Did Trump Blink? (EP. 405)

25:15Interestingly, the percentage of the market held by foreign investors has gone up a lot. It's now 18%. It's gotten a lot bigger. You can see it really widening, right? Yeah. That is interesting. I wonder if that's counted in the previous chart. So in the previous chart, we're looking at listed equities, a share of household financial assets. Are our stocks in that chart? Probably. Yeah, I would think so. But if you look at people, there's the people who worry about index funds and ETFs. Index funds and ETF share of the U.S. stock market is about the same as foreign investors. So it's not, you know, in the fund industry, it's 50 % or so, but in the overall stock market, it's one-fifth, so it's not as big as you think.

26:01Or sorry, 15%. Active mutual funds are still bigger than ETFs. Anyway, yeah, great chart. Robin Wigglesworth, The bond market is still not worried about the recession. So can we say that if that little freakout was the correction and, yay, it's over, who knows, did the bond market get it right because it didn't freak out? So if you look at the high-yield spread, it ticked up a little bit, but it's still way lower than it was in 2022, 2023, 2024. Even he shows the junkiest stuff. So triple C and lower is ticking up a little bit, but still very, very low spread. It was. So the triple C is, which again, as Ben said, is like the junkiest of the junk, the lowest credit quality, even through this like spike, it's still below where it was for basically all of 23 and most of 24.

26:54Exactly. There's not a lot of worry in the bond market. So I keep trying to figure out, is the bond market going to be the tell or is it going to be the rear view mirror where like it plays catch up very quickly when the risks are actually here for recession when that happens i defer to the bond market getting it right it's not going to always it doesn't always but okay that's possible no leading indicator is perfect but i trust i trust this more than stocks that's fair i'd agree that these were some things that i was saying like in the last two weeks that made me a little bit more optimistic than i think a lot of people.

27:30Number one, credit spreads. Number two, just where rates were. If we really were going to a recession, I don't think, how low did the 10-year get? I think the 10-year would have had a three-handle. Yeah, it's still above four. Number one, the VIX. And I know that there's all sorts of things about the term structure of the VIX. You just did Buzz from Home Alone there. What'd I say? You know where he goes, A, two, and D. All right. And finally, purple. I thought that the coins would have like really been crashing. And yes, they were down whatever 30%. But I thought – Crypto did stabilize before everything else, didn't it?

28:07I thought Bitcoin would have gone to like below 70 if there was really going to be a global meltdown. Yeah. Yeah, you're right. And the counterpoint, one of the areas of the market that is legitimately giving cause for concern are the consumer discretionary stocks. Underperforming the staples in a meaningful way over the last two weeks. That has since stabilized a little bit, but that was definitely further in the cap of the bears. And talk to us next week or two weeks. Maybe we're rolling back over and who knows. All right. Good one from Bloomberg. Private credit firms are pushing boundaries to win large deals.

28:37And we've been wondering, what are the actual risks to private credit? I think this is one of them. So they say private credit funds are grinding down margins and cranking up leverage to win business over their liquid peers. So they say because credit spreads are so tight, which we've said, and there's so much money, the deals are so much harder to get, that they're having to use more leverage and go further down the credit quality to get the same yields. And this makes sense to me as like the, people have been wondering about, well, is private credit going to blow up? And I think the thing is just, you're taking on riskier loans and you're using more leverage.

29:08That's the risk of returns being lower. Yep. Right, that makes sense to me as like a risk of your manager taking on too much risk. Instead of saying, well, the yields should be 9 % these days instead of 12 because things have changed. No, I still want 12. I'm going to push the limits to do it. Yeah, I don't know if there's going to be like a blow up, a day of reckoning, as some people are rooting for in the private markets. But I think you're spot on. It's going to be lower returns probably. All right. From Bespoke, they looked at 100 baggers over the past 25 years, which is pretty impressive because that's going back to the height of the dot-com bubble, which is not a great starting point.

29:46The returns from the dot-com bubble are not great. I think it's like 7.5 % per year. It's not awesome because we had that lost decade. And so they've said 19 stocks in the Russell 1000 have been 100 baggers in that time. Monster is the biggest one. That's a thousand bagger. NVIDIA is second. There's some surprising ones on here. Decker's Outdoors, which makes Uggs and how do you say that? Hoka shoes. Oh, they do? Yeah. And Teva. I didn't realize they all had all those. Oh, I didn't know that. I still haven't gone down the middle-aged dad route with those shoes yet. Hoka's? No, still not got there.

