Is Debt Fueling the Rally? (EP. 471)

12:25Ben Carlson:I said, what's going on here? Why? What's going on with the stocks in the Russell 2000? Breadth, not concentration. 67 % of the names are up year to date. Meeting return is over 15%. 900 stocks in the Russell 2000 are up 20 % or more this year. So this is not just a handful of names. And obviously with an index that big. So this is a big time widening out of the market. Again, I think pretty good news for bull market. I would agree. I would agree. All right. Look at this chart from Luke Kawa. He did this last week. The day Apple announced in the morning on Bloomberg, there was a story saying, Apple's raising the prices of everything.

13:08Ben Carlson:Macs, iPads, iPhones, because memory is too expensive now.

13:13Michael Batnick:I'm shocked that Apple fell 6 % on the day. Because of that? Yeah. It's a big-ass move. Why? I would have thought that people think that the demand for these products is inelastic and who cares what the prices? It's not going to impact sales.

13:28Ben Carlson:Well, doesn't it kind of show that maybe Apple doesn't have as much power as people thought? I don't know. So he shows on this day, last week, the memory producers, SanDisk and Western Digital and SK Hynix and Samsung, gained almost$500 billion in market cap. the same day Apple, Microsoft, Meta, Amazon, and Google lost$500 billion in microcap. It looks like a very clean transfer. This is a beautiful chart that he created here.

13:54Michael Batnick:It's a great chart. Hold on, a not so subtle. I mean, this is not a footnote to that story. That was the same day that Micron reported earnings.

14:05Ben Carlson:Right, Micron was up 16%. It would have been up 16 % regardless of the Apple announcement. But why did Micron have such good earnings? because of the CapEx from the hyperscalers. My question is, how long can they let this keep happening? Who's they? The hyperscalers saying, we're going to lose and you're going to win. And we're basically powering your win.

14:25Michael Batnick:This is like the Porter's Five Forces type stuff. These suppliers have all of the pricing power right now. What's Apple going to do? Make their own memory stuff?

14:36Ben Carlson:Slow their CapEx eventually. Are they going to all live with 30 % declines or 40 % declines? Apple's not even the one spending the money. I know. So this other Tracy Allaway chart went viral from Nomura, showing that the hyperscaler free cash flow projections is essentially going from, I don't know, $700 billion to effectively zero over the next 12 months. And this is Amazon, Microsoft, Google, Meta, and Oracle. I just think we're getting to the point where we're testing like the metal of these, the intestinal fortitude of these CEOs to stick with this. They keep saying, no, we're going to, we don't care.

15:11Ben Carlson:the bigger risk is backing down. I just think it's really interesting. If we're going to power these memory producers higher and our stock price is going to fall, how long can they handle that for? From a human perspective, don't you think the employees start going, hey, what, are stocks down 40 %? This stinks. Now, on the other hand, you being a stock guy, what would you rather have right now? If you're buying stocks today for the next, call it, three years, Would you rather own Meta, Netflix, and Microsoft or Sandisk Western Digital and Micron? What would you buy today?

15:46Michael Batnick:It's not even close. The hyperscalers.

15:50Ben Carlson:That would be the way that I'm sure most people would answer.

15:54Michael Batnick:Micron's up 1 ,500 % in the last year and a half, justified. Microsoft has underperformed the S &P since 2019 and it's down 35 % from the highs. Yeah, this is not a hard question. Now, for the next three months, six months, yeah, probably the memory stocks.

16:06Ben Carlson:This is why owning a momentum portfolio is so hard. because the momentum answer would be no. You double down on these stocks that are continuing to go up. That's why it's hard to do. It's probably why it works too for at least time. I bought Microsoft yesterday. As a guy who keeps retiring from this. I bought Microsoft and Netflix. And I said, I'm going to close my eyes and look at it again in five years.

16:27Michael Batnick:We own Sandisk. We own a lot of these stocks in our Porterhouse Momentum Strategy.

16:33Ben Carlson:Yeah, Western Digital.

16:34Michael Batnick:And we bought Sandisk at like 300 bucks. and then a few months later, we bought more at 625 and I was like, what in the, what? But that's part of the reason why momentum works. It does what the humans can never. I would never do that. Are you kidding me? If I bought Sandus at 300, I'm selling it at 370 if I'm lucky.

16:51Ben Carlson:Right. That's why to me, I have to, a few people have asked questions about the strategy. Like, why do you do this if you're like a boglehead person? Like, I will never buy these stocks in my life. I need to have rules-based. As long as it's rules-based, I can stick with it better. Here's the thing. I would never be able to put my own money into these individual stocks and stick with them. But if it's a rules-based thing and it's a process-based and it's the factory you're investing in and not necessarily the companies that you like that to me is emotionally easier to invest in.

17:19Michael Batnick:Yeah, a hundred percent.

17:20Ben Carlson:Some people can handle the individual stocks. I can't.

17:22Michael Batnick:So I think that, I think that, uh, the market is acting very rationally as insane as it seems with the memory stocks. Microns earning since January 2025 are up 1 ,400%. The stock is up 1 ,400%. It's rational. The free cash flow projections for these hyperscalers go into zero. The company is getting re-rated and now traded a forward PE the same as the market. Rational. Everything is out.

17:51Ben Carlson:The idea when this started was these hyperscalers are spending money and they're just going to be the biggest monopoly in history. Yeah. And it's not working out like that. That is a surprising outcome.

18:01Michael Batnick:it's so awesome to see the narratives changing over the years because prior to the ai era the question was what can unseat google like there's not going to be another search engine yeah there's not going to be them google did they don't see themselves maybe but yes like we were thinking like, which one of these stocks would not be in the MAG-7? And in no world could we have foreseen a universe where their$300 billion worth of free cash flow goes to zero. Nobody could have predicted that. So here we are in 2026, where everything is outperforming the MAG-7. Look at this chart that Matt made. We're looking at small value, small growth, mid-growth, both mid-value, everything really, divided by the Mag7.

18:53Michael Batnick:And everything is outperforming it. To me, this is such a healthy bull market.

19:00Ben Carlson:This is an everything rally, ex-Mag7.

19:02Michael Batnick:And it's everything you want to see. So if you step aside from the circus, push the leverage conversation to the back burner for a second, and you say, well, what's rallying? Transports, industrials, small caps, regional banks. If you are purely a technician and you don't know anything about the fundamental story of what's happening, forget everything, just look inside the market, you would say, holy shit, is this bullish. Right. It's crazy. All right. We were on Derek Thompson's podcast. Yeah. Derek does a good job of synthesizing a lot of the stuff that we're talking about, the biggest stories.

19:46Ben Carlson:And then we talk about it and he holds our feet to the fire a little bit. And he said at the end, like, listen, stop doing the both sides. And what do you think right now? Is this a bubble? And we both had the same answer. We both said no.

