Animal Spirits Podcast - When Will Houses Be Affordable Again? (EP.360)

Episode Date: May 15, 2024

On episode 360 of Animal Spirits, Michael Batnick and Ben Carlson discuss: pullbacks in bull markets, the legend of Jim Simons, if 401(k)s were a mistake, what a car says about its driver, hotel movies vs airplane movies, and much more! This episode is brought to you by YCharts and Fabric by Gerber Life. YCharts is always one step ahead of the game with free resources and this time is no different. Check out their election guide and get 20% off your initial YCharts Professional subscription when you start your free YCharts trial and tell them we sent you (new customers only). Join the thousands of parents who trust Fabric to protect their family. Apply today in just minutes at https://meetfabric.com/spirits. Sign up for The Compound newsletter and never miss out: https://www.thecompoundnews.com/subscribe Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   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 Y Charts. Ben, do you know what's coming in the fall? College football? Yes. Also, an election. And YCharts has an election guide that you can use to know and share with your clients. What happened around previous elections? What happens before? What happens after? Should you really be making any moves based on that and all that sort of good stuff? Also want to mention that our chief operating officer, Nick Majuli, is doing a webinar with them on May. 22nd. So sign up for that. Remember, if you're a listener and a new Y-Charts user, you can get 20% off your initial subscription. Go to Y-charts.com. Link and show notes for the visuals that I've mentioned. I'm a fan of the election stuff because every two years or four years, however often when people pay attention to elections, like we have to remind people the same stuff because those same questions pop up. If this person gets elected, What does it mean? If this party is in control, what does it mean?

And I think that context is very helpful because there's always people who have those questions. So election guide, whitecharts.com. Check it out. Today's animal experience is brought to you by Fabric by Gerber Life. It's the term life insurance. You can get done right here, right now. You could be covered from your couch in under 10 minutes with no health exam required. That's pretty good. Join the thousands of parents who trust Fabric to protect their family and apply today in just minutes. at meetfabric.com slash spirits at meatfabric.com slash spirits.

It's the easiest rule of thumb in all of financial planning, right? Term life insurance, especially for a parent. We had a lot of young parents who follow us. This is easy. Cost effective. Yes. Easy. Manage that risk.

Policy is issued by Western Southern Life Insurance Company, not available in certain states. Prices subject to underwriting and health questions. Remember, check it out. Meetfabric.com slash spirits. Welcome to Animal Spirits. 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 Annal Spirits with Michael and Ben. I'm trying to think of a joke to describe the shirt that you're wearing. It's very fashionable. What is that? Is that like a grease? Is it in the 1970s era? Is it trying to be retro, but I'm not quite sure what era it's calling back to it. It's just a lightweight coat.

It's just a, uh, almost like a members only, but modernized, I guess. You know, you look like TC in that. You look good. Thank you. It's like a TC type type. Is that a cardigan? I wasn't, it's just a lightweight coat. I wasn't planning on fashion talk to start the pod, but,

I think I'm one of the last 10 remaining people who use is Stitch Fix, and I like it because they send me stuff that I wouldn't normally buy on my own. I get a box every two months with five items in it, and I pick those items I want. Thank you. So they send me stuff like this that I actually like, I probably wouldn't have bought it on my own, but I'm going to give it a try since they send it to me.

So what do you do for the stuff you send back to have to go to the post office? That sounds like a pain in the butt. They send you a pre-stamped bag that you just drop in the mail. Stuff you don't want. You go through and you check out. And if you get everything on the list, they give you a 20% discount, which is pretty good. When you say drop in the mail, do you mean that your mailman will come pick it up or do you have to physically go somewhere? Yeah, yeah, in the mail drop.

I have one in my office. Oh, I got it. I got it. Yeah. Well, I'm not one to critique fashion because I'm wearing the Knicks shirt that they give away at the games. I think you've been wearing a Nick shirt for 33 straight days. This is like a pajama. This is actually making me feel good about my recent weight game.

And this says a lot about the state of the average American. This is a, this is a, this is a dress. This thing is huge. Based on your mentions of weight gain on the podcast over the years and months, you have more volatility than the S&P. Is that fair? No, no, it's not fair. I have a range and I, I've got strong support and maybe even stronger resistance.

Credit to me, I don't go above, I don't go above like 182. That's where I'm hovering. So you're like a buffer ETA. I don't think I've ever gotten below. My absolute bottom, my absolute bottom is 169. All right. Upside volatility in the stock market this year? This is, I don't know, I don't know how many people find it surprising.

The S&P is basically up 10% on the year, which, I don't know, halfway through the year seems kind of insane. So here's the last five years, because I want to talk about if this means anything for the next rest of the year. So for the last five years, here's the returns for the S&P, up 31%, up 18%, up 29%, down 18%, up 26%. So call it four out of five years we're up basically 20% or more if we round up the 18. I would sign up for that coming forward. I'm just saying. If we're going to do that, I would sign up for that. So if we, because we always say that a given year is not the average year.

Like you rarely get the average that it would fall on 10. Obviously it could happen. But it would be more likely that we're down five or 10% or up 20% than ending where we are today. So if we're just, I mean, this is almost like a gambler's fallacy kind of thing. that if I just keep petting in black, just looking at the last five years of returns, it would be shocking to me if we had another 20% up year. Ever?

No, no, no, just in this string. It's not impossible, but it would seem improbable. That would be quite a run of gains. Although, again, I always say the 20% up year is one of the most dominant years that there is. We've been on a pretty good run, even with the bare market, is what I'm saying. Doesn't feel that way.

I mean, I guess it does and it doesn't, but if you pulled 100 people in the street, even investment professionals, I don't think they would say, what is this, what is this annualized to over the last five years? What is that? What is that? It's a lot, no? Yes, I don't know. I can look up the annualized returns, but I don't have it in front of me. But to your point, there have been plenty of bumps along the way. I pulled this from Sam Rose, ticker substack. I always, TKR. I can never, I never know the difference. It's just ticker. Okay. So this is from, he did this whole thing. on, like, 18 things that's going on in the stock market. So he said this is from Truest Keith Lerner. Since March 9th, 2009, which is the bottom, which I think we're up, I don't know, like 900% from, which is crazy. We've count 28 previous pullbacks at least 5% for the S&P 500. So tons of setbacks along the way there.

Mm, it's a great chart. Yes, I agree. I usually look more like the 10%, but that's pretty good. Okay, another cool chart. So I think Callum Thomas does his chart review book, you know, and he put this one in there. Looking at when the big gains comes from some of these especially big tech companies. So Airbnb, Shopify, Tesla, Facebook, Google, Amazon, Netflix. And they say out of all these huge, huge winners, 4% of the value is created between years zero and 10.

96% of the value is created after year 10. I don't know that I like this chart. Okay, explain. I'm not, you know, never do math on a show. Never do math in front of the audience. I learned that this week. You saw you have a math problem? No, no, no.

I don't want to get my, I don't want to get incriminate myself. Did you see the, who's that podcast guy, Huberman? Okay. Who did like the probabilities. Yeah, you saw that? Yes. So he taught all content creators a valuable lesson. Never math in front of a camera.

