Animal Spirits Podcast - Is the Stock Market Invincible? (EP. 447)

Episode Date: January 14, 2026

On episode 447 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss Jerome Powell, credit card rates, the institutional ownership of homes, lowering mortgage rates, how to fix the housing market, AI vs. the labor market, the broadening out of the bull market, the growth in sports gambling, where housing is still affordable, circular private equity deals, why TVs are so cheap and much more. This episode is sponsored by Innovator. Learn more at  https://www.innovatoretfs.com/pdf/ddq_product_brief.pdf Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's episode is sponsored by Innovator. On January 2nd, Innovator ETFs launched something brand new, the industry's first quarterly dual-directional ETFs, ticker symbols DDSQ and DDSQ. These funds expand Innovators' dual-directional ETF lineup by offering shorter, tactical, three-month outcome periods designed for today's fast-moving markets. What makes them different is how they're built.

Each quarter, these ETFs reset and are designed to pursue positive returns, whether the market goes up or down. Investors get one-to-one upside exposure up to a cap and one-to-one inverse exposure on the downside up to 5%, meaning if the market falls 5% the fund would be up 5%. It's a structured product-style payoff delivered in a liquid transparent, daily-priced ETS wrapper. And with DDNQ, this dual-directional profile

is now available on the NASDAQ 100 for the first time. To learn more, visit Innovatoretefs.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Riddholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben.

Michael, fool me once. What's the saying? Can't get fooled again. Two things that aren't going to happen. Throw this in my face of I'm wrong. Credit card rates are not getting capped to 10%. This Jerome Powell and Diamond is not going any further. Thoughts.

This is my knee-jerk reaction. On the first matter, uh, correct. Did Trump truth like? Like, any company that by January 20th is in violation of the law, I mean, it's pretty unbelievable what's happening right now. And sorry if you're, if you're a Trump voter and you're about to, you're going to take offense to what we're about to say. I'm not mad at you, right?

Everybody is entitled to their own political opinions. We don't talk politics on the show, but we literally cannot not talk about this because this is impact on the economy. This is impact on the market. This is, this is our lane. Okay. So, again, I'm not mad at anybody for who they vote for. I will give him credit for trying to bring cost down.

The way he's going about it is probably not the best way. How's that? Well, you have said, and I have agreed, that the interest rates that credit card charge, that credit card companies charge are onerous. Now, we all understand that a lot of the benefits, a lot of the rewards, all of that stuff, unfortunately, is what it is. It's subsidized by the people that make, late payments that are paying the interest.

That's where all of the money is coming from. There's some of the way that credit cards work doesn't feel like it's fair because it is people who carry revolving balance and pay these onerous rates 20 to 30 percent are effectively subsidizing people who get rewards points and pay off the credit card every month. One of the points that we made or that you made over time is like, why do, why is, why do credit card rates just continually go up all the time? Why do they have to go up? And especially you could say in a backdrop where like we see record earnings, the consumer

is generally okay? Like, why does it need to be so punitive? And I agree. Let's just say that the intentions, the spirit of what is trying to happen is good. Credit card interest rates should probably not be 29% of wherever they are. Okay. And also, a hard cap at 10% if implemented would crash the economy in two weeks. Part of the reason why we can't cap them at 10% is because that would dry up the amount of credit. The banks would just say no, we're just 10%. Now, maybe 29% is a but at 10% the math doesn't work. We can't. The defaults, like it just, we're not going to be underwater to loan money. No way. So it would tank the economy in two weeks. That will not happen. We'll not happen. It's not going to happen. We're not because the credit would be pulled back.

Unfortunately, these, these are loans that are like non-recourse loans that aren't backed by anything, right? And you can get them really quick. So if we did try to like re-did fix this industry, the credit standards would be higher. People who, who use the credit the most and carry the revolving balances probably wouldn't get it. And people would say, hey, that's probably a good thing. They're not paying high rates anymore. Unfortunately, what that would do is push them out to payday lenders. It would push them out to buy and I'll pay later more. They would find the financing somewhere else. And it probably would be a worse situation, unfortunately. It's not good. On the Powell front, this is not an attack on Trump voters, okay? But what is happening with

this is insane? You cannot indict the Federal Reserve, the chair, whatever is happening based on nonsense. I think I think it's about some of the, some of the reports about the building of a, of a new building or whatever. Trump was asked yesterday about this and he said he didn't even know about it, which is, whatever. Honestly, it does, the story sound like it was kind of pulty and what's the Fox Newswoman who's now in charge of something important. It sounds like they kind of went rogue on this. And so maybe this is one of the times where he does have deniability. But the point is you don't do this.

I mean, unless there's really a smoking gun. And Powell is probably one of the most upstanding citizens we have in government these days. And I don't think a lot of people even realize he's actually a Republican. Trump appointed him. So going after

him and he's one of the most buttoned up people. It would shock me if there's anything going, that there's anything wrong in his administration. He's probably one of the last adults in the room in government official capacity right now. So it's a bad look. And I also think this is, he's probably the last actual independent Fed share that we will have

in our lifetime. I don't know about that. I just, I don't know. Come on. This is a, this is now a weaponized, going to be a weaponized tool. Well, but a lot of people are pushing back on this. And I think hopefully this galvanizes both, both parties to just say, we don't do this. Like, we do not set interest rates based on the will of the president.

That is not how the economy is supposed to function. A lot of people are saying, hey, wait a minute, the stock market hit an all-time high yesterday. Obviously, the markets don't care about this. The thing is, this is a long-term thing. If this actually was something that, like, we're really going to tinker with the Federal Reserve in a big way, and some people will say, well, they've, you know, Nixon pushed back against his Fed chair in the past. But really, Fed shares have been, you know, Reagan let Volker take rates to 20%, which never would happen today, right? But the thing is, this is a long-term thing.

If we really mess with the Federal Reserve in a big way, like that, at a certain point, people start saying, all right, we need a premium on your U.S. government bonds. You know, it's interesting. I think that the move in gold, both in the longer term, like what's been happening, but especially the reaction on Monday, is a direct, you could draw a direct line to a lack of faith in what is happening. But and also, wouldn't you expect the dollar to be weakening if that were true? Are you also surprised that Bitcoin is not getting more of a bit here with this?

Yeah, I am. I am. I thought Bitcoin was the anti-system play, but gold and silver have seemingly supplanted it in the last 18, 24 months. It's very surprising to me. I am surprised. And yeah, if you're unable to see past your political affiliation that this is not great, like, come on. And I think as somebody who is not a big fan of the president's policies, I also do. think that I am able to see passes to this. So the Trump baby accounts or whatever we're calling them, I think is an incredible thing. It's one of the best pieces of legislation that has been

passed, at least in my recent memory. But this is, but you got to call balls and strikes. And this is, this is like, this is worse than a ball. This is a, this is thrown over the umpire's head. Like this is, we don't do it this here. Two guys who are not political at all and hate talking politics. Like, we'd rather not have, like, we're talking purely a financial angle here. We care about the markets. I've always said, my, my political party is the stock market. That's the political party that I'm a member of. Yeah. Democrat, Republican, or Independent. I vote for the NASDAQ 100 every election. Here's another one in politics. RFK Jr. said, I mean, these are quotes. Your kids are never

going to buy, oh, by the way, before we go onto the, onto the RFK thing, just this was hilarious in Bill Ackman. I don't know. What does Bill Ackman do? What is the point of fucking money? Isn't it to like to not be able to do this? So Bill Ackman tweeted, uh, credit, Happing credit card interest rates was a mistake. And then he deleted that post and then put up another post saying it's a worthy goal. I mean, come on, dude. Are you, are you effing kidding me? How haven't we learned in the 2020 is that, call a pair?

That FU money doesn't really exist for the richest people on the planet because they have so many stakeholders. I suppose it doesn't. Like CEOs don't have FU money. If you're a CEO that makes $100 million a year, you don't have FU money because you have shareholders and stakeholders and people that you have to appease. I suppose that's right, Ben. All right, RFK Jr. was on a podcast and he said, your kids are never going to buy a home.

There's three big companies, Black Rock, State Street, Vanguard. They basically just own everything. And now they've decided what they've decided is they want to own every single family home in our country. I guess it's one thing when conspiracy nut jobs on the internet say this. But when somebody who is as prominent as he owned, it was with Theo Vaughan. what are you doing, dude? This populist nonsense is like destroying our country. And there are legitimate reasons to be annoyed.

