Animal Spirits Podcast - Good News is Bad News (EP.260)

Episode Date: June 8, 2022

On today's show we discuss why everyone thinks we're already in a recession, living paycheck to paycheck on $250k a year, why crypto makes more sense in a bull market, why it feels like the stock market should be down way more, Top Gun: Maverick 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. Today in CNBC, Target warned investors Tuesday that's profits will take a short-term hit as it marks down unwanted items, cancels orders, and takes aggressive steps to get rid of inventory. I think the shares feel like 7% pre-market. I wanted to look at how the other retailers are doing. So Targeted is now down 44% from the highs. Best buys down 44% as well. Amazon's down 35%.

Even Costco and Walmart are down 24%. Retailers are all getting smacked pretty good here. When you hear this, it's such a weird, we're going to talk about the good news, bad news stuff today, but is this good news for inflation or is this bad news for the economy, that Target has too much inventory? There was a story on the news today saying the same thing with like Gap and Banana Republic and Old Navy and all these types of retailers where they're going to have to just do huge sales. Is this good news or bad news? I don't understand because sales at Target is is going to ease inflationary pressures. Is that what they're saying? Well, I'm saying one of

the reasons that inflation was high is because we're having supply chain issues. And it seems like that is easing a little. So is that the kind of thing that, well, it's good news for inflation, but it's bad news for the economy because people aren't spending as much on goods. Inflation is jumping around. It was goods. Now it's services. So I don't know. There's a lot of cross currents, as you say. That's to run its course I've found in recent months, by far the most clicked-on chart for white charts for me is drawdowns because all these stocks, especially individual stocks, have these huge drawdowns. I have a list now. You can create your own list and save it under a certain name.

So I have my sectors I look at. I have growth stocks that are getting killed, retailers, all this stuff. You have a drawdown list? We're on the homepage? No, when you go into the fundamentals and you can go into different saves templates. Anyway, Target, biggest drawdown in the last decade.

Biggest drawdown since the GFC, I should say. Right now? Yeah, that makes sense. I can see that. Probably for a lot of companies, which is kind of crazy. If you want to make some of your own templates like me, go to Wighttrefs.com, tell them Animal Spirits sent to you

and get 20% off that initial subscription. 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 Rit Holt's Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. All right, Ben, we're going to run long today. I don't count our dock, the pages, but this one ran long. I think we're pushing 40 pages in the Google Doc. A lot to cover. We'll have a lot to talk about. Ben, I want to start with a quick announcement. We mentioned a couple of weeks ago that we're doing a Financial Festival in Huntington Beach, California in September. Today we announced that we are doing a fintech demo. We're calling it FinTech X. We're going to showcase 10 wealth tech fintech companies that are, helping advisors grow their business, serve their clients. And the great thing about this demo is that by the time we reach September, half of all FinTech companies might be gone anyway. So the ones that are left standing are going to be the really good ones. I saw somebody the other day say survival is alpha, just to show you where we are in the cycle.

So if you work at a fintech, if you've got an idea, you have a lot of time to build it, so maybe next year. But if you're interested in showcasing your product, your service, we will link to this, of course, in the show notes. And there's going to be a lot of people who will use these type of products in the audience, thousands of people. Yes. We were talking about Target in the Open.

It's now only down 3% on the day. We're going to talk all about the economy, the market, and its relationship to the economy and where we are. I'm impressed with the resilience of the stock market. I got to say, I'm impressed. It does feel like it should be down worse because you've been kind of mentioning this a little bit, that this is the recession everyone sees coming. So this is Cardi B.

I think he tweeted this out on Sunday. When y'all think they're going to announce that we going into a recession? I read that word for word. This does feel like the thing that everyone either thinks we're in a recession or thinks we're going to be. So this is a survey which, take it for what it's worth. I don't know. People are putting this around Twitter, but it's from you gov.com. I have no idea what that is.

The majority of Republicans, more than like 70% think we're already in a recession. More than half of independents think we're already in a recession and almost half of all Democrats think we're in a recession too. A lot of people think we're already there. The weird thing is the data is not there yet. Think about it. Yes, inflation is high, but inflation alone does not mean we're in recession. The unemployment rate is low. Businesses are still hiring.

People are still spending money like crazy. Just because you balance that out with inflation as high does not mean we're a recession. And I think people are conflating the issues of I'm not happy. So let's just rip the band it off and make this recession. We're not in a recession yet. Nowhere close probably. At least certainly we weren't in May. We're getting a bunch of data from May and no recession.

That's the rearview mirror. I think that's what people say. Economic data is the past. What about the future? There's no way to handicap this. What's the default number that we give without being wrong? Is it 30% chance? 40. You can't be wrong. Okay. I still do think that I don't know if the stock market's in denial or maybe I'm just very wrong and none of this transpires all of the threats. And we're going to get into some of the details. But I don't think the stock market is in denial. There have been recessions in the past where we didn't get a 40% plunge in the stock market. It only fell 20%. because of the way things are set up, this doesn't feel like the kind of scenario where you're going

to have like a 2008 type scenario where there's long lasting ripple effects. Like this could be a recession where we have it and it happens and it's kind of painful for some people and people lose their jobs, but there's no system-wide reset. This is a good point. That's what it feels like to me. That's fair pushback because the S&P did fall 20%, 19 and change whatever. The NASDAQ did fall 30%. Forget about even the zooms of the world. That's a whole other story. But Target, Walmart, there's blowups all over the place. So maybe I take that back at the stock market. But right now, we're only 13, 14 percent off the highs. Multiple still haven't really come down that much. And if we are going to a recession, it seems like we're a little bit overly optimistic. Based on the mood of investors,

it feels like stocks should be down 30 percent. Like the market should be down 30 percent. I think that's probably what you're saying. And I tend to agree with that. Like sentiment feels worse than the market itself. Let's look at some data about why we're not in a recession right now. And I think if I was a betting man and I was using my probability, I would say there's a much higher chance of recession next year than this year. That's pretty easy proclamation to make, right? Yes. No? No. I'm laughing at something else. Okay. By the way, there was an Apple update. How do I turn off my messages on my computer? I don't know, but it's so loud every time it happens to you. It's so annoying. I'm sorry. I wish there was something you could do. Your phone rings,

your FaceTime, all that stuff. It's really, really loud. Someone should help you with that. Look at this wages chart from the New York Times since 2019. Wages are up a ton. Okay, inflation is up a lot too. But guess what? Those things go hand in hand. One of the reasons that inflation is because wages are up. Unfortunately, you can't get a situation where inflation stays low and wages just run higher. That's never going to happen. That's like the unfortunate thing about this. So we complained forever that inflation is low, but wages are low. Now inflation is high and wages are high, just not as high. This looks good to me. So where are wages rising the fastest? Leisure and hospitality and retail. Both make sense. This is the prime age workers came back to the labor force. It's almost

as high in a participation rate as it was pre-pandemic. And there's actually more people. Let me ask you this. We're looking at 25 to 54-year-olds that are part of the labor force, meaning that they're either employed, unemployed, but looking for work, or are temporarily laid off. Who are the other 17 percent? Are those fire people? If you're 25 to 54 and you don't have a job and you're not looking for a job. Okay.

