. How often are you in person at Bloomberg versus Remote these days?

[Tracy Alloway]

Like you do? A lot of show is here all the time.

[Joe Weisenthal]

I'm there basically every day. This is like four.

[Tracy Alloway]

Yeah, three or four, I would say. I usually go back on like either.

[Michael Batnick]

Mondays, three or four. Why Three or four days in the office. Okay.

[Tracy Alloway]

Yeah, it's not too bad. It's actually really nice having Monday and Friday episode free.

[Michael Batnick]

Go back to where? Where do you go?

[Tracy Alloway]

Connecticut.

[Michael Batnick]

Okay.

[Josh Brown]

Are you guys noticing, like the city is busier and obviously it's seasonal, but Josh and I were trained today and our train is not tourists. Okay. We're from Merrick. These are people that come and work in the city. It was literally standing room only. Like in the aisles.

[Michael Batnick]

In the aisles.

[Josh Brown]

The aisles were full.

[Joe Weisenthal]

Totally. I've thought many times just generally, like, if there is a recession, you will not see any evidence of it in New York City right now. Yeah, right now New York City feels as busy as any time I can remember.

[Michael Batnick]

Yeah.

[Joe Weisenthal]

Not just post pandemic, but period.

[Tracy Alloway]

But I will say though, there's a noticeable difference between ridership on the subways on a Monday versus like a Tuesday.

[Josh Brown]

For sure.

[Tracy Alloway]

Like Tuesday, my train is totally crowded. Monday, it's totally.

[Michael Batnick]

Well, we have like, for a lot of people, we have a three day in person work week.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Which has become an unofficial. It's like a thing.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

I run into a lot of people who are going in Tuesday, Wednesday, Thursday in the suburbs.

[Joe Weisenthal]

My wife and I went out to see a comedy show a couple months ago in the East Village. It's just random night and we had a babysitter. So we're like, oh, let's get dinner afterwards. And like we could not get a table. And I don't mean like at nice restaurants. I mean even just like random little like divey Chinese places on a Friday night. Yeah. We just could not find a place to sit down anywhere.

[Tracy Alloway]

So where'd you go?

[Joe Weisenthal]

Yeah, we ended up finding. We ended up finding a table at a bar at this place called Naruto, which is a Hawaiian restaurant.

[Tracy Alloway]

Oh, I know that place.

[Josh Brown]

There's Hawaiian restaurants.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

New York City, there's everything. Restaurants.

[Joe Weisenthal]

There's two Hawaiian restaurants.

[Tracy Alloway]

There's no Hawaiian barbecue place close to you.

[Michael Batnick]

New York can't have a recession unless there's a financial crisis.

[Joe Weisenthal]

Yeah. It feels like a.

[Michael Batnick]

Like New York because. No, no, no. I think the country could have a recession very easily. But I'm saying New York City, like, what would it take for Broadway to be dark Covid. What would it take? Right? Like, you need, like, an actual crisis crisis. I don't think. I don't think you have, like, just an economic slowdown.

[Joe Weisenthal]

It doesn't change.

[Michael Batnick]

And New York empties out.

[Joe Weisenthal]

No way. Yeah, I agree with that.

[Michael Batnick]

Famous last words.

[Joe Weisenthal]

Yeah, exactly.

[Michael Batnick]

So this is my crew. I don't know how many people work on odd lots.

[Joe Weisenthal]

We have three producers.

[Josh Brown]

We have a skeleton crew. Today. We're missing Nicole.

[Michael Batnick]

Yeah, we're missing. We're missing John and Nicole. That's right.

[Tracy Alloway]

So you have three as well?

[Michael Batnick]

No, we have, like, 10.

[Tracy Alloway]

Oh, wow.

[Michael Batnick]

I don't know how many people.

[Josh Brown]

Well, we have Duncan, Daniel Travis is in California, and John and Nicole. John's in Japan.

[Joe Weisenthal]

Amazing.

[Michael Batnick]

Well, I think I.

[Tracy Alloway]

In Japan?

[Michael Batnick]

Yes.

[Tracy Alloway]

Are you, like, recording in Japan or is that expanding?

[Michael Batnick]

We have strategically located him in Japan.

[Josh Brown]

We're looking for the best financial podcaster in Japan, where John's gonna find him.

[Michael Batnick]

Well, what's your. What's your output?

[Joe Weisenthal]

How many shows compound Japan?

[Michael Batnick]

How many shows a week do you do in Japanese?

[Joe Weisenthal]

Average, about three.

[Michael Batnick]

Three?

[Joe Weisenthal]

Yeah.

[Michael Batnick]

And do you tape them all that week, or do you store any in the can?

[Josh Brown]

Hey, guys, those are rookie numbers.

[Tracy Alloway]

We usually have, like, a huge backlog.

[Joe Weisenthal]

We. We record a number of evergreen episodes. We're like. We'll just. We have no idea when we're going to release it because it's not about something that's in the news, you know.

[Michael Batnick]

So this is one of the toughest things about doing this, and I'm curious what you think. So we book this particular show out as, you know, three months in advance. Like, we're booking March right now. Four months.

[Joe Weisenthal]

I was surprised.

[Tracy Alloway]

Yeah.

[Michael Batnick]

Yeah.

[Josh Brown]

But we have very important guests. Like you do.

[Michael Batnick]

No, we have people whose schedules are, like, you have to really have something out on the horizon. The hardest part is something happens.

[Tracy Alloway]

Yeah.

[Joe Weisenthal]

Right.

[Michael Batnick]

And you really wish you could talk to somebody.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

That knows about it.

[Joe Weisenthal]

So why do you book so far?

[Tracy Alloway]

Can't you, like, rip up the schedule if it's an emergency?

[Michael Batnick]

What we're going to do from now on, this is what I think what we're going to do. People that are coming from out of town, we will put them on the calendar three months out.

[Tracy Alloway]

Yeah, that's fair.

[Michael Batnick]

People that are New Yorkers.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Are almost going to be like slotted in a week before.

[Tracy Alloway]

Yeah. Like, we could have come in whenever, right?

[Michael Batnick]

Yes. Well, we had.

[Joe Weisenthal]

We do. That's what we do. You know, we have like people who, like, we work for a long time and it'll be months in advance, but you know, like, something happens and like, can we get someone tomorrow in and do a quick episode? So we mix it up.

[Michael Batnick]

We have the most amazing show booker of all time. Her name is Nicole and she is. She is juggling the casting for like six. Six different podcasts a week.

[Tracy Alloway]

Wow.

[Michael Batnick]

And part of, part of the main reason for booking people so far in advance is to just get it. Get it scheduled.

[Joe Weisenthal]

I know. Yeah, I know.

[Michael Batnick]

Because it's.

[Joe Weisenthal]

No, it's good to just like, especially anyone who's like a name and they're busy or they're coming out, just get it locked in and, you know, it doesn't matter what's going on at that time. People want to hear them. Yeah.

[Tracy Alloway]

Well, the other thing we do is if we know we're going to sit on an episode for a while, we remind the guest, like not to say specific dates and things like that. Like keep it kind of vague like you know, earlier this month or whatever and then you can release it.

[Josh Brown]

Well, guess what? This is very live.

[Michael Batnick]

Yeah. This is going up tomorrow no matter what.

[Josh Brown]

Excited that we're sitting here today with you guys. Is this going up tomorrow at all time? 5:00am all time highs in the Dow. Russell 2000 joining the party. The S P's right there. Equal Weight X Mag 7. It's all happening.

[Michael Batnick]

The Dow Jones is 48, 700 something. We are less than 3% away from Dow 50,000.

[Joe Weisenthal]

Amazing.

[Michael Batnick]

Is that an unbelievable num. Like an unbelievable number. So when you guys started odd lots 10 years ago, I bet you the Dow was 20. What do you think?

[Joe Weisenthal]

It's probably right.

[Michael Batnick]

We could probably look that up somehow.

[Josh Brown]

20,000.

[Michael Batnick]

Where was the Dow 10 years?

[Joe Weisenthal]

Other charts of the Dow going back 10 years. Does that information exist on the.

[Michael Batnick]

Don't you work at Bloomberg? You should know this.

[Josh Brown]

Do you guys have Dow 50,000 guests prepared?

[Tracy Alloway]

No, we don't.

[Joe Weisenthal]

We don't.

[Tracy Alloway]

I would say even back when we started in 2015, people still hated the DAO.

[Josh Brown]

17,500 a year. 10 years.

[Michael Batnick]

Holy shit. So in 10 years, the Dow has gone 17. But it's. What's so crazy is no one's talking about the proximity to 50k. It's almost like a given in people's minds. Whereas I remember approaching Dow 20,000.

[Josh Brown]

It was huge.

[Michael Batnick]

It was like a seesaw just under that level for months. And it was like, is it going to happen? Is it going to happen? Nope. We're not talking about Dow 50,000 yet. 2.7% away.

[Joe Weisenthal]

Wake me up when it's down 100,000. That's my view. Well, let's.

[Josh Brown]

That's coming.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Well, that's a double. Stock market doubles all the time.

[Joe Weisenthal]

I know, I know.

[Michael Batnick]

That's your 2026 target.

[Tracy Alloway]

The problem is memories are short and everyone's used to big numbers now.

[Michael Batnick]

Yes.

[Tracy Alloway]

Like, everything is at a record high. Everything is, like, valued at $1 trillion or whatever. And so they. They stop having an effect.

[Michael Batnick]

So Doug Bonaparte wrote something recently. Our mutual friend Doug. Everything now costs $1,000, which I think is sort of accurate. And then I was gonna say, like, every number that we talk about on Wall street is now probably, like, in the trillions. It's all trillions from now on.

[Joe Weisenthal]

You know what's really embarrassing?

[Tracy Alloway]

One banana, Joe.

[Joe Weisenthal]

You know, it's really embarrassing. It's like if I hear about a successful company or I say, oh, so. And so David says, zaslav, he's gonna be a billionaire after this. Warner Brothers. I'm like, what? He wasn't a billionaire already? What's he been doing all this time?

[Michael Batnick]

Why do I know his name?

[Joe Weisenthal]

I thought he was a big deal. I thought he was a successful businessman, not even a billionaire.

[Michael Batnick]

What is he. What is he doing all this time? What has he been wasting his time with?

