Will Higher Rates Kill the Stock Market? (EP. 484)

13:25Michael Batnick:Is this on the iWatch? How do they get this data?

13:29Ben Carlson:This was my question. Who in their right mind is answering a survey like this? What is your religion? Are you having sex with your spouse? No one in their right mind is answering these questions. How can you think? These are weirdos.

13:41Michael Batnick:It should say weirdos are not having sex or whatever. Like, correct. Who is answering this? Who's answering these? There's no way you can. The average age is what?

13:51Ben Carlson:68? I just don't know who is answering questions like this. You're right. All right. Let's talk bonds a little bit. Let me start with this. Hey, guys, I listen every week and love the show. We got 12 or 13 different emails like this probably. You said last week you bought bonds. Can you elaborate on that? Did you purchase actual bonds or ETFs? What types of bonds? All fair questions. And again, a bunch of people asked us this. Michael and I are totally contraindicators. And here's the thing that I will say on this bond purchase. Wait, what do you mean contraindicators? Because everyone else is getting in the pool for taking on risk, and we're going the other way.

14:27Michael Batnick:I think a lot of people are turning bullish on bonds.

14:32Ben Carlson:I don't know, man. Maybe. So, here's what I did. I did this in my brokerage account, and I've never done it in my brokerage account before. My 401k is still 100 % all stocks. I did this in, I bet an ETF. You can buy individual bonds, but it's a pain in the butt. If you're not like someone who knows how this stuff works, you can go to Treasury Direct and buy Treasuries right from the US government. But it's an old antiquated website, and I don't know why you would try to buy your own bonds when you can just buy an ETF. That makes it easy. It's low cost. Most of them are very liquid. it's just, it's, it's simple.

15:06Ben Carlson:And the thing is we are, we are obviously early here. You and I are not going to like, we bought bonds. So that's the top of rates. No, there's definitely another top, right? I don't look at, probably another top. I never look at, and this is how we think about this with our clients too. I do not look at this from a, I'm trying to time an interest rate market. I think rates are going to fall this much by this date. And like, I don't even care if rates say where they are. Same. Right. So it's, it's, it's a risk reward. I like the yield. Yes. I I like the yield. That's the thing. Speaking of yield.

15:34Michael Batnick:Wait, can I say what I did? Yes. What did you do? Because I'm glad that you said that. I also am not touching my 401k. I'm 41 years old. I don't care really where the market goes over the near term. Now, if you told me for sure, with 100 % certainty that the market would fall for 30%, well, then, of course, I would sell all my stocks and put everything into bonds. But I'm not buying bonds. I still like stocks. Now, if stocks go up, if stocks rip 15 % into year-end and they go up another 25 % in 2027, might I consider owning some bonds? Yeah. If I think we're really in a bubble, will I own some bonds?

16:11Michael Batnick:Sure. Okay, fine. Not that. In my brokerage account, like you, Ben, I am down to one and a half stocks. I still have a pretty full position in IMAX. And I own another stock. Doesn't even matter which stock. But I sold all of the ones that weren't before me. What, are you embarrassed to mention it?

16:26Ben Carlson:What's that? Are you embarrassed to mention it? That doesn't matter.

16:31Michael Batnick:Well, it's a small position.

16:33Ben Carlson:So I, no, I own Clear.

16:35Michael Batnick:Ticker is you. It's a very small position. So it's not worth mentioning. Clear as in like the airport thing? The airport.

16:40Ben Carlson:The airport thing. Okay.

16:43Michael Batnick:So I got rid of, I cleaned up net. I bailed on Netflix. I don't care if it's the bottom. I'm down 20 % of Netflix. I got rid of Spotify. Like all the other stocks I took a chance on that I had like small losses in, except for Netflix, which was a 20 % loss. Gone. Whacked them off. I am very happy owning my 5 % yields. so I've got a mixture of short intermediate and I did take a swing this morning on long, which I will probably get run over on. It's fine. But yeah, this is not a stock market.

17:09Ben Carlson:Okay, so that's a directional bet. You're going a long duration.

17:12Michael Batnick:So I bought, I bought, I bought, I did buy TLT 30 minutes before this podcast started. It certainly feels like a blow off top in yields, but who knows? But just to be clear, for people listening, again, there's not a bond market call to say that rates have topped or anything because they haven't. They just haven't. Like they're clearly going up. The trend is higher. Don't fight the trend. I guess I am. In our investing life cycle, we've never experienced 5 % bond yields before. I got to do it. I got to do it. It's attractive. Okay. So we talked this week,

17:43Ben Carlson:we talked to Bill Egan from JP Morgan. He's going to be on the talkie book in a few weeks. And he was like, you know, I'm getting 4 % on T-bills. Why wouldn't I just stay there? Like that's an option for a lot of people too still. And if the Fed keeps hiking rates, those three month T-bills don't have interest rate risk and they'll do just fine too. And you got to, so the thing is, yields abound.

18:00Michael Batnick:If somebody told you, yields abound. If somebody told you in 2020 that you can get 4 % in cash, the response would be like, all right, why would I really do much else?

18:09Ben Carlson:Right. The thing is, bonds give you the kicker if and when inflation and growth stall. If they stall out, bonds are going to have a kicker. And let me show you. I did, I had Sean and Matt were working on me with some Bloomberg Ag stuff this week. So the Ag goes back to 1976. It was originally, a little history lesson here. Originally the Lehman Brothers Ag, they created it in the early 80s, then they backdated it to the 70s so they can have a benchmark. No one ever had a bond benchmark before. Investment grade. Since 1976, this is one of the worst five-year returns ever. It's negative. It's never been negative before until this part of the cycle.

