When Your Friends Are Richer Than You (EP.377)

23:218%. 8.5%. Look at this graph I did. Three months later, inflation top ticked after the Fed just started raising rates. So if you want to like really give the Fed credit for bringing inflation down? I think inflation was coming down anyway. It was going to come down anyway. Would this have happened if they didn't raise rates? We'll never know. I mean, you could say that raising rates froze the housing market. And if there was still a lot of housing activity and people spending money in houses and all that sort of stuff, it probably would have contributed. But yeah, we'll never know. I knew that they were late.

23:56I didn't remember it was 8.5 % late. Like that, again, just I totally forgot about it. All right. We haven't spoke about crypto in a while. It's been sort of boring to down. Are you surprised that the growth of the ETFs and all the money that went in there, you had this initial surge in price, and Bitcoin has kind of just slowly but surely given back the gains since then? The answer to that question is, yes, I am surprised. Given the flows, I'm surprised. I'm surprised. Because the flows are way higher than I thought they'd be. And at this point, like, it's fair to ask, like, what's the catalyst?

24:32I don't know. I don't know. But. Right. The ETF was supposed to be the catalyst. The ETF was a resounding success, but not everybody thinks so. Jim Bianco tweeted something about advisors aren't there. It's only small purchases. And Matt Hogan, I thought, had an interesting over-the-top response. Okay. per his table, IBIT, which is the iShares Bitcoin ETF, has attracted$1.45 billion in net flows from investment advisors. He calls this small because it's a fraction of the$46 billion that has flowed into Bitcoin ETFs in total. But if you excluded all other flows and you just looked at the$1.45 billion in IBIT from investment advisors, that would be the second fastest growing ETF launched this year.

25:22And the only one that beats that is KLMT, an ESG ETF that was seeded by a single investor with$2 billion. So it's been the single largest advisor adopted ETF year to date. Actually, Matt says faster than any other ETF in history. It is accurate to say that investment managers represent a small fraction of buyers in Bitcoin ETFs, but it is not accurate to say that investment managers' purchase of Bitcoin ETFs are small. So just because retail has put more money to this than advisors does not mean that advisors aren't putting money into it. So ETF was a resounding success, but the price action has been dog shit to be polite.

25:58So, you know, I don't know. We'll see. Yeah. I guess maybe the next wave is just do the flows trickle and stop or do the flows keep going? And that's what keeps it going. It is, I don't know. It is still surprising to me that we've never had any of these things stick with crypto. I know you could say, yeah, stablecoins, NFTs didn't stick. None of the use cases have stuck. Stablecoins is the biggest success story in terms of use cases. Yeah. But if you would have told people, I don't know, when crypto first started and all the dreams they had, we're going to tokenize everything. If you would have told them stablecoins, like, guess what, you created a crypto money market?

26:38Yeah, come on. It's surprising. But stablecoins still could be the thing that carries crypto forward. I don't know. But I'm just surprised. All right, really cool housing data from this flowing data blog, which taught us that abnormal returns sent to me. So they look at all the different census data and they break it out by years. And they show the percentage of people, the households going from 20 to 90 that rent or buy, right? And when you're young, 85, 90 % of people rent at 20, very few people own. And then it slowly shifts. And at 33 is the age where you have the tipping point of people buying more than renting.

27:18And it obviously goes up from there. Anyway, just a cool visual. He also shows owning with a mortgage or loan or owning free and clear. So people don't start to pay off their mortgages until like their late 50s, really. Which, again, makes sense. I'm coming around to the idea that I might never pay my house off. Just like leave it for the kids. I don't know. I don't see the point of it. Wait, never pay your house off and let that? What do you mean? Just keep taking money out of it. What's the point of letting the money sit there? Yeah, this is a surprising, like, lightning rod issue. People have very strong feelings about paying off a house.

27:58Yes. Not exactly sure where those feelings are coming from, but it's one of those topics. It's one of those topics. Listen, there's no right answer. There's personal finance. There isn't. It's personal. There's some things that are like mathematically cut and dry, but then there's like the personal side of it. I feel like this is really and truly like, listen, whatever you want to do. Some people love the feeling of not having a mortgage. I get it. Other people that like Ben that think that they can do better elsewhere, I get that too. Yeah. But I will, the one thing I will pawn the table on is if you pay off a sub 3 % mortgage, I think you're an idiot.

28:36Yeah. That's pretty, coming from that's pretty strong. I just think it's a dumb move. And I don't say that very often in personal finance. It truly doesn't make sense. Yes. So I just, because I'm preparing for lower home equity line of home equity rates, I just told my bank, increase my home equity line of credit. I want more. Just to have it. Because rates are falling. I don't know. So we've been in our house now seven years. By year 8, 9, 10, do I think my wife is going to want to do something to the house? Hey, we need new flooring. hey, we need a new kitchen, whatever it is. She's going to want something, I know.

29:13And so I'm increasing that now because I want to take advantage of rates when they get lower. Bigger mudroom, maybe another mudroom. Ah, that's true. All right, speaking of home equity lines of credit, Connor Sen wrote a piece about this. Ben, you've been talking about this. He said, we've started to see a slow but consistent rise in such loans on bank balance sheets. By the way, Connor Sen, columnist for Bloomberg, with 2025 looking like a year of growth for a product that fell out of favor after the subprime mortgage crisis. There's a good reason why home equity loans faded into irrelevance.

