Animal Spirits Podcast - The Wealth Paradox (EP.318)

Episode Date: July 26, 2023

On episode 318 of Animal Spirits, Michael Batnick and Ben Carlson discuss: the 2 types of bear markets, why everyone was wrong but the stock market was right about a recession, speculation vs. interest rates, real estate as an investment, why everyone underestimated the consumer, the unhealthy housing market rolls on, and much more! Today's episode is sponsored by our friends at YCharts. Re-imagine your portfolio research with the latest addition to your YCharts toolkit: Portfolio Optimizer. Start your free trial and get 20% off your first subscription at: https://go.ycharts.com/animal-spirits-referral. Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits is brought to you by our friends at Y Charts. Why Charts has this cool new tool called portfolio optimizer that allows you to reimagine your portfolio and that dynamic capabilities you can spend less time on the tedious data sifting, more time fostering engaging experiences, answering client questions, with prospects and optimization, and you can also modify existing portfolios. With portfolio optimizer, they have the power to mitigate risk, maximize portfolio performance, and make data-driven decisions with confidence to answer the why behind your strategy. Very important these days, right?

people, there's a million different portfolios they can have. I think why you have that portfolio is one of the things that an advisor needs to answer. And true Y charts fashion, portfolio optimizer is designed with compelling visuals, which is some of my favorite things, is the charts, of course, which make a client and prospect meeting seamless and educational. Click the link in the show notes and start your free Y charts trial and then get 20% off your initial subscription if you sign up telling them the animal spirits sent you. As always. 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. Michael one of my things I always talk about with the markets is that there's no such thing as average, right? The averages that you get historically, there's a huge range of outcomes around them. So you look at historical averages and you think it's the experience, the lived experience is not going to be like the averages, right?

Well, I think the bear market we just lived through was actually an average non-recessionary bear market. So this is some research I've done in the past. There's two types of bear markets. One would be recessionary. So I put this chart in here, recessionary bear markets since 1920. the worst of the worst. The Great Depression, 1937, which is kind of an unheralded one that doesn't get talked about as much. The stock market fell 55% almost. 1970s, early 1980s, 2000.com blow up, of course, 2008, and then the early 2020. These are bear markets that were basically happened

in or around or because of a nasty economic slowdown. And I think this is one of the reasons so many people thought that the bear market was going to roll over and get worse than it did because while a recession is coming, so it has to get worse. But if you look at the non-recessionary, and the thing about the bear market, the recessionary ones, the average decline is like 40% peak to trough. It lasts 390 days on average from peak to trough. Non-recessionary bare markets on average are about 26% down and last for 210 days. The most recent one we just lived through peak to trough, 25% and lasted 282 days. So look at the table I put in here, looking at recessionary versus non-recessionary.

This was a run-of-the-mill non-recessionary bear market. In terms of it, it was average. The decline, yes. It lasted a little bit longer than the average non-recessionary bare market. So you started the show saying that you never lived through the average, except we just happened to live through the average. We kind of did. This was a non-recessionary bear market.

It works every time. So do you think that the stock market, because we talked after the pandemic, that the stock market was right, that all the fiscal and monetary policy was going to help and that the vaccine was coming, and the stock market front ran all of that stuff that was going to happen, and the stock market kind of got it right. Did the stock market sniff out no recession when it bottom in October? Because I went back and looked, I think it was October 12th, the stock market bottom. And I looked at a few headlines from the Wall Street Journal and Financial Times and New York Times on in and around those days, like October 11th, 12th, 13th, all the headlines were

nasty, talking about how inflation was remaining high. It came down a little from the peak, but it was still 8%. And the Fed was going to have to do more stuff. And there was all the stuff with the Great Britain bonds or something. But there was nothing that was like, okay, coast is clear. The stock market is bottom. This is it. Did the stock market get it right again?

Hmm. Well, yes. The context of that is everybody got it wrong for the most part. Right? Like, I don't think even the bulliest bulls saw 2020 coming. We're now 2% away from an all-time. high in the S&P 500, even those that were looking for maybe a soft landing, probably didn't see the stock market doing what it did. So people were wrong. It was interesting. Individuals

were wrong, but the group was right. Because what is the stock market? It's us, right? It's everybody. And it is sort of a funny dynamic that everybody was off sides and yet the stock market, which is, again, where the stock market got it right. So credit to no one, credit to no one, but credit to everyone. Yeah, to your point, it's one of those things where everyone was saying they were, like the vibe session thing, everyone was saying how bearish they were, but they weren't positioning their portfolios as being bearish, really, right? People were still holding stocks.

And I mean, obviously, some people went, flipped ultra bearish, but obviously most people stayed in stocks because otherwise, how did they rally? Even like, I don't know when we started saying this, like, well, look how bearish everybody is. And yet the market's acting okay. And now the market's acting better. And look at this and look at that. And wow, the market's really acting better. Like, even though everyone's still super bearish, I feel like I've been saying that for a long,

long time. And so this is not a revisionist history. I'm not this. There's no victory lapse. I didn't see this coming. I was wrong as everybody else was. But I was very curious that everybody was on one side of the boat, but the boat was going the other direction.

And that, I think that's a lot of the fuel for, for this rally. So can I, can I buy long? dated options on where I think we're going next. The people who thought we were going to get a 50% correction and things were going to roll over and October wasn't the bottom, double dip bear market. Can I buy some long dated options on this? This is, can we have a pivot there from some of the potential doomers that this is the next thing? Okay, this, this bear market. Well, this bear market is kind of over, but double dip, we're going to get another bear market. That's the next thing. It's coming right on the heels of this one. Double dip bear market.

Well, interestingly, do you think anybody's, I don't, nobody's prepared for that. That would be interesting. Yeah. What would cause that, though? Like, stocks don't just fall for no reason, right? I think there was a very good reason why stocks fell 25%. I think the bare market. Now, was the stock market right?

I don't know. Was it wrong for falling? I don't think it was wrong for falling. No, I think the correction made sense in light of interest rates and inflation month. Yeah, totally justified. But there's got to be another catalyst for stocks to fall 25%. It would have to be the Fed going to 6% and us going into recession. That would be it.

Okay. So I've been pounding the table on this for a while. And I don't 100% believe it, but I believe it's 75% of the way. The interest rates matter way, way less. Wow, whoa, that's a lot of hedging. You've been pounding the table, but you don't really believe it. Like, excuse me, what are you, and but you believe it's 75%. Rewind that.

What did you just say? All right. I've tried that again. I paid myself into a corner here. Okay, can we agree that interest rates matter a lot when it comes to people's decision-making? Hold on. Was that a Grand Rapids hedge? What was that? I don't know. Fair. Can we agree that interest rates matter in terms of people's decision-making about their finances and about investments and allocations, but they don't matter nearly as much as we assume?

So the Wall Street Journal has this piece called tech stocks, meme stocks, and crypto. Investors are feeling bold again. And they've got this chart showing that bullishness among individual investors is the highest since November 2021, which was actually the time when a lot of those meme stock stuff really peaked out. So they say, shades of mean stock mania cropping up, the meme ETF tied to Round Hill meme stock index has risen 67% this year to the highest level since May 2022. To be fair, it was down 63% last year. Top holding riot include Bitcoin Minor Riot platforms up almost 500% this year.

