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- [00:00]
Josh Brown
Ladies and gentlemen, welcome to the Compound and friends. I am your host, Downtown Josh Brown. And I would love to tell you about tonight's sponsor, Public. Public is the investing platform for those who take it seriously. You can build multi asset portfolio of stocks, bonds, options, crypto and more. I have the Public app on the home screen of my phone screen one, no swipes and super easy. I use it for cash, I use it to accumulate crypto. I use it for all different things and it just, it works. I don't know how else to put it. If you wanna find out more about how you can open a public account, go to public.com wat as in what are your thoughts? Paid for by Public Investing Full disclosures in Podcast Description Tonight's show is a big one. I know I say that every week, but they're all big to me. We we talked to Garrett Baldwin about the roots of why with stocks hitting all time highs, young people are choosing socialist mayoral candidates in cities all over the country. So it's kind of hard to understand how we go from, I don't know, millions of brokerage accounts being opened by young people to votes being cast for those who don't believe in capitalism. And Garrett's got some really good insight into what's happening and we trace it back really 30 years and it's a fascinating conversation. So I want you to hear that. And then it's an all new edition of what are your thoughts with Michael Batnick and I. We're in the heart of earnings season. We get into some of the big moves and reactions that caught our attention. We also play a new game, which falling knife stock would you buy? And that was a fun one. So I want you all to stick around. The show is starting right now.
- [02:05]
Michael Batnick
Welcome to the Compound and friends, all opinions expressed by Josh Brown, Michael Batnik and their castmates are solely their own.
- [02:12]
Josh Brown
Opinions and do not reflect the opinion.
- [02:14]
Michael Batnick
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.
- [02:28]
Josh Brown
Welcome back to Live from the Compound. I am your host, Downtown Josh Brown. This summer's Democratic primary for the New York City mayoral race shocked the nation as a candidate who is an unabashed socialist managed to capture the voters from the mainstream of the Democratic Party and win the nomination to run this fall in New York City. My guest today says we need to look at the results of the last 15, 20 or 30 years worth of monetary Policy to try to understand why so many young people and even middle aged people are willing to listen to an anti capitalist message from political candidates, particularly in large US Cities. My guest today is Garrett Baldwin. Garrett is an economist, financial writer and mathematician. He has an extended history of financial analysis, journalism, public relations and consulting experience in hedge funds, private equity, blockchain housing policy, supply chains and public equity coverage. His substack blog, Me and the Money Printer has become one of my favorite reads this summer and I'm so excited to be introducing him to you. Garrett, welcome back. How are you, sir?
- [03:40]
Garrett Baldwin
Josh, thanks so much.
- [03:41]
Josh Brown
I say welcome back. Welcome on the show for the first time.
- [03:44]
Garrett Baldwin
Yes, it is the first time. Thank you so much. I'm really excited to be here. It really is a great opportunity to chat with you today. And I know that you're seeing the shock value up in New York. It's quite a time to be alive.
- [03:57]
Josh Brown
That's one way of putting it. Let's start here with the stock market at new all time record highs and tens of millions of new brokerage accounts having been opened by young people over the last five years. You would think people would be celebrating capitalism, but that's not exactly what's going on. Give us your, give us your overview of what we need to be thinking about to understand this moment.
- [04:25]
Garrett Baldwin
Yeah, I think that one of the big challenges here and you know, I think I want to just point out off the bat, like you can't just say, hey, Jerome Powell is the reason that Mondavi is going to be mayor. But instead you have to really kind of do a little bit of a archeology of Federal Reserve policy and monetary policy. And if people are anti Fed, you know, they'll start back in 1913 and they'll start talking about Jekyll island or they'll talk about coming off the gold standard in 1971 or the start of quantitative easing in 08 or what happened post Covid. I go back to 1993 and I think there were six things that happened in 1993 that really lead us to where we are now. And I think the most important one.
- [05:04]
Josh Brown
Candlebox.
- [05:05]
Garrett Baldwin
Pardon?
- [05:06]
Josh Brown
Candlebox. No, Candle box.
- [05:08]
Garrett Baldwin
Yeah. Alice in Chains. Was that a contributing Wu Tang came out that year?
- [05:13]
Josh Brown
Sorry for stopping your flow. That's why 93. Tell us.
- [05:16]
Garrett Baldwin
So 1993 you had the Clinton tax cap, which basically there was a lot of CEOs were paid in income and now all of a sudden they're going to be paid in stock and options because of the change in the policy you had something called Executive Order 12866, which put Al Gore in charge of supply side policy. Bob Rubin joined the Economic Council. We, that ended. Andrew Cuomo joined the H, joined hud. He was obviously, you know, heavily involved in what happened with Fannie and Freddie. We had the first passive investing ETF ever with the spy. But the big one for me is Jackson Hole. Jackson Hole in 1993 is where the Fed really starts pushing the idea of inflation targeting. And what happened in 1993, there were three major deflationary events, all transpiring at the same time. You had the fall of the Berlin Wall, you had China's ascension into the global, global markets, and then you had the deflation of the Internet. And the Federal Reserve has in, through that policy of 2% inflation targeting, helped contribute to the debasement of the dollar by roughly 55% since then, just on that alone. But if you look at what happened from the 1990s, just look at a very simple CPI chart. Since 1998, hospital services are up 200%. That's just from 1998 to 2018. The prices, prices, right, CPI, the things that matter. Technology goes down in price. The Federal Reserve's job then is to create this inflation. And ultimately what we have seen is a dramatic amount of costs go through real assets. Housing goes up, food goes up, electricity goes up, food and beverage goes up. But the price of a cell phone and a tv, all that stuff goes down. And the continued push on this, every time you see these markets, you know, have a, have a significant sell off, significant drop, the central bank steps in or we see accommodation policy to help prevent deflation and help prevent a debt spiral. And as a result it ends up, we just end up pushing the markets higher. So at the same time, you have this entire system built on the back of constant inflation targeting, lots of leverage, asset prices continuing to rise. And a group of Americans who have never been able to partake in that asset price boom and, and they look around and I think the thing that we were pointing out was there was a $29 sandwich in New York. And everybody turns around and says, you know what? My, my housing's up, my, my rent's up. I went to college, I'm not able to get this job that I wanted. Let's burn it down. And they're looking, they're looking at Mondami saying, hey, you know what, at least your rent's going to be frozen and your, and your buses are going to be free. Now we know what happens when the Government runs grocery stores. It doesn't end well. But at the end of the day, you know, you have a, you have a generation of people who are looking around saying, I can't afford this and I'm, I'm willing to just blow the whole thing up as a result.
- [08:06]
Josh Brown
Yeah, I actually think it's multiple generations, I think so. You have a stat where you point out that post, that 1993 moment, and as a result of one of the changes that you mentioned, CEO to worker pay went from 100 to 1 to 400 to 1 in six years. So that's stock based compensation. That revolution where the whole economy became about the stock market. You don't mention directly the centricity of 401k as the nation's new retirement scheme and the sunsetting of all of the, of the defined benefit plans and the, and the kind of like the pensions and that kind of fading away and companies switching over. But basically like Sometime in the 90s, we decided the stock market is the future. And if you're, and I don't think this was deliberate, but the way it turned out is we now have stock market Americans and everyone else. Stock market Americans work for companies that are publicly traded. They invest all of the money that's not in their house in the stock market and many of them are being compensated via stock options. And they are living in their own world. They're able to afford things and plan for the future and not worry about retirement as much. And if you're not a stock market American, you're looking around and it's what the right, how much does this cost?
- [09:43]
Garrett Baldwin
Right.
- [09:43]
Josh Brown
Like how am I, how am I supposed to live? And again, I don't think that was the exclusionary part of that was deliberate, but it's, it's also undeniable. And I think that's really like this, a summation of where all of this has gotten us. And for some people it's great. Myself, my clients, probably yourself. And for a lot of people it reminds me of the Pink Floyd song, I think it's time.
- [10:11]
Garrett Baldwin
Yes.
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Josh Brown
You've no one told you when to run. You've missed the starting gun. I think if you went back in time and told people in 1995, dude, fund the 401k or find a company to work for that offers one, you could have saved a lot of people a lot of difficulty.
- [10:29]
Garrett Baldwin
I think it goes back to some other elements of this. I mean, look, we can talk about, you can talk about treasury policy as well. And I've written about that extensively and like the impact of T bills and how that's led more leverage in the financial markets and basically like we now live in an environment Josh, where we're having these like one big significant event a year in the financial system. Like a significant one. Not just Covid, but the guilt crisis. You had the Archegos event, you had what happened with Silicon Valley bank. You then had you know, the, the Nikkei move last year which for some reason we, we don't even talk about that, which is crazy. You know just the Nikkei falls the furthest 1987 and we don't even mention it. That was a year ago, like today. And the funny thing, every time that you see these flare ups in the bond market, what happens? Two things are occurring at the same time every time. First you have this accommodation that is, I don't want to use the word bailout but the accommodation that comes, it might not be quantitative easing but it's leading to quantitative easing outcomes like the bank, the bank lending. The bank lending support was not QE but it aimed to achieve the outcomes of what QE does and the efforts on the.
- [11:42]
Josh Brown
Which is what, which is what stifles volatility stability and reintroduce stability, but stability. The outcome is the rich getting richer.
- [11:52]
Garrett Baldwin
Yes. Because to. So if you. There's an article that I wrote called the 1% pattern and it basically is just about how the market will sell off. And then you have this period where there's no, no buying market pops. We get up to like the 20 day moving average and then funds sell right back into that and then we get this big move down that happened April 7th and people start talking about the Great Depression on April 7th. Well, two days later we get a policy accommodation and there's always a policy accommodation. And what does that accompany? Massive levels of insider buying at the corporate level. The insiders have called the bottom of every single downturn since 2008-208111-51820, 22, 23, 24 and now 25. And they're stepping in and they're buying their own stocks and they're benefiting from it. While everyone else who thinks that this stock market is some like beautiful wealth machine, they're panicking and they're selling on April 7th. And then the president comes out and says great day to buy and everybody buys at the same time. The policy is accommodative and now all of a sudden the market rips back to all time highs within a period of two months.
- [13:00]
Josh Brown
April 7th to me stands out because it's not really a policy accommodation. Sure, it's a softening of the rhetoric that had scared everyone starting at the end of March. And I, but I do see, I do see your point. Like a really great example of all of this for me is the early 2023 bank panic revolving around Silicon Valley bank and a couple of other banks that basically there was like an Internet driven run on these banks. But the end result is the fdic. No act of Congress, no one votes on this. The FDIC just decides, remember when there was a $250,000 limit for, for us to insure deposits? It turns out there is no limit. No one's deposits will be affected.
- [13:55]
Callie Cox
Right.
- [13:55]
Josh Brown
We're going to resolve three or four of these stupid banks. We'll punish a couple of crypto banks while we're at it. Who's going to stop us? Right? And then all of a sudden it's like, oh, why would I panic? The FDIC just said everyone's good. That's like a really. That's not the central bank, that's the fdic. But to see kind of, it's the same kind of idea where like if you're wealthy in this country, you're probably not going to get screwed around with.
- [14:21]
Callie Cox
True.
- [14:22]
Garrett Baldwin
And you're going to have a K shaped recovery every single time. And the thing about this is there was this period of time where I believe it was around the 7th or the 8th where Janet Yellen comes out and she says she's still doing her tour and she's over in Australia and she is asked about inflation and she blames supply chains, not the fact that they printed 40% of all dollars in existence after Covid. But she said, well, we had a number of hedge funds, leveraged hedge funds that were unwinding bond positions. And no one asks, wait, why are all these hedge funds loading up on the safe asset? And that's the one thing about this. It seems like every single crisis that we have is always around the safe haven asset. It's the gilt bonds, it's the ten year Treasury. And nobody had the forthright forward thinking to say, hey, why is this basis trade there in the first place? Because you need $850 billion to ensure that we keep yields suppressed. Why are we doing all this stuff with the genius act in order to ensure that we have, you know, this buying on these shortened tubels. No one asks these questions. And the reality is that yes, you're, I believe you're right. You know, this was not a similar type of policy move that they did say post Covid or during 2008. But it certainly was enough to provide that stability and get people to stop freaking out about all the unwinding that was happening. And having all correlations go to one where bonds and stocks are falling at the exact same time.
- [15:57]
Josh Brown
Is the genius. Is the genius of the Genius act that by promoting this stablecoin ecosystem we're introducing millions of new buyers for the T bills that are supporting the stablecoins and comprising the portfolios of the stablecoin issuers. Is that I think, is that what you're getting at?
