Animal Spirits Podcast - The Ben Carlson Top (EP.337)

Episode Date: December 6, 2023

On episode 337 of Animal Spirits, Michael Batnick and Ben Carlson discuss: Charlie Munger, how much the Fed really matters, negativity bias in America, the blame game for inflation, why you don't invest based on the headlines, narratives on bond yields, doom spending in the economy, a quiet crypto boom, and much more! This episode is sponsored by Nuveen and Kaplan Schweser. Learn more about investing with Nuveen at: https://www.nuveen.com/en-us Check out Kaplan Schweser's CFA exam prep study package at: https://www.schweser.com/ 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

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Investing involves risk, loss of principle is possible. Today's show is sponsored by Kaplan Schweizer, the study material, education material that I, myself, leaned on to get me through the first second. And yes, not to brag the third exam as well. I did fail level two. But in my defense, I was not even in the industry. Very difficult exam. And part two, my mom passed, not to make this two more, but like, three weeks after I took the test, and mentally, I was not in the greatest headspace to be taking that exam. So I think I have some excuses. Thank you. The first one I took was December.

So it used to be you can only take the test in June. Then they added level one in December. And so I took level one in December, but they did not have it in Grand Rapids anywhere. So I had to go to Chicago and took it out in the McCormick place. And it was like 3,000 people taking it in a huge, gigantic. It's a very bizarre process. I took level two, the one that I failed.

at the Javit Center. And you're right, it's just rows and rows and rows of future analysts of America. So this is why you need Kaplan Schweizer, so you're prepared for this test. Because I saw people like cramming for the test before the level one, and I'm thinking, if you don't know it now after six months of studying, I don't think any sort of crammy is going to help. That's why you need the study guides. So you can be prepared and go to bed the night before the test, ready to go, right? not having you to worry. Take all the practice tests you need. Check out the link in our show notes

for Schweizer.com for more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. 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 Animal Spirits with Michael and Ben. We're going to start off today's show with a quick eulogy of one of the greatest investors

of all time, one of the wisest people in modern history. That is, of course, the late Charlie Munger. When I was trying to figure out finance and investing because I came out of school not knowing anything I just read every book I could get my hands on I think you kind of did something similar and I think my dad was asking around for some of his colleagues like what should I get my son to read

because he's really into this stuff and in like 2005 when this came out he got me the poor Charlie's Almanac which is just a collection of munger's speeches over the years and people telling stories about him it almost reads like a eulogy when it came on I think there's a new version coming out

But I highly recommend that book. And the other one is Damn Right by Janet Lowe. Did you ever read that one? I did. It's like a bag. Both are very good. But poor Charlie's Almanac is excellent because it's got all of his best speeches and best quotes and stories. And you and I actually have a signed copy because of someone who listens to this podcast.

Oh, that's how it happened? I wasn't sure where it came from. You and Josh and I all got a signed copy from Charlie Munger because it was someone who was somehow related. I can't remember exactly what it was. but someone who's a listener to this podcast was nice enough to reach out and said, hey, I have an in with Charlie Munger. I can get you guys a signed copy. And so we have a signed copy of the book.

Was Damn Right, the Tren Griffin one? Nope. Damn right was the Janet Low one. Trent Griffin wrote another Charlie Munger one, which was great, which is like just a collection of his quotes and wisdom. I read both of those because Charlie Munger was a chapter in my book, Big Mistakes. And I think I'm pretty sure the example I used of his big mistake was Bluetooth chips stamps. I think that's what it was, but I can't remember 100%. Anyway, B2A. I don't know why I said

Bidus in May. Weird transition. Sorry about that. That's podcasting. That's podcasting. That was bad podcasting. People always tell us the things that we say too much. But that's what you do in podcasting. You have to have those kind of verbal crutches. This is how we move on. Somebody told me something that you said frequently. Gosh darn it, what was it? I can't remember. I get it a lot. Guess what? It happens. I'm not worried about it. I say so too much, the word so, like as a transition. I've been told I say, like too often. Guess what?

That's the way I talk. I don't care. There was a lot of articles. You're not going to change me now. There was a lot of articles and read it and actually interviews. So, see, I just did it. I'm going to not highlight every time I use that word. There was a podcast that we've mentioned a couple of times.

The Acquired guys had Charlie Munger on. This is probably five, six weeks ago. John Collison on Invest Like the Best Feed did an interview with him. I've not listened to that yet. I'm going to. But Becky, quick. Becky has done a lot of interviews over the years with both him and Warren Buffett. And I was reading the transcript.

I didn't see it because it was on TV, but I didn't get a chance to see it. The transcript is available. We'll share that in the show notes. And this really surprised me. Charlie said, I could have done a lot better if I had been a little smarter, a little quicker. Now, this interview was, I think it was like a couple of weeks ago. Becky says, what are you talking about? You've had success in everything you've done in life.

What would you like to do differently? He said, well, no, but I might have had multiple trillions instead of multiple billions. Becky says, do you sit around thinking about this? What would you have done differently? Charlie says, yes, I do think about it. I think about what I nearly missed by being just not. quite smart enough or hardworking enough. And then there's a break in the interview.

And Becky says, what would you have changed if you can go back and look at the last hundred years? Well, I'd go back and make some, of course, there'd be essential to go back and do it knowing what was going to happen now. I would be the richest man on earth. What did you miss? Was there something that you zigged where you could have zagged? And Charlie says, well, I would have started earlier for one thing.

And I would have compounded in Lugger. And I would have compounded better. And this was really felt, odd for me to read. One of his most famous sayings is the world is not driven by greed. It's driven by envy. And a man who, I don't know what his net worth was when he died. It was a $3 billion or $4 billion, whatever it was.

Two or $3 billion, something like that, yeah. Plenty of money. I don't know if anybody ever asked him this. Was he envious of Warren? And was he secretly bitter? Because in this interview, he's talking about money, not necessarily not having enough of it. But I just read what he said.

You know, he could have had multiple trillions. And it said it's something he thinks about. Do you think that he was secretly, I don't know if resentful is the right word, but envious, that Warren, who is worth $100 billion, had so much more than he did. That's possible. I never really thought about that either. I bet he would have said no, but that would have been interesting to hear him with some truth serum. Now, how about this?

Obviously, Charlie died just shy of his 100th birthday. Warren is, I think, 95 or 96, a couple years behind. It's easy to say now, listen, I have $4 billion. What's the difference? $4 billion, $100, but it's the same number. But what about when Charlie had $40 million and Warren had $3 billion? Right? Like, I do wonder if he was secretly, if there was any resentment over the years.

And I could be way off. I'm not trying to besmirch the man. I'm just something that caught my eye. I hope not. It's also, I think, important to recognize that we put these people on a pedestal who have been a successful businessman and investors and such, but these people aren't also perfect either, and they don't have it all figured out. Life, you mean? Yes, yeah, the whole thing. Snowball?

Yeah, there's parts of everyone's, every successful person's life. If you read anything, the Steve Jobs biography or the Warren Buffett biography, there's parts of their life where these people are not perfect and their personal life is obviously, If you become a billionaire, you have to sacrifice a lot of other things in your life. And I think it's important to recognize that for the people that put these up, people on a pedestal. That, yes, they have a lot of wisdom and they made a lot of money, but it's not always, there's tradeoffs there for that. Yeah, I mean, a normal person would say to themselves, why keep going? Why in your 90s are you still obsessed with the chase in the hunt? And maybe at that point it was more intellectual than anything.