29:43Underwriting standards tightened significantly following the financial crisis after being way too loose. It took years for home values to go up enough for homeowners to even have enough equity to borrow against. Households generally spent much of the 2010s paying down debt rather than taking on new debt. And mortgage rates continue to hit new lows throughout the decade, making a full mortgage refinance more compelling than home equity loans, which are pricier. And this part I'm bolding. For people of a certain age, there was also a negative stigma attached to home equity loans. In the aftermath of the 2008 recession, a stereotype that gained little sympathy was the homeowner who borrowed against their house to buy a boat or a car only to wind up losing their job in-house.

30:22That was a big part. Remember that? So he shows this great chart showing that HELOC balances at banks shrank throughout the 2010s, corroborating what we just spoke about. And even in the early 2020s, his low mortgage rates incentivized full refinancings. But now they're back. They're coming back slowly. The great financial crisis caused a generation of people to rein in their debt and repair their balance sheets. What if the next recession causes people to go the other way and borrow like crazy? That would be something. It wouldn't shock me. It wouldn't shock me. He also says tens of millions of American homeowners find themselves somewhat trapped in their current houses, tied down by the rock bottom mortgage rates they locked in during the pandemic.

31:05Many of these properties have seen considerable appreciation to it. So there's a chart here, Ben, that shows the owner's equity is at least at levels last seen since the 1960s, showing households are property rich. And it's owner's equity in real estate as a percentage of household real estate. So look at the bubble. The GFC is just, whew, all of the equity was being pulled out of the house, as we know. And now we're well on the other side of that. So I think, I don't think this is like going out on a limb. In the next recession, what are the odds that homeowners significantly lean on their home equity?

31:43I would say like minus 115. I feel like it's like, you know, pretty much even money. Especially as rates are falling, they're going to look at it and say, oh man, I can borrow at 5 % for this. Sure. Yeah. Let's do it. I don't need this equity. So right now, rates are, I think, 8 % to 9%. But yeah, coming down. Coming down. Lastly, he closes with this, and I think this is just, this is like, this is the whole thing. This is the whole kit and caboodle. The coup de grace, so to speak. A good will of thumb is to never bet against the American consumer, especially when lower rates are giving homeowners a new piggy bank to raid.

32:18It's like the Chiefs and Patrick Mahomes. I bet on them in the Super Bowl every year. Am I going to be wrong sometimes? Yeah, occasionally. But most years, I'm going to be right. Yeah, I keep betting against them. I'm shorting Amazon. Always a contrarian. All right. Home insurance. We've spoken a lot about this. Kyla Scanlon had a really good post. It's just a mess. There's a chart showing where properties are most at risk. And then there's another chart showing where homeowners pay the most relative to home values. And this shouldn't be a thing where some states pay a tiny fraction of what the house is worth.

33:01Other states have to have different regulatory structures in place and have to carry the burden. So she says that part of the problem is that some state agencies regulate rate increases, meaning that many people pay much less than they should to insure their homes. According to an example from Bloomberg, a California home that had a premium of$2 ,000 in 2010 was paying$48.20 by 2022. that's an increase of 7 % a year because California heavily regulates insurance price increases. But this massively underprices the risk. It should be closer to$8 ,000 in premiums. And this leads to disastrous results.

33:36She says two out of three American homes are underinsured. And it's just a big problem. And of course, part of this is all of the weather that we're seeing across the country. So I don't know what happens here. I just, I don't know. I don't see how you fix this, especially in certain areas. I don't get it. It's bad.

33:56The silver lining of this terribleness, and I hate to sound so crass, but just pointing out that these insurance companies are on fire. There is an ETF that's up, an iShares ETF, ticker's IAK. It's up 28 % on the year versus the S &P is up 16. You look at some of the stocks, progressive insurance looks like NVIDIA. It's up 60 % on the year. So they are benefiting. That's when the pitchforks come out, though, when people are paying a ton of money in insurance and there's natural disasters and you see these stocks do well and you see the CEOs make money. That's when the politicians get involved eventually.

34:33Yeah, it's not great. Modest Proposal tweeted about Uber. From venture-backed startup to IPO to issuing 30-year bonds at 5.35 % to buy back tons of stock, truly the American dream. And this is why we are who we are as an economy and as a market versus the rest of the world. So the 30-year government bond is 4 % right now? It's not a huge spread. That's amazing. That is amazing. Uber 30-year bonds at 5.35%. 30 years is a long time from now. Also, isn't Uber the kind of the anti-founder mode company. Oh, yeah. The founder was the one who kind of, he got them there, but he got them in trouble and they needed an adult in the room to take them to this next level.

35:24Yeah. You could argue both sides because Travis got them to where they were. All right. There was an article in the Wall Street Journal. Here's the tweet. Talking about Big Lots. The tweet is this. U.S. discount retail chain Big Lots filed for bankruptcy. The latest retail casualty as consumers reign in spending. And we spoke about this a couple of weeks ago, about these false narratives, these nonsense alternative narratives. Have you ever been to a Big Lots before? I don't think they have one around here. I made the joke in Slack yesterday that looks like the store from Napoleon Dynamite. What store?

