Everyone Hates AI (EP. 453)

13:26Michael Batnick:better i'm trying to make me feel better um i feel like you've taken over my mantle here of

13:30Ben Carlson:being the person who's trying to catch the...

13:32Michael Batnick:Listen, here's a good thing about investing in a brokerage account. You either make money or you make tax losses. Either way, you win. See? That's Michael Math. So, all right, these are the stocks that I'm... These are the knives I'm catching. I bought Blackstone on Friday. I'm already down 7%, LOL.

13:53Ben Carlson:Wait, wait. Can we talk about... We'll get into that later, but... Okay. All the private market stuff is getting slaughtered because that was part of it too. Private credit is going to get killed in this. Anyway, keep going.

14:04Michael Batnick:So Blackstone is in a 43 % drawdown. Yeah, I'm comfortable holding this stock. I understand. So here's the thing. Oh, these names are risky. No shit. The stock is down 43%. Software just had its worst month since October, 2008. Don't tell me it's risky. I know. The market knows.

14:19Ben Carlson:Instead of buying the individual names, why wouldn't you just buy IGV? You think there's more money to be?

14:23Michael Batnick:Because I'm buying, I bought Salesforce and ServiceNow. These stocks are both down. and I'm down 7 % on each of these names, by the way. Just full transparency there.

14:34Ben Carlson:I want nothing to do with these stocks. Fair.

14:37Michael Batnick:Listen, maybe I change my mind next week and say, yeah, I sold it for a 10 % loss. ServiceNow is down 57%. Salesforce is down 52%. Those, I am definitely not getting married to. But like Netflix, I'm not selling Netflix. I bought Netflix last week. I'm not selling Netflix. I don't care what happens.

14:55Ben Carlson:I sold it a couple weeks ago. Okay. I feel like, see, we've changed spots here. That's okay.

15:00Michael Batnick:Listen, I'm changing my mind every other day. S &P Global, not scared. I bought CrowdStrike yesterday. This seems like a really, really, really, really stupid overreaction. Like, companies are going to clawed away, clawed code away their cybersecurity. Get the f*** out of here. And I bought Schwab.

15:14Ben Carlson:That never makes sense.

15:16Michael Batnick:And I'm buying Microsoft at the open. If AI is so powerful, I think Microsoft is a buy down 30-something percent.

15:23Ben Carlson:It is kind of funny. You can't have these two competing ideas that AI is going to kill the technology industry, but it's also going to be so powerful that, so these tech companies have to be part of this.

15:32Michael Batnick:Let's also say that right now, yeah, the market looks abominable. There's no evidence. So this is where I'm taking, I'm going against my own advice. Well, no, the market looks fine.

15:42Ben Carlson:These stocks look abominable. The market's 5 % from highs.

15:45Michael Batnick:I've always said to people, and this is maybe, not watch what they say, but watch what they do. I don't know. I'm being a hypocrite. Wait for any evidence that there's a bottom. Wait for a higher low. Wait for the sellers to dry up. The sellers have not drawn up. They've got all the ammo. I don't care. I'm running to the fire. Here's one thing that I might -

16:03Ben Carlson:The sellers are David Goggins running an ultra marathon.

16:05Michael Batnick:Here's what I take comfort in. There you go.

16:10Michael Batnick:It's not hard to imagine us laughing about this in six months. At all. Think about how fast sentiment changes.

16:19Ben Carlson:I think when we get to 2028, they're going to look back at this piece and go, why did people believe that? I totally wholeheartedly believe that in 2028, people are going to look back at it and go, oh my gosh.

16:29Michael Batnick:How could we be, oh, of course, of course. Think about how fast the narratives changed last year and over the last couple of years. This can, it seems really hard that this is all of a sudden going to dry up because this fear that is spreading rapidly, it's COVID. It's a virus. Here's what else happens. We're not going to get vaccinated and all of a sudden like, or a magic wand, bing, forget about it. So that's the part that it's like, it is hard to foresee this changing or stopping at a dime, but things change. Narratives change.

17:04Ben Carlson:There was a story flying around Twitter yesterday of someone from Meta who put an agent to work and it went through and deleted all of her emails. Even she said, don't do it. There's going to be a story where someone's going to be using this software, they're using cloud or whatever, and it's going to make a mistake. And everyone's going to go, oh, it made a huge mistake. I feel way safer in these software stocks now. Like that's the kind of thing where AI is going to have a mistake. And of course, it's not perfect. That's going to have, I want to talk about one more thing with this article. He talked about how the real estate market is going to get hammered, right?

17:31Ben Carlson:I actually think that real estate is the best AI hedge that there is. I think the physical world becomes way more important in a digital environment, in a digital world that we're moving into. And I think, especially if you really believe in the AI case, that it's going to be deflationary, rates are going to fall. Guess what? The government's going to have to print more money. That's the other thing that this piece didn't mention is the fact that there's going to be a fiscal response and a political response. I think in that scenario I think housing prices are going to be one of the strongest hedges against AI that there is because we're obviously not building more of it

18:05Ben Carlson:I thought anyway I guess what he said

18:08Michael Batnick:which was like what happens when the top of the K gets busted and we start seeing mass unemployment and the mortgages are no good yeah that to me was a stretch whatever listen it was a good piece really well done obviously here's the thing

18:21Ben Carlson:for your worry about all the white-collar workers getting out of jobs So he mentions tax client, taxes, lawyers. There's going to be, when lawyers don't have to hire paralegals to do all this grunt work, and they don't have to be reading all the time, guess what there's going to be? There's going to be a million more lawsuits. There's going to be a million more people that you can do taxes for. There's going to be more financial advisory clients. There's going to be more medical testing. Think about if you can use an AI chatbot for customer service, think about how many more complaints there are going to be.

18:48Ben Carlson:And someone's going to have to take, go up, run up the poll, and then take care of those complaints. Good take. Okay? There's going to be more media. There's going to be more work to be done. We're not going to be laying on a hammock doing nothing.

19:00Michael Batnick:People are going to be doing more work with this. I completely agree with you on that front. I completely agree. No hedge. Think about what... By the way, you know what's funny? Open eye ain't shit. Nobody was worried about Chad GBT f***ing up the labor market. At all.

19:16Ben Carlson:You're right. At all. Anthropic is the one that did it. That's a lot of Anthropic.

19:21Michael Batnick:Everything was hunky-dory. People are laughing at Sam Altman. This thing gets everything wrong. Don't worry about it. Here's the thing, though.

19:29Ben Carlson:And then comes Daria. So last week, we talked about how, like, is AI a mistake and people are going to hate it? And the media picked up on that narrative really big this week. So Time had this article. But wait, hold on.

19:39Michael Batnick:Just before we shift up to this point of it, I just want to stick with the productivity, the work piece of it.

19:44Ben Carlson:Okay.

19:44Michael Batnick:Think about how much better you're getting at the work that you do as a result of having access to these tools. I feel it. I feel like every time I open these things up and I type something in and I'm talking to it, I feel like I'm getting so much smarter, so much more effective at being able to communicate and understand.

20:10Ben Carlson:But is it making you work less? Are you working any less because of this? No, no, no. Same for me. I'm working more. I'm doing more stuff because of AI. I'm not working less.

20:19Michael Batnick:Right. So that's the part of it that gives me hope and excitement. And again, I'm not saying it's all doom. I'm just saying that some of the stuff, like the stuff I said at the top of the show about people that we know that are going to be made obsolete, like that's, that sucks.

