Animal Spirits Podcast - The Dumbest Week Ever (EP.200)

Episode Date: April 21, 2021

On this week's show we talk about dogecoin, the crypto crash, money-losing companies, buyers of second homes, why 2008 broke so many brains, a shortage of homeowners, a new idea for Airbnb and more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by Osprey. The Osprey Bitcoin Trust, ticker OBTC, offers easy access to Bitcoin right from your brokerage account or IRA. OBTC has the lowest management fee Bitcoin fund in the U.S. If you want to hear Ben and I talk to our friend Phil Perlman from a few weeks ago on the psychology of investing in Bitcoin, check that out. That's from April 2nd. 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 Rit Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritthold's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Squirts with Michael and Ben. Well, that was one of the crazier weeks we've had in a while. We had Dogecoin. How much was it up on the week? I don't know, a lot. You have the $100 million

dollar deli. You have the Jake Paul fight, which did $65 million in sales, one point something million pay-per-view buys. I think it was the 12th biggest fight of all time. How long did the fight last? You have Dapper Labs raising money at a $7.6 billion valuation. You have me getting my money out of Dapper Labs, credit to me. Only took a 15% loss, not bad. It's a $7.5 billion company, and I still can't get my money out. Can they invest in an ACH payment program now that they have this much money? They're worth this much money? Listen, they're doing KYC checks, and obviously they don't know you. They don't know you like that, Ben. I've been trying to get my money out of there since early February. Maybe there's some red flags. Maybe your credit score isn't as good as you say it is.

Maybe my top shot score. I'm not mad about the money. It's not even the money. This is principal now. Take care of your clients, whatever. And then finally, the big Kahuna, you've got Coinbase. I was about to say raising money. It didn't raise money. They did the direct listing, which valued them at $85 billion or so dollars. Yes, because you don't want to say the IPO because if you're an actually person, you say, no, they direct listed. They didn't IPO. Right. I'm going to call it dog coin, because I think what it is instead of Doge coin. I'm still Doge. Soft G. Doge coin. Okay. This is obviously insanity. I'm going to say a couple nice things about it before I say some really mean stuff about it.

Okay. The nice thing. It's happening outside of like a productive asset. This is not a stock or a corporation that is pumping up an asset and then that stock is allowed to sell stock to unwitting investors that then hold a bag. If this is the nice thing, what are you going to say that's mean? This isn't very nice. No, I'm just saying this is allowing speculation in an asset that's not like giving some company like cheaper cost of capital to raise debt or something. It's speculation in like a speculative asset. So that's a good thing.

Number two, blockchain is obviously very hard to hack because, listen, I would never wish ill will on anyone or hope that they lose money. Do I have to remind you of your tweet from an hour ago? You said, I hope somebody hacks your account. No, no, listen. That's you. I know. I said, I hope someone hacks your account. That's you. Right. But obviously, blockchain is hard to hack because if you can't hack the doggie coin thing, like what can you hack? I'm sorry, but I wouldn't feel bad at all if people lost all their money in this. I wouldn't feel good about it, but I wouldn't feel bad? Like, if someone hacked this and they stole it all,

but if you were a hacker, wouldn't you say, like, yeah, let's hack the joke thing. No regulators are going to care about that. That's the nice thing. Not the bad thing. This is so fucking stupid, okay? This might be the first time you've cursed on this podcast. You're not a cursor.

All the billionaires and entertainers and investors pumping this thing are all acting like charlatans. Agreed. Coinbase was a seminal moment for crypto last week. Coinbase brought crypto. into the mainstream. And then we have this. This is now a $50 billion thing. It's the fifth biggest crypto that there is. This gives crypto a black eye, I think, because it shows that you can obviously manipulate prices because there's obviously a whale or whales who are pushing this thing around.

Like someone owns a few billion dollars in this thing and they're pushing the price around. I'm sure that's going to come out. I could hear the email now, Ben. You don't care about the Fed manipulating stock markets, but you care about people manipulating Dogecoin. Yes, exactly. Because that's exactly the same thing. I just think the last couple of years have completely broken the brains of young investors who have come into this stuff and think that degenerate gambling is the way to invest in the markets. And so I just think this guy literally created this as a joke. He spent three hours typing in some code and now it's huge. And I get like, oh, it's good memes and that's funny. But it's just, this is so, so dumb, right?

It's just so dumb. I'm not bothered by it. Not in the slightest. People want to speculate in it. Come on. Listen, you can't go on a rant and say you're not bothered by it. Just own it. I'm not bothered. Obviously, you're annoyed. It gives crypto a bad look. So many good things are happening in that space. I think this is the opposite of that. That's anyway. You're not bothered by it.

I don't buy that. Come on. I'm telling you. I'm not bothered by it. This is from Bloomberg. How and why the cryptocurrency has run so far so fast is a mystery even to Marcus. Marcus is the guy that created Dogecoin. The frenzy, the tweets of support from the world such as person, none of it makes

sense to Dogecoin's creator. Here's this quote. Maybe it's that Dogecoin can be a good barometer for how far from reality things can get. I think there's an element too. here of you had an entire generation of people who grew up online. I don't think that the internet has made us different people, but I think that the internet just amplifies all these things and everything is gamified and nothing feels real. If all your financial information is stored on your phone or on a computer in the cloud somewhere, it doesn't feel real when you're doing

