Is a 50-Year Mortgage a Good Idea? Animal Spirits 438

Summary

• Market Outlook: Hosts leaned bullish, arguing the AI wave can drive the S&P 500 toward 10,000 over time, with the caveat of potential 20% pullbacks along the way.
• AI Theme: They characterized AI as a bubble that can still get “way stupider,” but potentially productive, funding lasting infrastructure and innovation rather than posing systemic financial risk.
• Megacap Tech: Preference for the MAG 7 over the broader field for the next 3 years, citing dominant earnings power and scale; discussion highlighted AAPL, MSFT, GOOGL, AMZN, META and NVDA.
• Semiconductors/NVDA: NVDA’s unprecedented scale versus entire sectors was emphasized; in a hypothetical choice the hosts favored NVDA over XLF for the next 3 years while acknowledging volatility risks.
• AI Infrastructure: Massive data center buildouts and rising tech capex were framed as beneficiaries of the AI cycle, with the view that infrastructure spend could underpin multi-year growth.
• High Capex: A 2025-angle was highlighted where higher-capex tech cohorts have outperformed, pointing to a near-term tilt toward capex leaders as a tactical opportunity.
• US Equities: Despite negativity narratives, company commentary (JPM, BAC, PNC) showed resilient spending; the hosts argued the market should be presumed “innocent until proven guilty.”
• Robinhood (HOOD): Positive operational momentum noted with record net deposits and margin balances; described as “on fire,” reinforcing interest in retail trading activity.

Transcript

Today's show is brought to you by X-Trackers by DWS. Imagine harnessing the power of global transformation, investing in artificial intelligence, critical technologies, semiconductors, and green energy. With X-Tracker's innovative thematic lineup, you gain access to the ETFs that target these transformative sectors. It's more than investing. It's aligning with the innovations that are shaping tomorrow. Whether you're a seasoned investor or just starting out, X-Trackers makes exploring new opportunities seamless. Find out how at xrackers.com. Together we grow. All investments involve risk, including loss of principle. Information on the fund's investment objectives, risk factors, charges, and expenses can be found in the fund's perspectus at xrackers.com. Read it carefully before investing. Distributed by Alps Distributors, Inc. Welcome [music] to Animal Spirits with Michael and Ben. I was thinking about this during our episode last week, how when we're talking about the AI, is it a bubble, is it not a bubble, will it pop, won't it pop, and we're we're giving we're providing nuance because markets aren't black and white. Of course, I don't know, [music] you don't know. Nobody can see the future. But I was thinking about it from the point of view of the audience. And I think the audience must absolutely hate it because if you're listening to somebody talk about a basketball game, a football game, and they're talking about it like beforehand, well, on the one hand, like Daniel Jones is playing really well, but on the other hand, this defense, blah, blah, who stop just who's going to win? I want to know who's going to win. I'm betting. Tell me who's going to win. And I think when you're consuming content, you want to be able to at least point to somebody and say, "I'm so glad I listened to that guy because he like got me there." or that [ __ ] I can't believe I can't believe it. Like, so people need a scapegoat or somebody to like root for. So, I'll I'll I'll do it, Ben. Okay, hedges off. I think that this AI trend takes the S&P 500 to 10,000. Obviously, not in a straight line. There's the hedge. There will be corrections. I do expect a 20% pullback before we get there. Um, but uh but that's it. And hey, if I'm wrong, I'm sorry. If this is a bubble that pops tomorrow, my bad. I will admit it. I didn't see it. Uh I saw the arguments for it, but I'm on the other side. I think we're going to 10,000. >> All right. I could see you going this way because of our show that we did in Vegas. You were you were getting more bullish the long the further along we went in the show. Um and that's going to be released I think Saturday. Here's the thing, though. There are enough [ __ ] out there who will give you extreme predictions. Most people need a [laughter] Grand Rapids hedge. I think that's what they that's what they come to us for. If if I'm putting probab and I'm a I'm a probabilities guy. I I feel like it's it's rare that you should say always and never in the markets. >> I would lean more towards this thing is going to get way stupider and insane than it would like, oh, this is going to roll over tomorrow. That that'd be my I can't imagine we haven't seen this thing get if it's going to be one of these things and AI is going to be as transformative as people say it is. This has to get crazier. It has to. >> Yeah. You you ain't seen nothing that. I mean, I know this just one stop. What is meta? Is meta flat for the year? Like, >> here's the thing. I think >> What is What is this a bubble for ants? >> I I think you stole that from me. Did you see my tweet? That was a pretty good one. I I said Meta, Amazon, four out of the seven Mag Sevens, I can't remember which ones, are up less than 10% this year. >> Say that one more time. >> Four of the seven Mag Seven stocks are up less than 10% this year. And my comment on Twitter was is this a bubble for ants. I think you have to >> I I might I might have stole it from you. I don't remember the tweet, but it's certainly possible. >> I mean, it's not like it's that original, >> right? >> Here's the thing. I feel like everyone is assuming that the market is guilty until proven innocent. And you have to assume the market is innocent until proven guilty. I think that's the problem mo people have had this whole cycle is assuming that it's guilty until proven innocent. And it's been the opposite. >> Right. And there it's it's so easy. There's so many bubble anecdotes of like come on guys, how do you not see it? Like the Sam Alman stuff last week, right? Like how do you not see that there is some chicannery going on here? And by the way, if there's if there's a bubble that's the bubble, it's open AI. >> Yes, they'd be the main culprit, which is kind of funny because they're not public, whatever. All the public companies are tied to them. >> Okay, so um getting back to what the audience likes and doesn't like. Here's a segue, Ben. This is called the setup, I think. Um, we haven't I don't I think we have a decent idea who's in our audience, but like not really. I think we just say like, "Oh, it's we have advisors, we have like DIYers, we have sort of everyone." All right. We >> have a lot of just normal people, too, that just have jobs outside of finance. >> Yeah. So, we are going to be conducting an audience survey. We would love to hear from you. We will put the link in the show notes. I'm I'm very curious. I don't know. I When's the last time we've done this? It might have been four. I It's been a while. >> It's been a few years. >> It's been a while. So, please, if you can help us out, uh, obviously it's anonymous. We're not going to bother you. We're not selling your data, but >> yeah, if we've ever done anything for you, do this for us. How's that? >> There we go. >> Also, nice sweater today. Good sweater game. >> Thank you. Uh, this is a this is a marine layer sweater. >> I can tell that. >> It's quite comfy. You know what's nice about it? Actually, you know what? Let's do this for a second. So, it's very like warm and soft on the outside, but it doesn't it has different material on the inside, so it's not like sticky. But I am, as you know, Ben, I I am a sweater. I know I'm wearing a sweater, but I mean, I sweat. >> I am one of those people that sweat. >> You glisten. >> I Yeah. And so, I'm very particular about my undershirts. However, I'm not actually even. And this is this is um the ridiculousness of myself. And I know it feels weird to talk about myself in the fourth person, but I am very particular about what I wear underneath my shirts. But guess what? Here's the paradox. I don't have any undershirts. I just wear t-shirts underneath like a complete [ __ ] And I don't know what's taken me so long to find undershirts that actually fit and are the right material don't make me sweat too much cuz there's like a type of there's a few types of fabric that when they touch my skin it's over sweaty immediately. All right. >> Like a breathable thing. >> Okay. So long. What am I talking about here? Uh this must have been an Instagram ad that got me. Tommy John undershirts. Holy moly. my life. I will never not wear a Tommy John undershirt unless something dramatic happens. I'm I'm loading the boat. >> You're like a new guy. New socks, new undershirts, man. >> Well, but these are the things that matter. What took me so long? I'm wearing like I'm wearing like old Gap shirts that are like seven years old as like under and then you could like see the you could see the the the what is this? The neckline. I mean, it's all Tommy John's. >> Awesome. Marine Layer, they owe me some free clothes. You know how many people I've said to Marine Layer because of the stuff I wear on the show to them? Hey, Ben, what sweater are you wearing? Hey, here's a link to Marine Layer. I have a great >> I'm not saying they need to I'm not saying they need to advertise on the show. I'm saying they probably just need to send me some free clothes. That's all. I don't ask for much. All right. I'm ready to go harder than the paint today because I'm sick of the negative narratives. I'm so sick of them. It just it beats me down. Like the negativity. You a couple a couple weeks ago this was you. You said you're sick of the negativity. I am too. Okay. >> Yeah. Take take the baton. On with it, Ben. >> All right. I'm sick of the K-shaped stuff. I'm sick of it. Okay. Let's look Let's look at this. Let's look at the facts. This is from the Wall Street Journal. Feeling great about the economy. You must own stocks. investors rosy feelings about their stock market gains are powering spending, but it's a different story everywhere else. Okay, sure. They show this consumer sentiment and there's like a tiny little difference between the biggest stockholders and all stockholders and non-stockholders. It's like this much. Okay, consumer sentiment is crashing for people who don't own stocks. Okay, fine. They they say like it's a different story for everyone else who doesn't own stocks. I get it. And then they show that the fact that, you know, the top the percentage of people held by the top 20% of earners is 87% of stocks, right? They show this other this guy who this is kind of funny. This guy sold his some of his stocks to buy a Porsche. Remember we had the Porsche conversation. >> Duncan, guess how much he bought his Porsche for? $22,000 for 1999. >> We were saying it's impossible to find a Porsche for around $20,000. It happened. This guy said, "I made a bunch of money stocks. I bought a Porsche." Whatever. Here's the thing. 