The Richest Country in the World (EP.351)

23:18And when you go to the grocery store every week and the prices just keep, going higher and higher. This is it. This is the whole kit and caboodle. This is why people are pissed off. Yeah, I get it. It just destroys people's sanity. And I totally get it. I get it too. Because it's the stuff that you see the most often. If you bought groceries once every six months, you wouldn't complain as much. It's the basic necessities. It's not like these people are like, it's not like this guy's like, man, I just took such an expensive, can you believe how much this flight costs to the Caribbean? Like these are the basic necessities.

23:52I also I'm not trying to like poo poo this story I get it I got some bananas today I sometimes I don't I don't understand how some things are still so cheap I got like 10 bananas and it was like two dollars and fifty cents so you're Ben Carlson says Ben Carlson says stop complaining and eat bananas listen if I was if I was on a tight budget all I would eat is eggs and bananas because they're so cheap. But don't you ever buy like a box of pencils or something and think that the amount of time it takes to produce this and pack it and ship it, and they still sell it. Anyway, sorry, I don't mean to poo-poo the inflation thing.

24:31Food share, food spending share of disposable income has hit a three decade high. Yeah, especially, yeah, it's expensive. But it's still, remember we talked about this a couple weeks ago, it's still way, way lower than it was. So look at this. This is kind of a chart crime. Which part? The axis. This is an axis misdemeanor. So they show the axis. It's from 11 % to 10%, basically. It's a little higher, but it went from— No, it's not a chart crime. It's showing exactly what it is. It's at a three-decade high. Start the axis at zero. You can't start it at nine to 12. That's a chart crime. That's not a chart crime.

25:03If you started the axis at zero, you wouldn't be able to see anything. Exactly. That's the point. It looks like a way bigger increase than it is. And this number— No, the truth is it's at a three decade high. And this is the way to show it. And the truth is also, this number was way, way higher in the 60s, 70s, 50s, 40s, 30s. Food made up like 40 % of people's budget. And now it's 11. Yeah, but that has nothing to do with anything. Why? Because people that are alive today, this guy wasn't buying groceries in the 60s. And also the thing is this thing crashed in 2020 because prices fell. So going from that low base to the high base, now, yes, it's increased, but it's not that much higher than it was pre-2020.

25:42None of these things matter. Whether it's a chart crime or what doesn't matter because people feel how they feel. Data doesn't matter? I'm sorry, it does. No, data doesn't always matter. Data does not supersede people's feelings. If you show this chart to a guy, you think he's going to punch you in the face? I think he's going to punch you in the face. Okay, see, you're talking about individuals and anecdotes. I'm talking about the whole economy. But individuals make up the economy. and a lot of people feel this way. Okay, see, this is you falling prey to the internet though. You see one viral video and you go, okay, that's it.

26:17He's right. You think this is the only guy? I'm not saying, listen, the economy is made up of hundreds of millions of people. There's always going to be this side, this side, this side. Like that's what makes an economy. But everyone's on this side. Everyone is paying a three decade high for not everyone. A lot of people are doing this. God, yes, it's true. The grocery store prices are higher. But it's not as bad as this story makes it out to be. Redfin reports asking runs climbed 2 % in February, biggest gain in over a year. So we got data today from CPI came out. Inflation's not going, hasn't, it's not going down anymore.

26:57I'm sorry. Yeah, no, this is, if we're arguing about decimal points, we've already won the game. If inflation is 3.1 instead of 3.0, we've won, okay? It's over. I don't know if it's over. The worst of the bad stuff, it's over. The Fed's going to cut in June. Michael McDonough tweeted, Michael McDonough tweeted, an increase in segment of the US CPI index is growing at an annualized rate exceeding 4%. In fact, subcomponents constituting over 63 % of the total CPI index are climbing at a rate faster than 4%. It's not over. I don't think it's over. Not saying it's going back to 7%, but it's not over.

27:36If it's 3.1 versus 3.2 or 3.0, like is that, I'm sorry, we're splitting hairs here. It's over. It's back to the long-term average. Those prices are still there, but it's over. So the Fed's going to cut in June. And the only thing that matters is if it stays a little elevated and doesn't go back to the twos, how many times does the Fed cut? I think that's what we're arguing about here. You really think inflation is over? The worst part of it, it's over, yes. The worst part of inflation is over. now if the economy reigns strong then it yeah if it re-accelerates that i'm i'm debating whether that's a problem or not if the economy continues to remain strong and inflation stays higher is that a is that better than the alternative of the economy faltering and inflation falling is that better but the the nasty inflation word about the 70s that stuff's over get it out of your system i mean yes inflation is not at seven percent anymore But to say it's over, I don't know.

28:32I guess we disagree on that one. Okay. 25 months straight with unemployment rate below 4%, which is the longest streak since the 1960s. We're never going to see a labor market this strong again. So I think maybe that would be the thing, but it's also ticking up a little bit, like very, very slowly. And I think that's something that could worry people. I think the best argument for, we've talked about people having a lot of money. the best argument for the Fed cutting rates here, I think is this. Logan Motoshami, new listings data this week. In 2011, there was 362 ,000 homes that were newly listed for sale.

