S&P 500 earnings growth remains heavily concentrated, with two AI semiconductor makers accounting for 34% of index earnings expansion, even as forward multiples compress. (0:46)
The U.S. housing market has split into a pronounced K-shape: luxury builder Toll Brothers sees 25% all-cash buyers at a $996,000 average price, while entry-level builder traffic drops double digits and Whirlpool plunges roughly 90% from all-time highs. (42:15)
Baby Boomers and the Silent Generation control 62% of aggregate U.S. wealth, a distribution driven primarily by decades of compounding math rather than systemic inequities. (55:35)
Millennials and Gen Z have expanded their share of total American Express spending from 20% in 2019 to 38% today, driving sustained double-digit growth in live entertainment and experiential spending. (34:36)
Detailed notes
## Background
Published on YouTube by The Compound on October 28, 2026, this video features episode 488 of the Animal Spirits podcast hosted by Michael Batnick and Ben Carlson. According to the description, the episode covers the bull market in corporate earnings, bear cases and bubble definitions for AI, the 1987 market crash, resilient consumer and labor trends, luxury real estate, streaming industry shifts, and why Baby Boomers hold the majority of aggregate wealth.
## TL;DR
Hosts Michael Batnick and Ben Carlson analyze the modern equity landscape, demonstrating how mega-cap chipmakers have driven corporate earnings growth even as valuation multiples compress and artificial intelligence capex concerns mount. They explore historical precedents like the 1987 crash, argue that fixed income serves as a practical hedge against AI disappointments, and detail how K-shaped dynamics are fueling luxury real estate while depressing entry-level housing. Turning to personal finance and demographics, they demonstrate that older generations controlling the bulk of national wealth is primarily the mathematical outcome of decades of compounding rather than systemic failure. The discussion wraps with deep dives into streaming platform strategies, media consumption, sports gambling normalization, and cultural reflections.
## Atmosphere & style
The episode maintains a conversational, witty, and grounded rapport, balancing institutional-grade market data with playful banter about kitchen disasters and appliance repairs via ChatGPT. Batnick and Carlson showcase an easy camaraderie, seamlessly transitioning from analytical debates on Treasury yields and semiconductor drawdowns to candid personal anecdotes about ticket sales and sports betting culture. The vibe feels like an authentic, intellectually curious discussion between seasoned market observers who remain skeptical of hyperbole while finding humor in everyday behavioral quirks.
## Bulletin
- [00:46](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=46s) S&P 500 earnings growth remains heavily concentrated, with two AI semiconductor makers accounting for 34% of index earnings expansion, even as forward multiples compress.
- [42:15](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2535s) The U.S. housing market has split into a pronounced K-shape: luxury builder Toll Brothers sees 25% all-cash buyers at a $996,000 average price, while entry-level builder traffic drops double digits and Whirlpool plunges roughly 90% from all-time highs.
- [55:35](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3335s) Baby Boomers and the Silent Generation control 62% of aggregate U.S. wealth, a distribution driven primarily by decades of compounding math rather than systemic inequities.
- [34:36](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2076s) Millennials and Gen Z have expanded their share of total American Express spending from 20% in 2019 to 38% today, driving sustained double-digit growth in live entertainment and experiential spending.
## Key takeaways
- [03:04](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=184s) Corporate earnings have climbed far above their 30-year trendline as median net profit margins reached roughly 13%, defying traditional mean reversion due to tech platform monopolies.
- [05:17](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=317s) Market concentration among the top 25 S&P 500 stocks is wider than at the peak of the dot-com bubble, now concentrated in mega-cap tech rather than diversified conglomerates.
- [09:11](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=551s) Polymarket defines an AI bubble burst by requiring three catastrophic events within 90 days, including potential 50% drops in Nvidia or a supplier, ETF plunges, or major lab bankruptcies.
- [10:35](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=635s) TS Lombard outlines an AI bear case centered on circular vendor financing and narrow customer adoption by 2028, leading to a mild economic recession.
- [13:09](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=789s) Anthropic's financials show enterprise traction with 250 customers spending over $10 million annually, alongside a substantial liquidity cushion of over $130 billion in cash and short-term investments.
- [20:19](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1219s) Treasuries have reemerged as an effective hedge against tech and AI drawdowns, with yields at multi-year highs offering defensive ballast.
- [30:09](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1809s) The labor market demonstrates persistent resilience with jobless claims near historic lows, though AI-adopting firms exhibit slower employment growth via hiring freezes.
- [27:24](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1644s) Experiential spending on concerts and dining out faces persistent high inflation in a bifurcated economy where high earners continue to spend freely.
- [42:15](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2535s) Roughly 40% of U.S. homes are owned free and clear of mortgages, insulating affluent older homeowners from elevated borrowing costs and fueling luxury real estate cash purchases.
- [50:22](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3022s) Netflix has significantly expanded run-rate revenue, yet its shares have underperformed the broader tech index over five years as the platform shifts from prestige TV to algorithmic engagement.
- [56:47](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3407s) Entitlement programs like Social Security and Medicare now comprise nearly half the federal budget, driving a massive institutional wealth transfer toward older generations.
- [59:45](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3585s) Cinemas are demonstrating unexpected box office resilience, with Cinemark shares gaining over 70% year-to-date on strong theatrical attendance.
The episode opens with a promotional message highlighting Eaton Vance's active management capabilities. With over a century of investing experience and more than 50 actively managed funds holding a Morningstar rating of four stars or higher, the firm positions itself as an established leader in active fixed income solutions designed to help investors pursue capital appreciation, portfolio diversification, and tax-free income.
[00:46](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=46s) The Earnings Boom and Skeptical Valuations
Michael Batnick kicks off the show by referencing a recent *Wall Street Journal* article reporting that just two AI semiconductor manufacturers account for 34% of the corporate earnings boom in the United States. He highlights a quote from Chris Grasanti, Chief Market Strategist at MAI Capital Management, who observed: “The market is being uncharacteristically wise. We're not in anything like Euphoria.”