- [16:18]
Garrett Baldwin
I think that's exactly what the end goal is here, right? To provide.
- [16:21]
Josh Brown
Sounds like a win win.
- [16:22]
Garrett Baldwin
It does, sure. But there was a period of time and I don't remember, I don't know if you remember this though in like 2014. So I almost took a job with the USDA and I went and I talked to them about it and you know that like every, the most serious insider, insider buying scandal is you know, involving the lamp, involving the shades in the USDA and, and people were giving out price signals ahead of it and that's, I don't even know, I don't.
- [16:47]
Josh Brown
Even know about that one.
- [16:48]
Garrett Baldwin
Oh, it's a wild, it's a wild story basically. Like at some point in the 20s or 30s before the farm prices would come out, they were, people were like moving the, the, the curtains up and down effect and legit and like the USDA is still, they're still like panicked about it. And I didn't want to take the job because one, I couldn't talk about markets anymore because I was going to be focusing on farm prices. But the other side of it was I said well you know, what's my retirement? What's my retirement? What kind of stocks can I own? And they said none. They said you basically have to invest in 30 year T bills or 30 year treasury bonds. And there was a period of time where the United States government, Obama wanted to create something called the my RA where basically they were going to create retirement accounts for everybody, but it was only in long term U.S. treasury debt. So it's crazy, right? But the point of that is that they're constantly looking for ways to ensure that there is ample demand for the currency or for, for our debt. And they're getting more and more exotic with it each time. And genius act does that. The basis trade is a method to, you know, ensure that there's persistent demand at a time that China and other foreign countries are diversifying away from U.S. debt.
- [18:01]
Josh Brown
Garrett, is it a conspiracy or is it just the system doing what's best to prolong the system?
- [18:10]
Garrett Baldwin
I think, I think the, the thing that I always say is when you are looking at a system, judge it by its outcomes, right? So if the outcomes of the market are persistently to ensure stability and to bail themselves out, that's what the system's designed to do. And I think, I don't think that it's a conspiracy. I just think that people in Washington really are political animals who are constantly looking to survive and advance. And once, once they're out of the Treasury Department or once they're out of the Fed, it's no longer their problem.
- [18:40]
Josh Brown
We have data indicating that the number of millionaire households in this country is absolutely exploding in the current era. And it is not fair to say that the stock market is deliberately excluding the middle class or holding the middle class back from becoming the upper middle class or the upper class. That's happening all the time. We just saw last week a situation where Figma, which is a software startup. Former. Former software startup, now a software giant. This is a company that had a deal on the table to be acquired by Adobe for 20 billion. The UK regulators, antitrust regulators said no. Adobe was forced to pay $1 billion breakup fee. And now three years later, Figma comes public, triples on its opening day. It's worth 71 billion. I was on the New York Stock Exchange when it opened on Thursday and I was surrounded by what looked like thousands of figma employees, all of whom I'm guessing were very generously compensated with shares in figma pre ipo.
- [19:52]
Garrett Baldwin
Right.
- [19:52]
Josh Brown
You, I watched thousands of millionaires being created in real time three days ago. It's so hard for me. Now I understand it's only thousands of people, not millions, but it's hard for me to square these two ideas. Like young people have never thought of the economy as being less affordable. But meanwhile, you've got armies of young people at thousands of companies who are compensated in stock and their net worths, at least on paper, are rapidly advancing. So like, what is the, what is the tension between those two ideas? Or is it just different groups of people and they don't necessarily have to overlap?
- [20:34]
Garrett Baldwin
I mean, I think, I think it's just different groups of people. And you go back to the fact that, you know, we.
- [20:40]
Josh Brown
They're all college educated, I guess, the people that are on for the exchange.
- [20:44]
Garrett Baldwin
Yeah, but like college education is a, is a unique thing as well. Right, because the colleges are cost of tuition went up 180% between 98 and 2018. I did a piece for Modern Trader a couple of years ago where I was analyzing return on investment of colleges and there's something called free op. And they basically go through like all of the, any university, any of the, any of the, any of the degrees that you want to see, you could see your return on investment. Who, who does very well. Engineers, economists, people who studied like journalism at certain universities. The people who don't do well. Right. Business degrees. But the people who don't do well, Gender studies, acting, drama. There's a. I went to college in Chicago.
- [21:27]
Josh Brown
Isn't that intuitive? Right. Sure.
- [21:29]
Garrett Baldwin
But, but I don't think that these things are even explained to people early on. Right. So you can create a sense of being bitter about it. If you, if you go to a university and you pay a half a million dollars and the return on investment of your, of your university is negative 500,000 and you're in this level of debt, yes, you can make the argument that you did this to yourself, but the reality is the United States government will, you know, won't let a kid, an 18 year old have a beer, but they'll give them $250,000, no questions asked, to go study at a university. And now they're on the other side of this. And that's, that's a serious issue that has not been addressed at the university level and certainly won't because of the incentives that are tied to it. And again, I think it really comes down to who, you know, how you get in, how you get into some of these places. There's a, you know, one person down the streets making a million dollars and the other person's barely, you know, above water. And, you know, maybe there's 10 people who, who are barely above water and can't pay their rent. Well, guess what? Those 10 people have 10 more votes than that person making a million dollars. And that's how you end up in the situation, I believe, like you are in New York, where you're seeing this in the boroughs.
- [22:40]
Josh Brown
So walk me through this. If, if in fact Mamdani wins, which, you know, I don't, I don't have any edge on that.
- [22:47]
Garrett Baldwin
Sure.
- [22:48]
Josh Brown
First, he won't be, he won't be the only socialist mayor of a major New York City, of a major US City. This, so this is something that you see repeating itself all over the country. Talk a little bit about some of the other examples of this.
- [23:03]
Garrett Baldwin
Yeah, I mean, look, it's, it happened in LA with. With Karen Bass. She's. She's a, you know, has praised Castro in her life. You have the mayor in Chicago, and Chicago's a downright mess. You know, fiscally. I think that city's relying on a bailout at some point, and they continually will demonize. It's funny, you know, I used to work and live in Chicago for a number of years. They wanted to go and create a tax just on every single transaction at CBO and cme, like, basically to the point that the tax was more than the actual spread was. And they just said, you know what? Screw you. We're going to move to. We're going to go to Kansas City, we're going to go to Miami. We don't need this.
- [23:40]
Josh Brown
Go to the cloud or get right through the cloud.
- [23:43]
Garrett Baldwin
You don't need it. So, you know, this phenomenon, I think the issue is you're seeing it in these cities. And I think there's one important point that I didn't point out. You can go back to this concept of the Cantillon Effect, right? So whenever new capital is created, it always benefits those who are nearest to it. Well, where does cap. When capital is created, where does it go? It goes to our financial centers. It goes to New York, it goes to Chicago. It goes to these places where that money is going to be introduced into the system. And the benefits go to the shadow banks, to the hedge funds, to the private equity groups, to JP Morgan, all of these institutions. And what does that money end up doing? It goes into real assets. It drives up the price of real estate. It drives up, you know, costs of everything else. And everyone else who is in that ecosystem is now looking around going, why the hell did the sandwich just get to $29? And I don't. Look, I'm not sitting here advocating for socialism. I'm the furthest. Furthest from that in the world. But I think it's important to take a step back and try to assess and understand the mindset of a person who would follow that type of political.
- [24:49]
Josh Brown
All right, so let's try to do that. So let's try to do that. This is not the mayoral election. This is the Democratic primary, which is a subset of the very small subset of the people who will actually go to the polls to vote for the mayor. So even if you think directionally, it's like, you know, you know, we don't. We don't really elect a lot of Republican anything in New York City, obviously. Sure. So. So he's sort of in pole position, just Given like, the popularity of Mayor Adams right now, or I should say the unpopularity of Mayor Adams right now, and Cuomo may or may not run again as an independent. We don't know what exactly what's going to take place. It'll be, I think it'll be wild no matter what. But here we have somebody who's got 16,000 historical tweets, many of which are saying things like defund the police, which he doesn't say anymore, talking about freezing prices, controlling rents, starting municipal supermarkets, which, you know, is kind of like a throwback to one of, to, you know, Moscow and Soviet Russia.
- [26:02]
Garrett Baldwin
Can I, can I, can I just say one thing about that? Because, look, the one thing I will say, if you have friends who are from Europe or you have anyone who comes to the United States for the very first time, take them to a grocery store and watch their eyes. My friend from Switzerland just came over and he's like, he said, we went to a Wegmans. He's like, I've never seen anything like this. There's just the abundance of food. It's one of the things that people who come here the first time in the United States notice right away. And the ballet of a, of a supermarket is unlike anything. You walk through a supermarket, all the boxes are taken care of. You have all these reps who go around who are taking care of their little space. And it's a very slim margin business.
- [26:44]
Josh Brown
And it's a one, it's a 1% business.
- [26:46]
Garrett Baldwin
Right, right. So, so then. All right, well, let's, let's, let me tell you, I mean, I've spent enough time in Buenos Aires to have, you know, been in an environment where the government is heavily involved in the food. In the food. Yeah, it's not good. There's shortages of everything. And I have a very hard time believing that, you know, you're going to have this, you're not, you're going to have that type of ballet. It's just going to be, it's unfortunate and, you know, it'll, it'll be great for the first six weeks as, as all of these programs are, and then all of a sudden it will have decay because there won't be any profit incentive whatsoever to improve it.
- [27:18]
Josh Brown
To play devil's advocate, what's the big. What is my, is actually, I'm not playing devil's advocate. This is my actual opinion. Who gives a shit?
- [27:25]
Garrett Baldwin
Right?
- [27:25]
Josh Brown
Let them, let them, let them open, Let them open some, some lower cost, lower priced supermarkets in areas that the people living there need them. Quote unquote, need them and let's see what happens. Why is it like, like, of all the, of all the crazy shit we spend money on in New York City, is that really the biggest risk we're going to take? We're not, what we're not saying is that all the Whole Foods have to convert. Right. We're saying, I think they said there are 16 neighborhoods that are screaming out for affordable food.
- [27:54]
Garrett Baldwin
Right.
- [27:55]
Josh Brown
Do it. I don't care.
- [27:56]
Garrett Baldwin
Sure, sure. But, but there has to be, there has to be a mechanism in place to make it, to make it sustainable. I think that that's the key thing. Like, no doubt about it. I mean, you have food deserts all around the country. And I live in, I live north of Baltimore. And you know, people rely on like the dollar, the dollar general for, for food. That's, that's a problem. But at the end of the day, like, it's not going to be my, my, my thesis is, yes, it'll be a big, it would be a big announcement. And then at the end of the day, you know, it's just going to be, there's, there's not going to be a motive in place to keep this thing sustainable.
- [28:30]
Josh Brown
Extreme right, the performative, Twitter active right, is rooting for these supermarkets to be robbed. That's really like, that's what, what they really want to see is the supermarkets get looted so they can say, see? Told you so. These places are food deserts for a reason. They don't deserve to have nice things. Taxpayer supportive. All right, so that's, that's some ugliness that I just wanted to get out of the way.
- [28:53]
Garrett Baldwin
No, no, no, I, I, I, I, I firmly agree with you. I mean, I, you can see that already. I'm just viewing it from the perspective of, you know, the sustainability of the concept.
- [29:01]
Josh Brown
So.
- [29:02]
Garrett Baldwin
No, you're right.
- [29:03]
Josh Brown
Okay. It's wild that the same city that contains Wall street could also contain so many people who think the best thing that could happen is for all of that money and financial activity to be driven to Florida. What are people, when people pull the lever for somebody espousing the policies that Mamdani espouses. What, like, what are they, what are they thinking? They, like, they can't actually believe that we should abolish all of this financial activity that has made New York City in many respects, not all respects, the envy of the world. They can't actually think that that's going to make things more affordable.
- [29:41]
Garrett Baldwin
Sure.
- [29:42]
Josh Brown
Or give them cheaper apartments or a better quality of life. Can they actually, is it not drive it out, but just tax it enough that it stays, but that there's more money to distribute? Like what, what do you think is going through these people's minds?
- [29:57]
Garrett Baldwin
I, I honestly think that at the end of the day, it's a, it's a, it's an ugly world in terms of how things have shifted. And I don't think it's just financial. And I'm not saying that all Mandami supporters think this way, but you've seen the, you've seen the rise of like the, the, the cheering of what happened with United Healthcare and now most recently, you know, the, the murder in New York, Blackstone, where people are legitimately saying like, well, this is a, this is a company that exploits people in housing and things along those lines.
- [30:24]
Josh Brown
I think those people are still, I know that those voice, those events get amplified on social media.