20:33Ben Carlson:It is fair to think that the transition is going to be bumpy. It's just, it's kind of crazy that something like DoorDash and Uber were created. And now we have 3 million people doing these jobs. and then you look ahead and you go, oh my gosh, autonomous vehicles are coming. What are those two or three million people going to do? But what did they do before? That's like, that's the thing is like, how dynamic this economy, but you're right. I totally agree with you that the transition period for millions of people is going to be very painful. And I don't think anyone wants to look at the mirror and go, that's me.

20:59Ben Carlson:Even a lot of, I think a lot of tech people right now are doing that. Anyway, thinking through all this doom porn though, this is why everyone hates AI. Sorry, I will let you get to this piece.

21:10Michael Batnick:but that's also what is putting um such that is also why the stock market feels so bummery right now we'll get to the overall stock market how well different parts of it are doing but that's what can shift like the what would stop the buy the dip mentality it's like well if i'm like sort of anxious about my job i'm probably not psyched to put money to risk that i might need yes right

21:35Ben Carlson:yeah people that if it changes people's appetite for risk and we've kind of wondered like boy it It seems like this risk on attitude for this decade has just been unstoppable. What could stop it? And maybe AI is that thing. You're right. Okay, get to this cover. All right. I totally understand why people hate AI. We sort of planted the seed last week. Time did this thing about the people versus AI. It's called like the growing backlash. The New York Times had a piece called people loved the dot-com boom. The AI boom, not so much. And they interviewed this guy who's a co-author of Boom Bus. He said, I can't remember a boom with such active hostility to it.

22:08Ben Carlson:people used to find new technology exciting. It happened with electricity, bicycles, motor cars. There were fears, but also hopes. AI is notable, perhaps unique for the lack of enthusiasm. Because duh, hey, do you want a CapEx bubble or a bunch of job loss? Which one do you want? No one wants either of those things because that's what's being presented to us. And I think the tech people have done a horrible job of telling people why they should want this technology. It's just kind of like, you can't -

22:36Michael Batnick:People at Blue Owl shared the same PR manager.

22:39Ben Carlson:Right. Sam Altman needs a new payout. And he's not the guy to lead this because he was telling people, listen, yeah, it takes a lot of energy to run AI, but it takes 20 years of life and food before someone gets smart enough to work at a job. This guy, he's not the person to do this. And so the thing we're learning is that tech people, obviously, their intrapersonal skills are not very good. And that's one of the reasons why I think that they're overlooking the fact that the human element of this, because they're not good at being humans. No offense. they're not good at the emotional side they don't have they have iq they don't have eq there's a lack of deficiency of eq among the tech leaders and they don't understand that part of it and they just assume everyone is going to be a robot and that's not going to happen but i don't i totally understand why people hate ai because the way that they're presented is listen you you don't even know what's coming just wait you have no control over this there's no stopping it job loss and it's like why would i want this so my question is what's the political backlash going to be.

23:31Ben Carlson:We're going to get, if this, all this stuff comes for fruition, we're going to have a socialist president in three years.

23:36Michael Batnick:Jamie Dimon was talking yesterday at a, at a investor event. And he was saying like, for people running companies, if you can eliminate$150 ,000 jobs and replace them with$20 ,000 line item expenses, like, are we sure we want to be doing that as business leaders? Like, is that good for society?

23:55Ben Carlson:And I hope more CEOs are thinking like that. You're right. Jamie Dimon probably could snap his fingers and replace a lot of the people at J.P. Morgan with AI. But politically, how does that work for him? Financials are a regulated institution. Is the government going to look kindly if you just all of a sudden let go of 25 % of your labor force? No way. So there's going to be other human elements to this, these decisions, like career risk. Right?

24:23Michael Batnick:Do we trust government to step in and make good decisions here?

24:27Ben Carlson:That's the problem. Because I think a lot of people think, well, listen, in 2020, we learned the fiscal response when something like this happens, we throw a bunch of money at it and the economy's fine. So if this happens with AI, we'll throw a bunch of money at it. But yeah, you're right. I don't have faith that the government is going to like thread this needle. I think they would have to, they'd probably wait for a crisis first and then do something. That's my worry.

24:46Michael Batnick:Here's another interesting thing. Somebody tweeted, who is this? We sort of hit on this last week. James Wong said, I've followed tech for 25 years and I've never felt a larger gap between the million people using Codex Claude and the rest of humanity. And it's like, are they gaslighting us? You know what I mean? Like, are we just believing? Or is the rest of the society just like walking dead and they don't even know it yet? I'm sure it's not either or. It's probably somewhere in the middle, hopefully.

25:21Ben Carlson:But don't you think it's possible in the future that people are just going to be using these tools and they don't know it? It's going to be part of their life. And it's like, oh, that's easy. But they're not going to like celebrate it every day. It's just going to be slowly ingrained into our lives. I don't, the tech people still want it to be like, boom, this day, it's like BC and AD, right? I don't think it's going to be like that.

25:43Michael Batnick:Maybe there's a, maybe there's a prediction market for this. will unemployment be over 10 % in the next five years?

25:55Ben Carlson:Oof. I would need a caveat there because it's like, is AI going to cause a massive recession?

26:01Michael Batnick:Well, yeah, obviously, that's it.

26:03Ben Carlson:Will unemployment be over 10 %? No, but I think some people think that there's going to be a, you're going to get this unemployment at the same time the economy is booming. That's what the AI people are trying to tell us. Productivity is going to go through the roof. You're going to get huge unemployment.

26:19Michael Batnick:All right, that's a separate, that's part two. Will unemployment hit 10 % or higher in the next five years? I would say no. I mean, you're going to need some pretty juicy odds to make me bet on, not that I would bet on that, but. Right. You say no? I say no. Let's talk about the stock market. So last week I said, you know what? I'm still bullish, like the macro backdrop. Hang on, hang on.

26:42Ben Carlson:Sorry, I'm going to backtrack one more time. So you said like you were walking around. I like try to talk to my wife about this occasionally. And you're right. There's a lot of people. What percentage of the population just isn't paying any attention to this? 80?

26:52Michael Batnick:No, more. Most people have. Yeah. Like most people that just aren't online that just live a normal life. Why would they be paying attention to this?

27:00Ben Carlson:And the other thing, I think a lot of people assume Twitter is like this dead place. But Twitter is the reason all this stuff has blown up in the last month. If Twitter didn't exist, this stuff doesn't blow up as much as it used to. So Twitter is still like a market moving mechanism for even for warts at all. I feel like they, they try to change something to make me hate it more all the time. Like the way videos play now is way worse. The way you read stuff and links is way worse, but they keep trying to make it worse on purpose. I feel like, and they can't, they can't make it go away though. Anyway, let's talk about the stock market.

27:30Michael Batnick:Okay. So last week I said, I think this is healthy. Like rebuilding the wall of RE is a good thing. You need that. I love that the stock market is that that that stocks are outperforming the stock market like 65 % are outperforming the index highest on record or what that's a great highest in the last 50

27:46Ben Carlson:years from Ned Davis 66 % of index constituents are outperforming the S &P itself which is nuts yeah especially since you hear about all these stocks crashing you would never think that

27:56Michael Batnick:I do love I really I do love that um and I'm not gonna change my tune there um and the macro backdrop is still good, like inflation, okay, consumer spending.

28:07Ben Carlson:See, this is what's funny to me about your strategy. Instead of doubling down and buying these areas of the market that are going up, you're trying to buy the ones that are going down. Usually, a momentum trader would say, no, no, no, I'm going to buy staples and industrials materials.

28:18Michael Batnick:Okay. We haven't spoken about this, and maybe we will at some point, but we have a strategy internally that I put a lot of my money into the momentum strategy.

