Living Paycheck-to-Paycheck (EP.367)

23:43They did this whole history of American worker. I wanted to run through some of these with you. The U.S. labor force was 60 million people in 1950. It's now close to 170 million. And they show the majority of that increase is from women. So the labor force, prime age labor force participation ratio, which is 25 to 54, for women in the 1950s was 45%. Now it's close to 80%. Men is closer to 90%. That is an insane run up. And if you look at the next one, a lot of people say, well, it's because you need two income households to afford all the luxuries we were talking about. But really, it's because wages are so much higher that it has induced women to enter the workforce because they're being paid to.

24:30But look at this. Well, both things are true. It is, it is, it is very difficult to raise a family on one household. To have all of these luxuries that we're talking about on one household is pretty rare. Yes. But, but, but I think it's the reasoning that a lot of women have entered the workforce. It's not just because they needed to, it's because wages have got them off the sideline essentially. But look at this next one. So they looked at real wages from the post-World War II era to now. And post-World War II was a huge boom in wages. But then from 1970 to 1995-ish, real wages went nowhere. And a lot of that is because inflation was so high.

25:09But it's kind of crazy that we look at the 1980s and 1990s as this period of just jubilation and everything was great and the economy was booming. Real wages literally went nowhere for 20 years. And now from the mid-1990s to now, you've seen boom times again in wages. But you don't ever think about the 70s. There's obviously people have really bad memories, but the 80s and 90s, you wouldn't think this, would you? Is that surprising to you? It was surprising to me to see it charted out like this. Yes. Very surprising. You don't hear pieces of economic reporting in the 1980s and 1990s of people being so miserable because their wages were going nowhere.

25:53Maybe it's just because the 70s were over and they were happy with that period being gone. Well, also the stock market was booming. Yeah, that's true. But now we have stock market boom and wages booming. People are still miserable. Well, wages aren't booming. Yeah, but on a relative basis compared to then, they are now. Yeah, you're right. Fair. All right, one more from JP Morgan. Do you remember when, was it Meredith Whitney who said all the municipalities are going to go out of business? Yes. I think Michael Lewis had a chapter in one of his books about this. That was, yeah, that was a tough call.

26:30So they did this, I've never seen this chart before. It's state and local and federal net debt as a percentage of GDP since 1930. So obviously federal net debt as a percentage of GDP is about as high as it was in World War II. But look at state and local debt. it's essentially unchanged over the past, I don't know, 80 years. And it's only gone down in recent years. I guess if you were to zoom in on like the, on when she made the call, it was definitely the peak of it. Maybe it was gone down since she made the call. It was going the wrong direction. So yeah. Anyway, another surprising chart. Uh, I dunking through a survey or a vote in the, in our YouTube channel, Where have you noticed inflation the most in your life?

27:14Recreation, energy, cars, and trucks, and food and beverage. And the number one item was food and beverage. By far. I would also vote for food and beverage. But I think one of the reasons why we do vote for food and beverage is because you eat and you drink several times a day. Probably the most frequent purchase that you have, right? Yeah, the funny thing is the actual inflation rate is probably way higher for cars and trucks and recreation. Oh, I don't know about that. Than food and – you don't think so? entertainment and food inflation. It was up a lot. No, if you look at it, it's pretty close to CPI.

27:47Is it? Okay. I mean, restaurants are higher, but food at home is it's, it's higher. Either way. I was telling this to on, on TCAF, I got two slices of pizza and two sodas and it was $17. And that's just hard to like get used to. I'm not sure what I think it should be. Like two slices should be, what should two slices be? I feel like this is turning into a weekly Michael bet in the segment of, here's six things I bought. Here's how much they cost. Two slices should be, let's say$4 each. Is that fair? Are we talking big New York slices? I mean, but it's like, we're not in the city. I was with my kids.

28:22So let's say$4 and$3. So$8,$14 taxi. I guess it makes sense. All right. It didn't feel good. The thing about inflation, though, and so much of the food thing is the psychological component because you're saying you see it all the time. So you've seen this McDonald's meal deal making its way around. Pretty good deal, actually. So$5, it says limited time offer, but you get a McDouble or a McChicken, a four-piece nugget, a small fry, and a small soft drink. Pretty good deal. It's funny to me that people would, and this totally makes sense, people don't want to look at the inflation data. They want to see stuff like this.

