The Biggest Risk in 2026 (EP. 444)

23:55This is going back to 1950. So yes, we had higher cash balances in the 1950s, but look at this. This is household cash as a percentage of total financial assets. And this thing since 2020 took off like a rocket ship. Now, obviously it helps that interest rates rose, but in a bull market, would you have assumed that we'd have record amounts of cash? I looked at this chart and I said, there's no way this is true. This can't be true. This is crazy. That's crazy. Do you think a lot of this is, I don't know, some money came out of bonds? like i mean that was the easiest trade of the decade pretty much if you went if you decided bond rates were on the floor i'm gonna go to cash and cash is yielding five percent i'm not gonna deal with volatility in bonds you think that's part of it i'm trying to come up what do you think you think there was like any implications of this like well they're they're trying to say this is dry powder but i think this is just i also think it was a decade of zero percent interest rates.

24:52Cash was underfunded. Cash was underfunded. I think this money's stuck. Not literally, but I don't think it's going to move. But this is a percentage of total financial assets. So real estate had a huge boom in this decade. Stocks had a huge boom and cash still grew as a percentage of those assets. That's the surprising thing. Okay. You mentioned this before. The economy keeps growing. This is a little thing I have both in the Wall Street Journal. U.S. economy posts robust growth in the third quarter. Robust, see if that makes you sound smart if you say that. GDP grew at 4.3 % annually in the third quarter.

25:26And the economy keeps growing, and a growing number of people seem to just not believe it. This is the most hated economic expansion ever. It's not a close second. How many people would believe you if you said, yeah, the economy grew at 4.3 % real in the third quarter? Bring that to your holiday dinner and ask someone, How much did the economy grow? Most people probably tell you it shrunk. Now, remember, this is on an inflation-adjusted basis. How does this keep happening? The economy just keeps growing. We ran a poll in our channel on YouTube about the debate we had last week or the question that we posed.

26:05Would you go back to 2019 wages if it meant 2019 prices? And it was about a 50-50 split. Now, we have an affluent audience, well above average income, and even still, it was 50-50. So could you imagine if you pose this question to the average person? I think it would be like 80-20 would want to go back. And I think - Did we make the lost joke last week, last time we did this? No. What lost joke? Like we have to go back? Oh, no. one of the great reveals in television history for me blew my mind when that happened. I just think most people underestimate how much their wages have grown relative to prices.

26:55And I think the people who say that would, would be hurting if we really did go back. I don't think so. If they saw their paycheck the first time they had their paycheck, they would go, Oh no, now we have to go back there to the future. Um, I don't think so. I think the psychological damage of inflation is so obvious at this point. All right. So if I was more creative, I probably would have done this. And you know the meme of the Grim Reaper going from door to door, and then they put the thing that it killed? I should have done this. So I'm oversimplifying here. But let's say in 2022, AI started right as inflation peaked at 9%.

27:34AI kind of killed inflation or helped kill inflation, the spending. 2023, AI killed recession prediction. 2024, AI swamped the housing recession. Didn't matter, we had AI. 2025, it was tariffs. What's going to matter more, tariffs or AI? AI mattered way more. 2026, I guess it's AI versus the labor market. Is AI just going to keep winning every year against these challengers? When you say win, what do you mean by AI versus the labor market? So I'm saying you had this bad thing happen in the recession that could have brought it down, right? You had these things that are happening and it's like one of these is going to matter more.

28:08So we're either going to have a recession and this is going to slow the economy or no, AI is going to keep propping it up. And guess what? This whole run, and again, I'm oversimplifying. That wasn't the only reason, but will AI just keep thwarting these things? Through the lens of the stock market? Yes. The economy, in terms of what's going to matter more. Like, yeah, the labor market is slowing, but why does the economy keep growing? And why does, right? Everyone keeps talking about the labor market, the labor market, the labor market, the labor market. Guess what? The economy just grew 4%. So obviously it doesn't matter yet.

28:38The labor market hasn't mattered. because of all this other stuff going on. Will AI continue to be the thing that just dominates? Yes. And it'll matter more. I kind of think AI will probably keep winning. Me too. Top. Maybe. So this chart from Charter shows that fears of recession, and I think to your point about this being a crazy year, this is polymarket implied chance of a recession. In April and May, the chances of a recession, this was from bettors, people putting their money on the line, was almost 70%. And had we kept those tarot policies in place, I think it probably would have happened.

29:15So I think those fears were not out of line at the time. But it just shows how, and now it's almost down to zero. So I'm getting involved in recreational prediction markets. I don't know why I said recreational.

29:32I think there's some value there, Ben. I got to be honest. All right, so here's a - Wait, some value in what? In predicting recession? So here's a prediction that I made. I spoke about this with Vlad. And there is something in a better's brain, at least in my brain, okay, where if I'm on FanDuel, I don't want to bet on things that are minus 500. Right? I don't want to bet 500 to win 100. That's terrible odds. But if you tell me that there's an 83 % chance of something happening that I feel really strongly about, I say, whoa, that's a 17 % free return. It's the same thing. So for example, on Polymarket, not on Polymarket, on Calci, betting that the Seahawks won't win the Super Bowl, okay, is only 86 cents.

