Animal Spirits Podcast - Small Caps Are Back (EP. 448)

Episode Date: January 21, 2026

On episode 448 of Animal Spirits, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ discuss geopolitical risk in the markets, rising bond yields, why small caps are breaking out, running the economy hot, household balance sheets are in good shape, the end of money, the great real estate wealth transfer, the bottom 50% wealth gains, Netflix movies and more. This episode is sponsored by YCharts and ClearBridge Investments. To download YCharts’ Top 10 Visuals click here: https://go.ycharts.com/the-top-10-visuals-for-clients-and-prospects?utm_source=Animal_Spirits&utm_medium=Original_Research&utm_campaign=Top_10_Visuals_Deck&utm_content=Podcast And start your free YCharts trial through Animal Spirits (new customers only) at: https://go.ycharts.com/animal-spirits International and emerging market stocks outperformed the U.S. in 2025. At ClearBridge, we believe this momentum can continue. Find out more at  https://www.clearbridge.com/ Sign up for The Compound newsletter and never miss out: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠thecompoundnews.com/subscribe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find complete show notes on our blogs: Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Ben, how was your weekend? Did you, you avoided that nasty car mashup on the highway? Oh, yeah, 100 cars. My kids kept wanting to see pictures of it. Where was it? Was it near you or other side of the state or what? 20 minutes away, probably. Oh, oh. Oh, yeah. No, highway we take all the time. Yes. Blizzard conditions in Michigan. Kids at a snow day today. What a great feeling, right? Don't set your alarms, kids. We're going to see if it's a snow day.

They wake up, and it's kind of like Christmas morning. You know, they wake up, realize it's a snow day. My son was all dressed and ready for school. And we told him it was a snow day, and he went and took all his clothes off to put his PJs back on. It's one of the best feelings as a child. So pumped.

That's like one of the good things about having this kind of weather. Legs up, Jerry Springer. What could be better? Yes. Yes, exactly. All right. It is Tuesday morning, 908. 22 minutes away from the opening bell, which you won't hear on my computer.

And a little bit of volatility. Futures are down. Gold is surging. Vix is up to 20. And the reason, the source of the indigestion is the president's desire to annex. Am I using that word properly? I don't know. I've been a stretch.

Denmark. Well, you're adding, annexing is to like add a, yeah, kind of. Yeah, right, okay. So the president is trying to take Denmark. I'm sorry, green land from Denmark. Apparently there is strategic interest for us. I don't know. Being closer to Europe, we could rule with the stronger fist and there's some rare earths

and minerals and I don't know. You're forgetting what there's the green in the land there? Very green. It's a lot of land. Nonsensical, if he asked me. markets don't like it. And the reason why they're responding, the way they are is because

European leaders are saying, what are you doing? You're not just taking Greenland. And actually, you know what? Greenland is icy. Did you learn nothing from Mighty Ducks too? And Iceland is green. Yeah, it's the opposite.

But Iceland does have ice too, though, right? Okay. Well, anyway, for the Euro. European countries that are standing in the president's way, we're talking about a 10% tariff, and that's going to be increasing to 25% on June 1st. So, so wait. So we're trying, he's trying to purchase a country. Okay.

I guess that's what, that's what he's doing. Yeah. Listen, give us Greenland. We're going to tax our own citizens. Take that. I don't know if this means anything. It probably doesn't, but I want to read you something that I'm reading this book or listening to this book.

It's an audible. I don't know if it's necessarily a recommendation for you. It's called 1913, in search of the world before the Great War. Can remember who recommended it, someone on Twitter. And it basically just looks at what the world is like heading into World War I. And looking back with hindsight, you think, man, it was so obvious that this was going to happen. Like, all these countries were like gearing up and they just wanted to fight. But this book kind of takes a contrarian take of if you look at what was actually going on in these

cities, you wouldn't have ever thought this was going to happen. It wasn't as clear cut as you thought. And it was just like the whole point of the book is like the world order shifted over the next 30 years in ways that weren't possibly imaginable in 1913. He goes through all the different cities. What was happening in London and Rome and Berlin and like the stuff you hear, it was like you could travel as a German citizen to the UK without a passport. And it was like open borders and it was kind of like not what you'd think because the world got more insular after that, obviously. So listen to this. It's kind of long, but I think it's worth a read. Oh, yeah, my attention. A European could survey the world in 1913 as the Greek gods might

have surveyed it from the snowy heights of Mount Olympus, themselves above the teeming earth below. To be a European from this perspective was to inhabit the highest stage of human development. Past civilizations might have built great cities, invented algebra, or discovered gunpowder, but none could compare to the material and technological culture to which Europe had given rise, made manifest in the continent's unprecedented wealth and power. To be a European, a European man in particular, was to see oneself at the center of the universe from which all distance was measured

and against all clocks were set. Replace the date, replace the name, and you're talking about the U.S. today. Okay? It was just interesting, though, to read. And it always seems like the world order today is set and you kind of had a recency bias of, of course the U.S. is going to be the leader forever, right?

And I'm still wildly bullish on the U.S. over the long term because I think we have tons of tons of built-in advantages and such. But I just don't think that this, I think we just can't take for granted the fact that we have the position of power we do. And I don't think we should abuse that power. Agreed. And it's funny because people have been saying like the fall of Roman Empire for U.S. for decades now, but it already happened in Europe. Europe is the example of a fallen empire. And I feel like people don't ever talk about it. Like, that was the Roman Empire that fell. Yeah, I'm not worried about American exceptionalism or our advantages. I think these things move at a glacial speed.

And also, it's not to dismiss the position of power and privilege that we have and treating our trade partners and our allies this way and leading, abusing the power. It's not good. But you know, what the, what do you call it? The sort of counterbalance there is the financial markets. like if things get taken too far and the bond market yields bond market starts selling off and yields spike higher

and the stock market sells off that's the transistor there like that's the thing that's going to don't you think that's the one that's what saved us from having those tariffs that could have been so bad in April and people say well it was a negotiating employee or whatever but the financial markets I still think are the arbiter of

like putting a ceiling on some of these things yeah how did you clip that section because I've, I've, like, Google, like, how do you, I'm listening to an audiobook, it would be cool if I could, like, read alongside of it or clips. How did, how do you do that? Yeah, so you hit the clip button in there. It's like 30 seconds long. But honestly, after this, I liked it so much. I, I bought the Kindle, too. There should be a, you should get a deal on the Kindle. Right. If you buy the Audible, right? So when I'm listening to an earnings call,

it's very nice to be able to listen and also see the text while you're listening. It's like subtitles. And if your eyes scroll ahead and you're bored, whatever, you just jump to the next part. Not that I don't want to do it with a book, but... Amazon, give us a call. All right, so maybe these things are one and the same, like what matters more right now. And it's kind of funny to say, like, the markets are like having volatility because we just hit an all-time high last week on Friday, I think.

