Animal Spirits Podcast - Extreme Cost Cutting (EP.266)

Episode Date: July 20, 2022

On today's show we discuss peaking inflation, confused banks, whys stocks are the best inflation hedge, and much more.   Find complete shownotes on our blogs...  Ben Carlson’s A Wealth of Common Sense  Michael Batnick’s The Irrelevant Investor  Like us on Facebook  And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by our friends at Y Charts. Why Charts put together a little first half review for us. And it's never a good sign when it's called the highlights and low lights of the first half of 2022. Anytime low lights is on there, not great. What are we looking at here, Michael? All right. Two charts that I wanted to highlight. They've got this really nifty screen showing performance since pre-COVID.

They're using February 18th as the start date. And maybe not surprisingly. stocks that have gotten beat up the hardest, all belong to a certain subset of the market. Down 79 and 78% are Carnival and Norwegian. The worst three are actually cruise ships. Yeah, Royals held up better, and not much, down 68%. Then we've got Boeing, you've got wind resorts, you've got the airlines, and then also in that group, which has nothing to do with the pandemic, and we're going to get into this later,

are the streaming services. You've got Warner Brothers Discovery, that's HBO Max, you've got Netflix, you've got Dish, which is not really streaming, but I guess same thing. And then,

well, not the same thing. Then you've got like casinos. Well, it's like one of these things is not like the others because we have casinos, cruise ships,

and airlines. Those ones all make sense. What's not like the others? Streaming service. Yeah, streaming. Because everyone thought they were going to get a big bump

from the, and they did initially, but now not so great. So this other chart here, it shows the market capitalization loss from the peak in the first half of 2022. And it's showing the Phanem stocks. The biggest seven stocks basically lost like $3.1 trillion. The top 10 lost $4.3 trillion.

Top 25 lost $5.6 trillion, which that's more than 60% of the total S&P losses have just come from the top 25 in terms of market cap. Makes sense, biggest stocks. The Fangum are responsible for 34% of total market cap lost. I want to talk about the top stocks today because this is kind of surprising because we've talked in the past about how much a lot of people thought those top stocks were lifting up the market, but it's not doing so anymore. These stocks are underperforming the market. We're going to talk about that today. If you want to check out this report from Y charts, check out our blogs for the show notes. It's the highlights and lowlights. Remember, go to Ycharts.com. Tell them Animal Spirits sent you and get 20% off that initial sign up. 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. Michael Battenick and Ben Carlson work for Ritt Holt's wealth management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions

and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritt Holt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, was 9.1% inflation at the peak? Was that it? We talked about this a little last week.

I said maybe this next one, it came in a little hotter than expected. Was that it? Yes, 40% chance. Yes, I do. I do. 59% chance. So Bank of America has this chart that's showing like war inflation has beside it. So this is oil, natural gas, and wheat.

You can see it totally rolling over. And it's basically round-tripped from the war, that big spike in March. And I seem to lab said, wheat is now trading below where it was. when the Ukraine war started, which is kind of crazy. This is from Matthew Klein, basically saying wage growth is finally slowing and U.S. government spending is way lower. I think it's, he said, relative to the size of the U.S. economy, the federal deficit is smaller than any point since 2007 and before that since 2001. His sort of money shot here at the end is the tricky part is keeping cool in the face of unpleasant news about the recent past. Basically, there's a lot

of people freaking out about that 9.1% number. But in the last like three or four weeks, you've seen commodities crash and wages come in. The Wall Street Journal had a piece about how inflation is outpaced wage growth and now it's cutting into spending, but you can see wage growth has slowed. And this, to me, seems like I guess this would be the time you really worry. Like if in the next couple months inflation doesn't come in, then you really have to worry because gas prices are falling, commodities are falling, wages are slowing. I guess kind of what else is there? But this would be the time where if it didn't come in, then you'd have to be really, really worried, correct? Right. The Wall Street Journal has this thing. When taking inflation into account,

there hasn't been a single month with a year over your earnings growth since March 2021, meaning on a real basis. Spending rolls over the past year, but like wages, it was outpaced by inflation. Americans are spending less because of higher prices, adjust for inflation, actually consuming less. Look at this chart here on spending on food. They put grocery stores and bars and restaurants together. Look at that chart for bars and restaurants, how much it spiked. People really wanted to get back out. It is crazy how quickly we adjust to spending. I got a breakfast barrito the other day for $8. and I thought, damn, what a steal. It is true.

You get used to it, which is what the companies want probably, right? 445 on gas. Somebody's getting ripped off. It's not me. All right. There's a chart that Liz Ann Shanders tweeted. It's the CPI year over year of utility costs, gasoline, food at home, and electricity. basically all of the essentials, up 30% year over year, by far the highest reading ever.

And I know we're beating this dead horse, but this is why all of the consumer surveys are in the toilet. But I guess this would, if you're really looking for a silver lining, eventually even if this stuff is higher on a year over your basis, it can't go up as much. It would make sense that eventually we'll get disinflation where it can't just keep arising. rising. Well, let's also talk about fine, but I don't take that much comfort in the disinflation story, because if we assume that 9.1% was the peak, so what's the good news? That next month it'll be 8.6. And the month after that, it'll be 8. I don't know if this is comfort. This is from our friend Colin Roche, who is a pretty sharp guy on the economy from pragmatic capitalism. So he says the risk of deflation is higher the risk of prolonged inflation,

basically saying this is not the 70s. He's saying the COVID-related shutdowns are ending or least moderating. A war in Taiwan looks like an extreme outlier risk. He's saying that's a risk of higher inflation staying here. Supply chains are improving. Demand is slowing across the economy, especially as rate hikes cool, the real estate market. Fiscal headwinds continue well in the 2023. Basically, the government isn't spending money anymore. He says his baseline is that disinflation is what's going to happen, but deflation is a higher risk than like the 1970s. And I tend to agree. Did Kathy Wood write this? But here's the thing. I think deflation as opposed to higher than average inflation is a worse outcome. Guess what deflation means? A recession and people losing

jobs. I think it's kind of like careful what you wish for. If we did get deflation and people said, oh, prices are finally coming down, I don't think that's a good thing. I think that's a bad thing. That's in terms of like too bad extremes. Yeah, I don't, I mean, is anybody really seriously worried about deflation? Come on. Cullen is. Just no, he's not. Okay. He says that the rising risk of deflation is more likely than a prolonged high inflation. I don't know. I don't think that he's calling for deflation. True. But don't you think that there's a lot of people calling for prolonged inflation?

