The Leverage Mania (EP.388)

23:40Do you think that that makes it kind of almost like the member companies kind of got all like in a fetal position, like planning for a recession in 2022 that never happened? Is this going to be a situation like that where they plan and they pull this all forward? And then if it doesn't happen, okay, now what do we do? So are there waves and waves of impacts of this as people try to figure out what is actually going to happen? I think we'll see. I always defer to the market. So I think on the one hand, I take a little bit of comfort in the fact that the market did not freak out over this. On the other hand, we'll say it's two months away, right?

24:13So we shall see how this plays out. So the thing that we keep hearing for three years now is, listen, it's not the inflation rate jerks, economists. It's the level of prices. So even if you get a one-time up in prices, how are people going to feel about that? CBS News had this poll about Trump's transition. They asked people like 50 different questions about how do you feel about stuff. And they asked him what their highest priority was. And they talked about deporting immigrants and cutting taxes and tariffs and DEI stuff and all this stuff that people have said is that Ukraine and the U.S. And the number one highest priority was we want lower prices of goods and services.

24:49They don't just want inflation to fall. They want lower prices. This is what people say. 80 % of people said this is a high priority. There was not even another one close to there, even tax cuts. This is higher than that. Are we ever as a nation going to understand how inflation actually works? Because I don't think we are. Collectively. I mean, but that's okay. I mean, how would everybody be an expert on price levels? You know what I mean? Yes. I think that this is just a lost cause though of explaining like actually. Because what you're saying is, listen, for prices to fall, the economy will need to be in a bad place and you actually don't want that.

25:22But guess what? I think some people do because Josh made this point very - No, but they're not going to - People aren't going to take a 20 % haircut and pay to have lower prices. No, no, no, no, no. But they don't necessarily have to. Like unemployment can go to 6 % and prices could fall. And I think the 94 % would say, f*** it's 6%. No, no, no. Even in the 2009 crisis, prices, we had deflation for a blip. It was not a mass fall of prices. It was prices kind of slowed, but so did wages. It's possible that some category prices fall. I don't think it's impossible. Sure, JCPenney could have a 50 % off sale, but that doesn't mean that.

26:02But I'm saying if you want a full scale, yeah, we're going back to 2019 prices, you need wages to fall. There's no other way to do it. Yeah, yeah, I would agree. Okay. All right, let's talk about crypto for a little bit, which is everybody's favorite category around here. You know, uh, well, it's, it's both sides. This is the market. Some people say, listen, keep talking about crypto guys. I think it's interesting. No, no, no, no, no. Not really. Uh, you have a few of those emails. Okay. I, I, I'm seeing the people that really, that think it's all a scam and tulips are like, guys, enough with the crypto.

26:33And by the way, the guy that said to me in the airport, I'm not having it. We had a lot of people say he was saying, I'm not having it. Howling. There's no way. There's no way. A hundred people made that joke, which was a pretty, pretty decent joke. but he would have had to give you a wink if he did that. Yeah, we walked away awkwardly. I think people were trying to be funny when they said that. No, no, no. I think people were earnest in the email. There was none of that. He was sincere. We walked away awkwardly. There was no smile. And if he did come up with that, it would have been like the quickest joke ever, right?

27:02Because he wasn't planning to see me in the airport. So anyway, but - And also, not a funny joke. So I'm here, so people that don't like us talking about because they think it's a scam, and then like the real Bitcoin people who are like, you guys are such idiots. You don't understand it. You don't get it. You're missing it. All right, well, it's great. So anyway. That's true. We'll keep this brief. And Matt Hogan. I have something to say. How about this? We're not going to keep it brief. This is my podcast. No, I want to talk about this because I've gotten some ton of feedback. So I've been talking to you for a while.

27:34I think on last week's show, I said, when it hits 100, I'm selling. And finally, it got to 99 and change. And I thought, I just, I got to do it. I pulled the trigger. and I sold 25 % of my Bitcoin position and I just did it. And I put another limit order in to sell and I didn't want to do it right at 100 because I knew if it hit 100, something weird could happen and a bunch of other people could sell. So I did it at 99. I sold some. I got to say, it felt kind of good. Like it felt like a weight lifted off my shoulder. And I said the reasons I'm doing it, I'm rebalancing. It's a way bigger position.

28:03It's almost 10 % of my portfolio. It's bigger than I ever thought possible. You get huge drawdowns in Bitcoin. And I said, I'm practicing regret minimization and I'm doing the Grand Rapids hedge, right? Somebody said, somebody emailed us, what is Ben going to do about the taxes? And I assume you're just going to pay them? Yeah, no, you don't have to pay taxes on crypto, I heard. Yeah. Once January 20th happens, there's no tax on crypto. I am still holding on some ETH. I think I had pretty much the market weight of 80-20 or so. So I'm slaying on that because that didn't really catch up as much.

