A Wave of Redemptions (EP. 454)

11:23Ben Carlson:Oh, yeah.

11:24Michael Batnick:Come on. Totally got rugged.

11:29Ben Carlson:That happens. 15 basis points, though, is not like a huge move, obviously. Let's be honest here. If you compress one of the charts, you can make it look like a big move, but that's not that big of a move. Come on.

11:39Michael Batnick:You're right. It's not that big. It definitely is not. But 15 basis points on sub 4%, it's not nothing either.

11:45Ben Carlson:I guess the thing, if we're talking about household balance sheets, though, the prospect of rising rates, even if they rise a little, they're not falling anymore. Higher inflation. This is not good for consumer sentiment by any means. Higher gas prices? Yeah. I think a lot of people are probably going, wait, what? What did we get out of this? Higher gas prices? Supply chain shocks?

12:03Michael Batnick:Another war? I don't want to speak for the nation, but I feel like that's generally not popular.

12:07Ben Carlson:No, because people always say, like, we spent this much more on wars in the Middle East. Like, what did we get out of it? Yeah, there's a lot of that. So the consumer sentiment of this is probably not going to be great. Yeah. All right. This was interesting from SAP Global. They had this thing where they looked at the concentration of stocks in the 1960s, which was a very high concentration. and it was kind of household names, AT &T and GM and GE and Sears and Kodak and -

12:30Michael Batnick:AT &T and GE were 15 % of the market.

12:34Ben Carlson:Crazy, right? So they're showing that we've had this type of concentration before. And now what happened to these companies afterwards? And where are they now? And so, yeah, AT &T was almost 10 % of the total. Now it's not even in the S &P anymore, which I didn't realize. And so all of these stocks are now less than a percent of the total S &P. which is interesting. And for how, and so it's saying, then it shows the opposite, how concentrated we are now, where these companies came from. Um, JPMorgan Chase was in 1973. They were essentially a zero weight. Like it's just interesting to see how much change there is.

13:09Ben Carlson:And I know people think this is going to last forever, but the point is like, it's probably not. And things are happening faster and these are moving quicker. I tend to still think that's the case, but there's been,

13:19Michael Batnick:but the turnover at the top has been way lower than,

13:25Michael Batnick:And how about this?

13:26Ben Carlson:You're talking 10 years or so.

13:27Michael Batnick:How about this? No, no, no, no, no, no. These names, I think if you look at the top market cap names since 2016 or 2017, it's been, I don't want to say constant because that's definitely not the case. But I think there's been less turnover in the top 15. I could be wrong than there has been historically. And how about this? Let's just say that's true or it's not true. It doesn't matter. The names that are, the top 10 names are almost undoubtedly going to be the top 10 names in two or three years, right?

13:56Ben Carlson:Okay, so here's the thing. NVIDIA wasn't there. Broadcom wasn't there. Tesla wasn't there. JP Morgan wasn't there. Fine, but take, let's extrapolate two years

14:06Michael Batnick:and assume that NVIDIA and these names are still going to be the top 10.

14:09Ben Carlson:I'm not talking two years though. I'm talking 10 years.

14:10Michael Batnick:No, no, no. But at that point, it will have been well over 10 years with these tech giants at top.

14:16Ben Carlson:NVIDIA wasn't in the top 10 as recently as 2020. I guess that was longer ago than it seems.

14:22Michael Batnick:Google, Apple, Amazon, Facebook. You're right. Matt, have those been in the top 10? When did Galloway write his book before? Was that 2015?

14:30Ben Carlson:Like 2017, yeah. That's fair. Do you think that… 2017 was only three years ago in my head though, so… Right.

14:39Michael Batnick:I saw a chart. I can't remember who posted this. The average lifespan of companies in the S &P 500 is basically at an all-time low. I think that is going to continue. I think there's going to be a ton of turnover in, say, names 400 through 500.

14:55Ben Carlson:Okay, that makes sense. Yeah, that was a Torsten Slott chart, that the turnover in the S &P names and how long they stick around is a lot lower.

15:02Michael Batnick:All right, Ben Johnson tweeted, on this week's episode of Life After Mutual Funds, ETF flows have gone to plaid. February, by the way, are they remaking Space Walls? Or did I make that?

15:14Ben Carlson:Bill Pullman's son is going to be in it.

15:17Michael Batnick:Bill Pullman's son? Can I give you a take I gave Duncan on Asset Compound a few weeks ago?

15:22Ben Carlson:Maybe a couple months ago. I've seen Spaceballs and enjoyed Spaceballs more than Star Wars over the years. I've gotten more enjoyment out of Spaceballs than Star Wars.

15:33Michael Batnick:I haven't seen Spaceballs in 15 years, but that's only because I watched it so many times as a child. Really is great. But is Mel Brooks directing it?

15:45Ben Carlson:He's like 99 years old. I think he is. Okay.

15:48Michael Batnick:All right. Nobody needs that, but whatever. I'll watch it. Probably not.

15:53Ben Carlson:Nobody needs that is a great tagline for Hollywood these days.

15:56Michael Batnick:Well, you know what? I saw a movie last night. We'll talk about it later in the show. But they're making a Mortal Kombat 2. They're making a Mortal Kombat sequel of the reboot. Okay? The original one in 1990, I don't know, 7, whatever it was.

16:13Ben Carlson:Yeah, 94. Was horrible because what was the guy with the forearms?

16:17Michael Batnick:Oh, I'm going to butcher this guy's name. Ganaka? No. I can't remember, but I... Baraka. No, not Baraka. Baraka was a guy with the razor teeth.

16:25Ben Carlson:Okay.

16:27Michael Batnick:Forearmed man, Mortal Kombat. I'm sorry. 99 % of the audience cannot give a shit about this. Oh, Goro. What did I call him? Ganaka? Okay. Ganaka, was that in the math spry? No, that's Banaka.

16:37Ben Carlson:I had a friend in middle school who would run Mortal Kombat. He'd put the quarter on the machine and be like, I'm next. And he would run it. And the arcade, that was where it was at.

16:47Michael Batnick:Those kids were cool. The ones that could just dominate the table. Anywho, so they did a reboot. And I think I saw this during the pandemic. And the reboot was so bad. Like truly one of these like nobody needs this movie. And they're making a sequel. Sad state of affairs in Hollywood. They're making a sequel to a horrible reboot.

17:08Ben Carlson:It really is. All right. What did Ben Johnson say?

17:11Michael Batnick:Ah, yes. So February isn't even over yet, and investors have already put$328 billion in new money to work in the ETF wrapper this year. That is about 64 % ahead of last year's record-baking pace. Dang. Continue to be shocked about how much money there is in the system. Somebody emailed us. We got a lot of emails this week, by the way, and appreciate all of them. So thank you, guys. somebody said one of the theories of why people are just why society is unhappy in general is you have the lower shape of the K, which is unhappy for obvious reasons, crushed by inflation. And then even people at the upper end of the K, like there's just too much money.

17:51Michael Batnick:There's not enough capacity. Everywhere you go, there's lines. It doesn't matter how much money you have. The lounges are always full. I thought about this. I took Kobe to the Knicks game over the weekend and you couldn't i couldn't move like it's just unbelievable there is so much money in the system and nobody's happy i know nobody's a stretch but you know set for effect

18:13Ben Carlson:people who can who can afford to cut the line they're even more miserable though

18:16Michael Batnick:the billionaires right oh forget about the billionaires oh i don't i i i can't i can't speak for billionaires being miserable i think that's kind of insane but when i when we when When we went to - Have you seen these people tweet? These people are way more miserable than anyone else. You think Bill Ackman is every billionaire? I don't want - I'm not going to say that billionaires are miserable. I don't know any billionaires. Maybe they are, maybe they aren't. So when I took - When we went to the Bahamas in February, the line for Clear was almost at the door. And people were like bewildered. So Clear is a service that allows you to like scan your eyes and it should be theoretically faster than pre-check.

