Animal Spirits Podcast - Rates to the Hilt (EP.322)

Episode Date: August 23, 2023

On episode 322 of Animal Spirits, Michael Batnick and Ben Carlson discuss: if bonds are more attractive than stocks right now, a lost decade for bonds, Michael Burry's track record, why the economy is so hard to predict right now, why streaming is underrated, the latest Netflix series, and much more! Today's episode is sponsored by our friends at YCharts! Start your free trial and get 20% off your first subscription at: https://go.ycharts.com/animal-spirits-referral. 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.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   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. Wealthcast Media, 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 Animal Spirits is brought to you by our friends at Y Charts. White Charts recently published a blog diving into the debate between value versus growth. They took a look at strategies, insights, and trends, dating back to the early 1980s, both stocks and ETFs, to help you decide which equity class is best for your investment goals. Whether your team value or team growth, you'll get details into how you can leverage Y charts to create side-by-side reports, build custom score models, and illustrate risk versus reward with the scatterplot tool to analyze the performance of either exposure. One of my favorite charts in here, they did, it's going back to like 1984, and they did

the Russell 1,000 growth versus the Russell 1,000 value. And they have the rolling five-year total return charts, which is pretty cool. The ability to do a rolling chart like this is cool, because you can see when the divergences happen, like in 2000, of course, and then in 2005, you know, growth first, then value, now back to growth. But the average return for these, for the average five-year return is almost a dead. identical between growth and value. It's a little over 11% since the mid 80s per year. And I'm guessing that if you would have done like a 50-50 growth value in rebounds, you probably would have done even

better. You know, I like these charts. No one would actually do that. I make these by hand. You see the one on the bottom pane. So you've got the rolling five year and then you've got the difference to really bring it to life. Yes. You like the spreads. Yes. This is a huge spread guy. Yes. I probably don't use these rolling annualized returns enough on white. Am I more of a spread guy or a dump guy? You know, I've been to the dump like three days in a row. Okay. Just cleaning house. I love it.

Love it. Fall cleaning. Good for you. All right. We got a link below for on YouTube or on our show notes. If you're listening on the podcast, 20% off if you tell Whitechard's Animal Spirit sent to you for your initial subscription sign out. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching.

All opinions. expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Adamal Spirits with Michael and Ben. Happy middle-aged week to Ben. Ben was Thursday was your birthday and you turned And 40, what? Two.

Forty- How does it feel? That's probably exactly middle-aged, right? If we're heading here. Well, no. Maybe literally middle-aged, although we already decided middle-aged is your 50s. I didn't always decided that. Well, we decided.

I decided. No, the internet decided for us. You know, I had something of a middle-aged moment, too, actually. I hurt my shoulder, and I don't know how I did it, so I'm just going to assume that I was sleeping. Okay. This is what happens. Like a clicking thing.

Wake up sore. Five, no, it's been like three, three, four weeks. Saturday night, it's 11.30. I've already been asleep for over an hour. I'm in a deep sleep. I might have, might have drank earlier than the day. All of a sudden, I hear knocking on my door. And I immediately, credit to me, pop up and run downstairs.

Like, what the hell? So I get back up, open the door, nobody's there. get back upstairs, ask my wife, like, I'm like, look at my camera. Who was that? Neighbors. Little rascals. Little rascals playing it, playing it. Wait, what did you call it?

Ding dong ditch. I call it ring and run. Ring and run. Ding don't ditch. Same thing. Ding dong did. Yeah, you ring the doorbell or knocking the door on you run away. Yeah.

So like five minutes later, they did it again. This time, I run downstairs and out the door in my undies. Do you yell at them? Yeah, I did. Well, I couldn't find them. added like ants. I saw them like hiding by the bushes. And I said, knock it off, kids. Yeah, my ring camera has got you. Yeah. Show your parents. All right. Uh, I got no of the middle age takes. That's, uh, I did, I did write a blog post, though, about, I've been thinking about

how much different entertainment options for me and my kids are, because I'm making the case in a blog that streaming services should be pricing higher. Like, there's those charts of showing streaming prices going up. They should be way higher. If you think about how we, consumed entertainment in the past, you'd walk around Blockbuster video on a Friday night, and there might be seven copies of a new release movie. And if they're all out, you'd have to go, like, look through the return bin to see if it was there. They might have one copy of an old movie.

Like, I don't think people realize how great they have with streaming. Definitely not. Do you remember Columbia House for getting CDs? You'd pay one penny to get, like, 10 or 12 CD. And then they'd send you something every month. And if you didn't send it back to them, then you had to buy the CD. For like $24? I would forget it all the time.

I have to buy like the CD the month that I didn't want. I'm just saying technology has improved so much for entertainment options that people don't realize how good they have it these days. Over the weekend. It was way harder in the 90s. My kids are getting into Ninja Turtles. We haven't seen the new one yet, but I'm very excited to see it. So I showed them the originals, at least as far as the originals to me.

One of the first was like 1989, I think. The second one was 1991. Fun fact, I had my sixth birthday party at the movie theater. We saw Secret of Views. Okay. Was that before or after you saw? What movie did you see at five years old? Field of Dreams.

Field of Dreams. I mean, I'm like, I'm really... So your fifth birthday was Field of Dreams. Your sixth birthday was Ninja Turtles. I'm pretty sure I still Field the Dreams in theater. Anyway, I had two thoughts watching that movie. Number one, pizza's the best inflation hedge ever. They got a pie for $13 in 1991.

Wow. It is true. If you put the inflation number on pizza... I'm sorry, gold is not the best inflation ad. It's pizza. $40 right now. The other thing that I had, the other real station, He said, holy moly, is that, is that Sam Rockwell?

Went to the IMD Bay, sure enough. Sam Rockwell was like a foot soldier. I'm a big Sam Rockwell fan. All right, this is the week that. But anyway, hold on, just to put it on this, you're right. You dial up secret of the use, $4. It's just everything's right there. Whatever you want.

It's so easy. Yeah, whatever you want. I think we'd take it for granted, how hard it was to find. My other thing was, in the summer, TV schedules in the summer, the TV channels used to literally say, no more new shows this summer. Go do something else. It was like September to May was new TVs and maybe they had a pilot or a game show

or something in the summer or some repeats. But other than that, there was like no new shows in the summer. It was just kind of like, eh, everyone just decides TV's done for the summer. Oh, yeah, people are complaining right now that there's no good shows on. Oh, yeah? There's like four million.

Yes, yes, exactly. And literally in the summer there'd be no new shows. It was crazy. Although hand up, I'm one of those people complaining, but shame on May. Fair. Forgot how good we have it. All right, new high in the 10-year treasury

going back to 2007. I found that October 2007, and this has been the story of the last month or so. It seems like we have six-week cycles now for the economy, right? We go from stagflation to hard landing to soft landing to now, I don't know, growth accelerating. I don't know what we call this. The Wall Street Journal has a story that the era of historically low interest rates could be over. And this is something that me especially, and I guess I could lump you into, probably been the most wrong about over the years where we thought rates were going to stay low for a long time or, like, rates couldn't stay high for this long because something would break or the government couldn't afford it or whatever it is. Hand up, I was certainly wrong on that. But they're saying higher productivity and increased deficits could raise the neutral rate of interest rates limiting Fed cuts in the future. So they're saying, like, the potential growth could be higher, swelling government deficits and investments in clean energy could increase demand for savings, pushing the neutral rate higher.