28:32But I think on my cost basis, I was up six times or something on Bitcoin. And I just, I couldn't, so I'm rebalancing. And I'm using it as in a constructive portfolio management way. And if it crashes again, I'll buy more probably. And I'll rebalance back into the pain. And I had a bunch of crypto people kind of say, people were writing, there was guys, there was blog posts written about it, and people were commenting. And I had a lot of crypto people say, you know what, this is a very reasoned argument. I appreciate that. You're still an idiot. Overruled. So I kind of, they're like, you know, the government's going to make it a reserve currency, and it's going to go to 400.

29:04And guess what? That's why I only sold half or a quarter. I'm going to sell another quarter if it goes up. So that's why I did that, because I didn't want to look like an idiot either way. So that's why I spread my bets. And I always say, investing itself is a form of regret minimization. You have to take a risk one way or another. If you're all cash, that's a risk. If you're all stocks, that's a risk. If you're hedges, that's a risk. The famous Bogle quote was, he had 50 % of his portfolio in stocks, 50 % in bonds. And he said, when stocks are doing really well, I wish I had more in stocks. When bonds are doing well, I wish I had more in bonds.

29:36So that's the whole point of it. and so that's why I did it. Credit to you. I'm happy with the decision. I'm at peace. Until it goes to$150, then I'm going to be pissed. Well, listen, being at peace is a good place to be. It's the only place to be when you're investing, especially in something as volatile as crypto. Matt Hogan tweeted, 95 % of the world's largest investors have zero exposure to Bitcoin, but 95 % of all Bitcoin is already owned. Well said. So for me, that's always been the driver. It's the supply-demand balance. Here's an Econ 101 guy. Pretty simple. It's not to say that prices can't go down or crash.

30:15They can, and they will at some point. All right, the Michael Saylor stuff, the MicroStrategy stuff. Look at this chart. It's the most ridiculous stock chart in history. It's wild. So for those who are unfamiliar with the story, I know we went over it, but it's so crazy. MicroStrategy last week was the number one. most heavily traded security in the United States ahead of Tesla and NVIDIA and double SPY and in front of everything, okay? MicroStrategy is a software company that loses money. It's not really a software company. It's a Bitcoin treasury company. That's how they describe it. And I watched, so you see like clips of Michael Saylor on CNBC and he says a lot of crazy shit and things that really make no sense at all, like really and truly.

31:02But I watched a longer video that Corey Hofstein posted and the first 25 minutes, Michael Saylor did a really good job laying out exactly what he's doing in a way that you might think it's crazy, but it's one of the greatest financial engineering schemes in the history of Wall Street, like hard stop. And I wrote a post about this and I said, somebody said, oh, he won the lottery, this and that. No, I mean, yeah, he did, but he called his shot. And he's been laying this out for years, right? Yeah, he called his shot and then he smacked a grand slam. This wasn't like a mistake. Yeah. So anyway, what he's doing is - Yeah, you wrote a blog post about this, and you said this is for Normies to understand like what he's actually doing.

31:40Yeah, so I tried to explain it that way. So he's issuing convertible debt at effectively at different interest rates, but like close to zero, right? So he's getting free money, and he's immediately buying Bitcoin. And it worked, right? The price microstrategy went up, Bitcoin went up. The convertible bondholders converted into equity. They made money, and then they did it again. and then they did it again and they did it again and again and again and they keep doing it and it's spinning really quickly and the way that he described the strategy with the options market and the liquidity and like it's compelling and it worked and now the question is when, how, does this end?

32:22Does it end today? Does it end at a much crazier number? Because what did I say? If it keeps going at this pace by next year it'll be the biggest company in the world so it hit a hundred $170 billion market cap. It hit$115 billion market cap, which is bigger than Starbucks and Nike and all these other monster companies. So you might say this is the craziest shit ever that's going to end so badly. And you might be right. But it also could get a lot dumber or it could end today. Who knows? But the point is, it's wild. It really is the greatest spectacle like I've ever seen in my career. I have two things.

32:52I don't know if I'd say that because there's been some crazy stuff that's happened. But it feels a little like - Wait, hold on. What's crazier than this? I don't know. Oil going negative. I don't know. there's so much crazy stuff that's happened in the last four years. It's hard to pick. I'd have to think through. It's like asking me what's my favorite movie. I can't do it right off the spot. To me, this is the number one. Okay. So I have two things. One, this feels a little bit like Tesla in that. Remember all the people shorting Tesla were saying he's never going to raise enough money. And every time Musk was able to raise money and raise equity, and that kept Tesla going, even though people thought it was going to fail.

33:22Number two, here's what I think makes, obviously people say, well, if Bitcoin crashes, this thing's going down. Of course, because it did already. Wasn't it down 90 % during the last crash? So here's the thing that I think makes it not end badly, but just end is, and Josh talked about this a little bit, but I have a further take. So it's other companies starting to do this. And here's the, remember how Berkshire used to have a premium on book value. So the underlying holdings of Berkshire, people would pay like one and a half or two times for them. So right now people are paying three to four times the value of Bitcoin for MicroStrategy.