18:56Michael Batnick:but now everybody has it.

18:57Ben Carlson:So they're going to have to create another thing that's ahead of Clear.

18:59Michael Batnick:They need like Clear Premium or Clear++. There's going to be like seven tiers of Clear.

19:03Ben Carlson:Clear was like the thing ahead of PreCheck, yeah. Okay, so getting back to the ETF thing, isn't this just going to be, are Baby Boomers just going to continue to push this forward where like the mutual funds risk ETF is just going to get wider because they're selling all their 401k assets and they're rolling them over?

19:17Michael Batnick:Okay, that makes sense.

19:22Michael Batnick:But don't you think inertia overwhelms that? Like, why would somebody roll over their 401k and all of a sudden trade an S &P 500 mutual fund for SPY? True. They wouldn't. So I know for a fact that this is happening because a lot of people -

19:39Ben Carlson:How about RMDs? You have to sell something to pay taxes that instead of spending it, I'm going to put it back in the market.

19:47Michael Batnick:No, don't. No, RMDs have to come out of your account.

19:50Ben Carlson:Yeah, I'm saying you sell it.

19:51Michael Batnick:Oh, I understand. Okay. Goes into the brokerage. I know people do that. So we know that financial advisors are whacking these mutual funds and getting them into ETFs if it's in a qualified account. So it's definitely part of the pie, but it's not the whole pie. Like, anyway, the point is there's just – there continues to be a lot of money in the system, and it's obviously distorting things.

20:12Ben Carlson:All right, let's talk about the AI story of the week. This one kind of jumped into, like, civilian zeitgeist a little bit. I heard from some friends on this, and I heard from some clients on this, the Block, the Jack Dorsey thing from Block. So Jack Dorsey put out a tweet, and I guess I'm sure they told the employees before, obviously, but they basically said, hey, listen, we're cutting our staff by 40%. Huge number. And he says AI is the reason. And now there's two teams on this, okay? One team goes, that's it. It's over. It's done. This is going to happen to every company. Get ready for it. And other people, whoa, whoa, whoa.

20:50Ben Carlson:Let's provide some context here. And I think that this is going to be the AI theme for as long as we're arguing about this. Is some people going, every anecdote is going to go, see, I told you, you white-collar workers are nuked. And other people are going, no, no, no, no, wait, wait, wait. And my whole thing is like strong opinions loosely held on this because I don't think you want to be on a team with this. Because I still don't, I'm not sure how this is going to work out. But a lot of people said, we got an email from someone who works at Block and said, I got laid off today. This sucks. And so the head games you hit with yourself there is, wait, what if this was really AI?

21:24Ben Carlson:What if my career is screwed, right? That to go along with getting laid off, like getting laid off is never a fun process, obviously. But if you're having that thought in your head, like what if I'm not gonna be able to find another job that I want to? Like that is the thing that has to screw with you. And a lot of people said, no, no, no, no. Jack is making an excuse. This is ridiculous. This company overhired so much during the first couple of years of the pandemic. this is them right-sizing the ship.

21:52Michael Batnick:Here's my take. I thought Miles put it best. Miles Udden tweeted, so many things that appear to be about AI are actually about the pandemic economy.

22:02Ben Carlson:Yes. Thank you, Steve Carell Giff. So I think he's 100 % correct. I think that the market's reaction to this

22:14Michael Batnick:up 25 % immediately in the after hours sucks.

22:18Ben Carlson:That was the hard part for a lot of people. It's like, oh gosh.

22:21Michael Batnick:I don't think the reason necessarily matters. I think context is important. But does anybody who's laid off feel better because this is a pandemic story? Does anybody who's under, who's feeling anxious right now feel better because this is a correction for the pandemic hiring? It doesn't matter. And unfortunately, companies are going to use this as cover because look at how the market is reacting. I thought that Jack was smart to rip off the band-aid because a consecutive series of cuts just destroys morale, obviously.

22:55Ben Carlson:Yeah, they wanted to go big. But here's the thing, too. The context is this is a company that crashed 80 % in 2022. It doesn't matter. It's not recovered at all. I'm saying they needed to do something. The stock price got smoked.

23:07Michael Batnick:Right, right. So there's an account restructuring. He tweeted, in case you need confirmation that AI is the ultimate excuse to cut costs.

23:16Ben Carlson:Yes.

23:17Michael Batnick:So, rumor, UBS to phase out meal stipend in Q4 2026. Why?

23:24Ben Carlson:Because AI doesn't need to eat? And a lot of people also said, listen, there was a story in the Wall Street Journal that I forgot, I totally forgot that block bought title from Jay-Z, which was, has anyone in the history of music ever used that service? They threw like a$60 million party that people are, so people are saying, people are questioning his bona fides as CEO, like saying he screwed up because they went from pre-pandemic, they had 4 ,000 employees and they went all the way to over 12 ,000, 13 ,000 in the matter of years. So like, Hey, this is right-sizing the ship. Obviously again, you're right.

23:58Ben Carlson:That doesn't help anything, but the context I think is necessary here. And.

24:03Michael Batnick:But what do we do when there's like four more of these? There are going to be four more of these. You don't think that they're coming? Of course. Look what the stock did. The investor said the markets are a cold, cold place. Investors cheered misery.

24:22Ben Carlson:The stock market is always heartless, though, like this. I know. A CEO gets fired and the stock jumps 10 % or something. The stock market is heartless. And you're right. There are going to be times when it's like the profit margins matter more than the people. But these anecdotes, I'm going to have to wait till I see it in the productivity data or I see it in the unemployment rate really rising, you can't just give me anecdotes and say, this is it. This is the end. I'm not going to believe that until I see it in the data.

24:46Michael Batnick:Yeah. It feels like last week, a lot of last week was peak fear in the short term for software is dead. It was the Citrini bottom. And I'm not, I'm definitely not like, I don't say I have to poke fun. I thought, I thought he did it. He actually did a public service with this post, which we spoke about last week.

25:04Ben Carlson:Public service. Come on. Everything they wrote is going to be wrong. That's not a public service. That's scare tactic.

25:11Michael Batnick:I don't think so. They're not a scare tactic shop. Like, that's not their MO. Public service might be strong. Well, listen to that piece.

25:19Ben Carlson:I've never read any of the research. That piece to me was a scare piece.

25:23Michael Batnick:That's right. I mean, of course it was a scare piece. It scared the shit out of people. I don't think the intent was. In fact, he said on Joe and Tracy's podcast, if I knew that it was going to go mega viral, I wouldn't have named any individual stocks.

25:38Ben Carlson:That's true. You don't know how many of these pieces are going to go viral. That's fair.

25:41Michael Batnick:Yeah. How would he have known? Anyhow, I think the market has since settled down a little bit. Intuit yesterday, which is arguably, is there any company that is more exposed to AI on the software side? Intuit is TurboTax and MailChimp and Credit Karma, and there's one other big brand that they have. Intuit was up 17 % over the last five days. Now, I'm not... Is it, I mean, obviously that was a bottom. Whether or not this is the bottom for the software stocks, probably not, doesn't matter.

26:14Ben Carlson:Well, that's another, but the company was also down 50%. So that bounce was coming. So Citadel wrote a response to the Saturini piece and they shared this job postings for software engineers. And people go, oh my gosh, job postings for software engineers are rising. And then other people go, no, no, no, wait. Look at, zoom out a little bit and look at the hiring. But this, the data for, on Fred for software engineers only goes back to 2020. So there was this massive overhiring of software engineers for two years. And then now there's a, so neither of these things are normal. Yeah. Right. That's, that's, that's the hard part about the context here is you're right.

26:48Ben Carlson:Miles's idea that the pandemic, we're still working stuff off. That is, that is very true. I, I am a, I'm a big believer there. All right. So I listened to Mark Andreessen on this Lenny's newsletter. I've never heard of this podcast before, but this is the kind of thing. this was probably the most bullish, like optimistic glass cephal take on AI.

