When Will Houses Be Affordable Again? (EP.360)

25:30I guess I'm talking, I guess I'm talking Midwest. Okay. Yeah. I guess it would be Illinois. Minnesota too. Although I gotta be honest. I gotta be honest. Credit to me. Very transparent. The two states that are back to back in between Louisiana and Florida. Hold on. Oh, I know what it is, but I don't know which one is which. One's Mississippi, one's Alabama. Mississippi's to the left. Yes. It goes Mississippi, Alabama, Georgia. I only know that because I watch SEC football. Okay. All right, moving on. We got an email. Last week, we spoke about lumber prices. You said you didn't want to get dunked on for math, and you're just going to get dunked on for geography now.

26:06I held my ground. I said I was good at geography and I proved it. All right. Regarding lumber prices, returning to pre-pandemic levels, That's been the case for most lumber items since the first quarter of 2023. We track wholesale material costs to build a 2 ,200 square foot house in Central Florida. And as you can see below, we're only 15 % off the peak in January. All right, whatever. Anyway, the point of this email is look at this chart that this person included. This is the Romack Whole House Commodity Index. Like how much it costs to build a house, essentially? Yeah, that's a hell of a chart.

26:38Great chart. So what's that peak? I can't say,$59 ,000? 58 ,000? Yeah, 60 ,000 basically. All right, and now it's 51. So even including other factors, it's still well off the highs. Yeah. Counterpoint, it's still way above pre-pandemic levels though, right? That's also true too. So it's way above trend. So I guess we can give the home builders a little bit of a pass for not completely lowering their prices. Ben, one unfortunate reality of the internet and especially social media is that bullshit travels very fast. And unfortunately, deleting a tweet, dunking on a tweet, well, maybe dunking a tweet sometimes works, but correcting a tweet, you can't undo it because people are so desperate for bad news, especially if the bad news is at the government level.

27:34The outrage always causes way more of a problem than the rebuttal. Yeah. So the, how do you pronounce this? Kobayashi? Kobayashi? What is this? The Kobayashi letter. What's that? I always say Kobayashi, just from usual suspects. Oh, is that what this is? Is that how you spell that? No. Okay. Anyhow, they tweeted, and this went spread like a wildfire. This is unusual. The US BLS has announced that coffee prices will no longer be factored into CPI inflation data. In fact, all right, whatever. So people got really mad at that. Oh my God. Coffee prices are up 38 % over the last two years. And now the government is not showing them to you anymore.

28:15Have you been to Starbucks lately? Right, right. Yes. And this tweet, which was deleted, in fairness, I don't know if they issued an apology. So maybe they did. Maybe they did. Maybe they didn't. I don't know. But they did delete the tweet, which is good because a lot of people don't even do that. It's not true. It's literally not true. Coffee is still very much in the CPI calculation. If my understanding of this is correct, what they did was they removed the price level for whatever reason. But coffee is still very much a basket in the CPI calculation. Kyla Scanlon came in here and said, no, you're wrong.

28:56It's still in there. Yeah. And a lot of other people did too, but it doesn't matter. It's just the, see, do you see what they're doing?

29:08that that plays well these days so i was gonna say this for my recommendations but on the my flight here i'm in a hotel room in a flyover state and i watched american fiction on the way down here uh jeffrey wright is in it and very good movie i'm not sure it's a michael movie it's it's like part satire but also part family drama and comedy i really liked it yeah probably not a Michael movie. I do like Jeffrey Wright. I sat by him on an airplane once. Nice guy. I think I might have caught a photo and sent it to either of my wife. Can't remember who. What do you mean nice guy? You didn't talk to him.

29:43I seemed like a nice guy on the plane. But the whole point of the movie is like he's this intellectual professor and all his intellectual stuff just has no traction whatsoever, trying to be an author. And then he writes this thing that is more or less a satire because he thinks that it's dumbed down for the masses and it takes off like wildfire. And he's saying, no, no, no, I don't want this thing to take off. I wrote it as a joke. And the whole thing is interesting in terms of like the lowest common denominator and what actually sells these days versus what doesn't. Very good movie. I give it a two thumbs up from Ben's movie rankings.

30:20Yeah, so should I see that movie? Maybe it's an airplane movie for me. It was a very good airplane movie. I enjoyed it. I was thinking, eh, probably not a Michael movie. It was nominated for Best Picture. It was that kind of movie. It was just very, the screenplay, I think it's by a new writer, too, who wrote the movie and directed it. You know, I got to be honest. You have postal elitist taste in movies. I'm a flyover state guy. That is true. You have definite flyover state. But like flyover states where they bury bodies in a basement kind of movie taste. But yeah, I do have a coastal elitist movie.

