Animal Spirits Podcast - Are Free Markets Dead? (EP. 479)

Episode Date: August 26, 2026

On episode 479, ⁠⁠Michael Batnick⁠⁠ and ⁠⁠Ben Carlson⁠⁠ discuss: the Treasury bond buybacks, Stanley Druckenmiller's op-ed, the real government debt risk, the most hated asset class in the world, why Bitcoin woke up, the end of the Go-Go years, finance bros are having a moment, private market fraud, the high cost of housing and transportation, Jean-Claude Van Damme and more. This episode is sponsored by YCharts. To learn more and get 20% off your initial YCharts Professional subscription, visit https://go.ycharts.com/future-proof-2026 (new customers only). Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Us On Social Media: Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 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

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new customers only. Welcome to Animal Spirits with Michael and Ben. Michael, I didn't know that treasury buybacks were a thing. Like buying back shares of stock? I don't think this is a conversation we've ever had before. Is that fair to say? Quantitative using? That's different, though.

That's the Fed. This is the Treasury. I know they're kind of all the same. What is your initial feeling about this? So Scott Besant last week said, hey, we don't like the way the direction of long-term rates. Everyone is worried about it. We don't want them to be higher.

We think they should be lower. So the Treasury is going to do what we can to bring them down. And they made a drop in the bucket in terms of a purchase. Rates fell for a little bit. Then they immediately rose back the next day. And now they're saying, No, no, we're going to take the bazooka to this if we have to. My need-jerk reaction is, I am a free markets guy.

I don't like this. I don't think that there should be government, treasury, political interference with the bond market. This is a market of buyers and sellers. Interest rates are determined by things that are far out of. the control of Mr. Scott Bessent, who looks like, what's a character that Will Ferro plays in SNL when he's got like the,

he's like a, is he a NASA guy? He's got the funky space hair. Oh, you're right. He does kind of look like that. I can see that. I don't think it's going to work. Wolf Fero can play a good Scott Besant, you're right. But I do feel like the timing might be good.

Like, I don't know if it's going to work. it worked for 24 hours. Rates came down quite a bit. The next day, niche-nished, took it all back. But they're doing it at a place, at a natural place. So it might work. It might work, but I don't like it. Okay.

The free markets thing, I applaud you for taking a stand in principle. Like, there's no such thing as free markets. Let's be honest about that. They've always controlled these rates. In World War II, the government put their foot on the rates, and they said, we're keeping rates low so we can borrow for the war. In 2020, the Fed was buying bonds to bring rates down. So there's never really been free markets as far as I'm.

Well, I completely reject that. There's never been free markets because two other times. Well, I'm just saying this isn't like, it's not a new thing for the government to try to control rates. This is something that has happened before. My thing is, I feel like this is just kind of part and parcel of where we, you know, are in society. You just want there to be an easy button for everything. The way to really bring rates down would be to stop the war in Iran and take away all the tariffs. That's how you bring

rates down. If they said, hey, listen, we're putting a 12-month moratorium on every single tariff there is. We're pulling out of the war in Iran. The rates would drop immediately. So instead of doing that, we've decided, no, let's just throw a bunch of money at it. I think that's just kind of where we are today. You're right. You're right. So this is the first analogy that popped in my head. We're doing surgery on a patient and we keep putting band-aids on it to stop the bleeding. No, no, no, no. Just stop doing the surgery. That'll stop the bleeding. Right. Quit making incisions. Right. And I think neither president this decade has really, like, said, like, I'm going to tackle inflation head on. There, like, there are things that,

and you can't completely fix inflation, but there's certainly things you can do. I also think, I think that people pay way too much attention to long-term bond rates. Like, if we just decided to snap our fingers and we did away with 20 and 30-year treasuries, would the world really change that much? Would it really change financial markets if we said, we don't need 30-year treasuries anymore? We don't need 20-year treasuries. I think this is.

But they exist. That argument is sort of neither here and I don't buy that. They count for like 10% of all borrowing. It's a small-off. But for the signaling, I think it's super important. Here's to me the bigger, the bigger, bigger issue. I think this is normal. I don't think there's anything wrong with the 30-year treasury to be at 5.2%.

No, where nominal growth is and where inflation is, this is, you're right, this is the normal, this is where rates should be. Yeah, what are they trying to fix? Now, I understand that it's the highest it's been since 2007. I get that. I understand why there's a little bit of heartburn and indigestion, upset stomach diarrhea, about what's happening, but it's normal. Yes. You're right. I know mortgage rates are worried, but where inflation is, so the point is,

you're right, you're treating the, treat the patient, not just these weird symptoms. So Stanley Drucker-Miller wrote an op-ed for the Wall Street Journal last night. He said, Let the bond market speak. He said... Wait, for those who don't know, Stanley Drucker Miller is the greatest macro trader of all time. He's got the best long-term track record of any investor ever. He's an influential thinker, speaker, investor. So when he writes something in the Walsh Journal, people pay attention. The funny thing is he probably, you're right, he's probably the best macro trader of all time. And his macro calls the last 15 years have been like an abomination. He's, he's been wrong

with everything. This one, I took pieces of this that he's been right on and wrong on. Hold on credit to him. I saw him speak some out recently. And he's very, he's got a great sense of humor. He's very self-aware about it. He's very self-aware. He was asked a question and he basically said, Why are you asking me? I haven't got anything right in a long time. Yes, except for his trades probably. He said, I've spent five decades trading on a simple premise. Markets aggregate information to no committee possesses, and prices are how that information reaches decision makers.

I wholeheartedly agree with that. You're right. So I thought about this in context where you and Josh talking to Michael Santilley last week. And you and Josh kind of made the case, along with what Trump has been saying, that, listen, we are the biggest economy in the world. we should, and we are, we have the best markets, we have the biggest best companies, we should have the lowest borrowing rates of anyone. And you, you and Josh kind of made that case to Santho. And I felt like he kind of, he kind of said, no, I don't think so. And I think the reason he said that is because of this, like, you get information from the bond markets, right? Like, yeah, if the government,

my point about long-term rates not mattering, the government, if they wanted to, could say, okay, fine, we're going to have the Fed set rates at 0.5 percent, and we're just going to borrow using short-term paper. That's all, so if we want to effectively lower our borrowing rate, we could do it very easily. We could say, we're not going to tap the bond market anymore. We're just going to, but that has ramifications to it. And you're right. So even if you took all those bonds away, we don't have those bonds. Like, it would, it would still have a meaning because the bond market sends signals about what inflation is doing and what rates are doing and what growth is doing. And the bond market is not always right, of course. The bond market has been all over the place. But this is a thing.

Now, he's saying the long-term treasury yield is the most important price in the world. I don't really believe that. But he's saying it is also the only fiscal disciplinary in the U.S. has left. Neither party will run an entitlement reform. He's saying the bond market is saying that there is a storm coming. And this is the part where I diverge from then and I don't agree with them. But I do agree that, yes, the bond market gives you signals, and you need that because that is telling you what's going on in the markets. and what the market is expecting going forward.

Well, think about what the bond market did to force the administration's hand in March and April. Yeah, the tariffs. Oh, I'm sorry. I'm sorry. My bad. I got that wrong. During the tariff tantrum.

