Now Show Japan (EP.349)

24:15Like he understands the behavioral aspect of it as well. And I met him and I remember saying afterwards, like who the hell was that guy? And ever since I've just been a massive fan of him and Jack and the whole team at Alpha Architect, they just do incredible work And they're getting their due because they've got a product that is really unique, intelligent, and popular. It's got over a billion dollars in assets. And the product is very – They didn't even really market this strategy either. They didn't like put it out and try to get a bunch of money. It just picked up steam because of what it does.

24:55So the product is very simple in what it's trying to accomplish. The elegance is like what's under the surface and how they're doing it. they're using box spreads on the S &P 500 to replicate short-term bond returns. Gun to your head. Russian roulette. Explain what a box spread is or you have to pull the trigger. Don't worry about it. I'm saying I couldn't do it. They're buying calls and selling puts and offsetting that and whatever, delta neutrals. Is your delta neutral? Anyway, they're replicating the return of short-term bonds. But the magic is that there's no interest being paid. There's no income.

25:34So the only time that you're going to pay taxes on this instrument, unlike if you're actually buying short-term bills where you're getting interest income, i.e. ordinary income, is when you go to sell. So it's like T-bills without the taxes on the income. Yeah. So massively popular. Just really brings a smile to my face. So congrats to the entire alpha. And the other thing that they really understand at Elf Architect is the ETF structure and how to use it and how the system works. So Allison Schrager… Wait, hold on. Let me just read a quote from Wes. Love this guy. Gray said billionaires… This is from Bloomberg.

26:12Gray said billionaires have long had access to private bespoke schemes to shelter wealth from the IRS. He sees ETFs as a way for regular investors to get some of the same benefits. Here's a quote. We're one of a million products and ideas and innovators that, for lack of a better term, leverage the ETF tax technology to get a better outcome. It's more of a democratization of tax dodges. Let's f***ing go, Wes. Yeah, that's great. And he also says that taxes are a form of, it forces you to behave. Wes always says the reason that people who invest in real estate become wealthy is because they don't want to pay taxes on it, so they're forced to hold it for longer.

26:49And that's a good thing. And he's saying that he wants to kind of do the same thing for ETFs. So Alison Schrager predicted in a Bloomberg opinion piece last week that the government's going to come after 401ks soon. She's saying that, like, eventually there's too much spending. They're going to have to come after something. So they're going to do away with 401k. I think this is more of a hot take than anything. Would they ever come after ETFs like that? For, like, saying, like, all right, this is crazy. We can't have these tax deferrals in strategies like this. Because if they did away with a 401k, you would just put all your money in ETF strategies, right?

27:20I think there's too much firepower, lobbying power behind the trillion-dollar asset managers of the world. And I think that a lot of the magic of ETFs are actually a good thing. What I could see is, listen, if you have a net worth of pick a line, you don't get the tax benefit of like 401ks or something like that. That's what I was thinking too. If you make a$500 ,000 a year or more, you don't get the 401k benefiting the tax benefit anymore. And you know what? Heaven forbid I say I'm okay with that. I don't think anyone would really like get up in arms about it. And if we're being honest, I think people of that sort of level of wealth, wherever the line may be drawn, I think they'd be okay.

28:09Yes. But that's the kind of thing that makes sense to me. Like just phase out so many things above whatever income threshold you want. That's probably stuff that's probably going to happen in years ahead. The problem with this and with all these discussions is that it gets politicized so, so, so quickly. And whatever. Let's not even freaking go there. All right. Ben Johnson did a post on ETFs on the turnover. I think we discussed this in January. But I just want to rehash this because we're going to talk about crypto ETFs in a little bit. But this is a mind-blowing statistic. So he shows a chart of the top 20 ETFs, I think by assets.

28:51Yeah, by assets. And he imputes the average holding period. Look how many Vanguard and iShares. So Vanguard, VTI, the average holding period is a whopping 665 days. Nobody's trading VTI. It's not a trading vehicle. SPY, on the other hand, which is effectively the same exposure. I know VTI is total stock and S &P is S &P, but nevertheless, they're pretty much damn the same thing. S &P or SPY is 17 trading days. Actually, even being more precise, the Vanguard 500 ETF is 285 days. The iShares 500 ETF is 262 days. SPY, again, the S &P 500, it's 17 days. So people trade the shit out of that. Here's the point.

29:36SPY and QQQ alone accounted for roughly 36 % of total ETF trading volume. Isn't that wild? Wow. Yes. Because those vehicles are also used to hedge and as placeholders or whatever. That makes sense. So if you're a bunch of cash and you're going to get it invested in a separately managed account, you don't want to lose exposure to equities. So you put it in SPY while you allocate to those equities or something. I think a lot of it is that kind of stuff too, or shorting and all that stuff. Ben, somebody sent us a picture. This looks like it's from California. Got to be with the Spanish tiled roofs.