[Joe Weisenthal]

Yeah, what's he. I thought he was. Yeah.

[Michael Batnick]

All right. How we looking?

[Tracy Alloway]

We're good.

[Michael Batnick]

Yeah.

[Joe Weisenthal]

All right.

[Michael Batnick]

Because you're out of time. So whatever it looks like. That's what it looks like. You clicking for us today?

[Josh Brown]

Let's go, Daniel.

[Michael Batnick]

Daniel Power, ladies and gentlemen. Also, our visual arts guru creates all our logos and all our stuff. Take a bow. All right. You really, really crushed that one, Daniel.

[Josh Brown]

Big energy.

[Michael Batnick]

Jesus Christ. I'm going to go home.

[Josh Brown]

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[Michael Batnick]

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[Tracy Alloway]

Welcome to the compound and friends. All opinions expressed by Josh Brown, Michael Batnik and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

[Michael Batnick]

Ladies and gentlemen, welcome to one of the best investing podcasts in the world. We are sitting with financial slash economic podcasting royalty. Literally. Tracy Alloway, along with co hosting Odd Lots, writes about markets, finance and the economy at Bloomberg. Tracy was the head of Bloomberg's Asia Pacific News desk and led the Cross Asset Markets team. I first met you though when you were at ft. That's right.

[Tracy Alloway]

I actually remember when we first met because I did.

[Michael Batnick]

Oh boy.

[Tracy Alloway]

I drink way too much Blue Moon and ever since that night I cannot drink Blue Moon ever again.

[Joe Weisenthal]

Why?

[Michael Batnick]

How much did we drink?

[Tracy Alloway]

I can't remember for obvious reasons.

[Michael Batnick]

We were annihilated somewhere enough to never want to it again. I have that reputation. I do turn it up. I turn it up.

[Joe Weisenthal]

We turn it up.

[Michael Batnick]

And with Tracy, old friend of mine, super super excited to have you here for the first time. I can't believe it's the first time. Joe Weizenthal is an editor at Bloomberg, co hosting their flagship markets program. What'd you miss?

[Joe Weisenthal]

I did.

[Michael Batnick]

I know. I remember the origin story of what you missed. Yeah. By the way, from. From your Twitter.

[Joe Weisenthal]

From my tweets. Yeah.

[Michael Batnick]

Joe is also the co host of the Odd Lots podcast with Tracy Alloway. And let's give a round of applause for Joe.

[Joe Weisenthal]

Thank you.

[Michael Batnick]

Yes. All right.

[Joe Weisenthal]

Do you remember where we met? We've talked about this on there.

[Michael Batnick]

Where did we meet? I probably met you at Business Insider last year. Like just visiting? No.

[Joe Weisenthal]

Maybe. But the first time I think we met was at Michael Jordan Steakhouse.

[Michael Batnick]

Oh, that could be.

[Joe Weisenthal]

Remember that night? Do you remember there was like.

[Michael Batnick]

Oh yeah, yeah, yeah, yeah. 2010is 2009.

[Joe Weisenthal]

Yeah, yeah, yeah.

[Tracy Alloway]

What were you doing there?

[Joe Weisenthal]

Well, we. I don't remember the.

[Michael Batnick]

He's a big Michael Jordan steakhouse fan.

[Joe Weisenthal]

I don't remember like what the pretense was, but this is the crew of some of us.

[Michael Batnick]

I do. Somebody sent emails, blind emails to a whole group of the earliest financial bloggers of which you were one. I was one. And was like, hey, there's going to be this meetup. Everyone's going to get together. And it was like, honestly, I think I met like five or six people that still talk to to this day at that dinner. It was very bizarre. I think we had Campbell apartment first for drinks and then migrated upstairs to Jordan Steakhouse. Anyway, you enjoying all this? This is fun for you.

[Josh Brown]

I love it.

[Michael Batnick]

All right, good.

[Josh Brown]

Love history.

[Michael Batnick]

All right, we have a lot with you guys. The first thing is the aftermath of last night's Oracle report. We were going to just look at the stock market reaction. So Oracle was in a huge drawdown going into the number and today fell 14 and a half percent. This is the worst, almost the worst day for Oracle going back to 2002. So it's a four decade old company experiencing one of its worst days ever. It's 40% off its high.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Largest drawdown since the dot com bubble. And this is in the context of an overall stock market making record highs.

[Joe Weisenthal]

Yeah.

[Josh Brown]

So that's the interesting part.

[Michael Batnick]

Yeah.

[Josh Brown]

Is that this didn't bring down the rest of the market.

[Joe Weisenthal]

I think that's really interesting.

[Josh Brown]

Semis are at the high of the day right now. The stock market as we just mentioned, all time highs. The fact that this didn't kill the vibes is really interesting.

[Michael Batnick]

The band played on.

[Joe Weisenthal]

I've been Thinking about this, which is the thing that we always say when we talk about the market this year is like, oh, the AI led market. It's AI is holding up the entire market. A handful of big tech companies and everyone else is doing badly. And yet. So you mentioned Oracle Meta is not having a particularly good year. Right. And so the stock market is not perhaps as reliant on a handful of these giants as maybe people perceive. And the fact that Oracle can tank and it doesn't take down the market should, as you're implying, maybe cause people to rethink a little bit about the story that we've been telling about 2025.

[Tracy Alloway]

But I do think that the sentiment has shifted a little bit on AI companies or tech companies themselves. Right. And actually, Josh, I was listening to one of your episodes, I think it was a couple weeks ago, and you actually, like, enunciated it very well. This idea that we've moved on from the moment where it's just about the narrative and people throwing out big numbers into the air, and we're getting into the point where investors actually care about whether or not the revenue is coming in to back that investment up.

[Michael Batnick]

There's this really interesting thing that happened this fall, and it reminds me of crypto. You guys had Sam Bankman fried on Notoriously and Matt Levine, what's in the box.

[Joe Weisenthal]

And.

[Michael Batnick]

And Sam effectively explained his Ponzi scheme or some of the Crypt, not someone else's Ponzi scheme.

[Josh Brown]

And Matt Levine goes, wait, wait, wait.

[Michael Batnick]

But you. You could literally draw maybe not a price line, but a sentiment line the day before you aired that episode and the day after and the day after started a new chapter in the crypto market. It was 20. 2022.

[Joe Weisenthal]

Yep.

[Michael Batnick]

Okay. Where people were just like, actually, I'm going to say this out loud. That sounds bullshitty to me.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

People finally felt comfortable, like, almost like the emperor has no clothes. And I think the parallel there was like, what happened on Brad Gerstner's podcast with Sam Altman. Different Sam. I'm not big fan on backing people financially whose names are Sam these days.

[Joe Weisenthal]

But, like, you would back Sam Rowe.

[Tracy Alloway]

Yeah.

[Joe Weisenthal]

I was about to say Sam Rowe is an exception.

[Michael Batnick]

Always 100%. 100%. His first name's not Bi. It's not by Sam Rowe. All right, so I would 100. But my point is something shifted. Not sudden, not slowly, not gradually, but like, yeah, he had a horrible podcast appearance, of all things. Not even on a news network.

[Joe Weisenthal]

No. Gerstner is like a shareholder, the company.

[Michael Batnick]

Investor of the company. He asked a question that couldn't really be answered in a. In a. In a good way. And I was wondering if you guys have felt that seismic shift in the moment that it happened.

[Tracy Alloway]

Well, these are the things that happen when your valuation is built on vibes. Right. And I would say crypto is mostly built on vibes. And crypto actually does a really good job of adapting to the narratives. So, you know, it used to be an inflation hedge, the new gold, and then it became a play on the Trump administration. It's reinvented itself so many times. Yeah, really. And AI, you know, for most of this year has been exactly like that. It hasn't necessarily transformed itself just yet, but it's certainly built on, again, that story that it's telling investors, which is at some point in the future, the trillions of dollars of revenue are going to be rolling in.

[Joe Weisenthal]

The thing about that moment with Brad Gerstner is when Brad asked that question, he thought he. He almost certainly thought he was lobbing up a softball. Right. He's an investor in Open. So he's like, okay, this is the question that everyone's curious about.

[Michael Batnick]

Not an ambush.

[Joe Weisenthal]

It's not an ambush.

[Michael Batnick]

60 Minutes.

[Joe Weisenthal]

And he's like, I'm going to. Because I. He's like, I'm sure Sam has some stock answer ready for this one because. And so he thought he was, like, just throwing up an alley. Oop. Yeah. And so the fact that it wasn't. And he was like, what was. You want to sell the stock?

[Michael Batnick]

What was the. What was the question? You guys are making 1.3 trillion in commitments.

[Joe Weisenthal]

So he said, yeah, so he said, you have $13 billion of revenue. How are you going to make a trillion dollars in capital spending?

[Josh Brown]

Brad, I'll buy your stock back.

[Joe Weisenthal]

Well, you ought to short the stock. But. But there's two things. So one, I'm sure he thought that, like, he was giving him a very. Just an opportunity to explain the math, and he did. I also think it's very. What's really interesting about this, and you connect it to the stock market, which is that OpenAI is a private company that is very important to the public stock market.

[Michael Batnick]

Oh, yeah.

[Joe Weisenthal]

And so to. If you wanted to have a truly informed view on, say, Nvidia or Core Weave or any of these names, you. You would want to have some insight into the. The balance sheet and the P and L statement of a company like OpenAI. We're in this very weird situation in which there's so much riding on an opaque company. And so we're looking for these like little, little, little crumbs that we get from podcasts, etc. And that's the only thing we got.

[Michael Batnick]

We said this in October. We, we did a live episode with Kramer. I know you guys did too, by the way. I enjoyed that. And I, I referred to OpenAI as like Kaiser Soze. Like, like in Usual Suspects, he doesn't show up until the end. Like he's like not in the market.

[Joe Weisenthal]

Yeah, it's.

[Michael Batnick]

But everybody else is so reliant or a lot of other companies are so reliant on the every pronouncement of Sam Altman. And it's not long ago where proximity to Sam Altman was like the most bullish thing on earth.

[Joe Weisenthal]

I know.

[Michael Batnick]

And now these stocks, they can't catch a bid.

[Josh Brown]

This is why we need tokenization. If OpenAI.

[Michael Batnick]

I was going to show you that.

[Josh Brown]

So, all right, if OpenAI was public, what do you guys think it would be down, like if it. From its high 40.