AI lending platform up start holdings up 342%. Coinbase up 211%. Auto Maker Rivian up 35% and Carvonne up over 1,000%. Retail traders are all in. Bullish sentiment this month hit its highest level since 2021, according to the AIAI. So I'm just saying maybe sort of speculation can happen without rates being at zero. That's all I've been trying to get at over the years. Okay.

Well, but that's not interest rates don't matter. I don't think you're saying that. Of course, people can speculate like there's no tomorrow when interest rates are at 5%. They don't need to be at zero. I mean, we saw that in the 90s, right? How many times were we spoken about that? The dot-com bubble existed in a 5% interest rate world. So, yes, you can get speculation when there is an alternative for speculation, i.e. 5% just for cash.

However, of course interest rates matter. It's literally the cost of capital. But is it the only thing? No, but it's a very important thing. It's like, do valuations matter? Of course it matters. Right, of course, what you pay for a business ultimately will matter, but there are long periods of time where it cannot matter, where it's not the only factor.

same thing with interest rates. It's kind of funny that... But I mean, they matter. Come on. Of course they matter. They matter, but I think there's a lot of people who got their brainworms sucked into interest rates are the B-all and all.

And the only reason the 2010 bull market happened is because of interest rates, which I think is just a faulty line of thinking. I 75% agree with that. I do think that ZERP, like a lot of what we saw was a decade of ZERP. A lot of... But fundamentals kicked ass on the 2010s too.

That's the thing. that I, like the biggest tech stocks that like Amazon and Apple and like these stocks, they came through with fundamentals as well. It wasn't like these are the speculative growth stocks that people are paying up for because they're so exciting. They, the fundamentals matters. But here's an interesting thing. So I put in the, the year to date returns for Facebook, NVIDIA, Apple, NASDAQ 100 and Netflix. You can see here, they're all up, you know, Nvidia's up 200%. Facebook's up 140%. But look at last year. So last year, all these stocks got crushed, right? Facebook was down 64% and video was down 50%. Netflix was down 50%. Even Apple was down

26% last year and the NASDAQ was down over 30%. But if you mush these two together and now look at the return since the start of 2022, Apple is still, Apple is up 10% since the start of 2022. Netflix is still down 30% almost. Facebook is still down 14%. The cues are down 5%. Invidia is up 50%. That's when But what happens if you zoom back out to 2021? Yeah, I guess my point is, though, like, maybe this year isn't so much speculation as it is just a snapback because expectations got so far out of whack. People thought things were going to be so dire this year in recessionary that last year was people overdid it.

Correct. Yeah. You can, as always, you can change your start and end dates to win any argument you want about the markets. But I'm just saying, if you just zoom out just a little bit and include the bad year last year in the good year this year, it kind of averages out and evens things out all of us, not nearly as crazy as it might seem. Well, it's a bull market that we can say for sure.

We spoke, I mean, we, everyone's been speaking a lot about how it's only the magnificent seven. The equal weight is lagging big time. The Dow isn't participating. Value stocks, dividend stocks are lagging. Well, can't say that anymore. You've got 80% of the S&P 500 above its 200-8 move. average. You've got the Dow Jones Industrial average riding a wave of 11 straight daily gains. The Dow's year-to-date return is?

9%. Yeah, 8%. It's not awesome, but it's not bad. We'd say it's average. According to bespoke, that 11-day rally has only happened six other times. So unequivocally, we enter to, we're in a new phase. There's a bull market. It's not a bearer. market rally, right? We could bury that. It's a bull market. And so here we are. We've got Mike Wilson threw in the towel. Credit to him for saying he was wrong. There was a Bloomberg headline saying Mike Wilson admits he was wrong because most of the time people on Wall Street will move the goalpost. This is one of the things that always irked me so much about working with

hedge fund managers and private equity managers and active managers in my endowment days is that they would make a pronouncement and they would go stronger than me they wouldn't do the 75% hedge they would pound the table about something happening and then when it didn't happen they would move the goalposts and they would never say you know what we just missed

it was always like the reason this happened is because of the Fed or rates or this it was never just like you know what our style investing just is not working right now and there was like one manager who did that and I always really appreciated and respect to them for saying like listen the way that we manage money is not working right now and that's the truth

and I just I appreciate the fact And he said, listen, I was wrong. Yeah, me too. Total kudos to him. I think I was saying to Josh, off camera, I wouldn't throw on the towel if I were him. Right? Like, it's too late. His heels are dug in, and he's got to stick with the call.

So, yeah, credit him. I'm sure this is not easy. It's never easy admitting you're wrong, especially when you're so publicly wrong. But yeah, credit him. But last week we spoke about the arc flows. And I'm glad that I saw Eric Bouchon has put some context around those numbers. because it wasn't, I think we discussed, it wasn't like a, the journal made it look like it was like an Exodus, and it really wasn't the case. The numbers didn't match the headline.

No. And I think we hit on that last week, but Balchunas comes in to clear it up. Some context of the Arc Mass Exodus article, here's daily flows here to date, a whole lot of in and out, just like normal, albeit it does net to negative $284 million, but it's 3% of AUM. So, again, there you have it. Not much. Still 9 billion assets under management that fund, which is pretty pretty high for a fund that fell like 70 or 80% from the highs. Nick Majuli wrote a great post called The Return on Hassel. I believe that's a title. Is that the title?

Yep. The return on. Okay. And what sparked this was a tweet from the FI couple. I guess that's financially independent is what it stands for. And the tweet was this that got a lot of attention. Our rental income. And I guess rental real estate has become a big topic on social media recently.

So they said our rental income snowball. And they listed out 2018 to 2024 and it starts at 725 a month, goes to 3,300, 6,300. Here we are. Or they're projecting 16,000 for next year. They're at 11,500 this year. Okay. The snowball is speeding up. So somebody responded, that's great, except for those pesky things like debt service expenses

and capex. What's your net? And they say just under $2,600 a month. And there was a lot of dunking, all right, they're doing all of this. It's been six years and they're netting $30,000 for all that hard work and hustle and, you know. And I think a lot of what happens at social media is personal preference and people just talking right past each other. And I don't follow this account. So I don't know their intentions or motivations.

I would assume that this is not like, you know, a scam. account where they're trying to like trick anybody. This is this is what they do and they're sharing it. And so Nick wrote, regardless of what you believe about investing in real estate, it's no better or worse than any other investment. It just has a different set of tradeoffs. Some people are okay with these tradeoffs and others aren't. This is where so much online discourse goes awry. One party is focusing on one set of tradeoffs while ignoring others and vice versa. As a result, everyone ends up talking past each other, rather than realizing that all of this comes down to personal preference. And I think he pretty much nailed it.

I think a lot of it, too, is I think there's some people that get a lot out of people shit. Because I know there's a lot of different types of accounts that, like, we'll share, here's my dividend income goal. There's like a lot of people who are focused just on dividends. The real estate people, like, post their actual numbers. And I think a lot of the financial freedom stuff, a lot of people just hate because they assume it makes it sound easy or they want to poke holes in it and go.

Oh, sure, you're financially free, but how much money did you make? Or did you get help from your parents? And so I think the financial freedom stuff really irks a lot of people because it's like you're making it seem like it's too easy when it's really not easy because I know how hard it is. So I think that's part of it. Also, they're shoving it. It feels like people get mad because it feels like these people might be shoving it down your throat.