Basically, like, the neutral rate, I guess, is just what the Fed settles into, which is funny because it seems like there's never like an equilibrium. It's always just moving. Well, let me ask you a question. What about this whole idea that tech was the most powerful deflationary force in the universe? Is that over? It seems to be premature to make that claim, in my opinion. I totally agree. I think trying to make any sort of secular call right now as opposed to cyclical is really difficult because there really have only been three interest rate regimes ever in the modern era. It's flat from the 1920s to the 1950s up to the 1980s and down since then. So it's really hard to make one of those pivot turns, I think, in rates. And if anything, I think things will be more cyclical going forward. But I think it all comes down to government spending. And if you're trying to hang your head on a

one thing or another of higher rates and higher inflation going forward or back to lower rates, it really depends on what the governments are going to do around the world and how much they're going to spend. I think that's the tell. And so if you, you're trying to guess politics, which is probably more impossible than trying to predict the markets. Here's my question for you right now. With rates so high, are bonds more attractive than stocks right now? So this is from the Wall Street Journal, 10-year tips. This is real yields are back to above 2%. I've always been taught that anything above 2 to 3% in Tips is like a screaming buy signal. It's like if you see on here, it hasn't happened very often since. A screaming buy for what? For tips, like, because you get

2% above plus the inflation kicker, right? This is so a lot of people wondered, well, what the hell happened? I bought tips because I was worried about inflation and then tips got crushed. But if you look, tips had negative real yields from 2020 to 2022, basically. Well, also, I mean, there's positive real yields. It's the inflation component. It's the inflation component. it as part of the pie, but when rates go from zero to five, they're, you know, they're, bonds. Yeah, that's the thing. People didn't realize. But now you have two percent real yields, which is great. Again, you're actually getting a yield plus the inflation kicker. And if we're just talking regular nominal bonds, rates go up, obviously that's not good.

That's what people are worried about now is rates continue to go up because the economy's accelerating. But if we have higher for longer where, like, rates just kind of stay where they are and maybe in a tight range, that's good. If we have a recession and rates go lower, that's good, isn't, I don't know, I'm not like a short-term, intermediate-term guy, but I think if you put them side by side, you'd say bonds probably have the better bet right now with the understanding that. When you say right now, what do you mean? Bonds are more attractive than they were three years ago. Do you mean right now on a relative basis? Right now for the next 12 months? Like, what's your time frame? It depends on what happens to rates, I suppose. But I think if we're looking at stocks and

bonds right now, you could make the case that bonds are relatively more attractive than stocks, which is not something I would have imagined myself saying. Relatively, okay, I think bonds are relatively... Like, if we're going to play out the different scenarios, there's probably way worse scenarios for stocks than there are for bonds. Yeah, I mean, bonds have a much bigger margin of safety with rates at 5% than they did it when they were at 0%. But I still think people are looking at the losses and going,

no way I'm putting money into bonds. No, no, no, you keep saying this, but it's not true. Money has been flowing into bonds for like 35 consecutive weeks. Then why are rates rising still? If money is flowing into bonds, why are rates rising? Because, because, dude, the supply of bonds is not capped. The Treasury is issuing new bonds all the time and so are corporations. But if there was, if there was high enough demand for bonds, rates would be falling, not rising.

It's not enough to, like, control. You're talking about mutual funds and stuff where the bond market is enormous. And if there's government selling, the, the mutual fund, ETF money is a drop in the drop in the bucket. Buying pressure is not enough to drive rates. Well, it is if it's the Fed doing it, I guess. Right. But so I tweeted this out last week. So the long-term treasury, TLT, 20-plus year U.S. Treasury bond ETF, is down 2.4% over the last nine years.

We're closing in in a lost decade. And a lot of people tried to actually me and say, no, you must be looking at price return. There's no way that's possible. And if you look on my chart here, it says total return. This is income included. We're coming in on a, and if you can see, it was close up to, I don't know, halfway through this period. Two-thirds of the way through is up like 60 or 70 percent. from that blow off top and yields falling.

Now we're closing it in a lost decade in long-term treasuries, which is kind of nuts considering how great things were coming into 2020 with these. Yeah. So Bespoke head one, two, since February 19th of 2020, which was the peak of the market right before COVID hit, TLT is posted a return of negative 32%. Ark has down 31%, which is again kind of crazy for how well these things did during the COVID bump. one of the things that I heard from a lot of people that I've been writing about bonds lately and talking about them is listen I don't care about bond losses I'll just hold my bonds until maturity that's my hedge I can just hold to maturity I don't need to worry about these losses you see the seven to 10 year treasury is still down 21% or so to which I say that's a great psychological trick but it doesn't mean that you're not losing out in some way like the hold bonds to maturity host people think they have this like secret

way to make money in bonds and not lose money? That's a good point. People value principal protection a lot because you're right. If you're buying an individual bond and you hold a maturity, you will get your money back. But what if you bought that bond at 2.5% and it was a 10-year bond? So you hold that bond for 10 years. Congratulations. You get 2.5% and you get your money back. Rates go up to 5%. What are you still holding that bond because you get your money back? What about all the missed-up? What about the opportunity cost of not getting higher yields? So you're 100% right.

Cliff Asness had this thing, it must have been 10 years ago, like his big top 10 investing pet peeves. And he talked about the whole hold to maturity, individual bonds versus bond funds things. And he said, I always go back to this. He said, bond funds are just portfolios of bonds marked to market every day. How can they be worse than the sum of what they own? The option to hold to maturity and get your money back is apparently greatly valued by many, but is in reality value with, in reality, is in reality value. The day interest rates go up, the individual bonds fall in value just like the bond fund. By holding the bonds to maturity, you will indeed get your principal back.

But in an environment with higher rates and inflation, those same nominal dollars will be worth less. the excitement about getting your nominal dollars back alludes me. Not me. I totally get it. And I get where Cliff is coming from. But this is how people behave. This is the thing. This is the whole kit and caboodle, as they say. It's funny to me that some people think, like, I've got it all figured out. Like, I'm smarter than the bond market. But this is not the way things work. If you just sold your bonds at a loss, your bond fund at a loss, you put it into shorter term bonds at higher, whatever. It's a psychological safety blank. Can I completely agree. Yes. So there's a chart from Bloomberg. We said like there's like,

hedge funds are short treasuries, asset managers along treasury. So there's a chart showing asset managers net long positioning 10-year treasury futures is at the highest level that it's been since, whatever, 2006. It says investors are positioned for yields to fall. I don't agree with that sentiment. I think it's rational to take advantage of and lock in higher rates for a longer period of time. So just because you buy a 10-year bond at 4.4% of wherever the yields are, it doesn't mean that you think that they're going to go down to 4% tomorrow, right? It means that no, no, no, I'll take 4.4% for the next 10 years. And if I'm locking it in.