28:59They want to see a psychological moment like this where it's like, ah, yes, this is it. We broke inflation's back. I had my kids' chicken nuggets last night. Logan only eats a few. Man, they're so good. I don't know. I mean, they're so good that like you just know that they're so dangerous. You know what I mean? Like food should not taste that good. Wait, you mean chicken's not actually shaped in a little rectangle like that? Just the coating of fried whatever. It's just, it's so delicious. I was at a bar the other day and some of the old people were like laughing and complaining about McDonald's.

29:34They said, you take a family of four and it's$80. I mean, that's obviously not true. Right. That's not even close to true. But nevertheless, it's directionally running. I still think McDonald's is relative. I mean, if you get the, but for the stuff my kids eat, it's still relatively inexpensive. My kids get like a plain hamburger, you know? A plain hamburger? Plain. Well, ketchup, I guess. Okay. They don't even like the little mini onions from McDonald's, which I contend are pretty good onions. I love those mini onions. I love everything about McDonald's. Yeah, McDonald's is great. Black Friday savings are here at the Home Depot, which means it's time to add new cordless power to your collection.

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31:05All right, here's another anecdote from an email. Hey, guys, love the show. I'm a police officer in SoCal, so I eat out a lot. Which, I didn't know that insinuation that police officers eat out a lot. I guess it makes sense. They're patrolling. Over the last month or two, nobody is at line in the drive-thru in and out. I sat alone inside of Chipotle the other day, which has never happened. The$20 minimum wage in Cali has increased prices to a ridiculous amount. It's forced a lot of people to brown bag it to work. I'm curious how this plays out for stocks like Chipotle. And saying people are cutting back.

31:32And I think California probably is in its own little world on this. But it does make sense that these places have pushed to the Starbucks point, pushed enough. So this is interesting to me, though. I looked at Chipotle. That stock trades for 61 times earnings. The price of sales went from two times in 2018 to eight now. How is this stock still such an insane, being priced as such an insane growth stock? I doubt their growth has accelerated. Has it? I don't know. I don't know. Unless it's just all from price change. That just seems, I'd be willing to take that as a paper short. How's that? I mean, you stopped eating them.

32:09I actually had it recently. And I got to be honest, it was delicious. It was really good. It's still pretty good. I'm going to read this next one. This is a heavy, heavy, this is a holiday week. It's a heavy email week. Oh, wait. Yeah, Chipotle in California. What do you think it costs? 16 bucks for a bowl? No fucking way. Absolutely not. Yeah. it's the Jeremy Irons thing. Willing buyers at a willing price. My wife is home for the summer. I hear her. She's a guidance counselor, so she's off for the summer. And I just hear the TV on downstairs. A lot of TV for her. A lot of binging. She's mad. So my wife is very lenient with me.

32:49She's an incredibly understanding, very forgivable wife. So I usually don't get in trouble. I'm in the doghouse this week. I'm in the doghouse. Any reason? Oh, yeah, that's a reason. No, I'll share. I shaved Kobe's head like a buzz yeah without telling her oh okay he has like long hair too right I just made the decision because he has like so much hair and it's like hot and he's always sweaty so I told him that I would buy him you deserve to be in the dog my wife would kill me if I did that oh we came downstairs and she's so how does he look did it turn out okay you just wanted him to be like you you wanted to see what your shoulder means he's going to look like when he's older I think he looks cute But I'm biased to protect myself from admitting that he might not look that good.

33:33Oh, no. He looks pretty good. As I'm doing it, he goes, Mom, he's going to be so mad at you. At least he didn't care. All right, what else? Yeah, you deserve to be in the doghouse. Yeah. I live in the Quad Cities between Iowa and Illinois. And we have the HQ of John Deere. Oh, this is an answer to, what were we talking about last week? Why grocery prices are so much lower in the U.S. than the rest of the world. Right. Okay. So this is a great email. Here we go. Food prices are so phenomenally cheap here, and we are able to eat things like beef when other countries can't afford it because of our incredibly well-placed food basket.