18:43Ben Carlson:The rolling 10-year nominal return. So that was like negative 0.3 % for five-year annualized return. For 10 years, it's 1.4%. If you add inflation on top of it, this is the worst 10-year real return ever for the ag right now since the inception back in 1976. And the reason was even though inflation was higher and rates were rising even more rapidly in the 80s, yields were a lot higher. So this was literally the perfect storm for a bad bond market. Low starting yields, rapidly rising rates, high inflation. You couldn't ask for a worse bond market than we just lived through. And on the other side of that is higher yields.

19:21Ben Carlson:That's our bond take. All right, I said last week, there is no such thing as a K. Jim Bianco slid in my DMs and he said, Ben, this is the K. He sent me a chart. We talked about sentiment earlier. By the way, Jim Bianco turned bullish on bonds. Bonds, I saw that. Yeah. So he said, this is the K. It's the stock market versus sentiment. Stock market goes up, sentiment goes down. Because I said, there's no chart that actually looks like the letter K. He said, no, it's the stock market versus sentiment. This is very bizarre. You can see in the past, stock market crashes, sentiment crashes. Stock market goes up.

19:56Ben Carlson:Sentiment goes up. Until 2020.

19:58Michael Batnick:We know. The surveys are broken. Yeah.

20:01Ben Carlson:COVID did it. Here's the strange thing about the K. All right? K2 Institute, look at this. This is pretty surprising. They looked at household, the growth in income on an inflation-adjusted basis. Since the 1990s, the lowest fifth of income. So they did the lowest fifth, median, second fifth, and middle fifth. They're looking at poor and middle-class households. The lowest fifth has seen by far the greatest gains in income since 1990. Very surprising. Okay. They also looked at, let's see. Hang on. Oh, growth and wealth too. It's actually been pretty strong. Like throughout most of the 90s, income gains actually weren't that great for most lower and middle income households.

20:44Ben Carlson:They've like rocketed higher in the past 10 to 20 years. Wall Street Journal has this piece. Inflation adjusted median household income. Look at this. from 2000 to 2015, inflation-adjusted income went nowhere. Remember how mad people were about this? Look at how much it's shot up in recent years.

21:03Michael Batnick:This is also an underreported part of the economy. And I'm definitely not saying that the lower fifth is like killing it at all, because they're obviously not. On a relative basis. No, no, no, that's not where I'm going. My point is, they're still spending all their money. And now they have more money to spend. Right.

21:23Ben Carlson:Listen to this. One more from Cato Institute. Since 1967, the share of households with incomes of 150 ,000 or greater, that's inflation adjusted, okay, has more than quintupled. This is the craziest thing that, look at this chart here. The percentage of people with$150 ,000 or more inflation adjusted in 1967 was 5 % of households. Today, it's almost 30%. Wow. I don't think we celebrate enough how much wealth that we've created and how much better incomes are than they were in the past. One more. Blake Millard, friend of the show. He's done a panel with me last year at Future Proof talking about content.

21:59Ben Carlson:Surging equity wealth pushed household assets above 10 times of liabilities in Q2 of 2026. This is from Bank of America. This is an insane chart. Household assets to liabilities is now 10 times.

22:12Michael Batnick:That's pretty crazy, right? We spend a lot of time talking about the liabilities and not enough talking about the assets. To that point, J.P. Morgan had a similar report this week titled, More U.S. Households Are Supporting Spending by Drawing on Investment Wealth. So the flywheel of stock market gains flowing into the real economy, which we've been discussing, is spinning fast.

22:36Ben Carlson:I have a question about this. I have a question about this report. Give the data, then I'll ask my question.

22:41Michael Batnick:Okay. You know I didn't make this report, right? Yes.

22:44Ben Carlson:But I have a take on it.

22:46Michael Batnick:Okay. 8 % of people withdrew money from investments on net over February to April 2026. That's up from 4 % over the same period of 2019 and just 2.4 % in 2015. High-income individuals are much more likely to use investments to support spending. The share from the top income segment rose from 6.6 % from February to April 2015 to 20%. That's unbelievable. So the stock market is just a big-ass piggy bank for people that have been invested for a while. One more thing, and then you could ask. They also showed the cash withdrawn from investment accounts as a share of spending. And of course, for the top 10%, it is so far up until the right.

23:33Michael Batnick:It used to be like less than 4 % in 2015. And now it is, I don't know, over 10%.

23:39Ben Carlson:So I read this report too. Oh, you want to go on vacation?

23:42Michael Batnick:Yeah. Sell some stocks.

23:44Ben Carlson:This is showing the wealth effect. Isn't this also just baby boomers retiring and spending more from their investment accounts? I don't know if it's just that. But isn't that a big part of it? Of course, it's part of the story. Okay. I thought, all right. I think stats like this are going to be skewed by baby boomers in the years ahead. Both of them can be true.

24:06Michael Batnick:Do you doubt the direction of this chart is absolutely telling the story?

24:09Ben Carlson:Think about how many baby boomers are, like think about where baby boomers were in 2010 in terms of how they prepared they were for retirement and going, my house got killed. My stock portfolio got killed. I'm never going to be able to retire. And now they're looking at, oh my gosh, everything I own is up. I'm doing way better than I possibly could have imagined.

24:27Michael Batnick:That was a dumb take. Baby boomers cashing out their 401k was going to crash the stock market.

24:33Ben Carlson:Yeah. I've never made that one.

24:35Michael Batnick:Oh yeah, because that's how it works. When baby boomers turn whatever the age is, what is the age of withdrawal for 401ks? Is it 69 or 65? 69 and a half? 59 and a half.

24:47Ben Carlson:You can start.

24:48Michael Batnick:59 and a half. Right. Yeah. See, I'm not a CFP. Anyway, that they were going to just like go to cash simultaneously. Dumbest shit ever.

