Everybody in the Pool (EP.387)

Today's animal spirits is brought to you by our friends at Wycharts. Michael, Wycharts is hosting a discussion on December 3rd with our very own Josh Brown and Wycharts CEO Sean Brown. The Brown brothers looking at the trends of the past year, thinking about what's happening heading into 2025 from changes in advisor client relationships to emerging risks and everything advisors need to know. All right.

Where do we send people, Ben?

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Badnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of 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.

Welcome to Animal Spirits with Michael and Ben. We love our audience. We don't really know our audience that well because the owners, the gatekeepers, if you will, of these podcast apps, they don't really tell us much. I met a fan in the airport last week, which I got to a little bit later in the show. So we have a general idea. We meet them in the wild. We love to meet our fans. But we don't really know who you guys are. So we want to know to better serve you. We're doing a survey.

Basic survey, not too painful. Three questions. No, no, no. One, three questions, come on then. Oh, it is. Oh, the first page is three questions. Three questions. One, do you like edible spirits? Two, how tall are you? Three, are you a Michael person movie or a Ben person movie? Yeah. So anyhow, we're gonna have a look in the show notes we would love if you would share some information, some thoughts, if you would, if you will.

Give this show away for free. This is the least you could do. Thank you. Right? Okay. Speaking of our audience, we had a live show in Chicago last week and it was great to get out and meet some people. And we had a great, great group. We did it with FM Investments and Alex Morris. You can expect to hear that live show soon. It is fun to meet people out in the wild because I feel like, I don't know, half a dozen people asked for our origin story. Like, how long have you guys been actually doing this podcast for? Because we take it for granted. Not everyone's been here since the beginning. Yeah.

Everyone said a while, we'll get an email from someone saying, hey, I'm an OG here. I've been listening since the very first episode. That's really cool. But other people have come along the way. And I feel like, oh, people didn't really know that. So we've been doing it for seven years now, which is kind of insane. Wow. Right? So it was November, 2017. Does my math check out there? Mm-hmm.

That's a long time. But it was awesome to get out and meet people and hear people's stories and what they do and when they listen and how they listen. And it's very fun to see people in the wild because you're right with the survey thing. We don't get to see our audience. Sometimes you forget that someone's on the other end of this thing and it's just me and you talking. Yeah. To my detriment, sometimes I do too good a job forgetting. I told you a couple of months ago, I was listening, I'm like, wait a minute. I'm not. There's people listening to this. It's not just me and you Ben. Although that's what makes the show work. One more thing. So I was on the road last week.

In seven years, I think we've missed two episodes. I think the first one is my fault. The second one is your fault. I'm going to be potting from Tropical locale next week. Where are you going? Dominican Republic. Very nice. What else was, oh, yeah. Oh, Philly. We're in Philadelphia. Seeing our tax team. We need accountants. If you're an accountant,

You want to work with us, especially in the great city of Philadelphia? Please reach out. There's a national shortage of accountants. You know this one? Like all counting aside. Well, especially accountants who can work in the RA industry.

Right? Have that dual threat? Yeah. We're looking for, we're looking for Neil in a haystack. This is something I've talked to a handful of financial advisor groups over the past couple of weeks. And this is something that every financial advisor group is thinking about doing. They want to implement tax into their practice. Yeah. And we've done it and it's, we've gotten great results because people love it. But yes, we need many more accounts. So we want to... If you reach out, Mike, make sure your email etiquette's okay and Michael will respond.

Let's I respond to everyone. I've got calls today. I respond to everyone. I give my phone number. Just give me a call. So we went to the Sixers game. What a travesty. This Joellen beat us. 11 points, three rebounds. 31 minutes last night, not a single foul shot. Sixes to two and 11. Dumpster fire. Jeez, that was kind of harsh for the Philly people. How would you describe that?

I don't know, I didn't watch the game. Maybe he had some good moments too. I didn't watch the game, but all right, enough of that. Let's get to it, Ben.

So not just because of the show, but I feel like the word or phrase of the past week and a half has been animal spirits. I see it everywhere. In the headlines, I see it in the Wall Street research reports. This is from Bloomberg. The S&P 500 will source 66% to 10,000 by the end of the decade from Edgar Denny. He says the animal spirits being set loose by the economic policies of President-elect Donald Trump will send the S&P to 10,000. This says this is an uber bullish prediction in Bloomberg, but

I, it sounds like a lot, but we're at 6,000. So going to 10,000, that's back at the envelope, 10% per year at the price only. So add some dividends. I like how you just, I like how you acted like you just did the math in your head. That was cute. I totally did it. My head. I'm like, don't, don't, don't get us roasting us that, uh, the anti survey podcast that we are, we'll come back to bite us asking people to fill out a survey. Hey, this is an actual server that asks people the right questions. We're not leading people. Yeah. That's the pro. Yeah. We don't like the way that survey questions are framed.

Yes. Yes, simple yes, no questions. This is a real survey, Duncan, I'll have you know. If I was doing a survey like the survey places do, I would say, Michael's movies are terrible, don't you agree? And people would say, yes, I do agree. So I've got a little movie, Slack channel with some of the guys from RWM. Actually, we're having a date night. Six of us, we're going to see Heretic.

Uh, tomorrow. It's gonna be a good night. Weird to not go to a movie by yourself. That'll be fine. I'll be fine. Here's a question for you. You're going, you're going to a movie with five other adults. Mm. Will you guys sit shoulder to shoulder or will you leave a space in between? Absolutely. Shoulder to shoulder. Come on. Okay. Just make sure. I went to a movie one time with some guys and they did the in between and it felt kind of weird.

Yeah, well also, there's a science eating, so we have no choice. But you mentioned Michael movie. So over the weekend, somebody said, hosts were so scary, great call, and somebody else said, kill us. Awesome movie, paraphrasing. And I said, this is how I feel reading these messages. And it was Xerxes from 300, where he's like this, you know, he's like the God King.

You ever see that movie? You never saw 300. Well, I've seen 300. Yeah, I don't remember it that well. The only part I remember is pushing the guy down the hole. Great movie. Not a Ben movie, because it's good. At our live show, I was talking to someone, one of our listeners, and she was telling me, she pointed over to you, and she said, see the guy that is totally monopolizing Michael's time. They're talking about the terrible movies that they like.

And so she was saying, I'm a banking person. She said there's a person here who is just geeking out with Michael about these movies. And she said the thing that she loves so much about the show is the fact that we are total opposites.

I was thinking that's the dynamic that works because we are total opposites in a lot of ways. It's true. Very similar in a lot of ways too. Okay, so anyway, 10% per year by the end of the decade, he also says we don't expect another bear market through the end of the decade, but there will undoubtedly be a few corrections along the way. I would never go as far to say there's not going to be a market, regardless of what I think the returns are going to be. But 10% through the end of the year or through the end of the decade, do you think that sounds high-ish? Because I feel like people are lifting their estimates.

Does 10 percent, first of all, of course, we're going to have corrections to bear markets. What? When have we not? No, he said corrections along the way, but he doesn't expect there to be a bear market. He does not. Over the next four years, he does not expect it there to be a bear market. Well, it's actually five years, six years, five years. That's bold. Possible, I guess. Yeah, you never know. So here's- Does 10 percent of your sound aggressive? Yeah. Based on what we've experienced for the past 15 years.

I don't know, man. It doesn't sound that aggressive to me in terms of uber bullish, but I guess maybe putting context of where we've been. Maybe some people would think that. I was walking down in Manhattan last night. I don't know what I was thinking of this, but there's just so many people out and we spoke about this. Who do we speak about this with? On TKF, Josh was talking about, was it Dr. Kelly maybe?