30:56That's a fair take. American fiction. Very good. All right. JP Morgan has a great post out on real estate. And they asked, when will homes be affordable again? So they say, how long might it take to restore average levels of affordability based on historical ratios of home prices to income and factoring in mortgage rates if incomes were to keep growing at their recent pace and mortgage rates didn't decline and home values stayed at all-time highs? So assuming what I just said, they say about three and a half years. I bet a lot of people would not believe you. I don't believe you, Ron Burgundy.

31:32Yeah, it'd take a lot longer. So this is just, so let's say home prices stagnate for a couple of years. Incomes keep growing. That three and a half years, and I bet for most times in history, that would be a long time frame to wait, right? Yes. Yeah. So the point is, and this is the whole point of real estate in the first place for a lot of people. And this is not financial advice, but one of the things that someone told me when I was buying a house was we were very unhappy with the houses we were looking at. And he said, go up from price and just stay there longer. You'll grow into the payment.

32:08And this is, I'm like, we're reaching a little bit here though. And they don't reach for housing costs because that's your highest cost, right? And we did reach a little bit. And guess what? Your income grows and you grow into that payment. So this is - Is this the barn house, the modern farm house, or the previous one? This is our first house, not a modern farmhouse. But that's terrible personal finance advice to people who can't handle reaching for a payment. But that is true for most people. They grow into their fixed payment over time. You just win somebody's life, congratulations. Probably, but that's how these things work, though.

32:43That's the beauty of a fixed-rate mortgage, right? The hope is that that payment stays exactly, it's the Matthew McConaughey meme. That payment stays the same, right? That's good. Anyway, it's – So three and a half years. If you would have said, Ben, guess when it'll be – So I see they have their chart in here. I would have never guessed that. Well, we talk housing as if it's like not very much a local thing. So they show – they break this down by city. And who's the most screwed? Oof, Miami. All right. So Miami, this is never happening. 2034. You got to go to a decade. Oh, okay. So based on now, when is it going to be, when is that going to be back into, and it's going to be a long time?

33:25For my neighbors to the north, Boston. All right. By the third quarter of 2027, set your watch for it. Minneapolis is another one. So it says Cleveland to Detroit already restored. Back in line with historical norms. Just kidding. I kid the Midwesterners. All right. They show new construction. This, I didn't know the stat. that new housing unit completions make up just 1 % of the nation's housing stock annually. Again, we know we're not building enough houses, right? We know. But they showed that new construction is happening mainly in cities with lower costs. So that's a good thing, right? That makes sense.

34:01And I'm sure a lot of that has to do with some of these places that it's hard to build and the regulations and rules make it harder. Those are the costs that are part of it as well. But that's the building where they can, right? Lastly, J.P. Morgan's takeaway is if you are looking to buy a house in the United States, don't wait for or expect a home price crash. And we've been saying that for a while. Yes. Before prices really took off, we were saying that. Like if you're – because remember, prices initially took off in late 2020. People are already then asking us, do you think we should wait? We had a lot of those.

34:34Right? Those prices look darn good right now in comparison. speaking of Axios had a piece on home equity and so they say a record 11 trillion is tappable so that's not the total so they say meaning you can borrow against it but still maintaining 20 % equity in the house which is kind of what the banks want you to do they want you to have a loan to value ratio of 80 % or whatever so you keep that 20 % buffer they say 48 million folks have access to tappable equity with an average of 206 ,000 per mortgage holder so they say it's almost 17 trillion the total value of home equity in this country is$32 trillion which means there's$15 trillion in equity for people who have no mortgage.

35:14Because they're talking about people who still have a mortgage. This is just people who have mortgage properties that have$17 trillion. It means people without a mortgage have$15 trillion in equity sitting there. That is a ton of money. That's a lot of cash. If I was a skilled person, I would be starting as many home renovation businesses as I can right now. We got a quote a couple weeks ago for, Or, like, hey, what if we wanted to take our white deck railing and make it the wire stuff, you know? So it's like it makes the view a little better, right? Just an ungodly quote. And the guy's like, we're like 14 weeks out.