There are things that both parties do that piss everybody off. Not everything is perfect, but like deliberately lying and making it worse. So I think everybody, we have a very smart audience. I think everybody in our audience understands that Vanguard doesn't own any single family homes, okay? Vanguard, BlackRock, and Straight Shrew would they own everything? that's us. It's we. It's the investing class. It's the index funds. It's like, I mean, what do we? What is this? And the comments, of course, people are like, yeah, like, let's get them.

This is, this is, this is so dangerous. Anger works, I guess. I think that's what we've learned. So obviously the big, the other big thing was Trump decided that we're going to ban institutions from buying homes, right? And I think a lot of people like this because it seems like, yeah, this is a problem. These big private equity firms are buying homes. If you look at the numbers, Rick Palacios from John Burns shows the market share of home purchases by institutional landlords. That's people who own 100 plus properties. And it's 1% per year, essentially, or per quarter.

So 1% of all home purchases in the U.S. are done by institutions who want 100 units or more. I think it's like 3% of the total homes, he said. Yeah, but there's a huge asteroid scare. And I would say that like maybe, let's just give the president the benefit of the down and say there are good intentions behind maybe capping interest rates on credit cards, obviously not maybe well thought out, like not thought through the ramifications of, well, actually what would happen. You could say fine, like good intentions here.

Do the private equity companies, do these giant pools of capital need to be buying large blocks of houses. Probably not. I think this started after the GFC where they were scooping up houses on the cheap, which obviously was great for them and their investors. Probably not so great for people that were trying to buy houses. The crazy thing is, is that that was,

they were the buyer of last resort then, though. No one else could buy a house back then. So actually, the private equity company stepping in. But were stepping into what? Homes that were in default? Well, they were buying and then they were renting them out. So I think, I think, I'm not trying to defend private equity here. Don't put my name on that.

But I think at that time it was... Okay, so anyway, my point is this. No, that was not good intention, dude. They were vultures. They were sharks. And I'm mad. That's capitalism. That's the way it works.

But this number of they own 1% or 3% or whatever it is, I understand nationally it's a small number. But let's be real. Housing is local. And there are communities where... Yeah, Charlotte and Phoenix and some of these cities worth a bigger... Yeah, Blackstone's not in my neighborhood, right? But, like, there are a lot of...

of communities in which it does feel like institutional landlords own everything. Prices are out of control, not their fault. But yeah, fuck them. Like that's the prevailing attitude. And like that part of it, I do understand. Yeah. But obviously, this isn't going to make housing cheaper because it's such a small. And people say, hey, do anything you can for demand.

But I think when are we going to get a politician who just says, listen, the thing is we need to build more. We can do all these other things. But the thing is, it's got, it's going to have to be like a Gen Z or a, millennial candidate because the problem is that's just deeply unpopular like yeah build more but not in my neighborhood I know that's a but if you really want to fix I mean the funny thing is if you just put I don't know three million homes on the Northeast and three million homes on a West Coast and we figured out a way to do that it would probably believe much of the housing

issues that we have right yeah I'm making this up I'm out of my depth here I feel like there's like at least well I live on an island there's no there's no room to build houses we're full yeah You're right. Where do you do? So, like, yeah, I don't know the geography of where there is available land to build. But let's do it. So I think the day Trump got elected, I slacked you and Josh and I said, or maybe a research channel on Slack. And I said, Trump is going to buy mortgage or back securities and he's going to bring the spreads down.

I've been pounding the table on this. And now he says he can do it. I guess with Fannie and Freddie, he can buy like $200 billion, which seems like kind of a drop in the bucket. but I guess the spreads are already tightening. And Logan Motishami showed that, yeah, that from since 2024, 2025, 2026, the spreads are already lower. And so that's the spread between the 30 year and the 10 year, which the 30 year tracks the 10 year basically because a 30-year mortgage,

the average length of time someone keeps that mortgage is around 10 years. Okay. So I think this is a policy that we can both get behind. I've been saying we should do this for a while. I totally agree with this one. It makes a lot of sense. It's interesting that the rates are so low. It's funny, though, because a lot of people said,

well, if we ban this homeownership stuff, won't this be bad for home builder stocks? And our research team, Sean and Matt, one of those guys put the chart together. Homebuilders had their best two-day stretch since 2022. Wait, why would anybody think this would be bad for homebuilder stocks? Well, because they build a lot of the homes that the private equity companies are buying.

someone has to build them. If private equity companies and institutional investors pull back, guess what? That's less demand for new homes to be built because they're doing a lot of build up, right? So the thinking is, actually, this could be, if we did this institutional ban, this could be worse for supply of homes

because maybe the people who are stepping into buy, you know, but it's actually good for them. So this is the next step. So we're going to do buy the mortgage back securities, the next step, because this is what I would do. The next step is going to be, we're going to incentivize home builders to build more homes somehow. That's the next step.

I think the problem is at the local, at the state and local level, there's all sorts of red tape and I just don't think you could snap your fingers. So that's what I would, if you gave me a magic wand and said, fix the housing market, that's what I would do. We're going to incentivize and we're going to cut the red tape. And if anyone gives you, that's what you have to do. But you're right. It's so local.

How do you do that? Yeah. To me, this is a national emergency. And if they're able to pull something like that off, that would obviously be an enormously good, positive thing. All right. Can we talk about the job market? Sure.

All right. But the funny thing is, that was a lot of stuff. That was like a week's worth of stuff between the institutional ban, the mortgage-backed securities, the credit cards, and Powell. That's four things right in our lane that happened all in a week. And Venezuela. Yeah. I mean, the oil stuff.

Actually, you know what? Hold on. I have a great chart for the labor market. A chart could cook me up something. But this is why the takes game is not an old man's game, right? No, you got to be on top of this shit. At some point, yeah, you just, and it's not a bald man's game either. I got to be honest.

Okay. Check out this chart. So we have a weird labor diet. We have a weird labor market where the unemployment rate is still pretty low, but there's not a lot of new jobs being created. right okay so matt put in buckets of unemployment every half a percent below four all the way the left hand and nine point five to ten all the way in the right and everything in between half a percent right and then he showed the average number of jobs added over a seven month period per bucket and i asked him why seven months and he said that's because that's when the labor market

started to weaken recently. So we're using a seventh month look back. Okay. And on average, on average, we add 1.247 million jobs when the unemployment rate is between 4 and 4.5% over a seven month period. 1.247 million. Over the last seven months, we've added only 74,000 jobs. You see what he did here?

Yes, this makes sense. Okay. because we're obviously going in the wrong direction. So we look at the next one. I look at the unemployment rate going back to late 1940s. And you can see every time in history that the unemployment rate has started to rise a substantial amount.

And I could say that we're getting close to being substantial now. It's led to a recession. So the big question is, is this another one of those times that we break the rule? Because the other rule was, listen, anytime inflation goes over 5%,

the only way it's been remedied is by a recession. That's it. Inflation doesn't go this high without being remedied by recession. this time was different. Could we actually see the unemployment rate rise from 4 to 5% and not get it? I think we were a sub-for and not see a recession.

Is that possible? A nationwide recession, yes, it is possible. It doesn't it seem like this is the cycle for whatever reason that could break the spell? I'm not predicting this, but would it shock you if that happened this time around? Absolutely not. It's going to continue to degrade the social fabric. like it's going to continue with more pointing fingers, more blaming boogeymen. And I understand that comment makes it like people that are struggling don't have a

legitimate gripe. They do. Okay, they do. But and also just the blame game, blame immigrants, blame corporations, blame the government, blame this person, blame that person. Well, AI, we've got a lot of blame too. Blame AI, sure. I thought this was in.

So this is Tim Dye, who's at, SGH macro via Sam Rowe. And Sam Rowe had this piece called the Tenured Dividend Labor Pursuit. So he said, people are wondering, why does productivity keep getting better and improving if the labor market is so weak? Right. And he said, a key feature of this phase is a tenure dividend. This is from Dye. With hiring and quit rates near post-GFC lows, firms face minimal training and onboarding costs. Business survey responses to the Federal Reserve Bank of Atlanta indicated it takes roughly six months for new hires to reach full productivity, but a meaningful tale of roughly 15 to 20% of firms report ramp up periods of 12 to 18 months.

