Animal Spirits Podcast - Is the AI Trade Over? (EP. 439)

Episode Date: November 19, 2025

On episode 439 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss: the Degen Dow pain trade, the lack of euphoria, AI skepticism, long bear markets, Michael Burry's crash calls, the great stuff transfer, the Bitcoin crash, first-time homebuyers, Blue Owl and much more. This episode is sponsored by Nuveen & YCharts Invest like the future is watching. Visit https://www.nuveen.com/future to learn more. Register for the November 19th webinar with Nick Maggiulli here: WEBINAR REGISTRATION and get 20% off your initial YCharts Professional subscription HERE when you start your free YCharts trial through Animal Spirits (new customers only). Animal Spirits audience survey: https://www.surveymonkey.com/r/P6T79NB 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

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Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. We have one request of you, please, if you are a financial professional, advisor, investment manager, portfolio manager, analyst. We want me to take our survey. We put it out last week. We're going to do one more plug in the show notes. Click on the show notes and wherever you listen to your podcast.

Go to irrelevant investor.com or a wealth of common sense.com. There will be a survey. We want to hear from more financial professionals. And also, anybody else who missed it the first time around? We'd love to hear from you. All right. I got a take here So the market is rolling over

The speculative stuff is getting dinged pretty good I had this take here before this stuff All kind of started happening There's no euphoria in this market This is like a kind of It feels this year like a joyless bull market And so it doesn't Like for all the bubble talk and everything

Like this is going to be crazy I don't think we ever got to a euphoric phase. I disagree. Okay, I'll see it. So there is obviously no euphoria today. However, over the summer and into the fall, when Open AI was making announcement with everybody and Oracle, for example, who stock jumped 25% on the day, there was absolutely

euphoria. Now, it's not here anymore, but one of the largest market caps in the stock market, adding several hundred billion dollars overnight or whatever it was, that was absolutely euphoric behavior. Do you feel like anyone wants a bubble? Like anyone is happy about it? Wait, hang on. Do you disagree with what I just said? Or are you, yeah, actually, that was euphoria. I guess that was like an overreaction. But again, I think the euphoria is in the tech CEOs, not the, not the end investor. Well, certainly not anymore. It's over. Whatever, whatever euphoria we had is gone. Listen, if that, let's say that was it. That was.

was the height of the AI craziness. If that was it, that was a weak bubble. Okay. That was nothing. Okay. So let me, let me ask you this. What is it over? No way. It can't be. There's no way. If that was it, I love it. I love it. I love it, Ben. Finally, a take. No, I'm saying if that was it, then this is, that was the worst bubble ever because we didn't, we never got the exciting part. Like, like the really big blow off top. Come on. If that was it, that was weak. That was not a good, it was not a good bubble. I agree. Worst bubble ever. I agree.

I would say, I don't know, 75% confidence that wasn't it. I think whatever's going on right now is healthy. This is a very healthy reset. You need skepticism. You need the wall of worry. Unless it's time to worry, then you don't need it. And you can't have these massive gains in these junkie stocks forever. There's no way that could have continued.

Yeah, the difference is that the fear, not difference. The fear seem warranted. I'm not going to completely sweep them under the rug. The fears are warranted. they're justified, the pullback is healthy, and also that wasn't the top. How about this? I think the whole, everyone, there's so much skepticism about like, gosh, this is good. This is a bubble expectation of being pulled forward.

I think that mindset is actually good for this whole thing. Yeah, it's keeping it lit on the euphoria. I love it. It's healthy. I really do think it's actually like kind of healthy. So who created the DGEN DAW? Was that you and Josh? Okay.

Not me. So Matt updated this for me through yesterday. And this is like the biggest degenerate stocks you can think of. quantum computing and the meme stocks and all this stuff. And so that this basket, I think he equal weighted them, is down 20%. The S&P is down three. It's kind of funny. The S&P's down 3% in this whole thing.

So obviously a much bigger drawdown. And if you look at through the individual names, it's way worse. The Roundhill meme stock ETF is down from a high of 11 to 6.2. So that's 40% drawdown. Some of these stocks are getting absolutely. Oh, yeah. There is, I've said this before. I'll quote myself again,

a healthy, uh, corrections only look healthy in other people's stocks. If you own, if you own a lot of these stocks started getting mauled, and there's a lot of stocks that are down more than 30%

like mega ones that Josh and I are going to talk about on what are your thoughts tonight? It doesn't feel so healthy. Yeah, we're talking like 30, 40, 50% declines at a lot of these names, but some of these stocks are still up like 100% on the year. So it's, I told you this.

I heard a story about someone who said, hey, my husband has been trading quantum computing stocks all year. He made like a million dollars. And it's like, come on. You can't have it be that easy in this junky stuff. So I think this is all a good thing. You know what?

I think part of the overall story and why there's so much skepticism, like the economist has this had on the cover last week. Yeah, see, this is my euphoria thing. The media is not trying to stoke any euphoria. That was, that's the biggest difference between now in the 90s. In the 90s, the media was all in on the euphoria. This is, this time it's not. It's so skeptical.

So Gavin Baker tweeted, Sam Altman's manifestly ridiculous, one trillion dollar spending commitment, it shifted the AI investing landscape, the market is more skeptical now, ironically, makes an IPO harder for them, also likely ended any potential for a 1999-style melt-up, which is healthy. I agree with the last part, which is healthy. I don't think the, I don't think the 1999 melt-up is off the table. But Paul Graham, very much a Silicon Valley dude, just said, if you invested at the peak of the NASDAQ in March 2000, it would have been roughly 18 years before you were whole again, 15 years before the index reached the same point, plus another 3% for

inflation. So I think that the euphoria is amongst the hyperscalor CEOs. As you mentioned, they're not relenting. And everybody else is skeptical. And I think part of the bigger picture story is, of course, overall skepticism of AI and taking people's jobs. Matter of fact, let me, let me play this clip. This is Gavin Baker. Not Gavin Baker. I'm sorry. This is Brad Gersner on the All In Pod. One of the major concerns I have is that AI is becoming deeply unpopular in America. Silicon Valley is losing the battle around AI. Doomers are now scaring people about jobs. They think all these job cuts that are going on in America are the result of AI. And number two, they're seeing their electric bills go up and they

think that's also the result of AI. I've talked with a lot of Republican senator and House members who say they are afraid to mention the words AI because their popularity ratings go down. So there is skepticism everywhere. It is, as Brad mentioned, deeply on and it's part of this broader story of corporate America outpacing Main Street America and people are sick and tired of all of the gains in the economy seemingly accruing to the mag seven people are just over it imagine being in a blue-collar job and thinking like why should I why should I want this technology to come here and take it and make things worse but nobody's nobody's rooting for it except for Altman and Satya who is doing four podcasts

But the thing is, all the skepticism we've had, remember when the deep seek thing happened? It's like, oh, my gosh, it's over. Every time one of these hiccups happens and people say it's over, do you think that's stopping Mark Zuckerberg from investing in this more? Now, the investors could continue to sell the stock, and that would maybe slow him down a little bit, but it doesn't seem like these CEOs care about any of the skepticism. Mark's not stopping. Look what he did with Reality Labs.

Look how far he pushed that. What was that? Tens and tens of billions of dollars of losses. All I'm saying, it's like, come on, if that was the end of the bubble, then that was it doesn't really count. That was weak. All right. Healthy correction.

That's where I stand. Stamp it. Healthy correction. I agree. I tweeted this chart that I had chart kit create and I took this idea from Dan Wang's breakneck, I believe. Or maybe it was Apple and China, actually. Actually, I think it was Apple in China.

The numbers here are so insane. So there was Tratter over the weekend that Tim Cook's run may be coming to an end. The numbers here are so insane that they literally, it doesn't seem right. I had a lot of people fact-checking me. Like, a lot of people, I'm not mad. The numbers don't seem right. And I think what this does, we mentioned that there's no euphoria. Maybe the euphoria was in the market cap. Even though in Vidia, the forward PE kept going down because they were exceeding earnings expectations, $5 trillion is a lot of market cap. A trillion dollars is so hard to wrap your head around

that Tim Cook, since he became CEO, added. Which was what, 2011? 2011. So every single day, not every market day, every single day. And I believe the market cap was like $350 billion when he took over. Yeah, it looks about right. Was that about right? Okay. Yeah. $700 million a day, Ben. $700 million a day in market cap added. So I don't think people remember at the time. But when Steve Jobs passed away, Apple had a little bit of a sell-off and everyone's going, oh my gosh, this company is done, right? And a contrarian guy catching the falling knife, I went in and I bought Apple then in 2011.