Parents taking care of their kids. People looking for a new job. No, no, no, no, no. Dude, those people don't count. These are people. If you're looking for a job and don't have one, you're the job. the labor force. So people could be looking for a job. They could be changing. No, you're not understanding, sir. Oh, you're saying the people who are taking care of their kids are not part of the

labor force because they're not looking. Is that what you're saying? I'm saying this 82.6% represents people that are working, that are unemployed or that are looking for work. Okay. So if you're none of those things, are you retired? Could be. But one in five. It just sounds high or almost one in five, 17%. But don't you think, I don't know, 10% of that is crypto people who retired early. Now we're going have to come back to work again because crypto crashed? That seems fair. Conner Sen, 1.2 million jobs created in the last three months. This isn't anything close to a recession. This is the actual labor force, not the participation rate. There's more people aged 25 to 54 working now than there were in 2019. Obviously, that cohort has gotten bigger. Listen to

this one for the New York Times. Gabby Calvo, 18, left the business administration program at Nashville State this year. She said she did not know what she wanted to do with the degree and had begun making good money $21 an hour as a front-end manager at Kroger grocery store. The job was unusual for someone her age. She said they didn't really have anyone, so they took a chance on me. They referenced this story as being a bad thing. They say the fact that people could potentially forego college to get a higher paying job right now is a bad thing. The funny thing is, I remember when that really angered people that, hey, back in the day, we could go work at GM or Ford and make a good living without a college diploma, and now they're saying it's a bad thing.

I think having higher wages as competition for college doesn't that help solve a lot of student loan issues for people who don't finish potentially. And maybe they realize after working at a job like this for a couple years that, okay, maybe now it's time for me to go back to school. I think this is a good thing. All of this stuff is about tradeoffs because the labor market is obviously super tight right now. To Conner's point, this doesn't look like a recession, at least certainly not in May. I would love nothing more than to be wrong, that there's a soft landing, that inflation comes down. I think that's less likely. That's the problem. The data is still good, but everyone keeps seeing what could happen basically from the Fed. If the Fed just allowed this boom to continue

when inflation stays high and we have a boomflation period, then politically it won't work. No one wants that. Are we back to the place where good news is bad news for the stock market? So when we got that job support, we saw average hourly earnings up 0.3%, 5.2% of the past year. Well, listen to this. So over the last year, 5.2% wage growth. And in New York Times, Adam Azamek, who's a pretty good follow on Twitter, said that's

something that we're used to saying is pretty unequivocally as good. but in this case, it just raises the risk of the economy is overheating further. So it's like, you're right, good news is bad news because if the good news continues, the Fed has to stomp on it a little more. The Fed has more leeway to continue tightening. And so maybe that's bad news for the stock market. I don't know. Listen, I would love to fast forward.

I'm very curious to see where we're going to be in October, November, December, etc. Is inflation running at 5% per year by then or something? I agree. So remember the Great Resignation was like all the thing in two. 2021. There was an article, I think Chris Mem wrote this, talking about how now big tech employers have the upper hand. And everybody that left to start their own thing is going to be coming back essentially. Because you have a 401k, you have benefits, you have a salary, your business might not get nuked overnight. That makes sense to me. This idea that tech is dying, San Francisco

died, is not really supported in, at least this is from Indeed, job posting in San Francisco's February 2020. So like everything else, got cut in half, basically, but still up pretty bigly since then. Even with people potentially leaving during that. I'm sure you have plenty of young people who are still out of school wanting to go work for these places. So here's what I want to say. Maybe we're going to get into this later, but it seems like tech companies, there's just layoff announcements all over the place. Yeah, we've got some crypto ones we're going to get to. Do you think it's fair to say this is probably the most challenging economic environment we're ever we're going to see in our careers. Because obviously, you could say 2008 was challenging and

2020 was challenging, but I feel like in a way, you know the prescription. You know that you just throw a bunch of money at it. This to me, it's so bizarre because things still look really good in the rearview mirror. It's not like things are all of a sudden falling off a cliff and going bad, but we know that things almost have to go bad to bring inflation down. And I guess that's why everyone is saying that the Fed is kind of trapped here. But I feel like just trying to handicap this economic environment in trying to predict what is going to happen and what's going to roll over when and what is good news, one is bad news, has never been harder than it is right now. Well, because you could paint a different story depending on what data you're looking at.

So, for example, the retail stuff from Target, is that a reflection of the consumer or is that supply chain issues where they were so far behind and now they overordered and it's not really a macro thing? It's just a retail, big box retail thing. Then you look at airlines that are raising guidance have never been better. so it's confusing. But then you could also make the case that like don't overthink this with the economy running so hot and inflation so high, there has to be a recession to bring this back to normal. All right. Let's do the Ben positive spin on a recession thing here.

Spin it. This is my, if you're a stock market investor, you want to rip the band date off and get this recession over with. I'm going to do a blog post I'm working on right now, probably out by the time this show airs tomorrow. I looked at every recession going back to World War II. And I looked at what happened for the stock market six months prior during the actual recession itself and then one, three, five years from the end of the recession. Now, the crazy thing is we're not going to know it's a recession for six months afterwards. Like the National Bureau of Economic Research that calls these things in the past, they don't call them for probably two quarters afterwards on average. So even if we were in a recession right now, we wouldn't

technically know it for six months. I would think it would be pretty easy to say, we're not in one right now. Feel free to throw that in my face later. The funny thing is, a lot of times during the actual recession itself, the stock market is positive. Look at these numbers. It's up, I mean, this could be fun with numbers because obviously every one of these recessions has seen at least a correction or a nasty bear market. But like, if you want to play games with the dates, the thing that is not hard to play with is once that recession is over, the average room for the stock market is pretty wonderful. There was only one one year period from the end of a recession where stocks were down and that was the 2001 recession because it was so short and the bear market

kept going. Every other time over three and five years, you're seeing some really, really nice returns once that recession is over. You clear the system out, then things can rise from the ashes. How's that? That doesn't provide any comfort. No offense. Why? Well, because, yeah, I mean, I have no doubt that stock prices will be higher in the future. But I feel like it's easy to get your brain stuck in the land of negativity when this stuff happens and it's never going to get better and things are only going to get worse from here. It always gets better. It does. I'm sorry. That's my positive spin. You don't have to be sorry. No, of course. Things always get better. I agree. But I am fearful for what worse looks like.

I think worse looks like inflation staying really high for a while. I think that's probably worse. But here's the other thing. 1973, 1975, you know, 50% crash in the stock market. Obviously, hey, that's not good. Five years later after that recession was over in March, 1975, stocks dropped 250%. It doesn't matter. What do you mean that doesn't matter? Why? The 70s were the worst decade ever. This is fun with numbers. I'm saying from the end of that recession in 1975, over the next five years, stocks are up 250 percent. And what many people think was one of the, you'd say, well, adjusted for inflation, fine. Still up a lot. No, I would just say adjusted for the 70s were terrible. So, sorry. Sorry. I agree. Well, well, sometimes they're not.

