The Compound and Friends - Rates Might Go Higher

Episode Date: April 12, 2024

On episode 138 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Dion Rabouin and Callie Cox to discuss: the Fed's next move, why inflation is so stubborn, Larry Fink's shareholder letter, the craziest meme stock yet, why people play the lottery, the problem with housing, and much more! This episode is sponsored by Global X. Visit https://www.globalxetfs.com/ to explore a lineup of more than 90 ETFs, along with insights to help you navigate a dynamic investing landscape. Sign up for The Compound newsletter and never miss out: https://www.thecompoundnews.com/subscribe 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 Josh Brown 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

Have you seen the debunked data point? Wait, what am I really doing with this? The debunked data point that foreign 10 Americans can't save, don't have $400? Yeah, I know that's not true. You know it's not true, right? That's what we were talking about. I love the reaction. I've found myself defending BlackRock a lot these days.

That's interesting. How does that make you feel? From the nonsense. How does that make you feel? I like BlackRock. To be defending BlackRock. Well, I'll tell you. I have to defend their honor.

No, it's not them. It's just misinformation that they own corporate America. They don't need you. No, I know. Hold on. No, it's not. I was talking to somebody at dinner about this. I'm like, but it's our money.

Like, it's. But anyway. So you believe BlackRock owns corporate America? Well, but listen. Yes, but they own it with our money. It's our money. Right. It's not other money. So wait. So here they own it with our money. It's our money. Right. It's not other money.

So wait. So here's in defense of BlackRock. It's our money. More than half the assets that BlackRock manages are for retirement. We help about 35 million Americans invest for life after work. That's a quarter of the country's workers. So that's my defense of BlackRock. But here's the bullshit.

In Larry Fink's recent letter, he said 4 in 10 Americans can't come up. That's nonsense. But he linked to… It's a number linked to linked to irrelevant investor yeah lol that was my nonsense no it's from gotcha it's a federal reserve board publication economic well-being of U.S. households in 2022 but the problem is it's 86 pages so I can't find the data point oh uh it's it's it's made up wait no I got it I've seen that debunked by Ben Carlson. I think it's the way they phrased the question.

We gotta get the label up. $400 in a cash emergency. No free advertising. Nope. We gotta charge. We gotta start charging now. You're such a journalist. Remaining objective. Oh, no, no, no. This is about getting the bag. Get the bag.

Always get the bag. They want some advertising. They're going to have to pay. How's my forehead? Is what it is? I tried. Here we go. He did his best.

Here we go. I just, I feel like Beetlejuice. Wait, what? You know, the Whack Packer Beetlejuice? No. Okay. I am not familiar with this person. this person no what when you don't have a hat on and you have headphones on your head you don't look like beetlejuice so i uh i was making my ira contribution the other day and this new thing that i started doing the same time i make the contribution, I also make a contribution at the Metropolitan Detention Center to Sam Bankman Freed's commissary.

So I'm doing it. So I just- Enjoying some cigarettes. Listen, I don't want credit. I don't- Listen. I don't want credit. I just-

I want to make sure that young man has peanut butter money. You know what I mean? What's the new thing? We had a- He's going to come out with more money than anybody you know.

You think? Oh, yeah. A hundred percent. Just because... Because things in crypto are like, are bubbling again. Yeah.

And he didn't like liquidate everything he owns. His family was rich. There's no way. He never once did that family complain to the judge that like,

they don't have the money to continue their defense or anything. They have endless money still. Endless. Endless. And to the judge that like they don't have the money to continue their defense or anything? They have endless money still. Endless. Endless. And by the time that bankruptcy, liquidation, proceeds, blah, blah, blah, that could go on for like 12 years. I'm telling you he's going to come out ahead. One thing I forgot to ask about is like can we play the video?

My bonds video? I don't have it handy, but we definitely can. I can send it. Okay. I can send it. Are. I can send it. Are we talking bail bonds or real bonds? No,

treasury bonds. Oh, okay, okay. We're talking treasury bonds. We unwrapped over bonds. I wrapped about bonds. Yeah,

we made a whole song and a music video. Please share. So speaking of prison, my wife used to, okay, oh, confessions.

My wife used to love the show Locked Up. I think it was on the Discovery Channel or Nat Geo. Like for years. Do you remember that show? What did she like about it? Everything. Wait, the reality show? Yeah.

It was in like a Supermax prison? Yeah, she would watch it for hours. Did you watch Oz? Are you too young for Oz? A little bit. But I bring this up because there's a new show on Netflix called Unlocked,

a jail experiment. And this is a hardcore penitentiary. And they let the prisoners out without guards. And they try and foster like a community and like… That just took a 180. I only saw the premise. I haven't seen the execution. I'm sure that's going to go.

I don't know how it's going to go. We'll see. I mean, I believe in humanity, but I also believe in shanks. So I'm not quite sure. And you're throwing a lot out right now. You've been doing a lot. I've been trying to find this video, and in that time. Wait, I wonder if in those situations when they're filming in a prison,

they're clearly getting consent from the people they're filming because by law you have to. I wonder if they're clearly getting consent from the people they're filming because by law you have to. I wonder if they're also making payments because they basically have like basically have like technically they're the talent. They're the thing that people

are tuning in to see. They should. I wonder if they have to. They must have to. But then there are laws about people who are locked up earning money. Right.

They earn very little. Like you can get something but it's like 70 cents an hour You get something but they're really not supposed to profit like because of the crimes they've committed. Right. But you very little. Like, you can get something, but it's like 70 cents an hour or something. You can get something, but they're really not supposed to profit, like, because of the crimes they've committed. Right.

But you're not profiting from the crimes. At that point, you're profiting from being on a prison TV show, which is different. Yeah. That's true. So I think they probably—it's probably like prison wages, though. Like, the prison probably gets money. These are probably private prisons would be my guess. Michael also watches Prison Housewives.

Dude, I swear. Thousands—maybe not thousands. Is that a thing? Hundreds of hours watching Locked Up. We used to fall asleep to it because my wife loved that show. No, it's not a real thing,

but most of the husbands of the Real Housewives do end up statistically in jail. Yes, I did know this. Like over 50%. It's like, it's an insane number. I think every show,

every individual show, like New Jersey, et cetera, somebody goes to jail. Yeah? The psychology of those people volunteering to be on that show fascinates me. Yeah, yeah, yeah. It's dangerous because they're all dating and or married to shady men. Right.

Or most of them. Well, I should co-sign on that. Let me take back my co-sign of what you said, Josh. I don't know. That's an interesting point you make. Deon's just said all of them. I co-sign of what you said, Josh. I don't know.

That's an interesting point you make. Deontes said all of them. No, it just seems like there are financial crimes being uncovered by virtue of these people being under a spotlight and being on a show like that. Yeah, there was one from the OC who had a whole documentary about her. And I can't think of the name right now. Oh, Michael will know it. Yeah, it's the lawyer guy. He's afraid to say the name because he goes to BravoCon. No, I don't.

My wife does love – I mean, a lot of wives love BravoCon. No, I don't. My wife does love it. I mean, a lot of wives love BravoCon. All right. That's too far. That's where you're like, let me set the record straight. It's either the Real Housewives and Locked Up. That's her two things. Okay.

Yeah. If only somebody could combine the two. That's all I'm saying. It'd be a fire show. Fizzling Wives. Coming to TLC. So, has anybody seen, I was too busy not to brag today to look at the market, but Apple, I just checked, Apple's up 3%.

Is there news? I mean, that's a big fat candle. 3.5%. Any news? You're on TV today. Any Apple news? There must be. Does it just go up 3.5% for no reason?

You know what? I don't think we talked about it, but the biggest thing we were talking about halfway through the day today was going green after the mini inflation panic of yesterday. Wow. We cycle through these panics really fast now. That's crazy. Apple's up 3% and you didn't talk about it. We didn't get it.

Three and a half. That's a big move for Apple. By the way, so the S&P is now flat as of two days ago. So everything that happened yesterday. Didn't happen. That's the second time that happened. That happened last week too, after that like the little mini sell-off. This market is just strong.

I don't think we've hit a 3% sell-off all year. We haven't had two in like since November. We technically had two. I did look at this. Intraday? No, on a closing basis.

When? We had 2.04%. When? Just recently? I can't remember the day that we hit the low, but like a few days ago. I lost everything that day.

I love the fact check. I'm sorry, Callie. I'm telling the fact check. You very well may be right. Let's go to the scoreboard. Let's go to the replay. That was one of the tougher days of my career. The 1.1% Dow Jones decline.

No, no, no. It hasn't even happened? It hasn't happened? Mm-mm. The streak remains. The streak. All right. Listen.

I want to double check that, but I can't do two things my name is Paul and that's between y'all no okay this is what it is you look at spy I was looking at the index pro move yep

okay then I believe you I stand corrected yeah sometimes Michael looks at the ETF but you're a professional I mean 90% of people

look at the ETF you're looking at the index level that's what you can invest in that's you're right she's right she's right of course. You're right. She's right. She's right. Of course she's right.

Of course she's right. I was, yeah. I believed in Callie the whole time. I'm a basic bitch. I look at the ETF. Callie nailed it. No, I think I'm the basic bee. No, no.

I think I'm the basic bee. No, no, no. It's me. No. It's me. We clapping? Is everyone set? Let's do it.

We're ready. We're ready. We're ready. I still feel naked without a hat, but it is what it is. The Compound and Friends, episode 138. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Redholz Wealth Management. This podcast is for informational purposes only and

should not be relied upon for any investment decisions. Clients of Redholz Wealth Management may maintain positions in the securities discussed in this podcast. Today's show is brought to you by GlobalX. Since 2008, GlobalX ETFs have been committed to empowering investors with unexplored and intelligent solutions. GlobalX. Since 2008, GlobalX ETFs have been committed to empowering investors with unexplored and intelligent solutions. GlobalX specializes in ETFs that track emerging trends like the rise of artificial intelligence, as well as strategies aimed to generate high income potential. Visit globalxetfs.com to explore a lineup of more than 90 ETFs, along with insights to help you navigate a dynamic investing landscape. 138.

This is, guys, this is two returning champions on one show. I'm super excited. This is The Compound and Friends. Nicole's dancing. My name is Downtown Josh Brown. If you're listening for the first time, this show is about money,

investing, the economy, trading, making contributions to Sam Bank and Freed's Commissary. Yeah, yeah. And it's about life. And, man, we lucky today. Two returning champions. Dion is here. Dion Rabone is an award-winning journalist writing about markets and the economy. You've seen his work in the Wall Street Journal,

CNBC, Reuters, Yahoo Finance, the New York Times, ESPN, and others. Dion, welcome back. So good to have you. Hey, thank you so much for having me. It's been a minute. You have some notes from your last appearance. Yeah, okay.