30:27I feel like that should be 97 cents, 98 cents. Seahawks aren't winning the Super Bowl. By the way, it'd be hilarious if they do, but they're not winning the Super Bowl. Sam darned. Get out of here. What are you, nuts? Did you stay for the Rams game the other night? That was pretty good. That was pretty massive. Well, that's why the odds spiked. Okay, did you see him last year and the rest of his career? Either way, for 86 cents, so I can get a 14 % return that the Seahawks won't win the Super Bowl. So you're trying to arbitrage here. You're trying to like - There's no arbitrage. It's just I feel very confident that's going to happen.

30:56Okay. That's 14 % free money. So speaking of the gambling stuff, Kyla Scanlon has a piece of the Wall Street Journal, why my generation is turning to financial nihilism. And she talks about how people in Gen Z, I guess, I didn't realize this term by a podcaster, the financial nihilism. And it's like, she says, to many people, this lack of trust doesn't make any sense. Doesn't every generation have a financial struggle? Of course, each one adapts to the pressures of the moment. Post-war America responded to the instability of the depression and war by building a world that promised stability, suburbia, de-industrialization, de-industrializing America answered the collapse of union jobs by elevating college degree.

31:29Every era produces its own response shaped by the opportunities and constraints of its own time. But the post-war idea of upward mobility was always contingent on certain fundamental strong institutions, affordable education, accessible housing, and stable work. Now those conditions are buckling. And she talks about how people are just gambling their faces off on everything. And I tend to think that this is not, there is some financial nihilism to this. I tend to think it's just the barriers have been broken down. Because if you gave me at age 18 the ability to gamble, I would have done it. The first time I ever played blackjack, I may have told this story before.

31:59We were on a cruise, and you could go in international waters. You could gamble at age 18. So guess what we did? My best friend Chris and I in high school, the first thing we did our senior year of high school, we went on a cruise ship. Everyone else went to go check out the pools, and we went straight to the casino. It was like 10 in the morning. There was no one in there. We sat down, and the dealer literally taught us how to play blackjack. I was hooked. We were in the casino every night after that, okay? My first taste of actual gambling, and I loved it. You know what the minimum bet was on this cruise ship when I was 18?

32:27Five bucks? $2.50. Ah, simpler times. So, Ben, you know - If I would have had access to this all the time at age 18, I would have, in sports, like I never got the ability to bet on sports. I didn't have a bookie or something. You couldn't bet. When I went to Vegas, you'd put like a one bet on a sports thing as like a novelty thing. The ability to do it now in your hands, I think that's it. I think it's just easier. And young people are going to gamble because of that. Young people like to take risks. You know the, you know, in Dumb and Dumber, when Lloyd says to Harry, you are one pathetic loser.

33:00All right. That was, that was me and my 21st birthday. On my 21st birthday, I was home by myself, kicked out of college. Robin just stared at me. Yes, it's true. You were there. And, um, I had nobody to celebrate with. So what did I do? I drove, she's laughing. I drove to Atlantic city. I had maybe$400. I lost it all in under an hour. I turned around and I drove home. No one took you to the bar? Like in Swingers. Oh, wow. That's how I celebrated my 21st birthday. So I think - How long did you take a drive to Atlantic City from Rhode Island? Dude, it's not a short drive. It's three hours plus. It's not a short drive.

33:50I was there for 20 minutes. Wow, okay. Okay, so back to Kyla's piece. Listen, she obviously spends a lot more time with young people than I do. So I don't want to be this out-of-touch 40-year-old saying whatever, yelling. Yeah, this is her generation. She knows it more than we do. Because the unemployment rate for 20 to 24-year-olds is rising pretty dramatically. I do think that there is a sense of hopelessness might be too strong of a word, but confusion, fears about AI and their job careers, that fear always exists. Now, AI is a different level of fear. So I'm not discounting it. However, if we're putting this into a pie, I would say that those fears are, I don't know, making this up 30 % of it.

34:34But the other 70 % is, as you mentioned, Ben, it's just easier. We had to jump through hoops to gamble, to bet. It's fun. And is there a nihilistic portion of it. Yeah, sure. Is that the whole story? No, it's on your phone. Come on. It's so easy. It's easy. It's yeah. So there's pros and cons that it's easier to invest in the stock market now. Good thing. It's easier to gamble. Probably bad thing. There was this, we missed this last month. There was a story in the New York times and a bunch of people pulled the headline. It says for Gen Zers, work is more now more depressing than unemployment.