Yeah, but I blame you. I sold it in 2015 when I came over to Ritholtz. I moved all my money over. And I said, I don't, I had, the only two stocks I owned were Apple and Google in 20, and I sold in 2015. They were both overvalued. Obviously.

But I don't think people forget that. People were so skeptical of Apple, like, oh my God, if Steve Jobs is gone, how is this company ever going to perform? Like, it's over. He's a manager. He's, he's not an engineer. Like, what does he know?

So wait, but you posted this on Twitter and then it went viral and Elon Musk's replied to it. So you're, you're, um, don't even look at your replies today. Yeah. Elon, uh, said impressive. And it is. It's a wild, it's a wild, wild stat. All right, back to the AI hate. So this week from the Wall Street Journal, Wall Street blows past bubble worries to

supercharge AI spending frenzy. Uh, also from the Wall Street Journal. When AI hype meets AI reality, a reckoning in six charge. There is definitely skepticism all over the place. And not in, like, journalism news. Like, let's look inside the market, what investors are actually doing. Lisa Bramooks tweeted, tech bonds are getting hit hard of late as debt traders start wondering if they're getting left with the bill for the stock market's enthusiasm.

Oracle's $3.5 billion of 30-year debt issued in September has cratered by 8% from the October peak. Okay, you can't say cratered rents and 8% loss. It's a bond. That's a crater. Cratered? Come on. Declined.

That's a crater. All right, on the positive fundamental... And Oracle is the one of them that actually has taken out a lot at that, right? They're the one. On the positive fundamental side, now, listen, I think... Wait, wait, I can't have Oracle crash because Larry Ellison has to fund me a new college football coach when Michigan fires Cheryl and more. So I can't have Oracle crashing.

I bought the crash, uh, hand up. I bought a... Who did you buy? I bought Oracle. I sold Disney finally and I bought Oracle. How much did they fall by? 30-something percent. Oracle is down 30 percent.

Okay. Well, how's this? another one from this morning. Where is this chart? Yeah, you're right. Oracle's down 30. It's crazy. When you look at the,

and we're going to look at this in a little bit, but when you look at the drawdown profiles for tech stocks or pretty much anything, all of these had 30 or 40 percent crashes in April. Then they came roaring back and now they're down 30 percent again. This year is a wild year in terms of volatility. Where is this chart? Oh, okay. Financial Times this morning.

The headline was like the AI trade, Oracle is now $60 billion negative or something like. that. Look at this chart. It's a little bit lower in the deck. Oracle Market Cap, September 10th pre-market, Oracle and Open AI announced a $300 billion AI data center agreement deal. Shares close up at an all-time high, up 37 percent. All right, that was a euphoria. Up 37 percent of the day. 37 percent for Oracle. That was that was nuts. You're right. Those numbers were insane. Shares close 8.8 percent below their price pre-the-open AI deal announcement, a loss equivalent to $60 billion in market cap. Do you think part of the AI

skepticism is not just the fear of job loss, but it's like we live, everyone has seen what social media like did to tear apart the fabric of society. And they're like, do we really want to do this again? We want to like introduce this technology that has the, that has a capability to tear apart society. But guess what? Are we really going to, that's the thing. We can't slow it down. So you can, you can sell these stocks all you want. These companies are still going to, it's not going to stop. That's the problem. Does open AI get to 50, 100 billion dollars in revenue? I mean, they have to for this to work. Will Microsoft allow Open AI to fail?

No. See, that's the thing. There's too much money on the line. We'll get to the second. Put a pin in this because I have more of Microsoft opening eye later in the dock. All right, Patrick Hollison, founder and CEO of Stripe, said, an interesting trend we're noticing at Stripe. U.S. startups are pulling ahead of their peers elsewhere.

You see these charts, Ben? All right. Look at the dock. Software startup revenue index. These charts showed average revenue growth for the software startups in each location. U.S. startups typically grow somewhat faster than those elsewhere. However, since mid-20203, U.S. companies have accelerated a lot. I guess I would have just assumed this was always the case, though.

It seems like U.S. startups have always outperform. He says, interestingly, this is not just because of AI startups. If we strip those out, they're still a big divergent. So here's their hypothesis. These U.S. startups, even those that aren't AI companies, are adopting new technologies, of course, AI, stable coins, et cetera, faster than companies elsewhere. This pattern of faster adoption among U.S. companies was also seen with the Internet itself. Whatever the cause, the pattern is striking.

I think you're going to see it in the fundamentals. Yeah, I don't think the story is over by a long shot. This is not an original take, but the tech industry is going to be the next financial industry. Think about how hated bankers were after the 2008 financial crisis. That's the tech industry now. They are at the top of the perch. They are going to be the most hated industry. after this is all said and done.

Yeah, for sure. And it's not even, I don't think you can debate that. Like, technology, the industry is going to be hated. They're going to be the villains. All right. Spencer Jacob from the Wall Street Journal had a post, why we could use a good long bear market. Stocks have only experienced brief downturns

over the past 16 years, creating dangerous complacency. And I think there's a lot of people who have this. That's true, but I reject that idea. All right, let me go through some of the stats. Then we'll just talk this out, okay? He said, Long Bear Markets accompanied by recession discredit the last boom's wildest themes and its cheerleaders. They also remind us of what capital markets are for, mostly matching good businesses with patient savers and assags.

The average time to reach previous high when Bear Market was accompanied by recession was 81 months. It took just 21 months without a recession. Over the past 16 years, downturns have lasted less than eight months before the old high was reached. Hardly anyone younger than 40 now even had a 401k during 2007-2009 wipeout. most Wall Street pros hadn't graduated from college yet. Bair markets are educational, but the tuition is a doozy. Why do we need a recession? Well, there's a lot of people who think we need to just clear the decks.

Clear the decks. Right. We need to start over, wipe the slate clean. I don't necessarily agree with that, but I guess the point is we need to have a slap on the risk. You need to touch the stove, the hot stove every once in a while to understand, like, whoa, you can't take this much risk. it doesn't make sense to take this much risk and there's going to be a come-up

and so I think that's the idea a lot of people have. We've had it. I understand this. My other thing is, don't quote me on this. I really do think this. I'm quoting you bad.

Whatever you're about to say, I can't wait because I'm quoting it. I really do think that the speed of these recoveries, this is just going to be the new normal. I don't think we're going to have these extended 81 month. This is going to last forever. I think that is, think we're past that. I think the speed of

financial markets, the speed of information, the speed of technology means that these recoveries and these downturns are both going to happen fast than they did in the past. Ben, look at this chart. So I'm looking at the drawdowns of the... That was impressive that. You just pulled this up on Riverside like that. How did you... Thank you. I'm very good at this. You're like

Tom Cruise and Minority Report, moving things around and... Okay. So let me throw this in the dock so the boys can grab it. To Spencer's point, and I like Spencer, so what I'm about to say is there's nothing against him. Yeah, he's good. Don't like the, don't love to take. All right, we had big, long, bare markets accompanied by recessions, both in the aftermath of the dot com bubble bursting and after the GFC, of course,

right? Stocks fell 50% and 57% respectively. That's the S&P. And we haven't seen a long bare market accompanied by a recession. However, look at all of these sell-offs over the last decade. There's one, two, three, four, five, six. I mean, there's a lot of them. Now, sure, most of them outside of 2020, which was a man-made recession in 2022, which, you know, you could quibble inside a recession or not. I happen to think it was. Most of them were short-lived.

Wait, you're a recession truther now in 2022? When did that happen? You don't remember the time we were arguing this is not a recession? Oh, really? Oh, yeah. You turned into recession. Here's the thing. No, no, no, that in of itself, we'd spend 20 minutes on that.

I don't know, I don't know that I wanted to declare that it was a recession. You sound like one of the reply guys to me on my Twitter. No, you're right. No. There was a lot of nuance in that. There was, there was, there was. You can't have a recession with 3.5% unemployment. You're right.

Nope, nope. I will see the point. One, that is accurate for sure. There were industries in recession, big ones. Technology. There always will be, though. Technology. No, but technology, monster industry, tons of layoffs.