So that means it takes a long time to hire or train new people. The current workforce is therefore skewed toward fully onboarded experienced employees, mechanically boosting output per hour work. So they're not hiring new people at most places. So the people who are still there have more experience, that boost productivity. So it's like selection bias. I don't know if that's the right phrase, but. Obviously that can't work forever.

It's not being dragged down by newer, less productive employees. So maybe it's like, it's like an illusion that the average worker is getting more productive. Kind of, but I think it's also, it's just that a ton of new employees slows things down for everyone. Because you have to train someone new, right? That too. The question is, can AI do this? And this is your point of where people get really mad and we get pitchforks and torches. Can AI do this where we have unemployment is going from 4% to 6%?

but AI productivity helps and corporations don't skip a beat but we have this, that's the question. This is the nightmare scenario. Nightmare might be a stretch, but this is the not great outcome. I was last night during the game, I was on my couch

and I decided to fire up Claude Code. This has been getting, this has like been all the rage, particularly this weekend. It seemed to heat like a fever pitch. Have you seen people talking about this? A lot of people talk about this. I'm on the sidelines still.

Yeah, of course you are. And ordinarily, I would be on the sidelines too. I don't know what compelled me to fire this up and say, you know what, let's play around. But I feel like with this, it's like important to, I mean, for me, it just, I want to stay on top of what's happening. So I tried to install Claude Code. Got to be honest.

Not an old man's game. I had no idea what to do. I couldn't even figure out how to download it. I did some coding on my website recently. I said, I want to make it big, I want to make a bigger, I want to make it stand out more where it says to sign up for my email newsletter on my website. And I said, I think I did it through chat or Gem and I can't remember. I said, help me do this.

And then I said, no, make the line more bold and make this stand out more. And then it tells put this code in. I say, where do I put the code in? I have no idea. And it walked me through every step. If you just say, I don't know, where does this go? It walks you through. And then guess what?

I did it and it looks nice. It came up exactly how I wanted to. There was a lot of me saying to Claude, I don't know what's happening here. Like, it's not working. Help me fix it. You hit command, space. there's a terminal on your on your apple. I have no idea what's happening. I think instead of me doing cloud coding, I'll have an AI agent that does it for me. I, well, the AI agent is Cloud

Code, I believe, or something like that. So anyway, I had it build an app, a website, if you will, to locate the nearest toilet. That was the first thing that I can come up with. And it worked. It did it. It took about six minutes. So when I, when you're in college, everyone has a friend or group of friends who has an idea for a for a business like hey man we're gonna sell t-shirts we're gonna start a bar we're gonna do like I had a friend who we're gonna start a copy printing thing and the ideas are always really dumb but so when this people have the ability to try to build their own apps everyone's gonna be like oh my gosh I'm gonna build the next great app and they're all going to be horrible ideas well that's what's happening right now I believe like so

anyway we let's talk about the stock market all right here's a kind of Oh, wait, wait, wait, wait, sorry. Before we move into the stock market, one last thing. So Apollo did their chart book on the housing situation. And it was good. I pulled some charts for later, but what do you got? This one in particular, this stood out. Freddie Mac's serious delinquency rates for multifamily is the highest it's ever been.

And this is data that doesn't lie. So we could Hem and Haw about vibes and things aren't that bad, and I've certainly been guilty of this. This is bad. So why are delinquency rates so much higher for multifamily units? Because these are lower income people. Okay. Yeah, I got nothing. It's higher than it was in 2010.

No, it just is. This is a, this is a stark and sad and depressing state of the reality for these people. So the counterpoint would be this is 45 basis points of the total. It's a tiny, tiny, tiny. That's not a counterpoint. Why is that not a counterpoint? Well, because the microelement is the reality of life for these people is horrendous. Now, if you zoom out, I think your point is that on a macro level.

Yeah, I'm looking at it from analysis. You're right. One last thing. GDP growth has been actually not too bad, but this would be a major unlock. So if we start buying mortgage bonds and spreads compress and housing activity picks up, residential investment as a share of real GDP is close to an all-time low. It's just over 3%. So if this gets going, could be good for the overall economy.

That's part of it. It's kind of amazing that we've been in a decent economic situation, all things considered, without one of the largest portions of the economy contributing anything, really. Right. We had a mini boom in apartment building when rates got really low, then rates went high, and they pulled back on building.

And so, yeah, you think lower rates should hopefully help that. All right, here's the kind of headline that gets dunked on in the future, potentially, depending on what things go. Every Wall Street analyst now predicts a stock rally in 2026. This is from Bloomberg. So it says not a single one of the 21 prognosticators

served by Bloomberg News is predicting a decline, and the average gain next year is 9%. Can you blame them? That's my only question. Can you blame them for predicting this? I'm surprised there's not like one person that's like sticking the neck out a little bit, but Yeah, but also let's just, so I hear what you're saying, but let's just assume that there were one of the 21 strategists who did have a negative outlook, right?

Who just was going to say, you know what, I'm just shoot my shot, I'll be a contrarian, I'll be the one. Does that change the takeaway? You know what I mean? I know the headline is like, LOL, every Wall Street analyst, but if it was every Wall Street analyst but one? Well, didn't a lot of the bearish people kind of get, like there was a couple bearish people and they kind of just like, you're no, you're done for a while.

Yeah. I guess my point is like just focusing on the headline. Like, yeah, fine. I mean, but it's always like this. Sometimes there's one or two or maybe three. They're always bullish. Right. But history shows they probably should be.

That's what I'm saying. You can't really blame them. How about this one? Wall Street's risk on fever shows no signs of abating in New Year. So how about this? Let me just be clear. If this turns out to be a very bad year, we can cut this clip and say that I did not see it coming. I am not taking this as a watchout indicator.

They're always bullish. So what? Hey, I said the chances of a bear market are decently high last week in the show, didn't I? I still kind of believe it. You know, it's great about this show? We say different things every week. I forget what I said? What did I say 20 minutes ago?

I have no idea. I wasn't. No one holds this accountable. All right. So Bloomberg says there's a synchronized cross-asset rally in 2026 from meme stocks to high-yield bonds, a small-cap company shares showing no signs of slowing down. So look at this. The Round Hill Meme Stock ETF is going nuts now again.

high yield is doing decently well. I got to take some umbrage with the, uh, the access for the high yield here. This is, they show 80 twice and 81 three times. So, um, but Russell 2000 is finally joining the party a little bit. That's taken off in the last few months. Uh, so it's just showing that the risk appetite is hitting other areas. And again, I think some people would look at this and go, oh, no.

I think you look at this and you go, the bull market is broadening out. Like from a, if we're looking at from this a technician perspective, which I'm not, I think you'd have to say the fact that things are broadening out, this is a good sign, right? It's a great sign. Come on. If you've been in the market long enough, you know that, of course, there's no guarantees. Nobody knows what's going to happen. But a broadening of the rally, a relentless uptrend with more and more stocks participating, if that worries you, you will never make money in the stock market. I'm telling you right now. If your knee-jerk reaction, is to be bearish when things are going well.

That's a personality type and sometimes getting cute works, but generally speaking over the course of your career and your life as an investor, to be a need, or contrarian when things look really good, that's not how you make money. Yeah, you can't say, I'm worried because nothing else is going up except for seven stocks and also worried when everything else is going up now, too.

You can't have both. Yeah, I get the former. If you're worried because it's a really thin market, like, okay, yeah, that's legit. I get it, right? Like it didn't work, but I could understand that mentality. If you think like this is as good as it gets because things are now working, like, because the Russell 2000 is finally breaking out after four years of going sideways.

This is super bullish. It just is. Deal with it. We've spent a decent amount of time talking about or wondering, like, what is going to happen with international flows, like when are investors going to get excited? Todd just sent me his deck this morning. And what of Todd's sewn at Stratigas, one of the charts that he shared was emerging markets, another area that has been just dead money doesn't even begin to do it justice.

I think like a lost 10 or 12 years almost. I honestly think it's close to 20 of sideways, nothingness with lots of chop, lots of bare markets, just disgusting behavior. And he shows the rolling 12 months sum and like it's picked up in a serious way. People are getting involved. China's breaking out. Like things are looking better for sure. You'd be surprised.