34:13The Mississippi River Basin is basically the largest navigable river basin by far. Extremely long and extremely flat. No rapids. And that river basin sits on the largest contiguous stretch of arable farmland on the planet. It produces one-third of the entire world's corn and soybeans, which are the foods required to raise livestock. Hell yeah. And all of it is controlled deep within the USA and is half a planet away from any possible foreign adversary. It's pretty great to be an American, I'd say. Coming from a person in a farm family. I like that. That makes sense. Also, I looked it up. Could you name any of the Quad Cities?

34:49No disrespect, but... Oh, a Quad City. Where does he say he lives? No, the Quad City. It's like... Between, wait, between Illinois and Iowa. Iowa and Illinois. Let's see. Champagne? I've not gotten any of these. Champagne? Rock Island in Moline in Illinois and Davenport and Bettendorf in Iowa. That's the Quad Cities. Okay, I haven't heard of one of them, but they sound lovely. And thank you for the beef. Kind of feels like, so that all makes sense. It's just that we have this abundance of natural resources here. So I, and waterways, and that makes sense. Oh, here's a go. We should have done this a minute ago.

35:23Oh, okay. I could see this. A bunch of people tagged us on this tweet. There is a Wells Fargo analyst who ordered the same burrito bowl 75 times. Now that's channel checking. Wow, credit to him. At eight different Chipotles in New York City to prove the portion size and consistency. So this guy went around with a scale, a digital scale, do you think? Like a drug dealer? I guess so. All right, so the bowl weight ranges from the median is around 22 ounces, but it goes all the way up to 27 ounces. I got to know which store that is. And all the way down to 14. That is quite inconsistent. I love how on the chart he put a three standard deviation event for the lowest one.

35:59But you know what's interesting? If you are unlucky to get a ball of that size, you're not getting Chipotle ever again. No. Right? The person who does the little half. Yeah. And this is the power of consistencies. Starbucks always tastes the same. The McDonald's nuggets are always great. That's true. How has Chipotle not figured out how to just have all the portion sizes be the same regardless? us. Listen, they're trading at 61 times earnings. They're feeling themselves. They're getting complacent. All right. Hey, this is a first for a while, I think, for us. What is? Nothing in the real estate section of the doc here today.

36:35Does it feel like there's nothing left to say at real estate? There's nothing to talk about. Until something breaks? There's nothing to talk about. Yeah. I mean, it feels like the whole worry for everyone is if rates fall, demand will come back and if rates stay high, demand is going to be on the sidelines for a while. What causes that to break? There's got to be something that changes the dynamic. Yeah, rates. I guess that's it. All right, great chart from Apollo that I found in Michael Sijmore's AltGo's Mainstream Substack. Looking at the chart as private equity funds closed by time spent in markets.

37:10So how quickly were these funds able to raise their money? And Michael says, in 2021, almost 20 % of private equity funds, so 2021 was like, go, go, go, go, go as fast as you can. Almost 20 % of private equity funds closed after less than six months in market fundraising. Funds closing in the first quarter of 2024 weren't so lucky. Around 5 % of the funds closed were in market for six months or less. And only 10 % of funds successfully raised in less than 12 months. So it's taking longer for people to give money, which makes sense. The, the IPO window is still pretty closed. Uh, MNA is it's, it's coming back, but it's not what it was.

37:51And a lot of the deals were just, a lot of people are still stuck in crappy vintages. So the people who do the sales for these private equity funds, I've had a lot of experience with these, these people, I guess you can't call them wholesalers, but it's funny how it works because they, and I, cause I still get emails from these people all the time from my endowment days when we placed private equity funds. And they would basically live through one of these cycles. And it's like, sell this whole fund, and then I'm sure they get some sort of bonus depending on how quickly they sell it, and then they move on to another fund.