35:49And I think the quote was like, we're basically going to charge you whatever we can. And if you say no, so what? We have other business coming in. It was that kind of quote where I kind of said, all right, I'm good. You know, don't need it. It was way too high. Wow. Yeah. And I kind of did the channel check. And I said, well, how was business? And he said, oh, it's crazy. We're crazy, crazy busy. The holidays mean more travel, more shopping, more time online, and more personal info in more places that could expose you more to identity theft. But LifeLock monitors millions of data points per second.

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36:59Toys and jewelry to new beauty brands and styles. these gifts go seamlessly from our stores to under your tree. Seriously, with these savings, why shop anywhere else? Burlington Deals Brands Wow. Okay, you talked about the outrage thing. Here's another one I saw going around. Seriously underwater homes, mortgages tick up across the U.S. And a lot of people shared this headline. It was from Bloomberg. Oh, yeah? Oh, yeah? Sorry. What does seriously other water mean? So they say one in 37 homes are now considered seriously underwater in the U.S. and that share is much higher across southern states.

37:33And that means that they have loan balances that are 25 % more than their market value, which sounds bad on the surface, right? That was the headline, right? 1.37. And then you read the story a little more and you say, okay, that's actually 2.7 % of homes, which stinks for those people. I don't know, it's people who bought a house in Austin, maybe, and prices fell there. I'd be guessing that would be part of it, those kind of places. And while the share is ticking up, it remains much lower than before the pandemic when the rate was twice as high boom so kind of the headline was oh geez this is scary the meat of the article if you read past the headline was actually it yeah it's going up a little for these and it that stinks for people who are in that situation but it's way below average and it's still not did you see that did you say that it's half what it was pre-pandemic yes okay and then i mean i guess the the the reason for that article is.

38:25Well, we all know. I mean, you know, don't hate the player, hate the game. And then we're going to have another home crash 2.0, right? It's the GFC all over again. The way that numbers are presented can make it, because 1 out of 37 sounds way worse than 2.7%, doesn't it? Exact same thing. Yeah. Fair? All right. One more email. Oh, this is interesting. On subsidizing purchases, Ben has been discussing rate buy-downs by homebuilders recently, and I wanted to add some commentary about potential downsides. I believe Ben thinks these are solely a subsidy. I didn't write this, Ben. I didn't write this.

39:07I believe Ben thinks these are solely a subsidy to the homebuyer that makes ownership more affordable. This may be partially true, but they are also a marketing scam to some extent as well. Oh, you had my curiosity. I can see that. If you read the fine print in any of these ads, it says something important that you have to finance through the builder's preferred lender, which happens to be owned 49 % by the builder. These lenders can tack on five figures plus of extra closing costs on a mortgage relative to lenders that are not affiliated with the builder. It is essentially as if you are buying down your own rate, not getting a great deal.

39:36If someone doesn't look at the fine print closely or comparison shop their mortgage, they probably won't understand this. All right. Credit to this person for helping out. So you're paying more in fees because of it. I get that. Yeah. That makes sense. Put a few words in my mouth, but I'm a... Okay. That's a fair assessment. Um, Biden tweeted something that got ratioed all the way into the stone age. My dad always used to say that the way you build wealth is by building equity in your home. My housing plan would help Americans achieve home ownership by giving households$400 a month for two years when they buy their first home.

40:14The reason why he got destroyed is not necessarily a political thing, but like, I mean, we know what happens when you subsidize areas of the market. Prices go up. I bet it wouldn't have got as much ridicule if he would have said, we're giving first-time homebuyers a 3 % mortgage. Maybe he would have. I still think that's kind of fair for young people. But here's the thing. I think the thing that makes most people so mad about the housing situation is it literally doesn't matter what we do right now. There's nothing that could be done to fix the housing market in the short term. There's nothing that can be done.

40:48And I think that's like, no matter what this, obviously you're right. It's if you just subsidize the demand part of it, we know what's going to happen. The prices are going to go up probably, but there are no short-term fixes for this. None. That's like putting on a, like spraying oil to like protect yourself from the sun. Right. But that's the thing is the problem is there are very angry people with the housing market right now, and there's no good fixes for them or that, the housing market, right? Even if they said, we're going to subsidize homebuilders and the government's going to cover their loans, right?

41:23So if homebuilders want to build more homes, have at it, we'll cover the loans. That's what they did in the 50s, right? That's why we got this big boom time in the 50s and the middle class and people coming from the war. If they did that, it would still take years to filter through and for the homebuilders to get it up enough capacity to do that and get enough construction workers and find enough land. Yeah, there's no overnight fix. No. Redfin has a chart showing the percentage of homes with a price drop. And this looks different. So there's a seasonality to this. But in 2024, as of May 5th, 6.2 % of listings had a price drop.