36:03The Big Lots. You know, it's like an old 1980s looking store. It's got computer screens and I put the picture up on Slack. not the nicest store in the world is my point. It's like discount. Maybe that could be part of it. Is it discount Home Depot? No, discount, discount Target or something like that. Oh, got it, got it. Okay. The furniture and home decor discount retailer has largely posted consecutive quarterly losses since 2022, leading to numerous store closures. They operated more than 1 ,300 stores in the US as of May. Whatever, that's a lot. Okay, so chapter 11. So restructuring, they're not going away.

36:40Big Lots agreed to sell its business to private equity firms, shocker, for about$760 million. The managing director at Nexus, who's purchasing this, said the firm is confident that Big Lots' greatest days are ahead. Yeah, sure. Sure they are. Here's a quote from them. The company has been adversely affected by recent macroeconomic factors such as high inflation and interest rates that are beyond its control. Okay, that's true. The prevailing economic trends have been particularly challenging to big lots as its core customers curb their discretionary spending on the home and seasonal product categories that represent a significant portion of these companies' revenue.

37:14Okay. Or maybe, and hear me out, maybe management didn't execute and it's a big lots issue and not a macroeconomic issue. So I'm looking at the market cap, which has been going down forever, basically. I don't get the idea behind why a discounted retailer wouldn't do better when inflation is higher. They should be doing better. Exactly. Revenue has been going down. Free cash flow has been negative for quite a while. But I'm glad that the article pointed out, beyond macroeconomic conditions, credit to the Washington Journal, Big Lots also operates in a highly competitive space and has struggled to differentiate itself from other discounters that offer home goods or specialize in the categories such as Wayfair, Walmart, TJX, and home goods.

37:58And then somebody quotes an analyst said, Big Lots is not always good value for money. Many of the items that sells are not high-end, that are not drastically expensive, but equivalents can often be found much cheaper at other stores, including Walmart. So Walmart is eating their lunch. So the company's not executing. It has nothing to do with the consumer, or Mac, or this. Maybe it does, but come on. So again, the tweet, again, it's, I don't know if this is necessarily gaslighting. It's just not right. Right. U.S. the consumer casual as consumers rated spending. They're not rating it spending.

38:30I mean, it's just it's just. So anyway, last week we spoke about the dollar stores. Right. And how like maybe they're just structurally and maybe that's just what it is. So there's this guy that I follow has a great, great sub stack on the consumer. His name is Rob Wilson. And he showed that he shows dollar general's trailing fourth quarter EBIT margin, and it's crashing. He said the bottom line revision was massively lower, and it doesn't take a seasoned equity research analyst to discern that the company's business model is absolutely structurally challenged because I said this last week, and he's saying that on the call, they said that they're still confident in the model.

39:09They've got some things to work through. Rob Wilson says dollar stores enjoyed a nice run over the course of the past two decades. The subsector carved out a nice niche and took market share from the big buck discounters at grocery stores. At EBIT margins, they were more than two times higher. The higher level of profitability encouraged dollar stores to overexpand, and their margins have precipitously declined. The bottom line is that Dollar General grew at store count 79%, and at square footage, 84%. It's only managerial malpractice to the highest degree. So again, when we're talking about these companies that serve the low-end consumer, Yeah, I'm not pooh-poohing.

39:46I'm not saying the low-end consumer is on fire. Of course, they're not. But it's a structural issue with the businesses. It says much more about the business model than it does about the consumers that they serve. It makes sense that Walmart would be more efficient and better scaled than these companies. Someone said they wanted to talk about why I see Dollar Generals in rural areas. Someone emailed us and said, I did a case study on them and want to say the reason was because they have one of the lowest footprints in their stores and can thrive in very small towns of only X thousands of people in population.

40:15which is specifically areas that Walmart will not go into. So that was why they're going into rural areas because there weren't Walmarts there. And here's the mic drop, Ben. And now you can get Walmart delivered to you. So maybe you don't need to use those anymore. Correct. Here's the mic drop. There's a company called Casey's General Store. I don't know it, but presumably it serves the same consumers. Connor said, tweeted this. The CEO of this company, Casey's General Store, said, with respect to the consumer, just as a reminder, about three quarters of our guests make over$50 ,000 a year in income.

40:45And so we consider those to not be low income. So about a quarter of our guest base is in lower income. The lower income consumers are modestly changing their purchasing habits. Modestly. I wouldn't say that they're coming in less frequently than they had before, but they're open. They're opting to not buy as many units. So there's a little bit of pressure there. But if you look at the chart of Casey's Jungle Store, it looks amazing. Stocks are at an all-time high. So again, it's easy to blame macro or whatever. Just own it. Yes. All right. Survey of the week. I want to know if people are dumb or surveys are dumb.