Real estate, housing. Iceberg recession. Iceberg recession. Deep ice recession. And Arctic recession. We have a diverse economy. You're right. Was the economy a recession?

I would see the point. You're right. It wasn't. But the point is investors need a reminder that risk exists. How many reminders do they need? They've touched the stove many times and got burned. Here's the other thing here. Those 2000 to 2002 and 2007, 2009, those events are very rare.

They don't happen all the time. You don't get those ones a decade. Yeah, those are crises. Every two to three decades. Yeah, I don't think we need those. No, those like reset the system. things, 2008 might be a once-in-a-lifetime crash for us. It might be. Those things don't happen that often. Because think about 1990, this is on his chart right here where he talks

about Months Street previous side. There was a recession in 1990. There's a savings and loan crisis. The real estate industry was very bad. It wasn't, it's kind of a forgotten recession. The S&P fell 19%. It didn't fall 50. It didn't fall 60. So there's these times when you can get a recession and not have the whole system crumble beneath your feet. Yeah, I would suggest that we probably, in our lifetime, I would say, like, I don't know, minus 175, we'll see another 50% decline. Feel pretty strongly about that. Yeah.

But do we need one? Like, is anybody going to be better off because of one? Absolutely not. We should avoid that, like, the plague. I think there is, there is this feeling from some people that, listen, we need to read, everyone needs to get a slap on the wrist and people need to experience pain, but not me. I'm not going to experience pain. I'll be fine, right?

I think a lot of people who want this, like system reset, think that they'll be okay. They want, you know the scene in Jurassic Park where Samuel Jackson says, hold onto your butts? Yeah.

And it reboots the system. Many people are rooting for that. Yes. And I guess what? Then Sam Jackson is left with just an arm. Just an arm. Careful what you wish. Did he get his arm shoot off?

Okay. Remember Laura Dern, she's just holding his arm? Oh, yeah. That's it. You don't want to be just the arm guy. All right. Let's talk about Michael Berry.

So he put out a note last week saying that he's closing down his hedge fund, which I didn't even realize it was still open. And I want to make this point here. There is a difference between making a legendary trade and being a legendary investor. Lauren Buffett is a legendary investor, right? Drew and the Robertson, legendary investor. There's a lot of people I could name.

Stanley Drucker. Michael Burry and a lot of the people who came out of the 2008 crisis were made a legendary trade. Like John Paulson made a legendary trade. Once in a lifetime. Unreal. Couldn't, couldn't do it again. Right? He did all these other things and it didn't work. And honestly, so Michael Burry has been, he's in 2021, he called for hyperinflation. In 2019, he called for an index bubble. He said to sell it a million times. I listened to Michael Lewis has his podcast on. He's been doing this retrospective of the big short. And he pulled all the people from the book and he's interviewing again. Like Greg Lipman. He's, and he's interviewed

all the guys who worked with Steve Isman. I can't remember all their names. And he interviewed Steve Isman. And it's funny because when you hear these interviews, these people are almost nostalgic for that period. And I feel like Michael Lewis in a way feels nostalgic. Like the people who called that crisis. Oh, that were gods.

Yeah. And they feel like they want it to come back. Like they miss that period. And so Michael Burry last week tweeted out a picture of Christian Bale playing himself in the big short movie. How could you have that experience where you're the star, of this best-selling book, and then Christian Bale plays you in a movie, how could that not mess with your head?

Yeah. And how could you not want to call the crash all the time after that? Yeah. I mean, when you're on the top of the mountain, there's only down to go. Like, that's it. How could that not screw with you? So, again, these people made legendary trades that does not make them legendary investors. And it seems like Isman is really the only one who pulled out of that vortex of the negative, right?

And kind of, but, you know, none of these people ended up, like, having, you don't, you don't know how their results have been since then because they probably haven't been very good. You'd hear about it. If they were like compounding capital at 20% a year since the great financial crisis, then it's like, oh my gosh, these people are legendary investors. They short of the housing market and then they turned around and made money on the other side, too. There's another takeaway. Don't listen.

Don't follow what these people say because I think I saw science performance tweeted recently, and it was fine. Despite everything that he said that has been wrong publicly, it doesn't matter. they're not making an opinion and then sticking with it come hell or high water like they're trading they're moving around

they're responding to the market so they say this is a bubble they're not going to cash and right so take what they say with a grain of salt it doesn't matter who they are remember in 2020 it was Drucken Miller

I can't remember who else was saying it that like this is the worst environment they've ever seen it it's going to get a lot worse it was all of the geniuses yes but that's the point nobody knows When these people make their predictions, just I, but yeah, so there's a difference between making,

and I honestly think we're going to have more of this where people make legendary trades as opposed to being legendary investors. Like, we're never getting another person who has a track record as long as Warren Buffett. No, it's impossible. I can say that it'll never happen again. No, that will never happen again. All right, boomers are passing down fortunes and way, way too much stuff. Bloomberg wrote an article about the great stuff transfer as it's being called.

Great idea, right? The idea of the story, kudos to Bloomberg on this one. Great idea. I remember when my grandfather died and he had no money, lived in a tiny apartment in Florida, whatever, 1,500 square feet, whatever it was, maybe even smaller. And I remember cleaning that out was a bear. Cleaning out three, four bedroom houses is going to be a lot.

Yeah. So I think what you have to invest in, in the coming years is dumpster rentals. How do you invest in dumpster rentals? Because think about all this stuff you're going to be throwing, so they give all these stories

about people throwing stuff away, baseball cars and China and collections and hoarding stuff. Cold wallets. But think about all the renovations that are going to have to be done on these houses that people have lived in for 40 or 50 years.

Like, honestly, like I'm going to start a dumpster rental company. You know, because when you do a renovation, they put the dumpster in your front in your driveway, right? And then everyone in your street, all your neighbors have to ask, hey, what are you guys doing over there?

right everyone has to ask so i put it i put some pictures in here of my stuff so my dad has all these baseball cards and football cards from like the 1950s and 1960s check some of these out of it i found these pictures that i had last time i went there mike schmidt classic mustache guy we're talking he's got willie maize peteros al kalein um roberto clemente yeah mike schmidt um i feel like mike smit drank million beers he was definitely here comes trouble guy i think it's a nolan ryan rookie card i put this into chat gbt and i said hey are any these things worth anything. And they're like, listen, if the edges are frayed, probably not. They're probably worth a couple hundred bucks. But he's got some really good ones from like the 50s, 60s. So that's what I'm

going to walk away with someday. Great. That's my stuff. But yeah, I say go long dumpster rentals for renovations too. So Ben and I did a podcast with Derek Thompson on the topic of our young people screwed. And there's a lot of companies that are blaming the weakness in young people for their woes. A lot of the bowl companies, Chipotle, Kava, They're not mentioning their over-expansion. They're not mentioning how expensive their stocks were. Such a cop-out. Blending young people?

Yeah, they're not mentioning how expensive their sloppels were. So who do you trust? And listen, there's obviously lots of shades of gray here. But Chipotle or So-Fi. So-Fi, who I would say probably catered, not probably. So-Fi definitely caters to that audience. Anthony Nodo, CEO, said, we've seen very strong performance of credit. So we're really not seeing any deterioration in the consumer at all.

right so it's consumer choice not that they don't have any money right and you were early to that train you got off chipotle like three years ago it really was now you're coming back see you're no no no no i'm not coming back and in fact i have no interest in dumpster diving in the stock i listen to the conference call so how much is the stock down 50% tons tons tons um i listened to the conference call you know i think i think this is the quarter that i've listened to more conference calls than i ever have. And I'm not saying that there is necessarily like quantifiable edge here, but I, there is definitely quantifiable insight. Fifty-five percent drawdown. This feels like a stock every time it falls 50 percent, like it's a screaming buy. Yeah. Well, not this time. I'm not buying it.

You know why? I don't, I don't trust the CEO at all. Not for a second. That is true. They have the news, like, because their CEO left him went to Starbucks, right? Not for a second. So I listen. Because of the fact that he is like pulling a slate of hand and not being honest, you don't trust him. I don't trust him. Blaming young people. No, that was in the opening remarks. And in the Q&A, I just, I didn't like, I did not like what I heard. So last night on this topic, I listened to Apollo, legendary founder, investor, Mark Rowan. And I listened to, and Apollo is one of the biggest private credit players in the market.

