Animal Spirits Podcast - The Richest Country in the World (EP.351)

Episode Date: March 13, 2024

On episode 351 of Animal Spirits, Michael Batnick and Ben Carlson discuss: one of the most resilient stock rallies ever, money market funds vs. crypto, Americans are rich, the stock market has always been concentrated, inflation at the grocery store, the biggest reason the Fed needs to cut rates, some good news for first-time homebuyers, and much more! Thanks to the Texas Small Cap Equity Index ETF ($TXSS) for sponsoring this episode. Learn more at: https://www.texascapitalbank.com/etf-funds-management/txss Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by the Texas Small Cap Equity Index ETF, ticker TXSS. Look, I was looking at this the other day, the biggest economies in the world, and they had them all listed by GDP. And you could put two states in there, if you wanted to from the United States. California is the biggest. So I think California is like the six biggest GDP in the world. Wow. It was his own country. Texas is in the top 10 of economies worldwide.

Everything is bigger in Texas. Yes. Although they've got a hole in Dallas in their running back position. Did they sign anybody yet? Maybe Derek Henry, everything bigger? That's true. So more public companies are based in Texas than any other state. I didn't know that.

So Texas Small Cap Equity Index ETF, trades in the NASDAQ, gives you access to small cap companies headquartered in Texas. I would invest in Riggins Riggs if I could. You're not a Fred Nett-Lights fans? No. Riggins Riggs. From Friday Night Lights. What type of company is that? Tim Riggins was the running back in the show,

and him and his brother started a company called Riggins Riggs. Still around? I don't know. To learn more about TXSS, visit our website or hit the link provided in the description on the show notes. Investors should carefully consider the investment objectives, risks on charges of the fund before investing. The prospectus contains disinformation and other information about the fund

and it should be read carefully before investing. Investors can obtain a copy of the prospectus by calling 844-822, 3837. Past performance is no guarantee of future results. The Texas Equity Index ETF is distributed by Northern Light Distributors, LLC, member FINRA SIPC, which is not affiliated with Texas Capital Bank private wealth advisors. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management.

This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. I have exciting news. We've got a Los Angeles office now. Now, we speak with a lot of advisors,

and I always say I'm just, geographically agnostic. We just want the best people. I don't care where they are. I'm not going to name locations, but I don't care where they are. Really, truly doesn't matter. We're a virtual company.

I'm not virtual, but we people everywhere. We're made up of coastal elites and fly overstate people like me. We've got a great mix. So, we are, but it's nice to have somebody in Los Angeles finding. Not just one person, two people.

Incredible planners, and we're coming to see them. We're coming out. We're posting up. If you are in the Los Angeles area and you're wondering about how we help clients in our day job with tax management, estate planning, obviously investments. Now is your chance. On April 29th and April 30th,

I will be in Los Angeles with a lot of members of my team if you're interested in reaching out. Hit us up at info at ridholtzwealth.com with the subject line, Los Angeles, to set up a time to meet. One more thing, advisors, we are, like I said, we got two people there, but we're just getting started. There are so many producers of shitty horrors.

movies that you've mentioned that should be clients. Tons. If you've directed anything that's dark, wicked, or evil, I want to meet with you. One more thing. Josh and I are doing a live Compound and Friends episode. We haven't announced the venue or the speakers, but let's just say I'm excited. It's going to be good. It's going to be grand.

And last thing, we're going to be, where are we going to be if you want to come see us? We're going to be in the West Hollywood area. We've got a great venue. Very nice. I don't know if Sheika's right word. I'm not really quite sure what that means, but it's a nice spot. Okay. All right, Ben, let's get to it.

What's going on? I looked at this the other day. We've hit something like 16 or 17 new all-time highs in the SEP already this year, which seems like a lot considering March isn't even over yet. So I looked at this. 35% of all trading days this year have been an all-time high. Hmm. I tweeted this out.

I said, that seems high to me. 35%. I think historically the number is like 7% of all-time highs on trading days since 1950. So any trading day, 7% or 8% of the time, it's an all-time high. 35% seems high. Jason Gepford, who we've talked about in the show many times, the sentiment trader, said it is.

It's the fourth most ever. So we went back to 1929, and this has happened in the 60s, in the 80s, in the 90s. I'm actually surprised, so he's saying to start the year, this is the fourth highest ever, like percentage of days. I'm surprised that there was times when it was that much higher. So 46% in like 1963. That's a good year.

It's a good year. I guess so. Ben, last week I was like sort of wondering why, without reason that I can come up with, the S&P is just melting higher. I think the data point that we threw out last week was like 16 of 18 weeks. It's higher. That hasn't happened since 1970. I saw a tweet this morning, Bank of America.

I think Bank of America is raising their earnings percentage. share estimates for the year. And maybe that's one reason is that things are, fundamentals are still improving. I know that's sort of, maybe I'm reaching here, but I don't know. Still don't know. Everything is still, Carl continued tweeted this out this morning. He said for, this is from Delta. Delta Airlines CEO says nine of the past 10 sales days in the company's history have

occurred within the last 10 weeks. Remember when people were worried that. along the stock. Are you really? Yeah, I've run it for a while. You held out longer than Buffett, I guess. Remember when people said that, like, air travel is going to be impacted forever because we're not going to have any business travelers because people are going to be working

from home and you're not going to have as many business trips? Seemed sensible at the time. I was saying that. We get updates from people who go to travel because they want to tell us about the resort they went to in the Keys. I love it when people send us pictures of their Miami Vice when they're on the road because they try them. But a few people in the last couple weeks have said,

Listen, the only signal I need about the economy is traveling because they're like everywhere you go. The airports are packed. The restaurants are packed. The resorts are packed. I know that that's an anecdotal thing. But if you do travel, you can't look around. I mean, what Delta just said, that's not anecdotes. That's, that's data. You can't. If you go travel somewhere, wherever you're going or any kind of trip, you can't look around and see how packed the travel everything is and think like, oh, people are slowing down their spending. No. It just hasn't slowed down at all. So back to the market, the Kobiec letter, how would you pronounce that?

Kobayashi. I mean, I want to say Kobayashi, but I don't see a, ah, let's go with it. All right, current market mentality. NVIDIA stock is up. S&P 500 goes to new alt-time high. Invidia stock is flat. S&P 500 goes to new all-time high. Invidia stock is down.

S-P-500 falls just 30 points. Yesterday, NVIDIA marked its largest percentage drop since May 31st. This was tweeted on March 9th, which I guess was Friday. It also marked the single largest loss of market cap in a day for Nvidia at $128 billion. Yet the S&P 500 fell just 30 points after a 27% run in four months. Is this the most resilient market of all time? Now, I don't know about that, but it's impressive. The point is that we have this huge company and people are like, well, the huge company is underperform.

The stock market's going to fall and it hasn't happened yet. You mentioned, I think, on Slack the other day, you said something about, what did you What was your line about hated bull markets? Me? Yeah. I'm not a, those words don't come out of my mouth very often, so. No,

you were comment, someone else commented about most, let me pull it up here. That's not a me thing. Okay, you said when people say, this feels like one of those hated rallies of all time, what they mean is I hate this rail.