- [30:29]
Garrett Baldwin
Sure.
- [30:30]
Josh Brown
I think that's still fringe.
- [30:32]
Garrett Baldwin
I don't know. It is.
- [30:33]
Josh Brown
I don't think those are commonly held beliefs that. No, no, no, UnitedHealth CEO had it coming.
- [30:37]
Garrett Baldwin
But, but it, but it certainly is, it certainly has, has trickled into the, into the world of the mainstream party. Elizabeth Warren said something along the lines of, you know, violence is never the answer, but, and, you know, then said something along the lines of people can only be pushed so far. And you know, this is, this is where you, you get into these bigger and broader conversations that are uncomfortable. But the reality is that people look around, they see the economic policies that are, that are in play, they see that they're not getting ahead and they, they view it through the lens of there's got to be something different. Let's just try something different.
- [31:16]
Josh Brown
I agree.
- [31:16]
Garrett Baldwin
And that there were people in there were, you know, they were interviewing a woman in New York and they, she, they said to her, do you think that these are good ideas? Do you think the government run grocery stores are ideas? She goes, no. And then she said, do you think that socialism would work in New York? And she said, no. And then they said, well, why did you vote for him? And she said, I just wanted to try something different. Which, yeah, you know, that. And that, and that, that's just a, that's just a human reaction of just, hey, let's try something different. Even in the event that it ends up being worse, it's just, you know, people are throwing their hands up.
- [31:51]
Josh Brown
Garrett. Part of me feels like this isn't, this is, it's a new version, but it's nothing new. So the advent of the suburbs during the Cold war, in the 50s and 60s, the age of Eisenhower, there were very deliberate policy choices that were meant to push people, middle class people out of the cities into the suburbs. They built the suburbs, they built the interstate highway system. And one of the big ideas behind all of that investment and, and policy was that once you own property, you're less susceptible to becoming a pinko. They want, they wanted, they wanted people to be property owners because renters are more susceptible to the message that capitalism is, is bad. I mean this is like, this is well documented. It's not my theory. And they largely accomplished this and unfortunately they did this along racial lines, which is a whole other conversation that we don't have time for. But important. But the cities having young people who are not owners of anything that as a result have Marxist leanings. This is not like a 2025 phenomenon. It's just come roaring back, I think because of the inflation. And so I want to get back to the Fed's culpability here. Right. I think missing the moment in 2020 and 2021 and dismissing the rising costs of goods and services as being transitory is one of the all time gaffes. And the Feds had many, and, and you know, it's not 100% on Powell, but he's the guy in the seat. I really think that, I really think that that's the, the proximate cause of the Mamdani phenomenon. Now it's not that long ago that we had the highest rates of inflation in 50 years. I think you'd agree with that.
- [33:49]
Garrett Baldwin
No, I certainly agree. I think something fundamentally changed. Look, we had, post 2008, you had QE. You had the strong relationship between the influence of quantitative easing and the performance of the S&P 500 from 2008 to 2020. I think the social contract drastically changed after 2020. And once again the idea that you have massive levels of inflation that once again, like, you know, do you necessarily believe that, you know that that cpi, the CPI calculation, there's something called the Chapwood Index, for example, which is a private inflation measurement. I don't know if they do it anymore, but they were measuring it post Covid and basically all the Chapwood index does is they went into, they go into major cities and they look at the price of the top 250 things that people buy. And the Chapwood index shows that in the city of New York the things that people buy have been increasing and compounding by at least 12% since 2017.
- [34:47]
Josh Brown
I believe I actually, I believe it. Right.
- [34:50]
Garrett Baldwin
So, so, you know, this is exactly the point is that you hear people saying, hey, you know, inflation's not as bad as, as it is or it's the result of supply chains or it's, you know, whatever the excuse is, there is no ownership for what the Fed does. And the other thing that I think is really critical, there was a survey done. Only 6% of Americans actually understand what the Fed's job is. They actually understands the dual mandate. And then I would say that there's probably an even smaller percentage that would include you and I that know that the Fed is also responsible for providing a backstop to global markets with liquidity swaps and things along those lines to ensure that the stability of, of, of, of the US Dollar internationally. So people don't know what the underlying thing is. They don't understand monetary policy because monetary policy is one, boring and two, complicated. And as a result of that, they're going to look around and they're going to blame their neighbor, they're going to blame somebody else or they're going to listen to somebody say, hey, this is corporate greed. It's only corporate greed.
- [35:54]
Josh Brown
Yeah, it's, I think, I think the Fed does not have control over things like the, the availability of how many apartments are being built in a city.
- [36:02]
Garrett Baldwin
Sure.
- [36:03]
Josh Brown
Think the Fed can't do anything about the housing supply or lack thereof in 2022 and 2023 when everybody wanted to buy a home. Like I do think that there are huge components to the cost of living that fall outside of the purview of monetary policy, at least directly. So, so there's one dimension of that that I think we should at least mention. I also think New York and Miami are extremely unique given to the financialization of, of the societies of those places. And when you put overnight interest rates at five and a half percent, you actually introduce a new wealth effect into, into these upper, let's say the top 20% of households. Now their cash is earning them more cash.
- [36:50]
Callie Cox
Right.
- [36:50]
Josh Brown
So, so now they have cash bounce that they're the cash they're holding in the bank or in money market funds in a brokerage account. It's like a geyser spitting out more cash. And that's the risk off portion.
- [37:02]
Garrett Baldwin
Correct.
- [37:02]
Josh Brown
Let alone what their stock portfolios are doing. And the middle class owns houses and cars. That's their, that's the, that's where their wealth is concentrated. The, the upper class owns the stock market and has a lot of cash. So.
- [37:17]
Garrett Baldwin
Yes.
- [37:17]
Josh Brown
So higher rates from the Fed actually were counterproductive in Miami, in New York, you're worried about the cost of, you're worried about housing affordability. You're giving people who have millions of dollars in cash, millions more dollars, 100%. So I don't even know if higher rates or the Fed being more aggressive is actually the answer to these price increases in the cost of living.
- [37:44]
Garrett Baldwin
Two things, two things to your point. One, there was a study that was done, I believe by Freddie Mac, maybe it was Fannie, and it was a couple years ago. There are 25,000 regulatory bodies in the United States that oversee the zoning of housing. So municipal, local, state, county, federal, all the way up, 25,000. So there's your first issue. Secondly, I completely agree with you. There are things outside the Fed's control. And I've talked about Executive Order 1288, 66, which basically al Gore got put in charge of anything that was significant in the United States. You have to run through this lens of like whether or not it was environmentally viable. And then when Obama got into it, then became about like, you know, is this, is this roadway or is this new big refinery, this big project, Is it equitable? Like it's, it kind of got a little, a little silly. But then you have, you know, the elements like passive investing. How many, how many stocks, how many ETFs is Tesla in? Like 500. And you know that, that provides a little, a floor of support for a lot of these equities. So, you know, price discovery has long been out the window for me since at least 2008, but definitely post 2020. And if we look at this kind of broader environment, you know, it just, it goes back to the fact that a lot of this, a lot of capital has been pushed into the financial system over the last 15 years. And there is a direct relationship between the amount of quantitative support and easing that the Fed has done and the asset and the assets of the top 1%.
- [39:23]
Josh Brown
Or the intentional policy driven quelling of volatility.
- [39:27]
Garrett Baldwin
Correct.
- [39:28]
Josh Brown
It's just. Yeah, so we're right. So here we are at 22 times earnings on the S&P 500. Every sell off is a V shaped recovery, an opportunity for the rich to get richer and insiders to capitalize on the fears of lesser aware people and do that over the course of 15 years and you end up where we are and we'll have a communist running city that contains Wall Street. All right, Garrett, we've gone long. You've got a gigantic brain and I love to pick it. I'd love to have you back. Sometimes I want to tell people where they can get your insights on a. You're writing at a furious pace by the way. What are you, what are you daily now?
- [40:09]
Garrett Baldwin
Yeah, so I write, I write a lot. I write a, I write a morning piece that's a market breakdown. So just real quick, just to give you a recap.
- [40:17]
Josh Brown
Yeah.
- [40:17]
Garrett Baldwin
I focus on three things at a very, very macro level. One is liquidity and the way that, that I focus on that is Michael Howe's work and Posner's work. A lot of focus on the shadow banks and how that has been a real driver of equity markets for the better part of the last 15 years. And I highly recommend that then I focus on momentum. So momentum is a, is a basically a math equation of breakout stocks versus breakdown stocks. And when that goes negative that, that reading, that's where I start to pay attention to what's something called the fngd which is an inverse ETF around fang debt. And whenever this thing breaks out above its 20 and it's 50 day moving average, be aware nothing really good happens when that happens. And then I start looking for the opportunity to, for like a short term bottom or, or you know a reversion. I look at when the insiders step in and they buy. And those are the three major things that I focus on each day.
- [41:11]
Josh Brown
Where can people, where can people subscribe?
- [41:14]
Garrett Baldwin
So me and the money printer is the daily free and we have a, we have a paid letter called the Capital Wave Report which covers those three specific things. I'm also on Theo Trade. I do a morning show on Theo trade at 8:45 every day as well. So I, I stay very busy. I, I love the markets. I, I view the.
- [41:31]
Josh Brown
Are you having fun?
- [41:32]
Garrett Baldwin
I love it. Yeah. I mean again the story of the world's told through markets. So that's, that's why, that's why I do what you, I do and I think that's why you do what you do as well.
- [41:39]
Josh Brown
100%. It's been great talking with you and we'll do it again sometime. Ladies and gentlemen, this has been Garrett Baldwin. Thank you so much for watching. Please go ahead and smash that like button. Make sure you're subscribed to the channel or the audio podcast and, and we will talk to you soon. All right. All right. 5:00 clock Tuesday. You know what that means. It's time for an all new edition of what are your thoughts? First time viewers, first time listeners. My name is downtown Josh Brown. My co host name is Michael Batnik. Michael, say hello to the folks.
- [42:34]
Callie Cox
Hello, folks.
- [42:35]
Josh Brown
Can we explain the T shirt? Because I'm. I'm loving it.
- [42:38]
Callie Cox
All right, so I got an email a couple of weeks ago. Hey, why no Grand Rapids hedge T shirt? I don't know why not? So I went to ChatGPT. I said, make me a T shirt with a tidal wave and the word Grand Rapids hedge over it. So it initially started out as a wave for the rapids.
- [42:54]
Josh Brown
Yeah.
- [42:54]
Callie Cox
We replaced it with the bush. So now we've got a hedge, Grand Rapids.
- [42:59]
Josh Brown
But why isn't Grand Rapids Hedge for the people that don't know?
- [43:02]
Callie Cox
All right, so Ben is a beta male. He doesn't give opinions. He 50, 50s, everything. He's on the one hand. And on the other hand, we call it a Grand Rapids hedge. When you say a lot of, you say nothing. Shout out to Ben Carlson. It's a Grand Rapid.
- [43:12]
Josh Brown
Lives in Grand Rapids.
- [43:14]
Callie Cox
Yeah, that too.
- [43:16]
Josh Brown
That's awesome. So great. Does he have one?
- [43:18]
Callie Cox
Yeah, he does.
- [43:19]
Josh Brown
He has one.
- [43:20]
Callie Cox
Yeah.
- [43:20]
Josh Brown
All right, guys, on tonight's show, as we do every week, we will go through the biggest events and happenings in the market. Right now, I'm super excited for today's show. We have a sponsor. But before we get to the sponsor, I want to let everybody know. August is portfolio review month at Ritholtz Wealth Management, to be very clear. Listen to the giraffe, folks. Portfolio review month. Basically, it's almost impossible for us to find time to speak to, you know, as many people as we would like to during the course of the year. Things get a little bit slower in the summer, but not really, to be honest, this summer. But we are carving out some time to talk to some of you who have been sitting on a portfolio for a long time. Not really sure what's happening, not really getting advice or maybe getting advice, but not sure if that is good advice. And we want to give you an opportunity to reach out, talk to a CFP and see if you could be doing things differently with your financial plan, with your portfolio. So now is the time you can go ahead and hit the link that Nicole will put in the chat or the link that I believe will be in the show notes or in the video description. And we're standing by. We're ready to talk. Okay. We got a full house in the chat tonight. Chris Hayes is here. Magnus Giancarlo, Cliff is here. Georgie, all the regulars also have some new folks and some new faces here that I would love to say hello to. Steve Z Micro gx who else is in the house tonight? Michael Whitam. Welcome. Good to see you, dude. H we2k seabass23. It's. It's a veritable rogues gallery. Doc, I see you. All right. Everyone's Jay Luther. Everyone's good. All right, so Public is the sponsor. I use the Public app personally. So does Michael. It's on the home screen of my phone. Public is for people who take investing seriously. Do I have that right, Mike?