So it's like, okay, we have one, whatever, one down day. So was it Greenlander bond yield? And maybe these things are interconnected. But I saw a bunch of people posting the Japan yields this morning. Here's one. Japan's 30-year yields rocketed 26 basis points higher toward 4%. And you can see in this chart, right, Japan bond yields look like they're going vertical. It looks like a chart of gold or Bitcoin or something crazy that's going up.

Now, here's my question as a macro tourist. Okay? For 30 to 40 years, Japan's bond yields were on the floor. Okay? Couldn't go anywhere. They were really, really low. and their economy stagnated. So why isn't this actually a good thing?

Because the yield curve is steepening. I mean, listen, this is a total tourist question. And obviously the reason for the yields, Matt, but they're saying, hey, listen, they're going to, their yields are soaring because they're going to cut taxes. Isn't this like, they're trying to grow the Japanese economy. Isn't this a positive sign? Two things.

I have no idea what's happening in Japan. Yeah, I'm a total macro tourist, admitted. So I couldn't even begin to tell you. But like the opposite of bad is not good always. Right? Because this is another extreme. So if shorting Japanese bonds used to be called the Widowmaker because surely they had to go up and they just didn't.

Yes. But all right, zero is bad, but vertical is not good either. I mean, this is not like a slow and steady creep up. Like they're going straight up. And when government borrowing costs rise like this, I don't know. It's not, there's not a good thing. like government bond yield going vertical is never good. That's fair.

The opposite of good is not bad. I have to think about that one a little longer, but I think you're kind of right, maybe, 40% percent right? Okay, so Kevin Gordon posted a picture of the U.S. 30-year treasury and is not going vertical. It's going up. But this is the kind of thing where I'm going to be like the Titanic captain going down with the ship on this.

If bond yields in the U.S. go up and down and up and down. I feel like they've, every time they go up, people really worry something wrong is going to happen. And I'm always poo-pooing this because I think unless, like, they really spike in a meaningful way, I'm not going to worry about them just going in some range-bound pattern. I'm going to be the last person to worry about this. Yeah, I mean, I would mostly agree with you. But it does seem like every time they get up here, at least in the past two years, they've come back down. Yes. The, like, would you, what if, what if they shoot past 5%? Let's just imagine that there's technical analysis on yields. And they're like 5.5%

6%. The weird part about it is that inflation keeps falling. So bond yields are rising while inflation is falling. So I guess what that would tell you is it's investor positioning that people are selling treasuries. Well, I think it's just, I think it's political instability. That's what I mean. And I think that's obviously why gold is gaping up higher this morning as they're all

precious metals. I just keep wondering, like, why isn't the dollar responding? Like, why aren't they selling dollars? If all the hemming and hauling is over political... The two true currencies aren't moving. Bitcoin not moving either. Well, Bitcoin's going down. I know you're kidding, but...

No, but I still think the fact that we're seeing this political upheaval in gold and silver are the ones reacting and not Bitcoin is an interesting development. Very interesting in my opinion. I wouldn't have guessed this. If you would have told me this a couple years ago, hey, this is all the stuff that's going to happen geopolitically, which one is going to spike gold, silver, or Bitcoin? I would have said probably Bitcoin, and I would have been wrong. Don't you think this is just another one of the narrative violations of Bitcoin that this was, this was supposed to be the anti-system play, and it's not acting like that. No, it's totally, it's risk on and risk off, at least for the most part. Maybe it'll, I mean, could change one day, but has not yet.

You're right. But hey, listen, in six months, this Greenland stuff that, like, is it going to matter? Probably not. I mean, I hope not. I'm not taking this like threat seriously. Maybe I should. I don't know. The idea of just taking another country seems completely preposterous.

Yeah. That's why we're just taking countries. Like for what? I'm out of loss. It's another one of these things. I was watching the Knicks. I went to my family in the Knicks game yesterday. And the Knicks are just completely unraveling.

And it's one of those things that's just so confoundy. I don't even know where to begin. Like my friend and I were texting. We're at a loss. don't even know what to say, what happened. The wheels fell off so fast. I'm genuinely, like, I don't even know what to say. What's happening?

And I feel sort of that way with what we're doing now with Greenland. Like, is this... The piston sucked all your energy out. Admittedly, I'm not watching NBA regular season basketball yet. There's too much football on for me to care about. The next thing is not the point, but I'm just the point is like, I don't even know what to say. It's just deep breath in, deep breath out. Okay.

This is a good chart from Apollo. So we've obviously looked at concentration in a million different ways, right? I've never seen it, though, done this way. So the chart that they made is the combined weight, because we've had periods of time where there has been concentration. The last time we saw extreme concentration, like just two stocks, was it was at AT&T and in General Electric or AT&T and General Motors? I can't remember.

General Motors, yeah. AT&T was like 12% of the total or something. This is like the 30s. And General Motors was like 10. It was a high number for those two, yes. So we've seen concentration before, but we've never seen it like this, where he's looking at the combined weight of stocks with a 3% or more weight in the S&P 500. The combined weight of weight.

Okay. Right. Okay, I got it. So now this only goes back to 95. And I'm guessing because if you take it back farther, it's less right. Radical. So this is Nvidia, Apple, Microsoft, Amazon, Google, probably. Probably those five, I would guess.

Let's see. Yeah, those are the ones with 3% weight or above. Those five. So those 5 are 30% of the market. And interestingly, we've been doing a lot of, Matt's been doing a lot of chart work on this. The Mag 7 versus the 493, like the ratio, it's breaking down, meaning the Magse 7 have been underperforming the rest of the market. on a relative basis, which I guess like tell me in six months, I'll tell you in six months,

whether that was good or bad. But I like the idea of passing the baton, giving some other other stocks, chance. I've been floating this theory out to you for the past few weeks a little bit are small caps of 26, the international stocks of 2025. So this is from the Wall Street Journal. Small cap stocks finished week at records. Friday marked the 11th straight session of the Russell 2000 beating the S&P 500. The Russell is up a lot more than the S&P and the NASDAQ this year. That's weird. 11 straight sessions.

It's a lot, right? I'm going to ask Matt to chart this. So they're talking about the, like you said, the rotation trade. And it says, buoyed by robust GDP growth and strong corporate earnings, investors have been shifting from mega cap tech stocks in favor of stocks poised to benefit from economic reacceleration, such as industrials, energy companies, and small caps. And this is the kind of thing that in six months, why the geopolitics stuff doesn't matter. If earnings are still going gangbusters and GDP growth is strong, no one cares about geopolitics, not in the markets.

Okay? Look at the Russell 2000 chart. This thing is taken off, right? And if you look since the bottom, this is another surprise because it was surprising the international stocks outperformed last year in the big AI trade. From the bottom of Liberation Day, which is April 8th. Okay. The Russell 2000 is now beating the NASAC 100. and beating the S&P 500.