Yeah, it was when the bond market freaked out. Right. Yeah, so they freaked out. By the way, you said Druck and Miller wrote this. Apparently, AI wrote this. There was a lot of people who were extraordinarily upset that the Wall Street Journal allowed somebody to publish what was so clearly written by AI.

Now, I don't know if it was or if it wasn't or if parts of it were, parts of it weren't. I missed this discourse. I did not realize this. Okay. So Joey Palatano quote tweeted, and he was not alone. I mean, this was, he said, sorry, but this is the most obviously AI generated op-ed ever. It has, quote, it's not X, it's Y construction, both the first two paragraphs. Pan Graham has it as 100% AI.

apparently that's a program that identifies if something's real or not. One of the most prominent finance billionaire submitted this, the Wall Street Journal just ran it. Are there no standards anymore? So, Druck and Miller wrote, Ben, I made a meme.

Look at this meme on me. For those of you who are listening to not watching, it's the Steve Bishemi, How Do You Do Fellow Kids? And Druck wrote, If the 30-year must trade at 5.5% to clear, that isn't a crisis. It is an invoice.

Okay, you're right. That is totally AI. Oh my gosh, you're right. All right. So I have to be honest. So he put into Claude, write me an op-head about me worrying about the in Stanley Druckenosa's voice, essentially. Allegedly. I don't care.

I understand why journalists might be very upset about this. This is their profession. Hey, busy guy. He's a busy guy. I get it. I don't give a shit. I really don't. I understand why some people do.

Not me. Don't care. Okay. I do kind of care. And I got more on this later about why I think people writing and reading. But you're right. He's probably a busy guy. He probably said, you know, he probably wrote some bullet points and he said,

turn this into an op-ed. Write this in Stanley Drucker-Miller's voice. Oh, I'm like, okay. So, all right, that's pretty funny. So you mentioned, like, this being normal. I took the 30-year treasury rate and subtracted the, did the spread between the effective Fed funds rate, right? What the short-term and long-term?

What the difference is? It's about 1.7% now. And this data in Y charts goes back to the late 1970s. If you looked at this chart, you wouldn't say like, oh my gosh, this is going crazy. It looks pretty normal. It's probably basically average or median. The spread between long-term rates and short-term rates are pretty normal right now. They were actually abnormal through much of the 2020s in 2010.

And I do think one of the big reasons we're seeing a freak out over rates where they are is just because it's been so long since we've had normal rates. Rates have been abnormal for 15 plus years since a great financial crisis. So people aren't used to them being where they are where they were for most of history. I do think it is a big market story, though. Like, I'm not poo-pooing this. Obviously, but if a White House and Treasury are getting involved, of course it's a big story. Yeah.

I think the direction of rates, not just the level matters, as I've said, a million different times. And I also think what the administration is doing is super noteworthy. Of course, because they're obviously worried too. Yeah. They wouldn't be doing this if they weren't worried. It is funny. The last week, you talked about the fact that if you think the market is wrong, you're probably wrong.

They're Besson is saying the market is wrong. That's a very bold stance to take. And usually you're the wrong one. Exhibit A chart of the week. I want to talk about a few things about the debt crisis everyone's freaking out about and why I think it is more of a political crisis than an actual financial crisis. All right. I'm listening.

Okay. So chart kid and Matt at team at Exhibit A. They show record U.S. debt at interest costs are in line with history. So they show U.S. federal interest payments as a percent of total federal spending. It's kind of surprising. It's right at the long-term average of about 15%. Can I just say one thing? Yep.

I think this is not the worry. I think the worry is the spending. So you're normalizing for what people think is a very abnormal number. If you compare the spending on interest rates, the interest spending compared to the size of the economy, it's much more. Uh-oh. So there are a lot of people who get really angry about this stuff. And I think not that people are rooting for there to be a crisis, but they want to be proven right on this. So I put this on Twitter, and I knew it was going to stir up a little bit, but I couldn't believe how angry people got.

So here's my tweet. My most contrarian take right now is that I'm not worried about a U.S. that I'm not worried about a U.S. government debt crisis. We have the biggest economy, the global reserve currency, the most rich people, and there's no substitute for treasuries. We'll keep spending and people will complain, but no crisis will occur. that's my baseline assumption okay but here's my worry my worry is there are enough

people who are worried about this being a coming a crisis that it will be a political thing and so politicians will overreact and they'll cut social security or they'll cut Medicare or they'll do something to try to get ahead of this and I think that's the politics of this

that's where the true panic and crisis could come from not like this turning into a financial crisis Is that fair? I think it could be a policy error as a result of people worrying about a crisis that's coming. Well, you know you were kicking the hornets nest with this one, right? Of course, but I truly believe this is my baseline assumption that there's going to be no government debt crisis. Let me give you some more evidence.

Let me give you some more evidence. Before you give the evidence, just two things here. Number one, the U.S. reserve currency is what the world runs on. And it is the most sacred thing that we and the globe has. It's extremely important. So I think it's worth being concerned, even if it's a small chance. But what's the substitute? Okay.

So that's the second point. Whenever people get worried about the strength of the dollar and the dollar is weakening, there has to be an alternative. The money on corporate, federal individual balance sheets has to go. somewhere. And if it's not going into U.S. government bonds because people are concerned about our fiscal irresponsibility, where's it going? Now, we'll talk about this later in the show. Bitcoin, gold, silver. It went there last week. But there has to be a secondary place for it to go. And it's not going to the euro. And obviously, it's not going to the yuan. And obviously it's not

going to the corona or any of these other currencies. We're fine for now. But the reason people started crypto in the first place is they wanted to be, they thought the dollar was going to crash and they wanted to be anti-system. The biggest leap forward in crypto technology is stablecoins. What do stablecoins allow you to do? Access to the U.S. dollar. The people who tried to buck the system couldn't get away from the dollar. Okay?

So Morgan Housel had a great tweet for me in response. He said there's been such a strong consumer deleveraging that total debt, government plus private as a share of GDP is flat over the last 20 years. So here's the tradeoff we made. The government took on a massive amount of debt. found the great financial crisis and the COVID pandemic. That allowed households to repair their balance sheets. Great handoff.

As far as I'm concerned, that's a great tradeoff. I would, would you rather have household balance sheets like as a mess, but the government is pristine and they're running a surplus? No. No, of course not. Right. This has been a good for the situation we were in, the great financial crisis, the biggest financial crisis since the Great Depression,

and then the pandemic, which we turned the economy off, Yes, we had to take on a bunch of debt And was it all useful? Of course not. But it allowed households to repair their balance sheet In a way that probably would have been People would have never believed you Considering what happened. Okay, so I think that's a fair tradeoff.

