The Worst Bear Market Ever (EP.329)

In short

Animal Spirits Podcast - Episode 329: The Worst Bear Market Ever

Podcast Overview Hosts: Michael Batnick and Ben Carlson Focus: Markets, life, and investing Episode Release: Weekly on Wednesdays Sponsors: YCharts

Episode Description In Episode 329, Batnick and Carlson delve into a variety of topics including:

Rising long-term bond yields.
The worst bond market sell-off in history.
The implications of good news being bad for the economy.
Strength in the labor market.
The role of baby boomers in the economy.
A review of Michael Lewis's latest book.
Millennial preparedness for retirement.

Key Topics Discussed

Current Economic Landscape
Rising Long-term Bond Yields:
Discussion on the reasons for increasing yields, including government debt concerns and market dynamics.
Contrasting views on whether rising debt levels are a significant factor affecting bond yields.

Worst Bond Market Sell-off:
Reference to historical comparisons indicating this bear market in bonds is unprecedented.
Discussion on how the bond market's behavior differs from the stock market during similar economic conditions.

Good News vs. Bad News
Labor Market Strength:
Insights into the current job market with surprising reports on job creation.
The contradiction of good news leading to potential economic tightening from the Federal Reserve.

Consumer Spending Patterns:
Examination of how older generations, particularly baby boomers, are sustaining the economy through increased spending as they enjoy retirement savings.

Generational Insights
Boomers vs. Millennials:
Boomers are identified as significant contributors to current economic stability.
Millennials are seen as better prepared for retirement, largely due to automatic enrollment in retirement plans.

Book Review: Michael Lewis
A review of Michael Lewis's latest book, which received mixed feedback. The hosts express disappointment as the book fails to critically address the complexities of its main character and the broader implications of his actions.

Market Dynamics
Bond Market Dynamics:
Exploration of the supply-demand aspect in the bond market and its impact on yields.
Discussion on how the actions of central banks have influenced market behavior historically.

Stock Market Reactions to Economic Data:
Analysis of how positive economic indicators are being interpreted negatively by the stock market due to anticipated Federal Reserve actions.

Key Takeaways

Acknowledgment of the complexities in understanding the causes behind rising bond yields and their implications for investors.
The labor market's resilience presents a paradox, as good news could lead to tighter monetary policy.
Generational differences in economic behavior and spending patterns are notable, shaping the current economic landscape.
The conversation emphasizes the unpredictability of markets and the impact of external factors on investor sentiment.

Transcript

Automatic transcript. May contain errors.

0:00Today's Animal Spirits is brought to you by our friends at YCharts. Every quarter YCharts releases a top 10 visuals resource. It's packed with data and visuals to help advisors easily easily communicate complex and insights. topics with clients or prospects. Okay. So WhiteCharts is hosting a new webinar, October 18th, kind of give a deep dive into visual deck. Topics ranging from the value of long-term investments to the art of crafting the right retirement portfolio allocation, all packaged in convenient, editable. That's a tough word to say. Editable. That does not roll off the tongue. That's right.

0:35Editable slide deck that you could easily leverage during a meeting or conversation, which is probably the best part about visuals is just being able to show people, explain them very easily. We have a link in the show notes to register for YCharts webinar to receive your own copy of the top 10 visuals for clients and prospects slide deck. And remember, 20 % off, as always, if you tell them Animal Spirits send to you and sign up for your new subscription. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching.

1:07All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.

1:34Welcome to Animal Spirits with Michael and Ben. I have to start the show, unfortunately, with a quick word on the events in Israel. I wrote this down because I don't want to go off the cuff. This is too important to have anything taken out of context or potentially say anything I didn't mean to say. So here we go. All right. I know people don't come to our show for takes on such things, but it would feel callous to not acknowledge what happened over the weekend, especially as a Jewish person who, like most Jews, lost a lot of their ancestors in the Holocaust. I know that the Israel-Palestinian thing is super complicated, and I will not pretend to be an expert on the matter.

2:17But what those animals did, raping women, kidnapping children, and killing babies is unconscionable and should make any human being sick to their stomach, regardless of any affiliation that you might have. Supporting the Palestinians and supporting what Hamas did over the weekend are two very, very different things. And to see people chanting, gas the Jews in city streets and death to Jews, forgive me if that scares me more than just a little. All right. That's all I want to send a matter. Please emails don't send them. I know that this is a sensitive topic, but not interested in having a back and forth on this.

2:56I think the one thing that it, that this sort of brings up to me is just that if you're in a place where you don't have to worry about barbaric things like that happening, just count yourself lucky. It's, it is kind of crazy that I guess if you look back at the whole human species, we're a very barbaric species at times, unfortunately. And obviously we haven't rooted all that out yet. And it's just, if you're lucky enough to not have to worry about stuff like that, and you have to worry about stuff that doesn't really matter as bad as that, I think consider yourself lucky. That's like what we talk about.

3:29Yes. Yes. You're in a pretty privileged position if you don't have to worry about some of the crazy things that go on in this world. All right. No easy way to say it to the show, but that's what we're going to do. All right. Just another reminder that myself and a lot of the folks at Red Holes Wolf Management are going to be in North Carolina during the first week of November. I think it's like November 7th is the Monday through the 8th. Is that right? Yeah, that's the 6th. Okay. We're going to be doing a live taping at the Compound and Friends. We're holding that in the NASCAR Hall of Fame, which should be a good time.

4:03So we'll have links in the show notes if you're interested in meeting us there. One more thing. I, along with our president, Jay Tenney, I'm going to be in Philadelphia on October. It's a Wednesday, 25th, at the Schwab Impact event. If you would like to meet up, shoot the breeze, as they say, you know where to find us. You take the bus to Philly or the train? I'm taking the train. So I planned on, I wasn't going to do an overnight. There's no need. It's only an hour and 20 minutes. But I was going to dinner there. And you know what? It's opening night at the Garden. So I will not be. I'll be in and out, shooting in and out.

4:41Take the 520, get to the Garden at 640, walk right in. Credit to you for pivoting to the Knicks so quickly and just pretending the giant season doesn't exist. Yeah, they're dead to me. It's over. All right. So last week, we spent a lot of time talking about rising interest rates. And I wanted to put a little more meat on the bone there because a ton of people, we kept saying, like, we don't know why rates are rising. And a lot of people wrote in or commented and said, I know exactly why rates are rising. Here's the reason. And I think some of these theories are worth discussing. So like the bear's take, of course, the doomer take is, listen, debt is spiraling out of control and our politicians are crazy and constantly causing problems and they're holding the country hostage every 45 days with the potential for government shutdown.

5:24That has to be it. It's the debt thing. and my rebuttal to that is i mean we've been the debt thing has been going crazy forever what all of a sudden like flip the switch cullen roche said again good theory why is the dollar index rising then so he has a chart showing the u.s dollar index rising if this was the end of the u.s empire as we know it and the debt is out of control and people are losing faith why is the dollar rising you would expect the dollar to be crashing in that scenario so i so we could dismiss that But yeah, I also think like I'll only believe the debt spiraling out of control thing if and when the Fed loses control, because the Fed sounds like they want rates to rise right now.

6:05And if I think that Jerome Powell could snap his fingers and cause rates to plummet if he said one sentence. If he said, listen, we're going to go buy treasuries or interest rates would plummet. That's when I'd be worried if if the Fed tried to bring interest rates down and they couldn't. That's when I'd say, OK, maybe it is the debt thing and maybe people are. It is kind of out of control. Other people have said supply and demand. There's too much debt. I do think that's part of it, that the Fed probably screwed up the Treasury market when they went in to buy. And the same thing with the mortgage market.