42:00That is way higher than it was at this time either last year or, I mean, obviously over the last couple of years. Boy, that number still seems very low though, doesn't it? What's that? 6 % of houses have seen a price drop. It just still seems low. Well, it does seem low, especially when you adjust for the fact that the starting prices are outrageously high. You're right. Yes. Yeah, maybe this is not that great. I think a lot of this stuff is the trends are getting back there, but we're so far from normal that it's going to take a long, long time. All right, surveys are bullshit part 360. By the way, Animal Spirits, Daniel just mentioned to us, this is our 360th episode.

42:38Does it feel light? Or does it feel like a lot? Seems like a lot. Seems like a lot. That's a lot. We've been doing this for seven years almost? Don't do math on camera. Don't do math on camera. We started in November 2017, I believe. Okay. That's a long time. I'm sure I talk more with you than I talk with my wife during the week. And we live together. Oh, yeah. Of course. Of course. Of course. Eric Soda tweeted, a record 63 % of U.S. workers are satisfied with their jobs. That's the highest level ever for the survey, which goes back to 1987. Take a look at the spike upward after the pandemic. Yeah, how is this possible?

43:21How is this possible? I don't know. How could everything be bad, but everyone's satisfied with their job? Well, we have the, I'm fine, but everything else has gone to shit. That's the, also - Oh, you know what? You know what? That's exactly right. This is - That's what it is. This is the epitome of I'm fine, the world is going to hell. Like if they asked, if they did a survey, the percentage of US workers who you think are satisfied with their job, it would be 20%. I saw one a couple weeks ago that was, are you satisfied with the education system in this country? And everyone said, no, of course not.

43:58Are you satisfied with your own child's education? Yes, of course I am. It's the same thing with politicians, right? Congress is a bunch of corrupt idiots. And then it's like, do you like your congressman? Oh, yeah, of course I do. Also, if Eric lived in the Midwest, his name would not be Eric Soda. It'd be Eric Pop. Yeah, that was too easy. One more survey. This is from Axios. Felix Salmon tweeted this. Share of Americans who think they'll work past 62 was almost 60 % in 2016, and now it's down to 46%. How do you square this with the fact that people always say everyone's so ill-prepared for retirement?

44:31People are living longer. they're worried about their retirement, but they also want to retire early. I think part of this is, remember those other surveys where you said, how much do you need to retire? And people said, that's$1.5 million. And the amount of people who ever get that high is very low. Do you think most people, when they reach old age, just go, you know what, I don't need as much as I thought I did. I would rather retire early than let it compound for five more years and keep working and making more money. Screw it. I think that's going to happen to it. We've already seen it to a ton of baby boomers following COVID.

45:01Can you see millennials really want to work till they're 70? Do you think we're going to work until we're 70?

45:09I have no idea. We're going to be at 47 ,000 podcasts. I told this to Bill Sweet last week. Ask me something now, and my feelings in 20 years will be so different. Yeah. We'll have no idea. There'll be Michael and Ben holograms coming into everyone's living room for a podcast. Yeah. Right? We'll just be sitting there, you and your oversized Knicks shirt, me and my Stitch Fix. I wonder if we could de-age ourselves in the future so we don't look like a couple of old guys. Add some hair for you. Yeah, I like it. Give me like six more inches so I'm taller. All right, Ben. I wrote a post. I've been thinking about cars a lot lately.

45:40We've been talking about cars a lot. I like your title, what a car says about its driver. Yeah, so I remember in high school, one of my friends had a cool car. And this was a friend whose parents got him everything. And I remember them saying, you are what you drive. And I was offended is the wrong word. I was just like, really? Really? really like who do you think is more hated the you mentioned last week the old guy driving the nice car the convertible range rover or the young kid in high school who drives like a bmw who who do you think is more despised by their peers probably the high school kid right the young person god yeah oh because because at that point you have no emotional wherewithal to like control your jealousy i think yes true right okay um but just like you know what is the right age to buy a cool car.

46:33I don't know. A part of me thinks that like, I would really, really enjoy having like a really sweet ride right now. Another part of me is like, well, I don't want to be that person. Like, I don't want to be that person. So I read, I read, but what's wrong with driving a nice car? So I twisted myself into a pretzel. I read your post and I sent you a text message and I said, just buy a Range Rover, right? Because it sounds like you're having an internal dial argument with yourself here. Oh, I totally am. I totally am. But this is the thing about cars. They're so interesting because they're like a socially acceptable status symbol, but like in certain occasions, right?