27:09Michael Batnick:Market is open. Holy shit. International stocks are down 4%. IFA is down 4 % of the open. That is a big drop. VIX is at 26%. Wow. Emerging markets are down 5.6%. Holy shit. That's a big one.

27:27Ben Carlson:So this decade alone to me seems like another reason for Europe to like loosen the purse strings and be like, we have to get, We can't just keep relying on this.

27:36Michael Batnick:Silver's down 9 % again. Unbelievable moves. Wow.

27:43Ben Carlson:Okay. Never a dull moment. Wait, I hear the geese.

27:46Michael Batnick:Is that the geese?

27:47Ben Carlson:Yes.

27:47Michael Batnick:The dogs didn't work. The geese migrated back. It sounds like somebody on a bench that's squeaking. You know what I mean? Like somebody rocking on a bench.

27:56Ben Carlson:They just squawk at each other all day. The kiddin' and geese are the worst. Absolute worst. I wish I had a hunting license to just out of my window. Just take them all out. They're the worst. All right, so all the negative pieces go mega viral. And Marc Andreessen was on this podcast like a month ago, and I didn't hear one person talk about it. Oh, that was a month ago? It was at the end of January. And so I finally, someone had shared it and said, hey, listen to this. And he should be the spokesperson for AI because it's the most optimistic tape. He's saying it's not utopia of like Star Trek and everything's going to be figured out and no one's going to work, but it's not dystopia either where no one has a job.

28:31Ben Carlson:and he talks about how like if we do get this really high productivity growth that people are worried about like and it's going to put people out of jobs like that is that means like lower prices and it's not going to cost like that like nirvana period of ai is going to cost so much abundance and productivity growth no one's going to have to work it everyone's out of a job

28:50Michael Batnick:i think this obvious not to not to belabor the scary part though it's just the speed because in previous technological revolutions it took time. Like -

29:01Ben Carlson:Yeah, this stuff is, it's just, you're right, this stuff is happening fast, but the speed at which the labor market has changed has not happened yet. People are still extrapolating. That's the problem. That's true.

29:09Michael Batnick:Hold on, just put a pin in Mark for a second because we got a few emails like this where people are saying that they tried AI and it didn't work and they went back to humans or their friend, their spouse works at a company that has implemented AI and it's a shit show and they're trying to unravel it. And therefore, you know, it's overblown. Like sort of don't worry, this is all nonsense. No, no, no. The pace at which these things are improving, it's not like the product that didn't work today is just like, okay, I guess it doesn't work. It's moving so fast. And you, like just the speed at which these things are getting better.

29:51Michael Batnick:So I think there's a lot of people that are like taking false, you know, comfort in the fact that these models maybe aren't able to do everything yet.

30:01Ben Carlson:We get emails from people every week being like, you guys don't know what you're talking about. AI is not going to be a genius. You're right. This is the worst it's going to be is absolutely true. I think you can't take that. I'd take both extremes off the table. I don't like people who have the extremes of like, oh, this is going to be nothing. You can't have that mindset either. But Andreessen made the point that I was kind of trying to make about, he's saying this is all happening in the face of declining population growth. Human workers in the next 10, 20, 30 years are going to be at more and more of a premium.

30:29Ben Carlson:If you combine declining population with less immigration, the remaining human workers are going to be at a premium, not a discount. So again, his is a very optimistic take, but I liked his, what did he say? It's the tasks that get disrupted, not necessarily the jobs all the time.

30:43Michael Batnick:Yes, that was a great take. And I hope that's right.

30:46Ben Carlson:And he gave the example of a secretary that used to type up every single memo and every message for an executive. and now the executive literally does all the typing themselves in email, but the secretary still has a job. They just do different tasks now, and that's what he was saying is going to happen most likely to many people is that you just become more efficient and more work, and I tend to be on his side of things, his optimistic lean about what this is going to mean. Did you think anything he said was too optimistic?

31:15Michael Batnick:I think that part was a little, I think there's a lot of truth, but it might be overly optimistic. Put it this way. I don't know that I feel a whole lot better than I did a week ago, to be honest.

31:24Ben Carlson:The interesting thing to me is that if you listen to economists, they are very like, they're very, and they're in the books and in the weeds. They're very level-headed about this. And I thought Andreessen's take was very economist. So Paul Krugman wrote, the Citrini Post argued that investors and workers hurt by AI will cut their spending, which they will. But if AI delivers big productivity gains, it will reduce prices and raise real incomes in sectors that aren't displaced, causing other Americans to spend more. There's no reason to believe that disrupting part of the economy will reduce overall demand.

31:51Michael Batnick:That part to me rings true. And so I guess if there is continued growth and more spending, more spending has to be good for somebody. It can't just be like AI's gain. Right. There are companies that absorb the spending. Yes, exactly.

32:14Ben Carlson:Again, for the people who get displaced, that's not very much comfort. But the whole AI is going to wreck the economy. I mean, I think that economists as a whole seem to not really believe that. Maybe their assumptions are way too simple, too.

32:26Michael Batnick:So that's going to be the theme, in my opinion, for the next decade. The macro versus the micro. Yeah.

32:33Ben Carlson:Yeah. And the micro stories are going to win out. Greg Ip at the Wall Street Journal says, if such a revolution were upon us, we should see some sign of it. We don't, at least not yet. The ranks of software developers widely assumed to be acutely vulnerable to AI are up 5 % in January from a year earlier, a pace largely consistent with the past 23 years. So the thing is, we're seeing anecdotes. We're seeing anecdotes. But if you look at the aggregate data of the labor force, we're not seeing big changes yet from AI. We're just not.

32:57Michael Batnick:What do you mean? Well, yeah, give it a minute. It's early. What do you mean the micro data is going to win out?

33:04Ben Carlson:I mean, people are going to look at these individual stories and latch onto those as opposed to the macro overall data. And I'm saying, I'm going to wait until I see the macro data to have an overreaction here. I'm not going to overreact to it until I see it in the data.

33:16Michael Batnick:What's coming on the micro macro front might make the vibe session look like a walk in the park in terms of like the divide between the data and the vibes. Because you know the reporters are only going to interview people that have been displaced. There's not going to be any positive articles about the societal benefits.

33:35Ben Carlson:No, if you're using AI to make your job better, no news reporter is going to care about that. It's just going to happen. I thought this was interesting. This is from Old Rope Research. It asks, why is H &R Block still doing so many tax returns? If TurboTax exists, why are people still hiring people to do their taxes? H &R Block prepares tax returns and offers auxiliary services to clients 10 ,000 retail locations. And they've been doing around 20 million tax returns per year for 25 years, despite stiff competition from TurboTax and the federal government, which now has this easy system that was implemented in 2017.

34:12Ben Carlson:No real growth in numbers, but still, the whole tax prep ecosystem seems to have a permanent class of 20 million people who demand H &R block services, with revenue per return cagering at 2.7 % per year for 23 years.

34:25Michael Batnick:Did you say cagering?

34:27Ben Carlson:That's what he wrote. Cagering? Wait. Oh. Cagering. Cagering, sorry. Okay. Not cagering. But it's just saying that, like, for some reason, some of these businesses, it feels like they should be disrupted, and they haven't. And I think that's going to be the surprise with AI is the businesses that don't get disrupted. I don't think people are thinking through which businesses won't get disrupted. Okay, can I give a simple example of AI being cool? Yes. So my kids, my twins are in third grade and they do this math thing where it's a timed math question and they do multiplication. So it's twos, threes, fours, all the way up to twelves, right?