It's stimulative. and it probably wasn't necessarily about the money. But, yeah, these people are far from perfect. If you read the book Snowball, which was, I think, my favorite Warren Buffett biography that I've read, his personal life was a disaster. Is that fair? Not great.

I read a... Not a great father had literally multiple marriages. I heard a speech from a guy one time who talked about the fact that he was an index investor as whole life. And he said he watched a lot of people. people who did outperform. And maybe outperform at the market by like 100 basis points a year or whatever

for their career. And how they put 70, 80, 90 hours of work in per week to do that. And he said, there were times when I was jealous of that, but being an index investor and not putting all my time and energy into trying to beat the market

or have these crazy goals and make a lot of money allowed me to coach my kids softball teams and soccer teams. And I actually had a life. And that tradeoff was worth it to me. I just want to clarify one thing I just said, I didn't mean multiple marriages, because a lot of people have multiple marriages.

He had multiple wives at the same time. And one of them was his family partner, I guess, for a little better, his actual wife who was raising the kids. And the other was his life partner, the one that he really loved. I don't, you know, whatever. The point is even like the smartest people in the world don't have it all figured out. Yeah. One of the things that Trump.

Did you read the Jason's wag piece about Munger? I thought this was one of the best thing I thought that came out of a lot of the stories, is how much of his personal success he said was partly based on luck. And he said that when he was a young boy, it was him and a girl, and a dog with rabies came down and bit the girl and not him. And he's like, that could have been me. And it wasn't. And I love the fact that he looked at that side of things.

Like there's these other forks in the road where things could have gone a lot worse. And I think a lot of successful people don't have that. Luck is not black or white where people attribute their success to luck and it's like false humility. I don't think that's what this was because Charlie, knew how brilliant he was, right? Now, two things can be true. You can be brilliant, and if you drop Charlie Munger into the United States at any period of modern times, he most likely would have been a very wealthy man. However, there are forks in the road where luck, where you get lucky, not because of your intelligence, but because in this case, he didn't get bitten by the dog.

Drop the two of us on like the 1600s, and I don't think our podcasting skills would take us very far. No, my back would have blown. I was not, I'm not fit for the, for the fields. One of the things that Charlie Munger said that I thought that really made me think over the weekend was he was talking about how he still lives in the same house, you know, 70 years later and how how people go wrong by having too big of a house and you can't raise normal kids in a large house. I think it was a just of it. It's really hard to raise like well-adjusted kids living in giant houses. And I was looking at a couple of houses over the weekend. To be fair, I think Munger owned multiple properties. I'm sure you do. I think some of this is, some of this is about rich people who pretend like they're poor. I think that's a little.

They're not pretending of their poor. Well, I made a true a couple years ago like, yeah, Warren Buffett's lived in the same house in Omaha, but he carved out like a 14,000 square foot basement that nobody sees. Do you remember in Snowball, they said Buffett built a racquetball court in his house?

So he had plenty of room in that house in Omaha that he lived in forever. He had a house in California. Oh, yeah. These guys, he spent a lot of time there. But anyway, but I was, but I was thinking about the real.

estate thing because I was looking at houses over the weekend, just as we do on Zillow. And there's a couple of homes in my neighborhood that are like just, you know, a dumb amount of money. But I'm, I'm looking at them like, yeah, it would be really nice to have that house. It would be really nice to be able to host 100 people, not that I know or want to host 100 people, but to live on the water to have a nice house would be very, very nice. And then, you know, obviously there's the flip side of that, which is, well, living in that house, people, and again, not that I could afford these houses, but living in houses like this, people think of you in a certain way, right, for better and for worse.

True. It's expensive as hell to maintain, right? Like, whatever, $50,000 property taxes or whatever it is, or no fun. The $19,000 mortgage payment is no fun. And so, yeah, you probably get an ego boost, and it's probably really exciting. Anyway, I was just thinking about that. I thought that was a wise thing that even if, even if it's like not 100% genuine, listen, they did legitimately live in the same houses for multiple decades.

That's pretty fucking rare for somebody with that much money. Yes. Even if they did have vacation homes. All right, anything else to say about the late, great Charlie Munger? No, I'm just recommending poor Charlie's almanac for anyone hasn't read it. Totally worth it. And I think there's a new version coming out, right? Is that the story?

Yes. There's a new version coming out. All right. Ben's take of the week. The Fed doesn't matter as much as people think. All right. Well, that's not Ben's take of the week. No offense.

That's David Kelly's take. Okay. I mean, literally the title of our podcast was the Fed doesn't matter as much as you think it does. I told you. I was already, you can't say that's take of the week. I'm just sorry. Now, go ahead. We had David Kelly on the show, what was it, six months ago or whatever?

It was in March. It was in March. I was agreeing with a lot of what he said then and I was agreeing with a lot of what he said now. I'm just putting out there. David Kelly and I were on the same mental wavelength. I was writing this post. already. So I put this on Twitter. This is the inflation for the U.S., Germany, UK, France, Italy,

and Canada. Look at how this curve goes. All the inflations for these developed economies goes up at the same time. They all come down at the same time. They got higher in some places to do. UK was 11 at the peak. Italy was 12.6% of the peak, and it's now 1.8. But the thing is, the path was all exactly the same. Okay. So what's your take? Well, so people want to blame all of the inflation on the Fed and the government spending. And it'd be ridiculous to say that didn't have any bearing on it. But look at this other chart from the decomposition of excess core PCE inflation. And look at how much they attribute to supply chains. Yeah. I think the supply chain, weird pandemic stuff that happened had a way bigger impact

than most people are willing to admit, especially in the Fed. I think the fiscal policy had way more impact than the Fed. Now, obviously, the Fed could have acted sooner. But even if the Fed did X sooner? What would it have done? Slowed the housing market a little quicker. We've already seen that the Fed raising rates hasn't had that big of an impact. So yes, for optics-wise, the Fed should have acted sooner, but what if it was just most of this stuff, I don't know, 80% of it was supply chains and the pandemic was weird and didn't matter what the Fed did? Well, can we agree that zero percent interest rates does some very weird things to the economy and zero percent interest rates are probably not a healthy thing. Inflation is not one of them. I don't think zero percent interest rates

costs inflation because it was at zero forever. I will say that them buying $20 billion worth of mortgage bonds in 2022 still definitely impacted the housing market in not so great ways. So I agree with you there. I do think that... And if you got one of those 3% mortgages because of it, that's another luck thing for you. Yeah, true. I do think that the supply chain things are a huge piece of the pie. Well, it was not only supply problems, but then the government handed money to people and then we had a demand, like all the corporations. It was a perfect storm.

Yeah, it was supply and then pent up demand because the corporations and the manufacturers all thought, well, like every other recession, people are going to pull back. And that's not what happened because the government filled the hole. So the fact that global inflation is falling at the same time tells you that this was mostly global supply chain issues? Yes. I don't think you're really going to blame the rest of the globe for having inflation that went up and down the same as the U.S. all in the Fed and the U.S. government for spending money. There's

no way. Well, you could say that there was all types of different fiscal monetary responses across around the globe. That's true. What's also true is that the U.S. is the world's superpower, economically speaking, and we can both export and import inflation, and we have a big impact in all of these other countries. Yeah, but the 2010s, the U.S. was booming and the rest of the world was falling behind. So we didn't, like, lift them up at the same time. And the other thing is, everyone wants to say the 2010's bull market was all because of low interest rate. And again, low interest rates had an impact, but then why didn't we have a huge bull market in Europe or Japan? Because they had even lower interest rates than us.

