Animal Spirits Podcast - Peak Inflation (EP.287)

Episode Date: December 14, 2022

On today's show we discuss inflation rolling over, the possibility of a soft landing, Santa Claus rallies, SPF getting arrested, what a housing market comeback would look like, picking stocks vs. picking stock-pickers, The White Lotus season 2 and much more.   Find complete shownotes on our blogs...  Ben Carlson’s A Wealth of Common Sense  Michael Batnick’s The Irrelevant Investor  Like us on Facebook  And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.      (Wealthcast Media, an affiliate of Ritholtz Wealth Management, received compensation from the sponsor of this advertisement. 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. 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.)  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Crane Shares. To learn more about the risks invested in Crane Shares products, visit CraneShares.com. Ben, I want to talk to you about K-Web, which is the China Internet ETF. Guess what is down here today? A lot. A little. Give me a number. For God's sakesh, give me the damn number.

I cheated. I had to pull up. I was looking. All right. Well, spoiler, revealed. It's down 15% year-to-date. Through the end of October, or at the lows in October, it's down 50% year-to-date. Huge balance, right?

Huge. Guess you caught a little bit of it. Not to brag. Not to brag, but I bought 10-cent. Why? Because I'm, of course, an expert on Chinese internet company. No, listen, it was the best-looking chart of the bunch. But if you don't feel like picking Chinese stocks, well, you don't have to do anything,

but if you want to own some of these names and you want to get broad, diversified exposure, there's an ETF for that. This is also a good reminder that predicting the future is hard. Not if you're right. Well, the news out of China has not been great, and these stocks are ripping. That is very true. It's interesting. That's all I'm saying.

All right. If you want to check out crane shares, visit crane shares with a k.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holtz Wealth's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritthold's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Clients of Rithold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, it's a Christmas miracle. Christmas came early. SBF got arrested yesterday. I'm all for it. Throw the book at him. Inflation coming down.

Too early to completely call victory on inflation, but we're finally trending in the right direction. And you missed one. What's that? A phenomenal finale of the White Lotus. Oh, man. Best 72 hours of 2022? Geez, it has to be close with as bad as things have been. Do your timestamp here so everyone knows what time it is.

Tuesday, December 13th, 9.18 a.m. Eastern standard time. Because the futures are flying right now. Don't throw this on our face if the market crashes by the end of the day for some reason. there. So inflation came in under expectations. I think if you annualized the last three months of inflation, it would be 3.7%. I'm taking some liberties there, but that's not bad. 7.1 year-over-year versus 7.3 expected, 0.1% month over month. And the 7.1 is, it's hard because a lot of that is the backfilled higher inflation. It's going to remain high for a while because the starting months were a little higher. But Heather Long has some of the breakdown. Gas was down 2%. Utilities down over 1%.

Use cars are down 3%, airfare down 3%. Food was up 0.5% slowest in months. Service is inflation without shelter was flat. The shelter thing we know is going to come down. That's the thing that I think is probably the most positive. Well, we've got this pretty little pie chart here. That's 43% almost as housing. The shelter is still high because it's a smoothing effect and takes time.

We've mentioned this before. And we know that in the future that's going to fall. So that's going to be even a bigger tailwind in the future. Okay, so look at the rolling, trailing, 12-month inflation rate. Give me some technical analysis on this. Do I see two shoulders there, neckline? Like, reading that correctly? Airfare inflation is still super high.

I was talking to a couple yesterday about potential spring break trips in April, and airfare is just outrageous. I might take a driving trip. How long would it take you to drive to Florida? Are you going to drive somewhere else? That I'm not doing. We threw out the idea of going back to the Outer Banks, which is like an eight to nine hour drive. We're going to Florida for Spring Break, and yeah, it was upwards of like $1,000 a ticket.

We have a family of five, and so we're driving to Detroit to save money on airfare. This is how I'm hedging inflation. I have a question about Spring Break. How come there's not a national calendar for these sort of things? That's a good question. Wait, is Spring Break President's Week or is that February? I think that's February. The reason is because if literally everyone had the same spring break, it would be insane.

Nothing would get done. So you think that our forefathers, they foresaw that? We have to break it up. There is probably an interesting history on spring break. When did that become a thing? In the 1980s in Daytona, Florida. I don't know. Okay.

What's this Kelly Cox one here? So Cali Cox threw a chart up there. Goods inflation is slowing. Services inflation is not. Good news is that the Fed has more control over services inflation. What was that really interesting stat that we spoke about our analyst? Spirits, and Josh and I did on what are your thoughts? I think Sam pulled this from one of the banks that Services is two-thirds of the economy, but only one-third of the stock market? Is that about right?

Or do I have it backwards? No, you're right. Services is a huge part of the economy. It's way to really to spike the football on this. But if we got another one, that would be, what, three really good prints in a row, don't you think if the next one, the next release in January came out higher than expected. Markets would just tank again? Or do you think we're past that point? Oh, my God. Past that point. Oh, no. Okay. If we had a surprise inflation reading in January, February, March, that would not be good. Can we just talk about some early surprises from this? Again, there's no conclusion yet. Well, does this mean Santa's coming? Which, by the way, sidebar, that's one of the best parts about White Lotus, is you know that there's a beginning and then there's

going to be a conclusion at the end. That's, I think, what I like, it's not open-ended. You don't have to, like, assume it's going to be five more seasons until you get a conclusion. You know you're getting it in one year. So we don't have that in the economy. Can I just say one thing about the Santa Claus rally? Sure. I gave these stats to CNBC, so let me just pull them up. I was shocked by this.

Wasn't Santa Claus created by like a department store back in the day? Wasn't it like Woolworths or something created him in the early 1900s? No, it's from the Bible. I don't know the history of Santa. So who created the Santa Claus rally then? Us, we did. Capitalism. This is the date.

I went back to 1950. The S&P 500 was up an average. of 1.3% over a seven-day period. I think it's the last five days of the year and the first two days of the new year. 1.3% is the average return, and it was positive 79% of the time. Wait.

What period are you talking about here? The Santa Claus rally is the last five days of the year and the two days of the new year. It's a seven-day period. How did you come up with this definition? I've never heard this before. That's not made. That's just what it is.

That's what it's been agreed upon. Okay. So again, 1.3% over seven days. 79% positive. All other seven-day periods, the average return is 0.24% and it was positive just 58% of the time. It's a massive spread. 1.3 versus 0.24%, 78% positive versus 58% positive. Those are meaningful differences. Is there a seasonality component to this where like no one's working on Wall Street that last week? Well, what does that matter? I don't know. No one's working so stocks go up? No one's working and everyone's in a good mood and people are drunk for that whole week.