[Michael Batnick]

Let's say, let's put the high the day before the Gerstner podcast. Where is it today?

[Josh Brown]

From there down 40 at least.

[Tracy Alloway]

That's an interesting question.

[Michael Batnick]

We are very good at this.

[Tracy Alloway]

40 sounds down.

[Joe Weisenthal]

40 sounds good. You know, they've, I know they've reconstructed like OpenAI baskets right where they have these proxies. So I know it's like Nvidia and coreweave and a couple other companies that are perceived. Oracle, Oracle. And then there's like the Google, the Alphabet basket. That one is like Broadcom, which is doing phenomenally well, and a couple of these other ones that are seen as part of the Alphabet universe. And I think like you can just look at that line and basically divert the, the, the Alphabet basket and the OpenAI basket basically diverged right after that interview.

[Josh Brown]

So we're talking about the market at an all time high and just this narrative, it's only AI that's leading the charge. It's only five stocks. What a load of horseshit.

[Joe Weisenthal]

Yeah, like Wells Fargo hitting all time high.

[Josh Brown]

Wells Fargo is ripping through its through, through highs. So Microsoft, which is effectively another good example of a publicly trade linked to OpenAI.

[Joe Weisenthal]

Right.

[Josh Brown]

Big investors tend to big time.

[Michael Batnick]

They were eating, they're eating a percentage of the losses.

[Josh Brown]

So Microsoft stock, it peaked in July and the stock is flat for a while. So it's this idea that it's just, it's just not just them.

[Tracy Alloway]

But I got to say on Wells Fargo, this is the problem. Right. Which is AI is so Huge right now that it touches literally everything. And I'm sure there's an element of Wells Fargo that's like we're going to fire all our workers. And institute models and investors are getting excited about.

[Michael Batnick]

You couldn't be. You couldn't be more. Right. Like I saw at the Hartford Group today on the air, this is 150-year-old, ish insurance company. Here's how old the Hartford Group is. You know why it's based in Hartford.

[Tracy Alloway]

Oh, that was an insurance capital.

[Michael Batnick]

It was. But do you know why?

[Tracy Alloway]

No.

[Michael Batnick]

Okay. Because you could stand on a roof and see the ships come in from England. And are you familiar with the expression, someday my ship will come in? If you are in the insurance business and you were insuring cargoes transatlantic, Hartford is the right place to stand on a building and literally, like a widow's walk.

[Tracy Alloway]

That's amazing.

[Michael Batnick]

Actually. See your ship come in. That's how old this company is. Why is it rallying right now? They spend more money, more dollars of revenue than any other insurance company. On technology. You talk to an insurance agent who writes a lot of policies, goes through Hartford as one of their carriers.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

They make it the easiest to get a quote back. So like an insurance broker goes in, types their client's situation, Hartford's tech. And the whole story with the Hartford Group is that their AI investments are going to pay off before anyone else's. So you're exactly right. That's such a huge component of this rally. In small caps and mid caps, the AI investments actually should lead to increased profitability next year.

[Joe Weisenthal]

That's the hope. Right. Like people have been talking about this. Like the next wave of the AI trade, so to speak, is at least in theory, the companies that will get much better operating leverage.

[Michael Batnick]

We hope.

[Joe Weisenthal]

Right. In theory. I mean, so, you know, obviously the financials, intuitively, there's a lot of opportunity. Cause there was also that OpenAI deal with Thrive recently.

[Michael Batnick]

Yes.

[Joe Weisenthal]

And they're gonna like. OpenAI is essentially gonna be now a de facto equity holder in a bunch of companies that consume AI products. But intuitively that's got to be health care, drug discovery.

[Michael Batnick]

All of that should speed up. These companies spend so much money accounting, law firm.

[Joe Weisenthal]

I mean, I don't.

[Josh Brown]

There's all of these stodgies.

[Michael Batnick]

So we bullish on AI again, all of it.

[Josh Brown]

Absolutely. But all of these stodgy businesses like accounting and law firms, where AI is already penetrating. Yeah, there is like they're following the PE playbook with venture style investing, which is very unusual. I'm excited to see how that turns out. But there is so much opportunity, and you're going to see this. At least. Analysts are expecting this to show up in margins for all the rest of these companies.

[Joe Weisenthal]

Yeah, Daniel.

[Tracy Alloway]

So the CEOs, because they're putting out the press releases going. You know, we're using cutting edge AI all the time.

[Michael Batnick]

Fire chart 3A for me.

[Josh Brown]

Fire.

[Michael Batnick]

I mean, that's not great, though.

[Tracy Alloway]

No.

[Michael Batnick]

From a sentiment standpoint.

[Joe Weisenthal]

Is that the COVID This is the.

[Michael Batnick]

This is today's cover of Person of the Year issue of Time magazine. It is. The architects of AI they won it as a group. I won my bet on Kalshee. I had Jensen Huang winning, and I still got credit for it, even though he's part of a group. And this is that iconic lunch atop a skyscraper image from, I don't know, a hundred years ago.

[Joe Weisenthal]

Whatever.

[Michael Batnick]

So first of all, I can name almost everyone except for one person.

[Joe Weisenthal]

Yeah, I can. I don't know who the guy on the far left is.

[Josh Brown]

Is that anthropic CEO?

[Joe Weisenthal]

No, the anthropic CEO. That's Mark Zuckerberg.

[Josh Brown]

No, it's not.

[Joe Weisenthal]

No, the anthropics one is in the blue vest.

[Michael Batnick]

It's Mark Zuckerberg. It's Mark Zuckerberg.

[Joe Weisenthal]

Oh, that's Mark Zuckerberg. It is.

[Josh Brown]

So it's Mark Zuckerberg.

[Joe Weisenthal]

Lisa Sue, Elon Musk. Jensen Wong. Sam Altman. I think that's the deep mind guy.

[Michael Batnick]

That's the husband.

[Joe Weisenthal]

Yeah, the deep mind guy.

[Michael Batnick]

That's the deep mind guy. That led to Jedi.

[Joe Weisenthal]

And then Dario Amade. And then the. She's the professor at Princeton.

[Josh Brown]

I believe you are a certified dork. Take a bow.

[Joe Weisenthal]

Am I wrong? On the last.

[Michael Batnick]

Oh, she. World something.

[Joe Weisenthal]

I'm embarrassed. World.

[Michael Batnick]

World Labs. I don't know her name.

[Joe Weisenthal]

All right.

[Tracy Alloway]

I gotta say, Zuckerberg had a pretty good. Had a makeover.

[Joe Weisenthal]

I did a decent job. I did a decent job.

[Tracy Alloway]

Zuckerberg had a makeover recently. He looks pretty good.

[Michael Batnick]

Look, he's still got. They gave him the swag on the. On the thing.

[Tracy Alloway]

Yeah, that's right. Wait, is this the first time they've done a group as person of the Year?

[Michael Batnick]

No, they've done some goofy, like, one year. They.

[Josh Brown]

Did you.

[Joe Weisenthal]

Wait, wait. I was actually just gonna say that.

[Michael Batnick]

They put a mirror on the COVID.

[Joe Weisenthal]

No, no, that was a great call. Let's revisit that because that was 2004, I believe, or maybe 2005. But, like, that might have been one of the most vindic given where media.

[Michael Batnick]

It was about social media.

[Joe Weisenthal]

It was about the dawn of social media. Might have been 2006. It was a YouTube style image. Was there a better think about Babe Ruth calling his shot and nailing it. What transpired over the next 20 years or 19 years since that, in terms of seeing. That was a great call. We made fun of it at the time, but they nailed it.

[Michael Batnick]

We did mock it, but it's right. It did turn out that that was the dawning of this era where people were going to be uploading photos and videos themselves relentlessly.

[Joe Weisenthal]

Yes. Yeah, they call it. I guess it's one of the great. It was maybe their best one ever.

[Michael Batnick]

I'm sure they've done other group. Oh, they didn't. They have a group cover of like the Committee to Save the World.

[Joe Weisenthal]

That's right.

[Michael Batnick]

Financial crisis.

[Joe Weisenthal]

Yeah, that one. Another one maybe not as held up well for various reasons.

[Michael Batnick]

Who was in that? Like Geithner and Larry Summerson.

[Joe Weisenthal]

Larry.

[Michael Batnick]

Larry Summers.

[Joe Weisenthal]

Robert Rubin. Oh, boy. And not Epstein. Larry Summers. Robert Rubin and can I read you and Ellen Greenspan. Those were the three.

[Michael Batnick]

Here's what Ed Yardeni said about this cover. First of all, he doesn't like it. Like me, he has a knee jerk. Like an instinctual aversion to. Oh, here we go again. There's some history here. Jeff Bezos was named Person of the Year at the end of 1999.

[Joe Weisenthal]

I remember that cover. He was. His head was in a box.

[Michael Batnick]

Yeah, well, it's the COVID Curse the stock, right? The stock lost 90% over the next 18 months. Not great. I mean, it worked out okay. Elon Musk was. Was the Person of the Year in December of 2021. 2022 might have been one of the worst years of his life. I mean, comparably speaking, he bought Twitter shortly after his personal reputation took a hit. And then he became the first person in history to lose $200 billion in net worth.

[Joe Weisenthal]

But that's so.

[Michael Batnick]

So Yardeni's. Yeah, no, I get it.

[Tracy Alloway]

Yardeni's Twitter was the low.

[Michael Batnick]

His. His take is. It's the AI trade is turning into a Game of Thrones.

[Josh Brown]

Yeah.

[Michael Batnick]

In the past, the Mag 7 had their own kingdom surrounded by big moats. They each had their unique monopolies. Now they are competing with one another, threatening each other's kingdoms. So that's what's changed.

[Tracy Alloway]

Wait, you said you don't like the.

[Michael Batnick]

COVID I don't love. When something becomes so obvious to everyone because it feels like it doesn't mean everything's gonna Crash. It just feels like how much money could there be left to make?

[Tracy Alloway]

You want something a little more interesting?

[Josh Brown]

I do, but it's not like it's Sports Illustrated for Kids. Like it's, you know, it's like, it's like a, it's a worldly magazine and AI is the thing, so. But I hear your point.