I looked this the other day. I'm doing my asset quilt. Because last year was up 35% or something. So in the last 10 years, what is the 10-year return for EEM, which is the I shares the Emerging Market Index? You're never going to get this. Annual return. Because I would have guessed annualized is like 4.5%.

Almost 9.5% in EM. Wow. You had 35% last year. That helped. So that's higher than you would assume, right? So some of those bad years, the thing is, So here's the thing. If you look at 10 years as of 2025 or 2024, the annual returns like 3% per year.

One of the bad years dropped off. A good year comes on. Now we're at 9%. So it's kind of a game thing. I'm looking at a monthly candlestick chart. And yeah, dude, this thing peaked in October 2007. And then it peaked at the same price in 2021. And we're basically like just now getting above those levels from 2007.

But guess what happens would investors see high one, three, five-year returns? They start to get involved. Oh, and then that's why money pours in. And so people are paying attention a little bit. All right, let's talk inflation real quick, which came out this morning. We're recording Tuesday. What is it? Market just opened.

What happened to your bell? You don't have a bell anymore. I used to have a bell. That was think or swim. Yeah, I'm a whitecharts guy now. Okay. You used to always have a bell that would ring open and close. You should just pay someone to come do that for you now.

Just come and ring a bell in your office and then walk out. So the inflation rate came in at 2.7% for all of 2025. That was the average annual inflation rate for 2025, all right? If you believe the numbers. Yeah. And guess what? People on Twitter, they don't believe the numbers. Anytime I post about inflation, comments aren't great.

So Whitecharts has inflation data in the U.S. going back to 1914. We're talking World War I. 100 plus years. The average, I said that like a, that was a weird. Average? Chicago, that was Chicago. The average annual inflation rate in that time is 3.3%. That's like long term U.S. average is right around there. Three, three and a half percent, something like that. We've been below that long term average for how many months now? I'm giving you a lot of quizzes today. Six.

18 months going on now that we've been below the long term average. Now, if you look at a chart, a long term chart. Sorry, I'm not trying to be a jerk, but that is completely erroneous. I mean, after the worst inflation in 50 years, the fact that we're below average, I mean, falls on deaf years. Don't come to me with that. No, no, I have a new theory on why. Because if you look at the historical chart of 100 years of inflation, this current period, I know we didn't have it for a long time.

If you look back pre, like 1970 and before, all the inflation increases, you'd look at this now and go, that's so tame. What is wrong with you people? Why are you so up in arms and mad? This is nothing. This peak of inflation. You're kidding, right? No, I'm just saying, if you looked at the historical record of all the inflation spikes before this, you look at this period and go, that's a drop in the bucket.

What's wrong with you, people? So listen to this. Listen to this new theory I have. I think what you just said is absurd. If you look at the long-term chart, you wouldn't pick this one out of the, there's 10 peaks that are higher. We're an alien to look at a chart and not understand human beings. would they say, would they make that conclusion perhaps? I'm just, yes, that's what I'm saying.

Here's one of the reasons why, here's one of the reasons, and this is such a simple thing. I was just think about this the other day. Think about how hard it was to spend money in the past. It was impossible. You had the bank held your money for you. You had it under your mattress and it was cash. It's so much easier to spend money now. It's harder for people to slow their spending because you can click a button.

There's no friction. It's so easy. I was thinking about this. I buy way too many clothes and stuff because it's so easy. I go on a way. I get an email from someone, hey, Ben, come on, 30% off. Wait, you left this in your cart. Leave it 30% off.

Come on. Come back. And it's so easy to spend. All the next year that I have, like this here, snazzy hoodie, guess what? I never, not never. I would go to Models twice a year maybe. Like, now I'm shopping 24-7. I can't stop.

Exactly. It's so much easier everywhere you look to shop just to the click of a button. Amazon, I don't need this, but I want it. It's so much easier to spend. And so I think slowing your spending has been so much harder this time. You know what I bought on Instagram recently? I saw a video of like, what would happen if you drowned in a car and like why you can't open your window or get out? And it was an advertisement for like a little thing where like you could like cut your seatbelt and like bash the window and I bought two of them. Because obviously you, You can't just buy one. It's like a two-pack.

And Robin's like, what is this? And I said, if we're, you know, if we ever fall into a lake and then I realize that I'm like, if you're ever part of a Harrison Ford movie, you can get out of the car. Yeah, there's no, there's no lakes around here. There's no, what a, what am I doing? You grow off a bridge. What are you talking about? You're right by the ocean.

You've got bridges that go over the ocean. This could happen to you. True. If the GW collapses while I'm on it and we happen to stick the landing, we could, we could, we could, listen, you're looking down at your phone. and you don't realize and you drive right off one of those bridges

that we go under on your jet ski, like, this could save your life. Actually, you know what? I stand corrected. Great purchase. Yeah, I'm on board.

But then you, like, you land in the water, then you go, oh, no, where did I put it? Is it in the glove box? Is it in the middle? Shit, it's at home. Yeah, I can't find it.

You know what? This brings up another, so I've got many character flaws, way more time, way more time than we have available for this show to discuss. But one of them is, like, I'll just have little nuisances, not even pile up, but just repeat forever. Like, for example, I have Substack on my phone.

I think I installed Substack, the app in my phone. And so every time I get a new follower or new this or whatever, like my notifications are turned on. That's what I'm trying to say. My notifications are turned on for Substack. And for about six weeks, I would get 11 a day and I would just like, oh, look at my phone. Oh, that's a notification.

and I would just like, you know, clear it. And then I had this like, why do I have notifications on? Like, I can turn them off, right? This is a choice that I'm making. So I turn my notifications off for substack. And I also realized, like, I've got notifications off for Amazon deliveries, only because it's been on since the minute I downloaded the app. For four years, I've never turned it off.

Yeah, I hate notifications. Anyway, I don't know what's wrong with me. I just let little things. You know what I did? Mine build up to all my emails because every time I sign up for a new clothing thing or whatever, So my email every morning is just full of all these different retailers trying to pitch me. Do you have, so in my personal Gmail, I have my main inbox and I've got a promotions tab and an updates tab. I use Yahoo because I signed up for it when I was 18 years old.

I know. My God, dude. But I went through and I ups up. You use Yahoo? I know. It's my very first email. I have a Gmail in a Yahoo. But I went through an unsubscribe to every single email that came into me for a week.

And now my email is so clean. I just hit unsubrived everything. Use, use, that's what you lose cloud code for? You know, you could do. But wait, hold on, what do you use your Yahoo email for on a personal level? Is that just like that your email account that's going to like your flights, you're this or that? Yeah, I've just literally had it forever.

I never changed it. And do I want to use Yahoo still? No, but I did it when I was 18 years old. And I haven't been able to change it since because that was the one email address I signed up for. All right. Sound of the Times. AI evaluation startup. L.M.

valued at $1.7 billion in new funding round. $1.7 billion funding round is really sort of nothing with nothing. But that's not the good part. The good part is this. L.M. Arena, a startup that operates a widely cited ranking of AI models based on their performance has raised $150 million. That's nearly triple the valuation of its seed funding round announced in May 2025. Whoa.

Kind of nuts. That's pretty quick. And again, I mean, obviously I know nothing about the product. I'm not saying it's not a good idea or whatever, whatever. It's just, you know, sign of the times. I had, speaking of sign of the times, I had Matt and Sean make me this chart of AI platform valuations for like the big three. So check this out. I'm dropping in here right now.

Open AI, Anthropic and XAI are now all valued over $200 billion. look at the look at these different so the the dots on the chart then or when they raise money I mean you can't see this if you're listening but it's just up until the right like kind of wild not kind of wild wild so when shouldn't when does this gap close a little bit between what and what I I think it's kind of over for opening I and Google I think Google is like in 18 months we're going to go wait why do we think opening I was going to win like you saw that Apple said Siri is going to use Gemini for their AI. Don't you think at this point, beyond the inertia of people just using chat, that like Google is clearly going to beat them?

I don't know. You might be right. Am I jumping the gun here by saying it sure feels like that at this point, that it's inevitable that Google is going to be the winner. Okay. And I'm going to feel like an idiot at some point if it all falls apart. But that's what it feels like today. Well, I think, I think two things. I think you might be right.