And it's like, listen, I don't want to live that frugal of a lifestyle. I actually enjoy my job and I'm going to work and live life. want to live and you do it your way and I'll do it my way. But it feels like it's a lot of it's an indictment, right? Like, I can't believe you're still working or, and I'm not every, obviously not, I'm not speaking for everybody. I'm just saying this is how some people feel. Right. I don't follow this account either. So I don't know how, how much they try to shove it down people's throats. But I think part of it is too, there's extreme sentiments on rental real estate. Some people think it's the dumbest thing ever because you're wasting all your time and money. And like if one air conditioner

breaks, you're screwed in that net that you're making is gone. And it's like to next point, the hassle is so much more, but other people think, why would anyone do anything else besides rental real estate? It's the greatest thing ever. It's passive income. I can hire a manager to handle all that stuff. And so I think that's the extreme is that some people think it's the only thing you should do. Some people think you're dumb for doing it, whereas there's, as always, there's a middle ground. I think I would, I mean, a lot of people would take umbrage with that. If you're like, why would you invest in the stock market casino when you could just own cash flow and property? It's like, all right, come on, give me a break. Now, I've never spoken about

this, but I bought a rental property in 2000, I can't remember, 2020. And the thinking behind this for me was I've, my entire life is in the stock market, like my job, my income, my future income, my investments. And I was looking for some diversification. And so I said, you know what, I'm going to, I'm going to buy a house and rent it out. And again, like, I'm not taking it. I mean, I'm still all out of the stock market, but just for diversification. And my experience, so it's been three years, I've had one tenant. tenant's been great, but it was definitely not easy finding a tenant. I mean, it wasn't that hard.

You know, I had probably 10 people come see the house and got lucky with this one, but there are, there has been hassle along the way. So like to the next thing, the return on hassle, there has been hassle. There are things that break, things that need replacement. So I guess I net, I don't know, 200 bucks a month, but pretty much all of that is, you know, at some point either goes back into the house. But what this person didn't tweet is the equity that you're building up. Right.

That's the big part of it is the equity. That even if you have minimal gains from here, which you probably should expect, that just building the equity is a big piece of the return. So even though I net whatever, $200 a month, or I should say I gross because that's like, I'm not netting out any expenses. I pay for water, for example. But so I'm, let's say I'm paying off $1,000 in price. principal a month. So it's a, it's a slow way to, to build equity. But you can, you can,

you bought that house in 2020 and you probably got it at a good price. And, but you got a three percent mortgage, I assume. You can never sell that house. Two point eight seven five, not the break. Yeah, no, I'm, um, so I go back and forth like, you can't, you can't sell it. I, so I go back and forth. Was it worth it? Uh, would I do it again? You know, I feel like my, my, my opinion of this flip-flops a lot. Um, like there's probably easier ways to make six. percent is where I is where I feel today. But come back to me in 10 years, you know, like in 10 years, I'll probably be like, yeah, I'm glad I did that. And in 10 years, let's say you have something else that you want to use that money for. And you go, all right, I'm finally ready to give

up this, this sub three percent mortgage and you pull out the equity that you have for something else. I bet you're going to feel, it's going to be a nice, it's just, that's the biggest thing about real estate for most people is that it's for saving. Right. And you obviously didn't put 100% you didn't pay for it 100% in cash because you borrowed. So you're also getting I didn't make the leverage piece. So I'm super levered. I put down 10%. That's that's why only, I mean, it's easier with rental rentals, I think, but for your own home, I think it's essentially impossible to calculate the actual return that you get on it. When you, when you factor in the things like leverage and the ancillary costs and how much it costs to get out of the house

because of realtor fees and closing costs and all this, I think it's impossible to understand what the actual return is in your house for anyone. I don't think anyone ever actually knows the actual return they get on their house. No, because... Which is fine. That's the way it should be. Right. Well, that's...

You mean for your primary home. Yes. Yeah, totally great. Rentals, it's easier. You can run the numbers in. So, we don't spend a lot of time this. I think you guys hit on this on compounded friends, but this, this stock tweets thing about the guy showing the market's going to crash, the market's going to crash, the market's

and then how to get rich in the bull market. Another account, I don't, it's a great tweet because I just love how they pulled it, and this is how every YouTube thing is these days. But remember when we were coming up and everyone dabbled in Buffett and Graham, the first book you read was the intelligent investor. And everyone wanted to be the next Warren Buffett. You went through... That's literally like the first investment book I read, I think. Oh, yeah. Me too. And then you read the Mr. Market chapter, you're like, got to figure it up. Is it? Let's do it. And then if you're really going to go down the

rabbit, you read a little Joel Greenblatt. And wait, and then you short Amazon. Yeah, valuations. And then maybe some... Philip Fisher, if you're really getting into it. So you're like, I'm, I'm a, I'm a value investor. There's no way. You got to sprinkle, Peter Lynch. Peter Lynch, too, buy, we know. But I don't think young people do that anymore.

I think now it seems like all young people, their first thing they dabble in is being a dumer. So, like, I don't know how old this guy is. Stop, stop, stop. The first thing young people do is dabble in dumerism? That's a stop. You don't think that every young person now, at least dabbles in the market is going to crash.

I think that's okay every I mean did every investor try Benjamin Greer I'm saying I'm saying there are probably more young people dabbling in dumerism than Warren Buffett stuff these days how's that fair here's what I would say for young people like when we started I remember Googling like what is the best book on investing I literally Googled that that's what I did too right now you don't do that you probably go on YouTube podcast blogs books are way down probably I'm Sure. Yeah. That's fair. I just, I think it's easier to dabble in the dumerism these days because there's more outlets for it. When we were coming up, there was, there was no dumer outlets. Right? No.

You know, unless you were a big Harry Dent fan back in the day, I don't know. There was a lot. I want to name names, but there was a lot. There's always been a lot of bears. Fair. I think it's easier to try it now as a young person. If, if you feel like I'm never going to be able to buy a house and I feel like I got screwed. and I'm left behind. Let's flip this. I think your first premise was right. Nobody, and I will say nobody. You know, maybe there's like a dozen people out there.

Young people are not reading the intelligent investor. And they're definitely not reading securities analysis. They're just not. Nor should they. Which is probably a good thing because that really, that's like expert level stuff. You read that after you've got the basics down. The intelligent investor is not basics of investing. No.

And it's a huge book. And he talks about like railroad stocks. There's like two chapters. Chapter 8 and chapter 20 that you should read. It's mostly unreadable, except for this. You're right. All right. We've talked a lot about consumer sentiment and how it's crazy that things still seem to be going so well, but consumer sentiment was crashing.