I'm going to go back through that. All right. You were right. You were right. Callie Cox is here, ladies and gentlemen. What's up? Callie's a market strategist who's passionate about teaching everyday investors

the power of investing for their wallets and their lives. Most recently, she was U.S. investment analyst at eToro, where she educated 2 million customers about stocks, crypto, option markets through timely reports and strategic initiatives. Callie, welcome back to the show. What's up?

I know there's a lot more. So good to be here. Your bio is expanding by the day. I love your intros. I feel bad. I didn't give you guys as good an intro when I had you on the podcast, and I feel bad about it. Hey, let's talk about that.

That was a good episode. It was. It was a good episode. Very timely. Bank earnings are at the end of this week. Yeah. So, all right. That was a good episode. It was. It was a good episode. Very timely. Bank earnings are at the end of this week. Yeah. So,

all right. That was cool. The whole thing with the show is like we were looking ahead to what was coming. So yeah, you guys broke it down, dropped a lot of knowledge.

Previews are underrated in financial media. A lot of people do reactions because of course, like news happens and you know, somebody has to round it up. Right.

There's not as many previews from my perspective as there are. Now, I understand why. Harder to do a preview because you might have to predict something that doesn't happen. Right. So, I like previews. But you can preview what's coming up and talk about what's happening.

I think that there are no, not no, but I think that there aren't as many good previews. Well, there's no audience for a preview. Who cares? I'll wait and I'll say it. The market cares. No, but the audience doesn't care. I don't want to hear.

That's a bad take. That's a bad take. Who cares? Yeah, we're about to pile on you. Hold on. If you're invested in a stock, let's say, and two days before the company reports earnings, you come across an article that's a preview of the earnings. I'll wait for the earnings.

Really? You're skipping it? Yeah, skipping it. Next. That's rare. I don't know about that. If I still're skipping it? Yeah, skipping it. Next. That's rare. I don't know about that. If I still hosted a podcast, I would uninvite you

to future efforts. Wait a second, because that would be the whole podcast. Because there's more value in a preview, even if the person writing it doesn't know what's going to happen,

just laying out the things that could happen or the things other people are watching for, I feel like that has a lot of value. Yeah, and that was what we did on the podcast.

It was like we'd talk about an earnings preview coming up and then like an economic indicator. So it'd be like, CPI is this week. Here's what to watch for. Yeah, what's consensus? What's the storyline? Like, what are people expecting? And if it's above consensus, here's what could happen.

If it's below, if, you know, that was the whole point of like, and I would hear from people a lot. They'd be like, oh, I didn't even realize like next week is you know CPI or next week is this. So that's a really great point too. Most people aren't keeping a calendar and thinking about these things. There is no calendar. I'm going to throw that out there. There is no everyday

investor calendar that's easily accessible that you don't have to pay for. Forget about the context. There's nowhere to find it. I had to put it together myself. We literally built it. Wait, Yahoo Finance doesn't have a calendar? It's not good.

Or maybe they do, but like helping guys. Don't they have a week like this is the data coming out this week by day? No, they'll put together like a little, you know, like an article, maybe three, four hundred words. And they'll say, here's what's happening this week. And if you can go find that exact article at the exact time. Oh, shit. But there's not just like a calendar. So I downloaded a calendar of the Knicks schedule that I synced with Google Mail.

And I don't know how to do things like that. It was really easy. Like there was a button like connect this to your Google calendar. Yes. So now when the games are happening, I can see them on my calendar. This seems like an obvious thing that somebody should create for economic data and earnings. I think the problem is probably there's not a way to monetize it successfully.

Put the ads right into the calendar item. Listen, I don't know. This isn't what I do. Josh, why don't you do it? Ritholtz Wealth Management presents. We need more work to do. I want 5%. I want 5%.

I want 5%. Yeah. I want 5%. Right? Yeah. Before we get on with the show, Dion, there was news yesterday

I saw online that the Wall Street Journal laid off a bunch of their content creators, podcasts, hosts, YouTube hosts. And unfortunately,

you were one of those people. I was one of those people. Yeah. I appreciate you bringing that up thanks Mike but not honestly like it was crazy they called me in put a meeting on my calendar that I didn't even see and then it was like right as I'm about to do my livestream like livestreams cancelled we have to have an organizational structure meeting and I was like oh okay well this is how it happens this is how it out okay so which

which case is my camera where Do I have a camera? Yeah, so first thing I want to say is f*** the Wall Street Journal as a staff record label and as a motherf***ing crew. And if you want to be down with the Wall Street Journal, f*** you too. Emma Tucker, no, no, no.

I'm joking. Ladies and gentlemen, Tupac Impressions. Shout out my man Tupac. Aggregators, do not write articles about Tupac. Listen, joking, joking. I am joking. First of all, do not write articles about Tupac. Listen, joking. Joking. I am joking. First of all, let me just, let me actually say.

That's going back. What I really want to say is like, I actually am so glad and so happy with the time I spent there. Legitimately, shout out to Emma Tucker. Shout out to Charles Farrell, Debbie Elwin-Shee. Shout out to Kamana Patterson, head of audio, who like let me bring this idea for a podcast to the Wall Street Journal. We were talking about it earlier. I made a rap video at the Wall Street Journal.

First ever. I think it had to be the first ever. Charles Dow was not doing that in 1896. He wasn't. And I dropped some rhymes. We had some rhymes in this. You did. You had a cypher. I'm so proud of the work I got to do there. I'm so happy about my time there. And it was funny because they told me at like 10 a.m. and I just kind of was hanging out at the office

and everybody was like, man, you're so zen. Like this is this is not what I expected from. And the reason was I knew I knew I was good. I knew I was fine. And this is one of these things like I've been really passionate about talking to people about finance, about like trying to tell people like, yo, you should get in the markets, invest. And it's because of, like, I'm a testament to that, right? Like, I knew that I'm fine because I've got my investments. Like, I own two houses. I was literally like, which one of my two houses am I going to go to?

And I didn't, I don't have two house money because of journalism. I have two house money because I was a smart investor because I was a long-term investor. I didn't make like, I wasn't, you know, picking the best stocks. Let me give you some props on that. Just because I got in the market, I stayed in the market

and that's allowed me to be in a position where when the Wall Street Journal said, hey, your services are no longer necessary, your position's been, you know, eliminated. I was like, all right, cool.

We're on to the next. Yeah, keep investing. They'll write about you someday. And there it is. But it's really, you know, eliminated. I was like, all right, cool. We're on to the next. Yeah, do it. Keep investing. They'll write about you someday. And there it is. But it's really, it's just like, I have really been passionate. And it's something I care about because of this. So that, you know, it's nice. You can have nice things.

Shout out to my $25,000 Rolex watch. But like also, but also what's much more important is just like that security. And I knew that if the Wall Street Journal wanted to move on, wanted to go in a different direction, that this partnership could end. I'm good. I'm set. And I'm set and I can act that way, right? That's why I can – I brought my full self to work. You know, when I didn't like something, I let people know.

I didn't have to be afraid. Right. And it was because I know I've got this set pile of money. I've got these investments. And if this goes south, all right, I'm good. I can set. And that I think is something we don't talk about enough in finance when we're doing these things. Like we like to have fun. We like, and I, you know, I do it too, but getting back to like that fundamental, you know, of like, this is why investing matters. This is why being in the

markets matters. It's that security. It's such a great point because when we're building financial plans for clients in sub segments, this is a very real risk that we need to invest and build into the potential outcomes. And then, of course, financial plans will change as life events happen. Exactly. But it's a very clear and present life event for most people. I think we talk about the why all the time with our clients, but when we're on the microphone, we're talking about the markets, right? And the important stuff, what you're dealing with, it sort of gets brushed under the rug a little bit. Yeah, for sure.

And it was like in this moment, I was having lunch with somebody and she was like, yeah, my friend just got laid off and she's freaking out. She's going crazy. I'm like, well, you know, if you didn't prepare. Well, it's a temporary loss of like – it's a temporary uncertainty because you are going to make a change but you don't know what it is yet. Right. So that's everybody – if you sell a company, there's an uncertainty because you're probably going to do something but you just don't know what it's going to be. Yeah. So everyone feels that at different levels and it's like a loss of security until you realize, oh, wait a minute,

I'm about to go on my next adventure. But, you know, it's a thing that people have to go through. So, but I love the way that you're handling it. I love the Tupac. I love the Tupac. R.I.P. Tupac, man. The greatest rapper of all time.

So, Callie, the last time you were on this show was January 2023. And the title- No, that's not true. I was here in November. Second fact check. Sean! I was here with Malcolm Etheridge.

Okay. But before that. But before that. But the time before that. So January 2023, the title of the show was, We Just Might Pull This Off. And it looks pretty damn good now. You know what else?

You said, you said, you said estimates show S&P 500 peak to trough earnings decline could be about 6%. It's important to remember that analysts have underestimated corporate America's resilience recently. And they did yet again. And I don't want to take too much credit here because first of all, I don't make predictions. Second of all, we're all going to find ourselves on the wrong side of the the call not today but that day is not today but i will say and i went on a rant about this tuesday night at the alphaville pub quiz the job market was so strong when people are making money they are willing to spend money

yeah it's such a basic thing but thing, but we kind of like forgot, like, that's the most important thing. 70% of the US economy is consumer spending. I wasn't at the pub quiz this year. I've been there, but I wasn't there.

I was actually there. I saw you out of the corner of my alley, but I was studying. But it's huge now. Yeah, it was really big. Was it like 200 people? It was something like that.

I saw pictures. It was crazy. I was never on a winning team for that, though. Ben McKenzie was there. If anybody knows who Ben McKenzie is, he was the blind dude from the OC. My first teenage crush.

Okay. I died. Did you tell him? Yes, I did. I went up to him after a few drinks and I was like, hey, I'm Callie. I've seen the OC four times.

Is he Australian? He definitely gets that a lot. No, he's American. Why do I think he's Australian? I don't know. I don't know. I don't know. He,

oh yeah, he's a big finance guy now because he hates crypto. Yep. He was a guestist. Yeah, right? How's that going? It's a little tough

when Bitcoin's at 70,000. Wait, did Joe and Tracy host it? No. Joe was on my team, by the way, not to brag, but no,

it's the FT, Financial Times. So it was Robin Wigglesworth. Yeah, yeah. All right, shout out to those guys. How did your team do? Oh, this is a whole thing.

We didn't, so for everybody who's listening, so the pub quiz, you have two rounds of trivia where you're writing the trivia in. And it's all like economic, financial markets. Economic, financial. These are nerds. Really hardcore nerds. Also a little bit of like English nerdery.

