Are Free Markets Dead? (EP. 479)

11:45Ben Carlson:Of course, because they're obviously worried, too. Yeah. They wouldn't be doing this if they weren't worried. It is funny, though. Last week, you talked about the fact that if you think the market is wrong, you're probably wrong. Besson is saying the market is wrong. That's a very bold stance to take, and usually you're the wrong one. Exhibit A chart of the week. I want to talk about a few things about this, the debt crisis everyone's freaking out about and why I think it is more of a political crisis than an actual financial crisis. All right, I'm listening. Okay? So, chartkid Matt, a team at Exhibit A, they show record U.S.

12:18Ben Carlson:debt, but interest costs are in line with history. So, they show U.S. federal interest payments as a percent of total federal spending. It's kind of surprising. It's right at the long-term average of about 15%.

12:28Michael Batnick:Can I just say one thing?

12:29Ben Carlson:Yep. I think this is not the worry.

12:32Michael Batnick:I think the worry is the spending. So, you're normalizing for what people think is a very abnormal number. If you compare the spending on interest rates, the interest spending compared to the size of the economy, it's much more uh-oh.

12:48Ben Carlson:So there are a lot of people who get really angry about this stuff. And I think not that people are rooting for there to be a crisis, but they want to be proven right on this. So I put this on Twitter and I knew it was going to stir up a little bit, but I couldn't believe how angry people got. So here's my tweet. My most contrarian take right now is that I'm worried about a U.S. that I'm not worried about a U.S. government debt crisis. We have the biggest economy, the global reserve currency, the most rich people, and there's no substitute for treasuries. We'll keep spending and people will complain, but no crisis will occur.

13:15Ben Carlson:That's my baseline assumption, okay? But here's my worry. My worry is there are enough people who are worried about this coming in crisis that it will be a political thing. And so politicians will overreact and they'll cut social security or they'll cut Medicare or they'll do something to try to get ahead of this. And I think that's the politics of this. That's where the true panic and crisis could come from. Not like this turning into a financial crisis. Is that fair? I think it could be a policy error as a result of people worrying about a crisis that's coming. Well, you know, you were kicking the hornet's nest with this one, right?

13:56Ben Carlson:Of course. But I truly believe this is my baseline assumption that there's going to be no government debt crisis. Let me give you some more evidence. Let me give you some more evidence.

14:03Michael Batnick:Before you give the evidence, just two things here. Number one, the US reserve currency is what the world runs on. And it is the most sacred thing that we and the globe has. It's extremely important. Second, so I think it's worth being concerned, even if it's a small chance.

14:22Ben Carlson:But what's the substitute?

14:24Michael Batnick:Okay, so that's the second point. Whenever people get worried about the strength of the dollar, and the dollar is weakening, there has to be an alternative The money on corporate, federal, individual balance sheets has to go somewhere. And if it's not going into US government bonds because people are concerned about our fiscal irresponsibility, where's it going? Now, we'll talk about this later in the show. Bitcoin, gold, silver, it went there last week. But there has to be a secondary place for it to go. And it's not going to the euro. And obviously, it's not going to the yuan. and obviously it's not going to the corona or any of these other currencies, we're fine for now.

15:07Ben Carlson:But the reason people started crypto in the first place is they wanted to be, they thought the dollar was going to crash and they wanted to be anti-system. The biggest leap forward in crypto technology is stablecoins. What do stablecoins allow you to do? Access to the US dollar. The people who tried to buck the system couldn't get away from the dollar. Okay? So Morgan Housel had a great tweet for me in response. He said there's been such a strong consumer deleveraging that total debt, government plus private, as a share of GDP is flat over the last 20 years. So here's the tradeoff we made. The government took on a massive amount of debt following the great financial crisis and the COVID pandemic.

15:44Ben Carlson:That allowed households to repair their balance sheets. Great handoff. As far as I'm concerned, that's a great tradeoff. Would you rather have household balance sheets as a mess, but the government is pristine and they're running a surplus? No. No, of course not. Right. This has been a good, for the situation we were in, the great financial crisis, the biggest financial crisis since the Great Depression, and then the pandemic, which we turned the economy off. Yes, we had to take on a bunch of debt. And was it all useful? Of course not. But it allowed households to repair their balance sheet in a way that probably would have been, people would have never believed you considering what happened.

16:22Ben Carlson:Okay? So I think that's a fair tradeoff. Colin Roche wrote about this. he's also on my team which makes me feel a little better I feel like I've learned more from calling anyone as far as macro goes the way that he explains it he asks is it time to panic about government bonds and his point he put this chart in here that shows US government public debt that's government debt that's a percentage of total financial assets which is interesting because again a treasury is an asset for someone it's not just debt someone's debt is another person's asset He said they were at the upper end of the range, but still at just 9%.

16:59Ben Carlson:It was 5.5 % in 2005. He's basically saying in the last 15 years, it's pretty much in the range. So like he said, if you're worried about a debt crisis in 2010, and you're still worried about that debt crisis today, then you'll probably have to keep waiting for that crisis. And I am in agreement here. The crisis is more in political sphere than it is in like, this is like a thing we have to worry about now because it's financial.

17:24Michael Batnick:One minor asterisk. And I agree with Colin and I agree with you. Charlie Munger said, the liabilities are always good. It's the assets you have to worry about. Fair. The asset levels are very high right now. So this, of course, yes, that helps.

17:42Ben Carlson:Housing prices have gone up a lot. Stock prices have gone up a lot. You're right.

17:46Michael Batnick:So if there's a bear market and assets prices come in 30, 40%, this chart is going to look very different very fast.

17:56Ben Carlson:That's fair. That's fair. But that happens every time. Speaking of like long-term rates not mattering so much, I just think this is an interesting way to think about it. Jesse Livermore says that take the current outstanding supply at market value of U.S. Treasuries with a maturity of 10 years or more. It's$4.3 trillion. He says Apple is worth$4.6 trillion. In other words, just one single stock in the U.S. equity market is bigger and heavier in weight in the global portfolio than the entire long-term treasury market. So again, the treasury market -

18:23Michael Batnick:It's not the size of the treasury. It's not the size. You're right. It's a signal.

18:28Ben Carlson:But I think putting it in context like this goes to show you how, you're right. The assets, you have to come down 30 or 40%. That's a big, like no one ever thinks about the asset side of the equation. Everyone only looks at liabilities. True. That's the point. The assets dwarf the liabilities. It's not even close. So bringing us all full circle. If you talk to any hedge fund manager right now, they go on CNBC, any macro tourists on Twitter, what are they going to say? You should own gold and short bonds. Every macro tourist on the planet is saying they hate bonds right now.