Um, and it's like sort of like the thing that you really forget about saying out loud. You didn't want to think of it, but I'll say, I'll both think it and I'll say it out loud. Do there need to be boom bus or, and, and cycles the way that there used to be in an economy that's so tech based, service based, software based?

Like are we gonna be less prone to over building booms and busts in a digital world? Like the cycles of the past. Now, I know like, I think you could say, well, cycles are like a human natural phenomenon. So like, why would this be any different? But I think the business cycle used to be different because the inputs were prone to booms and busts. How about this? That theory works well. The economy, not the markets.

So I think we could, because we've already had, we've had a single recession in the last 15 years and it was two months long and it was man-made. So that theory has already proven to be true. The last 30 years, we've had very few recessions compared to what it was prior. We've had, the cycles are getting longer, but we've still had plenty of bear markets and ups and downs in the market. So how about that? So I don't think you could ever take that away in the markets because we are constantly overreacting one way or another.

Now, somebody could say, hey, dumbass, hey dumbass, $500 billion in CapEx into AI. What are you talking about? We can't have booms and busts. Right. Right? So like, maybe we're setting ourselves up for a bust right now.

I don't know if that's, you know, I don't know how to handle that. Who messes come first? So this is from Gunjana at Wall Street Journal. US equity exchange and mutual funds drew nearly $56 billion in the week ended Wednesday, the second largest weekly haul on records going back to 2008. You can see it from the chart here. The first one was, looks like earlier this year. They interviewed this guy who was talking about his stock picks, and he says, I am bullish on the market.

the euphoria everyone is feeling is warranted. Now here's the thing, I feel way more comfortable in a bull market that is built on a wall of worry. I actually start getting a little nervous when it's everyone in the pool, but you don't want to get in front of that freight train when everyone's in the pool. So I feel a little conflicted now because

It does seem like things are set up, right? People are saying, well, corporate tax rates are gonna fall. There's gonna be deregulation. That'll help profits. That should, but if everyone now believes things are great and it is everyone in the pool. Mike Wilson just put out a higher target, for example. But here you've been and I don't disagree. I'm just saying, just playing the other side for conversation sake. Anytime over the last 15 years you tried to be too cute. Oh yeah.

Like, is the fact that everybody is bullish, really a reason to be bearish? Like is it really a reason to be bearish? Outside of like, you know, outside of somebody that has really no stakes other than trying to make a name for themselves or trying to, you know, be a contrarian for contrarian sake and if they're wrong, there's no, there's like, okay, fine. Are you going to sell your stocks? Because everyone's bullish.

No, no, no, but here's my worry is that we get another 2021 situation where everything gets crazy and stupid and then you get like a little boom and then you have to have the other side of it. That's what I think was probably setting up for. Rob Arnott was in this article to it. He said, the market is awfully expensive to have a melt-up, which I completely disagree with. If there's a melt-up situation, guess what no one cares about. Fox will be expensive. Valuations. Yeah, and shout to Rob, but he's pretty sensitive on valuations that has been this entire time.

Yes, speaking of chart kid Matt, did this whole little chart deck for me of different value issues. Value issues don't matter on the way up at all. If anything, they're supportive of a bull market. I think, not I think valuations provide little margin of safety on the way down. Like it doesn't matter until it does. Exactly. I mean, some people can say, well, it's going to be quick. People are going to be quicker on the trigger finger, finger trigger. What does that mean? Trigger finger. Trigger finger.

to your finger, if cause values are high, but I don't know. So this is, Matt did this for me, our chart kid, and he looked at the forward PE ratio on election day, going back to 2004. And this really surprised me. So the stock market from election day till now, from Biden's election day is up 90%ish, which is kind of funny. It's actually similar to what Trump's first one was. So it's up 90% over his four years. But in that time, the four PE ratio has gone from 21.4 in 2020 to 21.6 in 2024.

We've had a huge boom in the stock market over the last four years and the valuations have gone nowhere. Why? Because earnings are up. Look at the earnings estimates. They're looking how much higher the earnings have charged since 2020. They're the brief dip in COVID and they've just taken off. Well, they better come to fruition because the market is now expecting 17% earnings growth year for 2025. That's a lot. That's a lot of Blackwell chips.

That does seem high, but the counter is, according to Matt's chart here, small caps and mid caps are still very cheap. How is that way? Way cheaper than they were heading into the pandemic. That's not a counter. No, and the counter being

It's not that everything is like people think everything is overvalued. If you want to look for overvaluations, it's literally one piece of the market. And even that is my point is it's not as overvalued as some people are laying it out to be. That's like the one counter right now is sure animal spirits are here and things are going crazy, but stocks are overvalued. And they're not as overvalued as people would think. It's my point. Barry Schwartz tweeted, massive bubble with this much growth. Stop it. So he took a screenshot. I don't know where this is coming from. He says,

The S&P 500 forward 12 on PE ratio is in the 91st percentile since 1985 and representing an 18.3% premium to its 10 year average. Additionally, I'm skipping ahead, the peg ratio, which is price earnings divided by growth is currently 1.26 times ranking in the 52nd percentile since 1985 at a 10% discount to its 10 year average.

So yes, things look expensive in a bubble, I mean, excuse me, in a vacuum. You have to adjust for the fundamentals, people. It's not, we're not all dumb idiots. It's growth. Dumb idiots. It's not maybe stupid, but I'm not dumb. The reason why stocks are getting this sort of valuation is because the growth is off the charts, you dumb idiots. I'm not gonna lie, I haven't seen the peg ratio since I read one up on Wall Street with Peter Lynch.

You don't see that one thrown around very often. Well, you should. I'm here to bring it back. All right. But the other side. So if we're playing devil's advocate to that, people would say, OK, the fundamentals better come in. Because if they don't, then the market is going to be, what is it? Trigger finger.

My friend just texted me, I forgot about this. There was an article in, I think it was done by Pew Research. It was talking about like road rage, incidents of road rage. And I was putting in the article, but I took it out, the article, the doc is long for this week's show. And it was like 25% of people of drivers have witnessed road rage.

Oh sure, probably, I mean, way more of experienced it, right? So I'm tangent on, I've got three tangents going on right now. I'm doing the Trump weave. I was walking home from the train station the other night, and there's an older gentleman pulling out of a parking lot with his in his car, and he doesn't see me. It was getting dark, so I understand. But I'm knocking on his hood, because he's like still going, like he's about to like go into me, like really and truly like to which is why. So I'm knocking on the hood, and he's not stopping. So I start knocking harder, harder. And I'm like,

Dude. Was he on his phone? No, he was just old. And he didn't hear me banging on it, the hood of his car. Okay. Anyhow, so I wasn't. So you could have gone viral by like jumping on his hood or something. It could have been over for me. Like he really could have killed me. So I had an experience of elevator rage less, not elevator. I can't get that elevator and escalator right in my head, escalator rage. Okay. At the next game last night. So my friend and I,

are going to the arena and we're on the escalator. And this guy like runs in between us and like, you know, banged one of us. And my friend said like, my friend said something. Good luck getting to where you're going. I can't remember what he said. And the guy got so mad.

And we're like, dude, we're joking. We relax. And it's like a little angry dude. We're joking. So he's waiting for us as he gets off. I'm like, dude, go to your seat. We're kidding. And he goes, I bet I have better seats than you do. Oh, man. Wow. It was a hell of a birthday. My dad could beat up your dad. Yeah. And we started giggling in his face. It was quite fun.