Colin Roche wrote about this. He's also on my team, which makes me feel a little better. I feel like I've learned more from calling anyone As far as macro goes, the way that he explains it. He asks, is it time to panic about government bonds? and his point, he put this chart in here that shows U.S. government public debt, that's government debt, that has a percentage of total financial assets,

which is interesting. Because, again, a treasury is an asset for someone. Right? It's not just debt. Someone's debt is another person's asset. He said there are at the upper end of the range, but still at just 9%, it was 5.5% in 2005. He's basically saying in the last 15 years

is pretty much in the range. So, like, he said if you're worried about a debt crisis in 2010, and you're still worried about that debt crisis today, you'll probably have to keep waiting for that crisis. And I am in agreement here. Like, the crisis is more in political sphere than it is in like this is like a thing we have to worry about now because it's financial. One minor asterisk. And I agree with Colin and I agree with you.

Charlie Munger said, the liabilities are always good. It's the assets you have to worry about. Fair. The asset levels are very high right now. So this, of course. Yes, that helps. Housing prices have gone up a lot. Stock prices have gone up a lot. You're right. So if there's a bear market and assets prices come in 30, 40 percent, this chart is going to look very different, very fast. That's fair. That's fair. But that happens every time.

Speaking of long-term rates not mattering so much, I just think this is an interesting way to think about it. Jesse Livmore says that, take the current outstanding supply at market value of U.S. treasuries with maturity of 10 years or more. It's $4.3 trillion. He says Apple is worth $4.6 trillion. In other words, just one single stock in the U.S. equity market is bigger and heavier in weight in the global portfolio than the entire long-term treasury market. So again, the trade market. But it's not the size of the Treasury. It's not the size of... You're right.

It's a signal. But I think putting it in context like this goes to show you how... You're right. The assets, you have to come down 30 or 40%. That's a big... Like, no one ever thinks about the asset side of the equation. Everyone only looks at liabilities. True.

That's the point. The assets dwarf the liabilities and it's not even close. Mm-hmm. So, bringing us all full circle. If you talk to any hedge fund manager right now, they go on CNBC, any macro tourist on Twitter, what are they going to say? You should own gold in short bonds. Every macro tourist on the planet is saying they hate bonds right now.

I think Dahlia just said that. Yes, of course. Every hedge fund manager is saying this. I'm sure Drucken Miller would say the same thing. And the reasons they give are valid. Spending, we're nothing stopping this train with government spending. We took the smartest man on the planet potentially. Elon Musk and said, hey, try to fix spending.

What did he do? Literally nothing. Oh, yes. He gave it three weeks. He said, eh, never mind. literally nothing is stopping this train. So spending is out of control. It's never going to be rained in. Let's be honest. Inflation is sticky and higher than we've had in a long time. Interest rates are rising. So everyone is saying, I hate bonds, let's short them. I said this in December 2024. I'm not trying to pat myself in the back. I said international stocks are the most hated asset class in the world right now. I think you could make the same case about bonds right now. The bonds for the pundit and hedge fund investor class are the most hated asset in the world right now. Is that fair to say?

Don't know. I suppose you can make the case. Okay. So I pulled this chart from our friends at FM Investments, which congratulations to them. Hell yeah. Just got taken over by T.R.R. Price. Amazing. Yes.

We've got Alex Morrison talk your book a number of times. Very happy for them. So they have this really cool tool where you can put in, because they do treasury ETFs. And they take every treasury from the two year to the 30 year. and they say, what would happen over an estimated 12-month total return on these bonds if rates rose 100 basis points, fell 100 basis points? Rows 200 basis points, fell 200 basis points, okay? So now you're a hedge fund manager.

What do you want? What is the one thing you want that sounds really cool in a book around CNBC? I want an asymmetric risk profile, right? If the gain goes up, it's going to be way bigger than the loss is going to be on the way down, right? I have a caps downside. I have a much bigger upside. These numbers are kind of crazy to me. So it took the 10-year treasury.

If rates were to fall 1% from now, over the next 12 months, you'd get a 12% return. If rates were to rise 1% from here, you'd have a 2% loss over the next 12 months. Love it. Sign me up. I just, I still think that, I don't know what the timeline is because no one can predict the magnitude or the direction of interest rates. At some point, people are going to go, are going to be kicking themselves or not owning bonds or some bonds at these yield levels. I feel like bonds can't hurt you anymore.

Now, that's a bit of a, you know, I don't literally mean that. But if interest rates go up another 1%, which would be a big move at this point, it would be a big, big move, your total return is negative 2%. Who cares? Stocks fall 2% in a day. Right. Even the 30-year treasury, which is the most volatile, if rates rose 1% from here, which would be, that would put them at over 6%. You'd lose 8%. If rates were to fall 1% for 30-year treasuries, you're making over 21%.

percent. Like the risk-reward tradeoff in bonds right now is way skewed to the upside than the downside. All right. So let me ask you this, that's a thought exercise. Under what scenario do rates fall outside of a recession? We have to get inflation reined in. I think rates are structurally higher, which is a great segue to this tweet from Conner Sen. Conner tweeted just thinking about how people spent 15 years saying aging societies would mean low inflation and interest rates. Guilty. There's definitely clips of us in 2020, 2021, saying,

I don't think in 10 years ever gone above 3%. How long we were, Ben. I made the case that we have too much government debt now. There's no way they can allow rates to get as high as they are. It didn't matter. You're right. The bond market was the signal. You're right.

And it is funny because technology is supposed to be deflationary. You could argue all the spending from, okay, how about this? Why will rates fall? AI. The AI spend right now is powering inflation in a lot of ways. Think about it's also it's also powering a lot of bond issuance and there was a structural imbalance of supply and demand, way more demand than supply of bonds in 2010s and that is now going the other direction. So AI gets ahead of itself Mark Zuckerberg finally says all right I'm tapping out we're pulling back the CAPX. Google says we're pulling back in the CAPX. Inflation falls bond yields drop hard in that scenario.

Stocks fall 25%. Yes. And then bonds are a great hedge, right? Yeah. That's the thing. All right. A little feedback on my young person rant from last week. People must have loved that, no?

Well, there was two different groups. Young people and old people. People over 40 were applauding me. Now, I went hard on that for a reason. And a lot of young people basically said, hey, Ben, you sound like a boomer, each shit and die. Fair. Fair. Well, there is nothing

There's nothing worse Than people that are doing well Telling people that are not doing well To toughen up Doesn't land very well I just if a few young people got the message That you play the hand you're dealt That's my point

Your hand sucks sometimes But you can't just spend your whole life Complaining about it being a victim That's all I was trying to say Now how about A bunch of people sent me this This is what I'm talking about from the, and I don't, I think I see young people being softer than older generations.

Every younger generation is softer than the generation that came before them. Of course. Right? When I was in college, I was in a fraternity. And we had a guy who was, he was like the provost of the college or something. He came to give a speech to our fraternity. And he said, I pledged this fraternity. And the guys who, like, brought me in for initiation went through World War II.

He goes, do you realize how hard it was, like what these guys did. us who came back from World War II. People of that generation, anyone below them had to be softer. They had to, of course. So I think it's a sign of progress. Still, University of Michigan drops first semester grades to curb mental health crisis. So they are going to, instead of a letter grade, the first semester transcripts will have a past or no credit because people, they don't want to have, people have a breakdown their first

semester in college. You want to happen to me and my first semester in college? I partied six days a week. it was a worst GPA. I had like a 2.5 GPA. You know what? Did I have a mental health crisis because of it? No, I said, Ben, what are you doing?