All I'm saying is the Fed doesn't matter nearly as much as some people would like to believe. All right. Fact. Last week, we said we're done with the sentiment stuff for the economy. Okay. Just when we thought they were done. We were done. They pulled us back in.

This piece from the FT, I thought was just this is the best part. So he said, I know what you're thinking. Inflation explains all of this, the sentiment stuff. People really hate rising prices and are reminded of them. every time they buy something. This is the Michael Batnick take. Okay? Inflation salience drowns out more distant or intangible gains. It's certainly a good theory, but countries around the world have faced steep inflation, many steeper than the U.S. presumably their consumers are also much more pessimistic than one would expect. Well, no, actually. So they looked at this sentiment versus

data in the U.S., France, Germany, and the U.K., and the only place that has a gap between what you'd expect based on the data in the actual sentiment is the U.S. so everywhere in the UK you'd expect sentiment to be bad because their economy's been bad same in France and Germany but the US has outperformed these other places we've had lower inflation and higher growth so you would expect sentiment would actually be better in the US but it's worse so how do you this is like to me this is the opposite of American exceptionalism this is I don't know what this is really but there's something unique about the US that we feel entitled to feel as angry as the other countries and they have a

way worse experience than we do. Like, things are worse for them than they are for us. Here's a counterpoint. The blue line that we're looking at, what is this showing you? This is showing economic indicators. Okay. Yes. France, Germany, and the UK are all underperforming us pretty dramatically. Yes. It's possible that if the blue line of the UK was where it is in the United States, that the way that consumer confidence would still be where it is. So it's hard to say. But look, the lines track pretty closely before. No, I understand. I understand. I understand. I'm just saying if the blue lines in the other countries were as well as were as high as it is here, it's possible that the red lines would, that the red line would cause a gap. We don't know.

Fair. So I have another theory. So what do you, so what is your theory for what's causing the gap here? Here's the other piece. I'm going to read. We're doing this again. What's the theory? No, specifically, what's the theory that's driving the differences between the United States and the rest of the world in terms of feelings? I think a certain percentage of the American population is more vulnerable to propaganda and negativity bias, and I think COVID made that worse. I think people, think about, now this isn't everyone, because every time we talk about the economy being strong, people will say, listen, my situation is bad, or these people's situation is bad. Listen, I have people in my own extended family who are going through not great financial

situations right now and could be better. So, like, just because you give us a few examples of people who are hurting, that's always the case. When the economy is bad, there's going to be people doing good. When the economy is good, there's going to be people doing bad. But the economy as a whole has been relatively strong. And so they, and so I think... Are you blaming our media, our social media? I think that there is a group of the population who is uniquely vulnerable to negative media and to social media. And I think, propaganda. Think how many people do you know that have political views that, that believe stuff that is just so far out of left field? You're telling me that those people, those same people, have rational views on the economy? People that believe

the earth is flat and that all this other weird political stuff, you think those people have rational views about the economy? And I think Americans, for some reason, are uniquely vulnerable to that kind of negativity bias, a certain percentage of the population, not everyone. Listen to this. Americans are consistently wrong in negative direction on almost every measure we pulled. By huge margins, they believe inflation is still rising, it's not, it's falling, that it has outstripped wage growth. Wages have outpaced prices and that they have become less wealthy

when in fact they become more wealthy. I think there's certain people who have been, who their brains, the internet has broken and I think will believe whatever they want to believe. I agree with that. 30% of the population that has their brain broken by the internet. But other countries have the internet

and other countries have far left and far right leaning wings of in media. You just think that Americans are unique susceptible to those, to that propaganda? I think it's possible. Don't you think people in other countries are more like cynical or? So are you saying that we're, we're just, we're very dumb. Dumb might not be the right word, but that's going to be, that's going to come off as really bad. Think about like the difference between sense of humor in different countries. Like, the Europeans have a different kind of sense of humor than us. And I feel like that, that's kind of

my way to explain. I think that there's, listen, we have more people than a lot of like European countries. And I do think that Americans, a certain percentage of the population has had their brain kind of broken by the media and social media. And that sounds like a bad thing to say, but I think it's true. I think some people. So I think there's like a third of the people that have that negativity bias. Maybe a third of the people really are in a bad place because they missed out of the housing market or their renting or their inflation is hurting them. And then the other 40% of people are doing just fine and doing okay. Is that fair? I think so. I don't know, again, that's a theory that's like, that's my point is it's buckets.

It's not, because when we say the economy's strong, it's not like it's strong for everyone because people always tell us, you know, the economy's weak. It's like, of course it's not weak. It's, so I think it's a little bit both, but I think this, I think the negativity part is, I think it's part of it. And now I'll put the stress. Wells Fargo, Wells Fargo CEO, Carltony tweeted tweet this. I didn't see the context. Charlie Sharp says, US consumer and businesses are very strong. Again, not for every, not every business, not every consumer, but... Okay, getting back to my negativity thing.

Did you see this tweet? This is from Heisenberg on Twitter. Who the fuck is this guy? It looks like an AI to me, but it talks about... Someone told me it's real. I said, there's no way this is real. So it's this guy, and it takes all of his thumbnails from YouTube. And this YouTube channel is 200,000 subscribers.

Each of these videos has tens of thousands of views. And he talks about how it's a nation. and free fall, and chaos begins Monday, and hell is coming, and the major economy is breaking, and every single video is fire with a crazy title to it. And this guy's got 200,000 YouTube subscribers. And again, this looks like it could be AI. And maybe in the future all this stuff will be AI. It'll be just doom scrolling nonstop for AI. But let's just admit that the negativity stuff, that's a real thing. For certain people can just get down that rabbit hole in, We'll never get out of it.

I'm tired of talking about this. All right. Here's the outrage, outrage. I don't want to, I just don't want to highlight, like, negativity all the time. I agree. Right? We know that this is a thing, and it's always been a thing and always will be a thing. People are attracted to fear.

It is what it is. We're not going to change it. Yeah. But my point is, I think it's gotten worse, unfortunately. Well, it's not getting better. So, okay, so here, I want to, I want to defend my honor a little bit because a certain CNBC contributor who will not be named, sent a message to Josh saying, hey, my warning signals are flashing yellow.

This is hilarious. Because Ben Carlson is dunking on the Bears on Twitter. And I would like to defend my honor here on this, because I don't think I am a contrarian indicator. I think that there is a difference between doomers, and these are the negativity people I'm talking about in Bears. I'm perfectly happy hearing a legitimate, rational bearish argument for people that like get bearish on occasion, but I can't stand the doomers. And the doomers are my my sworn enemy. I can't stand the people who try to pray on people's fears all the time.