29:12Of course, that was during a - Why did he choose 2011? I don't know. He's making a comparison. 2024, 59 ,000. Wow. This to me is, and Paul finally mentioned it on his press conference last week. This is the reason the Fed needs to cut rates is the housing market. But I think what they could do if they really wanted mortgage rates to fall? Because if you look at, I put this in your US existing home sales. Last year, it was the last 12 months of 2023 was 4 million. The average is like 5.3 usually. So there were still houses being transacted and sold. We're just talking, we're like one and a half million below the average.

29:48But why wouldn't the Fed say, listen, we want the spread between the, because the 10 year is at 4 % and mortgage rates are still at seven, which is really high for the long-term average spread. Why couldn't the Fed just say, listen, we want the spread between treasuries and mortgage rates to come down, and we're willing to step in there if we need to. Don't you think mortgage rates would fall immediately if they said that? All they need to do is talk about it. What if the Fed doesn't cut but starts buying mortgage bonds again? That's what I'm saying. If they think the housing market is, because that's a big part of the economy.

30:17And if people aren't buying and the economy is less dynamic because people aren't moving because they're stuck or they can't afford something, that's a real problem for the economy. I think the Fed's finally realizing that. Yeah, I agree. My opinion is with financial conditions so loose and inflation still, in my opinion, on the high side, why would they cut? Inflation is not high though. It's 3%. That's the long, long-term average is 3.5%. It's not high.

30:46You're going to have to come around to this one. 3 % inflation is not high. It's literally the average. Fine. What's the argument for cutting? The housing market, that's the biggest, that's the biggest argument. And the other thing is just they're in restrictive territory. So the Fed doesn't, the Fed shouldn't care about the stock market. That's not part of their mandate. The Fed should care that unemployment rate is slowly ticking up and the housing market is stopped dead in its tracks. But with financial conditions this loose and they cut, I get that they shouldn't care about the market, but isn't there a risk that they cut prematurely and we overheat again and inflation really picks up?

31:21That's the thing people are debating now though. Okay, the Fed's going to probably cut in June. Maybe before they were going to cut six times this year. Maybe now they only cut two or three. I think that that's the debate now. That they just don't cut as much as they thought. And then maybe people start really thinking that. And that's their signal to the market. Like, we're not going to go as easy as you thought. Just given how strong the economy, you know, ex-housing remains, I don't know. I'm not a central banker, but I see no reason to cut. Because there's no reason to be in restrictive territory like this.

31:52If the inflation rate is this low and rates are this high. But is it restrictive? It's not, what is it slowing down other than the housing market? Which is 20 % of the economy. 20 % of economic activity is the housing market. That's a huge piece of the economy. I think that's the biggest argument that you could make for, and again, they don't want to overstay their welcome and push us into a recession unnecessarily. Why stay restricted? Because eventually those restrictive rates are going to cause an impact. They don't do it at 16 months, but at 17 months, it's coming. Here's a headline. This is a Hall of Fame Grand Rapids hedge quote right here.

32:26Diamond says, U.S. economy booming, but recession not off the table. Now, I'm going to guess that he didn't actually say this. This is the headline, right? I'm sure I would guess. The link didn't have an article in here. I guess he was speaking. But I'm pretty sure Jamie Diamond wasn't like, listen, the U.S. economy is booming, but there's still a chance of recession. Right? He probably said that like way later. Like, he probably said like the US economy is booming. And then 20 minutes later, they asked him about a recession. And he probably said, you can't take that off the table. He has to do a Grand Rapids hedge for everything now because he said a hurricane is coming a couple years ago.

33:00My point is, this is headline twisting. We know how the game works. Yes. I think every financial CEO has to do a 60-40 hedge of everything. Like 60 % this could be bad, 40 % this could be good. But my point is, I don't even think he hedged. If I had to guess, I would say he said the economy is booming. Then later, when somebody said, can you take a recession off the table? What if he said, yeah, I mean, you can't ever take it off the table. Right. True. Because you can't. You can't. You really can't. All right, we are a very rich nation. And obviously, this is not evenly distributed. No shit. But Mike Zuccardi from Bank of America, household net worth jumped by$4.8 trillion in Q4 and is up$39 trillion since the pandemic closed.

33:47So Robert Burgess, Bob and Markets, tweeted something similar. See, so this is back to your grocery store stuff. This is the stuff where, yes, real wages across the board haven't caught up, but the people who are the wealthiest can say, like, ah, these prices stink, but I'm also richer here. And the people who don't have that financial assets, I think that's part of the reason that they're so angry, too. It's like, yeah, sure, my wages have kept up a little bit, but I'm not getting richer in this other stuff either. So this sucks. That's like the argument that I totally get that how unfair it is.

34:22But that's also why I don't want billionaires complaining about inflation. Like there's people who have legitimate gripes about inflation and the necessities and auto insurance and all this stuff. And those people do have a legitimate gripe. But there's a lot of people who are complaining who don't have that right. Yes. He also, so Burgess also shows households wealth is a massive resource that easily allows the US government to fund debt and deficits. So he has a chart that shows total household wealth, total public debt outstanding, and it dwarfs it. I don't know if it's four to one, but it's a massive number in terms of U.S.