Yeah. That's true. Because it's the Financial Times. Yeah. But this year, there was a separate kind of like English nerdery. Yes. That's true. Because it's the Financial Times. Yeah. But this year, there was a separate kind of like round that happened throughout the quiz where they gave you nine charts that you had to identify. And then they gave you some like picture puzzles and you had to guess what company. They gave you unlabeled charts and you had to say what the chart is?

Yeah. Let me ask you a favor with a U. Sorry. Oh, I get it. I get it. You added some color. It's a showstop U. Sorry. Oh, I get it. I get it. You added some color. Okay. But I want to be very clear.

So Sam Rowe, Joe Wiesenthal, John Carney, like they've all been a part of the team that's basically run the table at these quizzes. And we had these charts

and these like picture puzzles beside us, but we didn't realize we had to do them throughout the rounds. So the second round of trivia finished and the FT was like, turn in your papers. And we were like,

Oh, Oh my God, we hadn't even started. So we got them all wrong. Because you're in a rush. Well, we were just like, I call cap on that story.

I call cap. Did you hear them announce that? I call cap. No, they were just, they were sitting there on the table. Like it was very obvious. And then there was sitting there on the table. It was very obvious. And then there was a thing on your sheet.

There was a thing on the sheet of like, here are the answers for this part of the quiz. So who won biggest nerd on earth? Who was the big winner? We did win. I mean, who on your team won? Oh, you guys won? No, no, no.

We didn't win. We were 17th out of 34. Oh, we were 19th and we didn't answer any of those questions. Yeah, all right. Well, yeah, listen, we still beat you. Yeah, I mean, we were doing really well, but it was— I can't remember which team won. Yeah, I don't remember which team won.

So I was on teams with like— So they would like not listen to me until it was something about the stock market. That was like my only value to the conversation. That was my role on the team. Right. Which is fine. So they'd be like, who was the third only value to the conversation. That was my role on the team. Right. Which is fine. So they'd be like, who was the third Fed president?

In Minnesota. No, period. Like from 1927. And I would just sit there quietly, you know, pounding. Lyndon B. Johnson. Just drinking. And then there'd be like some question

about like Apple's market cap. And I would just like physically clear everybody away. This is my moment. This is my big moment. Alright, we had an eclipse this week. What are the best ETFs to buy after an eclipse? Anyone? Yeah, Callie. No? That's a good question.

Why were people carrying on about this eclipse this year more than usual, do you think? That's a great question. Do you have that impression? No, people traveled for this eclipse. People went to the Finger Lakes to see an eclipse. Yeah, went to like not touristy places to watch this eclipse. It was crazy.

I was underwhelmed. I loved it. You bought the eclipse? I'm actually with you. I'm with you, Micah. I thought it was cool. I went out there. I had the glasses.

You know why? Because I was like, this is dumb. And then I tell them, put on the goggles. It's like, oh shit, this is cool. Yeah, yeah, yeah. The sun is a really cool star. Because I put no investment into it. Same. One of the reporters. I poo like, this is dumb. And then I tell them, put on the goggles, like, oh shit, this is cool. Yeah, yeah, yeah. The sun is a really cool star. Because I put no investment into it. Same.

One of the reporters had some glasses, so we went out there. We looked, oh, cool. All right, don't. All right, I'm going to tell you a couple of things. The first is taking kids out of school early because there's an eclipse. They did that with your kids, right? Yeah. Oh, the schools did.

Well, my wife did. What the hell is going on? Oh, okay. Why? Because she didn't want us to be on the bus looking up. Like, right? Yeah. Oh, the schools did. Well, my wife did. What the hell is going on? Oh, okay. Why? Because she didn't want us to be on the bus looking up. Like seriously? Serially. Okay.

Yeah. I looked directly at the eclipse. Josh stared at the sun. How are your eyes? And he didn't blink. Not only did I not put the glass on, I put on binoculars. You did binoculars. That's like a Chuck Norris joke. Chuck Norris stared at the eclipse.

That's what people today at lunchtime this guy's telling me he went to or somebody he knew went to Vermont to see the I'm like dude I saw it from a five guys parking lot

in between ordering and getting my my salad and I was yeah I was just thoroughly underwhelmed

I don't know Duncan are you an eclipse guy I actually didn't even have glasses. Did you even know there was an Eclipse? I knew there was. I tried to take some photographs. I didn't get anything good there.

You can't take photos. It's rough. Maybe it's because you didn't have the glasses. That's enough with the pub stuff and the Eclipse stuff. People are here for some market stuff. Let me give you some edge on the Eclipse. For real.

S&P 500 stocks put them all together. and the Eclipse stuff. People are here for some market stuff. Okay, let me give you some edge on the Eclipse, like for real, for real. So apparently the S&P 500, so S&P 500 stocks put them all together. The trading volume in S&P 500 stocks was the lowest since Black Friday. During the actual Eclipse. So like volume actually dropped off. So the algorithm's like watching eclipses? I guess so,

or the humans that are still present are. That's a big drop. Let me say, that's noteworthy. Yeah, yeah. Which is humans that are still present are. That's a big drop. Let me say. That's noteworthy. Yeah. Which is incredible, but it makes sense. I mean, if you're stepping away from your computer. Someone's got to push the button.

Someone's got to push the button. They got to beep. So people were like, I'm going to take off a little wrist just in case this eclipse gets out of hand. Well, it also wasn't a crazy day in markets. It was the S&P's eighth smallest intraday range of the year. Okay. It was a boring day. Nobody cared.

Inflation. People have better things to do. Like watch the eclipse. Watch the eclipse. So we got a hot CPI. I would call it hot. I thought, yeah.

It's hot. Yeah, I have a bunch to say about this because I didn't get to do my live stream. Let's go. Let's go. Three and a half percent

in March. February was 3.2%. go. 3.5% in March. February was 3.2%. We're going the wrong direction. Right. And I know you can pull things out of it and you can adjust it and blah, blah, blah. But still, we're still printing 3.5% CPIs. It's like in and of itself, the market does not love this. And the trajectory is up.

I have been really surprised that the market has not reacted more strongly. Like we had that day. The bond market did. The bond market had, yeah, yeah. The bond market always. But I mean, even that was like 10, 15 basis points. But the two-year had a huge move. But I'm surprised the stock market didn't really. But even like 15 basis points, if we're throwing out Fed rate hikes, which- For the year. For the year, right? Which Torsten Slott came on the podcast from Apollo. And back March 17th, he was like, I think no rate cuts this year. And I was like, oh, shit, hold up. That's a hot take.

And that was a hot take. But I think I was like, I see your reasoning there. He broke it down. But it's like, I don't, you know, the market came in six or seven, right? And then we've sort of gotten to a place where it's like three. And now it's like two. Like, market is still pricing in two if you look at Fed funds futures. But I really think zero is a legitimate possibility.

I think the Fed is trying to get the market to think like, yo, zero could really be the thing. The stock market doesn't believe it. Stock market doesn't believe it. And I'm like, why? But why, though? It seems like it should. And I just I'm wondering if it's just because this is another thing Torsten talked about was this AI thing. Maybe that's just stronger than everything, right? This idea that we are refastening or reformatting the economy around AI, and that's going to provide such a massive tailwind to everything. So if they don't cut in June and they cut in July, so what if AI is going to do what we think it's going to do?

No, no, it's not if they don't cut in June and they cut in July. It's they don't cut in June or July or October or November. But I'm agreeing with you. I'm saying, but if earnings are growing way faster than expected, that should dominate the no cut. Yeah, and that seems to be what it is. But I mean, like the Fed is everything. And I feel like somehow we've forgotten that. But maybe they're not.

What did you think when you saw that hot print? Were you freaked out about it? Me? I never get freaked out. I'm very objective. But I have a few things to say. So first of all, Fed's dual mandate is unemployment and inflation. So they don't care about earnings.

They don't care about stock prices. I'm very much a Fed truther in that way. Yes, the CPI report was really hot. If you look at super core inflation, so CPI inflation, taking rent out, taking energy prices out. What's in super core or what's not in it rather? So what's in it? Okay, so what's not in it? Rent prices, rent prices, and energy services basically.

Energy services go up and down a lot. So it's inflation, ex-inflation. It's core services minus housing. It's the kind of inflation the Fed can control really well. That's why it matters. You know what's so funny? The type of inflation that pisses people off is the worst it's ever been other than food. Like maybe not year over year on something like gas prices, but gas prices are moving up.

Yeah. But think about it. Health insurance. Yep. Car insurance. Car insurance, yeah. This is the stuff that really makes people angry. I mean, rent.

Rent is still going up at a blistering pace. Rent, right. Yeah. It's the inflation points that really bother people. Yeah. The thing— So I just want to— Whenever I think about inflation, too, like, yes, I want to be clear that inflation is a problem in our lives.

Like, yes, the pace of inflation is coming down. But you will probably never pay cheaper prices than what you're paying today. That will never change. The way that the economy heals is that wages pick up, which is what we're seeing right now. And suddenly your paycheck stretches a little bit further. But that takes time. That's such a great meme, what you just did, though. You know the meme where Homer Simpson is talking to talking to bart simpson and bart simpson's like

i just had the worst day of my life and homer goes yet the worst day of your life yet son like that's a i haven't seen that meme you might not like the prices today but they're the lowest prices you'll ever pay you're gonna love these prices in five years? Is that what you're saying? Five years, I'm going to wish for these prices. Well, but I say that to say that I understand, I'm a human, I understand the struggle of inflation and I don't want to poo-poo it at all. But the way that the Fed looks at it is the super core measure. Powell has said that every single time he's been public. This is how I look at inflation. This is what we base policy on. We can't control gas prices. Like, come on, that's a supply thing. That's supply and demand. So there's the Fed's view of inflation, and that plays into rate cuts, rate hikes. And then there's also the daily lives, you know, that inflation

really sucks. Prices really suck. Things are still broken. The populist inflation. But here's the other thing about the Fed is, and I haven't heard anyone say this, and I was going to say this, but like, I think we're now talking about not only no rate cuts, we could be talking about rate hikes. Well, that's, that's a game changer. I think the bar is really high for that. I see. I don't think so. Again, because it's, we were, we're at 3.1, then it's 3.2, then it's 3.5. Like things are clearly moving in one direction and it's, they've, it's been over expectations the past four months. So every time economists have come in and they've kind of been like, okay, it's going to fall under 3%.

Nope, over 3%. It's going to be down to around 3%. Nope. Now we're back up to 3.5%. And again, gas prices are moving up consistently. There's a clear line. You see gas prices, auto insurance, home insurance. What's the other big one?