24:59Ben Carlson:All right. We have a heading for inflation here. We haven't used it in a while, so I put something in here just because. This is inflation-based. John Arnold tweeted this. As of August 2026, the national median rent sits at$13.90, almost exactly where it would have been if rent growth since 2020 had remained on the slow and steady trajectory that had been on pre-pandemic. 2 % annualized since 2017. So you had this huge, enormous spike in 2021 in rents. And ever since 2022, rent growth has completely fallen off and it's back on the pre-pandemic trend. I'm not sure how many people would believe you if you showed them this.

25:33Fine.

25:34Ben Carlson:Yeah. Interesting. It's good news, correct? You don't think rent growth slowing is good news for people, especially young people who are boxed out of the housing market.

25:42Michael Batnick:It's good news.

25:43Ben Carlson:Come on. I know there's nothing people on social media hate more today than good economic news. Eddie Elfenbein says that all the time. Well, yeah, I just—

25:54Michael Batnick:You know that's true. I know. I know that's true. I'm just saying inflation was so horrible that it's just difficult to celebrate this.

26:02Ben Carlson:But this is literally the biggest outlay for 90 % of households is housing. Yeah. For people who are renting, the fact that rent goes slow… No, yes. For people that are renting, of course.

26:13Michael Batnick:Of course. It is good news.

26:14Ben Carlson:All right. Let's talk about… So you said you've been… I liked your take that you don't want to hear what people are doing with their agents or AI. It's like fantasy football. Stop telling me what you're doing. I don't care. Right? I am violating my own rules. I'm sure you are. But you're using some of this stuff. I talked about playing around with Muse last week. So Torsten Slock has a… He said, But Muse and similar agentic AI assistants could soon sweep household cash automatically into accountants paying 3.3 % to 5 % instead of 0.1 % on the national average on checking accounts. If every household used AI agents to optimize the return on their cash.

26:49Ben Carlson:This is stupid.

26:49Michael Batnick:This is very stupid.

26:50Ben Carlson:Yes. Banks could lose a large share of cheap deposits that you rely on to make loans, which would be a problem.

26:55Michael Batnick:And if I had hair, I wouldn't be bald. First of all, they can't do this. The banks will shut them off if you just keep paying their bank account. Yes. That's what we don't need. The bank will restrict your access.

27:06Ben Carlson:Like, listen, I've said from the start, the only thing I want from AI is Scarlett Johansson from her as my assistant. And it sounds like we're really getting close to that or we're already there. We haven't. That's all I want. I want the assistant. I think it's got to get better. I'm not going to be a – I'm never a first user for these things. So I'm probably going to wait until Apple does it to use it a lot. I've been toying around with Muse a little bit.

27:29Michael Batnick:Okay.

27:30Ben Carlson:But I'm going to wait until Apple gives me a really good one and probably use them just because I think it'll be easier.

27:36Michael Batnick:I want to, before we get into the agents and I've been using this shit out of instinct over the last week and it's absolutely incredible. So I'm going to violate what I said last week about not sharing. Sorry, don't care. It's unbelievable and I want the audience to know about it. I want to say this before we return to the agent stuff. I don't know if this is controversial or not. I don't give a shit about AI slop. How about that? I don't care. Here's my take. I understand why people do care about it. I really do. I think it's coming from a good place. I think that there's worry that we're losing our humanity.

28:19Michael Batnick:But can I tell you something? I just don't care. I don't get caught up in what other people are doing. If you want to write me an AI crafted email, I'll just delete it. Or maybe I'll read it. I'm just not that bothered by it. I feel like AI slop has become like the term du jour on the internet.

28:35Ben Carlson:I don't care. I guess I'm like you where I'm not, and I'm sure most people are coming around to that or will come around to that. I'm like you. I just, for me, it's a filter to ignore someone. If you read a blog post using AI and I can tell immediately that I'm just not going to read it. Right. So it's just a filter for me. Yeah, you're right. It doesn't make me angry.

28:53Michael Batnick:I guess people are making the leap that like there will be nothing left other than AI produced shit. and I just reject that. It's just nonsense.

29:01Ben Carlson:I do too. And also, there aren't that many good writers out there. So if people are using ad and write better than they could by themselves, I don't know. Why wouldn't you? If you're not a very, if you don't like writing or you're not very good at it. So anyway, I'm bullish on the agent thing. All right. I think it's going to be, but I think, but I love the fact that we're getting to the point where we're trying to figure out what the next, what it's going to lead to. And I like, listen, it's not that hard for people to take money they have now and move it. It's not hard to do. Like just having an agent is not going to make you much better.

29:33Ben Carlson:I love the fact that people are trying to think through what this having an agent will do. Here's my, here's the thing I don't, I think that's totally unanswerable right now. How many people are actually going to use these to the fullest extent? Because like, I know people who are all like optimized to the hilt, love these things. How many people actually need a personal assistant for their life? How many people have CEO level, whatever, or C-suite level lives that are so busy that they need this? That's a question I don't know the answer to.

30:03Michael Batnick:I think that's the wrong question. Who says everybody has to use it for it to matter?

30:10Ben Carlson:Well, if it's going to lead to a bank run, then everyone has – that's what I'm saying. To have societal – Okay, fine. I didn't know you were saying that. Nonsense.

30:15Michael Batnick:Okay, I think everybody's going to use those things.

30:17Ben Carlson:But I do think the people who do use them, they are going to get – But I think after a while, you're going to go, how many like restaurant reservations do I really make? How many travel reservations do I really make?

30:26Michael Batnick:Everybody's going to use these things.

30:28Ben Carlson:Of course they are. But I don't know if they're going to have the societal impact that.

30:31Michael Batnick:God damn it. Let me finish.