28:29Ben Carlson:so me too because i don't i don't i would rather have a an algorithm or rules pick my stocks than me that's why i've decided to you know what i did you said you're gonna do this i sold all my individual stocks like three weeks ago and all i have is this one rules-based strategy so i told

28:43Michael Batnick:bet i'm done picking individual stocks i'm just gonna i'm just gonna put i'm just when i want when i want to buy stocks i'm just gonna put it back into whatever strategies we run internally one of them being a momentum one and i meant it i i did meet it and then sometimes opportunity strikes. I didn't think that crowd strike was going to fall 15 % in two sessions. Like I meant what I said three weeks ago and then the world changed. All right. So, so getting back to like the backdrop, like everything fine, like earnings, revenue, top line growth, multi-year high, things are good. The thing that worries me, there's two things.

29:18Michael Batnick:One is the rotation, the hard rotation into risk-off names out of discretionary and not just the cap weight, put the equal weight basket into staples. That worries me, seriously. And -

29:29Ben Carlson:So this is more like a late cycle kind of stuff, right? Late cycle behavior.

29:33Michael Batnick:Just, if the Mag 7 keeps getting killed, like the market can only take so much. So right now, Microsoft is down 30%. Apple's fine. Meta's not doing great. Amazon's not doing great. Google's fine. NVIDIA reports later this week. Like, I feel like the MAG7 as a group can't fall 20 % without bringing the market down.

29:59Ben Carlson:Don't you feel like we're at the point where everyone kind of assumes we deserve to be in a correction right now? Like, it should be worse than this. Why isn't it? I think that's what the - But why should it be worse?

30:08Michael Batnick:I just said that revenue growth is at an all-time, revenue growth is accelerating. Margins are at all-time highs. No, the market is forward-looking.

30:14Ben Carlson:In 2028, this market's going to be on 38%, remember? Right, right. So might as well get there now.

30:19Michael Batnick:Yeah. But you know what? for all of the anxiety that I'm feeling, and I'm sure I'm not alone. Listen, imagine people that like, what if you're a Salesforce employee? What if, there's a lot of people probably listening that work inside these companies. It's like, Michael, shut up, asshole. Oh, you're down 6 % in Salesforce. This is like my life.

30:41Ben Carlson:Yes, if your retirement plan was all based on, I'm going to get shares in these companies, and now my shares are down 60%.

30:47Michael Batnick:It's devastating.

30:48Ben Carlson:Yes, yes, I totally agree. But here's the thing. If we do get an AI-induced sell-off, if people start extrapolating and, oh my gosh, if this technology is as great as they think it is, I think it's going to be a wonderful buying opportunity. I think every bear market is a wonderful buying opportunity. But I think that if you get a tech-induced innovation sell-off, and as we sort of slowly but surely integrate this into our society, I think that's a fantastic buying opportunity.

31:13Michael Batnick:How about this?

31:14Ben Carlson:You heard it here first.

31:15Michael Batnick:All right. Have you ever said, buy when there's blood in the streets? if you've ever used that quote and you're selling here, you're a clown. I'm not saying you have to buy, but if you are selling right now, you don't get to quote Warren Buffett ever again. Fair? Okay. So the MAG7 is in an 11 % drawdown. The equal weight index, or let's use the cap weight actually just for apples for apples. The cap weight is down 2%. Unbelievable. So I'm not suggesting that the mag seven, which is what? 35 to 40 % of the index. I'm not suggesting that 35 is bigger than 65, but I'm just saying if the mag seven falls 15%, forget about it weighing mathematically on the market.

32:02Michael Batnick:I'm saying the psychology of the market is going to shift.

32:05Ben Carlson:I agree. It seems like there's only so long that these stocks can crash without people saying, okay, now I got to sell something else.

32:11Michael Batnick:Exactly. That's my take. So if a lot of ifs, a lot of ifs,

32:18Ben Carlson:You know what I'm doing? Every month, I buy stocks in my IRA. Every paycheck, every twice a month, I buy my 401k. Twice a month, I put in my brokerage account. Once a month, I put in my kids' 529 plan. And AI is not going to cause me to change that. Ever.

32:35Michael Batnick:Yet. Of course. No, of course. Listen, auto buys for the win.

32:39Ben Carlson:Always. Hey, if you really think AI is going to be this disruptive, invest in the stock market. Okay? If profit margins are going through the roof and profits, like, the stock market is going to be the savior in the future. Okay? I totally disagree with the fact that this is going to cause a stock market collapse. That makes no sense to me at all. Keep going.

33:02Michael Batnick:Okay. Oh, this is a good one. All right.

33:09Michael Batnick:For financial advisors, we built a platform called Exhibit A. We've spoken about it a million times. We do these charts of the week, different charts. I'll put your logo, your call scheme, blah, blah, blah.

33:18Ben Carlson:We're working on something. I'm going to be doing some more commentary there.

33:21Michael Batnick:Yeah, well, we'll tease that later.

33:23Ben Carlson:Yeah.

33:25Michael Batnick:All right. There's a great chart that ChartGo created, ChartConMAT, that shows the number of 1 % up and 1 % down days by decade. And the average is 507. we are halfway through the 2020s and we're basically right at the average this is are

33:52Ben Carlson:we gonna break the record so this shouldn't happen and the thing is this shouldn't happen in a bull market this should happen in a crappy market right right this is this is it's all weird yes anyway um things are just happening way faster these days the repricing and so there

34:11Michael Batnick:Everything is pretty much in line. They all cluster in a pretty tight range, as you would expect, like normal markets. The 2000s was through the roof, right? You had the dot-com bubble and the GFC. So that was 840. But we're on pace to smash that, which is kind of nuts.

34:28Ben Carlson:Yeah. It's been a crazy decade. It's only going to be crazier. Yeah. These overreactions aren't going to just die down all of a sudden. You know, right?

34:43Michael Batnick:Could I put in some hedge and trades? All right. I'm buying Microsoft right now.

34:49Ben Carlson:So Microsoft, I'm looking at the mag seven is down 21 % on the year so far.

34:54Michael Batnick:Oh, it's what down 30 % from its eye.

34:56Ben Carlson:Yeah. So three mag seven are down more than are down double digits this year. That's Tesla, Amazon and Microsoft are all down double digits. Microsoft being the worst. All right. Godspeed. Listen, if I'm wrong, I'm a big boy.

35:14Michael Batnick:I've lost money before. Many times, I should say. Many times have I lost money before.

35:18Ben Carlson:So, but do you think that the MAG7, so I saw that you have a global breadth chart in here showing that the most number of markets near highs in over 20 years, and this is like the global stock markets. If the MAG7 and AI takes a bigger tumble here and software stocks continue to get hit, that's not going to impact overseas markets at all, is it? Like, that's the hedge, isn't it?

35:42Michael Batnick:It depends how bad it gets. I mean, obviously, in a bear market, correlations go to one. So I guess it... No, if the Max 7 falls 30%, the rest of the market will tumble too. No?

35:55Ben Carlson:Okay. Yeah.

36:01Michael Batnick:All right. I am actually buying Microsoft. Bear with me. First time in a long time I've done this on the show. Locked in. All right. Let's move on. market order kind of guy market order i mean especially with a stock like that right isn't

36:15Ben Carlson:it a new move to buy in the first half hour of the market first or last half hour i don't know man

36:21Michael Batnick:i'm scared i'm buying okay all right this is a good chart it's so far i mean it's markets man am i right how much fun it's unbelievable how i know we're broken record here. Broken horse, dead horse, dead record.

36:38Ben Carlson:Walking dead. Yeah. Beating a dead record.

36:42Michael Batnick:Dead man walking. Never saw that one. Sean Penn. Sean Penn.

36:45Ben Carlson:Not a good hang that movie.

