Animal Spirits Podcast - A Healthy Pullback (EP.357)

Episode Date: April 24, 2024

On episode 357 of Animal Spirits, Michael Batnick and Ben Carlson discuss: why the stock market needed a correction, why the 1990s is an outlier (in more ways than one), economic growth is a policy choice, Gen Z is doing better than you think, living in the U.S. vs. Europe, the number of households with a paid off mortgage, the renovation boom, and much more! This episode is brought to you by Franklin Templeton. To learn more about the Franklin High Yield Corporate ETF (FLHY) visit: https://www.franklintempleton.com/. Sign up for The Compound newsletter and never miss out: https://www.thecompoundnews.com/subscribe Buy tickets to live TCAF in LA! Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to by Franklin Templeton. Ben, do you remember back in the days of the pandemic and even really before the pandemic when high yield bonds, and when we say high yield, these are companies that are not an investment grade, like not Apple or Microsoft, but a notch below, we're yielding like 5%, give or take. They weren't high yield anymore. Yeah, high yield. I mean, it's all relative. And name only.

High yield and, yeah, that's right. High yield and name only. And there was, you know, at the time, people were allocated there because that's what you did, I guess, when treasuries were offering you 65 basis points, you said, I'll take more risk. I'll get 5%. Where are high-yield bonds today? I mean, depending on where you're looking, 7, 8, 9%, right? The yields are much higher. So spreads are still tight, right?

Spreads are still tight relative to treasuries because there's not, we're not in recession. The economy is doing wealth. Mark environment is good. Franklin Templeton offers a high-y-corport E-E-TF, FLHY, F-Y, H-Y, F-Y, What would be the investment case for high-yield bonds today? Well, it sounds like a lot of the bad stuff was kind of washed out during the pandemic, right? Like the zombies? Yeah, all the zombies were kind of washed out a little bit.

And so I guess there's this idea that because they're called junk bonds, which they need a new PR agency, obviously, for that name. High-yield does sound better. Yes, but I think it's more high quality. I think fixed income, too, the benchmarks are more inefficient, right? There's a reason that the stock market benchmark index funds are hard to beat, but in bonds, the way that they're set up is that a lot of these companies and a lot of these debts are added to an index just because someone borrows money. That might not be a high-quality borrower or lender when that happens, right? So I think it's, it actually makes more sense that it's a little easier to beat fixed income benchmarks as well.

You know whom by favorite active high-yield bond manager of all time is? Michael Douglas. Glenn Gullia. Close. Wow. Julia Guglia, that's funny. Why? I don't know.

Okay. So, to learn more about the Franklin high-yield corporate ETF, FLHY, please see the link in the description. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson

as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions.

Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits and Michael Ben. What do you think about that? No? I'm probably going to drop that. Yeah. Fair.

All right, Ben. We did it. We had a correction. The ICP 500 did whatever it did. Wait, wait. No, we didn't. 10% is a correction. I'm sorry. I'm sorry.

You're right. You're right. A pullback. 5% is a, that's good. 5% pullback. I apologize. 10% correction. 20% bare market.

What do you say for crash? 30 or 40? I'd say, well, it depends when. 30% if it happens to that because COVID was a crash, that was 34%. So if you have like a 30% bare market, that's just like a slow bleed. That's not a crash. It depends on the speed. Right.

2022, that was a bare market. 2020 was a crash. That's a crash. That's a crash. Yes. So I feel much better about where things stand than I did a couple of weeks ago. So you're in healthy pullback territory then? This is incredibly healthy.

Okay. This is very healthy. We needed it because the market, this is coming from that Davis research, Ed Clissold. The market was coming off an all-time heater. There's a heads where it's not mine, but it's true. The S&P 500 searched 25% in five months for only the seventh time since World War II. So we had gone, we were updating the stat about how long it's been since out of two, with out of two percent pullback, it was, or, uh, it had been, it had been, I don't

know, 80 days, 90 days. It was a long time. Uh, he also notes that the previous dates should sound familiar for end of major bears, 275, November 82, July 09, and, uh, August 20th. These were the end of major bear markets. And, uh, so this is great. So it's kind of saying this is, to your point, healthy behavior. You have a huge rocket off the bottom. And then you need to not just a, what do you call it, a correction over time? Through time. Through time, but with a healthy pullback.

We need a correction to price and we got it. You know, this is like, there's too much foam on the beer. You got to blow some of it off. And we did. So if you look at it, we're still up 22% from the October lows. And, yeah, 5% down from the highs, which a 5% correction happens pretty much all the time. I think it's like, I don't know, two out of the last hundred years or something, we didn't even have a 5% correction.

Wasn't, was it 2017? One of the recent years. 2017 was straight up. It was like a 2 or 3% correction. But here, listen to this one. So these are the peak drawdowns this year, not like cumulative, but just this year. Apple down 15%, Tesla down 43, Invidia down 19, Facebook, not meta, Facebook, down 10. And the S&P only down five.

So the question was, what happens when these huge mega cap companies fall? Does it bring down the market? The answer is no. Not really. A little bit, not much. Not yet. Not yet. Yeah. But I mean, these are pretty decent-sized pullbacks in a lot of these names, and it hasn't like crushed the stock market. That's what I'm saying. To Ben's point, we had the pullbacks corrections, bare markets where we really needed it

in these individual names. We needed it to cool off. Invidia's down, was down 19.8% from its peak. We needed that. That's super microcomputer is down 40%. That's the one. AMD took a whack microns. So all of these names that were you were seeing froth, we got the, you need to get some of the enthusiasm out of this. Now,

I will say, Ben, you mentioned like the mega cap tech is correcting and the market's, you know, doing fine for now. And I'm not, like, I'm not hoping for this.

Obviously, I'm not anticipating this or predicting this. If we get a bomb report out of Nvidia, and big tech really starts to careen lower that, that probably will have a bigger. impact on the market. Yeah, it makes up 30% of the market or whatever. It has to.

Yeah, of course, just by arithmetic. But I love this setup. I love that you're getting rid of some of the froth before earnings because if NVIDIA has another block quarter, maybe they will, maybe they won't, then we're set up for a healthy next leg higher. So I was thinking about this. We have these compressed cycles now that I've been talking about this for years. I've been talking about this for years, tech has sped everything up.