I don't know. I must say, you should take the L right now on granular being an SAT word. I think what happens is you had that guy in your life that used it and he threw off your understanding of granular. Come on, I'm not a word guy. Have you been thinking about this for the last week? It's okay. Everyone has their words that they use.

Granular is yours. No, it's not. It's the first time I've used it on the show because he called me out. Dario Perkins showed a chart of inflation. There's like been very few periods of inflation. That's the thing. That's why everyone points to the 70s because it's the only one we can think of that is. It really is. So we're looking at months from peak, 1973 to 1976, 1978 to 1982. And once it peaked, it pretty much went straight down. And there was maybe a bit of a pickup again

a couple months after the peak, but not really. But inflation was high in the 80s, but it was falling. That's the thing. People hate rising inflation. Think about it. We're celebrating. That's exactly right. You had 7.1% inflation in November of last year, December, I can't remember one. And the market absolutely shit the bed. Yeah, we're celebrating it. Now, on 7.1% on the way up is awful. 7.1 on the way down is reason to celebrate it. In our research, I think you and I've both done this. If you look at the stock market periods of rising inflation versus falling inflation, the annual returns are like 10% difference. It's a huge difference. There was a tweet earlier in the week from Nick Timoreau

showing the Atlanta Fed wage growth tracker. This is not what you want to say. So this is the sticky part. Wages continue to rise. And this hit the stock market, not terribly, but But when this tweet dropped, the market reacted. Here's the thing, though. If inflation continues to fall, wages will fall to. It's not like wages are going to stay strong if inflation is falling. Wages are going to come in with inflation. Is it too early?

Again, there's nobody spiking the football here. But this is what a soft landing looks like, no? Inflation is coming down. Unemployment is still, though. What if they do? Will Powell's legacy actually end up looking good? We've looked at every period historically. High inflation has never been brought down without a rate.

session. You can't bring inflation down without the unemployment rate rising. And so far, so good, it hasn't happened yet. If you asked Wall Street professionals six months ago with the odds of a soft landing, 15%. Probably. Here's the other thing, though, you're never going to be able to know because there are no counterfactuals. Would inflation have fallen anyway without the Fed? If the Fed didn't raise rates so aggressively, or if they would have just raised them a little bit to like 3%. Would have inflation still fallen? We honestly will never know, but it's possible that a lot of this stuff really was pandemic related. Duncan said, please don't ruin Santa for anyone with kids watching Hellfire will ring down on us. My daughter is eight. I think she kind of knows. I kind of just

want to tell her. I know in the back of red, she knows. Not to pick too many nits in a great Christmas movie. Home alone, too. We just watched it too. We watched both of them last weekend. There's a few scenes that don't really pass muster. I have no idea what that phrase means. but one, when Kevin McAllister follows the wrong dad and just gets on the plane. But that was the 90s, though. You could have done that probably. I suppose. Two, there is no New York airport.

You can see the city. On the East River where you're just looking at the city. Three, he just gets into a taxi. Yeah, sure. Four, he's on top of the Twin Towers by himself, literally by himself. That was pretty bonkers. Nevertheless, great movie. My kids love the first.

The second one, the most boomer thing of all time is the parents sitting in first class and a kid sitting in coach. But here's the other problem. They left him a year before, and the mom doesn't sit by him on the plane to make sure he's on it. The second time around, it's the movie. But wages will fall if inflation falls.

But again, do you think that it's possible the Fed didn't have as much of an impact as we thought? Can you give them credit for like the whole oil falling and gas falling because people are worried about a recession because of the Fed? No, I thought we just thought the White House did that. Okay. I'm just saying, I think if I'm putting numbers on it,

I'm putting like 60% of this stuff would have fallen anyway. Maybe 40% is the Fed raising rates aggressively. Them raising rates completely wiped out asset prices, which are a huge part of this. Yes, but here's the thing. Did a fair market in the stock market stop people from spending money? No. Was anyone on an airplane going, oh, shoot, my stocks are down 30% this year.

I better not go on this trip. No. That didn't happen. I don't know what that really did besides still the housing market. I continue to be in the camp that there's no analog for this period of time. It's just too weird. I agree. Some other charge car continue.

Deflation and Used Cars, the Mannheim Index, I think, called this, and it's down 3%. I was a $370 stock. Now it's at $4.80 as of yesterday. I don't know if it's ripping today at all. It's down 98.7% from the highs. There was an analyst who said that they think they could run out of money if they don't get more funding. What are they going to do with those car vending machines? Do we turn it into a we work? We were in Houston last week. I saw one of those inside of the matchbox things. The other crazy ones, we've talked about this, the container freight shipping stuff. By the way, the market is open. What, NASDAQ up 3%.

Listen, these are higher lows. Looking at higher lows. For the first time all year, I'm just quickly eyeballing this. This is a high or high. You son of a gun. It's a high or high. The Fed comes out tomorrow and says, all right, inflation is going in the right direction. We're going to raise rates 25 basis points instead of 50.

That's not happening. I'm saying that did happen. Markets would rip 5%. Probably? Yeah, not happening. This is going to go 50. So, yeah, S&P 500 is down 12. 7% year to date. We're making a lot of assumptions, but let's assume that the market closes

okay. Let's assume that this is the green light for a year-end rally because people are still underinvested and maybe we're on the other side of this. What if the S&P 500 ends of the year down like 7%. So Ed Yardinney said, if it ended on October 12th, that was the bottom, the S&P 500 was in bare market territory, meaning down 20% for only 45 days. And I'm thinking this. So let's say we're down 10% of the end of the year. Okay. But let's say, I think the hard part is what comes next because I think getting rid of that big chunk of inflation was easy because that was the COVID stuff, I think, in a lot of ways. I'll plant my flag and say stocks are going to fall 10% next year.

Let's say stocks are down 10% this year and down 10% next year. Would that be worse than being just down 25% this year? Would that be worse? Well, okay, there's a distinction here. Wait, what's the question? Let's just say down 20. Would down 20 be worse than down 10, down 10? Yes.

I think down 10, down 10 would be worse. Well, hold on. Would down 20 than flat be worse than down 10 down 10? Yes. Good question. I'm not sure. I got to update the stats, but... I think down 15, down 15 would be worse than down 30.

The 2000 to 2002 bear market was down three years in a row, but it was like 22, 11, and 9. That, to me, is just brutal. The longer it goes, the worse it hurts. I think investors can more stomach a quick decline that stops going down versus just multiple years of leakage. I think that hurts worse. I got one more inflation thing before we get to the markets. What do you think? I think the prolonged thing is worse.