- [45:25]
Callie Cox
Deadly serious. This is not a game. This is real business, not funny. Business is serious stuff we're talking about.
- [45:30]
Josh Brown
Look, you can do very basic stuff, like a 4.1% APY on your cash with no fees or minimums. You can transfer a rollover IRA in from a 401k. You can open a brokerage account.
- [45:43]
Callie Cox
Wait, can you get a match? Could you get a match?
- [45:46]
Josh Brown
You can earn a 1% match on IRA deposits, transfers, and 401k rollovers. And the reason I like the app so much is how easy and fast it is. Like, you could be up and running in minutes, and in 2025, that's an important thing. So go to public.com w a y t to learn more. Tell him Josh sent you. Tell him Michael sent you. Paid for by Public Investing. Full disclosures in podcast description. All right, we got a lot of housekeeping out of the way. I feel pretty good about that. Oh.
- [46:18]
Callie Cox
Oh.
- [46:21]
Josh Brown
Who could it be? It appears we have a surprise.
- [46:25]
Callie Cox
There she is.
- [46:27]
Josh Brown
Ladies and gentlemen, say hello to Callie Cox. Callie's the chief strategist at Ritholtz wealth and one of the finest investment bloggers currently in the game. Published something awesome this week that everybody read, and her site is called Optimisticali, which is perfect. If you know Callie, you know that's. That's her jam. Welcome to the show.
- [46:52]
Michael Batnick
What's up? I want you to know that I literally pushed the doorbell.
- [46:56]
Josh Brown
Well, I mean, how else will you make it ring, right?
- [46:59]
Michael Batnick
I know, exactly.
- [47:01]
Josh Brown
We don't have a ring Cam, so we would have let you in no matter what. We were. It's. It's awesome that. It's awesome to have you here. So we're going to start with the earnings season, Cali, because this has been a pretty good one. Not unbelievable, but, like, better than expected. And a lot of. Look, there's definitely punishment for companies that miss earnings. I don't think that's, like, novel. I think that's pretty much the way it always is, but we always point it out. But by and large, at a headline level, this is A pretty good earnings season. What do you think?
- [47:33]
Michael Batnick
Yeah, I think you have to hedge.
- [47:35]
Callie Cox
That a little bit.
- [47:35]
Michael Batnick
Or Grand Rapids hedge. I'll throw an ode to Michael's shirt there.
- [47:39]
Josh Brown
Let's do it.
- [47:40]
Michael Batnick
By the way, as Ben, Grand Rapids hedger, is he just a research analyst? Let's be honest. Okay. So this earnings season the bar was low heading in I think so Bloomberg estimates that we look at showed that S and P profits probably grew like 2.5%. If you think of the average over the past five years is like 7 or 8%. That's pretty darn low. But it's also a lower bar for companies to beat. And I know I've said this on what are your thoughts? But before. But the best recipe for market gains is when you have low expectations and moderately good news. That seems to be what we're getting right now. But I also think you have to look at it on a sector level because tech is performing in a whole different league than the rest of the market on the profit side, but obviously on the breadth side as well.
- [48:27]
Josh Brown
Seven of 11 sectors though had a year over year increase in profits. So it's not just tech that's got earnings growth. We all know the highest growth rates came from Comm services and technology. Financials were a standout. And I think if you ask most people where do you think the lowest growth rates were, they would nail it without even looking. Energy, materials and staples. So it feels familiar. I don't know. Mike, what do you think? This is pretty much in line with the last few quarters that we've lived through.
- [48:57]
Callie Cox
We were talking about stock market reactions. I think it was with Adam Parker talking about. Was it with Adam who said like financials haven't really done too too well after beating and part of the reason was because they had already done so well. But I was looking today at some of the stocks that I own in the capital markets. CME On Fire, Ice On Fire, nasdaq. You selling that, Josh?
- [49:18]
Josh Brown
Yeah. No.
- [49:19]
Callie Cox
Okay. Unfortunately S and P, S and P Global, all of these names and JP Morgan is back near 50 all time high. The banks are acting fantastic.
- [49:29]
Josh Brown
Cali the Beats are seeing a one day outperformance of 1.12% versus the S& P index. On average that's the highest since the third quarter of 2024. All right, not that amazing. In the tech sector it's closer to 2% above the S and P. So that's good. When I mentioned the miss is being punished, misses are seeing a one day underperformance of negative 5.7% and we talked about this last week it was minus 5.2%. So it's actually, it's getting worse. They are obliterating companies that don't come in at least in line. Should we read more deeply into that or is that just, hey, this is what it is. You got to do the number.
- [50:17]
Michael Batnick
I think it's a product of the low bar that we saw. If you're missing this low bar then we have no patience for you. That's what investors are thinking. I do think last week changed a lot because heading into last week I think that narrative of companies beating weren't necessarily performing that well past the index and then companies that were missing were getting obliterated. Last week we had like a third of S P companies reporting, including I believe four of the Mag 77 companies. So I think there was just like a sample size. There is a sample size thing that we needed to get across the line there. But I think what you can read into it is this. If you're missing the low bar and to be clear, most sectors had quite a lower bar than what was expected even like three, four months ago because of tariffs, because of everything that has happened since April. And look, if you can't make that low bar then there's probably something seriously wrong. That's what it's what's what's going through investors heads. I mean I want to say too technology. I was astounded at how little tech expectations have changed. So think about that 2.5% year over year bar at the beginning of the season that came along with the 20% earnings growth expectation for tech. So you had really low bars in like the energy consumer discretionaries and materials of the world. And if you can't meet that some something's wrong.
- [51:39]
Josh Brown
That's a good segue. Going into last week, the estimates for the Mag 7 was 4 1/2% year over year growth for this quarter. And at the end of last week, according to chart kid Matt, that number is doubled. It's now 9.08%. The Mag 7 delivered. They didn't all get. They didn't. I mean even Apple had a good earnings report. They didn't all get, you know, outside of Tesla, they didn't. You basically, if you're in these stocks, if you're in Alphabet, if you're in Apple, we all understand the negative narratives around what's going on with these companies just in terms of where they're at. But like the numbers were the numbers and they Were good. They were strong across the board.
- [52:23]
Michael Batnick
Yeah. And I want to clarify one thing. So that 4.5% that you mentioned was actually the blended like actuals versus estimate estimated growth for the S&P. So MAG7, MAG7 stocks that reported last week actually boosted the bar for the overall.
- [52:38]
Josh Brown
Pushed it all up 4 percentage points.
- [52:41]
Michael Batnick
Which is insane to think about.
- [52:42]
Callie Cox
I have three comments. Number one, a lot of the stocks that are, excuse me, that are getting hit are stocks that have had a monster bounce off the April lows. A lot of these stocks are up 40%. 70 double so, all right, a stock like Netflix, for example, very good earnings. The stock is up a gazillion percent. It's now given back 14, kind of quietly good. That's healthy. These stocks should not go up and up uninterrupted forever and ever and ever. And on Apple specifically, Apple had a beat, pretty surprisingly strong numbers. The stock has been red for the last six days from the open to the close because it's not getting rewarded for what it did on the hardware side or anything. It's. It's the open question is the AI story. I know we're gonna talk about Apple later, but that's it. And they're not in the game and the market does not like that.
- [53:30]
Michael Batnick
Well, it's the AI story. So I think Apple is a funny example because yes, Apple is getting hit for falling behind on the AI front, but Apple had a lot to say about tariffs in the post earnings release commentary as well. I know they said that tariff costs were supposedly going to go up by I guess like 300. Sorry, not tariff cost explicitly, but operating costs were going to go up by like 300 million through the end of the year. So I find that there's a little more dispersion when it comes to Mag7 companies. Like there's a little bit more going on beneath the surface than AI. But I mean, I think you bring up a good point. We've seen a really strong rally since April and now investors are asking companies to prove it.
- [54:10]
Josh Brown
Yeah, I think that's the perfect point. Like when Meta reports the only tariff impact conceivably that you would see in a meta is maybe like an advertising pullback related to tariff, like general uncertainty. But they're not manufacturing anything at scale. It's not an important part of the company's business. Apple is very different than Meta. Apple's got to make physical things in one part of the world, ship them to another. They have to source components from everywhere. So like the, like the tariff Conversation being heavily featured during the Apple call is exactly what I think people should have expected if they, if they didn't, because that's where that hits. You wrote about the AI capex spending versus the human economy which. So one is gangbusters and the other is slowing. And I thought you did a really good job smashing those two themes together and giving people some food for thought. And we're going to roll through a couple of your charts and I just love to have you comment as, as we go. Let's put up this first one. Robots are pulling the economy along this year. So this box that you have around 2025 is showing the yellow bar is AI and tech investments, which for, for this year, 152 billion in AI related spending, which you could explain to us, and consumer spending, 77 billion. And obviously consumer spending is at least according to this, looking to be way down from the prior two years. And AI spending is mushrooming. So what's the takeaway from what you looked at here?
- [55:58]
Michael Batnick
So I think with this you have to remember that there are two moving parts that we're watching in this chart. There is the AI spending which I quantify and the industry quantifies as spending on or business spending on information processing equipment, computers and software. And look, that's a proxy, right? Like there are probably a few line items here and there that you could throw into that AI line item. But we'll just go with it, right? Information processing equipment and software. And consumer spending is a main component of GDP impact. It's 70% of GDP. It's a $16 trillion line item. When you look at the components of what make up this economy and what you're seeing here is that consumer spending has only grown by 77 billion this year. I mean, consumer spending has pretty much stalled out. If you compare that to the $16 trillion base that we're talking about and business investment in AI alone, again, that info processing equipment and software has grown by 152 billion. So you could take this two ways. You could say, okay, AI is propping up the economy. Clearly it's adding more than this component of the economy that is so large and so dominant, especially over different periods in history. Or you could say consumer spending is really setting a low bar, it's stalling out. It's basically not growing and that's why little line items like AI spending, little line items like AI spending are exceeding it. I think the latter is right. I think this is more a reflection of how poor or how stalled out consumer spending has been. Over the last two quarters. And look, AI CapEx is going gangbusters. Can it prop up the economy, though? I'm not so sure. I don't think you have a thriving US Economy without the consumer.
- [57:47]
Callie Cox
What about stock market?
- [57:48]
Josh Brown
It's not big enough. It's big enough to move the stock market, but 1.4 trillion is not 16 trillion.
- [57:55]
Michael Batnick
To your earlier point, 26 trillion, which is total GDP that we're talking about here. I mean, the stock market's different, right? The stock market's not the economy. You can work in expectations there. You have a little bit of, I mean, you have a little bit of future prospects that's baked in. And look, with tech, too. I mean, tech is the profitability golden child of the S&P 500, but valuations are still quite high, fairly high, because we're baking in the AI story, which hasn't really rolled into profits yet. But, you know, it's, there's a bit of a back and forth between expectations and reality here that I think investors are still really trying to juggle and understand.
- [58:33]
Josh Brown
New Loon in the chat is asking if you're factoring in the Sydney Sweeney component to any of this. I don't know how much you've, you've thought about that or not at all.
- [58:43]
Michael Batnick
Sweeney do an ad for Meta.
- [58:45]
Josh Brown
Sydney Sweeney is going to do that. The jobs report. What'd you guys, what'd you guys think? 73,000 last month and then they, they revised lower the prior two months or three months. What was the, the prior two months? So we're. I don't know. I don't, I don't know if like stall speed might be too much. I don't think it's. Is it stall speed or is it just like way moderated down versus some of these months we were seeing before?
- [59:17]
Michael Batnick
I like the precision of way moderated down. So let's go with that. Way moderate. I'm just kidding. So I would hesitate to say stall speed because stall speed, the standard that we're setting here is actually a lot lower because the labor supply, the workforce, the number of people out there employed or looking for a job is actually shrinking at the moment, which is not something you see often. It's shrink for the labor supply has shrink for the past three months.
- [59:42]
Josh Brown
This is immigration. This is the effect of mainly immigration.
- [59:45]
Michael Batnick
Yeah. Based on what we can see from the data. And of course, boomers leaving the workforce aging out of the workforce. You can't ignore the demographics. But the labor supply is shrinking. That means that there are Fewer people out there needing and looking for jobs, which means that there are fewer positions out there that are needed or fewer hires that are needed to soak up those unemployed, that unemployed population. So you have to remember that the game has changed a little bit for the job market, but that's not a healthy dynamic. I wouldn't consider a shrinking labor supply as something that I'd put in the thriving job market bucket guys, pop her chart up.