33:52It's just if other companies start doing this and they don't have as big of a premium, investors are going to say, why would I want to own MicroStrategy? and their levered Bitcoin play when I could get this other levered Bitcoin play and we're not paying a bigger premium. So if other people started doing this, their premium will just shrink and their premium goes from three or four to one to two. And that's what makes it stop going up forever. So it's a faith-based thing. Yeah, it could. That's not a bad take. Anyway, so a lot of the people that are investors in MicroStrategy get upset when normies like us are condescending or mock them.

34:23And I'm not trying to do that, for the record. I think that there's a lot of really sophisticated investors on Reddit boards that understood exactly what Saylor was doing and made ass loads of money. And to those people, I earnestly say congratulations. To the people that are FOMOing now, FOMOing in, who don't really understand what's going on, I'm talking to you, just be careful. So for example, and then there's a good article in Bloomberg about the market makers and the people that are supplying the swaps and the leverage to literally their double levered micro strategy instruments, which is a whole other interesting chapter in the story.

35:00So there was an article in the Wall Street Journal covering it. And they highlighted Chase Fury, a 25-year-old trader in Newport Beach, California. He started buying Bitcoin related stocks, hoping to deter his harvest gains. He moved all of his investments worth about$112 ,000 into the define CTF and has grown his portfolio to about$400 ,000. The Harvard graduate, the Harvard graduate. Okay. So to the point of, no, don't laugh. It's funny to think about it this way though, because he probably learned all these different discounted cashflow methods and he's YOLO. Yeah, but credit to this kid because obviously he's incredibly intelligent and he saw what was happening and he made a lot of money.

35:40Um, but not, but his parents, he convinced his parents to let him manage$700 ,000 of their retirement assets. I'm guessing they were well off, but who knows? Who knows if that was 100 % of the portfolio or 10%. He said he came up with a less dangerous and smarter plan for them. He invested 27 % of their portfolio in the Defiance ETF and the rest of MicroStrategy. I'm not on board with that. I think that's a dumb idea. For his parents' retirement strategy? Agreed. If you're looking at the outcome, sure, they're great, but that sounds like a bad idea. Anyway, does this end badly today. Does microstrategy double from here?

36:15There's no outcome that would surprise me. But this is why Bitcoin is up a lot, obviously. And even that is not enough for people. This is why bubbles will always be part of it's a permanent part of the process. People are never satisfied with just saying, hey, there's big gains. I need bigger gains. And this is why this stuff will always, always happen. Yep, yep, yep. Okay. The Wall Street Journal has a piece about America's piggy banks, which we've been talking about for a while here, hitting up the home equity lines of credit. We done with crypto before we move on? That was it? Okay. I think we gave it ample time.

36:46We're going to have to do a stopwatch, I think, so we don't go over. We need a shot clock on it so people don't get mad. So they show the value of home equity in the country is$35 trillion. And then they show the first-time homebuyers, and they're calling it a piggy bank and just saying that it's unfair because first-time homebuyers have gone from, call it 40-ish percent in the 80s and 90s and 2000s. it's slowly gone down from there and now it's at 20 below 25 i think it's 24 and basically just saying like so i think the only people who i mean obviously they're still first-time homebuyers happening and maybe they're getting help or maybe they're just the people who are well off and can afford it um but it's just that the people who have money in their home are the few people who are able to transact in the real estate market because they have that equity to play with it's house money, it's free money they can roll it over and use it as a down payment those are the people that will be spending more when mortgage rates fall not first time home buyers I agree, yeah one of the biggest themes of the last I don't know, two, three years are first time home buyers just getting absolutely railroaded yes and I've said for years now of any group that got screwed the most during this 2020 period it's first time home buyers Yeah.

38:06They just got unlucky and bad timing. Nothing they did on their part could have foreseen this happening, housing prices going up so much and mortgage rates going up. Totally screwed. Torsten Slock, in his daily letter, wrote, As home prices continue to rise more and more households are taking out HELOCs to finance consumer spending, in other words, homeowners are liquefying their home price gains and using the proceeds for consumption. Combined with low jobless claims, strong wage growth, high stock prices, and solid cash flows from fixed income, including private credit, the U.S. consumer continues to do well.

38:39And, Ben, you've been talking about this for a while. This is – I don't know if this is going to put a floor into the next recession or if it's going to just continue to spur the economy. But people are tapping their home, and why wouldn't they? It's going to – yeah, and it's going to accelerate if mortgage rates ever fall. The Washington Post had a piece actually saying this is the biggest problem for Trump's economy right now, 7 % mortgage rates. And how do you fix that? And I don't see – there's none that I can see any policies that he can do that are going to fix the mortgage rate market because he wants growth to pick up and he wants – What if we stop buying mortgage bonds again?