And so you get these periods of froth, and then you have a correction, and then froth and It's like we keep going back and forth between this for the last, it seems, four or five years or so. So I actually thought about this to the 90s and how we're, I've been, for some reason, I've been really, maybe because I'm middle age, very nostalgic about the 90s period now. Maybe it's just because of when I grew up and I was in grade school and high school and heading into college in those years and just very nostalgic for that period. And I feel like in the stock market, we're never going to see a 90s again because the information age was just starting. So look at the drawdown chart I put in here for the 90s. So the worst correction you had was there was an early 90s recession that kind of has forgotten historically.

The S&L crisis? Yeah, and that's housing prices actually fell then, which doesn't happen very often. And you had 19% in change in the S&P. Let's round it up and give it a bare market. But then you had the 98 Russia thing, which was emerging markets, that kind of was another little mini- Oh, wait, but then, between that period of time. Nothing. No 10% correction.

That's wild. Between like 1991 and 1998, no 10%. 10% corrections. So that was a decade. Not only did you have the bubble at the end where you had five years in a row of 20 to 30% gains, you had just calm waters for the entire decade. And I just don't think that's possible anymore. With the speed at which prices move now because of information. Yeah. Information. Ben, you mentioned having nostalgia. For when you were young, 90s were great period. And they were even better because we were young at the time. and we were talking at dinner the other night.

Man, we're getting old. The movie Twins, which is a classic, absolute, absolute staple of my childhood, was what year did we decide it was? It was in 88. 88? You know what else I saw over the weekend? It's the 35th anniversary of. A movie that I claim to have seen in theaters,

although now I'm sort of questioning my memory. But I really feel like I did. Field of Dreams is 35 years old. Did you wear that T-shirt because of it? no you're wearing a field of dreams t-shirt did you really literally just put that together i i honest to goodness just put that together well we have people who work with us now at our firm who i've never seen that well they've they were born after these movies came out yeah yeah we are old but i think so you know how there's there's a lot of people especially in the baby boomer cohort

who looks back so fondly on the 1950s period as like this the 1950s was just this like we need to go back that's going to be the 90s someday i think right I think we're getting closer and closer to people saying, because especially the dividing line of internet owning your life and smartphones and social media, thinking back on what a simpler time it was before all that stuff existed, I think there's going to be a huge, the 1990s is going to be the 1950s for millennials in Gen Z. Yeah. Thinking back on that time.

Yeah. Okay. So why am I, I don't know, happiest right word that we got this pullback, but feeling good about it. We've been asking for it. Yeah, I've been asking for you. Fine. We got it. Good.

Great. Torson Slock tweeted, there are simply no signs of a slowdown in corporate earnings. The economy continues to power ahead, fueled by easy financial conditions. And this is an upside risk to inflation over the coming months. But look at this chart. We're looking at S&P 500, 12-month forward EPS. And this is what everything hinges on. if earnings were to slow, and not even earnings, but guidance.

Guidance is the thing. You don't get credit for what you just did. Netflix is a great example of that, right? Netflix's stock had a hell of a run, a stock that I own, and they had a hell of a quarter. If you look at their financials, they were range bound in terms of like their net income or whatever bottom line looking at. Even beat like the subscriber estimates, right? Yeah, just a monster.

They're firing on all cylinders. Stock sold off 10% for various reasons. But my point is, you don't get credit for what you just reported, right? You get credit for what you're going to do. And so long as earnings per share estimates keep rising and companies keep issuing with positive guidance, then the market should be fine. If and when that changes, then, you know, different story. So one of the things that I like to poke fun out of finance is we only inflation adjust

certain things. Like GDP is inflation adjusted. People always say, what, did you inflation adjust this, inflation does that? No one ever inflation adjusts earnings, but I think it's a good thing. But for some reason, no one ever talks about the unintended benefits of inflation. this earnings chart, obviously these companies are doing well, but corporations are a big beneficiary of inflation for this period. Wouldn't you say with earnings as high as there?

Do you remember in- Well, I will say, let me give you a piece of data. This is from the transcript. In the fourth quarter, Procter & Gamble, which is soap and dishwasher stuff, right? It's household items and chemical calls and whatever. Procter & Gamble is October to December, 2023 quarter. Pricing up 4%, volume flat.

This is from the transcript. I think I might have mentioned that, but in case I did it. In the most recent quarter, again, pricing up 3%. Volume, 0%. So that's for the last two quarters. No growth, 7% pricing increases. All of it is come from higher prices. So is this good for corporations and investors?

Yeah, it is. Pisses us off, consumers, but it's good for investors. Yeah. And then it's also good for debt holders. And so corporations, U.S. government, that's a thing that no one ever, when people talk about how much debt we're in. I know it's still a problem, but we literally just cut 20% off of our debt, too. We added a bunch, but we cut 20% off as well on a real basis. True.

You know, I'm sure I must have subliminally gradless shirt, but it wasn't intentional. Okay. Because I saw it in the doc here. Okay. Felix Salmon from Axios. This is interesting. So in the 14 quarters since the brief 2020 recession ended, U.S. GDP has soared by 8.000. trillion dollars or 40% by contrast in the 14 quarters after the 2009 recession ended GDP rose

by a relatively measly 2 trillion or 14%. Now the counter here would be, well, yeah, the government printed spent five or six trillion dollars. This is what you get. But I think the point is after a recession or after a huge calamity like a pandemic or the financial crisis. Economic growth is a policy issue. Well, no, I disagree. What policy choice? No, it's a policy choice. No, dude. We chose not to spend money after the great financial crisis, and we had a crappy recovery because of it. After the pandemic, we chose to spend money and we had a great economic recovery. It was a credit crisis. It was a credit crisis. I don't think there was a policy issue. What would have been the appetite for this? These are completely different things.

There's a lot of stuff the government could have done following great financial crisis, like making some homeowners hold. There's a lot of stuff they could have, they could have, a lot of stuff they could have done that would have helped out. But the thing is, we don't get the 2020 government spending if we didn't get the lack of spending in 2009. Yes. But I'm just saying in periods like this, economic growth is a policy choice. It is. It has to be.

