Animal Spirits Podcast - Is Debt Fueling the Rally? (EP. 471)

Episode Date: July 1, 2026

On episode 471 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠���⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: all-time highs in margin debt, the small cap rally, the hyperscaler dilemma, why Micron is up so much, everything is outperforming the Mag 7, concentration is normal, no signs of a recession, rich people everywhere,  the pizza bear market and more. This episode is sponsored by Franklin Templeton and Vanguard. Learn more at https://www.franklintempleton.com/advantage To learn more about Vanguard bonds, visit https://vanguard.com/audio. 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/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Franklin Templeton Disclosure: Before investing, carefully consider a fund's investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at franklintempleton.com. Please read it carefully. All investments involve risk, including possible loss of principal.  © 2026 Franklin Distributors, LLC. Member FINRA/SIPC. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value in fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple of fleshy funds your way and call it a day, but not Vanguard. Lots of firms love to highlight their star portfolio managers. Like it's all about that one brilliant mind making the magic happen. Vanguard's philosophy is different.

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Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the Securities Discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Got an email, subject line, Miami Vice drinking technique.

And I want to open the show as we head into the warm summer peak Miami Vice season. Somebody wrote, hey there, I'm at the shore on vacation. I think to myself, what's a proper beach drink? I, of course, think back to the many podcasts where Ben is enthusiastically pushing the Miami Vice. They bring me a drink that has the clot on the top. on the bottom and the daquery on the top. So what is the proper way to drink this thing?

I'm supposed to start and mix it all together. Use the straw to go deep and suck the collata, then rise up and drink the daquery. No straw. Ben, what say you? That's great because I read this one and I thought, man, I have to think really deeply about this because there's one place in Marco Island

that does a side by side. I don't know if they put a little cardboard divider in there. They do the peony clad on one side. It's got to be a side-by-side machine, no, that poised in both at the same time? Oh, there you go. That'd make more sense. I don't stir.

Yeah, they put a piece of cardboard in every drink. Your way probably makes more sense. I don't really stir. I just, I drink as it is. And the best people know how to do a swirl or something to kind of blend them the right way. Anyone who's made a slurpy with multiple flavors knows how to do that. I go just straw in whatever. I play the field as it lies, like Shooter McGavin said.

But it's usually the one than the other. Although, I'm not mad if somebody wants to stir it up. Like, that's probably, that probably works just as well. Yeah, I've never done that, but it probably would make sense. But it looks pretty if you don't stir it. So that's the thing. It's all about the looks. You've got to have a pineapple on top and obviously the floater.

The floater. All right. We have a ton to get to today. I'm excited about the show today. We have a million things to talk about. 48 pages in the dock. Is it? All right.

Let's, uh, this is going to be a Tarantino movie, essentially. All right. Let's talk about leverage. This was a story in Bloom. FOMO really got me. Taiwanese go deep into debt to amp 100% stock rally. So there's all these stories about South Korea and Taiwan. And this is the Jesse Livermore quote.

I'm going to butcher it. But he says, nothing is new in the stock market. Everything that has happened before will happen again. And what he means is human nature. There is nothing new under the sun. Right? I believe was a quote. Andy Chang is 26 unemployed and with the help of a little borrowed money,

the proud owner of $60,000 worth of Taiwanese tech stocks. And in many ways, he speaks for the entire. entire island of 23 million people when he doles out the following advice, buy any stock and you will make money. Okay? Look at this chart they have in here of stock leverage in Taiwan that is just gone absolutely vertical, right? Many of the island's brokerages that hit their internal limits on certain types of loans,

forcing them to demand more collateral and bump up their rates according to people familiar with the matter. Like the brokerages are saying like, okay, this is getting a little scary here, right? similar in South Korea. And Taiwan is now the fifth largest stock market in the world, bigger than India, bigger than Canada, bigger than the UK, which is just mind-boggling. I'm sure you could have Claude do some sort of, this is the population, this is the landmass, this is all that stuff.

So that's in Taiwan, and South Korea, I think, is doing something similar. Then yesterday in the Wall Street Journal, the trillion-dollar borrowing binge lifting the stock market to risky heights. And they highlight the fact that there's a ton more money in leverage. ETFs, which we've talked about before, that just keeps going up and up and up. Because now you have single stock ETFs, double, triple, every new thematic has to have a leveraged version. Now, my original thing, we talked about this in the research channel yesterday.

We had a lively debate. And I said, listen, if you look at the history of the margin debt stuff, it just kind of follows the market. Jake, who used to write, who actually blog at Economic, I don't think he does anymore. Early days of financial blogosphere. He said, look, if you put it. If you put a chart of margin debt in the stock market, they're concurrent indicators. They're not leading indicators.

And if you do it as a percentage of the index, it's kind of similar over time. There's from 2015. We're not in Kansas anymore. 2015. But the point was those relationships still hold. So I updated the data. The market goes higher, margin debt goes higher. Right?

And as a percentage of the market cap, it's still very similar. You said, I'm actually kind of worried about this. Yeah, I think this is a dated indicator. So in 2015, Jake wrote this because it was like nonstop margin debt stuff. And I agree at the time it made a lot of sense to normalize things because at that time in 2015, which is a million stock market years ago, margin debt, traditional margin debt, was the way that people levered up their exposure. Well, and the point was when the market hit its all-time high, so does margin debt.

So people saw margin debt hits new highs and people go, oh, no. What does that mean? I am concerned about leveraging the system. I'm not concerned to the point that I think, like, oh, no, go to cash. But I think to, like, not at least be aware of what's going on is burying your head in the sand. So I had a chart can make a chart showing what is the year over year finra margin debt change? And it's up 54% year over year, which, to Ben's point, well, yeah, the stock market's of 42% over year.

Like, it makes sense directionally that they move together and they do. The thing is, the last one, this is now the fourth time that margin debt since 1997 has risen by 50% of more year over year. And let me tell you the other previous times. 2000, 2007, 2021, 2006. All right. We need to have the cover, the thumbnail for this YouTube video be fire behind us because that is, yeah.

Here's where my worry would be. My worry would not be like, oh gosh, this is. a generational top because of all this debt. My worry would be there's going to be air pockets in the market. Well, we're seeing that. You saw them last week and even yesterday. I think Micron closed down 8% ended up the day, 1%. You're seeing a lot of, I think Micron has been up or down 5% or more on the day for the last seven sessions in a row. The tail is starting to wag the dog. This is 100% being pushed around by leverage. This is why those South Korean stocks and Taiwanese, Taiwan Semiconductor, they can be down 10% in a day.

easily, 20% in a day potentially because of all this leverage. That's the worry is that you're going to get an air pocket and then selling be getting selling. That's what happens. So FINRA margin debt is boomer margin debt. That doesn't show. No, seriously, that is the way that people used to lever up their portfolios back in the day. And there are all sorts of instruments that do not show up in this chart. So swaps, for example, that's how Arkegos blew up.

Nobody knew because it's like, there's no record of this. Options. Options and futures. These, so I think a lot of these double things run out swaps, that's not in the system. Now, we saw the chart, what is it, $200 billion worth of money in there? That's not nothing. Box spreads and other synthetic lending is not in here. Now, obviously, that impacts a lot of wealth management clients.

It's a little bit sort of, it's a different type of leverage because, yes, people are levering up their portfolios, but it's not to buy more stocks. That's the thing. Not all leverage is being used. Sometimes it's used for a house down payment. Sometimes it's used for renovation. It doesn't always have to go back into the market. Yes. But to be very clear, let's like not mince words, there is a lot of demand for leverage. There is a lot of borrowing in the system. And yes, it does have my intention. I am a little bit worried about it.