stuff. And so it's easy to allow memes and jokes to take over and it blurs the lines because it doesn't feel like real money to anyone when you're doing this stuff. Can I tell you the Kudegroab this whole thing? What's that? Billy Marcus, a creative doge coin. He said, I'm pretty risk-averse. I just put everything in this, B-500 index fund. That's my worry is that, like, it's great for these entertainers and people have a lot of money. Like, Mark Cuban is pushing this so people can buy Mavericks tics with or something. He's going to be fine. That part of it bothers me. I don't understand what Cuban's doing. It's weird. He tweeted out last week that, like, supply and demand, win again. I don't know what that

means. Mark Cuban is like a great businessman who's also a charlatan. This year has proven him to be somewhat of a charlatan. 10% of a charlatan? I don't view him that way. How about this? We had this conversation a long time ago. Like, things on the internet, it's either black or white. If somebody does something you don't like, it's like, oh, F that guy forever. I generally, I'm a fan of Cuban, but I don't like what he's doing now.

So I don't want to call him a Charlottom, but this part of it, yeah. He's pushing people into game stock. He's a gas lighter. Yeah, this part is confusing. Him and, like, Guy Fieri and Snoop Dog can, like, make jokes about this stuff. But, like, there's going to be young people who brains are completely broken as an investor from this going forward. And I're not going to understand how to invest in a wise and reasonable way.

counterpoint. How is this different than any other speculative time? I know this seems dumber, but how is it dumber? It's way dumber. This is a joke. There was literally a joke. This is not even like the 90s at all. So our colleague Nick did one today and said this is the craziest market he's ever seen of dollars and data. And this is like the 90s. I don't think this to me reminds me the 90s because this is like everyone's trying to be like wink wink, cool. I'm in on the joke. It's ironic. It's fun. It's a meme. This is something completely different. This is like this is all internet based and online and I don't know. Well, because in the 90s, Nick made the point that these companies could conceivably grow into the multiples. Like, obviously, they didn't. There was some sort of small universe where it could have happened. And I guess they did. It was early, right? They were early. It was ridiculously valued for the time. But how is Dogecoin going to grow into $50 billion? It doesn't make any sense. So I'm with you. You tweeted out last week that, like, it doesn't even have the scarcity

thing of Bitcoin. Like, you can mine this stuff all day and keep, it's not. So I'm actually confused about that because this guy, Billy, the Dogecoin guy, tweeted to me that actually it is finite. I don't know what's wrong. The reason that this kind of annoys me is because I think it's going to get worse. I think this stuff is going to get even dumber going forward. I'm much more annoyed by the GameStop and the AMC stuff in the hurts of the world because it worries me when the stock market is a casino. At least if you're doing a doge coin, all right, fine, is doge coin? Everybody knows it's a joke. But do you think that a company like Robin Hood should even allow it to be traded on their platform? How about that? Of course they should. Why? What do you mean?

Why couldn't they take a stand and say, like, we're not going to allow this to be even trade tonight? Like, don't you think they're making it worse? Take a stand for what? They're trying to make money. I don't even know what you're talking about. I don't know. I mean, will they allow people to play roulette on their... Yes. If they get money. That's what I'm saying. But I'm saying it at a certain point, you have to have some morals. I appreciate if they have some morals. Dogecoin actually took down Robin Hood. I think there was such demand. So you could say, like, oh, it's just a few kids playing, but it's really not because obviously it's enough to take down Robinna, which is a pretty

big website. I know. Like so much of this stuff that's happened in last year, to me, has been kind of like fun in games, but this one for some reason irks me. And I just, I don't like how many established people are, again, pushing other people to get in on this. Yeah, that part annoys me. I just don't know that I buy the fact. I do buy it with trading stocks, but I don't know that you're going to have people in 15 years who's like, man, Doche coin set me down the wrong path. But I don't want people complaining about the fact that the system is rigged against them and they can't save and then they're putting money into stupid shit like this. That's my problem. I have it. I don't want people to complain about the system be against them and I'm fighting back and then I'm going to invest in Dogecoin because

that's going to fix things. Fair enough. There was some misreporting of what happened with Coinbase's direct listing. So the CEO sold $291 million of shares and people are outraged. It's 1.5% of the shares that he owns. And guess what? That's what a direct listing is. Here's a good quote from Noel Aikison from Coin desk. A direct listing is a liquidity event. An IPO is a capital a raising event. Selling by insiders, it's sort of the whole point. They had to sell, right? There had to be supply from someone. Where do the shares come from? The company is not raising money. It's a liquidity event. So where did the money come from? This is interesting. Two-thirds of the $5 billion of shares were from Fred Wilson and Union Square partners. And Druson and Horowitz,

so again, two-thirds, two-thirds of the $5 billion in supply was from Fred Wilson and Union Square partners. And Druson and Horowitz sold $500 million worth. So the share sold from the company I thought somebody said that the CFO cash out of all their shares was a pretty small part of the story. So last week it was like a $60 billion company. There's only $5 billion. So there's still a ton that are held by insiders and people at the company. Yeah. So of course, you're right.

This had to come from somewhere. It's just something for people to get mad about, I guess. And even if the founder, Brian Armstrong didn't sell any of his shares, it doesn't really matter. Like, this guy has got money growing out of every orifice in his body. Like, he's going to be fine, right? He could have borrowed against the share. He could have done something else to get a liquidity event. He probably just did this, whatever.

Speaking of liquidity, there was a quick flash crash in crypto on Saturday night. I was sleeping. I don't know if there's misreporting or misinformation being spread or I guess nobody really knows what happened. Wise and Stahl said, he tweeted from the block, an incredible sign of how big crypto trading has become over the last year. The dollar volume of leveraged long traders who got liquidated in last night's flash crash was one of twice as big as the crypto crash of March 2020.