It sounds, that sounds like a premature call. But and also a $500 billion valuation for Open AI, which was assumed premised on many different assumptions, one of them being that they were going to be like the dominant player. And they are. That sounds like a crazy high valuation. Yes, that's what I'm thinking. But I could be wrong because chat just having the branding,

that could be it, right? Yeah. It's kind of like Bitcoin being the first crypto. Like that had the branding. All right. I want to talk gambling for a minute. So Matt Stoller had this tweet where he says, the second fastest growing sector in America in terms of GDP growth from 2019 to 2024 was gambling. So the BLS had this report that looked at different sectors and industries and looked at their GDP growth.

So the highest GDP growth was for software publishers. That was like 9% per year. Gambling was 7.6%. Now you could say like what was the base, right? It's coming off. It's a new category. But a lot of people looked at this and said, this is horrible. This is bad.

It is. It is in some ways, but don't, so I feel like we have to segment this because we did this early on with Robin Hood where we said, listen, is everyone on Robin Hood a degenerate gambler who's just buying options and a second of them, yes, but are most other people using it relatively responsibly also yes. And I think you have to do it with gamblers. Are there, so, I disagree. Gambly, because gambling is negative sum. Of course, but don't you think one of the biggest reasons is not just financial nihilism and young people who are giving up on the, the world. Do you think a lot of it, if the GDP growth is that much for this segment, do you think most of it is disposable income from people who are using as entertainment who

have money? Yes. Yes. Guess what? All of this money is not coming from 20-year-olds. They don't have a lot. They don't have any money. They're betting $25 a game. The people who are betting the most are probably in the 30s and 40s and 50s who have disposable income. That's why this is such a growth arena. Yes. And also, I would, I would wager get it that the amount of people that are ruining their lives financially and their family's lives is 50 times greater than people that were day trading yoloing on Robin Hood 50 times because you just it's just different with trading you smell the roses you take a few beats whatever but like gambling is an addiction you get hugged

you lose, you double down, you go up, you spiral. It goes to zero immediately if you lose. Like when you buy a stock, it doesn't go to zero the next day. Correct. Options can maybe, but. So I think that, yes, are a lot of the people that are gambling doing it so responsibly with money that they can afford to lose? Yeah, but I think a lot of people are getting really f***ed up.

And I think a lot of lives are genuinely being ruined. I don't think it's like 2% of the people. I think it's much higher than that. If I could, I would get rid of sports gambling immediately. I would, if I, like, I think it's going to ruin the leagues. in a lot of ways. I think it's horrible, especially for, for, like, for the people that, it's just, it's too big of a price to pay. It's negative sum, and I love gambling. Like, right? I, I enjoy the I don't, I don't think it's a good thing. I would, if I had the, my druthers, I would get rid of it

immediately. I don't think it needs to exist. It's not, it's not, it's not, society does not benefit from having draft kings and fan duel on our TV, uh, sponsoring commercials every 30 seconds. It just, it doesn't. All right, let's talk about crypto. I, uh, I, uh, I feel like a, A weight has been lifted as too strong of a turn, but I feel much better about my crypto exposure. I got lucky with sold into a little bounce. I sold the third of my Bitcoin at 93,000. I sold the third of my Eth at 3255, and I'm good. I feel like, I feel, okay, this is a number that I'm comfortable with.

I've now sold, I've now sold twice. Last time I sold was at the peak, not the brag, got lucky. But I feel good. If Bitcoin crashes, it won't feel good, but I'll be fine. I'll buy more. if it moons for whatever reason, I'm good, I'm there. I just, I feel better about my personal position. It's a rebalance, right?

You right size? That's the same thing I did. I feel better. Yes. Even if Bitcoin doubled tomorrow, I wouldn't, I wouldn't regret it. No, no, I'd be thrilled. I'd still have a healthy position. I'd be thrilled if it doubled.

I still can't believe that it's below where I sold my first time. That's so surprising to be. Okay. Did mayor, former mayor of New York City, Eric Adam, like literally do a rug pull. Like what, W2EF? I sent you and Josh an image of

at Helms. Wait, is that, is that a hell? Yeah, from the hangover in the back of the cop car, he's screaming what is going on. Remember that scene?

Yes. So, all right, here we go. This is from Yahoo. The former mayor announced the token at Times Square Press conference on Monday, saying the project would address anti-Semitism and anti-Americanism.

using revenue generated by the token, while also teaching children, quote, how to embrace the blockchain technology. Dude, get right out of town. What even the F and F are you talking about? What the hell sort of bullshit nonsense? You're making a token to fight anti-Semitism and anti-Americanism? Okay. So the premise is deeply nonsensical in the most deeply nonsensical. terms possible. I repeat myself.

So I still don't quite understand the, because I saw all this stuff last night, people, and obviously the crypto people can see it. Like, it's all on chain. They can see what happened. Hey, he rug pulled $3 million or something. I can't even tell if this stuff's illegal anymore because the Hawk Tour girl did it. And she went away and then I guess she's just fine. She just like stole a bunch of money. But if you get rug pulled on this, you deserve it.

Sure. If you invest in this, something like this, all you're trying to do is like catch the pot. Like, if you get rug pulled, that's on. You. I'm, okay. I have, I am, I, I, I, and he's a scumbag. How's that? I'm a sympathetic, empathetic person with many different things.

I have no sympathy for people that lost money in this. None zero. I'm sorry. Negative sympathy. Okay. Also, this guy's a piece of shit if this is true. So Yahoo says a wallet linked to, to him, uh, newly launched Crippa token allegedly pocketed nearly $1 million dollars through a suspicious manipulation of a liquidity pool on

Monday. The creator of the NYC tokens sent 80 million coins to an account that added the tokens as liquidity on a decentralized exchange. That account then removed $2.4 million, three million in USDC before adding back $1.5 million, leaving approximately $932,000 in unaccounted for USDC liquidity. On-chain analytics platform bubble maps confirmed to decrypt on Monday. Obviously more to come on this, but if this is true, like, What a scumbag piece of garbage. But I can't even tell in crypto anymore what's legal and what's not legal. So I don't know what the law is, but this is clearly, this is a pump and dump.

This is a pump and a dump. What an asshole. All right. So let's talk real estate a little bit. So I pulled this one from the Apollo chartbook that you mentioned before. And this chart is kind of a faceblower. So this looks at median home prices by county. Okay.

And it segments them to three different price points. less than 250 for median house price, $250 to $350,000 and over $350,000. So in the west, the northeast, in the southeast, most of the median home prices are over $350,000, obviously. Basically, two-thirds of the country, the median home price in these counties, is less than $250,000. How surprising is this to you? Now, obviously, you go, well, yeah, of course, no one wants to live there.

Or it's cheaper to live there, but, looking at this, the visual of this is very, it's hard to, it's hard to reconcile with what's going on. And this is why I said, if we just put three million houses out west and three million houses on the east side, obviously I'm overgeneralizing. Would that not just fix the housing solution? I don't know. That's a, that's a big question. But are you surprised that there are so many areas with relatively cheap housing on here? No. And this is just a, great visual, this is, this is, this is the chart that you show people when people are yelling at

each other about housing. It's like, we're talking past each other. My housing situation and your housing situation and that person's housing situation have nothing to do with one another. The only thing that we share in common is mortgage rates. And even that we don't necessarily have in common because people with money have access to better rates, but it is just such a fractured market. This map is an advertisement for remote work. Move to Arkansas or Iowa, someone in the middle of the country, cheaper housing. Okay.

You asked me a couple weeks ago, how is the Grand Rapids housing market doing in your area? And I get an email from like my mortgage broker through the bank, like once a week and update, hey, Ben, and I always kind of forget about it. But this one said, hey, Grand Rapids housing market update. So I looked at it. And we're one of these places, obviously. Median sale price, $345,000, up about 5% from last year. Total homes sold in Grand Rapids, 887, which is down 15%.

Median days on the market is 19. And the supply of inventory is 1.9 months. So there's no supply. So I think the average right now nationwide is like four months or something. Median days on market is wild. 19 days. Isn't that nuts? No change from last year.

So that obviously the housing market here is still pretty strong to quite strong. The housing market in my neighborhood is very soft. Like there's even a couple of decent homes. They're just not selling. These numbers surprised me how quick things are still going. Pretty nuts. Okay. This is a little bit of green shoe.