This is one of the reasons, though, that I've always said on this show, and this doesn't cover, it's not a blanket statement, but interest rates matter way less than people think, because rates have been going higher and people are still borrowing money from this stuff. So that's surprising to me that rates keep going up and people don't care.

And this is what happens, though, in a bull market. People just keep taking more and more and more risk. Nobody cares about the annualized interest expense when you're trying to make 20% in a day. Who cares? So there is so much demand for borrowing that the brokers

only have so much money that they're willing to loan out. And there is a cost to this capital. And right now, costs are skyrocketing. But there's this idea that the Fed can control people's behaviors through interest rates. And I just don't believe it. Behavior matters more than rates until rates get to a certain point. Rates matter in the sense that they slow down the economy.

They slow down growth, which eventually, not overnight, but definitely hits speculation. Yeah, obviously going from zero to five, that had a huge impact. But here's the thing. I would be more surprised if people weren't levering up right now, given where, given that the way this cycle is playing. out. Of course this is happening. This is a boom, a huge boom. Of course it's happening. Of course it's happening. Right. I don't think, not with anybody's surprised, like why people take out leverage. Well, because these stocks are on papers up every day. Yeah. Of course it makes sense. All right. Corey Hovstein tweeted this chart from, who made this chart? I don't

know. It says Bloomberg as compiled by Citadel Securities, okay? The combination of concentrated positioning, growing by side leverage demand, and constrained balance sheet capacity has begun of tight in funding markets, pushing one-month equity financing spreads to as high as 138 basis points above Sofer. Prime brokerage, like hedge fund leverage does not show up as far as I know in FINRA margin debt, the chart that we were mentioning. So, yeah, people are speculating their assholes off. And can this, will this cause more volatility, you know, a micron coming down 27% in three

days. Single name volatility to me would be, it's, the risk of that is way big. And it's been, it's just, it's growing. All right. So that, that's kind of, that's obviously something to worry about. It's not a, again, it's not a 1929 situation by any means, but it's, you're right, it's got to be concerning at some point that we could see big air pockets from that. How about this for good news? Small caps this year, Russell 2000, as of the close on Monday, was up 22.3%, S&P up 7.5%. This is a huge, huge weed. So I took all of the Russell 2000's stocks, downloaded them from Y charts, uploaded that to Claude. I said, what's going on here? What's going on with the stocks in the Russell 2000? Breath, not concentration. 67% of the names

are up year to date. Meeting return is over 15%. 900 stocks in the Russell 2000 are up 20% or more this year. So this is not just a handful of names, and obviously with an index that big, So this is like this is a big time widening out of the market. Again, I think pretty good news for Apple market. I would agree. I would agree. All right. Look at this chart from Luke Kawa.

He did this last week. The day Apple announced in the morning on Bloomberg, there was a story saying, hey, Apple's raising the prices of everything. Max, iPads, iPhones, because memory is too expensive now. So they're raising the price. I'm shocked that Apple fell 6% on the day. Because of that? Yeah.

It's a big-ass move. Why? I would have thought that people think that the demand for these products is inelastic and who cares what the prices. It's not going to impact sales. Well, doesn't it kind of show that maybe Apple doesn't have as much power as people thought? I don't know. So he shows, on this day last week, the memory producers, Sandisk and Western Digital and

S.K. Hynex and Samsung gained almost $500 billion. in market cap. The same day, Apple, Microsoft, Meta, Amazon, and Google lost $500 billion in microcap. It looks like a very clean transfer. This is a beautiful chart that he created here. It's a great chart. Hold on, a not so subtle, I mean, this is not a footnote to that story. That was the same day that Micron reported earnings. Right. Micron was up 16%. And they, yeah, it would have been up 16% regardless of the Apple announcement. But why did Micron have such good earnings? Because of the capital. from a hyperscalers. My question is, how long can they let this keep happening?

Who's they? The hyperscalers saying, we're going to lose and you're going to win. And we're basically powering your wins. This is like the Portis Five Forces type stuff. These suppliers have all of the pricing power right now. What's Apple going to do? Make their own memory stuff? Slow their cap-x eventually. Are they going to all live with 30% declines or 40% declines? Apple's not even the one spending the money. I know. So this other Tracy L.O.A. chart went viral from Nomura, showing that the hyperscalor free cash flow projections is essentially going from, I don't know, $700 billion to effectively zero over the next 12 months.

And this is Amazon, Microsoft, Google, Med, and Oracle. I just think we're getting to the point where we're testing, like the metal of these, the intestinal fortitude of these CEOs to stick with this. They keep saying, no, we're going to, we don't care. the bigger risk is backing down. I just think it's really interesting. If we're going to power these memory producers higher and our stock price is going to fall, how long can they handle that for?

From a human perspective, don't you think the employees start going, hey, are stocks down 40%? This stinks. Now, on the other hand, you being a stock guy, what would you rather have right now? If you're buying stocks today,

for the next call it three years, would you rather own meta, Netflix, and Microsoft, or Sandesk, Western Digital and Micron? What would you buy today? It's not even close. The hyperscalers. That would be the way that I'm sure most people would answer. Microns up 1,500% in the last year and a half, justified.

Microsoft has underperformed the S&P since 2019 and it's down 35% from the highs. Yeah, this is not a hard question. Now, for the next three months, six months, yeah, probably the memory stocks. And this is why owning a momentum portfolio is so hard. Because the momentum answer would be, no, you double down on these stocks that are continue to go up. That's why it's hard to do. It's probably why it works too for at least time. I bought Microsoft yesterday. As a guy who keeps retiring from, I bought Microsoft and Netflix. And I said, I'm going to close my eyes and look at it again in five years.

We own, uh, we own sandisk. We own a lot of these stocks in our Porterhouse momentum strategy. Yeah, Western Digital. And we bought Sandisk at like 300 bucks. And then a few months later, we bought more at 625. And I was like, what in the, what? Uh, and, and, But that's part of the reason why momentum works. It does what the humans can never. I would never do that. Are you kidding me? If I bought Sandus in a 300, I'm selling it at 370.

If I'm lucky. Right. That's why to me, I have to, a few people have asked questions about the strategy. Like, why do you do this if you're like a Boglehead person? Like, I will never buy these stocks in my life. I need to have rules-based. As long as it's rules-based, I can stick with it. Here's the thing.

I would never be able to put my own money into these individual stocks and stick with them. But if it's a rules-based thing and it's, and it's a process-based, and it's the factory you're investing in, and not necessarily the companies that, like that, to me, is emotionally easier to invest in. Yeah, 100%. Some people can handle the individual stocks. I can't. So I think that the market is acting very rationally, as insane as it seems, with the memory stocks,

micron's earning since January 22, 5 are up 1,400%. The stock is up 1,400%. It's rational. The free cash flow projections for these hypers going to zero. The companies are getting re-rated and now traded a forward PE the same as the market. Rational. The idea when this started was these hyperscalers are spending money and they're just going to be the biggest monopoly in history. And it's not working out like that.

That is the surprising outcome. It's so awesome to see the narratives changing over the years because prior to the AI era, the question was, what can unseat Google? Like, there's not going to be another search engine. Yeah, that's what unseated to them. Google did. They unseated themselves. Maybe.