30:32Ben Carlson:All right.

30:33Michael Batnick:What I say, everybody, because I've been using it all week. You have not. So let me just talk about this. Oh, all week. Woo. Well, since Future Proof, since I downloaded it. Okay. And I cannot go backwards. So you are a late adopter, admittedly. You just discovered Apple Pay. I don't think that 100 % of the society is going to use this. Obviously, when I say everybody, I don't mean literally everybody. But Ben, it is f***ing incredible. It is absolutely incredible. Don't think of it as like, oh, does everybody need an assistant? No, not everybody needs an assistant. It just does so many things for you.

31:06Michael Batnick:So as an example, and I'm not saying that this is the end-all be-all. I'm just sharing with the audience who's like, wait, what are you guys talking about? So Instinct is a company that is similar to Muse, which you may have heard about from Meta. instinct is what's interesting about instinct and patrick just had on the the founder on his podcast the kid is 23 years old which is totally mind-blowing they're growing 10 a day they just raised a billion dollars at a 10 billion dollar valuation okay so what is it and if apple comes out with serious assistant that company is nuked overnight i don't know maybe perhaps if i okay Okay, keep going.

31:40Michael Batnick:It is a text messaging platform where you text it to do anything. And when I say anything, Robin will send me like, oh, can you get this basketball for Kobe? Can you go to this? Can you do that? So now Robin and I have our instincts synced to each other where they're talking to each other. They're putting stuff on our calendar. They're buying, they're scheduling, they're returning. So as a tangible example, I said, can you help me with my Disney subscription? I think right now I pay for Disney, Hulu, and ESPN plus bundle with commercials. I just want Hulu and Disney, no commercials. What am I paying now?

32:17Michael Batnick:What would be the new price? Can you execute this for me? All right. So it said, on it, I'll pull what you're paying now, price out, blah, blah, blah, blah. Found it. And I don't need to read every text message. The point is, it does things for you. It doesn't just tell you what's happening and then makes you do it. It does everything for you. So there's going to be a lot of concern about safety, how secure are these things?

32:40Ben Carlson:Yeah, I'm simply not ready to give my information up to these places yet. No way. That's fine. I'm not there yet.

32:44Michael Batnick:Okay, Noah said, the founder said -

32:47Ben Carlson:But AI probably goes, ha, idiot, I can hack into all your stuff anyway. I don't need you to give it to me.

32:51Michael Batnick:Said after three weeks, 40 % of users are sharing a personal credit card. So I've shared everything. Maybe I'm an asshole. I don't care. It is doing all of my everything. Move money here. Oh, my account got overdrawn. Oh, f*** what happened. I had to move money from this account to this account. It repaid it for me. It is just doing everything. It's crafting emails. It's unbelievable.

33:15Ben Carlson:I'm totally not there yet for moving a account. I do not want an agent that can go rogue to move from one account to another. There's no way I'm trusting that. Maybe I'm just naive here, but I'm not doing that. No way. Totally fine.

33:27Michael Batnick:You can do whatever you want. My point is that this thing is going to be adopted in a big way. And that is why. I agree. I'm very bullish on these things. It really is the first thing that I've felt in this AI thing that is like, I can't shut up about. Like Robin is getting very sick of me talking about it. There's a Goldman Sachs consumer inertia basket. I put this in here. So these stocks are getting mauled for good reason. By the way, I just cut the cord. I had instinct finally, and I could have done this, but I'm paying for every streaming subscription platform, including MGM Plus. Why am I paying$175 a month for cable?

34:09Michael Batnick:I literally -

34:10Ben Carlson:Did you watch the new Jon Hamm show yet on MGM Plus? No. Save it for a couple more weeks. I'll talk about recommendations.

34:16Michael Batnick:I never use it.

34:17Ben Carlson:I never, ever, ever use it. So that's the point that it's going to go to go through all of my subscriptions and cancel the ones I haven't used in the last 12 months or whatever it is. So that's why these Planet Fitness, the New York Times and all these places sold off. I don't know what the unintended consequences are going to be of these businesses just blocking all these agents. I don't know if they will want to, or does it just mean, okay, fine, we're going to double our prices. Like I. So I lost.

34:44Michael Batnick:So this is annoying. I can't find my credit cards. Can't find my wallet. So you do need a personal assistant. I don't know where it is. I, uh, so I'm in Texas and I've traveled with my passport. And so it suggested that I get a card that goes into your wallet where it's like a find my, right? It's like a ship card. So it bought that for me. Okay, fine. I asked it to monitor my credit cards to make sure that there's no unusual activity. And it said something along the lines of, I can only check your account once a day, because if I do, it'll feel like it's being hacked by a bot and we'll get shut off.

35:23Michael Batnick:It's very aware. Anyway, to me, this is like, holy shit, the future is here. And I am incredibly bullish on this category. And I don't know if Instincts can be the winner or Muse or Apple, whatever. And I understand the concerns, the privacy concerns. I totally get it. How do they make money?

35:39Ben Carlson:That's what I don't get. How do they make money? They could charge$5 a month.

35:42Michael Batnick:I don't know.

35:43Ben Carlson:Yeah, all right.

35:43Michael Batnick:Name their price, I'll pay it. All right, side of the times. You're going to get it hacked. I can't wait. Sorry. That's not very nice.

35:51Ben Carlson:I know.

35:51Michael Batnick:Side of the times of this 23-year-old kid starting this company. Andreessen Horowitz is spending$35 million to back two-year academy with other Bay Area tech giants on board. Basically, if you're an 18-year-old future genius and you want to skip college, they're incubating this type of thing.

36:15Ben Carlson:I don't hate it. Me either.