35:09And it talks about how hard it is to find jobs and how people hate the nine to five. And And what is the, this young group has literally never lived through a recession before. And the fact that they, they really hate life now in a, in a booming economy, I don't know what's going to happen in a recession. Can I also say one more thing? I think that everybody has tapped into the fact that populism is really popular. Yes. Tell people that, tell people that things are so bad and you're going to build an audience. Yes. And people like, it's really, it's really love to complain. It's unpopular to say that things are generally okay, even if there's a lot of people suffering.

35:49Like, nobody wants to hear that message. Yes. And cue the comments. Ben and Michael are out of touch. Okay, yeah.

36:01Where else? Oh, so Nate Silver had a piece on Vegas. And he has an annual visitor volume, and it's rolling over. And I don't think this says anything about the economy. I really don't. I think that foreign tourism is a big contributor to this. It's still relatively high. It came back a lot from COVID. I mean, it's not like subways in New York or something. No, no. It's off the highs. Gaming revenues are up 1 % year over year, by the way. But I don't think, and I also don't think that, oh, you could just bet on your phone. Like that's why people don't go to Vegas. It's not the same thing, okay?

36:35There's just nothing like sitting down at the table. That is an awesome experience. and doing that and betting on your phone is apples to submarines, not the same thing. So I don't think that's the reason either. I think that the big reason is, yeah, it is super expensive. I think that's part of it. Travel, tours, travel has exploded. There's way more cool places to go now. Travel has exploded post-pandemic. There are so many more options to visit than just Vegas. Yeah, I blame Instagram for this. Instagram makes it easier than ever to like look at the great, cool places to travel. And there's like Las Vegas is not that cool anymore compared to other places you can go.

37:17There's a lot more options. So I don't think that, I don't think looking at this line chart says anything about the economy. I really don't. Also, my one complaint about Vegas, getting around that city is impossible. Walking from one, like trying to walk one street and get around those loopy things and up the stairs and down the stairs and over here, it's impossible to navigate. You're like half a mile from something. It takes you four hours to get there. That was annoying. So, all right, getting back to the Cal Street stuff and the prediction markets, which I told this to Vlad, I do think that it's going to grow dramatically because it's a small market.

37:49And I do then there's applications to it. But I think that everybody is way too enthusiastic about the size of the opportunity and what sort of business ramifications is going to happen. I think it's a niche thing. Yeah, it's going to grow because it's tiny right now. But I don't, I think everybody's, well, I could be wrong. Anyway, the point is this, right now it's all sports look at this chart from bloomberg it's all sports betting see this bar chart yep all right nobody cares about now the election was huge obviously but but economics crypto other like so for example a couple months for example to bet on the pro football champion i i said i told you i said no for seattle right there's 61 million dollars in volume there that's a lot of money 61 million dollars now the warner brothers who will successfully take over i bet on paramount by the way um and i'm gonna cash out like i don't think that they're ultimately going to win the deal maybe they do maybe they don't but like i bought it at 25 cents and yesterday on the on the new deal it spiked to 50 cents but ben look at the volume so i looked on this the volume was 196 000 before and even like an hour into it four thousand dollars four thousand dollars came into the market let's see i'm guessing when you try to get it now one of these trades the spreads are huge because there's not a lot of liquidity now it's 260 000 so a decent amount more came in Um, but it depends how much you bet.

39:11If you want to bet like 500 bucks on an illiquid thing. Yeah. You move the entire market. You're trying to be like a quant with these betting markets. It feels like you're trying to find undervalued. You're not trying to find a winner or a loser. You're trying to find something that's undervalued. No, no, no. I think that things that you think are like a sure thing. Well, there's two things. Like me and the paramount thing to me seemed at 25 cents seemed way undervalued, but if I'm going to start using this and it's probably a waste of my time, in fact, let me take probably out is definitely not a good use of my time.

39:36I want to I think the strategy that I'm going to have is things that I think are like sure things that have like an 85 % chance on where you can make a 50 % return like the Seahawks not winning the championship now sure it's possible but like I'm pretty comfortable with the risk that they're not going to win the Super Bowl I really have a hard time seeing that happening okay Michael shorting Seattle you're to your first shorting Seattle I'm a believer after watching them last week, maybe. All right. So you always say like, don't do your content to the comment section, right? But I can't believe the overwhelming number of people every time I post something on inflation who just literally don't believe the inflation numbers.

40:16And they say, because my personal things and food at the grocery store, and we've had these conversations. But this is the reason why inflation is obviously in the ballpark. So Matt Klein has - Wait, can I just say one more thing on that? I think that maybe it's an element of people not believing, like literally thinking it's fake. Like obviously that there is a big distinction of that. Yeah, but there's a big distrust in institutions. Yeah. But there's also a cohort in there that says, listen, that might be the national numbers. Right, but my personal, that's the thing. But stop telling me that CPI is 3 % when my costs of living are up literally 13 % year over a year.