But, yeah, like, we were thinking, like, which one of these stocks would not be in the Macs 7? And in no world could we have foreseen a universe where their $300 billion worth of free cash flow goes to zero. Nobody could have predicted that. So here we are in 2026 where everything is outperforming the Mag 7. Look at this chart that Matt made. We're looking at small value, small growth, mid-growth, mid-value, everything really divided

by the Mag 7. And everything is outperforming it. To me, this is such a healthy bull market. This is an everything rally, X-Mag 7. And it's everything you want to see. So if you step aside from the circus, push the leverage conversation to the back burner for a second, and you say, well, what's rallying? Transports, industrials, small caps, regional banks. If you are purely a technician and you don't know anything about the fundamental story of what's happening, forget everything, just look inside the market, you would say, holy shit, is this bullish?

Right. It's crazy. All right. We were on Derek Thompson's podcast. Yeah. Derek does a good job of synthesizing a lot of the stuff that we're talking about, the biggest stories. And then we talk about it and he holds our feet to the fire a little bit.

And he said at the end, like, listen, stop doing the both sides. And what do you think? Right now, is this a bubble? And we both had the same answer. We both said no. Here's why. I didn't say this to Derek, but I've said it before and I'll say it again. Can memory stocks fall 50%?

Yes. Will they? Yeah, probably will at some point in time. Will that have proven it's a bubble? No. The way that I think about a bubble is there is, it's a cocktail of things. You need to have all these things.

Speculation being the first obvious one. Is there speculation? Duh. Yes, of course there is. But to me, it's about the fundamental valuations. Like there has to be, that is the, the underpinning of a bubble in which the multiples that investors are putting on stocks, there is no universe in which the stocks can grow into the valuations.

Like you roll the dice a thousand times and a thousand times they fall short. When Nvidia is training at 24 times forward earnings, is that expensive? Yeah, fine, I don't, whatever. But is it a bubble? Is the market in a bubble? look what the market is doing to the hypers. It's debubbling them. It's saying, no, we're, we're, we're going to, we're going to re-rate you lower.

So I do, I think that this, we, we can get to a bubble, you know, like, we can debate about whether we will enter a bubble. But are we in a bubble today that's going to burst and fall 80% to take everything down with it? I don't really say it. Even though, even though I'm not blind, I see a lot of sense. The cliff has definition was no reasonable future outcome can justify current prices. That's a bubble.

I would think it would have to, like, could we see a situation? That's the dork academic way of saying what I just said. It is, yes. But so my definition is, will the NASDAQ 100 fall 50% or more? To me, that would prove this was a bubble. And I don't think that the market is going to allow that kind of buying opportunity with these stocks and this opportunity. That's why I think this is not a bubble. Well, the NASDAQ 100 fall 50%.

Yes. I think if that happens that, yes, this was a bubble. If the NASDAQ falls 30% when we get a bare market, I don't think that constitutes a bubble. No. 40. 40's gray area. I think it's got to be 50. For it to be a really, like, all the bubbles that people are putting this in the same classes, dot com, the railroad, all these things, this has to be 50% if that's going to be in that class of bubble. And 50 is like light. Like the dot com was 80. 80, yeah. Yes. So. If it falls 80%, the world will look a lot different than it does today. I just seeing, I know, I know you could say, hey, listen, these earnings numbers are just, they're, they're going to go away because all it is is the hyperscalers taking all that free cash flow and it's going into earnings of other companies. That's a, I think that could be a fair argument if you wanted to make it.

Yeah, but they're all saying the same thing. And I know they, I guess they can all change their mind together. But even on Micron's call, they said, we thought that this was going through the end of 2026. Now we see it going through the end of 2027. Right. The demand is there. Are they all wrong? Like, are these hyper-sailers going to rug the entire stock market?

I don't think so. I don't either. I'm just saying it could happen. I don't know. Anything could happen. Right. Okay, so remember the whole debasement idea and the end of the dollar? We talked about this Bloomberg story a little bit with Alex Morris.

He's from FM Investments is going to come on soon. But Michael Semless on his latest piece had all these charts. And it's funny because people keep saying that the dollar's ending and no one wants to invest in the U.S. anymore. And he's saying, look at all the government debt data. Places like China are worse than us. So if you think that the dollar is going away, give me a good, something that's going to step in. Guess what? It's not crypto. It's not the Rambi. It's not one of these other currencies. What else is going to replace the dollar if the dollar is going to fall from its status? Reserve status. Well, that's the thing.

There's nothing. There's no replacement. He says it's 89% of FX transaction. volume right now. Eighty-nine percent. You may have your problems with the debt and the deficits in this country. I get it. It's just as bad ever else. That's the problem. Governments around the world are like the hyperscalers. They all went in this together this decade. Everyone increased their debt by an insane amount. This was the mic drop, this piece. Right? Sorry, it's not happening. You can scare people with all your debasement stuff and dollars and deficits and this is the end of the world and Rome is falling. It's a great story. It's not happening. Sorry. Try again next time. Oh, he had this really good chart in here, too, of how the U.S. is at the lower end of concentration

by country. So the only stock markets that have lower concentration, their top 10 companies, than the U.S. is Japan and India. Everywhere else has much higher concentration. Canada, the U.K., France, like these, their stock markets are all more, more highly concentrated than the U.S. I think this whole concentration worry for the last really 10 years or so. It really started like 10 years ago. I wrote my first blog post in 2017 while people worried about stock market concentration. I really think it's been one of the dumbest worries about risks that we've had. This is just the way the stock market is.

I understood the risk and the worry. I think that if you're still worried about it, you just have to, I'm going to, another happy. You play the field as it lies. This is what it is. I forget where I pulled this chart, but the, I think this is from John Authors, actually, Bloomberg. It's global, as we've said a million times. They show the average market cap of the top 20 stocks in the MSCI, all country world index. It's now 60 times bigger than the average stock of the remaining 2,500 stocks.

And this doesn't look like a cyclical or a, this is like a structural change in the index in the world. right we all know like the balance accrues to the winners i so i asked chart kid um to recreate something similar for the past five years we've been looking at the mag seven as a percentage of the market cap and by the way i saw a chart the you know uh goldman sax is a chart mag seven percentage of earnings percentage of market cap and they've of course they've gotten up into the right together the market cap has outstripped the earnings a little bit that gap is now completely closed. So there are 38 whatever percent of the index and they're 38% of the earnings. All right. Anyway, so if we zoom out, because now there are a lot of gigantic stocks, Micron

is a trillion dollar stock. Broadcrown, like there are a lot of gigantic stocks. It's no longer the Mac 7. So I asked Matt to look at the top 25 percent. I'm sorry, the top 25 stocks. Right. Brought in the universe out a little bit. So look past the Mac 7. Let's go to the top 25. In 2017, for example, the top 25 stocks were roughly 40% of the market. They're now 54%. And I'm guessing there's five of them that are the same maybe since 2007? If this were to return to 40%, I would think it would have to be because they're falling, not because the rest of the world,

not because the 475 is like growing that much. Right. The concentration usually goes down in a big bear market, right? All right. So because of the concentration, all of the breadth data is permanently busted. There are, there is weird things happening inside the market where this data point like,

oh, this has never happened since Bob, blah, blah, blah. Explain breadth for the civilians out there. Does not matter anymore. So the SEP 500 was up 97 basis points. Only 140 stocks were up. That would be weak breadth. It's being led by fewer, fewer stocks. You want broad participation.

People might look at a ratio of advancing stocks to declining stocks to know what breadth is. You want the advanced decline line to keep going up to confirm the rally. All right. So Kevin Gordon tweeted the third straight day with the S&P 500 declining, yet the advanced decline spread remaining positive. Bespoke has a couple of charts in this, showing the rolling number of days with price and breadth in opposite direction. So price is up and more than half of the index is down.