Yeah, I'm locking it in. So if rates go to 4.7%, well, yeah, I'd rather they not, but that's okay. I'm locking in today's rates. It doesn't mean that it's a market timing call. And again, it's the highest rates we've had in over 15 years. So I think that that totally makes sense. Here's my funny thing about the finance world. And I know why this happens, but the 10-year yields are the highest in 2007, meaning people

finally have some, some yield they can earn. Wage growth is up. GDP growth accelerating and Wall Street absolutely hates it, right? Like, everyone is bearish now because, but my whole contention is, rates are going up. Hold on, hold on, I unpack that. What do you mean? Wall Street hits what? And when you say Wall Street, what do you mean Wall Street?

Do you mean strategists? Do you mean the bank? I mean. Don't you think rates rising has turned to everyone bearish on last month? But my whole contention is, wait, rates are finally rising for the right reason. Like, rates didn't get this high during the inflation. spike on some of these bonds and the whole Fed tightening thing, like inflation has fallen, rates are rising because growth is rising. Isn't that a good thing? Yes. So on the one hand,

I think that when you say are bonds relatively more attractive, they're definitely more attracted to themselves than they were. That's for damn sure. But I do also believe that this should have this should cause a repricing of multiples for stocks. I just do believe that. I'm not saying it happens overnight. But if stocks, we're trading at 20 times earnings with a 10-year yield at 1%. I don't think they should trade at 20 times earnings with the 10-year yield at 5% or 4.4%. Sorry, I just don't. Now, I don't know where the right number is, but I also simultaneously have a hard time

getting too bearish on stocks because the economy is too good. Yes. And it's also that that's the funny part, too, is your point about rewriting and evaluations totally make sense in theory, but then why is the NASDAQ up 35% this year? That's the part that... And Nvidia's at an all-time high right now. So, yeah, dude, the shit's hard. Like, we're trying to like make sense of it all.

and it's just hard. And if you look at the, this is through Monday, the correction, I think these things just happened faster where stocks are going up, everyone's bullish and stocks are going down, everyone's bearish. This is a very, as I say, a garden variety correction. That's a 2-500 is down 4% or 5% or 6%. The VIX never got over 20. This was nothing.

I mean, whatever. If rates keep going up, maybe stocks do continue to roll over. But it's not like this is, this is like a terrible thing. This is, this is, you probably average 2% or, you know, 2, 5%, corrections a year and most years, it's not like this is the end of the world. But I feel like the sentiment shifts so much faster these days. Yeah, yep, yep, yep, yep, yeah. Even like what it was like 10 and 15 years ago. It's social media. Get used to it. It's permanent. And maybe that's, maybe that's the point is that that's where I'm getting my sentiment gauge from. When there's a 5%

pullback, the crowd will never say no reason to panic. You know what I mean? Because the loudest voices rise to the top and that's just what it is. But the same thing when stocks are rising, too, It's kind of like two months ago, it felt like this is a Teflon market. Nothing can stop it. And I guess it just, it's always that way, but it feels more now. I know you and Josh talked about Michael Burry last week on what are your thoughts. Adam Koo had this prediction chart, which I think we can appreciate. You especially like to do the annotations on a chart.

I like it, too. Just some of his, I forgot about the one, the bubble in index funds in ETFs in September 2019, which I actually wrote a big piece about saying that that's, overblown, and I will always kind of say that. My whole point here, Spencer Jacob at, what is it, Jacob or Jacob? Yeah. Did I do that? Okay, sorry.

Oh, that's like, that's like spelling Jeff, G-E-O-F, right? Yeah. I mean, what is that? What is it G-E-O? We're going to hate mail now from Jeff. His whole point of this calling corrections, he says, every market crash or bottom has a Bapsen. Remember Roger Bapsen was the guy who called the 1929 crash. Someone who can dine out forever on nailing it.

In 197, it was Elaine Garzarelli who predicted a collapse days before the Black Monday. She became the best-paid strategist on Wall Street for a while and went on to run some poorly performing mutual funds. In 1982, it was Elliott Wave theorist Robert Precter predicting a roaring bull market after stocks spent 16 years in the doldrums. That Elliott Wave stuff is still around, isn't it? But the crashes he called never materialized. And it said, I love this part. In response to email questions, Garzarelli says her claims on her website of 94.5% correct calls have been audited.

And while Precker was more humble, admitting criticisms of his record are about right. Good friend. Which is kind of funny. At least he's admitting it. My whole thing is, remember the Buffett punch card of like, you should have a punch card and 20 times in your career, you punch it and you make a change. There should be like a punch card of like five big predictions of a crash predictions. And after your punch card is done, you can't publicly make them anymore.

I just, I'm a fan of having the public track records out there for people who make this kind of stuff. That's what I'm saying. And I think that's a good part about the internet, even though some people fail to do their own research on this of the boy who cried wolf kind of thing. Yeah. I don't know. Ben, do you remember when like weed stocks hit the scene? Yeah, what was the, Tilray was the one? Was that the big one? TLR. I think so. Is it almost the case that that weed going, being legal, was bad for pot socks? Is that possible? Yeah, there's too much supply. Oh, my God.

I'm looking at like Tocke, for example. This is a Cambria fund. And Mab actually has this good thing where it's like if an asset class is down. I don't know if Wider is an asset class, but you get the point. Maybe Sector, whatever it was. He had this great study. If something's down five years in a row, almost doesn't matter what it is. You just buy, you know?

Oh my gosh. How is this even possible? So Toc is down. What? It's down what? Oh, no. So I'm looking at Tillray is down every single year since 20, 18. It was up 292% in 2017 and 310% in 2016. And it's fallen every single year since then,

including this year. Oh, no, it was up in 2020. Sorry. I remember when these stocks came out. And I had like, I had one family member who was like, not bugging me, but, you know, really curious about which one he should buy. And I was like, I think I said, like, listen, I don't know if these would be great business. I told them about like the airline thing from Buffett. I don't know if that fell in deaf years. But I don't know that these are going to be any winners here. It's great for the consumer, I guess. not I guess, it's great for the consumer, but in terms of investing. Anyway, Jeffrey Patak tweeted, it's not every day you see a strategy go almost all the way to zero in less than two years.

But this cannabis ETF, which is slated for liquidation, has nearly done it. It's down 90% since it's October 21, conception, leverage and weed stock's bad combo. So it was a leveraged weed stock play. Anyway, toke, I mean, yeah, it's still basically in the basement. I don't know, stop going down. I don't know. And you'd think weed investors would have a little more patience because they're a little more slow to react to things. Right? Sorry.

So anyway, just getting back to the flows for bonds from Daily Chartbook, U.S. bonds attracted $1.7 billion in the week ending August 16th for the 33rd straight week of inflows. So people are buying stocks. I mean, people are buying bonds, excuse me. And then next one, again, from Daily Chartbook, mutual money market funds have dominated year-dated flows across asset class. So this is wild.