So I'm not going to attempt. I'm not going to fall into that same trap. Fool me once. Okay. Can't unfold again. But I just, I don't like what's going on here. I feel like, I feel like there's some number shenanigans happening. I mean, is this just compound interest?

Yes. So, okay, fine. How about this? 96% of Warren Buffett's wealth was created after his 85th birthday. Does that mean that he wasn't rich when he was 84? That's what I'm talking. That's where I'm going with this. Okay.

That's fair. I get what you're saying that it's kind of fun with numbers. I guess the, I guess one of the things is people always say, like, there's no runway anymore for some of these companies when they come. public, right? And maybe some of these are older stocks that went public earlier, but that I think that was my whole point of looking at it as like, oh, for a lot of these companies, actually, there is a decent runway, right, where they still have room to go even after you think like, oh, that's, okay, all right, that's a fair takeaway. Is that fair? Okay. Okay, so since

2018, the S&P 500. 17. Well, since the end of 2017, 13%. No, I'm going to, I'm sorry. I I apologize. My guess was 17% out of the year. Okay. So it's not, yeah, it's not, knocking the cover off ball, but pretty good. All right. Jim Simon's passed away this past week and a lot of thoughts from people. I feel like he's... Wait, Ben, Ben, Ben, for not all of our listeners know who Jim Simons is. Okay, true. So he, that's true. He's not really, he's in like Warren Buffett's class as an investor, but not well known because he doesn't have the folksy kind of quotes, and he'd never really shared exactly what he did. Greg Zuckerman tried to get there. And you never had tens of thousands of shareholders. True. And so kind of an enigma, but he was a

codebreaker, mathematician, professor who decided to take the math insights and turn them into market beating results. And I actually had someone email me this week saying, I've never heard this Jim Simons before. I read a story. Ben, please tell me that this is fake. There's no way his track record could be real. And I said, no, it is real. But here's the difference. between, you mentioned like compounded returns versus not compounded. So his formulas for beating the market were so good, but there was a limit to the capacity. So after a while, they shut clients out and they just managed money for people who worked at Renaissance Technologies, right?

But then the other thing is, because I saw some people say, if you would have put $1,000 into Renaissance Technologies when it started, you'd have, you know, whatever, $8 billion by the end of it, he returned the profits at. every year, too. So they not only put a cap on how much money could go in, at the end of each year, you couldn't, like, compound that capital because it would be returned to you. So it was, whatever, 60% per year, forever long he did it. But they also returned the money. So I think the point is, even the man who solved the markets, there was an upper bound on, because anytime they tried to, they tried to release some more public facing funds in later years, and they didn't

do nearly as well, obviously. No, they didn't do well at all. Right. Another interesting thing of that book that you mentioned, The Man Who Solved the Market by Greg Zuckerman, one of my biggest takeaways was that Jim Simons was like the architect and the business person. It was really, and I hope I'm not misstating this, it was really Robert Mercer and Peter Brown. It wasn't until they hired those two guys

that the returns really, really took office. Do I remember that right? It did see, I mean, yeah, he was the head man there and pulling all the strings. But he was almost like a investment CEO. He wasn't the coder. He wasn't the guy or the girl doing the algos. And there was, I don't know how many employees he had, 50, whatever, the number 100. But it was all, it was all people outside of the market. It was all computer scientists and engineers and coders. He hired a lot of smart people. And he was, yeah, he was moving things around and putting the teams together. He found anomalies, short term anomalies in the market. They were not doing fundamental research, unless to the extent that the fundamentals would drive some sort of short. short-term, mean variance something or the other. Who the hell is?

And even after reading that book, I still am not quite sure how they did it all. It's easy to say, like, oh, there's all these little momentums, but I still don't quite get it. He was effectively just raking money, just combing the cream off the top or the foam off the top of the drink.

The winning percentage was, what did it say in the book? A little over 50%, 51? And it was just leveraged. And my other thoughts on Simons were a lot of people made jokes about the fact that the guy smoked a two packs of cigarettes a day. And it's almost like a badge of honor. But how much of your life is determined by DNA? You hear these stories all the time.

If this person lived to be 100, what's their secret? And it's like, you know, I ate bacon every day or whatever. And it's like, ah, see? But it literally is. It's baked into the cake when you're born in most cases, I think. A lot of these. Yeah, I don't think Jim Simons, the mathematician would tell you that, smoking two packs of cigarettes was the key to his longevity.

Right. You hear about Buffett. Well, he drinks, he eats McDonald's all the time and Dairy Queen and he drinks, you know, cherry Coke or whatever. It is, yeah, anyway. Maybe I'm thinking about stuff because I'm middle-aged now. Well, Russ and peace, Jim Simons, an absolute. Yeah, if you haven't read that book, we did a, I think we did a podcast with Zuckerman. You guys did a video with him.

It's a really fascinating book because it's unlike any other. Great book. Investor. We started off this podcast talking about. about politics, and the more I think about it, the consumer sentiment data. Speaking of that, then, who are you voting for? I told you a couple years ago, I was at a party, and someone said, all right, this is kind of boring, let's talk politics, and I was like, okay, I'm out.

Thank you. It's been fun. See you later. That's my time. So consumer sentiment data came out last week, and I clicked through to the actual data, and so let's take a look at this stuff. And they have all these different ways they slice and dice it over time. And they've only been doing this since 2017, so it doesn't go back that far.

But they break it out by Republican, Democrat, and Independent. Man, that's depressing, huh? And, yeah, so you look, when Trump was president, the Republican Consumer Senate was way higher, Democrat was way lower, Biden becomes president, Democrat goes up, Republican goes down. I guess you could say, well, just follow the independent line. That's the, you know, take the average of them or something. But it just makes me feel like consumer sentiment data is more and more useless. the further we go along with this kind of stuff. Is that fair?

I wouldn't throw it all out. I would say it's flawed and it's, but, well, I don't know, what is it useful for? Let's put it that way. I guess we've talked about how it's more useful at extremes. When it gets really, really low, it's probably a good sign. When it's really, real high, it's probably flashing warning signals. You know what it's useful for?

Content. It's useful for podcasts. That's about it. Okay. Charts, too. I was on the road this weekend. We went to a soccer game on the other side of the state for my daughter. I got some thoughts on that later.