30:16Yeah. It's a, it's a picture of seven 11 and there's a little banner hanging over the doorway that says we have lowered our prices. All right. All right. Are we back? We're getting there. Somebody sent us a hot take of a piece that I actually did not have time to finish reading, but they asked the question, does raising rates actually increase inflation? That's a little too galaxy-brained for me. No, no, no. I don't think it is. we have one example of raising rates, taming inflation. It's really the 1980s. I'm sorry. I don't think that the current example that we just lived through, I think inflation would have normalized absent interest rate increases.

31:07I can't prove that obviously, but the basic question was this. Capitalism, and the basic premise is this, quote, capitalism is a credit-based economic system and interest gets cost pushed onto consumers. So if you raise the cost of capital, companies, as we just experienced, will push that through to consumers. We literally just lived through that. Now, I think that if you jack interest rates up and you destroy the economy and you cause a recession, absolutely, that will bring inflation down. But I think that what we just did, taking interest rates from 0 % to, I'm using like air quotes, modest 5%, I think that can actually contribute to inflation.

31:54I don't think that's crazy. Don't you think it's like a scale though? Because when rates are really low, you're borrowing low, but you're not earning anything on your money. And when rates are higher, you're earning stuff on your money, but your borrowing rates are high. It's kind of like a shock absorber where it balances out. Don't you think? The counterpoint is that, or the opposite is not true. Like if the Fed were to cut rates, companies wouldn't necessarily cut their prices. True. Yes. But I think that there's something there. Like maybe everything that we think is true about raising interest rates to slow inflation.

32:28I just think there's. Well, how about this? Corporations are smarter than the policymakers. I'm willing to say that because there's also a story in Bloomberg this week saying that, OK, the cost of debt is so high, we're going to issue more equity. So companies are issuing more equity now because it costs way too much to take on debt. And so I think corporations are much more malleable to the economic environment. This is like the whole thing of Uber really didn't want to make money in the 2010s because they didn't need to. And then 2020 sits in a different environment. OK, we'll make money now.

32:55Well, how about this? The Fed, I just think there's something to consider here. This like common orthodoxy that you raise interest rates and you slowly the economy. I don't think it works that way anymore. We just lived through it. The Fed tried to slow the economy and they couldn't. I saw Neil Dudd had a piece this morning and he said like, so are we really to assume that the lags all of a sudden like 16 months in are just going to kick in? Yeah, no, it's over. He was saying like, listen, the housing market stuff already happened. We already did that. What else is going to be the effect unless you just leave rates here forever?

33:25I don't see it. Like all of a sudden lags are going to kick in because it's been 17 months instead of 16 months. The economy is still strong. Maybe it's a stretch to say, or maybe not, that higher interest rates actually spur inflation. But I think the opposite is more, is kind of crazy. Like, it's not a given to me that higher interest rates are going to slow the economy. My whole thing is rates matter less than people think, and it matters more. The animal spirits, for lack of a better term, matter more than interest rates. Are people willing to speculate? Are they willing to take on debt? Are they willing to spend?

34:00That matters more than rates. I think the emotion matters more than anything. All right, from Axios, I think this is a good thing. The U.S. has 2.7 million more retirees than predicted. This is from something from an economist at a Federal Reserve Bank of St. Louis. That number was 1.5 million six months ago, more than 80 % increase. Before the pandemic, there were often fewer retirees than expected. So this is, we're taking a trend line based on demographics. How many more people are retired than expected? And from 2000 to 2020, it kind of went back and forth, but never really got off trend that much.

34:31now it's way off trend. So higher stock prices, higher housing prices. I'm guessing COVID made a lot of old people rethink their lives. And geez, is that extra four years of working really going to matter to me? Why is this a good thing? Is this a good thing for the, not only for people retiring because guests, they get to spend their twilight years doing something they want. Is this a good thing for the economy? Those boomers are going to be spending money. If they're retiring early, they're going to be pulling out of their retirement accounts. They're going to be vacationing? Have you seen how packed cruise ships are?

35:03I think this is a good thing for the economy if more people retire early. Maybe a bad thing for the heirs and the inheritance, but I think it could be a positive for the economy. Thoughts? Yeah, my knee-jerk reaction is I think you might be onto something. That's possible. All right. After last week's show, we've been talking a lot recently about how the U.S. is just kicking everyone else's ass in the economy and how we have more entrepreneurs and all this stuff. And Duncan actually last week after the show said, and we talked about maybe the solution to more screen time is taking more vacations.