35:10Ben Carlson:three times two, three times four, it's the same. And you get 60 seconds to complete it. And if they don't, if they complete the level, they go up to the next level. And so they're very competitive. So if they, if they don't pass one of them one week, they come home and they work on it and they practice, which is kind of cool to see. So then they go to division and they're like, ah, division's harder than multiplication. I got it. And so I went to Claude and I said, make me a 10 question quiz for each of these numbers. Cause I looked, I tried to do it on my, on the iPad. And it was like, you have to pay$9.99 a month for this math thing.

35:40Ben Carlson:Like, oh, that's stupid. So I asked Claude, create this for me. And Claude created it. And like, if they pass the quiz, all this confetti rained and stuff. And it's just this little stupid thing. And it was awesome because now they have one for, I say, okay, do this for the next one. And then it didn't work one time. I said, it didn't work. Fix. And then it fixed it immediately. That kind of just small little thing. Yeah, that's amazing. It's really cool.

36:01Michael Batnick:I hit my limit on Claude yesterday because I was only paying$20 a month. And I couldn't have hit$100 faster. Like, without any hesitation. I don't think there's 100. I don't think I pay$100 for anything other than like internet, right? Any like sort of monthly service. That's not true. Phone bills or whatever. But anyway, my point is, it was not even a split second decision. I was like, all right, I need more.

36:28Ben Carlson:I am diversified. I'm using Claude and Gemini in chat now. and I, for some reason, I just know which ones I want to use for which, and I'm not, I'm using them all.

36:38Michael Batnick:Email. You mentioned Star Trek earlier in the show. Watching the episode this week, I realized what it would help, I realized what would help Michael not be so down about AI is if he had been a Star Trek fan. He would realize that AI and computers doing every menial task isn't a nightmare, but is actually the world of Star Trek. People don't have jobs in the show because they need money. there is no money. They have jobs if it's something they are passionate about and it helps to advance humanity. Okay. Still not watching Star Trek, but.

37:10Ben Carlson:That's the abundance. All right. I already did the.

37:14Michael Batnick:I just, I reject the whole argument of the abundance for four-day work week. What would you do with, what would you do with your time? People do not want abundance. No.

37:25Ben Carlson:And again, we would have to have some sort of UBI or like, yeah, I don't see.

37:29Michael Batnick:I could hear, I could hear people pushing back like, yeah, it must be nice that you actually like your job. I get it. Not everybody likes their job. The question is, could we have this for 5 % to 10 % of the labor force

37:39Ben Carlson:that gets displaced, that they're going to have to have some sort of UBI? Is that possible?

37:45Michael Batnick:That is such a political lightning rod. I don't know. Yeah.

37:52Ben Carlson:That's the thing people are thinking about. All right, let's talk real estate. California, I think, is the most broken housing market in the country. This is from the Wall Street Journal in California. About the only way to get a house is to inherit one. 18 % of all property transfers in the state last year, representing nearly 60 ,000 homes, were made through inheritance. That is a record in California. It's double the national average, which is 8.8%. So they're showing that this number of inheritances is just rising every single year. And they had these stories of these people saying, hey, the parents bought a house for$150 ,000 back in 1990, and now their kids are just waiting for them to die so they can take over their house, and that's the only way they're going to own a house.

38:34Ben Carlson:And they're saying the big part of it is the property tax thing. So that Prop 13, where they capped how much property taxes can increase by, that just makes it so much harder for new buyers who have much higher market valuations and much higher taxes to pay. And you see this in a lot of states. Michigan announced this recently, that they're trying to cap or reduce property taxes that baby boomers pay. And this is going to be way more generational warfare if they keep trying to do this stuff. Baby boomers saying, listen, we don't have kids in school anymore. Why should we have to pay the taxes for it?

39:13Ben Carlson:Oh, boy. Anyway. This whole inheritance thing with housing is going to be a thing in the future, though. This is going to be a big thing.

39:22Michael Batnick:I wonder what people are going to do with the homes that they inherit

39:25Ben Carlson:that's the question right

39:26Michael Batnick:I would assume most sell maybe if you live there that's because you get

39:30Ben Carlson:the step up basis and cost so you don't have to worry about paying taxes

39:37I don't know

39:38Ben Carlson:it's going to be it's going to be a big story for decades to come you're right do kids want to live in their parents' house tell those geese

39:44Michael Batnick:to shut up go throw a rock at them unbelievable

39:47Ben Carlson:send your dog over here to bark at them please My dog wouldn't help much. God. All right. You have been talking about the private equity firms for a while now. And you were bullish, I don't know, 18 months ago because of the coming wave of wealth management. And the worry now is, okay, this is going to stop or come to a halt or people are going to take a breath. And these stocks are getting crushed. Blue Owl is down 60%. This is from bespoke. KKR is down almost 50%. Aries is down over 40%. Blackstone is down over 40%.

40:19Michael Batnick:So Blackstone is down another 8 % today. I own this stock and I will be selling it today. And I will say, we'll get into the story in a second. I would say that this sale that I'm going to be making today is probably going to look stupid in, I don't know, if it's a year, two years, three years. I don't care. there are stocks that you are comfortable holding for a long time. And for me, I have no interest in finding this tape. So I'm down 13 % of the stock and I'm going to take a loss today.

40:55Ben Carlson:It's okay what happens. So I think with the market as a whole, you never wait for the dust to settle. You don't wait for the dust to settle to invest. I feel like with stocks like this, it's okay to wait for the dust to settle a little bit. Yeah. Is that fair?

41:07Michael Batnick:Let me just clarify. So this pile of money that I've been talking about with stocks that I'm trading stuff, this is not like my buy and hold account. This is more of a high, right? So I'm not looking to, now like last week I said Netflix, I'm buying and holding that name because I was comfortable with whatever the outcome was, not to brag, which we'll get to in a sec. This is not one of those names. So I think that, I think that, listen, selling Blackstone is going to look foolish in hindsight, but I was wrong. So here's the story.

41:36Ben Carlson:Hang on, Blackstone fell almost 40 % during the Liberation Day sell-off last year, recovered almost all that loss, and is now 20 % below the lows of Liberation Day. Wow. This is a legitimate crash.

41:48Michael Batnick:Hell yeah, it is. So the story is, all right, so it's a multi-pronged story. I might have said this last week, so I won't belabor the point. All right, I guess I'll -

41:57Ben Carlson:Every headline that comes out about private credit is terrible these days. Yeah. Every one of them.

42:01Michael Batnick:So private credit started to decline. I don't know when it peaked. A year or two ago, the reason why is because these things have floating rates, which is what made them so attractive in 2022 when the rate hiking cycle stopped and rates are coming down, investors are getting less, less reward. Okay. For every same unit of risk because they're getting lower distributions. So that had already been weighing on these, on these instruments to begin with. And then it was the cockroach stuff that spooked the market a little bit, even though we saw no credit distress, like that part of it did blow over in the sense that there wasn't any sort of market contingent.

42:44Michael Batnick:Any of the, now maybe it'll come out in a year or two, I have no idea. But the first brand's tricolor stuff, that sort of stuff didn't spread, but it didn't help sentiment. And then the nail in the coffin was software. And that's the part of it that I didn't see coming, obviously, that made my thesis 100 % wrong. because B-Cred, for example, 26 % of the portfolio is in software stocks. Now, if you look at the equity, I know these are senior secure, like first lien debt type of instruments. But if you think about the equity of the mega cap stocks that are down 60%, what do you think the equity is down on these middle market companies that are doing $300 million in earnings.

43:32Michael Batnick:90%. So again, there's no, the fundamentals of these portfolios look good today. Investors don't care about today. So the story broke yesterday from the FT that Blackstone's flagship private credit fund was hit with$1.7 billion of net outflows over the past month. It's an$82 billion fund. So it's 8 % of the assets wanted their money back. What was interesting to me is that they had$2 billion of new money come in in the first quarter,$3.7 billion of redemptions. I'm guessing almost all of that$2 billion happened in the first half of the quarter. There's no way that anybody is allocating today. So that number is going to be even worse in the second quarter.