[Joe Weisenthal]

You know the other thing. So you know, there's the. Everyone talks about the COVID curse. The other famous curse is the new headquarter curse. And of course we're like a few blocks away from the new J.P. morgan headquarters, which is beautiful building, but we are, we're in the moment of some curses apparently. You know, it's like, okay, the biggest bank, which is another stock that's like.

[Michael Batnick]

That'S basically fairness though to JP Morgan. They didn't break ground this year that. You know what I mean?

[Tracy Alloway]

They've been doing it forever.

[Michael Batnick]

They've been building that for 10 years.

[Tracy Alloway]

Actually, I have a funny story about that new building. Remind me to tell you after this.

[Michael Batnick]

Oh man. Okay. What is there like a freemason section in the building?

[Josh Brown]

Joe, I just got a email from somebody that works for us who said that's Duncan. Who said tell Joe Weisenthal I'm a huge fan, please.

[Joe Weisenthal]

Okay. It's right here.

[Josh Brown]

That's our guy.

[Michael Batnick]

You want to tell him yourself?

[Josh Brown]

Yeah, yeah, Duncan, he's right here. It wasn't from Duncan.

[Michael Batnick]

Oh, okay.

[Joe Weisenthal]

Okay.

[Josh Brown]

All right.

[Michael Batnick]

So Duncan. Hey, was there a, was there a Federal Reserve meeting this week?

[Tracy Alloway]

Oh yeah, I honestly there was a lot going on this week, including the odd lots 10 year anniversary party. So I wasn't really.

[Joe Weisenthal]

We were a little out of the.

[Tracy Alloway]

In the right headspace, but forgot about that like leading in.

[Michael Batnick]

Did anything, did anything happen? They cut rates by 25 basis points as expected. Yeah, that's it. Nothing happened.

[Tracy Alloway]

No, no, no. They announced a 40 billion per month of T bill purchases. That's the interesting thing. And a lot of people were actually caught off guard cuz the way they're doing it this time it's not a steady purchasing. It's not like, you know, you buy 40 billion at the set time every month and there's like a schedule. They say they're going to ramp up purchases ahead of moments where liquidity gets tight. So for instance, the April tax date, that's when a bunch of tax revenue comes into U.S. treasury. And because of that bank reserves tend to get pretty scarce. So people are really interested in that. This is active liquidity management by the Fed.

[Josh Brown]

We don't do that already?

[Michael Batnick]

No, Tracey.

[Tracy Alloway]

Well, not in this way.

[Michael Batnick]

Is this, is this longer dated bonds runoff because they mature and instead of replacing them with the same maturity, they're opting to buy shorter term T bills. Is that what they're doing?

[Tracy Alloway]

Well, I think they're doing T bills because the main concern is in the funding market. Right. It's this repo craziness.

[Michael Batnick]

So they want to have overnight money.

[Tracy Alloway]

Sloshing around and available and banks are still refusing to use the standing repo facility for some reason. And you know, that's what it's there for, liquidity management, but they don't want to use it.

[Joe Weisenthal]

The one other thing about the Fed decision that is notable, there were three dissents and two of them. So the Kansas City Fed president Jeff Schmidt and Chicago president Austan Goolsbee both voted for no cut. Stephen Myron, that was the third dissent. He voted for 50. 50. But this is very important when we think about 2026 because we know Trump is gonna appoint someone who presumably will come in with something of a mission to get lower rate. We're all assuming Kevin Hatchett. Kevin Hatchet.

[Michael Batnick]

Kevin Hatchet is coming in to cut rates to zero as though it's Covid. But I came up with that.

[Joe Weisenthal]

The fact that there are like there are three dissents of this on the two hawkish descents means like he's going to have to do a sales job on the whole committee. And you know, like Powell got the committee around because as recently as three weeks ago or two and a half weeks ago, odds of a rate cut for this meeting were less than 50%. Powell got the committee on board and the market. And the market. And so it's really shows like that whoever replaces Powell is hopefully has some clout within the committee, otherwise he's not gonna be able to get what he wants.

[Josh Brown]

So Bloomberg Intelligence reported that yesterday was the most dovish presser since 2021. So you guys break it down. There's hawkish sentences of which there were very few. There are moderate hawkish sentences of which there were a little bit less. But dovish and moderate dovish most since 21. I also didn't listen for. And as a matter of fact, as a matter of fact, we just cancel December Fed meetings. We're all too busy in December.

[Tracy Alloway]

I agree.

[Michael Batnick]

How do they.

[Josh Brown]

Sorry, time for this. It's AI Josh.

[Tracy Alloway]

Christmas parties are.

[Michael Batnick]

They're reading, they're reading the amount of the sentences that come off as moderate. Moderate, dovish, dovish and hawkish.

[Tracy Alloway]

Can I just say One thing about the market reaction, so obviously a dovish statement from Jerome Powell was really good for stocks as was an increased forecast for GDP next year. Lower inflation, stable unemployment. That's a real. That's like the dream mix for equities. Right. But the really interesting thing about Wednesday is you didn't see that same reaction in the junk bond market. So credit spreads on junk bonds actually blew out a little bit on Wednesday which is really weird because in theory that same mix that's good for equity should be good for corporate debt too.

[Joe Weisenthal]

The one other thing too about. I hadn't seen this chart until you guys showed it but thinking about what made this a particularly dovish cut is the opening paragraph of the statement said inflation has risen since our last meeting and remains elevated. What is it? So think about what that means. The stock market's at all time highs, inflation is above target as it's been for half a decade. It's rising and they're still cutting. So by implication that is extremely.

[Michael Batnick]

But they have when you have three mandates. One is keep unemployment in check. Two is moderate price increase and all.

[Joe Weisenthal]

Time highs in the stock market.

[Michael Batnick]

And no three is not be sent to Guantanamo by Donald Trump. Yeah, that's to satisfy the third part of the man is very important.

[Josh Brown]

This was, this was the spark for the stock market. Leaseman was asked if AI was a factor. What's going on out there when you get more growth without a decline in unemployment. And this is what Powell responded and this is what sent the market higher. Powell said. So the implication is higher productivity. Haven't heard that in a while. And some of that may be AI also productivity has been structurally higher for several years now. So if you start to think about it as 2% a year you could sustain more growth without more job creation which is maybe not great for society but it's great for the stock market.

[Tracy Alloway]

Everything is about AI now, even the entire US economy. There was one estimate that I saw saying that 40% of US GDP growth for this year came from AI. That's insane. That's more than consumers.

[Michael Batnick]

Oh productivity directly.

[Joe Weisenthal]

I don't know how it was the capital expense was the direct but you know an interesting like I believe to some extent that AI is contributing to greater productivity is probably true. To some extent. Well the other thing interesting to think.

[Josh Brown]

About is rigging endorsement show.

[Michael Batnick]

Oh, do you believe it?

[Josh Brown]

I guess, I guess.

[Joe Weisenthal]

But no. Think about how tight the labor market was in 2021 and 2022.

[Michael Batnick]

It was an emergency.

[Joe Weisenthal]

Yeah. For the first time in years and years and years companies couldn't take for granted that they, if they put a help on it sign in the window that they'd get. So that forces companies to find productivity gains that they might not have. We can't find work. Oh, we're going to like, you know, you're going to, you're going to place your food order on an iPad, kiosk, whatever. Yeah. So it's possible, and I'm not totally sure, but it seems at least possible that some of the productivity growth that we're seeing now is the fruits that are being born from when all these companies were severely resource constrained and had to find new ways to continue doing.

[Michael Batnick]

I think that's, I think that's definitely true. But I also think there's this thing now with every business owner I talk to, at least they don't know to what extent AI is going to be, is going to enable them to stop putting people in seats. And the bigger the company, the less they know. So they know that AI is helping their coders code and helping their white collar employees bang through tasks like drafting emails and reading documents. They know that for sure. I don't think most companies are able to like calculate a dollar amount, but the further this goes, the more advanced it becomes.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

The easier it'll get to measure. And like when you hear people talk about efficiencies, AI job losses are the efficiencies. Like that's, there's no other, there's no other efficiency. It's, we don't need as many people to do what we do as we thought we did.

[Tracy Alloway]

Well, the thing you always hear from the labor market optimists, I guess is this idea that, well, we're going to lose some jobs, probably a lot of jobs, but they're going to be replaced with new jobs for the new golden age of AI driven productivity gains. Right.

[Michael Batnick]

And I'm really curious many life coaches.

[Tracy Alloway]

Yeah, I'm very curious. Jobs to see what those jobs actually are. Right.

[Michael Batnick]

Yeah. Employment counselors.

[Tracy Alloway]

Yeah.

[Josh Brown]

What if it's not job loss? Like what if it's just like people that got into a house and had a mortgage prior to 2022. What if it's like, listen, if you were in the labor market, you're good but the pool of labor is going to remain relatively constant because we just don't need to hire as many new people. Especially on this is what college kids.

[Michael Batnick]

Are faced with and recent graduate unemployment looks like a recession. It's going to be way population was at that level.

[Josh Brown]

That's Going way higher. That's going way higher.

[Joe Weisenthal]

Yeah, for sure. You know, I think the, I'm not, this is not a forecast or anything like that. But one possible thing that I've been thinking about and I've said a couple times is okay, in any corporation, we've all seen the memos. You need, you need to figure out how to use AI, right? Everyone figure out a way. And so how do you establish if you're a middle manager, that you are successfully implementing AI within your division? Well, you're like lay off 10% and say, oh, we're, you know, we're doing the same work with 90% of the, with 10% of the square point.

[Michael Batnick]

It's like the proof.

[Joe Weisenthal]

But it seems like so, yeah, so you don't actually really do anything with AI, you just prove it by firing people. It's at least seems possible to me that a number of companies will again find themselves short of labor, that actually they did not have AI driven productivity gains, that these were layoffs because someone wanted to show that they were getting more lean. I also think DOGE was like a sort of cultural thing where like every. Lots of managers, like we're going to do our own version of DOGE and really see who's necessary firing was in firing was it. And it may be that sometime in 2026 or beyond that we get a bunch as a burst of catch up hiring when companies realize, wait, these weren't. We really didn't have the productivity gains to justify these layoffs we actually need.

[Michael Batnick]

You're saying you think that's the way it goes?

[Joe Weisenthal]

I think it's like, I think it's possible that companies might find themselves a short labor next year.