So that means that the mag seven is down, but the rest of the stocks are up, essentially. Basically. Or at this point, it's not just that. It could just be like the software names, because the software names are now big enough where they can power the index higher with negative breadth and vice versa. Right. So you're, a lot of these historical charts. They're going to need a lot of context.

They're busted. They're just busted. So they show the, they show rolling 50-day periods, 100 to 8, 120-day periods, and 200-day periods. And we've never seen anything like what is happening now. So any like historical data on this just is completely useless. Another chart that to me really epitomizes what sort of weird market environment we're in. negative beta. This is from UBS.

They have a chart that shows the largest 1,000 U.S. companies by market cap and the number of stocks with a negative beta to the S.P 500. I don't know if this is like 30-day periods or whatever they're using. Oh, here, it's 252 day. So a negative beta means that stocks tend to go down when the index goes up. That is bizarre. And prior to 2025, the line, there was no line. It, like, happened, like, a few times where 10 stocks would have this, like 10.

And now it's 108. All right. So the previous record looked to be about 10. I'm just eyeballing it, maybe even less. And now it's 108. Now, that is a combination of the energy stocks and the war in Iran when there was peace talks and crude oil fell 9%. And energy stocks fell and the index went up.

So there's that baked into it. And, of course, there's all of the semiconductor trades. all of the AI stuff, all of the hyperscalder stuff. So the market and breadth dynamics look very, very odd. The 2020s have broken a lot of historical relationships in terms of economic data, economic charts, stock market data. It's a brave new world. We should have covered this chart earlier when we're talking about the debasement trade,

but this is my favorite chart that Semblis made. We've seen a lot of charts. showing central banks gold allocation as a percent of their total cash reserves. Right. People have been saying that's the reason gold has been going up for so many years because of central banks buying it. Exactly. And is that part of the story, I suppose, but looking at this chart, and I don't know if

there's like a start date that's moving this, but Michael shows the actual gold shares of World FX reserves, again, up into the right. But he makes the astute observation. it's a price thing. Yeah, when gold goes from 2,000 to 5,500, of course it's going to be a bigger slice of the pie. But are they actually buying gold to the extent that these charts suggest? No.

So he shows, if you assume the actual holdings and no changing gold price since March 2009, they have less than they did in 2009. Interesting. So gold right now is in a 25% drawdown. So that means that that percentage has obviously gone down because the price has gone down. Silver's down 50% from the total from the high. Pretty wild, unwind. Last thing on the market stuff, and then we'll move on.

A couple of good charts from Torson Slack. He's showing earnings growth converging between the MAG 7 and the SEP 493. So in 2023, the MAG 7 grew 34%. The 4903 was down 3%. Of course, that was well documented, right? That's all we were talking about in 2023 because it was the reality that the entire market was being led by the 490, by the by the max 7 that persisted in 2025, 23 and 11. But in 2027, analysts are expecting 19% growth for the max 7 and 15% for the 493, which would be a wonderful development.

So that would be three years in a row of double digit earnings growth for the 493. Yeah. That's pretty good. Pretty good. All right. One final thing on Nvidia is cheap. And I'm going to use air quotes on Nvidia. cheap. If somebody is listening and they were yelling through the screen, Michael, stop saying

Nvidia is cheap. I don't care that it's trading it 24 times forward earnings because we've actually, we did this a couple of months ago, a couple weeks ago. It can't have a premium multiple because it's too big. It wouldn't make sense. It would swallow the market. That's fair. I would accept that rebuttal. So, Nvidia has a larger market cap than Canada, than the UK, then France, then Germany, and then Italy. So maybe they were just bumping up against the laws. of how big a company can realistically get. Anyone in your life who doesn't know how to pronounce in Vida? I think everyone has that person in their life.

Yeah, a lot of people say in the video. Yes. A lot of people are market professionals say in the video. Right. It's like someone who says Chapolte. It's at Chippole. Everyone has that person in life. They just can't get the pronunciation.

I have those words too. Yeah, you say, we all have them. You say DRAM. Oh. It's DRAM. It's DRAM. Okay. But we all have those things.

That's a specific use case, but yeah. Yeah. All right. Okay. Paychecks reported last week. I would think that paychecks is a pretty good read on the state of the labor market. Would you agree? Yeah. This is from the CEO. I would say the macro environment, despite all the potential challenges that we have going on globally around us, has been stable, no signs of recession. In fact, if you look at our index, the last several reports have actually shown an increase in an index under 50. We continue to see good growth. Lowe's. Our core customer is a homeowner.

Wait, there's another one. My mother. She says Loles. What? Oh, like LOLZ? Loles, yeah. Loles? Is that a Lowe's?

She can never get Lowe's. Oh, Lowe's. I thought you meant Lowe's. My mom is very bad at knowing name. So she thinks it's Loles. Anyway. All right. So Lolls says that their core customer is a homeowner

with an average annual, with an average household income north of $100,000. They have gainful employment. They've received wage increases. They have record equity in their home. They have money in the bank. Overall, we describe it as a consumer with a really strong personal balance sheet.

And this consumer is resilient. Yep. You could say that every year for the last five years. It's funny. The word gainful, sorry to keep picking it's here. That's the word you only hear for employment in front of employment. You never use word gainful for anything else besides you're gainfully employed. Correct.

All right. The next thing here, you and I both put this in the dock. And so I must match them together. Yes, this was a viral thread by, I think, Matt LeBronk's brother, Brian LeBlock, from PNC. He says... Wait, who's Matt LeBlanc? Was that an actor? Yeah, he's from friends. Oh, of course, done.

So he's from PNC, and he says they track the debit and credit spending trends of four million households. And he says, long story short, lower income spending balance sheets, trends have been on a tear in 2026. This is a total narrative buster. Why don't you go through some of you? Okay. So he breaks out the lower income, middle income and upper income, the year-over-year change in card spending X gasoline, right? So is there some inflation stuff going on in here? Of course there is.

But the shape of the lines is what's interesting because upper and middle income is dipping a little bit and lower income is straight up into the right. And it had dipped for years heading into like 2025 and now it's gone vertical. So he plots, he plots the gap between the upper income. in the lower income. And that peaked in, what, 20, 25 or so? And it's gone. It's collapsed pretty dramatically from 4.5% spread down to 1.5%. He said, where does this leave us? I'm encouraged by it. Bigger tax refunds, lower withholding taxes, improving job growth and people monetizing wealth gains by bringing more cash into their checking accounts and their brokerage. brokerages have been more than enough to keep spending stable in 2026.

I got to be honest. The data he provided here was very surprising to me. And then he concludes with this, me too. He said, here's where it gets interesting. We're also not seeing any evidence that lower income households are dipping into their savings to maintain spending patterns. If anything, lower income balance sheets may have improved through the war with Iran. Man, this is wild to me. So he's looking at the cash savings buffer days for lower income households.

And he says it shows the median number of days a lower income household than our dataset can maintain their spending trends if their income suddenly stopped and it's still a pre-pendemic levels. He said that being said, lower income households are burning through their tax receipts, their tax refunds more rapidly than last year. Not sure. I mean, this is just the data. He's not doing like commentary or,

anything like that. But yeah. Surprising. I think some people assume when you think about the K-shaped economy or whatever, people assume that these trends are going to be in place forever. And the economy is dynamic. It's constantly, it's never the same. It's constantly changing. It feels like a weird position.