It's a little bit of good news. Housing affordability index still as low as it's been. If this is a stock chart, and I know it's not, I buy this knot out of this. It looks like it's bottoming. And then if you turn it over, you look at the average, this is objectively good news. Average monthly mortgage payment on a new 30-year mortgage is rolling over. Because rates are coming down? Yeah.

And housing prices have more or less. stagnated. I think housing prices might end the year up like 1% or something for 2025. It takes a while for them to totally update. Remember a few years ago when we kind of thought the conventional wisdom was just buy a house now and refinance in a few years? It'll be fine. And you still haven't been able to. How are those people feeling? Because they've probably got a little bit of equity from housing prices rising a tad, but that has to be a pain. This is such a good point. When we say, how are those people, which people, which houses, where do they live? What does their job look like?

What does their family situation look like? Right, you can't just bucket how to- You're doing that way too much today. No, I'm not. No, I'm doing way too micro. I'm doing macro. No, you can't say how do people- Let's call up Larry down the street and see how he's feeling.

You can't do that. How do people who bought a house in 2022 felt? I mean, you can't, I'm sorry. That's not a bucket of- What is the median person feel? Probably not great because they thought they were going to refinance. You can't do it. You can't median that.

Sorry, you can't. I'm a stickler, I guess. You're doing way too much nitpicking today. Sorry. Sorry. Okay, I didn't read Nick's post today, his home equity, fake wealth. Okay, I've got strong thoughts about this. So he did a post about his home equity fake because people say, you can't do anything

with it. And Nick was saying, like, his whole take was, listen, you can rent, okay? And he's saying, like, where he lives in Jersey City, which is where? Right across the water or what? Mm-hmm. Okay. He's saying, like, listen, it's so much cheaper for me to rent. If I bought a million dollar home and I paid the mortgage and I paid the insurance and the property taxes,

I'd be paying double one monthly payment as I am to rent. So he's saying, like, if you want to sell and rent, like, that's how you lock in games. But I think this whole idea that home equity is fake wealth is such a dumb idea. The people say, look, well, you can't do anything with it. You can't touch it. So it's not real wealth. Did Nick say that it's fake wealth? No, no, no.

Nick is saying that's what a lot of people are saying. He kind of said, like, here's what you can do about it. How is that fake wealth? It's an asset. A lot of people are saying, well, you can't really do anything with it because you have to borrow against your home or you have to downsize or whatever. And I think that this is just, I think a lot of people assume that spending is wealth. And guess what? The lack of spending, that's the wealth.

Right. Just because you can't spend your house doesn't mean it's not, you're not building an asset and it's building wealth. Here's what you can do with it. You can use it to trade up to a new home because it'll make a new home way cheaper because you use your equity as a down payment. You don't have to save for a down payment because you have equity in your home. That's a huge asset. borrowing against it. If you have a big project coming, do so you don't have to sell your investments in the stock market

or get out of high-yield bonds or cash or whatever, like you can use a home equity line as a bridge loan. Like there are so many things you can do with home equity. It's a huge asset. Yeah, that's crazy, Tom. Calling it fake wealth. And it's also the fact that you can't get out of it quickly is one of the reasons it is an asset. Like it's a long-term wealth. Amen.

All right. It's not fake wealth. All right. All right, let's do private markets for a minute. I did a conversation on Talking Wealth, which is a podcast I would deal for advisors on GP Stakes with Todd Owens from Cantilever, which was an awesome conversation. What are GP stakes? GP stakes are investment pools.

They take minority investments in alternative asset managers. It's a great business, all else equal. you are buying a piece of a business. You basically, you're being the GP. In other words, you're buying the fees. Instead of paying $2.20, you're buying a piece of the revenue stream.

You can model the hell out of it. These are illiquid investments. You have an upside call option if there's performance fees. Like, this is a very attractive area of alternative markets. Guess what? The GPs usually beat the LPs. Almost always. Yeah.

Right? Okay. There was an article in the Times, towards the end of 2025, investors warn of rot in private equity as funds strikes circular deals. So you and I, I think, were fairly early in identifying this private equity thing. I'm seeing a lot of activity in my inbox. What is happening? It's secondaries to the new private credit.

There are so many emails of secondary funds that are taking investors out of their original investments. Now, there is nuance here. It's not all bad. It's certainly not all good. I would say that this is definitely, definitely something that has my attention. I am looking skeptically. I am looking sideways at these deals. Why is this happening so frequently?

How much money is stuck? So we will be talking about this a lot. What kind of discounts are these sales happening? So when I was back in my endowment days, we owned a couple secondary funds. And they would buy them for like 40 to 50 cents on the dollar. It was a huge, huge discount because there weren't that many that happened.

Private equity was so much smaller back then. I'm talking like 2008. I'm sure those secondary funds did phenomenally well, generally speaking. Because you immediately write it up back up to a dollar, right? You buy it for 50 cents. You write it up to a dollar. You have an IR already

just based on the NAV, right? Yes. By the way, that behavior is obviously bullshit. But you buy something for 50 cents, market to a dollar, take fees on a dollar. If you're able to buy something for 50 cents, I'm sorry, it's not worth a dollar. Don't bullshit.

a bullshitter. I'd be curious to hear what the discounts are these days. I don't know. All right. Junk Bond Investor shared a chart. I believe this is from, I've seen this chart. This is from HPS. It's, I think, direct lending spreads versus broadly syndicated loan spreads.

So it's basically trying to make an apples to apples comparison in terms of the credit quality of the underlying borrower. Private versus public. Okay. So at Junk Bond Invest wrote 200 basis points excess spread versus syndicated loans. here's what that 200 basis points is paying you for. Can't sell it. Can't price it.

Borrow can stop paying cash and switch to payment and kind. And you market yourself. Okay. So that's the risk premium, right? Yeah, there it is. Fair summary. So then obviously it's up to the investor. Okay.

Obviously, the person with the junk bond investor handle is probably a little... Yes. Has some skin in the game there in terms of... Yes. Probably doesn't think that the 200 basis point... points spread it's worth it. Right. Okay.

So Silicon Valley Bank, remember them? Mm-hmm. Did a post on state of the markets. And venture-backed companies have been in a deep, brutal, bare market, like an epic bear market for the better part of three years. I don't want to say nobody talks about it. That's absurd.

I don't think we speak about it a ton on this show because it's outside of our purview. It's outside of the public light for the most part. But a lot of the mega growth funds that came in in 2021 and wrecked the markets and write valuations and just turned the market upside down. Like this market has been completely frozen and it's starting to heal in a good way, like genuinely in a good way. Yeah, the pendulum swung really wide in both directions on this. So they have a couple of charts that I wanted to highlight.

One is the speed from a series A, from a C to series A, series A to series A, series A to series B to C, was happening so fast. Like, that was... Think about how spoiled those founders got and like probably assuming this is just the way it is? Yeah, you have 24 hours. Right. You want to give me your money? I don't care. I got someone else on the street to give it to me anyway.

So here's a great chart. The companies, so they're looking at the average revenue growth, the average revenue end growth for U.S. VC. Back Tech IPOs. And the takeaway is companies are bigger, but they're slower. So it shows how much revenue on average from 2010, 2010, 2013, 14 to 19, 20, 21, 22, and 25. And it's up until the right.

So these companies are much bigger when they IPO, like significantly so in terms of revenue in market cap. And the average annual revenue is slowed pretty dramatically, like pretty dramatically. 9%. Not great. Not great. And then they have a great, they have a great chart showing the underwriting fees and ongoing compliance costs.

The underwriting fees as a percent of float for larger companies, obviously it's smaller, right, with scale. But like, if you're raising $250 to $500 million, it's 6 percent. And the annual cost, I mean, the annual costs are not nothing. 50 basis points, give or take, a little bit more. It's expensive. Going public is very expensive. Isn't it crazy Silicon Valley Bank still exists?

I'm just looking at these reports. Yeah. How is that still a thing? Well, they were, who bought them? Citizens. Citizens Bank, yeah, yeah. All right, we had two. So it's earnings season.

I love it. Very excited. We get to hear from the companies. Do you know I'm all about that? Jamie Diamond this morning. Let's see what he said. The U.S. economy, this is from the transcript, has remained resilient. While labor markets have softened, conditions do not appear to be worsening.