36:17Michael Batnick:Love it. All right. We don't need to spend time on this. It's just LOL. founder of CalShare. We just submitted a regulatory filing to introduce margin on a subset of long-dated prediction markets. Perfect. Just what we need. Just what we need.

36:31Ben Carlson:So it says it would not apply to sports, culture, and a few other categories.

36:34Michael Batnick:He said capital efficiency has been the biggest bottleneck for institutions, and margin is the single most requested feature. Whatever, dude. Okay. Yeah.

36:45Ben Carlson:All right. What would those long-dated predictions be? And I wonder what long-dated means to them. Like, how long is long?

36:51Michael Batnick:Two weeks out.

36:52Ben Carlson:Right. Okay. So last week, mortgage rates went to, like I said, 7.3%. I put a Simpsons meme in here that it's already dead. Oh, brutal. Absolutely brutal. At what point do people just say, you know what? Screw it. Let's overpay. I feel like - That happened. That was 25 and 26.

37:14Michael Batnick:Now it's - That's over. I don't think people can afford to overpay anymore.

37:18Ben Carlson:We've been overpaying. Incomes are up. Like, I don't think people who've been waiting and waiting and waiting will just, they'll just say, fine, I'll overpay and I'll pay too much in the monthly and I'll hope to refinance later.

37:30Michael Batnick:I don't think it's a fine. I think, I think like at a certain point, like there's just math. And so we've looked at all those charts that show, that show, I'm just trying to, I'm trying

37:37Ben Carlson:to look for the bottom. I'm trying to look for the positive for housing. So like we show all those charts that show like the stock market bottoms way before earnings bottoms way before recessions, like the stock market always bottoms before the bad news is gone.

37:49Michael Batnick:is housing going to bottom before the market like activity is i don't know all right here's no there's no the glass is uh the glass is 100 empty here's a question i was thinking about the other day so i got a three

38:08Ben Carlson:percent mortgage and i can't remember when i refinanced 2020 or 2021 if i do back the envelope math on that. I'm guessing it would be worth maybe 60 cents on the dollar. Who lost money in that transaction? In that bond? Who is the loser of that bond?

38:24Michael Batnick:Whoever's holding it.

38:25Ben Carlson:Someone lost a lot of money on a lot of bonds like that. Right?

38:31Michael Batnick:Well, opportunity costs, sure.

38:34Ben Carlson:Well, no, just the bond. If you're holding that bond, I have not repaid my loan. That loan is still in a basket of bonds somewhere. Someone got bent over on my 3 % mortgage. It's not me. How about this? Can't lose money if you don't sell. So people always get really mad when you see proposals like this. This senator, I don't know where he's from. He proposed that there is a 5-1 federal match for first-time homebuyers saving for a down payment, up to 50 grand. Great, I love it. Do it. Who gets mad?

39:03Michael Batnick:What f***ing asshole gets mad about this? Well, I have a 12 % more year. Yeah, shut up, asshole.

39:09Ben Carlson:So you save 10 grand. The government saves 50 for you. you have$60 ,000 for down payment now. So people say, why are we always trying to subsidize demand? I guess I would agree. It would be a lot better if we somehow subsidize supply. Oh, I know, because demand is f***ed. But it doesn't, it doesn't, but it also doesn't feel like we're ever going to do anything about supply. So short of that, I think, yeah, I'm actually okay with this. I would rather them give all first time, all new first time home buyers a 3 % mortgage than this. But you're right. I don't, a lot of people are going to hate this.

39:39Ben Carlson:I don't hate it. Right? I don't know. Let's see. So redemptions are still happening in private markets. We haven't talked about private credit. You had the Hamilton Lane guy on to talk about private markets.

39:53Michael Batnick:I thought it was great. No commentary on their investments or anything like that. I found them to be engaging, reasonable, was nodding along with a lot of the critiques that we've offered over the years. I liked them. um it's so interesting that the outflows continue because the bad news has not and you know damn

40:13Ben Carlson:well that the media is dying for a big default dying yeah we have we haven't had but this was two stories chris and chris and shaughnessy highlighted these apollo captive private credit fund 15 of people look to exit morgan stanley had one that was 11 uh and apollo one's a pretty big like 26 billion in assets. And it said last quarter, it was 17 % or so. So like these are, people are still asking like, no, no, no, I'm not going to hold on and wait. I, so people get every quarter, more people keep coming back asking for their money.

40:45Michael Batnick:Well, the equity of these companies looks terrible. Like looking at Carlisle was at$70 last September. That's a year ago. It's now 40. Blackstone is, I mean, all of them, doesn't matter. The basket is GPZ, if you're curious. I don't know why you would be, but these names are getting destroyed.

41:04Ben Carlson:Blue Owl obviously never came back at all. Oh, man, they're testing new lows again.

41:09Michael Batnick:Yeah, it's grim. Listen, I will say, even though we opened the show with a pretty emphatic no, the market is not going to fall apart. Caveat that with rates, because if the 10-year… Hey, that's what my point was, rates. That's what I said. If the 10-year is 5.6 % next week, I don't see how the market doesn't crap.

41:35Ben Carlson:I agree. Rates have come up so—that's what I was saying. The rates are the thing. That's the excuse for the market to sell off. Will it take it? I don't know. Oh, I have to apologize to United for throwing them under the bus last week.

41:53Michael Batnick:I flew American. American has a terrible movie selection. Okay.

42:02Ben Carlson:I don't know why they don't just... I know some of them have adopted like Paramount Plus or like... They should just all have the streaming services on there and just give them for free.

42:10Michael Batnick:Great point. You know what's very rude? When people get up in an airplane and they use the back of your seat to lift them up.

42:19Ben Carlson:That annoys me every single time. Then they get back in, he pulls you back. I hate that. Yes.