62% of American households own stocks. This number was way lower in the past. A majority of American households own stocks. Guess what? If people are feeling better because of the stock market, most people own stocks. Okay? >> I'm so I'm so glad to hear you say this. >> Look at the bottom 50% how much they own in stocks. This thing has quadrupled since 2020. The bottom 50%. Okay. Own way more in stocks. Do the top 10% own a lot of stocks? Yeah, they do. Do more people than ever before own stocks? Yes, they do. Peter Teal has this thing. You saw this uh this email that was going around from Peter Teal from 2020? No, >> I feel like this is almost has to be fake, but Peter Thiel sent an email and there's a story about this in the free press. He just sent it to Mark Zuckerberg and Mark Andre and Cheryl Sandberg and here's what he says. Um, I would be the last person to advocate for socialism, but when 70% of millennials say they are pro- socialists, we need to do better than simply dismiss them by saying that they are stupid or entitled or brainwashed. We should try to understand why. And from the perspective of a broken generational compact, there seems to be a pretty straightforward answer today. namely that when one has too much student debt or if housing is too unaffordable, then one will have negative capital for a long time and or find it very hard to start accumulating capital in the form of real estate. And if one has no stake in the capitalist system, then one may well turn against it, which actually like that's a really good point. >> Yeah, >> it's a it's a it's a really good point. Here's the problem with this idea. It's totally vibes based. He's basing this on social media and vibes, [clears throat] not data. If you look at the data, look at this. Genzers, millennials are less likely to own homes than their parents at the same age, but look at how much less they likely are. They're like they're it's a Gen Z is still growing in terms of home ownership at their age at age 27. 33% of gen own a home. For millennials, it was roughly the same. For Gen Z or Gen X and baby boomers, it was a little higher. Okay. It was like 40%. I >> I'm with you. And I love that you're cooking because I'm on the same exact Not only we on the same page, Ben, we're on the same word. Okay. because I saw you put this in the dock and I was about to be like, "Dude, what are you talking about? The gap between these lines is nothing." So, I'm so glad that we're saying the same thing here because I was going to make the same point. However, I do think this particular chart is I I throw this out because we don't two things. Number one, I've said this a million times, nobody compares themselves with a prior generation and feels either better or worse. Like, that's not relevant. What's relevant is that there is an affordability crisis right now for young people. There just is. So, this chart is [ __ ] but keep but keep going. Okay, you you just took the to some of the thunder off of this, but okay, Jenz, >> keep going. >> Okay, on a on a inflationadjusted basis, Gen Z is richer than any other cohort at this this stage of their life. Way richer than millennials, way richer than Gen X, Baby Boomer, Silent Generation, they have way more money on an inflationadjusted basis. The value of equities held by people under 40. You shared this with me a couple weeks ago from Citadel is up 300% since 2020. This is people under 40 own 300% more stocks. Okay. So, my point is yes, there are some bad things and obviously the cost of living, the the student debt thing, the cost of living, the affordability of housing, that has to be weighing on people. But I feel like we're totally brushing aside all these other positives as well. And I think the problem is there, and I've mentioned this before, there's probably greater inequality among young people than there's ever been before. And if you see that there are young people that are doing well and they bought a house and they can afford it and they got a 3% mortgage and you didn't, you are so pissed off. And I totally understand that. But I don't just want to say like everyone is screwed. And I also think to the young people thing. I just have more faith in them than any other. I know people think social media cooked their brains and they'll never be able to own a house and they're going to live in their parents' basement forever. I just don't I don't accept that. This is the most educated techsavvy generation we've ever had. I think they're going to figure it out. >> I totally agree with you, Ben. Um and yes, there is inequality within young people like there is everywhere. We spoke a couple of weeks ago about how Gen Z card holders at American Express are the fastest growing spenders, up 39% year-over-year, make up an increasingly larger percentage of the pie spending. So, I was thinking about this yesterday or or two days ago as Josh and I were at um FedEx [snorts] Field. What a dump. Almost almost almost makes Metife Stadium look habitable. It's not. Those are the two worst stadiums in the NFL. Um, I >> can't believe you guys went to Alliance game without me. >> They look pretty good, right? >> Great, great team. You know, when they stack Leaporta and Amanra and Gibbs is in the backfield, it's just impossible. >> Yeah. They have so many weapons. Yeah. >> And J on the other side. Forget about it. It's not fair. Okay. >> Really fun team to root for. Yeah. >> Yeah. So, about a third maybe of the fans there were from Detroit. like an incredible number to the point that they drowned out the Commanders fans dramatically, like audibly, dramatically. And I said to Josh, "Dude, this is what I'm talking about. You think all of these are like descendants of Henry Ford? These are all mill deck of millionaires that are traveling. Come on. Is is Detroit a coastal elite city? Like, I just don't buy the narratives." And and obviously narratives matter. Think about how much money it costs to to fly to DC, stay in a hotel, go to the game, tailgate, tickets to the game, food at the game. That's a really expensive weekend. >> There was there was 10 to 15,000 people from Detroit there. Um, so so Howard Marx uh wrote recently he waited on on private credit and he said, "One of the most prominent characteristics of the financial markets that I've detected over the years is their tendency to obsess over a single topic at a given point in time. the topic eventually changes to another, but before it does, it's often the thing people want to discuss to the near exclusion of everything else. So, he's talking about private credit, but so of course it is private credit, it is tech, but the other thing, the thing that we're talking about right now is the K-shaped economy. The journalists can't get enough of it. Obviously, it has political ramifications. It's real. It's not made up, but they are pounding it into the pavement. There was an article over the weekend, wealthy travelers are splurging on luxury hotels like never before. So, it's showing the breakdown between cabin and coach and premier and like we I didn't I'm I'm over it. I'm not reading the article. I get it. Rich people are are winning, >> right? And when have rich people not won, though? When is that ever been the case that rich people haven't been the winners in society, >> right? But I think I think it's having really gnarly effects on how we perceive everything because things are fine. And I'm not I know broken broken broken arrow here again. I'm not m [laughter] we're not minimizing the challenges that the bottom 10% have. But when you look at the data, um so we're basically done with earnings season. And okay, >> but here's the thing. Here's the thing about the consumerism aspect of materialism. This is why social media is so bad for us because there we're seeing stuff where we weren't supposed to see. And you you I think everyone the hard part for a lot of people is there are so many luxuries that turned into necessities now. That's what makes life so much more expensive. It's not just student debt and housing. It's phones and internet and travel and >> Door Dash >> all this stuff that people didn't have in the past that you think like if I don't have this, I'm not I'm never going to get ahead or I'm not going to be living my best life. And so you it's just it's more expensive to live the way we live today. >> That's right. Life was already ridiculously expensive in 2019 for most people and then you got the inflation. So yes, a lot of things are totally effed for sure. Like no doubt, no doubt, no doubt. But we heard from earnings earnings uh we heard from companies and they said economic this from Bloomberg. Economic slowdown mentions are the lowest since 2007 on earnings calls. >> Oh, from companies >> lowest since 