30:17But like Old Dominion Freight and Tractor Supply and Apple's on there. O 'Reilly Automotive. AutoZone. There's some surprising stocks out there. Fair Isaac develops credit scoring and analytics software. Right? There's some surprising names on here that you wouldn't expect. I haven't heard a lot of these companies. NVR, HomeBuilder. It's the... Yeah. It's kind of the... There's not as many tech stocks on here as you would think. It's pretty much just NVIDIA and Apple. Huh. Okay. Ben, we launched an ETF? A million people sent us this. This is from Eric Belchunas. VistaShares filed an Animal Spirits ETF and a two times Animal Spirits ETF, which will hold the five fastest growing two times single stock ETFs.

31:01Oh, wait, what is it? Yes, these things are. So again, getting back to the people who worry that index funds are going to cause problems with market structure. I think this this so this is the five fastest growing two times single stock ETFs. So this is two times Tesla, two times NVIDIA, those kind of stocks. When you say fastest growing, what does that mean? In terms of like assets or price or what exactly? I'm guessing it's a momentum strategy, but yeah, I didn't go. All right, so this is like a vol of what? $175 ,000? Yeah, so this is like momentum on top of momentum on top of momentum on top of leverage.

31:38And they have a two times one. So yeah, I don't think we're going to attach our brand to this one. And but these kind of things, like when you start doing the Russian doll of these ETFs, like this kind of thing, like to me, seems like it's a flash crash waiting to happen. Yeah. Right. I don't know how I don't have enough smarts to know, like if these kind of products could blow up. But this kind of thing to me, this is this is way scarier than all the money in index funds. You know, pretty impressive that, as far as my memory goes, the last flash crash in the market that was like market-wide, that was 2010.

32:202015-ish there was one maybe. Remember we had the ETF dislocation one? Well, in 2020 with bonds. Yeah. But you're right. I'm surprised we don't have more of them, to tell you the truth. Pretty impressive. If the algorithms pull back. Okay. I still remember that. I remember that day in 2010 when we had a flash crash, just sitting at my screen all day. Like, what is happening? It was a 6 % down day or something, I think. All right. Bank of America, biggest foreign selling of U.S. stocks since March 23rd. That's interesting. Foreign investors dumping our stocks. Oh, foreign investors dumping U.S.

32:58stocks. Interesting. Now, it's a dollar level, not a percentage. So when you correct for the dollar level and you see that they now own 16 – is that trillion? Wow. 16 – wait, how is it that high? How big is our stock market? Remember, it's 18 % of the stock market. Goldman says it is$93 trillion. Wow. That makes sense because it's 18%. Also, the selling of U.S. stocks and foreign investors makes sense. We just fact-checked ourselves there, right? There we go. All right. From zero hedge via Goldman or Goldman via zero hedge, I guess, CTAs, commodity trading advisors, are short$34 billion of US equities versus long$52 billion of European equities.

33:44That spread is the largest we have ever seen by a decent margin. Maybe that led to some of the reversal that we saw yesterday. Mike Sicardi tweeted that it was the biggest reversal in four months or the biggest outperformance of US over international in four months. I got to be honest. Positioning. Positioning. Whenever I see the CTA positioning, though, I feel like it's just telling me what just happened in the market. Yeah, but it wasn't extreme. So interesting to note. All right. Brian Moynihan, the CEO of Bank of America, was on CNBC. And he said, we're in this classic moment where the consumer is saying, I'm getting more pessimistic.

34:19But if you actually look at what they're doing day to day, they continue to spend, which means the economy ought to be holding up better than people think. This is why we are very – the sentiment stuff, we're not believing it quite yet because you've got to watch what they do and not what they say. That's what he's saying. We have more – yeah, Powell addressed that, which we have – we have that later in the doc. Yeah, we have Powell stuff later in the doc. All right, somebody asked if Trump would care that foreign investors dump stocks, which was a timely question considering that – we got this question like maybe a week, a week and a half ago.

34:51And I was like, I don't know. I don't know. Maybe he would like it. I have no idea. But there was an article by Barry Eichengreen in the FT, and he is an author, professor of economics. Let me just read this block. He said, there are questions moreover. So the article was, I'm sorry, the article was, can the dollar remain king of currencies? He says, there are questions moreover about whether foreign holders of US debt securities will continue to be treated fairly. Scott Besson, Trump's treasury secretary, has reportedly mulled the possibility of converting five - and ten-year US treasury bonds held by foreign investors into 100-year securities bearing low interest rates, whether those investors like it or not.

35:31Yeah, I don't think they would like that. Later in the article, all right, labeling - They would sell those immediately. Yeah, labeling the measure a user fee instead of a withholding tax would avoid violating international tax treaties, but it would fall foul of the expectation that domestic and foreign investors are to be treated comparably. All right, here's a coup de grace. Quote, this effort to limit foreign purchases of US treasuries as a way of depreciating the dollar, something that Trump and his advisors evidently see as desirable, could quickly get out of hand. So this is another catalyst for international stocks.