Those are the people that I'm dunking on. If you have like bare, like, it's okay to have a balanced take that like this could be good, this could be bad. I'm bearish right now. But, you know, I can't stand the doomers. And that's what, so that's why I'm not, Ben Carlson is not a contraband indicator. I'm, is that fair? We'll say. We'll say. We'll see. We'll see. this person said that Ben's been feeling he's been feeling himself it's been pretty vocal been pretty vocal is this the Ben Carlson top we'll see all right uh fair i have some i'm saving the stats for later but i have some stats on this for like what this year in the stock market means for later we'll we'll save that for our michael batnik's 10 predictions for 2024

podcast you're gonna do it again right absolutely okay all right this was this was a headline that people got really angry at, but I thought the meat of the piece was actually decent. So Annie Lowry for the Atlantic wrote inflation is your fault, and people got really mad at that. That's like the outrage headline, right? People know if you print the right headline, you're going to get some outrage. But she says people have a lot more money on hand. More broadly, they seem to be less likely to change their purchasing habits and response at price shifts, even when budgets are leaner. A raft of studies have found that American consumers have become less price sensitive in recent decades. Households are using fewer coupons.

Remember people used to clip coupons all the time? My uncle is a huge coupon guy. I'm surprised that hasn't become a thing with inflation. That like there's not like all these coupons. Maybe there are coupon groups. People are spending less time mowing over what to buy when they're shop. You're out of touchness is showing. Of course there are coupons.

I'm just teasing. Why? Maybe because although prices of consumer goods are higher than were a few years back and still much, much more affordable than there were a few decades ago, thanks to globalized trade and manufacturing advances. So her whole point was, I think something we've talked about that, obviously, take the headline aside, that inflation is not consumer's fault by any means, people are still not really changing their habits, which I think is a little surprising.

I don't. You don't change your habit if you still have a job. You just save less, and maybe you go into more debt. Yeah, I guess that's true. It's just funny that I think in the past... Unless you're really hurting, you're not saying to your spouse, honey, we're not coming out for dinner on Saturday night, we, uh, prices are too high. Now, are there people that are changing their habits? Of course there are. I'm just saying people in the aggregate that shows up in

the data are not changing their habits because you don't want to, you don't want to go backwards. You don't want your lifestyle to go in reverse. Now, if we get a recession, people will change their habits. But absent that, rising prices don't apparently cause people to change their behavior you're in a vacuum. But if we get a recession and the unemployment rate goes from 4% to 7%, let's say, that's 3% of the workforce, there's still 90% plus people who are, like, are those people going to change their habits? Or just the people lose their jobs?

Just because you don't lose your job doesn't mean that you don't feel it. Maybe you don't get a raise that you were counting on. Right? Like maybe you get more anxious that you might be next. So just because you don't lose your job doesn't mean that you don't change your behavior. I also think credit card debt is just going to explode in that instance, if that happens. It's like wage growth falls off a cliff and really slows.

Oh, absolutely, absolutely, absolutely. All right. Here's some good news from the Wall Street Journal. Prices for long-lasting items known as durable goods. I really don't know. So durable goods is just stuff that you make that doesn't go bad. Durable goods are refrigerators and washing machines. have fallen on a year-of-year basis for five straight months.

In October, they were down 2.6% from their peak. This is pretty good. So they show year-of-year changes from October for selected categories, recreational goods, household goods and appliances. There you go. Appliances, motor vehicle parts. So we're seeing some deflation and stuff like this. I think this is, so this is the supply chain stuff getting better, right?

Yeah. And here's more in that vein. Car dealership guy tweeted, biggest price drop since August. So fun fact, Porsche Cayenne prices have dropped over 10% since August, more than any other luxury vehicle. And it says price drop refers to the actual transaction price,

not a change or reduction. I'm surprised how many of those I see on the road. The Porsche Cayenne? That's a sedan, right? No, Porsche Cayenne is the SUV. What's the sedan? Oh, the Panama? Something.

The Cyan is the truck, right? The four-door Porsche looks a little weird. Porsche. Do we say Porsche? We're not saying it right? I like it. I say Porsche. I'm a Porsche. I say Porsche. Sorry. Okay. Not sorry. I, but I, it's, so the Cayenne is 70, what, 67 still? I see how those on the road. But it was, but it went from 75 to 67. That's a 10% price drop. That's a lot of money. That's, that's good news. So we got my wife re-ups release on her Hyundai Palace.

She got a new one two or three weeks ago. And when we got the first one, I think we got it, we got it a little early because I said, hey, you got some equity. come take a look at it. And so we turned it into early. Two years ago, they had two of them on the lot. This time, the whole lot was full. So that, that was a good supply chain indicator for me. There's more cars on the lots now. What else is in here? The, I don't even know a lot of these cars. What's the Audi E-Tron S? That's, that's, that was $97,000. That must be their EV. You know, this is my problem with the electric vehicles. I'm all for saving the world and all, but the electrical vehicles are still too expensive in my mind. I'll come down, no?

I think Tesla's probably going to bring the... Oh, you saw the cyber truck videos? God, what an ugly car. Just heinous. Just absolutely heinous. I want to almost take a contrarian picture and say it looks good because everyone says they hate it. I mean, let's be honest, though. A lot of tech bros are going to buy that just to show off.

Like, people are still going to buy that thing. Absolutely. Listen, I don't like to be too judgmental, but I'm sorry. If I see somebody driving a cyber truck, I... I'm just being honest. I'm going to judge them. I think that's fair. I mean,

it looks like something Sylvester Stallone would have driven in demolition man. Oh, it's a great call. It's like a 1990s version of what a future car should look like.

What was Wesley Slipes name in that movie? Cyrus? Didn't he have the blonde streaks? Was that peak Wesley Snipes? Pretty close. You know what his downfall was? He didn't pay his taxes.

He needed a better financial advisor. He needed a better CPA. He was He was him Before him was a thing Yeah Oh Simon Phoenix That's a great bad guy name

Total 90s movie Andrew Bullock All right So I think 2023 is a great What am I trying to say? Reminder Yeah it's a great reminder that

This is why you don't invest On headlines Because if you think about what we've gone through to get in the market is four or five percent from all-time highs now. Actually, actually alert our beautiful Dow Jones Industrial Average total return. Oh, yeah. All-time highs. Is it from total returns?

Yeah, I wasn't even using total. We're back. We did it. All-time highs. So, I mean, two wars, 40-year high inflation. By the way, talking about negativity selling, shame on us. We're 33 minutes into the podcast and haven't even mentioned the fact that those beautiful industrials.

All 30 of them. Total return basis. All time high. Pretty incredible. We're back. All right. Now I have to look at the S&P. So I have these charts in the dock. So, Ben, the S&P 500 is within spitting distance, I believe, is the correct nomenclature here. Is that what we call it? Yep. Stones throw spitting distance, that kind of thing. We're right there. How far away? So how far away? I don't know. Percent or two? Oh, 1.8% as of this morning. And we're.

recording on Tuesday. Think about all of the things that all of the worries in the proverbial wall that we've climbed this year, from inflation to interest rate hikes to banks to the potential credit crunch that ever came to leading

economic indicators and the yield curve and version. Here's the caveat I want to hear because I tweeted something about being close to all time highs yesterday and someone said inflation adjusted. And I said, no, no, no, no. No one ever inflation adjusts this as, the S&P 500 of the Dow. You can't do that. That's just a thing no one ever does. If that's your caveat, then you're splitting hairs here. I don't like that. Okay, let's think of

some good news here. So we're always talking about what's the downside? What's the recession and a bare market and rates go higher? Neil Duda at Renaissance Macro, who I think it's been one of the best analysts on this whole period of inflation, says the outlook for 2024 right now is pretty good, actually. Like, if inflation continues to moderate and we could see decent growth, like a good setup. So he says, if I'm right, and we have that setup of, like, decent growth, inflation falling, we get kind of this Goldilocks scenario, and the Fed is cutting rates, even as the economy continues to grow at a modest pace, it will be a nirvana-like situation for equities. Stock prices are up already. Many stocks have underperformed the broader market. If the Fed indeed

cuts rates next year, it could provide a lift to some of these laggards. So we could see beyond the magnificent seven kind of thing. If we have this situation, where a soft landing occurs? What are the odds? The odds? I don't think that's a, I don't think it's that far-fetched that in 2024, equal weight plays catch-up. Spoiler, that might be in my 20-24 predictions. I don't know. Maybe it is. Maybe it isn't. But I don't think it's too unlikely. Okay. That's not contrarian enough for a prediction, I feel like. Not all my predictions are contrarian. Some are very boring follow-ons and some age horribly. For example, in 2022, value beat the shit out of growth.