6:35They bought a bunch of bonds, and when they got out, there was this vacuum created. That wouldn't make sense to me. How about this? Now, here's the more Goldilocks take. And you always give me a little bit of shit for poking the bears, which is kind of fair, but I think that there's also a good reason for being more optimistic this time. Like 5 % to 6 % nominal GDP growth, if that's what we're in, is consistent with 5 % to 6 % 30-year treasury yields. Look at the table I put in here. I did a blog post on this. Average bond yields, average inflation yields, and average nominal GDP growth by decade.

7:10When inflation and rates, when inflation and growth has been higher, rates have been higher as well. Wait, hold on. Break this down again. What are we looking at? So this is average 10-year bond yields, average inflation rate, and average nominal GDP growth by decade, which is kind of funny. I mean, no one ever, GDP growth is always on a real basis. It's the one thing that we always inflation adjust. Most of the things we don't inflation adjust. No one ever really looks at nominal yield. I get why people do it, but so in the 90s, nominal GDP growth was almost 6%. Inflation was only 3%, and then bond yields were averaging 7%.

7:42Now, bond yields were coming down then. They're going up now. Maybe that's why people don't like it as much. But Matthew Klein in his recent post at the, what does he call it, the overshoot? The right level of interest rates at any point in time. But hang on. Wait, can we just go back to your table? What's the takeaway here? The takeaway is that if we are in a new regime of higher economic growth, then higher interest rates make sense in light of that. And it's not only bad news that rates are rising because if rates are telling us that economic growth is going to be higher, then that's consistent.

8:15So here's Matthew Klein. His explanation is good. He's at the right level, and he uses right in quotes. of interest rate at any point in time, to the extent there is such a thing, is merely a reflection of the underlying economic and financial conditions, where better conditions tend to correspond with higher rates. If we end up with 2 % inflation, 2 % real growth, and a 2 % risk premium, then longer yields could be around 6%. So it seems like bad news for people who are borrowing, obviously, to have higher rates. But if those higher rates are commensurate with higher economic growth, then it actually makes sense.

8:46And I think that's probably good news. Yeah, I just think the speed at which we arrived at this, quote, right level, that's the part that's alarming. Yes, because the prices, that's the other component is the prices for so many things, especially like the biggest things you borrow for houses and cars have not adjusted to the new level of rates, right? Those things aren't in line with one another. In the past, sure, rates were higher, but prices were... The ratio of prices was not as out of whack as it is now for cars and housing, which is the two biggest things people borrow for. Yeah, because prices were already putting the hurt on buyers, and those haven't come down at all.

9:35And so interest rates are just making everything very difficult. Yes. But if you wanted to put a positive spin on it, it would be, okay, the bond market is telling us growth is going to be higher, which we just haven't had to think about for a long time because growth has been so much. I mean, if you look at it, the nominal growth in the 2000s and 2010s was in the 4 % range. What if it is 6 % now and we have 3 % inflation? That's a world in which higher rates should be higher. But can we handle that, I guess, is the big question. Callie Cox, regular on the show here. This is an issue. We talked about like the curve, yield curve.

10:14What did we land on? Steepening that we're going with or uninverting? Disinverting? I would say disinverting. Steepening is good. Okay. So she shows the last times this has happened, the yield curve has steepened before, but it was only because the Fed cut rates. Not the same situation right now. So I think really the bond market stuff really is kind of uncharted territory where every time this happened in the past when the yield curve inverted, the only thing that made it not inverted anymore was the Fed cutting rates. And that's why I think it's so confusing right now. Yeah, it is weird that the yield curve was inverted and the long end is being pushed up by, again, theories, but economic strength, higher for longer.

10:58Yes, which is, we've obviously never had that happen before, right? Where the yield curve inverted and then the economy kept getting stronger. So here's another one from Fed Woes here. Normally at the end of Fed tightening cycles, bonds rally. This time it's been different. Investors had priced in and are now pricing out recession with a quick turn towards rate cuts. So this shows 95, 2000, 2018, 2006, the change in tenure yields from six months before to 12 months after a Fed rate increase. And this one is not followed script. Another theory, although I I don't know why. I'm sure this is there.

11:33Listen, all these theories, there's probably a lot of truth, right? It's hard to like divide the pie. Like, no, this is the main reason. And this is only a minor reason. But a definite reason why is the amount of supply in the market. The treasury is still flooding the market with treasuries. And buyers aren't as eager. One of the big buyers of treasuries is Japan. And now for the first time in decades, their interest rates are going significantly higher as well. I don't know what's driving their rates higher, but my point is having the local bonds as competition for U.S. bonds, they're not buying our bonds in the same way that they once were.

12:16It is kind of funny, though, that there was more demand for bonds when they were 1 % or negative. I put this one from JP Morgan in here. I was looking for an old blog post of mine, and I found a post from early 2021, and it was like, investing in a world with no yield, which is kind of funny now. And it shows the breakdown of, I can't remember when, early 2021, developing market government bonds by yield. And look at the percentage. I think it was 30 % were below zero, and over 80 % were below 1%. Wild. Not that long ago. So how much was there like three trillion in negative yielding debt? It was a very high number, which is the good news is now that's only one trillion.

12:58Right. But that's my point is that people were clamoring for that debt now. And now it's like, well, it's a supply demand thing. I do think that the Fed getting in there in the treasury market really screwed up things when they dropped out and stopped buying bonds. I think that messed things up. So, you know, we, especially you like to poke the bears. one of the things that they were saying was like, the Fed is manipulating the bond market and distorting prices, which is clearly true. They were. You cannot argue with the fact that what they were doing has had massive, massive, massive ramifications for everything.

13:34Interest rates have always, always been manipulated. In the 50s, in the 40s, the government put a cap on rates because they wanted to finance the war. And guess what? There was huge inflation after the war. and the government still capped treasury rates so they can inflate away the debt. What does that have to do with anything? You're saying like, look over there. No, I'm saying rates have always been manipulated. People are saying like, oh, where's free markets? Markets were never free. That's my point is that this stuff has always been manipulated. I think people have this idea in their head that like, if we just let free markets take hold, everything will be better.

14:05And like markets have never been free. That's my point. The Fed has always controlled the short end. But I'm saying the government literally capped interest rates on the long end in the 1940s and 50s. Okay. But yeah, but that doesn't mean that what they did over the last decade was unprecedented. Yeah. No, I agree that they probably screwed things up for sure. And I just think it's funny though, that there was so much demand when rates were low and you'd think there'd be way more demand now that rates are higher. Well, that's what I thought. I mean, the thing that I was most wrong about, I hesitate to say in my whole career, because I've been wrong about many and many things, but I didn't see interest rates going.

14:44I didn't see the 10-year going much past 3%. No, you would have assumed buyers would have stepped in because they've been so starved for yield. Now, obviously, had you told me inflation would do what it did, I might have thought otherwise. But anyway, yeah, I thought that if rates got to a certain level, that there was going to be a tidal wave of buyers, like the you shall not pass. Just give me all of that rate. And again, could not possibly have been more wrong on that one. Bank of America did this thing where they go back to like the 1800s to show how this is the worst bond bear market in history.