20:00Michael Batnick:Here's why. I didn't say this to Derek, but I've said it before and I'll say it again. Can memory stocks fall 50 %? Yes. Will they? Yeah, probably. They probably will at some point in time. Will that have proven it's a bubble? No. The way that I think about a bubble is there is, it's a cocktail of things. You need to have all of these things. Speculation being the first obvious one. Is there speculation? Duh. Yes, of course there is. But to me, it's about the fundamental valuations. Like there has to be, that is the underpinning of a bubble in which the multiples that investors are putting on stocks, there is no universe in which the stocks can grow into the valuations.

20:50Michael Batnick:Like you roll the dice a thousand times and a thousand times they fall short. When NVIDIA is trading at 24 times forward earnings, is that expensive? Yeah, fine. I don't, whatever. But is it a bubble? Is the market in a bubble? Look what the market is doing to the hyperscalers. It's debubbling them. It's saying, no, we don't like this. We're going to re-rate you lower. So I think that we can get to a bubble. We can debate about whether we will enter a bubble. But are we in a bubble today that's going to burst and fall 80 % to take everything down with it? I don't really see it. Even though I'm not blind, I see a lot of nonsense.

21:28Ben Carlson:Cliff Asness's definition was, no reasonable future outcome can justify current prices. That's a bubble. I would think it would have to, like, could we see a situation?

21:35Michael Batnick:That's the dorky academic way of saying what I just said.

21:37Ben Carlson:It is. Yeah. Yes. But so my definition is, will the NASDAQ 100 fall 50 % or more? To me, that would prove this was a bubble. And I don't think that the market is going to allow that kind of buying opportunity with these stocks and this opportunity. That's why I think this is not a bubble.

21:52Michael Batnick:Will the NASDAQ 100 fall 50 %?

21:54Ben Carlson:Yes. I think if that happens, yes, this was a bubble. If the NASDAQ falls 30 % and we get a bear market, I don't think that constitutes a bubble. No. What about 40? 40s gray area I think it's gotta be 50 for it to be a really like all the bubbles that people are putting this in the same classes dot com the railroad all these things this has to be 50 % if that's gonna be in that class of bubble

22:16Michael Batnick:and 50 is like light like the dot com was 80 80 yeah

22:20Ben Carlson:yes

22:22Michael Batnick:so if it falls 80 % the world will look a lot different than it does today I just seeing I know

22:28Ben Carlson:I know you could say hey listen these earnings numbers are just they're going to go away because all it is is the hyperscalers taking all that free cash flow and it's going into earnings of other companies. I think that could be a fair argument if you wanted to make it.

22:44Michael Batnick:Yeah, but they're all saying the same thing. And I know they, I guess they can all change their mind together. But even on Micron's call, they said, we thought that this was going to go through the end of 2026. Now we see it going through the end of 2027. Right.

22:56Ben Carlson:Are they all wrong?

22:58Michael Batnick:Like, are these hyperscalers going to rug the entire stock market? I don't think so. I don't either.

23:07Ben Carlson:I'm just saying it could happen. I don't know. Anything could happen. Right. Okay, so remember the whole debasement idea and the end of the dollar? We talked about this Bloomberg story a little bit with Alex Morris. He's from FM Investments, he's going to come on soon. But Michael Semblis on his latest piece had all these charts. And it's funny because people keep saying that the dollar's ending and no one wants to invest in the U.S. anymore. And he's saying, look at all the government debt data. Places like China are worse than us. So if you think that the dollar is going away, give me a good, something that's going to step in.

23:39Ben Carlson:Guess what? It's not crypto. It's not the renminbi. It's not one of these other currencies. What else is going to replace the dollar if the dollar is going to fall from its status? Reserve status. Well, that's the thing. There's nothing. There's no replacement. He says it's 89 % of FX transaction volume right now. 89%. You may have your problems with the debt and the deficits in this country. I get it. It's just as bad everywhere else. That's the problem. Governments around the world are like the hyperscalers. They all went in this together this decade. Everyone increased their debt by an insane amount.

24:13Ben Carlson:This was the mic drop.

24:15Michael Batnick:This piece. Right?

24:19Ben Carlson:Sorry, it's not happening. You can scare people with all your debasement stuff and dollars and deficits, and this is the end of the world, and we're almost falling. It's a great story. It's not happening. Sorry. Try again next time. Oh, he had this really good chart in here too of how the U.S. is at the lower end of concentration by country. So the only stock markets that have lower concentration, their top 10 companies than the U.S. is Japan and India. Everywhere else has much higher concentration. Canada, the U.K., France, their stock markets are all more highly concentrated than the U.S. I think this whole concentration worry for the last really 10 years or so, it really started like 10 years ago.

25:00Ben Carlson:I wrote my first blog post in 2017 about people worried about stock market concentration. I really think it's been one of the dumbest worries about risks that we've had. This is just the way the stock market is.

25:12Michael Batnick:I understood the risk and the worry. I think that if you're still worried about it, you just have to – another happy – play the field as it lies. This is what it is. I forget where I pulled this chart, but I think this is from John authors, actually, Bloomberg. It's global, as we've said a million times. They show the average market cap of the top 20 stocks in the MSCI, all country world index. It's now 60 times bigger than the average stock of the remaining 2 ,500 stocks. And this doesn't look like a cyclical or a, this is like a structural change in the index, in the world, right? We all know the balance accrues to the winners.

25:55So I asked ChartKid to recreate something similar.

26:00Michael Batnick:For the past five years, we've been looking at the MAG7 as a percentage of the market cap. And by the way, I saw a chart. You know Goldman Sachs has a chart. MAG7 percentage of earnings, percentage of market cap. And of course, they've gotten up into the right together. The market cap has outstripped the earnings a little bit. That gap is now completely closed. So they're 38 whatever percent of the index and they're 38 % of the earnings. All right. Anyway, so if we zoom out, because now there are a lot of gigantic stocks. Micron is a trillion dollar stock. Broadcromb, there are a lot of gigantic stocks.

26:36Michael Batnick:It's no longer the Mac 7. So I asked Matt to look at the top 25%. I'm sorry, the top 25 stocks. Right. All right.

26:44Ben Carlson:Broaden the universe out a little bit.

26:45Michael Batnick:So look past the Mac 7. Let's go to the top 25. In 2017, for example, the top 25 stocks were roughly 40 % of the market. They're now 54%.

27:02Ben Carlson:And I'm guessing that there's five of them that are the same maybe since 2007? If this were to return to 40%, I would think it would have to be because they're falling.

27:16Michael Batnick:not because the rest of the world, not because the 475 is like growing that much. Right.

27:23Ben Carlson:The concentration usually goes down in a big bear market, right? All right.

27:27Michael Batnick:So because of the concentration, all of the breadth data is permanently busted. There is weird things happening inside the market where this data point, like, oh, this has never happened since blah, blah, blah.

27:41Ben Carlson:Explain breadth for the civilians out there.

27:44Michael Batnick:Does not matter anymore. So the S &P 500 was up 97 basis points. Only 140 stocks were up. That would be weak breadth. It's being led by fewer, fewer stocks. You want broad participation.

27:58Ben Carlson:People might look at a ratio of advancing stocks to declining stocks to know what breadth is.