And I thought that trend would continue to 2023. Was I right? No, I was dead wrong. Can't know. What was your Bitcoin one, though? You said Bitcoin would double? I got a lot of things right. We'll review that at the end of the year.

All right. So I feel like whenever there's a big move in interest rates, you and Josh and I will have a little slack conversation about it, and Josh will say, what's happening here? And we'll throw out some ideas. And then we always end with, you know what? It's just positioning, right? Isn't that where we're always kind of fault? That's always our conclusion.

It's positioning. it's investors buying bonds or selling bonds. And so if you look at, think about the, remember the narratives a month ago in treasuries when they went to 5%. It's higher for longer. When did we did that episode? Honestly, was that, was that six weeks ago? But it was also.

It became a consensus almost overnight. And it was also the government's finances are out of control and they can't pay their debt and all these things, these narratives. And we talk about the narratives because it was fun and it was interesting. And now all of a sudden, whoosh, right back down. So you went from 3.3% was the low in the tenure this year. Then we shoot up to 5%. Now we're back to 4.2%.

So I think the next narrative, and it's fun to have these narrative talks, but you really just don't know. The next narrative position is going to be, are rates falling because of a soft landing or are they falling because of slowing economy? And it's going to take a while, I think, to realize who's right about that. But that's the next funded argument, right?

It's exhausting. But isn't that what it's going to be? Sure. Yeah. Probably. It is just bizarre to me how quickly, the bond market is just as confused as everyone else. That's my takeaway here. Yeah. All right. So this is interesting. I don't know if this was on your radar, but Arc had just in November, Arc had its best month ever versus the NASDAQ 100. It's on a relative basis. Isn't that wild? So the NASDAQ underperformed ARC by 20-something percent.

Geez. So a year-to-date basis arcs up 56%. Not bad. From the highs in 2021, still down 70%. This thing hasn't bounced nearly as much as you would think. Flows have not returned, though, to arc. Oh, really? Probably not too terribly surprising.

Well, but it's interesting, though, because remember the flows kept happening during the downfall, so they finally slowed down a little. So this fund peaked at $28 billion. in February 2021, which was the height of the meme stock craze. Check this out. Now it has about $9 billion. Look at the flows.

And they peaked in December 2020. And now it's just been in, out, but pretty wild. Pretty wild. 2021 was a crazy year. I'm working on... So the dollar-weighted, not that you can judge a investment manager on this, because this is more about investor behavior than anything, the dollar-weighted returns in ARC have to be awful, just dreadful,

because all the money that went in. right before the peak. Throw on this. Okay. I meant to talk about this last week, and this topic blew up this week. We talk often about how intelligent people think that their intellect will transfer over into the stock market. I'm smart.

I can pick stocks. Success in one area of life means I'll have success in this area. We talk about that a lot. What we don't talk about a lot is the opposite. it is people in finance thinking they can do things outside of finance. And David Tepper is right now the poster child for this. So front office sports. Wait, before you get to this, David Tepper is one of the most legendary hedge fund managers

and probably doesn't get enough credit for his track record. But he navigated the post-GFC crisis about as well as anyone when a lot of hedge fund managers did really, really bad. Becky quick asked Charlie Munger. She said you've spoken about the importance of psychology and in investing, is there a cognitive bias that you think is particularly significant in the markets today? And Charlie said, there are lots of cognitive biases that are very significant. One is a constant tendency to override your own intelligence and skills and decided what to do and what not to do.

So here's a quote in front office sports. As this last five years, as Panthers owner have shown, buying stakes in distressed and undervalued companies isn't the same as running an NFL franchise. Here's another quote. His track record is exactly what I would expect it to be. There's a difference between being an investor and an owner. People like Tepper have made lots of money, but that doesn't necessarily translate into them being good owners. They don't know what it's like to build things. The founder of a sports consulting firm said, when you run a hedge fund, you are making decisions constantly every day.

Being an NFL owner requires a different skill set. So through 93 games, the Panthers are 30 and 63, which is obviously not great. There, he's just going through coaches like water, which obviously... He fired like four coaches, right? Just destroys culture. I think he's been through six already. And this is interesting. So given the new requirement or given the requirement that team purchases be made with at least 30% cash,

the next new NFL owner will likely continue the trend of owners coming from the financial world. Now, NFL teams don't go on sale very often. But, yeah, I just thought this is an interesting. It's also true that there have been people in the financial world who have been successful. The guy who bought the... The box. Lazzery? The guy who bought the Red Sox was...

was a former CTA guy, right? Henry. So there have been financial people. But yeah, it's true that. So I guess the- Cut your winners. Josh Harris owns the Sixers. Yeah, cut your winners short works better in hedge funds

than it does in coaches, huh? Yeah. So this chart seems sort of out of order, but not sure how it got here. But the last four-week change in the AAI-I-Bair Index is one of the largest drops we've seen in the last 20 years.

And this would coincide nicely with the Ben Carlson top. Well, wait, but everyone got all bared up because we had a 10% correction. And now we've gone the other way. Yeah, I mean, look at this. It's pretty wild. So the last four weeks,

the bare index. I do think the difference between having this mini bull market that we're in or whatever it is and having a sustained bull market from current conditions, that seems a lot harder to me. I still, if I'm trying to guess the long term, I still think that I'd be a little skeptical on that, having a bull market start from like three and a half percent unemployment.

I don't know that that's ever happened before. That'd be my one worry about, I think this time can put like an extended like 10-year-long bull market or something. Seems bizarre to start from this spot. We had a reset in stock prices. We had rolling recessions all across the economy that never showed up in the aggregate data. but you're right. We never had the labor market recession. Weird, weird, weird times we're living through.

All right. I know we said we're done on the negativity, but this one got me. I just, Americans are doom spending. Here's why that's a problem. We got to stop giving so much oxygen to these. You know, but I like to tell people why they're not. I just like to tell people why these are not true. But the more people talk about it, the more people click on it, the more we get.

It's like this circular doom loop that we're in. But that's why I like to point out their fallacies. Nearly all Americans, 96% are concerned about the current state of the economy, according to Intuit Credit Karma. Still more than a quarter are doom spending or spending money despite economic and geopolitical concerns. Even as inflation and high interest rates of squeezed budgets, a record 200 million shoppers turned out between Black Friday and Cyber Monday, that's a new record. Much like doom scrolling, we're seeing people mindlessly shop to soothe concerns about the economy in foreign affairs, which could take a toll. their financial well-being. Give me a fucking break.