15:15I know people are complaining about higher rates, but it's not a general freakout like it is with the stock market. I think Meb Favorite put out a tweet last week saying like long-term government bonds are down 50%. Why, if this happened to the stock market, people would be losing their minds. Why are they not doing it in bonds? Yeah, I think two things. Number one is – by the way, that's a great point. I saw somebody tweet this, that the crash in long-term bonds – it hasn't been a crash. It's been a slow, slow, slow bleed. It's not like there's been a down 6 % day. Right. We're talking like a three-year slow – just – yeah.

15:59So whereas in the stock market, you get panic because you'll get like the down 8 % days and then just people freak out. You don't have that to cause freak out behavior, even though the decline is measurably the same. The other part of it is, you know that if you hold on long enough, now in this case, if you're down 55%, you're going to be waiting, I don't know, 10 years, whatever it is, you will get your money back. These are treasuries after all. Now, I'm not saying the losses aren't real until you sell. That's obviously not what I'm saying. But you know that at this point, you're in a better position than you were, it's easy to say, 50 % ago.

16:38I don't even sound like trite here. But that's the reality of it. The other thing is that not every bond investor is invested in long-term bonds. And here's the thing. You had an escape hatch. If you had the bull, because I know a lot of investors thought like long-term bonds are the best hedge. When the stock market goes down, people rush into long-term bonds, and they are a great hedge. And so a lot of people had long-term bonds as their safe part of their portfolio, even if they're more volatile. You had an escape hatch with 3 % T-bill rates and 4 % T-bill rates and then 5 % T-bill rates. So if you have stayed in long-term bonds this whole time, you're down 50%, you have no one to blame but yourself because you had a better alternative with higher yields and less volatility that you could have gone into.

17:17So I think that's part of it is not everyone who is invested in fixed income, most of them are not invested solely in long-term bonds. True. That's a good point. That's a really good point. It's not like TLT is 60 % of anybody's portfolio. Like when you're in the stock market, sure, there's defensive sectors that hold up better. But the stock market crashes. Everyone feels that pain. You had an out in fixed income. I think that's true. Yeah, also your retirement is riding on stocks in a different way than it is long-term government bonds. So just different. I made the point last week that I've never been a fan of investing in long-term bonds.

17:51And that was a painful thing when long-term bonds were in this long, long bull market. But they've always been way too volatile for me to have it make sense to be in a portfolio when you already own stocks. Yep. Yep. Fair enough. All right. Jeremy Schwartz with a good thread. Do rising treasury yields make stocks unattractive and too expensive? I mean, this is the crux of it, right? Like everything prices off of interest rates, mortgages, credit cards, stock market. Jeremy says the nominal equity risk premium comparing earnings yields to the 10-year treasury yield is at its lowest level in about 20 years.

18:27And the earnings yield is just the inverse of the PE. So that's what that is. However, stocks are real assets. So the more appropriate comparison is versus TIPS. Jeremy then says TIPS yields surging past 2.25 % for the 10-year. are providing some real alternatives, but even... Okay. Sorry, let me just fast forward. Okay. A 5 % earnings yield would double purchasing power in 14 years. A 3 % equity versus premium versus tips is consistent with long-term 3 % edge of stocks versus bonds. So I bungled the shit out of this, but the point... We'll put this in the show notes. But the point is that if you compare the equity risk premium using real rates, stocks do not appear dramatically expensive.

19:14Now, here's the thing. If you are a doomer person and you're saying inflation is going to be higher, you should be buying tips hand over fist right now. The real yield on tips of 2 % to 3 % is not only an amazing relative deal for the past 15 years or whatever, relative to history of tips, which only goes back to like the mid-1990s. This is like an insane buying opportunity for tips if I've ever seen one. You know what doesn't feel like happened over the last three years, although according to this chart from Bank of America, it did happen? Value has outperformed. Now, I don't know. So they're showing the value versus - Wait, over what period?

19:50Three years? They're showing value versus growth through your annualized return. And they said value wins again in the shift to a 5 % world. Does it feel like value stocks have outperformed over the last three years? no because it felt like you had an 18 month window where they did and then it just reverted i'm looking i'm looking i'm doing the russell 1000 growth and value right now what are you saying three years yeah okay over three years the russell 1000 value is up 30 percent the russell 1000 growth is up 24 i would not have i if you would have bet me on that one I would have lost. So not dramatic, but this is over three years.

20:33Definitely not nothing. And if you look at, let's say, if you look at small value versus small growth, that's where the spread is. So over the last three years, small value is up 31%. Small growth is down 5.5%. I mean, I know that we've mashed together kind of a bubble with a bear market, but three-year returns of up 30 % is considering everything that's been thrown at us is pretty darn good in the stock market, correct? Damn good. If you measure that against all the headlines and all the economic data and everything that's been going on, interest rates rising, the Fed being so aggressive, and you got 30 % over the past three years, that's a pretty good deal.

21:20Damn good deal. In America, half of every dollar spent on brand medicines goes to entities who don't make them. While middlemen like PBMs and 340B hospitals drive up costs, Biopharma is investing$500 billion in new infrastructure and manufacturing here at home and helping patients buy medicines directly at lower prices. Tell Washington to end middlemen markups and put American patients first. Visit phrma.org slash middlemen. Ford Blue Cruise hands-free highway driving takes the work out of being behind the wheel, allowing you to relax and reconnect while also staying in control. Enjoy the drive in Blue Cruise-enabled vehicles like the F-150, Explorer, and Mustang Mach-E.

22:13Available feature on equipped vehicles. Terms apply. Does not replace safe driving. See Ford.com slash Blue Cruise for more details. All right, let's talk about the labor market. Last week was very odd. We had soft data out of ADP. I think estimates, actual came in at like almost just barely over half the estimates. They were expecting to see like 150 ,000 jobs created, private payrolls, and it was 80, something like that. And then you got non-informed payrolls on Friday. Doubled expectations. Blew it out of the water. With wages not really rising that fast. But look at this, though. So we're working on about, I don't know, four months worth of wages rising faster than inflation, though.

23:03I really like this one that shows when wages are rising faster and when inflation is rising faster. And so, yeah, wage growth is coming in, but it's still above inflation, which I think is pretty good news. Heather Long. Wait, Ben, that's a good point. We spent so much time, and when I say we, I mean people that write headlines and I guess us to a certain extent lamenting the fact that, yeah, wage gains were happening, but not as quickly as price increases. And now we're going the other direction, and it's not like anybody's really celebrating it. Yeah, no one really cares. Heather Long did the zoom out.

23:382.7 million more people are employed now versus a year ago. Wage growth a year ago was 5.1%. Now it's 4.2. Inflation was 8.2%. Now it's 3.7%. She said almost no one predicted this good news story, which is true. So Jason Furman also, who's been relatively bearish on the economy, said like, this could actually be quite good, this employment report. So I want to talk about finance brain when it comes to economic data like this, because the jobs report numbers were on the news on Friday at our house. And my wife goes, wait a minute, that sounds like pretty good news to me, right? And I said, yeah, that's good news.

24:13More people have jobs and like the labor market remains very strong. She's like, so she's an occasional listener to the show. And she said, well, if this is good news and you say inflation is coming down, why are you and Michael talking recessions last week? And honestly, I was like, well, because the economy is doing good. So the Fed's gonna have to raise rates and that could be bad. It's like, if you take the finance brain element out of it and you just looked at this on the face value, you say, wages are rising faster than the inflation rate. The labor market remains very strong. Unemployment rate remains very low.