- [60:21]
Josh Brown
Callie does it. Just based on history, we're looking back to 1970. The title of this chart is Hiring Grinds to a Halt. This is a three month average of non farm payrolls which you peg at 35,000 jobs per month. Just looking at history, does it seem likely that this is all of a sudden going to bounce off that zero line? Or is that not historically what we usually see happen?
- [60:47]
Michael Batnick
I don't know what turns us around, Josh.
- [60:50]
Josh Brown
That's a really tough housing, but housing.
- [60:54]
Michael Batnick
You think?
- [60:54]
Josh Brown
So you give me 150 basis points, I'll give you, I'll give you more hiring.
- [60:59]
Michael Batnick
Yeah, well, too bad the Fed can't cut the 10.
- [61:01]
Josh Brown
Here's what I would say, here's what I would say. That's the only thing, that's the only thing that, that like turns this on a dime is, is a housing boom. I don't know what, not what else is big enough.
- [61:14]
Michael Batnick
Yeah, I mean, it's a good question. I mean I think a rate cut, if I, if I had to throw a story in there, I think a rate cut is it.
- [61:22]
Josh Brown
But more than one.
- [61:23]
Michael Batnick
It's preferably, preferably a lot more than one.
- [61:27]
Josh Brown
Yeah.
- [61:27]
Callie Cox
Can you throw that chart back on?
- [61:29]
Michael Batnick
Even one can infuse enough confidence in the economy to maybe give us a little bit of a spark. It's hard though, because what we've seen underneath the surface too is that hiring has come down through a bunch of different sectors, especially on the private side. I mean right now the only sectors really net hiring over the past three months have been education and health services and state and local, local government. So it's great if you're a nurse or a firefighter, but if you're in a white collar job, if you're in a manufacturing job, if you're in a trade or transportation job, you've really been out of luck.
- [62:00]
Callie Cox
Try back on for a second. I mean, all right, so if we look at. So there's no doubt the three month average is coming into the, into the danger zone, into the red line. But look what happened before it. So maybe an optimistic take on what we're seeing now is a normalization of an absolutely absurdly abnormal job market where anybody could get a job where anybody could get a raise. Are we, is, is that a fair interpretation or is that too charitable? Chart off.
- [62:29]
Michael Batnick
I think it was a fair interpretation up until a few months ago. Hiring is so weak. I think the, like this, the details that we've seen in the consumer confidence side with the labor differential have slipped below what is normal. And like what is normal these days, hard to say. But I look back to the 2000 and tens, which was a pretty sluggish job market, and we're even seeing some indicators drop below those points. So I think you have a point, Michael. I think about that a lot because what we've seen over the past few years is slowing from a fiery hot job market. But from absolute levels and from the level of layoffs that we've seen this year, it is getting to a point where you should probably grit your teeth a little bit more about what's happening in the job market.
- [63:12]
Josh Brown
We got one more chart from you. Fewer employees, more robots. I'll just, I'll paraphrase what you said and then you can react to it. Is the robot economy cannibalizing the human economy? Hyperscalers are ramping up business spending but keeping their headcount steady. So most of these kind of tech explosion capex booms are accompanied by hiring more developers. And it seems like the only person trying to do that is Mark Zuckerberg. By any means necessary. In this particular boom, the headcounts are not rising while capex is. And I'm just curious, like, what else would you, what else would you add to that? Or what do people need to know about what you see happening there?
- [64:00]
Michael Batnick
Well, first of all, this is a chart that you see on social media and you're like, oh my God, robots are taking all over the world. AI overlords like, please save us. It's not that it can seem like that at first glance, but what I'm trying to get across here is the fact that for all of the spending, this capex spending that we're seeing from the hyperscalers, it has to come out of one pocket or another. And if you think about business costs, so when we talk about where that money can come from, we have equity financing, debt financing, cost control, free cash flow, which is a derivative of cost control. But costs, I mean wages are the biggest cost for most businesses. And what we've seen on the big tech side outside of 2021 has really been this control on the workforce, this control in the headcount. I don't think it was to eventually spend Buku's amount of money on AI, but I think it is one of the pockets that these tech companies are kind of fishing from in order to fund like $300 billion worth of capex spending. And it's important for investors to remember this because it's really hard for companies to be the golden child of profitability, which is what tech is right now. But also these big, big spenders and these, you know, really ambitious future.
- [65:17]
Josh Brown
The money has to come from somewhere. And they're not.
- [65:19]
Michael Batnick
The money has to.
- [65:20]
Josh Brown
They're not taking on massive amounts of debt, at least not directly. The private credit guys are, in order to fund the data centers. But to your point, they have to spend the money from somewhere. If they're not spending it somewhere else, it's meaningful.
- [65:35]
Michael Batnick
And I have to ask myself, do I think we live in a world where investors can swallow smaller or even standstill profit margins from big tech? I'm not so sure. Expectations are really high for that sector. This is my Grand Rapids hedge. AI is a very compelling story. I don't think you can argue against that. But the profile of a company that has to almost pivot to catch up to AI or to try to lead at the forefront of AI requires them to take money from somewhere, requires them to spend from somewhere. And that somewhere is still big question mark that some people might be ignoring.
- [66:14]
Josh Brown
What?
- [66:15]
Callie Cox
I just pulled up a stock that we had spoken about a while back that reminded me of this member, Accenture Josh, we spoke about that they do like AI consulting and other sort of consulting.
- [66:25]
Josh Brown
Not.
- [66:25]
Callie Cox
Well, holy mackerel, the stock crashed. Yeah, I'm sure there's a story there, but wow, I was not expecting that.
- [66:32]
Josh Brown
The opposite of that is IBM, which is much better at what. What Accenture does. All right, Callie, we've kept you longer than. Than. Than. Than I promised you we would. I want to say thank you so much for joining us. For those of you who are not aware, optimisticali is published, I think, at least weekly, probably multiple times per week. Right.
- [66:53]
Michael Batnick
Can't promise that week.
- [66:54]
Josh Brown
No promises, but check out Optimistical Cali. Thank you so much for joining us. We really appreciate it. Great job this week.
- [67:01]
Michael Batnick
Yeah, I'm around whenever you need me.
- [67:02]
Josh Brown
All right, bye, Callie. All right, Callie Cox, ladies and gentlemen. What'd you think of that idea that, you know, we're celebrating all this Capex spending and it's obviously fueling industrials and electrification related Stocks and obviously software companies. But like the spending is, is coming from somewhere and we're basically, it's looking more and more like a hiring standstill in a lot of areas of corporate America. What do you think?
- [67:33]
Callie Cox
Yeah, I'm not worried yet about where the cash is coming from because it's coming from their balance sheets primarily. But I saw that Google did a debt offering or Alphabet did a debt offering for the first time in a couple of years.
- [67:44]
Josh Brown
Yeah.
- [67:44]
Callie Cox
So. Yeah, yeah. And then Facebook was talking about the idea of maybe external financing for like a $30 billion expenditure. But listen, it's coming from them. They have all the cash. They can afford it.
- [67:57]
Josh Brown
Yeah. When we're, so we're going to, we're going to talk about Palance here in a little while. So I don't want to go too in depth on that, but when you hear them come out and say we're going to do 4.1 billion in revenue this year and we now have 860 some odd commercial clients, non government. All of those clients, what they would love to be able to do is spend the money on AI related projects that will enable them to not hire the same amount of people they hired last year. You have to understand that's part of the goal.
- [68:31]
Callie Cox
Without a doubt.
- [68:33]
Josh Brown
So. All right, last thing before we move along. We got a July esm. And just to put a bow on everything we've been talking about, there were not a lot of bright spots in the data. But in the commentary, here's a, here's a sampling quote. We continue to see strong demand driven by the build out of artificial intelligence related data center capacity, semiconductor industry expansion fueled by national policy and large scale grid modernization projects. New orders for defense equipment also surged. Non defense orders dropped. So like that's what, that's what people are spending money on, at least according to the manufacturer survey. So.
- [69:16]
Callie Cox
And yeah, well, we have, we have Nvidia. What does Nvidia report? Few weeks.
- [69:22]
Josh Brown
Yeah, they're the, they're always last.
- [69:23]
Callie Cox
The last. All right, that will, that will not, not matter. Okay, let's talk about the state of the market. How would you describe the state of the market today?
- [69:32]
Josh Brown
Giddy, giddy. I don't, I don't like the term bubblicious because there are always bubbles and I don't think the whole thing's a bubble, but I do think the way people are behaving, there's a giddiness. I mean, whatever, it's fine. I, it's under, it's understandable given this rush that everyone's feeling coming off the April lows and, you know, seeing the market make new highs. But, like, that's. I think that's kind of the vibes. I don't know. What do you think?
- [70:03]
Callie Cox
I think there's a lot of optimism, a lot of it peripheral to the S P500 itself. It's not like the more. It's like the S P is going up every single day. You know what I mean? But there's just a lot of. There's a lot of. Yeah, getting. This is a good word. So let's get to it. All right. The degen dow. I don't think we've referenced this in a while. Have we updated the components or these? What's. What's the situation here, Josh?
- [70:22]
Josh Brown
I don't think we've updated the components, but just at a glance, they still work. There's nothing on here that I would take off. I don't think. I feel like now we might.
- [70:35]
Callie Cox
No, I would take Reddit out of here. That's not a. That's not a degen stock, I don't think.
- [70:39]
Josh Brown
Well, no, no, no. It's part of the degen ecosystem because that's where they're all talking.
- [70:45]
Callie Cox
You're right. My bad.
- [70:46]
Josh Brown
You know what's missing? You don't have Joby on here.
- [70:49]
Callie Cox
Yeah.
- [70:50]
Josh Brown
And I think Palantir is an obvious miss.
- [70:52]
Callie Cox
Oh, yeah.
- [70:52]
Josh Brown
Oh, no. It's on here. It's on here. It's on here. I'm sorry, do we have app lovin on? Yeah.
- [70:57]
Callie Cox
Wait, what's on there?
- [70:59]
Josh Brown
Where is it? No, we don't have Joby.
- [71:00]
Callie Cox
Oh, there it is. You're right. Okay.
- [71:02]
Josh Brown
So Joby, definitely. That's a degen. Especially after this week.
- [71:06]
Callie Cox
Either way, the individual tickers are less important, just the direction, because one ticker is not going to or break this line. They're up 24% year to date. And if you look at where they are from the lows, they've almost doubled from the lows. That's. So that's the key takeaway.
- [71:18]
Josh Brown
We should have just bought. We should have just. We should have just ETF this. Like, people came to us and some. Somebody came to us and said, were you guys serious? Because I'll. I'll build that right now.
- [71:28]
Callie Cox
Yeah, we cannot get conscious. Watch this. All right, here's. Here's something. So I'm all. I've been video, by the way.
- [71:34]
Josh Brown
I guess you're allergic to money, Mike.
- [71:36]
Callie Cox
Yeah, I'm all out of Nvidia.
- [71:39]
Josh Brown
You out?
- [71:40]
Callie Cox
I sold A little.
- [71:41]
Josh Brown
Just because I gave you permission to sell last week.
- [71:43]
Callie Cox
Thank you. I really. I needed that. I'm all out. I sold a little bit last week.
- [71:47]
Garrett Baldwin
A little bit more.
- [71:48]
Callie Cox
The end of the week and the rest of it today. All right. This chart helped push me over the ledge. Chart on place. This is from our friend Todd, so. And Strategus. All right, so what we're looking at for the listeners is this. It's a line chart of Nvidia and its weight in the S&P 500, which is now about 8% versus the weight of the industrials. And I mean all of the industrials, every single one of them.
- [72:14]
Josh Brown
These are saying that. We keep saying how crazy it is, but this is so. Yeah, wait a minute. So for people that can't see the chart, how many billion dollars is Nvidia's market cap away from being bigger than the entire industrial?
- [72:27]
Callie Cox
Right there. It's right there. It's. It's 1%.
- [72:29]
Josh Brown
It's like 1%. It's like $5 billion.
- [72:32]
Callie Cox
Let. May I remind you, these are. These are not small names. Trot off, please, for a second. These are the top 10 names in the XLI, GE, Aerospace, RTX, Caterpillar, Uber, GE, Vernova, Boeing, Eden, Honeywell, Union Pacific, and Deere. Those are just the top 10.
- [72:51]
Josh Brown
It just can't be. It just. It can't be. It can't be this. And I'm long in video and I'm not playing this out right now, but it makes no sense. And I. And you can't even argue that it's in part due to the fact that the industrials are cheap because they aren't.