39:14I mean, that's a solution. That's the only – that's what I've been saying for a while to narrow that spread. But I don't know if people are going to be on board with that. What people? I don't know. economists, people who make financial decisions? Yeah. All right. Email question. Just wondering, because we talked about this last week, wondering if you could elaborate why it's a bad strategy to pay off or accelerate payments on a 3 % mortgage. For me, I just don't want to be making payments for the next 25 to 30 years. Would rather get out of the mortgage and have a possibility to make income on it through rent one day.

39:42Thoughts? Okay. I just think it's one of the biggest financial assets you have because after inflation and the interest expense that you can write off for your taxes, you're effectively borrowing at 0 % in a 7 % world. I don't know why you would ever want to give that up when the hurdle is that low. It's not math. Yeah. I say that on a, I think it's, it's not math on a 6 % mortgage and a 3 % mortgage is math. How's that? I, I, no, I agree with you. But like for people like this, like you're not going to convince them with numbers, right? Because this person is saying, I just don't want to be making payments for the next 25 to 30 years.

40:19It's not a numbers thing. Yeah, and I still don't get it. It still doesn't make sense to me. And I get where he's coming from, and I still don't get it. I'm with you. And this is, okay, people can disagree because this is a personal decision. Yes, but he still shouldn't do it. I agree. All right. Survey of the week, except for ours. Like and subscribe. From Matthew Miskin. He tweeted, A difficult element in tracking this economic cycle is that soft data, which are surveys, has been weaker than the hard data. Love this chart from NFIB showing the conversion starting. Business consumer surveys likely to be more indicative of real growth.

41:01So again, another huge theme of not just this show, but economics talk in general for the last couple of years has been the disconnect between the hard surveys and the soft surveys, meaning like how is the economy doing? How do people feel it's doing? Okay. And the good news is that the soft, how people feel, it started to converge. Wouldn't it be funny if this happens right as the hard stuff is starting to roll over? Like the sentiment comes back and then the actual numbers go down? That would be funny. So this isn't just a Trump thing, this bottom a couple of years ago, although it certainly, it seems to be kicking to over here now, to which I say, wonderful.

41:41Because if people feel better about the way that the economy is going, then the vibes will improve right? That's feelings. And hopefully they will start to spend more and feel more comfortable making investments. This should be good for growth. Yeah. But the funny thing is, this should be good for the economy. People still spend a ton of money when the vibes were down. So I don't know if it matters. True, true, true. We'll see. But I think the vibes in this, vibes have been totally disconnected from spending for a long time now. And I don't know if that ever Okay. That's not, that's not, you're not wrong, but I would love, I think it's good to see people feeling better.

42:15All right. So you know the Tom Hardy gif from, what's a Furiosa movie, Mad Max, where he goes, uh-uh, that's bait? Yep. This is from Axios. Salaries Americans say they consider the minimum to be for the next successful. Boomers, it's 100K. Gen X, it's a little over. Hmm? Show me the survey questions. Show me the source. I don't believe this. I don't either. So Gen X says it's 200 something. Millennials say 180. Gen Z says$587 ,000 to be happy. The average is like 270. Obviously, Gen Z pulls it up. This is an engagement-based survey to get people mad on the internet. There's no way this is real.

42:47No way. Because a lot of people are saying, oh, see, Gen Z, they're so coddled and they're disconnected from reality. And there's no way this is a real survey that they think they need$600 ,000 to be happy. And boomers think they need 100. Thank you, Ben. You're saying the truth. It's a fake survey, people. I can't prove it because I didn't see the survey, but I know it's fake and you know it's fake. I had a friend send this to be. Yeah, this is fake. This is fake news. This is bullshit. There's no way. There's no way. Nice try. Not buying it. All right. So I have a take here. I think we got a minor reprieve from income inequality and wealth inequality in the 2020s because the pandemic, but that was an outlier event and it's a one-off.

43:27And I think inequality is just going to explode and get worse from here because I think the attitude towards inequality has changed. I think it's always been the case that money can buy everything, buy anything, but it used to happen behind the scenes. Now it's in your face out in the open. So here's an example. I'm a Michigan football fan. It sounds to me, so Michigan just, I don't know if you don't pay attention to this because you're New York and people in New York city don't pay attention to college sports, right? So the number one football recruit in the country is a quarterback who plays in Belleville, Michigan, which is right down the street from Ann Arbor where Michigan is.

43:56So Michigan should have had this guy, but LSU signed him. And then they have this NIL money, right? Where you can pay college football players now or college uh athletes and michigan didn't do much of that before and finally they went to their rich donors said listen all the other teams are paying a bunch of money ohio state went out and paid 20 million dollars to get a roster last year we need some money and dave portnoy said i'm going to give three million bucks to get a quarterback and little little did i know larry ellison's fifth wife went to michigan and larry ellison came off the top rope with i don't know how much money to give this kid but it's a ton of money and michigan flipped the number one recruit in the country to be their quarterback.