Hey, hey, hey, hey, hey, hey, hey, Sean posted this. It was somebody else saying the most hated bull market, because I don't, all right, so go ahead. So, someone else said something about this

being one of the hated, most hated bull markers of all time. You said when they say, the most hated bull marketers of all time. bull markets of all time. What they mean is, I hate this bull market, which is pretty good. But I just don't think that you can use these contrarian sentiment indicators anymore. People trying to do magazine indicators and flows. And I just, I think it's all, I don't think there's any good indicators like that anymore. So you had, who was the guy you guys had on TCAF

last week? Todd zone. So he was talking, you guys were talking about how money markets are like the, the greatest fund ever for flows. Yeah. Like money markets funds. That makes sense, I guess. You could look at any, you could look right now and say, geez, there's all this money going into Bitcoin ETFs and crypto. And this is crazy speculative. But then you could look on the other side and go, wait, there's trillions of dollars going into money market funds. That sounds conservative. So I feel like you could pick anything right now and make it spin it to your, your narrative. But I think the point is, everyone just has a lot of money. People are very, people who have money in wealth right now have tons of options and they're putting their money into everything. Yeah, Americans are very rich. We're going to talk about it later in the show. All right, great chart from... I've seen these charts before. It's a combination of EPFR, Haver Analytics, and Deutsche Bank Asset Allocation.

Is this a Deutsche Bank actual chart? Who's producing this chart? I'm guessing. Okay. And what we're looking at... This looks like a came... Don't you think all wealth management or big financial firms have similar-looking charts? You can just kind of tell if it comes from a bank.

I guess Deutsche Bank asset allocation should be the tell. Yeah, that's from the bank. All right, sector fund flows. Cumulative sector, global sector fund flows. And it's telecom, which is taken in around $60 billion or so. And everything else is negative except for a little bit of money when it's telecom and industrials look flat. But money's coming out of everything else. Technology is it, right? Yeah. I wrote a- Remember when technology stocks were dead for like 15 months? They were. Not only were dead. They were buried. I wrote a post about like index fund flows

and how their impact in the market. When people talk about index fund flows, I think they're talking about the S&P 500, but what about sector fund flows? Those are index funds. Should that be lumped in? I suppose. Yeah, that's true.

I think people look at, those is more niche, but good point. But they are indexes, and their market cap weighted. Yeah. For the most part. This was, I don't know if this is interesting or what. So, Invidia had a pretty gnarly reversal last week.

Let's see if there's any follow-through. Maybe there will be. Maybe there won't be. Um, tech had, this in Bank of America, tech had the largest outflow on a single week ever. However, these charts need to be adjusted for, for market cap, right? Because in terms of just absolute dollars, yes, it was, it was pretty, uh, it was pretty hefty. But if you look, if you normalize that for a percentage of market cap, I don't know if that's, the dollars are bigger now. Yeah, exactly. Way bigger. Markets bigger. Yes, I agree. Yes. It looks like, it looks like. an outlier, but it's relative to the market. It's not that big of a deal.

Ben, last week when we were talking about, like, I can't believe that we're back. We're doing the same shit in terms of like the meme coin mania. And it's different than 2021. It's not quite as insane. It's not literally everything. Like, there's a lot of high beta stuff that is definitely not participating this time around. But we've spent a lot of time over the years talking about valuation and long-term valuation and long-term return expectations. So the valuation composite for the S&P 500, and this is a combination of price to earnings, forward PE, price of book, price of sales, and inverted dividend. You know, this comes from Bell's case group of BMO.

2021 was super expensive, right? Like, we knew it at the time, and valuations came way in as stock prices did. But now we're back off to the races. Now, we're not quite at 2021 highs, but we're not far away either. Like, we're doing it again, huh? For valuations? I remember at the time, it almost made more sense back then because rates were so low. When rates were at zero, it made sense for valuations to be so much higher.

You can't make the same argument this time. It's surprising this is happening with rates at 5%. It is surprising. We also got the ROE pulled back, which is obviously a big driver of returns. And now that's not all the way we recovered, but halfway recovered. I really, I keep thinking about that article that we spoke about last week where this guy was talking about, I think this is Zach Moore's substack, where he was talking about the monetary premium and why valuations may be higher today.

I really think there's something there. I know Josh outlined that in the relentless bid, but to call it a monetary premium in terms of how people are saving and investing, I think that's, I think there's a there. The only pushback we got on this, which I thought is a fair point, is why hasn't this happened in other countries then? that's a good point. I don't know the extent to which other countries are encouraging individuals to contribute to retirement accounts. Well, we talk about this with small business activity. Remember how you have to be delusional to start a business in the U.S., because so many of them fail, but we still do it

all the time, and it's never been higher. I do think there's something about this country. I think it's a cultural thing or whatever that in this country, the stock market means a lot, the economy means a lot, starting a business means a lot. I think it means something more here than it does in other countries. If you ask the average person on the street, do you think, well, I don't know they even know how to answer this question. But let's just say people that are investing in 401K, do you think that the market is going to be higher in 10 years?

I think everyone says yes. Whereas in other countries, that's probably, you probably get a different answer. Isn't that the best, the same thing for housing prices, though. I know, like, you get worried about the short term, but do you think housing prices are going to be lower in 10 years than they are now? Right. I can, is, that's, if you're buying a house today, are you going to get those same returns that we've gotten in the last four or five years? Of course not. But do you really think housing

prices, if you sit in a house for 10 years that is going to be lower, maybe, but odds are probably that's going to be higher. All right, my, one of my favorite annual updates, the Credit Suisse Global Investment Yearbook. You look at this one yet? Okay, so they've always had the chart that shows the U.S. made up like 15% of global market cap in 1900, and then it now makes up like 60-something percent. But they actually showed how this changes over time. And I think the most interesting part about this is the Japan thing in 1990s. So the U.S. went from, you know, really pretty high number in the 60s and 70s, and Japan ate into the U.S. a lot where it went from like 60, 70% down to 30% again.

And then we kind of digested that. And the U.S. is going back to where it was in the 60s and 70s. And now it's still lower than it was in the 60s and 70s. Actually, it was just surprising. Japan is so back. Niki had a new all-time high, first time since 1989, Shogun, Tokyo Vice. Have they ever been more back? I got back into Tokyo Vice last night.

I still haven't watched yet. I'm not sure what I'm waiting for. I'm just, I've got a lot of things in my queue. Took me a minute. Do you ever have shows where you really, really need the recap? Like, I loved the first season. I needed that five-minute recap to bring me back into, like, what's going on. Sometimes I have too many shows in my head.

Sometimes it's hard to remember what happened. Okay, here's another good one. We worry about stock market concentration here. Look at what the sector weights were for the United States and the UK in 1900. Real stocks made up like two-thirds of the U.S. stock market in 1900? Like today's stock market is more, way more diversified than it was in the past. I think, remember, you read the intelligent investor, right? Like, people always talk about the margin of safety stuff and Mr. Market. What is it? I think it's chapters 8 and 20.

If you just wanted to read those two chapters, you'd probably be fine. But if you read the rest of that book, he talks about, like, railroad stocks for most of it. Yeah. The rest of the book is borderline and readable. Actually, a lot of it is. But the point is that a lot of this, the stock market has always been concentrated like this. So a period where we went through where it wasn't that concentrated, that is, that that's actually outside the norm. All right, Morningstar did a top 15 wealth destroying funds over the past 10 years. Most of them are these ultra short, whatever. The ultra short QQQQ has lost $8.5 billion of assets, which is kind of crazy. And it still has $3.5 billion in it. I guess that's just total trading volatility

D.K. So most of them, but the number three is, is ARC innovation fund. It's less an estimated $7.1 billion. And we talked about this at the time because so much of the money went in after the performance was good. And this fund hasn't really played catch-up at all with the tech stuff coming back. Arc is still in a 67% drawdown. So this is the non-profitable tech index, basically, right? Goldman has one. So, yeah, That is not participating in the recent rally. That's surprise. Now, is this because that segment of the market is not working?