42:25Michael Batnick:So I was very close to saying something. thing it only happened once but it was so aggressive ben like it was such it wasn't like it was just like like and like how do you not know that you're doing that to the person in front of

42:36Ben Carlson:you it's so bizarre i always say the people who do it behind me so i i she walked right past me

42:43Michael Batnick:and i didn't have time to turn it was just it was just unbelievable like and then when she sat back down it wasn't as bad but i i saw at the event that i'm at i didn't say anything all right let's do some uh let's talk about how let's talk about show business joey politano has a really great

43:03Ben Carlson:sub stack on the the uh fall of the creative class so he says america's lost more than two hundred thousand creative jobs in the last four years 50k and last year alone uh one of the worst stretches for media employment in modern u.s history he said it's only similar to 2001 and 2008 uh so this is movies newspapers magazines books radio tv all this stuff right and then he kind of breaks it down by the jobs and a lot of it is graphic design and streaming and radio and all this stuff like this he had some really good charts and i don't know if you've read this piece so um music has a percentage of u.s consumer spending is like it's all ticket sales now people don't buy albums they spend a little bit of money on streaming but it's mostly live events which is probably a good thing for for people's well-being right but this one is interesting and i've said movies are dead this is he shows video as a percentage of consumer spending and it's basically buying movies streaming cable or movie theater tickets and movie theater tickets as a percentage of consumer spending dropped off hugely in covid and still has not come back but it's been falling for decades yeah obviously but all of these the spending on this type of entertainment has fallen off of a cliff.

44:19Ben Carlson:You can see. That's not coming back. I mean. No. I. So my worry here, though, is how much you said you're not, you don't care about AI slap. This is where you're going to start to care about it, is if like the quality of movies and stuff goes down. Because I watched that Aaron Eckert movie you talked about with Ben Kingsley. And that was, that felt like an AI movie to me. It was the worst.

44:46Michael Batnick:Did George watch it?

44:47Ben Carlson:Of course, he loved it. It was an airplane crashed in the ocean and there were sharks. Kobe said to me that he was, Daddy, we never finished Deepwater. I said, I think we're good. I mean, it was some of the worst like CGI I've ever seen in my life.

44:59Michael Batnick:And that worries me that we're going to get more of that. I know we did this last week, but now that you saw it, isn't it just, what's the word? Bizarre, unfortunate, sad, that Ben Kingsley has been reduced to this.

45:15Ben Carlson:It was very bizarre.

45:16Michael Batnick:He was only in the movie for four minutes. Yeah.

45:21Ben Carlson:He died a very heroic death, though. Didn't he?

45:26Michael Batnick:So I'm in Austin, and I had a work dinner last night, and I asked, Instinct, are there any theaters near me playing Resident Evil? I've been very much looking forward to this movie. So there was a theater here called Crown Violet. It's fantastic. Really cool little theater. There's a bar there, which I enjoyed. I did enjoy a beverage at the theater. Although I did have to use the bathroom, which was unfortunate. God, that movie rips. That was so much fun. Holy shit. How many of them have there been?

46:01Ben Carlson:I've never seen any.

46:02Michael Batnick:Did you see Barbarian? Yes. Is that the Justin Long one? Yeah, so Barbarian and Weapons was by this director, Zach Kregor. Anyway, Zach Kregor did the Resident Evil movie, and it was so much fun. and there was a ton of people around me, young people having a good time, awesome movie. But the industry is in disarray, obviously, and it's not coming back. Jeffrey Katzenberg was talking with Bellini and Lucas Shaw on The Town about this. We haven't really even started to see like AI integration into the arts. Now that is an area, of course, where AI slot becomes very concerning. Right. Yeah, you're right.

46:41Michael Batnick:That stuff is still coming.

46:46Michael Batnick:All right, what does this say about the sign of the times that Anthony Justelnyuk, which I didn't even know that he had this, has a book club podcast that is wildly popular with its audience. They just got integrated with The Ringer. I love it. I think it's a great idea. Are you a fan of the book club?

47:06Ben Carlson:I went through his list of books. I mean, you're a perfect mark.

47:10Michael Batnick:You're a fiction guy.

47:11Ben Carlson:I still love reading fiction. I know a lot of people don't. It's fiction. I still read every single night before I go to bed, I'm reading fiction. I listen to nonfiction now and I read fiction still. I love, like, when I go on airplanes instead of watching movies now, I'll just read for the whole flight. It's like my one time I have, like, peace and quiet and no one around me. And I just read, like, the whole time. I love reading. All right.

47:31Michael Batnick:Well, it's funny you mentioned that, Ben, because this was the first time on my flight out here. There was an early flight, which was so stupid. I took the 7 o 'clock flight and I landed here at 10 o 'clock. I'm like, why did I do that? No reason to be up at 4.30 in the morning. Anyhow, I listened to it and I discovered, I learned something about myself, Ben. I haven't really thought about this. My favorite genre, it's not a genre. I love memoirs. So I just finished Keith McNally, who is a restaurateur, which is such a stupid word. Why is there no N in there? Should be restaurateur.

48:05Ben Carlson:There's no N, really? I didn't know that.

48:06Michael Batnick:There's no N. It's restaurateur. Nonsense. Anyway, he owns Balthazar, Miranda, and Mineta Tavern and a bunch of, and this guy is so brutally honest. Of course, it's got to be like an honest memoir, right? Like if LeBron James did a memoir, sorry, LeBron, no interest. But I love when people open up about like the shit. And sometimes it's weird when they like really share some of the personal stuff with their kids and stuff.

48:31Ben Carlson:What do their friends and family think about this?