So they've reported that $7.6 billion in crypto long possessions were liquidated? Pretty wild that that can happen over a weekend. 7.6 billion. We don't need 24-7 stock trading in the stock market. No. This article in the Wall Street Journal, it's worth a read. So he was also, it's called This Vegan Billioner Disrupted Crypto Market Stocks may be next. So Sandbank and Freed, he was actually on the Adlaughts podcast with Joe Wisenthall and Tracy Alloway. It's really good. This guy basically figured out how to arbitrage between different crypto exchanges and he had to set up his exchange in Hong Kong just to access some of these markets. It's a really interesting story.

His exchange called FTX, they're going to try to do 24-hour trading where they tokenize these stocks like Tesla. Somebody emailed us to buy Solana. Zach Prince was talking about Solana on this exchange. I can't buy it. Well, you can't buy it in the United States. Right. So a lot of this stuff is only, yeah, it's overseas.

So kind of like you cannot take part of BlockFi. I'm guessing if these stocks were allowed to trade 24-7, crypto's crazy. Like there would be a lot of manipulation and pushing around and it just, it's unnecessary. But I'm thinking getting back to our do. gogecoin stuff, it's going to happen, right? People are going to want that. So I think at this point, there's probably no, someone's going to do it. If it's not this place as someone else, don't you think, they're going to figure out some way unless the regulars step in to shut it down. It's so easy to think this is the top. It could get so much dumber. I don't know how, but it can. That's the thing.

I don't even really think this is the top. I think it's going to get way, way dumber than this. Do you think people are thinking that there's going to just be like a full sale wipe out of everything? I just, listen, 99% of this stuff is garbage. I tweet. I, the chart of top cryptos at CoinDesk, the thing there might be hundreds or thousands. Yes, but there's a scarcity among all those hundreds and thousands. That's true. I have more to say on that. We'll hold off on that for later in the show. But Bill Miller in his Q1 letter wrote this. Can I just say something real quick before we get into this? I never know he had this letter that he put out. It says Bill Miller one Q. I've never seen the one before the Q before. Usually

it's Q1. He said one Q. He's a contrarian. Okay. There's a contrarian. Some stock market models are flashing yellow, indicating caution at these levels. I am reminded of the aphorism attributed to the eminent statistician George Box, who said, all models are wrong, but some are useful. The models that show the market is overvalued are not wrong with respect to their parameters, but they are not useful, in my opinion, because their parameters do not capture the complexity of what drives markets. Market or economic forecasts are forecast, not of variables ordered in particular ways, but forecasts of paper, whatever. So Mobeson did a piece last week where he showed the percentage of companies in the Russell 3,000 with negative net income

from 1980 to today. It's basically gone up over time with some dips here and there, but it's at an all-time high. And one of the obvious takeaways from this chart. So this was below 5% in 1980. Now it's approaching 40%. Big move. So you look at this chart and if you have any hair in your head, you rip it out and you say, this is a house of cards. This doesn't make any sense. This is going to end badly, fed manipulation, blah, blah, blah, blah, blah. Actually, what's going on is the rise of intangible investments. Why? Because from an accounting point of view, these show up on the income statement and not

the balance sheet. And what that means is that these are not investments. They're not R&D. They are expense. They're viewed as expenses. So when you look at a chart of the intangible investments that companies are making, it's massive, $1.8 trillion in 2020. So if you wonder why all of these companies are reporting negative net income,

well, here's a pretty good place to start. So if you're someone who's beating your head against the wall for the last seven years and saying Tobin's cue shows this and what about market cap the GDP, things have changed and maybe the market is not as dumb as you think. I also think you can be like us and say so much of this stuff that's going on and out is just doesn't make any sense. people are throwing caution to the wind and acting crazy. But that doesn't always mean it's a bubble. And I think there are some people in 2008 who completely, this is what I'm worried about with the Dogecoin stuff,

people in 2008 had their brains broken. And they think everything that has like a 15% price rise is automatically a bubble. We've been talking about the housing market for the last few weeks. And especially in places like Twitter and YouTube, the comments we get are always like, just wait, you morons, this is going to happen. If it keeps going up, then it'll just crash even further. And these people, it doesn't matter what you tell them. They think everything is. a bubble and they have thought that every year since 2009 and they're not going to change their minds about it. So I think it's okay to think things are getting kind of crazy without also saying this is going to be a bubble that's going to end humanity. That takes away the reality of the

fact that markets are just so much different now than they were in the past and they're more professionalized and that money has to go somewhere. That's my simplest reason for saying this is not a bubble that's going to end humanity. Is that okay to, right? I don't know. I'm arguing against myself in this podcast, I guess, but I just think the people who see bubbles everywhere all the time are just never going to get out of that mindset. All right, here's the thing, what I was talking about, like, for Robin Hood and the dog coin thing, can they just, for ones, like, look out for their best interest? So this was in the Wall Street Journal.

Hang on, Ben. Hold on. Let's just pull on that thread. If they disabled trading on Dogecoin, don't you think their users would be so angry that they force them to miss out on this 4,000 percent gain of the last month or whatever it is? If it was harder to buy, we probably wouldn't have had this 4,000 point gain. But who's it hurting? What's the problem? Why would they limit Dogecoin? They're not going to get into that business of picking and choosing. Can you buy Dogecoin at Charles Schwab or Vanguard? They decided not to.

