Animal Spirits Podcast - Is a 50 Year Mortgage a Good Idea? (EP. 438)

Episode Date: November 12, 2025

On episode 438 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠��⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss the problem with the K-shaped economy narrative, are young people screwed, the benefits of bubbles, the rate cutting cycle, OpenAI, Las Vegas, how to fix the housing market, restaurant stocks are getting killed, the degen economy and more. Today's show is brought to you by Xtrackers by DWS Find out more at https://xtrackers.com Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's show is brought to you by X-Trackers by DWS. Imagine harnessing the power of global transformation investing in artificial intelligence, critical technologies, semiconductors, and green energy. With X-Trackers' innovative thematic lineup, you gain access to the ETS that target these transformative sectors. It's more than investing. It's aligning with the innovations that are shaping tomorrow. Whether you're a seasoned investor or just starting out, X-Trackers makes exploring new

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opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. I was thinking about this during our episode last week, how when we're talking about the AI, is it a bubble, is it not a bubble, will a pop, won't a pop. And we're giving, we're providing nuance. because markets aren't black and white. Of course, I don't know.

You don't know. Nobody can see the future. But I was thinking about it from the point of view of the audience. And I think the audience must absolutely hate it. Because if you're listening to somebody talk about a basketball game, a football game, and they're talking about it like beforehand, well, on the one hand, like Daniel Jones is playing really well. But on the other hand, this defense, blah, blah, stop, just who's going to win?

I want to know who's going to win. I'm betting. Tell me who's going to win. And I think when you're consuming content, you want to be able to at least point. to somebody and say, I'm so glad I listened to that guy because he, like, got me there or that asshole, I can't believe. I can't believe it. Like, so people need a scapegoat or somebody to, like, root for.

So I'll do it, Ben, okay? Hedges off. I think that this AI trend takes the S&P 500 to 10,000, obviously not in a straight line. There's the hedge. There will be corrections. I do expect it to 20% pullback before we. get there. But that's it. And hey, if I'm wrong, I'm sorry. If this is a bubble that pops tomorrow, my bad. I will admit it. I didn't see it. I saw the arguments for it, but I'm on the

other side. I think we're going to 10,000. I could see you going this way because of our show that we did in Vegas. You were getting more bullish the further along we went on the show. And that's going to be released, I think, Saturday. Here's the thing, though, there are enough assholes out there who will give you extreme predictions. Most people need a Grand Rapids Hedge. I think that's what they come to us for. If I'm putting probability, and I'm a probabilities guy,

I feel like it's rarely you should say always and never in the markets. I would lean more towards this thing is going to get way stupider and insane than it would like, oh, this is going to roll over tomorrow. That'd be my, I can't imagine we haven't seen this thing get,

if it's going to be one of these things and AI is going to be a transformative as people say it is, this has to get crazier. It has to... Yeah, you ain't seen nothing that. I mean, I know there's just one stop. Is meta flat for the year?

Here's the thing. I think... What is this? A bubble for ants? I think... You stole that from me. Did you see my tweet? That was a pretty good one.

I said meta, Amazon, four out of the seven mag-7s. I can't remember which ones are up less than 10% this year. And my coming on Twitter was... Is this a bubble for ants? I think you have to have... I might have stole it from you.

I don't remember the tweet, but it's certainly possible. I mean, it's not like it's that original. Right. Here's the thing. I feel like everyone is assuming that the market is guilty until proven innocent, and you have to assume the market is innocent until proven guilty. I think that's the problem people have had this whole cycle is assuming that it's guilty until proven innocent, and it's been the opposite.

Yeah. Now, and it's so easy. There's so many bubble anecdotes of like, come on, guys, how do you not see it? Like, the Sam Altman stuff last week, right? Like, how do you not see that? that there is some chicanery going on here. And by the way, if there's a bubble, that's the bubble. It's open AI.

Yes, they'd be the main culprit, which is kind of funny because they're not public. Whatever, all the public companies are tied to them. Okay. So getting back to what the audience likes and doesn't like, here's a segue, Ben. This is called a setup, I think. We haven't, I think we have a decent idea

who's in our audience, but like, not really. I think we just say, like, oh, we have advisors, We have like DIYers. We have sort of everyone. All right. We have a lot of just normal people, too, that just have jobs outside of finance. Yeah.

So we are going to be conducting an audience survey. We would love to hear from you. We will put the link in the show notes. I'm very curious. I don't know. Once's the last time we've done this. It might have been for you. It's been a while.

It's been a while. So please, if you can't help us out, obviously it's anonymous. We're not going to bother you. We're not selling your data. But we'd love to. If we've ever done anything for you, do this for us. How's that? There we go. Also, nice sweater today. Good sweater game.

Thank you. This is a marine layer sweater. I can tell. That had to be. It's quite comfort. You know what's nice about it? Actually, you know what? Let's do this for a second. So it's very like warm and soft on the outside, but it doesn't, it has different material on the inside. So it's not like sticky. But I am, as you know, Ben, I am a sweater. I know I'm wearing a sweater. But I mean, I sweat. I am one of those people that sweat. You glisten. Yeah. And so I, as you know.

I'm very particular about my undershirts. However, I'm not actually even. And this is the ridiculousness of myself. And I know it feels weird to talk about myself in the fourth person. But I am very particular about what I wear underneath my shirts. But guess what? Here's a paradox. I don't have any undershirts.

I just wear T-shirts underneath like a complete moron. And I don't know what's taking me so long to find undershirts that actually fit and are the right material don't make me sweat too much because there's like a type of fabric that when they touch my skin it's over sweating immediately all right like a breathable thing okay so long what am i talking about here uh this must have been an instagram ad that got me Tommy John undershirts holy moly my life I will never not wear Tommy John under shirt unless something dramatic happens I'm loading the boat You're a new guy.

New socks, new undershirts, man. Well, but these are the things that matter. What took me so long? I'm wearing, like, old Gap shirts that are, like, seven years old as, like, I'll do and then you could, like, see the, you could see the, the, what is this, the neckline? I mean, it's all Tommy Johns. Awesome. Marine Layer, they owe me some free clothes.

You don't how many people I've said to Marine Layer because of the stuff I wear on the show to them? Hey, Ben, what sweater are you wearing? Hey, here's a link to Marine Layer. I've, it's great stuff. I'm not saying they need to, I'm not saying they need to, I'm not saying they probably just need to send me some free clothes. That's all.

I don't ask for much. All right. I'm ready to go hard of the paint today because I'm sick of the negative narratives. I'm so sick of them. It just, it beats me down. Like the negativity, a couple of, a couple weeks ago this was you. You said, you're sick of the negativity. I am too. Okay. Take the, take the baton. I'm on with it, Ben. All right. I'm sick of the K-shaped stuff. I'm sick of it. Okay. Let's look at the facts. This is from the Wall Street Journal. Feeling great about the economy? Question mark, you must own stocks. Investors's rosy feelings about their stock market gains are powering spending, but it's a different story everywhere else. Okay, sure. They show this consumer sentiment. and there's like a tiny little difference between the biggest stockholders

and all stockholders and non-stock holders. It's like this much, okay? Consumer sentiment is crashing for people who don't own stocks. Okay, fine. They say like, it's a different story for everyone also doesn't own stocks. I get it.

And then they show that the fact that, you know, the percentage of people held by the top 20% of earners is 87% of stocks, right? They show this guy who, this is kind of funny. This guy sold some of his stocks to buy a Porsche.

Remember we had the Porsche conversation? Duncan, guess how much he bought his Porsche for? $22,000 for 1999. We were saying it's impossible to find a Porsche for around $20,000. It happened. This guy said, I made a bunch of money stocks. I bought a Porsche. Whatever.