It's hard to be glasses half empty when you're wearing such a beautiful shirt. I'm trying to stay optimistic. This is making me happy. That's true. Actually, am I slowly turning into Albert Edwards? Wait, I thought it was James Montier. Isn't he the one who wears the... Both of them. Next episode, I'm coming with the British accent. All right. And a Hawaiian shirt.

So there was a rebalance this week with the biggest momentum ETF, which is not even that big by like relative... We talked about this last week. I think it's like $10 billion. $10 billion. That's it. Okay. But look at this rebalance.

They rebalance, reconstitute whatever once a year. They're going from... The biggest change is technology. Information technology is going from a 31% weight down to nine. It's huge. Financials are going from 24 down to 7. It's another big one. What's changing?

Energy is going from 7% to 21%. Staples are going from 3% to 17%. And healthcare is going from 13 to 30. So this basically went from tech and financials, which was 55% of the fund, to staples. to Staples, Energy, and Healthcare, which is now going to be 55% of the fund. Oh, I'm sorry. 65.

If you want to know what's been doing good this year. So I looked yesterday, it might be different, but I found there's only two sectors up this whole year. So there's 11 sectors total, because they added, like, communications, the one in real estate. Energy and what else? Staples? What's your guess?

Utilities. Utilities are up like 5%. Those are only two that are positive in the year. All right, let's do this Tiger Global quickly, only because Josh and I and Simon Lack, on the compound of friends are going to spend a lot of time on this. The only thing I will say is that

there are a lot of people who get a lot of joy out of seeing the people who have done really well in the past 10 years do poorly now. It feels like there's a lot of that. That is human nature. That's called? What's the German word for that?

Shadden Freud. You know one. Remember if you say you don't know these words? That's like the Hortendale strategy or? Yeah. Nah, not of the same thing. But yeah. That's close enough.

You can't be on Twitter and not know what that word is. That is a very Twitter word. All right. Is this more fun with numbers? What am I looking at here? You trying to make me feel better? Well, yeah. A couple weeks ago, I did worst years ever for the stock market saying that like if the year ended now, it would be like the eighth or ninth worst year ever. And of course, the funny thing is as people point out like, you know, the year's not over, right? It's like, oh, really? Thanks. I appreciate the heads up there. So someone said, what if you did it for a 6040 portfolio? And as of last week, the 6040 portfolio was down 12% this year. And that would make it like the sixth worst ever going back to 1928. basically in line with like World War II, Great Depression, 2008. The funny thing is, 2008 finished 60, 40 down 14%. We were down 12% because bonds did really well. I used S&P and then 10-year treasuries here, so 10-year treasuries did really well in 2008.

That just shows how bad this is for the 60-40. Now put the Ben positive spin on things because this is what I do. How about this? The worst 20-year period for a 60-40 portfolio. Now, who gives a 20-year period? Okay, here's the interesting part. So the worst one is like 100%. You doubled your money.

But two of the 10 worst 20-year periods for the 60-40 portfolio, U.S.-based, 2018 and 2019. But you know what those annual returns were? 6% per year. 6% per year. I'm sorry. Got it. Yeah, not bad.

Over 20 years. One of the top 10 worst 20-year periods was 6% per year. Don't you think any diversified investor right now over 20 years would take 6%? Oh, yeah. Well, here's my Zoom app and not zoom all the way out. Because as morose as I'm sounding right now, I use that word correctly, right? You just pronounce it weird. What is it, morose?

Yeah. This is obviously, obviously normal and healthy, even though it doesn't feel good, because we annualized the S&P at 15% of the last 10 years and like 20% of the last three years. Obviously, it's unsustainable. And yes, of course, we will get through this. And I'm not super bear saying the market needs to get cut in half. I just think we're in for a rougher couple of quarters, maybe a couple of years, which again, in the grand scheme, it is totally fine.

Don't you think the best case scenario this year would be like S&P finishes the year down 10%. We just get a double-digit loss out of our system. And so it's not the end of the world. I actually think going back, if inflation came down or the Fed decided to pump the brakes and the stocks raced back to all-time highs, I feel like that's actually not a good thing. I think we need to take our medicine a little bit. So I actually think the perfect scenario here, the Goldilocks, is down 10% for the year. It's not the end of the world, but it's also like we take a little bit of medicine for the whole year. All right. We finally saw a high profile downround. And this will certainly, certainly not be the last. I don't know if it's confirmed or not because they said we don't respond to rumors, but BlockFi. And obviously we've had Zach on a bunch in the past, Zach Prince. BlockFi is reportedly raising money at a billion dollar valuation. And according to the block, they raise money at a $5 billion valuation. This seems to me sort of like a duh. How much was Coinbase down?

I'm looking at that up right now. It's one of those things that it seems like it should be this huge deal. Like, well, a private stock, Coinbase is down 81% from the highs right now. Okay, so if BlockFi needs to raise money, what do you think it is? The funny thing is, people almost think it's like a sin in the private markets to actually show what the value is. Oh, no, we actually know what the values are. We're not just covering our eyes and pretending. But, yeah, if Coinbase is down 80%, blockfi should probably be down 80%.

I mean, let's be honest. It makes sense. It should be down more. Or more, yeah, because they're not as big as Coinbase or, yeah, they haven't been around as long. So that stinks, but like if you need to raise money, this is the environment right now. But that that's also another way to think if you own, by the way, you and I dabbled in like angelus and a few private things. Like those startups, I'm killing it this year. I'm down zero percent.

It's flat. All market cost. Listener question. Can you discuss the strength of the dollar versus other currencies and the weakness and gold and Bitcoin in this inflation environment? Is inflation in the rest of the world just that much worse than the U.S.? I do want to mention before we get into this on Talker Book this week. we talked to Don Castorro from Quantix commodities. He talked about the different types of inflation.

One of them being the dollar gets debased and the other one is the dollar strengthening. And I'm not sure, but I guess World War II is probably the only other period where we've seen dollar strengthening like this, I would imagine, because it didn't happen in the 70s. That's probably the biggest thing. I don't see many scenarios where we have 8 to 10% inflation and Bitcoin does well. I don't see how that can happen. Wait, you don't see how inflation can stay high and Bitcoin can do well? I don't see how crypto can do well when risk assets aren't doing well. Well, I can't see stocks continue to do well if inflation's at 10% because the Fed's going to have to step on the neck of the economy then.

I think it's all interrelated. So here's the thing. Wait, real quick, on the dollar thing. Duneberg tweeted the dollar, the DXY is a measure of how the dollar is performing against six currencies. The three heaviest components are extremely short energy. The U.S. is essentially energy balance. So the dollar is weakening against energy exporters. That's basically the deal.