Rents were expected to start pulling down CPI for a long time. Medical's another one. And yeah, medical's another. Like everything- They got shocked by apparel this month. They can't figure it out. There was, and right, it just keeps being more things. I bought a baseball glove, my bad.

Yeah, Michael stopped buying baseball gloves. No, but it's generally the trend on all these things is going in one direction. And I think there should really be a serious consideration of like, well, not only is the Fed not going to cut maybe, the Fed might have to start talking about— That's an instant stock market correction. Yeah, for sure. Like overnight. Look at this.

So we're looking at a chart. This is from Bloomberg. The US CPI month-over-month annualized diffusion indexes. So they're looking at the weight of share of CPI components. And there's a line that shows things that are going down. So under zero. So things that are where the price is going down. Deflating.

Deflating. And that's gone sideways. So there's no more or no less things that are going down. But if you look at the basket of things that are rising over 4% month over month, it's ugly. It's going in the wrong direction. It's rising. Yeah.

And that's exactly the, like, that chart from 2024 is kind of exactly the oil chart. It's kind of exactly, like, it's all these things. And that's exactly the, like, that chart from 2024 is kind of exactly the oil chart. It's kind of exactly like, it's all these things and they're just moving in that direction. Did PPI bail us out today? So all this, like, as of, it's Thursday afternoon. Everything kind of reversed positive today. We've repaired a lot of the damage from yesterday. Little bit of small cap bounce, little bit of regional bank bounce.

Semiconductors gained back some ground because you got a cooler than expected producer price index, which I know is like less important. But like today, it seems like good enough. Yeah. And I want to be clear, too. The Fed cares about PCE. CPI is the report that everybody loses their minds about. And yes, you should watch it. It's a big market mover type of report. But the Fed is watching PCE. That's what their target is based on. And there is a difference between PCE and CPI. The baskets are different. The weightings are different. So that's the other thing too. It's, it's, I got to see the PCE report. Core PC has been right around 3% too.

And if that starts again, that's been pretty consistently just sort of holding. It's the last mile. That's tough. Yeah. That's, that was the thinking before, but of holding. It's the last mile. That's tough. Yeah. That was the thinking before. But again, now CPI is clearly going up. If PCE starts picking up, and I think this PCE report is going to be really big because I think at that point— When is that? Oh, I forgot. We don't have a calendar.

End of the month. I think it's the 28th, 29th. Okay. I agree with you. But yeah. That's going to be a big deal. Right. If that comes in hot and over three on the core side, like that is…

What's the big difference between CPI and PCE? The shelter component is very different from one to the other. Yeah. I think the shelter weight is more for PCE. Yeah. Maybe. Don't quote me on that. No, no.

Shelter is less for PCE. Which is why it's been… Not to do another pub quiz. I know. I know. It's because the third is CPI, and it's less of PC. What's the best theory you guys have for why— All right, let's hope you're wrong that we're about to put Raid Hikes back on the table.

Let's assume it's premature, although I agree. It's like, if that were to happen, it would have a huge impact. But let's hope that doesn't happen. But what's your best theory for why, even if it does happen, rate hikes really haven't done anything to the consumer? Anything noticeable in the aggregate? Yeah. So I'd love to hear like either your own idea

or the best idea you've heard as to why that's the case. Well, our wallets are less and less sensitive to rates because, I mean, I know not everybody owns a house, but a lot of people have fixed mortgages under- We have to generalize in this conversation, yeah, yeah. Right, right. So CoreLogic data, I think it says 70 or 80% of people have fixed mortgage rates under 4%.

Right. And, I mean, that was a product of the low-rate environment that we've been through. I'm not saying it's a bad thing, but the Fed has fewer and fewer levers to pull to control the consumer. Yeah. And, again, also not saying that rates are not affecting the consumer. They certainly are.

But, you know, we're just less sensitive to rates than ever. And that's true for corporate America, too, to be fair. What do you think? For sure. This is a question I've been thinking about for a long time and I haven't found a good answer. I do think, I mean, I think, Mike, you talked about this on my podcast or my former podcast, but there is this thing where people do keep spending. And I've seen data that shows like the bottom two quartiles of income have had negative savings like the past

six quarters. So literally they're spending more than they're making. And you're seeing across the board, like decreases, you're seeing, you know, increases in things like delinquencies, but not the like, you know, you're 90 days behind your, those things have still stayed put. And so there really just hasn't been this reaction that you'd think there would be, especially considering how low consumer confidence is, especially considering, you know, gas prices are going up, all that. And I don't know, it is kind of crazy. Callie, what Callie points out about the, you know, the housing part of it, because that's a lot of people's biggest expense that's been mostly fixed, but there, it really has just blown my mind that you have not seen people. The world has changed and people hate to hear that this time it's different.

But I think – I don't know if it was you or Ben, but somebody wrote a blog post about experts of a – Earlier version of the world. Experts on an earlier version of the world. There are people who could tell you chapter and verse. Here's what happens the last six times the Fed raised rates. Here's what it did to stock prices, bond prices. Here's how long it took for the economy to bottom, employment, mortgages. None of that stuff seemed to have applied this time.

And the world has changed. And that also I think that gets to my thought about a Fed rate hike. Okay. Because consumers are still spending jobs. That's the other thing. The jobs market still hot, 330K last month. So all those things are happening in a world with 5.5% interest rates. What's 575?

Yeah, the Fed has never been cutting interest rates with like college employed unemployment is like 1% right now. Yeah, but okay, that's a good thing. Let's be clear. We want a strong government. Historically, the Fed has not cut interest rates into an environment like that. Also PMIs. Now the PMIs are back positive. The Fed doesn't cut rates when PMIs are strengthening, right?

All these things are happening. Did you read this thing from Matt Klein at the overshoot, Mike? I did not. Okay. So he was trying to answer this question, why have rate hikes not done anything? And I thought he did a really good piece. And he's about consumer behavior around rates. A good swath of Americans are benefiting from higher rates.

Yeah. So this is something that I've talked about just in terms of like how much money their cash is earning and how that makes them feel. Shut up 5% money market accounts. So 80% of people with a fixed mortgage rate under 4%. That's great. Investors have more flexibility than ever to chase higher income.

Okay, this is important. It used to be that you didn't move money from one bank to another really easily. Yep. Like it's just – it was not a thing. There was no internet in prior rate hike cycles. Like literally there was not internet banking in 2004. There was no blockchain. 2005. No, seriously though, there's no FinTech. Yeah. Like if you were unhappy with the rate that your bank was paying you in 2005, it was like, all right, well, that sucks. I don't want to fill out

paperwork. You have to literally drive around. Okay. So the flexibility I think is underrated. Um, and people are chasing these rates. We know. I agree. And the awareness around rates is higher than ever. Everybody knows, well,

not everybody, but it's, it's now a thing to talk about the high rate on, on, why am I blanking? The save, the series, the series savings,

whatever. Oh, I am. Yes. I bonds. I'm having a break. That series, the series savings, whatever. Oh, iBonds? Yes, iBonds. iBonds. I'm having a break. That was, to this day, that was the highest, like,

most clicks I've gotten on an article. But everybody talked about it, yeah. 9% yield on iBonds. I had friends coming to me asking me if I should set up an LLC to buy more iBonds. To buy more iBonds. They definitely heard about iBonds on TikTok. Yeah, but it's the rate sensitivity there,

or the rate awareness. Because yes, our wallets are very sensitive. What do we do about car insurance? Can we show the video? Can we just get the… I feel like this is a great segue. I really want to show this video. How do we send this?

I just sent it to the email thread. Oh, okay. So it's in there somewhere. Pull it up, Josh. Will you pull that up? Is John in the email thread? Because I can't pull it up. Because this is… I sent it to everyone on the email thread

so you should have gotten it it's the last email from me but I can fill just do it live there's a B there's a whole thing Y'all out here, y'all buying crypto, y'all buying meme stocks again like Tupperware, y'all buying JGBs, listen to the ECBs. The beard is crazy. And y'all ain't buying AI stocks, y'all know nothing about AI, that's why you're losing money, that's why you're poor.

Are those real hundreds? Oh, of course. Y'all need to learn about these bombs, treasury bombs. My bombs. Paying over 5% of the money from the government. My bombs. What you know about real deals? My bombs. Treasury. I can't believe they let you do this. I can't either.

We are getting word from Jason Zweig. He is leaving the Wall Street Journal now. He wasn't aware that this happened. Can I tell you, Zweig loved it? Zweig's the best. Zweig is my guy. Zweig is my guy swag is my guy i love swag all right so what did you want to what do you want to tell us besides your uh your skill

your mad skills my besides showcasing undeniable skills no i but that's the other you versus kendrick next are you ready for this listen we're ready for that smoke yeah i'm ready for this i got a verse for him it's gonna end his career career. But no, the point I was trying to make was I actually think it's the opposite. Like not enough people are aware. So this Santander survey just came out and it said I think it was 75% of people said they would switch if they thought it took under 10 minutes. But they're not. Switch for what? A higher yield on their cash?

Higher rate, right? And I think there was a bank rate survey. I wish I could remember the numbers. But it's something like, I don't know, 50% of people are still getting less than 3%. And actually the amount of money, like interest-bearing deposits in the big five banks, like JPM. Getting zero, there's trillions. It's getting, it's more. It's increased over the last year or two.

Right? So there's more people still getting zero for their savings in this era of like 5%. Because I think over 15 years, people have become conditioned to feel like it's not worth it. Now it's worth it. It's absolutely worth it. But there's so much inertia in life. Like things, think about people paying gym memberships that don't show up. Think about like, it's just a lot of inertia. So this is another form of that. It is, but it's, I think it's easier now than it's ever been. of inertia so this is another form of that it is but it's I think it's easier now

than it's ever been and that's why I wanted to do that video was to just like make some of the people say oh yeah I should did people say that like oh

I wasn't gonna move my money but then but then I saw this rap video so then I saw Uncle Sam in the trap literally literally the the background

on my Twitter post is this comment on that video that goes, yo, this song slaps. I'm going to buy some bonds. There we go. Love it. I want to give Neil Dutta the final word. You saved one guy.

Wait, can I say one thing before you go? Go ahead. So I think both can be true. I think that investors can be more aware than 5% rates than ever, but there's also a subset that has no idea, doesn't care, just wants to stay. That inertia part that Josh talked about. So we did a survey on the city Toro and this blew my mind. We basically asked people, are you piling up cash? Do you own more cash now than you did three months ago? Why are you piling up cash? And then we kind of sliced the demographics out of it.

Oh, and what would force you to take cash out and put it somewhere else? And younger investors by far said that I'm piling up cash, I'm doing it for the rate, and I would love to reinvest it one day when I feel better about the stock market, which isn't great. But blew my mind because younger investors too in the survey were more optimistic about the economy, more optimistic about their investments, more optimistic about their job prospects. That's good, though. That's great.