And barely anyone besides him and Kathy would are calling for deflation. No, he's not calling for deflation. All right. I wanted to give a pat on the back to Jeremy Siegel. I wrote a blog post in June of 2020. This is way before inflation had ticked up. And he was actually on Barry's Masters and Business podcast. And I pulled a quote from him.

He said, with all the liquidity in the economy, I think moderate inflation. he said like up to 5%. So he was a little up, but he said the price level overall is going to go up 15% over. He was saying like 18 to 24 months. And he said, if we have 15% inflation, you wipe out $3 trillion of government debt. And he said, that's how you pay for it. Inflation is a way to tax people. It's a tax on bondholders. Obviously, he was a little low calling for 5% inflation. It way overshot that. But do you think that in some ways the government is okay that we inflated away some of that debt? It's bad for bond holders, but it's good for bond issuers, no? Yeah, I'm not trying to say, hey, inflation is great. But in the past, this is how we've gotten out of government debt. We've kind of inflated it away. You don't pay it off. After World War II, inflation went to 19 percent, and they inflated a lot of it away

because you're paying back dollars that are now worth less over time. Is the FOMC meeting this week? I don't know. I don't have it on my Google calendar. All right, well, it sounds like we're getting 75 basis points. How do you think this actually works? So we've spoken about how Nick T is the woge of the Fed. Who's the leaker?

How does he actually get this information? Is it a text message? That's true. Because the people that give- Is it Snapchat? The people that give Woge all the information in the NBA, it's like their agents? Like, does Powell have an agent? Does he work with Drew Rosenhaus?

Who are Nick T's sources? That's a good question. I don't know who's the leaker. But it is a little crazy how I talked a couple weeks ago how every day feels like game seven in the market. Like, okay, this is it. Now we're around. like, oh, no, this is it. We're going down again. It does feel like just hanging on every word of the

Fed is kind of crazy how the market, if they think it's going to be 100 basis points, the market will fall. No, now it's going to be 75 and the market will rise. Well, what's interesting is the news has continued to worsen. But as you've probably noticed, the market stopped going down. And in fact, it's going up. So who knows whether this is the market looking past this, whether this is simply stocks bouncing off oversold levels. What's the market? What's your thing, Ben? Let's hear it. So you said it keeps getting worse. Are there any risks right now that people don't know about? The risks are all clear as day. We know high inflation is a risk. We know the Fed is raising rates. Like we know the COVID stuff. We know supply chain

stuff. We know China stuff. Every risk is on the table. So isn't the market supposed to price stuff in? And it is. I guess the risk is. And Sam Rowe put this out today. I think it's a Bank of America a fund manager survey. The biggest risk that they're citing is a policy error for the first time since I think May 2018 was the last time. So maybe this is the risk. Everybody is hyper aware. The manager surveys, cash levels, everybody is not just saying they're bearish, but they're positioned for it. So the risk would be that the Fed doesn't reverse. A lot of people think the Fed's going to raise and then reverse. The fear would be the Fed just keeps going. So what if this upcoming hike is the straw that breaks the camel's back? But everyone already knows the hike's coming. That's what

I'm saying. Yeah, I have mixed feelings on what's priced in. I think that we only know what's priced in after the fact. Because what if earnings this go around are actually not as bad as we think it is? Because all of the stuff has not flowed through to earnings and earnings are okay. But then in Q3, so we get a balance into the fall. And then Q3 is when the earnings slow down really shows up in earnest, which is a phrase that I kind of like. Not really sure what it means. It's just something that's an add on. We talked about it was like one of the worst first halves of the year ever. Over the last year, the S&P is down 11%. I think given everything that's happened, it's almost kind of hard to believe the market's not down more. That's a good point.

I mean, I know there's other stuff. There's stocks and then there's small cabs. I mean, I know we have to talk about the S&P 500, but I feel like saying that even though it's true, sort of hides the actual carnage. And there's been some massive carnage. Let's not sugarcoat it. This blew my face. The average car payment. The average new monthly carbon payment is $700. That sounds like a lot of money. People need to start driving sedans. I'm telling you, everyone needs to drive a Honda, a Corr, or a Toyota Camry and stop buying trucks and SUVs. Also, not to brag, you know what I pay for my Jeep Grand Cherokee? What's that? 550. I feel pretty good about that. If anybody's looking to take a lease off my hands for $6.95, hit me up. All right. My explorer is probably a little

less than that. The, I'm sorry, an average monthly payment for a used car is more than my Jeep grand chariot, $5.55. How are people paying for this? I keep asking, why are the car lot still empty? And people said it's still semiconductors. I know that. I've read all the stories and I've heard all the podcast about it. I just cannot believe the semiconductor stuff is lasting this long. Semi, what do you want me to say? Semi conductors? Okay, sorry. But the fact that it's lasted this long, Obviously, automobile, that's like one of the biggest industries we have. I can't believe that they haven't figured out something to fix that. Last year or two years ago, I got my Jeep in 2020, which by the way, I guess I'm buying it now

because my lease comes out, my lease is outending next September or August. So I don't have any confidence that things are going to be better at that point in time. I have no problem buying my Jeep. I have only 12,000 miles after two years. I'm a light driver with this car. Speaking of it ending, my jet ski, updated on my jet ski. updated my jet ski. So when did I buy my jet ski? March, April maybe. They said, they originally said July. It said July. Sheesh. All right. July. I guess it should lie. Wait, I thought you already had it.

No, no, no. The one that I bought, not the one that I transferred across the country. Okay. So the one that you got stuck in the high tide was a different jet ski. That's the one that came from Oregon. Yeah, that's the one from last year. Okay. The new one that I bought, I called back. they said September I said you know what the whole summer I'm out I don't want it anymore

they're like sir let me just explain to what's going on they go so this is a C do she said we've never been in a position like this where we have no clarity

they're not giving us guidance we just got four machines that have missing parts like what do you mean missing parts no GPS no this no that I'm not a parts guy I don't know what parts they are but they're trying to

get info from the factory on when they can expect the parts, no clarity. So she said, you could leave if you want, but then you won't have a jet ski for next year because it's not getting better. And I was like, all right, no, no, no. I'll take it. I'll take it. So that's a situation. Yeah, not much. A couple hundred bucks. Okay. That does stink. You have to miss the whole summer, though. Well, so now it stinks because now I'm just going to be paying for a year without using it. Yeah, that's tough. So now at this point, I would delay the reception a bit more. Try to keep pushing it back. Yeah, yeah.