That's not Robin Hood. Hear me out. I can't believe I'm defending Robin Hood against you. The most vexing for investors like Mr. Long, who they profile here, is that despite the new platform's sophisticated technology, they don't make it easy to deploy tax-wise technique known as specific lot identification. Investors use it to lower their taxes sometimes significantly by choosing which shares to sell. if they have lots bought at different prices and aren't selling all of them. So part of your stock that you bought could have a gain while the other part could have a loss, and you could use that lost offset some of the gains in as far as taxes go. Robin Hood doesn't allow you to do that. Why don't they allow you to do this? I don't understand. And maybe it's too hard for them. Here's why. They aren't allocating resource to this project. I think it's that simple.

They're focused on growing. That's where they're dedicating their resources. But would it be that hard to every once in a while throw their customers a bone? They just got rid of confetti on their app. Again, I'm still a user, Robinite. I think it's a great user experience. but I think stuff like this just, why? I think you're holding them to way too high of a standard. They're not Amazon or Costco that has like a relentless focus. Seriously?

You're defending them for this? Come on. What do you expect from them? Sorry, maybe I'm a little salty day because I had my hangover from the second shot I got yesterday. Why are you giving them the benefit of the doubt of anything? Their business, they're trying to grow and they're doing it spectacularly well. If like everyone's in a while, like they just didn't treat their customers like crap, how much better things would be and they could still grow?

I don't know. Am I too salty today? Is that the problem? You are wearing denim. I have my Jay Leno on today. Remember when he would go on the street to ask people questions and he'd go denim on denim, the Canadian tuxedo? I don't have jeans on, though. All right.

So you don't think this is a big deal. All right. Listen, I understand what you're coming from. But I don't know. There's only somebody else in the day for them to put their resources to something. They can't whack every mole. And they're growing. They're in growth mode.

Yeah. So let's give everyone. Dogecoin and don't worry about taxes. That'll sort of self-out later. So, Ben, you wrote a book called Don't Fall for It, a short history of financial scams. And I honestly think that if Charles Ponzi were live today, he would be able to raise so much money. And a lot of investors would think he's like a hero. Let's get into this. I created a BitCloud account. And BitCloud, for those of you who don't know, which is probably 95% of listeners, is like Twitter, but on the blockchain for raising money. Like every user has

a cryptocurrency that has a value. And it's kind of silly. And I don't know if it's a scam, but there's a really good video by CoffeeZilla on YouTube, basically saying that, like, is BitCloud a scam? Because so what happens is they are creating tokens for every celebrity, even if a celebrity is not on the platform. So for example, Mark Hamill, Luke Skywalker, was notified that he has coins that are circulating. And he tweeted warning, this is a scam. have nothing to do with this. I would hate to see anyone spend a penny on what is complete fraud by con artist using my name without permission. Jordan Belfort is featured prominently at the platform. His stream is pretty wild. You have to buy BitCloud. You tried to explain

this to me. I still don't get it. I'm almost done. You have to transfer Bitcoin from a wallet to this place, convert it into BitCloud and use BitClout to buy your creator currency. So I did all that. Here's the thing. You're mad about Dapper Labs not being able to get your money back. BitCloud, they're not even trying. They're not even saying, like, oh, we're working at it. No, no, no, no. You can't get the money out. That's not even a thing.

So you set one up for animal spirits, like, as a joke to figure this out. Last thing, Chamoth and Sequoia are investors. So, yeah, I set up an account. I think I've spent a few hundred bucks buying some coins. I don't know if it's a scam or not, but I don't even know what to make of this. I still don't understand it. I guess this is the idea is that eventually you'll be able to invest in a celebrity. And if they do well, then you do well.

I guess the thing is Twitter monetizes you. Why shouldn't you be able to monetize you? monetize yourself. I think I kind of get it, but I'm not sure about this. There will probably be a way to do this in the future that makes sense. It sounds like this one is shaky at best, whether it'll work. I've been spending some time on Nifty Gateway and OpenC and all of these different tokens. And obviously, I don't know anything about this. I'm not a tech person. I'm not like an early adopter or a computer person. So I don't get any of this stuff. And I've just wondering, like, how do people have time for this? This is such a giant ocean. How do you separate the

garbage from the real stuff. How do you even learn? And what's the answer? Just learn. Just go on Discord. Just get involved. Just play around. But like, I have a job and kids and stuff. This is a young person's game. This is a young person's game. And it's a young rich person's game. It's a young rich person's game who might not have to work because they have so much gosh darn money in Ethereum that they actually have the time to sit in front of a computer and fall down this rabbit hole. For most normal people, I just don't get it. This is like us trying to figure out buying Bitcoin in 2012 if we were going to or something, right? We're Owen Wilson and Ben Stiller tapping the computer trying to say something's in there. I don't know. Yeah, I agree.