36:48Michael Batnick:All right. Of course, coming into 2025, it was like, all right, game on. I'm sure there were many episodes where we said, is it even possible that we avoid an AI bubble? That's how we were talking right like yeah probably not it's probably coming wrong all right here's a good one steve don's tweeted i definitely not pronounce his name right but um there's a there's a line a diagonal line over the e i don't know which i don't know what you do is that don don's a don's eye who knows he has a chart showing global IT sector in the late 90s and the global IT sector today. And the 90s chart shows the price and the earnings.

37:39Michael Batnick:And of course, the price diverged bigly from the earnings versus today, where the earnings are ahead of the price. Nothing like the 90s.

37:51Ben Carlson:Couldn't you say that? thing. We never really, so like we're already separating the wheat from the chaff or we're trying to. And these, these, it feels like people are in a stage of the surprising thing to me is that where people are more looking for losers than winners, right? It feels like when this, usually in innovative bubbles, everyone's looking for winners. This was, it was not like this in the dot-com bubble where people are trying to figure out who's the losers going to be. Let's sell those suckers, right? This is different. Great use of suckers. We never really, we never really got our like blow off bubble here because people are looking for the losers as opposed to the winners.

38:26Michael Batnick:Which by the way, let's assume that let's assume that we're like somewhat in the vicinity of a bottom, right? Let's say that the S &P falls 10%, I don't know, whatever that we don't like the wheels don't come off. As shitty as this feels, I still maintain this is a much better outcome for all of us stock market investors, because had it gone, had the S &P gone straight to 8 ,000, you know it's coming back. You know it would have come back.

38:50Ben Carlson:This probably is a better outcome. I agree.

38:55All right.

38:56Michael Batnick:Oh, speaking of 1999, I haven't told you this. I've been slowly getting back into The Sopranos. Okay. So we didn't have HBO growing up.

39:09Ben Carlson:No, me either. That was a sign of wealth for me. When I grew up, if you had HBO, you were a rich kid.

39:14Michael Batnick:Yeah. So I definitely felt like from that angle, I didn't feel very good about my standing in life.

39:19Ben Carlson:It is funny how everyone has every streaming service now. It seems like it. But back then, like HBO was a really big deal if you had it.

39:25Michael Batnick:Yeah. So as however old I was, as a 13 year old, you say, you're not watching the past. I don't like it.

39:30Ben Carlson:But do you remember when you'd get a free weekend once a year of the movie channels? Oh man. Yeah. That was a great weekend.

39:37Michael Batnick:Anyhow. So I'm on season three and I'm not like plowing through it because I just fall asleep in 20 minutes. but it's the season where Tony and Ralphie are fighting anywho I was at the dump last week guess what's not being disrupted by AI my dump runs

39:54Ben Carlson:your favorite place Gandolfini that's the best TV acting in history though right there's no one that has a better performance than him maybe you know I find this accent

40:05Michael Batnick:so absurd I can't get used to it really

40:08Ben Carlson:yeah okay I think he's the best TV character of all time that's where I landed on Sopranos There's a lot of really bad acting in that show, but that's the thing that like is kind of hard to, isn't there? There's a lot of not so great.

40:20Michael Batnick:So anyhow, I bring this up because I was at the dump and I saw something that just brought me back to simpler times. A box of DVDs and CDs. And I couldn't. Oh, wow.

40:34Ben Carlson:You take a look.

40:35Michael Batnick:I couldn't help but give one of these. And so The Sopranos was on top. The Sopranos DVD was on top. So back in the day, when I used to live in a story in Brooklyn, people would leave on the sidewalk a cardboard box of books, CDs, DVDs. And that was peak life for me. You would stop. You would look, what have they got over here? I'm glad I never got into collecting DVDs. I was obviously one of those maniacs. I would go to Blockbuster, get two for 10. Or was it two for 20? I spent all my money on DVDs. Not a great investment, but good memories.

41:23Ben Carlson:What's your retail flow chart?

41:24Michael Batnick:All right, check this out. You mentioned global breadth, global stock markets. The number of markets overseas near a 52-week high, I'm sorry, more than 2 % above their one-year peak, has jumped to its highest level since 2004. So amidst all of this, global markets are on fire.

41:45Ben Carlson:But that's what I was asking you. So that's why I say, I don't know, man.

41:48Michael Batnick:I know I'm flopping around like a dead fish. But it is hard to get too bearish when the global markets are like this.

42:00Ben Carlson:That's what, I mean, the pushback would be, listen, this is the peak. Because I'm thinking, the S &P is almost at all-time highs. Global stock markets are breaking out to all-time highs. The economy is still growing. Interest rates are falling. Inflation is relatively benign. And the unemployment rate is 4.3%. And the 4.3 % unemployment rate. It hasn't happened yet. So people say, no, no, no, no. This is the best before the worst comes. That's the pushback. I don't know. I go back to the Charlie Munger line. Like, if you're not confused, you're not paying attention right now.

42:33Michael Batnick:Software stocks are bouncing pretty hard at the open. salesforce is up 5%. Who knows? Let's see what happens at the close. This probably could easily fizzle.

42:43Ben Carlson:Hit the sell button.

42:46Michael Batnick:I'm not selling. I'll sell when I'm down 30 % or up 2%. That's it. There's no between. I've got great risk reward here. Okay. This is a good one. Exchange traded call options are slowing dramatically. From retail. Yeah, people are scared.

43:12Ben Carlson:Oh, okay. So the bullishness, it really, really peaked towards the end of last year. And now people are pulling back. Okay, that's interesting.

43:19Michael Batnick:All right, here's a great chart showing why investing is so much fun and so exciting and so frustrating and so maddening and probably a great chart on why you should just index, but I can't help myself. I mean, I do index. Who am I kidding? but why I also love the game. So Netflix, clearly a global winner, right? It won streaming. Now, of course, it didn't win. It's not the only winner. YouTube, we get it. But Netflix beat Disney. It beat Paramount. It beat Prime. It beat Max. Like, it won.

44:01Ben Carlson:It's not even close.

44:03Michael Batnick:No, it won. The battle in the war is over and Netflix is the winner.

44:08Ben Carlson:Right.

44:08Michael Batnick:Okay. And if I gave you the financials of Netflix and the free cash flow, you'd be like, wow. Five years ago, I would have loved to buy that stock. Netflix has underperformed. Not just the S &P.

44:29Netflix has underperformed, let's say, the average stock over the last five years.

44:33Michael Batnick:Netflix has underperformed the equal weight more specifically. Netflix, the biggest winner of one of the biggest categories of the decade, has underperformed the equal weight S &P over the last five years. Why would you ever buy another individual stock ever again? I say to myself as I'm buying another individual stock at the open.

44:53Ben Carlson:Do you know how much less brain damage I have now that I don't have to like check my app every day to see how my individual stocks are doing? It's such a freeing feeling. I know. Why am I doing this? Why? It's fun. It's a game. It's like it's entertaining, right? It's it's part of the game All right, so I was thinking all the crazy stuff we've thought about this is like in the when you hear the bad stuff excuse me When it doesn't happen you just kind of move on remember how how long we debated hard landing versus soft landing That was the number one debate in finance

45:24Michael Batnick:But then why and then it just went away

45:27Ben Carlson:Right, and that's that's what happens with a lot of this stuff All right. What does Mike Zicardi have for us this week? Okay.

45:37Michael Batnick:Let's talk about something fun. Let's talk about how AI is impacting the labor market. All right. Average monthly job growth in AI-affected industries over the last three months. So in here is management, consulting, graphic design, office administration, telephones, call centers, computer systems, and a bunch of others. And it's just negative.

45:58Ben Carlson:This is not AI related, though. The reason this happened is because look at how many more jobs they put on in 2021 and 2022. They overhired.

46:07Michael Batnick:True.

46:07Ben Carlson:So there's still not an AI story yet.