Which also explains why inflation is so bad in Europe. So Jason Furman did this piece for the Wall Street Journal saying that the U.S. and Europe have different inflation problems. And he was saying that the majority of the inflation in Europe is coming from things like natural gas and oil and their energy. And it's really bad. They're having some of the other stuff. But he's saying... So wait, so it's supply driven there and demand driven here?

Yeah. So he said since the pandemic started, the U.S. has spent cumulatively an extra $600 billion on goods. In contrast, Europe has spent below trend amounts on goods over that period, high U.S. demand in conjunction with global supply chain problems is driving up spending on goods all over the world. Basically saying the U.S. has kind of caused the supply chain issues in many ways because we can't stop spending money. And in Europe, it's basically all energy. And that's why there's is so high, which kind of makes sense. But we just, we love, love, love to spend money in this country.

We can't help our. It's not like that's what the rest of the world is doing. It's mostly just us. We love spending money. Big consumers. Although you know what I don't like consuming at the moment? gas. How much has cost off your tank? It was freaking $110 from me this weekend. By the way, a full tank is the new board ape. That's the new status. There you go. 519 this morning at my local place. What is it for you? Big oof. Yeah, 519. Big jump in the last week. It was like 490. And even still, that got me because, you know, I've got a 22 gallon tank, not to brag. How many gallons do you have? 18 maybe? Yeah, but seeing it over five, that's some sticker shock. Should I show Robin my shirt? Go for it. Hi.

why why I got to go bye you're not funny it's not funny some people just don't understand fashion she rolled their eyes

when she saw me she'll never get it oh median household savings and checking balances for a fixed group of households it is crazy how much money is still sitting in banks for people won't that all just get spent down

this is some good stuff here all right this is from Bank of America. So we're starting, this is index to the beginning of 2019 and where they are today. So this is their savings and checking balances. And we're still way above. We keep saying the consumer is in good shape. I think this is pretty good evidence of that. But, but, but, but, but they did say that inflation adjusted spending. So real spending for households has slipped into negative territory. That makes sense. This is a good, bad stat. Average gas spending as a share of total card spending per household surged to 7.8% up from 6.4% in February. However, for lower income groups, so households that earn

less than $50,000, that surge to 9.5%. Dude, that is really, really, really rough. So they're almost spending one in $10 on gas. So this tracks how much houses are spending if you make below 50 or above $125,000. So we can see like a case-shaped recession. Do you think that this will finally get people's love of trucks and SUVs and go back to sedans. Will we see more records on the road? No, they don't make them anymore. If you're driving a truck right now, like I see these huge trucks on the road still, and I know that gas mileage has gotten a little better for them,

but those things are huge gas colors, aren't they? And huge gas tanks? Will this get people off of the love affair with trucks? Seven out of every cars, I feel like, is a truck on the road. I'm sorry, but not all of them work in construction. Not everyone needs a truck. I know I'm going to get more hate mail from the truck drivers here, but it would be nice if this helped their love of the car.

fair with spending so much money on a truck when a lot of people don't need one. And they take up too much room in the parking lot. These two charts are further evidence that it's hard to say like how the consumer, I'm using air quotes, is doing. Because there's so many different segments of consumers. Right. So this chart we're looking at is showing durable goods spending versus leisure spending. And obviously we know what's going on there. People jacked up on durable goods in the early days of the pandemic. See, I feel like if you're wearing a Hawaiian shirt, you're a leisure spender. I'm a big time leisure I'm big into leisure. And then within leisure, we've got airlines lodging entertainment services and restaurants also broken down by households. And people that make over $125,000 are gorging

on airlines. That's the thing. People who make more money and have more financial assets, they complain, but then they still spend money. They don't care. In most cases. Let's get to this bullshit survey. This wasn't even a survey. It wasn't even that much bullshit. It was just the headlines were terrible. Here's the headline. One third of Americans making $250,000 live paycheck-to-paycheck survey fines. A lot of people sent this one to us. This is the thing that really piss people off. It was that more than a third of Americans earning at least $250,000 annually say they are living paycheck to paycheck, underscoring how inflation is taking a bigger bite out of Americans' budget all into the pay spectrum.

Wow. My eyes are rolling in the back of my head. Yeah, as we just detailed, gasoline is one in $10 of card spending for households earning less than $50,000. So that's nonsense. I also think, go ahead. People don't understand surveys. That's one of the hardest parts is like people will say they live paycheck to paycheck after giving to their 401k and their kids' 529 plan and putting money like in their savings account and they go, I have nothing left. It's like, yeah, you should have nothing left then because you're saving some of your money.

You save and you spend. That's all you can do with your money. But that is not the same thing. This was like buried in the article and this is really the truth of it. They said that living paycheck to paycheck doesn't necessarily mean hardship. Lending Club, who I guess did the survey, makes the distinction between those. who can pay their bills easily and those who can't. This is the Kudigra.

Only one in ten high earners reported issues covering all their household expenses. Okay. So that's the number. It's one in ten. It's not one in three. It's one in ten. Okay? One in ten people earning a decent income are spending too much money.

One in ten. And I'm guessing part of that is not just the ability to pay their bills. When you have that much money, sometimes you spend more money too on stuff that you probably don't need. This is one of the worst. surveys in a while. Easily. It's bad. Okay, here's another, one more for consumer excess saving. This is in Wells Fargo, which Miles Udlin, back at Yale Finance, by the way. He's back giving takes. Good to have him back. From Wells Fargo estimated that consumers have $2.3 trillion of

excess savings, savings above and beyond what pre-pandemic trends showed, people were stocking away. I'm surprised that number hasn't come down more. Do you think that's just because it's really wealthy people that are still sitting on and doing just fine? Like, that huge bump up, I would assumed with inflation and everything that that would be coming down precipitously. And it hasn't really falling yet. It's just kind of leveled out. Not good. Yeah, it's kind of crazy. All right. Here's something that we nailed. And this wasn't a hard one that by now, pay later would come into problems. And they have. And now it sounds like Apple is just going to destroy them potentially. What does Apple's buy now pay later deal look like? I don't really know. But think about how much

money gets spent on the clicky thing. By the way, did you figure out how to use this machine? You click and you pay it. Chick-fil-A now, okay? Okay. So this honestly didn't really shock me at all. They said subprime consumers accounted for about 43% of shoppers who applied for payment plans or loans at retailers' checkout. But here's the thing that really matters. A firm said 3.7% of outstanding loan dollars held on the company's balance sheet were at least 30 days late. That's up from 1.4% a year earlier. That's quite a big jump. But 3.7% sounds far from a compassion. low number. That doesn't match the headline, really. Missed payments, rising interest rates,