44:18Michael Batnick:Now, what's interesting is that Blackstone paid out the redemptions in full. So 5 % of the money wanted back. They gave it back.

44:28Ben Carlson:So they didn't gate it or anything like that.

44:30Michael Batnick:They didn't gate it, but they even gave back 7%. So they honored all the redemption requests. How did they do that? The firm and its employees invested$400 million to help cover the request, which is interesting. I think that's a sign of confidence. Again, I think that -

44:52Ben Carlson:It's also one of those things that's not repeatable every time there's a big redemption request, though. That's the problem.

44:57Michael Batnick:So the point, like, so why am I selling this stock that's crashing? Because who, like, I'm not interested in getting married to the stock. Who knows how bad it's going to get? I don't care if it's going to be higher in two years, if it's going to be down 20 % from where I bought it. I'm not interested in taking a 30 % loss. You understand?

45:16Michael Batnick:Anyway, I was obviously wrong on that one. Cut your losers short, right? Is that what they say? Well, yeah, I bought this to make money, and I'm not making money. So that's trading. All right, let me play.

45:30Ben Carlson:It's going to be interesting to see what happens to this space for the first time in, you know, however long, where money is not just pouring in.

45:38Michael Batnick:Now, okay, actually, you know what? This is a very important point to make. The fee-related earnings are going to be relatively stable, very stable, because the nature of this vehicle. So what's so interesting is that we're talking about like these private funds and the structure that is causing the problem because people are like, well, I want to get my money out before everybody else does, right? That's actually helped. That's saving the investors. If this was like publicly listed, the thing would be getting mauled. Right. Oh, yeah. Right? The thing would be absolutely getting mauled and making the big assumption that there is not catastrophe waiting in the portfolio.

46:33Michael Batnick:The investors that are not allowed to get their money back will in all likelihood be better served in the long run. You can't panic.

46:43Ben Carlson:Even if they're not necessarily happy.

46:44Michael Batnick:Yeah. You might be pissed off, but you might be better served in the long run. All right. Let me play something for you. We're talking about prediction markets now. This is from Mike Selig. He is the chairman of the CFTC. This was February 17th.

47:04Ben Carlson:CFTC Chairman Mike Selig here. Over the past year, American prediction markets have been hit with an onslaught of state-led litigation. In response, the CFTC has today filed a friend of the court brief to defend its exclusive jurisdiction over these derivative markets. Prediction markets aren't new. The CFTC has regulated these markets for over two decades. They provide useful functions for society by allowing everyday Americans to hedge commercial risks like increases in temperature.

47:41Michael Batnick:Hold on. Let me play that black piece. useful functions for society by allowing everyday Americans to hedge commercial risks

47:49Ben Carlson:like increases in temperature and energy price spikes.

47:54Michael Batnick:They also serve as an important check on - I can't anymore. Okay. Did he just say they allow everyday Americans to hedge their risk? If the meteorologist is wrong. So, all right. The governor of Utah quote tweeted this and said, Mike, I appreciate you attempting this with a straight face, but I don't remember the CFTC having authority over the derivative market of LeBron James rebounds. These prediction markets who are breathlessly defending are gambling, pure and simple. They are destroying the lives of families of countless Americans, especially young men. They have no place in Utah. Okay. Prediction markets are -

48:34Ben Carlson:Because the state thing, there's still a lot of states you can't do draft kings or fan dueling, right? You can't bet on sports legally yet.

48:42Michael Batnick:Do you think, can we say with a straight face that people that can't get insurance in Florida are going to be using the prediction markets to insure themselves or hedge the risk?

48:52Ben Carlson:Of course not. Because I know it doesn't sound like the dumbest thing in the world, like the idea,

48:59Michael Batnick:but also the idea that it's actually going to happen, that there are actually people who are uninsurable that are going to be aware of and have the means to properly hedge out the risk. What planet are these people on?

49:12Ben Carlson:Right, or if you were worried about higher gas prices from a war in the Middle East, you bet on an energy contract as an insurance every month or so, and it finally spikes or something because energy prices rise. Like, no one's actually doing, it sounds really great in theory, no one's actually doing that.

49:28Michael Batnick:So my take on prediction markets is that five to 10 years from now, they are going to be a normal part of of the conversation. They will have been fully integrated and regulated. But between now and then, there's going to be a lot of smoke and a lot of really pissed off people. Because for example, one of the solutions that I had last week for these markets, which I think, I do think that there are aspects. First of all, I think it's inevitable. All right. So we can not like it all we want. But I genuinely think that there are aspects that are positive for society.

50:01Ben Carlson:No, they're not going away. You know what it's like? I had a friend in high school whose dad was a big like boxing fan and he used to get the original UFC fights. And this is back when there was no, so it was like a 450 pound dude versus like a 128 pound jujitsu guy. And like, there was no rules. There was no weight classes. It was just this crazy thing. And every once in a while, like we've bled all over the thing. And it made no sense. And now there's weight classes and there's belts and there's rules and there's limits. And that's the prediction markets. Like they're the UFC in the early days still.

50:30Ben Carlson:They need rules and regulations.

50:32Michael Batnick:So I don't even want to touch the third rail of like, Like, should betting on wars, could that have societal benefits to warn people? I have, come on, I'm not going to go there. But this is the part that is absolutely insane. And there's nobody that likes us. So Mike Levin tweeted, it appears that a polymarket account called MagaMyMan made$515 ,000 in a single day betting on last night's US strike in Iran. With the first trade placed 71 minutes before the news broke publicly. When this person bought in, the market had this at a 17 % probability. They turned roughly$87 ,000 into over half a million dollars overnight.

51:15Michael Batnick:Bloomberg was all over this. They wrote, as U.S. and Israeli bombs fell on Iran this weekend, bettos on Polymarket, where$529 million was traded on contracts tied to the timing of the strikes, were cashing in. Six accounts on Polymarket made around$1 million in profits. The accounts were all freshly created in February, and it only ever plays bets on when U.S. strikes might occur. Right. I don't think anybody...

51:37Ben Carlson:It's a big money inside of trading out.

51:38Michael Batnick:Come on. It's just... We just... We got to do better. There was also a smoke around Kashi, maybe even more so, actually.

51:44Ben Carlson:Well, it's like... People have told us with the... If there's... The reason that some of these NBA players have gotten caught by DraftKings or FanDuel is because it's like if there's a crazy amount of money being bet on a guy for getting over or under rebounds in a game, they know that it's red flagged. Right? So this kind of stuff should be red flagged by these... If they see... that's like this happening. It should be red flagged and they should just void them.

52:06Michael Batnick:Right. Anywho,

52:12Michael Batnick:so I don't want to misspeak, but Calci had a market. Will the leader be out by a certain date of Iran? But they're not allowed to, so they are regulated by the CFTC. Polymarket is not. You cannot bet on death. Like, thank God the CFTC does not allow you to do that. But that's sort of like a, I don't know if it's a wink wink, but come on, how else would the Supreme Leader be out? He's been there for how many? The only way for him to leave was through death.

52:42Ben Carlson:Like let's - So people were really mad about this, obviously.

52:45Michael Batnick:Let's call a spade a spade. So the bets were voided. They refunded all fees and whatever. And it was returned to the probability of wherever you place a bet. So if you would have won money, you didn't. Anyway, people were pissed off, but we just got to clean the shit up. I guess.

53:06Ben Carlson:Here's a really good use case for it, I think, about putting your money where your mouth is if you think something is right. So this is from the Wall Street Journal. Wait, hold on.

53:11Michael Batnick:Can I just say one last thing on this? So on the positive externalities from this, what if there was a market on the Citrini think piece? Will unemployment be over 10 % by 2028? And guess what? If that was a liquid market and it was showing a 7 % probability, or whatever, that would make me feel better. And it's not to say that it would be right, but I value the wisdom of the crowds.