It's money market funds, all bonds, U.S. government, and then, you know, everything else rounds to zero when looking against that scale because money market. funds have brought in a trillion dollars. Now, money market funds obviously can't move markets because that's set by the Fed. But even bond buying is not going to, the bond market is so gigantic. It's not, it can't possibly influence interest rates. What's the financial stock play here besides like a Charles Schwab that would benefit from this? Because those money market funds make pretty decent fees. Like those are higher fees than like an ETF. Someone has to be benefiting from this. Is it just every broker is benefiting from this in some way? Plus they're earning a great

spread. They're all charging like 8% on their margin right now, even though they're paying 5% in the money markets. What do we say Robin who was getting? So this whole thing that we, I think we've done this bit. So forgive me if I'm repeating myself, this whole thing about bonds won't lend. I mean, banks won't lend when the curve is flat or inverted because they borrow short and long. Not really true. Sorry. They're in a great spit right now. It just depends on the demand for loans. Look at your checking savings accounts. They're not borrowing. I mean, yes, they're borrowing short, but not at the rate set by the government, they're still paying zero effectively or close to it.

Isn't it also crazy how like this is like the immaculate handoff for baby boomers? Like they had this wonderful, I mean, retirees have been complaining for years about the fact that they have no safe yield anywhere, but the stock market went up a ton, housing prices went up a ton. And now all of a sudden it's like all these baby boomers were retiring, it's like here, on a silver platter, here's this 5% yield for your safe asset. assets, have at it. I don't think the baby boomers, you couldn't have drawn up a better situation or scenario for the baby boomers from like 1980 to today in terms of how financial markets worked out for them. Low starting yields, high starting rates, 20-year bear market, or bull market.

Sure, there was a lost decade in there, but then a 15-year bull market and now really high rates. Like, you couldn't have scripted it any better for them. See, I really wanted to interrupt there, but as a co-host, I had to let you cook. Thank you. You're welcome. So I'm actually working on a post about this right now. If you are an investor or if you're a lender, right, slash investor, these higher rates are the best thing since sliced bread.

If you're a borrower, this is the worst thing ever. So, Ben, is the Fed worsening inequality by raising interest rates? but I thought, but wait a minute, I thought the Fed was worsening inequality when they were lowering interest rates. So which is it? It's both ways, I guess. But, yeah.

So interest rates are bad for inequality, whether they're high or lower, they're just bad. And I'm being facetious, but is there some truth in that? I mean, you can't make the argument, certainly the argument was made the entire time that when rates were low

that the Fed was widening the income inequality gap or the wealthy inequality gap. And all kidding aside with rates high now is not the same thing playing out. If you're, if you're, if you're, if you already have assets, you're already locked in a mortgage, you have money to invest. You're, you're, this is a huge windfall for you. But if you are borrowing or you are accumulating or you have credit card debt, you're, you're getting destroyed. There's going to be a line in the sand in like 20, 21 or 2022 in the future.

They're going to look back and go, what happened? It's like housing market especially. Like, it just speak, speaking of that, I was looking at, I was playing around with rocket money yesterday. and I saw I've got I've got many bones to pick with my recurring charges bones to pick all over the place a graveyard of bones with how they're being categorized or what no no no like hand up this on me somehow I have three serious subscriptions I'm going to call them this afternoon to find out what's going on the New York Times is charging New York Times is charging me twice it's charging my business account and my credit card my personal credit card I can't figure out why

I have no idea why Anyway, I saw an interest charge from American Express. And you know, credit card interest is like 20 something percent. Right. I'm like, wait, what the heck is this? I'm an auto pay guy, right? But my new, my new ish card, which I linked my old account, my existing account, I guess I forgot to set up the auto pay.

So I just assumed that, I just assumed, right? Shame on money. I just assumed that it was set up. But I never got a notice that I didn't, I never got an email saying that I had a, I had late charge. Isn't that weird? So I had a late fee for $30 that I called the American Express. They take it off. They reversed it. But the interest expense, the interest expense, like, that's, you know, we can't do, that's, that's corporate or whatever. $106. And that was probably, I was probably only, I'm probably like, I don't know, 10 days delinquent.

Can you imagine the people that, that carry balances over every month and are looking at those charges? Maybe they just don't look. But I can't even imagine. Let it allow them those It's backbreaking. It's backbreaking. Ben, what's your number of rule in? personal finance? Pay off credit card debt. Boom. Always. Every month. Just live off the rewards. All right. The GDP now has estimates for real GDP at Q3 at 5.8%. This is crazy to me. It's the fastest non-pandemic quarter in 20 years. So you had the big snapback of the pandemic. But take that out of the equation. And it's 20 years, it would be the fastest quarterly growth that we've had, which is, it really is amazing. I don't know anyone who in the right mind predicted this.

It's impossible. Conrason. So just, so I think, I think that's why the narrative is shifting. It's like, holy cow, the economy really is accelerating. So they're not going to cut rates. Rates are going to stay higher for longer. And okay, you repriced risk assets. Makes sense.

Conor Senn had this. All these are reasonable takes. Inflation is still too high. Fast growth is compatible with cooling inflation due to supply chain improvement. Growth is still too fast to be consistent with 2% inflation. Over time, the economy can't handle 5% Fed funds rate. This all makes sense to me. Like, there's so many different.

The last, the last one to me is. most salient point. There's no way. There's no way. If you, if, so remember we said like so much of the debt is already fixed, right? Your mortgage is whatever. I know this is, this is like fantasy world, but imagine you repriced everything at 5%. Imagine everything, you just wiped the state clean and just said, replace your existing debt with with current rates. Sunk. And maybe this is the reason that everyone on Wall Street so worried is because the, the thinking is, if the economy continues to to accelerate, the Fed is going to have to accelerate again. And that is when something of eventually it's going to break. Like, okay, it hasn't broken yet. We had all these extended

circumstances. Things have been fine. People locked in low debt. Eventually, something's going to have to slow. I think that's obviously the worry. Duncan's saying I need a financial advisor? I don't think financial advisors are responsible for irresponsible subscriptions. That should be, well, yeah, I told you got to negotiate with them. But I think, you know how you have automatic 401k target date contributions and these things? And, like, you have a default choice for credit cards. your default should be automatically paid off every month. And if you want to take that off, you'll have to go in and turn it off.

How's that? That's such a great point. You know, that's like an auto enrollment for 401Ks. Yeah, that's what I mean. Yeah, it should. So you have to opt out, not opt in. How much money do credit card companies make because people don't get automatically opted in? That will never change.