35:36I said it tongue-in-cheek, but I kind of meant it. So Duncan sent me this article that said, three European countries top the charts for their generous pay. It's like, which countries have the most paid-off vacation days? Austria was number one with 25 days of paid leave and 13 public holidays on average, bringing a total of 38. France and Spain had 36 each. South Korea had 31 days. The U.S. had 10 total days, almost four times less. So, sure, they have less economic growth over there and productivity and their stock market's not as good. But do they actually have life figured out more because they take more time off and enjoy themselves?

36:07It's a pretty good – it's a good conundrum there. Yes, yes, we have a great economy and our stock market kicks ass. But we're all overworked and stressed too much and don't spend enough time relaxing and taking vacations. I don't know what the right answer is, but it's something to consider. Maybe they have it way more figured out than we do. Yeah, sure. Our economy hasn't grown for 36 years, but we all get four weeks off of vacation. How much time off do you need? That's the American mentality though, isn't it? I mean, honestly, like, listen, I know we opened the show saying how unique we are and that we love our job.

36:42I can't wait to get back to work. I love Mondays. I don't want to take time off. I know. I'm just, I don't know. I'm just saying maybe this is part of the reason that we're all so worked up here all the time. We have road rage incidents and people getting into flights on airplanes. Guess what? With all these 38 days off a year, you're not getting AWS. It's true. I'm just saying that's a trade-off though. It doesn't seem like a trade-off. How much vacation do we need? How many vacations do we get a year? You're going to have an iPod surgically implanted in your eyes so it never goes away. And Europeans are going to be on the beach smoking cigarettes in their Speedos.

37:20That does sound nice. I would love to be on the beach smoking cigarettes in my Speedo. And you do have a Speedo. No, I don't have a Speedo. I told you that story. Yeah, we went over this on the air one time. You wore it on your honeymoon, right? Or on some vacation? Not quite. It wasn't a Speedo. Robin wouldn't let me. I tried to buy one. It was just like my underwear. Tell Robin, if we go on a family vacation together, though, it's going to be all tropical bros all the time. All the time. She's going to have to get used to it. When you walk into a Burlington, you're walking into amazing prices and great gifts.

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38:52All right, I reserve the right to make fun of you when you wear it. I've never in my life bought the V1 of anything, and I didn't think I was going to buy the Vision Pro. I really didn't. What got me over the edge was - Come on, you were like one of the first guys who invested in NBA Top Shot. You were in Vision one of that. Oh, fair. I don't want to wait for the second one what if the second one's two years away I don't think you're going to miss anything but I think you should probably get it I kind of figured you would really? oh yeah you can do a whole podcast with it on do you think I'm going to return it in two weeks?

39:28no I'm sure you're going to love it I'm incredibly excited alright I'm still holding out this is out of my character to splurge on something like this I don't do this so I've got a theory I'm stealing from Derek Thompson And you see a lot of rich people complaining about the economy, even though they've benefited more than anyone else for the past 40 or 50 years, for sure. I have to reject this a little bit. I'm sorry. When you say you see, you don't see the people that aren't complaining. This is very much online behavior. Okay. But a lot of people are online these days. How many? I mean, not really.

40:04When you say online, we're talking about Twitter. Nobody's on Twitter. Also, speaking of online, someone did point out that waiting in line, you say on, and I did notice it. You said it twice last week. I didn't want to rub it in because you were feeling bad already, but you said I was waiting online for something like that is a weird way to say it. So that is a weird way to say it. I, it never occurred to me when you wait. It makes it sound like you're, you're going on AOL. Right. I'm waiting online. You're waiting in line. And I, I said that I mentioned that to Chris, I was like, Hey, it's weird that I, that I say that I'm waiting online, right?

40:36Because you're in a line, like you're in line. And Chris was like, wait, I think I say online. Maybe it's Long Island thing. It's a Long Island thing because you say I'm on Long Island. Yeah, but I agree. Objectively, being online, standing in line is the proper way to say it. But anyway, I sort of reject the premise that rich people are complaining about money or complain. But go ahead. What's - Again, and maybe it's a political thing. I just think there's a lot of rich people complaining about the economy and gaslighting people into like thinking that the economy is worse than it is. You have to admit there's a lot of that going on.

41:07There has been for some time now. I don't have to admit that. I don't. Okay, that's fine. Present the case. All right, well, so Derek Thompson had a really good podcast on the other day all about real wages. And he's saying the growth in wages for this cycle has been women's wages have been higher than men's, black wages have been higher than white, young wages have been higher than old, and low income has been higher than high income. The growth, not the wages themselves, obviously. I think we've seen such an unwind of some of the trends that have been happening. And I think some people do not like it.