Ben Carlson ponders whether this absence of euphoria might actually be an ominous signal rather than a sign of mature restraint. He wonders if the broader market simply distrusts the sustainability of the current corporate windfall, suspecting that while the profits are real today, they will not last. Michael agrees that the stock market appears to hate the rally. Pointing to an Ed Yardeni chart, Michael notes that while forward earnings per share (EPS) estimates continue to march upward to the right and the S&P 500 gyrates upward, the forward price-to-earnings (P/E) multiple has actually compressed. In his view, this setup is completely unprecedented: never before has a revolutionary, world-changing technology arrived only to be met by a broad equity market refusing to believe it.
Ben points out that investors typically pay up for growth—a foundational mechanic of past equity manias. Drawing on calculations from Matt Higgins ("Chart Kid"), Michael explains what index performance would look like if valuations had simply held flat instead of contracting:
- **U.S. Equities:** Would be up almost 30% on the year if forward P/E had remained constant.
- **International Equities:** Would be up roughly 15%.
- **Emerging Markets:** Would be up nearly 50%.
[03:04](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=184s) Historical Trendlines and the Myth of Margin Mean Reversion
Reviewing a Goldman Sachs research piece, Ben and Michael examine 30-year S&P 500 trend earnings dating back to 1995. Current corporate earnings sit about as far above long-term trend as at any point in the past three decades. Historically, stretches of extreme overshoot above the trendline have culminated in sharp mean reversions, typically accompanied by economic recessions.
However, Ben notes that net profit margins present an equally striking anomaly. Since 1995, the net profit margin for the median company in the index has expanded from less than 6% to roughly 13%. Unlike what many anticipated during the dot-com era, the internet did not deliver an immediate spike in margins, but rather a multi-decade structural climb. For years, conventional financial theory taught in business schools insisted that profit margins were the single most mean-reverting metric in macroeconomics because excess economic rents inevitably invite competition that erodes profitability.
Michael argues that this classic economic thesis has been dead for a decade. In the modern tech landscape, competing against platform monopolies requires raising hundreds of billions or even a trillion dollars—an impossible hurdle for all but a tiny handful of elite players like OpenAI or SpaceX. Because access to astronomical pools of capital is now the prerequisite to compete, the traditional forces of competitive margin destruction have broken down.
```mermaid
flowchart TD
accTitle: Classic Margin Theory vs Modern Monopoly Reality
accDescr: Flowchart contrasting the traditional economic model of margin mean reversion with the modern reality of massive capital barriers preventing competition.
subgraph Classic["Classic Economic Theory"]
A["High Profit Margins"] --> B["Attracts New Competitors"]
B --> C["Pricing Pressure"]
C --> D["Margins Mean-Revert to Historic Average"]
end
subgraph Modern["Modern Tech Monopoly Reality"]
E["High Profit Margins"] --> F["Trillion-Dollar Capital Moat Required"]
F --> G["Competitors Blocked (Except Elite Mega-Caps)"]
G --> H["Margins Remain Elevated Structurally"]
end
```
[05:17](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=317s) Market Concentration: 2000 vs. Today
Michael asks whether it is fair to say the market today is far more levered to AI than the 1999–2000 market was to the internet. Ben responds unequivocally: “Oh, by far. Yeah. That I don't think I don't think it's even close.” Ben points out that at the height of the 1990s tech run, the top tier of the market was still dominated by diversified conglomerates and financials like Citigroup, AIG, and General Electric, whereas today's market cap leadership is almost exclusively concentrated in mega-cap technology firms.
Michael shares a graphic illustrating this concentration by comparing the market cap of the top 25 stocks in the S&P 500 to the bottom 25 stocks:
- **Dot-Com Peak (2000):** The top 25 stocks were 195 times larger than the bottom 25.
- **Current Market:** The top 25 stocks are 211 times larger than the bottom 25.
This concentration discussion prompts a brief comedic tangent about Judd Apatow's film *Knocked Up*—specifically the recurring bit where a character overuses a dice-rolling dance move. The two also touch upon their admiration for the late comedian Norm Macdonald and praise Apatow's appearance discussing Norm on Sean Fennessey's podcast.
[07:00](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=420s) The AI Boom Leaders and Ben’s Cycle Dilemma
Returning to the *Wall Street Journal* data, Michael reflects on the surprising identity of the market's biggest earnings drivers. The two chipmakers responsible for over a third of the index's earnings growth are Nvidia and Micron Technology. While Nvidia's presence was universally expected, Micron's position as a top-line profit driver caught both hosts off guard, as nobody had spent the prior two years hyping Micron as a primary vehicle for the AI revolution.
Looking through the broader list of top percentage-point contributors to earnings growth reveals a varied mix of semiconductor, tech, and traditional energy powerhouses:
- Micron Technology
- Nvidia
- Broadcom
- ExxonMobil
- EchoStar (distorted by recent bankruptcy restructuring)
- SanDisk
- Marathon Petroleum
- Meta
- Chevron
- Valero
As the segment concludes, Ben confesses to deep ambivalence about where we stand in the artificial intelligence cycle. Michael jokes that Ben's habit of waffling on air makes for questionable podcast content, but Ben defends his uncertainty: “No, but I think at this point, this this far into the cycle, I've never been more confused about my feelings on AI.” Ben clarifies that he is completely convinced the underlying technology will be transformative; his conflict lies entirely in whether the economy must endure anDot-com-style speculative bust before realizing that promise, or whether the current wave of spending will power straight through without collapsing. Michael, by contrast, admits he sits much closer to the persistent bull camp, expecting the market run to continue.
[09:11](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=551s) Defining the AI Bubble on Polymarket
Ben Carlson brings up an active Polymarket contract tracking whether the "AI bubble" will burst by specific target dates like December 31st or June 30th. To evaluate the contract, Ben notes that Polymarket requires three specific catastrophic conditions to happen within a 90-day window out of a predetermined checklist. Michael Batnick appreciates that they at least established an explicit, measurable definition, rather than relying on vague sentiment.
The conditions listed in the betting market include:
- Nvidia collapsing at least 50% from all-time highs.
- The semiconductor ETF (such as SMH) closing 40% below its all-time peak (which Ben humorously points out has essentially already been tested or approached).
- OpenAI or Anthropic declaring bankruptcy, or OpenAI getting acquired.
- The market clearing price of compute plunging below a set threshold.