41:20This is from PollingUSA, and a bunch of people tweeted this out. There's a federal law limiting how much companies can raise the price of food and groceries, and the support for that went up 15%. There's also a federal law establishing price controls on food or groceries, and the favorability of that went down 10%. These are literally the same things worded differently, and the support for one is rising, the support for the other one is falling. This is the whole thing. Surveys are dumb or people are dumb? This is the whole thing. No, it's just… No, we're sheep and we're very easily influenced.

41:48We're like Play-Doh. This is the whole thing with surveys, especially if they're paid for. I can get people to answer whatever you want. Depends how you word the survey. Does Michael look good in his New Balance cutoff shirt? No. You can find some people who say yes. But also yes. All right. A really good piece from Kyla Scanlon on dating apps and how they contribute to the demographic crisis. And I've said this before, but I'm so glad to not have to grow up in this in this era of dating apps, it just sounds awful to me. And some people say what makes life easier, but her whole thing was saying it's making a lot of people just pull back from dating altogether because there's a certain amount of people that will get matched and women get hit up on these things all the time, but maybe only a certain amount of men will get hit up and they just keep recycling through these and using it as hookup apps.

42:36And so some people just, a lot of men just totally pull back from dating altogether because I guess these dating apps don't do a very good job. Well, because they're business model. They're not trying to get you to find your match and then leave, right? They want you to stay. Yes. And she says that, like, people are – the number of romantic relationships is falling among Gen Z. It's way smaller than it was among baby boomers and Gen X. And she puts the stock prices of Bumble and Match Group in here. I looked at them. Going back for the last three years or something, these stocks are down 80 % and 90 % apiece.

43:08Which is crazy because you see one of those charts that says how people meet. and the number is just online for almost everyone now. And she's saying that maybe these dating apps have actually made the whole dating thing worse and it's contributing. And I don't know, I get back to my point of the older millennial, younger Gen X is the only sane generation because we're the only ones who had a chance right now. Baby boomers never stood a chance with Facebook and 24-7 news. They just didn't stand a chance. I'm casting a wide net here. Gen Z grew up with this stuff. They really didn't have a chance.

43:42You know, same thing would have happened to us if we would have grown up in this generation. We're the only ones who are normal enough to be able to interact with technology, but also remember life before it totally controlled our lives. Yes. Right? So, I mean, but she also said that like the rise of running clubs and things like that, because people are trying to like actually meet people and not be controlled by the algorithms. This is why college is still sort of, People always say like, AI is going to be your professor in the future and people won't go to college and we need to do just homeschooling.

44:13It's, this is what college is for. You can meet people there. So sort of interestingly, Match came public. Was it a SPAC in 2020? I'm guessing it was. I don't know. So the stock's been getting destroyed, but the revenue, the revenue's not bad. Not bad. And free cashflow also not bad. So it looks like the business is doing okay, even though the stock is getting crushed. A corollary to this, Matthew Ball wrote a post on OnlyFans, which I've never been on OnlyFans, although I'll admit I went last night just to – it piqued my interest. But I didn't get past – you have to put in a credit card to get past it.

44:51I did not. It's a UK company. For those of you who are like, what the hell is OnlyFans? I believe it's a social site where you can follow creators and it's mostly pornographic. I think not all, but mostly. And I think you can interact with them. There's different tiers of... And we said foreign companies aren't innovative. Hello, foreign company. So, okay. In 2024, OnlyFans generated$6.3 billion in gross revenues, up from just$300 million five years earlier. That's a massive number. So they said OnlyFans is based around subscriptions, Matthew Ball. Over 60 % of consumer spending is now via transactions.

45:28That's pretty interesting. So subscription revenues are up only 9 % since 2021, whereas transactional spending is up 70%. And no offense. Does that mean like you pay someone and they'll do something? I don't know. Get out. Yeah. You pay for, I don't know, to message with them, to whatever, whatever you pay for. You pay for attention. And you could imagine the type of people that are on the site, right? Probably, probably people that are lonely or not happy. Right. I'm going to back off of dating sites and I'm going to use this because I can actually get what I want if I pay for it. Loneliness is highly monetizable.

46:05Again, transactional spending is up 70%. That's wild. I would love to see an economist do a freakonomics on OnlyFans versus the prostitution market. Like, is that falling off because of OnlyFans? Oh, good question. There's no, but there's no, there's no transparency. You have no data on the prostitution market, right? It's all just estimated. So OnlyFans revenue. I know a couple of pimps who could get us some good data. Did not see that one coming. OnlyFans revenues are now believed to be twice out of pornography giant, Alo, which owns Pornhub, Brazzers, RedTube, YouPorn, and XTube. I don't know any of these.

46:34And the platform counts over 300 million registered users. That's wild. So they've done$20 billion in revenue over the last five years. He was saying$15 billion of it had gotten paid out to creators. Yes. So he said OnlyFans is slowly consuming the entire porn industry. In 2023, OnlyFans creators received a stunning$5.3 billion in payouts. As a point of comparison, total NBA salaries during the 2023 season was$4.9 billion. This is some wild shit. Yeah, these numbers are insane. So there's over 4 million creator accounts. I'm sure it's power laws like everything else. 305 million fan accounts. I'm going to write a personal finance book called, instead of like the latte factor, it's going to be the OnlyFans factor.