34:53household assets versus the government deficit. Yes. Anyone worrying about debt in this country and thinking everyone's just credit card debt and the assets dwarf the debt so much it's not even close. It's not even close. And then he breaks it down. Real mean net worth rose to$1.8 million among 65 to 74-year-olds. But look at the monster jump for people less than 35. The 2019 real net worth was 89 ,000. It jumped to 184 ,000 just three years later. That's a 107 % increase. We're never going to see a jump that big again, I don't think. Like a three-year period like that, right? Young people went from being totally behind their parents' generation to far above it in terms of where they were at that age, which is crazy.

35:40Again, I think there's a big difference between net worth and income, right? Like nobody celebrates their net worth because you can't spend it, right? If your 401k is jacked to the you-know-what, that's cool, but it doesn't impact your grocery. You don't feel less bad about your grocery bill because your 401k is higher. So you're saying the wealth effect is bunk? I never was a big believer in the wealth effect. I really wasn't either in terms of speculating or I'm going to spend more money. But the data does show that savings rates go down when people feel wealthier with their net worth. Fair, but I think that's more of a function of the economy and less like the value of their 401k or their house.

36:24Right. I'm not saying it's nothing, but I think there's greater factors at play. All right, Ben. Because for me, my house is worth way more than it would have been otherwise, which is it's just crazy to think that the domino effect of we got some dude ate a bird or whatever, and people are richer now than they would be. Like my house wouldn't be worth as much as it is. And my stock portfolio wouldn't be worth as much as it is if we didn't have COVID, which is bizarre to think about. When you walk into a Burlington, you're walking into amazing prices and great gifts. That's main character energy.

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37:43Available feature on equipped vehicles. Terms apply. Does not replace safe driving. See Ford.com slash Blue Cruise for more details. I was watching a financial advisor, Jason Pereira, did a presentation at the Exchange Conference about AI. And there was one scene where 30 minutes into his presentation, did you watch this? No. 30 minutes into his presentation, he stopped speaking. And on the screen was him speaking. And on the screen, he's like drinking a cup of water, doing a little bit of theatrics. And on the screen is his voice saying, I've been talking for 30 minutes now. I'm going to take a break.

38:28And then he fed whatever his voice to the computer. But then you saw his actual body come up on the screen. And it looked exactly like him. And then it was him delivering the speech. And all of that was AI generated. and then it started, Jason's hologram started talking in Japanese. Some of the AI stuff that I think a lot of people are just not playing around with is going to blow people's minds very quickly. So I hopped on mid-journey, which is sort of a pain in the butt. You have to like connect it to Discord and you have to do the prompts to Discord. I have yet to find a good website to do the generative art where I want to because I've tried to do...

39:13What's it? Mid-journey is the best one? Mid-journey. It's pretty... I mean, it's not hard. You have to connect it to Discord, but... Okay. So anyway, look at this image. So I typed in stock market crash on Mars, and it generates four images for you. The first one's my favorite, the guy looking sad with a... Scroll down. So I big screened that. It's pretty good, right? That's a good one. Yeah, I like that. And then I Googled... Googled. What do we call this? I mid-journeyed? I don't know. I prompted two dudes podcasting on Mount Everest. Okay. Did you say one bald, one with hair? Well, I did try to, I did.

39:49I also, I didn't include this in the doc, but I wrote Michael Batnick with long blonde hair. Sadly, my ego took a blow. Mid-Journey does not know who I am. It was just a random dude. So I do think that the tools of AI and this kind of stuff and like the AI assistant, that stuff's going to be great. I don't think the information is going to be as helpful as people. So as in his interview said. But just as an assistant. So like we're our podcast, our YouTube is going to eventually be broadcasting in other languages. That makes sense to me. Yes, that's coming. So as this in his interview said, we don't think AI, at least in our field, is as revolutionary as others do.

40:24It's just statistics. It's a whole bunch of data going in and a forecast coming out. And I thought about this. Remember Google had their Gemini thing a couple weeks ago. Yes. And all the tech industry was all up in arms because they put some prompts in there where, like, you had to be diversified. There had to be enough diversity in your pictures. And people got all up in arms, like, this is crazy. And Google's too woke. And people got really mad about it, which, whatever. But Ben Thompson was talking about this, and it just made me think. We got all this information. You have all the information humanity could possibly want in the palm of your hand now.

40:58And 24-7 cable news and all this stuff. and think about how many people have just had their brains rotted by this. It hasn't helped them become more informed. It's only have them have more confirmation bias and be even less informed. So like the AI information side of things, if AI gives someone the answer they don't want to hear, they're going to seek out another AI. So there's going to be like these political factions of AIs. People aren't going to like the information that they get, and they're going to go, okay, I want another AI that gives me the answer I want. So I think informationally, like the garbage in, garbage out thing.

41:27There's going to be political AI. There's going to be political AI, and people are going, But instead of finding the right answer, people are going to find the answer they want to hear. Yeah, I think you're right. So I think that's the kind of thing where, I don't think it's going to make us more informed. Unless the people, I mean, obviously some people use it the right way. A lot of people won't. Yeah. One of our, all right, crypto. One of our listeners emailed us. They got scammed from, I think it was a phone call from Coinbase. Just a public service announcement. Be careful. Never do anything from a phone call and never click on any link in an email.