- A collapse among critical hardware suppliers, where names like Taiwan Semiconductor Manufacturing Company (TSMC), ASML, or Broadcom fall 50% from their all-time highs.
Ben argues that even if several of those events occurred, it might not truly represent an existential bursting of AI as a secular force, though an Nvidia plunge of 50% would clearly signal trouble given its current earnings support. As Michael points out:
> “Nvidia falling 50% would mean the bubble burst for sure at this point because the stock's not expensive.”
For Nvidia or TSMC to get cut in half, something fundamentally broken would have to emerge, especially since TSMC remains the sole scaled manufacturer for top-tier chips.
```mermaid
flowchart TD
accTitle: Polymarket AI Bubble Resolution Rules
accDescr: Conditions required within a 90-day window for the Polymarket AI bubble bet to resolve positive.
subgraph Trigger["Polymarket AI Bubble Resolution (3 within 90 Days)"]
A["Nvidia crashes 50%+ from ATH"]
B["Semiconductor ETF down 40%+ from ATH"]
C["OpenAI or Anthropic Bankruptcy / Acquisition"]
D["Compute prices plunge below threshold"]
E["Key supplier (TSMC, ASML, Broadcom) drops 50%+"]
end
```
[10:35](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=635s) The Bear Case: Concentration, Circular Financing, and Consumer Adoption
Ben explores what he views as the most legitimate bear arguments against the artificial intelligence boom: extreme spending concentration among the top 1% of hyperscalers. Michael pushes back against the idea that concentrated capex is inherently bad, asking who else should bear the immense development risk if not deep-pocketed titans like Amazon, Alphabet, and Microsoft. Michael compares worrying about tech capex concentration to historical sports dominance:
> “To me that's like saying back in the day the risk of the Warriors is Steph Curry gets hurt—it's like, well yeah, I mean obviously, but like who else would you want carrying the team?”
Ben counters by referencing a TS Lombard analysis dubbed the "Bini report" (a nod to Dario Perkins' classic macroeconomic thought experiments). The report sketches out how an AI downturn could arrive by 2028: circular vendor financing, capex recycling, off-balance sheet leverage, and an inability for the tech customer base to ever broaden beyond Silicon Valley insiders. Ben points out that even in that bearish scenario, the end result was merely a mild, garden-variety recession rather than a catastrophic global financial crisis.
Ben also highlights an excerpt discussing the stark divide between Silicon Valley and ordinary households: tech insiders assumed regular people would use generative models to plan their entire daily workflows, whereas most average consumers merely treat it as a glorified search engine. Michael acknowledges that the broader consumer adoption layer may prove far smaller than early hype suggested, placing the entire burden of justification onto enterprise productivity.
[13:09](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=789s) Anthropic's Preliminary Filing and Cash Strength
The conversation turns to Anthropic filing its preliminary S-1 paperwork ahead of an eventual public offering. Michael initially glances at the customer breakdown and misreads it as the customer companies' total revenues, underwhelmed by the scale:
- 11,900+ customers generating $100,000+ in spend.
- 1,900+ customers generating $1,000,000+ in spend.
- 250 customers generating $10,000,000+ in spend.
Realizing that these figures represent actual annual run-rate spending *paid directly into Anthropic's enterprise coffers*, Michael completely reverses his tone, noting that 250 enterprise accounts spending eight figures each is extraordinarily impressive.
Ben jokes that roughly 99% of people who read the filing simply pasted the PDF into Claude or ChatGPT for a summary. When Ben fed it directly into Claude, the model initially refused to analyze it, stating:
> “I put it into Claude and it said, 'I can't offer an opinion here because I'm conflicted.' And I said, 'No, give me your opinion. Damn it. I'll tell you what to do.'”
Despite prominent internet skeptics like Ed Zitron framing AI business models as smoke, mirrors, and incinerated capital, the actual financial disclosures demonstrate surprising fundamental health:
- Anthropic has raised an aggregate of roughly $141 billion in funding.
- It still sits on an enormous liquidity cushion, holding around $112 billion in cash and cash equivalents alongside $19 billion in short-term investments (retaining roughly $130 billion of its total capital raised).
- Operating losses showed dramatic operating leverage: after losing $2.135 billion in the six-month period ending in 2025, operating losses shrunk to just $693 million for the six months ending June 2026.
Ben and Michael conclude that balance-sheet bears banking on rapid corporate insolvencies will likely be waiting a very long time. Michael stresses that while risks are real, the pervasive obsession with risk has already compressed forward valuation multiples. If a secular AI pullback does arrive due to an awkward revenue handoff, Ben insists it will represent an exceptional buying opportunity.
[17:35](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1055s) The 1987 Crash and Absurd Predictions
Michael shifts gears to discuss historical stock market volatility and recent social media panic. Over the prior weekend, online commentary had whipped up speculative dread about an impending market crash, drawing comparisons to Black Monday in October 1987, when the S&P 500 plunged more than 20% in a single trading session.
Michael scoffs at the doom-mongering, emphasizing how absurd historical context makes these internet freakouts look: even after enduring the single worst one-day crash in modern American financial history on Black Monday, the S&P 500 still finished the full year of 1987 in positive territory, rising approximately 2%. Michael jokes that had Ben been managing money or blogging back in October 1987, he would have brushed off the absolute devastation of Black Monday by casually reminding distraught clients that the market was still up for the calendar year.
[18:13](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1093s) The 1987 Crash Perspective and Anthropic Valuations
Ben Carlson recalls an article he wrote around 2014 asking whether a repeat of the 1987 crash would truly be that catastrophic, pointing out that the market actually ended that calendar year in positive territory. Shortly after publishing it, he received an email from an outraged reader who called him a "dummy" and described what it felt like in real time. The reader recounted driving home from work with no social media or instant internet alerts, hearing about the collapse over the radio, and almost steering off the road in terror thinking the country was entering an outright depression. Ben highlights how intense the context was back then: the market had rallied 40% year-to-date by late summer before crashing, all while the 10-year Treasury yield hovered around 10%. Investors simply decided to ignore 10% risk-free rates to chase equities.