19:01Michael Batnick:I think Dalio just said that.

19:03Ben Carlson:Yes, of course. Every hedge fund manager is saying this. I'm sure Druckenmiller would say the same thing. And the reasons they give are valid. Spending, nothing's stopping this train with government spending. We took the smartest man on the planet, potentially, Elon Musk, and said, hey, try to fix spending. What did he do? Literally nothing. Oh, yeah. He gave it three weeks. He said, eh, nevermind. Literally nothing is stopping this train. So spending is out of control. It's never going to be reined in. Let's be honest. Inflation is sticky and higher than we've had in a long time. Interest rates are rising.

19:32Ben Carlson:So everyone is saying, I hate bonds. Let's short them. I said this in December 2024. I'm not trying to pat myself on the back. I said international stocks are the most hated asset class in the world right now. I think you could make the same case about bonds right now. The bonds for the pundit and hedge fund investor class are the most hated asset in the world right now. Is that fair to say? Um, don't know. I suppose you can make the case. Okay. So I pulled this chart from our friends at FM Investments, which congratulations to them. Hell yeah. Just got taken over by T. Rowe Price. Amazing. Yes.

20:08Ben Carlson:We've had Alex Morrison talk your book a number of times. Very happy for them. So they have this really cool tool where you can put in, because they do treasury ETFs and they take every treasury from the two year to the 30 year. and they say, what would happen over an estimated 12-month total return on these bonds if rates rose 100 basis points, fell 100 basis points, rose 200 basis points, fell 200 basis points, okay? So now you're a hedge fund manager. What is the one thing you want that sounds really cool in a book or on CNBC? I want an asymmetric risk profile, right? If the gain goes up, it's going to be way bigger than the loss is going to be on the way down, right?

20:44Ben Carlson:I have a cap downside. I have a much bigger upside. These numbers are kind of crazy to me. So it took the 10-year treasury. If rates were to fall 1 % from now, over the next 12 months, you'd get a 12 % return. If rates were to rise 1 % from here, you'd have a 2 % loss over the next 12 months. Love it. Sign me up. I just, I still think that, I don't know what the timeline is because no one can predict the magnitude or the direction of interest rates. At some point, people are going to go, are going to be kicking themselves for not owning bonds or some bonds at these yield levels.

21:17Michael Batnick:I feel like bonds can't hurt you anymore. Now, that's a bit of a, you know, I don't literally mean that. But if interest rates go up another 1%, which would be a big move at this point, it would be a big, big move. Your total return is negative 2%. Who cares? Stocks fall 2 % in a day.

21:35Ben Carlson:Right. Even the 30-year treasury, which is the most volatile, if rates rose 1 % from here, which would be, that would put them at over 6%, you'd lose 8%. If rates were to fall 1 % for 30-year treasuries, you're making over 21%. Like the risk-reward trade-off in bonds right now is way skewed to the upside than the downside.

21:56Michael Batnick:All right, so let me ask you this thought exercise. Under what scenario do rates fall outside of a recession?

22:05Ben Carlson:We have to get inflation reined in. I think rates are structurally higher, which is a great segue to this tweet from Conner said. Connorsen tweeted just thinking about how people spent 15 years saying aging societies would mean low inflation and interest rates.

22:23Michael Batnick:Guilty. There's definitely clips of us in 2020, 2021 saying, I don't think in 10 years have we gone above 3%. How long we were, Ben.

22:34Ben Carlson:I made the case that we have too much government debt now. There's no way they can allow rates to get as high as they are. Didn't matter. You're right. The bond market was the signal. You're right. And it is funny because technology is supposed to be deflationary. You could argue all the spending from, okay, how about this? Why will rates fall? AI. The AI spend right now is powering inflation in a lot of ways. Think about it.

22:57Michael Batnick:It's also powering a lot of bond issuance. And there was a structural imbalance of supply and demand, way more demand than supply of bonds in the 2010s. And that is now going the other direction.

23:08Ben Carlson:So AI gets ahead of itself. Mark Zuckerberg finally says, all right, I'm tapping out. We're pulling back CapEx. Google says we're pulling back in the CapEx. Inflation falls. Bond yields drop hard in that scenario.

23:19Michael Batnick:Stocks fall 25%.

23:20Ben Carlson:Yes. And then bonds are a great hedge, right? Yeah. That's the thing. All right. A little feedback on my young person rant from last week. People must have loved that, no? Well, there was two different groups. Young people and old people. People over 40 were applauding me. Now, I went hard on that for a reason. And a lot of young people basically said, hey, Ben, you sound like a boomer. Eat shit and die. Fair. Fair.

23:46Michael Batnick:Well, there is nothing worse than people that are doing well telling people that are not doing well to toughen up. Doesn't land very well.

23:59Ben Carlson:I just, if a few young people got the message that you play the hand you're dealt, that's my point. Your hand sucks sometimes. But you can't just spend your whole life complaining about it and being a victim. That's all I was trying to say. now how about a bunch of people sent me this this is what i'm talking about from the from the and i don't i think i see young people being softer than older generations every every younger generation is softer than the generation that came before them of course right we when i was in college i was in a fraternity and we had a guy who was he was like the provost of the college or something he came and gave a speech to our fraternity and he said i pledged this fraternity and the guys who like brought me in for initiation went through World War II.

24:41Ben Carlson:He goes, do you realize how hard it was like what these guys did to us who came back from World War II? People of that generation, anyone below them had to be softer. They had to, of course. So I think it's a sign of progress. Still, University of Michigan drops first semester grades to curb mental health crisis. So they are going to, instead of a letter grade, the first semester transcripts will have a pass or no credit. because people, they don't want to have, people have a breakdown their first semester in college. You want to happen to me in my first semester in college? I partied six days a week.

25:14Ben Carlson:It was the worst GPA. I had like a 2.5 GPA. You know what? Did I have a mental health crisis because of it? No. I said, Ben, what are you doing? So I partied five nights a week in the second semester. I went the other way.

25:28Michael Batnick:I think I got a 1.4. And then I thought, I think I got, I think my grades dropped in the second. I think I got a 1.2. Yeah. Listen. By the way, literally. Remember, I think on the show, I found my transcript. It's possible.

25:44Ben Carlson:Yeah. 0.0. Anyway, I just thought that was kind of funny.

25:50Michael Batnick:All right. Before we get to some stock market stuff, there was an article in the Wall Street Journal. Some take on debt for their weddings. These brides are making money. As wedding spending rises, Brides are borrowing from their celebrity, influencer, playbook, finding sponsors to pay for invitations, dresses, and bachelorette parties. Let me just read you two things from the article. Number one, weddings are expensive. The average cost was$34 ,000 last year. I'm surprised it's not higher than that. Here's a quote from Brianna Severson, the CMO of a wedding planning platform, Zola, which can pay brides up to$150 ,000 for collaborations.