28:02Michael Batnick:You want the advanced decline line to keep going up to confirm the rally. All right. So Kevin Gordon tweeted, the third straight day with the S &P 500 declining, yet the advanced decline spread remaining positive. Bespoke has a couple of charts in this showing the rolling number of days with price and breadth in opposite direction. So price is up and more than half of the index is down. So that means that the MAG7 is down

28:28Ben Carlson:but the rest of the stocks are up, essentially.

28:31Michael Batnick:Basically. Or at this point, it's not just that. It could just be like the software names because the software names are now big enough where they can power the index higher with negative breadth and vice versa.

28:42Ben Carlson:Right, so a lot of these historical charts, they're gonna need a lot of context.

28:47Michael Batnick:They're busted, they're just busted. So they show rolling 50-day periods, 120-day periods, and 200-day periods. And we've never seen anything like what is happening now. So any historical data on this, just is completely useless. Another chart that, to me, really epitomizes what sort of weird market environment we're in. negative beta. This is from UBS. They have a chart that shows the largest 1 ,000 US companies by market cap and the number of stocks with a negative beta to the S &P 500. I don't know if this is like 30-day periods or whatever they're using. Oh, here it is, 252-day. So a negative beta means that stocks tend to go down when the index goes up.

29:35Michael Batnick:That is bizarre. And prior to 2025, five, the line, there was no line. It happened a few times where 10 stocks would have this, like 10. And now it's 108. All right. So the previous record looked to be about 10. I'm just eyeballing it, maybe even less. And now it's 108. Now that is a combination of the energy stocks and the war in Iran when there was peace talks and crude oil fell 9 % and energy stocks fell and the index went up. So there's that baked into it. And of course, there's all of the semiconductor trades, all of the AI stuff, all of the hyperscaler stuff. So the market and breadth dynamics look very, very odd.

30:19Ben Carlson:The 2020s have broken a lot of historical relationships in terms of economic data, economic charts, stock market data.

30:27Michael Batnick:It's a brave new world. We should have covered this chart earlier when we were talking about the debasement trade, but this is my favorite chart that Semblis made. We've seen a lot of charts showing central banks' gold allocation as a percent of their total cash reserves. Right.

30:47Ben Carlson:People have been saying that's the reason gold has been going up for so many years because of central banks buying it.

30:52Michael Batnick:Exactly. And is that part of the story? I suppose, but looking at this chart, and I don't know if there's like a start date that's moving this. But Michael shows the actual gold shares of World FX reserves, again, up into the right. But he makes the astute observation. It's a price thing. Yeah. When gold goes from 2000 to 5 ,500, of course, it's going to be a bigger slice of the pie. But are they actually buying gold to the extent that these charts suggest? No. So he shows, if you assume the actual holdings and no change in gold price since March 2009, they have less than they did in 2009.

31:33Ben Carlson:Interesting. So gold right now is in a 25 % drawdown. So that means that that percentage has obviously gone down because the price has gone down. Silver's down 50 % from the total, from the high.

31:45Michael Batnick:Pretty wild unwind. Last thing on the market stuff and then we'll move on. A couple of good charts from Torson Slack. He's showing earnings growth converging between the MAG-7 and the S &P 493. So in 2023, the MAG-7 grew 34%. The 493 was down 3%. Of course, that was well-documented, right? Like that's all we were talking about in 2023 because it was the reality that the entire market was being led by the MAG-7 that persisted in 2025, 23, and 11. But in 2027, analysts are expecting 19 % growth for the Mag 7 and 15 % for the 493, which would be a wonderful development.

32:25Ben Carlson:So that would be three years in a row of double-digit earnings growth for the 493. Yeah.

32:30Michael Batnick:That's pretty good. Pretty good. All right. One final thing on NVIDIA is cheap. And I'm going to use air quotes on NVIDIA is cheap. If somebody is listening and they were yelling through the screen, Michael, stop saying NVIDIA is cheap. I don't care that it's trading at 24 times forward earnings because we've actually, we did this a couple of months ago, a couple of weeks ago. It can have a premium multiple because it's too big. It wouldn't make sense. It would swallow the market. That's fair. I would accept that rebuttal. So NVIDIA has a larger market cap than Canada, than the UK, than France, than Germany, and then Italy.

33:04Michael Batnick:So maybe we're just bumping up against the laws of how big a company can realistically get.

33:09Ben Carlson:Anyone in your life who doesn't know how to pronounce NVIDIA? everyone has that person in their life yeah a lot of people say no video a lot of market professionals say no video right it's like someone who says chipotle it's at chipotle everyone has that person in life they just can't get the pronunciation i have those words too yeah you say we all have them you say dram oh oh it's dram it's dram okay but we all have those

33:32Michael Batnick:that's a very specific use case but yeah yeah uh all right um okay paychecks reported last week I would think that paychecks is a pretty good read on the state of the labor market. Would you agree? Yeah. This is from the CEO. I would say the macro environment, despite all the potential challenges that we have going on globally around us, has been stable. No signs of recession. In fact, if you look at our index, the last several reports have actually shown an increase in index under 50. We continue to see good growth. Lowe's, our core customer is a homeowner.

34:08Ben Carlson:Wait, there's another one. My mother, she says LOLs.

34:12Michael Batnick:What? Oh, like LOLZ? LOLs, yeah. LOLs? Instead of LOLs.

34:18Ben Carlson:She can never get LOLs.

34:19Michael Batnick:Oh, LOLs. I thought you meant LOLs.

34:22Ben Carlson:My mom is very bad at knowing names, so she thinks it's LOLs. Anyway.

34:26Michael Batnick:All right. So LOLs says that their core customer is a homeowner with an average household income north of$100 ,000. They have gainful employment. They've received wage increases. They have record equity in their home. They have money in the bank. Overall, we describe it as a consumer with a really strong personal balance sheet. And this consumer is resilient.

34:46Ben Carlson:Yep. You could say that every year for the last five years. It's funny. The word gainful. Sorry to keep picking nits here. That's a word you only hear for employment, in front of employment. You never use the word gainful for anything else besides you're gainfully employed. Correct. All right. The next thing here, you and I both put this in the doc. And so I must match them together. Yes, this was a viral thread by, I think, Matt LeBronk's brother. Brian LeBlanc from PNC. Who's Matt LeBlanc?

35:13Michael Batnick:Was that an actor?

35:14Ben Carlson:Yeah, he's from Friends. Oh, of course not. So he's from PNC, and he says they track the debit and credit spending trends of 4 million households. And he says, long story short, lower income spending balance sheets trends have been on a tear in 2026. This is a total narrative buster. Why don't you go through some of these?

35:31Michael Batnick:Okay, so he breaks out the lower income, middle income, and upper income. the year-over-year change in card spending, ex-gasoline, right? So is there some inflation stuff going on in here? Of course there is. But the shape of the lines is what's interesting because upper and middle income is dipping a little bit and lower income is straight up and to the right.

35:54Ben Carlson:And it had dipped for years heading into like 2025 and now it's gone vertical.