I think the longer it goes, the harder it is. Bill McBride did a lumber chart, which is basically round-tripped and back to where it was before. I listened to the Tollbrilers. Oh, I've got an update in my mudroom. Okay. The second quote that I got is like 60% of the first quote that I got. Well, you should show them a chart of lumber prices. Well, you know what I should do?

I should say, that's great. Get me a third quote. Yeah, that's true. The Toll brother CEO said they're saving $12,000 per house on lumber alone from where it was at the peak. They're passing along to consumers. It's great. Yeah, I'm sure. Yeah, but that's the thing.

I think their margins remain at peak levels. Home builders are 5% today. I think you could say if that was the worst of it, and even if markets just a range bound from here for what, if that was the worst of it, I still think 2022 could have been worse considering everything that happened. Well, of course. We didn't even get an average bare market. The average bear market down 20% or worse is down 32 or 33%.

If that was it, we didn't even get an average bear market, which to me, if you add all up what we went through, it's kind of. of shocking. To take out the lows that we saw in, was it October, I think it was October, to take out those lows, the S&P will need to fall around 13% from here. We're all speculating. We don't know what's priced in if that was the worst of it. If in 20, 23, earnings soften, and then we roll over. If we get a recession, we could retest those for sure. Who knows? It's definitely way too early to be like, all right, that's it. We're in the clear. But this is the fun part about the markets is, we're never in the clear.

Pretending like stuff is over. It's never over. I mean, the market opens tomorrow and the next day in the next day. I want to get your reaction to this meme. There's an asteroid heading towards Earth, and a Tyrannosaurus Rex says, that looks really bad. And a Triceratops says, relax, it's already priced in. That looks like a perma bear meme to me. It's a permabere meme. I guess the idea that we know that the economy is softening, whether or not we go into a technical recession is sort of besides a point. But I think here's the thing. Here's where the pushback, and it's a cute meme. I laughed. We don't see an asteroid. True. It's obviously. not that clear. It's not a don't look up situation. It's not. Is it fairly obvious that the

economy will most likely soften in 2023? Yeah, but is that an asteroid? And I think people forget, we see GDP numbers with inflation. So if you looked at nominal GDP, it's been like 8 to 10 percent. So there's no way that can continue, but it really depends on what the inflation is, I guess. I said to you, I can't... The new Bimo, V.I. Porter MasterCard is your ticket to more. More perks, more points, more flights, more of all the things you want in a travel rewards card, and then some. Get your ticket to more with the new BMO ViPorter MasterCard and get up to $2,400 in value in your first 13 months. Terms and conditions apply.

Visit bemo.com slash ViPorter to learn more. It was on Friday. I said to you and Josh that this was the second week in a row. got data that should have killed stocks. Last week, meaning I think two weeks ago, was strong unemployment. Market did not go down on that. And this week was high wages and hot PPI. And the market did not really move lower on that either. I don't know if the market was collectively looking forward towards the CPI print. My whole contention is the market can only care about one thing at a time. Really? I think the market really only cares about. And for the

last six months, that's been inflation. Oh. Inflation has been the only thing. thing that matters. Inflation is trending in the right direction. The market is willing to let the other stuff go. Inflation is trending in the wrong direction. This other stuff is bad and it makes it even worse. I think that's what happened. But making this year just so much weirders, we kept talking about how many things there were to juggle in the economy and all these mixed messages. But again, you're right. All that the market cared about was inflation. To your point, when does it move on from inflation to start worrying about the economy potentially slowing? If we get another month or two of lower CPI, we'll say,

Boom, mission accomplished. Then likely, and all likely, people will transition to. All right, now let's see what earnings growth or lack thereof is. Nothing being over yet. This was a headline in the Bloomberg, and a lot of people were saying, this is going to get dunked on later, but it says the Federal Reserve is deflating financial bubbles without a crash. I have to say the speed at which they raised rates, and if you would have told me at the beginning of the year, mortgage rates are going from three to seven, I would have said that's never

happening in a million years. No one was predicting that. I don't think anyone was predicting 5% mortgage rates. So the fact that that happened in stuff didn't really break yet, it might be too early to tell, is surprising to me. I'm just thinking out loud, why would the Fed get credit for a soft landing? I know it's a dumb question saying it out loud, but if you're saying that these inflationary pressures would have eased regardless, there's an alternate universe where the Fed does crash the market. And it still might happen. Yes.

But I think the fact that crypto has just completely fallen out of bed and there's been no spillover into anything else. I'm not surprised about that. These tech stocks that have fallen 70 or 80 percent, the bubble stuff did deflate. Tech, meme stocks, housing, crypto. But there is a depression in tech land. If you're an employee in a technology company, this is a full-blown recession. True. The labor market is strong besides the technology sector.

To them, it does feel like we've been in a recession for six months already. Dollars going way lower. The 10-year was much lower this morning. Where is it now? 3-4-5, down from a high of almost 4. I think 4.2 or 4.3 was the high for the 10-year? Can we take back our take that interest interest interest is never going higher in the future? Because if 4.2% was the highest for this cycle, it's possible maybe rates just aren't ever going

to go back to 5 or 6%. I think I'm not ready to say that even though I was clearly wrong. I never thought that interest would grow up about 3%. I was dead wrong. Let me go from one one prediction to it doubling down. I don't see like 7 or 8%. How would that happen? That would have to be just inflation continuing higher.

My whole contention is just that we literally can't afford because of all the debt we have. So what? There's no rules. Doesn't mean we can't have something we can't afford? The country would revolt if 7% interest rates and the amount of money that was going to pay our debt back. We'd have to cancel debt to China or something. There's no way that the country could continue to function if 50% of the budget went to interest payments. That sounds like CZ saying to the authorities that don't indict finance because it would be bad for the crypto economy. Did it really say that? Something like that. Honestly, if I was in that space, I would say put them all in jail now and start from scratch.

Get rid of all of them. You mean, put them all in jail. All the crypto frauds. Just throw them all in jail. Oh, well, the frauds, sure. Tom Dunleavy has an interesting table from Bank of America looking at the average returns after the last rate hike in inflationary and disinflationary periods. The Fed's done hiking, and then what happens after that?

The top one is showing inflation continues to advance, in which case, bonds did well. Well, that's interesting, actually. I wouldn't expect that. Well, actually, maybe if the Fed's done hiking. That's because rates were so high back then. But let's look at the disinflationary period. So once the Fed was done hiking and CPI continued to roll, returns are 13% higher, six months out. Dollar lower, or dollar is, it's pretty good.

The point is if once the Fed is done hiking, returns look better six months out. So Vanguard had their forecast for 2023 and beyond. What are they saying, negative 2.4% real returns for large cap stocks? The funny thing is, I trust Vanguard's outlook more than anyone else. They're the most sober-minded people I think that there are. Is that fair to say? Well, you would say that. I don't know what the word means, but I wouldn't expect Vanguard to gaslight us.