But you're right. My sister, her very first credit card out of college, she didn't really know what credit cards worked. And so my dad looked at her bill after like 12 months and was like, Sarah, what are you doing? And she's like, what do you mean? He's like, why aren't you paying off your credit card every month? And she's like, I don't need to. It's a credit card. You can just kind of let it go. And she didn't, she had no idea that interest was accumulating. And she had the money to pay it off. I bet that's just didn't. A lot of people probably don't know about credit card

interest. That's on me for being a finance brother, not not teaching her the ways. Hand up. This is a great chart from Bank of America. U.S. consumers are still super healthy. Consumer debt as a percentage of GDP is at 2001 levels, wild. So even with all these rate hikes, it doesn't matter because people already locked it in. You locked it in. It doesn't matter. You don't feel it. Doesn't this go to our point of, okay, the Fed takes rates to six or six and a half percent,

if they have to really like snuff this thing out and we have some sort of slowdown. I still fall in a case, like even if it happens, it's going to be pretty mild. So a recession would happen, but it would be mild. I think that would be, that would have to be your baseline, with the caveat that things can always get worse, but that would, that would have to be the baseline. Things aren't like, people aren't just over leveraged to the hilt this time around. To the hilt? Right. Is that a thing? Is it to the hilt? You might be right. I'm not sure. To the hilt. It didn't sound terribly wrong.

To the hilt. All right. To the hilt. I'm going to fact check you. To the hilt. To the hilt is a thing. To the hilt as much as possible. See, we're mortgaged to the hilt. To the utmost degree. Okay. Ben, not only were you right, but you were exactly right. Credit to you were exactly right. Credit to you. I could hear people saying to the hills and with confidence and thinking they're doing it right, but they're not. So you think to the hills is one of those things people say, but they don't know that it's actually to the hilt? Right. The more you know. I still get a grain of sand and salt confused.

But now I know it's sand. No. All right. Wait, is it salt? Yes, it's awesome. We've done this before. Oh, God. I really thought it was sand.

All right. are you sure take it with a grain of salt okay guess that one hasn't sunk in yet yeah confidence level was pretty high there all right

I don't know how to square the circle Ben worldwide spending on business travel will top pre-pandemic levels next year and expand to more than 1.78 trillion according to the global in 2027 according to

the global business travel association's annual outlook How and when business passenger volumes will recover to 2019 levels remains to be seen. Travel by large corporations remain stuck at about 75 to 85% of 2019 volume for U.S. carriers. That's way higher than I would have thought. But that's still high. I would have thought with a remote worker would be like 60% of pre-pandemic levels. But it says spending rose 47% last year to $1.03 trillion, and its forecast increased 32% in 2020.

How much of that is inflation? Okay. Yeah, but even still. Kind of like looking at the box office rates. Like, this is the highest grossing thing ever, but you don't adjust for inflation. But I just assumed, I don't know, that business travel was like dead forever. What would you have guessed it's down since 2019? 50%.

I would have said at least like 40 years. Who's traveling for business? Yeah, that's a, well, I guess, you might have been traveling more, but. That's true. What idiots are traveling? How much of it do you think is people like getting an excuse to get out and travel because they just, they want to get out and travel again? And it's like they don't need to, but they want to.

There's got to be a lot of people who that, like, phone. Like, I got to go to visit the manufacturing plant over here and just get out of the house. The Wall Street Journal had a piece called Banks Don't Love Rich Mortgage Bowers as much as they used to, saying, like, they're not getting deals to jumbo loans anymore. But this is interesting to me. So they look at interest on a new car loan by credit score. And they go, Deep Subprime, which I did not know is a thing. Deep Subprime sounds like a movie from the 90s.

Does it not? Brendan Frazier probably would have been in it. Deep subprime is much nicer than very poor. Subprime, near prime, prime, and super prime. And look at the range of, and they're showing that actually the super prime have risen faster than the deep and subprime. Look at how much higher these rates were for having a bad credit score. This is a way, so we're talking almost 15% for deep subprime

versus 5% for super prime. Like, you know how they do the FICO score, right? I think it's so I looked this up. third is like your payment history. So you're, you got docked already because you forgot to make a payment. So your credit score is going to go down. Uh, the amount owed is another one. Wait, is that for real? Look at, look at it. One one late payment? No, I'm, it's not good. It would have to be a series of them. Amount owed is one third. Length of credit history is like 15%. So get those credit cards right away and pay them off. New accounts opened is 10% and then types of credit use is 10%.

That's how they determine your FICO score. So having a good credit score, remember you got me the t-shirt, what did it say? Like, not to brag, I have a great credit score or something. I did? You bought me a t-shirt. You had me, like, a printed t-shirt made. I feel like you've never, I've never seen it. You ever wear it? A few years ago. Oh, you got me like an Excel. Uh, so I think I use it as a towel. Which, someone pointed out, large is in the middle, right? You didn't want to be large because you thought you're on the upper end. Oh, yeah. Yeah. Somebody had a great take. They emailed us and said, Michael, small, medium, large, extra large, extra, extra large.

Larges smack dab in the middle. Don't discount the number of XXL people out there. It's true. But I still say large is average, which I guess that's the point he's making. Here's an anecdote about how rates are finally starting to have an impact. Christine Johnson, a marketing manager in Chicago has been looking with her family of four for a house of the backyard. They wanted to put down 20% on a million dollar home and take out a jumbo loan,

but they could get a rate lower. they put 30% down and got a conforming mortgage, and that would be like a more of a government-backed loan. So they're considering putting the extra cash down. And she says, depending on where the interest rates are, will dictate what we're doing. Like, it's certainly changing behaviors for people. And that sort of thing, like paying down a loan faster or trying to buy down a higher, like, that's the kind of thing that eventually feeds into consumption, even if it's on the edges these days. Slowly but surely, that seeps its way into the economy, right?

Don't coming in with the knowledge drop on late payments. A late payment can drop your credit score by as much as 180 points. However, lenders typically report late payments to the credit bureau once you're 30 days past due. So I think I'm in the clear. So you're not delinquent yet. Not delinquent. I'm just bald.

You're not showing up the next Fed's court. This blew my face. So getting back to like the car stuff, car dealership guy, reminder that some people are paying mortgages for fancy cars. These are real active car leases in five states. So an Accra, NSX, beautiful car. Not quite a Honda Accord, but still nice. A 36-month lease, $5,600 a month.

Wait, for an Accura? An NSX. What's that? It's their sports car. It used to be really nice. It was around in the 90s, and they discontinued it and brought it back. Very sweet-looking ride. I'm not a car guy at all.

Who's bragging about an Acura? That's all I'm saying. It's very nice. If you're going to do it, get a Ferrari or something. Don't get an Accura. That's all I'm saying. A Mercedes G63 AMG, 5,100. A Porsche 9-11, 500.

A Land Rover. Oh, a Range Rover. 4,400. Oh, my God. I know that these are really rich people, but would you rather have a Porsche 9-11 or a vacation home on the ocean or something? This is like the difference here.

It's unbelievable. It's so much money. I'm going to assume that these people, I'm going to assume they can afford it. You're not just like casually getting a $5,000 car. And honestly, if you have that much money, you know, what's literally what's a difference. But that being said, it's just a staggering amount of money. So congrats to the rich people. That's awesome.

Oh, I had a thought that's like, I don't really believe, but I just wanted to talk it out loud. My train ticket was, well, let's say. I don't do monthlies anymore. Let's see how much a monthly is. I think my monthly train ticket used to be like $250. And that's used as many times as you want to get into the city. Let's just assume that a monthly ticket is $300. That's not an insignificant amount of money.