Here's the thing. 62% of American households own stocks. This number was way lower in the past. A majority of American households own stocks. Guess what? If people are feeling better because of the stock market, most people own stocks. I'm so glad to hear you say this. Look at the bottom 50% how much they own in stocks.

This thing has quadrupled since 2020. The bottom 50%, okay? Own way more in stocks. Do the top 10% own a lot of stocks? Yeah, they do. Do more people than ever before own stocks? Yes, they do. Peter Thiel has this thing.

You saw this email that was going on from Peter Thiel from 2020? No. I feel like this almost has to be fake, but Peter Thiel sent an email. There was a story about this in the free press. He just sent it to Mark Zuckerberg and Mark Andreessen and Cheryl Sandberg. and here's what he says. I would be the last person to advocate for socialism, but when 70% of millennials say they are pro-socialists,

we need to do better than simply dismiss them by saying that they are stupid or entitled or brainwash. We should try to understand why. And from the perspective of a broken generational compact, there seems to be a pretty straightforward answer to you, namely that when one has too much student debtor, if housing is too unaffordable, then one will have negative capital for a long time

and or find it very hard to start accumulating capital in the form of real estate. And if one has no stake in the capitalist system, then one may well turn against it. which actually, like, that's a really good point. Yeah. It's a really good point. Here's the problem with this idea.

It's totally vibes-based. He's basing this on social media and vibes, not data. If you look at the data, look at this. Gen Zers, millennials, are less likely to own homes than their parents at the same age, but look at how much less likely they are. They're like, it's a, Gen Z is still growing in terms of homeownership at their age. At age 27, 33% of Gen U.S. own a home. For millennials, it was roughly the same.

for Gen Z or Gen X and Baby Boomer is a little higher, okay? It was like 40%. I'm with you, and I love that you're cooking because I'm on the same exact. Not only we're on the same page, Ben, we're on the same word, okay? Because I saw you put this in the dock and I was about to be like, dude, what are you talking about? The gap between these lines is nothing. So I'm so glad that we're saying the same thing here because I was going to make the

same point. However, I do think this particular chart is, I throw this out because we don't, two things. Number one, I've said this a million times. Nobody compares themselves with a prior generation and feels either better or worse. Like, that's not relevant. What's relevant is that there is an affordability crisis right now for young people. They're just there.

So this chart is bullshit, but keep going. Okay. You just took some of the thunder off of this, but okay, Gen Z. No, no, keep going. Okay. On an inflation-adjusted basis, Gen Z is richer than any other cohort at this stage of their life. Way richer than millennials, way richer than Gen X, baby women more silent generation. They have way more money on an inflation-adjusted basis.

value of equities held by people under 40, you shared this with me a couple weeks ago from Citadel, is up 300% since 2020. This is people under 40 own 300% more stocks. Okay? So my point is, yes, there are some bad things. And obviously, the cost of living, the student debt thing, the cost of living, the affordability of housing, that has to be weighing on people. But I feel like we're totally brushing aside all these other positives as well. And I think the problem is there, and I've mentioned this before, there's probably greater inequality among young people than that has ever been before. And if you see that there are young people that are doing well and they bought a house and they can afford it and they got a 3% mortgage and you didn't, you are

so pissed off. And I totally understand that. But I don't just want to say like everyone is screwed. And I also think to the young people think, I just have more faith in them than any other. I know people think social media cooked their brains and they'll never be able to own a house and they're going to live in their parents' basement forever. I just don't accept that. this is the most educated, tech-savvy generation we've ever had. I think they're going to figure it out. I totally agree with you, Ben. And yes, there is inequality within young people like there was everywhere.

We spoke a couple of weeks ago about how Gen Z cardholders at American Express are their fastest growing spenders of 309% year-over-year, make up an increasingly larger percentage of the PID that's spending. I was thinking about this yesterday, or two days ago, as Josh and I were at FedEx Field. What a dump. Almost makes MetLife Stadium look habitable. It's not. Those are the two were stadiums in the NFL. I can't believe you guys went to a Lions game without me. They looked pretty good, right?

Great. Great team. You know, when they stack Leporta and Amunra and Gibbs is in the backfield, it's just impossible. Yeah, they have so many weapons, yeah. And Jamo on the other side, forget about it. It's not fair.

It's a really fun team to root for. So about a third maybe of the fans there from Detroit, like an incredible number to the point that they drowned out the commanders fans dramatically, like audibly, dramatically. And I said to Josh, dude, this is what I'm talking about. You think all of these are like descendants of Henry Ford? These are all a deck of millionaires that are traveling. Come on.

Is Detroit a coastal elite city? Like, I just don't buy the narratives. And obviously, narratives matter. I think about how much money it costs to fly to D.C., staying at a hundred go to the game, tailgate, tickets to the game, food of the game. That's a really expensive weekend. There was 10 to 15,000 people from Detroit there. So Howard Marks wrote recently, he waited on private credit. And he said, one of the most prominent characteristics of the financial markets that I detected over the years is their tendency to obsess over a single topic at a

given point in time. The topic eventually changes to another. But before it does, It's often the thing people want to discuss to the near exclusion of everything else. So he's talking about private credit. But so, of course, it is private credit. It is tech. But the other thing, the thing that we're talking about right now is the case-shaped economy. The journalists can't get enough of it. Obviously, it has political ramifications.

It's real. It's not made up. But they are pounding it into the pavement. There was an article over the weekend, wealthy travelers are splurging on luxury hotels like never before. So it's showing the breakdown between Cabin and Coach and Premier. I'm over it. I'm not reading the article. I get it.

Rich people are winning. Right. When have rich people not won, though? When has that ever been the case that rich people haven't been the winners in society? Right. But I think it's having really gnarly effects on how we perceive everything because things are fine. And I'm not, I know broken, broken arrow here again, I'm not, we're not minimizing the challenges that the bottom 10% have.

but when you look at the data so we're basically done with earnings season but here's the thing here's the thing about the consumerism aspect of materialism this is why social media is so bad for us

because we're seeing stuff where we weren't supposed to see and you I think everyone the hard part for a lot of people is there are so many luxuries that turned into necessities now and that's what makes life so much more expensive

it's not just student debt and housing it's phones and internet and travel and all this stuff that people didn't have in the past, that you think, like, if I don't have this, I'm not, I'm never going to get ahead or I'm not going to be living my best life. And so you, it's just, it's more expensive to live the way we live today. That's right. Life was already ridiculously expensive in 2019 for most people. And then you got the inflation. So yes, a lot of things are totally effed, for sure.

Like, no doubt, no doubt, no doubt. But we heard from earnings, earnings, we heard from companies, and they said economic, this in Bloomberg, economic slowdown mentions. are the lowest since 2007 on earnings calls. Oh, from companies? Lowest since 2007. Here's a few quotes that we pulled from the transcript. Those guys do great work. We mentioned them a bunch.

Okay. This is from the head of retail banking at PNC financial services. We were just looking at this sort of deep dive on the October numbers, okay? October. Spending is robust. And while it's a little bit stronger at the upper end, it's still actually hanging in there among lower end. customers. So that's been, frankly, given all the turbulence, perhaps a little bit surprising,

even with the government shutdown. All right, Bank of America, I just got the October data, and the money movement to spending by these consumers was up 6% versus last October. Employment remained steady. We can see that in the paychecks coming into our customer accounts. That's Bank of America. Lastly, JP Morgan Chase, when we were looking at spend trends after a relatively softer, although still pretty solid second quarter, we've seen strengthening both in confidence and that does continue into the fourth quarter. So this is, and again, I'm not minimizing how people feel. People are upset. It's in the political data. I get it. But things are, things are okay-ish. The thing that Steve Eisman said when he talked to you and

Josh about how the government spending and debt is just virtue signaling, I think there's a lot of that that goes on too. People. One hundred percent. People with money talking about the bottom 10 percent can't afford anything. It's like, dude, why do you care? Well, it's, it's a, and again, it's not like we don't care, but like the, I guess my point, Ben, you just muted yourself. Sorry, hit my keyboard. I guess the point is that I don't think that this inequality thing is ever going to get better. No, and we're just, we're fighting back against the narrative. Yes.