Did I use that correctly? All right, so what are they saying? They're looking at inflation and growth, and they're looking at GDP growth for 2023 at like 25 basis points. Consensus is like 0.9%. So it's not very strong growth. But they're looking at Vanguard says headline inflation is going to be 3%. Surprisingly, it's still most people think it's going to be 6% above in the UK and Europe, which is pretty high. Then they also looked at 10-year return expectation. They'd break down

in percentiles, but the 50 percentile is just what the average would be. They're looking at U.S. stocks of, call it 6 percent a year, global XUS 8.4 percent, not end of the world. In dollars or local? So I guess that would be probably local in dollars. Local in dollars. But which is it? No, in dollars. Local to a U.S. investor. Got it. So it's not like end of the world like some people are predicting, but not like amazing, which after what we just went through, 6% a year, I think most people would say sign me up for that. If you get 6% of your stocks in starting rates of 4% in bonds, 5% call it 6040, sign me up. Take it. I would take it. But what happens if you pick the best stocks. So to that point, what a transition that was,

not to break. Jeffrey Patak tweeted, among U.S. stock funds, there have been 11,517 funds that have had at least one five-year return since 1997. Those funds had 132,000 five-year measurements versus their style-specific indexes over that span. They beat the index in 50,000 of those instances lagged in the other 81,000. So I've got two thoughts here. So those like rolling five-year returns then? Yeah. My first thought is that's not so bad.

50 beat, 81 lost. I mean, it's not great, obviously, but we know that. It's not terrible. And the other thing that I would say is... So 40% of the time they outperformed, is? Yeah. The other thing that I would say is... And we do this sort of thing with stocks, too, where it's like, oh, my God, Amazon is back to

where it was in July 2020. But that, of course, makes the assumption that people buy and hold these things forever. Now, I'm not saying that you're going to have a better experience if you tie mutual fund managers, but people don't buy and hold. So then you can make the case, well, if you're saying that, then the average return is going to be even worse. Could people buy and sell the wrong time?

Which, granted, probably true. So you think most people with even active mutual funds, most people are just buying and holding and buying and holding because it's in 401Ks? I don't know. I mean, certainly now. Here's a question for Morningstar. What's like the average turnover for an actively managed mutual fund?

Well, they know that. In terms of the investors. Here's another example of exactly what I'm talking about. So, Netflix is down 46% over the last year. Guess what? I'm up about 40% of my Netflix trade. You've been sliding in Netflix to every conversation just to tell people that you bought it before it took off. Well, listen, I am so forthright with all of my losses of which there are gazillions.

It is pretty funny, though, that you miss Netflix after it had a huge pop, but then it came back in and you bought it. Well, that is credit to me, because I've seen gaps get filled. I saw the gap get filled. I wanted to invest in Netflix, not trade, I want to invest. The gap got failed and boom. But one other point that Jeffrey made in this thread was the persistency returns does not exist, meaning the best managers don't win year after year after year. That would probably be a giant red flag if they did.

Even if you could pick the best long-term managers, they're not going to outperform every three-year period or whatever. Returns are lumpy. But that makes it even harder. That makes it even harder because I saw a step from Vanguard years ago, and it's directionally right even if the numbers aren't accurate. But over a 20-year period, 14% of all large blend managers beat their benchmark, only 14%. Of that 14% subset, 72% of them underperform for three years in a row.

And that's the problem. And when I say the problem, I just mean behaviorally, invest really. Sticking with the underperformance is very difficult. In my institutional days, we did a lot of manager of manager. That was the approach. We picked a lot of other managers and talked to a lot of them. My experience was, I think picking people who pick stocks is even harder than picking stocks. What do you think? Which one do you think is harder?

I'd say they're both equally as difficult. They're both pretty hard. But I think, to your point, trying to figure out if you're being disciplined by sticking with an actively managed fund that is down or you're being naive, I think that's one of the hardest things to figure out. Yeah, hardest thing. And not just with active, just with any strategy. Am I being disciplined or am I being stubborn?

Exactly. Daniel Sotom had a really interesting tweet. He said, Daniel's another guy from Morning Star. Rare combination of profitability and low multiples in XLE at the end of November. It was the third most profitable lurking at return on equity, and simultaneously, the fourth cheapest. So does energy have legs going into 2023? I mean, that's what this would suggest, no. And it's got momentum on it. It's got the tailwind of rising prices on its side. Last week, I asked if energy could be that long-term hedge like a commodities plane. A lot of people said that this is kind of a one-off thing. A huge divergence in energy coming from such a low base and being so cheap, that's probably not going to happen again.

I buy that. John Arnold tweeted, this is a fair tweet. People never seem to commend oil companies when gas prices decline. That's fair. You blame them when gas prices are high. By the way, speaking of energy. Clever tweet. We had a conversation coming out next Monday with, I'm drawing a blank at his name. I know we just spoke to him.

Mark Newman. Yeah. Who runs the opposite of an ESG strategy? It was a good conversation, a bit. It might ruffle some feathers. But ruffle some feathers. Well, it made my head hurt a little bit. He made some good points about ESG, some hypocrisy, some, I don't have double standards

is the right word, but some interesting points. made me think about some things. Interesting conversation. All right, a bunch of people sent us this. This was from Quarter. It was the, what's RH again? Restoration Hardware. Restoration Hardware, which have you been in one of those before?

Ridiculously expensive, from my experience. But he said, the housing industry isn't a free fall. This is the CEO. I think the National Association Realtors just reported that housing demand was down 37% in October. We've never, at least in my lifetime, I've never seen interest rates rise so quickly. I don't think anybody on the phones has either

in the impact of the housing market, especially when you look at it versus the housing market that was overinflated in a run-up, you're going to have some wild swings here. He's basically saying we're screwed. No one's buying anything from us. The consumer is dead, all these things. Contrast that with Lulu Lemon's CEO on CNBC. We haven't seen any weakness in our consumer. Oh, yeah, look at the stock. Like Lulu Lemon getting killed. Here's the thing, though, I don't think you can ever use CEOs as a macro indicator. Macro? No, micro. Yes, but at a macro indicator, when CEOs talk about the macro, they're taking what they see with their consumers and their little niche, and they're trying to throw

that I don't think that that's useful for a macro indicator, a CEO. Think about how many times Jamie Diamond has been wrong over the last 10 years. Well, that's true. But somebody that's in a niche market like restoration hardware, you don't think that he has insights into the housing market? Yes, but into his one little ultra expensive, high-end, whatever. And maybe people just bought everything they wanted to buy and they pulled forward demand. And now that's slowing.