But you're saying they're staying in cash rather than investing that in the market. That's a weird dichotomy. That's not great. But they're being opportunistic around these 5% rates because it's a 5% rate. Did they buy that 2% dip? Yeah. The boomers are not going to panic enough to give them that opportunity that they all think they're going to get. Yeah. It's startling to watch.

The boomers just will not panic sell their stocks anymore. It's almost as if 40 years of conditioning have taught them not to do that. Yeah. And they refuse. That's the other thing about this rally. It's interesting. I think, again, even if there are, you know, we start to hear about Fed rate hikes. I don't know that that's even going to kill this rally because there just is so much.

The animal spirits. The animal spirits. For a hot four hours. For a hot four hours, right? No, it will kill this rally. All right. Neil Dutta, here's what he said when inflation came in. He said, yes, actual inflation was a setback today, but it is important to go to first principles.

Wage growth is cooling and returning to something resembling normal. The Atlantis Fed median wage tracker eased to 4.7% in March, the weakest since December 2021. If wage growth is cooling and price inflation is rising, we ought to be less concerned about runaway inflation and somewhat more concerned that consumers begin making trade-offs, cutting back on spending. That, in turn, will weigh on prices. He's a dovish. Like, Dada is a guy telling you, no, no, no, we're still on track to see inflation come down. This is the shit.

I used to, yeah, I showed that chart. I'll point to the wage growth. Explain the chart, Michael. So, wage growth peaked in 2000, what is that, 21? 21, 21, 20. And it's heading the right direction, which is lower, and this ultimately is what drives- The right direction for whom, Michael? Well, true. Drives, this drives, this is the sticky part. And this ultimately is what drives- The right direction for whom, Michael?

Well, true. This is the sticky part. And there's a lot of other sticky parts. I'm not hand-waving anything, but if we zoom out, this is the thing. And it's still falling. I agree. Going back to the Fed cares about unemployment, the job market, and inflation. They're trying to balance the seesaw here. This is a chart that shows us that they're correctly balancing the seesaw. And I agree. Like we, we want to get a 7% raise over a 4% raise. Come on. But also wages when they're growing that hot, they become a risk to the economy. By the way, no, look when the peak of wage growth was, were people happy then? No, they were miserable. They were talking about supply chains and eggs. Stagflation was the hot button. Three years ago, people were miserable. And they're still miserable. Talking about supply chains and eggs. Stagflation.

Let's not act like we weren't here. Stagflation was the hot button. Three years ago, people were pissed. Yeah, I'm not advocating for lower raises here. I'm just saying we need to get this back in balance. Yeah, because when that was happening, inflation was at like nine. Yeah, exactly.

And you don't want inflation over wage growth. I think people want fast wage growth, just not for anyone other than themselves. Correct. Yes, that's right. This is the truth. I want to go back to auto insurance because this really grinds my gears.

LOL. I'm paying for multiple people in my home now. Yeah, that's tough. I don't even understand what the hell this is based on. Why? I think it's the we can principle. But why would this go up 20% in a year? What the fuck is that? Because we can.. But why would this go up 20% in a year? What the f*** is that?

Because we can. Room to run. I see no resistance. Are there 20% more fatalities on the road? I heard a good theory around this. Hit me. And this is not from me. I read it from a much smarter economist.

You heard it from the Geico lizard. From the Geico lizard. Shout out, Geico. Go ahead. Geico lizard. Shout out, Geico. I read a really good take on this around the number of cars that have been ruined by natural disasters. And I don't know if this is real or true.

But apparently that impacts—of course, it impacts auto insurance rates. And it's had like a bigger impact recently. But I was like, okay. What a crock of shit. No, it's not a crock. They're ruining natural disasters? No, it's not definitely a crock of shit. No, it's not a natural disaster. No, it's not definitely a crock of shit because property casualty rates are also up through the roof year over year. And there's a huge climate impetus behind that.

Like, I think it's one reason. It's not like there's earthquakes in New York. Okay. I want to, there you go. The reinsurers set the rates for property casualty that the insurers then are forced to pay who then turn around and hit us with it.

Are their margins not increasing? Climate is disastrous for reinsurance and therefore the premiums have to go up. How much are they taking to the bottom line? Who? Not none. It depends. Not none.

Water insurance? I don't think they make that much money. You don't think their margins are increasing with this rise? Of course they are. Come on. They will temporarily, and then they'll compete each other to death on – In a free market, yes. Okay.

There are insurance companies pulling out of states. Pulling out of states. Yeah. State Farm denied coverage to 72,000 customers in California. Not auto, property casualty, but for the same reason. Yeah. State Farm denied coverage to 72,000 customers in California. Not auto, property casualty, but for the same reason. Yeah. There are uneconomical insurance policies out there. I'm not crying for insurance companies, believe me.

I'm saying the opposite. But I am making the point that, like, I don't think they're having that much fun. Just by virtue of being able to raise rates is not necessarily great for them. No, but I do think the point Michael's making is like a little bit of this is on the margin. Oh, no, a lot of it. And I don't know that. I'm guessing.

Somebody will fact-check us. And I think it gets back to that difference between CPI and PPI, right? Like CPI or PPI has been right around 1%. So you think a lot. So what percentage of a 22% rise in auto insurance year over year is greedflation? And that's a great question.

10%? 30%? We're talking percent to percent. I remember two years ago, and shout out to corporate America, one of the homebuilders was asked, what are they doing to prices now that lumber has come way down? And he said, oh, we're taking that to the bottom line. Prices don't come down. Ever. I bet the stock price.

No, it's good for investors, but it sucks for policyholders, which is all of us. Impact of auto insurance on US CPI year over year percentage. It's wild. So explain this chart. So what we're looking at is the auto insurance contribution, and it started at a very low rate and now it's hit. Now it's 56 basis points. It's a lot. It's 56 out of the 347. It's a lot. And one of the stories I did last year was about who's most affected. It's these middle-class families, right? Because it's people living in the suburbs who have two cars, right? They drive

in and kids, right? But it's so, you know, what is it? It's gas, it's auto insurance. It's all these things that are affecting largely suburban, largely middle-class people. And that's who's hitting it the most. So actually, in this story, I showed how the middle class is actually getting hit the most by this rise in inflation. And that was an opera. I'm sorry. I'm sorry. In 2015, auto insurance was a negligible percentage of CPI.

Right now, it's 56 basis points out of 3.5%. Even in 2021, it was nothing. 300 out of 350 basis points. Even in 2021, it was nothing. So if you were to pull this auto insurance contribution out of this number, are we at 2.5%? Are we at 3% inflation or under? Yeah, we're under. We're under 3%.

Let's just pull it all out. Can we just pull that out, Dan? Take it out? Can we just pull that out, Dan? Take it out? Can we just take it out? Well, the frustrating thing, if you think back to the Fed, I was talking about super core inflation, the kind that they care about. This is in services.

But it makes you think, like, and, like, Jay Powell is much smarter than me, but. Oh, auto insurance is not in autos. It's not in durable goods. It's in services. Exactly, yeah. Auto insurance is not in autos. It's not in durable goods. It's in services. Exactly. Yeah. So there are these like idiosyncratic factors going on where it's not just supply and demand.

Nothing is ever easy. But like this in a weird way is like what the Fed is watching and saying like I could squash this. But it sounds like an industry specific thing. Right. I don't know how you squash this. I don't know. Let's keep moving. Manufacturing is back.

You mentioned an ISM manufacturing activity is growing for the first time in two years. Right. I don't know how you squash this. I don't know how you do either. Let's keep moving. Manufacturing is back. Woo! Baby! You mentioned an ISM manufacturing activity is growing for the first time in two years. Yep. Say more. I will say the one caveat I'll put on this, and then I'll let Callie go, but like the Chicago PMI, which is the heartland sort of manufacturing industry, has been negative, I want to say, 18 the last 19 months.

Last month, I want to say it 18 the last 19 months. Last month, I want to say it was like 44, which is decidedly below that 50 break-even point. Are they lying? No, I just think that's a thing to watch. This is good news, what happened in manufacturing last month. And it's great that manufacturing is back. But that Chicago PMI number for folks getting excited about this PMI thing, that manufacturing has come back, is worrisome, I think. This is a survey.

It's a regional story, and that's not great. ISM is a survey. And that's the heartland. So Chicago, they might be upset about other shit. Well, it's the Chicago PMI. So it's the Midwest, basically.

How is the Midwest doing? And like, not good. Yeah, well, the Cubs aren't doing good. But what we keep learning is that people feel, the feels are worse than the good. But what we keep learning is that people feel, the feels are worse than the facts. So is that distorting these surveys a little bit? Yeah, and that's why some folks don't like things like PMI,

you know, these sort of soft data surveys. But 18 out of 19 months is a thing. It's a lot. And NFIB small business optimism has been negative, or not negative, but has been below its historical average for I want to say 20-something months at this point. if I had a computer in front of me, I could actually tell you the numbers, but there are all these things that are showing, like, there's just a lot of stress and yes, this number going back positive is solid. And it's a thing you can point

to, but there is just a lot of angst. There's a lot of angst, but also a lot of noisy too. This could go positive and then negative the next month. And that's what I'm saying. It doesn't trend. Chicago PMI is negative 18 out of 19 months. Yeah. And that's a thing. Yeah.

So I think if you're an investor and you're looking at sectors, this is incredibly important. Taking what Josh said, like this is a survey. It could go back and forth. It is trending upward. So like 50, of course, is the line where between manufacturing is getting better and manufacturing is getting worse. And for the longest time, I think 14 months, it's been getting worse, but less and less worse over the past few months, if that makes any sense. It's the rate of, it's the direction, right? Yeah. So now manufacturers feel better. The suppliers are saying, okay, like I feel great. We expect, you know, more orders to

come in the pipeline. And that pushed the soft survey above 50. I mean, I think we should consider that when cyclicals have been just absolutely trounced over the past year. And the talk has all been around big tech, baby. And, you know, big tech is leading the market, but nothing else is. This to me speaks about a rotation, which we've seen over the past few weeks. Josh, but that's not true. What's the custodial? Uh-oh. Mike's trying to fact check.

Real-time fact check. What's the company that manufactures gear? Like we were saying about custodial gear. Oh, CTAS. Is that it? Cintas. Yeah. Stocks on fire.

Yeah. Oh, yeah, yeah. The stocks are killing. This is the economy. I mean the costume company. Costume company. Not costume. Outfits. They make costumes for workers. ADs on fire. Yeah. Oh, yeah, yeah. The stocks are killing. This is the economy. I mean, the costume company. Costume company. Yeah, they make costumes for workers. ADP is another one.