It's up 53% from the bottom in April. More than large cap stocks, which, again, I think is surprising given the fact that this is an AI-only market and there's so much concentration and they're spending all the money and they're such a big part of GDP. I think this would surprise some people.

Yeah, me too. Here's another going from Apollo. Hang on, though. The thing is, I think one of the reasons you hope small-cap stocks are going to outperform is because rates are going to fall. So I guess bond yields rising could be the thing that derails this.

Because that was the hope, right? That small caps got hurt way more because of rising rates because they borrowed those higher rates and the big cap, big cap didn't have to worry about it because they already locked in lower rates before. Yeah, but the long end of the curve

is really what's steeping. Like, they're not borrowing it for 30 years, so I think they're less impacted by that. True. The year of small caps, Mark it down. Yeah. I'm bullish on small caps.

The Russell 2000, I think 60% of the index is negative earnings. Is that about right? It's a large number. So Apollo breaks down the performance since, I guess, since Liberation Day lows or April 2025. I'm not sure why they use that date, not even the lows, whatever. Companies with negative earnings per share have beaten the crap out of companies with positive earnings per share in the index.

Which is funny because that's the thing that, because if this really, because people always throw this stat out, right, about the negative earnings. Like if you wanted to just own the higher quality companies or own like a value ETF, right? Or a high quality. No, the S&P 600. Yeah, or the 600. It's more high quality.

It takes out those negative earners. And you would have been wrong, I guess. So even though the Russell has performed well since Liberation Day lows, it's on to perform dramatically, dramatically for the. the past couple of years. So since the peak in November 2021, it's only up 16%. So I look at this as a positive. So it's gone like four years of sideways to nowhere. So since the November 21 peak, the S&P is up 57%. The Russell is only up 16%, which is, I don't know, what does that compound

at 3% a year? It's nothing. It's done terribly. So I agree with you that this could easily be the beginning of a bigger move. It's like why did international stock top perform so much last year? Part of it was a dollar and part of it was they were so beaten down. It didn't take much good news for them to come back. So look at this next chart that check that Sean made. All right. So this is the annual returns for the S&P versus the Russell 2000.

And the last time the Russell 2000 outperformed was 2020. by a cent, I mean, by like barely anything, it's gotten destroyed almost every other year since 2016. Yeah, you're right. If anything, you hang your hat on it, like, it's a due, right? It has been a minute. Okay, Greg Ip at the Wall Street Journal. Here's the headline.

Trump wants to run the economy hot. There's a good chance he'll succeed. All right. So he's saying Washington has three levers to affect growth. fiscal policy, monetary policy, and credit policy. Credit policy is like borrowing, the ease of borrowing. And he's saying historically, these three things have not been coordinated. He's saying now they kind of are.

We're spending a lot of money still. We're reducing rates for monetary policy. And we're trying to ease credit. So he's saying, listen, like, with those things typically, like, he's probably going to succeed to run the economy hot. Like that's why GDP now is like 5% for the money. this quarter. Zoom me out in terms of like how we're thinking about the stock market in 2026. On the one hand, on the one hand, you have an accommodative backdrop like you just mentioned, right, from central banks to the government to the AI tailwinds. And those are, that's a very

important thing to consider, obviously. On the other hand, you have investor expectations, earnings per share expectations. Pretty high on both sides. We showed the chart last week of ETF flows. Like, investors are obviously excited, as they obviously should be. If so facto, are they too excited? And this is the type of thing where it's like you can, you know, the CNN Princess bride, right? You just spin yourself in circles. Like, yes, things are good, but everybody knows it's good. And then I think generally that line of thinking is too cute. At the extremes, fine. When everybody's like jumping over themselves to raise price targets and truly going like nuts on speculation, then I would say, all right, guys, like this is silly season.

It's not silly season. Just if you just look at the prices of things that we're talking about, it's not silly season at all. It's just not. I'm going to have to update this, but I did this thing once where I looked at how often earnings are up in a given year where the stock market is down or earnings are down and the stock market is up. And it happens more often than you think. And just one year period. Right? And obviously the trend probably matters more than anything. But it sure is possible of expectations. And I think expectations more along the lines of just returns have been so good. That's the only thing for me. But yeah, if you look at this stuff with the economy,

it's hard to think that like things are going to roll over immediately and all of a sudden go bad and tech companies are all of a sudden going to pull back. I listen to, so Josh and I are going to do some financial stuff on what are your thoughts tonight. So I was looking at Bank of America's report this morning. And to me, they are the source of truth. Like when I want to know what's going on, what's really going on with the U.S. consumer, don't tell me about like dollar tree or Target or.

or these retailers, because it's a very competitive market. There's all sorts of different forces that are at play. I go to the source of truth, and for me, that's Bank of America. So, hang on. So my wife's source of truth now is Chad GPT. Like, if I tell her something, she won't believe me until she can cross reference with chat GPT. She believes everything AI tells her, right?

She thinks that chat GPT is just wonderful. For you, that's credit card companies. It's Bank of America, specifically. Okay. That's the one. They are the bank for Main Street. All right, so here's what they're going to tell you probably. So this is from our friends Ryan and Sonu at Carson Group.

So they said, Ryan says household balance sheets are in the best shape they've been in since check notes ever. He said, yes, there's a lot of debt, but there's also a lot more equity. So what they did here is they broke down all the assets and all the liabilities. And they looked at going back to 1999, 2007, and 2019, kind of like some prior peaks. And they look at the asset percentage to the liability percentage. And it's like, yes, the debt has grown, but the assets have grown even more. So even, it's kind of crazy that we're in household balance sheets are in a much, much better place from an asset liability perspective than they were in 1999. And the 1990s are still widely considered one of the great economic decades in history for good reason.

And consumers are in a much better place now than they were back then. This is assets and liabilities and net worth as a percentage of disposable income. Consumers are in a better shape now than they were in 1999. Amazing. It's kind of crazy, right? So. There's a great Charlie Munger quote when we're thinking about assets versus liabilities. And yes, the numbers are reality.

I love the quote where he says, the liabilities are always 100% good. It's the assets you have to worry about. And so when we're talking about debt and interest rates and what's the breaking point, it's not in a vacuum, right? with asset prices this high, yeah, things look pretty damn good. You're right. That can easily shift with a bare market or whatever. Yeah, like if the assets are 30% lower because of a recession or bare market, then

everything is different because the liabilities don't change. But getting back to Bank of America, their net charge-offs, so they break it down through the consumer, credit cards, commercial properties, and consumer. net charge-offs are going down, and they have been consistently. All right, so you're going to give us the full breakdown next week? No, I'm going to do it on one of your thoughts tonight. I'm just saying, like, things are fine. According to this one source of truth, it's not to say everything is fine always,

everywhere. Obviously, there are pockets of stresses there always are. No, last week you wanted to survey each individual American and ask them how they're doing before we realize things were good. Now you're going back to macro. No, no, no. I think that when you are talking about real estate, you are like acting as if there's one buyer. And do they regret?