I say, yeah, you know what? How about October? Yeah. Give it to me in March. All right. This is from Bespoke, shifting back to markets. Prior to the current period, there wasn't a similar flattening of the three-month 10-year curve in a four-week span since the financial crisis.

These types of moves and yield curves don't happen often. So another thing that we keep talking about, aside from market volatility, interest rate volatility, which bleeds into real world volatility is not good because interest rates are the lifeblood of the economy. It's the cost of capital. And companies need to plan for the future. They can't even plan for two weeks out. How about this? You're talking about policy era from the Fed. Maybe the biggest problem the Fed right now is that they have the bond market so confused. We're seeing these massive swings interest rates from the bond market. I'm almost surprised the Fed hasn't tried to have more sort of yield curve control. Maybe this is what they want, but the fact that it's moving around so much,

so fast, you're right. That to me doesn't seem like it's something that is good for this financial system. That seems destabilizing to me. This is from the Wall Street Journal talked about how investors have really been as pessimistic. They interviewed a guy, it's as risky as it's been in the last 11 years that I've been doing this. This market could still be in front of their street to drop. Average investor steadily pared back their stock exposure this year and dropped equity allocations. One of the lowest levels since the start of the pandemic, according to a survey, so I take it for what it's worth of RAs. Getting back to my point that everyone kind of knows the risks. The pessimism is here. I'm not saying like that means, okay, Ernest goes to jail.

Okay. I do remember those movies. What is his name? Jim Varney? Oh, that was pretty bad. Rest and peace. So, Duncan typed to us. What did Duncan say? Oh. Yeah, he senses a pick. Ernest was a great character. Although Ernest scared stupid, that's when they jumped the shark. Here's the thing, though. If Ernest was around today, he'd be like Guy Fierry. Initially, everyone would hate him. And then everyone would ironically love him. And then everyone would really love him. He'd be the guy for a year he of today. Ernest goes to jail is unironically one of my favorite childhood movies. I'm sure that has not aged well. It's probably completely unwatchable. Okay. So I wrote a while ago, I remember after we had the huge rebound from the pandemic,

a lot of people were calling for a crash. And I said, what would it take to have a crash? Let's do a thought experiment here. And I said basically because these huge stocks, huge tech stocks make up so much of the market, they would almost have to crash to crash the stock market. That was my theory. Happened. Okay, so I took the top 10 stocks as of September 2021. So it's Apple Microsoft by market cap. Yeah, top 10 by market cap. Apple, Microsoft, Google, Amazon, Facebook, Tesla, Berkshire Hathaway, Nvidia, Visa and JPMorgan. As of September 2021, those are the top 10 stocks. The S&P right now is 20% off of ties-ish. The only ones that are outperforming it are Apple and Visa. Apple's down

19 and change and Visa's down 17 and change. All of the other stocks are down more than that. Facebook's down 56%, Tesla's down more than 40%. Even Berkshire Hathaway is down 23% now. Interesting. Invidia got chopped in half. J.P. Morgan fell 35%. The weighted average top 10 is down 34% from all-time highs. S&P's down 20.

If you would have told me these stocks are all down that much, I would have never said the S&P is only down 20. This surprises me. What are the energy sector going from 1% to 5% due to the market? There's no way it can be all energy. I think healthcare maybe helps a little bit too. Health care's done very well. And consumer staples. I did a blog post about this couple months ago.

Remember, it was like the boring names, United Health, things like that, that are hundreds of billions of dollars in market cap that nobody really talks about. It's the DAV stocks. I think one of the great things about owning index funds, and I'm an index fund proponent. So look at this thing. Unapologetically. Unapologiat. Wisdomtree has this dividend monitor they put out.

I can remember who sent us this. It's pretty cool. But they show the top 15 dividend payers historically. These are global stocks. You can see how much it changed. There's tons of turnover. In 2006, it was General Electric. their dividend I think is basically nil now. Look at all the change over time. Apple wasn't even on the

original list. Now they're the third biggest payer. Okay. I would never guess 2022. You've got two of my personal favorites, Ben. I don't know if you remember back to my days of pitching stocks to that guy at Natixis. What did I pitch? What was it? Oh, the Brazilian stock, right? Valet. That's the stock that I called Vail and he goes like this to me, valet. And I said, I'm not getting this job. I would have said Vail too. But anyway, just. What's number one? What's number one? A mining company. Yeah. That is surprising. But just the sheer turnover here of the top stocks, that's why indexing is so hard to beat because you always have the winners. Look at this one. This is also from Wism Tree. Well, hold on. Before you get to that, before you get to that,

I just, I want us to stay with this for just one more second. In the top three, you have BHP number one, Valle number eight and Rio Tinto number 10. That's insane because these stocks were in the absolute toilet, basically since I pitched them for much of the last decade. What was it? You were pitching them because Olympic gold medals? Listen, I had a thesis. All right.

Here's another good one. Since 1957, dividends have grown at an average rate of 5.7% per year, more than 2% above the rate of inflation. Then they break it down into different inflation regimes. From 1970 to 1989, inflation ran at 6.2%. What's the deal with per annum? That's the Winnie the Pooh thing, per year per annum. You say per annum if you're a girl person.

I think you have to have an accent. If you don't have an accent, you can't say per annum. But dividends grew 6.5% when inflation grew 6. I don't think people realize that over the short term, the stock market may not be a great inflation hedge. Over the long term, it remains the best inflation hedge there is. This is a good chart. I like how Siegel calls them super tips.

What do you mean? Oh, because they stay. Oh, I never heard that before. That's pretty good. This is the least amount of real estate we've had in the dock in a while. What do you got here? Oh, that's a good amount of news. I don't know.

We're just maybe real estate fatigue. Well, I feel like everything that's happening is slowly happening. It's all going in the same direction now. Price cuts are coming in, inventory is growing, and it's slowly but truly getting back to normal. Although, my neighbor apparently has not gotten the memo. Okay. There's a snowbird across the street from me. And they listed their house.

So let me paint the picture. This house was probably built in the 1950s. It's one story. It's, I'm going to guess, 1,400 square feet, three bedrooms, one and a half baths, standard plot size. It's a small house. Can I guess the price? Yes, let me just say one more thing, because this is important. You cannot build a second level unless you lift the house, which costs six figures to do,

because we're in a flood zone. It's not really a house that you would renovate, and it's a complete knockdown. So the size that, okay. Hard stop. It's a knockdown. All right, what do you think he's asking for? 900? It's not less ludicrous, but 725.