41:57That's Ben's rules of not getting scammed. The problem is like, I got a call from American Express. So somehow I got a text. Did you authorize this charge on Twitter? I'm like, no, but I don't know. I just assumed it was fake. Then I got a call from American Express. And again, I assumed it was fake. I called them. Turned out it was real. Okay. That's the thing. I would always call that number. I would hang up and say, I'm going to call someone else in your organization. All right. Eric Newcomer has a chart. So we spoke about how there is a little enthusiasm in gold, at least looking at the AUM.

42:33You can't say the same about crypto ETFs at all. But if you look at the monthly download totals of top cryptocurrency-related apps in the United States, it is still on the floor compared to where it was in 2021. I think, understandably so, a lot of retail that got burned the last time is just out. They're just, they want no part of this. Counter to that, Eric.Eth on Twitter said, retail isn't here yet. Like, quotes. By the way, I love it when you read the handles of Twitter people or Bitcoin people or crypto people. It's always these random, it's like, Holder69420 says. Yeah. Well, it's usually not somebody's full name.

43:19uh uh quote retail isn't here yet and they said yes they are they just aren't in btc and eth so he shows a google trench chart of meme coins and yeah that's uh unfortunately that would that would vertical so the the etf stuff is crazy because the the price is up more than 50 percent since it bottomed i guess it's probably up what 70 or 80 percent since it bottomed at 40 whatever when you were about to buy no i no oh i did buy a 38 000 i just i only bought a little bit but gbtc James Safer wrote this the other day. They've had 11 billion in outflows, which is crazy since it converted into an ETF.

43:54But the AUM is still the same at 28 billion because price appreciation has brought it back up, which is crazy. And I guess they did announce today they're going to do some mini ETF. It's kind of like Berkshire B shares or something where they're going to convert it to a lower fee. So that was nice of them finally to do that. Yeah, it says, Balthunis tweeted, It's a mini-me low-fee version of GBTC, which investors in GBTC will be able to get into without a tax hit via a special dividend. That's cool. That's good for them. Good for them. They were catching a lot of shrapnel for keeping the fees high, but that's cool.

44:35Will Clemente tweeted, Bitcoin ETF inflows have absolutely blown golds out of the water. Not even close. Looking at GLD flows, inflation adjusted. and yeah, these charts are not even remotely the same thing. Balchunas says first two months officially in the books and the 10 Bitcoin ETFs now have over$55 billion in assets with exactly double that in volume. If these were the numbers at the end of the year, I call them a success to do it in eight weeks is simply absurd. So yeah, IBID and FBDC are doing as much, not doing as much, but they're on the same chart as VLO, IVV and VTI. So people complained forever that they weren't, the SEC wasn't allowing a Bitcoin ETF and it was a problem.

45:17You could argue the timing of this actually worked out perfectly for crypto because it's a little, it's kind of far away from the SBF stuff. And there wasn't anything else really going on in this space that this happening was perfect timing for the industry. I didn't consider that. That's a good point. All right. Lastly, I, I don't, I don't know what's going on here. So Michael Saylor tweeted, MicroStrategy has acquired an additional 12 ,000 BTC for$821 million using proceeds from convertible notes and excess cash for$68 ,000. They hold$6.9 billion worth of Bitcoin at an average price of$33 ,000 a coin.

46:00So I was reading up on this and I'm thinking to myself, who's buying these convertible notes? Who's giving him this money? I don't under, I genuinely don't understand. That's a good question. It's paying 0.62 % a year. And I think there's like a 40 something percent premium in the stock price that maybe you can convert it and get that spread. I'm not exactly sure who the buyers of these things are, but I'm assuming they're not complete idiots, right? Like I assume they know a lot more about this than I do. But then Sam Lee quote tweeted and said, Sailor spent$820 million to buy Bitcoin last night.

46:31MicroStrategy's market cap is up$2.4 billion as a result. He's turned MicroStrategy into a perpetual short squeeze machine that converts losses from short sellers into BTC. So convertible note, buy Bitcoin, add four times a net to your market cap, and he just keeps doing it. Over the last year, MicroStrategy is up 680 % and Bitcoin's up 250%. It fell more, but it's a levered bet on Bitcoin. It's a levered bet on Bitcoin. So again, I don't know enough about the mechanics. I'd love for somebody to explain to me what's going on here, but it seems pretty, I don't know if genius is the right word, but whatever he's doing, it's charting.

47:09If you look at the chart of this stock, just straight vertical the last, it's pretty crazy. Yeah. The last year or so. Anyway. Can we talk about some good news in the housing market? Please. I've been trying to do this more. So this is from the Washington Post. Less money, less house, how market forces are reshaping the American home. And they have this chart in here that shows new homes are gradually getting smaller. So the median square foot topped out at like 2 ,500 in 2015, and it's now fallen to less than 2 ,200, which is kind of where it was in the early 2000s. And they say, D.R. Horton, the country's largest home buyer, sold more than 82 ,000 homes last year, most of them under$400 ,000 into first-time homebuyers.