I think you're oversimplifying it. It's pretty simple. When we spend trillions of dollars, we added $8 trillion to the economy. The reason why we were able to do that, why there was political will for that on both sides to push it through is because the nature of the recession. was completely outside of the financial system. I agree, but now we know this, and the genes out of the bottle,

it's going to be interesting to see what happens. I just, I feel like we've gone back and forth on this. I just think you're oversimplifying it. If ending a recession or fueling growth was merely a policy choice, then we would never have deep recessions anywhere. It's not that simple. Well, no, it's more about the recovery than the recession itself. But to have or to not have a recovery, just being a policy choice,

I think you're oversimplifying it. We literally have examples. The last one we didn't do it, crappy recovery. This one we did do it. Awesome recovery. Okay, but you think, what about the rest of the world? Europe, I'm going to get to that right now. Here, we'll do this other one first,

then I'm going to get to U.S. versus Europe, and I'll prove this to you. All right, go ahead. Okay. Jeff Weniger shows the average annual wage in the U.S. versus the U.K., Germany, France, Italy, Japan, and this thing has a huge, It's basically the same number all the way through the 2000s until 2008.

And look what happened since 2008. U.S. wages took off. Wages in these other countries stagnated. And look at how much it took off even more. This is an average annual wage since 2020. We've left the rest of the world in the dust. Yeah, but we already did that. Look at 2019.

They were already in our dust. They were. But then look at the insane jump higher since then. And they've basically stagnated. I mean, listen, obviously the policy decisions that we made this time around massively contributed to growth. But maybe I'm nitpicking. I think you're oversimplifying it to say that recoverers their policy choice. But then in Europe, they had this fiscal responsibility. We've got to pull back and that's going to help. And that's been devastating to them. Look at this next one. This is kind of fun, too, just U.S. versus Europe.

It is average square feet per dwelling. And they break it out by state and then by country in Europe. And look at how much more room we have than those Europeans. Oh, it's right below the average chart. It's the color-coded one. The purple and the U.S. and the yellow. Oh, there is. I'm sorry. Right there.

So it's average size of dwelling by square foot. Oh, wow. In the U.S. versus Europe, we have so much more room than them. Listen, they have way better sites to see, way better history. They don't have air conditioning, and they have smaller places to live.

This is crazy, right? We don't know how good we... People in the U.S. don't know how good we... good they have it sometimes. Wow. Crazy, right? How many mud rooms do you think they have in Europe? Not many.

Wow. Wow. Another interesting thing to come out of... If the government spent more money, if I'm going to be chancellor of some European country, a mudroom for every house. We'll spend so much money. But the thing is spending money,

it's like, where does it come from? And obviously, not every country is... We can literally print our own currency. Maybe that's one of the reason that you... Yeah. Dude, come on. on. The rest of the world doesn't have that luxury of just unlimited demand for their debt. Which is kind of funny because... Like, if other countries try to do it, they'd crash their

currencies. They'd tank the economy. Which is funny because that's so many people complain about the fact that we can just print currency here whenever we want. And they act like it's a bad thing. It's like one of the biggest benefits that we have as a global superpower. Totally. Totally, totally, totally. Callie tweeted a chart of business applications. And And COVID was a watershed event in this aspect and so many others. There's pre-COVID and post-COVID. And it was trending higher, but it was like three and a half million business applications a year in 2018 and 2019. And now we've had a stair step higher and we've reset.

It's now five million plus. Remember there was a brief period for one or two months where people were talking about every single startup is going to be liquidated from COVID. Right? Before we really knew what the response was going to be. and I initially thought no one is ever going to start to start a business again after going through this

because their customers are all gone their revenue's gone they're going to have to fire their employees and then look what happens because the complete opposite it is pretty amazing yeah COVID it was a reset and it gave a lot of people

the ability of the freedom the gumption or chutzpita say you know what I'm done with that job like I want to do my own thing and we spoke last week about the nature of work I forgot in what concept we were talking about I was just saying

that we've worked the same hours over the past like 200 years or something, but I was claiming that weight color workers today, they don't really work hard. It's, we pretend like we do. I think we've traded physical exhaustion for mental exhaustion. Mental exhaustion. So I feel like I'm going to sleep early. I'm just, I'm exhausted at the end of the day. And you're right.

It's definitely not because it's anything physical that I'm doing. After our, after we recorded the podcast, I was thinking about this. This was my Tuesday as of. 1.30 p.m. I had 17 Slack channels going. Here comes a not to brag. This is not a not to brag. I think I speak for a lot of us. I sent four emails. I had done two podcasts. Obviously, that's unique to us. And I did three phone call at meetings. So take out the podcast, but that's typical of a lot of white-collar workers. It's just a lot of phone calls and meetings and this and that. That's the economy. You do wonder that trade-off of physical

for mental exhaustion, if that's why, like, anxiety levels are so much higher these days. Because you're constantly using your brain as opposed to, like, I think one of the beautiful things about doing physically taxing work is that you get to see the fruits of your labor right away, right? You paint a house. You get to see how much you've gotten done in a day or whatever, right? You plow the field. You see how much work you put in. That's crops grow. You don't get that anymore as much with a desk job. Well, another difference in terms of the anxiety, stress levels is that once you're done with a physical job, whatever that may be, you're done and you're done. You go home and you're not, you're no longer working. There's no line anymore.

There's no line. Slack never stops. Email's never stopped. So one of the things that my brother always talked about with my dad, my dad was a CFO for a hospital. And he, he retired in the early 2000. So, you know, email stuff had just kind of come on board. But when he left, the office at night, he would literally have his work behind him. It was pre-Blackberry, pre-Iphone, any of that stuff. You didn't check your computer for emails at night. It was just, there was a demarcation there that just does not exist anymore. Yeah. When you can always, like, I don't get why people ever even turn their out-of-office thing on

anymore. Like, that seems useless to me, to out of office, because you can check your emails from anywhere you want. Nobody's ever out of office. No, you're not out of, you're never out of office. So we have nostalgia for those simpler times, but like, it's, it's, it's, It's not black or way. It's not like now is bad and then was good. I mean, there's obviously a lot of wonderful things that came out of the internet.

And one of the negative side effects is we're always on and we're always a little bit overstimulated and over-anxious. And, I don't know. It's not going back. We can do stuff more efficiently, but it's always there too. All right. So remember all those talks about how, you know, generations now are way worse off than their parents, right?

That was a thing for a while from the economist, a typical 25-year-old. year old Gen Zier has an annual household income over $40,000, more than 50% of a baby boomers at the same age when adjusted for inflation. You look at this chart, every single generation from the lost generation to the greatest generation, silent generation, boomers, Gen X, Millennial, Gen Z. Each younger generation in succession makes more money than the previous generation, adjusted for inflation. It's pretty amazing.