35:58Michael Batnick:So he plots the gap between the upper income and the lower income. And that peaked in what, 2025? or so, and it's gone. It's collapsed pretty dramatically from 4.5 % spread down to 1.5%. He said, where does this leave us? I'm encouraged by it. Bigger tax refunds, lower withholding taxes, improving job growth, and people monetizing wealth gains by bringing more cash into their checking accounts and their brokerages have been more than enough to keep spending stable in 2026.

36:30Ben Carlson:I got to be honest. The data he provided here was very surprising to me.

36:36Michael Batnick:And then he concludes with this. Me too. He said, here's where it gets interesting. We're also not seeing any evidence that lower income households are dipping into their savings to maintain spending patterns. If anything, lower income balance sheets may have improved through the war with Iran. This is wild to me. So he's looking at the cash savings buffer days for lower income households. and he says it shows the median number of days a lower income household in our data set can maintain their spending trends if their income suddenly stopped and still abrupt pre-pandemic levels he said that being said lower income households are burning through their tax receipts their tax refunds more rapidly than last year not sure i mean this is just the data he's not he's not doing like commentary or anything like that but uh yeah surprising i think some people

37:28Ben Carlson:assume when you think about the K-shaped economy or whatever, people assume that these trends are going to be in place forever. And the economy is dynamic. It's constantly, it's never the same. It's constantly changing.

37:41Michael Batnick:It feels like a weird position. Nobody wants to hear that the lower shape of the K is doing well, because almost by definition, how can they be? Right. And obviously the bottom 10 % is never doing well by definition, but this is, you know, this is encouraging. It is what it is. It's good stuff.

37:59Ben Carlson:I think one of the big reasons is I've showed on this show time and again, that bottom 50%, their increase in equities this decade, it's like a 300 % increase in ownership of equities. I think that helps. It's like wealth effect for the bottom half that they've never had before, really.

38:17Michael Batnick:So part of this next chart shows the cash held by households and it followed a trend of 4.8 % or followed a pretty good trend line from 2010 to 2020. And then the pandemic broke it, obviously with fiscal policy. And I think everybody assumed that this gap was going to close, that the cash held by households would revert back to trend. So part of the story here is on the other end of the spectrum, the number of ultra wealthy individuals. We're talking about people with a net worth of$30 million. So the journal wrote a piece on this. Jumped by 14.4 % last year. Obviously, the stock market drove all of that.

38:57Michael Batnick:There's 556 ,850 people worldwide by the end of 2025. Fastest pace of growth since 2017. Again, it's a stock market story. 60 ,000 people, the top 0.001 % of people, are each worth at least$254 million.

39:17Michael Batnick:The population that can fit in a football stadium own three times more wealth than half of humanity combined. Holy shit. So one of the, I mean, obviously, I think most American listeners, us would agree that capitalism is awesome. Wealth creation is awesome. A rising tide lifts a lot of boats to varying degrees, obviously. But one of the really gnarly side effects of capitalism baked with social media is a really nasty cocktail of disgusting wealth inequality. And I don't think anybody would hear what we just said and think like, yeah, that sounds good. I'm for that. It sucks.

40:06Ben Carlson:I keep saying it. I think there's a greater than 50 % chance we're going to have a socialist president in the next 10 years. Mark it down. I think that's a real, because this wealth isn't, again, AI is going to make it even worse. I'm just -

40:21Michael Batnick:I just don't know anything about how politics works other than the fact that putting somebody in an office is very expensive. And people that want socialism don't have a lot of money.

40:33Ben Carlson:Well, people don't always agree with what they do with their money. One thing, so I had lunch with a local financial advisor yesterday, and we both talked about this. And I said, and we kind of talked about how are things going in the business. And I made the comment, like, I can't believe the number of wealthy people that there are that we come into contact with. And he said, same with me. He's like, there's just so much wealth sloshing around right now from everything that's happened in this, you know, past 15 years or whatever. It's, there's so much money.

41:02Michael Batnick:Not weird. I understand that there is like a fantasy of a cohort of the population that wants us all to come crashing down. And I, you know, I understand the sentiment, um, a bear market and equities, a 50 % crash will certainly fix a lot of the inequality. It'll make life terrible for everybody, but.

41:21Ben Carlson:Yeah, but it would be worse for people in the low rent.

41:23Michael Batnick:Of course. Of course. Well, all right. Somebody sent this to us a while ago when we spoke about some tax stuff and whatever. I had it on my screen, so I thought this was an appropriate time to include this. So in 2025, according to the latest tax policy center estimates, 40 % of households. This surprised me. I didn't realize. I did not know this. or about 76 million tax units will pay no federal individual income tax.

41:51Ben Carlson:That's a lot. Isn't this just Jeff Bezos thing where he wants to... Yeah.

41:58Michael Batnick:So this is also not awesome. There was something in here about like... So 70 % of those people earn less than$75 ,000. So the Bezos thing, I guess a lot of that is happening already.

42:13Ben Carlson:That's why the tax refunds are getting bigger, right? I don't know.

42:17Michael Batnick:There's like, I'm out of my gut there.

42:20Ben Carlson:Quick comment on this story from the Wall Street Journal. Someone sent this to us. Forget work. Passive income is a new American dream. And they go through all these people who have decided like, I'm going to start a business. I'm going to have a side hustle. I'm going to create a product. I'm going to create a service. AI is going to help me. And I'm sick of the nine to five job. And I just want to stand up for the nine to five job. The nine to five job is okay. Passive income is really, really difficult. It's way more work. And I think that's honestly where the story comes down. Like if you do really want to, it's not as, the word passive shouldn't be in there anywhere.

42:51Ben Carlson:It's active income.

42:52Michael Batnick:Very active. It's really hard

42:54Ben Carlson:to do something on the side. Like there's nothing wrong with slowly but surely building wealth through a nine to five job.

43:01Michael Batnick:Do you know anybody that has a side hustle?

43:05Ben Carlson:Well, that's a good question. I'm sure I do. I mean, you and I, everything we've done has started as a side hustle.

43:12Michael Batnick:Not to brag. Yeah.

43:14Ben Carlson:but guess what? It's a lot of work. That's my point. Not easy to do something on the side. It's just more work on top of your job. You already have.

43:24Michael Batnick:You're wearing polka dots. You know, the scene in a, you probably don't know the scene in Wayne's world where Garth says, it's like people do things just because they get paid. And that's like really sad. And he's wearing like, he's wearing like a Reebok jumpsuit and he's drinking Pepsi.

43:39Ben Carlson:And it's just for the guy who was wearing an IMAX hat. Yeah.

43:42Michael Batnick:Yeah.

43:44Ben Carlson:Yeah, that's true. Easily your most quoted movie on the show. You've quoted Wayne's World more than any movie that we've, right? Without a doubt. All right. Artificial intelligence. All right, does this happen? We talked about this with Derek a little bit. There's this subset called the Exponential View, and they looked at, Aziz Zahar looked at the Gen AI economy. He said it's generated$110 billion in sales over the past 12 months on an annualized basis that run rate exceeds$175 billion. And he's got a great chart in here. It just keeps going up. And this is like how much money is actually being created from all the AI spent.