2007. Here's a few quotes that we pulled from the transcript. Those guys do great work. We mentioned them a bunch. Okay, this is from uh the head of retail banking at PNC Financial Services. We were just looking at this sort of deep dive on the October numbers. Okay, October spending is robust and while it's a little bit stronger at the upper end, it's still actually hanging in there among lower-end customers. So that's been frankly given all the turbulence perhaps a little bit surprising even with the government shutdown. All right, Bank of America, I just got the October data and the money movement uh to spending by these consumers was up 6% versus last October. Employment remains steady. We can see that in the paychecks coming into our customer accounts. That's Bank of America. Lastly, JP Morgan Chase. Um, when we were looking at spend trends after a relatively softer, although still pretty solid, second quarter, we've seen strengthening both in confidence. Um, and that does continue into the fourth quarter. So, this is, and I'm again, I'm not minimizing how people feel. People are upset. It's in the political data. I get it. But things are things are okayish. >> So the thing that Steve Eisman said when he talked to you and Josh about how the government spending and debt is just virtue signaling. I think there's a lot of that that goes on too. People >> 100%. People with money talking about how the bottom 10% can't afford anything. It's like dude, why do you care? >> Well, it's it's it's a and again it's not like we don't care, but like the I I guess the the point is that I don't think that this inequality thing is ever going to get better. >> No. I we're we're just we're fighting back back against the narrative. >> Yes. >> That only the rich people who own stocks, which as you mentioned is 62%. Only the rich people are doing okay, and everybody else is dying. >> We're trying to look at this more realistic. >> Yeah. Come on. It's We're not It's not black or white. It's It's somewhere closer to the middle. >> You're right. You go to a concert with 30,000 people in a stadium. >> Is everyone there in the top 5%? >> Everyone. >> All right, let's move on. Okay, >> let's talk about the big tech stocks. We haven't talked about them yet. >> Yeah, seriously. Um, they're not getting enough love on this episode. All right, here's a chart from uh Ned Davis Research. The MAG 7 is now larger than energy, materials, consumer staples, healthcare, financials, utilities, and real estate >> combin combined. [laughter] >> Pretty remarkable. But again, given given the breakdown of all of the product lines at Apple that we spoke about last week, and you could do the same thing with Microsoft, you could break up Google, you could do the same thing with uh with Amazon. They are earning as much money as the rest of the sectors combined. I don't have that data. I'm just saying like it's not it's I'm going to guess it's about even and guess what? They're growing 20% a year. So even though this type of chart can break one's brain when you look at the underlying reasons uh max 7 earnings are up threefold this from Uranian Timmer over the last three years their earnings are have tripled and the share price has quadrupled which is exactly what you would expect by the way earnings have quadrupled. >> So these numbers are these numbers these numbers are kind of insane to me. So uh healthcare is $5.2 trillion. Okay. Nvidia is essentially the same size as the healthcare sector. Financials is 7.5 trillion now. So Nvidia, we're not it's Nvidia is like a one good earnings day away from being as big as a financial sector. Holy smokes. It makes sense. It also hurts your brain to think about it. >> Okay. Yes, it does. And also, what would you rather own for the next three years? XLF or Nvidia? [laughter] [sighs] Uh now what would you rather own for the next 20 years? Maybe that's a different question. All right, we have that. This is a good thing like uh the Mag 7 versus this field here over the next five years. What do you got? >> Over the next three, I take the Mag 7. >> Yeah. If you said the next five to seven, you might >> over the next five to seven, I think I'd go the other way. >> All right. We had a bunch of people chime in on can Meta or Nvidia fall 20 to 30% in a day. >> I push back against 30. I PUSH BACK AGAINST 30. If you if you said 20, dude, I would not have made a stink. >> I said 20 to 30 in that range. >> That's a huge range. That's a huge range. >> What What does the data show? Show me. Tell me what the data shows. >> Okay, so the the two worst drops for Meta over the last 5 years, it fell 26% one day, it fell 25% another day. Now, mind you, that's when at the the 25% fall, Ben, the market cap is $280 billion. You're crossing your arms like you just >> I'm like Leonardo DiCaprio with a cigarette and um >> No, but that's not First of all, that's that's not 30. >> Okay, so my kids in math class were learning about rounding up recently. If you have 26 and 25, what do you round up to? >> We're not rounding up. This is not a round up exercise. But also, but also but but they did that. They did that when the company was a third of the size. >> So I look the worst day for Nvidia. I look just in the 2020s for Nvidia was negative 18.5%. that in the 2020 >> because I'm just saying 30 is like an accounting scandal type of fall. >> But it happens to individual stocks all the time. All the time. >> Trump get mad on this. Like how often do individual stocks fall 30%. >> Not it's not all the time, dude. It's rare. I bet you it happens three times a year. I I'm making that number up obviously. >> Oh, way more than that. On a single day >> for for an S&P 500 stock or let's just say a mega cap stock. No, maybe I'm moving the gold bus, but these are mega cap stocks that we're talking about. >> I'm thinking like Russell 1000. I feel I bet it's dozens in a year fall 30. >> Yeah, I'm sure. Listen, if you're if you're if you're a seven billion dollar company and you you overnight your I'm sure that happens all the time. Um, >> okay. So, wait, you've you wanted people to pound the table on the bubble thing and say yes or no. Ben Thompson attempt. And I think it's great because I feel like a lot of the people in tech don't want to say that it's a bubble. They want to tiptoe around it. He's saying yes. And he wrote but he wrote about the benefits of bubbles. And so it's funny he said we've been like tip we've been people have been trying to say this is remember Mark Cuban I remember this one in 2015 said techn is a bubble. I don't know why that one sticks out to me in my head in CNBC. People have been saying this forever but he's saying no no no this is obvious right now. We this is a bubble and he's saying the question is are the benefits of the bubble going to be worth it? Right? all this money we're pumping in on the other side, do we get this AI infrastructure buildout? That's the question. >> Well, and a big part of that is some of the bubbles that lead to good, healthy things for society. Like they're not all bubbles aren't bad, I think was the point of the post, but specifically debtfueled bubbles like what led to the GFC is a is an catastrophic crisis of epic proportions, >> right? It's possible that the that we get the bursting of a bubble and so long as it doesn't bring down the financial system with ownerous debt and obviously that's a bigger part of the conversation then maybe we get out of the other side. Okay. >> But I mean that's that's like the good part about this is the banks aren't in really I mean you could say well private credit and but this is not like a financial crisis level thing. This is this is yeah stocks could fall a lot but I don't know. I still don't think that this is like a nuclear level event. if and when this thing blows up. >> Okay. I hope not. You know, I was thinking about this like looking back at history because I'm saying like what would what would need to happen to prove this was a bubble? And I feel like once you once you start talking about fra like losses in fractions, then you know it's bad. So, for example, yes, >> like like the NASDAQ lost a third of its value. That's a serious that's a serious decline. I don't care if it takes you back to 2023. Like that hurts. A third. Imagine your account. Just close your eyes and picture the value of your account falling by a third. That sucks. >> Yeah. >> Um, all right. So, so, uh, Derek Thompson had a great conversation with a railroad historian. By the way, Ben and I are recording with Derek this afternoon talking about are young people screwed. So, I think that'll be out uh, this week. All right. I feel like we never really talk about this because it's not like the most exciting topic but in terms of the advantages that we have in this country like oh it's our it's our DNA it's our go-getter attitude and like yeah that is all part of it but simply this so this guy's I forget I apolog I forget his name he said by the end of the 19th century you have a regulated infrastructure that moves across a continent that brings a great American advantage into play and here's the part that I'm talking about the great American advantage which we have over competing economies is an incredible wealth of resources. We did nothing to create those resources, but we literally have with oil and copper, with agriculture and soil. Once the railroads can move these things effectively, we had advantages that nobody else in the world could match just our natural resources. >> Yes. >> Is second to none. >> If you were to build a country from scratch, the U you would have mo 90% of it is the US, right? We have the coasts on the side to protect us. We have vast resources. Uh all the we have fresh water. We have all these things that are like natural built-in advantages other countries would kill for. >> Yeah. It's funny. We talk about like our our culture as the exceptionalism