I know people for years have said, I'm way worse off than my parents were, this is the kind of good news data that makes people very angry because you can always do a yeah but right this kind of thing will piss someone off i don't feel better off yeah have you tried to buy a house have you done this have you done that have you seen how much the group all that stuff this is what the data says though that is that has been a constant over modern history is that things are always getting better and it feels like they're always getting worse yes it really is true although i kind of wonder in the 90s did yeah they probably did i'm you're Remember some of the movies that came on?

The 90s, like I said, easily one of the greatest decades in history. Think about some of the movies that came out then. Fight Club was this book and movie for a nation about people who were just depressed with the way things were going. Think about that as a, as like an ethos. How about Limpisket? Was there anybody angrier that had their finger on the pulse of like that movement? Yes.

So I think that there's always going to be that pushback, I guess. Although I wonder our parents in the 90s, they must have thought, Yeah, we have it way better than our parents. Because our parents' parents were the World War II. So maybe what I just said about people I think are getting worse, maybe that's probably not so accurate. That's true. Okay.

I always talk about how everyone is bad at the economy. And I think one of the things is it's not like people are dumb. I think a lot of times they're just naive. But even like economists are bad at the economy. So this is from the Wall Street Journal. They show the quarterly average of payroll changes actual and forecast. I love these kind of charts that show, like the forecast of interest rates and what actually happens to them, this is the forecast of

monthly payroll changes. And every month since the start of 2023, the forecast has been, it's going to fall. Payroll is going to fall. People are going to be out of jobs. And every month it's been higher. And it even upticket then. And people have had to change their forecast. And the forecast are still calling for, although I guess that's like doubling down at the blackjack table until you win. Right. There's like the opposite chart of analyst estimates. You know, they're usually overly optimistic. Oh, yeah. Lower them every...

And look at growth forecasts. Same thing. People have been constantly predicting economy is going to fall. Economy is going to fall. And growth is going to fall in it. And it hasn't. I will give economists a bit of a pass like this go around. This was not easy to foresee by any stretch of the imagination.

It was also a herd mentality thing. Like when a bunch of people started jumping on the recession train and it seemed like a recession was imminent, I think a lot of people looked around. around and said, yeah, I'm going to call it too. Right. No one's going to be, people are going to love that recession forecast if it happens. And they're kind of kind of, yeah, they'll make fun of me a little bit if I don't, doesn't happen. But at least we have numbers here. Rewan yourself to that period of time in terms of through the lens of career risk. What was the upside of saying no recession? True. You know, me, cool. Like, you know, you were saying no recession purely to be a

contrarian. Like, you know, ha-ha, I'll say no recession. But if there was a recession, you look, You look like the biggest asshole ever. It's like, dude, everyone saw this coming. How did you miss this? That's a good point. You don't have a job. There's like two different kinds of contrarians. If you're a contrarian and you're bearish, you look smart.

If you're a contrarian and you're bullish, everyone thinks you're an idiot or you're not that smart. Yeah, Tom Lee gets mocked. The guy's been right for a decade plus. Right. Yes. Jeremy Siegel's called like a permable and those guys are right more than anyone. Yeah, come on. Yeah.

Yeah, that is an interesting double standard. All right. What are we looking at here? Oh, we got an email about one of our listeners got a SWAT team sent to his house. The crypto scams are wildly out of control. What was the nature of the story? It was basically one of the Coinbase. It's always Coinbase.

It seems like people use Coinbase as a, just must be because they have the most customers. So it's basically like, send me this money from your Coinbase account or I will send a SWAT team to your house and say that like someone's been kidnapped. And it's like, you know, you hit delete on that. And someone emailed us and said that, like, the cops actually showed up to their house. Someone actually called in and said, which I don't know what that really does to you. It scares you a little bit, I suppose. That would be pretty freaked out. Yeah.

Did you see the email that came in? Somebody said that it was a scam. Obviously, they got emailed by Jerome Powell. No. Did you see that? No. Saying what? Send me some money?

I forgot. It was a long silly email. Okay. I think on the compounded friends last week, We talked about boomers with paid off mortgages and how what an advantage that is for the housing market. So Lance Lambert at Resi Club sent me some charts that he made, and it's the percentage of mortgage-free homeowners, and it shows it by year, and it goes from 32% in 2010 to nearly 40% now. Then he also broke it down by different county. I guess you can get this data, which is crazy.

And down by the U.S., look at that middle part of the country from like Texas up. How many of these counties have 70% of homeowners with paid off mortgages? Good luck by Alaska. Look at all those people with paid off homes in Alaska. I mean, imagine being a whole, I don't know how many people live in some of these counties that have, you know, a high percentage. But imagine being a first-time homebuyer in one of these places, the disadvantage that you're at. It's wild. The access to data and information that we, and I mean, like all of us have and how it's reflected in the market and all that sort of stuff.

This is a beautiful chart. There was something also I saw this week that I was like, man, this is wild. So Fred Katz tweeted, the Knicks have added referee tendency statistics to their media notes. First time they have offered this info publicly is in their game notes they gave to media before game one. So they show Scott Foster, Bum, and two other refs who I haven't heard of. And it shows like it breaks it down by foul calls, defense of three second violations, traveling violations, offensive fouls, technical fouls. It shows the crew challenge overturn rate, like it shows it by individual referee. Right. They call more fouls than them. That's crazy.

So every aspect of everything has this level of granularity. It's pretty wild. Everything that can be quantified will be quantified. Yes. All right. I've been calling this one for a while. Bloomberg had a piece on the home renovation boom. And it It shows nationwide homeowner spending on home renovations, four-quarter moving total, just up and to the right. There was a brief interlude there in the 2008 crisis, and now it's rolling over a little now, but just astronomically higher since the early to mid-2000s. They also tried to break down the number of homes not sold because of locked-in mortgage rates

and just keeps rising. Like, this is the activity we would expect in a normally functioning housing market, and so more houses are building up. I think we built our house in 2017. There's already stuff that we look at it. Ah, we wish we would have done this differently. You know what the big one is, especially with kids? I would not have carpet in any of my house.

Isn't your whole house hardwood floors, basically? Yes. If you have kids, carpet is the worst form of flooring there is for children. Oh, yeah. There's no way new houses are putting down carpet anymore. No, I'm sure it's cheaper. than other stuff, but... Where does carpet even go anymore?