but this business model in a 0% interest rate world still didn't make sense to me. Now with rates at 3% or 4%, it makes even less sense. It makes sense for a company like Apple potentially, but not for the other ones. I don't get it. I guess I never will. All right. Housing got unaffordable real quick. Remember, my case for housing still being affordable with rates low, that only worked when mortgage rates with 3%. Now that they're 5, Bill McBride has this housing price affordability index. It is crazy how high it was in the 80s and 70s compared to now, but now it looks like it's as high as it's been since basically 2007-ish, but also going back to like the early 90s levels. It's still, I don't know, average-ish, but I don't think that's helping anyone in any way

when they're trying to buy a house right now. I mean, this is truly not good. But finally, we're starting to see price drops. I told you, I think people are going to be more patient now. You don't feel like you have to hop in and get out bid right away. I think people with 5% mortgage rates. This is how selling a house used to be. It might take you three months to sell a house. And guess what? That's normal. Selling a house on like the first day and the first hour or something with 25

bids on it, that was not normal, nor was it healthy. The thing is, I mean, there's a margin of safety built in here, though. Like if people lower the price of their house that they're listing it for, it's still way higher than they would have got two or three years ago. I feel like there's a healthy margin of safety in here still where even if you see housing prices that are listed come down, it doesn't really matter because people have so much equity built up in their home that they have the room to do that. They have wiggle room. Apropos of nothing, I was just reminded about this, you could maybe hear some people say, well, if you're so bearish, Michael, why don't you just sell all your stocks?

That's not how I invest. First of all, I think that's like I've made that very, very, very clear. But think about just like what that does you. I think this, I just want to make the point that I think people really discount the fact that going to cash is a humongous burden, is a humongous mental burden because you become obsessed with the market and getting back in. And it just, do you agree with me? Yes. It's funny. I wrote in a blog post a few weeks ago that buy and hold is the worst investment strategy besides all the others. And a bunch of people wrote me saying, wait, are you saying that buy and hold is a terrible strategy? I don't get it. What are you saying? And I'm saying, no, it's terrible because it's no fun to deal with when you're sitting through

these periods. But if I wanted to go to cash, it would be because I have something that I'm going to spend my money on. Not because I'm afraid about the stock market. I've chosen to be a long-term investor. So that means holding through these periods. So then you get the good periods. And I don't have the psychological makeup to sit it out and wait and see what happens. And I don't think a lot of people do either. You can really wreck yourself. You can change your psychology as an investor and your risk tolerance by getting one thing right or wrong and making a huge mistake at the wrong time. Correct. And also, I mean, obviously, it could be wrong. I'm wrong all the time. I could just be very wrong. That this is it. The market discount to the future. And then if you're

right and the market does go down, so when do you buy just later for that? I just think it's a much more sensible thing to say, you know what? I just don't know. I'm going to get all the upside. I'm going to get all the downside. Let's say you sell right now and the stock market goes from being down 15 to down 30. You sell right now and you get back in then. What is the change going to be when you retire? How much is that going to add to your retirement portfolio if you nail the top and the bottom. Is that really going to help you? Or is it going to hurt you because if you nailed the top and the bottom this time, are you going to try to do it every other time in the future and then get those ones wrong? That's also the thing. How many more difficult environments are we going to

have for the rest of our lives? I don't know. Half a dozen, a dozen, more? What, you think you're going to nail them all? All it takes is, like, honestly, one bad mistake. If you sold stocks in 2008, for example, and you never got back in, you're done forever. There was this woman I worked with way back in the day. And she sold her stocks in like the summer of 2008. And she was patting herself on the back the entire year of stocks fell. And then she never got back in. And then she got back in for like two weeks. And this is like in her 401k. And then she told everyone, hey guys. And this is like late 2000. I'm getting nervous again. Stuff's going to happen. I'm going to pull out again. She pulled all her money out. And for the next three years just sat in cash because

she patted herself in the back for getting it right ones. That's the problem with timing the market like this. All right. Sorry for that. Thank you. I just thought it was very important. that's fair. This was interesting. Somebody replied to Mike Simons and who does a lot of great stuff in real estate. When are we going to see real estate commissions reduced? Real estate agents are overpaid. Ben and you and I have made this point a bunch or just know what are this. All right. I've kind of changed my tune on this, but yeah, go ahead. Okay. Why should they get a total of six percent of the largest investment most people will ever make? It's absurd. So Mike quote tweeted and said, in my humble opinion, the market has taught us that agents in general are not overpaid.

Many brokerages offer discount fees, but most consumers choose not to use them. It turns out that most consumers prefer to pay full price for the full service. Can't argue with that. That's what it is. If consumers wanted to do discount or automated, then that's what would be. You could potentially even negotiate. If you say, I have a wonderful house in a really desirable location and I think it's going to sell very fast, but I want you to handle all the paperwork and handle all the negotiation back and forth with buyers, would you take 2% instead of 3%? I bet a lot of realtor's to say, yeah, I'll do that. Just no one asks. This that surprised me. This might be fun of the numbers. I don't America produces 2 million households earning 100K every year and only 1.4 million brand new houses.

Basically, these supply demand imbalance. This is, again, one of those other stats that I never thought about, so I wouldn't know. Two million new households earn 100K every year. Is that high or low to you? Two million. Hmm. That does seem, I guess it seems just right. I don't know.

All right. What does it seem to you? One of those stats I've never thought of before. But when you compare that with like the housing thing, the supply imbalance makes more sense. All right, let's skip this speculators section. We can get to the section just so we're running along. Although I do want to say, full disclosure, I tell the good and the bad, most of the bad. I bought T.R.K. on Thursday, which is the double levered arc product.

We're listening to the compound and friends on Saturday, maybe, and listening to that and cringing. Because you know what? I just thought that a lot of the names, a lot of those high-bated names, they stopped going down, basically. It was long and the short of it. And then Microsoft guided down, the stock closed iron on the day, the market It ripped. I didn't think that anybody wanted to be in cash going to the weekend. And then Friday morning, a little fellow named Elon Musk said he has a very bad feeling, a super bad feeling, I'm sorry, a super bad feeling about the economy. Is that like pre-releasing without pre-releasing, basically? I didn't see one good, super bad joke from that. There was a lot of bad ones, no good ones. What do you mean? Oh, super bad. Got it got it. Now, do you think now that Elon Musk is potentially backing out on Twitter, that free speech is going to be illegal again? So should I receive? send my takes on IPAs in Star Wars since free speech is once again going to be legal. Now that Elon Musk is not buying Twitter. I'm a little concerned. Too late. They're out there. So anyway, I sold 75% at the open. Listen, that's it. I'm not playing games here. Am I playing games? No, I'm not. Day trading is hard. I got a DM from someone the other day saying, hey, my wife and I put money in our 401k and our IRAs and

stuff. Would you be okay with signing off on me putting a little bit of money in triple lever NASDAQ now that it's down 70% or whatever. And the response is, listen, if you want to carve out a piece of your portfolio that's for speculation like this, have at it. Just be intelligent about what piece you're carving out for speculation and understand ahead of time, that's what this is for. And then do it in a reasonable, responsible way, then sure, if you want to do that, have at it. And that's what you're doing. Credit to me. Wait, so what is it, a double or triple arc you were doing? It's double. So it fell 10%. You don't take a loss until you sell it, but yeah, I took a loss. still holding a quarter. Probably going to sell the rest of it today. Unless, unless, unless. All right,