and obviously it's an offshoot of this, but it's really our just the land, >> right? >> Um all right. So getting back to one one big difference between because I studied the railroad bubble too and I wrote about it in one of my books. >> The biggest difference between that and because people have been making this this comparison is that there was so much fraud going on back then. It was that was literally a pump and dump scheme. All of those companies were being pumped and dump tra insider trading. There was no rules back then. So it was all insider trading and dumping stuff off on the public. And so obvious so that that kind of thing isn't happening as much now. There was a lot of that happening in the 20s, too, cuz the SEC didn't wasn't around yet. So, if you want to make historical comparisons, that's important to note that a lot of this stuff was just the wild wild west back then. And obviously, there's stuff going on with spaxs these days that is not completely doesn't seem to be above board, even though it is kind of >> but but not like this. >> Not like just outright outright fraud. So, last week Josh and I were talking to Eric Jackson about how it was the week that the world learned who Sam Alman was. Open AI has been in the background. all of these announcements sending stock prices soaring. I think it started with Oracle maybe. Was that like the first gigantic holy [ __ ] announcement, >> right? >> And he was on Brad Gersonner's podcast and then the CFO said a few things that that didn't land well and everybody was like whoa whoa whoa whoa. >> Yeah. She the CFO made a comment that said like the government might have to backs stop the financing of data centers. And then she immediately went on LinkedIn and said actually I'm backtracking that but when they said that stuff people pounced. And I say OpenAI and Sam Alman, they are going to be the next tech villains. People are going there are going to be a lot of people who completely hate this company. Politicians are going to jump on this because here's the the narrative is so easy to build. >> Oh yeah. >> Wait, wait. This company is enriching themselves and they're helping people lose jobs. Are you kidding me? Like they are going Sam Olen is going to be a villain >> to a big group of people. >> Yes. Yes. And Yeah. So whether that's right or wrong, >> he's he's like, "I can't I can't wait to go public so we could kill our short sellers." And it's like, "Dude, what are you talking about?" Like, "Huh?" So anyway, um so this this historian said to Derek, "Transformative technologies are built by people who never underpromise. They always overestimate the beneficial consequences of what they're doing in the short term and underestimate the costs of what they're doing." Um he said second the people who hype these technologies the people who control the companies that are seeking to master these technologies very often do not understand the technologies themselves they they can overpromise because literally they know what they want to promise to get financing and to get money and to get profits. All right so obviously that's happening. Skipping al along to the third thing he said these technologies virtually always become bubbles because they take on this belief that if you're going to change the world if this is the secret to changing the world everybody should get in on this. The railroads the railroads were the American stock market and the American financial market in the late 19th century. That's where the money went. All right. But you know what you know what's um different about this one than that one? when he said like everybody should get in on it like they did in the late 90s like they did in the railroads. You can't it's not everybody can't get in on this. It's too expensive. These data set just cost 20 what $50 billion. Like it's not everybody getting in on it. It's it's the Mag Seven names. And who would you better trust to handle the future of our capitalist society than these companies >> in terms of at least growing profits and cash flows, right? I [laughter] I don't have a lot of trust in the common sense of our tech leaders. I don't think that they're going to be like looking out for humanity. But if you're a shareholder, then who would you better trust? Them for sure. >> But but but look who's running um Microsoft and um and Meta and Google. Like these are very accomplished people that have steered their companies in incredibly well. Plus, let's be honest. A lot of these people are like >> psychopath or sociopaths. You've read the book, The Wisdom of Psychopaths. And how many people I don't know, I think it's like 5% of all CEOs or something are literal like sociopaths or like and I'm saying this in a in a I guess a positive and a negative way. Like nothing is going to get in their way to stop this, right? >> No, I don't think so. All right. So, this next segment is brought to you by Pimco. I grabbed this chart from their advisor playbook. You can check them out over there. We'll link to this in the show notes. Obviously, there's all sorts of great resources for advisors from one of the large world's largest fixed income managers. So, check this out. They show today's cutting cycle in historical context and they show where we are today, months into the cutting cycle, number of cuts, or I'm sorry, the effective what does that say? The effective Fed fund rate change. And if you compare this to prior episodes, we're nowhere. And so we've done this. We've done what they or we these companies have built this starting in what was the middle or tail end of a hiking cycle in terms of investor enthusiasm and liquidity and we haven't even begun to see the impacts of Fed easing and what that might mean to asset prices. >> Right. So looking at it's kind of interesting that like the 1984 was so it took so long to get down. Um but yeah there so there's a lot of dry powder here for the Fed to cut further if things should deteriorate. I but I actually think that if if this thing just stays pretty pl if it plateaus that's probably better news than all of a sudden rates falling off of a cliff. I think that portends much worse news and overreaction function of this the economy is worse than people realize. >> Right. So if if Fed funds settle at 3%. And let's assume that there's no emergency cuts because the economy is tanking. Does that support or not support higher prices? >> Well, look at the look at the the two lowest cycles that they ever got is 2007 and 2000. So it's funny. We we think that like high rates are going to be here forever now. Just like low rates were going to be here before. Like you really think 0% rates aren't coming back if we have a recession? I don't think so. [laughter] >> I don't I I'm sorry, man. I I would not take that off the table. If we go into recession, >> zero. >> Here's the thing. So, in the next three years, I said this to you and Josh the other day. They Trump is already promising $2,000 tariff checks, I guess, which I don't >> I think I think it was I think it's credits against their people's tax. >> Okay. Whatever. It's I don't know if it's actually going to happen. Maybe it's just a promise. But if we get a recession in the next 3 years, do you think he's not going to just shoot bazookas everywhere of money and lower rates? And I mean, >> I would I would hope that Congress has learned their lesson. >> The lesson is if you throw money at a recession, it's it turns around pretty quick. And I think >> No, no, no. Yeah. But hopefully the the lesson should be No, no, no. throwing money at the economy kills kills everything because inflation is is worse than recessions as Josh wrote over the weekend. >> But I think once you're in a rec we haven't had a recession in a long time and I think once I think the overreaction function will be really interesting to see because I just think listen whether you agree with this or not. We've kind of figured out like there's going to be ton of unintended consequences but you really think he's just going to let the economy slow and not throw a bunch of money at it? Well, I mean I mean listen, of course, >> I think any this is my baseline. You wanted me to stop grandparents hedging. Any recession we get will be very shortlived because they're going to throw everything they can at it. >> Whoever is in office is incentivized obviously to do whatever they can to mute the damages caused by recessions. And are these people is this economy is the society better equipped to do that than we were 100 years ago? Yeah, obviously. So, yeah, the market is rigged. >> Yes, it is in >> a good in a good way. Thank God. >> And and there there are going to be ton of un unintended consequences because of this. But you have to live in the reality that this is this is probably the world we live in now where you're if a recession happens, there's going to be a boatload of money thrown at it. >> There always is. >> Act accordingly >> recently. >> All right. Um this is interesting from the FT. Uh capex spending is on course outpaces cash returns to shareholders now. So they show buybacks, dividends, and then net net operate cash flow. Um, and the capex number is close to buybacks and dividends now, which is pretty wild. And I guess it's always been closer than you think. >> Yeah, this I would like to see the spread of this chart because it so what, >> right? But so this is interesting. So you mentioned earnings. US companies are reporting the strongest earnings growth since 2021. So companies are still making plenty of money, right? Profits in uh Chart Kid Mad had this this chart. This is really >> but it it is it is but this is also part of the thing like not to not to rehash what we just spoke about for the first 20 minutes of the show but I would I think it's fair to say that corporations are out uh are out thriving for lack of a better word consumers. >> Oh, of course >> corporations are doing better