Got some good feedback for sports parents. And we drove by one of those Carvana things. Remember they did the Carvana? It was like a big glass thing and you could pick your own car. And I thought, yeah, we used to talk about that stock a lot because it was down 98% or something from the highs. And I pulled it up. And from the start of 2023, Carvana stock is up like 2,400. 100%. It's got a huge, huge bounce. So I compared that to Peloton in the same time because

that, like when you're bottom fishing, Carvana, that's the thing. So that's why people still bottom fish. Right? So I compared it to the Peloton just because that seems like it was two stocks that were both down darn near 100%, right? As close as you could get. And Peloton was already down 98%. Then it fell another 50%. Right. But if you look at Carvana, it's got this huge, again, like 2400% return. But look at the last chart I put in here. Look at how much, look at how far it's still off the highs. It's still way, way below those 2021, 2020 highs. But this is the hard, these stocks prove how both the allure and the problem with bottom fishing like this and stocks that have gotten absolutely massacred. Yeah. This also highlights a problem with the

Bessimidder study that we've mentioned in the past. Right. Depends on when you get into these stocks. Yeah. Like, sure, Carvana is a net loser. And not even Carvana specifically, but a lot of companies, you have an opportunity to make or lose a fortune. So, yeah, net, net, if you buy the IPO and you sell forever, most of these are probably not worth holding forever, but who does it? He was on Meb's podcast a couple weeks ago. It was actually very, yeah, he talked about his research and it was, I found it very interesting. He's, yeah. So New York Times had this big profile. Someone emailed this to us. Was a 401k mistake? And they go through this whole thing about how it was just an obscure law that happened in the late 70s, early 80s. Remember,

some guy kind of Ted Bennett found it. And they talked about how in the past it was all pension funds and people were taking care of by their employer. And now people are on their own. And most people, you know, I think 50 to 60 percent of workers have access to a 401K. And the people who don't are just, sorry, you're on your own. You have to save on your own. And then they also talk about how it's kind of driven wealth inequality because they say there's $7 trillion in 401k assets. but most of that goes to the top 10%, right? And the whole... This is bunk.

So that was my feeling, too, because my whole thought process is, regardless of the 401K coming along or not, those corporations were not going to keep offering pensions. Do you think corporations with people living longer, we're going to look up what happened at GM and Ford and all these auto makers and go, yeah, sign us up for that forever.

There's no way these companies were going to continue to give pensions. First of all, this notion that everyone used to have a pension is false. We've spoken about us in the past, right? Yes, it is. It is. I forgot what the data exactly is, but... It got as high as, like, 40-some percent.

But at that, it was more or less giving you social security income. It wasn't like it was offering, like, this lavish retirement that you'd think about. Nobody was taking a vacation on their pension. Not nobody. Don't, come on. You know what I mean. But that was like, that was more of like a one-time deal. Right.

So how many people have generated, created hundreds of thousands, millions of dollars in wealth in their 401K over the last 40 years? I mean, hundreds of thousands, no, millions, right? It's a lot of money. The 401K, I don't want to, I will reject this claim outright. I want to hear the details. Come on. It's a net benefit.

And the bad, my whole thing is the- What's even the bad? Tell me the bad. The bad is just that not everyone has access to one. That's the bad part. So my plan has always been the government needs to offer. If your employer doesn't offer you a 401K, you have access to our Thrift Savings plan, is the government-run plan. It's all index funds. They cost like three basis points. BlackRock

runs it. There should be a retirement plan available for people who don't have them through their employer. That's the thing that I would want to fix is that just not enough people have access to one. But yes, the 401K, I think, has been a net positive for sure, even though would it be a better world if everyone could have a pension or an annuity-like stream of income in retirement? Of course, because most people don't know how to manage the money themselves and have a hard time asking for or finding help. But that doesn't mean the 401K has been, was the problem. 401K stepped in. It was a solution for a large number of people. All right. Moving on to some passive stuff from Balchunis and his team. Passive fund ownership of

the S&P 500 is about 24% today, up from 7% 10 years ago, meaning that on average, an S&P 500 stock has 24% of its shares out owned by index funds. Tom Sarah Fagas and James Seyffard did some incredible work on this topic. I had never seen this before. Let's get to the data. All right. Here is Tom and James. And by this, I'm talking about what impact does passive ownership have on stock prices

and price discovery and all that sort of stuff? Because there's a notion out there that is not super controversial that or just this idea that stocks with a higher ownership, stocks that are heavily owned in the index, perform better, right? Because there's natural buyer of flows. Make sense. Like, intuitively, that seems reasonable. However, S&P 500 stocks with lower passive ownership have outperform peers on average across varying time horizons. The least-owned quintile has beaten the other four over one, three, and five years, while passives' most owned stocks have generated the lowest returns. This appears to... Is this, this isn't just like a market cap ring?

This is something else? This appears to belie the notion that the prices of stocks heavily owned by passive funds are being inflated by strong inflows. Is that interesting? How do they, I don't get how they decide this, though. Like, look, so this is owned? They're breaking down. So these quintiles, these 20% buckets, so 1 through 5, are based on highest passive ownership

in quintile 1. Oh, okay. To lowest passive ownership in quintile 5. And the least-owned stocks, the least-owned stocks by index funds, actually are outperforming. Interesting, right? I wouldn't have thought that. The other thing I was thinking about, I think we talked like a month ago about how there's so much more ownership of S&P 500 funds now, and it makes up a bigger section of the funder world or whatever.

The S&P, when this whole bull market started, made up something like 50% of world market cap, now it's 60 because U.S. has outperformed so much. Now, this is a chicken and the egg thing, but couldn't you say because the U.S. is such a bigger part of the global market gap now, that makes sense that the ownership continues to rise and get higher? Do that make sense? The ownership of what? U.S. index funds. Yes. Just because it's a bigger portion.

Yeah, yeah. Another great chart that I had never seen. So they break it down again by quintiles, but this time based on average P.E. ratio by passive ownership. So the stocks that have the highest passive ownership actually have a lot of, actually have a lot of lower PE at 27 on average versus the lowest pet, the lowest quintile, which is an average P of 34. Why is this interesting? Because oftentimes you hear people say, well, by owning the S&P 500 index, you're de facto overweighing the most expensive names. And I've always said that's not true. And it's not true. Yeah. That's just not true. Apple was the biggest stock in

2014 when, remember the back out the cash phase of Apple? It was trading. There's a value stock, remember? Yeah. So that's just, that's just nonsense. So, Credit to them. Great stuff. That is interesting. Okay. Whenever we talk about anything related to inflation, most of the time it comes like standard of living and where you live. Is this income good or not, right? What do we talk about a $400,000 income, $250, whatever it is? People always come back with, yeah, but it depends where you live. You live in California or New York. It matters. So I saw this. I think Nick McEulie posted this on his website. It's U.S. cost of living. They break it out by different segments. And I mean, it kind of, it's obvious. Once you look at

the data that, of course, it's way more expensive to live in the northeast and then the west, right, on the coasts. That's where all the Colossilitis are, that makes sense, right? Coles elitis. But I think that the, it's surprising how much, how many places have a standard of living that is relatively inexpensive, I guess, by these standards, right? Like the 80% of the country, it looks like. Well, not to depict. It's not a standard of living. It's a cost of living. Those are different things. You could have a low cost of living in a high standard. Well, sorry, a lot of people use those terms interchangeably.

Okay. You're splitting hairs here, sir. But I'm just saying, look at, but look at the, I'm just saying it's, I guess it's when you look at it this way, however they broke this down, there is way more affordable space here. And a lot of people would say, well, of course, it's affordable for a reason. There's nothing else to do there. That's what, that's what closely just like to say.

That's not what I would say. That's not what I would say. Don't put words in my mouth. Anyway, this is kind of obvious data, but when you look at it presented this way, I think it's very interesting. And if you look at how many areas where there are lower cost of living, I guess if you're a young person who is out of the housing market, move to the blue. You know, no, it's interesting.