46:09Michael Batnick:Okay. Warren Pius has another chart showing AI exposed versus non-AI exposed payrolls. And I don't know what's exactly in here, but I trust Warren's intuition, not intuition, skills, research skills here. And these charts are diverging bigly. This is payrolls. Okay. All right. I mean, there's no doubt about it that this is a thing, right? Like companies are not going to be hiring at the same level as they were.

46:36Ben Carlson:I agree. I actually think that if we're going to have this mass unemployment, it's not going to happen on its own. It's going to be, there's going to be fewer job openings. And it would be in the recession scenario. That would be when this really drives into hyper gear, right? Because in recession, people lose their jobs and then they don't get them back. That would be the fear for me. Is that it, that's, I don't think companies are just going to rip the bandit off and just do mass layoffs outside of a recession.

47:01Michael Batnick:You know, it's not, American Express is not bouncing today. That's interesting. Let's see what else is going on. Are the asset managers bouncing? A little bit.

47:12Ben Carlson:All right. So I thought this was interesting. I think this was Goldman Sachs via Samuro at his sub stack. This is interesting. So in maybe Weiss, a lot of this is just really feels like it's overdone. One nugget buried in the January jobs report was a notable drop in tech employment over the past few months. And the recent disruption in software stocks could foreshadow further pressure down the road. But it is worth keeping in mind that tech employment accounts for only 2.3 % of overall payrolls and software publishing for just 0.4%. So as big as tech is in the stock market, as far as the economy goes in the labor market, it's still a tiny, tiny piece of the labor market.

47:47Ben Carlson:Because guess what? You don't have to hire those money people in tech. We've talked about this. That's one of the reasons it's so profitable and a big profit margin. So just because you're seeing a bunch of stuff where people potentially losing their jobs or laid off, that doesn't mean that it's going to impact the entire labor force yet.

48:03Michael Batnick:All right. Let me read you some quotes about the economy from the transcript. This is from Thomas Pederfee, CEO of Interactive Brokers. There are two economies in this country. If you listen to the BLS, the economy is doing great. If you listen to the big firms that are making huge capital investments, the economy is doing great. If you listen to the newspapers and the television, the economy is doing extremely poorly. So I don't know quite how to interpret that, but I believe the economy is doing great and it will continue to do great, okay?

48:27Ben Carlson:I don't interpret that. The media is negative all the time now. Right. Everything is bad. That's how you interpret that. Been like that the entire decade for the economy. The economy hasn't changed at all, really. In the past, I don't know, three years? You're right. You're right. The view of the economy has. Nothing has changed in the economy.

48:46Michael Batnick:Walmart, CEO. Across our customer base, spending continues to be resilient. In the US, we see the customer's choiceful in their spending, okay? Capital One, the one word I would use to describe the consumer these days and everything we observe at Capital One is the word stable. Let's just start with a story from a macro point of view, things despite all the noise in the economy, things are pretty stable. And lastly, this is my favorite one from Truist Financial CEO. I'm sorry, senior EVP. Consumers' beliefs don't match their behaviors. And my dad used to tell me a long time ago, Watch what people do more than what they say, and you'll learn a lot more.

49:24Michael Batnick:So they're giving surveys or taking surveys that sentiment may not be as high as we would hope that it would be, but what they're actually doing is totally different. They're spending, they're active, and so that's something that we're seeing.

49:36Ben Carlson:You could have said this every year. These quotes could have been read every year since 2022, and it would have been true. It's been the same thing the whole time, this whole economic cycle. It's the same thing. People say they're bearish and they keep spending money, and they don't act bearish. All right, let's talk about some funny AI stories. A$7 billion Japanese toilet company just discovered its ceramics tool can be used to make bleeding edge AI chips. That's a$60 billion market. Their stock is up 60 % on the news. That's a funny story, right? Okay, Mike Isaac, Amazon's internal AI coding assistant decided the engineer's existing code was inadequate, so the bot deleted it to start from scratch.

50:15Ben Carlson:That resulted in taking down a part of AWS for 13 hours and it was not the first time it happened. And everyone and their brother pointed out this actually was a plot on Silicon Valley, the show. Like the AI bot decided to like just delete stuff.

50:29Michael Batnick:I rewatched the first season in the last five years. That show, particularly the early, was so funny. Mike Judge is a genius.

50:37Ben Carlson:He is such a genius and ahead of his time with Office Space and Idiocracy and Silicon Valley. But don't you think that's going to be a savior for, I keep saying this, stop, like AI is going to start making mistakes. Of course it is. It's going to do something. And that's when people go, okay, I'm going back in the loving arms of Salesforce or whoever. Like I can't, I need someone to blame if there's a mistake. I can't have the vibe coding do a mistake for me. The push and pull is humans always figure it out, right?

51:08Michael Batnick:We've always adopted new technologies and like, yeah, but this technology is different. and...

51:15Ben Carlson:Michael, people, there literally used to be a job where someone would walk around and light gas lights before electricity was around. People would knock on people's windows because alarm clocks didn't exist. There used to be telephone operators. I know, I know. There used to be elevator operators. These things all used to exist and they don't exist anymore.

51:30Michael Batnick:Yeah, we all know all of this. To me, why that's like sort of erroneous is because none of the inventions and the new technologies that deplace specific industries like the blacksmith, for example, it wasn't like a technology that applied, that could be applied to every single sector and industry and job. Like that's the obvious difference.

51:54Ben Carlson:But it can't, you're not, you're not going to displace a plumber. The person drywalling is not going to be displaced. I know people - The reason this is so scary is because it's coming for white collar workers. Because for blue collar workers, that took place over 30 or 40 years. And you're saying this is happening faster. That's why it's so scary.

52:10Michael Batnick:Okay, this is hilarious. this. Charter has a chart showing the free cash flow that companies burned on their way to profitability. They're looking at Tesla and Netflix and Uber. And just for context, Netflix, which was spending, I remember when they were spending$7 billion on content and people were like up in arms, like this is irresponsible. It's crazy. And it was. It's easy to say now that, you know, they won, but it really did seem nuts at the time how much money they were spending on content and how much free cash flow they were burning. So Netflix burned$11 billion. Tesla building electric vehicles burned$9 billion.

52:44Michael Batnick:And Uber building out this three-sided network burned$18 billion. Open AI is telling investors that I think through 2030, they're planning on burning$218 billion.

52:56Ben Carlson:So if you could right now in their public, short Open AI and go long anthropic, would you do it?

53:03Michael Batnick:No, because Open AI would be down 70 % and cloud would be up 40%. But wait a minute.

53:09Ben Carlson:Which corporation has the biggest partnership with OpenAI?

53:12Michael Batnick:Microsoft.

53:13Ben Carlson:What stock did you just buy? All right.

53:18Michael Batnick:I just sold it.

53:19Ben Carlson:All right. Going down to the ship. All right. So Bitcoin is still just a software stock. The charts line up perfectly. And I know the analog charts aren't always right. This is pretty right. It's amazing. It's kind of amazing. It's just a software stock.

53:37Michael Batnick:But I guess it makes sense. Maybe we're retrofitting the narrative, but it is software, I guess. It's code, right?

53:44Ben Carlson:I just don't know how this happened. With all the things that Bitcoin was supposed to be, how it ended up just being like a software stock. It's really surprising to me. With all the stuff that we read about it over the years and all the podcasts and all the think pieces, and then it's just, it's a risk on, risk off software stock. Maybe that'll change. All right, crazy, let's talk about real estate. Let's talk about some real stuff. Crazy chart from Mike Simon. But by the way, hold on.

54:10Michael Batnick:Just one last thing. I probably said this already. The everybody back in the boat can happen really fast.