Nobody wants to hear that the lower shape of the K is doing well. Because almost by definition, how can they be? Right. And obviously, the bottom temperature. is never doing well by definition. But this is, you know, this is encouraging. It is what it is. It's good stuff.

I think this, I think one of the big reasons is I've showed on this show time and again, that bottom 50% their increase in equities this decade. It's like a 300% increase in ownership of equities. I think that helps. It's like wealth effect for the, for the bottom half that they've never had before, really. So part of this next chart shows the cash held by households. And it followed a trend of 4.8% or followed a pretty good trend line from 2010 to 2020. And then the pandemic broke it, obviously, with fiscal policy.

And I think everybody assumed that this gap was going to close, that the cash held by households would revert back to trend. So part of the story here is on the other end of the spectrum, the number of ultra wealthy individuals. We're talking about people with a net worth of $30 million. So the journal wrote a piece on this. jumped by 14.4% last year. Obviously, the stock market, you know, drove all of that. There's 556,850 people worldwide by the end of 2025. Fastest pace of growth since 2017.

Again, it's a stock market story. 60,000 people, the top 0.001% of people, are each worth at least $254 million. the population that can fit in a football stadium own three times more wealth than half of humanity combined. Holy shit. So one of the, I mean, obviously, obviously, I think most American listeners,

us would agree that capitalism is awesome. Wealth creation is awesome. A rising tide lifts a lot of boats to varying degrees, obviously. But one of the really gnarly side effects of capitalism baked with social media is a really nasty cocktail of disgusting wealth inequality. And I don't think anybody would hear what we just said and think like, yeah, that sounds good. I'm for that. It sucks. I keep saying it. I think there's a greater than 50% chance we're going to have a socialist present in the next 10 years. Mark it down. I think I think that's,

a real, because this wealth isn't, again, AI is going to make it even worse. I'm just planning that. I just not knowing anything about, I don't know anything about how politics works other than that fact that like putting somebody in office is very expensive. And, you know, people that want socialist socialism don't have a lot of money. So. Well, people don't always agree with what they do with their money. One thing, so I had lunch with a local financial advisor yesterday. And we both talked about this.

And I said, and we kind of talked about how are things going in the business? And I made the comment like, I can't believe the number of wealthy people that there are that we come into contact with. And he said, same with me. He's like, there's just so much wealth sloshing around right now from everything that's happened in this, you know, past 15 years or whatever. It's, there's so much money. Not weird. I understand it. There is like a fantasy of a cohort of the population that wants us all to come crashing down.

And, you know, I understand the sentiment. a bare market in equities, a 50% crash will certainly fix a lot of the inequality. It'll make life terrible for everybody, but... Yeah, but it would be worse for people on the low rent. Of course. Of course. Well, all right, somebody sent this to us a while ago when we spoke about some tax stuff and whatever.

I had it on my screen, so I thought this was an appropriate time to include this. So in 2025, according to the latest tax policy sent to estimates, 40% of households. This surprised me. I didn't realize, I did not know this. Or about 76 million tax units will pay no federal individual income tax. That's a lot. Isn't this just Jeff Bezos thing where he wants to?

Yeah. So this is also not awesome. There was something in here about like, so 70% of those people earn less than $75,000. So the business thing, I guess a lot of, you know, a lot of that is happening already. That's why the tax refunds are getting bigger, right? I don't know. This is like, I'm out of my death there. Quick comment on this story from the Wall Street Journal.

Someone sent this to us. Forget work. Passive income is a new American dream. And they go through all these people who have decided, like, I'm going to start a business. I'm going to have a side hustle. I'm going to create a product. I'm going to create a service. AI is going to help me.

And I'm sick of the 9-to-5 job. And I just want to stand up for the 9-to-5 job. The 9 to 5 job is okay. Passive income is really, really difficult. It's way more work. And I think that's honestly where the story comes down. Like if you do really want to get, it's not as, it's the word passive shouldn't be in there anywhere.

It's active income. Very active. It's really hard to do something on the side. There's nothing wrong with slowly but surely building wealth through a 9 to 5 job. Do you know anybody that has a side hustle? Well, that's a good question. I'm sure I do. I mean, you and I, everything we've done

started as a side hustle. Not to brag. Yeah. But guess what? It's a lot of work. That's my point. Not easy to do something on the side. It's just more work on top of your job you already have.

You're wearing polka dots. You know the scene in, you probably don't know this seed. In Wayne's world where Garth says, it's like people do things just because they get paid and that's like really sad. And he's wearing like a rebog job scene. do it at these drinking Pepsi. It's just...

Coming for the guy who's wearing an IMAX hat. Yeah. Yeah. That's, yeah, that's true. Easily your most quoted movie on the show. You've quoted Wayne's World more than any movie that we've... Right? Without a doubt. All right.

Artificial intelligence. Is this happen? We talked about this with Derek a little bit. There's this subset called the exponential view. And they looked at... Aziz Zahar looked at the Gen. The Gen. A.I. Economy. He said it's generated $110 billion in sales of the past 12 months, an annualized basis that run rate exceeds 175 billion.

And he's got a great chart in here. It just keeps going up. And this is like how much money is actually being created from all the AI spent. And it's going up at a pretty fast rate. It's funny because numbers don't mean anything to me anymore. Like I look at this number and I go, that's why you have to normalize it to the moon and back. Right.

I'm like, is 175 billion a good return on all that capital? I don't know. But I think as long as the chart keeps going up, then you say, okay, this is, something's happening here. He was saying, like, this is great news. Like, it's finally happening. Getting back to the conversation earlier in the show about the cash flow going to zero for these companies, do we think that it's more likely that we look back in two to three years and say, can you believe we didn't think that this is going to work?

Like, these guys were just, like, completely asleep at the wheel. They had no idea they just drove their business off the cliff. or is it more likely that, yeah, they actually had a plan. And trading at a market multiple made no sense. It was a generational buying opportunity. That was my point to Derek, that these are the biggest best run companies in the world. And it could be one of the, this could be the biggest folly of all time. And we have egg on our face.

You're like, you idiots, they didn't know what they're doing. Come on. I don't believe that. It's possible. It's possible that Sundar Pichai and Satya and all these people. It's possible that they're all complete morons. but how dumb do you have to be for that to be your base case? Yes, I don't believe that.

All right. From Ramp Economics Lab, I love this sub-sac, A. Karazian, who we've had on the show before, actually, he says, is AI actually a job maker? Firms that adopt AI grow a headcount at 10.2% faster over two years following adoption. Entry-level headcount grew even faster at 12%. And he's got this chart here that shows firms with high AI adoption are seeing growth in their number of employees.

This is a head scratcher to me. Now, you could say, and you've said before, why, this is still early. Come on. I think this is a positive sign for what I think is going to happen that AI is going to lead to more work. You could also make the case that this is still early

and the companies that are most aggressively leading in are best positioned to take these sort of risks. Fair. You think that AI is going to It's possible. Early positive sign. We haven't seen any really huge negative signs of AI yet, is what I'm saying. Correct?

Not a huge one that like, oh my gosh, yes, this is the end. We haven't seen that yet. That anecdote hasn't happened yet. Even in the data especially. All right. I don't know. I'm sure there's been worked on on this. when a company puts their name on a stadium,

it's usually not a great sign of capital discipline. So, Kurt Badenhausen tweeted, The Warriors signed a new Jersey patch deal. Oh, it's just a jersey patch. All right, never mind. With AI Cloud from Iran, but nevertheless,

costing more than $50 million a year. That's a lot. I don't know how to calculate that brand recognition. It is. Okay, someone, I said last week they need better names for AI. They all have to use a name. And someone says in Tokyo, the nickname for Chad CPT is Chapy.