Or is it because ARC moves stuff around a little bit and they just positioned wrong and they missed everything? No, no, no, no. Well, perhaps there's some of that. But there's still very little apt that. If you look at all of these stocks, now, they're not one group per se. But the market still has very little aptitude for these money losing companies. So that's different, way different than 2021. Okay. It's just, it's surprising. If you would have said, this, we're going to have all this speculation again, and Arc is still going to be lagging big time. It's, it's surprising. All right. Did you ever figure out how to read this Cliff Hasness interview I sent you?

No. I'm a little bit disappointed. I pay for the FTA, but this was like a, this was like a, I don't pay for the premium one. I guess I just pay for the basic one. I couldn't get into this. I google the headline and then I get like you get like one free somehow. I don't know. I couldn't get in. You know what the worst part about the FT is? If we're air. When you copy and paste and it. Yes. Yeah. Why do they do that? It gives you this big, long thing about preamble, about not stealing their stuff, or don't you want people to share your stuff? They want credit. You could share it, but they want credit. So Cliff Azness was on there, and I got a couple of sound bites of his about AI, but they

did an interview with him, and I'm a big Asniz fan, and he's talking about value, and they're asking him about being invested in a strategy that's underperforming. And I think the problem with the markets is there's, I don't know, three different time horizons, because you have your short-term market cycles that, you have. is just all over the place. But then you have your intermediate term cycles where something is going to outperform for 5, 7, 10, maybe even 15 years.

And then you have the long term, which is fundamentals. And so, as this was talking about how, like, basically you have no other choice but to diversify because no one knows the future. He says, so you allocate what you think is the right amount of risk of things because the secret is the whole stock market is just susceptible to, like, over and underperformance. Maybe the most interesting example is the U.S. versus non-U.S. developed stocks.

famously the U.S. had crushed everything in the past 15 years. During the 15 years prior to that, it was why invest in the U.S. And I think people forgot about this. When we were coming out of the great financial crisis, and Asness just says, like, in 1990s, the U.S. was cheaper than the world. Like, everything else was more expensive because of Japan. And now he's saying U.S. is more expensive than the world. But he's saying almost all of the U.S.'s victory was from Ritchening. You can argue that it's justified, but Ritchening, like, valuations. Uh-oh. Ritchening. Wow. You can argue if it's justified, but you tend not to get a repeat, another 30-year relative tripling of the valuation ratio. I tell any U.S. investor with some international diversification, you're doing the right thing. It's just the timescales these things work on. And I don't think people realize, in coming out of 2009-2010, every single pitch I saw was emerging markets in Bricks, and that's where the growth is, and the U.S. is going to be fading because of the great recession. Yeah, Bricks back then was private credit today. Yeah.

So it is crazy that the U.S. is outperforming international. National for 15 years. It's probably the longest. It's not the long biggest magnitude of underperformance, but it's the longest stretch of this kind of cycle. But I don't think people realize how cyclical this stuff really is. It's just on a time horizon like this, you think like, okay, that it's changed forever. And maybe it has, but I wouldn't want to make that bet that, okay, that's it. It's changed forever. And the U.S. is going to continue just keeping richer and richer. But maybe it has, but we can't rule that out. That's what makes us hard. Yes. And as this point, he says, no one knows the future. But I think,

I think I would rather make the diversification bet than the concentration bet. That's my stance. I'm with you. I'm with you on that. Okay. This is surprising. I sent this to you last week. So GLD, gold hit a new all time high last week, which had zero fanfare, I think. Yeah. Didn't seem like maybe one headline. I didn't see anyone really discussing it. But the as gold is hitting a new all time high for the first time in a while, GLD's assets are down one third from the peak in 2020. I forgot how much money went in in 2020, but this isn't happening with a ton of money flowing into gold. So has Bitcoin really taken some of the shine off here, pun intended?

Yes. It has to, right? Yeah. It's just, that surprised me that that number wasn't screaming higher. And it wasn't just like money's going to a different fund. The same was true of IAU, whatever that the other one is. It's just kind of surprising. All right, Ben, did you see this video of a guy.

who just got back from the grocery store and was very upset with the price of the groceries? I think that's just the way. I didn't watch this particular one, but that's the way you go. I know people are complaining about their five guys' receipts. Let me read some quotes.

I just got back from the grocery store. Am I the only one that feels like they just can't do it anymore? I bought the cheapest stuff. That's all I purchased. That's it. Take a guess at what it cost, and you're probably wrong.

$123 with all my discounts for barely two nights of dinner. This, I don't know if we asked, Underestimate it, rising prices is just so psychologically damaging. Well, you and I used to talk about the grocery store thing before inflation was even high. We talked about that like in 2019, people would talk about grocery store stuff. Yeah.

And even though, like, let's just assume that this person's real income is flat, which maybe it is, maybe it isn't. It doesn't matter. Now, it matters in the sense that can you imagine if income hadn't kept up with inflation? Can you imagine how upset people would be then? Well, if income hadn't kept up with inflation, we would be in like a huge recession already. Yeah, that's true. That's true. So when I say, all right, but so this is, this is what's getting people upset because

we spoke about this before. You adjust to your income, right? You deserve it. But the price and increases are unfair. And the problem with stuff like the grocery store, it's the bare minimum. These are necessities. You're not choosing to splur. you have to feed your family.

And when you go to the grocery store every week and the prices just keep going higher and higher, this is it. This is the whole kid in caboodle. This is why people are pissed off. Yeah, I get it. It just destroys people's sanity, and I totally get it.

I get it too. Because it's the stuff that you see the most often. If you bought groceries once every six months, you wouldn't complain as much. It's the basic necessities. It's not like these people are like, it's not like this guy's like, man, I just took such an expensive.

Can you believe how much this flight cost to the Caribbean? Like, these are the basic necessities. I also, I'm not trying to like poo-poo this story. I get it. I got some bananas today. Sometimes I don't, I don't understand how some things are still so cheap. I got like 10 bananas, and it was like $2.50. So, how was that possible?

Ben Carlson says, stop complaining and eat bananas. Listen, if I was, if I was on a tight budget, all I would eat is eggs and bananas because they're so cheap. But don't you ever buy like a box of pencils or something and think the amount of time it takes to produce this and pack it and ship it and they still sell it. Anyway, sorry, I don't mean to poo-poo the inflation thing. Food share, food spending share of disposable income has hit a three-decade high. Yeah, especially, yeah, it's expensive. But it's still, remember we talked about this a couple weeks ago? It's still way, way lower than it was. So look at this. This is kind of a chart crime.

Because the axis, it's an axis misdemeanor. So they show the axis, it's from 11 to 10%, basically. It's a little higher, but it went from... There's not a chart crime. It's showing exactly what it is. It's at a three-decade high. Start the axis at zero. You can't start it at 9 to 12.

That's a chart crime. That's not a chart crime. If you started the axis at zero, you wouldn't be able to see anything. Exactly. That's the point. It looks like a way bigger increase than it is. In this number... No, the truth is, it's at a three-decade high.

And this is the way to show it. And the truth, the truth is also, this number was way, way higher in the 60s, 70s, 50s, 40s, food made up like 40% of people's budget. And now it's 11. Yeah, but that has nothing to do with anything. Why? Because people weren't, people that are alive today, this guy wasn't buying groceries in the 60s.

And also, the thing is, this thing crashed in 2020 because prices fell. So going from that low base to the high base, now, yes, it's increased, but it's not that much higher than it was pre-2020. Doesn't, but none of these things matter. Whether it's a chart crime or what doesn't matter because people feel how they feel. Data doesn't matter. I'm sorry, it does. No, data doesn't always matter. Data doesn't, data does not supersede people's feelings. If you show this chart to a guy, you think he's going to punch you in the face, because I think he's going to punch you in the face.