And so when prices started... It used to be enough for a car payment. When car prices started to go crazy, I think people were able to rationalize, at least Long Island commuters or New York commuters. Wait, I'm not paying $300 for my train ticket. ticket anymore. So if I'm paying an extra 150 bucks from my car, it's still, you know, I'm still still in the black. I could see that. So if people are working from home, they probably also

need an automobile more too. Yeah. So I think that was easy to rationalize. Yeah. It is surprising to me if you look at the used car prices are coming down, but they're still way, way elevated above 2019 levels. Another tweet from car dealership guy, severe delinquency for auto loans is the highest since at least 2006, yet the job market is strong, so basically no one has any idea what's going on. So this is a percent of asset, what's ABS, asset back securities, auto-based back security, whatever, something like that, 60 days plus delinquent. And it's over 5%, which is, in fact, the highest it's been since at least 2009, or at least

in 2006, he says. Not surprising. Could there be stress in this market without a broad read-through to the economy? And I'm going to say yes. Just think about how insane car prices were. Do you think in the next downturn, whenever we get a recession, there's going to be like wonderful opportunities to buy like used cars and used boats from people that went way over their skis and spent too much money and just a fire sale price.

I got to get rid of this stuff? Is that going to be a possibility? Yes. I think so too. I think there's a lot of people who probably overstepped their spending in recent years and are going to have to cut back and sell stuff. All right. Jeremy Schwartz has a take. All right. Closing my week pondering thoughts, which he was great on compounded friends last

week with Eric Belchunis. That's a good one to combo there as far as ETF and market knowledge. Closing my week pondering thoughts from an AI professor at Wharton who thinks productivity acceleration from AI will take 10-year bond yields up to 6%. Why would productivity gains take bond yields so much higher? Because growth is going to be so much higher? I guess so, yeah. Don't you think the hype cycles happen so? much quicker these days, too, where after a while, like, the hype cycles happen and, like, this is what we're going to have, and this is what we're going to have, and then we're going to have

this. And that stuff doesn't happen. It's kind of like, just kind of, you know, tap drumming your fingers and, like, waiting for this stuff that, like, I'm not saying, like, the AI stuff is not going to happen, but it's kind of like the hype cycle digest this stuff so fast, like this is what's really going to happen, and then you're going to have this, and the technology is going to be so great, and then you have this waiting period until it actually happens, or for some other stuff like crypto, it actually doesn't happen. I think we move faster. Yeah, we pull forward the hipes.

Okay, here's another rates thing. If you would have told me this, even 12 months ago, hey, inflation is down to 3% now. Inflation, it fell for 12 months in a row. Inflation is three. What do you think mortgage rates are going to be? There's not a single scenario where I've said, oh, mortgage rates are to 7.5%. Right. That would have broken my brain.

It makes no sense, right? Mortgage rates are not at their highs, 7.5%. The last time the 10 year was this level. The 10-year in October 2007 was 4.5%. You know what the mortgage rate was then, 30-year? Say that one more time? So the 10-year now is at the same level as it was in October 2007. What was the 30-year mortgage rate back then?

Oh. Five and six-eighths. Well, it was six and a quarter. Okay. For using your mortgage terms. So the spreads are still so much higher today, which, again, I think the Fed kind of broke the mortgage market when they bottles mortgage-back bonds.

Now, that's the function of the Fed, right, buying less bonds than they used to. That's why spreads are wider. I think that's part of it. Again, the fact that you're not getting any prepayments because people aren't refinancing now. So it's, I don't think the Fed ever thought through raising rates as fast as they did what the unintended consequences would be. Now, they could, they could easily bring that spread down if they wanted to. Apparently, they don't, they don't want to. But just the 7.5% mortgage rates with 3% inflation.

It's too high. It's way too high. And, yeah, I don't know how the house. market doesn't, we talked a couple months ago, like, is the correction over? Like, if this, if this stays higher for longer, like, housing prices have to fall again. They have to. I know people keep saying, well, it's easy to see because of the supply and demand and that was, like, no one, I'm sorry, eventually this has to impact the housing price market. It has to, right? Maybe nothing has to happen, but I don't know. Well, there was, there was an article,

I mean, yeah, listen, it's hard to make the argument that it wouldn't, right? Like, I don't want to say that it's not going to impact the housing market. But there's an article in Forbes showing that like 40% of buyers get help from a family member. I had that in here. Yeah. For the down payment. 38% of recent home buyers under the age of 30 use a cash gift from a family member or inheritance to afford their down payment. I talked about inheritance as the compound recently. And this is the time where if I was a young person, I'd be hitting up mom and dad and being like, listen, I don't want it when I'm 50 or 60. Help me now with a down payment. I'm sure a lot of parents are receptive if you have the means. Yes, you'd have to be. A couple interesting facts that show like if housing prices fall,

you know, there's plenty of cushion. Bank of America, 2.1% of mortgage properties have negative equity, which is lower, it's down from 25% in 2011, which is a crazy high number. Only 0.88% of home equity is being used in Helox currently, the lowest level since 1988. It peaked at almost seven percent a few years ago. So there's plenty of room to maneuver here for people who own houses already. Yeah. Michael McDonough made this great chart, a monthly mortgage payment using the median existing home price, assuming that you put down 20 percent. This was $577 at its low in 2011. In 2019 or so, I'm just eyeballing this. It looks like it eclips $1,000. Again, this is a monthly mortgage payment. Now it's $2,000. Sorry. Now it's $2,300.

He also broke down your first payment, how much goes to principal, how much goes to interest. And look at how much more goes to interest now than principal. This is, this is why, like, if you buy a home right now in hopes of flipping it in a couple years, it's like a starter home, you're going to build zero equity if prices don't go anywhere because the majority of your money is going to interest payments now. Right. So, Yeah, it's a great point. So pre-pandemic, it was like $1,000. It's $2,300 now.

What? Yeah. That is insane. Okay. We got a ton of emails. Oh, damn it, I meant to do, I meant to throw some charts here. Oh, well. We got a ton of emails.

I'm not sure why this triggered such a response, but the KFC versus Taco Bell pizza hut thing, KFC is massive for whatever reason. massive. It's the largest fast food chain in China. Yeah, it sounds like Asia has a really big KFC presence. I don't know. I guess maybe just because it's so different, right, than most of the food they have there, that surprises me. Someone says somehow the colonel took over China better than Mickey D's did.