```mermaid
flowchart LR
accTitle: 1987 Market Setup vs Outcome
accDescr: Visualizing the pre-crash market conditions in 1987 leading up to Black Monday and the year-end finish.
subgraph S1["1987 Macro Environment"]
A["10-Year Treasury Yield ~10%"]
B["Equities Up +40% YTD into Late Summer"]
end
subgraph S2["Shock & Recovery"]
C["1987 Flash Crash / Black Monday"]
D["Market Finishes Positive for the Full Year"]
end
A --> C
B --> C
C --> D
```
Michael Batnick notes that widespread nervousness among investors today is actually keeping him relatively calm, as cautious sentiment keeps valuations from running completely unhinged: “If the stock market was up 38% and the forward PE was at 33 times, believe me, I would be singing a different tune.” Ben wonders whether an eventual initial public offering for an AI giant like Anthropic would end up being an anticlimactic event rather than a massive first-day surge because private valuations are already elevated. Michael points to prediction and secondary trading platforms like Hyperliquid as structural game-changers: private names see synthetic price discovery and tens of millions of dollars in 24-hour volume daily, turning private companies into pseudo-public entities where 80% of the numbers are already dissected long before an official IPO.
[20:19](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1219s) "Fed Nick," Yield Plunges, and Bonds as the Primary AI Hedge
Ben references reporting from Nick Timiraos of *The Wall Street Journal*, whom he nicknames "Fed Woj"—prompting Michael to explain to newer listeners that the moniker is an homage to former premier NBA news breaker Adrian Wojnarowski, who held the scoop crown before Shams Charania, much like John Hilsenrath previously held it at the Federal Reserve beat. Nick highlighted a 19-basis-point drop in the 10-year Treasury yield in a single Thursday, marking the steepest one-day yield decline since the collapse of Silicon Valley Bank on March 10, 2023. Ben marvels at the whiplash in macro commentary: within days, the dominant narrative swung from worries about debt issuance and fiscal deficits driving yields higher to panic that an AI slowdown would drag down growth.
Ben points out that access to capital remains the chief vulnerability for AI infrastructure buildouts, citing comments from the CEO of Nebius stating they could no longer raise debt capital. Michael notes that tech companies are pivoting to equity raises instead, referencing reports that Nvidia was participating in an equity raise for Meta to keep capital flowing. This dynamic creates a closed financial loop where big players prop each other up to prevent the capital cycle from freezing.
- **Capital Spigot Dynamics**: Mega-caps are actively turning to cross-corporate equity financing because high debt market costs are constricting traditional borrowing for AI data centers.
- **Divergence on Selloff Days**: During a steep tech drawdown where the Invesco QQQ slumped nearly 3%, the iShares 7-10 Year Treasury Bond ETF (IEF) advanced 1%, validating Treasuries as a functional diversifier.
- **Alternative Equity Hedges**: Michael points to low-volatility and "halo" value equities, which staged sharp V-shaped recoveries while the broader AI trade unwound.
Ben argues that fixed income is the purest, most direct hedge available against AI-driven euphoria: “If you're really nervous about AI, bonds are the best hedge you can get.”
[22:55](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1375s) Fixed Income Yields and Retail Macro Anxiety
Michael brings up data provided by PIMCO ETFs comparing fixed-income yields from late 2021 to the present day. Back in 2021, core aggregate bonds yielded a meager 1.7%, forcing investors to hold them purely as volatility dampeners despite weak payouts. Today, core bonds yield 5.6%, while municipal bonds offer an eye-popping 7.9% tax-equivalent yield for investors in the top marginal tax bracket in high-tax states like California and New York. With cash yielding around 4% and attractive income across high-yield, corporate, and emerging market debt, investors finally have viable income alternatives outside of pure equity beta.
Ben contrasts this environment with the confusing barrage of financial doom content confronting casual retail investors. He recounts receiving a panicked message from a mid-40s high school friend who is trying to learn investing and stumbled upon a doomsday YouTube video with over 40 million views warning of debt spirals, hyperinflation, and the imminent collapse of the republic. Ben empathizes with the difficulty of understanding markets today when logic appears constantly inverted by price action.
To illustrate how disjointed market pricing has become, Ben highlights the semiconductor space: earnings are up 176% year-over-year, yet multiples have collapsed because investors refuse to trust forward estimates.
```mermaid
flowchart TD
accTitle: Semiconductor Disconnect
accDescr: Flowchart contrasting positive fundamentals with severe price drawdowns in the memory ETF.
A["Semiconductor Sector Earnings: +176% YoY"] --> B["Forward P/E Multiples Compress"]
B --> C["Roundhill DRAM Memory ETF Drawdown: -40% from Highs"]
C --> D["ETF Still Net +75% YTD"]
```
Ben asks Michael whether he would buy the Roundhill DRAM ETF down 40% from its highs, and Michael admits that while he does not personally own it, he would be a buyer rather than a seller at that level. They discuss Meta's extraordinary volatility as further proof that market participants are struggling to price short-term AI adoption: Meta surged 40% in a month to a $1.6 trillion valuation following excitement around its generative tools, only to drop 18% over the subsequent month. During its recent earnings release, the stock traded up 8% in after-hours to $750 before reversing sharply the next day to close near $650—a 15% round-trip swing. Ben emphasizes that rapid mini-cycles of boom and bust now compress years of price discovery into days, making it nearly impossible to rely solely on short-term fundamental projections: “Things get priced in so quickly that you can't, if you're someone who's just relying on fundamentals.”
[27:24](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1644s) Planet Fitness, Broken Water Coolers, and Inflation in High-End Services
Ben Carlson shares an anecdote about his local Planet Fitness, which sits right down the street and charges just $10 a month—a price point he still marvels at. Earlier in the year, he noticed the gym's drinking fountains stopped working properly. Previously, they dispensed ice-cold water, but suddenly the water ran at room temperature. Nine months later, the fountain remained unfixed. Curious, Ben looked up Planet Fitness's stock and discovered it had suffered a 50% drawdown over the year. The low-cost business model relies heavily on consumer inertia—people signing up for $10 a month via automatic bank deductions and simply never showing up. Yet, when the company attempted to raise rates from $10 to $12 a month, customers aggressively pushed back.