Okay. See, you're talking about individuals and anecdotes. I'm talking about the whole economy. But individuals make up the economy. And a lot of people feel this way. Okay. See, this is you falling prey to. the internet, though. You see one viral video and you go, okay, that's it. He's right. You think this is the only guy? I'm not saying, listen, the economy's made up of hundreds of millions of people. There's always going to be this side, this side, this side. Like, that's what makes an economy. But everyone's on this side. Everyone is paying a three decade high for, not everyone. A lot of people are doing this. God, it's, yes, it's true. The grocery store prices are

higher. But it's not as bad as this story makes it out to be. Redfin reports asking runs climbed 2% in February. Biggest gain in over a year. So we got data today for CPI came out. inflation's not going, hasn't, it's not going down anymore. Yeah, no, this is, if we're arguing about decimal points, we've already won the game. If inflation is 3.1 instead of 3.0, it's, we've won, okay?

It's over. I don't know if it's over. The worst of the bad stuff, it's over. The Fed's going to cut in June. Michael McDonough tweeted, Michael McDonough tweeted, Michael McDonough tweeted, an increase in segment of the U.S. CPI index is growing at an annualized rate exceeding 4%. In fact, subcomponents constituting over 63% of the total CPI index are climbing at a rate faster than 4%.

It's not over. I don't think it's over. It's over. Not saying to go back to seven, but it's not, it's not over. If it's 3.1 versus 3.2 or 3.0, like, is that, I'm sorry, we're splitting. here's here. It's over. It's back to the long-term average. Those prices are still there, but it's over. So the Fed's going to cut in June, and the only thing that matters is if it stays a little elevated and doesn't go back to the twos, how many times is the Fed cut? I think that's where we're arguing about here. You really think inflation is over? The worst part of it, it's over, yes. The worst part of inflation is over. Now, if the economy reigns strong,

then, yeah, if it re-accelerates that, I'm debating whether that's a problem or not. If the economy continues to remain strong and inflation stays higher, is that better than the alternative of the economy faltering and inflation falling? Is that better? But the nasty inflation, we're worried about the 70s, that stuff's over. Get it out of your system. I mean, yes, inflation is not at 7% anymore, but to say it's over, I don't know. I guess we disagree on that one.

Okay. 25 months straight with unemployment rate below 4%. which is the longest streak since the 1960s, we're never going to see a labor market this strong again. So I think maybe that would be the thing, but it's also ticking up a little bit, like very, very slowly. And I think that's something that could worry people.

I think the best argument for, we've talked about people having a lot of money, the best argument for the Fed cutting rates here, I think, is this. Logan Motishami, new listings data this week. In 2011, there was 362,000, homes that were newly listed for sale. Of course, that was during a... What did he choose 2011? I don't know. He's making a comparison. 2024, 59,000.

Wow. This to me is, and Powell finally mentioned it on his press conference last week. This is the reason the Fed needs to cut the rates is the housing market. But I think what they could do, if they really wanted mortgage rates to fall, because if you look at the, I put this in your U.S. existing home sales. Last year, it was the last 12 months of 2023 was $4 million. the average is like 5.3 usually. So there were still houses being transacted and sold.

We're just talking, we're like one and a half million below the average. But why wouldn't the Fed say, listen, we want the spread between the, because the 10 years at 4%, and mortgage rates are still at 7, which is really high for the long-term average spread. Why couldn't the Fed just say, listen, we want the spread between treasuries and mortgage rates to come down and we're willing to step in there if we need to? Don't you think mortgage rates would fall immediately if they said that? All they need to do is talk about it.

What if the Fed doesn't cut but starts buying mortgage bonds again? That's what I'm saying. Like, what if they really, if they think the housing market is, because that's a big part of the economy. And if people aren't buying and the economy is less dynamic because people aren't moving because they're stuck or they can't afford something, that's a real problem for the economy. I think the Fed's finally realizing that. Yeah, I agree. My opinion is with financial conditions so loose and inflation still, in my opinion, on the high side,

why would they cut? Inflation is not high, though. It's 3%. That's the long-term average is 3.5%. It's not high. It's not high. It's not high. You're going to have to come around to my eye. You're going to have to come around to this one. Three percent inflation is not high. It's literally the average. Fine. What's the argument for cutting? The housing market, that's the biggest, that's the biggest argument. And the other thing is just they're in restrictive territory. So the Fed doesn't, the Fed shouldn't care about the stock market. That's not part of their mandate. The, the Fed should care that unemployment, that unemployment rate is slowly ticking up, and the housing market is stopped dead in its tracks. But with financial conditions, this loose, and they cut, I get that they shouldn't care

about the market, but isn't there a risk that they cut prematurely and we overheat again inflation really picks up? That's the thing people are debating now, though. Okay, the Fed's going to probably cut in June. Maybe before they were going to cut six times this year, maybe now they only cut two or three. I think that that's the debate now, that they just don't cut as much as they thought, and then maybe people start really thinking that. And that's their signal of the market.

Like, we're not going to go as easy as you thought. Just given how strong the economy, you know, ex-housing remains, I don't know. I'm not a central banker, but I see no reason to cut. Because there's no reason to be in restrictive territory like this. If the inflation rate is this low and rates are this high. But is it restrictive? It's not, what is it slowing down other than the housing market?

Which is 20% of the economy. 20% of economic activity is the housing market. That's a huge piece of the economy. I think that's the biggest argument that you could make for, And again, they don't want to overstay their welcome and push us into a recession unnecessarily. Why stay restricted? Because eventually those restrictive rates are going to cause an impact. They don't do it at 16 months, but at 17 months, it's coming.

Here's a headline. This is a Hall of Fame Grand Rapids hedge quote right here. Diamond says U.S. economy booming, but recession not off the table. Now, I'm going to guess that he didn't actually say this. This is the headline, right? I'm sure I would guess. I didn't, the link didn't have like an article in here. I guess he was speaking.

But I'm pretty sure Jamie Diamond wasn't like, listen, the U.S. economy is booming, but there's still a chance of recession, right? He probably said that, like, way later, like, he probably said, like, the U.S. economy is booming. And then 20 minutes later, they asked him about a recession. And he probably said you can't take that off the table. He has to do a Grand Rapids hedge for everything now because he said a hurricane is coming a couple years ago. The point is, this is, this is, this is headline twisting.

We know how the game works. Yes. I think every financial CEO has to do a 60, 40 hedge of everything. Like 60% this could be bad, 40% this could be good. But my point is, I don't even think he hedged. If I had to guess, I would say he said the economy is booming. Then later, when somebody said, can you take a recession off the table. What if he said, yeah, I mean, you can't ever take it off the table. Right. True. Because you can't. You can't. You can't. All right. We are a very rich nation. And obviously, obviously, this is not. evenly distributed. No shit. But Mike Zucardi from Bank of America, household network jumped by $4.8 trillion in Q4 and is up $39 trillion since the pandemic lows. So Robert Burgess, Bobham Markets, tweeted something similar. Um, see, see this is, so this is back to your grocery store stuff. This is a stuff where, yes, real wages across the board haven't caught up, but, but the people who are the wealthiest can say like, oh, these prices stink. But

I'm also richer here. And the people who don't have that financial assets, I think that's part of the reason that they're so angry too. It's like, yeah, sure, my wages have kept up a little bit, but I'm not getting richer in this other stuff either. So this sucks. That's like the argument that I totally get that how unfair it is. But that's also why I don't want billionaires complaining about inflation. Like there's people who have legitimate gripes about inflation and the necessities and auto insurance and all this stuff. And those people do have a legitimate gripe. but there's a lot of people who are complaining

who don't have that right. Yes. So Burgess also shows household's wealth is a massive resource that easily allows the U.S. government to fund debt and deficits. So he has a chart that shows total household wealth, total public debt outstanding, and it dwarfs it.