- [73:10]
Callie Cox
Right.
- [73:11]
Josh Brown
It's not like you're talking about heavily discounted stocks. In the industrial sector, at least in the health care sector, you sort of can make the case that those stocks are all selling at depressed valuations now they're caught up in the tariff shit.
- [73:25]
Callie Cox
Be that as it may, it's still crazy.
- [73:27]
Josh Brown
You know, I'm with you. I'm with you.
- [73:29]
Callie Cox
So these are the top 10 names in an admittedly depressed health care sector. Eli Lilly, Johnson & Johnson, AbbVie, Abbott Labs, UnitedHealth, Merck, Thermo, Fisher, Intuitive, Surgical, Amgen, and Boston Scientific. Come on.
- [73:43]
Josh Brown
What?
- [73:43]
Callie Cox
One of those. One of these is wrong.
- [73:48]
Josh Brown
So. But in the case of healthcare, that could be wrong because those stocks are way too depressed. Like those stocks are too heavily discounted. In the case of industrials, I mean, what are we talking about? Is it. How many companies in The S&P 500 industrials could be 80. I don't, I don't know. I don't either, but it sounds wrong.
- [74:15]
Callie Cox
All right, so that, so that's some stuff on the public markets. Let's go to private market.
- [74:18]
Josh Brown
So you looked at that and said, and said I got to, I got to, I got to sell this.
- [74:22]
Callie Cox
I got to, I got to sober up a little bit. Yeah, I mean I was, I was, you know, I'd want to out the door anyway mentally. All right. In private world open. I just did a funding round at $300 billion I think they released.
- [74:33]
Josh Brown
Why not?
- [74:34]
Callie Cox
Some of the growth numbers are truly outstanding. So, you know, this is what happens in, in, in what everybody's calling the biggest technological revolution of our lifetime. Literally everybody's saying it. Tim. Apple. Well, maybe not to an Apple, but they're all saying it. Anything here, Joshua? Can I keep going?
- [74:51]
Josh Brown
I'm using OpenAI 100 times a day, but I'm paying one subscription price.
- [74:56]
Callie Cox
It's like 20 bucks, right? 20 bucks a month.
- [74:58]
Josh Brown
Yes. I'm not, I'm not sure if that's going to be the long run business model for that company. I feel like it should cost at least as much as Spotify. Not to give them any ideas. Maybe it should cost way more just given the value that I'm getting from it. And you already know what I'm not using when I'm using chat GPT.
- [75:18]
Callie Cox
Right. I am looking for. I saw the. It doesn't matter. I don't know the numbers here handy but the. But they're. Oh, here it is. Okay. OpenAI's annual recurring revenue has soared to $13 billion up from 10 billion in June.
- [75:32]
Josh Brown
That's people like me that can now not without it same. I started without it.
- [75:36]
Callie Cox
I started paying in the last two months. Up, up 30% since June. Not bad. Okay, this is a really good one from Dave. Notting a bit wonky but I still think it's, it's. It's important. So Dave said, actually let me just read this for a sec. So Title Financial Group put out their ETF industry highlights of the week and key metrics at a glance. So one year open to close ratio is over 5, which is that.
- [76:01]
Josh Brown
What does that mean? Open to close. For every.
- [76:04]
Callie Cox
For every closed etf, there are five that open.
- [76:07]
Josh Brown
Okay, I'll throw this out. No, I'll let you cook. I'll let you cook and I'll tell you why. It's. It's not anything.
- [76:13]
Callie Cox
Dave said, nodding said. We've crossed the five to an open to close barrier. I think we've only seen that one or two times before. It's literally launch it, we'll fix it. Live land. And then there's some other stuff in the air just about the industry assets. But why is that garbage?
- [76:27]
Josh Brown
Because it used to. It used to cost a lot to keep a zombie ETF trading on the public markets. And now maybe because of AI or maybe because of streamlined compliance or whatever, the cost of letting one of these things just live even with $50 million sitting in it. You never know when a sector or a strategy or a theme is all of a sudden going to get hot fair. And it's like it was like roulette. If you're a Pacer ETFs or like a second tier ETF issuer, you've got all the, all these products out there. All of a sudden one of them could just explode. Like why not? It's like roulette. Keep the, keep the chips on all the squares. I don't, I don't see this as an indicator anymore the way it used to be.
- [77:11]
Callie Cox
However, by the way, you mentioned secondary Baltunas calls them indie issuers and they are on fire. So. So you might say that. So I'll see what you just said and I'll raise you this. Baltunas tweeted new filing for a 2X Figma ETF, the stock that just had its IPO today with a $250 200% pop, which is the most ever by the way, for an IPO that was over $500 million. So throw that in the. How crazy is this?
- [77:37]
Josh Brown
Well, you had to sell that. Had to sell.
- [77:39]
Callie Cox
Yeah, you had a second. All right. Robin reported last week equity notional volumes are up 112% year over year. Of course some of that is priced but up 25% quote over quarter. Options contracts are up 32% year over year. So people are just going wild and I want you to throw up this transaction based revenue. The second. Robin, a chart please. Look how much frickin money they're making from options.
- [78:02]
Josh Brown
This is Robinhood's transaction revenue up 65% year over year to 539 million. And what's the options?
- [78:12]
Callie Cox
That's the, that's the neon.
- [78:14]
Josh Brown
Oh shit.
- [78:15]
Callie Cox
And green for example is equities. And we know that that's just payment for order flow because there are no transactions there. But my God, are the options profitable?
- [78:23]
Josh Brown
So. Right. Green is not. Stock trading commissions. That's, that's, that's pf. That's that's Pfaff. And then what's the top gray other. What do you think's in there?
- [78:32]
Callie Cox
It's tiny, but maybe some, I don't know. Is that like margin.
- [78:36]
Josh Brown
Margin balances?
- [78:37]
Callie Cox
Yeah, maybe. Margin loans probably rolls up into it. All right, Goldman from Goldman Sachs. We spoke about this last week with Adam. I think speculative trading hits record high. I mean, obviously, you know, just across the board call option activity has surged to its highest since 2021. IPO SPAC issuance is at a multi year high. Even Ark. Even Ark. Baltuna's tweeted. How back are we, you ask? We are so back. That ARK just took an $800 million in one day.
- [79:05]
Josh Brown
It's the biggest. God bless her.
- [79:07]
Callie Cox
It's the biggest one day inflow ever.
- [79:11]
Josh Brown
She's doing good. She's doing good again though. This is like her. This is her market.
- [79:14]
Callie Cox
Yeah. So we mentioned, we mentioned Figma. Vlad Bastian tweeted a chart of the market cap of the top 100 information technology stocks with their forward PE. And Figma, of course, at the IPO, price was number one. And then just to put a ball on this all the way, on the other side of the market are insiders who are not participating. They are not buying. Next chart, please. So Bloomberg ran a story. I didn't have time to read it yet, but I pulled the chart. Insider buying dries up. Insider buy trails sales by the most since July 2024. So that's the market. That's where we are. So maybe take a.
- [79:53]
Josh Brown
Okay, so to. So to sum up, Robinhood esque, Ark esque activity is back at highs. People are doing the most speculative things they can think of to do. And corporate insiders are using this as an opportunity to sell or at least not buy. Yeah. And like Figma is not even getting the market cap. It's getting because it's figma. They're getting it because the scarcity of IPOs and people just love, you know, what IPOs are for people in their 20s. Do you have any idea how big the baseball card pack breaking thing is on the Internet? Do you know about this at all?
- [80:37]
Callie Cox
Not as well as you, but yes.
- [80:38]
Josh Brown
All right. My friend's kid, he's out of college now, just barely out of college. Now he's doing these auctions on the Internet with like a sealed pack of baseball cards and he's doing a pack break like, and people can bid on this thing before he opens it and then he opens it. And wherever the highest bid is, you can Kind of see, like did people overestimate or underestimate how valuable the cards in there might be? But now it's at another level where they're taking loose baseball cards. Like some of them are like $20,000 cards. They're repackaging them and resealing them and starting all over again.
- [81:16]
Callie Cox
Like as a scam or.
- [81:17]
Josh Brown
No, it's not a scam. People just want to bet on pack breaks. Tech IPOs are pack breaks. Like in other words, everyone put in their allocation at Robinhood, they got one share. That was like the meme last week. Last week, like, oh, thanks Robinhood for my one share. That's a pack break. You don't. Nobody has any, an idea what FIGMA is going to be worth on its first day of trading or second? No idea. Here's my evidence. They price the IPO at like 20 something, then they raised it to 30 something, then they open it and it goes to 100. Because people have no idea what these things are worth.
- [81:55]
Callie Cox
I'm so glad you said that. Nobody has any idea. I made this analogy. It's like drafting NFL quarterbacks. They want to get it right. The bankers don't want to. The companies, if they get that reputation, who would hire them? People like, oh, this for their rich clients. Like, no, they want to price it right. But who could see the future?
- [82:12]
Josh Brown
Who could possibly, who could possibly now hard now there are some telltale signs that a deal is going to be great. One of them is they keep the share amount. They keep the share count, you know, relatively low. You know, people are looking for companies don't have a lot of debt. They're looking for companies that have explosive growth rates. They're looking for companies that use a lot of AI stuff in their prospecti. Like there are some indicators, but in the end, in the end it's a. But it's a pack break. So the same people that are willing to bet on a resealed package of baseball cards.
- [82:45]
Callie Cox
Yeah.
- [82:45]
Josh Brown
And by the way, the way that works is you're guaranteed 45% of your money back. So no matter what cards are in there, you're not going to take a total loss if you bid. If you bid $2,000 on a, on a pack and there aren't any special cards in there. Oh, I understand you're guaranteed to get at least like a grand back. Anyway. That's what this activity is. It's lottery esque. You're, you're putting in an allocation for figma, not because you have any clue of where they're going to put the stock when it opens, but because, oh my God, imagine if it figmas.
- [83:16]
Callie Cox
Right. Josh, there's another aspect to this. The day that it iPodOS is very important. It came public on Thursday at an all time high. What if it came public on Friday? Well, on a day that people didn't.
- [83:27]
Josh Brown
Want to buy stocks, on a tariff day. I got one more. I got one more on this and we can move on. This is an amazing story. I love it so much. Fenwick and west is a law firm that did all or most of the legal work for figma, not just for the deal, but prior to. And they handled all the going public stuff for the company. Right. They made a very big bet. They said, let's get equity in this client and not just take our. I don't know, God, can you imagine? $3,000 an hour legal fees. They took equity. I don't want to say instead, but in lieu of some of the money that they ordinarily would have gotten. Talk about speculative. They took the ultimate bet on a client. Fenwick, I think was paid the equivalent of $30 million worth of Figma shares for that, for the right to do that. Those shares as of July 31st were.
- [84:28]
Callie Cox
Worth right here says 900,000 shares.
- [84:33]
Josh Brown
900,000 shares times $85.
- [84:36]
Callie Cox
That's 71 million bucks for where it is right now. Not bad.
- [84:38]
Josh Brown
Can you imagine? Like what, like, what an amazing. What an amazing decision. This is a law firm. So pretty, pretty, pretty impressive.
- [84:49]
Callie Cox
All right.
- [84:49]
Josh Brown
I have nothing more other than to say that I agree with you. Things have. We are so all the way back.
- [84:55]
Callie Cox
Yeah.
- [84:55]
Josh Brown
And things have gotten absolutely crazy. They could get crazier, though. Oh, yeah, Because I've seen it.
- [85:00]
Callie Cox
There's no loss.
- [85:01]
Josh Brown
I know, I know. They can. You've seen. We saw it in 21.
- [85:05]
Callie Cox
I was honestly. This doesn't feel that crazy. I'm saying there's, there's a lot of speculation, but it doesn't feel, it doesn't feel like all the way bonkers. 21 was way nuts.
- [85:13]
Josh Brown
Or if we get like, if we get like 10 more figmas, you know, or we get a super Figma, like, you know, I'm saying, like if we get a figma, but where it's like instead of 70 billion, it's like 700 billion.
- [85:27]
Callie Cox
All right, so that's a good segue to Palantir.
- [85:29]
Josh Brown
Yes. All right. Okay. Is Alex Karp the new Elon Musk?
- [85:38]
Callie Cox
There's, there's similarities. I listen to the call as well.
- [85:41]
Josh Brown
Elon Musk is not. Is not hot right now.
- [85:44]
Callie Cox
Alice Karp is very galvanizing.
- [85:47]
Josh Brown
He's messianic. He's. Look, I think what people love about him is he's delivering. I don't think he could have the same level of swagger if his results were just whatever. His results were insane.