than consumers. >> Yes, corporations have weathered this this decade better than anyone. >> Yeah. >> Right. >> And will continue to do so at the consumer's expense if necessary. So imagine not wanting to take part in the stock market. This is why 60 whatever percent of 62% of households are in the stock market because good luck fighting these corporations that all they do is want to make profits. So Chartmat who has his own blog now called chartkidmatt.com looked at the returns of tech stocks based on higher or lower capex spending. And this is pretty wild. I don't know I don't know. I'm sure there's some way you could poke holes in this but basically the higher your capex spend the higher your returns. The lower your capex spend. And the the spread is huge. It's like >> wait this there's no holes to poke this these this is merely the data. I think it's what what's interesting about this data is that we spoke about Kai's about Kai's post from a couple of weeks ago who looked at historically high capex companies do not deliver great returns for investors. Now that is historically true and I'm not saying that it won't hold true for the next 5 years right like maybe maybe higher capex leads to lower returns going forward. I wouldn't bet against that. >> This is another this is another one that this time is different. >> Well, no. Well, just just for 2025, it's different. I'm not saying that these companies now that they are ramping up their spending are going to continue to outperform, but in 2025, I mean, we know this obviously this is very no [ __ ] but it's very cool that Matt was able to show this. So, companies that are spending more, so Matt broke it down. He he gave us the names. So, the companies in the quintile 5 that are spending the most, it's Intel, Oracle, First Solar. Huh. Okay. Uh, Akimi, Microsoft, Crowdstrike, companies like that. >> I forgot Dell is a public company again. That's in there, too. >> And on the bottom end, all the way on the other side are a bunch of companies that frankly I don't even know who these companies are. >> Adobe's in there. >> I know. F5. Is that into it? Adobe. Yeah. Palanteer. Interesting. Okay. Uh, FICO. Whatever. Doesn't matter. The point is, we know what the point is. It's enough already. We know. And if you have if you're an adviser and you haven't checked out exhibit A exhibit A foradvice.com Matt's doing wonderful things there chart blast charts of the week check it out. >> Yeah. Yeah. You damn right he is. Every week it's not just it's not just a library of stale charts that update every day. Every week we are doing a chart of the week that is obviously topical for you to share with your with your clients and and prospects and all that good stuff. So check us out there. You have a free 7-day trial. So check it out. Um, okay. S tax new monthly report. >> Can't call it stacks, can you? >> I just I won't do it. All right. This was surprising from an age perspective. The most aggressively positioned investors tracked by Schwab during October belong to Gen X. The least aggressive was Gen Z. >> That's huh. It does show that you can because Gen X when they were coming up and their they were just coming up they Gen X lived in their formative years in the lost decade, right? I've heard that's the that's the also the lost generation, but I heard from a lot of people say I remember one person in particular told me I started my job in 1999 by 2011 every single dollar I put in my 401k it was it was worth the same as I put in. So I put $100,000 in my account value was $100,000. I saved for 12 years and I went nowhere and I I all I told him was just wait because now all of those purchases over 12 years and went nowhere. I'm sure they're they're So if if they stayed in and they figured it out, they did wonderfully. >> Mhm. >> That's as a young person that's one of the better things that could happen to you. >> Yeah. Yeah. I mean a lost decade comes with obviously all sorts of like you don't get lost decades in good times, right? So on the one hand, you should pray for loss. >> You should pray for lower prices, but obviously it comes with all sorts of gnarly side effects. So maybe maybe not. All right. Um, young people are twice as likely to be unemployed. There's a lot of this talk coming on, right? Uh, okay. So chart Kid made me a chart showing the unemployment rate for young workers. So this is the group of that's 22 to 27. Then he compared it with all workers and the spread right now is 3.4. 4%. Guess what the average is since 1990? 3.8%. It's lower than normal. And from 2009 to 2014, when it was really hard to get a job for young people, the average spread between the two groups was 5.4%. So, I'm not saying that young people have never had it better. But this idea that they're like that it's unfair now and that they're screwed, like, give me a break. >> Haven't young that's that's my point. Haven't young people always had it hard? Has there ever been a time where it's been easy? >> It's always been hard to be young. Of course. Of course. All right. This is great. This is h this made me so happy. This narrative nonsense. >> Um, so all of these fast casual companies, they're all getting killed. >> Hang on. I had something about that, too. Uh, let me here. Keep talking. I'm gonna put it up there. >> Okay. Cava, Sweet Green, Chipotle, they're all their stocks are getting killed. Which, by the way, these were expensive stocks, so that's part of the story. And then the growth has slowed because of a lot of things. People aren't in the office as much, but people are like, I'm just not eating this anymore. It's just it's too expensive. So, all right, Ben, you're going to love this. >> Okay, >> so they so Chipotle and Cava both in the opening of their call mentioned the strongest of young people in their in their preackaged written response. Okay. So, an analyst said, "Brett, you mentioned younger guests in the prepared comments." And I don't know if that was a broader statement of the industry or if you're seeing something in particular with younger cohorts. So, Ben, listen to this answer. This is this made me so happy reading this. Yeah, Sharon, for us, uh, we're a bit idiosyncratic and that our costs accelerated in the back half of last year when many industry comps were decelerating. Oh, really? So, maybe there's actual business stuff specific to you guys that's driving your results. All right, that's part one. Here's part two. So, we're lapping tougher hurdles when most are having easier comps. So, we don't want to overstate the challenges of the consumer. Then why did you lead with that in your prepared remarks? [snorts] >> It's so easy to latch on to these narratives and blame that when really there are idiosyncratic things going on in your business. >> So, here I have a theory. So, you I looked at this. So, Cava is down. Let's let's do a fraction. Cabba is down 2/3. It's down 67%. Door Dash is down almost 30%. Chipotle is down 55%. Cheesecake Factory is down 30%. And Sweet Green is down 87%. So these restaurant stocks are getting killed. Is it just as simple as And I know, like you said, there's each of them has their own thing going on. Did they just raise their prices too much? Did people go, "Why would I do a fast casual when I can go to the brewery down the street and get a beer and a burger and it costs almost the same thing?" Like why would I pay for I I think they just raised their prices too much. Is it that simple? >> Yeah, that's what happened to Starbucks. It's the same thing at McDonald's, >> right? >> People People just People just got fed up. It's too much. Then they changed their habits. >> Yes, exactly. All right, let's talk about 50-year mortgages real quick. Um the housing guy, what's his name? Bill Py said, "We're working on a 50-year mortgage. It's a gamecher." Um people on social media went nuts about this thing. I think pretty much everyone hates it. I tell you what, I don't really hate it as much as most people. >> Well, yeah. I was about to say, could tell me where the hate comes from. I want to understand >> because you it it only lowers your payment a little and you basically don't build any equity. Like it's it's almost impossible. I say the positive is it is like listen, I just want to I want to fight inflation and I want to have my payment be set. So, I'm take a 50-year mortgage. I'm going to move in 12 years anyway, 10 years, 8 years, whatever it is. I'm just I'm not going to build any equity, but I have I have it as an inflation hedge. So from that perspective, I kind of think like, oh, this makes sense. I just think >> do do people think that that do people hate it because they think that that's going to only juice prices even more? >> Yeah. People think, well, that means housing prices will just adjust higher, which I don't necessarily >> think I don't necessarily agree with that for sure. I think that the majority of home buyers um in a normalized interest rate environment, now home prices today are ridiculous, but I'm just saying all else equal. Most people would not choose the 50-year mortgage because guess what? You're not to your point, you're not building any equity. It's all interest. So, I wouldn't choose a 50-year. I don't think most people would. But for people that are struggling to get into a home, yeah, the 50-year, I I I don't think it's the worst option in the world. >> I think if but if we're going to be if we're throwing ideas against the wall here, why don't we just give everyone under 40, if they haven't gotten one yet, a onetime 3% mortgage if if they miss a vote in 2020. >> Now, listen, would that would that juice prices? Probably. But it's like if if we're throwing ideas against the wall, and obviously the the obvious one is, well, why don't we just build more housing? That's that's the simple like solution. But obviously for for whatever reason it's too hard to do or we don't want to do it. So we're just