47:48Its lineup now starts at 900 square feet. These are those smaller homes we were talking about. Even Toll Brothers, which is known for its high-end properties, was average sales of prices of a million dollars are downsizing to lower price options. sales under$400 ,000 more than doubled the past year, outperforming more expensive properties. Do you think there's a sweet spot for housing size? I don't know. I mean, I think the reason this is happening is just because people, it's cheaper. And they're realizing like there's a market for this. We talked last week that 30, what is it? 31 and 32 year olds are the most, are the biggest age cohorts in the country.

48:22Like they're meeting demand where it is. It makes sense. This is actually a pretty good sign, right? I think so. Here's a bad sign. This is from Freddie Mac. A lot of people have thought, and I've talked about this too, like the 2030s, the boomers are going to start dying off. It's morbid, death and taxes, you know, whatever. So Freddie Mac decided to look into this. And so they said, as of 2022, there's 69 ,000 baby boomers. Credit to you for not making 69 jokes anymore. You've matured a lot. You know? It used to be every time you would do one and you'd say, nice. So I appreciate you not doing it anymore.

48:56Being a father has just made you more mature, hasn't it? It's a year of maturity. All right. So baby boomers account for 21 % of the population, but 38 % of total homeowners. And so the point is these boomers are holding onto their houses. They need to sell them. But they show that the boomer households is going to go from 32 million in 2022 to 23 million by 2035. So 9.2 million fewer boomer households. But it's going to be like a slow trickle for that to happen. And it's going to be, it's like less than 1 % of owner-occupied homes are going to be hitting the market in the 2030s. It's not going to be a big amount.

49:36It's not going to be like a tsunami of boomer houses hitting the market. And Logan Motoshami made a good point about this. That the, remember all the crazy old folks homes stories from the pandemic of just COVID ripping through? and Logan was saying that like that, people seeing that may have caused like, how many boomers are going to want to go to a retirement home? Like when they, like are they actually going to want to give up their house? Or are they going to say, no, I'm going to spend a little more money and have home care here or something. Unless they have the AI robot to take care of them then, I don't know.

50:11I think most people are going to choose rich. Have you seen that guy? Yes. Hilarious, right? The weird thing about the internet that would be hard to explain to someone in the past is you can't really, there's a gray area between someone who is playing up a part and being themselves as a douchebag or just being a douchebag. And you can't tell that the line is blurred where someone is doing a bit versus they are this person, they're acting. You can't tell anymore. So for people that are unaware of this bit that we're talking about, there's a crypto bro who is going on these wild rants and then he's ending it with choose rich.

50:48So I'm not sure. I don't follow this guy closely. I don't know if this started out as like mildly serious and then turned into a complete joke. Like obviously at this point he's joking, right? This is, it sort of looks like an SNL skit at this point. And he's hilarious, but I also don't want to give him too much credit because if this started out real and then he discovered that people, and then he pivoted to like, oh, I'm just going to be in on the joke. It's like the meme from, what's that show on Amazon with the superheroes, the boys, where the guy's like, eh, you know, he kind of comes around.

51:16But either way, credit to this guy. he's producing internet gold. All right. Uh, New York times had a story. A bunch of people sent me this because it was the best spot for first time home buyers. A lot of first time home buyer talk here. Number seven on the list, Grand Rapids, Michigan. And they, they talked about this from, uh, affordability, employment opportunities, commute times, and local culture and entertainment options. Okay. Grand Rapids, Michigan, number seven on this list. What do you guys have that culturally that's good for young people? Well, they just named Grand Rapids for, I think the seventh year in a row, Beer City USA.

51:47We have tons of breweries. A lot of the brewery scene really, you know, founders and bells. Actually, a lot of it started in West Michigan. There's concert venues now. There's lots of good restaurants. The changes in Grand Rapids downtown from now and 20 years ago is night and day. It used to be literally nothing to do. Are there cultural differences between East and West Michigan? Yes, definitely. It's, yeah, but don't you think, if you go to a city these days, so many cities look the same. They all have the similar looking restaurants and breweries. And if you travel around, it used to be like, you know, you'd get different things in different cities.

52:23Now most mid-sized cities kind of all have, have it figured out. Like we have to have a good little downtown area. We have to have the coffee shop. You have to have like a, like a restaurant with like exposed brick. Yes. They, they all kind of have figured that out. If there's a river or a body of water, you build around it. So they've all kind of, it's, they're all kind of similar now. It's, which is a good thing. But I look, I pulled this up in Grand Rapids city proper. I looked for, you know, House is under, I think I did 300 ,000. And I put the map in here. There was a ton of them. I found one of these little mini ones, remember we said?

52:51So this one is actually 1 ,300 square feet for 180 ,000 in Grand City proper. It's gotten way more expensive in the suburbs and stuff. But in the city, there's still relatively affordable housing. All right, so$225 ,000 for a three-bedroom, one-bath house with 1 ,344 square feet. That doesn't sound like a bad deal. That's a large apartment. Really large apartment. I looked at that. It's like this brand new renovation. I was surprised there was more supply than I would have thought. All right. Here's something that's never happening again, I think. This is from Bloomberg. Non-mortgage interest payments climb to an annual rate of $573 billion in January.