36:08Yeah, I don't know that he would view foreigners dumping stocks as a bad thing. He would say, good, they belong with Americans. I mean, I don't know. I have no idea. True. My whole question about the dollar, and I get people worried about these trade agreements and us not helping our allies. I just don't know what steps in and takes over for the dollar that quickly. The whole thing like this could get out of hand quickly. What's the alternative? That's my only question. Cardano. There isn't, yeah, there is none. So you mentioned Jerome Powell. He seemed to me pretty, I don't know. He didn't seem to be worried at all about the economy.

36:45And he was kind of saying, you people are worried, not me. Is that fair? So let's get to what he said. The market rallied pretty violently after he spoke, which has not been the case for a lot of his speeches. How did Powell put the bottom in? The spoke has a great chart showing S &P 500 intraday composite for Fed days by Fed chair. Powell, Yellen, Bernanke, Greenspan. and Powell's been bad. Not that the market has been bad during Powell's talk. It's not his fault. He was the Fed chair. They literally wanted the stock market to fall during 2022. They were trying to get it filled out. So Neil Dutta said that Powell did everything he needed to on Wednesday.

37:32The fact that stocks rallied on the FOMC decision day absolves Powell of taking any responsibility for the sell-off and makes it more challenging for Trump to find the scapegoat. this is not 2018 and Powell tanking the market with this quote long way from neutral talk. Ball is back in Trump's court. So there were some interesting quotes in the presser. Somebody asked him about the consumer sentiment, particularly the inflation expectations in the University of Michigan survey. So Powell said, Michigan, Benton State, the one you're referring to, the longer-term thing. We look at it. We don't dismiss data that we don't like.

38:14We force ourselves to look at it. But it is an outlier compared to market-based, compared to other survey-based assessments of longer-run inflation expectations. So we have to keep that in mind. Jerome Powell, anti-survey, just like Animal Spirits. Nailed it. The transcript, great resource. They pull quotes from CEOs, CFOs, Powell's of the world. This is from Darden restaurant CEO. He said, as we come out of the third quarter into the fourth quarter, and we gave you our expectation for Q4, people, even if they say they're feeling less optimistic, we haven't seen a huge correlation between that and dining out.

38:58So changes in consumer sentiment haven't necessarily translated to material changes in consumer spending. So I think as long as incomes are going up and outpacing inflation, I think they're likely to keep spending. So CEOs and the Fed chair and everyone are basically going, hey, consumer, you're full of shit. I don't believe you. Is that not the theme we're picking up here? And these are the kind of, but these are the kind of quotes that if we did go into a prolonged slowdown, people would look back and say, ah, see, they missed it, right? But their point is, we're not seeing it in the data yet.

39:30Right, and now there's so many economies in our economy. So certainly some areas are slowing down. There's no denying that. One more quote from Powell. He said, for right now, The hard data are pretty solid. We are obviously aware of the soft sentiment data and the high uncertainty, and we're watching that carefully, and we think it's a good time for us to wait for further clarity before we consider adjusting our policy stance. You know, I've been pretty hard on him. I was pretty hard on him in 2022 for going so hard and cheering against the stock market and saying we want to put people out of business or put people out of jobs.

40:04I thought they kind of mishandled that, and I think they got lucky that they got a soft landing. But I think he's done an amazing job overall in his term. Amazing. Don't you think for all the stuff that he's had to deal with? No. You don't think so at all? I think mixed. I think some good's in bed. Okay. I'm putting out there now, I think he's the last good Fed chair we're going to have for a long time. Why? I think this is going to be a politicized position in the future. And remember, Trump was the one who put him in the position. Powell's a Republican. I think this is going to be a politicized position going forward that is going to do whatever the president says.

40:41That's what people are going to look at this to. I think the independence thing is probably gone and he's going to be the last good one we have. All right. I hope you're wrong. Trump socialed. The Fed would be much better off cutting rates as U.S. tariffs start to transition their way into the economy. Do the right thing. April 2nd is Liberation Day in America. That's what I mean. If he doesn't lower rates, Trump's going to get rid of them. I firmly believe this. I think there's a very high probability of that happening. If he doesn't do what Trump wants to do, he's going to say, all right, get out of there and I'll get someone else who will.

41:14Maybe. All right, I noticed this at the gas station the other day. Gas is under$3, at least where I am. It was$2.93, and I said, hmm, pretty nice. It feels to me like gas prices haven't gone anywhere for a while. It's been right around there for a long time for me. Well, look, okay, look at this, the national average. from Y charts. It looks like a breakdown might be coming. I know you can't do technical analysis on gasoline prices. That was a joke. But we're trending in the right direction for sure. And yeah, the spike didn't last for that long from the inflation and war stuff. And egg prices are crashing.