Okay. That's not bad. Not good. But it's not bad. All right. What's the mode here for prediction markets? I said this last week. Like, where's the moat for Cali-Shian Polymarket?

New York Times says Mark Zuckerberg directed meta to create a prediction markets app. What's the mode? Well, we discussed this last week. record that there are a lot of examples of companies where you would say, well, what's the moat? And they've gone on to do incredibly well. Now, maybe I have one example, but still, one is one. Is it not? It's more than zero. But degenerate gamblers will go wherever they're treated best. Well, why would they be treated better anywhere else? The odds are the odds. Once you have the customers, why would they go somewhere else? Maybe better sign-up bonuses, but like, all right.

I just, what was the moat for Fan duel and draftings and MDM or whatever? Well, first of all, why is that the criteria for anything? But I'll tell you what the mode is. Because the reason all the growth is happening for Kelchian Polymarket is just because of sports betting.

That's it. Sports betting. Okay. So I'll tell you what the mod is for these companies. For me, I have a FanDuel account and I've dabbled in with FanDilx and draft Kings. but I've bet

whatever I've bet on Fandall, that's my personal record. So I want to know what my track record is and I had a pretty good run on the NBA playoffs, not to brag. So I am back down to only seven cents of losses per every dollar spent. So that's the moat, at least for me.

That's why I'm not leaving Fandall. I just, when it comes to sports betting, I just don't see any moat at all. And I feel like these are fly-by-night companies. There's going to be 12 more of them. Maybe I'm wrong. Well, yeah, maybe you're wrong. I don't know.

I don't really have a strong opinion here. All right. Michael Saylor tweeted, volatility, test every capital structure. Strategy remains focused on Bitcoin, disciplined capital allocation, credit quality, and long-term value creation. This is not The Onion. He actually tweeted this. We appreciate our investors and we'll continue to execute with transparency and resolve. You and I saw him speak at a conference like two years ago.

And Bob Pisani was interviewing him. And Bob's entire body language was, and he didn't say this if I was, I feel like I'm taking crazy pills. Yes. He was like apoplectic. So I'm going to get into this tonight with Josh and what are the thoughts. I don't want to say too much other than the fact that strategy is in a 30, what, 50% or whatever it is. Strategy is getting killed. It's down 82%.

It is? 82%. Yes. Okay. 30. 80. Okay. They issued a preferred security that was supposed to trade a par.

It's now in a 18% drawdown. Not awesome. They're selling Bitcoin. Yeah, the yield tire. But what is interesting, and I keep saying this, like there are things happening with blockchain stuff despite the crashes in these companies. And by the way, a couple of weeks ago, when you told me Visa was in a 12% drawdown when I mentioned these names, Mastercar was at a 52-week low.

Okay. So I think these companies are being. I think strategy getting blown out of Bitcoin is the best thing that could happen for Bitcoin. Yeah, I would agree. I would agree. So Torson Slack tweeted, the tokenized real world asset market has grown to nearly $32 billion, highlighting increased institutional adoption of blockchain-based infrastructure. $32 billion is not like $20 million.

That's a real number. So he breaks it down by U.S. Treasury debt. That's like $15 billion worth of tokenized assets, private credit, commodities, stocks, and others. this is going to be $100 billion. I guess I'm just thinking of the way that how could, how AI could save crypto somehow and really use the blockchain. There has to be a way. But, I don't know.

You said 170 billion for AI is not that big, but 35 billion for crypto's big. What did I say 170 billion? I didn't say it's not that big. Yeah. All right. I still just think that with all the fanfare that we heard about all the things that crypto is going to do,

if stable coins are the thing, that's going to be a really boring outcome. From all the things that this could fix this and it could fix this. What have tokenized real world assets are $100 billion? That's not nothing. Yeah. Huh? It's not, I don't know. No, listen, two things can be true.

The hype was ridiculous. Yes. And we've paid way too much attention to it. But it was also a new asset class, a new vehicle like, it was exciting. The fact that $2 trillion was created from thin air is unbelievable. Is that nothing? Like, is that a failure? They invented a new asset class that people, institutional investors allocated to.

Overhype, sure, but not, you know. All right. So we talked last week on Asht the Compound. Someone asked, hey, I live in North Carolina. I've got a 2.9% mortgage, but the house is too small for my family. The kids are growing. Moving into a new one would be a 6.5% mortgage. And someone, and I said, you know, if it's going to make your.

life better, do it. And someone in the comments said, sorry, but trading a 2.9% mortgage for a 6.5% 1 on a much higher loan balance is an idiotic move. Quality of life is defined by the people you're spending your time with not how big of a house you're spending that time. And there are numerous academic studies that conclude upsizing your home doesn't lead to higher overall life satisfaction. Well, I'm a perfect, I am a perfect counter example. Yes. This is why I think sometimes behavioral studies are just flat out wrong. So I trade, you did this and I'm sure you're much happier. I did this. My mortgage, I went from 2.9% to, where am I now? 5, 5, I think. My mortgage payment is way higher than it was in my old house, like an uncomfortable amount higher. But I did this

for my family and for my life and to be on the water and to make lifelong memories with my kids. Now, obviously, obviously there's like a line. Like if you can't do it and you are diminishing Reaching returns at some point. And there's... Right. But I'm just saying, like, if it doesn't make financial sense to the point where, like, if this, if this blew up my life where I wasn't able to do things because I was underwater on my mortgage payments, obviously, that's a stupid decision.

This person of the questions had, listen, I can't afford it. I just don't know if I want to. Fine. Do what you want. Right? This is, like, personal finance stuff. But I said, I said, do it. Because the house is honestly something that will make you happier.

It will put you in a much better mood if you're in a much happier house situation. I totally agree with that. I think the behavioral studies on this are wrong. I would say it depends, but I generally agree with you. Diminishing returns, anyway. I agree. We've been talking about this. The fact that the economy continues to be as resilient as it is

with the housing market in a depression is remarkable. Right, there's this idea that there's a line that housing is the economy. Guess what? No. Kevin Gordon tweeted new home sales fell sharply in May, down 7.3% and are getting closer to the cycle lows. And Tal Smith said it is still completely insane. Now, GDP has been above trend the cycle while the housing sector typically responsible

for up to 20% of commercial activity has been effectively frozen. Now, it's not like a mystery. Like, well, what's happening? Well, yeah, it's all AI. So Warren Pises of chart showing residential fixed investment in raw dollars versus is information, equipment, and software, and it's just the lines have just gone, whoop. Guess what? Most people would prefer if we built more houses than more data centers.

But that's not where the incentives are right now. Somebody sent this article to us. There was an article in opinion piece in the FT. Your summer holiday is a retirement killer. And basically, like, if you were to invest the money instead of spending on X, Y, and Z. And I think this was satire, but I can't, I'm not 100% positive. I think this was like very dry British humor. Did you read the article?