44:31Oh, that's awesome. And so for me, I'm thrilled. If I was a fan of the team that we took him from, I would be so disheartened and this is going to happen. So my point is true. So Nike has the, the Nike guy, Phil Knight basically told Oregon open checkbook, how much ever money you want for stadiums and, and jerseys and people on your team. I'm going to do it. So I think there's nothing standing in the way of the inequality train right now because big money people, it's not taboo anymore to just push your money. It used to be like, we're going to do it behind the scenes a little bit. Now it's just everywhere.

45:06Yeah, all right. So, I mean, capitalism has lifted so much of the world out of poverty. And unfortunately, this is what comes along with it is wealth inequality. Yes. And for me, it means that I'm more than recruiting the country, so I'm happy. Yeah, this is permanent. I guess you got to take the bad with the good. I just, my sense is it's going to get worse. That's why I fawn in this. Maybe I'm making a leap here. It's not going to get better. Unless, I don't know, maybe economic policies coming to the White House will improve growth radically. Who knows? Who's to say? I don't know. Hope it does.

45:44Well, if growth improves radically, people who will benefit the most will be the rich people. But I just think there's no stopping this train. True. All right. Let's talk about driverless cars for a second. And I saw our friend Tom Morgan tweeted a video. Joe Weisenthal did the same thing. And this is such a great example of how we behave. Have you done it yet or not? No. Okay, neither do I. We don't celebrate good news. By the way, I saw gas for 279, I think, or 289, whatever it was. Is anybody championing low gas? Does anybody give a shit? Do we only talk about things when they're bad? We have actually driverless cars.

46:18It's pretty amazing. And nobody seems to care. Maybe it's because it doesn't – probably because it's not happening where we are. That's probably why I don't hear about it. Getting back to that boom book, this is a form of progress. If this actually happens and it's a real thing – But it is real. It's happening. It's happening in multiple cities. And I feel like it's not getting the magical coverage that it deserves. It's – holy shit. They're self – they're driverless cars. Like 150 ,000 rides a day or something. Is that the deal? It is. When does this become a political issue where in the future people say, I'm not driving one of these fancy cars.

46:53I'm driving my truck. And that's, it becomes a political issue eventually, right? Like there's going to be the non-drivers and the drivers. I feel like those are the two groups. Everything becomes political. But yeah, but it's, we're not talking about it enough. It's amazing. Shout it. Self, why do you keep saying self? Driverless cars, self-driving cars. That's what I was trying to say. All right. I got a lightning round of vacation thoughts for you. There we go. All right. I got a lot here. So I'm just going to, I'm going to throw a bunch of them out to you. Then I have a big one at the end.

47:19So I'm just going to stop me if you want. I had my first real experience of being a middle-aged dad on vacation. We go to the airport. My wife buys a hot chocolate for my daughter, and they gave her two on accident. So she just got two of them. She gives one to our youngest and one to our oldest. It says here, and I said, wait, wait, wait. And we just sat down at the gate waiting for a flight. I said, that's a terrible idea. Every time we give them hot chocolate, they spill. My wife's like, it's fine. Just let them have the hot chocolate. It's vacation. And of course, immediately, all three kids have hot chocolate all over them.

47:44Spilled everywhere. It's on the seat. It's up their pants. Everyone is covered in hot chocolate. and my wife's trying to clean it up. And I said, you know, I just, I told you and I just had to be the dad that said, I told everyone, but I get no credit for it. So that was my dad moment. Wait, hold on. Question. Like, did you yell? Were you annoyed? No, no. I just, I just, I smirked. I said, I knew this was going to happen as the dad. I knew this was going to happen. I just want to put that out there and let it be known on the record. I said so. And then everyone said, yeah, whatever. We don't care.

48:08We'll move on. Number two, why does, why are there so many faucets now don't have the H and the C or the blue and the red for the hot and cold? You get into a hotel That's such a great point. And you have to stay there for like 60 seconds and turn it this way and wait and turn it this way and wait. You can't just give me an H and a C or a blue and a red. Bring back the blue and the red. Ben, you're making sense. Keep going. All right. I love it. We're at an all-inclusive resort in Punta Cana. Why do we not have all-inclusive resorts in the US? Food, go get it. Booze, go get it. Fridge, stocked every night with everything you want.

48:39I'm guessing - Because we could get away with it. Well, I'm guessing part of the reason is because the labor is so much cheaper. So on a cruise, you go on a cruise, is you pay for drinks, but the food is just free. Not free, it's part of the thing. I can't imagine there wouldn't be a premium resort that people would pay for in the US for all-inclusive. Just you show up and everything's taken care of. Just having that stress off your back of not like, I have to sign for my bill, figure out what this costs. Oh, wait a minute. It's so nice going into the all-inclusive. But I'm going the other way because generally, if you have an all-inclusive place, you can't have the highest quality ingredients for the food.

49:11So it has to be cheaper by definition. True. Food's pretty decent. I mean, it's not top shelf, but it's still pretty good. Three, I love, I made this joke on Blue Sky the other day. I got a little engagement. I love going to an island nation like this, and they have their own beer. So we have Presidente here. I went to Aruba before. It's Balashi there. They just make their own beer. Like, you don't have choices. Like, not Corona or Dos Equis. It's here. You're drinking Presidente, and they call it Dominican water here. It's like Steve Jobs with a mock turtleneck wearing the same thing every day.