So yeah, escalator rage, that's first. Okay, yeah, that is funny. Like, do you think by cutting in front of us, you're really gonna make, you're gonna make to your seat five seconds faster? Is that really gonna help? Yeah. And we were playing the Wizards of all things. Yeah, who cares? I have a basketball story later for the show, basketball game story. So my best compliment I can provide to another financial writer is, man, I wish I would have written that. Like that angle, that piece, that,

quote, whatever. And I've thought that a lot about John Reckon-Fayler over the years from Morningstar. I've been reading him for years. I don't know how long. 15 years maybe I've been reading him. It's been a long time. He wrote his farewell article to Morningstar and he didn't do like, here's all the stuff that I've done that's great. He used it as a tribute to the miracle of US equities. And he talked about how he joined Morningstar in 1988.

And he said, I want to read a little of this. He says, among the first issues of barons that I read featured a gentleman named Bob Prector who predicted that the Dow Jones industrial average would soon drop to 400. At the time, the Dow Jones was at 2000. It's not just north of 44,000. While the claim was extreme, this sentiment was typical.

The arguments against stocks were legion. After 12 years of GOP prosperity, a Democrat was in the White House. Equity investors were irrational and exuberant. The caper ratio showed that stocks were historically expensive. The global economy's new normal after 2008 global financial crisis with depressed equities. The Federal Reserve had propped up the marketplace through its policy of quantitative easing. Beware when it removed those training mills. That is my salient career memory. The perpetual belief that equity investors had missed the party, yet they never had.

USA. I love that. This is the wall of volume thinking of. I love that. He goes through and he shows the returns, but he also shows the nominal earnings in his time since 1988 are up tenfold. Real earnings are up fourfold in basically saying that people have been doubting the stock market my entire nearly 40-year career, and betting against the US stock market has always been

the wrong place to wait to do it. Optimism is the default setting. Who wrote that post? Was that you? Morgan? That was Josh. Josh, oh, okay. Yeah, a classic. But yes, really, really well done. Always a big fan of his, but I love that he just, and the usual caveats apply. Like, well, winners write the history books and we don't know if this is gonna blah, blah, blah. But I'd be more surprised if the US stock market didn't do reasonably well over the next 40 years than did awfully. Yeah, anyway, John Rockefeller, thank you for

Yeah. We, you know, Ben and I and hundreds of thousands of investors have learned a lot over the years. Very straightforward, common sense guy. This is a straight shooter. Very straight shooter. By the way, that's a phrase that doesn't get enough play. Let's bring it back. Do you think it came, it came from office space? Yeah, I had to. More or less. I'm in. Okay. So you spoke earlier about like the ETF flows.

And we're at a record already, 913 billion so far, breaking 2021's haul, article from Bloomberg. I just, I continue to be bewildered by where this money is coming from.

Right, especially since money markets are continuing to rise. I genuinely don't understand. Are we still doing the mutual fund thing? Maybe that's a big part of the story. I think a lot of the mutual fund conversions that are actually being done is a big part of the story. Could this be a lot of baby boomers that are rolling over 401Ks and doing that sort of thing?

I don't know how many money though. Anyway, ETFs for the win. Balchunas also tweeted NVDL, which is the two-time NVIDIA ETF. Now is more assets. It isn't hat-tipped to Todd Stone. Now is more assets than ARK, which is hilarious. So what, that's $6 billion or something? So who, oh, Bill Kerwin wrote an article over at POC about the downfall of Cathy Wood. Has ARK lost money for the last four years? Is that possible?

for each of the last calendar, less four calendar years. Let me look it up right now. And again, not to dance on her grave. No, no. So they were up 150% in 2020. They were down. No, but in one, two, three, and four. Oh, OK, I got you. Over five, you over three years, they're down 21% per year. Over five years, they're only up 3.7% per year. For each of the last four calendar years, including this one, are they down?

Either way, they were up last year. Okay. A lot. They were down huge in 2021 and 2022. And they're barely up this year after we're down earlier. The fact that an innovation ETF missed the biggest innovation of the last, I don't know how many years is rough. It's hard talking about. Yeah, it's hard. Yeah. How do you own an innovation fund and not own Nvidia?

Okay, speaking of Nvidia, from Jeff Waniger, so in terms of like things being frothy and the biggest stock being the most expensive stock. Wait, can you imagine though, if she would have nailed that AI trade, she would be like walking on water right now. Yeah, she'd be King Xerxes. Okay, so you said that correctly. I think I said it correctly. Jeff Waniger from Wisdom Tree tweeted, Nvidia's total value is 3.65 trillion. It's within a trillion dollars of the total value of the Nikkei.

This is used to be the biggest stock market in the world. Japan is the second largest stock market in the MSCI, all country world index. So Nvidia is larger, not larger, it's not larger at all. Nvidia is a trillion dollars away from being larger than the second largest stock market in the world. Seems kind of nuts. So we now have three companies that are worth more than 6% of the S&P. Nvidia is the largest holding now at 7%. Apple is close to, it's 6.9%. Nice. And Microsoft is like 6.2%.

So those three companies alone make up almost 20% of the market. Concentration is getting out of control as they've been saying since 2014. All right, so my euphoria trackers, it has to be Coinbase and Robinhood, right? So this year alone, I got to update this. No, no, no, I think I don't think Coinbase is. Coinbase is crypto.

But yeah, but that's like a risk on. I'm looking for like risk on, like animal spirits are released. So Coinbase is up 90% this year. Robinhood is up 175%. Look at these long-term charts of these companies off the highs from their IPOs. They were both down 90% from their IPO highs.

And Coinbase has almost climbed back. They're still in like 20%. Robin Hood is still on a 50% drawdown. But remember, it had the huge spike right out of the gate. But. No, it's coming next year for you, the four year tracker, SPACs. Going to make a comeback. Yeah. I don't see why not. Right. And one of the things that Gensler did well was.

I think he cleaned up the spec stuff. I think also investor appetite dried up. So I'm not exactly sure with, you know, chicken or egg, but. So 2025 is going to be the financial purge. Yeah. Right. Anything goes? Yeah. Get it all out. All right. Uh, okay. Uh, turn to the economy. Mike's to Cardi via via this Bank of America, the median checking and savings deposit balances have declined over the past year for all income cohorts.

but still remain above inflation adjusted 2019 levels. Okay, surprising. The median, the monthly median household savings and checking balances by income, by income. So on their 50K, 50 to 100, 100 plus, all have a higher checking and savings balance. Adjusted for inflation, adjusted for inflation, that 2019.

Ever just has more money everywhere. So this isn't coming down enough to explain the ETF thing either, like where the money is going in ETFs, right? It's not like this cash on the sidelines is also like going into the market or something. And I don't think people would look at checking account balances that are high as a source of cash anyway. Somebody sent us a, this is from visual capitalist, a chart, a table, a visual of US government income and expenditures.

And of course, the total outlays exceed the total receipts by, oh, $2 trillion, give or take. So Elon and Vivek and the Doge thing, what does that stand for? Department of government efficiency. Did I lose you? You're muted. Ben, there's no reason to touch the mic.

I didn't touch the mic. I think I hit mute because I was clearing my throat. I was looking out for the audience. We had a nice video. We were sending around videos a couple weeks ago of, speaking of podcasting for so long, you used to literally eat a salad while we were recording. You would pour a huge salad, you shake it up in your bag, pour it into a bowl, and you'd literally be eating the crunchiest thing possible into the microphone.

We have many videos of this, of you shoving... There is evidence. There is evidence. Huge pieces of lettuce in here. Oh, you know what I said last week? Hand up, okay? I can laugh at myself. Hand up. I can notice, I said my mom's quote. I can notice a fly on somebody else, but an elephant on myself. I was on the phone with Best Buy.