That only the rich people who own stocks, which is, as you mentioned, is 62%, only the rich people are doing okay and everybody else is dying. We're trying to look at this more realistic. Yeah, come on. It's not black or white. It's somewhere closer to the middle. You're right. You go to a concert with 30,000 people in a stadium. Is everyone there in the top 5%?

Right. Everyone? All right. Let's move on. Okay. I'll talk about the big tech stocks. We don't talk about them yet. Yeah, seriously.

They're not getting enough love on this episode. All right, here's a chart from Ned Davis research. The Mag 7 is now larger than, and energy, materials, consumer staples, health care, financials, utilities, and real estate. Combined. Pretty remarkable. But again, given the breakdown of all of the product lines at Apple that we spoke about last week, and you could do the same thing with Microsoft, you can break up Google, you

could do the same thing with Amazon, they are earning as much money as they, they are earning as the right to the sectors combined. I don't have that data. I'm just saying, like, it's not, it's, I'm going to guess it's about even. And guess what? They're growing 20% a year. So even though this type of chart can break one's brain, when you look at the underlying reasons, max seven earnings are up threefold.

This is from Eurian Timmer. Over the last three years, their earnings have tripled, and the share price is quadrupled, which is exactly what you would expect, by the way. But earnings have quadrupled. So these numbers are kind of insane to me. So healthcare is $5.2 trillion, okay? Invidia is essentially the same size as a health care sector. Financials is $7.5 trillion now.

So, Invidia, we're not, invidia is like a one good earnings day away from being as big as a financial sector. Holy smokes. It makes sense. It also hurts your brain to think about it. Okay. Yes, it does. And also, what would you rather own for the next three years?

XLF or Nvidia? Now, what would you rather own for the next 20 years? Maybe that's a different question. All right. We had that, this is a good thing. Like, the Mag 7 versus this field here over the next five years. What do you got? Over the next three, I take the Mag 7.

Yeah. If you said the next five to seven, you might take the... Over the next five to seven, I think I'd go the other way. All right. We had a bunch of people chime in on the Can meta or Nvidia fall 20, 20 to 30% in a day. I push back again. I push back against 30. If you said 20, dude, I would not have made a stink. I said 20 to 30 in that range. That's a huge range. That's a huge range. What is the data show? Tell me what the data

shows. Okay. So the two worst drops for meta over the last five years, it fell 26% one day. It fell 25% another day. Now, mind you, that's when at the 25% fall, Ben, the market cap is $280 billion. You're crossing your arms. Like, you just declared. Caprio with a cigarette and... No, but that's not... First of all, that's not 30. Okay, so my kids in math class were learning about rounding up recently.

If you have 26 and 25, what do you round up to? We're not rounding up. It's not a round of exercise. But also, but also, but they did that, they did that when the company was a third of the size. So I look, the worst day for Nvidia, I looked just at the 2020s. For Nvidia was negative 18.5% that in the 2020.

Because I'm just saying 30 is like an accounting scandal type of fall. But it happens to individual stocks all the time, all the time. I'm going to put Chirk Kid Matt on this. Like, how often do individual stocks fall 30%? It's not all the time, dude. It's rare. I bet you it happens three times a year. I'm making that number up, obviously. Oh, way more than that. On a single day? For an S&P 500 stock, or let's just say a mega cap stock. Now, maybe I'm moving the gold bust, but these are mega cap stocks that we're talking about. I'm thinking like Russell 1,000. I feel, I bet it's dozens in a year fall. Yeah, I'm sure. Listen, if you're, if you're a $7 billion company and you overnight,

you're teared that. I'm sure that happens all the time. Okay, so wait, you've, you want people to pound the table on the bubble thing and say yes or no. Ben Thompson asked for techery. He did this. He says, this is a bubble, plain and simple. And I think it's great because I feel like a lot of the people in tech don't want to say that it's a bubble. They want to tiptoe around it. He's saying yes, and he wrote, but he wrote about the benefits of bubbles. And so it's funny. He said, we've been, like, people have been trying to say this is, remember, Mark Cuban, I remember this one in 2015, said technology is a bubble. I don't know why that one sticks out to me in my head in CNBC.

So people have been saying this forever. But he's saying, no, no, no, no. This is obvious right now. We, this is a bubble. And he's saying, the question is, are the benefits of the bubble going to be worth it? Right. All this money we're pumping in on the other side, do we get this AI infrastructure buildout? That's the question.

Well, and a big part of that is. some of the bubbles that lead to good, healthy things for society. All bubbles aren't bad, I think was the point of the post, but specifically debt-fueled bubbles like what led to the GFC is a catastrophic crisis of epic proportions. It's possible that we get the bursting of a bubble and so long as it doesn't bring down the financial system with owner is dead.

And obviously that's a bigger part of the conversation then maybe we get out of the other side, okay. But I mean, that's like the good part about this is the banks aren't really, I mean, you could say, well, private credit and, but this is not like a financial crisis level thing. This is, this is, yeah, stocks could fall a lot, but I don't know. I still don't think that this is like a nuclear level event if and when this thing blows up. Okay, I hope not. You know, I was thinking about this, like, looking back at history, because I'm saying, like,

what would need to happen to prove this was a bubble? And I feel like once you start talking about like losses and fractions, then you know it's bad. So for example, yes, like the NASDAQ loss a third of its value. That's a serious, that's a serious decline. I don't care if it takes you back to 2023. Like that hurts. A third. Imagine your account, just close your eyes a picture of the value of your account falling by a third.

That sucks. Yeah. All right. So Derek Thompson had a great conversation with a railroad historian. By the way, Ben and I are recorded with Derek this afternoon talking about our young people screwed. So I think that'll be out this week. All right.

I feel like we never really talk about this because it's not like the most exciting topic. But in terms of the advantages that we have in this country, like, oh, it's our DNA. It's our go get her attitude. And like, yeah, that is all part of it. But simply this. So this guy's, I forget, I apologize, I forget his name. He said, by the end of the 19th century, you have a regulated infrastructure that moves across a continent.

That brings a great American advantage into play. And here's the part that I'm talking about. The great American advantage, which we have over competing economies, is an incredible wealth of resources. We did nothing to create those resources, but we literally have with oil and copper, with agriculture and soil. once the railroads can move these things effectively, we had advantages that nobody else in the world can match.

Just our natural resources is second to none. If you were to build a country from scratch, you would have 90% of it is the U.S., right? We have the coasts on the side to protect us. We have vast resources. We have fresh water. We have all these things that are like natural built-in advantages other countries would kill for.

Yeah, it's fun. talk about like our culture as the exceptionalism. And obviously, it's an option of this, but it's really our, just the land. Right. All right. So getting back to, wait a minute, one big difference between, because I studied the railroad bubble two and I wrote about it in one of my books, the biggest difference between that and because people have been making this, this comparison, is that there was so much fraud

going on back then. It was, that was literally a pump and dump scheme. All of those companies were being pumped and dump insider trading. There was no rules back then. So it was all insider trading and dumping itself off on the public. And so obviously, so that kind of thing isn't happening as much now. And there was a lot of that happening in the 20s, too, because the SEC didn't, wasn't around yet. So if you want to make historical comparisons, that's important to note that a lot of this stuff was just the wild, wild west back then.