And I listened to Blue Owls, Mark Lipschultz, who was clapping back at Jamie Diamond. And Mark Rowan was asked about the opportunity. in wealth management and the pushback specifically with rates coming down how attractive is private credit? Listen to this answer for Mark Rowan. Private lending was a better business

four years ago and three years ago and two years ago and last year. By the way, I wish I owned the Vida four years ago and three years ago and two years ago

and last year. This is fundamentally what people fail to understand. The rotation into private credit is a rotation out of equity. that is what investors are doing. That is what we observe.

They are making a decision to take risk off because they perceive the ability to earn long-run equity returns in first-lead debt top of the capital structure as an attractive opportunity. But I think we cannot, as an industry, deny that there was more value, just like there was more value in the equity market.

Okay. Right? the guy's telling big a good answer you're great answer the guy's telling the truth that is a phenomenal answer i don't have to repeat what he just said you just heard it he's telling you the truth okay now contrast that with the with mark lipschultz when he was asked a similar question about how investors should think about what's going on and by the way i think we have blue owl later than the doc not not pretty what's going on in that stock all right so mark lip shultz well he he he sounds defensive he sounds antagonistic all right so an analyst asked a question

about some of the publicly traded BDCs, which is getting murdered. So tell me if this answer makes you feel better or worse as an investor, Ben. So as to what investors don't understand, it's probably hard for us to, you know, to give you a comprehensive answer. In fact, you obviously talked to a lot of investors. We can offer some theories. I can certainly tell you what we're doing. We're doing two things that I think at the end of the day, you know, we'll solve this

problem. One, we are executing, executing, executing. Business is good. Business is continuing to be good, and we're focused on continuing to deliver. We haven't seen an opportunity as good for investors and, by extension, for Blue Owl, as the digital infrastructure investment cycle that we're in. And so we're just going to continue to, you know, deliver results for investors and continue to deliver? Oh, you're just going to continue to deliver to

deliver and business is good? Really? If business is so good, why is the stock down 48%? Why is the BDC down, whatever it's down? Why are you merging some of the funds? Why are they getting redemptions? I don't know if they're getting redemptions. Why are they limiting redemptions? So you listen to these people and it gives you some sort of insight as to who you want to put your money behind. I think it's incredibly valuable. I think someone asked us that a few months ago. Like, what do you actually get out of these earnings calls.

That. That's like, are they being level with you? And I read, this was always the thing for me when, when we, when I used to be in a manager of manager's business and I'm picking the manager's style perform or whatever, the ones that I appreciated the most would tell you straight up when they were underperforming, listen, this isn't our cycle. Our, we're out of style right now. Or listen, we missed it.

We missed it. Whatever the trade was, we missed it. We're not in what's working right now, as opposed to the people who make excuses and say, it's the Fed or we would have been right if only this would have happened. Like, I always appreciated the people that, yes, that would level with you and be honest with you. The people who, like, BS you like that guy, you can't trust them to tell it to you straight. So how are you going to trust them to run a company? Okay.

Back to, sorry for the tangent on the so-fi thing, but back to what we were talking about. Here's a good chart from Apollo. About 5% of the U.S. population are experiencing third-party collections. The blue line is the dollar amount, and unfortunately the dollar amount is up until the right as everything has gotten more. Spence, no surprise there. But look at the proportion of consumers with the collection, which is the Green Line, Ben. Now, it is going up, but off historically, literally historically low levels. Way low. That is pretty crazy. Okay, so it went from a high in the mid-2010s of 15%, now down to like 5%. Okay. Remember a couple weeks ago, I said, hey, listen, when the

stuff starts getting disrupted and the economy slows, they're going to take some of these tariffs off as a form of stimulus. It's already happening. Trump administration is preparing tariff rollbacks on goods from countries beyond those that have reached agreements with the U.S. in an effort to lower prices. I think they're looking at coffee and food and some of these things. Do you think that the White House saw the employment data and got a little freaked out or saw whatever data that we didn't get and said,

all right, you know what, actually, we're going to pull these off? But this makes sense of this would happen, right? I don't know. I don't know their motivation. I do know that last week when I was in Washington, D.C., it was very eerie. It was an absolute ghost town. I had a great time, by the way. You know, I'd love to wake up early walk around cities.

I was listening to the Harry Truman book. Man, what a wonderful walkable city, D.C. is, right? Phenomenal. Harry Truman, who actually redid the White House, who was the first, like, president to really invest in the White House and say, wait a minute. We had to up our game here. Did you know, this is news to me because I don't follow politics like this, during the shutdown, because I have a friend who works for a congressman, the Congress people, the elected officials were getting paid. Yeah, isn't that the worst thing?

And my friend hasn't had a paycheck in seven weeks. People in TSA aren't getting paid, weren't getting paid, but the politicians were. Isn't that awful? I think everybody agrees. It doesn't matter where you are. Absolute horseshit. The politicians should not be able to hold the country hostage because they can't come to an agreement. Absolute garbage.

All right. What's the chart and a price? Okay. This is, Ben, once in a while, you get a new blogger. It's rare these days. I feel like the heyday of bloggers is long over. Although substack, actually, maybe that's not true. Be that as it may. There's this guy who writes a blog post, a substack called chart and A. I believe that we referenced him a couple of months ago. So he has this incredible chart that looks at CPI, which includes obviously a basket of goods. But what he did was he looked at hey, let's take away some of the things that are not like everyday inflation.

Let's take out used cars. Let's take out some durable goods washing machines. Now, it's not that these don't matter because they do, but he wanted to focus on like everyday inflation. There's stuff people really think about. I mean, this chart is just magnificent on the eyes. So these are the TLDRs.

So he said, television's gone. Mattresses out. Used cars get lost. So what was once 338 lines suddenly became about 40 lines of goods and services that show up in an everyday budget. Okay. Before the vaccine rollout, official inflation and my index were basically indistinguishable, right?

Same thing. Once inflation picked up, the official numbers started to come in much hotter than what my index showed, likely because used cars ran red hot in 2021 in 2022. Oh, yeah. But it's probably, housing was probably a big part of it, too. Since then, I think that's an everyday type of expense. since then, the chart and A price index has been running about one to two percent hotter than the official CPI.

Lately, though, they've started to converge. And I think this is what people are talking about. When they say CPI is not whatever percent it is, like I feel, it feels higher. And guess what? Yeah, it probably is. Well, no, it isn't, but it's just the stuff you're buying feels higher. Well, yes, that's the same thing. The buying more often, though.

Yeah, things that you buy every day are higher than. No one ever feels like the aggregate economic data is them because their personal experience is... True. True. So no one ever believes the inflation number. True. If you just bought a used car, you go, gosh, inflation is out of control.

If you bought a television, you go, oh, my gosh, deflation. I'm thinking a lot about my new car these days. Oh, I forgot to mention this. I got into an accident. Uh-oh, what happened? So I haven't been in an accident since I was like 19 years old. Um, I'm in Dix. Whose fault?

When I was 19. Oh, now. Oh. Um, but you tell me whose fault it was. Okay. It was a one car accident. You hit a light pole? Yeah.

I'm in the, I'm in the, I'm in the parking lot, uh, in Roseville Field going to Dix with Kobe. And poll came out of nowhere. I honestly don't know what I was thinking. Like, I, I just didn't see it. And it was literally. you're backing up or you're going forward? No, I was going straight. It was right in front of me.

It was like a handicap hole. And I saw it. I slammed on the brace and called me. It's like, Daddy! So I get out and not a ton of damage that I'm like taking to the body shop. But like, yeah, it looks like my car is definitely. So you decided that your car wasn't underwater enough. You had to like make it even more underwater.

Yeah. So I just, I don't know. I think I don't know if what happened, but I went into. went into a poll. So, anyway, I've been thinking about what car I'm going to get a lot as my car at least comes due. I think I might get a Jeep Grand Cherokee, not a hybrid, just a straight-up gasoline Jeep Grand Cherokee.

Okay. I feel like you've changed your mind on this like 13 times. I have. From a Rangerover to a Toyota. Yeah. Not ready. Just right down the fairway. What do you think about that?

My mom used to have a Cherokee and I drive it all the time. I loved that car. Yeah, it's a great car. Right? It's, it works. A to B. Yeah. All right, let's talk more AI stuff.