26:31Michael Batnick:Okay. It's the most effective way of marketing. When a couple announces their engagement, it's like they've set up a giant billboard. The bigger a bride's following, the more lucrative their wedding can be. I get it. I understand. But this is about everything that's wrong with the world today in terms of social media, capitalism steroids at all costs. If you're turning your wedding into an advertisement, I think we've lost the plot. Okay.

27:04Ben Carlson:I honestly, I'm not trying to be contrarian here. I don't mind this. Really? You get someone to give you a wedding dress because they want to show off the brand and you,

27:14Michael Batnick:um, what if your, what if your invitation is sponsored by, uh, I don't know, brand XYZ.

27:22Ben Carlson:If someone wants to pay for your wedding, I don't hate this at all. I really don't. We're commercializing. Weddings are already commercialized. Come on, how? What do you mean, how? It's like this, it's a crazy thing. People spend thousands of dollars on a dress that they wear one day of their life. Did not expect that one from you. Okay. Because weddings are so expensive. Like if people can get sponsors for them, like if my wife said like, listen.

27:49Michael Batnick:Sure, sure, fine. I'm sympathetic to that. I get it. weddings are expensive. You can lower the burn a little bit, but we're doing this now.

27:56Ben Carlson:All right. I just, I don't care. It would be kind of funny if the best man got up and be like, hey, my speech is brought to you by Miller Lite tonight.

28:03Michael Batnick:Yeah. It's kind of funny. I don't know. All right. I want to talk about narratives, Ben. Okay. So very often, especially for talking heads, market commentators are grasping at straws, right? Especially on a day-to-day basis. Oh, the Dow is up 30 basis points as X, Y, or Z. LOL, right? We laugh at this. It sounds totally ridiculous. And so I think that there are, it's like two sides of the barbell. On the one end are people that ascribe a move to everything as people on TV have to do. And on the other end are people like you who say, nobody has any idea why the market did what it did. And anyone who's trying to ascribe meaning to this is full of baloney, right?

28:51Ben Carlson:I wouldn't go that far.

28:54Michael Batnick:Okay. So, but oftentimes. Yeah.

28:59Ben Carlson:So oftentimes the narrative is fitted to the price after it happens.

29:03Michael Batnick:I think I'm somewhere in the middle. Now I'm more closer to you. Like I think a lot of, A lot of this is just, let's say 90 % of it is noise. But oftentimes things happen and it's very obvious why it happened. So why do I bring this up? Bitcoin gained 20 % last week. Seemingly out of nowhere. Crypto went nuts, yeah. Why did it do that? It is obviously responding to the dollar deficit interest rate stuff.

29:36Ben Carlson:Yeah, it was after Scott Besson made all those comments.

29:39Michael Batnick:Of course it is. Right. You saw, you have this chart from Todd Sohn. You saw a spot crypto ETF flows go wild after having been totally apathetic for months and months and months. So you might say to yourself, well, how come Bitcoin didn't care about the 30 year at 5%, but at 5.2 % it does? Or how come it didn't care about government debt at 39 trillion, but$40 trillion is the magic number? And how come the last time Bitcoin, it doesn't matter. So sometimes the stories that the market believes are the only thing that matters. And it's not to say that just because asset class X is responding to Y today, that this means that going forward, it's going to work.

30:28Michael Batnick:And I think this is the problem where this is what trips people up always is they're looking at current relationships and current market moves and extrapolating this to the next time something like this happens. But you had gold up 5 % last week. You had silver up 7%. Clearly right now, the anti-dollar debasement trade is a thing.

30:49Ben Carlson:And it's also, this is also the John Maynard Keynes beauty contest. You're not voting on who you think the prettiest is. You're voting on who you think everyone else will think the prettiest is. And so what people did, I'm sure a lot of smart traders go, I don't believe that this is a dollar debasement thing. I don't believe this is a debt crisis, but I know a lot of people will believe it. So I'm jumping on this trade too, because I know people, this will be a narrative. So the narrative feeds on itself. Yes.

31:13Michael Batnick:And of course, narratives are often wrong or ephemeral or go the other direction. And then people like us say, ha, see? So for example, Michael Antonelli tweeted, I want you to take a look at Visa and MasterCard. And remember that at one point, it was thought crypto was going to disrupt them. Then it was thought that AI would disrupt them. There are absolutely times in the stock market where the collective wisdom makes zero sense. Duh, of course, yes. So I understand why people laugh at efficient market theory and say that prices are always right. But as we spoke about last week, the point is not that prices are right at all times always.

31:56Michael Batnick:It's just that in real time, it is incredibly difficult, dare I say impossible, to consistently say that prices are always right or always wrong.

32:08Ben Carlson:You don't know when people are going to over or underreact. That's the thing. You don't know when investors are going to overreact. This is the thing with crypto that we talked a couple weeks ago. The sentiment is dead. This feels like a dead asset class. And it took this to get it to, like, it's, you don't know when people are going to have that collective, all right, let's do it. Right. Now is the time to do this. It's funny. Yeah, you're right. Visa and MasterCard both were, so they're both breaking out to all-time highs. All-time highs. So what was the Citrini piece? Remember, they both fell 10%, 50 % on that.

32:39Ben Carlson:Like that was a great buying opportunity for credit cards.

32:41Michael Batnick:Yeah. And American Express got clobbered too. I think our concerns that white collar America was in deep, deep trouble. So yeah, there are definitely times where there are severe market dislocations and very astute people can take advantage of that.

32:56Ben Carlson:I still can't believe that that, think about it, that piece caused a big market disruption for like a week.

33:04Michael Batnick:It was also like on the tail end of software getting smoked.

33:10Ben Carlson:And remember the person who wrote it went on odd lots and said like, I can't believe that this has taken, I can't believe this has gotten as big as it has. That that like, there's been a million thought pieces written on AI. Why did the market decide collectively we're going to zero in on this one. And this is going to have ramifications for certain stocks and sectors.

33:27Michael Batnick:Yeah. I think because the market was already destroying a lot of the software names and the narrative was already forming. And he just did an incredible job fictionalizing the narrative. Yes. And the market just took it and ran with it.

33:42Ben Carlson:Yes. All right. We've been talking a lot about earnings and our every week now we have a chart from duality research. Great charts, by the way, talking about like earnings growth can't possibly keep going as high as it has, right? Like the next derivative, you can't keep having 30 % growth on top of 30 % growth. Like the numbers get too big. So duality research looked at, okay, what's the forward path projection look like in terms of the year over year earnings growth? And it's obviously coming down through. So this goes through like 2027, I think, end of 2027.