I'm just saying you can't use CEOs as a macro indicator. Have you ever bought Lou Lemon Pants? by the way? No, put a pin in that, because we have Lulu for a great quarter guys. All right, let's talk about crypto. I guess I'll start with the block. To me, this was just awful shiars. Will you have anything to say about him getting arrested? Of course, we'll get to that. I just want to start with the block. So there was news that the CEO, I believe his name is Mike McCaffrey, took a loan. I don't know if it was business or personal. I think there might have been both from SBF to the tune of, what was it, 17 million for the first one, 15 for the first one, 15 for

second, something like that. This guy had his tentacles and everything. Honestly, it's no wonder he had such a sterling reputation because he bought everyone. Yeah, he was a gangster. He really was. I don't mean any good way, obviously. So the block, I don't know if it was the most trusted name in crypto, but I'm a huge fan of Fin Tank Frank and Larry.

I forget how you pronounce his last name. I think those are reputable guys with integrity and just watching some of the venom being thrown at them, which obviously, listen, that's Twitter. it's not a surprise at all. It just sucks. I can't imagine those guys and everyone in the company is just feeling so blindsided by this fucking asshole. And the thing is maybe it was in their best interest to look the other way, but after it all came out about him, why wouldn't they report about it? They had been. Frank, we spoke about this last week. He did an amazing conversation about the fact that he had funded their company. I think a lot of people were insinuating that

they knew that this was happening. I think they were just blindsided. No, I say no way. By the way, no one didn't age well when Ackman said, I believe. I believe him. Call me crazy. So there was an article in Semaphore about, man, we don't need to get in this. We'll link to it if you want to look at just all the losses, just lost, loss, loss, loss. Loss is all over the place. Here's a spreadsheet. What year was this? Remember, everyone thought that, like, this guy was at Jane Street, and that's, like, the ultimate trading firm.

Does that place his reputation take a hit here? Since this guy was obviously an idiot, he was a horrible trader. I don't think that's fair, but... I know, I'm kidding. Well, I'm sure they feel guilty by association, but that's not fair. So there's a spreadsheet showing months, profit per day, profit per day percentage, and the accuracy. So here we go.

November, profit per day. 16,600. December, 133,300. January, 500. February, negative, 500. March, 100. Whatever, you get the point. But when you look at the accuracy,

guess, guess, estimate, estimate, estimate. Oh. They were just making it up. They were just making it up. The FT reported they found Alameda's Venture Fund. There's 500 holdings, marked at $5.4 billion, LOL. They invested, I think, $100 million into two of Sequoia's funds. This bankruptcy is going to take years.

Well, that's the, we've had a bunch of listeners reach out and say, hey, I had money at this place. How long is it going to take me to get? How many cents on the dollar ring to get? And I think it's going to take a long, long time to sort it all out. It sounds like this. How did the illiquid stuff get unwound? I literally have no idea how that works.

I don't know if it gets sold on a secondary market at a discount. You're right. But yeah, it's ownership. And those things are, I mean, who knows. about the marks, but it's going to take a while. This is from the SEC report of his arrest, I guess. From the inception of FTX, Bankman-Free diverted F-TX customer funds to Alameda, and he continues to do so until FDX's collapse in November 2022.

Bankman-free diverted F-TX customer funds to Alameda in essentially two ways, by directing FTX customers to deposit fiat currency into bank accounts controlled by Alameda, and two, by enabling Alameda to draw down from a virtually limitless line of credit at FTX, which was funded by FTCS customer assets. It's just crazy that... Everything we thought he was doing and said he was doing, he was doing. Customer deposits were funding the hedge fund, which was blowing up. How many times did this hedge fund blow up?

Who knows? I hope this guy goes to prison for life, because think about all the lives he's ruined. I'm sure there probably haven't been stories yet, but I'm sure there's people who've killed themselves over this, who've lost their entire life savings. He ruined people's lives. Countless people. Oh, yes.

Steve Leasman tweeted, just 8% of Americans have a positive view of crypto currencies now. CNBC survey finds, oh, that's shocking. Oh, just 8%. That might be on the high side. Yeah, not surprising. I shudder to say that I'm still bullish on cryptocurrencies long term, but I don't have a positive view now, now? No.

Another funny part about crypto is Bitcoin is ripping this morning because inflation was down. That was like the one macro thing they trying to hang their head on is it's going to be an inflation hedge, and it's obviously completely opposite. It's a risk asset. I think that much is clear, at least as of now. All right, so people are getting upset, and I'm talking out of my bucks. I don't know anything about how this process works, about how long it took. Like, why is he still walking around giving interviews?

And it was... I was saying this. Yes, me too. I mean, it's maddening. Bill Wang was arrested 13 months after Arkego's collapsed. Now, I guess the counterpoint is Bill Wang was a family office and it was mostly his money. I think that the day we heard about Madoff is the day he got arrested, but I'm guessing that they were putting the case together.

Exactly. I think everyone was blindsided by FTX happening. Has it been a month and a little since this happened? I think it was early November. Guess what? they can't just go arrest a guy. They have to build a case. Is that fair to say?

I think the thing that irritated people is that he just kept talking and he's doing Twitter spaces and he's doing interviews and he's DMing people and he wouldn't shut up. Arrest this guy and get him out of my face. I think that's why everyone was mad. I'm not even sympathetic to that. That was the same tune that I was saying. I hope he was playing League of Legends as he got arrested. I really hope that happened.

Hang on, hang on. I got one more level here. Jerk. He's such a scumbag. Here's a take. I think two things. One, the housing market is arguably the most important part of the U.S. economy. Easily.

For middle class, consumers, yes. So if the housing market remains frozen, I don't see how that doesn't affect the economy in ways that I'm not really clear on. Consumer spending, sentiment, I don't know, but you would just think it has to. I also think that the housing market, if mortgage rates fall, will rip again because I think that there are people that got locked out. People are waiting. People are waiting.

And I don't know where the level is. I don't know if it's five and three-eighths or five and four-twelfths. I have no idea. But I think that the housing market can rip again very quickly. I think if we get 5% mortgage rates, demand is going to come rushing back in and people are waiting, yes. You could see a V-shaped rally in housing. Maybe not to new highs and prices, but in activity.