47:11Like if a person's an asshole and they drive a nice car, you're like, what a f***ing asshole, right? But if you have a friend who's like a good, like a great dude, and he drives a nice car, are you judging that person? You're like, no, right? And you know that you're not overextending yourself because you save money and you invest and all these things. So I think one of the hard parts about living in the age we live in, it's never been easier to get feedback and opinions from everyone. People are constantly being judged. Like people are being recorded without their own knowledge of stuff that they do, right?

47:41And so I think the feedback and judgment, people probably worry about it more for themselves than anyone. Like it's so, isn't it so easy you find with little kids to judge other parents? I made some comment last week. My wife is like, you know what? every parent makes decisions based on their own thought process and how they want to raise kids. And I'm not going to judge anyone. Yeah. Yeah. It's very noble, but it is. And I'm like, well, I'm probably still going to judge people secretly. But, but I think with the car thing, maybe this is just me getting to middle age. I'm past the point of caring what other people think about me.

48:16I think that's what kids have really helped me get to that point is like, I just, I don't have any of that stuff that I had when I was younger where I really, really cared and I really wanted to be liked and I really cared what other people think. But you're mature. You're mature. I'm not. Even though I, well, no. Even though I always get on people for cars, like I know that your financial situation, you're in a good place. And if you want to buy a nice car, buy a nice car. Who cares what everyone thinks? I'm giving you permission as the car guy. That's part of the tip. You know what? Would I love to drive a Range Rover?

48:47Although I don't think I could. That's a lot. It's a lot of money. I looked how much it costs after you text me. that it's a lot of money. I told you to get a Rivian. I think a Rivian is the millennial Range Rover. How about this? Those are cool. Maybe I'm lying to myself and to the audience right now, but I'm just thinking out loud. Would I drive a Range Rover if everybody else somehow can magically see a Toyota Highlander? So like the shallow how? Yeah. Like I think I would really much, I think I would very much enjoy driving that car. Although after my experience with Audi, I feel like aren't Range Rovers known to break down too?

49:19That's true. Just get something that will never die on you. So I think it's complicated, but I do agree with the sentiment that do what you want, right? Life's short. Like I said, it's easier than ever to judge people, and people do probably judge more now than they ever – like there was never – I feel like there's a scoreboard for everything these days that didn't exist in the past. There was no review sites, right? Like this is – what stars is this? Where should I – all that stuff, nothing existed like that. And now we rank everything. everything's a judgment. All right. Good news in the car front.

49:56The Mannheim used car index drawdown is deep. 23%. Deepest ever on record. The funny thing is that your Audi situation is like counteracting this. Because you're the one with the drawdown. I am destroyed. I'm deep, deep underwater. But this is good news. Not bad. We'll take it. All right. getting back to like the bad news spreads like a wildfire and don't tell me good news no i don't want to hear that shit the world sucks uh so steven ratner tweeted the murder rate is down 19 in 2024 um some major cities like san francisco baltimore and philadelphia have seen much larger decreases chris hayes retweeted that quote tweeted that and said if these numbers were the opposite if homicides were up 19 so far this year it would be the number one or at least top three domestic story.

50:48And that is 100 % facts, right? Yeah. I wonder why it's down so much. Do you think people just got way more annoyed during the pandemic? It was like, ah, whatever. I'm going to kill someone. I don't know. Sorry, but I'm just wondering why, why did the numbers, because the numbers obviously shot up and then now they came back down. I'm sure there's all sorts of factors that are way beyond the scope of this. So I said, I said that I've been having nineties nostalgia lately and I've been seeing all these posts on Twitter showing like, here's a video of what high school was like for people in the late nineties.

51:22And I'm biased because I grew up then, but it really was like the last innocent time in this world. It was pre nine 11. It was pre great financial crisis. It was pre social media. Internet was just getting started. I graduated high school. It was pre, it was pre porn on demand. Remember you had to like wait like 37 hours to download anything. I still remember the first time my friend in college got a flip phone with a camera on it. And we would always go out to the bars and parties and such. And I'd say, why would I want photographic evidence of what we're going to do tonight? I don't want to remember this.