24:43economic growth is as high as it's been since like the 90s. That sounds like all good to me. And then the finance brain has to come in and say, no, no, actually that's bad. Because it means the Fed's going to have to throw us in a recession or something. If you look, you know, you know what I'm saying? It's like, I had a hard time explaining it to her. Like, no, the good news is actually bad news. That's how you have to think about it. Well, because honey, the market is forward looking. So I like on Friday, when we got that number and futures were lower, I thought to myself, You know what? I'd rather the stock market go down on good news, on good economic news in anticipation of rates staying higher for longer, than markets rally because we get a bomb of a report and the Fed is going to back off.

Read the full transcript

25:28And then what happened? The numbers were good. The stock market sold off. And then it came back. It was like good news is good news for an afternoon. But you agree? Bad news being good news. Who roots for that? Right. I am sympathetic to the fact that so many people have been like so many economics people have been saying, why are people so unhappy? And we've talked about all these reasons for a while now. We've we've like dissected it a million different ways. CNN had this piece and it says, here's why the shockingly good job support is going to cost you. And it talks about and it's it's all doom and gloom and bad news.

25:58And this person says we should never cheer a bad job market. But a job market that has remained this healthy for this long really isn't excellent news for average Americans struggling to pay their bills. And again, getting back to the inflation piece of the thing. I don't think people at this point, it's been going on for so long. No one wants to view. I'm sorry. Fuck off with this headline. Seriously. Right. It's really, it's like that. That's just, I don't see the news for this stuff. This is, this is, this is please click on my article. Cause that's how I get paid. Yes. This is the stuff where it's like, yes, there are legitimate reasons why people haven't been celebrating the economy, but like trying to like take good, actual good news and then spin it so it's bad is I can't stand that.

26:39Maybe people are nervous because we keep saying a recession is coming and that's giving them angst. How about that? Yes. Well, yeah, people have been talking about it for 24 months now, 18 months. All right, just back to the job support. So remember this chart that we spoke a lot about in 21 and 22, that the best way to get a raise was to change your job, right? So they showed the change in annual pay versus job savers, I'm sorry, job stayers versus job changers. And those are, so the job changers wage growth has completely rolled over and job stayers as well. So the average hourly earnings was up 0.2 % month over month.

27:23That's the lowest in at least a year and down to 4.15 % year over year. The spread that it got to, that was crazy that at one point you were getting 15 % or 16 % wage growth for people who are changing jobs. Yeah, pretty wild. This article from the Journal about older people spending I thought was really interesting. And another example of you see the headlines, you think about interest rates, why aren't they impacting spending, why aren't they impacting the economy? you probably wouldn't have thought that there are more older people relative to the population than there ever have been before.

28:00So 65 years or older, it's 17.7 % of the population. It was 30 % in 2010. So it's the highest on record going back to 1920. Okay. And their behavior has changed dramatically post COVID. A lot more of them are retired. A lot more of them are saying, you know what? I've spent my entire life saving. It's now time to enjoy myself. And that is impacting consumer spending dramatically, given that they're, again, 18 % of the population. And if you just looked at interest rates, you never would have thought about that. The Wall Street Journal has been all over the consumer spending stuff these past few months and years.

28:37And this one is, yeah, it's great. The chart that shows the 65 and older share of consumer spending just going up and to the right, like a long-term stock market, it is crazy. So what is it, 22 % of spending last year, up 15 % from 2010. They have a few YOLO things in here, like all my life, it was safe for this, safe for that, said Maureen Green, 66 of Cape Cod, Massachusetts. Now that there's money in the bank and I'm spending it in ways that bring me closer to my friends and family than I did before. Good. Yeah. And she said she's spending 25 % more than she did in pre-pandemic. I do think there is something to that.

29:08The boomers, a lot of people probably had some friends die or, you know, my parents are getting up there in age and they're starting to have friends get some really bad health problems. Like all the time I hear, you know, this person has this wrong with them. And this person we have to visit in the hospital. And I think there's something to that of. Absolutely. Absolutely. The average household led by someone age 65 and older spent 2.7 % more last year than in 2021, even adjusted for inflation. So they have the most wealth. What's the number? Like 40 % of all mortgages are paid off. That's mostly boomers.

29:42They have a ton of equity in their home. they're going to spend the money and they're probably going to say, screw the kids and grandkids with their inheritance. Let's enjoy this a little bit. Most of them, some of them are, it sounds like. American Cruise Lines, which gears its cruises towards older consumers, said it has seen double-digit sales growth this year, driven largely by boomers. Long cruise ship thesis here. Over the next like 20 years, it's going to be all boomers taking cruises. I mean, cruises have done very well this year. Here's the quote from an economist. Our large share of older consumers provides a consumption base in times like today when job growth slows, interest rates rise, and student debt loan repayments begin again.

30:16Is there a cruise ETF? I don't think so. Oh, wow. Oh, there's a hotel, airline, and cruise. Yeah, that's... Oh, JETS is the ETF for airlines. So there's a cruise, C-R-U-Z, which is hotel, airline, and cruise ETF. It's had a pretty healthy pullback. Yeah, it's up 13 % year-to-date. So it's... I mean, these things are still... And these things are still... You know what's interesting? These things are still well, well, well below their 2021 highs. Right. Yeah, they got killed, right? So let's see. Carnival, for example. Even after the rally, Carnival's in an 82 % drawdown. Royal is down not as bad, down 33%.

31:03What's Norwegian? Norwegian is down also 73 % from its high. Yeah, so a lot of pain in these stocks. I'm surprised that with Carnival now in 80 or 90%, there hasn't been some consolidation in this industry. You'd think it would make sense, right? Because all of their ports and their ships and stuff, you'd think Royal Caribbean would buy Carnival or something like that. Maybe a Wham, Tom Wham Gams. What the hell was his name? Yeah. That's right. He was the head of cruises. Duncan shared this with us from last week. Do you think there was a poll, 3 ,000 votes. Do you think the U.S. will have a recession in 2024?

31:3763 % said yes. And unfortunately, I'm in that 63%. But I'm only 51 % confident. All right. I'm 63 % sure that it's going to be a second half story too. How about that? We're putting a time frame on it. I don't know. All right. More about bonds. Eric Belchunas says, the Fed fight has transformed bond ETFs into cash incinerators. So the top three cash incinerators, meaning the money you've bought in versus the money that's been lost to investors. Vanguard total bond market ETF, which is, I think, the biggest bond market there is, the ag, and then 20-plus-year treasury, based on what they've brought in for flows versus their losses, are the top three cash incinerators.

32:23I've always said that Vanguard was destroying Americans' wealth. It is. But the thing is, I know people always say, like, investors, the stock market is the only place where stuff goes on sale and investors run out the door. People are running in to buy treasury bonds right now as they're crashing and yields are going higher, which I think if I'm trying to nail the bottom and long-term treasuries, again, that's not my sandbox. I don't want to play there. But the behavior of people rushing in to buy in a crash is actual rational behavior for once. People always say, oh, investors are the worst.

32:59They do the opposite when they should. This is the opposite of that. People are rushing in to buy when prices are down, which makes sense, correct? Yes. Buy when there's yields in the street. But people keep selling stocks. This surprised me. US Stock Mutual and ETFs, so mutual funds and ETFs are on track to record outflows for 11 consecutive months, the longest streak since the The stretch ending in March 2020. Thoughts? Buying bonds, selling stocks. I'm going to go back and blame the boomers for this again. Fair? Like, instead of 60-40, in the last 10 years, we've overweight to 80-20 or 70-30.