So I partied five nights a week in the second semester. I went the other way. I think I got a 1.4 and then I thought, I think my grades dropped in the second semester. I think I got a 1.2. Yeah. Listen. By the way, literally.

I remember, I think on the show, I found my transcript. That's possible. Yeah. 0.0. Anyway, I just thought that was kind of funny. All right, before we get to some stock market stuff, there was an article in the Wall Street Journal. Some take on debt for their weddings.

These brides are making money. As weddings spending rises, brides are borrowing from their celebrity influencer playbook, finding sponsors to pay for invitations, dresses, and bachelorette parties. Let me just read you two things from the article. Number one, weddings are expensive. The average cost was $34,000 last year.

I'm surprised it's not higher than that. Here's a quote from Brianna Severson, the CMO of a wedding planning platform, Zola, which can pay brides up to $150,000 for collaborations. Okay, it's the most effective way of marketing. When a couple announces their engagement, it's like they've set up a giant billboard. The bigger a brides following,

the more lucrative their wedding can be. I get it. I understand. But this is about everything that's wrong with the world today in terms of social media, capitalism, steroids at all costs. If you're turning your wedding into an advertisement, I think we've lost the plot. Okay. I honestly am not trying to be contrary in here.

I don't mind this. Really? You get someone to give you a wedding dress because they want to show off the brand and you What if your invitation is sponsored by, I don't know, brand XYZ? If someone wants to pay for your wedding, I don't hate this at all. I really don't. It's, we're commercializing. Weddings are already commercialized.

Come on. How? It's like this, it's a crazy thing. People spend thousands of dollars in a dress that they wear one day of their life. Did not expect that one from you. Okay. Because weddings are so expensive. Like, people can get sponsors for them.

Like, if my wife said, like, listen. Sure, sure, fine. I'm sympathetic to that. I get it. Weddings are expensive. You can lower the burden a little bit. But we're doing this now? All right.

I just, I don't care. All right. It would be kind of funny if the best man got up and be like, hey, my speech is brought to you by Miller Light tonight. Yeah. It's kind of funny. I don't know. I want to talk about narratives, Ben.

Okay. So very often. especially for talking heads, market commentators are grasping at straws, right, especially on a day-to-day basis. Oh, the Dow is up 30 basis points as X, Y, or Z. L-O-L, right? We laugh at this. It sounds totally ridiculous.

And so I think that there are, it's like two sides of the barbed. On the one end are people that describe and move to everything, as people on TV have to do. And on the other end are people like you who say, Nobody has any idea why the market did what it did. And anyone who's trying to ascribe meaning to this is full of baloney, right? I wouldn't go that far. Okay. So, but oftentimes.

Yeah. So oftentimes the narrative is fitted to the price after it happens. I think I'm somewhere in the middle. Now, I'm more closer to you. Like, I think a lot of, a lot of this is just, let's say 90% of it is noise. but oftentimes things happen, and it's very obvious why it happened. So why do I bring this up? Bitcoin gained 20% last week, seemingly out of nowhere.

Crypto went nuts, yeah. Why did it do that? It is obviously responding to the dollar deficit interest rate stuff. Yeah, it was after Scott Besson made all those comments. Of course it is. You saw, you have this chart from Todd's own. You saw spot crypto ETF flows go wild after having been totally apathetic for, for months and months and months.

So you might say to yourself, well, how come Bitcoin didn't care about the 30 year at 5% but at 5.2% it does? Or how come it didn't care about government debt at 39 trillion, but $40 trillion dollars is the magic number? And how come the last time Bitcoin, it doesn't matter. So sometimes the stories that the market believes are the only thing that matters. And it's not to say that just because asset class X is responding to Y today, that this means that going forward, it's going to work.

And I think this is the problem where this is what trips who pull up always is they're looking at current relationships and current market moves and extrapolating this to the next time something like this happens. But you had gold up 5% last week. You had silver up 7%. Clearly, right now, the anti-dollar debasement trade is a thing. And it's also, this is also the John Maynard Keynes Beauty Contest. You're not voting on who you think the prettiest is. You're voting on who you think everyone else will think the prettiest is. And so what people did, I'm sure a lot of smart traders go, I don't believe that this is a dollar debasement thing. I don't believe this is a debt crisis, but I know a lot of people will believe it. So I'm jumping

on this trade too, because I know people, this will be a narrative. So the narrative feeds on itself. Yes. And of course, narratives are often wrong or ephemeral or go the other direction. And then people like us say, ha, see? So for example, Michael Antonelli tweeted, I want you to take a look at Visa and MasterCard and remember that at one point, it was thought crypto was going to disrupt them. Then it was thought that AI would disrupt them.

there are absolutely times in the stock market where the collective wisdom makes zero sense. Duh, of course, yes. So I understand why people laugh at efficient market theory and say that prices are always right. But as we spoke about last week, the point is not that prices are right at all times always. It's just that in real time, it is incredibly difficult, dare I say impossible, to consistently say that prices are always right, are always wrong. You don't know when people are going to over or underreact. That's the thing.

You don't know when investors are going to overreact. This is the thing with crypto. We talked a couple weeks ago. The sentiment is dead. This feels like a dead asset class. And it took this to get it to, like, it's, you don't know when people are going to have that collective. All right. Now is it time to do this.

It's funny. Yeah, you're right. VSA and MasterCard both were, so they're both breaking out to all-time highs. All-time highs. So the, what was the Satrini piece? Remember, they both fell 10, 50% on that? Like, that was a great buying opportunity for credit cards. Yeah, and America Express got clobber too.

I think are concerns that white-collar America was in deep, deep trouble. So, yeah, there are definitely times where there are severe market dislocations and very astute people can take advantage of that. I still can't believe that that. Think about it. That piece caused a big market disruption. like a week. Well, it was also, it was also like on the tail end of software getting smoked. And remember the person who wrote it went on odd lots and said, like, I can't believe that this

is taken, I can't believe that this has gotten as big as it has. That that, like, there's been a million thought pieces written on AI. Why did the market decide collectively, we're going to zero in on this one. And this is going to have ramifications for certain stocks and sectors. Yeah, I think because the market was already destroying a lot of the software names. And the narrative was already forming, and he just did an incredible job fictionalizing the narrative. Yes. And the market just took it and ran with it. Yes.

All right. We've been talking all about earnings, and every week now we have a chart from duality research. Great charts, by the way. Talking about like earnings growth can't possibly keep going as high as it has, right? Like the next derivative. You can't keep having 30% growth on top of 30% growth. Like the numbers get too big.

So duality research looked at, okay, what's the forward path projection look like in terms of the year-over-year earnings growth? And it's obviously coming down. So this goes through like 2027, I think, end of 2027. What do you think the market does in this scenario, which is fully reasonable? The earnings can continue to go higher, but the growth rate, it's not sustainable. Yeah. So in this, but here's the thing like you would say, oh, well, the market has to fall.

I don't know. I think this is consensus, not in a bad way. It's like this is baked in, right? Yeah, that's why the multiple has come down. Yeah, I think so, too. I think this is, to me, this is kind of baked into the pie already. Yeah. And so the deviation from this is what matters more.