38:20And I still get constant emails of, hey, Ben, guess what? It's been 24 months since we've talked. I'm now at blah, blah, blah fund, some Greek word or island or something. And we are raising a fund that is targeting IR, whatever. But the salespeople, I'm sure there's cases where people just stay at the same firm all the time. But it's like, get this one done and move on. I'm almost like a realtor. But it's been tough for those people. Yeah, tough market. Okay, tweet from Kevin Gordon. Consumers feel pretty bad about business conditions over the next six months. Worse since September 2011. I'm just reading that saying, what?

38:58Okay, whatever. We've been over this many, many, many times. I'm starting to default to the fact that just no one answers these surveys anymore. That's kind of where I'm falling on them. Do you get like random text messages or emails about surveys? Do you ever say like, ah, I'm going to take my time out of my day to fill this out? I think there's some information in here, but certainly not as much as there used to be, for sure. But they feel pretty great about the stock market going up. Okay, yeah, well. Usually, these lines mirror each other, right? They're usually going in the same direction.

39:32Yeah. Odd. Odd, odd, odd. Okay. All right, Ben. Ben kicked the hornet's nest, tweeting sarcastically, after my mortgage payment, 401k, 529 IRA contributions, my annual six-week vacation to Europe, private school for the kids, second home in the Hamptons, a handful of angel investments and country club membership. I basically live paycheck to paycheck. This economy is the worst. I think you're too online. I think you're too online.

40:00fair i've been offline for the whole week almost this week i'm uh see i got the tropical bros i'm in vacation you know why i'm not online this week let me ask you a question in your real life do you have have you ever seen anybody heard anybody come close to speaking this way no no the point is so there was answer answer the question in the real life in the real world of course not that That's why this was meant for an online world, because people online were arguing about, someone had made some point like this online about living paycheck to paycheck, but they talked about how they did their, and so obviously I was, this was satire about people who make these complaints online, and yeah, and I had to mute this one, because boy, it kind of took off, and do you think the views on Twitter are legit?

40:43Because it says, this one was kind of a banger. It went pretty viral, but it says two million views. How would you know? I don't know. It just seems like a made-up number to me. I feel like it's, yeah. There's no way it's real. We got a bunch of emails. There is a car called, hold on, let me just play this. What's this called? Behind me is the Ineos Grenadier. Okay, the Ineos Grenadier. It's a car. I'm guessing this is a European car. It's got a toot horn. It's got a toot horn. Did you watch this video? No. So there's the horn where it's like, hey, asshole, move. And then there's the, excuse me, the light is green.

41:23Or they say it's for bikers. So the toot is, it's a toot. It's a light version of the horn. I like that. So we were onto something. There's your midlife crisis car. Yeah, that's a good one. We had a phenomenal comment on, I don't know where this comment came from. What are the podcast platforms? This is from, I think this is a review on iTunes. Okay. In every partnership, there is a person who stacks the dishwasher like a Scandinavian architect and a person who stacks the dishwasher like a raccoon on meth. And Ben is a Scandinavian architect. In fact, you sent me a picture bragging about how it's done.

42:05And I got to say, that's a great looking load. That was a great looking load. That's what she said. I just want it to be known that I didn't prepare for that dishwasher. I'd opened my dishwasher and it was full and I decided to snap a picture for you. So it's not like I was like going all out. That's how I met my dishwasher usually looks. Okay. This is, all right. This is an unusually heavy email show. So I don't know if you like it, if you don't, but. Personal emails, personal responses. Here's another email. I just wanted to add my voice to what I'm sure will be plenty of hopefully good-natured ribbing around you guys pronouncing tarot like carrot, delightful.

42:41With each new utterance, I giggle with glee. I even rewound to listen to it again. I am generally opposed to ha-ha, you misspoke sorts of commentary, but for some reason, this one brought me great joy. I hope I'm not alone. I hope this message does not violate any of Michael's particular electronic email communication protocols, but if it does, please accept my humble apology. No, this is perfect. This is perfect. I think I've never, honestly, never heard anyone use the word before in conversation. No, if you did, you would know how to say it properly. Alright, one last one. This was a flyer, a traveler, who's gone from Edinburgh to JFK, had an unusual airplane experience.