And obviously, there's stuff going on with SPACs these days that is not completely, doesn't seem to be above board, even though it is kind of. But not like this, not like just outright, outright fraud. So last week, Josh and I were talking to Eric Jackson about how it was the week that the week that the world learned who Sam Altman was. Open AI has been in the background, all of these announcements sending stock prices soaring. I think it started with Oracle, maybe. Was that like the first gigantic holdy-shund announcement? Right. And he was on Brad Gersner's podcast. And then the CFO said a few things that didn't land well. And everybody's like, whoa, whoa, whoa, whoa. Yeah, the CFO made a comment that said, like, the government might have to backstop the financing

of data centers. And then she immediately went on LinkedIn and said, actually, I'm backtracking that, but when they said that stuff, people pounced. And I say, Open AI and Sam Altman, they're going to be the next tech villains. People are going, there are going to be a lot of people who completely hate this company. Politicians are going to jump on this because here's the, the narrative is so easy to build. Oh, yeah. Wait, wait, this company is enriching themselves and they're helping people lose jobs. Are you kidding me? Like, they're going to, Sam Allen is going to be a villain. Yes. A big group of people. Yes. Yes. And yeah, so. Whether that's right or wrong. He's like, I can't wait to go public so we could kill our short sellers. And it's like,

dude, what are you talking about? Like, huh? So anyway, um, so this, this historian said to Derek, transformative technologies are built by people who never under promise. They always overestimate the beneficial consequences of what they're doing in the short term and underestimate the costs of what they're doing. Um, he said, second, the people who hype these technologies, the people who control the companies that are seeking to master these technologies, very often do not understand the technologies themselves. They can overpromise because literally they know what they want to promise to get financing and to get money and to get profits. All right. So obviously that's happening, skipping along to the third thing. He said, these technologies virtually always become

bubbles because they take on this belief that if you're going to change the world, if this is the secret to changing the world, everybody should get it on this. The railroad, the railroads were the American stock market and the American financial market in the late 19th century. That's where the money went. All right, but you know what, you know what's different about this one than that one? When he said, like, everybody should get in on it, like they did in the late 90s, like they did in the railroads, you can't, it's not, everybody can't get in on this. It's too expensive. These data set just cost 20, what, $50 billion? Like, it's not everybody getting in on it. It's, it's the Mac 7 names. And who would you better?

trust to handle the future of our capitalist society than these companies. In terms of at least growing profits and cash flows, right? I don't have a lot of trust in the common sense of our tech leaders. I don't think that they're going to be looking out for humanity. But if you're a shareholder, then who you better trust them for sure? But look who's running, Microsoft and Meta and Google. These are very accomplished people that have steered their companies incredibly. Plus, let's be honest. A lot of these people are like psychopath or sociopaths. You read the book, The Wisdom of Psychopaths and how many people, I don't know, I think it's like 5% of all CEOs or something are literal like sociopaths or so. Like, and I'm saying

this in a, I guess, a positive and a negative way? Like, nothing is going to get in their way to stop this, right? No, I don't think so. All right. So this next segment is brought to you by Pimpco. I grabbed this chart from their advisor playbook. You can check them out over there. We'll look to this in the show notes. Obviously, there's all sorts of great resources for advisors from one of the world's largest fixed income managers. So check this out. They show today's cutting cycle in historical context. And they show where we are today, months into the cutting cycle, number of cuts, or I'm sorry, the effective, what does that say? The effective Fed fund rate change. And if you compare this to prior episodes, we're nowhere. And so we've done this.

We've done what the, or we, these companies have built this starting in what was the middle or tail end of a hiking cycle. Right. In terms of investor enthusiasm and liquidity. And we have haven't even begun to see the impacts of Fed easing and what that might mean to asset prices. Right. So looking at it's kind of interesting that like the 1984 was, it took so long to get down. But yeah, so there's a lot of dry powder here for the Fed to cut further if things should deteriorate. But I actually think that if this thing just stays pretty plateaued, that's probably better news than all of a sudden rates falling off of a cliff. I think that portends much worse news and an overreaction function of this, the economy's worse than people realize, right?

So if Fed funds settle at 3%, and let's assume that there's no emergency cuts because the economy is tanking, does that support or not support higher prices? Well, look at the two lowest cycles that they ever got. It's 2007 and 2000. So it's funny. We think that like high rates are going to be here forever now, just like low rates, we're going to be here before? Like, you really think 0% rates aren't coming back if we have a recession? I don't think so.

I'm sorry, man. I would not take that off the table. If we go into a recession. Here's the thing. So in the next three years, I said this to you and Josh the other day. Trump is already promising $2,000 tariff checks, I guess, which I think it's credits against their people's taxes.

Whatever. I don't know if it's actually going to happen. Maybe just a promise. But if we get a recession in the next three years, Do you think he's not going to just shoot bazookas everywhere of money and lower rates? And I would hope that Congress has learned their lesson. The lesson is if you throw money at a recession, it turns around pretty quick. And I think that's why.

Yeah, but hopefully the lesson should be, no, no, no, no, throw money at the economy kills everything. Because inflation is worse than recessions, as Josh wrote over the weekend. But I think once you're in a recess, we haven't had a recession in a long time. And I think once, I think the overreaction function will be really interesting to see because I just think, listen, whether you agree with this or not, we've kind of figured out, like, there's going to be a ton of unintended consequences. But you really think he's just going to let the economy slow and not throw a bunch of money at it? Well, I, I mean, listen, of course the, of course the. So I think any, this is my baseline. You wanted me to stop grant up as hedging.

Any recession we get will be very short-lived because they're going to throw everything they can at it. Whoever if is in office. is incentivized, obviously, to do whatever they can to mute the damages caused by recessions. And are these people, is this economy, is the society better equipped to do that than we were 100 years ago? Yeah, obviously. So, yeah, the market is rigged. Yes. In a good way. Thank God. And there are going to be ton of unintended consequences is because of this, but you have to live in the reality that this is probably the world we live in now, where if a recession happens, there's going to be a boatload of money thrown

at it. There always is. Act accordingly. Recently. All right. This is interesting from the FT. CapEx spending is on course outpaced cash returns to shareholders now. So they show buybacks, dividends, and then net operating cash flow.

And the capx number is close to buybacks and dividends now, which is pretty wild. And I guess it's always been closer than you think. Yeah, I would like to see the spread of this chart because so what. Right. But so this is interesting. So you mentioned earnings. U.S. companies are reporting the strongest earning to growth since 2021. So companies are still making plenty of money, right?

Profits to be chart kid Matt had this chart. This is really cool. But it is, but this is also part of the thing, like not to, not to rehash what we just spoke about for the first 20 minutes of the show. But I think it's fair to say that corporations are out, or out thriving. for lack of a better word, consumers. Oh, of course. Corporations are doing better than consumers.

Yes. Corporations have weathered this decade better than anyone. Yeah. Right? And we'll continue to do so at the consumer's expense, if necessary. So imagine not wanting to take part in the stock market. This is why 60, whatever percent of, 62 percent of households are in the stock market, because good luck fighting these corporations that all they do is want to make profits.

So Chart Kid Matt, who has his own blog now called ChartKidmat.com, looked at the returns of tech stocks based on higher or lower capex spending. And this is pretty wild. I don't know. I'm sure there's some way you could poke holes in this. But basically, the higher your capex spend, the higher your returns, the lower your capex spend. And the spread is huge.

It's like 40. There's no holes to poke. This is merely the data. I think what's interesting about this data is that we spoke about Kai's post from a couple of weeks ago who looked at historically high capx companies do not deliver. great returns for investors. Now, that is historically true, and I'm not saying that it won't hold true for the next five years, right?