[Tracy Alloway]

This is one of the things that we learned from the pandemic experience or the pandemic like really hit home when you have these big disruptions. They set off like this extreme cycle in behavior where people like either can't hire enough, so the next year they want to hire more employees and build like a backlog, a safety net basically. And then they find themselves bloated and then they fire everyone. And then the next year the same thing happens. It happened with housing investment post 2008 as well, right?

[Joe Weisenthal]

Yeah.

[Tracy Alloway]

Home builders are still scarred from 2008 and we've kind of been trapped in a cycle ever since.

[Michael Batnick]

It's like a pendulum and it one extreme to another.

[Josh Brown]

Tracy, why are global yields rising? I don't know why I just said it like that, but why are so we had, we had the Fed cut yesterday and yet like the long end in particular. Why is this happening? Daniel, chart on, please.

[Michael Batnick]

No segue. He just goes right in, let me say.

[Joe Weisenthal]

Oh, good chart, yeah.

[Michael Batnick]

What is this? What is, what is we're looking at?

[Joe Weisenthal]

I gotta say it's funny though, it's like look at Japan. But it's important to note for viewers at home that that's on the left side of the scale. So it looks like the highest is actually still far and away the lowest the of the long end.

[Josh Brown]

But what is the story here? Seriously?

[Tracy Alloway]

I mean, I think it's a mix of higher inflation and economic growth expectations. And even though everyone's talking about the US stock market today, like the European stock market has had amazing, amazing stock market.

[Michael Batnick]

Exactly, so, so yields are following perceived economic growth and prosperity.

[Joe Weisenthal]

There's so much that's happened over the last few years. But I think that another big phenomenon that has nothing to do with AI is so we know that there is some kind quasi deglobalization happening, at least in the specific sense that every country feels. We have to have our own semiconductor fabs. We have to start defense, defense. So you have this combination and when you reduce trade, that's anti productivity. Right, because we can no longer outsource as much as we want. So you have this anti productivity phenomenon coupled with increased spending because that's how you get all this self sufficiency. So you have more money coming into a less productive system. I think there's good reason to think that inflation over the medium to long term will just be higher than it was due to just the combination of those two factors. And that's how you get the high, this is sustained higher yields.

[Tracy Alloway]

It's nice that deglobalization is good for investors, but also the globalization story was also good for investors.

[Michael Batnick]

Always good.

[Joe Weisenthal]

It's always good for investors.

[Michael Batnick]

Well, no, because like if you're in Europe right now, you don't want to see a repeat of the Internet where four companies in the United States are selling you everything AI related.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

So the French are backing Mistral and they're trying to foster all of these startups. And the Germans are rearming, which I never thought I'd be so bullish to hear a phrase like, hey look, the Germans are rearming again. But there are all these Eurocentric economic growth drivers now that did not exist even like two years ago.

[Joe Weisenthal]

Yeah, yeah.

[Michael Batnick]

And this, those stock markets, they look like, they look like our market or better in many cases, as Joe would.

[Tracy Alloway]

Say, capital H history.

[Joe Weisenthal]

Right.

[Tracy Alloway]

Like it's an Actual shift in world global history.

[Joe Weisenthal]

Well, you remember like Trump has been.

[Michael Batnick]

A catalyst for, I think, waking up Europe.

[Joe Weisenthal]

Yeah, he has. I mean, do you remember like after 2010 when the euro crisis is like, when is Germany going to spend some money?

[Michael Batnick]

15 years later you got your answer.

[Joe Weisenthal]

And then 15 years later it's like, oh my God, we've been waiting for this forever.

[Michael Batnick]

All it took was second term of Donald Trump and a Russian invasion in a war.

[Josh Brown]

It is funny. You guys like started your career. This maybe not started, but austerity was the word, one of the words of the decade.

[Michael Batnick]

How did that go? The whole austerity thing wasn't great.

[Joe Weisenthal]

Well, you know what I think about that time, which is very strange, is these days, 2025, the idea of austerity seems so alien, right? Either party, right. No one has any appetite for higher taxes. No one has any appetite for cutting spending anywhere. Right? And this is the case in the US and it's the case in Europe. And it's really hard. Like, wait, what were the political conditions in 2010 that actually elected leaders felt comfortable doing austerity? Because that seems like another world now.

[Michael Batnick]

We had these two old codgers, Simpson and Bowles. Maybe they're still alive. I apologize, guys. They were doing this national tour with the deficit shtick and they were like folksy and old timey.

[Joe Weisenthal]

They did a rap and they had puppets.

[Michael Batnick]

They were rapping and they were rapping about the deficit. There were YouTube videos that was. So what was the, what was the zeitgeist? That was zeitgeist. It was like, it was like popular post a financial crisis to say if we don't get serious about deficit, it's going to happen again. Thank God we didn't get serious about deficits because. Because then we would haven't had a recession yet. 15 years later.

[Tracy Alloway]

I think the crisis had a lot to do with it.

[Josh Brown]

Is there some more?

[Tracy Alloway]

Oh, well, what was I going to say?

[Michael Batnick]

When you have a crisis, the natural instinct is let's cut back on spending.

[Tracy Alloway]

Yeah, well, okay. What's remarkable about the Eurozone crisis is it wasn't just countries imposing austerity on their own people. It was also, you know, the European Union at that supernational level, imposing austerity.

[Michael Batnick]

On its members, the north against the south.

[Tracy Alloway]

And contrast that with the moment today where, you know, the EU is trying to hold on. But in general it feels like everyone is going in their own little direction. It seems impossible to think that would happen now.

[Michael Batnick]

One, one of the standout performers amongst European stocks Rallying are like Italian banks. Greece is doing well. Like tourism driven countries are actually outperforming industrial manufacturing like countries like in the north. And it's kind of, it's kind of interesting where like the roles have sort of reversed.

[Tracy Alloway]

I like the idea of Europe as like a tourist destination for people who want to look at like, like a non capitalistic society. You just go there and watch the French drink wine at lunch and stuff like that.

[Michael Batnick]

Protest.

[Tracy Alloway]

That's right. Set things on fire.

[Josh Brown]

Speaking of bubbles, is there a bubble in money market funds? There is $8 trillion going up every single day. It's really incredible when you consider the context and the backdrop of the stock market.

[Joe Weisenthal]

Yeah.

[Josh Brown]

And the fact, I mean it's just.

[Michael Batnick]

But what you're showing in the bottom pane is money's not moving. Yields have come down from five and a third percent to three spot eight, six percent and it doesn't matter but.

[Josh Brown]

And it looks like, it looks like it's like going vertical. The institutional money market funds.

[Joe Weisenthal]

I just think, you know, if you have money that you don't want to put into risky assets, if you don't want to put in the stock market, like then all you just want liquidity. Right. And you're still getting paid almost 4% for.

[Michael Batnick]

You're still beating inflation.

[Joe Weisenthal]

Yeah, you're still beating inflation. Or pretty close. Why are you like reaching a little bit for that extra 40 bip?

[Josh Brown]

It sounds like somebody's sitting on a lot of cash. Put it to work.

[Michael Batnick]

Okay. Is that, is that cash on the sidelines?

[Josh Brown]

So put it to work, you guys.

[Joe Weisenthal]

I don't.

[Michael Batnick]

I never.

[Joe Weisenthal]

I established whether that's a myth or not. It's a riddle.

[Michael Batnick]

It can't be answered.

[Josh Brown]

This is absolutely cash that's on the sidelines.

[Joe Weisenthal]

You know, it's funny. It's like the.

[Michael Batnick]

Yes. But if it comes into the stock market to buy, that means somebody stops which then goes into money market funds.

[Joe Weisenthal]

There's all people. I know there's all these people that are like, there's no such thing as cash on this.

[Josh Brown]

This is, this is literal cash. And it is actually on the sidelines. Now the idea that for every buyer there's as a seller is true. But also, guess what. The stock market goes up every day. And that's not every day. The stock market goes up guaranteed every single day. But can you promise me that. Yes, of course. But it's positive some.

[Joe Weisenthal]

Yeah.

[Josh Brown]

And this is like the big, big difference between this and the prediction markets. I won't call it betting is that the. I'm kidding. The individual gamblers, somebody wins, somebody loses and eventually people are going to get tired of losing because you lose more than you win. Because the rake is so high. Not just the prediction markets, but in gambling markets, betting apps like you are they. You are going to lose because the house. There's a rake in there.

[Joe Weisenthal]

Yeah.

[Josh Brown]

And eventually people are like, this isn't fun anymore.

[Joe Weisenthal]

Yeah.

[Tracy Alloway]

This was one of the things I found really interesting when we did that episode with the sports bettor. This idea that, like, if you're actually good at sports betting, nobody's actually good. Well, but if you are theory. If you are like, the house actually cracks down on you and starts limiting the size of your bet. So all these guys are making new accounts constantly and starting out by making stupid bets so that they look bad.

[Joe Weisenthal]

That's right.

[Tracy Alloway]

And then making the big money.

[Joe Weisenthal]

This actually, I want to like, rant a little bit about this because.

[Michael Batnick]

Turn on the TikTok camera.

[Joe Weisenthal]

No, you have all of these people and they like, they're these cynic. There's professional cynics on Twitter and they're like, oh, the stock market's like rigged and only like the big guys win. And we're creating these new assets, crypto and prediction markets and all this stuff that's not rigged.

[Michael Batnick]

Like old Wall street never get rigged.

[Joe Weisenthal]

But it's like, but like, look, are there issues with the stock market? I suppose, but the US like, real like legacy capital markets is probably the fairest, most democratic legitimate market to have ever existed in history. You pay almost no spread. The like scale of manipulation and insider trading is so marginal. In the US Stock market, if you're really good at investing, they don't kick you off. They don't kick you off the Schwab platform or wherever you trade like it is. And it's rare because if you look around other countries and including very developed countries, I mean, go up north to Canada, like they always have frauds. Every time a country, a company gets big. The entire like Vancouver Stock Exchange, these like Penny. Any junior gold miners that you have no idea.

[Tracy Alloway]

Like US Capital markets UK is another one.

[Joe Weisenthal]

Yeah. The aim is.

[Michael Batnick]

Do you want to apologize to your Canadian listeners?

[Tracy Alloway]

Oh, I can think of one in particular who's going to be upset. Luke Kawa, I'm so sorry. I apologize for Joe's behavior.