41:40And I think a lot of it is politically motivated, but I think that a lot of that has been going on and why there are certain people who try to tell you that the economy is worse than it actually is. I'm sorry, I reject it. I don't think that the people that you are making up or talking about, I'm not saying they don't exist because certainly they do. You think that they either see this data or just intuitively know it and don't like it and are having a fact that she can't. Think about all the people that complained about McDonald's. I'm paying$12 at McDonald's instead of$10 at McDonald's. Dude, that's effectively one person.

42:13It's such a small, tiny fringe group that is being vocal about that. All right. I think you're wrong. Think about all the sentiment indicators for the last two years have been negative on the economy. How do you explain that? That has nothing to do with rich people complaining about the economy. That's actually the opposite. It's everybody else complaining about the economy. And I think a lot of rich people have been gaslighting people on the lower income side of things to think the economy is worse than it is when they're the ones who have seen the biggest benefit. You think rich people are gaslighting everybody else?

42:41I think a lot of them are. You don't think that that's been happening in the media? All right. I don't know. No, I don't agree with that premise. All right. Here's another one. Non-managers have seen stronger inflation-adjusted wage growth since the pandemic than managers. Look at this. this is a huge divergence since 2020 of the managerial class doing a lot worse than the non-man. This is, and this is a good thing again. And I think a lot of people don't, aren't realizing what a good thing this is. It is very interesting that like upper middle class people are being outperformed by everybody else.

43:18Yes. That hasn't happened in a long, long time. Yeah. I don't know. Listen, maybe, maybe I'm wrong. I'm not trying to be too harsh on your rich thing. I just, I genuinely don't see it. All right. Well, you, you're not online as much as me anymore. Maybe I'm in too much in the online discourse, but I see it happening quite a bit. All right. This is interesting from the wall street journal. Half of college grads are working in jobs that don't use their degree. Uh, and they show the share of grads in these certain industries. And, and, uh, the whole point of this is like, well, maybe college isn't worth it.

43:47You don't need to go to college. How many, I know a ton of people who studied a certain thing and went somewhere else. And I think that's normal that you don't figure out what you're going to do for the rest of your life from age 18 to 22. Listen, I studied economics and I became a waiter. But I was also thinking like, if I could bottle up that first, the feeling I had the first week of going away to college, being on my own for the first time and meeting new people and going to parties, I'd be a billionaire if I could bottle that feeling. And a lot of people say, do I need to spend a hundred grand to like party and get away and be on your own for, no, you don't have to do that, but like there was so many other aspects of college that are totally worth it, regardless of the area you go into.

44:29Of course, not everyone's going to figure it out. That's just the law of averages because more people are going to school, less people are going to figure out and find the dream job that they want. I think that's normal. Yeah. You're giving me the sweats thinking about my, uh, my first week of college. What was that? Did you not go into classes? Just not going to classes and just falling so far behind and And I definitely, my first semester of college was by far the worst grades I got. I don't think I got a 0.0 like you did. I got a 0.9. But I definitely did the worst that it took me a while to figure it out too.

45:07But there is something about the, I don't know, that, I don't think you can put a price tag on the experience of college. I agree. I agree. All right, let's talk about the ETF. ETF, talking about the crypto ETF specifically. Balchun has tweeted, the 10 Bitcoin ETFs netted$2.3 billion last week. For context, that is more than any other ETF took in. IBIT alone was number two. This brings total net to$5 billion, which is more than BlackRock as a whole has taken in. Again, this is all net of GBTC bleed. Throw that out and the number gets even crazier. So pretty wild chart there. Beltran has also tweeted, it's official, the new nine Bitcoin ETFs have broken all-time volume record today, today being yesterday, with$2.4 billion just barely beating at day one, but about double their recent daily average.

46:00IBIT went wild, accounted for$1.3 billion of it, breaking its recent record by 30%. And lastly, James Seifer tweeted an update on the Cointucky Derby, as they're calling it. This is truly mind-bending, Ben. the Bitcoin ETFs have$40 billion in assets. Even if you take out GBTC, completely take that out, it's a hair under$16 billion. So is it one month in? It's one month in and it's$16 billion. Even if you assume that some of the GBTC money converted into other ETFs, I don't know, $2 billion make up a number. Even if you take that out, so now you're at$14 billion of inflows, of new money coming into the ETFs.

46:52$14 billion. Maybe it's$13, maybe it's$14. It's a lot of money. It is. It's a lot of money. It is a lot of money. So I took the L.I. said I lost, but you also said$100 billion, so you're going to be wrong too. I don't know that I said$100 billion. You said$100 billion. I mean, listen, I feel like that's a classic. That's a deflection. Just because you were wild? I already took, I took the L. I said I did. But I also think I was the one, it did sell off and crash a little bit at the new, at the, people sold the news. What does that have to do with anything? I said, I think that's going to happen.