40:50Yeah, of course. And also people don't actually calculate their inflation rate. Let's be honest. How many people know what their budget is? Anyway, the thing that you tie it to to know inflation is in the ballpark is wages. If you look over the decades, when you have high inflation, wages are high. When you have low inflation, wage growth is low. They track almost one-to-one. The wages are a little higher, but it's pretty close. So Matt Klein has this piece, and he says, wage growth for the typical worker has been remarkably stable since April 2023, averaging about 4.1 % at a yearly rate versus 2.9 % before the pandemic, consistent with inflation.

41:21Inflation was lower pre-pandemic, so was wage growth. Inflation is higher now, so was wage growth. So he's saying, listen, inflation has been stable about 3%, but wages have been growing steadily at 4 % per year. That's a pretty decent bump above the inflation rate. Wages are still high. He's saying, like, this is a pretty good situation. And this is one of the reasons if wages keep growing such higher, inflation is not going to be 2%, it's going to be 3%. How about this, though? This is from Mark Dow. I kind of believe this. Mark and Colin were having a back and forth on Twitter about inflation.

41:54Mark says, I think the whole structure of the modern economy has a disinflationary bias coming from productivity surges. Yes, many things, COVID, tariffs, whatever, can push it around, but productive disinflation seems to be a gravitational force. I'm thinking he's saying technology. So do you think in 10 years, people are going to go, wow, we were really worried about 1970s-style inflation when the most deflationary force in the history of the world was coming on board? Like, I think people are going to look back at these 1970s predictions and go, you were really predicting 1970s-style inflation when AI was coming?

42:23Really? I think the 1970s predictions were like, that wasn't like the consensus at all. There was a few numbskulls that were saying that. It wasn't like... I think there was a lot of people who said, like, this is it. Like, government debt, out of control. Deficits, out of control. Inflation is going to be out of control. There were people saying that, but I don't think that, like... I don't think that that was, like, the overwhelming amount at all. It definitely wasn't. Okay. I still see those charts that show, like, 1970s inflation... Well, you know what? Because, yeah, Larry Summers said it.

42:55True. All right. And then the media wrote about it. I just think in 10 years, we're going to go like, really? You thought inflation was going to say high when the most deflationary technology in history was being adopted? Anyway, that's my idea. All right, let's talk about AI. Why don't you look at the Benedict Evans presentation? It's like 300 slides every year, right? Yeah. What am I trying to show here? I pulled the chart earlier. I forgot what it is. All right, basically, he's saying that only 5 % of people are paying for the chatbots. Which is not surprising to me. So you said that like paying$200 a month is magical, right?

43:31And I know it's a difference going from$0 to$20, mostly because I was using it more. So I had to pay because otherwise it limits how much you can do it. But the point is not a lot of people are paying yet. This is why I can't believe OpenAI has not done ads yet. And maybe they will eventually. But it seems like such a layup for them to do ads and make more money. No one is going to complain if OpenAI adds ads to their... I mean, that's inevitable. Of course it will. Okay. So I did this thing. I wrote about the benefits of reading, something we talked about. And I posted a picture of my bookshelf behind me and all these books.

44:07And this guy, a reader, sent me this observation. Sometimes AI is just magical. So he said, I took the picture of your bookshelf. I put it into ChatGPT. It took every book on your bookshelf and categorized them by type. These are market books. These are psychology books. These are economic books. These are business leader books. And then it gave observations. It says, you have a deep tilt towards markets, macro, defense against mistakes, and quantum thinking. There's a strong Jack Bogle, David Swenson, Peter Bernstein lineage. True. Behavioral science shows up often suggesting an interest in why investors fail or succeed.

44:41And it just pulled all this stuff by looking at a picture. It really is magical when you think about the stuff they can do like this. Yes. The guy's like, I wish you would have listed all the books, but guess what? I just put the picture and it did it for me. And it categorized the books. Unbelievable. Yeah. All right. Speaking of financial nihilism and gambling, I should have put this up there. This is from the New York Times. States are raking in billions from slot machines on your phone. This is financial nihilism. Last year, Pennsylvania was collecting $1.05 billion in taxes from digital casinos compared to$188 million from sportsbook apps.

45:13And this is people playing online slot machines. Look at this chart. So that is just depressing. It's bad enough when you're walking the casino floor and you see people just pulling the slot machines. When you're doing it on your phone,

45:30that's sad. Like, nobody is happy doing that, right? They interviewed this 57-year-old home care worker. She said she'd never gambled until she downloaded casino apps during the pandemic. In the last few years, she's lost$15 ,000. Yeah, can we ban this? Mostly playing bingo and slot machines. Nobody needs a slot machine on their phone. So listen to this, though. how addictive she says her car was repossessed and she's facing facing eviction after missing rent payments. She says, if, if they were to close down the site tomorrow, I would be mad because I couldn't do it, but it would helping me in the long run.

46:01This is a person who's being evicted from an apartment for gambling and is losing her, lost her car and still said, if they close this site down tomorrow, I'd be mad because I couldn't gamble anymore. This is financial nihilism playing. You're right. Playing slots on your phone. That is depressing. At least when you're in the casino, you know, You're around people, the noises. And remember, we saw the online stuff at the casino at MGM. And we're like, who plays this stuff? Obviously, a lot of people, they show all these charts of Pennsylvania and Michigan and Jersey and Connecticut and how much money they're making from online casinos versus sports betting.