53:30It's the highest on record even after adjusting for inflation and within a hair's breadth of the annual mortgage interest. So interest paid on everything else, credit cards and car loans and all this stuff and personal loans is about as high as mortgage interest payments, which is, it's never been close because mortgages make up 70 % of the debt in this country. Wow. This is just never happening again, right? And what, what is this credit cards for the most part? It's gotta be, I'm guessing auto loans is a big part of it too. Cause auto loans are a bigger and student loans. I mean, this is, this is definitely, this is definitely weighing on people, but this is the, this is the bifurcation of the United States.

54:07If you own a home with a 3 % mortgage and you pay your credit card debt every month, higher rates have not impacted you very much. Not even, not even. If you don't own a home and you carry credit card debt and you buy a new car, you are saying this is Weimar Germany. Yeah. I, I hate talking about things in terms of us versus them, but that's really what happened here. Yes. There's a, and this is especially why I say young people have the biggest gripe against the economy right now. If they didn't buy a home, they have a gripe. Yeah. So yeah. So, So it's showing the effective mortgage rate is still below 4%.

54:41Like that's if you averaged everyone up, even with the 7 % mortgages and credit cards are much higher. But interest payments has a share of U.S. household income. It's still very low, way lower than the 70s and 80s, way lower than the 2000s. It's going up, but it's still much lower. I got a question for you. These, wait, John, maybe you can tell us since you're a car guy too. How big of a D-bag do you have to be to say Porsche as opposed to Porsche? Like do you have to watch F1 every morning on the Saturdays? What do you think? Would Duncan say Porsche or Porsche? I think Duncan does say Porsche.

55:13Okay. I mean, it's technically the guy's name. So you don't say like Farrar. You say the full name. Ferrari. But yes, I see where you're coming from. I go 50-50 between them. No, if you're a race car fan, fine. That's it. I think that's, yeah. If you have a F1 hat like Duncan, you have to. So the reason I say this is because these Porsche Cayennes are the, their smaller SUVs. It's one of those things where if you see one, you see them everywhere. And so I've been seeing them all over the place. What's the bigger one called? I didn't know there was a bigger one. I actually think the Cayenne might be the bigger one.

55:48Okay, so I see them. And it looks kind of like one of the Audi Q whatever, Q5, 6, 7, whatever. It looks kind of like an Audi, I think. But I see them all over the place now. And I'm thinking, geez, how expensive are these that so many people are driving a Porsche around? And it says they start at$79 ,000. So I'm guessing you add a bunch of bells and whistles. the average cost is probably, what, 90? 90, yeah. I'm just surprised that I see so many of them. Do you think it's because people just, it's a brand thing? Like, I can say I drive a Porsche if I drive one of these things. Is it a brand thing?

56:20Yeah, what else would it be? I don't know. It's just, I'm surprised how many of them I see. And here's a further question. So we're talking about inflation. If you drive a Porsche, can you complain about higher prices? Even if it's a Cayenne and not a regular Porsche? Definitely not. Okay. Did you see the curb with Lori Loughlin driving a Porsche away? That was a sweet Porsche. Yeah. By the way. That was pretty great that they brought her on for that. Two things on this. My seven-year-old Kobe had a curb your enthusiasm moment. Okay. So he, like I, has spilkis and is not the best behaved in school.

56:51He's not bad. He's not mean. He's not like punching kids, but he's silly. He's chatty. He doesn't raise his hands. That's my son. He can't sit still. Yeah, all things that impacted me when I was his age. So we get a report every day, like a smiley chart, to monitor his behavior. And yesterday, he was so proud that he got all smileys for the first time. And not even like a chatty at reading time, like nothing bad. It was just all smiles. And I said, Kobe, I'm so proud of you. I'm going to give you a pack of cards. I'm going to give you a Vision Pro. Exactly. In fact, it wasn't a pack of cards. like a sticker book, a sticker book of cards.

57:32So anyway, later in the day, Robin asked about his teacher and Kobe goes, she wasn't in school today. We had a sub, we had a substitute teacher. And I'm like, that's why you got all smileys. So she gave everyone a smiley face then. Everyone got smileys. He got graded on a curve. My son had to, so they'll have their little chairs and he would lean back so often in his chair, it's got four legs, he kept falling over And he did it all day. And my wife works in the school, walked by one day and saw he was literally on like his own special chair that had no legs. It was just a little spinny chair. And he's the only one in the class who's sitting on a special chair because he couldn't sit still.

58:11So I'm not going to complain about the situation with my wife's car because nobody – it's really lame when people are in a position to broadcast stuff. And like when people complain about like airlines and stuff, it's like nobody cares. They're looking for a handout or something, right. But I just will say this. I'm not going to tell the full story and smear them through the mud, which they deserve. I'm not going to do that. Oh, that's right. You sent me the email the other day. Truly unbelievable. But here's the thing. So I said to Robin, we will never buy a German car ever again. Now, when you buy versus lease, those are two totally different things.