And obviously, the big reason for it was inflation being so high and people hate inflation. So this is maybe fun with numbers, but I think there is some truth to this. So we talked, I remember we were on Derek Thompson's podcast a while ago, and we talked about how high gas prices and people just see those numbers on a screen. and that that's one of the reasons that people are so, look at this chart I created of U.S. consumer sentiment and retail gas prices. Gas prices topped at basically the same exact day, week, month as consumer sentiment bottomed. I don't think this is a coincidence. Obviously, inflation following helped, and this is right around the peak of inflation,

but I do think it doesn't seem like there's as much, because inflation is still relatively high. And again, we haven't unwound. all the price increases, but I don't see as much angst about inflation anymore as there once was. And I think gas prices are honestly a big reason for it. Huge. For like, as far as public sentiment, remember every day on the news, you'd see a huge story about gas prices going up here and they've come down, obviously, oil prices have fallen too. There was this great quote in the new William Bernstein book. He said he kind of based

his whole ethos of what's changed in last 20 years since he wrote the first four pillars of investing. And it was from Robert Kaplan, who's a geopolitical expert. And he said, half of everything is geography. The other half is Shakespeare. And I love these. So it's like, you know, the real world and data and stuff, that's part of it. But the other half is like narrative and storytelling in the human brain, essentially. And I do think that a lot of macroeconomics, it's like we're talking about all these crazy data points and stuff. And it's like, the simplest Occam's razor here was, oh, it's gas prices. That's the majority of what people, why people were upset when it came to consumer sentiment.

Yeah. Fair? Yeah. All right. I think another reason that the economy never rolled over, I think everyone really just underestimated the consumer. So Sonu Vargisi from Carson Group tweeted this to me after I wrote a piece last week about like people underestimating the mortgage lock-in and the fact that people's balance sheets

are so much better. So he shows. Do you mean he's he's eaten? Oh, jeez. I don't even know what... I think... The billioners are all just so bored, aren't they? I think I tweeted...

I select this to you and Josh, but there was some... What's the guy's name in Succession? The Big Tall Norwegian guy? What was his? Matt's in... In the season... In the season finale from the second to last season,

the pen ultimate, you might say, which is one of my least favorite... His character sucked. I was stumped by that. It did not work for me. He was having his one-on-one of Logan Roy about, should I buy you or she do buy me? And he said,

success doesn't interest me anymore. Like, success is easy. I've made billions of dollars. What interests me is, like, breaking things down and destroying things. And I feel like that's one of the things they really nailed, where I think at a certain point, when you've had enough success,

especially in an early age, I don't know. Maybe just playing around and toying with things is just, I don't know what's going on with Twitter. And through it all, it's still because threads doesn't seem to want to make, be the same thing as Twitter for whatever reason. Side note here.

Do you remember the Larry David's story? It was a Seinfeld episode where Larry David quit S&L. He got all mad about something, and he quit S&L on a Friday, and then showed up again on Monday and pretended like nothing happened. And that's all the people who said, I'm out of here. I'm leaving Twitter forever. I'm going to threads. I feel like those people are pulling with Larry David and just coming back like nothing happened.

just pretending. Anyway, yeah, that whole X thing, I don't know. There's never been a successful rebranded in all of history, has there? Or like a name change actually worked. Can you think of one? I still think Zuckerberg doesn't get enough. Well, guess what? You don't change your-

Changing to meta. That was a dumb. That one might have been even dumber than Twitter turning to X. I feel like he doesn't get enough. Well, it's because the stock recovered, but you're 100% right. That was so dumb. You know why? I mean, you don't change your name if things are going well.

True. And turnarounds, and turnarounds are hard. That's true. All right. So back to the econ stuff. So consumer spending is, this is real personal consumption expenditures, had this massive drop, and then it's basically right back to the pre-pendemic trend, which is interesting. This is another one I haven't seen.

Credit utilization rate by credit card and home equity. And it shows pre-pandemic averages since 2003. And credit card is way below. So this is percentage of available credit. In pre-pandemic average for credit cards was 51%. It's only at 38% now. Wait, but I thought everybody was loading up on debt. I thought that's what was keeping the consumer strong.

You told me that's not true? I guess not. I think the economy is so much bigger that people just have more debt. So this one has surprised me. Like the credit utilization rate is not even close. I mean, for home equity, it's pretty steady over time. It's a little below. But for credit cards, it's way below the averages and way below where it was pre-pendemic.

So if people do start running out of, money, excess savings and such, the credit cards are coming next, right? Credit card debt, I think, in the coming years is going to skyrocket. Like, credit cards and home equity line of credit. I think in the coming years, that's my, that's my biggest bull market. You heard it first. Credit card debt is going to explode? I think if we start seeing a slowdown, like credit card debt and home equity lines of credit are going to explode higher. People are going to not want Does that happen in every recession? People dig deeper into credit card debt, probably, right?

Well, that was the weird thing about the pandemic, is that people paid down their credit card debt, even though we had a recession. I know it was the quickest recession in history. That's why it was so bizarre. Ben, last week or the other week, you were talking about, like, are people going to say that Powell nailed it with the soft landing? Is he going to be praised with the benefit of hindsight?

site. And I saw there was a column in Reuters, a soft landing, and as Powell, the most successful Fed Chief ever now. I forgot to read the article, so sorry about that. But here it is. I don't know. It's coming, I guess. Nailed it. Somebody saying it. Right. I mean, I'm saying it. Yeah. I still give him a lot of credit for how they navigated the pandemic, obviously after the fact. Although, I mean, listen, if he, if it works, he will get credit that he, in my opinion, doesn't deserve because they were needlessly driving on the freeway going 97 miles an hour in a 65-mile-hour zone. And then they jammed on the brakes. And they happened to avoid a crash. I don't know that the driver would get credit for that. Yes, I agree. I think if we do get a soft landing,

people are going to forget about the fact that they waited so long to raise rates the first time. To beat this analogy into the ground, you credit the passengers for remaining calm in a scary situation. Fair. Not backseat driving. Yes. Last week, I talked about the fact that the only indicated right now for a recession is the yield curve. And you said, well, leading economy indicators too, but I'm going to hit on the yield curve. Colin Roche, at Discipline Funds had a good take on this. Like, what does the year curb tell us? And he said, it's best to think of the inverted yield curve as a Fed Funds rate rate rate.

prediction, which is an implied prediction of future relative inflation. This often correlates with rising recession risk and rising market risk, but in it up itself, the yield curve is not a recession predictor. He's saying that the yield curve being inverted is guessing where rates and inflation will go, and the idea being the reason that it's inverted right now is because the market thinks that inflation is going to remain low going forward, and therefore rates are going to go down, but that doesn't necessarily mean that we're going to hit a recession. And he's saying if you look at it globally, that that kind of makes sense. So it's, you know, you know what I think is, I think it has been debunked or put to bed

is this idea that one of the reasons why a yield curve predicts a recession is because banks borrow short and lend long. And when the yield curve is inverted, you're less likely to do that. But that's not true for two reasons. number one, that's the U.S. government yield curve. It's not like the corporate yield curve or small business yield curve. They can lend whatever, they can lend and borrow whatever rates they want. Number two, how many trillions of dollars are sitting in the banks on deposit earning zero?

Right. Right? Like literally earning zero. Yes. Two basis points? I mean, what are the checking account pay? So they're still borrowing at zero, even though the Fed funds rate is at five, five and a quarter. Plus, the Fed is so much more intertwined now with the, you know,

interest rate markets in terms of them. They were buying treasuries during the pandemic. And I think the yield curve itself is so fraudulent because of what the Fed has been doing these past few years. It's hard to say like the market is implying this. Yeah. Yeah. Exactly. Yeah, the market. And so does Cam Harvey, by the way. The one who created the yield curve indicator. Like he said that it's time might not work. Time to reconsider. All right. This is a South thing. So I may be even mispronouncing this. But have you heard of this Bucky's place in the South? I've not. Like people in the South, I think it's like a store slash gas station slash car wash.