It's like, come on, I will push back against that for the rest of time. I'm sorry. Those are not the same thing. All right. We need to offer Mayacopa. May you do, actually. You want to read this? We had a few people on this.

This was a good, because we didn't, I guess we didn't read this chart right last week. No, no, this is great. So last week, we shared a chart for Apollo did their update on real estate. And the title of the chart is Freddie Mac. serious delinquency rates multifamily. And this is significantly higher than during the GFC period. And obviously, that's nerve-wracking. So we called it out and somebody, two people actually were kind enough to check us in the inbox.

Somebody said, it's the multifamily loans. So multifamily delinquency rate information is based on the UPB of, I'm not sure what that stands for. of mortgage loans that are two monthly payments or more past due or in the process of foreclosure. Unpaid principal balance. Okay. You guys talked about this as if this is the renter delinquency. It is not.

So I had chat, UBT. I uploaded this chart and I said, explain to me exactly what's going on here. And the TLDR from chat is this is not renters falling behind, which is what we thought it was. It's apartment owners who borrowed a, aggressively in a low rate world, now struggling to service and refinance their debt. Because rents are falling.

Two very different things. Right. And I'm guessing one of the reasons is because rents are falling in a lot of places. And so people, you're right, people in Hog Wild building apartments. I think it was like all-time highs for apartment building because rates were so low. So that makes that actually, this makes sense. So speaking of Freddie Mac, my book habits and not just with audiobooks. Like this is when I was like aggressively reading back in the day, I would like fixate on a topic.

And I would squeeze all the juice that I wanted to squeeze out of a topic and then I would move on to something else. So part of, you know, it was like the presidents and then it was history and then this and then that, whatever. So I right now I'm revisiting the. You know your middle age when it's World War II. I haven't done that yet. I know that. I'm saving that for retirement. Who has time for that?

That's a bear. So I saw in light of the credit card for, proposals. Modest proposal tweeted, like, read all the devils are here for unintended consequences. Funny enough, I think all the devils are here. That's Joe No, Sarah and Bethany McLean, that actually might be the last book that I stopped reading. Whenever I stopped reading, I think I got through half of that book, and I, for no good reason, I was just like, you know what, maybe it was maybe COVID happened. I can't remember. But that is a book that I enjoyed and I, like, got a third of the way through. So I said, you know what? Great idea.

idea. Let's revisit that book. So I just finished it. Are you sure you got the name right? All the Devils are here? Is that not the name of it? Oh, nope, you're right. All the Devils are here. The Hidden History of the Financial Crisis. Okay. Okay. I never heard of that one. So from there, I'm listening now to Andrew Ross Horkin's book, Too Big to Fail. Never read that one. And then I'm going to finish. I think I'm probably could do one more. I'll probably do one. You're going back for the GFC?

I don't know why. I just, yeah, I feel like I know we did that already. I did that in like 2012 when those books came out. But I'm doing short and I honestly felt like the big short was the only you needed to read. Yeah. I mean, yeah, so good.

So anyway, it's a reminder of the time period that we lived through and how completely upside down the world was. And the literal, not just liquidity problems at the banks, but the utter insolvency of them. We, I've said the story.

The stark contrast of where we are today versus people looking for the next big short. are you out of your mind? The financial system almost came under legitimately. It was scary. I said the story before, but it's worth repeating. We had a hedge fund client. We invested in a hedge fund.

We were on a call with them. And we had calls all the time. Like, I got a new job in July of 2007 for the endowment fund I worked for. Like, right as the credit stuff really started bubbling up. Like, one of those credit funds blew up. And so in the September of 2008, when everything was blowing up, Blamondon brothers went under. We had a guy on a Friday say, go to the ATM right now, get as much cash as you can because Monday the banks might not open. He was dead serious.

And that's how cool. I think Muhammad said that at one of the conferences that we saw him speak at. Like that was. It was a real thing. It wasn't like, that wasn't hyperbole. Yes, that was a, that was a crazy crazy. And honestly, for me as a young person in finance, experiencing that, it was like, I think one of the best things that could have ever happened to me. Because I saw, like, people losing their minds and blowing up left and right and like the unintended consequences of the aftermath of that. It was such a good learning experience for me. Okay.

Is AI going to make money worthless? This is a piece from the All Street Journal, why the tech world thinks the American Dream is dying. The argument some people are putting forward is that tech companies and are leaders become a class under their own infinite wealth. No one else will have the means to generate money for themselves because AI will have taken all their jobs and opportunities.

In other words, the bridge is about to be raised for those chasing the American Dream, and everyone is worrying about being left on the wrong side. and they interview some people who like have these thoughts like hey listen AI it's going to be like star track like i'm not a star trek person but i know that technology basically solved everything so that's why they could explore all these lands and like it could make anything you wanted um and there's some people in silicon valley who are saying like this is legitimately the last time to get well so get it now otherwise it's it's done can we just pause on the star trek thing star trek was like one of the biggest shows ever at the time yeah i don't think i ever watched a whole

episode probably. I think like, yeah, like maybe maybe like our dad's watch it. I have no idea. We don't know how good we have it these days. People used to have to watch Star Trek. Like that was, what a lame show for nerds. But like that was what it was.

No offense, all the Star Trek fans. I have a new analogy for AI. Because like I said, my wife all the time will do something on Chad GPT and she'd be like, this is amazing. She's like, I can't believe how good this is. But I think AI is like Rain Man. You know in Rain Man?

when they're at the doctor's office and they're giving him math problems like, what's 3,612 times 4,213? And he's like 5'7, and he says all the... And then Tom Cruise is like, oh my gosh, he's a genius. Then he goes, Ray, what's 2 plus 3? And he's like, 7.

That's AI. Because every time I ask him to do something simple, it can't do it. Look at this chart here. I did another one where I tried to do the history of the S&P 500. And it kept giving me the same years twice, 1976 or 1987.

And then I'd say, hey, stop giving me the same years twice. And then it would mess up the word financials or the word utilities. I don't understand. Someone has to explain to me who's smarter than me. Why is it so hard for AI to do simple tasks, but it can do these monumentally difficult tasks so easily. I don't understand. I'm pretty sure whoever emails us an explanation, the explanation won't make sense to

us. Probably. But there has to be a good explanation. I just want to know why can't it do simple stuff like this? Somebody emailed us that you guys are asking. You guys are using it wrong. You have to ask it specific questions in a specific way. Like, tell the machine that you are an analyst that's looking for X, Y, and Z.

Like, you can't just ask the question. You have to, like, frame it in a certain way. I don't know if that's true or not. I haven't played around with it enough. Okay. That doesn't make sense to me either, but, okay. I don't understand why it can't do simple tasks. It's totally right.