It seems so antiquated. Probably in bedrooms. Yeah, in bedrooms. But they have like the, they have the, we've gotten the waterproof vinyl, whatever, fake stuff. It looks kind of like hardwood, but it's also waterproof for kids. I would just cover my house in that stuff. The house that I grew up in, the entire upstairs was carpeted.

Not the kitchen. Right. I think about how many times my parents replaced carpeting over the years, like four or five times probably, because it would just get really. ruined so easily. It is funny, too. If you had an old house and you, like, rip the carpet up to chains of flooring, there'd be, like, beautiful hardwood floors underneath carpet. Like, people thought, like, yeah, screw these hardwood floors. Let's put carpeting over it. And I'm sure we could have a long list of things that weren't better in the 90s. Carpet, number one.

Yes, housing, that's a good one. Houses, if you look at houses built in the 90s, they might as well been built in the 50s at this point. Well, they were. That's why there's a, that's why there's a renovation boom. I've said this before, but I'll say it again. The layout of the house that I grew up in made no sense. So upstairs, it was like a split level. Upstairs, it was my bedroom, my sister's bedroom, and my mother's bedroom, with one bathroom. It's like they didn't think about this stuff. With one, and my bedroom was, and my bedroom was, legitimately 10 by 10? Maybe. It was probably 100 square feet. So it was, it was tiny. And same thing with my sister's bedroom. And the master bedroom was probably 15 by 15. And one bathroom. And then the kitchen was attached to all of that. Who thought that was a good idea?

They just like throw the rooms together and shake it up or something. Yet other houses don't make any sense. Ben, last week we spoke about the grass is always greener syndrome. Yes. The notion that we go on vacation and we say, I can really live here. What a wonderful existence this is. Well, I listened to the episode today,

and you read an email from a listener that talked about downsizing their house to reduce expenses, and then extra time and money. And you also read an email about how you will adjust to wherever you live pretty quickly. So this person moved,

I want to say where to. Their house value tripled. COVID-up ended our lives and thinking in a lot of ways we decided it was a good opportunity to cash on and try something new. We had some great family vacations at Disney. and so we purchased an investment property there in 2021.

They've been living there for almost two years, and I've learned some valuable lessons. When we came to Florida in the past, we were on vacation with no responsibilities. So everything was relaxing and fun. Yes. Now we have work, school appointments, and a big house to upkeep and clean.

Everything grows constantly here, so the landscaping needs to be maintained all the time. When guests come to visit, they are on vacation. But we are not, which creates a weird dynamic. So anyway, this person sums it up very well. I've learned that bigger isn't always better. There's a lot of value in keeping things simple and easily manageable. That is one of the things that plagues everyone is the grass is always greener syndrome,

whether it's a larger house or a vacation house and I can live here house. Yes. Yeah, it is true. You get this ideal in your head and it's never exactly like it. We had a handful of emails for people like this. Right? Like people, it's a buy the rumor, sell the news type thing. Yes. Yeah, we got a few of those.

Okay. Another one from Torsten Slack. This is, yeah, this is from Torsten Slack. In the U.S., do you see this chart before I quiz you? Yeah, I saw it. Sorry, I was reading it. 87% of firms with revenue over $100 million are private. I would never have guessed that.

I'd love to know, obviously, inflation and adjusted. I'd love to see like a line chart over time. of the percentage of companies with that sort of level of revenue that are public or private. And I'm just going to guess that this has gone higher and higher and higher over the years

as regulations make it less desirable for companies come public, as private markets have exploded in terms of liquidity and all that sort of stuff and private equity firms have got a much larger. Yeah, private

is a big piece of this too, obviously. Yeah, yeah. They can keep them private because they're funding them. Yeah. All right, this is now the third bite of the apple we've gotten out of the Bank of America a conference call. I spoke about some charts on

what are your thoughts. We spoke about more with Art Hogan on TKF. By the way, did you have a good time at the TKF? I had a great time. It was fun. Good feedback on that one. Not to brag. A lot of people were commenting on my physique. You look amazing. Kind of awkward. I mean, credit to you.

This camera angle just doesn't do me justice. It really doesn't. That's true. No, because you know what's funny you mentioned that? Because I was watching a little bit on YouTube. And I got to say, you look, you look jack to the tits. Do you still have your physical trainer? Your trainer? Yeah, I still do have my physical trainer, although I feel like I'm like getting hips somehow.

What does that mean? I don't know. Like, I look like, I'm like, I'm like wide down here. I'm not, I'm not, I'm not, we look very different. Let's just let's put it that way. All right. But these, yes, no, that was fun. But these, I think these credit card and financial firm earnings calls are very helpful.

in terms of economic activity. Yeah, so there's no company that I can think of in the United States that represents the state of the overall consumer better than Bank of America. Would you agree with that? I'd have to think about that. Let me get back to you. Pretty close, but I'd have to think about that. How about this?

Maybe you could probably put JP Morgan in there, but I'm just saying just from the point of learning about the consumer through an earnings call and an earnings deck, nobody does it like they do. All right. So in terms of they have a chart on credit card days past due trend, they break it down by 30 days, 30 to 59, et cetera, and the longer goes out. They said we were encouraged by the trend of delinquencies because the late stage increases slowed and early stage delinquencies improved as well. And that leads us to believe we should begin to see consumer net charge off start to level out over the next quarter or so. That's good. So there were some delinquencies, but it's getting better. Yeah. On, let's see what they said

about commercial real estate. Roughly one-third of our office exposure is now categorized as reservable-criticized. And importantly, the pace of the increases in reservable-criticized exposures has slowed each quarter since the second quarter of last year. What does that mean? Reservable criticized. That's, I think that's how they,

that's how they categorize maybe write-offs. Okay. Reservable criticized. So how much they're taking for, like, net charges, I'm guessing. Okay. So we believe the losses on these office properties have been front-loaded and largely reserved. We expect the losses to move lower in the second quarter,

and we expect a notable decline in the second half of the year when compared to the first half of the year, absent any material change in expected real estate prices. Now, they could be wrong, but they have no reason to be overly optimistic right on an earnings call. Isn't it true, though, that the banks being better capitalized or in such a much better position to handle this commercial real estate, whatever it is?