Like maybe higher cap-ex leads to low returns going forward. I wouldn't bet against that. This is another one that this time is different. Well, just for 2025, it's different. I'm not saying that these companies, now that they are ramping up, their spending or going to continue and outperform. But in 2025, I mean, we know this, obviously. This is very, no shit.

But it's very cool that Matt was able to show this. So the companies in the quintile 5 that are spending the most, it's Intel, Oracle, first solar, huh, okay. Akamai, Microsoft, CrowdStrike, companies like that. I forgot Dell is a public company again. That's in there, too. And on the bottom end, although in the other side are a bunch of companies that, frankly, I don't even know who these companies are. Adobe's in there? I know F5.

Uh, is that into it? Adobe. Pallantir. Interesting. Um, okay. Uh, Fico, whatever. Doesn't matter. The point is, we know what the point is.

It's enough already. We know. And if you haven't, if you're in an advisor, you haven't checked out Exhibit A for Advice.com. Matt's doing wonderful things there. Chart blast charts of the week. Check it out. Yeah.

You're damn right he is. Every week. It's not just, it's not just a library of stale charts that update every day. Every week, we are doing a chart. part of the week that is obviously topical for you to share with your clients and prospects and all that good stuff. So check us out there. You have a free seven-day trial. So check it out. Okay, S-Tax, new monthly report. Can't call it stacks, can you? I just, I won't do it. All right, this is surprising. From an age perspective,

the most aggressively positioned investors tracked by Schwab during October, belonged to Gen X. The least aggressive was Gen Z. That's surprising to me. Huh. It does show that you can, because Gen X, when they were coming up in there, they were just coming up, they, Gen X lived in their formative years in the lost decade, right?

I've heard of a lot, that's the, that's the, also the lost generation. But I heard from a lot of people say, I remember one person in particular told me, I started my job in 1999. By 2011, every single dollar I put in my 401k, it was worth the same as I put in. So I put $100,000 in. My account value was $100,000. I saved for 12 years, and I went nowhere. And all I told them was just wait, because now all of those purchases over 12 years

that went nowhere, I'm sure they're, they're, so if they stayed in and they figured it out, they did wonderfully. As a young person, that's one of the better things that could happen to you. Yeah. Yeah. I mean, a lost decade comes with obviously all sorts of, like, you don't get lost decades in good times, right? Right. So on the one hand, you should pray for the last decade. You should pray for lower prices, but obviously it comes with all sorts of gnarly side effects. So maybe not. All right. Young people are twice as likely to be unemployed. There's a lot of this talk coming on, right? Okay. So chart kid made me a chart showing the unemployment rate for young workers. So this is the group of that's 22 to 22. Then he compared it with all workers. And the spread right now is 3.4%.

Guess what the average is since 1990? 3.8%. It's lower than normal. And from 2009 to 2014, when it was really hard to get a job for young people, the average spread between the two groups was 5.4%. So I'm not saying that young people have never had it better. But this idea that it's unfair now and that they're screwed, Like, give me a break.

Have a young, that's my point. Having young people always had it hard? Has there ever been a time where it's been easy to be a young person? Of course. Of course. All right, this is great. This is, this made me so happy. This narrative nonsense.

So all of these fast, casual companies, they're all getting killed. Kava, sweet green, Chipotle. They're all, their stocks are getting killed, which, by the way, these were expensive stocks. So that's part of the story. And then the growth is slowed because a lot of things, people aren't in the office as much, but people are like, I'm just not eating this anymore. It's just, it's too expensive.

So, all right, Ben, you're going to love this. Okay. So Chipotle and Kava, both in the opening of their call, mentioned the strongest of young people. In their in their pre-packaged written response, okay? So an analyst said, Brett, you mentioned younger guests in the prepared comments. And I don't know if that was a broader statement of the industry or if you're seeing something in particular with young cohorts. So, Ben, listen to this answer.

This made me so happy reading this. Yeah, Sharon, for us, we're a bit idiosyncratic and that our cost accelerated in the back half of last year when many industry comps were decelerating. Oh, really? So maybe there's actual business stuff specific to you guys that's driving your results. All right, that's part one.

Here's part two. So we're lapping tougher hurdles when most are having easier comps. So we don't want to overstate. the challenges of the consumer, then why did you lead with that in your prepared remarks? It's so easy to latch onto these narratives and blame that when really there are idiosyncratic things going on in your business. So I have a theory.

So I looked at this. So Kava is down, let's do a fraction. Kava is down two thirds. It's down 67%. DoorDash is down almost 30%. Chippoli is down 55%. Cheesecake Factory is down 30%. And Sweet Green is down 87%.

So these restaurant stocks are getting killed. Is it just as simple as, and I know like you said, each of them has their own thing going on? Did they just raise their prices too much? Did people go, why would I do a fast casual when I can go to the brewery down the street and get a beer and a burger and it costs almost the same thing? Like, why would I pay for, I think they just raise their prices too much. Is it that simple? Yeah, that's what happened to Starbucks. It's the same thing.

At McDonald's. Right. People just got fed up. It's too much. Then they changed their habits. Yes, exactly. All right, let's talk about 50-year mortgages real quick. The housing guy, what's his name, Bill Pulte, said we're working on a 50-year mortgage. It's a game-changer. People on social media went nuts about this thing. I think pretty much everyone hates it. I tell you what, I don't really hate it as much as most people. I was about to say, tell me where the hate comes from. I want to understand. Because you, it only lowers your payment a little, and you basically don't build any equity. Like, it's almost impossible. I say the positive is it is like, listen, I just, I just, just want to, I want to fight inflation and I want to have my payment be set. So I'm taking a

50-year mortgage. I'm going to move in 12 years anyway, 10 years, eight years, whatever it is. I'm just, I'm not going to build any equity, but I have, I have it as an inflation hedge. So from that perspective, I kind of think like, oh, this makes sense. I just think, do people think that do people hate it because they think that that's going to only juice prices even more? Yeah, people think, well, that means housing prices will just adjust higher, which I don't necessarily I don't necessarily agree with that for sure. I think that the majority of home. I think that the majority of home buyers in a normalized interest rate environment. Now, home prices today are ridiculous. But I'm just saying all else equal. Most people would not choose the 50-year mortgage

because guess what? You're not building any equity. It's all interest. So I wouldn't choose a 50-year. I don't think most people would. But for people that are struggling to get into a home, yeah, the 50-year, I don't think it's the worst option in the world. I think, but if we're going to be, if we're throwing ideas against the wall here, why don't we just give everyone under 40, if they haven't gotten one yet, a one time three percent mortgage if they miss about in 2020. Now, listen, with that juice prices, probably, but it's like if we're throwing ideas against the wall, and obviously the obvious one is, well, why don't we just build more housing? Like, that's the simple, like, solution. But obviously, for whatever reason,

it's too hard to do or we don't want to do it. So we're just going to throw ideas against the wall. I am very much for, in favor of relief, home buyer relief for young people. I think this is probably the singular biggest issue in our economy right now. I am too. I'm fine. People say it's not fair. So what? So what?

So what? So I don't know what the solution is. I don't know what the unintended consequences are. I'm not like a housing policy wonk, but we got to do something. Well, listen to this. The sheriff, this is from NAR. The sure of first-time homebuyers dropped to a record low of 21% while the typical age of first-time homebuyers climbed to all time.

high of 40 years. And this is the biggest cohort now. Remember we said last week's 33 to 37 is the biggest age group in the country right now. Yeah. This is us trying to have like some sympathy here. I agree. Like some people are going to say, why do they, I never got help when I came up. So what?