46:32And the casinos dwarf it. I would have thought it would be the opposite, for sure. All right. I got a little thing on crypto here. you mentioned, hey, moving, I moved crypto off of Robinhood, but it took me, they put a limit on it, right? A ceiling. $5 ,000 a day. Yeah. So I did that too. And it took me, I had to set a reminder and do it. And it was, there was a limit. So it's interesting because TradFi, I hate that word, but that's what they call it. TradFi is necessary for crypto to succeed, but it also takes away a lot of the benefits that crypto was created for, right? This seamless transition of money, right?

47:07You're supposed to be able to move it immediately. But the reason Robinhood put those whatever hurdles in place, those speed bumps, is because you don't want to accidentally send all of your money and it's gone. So you do it in little dribs and drabs or small pieces. And there's a reason for that, but it also makes it like not as easy. Yeah, I mean, what's the point? Speaking of that, I'm going to lighten up on crypto on January 1st, if I can remember. Okay. I feel like I've taken enough gains this year, not to brag. um yeah it just i don't know what's happening with the price action i don't know why i can't get off the mat i feel like all of all of the catalysts that investors were looking for happened like i don't know what the next catalyst is it's just like more institutional adoption more people buying it like i guess so and by the way deregulation you got the president who wanted it you got all this stuff i am still going to hold uh a decent amount, but I feel like I'm still, I still have way too much.

48:06Um, so I'm not like, you know, bearish. I'm selling all of it, but, uh, but yeah, I'm going to light it up. And if it goes to 150, great. I don't care. I still can't believe that I sold at a hundred thousand and it was over a year ago and it's, it's what it's done since then. It's surprising. But the thing that people keep pointing to is, Hey, it goes in these four year cycles. Fine. Good. I can't, I just can't, I can't feel like you can find a pattern in an asset that's like 15 years old. I'm not ready to make that claim yet. All right, let's talk private markets. There's a lot to cover here.

48:36Okay. I want to give a plug. So we do a show for financial advisors called Talking Wealth. It is on its own feed. It has its own YouTube. And last week, I interviewed Layla Kunimoto, who has a sub stack called Accredited Insights that I subscribe to, where she does an amazing job breaking down what is actually happening under the hood. But so there was a gnarly story that's been playing out over the course of the last couple of months with a private real estate fund called Blue Rock. What is it called? Blue Rock Private Real Estate Plus. What's total something or the other? Anyway, here's the name is Blue Rock.

49:21Sounds like an SNL. I mean, it's not BlackRock. It's Blue Rock. All right. So Blue Rock launched in 2012 as a private fund and had redemptions for the last X number of quarters, a lot of quarters in a row. People wanted their money back. The problem is there is a limit on how much money can be taken out of the fund. I think 5 % a quarter. Okay? So if more than 5 % of the NASA value wants its money, they can't all have their money. So there was a vote. They said, all right, well, here's another option. you can have the option to convert to a closed end fund listed on a stock exchange and boom, you will have liquidity.

49:58And when they did that, uh, the shareholders voted overwhelmingly. Now you say to yourself, well, why did they, why did they do this? Two reasons. I mean, one reason they wanted the money. They wanted the money. Now they didn't know if you said, Hey, you can have your money, but it's going to, it's going to be below, it's going to be 40 % below net asset value. Do you still want your money. Who knows? But that's what happened. So the net asset value was X. It traded 40 % below X as a flood of sellers came in and said, give me my money back. And so I spoke to Layla about the ins and the outs of this.

50:34And yeah, not great. Not great. So my thinking on this is that, and Jason's flag was all over this. He wrote a piece on that this summer talking about how this vote is coming. And what if NAV is not like, I don't think he picked predicted it was going to be this, but he was all over this. So with bigger pools of capital and these alternatives and way more money here, you're going to hear more and more of this stuff happening, right? I don't think it should be shocking and should paint the whole industry with a wider brush. But if they want the wealth channel in this stuff, I think the evergreen structure is probably going to see some alterations over time.

51:10And I think it's probably not good for investors. I think people are going to say, listen, the longer our money is in, the more money we should be able to get out or something. There should be some sort of - It should be first and first out. There should be like a reward for being an early - Yes, because if you've invested in it for 10 years, but you're still locked on how much you can get out, like that doesn't make any sense, right? There should be some sort of - So they're going to have to change the structure a little bit, or some of these companies have a lending facility where they'll borrow money to pay investors back or something.

51:35So they don't have to sell the assets at a fire sale price, right? So they're going to have to do, or they're going to have to say, hey, instead of 5 % every quarter, it's going to be 10%. But what does that mean? You're probably going to have to hold more cash, and that means lower returns. So I think the wealth channel is going to push back against these structures when it happens. I told you they should have gotten flu shots. Robin just came in and said somebody that we were with just has a flu. Well, I'm good. We'll see how long this lasts. You're going to be sick at Disney next week. You guys better all get healthy before Disney.