I need somebody to come in and like install my ring cameras or something. By the way, they just put on my, I just got to call their invite for January 17th at three in the morning. What? First of all, it's going to take two bucks to send somebody over here to just install a ring camera. Number one, number two, three AM. It's like somebody fed finger that. But either way, I left Best Buy, I didn't hang up on Best Buy. I was on the telephone with them. And after two minutes, they were like, hello?

You did it. Yeah, they're like, sir, could you please hang up? Why didn't they hang up? So guilty. I am guilty, OK? I am. I am a known world-class hypocrite, apparently. See, I'm very fast on the trigger finger with the those things because they take forever to say goodbye. Speaking of phone etiquette, you called me last night. Are you calling to tell me the escalator store or was that a butt dial? All right, but I'll notice I didn't call you back because that's the etiquette.

You do it right, quite a tier. That was about that. Okay, getting back to this chart. I mean, this is just the way it's going to be forever though, right? People don't actually think that magically we're going to spend less than we bring in, right? I mean, short of cutting social security and Medicare, Medicaid, how else do you really make a dent in this?

Well, hang on. So let's look at the receipts, first of all. Okay, that's not going up, right? We agree. Nobody's taxes are not going up. It is funny to me. I feel like every accountant I've ever talked to over the past 20 years has said, just wait, taxes are going to be going up in the future. They have to. And they always just go down. They never go up. So all right. So forget about the left side. What about the right side? Yeah. What's getting cut first? Social Security? Medicare? Good luck with that. Right. I mean, maybe they'll try, but

Yeah, good luck talking that one through. National defense? I guess you could say the interest could fall if the Fed just cuts rates. We talked about that with our customers a little bit. A little bit of a draw. Not a ton. So yeah, so what the plan is that Elon is going to do to the government, what he did to Twitter? Even firing hundreds of thousands of employees. How much is it really going to save? We spoke with, we had Semblist on the show yesterday. Josh and I did it. And he showed us, he shared a chart with us talking about

non-discretionary spending. So what could possibly be cut? So we compared all of the social security, Medicare, Medicaid stuff in one chart, and that's up until the right, obviously. And then non-discretionary spending, roads, like all the basic federal government functions. And it's not growing. It hasn't grown at all. Really? It's to the bone. There's not much more to cut. So it is just entitlements and interest expense, basically. Yeah.

Okay. Apparently, the economy climbs the wall very well. This is from Torsten Slach, his chart of the week. FOMC has constantly expected the economy to slide on, but it still hasn't happened. This is since 2022 when they started raising rates. And it's one of those charts where they show what the expectations for the economy are and what the actual economy does. And the Federal Reserve has been wrong basically the entire time. And what they thought growth should be and what it actually was. It was way higher than both.

All right. I guess not to be the dead horse on the election stuff here, but I thought this was interesting. Wall Street Journal did a poll on the swing states, Arizona, Georgia, Michigan, North Carolina, Nevada, Pennsylvania, and Wisconsin. And they asked, how do you feel about your home state? How is it doing versus how do you feel about the national economy?

In the home state economy, the net margin was positive. Like we think we're going in the right direction. Our state is doing well. National economy was a total opposite. No, we think it's doing poorly. Yeah. And I do think everything these days really just boils down to vibes almost. There's never one thing, but I think studying the vibes thing is very important because listen to this one from Kyla Scanlan. Did you read her piece on the post? Excellent. Excellent.

Yes. So she says before the election, these two researchers at the Washington Post pulled voters about policies without revealing which candidate proposed them. Harris' were far more popular. Even Trump voters generally liked her ideas more as long as they knew they weren't hers. The point is not that like, oh, these people are dumb and they're misinformed. I think the point is

the way that we get our information. It's easier than ever to have confusing ideas about what's happening. To be the, I'm fine, I'm doing great, my state's doing great, my congressman is perfect, but the national economy stinks.

So there's this book called The Attention Merchants by Tim Wu. And he kind of goes through the whole thing of, it started with newspapers, then it went to radio, then TV, then internet. He didn't really get there in his book yet, but then it's kind of social media and podcasts are the next step. So he says, the modus operandi by Attention Merchants is draw attention with apparently free stuff and then resell it. But a consequence of that model is a total dependence on gaining and holding attention. This means under competition, the race will naturally run to the bottom.

Attention will almost invariably gravitate to the more garish, lurid, outrageous alternative. Whatever stimulus may make more likely engage cognitive scientists call our automatic attention as opposed to our controlled attention, the kind we direct with intent. The race to the bottomless bottom, appealing to what one might call the audience's base reinstinks, poses a fundamental, continued dilemma for the attention merchant, just how far would they go to get this harvest?

And my whole point is that people have always been deceived by advertisers and right, hucksters and salespeople, but we've just never had the way of getting the information out to so many people at the same time in social media. And I do feel like in the future, there's going to be a turning point where people are gonna look back one day and went, what happened here?

to this, you know, the way people feel a lot of stuff in the sentiment or whatever it is or how people, and they're gonna go, oh, social media. Like when Facebook was, and Twitter were started, like the way people consume, it just totally changed everything. I feel like we really did it at a point. What if people say, what if people look back and say, people used to be so naive? What if now is, what if now is not what if? Now is in a normal and people will look back to pre this and say how naive people were. People thought that like,

The news was telling them the truth and that everything was objective. Like what if that's the take? Yeah, it could be. So just, yeah, don't believe anything. And of course the news comes to you from some, some anonymous person. I wonder if it used to be the opposite where people's only exposure to other people's opinions was their dumbest neighbors. And maybe they thought that the people surrounding them were such idiots that their home state was doing poor and the national economy was actually doing well because they heard

opinions from their friends and family and they heard truth from the news. It could be possible that the other people just didn't give much thought to the national economy before. Because you're right, it didn't really impact them. And now people think about it a lot more. And yeah, I don't know. Again, the point here is not to say like, look at how misinformed everyone is. The point is to say like people getting their information from all these different sources just sort jumbles everything up. And I feel like that makes it so the vibes are just more important than ever. Yes.

Yes, yes. Anyway, I've read this book when I came out. I remember. But it's a very good book. It was good. Does he talks about how like when newspapers first came out, advertisers realized like, Oh, we totally understand human nature and we can get these people. And that's the whole point. It's always been going on. But now the megaphone is just is just louder. Yeah. Yeah. I mean, going forward, it's just who can influence the national mood better, which side? Yes. And unfortunately, like technology and misinformation and

TikTok videos and all that sort of stuff. It's a new world. Yeah, the point is not to fight it. It's to figure out how to use it to your advantage, but it's just a different world. So let's talk about crypto for a second. Eric Batrune has tweeted, Bitcoin ETFs have crossed $90 billion in assets.

Uh, they, they are now 72% of the way to passing gold and eat gold ETFs and assets, which is wild considering that gold ETFs came out. And I think 2003 he shares close to an all time high. I bet, uh, has hit the $40 billion asset mark in just 211 days. The previous record was like six times that. So just really in truly off the charts type stuff.

Cumulative Ethereum ETF flows, again, from about June, it's have been negative. I think there's mostly money coming out of the grayscale Ethereum ETF, I would guess. And of course, that flipped after the election. And so then we had a bit of an argument a few weeks ago about like Bitcoin being just like a risk on thing. And I differed with you. This is already has a chart. I think supporting my argument, showing I bit versus the queues or just Bitcoin versus the queues.