let's move on to crypto. I just want to say, Ben, you told me to listen to the Rick Edelman podcast with Christine Benz and Jeffrey Battack. I thought that the way that he described crypto, not necessarily in the investment side, because that actually surprised me. And the surprise was that he's quite bullish on the future of crypto being internet money and the future of digital commerce, which definitely resonates with me. And then he said, but only one percent of your portfolio. And listen, I am definitely more in the less is more camp. for most people, but only 1% kind of seems like why bother, but his point was that even a 1% would have made a difference. Anyway, whatever. I thought that was worth listening to. But we haven't

spoken about crypto in a while. I think it's been nine straight weeks of low returns. Same thing to the stock market, though. One of the things I keep thinking about, so there was a story about how Solana suffered an outage and it's down 85%. And it's not Salana in particular that I'm picking on here, but doesn't it seem like in an incentive-based system like crypto? I'm stating the obvious here. All of this stuff just makes so much more. sense in a bull market. That seems frankly obvious, but it's a faith-based asset for the most part. But crypto more than anything else just makes 10 times more sense in all the narratives and all the stories when we're in a bull market. And then it makes way less sense when we're in a bare market.

And I think that's the problem people have with it that it's so hard to wrap your head around is that all the people beating their chest and stuff, they sound so brilliant when the prices are up. And then they sound like morons when the prices are down. When it's somewhere in the middle both ways. It's not like these people were geniuses just because prices were higher. But worse, what's dragging a lot of the people out in terms of like the quote haters that aren't even long that just spend all day bashing. It's like, listen, when you tell nonbelievers have fun staying poor, what do you expect is going to happen on the other side? It's hard to feel bad for the people that are eating some humble pie. But all right, so there was a bipartisan crypto bill, at least

that not passed. This is like we've got, I don't know, people say maybe 2023, but at least we've got steps towards something in terms of what the CFTC is going to regulate. what the SEC is going to regulate? Are they going to be commodities versus securities? What are the path looks like for stable coins? This part was interesting. I thought this is from CoinDesk. In light of the recent dramatic collapse of Terra, one closely examined aspect of the bill will be its move toward 100% reserve asset type and detailed disclosure requirements for all payment stable coin issuers. There would be a new framework for banks and credit unions to issue stable coins, but issuers would not have to become depository institution. So Ben, you said a lot of this

makes more sensible market. Obviously, obviously, the speculation, Yeah, it doesn't make sense when prices are going down. You feel like, oh, my God, we were such idiots or they were such idiots or whatever. The digital commerce part of it, the internet for money part of it, I don't want to say it seems inevitable because, of course, this entire experiment can completely collapse. But my belief in terms of what the future might look like, I still think that there's a future for this. Obviously, it could be very wrong. We'll find out. In terms of like how some of the speculation looks bad. I still think like the most bullish case that I've heard over time is that every time we have

one of these crypto winters, it doesn't die. I honestly think that's something you can hang your hat on. We saw this brutal tweet thread. Somebody on Twitter, Uncle is the handle Uncle something. He tweeted, game over for Uncle, a threat on how I went from Crypto Millionaire to broken six months due to leverage, a gambling addiction, and an accelerating negative spiral. Below is a full series of liquidation mails over the last six months. Lost my last hand yesterday.

Did you read this one? No, no. There's a lot like this. I guess kudos for sharing here, but honestly, I think the path to getting somewhere matters more than anything. So let's say, like, you were up $5 million in crypto, and now you're down to 500, but you started with 100 or something. So turning 100 into 5, 100,000 sounds great. That is truly unimaginable. You could think about that. It sounds pretty, but if that was you, that's truly unimaginable. It really is. Even if you're still up on whatever your investment was,

if you have that higher watermark you're comparing yourself to, you're always going to compare your returns to that mark. And if you never get back there, I can't imagine. Oh, that's tough. This person lays it out. I could have done this. I could have done that. And now it's all gone. So Gemini is laying off 10% of its staff, I think. Was that right? Yes. Coinbase is doing the same thing. By the way, they put out a blog post on this. And at the beginning of the blog post, they did a TLDR, which seems like a little bad taste when you're talking about laying off thousands of people. I don't think we needed a TLDR for we're laying off a bunch of people. Not to nitpick, but it's not thousands of people. But we did discuss

that when they announced earnings that their hiring was out of control. and their stock-based comp was completely unhinged. But they're taking back a lot of offers and allegedly even like interns and not great. That's not a great look to say we offered you a job now, sorry. We would love to hear an update from the person who was deciding between a job at Coinbase and the Fed when they talked to one of our listener mailbags and decided on Coinbase. I'd just be curious to hear how things are going. But wait, Ben, we told them to go to Coinbase. I think we did. I know we did. Which I still think makes sense. So our friend, my beloved Pachy McCormick, got absolutely dragged all over the internet.

And I feel like I took the L in solidarity with him because the issue was they were talking about like use cases. And obviously that's like the big thing that non-believers would point to and absolutely fair criticism. And this person asked Pachie about give us one use case. And Packy happened to mention title insurance. And the other person on the other side of the debate was like, okay, but then and then and then. And Paki...

And once you start pulling on a threat, the story kind of blows up a little. The reason why I think I took the L in solidarity, because the example that he gave was title insurance. Your favorite go-to. Remember, the guy from Doma totally debunked that saying title insurance is never going in the blockchain, basically. He said it's too hard. Now, in Paki's defense, not that he needs it, I'm a Paki defender, he came out the next day with a tweet thread in defense of him.

And it wasn't like nonsense blaming somebody, whatever. He owned it. All credit to him. Yeah, credit to him. Because he got annihilated. And unfortunately, when you have a big platform like him, more people come after you. And so other people could say stuff that people could take out of context or say it's a bad take. I've been on the receiving end of it, not quite that bad.

But I know what that feels like. It's definitely not even a little bit of fun. It actually sucks quite a bit. So he put out a thread in response, which was graceful and elegant and just pure class. So Team Packy to the end. Amen. So anyway, that's one of the things that allows. of people are still looking for. And is it possible to separate the fact that I think just digital

commerce of the internet is going to be massive? Could you be like super bullish on that and not bullish on the price of crypto? It's hard to separate the two. I think the other thing you could say is isn't the best use case going to be just financial markets and making them better and more efficient? And it's not going to create a new Facebook. It's not going to create a new Twitter. It's not going to replace all of Web 2. It's just going to be different real. for the financial system. Yeah. Financial system's pretty darn big.

Wouldn't that be enough to say without understanding what it could be in terms of what it's going to replace, that that's part of it? Let's give a real world example. And some people might roll their eyes at this, but I thought that this is interesting. Not that this is going to happen, but just a brain exercise for what tokens could look like. So this is from ARCA. They run a crypto hedge fund. And they use Netflix as an example.