I don't know if it's four to one, but it's a massive number in terms of U.S. household assets versus the government deficit. Yes. Anyone worrying about debt in this country and thinking everyone's just credit card debt and the assets dwarfed the debt so much is not even close?

That's not even close. And then he breaks it down. Real mean net worth rose by rose to $1.8 million among 65 to 74 year olds. But it also, look at the monster jump for people less than 35. The 2019 real net worth was 89,000. It jumped to 184,000 just three years later. That's a hundred seven percent increase. We're never going to see a jump that big again, I don't think.

and like a three-year period like that, right? Young people went from being totally behind their parents' generation to far above it in terms of where they were at that age, which is crazy. Again, I think there's a big difference between net worth and income, right? Like, nobody celebrates our net worth because you can't spend it, right? If your 401K is jacked to the, you know what, that's cool, but it doesn't impact your grocery bill. You don't feel less bad about your grocery bill because your 401K is higher.

So you're saying the wealth effect is bunk? I never was a big believer in the wealth effect. I really wasn't either in terms of speculating or I'm going to spend more money. But the data does show, though, that savings rates go down when people feel wealthier with their net worth. Fair, but I think that's more of a function of the economy and less like the value of their 401K of their house. Right. I'm not saying it's nothing, but I think there's greater factors apply. All right, Ben.

Because, like, for me, my house is worth way more than it would have been otherwise, which is, it's just crazy to think that the domino effect of we got to, some dude ate a bird or whatever, and people are richer now than they would be. Like, my house wouldn't be worth as much as it is, and my stock portfolio wouldn't be worth as much as it is if we didn't have COVID. Which is bizarre to think about. I was watching a financial advisor, Jason Pereira, did a presentation at the exchange conference about AI.

And there was one scene where 30 minutes into his presentation, did you watch us? No. 30 minutes into his presentation, he stopped speaking. And on the screen was him speaking. And on the screen, he's like drinking a couple of water, doing a little bit of theatrics. And on the screen is his voice saying, I've been talking for 30 minutes now. I'm going to take a break. And then he fed whatever, his voice to the computer.

But then you saw his actual body come up on the screen. And it looked exactly like him. And then it was him delivering the speech. And all of that was AI generated. And then it started, Jason's hologram started talking in Japanese. Some of the AI stuff that I think a lot of people are just not playing around with is going to blow people's minds very quickly. So I hopped on mid-journey, which is sort of a pain in the butt.

You have to, like, connect it to Discord and you have to do the prompts to Discord. I have yet to find a good website to do the generative art where I want to. Because I've tried to do some. What's a mid-Journey? It's a bit... I mean, it's not hard. You have to connect it to Discord, but... Okay.

So anyway, look at this image. So I typed in stock market crash on Mars. And it generates four images for you. The first one's my favorite. The guy looking sad with a... Scroll down. So I big screened that. It's pretty good, right?

That's a good one. Yeah, I like that. And then I googled... What do we call this? I mid-journeed? I don't know. I prompted two dudes podcasting on Mount Everest. Okay.

Do you say one bald, one with hair? Well, I did try to... I did... I also, I didn't include them the doc, but I wrote a Michael Benton with long blonde hair. Sadly, my ego took a blow. Mid-Journey does not know who I am. So I do think that the tools of AI and this kind of stuff and like the AI assistant,

that stuff's going to be great. I don't think the information is going to be as helpful as people. So as in his interview said. But just as an assistant. So like we're our podcast, our YouTube is going to eventually be broadcasting in other languages. That makes sense to me. Yes, that's coming. So as in his interview said, we don't think AI, at least in our field, is as revolutionary

as others do. It's just statistics. It's a whole bunch of data going in. a forecast coming out. And I thought about this. Remember Google had their Gemini thing a couple weeks ago. Yes. And all the tech industry was all up in arms because they put some prompts in there where, like, you had to be diversified. There had to be enough diversity in your pictures. And people got all up in arms, like, this is crazy. And Google's too woke. And people got really mad about it, which, whatever. But Ben Thompson was talking about this. And it just made me think,

we got all this information, you have all the information humanity could possibly want in the palm of your hand now and 24-7 cable news and all this stuff and think about how many people have just had their brains rotted by this. It hasn't helped them become more informed. It's only have them have more confirmation bias and you'd be even less informed.

So like the AI information side of things, if AI gives someone the answer they don't want to hear, they're going to seek out another AI. So there's going to be like these political factions of AI's, people aren't going to like the information that they get and they're going to go, okay, I want another AI that gives me the answer I want. So I think informationally, like the garbage

There's going to be political AI. There's going to be political AI. And instead of finding the right answer, people are going to find the answer they want to hear. Yeah, I think you're right. So I think that's the kind of thing where I don't think it's going to make us more informed. Unless the people, I mean, obviously some people use it the right way. A lot of people won't.

Yeah. One of our, crypto, one of our listeners emailed us. They got scammed from, I think it was a phone call from Coinbase. Just a public service announcement. Be careful. Never do anything from a phone call and never click on any link. an email. That's Ben's rules of not getting scammed. The problem is, like, I got a call from American Express, so somehow I got a text, did you authorize this charge on Twitter? I'm like, no. But

I don't know, I just assumed it was fake. Then I got a call from American Express, and again, I assumed it was fake. I called them, turned out it was real. Okay, that's the thing. I would always call that number. Right. I would hang up and say, I'm going to call someone else in your organization. All right. Eric Newcomer has a chart. So we supposed to about how there is little enthusiasm in gold, at least looking at the AUM, you can't say the same about crypto ETFs at all. But if you look at the monthly download totals of top cryptocurrency-related apps in the United States, it is still on the floor compared to where it was in 2021. I think, understandably so, a lot of retail that got burned the last time.

is just out. They're just, they want no part of this. Counter to that, uh, Eric.Eath on Twitter said, retail isn't here yet, like quotes. By the way, I love it when you read the handles of Twitter people because, or Bitcoin people or crypto people, it's always these random. It's like, Holder 69420 says. Yeah. Well, it's usually not somebody's full name. Uh, quote, retail isn't here yet. And then they said, yes, they are. They just aren't in BTC and Eath. So he shows a Google trench chart of meme coins, and yeah, that's, unfortunately, that would vertical. So the, the ETF stuff is crazy because the price is up more than 50% since it bottomed. I guess it's probably up, what, 70 or 80% since it bottomed at 40, whatever, when you were about to buy?

No, I did buy a 38,000. I just, I only bought a little bit. But GBTC, James Safer wrote this the other day. They've had 11 billion in outflows, which is crazy since it converted. into an ETF. But the AUM is still the same at $28 billion because price appreciation has brought it back up, which is great. I guess they did announce today they're going to do some mini-ETF. It's kind of like Berkshire B shares or something where they're going to convert it to a lower fee. So that was nice of them finally to do that. Yeah, it says Belchun has tweeted it's a

mini-me low-fee version of GBT, which investors in GBT will be able to get into without a tax via a special dividend. That's cool. That's good for them. Good for them. They were catching a lot shrapnel for keeping the fees high, but that's cool. Will Clemente tweeted Bitcoin ETF inflows have absolutely blown golds out of the water, not even close, looking at GLD flows, inflation adjusted, and yeah, these charts are not even remotely the same thing. Balchuna says first two months officially in the books, and the 10 Bitcoin ETFs now have over $55 billion in assets. with exactly double that in volume, if these were the numbers at the end of the year,

I'd call them a success. To do it in eight weeks is simply absurd. So, yeah, I bid and FBTC are doing as much, not doing as much, but they're on the same chart as VLO, IV, and VTI. People complained forever that they weren't, the SEC wasn't allowing Bitcoin ETF, and it was a problem.