It's Rain Man. I finally started taking out all of my photos and things to hang on the wall. We were home yesterday for MLK day, and I said, you know what? I finally have a minute. Let me take the bubble wrap off. Let me... Wait, can you actually hang stuff yourself? I can't help you with that.

No. I mean, I can, but Robin won't let me. And she's probably right, because I won't get them straight. Okay. So, I mean, yes, I can hammer a thing into a wall. I can't have... Not to totally derail your story, but we had all of our walls painted and we took everything off. And even like the toilet paper holders, you know, and I'm like, we need it.

Let's get new ones because the kids mess them up and stuff. So I'm like, to my wife, like, I'll put these in. I know what I'm doing. I'll install these. So put the toilet paper hangers in. I don't know how this hang. It's like magic. Like how do they, because I know exactly what you're talking about.

How do they go on to the wall? What's keeping them there? You put these, there's like dry wall holders. So I did it. And within a month, all of them were like. like, they all fell down. Like it was a one, just a straight line, you know, and they all fell down.

And I had to, like, find a stud and I had to redo them all. I hate toilet paper holders. I just hate all of them. I hate, I just hate everything about them. Okay. Hanging stuff on the wall. Anyway, so I took them all out, and I told Robin that I was going to take pictures of all of them, take pictures of my wall, and have the computer relay them out for me,

which I know it could do that, right? It could do that. I didn't even get that far. She told me to stop her. She said stop her there. Don't do anything. That's the thing. It can give you the layout and give you all the measurements and stuff.

And it just, it's, it's harder than it. So you're going to, what are you going to do? Hire someone to hang your wall pictures? Yeah. I have a handyman, Mike. Okay. Yep. Do you think he, like, laughs to himself internally, like, this schmuck, can't even hang

stuff in the walls? Mike's a great guy. He doesn't overcharge me. Okay. He, uh, he likes to talk stocks with me. So, nice guy. All right. Can you explain to me the crypto stuff with Coinbase?

Oh, no. Matter of fact, I can't. I can't. Okay. I have not read a single thing about it. Coinbase did something to piss off the administration. I'm going to read it. I just haven't got it up the speed yet.

Could you tell me anything about it, or we're both ignorant right now? I read the story Josh posted for us, but it just said Coinbase didn't like the because it could impact their stable coin yields and it sounded like everyone is mad at it's Coinbase. So I don't know. I thought maybe you were plugged into the crypto. Maybe someone can fill us in. Okay.

I will get plugged in. I just haven't read it yet. All right, this is, this is news. Oh, the markets are open. All right. So, SMP is, I mean, the equal weights down 80 basis points. S&P is down 130. The Russell 2000 is positive.

Am I seeing that right? No, you're not seeing that right. Okay. I'm on it to lower. The Russell is down 1%. Gold is up three and a half percent. Holy moly. Silver's up six.

percent. The VIX is at 19. This is like, this is this is nothing. I never thought we'd see another gold silver bubble in my lifetime. I bought silver when it was 50 bucks in 2011. I have, no, I said that to Josh. Maybe I haven't said it on this show. I bought silver. I bought silver when it broke out at like 36 bucks.

And I think I sold it at like 42 and I felt like a genius. What is it now? 85 or 86. All right. Not a silver trader. Okay, this is news. The New York Stock Exchange today announced

its development of a platform for trading and on-chain settlement of tokenized securities for which it will seek regulatory approval. I'm guessing they're going to get it. NICE's new digital platform will enable tokenized trading experiences, including 24-7 operations, instant settlement, order size, and dollar amounts,

and stable coin-based funding. 24-7, instant settlement. I know that's one people will probably, I think instant settlement is probably the biggest thing for a lot of people, right? Dude, I don't, I transfer money to a custodian on Monday. And I need to transfer it. back out and the money still isn't settled. How is that possible?

Monday of last week. I did a custodian to custodian transfer. I think I put it in motion before the end of the year and it just settled last week. It took like six weeks to happen. It took forever. Really long time. In like an entire transfer of security. If it's settled yet.

Transfer. Now I could trade it. I don't want to trade it. I want my money back. Nope. How is this possible? It's been over a week. So the funny thing is

is that that's going to be the benefit for people, but then people are also going to say, like, wait, this happened way too quick. I didn't mean to do it. That's going to be like the benefit of people. I don't think people are going to complain about things moving too quickly. All right.

This is, well, the opposite of bad is good in this case, for the most part. I don't like 24-7 trading, but the other stuff is fine with me. All right, let's talk housing. From Axios, the share of U.S. Mortgages by interest rate. And they look at 6% or higher,

versus 2.9% or lower. And 2.9% or lower was way, it was almost 25% of all mortgages in 2022. And the share of 6% or higher was less than 10%. Now the share of 6% or higher is more than those with 3% or lower. So like the world is healing, I guess, getting more normalized for mortgage holders.

I think this is actually a good, a positive for the housing market. Because it means fewer people holding on to those 3% mortgages and more people who are willing to trade didn't have activity, correct? Oh, I see what you're saying. Yeah, could be. Sorry, you hear that drilling in the background? I did. What is that? I have no idea what's going on. I have no idea. Maybe someone's hanging pictures on their wall. All right. From the Wall Street Journal, uh, Gen X and millennials will inherit trillions in real estate over the next decade. And they look at, they look at this through the

lens of luxury real estate, but I think this is a big, going to be a huge story for just everyone. So over the next decade, 1.2 million individuals with a net worth of 5 million or more projected to pass on more than $38 trillion globally. Gen Xras and millennials will inherit $4.6 trillion in global real estate over the next 10 years. 2.4 trillion of that is in the U.S. And they look at all these different like wealth transfers by net worth. They said Americans with a net worth of more than $5 million are expected to pass down $17.3 trillion over the next decade.

It's going to be a lot of money changing hands. and they talk about how a lot of rich people are trying to figure this out and get ahead of it and make sure their kids are okay. And I just think it's going to be, it's not going to happen all at once, obviously. It's going to be a slower. It's not going to be a giant tidal wave. It's going to be a slower, you know, tide coming in and coming out. This is like the 10,000 baby boomers retiring every day. Yeah.

It's going to play out. And obviously, people have been talking about the great wealth transfer for years because they can see it coming. But like what, what segment of the economy is going to have the biggest, is going to feel the most from this? I mean, because I think there's going to be upheaval with financial advisors, right? Hey, my parents use this person. I don't want to use them. I'm going to change over. There's going to be a lot of that, I believe.

I think there's going to be probably a lot of young people who go, I would rather have the money than the house. I don't want this house my parents lived in. What am I going to do with it? Unless I move in, I'm going to sell it. So I think there's, there is going to be a lot of change because of this wealth transfer. Yeah. Like, what do you think it's going to mean? We've never had a group this large with this much much,

money live this long before. We've never had this before. This is a totally new thing. All right. Let me, let me make a lame, what do I think is going to happen prediction? Nothing. I think it's going to be so slow and gradual that these people are going to be transferring real estate, aka dying, over the next 30 years.