Does that look like anything other than holy cow, that's great news? No, no. Okay, so we had- Look at that chart. We had the CEO of Ferguson on this episode of the podcast that's never going to air. Turd Ferguson? No, Mike, not Turd Ferguson. But we had the CEO on the episode that's never going to air, so I think I can talk about it.

And he's like, yeah, you know, our stock is on fire. They're up 70% over the past year. I think like almost 20. What is Ferguson doing? Ferguson is like piping. It's all the stuff. We're basically home remodels, construction, all that stuff. All those stocks look amazing.

Yeah, look incredible right now. And so I was like, but so what are you saying? He's like, well, honestly, I don't know. This big manufacturing boom that's supposed to be coming, right? Because, and actually, again, to go to the podcast, but I interviewed Joe Biden's CEA chief, right? And he's like, it's coming. It's coming.

We, you know, Inflation Reduction Act, CHIPS Act, all those things put a bunch of money out into the manufacturing sector that's supposed to be bringing parts. It takes time because it multiplies. That's exactly what I'm saying. There has to be a velocity of that money, and you have to feel it in the economy, and eventually you will. And so what the CEO—

And then we'll really get inflation. Yeah. But what the CEO was saying, he was like, look, there's all these jobs out there. We right now can't find people to fill them because we've got to kind of recreate that supply of workers. And so we can't really get a lot of this stuff going because there just aren't people who have trained for that.

Everyone went to liberal arts college to, you know, get a degree in underwater basket weaving or, you know, finance or journalism. But like, you know, the people aren't, yeah, that last one's a bad decision. But my point is just that people kind of stopped going to trade school, stopped doing it. And so there's just not – We talked to Jason Chu about that. I was asking him like what are the odds that the United States will really be able to restart semiconductor manufacturing in Arizona? And he was very pessimistic because he said it's not that United States can't.

It's that do the people want to? Yes. You don't have a million people who want to go work in a clean room for Intel. Right. Nor do we have the people that have that experience because we stopped doing it 25 years ago. We sent that to the Far East. So now you want a standing start. It's really hard.

And that's the thing that there hasn't been that investment of like trying to get kids excited about going into manufacturing. Like one of my little cousins just graduated from high school. And I was like, have you thought about the trades? Have you thought about it? He's like, what? Manufacturing? Like, no. What are you talking about?

It doesn't even occur. Yeah, he's like he has no idea what he wants to do. He's thinking about it. Because it's always like an afterthought. Right. He's thinking about like the army or should I go to, you know, he's thinking about those kind of things. It's like this isn't a kid who, you know, got a 4.0 GPA. There's only one job available for that generation and it's influencer.

There's no other. Or Amazon retailer. Amazon retailer. You mentioned that if the manufacturing rally is real, if that's really going to happen, small over large is the trade. Yeah, so can you pop up that chart? We have that chart from you, Callie. This is what my colleagues would call a bar chart or barcode chart. That's it.

Barcode chart. Okay, so this is a little convoluted. A barcode chart is pretty funny. Because it looks like a barcode. Yeah, I got it. Okay. So I looked at the spread between the Russell 2000, how it performed 12 months following versus the S&P 500 at all these points in time. But I overlaid it against the manufacturing PMI. And as you can see, the thickest bands are around when manufacturing starts to get better.

So small caps perform really well when the economy is ripping, when people want to take risk. They're more manufacturing sensitive and they're more American sensitive too, a domestic economy sensitive. Josh is going, he has no idea what he's looking at. I know exactly what I'm looking at. Normally when you see a chart like this,

the gray shaded area represents recession. So what I was going to tell you is, remake the chart. No, no, hear me out. Okay. Remake the chart, but instead of that gray being small caps out, perform large,

make it like green. That's a great idea. Make it green. Okay. I showed this chart to Todd Sohn, by the way. Okay. We love Todd. Shout out Todd Sohn. Yeah, we love him. He said the same thing. And I'm keeping myself now. Not only do I know what I'm looking at, I know how to improve it. Or the white part,

red. No, or the blue line should actually be the gray bars. Or apologize. No, no, no, no, no. Okay. Okay, but I do want to give a shout out to TradingView because TradingView is awesome. Datas from TradingView. Pierce Crosby, shout out.

We love Pierce. Larry Fink wrote a letter to shareholders this week. I really liked it. And I dare say I liked it more than I liked Jamie Dimon's letter. Me too. We love Pierce. Larry Fink wrote a letter to shareholders this week. I really liked it. And I dare say I liked it more than I liked Jamie Dimon's letter. Me too. Which came out the same day. It was more hopeful.

It was more upbeat. Jamie Dimon is like half hopeful, half we're all going to die. Yeah. Larry Fink is like, let me tell you about my parents. Jamie Dimon's letter was like we're in a nuclear winter. Yo, but Larry Fink's letter was like low-key folksy. It was good. I liked it.

It was like Buffett-esque. I really liked it. So I'll tell you why I didn't like it. I'm going to be a hater real quick. As much as I love BlackRock. As much as I love BlackRock. He didn't say, like, there were no answers. He just said a bunch of things. He's like, you know, we really need to rethink retirement.

Okay. Uh-huh. You, who manages $10 trillion, tell us how to do that. That's self-serving. Tell us how to do that. Yeah. Check out our advisors. He says multiple times, I'm not saying I've got to—

It was like, bro, you got no solution. Bitcoin ETFs. Solved. Solved. Everyone just gets into our Bitcoin ETF. Who in Bitcoin is not going to be retired? Yeah. Here's what I liked about it.

He agrees with something that I have been saying for the last few weeks. So there's like a – there's a vibration in the universe. And both Larry and I are picking up the same wavelength. You're like Godzilla and Kong. Yeah, yeah. That's exactly what's happening. No, no. Larry and I are on the same page about the fact that maybe it's not the economy we need to focus on if we want a good economy.

Maybe it's the stock market and the economy will improve if the stock market is good. I know it's backwards and nobody would say that, but Larry is sort of saying that. He's saying capital markets will be the key to addressing the mid 21st century's biggest economic challenges. And so the letter, he asked the question, why did the US rebound from 2008 faster than almost any other developed nation?

Index funds. Capital markets. Low price high shares. He says, a big part of the answer is the country's capital markets. In Europe, where most assets were kept in banks, economies froze. Banks were forced to shrink their balance sheets. U.S. banks also had to tighten capital standards and pull back from lending. But because the U.S. had a more robust secondary pool of money, the capital markets—

IVV. The nation was able to recover more quickly. Is there nothing to that? No, no, no. I like it. I like it. You agree? I do.

I genuinely do. Doctor, do you concur? No, no, no. But it was more than that. I was like, not only is it our capital market, it's like, it's not just the banks. Other countries are so heavily reliant on their banks to provide liquidity. They don't have the robust capital markets outside of banks that we do in this great country.

A couple of more darts real quick from Fink. Today, public equities and bonds provide over 70% of financing for non-financial corporations in the US, more than any other country in the world. In China, the bank-to-capital market ratio is almost flipped. Chinese companies rely on bank loans for 65% of their financing. In my opinion, this is Larry Lawrence, this is the most important lesson in recent economic history. Countries aiming for

prosperity don't just need strong banking systems. They need strong capital markets. This lesson is now spreading around the world. So I'm not going to read anymore, but he talks India, Japan, all of these countries are getting their stock market shit together. That's the big change now. In 2017, we all convinced ourselves there was this, we called it synchronized global growth. Raise your hand if you remember. I forgot about that. Remember that shit?

Well, it didn't work out. It didn't work out. We had a trade war instead in 2018. Yeah, we did. But the point is, if countries focus on making their investor class rich, the velocity of that money is how they restore their economy. And it's the one thing none of them have tried.

Europe doesn't give a shit about stocks. The Japanese, almost none of them participate in their own stock market. India doesn't yet have that big or rich of an investment class. It's an idea. It's, of course, BlackRock's idea. There might be someone self-serving,

but it's not crazy. It's not crazy. And, you know, one thing that this made me think about is, well, A, first of all, the capital markets got us into this position where there is a lot of inequality. There it is. Don't do that.

But that's not me fighting what Larry Fink said or Lawrence. Well, the securitized mortgages, he addresses that, but I'll let you cook. Right, right. But if you think about it in the U.S., we almost have such a competitive advantage. And I am also not like hanging my hat on this, but we have such a competitive advantage that companies go to the U.S. to IPO. Companies look to us for that capital market liquidity. Less so these days.

Slightly, yeah. Yeah. So I don't know if anything really shifts there. Obviously, there are other countries that are learning more about investing. Stocks are becoming more popular. Other investments are becoming more popular. Bonds are a big deal in Italy, by the way. Learn that from our Italian analyst.

Shout out to Fabrizio. Shout out to Fabrizio. Shout out Fabrizio. They're more risk averse. Bottom line. We all know this. We know that investors all over the world tend to be more risk averse. We've talked to people that say the problem with China, it's not that they're risk averse. It's that they think of stocks as gambling, not as investing. And that's what has to change there. I don't know. What do you think about the message? I just, I'll throw this out there. It's like, again,

the cynical and now unemployed journalist. One who also loves to invest though. One who also does love to invest. Yeah. I've just heard a lot of these speeches before and they always end with, and that's why now's the time for active management. Okay.

And Larry didn't do that here. It didn't happen. You know, he's- I read the whole thing. No, dude, it's private credit. It's implied. Now's the time for alternatives. And we need you to help our capital markets

continue to burgeon. And this is why it's a stock picker's market. What's this 2018 BlackRock Commission study of 1,150 American retirees? Here's one thing that I pulled out that I thought was interesting. All right. You spoke a lot about retirees investing.

In 2018, BlackRock commissioned a study of 1,150 American retirees. And when we dug into the data, we found something unexpected and even paradoxical. After two decades of retirement, the average person still had 80% of their pre-retirement money saved. If they had invested, and I'm skipping ahead here. If they had invested for retirement, they were likely sitting on more than enough money for the rest of their lives. And yet the data also showed that they were anxious about their finances. Only 32% reported feeling comfortable about spending what they had saved. So here's the coup de grace. This retirement paradox is

a simple explanation. Even people who know how to save for retirement still don't know how to spend it. I agree with that. Oh, so true. This is a first world problem, but it's real. People have been taught their entire lives to save, to save, to save. And when the saving gets turned off and it's time to start to spend, there's a lot of anxiety around that. Absolutely. Well, it's because you don't know. And I had this conversation with my father who is retired, has been retired for about,

I want to say 20 years at this point. Oh, wow. So he moved to Ghana in West Africa where cost of living obviously significantly cheaper and he he's still like he doesn't pay for hot water like the man is so cheap he will not pay the extra charge what is he saving right so like what are you saving if not that then what are you going to spend on his answer to me actually was enlightening he was like because i don't know how long i'm going to need it and that's well it's true he really is thinking like I might live to a hundred, 120, like this is, you know, and that's the, that's what induces that uncertainty. And that fear is like,

what if I run out and then I'm a hundred years old and I just, I don't have any money. This is crazy though. They, people, people are between 75 and 95 in this study, and they have 80% of their retirement money still in that age group. I mean, yes, of course. We don't know how long we're going to need it. And one thing about serving wealth management clients in general, they tend to have better health outcomes. And so the life expectancy doesn't really apply to them in the same way. No tracks. Right.