Which state do you think? Now, I pride myself in geography. I know all these states just by the outlined, not to brag. which state, although the state that I'm thinking of, this is a tough test, which state has the least amount of high-cost areas? Looks like it's the one above Louisiana, Arkansas, now? You just talked about your geographic prowess, then you say the one above Louisiana.

Sir, it's a joke. Arkansas. That is Arkansas, right? Yeah, I'd say the Arkansas. So you're not so sure. You're not so sure. No, I'm looking at it. I'm saying the Arkansas, Missouri. Yeah, that corridor probably has...

What's above Missouri? Is that Iowa? Yes, that's Iowa. So Iowa's pretty... I mean, Michigan works pretty darn affordable, too. That corridor. It's just Grand Rapids in Detroit. Not bad.

Which is... What's the... What's the elitist flyover state? It's got to be Illinois now. No, Colorado. Oh, I don't consider that flyover. I guess I'm talking Midwest. Okay.

Yeah, I guess it would be Illinois. Minnesota, too. Although, I got to be honest. I got to be honest. Credit to me, very transparent. The two states that are back to back in between Louisiana and Florida. Hold on.

Oh, I know what it is, but I don't know which one is which. Once Mississippi, one's Alabama. Mississippi's to the left. Yes. It goes Mississippi, Alabama, Georgia. I only know that because I watch SEC football. Okay. All right, moving on.

We got an email. Last week we spoke about lumber prices. You said you didn't want to get dunked on for math, and you're just going to get dunked on for geography now. I held my ground. I said I was good at geography and I proved it. All right. Regarding lumber prices have returned to pre-pandemic levels,

that's been the case for most lumber items since the first quarter of 2023. We track wholesale material cost to build a 2,200 square foot house in central Florida. And as you could see below, we're only 15% off the peak in January. All right, whatever. Anyway, the point of this email is, look at this chart that this person included. This is the Romack Whole House Commodity Index. Like how much it costs to build a house essentially? Yeah, that's a hell of a chart.

Great chart. So what's that peak? I can't say, 59,000, 58,000? Yeah, 60,000 basically. All right, and now it's 51. So even including other factors, it's still well off the highs. Yeah, counterpoint, it's still way above pre-pendentic levels, though, right? That's also true, too.

So it's way above trend. So I guess we can give the home builders a little bit of a pass. for not completely lowering their prices? Ben, one unfortunate reality of the internet and especially social media is that bullshit travels very fast. And unfortunately, deleting a tweet,

dunking on a tweet, well, maybe dunking on a tweet sometimes works, but correcting a tweet, you can't undo it because people are so desperate for bad news, especially if the bad news is at the government level The outrage is always Cause it's way more of a problem than the rebuttal

Yeah So the Cobes how do you pronounce this Cobesi? Cobesi, what is this? The Kobeesi letter What's that? I always say Kobayashi just from

Uspects Oh is that what this is Is that how you spell that? No Okay Anyhow Anyhow they tweeted And this went

Spread like a wildfire This is unusual The US BLS has announced That coffee prices will no longer be factored into CPI inflation data. In fact, all right, whatever. So people got really mad at that.

Oh, my God. Coffee prices are up 38% of the last two years, and now the government is not showing them to you anymore. Have you been to Starbucks lately? Right, right. Yes. And this tweet, which was deleted, in fairness, I don't know if they issued an apology,

so maybe they did. Maybe they did. I don't know. But they did delete the tweet, which is good, not a lot of people don't even do that. It's not true. It's literally not true.

Coffee is still very much in the CPI calculation. If my understanding of this is correctly, it is correct. What they did was they removed like the price level for whatever reason. But coffee is still very much a basket in the CPI calculation. Kylea Scanlan came in here and said, no, you're wrong. It's still in there. Yeah. And a lot of other people did too.

But it doesn't matter. It's just the, the, the, the, the, the, the, the, the, the, the, Do you see what they're doing? That plays well these days. So I was going to say this for my recommendations, but on my flight here, I'm in a hotel room and a flyover state. And I watched American fiction on the way down here.

Jeffrey Wright is in it. And very good movie. I'm not sure it's a Michael movie. It's like part satire, but also part family drama and comedy. I really liked it. Yeah, probably not a Michael movie. I do like Jeffrey Wright.

I said buy him on an airplane once. Nice guy. I think I might have caught a photo in Tennessee. The view of my wife. Can't remember who. What do you mean, nice guy? You didn't talk to him.

I seemed like a nice guy on the plane. But the whole point of the movie is like he's this intellectual professor and all his intellectual stuff just has no traction whatsoever, trying to be an author. And then he writes this thing that is more or less satire because he thinks that It's dumbed down for the masses, and it takes off like wildfire. And he's saying, no, no, no, I don't want this thing to take off. I wrote it as a joke.

And the whole thing is interesting in terms of, like, the lowest comedy nominator and what actually sells these days versus what doesn't. Very good movie. I gave it two thumbs up from Ben's movie rankings. Yeah, so should I see that movie? Maybe it's an airplane movie for me. It was a very good airplane movie. I enjoyed it. I was thinking, probably not a Michael movie.

but it was nominated for best picture it was that kind of movie i it was it was just very the screenplay i think it's by a new uh new writer too who wrote the movie and you know i got to be honest you are you have postal elitist tasted movies i'm a flyover state guy that is true you have you have definite flyover state but like flyover states where they buried bodies in a basement kind of movie taste but yeah i do have colse elitist movie that that's a fair take american fiction very good uh all right j p morgan has a great post out on real estate, and they ask, when will homes be affordable again? So they say, how long might it take to restore average levels of affordability based on historical ratios of home prices to income and factoring in mortgage rates if incomes were to keep

growing at their recent pace and mortgage rates didn't decline, and home values stayed at all-time highs? So assuming what I just said, they say about three and a half years. I bet a lot of people would not believe you. I don't like to be Ron Burgundy. Yeah, it would take a lot longer. So this is just, so let's say home prices stagnate for a couple years. Incomes keep growing that three and a half years, and I bet for most times in history that would be a long time frame to wait, right?

Yes. Yeah. So the point is in this is the whole point of real estate in the first place for a lot of people. And this is not financial advice, but one of the things that someone told me when I was buying a house was we were very unhappy with the houses we were looking at. And he said, go up from price and just stay there longer. You'll grow into the payment. And this is that I'm like, uh, we're reaching a little bit here, though. And they don't reach for housing costs because that's your highest cost, right? And we did reach a little bit. And guess what? Your income grows and

you grow into that payment. So this is, that's like the barn house, the modern farmhouse or the previous one? This is our first house. Not a modern farm house. But that's terrible personal finance advice to people who who can't handle reaching for a payment, but that is true for most people. They grow into their fixed payment over time. You just went somebody's life. Congratulations.

Probably, but that's how these things work, though. That's the beauty of a fixed rate mortgage. Right? The hope is that that payment stays exactly, it's the Matthew McConaughey meme. That payment stays the same, right? That's good. Anyway,

it's, so three and four, so that, I wouldn't, if you would have said, Ben, guess when it'll be? So I say they have their chart in here. I would have never guessed that. Well, we talk housing as if it's like not a very much a local thing. So they show, they break this down by city. And who's the most screwed?