43:19This is an etiquette no-no, for sure. This one is not debatable. This is not a recliner one. I arrived in my seat to find the person in front of me had draped their coat over the back of their seat on from the front of mine. By the way, this happened to curb your enthusiasm this year. Oh, yeah, you're right. Completely unacceptable. Yeah, very, yes. to the point where the entire seat back, including the tray table and the little tablet, were completely covered by the coat. Are you kidding me? I can't watch a crappy movie because you need to put your coat there? No way. As I only had three hours of sleep from the night before, I had no patience for this and politely asked the person if the jacket was theirs.

44:00And when getting a positive reply, I handed it to them and asked them to kindly keep it with them in their seat. The person aggressively reclined their seat as soon as we had finished taking off. What's the show? Stand on draping clothes with a backseat. How could anybody be pro drape? I think this person handled it right too. Because there's some people that would just throw it on them probably. But I think this person handled it right. Is this yours? Please move it. Yeah. That's pretty bad. All right. Recommendations. I got a few. Inside Out 2. Went to see it with my kids the other day. First time I've been to movie theater in a while.

44:33And delightful movie. Very good. Very original. It was not only a good movie with a good message, just a very clever premise. It was really good. Did you fall asleep? I may have fallen asleep for 10 minutes. My daughter was like, dad's asleep. I fell asleep for 10 minutes too. We're turning into our fathers. It's just inevitable. But here's the thing. In my more creative days early in the blog, so for those who don't know the premise, it's all of the emotions in your head. So there's joy and embarrassment and sadness and anxiety. and they kind of fight for who has control over your brain. And they should make a stock market version of this.

45:12Someone should, right? There should be a stock market inside out. What would it be? Fear, greed, envy, all these, right? Anyway. Oh, that is a very, very cheesy blog post that you definitely would have done back in the day. Fair. So anyway, I really liked inside out too. I think it might've been better than the first one. My kids loved it too. And the funny thing is my 10-year-old totally understands it. And she's a little bit of an anxious kid at times. She's like the safety officer. She's like, this is too risky. We can't do this. And I always tell her, hey, listen, let Joy take the steering wheel instead of anxiety for a while.

45:46Oh, that's cute. Right? Was the theater full? We went on like a Tuesday evening. So it was, yeah, no one really. How about you? I find myself falling asleep more often than I used to during. That's great. That's because they have the reclining chairs now. it's the recliners that make you want to take a nap. Yeah. Also, like even during Game of Thrones, but I watch it in bed. I can't, I don't watch TV in bed. It's the only thing I watch in bed. And it's just on Sunday at 10 o 'clock, whatever, I'm tired. That makes sense. All right. This was on the Rewatchables a few weeks ago. I, for some reason, have just never seen it.

46:20It just missed my window. Like a lot of these older movies, Slapshot. Have you ever seen Slapshot before? Okay. It was on Netflix. And it's kind of bizarre because Paul Newman was one of my mom's favorite actors. So I'm surprised I've never seen it. If this movie came out in 1985, I probably would have been in my wheelhouse. And I don't want to like crush anyone's nostalgia for this movie. Cause I, I always get mad at you for saying that all my 1980s movies are suck basically, but I have the nostalgia for them. So that's why I appreciate them. And you watching now, you think like, Oh, that movie's not that good.

46:49I kind of had that with slap shot a little bit. Where it's like 79. I think it came out. It was, it was a good movie. Paul Newman was amazing in it, but it was kind of, it had these parts where I would go, Oh, that's funny to myself instead of laughing. Well, guess what? But if I had seen it when I was younger. Hoosiers, not a good movie. Whoa, okay. Really? See, that's where I draw the line. But I'm sure there's people who Slapshot is literally their favorite sports movie of all time. But just because I missed it the first time, it was pretty good, but it wasn't as funny as I thought it would be.

47:21All right, one more. Why is it that people who, in TV shows and movies, the women in Chicago all work at art galleries? So I'm watching Presumed Innocent with Jake Gyllenhaal. Wife works. Excellent, right? Right? I mean, it reminds me of the Hugh Grant, Nicole Kidman one a little bit because it's a little soap opera-y, but good. I love it. So the wife in that works at an art gallery. They live in Chicago. Dark Matter, Jennifer Connelly, Chicago, art gallery. That's two. Jennifer Aniston, The Breakup, Chicago, art gallery. Okay. Couldn't find a fourth. Three, that's a trend though. That's a trend, yeah.