47:20If you took the money you are spending on OnlyFans and invested it in the stock market, you'd be a millionaire. my my dad he's called uh texted me on sunday what's with the email i said what email so he called me i i didn't pick up because i had i had other family over then he sent me he sent me a picture of my house and it said dear michael and robin we know that you've been watching disgusting porn. How did they know that? So it was a scam. If you don't send Bitcoin to blah, blah, blah, don't try and call the police, blah, blah, blah. And my dad's, you know, he's a boomer. He's freaking out.

48:02These scams are running rampant. So I called him and I said, dad, it's a scam. And he goes, how do you know? I said, I know. I've gotten this before. Although the first time I got this email. The guy's from Nigeria though. He sounds perfectly up and up. I don't know if I shared this on the podcast. Maybe I did. I first got this email two years ago. I woke up, whatever, six in the morning, saw this email, freaked out, went to the computer, told Robin, our life's over. And I was like, wait a minute. This is a scam. AI is going to take so much money from people. Josh, I want to talk about this on one of your thoughts tonight.

48:35I think the FBI said$6 billion in crypto-related scams last night. I keep getting these emails, these junk emails. I'm sure you do. I'm sure our listeners do. Hi, how are you? Guess who this is. Right. And it's just, yeah, but we take for granted we know these are scams. But if you're listening, anytime there's a crypto-related anything or anybody, Josh Brown, inviting you to a stock trading group, it's always a f***ing scam. I still get people saying, hey, are you on Instagram trading options? Options trading courses? I'm like, no, that's not me. I know. We could laugh at it because it sounds so ridiculous, but it's horrible.

49:14Like the fact that people, you know, or think it's you, it's, it's, uh, it's awful. So anyway, PSA, it's always a scam. All right. Good one from Michael Piper, who writes the oblivious investor blog, which he's been writing it longer than I have my blog. And I've been reading it ever since. Very good. Very like level-headed person in personal finance. This isn't, he wanted to write this thing about how we've gotten too far into the entrepreneur thing. Like you have to start a business if you want to make money and be rich. Right. And he's saying the majority of the people that I deal with, because he's a consultant for taxes and financial planning, he said the majority of the people that I work with have a good job, they buy mutual funds, and they repeat it.

49:54That's all they do. So he said as a thought experiment, he wanted to see what would happen if you maxed out your 401k and IRA every year for the last 30 years and invested it in an 80-20 portfolio. With the caveat that that's hard for some people to do. So if you made that maximum contribution in your 401k every year from 94 to 2023, the last 30 years, in the 80-20 portfolio, you'd have$1.8 million at the beginning of 2024. Same thing with an IRA. Max it out. Obviously, the max there is smaller. You'd have 470 grand-ish. So we're talking max both of those out, and at 30 years, you're talking$2.3 million.

50:26And he's saying, listen, I work with people. That's what they did. They maxed out their retirement accounts, and they saved. over time. Yeah. It works. I do. It does. I do think there's this thing that like nine to five job is bad and you have to start your own thing and you have to, but for most people, this is how you build wealth. Yes. All right. This is a very good email from someone I wanted to read. Hi guys. Thanks for mentioning the headline on stress and parenting. I believe parenting is very stressful and correlated with money and child resources. Personal anecdote. My wife and I do much better than our six to eight parent couple or friends.

50:59It sounds like it could be like some sort of Jason Bateman movie. We have, we have a full-time nanny and sometimes hire additional babysitter on the weeks where she and I need to work longer. We have vacationed a total of six to seven weeks this year and sometimes bring our nanny. These people are doing very well, obviously. That's, you know, not many people have that luxury. Recently, we had another very close couple over for dinner. My wife and I were surprised at their reaction when I jokingly gave the husband a hard time and how he never hangs out with me. He and his wife quickly snapped back about how we don't have the same life and my wife and I don't understand the combination of work and childcare pressure they face.

51:29The reaction made it seem like they had evaluated this before. My wife and I seem to experience significantly less stress than our friends because our financial ability to create as much childcare as we need. Yeah. Yeah. So their friends hate them. Yeah. At least if you mentioned that to someone, you've been thinking about it for a long time and it's been eating at you. Yeah, yeah. This is a really, this is, listen, this is life. and it's difficult to be a big fish in a small pond for this reason, right? Like on the one hand, if you have money, but you don't want to be around other people with money because you think like, you don't want to raise your kids that way.

52:09They're snotty, whatever. I totally understand that. The other side of it is if you have money and you're in a place where you're doing significantly better than a lot of the people that you spend time with, they get sick of your bullshit, right? We know you're doing well. Don't talk about it. It's a tough place. This is life. The thing that stands out to me here, though, is that people always say money can't buy happiness, but money can buy comfort. And comfort can buy a lack of stress. I think that's the idea. Money can help with your stress a lot. I think what people say, money can't buy happiness, I think what they mean is that they are rich assholes.