So I don't think that we're going to wake up one day with like, oh, my God, there's so many homes for sale because unless we have like another COVID situation and even sell that did nothing. God forbid. But I just think that it's going to be like a sort of boring, slow and steady thing. And I guess the biggest impact is going to be the rich get richer. Yeah, you're right. And I think that's the hard part is people think like, well, the rich are all going to sell people, people are going to sell their assets all at once when this gets transferred down. No, it's mostly going to be rich people giving the money to the rich kids and they're not going to sell anything. Well, they'll sell the homes. Yeah, but I'm saying like stocks and stuff,

like financial securities, that stuff is not going to see a big wave of selling because of this. No, I don't think so. Yes. But I do think hopefully that will unlock some houses for people to buy in the years ahead. That a lot of people aren't going to want their baby boomer parents' houses. They're going to want to get out of them and just take the money. Well, we don't have to guess because you can just see this in the demographic data. There are more people that are going to be of home buying age.

than there are of people passing away and unlocking real estate. Like, it's still going to be way upside down, the demand supply and balance. I also don't think we're prepared as a society for the level of death we're going to have in years ahead. I know that's a really morbid thing to think about, but just the transition that happens. I saw this with my brother. The amount of things that need to happen when someone passes away with their accounts and their money and everything about them. it's not so I had a conversation with my dad right afterwards and said I'm not prepared for like you and mom someday like we need to have a we need to sit in a discussion because I did with my brother and so like at the holidays my dad handed me this envelope he's like here's everything here's our passwords here's our accounts here's if something should happen to me and your mother's by herself or to both of us like and you need to know everything is like I don't think how many people are having those conversations very probably not many right yeah it's not fun conversation it makes like a messy situation yeah it's not fun at all but it makes like a a bad situation even worse, we have to deal with all that stuff and sort through it all on your own, you know,

especially since everything, in the past, you could go through someone's finding cabinet and find everything. Now everything is online. And if you need to get someone's password, it's through their phone or they have to, like, it's on them. It's much harder to get that stuff these days. I remember having that conversation with my mother. I was probably 23. I mean, I was completely emotionally unequipped to have that conversation. And it was, it was not fun. Yeah, no, it's not at all. But, yeah, like having it had a time. All right. Getting down to wealth.

Citadel Securities had a good piece here. I think Mev share this on the Idea Farm. Now, I have to request Citadel, whoever's making their charts. Listen, they make their, that's a huge organization. They make a lot of money for people. They need to increase the font on their charts. You see how small the font is on these things? It's comically small.

And so they look at household wealth by percentile groups. They're looking at the top 1% in the next 9, the next 40, and the bottom 50. Okay, and obviously the top 1% holds most of it, the top 10% holds most of it. We know that, right? I think the top 10% is like almost 7% of the total. But they look at the growth in household wealth by percentage. This is something we've talked about. And this is since 2012, by far the biggest relative gainer is the bottom 50% who's seen their wealth rise by almost 1,200% versus call it a 150 to 200% growth for the rest of the group. A part of this is probably when they chose to start this because that was the kind of the bottom of the housing market. So that bottom 50% got dinged the most then. But if you look at the ownership of equities too, the biggest growth since the 2010s is in that bottom 50%. Their ownership of equities is up almost 500%. It's a massive jump for the bottom 50%.

And obviously it's still a tiny amount, relatively speaking. I still think this is one of the best outcomes of the 2020s. The fact that the bottom 50% has been brought more into the financial markets. And the last one, the household ownership by age group, people under 40. Under 40s, by, again, the biggest thing. We've talked a little bit. These are good charts here. As long as Citadel, talk to chart kid Matt about the font.

The font got to be a little bigger. Good charts. It's funny. The narrative of Robin Hood over the years has shifted so dramatically. Right. They were the bad guys. to now, in some people's opinions to the good guys,

or maybe it's not bad or good, it's shades, but, but they did this. Like, this, you know, that they didn't cause a pandemic, but like they were, you know, right place, right time. But, uh, another weird outcome of the pandemic, though, right?

Like, who would have ever thought? We're going to have a pandemic that's going to keep people in their houses. It's going to be an awful situation. What's it going to do? It's going to lead more people to invest in the stock market. Who could have ever predicted that? Yeah.

Speaking of predictions, my Seahawks not winning the Super Bowl prediction is not looking so high. Man, I've gotten a lot of notes on that lately. So I made that, I made that, it's hilarious. Daniel, you got to pull the clip on that. Michael's saying, listen, the Seahawks aren't winning the Super Bowl. I'm not going to happen. I made that prediction in week 16, I believe, or 17.

Are you still holding under this bed or did you sell out of it? Yeah, I'm still holding. Okay, I think you have to. At this point, you have to. You have to hold the Super Bowl. So I could take a 40% loss. which is whatever, it's funny. Remind me, what's the payout?

If the Seahawks, let's say they lose in the Super Bowl, what's the payoff if you win? So I might, okay, I bought, so it was 86 cents for no. And I'm thinking when I did it, like, this is a 14% return. Forget about, I wouldn't make the bet if it was minus 800 or whatever it translates to. But I like 86 cents, like that's a 14% return. free money. It's a no brain. They're not going to win. And then they destroyed the nineers on primetime. And I felt the little pit in my stomach was like, oh, they look, they look really good.

And my whole thing was like Sam Donald's not winning Super Bowl. They don't need Sam Donald to do anything. Like they're just so dominant. I do think that the Rams can beat them. I really do. But, but am I, so anyway, I have way too much money now against the Seahawks. and I won out. Predicking the future is hard. I won out. Yeah, predicting the future is hard. Yeah, I mean, there's some injury luck in there too, but yeah.

You know, I've, karma has bitten me in the butt cheeks a few times recently with the Seahawks and the flu and Delta. So a couple of weeks ago, we were talking about Delta's earnings. And you were like, either you or Josh said, like, why is Delta so much better than every other airline? Yeah, that was me. Okay. And I was like, I don't know. But like, I only fly Delta. and I've had nothing but awesome experiences.

Like I've flown a lot in the last three years and I've had like one delay. I had a really bad experience on Thursday. So on Thursday night, I made the quickest trip of my life to Los Angeles. I was supposed to land at 11 o'clock, client meeting the next morning, then be on a plane out at 3 o'clock the next day.

So in the air, almost as long as I was on the ground. And for whatever, they gave a reason. I don't know what it was, The wrong plane was at the gate, whatever. It was like a two and a half hour delay. Didn't land on the plane or waiting? No, thank God. But like, it was just, it was not pleasant.