48:33Michael Batnick:Yeah, it's like, did they give permission for this? Anyway, great book. And I'm also, so I finished that and on the flight, I listened to Ari Emanuel's book, which is awesome and the narrator matters a ton Bob Odenkirk is reading Ari Emanuel's book which is I guess they're long time friends Odenkirk is awesome and then lastly I'm very much looking forward to the Sylvester Stallone book

48:56Ben Carlson:memoir I should say I watched his interview he talked about how he had like eating disorders and

49:01Michael Batnick:yeah I went far this weekend alright good news the 80s and 90s are back so back we're getting a Blair Witch reboot which is Blum and Wong I'm very excited about that. Gremlins, I could take it or leave it. Gizmo is very cute, but did you see this? Gizmo's coming back. No.

49:19Ben Carlson:Watch, I watch those movies.

49:20Michael Batnick:I feel like I am now, my head, I'm on 1.5 times speed now that I've got the clock ticking for room service. But there's, so I'm going fast. There is Q4, Q3, Q4, the fall and winter are going to be freaking awesome for the movie theater. At least for me. These are the movies that I'm very much looking forward to. Godzilla minus zero. Got amazing reviews. the first one was one of my favorite movies the last five years. Clayface, I know it's not for you. Other Mommy, Whale Fall, I Play Rocky.

49:47Ben Carlson:Is Whale Fall the one of the whale eats the guy? My son has been talking about that since he saw the preview.

49:51Michael Batnick:George is, George is, George is, you're going to take George to the theater for that one. You can't wait. Don't deprive him. Dune 3, You Can See Everything, which is the Elizabeth Holmes movie. Primetime, can't wait to see that. Verity, which is, my wife and I might see that. And then Artificial. All right, I want to talk really quickly about Avengers Doomsday. I took, kobe and logan to see encore and it was so cute logan was so excited so we finished infinity war he was very upset that spider-man wasn't going to be in endgame and i said just just watch um and the theater was packed i think it did 20 something million dollars like it had a good good good weekend at the box office um and people were clapping and i saw kobe clapping and i was like you know i felt that he was like part of society's like reading the cues and yeah clapping along.

50:39Michael Batnick:I f***ing hated it. I hate when people clap at the theater. I love that my son did it. I love that he had a great time. I hated Endgame. And I hated it when I saw it. It felt like such pandering to the audience. It felt like that stupid Star Wars movie. I can't remember what the last one was. I just

50:54Ben Carlson:hated everything about it. And yet I'm very, very excited for Doomsday. It is funny. When my kids do stuff like social things that I don't like, like my daughter will text me THX and I'll say, don't, no. We're not saving time on thanks. You can write out thanks. Okay, we're not doing the THX. All right. That's we don't do that in this family those things But you see this Robert Pattinson thing in here. I didn't have to say my so it's bizarre

51:19Michael Batnick:Pattinson and Hathaway are both like They each have like three or four monster movies in 2026 I asked like is Anne Hathaway like broke or something like what's going on? It was just after the end of Oak Street I thought she yeah, she was in but it's funny because my daughter and I finished the Twilight series

51:33Ben Carlson:I kind of I'm not on a computer while she's watching it and the last I don't they did five of them or four of them and the last three or four of them are just awful even my daughter's like man this got really bad huh i'm like yeah oh great you see it too okay just making sure i can't believe that there was that he i'm like can you this guy turned out to be a huge actor now who would have thought so this is odyssey prime time in the drama unbelievable that's a pretty good year i can't see him and not think about the beggars meme now every time i see him what's that from from odyssey get all these beggars out of here

52:10Michael Batnick:and we're seeing that one okay i can't wait to see primetime the chris hansen one all right um maybe so the new york times did his best 100 shows of the 21st century and the weird

52:21Ben Carlson:thing is that everyone's complaining they didn't include sopranos because it started in 1999 whatever i have a few minor thoughts i'm only thinking of the top 10 here so okay so i have some very minor thoughts i think for me wait so read the top 10 for people that didn't say it breaking bad the wire mad men succession fleabag game of thrones veep 30 rock kurbir enthusiasm in atlanta uh so here's here's where i would take mumbridge um i think breaking bad is like if you say breaking bad in the wire no one is ever going to argue with you um i think succession is probably my number one it's the only one of those shows that i right away went back and why i've watched every season at least twice i think i think it's the perfect show where it has no fluff, five seasons, shorter seasons.

53:04Ben Carlson:I think it just perfected everything that came before them. Like, I've only ever re-watched the finale of Breaking Bad. I don't think I'd really go through and want to re-watch Breaking Bad the series. I don't know if I... That's too much. Maybe the end last season. But Breaking Bad is my favorite show ever. Friday Night Lights and Six Feet Under are way too low. Those should be in the top ten. And I think my one hot take is I loved The Wire. I think it's closer to ten than it is to one. that's my only like take where I diverge from the TV people. I think people automatically pencil in the wire.

53:37Ben Carlson:And if you want the last season where they did the fake serial killer, it just wasn't good. And that's why it fell flat on the end. Six feet under had by far the greatest TV finale of all time. And it's not even close. That's where I land. All right.

53:53Michael Batnick:Notable snubs, walking dead, dark Silicon Valley, Fargo.

53:59Ben Carlson:Dark is a very good show.

54:02Michael Batnick:Season one of Dark is one of my favorite seasons ever. Entourage, I mean, whatever. Yellowstone, Grey's Anatomy, Boardwalk Empire, Sons of Anarchy.

54:10Ben Carlson:Boardwalk Empire is not in the top 100. I really like that show too. That was a very high quality show. Okay. But this is the kind of list you put together just to get the people talking. That's what it did.