Yeah, I don't think it'll be prices coming back, but activity will come back because people will be anchoring now to 7.2% and going, man, it's could have a lot worse. So we get to five people are going to go. That sounds way more reasonable. And prices are coming down. But right now, make no mistake, the housing market is still frozen. Rick Palacio has tweeted, housing starts fell off a cliff in November. Many home builders in our monthly survey are hitting the pause button until cost drop. Bill McBride tweeted, in early December, 75% of nationally surveyed home builders confirmed they are buying down buyers mortgage rates to make payments more affordable. What does that mean? They're basically paying

points for them. Builders are paying money to lower mortgage rates for their buyers. They're saying you can get 6-5, we'll get it down to 6 for you to make it more affordable. Because we talked about last week how the builders want to get them off their books, they have to do this kind of stuff to incentivize people to buy. What's more likely? Of course, we're guessing, but XHB, the Home Builders, ETF. Up 20% next year or downtown? What was it down this year?

It got crushed this year, right? I'm going to guess it's down 30. Let's take a look. If it's down 30 next year, then up 20 would be my guess. Down 25%. At the worst, it was down 40. I could see a comeback in housing. We talked about this last week about how you could negotiate for new homes.

Got a DM from a listener who said, yesterday I signed a contract to build our new home. Builders asked for $8.50 for a five bedroom. I negotiated down to 7.15, 15% discount. This is in Jacksonville, Florida. Said the family's growing. They had to move. No choice.

But that's a pretty steep discount. Is it? I guess. 15, yeah. 8.50 to 715? That's a lot. If you lock in 6.5 right now and you can refinance at 4.5 or 5 in the coming 12 to 18 months, that's not nothing. That's pretty good.

Does they're going to be there for 20 years? Conner sent tweeted, year-over-year changes in homes for sale searches on Google trends. Damn it, I can't read. What does it say, Ben? How much is it down? Is that 20? That's small print. It's down 30%. Down 30%. Which makes sense. So Bill McBride had his whole thing about, you mentioned the importance of the housing market. He shows you on his thing. He's showing housing starts and new home sales and residential investment as a percent of GDP. And every time since the 70s, when these indicators roll over, that has led to a recession.

Again, far be it from me to fight with history, but I do think it's different this time. I'm sorry. I'm not saying that housing rolling over can lead to a recession. I just think there's so many things that are unique about this particular environment, this particular moment at the time. Maybe they have this already, but I would love to see the odds on this on Kalshi. Recession starts in 2023, 2024, 2025.

Highest probability of happening, because there is a scenario where we push this off for a ways and we don't have a downturn for a couple of years. That wouldn't be my baseline, but it is certainly possible. That would completely, to your point, throw out a lot of historical economic models that people are using because this period is so messed up. Here's a great survey from Noah Smith. American teenagers were happiest in the mid to late 2000s. Ben, when were you a teenager?

I was a teenager in the 90s. Yeah, that was me. Late 90s, I guess. I graduated high school in 2000. Okay. I graduated high school in 2003. Was that a great time? It was.

Again, no camera phones, no social media. We just were starting AOL Instant Messenger. I do remember severe boredom from time to time. Yeah. You would call your friends on the landline. He's not home. And just talk. Yeah.

I vividly remembered times where I would be on my couch, my living room, just looking out the window, which sounds really sad. It was a simpler time. I watched a lot of movies on USA and TBS. With commercials. With commercials, yes. What did we do during commercials? Get up and go get a glass of water? You just kind of sat there and took it.

Although there was AOL and some messenger. The internet was coming around. Advertising probably made a lot more sense back then because people actually had to watch. Let's talk about Lulu Lemon. Not to give them ideas, but I think John is going to put a picture of me looking lonely on a couch looking out the window. Oh, I thought you were going to say he's going to show you in a picture of Lulu Lemon

yoga pants. Okay, so here's the thing. So Lulu Lemon's numbers were good in a vacuum, at least some of the numbers. Net revenue was up 28% to $1.9 billion. Isn't that kind of crazy, Lulu Lemon's doing $2 billion a quarter in sales? Because they charged so much money for their stuff. Have you been into one of those stores? I don't think so.

It's too much for me. I'm not paying like $110 for a pair of pants. It's too much. Total comp sales are up 22%. Comp store sales on a constant dollar basis is up 14%. I mean, really good, of 14%. Why did you listen to this one?

Do you have Lulu Lemon stuff? I was just interested because... I cannot picture you wearing Lulu Lemon. Well, I got 10 a sec. So here was the thing that killed the stock. Stock was out like 10%. Or more, maybe. Inventories at the end of the third quarter

increased 85%. Look at this chart of their inventories. This is not pretty. So is Lulu expensive? Yes. Will there be sales? Yes. Do I wear Lulu? No. However, there's competition. You know what pants I do wear?

I only have one pair, I think. Oh, I wear bird dogs. Oh, those are expensive too. I have one pair of, I don't know how it pronounces. No one knows how to say it. No. Vowari? Can I buy a vowel, please?

It's a very hard to say name. Do you have those pants? I probably have three pairs of their worn pants, and they are very comfortable. Very comfortable. So joggers, like Athleisure, is a huge category. now. And of course, That's true. There's competition. Lulu's success has invited a lot of competition.

Well, yeah, you should be able to find some really good deal. I'm still getting 60, 70. All the Black Friday deals are still around. No what? Does Lulu have an email list? Notify me when there's a sale. I might get into that. Not a bad deal.

Oh, I maintain that those pants are too expensive for my liking, just generally. Even the Vories, they're all the same. I think, are they $100, 90 bucks? Yeah, I'm not buying those if I don't have a coupon or something. Just principle alone. So we've spoken a lot over the weeks about credit card debt. and at Waugh Buffo tweeted, here's a chart that puts credit card debt levels in a proper context. As a percentage of total salaries and wages, I just love the Twitter sourcing.

It's like, at Tom 4269. I'm not just going to take somebody's chart without giving credit. I'm a gentleman. So at Waugh Buffo, so as a percentage of total salaries and wages, even in these higher nominal levels, credit card debt is lower than at any time in the last 20 plus years, except for the plunged during their pandemic. You got to adjust it. You have to have a denominator. Conor Senn did one. Household liabilities as a percent of GDP.

It is back to 2001 levels now. Peaked in 2008, 2009, and it has been falling ever since. And look at this one from Bank of America of Sam Rose. It's all saying the same thing. Average credit card utilization rate by household income based on Bank of America internal data. And it's going down. It collapsed during the pandemic, of course.

And it's on the rise again. Maybe that's the point is that. Nothing remotely alarming. People are using this. the pandemic as a reference point to make comparisons to and showing that it's coming off of those lows and it makes it seem like it's worse than it really is. Do you want to talk about this high yield stuff? I think it's just inertia.