[Josh Brown]

Again, Joe is cooking.

[Joe Weisenthal]

But like, seriously, like US legacy regulated capital markets are so good. And the fact that there are so many people sending this message, oh, it's all rigged. Only the big guys could not be more wrong.

[Michael Batnick]

You hear as much of that, though, as we used to hear. I'm not on Twitter for six years, so I don't know, but so smart. Is it the same level of distrust? No, because I feel like now it's all gambling and it's nihilistic and it's like, yeah, I know it's rigged and I'm part of the rigging.

[Tracy Alloway]

I think the nihilism part is important. Right. It's not that people, like, don't think that this is crazy behavior. It's that they all think they can make money off of it despite it being crazy.

[Michael Batnick]

The rig and the rigging. Here's what's so funny about the rigging stuff. The people who probably were complaining the loudest about how it's all unfair and it's the Jews, whatever it is. What actually ended up happening is those are today's Robinhood users. Yeah. And 100% they're giving a penny to Citadel every time they trade. And you know what? They don't give a shit anymore.

[Joe Weisenthal]

Nobody cares about anything.

[Michael Batnick]

Nobody cares.

[Joe Weisenthal]

Like, this idea is like, oh, Citadel.

[Michael Batnick]

Came in for order flow.

[Joe Weisenthal]

Okay, fine, Citadel gets a penny.

[Michael Batnick]

But that's the rigging.

[Joe Weisenthal]

But it's crazy that.

[Tracy Alloway]

Yes. So the HFT scare was like. That was a crazy moment.

[Josh Brown]

Brad was on TV arguing with the guy from bats. It's like, it's rigged. You're taking a penny per trade. It's like, yeah, it's a penny.

[Tracy Alloway]

Do you remember the Michael Lewis book on hft?

[Michael Batnick]

Did you read it?

[Tracy Alloway]

Yeah. There is a passage in there where he describes, like, a guy who's about to place a trade on his computer, and he, like, hovers his arrow above the buy button.

[Michael Batnick]

He almost got scammed for a penny.

[Tracy Alloway]

And then he claims the price. The price moved because he hovered his cursor on the button.

[Michael Batnick]

Oh, my God.

[Tracy Alloway]

Like, that's how outraged people were at that time.

[Michael Batnick]

Can you believe it? The. The bid ask spread grew by half a cent, all because of me. That's the.

[Joe Weisenthal]

I mean, it's crazy because, like, people don't.

[Michael Batnick]

But that was the rigging people. That was what they were complaining about.

[Joe Weisenthal]

Because, like, for a long time, there were no increments of stocks between 1 16th. Right. That was like, before decimalization, it was like fractions. So there was a period where, like, first of all, the bid ask spread was a minimum. Whatever, 16th of it, bro.

[Michael Batnick]

I used to sell people stocks at ten and a quarter.

[Tracy Alloway]

That.

[Michael Batnick]

That we're making markets nine and nine and seven. Eighths by. By.

[Joe Weisenthal]

And then it was a massive, you know, it was like a really big deal that in the late 90s online, you could get a $10 commission. So I have no patience for these people worried about, like, oh, I'm like, Citadel gets a penny here.

[Michael Batnick]

You know, there was this whole category of financial blogger back then.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Whose whole shtick was the markets are rigged, therefore you should not invest.

[Tracy Alloway]

Well, Zero Hedge still exists, so.

[Josh Brown]

So, guys, Vlad. Vlad was on with us two weeks ago talking about predict markets. Kalshi raised a billion dollars in new fund. They had an $11 billion valuation, which is twice the value that it raised just two months ago. They raised $300 million in October, which is insane. On Robinhood's most recent call, the CFO said that prediction markets reached an annualized revenue run rate of $100 million within a year of the launch, which is their fastest in history. And October volumes put the run rate at closer to $300 million. Here's my take on this. As I mentioned, I think the individual gamblers are going to get tired of this. Right. 90% of the volume on Kalshee in October was sports betting because the CFT said, okay, fine, you could do it now.

[Joe Weisenthal]

So that allows them to preempt state laws.

[Josh Brown]

So that was. That was the explosion. But Chris Dierks, this was a Bloomberg article, actually, by your colleague. And I want to give her credit, Liu Wang, she said, or, hey, I apologize. Why? It's harder to tell gambling from investing nowadays. So in the article they quoted Chris Dierks, a pro sports better who used to work for Druckenmiller. Okay. So he works for a company called Novig, a sports focused prediction market company.

[Michael Batnick]

Oh, no vig.

[Joe Weisenthal]

Yeah, get it. No vig.

[Josh Brown]

Oh, I actually didn't even.

[Tracy Alloway]

I get it.

[Joe Weisenthal]

I met. I met. What? I met one of some Novig guys.

[Michael Batnick]

That one escaped you.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Okay.

[Josh Brown]

So he used to work for Citadel and Jane Street. And when it comes to sports betting, in his view, the deck is stacked differently. Quote, I don't want to compete against the smart people. I want to compete against the dumb people. He says what has the highest volume markets in Robinhood is going to have the dumbest customers. And that's where I want to be.

[Tracy Alloway]

Yeah, well, this is the problem, though. Everyone thinks they're smarter than everyone else. This goes back to the idea that no one thinks what they're doing is actually going to pay off in the long run, necessarily. It's all short term bets thinking that you're going to get out before everyone else.

[Josh Brown]

But the difference is you can be dumb and still be profitable over time in the stock market because stocks bias, guess what? Sports betting that ends tonight, they're not biased to go up. It's zero sum. You're not going to make money. So I think people are drunk on this spectacle right now. I do think that it can be a big market. So, for example, if you, if you're a hedge fund and you want to bet that the Fed is going to lower interest rates and you say, okay, so I think that that's going to impact inflation this way and the dollar this way, why not just bet on. Why not just bet on the prediction markets? But guess what? You could do that on cme this already.

[Joe Weisenthal]

So, so I have a few thoughts. So one is like, a good prediction market that could be very useful is like, all right, I have a position on Tesla, but I want to hedge the exposure of, like, their car sales. So you could bet, like, you could bet the car sales. The problem is there's no volume on that market. There's no. Exactly. So there's no volume today. Today.

[Michael Batnick]

That could change.

[Joe Weisenthal]

It could change it, absolutely. But like, as of today, this is not a useful instrument for institutions. Now on this point, like, about what's going to happen is you have to keep bringing in fish into the tank to feed the whales. Eventually people are going to lose money to your point, and then that's going to drop. And what I think is the real risk is because there's no insider trading laws or as such, or is not the same, like you're. You would be very skeptical. You know, there was this incident, I think, this week or last week, where there was a market on who are going to be the most searched person on Google for the year. And someone like, nailed all of the bets. And there's the speculation, the speculation that they were Google. But if you think that there are, like, insiders who, like, really know stuff, why would you ever participate in that?

[Michael Batnick]

Here's a more. Here's a more practical example. There's a bet. There's a bet right now who will win? Warner Brothers.

[Joe Weisenthal]

That's useful. Yeah.

[Michael Batnick]

Yeah, Right. So Netflix or Paramount, if you're. Let's say so if you're a lawyer working on the deal, you owe a duty of care to your client. You obviously aren't going to bet. That's that. But let's say you just talk to people that are involved in negotiations and somebody says, David Ellison so pissed he's going to walk away from the table. I don't know. Is that insider trading? If I bet it on Kalshee versus if I go in the stock market and try to express that using options on Netflix, I mean, I'm sure it is. They'll try to make a case on it. Someone's going to be the example, I guess is what, what, what I would say there.

[Joe Weisenthal]

But like so a market. I mean, I agree and I don't know how the law is ultimately going to shake out. I mean the two things I'll say.

[Michael Batnick]

Is there will be a test case.

[Joe Weisenthal]

And I think that if the prediction market companies should want there to be some regulation because again, if you want to have random people participate in this, it would be nice for them to know that there aren't sharks who have all the inside information who are going to win every bet against them. But the other thing that I'll say like that strikes me as potentially a very useful market. If that ever got like, if these sort of like deal markets ever got to be liquid, it's like, okay, it's right today it's at 65% Netflix, whatever, tomorrow it's 65. That could be a very useful instrument.

[Josh Brown]

That's great for traders.

[Michael Batnick]

The election outcomes are very useful.

[Josh Brown]

Now let's say it's the same idea because let's just say that Paramount wins the deal or loses the deal. Who's to say for sure how that's going to impact the stock? Just that's right on the outcome or.

[Joe Weisenthal]

Hedge out the outcome.

[Josh Brown]

I do think that a few things. I do think that the prediction markets are going to grow. I do think that there will be liquidity. There's none right now. I tried to do a bet and I moved it from 60 cents, like 90 cents. Like honestly there's no, there's no liquidity there. And also there's no way that it's going to. Not no way. I would be very shocked if it does anything remotely approaching equity values or trading like that. Like the idea that it's going to migrate there seems far fetched.

[Michael Batnick]

I am going to make a prediction that you could bet on though. We will see the launch of a prediction market hedge fund.

[Tracy Alloway]

Well, this is what I was about to say, right. So you're seeing financial institutions get into this space. So we had Cliff Asness on the podcast a while ago. They're exploring sports betting.

[Michael Batnick]

The CME is providing liquidity on one of these exchanges.

[Tracy Alloway]

The CME is doing these like kind of weird little contracts where you basically bet on the number going like up or Down Novig.

[Josh Brown]

Novig Novig is a sports focused prediction market company. Like they're there.

[Joe Weisenthal]

So the one thing I will say, and this actually one of these Twitter.

[Michael Batnick]

Know it alls though, that you guys hang out with is gonna.

[Joe Weisenthal]

That's right.

[Michael Batnick]

They're going to say, I am sorry, me and Tracy, I'm so good at knowing how everything in the world is going to turn out that I am willing to charge people 2 and 20% to find out. So I'm going to do it.

