Animal Spirits Podcast - The Crockpot Recession (EP.304)

Episode Date: April 19, 2023

On today's show we discuss why the bond market is so confused, why consumers are so confused, why Vanguard continues to dominate, why inflation is finally heading lower, why millennials aren't as broke as you think, why first-time homebuyers are out of luck and much more. Learn more about your ad choices. Visit megaphone.fm/adchoices

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It rates itself. visit paceretefs.com for more. There you go. Paceretefs.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holtz Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions

and do not reflect the opinion of Ritt Holt's Wealth Management. This podcast is for informational purposes only and should not. not be relied upon for investment decisions. Clients of Rittholds wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. I went into my closet yesterday to look for a button up shirt. Is it buttoned up or buttoned down? Are they synonymous? Button down. You can go both ways? Button down. I've heard it refer to as button. I think it's because you start from the top. Does anyone ever start with a bottom button when they're buttoning their shirt? No, you start from the top. Yeah, that's true. All right, button down.

there you go. I've got a meeting today that I needed to be dressed for. And I went to my class and I said, hey, wait a minute. I had none of these. Not that I have so many, but I couldn't find anything. Like, wait. Oh, that's right. I think I went to the laundromat and dropped the shirt off a couple of months ago. So I went to the laundromat and gave them my phone number and they said, don't have anything. I said, yeah. It was a couple months ago. And it's like, is there like an old pile or something? So she goes, hold on. Let me check. Like lost and found. So she brings back my stuff, and these are the dates of the drop-off. I've got one from December 2022. That's not even that long ago. Five months? Yes, it is. You left your dry

cleaning for five months? I got one from February 2022. Wow. What did they say? Do they throw them away? I guess they laughed. I own three of these shirts. Like, I own three buttoned-down shirts, and they were all at the dry cleaner. Did you get it back or not? I got them back. What do you mean? Look at this. I'm wearing it. I couldn't tell you the last time I bought one of those kind of shirts. One of the things I did in the pandemic was I gave up on ties forever. I don't care if it's a wedding, a funeral, whatever.

You've never worn a tie. I've never seen you in a tie. Yeah, I'm done. I occasionally would wear a tie. I'm done wearing ties. I've just decided. Funeral. A funeral is the last place I will wear a tie.

Couldn't you just go sport coat, slacks, shirt, no tie? I respect the dead. Apparently, you don't. You know what I'm wearing underneath, though. I don't know if you could say. You can't say. I'm wearing khaki bird dogs. You have a bird dogs below and, yeah, you're party down low and business up top.

Looks great. Thank you. From the Wall Street Journal, they talked about the Fed pause. Okay, this is from Goldman Sachs. Going back to 1982, the S&P 500 returned an average of 19% in the 12 months after the Fed funds rate peaked according to Goldman Sachs. Goldman studied six Fed tightening cycles over that time. Stocks rose after all but one of them. Which was the one where it didn't?

Oh, that's a good question. I don't know. Probably 2007, because didn't they raise rates into the great financial crisis? I'm guessing that was it. But I like stats like this just in terms of context, but I feel like this is a throw-it-out-the-window situation. Don't you? Where the market is so much better at sniffing these things out ahead of time and moving quicker and maybe not reacting the same way, especially this cycle, where I would say, not saying it's not going to work, but just saying that, banking on this type of thing in this environment. I don't think you can do that anymore. Just anything? For this kind of thing, don't you think that the markets just move so much faster these days with this stuff? And if that was going to be the case, hasn't the market already kind of moved ahead of it? Back in the day, the Fed never talked about what their approach was going to be. They never said anything. Now the Fed is telegraphing everything they're doing. And so I feel getting ahead of this stuff is a lot easier than it was back in the day. Yeah, that's a good point. I think also this data wasn't available back then. It's not like people knew how equities would react to a

pausing cycle. No one talked about it. But I think that once they do pause, it's intuitive. It's because they've already done the damage and stocks got killed. This is why it's so difficult to use a back test as set in stone because you're right. Back in the day, people didn't have all of these tools and data at their fingertips. I think we learned the stock market itself, the data, the crisp stuff was put together like the 1960s where people didn't really know what the long-term returns for stocks were. they were just kind of guessing. Like, yeah, stocks for the long when I get. Like, that wasn't even a thing for people back then.

So I think that changes how the markets react to things. That's all I'm saying. Do you think most people at this point understand the limitations of a back test? I think that's been established. Eh, probably not. Really? Normal investors, I feel like if you see a back test tool for the first time of your life and you put something in and you feel like you have it figured out,

you look at that and you go, I'm putting all my money in this. I'm going to pick like, you don't think so? No. And what's a regular investor? What's your regular investor? Who are you talking to? Our audience are not regular investors. We've got some smart people out there. We have a sophisticated audience. They know better. All right. I do think that if you're a novice investor was just getting started and you see a backtest tool for the first time and you run it, you probably go, I've got it all figured out. I'll just put all my money in this. Novice investors, listen, I know I'm pushing back hard. Novice investors don't backtest. I'm saying the first time that you get into it, I did this early in my career where I got this back testing tool. It was called like Portfolio, one, two, three. And I don't know, someone bought them, but you use it.

But how about this? You can create these amazing strategies with these awesome, like, sharp ratios and when you and I first discovered the ability to back test stuff, yeah, we probably gave those back tests a lot of credence. But that was a long time ago. I'm saying investors today probably know better than we did. I think you're giving people too much credit. Agreed or disagree. A little bit of this, a little bit of that. We're arguing with each other here because maybe my earlier point of there being more knowledge, maybe you're right. Maybe if you people do know. I just think it's easy to get caught up in that when you try it for the first time without some experience of letting a back test live in the real world. I don't know. I just,

I vaguely remember somebody in this podcast saying that investors have gotten smarter. Maybe I'm misremembering that. Maybe they're smarter because they don't use backtest anymore. Maybe that's it. I don't know. But I want to talk to you about interest rates because they had come down quite a bit, especially we were like sort of scratching our chin when the Fed raised rates in March. the Fed raised rates to $4.75,500, the two-year drop below 4%. Remember that? They're coming back up. And I wonder if it's because people are saying, you know what, rates are going to stay higher for longer or maybe the economy is actually doing okay. Have you looked at interest rates, by the way? Is this news to you? A little. I mean, they're all over the place, but three-month T-bills are now at 5.1%, which is a ridiculously good deal. And I've been having a lot of conversations as have we internally about, obviously, T-bills is the layup right now in terms of fixed income exposure. Why take more risk, unless you really are pounding the table for a recession?