34:15Michael Batnick:What do you think the market does in this scenario, which is fully reasonable? The earnings can continue to go higher, but the growth rate, it's not sustainable.

34:26Ben Carlson:Yeah, still double digits.

34:27Michael Batnick:So in this, but here's the thing, like you would say, oh, well, the market has to fall. I don't know. I think this is consensus, not in a bad way. I think everybody understands -

34:36Ben Carlson:This is baked in, right?

34:37Michael Batnick:Yeah, that's why the multiple has come down.

34:41Ben Carlson:Yeah, I think so too. I think this is, to me, this is kind of baked into the pie already. Yeah. And so the deviation from this is what matters more. We're getting into very third order effects here on today's show. Right? We're going deep. It's not first order, second order. All right. So I think one of the fun things that people love to do about market cycles like this is predict how it will end. Right? And because we have recency bias, we look at the great financial crisis and the dot-com bubble. And we say, okay, it's got to be one of those. When this thing ends, this boom ends, it's one of those two options.

35:15Ben Carlson:I want to throw my head in the ring on how like I think I'm trying to visualize how this thing will end when it ends because when it will end the go-go years by John Brooks fantastic great book this is one of the bear markets that you look back historically and no one ever talks about it was the end of the um nifty 50 it was before the 1970s it was before the 73 74 crash which was bigger. So no one really gives it its place. And this book does. It gives the up and the down. It's great. Michael Lewis writes a forward for it. I remember reading this the first time and thinking like, wow, I never thought of it that way.

35:50Ben Carlson:And they talk about in the book that at the time, so this is 1968 to 1970, it was a 36 % bear market, which is - It's a lot. It's a decent, but that's average for a recession. A recession - But also, that was like, it was called the

36:04Michael Batnick:go-go years. And there was a lot of high-flying names that got smoked 80%.

36:08Ben Carlson:So let me, this is why I think this would be a very good analogy for what could happen to this stock market. So they say, listen, the great depression, the stock market dropped like 90%. How could you possibly compare that to a 36 % drop? So they said that there was a financial consultant who looked at the biggest stocks of the day, all like the 30 biggest glamour stocks that people were buying. IBM and Polaroid and Xerox and all these companies that everyone piled into. These were like part of the nifty 50. And the average decline of these stocks was like 80%. And the average decline of all 30 stocks in this handmade, I mean, this is not like your DGEN DAO that you and Josh came up with and Sean, but they said they fell 80%.

36:53Ben Carlson:And so they were saying, and more people had money in the stock market then and more people had money in these names than they had in the Dow back in the day. And so this guy was trying to make the case that this 1968 to 1970 crash, the end of the go-go years, was actually worse than the Great Depression because more households were investing in stocks. And I do think that this, to me, seems like a good way to think about this playing out, where you have kind of a run of the middle bear market, but there's plenty of stocks that fall 60%, 70%, 80%. Doesn't that seem like more plausible than a dot-com bubble blow up where the stock market falls 75, 80%.

37:28Oh yeah.

37:29Michael Batnick:Can I say something? We just saw that in 2021. Right. Do you know that in 2022, the Qs fell 35 %? And what happened?

37:41Ben Carlson:Facebook was on 70. NVIDIA was on 66. Yeah. The whole ARC complex, DocuSign, Teladoc, Peloton,

37:50Michael Batnick:those names fell 80 plus percent. But 2022 looked exactly like the go-go years, both at the stock and the index level. Yeah. And could this next whenever be similar? Yeah, listen, I think a financial – what do I know? Nobody could nail this. I don't think this ends with a financial crisis. now i am very interested in the mark walter guggenheim story and the web of chicanery and shenanigans that's happening with the insurance entities so i'll put this in here for later i

38:32Ben Carlson:about two months ago i started listening to the steve eisman podcast which i didn't even know you had one and i came across it for some reason and i looked it's really good and he had a guy on there talking about the life insurance industry and how this is a crisis that's brewing because all these private equity companies now own the life insurers and they're taking this money from life insurance and putting it in riskier assets. And I listened to the time and I thought, that seems like something for like way out in the future, maybe, but I'm trying to think of like, what are the ramifications for now?

39:00Ben Carlson:And I couldn't come up with any. And then you start reading more about this Guggenheim situation and you go, oh my gosh, that this private equity and private credit are the perfect vehicles to do this in. because it's a lot of self-reporting and it does seem like there could be way, way more under the hood than just this guy doing this.

39:19Michael Batnick:You know what the public would love? If the government bails out private equity owned insurance companies. So that'd be fun. That would go over well.

39:27Ben Carlson:Yes. But it, so anyway, if you can go back and find that Steve, I think it was from June, that podcast about how the private equity industry has taken over life insurers. that's something to make yours perk up a little bit.

39:40Michael Batnick:All right. And not surprising news. I mean, I think this is well understood at this point. Morningstar had a report. These innovative ETFs have been disastrous for investors. The average leveraged and inverse single stock ETF has proved costly as regulators see comment on new table games possibly coming to the ETF casino. I mean, duh, no shit. Do you know on Robinhood now, you can gamble on what Bitcoin will do over the next 15 minutes.

40:10Michael Batnick:Remember zero date, zero DTE, options that expire the same day? That was quaint. There was an article in ETF.

40:18Ben Carlson:Wait, wait, this, the Morningstar, I'm not surprised that these, that people are having a hard time in them and they're not working for people. Like the losses have been huge, but the losses in the ETFs themselves are still pretty big, considering we're in a bull market. Now, some of these are inverse, but it said the median single stock ETF has lost 38%. and the companies have earned over$500 million in management fees because the management fees are higher on these.

40:41Michael Batnick:That part doesn't bother me. I don't begrudge the companies. No, I don't.

40:44Ben Carlson:Yeah, you're right. I don't either.

40:45Michael Batnick:Like that was cute back in the day. It's 2026.

40:49Ben Carlson:Yeah, if you're taking part in these and they're charging you 75 basis points on these because they're using a leverage and they're resetting these every day like that. That's supply and demand.

40:57Michael Batnick:They're supplying your product. Yeah, that's on you. Yeah. There was an article on ETF.com about an ETF called the Opportunistic Trader ETF. The ticker is WZRD.

41:10Ben Carlson:I had to check this story to make sure this was real. I couldn't believe it when I read it.