going to throw ideas against the wall. >> I am very much for in favor of relief, home buyer relief for young people. I think this is one of the this is probably the singular biggest issue in our economy right now. >> Yeah, I am too. I'm fine. And people say it's not fair. I don't So what isn't fair? >> So what? So I I don't know what the solution is. I don't know what the unintended consequences are. I'm not like a housing policy wonk, but we got to do something. >> Well, listen to this. The share of this is from N. The share of first-time home buyers dropped to a record low of 21%. While the typical age of first- time home buyers climbed to an all-time high of 40 years. Um, and this is the biggest cohort right now. Remember, we said last week it's 33 to 37 is the biggest age group in the country right now. Um, yeah, this is us trying to have like some sympathy here. Uh, I agree. Like some people are going to say, why do they I never got help when I came up. So what? You didn't deal with housing prices that rose 50% and mortgage rates that doubled either. >> Yeah. No, I'm I'm I'm for this. I forgot to mention this last week. Um Matt Lavine wrote about Brian Armstrong, who is the CEO of Coinbase. Um Oh, >> by the way, I tried I tried to watch the new Superman and I couldn't do it. Brian Armstrong would make a great le Lex Luthther. >> Yeah, the new Superman was okay. It was watchable. >> Way better than Fantastic 4. My kids actually liked Fantastic 4. They uh they got into it. But do they have good taste in movies? No. >> Yeah. What? Kids like everything. >> It's true. I I just I I made it 10 minutes into Superman. I turned it off. I I just I don't care >> the the superhero stuff. I I just I just don't care about >> All right. But But But wait, hold on. You just said it. That's a you thing that you can't watch. >> Yeah, but a lot of people don't care about superhero movies anymore. Like, oh, you're going to destroy the world and this this big bad being is going to come and >> But you were But you but you were never a Marvel guy. No, I I like >> Did you Did you ever Did you ever see like Avengers Endgame? >> Yeah, I watched it. It was okay. I I mean, but I when the guy snapped his fingers and everyone died, I knew the next movie was just going to be them turning time. >> You know what you you know what movie you want to see? You want to see Thanos in middle school like awkwardly getting into puberty and realizing that like he actually does have something to offer to the world. Like that's >> No, I would like there to be some actual stakes. There's no stakes in these movies. Like anything that happens can be reversed. And so like this person died, let's just snap our fingers and come back to life. Like there's no stakes in those movies. So like why should I care what happens? >> Fair enough. Okay. So Matt Lavine, the main point I want to make here is that this is all so dumb and I hate it. [laughter] >> Cali, >> talking about what? >> I'm about to read it. Khi, a commodities futures exchange registered with the US Commodity Futures Trading Commission, offers contracts on various unconventional commodities like election outcomes and football games. Last month, you could buy futures contracts on commodities like a Coinbase Global Inc. representative saying the words prediction market or Bitcoin or web 3 on its third earnings third quarter earnings call. Why? I don't know. To hedge your risk that Coinbase wouldn't say those words [laughter] to help people understand and price the future states of the world in which Coinbase did or didn't say those words because you were bored and like to gamble. Probably. All right. So, um, the earnings call happened at 5:30 p.m. on Thursday. Uh, and here is the transcript that Brian Armstrong said at the end of the call. Did you hear this, Ben? >> I Okay, I know what you're talking about now. >> Okay. >> Yeah. >> Here's a quote from Brian Armstrong. I hope we answered your question on that. I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call. And I just want to add here the words Bitcoin, Ethereum, blockchain, staking, and web 3 to make sure we get those in before the end of the call. End quote. Dude, bro and dude, come on. >> Yeah, not great. I mean, does it is anyone really being harmed by this or helped? I don't know. But it's Why do we Why is this >> But just But just why? Like, just who does this help? >> I agree. Aren't you trying to be the adult in the room and push the crypto industry forward and you're like literally doing this? >> It's like this is the LOL, nothing matters, right? >> Right. Yeah. It's just Come on. Do we need to make people more cynical? >> All right. I'm starting to backtrack a little on the housing market. Like I thought I was almost positive that during the next recession, we're going to get like a housing boom. Like the recess the housing market goes into recession first, comes out of it first. Maybe that still happens, but I I don't know if the animal spirits are going to be harmed here. So, this is from Wall Street Journal. A bunch of people sent us this. Builders are offering mortgage rate discounts. Home buyers aren't biting. Okay. >> America's biggest builders are struggling to sell homes even when they offer buyers a 4% mortgage. Their experience suggests that rate cuts alone won't be enough to boost week sales in a wider housing market. Um, so you can see the number of completed unsold homes is rising very fast. Dr. Horton, which builds roughly one in every seven homes in the US and has its own financing arm, is offering 3.99% mortgages to buyers. That's a pretty darn good deal. >> Yeah. The company has also knocked off 3% of its average selling price in the past 12 months. Um, and it's not working. It's not helping. >> Somebody emailed us and they were like, "Guys, it's not just the price of the home with the down payment and of course the mortgage, which is ridiculous. It's also like insurance and all of the other costs. It's everything. So, it's not just the mortgage rate." >> Um, >> so does does this mean that housing prices have to fall to like create a better equilibrium? Are we just going to have no housing activities? >> But but they're not falling. >> Yeah, they're they're in some places. Texas and Florida. They're falling. >> True. True. I I I uh I could be wrong. Um I still do believe that at some point there is a rate I don't know where the line is at which it's going to be like uh the spark that lights the fire. But maybe not. Maybe maybe home prices need to come down. >> Here's the thing. I if I'm in the market though, I'm I'm buying a new house over an existing home. buying a new house is is such a great deal because like you're you're just all the maintenance for for like the first 10 years you're washing your hands of it. So if there's if and they were saying listen part of the problem with new homes is that if they're not in very desirable areas some sometimes because there's no place to build them in the in the best area. So sometimes you have to like go further away to get a new home. >> All right, Ben, can I can I can we do an ask a compound style question? I'll be Duncan. >> Okay, let's do it. >> Okay. My wife and I are in our early 50s, two teenage kids. My wife is a part-time teacher planning to retire in four to five years. Um, I made a career switch two years ago to pursue my passion, knowing that I would never knowing that I would be bringing home significantly less income in the short term and potentially not recovering the difference. Okay. Our household income prior to my career switch was 180K. You taking notes? >> It's up here. We do not have a mortgage on our primary residence, $1.3 million. We have three rental properties valued at a combined $2.2 million. >> Nice not to brag here. Okay. >> We have we have retirement accounts combined total estimated at $2.3 million and a brokerage account cash assets combined at $ 1.5. All right. So, these people are financially good. >> Yeah. >> Like they they are in a very healthy very healthy spot. making their career jump created a short shortfall between our expenses and our income. Yes, we could cover the difference by tapping into our cash or pulling back some of my wife's pre-tax allocation to retirement account. Two years ago, we decided to pay off the debt to pay off the only debt we had, which was a 2.625% mortgage, uh-oh, on one rental property with 10 years remaining on the loan and a loan balance of $130,000. The monthly mortgage payment was $1,200. Prior to paying off the mortgage, we were net positive about $6,000 per year on this property. Okay. I mean, this is this is all the right things. Do I even need to read the rest? Like, do do you still have any issue with this, Ben? Well, here he says, um, in my mind, we took $130,000 and are getting an 11% return for the next 10 years. Maybe this is distorting thinking, but at the end of the day, we're still getting $14,400 more in income for the next 10 years. No. Love to hear your take, especially Ben. Um, I feel like people twist their their their brains in pretzels for this stuff. So they took they they have a shortfall in income. They need the income, right? They decided, well, if we pay off the mortgage early, then we'll have the lower monthly payment. So then that can be a form of income. What if you just kept the $130,000? >> But people like the income. I know. I know. I know. >> Use the cash the cash if if you have especially have a shortfall in income, you're you're trading that cash now for future monthly payments that aren't going to happen in way off into the future. time value of money says you're better off keeping that $130,000 just in cash. >> You're right. And the flexibility of it all. But I think what I think what we keep learning over and over and over and is that the psychological component of the money on a monthly basis matters so much more than what's sitting in the bank