If this thing happened at the same time as 2008 or whatever Oh, forget about it. So look at these charts. So they show consumer net charge-offs, and they, like a lot of other people, were taking big provisions for losses that mostly never materialized. Now, it is going higher, but not catastrophically. The net charge-offs, not reserved.

So these are actual charge-offs. But if you look at the commercial side of it, talk about being front-loaded, This is the thing that we keep saying. There's all these articles about there was a building St. Louis that got written down tremendously. There's all these articles. And you're like, well, where is the wider crash? Look at the commercial net chargeoffs that they took in the first quarter of 2024 compared to previous quarters.

It quadrupled. Pretty big one. We know that commercial real estate is fucked. Right. And the banks know it too. Right. They're holding all these loans on the books. They know it.

Yeah. So they're writing them down. All right. Alex Morris has a wonderful substack where he talks about, I think he owns 13 companies in his portfolio. Netflix is one of them. I also own Netflix. And it's just a really great way to read about these companies, the fundamentals, and it's like easily digestible. So I'm happy to pay for that service.

Here's a chart showing Netflix operating income. And Ben, I was mentioning earlier in the show how the financials of Netflix had gone sideways for a couple of years in terms of their operating income, right? Look at that breakout in 2024. So Alex says it's pretty astounding to think about the evolution of Netflix's financials. In 2014, the business generated revenues of $5.5 billion. Revenue. Fast forward to 2024, an EBIT that's earnings before interest in taxes, basically bottom line. An EBIT, or close to it, EBIT is now a $10 billion, despite spending $17 billion in content.

How wild is that? You know what they're way better at Netflix than every other streamer? When you're binging a show and you go from one episode to the next, these other streamers, Netflix just goes right to the next episode. These other streamers make you sit and watch the credits and you have to fast forward it or hit back to go to the next episode. Like, you just want to, when you finish an episode,

you want to watch the next one right away. These other streamers just don't have it. How come Netflix has anyone has figured this out? They make it easy for you to keep binging. I don't want to sit through all the credits. Give me the next episode. All right. Wait, one more thing on this topic

about why do companies sort of do things this way. I was listening, and this is a bit of a tangent, so forgive me, but I was listening to Fantasy and Amanda Dobbins at the Big Picture and they were talking about their most anticipated summer movies. Did you listen to this? No. Any good ones? So I can't wait for Alien Romulus and Mad Max

the new Mad Max movie or the new Fury Road movie. Future also, yeah, looks good. Looks amazing. They mentioned the new or the English version, the American version of Speak No Evil. Okay. Speak No Evil is the most horrific movie in terms of

like it hurt to watch I've ever seen. It was a British movie or something or what? No, it was Nordic. I can't remember where. And it was just so beyond grisly. Just anybody that has watched it,

it shakes you to your core. Like, that's how bad it was in a good way, but also in a bad way. So anyway, I bring this up to say that they completely completely spoiled the movie in the trailer. They gave it away. And I kind of wonder,

and they were alluding to this, one of the reasons why they might have done that is to you need shock value to get people to go to the theaters. Because otherwise, if it's not mission impossible, people aren't going. So you show the release, and then people like, what?

I have to see that. But they really spoiled the movie. Okay. What was the horror movie that I spoiled that one time? You got mad at me. Barbarian. Just a long one, yeah. Okay. I was perusing the DR. Horton. The other one I like for the real estate market is just looking at the home builders, right? D.R. Horton is one of the largest home builders in the country. So they said they talked about

how mortgage rates are impacting, and they also talked about their buyers. And they said their buyers have an average FICO score of 725, average loan to value ratio of 89%, meaning 11% down payment. First time home buyers represented 15% or 57% of the closings in the quarter, which is pretty high. Still see strong buyer demographic and demand, and we remain consistent that we have seen fluctuations in rates, but they've not really been significant enough to have any meaningful impact on our backlog of people's ability to qualify. So rates going to 7.5% have, haven't really slowed buyers down. They talk about how if rates were to go from 7 to 8% again,

that's a little more challenging. So they said if it goes that high, we would expect to see our incentives increase to keep our base. So if rates go higher, they're going to keep buying down these mortgage rates to make it, I'm sure they figure their sweet spot, whatever it is, 6% or something. I would, if I was in the market right now,

I'd still would be a new home buyer if I was a buyer, if that's possible. I think they make it, they're going to make it way easier on you than trying to, figure out the demand or the supply in the regular market. Also, great. The search feature on quarter is amazing. So good.

I just was searching for keywords on here because I didn't want to go through the whole thing. Very helpful. All right. I do wonder, what do you think happens if rates go back to 6%? Let's just say if and 1. I don't know. 6% is going to feel like a blessing for people that are on the side end. right now. Because mortgages have been at seven for so long.

It's a half of these relatives. So you anchor to the high price and you look at your down payment and your monthly payment. And at 6% it would be a big difference. I agree. Okay. We've been reading some good emails from people attitudes. Last week we talked about how rich people that don't feel rich, right? They make 400K, but they don't feel like it. This person says, I have a weird thing where I feel considerably richer than I probably am. I think it boils down to almost solely to free time. I work an easy job and own three small businesses, so I have a reasonably good income. But because my job is easy, I can basically do whatever I want whenever I want. My conjecture is that free time during the day is a feeling of being rich that people want.

They don't equate rich with money. I work hard. I'm not rich. Rich people are always doing non-work things and I'm always at work. So saying that, like, if you actually have control over your time, that's being rich. Yeah, I like that take. Certainly a part of it. I like that take, too.

I think the backlash that people have to these attitudes, it's very, very simple. If you're making $100,000 and you see somebody at $400,000 saying that, they're not rich. What the $100,000 income person does is, what? If I made $300,000 more dollars, I could do whatever I wanted. And while that might be factually true, the person who's making $400,000, it doesn't, you don't go from $100,000 to $400,000, right? It happens gradually for most people. And their expenses rise with their income such that at the end of the month, they don't feel rich because they're probably not saving a ton of money because their fixed costs their cars, their houses, they're this, their that, probably crept all the way up.

So I think like that, it's very simple. That's where a lot of the backlash comes from, I think. Isn't that accurate? Yes. And I'm actually okay with the, the other part is people always say, like, it depends where you live. You know, that's a big one. But I'm actually okay with lifestyle creep as long as you have savings rate creep, too. Just keep your savings rate the same.