Talking about like digital commerce, what could a Netflix token look like? So they said, and bear with me, this is quite a bit, but of the 100% of the tokens issued, this is what the distribution could look like in terms of where those tokens go. Say 30% retained by Netflix for future issuance, hell doesn't add it on the balance sheet, okay, 10% given away to Netflix employees for employee alignment, 40% sold to Netflix's plans, customers, and shareholders who want to profit off of Netflix's success or simply lock in current subscription fees before price hikes. And then 10% given away for free to all Netflix subscribers.

And this is the interesting part, based on how long they've been members as a reward for sticky customer usage. And I actually think that's 50, that's only 90%, but whatever. By the way, I've been a Netflix subscriber for since back to the DVD days, so I'd get a lot of these. Same. I'm in for this. What's the point of all this?

20%. they propose that 20% of all Netflix subscriber revenue gets distributed to all current Netflix token holders who use the tokens as a means of payment for the service. So, Netflix token holders can receive discounts on Netflix subscriptions if they pay using the token. They can incentivize longer-term customer payment plans and upfront purchases of the Netflix token by setting in advance future subscription price hikes and encouraging customers to pay in advance to lock in prices. So, for example, a 10% discount on monthly subscription fees if you pay with the token, a 20% discount on an annual subscription or a 30% discount on a three-year subscription. What could you do with this token?

Well, you could also get exclusive access to content, sneak peaks, et cetera. And then they end with as token ownership becomes more common in society, Netflix could solve its subscription sharing issues by only allowing you to log into Netflix if you own the token, which is obviously this is all very difficult to implement and Netflix is not going to do this. but just the point of incentivizing customers to do things that you can't do without a token. I guess you could say, well, why do you need the token to do this? Well, because if you're using the token to pay for prescription, you can't pay with your shares. This whole example is way too complicated. Here's a simple thing. You do a token so people can't share their password anymore.

Fine. That works too. Netflix is worried about that. Boom. I just solved their password issues. There you got. But I guess the thing is like, why do you need a token for this? because you can't do this with shares.

Now, listen, I'm sure there are a million holes that can be poked into this, but just open your mind a little bit. And please, internet, do not drag me. I was going to poke some holes. I'm going to lay off. There's too many to poke, but it's a good thought exercise. I am merely a messenger. It's a thought exercise.

And anyway, I guess, so the question would be, at what point do we say, all right, already, it's been X years. Where are we? What do you think is a fair marker? I'm going to say, I'll give it three years before I say, all right, I'm jumping off the train. Yes. If we're still talking about like the blockchain could do this, tokens could do this. It's enough of that. I agree in like by like 20, 25. How about this? We're still having those conversations. Remind me of this in three years. Then I'm out.

Fair. So anyway, last thing, less thing, where do I stand out that my opinion matters? But I never said this on the podcast because I wouldn't talk like this in public. But I was quite bullish on the price of Bitcoin. I thought that when it went to like 65 or 70 that or 1 to 100,000 was likely. Obviously, could not have been more wrong on that. So I am still bullish long term, but in the short term, these are risk assets, get non-correlated my ass. It's very difficult to have liquidity being removed from the system, to have a sort of glass-half outlook on the economy and risk assets, and then be bullish on Bitcoin. I don't see how you can do that. It's still technically like a startup asset. It's not that old. So the fact that it's crashing,

it makes a lot of sense. But you're right, 100K made more sense when it was at 65. I was in that camp too, I think. It could have happened. Okay. MBA sponsorship revenue rose 12 and a half percent during the 2021, 2021, 2022 season to a record $1.64 billion. That's up from 90 percent. That's up 90 percent from five years ago. I think a lot of that is the little patches on their jerseys. They all had sponsorships on their jerseys now. I'll tell you. Crypto is responsible for 70 percent of the new money in the NBA. The NBA fleece those crypto billionaires, didn't they? How crazy is that? Wow. Maybe that's why Cuban was bullish on Doge. Yeah. They spent more than 130,

million dollars on NBA sponsorship this season. So crypto was 43rd biggest sponsor in the NBA to now it's second. They're behind only technology. So where do all those crypto fees go? The NBA and a conference in Miami every 10 days. Does it not feel like there's an ETF or Bitcoin conference every 10 days in Miami? Like, why don't they just put them all into one instead of doing one every other week? Yeah. One more survey. 83%. The question was, would you describe the state of the nation's economy these days as excellent or good or poor or not good. And Ben, without looking, what do you think? Of course, poor or not good.

83% described the state of the economy as poor or not so good. What if you said just, it's okay? That's me. It's okay right now. 35% said they aren't satisfied at all with their financial situation. That was the highest level of dissatisfaction since they began asking questions in 1972. The funny thing is, there's a lot of people, especially in the finance world, who are basically rooting for recession right now.

Do you think that these kind of surveys are going to improve if we go into recession? Of course not. That's going to make things worse for so many people. This is no joke. This is some grim shit. 27% of respondents said they have a good chance of improving their standard of living, a 20-point drop from last year. That's really bad.

Unironically, and all can I decide, this is not good. Counterpoint, it's a thousand people they surveyed who probably haven't put a lot of thought into this. All right. Remember last week we talked about the question mark with X. exclamation point next to it. Do you know what it's called? Mm-mm. In a taro bang. Someone sent me this.

I did not know that. You want to do the CFA stuff or not? Basically, just on the CFA stuff. Demand is falling off the cliff. All right. Not surprising. Okay. So people came into their top gun call signs we talked about last week.

Mostly for you. Batman, the bald eagle. Nice man. Because you always do the stupid 69 jokes. Someone said Twister for me because I had like a twist ice cream cone. Someone said CIMA for you, confident in my assertion. So that was pretty good. Duncan is the wizard, I guess.

and then faceblower for you. Face blower. I still think Batman's probably the best one for you. So Top Gun, Word of Mouth is helping. So the studio is projected to earn like $86 million through Sunday, a stunning 33% dive from its $124 million three-day opening, a soft decline that would likely be a surperative achievement marking, the smallest drop in domestic box office history for filling that open $100 million.

I have not heard one even person try to go against the grain and say this wasn't good. Every person I've talked to, the word of mouth on this is so good. And before going into it, I did not want to spoil anything. So I didn't read anything on Top Gun. I tried to say what all I saw was people say I loved it. And so if you're one of those people that wants to go in blind, stop listening now. I'm not going to, like, spoil it, but I'm going to give some of my favorite things.

This was one of the greatest movie experiences of my life. I agree. Part of it was someone for you who didn't love the first one, which, by the way, I watched the original after watching the new one, and the original still holds up. It's the last half hour of the movie, blew it out of the water. The new one, the last half hour is just like intent. There was probably four times in this. movie that I got a little dusty. I'm not going to lie. When they started showing like Goose's

pictures in the goose flashbacks and stuff, I'm not going to lie. That might have been the first time I ever cried in a movie. The original one, Goose died. In the original, I'm sorry. I don't know. Seven probably. But there was so many great things. First of all, Tom Cruise is the best movie started in history and there isn't a close second place. That was already cemented, but this was his Jordan shot to beat the jazz in the last 10 seconds. This was his coup de grace to use a year term. I think this is probably one of the best blockbusters of all time, like summer blockbusters. Not like the best movie of all time, but best blockbusters. One of the greatest parts about it was like there was no green screen CGI BS.