And there was a long period of time where they were it was a risk on risk off type asset. And that has just got completely divorced. Like it is smashing the cues. Yes, you were right about that. It is just funny to me, though, that, I don't know, the crypto people always clam around about regulation and stuff. And I just feel like regulate the whole regulation piece hasn't really stopped them from doing anything in the past. Oh, yes, it has. I mean, obviously it's all the stuff. For example, dude, Solana, you couldn't treat Solana on Robinhood.

just as one example of a million things. So we were, I was in the airport. Maybe I'm naively thinking about it as just like Bitcoin. Bitcoin hasn't been stopped from doing anything. Bitcoin is the biggest player in the industry. So I was flying from Philly to Chicago. Yeah, Philly to Chicago. And a fan came up to me in the airport. And nice to meet you. Thanks for listening. Oh, what are you doing? And he told me,

As he walked away, he goes, enough of the Bitcoin stuff. I'm not having it. And I was like, unless I misheard him, it was so weird. I was like, what? It was just like a, I wonder if it was one of those interactions where he walked away. He's like, what did I just say? Well, we got one of those. He said, I'm not having it. It was so odd.

We got one of those emails last week, though, that people are like, you guys talk about crypto too much. Like, guess what? It's not going away. This is part of the market now. It's a massive asset. It's a $3 trillion asset class. Kyle Best tweeted, Scott Bessent is eminently more qualified than Howard Lutnik. We're talking about like the Treasury Secretary to run the US Treasury. Scott understands markets, economics, people and geopolitics better than anyone I've ever interacted with. Markets have already anticipated Bessent Choice. Lutnik is not Trump's answer. Lutnik is a

They got from counterfeit child who'd be more crypto friendly. So anyway, Robert F. Kennedy, Jr., who was going to be in a position, probably going to hold the cabinet position tweeted, Bitcoin is the currency of freedom, a hedge against inflation for middle-class Americans, a remedy against the dollar downgrade from the world's reserve currency, and the off-front for a ruinous national debt. Bitcoin will no longer, will have no stronger advocate than Howard Lutnik. And listen, you might not like that statement. I don't particularly like that statement, but

You can't, you can't pretend like this. That statement sounds like 25 bots in my Twitter replies. But it's now in the White House, okay? And so forgive us for covering a huge story. And I understand that people are pissed off, they don't like it, they think it's spam, they think it's garbage, they're upset that they missed it. I understand all these feelings, okay? So to the person who told me I'm not having it, okay, well then don't listen, we don't want to tell you like,

We're covering the markets, and this is a big part of it for an hour. How about this? Walter Bloomberg. Bitcoin ETF options will start trading on Tuesday. So you can start trading options on I-bit, according to Bloomberg, according to Barron's, and I guess that's a new way to trade hedge, whatever. How quickly do we get a co-option selling strategy? Oh, yes. No, I think they're already exist.

Do they? So Alex Morris in our live show, we were talking about crypto, I think beforehand, maybe not even doing a show, he was saying like one of the options, that's a way to create new Bitcoin, essentially. People say there's no way to create new Bitcoin. Options are kind of a way to create more Bitcoin, right? If you think about it. It's leverage. Yeah.

But whatever, it's a derivative, obviously. Well, here's the other thing. So somebody said to me, it was like, dude, how is one Bitcoin $90,000? And the price doesn't matter. It's not like they sell in increments of one. You know what I mean? It's I say like, how is booking.com an $800 stock? It's like, how is that relevant? How is that relevant at all?

The absolute, now listen, I get it intellectually, like is that to be the thing, but it doesn't matter. The funny thing is it would have mattered in the past when you had to buy like there wasn't fractional shares. Yeah, you buy 10 dollars worth. What is the underlying price matter? It's the sixth largest asset in the world.

And, you know, it is a thing. I was gonna put this in here. It looks like Jake from Economic did it too. And he put a historical drawdowns for Bitcoin. And my question to you is, is that cycle over? I feel like every time more institutional money comes in, people wonder, because the history of Bitcoin drawdowns is 90% drawdown, 80% drawdown. Even the last time was 75, 80%. Yeah, I think that's over. When I say it's over, I mean like,

And even in the last one, it didn't get to 80%, even in the FTX explosion. So I would say that 80%, the 80% catastrophic white paths are over. You think that great depression scenario is off the table? Off the table. Off the table. Now, I would never say, especially with Bitcoin, that it can't get cut in half. I would never say that. But the 80%, like the great depression type risk, it's over.

I would not be just because of the way the 24 seven nature of it. It's just it's a security is made to be volatile. I wouldn't say it's over yet, but I can I'm leaning that way, but I would say that. I'm saying the Great Depression type risk. I'm not saying it can't fall 60%, but the difference between the 60% and 80% fall is enormous.

Jake tweeted, I have a theory, crypto has clearly integrated more deeply into traditional finance and gained wider allocation among people beyond the early adopters are hobbyists, obviously. So my theory is that in the next downturn, crypto itself may experience less severe declines thanks to mechanisms like basic rebalancing that can help stabilize prices. But the impact on the border financial system is now more significant than zero. I would also say it's fair. Now, how about this? If Bitcoin goes to 150,000, 200,000, can that create inflation?

Like, are we not talking about enough trillions that if money comes out of Bitcoin, it gets into the economy? I don't know, because it's, the thing is all the big whales never sell though. They're not using it in the economy. The mega whales, no, no, no, no, the mega whales have been sold, but the whales are selling, because we say, where is it coming from? This guy, 15 whole capital, whatever handle is, always shows a chart of where their flows are coming from, like who's selling, and it is people that own a one to 100 Bitcoin or something like that.

Okay, but Jake's point about the fact that it could have a bigger impact on the broader financial system, that's why I'm thinking of selling some, because it's a bigger asset level for me now. And the 50% crash from a higher asset level would be a lot more painful to live through than when I had way less money in it because the prices were lower. That's why I'm thinking of rebalancing and taking somebody off the table because- Coward.

Yes. I'm not a diamond hand and people are going to say, it's going to go to 400,000, 800,000. You're going to be sorry. But for me, it's the monetary value of it that's much higher. And I don't want to sit through another crash situation after seeing it at this level. I got it. I totally got it. But just a PSA on this, please, if you did not own Bitcoin or do not FOMO in,

You know what I mean? Like, pump the brakes and don't do anything that you might regret. If you're asking, should I be in it now? No, you probably shouldn't. If you weren't asking that question at 30, 40, 50, like a long time ago at lower prices and now you're saying, hey, me, I should get into Bitcoin. Yeah, because what if it goes? What if it doesn't go from 92 to 100 in a straight line? What if it goes from 92 to 75?

Are you to say? I would be nervous of people asking me, should I buy Bitcoin now? Now is the wrong time to ask. Yeah, I agree.

Oh, I forgot to mention earlier in the show when we were talking about Robinhood. So there was news this morning that Robinhood is acquiring a trade PMR, one of the largest custodians in the REA space. So that is certainly noteworthy. Robinhood is going to be working with financial advisors. So congratulations to Rob Baldwin and the whole team at trade PMR that is exciting. Well, Robinhood has made a huge push into IRAs. I guess they get a ton of money going in. So the fact that they're making this step makes sense to me. Yeah.

Interesting. All right. Another chart for real estate. Visual Capitalist has a chart on the median home price by state. And they look at the, as of August 2024, the median sales price for a single family home in the US is 385 and look at it by state. So the highest one is Hawaii, like 850, California is close to 800.

Uh, I don't know. I don't know. It's pretty high. Yeah. There's a few pockets of mega wealth there. Washington's high, but look at the middle of the country, Kansas, Oklahoma, Arkansas, Missouri, Alabama, Louisiana, Kentucky, Indiana. Oh, look at Mississippi's value state. Yeah. Mississippi and Louisiana. So my point is, look at how much, look at how low those prices are for the median single family home in those states and the. So what's your point?

I think some people will be surprised about this. When they hear about how expensive housing is, there are certain states where housing is still not expensive when you think about it in a national context. Yeah. The close versus the middle of America. erroneous. Why is that erroneous? Because what percentage of the population lives in Mississippi or what percentage of singing family homes are in Mississippi?