[Joe Weisenthal]

So here's something that I think will actually be interesting and it actually gets back to the first thing that we were talking about with OpenAI, which is, I suspect that we are going to see a greater maturation and more liquidity in various, whether they're tokens or contract markets relating to private companies. So that because a prediction market can be structured as de facto equity, right? He's like, is OpenAI going to have a $55 billion or whatever, sorry, $550 billion valuation as of X date or something? And you can start betting that. And then the more narrow you specify the contract, the more that line essentially starts to look like OpenAI stock, et cetera. And so I do think, like this idea that I've been thinking about a lot is I think the difference between a private company and a public company, which used to be a very binary thing. It's going to look more like a spectrum of degrees of publicness, where the spectrum is going to be, on the one hand you're going to have highly liquid companies with a high degree of transparency, and on the other end you're going to have illiquid companies with very, very moderate or very little transparency. And everything would just fall into the spectrum. But it'll all be tradable.

[Michael Batnick]

Well, let's go there right now, because there is a private company that is changing hands on a daily basis in the private markets, and that's SpaceX. There are probably dozens at this point of SPVs or venture funds that bought it from somebody who bought it from somebody. That stock is everywhere. I know lots of people who are invested in SpaceX who have nothing to do with the venture world. It's like sort of exactly what you're describing. It's this combination.

[Tracy Alloway]

I think we're going to say the same thing, which is like the problem with all this opaqueness is you can't tell relationships within the capital stack to each other. So like again, like, you're only seeing a slice potentially of what's going on with that company and you don't know what else is going on behind the curtains.

[Joe Weisenthal]

Well, the other thing I was going to say, we did an episode with the president of Perplexity, and he was talking about how they have to be sort of discriminating. You know, people always want to invest in these companies, but they do not want to let an investor in who is really not actually interested in the company, but just interested in creating a vehicle such that private investors can trade and get.

[Michael Batnick]

That's what happened when Vlad announced tokenized private companies.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

There was a blowback. Yeah. And they store. They sort of stop talking about it. Yeah. Because I think a lot of people who are executives at privately held companies.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Don't you dare list my company. Number one, you're misleading people. They think they're investing in it, and Meanwhile, they're buying NFTs. They're buying, like, a facsimile of a stock certificate.

[Joe Weisenthal]

They're buying a company that owns a company that owns a company that owns a company that owns shares.

[Tracy Alloway]

A shadow of a company.

[Michael Batnick]

So, guys, Also this week, SpaceX said they're moving ahead with plans for an IPO. They want to raise more than 30 billion. This will obviously be the biggest deal of all time.

[Joe Weisenthal]

Yeah. 1.5 trillion at valuation, I think they're aiming for.

[Michael Batnick]

Saudi Aramco raised 29 billion, which I think was the.

[Tracy Alloway]

I remember that.

[Michael Batnick]

The record holder. And this will. This will leapfrog over that.

[Josh Brown]

Is there. Is there that much money in the market for these companies, like, in public markets?

[Michael Batnick]

So I want to do a prediction market with you guys, though. Does this happen in 26?

[Tracy Alloway]

Just the IPO or the IPO plus the valuation? You just said no.

[Michael Batnick]

Oh, no parlays. Give me the bet. Yes or no? What do you think?

[Tracy Alloway]

I'm gonna go.

[Michael Batnick]

How much would you put on.

[Josh Brown]

Hold on. Where is the yes and the no? I would say the no is the no.

[Michael Batnick]

50. 50.

[Josh Brown]

Okay, 50. Okay.

[Joe Weisenthal]

The company is saying we're doing it.

[Michael Batnick]

I should point out the company is saying.

[Josh Brown]

So the yes is 60. Yeah, I'll buy no for 40 cents.

[Joe Weisenthal]

Okay.

[Michael Batnick]

Elon owns 40% of this. If it goes public at a $1.5 trillion valuation, Sam Rowe would say that's.

[Josh Brown]

A lot of money.

[Michael Batnick]

So here's the next. Here's my next question, though. Isn't Tesla the loser? Because right now, the only way to invest directly in elon musk for 99% of the population is Tesla. And now I'm giving you Diet Tesla. Like, I'm giving you an alternative space Tesla well now you could have space Tesla.

[Josh Brown]

Wait, aren't they going to merge?

[Michael Batnick]

Well when one gets into trouble, the other one will buy it. Yes, of course we understand how that works. But isn't that interesting now two Elon vehicles do they. Does the enthusiasm cancel itself out across those two market gaps?

[Joe Weisenthal]

I never thought.

[Tracy Alloway]

That's a good question.

[Joe Weisenthal]

Yeah, I hadn't thought about that.

[Michael Batnick]

I'm very clever.

[Tracy Alloway]

I mean on one serious note, I.

[Joe Weisenthal]

Think it's going to go public. I'm going to take the yes.

[Tracy Alloway]

Yeah. So I mean 420 per share for 20.

[Michael Batnick]

Anyone? Come on. It has to, it almost has to.

[Tracy Alloway]

On a serious note you could see why it's seizing the company, seizing this particular moment which is like government spending is just not in vogue like we were talking about earlier. And so this idea of private companies stepping in to perform government functions or things that were done by government, government bureaucracies or whatever earlier, you're seeing that with NASA, right? Like SpaceX is kind of like the only game in.

[Michael Batnick]

And he has Starlink revenue which is not dependent purely on gov. Although governments are big customers. Is a commercial business there that could be a monster business as more people trust it especially if it's publicly traded.

[Tracy Alloway]

This is the replacement of public services, public entities with private capital and that's. I think that's going to be like a really big trend.

[Josh Brown]

Can I read you something from your, from the one of Bloomberg articles about SpaceX? They expect to use some of the funds raised in an IPO to develop space space based data centers. Well of course, including, including purchasing the chips required to run them.

[Michael Batnick]

Space chips.

[Josh Brown]

Guess what? Like we laugh like that's going to happen. Like I saw that Gavin Baker was saying that with Patrick that there are going to be data centers in space that use the dark side of the moon to cool the liquids or some. I don't know, it was way over my head.

[Tracy Alloway]

We can't even figure out.

[Michael Batnick]

I don't know why but I missed.

[Tracy Alloway]

We can't even figure out how to like reliably cool data centers on Earth though.

[Joe Weisenthal]

Right?

[Josh Brown]

They gotta go to outer space.

[Michael Batnick]

They're not building a data center in space. They're gonna drag one up from Idaho into orbit. They're gonna. I don't. I think the idea is that you're using the sun's rays to power it.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Which is free. I mean once you, once you build it and then, and then you just.

[Josh Brown]

Turn your back to the sun and.

[Michael Batnick]

Then space very cold so it'll be self cooling at the same time. So, I mean, I'm short.

[Joe Weisenthal]

Okay, let's.

[Michael Batnick]

It's obvious, obviously something we should all.

[Joe Weisenthal]

Invest, I think in the next 10 years. I do not think that there will be a data center in space.

[Josh Brown]

Oh, I do. I would bet yes.

[Joe Weisenthal]

Yeah. Okay, that's good. All right, we'll revisit this.

[Michael Batnick]

You would bet that based on what? Just because they're saying it? Yeah, I would have no idea which way to that.

[Tracy Alloway]

Your faith in Elon Musk is he'll.

[Michael Batnick]

Just do it if he's saying he's going to do it.

[Josh Brown]

I genuinely believe that there will be data centers in space. All right, now is it outer space? Now that's. I don't know where outer space begins, but.

[Michael Batnick]

All right, we got a couple, couple more things to bang through with. You guys put. Daniel, can I please have chart 12? I just. We don't spend a million hours on this. This is from Chart Kid Matt.

[Josh Brown]

We were going to segue from prediction markets into this.

[Michael Batnick]

All right, so this is. This is from Chart Kid Matt, who is obviously a part of the compound. Also runs a charting service for financial advisors called Exhibit A. And he is showing that in 18 of the last 26 years, the stock market actually outperformed the average of all of the Wall street strategists. So 70% of the time, actually strategists aren't bullish enough. Doesn't that fly in the face of this narrative that Wall Street's always bullish and always pumping up? It turns out it's the opposite. And I've never seen that. I've never seen it displayed that way. What do you think about this?

[Joe Weisenthal]

It's a cool chart. I mean, it's a great shirt.

[Tracy Alloway]

I have a question. Are those. Are the estimates based on like the macro analysts looking at the s and.

[Michael Batnick]

P500, the guys that have stock markets?

[Tracy Alloway]

So this is key because I think if you're a corporate analyst looking at a specific company, the bias generally is pretty bullish. And I'm kind of amazed that you still hear so many people saying green, great quarter on calls.

[Michael Batnick]

I guess it's like a joker. Gentlemen.

[Tracy Alloway]

It's a joke between them now. Right. But I think the macro strategist, like you're kind of biased to try to find the non obvious story. That's right.

[Joe Weisenthal]

Yeah.

[Tracy Alloway]

You want to make a name for yourself.

[Josh Brown]

The next chart is even better. Daniel, chart 13. So this shows it by year. So the Y axis is the what actually happened for the year.

[Michael Batnick]

We will send you these guys by.

[Josh Brown]

The Way and the X axis. So, like, 2003 strikes me as something really interesting. They expected a 25% gain, and they were right. Like, credit to them for not throwing in the towel after three really shitty years.

[Joe Weisenthal]

Where's 2003?

[Josh Brown]

Top right?

[Joe Weisenthal]

Oh, yeah. Okay, there it is.

[Josh Brown]

Like 2008 as an example. Listen, nobody could see the future, but they expected a 7% return right down the fairway. And actually it fell 40%.

[Michael Batnick]

Very close though. It was. I just, I think it's an interesting. So, because we're in strategist target season now, we have one more on this chart. 14.

[Joe Weisenthal]

The greatest, the happiest time of year, Macro Outlook season.

[Michael Batnick]

It. And I read all this shit still, and I know better. And I still read it because it's. I find it helpful. I think it's right.

[Joe Weisenthal]

Yeah, yeah.

[Michael Batnick]

And that's why they write it. They don't consider themselves to be Nostradamus.

[Joe Weisenthal]

No, they don't. I think it's. I think it's useful. And I think, you know, like, it's good to put a number and most people just, they want to see the thinking behind it. Right. Like, I don't think you're going to, like, dump your macro strategy. Like, oh, you said it was going to be up 9%. It was up 18%. But you want to see, like, what was their reasoning? How did they work through this? How did they bottom. What are their.

[Josh Brown]

I read Playboy for the article.

[Michael Batnick]

Don't forget. Don't forget. The clients want to know what the banks think. Yeah, obviously. Like, we're giving you all this money to invest for us or we're trading with you.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Like, what's your view?

[Josh Brown]

And speaking of Canada, what is Scotiabank's problem?