And someone posted this on Twitter. They're showing how cashier earns $17 an hour, food service and car washers was 20. A manager earns like $24 to $32 an hour. No experience necessary. Assistant general manager earns $100K. Car wash manager, $125K. General manager could earn up to $225K. They have a 6% 401K match, three weeks paid time off, plus $2 an hour for overnight and health care.

And this is it. It's the labor market, right? Like, it's not that complicated. Remember, there's all this like 1950s, 60s, 70s nostalgia for, and this is true, especially in Michigan, of the automakers that you could get a job at an automaker without a college degree and you would have retirement benefits and health care benefits and make a living wage and you did pretty good for yourself. And people are wondering, where has that time gone? It's kind of crazy that it's kind of been brought back a little bit. These numbers are insane, correct? Like, from what you would assume, right? Yeah, I don't know how hard it is to get a job in one of these places, but it's pretty crazy. Let's talk about AI for a second. This is from the transcript quoting McDonald's CEO in terms of where AI is going. And I know Ben doesn't care about AI until he has his personal assistant, but it is a thing

that's coming. I was playing around chat GPT last night, actually. I was asking you a few questions. Here's where I've come down on it. Like, if I'm running sort of blog post or something and I want to make sure I hit everything, I'll put the question that I'm asking into chat GPT to make sure that there wasn't something glaring that I just completely missed because it kind of goes through and both. So it's helpful, but here's the thing, though, does it feel like it's, it's waned a little bit

in everyone is kind of, like, for when it first came out, half the tweets on Twitter were people being like, look at what I created on chat GPT, aren't I so? you know aren't so great you don't see them anymore i feel like it's it's it's kind of the shine has come off a little bit until people actually use it on a daily basis aren't aren't i so great that's a weird take on people tweeting about chat you know i think people oh people just not so great people thought that they were just being very witty like look at this witty thing that i created on chat gpt like look at how witty i am and so that's that's died down don't you think i don't see it anymore ever yeah um i yeah i mean to say listen we're in uh we're the game

hasn't even started. I was about to say we're in the top of the first, but the AI revolution is only, we are at the dawn. So, McDonald's CEO, you're also getting vast amounts of consumer data. We get about 65 million people a day visiting our restaurants. We're collecting data on roughly half. A third of those, you can then start to customize. Imagine driving up through the drive-thru, and imagine that maybe the drive-thru menu board changes because we know that when you typically come to McDonald's, these are the items that you like to buy. And so now you have a menu board that maybe is customized to you as opposed to just being a menu board. All right, you got the point.

Listen, I don't think this is, this is in and of itself. I don't think this is in of itself, like, so incredible. Like, if I go to McDonald's, I get the kids a six-piece nuggets, like, I don't. Wait, so if you drove up, if you drove up to the, what would the menu look like for you? If you pulled up in your, in your new Jeep Wrangler, what would the menu look like for McDonald's, from Michael's AI? What is my, what does the brand of car drive have to do with this? I'm just saying, you're going in the drive-thru. We were talking about your Jeep, you did.

day. No, we're not a day. We were talking about your Jeep the other day. So I'm just saying you're driving your Jeep to the drive-thru. What does the man you look like for Michael Bannick? I love fast food. I absolutely love it. But I don't get it. I grew up on fast food. Yeah, but I don't eat it really that much anymore. Credit to me, I guess the only time I really eat it is when I'm traveling or I, but I guess I do eat because I eat the kids nuggets and fries when they're done with it. But I like it all. Like, I don't discriminate it. I like it all. Some are better than others, but I'll take anything. Anyhow, here's, I mean, But I still think McDonald's, I still think McDonald's has the best fresh food fries of anyone.

McDonald's fries. Yeah, I agree. People are like, oh, the fries used to be better. Yeah, maybe, but they're still pretty damn good. Anyway, so, so listen, the menu changing to what you order is not that exciting. But you get the point. Like, the possibilities of what AI is going to do are, you know, more or less, more or less. But it'll be like, there'll be little things that we, like, don't even notice and we just get used to, I think.

That'll be happening behind the scenes to make your life, like, easier and in tiny ways that you don't even think about. out anymore. I don't think it's to be tiny ways. I think it's going to be huge ways. I think it's going to change. I think it's a lot, but you know what I mean. It's going to change a lot. I don't know.

I think it'll be more for, like, workers than it will be for, like, your day-to-day. That's my thinking. Unless we have our Scarlett Johansson in our ear, then game on. All right. Good real estate stuff this week. This is from Rick Placios, Jr. This was a chart from one of his webinars for John Burns Consulting Group. He said there are, so the blue line here in this chart shows owner-occupied housing units.

So this is exclusive of the rental stuff we were talking about earlier. This is owner-occupied. So in 1983, we're talking 53 million owner-occupied housing units in the U.S. Now we're up to 86 million, right? But then it shows existing home sales on the other line, right? You can see in the bubble of the early aughts, existing home sales shot up to like 4 million. And then it got even higher because supply grew during the, the, the bust afterwards in 2008. But now look at it. So if we're doing a ratio of

existing housing units that people live in that are not running out versus existing homes for sale, it's, so we're back to a million existing homes for sale where we're at four million in 2007, but there's also 10 million more homes. So like the ratio of the amount of homes out there versus the existing home sales happening has never been this large before the ratio. there's just there's just the inventory is so low especially when in relation to how many houses there are it's just ridiculous so fewer people can afford to buy house and housing prices won't come down because of this basically it's unbelievable here's here's another crazy stat to piggyback on that forget who tweeted this um we'll link to this in the show notes another way to look at low

inventory there are 600k more realtors than homes for sale right now how wild is that there are 600,000 more realtors than homes for sale? Just a little bit. Okay, so newly, home builders are the only game in town we've been talking about this. Historical norm is they make up 10 to 20% of home sales. Right now, Wall Street Journal has almost 35%. And they talk about how this is for people looking at houses, this is kind of the only thing that matters, right?

Is that if you're going to go somewhere, they talked to this couple who did a temporary buy-down that reduces their mortgage rate for the first two years of the loan, and they can hope they can refinance later. And the guy says, I'm hoping we made the right decision. I don't know if it was the right time to buy, but rents just keep going up. Kind of like, listen, we're screwed either way, so we might as well take the leap and hope that we can refinance down the road. And I almost don't blame them for it. I don't know what else people can do this at this point if supply is not there. I feel like a lot of people that I talk to that are buying houses are doing adjustable rate mortgages, which makes sense. They're in like the five and a half-ish range, which it seems

Can you imagine telling someone in, like, someone in 2010 that it makes sense to do an adjustable rate mortgage after what we just lived through? Right. But it does, it does seem like the risk of mortgage rates being higher in five years is, you know, I'd take that trade. Did you listen to the Oblots podcast this week on housing? Yes. So here's some, Kyle Kovats tweeted this. Just heard this incredible stat from James Egan on Adlots. One third of all homes in this country are owned by people aged 65 or older, and 50% of those homes were bought before the year 2000.

Now consider Case Schiller is up three times since 2000 and four times since 2009, or this is 1990. That's kind of, that half of all people 65 or older who own a home bought it before the year 2000. That's like we've talked about this. I think the average people have lived in like 30 years, like my parents have been in the same house since 19. So this is the thing where even if people start to lose their jobs, like, where do the foreclosures come from? Because why would these people ever need to sell if they own their home outright or they have so much equity and it doesn't even matter? Well, how long are you staying in your modern farmhouse? We've talked about like kids are out of high school probably, at least.