We're getting into very third order effects here on today's show, right? We're going deep. It's not first order. Second order. All right. So I think one of the fun things that people love to do about market cycles like this is predict how it will end. Right?

And because we have recency bias, we look at the great-financial crisis and the dot-com bubble. And we say, okay, it's got to be one of those. When this thing ends, this boom ends, it's one of those two options. I want to throw my head in the ring on how, like, I think, I'm trying to visualize

how this thing will end when it ends. Go on. The Go-Go Years by John Brooks. Fantastic. Great book. This is one of the bear markets that you look back historically and no one ever talks about.

It was the end of the nifty 50, It was before the 1970s. It was before the 73-74 crash, which was bigger. So no one really gives it its place. And this book does. It gives the up and the down. It's great. Michael Lewis writes the forward for it.

I remember reading this the first time and thinking like, wow, I never thought of it that way. And they talked about in the book that at the time, so this is 1968 to 1970, it was a 36% bare market, which is a lot. It's a decent, but that's average for a recession. A recession. But also, that was like it was called the good. logo years. And there was a lot of high-flying names that got smoked 80%. So this is why I think this would be a very good analogy for what could happen to this stock market. So they say, listen, the Great Depression, the stock market dropped like 90%. How could you possibly compare that to a 36% drop? So they said that

there was a financial consultant who looked at the biggest stocks of the day, like the 30 biggest glamor stocks that people were buying. IBM and Polaroid and Xerox and all these companies that everyone piled into. These were like part of the Nifty 50. And the average decline of these stocks was like 80%. And the 30, the average decline of all 30 stocks in this handmade, I mean, this is not like your D-Gen Dow that you and Josh came up with and Sean, but they said they fell 80%. And so they were saying, and more people had money in the stock market then, and more

more people had money in these names than they had in the Dow back in the day. And so this guy was trying to make the case that this 1968 to 1970 crash at the end of the go-go years was actually worse than the Great Depression because more households were investing in stocks. And I do think that this, this to me, seems like a good way to think about this playing out, where you have kind of a run-of-the-mill bear market, but there's plenty of stocks that fall 60, 70, 80 percent. Doesn't that seem like more plausible than a dot-com bubble blow up where the stock market

falls 75, 80%. Oh yeah. Can I say something? We just saw that in 2021. Right. Do you know that in 2022, the cues fell 35%. And what happened? Facebook was on 70, and video was on 66.

Yeah. The whole art complex, docusign, teladoc, Peloton, those names fell 80 plus percent. 2022 looked exactly like the Gogoi. both at the stock and the index level. Yeah. And could this next whenever be similar? Yeah, listen, I think a financial...

What do I know? Nobody could nail this. I don't think this ends with the financial crisis. Now, I am very interested in the Mark Walter Guggenheim story and the web of chicanery and shenanigans that's happening with the insurance entities. So I put this in here for later. About two months ago, I started listening to Steve Weisman podcast, which I didn't even know you had one, and I came across it for some reason, and it's really good. And he had a guy on there talking about the life insurance industry and how

this is a crisis that's brewing because all these private equity companies now own the life insurers, and they're taking this money from life insurance and putting it in a riskier assets. And I listened to the time, and I thought, that seems like something for like way out in the future, maybe, but I'm trying to think of like, what are the ramifications for now? And I couldn't come up with any. And then you start reading more about this Guggenheim situation and you go, oh my gosh, that this private equity and private credit are the perfect vehicles to do this in because it's a lot of self-reporting. And it does seem like there could be way, way more under the hood than just this guy doing this. You know what the public would love if the government bails out private equity

owned insurance companies? So that would be fun. That would go over all. Yes. But it, so anyway, if you can go back and find that Steve I, I think it was from June, that podcast about how the private equity industry has taken over life insurance. That's something to make yours perk up a little bit. All right. And not surprising news. I mean, I think this is well understood at this point.

Morningstar had a report, these innovative ETFs have been disastrous for investors. The average leveraged and inverse single stock ETF has proved costly as regulators see comment on new table games possibly coming to the ETF casino. I mean, duh, no shit. Do you know on Robert Hood now, you can gamble on what Bitcoin will do over the next 15 minutes? Remember zero date, zero DTE,

options that expired the same day. That was quaint. There was an article in ETAF. The morning star, I'm not surprised at these, that people are having a hard time in them and they're not working for people. Like the losses have been huge,

but the losses in the ETFs themselves are still pretty big, considering we're in a bull market. Now, some of these are inverse, but it said the median single-stock ETF has lost 38%. And the companies have earned over $500 million in management fees because the management fees are higher on these. That part doesn't bother me. I don't begrudge the companies.

I think it's... Yeah, you're right. I don't either. Like, that was cute back in the day. It's 2026. Yeah, you're taking part of these and they're charging you 75 basis points on these because they're using a leverage

and they're resetting these every day, Supply demand. They're supplying your product. Yeah, that's on you. Yeah. There was an article in ETF.com about an ETF called the opportunistic trader ETF. The ticker is WZRD. I had to check this story to make sure this was real. I couldn't believe it when I read it. Because a market wizard, and for those unfamiliar, Jack Schwager has written many, many market wizard books. And the first one, and these are legendary trading books, just fantastic stories about guys that had phenomenal success in the market. And one of them came out with an ETF. I forget his name. Doesn't matter. But it's down 96% in 20206 alone.

The steepest decline of any U.S. listed fund this year. And I'm reading the overview of the Opportunistic Trader ETF on the website. And it says, fund, invests significantly in a combination of put and call options while keeping most of the funds assets in cash or cash equivalence. And I read that and I was just totally baffled. I don't know what that means. I was looking in my bookshelf for Michael Mobison's the success equation. And do you remember his whole, his definition of how How do you tell success for, like, how do you tell someone who's really good at something or really bad? And he said, you can lose on purpose.

Lose on purpose. And he was saying, like, losing on purpose in the market is really, really hard to do. So the fact that this person lost 96% in an ETF in a single year when we're in a bull market is honestly impressive. It's a, you know when, when Bernadis says to Baxter, you ate a whole wheel of cheese? I'm not even mad. That's amazing. Like, how do you do that? And I love Mopison's framing about games of skill and games of chance.

Yeah. And in a game of chance, it's very hard to lose on purpose. Could you lose to the stifemark on purpose? I don't think so. I don't think I could confidently say that I could underperform the market if I was trying to. Think about it if you took the inverse of this fund. How well you would have done. But if you look at the top 10 intraday holdings, it's just, I mean, I don't even know what's happening here.

Anyway, wild stuff. I got to email every once in a while from media people. Ben, we'd like to comment on this story. Most of the time, the story is not something I want to comment on because it's like, I don't know, talk about the war in Iran or whatever, but I got a, I got a request from a reporter in the fashion magazine section of the New York Post. Oh, your GQ subscription is finally paying off. Right? It is. And she asked me, you know, we have this theory that we're working on in the post. We're doing a story that finance people are having a moment. And finance people are now

not hated anymore. They're not the villains, but people like people look at them and they wanted they want to date them, they want to marry them, like are finance people having a moment? Like, why are finance people more popular than ever now? Is that true? And I thought that was interesting, and I thought about it, and I said, okay, I've got some theories for you. Let me throw them out there.