41:50What is the story with crashing egg prices? Was this bird flu stuff? I haven't followed the story. Yes, but I don't know how it fixed itself so quickly. I talked to two friends this weekend who own chickens, who literally own their own chickens and get their own eggs. And? I think the egg thing is just one of the more rational things we humans hold on to. I think people put way too much emphasis on egg prices. That's always been my stance and I'm sticking with it. Wait, your friends... I literally know people who own chickens to have their own eggs. Can you imagine taking care of a chicken? Because I don't think that's the only reason, but that's part of it.

42:33No, they must get some personal satisfaction out of that. I'm sure. Would you get personal satisfaction from owning a chicken? I wouldn't.

42:42You know, we hatched ducks back in the day. What do you mean? My mom was a huge animal lover, but we always had like these weird pets because we were all allergic. So we had like an iguana, we had a tortoise, and one summer we hatched chicks. That was a disaster. We brought them upstate to the cabin, and they all got eaten by raccoons. It was horrifying. It's a classic. But no, I would not. How much does one spend on eggs throughout the year? That's my whole point. Even expensive eggs. As a percentage of your budget, it's so small, but we put so much emphasis on it. And why? Because it's a volatile series.

43:25If prices weren't so volatile, people wouldn't pay attention as much. Yeah, I don't know. Enough about eggs. The higher the chicks, the higher the clicks. Eh? Not bad. All right. Let's talk about real estate. This is from Matt Iglesias. I thought this was pretty good. And we've talked a lot about why don't we build more housing? And I think about, and there's been all this discussion of Derek Thompson and Ezra Klein's book, Abundance. And we're going to talk to Derek, hopefully, coming up about the book. I'm going to pitch in my own stock market abundance plan. I've been thinking about this for a while.

43:57Stay tuned. But that got me thinking, why did we build so many houses in the early 2000s? Like, what was it? Was it deregulation or was it just the fact that people were going crazy for housing because the banks weren't charging or the banks had lax credit standards? So you look at this. Matt Galatius did this chart where he showed mortgages outstanding as a percent of GDP. He did it by credit score. So above 740 and below 740. And you can see there were way more loans given out in the 99 to 2005 period. It took off like a rocket ship. And now the below 740 has crashed. Above 740 is down a little, but it's basically like we've decided people with low credit scores don't get mortgages anymore.

44:41Right? Not nearly as much as they did. It's the lowest it's been in this series going back to 1965. So. Is this good or bad? Well, here's the thing. After the crisis. Remember, there was the story of the strawberry picker who made$14 ,000 a year getting a$750 ,000 loan in California. That's from Michael Lewis' book. And people thought, like, this almost crashed the economy because we gave out way too many loans. So then we go completely the other way and say, no, now we're not going to give loans to any people who have bad credit scores. And now they can't buy a house. So what's the better environment?

45:18There obviously needs to be a middle ground, but this is the kind of thing that we do. We go way to the extremes. Let's give everyone a loan or let's give no one a loan. Right. And they're both stupid, obviously. But one leads to the other. And I just think the great financial crisis totally screwed up the housing market for years and years to come, potentially decades. This is like the story of the economy is like things become too lax. There's a bust. And then the bust determines policy probably to the detriment for the next 20 years. Yeah. We have too much regulation and that leads to too much deregulation.

45:49Right. And then we go back and forth, and there's never a good middle ground. I guess that's the point is we're never going to have that. This is interesting from Rick Palacios Jr. at John Burns. He looked at Lennar, which is a home builder, and he looked at their sales incentives on home deliveries as a percentage of revenue. And in the early 2020s, it was very, very low because they didn't have to incentivize anyone to buy a home because rates were so low. Now it's shot up from, I don't know, 1.5 % to 13%. So they're having to offer lots of incentives, meaning we're buying down your mortgage rate or we're giving you some sort of deal or break.

46:23Or it makes sense because like they have to sell their homes, right? They can't just sit on them. Like a homeowner can wait. Homebuilder cannot just sit there and wait. But my question is, if we ever wanted to get to the point where we could, like we said, all right, some politician finally takes it up as an initiative. We're going to build more homes. Would the homebuilders be able to do it? like would they would they even want to take part in that without getting some sort of guarantee from the government this is I'm out of my depth I have no idea I don't know what I do know is that these stocks are getting smoked KB Home is in a 40 % drawdown and Lenar is in a 35 % drawdown it makes sense rates staying this high for this long these stocks had to get hammered eventually right actually I was listening to on the quarter app this morning um this is how they open.

47:16This is KB Home. Consumers are continuing to cope with affordability concerns and uncertainties around macroeconomic and geopolitical events. As a result, consumer confidence has declined sequentially each month for the past several months, and homebuyers are moving slowly and making their purchase decisions. While longer-term housing market conditions remain favorable, driven by demographics and an undersupply of homes, demand at the start of the spring selling season has been more muted than we have seen over the past few years. as a result of this softer selling environment, we are lowering our revenue guidance for fiscal 2025.