52:00So I think you're going to hear more and more of this stuff. It doesn't mean that everything's bad, but I think the wealth channel is going to get very annoyed by this stuff if and when they want their money. Like, hey, we want to rebalance. Give us our money back. We can't have it? What? So I think even though this is all laid out ahead, Well, advisors definitely should know better. I mean, come on. Yes, I agree. But I also think that this is probably specific to a certain type of asset. Like private credit is in all the headlines. Listen, these are loans that are marked at a discount to par for the most part, right?

52:35Like I don't think that there is going to be – I think that this is going to be less common in private credit where it's like, holy cow, this book of loans is worth 40%. 40 % less. Like that seems unlikely. Yeah, this is the second story with real estate. We've had this second. For something like real estate? Yeah, I could see that. Absolutely. So the Wall Street Journal had a piece about how the BDCs are starting to turn ugly. And they talk about the discount. Like the discount in a closed-end fund is nothing new. But they look at these BDCs and look at the discount to NAV. And you're getting some big ones in these KKR funds and Blue Owl.

53:04And what are you thinking here, man? Because I feel like you were kind of bullish on these companies before. I think you turned around and gave up a little bit. But are you stepping in to buy some of these things? I bought more Blackstone a couple of weeks ago. Like when it was getting pummeled. So I think the Blue Owl story is, and I said, I did say a couple of weeks. I'd be very scared of them. A couple of weeks ago, when there was talk about the conversion, that the shareholder, by the way, this is a very important point. I'm glad you mentioned this. The shareholders rejected this. You know why?

53:34Because I think that the intermediaries here, not I think, it's financial advisors that said, we're not doing this. Right. I don't know who Blue Rocks investors are. right? Like, I don't know if that's more of a retail oriented group, but I think the blue owl is in the epicenter of this because not only, uh, was it the BDC conversion that spooked investors? It's the, they're the biggest lenders, the hyperscalers that are turning South. Um, I am not part. So Apollo is pulling in the reins. They're saying like, we're, we're turning a little bit cautious. I am not. And I'm making this up because I'm, I don't know, like, I'm not like a loan expert, obviously.

54:12I do not think that 2026 is going to be the year of all of these loans go sour. I just think that the, everyone keeps saying this is coming to the wealth channel. This is coming to 401ks. I think there's going to be way more pushback. I think this is, if private markets want to be involved in these things, I think it's going to take way longer than they assume. I think advisors are going to be pushing back against this stuff and so are their clients. The adoption is the curve is going to be very slow. That's my, anytime one of these stories happen, I think it's going to be a little... It depends who.

54:42Like, yeah, frankly, I've never heard of BlueRock until this story. Blackstone is reporting... It's surprising that they've been around for 12 years and I've never heard of it either. Blackstone is reporting record flows. All right. So I do think that investors, advisors need to be super careful and subscribe to Layla Substack. Like, she goes through, like, the distribution yields and the leverage and all of these red flags that you need to be aware of. And really understanding your time horizon, too. Like, these are long-term investments. These are not short-term investments. Yeah. Okay. I asked you this before, and you said, no, no, no, save it for the show, which you say to me all the time.

55:17So we are going to Arizona to get out of the cold. We're going with a group of friends, my daughter's friends, and we're friends with the parents. We're all going to be in one house, so we'll see how that goes with six kids running around. But it's a VRBO. It's a nice house. It's got a pool and everything. And five days before we're going, they say, hey, if you want the pool heated, it's going to cost extra. And I've never knew this up front. I said, that seems kind of excessive. That's crazy. How much do you think per day they charge you to heat a pool? Now, just so you know, I was blown away by the amount.

55:47Per day to heat the pool, 200 bucks. $100 a day. Yeah, nuts. Isn't that crazy? Yes. Anyway, that seems a little bit of nickel and diming. All right, permission to get sentimental real quick? Sure. Okay. I love it. You know I love tears. Big tear guy. So I just wanted to share this story. It's been a few months. So when my brother passed away, I must have received thousands of messages, DMs, emails from people. And I feel like I never really probably shared my appreciation enough. But I think one of the times on the show, I said, like, I'm getting these emails sharing people pouring their heart out from strangers.

56:28And a couple people emailed us and said, hey, we've been listening to you guys forever. You don't feel like strangers to us, which was cool. Anyway, so I got a bunch of good stuff. And then, I don't know. The whole, the way I explain the whole grief process is that it's like my personal VIX was at an all-time high this year. And that meant higher highs and lower lows. Like there was times when I was like my, I couldn't, my emotions were, you know, I'm a pretty contained guy. There was times when I was just, I was way higher or lower than I usually am. And I could feel it. And I'm thinking like, this is not, but it was, you know, that stuff.