Why would you ever accept a three and a half percent 10-year yield when you can get 5.1% in three-month T-bills? The counter with that would be, well, T-bill yield, you can't lock those in. There's short-term. They could drop. And then there's also, if rates do drop, you're not getting any juice, and then you're going to have to reinvest at lower rates. But do you think that bond investors care about juice? What's a bond investor? That's like saying a stock investor.

People have different objectives. Yeah, but if you're not a hedge fund investor who's trying to, to gauge the macro and guess where you should be on the curve. If you're just a fixed income investor who says, I want to diversify my stock holdings and I don't want this part of my portfolio to get killed, why would you be in anything other than three to six months T bills right now for stability and income? If you think a recession is coming, your stocks are to get killed and you're not going to get anything out of your bonds. That's why. You're going to get 5% for a while. I just think that being in short-term T-bills right now is the easiest decision you could make for your fixed income allocation.

And the problem with that is, is it gets really harder what happens if it goes from five to three. Then what do you do? I think that's the hard part. I'm just saying there's no no-brainers. That's all. I'm not disagreeing with you. I'm just saying that there are reasons to take duration risk. You say there's no-no-brainers.

I say it's a no-brainer to be in three-month T-bills right now at 5%. I think that's a no-brainer for if you have cash or fixed-income needs, I think it's a no-brainer right now. I think it's hubris. How about that? But here's the thing. The Fed is not going to drop rates from 5% to... I can hear the YouTube comments already, really loving me in this episode. Of course, but fine, you take your 30-year treasures and I'll take my 5% T-bills and my CDs

that are paying 5%. It doesn't have to be all or nothing. There is no all or nothing. I'm just saying for people looking for stability and what you think of for fixed income, it hasn't been this easy in 20, 30 years probably for fixed income investors in terms of I don't have to take any volatility or duration risk right now. I just think we haven't seen that. Now we're on the same page.

Well, yeah, because the tenure was 2% or whatever for the last decade. So that I completely agree with. But my point is just look at this chart of the two year. The two year got as low as like 3-5-5 two weeks ago, and it's up to 416. I mean, that's a big, big move, no? So anyway, where I was going with this is that we were talking about a pause in March, given the SVB blowups and all that sort of noise. And now they're still pricing in a high probability of another.

rate hike in May. A month ago, Ben, a month ago, there was a 21% implied probability of rates being 500 to 525, meaning a 25 base point increase. That went from 21% up to 91% today. The market is pricing in a high degree of likelihood of there being another hike. Doesn't it seem weird, though, that in May. Three-month Teebles are still 100 basis points more than two-year treasuries, though? I just think the bond market is confused in the push and pull between, wait, there could be a slowdown and a credit crunch to, oh, wait, inflation is still here. I think the bond market is just utterly confused. That's my only takeaway here. We were talking last week, I think this was on TCAF, actually, about whether or not we were

currently in a recession. And our team put this in the YouTube for like a vote. 55% of the audience says we're in a recession. Is that higher or lower than you would have guessed the audience would guess? That's higher to me. I don't think I would have guessed that high. I think you're doing too many podcasts these days, sir. We talked about this survey on this, It's a very show last week. And I said there's no... Oh, is this show? Yeah.

I'm sorry. That's all right. And I said there's no chance in hell that we are in a recession. That was my stance. Okay. Right now, we are not in a recession. Could we have a slowdown from here? Sure, but I'd say right now, my take is no recession.

Retail sales came out last week. Not great. But Spokes said the diffusion index is the lowest since April 2020. and it has never been this negative outside of a recession. Now, I feel like this sort of stuff should be taken with a grain of salt given fiscal stimulus that we saw and given how wild people were spending. And I got to be honest, I don't know. I've seen the word diffusion in front of an index twice in the past week.

I'm not sure what that means. I was going to say that too. I don't know what this diffusion index is. Let's just say it's retail sales. Put the gray bars up there. But this is the other, we've been talking about this for months now that all retail sales have to do is get back to normal, and that could mean a slowdown. They're so far off trend. The biggest collapse in retail spending, this is just month over month, wasn't gasoline

stations, gas stations. The charts is gasoline station, so I read the chart, but I don't know if anyone calls it a gasoline station. No. I don't think so. I went to an interesting gasoline station over the weekend on the way back from Hershey Park. We stopped at, it was like a truck stop, I guess. That's like in Pennsylvania somewhere. Her truckers. Yeah, we did a great time. It rained, like, cats and dogs, and so that, like, cleared out the park because it downpored for an hour. And they have some big boy roller coasters, which was fun. But anyway, we stopped at this trucker gas station, and there was, like, a subway in there, which, by the way, I love subway. It's, I haven't had in, like, I don't know, five years.

You're a fan of the people. You love subway and Jimmy Johns. Love. I mean, I know subway's not really good, but I don't care. It's good to me. I don't mind subway. On the loudspeaker, it's like shower number 78, your turn is up. up and then like five minutes here it's like shower number 79 your turn is up because it's a truck

stop you know that truck stop they have showers sounds like a prison but what else they're going to do life on the road life on the road bank of america credit and debit card spending per household moderated in march to 0.1% year over year the slowest pace since february 2021 month over month spending fell 1.5% yeah obviously the spending's got a slow eventually i mean the people are spending like gangbusters. Does this mean that all the anecdotes that you and I are talking about all the time? Because we keep talking about the anecdotes of people traveling and spending money and going out into restaurants. Are those anecdotes, are people substituting spending and they're just focusing on these kind of areas and they're maybe not spending on other stuff now? Because

everyone talks about the anecdotes of, gosh, this plane was full and this theme park was full and these restaurants are full and the prices are ridiculous. But if you look at these numbers like this, it doesn't seem like spending is continuing to get out of control. out of control to the downside or what? No, the upside. We keep saying that it seems like people keep spending and how are these people doing it. They must be going into credit card debt. That's like the logical conclusion you'd think from all these trips you see people taking, but the data doesn't really back that up. I saw a chart, I think, I can't remember who posted this. Dang it. It was like credit card spending is, I think, still below 2019 levels or right thereabouts. So this idea that

credit card debt is keeping the consumer alive is... It's back on trend. So it's hogwash. Yeah, if you look at the credit card. Oh, is this it? Well, yeah. Here we go. It basically fell and came right back up, yeah. But total credit card debt in the country is back on trend, basically. Okay, so average credit card utilization rate by household income, just eyeball on this. It looks like it's back to where it was, actually, the under 50,000 cohort is still very low. This is interesting. We got Empire State manufacturing data, and it was the first time that it increased in five months. So I don't really know what to make of that. But look at this prices paid chart, the fourth one down. What is this showing me

here? The prices prayed for the Empire State Manufacturing Survey. The numbers are going down. That's what I'm trying to show you. So inflation, okay. Here's an anecdote that I was talking about. This is from the Wall Street Journal. The Wall Street Journal had a thing saying basically everyone wants to travel to Europe right now. And if you go to any resorts in Europe, all you see is Americans. I'm sure this is a little bit of exaggeration. Josh and Chris just went to Europe. Reservations for European trips wrote 8% over last summer. Delta Airlines president Glenn Hollenstein said last week the 75% of the carrier's international flights this summer are already booked even with added flights and seats. So I mean, what is the cost of a European trip? If you go for seven to 10 days, that's got to be what,