I mean, unless rates come back to 3%, it makes sense to move. I don't see. But here's the thing. When do these people 65 or older, last week in the comments, I'm watching what I say because someone said that it's cringe that I say boomer so often. I'm sorry, boomer is equated with old people, just like millennials equated to the young people. That's just the way it is. It's not a derogatory term.

You can use it in a derogatory way. Yeah, but I don't think, but boomers is not a derogatory term. They are the baby boomer generation. Exactly. So the thing is, so I do think they talked on odd lots about like when is the baby boomer flood of supply going to happen in 2030s, could that slow housing? I think it could. I also think it'll be a renovation boom. If these people have all owned their home before 2000, young people are going to see these old houses that need to be fixed up. But I thought his biggest point was,

if rates go back to say 5%, there's going to be more demand than supply, meaning more people are going to come up the sidelines wanting to buy than wanting to sell. And I think I kind of do that. Well, there's already a demand supply imbalance. It's just going to go even more extreme. One of the points that he made was, and I forget exactly what he said, but it was like, had you told me three years ago, given to where demographic trends were heading, I never would have thought that X, Y, and Z. And this goes back to my point about demographics. Of course, they matter a great deal. But when you're talking about demographic trends out to 2050, I'm sorry if I can't get worked up over them. Not that they don't matter.

But this guy's an expert on housing. He's even three years with demographic trends he couldn't forecast whatever. happened. It's kind of like with the markets, the news doesn't matter as much as the reaction to the news, right? It's the reaction to it that matters more than like, everyone knows the demographics, but it's like, what's the reaction functioning? Because interest rates were low in 2019 before the pandemic happened. And there wasn't this huge flood of buyers looking to buy, right? It took this, this spark of the pandemic. Yeah, no, not at all. Right. And homes were guess what, a lot cheaper back then, and rates were lower, and there wasn't as much demand.

All right, here's a good one from MarketWatch. How much do you need to make per year to afford a $500,000 house? Did you look at this yet? What's your guess? No, I did it. What's your annual income to afford a $500,000 house? You can give a range if you'd like. Prices, right rule, apply.

All right. Let's say 125 to 155. Pretty good. It was 140. And then for a million-dollar home, $281,000 a year, and they're talking about, like, big cities like New York or San Francisco. How's that pretty good? I feel like I nailed it. I feel like you don't give enough credit when I guess things right. I said that's pretty good. You gave a range and you were right in the middle. No, that's, I, kudos to you. Better than pretty good. You could even be as generous as to say, I nailed it. You nailed it. What percentage of homes in the U.S. are worth at least a million dollars? What percentage of homes are worth a million dollars?

or more. One out of 10? Yeah, it's 7%. So you're pretty close on that one too. You nailed it again. Way to go. Thank you.

What would you guess? Yeah, one out of ten. Yeah, probably. That's pretty good. You must be a little sharper because you're on vacation right now. We haven't even mentioned the fact that you're doing this show from the Bahamas.

Credit to you, you skipped out on us on Disney, but you've made it happen to Bahamas, and that was after you forgot, one of your cords, so we almost couldn't do it. Yeah, I had a bit of a panic. I left my charger, my computer charger at home. We walked through, so we checked the luggage. I prefer not to check luggage if I can avoid it. But, you know, my wife, I assume like a lot of other wives, does, you know, overpacks. And so we checked our bags. And as I walked through the gate, the security gate where you put your, your carry on through the metal detectors and whatnot.

I'm like, oh, shit. I'm like, Robert, I left my bag. I left my bag back there. She's like, we checked you idiot. And I'm like, that's, well, in my defense, I've walked, I've left my bag in the airport more than twice where I just walked away from it. That doesn't surprise me. I'm a little absent.

Did you, did you buy a new pair of Maui gems to bring with you? There's a lot of people who stood up for Maui gyms. I wasn't degrading the Maui gym brand itself. I was just more saying don't spend a lot of money on sunglasses because you always break them, especially if you have kids and you're a little more active. That was my whole thing, is that I have kids, so I'm always active doing stuff with them,

and I'm not going to chance. So Robin says I look like an idiot in these sunglasses. I guess I do look a little bit like Neo. Neo is the thing that came to me. But, you know... I value my eyeballs. They're sensitive. And these have great lenses.

So am I overpay? Prescription, do you? No. Am I overpaying? Yeah. But, uh, some, what's so funny? Nothing. Duncan just said, oh, my God.

On the Slack when you put on the sunglasses, so. All right. Well, it's a little bit less, it's a little bit less ludicrous. Here's the thing. You have to put some into context. Duncan. I always wear a hat when I wear sunglasses. because I can't go outside with a bald head.

That's asking for trouble. So does it look a little bit less? Do I still look like as big of a doofus? No, that's your sunglasses style. Thank you. He said that's much better. Thank you, Duncan. Appreciate it.

Listen, it is what it is. You know, you got to play the... What is your review of the Miami vices in the Bahamas? Pretty good? I only have one Miami... I mean, I love Miami Vice. Who doesn't? But you can't trick more than one, right?

They're just too rich. So we had one. It was great. You have one per day. You know, this is not specific to the vacation, but I've noticed this a lot, and I never really spoke about it out loud, but I'm going to speak about it out loud right now. You know that thing where you smell something that's foul and you smell, you sniff like three more times just to make sure it's as bad as you thought it was?

And then inexplicably, 10 seconds later, you're like, is that smell still there? And then, oh, yeah, it is still there? So that happened with me. And I was thinking, like, what is that? And I'm sure it's not just me. That's, like, got to be like an evolutionary instinct thing. right, where there's some sort of threat by smell, fire, whatever it is, and just to make sure that you're in the clear, because there's no, there's no logical reason that doesn't, if whether the

smell is gone or not, it's not relevant, why would I keep sniffing? That's fair. It's a danger thing. So this is a, this is back to a evolutionary. Can you confirm this is not unique to me when you smell either garbage or something worse, you sniff? Because you want it to be, because you want it to go away. So you keep sniffing in hopes that it'll be clear.

Well, what was it? It was vomit, I think. Oh, okay. Nice. But no, this is a great spot. There's a casino, which I enjoy. We've enjoyed casinos together. Have you done Blackjack yet?

Of course. Oh, nice. I like it. Up down, up, down, sideways. You know what I realized, while I'm just rambling here, I'm a big common courtesy guy. I've learned that about myself. Oh, credit to you, not to brag.

Just courtesy of the common variety. It doesn't mean to be Mother Teresa, but for example, if I hold the door open and somebody walks and doesn't say thank you, I say, you're welcome. It's just rude. There's no reason not to say thank you when somebody holds the door for you. You agree? Fair. Like, if I let someone on the road, I better get a wave.