Oof, Miami. All right. So Miami, this is never happening. 2034. You got to go to a decade. Oh, okay. So based on now, when is it going to be, when is that going to be back into and it's going to be a long time?

For my neighbors to the north, Boston. All right. By the third quarter of 2027, set your watch for it. Minneapolis is another one. So it says Cleveland to Detroit already restored. Back in line with historical norms. Just kidding. I kid the Midwesterners. All right. They show new construction. I didn't know the stat. New housing unit completions make up just 1% of the nation's housing stock annually. Again, we know we're not building enough houses, right? We know. But they showed that new construction is happening mainly in cities with lower cost. So that's a good thing, right? That makes sense. And I'm sure a lot of that has to do with some of these places that it's hard to build and the regulations and rules make it harder. Those are the costs that are part of it as well. They're building where they can, right?

Lastly, J.P. Morgan's takeaway is if you are looking to buy a house in the United States, don't wait for or expect a home price crash. And we've been saying that for a while. Yes. Before prices really took off, we were saying that. Like, if you're, because remember, prices initially took off in late 2020. And people are already then asking us, do you think we should wait? We had a lot of those. Right. Those prices look darn good right now in comparison. Speaking of, Axios had a piece on home equity. And so they say a record 11 trillion is tapable. So that's not the total. So they say, meaning you can borrow against them, but still maintaining 20% equity in the house, which is kind of what the banks want you to do. They want you to have a loan

to value ratio of 80% or whatever, right? So you keep that 20% buffer. They say 48 million folks have access to tapable equity with an average of $206,000 per mortgage holder. So they say it's almost $17 trillion. And I look, the total value of home equity in this country is $32 trillion, which means there's $15 trillion in equity for people have no mortgage, right? Because they're talking about people who still have a mortgage. This is just people who have mortgage properties have $17 trillion. People without them, it means people without a mortgage have, whatever, $15 trillion in equity sitting there. That is a ton of money.

It's a lot of cash. If I was skilled, if I was a skilled person, I would be starting as many home renovation businesses as I can right now. We got a quote a couple weeks ago for, like, hey, what if we wanted to take our white deck railing and make it the wire stuff, you know? So it's like it makes the view a little better, right? Just an ungodly quote. And the guy's like, we're like 14 weeks out.

And I think the quote was like, we're basically going to charge you whatever we can. And if you say no, so what, we have other business coming in. It was that kind of quote where I kind of said, all right, I'm good. You know, don't need it. It was way too high. Wow. Yeah.

And I kind of did the, I, you know, did the channel check. And I said, well, how is business? And he said, oh, it's crazy. We're crazy, crazy, crazy busy. Book Club on Monday. Gym on Tuesday. Date night on Wednesday. Out on the town on Thursday.

Woo! Quiet night in on Friday. It's good to have a routine. And it's good for your eyes, too. Because with regular comprehensive eye exams at Specsavers, you'll know just how healthy they are. Visit Spexavers.cavers.cai to book your next eye exam. Eye exams provided by independent optometrists.

Okay, you talked about the outrage thing. Here's another one I saw going around. Seriously underwater homes, mortgages tick up across the U.S., and a lot of people shared this headline. It was from Bloomberg. We're roughly one. Oh, yeah? Oh, yeah? Sorry. What a seriously other water bead? So they say one in 37 homes are now considered seriously underwater in the U.S., and that share is much higher across southern states. And that means that they have loan balances

that are 25% more than their market value, which sounds bad on the surface, right? That was the headline, like 137. And then you read the story a little more and you say, okay, that's actually 2.7% of homes, which stinks for those people. I don't know, it's people who bought a house in Austin maybe and prices fell there. I'd be guessing that would be part of it, those kind of places. And while the share is ticking up, it remains much lower than before the pandemic when the rate was twice as high. Boom.

So kind of the headline was, oh, geez, this is scary. The meat of the article, if you read past the headline, was actually, yeah, it's going up a little for these, and that stinks for people who are in that situation, but it's way below average and it's still not that bad. Did you see that, did you say that it's half what it was pre-pandemic? Yes. Okay. And then, I mean, I guess the reason for that article is, well, we all know.

I mean, you know, don't hate the player, hate the game. But the, and then we're going to have another home crash 2.0, right? It's the GFC a lot more again. The way that numbers are presented can make, because one out of 37 sounds way worse than 2.7%, doesn't it? Exact same thing. Yeah. Fair? All right.

One more email. Oh, this is interesting. On subsidizing purchases. Ben has been discussing rate buy downs by home builders recently, and I wanted to add some commentary about potential downsides. I believe Ben thinks these are solely a subsidy. I didn't write this, Ben. I didn't write this. I believe Ben thinks these are solely a subsidy to the home buyer that makes ownership more affordable.

This may be partially true, but they are also a marketing scam to some extent as well. Oh, you have my curiosity. I can see that. If you read the fine print in any of these ads, it says something important that you have to finance through the builder's preferred lender, which happens to be owned 49%

by the builder. These lenders can tack on five figures plus of extra closing costs and a mortgage relative to lenders that are not affiliated with the builder. It is essentially as if you are buying down your own rate, not getting a great deal. If someone doesn't look at the fine print

close to your comparison, shop their mortgage, they probably won't understand this. All right, credit through this person. So you're paying more in fees because of it. I get that. That makes sense.

Put a few words in my mouth, but I'm a... Okay. That's a fair assessment. Biden tweeted something that got ratioed all the way into the Stone Age. My dad always used to say that the way you build wealth is by building equity in your home. My housing plan would help Americans achieve home ownership by giving households $400 a month for two years when they buy their first home. the reason why he got destroyed as not necessarily a political thing, but like, I mean,

we know what happens when you subsidize areas of the market. Prices go up. And I bet it wouldn't have as much ridicule if he would have said, we're giving first-time homebuyers a 3% mortgage. Maybe you would have. I still think that's kind of fair for young people. But here's the thing. I think the thing that makes most people so mad about the housing situation is it literally

doesn't matter what we do right now. There's nothing that could be done. to fix the housing market in the short term. There's nothing that can be done. And I think that's like no matter what, this obviously, you're right. It's if you just subsidize the demand part of it, we know it's going to have and the prices are going to go up probably. But there are no short term fixes for this.

None. That's like putting on like spraying oil to like protect yourself from the sun. Right. But that's the thing is the problem is there are very angry people with the housing. market right now, and there's no good fixes for them, or that, the housing market, right? Even if they said, we're going to subsidize home builders, and the government's going to cover their loans, right? So if home builders want to build more homes, have at it, we'll cover the loans. That's what they did in the 50s, right? That's why we got this big boom time in the 50s

in the middle class and people coming home for the war. If they did that, it would still take years to filter through and for the home builders to get it up enough capacity to do that and get enough construction workers and find it of land. There's no overnight fix. Redfin has a chart showing the percentage of prices of homes with a price drop. And this looks different. So there's a seasonality to this.

But in 2024, as of May 5th, 6.2% of listings had a price drop. That is way higher than it was at this time, either last year or, I mean, obviously over the last couple of years. Boy, that number still seems very low, though, doesn't it? What's that? 6% of houses have seen a price drop that just still seems low. Well, it does seem low, especially when you adjust for the fact that the prices are so, the starting prices are outrageously high.