15, 20 grand flights and everything. Maybe it's a little cheaper because of the euro or something, but that's an expensive trip. So are we to assume that, I don't know, is it just rich people spending money these days and all the stuff about everyone's spending money and everyone's going to credit card debt. That's just not true. Well, look at this chart. So if you have an income over 125k, the credit card utilization rate, which I'm guessing is how much people spend divided by their max balance, that was like 28% or so in 2018 and 2019. That number for households earning over 125k is down to 23%. Or are we assuming that people are still just spending down their savings. It's like the excess savings things. People are still spending down those savings from the pandemic.

Dude, I don't know. I feel like a lot of this data just doesn't match up. That's my problem. It seems like, because inflation is higher and people are doing all this stuff and spending money, it seems like all this stuff doesn't match up. That's what I'm trying to get at here. I have no idea what's happening. I really don't.

I don't either. Here's an analogy I want to make. If a recession is on the horizon, this is a crock pot recession. It is simmering at a low heat. The top is starting to like bounce a little bit from the liquid or whatever. And this is a slow-burning recession that will be moderate, I guess, if I had to guess. Can I have for a hot crock pot take? 80% of stuff people making a crock pot is gross.

Well, by definition. There's some stuff people making a crock pot that's okay. Like, my wife makes a great spicy sausage dip. It's just rotel tomatoes and cream cheese and sausage. It's amazing for dip. Oh, it sounds wonderful. But most stuff people making a crock pot is gross. Okay.

So I don't know if this is a Jewish thing specifically. But Jewish people eat brisket. I'm not saying Jews are the only people that eat brisket, but we eat brisket. A brisket needs to be cooked forever, forever and ever. So it's got to be done in a crock pot. But once you do, if you could cook it long enough and it gets that texture, I love it. So you're right. It's not a great cut of meat, but under the right circumstances.

All right. That's it. Yeah. Oh, I like brisket, too. But yeah, but brisket from a crackpot is gross. You want it from like a smoker or something. Any thoughts on my analogy there? No, I agree.

A Crockpot recession? By the way, wash your journal, you could take that one as opposed to the one that Ben actually stole from you. You could take this one. So I do agree. I think a lot of people want it to be an event. The headline's going to come out that today we went to a recession.

And you're right. If it happens, we're going to slowly, it's the Jerry Seinfeld soda machine where it takes a few pushes to get the, if you want to tip a pot machine over, it's going to take a few pushes that goes back and forth. That's what this recession is going to be like. How that? It's a soda pop recession.

And I don't say soda. It's a pop machine. but I know the people on the coasts like soda. That works too. Soda pop sounds like someone would say in the 1950s wearing like a varsity jacket. Adults say pop. Okay. Threat from Eric Boutchunas.

Vanguard took in a billion dollars a day in Q1, up against 10-year rolling flows to $2.3 trillion. No one else is close. 30 bill went into its money market fund. He says Vanguard was more or less the only buyer of U.S. equities in Q1. Wow. I don't know about that. Maybe no one is doing a back test when he says that he probably means like

He netted it all out in Vanguard was the net buyer. He said they led ETF flows, 36% of the second place. I mean, they're just dominating. So it says Vanguard took in $13 billion in Q1, the rest of the industry combined saw outflows. Wow. That's a great sad. That's wild.

That also just shows Vanguard's scale. Relentless bit staying relentless. And the scale and the behavior of Vanguard investors is truly unique. But look at this next chart. This would really want it to get to. Balchuna said, we expect Vanguard to dominate ETFs for quite a while and surpassed BlackRock and market share in the next two years. years or so, not only do they have the natural demand, but also look at the mutual funds.

This is where I'm going with this. Mutual funds still make up three quarters of their assets. That's crazy. That is pretty wild. Is that just because they're all buy and hold investors and didn't want to change over or 401Ks? Or what do you think the reason for that is? I think both. All right, here's a hot take for you. Is Warren Buffett actually bad for investors? What? Remember we talked last week about outperformance? And the funny thing was, I wrote a blog post about the outperformance thing. Like, would you rather outperforming a bull market or bear market? And you said bear, and a lot of people agree with you. But the funny thing was, is I got a lot of people who said,

I prefer to outperform in a bull market and at bear market. And these people weren't kidding. And I said, well, if you can do that, then you need to be charging $3.30, sir, because you're an amazing investor if you can do that. Anyway. Hey, so what did you want to talk about? Well, I want to tell you about Wagovi.

Yep, Wagoe. What about it? On second thought, I might not be the right person to tell you. Oh, you're not? No, just ask your doctor about Wagoe. Yeah, ask for it. by name. Okay. So why did you bring me to the circus? Oh, I'm really into lion tamers. You know,

with the chair and everything. Ask your doctor for Wagofi by name. Visit wagovi.comi.com for Savings. Exclusions may apply. To succeed in the future of work, forward thinkers use AI to deliver measurable results. Workday is the AI platform for HR and finance that frees you from the mundane so you can focus on more meaningful work. Workday, moving business forever forward. Ike had the state, and we've talked about this from Professor Bessonbinder, who I think is at Arizona State. He talked about how half the stocks have ever generated positive returns over their lifetime, and 4.3% of stocks created all net gains in the U.S. market between 1926 and 2016. That's when we were trying to reach for last week. So he said that, unsurprisingly, studies have shown that