33:44Now we're going back to... I think that's actually precisely right. I would love to have a breakdown of age in this type of... Like we did with consumer spending. But I think that's absolutely right. Remember, like, eggflation? beefflation. Lots of flations. A lot of flations. So UN food and agricultural world food price index definitely stopped going up. And not just like year over year. I mean, the actual level. Right. It's crashed. Prices are coming back down. Right. And this was a huge, huge spike too. Wow. That's a surprising chart. Remember corn prices in February 22? It was corn, wheat.

34:30Remember we talked to Sal from Tucrium about how his whole thing about agriculture was people find a way. They're going to be like when prices go up, farmers will plant as much on their land as they can. And I think that's probably what happened. Because remember, there's all those crazy stats of like the Ukraine produces 30 % of the wheat in the world or whatever it is. and people are saying that there's going to be, you know, people are going to run out of bread. And the fact that we didn't have disruptions is pretty crazy. Prices went up, but then they crashed right back down. Speaking of corn, I was in, I took the boys pumpkin picking yesterday and Kobe and I went into a corn maze.

35:12I'm never doing that again. It was awful. Did he get lost? I couldn't figure out a way out. It wasn't even fun. Like it was stressful. Just walk right through the corn. Thought about that. So I opened my Google Maps and you could see the maze from the sky, which is kind of neat, but it wasn't precise. Wait, you did a Google Maps in the corn maze? Yes. It wasn't precise enough to get us out. We were in there for like, I think like 50 minutes. So I thought we did the pumpkin picking thing this weekend too. And there's a corn maze. We actually didn't do it. But all this other stuff. Smart. Yeah, we didn't do it.

35:48You could feed the ant. They had the petting zoo and they had all this stuff. And we have, you know, five or six of those farms around us. And it just got me thinking that it's so funny to me that this is how farms make money now through millennial parents and people who want to post pictures on Instagram and go pumpkin picking. Because we could have bought a pumpkin at our local store, right? You know, as we're walking out of the store, but you know, you want to go to the pumpkin patch to do it. And all these places, these farms have, are doing so well, or they're seemingly doing well. because they're like building these new, like these huge new restaurants and areas to shop in.

36:21They're all expanding. And it's just funny to me. How much did your pumpkin picking experience cost you? Actually, I mean, it wasn't that much. I don't know. 60 bucks for some candy apples and pumpkins. So ours was$60 to get in. It was$15 a ticket. Oh, see, we didn't have to pay to get in. And then we had to pay. I paid$20 to get stuck in a corn maze for an hour. And we spent$30 on pumpkins. Do you have to pay to get into the place and then pay extra for the corn maze? Oh, yeah. And then we had to pay, you know, Robin got like some popcorn and waters and whatnot. We've always spent$120. Okay, yeah.

37:00Corn maze is free for us. But what's the number? Like in the 1800s, 80 % of the labor market worked in farms. And it's just funny to me that farms now, yes, they still serve a purpose. But now it's for millennials to do something with their kids on Saturday. And that's how they're making money. All right. We talked about Michael Lewis last week. I decided like enough with the interviews and stuff. I just have to read the book. So this weekend, you're a source guy. I read the book and my initial takeaway is that I'm not mad, just disappointed. And I think the reason the reviews are so bad is because this could have been an awesome book.

37:36It could have been really, really good. And I honestly think that he had this idea in his mind of it's the underdog story and I'm going to underdog story. And then the stuff came to light about the fraud. And I think he just couldn't, he tried to put some stuff at the end about it. I think he just couldn't turn the, turn it around enough. And I just think that he liked him too much. I think he, the, the, the, the stuff that I did get out of the book, like I wouldn't recommend reading it really. If you've read a lot of the stuff. I don't know if there's no, the only new stuff I really got out of it, that he was much more of like an alien than I thought.

38:14Like he seems like he was an alien sent to earth to learn human emotions. Right. And that's the, that's the thread that Michael Lewis almost didn't pull off on. He talked about how he realized that he had to like smile. He had to like force himself to smile. He had, it wasn't just that he didn't have empathy. He didn't like have happiness in his life. He had to like practice smiling in the mirror. He had to like practice human emotions. And the thing to me, he could have easily been a serial killer or a person who committed fraud on this scale and like became a made of billions of dollars because he he was so robotic and that part to me was the biggest but the thing is the thread there was okay he learned how to like have these human emotions to get people to like him because the effect of altruism stuff was all bullshit he just wanted people to like him obviously the next leap forward would have been okay that's how he committed fraud too because he he could trick people he learned how to trick people and he didn't make that leap i don't know lewis wrote the conman toversky book and I think my biggest takeaway here is that human nature is just undefeated.

39:09That even studying the behavioral stuff doesn't shy you away from your own blind spots and human nature stuff. So I didn't come away being like, Michael Lewis is a fraud. Everything he did before this, I think he just is a guy who really, really likes underdog stories and he wanted to write another one and his character he chose was this totally out there person and that's the story he wanted to stick with. And I think he just said, you know what screw it I'm sticking with the underdog story that's what I'm that's what I'm doing so I didn't come away saying like Michael Lewis was in the bag for him I think he just he liked the guy I think that I think that's as much as what happened so I I don't know I would say it's like I don't know it wasn't like a page turner either it was kind of hard to get through I'm skipping it thank you I think it's I I wouldn't it I wouldn't read it um okay so I to fact check a little bit from last week.

40:00We talked about how there's not that many homes being sold. And I said, it's more than you think. And you said, no, it's all new homes. So I'm fact checking us here because I didn't know. So I reached out to Logan Motoshami on this. So I said, like, how many houses have sold? I actually found it on Y charts. U.S. existing home sales for the past 12 months. That's how to read this chart. It's crashed, right? It was above 6 million for a while, but it's only back to like 2009, 2010 levels, which doesn't sound great because that's a bottom of a real estate bear market, but 4 million homes in the last 12 months have sold, existing homes.

40:34Wait, are you using this chart to support the fact that people are selling homes? Because this does not do it. Yes, but look at the next chart. U.S. single-family new houses sold, 675 ,000. That's my point is that there are still existing houses turning over more than new houses. So yes, it's about as low as it's been, but I don't know, 4 million out of 160 million or so households, there's still activity happening, even though it's way lower than it should be. Well, I brought charts too. All right. The mortgage purchase index. Does this look like there's activity going on or not? Because this is basically, I don't know.

41:14I mean, it's, I don't know. When did this chart start? I can't really say. Is this early 90s? The mortgage purchase index is basically as low as it's been over the last 30 plus years? We talked to a friend in recent weeks who works in a loan department. And it sounds like they work on commission. And if you're in that situation, how bleak does the world seem to you? From years and years of refinancing activity and house sales and all this stuff, because even if rates drop from seven and a half to six or five, Sure, there's probably going to be some more demand. There's going to be more activity in the housing market, but you're not going to get a huge flood of refinancings at that point.