Okay. And I told her, listen, after the 2008 financial crisis, finance people were the villains. Definitely. And for good reason. Now, tech people are the villains, right? They're not the lovable nerds anymore with the hoodie. They're the people that ruined our youth

through social media, and they're going to destroy all the jobs with AI. So tech people are by far the bigger villains than finance people now. And now money is so important to people that they look at finance bros as like, oh, that person actually has their stuff together. They can buy a house. I disagree. No? No.

I think the story was written as a response to Josh Kushner buying the Lakers. I don't think finance bros are having a moment. Okay. Do you? Really? I thought it was a val. I thought it was kind of a valet. And it was looking at it through the lens of,

hey, these people still kind of dress nice. They're more, I told her about my idea about having a FICOScore for a dating site. They like that. I'm just saying, I kind of, I kind of liked it. I kind of like the theory. That finance people are not the villains anymore. I do like that part.

It makes sense to me. Okay. All right, there was OpenAI's recent numbers leaked and in Thriott. as we know is eating their lunch. But, yeah, opening as growth rate seems to have slowed for now. No, I find my, I do find myself feeling like an idiot when like a new version of one of these comes out and they talk about how awesome it is.

And I know I'm not using the highest tiered version, but I really can't tell that much of a difference. But I do find myself using Chad GPT more and more. For a while there, I was going more toward Gemini for stuff. And then I'd go to Claude for other stuff. Claude is still my favorite anthropic for all my finance research-related stuff. Anything work-related, Claude is... 100% Cloud at this point.

I find for any sort of other stuff I'm using ChatTBT just as much, and I'm going back and forth. What are you using chat for? So, for instance, my wife wants to do some new design landscaping stuff for the back of our house. It's better for that. Uploads a picture. It's really good at that. Yeah, you're right. And so, but so Ben Thompson was talking on his podcast a couple weeks ago about how Microsoft

wants to be the middleman layer where they want to be the one where you put a query in and they go find the right LLM for your query. And that to me make, I think that's a good, that would be a good service. Because I think there's sometimes you don't know which one should I use. Because they're, I don't, it's, it's more of a feel thing to me. Like, it feels like I should use this one for this and this one for that. Yeah. I think it would be nice to, you know how sometimes it'll say, do you want response one or

response two? Which one do you prefer? I don't, I was, I think that's chat only. I don't think Claude. It's possible. Okay. Timothy B. Lee tweeted, people say nobody has a positive vision for an AI future.

The problem is that the optimistic version is a little banal. The world looks largely the same as it does now, except that people are richer, we live longer, and we get to skip hassles like driving or doing our taxes. Pretty good. He's basically like, yeah, things are pretty good. Pessimistic visions are more interesting because they envision dramatic stuff happening,

like everyone losing their job or dying, but the world is the way it is now because people mostly like it this way. Most of the big changes you can imagine would be bad for most people. Pretty profound. Yeah. Torson Slock put a chart this week saying

there's no change in the unemployment rate in Philippines or India where they have the biggest call center. You'd think this would be an easy thing to automate immediately with AI, call centers. And there's no change in the unemployment rate. Are call centers like government debt where they're just impossible?

Now, I can't believe that. Well, what if, what if it is, so he, Tim, Tim Lee said, the world is the way it is because people like it this way. What if people just would rather talk to a human being, even if that human being is kind of unhelpful sometimes? No, no, no, no, no, no. Call centers are great. What's terrible are the automated things that don't work.

Fixed that. I love talking to somebody. I booked a vacation. I needed to change the date. I spoke to somebody. They took care of it right away. It was great. You're right.

The automated feature makes it feel like you're being ignored and you get done with it and you go, did anything just happen there or not? I agree. All right. Here's a good one for AI that I was talking about before. And I guess this is a Stanley Druck and Miller thing. So there was this, this is an economist that this research and they showed test scores for people and they showed

your homework score with AI and without AI, right? Right, before AI, after AI. And then they showed the time to complete your homework, right? And people who started using AI, of course, they finished their homework way faster. But their exam scores were way worse. This is why, so this is a great, great chart. Before using AI and while using AI, you completed your homework faster, but your exam scores were way worse. So if you use the shortcuts, and this is why I think in the future, people who still read and who still write on their own, are going to be at a huge advantage.

Yeah, I agree. I agree. All right, on to real estate. Warren Pyes tweeted, housing starts. July single family housing starts broke below 70K. This is the second lowest monthly print in the post-pandemic era. Only November 2020 has been weaker. This continues to be like the national emergency.

The line of demarcation of people that got in before and people that are f***ed is, is, uh. That's the one thing. I heard over and over from the response to my young people rant is it's the housing market, stupid. Yeah, that's it. I mean, that really is it. I don't know what the solution is here. But that's why. Saying we feel bad is not the answer.

I don't know what to do. So that's why buying treasury bonds, like if you want to actually have an impact on people's lives, don't buy long-term treasury bonds. That impacts to no one. Buy back mortgage bonds. Give a one-time 4% mortgage to first-time home, whatever than, like, if you really wanted to help with bringing down the money. the cost of stuff, that would be the way to do it. I know people are not into any more government subsidies these days.

Not a popular idea I'm about to throw out here. But is there nothing we can do for the first time homebuyer that is completely f***ed and on the sidelines? I've thrown out this a day before. First time home buyer, anyone, 3% mortgage rate. Housing activity would pick up really quick. And guess what? People would response to that would be, yeah, well, guess what, dummy housing prices rise.

you still get so much of a better deal, even if housing prices rose 5% or something. It's the monthly payment at this point. Listen, the prices for homes, that's what it is. There was a New York Fed survey of consumer expectations for the average probability of buying a new home, and not surprisingly, this is at the lowest level. I mean, obviously, by far, by far over the last decade.

It was 68% at the peak during the housing mania. Now it's down to 53%. And the lock-in, I know, Our friend Logan, Modashami, always says the lock-in effect is not real. People still move. There's a ton of people who the lock-in effect is totally real. Oh, yeah. And could not afford a similar house or a better house on the current mortgage rates.

That's absolutely a thing. Okay. Speaking of expensive stuff, car prices, Michelle Singletary at the Washington Post wrote a story about buying car for her teenage daughter. And this is really interesting. So she wanted to look at what, what in terms of, how far of your money went in of mileage and age of a car. Pre-2020 versus now. So in 2019, a budget of $10,000 to $15,000 bought a 4.7-year-old vehicle with 58,000 miles on it. That seems reasonable to me. Today,

the exact same dollar amount gets you a car that's almost nine years old with almost 100,000 miles on it. That's kind of, that's brutal, right? That's a doubling. And obviously, if you buy a car that's way older with that many more miles on it, doesn't have the same technology, Like, you're going to be in the shop quite a bit, probably. So this is the part of the economy where young people have my full sympathy. It's tough. So the average price of a three-year-old vehicle is over $32,000. Come on.