41:14Michael Batnick:Because a market wizard, and for those unfamiliar, Jack Schwager has written many market wizard books. And the first one, and these are legendary trading books, just fantastic stories about guys that had phenomenal success in the market. And one of them came out with an ETF. I forget his name. Doesn't matter. But it's down 96 % in 2026 alone, the steepest decline of any US-listed fund this year. And I'm reading the overview of the Opportunistic Trader ETF on the website. And it says, fund invests significantly in a combination of put and call options. while keeping most of the fund's assets in cash or cash equivalents.

42:09And I read that and I was just totally baffled.

42:15Michael Batnick:I don't know what that means.

42:18Ben Carlson:I was looking in my bookshelf for Michael Moveson's The Success Equation. And do you remember his whole definition of how do you tell success, like how do you tell someone who's really good at something or really bad? And he said, you can lose on purpose. Lose on purpose. And he was saying like losing on purpose in the market is really, really hard to do. So the fact that this person lost 96 % in an ETF in a single year when we're in a bull market is honestly impressive.

42:45Michael Batnick:You know when Bergade says to Baxter, you ate a whole wheel of cheese? I'm not even mad. That's amazing. Like how do you do that? And I love Moperson's framing about games of skill and games of chance. Yeah. And in a game of chance, it's very hard to lose on purpose. Could you lose to the stock market on purpose? I don't think so. I don't think I could. I don't think I can confidently say that I could underperform the market if I was trying to. Think about it if you took the inverse of this fund, how well you would have done. But if you look at the top 10 intraday holdings, it's just, I mean, I don't even know what's happening here.

43:21Michael Batnick:Anyway, wild stuff.

43:23Ben Carlson:I got an email every once in a while from media people. Hey, Ben, would you like to comment on this story? Most of the time, the story is not something I want to comment on because it's, I don't know, you know. talk about the war in Iran or whatever, but I got a, I got a request from a reporter in the fashion magazine section of the New York post.

43:39Michael Batnick:Your GQ subscription is finally paying off,

43:41Ben Carlson:right? It is. And she asked me, um, you know, we have this theory that we're working on the post. We're doing a story that finance people are having a moment and finance people are now not hated anymore. They're not the villains, but people like people look at them and they wanted, they want to date them. They want to marry them. Like our, our finance people having a moment, Like, why are finance people more popular than ever now? Is that true? And I thought that was interesting. And I thought about it and I said, okay, I've got some theories for you. Let me throw them out there. Okay. And I told her, listen, after the 2008 financial crisis, finance people were the villains.

44:14Ben Carlson:Definitely. And for good reason. Now, tech people are the villains, right? They're not the lovable nerds anymore with the hoodie. They're the people that ruined our youth through social media. And they're going to destroy all the jobs with AI. So tech people are by far the bigger villains than finance people now. And now money is so important to people that they look at finance bros as like, oh, that person actually has their stuff together. They can buy a house. Oh, I disagree. No?

44:43Michael Batnick:No. I think the story was written as a response to Josh Kushner buying the Lakers. I don't think finance bros are having a moment.

44:50Ben Carlson:Okay. Do you? Really? I thought it was a, I thought it was a, I thought it was kind of a, it was, it was looking at it through the lens of, hey, these people still kind of dress nice. They're more, I told about my idea about having a FICO score for a dating site. They like that. I'm just saying, I kind of liked it. I kind of like the theory that finance people are not the villains anymore.

45:12Michael Batnick:I do like that part.

45:14Ben Carlson:It makes sense to me. Okay.

45:17Michael Batnick:All right. There was OpenAI's recent numbers leaked. And Anthropic, as we know, now is eating their lunch. But yeah, opening as growth rate seems to have slowed for now.

45:34Ben Carlson:No, I do find myself feeling like an idiot when a new version of one of these comes out and they talk about how awesome it is. And I know I'm not using the highest tiered version, but I really can't tell that much of a difference. But I do find myself using Chad GPT more and more. For a while there, I was going more toward Gemini for stuff. And then I'd go to Claude for other stuff. Claude is still my favorite anthropic for all my finance research related stuff. Anything work related.

45:58Michael Batnick:I'm 100 % Claude at this point.

46:00Ben Carlson:I find for other, any sort of other stuff, I'm using chat GPT just as much. And I, I'm going back and forth. What are you using chat for? So for instance, my wife wants to do some new design landscaping stuff for the back of our house. It's better for that. Uploads a picture. It's really good at that. Yeah, you're right. And so, but so Ben Thompson was talking on his podcast a couple weeks ago about how Microsoft wants to be the middleman layer where they want to be the one where you put a query in and they go find the right LLM for your query. And that to me, I think that would be a good service because I think there's sometimes you don't know which one should I use because it's more of a feel thing to me.

46:40Ben Carlson:It feels like I should use this one for this and this one for that.

46:44Michael Batnick:Yeah.

46:44Ben Carlson:I think it'd be nice to, you know how sometimes it'll say, do you want response one or response to. Which one do you prefer?

46:51Michael Batnick:I think that's chat only. I don't think... It's possible. Okay. Timothy B. Lee tweeted, people say nobody has a positive vision for an AI future. The problem is that the optimistic version is a little banal. The world looks largely the same as it does now, except that people are richer, we live longer, and we get to skip hassles like driving or doing our taxes. Pretty good. He's basically saying, yeah, things are pretty good. pessimistic visions are more interesting because they envision dramatic stuff happening like everyone losing their job or dying but the world is the way it is now because people mostly like it this way most of the big changes you can imagine would be bad for most people pretty profound

47:29Ben Carlson:yeah torson slott put a chart this week saying there's no change in the unemployment rate in philippines or india where they have the biggest call center like you'd think this would be an easy thing to automate immediately with ai call centers and there's no change in the unemployment rate.

47:44Michael Batnick:Are call centers like government debt? Where they're just impossible? Now, I can't believe that.

47:57Ben Carlson:Well, what if it is that Tim Lee said, the world is the way it is because people like it this way. What if people just would rather talk to a human being, even if that human being is kind of unhelpful sometimes?

48:09Michael Batnick:No, no, no, no, no. Call centers are great. what's terrible are the automated things that don't work. Fix that. I love talking to somebody. I booked a vacation. I needed to change the date. I spoke to somebody. They took care of it right away. It was great.

48:27Ben Carlson:The automated feature makes it feel like you're being ignored and you get done with it and you go, did anything just happen there or not? I agree. All right, here's a good one for AI that I was talking about before. And I guess this is a Stanley Druckenmiller thing. So there was this, this was in the economists who took this research and they showed test scores for people and they showed your homework score with AI and without AI, right? Before AI, after AI. And then they showed the time to complete your homework, right? And people who started using AI, of course, they finished their homework way faster.

48:59Ben Carlson:But their exam scores were way worse. This is why, so this is a great, great chart. Before using AI and while using AI. You completed your homework faster, but your exam scores were way worse. So if you use the shortcuts, and this is why I think in the future, people who still read and who still write on their own are going to be at a huge advantage.