in the bank. The psychological goodbye debt, >> right? And I I've I've already come I know that I'm never changing anyone's mind about this, but >> yeah, >> he twisted his brain into a pretzel here. He could have just I think that I would be more like emphatic and like taking the person by the shoulders and shaking them like in Billy Madison or the cheeks. I guess in that case if you are if you if if you are not in this person's position where they have the >> portfolio they're going to be fine either way. >> Yeah. But if you're talking about somebody who's like listen who's like I have I have I have $30,000 in savings and it's like no no no you are making the wrong decision and it's going to impact your life, >> right? >> Obviously that's not this. >> Okay. I want to talk about real quick about some of the stuff we saw in Vegas. >> Yeah. >> And the jux justosition between what we're hearing from Robin Hood. So Vlad said prediction markets are really on fire. Uh it's hard to believe we launched this year just about a year ago and we've doubled volume every quarter since then. That's crazy. People really love gambling that much. I mean predicting that much. >> I know. And is it just so you can say you were right? I know the money is part of it, but here's what I told you. Rob, like walking around Vegas and seeing all the debauchery there, Robin Hood should have a bucket shop in Vegas. You should be able to go in there and trade penny stocks on like 50 times margin and like there should be a Robin Hood bucket shop in Vegas. We were walk and I'm I'm almost I'm almost like if we're going to do this, let's just do it. Everyone's going to be degenerate, but you and I were walking around the MGM Grand and they had this this enclosed space with all these people and they were it was these people talking to cameras and they were they were dealing and they were dealing card games and they were doing roulette and they were doing I don't know all these other games and they're talking glass >> in the glass box talking it was there was 12 games going on and it was people on the internet playing these games live. >> So you you're on a camera and the dealer's on a camera and you're playing against them. No offense, but I I would have loved to see who's on the other side of the camera. >> So, that's just that's massive. See, because one of the that's just such a degenerate move because one of the great things about going to the casino is that you get the the smell of the place. You get all the noises around you when you're playing blackjack. It's not you're not just there to play the cards and win the money or lose the money. You're there to be with other people and you're >> experience. >> Yes. that if you have a if you have a good blackjack table and you're with your friends and people are yelling and I love it when you have a 16 and you hit and you get a five and everyone goes good hit good hit and if you if you you know you tap the tap the table because someone got an ace like for good luck and like that's the part it's the camaraderie of it. It's not just the the straight cards and we're Anyway, um I do have one thing uh I I wanted to go over I always do this for people you see in an airplane, people you see at a resort. I have people you see at Vegas and a lot of this is colored by what we saw. But so there's always the one old guy at the blackjack table complaining. We had this guy, right? Like I I'm playing it right. I can't believe it. When I I played a little bit after you left and I had a guy he was he literally had the card, you know, the card that says when you should hit, when you should stay, when you should split, and he's falling into a te. So he's playing the right way and he he keeps losing and he he's getting madder and matter and he points to me. He goes, "Why is he winning and I'm losing to the dealer?" Like, "Sorry, sometimes it's just random." Um, there's the one guy who drops 8 to10,000 on a on a card table and doesn't blink. Just playing massive hands, money's gone, just >> it just get just gets up and leave. >> Yeah. Um, there's always a group of dudes who are inappropriately drunk at like weird times, right? We saw like five dudes walking through on our way to dinner and they had a they had a case of Pap's Blue Ribbon on them and they were annihilated and it was like 4:00 in the afternoon. >> Wait, the the beer the beers fell out of the case. >> Beers are falling out. Um, there's always one lady, like a group of ladies there for a bachelorette party or something who keeps shouting about getting a drink, like I need a drink. You know, there's [laughter] that lady. And then of course there's just the zombies at a slot machine, right? Like their eyes look like they're like um and then uh let's see, people playing craps at 9:00 a.m. That's a person. And then I love the people when you're leaving for a flight at like 7 a.m. and there's people literally coming home to the hotel at 7 a.m. at the same time as you. I'm sure there's way more than that, but Vegas is a great people watching place. Um, here's one thing I didn't know. >> You can literally people, how many times have they ask us for a massage at the table? >> If you're that sore from gambling and you need a massage while you're playing, um, you might have a problem. I I [laughter] don't know. >> Anyway, but for us, everyone keeps saying Vegas is in trouble. Vegas was bumping when we were there. >> Oh, yeah. That's what I want to say. So, you look at a chart of Caesars and it looks like the stock's going to zero and Caesars is the most exposed to Vegas compared to like uh uh Win or MGM or Las Vegas Sands. And it's easy to conclude that the consumer is dying. It's like, wait a minute, no, they're not. They just aren't going to Vegas as much as they used to for a various host of reasons. Uh it's expensive as [ __ ] >> It's really It's really expensive there. It's really expensive. I got a star a grande coffee for $9. It's just like come on. You're just robbing me. Um but did it feel like a recession there? >> No, it was I mean people were dropping money left and right and it >> did it feel like Caesars is in an 80% draw down. >> Yeah, we were and we asked the dealers like what's going on? Is it busy? And they said yeah right now there's a lot of stuff going on. I don't maybe it was just cuz there was a big conference week or what. But it it I was surprised. I thought it was going to be a ghost landing. >> Yeah. So, so I'm not I'm not here to say that Vegas is killing it, but this idea that like nobody's there anymore just not true. Uh, all right. Great stuff, Ben, on the Vegas. Just I wanted to mention Robin Hood real quick. Their net deposits in the fourth quarter or in the third quarter were an all-time record. Uh, up 29% 20.4 billion. >> I'm sure they have a ton of people that are just auto contributions in, right? And every time they get a new client, that's what happens or new customer. >> Here's a here's a face-lowing chart. Um, look at how look at their their margin revenue. 153 million. And the next treasure is their margin book. Not surprisingly, $14 billion, an alltime record there. >> Wow. >> Robin Robinet is killing it. They are doing They are on fire. >> They need to do the bucket shop thing. People would love to borrow more money from them. >> Um, all right. Good news. My auto insurance went down for the first time in a long time. They didn't have to haggle. Great I didn't have to like go to and that not a lot, a little, but the Wall Street Journal had a had a story saying that um auto car insurers are under pressure to cut rates. They they're basically saying there's been more competition and people are shopping around more. So that's causing these autoinsurers to lower the rates. So the the it's finally the inflation on this stuff that spiked and it was massive. We talked about this being like a crisis level event, it's reversed. So that's good. >> That's great. >> Good news. >> That's great. Ben, I uh I'm not a I'm a I'm new to the vest the vest game. I know you've been a vest guy for a long time. >> That's kind of surprising you going to Manhattan all the time. >> Yeah, I'm new to the vest game and uh I don't like vest guys. Sorry. I mean, I like I have a lot of friends that wear vest and I like them, but just the idea of vest man, I don't like vestmen. >> Well, if there's if there's four guys walking and they all have khaki pants on and a blue shirt and a vest, you like you judge those guys. >> So, there was two vestmen on the flight as we landed. They got off. Uh they're standing up talking. >> Vests are great for wearing on planes though. >> I am I >> pockets keeps you kind of warm. >> I've got a positive coming up. So they uh the So vest guy number one goes, "So how was the conference for you? You coming back next week?" "No, I don't cover retail anymore. I will only cover this sector." So they're, you know, they're rich guys. Uh you going to Where you going tonight? You going to Manhattan. I'm like, "Dude, [laughter] you don't just say that out loud." >> So they're they're stereotypical vest guys. >> Stereotypical vest guys. All right. But I'm a vest guy now for various reasons. But here's another here's a great reason. Um I don't know if you could tell, probably can't, maybe you can. I've put on quite a bit of weight recently. I'm afraid to look at the scale. My my eating, which was on track, has fallen off an absolute cliff. It's a nightmare. So now you could wear a vest over a t-shirt and hide your belly. So that's what I'm doing these days. I wear cuz my >> puffy vest really hides can hide a lot. >> My my my stomach is not looking good at all. Neither does my upper chest area. So, the vest the vest hides hides the >> What happened to your personal trainer? >> Oh, I stopped at a year ago. I don't have time for that. >> Okay. Yeah, you do. You got to You can find time to work out. All right. Um >> No, I can. I