47:26It happened for like a week, but. Anyhow, the price. I'm willing to take the L. I said that. The price is, the price is going bananas. Bitcoin is 57 ,000 this morning as we speak. I still don't get how this isn't bearish for Coinbase. I know people are still trading it after hours and such and want to trade it 24-7. I still don't, because Coinbase just seems to follow the price of Bitcoin. I still don't understand how this is not bearish for them. I've been wrong about this the whole time. Matthias tweeted, 832 new Bitcoins created in the last 24 hours. A single ETF just purchased 81 % of that new supply.

48:05Jeez. Okay. So how is this not bearish for Coinbase? It's very simple. The higher the price goes, the more activity there is. I mean, that's exactly what it is. It's not more complicated than that. But shouldn't there be less activity on Coinbase? Why? Why? Because there's more stuff, more people trading ETFs as opposed to buying and selling on Coinbase. Apparently not. People that are trading on Coinbase are trading on Coinbase. All right. This is interesting. David Ingalls from Bloomberg wrote that from the bottom. Again, hold on, dude. One last thing. Like, maybe beating a dead horse here. The ETFs trade from 930 to 4.

48:37So the reason why Coinbase is correlated to the price of Bitcoin It's just the higher it goes, the more people want to trade. It's just that simple. I get it. This is interesting to me, too. People thought this was going to change. It's kind of amazing still having David Ingalls from the bottom. Bitcoin and Ethereum, he plotted them both out. They're both up 110 % from the October bottom and more or less have followed each other. Remember when people were saying, like, Bitcoin is going to get left in the dust or Ethereum because it's programmable money or it's a computer is buying the HTTPS ahead of whatever people said about Ethereum?

49:06It still just tracks Bitcoin, more or less. It's kind of wild that they haven't diverged more. I mean, I feel like that's cherry picking. Because if you look at a price of Bitcoin divided by ETH, they diverge. Okay. Yeah, I guess. It's kind of like the NASDAQ and the S &P a little bit. But I guess a lot of people predicted Bitcoin is going to get left by the wayside eventually. And that hasn't happened. No. All right. Good news for homebuyers. I'm trying here. Let's go. Trying to find good news for homebuyers. Mike Simonson, 498 ,000 single-family homes on the market. That's a 1 % more than last week and 16 % more than last year at this time.

49:46He's saying mortgage rates are finally starting to help with inventory a little bit. So he has this chart that shows when rates in inventory were rising, or when rates rise, inventory rises, and when rates fall, inventory falls. And I think he's saying people are coming around the idea that, well, maybe these mortgage rates are higher for longer and stickier than we thought, and that is actually driving inventory up a little bit. Still way, way lower than it was pre-pandemic. But I guess we can build on this. As long as, I mean, don't you think it's, we always say never try to time the housing market.

50:19If you can afford a house and you want to buy it, buy it. Don't try to time it. But if you could buy one now before rates fall and we get a demand surge and then you can refinance, isn't that almost a better option? I completely agree on with everything you just said. Timing the housing market is not wise. But if you can afford to buy today, before rates eventually fall. I think it's a smart decision. Duncan just popped in here. Just said, John check. Here is Michael's Bitcoin numbers several shows back. Okay. I said 100 billion off the cuff, but I walked it back to 50 billion. Okay. That, I feel like - 50 is going to happen.

50:56This year? I don't know about this year. I don't know if I put a timeframe on this, but that's - We said this year, but - Okay. Well, it could happen. if it's at$15 already, XGBTC. Yeah. If the price goes parabolic, you could be right. Fair. Okay. It's like 60-40, me to you, for losses. Everything's 60-40. All right. There was this piece in the New York Times someone sent me. Are these real homes? The Great Compression and Housing, and they're like 500 to 700 square foot homes. And it's saying, for people who thought the dream of housing was over, there are these little homes now. These are real?

51:34And these are real. It's like 500 to 700 square feet. And if you look in the inside of them, the kitchens are nice. They got a nice, it's - Where are the stairs? Hold on, I gotta see this. Is it in the - Click on the thing and there's more picture. But it's just saying, listen, a lot of the post-World War II suburbs that people are, you know, we wanna go back to the 1950s, those were about 750 square feet. And that's about the size of these little houses they're building now. And it's a small percentage of places that are building them. But there's these neighborhoods cropping up and it says people are buying them for like 145 ,000.