47:4830-year mortgage is still 6.8%. I can't believe it's lasted this long. I can't believe it. So this is an example of, yeah, the consumers are under pressure. It's not all vibes. I mean, some places are, right? Like Daugherty's, they're still going out. They're still spending money at the restaurants. But the homebuilder economy is clearly in a recession and has been. I know 2022 is a weird year where home builders were the only game in town because there was no supply in the market. But there is an ice patch in the home builder market. There was this meme going around during the COVID crisis. It was April, and it was like something like 13 million people had lost their jobs or something.

48:27And it was a picture of Jim Cramer with that headline. And behind him, it was like stocks are rushing back to all-time highs. And everyone said, like, this is crazy. Millions of people are losing their jobs because of the pandemic, and the stock market is like a huge disconnect. During the next recession, that's going to be the housing market, and it's going to be so weird to people. There's going to be a ton of housing market activity when interest rates fall because of the next recession, and there's going to be lines out the door for housing, and people are going to go, how is this happening during a recession?

48:58Yeah, I think you're right. That is going to be a thing. Yeah, I agree. And it's going to be bizarre. Yeah, that's a good call. All right. We got some IPOs coming up in. eToro filed yesterday. StubHub. We haven't spoken about them in a while. You should short that one out of principle from day one. All right. So Axios reported StubHub reports a$2.8 million loss on$1.77 billion in revenue for 2024 compared to a$405 million profit on$1.4 billion-ish in revenue in 2023. So these companies, after a certain point, just couldn't wait any longer. The big difference was sales and marketing. So I guess they could like, you know, that's a lever that they could pull.

49:40StubHub had more than 40 million tickets sold on its platform last year by more than a million sellers. I feel like I would have guessed way more. 40 million seems like a low number. It does when you consider how many people are at these games and how much you'd assume these tickets are changing hands. Right? I kind of agree. That does seem low to me. Okay. The big one, Klarna. and there was a lot of memes last week. So Klarna is the giant buy now, pay later company. And this was all the memes. Klarna said in a press release that DoorDash customers will be able to pay in full at checkout, split payments at the four equal interest-free installments, or defer to dates that align conveniently with payday schedule.

50:17So - Wait a minute, before we get into the memes, whatever happened to these buy now, pay later things being a 0 % interest rate phenomenon? Was that the idea? Once rates are 0 % anymore, these companies are going out of business. Everyone was saying it at the time. There's no way these companies can survive higher rates. And they actually have. Oh, yes, they can. Yeah. We'll talk more about that in a second. First, the memes. All right. Person of Swag tweeted a picture of... Dave Ramsey. My God. Dave Ramsey. No, it is Dave Ramsey. It took me a second. Okay. Middle age. Okay. So a picture of Dave Ramsey at his desk with the caption, what do you mean you have 11K in DoorDash debt?

50:56Not bad. Pretty good. Somebody quote tweeted the announcement with a picture of Jeremy Irons from Margin Call and said, we are selling pad thai in installments to willing buyers at the current fair market price. That's good. Very good. Lastly, there's one with Christian Bayless, Michael Burry. Quote, they're called chimichanga default swaps. That's pretty good. Pretty good. All around. Is this more of a publicity thing than anything? Who's this for? It's nothing. It's nothing with nothing. Like who's really going to use this? All right. So Affirm, I looked at their recent call. Affirm has 21 million active customers.

51:37And their gross merchandise volume grew 35 % year over year. Pretty good. From 7.5 billion up to 10 billion. If you look at delinquency, right to your point, Ben, about this being a zero rate phenomenon, delinquencies are nowhere. it's under 3%. Really nothing to see here. Do you think people just got used to using these programs? How are they still growing? So they're huge internationally. Like buy now, pay later is not a new thing. It's just new to us or new-ish. All right, so Mark Rubenstein, who writes a substack called Net Interest, which is phenomenal. I pulled out two nuggets that he said.

52:16All right, currently 99 % of consumer loans are paid on time, okay? Although it's the 1 % you have to be careful of. Klarna mitigates risk in a number of ways. Average loan duration is 40 days. Wow. 40 days compared with 2.9 years for a typical US personal bank loan, which means the company can turn over its portfolio very quickly. Last year, it originated$56 billion worth of loans, of which only$8.5 billion remained on its balance sheet at year end. That's pretty incredible. So they're effectively like a payday lender almost in terms of duration. It's quick. Listen to this. Like, oh, Klarna is going to crash the account.