You talk to the top decile of people in terms of income or net worth or whatever, they are not on average living to 75. They're on average going further. Right. And if you make it to 75, you have like a very good chance of making it to 90. Right. So like just statistically. Yeah.

So it's wild though even given that how much money people are still hanging on to. And we see it in our industry. We see people borrowing money against their portfolio as an alternative to actually having to take the money out of the portfolio. That's interesting. And knock on wood, the S&P is doing 13% a year annualized for a decade. So they can. In that environment, you can do that. But it's really crazy to me.

How do we fix it? Well, I mean, the other thing is if you're 80 years old, what are you spending your money on? Like, what are you really going to buy? Health expenses. If you talk to my financial planners, they will tell you these conversations are difficult, but people listen. You say to them, like, what's the thing you really wanted to do or we put all these things in your plan you never did any of them yeah it ain't gonna be more fun in 10 years yeah like at 70 this is gonna be fun at 80 this is gonna be a chore so are you doing it or not like like those kinds of conversations which

uh easier said than done can you explain this dxyz shit to me? Am I taking crazy pills? We're doing this again? I was going to ask you. No, I definitely can't. Please. No, enlighten me. You have no idea what this is? I have no idea. I'm blissfully ignorant. This might be the craziest meme stock of all time. Oh, come on. Look at a chart. It sounds incredibly inefficient. Okay. This is, here it is. Here's the story. Just started trading. It just started trading. It's a closed-end fund. Most people don't know what that is in this day and age because it's mostly ETFs.

They don't create or redeem new shares of this. So however many shares there are, that's how many shares there are. It's a net asset value. Right. It has to be a closed-end fund because the underlying is not liquid stocks. It's venture capital, privately held companies. Oh. So people that want to invest in SpaceX and Starlink and all these things,

they can't get access to it. This really clever guy listed a closed-end fund with $50 million worth of private investments. So of course, immediately was worth a billion dollars. Of course. Well, because why wouldn't it be? Why wouldn't it be? So it's $50 million worth equity private equity assets being valued at a

billion it trades from eight dollars to 99 like instantly that's incredible this makes this makes gamestop look like a joke okay i want to give a very analyst perspective here please in a sea of cons that we could mention about DXYZ, I mean, the pro is this is giving access to an inaccessible market. You're reaching, Callie. Yeah. I believe in that. You're right. You're right. You're right, but

I stand for that, but let's go to the cons. Alright. I just like that we could talk about this, because to me, the funniest thing that's ever happened is this DJT stock, and I can't talk about that, so we could talk about this because to me, the funniest thing that's ever happened is this DJT stock. And I can't talk about that. So we can talk about this. Destiny Tech 100 is what it's called.

Matt Levine, of course. This thing was almost invented for him to write about. So he writes, the portfolio is worth $52.6 million, give or take, or about $4.84 per share. That value is uncertain. Obviously, the private assets, they get marked every quarter, and it's a bit stale, but it's probably close enough. The stock opened in the direct listing at $8.25. It closed yesterday at $99 per share for a market cap of $1.1 billion. That's a 1, nine hundred sixty one percent premium to net asset value. If every one of the fund's holdings goes up a thousand percent by the time they go public,

the people who bought into this fund today will lose money. Yeah. So, yes, it's nice to get access to private markets. Maybe not like this. Right. Yeah. Yeah. a bad look. I'd pay a premium, but... Matt's advice to the guy that founded this? What do you think his advice was? Callie, what would you guess? What was the question? Matt's advice to the guy that founded this? Oh, I'm reading it right now.

Get your money? No, do another one. No, sell as much stock as you can. Secondary offering immediately. Oh, absolutely. Yeah, why would you not? It's free money, and it's arbitrage. You'll bring the price closer to the actual value. So, why would you not? It's free money. And it's arbitrage. You'll bring the price closer to the actual value.

So how do you explain this? People are f***ing stupid. I've been telling you. I've been doing this show since 2021. No, but people have not suddenly got stupid. People buying this at 80 don't think that they're getting a deal. They think another asshole is coming along who will pay 85. And they're right.

It's a mean stock, yeah. And that happens until it stops happening. But that's a game. And by the way, if you bought it at 20, 100% above what it's worth, you killed it. So we— How many did you sold? Speaking of which— I don't have many of them sold, but—

Speaking of which— I hope so. Lottery tickets. Yeah. So tell me what's happening here. All right. So the economist—did you guys see the story? The economist said in 2023, Americans spent more than $100 billion on state-run lotteries.

That is a lot of money. Wait, in one year? In one year. State lottery. These are healthy margins. State lotteries kept around 30% of ticket sales on average. So that'll fix the deficit. Yeah.

And they've got a chart showing ticket sales and government revenue. And it looks like it's just, it looks one way. It's just, it's unbelievable. So here's the upshot. Using zip code level sales data from 24 states, they estimate that each 10% decrease in median household income is associated with a 4% increase in lottery spending. So this is heavily regressive, obviously. They say age and ethnicity were also correlated with lottery sales. Older and non-white Americans are more likely to play. Next chart, please. I mean, this is really wild. So the chart that we're looking at, I'll describe it via text. In the poorest 1% of zip codes that have lottery retailers, the average

American adult spends around $600 a year or nearly 5% of their income on tickets. That's unbelievable. Is it really that stupid though? If you think about like, this is their shot. No, the word is, is it irrational? And not really. No, it's not irrational.

No, it's not. I would say it's irrational. I just, I understand it though. Yeah. Because I live in the Bronx. And so like- People do win. Yeah.

I know the odds are not great, but- Someone does win, yes. And they usually win a lot of money. You can't win if you don't play. Hold on. Okay. I know the odds are not great. Someone does win, yes. And they usually win a lot of money. You can't win if you don't play. I'm sorry. We can't be on a financial show encouraging the lottery. Encouraging people to buy lotteries. It's a bad idea.

What's the state? The New York state? Why not? What is it? You have to win it. No. You have to win it. Why not you?

Why not you? My wife used to use that line like cause it's not gonna be you yeah the lottery is a con like to be clear but I get why people want to buy into the con

it's this idea of like things aren't going great but if this if this lottery ticket hits everything's gonna be different oh hey you never know hey you never know that's the line

hey you never know but you know what though do you know what though there are people that just know that they don't have any mobility opportunity. Isn't that what we're talking about? Yeah, it's YOLO capitalism.

So in other words, they spent how much? $600. So people in the lowest income bracket. 5% of their income. Well, first of all, that's probably not coming out of their income. In that bracket, there are people that are getting some form of public assistance. It doesn't matter. It's their income.

I get it. But I'm saying people don't getting some form of public assistance. It doesn't matter. It's their income. I get it, but I'm saying people don't necessarily think of it that way. But it's not the craziest idea when you consider the alternatives, which is to never take any chance on anything and have zero chance of...

So is $600 excessive? Are you advocating that they spend more? No, I just don't think it's this... Josh is bullish on the lottery. I've never bought a lottery, honestly. I bought like scratch-off No. I just don't think it's this. I don't think it's this. Josh is bullish on the lottery. I've never bought a lottery. Honestly, I bought like scratch off stuff. I've done like office pools when the thing gets to like $2 billion or whatever. I don't.

So here's the other thing. I don't gamble at all. I don't have that gene. No, I'm the same way. It's like a way to be part of something. But $100 billion is, I mean, that is a lot. No, it's people that go to the store every day. They buy a lottery ticket.

They got their lucky numbers. I also think that this data is heavily skewed by the junkies, for lack of a better word. The people that spend all of their money there. I don't think the average person is spending 6% or 5%. I mean that would host, but it's not. I mean it is the average, right? Right. But I'm saying the average is dragged up a lot by people.

Well, if that's the case, someone is doing a bad job because you should, you know, like average. Is it better or worse though than somebody that's betting 12 football games every Sunday? Exactly. I don't know. Way worse. It's way worse. Why is it worse? I think because people are generally generally

responsible with their gambling. It's a dollar though. A lottery ticket's a dollar. Well, I think it's like five now, but... Inflation. See, that's how... How much is it? Two? Two dollars.

So who gives a shit? Well, if you buy 20 of them, it's not two dollars. So I'm not advocating buying 20 of them. Josh, say buy 30. But when you buy two, when you buy one or two

every day, every year, right? That's a good amount of money that you could have put towards something useful. If you buy two tickets instead of one, you double your chances of winning. Am I right, Josh? Why do you, yes, that's how it works.

Why do you think the pandemic has made people more willing to spend on lotteries? Because to me, that's just stimulus. To me, it's just they have more money. It gets back to this idea of like it's not actually a great economy for a lot of people.

There was a spike. It's been going up, but there was a spike. Yeah, yeah. There are a lot of people for whom the economy is not good. It's not working for them. And this gets back to the Fed argument. I don't think we have time to really get into this part of it. But like the economy looks good on a lot of levels.

But there are a lot of people – and actually the journal just did a story about this last week. There's this growing group of people who aren't poor enough to get federal assistance, but aren't making enough to feel like they're actually getting by, to feel like they actually have money left over to do anything. I think I saw somebody make the case that capitalism can't work for everyone. Like that's one of the reasons why it works. And this is not like a unique thought or something I'm advocating for. It was just an observation that there has to be winners and losers.

Yeah. But the pile of losers seems to be growing. Yeah. Or are we more aware of the losers? I don't know that we're more aware of the losers.

I think the winners are taking bigger games. There's more, well, that's true. But are there more people suffering economic hardships today than in the past? I think there's a, I just, I don't know think there's a, I think the economic hardship is just different. What I think is there's a lot more people who, again, they don't qualify, right? Because they're not,

they're not meeting guys. They're not poor enough to get these federal subsidies, but they still, like they feel it. And I think also the just gargantuan wealth that exists now, you, people see that, you know what I mean? People see people driving around Maseratis. Like when did you ever see a $300,000 car? It used to be you'd have to go to like Beverly Hills and you could see maybe, you know, a Rolls Royce or something. Now they're everywhere.