52:03They're affordable. And you can actually own a home. It's just smaller. And a lot of people are saying, this isn't a great thing. But a lot of people are saying, look, this is great for me. I become a homeowner. Yes, it's smaller. Not what I wanted, but I can afford it. I like this trend. It makes sense. I don't know. Those are really small. But again, that's what it was in the 1950s. People keep saying, why don't we go back to the 1950s? This is the 1950s. That's how small those houses were. All right, 750 square feet. I mean, listen, that's the size of an apartment, so. That's what it said. It's an apartment size, and you get to be an owner.

52:37All right, here's a question I have I'm going to pose to you. I was thinking about this. People trying to, like, time the housing market based on where rates go. Why doesn't the Fed set mortgage rates to? Now, I know the pushback initially would be like, well, you don't want the Fed having to do, like, credit checks, and the rates are different based on your different. But why isn't there a band of mortgage rates set by the Fed? So people can actually – because, you know, the Fed sets all this stuff about here's where we think the Fed funds rate is going to be. They're not right usually, but if the Fed could give people expectations about mortgage rates, maybe we wouldn't have to have such a weird housing market all the time.

53:08And people could actually plan a little better. Like if I know the range of rates for the next 12 months is going to be 6 % to 8%, I can plan accordingly. Why wouldn't the Fed just set mortgage rates if they want to have more of an impact on economic activity? like why should we have this spread that can blow out and compress based on bond buyers as opposed to the fed just setting them i guess my knee-jerk yeah i guess my knee-jerk reaction is like isn't it enough that the fed sets overnight rates and do we really want them setting mortgage rates well if the fed really wants to impact the economy wouldn't this have a bigger impact than changing short-term rates because we've already seen short-term rates don't have that as much of an impact as they thought they were mortgage rates follow interest rates the the spread isn't constant.

53:53No, you know what? I don't want them. No, I reject that. I don't want the Fed touching our mortgage. The volatility of the mortgage rates is what really I think could screw people. No, but they do impact that by buying or not buying mortgage bonds. Yeah, buying$20 billion worth of mortgage bonds a month keeps the spreads really tight. I don't want the Fed involved in my mortgage more than they already are. For such a huge market and a big piece of the economy, I think it would help a lot. By the way, that sounds ridiculous because all I have, the only person I have to thank for my 3 % mortgage is the Fed.

54:23So I maybe thank you, Fed. Yeah. Again, I just don't think it's fair that we were able to get 3 % mortgages and now people have to pay seven. I don't think that's fair. I don't think that's fair either. I guess life's not fair. No, it's really f***ed up. It's not fair. I just don't know what the answer is. What's the answer? You just say mortgage rates are 3 % forever for everyone? No, I think every first time home buyer gets the chance of getting a 3 % mortgage. I think that's fair. You have 18 months to do it. Go. After that, sorry. So if you come into the 19th month, now you're f***ed. Yeah.

55:01I don't know. I'm all about fairness, but markets aren't always fair. Life's not always fair. It's true. So Ted Ghioya wrote a post. I don't know if I'm saying his name right. And he has a chart that he calls the rise of dopamine culture. and it's athletics, journalism, video, music, images, communication, relationships. And it shows slow traditional culture, fast, modern, and dopamine. So for sports, for example, it goes from play a sport to watch a sport to gamble on a sport. For journalism, it goes from newspapers to multimedia to clickbait. And you know where this is going. He said, the fastest growing sector of the culture economy is distraction or call it scrolling or swiping or wasting time, whatever you want.

55:43but it's not art or entertainment, just ceaseless activity. The key is that each stimulus only lasts a few seconds and must be repeated. It's a huge business and will soon be larger than arts or entertainment combined. Everything is getting turned into TikTok, an aptly named platform for a business based on stimuli that must be repeated after only a few ticks of the clock. I agree with some of this, but I also reject a lot of the premise. Okay, go ahead. I'm thinking of my own personal media consumption. Yes, I don't read as many books as I did in the past, but I listen to way more podcasts. So I'm not listening to two or three minute things on the news.

56:19I'm listening to hour, hour and a half long conversations. That's longer. Most of the stuff I would watch that was really good entertainment in the past was movies. Now I've extended that to watch TV. Like so many of what would have been movies in the past around miniseries or TV shows, that's longer than it was in the past. Right? So I think everything is shorter. I think I sort of agree that there's no doubt that TikTok and Reels is big, big business. But are we all zombies addicted to Reels and forsaking watching sports or watching movies? I think this post is fair, but maybe went too far to one side.