44:20Ben Carlson:And it's going up at a pretty fast rate. It's funny because numbers don't mean anything to me anymore. Like I look at this number and I go. That's why you have to normalize it to the moon and back. Right. I'm like, I don't know. Is$175 billion a good return on all that capital? I don't know. But I think as long as the chart keeps going up, then you say, okay, this is, something's happening here. He was saying like, this is great news. Like it's finally happening.

44:47Michael Batnick:Getting back to the conversation earlier in the show about the cashflow going to zero for these companies. Do we think that it's more likely that we look back in two to three years and say, can you believe we didn't think that this was going to work? Like these guys were just like completely asleep at the wheel, they had no idea, they just drove their business off a cliff. Or is it more likely that, yeah, they actually had a plan and trading at a market multiple made no sense and was a generational buying opportunity.

45:13Ben Carlson:That was my point to Derek, that these are the biggest best run companies in the world. And it could be one of the, this could be the biggest folly of all time. And we have egg on our face. You're like, you idiots. They didn't know what they're doing. Come on. I don't believe that.

45:25Michael Batnick:It's possible. It's possible that Sundar Pichai and Satya and all these people, it's possible that they're all complete morons. But how dumb do you have to be for that to be your base case?

45:34Ben Carlson:Yes, I don't believe that. All right. from Ramp Economics Lab. I love this subset. Ara Karazian, who we've had on the show before, actually. He says, is AI actually a job maker? Firms that adopt AI grew a headcount at 10.2 % faster over two years following adoption. Entry-level headcount grew even faster at 12%. And he's got this chart here that shows firms with high AI adoption are seeing growth in their number of employees. This is a head-scratcher to me. Now, you could say, and you've said before, Wow, this is still early. Come on. I think this is a positive sign for what I think is going to happen, that AI is going to lead to more work.

46:17Michael Batnick:You could also make the case that this is still early, and the companies that are most aggressively leading in are best positioned to take these sort of risks. Fair. You think that AI is going to create that job? It's possible. Early positive sign.

46:35Ben Carlson:We haven't seen any really huge negative signs of AI yet, is what I'm saying. Correct? Not a huge one that like, oh my gosh, yes, this is the end. We haven't seen that yet.

46:46Michael Batnick:Correct.

46:47Ben Carlson:That anecdote hasn't happened yet, even in the data especially.

46:51Michael Batnick:All right. I don't know. I'm sure there's been work done on this. When a company puts their name on a stadium, it's usually not a great sign of capital discipline. so Kurt Badenhausen tweeted the Warriors signed a new jersey patch deal oh it's just a jersey patch alright nevermind with AI Cloud from iRen but nevertheless costing more than 50 million dollars a year that's a lot I don't know how to

47:23Ben Carlson:calculate that for any recognition it is okay someone I said last week they need better names for AI. They all have to use a name. And someone says in Tokyo, the nickname for Chad GPT is Chappy.

47:35Michael Batnick:Okay.

47:36Ben Carlson:That's not bad. Not good, but it's not bad. All right. What's the mode here for prediction marks? I said this last week. Like what, where's the mode for Cal-She and Polymarket? New York Times says Mark Zuckerberg directed meta to create a prediction markets app. Uh,

47:51Michael Batnick:what's the mode? Well, we discussed this last week. I'm on record that there are a lot of examples. of companies where you would say, well, what's the moat? And they've gone on to do incredibly well. Now, maybe I have one example, but still, one is one, is it not? It's more than zero.

48:11Ben Carlson:But degenerate gamblers will go wherever they're treated best.

48:15Michael Batnick:Well, why would they be treated better anywhere else? The odds are the odds. Once you have the customers, why would they go somewhere else? Maybe better sign-up bonuses, but like, all right.

48:25Ben Carlson:I just, what was the moat for FanDuel and DraftKings and MGMs? Here's the mode. MGM or whatever.

48:31Michael Batnick:Well, first of all, why is that the criteria for anything? But I'll tell you what the mode is. Because the reason all the growth is happening

48:39Ben Carlson:for Kelsey and Polly Market is just because of sports betting. That's it.

48:42Michael Batnick:Sports betting. Okay. So I'll tell you what the mode is for these companies. For me, I have a FanDuel account and I've dabbled in with Fanatics and DraftKings. But I've bet whatever I've bet on FanDuel, that's my personal record. So I want to know what my track record is. And I had a pretty good run on the NBA playoffs, not to brag. So I am back down to only seven cents of losses per every dollar spent. So that's the moat, at least for me. That's why I'm not leaving FanDuel.

49:13Ben Carlson:When it comes to sports betting, I just don't see any moat at all. And I feel like these are fly-by-night companies. There's going to be 12 more of them. Maybe I'm wrong.

49:23Michael Batnick:Well, yeah, maybe you're wrong. I don't know. I don't really have a strong opinion here. All right. Michael Saylor tweeted, volatility tests every capital structure. Strategy remains focused on Bitcoin, disciplined capital allocation, credit quality, and long-term value creation. This is not The Onion. He actually tweeted this. We appreciate our investors and will continue to execute with transparency and resolve.

49:47Ben Carlson:You and I saw him speak at a conference like two years ago. And Bob Pisani was interviewing him. and

49:55Michael Batnick:Bob's entire body language was and he didn't say this and I was I feel like I'm taking crazy pills yes he was like apoplectic so I'm gonna get into this tonight with Josh what are your thoughts I don't want to say too much other than the fact that strategy is in a 30 what 50 % whatever it is strategy is getting killed it's down 82 % it is 82 % yes okay 30 80 okay they issued a preferred security that was supposed to trade at par it's now in a 18 % drawdown not awesome they're selling yield higher um but what is interesting i keep saying this like there are things happening with blockchain stuff despite the crashes in these companies and by the way a couple of weeks ago when you told me visa was in a 12 % drawdown when i mentioned these names mastercard was in it was at a 52 week low okay so i think these companies are being...

50:49Ben Carlson:Hang on. I think strategy getting blown out of Bitcoin is the best thing that could happen for Bitcoin.

50:53Michael Batnick:Yeah, I would agree. I would agree. So, Torsten Slack tweeted, the tokenized real world asset market has grown to nearly$32 billion, highlighting increased institutional adoption of blockchain-based infrastructure. $32 billion is not like 20 million. That's a real number. So, he breaks it down by US treasury debt. That's like $15 billion worth of tokenized assets, private credit, commodities, stocks, and others. This is going to be$100 billion.

51:22Ben Carlson:I guess I'm just thinking of the way that how AI could save crypto somehow and really use a blockchain. There has to be a way. But I don't know. You said$170 billion for AI is not that big, but$35 billion for crypto is big.

51:37Michael Batnick:What did I say? $170 billion? I didn't say it's not that big.

51:40Ben Carlson:Yeah. All right. I still just think that with all the fanfare that we heard about all the things that crypto is going to do, if stable coins are the thing, that's going to be a really boring outcome. From all the things that this could fix this and it could fix this.

51:56Michael Batnick:What if tokenized real world assets are$100 billion? That's not nothing.

52:03Ben Carlson:Yeah.

52:04Michael Batnick:Huh?