Yeah, so Bezos, Project Prometheus, coming out of the gates with $6.2 billion in funding. I guess he's not going back to Amazon. I guess I could put that hot take to bed. Duncan wants you to get a Lexus. Alexis? Yeah. Somebody did tell me to get the Lex.

The GX? I can't remember which one. But let's say you're in a, you're a technology like Bezos, but in your whole career, essentially. Like, you're going to let this opportunity pass you up and not get involved. Of course you got involved. Yeah, so it's so over. Come on.

It hasn't even started. We don't even have the robots yet. All right. So I liked, so Jerry Newman was on Oddlots with Joe and Tracy. And I liked he had kind of a contrarian take. And I don't know if I buy it, but he said, what happens if opening I gets hit by a bus, right? Opening I goes under. Microsoft's not a bunch of money.

A whole lot of big companies are out a bunch of money. I don't think much happens to the economy. In the dot-com bubble, people were spending money from their options before they were liquid. It was a much different dynamic. So he's saying, like, so what if one of these big AI companies? And I said, you know, Microsoft is not going to let them go out. Like, none of these companies, Open AI cannot go out of business. Microsoft would just, you know, pull them in.

I love a contrarian take because everything is consensus these days, including everything that we're saying. Yeah, it was very, it was very contrarian. That's what I liked about it. If Open AI, and I like that guy, he's smart and entertaining. But if Open AI gets hit by a bus, we're in deep, deep trouble. Because. Like the economy is.

Well, the stock market's going to crash. and you would think that, not you would think, let me not hedge that. The stock market crash and will have a deep impact on the economy, obviously. Deep? I don't know. I don't know about deep. Just from open AI, I don't. It's not just open AI.

The entire economy is resting on the shoulders of these hyperscalers. No, it's not. Get out of here. No, I think it is. The entire economy, come on, man. Get out of here. I will not get out of here. All of the growth in the economy is happening because of the hyperscaler spending.

Grock, is this true? Actually. So, okay, so in terms of like what Open AI is actually paying Microsoft, this is from the Financial Times. So the Open AI quarterly inference cost at Azure. Now, this is only inference. It is not the more expensive part of the AI story. So they said Open AI appears to have spent more than $12.4 billion at Azure on inference

compute alone in the last seven calendar quarters. So forget about the promises that have been made to Oracle and every other company on the street. Where do you think all of the beat from Nvidia is coming from? It's coming from the promise of these LLMs and what they're going to deliver. So the entire market rests on the shoulders of OpenAI not getting hit by a bus. So speaking of Microsoft and CEOs are tell like it is, Saty and Adela was on the Dorcasch podcast. and it was so refreshing to hear a guy who just told it like it is and told he was not a bullshitter

and like that guy, that's a person I trust. I trust, Satya. I have terrible listening comprehension, I think, when it comes to this tech stuff. I don't understand any of it. I listen to the entire podcast and there was like not one part

that I was able to like pull out and say like, oh, but then I see people tweeting the clips. And I'm like, oh yeah. When I see the clip, it makes sense. And when I'm listening on my own, I'm like a child. Like, I have no idea what's happening. It's hard to understand some of the AI stuff that they're, because they're getting so technical

about it. So here's, here's the thing. There's two things. Two ways to look at this. One, the market already knows what's going on, right? Like, how could you think you're smarter than the market? This is like for all the people who say, like, look at the depreciation expenses of these, all these data centers and GPUs are going to be depreciated in three years and

have to buy them again. Like, the market knows this. Wait, hang on. Can I just interject one thing? I think the opposite is true. The market doesn't know this. The market doesn't know anything, which is why you're seeing such violent price swings.

Because we're all just guessing. We don't know. That's the point. We don't know. Nobody knows. But the thing is, the market is always smarter than everyone. Yes, of course.

Of course. But two things can also be true. The other thing is sometimes the market is wildly off the mark. Right? So how do you wrap your head around like, listen, everything everyone's talking about with AI, everyone already knows it. We all know it.

But nobody knows. It's not like this because everybody knows. Everybody knows, but nobody knows. people think, well, yeah, no one knows that that's obviously the problem. By the way, I asked chat to do some coding for me this week. I asked Nick Majuli, hey, how do I fix this thing on my blog to make it look bigger and fancier? And when people send it for my newsletter, I wanted to stand out more. Nick said, just put it in a chat GPT.

And it gave me the code and it allows me to copy the code. And I said, well, where do I, I've never coded anything before. What do I put this in? And it was magical. Did he say, Ask Chat Chibete? Yeah. Well, he kind of showed me a little bit, but it's magical. I did something similar.

There was an arithmetic problem, and I'm not even kidding. It was straight up arithmetic, not like plus plus, plus, but I couldn't figure out for the life of me. I was staring. I'm like, wait a minute. I'm looking at a spreadsheet. I said, I don't understand what I'm doing wrong. And I said, hey, wait a minute.

Boom. Yeah, two seconds. But why do you think technology people are so excited about AI? Because they're the ones doing that stuff. How about this? The set arithmetic, it might have even been calculus. I don't even know what type of math it was. There was no scenario in which I got to the bottom of it.

None. I could have stared at it for seven. hours. All right. We've been talking about stocks falling a lot in one day, and we had a guy email us in and gave us an answer. He said, Ben raised a question, how many securities had 30% drops? He said from March 31st, 2020 to today, so just basically this decade.

For the S&P, it's only 15 names. Russell 153, Russell, 2469. He also said, he responded. He said, if you do 20% instead of 30, the number is quadruple. Like 60 names, 205 and 955. So actually, I guess fewer names have fallen 30% in the S&P that I would have thought, but a decent amount have fallen 20%. Yeah.

It's funny. Bespoke did something similar. They said 19 stocks have fallen 30% of their earnings reaction days this season. And the median market cap of those companies was less than $3 billion. Versus 14 that have gained 30%. So this does happen. No, but of course it does. But the median market cap was $3 billion.

Right. So it's small. It happens all the time in the Russell 2000. Yeah, all the time. All right. This is a really good question from hashtag. or at long equity. Sometimes compounders stop compounding.

What lesson do you take away from this? So he shows Nike and Ficer and Charter Communications, Nestle-Lauder, and like six of these companies that had these beautiful long-term charts that have now come crashing down on the other side. Like, these are compounders, and in the last year or two, all these things have come back down to Earth. I'm trying to catch a falling knife in Nike. So I thought this is a good question.

Like, what do you take away from this? So the answer, by the way, I don't like Nike's knife. I think you're going to cut your hand. Um, my whole thesis with Nike is I'm betting on Caitlin Clark. That's it. Okay. I'm betting on Caitlin Clark to like have her own shoe line. And as long as she stays healthy, that's my Nike thesis. Okay. No offense. That sounds like my thesis when I was, uh, back in 2010 when I bought, which, which minor because of the Olympics. Oh, I bought like an Australian mining company. Was it BHP Billetton? Billetton. Is that even the name of it? Because yeah, anyway, don't love

that thesis. But hey, credit to you. So, all right, Bucco Capital has the, has a great take on this take or the answer? Like, what's the takeaway? Bucco said, the actual answer is that this is the rule, not the exception. Great returns attract competition. That's the beauty of capitalism for the consumer. The more interesting question is what companies do to avoid this fate. I was, the new book that I'm listening to is, um, is called invention. The book, the audio, the audio, the autobiography of, James Dyson, the guy that of Dyson, the vacuum cleaners. Oh, yeah. I have that book somewhere.

I just never read it. It's... I just bought a new Dyson this week. The vacuum cleaner? They're magical. They work so good. So I don't know that I would necessarily recommend the book. Although, oh, there is a great quote that I wrote down.

He said, everything changes all the time. So experience is of little use. I feel like that's so applicable in the stock market. To markets, yeah, that's pretty good. So, um... But anyway, my point was this. So when he was building the vacuum cleaner before the Dyson, I'm sure you had a Hoover vacuum cleaner growing up.

I did. Right? Yeah. Like it was so 80s. Do you remember the bags with the zippers on them and stuff? So that, yes, I do. So the point is, I think they made $500 million a year selling the bags. It was classic innovators dilemma.