Exactly. That shit drives me nuts. If you make the effort to hit your break so that somebody can go in front of you. you, the least they can do is the common courtesy wave. So maybe this is a stretch because what I'm about to explain to you is going to make me sound like a crazy person. And I'm trying to entertain and be a little bit funny, even though I really do genuinely feel this way. I was emailing with somebody. And now again, I'm drawing a distinction. This is not common courtesy. This is just, it's adjacent. And I offered, I said, hey, could you do 12 Eastern? And you know what this person

did? They said, they offered a different time zone. They said, no, but how about 10, Central. And now I wouldn't go as far as to say that's rude, but it's just a little bit, I already set the baseline, right? If you told me, if you, if he had, if he had asked me, can you do X Central? I would have responded, no, but I can do this, your time. I would have said your time. I wouldn't have switched time zones on him. So you know, you know how I responded? I threw out Pacific time. Threw him for a loop, huh? Yeah. No, I agree. Yeah, I've done it, because you're talking people in California or something. Yes. I've, and I think.

people in other time zones should always default to Eastern since that's default time. Fair? Yeah, but if somebody does that, I'm not going to switch. If somebody throws out, can you do one Pacific, then I'll, then fine. Then they set the baseline. Then now we're working on Pacific time. It is what it is. So you know where this got me recently?

I'm doing a speech, an online speech for the CFA Society of India, which I didn't realize the time change. And they gave me the time in India. And I said, all right, I can't be that much different. it's 6 a.m. Can't be that much different. Of course it can. I knew it was different, but I didn't, I thought they would take it.

And, yeah, so I got to do it at 6am. So credit to me for being a little riser. I got a question for you. So Carl Kintania posted a chart from S&P. Global Private Equity Dry Powder soared to a record $2.49 trillion around the middle of 2023, a greater than 11% increase over the December 2020 total. Does this number mean anything? Is this, what does this even mean, dry powder?

I know it's a number that gets thrown around. talk about it. So if you, so this is, the reason this rose is because the private equity companies don't want to, didn't want to make any deals when things were bad or companies didn't want to sell, I guess. But this is just the difference between the amount of money that is committed to a fund. So let's say you have a $10 million fund and $3 million has been deployed, $7 million of his dry powder.

But a lot of times they never even call that much. They might call, most funds might call 75% of it because they'll just use distributions from other investments that have worked and you don't even get all the money. to invest in the first place. So when you say it's a number that is factually, maybe directionally correct, but doesn't necessarily have any deeper meaning? Like, it's not predictive. I don't think so.

You can see it's constantly rising over time because there's been more investments in private equity, which makes sense. It's not like it's, yeah, like this big cash in the sidelines thing is going to happen, I think. All right, glad we clear that up. Ben, somebody tweeted, for MCU report, the... the price tag for some of the recent Marvel projects. Shee Hulk, $225 million.

Wakanda Forever, $250 million. Quantumania, $200 million. Guardians of the Galaxy 3, $250 million. Secret Invasion, $212 million. What is happening over at Disney? I mean, my lord. I mean, they just, people always overdue stuff. Marvel is working so well, and they decided,

if a little Marvel's working well, what's good, just flood the space with it and just keep going. And obviously, they reached their breaking point. I think the glass floor broke, right? It's, they've got to pump the brakes. It's not working. It's over. It was a great era.

And I think actually punctuated by Barberheim. It wasn't a great era. Yeah. Well, for me, it was. It was a great era for them. Just financially, it was a great era for them. I feel like movies were, movies were, saved last year when Tom when Top Gun came out and then kind of nothing happened after that.

Now movies are saved because Barbeheimer came out, but is it, are we going to see follow-through? Is it like you said, is it just going to be top heavy where like once a year there's going to be this event of a movie and then it kind of just goes back to normal and low-quality crap? Yeah, and that's exactly right. I don't think that this is necessarily like a, I don't think that Barbenheimer is a turning point. Maybe it is just from the sense that the audience does not want another Marvel. blockbuster. It's over, right? We're good. We've had our fair share. We're full. In fact, we might even be sick. So hopefully we get more exciting projects like this. I mean,

we've got killers of flower, moon. That might be another big one. But I don't think they're going to go back to like funding. Oh, speak. How about this? I was watching, get them to the Greek is on. I don't remember what service is on, but it was the unrated version. Pretty raunchy, much raunchier than I remember. At least, again, it was the unrated version. And it is just such a shame that, like, I was thinking, like, why doesn't Jonah Hill make these movies anymore? And I think I know the answer. First of all, obviously, studios aren't making movies like this, but all these guys got too famous, right? Like, they can't afford.

You can't have a movie with Jonah and Seth Rogen and all the other guys. It's just, it's unaffordable. But how much that was, now that was an era? How much fun was that? Or five or six of those guys would be in the same movie every time? Superband knocked up. Half of those guys have been canceled, too. So there's that.

Yeah, that doesn't help. All right, but Amazon apparently didn't get the memo. They're paying $50 million to The Rock to star in a Christmas movie. Terrible idea. Has the Rock ever had a good movie? Has he been in one good movie? Fast five. But that's one.

It's been a long time. He's never been in like a movie that you go, like that's a very high quality movie. Just that's a, sorry, Bezos, that's a bad. Amazon CEO said, in the case of Prime Video, I'm very bullish on where we're headed. The content continues get better and better. While Prime Video is really good at driving our prime value for our consumer business, I also think we'll have good standard in economics. I got to tell you, we spoke about Prime Video, not really having a lot of success with the original programming. Their library is super strong. They have good movies. They have great movies.

Phenomenal movies. People are going to have to get used to the old movies because the strike. I just want to say, I thought one of these times I'm going to have to cut cable. I know I said I'm in the last person because my bill keeps going up. So it came up again. This is an annual tradition in the Carlson household. My bill went up $70 a month. And I said, this is crazy. So I called it AT&T. I said, listen, you know, listen, there's nothing we can do for you. Okay, let me talk to client retention. That's what they call it. Not canceled department, client retention. You know what, sir? We're going to give you that $70 off a month plus another 10 and allow you to keep HBO stars and showtime. All right. I've heard you negotiate. You're not a good

negotiator. How do I get, how do I get customer service in Grand Rapids? How do I do do that? Because the customer service reps in New York, they stiffed me hard. I'm like, I'm leaving. They're like, sir, you could leave. I'm really doing it. Okay, go ahead. It still works for me. They called my bluff. They gave me the 300 more channels and all the sports channels and the movie channels. How are you not in the database? This, all right, this weasel every year calls us and threatens to cancel. Credit to you. It's still working. I don't know. All right. We're going long. And as Ben mentioned, I am on vacation, so we're going to go quickly here on great quarter guys. Um, so Netflix had a,

Netflix had a good quarter. Uh, I own the stock. Stock got killed. It didn't kill. It was down 10% big deal. Um, was up what it was up. 60% going into this. So not, not a big deal in my estimation. Um, but one thing that I do, oh, they actually started breaking out. This is crazy. Okay. We kicked off the quarter with murder mystery two. Um, 114 million views in its first three months. Close a quarter with, uh, extraction too, which I have yet to see, which I will. Garnered 116 million views in only 31 days. Two movies I will never see in my entire life.

I did watch murder mystery. It was, uh, exactly it was fun. It was fun garbage, garbage fun. Extraction was action garbage, a lot of fun. That's a ton of views. Holy shit. 114 million? How many people saw Oppenheimer?

How many people saw Barbie? I'd love to know how they count these, though, because there's no way that many people watch these movies. I'm sorry. They're playing, they're having fun with numbers here. There's no way it's that high. Think? Does it count if you click on it on an accident and that's a view for 30 seconds?