Okay, sorry. I thought you were pumping it up. Okay. Still, a lot of money for a 1400 square foot house. I mean, this is, if I had to put my hat on, which hat? Who are those people that come and take pictures of your house? Inspectors? Not inspectors.

Appraisers. Yeah. If I had to put my appraisal hat on, I'm going to say $5.15. By the way. I don't want to offend anyone, but I've had some awful appraisers in my day from home equity line of credits to houses. Literally, the only thing they do is take two houses that have sold recently that are kind of like yours, then do a weighted average of them. I don't know why they have to come take pictures of my house if that's all they're going to do. Because that's literally all they do if they do appraisal.

Am I wrong here? You're not wrong. Let me ask you a question. I was thinking about this. You know when you're in the search for a house, you're not bidding against yourself, but in ways you are, because you don't know what the other offers are. So you want to go high enough such that you could sort of go back and forth and maybe be in the hunt, but you don't want to go too high that you win the house, but you lose because you overpaid like an idiot. Why aren't

offers on houses more available to buyers? Wouldn't that be nice? I feel like sellers have an unfair advantage. A live auction. Yeah. Also, if you really tried to lowball someone, you don't want to like make them angry and say, all right, screw this person, I'm out. I'm not listening to any more offers from them. But I'm guessing there's not much low-balling going on. Maybe it's starting a little bit, but actually, now it wouldn't be a bad time to start slowly low-balling some houses. If you're not really in the market. I should offer my neighbor 375 just to see what he says. Yeah, plant that flag. It's on the table if you ever want it. Okay, so anyway, so zero hedge has a chart. In the last quarter, households withdrew

$82 billion in equity from their homes the most in 15 years. That's a lot of money being put out. What do you think this money's going? I don't know. Disney. I was going to say vacations. People are still doing vacations. I think these numbers are not going to slow, I would imagine. People are going to see how much money they have in their house and realize like, why am I not doing something with this? No, I think they're going to slow. I think interest rates are going to slow them down. If they would have taken money, they would have done anybody. We talked, you did a cash out refinance and you locked in your rate basically and had the money. I did a home equity line of credit. There's pros and cons to each. My home equity of the line of credit, I think it was

3% when I took it out in summer 2020. It's now four and a half percent. So, rates are going up on home. So you're right. Maybe that slows it a little bit, but I don't know. If you're able to pull like 50 or 100 grand out of your house and you're paying 5% against it, you don't think people will take that deal. Sorry, say that one more time. You don't think people will start taking 50 to 100K out of their house with all the equity they have, even if they're paying 5%. You mean if we do see recession? Even if just inflation is high. So people say, all right, my wages aren't keeping up. I need to keep spending money. I'm taking money out of my house. My house is up 40% in the last three years for just luck, basically. I'm going to take some of that

out and do something with it. Could be. All right. Mark Rubenstein, whose subsec I've subscribed to. By the way, I am piling up the substaff subscriptions. I'm just piling them up. How many? How many? Doesn't? No, no, no, no. No. Probably sucks. In this economy? Yeah, come on. I probably got, well, between the free ones and the paid ones, I probably have, 10 or 12 subscriptions. I pay for Mark Rubinstein. I pay for the science of hitting. The science of hitting is Alex Morris.

He's coming on T-Caff in a couple of weeks. Matthew Klein. Eric Newcomer. By the way, you know what T-Caf is called when I'm on the show? D-Cath. Hey. Who else? I don't know.

In any event, he did this post on Clarna. And there's a lot of good stuff in here. One mind-melting chart is the price to revenue ratio or price to sales of Klarna went to, I don't know, 40, 30, 32 times operating income in June. And with the most recent write down, 4.3. What a squish job. We can't pat ourselves in the back all the time. We've gotten plenty of stuff wrong over the years. I think this was the most obvious, this cannot last. The buy now pay later thing. So Scott, Alloy had this thing about shoppers that are basically taking on more debt by using the

Buy Now Pay Later and saying like how shoppers would make purchases if it wasn't available. 10% of them said they wouldn't buy, 20% said they just purchased a portion of something. The way that I see By Now Pay Later, I don't think people are buying the Buy Now Pay Later options. I'm going to buy this because it's available for the buy now pay. The way that I see it is you click on it to buy, you go to your checkout and then you see the Buy Now Pay Later option. I don't think you go, I'm going to buy it because of buy now, pay later. I think you use buy now pay later because it's an option and you go, oh, I wouldn't I pay this

over four months? What's the point? Counterpoint, the data suggests that we're probably outliers because they said that somebody estimates that the average credit score of a customer using buy now, pay later is 500. So you would think that those people are using it for the exact purpose of being able to defer Payments. See this shirt I got here? Since Tropical Brothers keeps blowing us off, I try to Roeback shirt, you've heard of these? Roeback, no. All the podcasts give you a 20% off. They're a little pricey for my taste. A little pricey for a polo. It's kind of nice though, they got like drinks on

him here. What is that shirt? $69? It's like $70. It's pretty expensive for me. So I nailed it. It's too much in this economy. But here's the thing. This got like little drinks on it. Roeback, if you hit us up, we want a Miami Vice Animal Spirits shirt with Little Miami Vices on it. How awesome would that be? Very comfy shirt, by the way. All right. So Rubenstein says that, so Clorna announced a big down round. And guess what?

Not surprising. Affirms down 80% or more. What do you expect? Michael Moritz, the chairman, said the shift in Clorna's valuation is entirely due to investors suddenly voting in the opposite manner to the way they voted for the past few years. End quote. Rubenstein says, that's true. But the history of Clarnas suggests it was the past few years that are the outliers rather

than the present. And I think people are going to get burned by anchoring to stocks that are X percent off their highs. The highs, yeah. As if the highs have anything to do with reality. Don't you think all these buy now, pay later companies just need to come together and join forces? Like the Avengers? Transformers, I was thinking. Something like that where, I don't know, do we need six of them?

Maybe even if they all came together as one, it wouldn't help much. But I don't know. Do we need that many of them? Yeah, that's a good point. Axios did this thing, like a deep dive on all different. aspects of buy now pay later. And this was news to me. Did you know that buy now pay later doesn't affect your credit score? So if you're up to your eyeballs in pay later obligations, the buy now pay later companies don't know about that. The credit companies don't know about that.