Like their entire business was the bags inside of the vacuum cleaner. So they just were going to go down. printers and ink cartridges. They were just, that was their business model. They were never, ever, ever going to do what Dyson did. And then guess what? Dyson killed them. Right.

So that's it. That's business. All right. Cliff Azis is on AQR and he's talked about how AQR is, sorry, he was on AdLatz, and he was talking about making a push into sports betting. And I thought about this, because I've heard a lot of people say, I wondered if this is good or bad for like Draft Kings slash Fandulul slash Polymarket slash Kalshi, all the ones that have the betting. Is this good or bad for them

is to have the big whales come in? Because you'd think it'd be good because we had a huge layer of liquidity, it would be more volume. But is it bad if they're arbitraging away? Because I've heard stories from that like Fandle and Draft Kings, if you're a whale of a gambler and you're really good at it,

they will find you and they will kick you off the platform. I don't know if this is true. Yeah, you know what? I'm the opposite of a whale. I get no incentives. They say, hey, look how much those hassle keeps losing. We don't even give me any incentives. He just keeps losing. But let's say AQR and Citadel get into, and they, the arbitrage away a lot of the parlay stuff, right? And they see there's massive mispricings because people who are betting on them, like you, are idiots and don't know the, don't know the odds.

Okay. Am I an idiot because all the Bengals had to do was not literally let the Steelers get six points on defense in the final drive? Am I an idiot? Because that happened? Yes, I guess I am. So do you think, is this, would this actually be a bad thing for these companies? Because they couldn't make these enormous spreads anymore. Yeah, that's a good question.

Like, would they make it up on volume or is the spread is the spread the thing for them where they make all the money off of idiots who don't know what they're doing? Very good question. I'm not sure as the answer. I don't know. All right. So Bitcoin is getting killed. I think it was under $90,000 last night.

And is this one of those things where crypto is signaling more pain to come? Or is this just like a risk off asset and like this is it? Because I looked at this. So it's crazy. The volatility I mentioned before. this is ibit was down almost 20% on the year through april then it was up 35% just a couple months ago and now it's like flat or down on the year like remember when people said the etf is going to take volatility out of bitcoin yeah um but look at look at the drawdown profile of bitcoin it's almost

exactly the same as meta it follows it to a t like bitcoin is still acts like a tech stock but it's but it's not but it's not following the cues at all okay yeah But my take is, I think Mark Zuckerberg is actually Satoshi. What do you think? So Balchunis tweeted, Ibit is now Harvard's largest position in its 13F and its biggest position increase in Q3. Pretty wild. Harvard.

Here's my question about Bitcoin. What is the next catalyst? Because all of the promise, all of the catalyst, which was ETF adoption, institutional buying, it all happened. So what's next? Like what breaks the spell? Now, maybe it's just the bull market resumes, like the broader macro bull market comes back.

But I don't know. So I don't know the answer to your question. I don't have a very strong... I guess the catalyst would be money just keeps pouring in. People have it on autopilot now because of the... Advisors keep putting money in. That's not a catalyst if there's just like auto flows in. I don't see why that's not a catalyst.

If more money keeps pouring in, how is that not a good catalyst for... Because that's, because that's literally what's been happening from the last year. And it's gone nowhere. It's flat. It's down on the year. Yeah, but it pulled forward so much, so many gains, right? It's down on the year, but it's still up a lot from, I don't know, I, but do you,

do you still think that it is a precursor of things to come and like, okay, the stock market is going to roll over now, or is it not like that anymore? I think it's different every time. Sometimes it is, sometimes it isn't. I don't know. Yeah. That's fair. All right.

let's talk about, you wrote a good post on the 50-year mortgage. This is a very sensitive topic. I think people hate more government intervention, more fake money. I think they hate that people that would use the 50-year mortgage are people who could least afford it, because you're not really saving a lot of money, and you're just paying way more interest. Yeah, you'd be harming like the middle and lower class, probably. Because you ran a calculation on a 500,000, was this a $500,000 mortgage, Ben? Yeah. So the 30-year mortgage monthly payment is $3,000.

The 50 year is $2,6.30 and change. So it's a difference of $366 a month, which is definitely not trying to minimize that. That's not nothing. But you're looking at 80% interest in the beginning for a 30-year versus like 95% interest. It's all money. It's all money to the bank. And here's the other thing. I looked at this using the same interest rate.

I said 6%. a 50-year mortgage would definitely be a higher interest rate, too. So it would take the monthly payment difference down even more because you'd assume the 50 years probably, if 30's at six, 50 years probably at six and a half. So I didn't even do that. So the monthly payment is even worse. Got it, got it, got it.

No, no, the monthly payment is less. That's what I'm saying. You'd have less of a savings. No, you're saying the 50-year interest would be less. No, the 50-year interest rate would be higher. Right, right, right, my bad. So your monthly payment difference would be even lower. Alison Schrager said, I think the 30-year fixed rate is a freak of financial nature,

something that requires tons of intervention and causes all sorts of distortions. But I'm not sure why a 50-year is so much worse. That's fair. That's, yeah. How many people actually live out? How many countries do floating rate mortgages? Most of them. Most of them.

I know Canada, though. There's a lot of European countries. The U.S. is kind of on its own island. But so what happens in inflationary periods when interest rates? go up. It's like, uh-oh, I can't afford my mortgage. Yeah, your payment goes up. I think a 30-year fixed-rate mortgage is one of the greatest financial inventions that we've ever done in this country. Some people hate it for whatever reason. I think it's amazing.

All right, we're going to talk about this. We're going to do an episode on home stuff with our friend Logan Motishame, because there is, we spoke about this with Derek. The median age of first-time home buyers is now 39 years old, according to the national Association of Realtors. No, 59. No, that's all buyers. Yeah, all buyers. I said first-time buyers. It used to be 30, and now it's like 39. Yeah, so I think they said 40 last week, NAR.

And this Connor O'Brien puts out all the other surveys saying, wait a minute, is it really 40? If you look at these other surveys, it doesn't look like it's increased at all. And so a lot of people are saying, wait a minute, the NAR data is bad. Their survey is bad. These other surveys, right? So all this stuff that we've been saying, like the first-time homebuyers now have got to be 40 years old or something, that might be wrong. And honestly, and we've been using this data. Everyone's been using this data to support the case that millennials are screwed, housing

is broke, which, by the way, both doesn't mean that it's not, but if the data that's supporting that argument is. It sounds like the data is faulty. And Logan's going to kind of set the record straight for us. So that'll be out hopefully soon. There's a store in the Wall Street Journal, or sorry, New York Times. They rushed to buy homes during the pandemic. Now some feel trapped.

And it talks about how Americans who bought their first houses when we're mortgage rates were low. Now they're ready to move, but they feel locked in by the rates. I'm sorry. We can't feel sorry for everyone. Not everyone gets your sympathy. What's the problem now? They rushed. So they have all these stories about these people who rushed into buy a house in like 2021 because rates were low and houses are going fast. And now their life has changed, so they want to move, but they can't because they're stuck in the 3% mortgage. Sorry.

Not everyone gets your sympathy. Like if you bought a house and it's up 50% any of a 3% mortgage, but it would be expensive for you to move, you don't get any sympathy. The person who didn't get to buy and didn't get the 50% price appreciation and didn't get the 3% mortgage, they have my sympathy. Not you.

Yeah. Not everyone deserves your sympathy. Okay? And I have a thing coming later about my, I'm, it's going to seem like I'm looking for sympathy, but I'm not. Sometimes you just have bad luck.

All right. Let's, we'll skip the Schwab stuff. If you save something in the dock for two weeks in a row, delete it. It's never going to happen again. Come on. Let's just, it's not going to happen. There's too much stuff that happens in a given week. All, fine. You know what? No, we'll do this real quick. So Schwab announced that they're buying Forge Global. They project in their press release that private wealth capital allocated to

alternatives is expected to reach 13 trillion by 2032 up from $4 trillion today. That's aggressive. How about this? How about this for analogy? markets to financial advisors is like AI to people. Like some people just don't want it. Yeah. Right? It's the same thing. Like you're going to, we're going to force down your throat, but a lot of people don't want it at all. Hit the nail on the head. I got to be honest, I had no idea that Forge was public. They went public in a SPAC at a stupid valuation, $6 billion, like everything else. It looks like they're getting bought at like $600 million, something like that. Oof. So here's my take. I think that the private market stuff is going to happen.