just don't have time. I don't have time for a >> survey of the week from Washington Post. >> A weekly trainer. It's too much. >> Three in four Americans want to reach their 80th birthday, but less than 30% want to live to 100. The typical American lives to 78. The ideal age on average, according to this Pew survey, is 91. So, what do you think is the best age to die? Very morbid question. >> 8 84. >> Okay. So, my dad talks about this a lot. My dad is approaching 80. He's always said like, I don't want to live past my like 80s. >> I don't want to I don't want to be seen people that like just fall off a cliff and deteriorate. He always says, I don't want to get past that point. He's said this multiple times. >> Yeah. But, but your dad's in good shape. Would he if he could live to 90 If he could live to 90 and not be a a corpse, I'm sure he would do it. >> It is kind of crazy. My dad is almost 80 and you'd look at him, you'd probably think he's in his 60s. He like tans immediately. Like >> my my step my my stepfather is 85 and the guy's a a Hulk. You would never know. >> My my grandfather died at 76 and he looked like he was 110 because he smoked his whole life and lived a hard hard life. Um I think 85 is a perfect age. Don't you think? Like you don't say like oh they died at 85 like they had so much more life to live. I think 85 is the perfect age to die. >> Yeah. It's a great age >> cuz I feel like in the 90s like you're having people take care of you. >> Yeah. >> Right. >> Yep. >> All right. Uh, let's do some recommendations. I watched Plurabus on Apple TV. A bunch of people were talking about this. It's the new show from Vince Gilligan, the guy who did Breaking Bad. Okay. Did you watch any of this? >> No. I am very excited, though. >> I think it's one of the best pilot episodes I've seen in the last 20 years. >> Oo. What? >> Like, >> whoa. >> I mean, >> thanks. Thanks for Thanks for raising my expectations. >> I don't want to raise them too much, but it's just one of those shows [laughter] that it >> one of the best pilot episodes in the last 20 years. >> Here's the thing. I'm worried that the idea of the show is go like I don't know where they go from here. Like the the it feel it feel like a blockbuster movie, but like the the show starts and it goes and you're like, "Oh, oh, oh, okay. We're Oh, it's >> But you're But you're in good hands. It's why no need to be worried. You're >> I'm a little concerned that the show is going to peak in the very first episode and the second episode I watched it was good, too. But it's like it's just the idea of what happens is kind of like mindbending." And so that's all I'm going to say. It was like, listen, Lost is probably the best of this century. We lost is probably the best pilot episode I've ever seen. Homeland's probably up there. I'm trying to think of what else, but um >> Oh, I remember watching Homeland in my bed. >> House I grew up in. That that was a great pilot. >> Just in terms of like what could happen with this show like it it like whoa, this is mindbending. Very good. Um you said you watched The Materialist on their flight. So my wife and I watched it cuz it was on HBO. >> What did you think? >> Um so it's not a romcom, it's just a rom. And I thought, man, this movie feels familiar. It's the same woman who wrote and directed Past Lives, which I loved. I think that was one of the best. >> You did love that movie. >> That was a very good movie. Uh, Materialist I thought was just okay. Like, we're talking like a 6.2. It was I thought the ending was like completely obvious and telegraphed and not original. Um, and I had a hard time buying Chris Evans as like this down in his luck guy who lives with roommates. >> He was It made no sense. So, I I thought that Materialist was you nailed it. It's a good airplane movie. What is an airplane movie? It's a movie that you watch on an airplane that you wouldn't enjoy on that you enjoy on the airplane that you wouldn't enjoy on your couch. So, I I um I had an okay time watching Materialist, but Pop uh Pedro Pascal horrific and Chris Evans maybe even worse. It it so the acting was terri >> I thought the first half of the movie was kind of intriguing, but um >> yeah, the first third was great and then the it was miscast. >> Spoiler alert, she's not going to end up with a rich private equity guy. Come on. Who has a $12 million apartment in Manhattan? That's not realistic. >> Airplane movie. >> Okay. So, it was it was okay. >> I have a plug. Uh I plugged Tommy John Undershirts. I'm gonna plug this. Uh we don't have a we don't have a TV in my kitchen. So, we got the new Amazon Echo Show, which is like a 15 in I think. It's like a 15-in screen and they even have like so you have all the apps in it. So the kids could watch Netflix, Prime, Disney, whatever. They even have like an Amazon channel guide, which I just discovered yesterday. Pretty interesting. But it's perfect. It's perfect for the TV. It swings around. It's great. >> And you can use it for other stuff, too. >> It's an Alexa. >> Okay. >> It's an Alexa that also has a TV. >> Oh, interesting. Okay. I like that. >> It's great. It's It's really great. Okay. Um All right. I I have I You know, you ever You ever notice something about yourself only after somebody points it out? Mhm. >> So, I was telling uh one of our guys, Kevin, here about a movie that I was watching. Kobe woke me up early. I was I was up and I was downstairs at 6:15 and I I fired up a movie called Sovereign, which Nick with Nick Offerman, which is not a which is not a movie worth watching. But Kevin's like, "You really watch a lot of movies in the morning, don't you?" And I said, "Yeah, you know what? I have really strange movie watching habits because I rarely watch a movie in one sitting, which is maybe part of the reason why I really love watching movies in the airplane or in the theater. But almost all of my movies I'm watching like 20 minute chunks, an hour chunk, a 15inut. >> I can't watch a movie in the morning. I'm not a morning person. I can't like my brain's not ready to dig in yet. >> So, uh yeah, that that's me. I I said it. Um all right. Uh, GMO del Toro. I have very mixed feelings on this guy. So, he did the new Frankenstein movie. And it's funny, I always thought that I hated GMO del Toro because he did a lot of stuff that I don't love. Like, um, I didn't love Pan's Labyrinth. I know why people like it. Shape of Water got panned. I never saw it. Just looked weird. >> Oh, that was awful. He did that. >> I don't know anything about Hellboy. It might be good, but it it just turns me off. >> I actually watched Hellboy. It was okay. >> Okay. And then there was a there was a a TV series on FX that he made. I think it was about vampires that I just didn't really like. But then he did make some stuff that I do like. I didn't realize that he made Mimic. Do you remember that movie in 1997? >> Yeah, >> that was that that was good stuff. >> Uh Nightmare Alley I liked. There was one other thing that he did that I like. So maybe I don't hate him as much as I do. So anyway, the point is this. I went into Frankenstein with zero expectations. I'm not a big Frankenstein guy, right? Like it's not a monster that I particularly care for. Um, uh, Oscar Isaac as Victor Frankenstein. >> What monsters do you care for? >> Aliens. >> Okay. >> Big aliens guy. Uh, although like I would put like the monster villain like Freddy Krueger. I know he's not a monster per se. >> Wait, so would I like Frankenstein or not? >> Maybe. Well, it's not very it's not very good, but it's it's also way too long. I think I fell asleep a few times. This took me like four different times to watch. >> You're not selling it very good. It's not very good and it's too long. I watch it in the hotel. I watch the show, Mrs. Lincoln. >> Nope. Yeah, exactly. No, but it was okay. There was some good stuff, some bad stuff, some silly stuff. It made no sense. But point is this. It was It was watchable and forgettable. So, you can skip it, Ben. >> All right. >> You can skip it. All right. Lastly, I know we're going long here. Sorry, Duncan and team. >> Um, two pretty good airplane movies. Number one is Americana. You ever hear of this one? Mm-m. >> Okay. So, Americana movie is with Sydney Sweeney. May maybe you've heard of her. Uh, and it's a new movie. It's 2023. I'm not that new. >> You know, it's kind of funny that she's just a bigger hit. Like her, no one ever sees her movies or hears of them. Like her boxing movie This Weekend totally bombed, but she's still this massive star. >> Well, nobody wants to see her box. No offense. The movie with uh Glenn Powell was a smash. >> Yeah, I like that one. >> Um, all right. Paul Walter Hower. You You like that guy? >> Oh, yeah. Big dude. Yeah. >> So, this is like a western crime, western thriller. Good. Good airplane movie. >> Okay. >> And then uh Oh, High. O, High was a fun little Yeah, Google this, Ben. Tell me what you think. >> O, High. >> Is it the best movie? No. But it's a good airplane movie. Oh, you love this guy. >> This guy This guy Logan Lurman was in The Perks of Being a Wallflower. >> I like that movie. Okay. So Isaac and Iris's first ever romantic getaway hits a block when Isaac casually confesses to not wanting a relationship. To what lengths will the desperately single Iris go to convince him? >> Okay, I'm in. It's a romcom, huh? >> Um, it's Yeah, it's good. It's fun. It's okay. It's an airplane movie. All right. Thank you everybody for listening. Thank you Duncan and team for uh for editing a long show. animal spirits at the compoundnews.com. We love hearing from you guys. Please take the survey. Would really help us out and we'll uh >> check out uh check out Talking Wealth. This week I'm talking to Colin Ro about how [music] he like transitioned from writing about macroeconomics to running his own firm and then starting his own line of ETFs. Good stuff. See you next time. [music]