The other side of this is like Chris Dixon was on Patrick O'Shaughnessy's podcast last week and laid out like the potential future for crypto and it sounded amazing. But he's like, listen, I don't know what is ever going to come out of this. I'm just hoping that we've laid the groundwork and developers will take it from here. And I think that's why the company that figures out how to make this a better user experience is going to be enormous. Maybe that's why Coinbase was so huge because they made it easy to buy crypto in the first place. So the company who comes and figures out all this defy stuff and makes it easy instead of making it paying these ridiculous Ethereum gas fees or whatever it is, that company is going to be massive. Yes. So this morning, it seems like

this is part bubble, part the future. It seems sort of like equal parts both. But this morning, I tried to buy, there's a defy index called index coop. I'm not trying to get rich. I'm just doing this to learn. That's really all this is. I tried to put 500 bucks on this thing. doing it a little bit to get rich. Remember, what did you say to me for Top Shot? I'm going to cash out when I make 50K. You think that I said that. I might have said that, but you don't have a sense of humor. I was making a joke. Come on. You were half serious. I might have been 9% serious. I'm pretty sure I was joking. All right, I was serious. Whatever. No, I'm just kidding. That was a joke. Index coupe is trying to take, not them. I don't even know where

these fees are going to. To the Ethereum miners, I don't even know where these fees are going. But the gas fees on this, which we've mentioned before, I tried to buy $500 worth $125 to process this. So more than 20%. And I can already hear the audience turning off. So why don't we move off of this? All right. Real estate, again, we talked about this last week offline. I don't always pound the table and plan a flag and all this stuff. But I think the whole thing about real estate not being in a bubble is something I very strongly agree in. Here's some more stuff to back it up. This is from the Wall Street Journal again. they always do great stuff on this. Number of buyers who locked in mortgage rates for second homes in February was up 93% from a year earlier, far outpacing the 32% climb for primary

residences. So guess what? A lot of these homes being purchased are second homes, which kind of makes sense from the perspective of, listen, if I can work remotely, I can work anywhere, having a second home makes way more sense. This is like the Airbnb thing where in the future, instead of going on a week-long vacation in the summer with your family and taking a week off of work, you're just going to go somewhere for a month potentially, two weeks and stay there and work and also play. I have to call myself out. I'm pretty sure last week before I said, this isn't a bubble. It's not like people are collecting homes. All right. It's not a bubble. However, people are buying second homes because second investment properties were 14% of all

purchase mortgage applications in February, which will share this chart is by far a record. So I'm not saying it doesn't make sense, but... This is only going back to 2010. But here's the thing. This is why those credit scores are so much higher because people who have good credit scores have the ability to buy a second home. It's 14% of buyers, so I'm not sure how much. It went from 7% in 2020 to 14% so it doubled. So this is people with good credits course. Otherwise, if the bank has tight lending standards right now, we covered a couple weeks ago, they're not going to allow someone with poor credit to buy another house. So this is people who have money. This is, again, why this is a healthy market in a lot of ways because people who have money in the means to do this are doing it.

We get a lot of questions about this. What should I do? I think this is, again, it's a demographic story more than anything else. And even rising interest rates are not going to stop the fact that there's millions of first-time home buyers that are my age that are going to buy a house no matter what. Okay, here's the other number from the journal. The U.S. housing market is 3.8 million single-family homes short of what is needed to meet the country's demand. And they're saying here's the other part of it. There's a shortage of builders too. So in 2007, there was over 32,000 spec builders operating in the country. By 2017, it was down to 15,000. So this thing got more than cut in half the number of builders in the country. They're saying a lot of it is, even with rising

demand. A lot of the builders are now these huge builders that they either consolidated or the other ones went out of business. Ben, do you smell that? What's that? Opportunity, my friend. Could be, I guess. But it sounds like a lot of these bigger builders are more risk-averse now. Right. And aren't building as much as maybe they should be. Once burned, twice shy. So this is the kind of thing that it's not going to just all of a sudden happen that builders are going to rush out. And I'm sure for you, like in your area, even in the suburbs, the houses are pretty close on top of each other. There's not a lot of room to build houses, right? Careful what you say about Long Island. You've told the line the last few episodes.

Well, I'm just saying there's so many more people there that there's probably not a lot of room to build, right? You'd have to keep going way out. They need to move all the office buildings out to build new communities or something because there's no room to build in a lot of places. There's nowhere to build. We got to listen to a question. Back in April, you answered one of my questions on the podcast about whether the housing market was about to drop. Well, I bought the house in May, I guess last year, in May for 291K, and I am now refinancing it just a price for $418. Wow, congrats. I was just looking to lower my rate and payment, but now I might as well take a cash-out refi or any equity in excess of 20% LTV. Do you see any downsides besides potentially yoloing the money away? Yeah, put it in Dogecoin.

I really need some time off and working, so I think this could be my out to rent the place out for a year or two and travel. Yes, I'm a millennial. So this person is not alone. Look at this next chart. NICATI cash out and refinance is not an all-time high. Obviously, 2006 was insane. But you've got, holy, wait, what?

$50 billion? Goodness gracious. Maybe that's why Dogecoin is doing what it's doing. But especially in this case, if you're still keeping 20% of your loan to value and taking the money out. What's the downside? I'm sure there is one. I'm not a real estate person. But speaking of this chart and what I just said and the Dogecoin, and remember I said, like, Bitcoin is propping up the NFTs and the top shot?

And is this like a flywheel of an asset inflation going on? Like, what is going on? Come on, remember asset inflation doesn't happen. Yeah, I just said it. I'm not taking it back. If I'm a Wall Street strategy, put my Wall Street strategy's head on, this is the perfect storm for all this stuff. There you go.

Right? I don't know. I think we need a better phrase. Than perfect storm? It's a first half story. All right. But yeah, no, I mean, the downside, the house prices crash and then you don't have the 20% loan to value anymore, especially if you're a young person and you can take this money out and

don't want to just sitting in your house, I see no problem with this at all, especially if you've seen such great appreciation and you've got that leverage and. So the economy is booming? Can we say that? The economy is on fire? U.S. retail and food sales services. I pull up this chart from white charts. It has just this crazy V like the stock market last year.