52:55Not Klarna. Buy now, pay later. People are going to take it. The average balance per active Klarna consumer in 2024 was$87. Okay? $87. Compared to an average balance per credit card of approximately$6 ,730 in the US. So do you think in the next recession, we keep trying to guess how these new companies are going to do in a recession. Does this stuff fall off a cliff or does it actually increase? Do people use it more in a recession to help them get by? Yeah, I would think it's - And then the default rate just goes up. Yeah, I would think that's the path. $87, that's hilarious. Yeah. Yeah, you're right.

53:37It's tiny. Come on. But kudos to these companies for continuing to grow. Again, as everyone mocked them saying, this is a zero percentage rate phenomenon. Never going to work. Now, again, I'm a bit over my depth because I don't know exactly how it works. In a recession, credit card companies are like, good. We'll, we'll own you money. 29%. Right. Right. Like that's the price. A lot of you will pay it. Some of you won't. Um, I don't know exactly how it works in terms of like credit availability with the buy, not pay laters. Do they just like not extend it? Right. Is there a way for them to like have the data on yours as your, your credit profile and pull back?

54:07I'm pretty sure that's how it works. I'm not a hundred percent positive. Yeah. They, they might not have to worry about it as much because the balances are so low. Right. And it's just more of a quantity, not quality. I don't know. All right. From the FT, I think young people never stood a chance and I'll get into the reasons why. So they look at - When you say young, what are we talking about? I think Gen Z-ish. And I think really, I feel for anyone who lived through COVID in high school or college, I think they got majorly screwed. I can't imagine having those 24, 36 months disrupted at that age, considering like the, the amount of just care.

54:48When I lived, when I was that age, I was so carefree. I didn't care about anything. There was nothing in my life that mattered. I had no responsibilities, even with school. I didn't, whatever it's school. I had, and so I going through that. So wait, hold on. I just want to one thing. I don't think I put this in the doc, but I saw a tweet last week that I completely agreed with. And this is very personal. It's not going to be for everyone. But for me, it rang very true. My childhood, call it, I don't know, before 20, was way more stressful than my adulthood. And that's because my adulthood has gone well.

55:21My childhood was a bit rocky. But I feel like obviously there's different levels of stress and responsibility. But being a kid, I thought it was hard. Okay. I don't know. For me, I always thought it was kind of – I was never worried about anything. I think that's just my personality too. I'm kind of a, I don't know. Like, it was once I had to, like, the end of school, and then I just figured out finding a job, that's when stress hit me. Like, oh, my gosh. Maybe I should have been paying more attention and doing stuff. But they show, and I think this is a social media thing, too. Confidence in the judicial system is crashing.

55:55Trying to find good, affordable housing in the city is crashing. Confidence in the national government. Satisfaction with your life. Expectations of your life in five to ten years. Experience of stress. So all these other things are crashing, and stress is going up. But wait, if you looked at other age groups, I bet it would be the exact same, more or less. No, that's – but can't be for young people. You think this is unique to young people? I think a lot of it is, and I think you could boil it down to three things. COVID, social media, cost of housing. I agree. That's where I think, like, on the one hand, yes, every single generation that's come up has had their problems.

56:31But I think that if you just throw that stuff at young people, I think they do have a legitimate gripe. of getting out of school after living through COVID, young people took it on the chin to help old people, social media, growing up in that age, you just, you never had a chance to live a normal life or not be like completely stressed out and anxious about the world at all times. And then the cost of housing. If I was 25 today and looking at trying to find my own first house, I'd be so mad at the world. Yeah, yeah, yeah, you're right. I think every generation has something, but I do think young people that these days have a legitimate gripe, how's that?

57:05Even though, if you look at from The Economist, Gen Z is making way more money than any of the other generations before them. And I still think they have a legitimate gripe. Agreed. Good chart here. This is from Chris Freeman. He says, the middle class is shrinking because many people are getting too rich to remain middle class. And I got a theory to test out on you. So it's showing that since the 1970s, people in the highest income, and that's earning$100 ,000 or more in 2022 dollars, so this is adjusted for inflation, has gone from 13 % in 1967 to almost 38 % now. The middle class has gone from 55 % to 39%, whereas the low-income class has fallen from 32 % to 23%.

57:47So a lot of people in the middle class have moved up to the upper class. all right do you think people as a whole society would be happier if instead of moving from middle class to upper class we had more people move from lower class to middle class if the middle class would have gotten bigger instead of the upper class yeah no doubt but i think this is also getting back to josh's point a few weeks ago about like everyone is rich now this is also why people who are rich aren't nearly as happy as you would think they should be because there are more people who make more money these days. Yes. Well, to that point, Daniel Crosby tweeted, or maybe put this on LinkedIn.