But here's what I want to mention. The top 10 most popular films on Netflix. Listen, they break it down by hours and views, so make of it what you want. Red Notas, don't look up. The Adam Project, Birdbox, the Gray Man, We Can Be Heroes, Glass Onion, Extraction, the Mother, Spencer Confidential. I guess I've seen half of these and I could say none of them were. really good. I like Glass Onion, but there's no

high-quality movies on here. You know what's interesting? What's not on here? The Irishmen. Yeah, because that movie stunk. Did not stink. A lot of these movies stink. No one finished it. All right, let's move on. We don't need to get to the Elon stuff. Let's do record.

I do it. I do want to get to this personal financing quick. Okay. This is from the Schwab study. Barron wrote about this. 48% of respondents to the surveys said they consider themselves wealthy. These individuals reported an average net worth of $560,000. When respondents were asked more generally, how much money it takes to be wealthy in America,

their responses averaged about $2.2 million, nearly four times what the self-described wealth reported about their own net worth. Footnote, 69% of respondents said a healthy work-life balance is a greater driver of wealth and maximizing earnings, which is nice. I like that. But, Ben, this is an interesting, they call this the wealth paradox. And I feel like this is backwards. Or maybe it is consistent, where you think that you're doing well, but the rest of the world is not. But it's interesting how you can consider yourself wealthy at $560,000 not worth, but think

that wealthy is $2.2 million. That's a weird disconnect, no? Doesn't this also show a little bit of progress that people look at factors outside of money to determine their wealth? However, I do think that. In fact, I don't think this. I know this. That's a luxury.

Right? Like, people that don't have money would never say that. So it's almost like a sampling thing, you know? Yes, it could be. But it's also interesting that people consider themselves wealthy, but if you want to really be wealthy, then you need four times as much as I have. Ben, we spoke last week about how Danny Glover was 41 when he was too old for this shit. I saw a great meme that describes me perfectly.

It's Will Ferrell. in stepbrothers, and the post is when you're over 35 and a week past 9 p.m., call me nighthawk. Now, you're a night owl, but the other day, the other day, we were in bed, and I was up way past my bedtime. I was up at 11 o'clock because Robbins on vacation now. Robbins doesn't work for the summer because she's a guidance counselor. And she started, she wanted to watch Hijack because she's really into it. I said, I can't, what are you nuts?

I should be sleeping. I can't start a show at 11 o'clock. I'm going to fall asleep at two seconds. And she's like, what happened to you? Like, you used to stay up. And I was like, when? When did I stay up? She's like, when we were like in Astoria, I'm like, I was like 25 years old.

I've been, I've been a 10 p.m. at latest bed sleeper for years now. He's calling you out, huh? All right. So you're taking the owl and the bear here, I see? The L on the Bear? The Bear. Oh, yeah, yeah. The bear at 99% continues to this run as the most popular TV series on Rotten Tomatoes.

Oh, that's okay. You know what's interesting, though? What I watched in the airplane, I watched Burt. I like that movie. And I like that movie. And it's basically, you know, the bear. It's also got the guy from the Americans. Except in a movie.

That guy's great. Solid movie. Last week we talked about some Tarantino stuff. I had never seen Jackie Brown. Speaking of the Prime Video Library, it was, I just saw it, it came on to Amazon Prime this month, and I'd never seen it. And it's certainly not one of the best Tarantino movies. But it's his third worst, but still good. It's still good. And for, it's a slowish movie, but it has a good payoff at the end. But it's like, it's almost like deliberate would be the way to describe it. It's like a two and a half hour long movie. And De Niro's in it. And his character isn't even that good in the movie. Like, he's not even that great in the movie as one of the characters, but it still was a good movie. I'm glad I watched it. Uh, so I have my one, once a year, my wife and I go to the movies, basically. So this year, instead of seeing Barbie, which I'm probably, to be honest, I'm never going to see that movie. I'll see Oppenheimer, but I'm going to wait until it comes, and I'm going to give your, your review right now when you see it.

You're going to say, Ben, you have to see it on IMAX. It blew me away. The seat was shaking. Like, you have to see it in the theater. And I'm going to go, no, Michael, I'm going to see it at home. So I'm, I'm nervous. You're a week ahead of time. I'm nervous that I'm not going to like Oppenheimer.

I mean, it's a drama. It's not like a three hour. Three hours is tough, man. I don't, I don't know if I, I don't know, I'm nervous. I've learned a lot about him from reading the biography. He's a very complicated guy. So we went and saw Mission Impossible, which I love. I think Tom Cruise is, I mean, it's kind of like when Tom Brady beat the Falcons in that

comeback game, like that cemented him as the greatest quarterback of all time. Last year with Top Gun, that, like, there's no one ever going to pass Tom Cruise in terms of when we start him. And I feel like this one is like when Brady came back and won another one of the bucks. It's just an awesome action. movie. Yeah. So good.

I mean, it's, it's so good. And finally, justified is when I think my favorite shows from the 2010s that never gets talked about as one of the best shows of the last 10 years. I never saw it. I'll do that during the writer's strike. I think one of the reasons I like it so much is because it feels like one of my novels that I read, where it's just a great, a great mink. And probably because it's based on Elmore Leonard novels, just a great character.

And then now they have a new mini series with him going from Kentucky, Raylan Gibbons, the Timothy Oliphant guy. to Detroit and dealing with people in Detroit. And it's just, I remembered like, oh, my gosh, I loved this show. It was so, so good. Just amazing characters. You kind of have to stick with it a little bit, but great one.

Love Justified. Thank you. Can I ask you a question? Oh, wait. Sorry, one more thing for my mission impossible. My middle age, you talk about me being a night on, you're going to bed early. Here's my middle age movie theater take.

When we had kids, one of the transitions we made was, because we couldn't have the TV loud anymore, because my daughter's room was right by the TV in our old house. we started using subtitles and I noticed since I always watch movies at home now why is there not a subtitle option in the theater this theater this theater has subtitles this one doesn't I think they should have subtitles for movies

and the movie theater movie theaters they can't afford it that's why that's not a bad idea they should though well how about goggles I can I afford it I gotta just hit a button on my TV and it's on there why can't the movie theater afford that

what if you bring goggles and then you could see it you can see the subtitles in your goggles I don't know it's not a terrible idea I love some titles. Ben, before you get out of here, what are your thoughts on men wearing bikinis? I've never given a much thought. I thought you might say that.

Yeah, I don't know. I mean, there's men here in bikinis. And I wanted to wear one when we were in Italy as a gag. Do you mean bikini, like a bikini bottom? Like a banana hammock? What other, what else would I mean? Well, you called it a bikini. I mean, a bikini is a two-piece bathing suit.

You're talking about a speedo. Speedo. I wanted to wear one in Italy because I thought it would be funny and Robin did not think it was funny. But I feel like, I do feel determined that one day I'm going to wear Speedo. Just for the lulls, but again. I could see you wearing warm-up pants down to the pool and ripping with the buttons and ripping them off and having Speedo underneath. But is it, is it comfortable?

I mean, it's like we're in tight, no. Because tidy whiteies aren't comfortable, right? Yeah. No, very uncomfortable. Yeah, I probably wouldn't recommend it. Okay, you get back to vacation. Go up a Miami Vice for us. Animal Spiritspot at Gmail.com.

Don't lose your Maui gyms this week. Thank you. In the ocean. Thank you. All right. Thanks, everyone.