51:54Whatever we're doing, we're 21. Simpler times. Yes. And so the 90s were such a, and obviously people were still depressed then. And, but so this, this piece from a Gen Z person, I thought captured this really well. It's a little dramatic, but I think it's interesting. Wait, before you be there, can I just say one more thing about the 90s? If you look at the Limp Bizkit musics of the world, it didn't seem like teenagers were having a great time. I mean, that's like a, I don't know if I'm overplaying the relevance of Limp Bizkit, but there was definitely like a, that was big. Here's the thing that was so, and I look back at myself and I realize how naive I was about everything going on.

52:31Like, I just, I was so ill-informed when I was, especially in like high school and getting into college. I knew nothing. I didn't pay attention to anything. And honestly, it allowed me to just to be young and not care. You can't not pay attention today. It's impossible. So that aspect of what you just hit on, that's a better world. When kids could just be kids, that's a better world. You didn't have to have an opinion about what was going on in the world. And I favor this. I don't favor it. I'm against this. You didn't have to have any of that. So this piece, it comes from a subject called After Babel.

53:05Gen Z were given phones and tablets so early that we barely remember life before them. Most of us never knew falling in love without swiping in subscription models. We never knew having a first kiss without having watching Pornhub first. We never knew flirting and romance before it became sending DMs or reacting to Snapchat stories with flame emojis. We never knew friendship before it became keeping up on a snap streak or using each other like props to look popular on Instagram. And freedom. We never felt freedom to grow up clumsily, to be young and dumb, to make stupid mistakes without fear of being posted online, or the freedom to be unavailable, to disconnect for a while without the pressure of read receipts and last active statuses.

53:37we never knew a childhood spent chasing experiences and risks and independence instead of chasing stupid likes on a screen. Never knew life without documenting and marketing and obsessing, obsessively analyzing it as we went. So please, next time you cringe at Gen Z for not coping, for not feeling cut out for this world, remember how painful it is to think that the good times are over. Then imagine how much more painful it would be to realize you never knew them. Again, a little dramatic, but also kind of, it makes sense to me that they're just so much more self-aware. And it really, I just, I love the fact that I got to grow up in a time where I didn't have to be so worried about that all the time and being like in the know.

54:13Yeah. Yeah. It's hard enough being a kid. Yeah. So I am, a lot of people are like, what is wrong with these kids? It's like they, they didn't have a chance is the way that I look at it. All right. Oh, an update on my ticket broker. I don't know if we spoke about this last week, did we? You mentioned that you got a ticket broker. Okay. So the panic brokers in your life now, the panic buy, listen, I have an insurance broker. I have an insurance broker and I used a car broker. Okay. Okay. Insurance broker, car broker, ticket broker. Okay. Um, I paid six 80 in my panic for these four, for these four tickets, which means to get my money back on the website that I will not mention here, I would have had to listen for 800.

55:03And then they would have had to listen for 900 in order for me to get my money back. My ticket broker, 750. Boom. And guess what? No responsibility. No pricing, wondering, delivering. What do you think about that? Not bad. Worth the money. Whatever you paid. I paid nothing. He netted me$750. That's what I'm saying. He netted me$70 profit per ticket. They know what they're doing. Why would you not use a broker? I don't understand. I mean, most people don't get into this problem of buying and selling tickets all the time. Just in life. I'm using brokers in general. Services, service providers. You could call them a broker.

55:44I call them service providers. All right, Ben, we got it. This is a good email. From Andrew. He said, he has a new term, hydration, which he says is inflation plus the Hydra mythical creature. He calls it hydration. Hydration is this, replacing one purchase pattern due to inflation with another equally inflated purchase pattern. Michael experienced hydration after hiring a ticket broker to avoid high stub-up fees. That's pretty good. I've been an insurance agent for 26 years, started when I was 19. the auto insurance compensation is anywhere from eight to 10 % of the premium. Okay. Now, but the question of whether one pays more using a broker or doing direct, for example, our office represents, I won't say the name of the insurance company, and we usually are more competitive than direct.

56:35Oh, how about that? How about that? Wholesale versus retail. The main reason why we are usually more competitive as per my marketing rep, direct business pays for all the advertising. And number two, more fraud done online when insurance yourself compared to the office channel. So I'm not even paying more necessarily. You're selling yourself on a broker. I see. Okay. Scale, efficiencies. Okay. You know, you ever thought to yourself, like, I guess Netflix is a good example. Like when Netflix was doing streaming, you're like, oh, just wait until this company gets into it. Or why wouldn't Google just do it?