You didn't deal with housing prices that rose 50% and mortgage rates that doubled either. Yeah, no, I'm, I'm for this. I forgot to mention this last week. Matt Levine wrote about Brian Armstrong, who is the CEO of Coinbase. By the way, I tried to watch the new Superman, and I couldn't do it. Ryan Armstrong will make a great Lex Luthor. Yeah. The new Superman was okay.

It was watchable. Way better than the Fantastic Four. My kids actually liked Fantastic Four. They got into it. But do they have good taste in movies? Yeah. Kids like everything. It's true.

I just, I made it 10 minutes into Superman. I turned it off. I just, I don't care. The superhero stuff, I just don't care about. But wait, hold on. You just said it. That's a you thing. You can't watch 10.

Yeah, but a lot of people don't care about superhero movies anymore. Like, oh, you're going to destroy the world and this big bad being is going to come and ooh. But you were never a Marvel guy. No. Did you ever see like Avengers Endgame? Yeah, I watched it. It was okay. I mean, but when the guy snapped his fingers and everyone died, I knew the next movie was just going to be them turning time back.

You know what movie you want to see? You want to see Thanos in middle school, like awkwardly getting into puberty and realizing that like he actually does. have something to offer to the world. Like, that's... No, I would like there to be some actual stakes. There's no stakes in these movies. Like, anything that happens can be reversed. And so, like, this person died, Matt, let's just snap our fingers and then come back

to life. Like, there's no stakes in those movies. So, like, why should I care what happens? Fair enough. Okay. So, Matt Levine, the main point I want to make here is that this is all so dumb and I hate it. Cal She... Talking about what?

I'm about to read it. Calci, a commodities futures exchange registered with a U.S. Commodity Futures Trading Commission, offers contracts on various unconventional commodities like election outcomes and football games. Last month, you could buy futures contracts on commodities like a Coinbase Global Inc. representative saying the words prediction market or Bitcoin or Web 3 on its third quarter earnings call. Why? I don't know.

To hedge your wrist that Coinbase wouldn't say those words. To help people understand and price the future states of the world. in which Coinbase did or didn't say those words because you were bored and liked to gamble, probably. All right. So, the earnings call happened at 5.30 p.m. on Thursday. And here is the transcript that Brian Armstrong said at the end of the call. Did you hear this, Ben?

I know what you're talking about now. Okay. Here's a quote from Brian Armstrong. I hope we answered your question on that. I was a little distracted because I was tracking the prediction market about what Coinbase will say, on their next earnings call. And I just want to add here the words,

Bitcoin, Ethereum, blockchain, staking, and Web3 to make sure we get those in before the end of the call. End quote. Dude. Bro. And dude, come on. Yeah, not great. I mean, is anyone really being harmed by this or helped?

I don't know, but it's, why do we, why is this thing? But just, but just why? Like, just who does this help? I agree. Aren't you trying to be the adult in the room and push the crypto industry forward and you're like literally doing this. It's like this is the LOL, nothing matters, right?

Right. Yeah. It's just, come on. Do we need to make people more cynical? All right. I'm starting to backtrack a little on the housing market. Like I thought I was almost positive that during the next recession,

we're going to get like a housing boom. Like the housing market goes into recession first, comes out of it first. Maybe that still happens. But I don't know if the animal spirits are going to be harmed here. So this is from Wall Street Journal. A bunch of people sent us this. Builders are offering mortgage rate discounts.

Homebuyers aren't biting. Okay? America's biggest builders are struggling to sell homes, even when they offer buyers a 4% mortgage. Their experience suggests that rate cuts alone won't be enough to boost weak sales in a wider housing market. So you can see the number of completed untold homes is rising, very fast. DR Horton, which builds roughly one in every seven homes in the U.S. And has its own financing arm, is offering 3.99% mortgages to buyers. That's a pretty darn good deal.

Yeah, that's. The company has also knocked off 3% of its average selling price in the past 12 months. And it's not working. It's not helping. Somebody emailed us and they were like, guys, it's not just the price of the home with the down payment and of course the mortgage, which is ridiculous. It's also like insurance and all of the other costs. It's everything. So it's not just the mortgage rate.

So does this mean that housing prices have to fall to create a better equilibrium? Or we're just going to have no housing activity. But they're not falling. They're in some places. Texas and Florida to fall. True, true. I could be wrong. I still do believe that at some point there is a rate,

I don't know where the line is, at which it's going to be like the spark that lights the fire. But maybe not. Maybe home prices need to come down. Here's the thing. If I'm in the market, though, I'm buying a new house over an existing home. Buying a new house is such a great deal

because like you're just all the maintenance for like the first 10 years, you're washing your hands of it. So if they were saying, listen, part of the problem of new homes is that if they're not in very desirable areas sometimes because there's no place to build them in the best area. So sometimes you have to go further away to get a new home. All right, Ben, can we do an ask the compound style question? I'll be Duncan. Okay. Let's do it. Okay. My wife and I are in our early 50s, two teenage kids. My wife is a part-time teacher planning to retire in four to five years. I made a career

switch two years ago to pursue my passion, knowing that I would never, knowing that I would be bringing home significantly less income in the short term and potentially not recovering the difference, okay? Our household income prior to my career switch was 180K. You're taking notes? We do not, we do not have a mortgage on our primary residence, $1.3 million. We have three rental properties valued at a combined $2.2 million. Nice not to brag here. We have retirement accounts combined total estimated at $2.3 million and a brokerage account, cash assets combined at $1.5. All right. So these people are financially good. They are in a very healthy, very healthy spot. Making their career jump created a shortfall between our expenses

and our income. Yes, we could cover the difference by tapping into our cash or pulling back some of my wife's pre-tax allocation to retirement account. Two years ago, we decided to pay off the debt to pay off the only debt we had, which was a 2.625% mortgage, uh-oh, on one rental property with 10 years remaining on the loan and a loan balance of $130,000. The monthly mortgage payment was $1,200. Prior to paying off the mortgage, we were net positive about $6,000 per year on this property. Okay, I mean, this is all the right things. Do I even need to read the rest?

Do you still have any issue with this, Ben? Well, he says, in my mind, we took $130,000 and are getting an 11% return for the next 10 years. Maybe this is distorting thinking, but at the end of the day, we're still getting $14,400 more in income for the next 10 years. No. Love to hear your take, especially Ben. I feel like people twist their brains and pretzels for this stuff. So they have a shortfall in income. They need the income, right? They decided, well, if we pay off the mortgage early, then we'll have the lower monthly payment, so then that can be a form of income. What if you just kept the $130,000? But people like the income. I know, I know, I know.

You keep the cash. The cash, if you have, especially if a shortfall in income, you're trading that cash now for future monthly payments that aren't going to happen way off into the future. Time value of money says you're better off keeping that $130,000 just in cash. You're right. And the flexibility of it all. But I think what we keep learning over and over and over. And is that the psychological component of the money,

on a monthly basis matters so much more than what's sitting in the bank, in the bank, the psychological goodbye debt. Right. And I've already come, I know that I'm never changing anyone's mind about this, but he twisted his brain into a pretzel here. He could have just cut the cash. I think that I would be more like emphatic and like taking the person by the shoulders and shaking them, like in Billy Madison or the cheeks, I guess, in that case.

If you are, if you are not in this person's position where they have the portfolio. They're going to be fine either way. Yeah. But if you're talking about somebody who's like, listen, who's like, I have, I have $30,000 in savings. And it's like, no, no, no, no, no. You are making the more decision and it's going to impact your life. Right. Obviously, that's not this.