Just stop it already. Although, I will say that... People are spend spending. They're not doom spending. Well, I personally doomed spent on a backpack. I got a backpack yesterday. It came in the mail. I forgot that I even bought it.

Excuse me, sir. You're almost 40 years old. Stop buying backpacks. Interesting. That's a New York thing. Listen to this. I told Kobe to get his backpack. And every time I say backpack,

they look at me like, what? I'm like, your book bag. Get your book bag. Oh. They don't know backpack this? They don't know what a backpack is. Wait, other word I was thinking that's going out.

This word is dying with the boomers. Here's a word you will never hear once boomers are gone. Supper. How many people under the age of 60 say supper? Supper is very, very, very old. That's a terrible word too, right? This is not quite to the same level of words that are dying, but a word that people older than 60 say, evening.

Ah, that's true. Evening, ma'am. Wow. I got called sir the other day at the gym. That was not great. My backpack came in the mail. And I bought it because it's like a travel backpack where they've got a nice pouch for your sneakers. And it came and I looked at it and I said, why did I buy this?

I feel like people who walk around New York have backpacks because you have to bring all your stuff with you ever going to go when you go into the city. Well, yeah, I carry my laptop. What am I going to carry in a briefcase? Yeah. that's fair. Speaking of things that are going extinct. All right. Apollo had another good, I'll look for the U.S. economy piece with like a million charts. Here's some more good. Here's some good news. Total employment is now 4.5 million jobs above February 2020 levels. That's kind of crazy to think about. We had that huge drop off where unemployment rate went to 14%.

Now we have almost 5 million more jobs than we had back then. Remember the World Bank was calling for like, I think it was a world back calling for like 25% unemployment? Yeah. It felt like it at the time. See, that's why I'm grading the economy on a curve based on, like, how bad things were in the pandemic or how bad they could have been. That's not the real world. I have an economy in my head. That's all it matters. Economic Metaverse.

You want to talk about crypto? Yes. All right. So Bitcoin back to $42,000. It's always funny to me how the big, a lot of the big moves happen on the weekends and at nights. Just when, like, no one's paying attention. but this, whatever you call this, a new bull market, a snapback from, what did it get to at the lows? 14 or so, 15. So it's more than doubled.

The Bitcoin bottom is a really great lesson on how markets work. It bottomed when things were. Was Sam Begman-free basically? Actually, no, it didn't. No, it didn't. The real, real bottom was in September. so then in September it bottomed at what was the low here uh the low was oh no I'm sorry I'm sorry I'm sorry I'm sorry the recent bottom like the local bottom because it did it it got as low as 15,000 in November 2022. Oh, you're right. That was that was the FB uh was that one FTX blow up? It bottomed with him. Yes. It bottomed with Sam Baker. Okay. Okay. So it did. So it actually did bottom when the FTX news came That's kind of wild.

So that's how markets work when things are at their blackest. But you could have said in the case of crypto specifically like, all right, it's a wrap, going to zero. And we kept saying, why is it not at, why is it not at 5,000? We couldn't believe with all the bad news that it wasn't even lower. That just won't die. And I think there was another, here's another thing. I was telling you this. This is the way that markets work, I would say certainly not that this is like super unique to Bitcoin.

But the other day I said to you, it's like, And I was sort of, I said this talking cheek, I was left. I was like, man, I don't know, I don't own enough Bitcoin. And the truth is, I probably own way too much of it. But that's how your brain behaves, right? Like, the brain and the brain is. Crypto is different than the stock market in this way, is that when it's going up, you think, yes, I need more.

And when it's going down, I think, why do I have any of this? Way more than the stock market. So I don't know if this is like recency bias or hindsight bias or whatever the hell you call it. But it does seem like it's not unique to crypto, but it is a, especially in crypto. This move in crypto, though, if it continues, and we get to like 50,000 and there's all these pieces, but hey, crypto back above 50, people are just going to hate this so, so much because there are a lot of people.

There were so many grave dancing, and people just like, this is it, it's done. There are people who don't get crypto, who don't like crypto, which is probably a lot of people, most people. But then there are people whose, like, identity is tied to crypto failing. And for those poor people. I really want it. And I still don't quite get it, get it? To me, it's still, it's a call option, and that's always been my case.

I just think it's funny that crypto got crushed when inflation spiked and rates went up. And then it's rallying now that inflation is falling and rates are falling. And it's like, eh, we'll just push those other macro. Like, I think crypto people should just completely disavow macro for good and just not bring it up to any of their points because obviously that narrative failed. Well, the crypto macro takes were just horrendous. I mean, Jack Dorsey is a great example of this. He said hyperinflation is coming.

He's a big crypto guy. And the crypto macro takes are they're not all, but they feel sort of anti-American. And not all. I'm playing with the broad brush. But it's very easy. I would focus more on the technology and the macro. Just leave the macro alone. Like, you don't need to have the macro.

The people whose identities are tied to hating crypto, I kind of sympathize. But you know what I did instead? I bought crypto to protect myself, to insulate myself in the off chance that this thing goes to, that this thing went to $100,000, I think I would have, if I didn't own it, I would have spontaneously combust it. That's the reason I bought it in the first place, too, because I was getting so fed up with beating my head against the wall going, I don't get this. I don't get this.

Oh, well. So, yeah, it feels like a call option. NFTs are back, I guess, or maybe, I don't, I don't follow the NFT market too closely, but pudgy penguins were a big, wait a minute, sir. You did follow it closely for like a month. I did. I did. No, no, no, I was super interested in NFTs.

in what was happening at the time. Just a wild, wild scene. Can we just say that literally everything is tied to the price of Bitcoin? Like, Coinbase got crushed. Now Bitcoin's going up. Coinbase is going up. Bitcoin goes up,

NFT price. Like, everything is just tied to Bitcoin. That's it. So I don't think it's like shocking that crypto is back. I mean, it wasn't one of my predictions of 2023 that it would double. So I'm not shock-shocked.

I am surprised that NFTs are rocking again. Like, are we back in? we're back in 21, we're doing this again? Cycles move faster these days. I thought interest rates rolled everything around us. Isn't it just if crypto prices are higher, people are finally able to sell

some of these things so you get more activity? Because it was just dormant forever? Is that how it works? A lot of people would say, hey, dummies, this is all money laundering. Like, what are you talking about? I don't know. I don't know.

Never a dull moment. Never a dull moment. I want to do some more myth-busting here. Someone sent me, a bunch of people sent me this, because we've been talking for recent weeks how housing prices have come back to all-time highs. And like five people sent us this and said, hey, wait a minute. I see this chart here from this Kobayasi letter. I, it's the guy from usual suspects, I think. New home prices just crashed by the largest amount on record down 18% over the last year. The biggest decline going back to 1960s. Chris walks in here. I've clearly got a fucking microphone in front of my face. He's like, are you recording? No, I'm on a Zoom Unbelievable this guy All right New home prices crashed

By the largest amount on record Down 18% of the last year The biggest decline since 1965 Even worse Even in the worst month of the 2008 financial crisis Biggest decline was 15%. So they talk about how this is bad And you look at the chart here

And it makes this look bad People are going, wait a minute How are new home prices down 18% If home prices are at all time highs This makes no sense Because there's so many more new homes being built, right? Well, Logan

Modashami, good friend of the show, set these people straight. The reason the median housing price for new homes is down is because they're building smaller homes. This is actually a good thing, right? That's great. This is not like prices crashing. It's more people want to build new homes because that's kind of the only game in town and builders are buying down mortgage rates. And so they're actually building smaller homes. They're building like three and $400,000 houses now instead of $500,000 and $600,000 houses. So the median price of new homes sold has actually fallen. This is a good thing. This is good news for people who've wanted smaller starter-ish homes. So not the end of the world. We need people like Logan to come in here with data

and set these people straight. I love it. Well done. And he loves, Logan loves dunking on Dumers more than I do. He does. Dunking on Dumers. He loves it more than anything. He's the LeBron James of Dunkin on Domingers. Last week, I talked about why don't more people leave these high places like New York? Because their inflation, their cost of living would immediately get better. And you live where you live. I know, but I'm saying if people can't survive financially in a high cost of living area, don't you think some of them have to be thinking, I got to get out of here to a place that's more affordable. And some of them are.