[Michael Batnick]

All right, wait. So let's.

[Josh Brown]

Come on, dude, they're at 6,378. Isn't the S and P higher? Come on.

[Michael Batnick]

So let's. Let's set this up. This is Wall Street Strategist 2026. S&P, 500 targets. The average target for next year, 7512, which implies from yesterday's close, about a 10% return.

[Joe Weisenthal]

What?

[Michael Batnick]

It's like magic. About a 10% return for the S.

[Josh Brown]

And P, give or take.

[Michael Batnick]

Which relative to recent years, is actually on the bullish side because two years ago, I think the call for 2023 was flat. Yeah. And of course, we went up 30%. So I, I don't know. I find it's interesting to just see where people's heads are at.

[Joe Weisenthal]

Can you just pause for A second. It's insane that, like, we have this thing in America that by and large, like, that. It's like 10% year after year after year. It's just like, free money. No, no, I'm not getting. I just think the returns of the market in America have really been extraordinary.

[Tracy Alloway]

Did you see the bank on that chart? That's like, bang on 10%.

[Joe Weisenthal]

Oh, there was one cubia. Amazing.

[Michael Batnick]

Of course it was. It's a shortcut.

[Joe Weisenthal]

Yeah.

[Michael Batnick]

Can I tell you that 10 years in podcasting, you're kind of like the Simpsons. Like this.

[Joe Weisenthal]

We're still funny, though, right?

[Michael Batnick]

No, still funny.

[Joe Weisenthal]

We're the Simpsons. Except we're Simpsons.

[Michael Batnick]

Like, think about most. Most of the financial podcasts that exist today were started in the last 24 months. Most of those will not be here in 24 months. Okay, that we know. But you guys have longevity that very. Because I'm trying to think of what shows for Lindy. They were. Michael and Ben were early. They were 2017. I felt late, and he felt late.

[Josh Brown]

The only ones who I know were before you is Patrick and Barry and Barry. That's probably about it.

[Michael Batnick]

Wait, was Barry. Barry Masters in business?

[Joe Weisenthal]

Yeah, that was before us. Yeah. Yeah.

[Tracy Alloway]

Although wasn't it a radio show for a while?

[Michael Batnick]

Yeah.

[Tracy Alloway]

Although I guess it doesn't really matter, but it did.

[Joe Weisenthal]

It started before Asterisk in the racquetball. No, Barry. Barry was definitely wrong.

[Michael Batnick]

Well, you got. I mean, you guys are incredible. And, you know, I listened. I don't listen to every single episode.

[Joe Weisenthal]

No one does.

[Michael Batnick]

But anytime it pops up in my feed, I never turn it off because it's always good.

[Joe Weisenthal]

That's very kind.

[Michael Batnick]

So I know. I really feel that way. You guys are. You guys are like two of my favorite people. And getting to listen to the two of you and your guest selection, I would say probably you guys, MEB and Patrick, to this day, the best guest selection. Like, you guys talk to people I've never heard of, and I'm doing this shit 30 years, and you talk to amazing people, and I'm like, who that? Where do they find this person?

[Joe Weisenthal]

That's the most satisfying part of the job, actually. You know, one of the things, you know, it's always fun to have a big name. It's always fun. Of course. Land. You know, I love those guys. It's great to chat with them. But there is literally nothing more satisfying than finding that person no one has heard of and like, oh, that person's amazing. Like, that is. That's the dream. When we find Those people.

[Tracy Alloway]

The thing that I'm quite proud of, actually is that we built the podcast on exactly that. On finding the experts are the best person to talk about exactly, you know, a topic that was in the news. We. We didn't, you know, now we get the big names, but when we started, we definitely didn't. It was, you know, mostly people that.

[Michael Batnick]

You never heard of because you know what else you guys do? You make people famous. Because there are a lot of people who are now considered the it guest on a topic that I heard for the first time on your show wasn't.

[Josh Brown]

The Flex Port guy.

[Joe Weisenthal]

Yeah, yeah.

[Josh Brown]

You guys were the first to put him on.

[Tracy Alloway]

Yes.

[Michael Batnick]

You know, the great analyst covers. Nvidia Stacey was gonna. I heard him on odd lots a year before. Everyone loves NBC. But you guys have done that with a lot of like category people who are now like the go to. But I think you guys have contributed to their.

[Tracy Alloway]

We've had people testify in front of Congress and stuff like that as experts.

[Joe Weisenthal]

Guests call in, talk to the White House during the Biden administration.

[Michael Batnick]

Who's the worst guest you've ever had? Tracy. Tracy, you go first. She's gonna answer.

[Tracy Alloway]

I'm not gonna name a specific name.

[Michael Batnick]

But you have that person in your head. Where's Oz Perlman?

[Joe Weisenthal]

Pull it out of her.

[Josh Brown]

I was just thinking the same thing.

[Michael Batnick]

We need a mentalist in here to pull it out of us.

[Tracy Alloway]

Here's the thing. It's someone who didn't end up coming on the show.

[Joe Weisenthal]

So we're obliged. I know we have one. We made an agreement.

[Michael Batnick]

Yeah, we have one of those Life.

[Joe Weisenthal]

One person. No. Well, one person can't. We really can't say. We're not. Don't try to ask us more questions because we actually made an agreement. There was a incident not that long ago in which we had a guest who was very reluctant to do podcasts and they were sort of like not sold on the premise of podcast, but they're PR person. So I convinced them. Oh, Joe and Tracy are cool, whatever. And they came on.

[Michael Batnick]

It's an older. So it's an older person.

[Joe Weisenthal]

We're not going to say anything. No clues. No clues.

[Michael Batnick]

Okay.

[Joe Weisenthal]

Because we made an agreement that we were. And the person heard our intro and was not thrilled and walked out of the studio.

[Michael Batnick]

Oh, that like jokey talky thing that you guys do.

[Joe Weisenthal]

They.

[Michael Batnick]

They overheard that they were in the.

[Joe Weisenthal]

Room because we always do the intro with the person in the room and.

[Michael Batnick]

They'Re like Jerome Powell, Carl Icon.

[Josh Brown]

Is that sensitive?

[Tracy Alloway]

They basically Said. Said, nope.

[Joe Weisenthal]

And this is not what I signed up for. Yeah.

[Michael Batnick]

Oh, shit. So we never had it quite that bad. We had somebody that we invited and they said yes and then blew us off or. And then we had one person. I'm not going to say the person's name either. Who was so obnoxious cynical that I basically said, I don't care if this person literally invents cold fusion tomorrow, that person will never be in a room with us. So we've had like. But it's very rare.

[Joe Weisenthal]

It's rare. Yeah.

[Michael Batnick]

Most people are so happy to just be part of the conversation.

[Joe Weisenthal]

You know, we had one episode. It was actually. So people have asked us, did we. Did you ever have a episode that you didn't air? And there's been a few, but there was one and it sort of Kanye West. There's been a few. There's not many, but there's been a couple. But this one sort of has a happy ending because there was. Got someone came on. It was just like not a good. It was not a good conversation. We didn't know what to do about it. It. So I sent a email to the guys, like, look, I'm really appreciate you coming in. I don't think, like, the conversation totally worked. It's. Something was just off about the whole thing. I don't think our listeners are going to like the vibe. I think we're just going to shelve this one. And he responded. He's like, thank you. I know. I sort of whipped. He's like, I was not on my.

[Michael Batnick]

Oh, we had one of those. Yeah, we had one of those.

[Joe Weisenthal]

And he's like, thank you for not airing it. It was actually.

[Michael Batnick]

So we aired it now we. You know what? We had some who's such a nice person and they're a huge fan of the show and I think they got really, like, nervously excited sitting here.

[Tracy Alloway]

Happens.

[Michael Batnick]

And I felt really bad for him. I still press publish. I want to congratulate you guys, though, on. On 10 years. It's super cool. What is next in the Odd Lots universe? What are. What are. What can your fans and our fans look forward to?

[Tracy Alloway]

Honestly, I think it's more of the same.

[Joe Weisenthal]

Yeah.

[Tracy Alloway]

It's basically having like, great, interesting, engaging conversations with the perfect guest. That's it. It's a very simple premise.

[Michael Batnick]

You do it better than anyone.

[Joe Weisenthal]

Thank you so much.

[Michael Batnick]

But we're fans and we're just. We're so happy for you. Round of applause for Joe and Tracy. You hear the audience. We can't get enough. Hey, can we show this picture, though? Daniel, chart 18, please. So this is you guys on Instagram. And I mean, you guys look great. You're like a brand.

[Joe Weisenthal]

It's a great photo.

[Michael Batnick]

It's a great photo. That's a real. These are real photos.

[Joe Weisenthal]

We had a bit of cake.

[Michael Batnick]

It makes so much of a difference when a real camera is on.

[Joe Weisenthal]

It really does. I know. Does it elevates. I know. It's like, oh, it's like forget what a real photo.

[Josh Brown]

What were the names of the droids?

[Joe Weisenthal]

That's our team, by the way. You know, I just wanted to say Carmen Rodriguez, Dash Bennett and Kel Brooks did. It's a five person operation only. Me and Tracy tend to get all the attention for obvious reasons. It really is a team effort. So I'm glad that we have that picture.

[Michael Batnick]

That's really awesome.

[Joe Weisenthal]

And that they. Because they. No one. The articles about us and stuff. It never mentions their name. I always feel bad about it.

[Michael Batnick]

That's. That's. I mean, that's. That's super fly. To acknowledge. To acknowledge everyone that's a part of it. And you guys, I mean, work a little bit harder, you might get six people helping on the team. Who, who knows? All right, everybody. If you are not subscribed to odd lots and you like this show, I'm pretty sure you'll like that show. Most of you are subscribed to both, so it's just, it's. It's an amazing thing. And here's to another 10 years.

[Joe Weisenthal]

Thank you.

[Josh Brown]

Absolutely.

[Michael Batnick]

All right, guys, thank you.

[Joe Weisenthal]

10 years on the right.

[Michael Batnick]

Guys, thank you so much for watching. Thank you for listening. Like button. Subscribe button. Thanks to the crew. We'll talk to you soon. That's the warm up I wanted to keep.

[Joe Weisenthal]

All right, now let's start. I don't know if I can do it again.

[Michael Batnick]

Sam.