I'm surprised it's not more regulated than that. I guess that makes sense. You're not doing any sort of credit checks when you use them. So they said that they're looking into how we get some class. here, but interesting. All right, let's talk. We're going to get into some quarter stuff. We have Netflix reporting after the bell today. It is 9.30 on Tuesday morning. And the science of hitting, a substack that I mentioned, has this amazing chart of Netflix versus Disney versus Warner Media and Paramount. And Netflix, for all the shit that is spoken about them, how difficult the position they're in right now, transitioning to the ad supported model, getting away from the sharing of the passwords and churn and lack of hits and all that sort of

stuff, guess what? They're still dominating the actual revenue. I'm, listen, not a stock guy at all. I'm coming around to the idea that Netflix is, this is going to be looked at as a wonderful buying opportunity someday. So you'll send to the podcast on the rear of the call the town of Matthew baloney, baloney, baloney. It's Bellany. Rich Greenfield. Yeah, that was great. So that one, and he's been talking about Netflix a lot lately. And, And by the way, don't make fun of someone for how they pronounce a word because it means they learned it reading. No, no, no.

You listen to the podcast. This is definitely one of the most interesting areas right now is the streaming wars. I thought Rich Greenfield made a very good bullish case for Netflix, like still being a wonderful business, even if people are saying we're not going to price it as we once did. Why don't know if he said wonderful? They're still self-sufficient. They're not losing money. Yes, they are in a much better position.

And again, if the market says we're not going to pay you like we did. So I sent out this tweet in July 2019. So three years ago, it was a picture of Netflix's price with their free cash flow. And the price is like $322 at the time. Free cash flow, training 12 months was negative $3 billion. I said at the time, this is why 10,000 value investors are retiring every single day and becoming growth investors. And someone tagged me on this tweet saying, hey, it's kind of funny to read this now. You're talking about like that outlier period. It is kind of crazy how patient investors were willing to be during that time. And I know that's because of zero percent interest rates and all this

stuff, but my how that has changed. So here's the lineup. Netflix is down 72%, Disney's down 53, AT&T, which now owns HBO is down 31%. This is over the last two or three years. Paramount, which owns CBS, is down 76%. Roku's down 82%. All of these streaming services are just, man. I think it has as much to do with the macro backdrop as it does with the competition, because these companies were competing prior to interest rates rising. So this is interesting. So Hulu is carrying Disney. And I got to tell you, I'm very disappointed with Disney Plus. I can't get my kids watch it, but they have a huge catalog.

But I'm not on that service very much. Are you? I personally don't watch anything on Disney if it's not with my kids. 10 out of 10 for Zombies 3 for my kids, though. We've watched it six times, listen to the soundtrack a million times. It's better for kids than it is for adults. The Marvel stuff, as we've spoken at Nauseeem really kind of stinks. By the way, Hulu with their FX partnership is highly underrated.

Hulu's hot. Hulu's hot. So, all right. new subscriptions to Hulus from the journal have outpaced those of Disney Plus in 18 of the past 24 months. That is surprising information to me. So here's the deal. Disney Plus lost $887 million in the most recent quarter. It's lost $6 billion since the launch of Disney Plus. We've said repeatedly, imagine where Disney would be without Disney Plus, which has been such a huge success. actually, maybe we're exactly wrong.

Maybe Disney stock would be like 50% higher if it was... If they were just movies and theme parks right now and... If they didn't have this hanging over them. By the way, the thing that stinks, though, all these companies getting crushed, unless Apple and Amazon just carry the weight for everyone and maybe they will, the entertainment we're going to get from these streaming services is going to go down. We're not going to get as much stuff anymore. It's going to be awful.

I feel like right now we are spoiled. There is a ton. Of good stuff. There's going to be a lot of cutbacks on stuff. On Apple TV, on Hulu, on, well, HBO Max. What are you watching on HBO Max? Barry just ended. I'm watching something. I can't remember. Staircase was the last one. I haven't had any good HBO Max shows in a while. Amazon's got the Lord of the Rings coming out, which I'm bullish on. We started the Terminalist last night with Chris Pratt. What channel's that on? It's on Amazon Prime. I'm intrigued after one episode. I don't know what's going to be, but I'm intrigued. I watch one episode. I don't know. I don't feel like watching it. I'm sure it's fine. I mean, you know exactly what you're getting yourself. It's not going to blow your face off. I'm sure it'll be entertaining enough. It's a fiction book that dad's read at the beach. Yes. Yes, yes, yes. All right. So we are into earning season. Last week, banks kicked it off. We're about to get into that. What do we have on the docket this week? We had IBM last night. Oh, speaking of dividends, I saw a zero hedge tweet at something like

IBM paid out. I might be making up the numbers. $1.5 billion in dividends last quarter. They're operating cash flows $1.3 billion. Yikes. This evening, we've got Netflix. We have at Johnson and Johnson before the bell. What else we have? Oh, Tesla tomorrow. That's a big one. That should be interesting. So let's say it's 2013 Michael, who has got his trading journal still. Are you going long calls or puts here for Netflix going into earnings? Isn't it kind of guilty until proven innocent? Yeah. So I agree with you. I kind of want to buy Netflix. However, I don't think there's any rush here because I suspect that the market is going to wait to see how they transition to the subscription model. Happy to eat my words when this comes out, but like they have less

worse news, the stock is going to rocket 15 or 20%. They have less worse news potential for sure. But my point is, I don't think that steadying of subscribers or maybe less bad than expected will send the stock up 15%. Of course, I could be wrong. We'll see in a couple of hours. But I do think that we're in a wait and see mode, wait and see how this subscription and business works, which, by the way, I think it's potential.

I do. All right. So let's get into it. Delta reported last week, operating revenue is 99% recovered versus June of 2019, which is funny because what did we say Delta is down since before the pandemic started? 70%, 60, 50. I can't remember what it is, but it's a big number. All right, domestic corporate sales. That's on 82% capacity restoration. So obviously that means prices are up. They haven't gotten back to those levels yet, but revenue is. Domestic corporate sales. Is that business travel?

Yeah. Okay. 80% recovered. That is very surprising. It's higher than I would have thought. And it looks like they hedged their fuel prices nicely, adjusted fuel price of $382 per gallon, was up 37% sequentially, which is actually a ton. So maybe I should take that back. Fuel cost eight into their profits big time. So stock was flat after earnings. All right, let's get into banks. I think it was the Morgan Stanley CEO who said, like, if I could sum up the environment

in one word, he would say it's complicated. So all of the major banks reported double-digit declines and profits, missed analyst expectations said differently, as quoted Morgan, analysts missed expectations. And yet, it was the best. This is also from Zero Hedge. KBW Bank Index rises 5.8% for biggest one-day gain in 18 months. So this is my point, Ben, about you really can never know what's priced in until after the fact. And I know that's what stock pickers, active managers are paid for, accurately determine what's priced in. It's impossible. Because the market is insane. You know afterwards. What else do we have?