56:58It's clever. It was very clever, but I don't think it's totally accurate. Speaking of podcasts, I was listening to Simmons with Spade and Carvey, and he was making an interesting point about SNL because they were talking about SNL a lot, that it doesn't work anymore because there aren't enough singular references where everybody would understand the joke because the culture is just so bifurcated these days. Right. I thought that was interesting. I also thought it was interesting that Shane Gillis, who I'm seeing in a week, I'm very excited about that. I thought it was, it was interesting that he's hosting us at a big place or like a comedy seller, uh, radio city.

57:36So he famously got canceled for, for, uh, for saying some stuff, um, from SNL. Oh, that's right. He got fired from SNL. He got fired. He got fired. And I wonder if like that sort of stuff has swung too far where everybody's like, all right, can we bring it back a little bit? Like, could comedy be comedy? Are we allowed to like laugh without canceling people. And I'm pretty, feel like a tinge of optimism that. We do. There's so many comedians out there who say like, you can't say anything funny anymore. It's not true anymore. Yeah, they're saying as much as they want. So I think that movement of you can't say anything anymore without getting canceled, I really think, and I hope that peaked.

58:16I think it's behind us. Yes, I agree. Also, on the other side of this, like going away from like the reels and stuff. So Matt Bellany got a great feature in Vulture over the weekend. He has, and I'm a paid subscriber to Puck. I think they do incredible content. I'm a huge fan. They have 15 ,000 paid subscribers. So I think there's huge demand for, not long form, I don't want to read anything for three hours, but for just quality. Yes. In a niche format. Yeah, you and I like paying attention to the entertainment world stuff because it's the intersection of movies that we like, and TV, but also business.

58:55Yeah, and finance. All right, this is a great email. Gents, read Michael's Martini Choices. What makes the martini the greatest of drinks is its purity and simplicity. The realization that there is nothing better is the arrival of wisdom. A martini is ice-cold London gin and a hint of extra dry vermouth with a twist of lemon and an olive. Never foul it with olive brine. A dirty martini is just that, filthy. The brine overwhelms the fine taste of the gin. It sounds like an email that came from someone in England. On that note, vodka is tasteless grain alcohol and doesn't belong anywhere near a martini glass.

59:30Wow, shots fired. Related, there's zero difference between vodka brands. So-called espresso martinis and other kiddie variants are an abomination. Good only for 20-something women with bad taste. They are not martinis. Great show, aside from the espresso martinis gag. Keep it up. This person, I'm pretty sure they said they're bread ashore. I've already solved the reason that martinis are so great. It's not the stuff that's in it. It's the glass. That's it. Sorry. 70 % of martini is the glass. But you were saying it's like psychological. It is. The glass makes it. This guy, if they put this in a, if they poured him a martini in a wine glass or a pint glass, it wouldn't taste as good.

1:00:07It's the glass. He thinks it's the vermouth. I agree it wouldn't taste as good. It wouldn't taste as good. It's not psychological. It wouldn't taste as good. There's something about the glass. Science, Ben. It's psychological. Did I just call you Ben? It's science. It's science. Okay, what's this about Denis Villeneuve? Oh, so your boy Dean. By the way, he looks like Kevin Young. I can see that. So he said, this is great. Frankly, I hate dialogue. Dialogue is for theater and television. I don't remember movies because of Good Line. I remember movies because of a strong image. I'm not interested in dialogue at all.

1:00:41Pure image and sound, that is the power of cinema. But it is something that is not obvious when you watch movies today. Movies have been corrupted by television. So this isn't, he's saying that like television has made it worse because there's so much more time and you've got to fill. And I kind of agree with him, but there's a good finance panel up here. You're a dialogue guy. You love dialogue. I mean, past lives with nothing but dialogue. That is true. Denis and I are cut from the same cloth. We're movie guys. That is true. I think in my recommendations, I might be kind of turning into a film guy.

1:01:12I'm 90-10. So I watched - The Holdovers. You loved The Holdovers. That's not a film. That's a movie. That's a great movie. Yes. You didn't watch it yet? No. I don't think I'm going to like it. Should I show it? So my wife and I watched Anatomy of a Fall, which I guess is up for a few Oscars. But it is a French movie with I think half the movie is in French with subtitles and half of it is in English. And this is definitely a movie you wouldn't like. But it's essentially a couple who lives in the French Alps. And they find the husband dead. He'd fallen out of the top floor window. And it's a courtroom drama of did he kill himself or did the wife push him out of the window?

1:01:53and it's two and a half hours and halfway through the movie, you go, how can this keep going? But it was really, really, it's like a movie that really makes you think. Why would I not like it? I love courtroom dramas. Okay, give it a try. I just don't think it's a Michael movie. It's all dialogue. You might be right. Okay. You told me, watch Blackberry. It is one of the best business movies I've ever seen. And so I found it on Hulu. That's a strong statement. Am I right? Was I overstating it? It's definitely one of the best business movies of this century. It's way better than any of the stuff.