54:22Michael Batnick:Who doesn't love a good list? Yeah, I just thought this was kind of funny. I've been talking about watching Friday the 13th movies. so I told Claude, I've watched the first Friday, two Friday, the 30th movies and I'm on the third. They're unwatchable. So it's like, it said, yeah, like they suck. That's the consensus. And then at the end, it said, just bail. Nobody's handing out medals for finishing all 12. But I said, yeah, thank you. I was done after. So I told you, I've seen some of the more recent ones, but the original ones, like I think of Jason as like this big, hulking, Michael Myers type creature, monster that is like impenetrable.

54:56Michael Batnick:But in the first two, it was just like a, like he was like getting beat up almost. It was very bizarre. Horrendous movies. Absolute dog shit.

55:03Ben Carlson:Okay. You mentioned this when it took, you said last week it's taken forever to finish shows. I finished some shows this week. I finished The Agency. How good was season two? That's one of the best, like the last two episodes of that season, like could Fast Bender have been, could he have been a poor man's Jason Bourne? Hell yeah. I don't know what it is about CIA shows and movies. Like I'm watching a ton. I'm watching Slow Horses again, just started The Agency. I'm watching The Patriot on Amazon. I love these CIA shows. And the last two episodes of season two were just cooking. It went to another level for me.

55:35Ben Carlson:And is Fassbender an actual, I don't know if it's sociopath or psychopathic. I always get those two confused. Because when he plays an agent like this, he played a robot in the Prometheus movie. He's been in a couple CIA.

55:48Michael Batnick:And he was weird in the Fincher. Was that a killer?

55:50Ben Carlson:Yeah, he was a serial killer. He was a hired killer. He's so good.

55:56Michael Batnick:Do you still read GQ? Of course. Was he profiled? I feel like he should have.

56:03Ben Carlson:I don't know what I remember.

56:04Michael Batnick:Oh, Brad Pitt was recently profiled by Zach Barron. Did you read that one?

56:09Ben Carlson:He's back on the wagon. He's drinking again. You couldn't give it up. Okay, American Hostage and MGM Plus is based on a true story of a guy. It's about mortgage fraud. A guy takes a hostage because he was getting screwed on his mortgage. John Hamm, it's based on a true story. John Hamm plays a radio interviewer who the hostage taker is communicating with.

56:33Michael Batnick:Hamm's the best. Wait, should I start on the plane? Why did you tell me to wait?

56:36Ben Carlson:I'm saying don't cancel MGM+. That's what I was telling you to wait for because this show is good. It's called American Hostage.

56:42Michael Batnick:No, no, no, no. I cut the cord. I'm not canceling MGM+. Okay, all right, yeah.

56:45Ben Carlson:I don't cancel the streamers. He's had some misses on movies. He doesn't miss on TV. He did Fargo. Maybe Morning Show. But when he does TV, he's very, very good. um also youth on hbo brand new show that came out sharon horgan is the one who was in our show catastrophe that we liked love that show i love her she was in sisters that was pretty good oh hogan or horgan i don't know i thought it was horgan um and it's just a it's just a short 30 minute show on hbo about uh a mom who is divorced and her son is going away to college and she's trying to like find herself and i think i think she's hilarious and i think she's great i love her stuff.

57:24Ben Carlson:Finally, I listened to the Everwear Millionaire. We talked about it a few weeks ago. This is like the finance book of the year. It's so good. It's so well researched. And it's one of those books that it's good for the data nerds. It's good for people who want to be inspired. Because some of the people who started businesses, you go, oh man, that's so inspiring. But it's also kind of maddening how people who are very rich get the biggest tax breaks. So it's got something for everyone. Very, very good book.

57:52Michael Batnick:All right, I will order it. It's called Everywhere Millionaire.

57:55Ben Carlson:Yes, I thoroughly enjoyed it. This is about the Portillo's. It talks about all these people who got rich starting businesses then just figured it out. Yeah, we spoke about an article last week. Great stories. I really enjoyed this. Very good book.

58:07Michael Batnick:All right. We would like rates to stop going up, not for our bonds, but for the stock market.

58:13Ben Carlson:I don't know how much more it could take. I agree with you that there, I don't know what the line in the sand is. If rates keep going up at the pace they've been going up, the stock market has to fall off.

58:20Michael Batnick:There's no line in the sand. I mean, just at some point, people will start f***ing dumping stocks.

58:25Ben Carlson:Yes. But it's another one of those things where if you would have told people, listen, the 10-year is going from 4 % to 5.3 % this year in the first nine months of the year. What's the stock market doing? You'd say the stock market is down 15%, not up 15%. Yeah. Strange times, as always.

58:43Michael Batnick:All right. Looks like we're not going now at 15. I'm getting kicked out. Animal Spirits at the compoundnews.com. personal emails, personal responses. Ben, another...

58:53Ben Carlson:Why don't you text message instinct, hey, buy me 15 more minutes for my hotel room.

58:57Michael Batnick:It's too late for that. Listen, you poo-poo the future, Ben, at your own peril. You will be disrupted, sir.

59:03Ben Carlson:I told you, I've been bullish on personal AI assistance from the start. I just don't know... You don't sound bullish. No, from the very beginning, I said, I want the Scarlett Johansson and her. That's who I want from my... That's all I want from AI, a personal assistant. It's here, dude.

59:17Michael Batnick:It's f***ing here.

59:19Ben Carlson:I know. What do you mean?

59:20Michael Batnick:You don't want it. It's here.

59:21Ben Carlson:But I'm not ready to hand over my life yet. That's the thing.

59:25Michael Batnick:You don't want it. You want what you can't have. You want what you can't give. You're not doing it. It's here.

59:30Ben Carlson:I will. I'm just going to wait. That's all. I'm very bullish. I'm just going to wait. All right. Animal Spirits at the compound news.com. Personal emails, personal responses. Thanks to all the production team as always. See you next time.

59:49Mm-hm. Mm-hm.