Right. Okay. I want to talk about real quick about some of the stuff we saw in Vegas. Yeah. And the juxtaposition between what we're hearing from Robin Hood. So Vlad said prediction markets are really on fire. It's hard to believe we launched this year just about a year. just about a year ago and we've doubled volume every quarter since then. That's crazy. People

really love gambling that much. I mean, predicting that much? I know. Is it just so you can say you were right? I know the money is part of it, but here's what I told you. Rob, like, walking around Vegas and seeing all the debauchery there, Robin Hood should have a bucket shop in Vegas. You should be able to go in there and trade penny stocks on like 50 times margin. And like there should be a Robin Hood bucket shop in Vegas. We were walking, and I'm almost, I'm almost like, if we're going to do this, let's just do it. Everyone's going to be degenerate.

But you and I were walking around the MGM Grand, and they had this enclosed space with all these people, and it was these people talking to cameras, and they were dealing, and they were dealing card games, and they were doing roulette, and they were doing, I don't know, all these other games. They're in a glass box. Yeah, and the glass box talking.

It was 12 games going on, and it was people on the internet playing these games live. So you're on a camera and the dealer's on a camera And you're playing against them No offense But I would have loved to see who's on the other side of the camera So that's just that's massive See because one of the

That's just such a degenerate move Because one of the great things about going to the casino Is that you get the smell of the place You get all the noises around you When you're playing blackjack It's not you're not just there to play the cards And win the money or lose the money You're there to be with other people

And you're there to experience Yes That if you have a good blackjack table And you're with your friends and people are yelling, and I love it when you have a 16, and you hit and you get a five, and everyone goes, good hits, good hit! And if you, you know, you tap the table because someone got an ace for good luck, and like, that's the part, it's the camaraderie of it.

It's not just the straight cards and we're, anyway, I do have one thing. I wanted to go over, I always do this for people you see in an airplane, people you see at a resort. I have people you see at Vegas. And a lot of this is colored by what we saw, but, so there's always the one old guy, at the blackjack table complaining. We had this guy, right? Like, I'm playing it right, and I can't believe it. When I played a little bit after you left,

and I had a guy, he literally had the card. You know, the card that says when you should hit, when you should stay, when you should split, and he's falling it to a T. So he's playing the right way. And he keeps losing, and he's getting madder and matter. And he points to me, he goes,

why is he winning, and I'm losing to the dealer? Like, sorry, sometimes it's just random. There's the one guy who drops $8 to $10,000 on a card table and doesn't blink. just playing massive hands, money's gone. It just gets up a leave. Yeah.

There's always a group of dudes who are inappropriately drunk at like weird times, right? We saw like five dudes walking through on our way to dinner, and they had a case of Papp's Blue Ribbon on them, and they were annihilated, and it was like four in the afternoon. Wait, the beer, the beers fell out of the case. Bears are falling out. There's always one lady, like a group of ladies there for a bachelor party or something, who keeps shouting about getting a drink, like, I need a drink, you know,

Is that lady? And then, of course, there's just the zombies at a slot machine, right? Like, their eyes look like they're like, and then, let's see, people playing craps at 9 a.m. That's a person. And then I love the people, when you're leaving for a flight at like 7 a.m. And there's people literally coming home to the hotel at 7 a.m. At the same time as you. I'm sure there's way more than that.

But Vegas is a great people watching place. Here's one thing I didn't know. You can literally, people, how many times are they asked us for a massage at the table? if you're that sore from gambling and you need a massage while you're playing, you might have a problem. I don't know. Anyway, but for us,

everyone keeps saying Vegas is in trouble. Vegas was bumping and we were there. Oh, yeah, that's what I want to say. You look at a chart of Caesars, and it looks like the stocks going to zero. And Caesars is the most exposed to Vegas compared to like Wynn or MGM or Las Vegas Sands. And it's easy to conclude

that the control consumer is dying. It's like, wait a minute. No, they're not. They just aren't going to Vegas as much as to for a various host of reasons. It's expensive as shit. It's really expensive there. It's really expensive. I got to start a Grande coffee for $9. It's just like, come on. You're just robbing me. But did it feel like a recession there? No, it was, I mean, people were dropping money left and right. Did it feel like Caesar's is in an 80% drawdown? Yeah. We And we asked the dealers, like, what's going on? Is it busy?

They said, yeah, right now there's a lot of stuff going on. Maybe it was just because there was a big conference week or what, but I was surprised. I thought it was going to be a ghost land. Yeah, so I'm not here to say that Vegas is killing it, but this idea that like nobody's there anymore, just not true. All right, great stuff, Ben, on the Vegas. I wanted to mention, Rob, but real quick. Their net deposits in the fourth quarter or in the third quarter were an all-time record,

up 29 percent, $20.4 billion. I'm sure they have a ton of people that are just auto-contractual. attributions in, right? And every time they get a new client, that's what happens for a new customer. Here's a faceblowing chart. Look at how, look at their, their margin revenue. $153 million. And the next chart shows their margin book, not surprisingly, $14 billion, an all-time record there. Wow.

Robin and is killing it. They are doing, they are on fire. They need to do the bucket shop thing. People would love to borrow more money from them. All right, good news. My auto insurance went down for the first time in a long time. They didn't even have to haggle. Oh, it's great.

I didn't have to, like, go to it. Not a lot, a little. But the Wall Street Journal had a story saying that car insurers are under pressure to cut rates. They're basically saying there's been more competition and people are shopping around more. So that's causing these auto insurers to lower the rates. So it's finally the inflation on this stuff that spiked and it was massive. We talked about this being like a crisis level event. It's reversed.

So that's good. That's great. Good news. That's great. Ben, I, I'm not a, I'm a new to the vest, the vest game. I know you've been a vest guy for a long time. That's kind of surprising you going to Manhattan all the time. Yeah, I'm new to the vest game. And I don't like vest guys. Sorry. I mean, I like, I have a lot of friends that wear vests and I like them. But just the idea of vest man, I don't like vest man. Well, if there's four guys walking, I mean, they all have khaki pants on and a blue shirt and a vest, you like, you judge those guys. So there was two vest men on the flight as we landed. They got off, uh, where, uh, They're standing up talking to other. Vests are great for wearing on planes, though.

I am. The pockets keeps you kind of warm. I've got a positive coming up. So they, so vest guy number one goes, so how was the conference for you? You come back next week? No, I don't cover retail anymore. I only cover this sector. So they're, you know, they're rich guys.

You're going to, where are you going to now? You go to Greenwich from Manhattan. I'm like, dude, you don't just say that out loud. So they're stereotypical vest guys. Stereotypical vest guys. All right. But I'm a vest guy. now for various reasons, but he's another, he's a great reason. I don't know if you could tell.

Probably can't. Maybe you can. I've put on quite a bit of weight recently. I'm afraid to look at the scale. My eating, which was on track, has fallen off an absolute cliff. It's a nightmare. So now you could wear a vest over a t-shirt and hide your belly. So that's what I'm doing these days. I wear that because my t-shirt-a puffy vest really hides, can hide a lot. My stomach is not looking good at all. Neither is my upper chest area. So the vest, the vest, hides the... What happened to your personal trainer? Oh, I stopped that year ago.

I don't have time for that. Okay. Yeah, you do. You can find time to work out. All right. No, I can. I just don't have time for a... Survey of the week from Washington Post.

A weekly trainer. It's too much. Three and four Americans want to reach their 80th birthday, but less than 30% want to live to 100. The typical American lives to 78. The ideal age, on average, according to this Pew survey, is 91. So what do you think is the best age to die? Very morbid question.

84. Okay. So my dad, it talks about this a lot. My dad is approaching 80. He's always said, like, I don't want to live past my, like, 80s. I don't want to be seen people that, like, just fall off a cliff and deteriorate. He always says, I don't want to get past that point. He's said this multiple times. Yeah, but, but your dad's in good shape. If he could live to 90, if he could live to 90 and not be a corpse, I'm sure he would do it. It is kind of crazy. My dad is almost 80, and you'd look at him. You'd probably think he's in his 60s. He, like, tans immediately. Like, my step, my stepfather's 85 and the guy's a Hulk. You would never know. My grandfather died at 76, and he looked like he was 110 because he smoked his whole life and lived a hard, hard life. I think 85 is a perfect age. Let me think. You don't say, like, oh, they died at 85, like, they had so much more life to live. I think 85 is the perfect age to die.