Like, because you should have lifestyle creep. If you go from 100K to 400K, unless you're a complete fire psycho, you're going to spend more money. And you should spend more money. Yeah, that's what money's for. But you should also have, you should also have, you should also. save more. Like if you have a 15% savings rate, keep it 15% and then you're spending to go up too and you're already knocking out the savings. That's Mike. All right, Bloomberg had this piece about billionaires avoiding taxes, talking about like having control of your time.

So this is the lead into this article. And New Jersey's Teterboro and Long Island's, how do you say that? Islip? Islip. I slip. Airports, dozens of private jets destined for Florida take off at such times as 1142 p.m. or 11.54 p.m. over at JFK, a regular friend from San Juan, Puerto Rico, arrives at seemingly purposeful time about 15 minutes after midnight. Meanwhile, tax attorneys tell stories of clients idling their luxury SUVs near the New Jersey entrance to the George Washington Bridge shortly before 12 a.m. waiting for the clock to turn before crossing the state line to New York. So this is the idea that you have to live somewhere else for a certain amount of days if you don't want to pay the New York taxes, right? Billionaires

who split their time between Florida and New York. So they're like literally sitting on the highway because they, the New York state, like they'll track people somehow, right? Do you really spend enough time away from New York that you don't pay the New York taxes, right? For me, I think a big thing of wealth is convenience, and this doesn't feel very convenient to me. Even if it's saving yourself millions and millions of dollars in taxes, and I get why these people do this, imagine being a billionaire in doing that. It's so inconvenient. You think at that point, you know, I get it. It's millions and millions of dollars. Right. Right. So I'm, I think everyone's knee-jerk reaction is those motherfuckers. And I totally get that, and I'm mostly there.

But I also do kind of understand it's like, yeah, sorry, I'm going to sit in this car for another 30 minutes so not to not to pay $7 million more in taxes. You wouldn't do the same thing? I would just hope that if I'm a billionaire, convenience matters more to me than saving a little bit of money in taxes. Listen, I'm with you. I'm with you. They showed a chart showing that the New York millionaire departures have jumped since the pandemic. And like everything else, we spoke by this earlier, there's a there's a dividing lie before and after. And it's wild.

That's like a triple almost. There was like less than a thousand people leaving a thousand New York millionaires leaving before the pandemic. And now it's at least two and a half times more than that. This jumped out to me. New York's Department of Taxation and Finance has 300 auditors dedicated to conducted residency audits and they are notorious for their thoroughness. Bank records, phone bills, and family photos are under the microscope.

Auditors are backed up by sophisticated artificial intelligence-fueled tax monitoring systems that flag inconsistencies and returns. the AI component of this, like this is coming for everything. Yeah, right. Yes. I asked Bill Sweet about this before. Like, if you had a client in California,

New York who wanted to move somewhere that had lower, you know, I'm moving to Texas, I'm moving to Florida and living there more than half the year, whatever the number is, Bill said, especially in those two states, they'll check your credit card statements

to make sure that you're spending enough in the one state versus the other one, where you have your driver, all this stuff. But you're right. the AI component of it will be even harder, but way harder to beat, too. Speaking of California, last plug,

last plug, I'm doing a live show with Josh on Tuesday. So a week from, we're from tomorrow. You take off your spring break soon, right? We'll record this Monday because I'm leaving for California tomorrow.

We've got Matt Bellany of the park who we'll be talking the business of streamers in Hollywood, and we've got Doug Ellen, the creator of entourage, who actually grew up in my town and I think went to my high school.

Oh, really? So that's Tuesday, April 30th, Lincoln Bio. I rewatched an old entourage episode recently, the bar mitzvah episode, where Ari's daughter, is it bat mitzvah or bar mitzvah? One of those, bat mitzvah. And Turtle and Johnny Drama just get stoned and eat all the food. And it's just excellent. That show, towards the end, it's like a lot of shows, it probably overstayed us welcome.

But at the beginning, that show was just, I loved it. Fire. Another one from Apollo. younger households tend to have lower credit scores and the consequences that Fed hikes and associated tight of credit conditions tend to have a more negative impact on younger generations. So they've got an average credit score by age. And of course, this goes up to the right, meaning the older you are, the more likely to have to have Ben Carlson my credit scores. See, this is when I'm an old soul. I've fallen with a 78-year-old plus

were credit FICO scores. So we spoke earlier in the show about boomers having 30, what was the number 39% of their mortgages paid off? Or was it boomers or not boomers? overall the number is like yes that's overall but the large percentage is boomers obviously so just another example of young people being more impacted by the current climate right which makes sense that young people have lower credit scores because they'd have been a time to build up a good credit score part of it is how much credit you use and on-time payments and all the stuff a few people emailed us and said self-driving cars eventually solved the auto insurance crisis how well if you have auto rates are going to be way lower

if there's self-driving cars all over the road, right? Are self-driving cars? This is a naive question. Will there be less accidents because of self-driving cars? Yeah, that's a hope. They have the sensors and stuff. They can talk each other. But who pays for it?

Still the, yeah, still the car driver, the owner of the car will still pay for it. Yeah, but isn't it going to, how is that going to work, though? If you have the self-driving car company that puts in the sensors and the monitors and it gets in a car accident, is it really your fault?

if the car is driving. So, yeah, I don't know, but it feels like this is one of those ones that I think I've mentioned before. My oldest daughter just turned 10. And when she was born, I asked the question to some people, I said, is she ever going to need to drive her own car? Because we were talking about self-driving cars back then. It seems like this is one that's taking away, way, way longer than people would have thought or hoped. I know in some cities they're using them as taxis now,

but I would have thought we'd be further along at this point than we are for self-driving cars. Seems like... What is this is like a 2040 story? Here's a good chart from Charter. Uncrustables are now nearly a $1 billion business from Smuckers. Wait, what's Charter? Actually, Robin Hood just bought them. You don't subscribe to Charter?