So there are. So the 10 housing market places with the biggest outflows, San Francisco, New York, Los Angeles, and D.C. And they're going to Sacramento, Miami, Las Vegas, and Salisbury. So this is quite a lot of people, 25,000 people left New York. but how many people live in New York? Seven million? Yeah, it's not that. And you probably have more coming in, I guess.

This is in a net outflow. No, this is not. It's not. It's not. Yeah. But still, I, I'm surprised that, like, you won't be seeing more of this than years ahead. All right. I have two dumb surveys this week.

The percentage of, this is from morning consult, the share of consumers who said they would prefer that personal incomes go up or prices go down. 37% want their personal income to go up 63% want prices to go down Which part of this is dumb The 63% You would rather see

You'd rather see prices go down than your income go up Are these people mental? They're just being honest That's dumb You don't want your income to go up This is like the relative Heads being broken thing

All right here's another one This is from CNBC 60% of investors with one million dollars or more of investable assets said they are more likely upper middle class according to a recent Ameriprise survey of those making more than $175,000 a year roughly of the top 10% of tax filers. One quarter said they're either very poor, poor, or getting by, but things are tight. Even the share of people making $500,000 to a million dollars said the same. Despite their high net worth, just 44% of all millionaires felt very comfortable, according

to Edelman Financial Engines. So we've talked about this a couple weeks, so I think 12% of American households are millionaires by net worth, but that includes a house. So to have a million dollars in investable assets, I'm guessing that's 3% of the population, maybe. I'm going to say something that people are going to get angry at, but it's the truth. Having money is expensive. And I'm not saying that you should feel bad in any way, shape, or form, cry me or ever. That's not what I'm saying. The reality is that when people make more money, they spend more money. It's how you fit. What's the Seinfeld joke about the newspaper every day? It's incredible how it all fits on the same page. All the news fits exactly on those eight pages of the news or whatever, yeah.

Okay. Same thing with money. Same thing with income. The goalposts move. Your lifestyle expands. Like that is just the way the world works. So that explains why people who make more money don't feel like they're getting ahead. But don't tell me your upper middle class then. your upper, upper class at that point. If you have a million dollars in investable assets. Fair, I'm not saying that it's right. I'm just saying that's how people feel. That's how people feel.

And this is the habit thing. And maybe this is part of it too. So this is interesting. This is from Twitter from RICO. No one fully appreciates how volatile income is. People get raises. They become unemployed or disabled. They marry, divorce.

They retire. They appear temporarily rich from an asset value, sale, etc. Nearly half of this year's top 1% will not be in next year's top 1%. It's kind of a wild number. How common is it? for people to overextend themselves. And I'm not talking about athletes and celebrities, which happens all the time and say,

how the fuck is that possible? How is that possible? But it happens with regular people that are making good money. My favorite... It happens all the time. One of my favorite studies is they studied people in Canada who won the lottery.

And their neighbors were more likely to go bankrupt than the regular person because they saw these other people spending money. I do think... Yeah, and then you make money and you hang out with people who make money and then you try and keep up with them. I mean, this is, keeping up with the Joneses is not a new phenomenon.

Yeah, but this is another thing I think social media has taken to a new level. The Joneses used to be the people on your black or in your town. Now the Joneses is everyone. What social media has done to this is, you're right, the Joneses are everywhere. And articles like this, you never had articles like this back in the day. And it triggers people. What I just said, even though, again, I'm not saying these people deserve sympathy. That's not what I'm saying.

But articles like this piss people off. It's like, remember that spreadsheet? I forget what the numbers were. People with $4 million have no savings. Well, it's like, yeah. You make $4 million. You spend, you invest, and you save, and there's no more savings.

That's how it works. You spend everything or you does everything. But to your point, people get mad at a story like this, and then if they ever get a million dollars, then they act exactly the same way. Of course. Right?

Of course. Okay, here's where keeping up that the Joneses have gone wrong for people's personal finances. This is from charter. America's love of trucks has only grown in recent years. It shows the share of,

purchases. And in the 1970s, it was like 80% of cars were sedans or wagons. That was the biggest one. We spoke about wagons last week. Oh, speaking of, speaking of, I have a follow-up on your parents' van. You know, they never did find the Zodiac killer. That one finally came to a week later. Not bad. I mean, that is very, I still need answers. I need more information. It was like a gray conversion van. Honestly, it should just had a sign as a candy coming here. Was your dad a painter? No, of course not.

My dad does less manual labor than I ever did. So, sedans and wagons are under 26 from 80, and trucks and SUVs were, I don't know, less than 10% up until the 90s and now 45%. Which, the funny thing to me is everyone needs, like, the huge suburban and Tahoe and stuff this year. And I'm just telling you, please keep holding out. Okay? I know you wanted to get one. Who me? Yeah.

But people had... Hang on, I did the prudent thing. It's just, it's just, it's, it's, it's ludicrously expensive. Yeah. But people back in the day had more kids than people have now. And yet we think we need bigger cars and trucks now than we needed back then. That's the funny thing is that my parents both come from families of five kids. And do you think they had a suburban to haul the kids around and stuff?

No way. They made it work with like one car. between the whole family somehow it's we we were we went out to dinner on saturday night and friday night and by the way i've told robin that's too much i'm out on friday dinners oh i am the same way i do not like plans on fridays at all no it's it's too much but then she's like well what you get to go out just because you got on thursday it means we can't go out on friday and she's got a fair point there that's a fair rebuttal actually robin score one for you It's a favorite bottle.

But the reason I bring that up is because we took an Uber home. There were six of us, so I got the Premier one, which was like the Tahoe XL. Ooh, Premier. Fancy guy. Well, there were six people. I wasn't being fancy, but you needed a six-seater for six people. My God, is that a humongous car. Massive, right?

I get the appeal. It's very nice. It's like driving a pontoon down the road. It's very nice. Very spacious. All right, recommendations. I will... You know what?

You go first, Ben. No, no, no. I'm sorry. Sorry, before we get there. Real quick, Ben, I just want to talk about your take on Twitter. Perfect number of donuts, two. Perfect number of beers, three. Perfect salon length, three and a half minutes.

Perfect number of lifting reps, eight. I don't know why, but it's true. Perfect movie length, one hour and 45 minutes. perfect number of TV episodes per season, six only British shows do this. I have to say, 10 out of 10. This is a perfect take, especially the TV episodes per season. I love the only six episode shows that I could think of was Bodyguard, which is a British show. Yep.