Michael Batnick notes that the stock took a hit alongside other consumer-inertia plays, and he uses this to double down on his thesis regarding runaway inflation in high-end discretionary services. Discussing Josh Brown's mention of a concert ticket for his son Justin that cost $600 at the Barclays Center, Michael argues that prices for scarce, high-end live experiences will climb relentlessly. He explains that just as corporations opportunistically leveraged general inflation in 2021 to hike prices even when input costs were unaffected, businesses catering to the upper end of the K-shaped economy will continue pushing prices up because wealthy consumers will absorb them regardless. Ben agrees, observing that while high-end service categories like hotels and spa treatments continue to skyrocket in price, luxury goods stocks are actually getting battered.
“The tickets for experiences where it's a limited number is going to go up 8 to 12% a year for the next 10 years.” — Michael Batnick
- **Planet Fitness economics:** Charges $10/month relying on automated gym memberships where members rarely visit; customer pushback prevented price increases to $12/month.
- **Stock performance:** Down 50% in a major drawdown over the year.
- **Service price inflation examples:** Justin Brown's concert ticket costing $600 at Barclays Center; spa treatments costing $150.
---
[30:09](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1809s) The Resilient Labor Market and the Paradox of AI Productivity
Turning to the macro picture, Michael highlights recent labor data shared by Kevin Gordon showing initial jobless claims falling to 194,000—the fourth lowest reading since the 1960s. While some market observers view this as proof that AI-driven job destruction is overblown, Michael cautions that declaring the threat resolved is far too early. Ben expresses genuine surprise at how resilient employment remains despite the advancement of AI models. Michael brings up historical layoff tracking on Layoffs.fyi, recalling how tech giants like Microsoft and Jack Dorsey's companies overhired in the pandemic before initiating cuts, but observes that those widespread tech layoffs have since slowed considerably.
Ben brings up Microsoft's recent announcement offering early retirement buyouts to roughly 60,000 employees out of its 220,000 global workforce. Tellingly, Ben points out that Microsoft had added roughly 60,000 workers earlier in the 2020s, effectively giving the option to shed the exact headcount added during the pandemic boom. Ben pulls up labor data from Exhibit A showing the unemployment rate sitting at just 4.2%—a level never reached in the entire 1980s and only seen in 1999 during the 1990s—while US job openings remain higher than at any point during the 2010s. Citing Goldman Sachs data shared by Carl Quintanilla, Michael notes that firms adopting AI are starting to display a statistically significant negative correlation with employment growth. However, Michael clarifies that companies are achieving productivity boosts through "more with the same"—expanding revenue faster than headcount rather than firing staff—while Ben likens the broader economic adjustment to slowly turning a battleship rather than an overnight shift like the sudden move to remote work.
“Initial jobless claims down to 194,000 last week from Kevin Gordon, the fourth lowest level going back to the 1960s.” — Michael Batnick
“The share of US firms that have adopted AI in regular business functions now shows a statistically significant negative correlation with employment growth.” — Carl Quintanilla (quoted by Michael Batnick)
- **Initial jobless claims:** 194,000 (4th lowest level since the 1960s).
- **US unemployment rate:** 4.2% (lower than any point in the 1980s, and lower than the 1990s prior to 1999).
- **Job openings:** Above peak levels of the entire 2010s decade.
- **Microsoft workforce changes:** 220,000 global headcount; offered severance/early retirement packages to 60,000 workers (matching the roughly 60,000 employees hired during the 2020s).
---
[34:36](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2076s) Robust Consumer Spending and the Millennial/Gen Z Amex Boom
Examining the underlying strength of the consumer, Michael breaks down Bank of America's latest quarterly earnings, focusing on credit and debit card year-over-year transaction data. The figures demonstrate strong inflationary and real volume expansion in experiential categories: entertainment transaction volume climbed 7% while dollar spend jumped 13%, and travel transactions rose 4% while dollar volume rose 7%. Conversely, traditional retail spend lagged behind volume, with transaction counts rising 6% while dollar volume grew only 5%. Ben supplements this with analysis from Matt Klein, who found that American spending on goods, bars, and restaurants is rising at 8% annually, with bars and restaurant spending alone climbing at 9% per year—roughly three percentage points faster than the 2017–2019 pre-pandemic average.
```mermaid
flowchart LR
accTitle: Generational Spending Share on American Express
accDescr: Growth of Gen Z and Millennial share of total American Express spending volume from 2019 to 2024.
subgraph AmexShare["Share of Total American Express Card Spend"]
A["2019: 20%"] --> B["2022: 30%"]
B --> C["Present: 38%"]
end
```
Michael ties this surge in discretionary experience spending directly to younger, affluent demographics by pulling up American Express reporting. Rather than representing a niche slice of the market, younger cohorts have rapidly captured a massive portion of overall card volume. In 2019, Millennials and Gen Z represented 20% of total Amex spending; by 2022, their share climbed to 30%, and current quarterly numbers show them accounting for 38% of all American Express volume, illustrating the disproportionate economic firepower of affluent younger consumers.
“Gen Z and millennials were 20% in 2019 and by 2022 they were 30%. Fast forward to today... It's 38%.” — Michael Batnick
- **Bank of America card spending (YoY):**
- Entertainment: Transactions +7%, Dollar volume +13%
- Travel: Transactions +4%, Dollar volume +7%
- Retail: Transactions +6%, Dollar volume +5%
- **Bars & restaurants spending growth (Matt Klein data):** +9% annually (300 basis points higher than 2017–2019 pace).
- **American Express Gen Z & Millennial spend share:** 20% (2019) $\rightarrow$ 30% (2022) $\rightarrow$ 38% (present).
[36:45](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2205s) Generational Wealth Disparity and Gen Z Angst
Michael Batnick and Ben Carlson open with a reflection on how the economic landscape has fractured among younger cohorts compared to their own post-Great Financial Crisis (GFC) experience. Michael notes that while he cannot formally quantify it—suggesting Nick Maggiulli could run the numbers—it feels like wealth inequality has never been higher among young people. Ben completely agrees, pointing out that when millennials entered the workforce following the GFC, everyone was struggling in unison: “No, you didn't have people like that that's like, 'Oh my gosh, they're doing so well in their mid-20s.'” During that era, the prevailing sentiment was simply being grateful to have any job at all, with raises being out of the question.