41:57I think that the whole loan industry was living off of refinancing activity for years, right? And that's just not going to come back for a long, long time. Maybe ever to what it was at the peak. Yeah. Yeah, it's rough. All right. So here's the something's got to give in the housing market that we talked about with inflation. So this is Lance Lambert from Black Knight. To get back to pre-pandemic housing affordability, one of the three things would have to happen. U.S. income spike 55%, home prices fall 35%, or mortgage rates fall 4%. So that'd be get back to 3.5%. You know, whenever you say something has to give, no, that's when you know that nothing will give and whatever you think has to turn will not in fact turn.

42:44But out of all these three things, the only one that would make sense to me would be mortgage rates. But at that point, housing prices probably, if mortgage rates fell back to 3.5%. Home prices gained 35%. Right. Yeah. So this is the, yeah, something's got to give. But to your point, it's probably never going to give. Ben, a couple of weeks ago, we spoke about the fact that a lot of companies are raising funds to purchase or provide liquidity to private equity funds. Jason Zweig tweeted, if someone asks you to define chutzpah, you no longer need to say, quote, like when a guy who killed his parents asks for clemency because he's an orphan.

43:25You can say, quote, like private equity providing loan shark liquidity to investors in illiquid PE funds. Well said. If you ask me to spell chutzpah, not a chance. Right? Right? But yes, I mean, the thing is, I was talking about private equity being in trouble like seven years ago. And somehow that I think because they have the illiquidity in the really long time horizon for their funds, I think they can just kind of tread water and tread water and tread water. And you don't really see the bad stuff like trickles in. It's not a stock market crash. I think they're able to push things out and push the bad news out and spread it out so much.

44:09that it doesn't seem as bad as it really is in a lot of cases. Yeah, the bad news, like, you know, vintages from 2017, like they'll start coming in slowly. Right, but it takes a while. You don't see it right away. All right, here's an interesting survey from Redfin. 59 % of recent homebuyers say purchasing a house is more stressful than dating. Of course it is. Who are the other 41 %? Yeah, if they had Tinder for houses, if you could just match up to a house by swiping, left or right, that'd be way easier. Do you think that dating is like 10 times easier these days with the apps or is it harder?

44:46I don't know. You know, perspective, I guess, is important here. Speaking of that, and real estate. I'm just glad I didn't have to go through the app dating phase. I don't think I would have not liked that. I think I might have enjoyed it, even though I'm not very social. I don't know. Who's to say? Who's to say? I think if you did it, though, let's say you were single. Robin dies in a car accident. Plane accident. Sorry. Sorry, Robin. Do we put up the picture with you with your hair, though? And then you show up to date and you're bald? Is that how we play it? I'm proud to be bald. I'd roll with it.

45:27That's true. So I've spoken over the years about the way that my town is set up. Houses are on top of each other. I'm looking out my window right now. My neighbor is, I don't know if that's 15 feet. It doesn't look like it. Maybe it is. Houses are on top of each other. Everything's very densely populated here. And somebody was talking to me, somebody who moved to Long Island was talking about maybe living in this place or that place. And they went to, I think it was Jersey they were talking about. And I've thought like, man, it would kind of be nice to have like more land, you know, to not have my neighbor yell at me when I light a fire in the backyard.

46:06That'd be nice. But then I can, I, this never occurred to me until they mentioned it. They said that this place that they were looking at was a non-starter because the houses were like almost too remote. Now this is hardly rural areas, but it's your neighbor might've been, I don't know, a hundred feet away from you. And if you wanted to go to the supermarket or the bagel store, you have to drive, you know, 15, 20 minutes. And it never occurred to me like, huh? Yeah, I don't know if that sounds so great. I don't know. Maybe it is. I guess in the back of my mind, I always thought that that's sort of, that would be appealing to me.

46:40But in a weird way. Having like the land is, and being so secluded, especially with kids, I think you want to be in like a more neighborhood setting. Yeah. Again, it just, it always sounded nice to me. But then when they said it, I was like, I never even thought about that. Yeah, it is kind of nice having neighbors, even though they yell at me about my fire. You know where the best of both worlds is? We live in a neighborhood in the Midwest, but you have more room. Yeah, that's probably the sweet spot. It's like, yeah, I would like neighbors, but could they be like, I don't know, 20 feet away from me?

47:09Right. Do I need to have the rascals like banging on my door? Could Kobe and Logan play every afternoon at four o 'clock? Probably not, probably not. But maybe there's something nice about it. All right, Ben, we rolled our 401k over to Fidelity. And when I say we, I mean us and our colleagues at Rit Holtz Wealth Management. I never realized they had like the website, like my 401k.com. Something like that, right? Yeah. Oh, is that it? Something 401k.com. I mean, Fidelity is the biggest 401k platform in the world, I think, right? Yeah. If you type in 401k.com, it brings you to Fidelity. That's a pretty good get.

47:46There we go. Okay. So I tried to log on and it said like you already have a login, like create a new one or something. So I had to my social, whatever, whatever. And MassMutual, my former employer, so I was like huh do I have a 401k for mass mutual that that's news to me I don't remember making any money so so I clicked on something I don't know career earnings or whatever and in 2009 I made for this not to brag I made$4 ,919.39 and how long did you work for them for whole year? The whole year. And then in 2010, I followed it up with a banger, $253.16. So what do you have, like$300 on a 401k there?

48:34Not bad. No, Ben, that was my total earnings. I know. That was my total earnings for the year. Now you might say, well, how the hell did you live on$4 ,900? Well, I didn't. I didn't. My eyeball was twitching for like 10 months. I was under such stressed and I don't think I really realized it. I guess it was manifesting physically with my eyeball twitching, but I worked. So when I got, when I got a hundred percent commission job, obviously worse, worse. I had to pay them. I had to pay rent. So you can imagine me. I was, I was a balding doofus with, with longish hair, slick back and balding wearing a suit that didn't fit and shoes and a tie every day to cold call.

49:24So how did I even live? So when I was dismissed from college, I came home and I was a full-time waiter, like six days a week full-time. So I had nothing else to do. Now it wasn't a great time to be a waiter given that it was 2007 and eight, it was a recession, but it was good enough for a kid that worked six days a week. So I probably saved like, I don't know, I saved a lot of money. I worked there for like two and a half years, six days a week, like literally six days a week. Cause I had nothing else to do. None of my friends were home. So I saved maybe 30 grand, maybe 40, something like that.

49:54And I lived at home. And so that's how I was able to, you know, you were the millennial living at home. God, it was, those were not my best years. Let's just say. I was, I saw this thing in here about qualified total pay. And I was like, what is this? So those are your paychecks. Those are my paychecks. Did you find money in the 401k? It was like a in it? No, there was nothing. There was nothing. And then, anyway. All right, stick with personal fun. Is this before or after you talked about changing your mind about the Cavs and the Magic in the playoffs? This was probably right before. I mean, I was definitely confident in my assertions.

50:33Man. Hey. You know, adversity and everything like that. Okay. That's true. So, The Atlantic has an article. This is the why you can never plan your career path out. Like if you would have told yourself back then, you're going to do this and this isn't going to work out and this isn't going to work out and this isn't going to work out. But someday this is going to work out. You would have said, no way, it is not, right? Like I had so many jobs back in the day that I just didn't get. And every time I was just heartbroken, like why didn't this one work out? Why didn't that one work out? And you never realize like sometimes not getting the job you want is like the best thing that can happen.