49:22Michael Batnick:Yeah, I agree. All right, on to real estate. Warren Pies tweeted, housing starts. July single-family housing starts broke below 70K. This is the second lowest monthly print in the post-pandemic era. Only November 2022 has been weaker. This continues to be like the national emergency. The line of demarcation of people that got in before and people that are f***ed is...

49:50Ben Carlson:That's the one thing I heard over and over from the response to my young people rant is it's the housing market, stupid.

49:55Michael Batnick:Yeah, that's it. I mean, that really is it. I don't know what the solution is here. But that's why... Saying we feel bad is not the answer. I don't know what to do. So that's why

50:05Ben Carlson:buying treasury bonds, like if you want to actually have an impact on people's lives. Don't buy long-term treasury bonds. That impacts no one. Buy back mortgage bonds. Give a one-time 4 % mortgage to first-time home, whatever the, like, if you really wanted to help with bringing down the cost of stuff, that would be the way to do it.

50:24Michael Batnick:I know people are not into any more government subsidies these days. Not a popular idea I'm about to throw out here. But is there nothing we can do for the first-time homebuyer that is completely f***ed and on the sidelines?

50:36Ben Carlson:I've thrown out this idea before. First-time homebuyer, anyone, 3 % mortgage rate, housing activity would pick up really quick. And guess what? People's, people would response to that would be, yeah, well, guess what, dummy housing prices rise. You still get so much of a better deal. Even if housing prices rose 5 % or something.

50:54Michael Batnick:It's the monthly payment at this point. I mean, listen, the price, the prices for homes that that's what it is. There was a New York fed survey of consumer expectations for the average probability of buying a new home. And not surprisingly, this is at the lowest level. I mean, obviously by far, by far over the last decade. It was 68 % at the peak during the housing mania. Now it's down to 53%.

51:18Ben Carlson:And the lock-in, I know some, our friend Logan Motoshami always says the lock-in effect is not real. People still move. There's a ton of people who the lock-in effect is totally real. Oh yeah. And could not afford a similar house or a better house on the current mortgage rates. That's absolutely a thing. okay speaking of uh expensive stuff car prices uh michelle singletary at the wall at the washington post wrote a story about buying car for her teenage daughter and this is really interesting so she wanted to look at what what how much what in terms of how far your money went in terms of mileage and age of a car pre-2020 versus now so in 20 in 2019 a budget of 10 to 15 000 bought a 4.7-year-old vehicle with 58 ,000 miles on it.

52:04Ben Carlson:That seems reasonable to me. Today, the exact same dollar amount gets you a car that's almost nine years old with almost 100 ,000 miles on it. That's brutal, right? That's a doubling. And obviously, if you buy a car that's way older with that many more miles on it, it doesn't have the same technology. You're going to be in the shop quite a bit, probably.

52:23Michael Batnick:So this is the part of the economy where young people have my full sympathy. It's tough.

52:30Ben Carlson:So the average price of a three-year-old vehicle is over $32 ,000. Come on. 15.5 % increase from 2021. It's uh That's tough. My goodness. Yeah. Okay. Speaking of prices, one more thing. I don't know if this has happened to your kids yet. My wife handles a lot of the dental visits and orthodontist visits for our kids. Are braces a racket these days? No. Literally every kid gets braces. When I was growing up, you'd have one kid in your class who got braces and had to wear headgear and you'd make fun of them all day and call them train track face or whatever. Every kid has braces now. And it starts out, they get them at like six years old.

53:14Ben Carlson:Like, hey, we're going to put an expander in and then we're going to top braces on. My daughter, I didn't realize, my daughter had braces for like a whole year and finally got them off and had to wear a retainer. and now she went back and they had to do braces again.

53:26Michael Batnick:Okay, are braces a racket? Have you been to Europe? Our parents - Have you been to Europe? I get it. Listen. I'm for clean, healthy, beautiful smiles. Call me a contrarian.

53:38Ben Carlson:I just think that they're getting parents early when you can't tell where your kid's teeth have developed and they're getting everyone. I think that the sales on these things have to be through the roof. I think there's people who are getting through - Sign of progress. All right.

53:53Michael Batnick:Sign of progress. Ben, everyone has braces.

53:56Ben Carlson:I think it's a racket.

53:57Michael Batnick:Masters of the Universe. This is very interesting. This movie, capital B, bombed at the box office. It was the most popular film or show in all of streaming during its first week on Prime Video. Yeah, Logan has watched this movie four times.

54:19Ben Carlson:This is why the worst thing to happen to Hollywood was the fact that DVD sales went away. It used to be that a movie could do nothing at the box office, but have a life of its own on DVD and make a ton of money. You know what I found?

54:32Michael Batnick:As I was cleaning out my garage in preparation for my mudroom 2.0, I found my DVD. I had a gigantic CD case. The biggest one possible. You know, the giant one, it's like, it's heavy. Oh yeah. So my DVD collection was my pride and joy back in the day. It was all I had. When I was kicked out of college at a home by myself, That's all I had been.

54:53Ben Carlson:Wait, did you have the DVD stand in the corner that went straight up?

54:57Michael Batnick:Hundreds. Every Friday, I would go to Blockbuster. You can get two for 20. Screaming deal. Very proud of my DVD collection. Not throwing it away. I have no use for it. I don't have a DVD player. Do you? Right. But back in the day. I probably saw a handful too. All right. This is awesome. Cliffhanger is back. Let's go.

55:25Michael Batnick:the reboot starring Lily James and Pierce Brosnan finally has a release date. I had no idea that this was even a thing. Originally set for August, 2026, the$100 million survival thriller was shot. All right, Neon picked it up.

55:39Ben Carlson:Isn't Pierce Brosnan a little old for this?

55:40Michael Batnick:Or is he the bad guy?

55:42Ben Carlson:Oh, he's got to be John Lithgow.

55:43Michael Batnick:Oh, John Lithgow. I mean, John Voy. Yeah, John Lithgow.

55:46Ben Carlson:I obviously showed my son this movie. We went through a Sly Stallone run about a year ago. and we watched Cliffhanger and Daylight and still plays. Love Daylight.

55:55Michael Batnick:Saw that one in theater. Did he see Over the Top?

56:00Ben Carlson:Oh, we didn't watch Over the Top yet. That's a good call. Arm wrestling.

56:04Michael Batnick:So, Ben, somebody emailed us. Oh, yeah, somebody emailed us. So, speaking of the 90s nostalgia, one of our listeners' dads was the founder of East Bay. Yeah. The sneaker book catalog. Now, like all 90s kids, I guess I was on the younger side. I had no money for this. So I was a very enthusiastic peruser.