Of course, it's a small moment, but I'm saying that the conversation on housing is dominated by people who live in the coasts, where housing prices are ridiculously high, and it's not like that everywhere. These numbers were way lower than I expected, it's my point. I was surprised at how low they were. Yeah, there's good value in Kansas. Can't wait, Kansas City, Missouri or? Wait, Missouri or Kansas, that's the question. Both, both. All right, this surprised me.

There's a, there's a good follow on Twitter. It's, uh, at borrowed underscore ideas. Okay. Do you know how to say this brand? I think I do. In fact, I do. I'd like to hear the story behind how they named this company because I can't ever pronounce it. Go ahead. Voori. Voori. Like I like to buy a vowel, please. All right. So he tweeted, Voori raises. Also I wear the, they're warm pants are very nice. I wear three or four pair of them. Very, very high quality stuff. They raised 825 million.

at a five and a half billion dollar valuation. The early round was four billion in 2021. So there's a press release. Southern California performance. Five and a half billion dollar valuation for that company. I mean, the clothes aren't that nice. Oh, I'm sorry. So the press release, the press release is not, is not the exciting thing. So he also tweeted, Lulu reached similar levels of market cap with 700 million in revenue back in 2011.

It's hard to be sure, but based on some quick Google search, it seems that they currently have $300 to $400 million in revenue. So. Athleisure is so hot right now. Yeah. Half the revenue that Lulu did at the time, same valuation. Duncan said, sent us that the word comes from the Finnish word for mountain. Okay. Was, wasn't there another Nordic word that we were like, what is this? And we have people from one of those beautiful countries emailing us. It's possible.

All right, survey the week. Wait, did you get? I got to ask you a question. Did you take survey off the dock here? I don't see survey anymore. Not personal finance. Maybe I got to delete it on accident. I'm going to put it back in. All right, survey of the week. This is from Pew. Pew, Pew. Never.

A couple weeks ago, we talked about the costs of the American dream, how it seemed ridiculously high. It was like $4 million to reach the American dream with kids and housing and vacations and all this stuff. According to Pew, the majority of Americans say they are on their way to achieving the American dream or already achieved it. 31% say they achieved the American dream.

However, they define it. 36% say they're on their way to achieving it and 30% say it's out of reach for them. These numbers are actually higher than I would have anticipated. So two thirds of people say that they've either achieved the American dream already or they're on their way to achieving it. That's great. Does that make, I guess, not to make it too simplistic, but two thirds of all people in the country own stocks or a home, is that too simplistic to say? It kind of matches up. I don't know.

Oh, I would. Higher than I thought. All right. Email. I'm 38 years old. Pay off my credit cards every month, paid off my cards, and I just paid off my mortgage 20 years early. This guy paid off a 3% mortgage. He deserves a slap in the head.

Okay, sorry, congratulations though. I think that my score would be the highest it could possibly be. Hey, this guy pays his shit off. He's trustworthy, given the lowest possible rate if he wants to finance things. Some guy to experience probably whatever. However, what happened was after taking a $72,000 balance off my credit, my score went down by 23 points. So now I have less debt. I mean, actually I have a higher just rate to finance something. TLDR, to get a higher score, I have to take more risk. Yeah, you know, this is interesting. It kind of is like, if you go to a bookie,

and you're like, hey, my name is Michael and I do dumb bets, but I only lose three to five cents on every dollar, depending on if I'm hot or cold. Does the book you wanna work with me? Not really, am I a good client to the bookie?

Not really. So maybe it's the same thing. Like the credit score people, they see you. They see you and your willingness to pay off your debt early and you're not a good customer to them. You want to jack it back up, call all your credit card companies and ask them to raise your limit and then take some new credit cards out, get those reward points, pay them off every month. Now you have more credit, I bet your credit score will go back up. Yeah. But I mean, I get the gripe, obviously. It's like, yo, I'm a great customer. I have great credit.

I should be maxed up.

All right, did you see this during the New York Times? This was flying on social media, a lot of comments on it. The headline of the article is, the unspoken grief of never becoming a grandparent. A growing number of Americans are choosing not to have children, their parents are grappling with what that means for them. So they say a little more than half of adults, 15 older, had at least one grandchild in 2021, down from 60% in 2014, amid falling birth rates, more US adults say they're unlikely to ever have children for a variety of reasons. Chief among them, they don't want to.

So it's funny, this article was not painting it as it's too expensive to have kids or whatever people would think these days. They're just saying more people these days do not want to have kids. I'm sure finance is a part of that, and it was kind of they're interviewing people, interviewing these people who were in their older years and sharing their feelings about not having grandkids and how bad it hurts them. And then they were talking to the kids too, like how do you think that makes you feel about not, it's a very deep article.

But the thing- Imagine being a grandparent and like, all your friends have grandkids and you don't, that's gotta be really tough. Well, that's what the article says. It's like peer pressure. They see the pictures being shared by their friends and they don't have that. And yeah, so I don't know, like, and the parents are like, listen, whatever they wanna do to make them happy, makes them happy. But this is something that I never had to, never thought about. I assumed I'd have a grandkids someday. That's why I had diversified and had three kids because it increases my chance of having a grandkids someday.

Think about the grandparent thing. So we went to, my daughter is really into women's basketball. She got really into women's college basketball last couple of years because of the Caitlin Clark thing. She's 10 years old and she plays a lot of basketball. So she wanted to go to the women's Michigan basketball game this week. And so we went on Sunday with nothing else to do. They're playing a local team, easy to get seats. And I got seats like right in the front row because it was so cheap and not that many people were going to this game.

And they came up to us before the game and said, hey, you're sitting as close. Would your daughter be interested in doing like one of the timeout games in between at hat, right? Where are they? Come on. Yeah, so of course they did. And my son was so pissed because he didn't get to do it. He was so mad. So she got to do it. She did a

Game against another person where they had to put like the basketball jersey and shorts and shoes on for a Michigan basketball player like size 13 shoes and she like slowly but truly goes on the corner. I have to make a layup. My daughter did it and she made it and she beat the other girl and she got a big swag bag of Michigan stuff.

Now, the only person that I would wanna tell about this would be her grandparents, right? Like I wouldn't wanna share this with anyone besides my whole podcast audience. I wouldn't wanna share, but the person that I immediately sent it to was my mom because as a grandparent, she would love to hear this story and see the pictures and see the video and stuff. And yes, having that missing piece would be tough, I would imagine. But the interesting part is that just people just say, we don't wanna have kids.

for whatever the reasons are. I thought that was interesting. Listen, I get it. Everyone's obviously entitled to live the life that they want to live. And if you don't want kids, don't have kids. But guess what? Having kids is hard. And I think in the past, it was just kind of like, yeah, everyone has kids. And now I think people have more information and realize like having kids is not easy. It completely opens your life. I think there's probably people that have really strong feelings about this.

Yes. Right. Right. Yeah. I guess if I'm being honest, I would say that like, isn't it like sort of like your duty to like procreate a popular world? On the other hand, on the other hand, like the idiot actress argument, we had an old friend of mine who was a dumbass, no offense to him. He is. But him and his wife said like, we would never bring a child into this world. And my wife and I said,

probably a good thing. They shouldn't because he's kind of an idiot. Yeah. I mean, yeah, no, that's true too. That is true too. And there are plenty of people and do we need really need more? I get it. I mean, the guy less than the escalator. Does he need it to have an offspring in this planet? Probably not. All right, Rameet tweeted, this commenter wrote a sarcastic summary of my video without watching it. And the comment was this, stop buying luxury goods, raise your income without raising your expenses, buy a pre-owned Toyota, and invest your savings in a decent ETF for mutual funds safety 20 minutes.