in average, the fewer stocks, a fund owns, the lower its returns. So the more concentrated to you are, the lower your returns. Over 3, 5, 10, 15, 20, and 25-year periods, funds holding at least 100 positions outperform those with fewer than 50. Over all those same periods, except the past five years, the most diversified funds also earned high returns than those with 50 to 99. So the more diversified you are, the better your returns, which a lot of people would think would be the opposite. But the point is, I would have thought the opposite. That's interesting. Because you have these grand slam stocks like Apple and Amazon, if you aren't in those stocks, if you miss one of those, you're screwed. It's counterintuitive, but owning an index fund and being more

diversified increases your odds of outperformance of all other investors. I just want to make one clarifying statement with this data, which is what it is. I trust the data, which is supporting index fund investors, buy and hold, then I'm an advocate for that. I get it. However, so what this is showing is like basically, if you buy a stock and hold it forever, it's not worth owning relative to owning a basket of stocks, just generally speaking, most stocks are lousy investments. Yes. Which I agree with. However, active investors, obviously, are not buying a stock at inception and holding it for its duration. Just because the company has a lousy lifetime return doesn't mean that there aren't opportunities

to make money. Yes, I agree. For example, I just sold Facebook, not to brag. A stock could be down 60% over a three-year period. It still could have gained 100% over a three-month period. I knew that you sold Facebook because you shared the receipts with us on Slack. I feel like you were getting ahead of this. I shared receipts because you asked for receipts.

So what are the numbers? That's a fair point. But I think the reason that concentrated portfolios underperform is because you have an extreme, the people who outperform outperform by a ton, and there's way more people who underperform with a concentrated portfolio. If you want to outperform, a concentrated portfolio is the way to do it, but very few people can be above it. No, it depends.

How much do you want to outperform by? The more diversified you are, the less likely you are to significantly outperform. Yes. And significantly underperform. The surprising one there, is that Peter Lynch used to own like thousands of stocks. He might have taken a small position. He had a lot of holdings in his companies. Yes. If you go back and read the Peter Lynch stuff. I did not know that. All right. I listened to a lot of conference calls this week. And one of the

interesting charts is from Charles Schwab. By the way, I bought Schwab. I used some of my proceeds from Facebook to buy Schwab. You're pivoting from tech to finance. Just as the piece. But look at this chart. Transactional cash per account. It shows cash per account and cash is a percentage of the portfolio. And it's as low as it's been, this chart goes back to 2004. Only 5% of a balance is in cash, like just cash sending an account,

non-interest bearing cash, getting whatever, 40 base points, whatever the minimum is. But I guess my point is, for that to be the low in 2004, just eyeballing this, what do you think the average is? Is the average 10%?

Yeah, that is surprised. I think if you had to pinpoint one general investor misbehavior, I would say, is holding too much cash. general. And just not being fully invested. Yeah, if this is a broker account, your cash should be your cash, and I'm all for having a cash buffer, but there's no reason to have a 10% cash drag in your long-term investing portfolio. I would be surprised if this number doesn't rise in the coming months. With Robin Hood's cash sweep, which you don't have to do anything for, I think they pay

4.4%. And I do feel like people will see that and go, ooh, I think I'm just going to hold off and wait for stocks for a little longer. I think a lot of people will have that mindset. If it's just a cash sweep and it's giving you that much money, I think some people will feel very comfortable doing that and just sitting there. Yeah, I feel very comfy in 4% too. Absolutely. I agree. That's why you have to define what is this account for. Is this account for stocks or do I have to have an asset allocation here? Because if it's for stocks and you're trying to time it and you're probably not going to win that game. All right. Is inflation thing happening here? I looked at the last 10 annualized inflation reading. So every month, they give up the annualized number that it peaked at 9.06% in June. It has

been down in the last nine reading since then. And the last one actually was technically for going decimal points, 4.98%. We're under 5%. So there is a trend here. Obviously, the counterpoint for a lot of people would be, yes, the rate of change is slowing, but all that inflation is cumulative and prices overall are still higher, even if they're rising at a lower rate. Both are true. Yes. It's a good trend. But policy decisions are based on the latest number. Policy decisions are not based on cumulative of inflation. It's based on where it is today. Other people have done this. I haven't done it, but don't you think once the June and July and August numbers start falling off the 9% and 8.5% that we're going to be at 3, 3.5%

by, I don't know, end of this summer, probably. Yeah, I'm sure you could easily do that on a spreadsheet. I don't know what the numbers are. But Jeremy Schwartz has a tweet. He said a few chart updates with our CPI calculations that include alternative shelter components. Officially CPI shows headline inflation of 5% in the last 12 months. Our calculations show under 3%. inflation was much higher in reality before and now much lower. So based on the way that inflation shelter is calculated, there are some shenanigans with a lag going on. And according to Jeremy's calculations, inflation is under 3%. I read this this morning. I thought this was a good one.

What is the average inflation rate in the last five years in this country? Inclusive of all the 8 or 9% we've had. What's the average inflation rate? 3%. 3.3%, which is basically the average of the last 100 years. So you take the near deflation we saw in the pandemic. Add it to the really high inflation we've had since then, and you get the average, the long-term average. Fun with numbers, but I thought that was interesting. I'd say bullshit with numbers, but point taken. Okay. Question from a listener. You talked about how baby boomers have so much money for a generation and anecdotally so many financial plans that I run for our folks, have them with way more than they need. They're diligent savers and investors,

and it goes back to how Morgan Housel will talk about growing up with the Depression-era parents feeling totally uncomfortable spending money. So we have all these boomers with excessive savings and investments that are unwilling to turn the switch and actually spend that money. And anecdotally, we hear this from our advisors all the time. All the time. Chris, who runs our wealth management division says he's constantly having talks with people trying to get them to spend money. And a lot of people just don't want to. And not only that, I feel like our advisors, they share the wins. Like when you get a client to buy the car or the house or the whatever that they've been like working their entire life for, it's a huge win. Yeah, that is a win.

And we love seeing those pictures and stuff. So the question becomes, do we have a permanent floor of higher inflation in the future if boomers decide to actually spend that cash, or do the pass that on to the next generation, which does not have the Depression era parents and are more comfortable spending? And so could there be a higher rate from either of these things if that money gets spent? Yeah, that's a good question. I think that it's interesting because on the one hand, we legitimately might have a retirement crisis, but also there are people, I don't say, the average American that has access to a 401k, I know that like half of the country doesn't of access to. But for the average boomer that spent the 70s, 80s, 90s, aughts contributing to

their retirement account that are in decent financial shape, I think a lot of them are going to leave a lot of money behind. Because the older you get, you're spending slowest dramatically. You do have Social Security. People are probably cautious because they fear outliving their money, and so as a result, they spend less. I think that boomers are not going to spend down their retirement accounts. And I know, again, we're broad brush here. It's a succession thing where 10% of the households own 90% of the equities. So, unfortunately, most of that money is getting passed down is going to be from rich parents to rich kids.