49:37Like, I don't have to think about it. I just know, hey, I'm getting a Presidente when I go to the swim-up bar. So wait. So wait. Wait, so when you order a beer, do you just say, can I have a beer? Yeah. Because that's awesome. Because that's great. They know what it is. The best time to do a tequila shot as a middle-aged person, middle of the day. Not at night because that's going to… But middle of the day. I got some FOMO the other day. I saw a million people doing shots during the day. And I went to get a beer and I ordered a shot of tequila. My wife goes, what are you doing? I go, what? Just doing a shot of tequila?

50:02She goes, why? Right now? I'm like, I don't know because we're on vacation. So I ripped a shot by myself. All right, here's another one. Lazy rivers are an elite, elite vacation activity. and more places should have lazy rivers. If there's income inequality and they're a rich person, like why wouldn't you put a lazy river in your backyard instead of a pool? They have, this place has a lazy river and it's amazing. I don't think I've ever been on a lazy river. What is, describe this. It's just, it's a place, they have tubes and then they have things that push you and waterfalls and you kind of just sit in the tube, drink in your hand and the tube goes around this huge thing all the way around the resort.

50:36Oh, that's great. Kids love it. Parents love it. Teenagers love it. Even the grandparents love it. People are just floating around the lazy river. elite vacation activity because you can relax or have fun. Is this a Carlson-wide family vacation? This is, no, my wife's, so my mother and father-in-law it's our 50th wedding anniversary. So we even have the t-shirts, you know? 50th, and they took everyone. My brother-in-law and his girlfriend are here and my wife and our kids, so there's nine of us. And so this is celebrating their 50th wedding anniversary. Very nice. All right, keep going. I'm enjoying this.

51:08All right. You know when you go to Chick-fil-A and you realize how much better the service is there and they say, my pleasure every time they serve you. I don't go to a flight. Okay. So the service there is 10 times better than any other place. I feel the same way with service in the Caribbean. So when you come down here, the service is amazing. Everyone always has a smile on their face. They're always happy. The service is top notch. And it's so much better service than you get in anywhere in the States for anything. Everyone's always happy. The people are walking around singing and dancing. And all right, one more.

51:37We did an adventure yesterday. I sent you some pictures. We went to go in the jungle, like 45 minutes away. We did a zipline course, these huge long ziplines, which was really fun. And then afterwards, we got to like hold these monkeys. And they give you a bunch of food and they put it on a plate and they put it on your head and the monkeys jump all over you. Those monkeys were adorable. Squirrel monkeys, I guess. Very cute. And so we drive about 45 minutes into the middle of the jungle in the mountains to get there. And it's going through all these little cities. And the guy is on the speaker on the way there talking about the country and telling us about it.

52:07and all these little houses you pass on the way, these little shacks, they're not even houses. They're probably two to 300 square feet. And that's all there is, is these houses. And it's a lot of poverty in the country. And the guy was telling us about it. He's saying, see these houses here? Those are middle-class. And you look at it, my kids are like, their eyes are wide going, oh my gosh. And every mile or two that he'd like, that's the rich person. They own all the land. And all the other people just live here. They don't have any cars. They kind of get bussed everywhere. And the houses are very tiny.

52:33And there's a lot of trash. And it's just not very nice. in these places. And the guy says, you know, I think Americans look at this and they feel bad for us and they probably should in a lot of ways. And I looked up the median income here, annual income here is like$8 ,000 or something. That's what I found on the internet. And the guy says, you know what though? We are pretty laid back and no stress. He said, we never have any stress here. And it is funny. They're so happy. You could never go from like the lap of luxury that we lead in America and move into that setting. But the fact that they don't know any different, I guess, for the way they grew up.

53:05And everyone here is so happy. And that's the crazy thing to me is that even with all those luxuries, this is like the happiest people I've ever seen. It's kind of crazy. And the guy said, we just, he said, we don't have stress here. We are not stressed. We hang out, we drink, we relax, we have family. We don't leave nice lives and we were, but we're no stress. Yeah. No capitalism. It's kind of, and he was talking about the property taxes too. And he said, one of the reasons things are so bad on the infrastructure here is because we don't pay a lot of property taxes. He said, you pay one-time tax when you buy a house, and then if you pass it down to your kids, they don't pay a tax.

53:39So he's like, I'll give my house to my daughter someday. They don't pay taxes. And he said, that's one of the reasons. But he said - Yeah, again, one of the diseases of capitalism is like the desire for more. And it's great for all of us, but it's sort of tough on each of us because we always want more. It's just, it's one of those perspective things that - Yeah. Anyway. For sure. That's all I got for my travel thoughts. All right. The boardroom tweeted, thank you for that, Ben. That was great. Boardroom tweeted, New York and New Jersey are in a league of their own when it comes to sports betting.