Okay, I did kind of skim it. I didn't, I guess I didn't get that. So the whole idea was, yeah, if you just take the $10,000 you're going to spend on vacation and grow it over 30 years, this is how much you're giving up, right? Yeah, now I'm like 65% sure. I'm not, you know, I don't know. I don't know who this person is. But I think we would all agree that if you are. putting an 8% return on your vacation and depriving your family of these memories because it could

be worth whatever. Yes. This is, this is satire. And the thing is, some people probably would look at this as being real. He's like, that $10 a day you're spending on ice cream for your kids could be $2,000 by the time they retire. The Walsh Journal and an article, no hair transplants, pills, or toupee, meet the men embracing baldness. I've been bald maxing for years, and I wasn't asked to opine. Yeah, we got a lot of this. Yeah, someone said Michael should have definitely been interviewed for this. I mean, these, if these solutions are coming, I mean, if you're a bald person and you grow your hair back, I'm not going to look down on you. I think you should, if you can do it, I think you, I don't, I don't care. But Josh has regrowing his hair somehow.

He's injecting himself. Well, I heard he did, I heard Josh did a speech for a group of advisors in Turkey. And then he came back. I don't know what happened. It does it pretty good. One more personal finance thing. So it is funny because a lot of what we've been talking about in the last five or ten minutes is just judging people on their financial decisions. And I think I'm not one of those persons that says don't judge people in their financial decisions. I love judging people in their financial decisions. Oh, it's great. Internally, right? It's fun. Yeah, we don't publicly shame, but. But we always get people, we've talked a lot on this show before about the benefits of

leasing versus buying. We've run the numbers. We've gone through the post. Like, we've looked at it. And a lot of people, every time we talk about the fact that you and I lease cars, someone will comment that we're idiots, right? I get it. It's like, it's not the greatest financial decision in the world. But I think there is a huge benefit of leasing a car today than way more than there was in the past. So I got my new telly ride. And it's funny, you got a range rover or lander? I never know the difference. Range. What's the difference between a range rover and a land rover? Yeah, different cars. Okay. And I drive like a Kia teleride or whatever, and someone's like, hey, I have it a few people say, hey, it looks like a range rover. I told you,

It's kind of, I'm a homeless man's range rover. But the biggest benefit of leasing today is all the new features you get in these cars. I feel like the features are multiplying in terms of the cameras and the safety and the alerts, in the sensors, and these self-driving capabilities. Driving a new car is just way safer for you. It's also making it like impossible to fix. Oh, yeah. My dad got in a fender bender and it's $6,000.

Oh, yeah. That's not on me before because all the sensors. It was $12,000 for a bumper. Car insurance. I guess that makes sense why it's going higher. But you go on the highway, and it's not like Tesla self-driving, but it's like adaptive cruise where it keeps you in the lane and it steers for you, and it slows down if the car in front of you slows down,

and it speeds up if it speeds up. And I just think that the amount of features that happen in two to three years is kind of insane these days. The technology is getting so much better in cars. Yeah. That's how I justify my terrible financial decision, at least. It's not a terrible financial decision. I know.

What about this? It's fun to get a new car for three years. It really, honestly, for a week, my kids are talking about the new car smell is so good. My kids were just going and sitting in the car in the garage sometimes because they like the smell so much. Once the last time you had Domino's? Pizza? Last night, my son gets it every Monday night. It's his favorite pizza in the world.

We have a Domino's right. It's the closest pizza by our house. Every Monday from him, I will now get it. It's the sun in the summer. I'll get a text. Hey, when are you coming home from work? Can you give it to Domino's the way home? It's his favorite pizza, but we had a birthday party for him and his sister and all their friends came over.

What kind of pizza we get? Domino's. Well, turns out that George is alone on this one because pizza slice keeps shrieking. The journal had a post showing that Mexican is going up a little bit. This is the market share of like these restaurants. Pizza is crashing. If you look at Domino's stock, it looks horrible. Stock that I owned in the past looks horrendous.

I think the CFO just resigned or I can't remember what's happening, but really bad. Chicken. Chicken is going up into the right. One from 10.5% in 2019 up to 13.5% today. This chart is a little bit of a truncated chart crime. This is like a misdemeanor of chart crime because it's, it's a very small axis. 9.5 to 14%. But you're right.

That's a big change. We had, I had a party for Robbins 40th birthday. Never had a party in my old house. We had a bunch of friends over. It was very nice. at the end of the night, Robert and I had been drinking. And I said,

you know what? It's got Domino's. It's been a while. It was terrible. Really? And I hate to, I really hate to be like the food snob guy because I grew up eating Domino's

and I thought I liked it. Or maybe it was just, it was too late and we got like, you know, because one of the reasons that stock did so well for so many years is because they improved their quality. It was not,

it was not good. But one of the reasons that pizza is losing share is just because there are so many better options out there today. People got more pizza in the past because there wasn't good options for eating. And pizza was the only one that had delivery. Now you can deliver DoorDash and you can get other stuff. So that's why that's happening. This is a DoorDash phenomenon. All right, go ahead. Okay. Okay. So there's the Tony Soprano idea that Remember When is the lowest one of conversation. We've done this before and we make fun of Chris because he's the biggest

remember guy. Yeah, but I reject this premise. Tony Soprano was one of the least happy people alive. He had to go to therapist because he was so unhappy. I think there are times when remember when is the bed. There are certain people who do it way too much. Of course, right? One of the people we work with is one of them. But I think there are times when it is useful. So this past weekend, my parents have a cabin in the middle of the woods on a river. It's like there's no cell service, there's no TVs, there's no technology, there's no internet, there's no nothing. It's like in the backwoods, middle and there are two tracks. road, right, on the river, and you go there and you play yard games and you do a campfire

and you go kayaking on the river. And so I went there with a bunch of my brother's friends, kind of like everyone wants to keep get together, remember my brother. And all we did all weekend was drink beer, go kayaking, do camp fire, play yard games, botchy ball, you know, that kind of stuff and tell stories about my brother. And I had the best remember one day of my life. It was so fun telling stories. But that's the kind of stuff we'll remember when it's good for you. Huge remember one guy I love it It was actually like very cathartic for me

And good to have it and like got it out of the system And like all we did is tell stories all weekend And it was so much fun I'd laughed all day That's what life's all about Remembering the good times, right? Yes, exactly Recommendations

I want to talk about why rewatchables Is for me unequivocally The Best Podcasts of all time So they're going through Hell Month Which is 90s nostalgia. So what is from hell? And why am I talking about this? Because it's my podcast. The tenant from hell, Pacific Heights. The roommate from hell. Single white female. The nanny from hell. The hell's that? Oh, the hand that rocks a cradle.

Stepdad from hell, domestic disturbance. All right. So Bill Simmons on the rewatchables, goes to all these movies. I watched all of them. And I watched domestic disturbance, which I had, I did see when that came out. That was with Vince Vaughn and Travolta. Terrible movie. Terrible movie. So I watched a movie, rewatch it. So bad. So, so bad. And then I listened to the podcast and it was amazing. I mean, obviously it's an intentionally bad movie or they did because it was, you know, It was horrendous. But those guys, you got to give credit. It's a very good podcast.

It gives me ideas of movies to rewatch as well that I would have never thought to rewatch. So I don't know that I saw. I know I've seen parts of single white female because I do remember it was probably on TBS and TNT and T&T all the time, seeing Bridget Fonda and Jennifer Jason Lee with the same haircut. Yeah. But Pacific Heights? I never saw that one. Matthew Modine and Melanie Griffith.

Isn't a Michael Keaton movie as well? Michael Keaton, of course. When I'm saying? Yeah. Okay. So should I watch them? I think I've never seen it before. Yes.

Yes. Yeah, it was good. Really enjoyable. Terrible movies for the most part, but, man, great podcasting. All right. A couple of, I don't know, last month, the other month, I forgot to mention that I watched. What I thought was a very good doc. You ever see The Dark Wizard on Max?