That does away with the inflation thing in my mind because it's not like it's this broad money that's going spread out to everyone and everyone can spend more. It's unfortunately going from rich people to rich people. Unfortunately, that's how it is. All right. We've talked about this before. The Atlantic had this article saying the millennial generation is just fine.

By 2019, even adjusted for inflation, Median income from millennial household was 9,000 higher than that of Gen X at the same age and 10,000 higher than the median boomer household in 2019 and the pandemic didn't really change that at much. Household income is a 25 to 44-year-olds were at historic highs in 2021.

So you look at average real wealth and that's just for inflation. It's kind of crazy. Gen X is higher now than baby boomers at the same age. Millennials are right on trend. Gen Z is on trend. Basically going over this myth that all millennials are broke. Well, dude, our parents were in their mid-20s, in the mid-70s.

Was that a great time to be a millennial back then or a boomer, our age? No. Or buying a house with 20% mortgage rates. The point is, millennials are right where they should be based on other generation trends. And I'm guessing because millennials are more highly educated, you see this household income by education, millennials are going to make more money over their careers. Millennials are going to be the richest generation ever. And then Gen Z will be the, it's going to happen like that.

So why do you think millennials feel so poor then? Why do we always see these stories about millennials can't do this and millennials can't do that? Because they're saying even homeownership at the same age, 50% of boomers owned their home compared to 48% of millennials at the same age. Even the housing thing is not as bad as people make it out to be. The main difference has to be just college costs. People are being buried in debt coming out of college. Our parents did not have that.

They also didn't have social media to make them feel shitty about themselves. I think that's part of it. So even if the incomes are higher, the expenses are higher too and more in your face. I think so. So you'd say, well, tuition costs are higher, housing costs are higher, daycare costs are higher. You know, else our parents didn't have, the obsession with Klex. Obviously, there was advertising in the 70s, but it wasn't like fear porn like it is today.

One of the things I was thinking of the boomer millennial thing. My daughter has gymnastics on Thursday nights, and I was taking her there, and she likes me to watch, but I usually just bring my computer and watch. And you hear all the parent conversations, and you hear this at every sporting event or whatever, every kid's event. And the parents talk about how busy they are because the kids have to go to this and they have to do this. And every parent just loves to talk about how busy they are

because their kids are constantly doing stuff. And I feel like that's something boomer parents never talked about or complained about. Maybe they didn't have the travel sports stuff and they didn't have as many things to do. But don't you feel like parents of today love talking about parenting way more than the previous generations did? I have no frame of reference. You don't think our parents complained?

I mean, probably not to us. But I don't know. Don't you feel like our parents ignored us more? Or I guess maybe this is a helicopter parenting, but I don't feel like there was as much of a focus on parenting as like the thing. My mother was very strict to me. I was punished the entire eighth grade. You probably deserved it, though. I bet the boomer parents were more strict, but I don't think that they were as involved in the lives of their kids as parents are today in terms of like the planning and the we never had a calendar on our fridge when I was growing up with that kind of thing.

everyone has that now. Last night, I randomly said to Rob, and I was like, do you think we're doing a good job? She's like, what do you mean? I said as parents. It's hard to tell, right? I hope so. Yeah. You do your best. And all right, this is a good one from Stephen Ratner. Tight labor market has led to record gains for workers at the bottom, even after inflation. By contrast, it took until 2017 for the bottom half of Americans to climb back to pre-great recession levels of of income. This is showing, again, that the bottom 25 percent has seen the biggest wealth gains. And they saw the biggest drop off during the pandemic as well. And now they're right back on trend. And this to me is probably one of the more surprising charts of any economics charts. And there's

been a lot of surprising ones that if you were to say inflation is out of control and at four decade highs, but the bottom 25% is seeing the biggest wage gains because of it. Has this ever happened before? That's kind of a rhetorical question. I don't think so, right? The way our society structured, people are very upset about this because who pays for the bottom 25% people with money and people with money are literally paying their wages and there's inflation. And so, no, society will definitely not cheer this on even though it is objectively a good thing. This is a good thing. There's no federal minimum wage that was raised, but the pandemic effectively raised the minimum wage and it's higher than it's ever been. And it, I don't know, doubled probably in the last

three years. I agree. So if you're going to the restaurant, you're complaining about higher prices for food and drinks, you're paying higher wages for people who needed a boost, and they got it. All right. Let's talk about crypto just for a second, which has been on an incredible tear. You know, like an NBA playoff game, they'll go like, he's got a quiet 30 points tonight. I feel like Bitcoin is up a quiet 100% from the bottom. That's a good point. I think most regular people aren't talking about it, given how burned they got. But Bitcoin started the year at 16.5. What do you mean when you say regular people? People who do back tests or don't do back tests.

Non-crypto-natives. I feel like we've been defining regular people six different ways. It started the year at 16-5, now it's at 30. And maybe one of the reasons why we don't discuss it a lot is because, meaning we Americans, is I don't know why, but it leads me to this point. So data track, this is Nicholas, said virtual currencies are much more of a global phenomenon than many U.S. investors may realize. For example, Google Trends Search Volume data shows that the countries with the greatest

collective interest in virtual currencies and related events in the space are in Europe, Africa, Asia, Central America, and the Middle East. The United States rarely makes the top 10. And I think this makes sense because we have by far the best financial infrastructure in the entire world. I don't know. For all Americans, why do we need crypto? Well, I also think there was enough ink spilled on crypto and enough talking points made that I think people are sick of talking about until something actually happens and there's an actual use case. That's why there's no talking about because people are sick of talking about what could it be, and people are ready to hear, like, what will it be?

We're not worried about the government stealing our money or serious debasement, and I could hear the CryptoMax is going nuts right now. But you know what I mean? There's not a third world country. Our dollars are pretty secure, despite inflation. All right, let's talk about AI. Did you see this thing? Somebody tweeted the music industry is about to change forever.