And then it gets back on trend and then breaks through the trend like, what's your technical analysis on this? This is like a witching hour double top. What's it called? Just a good old fashioned breakout. What's going on here? Are these Stimmies? I'm sure that's part of it.

And it's just people going crazy, right? Great Depression to Roaring 20s just like that. But this thing is going on. Here's another one. I think wage growth is coming. So this is from the Wall Street Journal. trucking companies are having, there's like tight shipping capacity, they need more truckers. This one Knight Swift Transportation Holding Company, the largest truckload carrier in North America

last week said that it is raising wages for recently certified drivers that have jumped by 40% or more in recent months. These people are making 60K first year out after training. So the question is, are these wage increases going to be contained to certain parts of the economy or is it going to be broad-based? And if it is broad-based for how long and what does that do to inflation? Because that's the key driver. The people who were able to work remotely and have all that stuff work out pretty swimmingly from the pandemic besides being stuck at home and stuff all the time. Those people who benefited and had high stock prices, the white-collar workers, maybe it will be the other people that aren't them that experienced most of the

gains and wages. It'll be service workers who had to go on the front line, people who are keeping the economy working and moving, the people who actually had to take a little more risk. That'd be a good thing, right? That honestly makes sense to me. Here's another shortage thing. The CEO of Airbnb, what's his name? Brian Chesky said, to meet the demand over the coming years, we're going to need millions more hosts. Currently, they have about 4 million hosts. He says, I think that we probably will have a high cost problem where there will probably be more guests coming to Airbnb than we'll have hosts because we think is there's going to be travel rebound coming unlike anything we've ever seen. We're working our hardest to get more hosts on the platform.

Here's my idea. First, I thought, well, why doesn't Airbnb just buy some houses? But then that's a little more risk for them. Why can Airbnb get into the housing business where they offer financing? And they say, if you're going to have multiple homes, for every two homes you own, we'll give you a little bit of break on the financing, and they give low-cost loans to people to be hosts and recoup their money that way through loans, make the process easier to buy a house, they help the people set up. Who says no there? Did you just become CFO? I think so. Brian Cheski gave me a call. Obviously, that's a little more risk when you're getting into financing game, but you also have more control of the process. What do you think? Neat shark, it's interesting.

I don't hate it. I know I called up a Charlton earlier, but if I brought Mark Cuban on, if I apologize to him and said, hey, shark tank this, what do you think, cubes? Sorry, Mark Cuban, I don't really think you're Charlton. I was doing a little cranky earlier in the podcast and I'd like to apologize for my words. You know, good on you. Not everybody can do that. Credit to me. Credit to you. Very open-minded. Jamie Catherwood. Jamie does his usual weekend history reads. And there's a chart in here. He was doing a lot about inflation. And this caught my eye. You have like the recession dates shaded on those charts. It looks like we used to have a recession every other week. We were always in a recession.

Basically, pre-1900, you were in a recession more than you were not, more or less. Yeah, things were always bad for the economy and probably for life. The funny thing is, I'm guessing 75% of the time most people had no idea. They were just on their farm, right? Plowing their fields and dealing with their cattle and their... I'm actually going to disagree and say they were probably acutely aware of recessions back in the day because everybody was like an actual worker, not like this gig economy nonsense where they're still getting paid for it to be an influencer. I'm just saying, like, this was just the way life was. Like, GDP didn't exist until after the Great Depression as a measure of, so people didn't, I mean, whatever.

They weren't talking about the Phillips curve, but they definitely knew, you know, good economies from bad economies. These aren't cavemen, Ben. Goodness. Oh, you know what's getting kind of expensive, Ben? Used car prices. Lizanne Saunders tweeted the Mannheim. Never heard of this one. The Mannheim Index of used car prices. I don't have that an all-time high, but yeah, no, it is. I feel like you could just make up any name for some of this stuff. Like the Chapwood Index was a new thing to be made. the Mannheim index or the Animal Spirits Index. Okay, here's my personal experience with this. Both of my wife and I drive SUVs. I drive an explorer. She drives a Honda pilot. And kind of practicing what I preach here, not driving a, right? In the last week, two weeks, both of us have gotten letters from them saying, hey, we need use cars. I lease. I'm sure some personal finance goals will send an email saying, you're an idiot for leasing. But I like having a new car every three to four years and I don't like doing maintenance. I've had so many lemons in the past where I've spent. spent more than the car was worth, probably, fixing it up. And so I like the idea of just driving something new, and my kids wreck cars anyways. So having a new car a few years is fine. So they both said, listen, your leases aren't up until the end of the year, but we need used cars. We're willing

to basically pay for your used car more than it's worth, because we're going to sell it for more, and you can get a lease a new car. The problem is we have so little inventory that you're not going to have much of a selection on the new one. But you can basically trade up to a new model by trading in your current one and pay the same exact monthly payment you are. This is the tug of war between inflation where you see used car prices rising. You go, oh, inflation's here. But then the new car was basically the same thing, only it's a few years newer and it has upgrades and stuff. What do you think of that? What color did you get? It's like a silver, light gray kind of thing. That was the thing. It was like, you can't choose your color. I'm an A to B guy, so I don't really care about

that stuff. So I was like, okay, fine. And the funny thing is the guy said, used car inventory is so tight because they have a lack of those chips in them and the production slowdown. They said they usually have 250 cars on the lot at any given time. And right now they're down to about 30 or 40. So anyway, it was tight supply there. So that's my used car story is that like they are just jonesing for these cars so bad because they can sell them for higher prices now because they're in such high demand. George Perks tweeted after we got retail sales and some other blowout economic data,

rates came down quite a bit, which is probably the opposite of what you would expect. So George tweeted, I'm just going to go out on a limb here. but maybe the bond market is more driven by positioning and flows than by incremental new information. So this is Tracy Allowy's flows over a prose thing. So the idea is economic data was crazy good last Friday and people would think, okay, bond rates are going to rise. But instead, they felt because people rebalanced or bought because yields are rising or whatever. I agree here. Okay. I feel like I'm losing my mind. Have you heard typing like on a computer while listening to podcasts?