I don't think that there's going to be a widespread revolt that sort of stops its track. And I think it's done. It's just a matter of degrees and what we get. I think they're just going to be disappointed in the flows into this stuff. Yeah, I think that could be too. I think they could make a hard push and the flows don't reciprocate the love. However, if we go into recession and interest rates go back to zero percent, which I think they will.

I think you said it's never going to happen again. Oh, yeah, definitely. If we get a recession next three years, interest rates are going to zero. I love this take. Mark it down. All right. Good for you. Finally, a stand. Okay. And when that happens, are people going to, like, look at privates again? I go, oh, actually, private credits eight and this is zero?

Well, yeah. So that could happen. So, all right. So my take on this is, it is going to be a rocky transition between here and 20 years from now when this is all available. And I do think of that in 20 years from now, people are going to look back and be like, wait, seriously, there was a time where, like, people couldn't invest in this stuff. Why? Yeah. You're right. There'll be better rappers and better. And there already are. in a lot of ways. So pitch book, and I don't know if I'm the only one that reads this stuff. I feel like I never see it being circulated, but they do like a weekly rundown that's like really, really, really super duper high quality.

So I read it. You got your ear to the ground of the private credit stuff, huh? The credit pitch from pitch book, you damn right I do, Ben. They say while the 12 month run rate of interest income from payment and kind loans, Ben, to your point, I could hear people's eyes, like, who gives a shit? Well, I give a shit. The payment and kind loan. which basically is like, all right, things aren't great right now.

I'm not going to pay you cash right now. Just tack it on. It's an I owe you to the end of the payment. That's just as good as cash. Payment and kind loans for the top 15 exchange traded BDCs remains a hefty $1 billion. It declined in the second quarter, which is the third straight quarterly dip, perhaps indicating that lenders have reached their threshold for non-cash paying interests. So lenders are saying like, nope, been there, done that, you pay.

You pay. Fair enough. Fair enough. All right. So this brings us to Blue Owl. So the Wall Street Journal had a report. Not long ago, Blue Owl Capital was an upstart investment firm that lent money to mid-sized U.S. companies such as Sarah Lee Frozen Bakery.

I hate frozen bakery food. You? I don't have an opinion. Okay. Fair. These days, yeah, Ben's like, I'm fucking. over this. Can we just move on? These days, the firm is financing massive data centers costing tens of billions of dollars for the likes of META and Oracle, a sign of just how quickly Wall Street

has become the enabler of America's artificial intelligence boom. So they showed a chart looking at the bond issuance by big tech AI companies. And it's more now than it has been the past several years combined. And this is before yesterday, Amazon announced that they did a $12 billion offering. So like I mentioned earlier, the stock blew out was getting killed. It's in the epicenter of two places you don't want to be. Number one, BDCs are getting slaughtered. The liquid BDCs are getting slaughtered. People don't believe it. They're scared of first brands, tricolor, whatever. They're selling. Rightly or wrongly, they're selling. This is a lot like AI where it's like the skepticism has like kept the lid on a lot of this stuff.

Yeah. So by the way, I sold, I, I sold it a couple of months ago. I think if you're selling it down here, you're a donkey. That's just my opinion. But then and also, so there's the BDC side, there is the AI skepticism side. Hey, wait a minute, like this deal with meta, like, they have an opt out. Like, what's going on here? And then also, there was a really gnarly article in the Financial Times, Blue Owl Credit, a Blue Al private credit fund merger leave some investors facing a 20% hit. And I encourage you if you're interested to read the article. It's not great. It's not great. We're already going to log in this topic, but there's some forced mergers happening. I think there's pending shareholder votes, but it's not

pretty. So they did a picture of these guys when they went public or something, they rang the bell. Has anyone ever looked cool, like cheering the ringing of the bell? You can't look cool. It's like we're in Crocs. You can't. You can't look cool doing that. Can't. Okay. Yeah, but yeah, this, no, you're, a lot of this stuff I roll my eyes about with private credit, but like this isn't, I think this is a legitimate story worth paying attention to it. This is a story. Absolutely. Yeah. There was an article in charter or a great survey, visual and charter, showing many young Americans are jilting marriage. So you don't see that we're jolting too often. The share of U.S. households with married couples peaked at 79% in 1949 and is now down to

47%. I was talking to Josh the other day. I feel like divorce is like under decline. Now, I'm sure there's data for that, but just anecdotally, I feel like divorce was so hot in the 90s. My parents got divorced. A lot of people's parents I know got divorced. Think about how many movies dealt with divorce in the 90s. Mrs. Daffire killed me. every family movie had a divorce in it. What was my dad thinking taking me to see Mrs. Dadfire?

Way too soon. Anyway. Santa Claus, a Christmas movie had a divorce in it. This is all part of, that would be a good list, top 10 divorce movies. This is all part of the bigger story

of young people taking longer to do things that was once done earlier. Maybe not a popular take. I don't think you should be getting married in your 20s and buying a house. In fact, I think, that's part of the... The fact that people are waiting longer, I think is a good thing.

That's part of a lot of... And that makes you, it makes you more mature and you're a parent as well. Like, I don't think it's a big deal. You have no business having three kids in a house before you're 30. Now, I know people make it work. But in, but all of America, it's too much responsibility. I think this is like, this is more normal. Yes.

And they're asking the percentage of 12th graders saying they're most likely to get married in the long line. I didn't even look at that. Get lost. I can't trust a survey of high school students. I'm sorry. They, they lie. All right, quick PSA.

This is from the Wall Street Journal, but a bunch of other places had it. the limits for your returnment accounts are going up in 2026, 24,500, up from 23,500 for a 401K, 7, up from 7 for your IRA. You get a bunch of extra money for 50-year-old or if you're 60-year-older. We spend a lot of time focusing on the markets, right, and focusing on investments and stocks and private credit and all this stuff. If you max your 401K out, it almost doesn't matter what you invest in. Put it in something, anything with risk, and you're going to do better than most people.

I endorse this message. Let's get to it, Ben. I got a story. You know, sometimes you have such a bad day that you don't even, you're not even mad, you don't swear, you just kind of do an angry laugh. That was my day yesterday. Let me tell you what happened to my day yesterday. I start off just a very bad Monday.

My wife's car is flat tire, right? So I've got to bring it into bell tire to fix. There's a screw in it. I can hear it coming out. I have to take the tire off myself. I know how to change a tire now. I can't wait to the robots come and do it for me. So I've got to bring the tire in.

So I'll already, it's 30 degrees out. my fingers hurt. I'm trying to, you know, I'm hitting my knuckles against the thing. Oh, that hurts. So flat tire. For in the morning, sick kid. My daughter has an upset stomach. Had to come home. I didn't have to deal with it, but that's another thing. Finally, we had, we did a bunch of home projects I've been talking about. We had new floors. We painted the walls. We painted the trim. Everything was nice. Then the door is just all beat up from the kids all over the years. And then all the work we had done. The door from the garage of the house is all beat up. So I said, you know what? I just want a new door to look nice. It'll make everything look finished.

So one of the two big home improvement places, there's two of them. I'm not going to say the name, but it was one of them. I said, I just need a door. Can I just pop the pins out and put the new door in? No, no, no. What you do is, because they might not fit, you have to get a whole new door. So it's the frame, and we'll put the bottom plate on, and it's new trim, and it's going to look so nice. Just do the whole thing.

It's a little more expensive, but it'll look so finished. You know what? Yeah, I'm doing a project. Let's do it right. So the guy shows up yesterday, and my wife calls me and says, this doesn't all look good. Just the look of it doesn't. You know you can just tell. So he walks in and he said, where's the door?

And she said, you're installing it. You should have the door. He said, I don't have it. So he had to go back to get it. Now, this guy's installing the door. He takes the trim off. He puts the door on. And he's there for like three hours at this point already.

He doesn't have the door on. It's just this open and it's 30 degrees out and it's cold. And he's holding it. And he said, I need to call for someone. I hear him on the phone. He's calling. He's asking for help from someone. He said, like, basically, I don't know what I'm doing.

This guy had literally never installed a door before. Now, what are you doing this situation? So he has his buddy come. I mean, I know what you do. Nothing. So this guy, his other guy comes and he's helping him. This guy is walking through. Like, all right, fine.