I think one of the reasons people like the Marvel movie so much is because it reminds them of a video game and people love video games. But the fact that this was so real was awesome to me. One of the thing, I think this reminded me that we just haven't had many good movies in the last decade. And it's like, oh, this is what a movie is supposed to be. We haven't had a blockbuster outside of Jurassic Park or Marvel. True. Do you think this is Tom Cruise saved the movie industry? Or is this like the last hurrah and we're not going to get any of this anymore? No, not at all. This is not the bottom. Which one? This is not the bottom. Okay. My worry is like this was his exclamation point. But then we're just going to go back to doing all the Marvel stuff. And those are the only blockbusters we get anymore. This is an exclamation point. Question mark. Exclamation point. True. Here's some of the things from the original that I loved. First of all, the music, when the music dropped, when Tom Cruise is on the motorcycle at the beginning.

with a big goofy smile on his face. The bar scene was great. The old Maverick helmet. They were drinking Bud Heavis like in the original, which, by the way. You know what else? Holds up his abs. Holy moly. He still looks good.

The hangman as Ice Man, that character. So that guy, Glenn Powell is his name, the guy who plays Hangman. I watched him and everybody wants some. That's the Richard Linklider one. He was very good. He stole that movie. It's like one of my favorite party college movies that's underrated. I think this guy could be the next Bradley Cooper.

I took a starter position in him after everybody wants some. Now I'm buying up all available shares. I think this guy is the next Brad the Cooper light. That's what I got. By the way, I'm going to see it again. That's how much I liked it. In the theaters? By the way, so this is my first theater experience since pre-pandemic.

I had never been in one of those Dolby surround ones where they would start the planes and I could feel it beneath my seat. It was so cool. Oh, my God. This is one of those where I don't want to be that guy, but you have to see this in the theater. You have to. There was an article in the Hollywood report about Netflix, which is now sounding like every other tech company. There's a quote, this tendency to do anything to attract talent and giving them

carte blanche is going away. This era seems to be marked by one idea discipline. There's something different to startup. I know that's Netflix not a startup, but they looked at the most viewed Netflix movies recently. Red Notice, the Adam Project, don't look up. The Mitchell versus machines. The two Ryan Reynolds ones at the top. Red notice was okay. And the Christmas Chronicles too. It's just garbage. And I was thinking about this when I was, oh, watching Barry. When I was watching Barry, which by the way is one of the best shows on TV, one of the characters is an actor who has shows be made and her show got canceled because of the algorithm. Yeah, that was a really good one. She said to somebody, that's not writing, that's a math equation. And the algorithm,

Netflix, like, really, I don't want to say it ruined everything. It's maybe hyperbole, but is it? Barry is a high quality show. Netflix has nothing like that. It's just quantity. It's just junk, junk, junk, whereas, for example, Barry on HBO is incredible. I I think it's my favorite show right now. We own this city. Did you watch that yet? I'm in the process, three episodes in. We Own The City is a six-episode miniseries.

It's by the guys that did The Wire. There's always such a big gap between the quality of HBO and pretty much everything else. Duncan says Ozark. Also, the Queen, the Royal Family one is a pretty high-quality one, but it's few and far between. Fine. My point is, for every Ozark, there's 97 other pieces of junk. I agree. By the way, we own this city, first two episodes are a little slow.

It's slow. It's slow. Little slow. It's slow. First two were tough, but it picks up hard. I'm still in, but it's slow. Hey, you know what the shirt reminds me of? I actually was thinking about this. What's that? I watched cocktail during the pandemic for the first time, and the pandemic was so freaking

weird or the quarantine, because that took me out of the cold. That, like, brought me to paradise. Well, I think TC single-handedly saved movie theaters for me because we went back again on Sunday with my kids and took him to go see Sonic 2 because my twins that are five years old had never been to a movie theater

which by the way ran into an animal spirits listener there taking his kids as well All right so I just wanted to say I don't know why I don't know why I decided to This has been on my list for like five years

I watched Philadelphia You ever see that movie? It's a great movie It's a great movie And Tom Hanks won the Academy Award for Best Actor And I gotta be honest

Denzel was better Yeah he was Tom Hacks was good but Denzel was great. And he wasn't, I don't even think he was nominated. That was Ashonda. So anyway, I was looking at Tom Hacks' IMDB. Listen to this run that he went on.

Okay, 1992. This is just 1992 to 1995. A league of their own, sleepless in Seattle, Philadelphia, Fares Gump, Apollo 13, and Toy Story. Holy shit. By the way, Tom Hanks' run in the 90s, makes Tom Cruise's run over 30 years even more impressive, because Hanks has completely fallen off since.

He hasn't had a great movie in a long time. Yeah, recently it's not great. Although I would say DiCaprio is a close second, but Tom Cruise is obviously not the best actor. He's probably the best movie star. I got goosebumps in Top Gun at least four times. Honestly, some of the old stuff from the first movie, I know that you didn't like appreciate some of that stuff,

but I loved it. One last thing. So I was watching episode three of Obi-Wan and not really a spoiler, but Darth Vader's in it. And I was thinking, like, how did they do that voice? Because I thought James L. Jones passed away. Not only did he not pass away, he plays Darth Vader. Does he really?

I didn't know that either. It's incredible. He did look like he was about 70 years old, even back in some of the buoys he was in back then. I thought he was 70 in Field of Dreams. Do you like the show yet or not? Obi-1. I like it. I don't love it.

He's 91 and still doing Darth Vader. He's incredible. Oh, my gosh. Wow. All right. We went long, but we had to go deep on Top Gun today. I forgot to give a warning before the show started. Our doc was 37 pages this week.

We had a lot of stuff to go on. So, I'm just telling you. Top Gun is on Amazon Prime right now, the original. I watched it. I know. Just watched it a two weeks ago. Trust me, it still holds up. I'm sorry.

It's amazing how many quotes from that movie I used throughout my life for years and years. Can I tell you this morning, 20 minutes before I got up, I started watching Days of Thunder. Okay, which is Top Gun on the road. All right. So far, so good. I was expecting Top Gun Light. but I like it so far. Anyway, what do we learn, Ben?

We're not in a recession, but we might be going into one or we might not be. The stock market might not or might not be overreacting. Good news might be bad, but... Crypto might turn into something, but also it might not. Hawaiian shirts look good. That's what we learned. I apologize for all the fencing on this episode, but these are uncertain times. They are.

It's difficult. Shoot us an email, Animal Spiritspot at gmail.com. We'll see you next time. Thank you. Thank you. Thank you. Thank you.