56:28Ben Carlson:Hey, you just look. Right?

56:30Michael Batnick:Like who had money for sneakers? I guess if you were like a teenager and you had a job or whatever. But I was eight years old back in the day. Anyway, there's a book about that, which I plan to listen to. And in the same vein, Columbia House is shutting down. How is this still a thing? I can't wait. In the year of 2026. For those of you who don't know what the hell Columbia House was, it's basically East Bay, but for music. It was a magazine, which is a thing. It's a magazine. It's papers that were printed and you would get them delivered to your doorstep probably on a monthly basis. And it was all of the new albums that you could buy.

57:10Ben Carlson:But you'd get the first, when you signed up, you'd get like 10 albums for a really low price. Teaser. And then each month they would send you something that you had to sign back. You either took the album of the month or you'd buy something and you had to hit a minimum of spending, I think.

57:26Michael Batnick:It was like Stitch Fix for music.

57:28Ben Carlson:Yes. But if you didn't send this form back every month, they would just charge you and send you back the CD. So I would always forget to send it back and then they'd send me a CD I didn't want.

57:37Michael Batnick:I think, correct me if my memory is wrong here. was it like a sheet of like stamps kind of and this the cover albums were like on stamps i don't know that's sort of ringing a bell anyway uh this got me thinking my first my first album i'm pretty sure was a radio was a tape cassette like 90 positive it was a tape cassette of throwing copper and i googled it like throwing copper cassette like is that even a thing like, or, or was it a CD? It was a cassette. And, uh, you can buy it on eBay for a hundred bucks. I'm not going to, but still around.

58:14Ben Carlson:I owned it. You, so you put this on here. So I had to think back to mine. And my first was a cassette tape too. And I'm almost positive. My very first cassette tape was MC Hammer. That tracks. Please hammer, don't hurt him.

58:29Michael Batnick:That was huge. MC Hammer was, how do you even describe what MC Hammer was?

58:33Ben Carlson:Remember the big pants? Everyone tried to wear the pants like him, and it just didn't work. But yeah, I think that was my very first one. Is he still alive? Like Bobby Brown or Vanilla Ice. I think he's probably been on some reality shows over the years. All right, story time. Unless you got something else here.

58:48Michael Batnick:Go ahead.

58:51Ben Carlson:I fell hard this past week. Like, you know, like your kids, like my son George, all the time, he's got cuts on his elbows, and his knees are always cut up, and he's got, you know, because he's always falling. And I'm like, where did you get that cut? I don't know. Did you kick a sidewalk? I was, uh, I was going for a jog and I had a new pair of shoes on. So they were pretty, you know, they had a lot of traction and it was one of those uneven sidewalks. And I went down the, it was so fast and I'm running, I'm just jogging. And I went down immediately and I caught myself with my hands. And I think if this would have happened 20 years from now, I probably would have broken something.

59:26Ben Carlson:And I, you know, you, that road rash you get on your hands, you can still see it kind of. And you're, my wrist has been sore all week. How long were you down for? To my credit, I mean, this was a pretty good, like Navy SEAL type of move. I went down, caught myself in my hands, did a shoulder roll and was up on the grass and pushed myself up and try and just, I let out a huge F bomb and I saw all these cars going by, probably seeing me laughing, but, um, I think I, I saved it pretty good. I did a shoulder roll to kind of get out of there and not.

59:54Michael Batnick:So I haven't fallen a long time. There's like that immediate like sense of panic that you feel.

1:00:00Ben Carlson:Yes. After I'm like looking at myself to make sure I'm like, did I break something else? I'm okay. All right. All right. Recommendations. Devil Wears Prada 2 is on Hulu. I tried it. My wife and daughter went to see it in the theater. Pure nostalgia kick, right? It's all, it's Meryl Streep and Anne Hathaway and Emily Blunt and Stanley Tucci. And I'm sure a lot of people like this movie. To me, it was, I enjoyed, I really enjoyed the first one. It was just too much of a nostalgia. Like, it was just all nostalgia. And it was, like, too much. I think the movie probably did pretty well. It did very well.

1:00:35Ben Carlson:Yeah. Okay. To me, it's like, eh, probably didn't need this to happen. Speaking of action movies, I was gone on a trip a week or two ago, and my kids, my son is always looking for new action movies. You're even starting to give me, like, George has got to watch this movie, right? You're giving him some. So I walked in, and they were watching Speed on Netflix. and I'm like I've seen it a million I think I just rewatched it like a year ago and I'm like I don't need to watch this and I got pulled the last hour or so I'm like all right you know and I just sat down and I watched the last hour and my god what and I saw that they just did it on the rewatchables too so of course my kids watched speed 2 which at the time since Keanu didn't do it I didn't watch it I had a one remember back in the day there was no way to get movie like you maybe there's one movie review with Siskel and Ebert but like it was all word of mouth and I had one friend who went to see it and goes, it sucked.

1:01:21Ben Carlson:Don't go see it. So I didn't, I didn't see it for like 10 years.

1:01:23Michael Batnick:Famously sucked. I think it got like a 10 on Rotten Tomatoes.

1:01:27Ben Carlson:I didn't see it either for the record. I watched it eventually. And I totally forgot about it. Cause it just, you know, Keanu Reeves wasn't in it. It's like, it felt like an abomination. Willem Dafoe was the bad guy and he could effectively, he had his own AI system that he could control a cruise ship with like a remote control. Like, and maybe instead of doing like, he'd be like a billionaire now if he had this technology to totally control a cruise ship and do all these things with computers. Anyway, terrible, terrible movie. Can't believe Sandy Bullock even did it.

1:01:56Michael Batnick:So I also rewatched Speed because it was on the Rewatchables, my favorite podcast. And it's funny, Ben. I put it on, Kobe got into bed with me, and we watched the entire thing. And I haven't seen Speed in a long time. Speed was a phenomenon. Oh, yeah.

1:02:14Ben Carlson:Pop Quiz Hotshot was everywhere. Everyone would say that.

1:02:17Michael Batnick:It was such a big movie when it came out. I forgot about the elevator scene in the beginning, which is like the first 25 minutes of the movie. Awesome. Amazing. So Kobe watched the entire thing with me. It's the first grown-up movie he's ever watched. He's very proud. We had a great time. Keanu was very interesting because as amazing as he was in the movie, and he was amazing, his dialogue the actual the acting the speaking was comically bad but the physical stuff that he did was so good yeah we i feel like we kind of give him a pass sometimes and it's rightfully so so i wanted to i want to play this clip for you just to show the youngins how good we had it back in the 90s.