1:02:25Of this century. Okay. So any of the stuff, remember all the Steve Jobs? They did two Steve Jobs movies. They did that Uber show and the WeWork show and Elizabeth Holmes, all that stuff. It's way better than any of that stuff. I thought it was really, really good. And the guy from It's Always Sunny was fantastic as the jerk CEO. He was so good. He was incredible. The opening scene when the two nerds came to pitch him was one of the best opening scenes in recent memory. It was that good. It was the only credit to our listeners. We had a bunch of people email us and I just have been telling us about this.

1:02:56I couldn't picture Blackberry being good. It was such a good movie. The only nit I have to pick with it is I love what's the Jay Baruchel, that guy. I love that guy. His hairpiece in it was awful. Okay. Really bad hairpiece. Other than that, how about the guy that's a really good movie? Wait, who's in charge here? Mike's in charge and Mike says, no, that guy, the dork. Did you read the story about him cashing out BlackBerry Rim stock in the 2007 highs? And he's a billionaire because that stock crashed, obviously. He cashed out at the 2007 highs before the crisis and walked away the richest guy from there, I think.

1:03:33That movie worked for a lot of reasons, but it was primarily because of those three characters. The characters were so good. Yeah, I really enjoyed it. And obviously, there were some liberties taken. But the whole – and seeing them get to the point where they didn't see the iPhone coming, I thought that was – and it didn't like dwell on it. It really moved fast through all the time. Like it could have dwelled on specific time. I thought it was really well done. Really good movie. Awesome movie. Awesome. Biggest upside surprise in a long time for me. Yeah. Did you watch – oh, yeah. We spoke – so Curb Episode 3.

1:04:06I was a little bit, uh, not down to say it is the wrong word, but like the first two, the first two episodes of the new curb season were not great. They were fine. They were just, just totally fine. And I was like, all right, I guess sort of, I guess Larry lost his fastball happens. Um, and I was wrong. The third episode was one of the hardest I've ever laughed. We watched it on Saturday night. Uh, after we came home, Robin thought I was going to wake the boys. She videoed me, unbeknownst to me, laughing. You sent me the video and you were just dying. I couldn't. I bet you had tears in your eyes.

1:04:38That was that kind of laugh. Oh my God. Dude, you gotta, yeah, tear, forget about it. I couldn't breathe. And then like even 30 minutes after the show, I just started bursting out laughter. She's like, oh my God. I can't believe how funny he is still. And him and Leon, I can't believe it. I cannot believe how funny he's still. My wife and I talk about this and it's the show that has given me the most belly laughs of any other show. I don't just like smile or laugh or say that's kind of funny like other comedies. I belly laugh. My stomach and face hurt. And there's no feeling in the world that is comparable with that sort of laughter.

1:05:13So thank you, LD. You still got it. All right. Lastly, the new Costner trailer, it's called Horizon, an American saga. Is that right? I think so. Yes. Well, I'm all in. Two parters, I think. Oh, is it? Yeah. Okay, I'm all in. I mean, how great does that trailer look? I just want to temper expectations. Why? Yeah, I know greatness when I see it. Is this going to be Waterworld, or is it going to be Dances with Wolves? Dances with Wolves. All right, I'm just saying there could be a lot of variance in the potential here. Nah, don't listen. This is no time for the Grand Rapids hedge. It's time to go all in.

1:05:54I went to Waterworld at a theater. I remember that. Oh, yeah. That was a tough one. All I'm saying is Costner has that in him. We all do. That's 90s Costner. True. All right. It's got to work for him because he left Yellowstone for this. All right. It's good to be back, feeling better, having fun with my guy. What a week. What a great week. You're still in the clouds still. I can't believe it. Yeah, I'm very proud of myself. There's nowhere to go down from here. Nowhere to go down. All right. Thank you, everybody, for listening. Animal Spirits at the compound news.com. Personal emails, personal responses.

1:06:36No, someone said yesterday they got Eli Manning on the show. No more personal responses. No, we still come with personal responses. Not only am I doing personal responses. I almost hate to say this because I don't want the flood to gate to open too much. I'm doing personal phone calls. When kids email me asking for advice, I give them my phone number. I'm taking phone calls. Yeah, I've had a few college career advice sessions. But I think the greatest thing about the people who email us is I feel like our audience gets us. And because every once in a while we'll have a, I feel like I'm in the same wavelength as you investing or movies or whatever.

1:07:07So we appreciate everyone who reaches out. All right. Animal Spirits. Oh, I did that. We'll see you next time.