52:05Ben Carlson:It's not. I don't know.

52:06Michael Batnick:No, listen, two things can be true. The hype was ridiculous. Yes. And we've paid way too much attention to it. but it was also a new asset class, a new vehicle. Like it was exciting.

52:15Ben Carlson:The fact that$2 trillion was created from thin air is unbelievable.

52:20Michael Batnick:Is that nothing? Like, is that a failure? They invented a new asset class that people, institutional investors allocated to. Overhyped? Sure, but not, you know. All right.

52:30Ben Carlson:So we talked last week on Ask the Compound. Someone asked, hey, I live in North Carolina. I've got a 2.9 % mortgage, but the house is too small for my family. The kids are growing. moving into a new one would be a 6.5 % mortgage. And I said, you know what? If it's going to make your life better, do it. And someone in the comments said, sorry, but trading a 2.9 % mortgage for a 6.5 % one on a much higher loan balance is an idiotic move. Quality of life is defined by the people you're spending your time with, not how big of a house you're spending that time in. There are numerous academic studies that conclude upsizing your home doesn't lead to higher overall life satisfaction.

53:01Ben Carlson:And guess what?

53:02Michael Batnick:Well, I am a perfect counter example.

53:04Ben Carlson:Yes. This is why I think sometimes behavioral studies are just flat out wrong.

53:09Michael Batnick:so you did this and i'm sure you're much happier i did this my mortgage is when i went from 2.9 percent to where am i now five five i think my mortgage payment is way higher than it was my old house like an uncomfortable amount higher but i did this for my family and for my life and to be on the water and to make lifelong memories with my kids now Obviously, there's a line. If you can't do it.

53:41Ben Carlson:There's diminishing returns at some point.

53:43Michael Batnick:Right, but I'm just saying, if it doesn't make financial sense to the point where, if this blew up my life, where I wasn't able to do things because I was underwater on my mortgage payments, obviously, that's a stupid decision. This person in the questions had,

53:56Ben Carlson:listen, I can't afford it. I just don't know if I want to. Fine, do what you want. This is personal finance stuff. I said do it, because the house is honestly something that will make you happier. It will put you in a much better mood if you're in a much happier house situation. I totally agree with that. And I think the behavioral studies on this are wrong.

54:16Michael Batnick:I would say it depends, but I generally agree with you. Diminishing returns, anyway. I agree. We've been talking about this. The fact that the economy continues to be as resilient as it is with the housing market in a depression is remarkable. Right, there's this idea that there's a line that housing is the economy.

54:38Ben Carlson:Guess what?

54:39Michael Batnick:No. Kevin Gordon tweeted new home sales fell sharply in May, down 7.3 % and are getting closer to their cycle lows. And, uh, Tal Smith said it is still completely insane. Now GDP has been above trend the cycle while the housing sector typically responsible for up to 20 % of commercial activity has been effectively frozen. Now it's not like a mystery, like, well, what's happening? Well, yeah, it's, it's all AI. So, So Warren Piesel's chart showing residential fixed investment in raw dollars versus information, equipment, and software. And it's just the lines have just gone whoop. Guess what?

55:12Ben Carlson:Most people would prefer if we built more houses than more data centers. But that's not where the incentives are right now.

55:19Michael Batnick:Somebody sent this article to us. There was an article, an opinion piece in the FT, your summer holiday is a retirement killer. and basically like if you were to invest the money instead of spending it on X, Y, and Z. And I think this was satire, but I'm not 100 % positive. I think this was like very dry British humor. Did you read the article?

55:42Ben Carlson:Okay, I did kind of skim it. I guess I didn't get that. So the whole idea was, yeah, if you just take the$10 ,000 you're going to spend on vacation and grow it over 30 years, this is how much you're giving up, right?

55:57Michael Batnick:Yeah, now I'm like 65 % sure. I'm not, you know, I don't know. I don't know who this person is. But I think we would all agree that if you are putting an 8 % return on your vacation and depriving your family of these memories because it could be worth whatever.

56:12Ben Carlson:Yes, this is satire. And the thing is, some people probably would look at this as being real. He's like, that$10 a day you're spending on ice cream for your kids could be$2 ,000 by the time they retire.

56:27Michael Batnick:The Wall Street Journal and an article, no hair transplants, pills or toupees meet the men embracing baldness. I've been bald maxing for years and I wasn't asked to opine. Yeah, we got a lot of this.

56:35Ben Carlson:Yeah, someone said Michael should have definitely been interviewed for this. I mean, these solutions are coming. I mean, if you're a bald person and you grow your hair back, I'm not going to look down on you. I think you should, you can do it. I think you, I'm more proud to you. I don't care.

56:50Michael Batnick:But Josh is regrowing his hair somehow. He's injecting himself. Well, I heard he did.

56:55Ben Carlson:I heard Josh did a speech for a group of advisors in Turkey. And then he came back. I don't know what happened. It does look pretty good. One more personal finance thing. So it is funny because a lot of what we've been talking about in the last five or 10 minutes is just judging people on their financial decisions. And I think I'm not one of those persons that says don't judge people on their financial decisions. I love judging people on their financial decisions.

57:16Michael Batnick:Oh, it's great. Internally, right? It's fun. Yeah, we don't publicly shame, but.

57:20Ben Carlson:But we always get people, we've talked a lot on this show before about the benefits of leasing versus buying. We've run the numbers. We've gone through the posts. Like, we've looked at it. And a lot of people, every time we talk about the fact that you and I lease cars, someone will comment that we're idiots. Right? I get it. It's like, it's not the greatest financial decision in the world. But I think there is a huge benefit of leasing a car today, way more than there was in the past. So I got a new, I got my new Telluride. And it's funny. you got a Range Rover or Land Rover. I never know the difference.

57:52Ben Carlson:Range. What's the difference between a Range Rover and a Land Rover? Different cars. Okay. And I drive like a Kia Telluride or whatever. And someone's like, hey, I have a few people say, hey, it looks like a Range Rover. I told you, it's kind of, I'm a homeless man's Range Rover. But the biggest benefit, at least today, is all the new features you get in these cars. I feel like the features are multiplying in terms of the cameras and the safety and the alerts and the sensors and the self-driving capabilities, driving a new car is just way safer for you.

58:24Michael Batnick:It's also making it like impossible to fix. Oh, yeah. My dad got in a fender bender at$6 ,000.

58:32Ben Carlson:Oh, yeah. That's what happened to me before because all the sensors, it was$12 ,000 for a bumper car insurance. I guess that makes sense why it's going higher. But you go on the highway and it's not like Tesla self-driving, but it's like adaptive cruise where it keeps you in the lane and it steers for you and it slows down if the car in front of you slows down and it speeds up if it speeds up. And I just think that the amount of features that happen in two to three years is kind of insane these days. The technology is getting so much better in cars. Yeah. That's how I justify my terrible financial decision, the lease.

59:03Ben Carlson:It's not a terrible financial decision.

59:05Michael Batnick:How about, what about this? It's fun to get a new car every three years.

59:08Ben Carlson:It really, honestly, for a week, my kids were talking about the new car smell is so good. My kids were just going and sitting in the car in the garage sometimes because they like to smell so much.