53:41Ben Carlson:That's a put your money where mouth is. So that's what this Wall Street Journal piece is. The tax nerd who bet his life savings against Doge. Remember, there were tech people who were saying, Doge is going to balance the books. Just wait. We're going to cut trillions and trillions of dollars of federal spending. This Alan Cole guy said he put his life savings, $342 ,000, and he basically bet, they had this thing that each quarter federal spending had to exceed the level of spending in 2024 fourth quarter okay so like he just had to bet that like it wasn't going to fall by 60 billion dollars something of course guess what nothing stops this train federal spending did not fall it kept rising and he thought he said just knowing how government works there's no way they're going to be this much spending it's and he i guess he made he made 30 on the thing or 40 or something made like$128 ,000.

54:28Ben Carlson:Great story. Love it. He took all of his money for his brokerage account. His wife was like, what are you doing? I it's honestly, it's great because he was like, listen, the way that people are talking about this cutting money, which is funny to think back, like people really thought that we were going to fix spending problem. And we're out. Guess what? We're never going to fix it. But that that was his thing is like, we're never going to fix it. And he put his money where his mouth is. And he won. He was thinking like, this is this is an arbitrage. This is a risk for bet. But he also said, like, listen, the virtue of a matching market is you can take the good side of a bad bet someone else's bad bet.

55:00Ben Carlson:So other people had made, literally put their money in their mouth and said, we think the government is going, Doge is going to work. They are going to be able to cut spending. And they were wrong. That's the cool thing about these markets. You're right. Hey, you think AI is going to take over the world? Put your money in your mouth and bet on it. Yeah.

55:17Michael Batnick:I like that. Yeah, there's great parts of it, but the insider trading stuff, the betting on war stuff, not great. Okay. All right. So, wrong on Blackstone. Certainly won't be the first. It was not the first. It's not even the hundredth, I'm being honest. Won't be the last time that I lose money on a stock. One thing that I was extremely right about and made money on, I still own the stock. I made the case on what are your thoughts for IMAX in April of 2024. Yeah, you've been talking about this for a while. The stock was$17. It's now$42. And I would act like I've been there before if I had. The truth is, I haven't.

56:00Michael Batnick:Okay? So allow me for a minute to pat myself on the back. I've said on the show a million times, I am not the type of person. I do not have the personality, unfortunately, to ride like a, forget about a 10-bagger. I take winners too fast. Okay? Now, I don't take big losses. That's one of my strengths when it comes to trading. But I have a trouble. I've never made more than 150 % on a stock. Okay? but the thesis behind IMAX was that people are going to continue to want a premium experience and when I said this movies were so dead the theater was so dead this idea was obviously not consensus so the idea is

56:43Ben Carlson:if you're going to go out to the movie and you don't go to the movie as much as you did in the past you're going to IMAX go to a really nice yeah go high end I used to go to one movie a month Now I go to two movies a year. I'm going to make it worth my while.

56:54Michael Batnick:Exactly. So the stock was up 14 % after a record earnings report last week. Rich Gelfand, the CEO, said IMAX releases earned 58 Academy Award nominations, including five of the best 10-picture nominees. Every one of the Warner Brothers' 30 nominations was for a film that played on IMAX. They delivered 20 % of the domestic opening for Sinners, One Battle, and F1. So this chart that they show of the top 10 grossing IMAX titles for the domestic opening weekend, they showed like the market share that they have. And in 20, pre-COVID, it was 9%, 10%. And now it's 15%.

57:35Ben Carlson:But now they make up how many, what percentage of the theaters?

57:38Michael Batnick:Less than 2%.

57:40Ben Carlson:Less than 2%. That's crazy.

57:42Michael Batnick:So literally like 20 % of opening domestic box office weekend. So people are going, people are showing up for these movies, which is awesome. Let's talk about, let's talk about Hollywood. So Netflix, you know what? Let me just say on this thing for a second. So I do not, I do not check the comments. I really and truly don't. I, I, um, I love that we have so many people commenting. I feel blessed out of my mind. For newer listeners, I guess I haven't spoken about my past in a while. like I was a loser, kicked out of college twice, didn't have a job until I was 27 years old. Like I was going nowhere fast in life.

58:22Michael Batnick:So the fact that we have an audience and that I'm a hashtag thought leader and that people care what we say, it's unbelievable. I love it. And I don't mind the fact that we have a lot of negative comments on the YouTube. We have a lot of people who post wonderful comments, so I love you more. But the fact that we have people that post negative comments, it doesn't bother me because we're public figures. And this is part of what we signed up for.

58:46Ben Carlson:Every 10 positive comments, you read one bad one and it sticks you the whole day.

58:50Michael Batnick:So I don't mind that there are negative comments posted about us, but why would I choose to see them? Right? Like, why would I expose myself to that? Because it really bumps me out. I'm like, I'm a sensitive person. I don't like, nobody likes seeing stranger shit on them. So it bumps me out and I genuinely, genuinely do not check it.

59:08Ben Carlson:Negative comments make me stronger. Okay.

59:11Michael Batnick:Not me, not me. So anyway, I, I love that they're there, but I don't need to see them. Anyhow, I made the stupid mistake of waiting into the comment section. So on Friday afternoon, I was sitting on my butt on, on fake turf. Uh, Logan was at like a, a baseball clinic, right? Swinging the bat and whatever. I said, Hey, you know what? I kind of nailed the software Netflix bottom, especially and Netflix was my biggest position by far. Like, I fucking nailed it. Let me see some nice comments. Let me see some people say some nice things. Give myself a shot of the arm. Someone at Ritholtz, please take one to two hours and teach Michael about basic technical analysis.

59:50Michael Batnick:At the very least, don't buy a stock in its free fall. Wait for it to go sideways. Blah, blah, blah, blah. Excuse me, Peter. Does Warren, you're teaching Warren Buffett about technical analysis? Okay.

1:00:01Ben Carlson:You said you were buying when there was blood in the streets last week.

1:00:03Michael Batnick:I bought when there was blood in the streets and I respect price. And I always say that I can't help my bad behavior sometimes for buying stocks that are out of favor. I'm up 25 % of Netflix, Peter, not to brag. Um, but the thing that really made me laugh, but also like really didn't make me laugh was he just, somebody replied, he just bought a waterfront home. He's over leveraged and he's patting. Perfect. I thought the comments were gonna be nice. I nailed it.

1:00:32Ben Carlson:No, no,

1:00:33Michael Batnick:I nailed it. I thought people were going to be nice.

1:00:36Ben Carlson:Yeah, but you give out five stocks and three of them go up and two of them go down. Of course, people are going to focus on the two that go down. That's hilarious. So let's talk about the Netflix Warner Brothers stuff. Oh, yeah. Let's do that. Okay, so Paramount won. Netflix backed out. Netflix backed out of this so freaking fast. And I guess they saw the writing on the wall. They don't want to mess with it. Now, you can't say Netflix went through this whole thing because they wanted to just mess with Paramount, jack up the price for Warner Brothers, and then walk away with a$2.8 billion exit fee.

1:01:05Ben Carlson:It's too much work for that. They wanted it.

1:01:07Michael Batnick:They wanted the asset.

1:01:08Ben Carlson:Netflix is so much better off because of this. But here's the thing that kind of irks me. These big, huge media things where a company takes on tons of debt, and that's what Paramount does, these mergers never, ever work. I wanted to see what Netflix would do with this. That's the thing that kind of bums me out, is I wanted to see how Netflix would handle this, being this big behemoth. And I know a lot of people didn't want it. I wanted to see what Netflix would do with HBO. I'm HBO and now I'm with Paramount. They're like the two buggiest streaming platforms. Like you click on it and they never work and they freeze.