58:24I love this. So true. He said, the Joneses aren't that happy. We think they are. They're curated Instagram life. They're new Tesla. They're enviable vacations at all scream success. But here's the truth. Chasing what they have won't make you happy or it'll make you miserable. and then he goes on to cite a study that materialism feeds on possessiveness non-generosity and envy you work harder buy more but happiness never arrives you just move the goalposts you can read more about this in his in his book the soul of wealth now listen i i understand when i say that people like give me a break like boohoo and i don't think anybody's i'm not saying that you should have empathy with these with the joneses i'm just saying people are chasing something that like they think will be fulfilling and it's a message that is really unpopular Nobody wants to hear this.

59:10And I don't want to like preach this. I'm just saying it is true. No, so I'm rereading this right now for some reason. The Steve Martin book, Born Standing Up. And he talks about how in the late 70s, he was at the top of the world. He was the biggest standup comic in the country, part of the world, selling out arenas. And he was miserable. And he talks about it. He's like, listen, I was miserable. And I know I shouldn't have been, but I still was. And he was like depressed. He's like, everything I ever wanted, I got. And it still didn't make me happy. And I had to like, so he walked away and had to find something else to make him happy.

59:41That's it. That's it. That's, that's why I think why so many famous people or celebrities like, uh, end up offing themselves because they finally get what they think they wanted all along and they still feel empty. It's like, well, if this won't make me happy, what then literally there's, there's no answer. Yeah. And yeah, life is hard. It's true. Ben, movies are getting their butt cheeks kicked.

1:00:07let's see so I subscribed to a sub stack by Scott Mendelsohn and he said SANS 20 and 21 and SANS inflation it's the lowest total for this weekend since 2001 when the Sigourney Weaver Gene Hackman slash Jennifer Love Jason Jennifer Love Hewitt Jason Leigh con artist rom-com Heartbreakers dropped I don't remember that movie Gene Hackman was in that? Wow Anyway, Outdoor Nights debuted the Barry Levinson, Bobby D movie. Never heard of that. Outdoor Nights debuted in 2 ,651 theaters to a whopping$3.2 million. Holy shit. Snow White bombed. Yeah, not a great spot for movies these days. Prestige TV is the diversification here.

1:00:59Yeah. Right? It's a great call. All right. I know we're getting long, but we spoke about Craig in this episode. So I just want to give him a shout. Craig Pierce is the dude behind Harriman House or one of the dudes behind Harriman House. And they have been - Who published Barry's book. They have been massively successful thanks to people like Daniel Crosby and of course, Morgan Housel and Brian Portnoy and Barry and Meb and so many others. And the reason why they won is what I'm about to read you from Craig. Craig said, I am back at my desk in England after 11 days in the US meeting with existing new and prospective authors.

1:01:41On this trip, I visited Washington DC, New York and Miami. I began at DC with lunch. He was at Future Proof. Yeah. And Barry's book party. We had dinner with him. I began in DC with lunch. Then over the next week and a half, I had 29 more meetings over breakfast, coffees, lunches, and dinners. The reason Harriman sends me on these trips is that we place a high value on our relationships with our authors. Video calls serves a useful purpose, but nothing replicates meeting in person and building relationships. Maybe this is more important than ever with the expansion of AI. One way to be sure you're speaking to a human is to be there in person with them.

1:02:18And Craig is such a great guy and he just nailed it. It's not random that Harriman House is having all the success that they are. Publishing my next book, which I finished the draft of last week. I'm handing it in to Craig this week. It should be published next May, but it's been a great experience working with him so far. I can't wait to go through the whole editing process too. Yeah. All right, Ben. I got a quick just midlife crisis thing from people. I was picking up my daughter, and this is something we've talked about before, but it was just perfect because I picked up my daughter from soccer, and there's two dads talking, and one of the dads goes, hey, man, how's it going?

1:02:55And he goes, can't complain. How about you? And the guy goes, living the dream, man. I almost had to like get in there with another one of them just to keep it going but it was what would you have said another day in paradise alright wait that was it and then did they just walk away from each other I thought they were going to self combust alright great idea from a podcast listener can you guys add a rating system to your movie and show recommendations on the pod typically you and Mike say it's really good or really bad but a ranking system will help us get a gauge of what you really think AA plus A minus or one to ten But here's a problem with the rating system.

1:03:31So I have a – Oh, you don't want to get judged. No, you don't. I like the 1 to 10 scale because that's what they do in IMDb. I'm not a three or four star guy. It's 1 to 10. I love this idea. Okay, but the problem is my ratings might not match up with your ratings. So for example, we both agree that let's say The Godfather Part 2 is like the best movie ever or up there. Let's use Goodfellas. How would you rate Goodfellas? Yeah, 10. 10. Okay, see, I wouldn't. I have a different rating system than you. Okay. So I understand, like, all right, so. Well, this guy says it can also act as a contrarian indicator for Michael's recommendations.