54:17Ben Carlson:Oh, yeah. Oh, I agree. Yes. Like, well, the deep seek thing lasted a weekend, remember? This is longer than that, obviously.

54:25Michael Batnick:It sounds implausible now, given how, you know, whatever. Because it's not going to end, right? The threat is not going away. It's just a matter of how investors interpret and digest it and react to it. Which is, you know.

54:37Ben Carlson:All right, Mike Simonson says, this just blows me away. He has inventory change from 2019 to 2026 by state. So for example, Michigan, the inventory is down 40 % almost. New York is more than that. Texas, inventory is up 42%. Florida is higher. A lot of places in the Southeast are higher. This is showing that like the bifurcation we're seeing in the housing market. Like it's always been kind of a local market, but I feel like for a few years there, it was what happened nationally impacted the housing market. Now it's totally changing, and the location matters more than anything.

55:10Michael Batnick:It's like a buyer's market, but there's no buyers. People still don't want to buy. There's a house on my street on the water listed for$1.2 million. And it sounds like an absurd price, and it is. It's not a big house. But this would have gone in two seconds.

55:32Ben Carlson:Right, because it's on the water.

55:33Michael Batnick:And I don't know. I mean, there's just, there's no buyers.

55:37Ben Carlson:Yeah. Look at this. In Illinois, inventory down 70%.

55:42Michael Batnick:Did buyers dry up? Like, if you wanted to buy a house, you would have bought a house? That doesn't make sense because there's demographics-wise. Or how about this? If you wanted to buy a house and you could have afforded to buy a house, you already did?

55:53Ben Carlson:Yeah. I mean, there's still activity, but it's just, it's certainly slowed. Maybe the risk appetite is bad. It's slowed.

56:01Michael Batnick:Pending home sales hit like an all-time low. Did you see that chart?

56:05Ben Carlson:Modern, yeah. Not great.

56:09Michael Batnick:The company Pool. Pool. The Tickers Pool. What's the name of that company? Pool something. They Pool Corporation. Sales. They just reported last week. Sales are down like 1%, I think, year over year.

56:24Ben Carlson:Well, think about how many pools were pulled forward during the pandemic. That would have happened anyway. Yeah.

56:29Michael Batnick:All right. We'll do Blue Owl real quick. If you want to hear a deep dive, I spoke to Brian Moriarty yesterday on the Talking Wealth podcast about what happened here. To me, this is not one story. It's a lot of things happening. I think this was a PR mega, mega, mega fail, like mega fail. So the story with these BDCs, these business development corporations, think publicly traded, private credit, or not even publicly traded. Some are listed. Some are not listed. It's private credit. But these things first started to go sideways to south when interest rates peaked and started to come down because these are floating rate loans and they worked really, really well in 2022 because it kept up with increasing interest rates.

57:12Michael Batnick:It didn't destroy the price and there was really very little defaults. So in 2022, this thing was a home run, especially compared to bonds that were down 15 % and then money flooded in. And there was a lot of questions like, wait a minute, how are you putting the money to work so fast? Like, are there really this many decent loans? What are the underwriting standards look like? And of course, investors, like this is what we were asking over the last couple of years, like, how would we know? I don't know what you guys are doing. I'm not reading the sub docs. Even if I wasn't, I wouldn't, this is not my language.

57:40Michael Batnick:So that was the first threat. And then there was the tricolor first brands, which ironically wasn't even a private credit thing anyway, but it got lumped in with them. And I was able to like hand wave away some of the cockroach type stuff. You can't hand wave away the software exposure. Bcred just put out a thing, Blackstone, 26 % of their fund is private, is software. Like this is, this is a thing. So it's just like the triple whammy of like bad shit.

58:04Ben Carlson:And then potential deflation is bad for these funds too.

58:07Michael Batnick:That's not great. Right.

58:09Ben Carlson:So I listened to your talk with Brian. I thought the best point you made was that isn't it weird that this stuff is happening when there's no credit problems? Like the high yield spread spreads are still very tight. Yeah.

58:20Michael Batnick:There's no, there's no stress yet in the portfolios.

58:22Ben Carlson:Yeah. There's no stress in the economy. There's no stress in, in spreads. and this stuff is already happening.

58:26Michael Batnick:Blue Owl stock is down 60%. So I actually listened. I got bumped. I had the phone call to take, but they did a call yesterday at 1130. Blue Owl did. And they just seem to be just deflecting and not taking responsibility and acting like there's nothing to see here. It's just bizarre. And yes, I'm sure that the article in the FT didn't help, but everything's not going great. The stock is down 60%, okay? So there's obviously like some shit happening that investors don't care for.

58:56Ben Carlson:There's no way the CEO survives this. Knowing nothing else about the company,

58:58Michael Batnick:there's no way that they've handled this is awful. So I didn't even know, and I follow this pretty closely, okay? Anytime there's an article about this, I'm all over it. I'm reading the sub stacks. Like I'm all over this story. I had no idea that OBDC2, the one that is in the headlines now, that air quote, gated redemptions, that was always supposed to be a finite fund. that always had a 10-year life. Did you know that? No. Why did it? Why? How did I not know that? That's a huge part.

59:33Ben Carlson:I'm not a big, I'm not a BDC expert over here.

59:36Michael Batnick:No, but how did I not know that? That's a big part of the story that I only just found out about. Anyway, this is the part.

59:42Ben Carlson:You're a private credit tourist.

59:43Michael Batnick:I guess so. I guess so. No, yes, absolutely. I am. Here's the part that, I spoke about this with Josh maybe six months ago. You listen to the Blue Owl earnings call and you listen to Mark Rowan at Apollo and Mark Rowan is being very candid about the opportunities and the environment. And Mark Lipschultz is just like, I don't know what he say. He said, facts matter, or you got to look at the facts. Facts do matter like eight times on the call. So he was asked about the stock reaction. And he said, the end of the day, stories don't drive results. Results drive results. Oh yeah? And as you can see, we have delivered on every one of our products that absolutely top level performance.

1:00:33Michael Batnick:Thinking about what we've run at an eight basis point net loss rate. And so these facts do matter. What else did he say? I mean, it was just a lot. He's like, we don't see red flags or yellow flags. We see green flags. It's like, bro, your stock is getting murdered. There are redemption's out the ass. Like it's not all misinformation now. Fine. Maybe some of it, the media has taken too far, but just if I'm a shareholder, I'm losing my mind. Listen to this guy act like nothing's going on. Yeah.

1:01:07Ben Carlson:That's not great.

1:01:08Michael Batnick:And even on the call yesterday that I was on.

1:01:10Ben Carlson:So you've been, you've been very bullish on the wealth channel getting into this stuff. Do You think this totally slows the pace of this? Yes. Right?

1:01:20Michael Batnick:Of course it does. Of course it does. Now, the good news is you're not going to see like, is private credit going to take down the economy? It's like, listen, there's no rush for the exits. That's sort of part of the point, is that there was an asset liability mismatch here. These loans were illiquid, and investors all want their money back. Like, this is not a great scenario. Do I think that private credit, the asset class is dead? No, of course not. But I think that like, well, Blue Owl's done. They will not raise another dollar in these private credit funds.

1:01:46Ben Carlson:How about this? It's probably better that this stuff happened now before the spreads blow out and a recessionary environment hits and people kind of understand, okay, this is how, because it's, I'm guessing, with my experience with like credit hedge funds that have shut down in the past that I was involved with in my prior life, it's going to take years to get all these assets back. Years, not months, years. And you're going to realize like, oh my God, oh, this is what we own.