You're right. Yes. Yeah, maybe this is not, maybe it's not like great. I think a lot of this stuff is the trends are getting back there, but we're so far from normal that it's going to take a long, long time. All right, surveys are bullshit part 360. By the way, Animal Spirits, Daniel just mentioned to us, this is our 360th episode. Does it feel light, or does it feel like a lot?

It seems like a lot. Seems like a lot. That's a lot. I've been doing this for seven years almost? Don't do math on camera. Don't do math on camera. We started November 2017, I believe. Okay.

That's a long time. I'm sure I talk more with you than I talk with my wife during the week. And we live together. Oh, yeah, of course. Of course, of course. Eric Soda tweeted A record 63% of U.S. workers are satisfied with their jobs. That's the highest level ever for the survey,

which goes back to 1987. Take a look at the spike upward after the pandemic. Yeah, how is this possible? How is this possible? I don't know. How could everything be bad, but everyone's satisfied with their job? Well, we have the, I'm fine, but everything else has gone to shit. That's the...

Oh, you know what? You know what? That's exactly right. That's what it is. This is the epitome of, I'm fine, the world that's going to hell. Like, if they asked, if they did a survey, the percentage of U.S. workers who you think are satisfied with their job, it would be, it would be 20%. I saw on a couple weeks ago that was, are you satisfied with the education system in this

country? And everyone said, no, of course not. Are you satisfied with your own child's education? Yes, of course I am. It's the same thing with politicians, right? Congress is a bunch of corrupt idiots. And then it's like, do you like your congressman? Oh, yeah, of course I do.

Also, if Eric lived in the Midwest, his name would not be Eric Soda. It'd be Eric Pop. Yeah. That was too easy. One more survey. This is from Axios. Felix Salmon tweeted this. A share of Americans who think they'll work past 62 was almost 60% in 2016, and now it's down to 46%.

How do you square this with the fact that people always say everyone's so ill-prepared for retirement? People are living longer. They're worried about their retirement, but they also want to retire early. I think part of this is, remember those other surveys where you said, like, how much do you need to retire? And people, that's $1.5 million. And the amount of people whoever get that high is very low. Do you think most people, when they reach old age, just go, you know what? I don't need as much as I thought I did.

I would rather retire early than let it compound for five more years and keep working and making more money. Screw it. Yeah. Yep. I think that's going to happen to it. We've already seen it to a ton of baby boomers following COVID. Can you see millennials really want to work till they're 70? Do you think we're going to work until our 70?

I have no idea. We're going to be at 47,000 podcasts. I told us to Bill Sweetie last week. Ask me something now in my feelings in 20 years will be so different. We'll have no idea. There'll be Michael and Ben holograms coming into everyone's living room for a podcast. Yeah. Right?

We'll just be sitting there. You and your oversized Nick's shirt, me and my stitch fix. I wonder if we could de-h ourselves in the future so we don't look like a couple of old guys. Add some hair for you. Yeah, I like it. Give me like six more inches, so I'm taller. All right, Ben.

I wrote a post. I've been thinking about cars a lot lately. We've been talking about cars a lot. I like your title. What a car says about its driver. Yeah, so I remember in high school, one of my friends had a cool car. And this was a friend whose parents got him everything.

And I remember them saying, you are what you drive. And I was offended as the wrong word. I was just like, really? Really? Who do you think is more hated? You mentioned last week the old guy driving the nice car, the convertible a range rover, or the young kid in high school who drives like a BMW? Who do you think is more despised by their peers?

Probably the high school kid, right? The young person. God, yeah. Oh, because at that point, you have no emotional wherewithal to, like, control your jealousy, I think. Yes, true. Right? Okay. But just like, you know, what is the right age to buy a cool car?

I don't know. A part of me thinks that, like, I would really, really enjoy having like a really sweet ride right now. Another part of me is like, well, I don't want to be that person. Like, I don't want to be that person. So I read your post. But I also like driving nice, but what's wrong with driving a nice car? So I'm like twisted myself into a pretzel. I read your post and I sent you a text message and I said, just buy a rangeover.

Right? Because it sounds like you're having an internal argument with yourself here. Oh, I totally am. I told him. But this is the thing about cars. They're so interesting because they're like a socially acceptable status symbol. But like in certain occasions, right? Like if a person's an asshole and they drive a nice car, you're like, what a fucking asshole, right?

But if you have a friend who's like a great dude and he drives a nice car, are you judging that person? You're like, no, right? And you know that you're not overextending yourself because you save money and you invest and you all these things. So I think one of the hard parts about living in the age we live in, it's never been easier to get feedback and opinions from everyone. People are constantly being judged.

Like, people are being recorded without their own knowledge of stuff that they do, right? And so I think the feedback and judgment, people probably worry about it more for themselves than anyone. Like, isn't it so easy you find with little kids to judge other parents? I made some comment last week. My wife is like, you know what? every parent makes decisions based on their own thought process and how they want to raise kids, and I'm not going to judge anyone. Yeah, I mean, yeah, it's very noble.

But it is. And I'm like, oh, I'm probably still going to judge people secretly. But I think with the car thing, maybe this is just me getting to middle age. I'm past the point of caring what other people think about me. I think that's what kids have really helped me get to that point is like, I just, I don't have any of that stuff. stuff that I had when I was younger where I really, really cared, and I really wanted to be liked, and I really cared what other people think. So I'm saying is, you're mature.

I'm not. Even though I, well, no, even though I always get on people for cars, like, I know that your financial situation, you're in a good place. And if you want to buy a nice car, buy a nice car, and who cares what everyone thinks? I'm giving you permission as the car guy. You know what? Would I love to drive a Range Rover? Although I don't think I could, that's a lot of money.

I lucked how much it costs after you text me in that. It's a lot of money. I told you to get a Ravion. I mean, Orythian is the millennial rangerover. How about this? Those are cool. Maybe I'm lying to myself into the audience right now, but I'm just thinking out loud. Would I drive a rangerover if everybody else somehow can magically see a Toyota Highlander?

So like the shallow how? Yeah. Like, I think I would have really much, I think I would very much enjoy driving that car. Although after my experience with Audi, I feel like aren't rangerover is known to break down to? That's true. Just get something that will never die on you. you. So I think it's complicated, but I do agree with the sentiment that do what you want, right? Left short. Like I said, it's easier than ever to judge people, and people do

probably judge more now than they ever. Like, there was never, if you like, there's a scoreboard for everything these days that didn't exist in the past. There was no review sites, right? Like, this is, what stars is this? Where should I, all that stuff, nothing existed like that. And now we rank everything. Yeah. Everything's in judgment. All right. Good news in the car front.

The Mannheim used car index drawdown is deep. 23%. Deepest ever on record. The funny thing is that your Audi situation is like counteracting this. Because you're the one with the drawdown. I am destroyed. I'm deep, deep underwater. But this is good news.