This AI generated songs created by Ghost Rider 977 is blowing up on TikTok. It features AI, Drake, featuring the weekend and is so good. good. Did you listen to this? I didn't. I don't like listen to Drake's regular music, so I'm not going to listen to an AI generated one, but I don't know. This kind of thing doesn't worry me as much because I think there's going to be lawsuits up the ass for this stuff, and I think this stuff is going to get cut down before it ever takes off. You think that the music industry and the movie industry is going to let AI take over? That's my big thing about AI is the established players are not just going to let this happen on a creative field. Don't you think? You think that

artists are going to let AI take their voices without getting paid somehow? There's no way this is ever going to happen. How about this? I don't have really any opinions. We'll see. But Andrew the Metaverse guy, Steinwald, tweeted, I'm pretty freaked out about job losses from AI. This is not like we created a new tractor for farmers that requires 10 fewer farmers.

AI is a tool that will require fewer people for all work. This is like the release of a new mega tractor for every industry all at the same time. Overblown or somewhere in between or what? I think one of the reasons tech people are freaking out so much. Maybe it's because they understand it better than us. but it's also because aren't tech people the most at risk of their job losses here? Don't you think tech people are the ones who should be scared the most of AI replacing them? I really don't know.

I think that there are wide-ranging implications for a lot of industries. Yeah, but mostly knowledge industries. I think about the stuff that AI is not going to replace in my life. Is AI going to change the personal trainer at your gym or something? I feel like a lot of the physical stuff you do in the real world, people don't have to worry about. I think it's the people who are in the tech sector who are going to have to worry the most. Because if you can tell an AI, do this coding for me. Quickest, 10 engineers shouldn't tech people be the most worried.

And maybe that's why they're freaking out so much. Within the next five years, will there be some sort of, I don't know, societal upheaval is too strong of a word? But where there'll be a cultural divide between people that use AI and people that were laid off because of it. I don't think that's far-fetched. Could be. I also think that AI is going to create jobs as well. I know people keep talking about the jobs is going to take away.

There's going to have to be some sort of filter there where people can help use it and explain it. the music industry stuff, I'm sure people are going to be using it. I'm sure the musical artists are going to be using it to help them make music, just like they use more technology than they did in the past. So I think people forget about how many jobs technology actually creates over time, too. There's certain industries for sure. You'd think the call center thing would be, I don't know how many millions of people work at call centers around the world. That's the kind of thing where AI probably will take it away. But I don't know, remember five years ago, Scott Galloway had that thing that there are more cashiers in the country than teachers or

something, and people were worried about, well, Amazon's going to have this grocery store that's going to take away all the cashier jobs. And you see at McDonald's, has that caused riots in the streets because there's not as many cashiers because now we have the self-scan stuff? But I think this is this guy's point, is that this is coming for every industry. I don't know if there's ever been anything like that. I don't think it's coming for every industry, though. That's my point. There's some physical stuff that a computer just can't do, I think. Happy to be wrong. Yeah, it's not going to take everybody's job. I do think that we will revisit this issue on Future podcasts.

So New York Post, I said I think AI is going to probably do more harm than good, even if it does a lot of good. So AI clone teen girls' voice in $1 million kidnapping scam that says, I got your daughter. The mother said, I never doubted for one second that it was her. That's the freakyest part that really got to my core. That's so awful. You sent us an email. Didn't someone turn to assassinate you? Was it an AI bot?

I got to be honest. As hilariously worded as that email was, there was a second where I was like, wait a minute it wasn't even asking you for anything didn't it just say like i'm going to assassinate you sorry nothing you could do i've gotten similar emails accusing me that they've seen me doing let's just say inappropriate things and so i called my friend he goes i got the exact same email everyone gets that pay us money we're going to shoot but the funny thing is let's say someone did have a video of you doing something very inappropriate if you called our life is over My friend literally, and I only know this because we joke about this today, my friend replied

because he's such a dumb dumb. I don't think he knew that it was fake. He replied, you, send it. Called their bluff. Maybe this is the reason that many millennials are still unhappy, even though the incomes are the same. Lance Lambert, in March 23% of the nation's 200 largest housing markets registered a month for a month's decline, 77% of the month.

markets registered of increase. So he has this cool chart that shows that percentage that are growing versus declining. And the declining happened for a while. And now it's going the opposite direction. And a lot of these housing markets are rising again. Back to him, among the nation's 400 largest housing markets tracked by Zill 218 are back to or just set a new all-time high for housing prices. This doesn't seem like it should be happening in a world with housing prices that are 50% higher and 7% mortgage rates. This part is not great. I guess if mortgage rates stayed at 7% for another five years. Housing prices would have to just turn lower and lower. But I do think that there's a scenario where mortgage rates go to 5% and the whole housing thing just puts a floor under it

and we never see even a big correction people were looking for. There's obviously some places that are seeing it. If rates stay at 7% from the next three years, we will definitely see housing prices come lower. And I say definitely, I think definitely. But if we don't, then you're right. Maybe we don't at the big correction. I just think that like the affordability back to 2019 levels is unfortunately, I think a pipe dream. That might be gone. I don't think that's ever coming back. So Lance Lambert again, among the nation's 400 largest housing markets tracked by Zillow, 218 markets are back to or just set a new all-time high for house prices. Yeah, I mean, I feel for people our age and younger who are trying to get into our home, it's brutal.

Do you want me to point out the fact that I just read that piece or not? Please, that's my bad. I apologize. We had an email that caught my attention and hand up. That's fair. I was going to let it slide. I'll do better. Mike Simonson, median price of a single family home is still 439-9, up a tad over 2022. Medium price of new listings is 399, 4% lower than last year. And again, these are both going up again. This is interesting to me. Can I say not good? No, not good. So Adam Azamek had this new paper out, and he talks about this is an interesting piece. He's like, the research shows remote work caused like 60% of the increase in prices, which I don't know how you do the

attribution there. But let's say it's plus or minus 20% there, like that remote work had a big piece of it. His point is, why did rents and housing prices go up in big cities then if people were leaving them during the pandemic? And his answer was household formation. And so I think this is the thing that the wave of millennials who want to buy houses and form households is so big that it's dwarfing these other financial spreadsheet aspects of higher rates and higher prices, and that the demographic thing is just the, the thing. It's the tail wagging the dog. That is why the prices are going to have a floor on them.

The millennial household formation stuff is just, that's the thing. It's the Trump cart. Harry Dunst said it many years ago. Demographics is destiny. All right, one more real estate thing. By the way, have not seen him predicting a crash lately. I'm sure he's still bearish. Every six months, there's a new biggest crash in history that's coming.

Just wait. Someone sent me this. It's the average rents in Manhattan. by number of bedrooms. So it's studio one bedroom, two bedroom. Studios 3,200, one bedroom 4,200, two bedroom, 4,200, two bedroom 6,000, and three bedroom 10,800. This is average prices. Manhattan feels like a made-up place to me. Maybe this is your point about New York. It's not just New York, it's Manhattan. I've never lived in Manhattan. I can never afford it. I can see why if these are average prices. Holy, it just, it feels like a made-up place to me.