I never made said just one problem. There's nothing wrong with buying luxury goods or raising your expenses or buying an expensive car. Too many people in the personal finance community genuinely believe that spending more money is a bad thing. It's not the point of money is to spend it on living your rich life, not to mindlessly accumulate it. When I point this out to him, he or he was his reply as you could see his entire worldview is that money is met to maximize investments. What a waste. I cannot agree more for me.

uh, and again, this is one thing that's like personal, like if, listen, if you're the type of person that like you're motivated by, by hoarding cash and stacking and whatever getting as rich as you can and just back and okay, that's your right. Uh, I think that's like a really bad way to live. I, I think that that is like the opposite mentality of, of.

of the way that I think about money. I think that money is a tool to be spent and enjoyed however you want. Of course, there's a line, you know, like, don't buy a luxury car that you can't afford, like, duh, stipulate all of that. But once you've got what you need, you know, for some people, money becomes a source of anxiety.

and not having enough and why they're gonna run out. And that's like, that's a personality thing. That's a nature versus nurture thing. It's not a, it's not a conscious decision that people make. It's like, it's in their being. And I think that if you are free to think about money as pleasure and joy and giving it and spending it and all that sort of good things, it could be a wonderful thing.

So I've been going through a little bit of a battle with the fire community lately. I asked the compound. We had a question for someone who asked, Jill on Money was on the show and they asked about, retired age 36 about Roth conversions or something. And we Jill kind of gave the stuff about the pros and cons of doing the Roth conversion. But then we spent like the next 10 minutes talking about the psychology of retiring early and how it can be like knowing what to do. And there's people get a lot of

fulfillment from a job and having a network of people, and there's all these studies that actually show that people who retire early die sooner than people who retire later. Of course. Because that human interaction, and we brought up all these psychological points in the fire community who was mad at me. They said, listen, you spent 90% of that at answer, not talking about the math. You talked about the psychology.

You're talking to different people. It's fine. These are people that think differently than we do. That's okay. Yes, but the whole maximizing of numbers and spreadsheets. That's what I used to be. I've totally come around on that from dealing with thousands of investors and clients and stuff over the years that know the psychology component is so much more important than the math component. The math stuff can only get you so far in terms of fulfillment and

these things. So yes, I, I'm way more. I want to enjoy my money as much as I possibly can while I'm here. And I love to leave some to my kids, but my goal in life is not to just leave my kids as much money as possible at all. No, I'd rather make them comfortable while I'm here, right? Yeah.

All right, so on Friday, my parents were in town and nothing else to do. So my dad has always been a, he always talks about like the Ali Frazier fights. I think growing up boxing was a big part of my dad's sports consumption. And he always talks about how Ali and Frazier and the thrill and vanilla and he, and I grew up, I've got some really good memories of boxing matches like the fight night with your friends. That's just a different level of energy. Yeah, right.

for sure. So my dad said, let's watch this Tyson thing. And I never would have ordered it if it wasn't on Netflix. I'm like, okay, it's on Netflix, we'll watch it. And we watched the first couple fights and the first one was like some YouTuber or something and it was awful. The second, the third fight worked actually pretty good. And the whole night Netflix was buffering for me. It was buffering, it was going down. I had to turn it on and off like 12 times. It was just not working. So

They did not pass with flying colors for me in terms. So we didn't even watch the Tyson fight. It happened. It was on too late for my dad, probably, and Netflix kept going down on me. So is that a good thing or a bad thing for Netflix? Because it's bad that they could handle it. It's a good thing because it's so many people watched it. It worked for me. I know there's a lot of people that it didn't work for. I'm not really sure what's going on. I mean, they'll figure it out. They'll fix it for next time. So the most boxing, the most watched boxing matches ever,

Um, it may weather Alvarez is number five. May weather, De La Jolla is number four. May weather, McGregor is number three. So number, the number three was 4.3 million. Number two, the second most viewed boxing match of all time was made, whether Pacquiao was 4.6 million. And Paul versus Tyson with 60 million, 60 million.

I think I saw those fights back in the day weren't much higher. I guess it was pay for it. You had to pay for it. So that's true. You in one house would pay for it and 20 people would be there watching. Yeah. So they'll figure it out, but obviously it's not a great experience. Speaking of streaming, so Disney reported earnings. The stock that I jumped back in. Disney at the peak, their peak losses was $1.5 billion. All of their streaming properties. Oh, sorry, sorry. Go ahead. The fact that they had Rosie Perez on the cast for the, like we kept being like, why is Rosie Perez here?

It was the, the announcing team was bizarre. Oh, she was there. I didn't see that part. Rosie Perez was one of the announcers for the fights. Like the actress, Rosie Perez. Yeah. It was very bizarre. So anyway, uh, Disney streaming has certainly turned to corner. Um, who wrote this post? I came up with Lucas Sharr, somebody, uh, so John Malone said it's a terrible business. He was talking about like streaming.

It may be a frustrating business for Malone and others who got very rich, charging people for cable channels they didn't watch. Oh, maybe this is not Bellamy actually. But in fact, thanks to subscriber gains, the ad tiers and yes, we're letting this cost cutting all the major mass market streamers except peacock are not profitable. That's interesting, huh?

So the analogy here is the cable channels are kind of like the old cable way of doing things are kind of like the baby boomers. It was easy for them. Yes. The streamers are like Gen Z. Exactly. So there's a chart here showing the operating income, subs revenue, ad revenue of all the major streamers. And Lucas goes on to say, no, streaming was never a terrible business. It just wasn't nearly as good of a business as cable.

Saying that streaming is a bad business is like saying that retailing is a bad business. Both are misnomers. This is the form from the former CEO of Warner Media. Strong financial returns can be achieved, but it requires the right strategy, appropriate resources, and great execution over the long periods of time. So it's really interesting that in a couple of years, maybe we'll look back and say, oh, huh, streaming actually is a good business. It just took too much money. Yeah, it just took a while to get here. Yeah, that makes sense. Okay, I've got a few travel things once you got more on the TV.

I had early flight in Chicago, early foot out of Chicago, and both times I think I got in like a flew out at nine, flew in at nine, and so was getting into the city at rush hour in both directions. It was just bumper to bumper the whole way, hour and 15 minutes to get to O'Hara from downtown. Yeah, that me too, that was terrible. That was really terrible. Long commutes like that are soul sucking, and I can't imagine doing that every single day. Or even once a week, I can't even imagine that.

Obviously some people live where they live. That would be, I had one of those my first job for the first six months of my job before the office moved. I had an hour and 15 minutes there driving hour and 15 minutes back in heavy Detroit traffic. And it was, I felt like I was losing my mind by the end of it. So my wife does three hours a day. And I really don't know how she does it. How does she say saying?

She's, you know, she's lying on the ante. So she talks to her friends the entire time. But she, one time she picked me up from JFK on her way home. And it took an hour to get home from JFK and I'm like, I can't believe this. And she's like, I've been in the car for an hour already. But in fact, I do think she's done.

I think this can be her last year because it's, it's, it's, it's too much. It's soul sucking to your point. Like, and obviously we're lucky that we can do this, but she leaves at six 30 and she gets home at five 30 or yeah, five, five 30. It's like, what? And then to first be with the kids, the dinner, the bath, she doesn't stop. Like she doesn't like get to like chill out until like nine o'clock. It's just, uh, yeah. So you're not decompressing in the car, right? There's no decompressing.