Yeah, that's a great age. Because I feel like in the 90s, like, you're having people take care of you. Yeah. Right? Yep. All right. Let's do some recommendations. I watch Pluribus on Apple TV.

A bunch of people are talking about this. it's the new show from Vince Gilligan, the guy who did Breaking Bad. Okay, did you watch any of this? No, I'm very excited, though. I think it's one of the best pilot episodes I've seen in the last 20 years. Ooh, what?

Oh. I mean, lost. Thanks for raising my expectations. I don't want to raise them too much, but it's just one of those shows that it... One of the best pilot episodes in the last 20 years? Here's the thing.

I'm worried that the idea of the show is... Like, I don't know where they go from here. Like, the... It felt like a blockbuster movie, but like the show starts, and it goes, and you're like, oh, oh, okay, oh, it's... But you're in good hands. It's, why, you don't need to be worried.

I'm a little concerned that the show is going to peak in the very first episode. And the second episode I watched it was good, too, but it's, like, it's just the idea of what happens is kind of like mind bending. And so that's all I'm going to say. It was, like, listen, loss is probably the best, of this century, Lost is probably the best pilot episode I've ever seen. Homeland's probably up there. I'm trying to think of what else, but, um...

Oh, I remember watching Homeland in my bed. That was a great pilot. Just in terms like what could happen with this show, like, whoa, this is mind bending. Very good. You said you watched the materialist on their flight. So my wife and I watched it because it was on HBO. What did you think? So it's not a rom-com.

It's just a rom. And I thought, man, this movie feels familiar. It's the same woman who wrote and directed past lives, which I loved. I think that was one of the best. You did about that movie. Materialist, I thought, was just okay. Like, we're talking like a 6.2. it was, I thought the ending was like completely obvious and telegraphed and not original.

And I had a hard time buying Chris Evans as like this down on his luck guy who lives with roommates. It made no sense. So I thought that materialist was, you nailed it. It's a good airplane movie. Was an airplane movie. It's a movie that you watch on an airplane that you wouldn't enjoy on, that you enjoy on the airplane that you wouldn't enjoy on your couch. So I had an okay time watching materialist, but Pedro Pascal, Horrific and Chris Evans maybe even worse

So the acting was terrible I thought the first half of the movie was kind of intriguing Yeah, the first third was great And then it was miscast Spoiler order, she's not going to end up with a rich private equity guy Come on, who has a $12 million apartment in Manhattan That's not realistic Airplane movie

Okay So it was okay I have a plug I plug Tommy John Undershirts I'm going to plug this we don't have a we don't have a TV in my kitchen so we got the new Amazon Echo show which is like a 15 inch I think it's like a 15 inch screen and they even have like so you have all the apps in it so the kids could watch Netflix Prime Disney whatever they even have

like an Amazon channel guide which I just discovered yesterday pretty interesting but it's perfect it's perfect for the TV it swings around it's great and you can use it for other stuff too? It's an Alexa. Okay. It's an Alexa that also is a TV. Oh, interesting. Okay. I like that. It's great. It's a cool idea. It's really great. Okay. All right. I have, you know, you ever, you ever notice something about yourself only after somebody points it out? Mm-hmm. So I was telling one of our guys, Kevin here, about a movie that I was watching. Kobe woke me up early. I was up and I was downstairs at 615 and I fired up a movie called Sovereign, which Nick with Nick Offerman, which is not a, which is not a movie worth watching. But Kevin's like, you really watch a lot of movies in the morning, don't you? And I said, yeah, you know what? I have really strange movie watching habits because I rarely watch a movie in one sitting,

which is maybe part of the reason why I really love watching movies in the airplane or in the theater. But almost all of my movies, I'm watching like 20 minute chunks, an hour chunk, a 15 minute chunk. I can't watch a movie in the morning. I'm not a morning person. I can't. Like, my brain's not ready to dig in yet. So, yeah, that's me. I said it.

All right. Gamma del Toro. I have very mixed feelings on this guy. So he did the new Frankenstein movie. And it's funny. I always thought that I hated Guillermo del Toro because he did a lot of stuff that I don't love. Like, I didn't love Pan's Labyrinth.

I know why people like it. Shape of water got panned. I never saw it. It just looked weird. Oh, that was awful. I never saw hellboy. I don't know anything about Hellboy. It might be good, but it just turns me off. I actually watched Hellboy. He was okay. Okay. And then there was a, there wasn't a TV series on FX that he made. I think it was about vampires that I just didn't really like. But then he did make some stuff that I do like. But then he did make some stuff. I didn't realize that he did. I didn't realize that he did. So anyway, the point is this. I went into Frankenstein with New Zero. That was good stuff. Nightmare Allie I liked. There was one other thing that he did that I liked. So maybe I don't hate him as much as I do. So anyway, the point is this. I went into Frankenstein with Zer expectations. I'm not a big Frankenstein guy, right? Like, it's not a monster that I

particularly care for. Um, uh, Oscar Isaac is Victor Frankenstein. What monsters do you care for? Aliens. Okay. Big aliens guy. Uh, although, like, I would put like the monster villain, like Freddie Krueger. I know he's not a monster per se. Wait, so would I like Frankenstein or not? Maybe. Well, it's not very, it's not very good. But it's also way too long. I think I fell asleep a few times. This took me like four different times to watch. You're not selling it really good. It's not very good and it's too long.

I watch it in the hotel. Other than that, how was the show, Mrs. Lincoln? Yeah, exactly. No, but it was okay. There was some good stuff, some bad stuff, some silly stuff made no sense. But the point is this.

It was watchable and forgettable. So you could skip it, Ben. All right. Skip it. All right. Lastly, I know we're going along here. Sorry, Duncan and Team. Two pretty good airplane movies.

Number one is Americana. You ever hear of this one? Mm-mm. Okay. So Americana movie is with Sidney Sweeney. Maybe you've heard of her. And it's a new movie. It's 20, 23. Not that new. You know, it's kind of funny that she's just a bigger hit. Like no one ever sees her movies or hears of them. Like her boxing movie this weekend totally bombed. But she's still this massive star. Well, no one wants to see her box. No offense. The movie with Glenn Powell was a smash. Yeah, I like that one. All right. Paul Walter Hauser. You like that guy. Oh, yeah, big dude.

Yeah. So this was like a Western crime, Western thriller. Good. Good Airplay movie. Okay. And then, oh hi, oh, comma high was a fun little, yeah, Google this, Ben. Tell me what you think. Oh, comma high.

Is it the best movie? No, but it's a good airplay movie. Oh, you love this guy. Oh, this guy, Logan Lerman, was in the perks of being a wallflower. I like that movie. Okay. Say no more. So Isaac and I,

Iris's first ever romantic getaway hits a block when Isaac casually confesses to not wanting a relationship to what lengths will a desperately single Iris go to convince him. Okay. I'm in. It's a rom-com, huh? It's, yeah, it's good. It's fun. Okay.

It's okay. It's an airplane movie. All right. Thank you, everybody, for listening. Thank you, Duncan and team for editing a long show. Animal Spirits at the Compound News.com. We love hearing of you guys. Please take the survey.

It would really help us out. And we'll see you next time. Check out Talking Wealth this week. I'm talking to Colin Roche about how he transitioned from writing about macroeconomics to running his own firm and then starting his own line of ETFs. Good stuff. See you next time.