Probably. Last week, actually, you and I were on a web. together and I could hear typing and I slacked you and said I was typing. You were typing to me. So I said mute your mic because I can hear you typing on the webinar. So I heard it on odd lots and infinite loops. I feel like I'm taking crazy pills. Like I literally hear and not just like typing like on and off. Like it sounds like a computer effect. I type actual typing. The funny thing is is that in the past all you hear on podcasts is sirens because people were taping them in New York. people aren't taping them in New York, they're in their houses, like in downtown New York or Manhattan, wherever they are. You don't hear the sirens anymore. It sounded like computer type. Like,

it sounded like a, I don't know. Maybe I'm going nuts. You're saying that they're putting it in on purpose, like as a soundtrack? Yeah, it was weird. Like, that's what it sounded like. Typing is the new laugh track. Okay, sure. Do you remember Luminary? Was that the subscription podcast place? Yeah. What happened? They're still going. Who's on there? Trevor Noah and Russell Brand. Yeah, I guess there was never one there that got me to try it in the first place, so I forgot about it. There's a lot of stories going around about substack and the rise of just a new way to go to consumers. Reuters, I mean, the news business is just rapidly shifting. Reuters is going behind the paywall.

They pretty much all are now, right? Bloomberg, Wall Street Journal's been it for a while, obviously in New York Times. Market Watch. I bit the bullet. I'm a Bloomberg subscriber. I feel I subscribe to every news service now. I mean, it's crazy. Yeah, you kind of have to, especially if you read a lot of these.

So I asked Josh this last week on a video we did. So New York Times had this thing about substack and how a lot of the best known people are going there. But also people are just trying to start out too. So like if we started our blogs today, don't you think instead of WordPress, we would go straight to substack? I'd go to ghost. What's that the other one? So substack takes 10% ghost is a few dollars a month, but Twitter has a review. Now Facebook is getting involved.

You can do substack without charging people. You can just do a free substack. I'm saying, don't you think even if you're trying to build an audience, it would just be easier to do that and try to, like I remember building my own website on WordPress back in the day, having no clue. It was relatively easy, but I'm still Googling all this stuff and trying to come up my own header. I think it would be just easier to start your own newsletter substack and just let them handle all that stuff and not even try to do it on your own. If I was starting today, I would have a substack. Oh yeah. Here's another one. A former editor of Vanity Fair has been working for several years to create a digital publication with a business twist. Its writers will share in subscription revenue. Think of it as Vanity Fair meets substack. I don't know why the New York Times or someone like that doesn't just buy substack. Why wouldn't they just do that and say, all right, if you become one of our biggest people, you can go ahead and start your own newsletter whenever you want. What's the downside?

Yeah, I don't know. Okay. Let's do one listener question. The phrase stocks and bonds has become one of those pairings like peanut butter and jelly or lamb and tuna fish. It's a concise way to describe the acid universe and also the traditional portfolio. But how representative is that? How many retail investors have a stock bond portfolio? If this concept were to morph in the future, what's your guess in the new pairing?

For example, financials and alternatives, tax versus tax advantage, Yolo versus Vanguard. I think that's it. It's not bad. That's what I'm doing. A few weeks ago, I joked that I've never like not sold anything. I mean, that's not exactly true. I've never touched anything in my 401K ever. I am buying and holding my 401K forever.

But other than that, listen, everything's fair game. The clock is ticking. I buy something I'm selling. So I've got my vanguard, it's not vanguard, but you know what I mean. I've got my set in and forget it barbelled with my call it speculative. I'm not like a rapidly traded by any such thing the nation, but I've got things that are all over the place. Yeah, more of a fun portfolio.

And that's the dogecoin stuff that I don't care about is if you have five or 10% of your portfolio and you want to go nuts with it, that's fine. But I think the stock bond stuff getting back to this original question, I think that's always going to be like that. Those are the diversification building blocks. Right. Stock bonds and fun. Yeah, that works.

All right. Recommendations. So I took a flight last week, and I said this on our spaces, which, by the way, we're doing spaces. One More Thing. It's called One More Thing on Wednesday afternoon at 4 o'clock. It's kind of fun because it allows us to feel like radio DJs occasionally by we take questions from people. It's pretty easy to do. Yeah, things that we forgot to get to on this episode, things that might have kind of up on Tuesday or Wednesday. We bring people onto the stage to chat with us. Last week, we debated the merits of Applebee's as a restaurant. You know what? I feel like a snob. I don't mind Applebee. Who am I kidding? I didn't anything. I'm just saying I'm not going to like go there willingly, but whatever. Anyhow, it's been a long time since I've gone to the movies. I don't even remember what the last thing I saw in the theater was. Maybe uncut gems? I really don't remember. I had a kind of

a movie viewing experience on the airplane. It wasn't the same, but it was close enough. And I got very lucky. I watched some great movies on the airplane. I watched Snatch on the way down. And on the way back, I saw it being John Malcovic first time. I'm surprised kind of with myself. I loved it. Was your mind blown kind of from that movie? You can't really explain what it's about. I mean, it's so absurd, but it worked so well. It's one of those that gets better the more times you watch it. I've probably seen it four or five times. You have to watch it again once you know the weird premise going in. So it's Malcovich, John Cusack, Cameron Diaz, and I'm drawing a blank on her name from Get Out and 40-year-old Virgin. The guy who Charlie Coppin who created has got

such a unique mind. I also watched on the way back promising young women. And I got to say, How was that? My favorite movie of the year. Oh, really? Kerry Mulligan, right? Well, I did like Judas and Black Messiah. Other than that, sound of metal was good. But, yeah, this was like top three easily.