My first apartment lease was in Astoria, and Rob and I were just talking about this the other day. We had a good apartment, relatively speaking, and I think we paid $2,000 for like a big one-bedroom. That apartment is definitely probably $4,000 right now. The person in me that remembers my 20s totally understands why people would move to New York and everything about it. And the old middle-aged man in me looks at these numbers and says, I don't get it. It's like a competing thing in me where I do get it, but I still don't get it. Well, you get it for young people. It's an incredible place to spend your 20s.

Yes. I guess that's why, yeah, you get four roommates. Yeah. All right, great quarter guys. I was slack with Ben and Josh this morning. That quarter is so freaking awesome. And we're investors in quarter, just full disclosure. I've mentioned that before. I was listening to Goldman Sachs live this morning. I jumped onto the conference call live. And even in the live chat or the live conference call, you could still rewind. Does Goldman CEO DJ the hold music as you're waiting for the call to start? He does DJ David Sully. He does. DJ David Sully. He does. the opening remarks. Yeah, he was pretty cautious. I don't pay too much attention to Goldman's numbers, but can I get on top of this one? Is Lloyd Blankfine going to come back and take over Goldman Sachs? Not bad. You can steal that one. So next week is the big week. Next week is 42% of the S&P reporting. This week we've got Netflix after the bell. I am still holding. So you sold Facebook still holding Netflix. Yeah, still holding. Well, because I just feel like, I mean, whatever. Jamie Diamond said the U.S. economy continues to be on generally healthy footings. However, storm clouds remain on the horizon. Banking industry ads turmoil. Okay.

He's a master at talking out of both sides of his mouth. He can always talk about how things are fine, but there could be a crisis. You never know. They reported record numbers, as they seemingly always do. And I have to say, like, all of the Jamie adulation, it's deserved. It really is. I listened to David Solomon. I listened to Schwab. Walt Beninger, who was very great. I listened to Larry Fink, who was just reading prepared remarks. Jamie is the best on conference calls.

He lets his CFO answer like the specific financial related questions about whatever. But he jumps in. He's like, can I just jump in? And he just is just slaying, demolishing the entire call. He's in a class of his own. All right, at least on conference calls. So for example, I pulled. this quote, I thought this is interesting. He said, they're talking about Fed funds. He said,

first of all, I don't believe it. The Fed has the rate curve, the forward short-term rate curve, almost 1% higher than what the market has. So one of the things you've got to always prepare for is it could be anything. We don't know what the rate is going to be in the year. And so we're quite cautious in that and quite thoughtful about that. Obviously, the short-term rate is higher recessionary risk, but, and then inflation coming down. So I think inflation will come down a little bit. It could easily be stickier than people thinking, and therefore the rate curve will have to He's confused just like us. That's what I was getting to.

So we were talking about earlier in the show, like, what is the bond market saying? What is this market saying? There's a lot of confusion across every part of the economy. That's the longer quote. If you're not confused, you're not paying attention. Especially now. All right. Bank of America.

Look at this. So we talk about credit crunch and all that sort of stuff. But look at the banks. So you've got the net income at an all time high. You've got common equity tier one capital and the ratio is trending in the right direction. I thought this was interesting. they look at like net charge-offs. It was up to $807 million, up from $608 million the quarter before, and $520 million

the quarter before that. So that's creeping up. They said consumer net charge-offs driven primarily by higher credit card losses. So the credit card loss rate in the first quarter was 2.2%. It was 1.7% in Q4. And it was 3% in 2019, which is important. So prior to the pandemic, it was 3%. So it's rising, but it's still 2.2%.

So really nothing to speak of there. Look at this next chart, Ben. Digital volumes. I don't know what Erica is, but I am a Zell user. I never heard of Eric up before you did. And shows a chart of Zell transactions versus checks. I mean, checks are in secular decline, right? That's a bare market.

Yeah, I still see old people using them to the grocery store occasionally. Oh, really? You haven't seen that before? At the grocery store. Still. I went to the movie theater this weekend with Josh to see the Big Labowski, the 25th anniversary. You know in the opening scene where he writes a checkout for milk? That is the definition of a rewatchable movie

That only gets better as you watch it more and more times The most rewatchable Okay, average deposit trend So Bank of America knows something about deposits I don't know if they're the biggest consumer bank in the world But they got them in the top three You see anything here, Ben? To cause alarm or anything?

I mean, aren't the big banks just going to get stronger? I know this is backwards looking Remember there was a banking crisis? They were a beneficiary But look at the weekly and deposit trends It shows interest bearing, non-interest bearing a total nothing going on here. I feel like every time a bank

or a credit card releases something, it's like this next chart. Consumer something remains strong. Consumer whatever remains strong. This is credit worthiness. Yeah. I know that this is backward looking and the SVB stuff happened

in the tail end of this first quarter. So I get it. We'll find out next quarter. But forget about that. Because even prior to the banking stuff, people were worried about the economy rolling over, the consumer rolling over.

And they might. But it's a crackpot recession, Ben, if we're heading towards one. They might. It just hasn't happened for the last year. There's the title to the show right there. Crockpot recession. Okay.

Trademark that. I want to give a plug to a company that we invested in about a year ago that's been building something for financial advisors. So I've been thinking a lot about this, Ben. Our tech stack that the advisor, financial advisor uses is pretty mature. There's not a lot of gaps. There's very few things that we're still using a spreadsheet to do. One of those things, though, is I can't believe that. there's no personal finance tools out there one of the things that we're still doing is and this is

not my world but we have a lot of clients the supplies too is dynamically modeling out their equity compensation and how that impacts their taxes and all that sort of stuff this is a crazy data point there was $762 billion of tax under withholding in 2021 alone so what does that mean like under withholding that means that there was $762 billion worth of surprise taxes that people had to pay that they didn't know that they owed money on. So this company led by Russell Kroger, who was a financial advisor that was sick and tired of doing. That was me in 2020. I had to write a big check. I did a little better planning this past year. Shame on you. So this company Triacto helps financial advisors model equity com for their clients and helps them understand the tax implications like

this under withholding that we just discussed. I think for financial advisors that are working with clients that have this sort of stuff, it's going to be a must have. We showed this to some of our advisors and you asked them after we had a call with in a demo, is this a want to have or need to have? And they said, this is a need to have. Pretty good buy signal. So we're going to link to this triactive website and the show notes. They're still early. They've been building. There should be like a fully functional. And the product does exist. There's like an MVP there, but there should be a fully functional product later in the summer. If you want to join the wait list, Russell will reach out to you individually. So you're not going to go into a black hole. Reach out

and he will reach out to you. Okay. That's that. I know we're running late, but sorry, there's a lot to get to today. You saw Apple's new high-yield savings account? I'm wondering what their end goal here is doing this. I mean, they did the credit card. I don't really understand it. I'm sure there's something. I don't know if the credit card took off.