So there's a story in the journal about the money that people are leaving on the table by having their money just sit stale at Bank for America, Citigroup, J.P. Morgan, U.S. Bank Corp, and Wells Fargo, which I think they have like half the deposits or more. I think that this number might be a little bit misleading. Here's why. if you add up the total of the entire pile of money there, it's gigantic. But think about how many people have 800 bucks, 3,600 bucks. So to move accounts to get 3% on such a small number, doesn't move anyone's needle. It says here the average rate paid on a savings account or money market is 0.4%,

which is ridiculous. But it sounds to me like deposits are so high, banks don't have to care. It's a supply demand thing. I wonder how many, what percentage of this money that's sitting there is say over $100,000 or over $50,000 or whatever. At some of these banks, it's probably more than you think. Maybe it is higher. I don't know. You could be right. A bunch of people sent us this. This was a TikTok of a day at Disney, how much we spent. And it's this family of five. And they show buying the headbands and the food and skipping in line and then breakfast with goofy and then the hotel and all this stuff. And then they spent the $800 on the lightsabers, which we saw, though, you go and you build your own lightsaber, and it was $800.

And we looked, you could buy a knockoff brand on Amazon for 20. And we said, no, we're going to buy the knockoff one because my son was going to break his anyway. $800 to go, like, make your own lightsaber at Universal Studios. It's the biggest rip-off in the world. I have a question. Is the laser like a plastic tube or is it like a light that shoots out? It's not a real lightsaber.

The plastic tube. Yeah, is it a real Ice Saber? They added it all up and they spent $3,700 in one day. And that's way higher than average, but I can honestly see how you can do it. Are you excited for Avatar? Yeah, I'm going to go see it. Are you? I can't wait for Avatar.

I absolutely cannot wait. You have to take like a half day to go see it, though, I feel like. Isn't it a four-hour-long movie? I cannot wait. The first one is the only movie I ever saw with 3D glasses. Remember when 3D use was going to be a thing? I was never in on that. I think I did it once.

Samsung and all these TV, Sony tried to sell 3D TVs, like you were going to wear glasses in your home. Well, they had 3D movies. They had those in the movies, but I was not a fan. Because you'd get a headache. It hurt. It was cool. But the Avatar, I remember the Avatar.

It was pretty sweet. I can't wait. I think that movie is going to blow out the records. I'm rethinking my Disney experience. A part of me was like the nostalgia is going to hit me like a tidal wave, and I'm just going to walk into Magic Kingdom and just start crying. But after seeing these videos, I think that 7-year-old Michael is dead. He's never coming back.

I'm not going to cry. I think I might get mad. Here's my analogy. Going to Disney is like, remember in college you'd go back home, and the busiest bar in the year was Thanksgiving, the night before Thanksgiving was Wednesday, and everyone would complain about it because it's going to be so busy, but then you'd go and it was crowded and you're pushing around and it's expensive, but you see your friends and you gain a few memories, and that's going to Disney.

It's going to be crowded. You're going to complain, but you're still going to have fun. Because there's something about Thanksgiving. Thanksgiving was a huge thing. Thanksgiving Eve in college in New York's coming home and New York City was a huge thing. Bars were just packed. Not for me. I never had a fake ID. Oh, I'm saying once you turn 21.

Oh, true. You think my baby face could get in? My brother did give me his ID, but it never worked because I looked so young. I'm saying when you actually were 21, you'd go back. Okay, you might be shocked to learn that I never went to Thanksgiving even New York City. Okay. Too much. You didn't need a fake.

You looked like you were like 45 when you were 18. No, I did it. Okay. You still had hair. So I just want to talk about us briefly. So Elon Musk was on stage at a Dave Chappelle show, and he got booed into the Stone Age. And then the next day, he tweeted, like, wokeness is evil or something like that. First of all,

I don't think woke people are Dave Chappelle's demographics, number one. Probably not. Number two, somebody replied to this threat. So this guy did a whole thread. Somebody said, any video of this, and somebody responded with the video. Guess what? That video got deleted. This guy is unbelievable. That's why you spend $44 billion on a social media site so you can take down videos you getting booed. Give me a fucking break, dude. We're going to get this a minute. But the reason to think I'd

like White Lotus so much. How come billionaires are so sensitive? It just shows how unhappy really rich people really are. I think that's what the show just nailed. Social media gets them, too, even worse than regular people sometimes. I think the line, and this is, we're painting a brobush, obviously there are lovely billionaires, lovely rich people, that money did not poison them. Do you think this whole thing the last few years just shows the fact that Warren Buffett survived so long as he did? I mean, it was a different time, but still, the fact that he did that without blowing himself up and looking like an idiot. It's kind of amazing. I think it's a key takeaway just after seeing all this stuff. And the line at which money becomes a liability is probably

a lot lower than people think. Because you get a certain level of money and you start spending and then you move the goalposts and then it becomes expensive to sustain your lifestyle and any potential downturn in your own personal finance gives anxiety overload. And I think the line, I don't know if it's $3 million, $10,000,000, I have no idea where that is. It's different for everyone, but I don't think it's that high. Yes, and it's impossible not to keep wanting to ratchet up and keep up, and it's really tough. I don't want to spend too much time on this because this is going to be like the rest of the decade, but Paul Kodroski tweeted, I am so troubled by what I see everywhere all at once with chat,

GBT, in the last few days, college and high school essays, college applications, legal documents, coercion, threats, programming, et cetera, all fake, all highly credible. I think this is scary, but I think that's my knee-jerk reaction. I don't know if that makes me old. Don't you think that there's going to be ways where you can just upload a document to see if it's fake or real? I don't know. How? Don't you think that if you can create this AI, why can't you create an AI that detects if it's real or fake?

How would you prove it? You don't think you can upload and say there's a 99% chance this was created by an AI, and you didn't do this yourself. A potential really easy solution is just watermarks on these things, but doesn't defeat the purpose? I don't know, but this is going to be the next thing for the next decade, and that's not a bold prediction. Speaking of Twitter, I finally saw a good ad on Twitter. I finally saw one. It's New Balance basketball sneakers styled after Billy Hoyle from White Man Can't Jump. Look at these.

Are these great dad basketball sneakers? Did you get some of those for your deadly? I should buy a pair, like ironically. Those are like the 1990s. You definitely blow out an ankle on those. No, look at all that padding on the ankle. One more thing that I just want to share. This is just for media, really merry Christmas.

I've got, a matter of fucking wearing them right now. I don't know why I just lifted my leg. where I could just do this. You see these things? Are they slippers? Phenomenal. But they have a soul. They have like a big rubber sole.

So you could wear these around the house and you could also take them on the go. Granted, they look completely ridiculous in public, but you know, I don't care. Those are your, I just rolled out of bed slippers when you go to get coffee. You nailed it. I go to Starbucks in these.