Okay, on my list. Two more things. Falcon on the Winter Soldier, I'm sorry, I'm bored. You're probably not watching it, right? I never got into it. Yeah, I didn't get that one, sorry. I don't know. I just, I'm bored.

I don't know what's to say. I'm just bored by it. I'm not into it. I'm going to stick with it. There's only one episode left. I'm not really into it. All right. But last night, I watched Nobody, which is Bob Odenkirk meets John Wick.

Tons of fun. That made me miss at the theaters. I 100%, 1,000% would have seen that in the theater. That movie was so much fun. It's very violent. So, FYI, not like gory, but violent. And I don't usually notice, like, how things are shot. Like, I'm not into, you know, I don't notice cinematography, but I noticed it this time.

combined with the music, great movie, cameos from Rizza, and Christopher Lloyd, who I thought died 20 years ago. I'm not kidding. I honestly thought he was dead. Okay. It's on my list, too. It looks good. Found the table on that one. That is a must watch.

My new podcast from last week is called Death at the Wing by Adam McKay. And Adam McKay just has an unbelievable record as an entertainer person. So Anchorman, Succession. Other guys? Other guy, yeah, he's got a great list. Step brothers? Oh, yeah, stepbrothers. He's like Will Ferrell's partner in comedy.

He did this podcast, Death at the Wing, and it's everything that I'm interested. So it's got NBA stuff, and it profiles in each episode of person who died at a young age, who was a basketball player. But then it's also about socioeconomic stuff and how everything has changed. It's politics. If you're a Ronald Reagan fan, you probably don't want to listen to this one. It's not very kind to his record, but it's very good. And the one episode about Benji Wilson, who was this number one high school recruit at a college, I think they had a 30 for 30 on him. Yes.

And they interview the guy who shot and killed him. And that whole episode blew me away. Here's a stat from the one that was kind of crazy. In 1980, Flint, Michigan, because of all the auto workers, had a higher median income for young workers in San Francisco. That blew my mind. Okay. I caught so I married an axe murderer last night. Oh, I love that movie. I mean, just the quintessential 90s, total 90s movie, it would never get made today, probably. One of my favorites. He'd move. I was going to say, him playing the Scottish Dad is just kills me every time. That was a pretty good impression there.

Yeah, the Sputnik. Somebody emailed us. This is a good tool. I mean, it's not that hard to Google it. But if you want to know where something is streaming, there's a site called just watch.com. Now that my TV are both Roku TVs, Roku has the best search function where they'll tell you any of the apps that it's on. And even like some of these new free apps that I've never heard of, it'll pick up what

movies and TV shows. Can you explain what Roku is? I thought you're not a cord-cutting guy. I'm not, but you can still have your cable box. It's a Roku TV, and the remotes are so simple. There's like six buttons on it. It even has like a Netflix button or a Hulu button. It's just like your hub.

It's like Amazon Kindle Fire, but it has everything. Sometimes Amazon won't search through every single app. This searches through every app if you search for something. Is this a monthly service? No, you don't have to pay anything for it. It's just like the hub. All right. Yeah, I like Roku.

We have a Roku soundbar too. It works really well. And you could do it through there. All right, one more. This is a double recommendation where I've since I already recommended it once. I rewatched on Showtime anytime, I think. Shithouse, which is a college movie. It's that young guy who wrote and directed.

You said it's not for me. Do you stand by that? I think I stand by. This is like the most realistic college movie I've ever seen in terms of like the stuff you go through is college and how, you know, a lot of people in college are just, and I was like this too in many ways. You're just kind of a shitty person sometimes in college. You don't know why as a young person. Like you treat people like crap. Like in college, they nailed that whole.

dynamic perfectly, I thought. I mean, the guy who wrote and directed and starred in it is just so talented. I think he's going to, like, do amazing things. I can't remember what his name is. I got to talk on this thread a little. Why won't I like it? Okay, give it a try. No. You can't make me. You know what? Actually, since you like romance, it is kind of a romance movie. It's a college romance movie. Maybe I underestimated it. Maybe you'll like it. All right. I'm in. It's a little on the slow side. I'm worried, maybe I'm going to lower your expectations, so maybe you'll like it and jump over that small hurdle. Okay.

All right, Friday, we'll be talking more on the real estate market. With funder eyes, again, Ben Miller's coming back on for the third time to talk real estate. We're going to be getting in a lot of the residential stuff that's going on there, professional people buying up. So check that out. And again, Wednesday at 4. Actually, you should float to him your Airbnb idea. Okay, we'll see what he says.

Animal Spiritspot at gmail.com, and we'll talk to you then. Thanks again to Osprey. It's common sense crypto. Go to Ospreyfunds.io for more information. Thank you.