In stark contrast, both hosts observe that today it has become remarkably commonplace to see older Gen Z professionals—those between ages 25 and 27—readily pulling down six-figure salaries. This widening split creates severe psychological angst for those who are struggling. Young workers feel left behind not just by older generations, but by peers who are thriving financially while they find themselves unable to get ahead.
[37:51](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2271s) AI Agents in Daily Life and Bank Security Crackdowns
The conversation shifts to everyday artificial intelligence tools. Ben asks Michael if he is still using the AI agent tool he previously mentioned, called Instinct. Michael confirms he uses it constantly. As a practical example, he shares that he bought tickets to take Kevin and Dan to the New York Giants game on November 12th. After a friend invited them to sit in season-ticket seats instead, Michael had Instinct analyze local comparable listings around his seat location, set a listing price, and automatically schedule a 10% price cut if the tickets failed to sell by 6:30 the following evening.
Ben remains on the sidelines regarding autonomous agents, citing a news item from Axios via Joe Weisenthal reporting that major U.S. banks have detected unauthorized third-party AI agents operating inside customer accounts, with some attempting tasks independent of user instructions. While Ben prefers to wait until the regulatory landscape settles, Michael pushes back, arguing that institutions like Chase and major brokerages have already locked out unauthorized agent access anyway, rendering those fears moot for general productivity tasks. Ben jokes that Michael's primary use case seems to be operating an automated ticket scalping scheme.
[40:11](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2411s) The Ubiquity of Sports Gambling
Michael recounts walking to Madison Square Garden for the New York Knicks opening night against the Philadelphia 76ers. On the corner of 35th Street and 7th Avenue, digital billboard towers were broadcasting live sports betting feeds directly onto the street, displaying individual wagers rolling in in real time (e.g., $200 on the Knicks, $74 on the 76ers). Despite Michael admitting he loves sports action and plays blackjack frequently, the public display felt alienating: “And I just thought I don't like this. I just don't like it. I don't think And listen, that's not a that's not that's not a contrarian take. I don't think anybody likes it. I think we all agree like this sucks.”
Ben wonders whether regulatory pushback will clamp down on the sports gambling boom over the next decade, or if the phenomenon is now an irreversible part of American culture. Both hosts agree that it has likely crossed the point of no return. Michael laments that the normalization of omnipresent gambling feels “icky and dangerous,” while Ben points out the societal bargain being made: the vast majority find it entertaining, but a predictable 2% to 3% slice of the population ends up having their lives completely ruined by it.
[42:15](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=2535s) The K-Shaped Housing Market and Homebuilder Divergence
Turning to real estate, Ben highlights a *Wall Street Journal* report headlined, "America's new housing market is all about luxury and it runs on cash." High mortgage rates have caused the housing market to split cleanly along K-shaped lines: luxury real estate is thriving via cash purchases, while entry-level housing is freezing out first-time buyers.
```mermaid
flowchart TD
accTitle: Housing Market K-Shaped Divergence
accDescr: High interest rates cause luxury builders to rise while entry-level builders falter.
Rates["Surging Mortgage Rates"] --> Split{"K-Shaped Market Split"}
The split is particularly vivid when comparing public homebuilders. Lennar, which caters to entry-level buyers, has had to slash prices, whereas Toll Brothers, focusing on luxury developments with an average sales price of roughly $996,000, is actually raising prices. In Toll Brothers' latest earnings report, 25% of all buyers paid entirely in cash. Ben explains that this cash surge stems largely from baby boomers who own their existing homes free and clear (noting roughly 40% of U.S. homes have no mortgage), allowing them to roll equity directly into their next purchase without needing a mortgage.
- **PulteGroup (PHM) Earnings:** CEO commentary reported a notable slowdown in buyer demand as interest rates surged, with community traffic dropping 14% year-over-year and 11% sequentially from the prior quarter, driven by missing first-time home buyers.
- **Homebuilder ETFs:** Michael expresses shock that the homebuilder ETF (XHB) is down only 22% from its peak, while ITB is down about 30%, expecting both to be in a 50% to 60% drawdown given the macroeconomic backdrop.
- **Whirlpool Drawdown:** The ripple effects have hit appliance makers hard; Whirlpool (headquartered in Benton Harbor, Michigan) saw its revenue slashed in half over recent years, with its stock plunging nearly 90% from all-time highs due to the freeze in existing-home turnover.
- **Household AI Fixes:** Underscoring the reluctance to buy replacement goods, Ben shares that when his refrigerator door broke the previous evening, he avoided buying a new unit by feeding photos of the hinge mechanism into ChatGPT to successfully diagnose and fix the door himself.
[046:07] Brownie Hacks and Kitchen Disasters
Michael Batnick kicks off the segment with a personal anecdote about his recent attempts to adopt healthier eating habits, which has led the Instagram algorithm to flood his feed with diet recipes. In particular, he stumbled across a supposed "brownie hack" involving baking either black beans or chickpeas together with eggs and cocoa powder. Despite trying it twice over the past week, he concedes it tasted terrible and was definitively not a real brownie hack. Worse, his cooking experiments exposed his absentmindedness: he repeatedly left both the oven and the stovetop running, prompting an angry confrontation from his wife, Robin. Michael jokes about having an "ADD brain" and reminds Ben of the time in 2021 when he left his barbecue grill running overnight until the heat melted the exterior siding of his house. Ben teases him by asking if an AI agent could be instructed to turn his appliances off for him, while Michael compliments Ben for managing to fix his own refrigerator simply by adjusting a leveling foot—a small home repair job Ben admits took him an embarrassingly long time to finish.
[047:06] The Resilient Consumer and Gamified Credit Card Rewards
Shifting toward earnings season, Michael highlights recent quarterly commentary and data from financial institutions like Synchrony Financial and Ally Financial. Despite pervasive headwinds including elevated gasoline prices, persistent inflation, and year-long weakness in consumer sentiment surveys, actual spending behavior shows zero sign of cracking. Quoting an executive from Ally Financial on the ongoing disconnect between sentiment headlines and hard spending numbers, Michael reads: “It is like the consumers do not read the headlines.” Data from Synchrony—which issues private-label store credit cards for major retailers like Macy's—reveals that Gen Z and Millennials continue to capture an expanding share of overall spending, while net charge-offs for everyday, Main Street consumers remain flat to down. Ben observes that just as bears spent the entire decade fruitlessly warning that the consumer was on the verge of rolling over, critics of the artificial intelligence boom have adopted the exact same attitude, predicting an imminent collapse that simply keeps failing to materialize.