You know, people were getting anxious. It was late. And then to add insult to injury, you know, I love Delta's airplane. Yeah, I love Delta's movies. In fact, I think, didn't we hear from the person that chooses the movies? I came over was on Delta. What a cool job. This movie selection stunk.

I was, or maybe it's, maybe it's not to brag. I've just seen too many of these movies. Yeah. I watched The Conjuring Last Rights. That movie was such a pile of shit that I turned it off with 10 minutes to go. And like there was 10 minutes left. I said, I don't want to finish this. That's a lot.

Okay. Speaking of movies, Friday night I pull up Netflix. What do I see? Oh, there's a brand new Matt Damon Ben Affleck movie. I forgot. This was going straight to Netflix. That's one of the beauties of streaming. You can just turn on Netflix on Friday.

Be like, oh, there's a brand new movie with Hollywood stars. So they've been making the rounds. They've been doing, they've got this movie called The Rip. Did you see it? Mm-hmm. Okay, we'll talk about the movie in a minute. But they've been making their own, they've been doing the podcast tour.

They've been talking a lot. It's funny. People probably watch the podcast clips more than the movie. Did you listen to it? Did you listen to Rogan? I didn't listen to any of their podcast. I just listened to some of the clips. I haven't listened.

Listen to the Rogan interview. It's so good. I'm only halfway down, but it's just so. So I don't know which one he talked about it is, but this is the quote from Matt Damon that's been flying around. He said the standard way to make an action movie that we learned was you usually have three set pieces, one in the first act, one in the second one, the third. You spend most of your money on that one third act. That's your finale. And now it's like,

can we get the big one in the first five minutes? We want people to stay. And it wouldn't be terrible if you reiterated the plot three or four times in the dialogue because people are on their phones while they're watching. That was sure, we're going. Okay. And that's obviously very sad, but I totally understand why they do this. And this is one of the reasons why every time you watch a Netflix movie, I go, what is it about this movie that just doesn't feel like a normal movie? And that must be it. that they're making, they're trying to optimize these to keep people's attention and not like a regular movie.

Something about it just doesn't feel like a normal movie. So here's my take on the movie. This movie sucked. I watched it. It felt like they sent Damon and Affleck a Gerard Butler script. And they went, you know what? Like an accidental like, here's a Liam Neeson or Gerard Butler

like straight to DVD movie, straight to streaming movie. And they went, you know what? We get to work with each other again. It's a B-minus action flick. Netflix is going to think. throw the bag at us. And then we get to go on the podcast tour and talk about how great we are

and how we make Good Little Hunty together. Who cares? Let's do it. Everyone else is getting the bag. Why don't we? That's kind of how this felt. To me, this was a B-minus action movie. And they were still like their acting was good in it,

but it was... It sucked. And to me, this movie was sad because it felt exactly like the Netflix movies do. And they all just have... There was like a half hour of it where I was kind of... When they were figuring out what to do with the money.

Because it's like, hey, there's a house with a bunch of money. The cops are dirty. And when they were, for a half hour, I was like kind of intrigued. But yeah, it was just a not good action movie. Yeah. I had, like, I had a decent enough time watching it. I would just, listen.

It's fully watching. My take is, was it a good movie? Absolutely not. Did I kind of enjoy it? Yeah, I did. I enjoyed it. I still enjoyed myself. Yeah, it was fine.

It was like moderately fun enough. But like, it just was hollow. It just was like dumb and stupid and what is happening. And it felt like a, Netflix movie. Probably the first scene, five minutes in, you're kind of like, oh, eish. Okay. So, anyway. And the director is a real director. He did The Grey with Liam Neeson. He did Narc. He did, um... You're saying the Grey is a real director. No offense to this guy. I like that movie. Okay. I saw them in theater, obviously.

Like I said, it's put in a Liam Neeson movie. It just wasn't good. All right. We offered a Maya Coppah earlier in the show. I might have to offer one to you too because I listened to the movie draft on the town podcast about what's going on 2026. And you said, 2026 is going to be bigger than 2025. And I said, no way, you're nuts. And you said, well, the Michael Jackson movie. But here's what's coming out. There's a new Mario Brothers movie, a new toy story, a new Avengers, a new Moana, a new Spider-Man, a new minions, a new Dune, a new Star Wars something, a new Jumanji, and a new Devil Wars Prada. Now, those are all retreads, of course, which to me is, like, so they're probably going to make a ton of money.

But you've got a big one. Scream 7 is going to be huge. Neff Campbell's coming back. But hasn't she been in all the recent ones? Maybe as a came here. Okay. This is also kind of depressing for me. Like all the big movies this year are just going to be.

So like the ones that I want to see are they're not, is the Odyssey and Project Hill Mary. Those are the ones I probably really care about. But it's kind of depressing to me that like, why did they have to make another toy story? Why did they have to make another Avengers? It's a depressing state of the movies that this is all we do. now. Well, mostly true. Obviously, mostly true. But can I just offer you some other things that are,

that I'm excited to see? I can't wait to see, I can't wait to see 28 years later. I might try and go tonight if I can. Everyone loves another retread. Sure, but it's not, yeah, I guess it is. Yeah. But it's not like a, a Marvel movie. Send help. The new Sam Ramee movie with Rachel McAdams. Have you seen that one? I'll wait. On Netflix, I'll watch it, yeah. Okay. There's one coming out on Friday.

Is Glenn Powell in it? He like, it looks like Minority Report. Okay, you're not selling me here very much. What is the name in the movie? All right. A Metschisholm 7. That's not for you, of course. All right.

Some more Joe. Oh, Ready or Not, too. I loved Ready or Not. Big Ready or Not guy. Mortal Kombat sucks Oh they're making a street fighter movie That's gonna suck too

Oh, Masters of the Universe You were definitely a He-Man guy Okay, that one's also gonna be bad You had He-Man underwear, let's be honest I've got some human action figures That's if they don't make that like a satire It's not gonna be good Whoa, there's a new Steven Spiel movie out

Coming out? That one actually looks good, yes, an alien Okay, with Emily Blunt, that's gonna do that aliens Scary Movie 6, I'm gonna skip that Supergirl, not for me, Jack has five I'm seeing that in theaters. Love Jackass. There's some shit.

What's my coming on Friday? Let's do a story time before we do our recommendations. I got a couple of movies. Did you get either of your kids into wrestling, like WWE? Do they watch any of it? Mm-mm. Okay, because I grew up on, you know, Hulk Hogan and Andre the Giant.

I think I made it all the way through like Brett the Hitman of Heart and Sean Michaels when I was in middle school. Then I kind of gave up on it because it's like, you know, whatever. So my son, you know, he loves to, He's very physical. Like, everyone's, in the winter, he feels like a caged animal because he can't go outside as much anymore.

He's like, hey, every night he's like, Dad, let's wrestle. Let's tackle. Hang on, I'm sorry. Sorry. The new movie is not Glenn Powell. It's Chris Pratt. It's called Mercy. Have you seen any trailer for that?