That's why she needs a self-driving car. She can just do stuff in car though. Okay. So the people who jumped ahead of you online on the plane. So I was sitting more towards the front of the plane when I got off and this lady without me looking before I could get up jumped me really quick, you know, to get out. And I'm sure she had a, but she didn't look back, didn't say anything. I just want, all I want is a, Hey, I've got to get off cause I got to catch up. Can I get, can I get ahead of you? That's all I want. It's just like getting in on traffic. That's just mention it. Yeah. You know, what if I had to get off for a commute for a second one too, right? Yeah, people are rude.

People are rude. People are rude. All right, Ben, you see these things that I put on in the doc, see these yellow glove things? What are they? Okay, these are sneaker cleaning bags. You know, in the past, I've griped the fact that every foamy, sneaker cleaner, oh, the wipe to this, they're all bullshit. All of the Instagram ads about the shiny sneakers, they never work. Yeah. I'm here to tell you, my friend, these work. So you put them in the bag and then you put them in the washing machine?

you put them in the washing machine and they come out, sort of dry, like they don't even come out soaking wet. So I got them in Amazon, go to Amazon and type in, well, I was meant to know that working. So you can see, I just put my sneakers right in the wash with the clothes. Cleaner bag. Okay. Okay, there it is. Go to Amazon, type it sneaker, cleaner bag, 32 bucks, and this thing cleans the shit out of your sneakers.

Okay, so it's got like little bristles in there. It looks like a car wash. Yeah, that's exactly right. It's a car wash. It's a car wash for. Did Instagram get you on these? Probably. So. I would try them. You're going, Ben, you're going to blue sky.

Okay, so I tried it out. So I found a blue sky, which the names are horrible. It's like your username dot B sky dot social. What is it? Is it the same thing as Twitter? It's the same thing as Twitter. It's, but there. So I signed up for it. I didn't, I'm not like posting or anything. I just wanted to check it out. You know, I say anything to do with threads.

And there's enough people who have moved over there where it's kind of interesting, where I don't think I have the bandwidth to try another social media network and build a following and post there and then post. I'd be fine if I could hit post and it cross-pollinates to both places, but there's enough people on the econ finance side that I follow that are there that at least has me intrigued. But it also has me thinking,

I follow, I don't know how many people on Twitter, like would I follow this person again? And for a lot of people, the answer is actually kind of no. I don't want to follow you anymore. But so I don't know if I'm actually going to go through and post down there and check it all the time.

It's, it's Twitter. Okay. So without as many psychos, I think. So I, I really hate Twitter and I know it's lame to complain about Twitter. Um, I don't do it on Twitter because that's super lame. I'm still, I'm addicted, even though I don't post anymore. I'm still on it. I'm just addicted to my phone and I really hate it. Like I feel bad with my kids. I'm still on it.

It's just, I don't know where I'm going with this. I hate that I'm addicted to Twitter. That's all. And there's nothing to do with new Twitter or Elon Musk or the fact that Elon or that Twitter has changed. I just hate that I'm addicted to Twitter still. Anyway, here's a tweet. Here's a tweet talking about the situation from Joe Light. Best case scenario, either X or blue sky just up and dies. That's not going to happen, of course. Worst case, they're both good for breaking news and I have to monitor both.

Most likely case. That is the worst case. Most likely. Most likely case. I have to stay on X and it's a bit worse because the smart people who don't have to be here choose to migrate. I think that was a good take. That's, I don't want to have two. That's why I never got into Instagram or Facebook because I didn't want to have three places to go and I wanted just one central hub and now I think we're going to have a few. And blue sky, it does seem to have some legs. I never thought threads did. I think blue sky might. Okay. Well, cool.

Yeah. All right. Recommendations. So I re-watch Meet the Parents because it was on re-watchables. And that movie just ages like a fine line. And it is funny. You and I were talking about the people, the comedians always say, you can't make funny movies anymore because people get too offended.

It's so lame. It's so lame. It's very lame. And it's funny because now they all, listen, they all do their own podcast and they do their Netflix special and they can literally say whatever they want. If it's funny, they could say whatever they want. You know why they don't make movies anymore? Because they can get paid a million bucks doing a podcast. They don't have to get a whole crew together to make a movie that they're probably not going to make any money on. But Meet the Parents has like zero offending parts of it. And it's just funny because of the scenarios and it's probably one of the best written comedy movies of this decade. If you're a male nurse, you're offended.

Yes, but we also laugh because you've used the, I have nipples, Greg, can you milk me line like a million times? No, no, no, no, no. I say you can milk anything with nipples. Ah, there you go. That's the line that I use. On every talk or book that we have to edit out.

It is, that movie is just phenomenal. Okay, so there's books that actually make the movie, a classic movie better. I have a new one. So I read the sideways book after watching the movie. Wait, hold on, explain. Explain, explain, explain. Okay, so I read the godfather book after watching the movies and reading the book makes godfather one and two better for me because it gives me more background information on the characters. And same thing, I read the Goodfellas book.

So, which is the Henry Hill story. And then I read Sideways recently, which is based on a novel that this guy wrote. No way. What? That was a book? I didn't realize it either. And the thing is, part of it is when you read these books, you go, oh, they literally took this story or this, this

conversation, word for word, and put it in the movie. And it kind of makes you like, oh, I'm not quite as impressed with the movie. But then there's other stuff that they take that we're not in the book at all, and they make things look better. Like Shawshank. I didn't read Shawshank Redemption, but I'm guessing that was like that. By the way, I just had a moment. You know when Airheads, you've seen Airheads, right? Oh, yeah. Where they, they, they make all of these crazy requests from the, all these crazy demands to release the hostages so that they complete insanity. Remember that part? Yes.

at Bushemi or one of them goes, get a 500 copies of Moby Dick. And she goes, the movie or the book? And he goes, Bushemi goes, they made a book out of that? You have the most random 90s references. Thank you.

Wayne's World Airheads. But anyway, the Sideways book, I love, love, love the movie. It's one of my, I think it's probably one of my all time top 10 favorite movies. But it's very hard for you to have a book to make me laugh out loud. And that the book makes me laugh out loud in multiple parts. Hang on, that's a crazy take. That Sideways is a top 10 movie for you, like really? Or are you just saying that? I love that movie. I think it gets better over the years every time you watch it. Yes, I absolutely love Sideways. I think it's very good. That's all I got.

All right, I don't think I, yeah, no, I actually, I didn't watch any movies this week. I was on the road, no movies for me. Although I will say, because I don't think I recommended these at the time when I saw them, there's a movie called Host from 2020, where these six friends do like a, they're on Zoom, of course, because it's the pandemic, and they do like a seance with like spirits. And it's sort of like found footage-ish only because like it's, it's, you watch the movie through the Zoom, and it's only 57 minutes. And it's absolutely terrifying, really, really, really scary.

Another one. You're watching these horror movies on planes or not? No, I get scared.

Like I will watch a horror movie with my hands over my eyes. Maybe that's why it doesn't do it because I don't get scared watching these movies. I get terrified. So sometimes I'll watch a horror movie during the day. All right. Maybe I shouldn't say something. I'll even watch a horror movie. I'll mute sometimes if I get really scared. Like I get very scared. Yeah, my wife can't watch. She has to cover up. So anyway, there's another movie that the Slack channel guys were going on about. So I don't think I recommended it at the time, but it's called Kill List.

And Killis does not fall in any of the buckets other than just max f***ed upness. There's just a demented movie. And I really enjoyed it. And I think that this person who saw me in Chicago is your name, James. If it's not James, I apologize. But if it is James, James, you would love this movie. If there was a word cloud for your movie descriptions, demented would be the biggest word. Demented? Yeah. Yes. Yeah.

Okay, please take the survey. We would very much appreciate that. Get into our audience a little bit better. Lincoln Shonuts, of course. Animal Spirits at thecompoundnews.com. Thank you for listening. Hope everyone is enjoying their fall. We'll see you next time.