Total trading revenue did well. That was a bright spot, up 25% at City, 21% at Morgan Stanley, 15% at JP Morgan, 11% of Bank of America, 32% at Goldman. So Goldman's profit fell 47%. Revenue fell 23%. Of lot of this was obviously due to investment banking business, just completely drawing up. Morgan Stanley's underwriting business, I think, felt like 90 something percent, just completely dried up. What was interesting is BlackRock. So Black Rock, their management fees, which are just like expense ratios, basically, only felt 2% because they brought in nearly $90 billion in new investor money up from $81 billion in the same period a year ago. Look at this chart of Black Rock's revenue. Jeez.

Not a bad business, huh? Not a bad little business. What else do we got in here? I'm sorry, investment bank of revenue at Morgan Stanley was down 55%. The equity underwriting was down from $1 billion to $148 million. and that was a big one. All of these companies are holding aside pretty big dollar amounts for loanproof vision. So they are expecting the economy to soften. Here's what I wanted to mention. So Michael Mayo, who I guess has a reputation for being a bit of an agitator. And I mean that like in a good way. Most of the analysts cowtow, oh, great quote, blah, blah, blah, not this guy. This guy is a straight shooter. Asked a hard hitting questions. So he said after investor day, Jamie, you said a hurricane is on the horizon. But today, you're holding firm with your. $77 billion expense guidance for 2022. I mean, it's like you're acting like there's sunny skies ahead.

You're out buying kayaks, surfboards, wave runners just before the storm. So it's a tough times or not. So I listened to that on the quarter app, as everyone knows. The quarter app has made massive improvements. Am I wrong? That's awesome. I do think he's flip-flopped like 12 times in the last six weeks, Jamie Diamond. His voice went up.

He got a little bit agitated with this. Here's what he said. And I'm going to read this because I think it's worth reading. He said, listen, We run the company. We've always run the company consistently. Investing, doing this stuff through storms. We don't like pull in and pull out and go up and go down and go into markets, out of markets

through storms. We manage the company. We invest. We grow. We expand. We manage the storm and stuff like that. And so, and I mentioned to all of you on the media call, but they are very good current numbers taking place.

Consumers are in good shape. They're spending money. They have more income. Jobs are plentiful. They're spending 10% more than last year, 30% plus more than pre-COVID. Businesses when you talk to them. They're in good shape. They're doing fine. We've never seen business credit be better ever, like in our lifetime. And that's the current environment. Okay. That sounds like a recession in me.

So that's the current environment. But here's where it gets confusing. And they're all saying the same thing. The future environment, which is not that far off, involves rates going up, maybe more than people think because of inflation, maybe deflation, maybe a soft, maybe a soft landing. I'm simply saying there's a range of potential outcomes from a soft landing to a hard landing driven by how much rates go up. the effect of quantity of tightening, the effect of volatile markets, and obviously this terrible humanitarian crisis in Ukraine and the war, and then the effect of that on food and oil and gas. And we're simply pointing out those things make the probabilities and possibilities of those events different. It's not going to change how we run the company. The economy will be bigger

in 10 years. And we're going to run the economy. We're going to serve more clients. We're going to open up our branches. We're going to invest in things. And we'll manage through that. If you look at what we do, our bridge book is way down. That's managing your exposure. So we're quite careful about how we run the risk of the company. And if there was a reason to come back on something we would. But now that we think it's a great business that's got great growth prospects, it's just going to go through a storm. And in fact, going through a storm gives us opportunities too. I always remind myself, the economy will be a lot bigger in 10 years. We're here to serve clients through thick or thin and we'll do that. I thought that was the most interesting thing that I

listened to last week for sure. So can I shorten that really long soliloquy just did? we don't know what's going to happen. It was very good. We don't know what's going to happen. We don't know. That's pretty much it. Don't want to say that and admit that. We really don't know.

And as much as we have opinions and we have takes and stuff on this, no one knows what the hell is going to happen. And I think the last three years is a really good proving ground for that. Wells Fogg or CEO said the same thing. He said, we do expect credit losses to increase from these incredibly low levels,

but we have yet to see any meaningful deterioration either our consumer or commercial portfolies. It's very weird. Everyone's just waiting. Everyone's just like waiting for the storm to hit. I think because markets are moving faster and cycles are happening quicker, people don't expect the good times to last very long. And obviously, I get why they say that because the inflation in the Fed and all this stuff. But I think people are starting to price that into the way they think,

like things are just more cyclical in those cycles are happening faster than ever. How's that? I think that's absolutely right. Wells Fargo residential mortgage originations. Looks like it's been going that for a while. Actually, I'm trying to, what's going on here? When does this go back to you? All right. I mean, they slowed, obviously. one more thing again same thing from city CEO nothing in the data that I see signals that the U.S. is on the cusp of a recession everyone's got opinions that a recession is coming and listen I'm more or less in that camp I've got three toes in what's this CNBC thing which one are playing for sky high inflation all right so the headline was millennials are

responsible for inflation to which I say headlines all responsible for nonsense This got booted around the internet. There was nothing in here that was controversial. So Bill Smead, the guy that said this, said that there are an estimated 92 million millennials in the 27th to 42-year-old age bracket. Oh, wait, you're a millennial, Ben? I've mentioned this before. I'm the oldest millennial. I guess according to this guy.

If you ever paid attention to this show over the past five years. All right, here's what we said. The last time we saw what we call Wolverine inflation, which is adamantium inflation. I feel like someone just made that up. We'll reinflation. Which is inflation that is hard for policy makers to stop was when 75 million baby boomers had replaced 44 million silent generation people in the 1970s. So demographics. Yeah.