The Dark Wizard is about, like, one of the pioneers of rock wall climbing. What's that thing where you, oh, free soloing? Like just without a rope. And then he got into hang gliding or like where you just, you put like the bat wings on. And spoiler, he didn't make it. But it was a, it was very good. Oh, okay. Those guys are nuts.

Absolutely nuts. Do you watch, do you watch Hot Day, House of the Dragon? Oh, yeah. Here's the thing. I was going to talk about this. So my wife's like, do you want to watch, she's like, she watches all the TikTok videos to know what's going on and like this person is this. And she's like, do you want to watch the review of last season, like the recap?

And so I was like 10 minutes long. And then 20 minutes into the first episode. I'm like, wait, who's that person? Wait, are they good or bad? Is that... But that's why I love Game of Phyllis because I can turn my brain off and just be entertained. And I don't have to be one of those nerds that knows like,

oh, this is the house of Barathean. This is that, like, I don't care about any of that stuff. I just like being entertained. It really is remarkable. But I'm constantly confused. Because I watched the recap. First episode was fantastic. So it was a second.

But I saw the recap too. And I was like, wait, that happened? I don't like remember any of this. Right. And even... 30 minutes through episode one, I have no idea what's happening, honestly. I couldn't tell you which family, sometimes,

but like which kid belongs to which mom and blah, blah, blah, blah, blah, blah. I love it. Can't tell you anything. I have no idea what's happening, but it's great. I'm the same. All right, so my son has been really big into alien movies. I think it was because of Project Hail Mary.

So he's, Dad, give me more alien. We watched a bunch of alien movies, and finally I let him watch the alien movie, okay? So Rony Weaver. And so he watched that and absolutely loved it. And he goes, are there more? And when, you know, he watches that in Amazon, it shows the rest of them.

He's like, how many of these are there? So I pulled it up on Chad ChpT, we got them in order. Right? And so we watched Alien, aliens, aliens, Alien resurrection, Prometheus, Covenant, and Romulus. We watched them all. I looked at, like, I never thought of, like, where do these movies rank? Where, when did they happen? Right?

I never thought, I knew Prometheus was the prequel. That's about all I knew. And he loved every single one of these movies. But it's kind of funny because as they got further along you got, the technology got better. Right? Because the first one was in 1979. The technology gets better and better and better, and the action sequences get better. But none of them come close to touching the first movie.

Not even close. No, aliens is the best. Alien. No, aliens, the James Cannon movie is by far the best. The second one? Yes. You think the second one is the best? No, the first one is by far the best.

No. I like the second one. Alien was great. So this is... Alien is more of a suspense through aliens. It was a better action movie. Yes. They were very different movies.

You're right. Alien was like a slow burn. I think none of them, even like the fact that they didn't have the technology back then made it. But you never make the movie Alien today because it's so much slower. Did James Cameron to the original? And Ridley Scott did the second? No, Ridley Scott did the first one. Okay.

I forgot that there was seven of these movies. Yeah, my son ate them all up. This is my favorite movie franchise of all time. Did you know that? I think you've mentioned that before. So, yeah, we watched them all. But wait, hold on. I'm surprised because the second one is quite scary.

when Newt's parents are like stuck in the wall and they're like white as a ghost, he wasn't scared? So my son has the same thing as me. He does not get scared by these movies. They don't scare him at all. He finds them entertaining. Like it doesn't impact him at all to see all this stuff.

He also watched the two Alien versus Predator movies, which are complete garbage. AVP2 is the worst movie. So I love the first one when they're going down. Garbage movies. The second one is AVP2. was it Requiem? Yeah, it just...

Worst movie of all time. I watched that with Robin back in the day, like 2006. We were in my bedroom, and I'm watching it on bootleg, and she's like, what in the hell is this garbage? Terrible movie. I got one more. The bear on FX is like The Hangover. I don't know why I'm still watching it.

It's on season 5 now. Sometimes you have lightning in a bottle and you cannot recreate it. Like, the Hangover 2 and a Hangover 3, it was the same characters and they tried to recreate magic and it just never happened and you almost wish they didn't make them the Bears season one and two is like

one of my favorite two television seasons of all time and season three, four and five just got progressively worse where they obviously ran out of ideas and did a complete money grab and the show is almost unwatchable now why am I watching it?

Suncaused fallacy I don't know I have one thing before we go so Ben and I well actually you don't work from him I work from home And it still feels weird that I work from home. I mean, I'm in the city once a week.

I go to Belmore here and there. But I really primarily am in my house. And it still is very bizarre. It's not new, but it still feels new. And it still feels like I'm like cheating or something. It feels like it's weird because you feel like you're on an island sometimes. It's bizarre. It's a bizarre thing.

And obviously, like, I feel blessed out of my mind that I'm able to do this. Right. I'm not everybody's so lucky. A lot of people have to go to the office and they have jobs where they can't work from them. So that's just a little bit throat clearing. I feel extremely lucky to do this. But it is, it does do something weird to, for me, for like the father, son or kid relationship. So Kobe went to sleepaway camp on Saturday.

And the night before, and like, I was just like, yeah, I'll see you in seven weeks. And he loves camp and like, whatever. It's all great stuff. But I feel like my sort of like, whatever. about it or just like just in general with being with him all the time when when our parents came home now I guess my dad didn't even come home because my parents were divorced but for for nonbroken households back in the day when your parents came home like work was done right like they left work and they came home and they gave their kids all the attention I feel like I am giving my kids

like I don't know 8% of my attention because I'm with them literally all day every day Now, like, you know, they don't, they're not homeschooled. So, but like, I'm just, I'm around all of the time. And it's like a tradeoff. Like, so I'm not suggesting that like, it's better when our parents went to work and came home and were with the kids, right? Because then they missed a lot. They missed like sports and whatever.

They just weren't able to be around. But it is like, it is doing some, some stuff that I don't love that I do feel like I'm like sort of not present taking it for granted because I'm with him all the time. It's a completely different. It changes a relationship in a lot of ways. I totally agree. My dad never once brought work home with him. But parent didn't spend as much time.

with their kids back then, no parents did. It was just kind of known that, like, you weren't spending as much time with your parents. You were kind of on your own. Yeah, it's just, it's weird. Like, I feel like disconnected, but even though I'm with him all the time, I don't know. It's just, it's interesting. I get it. Okay, glad you got that off your chest.

Just what I've been thinking about. I say what you're saying. The way that we parent our kids is totally different from the way our parents parented us. But their parents did it different to them, too. So it changes. Yeah, I'm not saying like it's all bad or it's all good. It's just, you know, it's different. All right.

Whatever. Whatever, as Bed likes to say. Adable Spirits at the compound news. Hope everybody is enjoying their summer. You know what I'm trying to do? I'm trying to remind myself getting back to Kobe that he'll be home in 47 days. We have a reprieve. I love him.

He's having a great time. It's all good. But summer goes so fast. I'm trying to enjoy every day. you're going to be saying, can you believe it's fall already, Ben? Before you know it. I am, I will not apologize for being a can you believe it's that time, Jack.

Happy Fourth of July to everyone. Hell yeah. Great holiday. Behind Christmas is my second favorite holiday. I love the Fourth of July. Can't wait. Sun, water. Let's do it.

All right. See you next time. Hey, y'all. It's Kelly Clarkson with Wayfair. Ever order furniture online and wonder what if, like, what if it doesn't hold up? That sofa was blue. four days old. You should have ordered from Wayfair. With Wayfair, there's no what if. Just style you love and quality you can trust. Visit Wayfair.ca.