All right. Great quarter, guys. This is a great chart from Alpha Sense. I don't know who FTA is. I'm sorry. was FTAV? Anyway, neither here nor there. The company called transcripts containing the phrase double-click. This is a bubble. Wait, what am I missing here? What does double-click mean? Let's, let me double-click on that. Oh, geez. So if you did this for podcasts, it would be, let's unpack this a little bit. Yeah. That would be the podcast version of this chart. Now, you know, Josh actually said double-click last week. I almost said something, but I didn't want to interrupt

the flow. Okay. Interesting. I'm surprised. I didn't know that was even a phrase. Oh, really? Do you not, do you even conference call? I mean, I don't, I guess I must miss. I don't, I've never used that phrase in my life. Let's double click on this. That sounds like a very AOL 1990s thing to say, no? Well, obviously, you're not going to use it in your life. I mean, you're not going to tell you why if let's double click on this. That'd be very weird. Try it. See what happens. All right. Carl continued to tweet it from Macy's. We experienced an increased rate of delinquencies, the speed at which the increase occurred for us in the broader credit card industry since our first quarter earnings call was fast on

and then planned. We are working closely with our bank or bank partner city, whatever, to mitigate rising bed. That's okay. If you just read that and you took my face value, you'd say, whoa, uh-oh, uh-oh, we're in trouble here, we in trouble here? Or maybe Macy's just stinks. I think their same star sales were down. People are going to be blowing up their credit card scores or their credit scores.

8% year over year or something like that. So Jeff Mackay had a great thread. Macy's is hard to take seriously. hikes shrink allowance after physical account, which raises a lot of questions. Looking for down 7% comms takes credit card delinquencies up. This is what garbage retail accountant looks like. Anyway, he has a whole threat on it. So glad that we have people like that.

Setting the record straight on some shenanigans. You're bad company. Don't blame macro. Don't blame micro. Have you a bad department store in recent years? Yes. A depressing place that can't believe that we had to shop like that before. the internet. The last time I was in a department store I called you. I don't know why. I get

anxiety shopping. I'm not sure why. It's so much easier to shop online these days. Like when I was younger, this is another like walking to hill, walking up the hill both ways to school kind of thing for me as a middle age person. Before school would start, my mom would take me to Macy's or what's called Marshalls or whatever back in the day. And by all my clothes. Macy's was not called Marshalls. That's a separate store. Marshall Fields. Oh. The original was Marshall Fields. You know that if you're a Midwest guy, yeah. So now I shop on Instagram. By the way, what's this, what's this brand called?

Is this homage, homage, homage? Homage. There's so many ways to say it. Amage? Yes. This is where I shop. You were up to the hills in Instagram shirts. I am out to the hilt.

Oh, speaking of Instagram. The other day, oh, we were talking about like, Oh, Alexa. Here's what I use Alexa for. Alexa, set a timer for 10 minutes when I'm cooking the kids white mac and cheese. That's what I use it for. That is not bad. Or Alexa, play whatever.

See, she's talking right now. I guess she's not connected to the internet. See, I don't even use it upstairs. Here's where voice, and I was talking about how Amazon burned billions of dollars on voice. Here's where voice excels. For the companies. For the companies. Because they listen in it on you.

Dude. I used to think that was nonsense. Like, oh, like 90% of the time, and I do still believe this, like 90% of the time when people think they're being spied on, they just don't remember that like either they search for something

or somebody or their spouse search for something and it's on their record. But we've got, we had like a fruit fly infestation out of nowhere. They just came hard and heavy. And I saw an ad pop up my Instagram. And as I was telling my neighbor about,

it. And then it came back inside, I'm scrolling through it. I'm like, what the, what? So I asked Robert, I said, hey, did you buy any fruit fly deterrent? Did he search? She's like, no, why? So I told her. Anyway, listen, I bought it and it works. So thank you for spying on me. But nevertheless, how would you explain that? The funny thing is, I don't even get mad about it anymore. It's like, eh, whatever. This is the place we're okay. No, I didn't, they're listening. Okay. Maybe they hear some embarrassing things, but thank you for serving up that fruit fly thing. or I guess an alternate explanation that is probably more reasonable is other people in my neighborhood are experiencing the same thing and are buying fruit fly stuff so they served it up

like on a local thing. Maybe Alexa detected the fruit flies in her house for you. You didn't use your electric zapper on them, the bug zapper. Oh, I've been zapping to high smithereens, but there's too many. The noise is so, the noise is so, yeah, it's a great noise. I love it. All right, let's get rid of this. What's this, oh, this credit card thing.

Okay. I got a credit card thing in the mail from City the other day. It's like City Simplicity card. Zero percent intro APR for 18 months, 21% after that, but 18 months on balance transfers to or purchases for me, how are these credit cards able to still roll out 0% credit cards? I look, there's no other, so my finance brain says, why wouldn't I put every single one of my purchases on this credit card and just put all the cash into five or six percent T-bills for 18 months? And that's way higher. than I could get from a credit card reward. I feel like there's got to be some fine print in here that you missed.

18 months, 0% intro. I mean, I don't know what they, maybe they would give you a low limit on it or something, but that seems like, oh yeah, yeah, you know what that's probably what it is. Yeah, you probably have a $1,000 limit. And I mean, there's no other, there's no other rewards you get with it.

But that, like, in a high rate environment, that 0% credit car, like, if you're thinking about doing a renovation or something, why wouldn't you use this kind of thing for a while at least before tapping into your home equity or whatever it's, whatever you're thinking, right? that? Well, because I'm saying the cap is probably a thousand bucks. Okay. Maybe it has to be it. That's the only thing I can think of. Ben, I saw a chart from Fidelity. Whoa, whoa, whoa.

You can't post demographic charts. Sorry. Well, I wanted to serve this up to be a good co-host and see you if you get any thoughts. Okay. The percentage of population older than 55. It's 27% in the United States, 30% of Canada, 36% in Germany, 39% in Japan. expected to rise. A lot of people keep talking about this, like it's going to be the end of the world, economically speaking, and these places are in trouble. My default is we'll figure it out. Well, guess what? What about when 60 is the new 40? That's true. People are just, people are living longer. I think that, and obviously the baby boomer population is a big part of it, but I don't put a lot of credence in here, as you know. All right, we got, we got an emailer, an email from a listener in response to Ben's post about like not needing as much as you might think in retirement.

Basically, people who have a lot of money don't end up spending at all. They rarely do or come close to it. So I did a follow-up piece on this, but the big takeaway that was pretty eye-opening is like, listen, I'm almost 60 years old. Everything that I wanted to do with money for the most part, I've done. Been there, done that. I took trips. I had a nice car.

I bought a nice watch, whatever. That stuff doesn't move the emotional needle at 60, the same way it does when you're, say, 40. And so I think people severely underestimate that now it's a balancing act. But I think in large part, this is why people just don't spend the way that they do when they're 70, 80. I don't know, it sounds obvious to me, but maybe it's not obvious. Your conclusion of, so spend some more when you're young and you can enjoy it or want to enjoy it, because I agree, when you get to that age and you're kind of set in your ways, you probably

there's certain things you just don't want to spend money on anymore. And I actually heard from one frugal millionaire one time who told me, like, he built a huge genetic and he couldn't spend it and he didn't want to and he's giving some away but he said I gave myself certain rules like if I'm traveling I'm always going to pay for first class he's like I cut back on so many other things but if I'm traveling I'm going to so I think find little conveniences like that to treat yourself on I think helps but there was another one who said this guy had he emailed us he said he's a four million dollar net worth he says I see so many things about how much money you'll need in retirement I have no idea how to answer the question I don't

expect to so we keep saving and saving because digesting what life will be like without kids' expenses, limited to no mortgage and lots of free time. I just want and need more. If that results in my kids inheriting a lot of money, so be it, I just think the retirement discussion has so many variables. People don't like to admit they don't have a clue about, and that's where a lot of the concern around money comes from. So I think part of it is just there's so many unknowns out there, and people just want

the safety net. And they can't get rid of the safety. That's a personality thing. I totally get that. But like, once you get to a certain age, you're like, I'm not going to spend that much money, I'd rather just, you know, leave it to my grandkids. True. And that's fine.