58:48But I don't even want to lease this car again. And she's fighting with me. She's like, but I love my car. It's not corporate. It's a dealership. I'm like, it's both. They both stink. So what do I do? She really wants to lease another. I said, let's get a Kia Telluride. Great car. Let's get a Toyota whatever. Get a Cayenne. No, that's not happening. All right. So my wife and I got married in 2007. And this morning I went to iron my shirt, got it look crisp for the podcast. And iron died. And we got our iron as a wedding present. So almost 17 years that thing lasted. I wanted to buy the same one again.

59:25It doesn't even exist anymore. Who made it? I was like, shark. They're the ones who make like the vacuums and such. Do you iron your shirts every day? Depends how wrinkly it is. When's the last time you used an iron?

59:39I'm just going to guess. It's been a while. No, every time. No, no, no. Every time I go, every time I stay in a hotel and I have a button up. By the way, you'd be proud of me. Last week, I don't know if you saw the pictures of me on TCAF. I was wearing like slacks and a button up. and everyone was like, why are you dressed up so nice today? I was like, what? I can't dress nice? In the office, everybody, like 10 times, I'm like, all right, here's the truth. I have two pairs of jeans and they were both dirty. You know what I did this weekend? I went to Nordstrom. I got five pairs of pants. So now I should be good for the next decade.

1:00:18So you went to the mall? I went to the mall. Did you spend like$400 on a pair again? Jeans are really expensive. I got two pairs that were$200 each and two pairs that were$130 each and one pair that was, I can't remember. Is that too much? I don't know. For me, that's, I only buy clothes that are on sale pretty much. But I don't buy clothes. I don't buy clothes. And guess what? If I'm doing the math, these things will last me, honestly, four years. So it'll probably be$2 or wear. See, I have way more clothes than you, I think, though. Right. I probably have 20 pairs of jeans. Okay. Well, if I had 20 pairs of jeans, I probably would.

1:00:55Yes. Anyway. All right. Can I read an email that we got? It's a bit long, but I thought it was so nice. I wanted to share. Oh, and it's from a British person, right? There's a you and a favorite. It's got to be. Gentlemen, apologies, as this may be a bit long. Your podcast is my favorite by a long shot. I haven't missed a single Wednesday show since inception. I started working and investing in 2017. and in the years since, your guidance has helped me put my financial feet solidly on the ground. Without your wisdom, I think the ups and downs of the market through COVID would have done me in. In 2020 through 2022, 2020 through 2022 was very hard for me.

1:01:34I had career troubles, felt bad about my finances, and we lost in many ways. Listening to you guys regularly was a bright spot and helped me feel so much better about my life. I cannot thank you enough. Listening to you both is like being in a room with my friends. Your chemistry is so obvious and immersive. I regularly find myself laughing, nodding along and finishing half of your jokes because you guys do such a good job building rapport with the audience. The fact that you can make anyone feel positive and educated at the same time is a testament to your incredible talents as both financial professionals and human beings.

1:02:00Michael, your introduction for Eli was moving. I had difficulties at various times in my young life and hearing that come to the surface for you was cathartic for me. I felt like I was there with you on that emotional journey. The way you talk about Kobe, Robin, and the rest of your family is chef's kiss. Today's comment about returning to AVP because Kobe. Wow, I think you already... All right, this is getting too much. Ben, on to you. Ben, you are one of the most measured podcast hosts out there. I agree with like 90 % of your takes and the advice you give on animal spirits and ATC is so balanced and well thought out.

1:02:29Investing is a journey and you have helped me understand my risk tolerance better than anyone else. Your emphasis on planning and thinking about the long run is so helpful. Your ability to remain focused on the long-term data and realities of the market is what carried me through the lows of 2022. Not only in terms of investments, because I applied that same rationale to my career and it has turned out better than I could have imagined. You even turned me on to the Miami Vice in Florida. And that was the best beach drink I ever had. Oh, Toronto. This person in Toronto. Darn straight. That was very nice.

1:02:55How nice was that? And I will say, we actually got like two or three that were very similar to this this week. And I don't think we talk about the audience enough or thank the audience enough, but we're, I don't know about Ben. I don't take you guys for granted. Maybe Ben does. I don't. I know that - Hey, I'm the one in the comment section every week. I know that podcasting, not podcasting, your time is a finite resource. And the fact that so many people choose rich with animal spirits, whatever on Wednesday morning is part of your routine, it means so much to us. So thank you. Yeah, we appreciate it.

1:03:33One more. Last week, a bunch of people wrote about the wait times at restaurants. And a lot of people said, yes, I used to work at a restaurant. We make it up. but we always go higher. So the person feels better psychologically. That makes sense to me. That does make sense. So we say 40 minutes, we know it's going to be 20. You know, I don't know if this is an anecdote or what, uh, is there, is Benihana national? I don't, not sure. Yes. Yeah. International. International. I ate one in Aruba once, which is pretty bad. Okay. So I have, I have never been to a Benihana. I've never been to a Benihana.