15.5% increase from 2021. It's, uh, that's tough. My goodness. Right? Yeah. Okay. Speaking of prices, one more thing. I don't know if this has happened to your kids yet.

my wife handles a lot of the dental visits and orthodontist visits for our kids. Our braces is a racket these days. No. Literally every kid gets braces. When I was growing up, you'd have one kid in your class who got braces and had to wear a headgear and you'd make fun of them all day and call them train track face or whatever. Every kid has braces now. And it starts out, they get them at like six years old and like, hey, we're going to put

an expander in and then we're going to top braces on. My daughter, I didn't realize. My daughter had braces for like a whole year and finally got them off and had. I had to wear retainer. And now she went back and they had to do braces again. Our bra. Okay. Our braces is a racket.

Have you been to Europe? Have you been to Europe? I get it. Listen. I'm four clean, healthy, beautiful smiles. Call me a contrarian. I just think that they're getting parents early when you can't tell where your kids' teeth have developed and they're getting everyone. I think that the sales on these things have to be through the roof.

I think there's people who are getting through. Sign of progress. All right. Sign of progress. Ben. Everyone has braces. I think it's a racket. Masters of the universe.

This is very interesting. This movie, capital B, bombed at the box office. It was the most popular film or show in all of streaming during its first week on Prime video. Yeah, Logan has watched this movie four times. This is why the worst thing to happen to Hollywood was the fact that. that DVD sales went away. It used to be that a movie could do nothing at the box office, but have a life of its own on DVD and make a ton of money. You know what I found? As I was cleaning

out my garage and preparation for my mudroom 2.0, I found my DVD. I had a gigantic CD case. The biggest one possible. You know the giant one? It's like, it's heavy. Oh, yeah. So my DVD collection was my pride and joy back in the day. It was all I had. When I was kicked out of college, I had a home by myself. That's all I had been. Wait, do you have the DVD stand in the corner that went straight up? Hundreds. Every Friday, I would go to Blockbuster. You can get two for 20. Screaming deal. Very proud of my DVD collection. Not throwing it away. I have no use for it. I don't have a DVD player. Do you? Right. No. But back in the day.

I probably saw a handful, too. All right. This is awesome. Cliffhanger is back. Let's go. the reboot starring Lily James and Pierce Brosnan finally has a release date. I had no idea that this is even a thing. Originally set for August 2026, the $100 million survival thriller was show. All right, neon picked it up.

Isn't Pierce Broson a little old for this? You see the bad guy? He's got to be John Lithgow. John Lithgow. I mean, John Voigt, yeah. I obviously showed my son this movie. We went through a Slice Stallone run about a year ago. We watched Cliffhanger and Daylight.

And love day. So that went in theater. Did he see Over the Top? Oh, we didn't watch Over the Top yet. That's a good call. Arm wrestling. So, Ben, somebody emailed us.

Oh, yeah, somebody emailed us. So speaking of the 90s nostalgia, one of our listeners' dads was the founder of East Bay. Yeah. The sneaker book catalog. Now, like all 90s kids, I guess I was on the younger side.

I had no money for this. So I was a very enthusiastic peruser. Yeah, you just look. Right? Like, who had money for sneakers? I guess if you were like a teenager and you had a job or whatever, but I was eight years old back in the day. Anyway, there's a book about that, which I plan to listen to.

And in the same vein, Columbia House is shutting down. How is this still a thing? In the year of 2026. For those of you who don't know what the hell Columbia House was, it's basically East Bay, but for music. It was a magazine, which is a thing. A magazine is papers that were printed, and you would get them, delivered to your doorstep, probably on a monthly basis. And it was all of the new albums that you could buy.

But you'd get the first, when you signed up, you'd get like 10 albums for a really low price. Teaser. And then each month, they would send you something that you had to sign back. You either took the album of the month or you'd buy something, and you had to hit a minimum of spending, I think. It was like Stitch Fix for music. Yes. But if you didn't send this form back every month,

they would just charge you and send you back the CD. So I would always forget to send it back, and then they'd send me a CD I didn't want. I think, correct me if my memory is wrong here. Was it like a sheet of like stamps, kind of? And the cover albums were like on stamps. I don't know. That's sort of ringing.

your bell. Anyway, this got me thinking. My first, my first album, I'm pretty sure was a radio, was a tape cassette. Like 90% positive was a tape cassette of throwing copper. And I googled it, like throwing copper cassette, like is that even a thing? Like, or was it a CD? It was a cassette. And you can buy it on eBay for a hundred bucks. I'm not going to, but still around. I owned it. So you put this on here. So I had to think back to mine. And my first was a cassette tape too. And I'm almost positive my very first cassette tape was MC Hammer. That tracks. Please Hammer.

Please Hammer don't hurt him. That was huge. MC Hammer was, how do you even describe what MC Hammer was? Remember the big pants? Everyone tried to wear the pants like him and it just didn't work. But yeah, I think that was my very first one. Is he so alive? Bobby Brown or Vanilla Ice.

I think he's probably been at some reality shows over the years. All right, story time. Unless you got something else here. Go ahead. I fell hard, let this past week. Like a, you know, like your kids, like my son George all the time, he's got cuts on his elbows and his knees are always cut up and he's got, you know, because he's always falling. I'm like, where did you get that cut?

I don't know. Did you kick a sidewalk? I was going for a jog and I had a new pair of shoes on. So they were pretty, you know, they had a lot of traction. And it was one of those uneven sidewalks. And I went down. It was so fast. And I'm just jogging and I went down immediately.

And I caught myself with my hands. And I think if this would have happened 20 years from now, I probably would have broken something. And I, you know, that road rash you get on your hands, you can still see it kind of. And my wrist has been sore all week. How long were you down for? To my credit, I mean, this was a pretty good like Navy SEAL type of move.

I went down, caught myself in my hands, did a shoulder roll and was up on the grass and pushed myself up and just I let out a huge F bomb. And I saw you all these cars. going by, I probably see me laughing, but I think I saved it pretty good. I did a shoulder roll to kind of get out of there and not, so. I haven't fallen in a long time. There's like that immediate, like, sense of panic that you feel? Yes.

After, I'm, like, looking at myself to make sure. I'm like, did I break something else? I'm okay. All right. All right, recommendations. Devil World ProD II is on Hulu. I tried it. My wife and daughter went to see it in the theater.

Pure nostalgia kick, right? It's all, it's Merrill Streep. Ann Hathaway and Emily Blunt and Stanley Tucci. And I'm sure a lot of people like this movie. To me, it was, I enjoy, I really enjoyed the first one. It was just too much of a nostalgia. Like, it was just all nostalgia. And it was like too much.

I think the movie probably did pretty well. It did very well. Yeah. Okay. To me, it's like, eh, probably didn't need it to happen. Speaking of action movies, I was gone on a trip a week or two ago, and my kids, my son is always looking for new action movies. You're even starting to give me, like, George's got to watch this movie, right?

You're giving them some. So I walked in, and they were watching Speed on Netflix. And I'm like, I've seen it a million. I think I just rewatched it like a year ago. And I'm like, I don't need to watch this. And I got pulled at the last hour or so. I'm like, all right, you know what? And I just sat down and I watched the last hour.