47:57Right? Like how many people work in art galleries in Chicago? It can't be that many. How impressive was the finale of Dark Matter? Very good. Those shows are very difficult to end, especially a show like that. I told you, I went back and read the end of the book while I was watching the show because I couldn't remember how it ended. And yeah, I - Did they follow the book? Yes, it was where all the versions of him came back. It was, yeah. You mentioned Rewatchables. This week, they did Naked Gun, which is in my absolute pantheon of comedies. one of my favorite movies of all time. See, and the thing is, the sequels are funny too.

48:34They're great. They're really good. Yeah. To me, they all kind of run together because I watched them so many times. The original, the second one, the third one. Was it 33 and a third? Yeah. Yeah. They all kind of run together to me. I feel like they're almost one movie, but yes. Leslie Nielsen was a, yeah. He was awesome. The best. We watched, I showed Kobe and Logan, Little Giants, which was a favorite of mine growing up. holds up wonderfully. Kobe actually said that he liked it better than, or we're not done yet, but he said he likes it better than the Sandlot. And I gotta say, what the hell happened to Rick Moranis?

49:11I know we know what happened. He just went away, but he was... He was another Daniel Stern guy who just walked away. He was so good. That doesn't happen today. I feel like that's the thing that could only, kind of thing that could only happen in the 90s. No, he was so, so good. My dad, I just was reminded of this. my dad was over. They came back from a trip to Vienna and Austria and that part of Europe. And he was showing me like an instrument that Beethoven used to play, something that could help him hear or whatever. And we were talking about Beethoven for a minute. And my dad goes, do you ever see Immortal Beloved?

49:44And I said, yeah, with you. You took me to the theater to see that. And I'm looking up now, it was 1994. This was definitely not a movie from nine-year-old Michael. Can't say I ever saw that one. I vaguely remember it. It's with Gary Oldman. You saw it right after Field of Dreams. I did see Field of Dreams in theater. Okay. All right. That's your story and you're sticking to it. When I was four years old, it does seem a bit outrageous, but I don't know. Listen, I have memories. Maybe they were incepted into my brain, but I was there. Vienna is my favorite city on the whole planet. Very nice. All right.

50:18Email heavy. We appreciate all the emails here. Yeah, thank you. Everyone have a nice 4th of July. what are you doing? Beach? I'll be at the beach on the 4th, and then over the weekend, we're taking Kobe to see sleepaway camps. He's going next year, so that's what we're doing. Oh, I got one more anecdote before we go. We're on vacation this week. Did a little horse riding yesterday with the kids. Why didn't you just use air quotes? I did this. Vacation. And we went horse riding with the kids. Like a little two-hour horse ride, just slow walk through a trail in the woods. You ever ride a horse before?

50:55I'm sure I did when I was young. I couldn't really remember it because they asked me that. But it just got me thinking. I was on a horse for maybe an hour and 15 minutes, and I got off and I was sore. Like, it is not comfortable to sit on a saddle. I was not made for, like, the old times. Like, I think we've talked about this before. You and I would not make it back in the, whatever, 1800s, Wild West. You'd make it longer than I would, let's be honest. People literally used to ride across the country on horses. I couldn't, I did it for an hour and I was sore. How did they do this for days and days on end?

51:27They died. I guess so. I guess that's why people died at age 35 back then. But yeah, to your point about luxuries, things are a little simpler. I can't imagine riding a horse to get around places. No, thank you. What was the horse etiquette back in the day? Like with fellow travelers. That's the thing. They wanted us to ride in a single file line and my horse Elvis kept wanting to pass the horse in front of me. He's like, get out of my way. And they told me, no, no, no, you can't pass. And I'm like, he wants to pass. Let him pass. Anyway. All right. Keep telling those emails. AnimalSpirits at the compoundnews.com.

52:02Thank you, everyone, for your views, your likes, your reviews. What else? The comments. We appreciate it. See you next time.

52:22We'll be right back.