59:17Michael Batnick:When's the last time you had Domino's?

59:20Ben Carlson:Pizza? Last night. My son gets it every Monday night. It's his favorite pizza in the world. We have a Domino's right. It's the closest pizza by our house. Every Monday from him, I will now get it. It's in the summer. I'll get a text. Hey, when are you coming home from work? Can you get a Domino's on the way home? It's his favorite pizza. But we had a birthday party for him and his sister and all their friends came over. What kind of pizza would we get? Domino's.

59:43Michael Batnick:Well, turns out that George is alone on this one because pizza slice keeps shrinking. The journal had a post showing that Mexican is going up a little bit. This is the market share of like these restaurants. Pizza is crashing. If you look at Domino's stock, it looks horrible. Stock that I owned in the past looks horrendous. I think the CFO just was under. I can't remember what's happening, but really bad. Chicken. Chicken is going up into the right. Went from 10.5 % in 2019 up to 13.5 % today.

1:00:11Ben Carlson:Okay, this chart is a little bit of a truncated chart crime. This is like a misdemeanor of a chart crime because it's a very small axis, 9.5 to 14%. But you're right. That's a big change.

1:00:22Michael Batnick:I had a party for Robin's 40th birthday. Never had a party in my old house. We had a bunch of friends over. It was very nice. At the end of the night, Robin and I had been drinking. And I said, you know what? Let's get Domino's. Been a while. It was terrible. Really? And I hate to, I really hate to be like the food snob guy because I grew up eating Domino's and I thought I liked it. Or maybe it was just, it was too late and we got like, you know, the bottom of the barrel. Because one of the reasons the stock did so well

1:00:52Ben Carlson:for so many years is because they improved their quality. It was not good. It was 34 % drawdown. But one of the reasons that pizza is losing share is just because there are so many better options out there today. People got more pizza in the past because there wasn't good options for eating. And pizza was the only one that had delivery. Now you can deliver DoorDash and you get other stuff. So that's why that's happening. This is a DoorDash phenomenon. All right, go ahead. Okay. Okay. So there's the Tony Soprano idea that remember when is the lowest form of conversation.

1:01:22Michael Batnick:We've done this before and we make fun of Chris because he's the biggest remember guy.

1:01:26Ben Carlson:Yeah, but I reject his premise. Tony Soprano was one of the least happy people alive. He had to go to therapists because he was so unhappy. I think there are times when remember when is the best. There are certain people who do it way too much. Of course, right? One of the people we work with is one of them. But I think there are times when it is useful. So this past weekend, my parents have a cabin in the middle of the woods on a river. It's like there's no cell service, there's no TVs, there's no technology, there's no internet, there's no nothing. It's like in the backwoods, middle of nowhere, two-track road, right, on the river.

1:02:02Ben Carlson:And you go there and you play yard games and you do a campfire and you go kayaking on the river. And so I went there with a bunch of my brother's friends, kind of like everyone wants to keep get together to remember my brother. And all we did all weekend was drink beer, go kayaking, do campfire, play yard games, bocce ball, you know, that kind of stuff and tell stories about my brother. And I had the best remember one day of my life. It was so fun telling stories. But that's the kind of stuff we'll remember when is good for you.

1:02:29Michael Batnick:Huge remember one guy. I love it.

1:02:31Ben Carlson:It was like it was actually like very cathartic for me and good to have it and like got out of the system. and like all we did was tell stories all weekend. And it was so much fun. I laughed all day.

1:02:40Michael Batnick:That's what life's all about. Remembering the good times, right? Yes, exactly. Recommendations. I want to talk about why Rewatchables is for me unequivocally the best podcast of all time. So they're going through Hell Month, which is 90s nostalgia. So what is from hell? And why am I talking about this? Because it's my podcast. the tenant from hell Pacific Heights the roommate from hell single white female the nanny from hell

1:03:19Michael Batnick:the hand that rocks a cradle stepdad from hell domestic disturbance Bill Simmons on the rewatchables goes to all these movies I watched all of them and I watched domestic disturbance which I did see when that came out that was with Vince Vaughn and Travolta. Terrible movie.

1:03:38Ben Carlson:Terrible movie.

1:03:39Michael Batnick:So I watched a movie, rewatched it. So bad. So bad. And then I listened to the podcast and it was amazing. I mean, obviously it's an intentionally bad movie or they did it because it was, you know, it was horrendous. But those guys, you got to give credit. It's a very good podcast.

1:03:57Ben Carlson:It gives me ideas of movies to rewatch as well that I would have never thought to rewatch.

1:04:02Michael Batnick:So I don't know that I saw, I know I've seen parts of Single White Female because I do remember, it was probably on TBS and TNT all the time, seeing Bridget Fonda and Jennifer Jason Leigh with the same haircut. Yeah. But Pacific Heights, I never saw that one. Matthew Modine and Melanie Griffith.

1:04:20Ben Carlson:Isn't it a Michael Keaton movie as well?

1:04:22Michael Batnick:Michael Keaton, of course. What am I saying? Yeah.

1:04:24Ben Carlson:Okay. So should I watch that one? I think I've never seen it before. Yes.

1:04:27Michael Batnick:Yes. Yeah, it was good. Really enjoyable. Terrible movies for the most part. but man, great podcasting. All right. A couple of, I don't know, last month, the other month, I forgot to mention that I watched what I thought was a very good doc. You ever see the Dark Wizard on Max? The Dark Wizard is about like one of the pioneers of rock wall climbing. What's that thing where you, oh, free soloing. Yeah. Like just without a rope. And then he got into hang gliding or like where you just, you put like the bat wings on and spoiler, he didn't make it, but it was very good. Oh, okay.

1:05:03Ben Carlson:Those guys are nuts. Absolutely nuts.

1:05:05Michael Batnick:Do you watch Hot Day? House of the Dragon?

1:05:09Ben Carlson:Oh, yeah. Here's the thing. I was going to talk about this. So my wife's like, do you want to watch? She's like, she watches all the TikTok videos to know what's going on. And like, this person is this. And she's like, do you want to watch the review of last season? Like the recap? And so I watch it. It was like 10 minutes long. And then 20 minutes into the first episode, I'm like, wait, who's that person? Wait, are they good or bad? But that's why I love Game of Thrones. because I can turn my brain off and just be entertained. And I don't have to be one of those nerds that knows like, oh, this is the house of Baratheon.

1:05:35Ben Carlson:This is that like, I don't care about any of that stuff. I just like being entertained. It really is remarkable. But I'm constantly confused. Constantly confused.

1:05:42Michael Batnick:I watched the recap. See, the first episode was fantastic. So it was the second. But I saw the recap too. And I was like, wait, that happened? I don't like remember any of this. And even 30 minutes through episode one, I have no idea what's happening. Honestly, I couldn't tell you which family, sometimes, but like, which kid belongs to which mom and blah, blah, blah, blah, blah. I love it. Can't tell you anything. I have no idea what's happening, but it's great. I'm the same.