1:01:38Ben Carlson:Like, I don't think Paramount's going to make things better. And I think this is going to be another media merger that there's too much debt being spent and there's a million cuts of people to pay off the debt. And then it just kind of in five years, we go, oh yeah, let's spin these out now because it didn't work.

1:01:53Michael Batnick:HBO has a new show out called, what the hell is it called? Called DTF, St. Louis.

1:01:59Ben Carlson:The Jason Bateman one, yeah.

1:02:00Michael Batnick:Did you watch it yet?

1:02:01Ben Carlson:No, did it come out? I saw the preview. It just looks good. Okay. All right, I'm in. So you're bummed by the outcome? I just wanted to see, because again, these media mergers, they never work. Maybe this one will. But I wanted to see what Netflix would do with it and what they would do with HBO. I wanted like a wider, I wanted to see what HBO would have done as part of Netflix. That's what bums me out.

1:02:28Michael Batnick:Yeah, I agree. There was no good outcome here. But I think this is the worst outcome. Now, Paramount, this was like, they needed this. So does history say that this is not going to work? Yeah, but they had no choice. Like, they were so dead without this asset. Sarandos is saying that there's going to be costs cutting in excess of$16 billion.

1:02:55Ben Carlson:Yeah, he was just doing the math based on the debt. And they, CNBC had a piece where they interviewed people who work at Warner Brothers and they're like, oh, we're screwed.

1:03:02Michael Batnick:This is a catastrophe for people in Hollywood and for people that work at the news departments. Like there is going to be a ton, a ton of layoffs. So perhaps better for the theater industry, but.

1:03:19Ben Carlson:I think we're putting off the inevitable by not having Netflix buy it out.

1:03:22Michael Batnick:Oh my God, the amount of cuts. All right. Anyway, I'm in Netflix at$77.50, Peter. And I'm not selling. This is a buy and hold for you, huh? How do you like that? This is a buy and hold for me. All right. Project Hail Mary is going to be a big one.

1:03:43Ben Carlson:Is that a summer blockbuster? When does it come out?

1:03:45Michael Batnick:It comes out in April. They spent$250 million on this thing. So Amazon has not. This is from Bellamy.

1:03:53Ben Carlson:One of my favorite fiction books I've read in the last five to seven years.

1:03:57Michael Batnick:I think they can nail it. I'm bullish.

1:03:59Ben Carlson:I hope. Gosling doesn't miss very often.

1:04:01Michael Batnick:These are Amazon's top 10 post-COVID box release, box office hits. Red One. Do you remember that movie?

1:04:12Ben Carlson:Yeah, I tend to take my kids to see it.

1:04:14Michael Batnick:The Beekeeper, The Accountant 2, A Working Man, Challengers, Air, Crime 101, The Boys in the Boat, Mercy, and Blink Twice. that's pretty weak. And I didn't even say the numbers. I'm sorry. So the biggest one was$186 million. That is really, really lousy.

1:04:30Ben Carlson:That is interesting.

1:04:32Michael Batnick:That's really lousy. Worldwide? Are you kidding me? Anyway, Project Hail Mary is, I would be shocked if they don't smash the record.

1:04:39Ben Carlson:That makes sense. All right. I thought this was good at the Wall Street Journal. Here's the headline by Emma Camp, who is a Gen Z person who says her whole goal in life is to end the loneliness epidemic. She says, loneliness is for cowards. Knowing is stopping you from throwing a party. And she goes through this whole thing about loneliness, about how young Americans are lonelier than ever, and they're eating alone and working alone. And she says, I'm in my 20s. I'm here to tell you, loneliness isn't an epidemic. It's a choice. My generation has decided that avoiding embarrassment or rejection is more important than developing a thriving social circle.

1:05:12Ben Carlson:The main social obstacle facing Gen Zers isn't social media over simulation. It's their own trepidation. I think young people need to hear this kind of hard talk every once in a while. Me too. They don't need to be so coddled. Me too. I think every time we talk about this, someone vehemently disagrees with us. But I think trading physical health, which is I'm not going to go drink as much anymore, I'm not going to go out and party, for mental health, which is TikTok and iPhones, is an absolutely terrible trade-off for their mental health. Like, I think that is...

1:05:41Michael Batnick:People get really bent out of shape about when people say that young people should drink. I can't believe where society is, how, how, how, uh, bearish people are in drinking.

1:05:53Ben Carlson:Yes, that it's causing huge mental health problems for young people by not partying more. It sounds crazy to say, but it's totally true.

1:06:02Michael Batnick:Yeah. And I honestly, I don't want to hear it. Actually, you know what? Comment away. I'm not going to see it. Um, I will die on this hill. I think that the benefits of drinking, even if you have two drinks, um, greatly outweigh, listen like for me uh and michael you're rational yeah i am okay i mean i am more free to have a good time when i'm drinking do i sound does that sound bad i don't care it's the truth it's a reason

1:06:28Ben Carlson:to socialize too you go to someone's house for a party it doesn't have to be that everyone gets wasted but the other thing that i'm anti is like the aura rings that tell you how that you slept um i don't need a machine to tell me how i slept i can tell by how i wake up in the morning how i feel? Do I feel rested or do I not feel rested? That's how I slept. I don't think that like people over optimize this stuff way too much now.

1:06:50Michael Batnick:That's like for adults. I don't care at that point. You make your own decision.

1:06:53Ben Carlson:Yeah, you're right. True. You and I are at different stages of our life than people in their twenties that need to get out and see people more.

1:06:59Michael Batnick:I also, uh, whatever. It's enough. Who cares what I have to say about this? Um, all right, let's talk about, let's talk about Scream 7, shall we? God. Speaking of Paramount, the David Ellison-owned Paramount can claim the first big number one opening of the year for an MPA title as Spyglass's Scream 7 Roars to a franchise best opening of the year with a$64 million domestic opening, 97 worldwide. Wow.

1:07:24Ben Carlson:So you're telling me that this movie made more than the original one did? The opening?

1:07:30Michael Batnick:No.

1:07:31Ben Carlson:Did I read that wrong? Okay.

1:07:32Michael Batnick:Yes, you, yeah.

1:07:33Ben Carlson:It says franchise best opening of the year. Scream franchise best. Is that what it's saying?

1:07:40Michael Batnick:Well, Scream 1 became a phenomenon. I'm not surprised. Maybe. It's the best horror opening ever for Paramount, beating Paranormal Activity 3. Ugh. Whatever. Okay. Scream was an iconic, incredible movie. Yes? I assume you like, right? You like the original? Of course. One of the best movies ever.

1:08:03Ben Carlson:Changed like the movie genres for the rest of the decade.

1:08:05Michael Batnick:It really did. the 90s. And then Scream 2 was an effective sequel. They went to college. Timothy Olyphant, Billy's mom, spoiler alert. Like, it was good. Scream 3 was pretty silly. And then, like, that was the franchise, right? At that point,

1:08:19Ben Carlson:Scary Movie came on board and just started skewering them. Yeah, yeah. It was like, come on, this is too much.

1:08:23Michael Batnick:Yeah. So it got silly and that was the end of the trilogy. And then they rebooted it with Scream 4. It was okay. But then they did another two, Scream 5 and 6, with legitimate actors and genuinely good movies. I watched one of them.

1:08:38Ben Carlson:They're okay.

1:08:39Michael Batnick:I mean, dude, yeah, they're not going to win any Oscars, but they were more than watchable. They were actually good. I bet you the critics didn't mind Scream 6. Scream 5, Rodden. So anyway -

1:08:50Ben Carlson:Hey, we talked before about we don't need this. Come on, we don't need Scream 7. We didn't need that.

1:08:54Michael Batnick:So dude, Scream in 2022, 76 from the critics and 82 from the audience. It was Jack Quaid. It was genuinely a good movie. so I was I don't know that I thought I had high expectations of this movie going in like I wasn't like oh this is gonna be awesome it was so so bad it felt like I don't even want to insult Netflix and say that it felt like a Netflix movie it felt like a lifetime movie it was one of those movies that so I watched the I Know What You Did Last Summer reboot at home, I didn't go to the movie for that because that looked like dog shit. Where when I saw that movie, I literally, I fast forwarded just to the murder scenes because I watched the first time it was like, oh, this is depressing.