- [86:01]
Callie Cox
Did you listen? Did he hear Dan Ives?
- [86:03]
Josh Brown
Yeah. Dan's like one of my favorite human beings in the world.
- [86:06]
Callie Cox
I texted him a picture of his question. Dad said like, I'm sorry. Also that the haters are unsatisfied.
- [86:15]
Josh Brown
I love him.
- [86:16]
Callie Cox
So there the Alex Carpenter were trolling the. The haters of which.
- [86:20]
Josh Brown
Well, one of the things the haters said was that the business model where they don't hire direct sales people was not going to work. And Dan Ives asked him a question about that, like the decision to continue down this road. And look, he. Dan, say whatever you want. Dan has been bullish on Palantir since it came public and has never changed his tune. And he's been really, really right on the stock. Let's go through some of the highlights here so people understand the extent of what's happening and then we'll talk about the valuation. Q2 2025 revenue hit a billion dollars for the first time. That's a 48% year over year number. It's incredible. And 14% over the prior quarter. It's being driven by not just government contracts, which I think is. A lot of people look at Palantir and they're like, all right, great, so the army and the CIA. No, dude. Commercial client revenue growth was up 90 something percent versus only 50% for government spending growth. So Palantir is. Now has like almost 900 customers. They'll have a thousand customers, Josh, in that vein.
- [87:32]
Callie Cox
So they said during the second quarter they closed a hundred because that was my impression too. I was very ignorant. On this company. They closed 157 deals of at least $1 million, 66 were 5 million and 42 were at least 10 million.
- [87:47]
Josh Brown
Yeah. Chart off. And it reminds me a lot of CrowdStrike. Like they highlight without using some of the names they highlight like a large US wireless carrier or phone company. You can imagine it's either T Mobile, AT&T or Verizon. But, like, talking about the way that they're building these. Building these KYC tools for banks where you can open an account in seconds that normally would have taken nine days worth of human processing of information, like the breadth of the business and the amount of verticals that they're selling into Now I think is really what captures people's imagination. They're basically becoming the business AI layer that they claim is substantially stronger than just a plain LLM. And they talk about it in terms of ontology, meaning like learning and understanding mistakes that an LLM would make that a human never would, and building accordingly because, you know, you can't make a, you know, ha ha, stupid AI. You can't do that with some of the projects that they're working on. So net dollar retention up 128%. Operating cash flow for the first six months of the year, 849 million. They're projecting $4 billion of full year revenue or more. And let's do this Rule of 40 thing really quickly.
- [89:18]
Callie Cox
Wait, hang on. Before we get the rule 40, he said that he was going to 10x that shit in five years. Did he say.
- [89:23]
Josh Brown
He said 10x revenue in five years? All right, so they spoke 40 billion.
- [89:26]
Callie Cox
They spoke a lot about the rule of 40. And it's the first thing that they have in their deck. So let's run through a few of these charts. All right. This is impossible to see, but this is a very important metric for enterprise software companies. And what you're looking at is, on one axis is. Let me just pull this up. It's, it's the margin and the revenue, right? So a good company will have over 40 and they are so far off the charts, it's insanity.
- [89:55]
Josh Brown
Yeah. And rule of 40 is about like revenue growth and margins and just the ability to, you know. CrowdStrike talks about this a lot. I think like ServiceNow, Workday, like the types of companies that are selling enterprise software are the ones that you'll most frequently hear. This rule of 40 idea and why it's so important, it's how they think of themselves. Profitable, Profitable. And Palantir score. It just, they're playing, it looks like they're playing a different sport entirely. Just based on this dot plot. It's really impressive.
- [90:29]
Callie Cox
The next one compares them to the top 25 market cap companies globally. And the only one that best them on this metric is Nvidia. Some of the gray bars are, or circles are Meta, Broadcom, Microsoft, MasterCard, Google, I mean they are, they're executing. So they've got. And then the next one shows the growth of the rule of 40. So the valuation. Yeah, 94%.
- [90:56]
Josh Brown
94%.
- [90:57]
Callie Cox
40 is considered good.
- [91:00]
Josh Brown
But sorry to interrupt you. Bob Sacramento in the chat says I prefer the rule of 69. I just, I didn't think you would see it so I wanted to just surface that for you.
- [91:09]
Callie Cox
I said, why? Yeah, me and Bob. Me and Bob both.
- [91:12]
Josh Brown
Okay, let's do this valuation stuff really quickly. Chart on. Great job on this one, Sean. Now, what is this?
- [91:20]
Callie Cox
This is. That's the market reaction.
- [91:22]
Josh Brown
Yeah. I mean, needless to say, record high. We're going to do Palantir versus everyone else.
- [91:28]
Callie Cox
Yeah. All right. This is the, this is the thing.
- [91:30]
Josh Brown
All right, so it's a $400 billion market cap on 4 billion in annual revenue. Granted, he. Granted, he said he wants to 10x revenue in the next five years. And let's say he can actually do it. Obviously can't have a recession. That'll. That'll probably hurt his chances of getting there. But even if he comes close, maybe that, maybe in that scenario you could understand the 400 billion, but not if it goes to 800 billion. Right, right. Palantir's market cap at 407 billion. Home Depot is 385 billion. Coca Cola 297 billion. Salesforce 240 billion. So this company is now worth one and a half sales forces. McDonald's 215 billion. Nike 110 billion.
- [92:23]
Callie Cox
A bit, a bit, a bit rich. But I guess to Dan's point, Alex's points, that's what people have been saying for the last, you know, $300 billion in market cap, good for them. They're executing, you know, oh, 100%.
- [92:34]
Josh Brown
It didn't make more sense at a $250 billion market cap. Right. It's such a great point, which is why just use charts, throw everything else in the garbage. But that's a, that's another, that's another conversation. Put up this next one. I asked Sean to just quantify the company's fundamental performance because, I mean, it really is epic. On the left side, less impressive, just like on the surface. But the growth rates over still are crushing it.
- [93:04]
Callie Cox
The market isn't dumb. Like, obviously they've galvanized the share base and the business is executing. So, you know, this is what it is.
- [93:11]
Josh Brown
Look at this. Revenue quarterly year over year revenue IT in Q4 of 2023, which might have been their first quarter as publicly traded company or, I don't know, 20%. It's accelerating. It's at 48%. It's the fastest pace of quarterly year over year revenue growth that they've reported so far. And it's AI, that's that. AI, that's that. All right, we have, we have AMD numbers. Let's get that in here. Maybe this will make you feel good or bad about having sold Nvidia?
- [93:46]
Callie Cox
Oh, look in there. Look at their gaming segment revenue.
- [93:49]
Josh Brown
Yeah, everyone's very excited about the gaming.
- [93:51]
Callie Cox
Sense, but dude, it's up 69% year over year.
- [93:56]
Josh Brown
Nice. As of this, as of this conversation, AMD is off 4% in the. In the post market. But the stock has been ripping all year, or at least since April, I should say. It was a $75 stock that ran to 180.
- [94:14]
Callie Cox
Oh yeah. You know, this gets back to the conversation we had with Cali. This. I mean, I don't own the stock and it's easy for me to say, this doesn't bother me, but just as an objective observer, all right, the Stock went from frickin 75 to 180 and it's given back a few bucks. Big deal.
- [94:30]
Josh Brown
These numbers aren't that impressive on the surface. I don't know the story well enough to. To say anything negative, but I guess they beat on. They beat on revenue by, I don't know, looks like 200 million. And earnings per share was in line $0.48, I guess. Revenue up 32% year over year is impressive. Gross margin fell to 40% from 49 year over year. And data segment revenue was up 14%. Does that sound like blow me away numbers? No, not really. Right. I guess that's why this isn't Nvidia. All right. And we got a report from Toast, which for longtime viewers, listeners know this is one of my names. Stock is not really reacting in the post. It's down 71 cents. But it looks like toast was good. ARR. Up 31% year over year to 2 billion. That's for the quarter. So this is becoming a pretty big company. That's if you could do the math. You're talking about an $8 billion annual run rate with a. What's the market cap? $27 billion market cap. So not bad. Gross payment volume up 23%. I doubt. The whole restaurant sector is growing its spend, so you can see them making big inroads and we don't have to go through the rest. Oh, this one's. This one's good though. Total locations up 24% year over year. They now have 148,000 restaurant clients. When I first started buying the stock in the teens, they had like 60,000. So they are just rapidly. And there's only, I think it's 600,000 restaurants in the country or 700,000. Like it's not that big of a number. A lot of people would guess it's in the millions and it just isn't. So if they're at 148, they have now crossed over to the point where, like, they are the category king and they're not the only player out there, but like, they're some of the legacy players, like Micros, which I think Oracle owns, and Clover's out there. But I think this is, like, this is the, the uber of, of. Of restaurant payments. So I don't know, I gotta spend some more time on this overnight, but it looks like a good report. So for those who have followed me into the stock over the years, here we are looking pretty good.
- [97:02]
Callie Cox
I would say. So, yes. All right, let's play a game to catch a falling knife. I'm gonna run through. I brought five charts for us, Josh. I'm gonna run through the charts and then we'll reset and I'll get your thoughts.
- [97:14]
Josh Brown
Okay, well, we're gonna pick one each or force rank them.
- [97:21]
Callie Cox
Yeah. All right, let's go through the charts. So first we have Lululemon, the stock peak in the beginning, at the beginning of 2024, $511. It's now 197. I brought you UPS, which has just been going pretty much straight down from 2:32 in 2022 to 87 today. I brought you sweet green, which is a bit of a newer issue. Peaked at 44 not even a year ago, and it is now down to 12. That's pretty bad.
- [97:53]
Josh Brown
You know, I. I owned this for 15 minutes.
- [97:55]
Callie Cox
Oh, I didn't know that. All right. I brought you and Facebook a stock that I owned for a cup of coffee. My bad. I made the case for that on this show. It is 3:30. It was. It peaked at 336. It's now down. It's now 32. Oh, my God. And then we couldn't not do United health stock was 625 bucks yesterday, basically, and it's now $251. So I will say first that I. The only falling knife I would catch is like the bluest of blue chip type of names. Stocks that are going straight down. These are. These are ugly. So if you had to. Dow Jones, UPS. Oh, is it UPS?
- [98:35]
Josh Brown
United Health and UPS are Dow 30 components. Now.
- [98:39]
Callie Cox
UPS does not belong with the Dow.
- [98:41]
Josh Brown
Holy shit. Holy shit. Is Amazon in the DOW now?
- [98:46]
Callie Cox
Yeah.
- [98:46]
Josh Brown
So you don't need. You don't need ups. UPS is a E commerce thing at this point.
- [98:52]
Callie Cox
So what do you think? Would you take a flyer in any of these?
- [98:55]
Josh Brown
Yeah, I would. I would take a flyer in ups. I would wait till they get kicked out of the Dow and I would, and I would buy it. They figured out that Amazon is literally the worst customer they could ever have. And in January they announced a substantial restructuring plan where they are going to minimize their, their business with Amazon to I don't want to say the bare minimum, but substantially lower. They had become extremely reliant on Amazon. Amazon for UPS means high volumes of packages and extraordinarily low profitability on each delivery. And it just, it's. They're much better off doing things like small and mid sized business or international. So they are trying to transition the business. The problem is the company has to shrink to do it.
- [99:43]
Callie Cox
So dude, it's almost like stock market participants aren't stupid. I'm looking at the free cash flow of ups and it was 10, it was over $10 billion in 2022 and now it's three and a half billion and it's just gone straight down.
- [99:55]
Josh Brown
Do you know they just reaffirmed the dividend and, and then they're going to pay it out of negative cash flow for the. That's not great. But I don't think if you're ups, I really don't think you can cut the dividend. And a corollary to that is Pfizer. Like Pfizer got to the point where the dividend was like 6 or 7% and they refused to cut it because I think these companies know it. Like unless it's an emergency like GE or what. Like even Schwab, I think Schwab never cut his dividend. Like these companies, they intuitively know that's game over. That's where you lose your whole shareholder base for forever when you do that. And I think they get a lot of pressure from institutional shareholders that intimate to them like if you guys cut your dividend, I am definitely selling. And so. So UPS wants to soldier on. I think I would buy that one though. Just not, just not right this second. I want one more really nasty news announcement to come out. Maybe they get kicked out of the.
- [100:59]
Callie Cox
So Lulu is getting their lunch eaten by Alo. Is that the story?
- [101:02]
Josh Brown
Yeah, I wouldn't. And everyone else the truth is the quality of the clothing is not as good as it used to be. When you talk to their customers, talk to women who their entire wardrobe was Lulu three years ago.