57:12Or why wouldn't Amazon just do that? You know what I mean? Yes. And I think when we do that, we're giving some of the other companies either too much credit or just not understanding that companies don't just do something because you think they should. If it's not their core business, and I'm generalizing here, they're probably not going to do it. And I thought about this. I thought about this when I was on the Maps app, Google Maps. And Google Maps, Google owns Waze too, right? We're a Waze family. Yeah. Why is there Google Maps and Waze? But anyway, be that as a matter. So I'm on Google Maps and the keyboard, you have to press the number to switch the keyboard from letters to numbers.

57:57And I'm like, well, that's annoying because I'm like, you know, I'm pulled over at a stop line. I probably shouldn't be texting anyway. It's annoying. With Waze, they've got the numbers up top and the letters down below. Now, both of these apps are owned by the same company. There's never a situation where you're putting in an address on Google Maps where you don't have to put in a number ever, right? You need a number. Why the F don't they have the same format as Waze, which is clearly a million times superior. So anytime you're thinking of investing in something, be it public or private, you're like, ah, well, Amazon should just do that.

58:30Yeah, Google should just do that. No, not necessarily. In fact, that's probably been a very bullish, in hindsight, that's been a bullish catalyst to invest in a company that, I'm not going to invest in them because why wouldn't that company just eat their lunch? It doesn't work that way. You should be entering the address through voice. That's your solution. Well, that is a good solution. Ben, I was in the airport last week, and I saw something that I hadn't seen in years. Okay. Perhaps decades. I don't even know what they're called anymore. The jeans with the loop for a hammer? Oh, like construction jeans, right?

59:08Yeah, I guess so. Speaking of the 90s, that was a late 90s, early 2000s trend. Yeah, if you could imagine that for younger listeners, that was a fad. That was a big, big - Plus you had like the pockets on the side with like the triangle pocket. Oh, that's right. They were called carpenter jeans. That's right. Carpenter jeans, that's it. Not construction. Yeah. Okay, I mentioned, so we talked about the housing shortage. There's a bigger shortage in America than the housing shortage. I'll tell you what it is. Go ahead. Parking spots for youth sports events. So we went to a soccer tournament in Detroit area for my daughter, travel soccer teams, and we go to this place in the middle of nowhere.

59:38There's 20 soccer fields. and on one side of the road is a soccer tournament. On the other side of the road is a baseball tournament. And there was so many cars going in and out that they had to have police there to shepherd people in. Right? You stop. Nope, you go. You stop. You go. And these soccer fields and baseball fields were made before there was large SUVs, the Suburbans and the Yukons of the world, and trucks. And they were made before so many people went to youth sporting events. Like growing up, you never had your grandparents go to sporting events, right? Now everyone has to go watch the kid play sports.

1:00:10there's none of parking spots anymore. We had to park like three miles away. It's so true. There's a bigger shortage of youth parking spots than there are houses. That's what I'll say. So true. Ben, did you know that wine is getting destroyed? How so? Look at this chart. The wine sold in the US in millions of cases. That is a pretty significant drawdown now. Look at how much it added though. That's a pretty good run up. Does this need to be a log chart for it to make sense? I don't know. I'm still keeping you going. We've talked about this. I still like drinking wine. I know the thing to do now for a lot of people is to talk about how you don't drink anymore.

1:00:54More power to you if that's you. I still enjoy drinking. I'm sorry. I love it. Sorry, not sorry. I know that's a thing people always say. Why would you drink in 2024? It makes you feel crappy. It is. That's the only thing. Drinking is still fun. It puts a smile on my face. I can't. And oh, I feel terrible the next day. Well, yeah, that's the price for feeling great the night before. Fair trade. Diversification. All right, recommendations. I already did. Okay, you do yours first. All right, Ben, it's fanny pack season. I saw this. You sent a picture of you and people from Chicago, and you were wearing a fanny pack.

1:01:31What's going on? I'll tell you what's going on. So when I am, well, I'm in sweatpants right now. When you're wearing sweatpants, as I do in the transition between spring and summer, right? If it's 65 degrees or in the 60, if it's 58 to 62, which is where we are today, I wear yoghurs, right? Yoghurs, yeah. Yeah. So if you find yourself in a situation where you're in another city, like I was in Chicago, great city, by the way, and you've got a portable phone charger, maybe a pack of gum, a cell phone, your wallet, and a sunglasses case, what are you supposed to do? You need a man purse. I will give it to you that having the big cell phone in your pocket when wearing joggers looks weird.