And was, what was the show in Pennsylvania with Hugh Grant and... Oh, yeah. Nicole Kim in one. Yeah. Not Nicole. Yeah, oh, Nicole Kim in. And not Maisel. What the heck? What was the name of that show? I can't remember now either. But I think that was the six-episode miniseries.

I started watching the fall of the house of usher or whatever. And, I mean, it should have been a four-episode show, maybe. I gave up because it's like it's too much. I gave up, too. I think I gave it through four and then Robin finished it. But you're right, it's too much. It's TV six episodes. It's perfect.

Good morning, Michael and Ben. As a spine physician, I would like to comment on the important topic of airplane seat reclining. First of all, the seats are made to recline, which means it's okay to recline them. Secondly, reclining the seat decreases the pressure on your disc, which is under a lot of stress while seated and bouncing up and down on airplanes or cars. I see a lot of people with disc herniations after long air travel. Do yourselves a favor and recline your airplane seat. I'm talking to you, Michael. All right.

So if you want to recline your airline seat, you need a doctor's note then. Well, I'm going to turn around. I mean, this person has won't remember. I'm staunchly anti-reclining because I think it's just impolite. but, you know, if we're talking, if we're talking medical health here. Dr. Bob says it's okay. One more airplane email. I write this while we experience some rough air on a cross-country flight home.

And I'm reminded to send my thanks your way because I've taken to listen to the podcast during turbulence to calm my irrational nerves. It gets me out of my own head and you guys are just easy to listen to. Finally, for anyone else who gets a little anxious, I found the turbulence forecast on this website. It's turbly.com, T-U-R-B-L-I-com, to be extremely accurate. And knowing ahead of time, it allows me to prepare mentally. The site is called Turb. So I said this on a show a couple of months ago. I, like most everybody else, don't like turbulence.

I mean, who's a fan of it? That'd be weird. You know what I like? I like turbulence. Planes don't crash from turbulence. True. It happens all the time, right? What?

Planes crash from turbulence? No, I'm saying turbulence happens all the time. It happens all the time. It's terrible. One more thing on... on the inbox. We get a ton of emails every week. And it's one of my favorite things to come out of this podcast is the way that people

open themselves up to us. And Sean over here, I'm looking right at him, helps us with the inbox and helps us with everything else and has been indispensable. Just what a great, what a great hire. What a great employee. Sure. Sean is our left tackle. Sean is our left tackle.

However, we gave him access to the inbox. and we're revoking his access. Not because Sean did anything wrong, but when you, the listener, sends us a personal email, I want to send you a personal response. So just know that if you had emailed us in the past couple of weeks

and you sort of felt like you got a impersonal response, that's Sean's fault. But you know who's fault? It's my fault for letting that happen. So rest assured, if you come to us with a personal email, you'll get a personal response. If you want to write to Michael at all his horror flicks, have that it.

He'll write you back. All right, recommendations. I don't know if Wanka's getting good reviews or not, but this is interesting. Hugh Grant plays in Oompa Lupa. Did you see the Johnny Depp one? Why do they have to keep trying to remake these stuff? I had no interest. No interest.

No interest. So I saw... I'm sure my kids will probably want to see this, but I have no interest in it. No interest. I saw on Sunday night at 8.20, I've been to the theater in a long time. And you know what? I said, that's time. Get off your ass. Go to the theater. I saw Godzilla minus one. And I have said over the past couple of weeks, I was talking a lot about Godzilla, that I'm not even a fan of the franchise, which I know sounds weird considering that I'm endorsing the show on Apple, Monarch, legacy of monsters,

which is quite good. And then I also want to see Godzilla minus one. And I'll get to Godzilla minus one in a second. the Hollywood versions of the Godzilla movies are trash, in my opinion. And they're very, they're just not good. Kobe is excited for Godzilla X King Kong. Is it N King Kong? I saw the trailer for that movie. It looks horrendous. Did you see the trailer yet?

Yeah. Looks awful. It looks awful. Nevertheless, I'm going to bring COVID to the thing. My son will love that movie. Yeah, I'm going to bring COVID to see it because he's into it. Okay. So I saw Godzilla minus one.

The reason why I want to see it was because it's not the Hollywood version, it's Japanese, and it's in subtitles. So before I get to the review of the movie, these were the coming attractions, which speaks to the times. It was an independent film. Then it was a Planet of the Apes. Another one? Then it was Ghostbusters, which actually looks good because we've got the original castback. And then it was a Blumhouse. And just those four trailers, that's the world that we live in.

An indie, a franchise, a franchise, and a Blumhouse. horror movie. I guess it gave us an indie. And I don't hate it. Okay. So I was thinking about this movie as I watch this. And are foreign films better than domestic films? Or do I think they're better because they're in subtitles and I have to pay more attention

to them and it has my full attention? You know what I always wonder? Are these people good actors? Because I can't tell because they're talking a different language. Are they really good actors or not? That's a great point. So this is the 37th Japanese Godzilla film. And guess what?

This movie was awesome. Like, it was more about like the psychological horrors of war than it was about Godzilla. But the monster scenes itself were, I mean, this, this was easily the best Godzilla movie I've ever seen. Easily. It was made on the fair. It was made on a $15 million budget, which blew my face. And it was one of the better movies I've seen all year.

It was fucking awesome. It was really, really good. Shockingly good. Godzilla minus one. Credit to the Japanese for making an incredible film. Okay. Any other ones? Horror flicks this week?

Any other horror films? I did see one that I've listed to recommend that I didn't care for, so I'm not going to shut it out. But somebody said, somebody did email us. Since you were both pondering this on the last episode, I thought I would share something. I recall reading in high school, a very short essay from Stephen King on why we watch horror movies. I hope you find it useful. We'll link to the son notes, of course, but I just wanted to grab this one bit that I thought was interesting. From Stephen King, the mythic horror movie, like the sick joke, has a dirty job to do.

It deliberately appeals to all that is worse than us. It is morbidity unchained, our most basic instincts let free, our nastiest fantasies realized. And it all happens, fittingly enough in the dark. For those reasons, good liberals often shy away from horror films. For myself, I like to see the most aggressive of them. Dawn of the Dead, for instance, as lifting a trapdoor in the civilized forebrain and throwing a basket of raw meat to the hungry alligator swimming around in that subterranean river beneath. Why bother?

Because it keeps them from getting out, man. It keeps them down there and me up here. It was Lennon and McCarthy who said that all you need is love. And I would agree with that as long as you keep the Gators fed. This is a very good essay. I can see that. I'm in on the New Fargo show. The one last season I thought was awful.

I think it's done like five of these seasons now. The last one with Chris Rock was just not good at all. I didn't even finish it. This one is, I thought, started off great. It felt like the movie. I rewatched Black Swan on Netflix. Have you ever seen this movie? It's a Darren Arnowski movie.

You never saw it? No, I have. I just haven't seen it since it first came out. I saw it in the theater. This is a tough watch. It's kind of a deranged movie, but it's almost like a horror movie in some ways. I mean, it's like psychological thriller slash horror, but it's a, that's a good movie. I kind of forgot.

That's a really good movie. A little out there, obviously. Really good. I like that one. Natalie Portman and, um, Milakunis. Sarah Marshall. The Milakunis.

Not Sarah Marshall, but yeah. Milakunis. All right. All right. Where should people email us so we can respond to them? People should email us at Animal Spirits at the compound news.com. Personal emails, personal responses. That's what we're all about here.

Thank you for listening. We'll see you next time.