54:05New York did$2.33 billion in money wagered, I think, so far this year. Is that what it's showing? You know, I've been thinking about this. So I've been, how did I've been called? That's kind of crazy, though, that it's that much more money. You think it's all like finance people or just everyone in New York just has that mindset? I don't know. Yeah, I don't know. I got hosed this week. tough week for me between the commanders and the Texans and who cares. But anyway, so I was thinking like, let's say that I lose five cents of every dollar that I bet. I've been as good as three cents, suddenly at five cents-ish.

54:40That's the tax that I pay. At some point, I'm going to have to stop gambling, right? Because with each passing week, month, and year, even if it stays at 5%, The number is just going to keep getting bigger and bigger and bigger. And all of a sudden I look at my cat and be like, wait, it's not that much fun. So this is a good rolling into it. Where does this go? Like there was an article in Bloomberg about like betting in Brazil and there's a higher level of poverty there. So people are really stretching to gamble. It's like the lottery on steroids. I wonder if like regulation comes back in a way.

55:16And the idea of regulation coming in sounds like laughable now. But is this going to eventually become a problem in our society as well? Like at large? Of course, people's lives are getting moved by gambling. That's not new. But is this going to be the type of thing where we have to crack down because it's starting to spread? Maybe there'll be more gamblers than others. I think it's just going to be the kind of thing where someone goes, well, that 10 % of the population has an addictive personality. They're going to get addicted anyway. Hopefully, we take care of them. And I don't think people are going to care, unfortunately.

55:42Yeah, I think that's probably right. So this is a funny email. I came to Animal Spirits a couple years ago and decided to listen to the first episode this week. Pretty funny hearing Ben reveal his Bitcoin ownership. I forgot this when I talked about it. And Michael's saying he doesn't trade stocks and hopes he never will. Now you're talking about gambling. I thought that was pretty funny. Oh, yeah. No, no, you know what? Let's get, no. He also says, wanted to get your thoughts on an email etiquette situation. Big email etiquette guy over here. Someone reaches out to you asking you to provide times you have availability for a meeting.

56:12You respond to that person saying that the times you are available. And then they respond saying, this time and day works for me, but they don't schedule the meeting. Ah, I agree. It feels weird that I now have to schedule the meeting that they originally asked for. Yes, if you say the 15th at noon works for me, then you have to say, I'll send an invite. Yeah. Yeah, or you just send the invite. Yeah. Okay. All right, another good email. I started reading Extra Life, A Short History of Living Longer by Stephen Johnson. By the way, Stephen Johnson, great author. If I ever read nonfiction again. By the way, I was looking at my book the other day and I'm like, oh man, there's a bunch of books on my shelf that I haven't read, like I would love to in big meeting too.

56:50But realistically, I don't know if it's ever going to happen. It's hard. I do get most of my reading done in an airplane, but it's hard to find the time anymore. Who has 40 hours or however many hours? I don't know how long it takes me to read a book, but like - It's a lot. I don't have that time. Okay. I'm going to start a new publishing company called 100 Page Books. Nothing more than 100 pages. It masterfully tells the story of how human life expectancy has grown over the last 400 years. And anyway, the point is, One question this all got me thinking about, at what point in reading a book is it fair to recommend it to someone else?

57:24Halfway, fully read? Such a great question because, Ben, I've got a show that I started that it's called Man on the Inside. Now, it's the number one show on Netflix, so it's probably safe to recommend. It's Ted Danson. Are you familiar with this? No, I haven't watched it. I've seen it on the ads. Okay. I laughed out loud three times in the first episode. 30 minutes, pretty good sign. The second episode, third? I think for a book you have to go all the way through you do feel because I've done that before I've been halfway through a book and I said you have to read this and then it kind of tails off and you go oh shoot I jumped the gun on that okay but I think that happens with shows all the time too yes right we finished the old man in FX second season how was it I liked the first season the second season it just it was the total horse meme of great horse nailed it at the end of the season my wife and I were like wait what that's how it and Jeff Bridges and John Lithgow and it was just ugh Did you watch The Penguin, by the way?

58:16I'm halfway through it. Okay. Okay. I like it. I'll save my thoughts when it's done. Ben, recommendations. What do you got? Okay, so on the way down here, I watched Deadpool versus Wolverine. And I texted you and I said, this movie is totally unnecessary. It doesn't need to happen, but I still enjoy it. It's very entertaining, a very good plane movie. It's just Ryan Reynolds for two hours, just riffing, telling jokes. And it's, again, totally unnecessary, but I can't believe the amount of celebrity cameos in it. There is a ridiculous amount of big-name celebrities in this movie. So this screams airplane movie.

58:50Definitely. And I was laughing. My kids kept being like, what are you laughing at? And I'm like, oh, it's Ryan Reynolds. He just gets me. He tickles your funny bone. His sarcasm is just perfect. And, yes, again, it's like the whole movie doesn't necessarily have a point. It's not necessary. And it's still funny. Necessary. I mean, it's just, yeah. But as far as superhero movie goes, I would rather watch that then. It's just, it's so self-aware that it's really well done. I was about to say, is it necessary that I drink my own urine? Which is a joke that I've used on this show multiple times. What is that?