So we have the United States a whole lot of people, 27 to 42, who postponed home buying, car buying for about seven years later than most generations. But in the past two years, they've all entered the party together. And this is just the beginning of a 10 to 12 year time period where there's about 50% more people that are wanting these things than there were in the prior group. Does that sound like he's blaming millennials? So this person's on the other side of Colin Roche then. He's saying prolonged inflation is here to stay. All right, I want to talk about spending money real quick. I had a conversation with retiree recently, and they were kind of lamenting that

four or five years ago when I first retired, I wish I would have just purchased a vacation home. We had enough money to do it, but we were really scared and it would have eaten into our portfolio, and they say now we have lost a vacation home worth of money in this bare market. And I thought it was interesting to put those losses in those terms. And obviously, losses are. temporary, volatility is temporary, as long as you kind of hold on. That's the way I think about it in terms of owning the market sort of thing. But I thought it was interesting that

they put it in those terms because obviously some people would say, well, that's a ridiculous idea. If you take the money out, you can't compound. But I think this is one of my biggest changes from having kids is trying to strike that right balance between enjoying myself now and not waiting until I'm 65 years old and I retire, or whenever it is. I'm willing on that concept. Maybe I push it too far. When I was young, I was always like a saver and maybe to my detriment in some ways. I just would never spend any money on myself. And I feel like having kids totally unlocked that for me.

Like, why would I not enjoy stuff now with them? With a caveat that I'm still saving. But it's like I've realized that like hitting some goalposts and markers along the way in terms of like how big my portfolio is brings me literally zero joy in life. Hitting a certain number does nothing for me. Emotionally, mentally, sure, it's some comfort and security for the few. future and you still have to save. But I'm really coming on that side of, I don't think you should wait until you're older to enjoy yourself. Well, clearly, you're buying $70 Hawaiian t-shirts.

I know. And this is why you get a jet ski. I'm just saying, I think a lot of people in finance poo-poo that notion that you need to be frugal and you need to save everything. And I think that's hogwash. I think you have to enjoy it now and spend some money. That's where I'm falling. And I've completely reversed course on that over the past five to seven years probably. Yeah. I mean, also, not to get too dark. Maybe I was impacted by my mom dining. before she was 60. Like nothing is promised. So why delay gratification when you just never know. So yes, you have to strike the right balance. Obviously, you don't want to go too far and completely screw tomorrow guy. Yes. You had to strike the right balance. But that's the way I'm thinking of

saving and investing today. That's experiences in the future. So that like helps me mentally block that out and still continue to save and invest. But it's like I'm not going to save everything just because I want to hit some stupid number. I don't care about that. I don't care about numbers. How's that? I don't care about numbers. How's that? I don't care about numbers. that's a good way to live. And we should point out for the people that are going to actually that is a statement that only people that don't have to worry about money can say. We acknowledge that. We are fortunate. We get it. Okay. Let's pivot to crypto. So three hours capital. There was like a giant report that's coming out. They owed 27 crypto companies, $3.5 billion.

Who were these psycho people that were running this hedge fund? Who are these guys? I think I was telling you this the other day, my theory, and we're going to talk to Zach at Blackfai, hopefully, today. and hopefully it'll be out the day after this episode records. We'll see. We've got to push back a few times. I think the problem in crypto, and I'm lumping people in here, and I'm sorry if it sounds like I'm stereotyping. The problem in crypto is not the technology, it's the people. The people who won the lottery when they got into Bitcoin early and they became wealthy, and then they decided in their 20s or 30s to start a hedge fund, and they have zero idea how to manage risk or how this stuff works in the real world. And I think the people are the problem with crypto.

There's just too much leverage. I feel like this is a space that. that needs to be regulated, which is exactly the antithesis of crypto. I feel like that's what the space needs. I kind of wonder, these guys, Kyle, and I forget the guy's name Sue, I believe, were obviously incredibly charismatic and convincing and had an absolute rock-solid reputation to be able to, I don't know if fool everybody is the right way. But don't think reputations and crypto are built by how big your bankroll is. Their reputation was, oh, you made a bunch of money. That's the same thing with everything, more or less. Yeah, fair. I'm not saying that Wall Street is innocent here. Obviously, they almost took down the whole financial system

in the 2000s. So I guess same thing. The irony of this, though, is that crypto was supposed to be transparent. It was supposed to be open source, whatever, everybody was able to see what everybody else's risk was. It's all on the blockchain. We can see it all, yes. Yeah. Okay. What else? What else? There is a rally, though. There is a rally underway. Is this dead cat? Is it real? Who the hell knows? But just to show you how wild the swings were. So Eith is up 51% over the the last seven days. Again, that's 51% in seven days and still down 50% of the last three months. Okay. Gemini is doing another round of layoffs. They're cutting another 10%. I believe they did. I'm sorry. It says this from TechCrunch. Just seven weeks after Crypto Exchange Gemini cut

approximately 10% of its workforce due to turbulent market conditions, the startup has made a second round of layoffs. By the way, I don't mean to make light of layoffs, but kind of like how economists always say 40% is their guess. Doesn't it seem like every time a company makes a big round of cuts, 10% is the initial number? Why do you think it's just that round number than they do again and again? It seems like 10% is always that first number. The same source who spoke to TechCrunch said the company was laying off staff due to what it described as quote, extreme cost cutting. You had Apple also announced that they were going to slow hiring next year. That's different than laying people off, though. I think a lot of people thought this is really

bad news. Apple is slowing hiring. It's not like they're laying people off. It did whack the market a little bit in the afternoon. Who knows? Whatever. All right. We have on Anthony Zhang from VinoVest next Monday. Next Monday. One of the more fun conversations we've had in a while. It was fun. We turned it up. That was fun. And we spoke, I asked him a question, what is the appropriate amount of money to spend on a gift? Now, I should have specified. If you're giving somebody just a one-on-one gift, then his number made sense. He said $50, which took me back. You know why?

Because the reference that I had in my head was we bought six bottles of wine, six or seven bottles of wine for like teachers for daycare. And I think I spent like $16, which to me, I don't know, it felt like reasonable now. You were hoping for $2. Chuck maybe? What's that? Trader Joe's two buck chuck. You get a bottle wine for $2.

I bet it's $4 buck now. Okay. I don't know about that. You never heard of $2 Chuck? Never heard of $2 Chuck. It's pretty gross, actually. So anyway, after we were done recording. He said, I'm telling you, you will be able to tell the difference between $50 bottle of wine and $15.

He was saying $50 is the cutoff, yeah. I can't remember where he said you'll stop knowing if he said 75 or 90. He said like 100. Once you get to 100, then you kind of stop noticing difference. Okay. I took Anthony up on that. I went to the store in the corner, Spirit store. I bought two bottles of wine, 115, 160.