1:02:11Michael Batnick:Okay, so here's what they did. that even when they announced this, I was like, what are you doing? This is so stupid. So they said, okay, you want investors to keep asking for 5 % of their money back? We're going to give you 30 % of your money back. Take that. How do you like that? See, we're good. We have 30 and we're going to sell for 99.7 cents on the dollar. They said yesterday that they were completely surprised by the market's reaction. They thought that would be interpreted positively. and anybody with a brain or common sense, I'm sure these guys know math very well, could have seen, hey, wait a minute.

1:02:47Michael Batnick:There's so much smoke. You would think that the market will take this at face value, nothing to see, everything's fine. See, we just did$1.6 billion with the sales. By the way, you asked like how our flow is going to do. So Blackstone, for example, monthly inflows, this is from the Wall Street Journal, monthly inflows into the largest fund managed by Blackstone dropped to$600 million in January from$1.1 billion in November. So still positive in January. I would be very surprised if they were positive in February, but who knows? Anyway, Blackstone, yeah. These stocks got murdered yesterday. Murdered.

1:03:19Michael Batnick:There's one subsect that I follow called Covenant Light that writes about this stuff. And he said, using – this is a bit mathy, so just bear with me for a second. Using OBDCs, that's the publicly traded one. Using their 1.19 debt-to-equity leverage, a 23 % discount implies a 10.5 % gross markdown on the portfolio. Okay? He said, we can further break this down to see what it implies about future defaults. If you assume a 50 % loss given default, a 10.5 % portfolio loss implies about 21 % cumulative defaults. Spread over time, that works out to roughly 11 % annualized defaults over two years, 7.5 % over three years annualized at 4.5 % up for five years.

1:04:01For context, leveraged loan defaults in

1:04:04Michael Batnick:the worst stretch of the GFC ran at roughly the mid single digits annualized. So 6 % from 2008 to 2010. So in other words, here's the TLDR. If you take OBDC's discount literally as a pure credit loss forecast, the market is pricing something like a GFC level or worse. So why am I like even moderately comfortable catching some of these falling knives, there is a lot of fear out there. And yes, of course, it can get worse. There is no valuation support. It's not going to stop. I get all of that. I get all of that. I might lose money on these trades. I probably will. Let's be honest. But there is blood in the streets.

1:04:47Ben Carlson:You've diversified your blood too.

1:04:49Michael Batnick:Very bloody.

1:04:50Ben Carlson:Very bloody.

1:04:52Michael Batnick:All right. I want to talk about some of the prediction market stuff from Mike Selig, who's the head of the CFTC, but we're going to save this to next week because we're already going very long here. All right, let's talk about movies.

1:05:07Ben Carlson:All right, so Mike Zaccardi gave us a chart that shows movies are getting longer. So it shows the average runtime of movies going back to 1980. And in the 1980s, 1990s even, it was right around 100 minutes, a little over 100 minutes. That's perfect. Which is perfect. Now, we're up at 115, 120 minutes. Movies should not be getting longer. There's a lot of movies I watch these days where I go, man, that would have been a great movie if it was 90 minutes instead of two hours and 20 minutes.

1:05:37Michael Batnick:I just clowned myself twice. I'm like, you know what? Think back to the 90s movies that were the perfect runtime. Go to The Rock. Go to Con Air. Whoops. Con Air runtime. Two hours, three minutes. Face-Off, two hours, 19 minutes. The Rock, two hours, 15 minutes. All right, maybe not Nicolas Cage movies. What about Demolition Man? You're right.

1:05:58Ben Carlson:It was really like the comedy. Demolition Man, hour 55.

1:06:01Michael Batnick:That's under two hours. You know what needs to be more than two hours? Shawshank Redemption. Right. And that's about it.

1:06:08Ben Carlson:Yeah, but the comedies and the rom-coms and like that kind of stuff, that can be an hour and a half. You don't need longer movies.

1:06:16Michael Batnick:I took Robert to see Wuthering Heights. Yeah? Speaking of long movies. So this Emily Bronte, she did Salt Burn and what was the other one?

1:06:30Ben Carlson:I never subject myself to Salt Burn.

1:06:34Michael Batnick:Not for you. And Promising Young Woman. You saw that one, right? Sounds familiar. That was with Carey Mulligan?

1:06:40Ben Carlson:Oh, yes. Yes. Okay.

1:06:42Michael Batnick:So Wuthering Heights had a lot of highly anticipated Margot Robbie, Jacob Elordi. It's a romantic movie. It's a rom-com without the com. Way too long. No nudity. How do you have sex scenes with these two people with clothes on? There's like a lot of sex with cloth. They're wearing cloth or whatever they were wearing.

1:07:06Ben Carlson:People used to wear a lot more layers back then.

1:07:08Michael Batnick:This movie, this was like the zebra to the donkey meme for me. I really enjoyed like the first, I really enjoyed. I tolerated the first two acts. because there was some stuff that I, and then to me, the last act completely fell off the rails. But this was two hours and 20 minutes. I took Robin to it, and the person next to her, her entire tub of popcorn fell into Robin's pocketbook.

1:07:32Ben Carlson:So are you watching Love Story with Robin? I mean, you have to. It's a New York, it's the JFK Jr. story with Carolyn Bissette. It's on Hulu. It's actually pretty good.

1:07:42Michael Batnick:I think Robin might be watching it. She spoke about it. Should I watch it?

1:07:45Ben Carlson:I'm watching it with Courtney, and it's, yes. I mean, as a New York person, too. It's all about New York, essentially. And the guy looks a lot like JFK Jr. They did a really good job getting the guy who looks like him.

1:07:56Michael Batnick:All right. Anyway, I reject. I don't want to sit in the out. So once it goes, like, it felt just the last 20 minutes, unless it's like a banger, it just feels way too long. I don't want to sit in the movie for two hours and 20 minutes ever. I agree. All right. Let's wrap it up. Oh, I think I'm having an impact on the culture. or maybe I just, maybe, maybe I just identified it. I don't want to act like I invented the question mark, but in Miami, Ben and I did a bit about things people say in group settings, when you meet somebody, this guy, there he is, here comes trouble, that sort of thing. Like, I feel like that's taken on.

1:08:34Michael Batnick:I saw you, we saw the Instagram meme of that.

1:08:37Ben Carlson:Oh yes. Right.

1:08:39Michael Batnick:So we got a great email. Don't know whether this is an addition to the this guy lexicon or just a variation. I was sitting at Starbucks next to two well-groomed guys in their early 30s. They were talking about buying a local business. Another 30-something prances by my table in sneaker shoes, slim fit chinos, and a three-quarter length trench coat because it was raining. He stops, opens his arms, and says, look at these guys. I never thought about the plural. The three of them bro hugged and I almost shouted, there he is. That's pretty good. That's a thing. Great email, right?

1:09:19Ben Carlson:Yep. Okay, recommendations besides Wuthering Heights. So I was a Game of Thrones person from the very first episode. I watched it. I was always a little confused, but I was very entertained. And then when the next Game of Thrones show, The Dragon, when I came out, I was like, do I need another Game of Thrones show? Like how many seasons was that? But I watched it and I liked it. I love that show. Do you watch it? Yeah, so I watch it. I like them both. But it's just like, and then I saw a preview for another new show and I'm like, do I really need another one? And I didn't watch it and you said a couple weeks, hey, give it a try.

1:09:47Ben Carlson:So we binged it and we watched the whole thing in the last week and the finale was on this week too. Night of the Seven Kingdoms. It's my favorite one of the three. It's not the best. I thought you would love it. It's not the best. It's my favorite because they were half hour episodes. It had way more humor to it. It had like a heart and it was just, I could actually understand what was going on. And it's not the best. The other ones are by far better. There's better actors. There's better characters. This was a little bit more fun. Yeah, it was more fun. And it was my favorite versus the best.