1:03:09Michael Batnick:This is from, this is Sean Fennessey on the Rewatchables. Talking about the action movies back in the day.

1:03:20Ben Carlson:In the late 80s, early 90s, something happens and it's kind of like this hangover effect from movies like Top Gun, Beverly Hills Cop,

1:03:27Michael Batnick:like Hollywood figures out

1:03:29Ben Carlson:a pacing and editing energy.

1:03:30Michael Batnick:Yeah. And then everything that comes in the wake of it is basically incredible for 10 years. Tier 2, Broken Arrow, Con Air Independence Day The Long Kiss Goodnight Cliffhanger True Lies Last Action Hero Last Boy Scout

1:03:43Ben Carlson:Demolition Man Fifth Element Hard Target Executive Decision I'm sure I've forgotten some here and there but that's mostly what I'm thinking Tier 1 Die Hard Crimson Tide Hunt for Red October T2 Point Break The Matrix Blade Face Off First Mission Impossible Lethal Weapon Fugitive Heat Under Siege and I think at the top of the heap is Speed

1:04:05Michael Batnick:Are you fucking kidding me?

1:04:08Ben Carlson:It's the best movie decade of all time.

1:04:11Michael Batnick:Holy shit. So I got an email that made me laugh. Somebody, subject line emergency, exclamation mark. Michael and Ben, if you haven't seen Hard Target or Nowhere to Run, you haven't even fully Van Dammed yet. Please step up. So I'm slowly making my way through the Van Damme catalog.

1:04:29Ben Carlson:Doesn't he have a mullet in one of those? I know I've seen him.

1:04:32Michael Batnick:Hard Target. Okay. So Hard Target was John Woo's, because now I'm being served up nothing but JCVD on Instagram. John Woo's first American-made movie. So it was a lot of slow motion. Ramp sent me a video of, he was watching it of some of this stuff in Hard Target. It's pure comedy. So I have to rewatch that. But I watched Lionheart. Do you remember that one? Oh, yeah.

1:04:55Ben Carlson:I like that one where he fights in the parking lots and stuff.

1:04:58Michael Batnick:Yeah. Horrendous. I mean, put it in the garbage can. None of it made sense. I probably haven't watched it since I was 12. Yeah, it was epic. So I rewatched the Nowhere to Run trailer. Because I'm like, wait a minute. I feel like I've seen this one. So I watched the trailer. And it took me all the way back, Ben. All the way back. There was a guy, I forget his first name. Last name was LaFontaine, who was the voice of God in the trailers. And in Nowhere to Run, I think he's an escaped convict. and he somehow gets hooked up with Rosanna Arquette and her kids. And he's saving them from like corrupt cops and in a small town.

1:05:35Michael Batnick:And the trailer is so hilarious. There's one part of the trailer where Rosanna Arquette is there in bed about to consummate the relationship and she's kissing his hairy chest in the trailer. Just hilarious stuff. So I was thinking about this last night as I took my boys to see Spider-Man, which by the way, have you seen it yet?

1:05:58Ben Carlson:No, my kids went to see it. They liked it. Okay. They really liked it.

1:06:02Michael Batnick:I hate, I didn't like, didn't care for the first half. It was so, so, so long. Really? It never ended. It never freaking ended. But there was one scene, I know you don't care, but I'm talking to the audience. There's one scene with Spider-Man, the Punisher and the Hulk that is quite good. So the whole movie was a setup for Avengers Doomsday. And here's, let me bring this back to the trailer. So the trailer for Avengers Doomsday had me pretty worried. Looked terrible. Then there was a trailer for The Social Reckoning. Also looked terrible. So my question to you, Ben, is do trailers matter anymore at all?

1:06:46Michael Batnick:Do they tell you anything? Do they foreshadow any sort of accuracy one way or the other about the movie? Because I feel like back in the day, that's all we had. and the trailers were everything. That's true,

1:06:58Ben Carlson:because Disclosure Day trailer was really, really good and the movie was not good. I don't know. I love trailers though, so I can't. It's hard to say. All right. All right. Noncommittal answer. Okay, lastly. By the way, back to Van Damme. The fact that he was in so many movies is kind of amazing. Remember the last one was like Time Cop where he's traveling back and forth. I love Time Cop.

1:07:22Michael Batnick:I haven't seen him in 30 years. Probably a time. The fact that he did, he probably did eight Hollywood movies is kind of, he way outkicked

1:07:28Ben Carlson:his cover. He should have done like two movies and be like, all right, you know, we've seen this guy. He can't act.

1:07:33Michael Batnick:What a vibe. No, he can't act. All right. I binged Tires, season three.

1:07:38Ben Carlson:Okay. I didn't watch it yet.

1:07:39Michael Batnick:Freaking awesome.

1:07:40Ben Carlson:Funny? Just like second season? All right.

1:07:42Michael Batnick:It's just such a great hang. The episodes are 22 minutes. Really funny. Well done. You can fly through the season.

1:07:48Ben Carlson:You're right. I forgot season two was out. I'll watch it.

1:07:51Michael Batnick:It's great. All right. We did it again, Ben.

1:07:57Ben Carlson:Stock market's up again.

1:08:00Michael Batnick:Well, what's the 10-year doing? It is a bull market. The 10-year is, all right, down pretty good. Go Besant. Team Besant all the way.

1:08:09Ben Carlson:Now you're a free market guy.

1:08:12Michael Batnick:Well, I said, I just think he happened to, if he works, I don't know if this works, I don't know that he deserves credit because I think this was a natural point for yields to pull in. He waited because credit to him. I mean, he's a hedge fund guy. He waited for rates to get to the upper end of their range, which they've come in previously. And he said, now.

1:08:32Ben Carlson:I know that there are people who understand the mechanisms of the Fed and the Treasury and where all the money comes from. Not me. Where's the money coming from to buy these things?

1:08:41Michael Batnick:You know what? The mechanics of government debt and QE from the Fed or Treasury repurchases, to me, that's like the semiconductor industry. I'm just never going to get it.

1:08:51Ben Carlson:Right. It's a lot of back and forth stuff too. It works. We owe the money to ourselves.

1:08:55Michael Batnick:Yeah, you don't need to understand. All right, animalspirits at thecompoundnews.com. As always, personal emails, personal responses. Thank you for listening. We'll see you next time.

1:09:19Michael Batnick:Close your eyes. Exhale. Feel your body relax and let go of whatever you're carrying today.

1:09:26Ben Carlson:Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-CONTACTS. Oh my gosh, they're so fast. And breathe. Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste. Visit 1-800-CONTACTS.com today to save on your first order.

1:09:47Michael Batnick:1-800-CONTACTS.