Meanwhile, consumers continue to spend and businesses generally remain healthy. These conditions could persist for some time. This is basically Jamie Diamond saying, holy shit, things are amazing. He's like, me and Josh's morning said this is a top. Yeah, I mean, obviously I was kidding. He hasn't sounded this positive in years. Yeah, he's like, fine, things are awesome. I can't, I can't even lie.

I guess he can't shake it anymore. Maybe this is where things finally turned down. All right, Delta. This is pretty remarkable. So record revenue, record performance for the fourth quarter, record year in 2025, even with a dramatic slowdown in foreign travel. I haven't seen the numbers yet, but pretty incredible, the consumer.

All right, so they say 2026 is off to a strong start with top line growth accelerating on consumer and corporate demand. For the full year, we expect to deliver margin expansion and earnings growth of 20% year over year. How about that? So Delta's breaking out again. You see this chart? Those are big boy numbers.

20% margin expanses and earnings growth. Yeah, I see Delta. So these stocks were down, what, 670, 80% in the pandemic? I would guess 80%. Now, Delta has separated itself from the competition. Why is Delta so much better

than every other airline? Like, it's not even close anymore. Yeah, so it is so much better than every other airline. And why is it? I can't tell you. Like, why are they out? executing everybody else, don't know.

The planes are better. The seats are more comfortable. They have screens. It's great. It's fantastic. All right. Let's talk to the box office. 2025 was only $350 million below the previous year.

For a kind of overwhelming year, that's not so bad. Really? I thought people said this was like a banner year for movies. No, it wasn't. We had Avatar. We had Zootopia. We had... You don't think so?

Sinners. And one battle after... There was a lot of movies people talked about. No, it wasn't. It wasn't. I'm telling you, it was down $350 million. This is a secular decline. I'm totally selling your theory that 2026 will be higher. Every year is going to be lower from now on. This is it, man. It's over. 2026 will be higher than 2025.

No way. Sorry, man. It's done. Movies are done. I don't think you've realized this yet. They're done. Unless they double the ticket prices, movies, like, as a thing, it's just, it's slow sec- It's, it's not cyclical, it's secular. I have more experience than you do on this topic. You're blinded.

You have blinders on because you go to the movie all the time. How do I, that, dude, the opposite. You have no idea because you have never been to the movies. I go frequently. So for it. And look at the numbers.

People would rather watch a movie at home than go to the theater. It's true. It's easier. Well, of course that's true. Of course that's true. And that is already reflected in the right.

That's not going to happen in 2026. That's been happening. Right? 2026 is not the year that people decide to watch movies at home. That's been happening for the last decade. It's just slowly but surely eating away. So is it going to continue to get worse? So, okay, I'm on the other side of that.

I went to, I took Robin to see The Housemaid. So Robin and I haven't been to a movie together since, since, what's it called? A Star is born. What year was that? 2018? I've never heard of The House Maid. It sounds like a Jennifer Lopez rounder. Okay.

With all respect, you can't say I've never heard of the Houseman and have an opinion on the movies. The Housemaid... Sydney, Sweden comes out with a new movie once a month and no one cares. How wrong are you are, Ben? So, we went to the movie theater

and we... So we saw... We did movie and a dinner. So I said, you know what? Let's go see the 4 o'clock show. Nobody's going to be there. We'll do dinner at 7. We'll have a fun little night.

And she read the book. So she was like fine. She was actually excited to see this movie. Dude, the theater was packed. I couldn't believe it. I thought at 4 o'clock showing was going to be empty. There was at least 100 people in the theater. I was genuinely shocked.

I thought it was going to be empty. Housemade box office mojo It's got a 7 out of 10 on Ndb that's not bad Do you like the movie? It's it's it's it's it's done $100 million at the domestic box office Okay that's not bad That ain't nothing it's done 150 global

All right so the movie I had a great time I had a good time It was fun it was a terrible movie Terrible might be a stretch but like It wasn't The reading was pretty good I can't believe the critics The critics gave it a 72%

The audience loved it You know it was fun I was fully entertained, money well spent. Anyway, yeah, listen, I'm not like, I'm not an idiot in the box office. I understand numbers have been down every single year. I'm just saying I think 2026 is the year that it comes out.

One of the reasons why it was as bad as it was is because some of the movies that were supposed to come out in 2025 didn't. The Michael Jackson movie, for example, is probably going to do a decent that that was punted to 2026. No, any of those biographies about musicians now, they're dead money. I don't think the Michael Jackson one is going to. to make money. All right. If you're hanging your head on Michael Jackson biopic for 26, I'm going to be the winner here on this bet. We'll check back in any year.

All right. Wait, hold on, last thing, last thing, last thing on streaming. So this will kill the theater. Netflix, somebody tweeted that Netflix is reportedly interested in giving a 17-day theatrical window for Warner Brothers films once they acquired the studio. That will nuke. That will be the end. Like, that will, that will, that's, that will be horrifically bad for, for Hollywood. The writing is on the wall, my friend. All right, this is the blog post I've been waiting for. Why are TV so cheap? Construction physics, pretty good stuff I've looked at a few times.

They do a detailed breakdown of LED stuff. And a lot of it I didn't understand, but it shows the cost of price per area pixel has fallen 90% since 2000. Okay, so this is not just all the streamers coming in, okay? It says since 2000, the story of TV is falling in prices, largely the story of liquid crystal display TVs going from. from niche, expensive technology, to mass-producing an inexpensive one. It's basically Moore's law.

It says they followed a similar path of semi-conductor manufacturing. And this blog post is actually worth reading. But it says, an important driver of cost reduction has been manufacturers using larger and larger silken wafers over time. In fact, sheets of motherglass have grown in size much faster than siloquin wafer's for semiconductor manufacturing. It's showing that the technology has gotten cheaper and easier to make. So it's not just everyone said, no, Ben.

It's just the streamers. They're subsidizing. It's not that. So my thinking was, well, why? It has to be a cost thing. It has, so that's what it is. The technology has gotten cheaper to make, and that's why TVs are cheaper. Great blog posts.

Check it out. Motherglass. I never heard the term before. I did. It's basically just, it sounds like it's just a Moore's Law kind of thing where this technology has been easier to make. Good stuff. Ben, I haven't, I haven't stepped on a, I haven't stepped on a scale in a while.

I'm afraid to see what the numbers would show back at me. I've been eating, not terrible. I mean, I've been better recently, but like the fourth quarter was bad. I was just through caution to the wind. Whatever. Yeah, I'll eat it. Cares. I haven't started my diet yet, but I'm mentally gearing up for it.

And I asked Robin if the scale was broken because I was only 176 pounds, which I was, but you know what? This is a case of the scale lying. I don't look good. Like, my, I'm flabby. My belly looks terrible. I'm fat, but light. That's not really where you want to be. Are you looking for a pep talk here?

What are you looking for? No, I'm merely sharing. All right. Call your trainer again. I can't. It's been too long. I'm embarrassed. You don't need to do it in your house.

You have to go to get a trainer at a gym. I can't go to the gym. I have time for that. You can make it happen. You get up early. All right. This is a sign of progress from flowing data. Number of restaurants by cuisine type since 2018.

Pizas are in a huge decline. Mexicans up. Coffee and bakeries way up. American is up. But I see this as a sign of progress. Every city you go to now has way better, better restaurants. They're more niche. There's breweries.

There's all these different things. And in the past, everyone just had a pizza place to go to. And this is a sign of progress in America. That pizzas are, when we were younger, we'd go out with my dad's family in Ludington, Michigan. Where would we go? Pizza Hut. That was our place to go out for dinner with family. Ants, uncles, cousins, everyone to get together.

Hey, let's go to Pizza Hut. The Red Cups. The lunch buffet. You know, I mentioned earlier one of my bad qualities. You know, one of my good qualities. I love cities. I love everywhere I go. I'm not one of these people's like, oh, yeah, shithole.

I think that too. Every city I got to, I'm like, I like it here. People who argue about my cities better than yours, like, there's so many different places I feel like I could live if I had to. Like, we were in Arizona. I'm like, I could live here. You and I went to like Arkansas. We went to Oklahoma.