1:04:09No, no, no, no, no, no. Because I have a personal rating system. I don't believe in 10s. I'm a harsh critic. So you're the teacher who doesn't give out A's then. If there's a movie that I really like, for example, Alpha Dog, love that movie. How would I rate Alpha Dog? 7-1. So it might be confusing to the listener. It's like, wait, what do you mean you love that movie? How is it a 7-1? I love that movie. I know it's not like an 8-4. It's really like a 7-1, but I love that movie. Here's the thing for me. If I see a movie or a TV show as a 7 or above on IMDb, I'm going to give it a try. Yeah. Six to six and a half, I'm okay with, especially if it's a comedy.

1:04:43If it's in the fives, I'm probably out. All right. So I'll try. I'll try giving you numbers, but just know I'm a tough cookie. All right. So here's my, so Severance had a fall off. And I said, here's my tweet from the other day. because I said Severance is in a drawdown from season one to season two because they had a couple slow episodes. And I sold too early. And I said Severance season two was a 2020 COVID stock market. From new all-time highs to a quick 34 % crash. It was that bad? No, it wasn't that bad. I'm being hyperbolic here. But when all hope is lost, there was a massive rally to end the year with an 80 % gain back to new all-time highs.

1:05:13The last two episodes were amazing. The finale was unbelievable. And I'm seeing some prestige TV pushback saying, like, these shows are just so beautiful and like they're not as good as, there's not as much substance. I don't care, man. I'm watching The Pit and Severance and White Lotus in the last week and all had fantastic episodes. The Pit episode with the shooter. I'm sorry if I just heard you. Did you reference what Derek said about the gilded age of movies, of TVs? I've heard some, I've seen a lot of people tweeting like Severance really isn't that good. It's like a, what a person with a hundred IQ would think a 130 IQ show should be.

1:05:46No way. There's some pushback. No way. These are great. These are great shows. Amazing. And it's one of those things where after watching The Pit and Severance and White Lotus, it's hard for me to get into other TV shows now because they're so good. So I'm trying to new TV shows out. So I started Adolescence on Netflix, which here's the greatest part of this show. Four episodes? It's four episodes. Great. Did you watch it at all? Not yet. Okay, here's the hard part though. It's about a 13-year-old who's charged with killing one of his classmates. And seeing him and the parents go through this.

1:06:15And it's very realistic and very good. But as a parent, it's actually kind of hard to watch. Okay. But it's very good and very well done. So that's the next one. Did you start Dope Thief? I did. But that's the kind of show where I'm having a hard time. It's a really cool premise. I'm having a hard time getting into it because the other shows are so good. So I need… Really? But it's such… Like it moves. Here's the thing though. You need a palate cleanser. So you have to go from a good TV show to a movie and then back to TV. Oh, I got you. So I needed a movie to have a palate cleanser. All right.

1:06:41I love Dope Thief. It's good. It's a cool premise. The lead actor is f***ing awesome. He was in a… I only know him from Godzilla vs. Kong. He plays the podcaster. But I think he's been a star in other shows. He's a guy from Atlanta. Okay, that's right. That's right. All right, Daredevil Born Again. Quite good. Okay, I actually watched a little bit of the first season of it. I just, those shows just don't do it for me. Yeah, I know you're not a superhero guy. But Daredevil and The Punisher with Jon Bernthal, really, really, really good. Okay. Really good. What's it on, Disney? It's on Disney. Is it on Netflix or Disney?

1:07:18Disney. It's really good. I watched the first season of The Office. Okay. And? I watched it on the airplane. Only six episodes. All right. The Olympics episode is fantastic. Was that the first season? Yes. One or two. But the basketball episode is an all-timer. Was it not? The basketball is funny. I think that's one of my favorite episodes of all time. It's a throwback. It's old, man. I think he does like the, was it? thing. Well, Steve Carell doesn't have Hollywood hair yet, even. What year was that? 04, 05, probably. His hair was thinning back then. When he's missing shots and he just goes, what is wrong with me today?

1:07:58It just kills me. Some of the racial insensitivity training. Yes. Stanley's going to start, obviously. It's pretty good. I feel like that's a really good airplane show for me. I can see that, yeah. If he does off, it's like no big deal. The 20-minute episodes, they fly by. You're right. You don't need to pay attention to the plot all that much. Okay. All right, Ben. Good to be back. Yep. I'm very happy. I'm not leaving the tri-state area until May, which I feel very good about. Next week, I'm going on spring break. So next week, I'll be in the office. Two weeks from now, I'll be filming live from Marco Island.

1:08:38Oh, lovely. Beautiful. Annual trip. Beautiful. All right. Exhibit A for advice. Exhibit A for advice.com. Animal Spirits at the compound news.com. Thank you very much for listening. See you next time.