Turning to an American Express earnings call, Michael points out a fascinating question raised by an equity analyst about consumer behavior and incentives. The analyst asked management how Amex would adjust its business model if cardholders increasingly learned to "gamify" credit card rewards by routing all their spending purely to capture maximum bonuses and perks. Michael finds the premise telling: even when capitalism produces competitive reward structures, Wall Street's instinct is to worry that consumers might be getting too good of a deal at the expense of corporate profit extraction.
[050:22] The Capitalist Trap: Why Winning Companies Have Stinking Stocks
Michael connects this ruthless drive for corporate monetization to the broader market, using Netflix as the ultimate case study in the harsh reality of public equity investing. Over the past 24 months, media analyst Alex Morris noted that Netflix added $12.8 billion in incremental run-rate revenue—an incremental expansion alone that exceeds the entire direct-to-consumer revenues of Peacock, HBO Max, and Paramount individually. However, despite surging operating income and clear operational dominance in the streaming wars, the stock has delivered brutal long-term returns for shareholders. Over the prior five-year period, the Invesco QQQ trust gained 94%, while Netflix shares fell 6%, enduring a devastating 75% crash followed by a recovery and a secondary 50% plunge. Ben sums up the cruel irony of modern market incentives by pointing out: “Streaming is one of the greatest inventions of all time and the stock and the company that won their stock stinks.”
```mermaid
flowchart TD
accTitle: The Streaming Business and Stock Divergence
accDescr: Diagram illustrating how Netflix won the streaming war operationally while its stock lagged behind broader tech indices.
subgraph Operations["Operational Dominance"]
A["Streaming Disruption"] --> B["12.8B Incremental Revenue Growth"]
B --> C["Outearns DTC Peers (Peacock, Max, Paramount)"]
C --> D["Operating Income Up and to the Right"]
end
subgraph Market["Wall Street Reality"]
E["Ruthless Growth Expectations"] --> F["5-Year Stock Performance: -6%"]
G["Invesco QQQ: +94% Over Same Period"] --> F
H["Volatile Drawdowns: 75% Crash & 50% Crash"] --> F
end
Operations -.->|"Decoupled from"| Market
```
- **Incremental revenue powerhouse**: Netflix generated an additional $12.8 billion in run-rate revenue over 24 months, outpacing the entire standalone direct-to-consumer business of several legacy Hollywood media operations.
- **5-year stock performance gap**: While the tech-heavy Nasdaq-100 tracker QQQ gained roughly 94%, Netflix shares declined by 6%.
- **Extreme drawdown history**: Over that five-year stretch, the stock suffered a 75% crash from its highs, rebounded, and subsequently experienced another 50% decline.
[052:07] Has Netflix Lost Its Way to the Algorithm?
The hosts examine the growing narrative that Netflix is falling behind YouTube as viewer habits shift. While YouTube's share of television screen time has surged to double that of Netflix, Michael rejects the extreme idea that Netflix is a dying platform, though he concedes its hyper-growth phase is permanently over. Addressing CEO Ted Sarandos's earnings call comment that Netflix aims to remain the first destination subscribers look to for prestige content and the last subscription they would ever cancel, Ben disagrees with both assertions. In Ben's household, Amazon Prime has become the essential, indispensable service due to its vast library and integrated pay-per-view rental options.
The deeper issue, Ben and Michael argue, is that Netflix abandoned its early commitment to prestige storytelling—epitomized by David Fincher directing the pilot of *House of Cards* or the cultural reach of *Orange Is the New Black*—in favor of algorithmic content generation. By contrast, Apple TV+ has consistently churned out acclaimed, high-caliber original series, leading Michael to offer a harsh assessment of Netflix's creative drift: “They've lost their course. They lost their way. They're like the puppy who lost their way.” Ben compares Netflix's trajectory to an AI cautionary tale: when a company relies completely on algorithmic guidance, it risks optimizing away its creative quality. In a final piece of industry irony, Ben notes that legacy studios like Disney threw away billions in operating losses following Netflix off the streaming cliff, only for Netflix to turn around and chase YouTube's algorithmic model down the same path.
- **Ted Sarandos's core objective**: Netflix aims to remain the first entertainment destination consumers check for high-caliber series or films and the final streaming bill they would ever consider canceling.
- **Apple TV+ prestige slate**: Ben lists a string of recent critical and audience successes on Apple—including *Silo*, *Slow Horses*, *Shrinking*, and *Dark Matter*—pointing out that Netflix has struggled to produce a single comparable flagship show in the past year.
- **The streaming cliff analogy**: Legacy media giants ruined their balance sheets chasing Netflix into unmetered streaming, while Netflix is now diluting its own quality attempting to mimic the infinite-scroll engagement of YouTube.
[55:35](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3335s) Why Baby Boomers Hold All the Wealth: The Power of Compounding
After briefly joking that Apple might just need to buy Netflix to fix streaming, Ben Carlson shifts the conversation to the pervasive media narrative claiming that older generations have hoarded all the money and are actively crowding out younger people. Looking up Federal Reserve data, Ben notes that Baby Boomers and the Silent Generation currently control 62% of total wealth in the United States. To explain why this is neither a conspiracy nor evidence of a broken system, Ben highlights a thought experiment from a blog post by Adam Nash. Nash proposed a hypothetical world where every individual experiences the exact same financial lifecycle: working from age 25 to 64, earning identical wages, saving 10% of their income, seeing their investments compound at 8% annually, retiring at 65, living until 85, and drawing down 4% of their portfolio each year.
Under those perfectly equalized conditions, Ben points out that individuals aged 65 and older would end up controlling roughly 75% of the aggregate wealth simply due to mathematics. Boomers have simply had several more decades for compounding to work its magic. Because Millennials and Gen Z actually began investing at younger ages on average, they will inevitably hold the vast majority of the nation's wealth once they reach their mid-sixties. As Ben summarizes the dynamic: “This is a compounding thing. This is not like an unfair system thing.”