56:56But anyway, so probably like, I think the way I explained grief is like it felt like a black cloud hanging over you, you know, it was like this dull. And then you had told me like, listen, the hardest part is going to be when people, everyone else moves on and you still feel it. Right. But like, so like six months afterwards, like I felt like I was in a good place. And like, for some reason I had a really bad week, six months afterwards, I just had a bad, all this stuff flooded back. And I got like a DM and an email from the listeners, like the same day, the same week, I was at just, I was on a, just an off week.

57:23I just, I just, the feelings were back. And someone just emailed and said, Hey, I'm thinking of you, like two people. And it was like, Whoa, just like out of nowhere when I needed it. And it was, uh, anyway, I never, I think I never like just shared enough appreciation for that, but it was that was like I got a DM and an email the same day from two different people. When did that happen? This is like so this is probably July or August like again six months after just like hey I'm sure you're still going through it and this is probably people who had lost someone so like and like you know like you said people move on like yeah and like for whatever reason I just had a really bad week and someone sent me like like hey I'm thinking about you I'm sure you're still going through it and why are you why are you bringing that up now?

58:03I'm just saying, thanks. I never said thanks. And I don't think I shared enough appreciation. I was just thinking about like going, thinking about the year. And it was obviously a very hard year for me, but like that kind of stuff, like was, it really, you know, the whole like humanity and people like the, I just, it was really anyway, just wanted to say thank you to those people. Yes. Yes. The world moves on much quicker than you do. Yes. But that, that kind of stuff helps. So anyway. Love it. All right. Well, thank you for sharing that. That's awesome. Okay. All right. So I saw this tweet from Deadline.

58:44Matthew, how do you say this guy's last name? Is it Rise or Reese? Rise. Okay. The guy from The Americans and The Beast in May is in talks with Netflix over adaptation of Robert Caro's The Power Broker. And now look at this next one. Presumed Innocent, season two begins filming. look who's in the background of that picture. This is going to be your worst take. It's Matthew Rice. He's going to be in Presumed Innocent Season 2. What was Presumed Innocent Season 1? That was Jake Gyllenhaal. It was pretty good. Oh, I love that show. Yeah, he's going to be in... It's a new cast, maybe. Okay. But this guy's everywhere.

59:17And I think that's your worst take of 2025 that this guy was overrated. No, I didn't say he was overrated. Well, if he was rated high, then I guess yes, I would say that. I just didn't care for him. Okay. I think he's awesome. I thought he was good enough. Do you remember... One of the audio books I'm listening to, I can't remember if it was, which doesn't matter. TV Guide. Do you remember TV Guide? The physical TV Guide in grocery stores? Oh, yeah. So for people that are like - You literally used to have to look through those to see what was on. So there was a daily magazine that showed you what was going to be on TNT and USA later.

59:50And you were like, awesome. I watched Shawshank for the 90th time. Yeah. And then it moved to Channel 14. Yeah. where in order to find out what was on TV you just but you'd have to wait for it to scroll it would just scroll yeah you're like I just missed it you had no control over it give it another three minutes yeah Ben I saw Avatar last night oh okay I'm surprised so okay what do you think so um have you did you see the other two in theaters actually the first one no okay I saw it in 3D and actually my wife came away with a headache but that was the only movie I ever saw in 3D is the first one okay there was like a six to eight minute trailer for the Odyssey.

1:00:33And you know, I like to raw dog it. I'm not a trailer guy. I don't feel like I need to see a trailer for the Odyssey. Are you all in? Dude, they showed like the Trojan horse scene. I was like, hello, like save it for the movie. Too much? Okay. But it, oh my God, it looks unbelievable. It was like, it was a big scene. Wait, can I just give you my, without seeing Avatar yet, here's my concern. I really enjoyed the first one. I saw them both in theater. I really liked them. People keep saying like, Avatar has no pop culture reference because no one talks about it ever. But they're like two of the biggest movies ever.

1:01:02And I really like both of them. I'm concerned that the third one is going to be overkill because how much more war stuff can you do? Is it the same story? That's my concern. Okay. Yes, there are lots of similarities between two and three. And I loved it. Okay. Oh my God. Still liked it. Speaking of like you said, AI is magic. Like I don't, obviously I don't, Like, did this movie cost like$16 billion? Like, how does he make these? So I saw it on IMAX 3D, of course. And it was, I saw it at seven because it's like three hours plus. It is long. And yes, there are, obviously there's fat. It doesn't need to be three hours plus.

1:01:43I wish it weren't. I would have been very happy if it was two and a half hours. But it feels like an event though to see that kind of movie. I will go to the theater to see it. It is an event. It is spectacular. there's nothing like it if he stops if he stops making them i'd be perfectly thrilled i definitely don't need to see another one james cameron is the man but oh my god it's so good it okay it is i'm just kind of surprised you say that okay that's good i feel better about going to see it now it is so good and i love the second one and i love the third one and yeah it was very similar but i don't care i loved i loved it i really did okay good so wait so you're using imax 3d so you Where the Glass is still.