- [101:13]
Callie Cox
Now it's Allah.
- [101:14]
Josh Brown
Yeah. They will tell you that they are much more willing to buy Vuori or Alo even though the prices are higher than then trust Lulu. And I don't know how you turn that around. It seems like it's a really tough thing to do. This Lulu, is the gap 20 years later.
- [101:31]
Callie Cox
Yeah, that's tough.
- [101:32]
Josh Brown
The gap has spent 20 years basically bleeding relevance still to this day. And that's what this reminds me of. So nothing there.
- [101:42]
Callie Cox
What about sweetgreen operational issues?
- [101:45]
Josh Brown
They're not, they're just not good at running this business.
- [101:47]
Callie Cox
At Sweet Green.
- [101:48]
Josh Brown
Yeah, so not. And I think they get up with prices and tariffs and, and also there.
- [101:56]
Callie Cox
That'S, it's a, that's a lunch spot. And who's, you know, it's, it's an office thing.
- [102:00]
Josh Brown
Yeah, that, that didn't matter, though. In 2024, I was in the stock. It was one of the hottest stocks in the market. And they had a really great story to tell about how robotics would ultimately take over the preparation of salads and on and on and on. But they're just, they're not ex executing, they're not hitting their numbers. They're guiding lower. They're not marketing well. It's a, it's just a, it's a tough story. I, I don't need that in my life. And I still don't know what they do.
- [102:28]
Callie Cox
United. I'd buy United if I had to buy one of these. There's not. I don't even know who number two is.
- [102:32]
Josh Brown
All right, all right, so fine. Would you put United up against UPS at today's prices?
- [102:38]
Callie Cox
So the reason, the end of the year, the reason why I would be more inclined to buy United is because this went straight down, where you can make the case that whatever is driving the price action is an overreaction. You can make the case just based on how violent it is. Whereas ups, it's just a slow bleed, which is matching the free cash flow and is nothing but lower highs. And it is just the cleanest downtrend. So to me, I, I draw a distinction between a falling knife, which is something that's going straight down, which is the other four, versus ups, which is like a slow bleed. To me. That's just heinous.
- [103:15]
Josh Brown
Yeah, we don't have, we don't have.
- [103:17]
Callie Cox
Nike in here because Nike's not. Nike is not a knife. There's no way. It's just not.
- [103:22]
Josh Brown
Look at the chart. It's still a little. I know it popped after its earnings, but it's still knifey.
- [103:26]
Callie Cox
No, it's not.
- [103:27]
Josh Brown
It's not. All right.
- [103:28]
Callie Cox
No.
- [103:29]
Josh Brown
All right.
- [103:29]
Callie Cox
It's gross. Happy.
- [103:31]
Josh Brown
Let's revisit. Let's revisit These in the winter. We'll see how they did. Okay, my bet would be ups, even though I think there's another leg lower, I think UnitedHealth might have permanent impairment to their business model. UPS has already acknowledged that and is actively trying to turn. Turn to a different. It doesn't matter. Who cares? All right, Apple. What will Apple do to find growth in the second half is the question. So let's put up this chart. The last quarter they reported last week was actually not bad. Phone Phone demand was high. I have a friend who's in the cell phone business and he pointed out that they're talking about switching from titanium back to aluminum, which means more broken phones, which means a faster replacement cycle. With titanium, the only stuff that breaks is the screen or the battery to force people to upgrade. And nobody's upgrading for a better camera because the cameras at this point are like sci fi, they're so good. ChatGPT is better than AI series. So no one's going to upgrade for Apple's AI. So how do you get people to buy phones faster and not hold on to an iPhone for 5 years? Make them break easier. So I know that's a really cynical take, but it also happens to be true. So if they actually go through with this and go back to aluminum, you will know the reason why they need the phones to break. Another thing they can do though, is triple the size of their ad business. It's $7 billion a year right now. Think about it.
- [105:08]
Callie Cox
That shocked me, by the way. That number shocked me. I had no idea.
- [105:10]
Josh Brown
Way higher should be way higher. Amazon decided to focus on its ad business and within a few years became the third largest advertising platform on earth. There's no reason Apple can't do this. And they're already in the business. It would not be from a standing start. Think about all the opportunities Apple has to put ads in front of you. Your eyes never take themselves away from their screens. So that's, that's a thing.
- [105:37]
Callie Cox
But wait, it would be, it wouldn't be on the phone. You don't want ads popping up on your phone. No.
- [105:41]
Josh Brown
In their. Within their services business. Within their services business, Apple has a huge opportunity in advertising. We'll just, we'll leave it at that. We won't go deeper. But like, just look at Netflix. They said in calendar 2025 their ad business will double. Half of Netflix's subscribers are now in the ad supported tier. Michael, that took three years. And this is a chart from a really good piece by Julia Alexander at Puck. But just the gist of it is if Apple decides they want to talk about advertising to Wall street and get really seriously focused there, that's a good answer to the question of where will Apple find growth? Because they're basically, they're in it, but they're not trying that hard and it could be way bigger and globally. And I just thought that was an interesting idea and we'll see if they actually do it. What are your thoughts?
- [106:36]
Callie Cox
I think in the short term the stock is so relatively depressed to its peers and just the sentiment, nobody's bullish on Apple that I think it wouldn't take much to change sentiment. Again, the stock to pop. Problem is they really do need a growth engine because the stock is not cheap and that's, that's like the bigger overhang. So they need either an AI play, which is I think seeming increasingly unlikely. I guess they can make an announcement, surprise us, or they go in, they lean into what you're talking about. And if they were to go from 7 billion to 20 billion, that would be significant even for them.
- [107:07]
Josh Brown
There's no ad supported tier for Apple tv, right? You're telling me if they launched an ad supported tier, they wouldn't pick up millions and millions of more subs who just don't want to pay the full freight for like, this is not new. Everyone's already done this. In fact, Amazon now defaults you. Amazon prime members are defaulted to the ad supported tier and you have to pay a premium to have no ads. Paramount is showing you ads.
- [107:35]
Callie Cox
Yeah. They want you, they want to show you ads.
- [107:36]
Josh Brown
Yeah. Netflix is showing you ads. Like Peacock is showing you ads. Hulu is showing you ad. What? What are you waiting for? Ad supported Apple tv. Do it, do it.
- [107:48]
Callie Cox
Bacardi Cola.
- [107:49]
Josh Brown
Just make it happen. All right, anyway, we're, we're, we're in to make the case.
- [107:55]
Callie Cox
Okay.
- [107:55]
Josh Brown
I pitched, I pitched this on CNBC today. It's really interesting story, so I wanted to rehash it. And we almost never talk about high dividend payers in this section, but I have one for you.
- [108:08]
Callie Cox
Ooh, the stock looks sweet.
- [108:10]
Josh Brown
Okay. Dominion Energy is a utility that's become a growth company. If I asked you what is the capital of the Internet geographically, what place in the world, you would probably say something like Menlo park or Cupertino or San Jose or you'd say like somewhere in Asia. But the truth is it's in Virginia. It's in a place called Loudoun County. This is where AOL was based 30 years ago when they invented the Consumer Internet. And that's where the first data centers were built to serve as AOL and then ultimately Yahoo and now Google and Amazon and Microsoft Azure. This is Loudoun county is called Data Center Alley. It is the largest cluster of data centers on the planet all in one place. The Wall street journal says 70%. Listen to this number. 70% of the entire world's Internet traffic passes through this Northern Virginia data center cluster every day. Like it's an unbelievable thing if you happen to be the local utility that is covering Loudoun county in Northern Virginia. It's like discovering oil in your backyard. So that's exactly what's happened here. All of this AI Capex shit that we talk about night and day involves electrification and spending on the grid and blah, blah, blah, blah, blah. And Dominion is the company benefiting more so than any other company in that area. So it's a boring, sleepy utility that realizes it's in the middle of a gold mine. And what's happening going forward? Because everything I just told you is in the stock. What's happening going forward is they in July formally proposed a rate increase to their regulator. The regulators will respond in September. This is called the rate case. And if they win their rate case, meaning it's a regulated business, they'll be able to charge more. And the reason why they need to charge more, they've explained, is Capex and spending related to this opportunity with all the data centers. So basically you've got a stock technically breaking out above 61. It's a 4.42% dividend. It's not just electricity in Virginia, it's also natural gas in South Carolina and a whole bunch of other stuff. Building one of the most massive offshore wind projects in the world off the Virginia coast. And you got a shareholder base that is largely there for the dividend yield. But now all of a sudden, you've got a lot of growth tied to this AI story. And the AI story doesn't end anytime soon. The amount of electricity need, I feel like it's forever.
- [111:10]
Callie Cox
So.
- [111:10]
Josh Brown
Yeah, so I like the story. I wanted to pitch it to you. Let's put this chart up. Last but not least, you know how I love these golden crosses like what the hell else do you need to see today? We broke above resistance dating back to last October. You got that 50 day rising above that 200 day which will be rising soon and not crazy overbought. So this is, this is, I think my, one of my better make the cases this year.
- [111:40]
Callie Cox
I like it. If you are bullish on AI and why wouldn't you be? The capex is not slowing down. But you're like. But $4 trillion, like, you know, I get it. We all get it. It's $4 trillion. This is maybe a safer, less risk way to play it. I like it.
- [111:59]
Josh Brown
Yeah. Look, Look, I'm saying $50 is the pivot point. 50 has been support for a while. So like if you're wrong, you risk 11 points. I really don't think it'll get there. I mean it certainly could. There's like a market wide event.
- [112:15]
Callie Cox
Yeah.
- [112:16]
Josh Brown
But I think so long as it stays above 50, you're getting a four and a half percent yield and I think the story stays intact. You can, you can stay long.
- [112:23]
Callie Cox
Okay. I'm not like it.
- [112:24]
Josh Brown
It's not going to double. It's a utility. Yeah, I like it.
- [112:27]
Callie Cox
All right, I brought a chart. The first chart is. Daniel, if you would. All right, this is the revenue. The quarterly revenue since the beginning of 2019. You could see that it's more than doubled of a.
- [112:43]
Josh Brown
This is a company's quarterly revenue.
- [112:44]
Callie Cox
Yes.
- [112:45]
Josh Brown
Okay. There's only a handful of companies. This could be at this dollar amount.
- [112:49]
Callie Cox
That's correct.
- [112:50]
Josh Brown
Okay.
- [112:51]
Callie Cox
Okay. It is significant. It is not a small company. And the next chart shows that over the same time period you've got in more larger swings, slightly larger return, but really nothing to speak of. The orange line is the SP 500. So 2019 to today, that's, you know, so long.
- [113:09]
Josh Brown
Oh, so this is the share price versus the S& P. Yeah. And the chart before was the revenue. Oh, I want to say I'm just, I'm looking at 2021 as my clue. I don't think it's a mag 7 because it didn't. Oh, wait a minute, 2022, it did.
- [113:32]
Callie Cox
Crash and it bottomed on every other max 7.
- [113:37]
Josh Brown
Is it meta?
- [113:38]
Callie Cox
No.
- [113:38]
Josh Brown
Is it Microsoft?
- [113:39]
Callie Cox
No.
- [113:41]
Josh Brown
Maybe go yourself. I don't know.
- [113:43]
Callie Cox
It's Amazon.
- [113:44]
Josh Brown
It's Amazon. Why didn't I know that? Oh, 176 billion should have been the tell for me.
- [113:50]
Callie Cox
But it's just kind of wild. Like the company's not, not working. You know, the business has grown over the last 66 plus years.
- [113:56]
Josh Brown
But dude, the chat all guest. Everybody guessed. Everybody guessed Amazon except for me.
- [114:03]
Callie Cox
But it's hard. The stock business is, it's, it's no easy, no easy thing.
- [114:07]
Josh Brown
I think that's my cue to shut up for the night. Hey guys, thank you so much for joining us on the the live. It was great to see so many familiar avatars. We miss you guys when we're not here. We really appreciate it. For those of you listening to us out in podcast land, hey, a review goes a long way. It's a signal to the algorithm at Spotify and Apple that what would doing is high quality. And this is how you support the show. Tomorrow's an all new Animal Spirits. Because it's Wednesday, we'll do another ask the Compound.
- [114:37]
Callie Cox
Wait, this goes live it on shop.com 9am tomorrow.
- [114:41]
Josh Brown
Oh I like that limited number. Very few itonshop.com will have the Grand Rapids head shirt and at the end of the week an all new edition of the Compounded Friends. So keep it locked. We'll see you soon. Thanks again.
- [114:54]
Callie Cox
Sa.