1:10:17Ben Carlson:I really enjoyed it. I can't believe I liked it so much.

1:10:19Michael Batnick:Can I ask you a question? So I've said this a million times. I stopped watching Game of Thrones in season three because I remember just looking up one time and not knowing a single character. And I was like, why am I watching this? I have no idea what's going on. I have not a goddamn clue what's happening. For the season finale, I... Shame on me. I was on my phone the entire episode, and then the episode just ended. I'm like, wait, what happened? What did I miss? I think I missed the entire... The funny thing is, I got to lose. What it's about my brain in particular with this type of show that I just...

1:10:58Michael Batnick:And I really enjoyed the first five shows because there was only six episodes. For some reason, my brain has a blockage with this type of show.

1:11:06Ben Carlson:It was a lot. I was thinking after we finished this, I don't remember how the Game of Thrones show ended. I remember the finale. I remember kind of being underwhelmed, but I don't remember who won. All right, so I finally, I've been working through my action movies. I showed, because George is such a big action fan, we watched Terminator 2 this weekend for the first time. And man, I mean, I told him, like the two greatest action movies of all time are Terminator 2 and Die Hard, as far as I'm concerned.

1:11:30Michael Batnick:Terminator 2 is at the top of the mountain. You can't make a better action movie. Cannot.

1:11:34Ben Carlson:Will not. Cannot. And Kate kind of strolled in halfway through, and she's like, what this? And she just sat transfixed to the rest of the movie. And it really is, and the funny thing is, is you can tell so much of it is just actually done by real people and stunts, because you can tell the person on the motorcycle is not really Arnold. It's a guy with a wig, you know? When he lands, it's slow motion. But George just kept saying, he kept saying, why does this look so real? Because it's not AI. Like, all the stunts are actually done. He's like, why does this look so real? He kept saying that. And I think they liked it so much, because it wasn't just this AI computer-driven garbage.

1:12:05Ben Carlson:And man, that was a movie. Just, I still remember. The thing is, to this day, it came out in 1991. It still holds up. You don't look at it and go, oh man, that doesn't hold up. It still holds up.

1:12:19Michael Batnick:I wish Kobe would like watch that. So Kobe's still like a baby. Like he still, like he watches Diary of a Wimpy Kid all the time. He just hasn't graduated yet. I obviously will to like grown-up movies. Even like moderate, like Ace Ventura, like I don't think he would sit through.

1:12:34Ben Carlson:Oh, yeah, that's my daughter. She still likes the movie he gets up to. So I decided to watch a movie from 2013 to figure out how the future's going to play out. So I watched her again, which is a really good movie. We got Joaquin Phoenix. It's amazing how much stuff that show really, but here's what's a great optimistic take on AI. Everyone had their own AI system, you know, and Joaquin Phoenix wrote greeting cards to people and he lived in a sweet apartment. So I think everyone's going to be fine. right but he chris pratt was in that movie as kind of like the schlubby friend and he was like the schlubby guy in parks and rec too he weighed like 300 pounds has there ever been a better glow up than him going from like this schlubby dude who was like the sidekick and funny to like the

1:13:17Michael Batnick:leading man chiseled you know i i completely i have no memory of him being in that movie

1:13:22Ben Carlson:yeah he he's like the he's like the friend and he's kind of forgettable in it it's it's crazy what happened to him. All right, I guess it's on the Rewatchables this week, but I watched Crazy Stupid Love again on Netflix just because it was, it kept feeding it to me on the algorithm. I said, all right, fine, I'm going to watch it again. It's the best rom-com cast ever. And I don't think it's even, that's even, like, you can even argue it. Ryan Gosling, Emma Stone, Steve Carell, Julianne Moore, Marissa Tomei, and Kevin Bacon. Plus, like, three of that guys. That's the best rom-com cast. It's the most, like...

1:13:52Ben Carlson:There he is. Right? Anyway. I love that. Ryan Gosling is so good in that movie.

1:13:58Michael Batnick:I only recently saw that for the first time, maybe six months ago. Phenomenal.

1:14:01Ben Carlson:When all the stories come together at the end, that one scene is just, the movie came out in 2011. There's no more spoilers for something that old. All right, what do you got?

1:14:11Michael Batnick:All right, not to be annoying, but industry is so good. And I know like nobody watches it. I think I'm the only person that does. It is, season four is the best season. It's easily, for me, my favorite show that I feel like I'm on an island. I feel like nobody else watches it.

1:14:29Ben Carlson:Okay, it was so depraved. Here's my problem with it. I never believed that any of the lead characters were going to be in those jobs. It was too unbelievable for me to grasp. It was unrealistic.

1:14:40Michael Batnick:So the first two seasons, they're like trainees in the bank, and then I think they leave in season three, and season four is completely outside of it. Okay. Season four is so good. it's unbelievable and it is it is completely depraved they do not make shows like that see that's the problem

1:14:58Ben Carlson:with me is that I feel like the depravity like that was the stuff with like the show Girls I feel like they did it just to like really push buttons and it's like it didn't help with the story at all it was it was unnecessary it was gratuitous

1:15:09Michael Batnick:don't make me say the Patch Adams line or Patch is a Houlihan Patch is a Houlihan Patch Adams that was Robin Williams I can't believe

1:15:17Ben Carlson:you're going to quote Patch Adams

1:15:19Michael Batnick:Patch Adams I did like that. I cried in that movie. With like the clown nose on? Yeah. Rest in peace, Robin Williams. Okay. All right. And of course, I watched Primate over the weekend. Robin was playing Mahjong with her friends. I fired a Primate, which is about a chimpanzee that kills its entire family.

1:15:35Ben Carlson:Ah, how was that one?

1:15:36Michael Batnick:Great stuff.

1:15:36Ben Carlson:Really. Is Mahjong making a thing? Because my wife is playing it now too. Is it like a thing? Yeah.

1:15:42Michael Batnick:Yeah, yeah. I thought it was like only for older women. Although I guess our wives are getting older. They're not... Not chicks anymore. Little chicks. I wasn't using the misogynistic. Is that misogynistic? I don't know. Either way. They're not baby birds is what I was trying to say. Don't be mad at me.

1:16:01Ben Carlson:All right. How are you feeling? Are you feeling better now after this?

1:16:04Michael Batnick:What's the stock market doing? No, listen. I'll snap out of it. Maybe I won't.

1:16:11Ben Carlson:I'm still optimistic.

1:16:13Michael Batnick:You know the scene in The Wedding Singer where the old guy at the bar says to Adam Sandler, I just need somebody to hug me and tell me everything's going to be okay. That's you. I feel like that guy.

1:16:29Ben Carlson:Human beings have survived and made it through worse than this. That's what I'm choosing to believe. We're a dynamic species. We're going to figure it out.

1:16:39Michael Batnick:We've survived worse. Eh, it's true.

1:16:42Ben Carlson:All right.

1:16:45Michael Batnick:all right it feels like uh so much has happened in between these episodes right i feel like i feel like we could do like two a week it feels like pandemic times that was yeah you burned out pretty quickly though i mean no i didn't we did it for like a year and a half was it that long okay

1:16:59Ben Carlson:i thought we were done pretty quick i don't remember i the pandemic is like when you have kids the first three months you black out that's standing with pandemic for me i like nothing

1:17:08Michael Batnick:the only thing i remember from the pandemic other than drinking every night which is maybe why i don't remember a lot is Tiger King and The Last Dance.

1:17:17Ben Carlson:Okay. The Last Dance did get us through. All right. Email us, animalspiritsatthecompoundnews.com. What do we say? Personal emails, personal responses. Thanks to the production team filling in for Duncan, who's in Japan this week. Thanks to Daniel and everyone else. All right. See you next time.

1:17:41Go, girl.