1:09:42Michael Batnick:And I just fast forwarded through the kills. If I watched Scream at Home, that's what I would do.

1:09:46Ben Carlson:That's a very psychotic thing to do.

1:09:47Michael Batnick:Yeah, just hear for the fake murders.

1:09:50Ben Carlson:I just fast forward to the murder scenes, not past the murder scenes, just the murder scenes.

1:09:53Michael Batnick:It was so, it was so bad. It was so bad. And that married with the Mortal Kombat 2 trailer sort of bummed me out on like all the state of the justice slop. Now, the good news is that this is done. At least this part of the story is over. They will. But I can't believe the audience must be so disappointed. A record breaking. It was so bad. My God. So, so bad. On the flip side, I finally saw. I finally saw Marty Supreme.

1:10:23Ben Carlson:And?

1:10:24Michael Batnick:You saw it, right?

1:10:25Ben Carlson:I did not see that yet.

1:10:26Michael Batnick:Oh. Fantastic.

1:10:28Ben Carlson:Okay. You liked it.

1:10:29Michael Batnick:So good. All right. You're so good. It felt very similar to Uncut Gems, which of course is the same director, but it was just more of that. Fantastic. Fantastic movie.

1:10:39Ben Carlson:All right.

1:10:39Michael Batnick:Lastly, Ben, this is not for you. And in fact, this is probably not really for many listeners, but I watched Predator Badlands.

1:10:46Ben Carlson:Hey, it might be for me. We're on a Schwarzenegger kick in our house. Okay. So we watched the original Predator.

1:10:53Michael Batnick:George is going to love this movie. And so are you. This movie had no business being as good as it is. It's like a buddy cop movie. Like a, yeah, it was freaking awesome. Like it was a lot of fun. George is going to love it. And so are you. Report back. You're going to like it.

1:11:11Ben Carlson:All right. So I've made a decision in my life. I haven't, I've been stumbling from one audible to the next. I can't find a good audio book. I just, you know, I start and I get bored and I've decided I'm never listening to another biography again. I'm never reading another biography again. They're too boring. I tried Benjamin Franklin by Walter Isaacson. Listen, some great information. He was a great man developing his philosophy. I just found myself mind-numbingly bored. It's just, it's too much. And even though he was the original Kevin Durant, he had burners for all of his newspapers. He'd write in letters pretending to be someone else, you know?

1:11:41Ben Carlson:He was the original.

1:11:42Michael Batnick:So in that book, there was a part where him and John Adams went to France and they slept in the same bunk bed. That's a lot of firepower in one bunk bed.

1:11:54Ben Carlson:Yeah. So anyway, it's good, but I just need, I need like one chapter on these guys. So I went to Gemini and I said, give me a history book that like just, I don't want it to be bored. I want it to be like, I want it to be fast moving. I want it to like cover a lot of ground. I don't want like mind-numbingly boring stuff in this person's life. So he gave me this book. It's called A Little History of the World by E.M. Gombrich. I'd never heard of this book before. It's a book that this guy in Germany wrote for his 12-year-old granddaughter in 1935. Now listen to this. 1935 when Gombrich was just 26 years old and living in Vienna.

1:12:25He was asked by a publisher

1:12:26Ben Carlson:to write a history book for children. He reportedly replied, of course I can. Then he wrote the book in six weeks, working from memory without consulting reference books. Okay? So he said, I'm going to tell the story of humanity in a simple, engaging way. This is the best history book I've ever read. Listen to. How did you find it? I asked Gemini. And this is literally a book, it's called a history book for kids. But it's his explanation and story of human history from the philosophers to the empires, to the wars, to the, every chapter, covers like another different empire. And it's read by a guy with a British accent.

1:12:59Ben Carlson:So that helps. And maybe it's just because I, but maybe I'm a very simple person. The fact that this is literally a history book for kids, but the way he explains all this stuff, like the Egyptian empire and the Phoenicians and like how we got the days of the week and how we got numbers and how we got months and all this stuff and where all this stuff came from. You know, sometimes you hear a piece of history and you go, I should know this. Why don't I know this? I feel like an idiot for not knowing this. Like, Alexander the Great was tutored by Aristotle. I had no idea. That's firepower. Wow.

1:13:32Ben Carlson:It's an unbelievable, and I'm going to make my kids listen to it, too, because it's so good. His storytelling is amazing. Anyway. All right, Ben. It is 10.15. Hang on. I got a couple more recommendations. Oh, go ahead. I'm sorry. All right. So, I've been watching Love Story with my wife still. Can a soundtrack make something better? Because I feel like the 90s music in this show is better than the show itself. Wait, what is Love Story? By the way. JFK Jr. thing.

1:13:55Michael Batnick:Okay, is it good?

1:13:57Ben Carlson:It's a movie to watch with your wife or show to watch with your wife.

1:14:00Michael Batnick:The only good thing about Scream 7 is I saw it with a friend and not only did the entire movie suck, like in 20 minutes, I thought we should have left. The reveal of who the killer was was so convoluted that we were genuinely belly laughing. That's rare. Like belly laughing at the reveal.

1:14:20Ben Carlson:Okay, that happens. So getting back to like why we need another scream. So Scrubs is one of my favorite under-the-radar shows of the late 90s, early 2000s. It was a silly show, but it had some heart. And it had a really great soundtrack, too. And they, 20 years later, decided to reboot it. So the guy who created Scrubs is the same guy who did Ted Lasso and the same guy who did Shrinking on Apple. So they brought back all the cast from the original, and they did it again. And so my wife and I watched the first two episodes because I loved that show. It was very well done. But the thing is, the finale of the show was excellent.

1:14:52Ben Carlson:It was an awesome like, okay, here's what's going to happen to these people. Put a period in it. It's done. The end. Then they tried to reboot it. It's like, it kind of feels like the show, but it's like, did we need this? I don't know. I just feel like we've run out of ideas. Did you watch the first season of Paradise? Yes. I feel like that's a one. I told my wife it's a one season show, but I'm going to give it a second season to try.

1:15:13Michael Batnick:But the first one was so good. I'm cautiously optimistic that the second season will be okay. And then that'll be that.

1:15:20Ben Carlson:There's too many one-season shows. My wife and I tried to watch the second season of Hijack. Remember the Aegis Elba one on Apple? Oh, credit to me. I was out after one season. We were like, ugh, okay. All right, market update. S &P is down over 2.3%. Russell 2000 is down 3.6%. Gold is down 5%. European stocks getting drilled down 3 % to 4%. EM is down almost 8%. The dollar is up 1%. So we're pretty much reversing all of the trades of the past. three months or so, 12 months. Big reversal.

1:15:56Michael Batnick:So, all right. Last week, I bought Microsoft on the air. Wasn't a bad buy, not to brag. I am selling Blackstone, Ben. I am taking a 13 % loss because it's okay to be wrong. It's not okay to stay wrong.

1:16:09Ben Carlson:You know, the funny thing is that software stocks are not really getting cream today. They're down less than the market.

1:16:15Michael Batnick:This is the ultimate Grand Rapids hedge. I think this Blackstone sell will look foolish, but this is not an investment for you, Ben. I'm reiterating. This is not an investment. Don't want the smoke.

1:16:27Ben Carlson:All right. As always, no one knows what's going to happen, including us.

1:16:30Michael Batnick:And it's not investment advice. I mean, if you are following me, shame on you.

1:16:36Ben Carlson:I'm not following you. Yeah, good. All right. Animal Spirits at the compoundnews.com. See you next time. Be nice to Michael in the comments, please.

1:16:49Go good.