1:04:02I've had Hibachi, but I've never been to a Benihana though. And the wait time was, we got there. It was, we had reservations for, it was Robin and the kids and another family and their kids. We got there at 7.30, reservation. I don't think we sat until like 8.10. It was kind of weird. It was packed. So when we were on the way there, I said to Kobe, I've never had Benihana. He's been there before with his friends. And he goes, oh, you're going to love Fibachi. It was very cute. Kids love that kind of stuff, right? It's fun. Throw the shrimp up in their mouth or whatever, yeah. Did you watch the Oscars?

1:04:31I did watch some of the Oscars. Did we talk about the Pacino thing? No. but it was, well, he sure mailed it in, huh? It was so weird. He walked out on stage. Now, listen, he's a legitimately old man, but he walked out on stage. It was like he had a dinner reservation. He looked at the envelope and said, I see Oppenheimer. No, no, and here are the nominees, nothing. Just Oppenheimer. That's just, I've lived a long time. I think this happens in all. We always laughed at my grandma when she got old. We were at a restaurant one time and my wife, who I think she was my girlfriend at the time, her fiance, and she wasn't paying attention.

1:05:09And my grandma just kind of clapped at her like, hey, get your order in. Like, I think when you're old, you just do what you want. Don't you think? That's like... Clearly. Yeah. All right. So speaking of the Oscars, I tried to watch, because Emma Stone, I'm a big Emma Stone fan. I always liked her. From Superbad on, she's been great. So she won the Best Actress nominee for Poor Things. And so I'd never really heard of it, but she was on Smart List, and she talked about it. And it's a film, not a movie. And you said before, like Ben, you're a film guy. Like there's no way I'm a total film guy because this movie, it's on Hulu.

1:05:42You're a film guy. I saw the trailer. I'm so out on this. I'm sure if you went to film school, you'd go, oh, the angles of this. But I've never taken meth before. But I imagine that taking meth feels like this movie. It's just... Did you enjoy it? No, I turned it off for 20 minutes. Again, if you're a film person, you could say, oh, I appreciate they went for it here, but it's just so bizarre. Too much for me. New show. I think someone might have – sometimes it's hard for me to tell where I get my recommendations from. I think this is from a bunch of people in our email. Drops of God is a show on Apple.

1:06:19It takes place between France and Tokyo. So there are some. And so it's English, French, and Japanese that people are speaking. So there are some subtitles if you're against that thing. I don't mind it because I know what to read. not to brag. It's a show about, I'll give, because it's in the IMDB description. This woman's father dies and he has the most expensive wine, wine cellar in the world for like$150 million. And it's his daughter and his protege for wine tasting have like a wine taste off for who gets his collection. That's the premise. And it's really good. And it's a little bit pretentious wine stuff, but it's, I'm kind of blown away how good this show is.

1:07:04I've never heard anyone talk about it before. I never heard of it. One more. Colin Farrell's best performance ever. You've seen In Bruges before? Of course. I watched again for the fourth time probably. He has the dim-witted... I love that movie. He's so, so good. All right. Very good. That's it. Again, Ben, credit to you for putting me on to Mr. and Mrs. Smith. Pretty good, right? Blown away. I can't believe the quality of it. They have to have another season, I hope, right? I don't know. I don't know. I'm just saying with, I think they could be different spies, but the one with the neighbors where they have dinner and they still kind of kept you in the dark about what was really going on.

1:07:40Very good show. If they do another one, if they do another one, it should be a different couple. I don't need to spend any more time with them, even though I thought it was great. I just, I thought one season was good enough. Yes, I'd like to see a different couple. Okay. Because I want to learn more about the organization. They didn't tell us enough. Yeah, true. So Ricky Stenicki, did you watch it? I did. We both, we texted about this and it went straight to Amazon. It's the kind of movie that should go straight to Amazon. It's a raunchy comedy, which we don't get a lot of anymore. And it was the dumbest plot ever, but it made me laugh a lot.

1:08:13It made me laugh a lot. John Cena is legitimately a funny comedic actor. I can't believe it. Yeah. Yeah, John Cena. I mean, he showed off at the Oscars. He's talented. I mean, beyond talented. He carried the movie. He plays basically that same character in Vacation Friends, which is two movies on Hulu. and Ricky Snicky is better than those movies, but he's funny in those too. I actually, I kind of like him. So this movie was directed by Peter Farrelly. Did you know that? I didn't know that until you told me and it makes sense thinking about it. So anyway, so I was looking at Peter Farrelly's IMDb.

1:08:48I didn't realize he directed Green Book. I thought he was a comedy guy only. Remember Green Book? I didn't know that either. So he's also done, and how did I not know that he did Hall Pass? Yes. That makes sense, too. That makes sense, right? They do have their, yeah. So he did it without his brother then. He also did Shallow Hal, me, myself, and Irene. There's something about Mary. He did that with his brother. Kingpin, Dumb and Dumber. Remember a couple weeks ago, I told you Shallow Hal, they should do a new one. I love Shallow Hal. Where women get hypnotized into thinking men like you have hair.

1:09:16That should be the new Shallow Hal. All right. That's a good place to wrap. Animalspirits at thecompoundnews.com. Personal emails. Keep them coming. Personal responses. Thank you very much for listening, and we'll see you next time.

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