They're 40% off. What are these called? I don't know. I'll put in the show notes. Thermo ball. Thermo ball. They're from North Face. If you're in the market for a pair of comfy boots,

here we go. And Ben, there's news. I'm back on the Palaton. Way to go. I rode yesterday for the first time. Maybe all year? That can't be. But it's been a while.

Still work? You have to oil it up a little bit? It still work. Are you still pelotoning? I probably do three or four times a week. Yeah, I still like it. Oh, is that all? That's in the winter when I can't run outside because it's too cold.

By the way, I rejoined the gym for the first time since a pandemic. I have a planet fitness right down the street for my office. It's $10 a month. Here's the crazy thing that's changed since I started lifting in high school. Where have you been working out prior to the gym in home? I created a little home gym. I wanted to change it up a little bit. So I go to the gym at lunchtime. The young men, bros, dudes at the gym, check themselves out in the mirror incessantly. They're constantly doing the tricep thing. Is that embarrassing? I mean, I've never been to a gym, but...

That's what I thought. It's usually you'd think maybe the women are checking themselves. It's the guys, constantly, like, flexing and checking themselves on the mirror. Usually you can sneak a peek while you're lifting and see how you look. These guys are blatantly checking themselves out all over the place. It's bizarre. I avoid the mirror at all costs. Okay. Talk about our great readers here. Michael asked, what is the business plan of a five-star hotel? How does it make money? Someone said, I was listening to it. My focus is on hospitality financing. I won't say the name, but they work with an advisor where their specialty is structuring debt for America's economy to mid-scale hotel and motels. Post Oak is a mixed-use property that opened in 2018. It was renovated in 2021. Generated $18,235 per room across, that's almost $4.6 million across 250 rooms. That's pretty good. That's nothing. 4.6 million for that? It used to be 6.25 pre-pandemic. For the properties, the elite status,

these figures are low compared to many lower-tier projects I've reviewed. So I guess he's saying that maybe it's not that great. The lower-tier places make more money. So maybe you're right. I cannot find any debt associated with the real estate. This is strange because only a few institutions would have purchased without outside financing. There's a lot to unpack and I have to spend more time piecing together the capital stack.

We'll do it. I'm just kidding. Thank you very much for the email. But, okay, if that's true and it's $5 million in revenue, that can't make money. You're right. That doesn't sound that high. How much just the cost to run that place? Maybe you're on to something here.

All right, let's talk White Lotus. Did you know that it's actually called The White Lotus? Yeah, why? Oh, I didn't. I thought it was called White Lotus. Oh, I just called that. I think HBO Max is clearly the best streaming service and there's not a close second. In terms of quality, they have three or four shows a year where I'm like, I can't wait for the finale.

It's incredible. Just bangers, nonstop. I loved the first season. I think the second season was better, or I liked it more. Second season was better. The finale was amazing. Like I said, the fact that you have a conclusion, I'm not going to spoil anything, but Albi would have believed SBF as much as Bill Ackman did.

What do you think? He knew he was getting taken. Just amazing. I love the interaction between the two couples and just so many little good things about this show. I absolutely loved it. Incredible. So there's so much to unpack. Not that we're going to unpack it all here, but it's kind of crazy.

Maybe three episodes in, even maybe four episodes in, there was not a ton happening. No. It's all character development. It's very difficult to land the plane of a murder mystery movie show. And they did. That's even besides the point. This show is so much bigger than murder mystery. Like, if you asked me who was the best character who won the, I would say all of them.

It was so perfectly cast. There wasn't a bad character. I could have spent another 10 hours with these characters. I'm sad that it's over What a ride What an incredible show The scenery is a character too Oh Mike White

Ned Schneebly That's my only frame of reference for him He's Ned Schneebly to me He wrote all of this by himself Pretty impressive I cannot wait for the third season Which is allegedly It's going to be in Asia

I can't wait Now the plane home I watch bullet train Which when I talk airplane movies This is exactly what I'm talking about Okay This is the absolute quintessential

20 to 30% premium on an airplane movie. If you see it in the theater, you're like, it was fun. You watch us on an airplane. It's riveting. It's gripping. It's fun. It's violent.

It's just pure nonsense junk enjoyment. And I loved it. I really did. But I'm being serious now. Don't watch it this weekend unless you're on an airplane. Wait for the airplane. I also watch this in the airplane. All my friends hate me.

You ever hear of this one? It was very British. Very British. This guy reunites with his college buddies after eight years. He was like a refugee worker and out of touch, and he reunites with his friends, and just something is off and doesn't click, and it's a bit like ominous, and you're not sure if something like really bad is going to happen. I'm not recommended this. Don't watch it. I'm talking to the person that's seen this. It just ended. And sorry for a spoiler. I'm not a big fan of that. It just ended. And I was like, oh, man, I was enjoying the movie until the very end. All right, I'm about 30 years late to this movie, but I saw Richard Christie's favorite movie. Some of you will get that reference to me if you won't. Legends of the Fall, you ever see that movie? I told you to watch it last week.

You told me, okay. I was as you were Josh. I love that movie. Not a good movie, a great movie. It really is. And just super depressing. Did anything good happen in that movie? True.

Everything bad that could have happened did happen. Beautiful Brad Pitt. A period piece. Brad Pitt's hair is just amazing. It's probably the most beautiful man ever. Yes. Anthony Hopkins at the peak of his powers. If you haven't seen that movie,

it is basically the same thing as the river runs through it. You're right. Just longer and... They're sister movies. I think it's on Netflix right now. I got into it this week. We watched the new Julia Roberts, George Clooney rom-com on Peacock. Are you good?

It felt like a mid-early 2000s rom-com that they don't make anymore. There's a lot of stuff that's really cheesy and corny, but it was still Julia Roberts and George Clooney, so it's like, eh, it's... How bad could it be? It's a rom-com. It's what you'd expect. Speaking of movies they don't make anymore. Legends of the Fall, that movie is never getting made ever good.

No, it would be a series. Yeah, it would do $47 at the box office. Wait, before we go. Now 1024. S&P is fading. That's on the lows of the day. We'll see. Makes sense. The stock's up 2% or so. 1.7 in the S&P. Bond's still down. All right. What a day. What a week. What a year.

Animal Spiritspot at gmail.com. We're not going anywhere. We'll be here for your holidays. Oh, we don't take off. We will be here. We'll do our annual recap. I want to revisit the 10 predictions that I made for this year. Some good, some bad. I think we say we're going to do that every year, like a recap and we just never do it. It's really hard. Well, because there's so much content. How do you recap? Cap, there's been a hundred good shows this year. We might have tried to do it the first year, but I think we've done it since. Okay, we haven't.

All right, I thought we did. Despite the terrible best picture category, I had a great year of the theater. Credit to me. Way to go. All right. See you next time. Thank you. Thank you.