1:06:05Ben Carlson:All right. So my son has been really big into alien movies. I think it was because of Project Hail Mary. So he's dad, give me more alien. We watched a bunch of alien movies. And finally, I let him watch the alien movie, Alien. Okay. Sigourney Weaver. And so he watched that and absolutely loved it. And he goes, are there more? And when, you know, he watches it on Amazon, it shows the rest of him. He's like, how many of these are there? So I pulled it up on chat GPT. We got it in order. right and so we watched alien aliens alien 3 alien resurrection prometheus covenant and romulus we watched them all i looked at like i didn't i never thought of like where do these movies rank where when did they happen right i never thought i knew prometheus was the prequel that's about all i knew and he loved every single one of these movies but it's kind of funny because as they got further along you got the alien the technology got better right because the first one was in 1979 the technology gets better and better and better and the action sequences get better but none of them come close to touching the first movie not even close no Aliens is the best Alien

1:07:05Michael Batnick:no Aliens the James Cameron movie is by far the best you think the second one is the best

1:07:10Ben Carlson:no the first one is by far the best Alien was great so this is Alien was more of a suspense thriller Aliens was a better action movie

1:07:20Michael Batnick:Yeah, so they were very different movies. You're right. Alien was like a slow-burned... I think none of them...

1:07:24Ben Carlson:Even the fact that they didn't have the technology back then made it so you had... But you would never make the movie Alien today because it's so much slower. Wait, did James Cameron do the original and Ridley Scott did the second? No, Ridley Scott did the first one. Okay. I forgot that there were seven of these movies. Yeah, my son ate them all up.

1:07:40Michael Batnick:This is my favorite movie franchise of all time. Did you know that? I think you've mentioned that before. So, yeah, we watched them all and... But wait, hold on. I'm surprised because the second one is quite scary. when Newt's parents are like stuck in the wall and they're like white as a ghost, he wasn't scared.

1:07:57Ben Carlson:So my son has the same thing as me. He does not get scared by these movies. They don't scare him at all. He finds them entertaining. Like it doesn't impact him at all to see all this stuff. He also watched the two Alien vs. Predator movies, which are complete garbage.

1:08:11Michael Batnick:AVP2 is the worst movie. So I love the first one when they're going down. Garbage movies. The second one is AVP. Was it Requiem?

1:08:21Ben Carlson:Yeah. It just...

1:08:22Michael Batnick:Worst movie of all time. I watched that with Robin back in the day, like 2006. We're in my bedroom and I'm watching it on bootleg and she's like, what in the hell is this garbage? Terrible movie.

1:08:34Ben Carlson:I got one more. The bear on FX is like the hangover. I don't know why I'm still watching it. It's on season five now. Sometimes you have lightning in a bottle and you cannot recreate it. Like the hangover two and a hangover three it was the same characters and they tried to recreate the magic and it just it never happened and you almost wish they didn't make them. The Bears season one and two is like one of my favorite two television seasons of all time. And season three, four and five just got progressively worse where they obviously ran out of ideas and did a complete money grab. And the show is almost unwatchable now.

1:09:07Ben Carlson:Why am I watching it? Sunk Cause Fallacy. I don't know.

1:09:10Michael Batnick:I have one thing before we go. So Ben and I, well actually you don't work from home. I work from home. and I still, it still feels weird that I work from home. I mean, I'm in the city once a week. I go to Belmore here and there, but I really primarily I'm in my house and it still is very bizarre. It's not new, but it still feels new. And it still feels like I'm like cheating or something. It feels like it's weird. Cause you feel like you're on an Island sometimes. It's bizarre. It's a bizarre thing. And, um, obviously like I feel blessed out of my mind that I'm able to do this. Right. I'm not, I've not everybody's so lucky.

1:09:44Michael Batnick:A lot of people have to go to the office and they have jobs where they can't work from home. So that's just a little bit of throat clearing. I feel extremely lucky to do this. But it does do something weird to for me, for like the father son or kid relationship. So Kobe went to sleepaway camp on Saturday. And I was just like, yeah, I'll see you in seven weeks. And he loves camp and like, whatever, it's all great stuff. But I feel like my sort of like whatever about it, or just like, just in general with being with him all the time, when, when our parents came home now, I guess my dad didn't even come home because my parents were divorced, but for, for non-broken households back in the day, when your parents came home, like work was done, right?

1:10:34Michael Batnick:Like they left work and they came home and they gave their kids all the attention. I feel like I am giving my kids like, I don't know, 8 % of my attention because I'm with them literally all day, every day. Now they're not homeschooled, but I'm around all of the time and it's like a trade-off. So I'm not suggesting that it's better when our parents went to work and came home and were with the kids, right? Because then they missed a lot. They missed sports and whatever. They just weren't able to be around. But it is doing some stuff that I don't love, but I do feel like I'm sort of not present taking it for granted because I'm with them all the time.

1:11:08Ben Carlson:It's a completely different, it changes the relationship in a lot of ways. I totally agree. My dad never once brought work home with him, but parents didn't spend as much time with their kids back then. No parents did. It was just kind of known that you weren't spending as much time with your parents. You were kind of on your own.

1:11:26Michael Batnick:Yeah, it's weird. I feel disconnected, but even though I'm with him all the time, I don't know. It's just, it's interesting. I get it.

1:11:38Ben Carlson:Okay, glad you got that off your chest. Just something I've been thinking about. I see what you're saying. The way that we parent our kids is totally different from the way our parents parented us. But their parents did it different to them too. So it changes.

1:11:49Michael Batnick:Yeah, I'm not saying like it's all bad or it's all good. It's just, you know, it's different. All right. Whatever. Whatever. As Ben likes to say. Animal Spirits at the Compound News. Hope everybody is enjoying their summer.

1:12:05Ben Carlson:Happy Fourth of July.

1:12:06Michael Batnick:You know what I'm trying to do? I'm trying to remind myself getting back to Kobe that he'll be home in 47 days. we have a reprieve. I love him. He's having a great time. It's all good. But summer goes so fast I'm trying to enjoy every day.

1:12:18Ben Carlson:You're going to be saying can you believe it's fall already, Ben? Before you know it.

1:12:22Michael Batnick:I will not apologize for being a can you believe it's that time, Jack.

1:12:26Ben Carlson:Happy 4th of July to everyone.

1:12:27Michael Batnick:Hell yeah.

1:12:29Ben Carlson:Great holiday. Behind Christmas is my second favorite holiday. I love the 4th of July. Can't wait. Sun, water, let's do it. All right, see you next time.

1:12:55Michael Batnick:Hey, it's Ryan Reynolds here from Mint Mobile. Now, I was looking for fun ways to tell you that Mint's offer of unlimited premium wireless for$15 a month is back. So I thought it would be fun if we made$15 bills. but it turns out that's very illegal. So there goes my big idea for the commercial. Give it a try at mintmobile.com slash switch.

1:13:16Ben Carlson:Upfront payment of$45 for three months, $90 for six months, or$180 for 12-month plan required. $15 per month equivalent. Taxes and fees extra. Initial plan term only. Greater than 50 gigabytes may slow when network is busy. See terms.