1:02:22Yeah. Okay. It's unbelievable. All right. Any other recommendations? Or is that a... Yeah, that's it. Okay. I got in... My new Audible, I got into the Cameron Crowe memoir called The Uncooled. Oh, that's on my list. Good. So he was on the rewatchable. That's why I listened to it. I mean, he's obviously one of the most interesting... He's one of the most interesting people ever. And it feels like... It kind of feels like it's a prequel or like an addition to Almost Famous. Because, and I mean, this is a guy who created two of the best movies of the past 30 years, right? Jerry Maguire and Almost Famous.

1:02:56And he also was writing for Rolling Stone at age like 15 and went undercover and wrote Fast Times at Ridgemont High. This guy, he's one of the most interesting people ever. And he reads the book. So it feels like he's telling you his life story. And you can get a sense of him reading the book. I mean, he just, he puts so much feeling and emotion into it. You go, oh, I can see why this is one of the great movie filmmakers of this century. because the way he tells stories, he's such a great storyteller. It's even like the most mundane, but his whole family background, it almost feels like his life was a movie.

1:03:29You can see how he made Almost Famous because it's like, God, this guy's life sounds and feels like a movie growing up in the 60s and the 70s and growing to all these concerts. And it's very, very good. I'm really enjoying it. I'm halfway through. I went into a little John Cusack moment the last couple of weeks because they did High Fidelity on The Watchables. I don't like that movie. Okay. one of my favorites of this. I've rewatched that movie dozens of times. I still remember. You know, because maybe I only saw it once. I think that's probably rewatchable. Very rewatchable. And the first time I saw it, I had no idea who Jack Back was.

1:04:01When he sang at the end of the movie, I was blown away. When he sings Let's Get It On or whatever. But then they did the sure thing because Rob Reiner passed away and that was another one of his. So I watched that and then I got into Gross Point Blank again, which is a great Michigan movie because it takes place in Gross Point, Michigan. And I don't know if you've ever seen this. maybe not a Michael, but it's John Cusack and Joan Cusack and Dan Aykroyd's in it and Jeremy Piven. And it's just such a 90s, Minnie Driver. It's such a 90s movie. Gross point blank. It's about a guy who goes back to his high school reunion.

1:04:30Yeah, I never saw it. But he's a contract killer. So he kills people for hire, but he goes back to his high school reunion. And it's the kind of movie where you see the tone of it and you go, oh, that's a 90s movie. For some reason, the tone of the 90s movies, they were just so light and airy and free and easy. And even though it's a movie about a guy who kills people, it was still kind of tongue in cheek. And it's just, it's a total nineties movie, a movie that they, that only gets made in the nineties and not today. We, uh, we forgot to talk about Rob Reiner last week, obviously, you know, horrifically tragic and just worst thing ever.

1:05:05Um, that run of, I can't remember the order. Was it a princess bride, whatever the order was princess bride, How I Met Sally, A Few Good Men, Spinal Tap, and Misery. Yep. Are you kidding me? Stand by me. Stand by me. That's right. Yes. I haven't seen Spinal Tap for some reason. That's for some reason. And I like those mockumentaries. That's not my genre, but whatever. The other ones are just, I mean, I think Princess Bride. So I haven't shown that to Kobe yet, but I've shown that to my kids multiple times. That's one of my favorite movies of all time. It's, I think that's like unanimous, right?

1:05:37Like if you don't like that movie, you just stop. Just what are you doing with your life? yes that that is one of my all-time favorites i love it um okay we'll be back next week i'll be recording somehow some way we'll see if you can you manage you know i saw i saw uh val tunis and economic talk tweeting about somebody somebody uh shared a picture of the magic kingdom at night with all the fireworks yeah and i remember that when i went the first time i was like oh boy i'm not looking forward to that it's just there's so many people but i was thinking when are there not when are there not a lot of people at disney yes and there is a capacity right yes and obviously during the holidays they're at 100 they sell at every ticket and i'm i'm guessing that it's always above 90 maybe i don't know maybe it dips but are you doing one of the holiday party things at night or not like there's a holiday i don't think so when we were there we did it was an extra ticket that you go in at like seven o 'clock and there's an extra holiday thing at night and everything is lights and i don't know um but yeah yeah disney's always packed.

1:06:39It's never like not full. Here's what we're not doing. Not spending$150 a head on the buffet. The character buffet. Okay, we didn't do any character dinners or lunches this time either and the kids didn't seem to care. Yeah. It'll be fun. I've always been a Disney hater and I think I can't wait. I love it. It's the happiest place in the world. Come on. And then Epcot's great because just grab a beer every stop. That's wonderful. Alright. Merry Christmas to everyone. Happy holidays. And thank you for a great year. We'll still be here one more time. Yeah, it's not over yet. Animal Spreads at the Campanus.com.

1:07:19We'll see you next time.