You could argue the timing of this actually worked out perfectly for crypto, because it's kind of far away from the SBF, stuff. And there wasn't anything else really going on in this space that this happening was perfect timing for the crypto industry. I didn't consider it. That's a good point. All right. Lastly, I don't know what's going on here. So Michael Saylor tweeted, micro strategy has acquired an additional 12,000 BTC for $821 million using proceeds from convertible notes and excess cash for $68,000. They hold

a $6.9 billion worth of Bitcoin at an average price of $32,000 a coin. So I was, like, reading up on this, and I'm thinking to myself, who's buying these convertible notes? Who's giving him this money? I don't under, I genuinely don't understand. It's paying 0.62% a year. And I think there's like a 40-something percent premium in the stock price that maybe you can convert it and get that spread.

I'm not exactly sure who the buyers of these things are, but I'm assuming they're not complete idiots, right? Like, I assume they know a lot more about this than I do. But then Sam Lee quote tweeted and said, Saylor spent $820 million to buy Bitcoin last night. Micro Strategy's market cap is up $2.4 billion as a result. He's turned Micro Strategy into a perpetual short-squeeze machine that converts losses from short sellers into BTC.

So convertible note, buy Bitcoin, add four times a net to your market cap, and he just keeps doing it. Over the last year, Micro Strategy is up 680% and Bitcoin's up 250%. It fell more, but it's a levered bet on Bitcoin. It's a levered bet on Bitcoin. So, again, I don't know enough about the mechanics. I'd love for somebody to explain to me what's going on here,

but it seems pretty, I don't know if genius is the right word, but whatever he's doing, it's... If you look at the chart of this stock, just straight vertical of the last, it's pretty crazy. Yeah. The last year or so. Anyway. Can we talk about some good news in the housing market?

Please. I've been trying to do this more. So this is from the Washington Post. Less money, less house, how market forces are reshaping the American home. And they have this chart in here that shows new homes are gradually getting smaller. So the median square foot topped out at like 2,500 in 2015. And it's now fallen to less than 2,200, which is kind of where it was in the early 2000s. And they say, D.R. Horton, the country's largest homebuyer sold more than 82,000 homes last year.

Most of them are under $400,000 into first-time homebuyers. It's lineup now starts at 900 square feet. These are those smaller homes we were talking about. Even Toll Brothers, which is known for its high-in properties, there's average sales of prices of a million dollars, are downsizing to lower-price options. Sales under $400,000 more than double the past year, outperforming more expensive properties.

Do you think there's a sweet spot for housing size? I don't know. I mean, I think the reason this is happening is just because people, it's cheaper. And they're realizing, like, there's a market for this. We talked last week that 30, what is it, 31 and 32-year-olds are the most, are the biggest age cohorts in the country. Like, they're meeting demand where it is. It makes sense.

This is actually a pretty good sign, right? I think so. Here's a bad sign. This is from Freddie Mac. A lot of people have thought, and I've talked about this to do, like the 2030s, the boomers are going to start dying off. It's morbid, death and taxes, you know, whatever. So Freddie Mac decided to look into this.

And so they said, as of 2022, there's 69,000 baby boomers. Credit to you for not making 69 jokes anymore. you've matured a lot, you know? It used to be every time you would do one and you'd say nice. So I appreciate you not doing it anymore. Being a father has just made you more mature, hasn't it? It's a year maturity. All right.

So baby boomers account for 21% of the population, but 38% of total homeowners. And so the point is these boomers are holding on to their houses. They need to sell them. But they show that the boomer households is going to go from $32 million in 2022 to $23 million by 2035. five, so 9.2 million fewer boomer households, but it's going to be like a slow trickle for that to happen. And it's going to be, it's like less than 1% of owner occupied homes are going to be hitting the market in the 2030s. It's not, it's not going to be a big amount. It's going to be a, it's not going to be like a tsunami of boomer houses hitting the market. And Logan Motishami

made a good point about this, that the, remember all the crazy, old, folks, homes, stories from the pandemic of just COVID ripping through. And Logan was saying that, like, that, people seeing that may have caused, like, how many boomers are going to want to go to a retirement home? Like, when they, like, are they actually going to want to give up their house? Or are they going to say, no, I'm going to spend a little more money and have home care here or something? Unless they have the AI robot to take care of them, then?

I don't know. I think most people are going to choose rich. Have you seen that guy? Yes. Hilarious, right? The weird thing about the internet that would be hard to explain to someone in the past is you can't really, there's a gray area between someone who is playing up a part and being themselves as a douchebag or just being a douchebag.

And you can't tell that the line is blurred where someone is doing a bit versus they are this person and they're acting. You can't tell anymore. So for people that are unaware of this bit that we're talking about, there's a crypto bro who is going on these wild rants and then he's ending it with Choose Rich. So I'm not sure. I don't follow this guy close here. I don't know if this started out as like mildly serious and then turned into a complete joke.

Like obviously at this point, he's joking, right? This is, it sort of looks like an S&L skit at this point. And he's hilarious. But I also don't want to give him too much credit because if this started out, real, and then he discovered that people, and then he pivoted to like, oh, I'm just going to be it on the joke. It's like the meme from, what's the show on Amazon with the superheroes, the boys? Where the guy's like, eh, you know, he kind of comes around. It's that.

Yeah. But either way, credit to this guy, he's producing Internet gold. All right. New York Times had a story. A bunch of people sent me this because it was the best spot for first-time homebuyers. A lot of first-time homebuyer talk here. Number seven on the list, Grand Rapids, Michigan. And they talked about this from affordability, employment opportunities, commute times, and local culture and entertainment options. Okay? Grand Rapids, Michigan, number seven on this list. What do you guys have that culturally? That's good for young people. Well, they just named Grand Rapids for, I think, the seventh year in a row, Beer City, USA. Okay. We have tons of breweries. A lot of the brewery scene really, you know, founders and bells.

Actually, a lot of it started in West Michigan. There's concert venues now. There's lots of good restaurants. The changes in Grand Rapids downtown from now and 20 years ago is night and day. Are there cultural-nothing nothing to do? Are there cultural differences between East and West Michigan? Yes, definitely. It's, yeah, but don't you think, if you go to a city,

these days. So many cities look the same. They all have the similar looking restaurants and breweries. And if you travel around, it used to be like, you know, you'd get different things in different cities. Now, most mid-sized cities kind of all have it figured out. Like, we have to have a good little downtown area. We have to have the coffee shops in the bars. You have to have like a restaurant with like exposed brick. Yes. They all kind of have figured that out. If there's a river or a body of water, you build around it. So they've all kind of, it's, they're all kind of similar now. It's, which is a good thing. But I look, I pulled this up in Grand Rapids City, I looked for, you know, houses under, I think I did 300,000.

And there was, I put the map in here. There was a ton of them. I found one of these little mini ones, remember we said? Oh, huh. So this one is actually 1,300 square feet for 180,000 in Grand City proper. It's gotten way more expensive in the suburbs and stuff. But in the city, like, there's still relatively affordable housing. All right.