1:02:18It doesn't look right. Yeah. So I got a fanny pack and it's coming with me. I'm never going back. I'm bringing it everywhere I go. Middle-aged Michael. Okay. Somebody emailed us, how to know if Michael's horror movie recommendations is trash. I just assume they all are because last week I recommended Late Night with the Devil I didn't recommend it, I spoke about it, yeah hey guys, just a quick note on today's horror movie discussion a couple of the movies Michael mentioned today were produced by A24, Talk to Me and Hereditary A24 also released Midsommar and Green Room, Green Room is a great movie and The Witch, didn't care for The Witch and numerous others, I think a fair rule of thumb would be if A24 made it, it's probably good so if Michael recommends one of their movies, it's likely not one of his awful picks great email, definitely true A24 is the best in the biz.

1:03:08Ben, you slacked me and John, Ben, Duncan, Sean. This sounds like a movie Michael cooked up using AI. At the movie, it's a tweet from Variety. Bone Tomahawk director is set to reunite with his drag to cost concrete and brawl in Cell Block 99 star Vince Vaughn and Oscar winner Adrian Brody for new crime thriller. Quote, this is the coup de grace, the bookie and the bruiser. and I am in. Where do I sign up? It really does sound like you put Jet GPT. Here's my movie history. Make a movie I'm going to like. And it's going to gross like$60 ,000 at the box office. That's right. All right. I did see another bad horror movie that I forgot to mention because it was so bad that it was just completely not memorable at all.

1:03:56Night Swim. Remember the trailers past, I don't know, six months ago? It was as bad as it looked? It was worse. So I'll tell you this. If you see that on streaming, just avoid, keep moving. You're welcome. I watched, I mentioned this on TCAF, but on my three and a half hour delay to Chicago, I knocked out a movie, The Beekeeper. That's how you do airplane movies. It's 90 minutes of Statham kicking ass. It's completely ridiculous. And of course they're leaning into it. It's just good, clean, wholesome fun. The Beekeeper, next time you're on an airplane, do not watch it. Do not try this at home.

1:04:30This is not for the couch. It's for the, for the. You have to watch it ironically too, not unironically. Yes. I think you mentioned this. When I watched the Iron Claw, because it's on HBO now, most of the movies, high quality movie. But just not that great? Just okay, yes. I feel like the, how many steroids did Zac Efron eat for that movie? Because he grew another jaw. He was so right. That's another A24 movie. So you're right. It was super high quality. I just, I don't know. Everybody seemed to love that. But it looks like you and me are on this side of that. Great movie. I liked it. I didn't, I liked it, not loved.

1:05:04It was, it was high quality. For some reason, this is always kind of nice. When you find an old movie you've never seen before, and when I say old, I mean like 80s or 90s, because remember, I don't go, people keep trying to give me black and white movies. I appreciate it. I'm never going to watch them. Wait, hold on, hold on, hold on. So we had an email. You've never seen Memento? Oh, I have seen Memento, okay. But that goes back and forth, because that's a plot device. I'm okay with that. Oppenheimer? It's a plot, okay. Got me on Oppenheimer. But back and forth. That's a plot device. All right.

1:05:35So I watched The Edge with Alec Baldwin and Anthony Hopkins from the 90s. For some reason, I've never seen this movie. Really good. What an awesome movie. Both of those guys throwing their fastball. They're really good. I loved that movie. All right, here's one more thing. Wait, hold on. So I saw that movie. I re-watched part of it. Where was I? I think California, actually. It was on late at one of the hotels that I threw it on. Anthony Hopkins was old 40 years ago. Yes, he's one of those actors who's always been old. J.K. Simmons, Steve Martin, Anthony Hopkins. They were born 50 years old. Morgan Freeman, and they just always looked like that.

1:06:11Okay, I got nothing else. Okay. All right, Animal Spirits 360. Thank you to Daniel and the rest of the team for producing these videos and these audios. That's not great English. All right, Animal Spirits pod. Nope, nope, nope, nope, nope. Animal Spirits at the compound news. Thank you for listening. Thank you for the emails. Keep them coming. Ben, what's on your mind? You'll think you're about to say something. No, no. I'm appreciative of the audience for sticking with us this long. We have a lot of people who email and say, I've been listening since show one. And that's awesome. If you didn't come in, if you came in after that, that's cool too.

1:06:43But we always appreciate the audience. We love every email, but those are extra special. Personal emails, personal responses.

1:06:59Cool!