If you want to, like, yeah, give it away to charity or give it to your grandkids or whatever. But I think you should also, like, enjoy yourself a little. Like, I think it's okay. If you've spent your whole life working and enslaving away and saving money over time, like, find little ways to treat yourself. Don't you think that way, at least speaking for myself. I am at the age where I think I am, this is like peak money enjoyment for me. Yes.

Where I'm able to do things with money that I wasn't when I was younger. that at some point will not be special because that's how human beings work, right? The things that were once a luxury become normal or just the excitement wears off. So I think I'm in like, I'm, I'm peaking right now. And hopefully my peak lasts many years. But I know, I know it won't always be this way. That's also why I've been okay to pull forward some expenses that like that with my kids now so I can enjoy this stuff with them now because I know in the future they're going to be too

busy or not want to hang out with me and my wife. And you're going to be, you're going to be older and growing up here. So I'm okay pulling forward some of those expenses and not thinking through like, oh, if I would have just saved this money, what would it be worth in 30 years? That's why being a parent has led me to pull forward a lot of that stuff. One more feedback thing. We got a lot of feedback on dishwashers, too. Regarding dishwashers, they actually do work without rinsing, but you can't use pods. I highly encourage watching this video, the host breaks down a dishwasher, so that's how it works.

TLDR, dishwashers have a pre-wash mode before the wash, and when using a pod, there isn't soap for the pre-wash. You need soap in a made location. Wait, lost mate. There's a wash before the wash? Pre-washed. So you need, like, the dish deterred. He says used powder detergent, and the dishwasher works amazingly well. So those pods are, maybe it makes your life easier, but they don't work as good.

So it drives me nuts when Robin will put, like, something with sauce in the sink, and she will, she just, she refuses to rinse. How many times I say, just please rinse? Because in the morning, I'm like scraping it off, you know? But do you ever get the pods leave like half the pods still in the thing when it's done? I have a pretty high high hit rate. But I think I'm willing to go the extra mile and do this pre-winterance or whatever because it's annoying. I'd rather, listen, if I don't have to win this, this is fantastic.

But in the past, you would pour the powder in and now it's the pod. So maybe you got to go back to the poor stuff. Yeah. I'll try it out. I'll try it out. All right, recommendations. Ben, what do you got? All right.

We watched The Whale on Paramount Plus because there's just like nothing else to watch right now. And I think we're going to be in like a bare market for content for a while. But there's everything to watch. Don't we just talk about this? Yes, but I'm saying new stuff. Have you, all right, go ahead. So we watched The Whale with Brendan Frazier. And this is a Darren Arnavsky movie.

And so this is a film and not a not a movie. This is the kind of movie they make because they want someone to get an Oscar. Like, and his performance was great. But I didn't say anything the whole movie. And my wife at the end goes, I know you didn't like it. And I said, I think she liked it more than me. And I said, what do you, how do you, why do you say that? She said, you don't like sad movies.

And this was a sad movie. And it's the kind of movie that is depressing and it gets more depressing. And another sad thing happens. And it's kind of like, seriously. I love sad movies. Really? Yeah. A big emotion guy.

And I like this movie a lot. You liked the whale. I did. When did you watch it? On an airplane. You like, okay. I just, I can't wrap my head. It was, it was well, it was a, it was a,

well-done movie. I just, not for me. Okay. I'm surprised, I was going to say, you should not watch this. No,

I liked it. Okay. Your, your movie taste is just, it's like a, like a roll of the dice for me. Like, I can ever tell something,

something you're like. You know what I spent the last week watching? And like four times, Robb, it's like, are you, you really doing this? I went down the,

the garbage fish rabbit hole. I was talking about, they were talking about the podcast. So I watched like, I didn't watch open water or 47 meters, but I watched. But I watched 47 meters the uncaged by accident. This is a sequel.

I thought I was watching the original. I watched the sequel. I watched the Reef. I watched the one with Blake Lively. The Blake Lively one is not bad. What was that called? The Reef. They're all, I don't know.

They're all blending together. That was a good one. Okay, I've never heard of any of these movies. But the shallows. Okay, yeah, that was it. Yeah. I can't believe you liked the whale. I did like the whale.

Although I don't, I feel like I don't love Darren Aronofsky movies. What else did he do? He did the Black Swan one. Yeah, I like that one. Oh, see, it says films. Yeah, he's a film guy. Oh, The Wrestler. Great movie.

Recruit for a Dream. Mother, I did not watch. I have no interest in that. I didn't like Pye. How about that? I actually never saw that one. All right. What are you got?

I watched two things on top of all the fish movies. The Johnny Man Zeldock was pretty good. I mean, it was quick, but. And he had a quote there that I believe very strongly is true. He said, when I got everything that I wanted, it was the most empty I felt inside. And I know people refuse to believe this, but this seems to be like a common thing. If you are very driven for money, fame, whatever, whatever your purposes that you're obsessed with, once you get it, like the chase is the fun part. Yeah.

And then once you get what you want and it's not everything that you expect it, it's like a massive, massive psychological blow. I know you're not a big college sports guy, but he was an amazing college quarterback. And I'm not surprised he was a bus in the NFL. I don't know why I watched this one, but I watched the Johnny Depp Amber Hurd doc. What's that on? Netflix.

Okay. I was saying this to Josh. You know, it's incredible about Netflix. You don't, the shows that are top 10, they just pop up. You don't like see advertisements.

Yeah, there's no marketing. The advertising is on the platform itself. That's it. It's genius. They just, they advertise on the platform. And it works.

So I watch. They should probably add more top 10 lists. Like, they have the top 10 movies and TV shows. But if they added more top 10 lists, it would drive more. They could drive more stuff if they wanted, I feel like. So the biggest takeaway for me from watching that is just how vile social media is. And there's a strong opinion. Basically, everyone took Johnny Deppside because he's famous, I guess, and other factors.

Which is kind of surprising because he's not a great guy from all accounts. No. There were parts where she admittedly did not come across well, but it was so one-sided, so-one-sided. And the social media, like, just people spending their entire lives following this and making money off the... It was just, like, really gross to watch and not great. You remember in my Don't Fall For it, I wrote about Hunter S. Thompson and Johnny Depp and how Johnny Depp blew through all was money, and he was spending $3 million a month on wine. wild pretty good

wild not bad guy likes to party um okay see he would drive the actor NSX animal spirits pod at gmelt dot com

we'll see you next time