So $225,000 for a three bedroom, one bath house with 1,344 square feet. That doesn't sound like a bad deal. That's like a, that's a, that's a, that's a, large apartment. Really large apartment. I looked at that. It's like this brand new renovation. There was some, it's, I was surprised. There was more supply than I would have thought. All right. Here's something that's never happening again, I think. This is from Bloomberg. Non-mortgage interest payments climbed to an annual rate of $573 billion in January. It's the highest on record, even after adjusting for inflation. And within a hair's breadth of the annual mortgage interest. So interest paid on everything else, credit cards and car loans and all this stuff and personal loans is,

is about as high as mortgage interest payments, which is, it's never been close because mortgages make up 70% of the debt in this country. Wow. This is just never happening again, right? And what is this? Credit cards, for the most part? It's got to be. I'm guessing auto loans is a big part of it, too, because auto loans are a bigger and student

loans. Yeah, I mean, this is, this is definitely, this is definitely weighing on people. But this is the bifurcation of the United States. If you own a home with a 3% mortgage and you pay your credit card debt every month, higher rates have not impacted you very much. Not even a lot. If you don't own a home and you carry credit card debt and you buy a new car, you are saying this is Weimar, Germany.

Yeah, I hate talking about things in terms of us versus them, but that's really what happened here. Yes, there's a, and this is especially why I say young people have the biggest gripe against the economy right now. If they didn't buy a home, they have a grape. Yeah. So, yeah, so it's showing the effective mortgage rate is still. below 4%. Like that's if you averaged everyone up, even with a 7% mortgages and credit cards

are much higher. But interest payments has a share of U.S. household income is still very low, way lower than the 70s and the 80s, way lower than the 2000s. It's going up, but it's still much lower. I got a question for you. These, wait, John, maybe you can tell us since you're a car guy too. How big of a D-bag do you have to be to say Porsche as opposed to Porsche? Like, do you have to watch F1 every morning on the Saturdays? What do you think? What do you think? So Duncan say Porsche? I think Duncan does say Porsche. Okay.

I mean, it's technically the guy's name, so you don't say like Ferrar. You say the full name. Ferrari. But, yes, I see where you're coming from. I go 50-50 between them. No, if you're a race car fan, fine. That's it. I think that's, yeah, if you have a F1 hat like Duncan, you have to, so the reason I say

this is because these Porsche Cayans are the, their smaller SUVs. It's one of those things where if you see one, you see them everywhere. And so I've been seeing them all over the place. What's a bigger one called? I didn't know that was a bigger one. I actually think the kind of might be the bigger one. Okay.

So I see them, and it looks kind of like one of the Audi Q, whatever, Q5, 6, 7. It looks kind of like an Audi, I think. But I see them all over the place now and I'm thinking, geez, how expensive are these that so many people are driving a Porsche around? And it says they start at 79,000. So I'm guessing you add a bunch of bells and whistles.

The average cost is probably, what, 90? 90? Yeah. I'm just surprised that I see so many of them. Do you think it's because people just, just, it's a brand thing? Like, I can say I drive a Porsche if I drive one of these things. Is it a brand thing? Yeah, what else would have been? I don't know. It's just, I'm surprised how many of them I see. And here's a further question. So we're talking about inflation. If you drive a Porsche, can you complain about higher prices? Even if the Cayenne and not a regular Porsche. Definitely not. Okay. Did you see the curb with Lori Laughlin driving a Porsche away? That was a sweet Porsche. Yeah. By the way. That was pretty great that they brought around for that. Two things on this. My seven-year-old Kobe had a curb your enthusiasm moment. Okay.

So he, like I, has Spilkes and is not the best behaved in school. He's not bad. He's not mean. He's not, like, punching kids, but he's silly, he's chatty. He doesn't raise his hand. That's my son. He can't sit still. Yeah, all things that impacted me when I was his age.

So we get a report every day, like a smiley chart, to my mind. monitor his behavior. And yesterday he was so proud that he got all smile at these for the first time. And not even like a chatty at lot chatty at reading time. Like no, nothing bad. It was just all smiles. And I said, Kobe, I'm so proud of you. I'm going to give you a pack of cards. I'm going to give you a vision pro. Exactly. In fact, it wasn't a packet cards. It's like a sticker book, a sticker book of cards. So anyway, uh, later in the day Robin asked about his teacher and Kobe goes, she wasn't in school today. We had a sub.

You had a substitute teacher. And I'm like, that's why you got all smiley. So she gave everyone a smiley face then. Everyone got smilies. He got grated on the curb. My son had to, so they'll have their little chairs. And he would lean back so often in his chair, it's got four legs. He kept falling over.

And he did it all day. And my wife works in the school, walked by one day and saw he was literally on his own special chair that had no legs. It was just a little spinny chair. And he's the only one in the class. sitting on a special chair because he couldn't sit still. So I'm not going to complain about the situation with my wife's car because nobody, it's really lame when people are in a position of to broadcast stuff. And like when people complain about like airlines and stuff, it's like nobody cares.

They're looking for a handout or something. Right. But I just will say this. Not going to tell the full story and smear them through the mud, which they deserve. I'm not going to do that. Oh, that's right. You sent me the email the other day. Truly unbelievable.

But here's the thing. So I said to Robin, we will never buy a German car ever again. Now, when you buy versus leases, those are two totally different things. But I don't even want to lease this car again. And she's fighting with me. She's like, but I love my car. It's not corporate. It's a dealership.

I'm like, it's both. They both stink. So what do I do? She really wants to lease another. I said, let's get a Kia telleride. Great car. Let's get a Toyota, whatever. Get a cayenne.

No, well, that's not happening. All right. Uh, so my wife and I got married in 2007, and this morning I went to iron my shirt, got it look crisp for the podcast, and, uh, iron died. And we got our iron as a wedding present. So, almost 17 years that thing lasted. I wanted to buy the same one again. It doesn't even exist anymore. Who made it? I was like, shark. They're the ones who make, like, the vacuums and such. Do you iron your shirts every day? Depends how wrinkly it is. When's the last time you use an iron? I'm just going to guess it's been a while. No, every time, no, no, no, every time I go, every time I stay in a hotel and I have a buttoned up. By the way, you'd be proud of me.

Last week, I don't know if you saw the pictures of me on TCAF, I was wearing like slacks and a button up. And everyone was like, why are you dressed up so nice today? I was like, what? I can't trust nice in the office. Like 10 times, I'm like, all right, here's the, here's the truth. I have two pairs of jeans and they were both dirty. So you know what I did this weekend?

I went to Nordstrom. I got five pairs of pants. So now I should be good for the next decade. So you went to the mall. I went to the mall. Did you spend like $400 on a pair again? Jeans are really expensive. I got two pairs that were $200 each

and two pairs that were $130 each and one pair that was, I can't remember. Is that too much? I don't know. For me, that's, I only buy clothes that are on sale pretty much. But I don't buy clothes. I don't buy clothes. I guess what? If I'm doing the math, these things are, these things will last me, honestly, four years. So it'll probably be $2 or where. See, I have way more clothes than you, I think, though. Right. I probably have 20 pairs of jeans.

Okay. Well, if I had 20 pairs of jeans, I probably would. Yes. Anyway. All right. Can I read an email that we got? It's a bit long, but I thought it was so nice. I wanted to share. Oh, and it's from a British person, right? There's a, there's a you and the favorite. It's got to be. Gentlemen, apologies, as this may be a bit long. Your podcast is my favorite by a long shot.

I haven't missed a single Wednesday show since inception. I started working and investing in 2017. And in the year since, your guidance has helped me put my financially, put my financial feet solidly on the ground. Without your wisdom, I think the ups and downs of the market through COVID would have done me in. In 2020 through 2020 through 2020, was very hard for me. I had career troubles, felt bad about my finances, and would loss in many ways. Listening to you guys regularly was a bright spot and helped me feel so much better by my life. I cannot thank you enough.