52:48There are people that are rich that are unhappy. Because that to me is 100 % accurate. There are plenty of people that have money that are miserable pricks. But to your point, Ben, if you have money and you could afford to do these sort of things, all else equal, you're going to be a hell of a lot happier than somebody who can't. That's just a fact. Totally agree. All right. We could skip. Oh, no, we can't. I was about to say we could skip this one. But holy fucking shit, I'm glad I didn't blow past this. So there was a tweet from Peter Kafka. He said, another brutal quarter for pay TV, down 1.6 million subs.

53:25That's a 6.9 % drop. Not nice. Moffat Nathanson said, and their media analysts, they said, it is becoming increasingly clear that there is no longer any floor. And here I was ready to say, yeah, we don't need to cover this. We're going sort of long. But I saw a little piece of text at the bottom of this. Ben, go ahead. I'm going to sound like a hypocrite here. I've been saying it for years. I'm never going to get rid of cable. I think I'm ready to cut the cord. Here's the thing. We have AT &T, and for the last two weeks, you turn on ESPN, and it says, sorry, we're going to dispute DirecTV and AT &T are going to dispute with ESPN.

54:01You don't want to get this channel. We're in college football, season pro football. I go to turn on the Monday Night Football game last night. Luckily, I have YouTube TV, because our lake house place, I use YouTube TV there. So I'm using YouTube TV, so I'm thinking, what's the point of it anymore if you're going to have these disputes all the time? Yeah. And I think YouTube TV is close enough to cable, but I think I'm ready to just go full YouTube TV. I'm sick of the cable companies pulling this crap. I love it. That's why I might be cutting the cord. Listen, this is not a hypocrite. What did Charlie Munger say?

54:28He loves changing his mind. That's true. Right? He loves killing his best idea. One of your best ideas was I'm never cutting the cord. What is YouTube TV? What would you miss? What would you not get? I don't think I'd miss any. My wife is the one who was worried about it for years because of Bravo, but she can get that on Peacock now. So it doesn't matter. So I think I'm going. Why the hell am I paying for it? Because that's what my wife cares about too. Yeah. And I thought about like, I get the quad box for sports. I end up using YouTube TV more than I use my cable. So it's pointless to me. What about TLC?

55:00My wife does like that channel. Oh, I don't know. But so much of my consumption now is streamer. And it makes it more of a pain in the butt. But YouTube TV, they keep adding features. They're going to make it more and more like regular cable anyway. I think I'm going to go full YouTube TV. Okay. I like that. Please report back. All right. All right. Interesting tweet from Justin Wolfers. A terrific slash terrifying example for teaching externalities. And the chart is deaths per 10 ,000, two vehicle crashes. And there's one where it's your own car. And that line is going down. And there's a red line where it's the other car.

55:41And that line is going all the way up. like all the way up, vertical, exponential growth. He says folks choose heavier cars because they're less likely to die in a crash, but that choice makes it much more likely that you'll kill the other guy. Right, economists had this big piece on how these bigger trucks and SUVs and stuff are making car crashes more deadly. But you know what, I was talking about this with somebody, maybe here, when I think about buying a vehicle, I would say safety is safety is nowhere, Mike. I don't even, it doesn't even. No. I've never thought, hey, is this car safe? How does this do in crashes?

56:19Trunk space. Yeah. You don't think about that at all. Yeah. Probably should, but. Maybe we should, yeah. All right. It appears nature is healing. Miami Beach. Andreessen Horowitz is leaving. They exited the space in May. Andreessen Horowitz is one of the most prominent venture capital firms. In 2022, they signed a five-year lease for 8 ,300 square feet. That's a lot, no? Pretty big. The departure underscores the potential weakness of Miami's staying power. Venture capital money flowing in Miami has flagged since 2022. They brought in$400 million in the second quarter compared with$5.5 billion in 2022.

56:58Kind of wild, right? By contrast, San Francisco in the second quarter pulled in$18.7 billion. dollars. I think we've learned that tech people cannot just create their own city. Remember the Zappos guy was trying to create a city of his own in Nevada somewhere? Yes. I think it's just, it's very hard to do. Yeah. How to keep a car clean. Go ahead, Ben. Oh, someone emailed us. A mom emailed us and said, I just finished listening to your latest pod. I'm on my way to work in a completely squeaky clean car on the inside, even with two boys that are five and six, not to brag. Here's how I do it. No food allowed.

57:32I have a hard no food rule in my car, The boys are only allowed to have water. Here's a little implement. They have a sports game. They get a snack after the game. They have to eat it before they get in the car. So she says, I'm a mean, strict, rigid mom, right? But hey, I always have a clean car. Hope this tip helps, although it probably won't. I love this idea as a rule. My kids would riot. Well, it's too late. It's too late. Yes, it's too late. It's a great idea. Robin put like a little garbage thing in the back of the... What's the thing where you put up the center console? Is that... Oh, yeah.

58:02She put a little... garbage behind it so the kids could throw it in the garbage. I don't know if it's going to work or not, but yeah. Yeah. They have these little garbage bags where you can tape it on something. Yeah. Yeah. But it's just impossible. Ben, just on the topic of us being consumers and just buying and spending and eating and drinking, Americans are eating more dairy and drinking less milk. So milk is on decline. I'm not a milk guy. Are you? Do you drink milk? That seems kind of weird. I'm not seven years old. Yeah, it's gross. Cheese snacks are now worth$75 billion a year worldwide.