And my God. And I saw that they just did it on the rewatchables too. So, of course, my kids watched Speed 2, which at the time, since Keanu didn't do it, I didn't watch it. And I had a one, remember back in the day, there was no way to get movie, like, maybe there was one movie review. with Siskel and Ebert. But, like, it was all word of mouth.

And I had one friend who went to see it and goes, it sucked, don't go see it. So I didn't see it for like 10 years. Famously sucked. I think it got like a 10 on Bonan Tomatoes. I didn't see it either for the record. I watched it eventually, and I totally forgot about it because it just, you know, Keanu wasn't in.

It felt like an abomination. Willem Defoe was the bad guy. And he could effectively, he had his own AI system that he could control a cruise ship with like a remote control. And maybe instead of doing, like, He'd be like a billionaire now. If he had this technology to totally control a cruise ship and do all these things with computers. Anyway, terrible, terrible movie.

Can't believe Sandy Bullock even did it. So I also rewatched Speed because it was on the rewatchables, my favorite podcast. And it's funny, Ben. I put it on. Kobe got into bed with me and we watched the entire thing. And I haven't seen Speed in a long time. Speed was a phenomenon. Oh, yeah.

Pop Quiz Hot Shot was everywhere. Everyone would say that. It was such a big movie when it came out. I forgot about the elevator scene in the beginning, which is like the first 25 minutes of the movie. Awesome. Amazing. So Kobe watched the entire thing with me.

It's the first grown-up movie he's ever watched. He's very proud. We had a great time. Keanu was very interesting because as amazing as he was in the movie, and he was amazing. his dialogue, the actual, the acting to speaking was comically bad, but the physical stuff that he did was so good. Yeah, I feel like we kind of give him a pass sometimes. And it's rightfully so.

So I want to play this clip for you just to show the young ins how good we had it back in the 90s. This is from, this is Sean Fennacy on the rewatchables talking about. the action movies back in the day. In the late 80s, early 90s, something happens. And it's kind of like this hangover effect from movies like Top Gun, Beverly Hills Cop, like Hollywood figures out a pacing and editing energy.

And then everything that comes in the wake of it is basically incredible for 10 years. Tier 2. Broken Arrow, ConAir, Independence Day, The Long Kiss Goodnight, Clifhanger, true lies, last action hero, last Boy Scout, Demolition Man, Fifth Element, hard target executive decision. I'm sure I've forgotten some here and there,

but that's mostly what I'm thinking. Tier 1, die hard, crimson tide, hunt for a red October, T2, point break, the Matrix, Blade, face off, first mission impossible, lethal weapon, fugitive, heat, under siege, and I think at the top of the heap is speed. Are you fucking kidding me? The best movie decade of all time.

Holy shit. So I got an email that made me laugh. somebody subject line emergency exclamation mark michael and ben if you haven't seen hard target or nowhere to run you haven't even fully van damed yet please step up so i uh i'm slowly making my way through the van dam catalog doesn't he have a mullet in one of those i know i've seen him hard target okay so hard target was john woo's because now i'm being served up nothing but jcvd on instagram john woo's first american made movie so there was a lot of like slow motion ramp was ramp sent me a video of he was watching it of some of this stuff at Hard Target. It's pure comedy. So I have to

rewatch that. But I watched Lionheart. Do you remember that one? Oh, yeah. I like that one. Where he fights in like the parking lots and stuff? Yeah. Horrendous. I mean, put it in the garbage can. None of it made sense. And I probably haven't watched since I was 12. Yeah, it was epic. So I rewatched the nowhere to run trailer. Because I'm like, wait a minute. I feel like I've seen this one. So I watched the trailer and it took me all the way back, Ben, all the way back. There was a guy, I forget his first name. Last name was La Fontaine, who was the voice of God in the trailers. And in nowhere to run, I think he's an escaped convict.

And he somehow gets hooked up with Rosanna Arquette and her kids. And he's saving them from like corrupt cops and in a small town. And the trailer is so hilarious. There's one part of the trailer where Rosanna Arquette is, they're in bed about to consummate the relationship and she's kissing his hairy chest in the trailer, just hilarious stuff. So I was thinking about this last night as I took my boys to see Spider-Man, which, by the way, have you seen it yet? No, my kids went to see it.

They liked it. Okay. They really liked it. I didn't like, didn't care for the first half. It was so, so, so long. It never ended. It never freaking ended. but there was one scene,

I know you don't care, but I'm talking to the audience. There's one scene with Spider-Man, the Punisher and the Hulk that is, mm, quite good.

So the whole movie was a setup for Avengers Doomsday. And here's, let me bring this back to the trailer. There was, so the trailer

for Avengers Doomsday had me pretty worried. Look terrible. Then there was a trailer for the social reckoning. Also looked terrible. So my question to you, Ben, is do trailers matter anymore at all?

Do they tell you anything? Do they foreshadow any sort of accuracy one way or the other about the movie? Because I feel like back in the day, that's all we had. And the trailers were everything. That's true, because Disclosure Day trailer was really, really good

and the movie was not good. I don't know. I love trailers, though, so I can't. It's hard to say. All right. All right. Non-committal answer. Okay.

Lastly. By the way, back to Van Dam. The fact that he was in so many movies is kind of amazing. Remember the last one was like Time Cop where he's like traveling back and forth and time? I love Time Cop. I haven't seen him 30 years. The fact that he did, he probably did eight Hollywood movies is kind of, he way out kicked his cover. He should have done like two movies and be like, all right, you know, we've seen this guy.

He can't act. What a vibe. No, he can't act. All right, I binged tires, season three. Okay, I don't watch you. Freaking awesome. Funny? Just like the second season?

It's just such a great. It's just such a great hang. The episodes are 22 minutes. Really funny. You can fly through the season. You're right. I forgot the season two is out. I'll watch it.

It's great. All right. We did it again, Ben. Stock markets up again. Well, what's the tenure doing? It is a bull market. The tenure is, all right, down pretty good.

Go Bessent. Team Bessent all the way. Now you're a free market guy. Well, I said, I just think he happened to. If he works, I don't know if this works, I don't know that he deserves credit because I think this was a natural point for yields to pull in. He waited because credit to him. He's a head fund guy.

He waited for rates to get to the upper end of their range, which they've come in previously. And he said, now. I know that there are people who understand the mechanisms of the Fed and the Treasury and where all the money comes from. Not me. Where's the money coming from to buy these things? You know what? The mechanics of government debt and QE from the Fed from the Fed from the Fed. Fed or treasury repurchases.

To me, that's like the semiconductor industry. I'm just never going to get it. Right. It's a lot of back and forth stuff to. It works. To yield the money to ourselves. Yeah, you don't need to understand. All right, animal spirits at the compound news.com.

As always, personal emails, personal responses. Thank you for listening. We'll see you next time. Two and five Canadians will hear the words you have cancer. That's why every step and dollar raised matters. On September 19th, join thousands in Toronto for the Princess Margaret Cancer Foundation Walk. Challenge yourself, friends, and family

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