You know what? That was a little rocky at first. But this guy, he's got a helper now. This guy's going to help him. This guy's saying how you have to be level and to shut the door. It's like, there's all the stuff you have to do, right? So this guy's helping him. Like, this will be fine.

This guy's here. Now it'll be better. It's a bad start. This guy helps him a little bit. Then he leaves. So this guy's finishing. This was, honest to God, the worst. It's comical how bad it was.

There's cock everywhere. There's, he put holes in the wall. There's dents. There's dings. The door barely shuts. This is, I, like, I couldn't. So what, are you let this happen? I mean, did he's, what's the result?

This guy was not, he was there until 7 p.m. last night. He got there at 2. And he goes, all right, I'm done. And he leaves. He did not have anything to clean with. He asked us if he could borrow a broom and a dust pan to clean because he didn't have anything. So, of course, I called a place today. He said, this is unbublished.

like our house is like ruined you've got to come back and fix this so they're going to but this was like if I asked him to fix it he was going to make it worse it was a project now so the guy finally leaves we're like decorating for Christmas and then it's time for bed all right kids go to bed and George

goes into the bathroom and proceeds to exorcism his head turns around and throws up all over the wall on the walls on the walls all over the toilet on the floor the worst smelling vomit I've ever smelled in my life. My Courtney had to leave because she was gagging.

So I had to clean it up. I needed like a hazmat suit. So that was my day yesterday. Two sick kids, a flat tire, and the renovation from hell. Wow. But it's one of those times, you know what? I poured myself a big glass of red wine and said, let's rip the band it off and start to do it the next day.

How's your day today? That's right on that. I'm doing good. That's really good. That's a bad day. That's a bad day. All right. I'll see some recommendations.

Did you watch Death by Lightning? I loved it. Oh, you did? Did you watch it? I did. Okay, so I thought it was fantastic. It was four episodes. I thought Tom Wobsgam as the crazy guy was...

He's unbelievable. He's so good. But here's the thing. So I've heard of James Garfield before. I've heard of Chester A. Arthur. I've heard the names. I had never heard this story before that he was assassinated. I had no idea this happened.

No clue. So, okay. I felt like I was learning as I was watching. It was so... It was four episodes. That was the best part. Four episodes. episodes. So the book, Destiny of the Republic, is by my, one of my favorite authors, Candace

Millard, highly recommend her books if you are interested. So she wrote a book called Destiny of the Republic or Destiny of the Republic. And I don't know if you noticed this, but I didn't, but the fourth episode was called Destiny of the Republic. Okay. So the cast was amazing. And I thought Wamsgam was amazing, like, totally amazing. And it was cool to see these characters brought to life. And Michael Shannon, too. They kind of looked like the guys, too. They were great. And I did enjoy it. But it kind of felt like such a Netflix show.

Like, what was the point of it? See, I'm sorry. I thought I was going to say, I've been complaining Netflix has had low quality shows. I thought this was their highest quality show in a while. I thought it was fantastic. Okay. Maybe because I just didn't know the story.

So I felt like I was learning. The tone was interesting because it was like, it was sort of like, like what genre was that show? See, I thought it was because they had some humor involved. Yeah. Like I thought that, I don't know. I thought that was it. But the way that he became president with his,

speech, and, like, I thought that was just really well done. Yeah, it was an accidental president. But Wamskin, where has he been? Because he is so good. He reminds me of, like, Brendan Fraser and the mummy, but better. Which they're bringing back, you know, with Brendan Fraser and Rachel Wise, it's coming back. I can't wait. I love that movie.

Okay, so I've got an audible of the week. Okay. So at the end of his book, Andrew Ross Sorkan actually mentioned this book and said, I was trying to frame my 1929 book after this. Oh, is this the Titanic one? A Knight to Remember by Walter Lord. And all it is, is there's no preamble. There's no backstory.

There's no, like, biography stuff. It's just, this is what happened when the Titanic hit the iceberg, and this is what all the people did. Okay. And it's not that long. On a two times, you can listen to it in two hours. It's really, really good. Just like, what happened?

And all the people being like, wait, like people getting out of the rooms at night and being like, what happened? We hit an iceberg. Go back to bed. Don't worry about it. And, like, all the stuff that people decided to bring and how the fact that there weren't enough lifeboats and really, really good.

I enjoy it. Okay, good work. All right, I watched the Eddie Murphy doc being Eddie Murphy. I assume that you were a huge Eddie Murphy fan, obviously, literally who wasn't? Yes, love Eddie Murphy. Yeah. It's worth watching. Not the best doc I've ever seen, but it's worth watching.

So at the end, and this is not a spoiler, really, but at the end, so at one point during the dock, he's talking about how he ordered two dummies. so he could be like a ventriloquist if he ever does stand-up. And it's Bill Cosby and it's Richard Pryor. So at the end, of course, he hasn't done stand-up because he got too famous since 1987, I guess. I don't know if Delirious was the last one. Oh, wait, was Raw at 87?

I can't remember which was which. I used to own Delirious. Ridic. I own the DVD. Funniest thing ever. So, but anyway, so at the end of the dock, the puppets come. And he does like 30 seconds.

and it's like the funniest thing ever. Okay, he was. It's just like, come on, man. I know you're too famous, but like, please. He was one of those guys. When he was on comedians and cars getting coffee with Seinfeld, he still had it in him a little bit, but he got too big, I think,

but he, in one of his, I came here with it was raw or delirious. He had this bit where he talked about how all Italians thought that they could beat people up after Rocky. Oh my God. It's just, that's one of my favorite bits of all time. Yeah. It's so good.

Truly a one of one legend. All right. Lastly, speaking of comedy, I saw Louis at the Beacon. So in 2014 or maybe 15, when was Deflakeet Gate? I can't remember. But whenever that was, Josh and I were at Artie Lang's apartment. I don't think I ever told the story before.

Have I? On the air? I don't think so. All right. So Artie Lang was my favorite character on Howard. I am a lifelong Howard Stern listener. And when Howard and Artie broke up when they had that fight, I remember I was in my bedroom like, wait, why are mom and dad fighting? So anyway, Artie was like my guy. And we were in

his apartment and it was surreal to say the least. It was Josh, one of Ardy's friends as a comedian who was a fan of Josh's. So Josh and I did Ardy's podcast. Josh's friend was like a couple of hours late. So me, Josh and Artie were hanging out in his apartment from like 11 to 2. We watched Sports Center when Goodell was talking about the Flakeet. And then we watched my favorite document idea of all time. It was called the 7-5, I believe, about the, about the corrupt, yeah, the 7-5, about the corrupt cops in New York City. And we were just, just watching them, it was unbelievable, really a pinch-me type of moment, like, how did I get here? And so, so Artie's friend walks in, and he said, hey, you hear about Louis? And Artie's like, yeah, I heard some

stuff. What did you hear? And so they, they, they, that's a good impression. So he tells him, I'm like, wait, what? Huh? Louis is my favorite comedian of all time. And it was what came out, I don't know if it was a couple months later, a year later, whatever it was. I sort of like kind of forgot about it. I was like, wait, what?

Then it came out. Anyway, so Louis, needless to say, did some bad things. He's been canceled forever or canceled himself, disappeared, whatever. All right. All that aside, it was so good. Like, it was, for me, that is my type of comedian. Just belly laughter, un, un-unbelievables. I don't know if he, he doesn't do enough.

like his own thing. So I'll probably be on his website in a couple months. It was such a good special. Okay. Yeah. We saw him live before he got canceled and it was one of the best shows ever I've been to. I mean, it's rare to like get like multiple actual belly laughs, right? Where like your face hurts. Yeah. Smarter comedians. All right. And then you know what? We're going to save this for next week. So Michael Sembalist did a really good dive onto the media landscape, Netflix, YouTube. And he has his, he ranked his top films in the 21st century. So we're going to talk about that. But next week, he's a, he's a Ben guy.

He's a huge Ben Guy. He's a huge Ben Guy. Same for next week. He's a huge Ben guy. That was my first observation. He is a Ben guy. All right. Thank you very much.

And the show notes, please. Serve in the show notes, please. Thank you very much for listening. Thank you, Duncan, and the entire production team for doing what they do for us every week. Thank you for listening. Animal Spirits at the compound news.com. We'll see you next time. Only 36% of Canadian organizations indicate that they have adequate cybersecurity staffing.

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