58:35People love their cheese. Wow. I feel like sometimes these billion-dollar numbers are just, it's hard to. Yeah, it sounds like a lot of money. I don't know. Like the$6 billion in OnlyFans and the$6 billion in crypto scams. And it's hard to put it into context. Early on the show, I said the court is yours when I meant the floor is yours. That's something that I am prone to do. And apparently, I'm not alone. So we got an email that says this. This is a great story. So I was a newspaper reporter and editor for 10 years, five with the New York Times before becoming an F.A. in 2014. In college, I was a campus crime reporter.

59:12Every time someone got a public intoxication charge, the cop had to put down that the person was, quote, a threat to themselves and others. One night, me and my newspaper friend were shortlisted at a grocery store at 10, buying beer. Of course, they called the cops. At the door, the cop was waiting for us. And I said, officer, we are not a danger to ourselves or anyone else. He gave me a weird look and said to just get to where we were going. So a week or so later, my friend is stumbling drunk back from a party, a VHS copy of Rocky 4 in his hand. He bought a, okay. The cops see him and pull up.

59:43They ask him where he's going. He says, quote, listen, officers, I'm a danger to myself and others. They immediately arrested him. So just that one word. That's a great story. Pretty good. Pretty good. All right. Oh, story time. I got one little quick story time here. So we've had a really good… I'm parent corner here. We've had a really good run in the last year and a half with my kids with sports. Winning trophies and stuff. Like my son got placed on this like amazing Little League team. Not by his own like skill or anything. And they won their tournament and he got a trophy for winning the Little League championship.

1:00:21And my daughters have won soccer tournaments in recent months. And my oldest daughter plays on a basketball team. She plays in all these different leagues and tournaments. And she had gone two years without losing a single basketball game. So they were on just a fantastic run in basketball. Partly because my coaching is so good, if I'm being honest. I coach some of it. I mean, so she played in a tournament this weekend, and the competition was really good. And she lost. And they lost the game. It was a very close game, and they lost at the very end. And her and her team was all upset. And after the game, but they played really hard.

1:00:53So I couldn't be mad. And after the game, she got a few tears in her eyes, and she's 10. And she's like, why aren't you more mad that we lost the game? Didn't you see what happened? We lost the game. And I was like, I was like actually not, I didn't want them to lose, obviously. But I was like, as a parent, I was like, they need to lose at some point. It's a good lesson. And so I'm like, I'm not, obviously I wanted you to win, but I think sometimes you need to realize it's a learning moment. I don't know if I was being too harsh at the time, but then of course they learn, and the next day they come back, and they plowed through the competition and played way better the next day.

1:01:23So it's weird. I've gotten to the point where I'm actually okay with losing in sports as a parent. Yeah, losing was part of winning. Yes, it is. Anyway, it was, she just, why aren't you more mad about this? And I'm like, well, hey, listen, this kind of thing happens. All right, recommendations. Okay, so the Hollywood Reporter had an article behind Neon's banner year and rivalry with A24. So A24 gets all the love. And I'm not, I like, I was supposed to say, I'm not sure why. I'm sure why they put out great stuff, but Neon is another independent studio that also puts out great stuff. They were behind Long Legs, for instance.

1:02:01They did Parasite. Remember Parasite? Parasite won an Oscar? I think you could make the case that Parasite is one of the best movies of the past 15 years. Okay, so that's Neon. Yeah, Parasite was great. So Neon, I'm sorry, Long Legs did$74 million, making it the most successful horror indie pick in a decade and neck and neck with Alien Romulus ahead of Man Max Furiosa. So I saw Long Legs and was quite disappointed. Long Legs is the, is Nicolas Cage was in it. And I said to my friends, how did this happen? Like how did the hype machine get such momentum for a movie that was fine? I liked Long Legs enough, but it was like any other, genre horror movie on Shudder.

1:02:51Like it was good, but the hype was ridiculous. Scariest movie and come on, it wasn't scary at all. So I finally got to the bottom of it in the story of how they got to the, how they did the hype, which I didn't include in here. Whoops, my bad. But basically they put out billboards around Los Angeles where it was like phone numbers and like just very like sort of mysterious billboards. So it was a viral marketing campaign. Viral marketing. But this part made me laugh because I could totally picture Nicolas Cage speaking this way. So Nick Cage was really happy with where the campaign was heading.

1:03:28This is Parks, who is the director. He asked me, this is Nick Cage, so am I to believe that you're going to hold back my magnificent grotesqueness until much deeper in the campaign in which you'll reveal me in all of my glory? I took pause because I was like, this is the moment in which this campaign kind of lives or dies. And I said, well, actually, Nick, I don't want to show you at all. And he rocked back in his chair and he put his finger up to his mouth and started thinking, can't you totally picture Nicolas Cage doing this? And I said to him, you're the boogeyman and you live in the shadows.