51:05Dude, I almost moved to San Antonio to be an internal wholesaler. And the only reason why I didn't go was because my mom was dying. And if she was healthy, I would have gone to San Antonio. Can you imagine? How many of those forks in the road in your life have there been? That's like the luck stuff I'm always talking about. Who moves to San Antonio to be an internal wholesaler? This asshole. Yeah. You would turn into a cowboy, maybe. Airlines are just banks now. I picture myself with cowboy boots. Yeah, I could see it. They make more money from mileage programs than from flying planes. Okay, so this was interesting.

51:54Wait, how? Listen, consumers now charge nearly 1 % of US GDP to Delta's Amex card. Holy crap. So that's$268 billion is 1 % of GDP. So$268 billion is swiped on the Amex Delta card. Pretty wild. Delta obviously does not make hundreds of billions of dollars in credit cards. In January, they reported, by the way, I own Delta, the stock. The company reported it received around$5.5 billion in 2022 through its Amex partnership. And there was some hemming and hawing because they tried to change the mileage and the rewards. So Delta has... They said, I saw a couple weeks ago, they're not going to let as many people into the lounges anymore.

52:39It's overrun. Whenever I flew last time, there was a line halfway down the airport. Why would anyone want to get in there? That's why you got to go to the exclusive one. But even that, they're raising it still. So Delta reports it has 25 million active members in its SkyMiles program. 25 million. 30 % of them carry Delta-affiliated credit cards. So yeah, everyone's doing it. And now there's some sort of, not some sort of, there's people are getting pissed. So you're going really contrarian lately. You're buying Delta. You're thinking about cruise ships. You're buying utilities. I'm not buying cruise ships.

53:11No, you said you're thinking about it. No, no, no, no. I have no interest in cruises, none whatsoever. You're on a contrarian play though here, contrarian run lately. Yeah, listen, this is why I don't bet big because I know that my natural instincts are losing trades, right? And so for me, it's a hobby. It's a game. It's fun. It keeps me stimulated. And I love it, even though I'm not good at it, which is why every two weeks, in my 401k, boom, and in my taxable brokerage account, boom. Speaking of 401k, by the time older, this is from Wall Street Journal, a Vanguard study says that by the time older millennials meet median retirement age, they'll be able to replace 60 % of pre-retirement income with Social Security and savings from sources, including 401k and individual retirement accounts.

53:57Gen Xers and the youngest baby boomers, by contrast, are likely to have a price of about half. And they say, well, why are millennials doing so much better for retirement? What changed? 401ks. They became automatic. They had this guy from Kenneth Adams, 34. I wasn't thinking about retirement at all, said the Austin, Texas resident. They sent me this letter saying they were going to auto enroll me. And I said, OK, I'll do what it says to do. He's increased it over time. He now puts in 12 % and has an emergency fund. So the auto enrollment feature is going to save so many butts in retirement, I think, for people who have a 401k.

54:30I always talk about Social Security being the biggest retirement program ever. I think in the future, auto enrollment into 401ks is going to be an even bigger net positive for most workers that have the ability to do it. It's so funny. It sounds so dumb, right? Yes. It's such a simple sort of thing. You have to opt out instead of opt in, and that saves people, right? Massive ramifications. It's almost comedy, like how big of a deal this was. Just a simple change. It's that simple. It's like take the choice out of it. Unbelievable. Last week, we had Kaplan Schwaser sponsor the show. We actually got a decent amount of feedback from CFA enrollees.

55:15CFA, what do we call them? Aspirational CFA charter holders. Oh, okay. I forget what the proper term is. Candidates. Boom. Candidates. There you go. My God. It's fun getting old, right? You just can't think of words anymore. Just basic words. All right. Hi, Michael and Ben. Long-time listener of the pod and TCAF. Very timely. Ed with Kaplan for CFA study materials. I'm currently waiting for level two results that are coming out in October. I passed level one in December 2019, and then COVID threw a big bunch of my study plans. A big part of why I started the CFA program was to switch career fields.

55:51I've switched jobs twice. I've got a fast forward four years. I'm wondering if it's even worth it if I fail level two to sit for the exam again with the advancements in AI. I think I've seen chat GPT has passed level one. I think certifications will always hold weight, but from a more practical standpoint, would it be more advantageous for me to just master AI? I think that's an interesting question. Now - I didn't know chat GPT has taken the CFA. I would have said prior to the AI angle that this person is coming with that the CFA charterholder or the CFA certificate is for people that are either analysts, right?

56:32At an investment bank or portfolio managers. Or aspiring portfolio managers. It's really not for people that are looking to get into wealth management. That's not the test to get into wealth management. If you love... If you love one of those two fields and being an analyst or portfolio manager, then yeah, it's probably required. Now, to the AI part of it, I don't know that AI is going to make human analysis less valuable. I guess it probably is. That makes sense. But I would say forget about the AI part of it. If you are not in love with the idea of being an analyst at a bank or a buy side somewhere, then don't do it.

57:13Or sell side, yeah. If you want to find a job in portfolio management, getting the CFA charterhole is not going to make you a better investor, but it will make you more appealing to prospective employers. That's the way I look at it. And I don't know. If AI tools are going to be so great, like eventually everyone will use them. And sure, some people have better tools than others, but I don't think AI is going to help you find a job better than the CFA. Unless you can have AI write like a good cover letter and resume for you. I don't know. All right. One more email. Subject, prepared foods. Dear Animal Spirits, in the last show, Michael inquired into how fresh prepared foods at grocery stores were.

57:51I'm a manager of a prepared foods department of a high-end grocer, and I think I can help answer that question. In our chef's case, which is what they call the cold, fully cooked behind the glass. Ben, you don't know about this permanently. We are required to throw away most foods on the sixth day. There's a lot of different kinds of prepared foods. That's all I'm saying. We are required to throw away most foods on the sixth day after it is made. In reality, we try and cook two batches a week of each item. So it usually is more like four days at the longest. Okay. At the end of the day, we would always put quality first and I would never sell to an uh.

58:24At first, I was a little sad that Ben didn't know what prepared foods are. But to be honest, I never really ate prepared foods before I worked in the industry. I'm a huge fan of the show. Here's the thing. At my grocery store, we have, there's prepared foods is there's a buffet, but there's also the meats that have been prepared and seasoned already. And then there's like, there's four, there's four different kinds of prepared foods. I didn't know which one you're talking about. There's a buffet that's ready to go. Then there's a preferred foods that they heat up for you. And then there's the ones that already heated up.

58:51And then there's the meats that you can cook yourself that are prepared. Do you cook? I don't know if you ever, I'm guessing you don't cook at all. No, no way. So what do you got to cook? I'm not a cook. Does she cook or are you guys order inners? We're more, we do more ordering out now, but she, yeah, she's a good cook. She can cook. Like the kids last night wanted to make a chocolate chip banana muffins. And my wife knows that. Oh, wow. Yeah. That's, that's, that's skills. She's good with, yeah, she's good with, she's good baking it too. All right. Recommendations. I, uh, I saw, saw 10, not a joke.

59:26I did it. Um, and in the, they had a trailer for the Marvels, which is, I guess, a sequel to Ms. Marvel. and I am a sucker for a trailer. It's very rare that I see a trailer that I'm like, that looks bad. You mentioned this a couple weeks ago. I've said this in the past. I would watch a channel that's all trailers, but not just new ones, historical trailers. Yeah, trailers are great. It's like two and a half minutes of the best of. So I am generally either like, eh, or that looks awesome. And rarely you see something that looks just terrible like Aquaman. Well, I'm here to tell you that the Marvels looks maybe even worse than Aquaman.