Okay. Like most places, a quarter, put an R at it instead of any. Yeah, I think Robin Hood just bought them. So why do all little kids hate crust? Do you cut the crust of everything for your kids? I do. It's why do they hate crust? What is so bad about crust that kids

don't like to eat it. None of my kids like crust. I'm constantly cutting crust off in it. Like, try it, you guys. You know, now that you mentioned that, I'm shocked. So Kobe, he eats raisin, he eats two pieces of raisin bread. That's his thing. What do you want? Two pieces of raised bread. He's twice a day, I feel like. He, he like folds him and rips him in half and he eats it like this. And he just eats until the crust is gone and then he gets rid of it. So you have to cut it off right. I'm shocked he doesn't have you cut it off. Yeah. Well, have you seen these uncrustable things before? Just as little circles

that it's the middle part of the PD&J. Genius. It is pretty genius, but I don't understand why all little kids hate crust. What is it about crust

that they don't like? Yeah, I'm sure there's a, I'm sure there's a reason. I don't know what it is. Okay. You know what? I'll take a gut. It's just not, it's a little,

crust can be abrasive. butter the bread, I put the butter on the pan and with the butter melt, then I put the bread on there. Yeah, that's how I do it. I don't know that you won't do it the other way. Hmm. I thought the only thing I'm good at cooking. Then I have cut the damn crust off for him. All right, we got an email. I'm staying at the four seasons in Denver. Four seasons, that's in a very expensive hotel, right? Yes. Bull market and emails today. Went to the pool today and got a single margarita. I got a pathetic half glass mixer margarita, high school bull. shit drink. The bill was $45 for a single drink. Would you complain? I didn't. Build it to the

room. Not happy, though. You'd complain I wouldn't. Forty-five, that's borderline. We already know your history. You'd definitely complain. Dude, $86. I'm sorry that you're too much of a nice guy to not complain. $86? That's just highway robbery. 45, that is borderline. Depends. How about this? If I had, if I was a little, but, yeah, I probably would say something. That's egregious. He said this was recommended by the server. If you get recommended, though, they should tell you, by the way, this is $45. True. So, so you know. So then he said, I complained to the hotel checkout and they took the drink off. So, see, squeaky wheel gets the grease, Ben. All right. All right. Recommendations. What do you have? All right. Josh pounded the table for Fallout with us last week on Friday. And so I think my wife and I watched three or four episodes this weekend.

It's good. It's a show that feels like a movie. Did you watch it yet? I tried to, and my Amazon wasn't working on my TV. But I'm in. Yeah, we binge like three or four episodes this weekend, and it's very good. All right, I got sucked into office space this weekend on HBO Backs. Easily one of the best movies of the 90s.

I have a few things here. Our rich talk, you know, Lawrence was having the talk on the couch of what would you do with a million bucks? And Lawrence is a guy with the mullet. Yeah, Lawrence, which is just great. Yeah, he's the guy from Drew Carey, just plays it perfectly. We all have the line. But no, this is a different one. I'm not using that line.

But he says to Peter, what would you do with a million bucks? That's a conversation they're having. I almost inflation adjusted it, but I don't want to be that guy. And Peter said, yes, he did. Yes, he did. What is it? No, I didn't. Well, the movie come out, 1998?

I didn't do it. I thought it was earlier than that. But it's probably, I mean, it's probably $2.3 million an hour or something like that. So Peter says, I would do nothing. And Lawrence says, you don't need a million dollars to do nothing, man. Take a look at my cousin. He's broke. Don't do shit.

Getting back to the time thing, right? Which I just, I loved that line. Whatever happened to the Michael Bolton guy? He was great in that movie, and then he never did anything again. I'm going to guess he went off the rails. I'm going to guess it was a mental breakdown. Okay. Because he was very funny.

And one other thing, is that Jennifer Hanneson's best movie? I think it might have been her first movie. No. Nope. Nope. You know what her first movie is? What? Lepricon.

Oh, good call. That'll pre-friend. So, I mean, next is probably Long-Came Polly, but it's probably Jennifer Anderson's best movie. I do love

a long-came Polly. Anyway, it's got another nostalgia piece for me, but just that movie, even though it was in the 90s, still just ages perfectly. You know,

it's one of my favorite Jennifer Anderson movies? What's the one with, where she gets fake kidnapped with Clive Owen? Derailed? Oh, I love that movie.

Yeah, it's okay. I mean, that's a very me movie, right? Yes. That was actually not bad. It was a little twist that she, yeah, it was fake, yeah. What do you got? Kobe watched Space Jam 2.

Truly, truly horrendous. Pretty bad, right? He loved it so much. This was last week, I forgot to say. He made us do like a movie night where he was like, you got to watch us. So we sat with him and he watched it. And I mean, whatever, he loved it.

But it was like truly unbelievably bad. Shocking. I don't even know how that happened. I feel like it kind of got swept under the rug a little bit. Like, hey, we'll give LeBron a pass. Yeah, I have no idea what happened with that. My son's top Tom Cruise movie this week was Edge of Tomorrow with Emily Blunt. Good one.

Love that movie. He's watching that? Oh, yeah. Good for you. I mean, he's into every Tom Cruise movie there is now. Somebody emailed us, emailed me, hey, my kid's 13. Can I take it to see Civil War? And I was like, ooh, I don't know about that.

And I'm not thinking back. I saw a nightmare announcement when I was like six. I saw 8mm when I was, I don't know why I said it that way. But 8mm was one of the most, one of the darkest movies ever. I think I was probably 14 when that came out. Okay. Well, when you're a teenager, then, yeah, you sneak into movies. So that doesn't count anymore.

Yeah. Anyway, it's playoff season. So I'm probably not going to be watching, although maybe I'll watch a movie on the plane. I'm pretty much out. Did you go to the next game yesterday? I'm pretty much gone until June. Or two days ago, whenever it was? Oh, yeah.

Fun? Top five game in my life. Really? Okay. That's recency bias. Yeah. No, it's not. dude. It's not recency bias. You don't know the history of the New York

next like I do. It's not recency bias. You mean your regular season, Charlotte Hornets game with me wasn't top five? So just speaking about like being old and all that sort of stuff, I've been going to the Knicks game since 1992. And really nothing good has happened. There's been like a few moments in time. But I never stopped going. So it's been just, I mean, you know, you're a Lions fan. It's just been torture. And we're finally on track. Okay. I'm pulling for you. I'm a Jaylen Brunson fan. Thank you. Okay. So I will, I guess I'm bringing a mic to California. The show must go on. Not going to do the show. Yep. We'll do the show live from California next week.

You'll have some travel stories for us, I'm sure. Check out Talk Your Book this week. We actually talked about the Bull Case for India. That's a good one. Which is very topical and interesting. And right up my alley. Email us, Animal Spirits at the CompoundNews.com. Thanks to the production team, as always. And we'll see you next time. Okay