1:04:05He took a beat and he nodded his head and said, yeah, I like that. I'm picturing him in Gone in 60 Seconds where he goes, let's go. Yes, yes, yes, exactly. So Neon has a movie coming out. I think it's in October. That is highly anticipated. I can't wait for it. The movie is called Anora. Have you seen the trailer for that? It's like a Russian oligarch goes to a strip club and marries a stripper. And it looks absolutely wild. Okay. Wild, wild. All right, Ben, are you a Beetlejuice guy? You and I? Oh, yeah. I rewatched the original recently. And it still holds up. It does hold up. But I have no interest in seeing the new one.

1:04:37I'm a huge Michael Keaton fan. He was on Smart List a couple weeks ago. And I think that's why I rewatched it. And I love Michael Keaton. I wouldn't say I loved the movie, but it's such a unique movie that, yes, I really liked it. Wait, you saw the new Beetlejuice? No, I'm saying the original. Oh. Are you excited for the new one? I'm going to see it for sure. So Scott Mendelsohn, who writes for Puck, said, Beetlejuice, it's the third best opening of the year behind Inside Out 2 and Deadpool and Wolverine, as well as Warner Brothers' biggest launch since Barbie in 2023. So I think it did$145 million over the weekend.

1:05:13Yeah. They're just gigantic numbers. I have no interest. I'll see it when it comes out, maybe. Yeah, I'll see it on streaming, but. But, oh, speaking of Michael Keaton, Josh recommended Knox Goes Away, which I watched over the weekend on Max. I watched that too before. What do you think? It was good. Cool idea. It's a good movie. Too long. All right, so Beetlejuice is coming back. This is the playbook. We keep talking about this. They're making movies for our generation, right? So there's The Goonies. They're making a sequel. You know about this? I did not know this. Yes. I, ugh. That's one of my all-time favorite 80s movies there is.

1:05:46Okay, unless it was just a rumor, I'm pretty sure they're making... I can see it. I'm not happy about it, but I can see it. The Sandman was on with Eli and Payton last night. He's making Happy Gimler 2, which I am... I'm very nervous that that's going to be horrific. No offense. I've always talked about this. There's very few classic comedies that have a good sequel. It just doesn't happen. It's very rare. Yeah. All right, speaking of, I guess, not sequels, but prequels, I watched Quiet Place Day 1. It's streaming on Paramount Plus, I believe. Not in the same league as the other Quiet Place movies, which I loved.

1:06:20It was still entertaining. Totally great. I've got two things about this. So the whole premise of the movie is she's trying to get in and out of the aliens to get a slice of pizza in New York. And my thought process is if this ever happened to you and Chris and Josh and Barry, you guys would die immediately because you would argue over which place to get the pizza from. And you would never make it out of the building. I know where I'm going. I think Chris is coming with me. I'm going to Prince Street Pizza for a pepperoni slice. Okay. I don't know where Josh is going. I think Barry would just start spitting in circles because he wouldn't know where to go.

1:06:52You guys would argue the whole way about which kind of slice you should get or which place you should go. Actually, we should go to this place. So you guys would die. Here's the other thing. In three Quiet Place movies, I've never gotten one motivation from the aliens. I want like a manifesto from the aliens. Like, what are they doing here? Yeah, what's the problem? Yeah, what are you so mad about? Because they can't see anything? Is that what they're so mad about? So I agree with you. The Quiet Place Day 1 was by far the weeks of the three, but still good. The scene where they're in the sewer and the alien is like in the theater, that's Slade.

1:07:21All right. Slow Horses is back for season four on Apple. I think this is the best show of the 2020s that no one ever talks about. Gary Oldman is fantastic. This show is awesome. And they had a story in the Wall Street Journal about the author of the books and how no one was reading these books for years. He got published and then his publisher dropped him. And then it took seven to 10 years for these books to finally take off. and then they turned it into this TV series on Apple. And he sold like four million copies of his books. And he says, he knew he was 60, so he had a job. He would write on the side.

1:07:48He said he would write like 350 words a night. And that was his thing. Every day he'd write 350 words. So the main lesson I've taken away from this is that if you're only going to be successful in one half of your career, make it the second half. If it's the first half, that's a tragedy. The second half is a happy ending. I totally agree. Love that, love that. It's well said. Anyway, slow horses, catch up. Is that six episodes? Six episodes a piece. You watch the first episode and you're kind of like, eh, but the seasons just hum. I do love British TV. Gary Oldman is so good. It's one of the best spy shows I think that's ever been made.

1:08:18It is so good. Maybe I'll watch it on the flight. Speaking of British TV, I think you bottom-ticked industry. The episode after you bailed was one of the wildest episodes of TV. All right, I couldn't handle the ESG stuff. None of the finance stuff seemed anywhere remotely close to reality to me. I just had - You're a finance snob. If you could just look past that. The next episode was one of the better TV episodes I've seen in a long time. All right. But it appears I'm the only one who shares that sentiment. I don't know anybody else except for Tom Morgan that watches Industry. Pretty sure this is the last season.

1:08:52First season was good. So was the second. All right. We'll see you next week. With a few thousand of our friends at Future Proof. At Future Proof. I hope everybody enjoyed their summer. Bring your animal spirits shirts. I said this last week. I can't say it again. Summer's over. It's official. September 21st, right? It's fall, dammit. All right, everybody. Thank you very much for listening. We'll see you next time.