Yeah, look, okay. You're right. Looks pretty good. Okay. Back to you, wrestling. So he, my son, like, he has to be, like, he's like, let's wrestle. He loves to, like, let's wrestle. Let's tackle each other and suplex each other and suplex each other.

And he loves to wrestle. He can't. Wait, each other? he gets suplexio? That's impressive. Oh, yeah. He's pretty close. He's going to be bigger than me pretty soon. So I'm like, oh my gosh, he loves cheesy action movies.

I'm like, he's going to love WWB. Because they have all the old ones on Netflix. So I put on like the, what's the big one, WrestleMania? I put it on for him. I used to watch it on pay-per-view with like the shady lines. Like I couldn't get the actual pay-per-view, so I'd try to watch it through the thing. And we put it on and I forgot the matches are like a half hour long. But like two minutes into it.

I thought he'd love it because these guys are flying off roller. hopes or, you know, he's like, what is this? I'm like, wrestling, he's like, it's fake. They're not really hitting each other. I can tell. And I was like, I didn't know if I was proud of him or should I be worried. He's like, I want to watch real stuff. Like, wanted to see actual people. And I'm like, oh, I thought you would love this. He hate it. So should I be proud or should I be worried that he just wants to see people

actually get hurt? I don't know. Because, I mean, he's eight years old and he's still halfway believed in Santa this year, even though he kind of said, hey, dad, Santa's no. looks a lot like your handwriting this year. So he kind of, he wanted to believe, but he still didn't. But I can't believe that he immediately got the wrestling was fake. Like, I was still into it.

Yeah, that is impressive. That is impressive. Well, I don't mean to throw shade of people, but I can't believe this. Because I watched it too, and I was like, oh, I forgot how fake this really is. I can't believe how many adults still watch this. I can't believe. Phil Huber thinks it's still real. Have you seen the video?

It's real to me, damn it, that guy. I can't believe how many adults watch this because my son, in age of the way. years old saw through to me like, oh, this is fake. They're not really hitting each other. I have two friends that still watch it. Phil, one of them and another friend from home still watches every whatever, every whatever it is. To each their own, I can't believe people think it's entertaining. That's just me. All right, let's do some recommendations. Speaking of Glenn Powell, my wife and I watched The Running Man on Paramount Plus. That was his movie that came out last year. It was a retread of their Arnold movie from the 80s.

I never saw the original. And I didn't, I surprisingly didn't either. I'm a big Arnold fan. And they tried to kind of keep with the same vibe of the original 80s movie. So it looked like a movie that was made in the 80s made today. And the premise is just, you have 30 days and there's going to be a team of people trying to kill you. You have to run. It's like a dystopian future. Like the guy needed money. So the idea is good.

It's a pretty cheesy action movie. Did I enjoy it? Yeah, I enjoyed it. It's not a good movie. Not like a high quality movie. An entertaining idea. How's that? Okay.

No, what else is coming out? I just, I don't know why Glenn Powell might be this. Godzilla minus one. Oh, no, Godzilla minus, they call it minus, minus, zero? I can remember. There's another one coming out. The first one was amazing. Yeah, Lord knows, we haven't had enough Godzilla movies over the years. Now, these are, these are real Godzilla, not the nonsense Hollywood one. Okay, my son actually did like the first one. All right. So they did the Gloom Globes last week. And Rose Byrne won

best actress for, if I had legs, I'd kick you. And I just saw her speech and I thought, that looks good. I knew nothing about this movie. So I'm told my wife, I'm like, it's Friday let's watch a movie. Let's pull this up. We rented it. Oh, boy. Great performance by her is about the best I can do. do. It's one of those movies where they're keeping things secret for me at the beginning. And so the first half hour you go, okay, this is happening, but something else is going on.

And by the end of the movie, you go, oh, wait, nothing else is going on. A very infuriating movie from a plot perspective. Great performance. Terrible movie. It's an Oscar film. Okay. Yeah, I watched a trailer with Robin, and I said, I'm not watching this movie.

I couldn't believe that, like, wait, This is all it's about, just this? Okay. Finally. I'm still walking through my Robert Redford catalog that I, after he passed away and I never watched them all. I finally watched all the presidents men. I'd never seen it. Obviously not breaking new ground here.

I think it won Oscar for Best Picture. It won everything. Yeah. But the 70s are my, like, whole for movies. This movie starts, and it goes, and it just, it hits the ground running, and I can see why it's, why it's somebody to do. It felt like it could have been made today, like a, like a, Period piece about the 70s. It's so, so good.

I understand why people liked it so much. And honestly, I knew kind of about the story about what happened at Watergate, but not really. Not like the details of it. And, yeah, so good. I will be watching that movie again.

It was amazing. Redford and Hoffman. Very good. His and hers. You're watching that? Didn't start yet. Worth it? Yes.

I only saw the first episode. All right, Netflix does those shows very well. They don't do movies well. They do the crime series. It's like The Beast and Me kind of a mini series, right? John Burnfall. It's good, yeah. It's good stuff.

I'm in. Have you seen Marty Supreme yet? Oh, no, of course, yeah, but it's in theaters. Everyone loves that movie. I'm excited to see it. Yeah, you're a big table tennis guy. I actually am. I think I can beat you in ping pong, not to brag.

I'm not good at it. Okay. That's actual entrepreneur. You seated ground quicker than I thought you would. Yep. You could take me. Okay. All right.

Anything else? How's the market doing? Worse? Okay. All right. Could we see a replay of last year where we have geopolitical volatility, upheaval, quick correction? Oh, wait. The earnings are still fine.

This isn't going to impact the economy. off to the races. Can we see a repeat? Is that too simple? I don't think so because Liberation Day came out of nowhere. And everybody was like, wait, what are we doing? I think that this is, it's not going to be. I can't imagine like the SEP going down 10% on like tariff threats or Greenland threats or I guess it could. But I don't think it's going to be. I think something else would have to happen aside from the nonsense.

How about this? A market on. Cali for every year for the rest of Trump's presidency, will there be a 15% declining the equity markets every year until he's out? Well, that's average. True. But I said the double digit is two-thirds of every year. You have a double-digit decline. I think we could just see this volatility every year from geopolitics now.

I think that's just the new normal. Look at this. I would purely from an investor point of view, so only speaking with my investor head on, I would much rather deal with geopolitical volatility than anything else if there's going to be volatility in the stock market. True. Right? Like, because ultimately that is jawboning and rhetoric and whatever.

Like, give me that all day as opposed to the story on corporate earnings turning. Because that's what really hurts the market. So, um, all right. We'll see what we say. Back next week. Animal Spirits at the compound news.com. Thank you for the emails. Thank you for listening.

Personal emails, personal responses. I haven't given that one in a while. Gosh damn right. Have a great rest of your week.