59:23I know you're not a dodgeball fan. It's Patches of Hooligan. Okay. I finally finished Slow Horses season four and it's the worst of the season and it was still a great show. The last episode was great. Hugo Weaving plays the bad guy this year. Really good twist at the end. It's just, I think it's the best. I think Gary Oldman gives the best performance of any TV actor in the 2020s. He is amazing as Jackson Lamb. So, Gary Oldman is amazing in this and no one watches the show I feel like. Okay. It's the best show on TV right now. Okay, you know what? I respect you for saying that and I'm going to dive in.

59:56It's been on my list. Just give it the first and each season is six episodes. Whoa, whoa, whoa, whoa, whoa. Give it what? Give it what? I'm just saying it. Give it a shot because it's only six episodes. I thought you were to say like give it four episodes until it gets going. The first one starts after the first episode. It's off and running. Okay. Okay. So the guy who we met last week at the Chicago live event, his name is not James. It's Brian. And Brian emailed us with a list of movie recommendations, all like these horror movies that he likes to watch. And one of them, this made me, this killed me, was Dude Bro.

1:00:34Am I getting this? It's Dude Bro Massacre Party 3 or something like that. Dude Bro Massacre Party 3. and he wrote in parentheses, there is no one and two. Okay. I did not see that movie, but shout out to Brian. Okay. I tried to take my kids to see Wicked on Sunday. And guess what? Sold out? Couldn't get seats. The only seats available were like first row. And there was one theater had a time every single half hour. So I'm going to - I'm surprised that you don't walk into the movie theater like the regular, like at Cheers. and they go, hey, Michael, take your usual seat in the front. So you love to see it, and it's getting great reviews.

1:01:14My kids can't wait to see it. My wife took them to see the play, and they love it, so they can't wait to see the movie. Yeah, so I'm going to take them on Friday. So Eric Davis tweeted, Wicked wins the weekend with$114 million domestic, $164 million worldwide. That is the biggest opening ever for a Broadway adaptation, the third biggest opening of the year, and the fourth biggest opening for a musical worldwide, and the biggest pre-Thanksgiving weekend since 2013. And also, Gladiator did some numbers to the box office. It's getting mixed reviews, which makes me sad. I haven't seen it yet. I will see it, but I kind of wish they didn't do it.

1:01:48Well, okay. So, oh, there's a new Taylor Sheridan show on Paramount+. At least that's why I'm watching it. Called Landman. It's with Billy Bob, Jon Hamm, Allie Larder. Remember her from Varsity Blues? Oh, yeah. Yeah. She's now much older because we're much older. I don't know if I'm allowed to say this without getting in trouble, but this is, this is, you know what? I don't know why I would be able to say this. This show is more for men than for women. Okay? I would probably say most Taylor Sheridan shows are. Okay. I'm almost ready to give up on Yellowstone. You're still watching? It's the last season.

1:02:24I thought I'd give it a try, but. Okay. I mean, the guy does like 12 shows. How can any of them be that high quality? I give him credit for doing it, but. First few seasons of Yellowstone or some of my favorite television until it horse - I don't think I'm going to try Landman. I'm sorry. I've watched a bunch of his other shows. I like the people's Yellowstone, but - The quality's not that great, but it's fun enough. Entertainment, okay. It's fun enough. It's brain candy or brain garbage. I don't know. I can't believe we made it on this because I'm doing this podcast from the 3G cell phone network here because the Wi-Fi was a little spotty on my phone.

1:03:00Can you imagine that? We can do internet from our phone in a different country. to do a podcast. It's wild. Right? Yes, I made it. All right. The lazy river is calling me. All right, Ben. Enjoy. Thank you very much for taking time away from your family vacation listeners. Listen, I needed a break from my family. Thank Ben. You can thank Ben by filling out the survey. All right. Animal Spirits at the Compound News. Personal emails, personal responses. If you emailed us before, you know what I'm talking about. Thank you, everybody. Thank you, Duncan, and the rest of the team for producing this as always.

1:03:35We will see you next week. Oh, wait. Happy Thanksgiving, okay? Yes. Happy Thanksgiving. This is a great time of year to be with your family. Go Lions. I can watch the Lions here too. To watch the Giants get destroyed. And I'll say this out loud, Ben. Oh, the Giants are playing too. I'll say this out loud. My highest conviction bet of the year. Moneyline Lions, Moneyline Cowboys. It's minus 130, so there's a bit of a vig. If this doesn't work, I'm putting multiple units on this. If this doesn't work, I'm going to hang my cleats up for this season. How about that? Just be careful. The Lions have been known to blow games on Thanksgiving, but fingers crossed we're a new team.

1:04:08The Bears are not going to score more points than the Lions, and I'm pretty sure that's how football works. All right. See you next time.