Listening to you both is like being in a room with my friends. Your chemistry is so obvious and immersive. I regularly find myself laughing, not along, and finishing half of your jokes because you guys do such a good job building report with the audience. The fact that you can make anyone feel positive and educate them at the same time is a testament to your incredible talents as both financial professionals and human beings. Michael, your introduction for Eli was moving. I had difficulties at various times in my young life and hearing that come to the surface for you was cathartic for me.

I felt like I was there with you on that emotional journey. The way you talk about Kobe, Robin, and the rest of your family is Chef's Kiss. Today's comment about return to the AVP because of Kobe, wow, I think you already even... All right, this is getting too much. Ben, on to you. Ben, you are one of the most measured podcast hosts out there.

I agree with like 90% of your takes and the advice you give on animal spirits and ATC is so balanced and well thought out. Investing is a journey and you have helped me understand and my risk tolerance better than anyone else. Your emphasis on planning and talk and thinking about the long run is so helpful.

Your ability to remain focused on the long-term data and realities of the market is what carried me through the lowest of 2022. Not only in terms of investments because I applied that same rationale to my career and it has turned out better than I could have imagined. You even turned me on to the Miami Vice in Florida. And that was the best beach drink I ever had.

Oh, Toronto. This president of Toronto. Darned straight. That was very nice. How nice was that? And I will say, we actually got like two or three that were very similar to this this week. And I don't think we talk about the audience enough or thank the audience enough, but we're, I

I don't know about Ben. I don't take you guys for granted. Maybe Ben does. I don't. I know that. Hey, I'm the one in the comment section every week. I know that podcasting, not podcasting, your time is a finite resource. And the fact that so many people choose rich with animal spirits, whatever on Wednesday morning

is part of your routine, it means so much to us. So thank you. Yeah, we appreciate it. One more. Last week, a bunch of people wrote it about the wait times at restaurants, and a lot of people said, yes, I used to work at a restaurant. We make it up, but we always go higher so the person feels better psychologically. That makes sense to me.

That does make sense. So we say 40 minutes, we know it's going to be 20. You know, I don't know if this is annexed or what. Is Benny Honda national? I don't, not sure. Yes. Yeah. International.

I ate it one in Aruba once, which is pretty bad. Okay. On vacation and go to Benihana. I've never been to a Benihana. I've had Habachi, but I've never been to a Benihana. And the wait time was, we got there. We had reservations for, it was Robin and the kids and another family in their kids. We got there at 7.30 reservation.

I don't think we sat to like 8, 10. It was kind of weird. It was packed. So when we were on the way there, I said to Kobe, I've never had Benihana. He's been there before with his friends. And he goes, oh, you're going to love Habachi. It was very cute. Kids love that kind of stuff, right?

It's fun. throw the shrimp up in their mouth, whatever, yeah. Did you watch the Oscars? I did watch some of the Oscars. Did we talk about the Pacino thing? No, but it was, well, he sure mailed it in, huh? It was so weird. He walked out on stage.

Now, listen, he's a legitimately old man, but he walked out on stage. It was like he had a dinner reservation. He looked at the envelope and said, I see Oppenheimer. No, no, and here are the nominees, nothing. It's a Oppenheimer. That's just, I've lived a long time.

I think that this happens in all. We always laughed. My grandma when she got old, we were at a restaurant one time and my wife, who I think she was my girlfriend at her fiance, and she wasn't paying attention.

And my grandma just kind of clapped at it. Like, hey, get your order in. Like, I think when you're old, you just do you do what you want? Don't you think? That's like... Clearly. Yeah.

All right. So speaking of the Oscars, I tried to watch because Emma Stone, I'm a big Emma Stone fan. I always liked her. From Super Bad on, she's been great. So she won the best actress nominee for poor things.

And so I'd never really heard of it, but I, she was on smart list and she talked about it. And it's by, it's a film, not a movie. And you, you said before, like, Ben, you're a film guy. Like, there's no way I'm a total film guy because this movie, it's on Hulu. You're, you're a film guy. I saw the trail out on my, I'm so out on this. I'm sure if you went to film school, you'd go, oh, the angles of this in the, but I've never taken meth before. But I imagine that taking meth feels like this movie.

It's just, p. Did you enjoy it? No, I turned it off for 20 minutes. Okay. Again, you could, if you're a film person, you could say, oh, I appreciate the, they went for it here, but it's just, it's so bizarre. Too much for me. New show, I think someone might have, sometimes it's hard for me to tell where I get my recommendations from. I think this is from a bunch of people in our email.

Drops of God is a show on Apple. It takes place between France and Tokyo. So there's some, there are some, and so it's English, French, and Japanese that people, are speaking so there are some subtitles if you're against that thing i don't mind it because i know to read uh no not to brag it's a show about i'll give because it's in the imdb description uh this woman's father dies and he has the he has the most expensive wine uh wine cellar in the world or like 150 million dollars and it's his daughter and his protege for wine tasting have like a wine taste off for who gets his collection.

That's the premise. And it's really good. And it's, it's a little bit pretentious wine stuff, but it's, I'm kind of blown away how good this show notes. I've never heard anyone talk about it before. Hmm. I never heard of it. One more. Colin Farrell's best performance ever. You've seen in Bruges before. Of course. I watched again for the fourth time probably. It's good. I love that movie. He's very good. He's so, so good. All right. Very good. That's it. Um, again, Ben, credit to you for putting me on to Mr. Mrs. Smith.

Pretty good, right? Blown away. I can't believe the quality of it. They have to have another season, I hope, right? I don't know. I don't know. I'm just saying with it, I think they could be different spies,

but the one with the neighbors where they have dinner and they still kind of kept doing the dark about what was really going on. Very good show. If they do another one, if they do another one, it should be a different couple.

I don't need to spend any more time with them, even though I thought it's great. I thought one season was good enough. Yes, I'd like to see a different couple. Okay. Because I want to learn more about the, the organization. They didn't tell us enough. Yeah, true. So Ricky Stenicki. Did you watch it? I did. We both, we texted about this, and it went straight to Amazon. It's a kind of movie that

should go straight to Amazon. It's a raunchy comedy, which we don't get a lot of anymore. And it was the dumbest plot ever, but it made me laugh a lot. John Sina is legitimately a funny comedic actor. I can't believe it. Yeah, yeah, John Sina. I mean, he showed off at the Oscars. He's, He's talented. I mean, beyond talented. He plays that, he plays basically that same character and vacation friends, which is two movies on Hulu. And Ricky Snicki is better than those movies, but he's funny in those too. I actually, I kind of like him. So this movie was directed by Peter Farrelly. Did you know that? I didn't know that until you told me,

and it would make sense thinking about it. So anyway, so I was looking at Peter Farrely's IMD. I didn't realize he directed Green Book. I thought he was a comedy guy only. Remember Greenbook? I didn't know that either. either. So he's also done, and how do I not know that he did Hall Pass? That makes sense, too. That makes sense, right? They do have their, yeah. So he did it without his brother then. He also did, uh, shallow howl, me, myself, and Irene. There's something about Mary, he did that with his brother, Kingpin, Dumbull. A couple of weeks ago, I told you shallow howl, they should do a new one. I love shallow. Where women get hypnotized into thinking

men like you have hair. That should be the new shallow how. All right, that's a good place to wrap animal spirits at the compound news.com. Personal emails, keep them coming, personal responses. Thank you very much for listening. We'll see you next time.