I kind of remember the partnership with Goldman Sachs not working well, but whatever. Starting today, Apple card users can choose to grow their daily cash rewards with a savings account from Goldman Sachs, which offers 4.15%. But here's the other thing. Because I was thinking, like, well, is it only for cash rewards? They said once a savings account is set up, all future daily cash earned by the users will be automatically deposited into the account. The daily cash destination can also be changed at any time, and there's no limit on how much

daily cash users can earn to build on their savings even further. Users can deposit additional funds into their savings account through a link back account. Good question from Duncan. They're working with Goldman Sachs. Goldman's account pays 3.9%. How is Apple getting more from Goldman than we are? I guess because Apple's not looking to make money off for this. I don't know if they're subsidizing this, but they're taking a much smaller spread because

they don't care. Pretty wild. What if Apple becomes like a big player in financial services? I've always thought it should have been Amazon, but if Apple does it, I'd be happy to let them manage my money for me. I know I'm jumping around just one sec. But speaking of Amazon, Ben, you were prescient. Remember you said, like, you want Amazon to build high-speed Wi-Fi everywhere? Oh, yeah.

There's a service that they have called, I don't know how it pronounce this. It's K-U-I-P-E-R. Kuiper? Kuiper. Kui-R. Andy Jassian, the letter wrote. Kiper is another example of Amazon innovating for customers over the long-term in an area where there's high customer need. Our vision for Kuiper is to create a lower Earth orbit satellite system

to deliver high-quality broadband internet service to places around the world that don't currently have it. Boom, Ben, credit to you, you nailed it. Anything else you want to see Amazon do while we have their attention. I kind of forgot about the only thing I want from them is them to come break down to the boxes for me in my garage. If they could do that, just bring a box cutter and break them down and take them away for me, reuse them.

So I don't have to bring them to the dump all the time. Big dump guy here. Big dump guy. Still going. One twice last week. Your recommendations? We had a very full doc this week. What page am I on here?

41 pages this week. Incredible. Yeah, we went hard this week. Before we get to some wrecks, this tweet made me think. I don't think we've spent enough time marveling at the fact that meta completely upended its business, renamed itself, and insisted that the metaverse was the next big thing, only to have AI prove that entirely wrong, like six months later. That really is kind of wild.

I sold Facebook because I think that they already got a lot of the benefit of the layoffs and cost cutting. I'm not shot in Freuding, hope the sack gets killed, but this thing is just kind of nuts. Think about what they really did. Are they going to change their name back to Facebook? It was a huge miss. Meta.ai maybe is the next? I don't know. They can't. That's like a dog with the tail between its legs, right? But they're already back away from their reverse. You know what? Prediction, they changed their name back to Facebook. Wouldn't surprise me. All right, recommendations. You mentioned Dave last week. I thought episode two of Dave was just one of the best

episodes of television I've seen this year so far. He's so good. He was on The Town with Matt Bellany talking about how Dave was? Yeah, it was a couple weeks ago. Oh, I missed it. I think it was I was in Florida, and he talked about how he just is supremely confident in his abilities, and he knew he was going to be a star someday. And he's not like an over-the-top ego maniac, but he's just like, I knew if I put in the work, it was going to happen.

It's a very smart show. You're right. He is the millennial Larry David. I forgot, when we were in Florida, now, I think it was on Peacock now, knock at the cabin. We watched Knock at the Cabin. That's the M. Night Shyamon one. Probably a better premise than a movie, but I kind of enjoyed it, despite the fact that It was a little dark, but I really like movies that make you think we're going to put you

in a weird scenario, and you can have a conversation of like, what would you do in that scenario? I thought the first 85% was, like, really pretty solid. Yeah, I liked it better than I thought. They didn't land the plane at the end, but if you've seen the movie, they literally didn't land the plane. No spoiler there. Somehow last weekend, I got sucked into Father the Bride, which is a movie I probably haven't seen in 25 years.

My wife loves that movie. That's another one that back in the day, I would watch that with my mom. I have two daughters. That's the kind of movie that hits differently once you have kids. I mean, first of all, Steve Martin is just fantastic in that movie. There's a guy who's been 50 for his whole life. But totally hits differently once you have kids, especially daughters. And it kind of got me a little bit at the end of what.

I'm not going to lie, it's a little dusty. I can admit it. I got a little sappy. That's all I got. I watched the first episode of Barry last night. I love that show. I'm cautious. Here's the thing.

The writers are HBO. The writers are so good that I don't want to like fade them. So I'm only one episode in. We'll see. I watched the first two episodes. Okay, how was the second episode? If they didn't have NoHo Hank, there's an amazing scene with NoHo Hank at a Dave and Busters. That's all I'm going to say.

But it really used to be a much lighter show. I think he's obviously doing it on purpose. But after we watched the first two episodes, my wife just goes, man, this show has gotten really dark. I still really like it. It's really well done. It's very dark. So I think the one movie that I've watched more runtime of than any, any other movie, I feel pretty confident in this is Casino. It's always on, and I always catch

20 minutes of it, and I feel like it's underappreciated. I know Goodfellas is better, but I don't think the gap is as big as a lot of people think it is. I was always a Goodfellas is way up here, and Casino is a step down. That was always my initial read on it, but I did rewatch Casino a couple years ago. I'm still a Goodfellas guy. Well, so am I. I'm just saying, I don't think the gap is that big. Okay. Agree to disagree. a lot of that this episode. And hey, I don't know. I got nothing. At least we could knock at the cabin. We got that going for us. All right, thank you for sticking around. This is a long episode. So if you're still with us, we appreciate you listening. Animal Spiritspod at

gmail.com. Oh, wait, before we go, someone on YouTube gave a comment saying, Michael didn't realize he was middle-aged, even though he's bald. His wife complains about his shirt options. And what was he wants to drive a minivan or something. It was just perfect. You figuring out you're middle-aged. I loved it. I'm still fighting it. I'm still fighting it.

All right. See you next week.