Like, I could live there. Like all these places, everywhere has nice stores and restaurants now. People have these places have all figured it out. Yeah. Let's do some recommendations. Nice little country we got. All right. So I mentioned Begoni last week, but I didn't, I think I glossed over as I was giving

12 recommendations or 12 reviews. Jesse Plymonds, my God. Now, Emma Stone was good, but he is, first of all, Ozempic, I'm guessing. He, he gained a bunch of weight for a role. Maybe he used it to lose it, but it's hard for me to believe you. I don't think ever watched Fred and it Lights, which is in the top five of my best favorite shows of all time. Was it a good movie, too?

I like the show better than the movie. The movie was good. But you would never watch the show and say, this guy is going to be the star that's going to come out of the show. He was pretty good, but there was so many people who were such better actors

and characters in this show. You would never said, this guy's going to have a great movie career. Never. It's really hard to believe. When Rob and I walked out of the theater after a housemate, I said to her,

first thing I said, I was, I was dumber than begonia. All right, another thing that we glossed over. So, like, the Cameron Crow book, what was it called? The uncool.

That's the best audiobook I've ever listened to. It was so, so good. So the story of how he did what he did still doesn't really make sense. Like, it can never happen today about being, like, a kid writer for rock and roll. So, like, one of the stories that he told was, like, when Leonard Skinner opened for the Who?

Like, could you imagine being at that concert? I mean, him interviewing the Almond brothers. So if you're a fan of Almost Famous, you have to listen to this because it's like an extended version of Almost Famous. the book is better than the movie. I love that movie. It's one of my favorite movies this century. The book is, it like adds an element of mystique. And you're right, the stories he has about interviewing Chris Christopherson and the Allman Brothers and David Bowie. And Zeppelin. He became

friends with all these people at a time when, you know, the internet and social media didn't exist. And these were like the cool, these were like the coolest people alive back then. And oh man, it's so good. And so then also after that, after he was done with that, he wrote Fast Times at Richmond High, Sean Penn's first role. And Sean Penn happened to be wearing vans, and that put vans on the map. Right. And then also, basically, that was that he invented the teenage movie. Yes.

He went undercover in a high school to write Fast Times at Ridgemont High. It was actually based on a real high school. And then he did Jerry McGuire. That's the best audiobook I've ever heard. And him telling the stories himself in like using inflections and accents for voices. And it's so, so good. All right. The other book,

did I just finish. And this was a, this was a thick book. Can I say this was a thick listen? How about you can say it was a long book? Long listen. So James Andrew Miller, he wrote the book about ESPN.

These guys have all the fun. I didn't read that book, but I asked you, I love that book. Is this book in the same format? So I just thought that this was, you know, a book.

And it was technically a book, but it was all interviews. I like books in that format. The entire book was interviews. And the book, what is it even called? Hold on. CIA James Andrew Miller. So the book was called Powerhouse, the untold story of Hollywood's creative artist agency.

So it was a story of Mike Ovitz and his partners who created CIA. He was the most powerful man in Hollywood. And what a personality. What an unbelievable, what an unbelievable personality. I don't want us to say. But this was like the book, this was the story of Hollywood through interviews. And it was, dude, it was everybody from Barbara Streisand to Magic Johnson, all of the partners and everybody involved. Sarah Jessica Parker, Matthew Broderick, like Stallone, De Niro, Scorsese.

Everybody was interviewed for this story. And it was unbelievable. Like, cannot record. I love Hollywood stories. I mean, cannot, cannot possibly recommend this highly enough. The personalities, the business, I mean, just unbelievable. So two what-ifs from that book that came out. Stallone got the script for Beverly Hillscop and he hated it.

And he wanted to make changes to it. He wanted to rewrite it. And they're like, all right, dude, this is not for you. That's a way worse movie with Sly Stallone. Of course. But what a crazy what if? Can you imagine Sly Sleone in that Detroit Lions jacket like Murphy? No, just it's not, it's not, it doesn't work.

Here's another one that totally, totally doesn't work. This just sounds so weird. Lovitz, John Lovitz, his name's John, right? John Lovitz? John Lovitz and Dana Carvey, they wrote bad boys for them. That's kind of funny. What? Yeah, that's a different movie.

That's a very forgettable. I mentioned this to you, like the story about, about Farley in his last days and just unbelievable. This is a lesson. I'm going to say if you ever wanted to listen to a book and just see what it was about, you're not reading this book. It's absurd.

I don't know how many pages it was, but it took, it's a 15-hour book. This audible section is just you and I giving each other recommendations now. Pretty much. Nobody else is listening. All right.

Last thing. Oh, industry is back. I freaking love that show. You watch industry? Did you fall off? I fell off. It just got too much. It was too over the top for me.

Okay. It is highly, highly over the top. I like it. The over-the-top stuff, I feel like just, if they just calmed down a little bit, I can't handle it too much. Okay. The over-the-top stuff is gratuitous, but hey, I'm a sick puppy. I like it. Is Landman the best, worst show on TV? Okay, I had a landman. I talked about it. If it didn't have Billy Bob Thornton in it, it would be unwatchable. Because it feels like everyone is in their own TV show. The mom and the daughter are in a different TV show. Like, they're in a sitcom. The son and his girlfriend, who had the guy die and they got a bait. Like, that's a totally different show. if it didn't have Billy Bob as the glue holding all together, he's so good. Because this season sucks. I mean, I'm not enjoying it any less, but objectively, nothing is happening.

It should be boring. And yet, and yet, Ben, every time the credits come up, I'm like, shit, that was 50 minutes. Yeah, it's just Billy and Sam Elliott too, but the Demi Moore plastic surgery totally takes me out of every scene. It's, it's hard. Anyway, my sister sent me this thing, Billy Bob, lost his brother at an early age. And he talked about grief and how he channels it in his acting. And he said, if I ever seem like sad or melancholy, it's because I am.

He's like, and I, but he's like, I use that to like, like, remember my brother, but I also use it in my acting. He's like a very thoughtful guy. I really like him. Okay. I have my, I have my best picture of the year nomination. This is Ben Carlson only. For 2025? For 2025.

Sentimental value. Train dreams. No. Train dreams was. It got displaced. That's number two. Okay. Okay. As we know, the Leo movie, bottom of the list. Sentimental value. So this is the same people who made the worst person in the world.

This is a Norwegian filmmaker. Okay. They made this movie and it's the same writers, same directors. They use the same star this person. You like the worst person in the world? I really like that movie. That's kind of, it's stuck with me. I really liked it. Oh, I feel like that's not a you movie. Okay. So you watch that one. So this is the same, the same girl actress as a lead. Stellen Scarsguard, who you've seen in a million things, is in it, and then L. Fanning is also in it.

Is this nominated, or this is a personal Ben Carlson nomination? It should be. I would imagine it's nominated. I can't believe it wouldn't. I don't get really good critic reviews, but it's very good, and here's the thing. So half of it's in English, half of it is in Norwegian, or I don't know what, and so most

of it's subtitles. And I used to hate subtitles, but now it makes you lock into the movie. I can't be on my phone. It makes you watch it, and it's just a very it's a story about a daughter and a dad. And the dad kind of, he divorced the mom and kind of wasn't in the girl's lives. And it's them working through the relationship. And it just feels real.

The whole, it's really well done. And the funny thing is, even with a different language most of the time, I can still tell that this actress is so good at what she does, even though I can't, you know, understand everything she does except for subtitles. It's very good. That's the Ben Carlson film of the year. Best picture. Wow.

Okay. This is a dumb question. I assume that should I watch it? You all like it. You won't like it. So, like, I won't like it. I shouldn't watch it. Did you like worst person in the world?

If I'm thinking of the movie, yeah, I like that movie. I mean, it didn't love it. Okay, if you liked that movie, give this a try. I think this is better than that. I like this more. Wait a minute. What is called sentimental value. I did not see this movie.

Nope. Okay. was. And yet, the market seems to, uh, seemed to shrug enough yesterday. Uh, the stock market is

invincible. Oh, boy. Sure seems like it. Yeah. And then we're going to get a fair market here anyway. Stock market will never go down. Ever. All right. How about this? The stock market will go down. It will always come back.

Heard here first, folks. Guaranteed. Animal spirits at the compound news. Check out Talking Wealth. Or other people say, hey, you guys don't plug it enough. Talking Wealth. Subscribe to the newsletter if you're an advisor. Watch the shows.

It's good stuff. See you next week.