Not bad. We'll take it. All right. getting back to like the bad news spreads like a wildfire and don't tell me good news. I don't want to hear that shit. The world sucks. So Stephen Ratner tweeted the murder rate is down 19% in 2024. Some major cities like San Francisco, Baltimore and Philadelphia have seen much larger

decreases. Chris Hayes retweeted that, quote tweeted that and said, if these numbers were the opposite, if homicides were up 19% so far this year, it would be the number one or at least top through domestic story. And that is 100% facts, right? Yeah. I wonder why it's down so much. Do you think people just got way more annoyed during the pandemic? I was like, ah, whatever. I'm going to kill someone. I don't know. Sorry. But I'm just wondering why did the numbers, because the numbers obviously shut up and then now they came back down. I'm sure there's all sorts of factors that are way beyond the scope of this. So I said, I've said that I've been having 90s nostalgia lately.

and I've been seeing all these posts on Twitter showing like, here's a video of what high school was like for people in the late 90s. And I'm biased because I grew up then. But it really was like the last innocent time in this world. It was pre-9-11. It was pre-great financial crisis. It was pre-social media. Internet was just getting started.

I graduated high school. It was pre-porn on demand. Remember you had to like wait like 37 hours to download anything? I still remember the first time. my friend in college got a flip phone with a camera on it. And we would always go out to the bars and parties and such. And I'd say, why would I want photographic evidence of what we're going to do tonight? I don't want to remember this. Whatever we're doing, we're 21. Simpler times. Yes. And so the 90s were such as, and obviously people were still depressed then.

And so this piece from a Gen Z person, I thought, captured this really well. It's a little dramatic, but I think it's interesting. Wait, before you be, can just say one more thing about the 90s? If you look at, the Limp Biscuit music's to the world, it didn't seem like teenagers were having a great time. Maybe that's like a, I don't know if I'm overplaying the relevance of a Limp Biscuit, but there was definitely like a, that was big. Here's the thing that was so, and I look back at myself and I realize how naive I was about everything going out.

Like, I just, I was so ill-informed when I was, especially in like high school and getting into college, I knew nothing. I didn't pay attention to anything. And honestly, it allowed me to just to be young and not care. you can't not pay attention today. It's impossible. So that aspect of what you just hit on is, that's a better world.

When kids could just be kids, that's a better world. You didn't have to have an opinion about what was going on in the world, and I favor this, I don't favor, I'm against this, you didn't have to have any of that. So this piece, it comes from a subject called after Babel. Gen Z were given phones and tablets

so early that we barely remember life before them. Most of us never knew falling in love without swiping in subscription models. We never knew having a first kiss without having watching Pornhub first. We never knew flirting in romance before it became sending DMs or reacting to Snapchat stories with a flame emojis. We never knew friendship before it became keeping up on a snap streak or using each other like props to look popular on Instagram. And freedom, we never felt freedom to grow up clumsily, to be young and dumb to make stupid mistakes without fear of being posted online, or the freedom to be unavailable did disconnect for a while without the pressure of red receipts and last active statuses.

We never knew a childhood spent chasing experiences and risks and independence instead of chasing stupid likes on a screen. screen, never knew life without documenting and marketing and obsessing, obsessively analyzing it as we went. So please, next time you cringe at Gen Z for not coping, for not feeling cut out for this world, remember how painful it is to think that the good times are over, then imagine how much more painful it would be to realize you never knew them. Again, a little dramatic, but also kind of, it makes sense to me, that they're just so much more self-aware. And it really, I just, I love the fact that I got to grow up in a time where I didn't have to be so worried about that all the time and being like in the know yeah yeah it's hard enough being a kid yeah so i am

a lot of people are like what is wrong with these kids it's like they they didn't have a chance is the way that i look at it all right oh an update on my ticket broker i don't have we spoke about this last week did we you mentioned that you got a ticket broker okay so so do you have five brokers in your life now the panic buy listen i have an insurance broker I have an insurance broker, and I used a car broker, okay, okay? Insurance broker, car broker, ticket broker, okay. I paid $6.80 in my panic for these four tickets, which means to get my money back on the website that I will not mention here, I would have had to listen for $800, and then

they would have had to listen for $900 in order for me to get my money back. my ticket broker, $750, boom. And guess what? No responsibility. No pricing, wondering, delivering. What do you think about that? Not bad. Worth the money, whatever you paid.

I paid nothing. He netted me $7.50. That's what I'm saying. He netted me $70 profit per ticket. They know what they're doing. Why would you not use a broker? I don't understand. I mean, most people don't get into this problem of buying and selling tickets all the time.

Just in light. I'm using brokers in general, services, service providers. You could call them a broker. I call them service providers. All right, Ben, we got it. This is a good email from Andrew. He said, he has a new term, hydration, which he says is inflation plus the hydra mythical creature.

He calls it hydration. Hydration is this. Replacing one purchase pattern due to inflation with another equally inflated purchase pattern. Michael experienced hydration after hiring a ticket broker to avoid high stub-up fees. I have been in, that's pretty good. I've been an insurance agent for 26 years, started when I was 19. The auto insurance compensation is anywhere from 8 to 10% of the premium. Okay. Now, the question of whether one pays more using a broker or doing direct, for example, our office represents, I won't say the name of the insurance company, and we usually

are more competitive than direct. Oh, how about? How about that? How about that? Wholesale versus retail. The main reason is why we are usually more competitive, as per my marketing rep, direct business is, direct business pays for all the advertising. And number two, more fraud done online when insurance yourself compared to the office channel. So I'm not even, not even paying more necessarily. You're selling yourself on a broker. I see. Okay. Scale efficiencies. Okay. You know, you ever thought to yourself like, I guess Netflix is a good example. Like when Netflix is doing streaming, you're like,

oh, just wait until this company gets into it or why wouldn't Google just do it or why wouldn't Amazon just do that? You know what I mean? Yes. And I think when we do that, we're giving some of the other companies either too much credit

or just not understanding that companies don't just do something because you think they should. If it's not their core business, and I'm generalizing here, they're probably not going to do it. And I thought about this, I thought about this when I was, on the Maps app, Google Maps.

And Google Maps, Google owns Ways too, right? We're a Ways family. Yeah, why is there Google Maps anyways? But anyway, be that as a matter. So I'm on Google Maps, and the keyboard, you have to press the number to switch the keyboard from letters to numbers. And I'm like, well, that's annoying because I'm like,

you know, I'm pulled over at a stop line. I probably shouldn't be texting anyway. It's annoying. With Ways, they've got the, numbers up top and the letters down below. Now, both of these apps are owned by the same company. There's never a situation where you're putting in an address on Google Maps where you don't have to put in a number, ever, right? You need a number. Why the F don't they have the same format as Waze, which is clearly a million times superior? So anytime you're thinking of investing in

something, be it public or private, you're like, ah, well, Amazon is I just going to do that. Yeah, Google's just do that. No, not necessarily. In fact, that's probably been a very bullish, in hindsight, that's been a bullish catalyst to invest in a company that I can't, I'm not going to invest in them because why wouldn't that company just eat their lunch? It doesn't work that way. You should be entering the address through voice.

That's your solution. Well, that is a good solution. Ben, I was in the airport last week, and I saw something that I hadn't seen in years, perhaps decades. I don't even know what they're called anymore. The genes with the loop... For a hammer? Oh, like construction jeans, right?