1:00:05And it's really sad what's happened to Marvel and DC. I'm just out. Somebody asked me if I'm watching Loki season two. Nope, no interest. I think they need to go smaller and just do like a Marvel rom-com. Like they need to do something where it's not the, like the world's gonna come to an end. They need to go smaller. So wait, did you like Saw or not? So I made this chart of Rotten Tomatoes reviews, both from the critics and the audience for Saw. And the reason why I saw Saw 10 was because it's the only Saw where the critics scored it higher than a 50. Even the first one, which is egregious. First one was great.

1:00:39Critics gave it a 49. So the critics gave this one like an 80. So I did see it. And Tobin Bell, who plays Jigsaw, was really prominently featured in the movie. And it was a good Saw. Was it a good movie? Like, yeah, probably not. But was it a good Saw? Yeah, I had a good time. It was hard to watch. Didn't he have cancer in like the very first movie though? So this is a sequel between, This is supposed to be between the first and the second movie. Oh, okay. So they went backwards. All right. Yeah. So then I came home and I was like, you know what? Let me fire up Spiral, the Chris Rock one from last year.

1:01:15By the way, someone was like, they made one. It was 2004, then 05, then 06, then 07, then 08, then 09, then 010. They made one every year for six years. I love how one of them is called the final chapter. Then they made three more. Yeah, that's pretty funny. So anyway, so I dialed up Spiral, which was with Chris Rock. Now, back when you were making$4 ,900 a year selling insurance, did you ever think you'd be making a bar chart of Saw movies? Right? What's in an hour? Is it fractions of a penny? Probably, right? Anyway, good times. So I have to say, and it pains me to say that I think Chris Rock is one of the worst actors I've ever seen.

1:01:57I close my eyes. He plays Chris Rock. No, he doesn't even. It sounded like he was reading. He's horrendous. And the movie was truly repugnant. They tried to make a movie star over the years. It's never really worked. The one of him for Fargo, the TV show, wasn't very good either. That was the worst scene in Fargo. The only good Chris Rock role, and I'd have to fact check this, but is New Jack City. That's probably fair. Yeah, some of the early stuff he did was probably the best in like the 80s and 90s. So it's Halloween season, which means that I am even more in my horror movie mode than normal.

1:02:36It's Halloween season for you all the time. Yeah, but on the streaming channels, it says like, you know, Huluween or... We watched Hocus Pocus 1 and 2 this week. I'm with the kids. So I watched The Boogeyman, which is, you know, very skippable. Not great. But I do have a recommendation, an actual recommendation. if you like horror movies. And this is not so much horror. It's not like a slasher or anything, but it was interesting and well done. Movie called The Empty Man. Now, when I go to see it, when I see a movie like this, so Chris Ryan and Sean Fentany were talking about it. They did like a horror movie, like Oscar type thing from the last four years and they mentioned this.

1:03:13So I went back and Adam Neiman, they did like an hour on this movie in 2020 when it came out. And it sort of got swept under the rug because it was during COVID. It was like, I don't know. very interesting movie. Worth watching. Okay. You need some sort of scale with your horror movies because I can't tell between like, it's a good bad one or it's a bad bad one. No, no, no. No, The Empty Man is like legitimately interesting. I would say like, it's a little too long, but like 7 '6". Like, eh, that might be high. 7 '4". It's worth watching. If you like the genre. It was interesting. There's no good new TV shows on right now at all.

1:03:45Nothing. Wrexham, maybe. I mean, there's nothing. So we're watching the morning show still. It's on the third season. If you would have like compared this when it came out to succession, you'd go, oh, this show's good. Apple's spending a ton of money. Jennifer Aniston's in it. Reese Witherspoon, Steve Carell, one of the Duplass brothers, about eight other people that you know from other stuff. I feel like it lost momentum. It was never good from the beginning. It's always been ridiculous. But the third season has like gone over the top of this ridiculous. Jon Hamm joined to play like an Elon Musk kind of guy.

1:04:12And I can't look away. But just the, it's hard because Billy Crudup is actually the best character probably. He's supposed to be the most unlikable. I like that guy. He's really good in it, but the plot lines are so ridiculous. I was laughing out loud by the end of the last episode, but I can't stop watching. It's just, it's like the most ridiculous show on TV. And I think it's one of these other things, like if you've been rich and powerful for long enough, like Jennifer Aniston and Reese Witherspoon and some of these people who are like producing the show, like I don't think you can, you have enough self-awareness to be like, oh wait, this is ridiculous.

1:04:43You know, one day, Ben, people are going to say that about you. You use that card a lot. It's true. It's true. That's why I've never been rich and powerful enough to use that card. so we also re-watched last night True Romance I probably haven't seen it in 20 years Flawless maybe one of the best cast ever if we're talking 90s movies Christian Slater, Patricia Arquette Christopher Walken, Dennis Hopper Samuel L. Jackson, Gary Oldman, Brad Pitt Michael Rapoport, Tom Sizemore James Gandolfini, Vail Kilmer Vail Kilmer, Vail Kilmer Takamas and like seven other bad guys doesn't get better it is so 90s though and watching it now like there's so much of the stuff that they said in it that they couldn't say anymore or probably wouldn't say anymore Chris Penn I don't know if you mentioned it Yeah.

1:05:21But just like the most 90s movie of all time. And then just seeing all these actors that you know really well, playing like a five-minute role is kind of insane. Gary Oldman as like a drug dealer. As a Mastafarian. If you haven't seen True Romance, like please fix that. The funny thing is Christian Slater is probably the least likable character of all and he's the star of the movie. There's so many good characters in this movie. What's his name in the movie? Oh, I can't remember. Clarence. Clarence. It's Clarence in Alabama. You know what's a good show? That my wife watches the first episode with me and then she just binges it without me, which is, I guess, fine.

1:06:01Love is Blind. Okay. Best reality show on TV. All right. Besides Rex, I don't watch any reality shows anymore. So, but, okay. Thanks to Duncan, as always, for producing. John, for helping out on the videos. AnimalSpiritsPod at gmail.com, We will see you next time.

1:06:49mintmobile.com slash switch. A front payment of$45 for three-month plan equivalent to$15 per month required. New customer offer for first three months only. Speed slow after 35 gigabytes if network's busy. Taxes and fees extra. See mintmobile.com.

From the publisher

On episode 329 of Animal Spirits, Michael Batnick and Ben Carlson discuss: why long-term bond yields are rising, the worst bond market sell-off in history, when good news is bad news for the economy, continued strength in the labor market, boomers are holding up the economy, Michael Lewis book review, why millennials are more prepared for retirement, and much more!

Today's episode is sponsored by our friends at YCharts! Start your free trial and get 20% off your first subscription at: https://go.ycharts.com/animal-spirits-referral. Register for the Oct 18th webinar at: https://ycharts.zoom.us/webinar/register/5416962561718/WN_FbGphtSBRPmzoiIYPWiFgw

Find complete show notes on our blogs...
Ben Carlson’s A Wealth of Common Sense
Michael Batnick’s The Irrelevant Investor
Feel free to shoot us an email at animalspiritspod@gmail.com with any feedback, questions, recommendations, or ideas for future topics of conversation.

Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com

Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information.
Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here:
https://ritholtzwealth.com/podcast-youtube-disclosures/
Learn more about your ad choices. Visit megaphone.fm/adchoices

Ask about this episode

In short

Transcript

More from Animal Spirits Podcast