I brought it home and I said to my wife and sister-in-law. Same kind of wine. that thought. I said, we're going to have some fun. We're going to do a taste test. Fifteen versus 60. So I did the poor. Here for you, for you, for you, for you. We drank it and we all agreed that this was better than this. And I said, you know what? 85% sure that this is the more expensive one. We were all wrong. However, $15 was better. It was $15 better. But, but, but I didn't realize I'm not a wine drinker and I'm also an idiot that I was comparing apples to mangoes. Cribs because the expensive bottle of wine that we bought was a Cabernet, which I'm told is a

wine that you drink with a hearty meal with a steak because it's a bold wine. It's got packs of punch. I bought the cheaper wine was a drinking wine. The drinking wine was Pino. So you showed about the same type. It just happens that Pino is better than cab. So I totally flubbed that. I got to try it again. All right. This is why we're an anti-survey podcast. Taste testing is kind of like a survey. It all comes down to taste and circumstances. I have a random observation. I want to run by you. Okay. Why is it that every time you turn a lamp on, you have to click it twice. When you're turning the dial on a lamp. It does seem ridiculous. You click once, nothing happens. You click twice, then it goes on. Tell me. There are certain

light bulbs you can buy that will go from like lower to brighter. But who actually uses those? I don't know. No, no, no, no. No, no. Oh, you think the one click is low, the two click is high? I think so. That's my guess. That's a plausible explanation. But, how many people actually buy those light bulbs? I don't know, 1% of the population. Do lamps in your house click twice? They probably do. When we had twins, we got rid of all lamps in our house because my son would just destroy them. There's a lamp at the table? Gone. We have no lamps. All right. Let's get to recommendations. All right. I'm doubling down on the bear. My wife and I watched this really fast.

Hulu. I think there's a lot of other reasons I like it. First, it's Chicago. I know a lot of people from the south side who are White Sox fans who are like these people. It's a story of a family who runs an Italian beef shop. I still remember my brother. lived in Chicago for a number of years. My wife and I, when she was still my girlfriend, went to visit them. We got down there late because traffic was bad. And so we went right to the bar to meet friends. And we said, oh, shoot, we forgot to have dinner. My brother said, hold that thought. I'm going to get you something. You've never tried. He comes back. He's got two huge Italian beef and we were hooked. And we get them every time we go back down there at Portillo's.

And so maybe I have an affinity for Italian beef. The last two episodes of the season were awesome. The payoff was huge. The guy who plays Richie, the cousin, is just fantastic. He was in girls. Yes. I loved this show. Some people, it's not their cup of tea. I've heard all people say it's too chaotic. It's in the kitchen. If you've followed me into any recommendations over the years and you're a Ben recommendation person, you have to watch this show. My favorite show of 2022. Okay. I'm on the other side. I understand your point and I understand why people like it. I don't dislike it. It just, I'm not where you are for whatever reason. Just didn't hook me. So after this. So they all called each other chef. Yes, chef. And I remembered there was a Bradley Cooper movie called Burnt, where he's a chef. I found that on some free channel. Not bad. Him and Sienna Miller.

Pretty good movie. I watched the New Jurassic Park movie kind of felt like you. It was kind of like, ugh. Everybody should be ashamed of themselves. What was the deal with the locust? The bad guy was a horrible character. The locust plot didn't make any sense.

So the bad guy. It wasn't like a terrible movie, but it just, it wasn't good at all. They tried to make the bad guy, Dodson from the original Jurassic Park. Oh, okay. It's horrible. How about when Chris Pratt is like just doing this

to like random dinosaur? Yeah, that works. Is it just me or is CGI getting worse? Or is not getting any better at least? I felt like the CGI in that movie, I'm like, it's not that great. I don't know. Okay, that's all I got. All right, we've got this chart box office overall weekly gross 2020, going back to 2019.

And numbers are running pretty strong. In fact, very strong. But I'm worried about the back half of the year. Probably not much coming out. I listened to the big picture did like movie auction for the second half of the year. and they've got the movie about Spielberg's childhood. They've got Black Panther. What else was a big one?

Oh, Mission Impossible. I'm anticipating a pretty big drop-off. Where is this? I can't find it. It doesn't matter. I'm cautiously pessimistic about the back half of the year. It's all front-loaded. It's not a second half story.

You know what I'm excited about, which I know is going to be horrendous. The last Halloween, Halloween ends. It's going to be terrible. I never watched any of those movies. Not a horror guy. No, never did it from me. Too scared? I'm not a jumpy person.

I just think they're all kind of, eh, whatever. I watched a couple horror movies, but I don't like them bad much. It doesn't do it for me. Kind of like you with coming of age movies. You don't like coming of age movies. I don't like horror movies.

Fair enough. All right. So I did one old and one new this week. The old, I revisited Swingers. When I first saw Swingers, I was probably, this movie came out in 96. I don't think I saw it when it came out. In fact, I know he did it.

I probably saw it when I was like 13. And it's not for a 13-year-old. Not even close. So it did nothing for me at the time. I don't know why I rewatched it, but I did rewatch it, and it is hilarious. Vince Vaughn throws 105 miles an hour in that movie. It's honestly one of my top 10 all-time favorite movies. Oh, really?

I love swingers. Yes. I mean, that's Vince Vaughan's best performance of any movies ever done. So, yeah, Favre was amazing. Just the opening scene where they're trying to be ballers in the casino. Even though there's a lot of 90s elements, the movie ages really well. I've watched it many times over the years. Oh, yeah.

So the 90s part of it, and this took me back to Aweller. childhood. And I guess, yeah, our childhood. Answering machines. Oh, yes. Those were a thing. You used to come home and press the bus. Ooh, seven messages. That's the cringiest part of the whole movie, too. It pains me to watch that scene when he's leaving the messages over and over again. Hi, Nikki. This is just, this, it's not going to work. It's Mike. It's so bad. And then she finally picks up. But he's leaving a message, never call me again. I love it. Yeah. Yeah, that movie aged incredibly, incredibly. well, aside from some of the 90s stuff. Okay, last one, Blackbird is a new show on Apple.

It might be too stupid, but I'm going to push all my chips on. I think I'm all in on the show. Okay, I've heard good things. It's on Apple. Is it Apple Plus? No, Apple TV. It's on Apple TV. Oh, Ray Leota was in this. This is Ray Leota's last performance. No way. So here is what it's about. And it's based on a true story. So it's got a 25% true story premium. I like that. This guy goes to jail for selling drugs. They transfer him to a maximum penitentiary, like a really bad one, in order to, because this is like a charming, charismatic guy, they transfer him in order to coerce a serial killer to tell him where he buried all these dead bodies.

Ooh, okay. I love serial killer stuff. I'm in. Okay. So serial killer. Say no more. Jail. I'm in.

All right. Animal Spiritspod at gemal.com. Thank you for listening. We'll see you next time. Thank you.