Yeah, I guess so. Speaking of the 90s, that was a late 90s or early 2000s trend. Yeah, if you could imagine that for younger listeners, that was a fat. That was a big big thing. Plus you had like the pockets on the side with like the triangle pocket. Oh, that's right. They were called carpenter jeans. That's right.

Carpenter jeans, that's it, not construction. Yeah. Okay, I mentioned, so we talked about the housing shortage. There's a bigger shortage in America than the housing shortage. I'll tell you what it is. Parking spots for youth sports events. So we went to a soccer tournament in Detroit area for my daughter, travel soccer teams, and we go to this place in the middle of nowhere, there's 20 soccer fields.

And on one side of the road is a soccer tournament. On the other side of the road is a baseball tournament. And there was so many cars going in and out that they had to have police there to like shepherd people in. Right? You stop. Nope, you go. You stop, you go. And these soccer fields and baseball fields were made before there was large SUVs, the Suburban's and the Yukons of the world and trucks, and they were made before so many people went to youth sporting events.

Like, growing up, you never had your grandparents go to sporting events, right? Now everyone has to go watch the kid play sports. There's not a parking spots anymore. We had to park like three miles away. So true. There's a bigger shortage of youth parking spots than there are houses.

That's what I'll say. So true. Ben, did you know that wine is getting destroyed? How so? Look at this chart. The wine sold in the U.S. in millions of cases. That is a pretty significant drawdown now. Look at how much it added, though.

That's a pretty good run-up. Does this need to be a log chart for it to make sense? I don't know. Chart crime? I still keep me going. You're a wine guy? We talk about this. I still like drinking wine.

I know the thing to do now for a lot of people is to talk about how you don't drink anymore. More power tory, if that's you? I still enjoy drinking. I'm sorry. It's... Oh, I love it. Sorry, not sorry. I don't...

I know that's a thing people always say, like, why would you drink in 2024? It makes you feel crappy and... It is. That's the only thing. Drinking is still fun. It puts a smile on my face. I can't... And, oh, I feel terrible the next day.

Well, yeah, that's the price for feeling great the night before. Fair trade. Diversification. All right, recommendations. I already did... Okay, you do yours first. All right, Ben, it's Fannie Pack season. I saw this.

You sent a picture of... of you've been people from Chicago and you were wearing a fanny pack. What's going on? I'll tell you what's going on. So when I am, well, I'm in sweatpants right now. When you're wearing sweatpants,

as I do in the transition between spring and summer, right? If it's 65 degrees, if it's 58 to 62, which is where we are today, I wear a joggers, right? Joggers, yeah.

Yeah. So if you find yourself in a situation, where you're in another city, like I was in Chicago, great city, by the way. And you've got a portable phone charger, maybe a pack of gum, a cell phone, your wallet, and a sunglasses case. What are you supposed to do? You need a man purse.

I will give it to you that having the big cell phone in your pocket wearing joggers looks weird. It doesn't look right. Yeah. So I got a fanny pack, and it's coming with me. I'm bringing it everywhere I go. Middle-aged Michael. Okay. Somebody emailed us.

How to know if Michael's horror movie recommendations is trash? Oh, wait. I just assumed me all are. Because last week I recommended late night with the devil. I didn't recommend. I spoke about it, yeah. Hey, guys, just a quick note on today's horror movie discussion. A couple of the movies Michael mentioned today were produced by A-24.

Talk to Me and Hereditary. 824 also released Midsommar and Green Room. This is a great movie. And The Witch, didn't care for The Witch. And numerous others. think a fair rule of thumb would be if A24 made it, it's probably good. So Michael recommends one of their movies. It's likely not one of his awful picks. Great email. Definitely true. 824 is the best in the biz. Ben, you slacked me and John Ben, Duncan, Sean. This sounds like a movie

Michael cooked up using AI. At the movie, it's a tweet from variety. Bone Tomahawk director is set to reunite with his drag to cost concrete and brawl and cell block 99 star Vince Vaughan and Oscar winner Adrian Brody for new crime thriller. Quote, this is the Kudegra, the bookie and the bruiser, and I am in. Where do I sign up?

It really does sound like you put Jet GPT. Here's my movie history. Make a movie I'm going to like. And it's going to gross like $60,000 at the box office. That's right. All right. I did see another bad horror movie that I forgot to mention because it was so bad that it was just completely Not memorable at all.

Night Swim, remember the trailers past, I don't know, six months ago? It was as bad as it looked. It was worse. So I'll tell you this. If you see that on streaming, just avoid keep moving. You're welcome. I watched, I mentioned this on TCAF, but on my three and a half hour delay to Chicago, I knocked out a movie, The Beekeeper.

That's how you do airplay movies. It's 90 minutes of Statham kicking ass. It's completely ridiculous. course they're leaning into it. It's just good, clean, wholesome fun. The beekeeper, next time you're on airplane, do not watch it, do not try this at home. This is not for the couch. It's for the, for the... You have to watch it ironically, too, not unironically. Yes. I think you mentioned this. When I watch the Iron Claw is on HBO now. Thoughts of the movie's, uh, high quality movie. But, but, but just not that great?

Just okay, yes. I feel like the... How many steroids did Zach Efron eat for that movie? Because he grew another jaw. He was so... That's another 824 movie. So you're right. It was super high quality. I just, I don't know. Everybody seemed to love that. But it looks like you and me on the side of that.

Great movie. I liked it. I didn't. I liked not loved. It was high quality. For some reason, this is always kind of nice. When you find an old movie you've never seen before, and when I say old, I mean like 80s or 90s, because remember, I don't go.

People keep trying to give me black and white movies. I appreciate it. I'm never going to watch them. Wait, hold on, hold on, hold on. So we had an email. You've never seen Momento? Oh, I have seen Momento. Okay.

But that goes back and forth because that's a plot device. I'm okay with that. Oppenheimer? It's a plot. Okay. Got me on Oppenheimer. But back and forth.

That's a plot device. All right. So I watched The Edge with Alec Baldwin and Anthony Hopkins from the 90s. For some reason, never seen this movie. Really good.

What an awesome movie. Both of those guys like throwing their fastball. They're really good. Just I loved that movie. All right. You know it's funny? Wait, hold on.

So I saw that movie. I rewatch part of it. Where was I? I think California, actually. It was on late at one of the hotels that I threw it on. Anthony Hopkins was old 40 years ago. Yes, he's one of those actors who's always been old. J.K. Simmons, Steve Martin, Anthony Hopkins, they were born 50 years old.

Morgan Freeman, and they just always looked like that. Okay. I got nothing else. Okay. All right. Animal Spurs 360. Thank you to Daniel and the rest of the team for producing these videos and these audios. That's not great English. All right. Animal Spirits pod. Nope, nope, nope, nope, nope. Animal Spirits at the Compair News. Thank you for listening. Thank you for the emails. Keep them coming. Ben, it's on your mind. You'll think you're about to say something.

No, no, I'm appreciative of the audience for sticking with us this long. We have a lot of people who email and say, I've been listening since show one. And that's awesome. If you didn't come in, if came in after that, that's cool, too. But we always appreciate the audience. But we love every email, but those are extra special. Personal emails, personal responses. Okay.