It's relative and visible. Yeah. And I think it's just very, people are very aware of just like how much money is out there. And so it's like, it used to be that, you know, if I was making $25,000 a year, I'd be all right. I could take care of my family.

I got a little, you know, government assistance here and I'm okay. But now it's like, no, I see how much money everyone else has. Yeah. And I'm aware that like, I don't have anything put away. Like I'm just getting by. And I think people are really feeling that. Totally. I think that's right.

So the way that I'm bucketing it in my like visual mind is you have the current conditions, you know, how is my budget doing? What can I afford? But then there, there are the aspirations too. And the aspirations are slipping away to what Dion said, the Maseratis, you know, I can't afford a house anymore. That's a real problem. But you know, current conditions, and I'm not talking on behalf of anybody, but I think you can make a case for people are better off, but they were put so far behind by the 2010s, especially if they weren't invested, that there's so much to catch up to. Yeah. And that's what triggers that gambling impulse. It's like, if I don't take this shot, it might never happen for me.

And my dream is to be owning a house. There are some amplifying factors, though. Yeah. The Bitcoin gamble that your friends took. And my dream is owning a house. There are some amplifying factors, though. The Bitcoin gamble that your friends took. It worked. It worked. Like, obviously worked. It worked depending on where you bought in, right?

Like, if you bought in at the peak, you're still down. If you bought and lost your keys. Yeah, or if you bought and lost your keys. You're in good shape. That's that. That's very visible to people. And they remember their friends telling them or their family members, like, do it, do it, do it. They didn't do it.

And then two years ago, they were like, see, that's why I didn't do it. And now it's like, oh, shit. I had two chances to do it. So it's that. I think social media amplifies these windfalls that people are experiencing. And it makes it seem more widespread than it really is. We also shouldn't forget about how unaffordable buying a home is, right? Yeah, it's out of control. Affordability is the lowest it's ever been.

Also, you know, college, health expenses, all these things that have actually continued to go up on this ridiculous trajectory. To me, the home, it's almost, not almost, it's a national crisis. Yeah. Like, it's that bad. I would go that far. It really is. Like, I'm not being hyperbolic.

It's not bad. Affordability for a home. Affordability. If you're trying to buy a home for the first time, you are beyond f***ed. Unless you have an inheritance that you can take today, you're not doing it. Yeah, and the Fed can't get us out of this. I would call it a national crisis because there's some serious policy changes. Oh, yeah.

What do you think happens to the value of houses when they cut rates 200 basis points? Think they're going down? I mean, the millennials are buying houses right now. They're buying it regardless of who's retired. But I'm saying if you make mortgages cheaper, you think that's going to help anybody? Right, no. Not really?

No. Okay. Guys, you have fun on the show today? Yeah, of course. Well, listen, it's called The Compound and Friends for a reason. You guys are the end friends part. There's luck here. You make the show and we appreciate you so reason. You guys are the end friends part. There's love here. You make the show, and we appreciate you so much.

Thank you guys so much for coming. We're going to close with favorites. Callie, let's hear from you. Are you deleting your favorite as we're about to go to you? I'm not. I'm reminding myself of my favorites. What do you got? Because I have so many.

All right, so I'll give you three. Tim. I got to look for that. Give me all three. What do you got? So Tim Ferriss' podcast episode with Barbara Corcoran. I love her. It's like a few weeks old.

But Barbara is the master at marketing and turning it into business. And I'm a nerd who appreciates that. Really good conversation. You got to look a few weeks back. The Power of Now by Eckhart Tolle. I'm in a really heady space right now. So Eckhart Tolle is a spiritualist and he talks about, you know, living in the present and why it matters and how you can do it. That's what I'm reading. Very heady. And then

I remembered this because I heard it on a podcast, but there's an awesome blog post by Paul Graham. It's from 2009, very, very old, but it's called the maker manager schedule. And it's all about how you can, if you have like a creative role that also involves some management or some like interfacing that you have to do with employees, it basically teaches you how to organize your schedule and why it's important to basically walk your life. I need to read this. You do. It's very good. I'm really not good at that.

Yeah, you should. Honestly, I struggle. It's really hard, but he articulates it in a way that's so understandable. And it validates a lot of what you're thinking about. My whole day is meetings, and I do my creative work at night. He's like, yes, this is a thing. it in a way that's so understandable. And it validates a lot of what you're thinking about. Like my whole day is meetings and I do my creative work at night. He's like, yes, this is a thing. It's the maker-manager difference. So when are you managing and when are you making?

And clubbing that together and being intentional about that. On March 3rd, it was a Thursday. Maybe it's not March 3rd, but for illustration purposes only, I sent Josh and Matt Middleton a calendar invite for Friday, March 4th. And then the next morning at 11 o'clock, I see Josh send over a calendar invite. To me, man, I'm like, my invite's no good. And then on Saturday, I see Josh decline the invitation that I sent. That was for like April 27th.

So I sent them the calendar invite. That should have been for the next – remember that? That should have been for the next – I sent it like six weeks out inexplicably. So I think we all struggle with our calendars. I've done that before too. Yeah, none of us are naturally good at this, I don't think. Michael, what are your favorites? This morning on the way into the city,

I was listening to our friend Patrick O'Shaughnessy with Ken Langone. Has anybody heard that yet? Not yet. What a storyteller. Unbelievable. Ken Langone's amazing. Unbelievable. I cannot recommend that highly enough.

I want to listen to that. I think I'll do that. You're going to listen to that I think I'll do that you're going to love it I think I'm going to do that on the way home Dion Dion what do you got I just got two things

one right now I'm reading the Elon Musk biography by Isaac Sin Isaac Sin yeah yeah Isaac Sin like I had not read one of his books

before I want to go back and read the Steve Jobs after this I'm like 70% I didn't read that I read the Ben Franklin one that was so good a million years ago

I loved it so yeah I know because it just I didn't realize what a great writer he is. He's strong. He's quite strong. He's so good. And so I'm just – I'm not a big Elon guy. I feel like there's a lot more hype than there should be.

But the book is incredible and I'm really enjoying reading it. It's important to understand the Elon story whether you like him or not. Exactly. Because he's very central to a lot of big stuff. And Isaacson got to ride along with him for like i think years yeah right yeah okay absolutely and then the other the thing i'm watching is a physical 100 on netflix what is that it's uh challenges yeah it's this thing in korea where they take like athletes wrestlers um just bodybuilders just people who you know put a

lot of work into their bodies and then they make them compete against each other in like either one-on-one or team things. So it's like the first few episodes, they make people go up against each other one-on-one and try to like – it's just you're on these courses and there's a medicine ball. And whoever finishes with the medicine ball at the end of three minutes wins. We have a 5K coming up. The JP Morgan 5K. Oh, you guys, I was going to run that. I'm walking it.

You can't run 5K. I'm signed up for that. I really – I don't know if I'm – I'm walking it. You can't run 5K. I'm signed up for that. Are you serious? I'm dead serious. We should make a team. Wait, do you think you're going to run it faster than I am? I'm walking. I told you.

Will you try to run it and then let me ram that comment down your throat? I will be very serious. Yeah, you can ram it down my throat. I'm literally training. You're training right now? I'm literally training. You better be. Can we have side bets?

I feed on this action. I feed on your doubt. There's no way Josh can run three and a half miles or whatever it is. I feed on your intuition. Wait, wait. We've got to have like a minute though. Like what's the- I don't care how many minutes.

Your mile is minutes. Even if you do it in 40, I'll be impressed. He doesn't even think I can finish it. You can walk in this. He can't- You don't think he'll finish it? No. Oh, wow.

Dude, I'm literally finishing three mile runs like three, four days a week. Okay, good for you then. Are you going to run or are you going to walk? I can't run a 5K. I'm going to disqualify you from it then. No, I'm walking. Can I have Michael's spot? Because I need a team to run with.

You want to be Michael Van Eyck? Yeah. We don't have any walkers. We don't have any walkers. Okay, well. You understand it's a team sport and they're looking at our team time. Do you understand I have shin splints?

You're going to drag down our team average though. Josh, I'm running seven minute miles. Put me in. Put me in. He's going to torch the whole team. Let me get on the team. The problem with you coming in and being that good is that they're going to investigate us.

Because you literally can't have rigors. Let me just get a part-time job right here at Ritholtz Wealth Management. Did you ever run the J.P. Morgan Corporate Challenge? Yeah, I've done it a couple times. I've done it. Michael doesn't believe me. I did it in 2006.

I did, though. Pixar didn't happen. I did, though. Pixar didn't happen. Thank you, Callie. I really did it. I have two favorites. The Future Metro Boomin album is incredible.

Oh, with the Kendrick dissonance. I knew it. I knew it favorites. The Future Metro Boomin album is incredible. Oh, the Kendrick diss. I knew it. I knew it. I knew it would be the minute it dropped. I didn't even have to hear all 17 tracks, but I'm through it like five times and it's like keeps getting better. Did you like the J. Cole album? No, I won't listen to it now because I feel like it's a half-assed project.

No. Oh, because, okay. I don't like what he did. Okay. So he like apologized two days after putting it out. That was bad. He said he was proud of the project. Oh, that's lame. He just said that diss. I know.

It was super lame. And I'm a J. Cole fan. I was like, oh. So my… Jermaine, that was a bad look. It's very mature of him and he's done. Right. Yeah.

He's not coming back from this. So I heard his real new album, The Fall Off, is supposed to be his retirement album anyway. Good move. No, because I don't think you could do what he just did, like honestly. Well, I mean, it's a new day, right? Like I think a lot of people thought when Drake got embodied by Pusha T, that was it for him. And he's not. He actually didn't even respond.

Yeah, that's what I'm saying. And like Pusha T killed him. And he's still, you know, Drake is still out there making number one hits. Yeah. People can come back from anything these days. I don't. It's not the 90s. So if Kendrick comes out with something for Drake or Drake strikes first or whatever,

I don't think anyone can diss Drake as hard as Push did. And it didn't really have any effect. Yeah, that's what I'm saying. What's the album that came out right after Scorpion? And it was like a double disc and he like absolutely crushed it. Like he, I don't, I don't actually think that this is analogous

because Cole basically shot himself in the head. What's your second favorite? My second favorite. I have another favorite. What else am I going to say? It doesn't matter. No, my second favorite

was Physical 100. That was how we got on the JP Morgan Road Race. Guys, thank you so much for listening. We appreciate it. I want to say extra special thanks to our guests. Dion, you killed it today. Thank you so much. Thank you for having me. Cali, absolutely

crushed it. You guys are true returning champions. We appreciate you. Duncan, was there anything else we needed to do? Good to go? Yeah, we're good. Alright, guys, thanks for listening. We'll talk to you soon. I was trying to find that. We really are friends.