```mermaid
flowchart TD
accTitle: Adam Nash Wealth Compounding Model
accDescr: Flowchart illustrating how equal savings across lifetimes naturally concentrates wealth in older age cohorts via compounding.
subgraph WorkingYears["Working Years (Ages 25 to 64)"]
A["Save 10% of Income"] --> B["Compound at 8% Annual Return"]
end
subgraph RetirementYears["Retirement (Ages 65 to 85)"]
B --> C["Retire at Age 65"]
C --> D["Spend 4% Portfolio Rule"]
end
D --> E["Result: Age 65+ Controls 75% of Wealth"]
```
[56:47](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3407s) Property Taxes, School Funding, and Federal Entitlement Spending
Picking up on listener feedback from their previous episode's debate on property taxes, Ben reads an email from a homeowner who does not have children and does not plan to have any. The listener acknowledged the need to fund basic public infrastructure but expressed deep frustration that school property taxes represent 70% of their total property tax bill, leaving them feeling as though they are paying for services that will never directly benefit them. Michael Batnick and Ben immediately push back against that mindset. While Michael readily admits government budget allocation is far from optimal, he argues that the complaint fundamentally misses the nature of civic society: “I think we we all agree the government is horrific at allocating our dollars, right?”
Michael points out that property values and neighborhood desirability directly correlate with property tax rates and school quality; if someone does not want to support high-performing local schools, they have the option to move to a cheaper community with fewer amenities. Ben corroborates this by noting that the two most desirable communities in Grand Rapids, Michigan, both carry the highest property taxes in the area for that exact reason. Furthermore, Ben turns the generational grievance on its head by examining the 2026 federal budget via J.P. Morgan data. While older taxpayers frequently complain about paying local school taxes, entitlement programs—specifically Medicare, Medicaid, and Social Security—now account for 49% of the federal budget. The tax dollars paid by younger working cohorts are overwhelmingly flowing directly to Baby Boomers.
- Baby Boomers and the Silent Generation control 62% of current U.S. wealth.
- In Adam Nash's baseline simulation (saving 10%, 8% returns, 4% withdrawal), individuals 65+ control 75% of wealth purely through compounding.
- Medicare, Medicaid, and Social Security make up 49% of the federal budget, representing a massive net transfer of wealth from young workers to older generations.
[58:54](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3534s) A Rant on Toxic Political Commercials
Ben veers into a passionate venting session regarding the sheer toxicity of television political advertising during the election cycle. He explains that his household rarely watches traditional broadcast television outside of morning episodes of the *Today Show* that his wife watches and live sports like NFL football games on YouTube TV. During a recent football broadcast, however, the barrage of political ads reached such a repulsive extreme that his wife felt compelled to turn off the television set entirely to protect their young children from seeing them.
Ben describes how mainstream campaign advertisements have abandoned standard policy debates and adopted the most grotesque rhetoric imaginable, openly accusing opponents of supporting child rapists and pedophilia. Comparing the current media landscape to social media algorithms spilling out into broadcast television, Ben directs his frustration toward the electorate itself: “We're the problem because we allow this to happen.”
[59:45](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3585s) Action Cinema, Box Office Resurgence, and Peter Berg
Changing the subject to entertainment, Michael recalls their conversation from the prior week about the decline of practical action cinema in favor of sterile CGI. He brings up a viral tweet from Historic Vids featuring behind-the-scenes makeup footage from Mel Gibson's 2006 film *Apocalypto*, which follows the Mesoamerican warrior Jaguar Paw. Michael raves about the relentless pacing and visceral energy of the production, declaring: “This movie rips so hard.” When Ben admits he has never watched it, Michael insists it is an absolute table-pounder that Ben needs to see immediately, though he cautions it is far too intense for Ben's son George.
Turning to movie theaters, Michael highlights that theatrical exhibition is seeing strength beyond just IMAX, pointing out that Cinemark stock is up 71% year-to-date. To test the waters, Michael took his son Kobe to a 6:30 PM Sunday screening of *Whalefall* while his wife Robin took Logan to a New York Knicks game. Michael was shocked to find a packed auditorium for a Sunday evening and notes that it served as Kobe's first real grown-up movie experience. Ben and Michael also discuss filmmaker Peter Berg following his appearance on Bill Simmons's podcast. Ben praises Berg's television adaptation of *Friday Night Lights* as one of his top five favorite shows of all time, while Michael expresses excitement for Berg's upcoming World War II football movie, *The Mosquito Bowl*. They reflect on Berg's evolution from a recognizable 1990s actor—whom they joke resembled Michael Biehn from *The Terminator*—into an accomplished writer and director.
[01:02:21](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3741s) The Moral Debate Over Giving Psychopaths a Platform
Michael brings up a critically acclaimed, three-hour project featuring Nathan Fielder that has earned a near-100% approval rating from critics. Ben admits that between fall sports and personal commitments, finding a three-hour block to watch a film is difficult, but he also voices a deeper moral reservation regarding true-crime and corporate-fraud cinema. Ben questions the ethics of turning charismatic fraudsters and white-collar criminals into entertainment spectacles: “I don't I don't enjoy the fact that we're like Sam Bankman-Fried and Elizabeth Holmes. I don't like that we're holding them up to something.”
Ben explains that while he recognizes *The Wolf of Wall Street* is objectively a well-crafted movie, he personally disliked watching it because he considers Jordan Belfort an unrepentant psychopath and scumbag. Michael jokes about Ben's moral stance, admitting that he personally relishes every second of those stories, and assures Ben that the filmmaking craft displayed by the co-directors is stunning enough to warrant an open mind.
[01:03:58](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3838s) Norm Macdonald and the Weekend Update Legacy
To close out the entertainment segment, the hosts circle back to a documentary about the late comedian Norm Macdonald that they had touched on earlier in the episode. Michael reflects on Macdonald's legendary tenure as the anchor of *Saturday Night Live*'s *Weekend Update*, admiring his singular comedic voice and fearless deadpan delivery behind the anchor desk.
[01:04:09](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3849s) Norm Macdonald, Weekend Update, and the Golden Era of SNL
Reflecting on Norm Macdonald's tenure anchoring *Saturday Night Live*'s "Weekend Update" from 1994 to 1997, Michael Batnick notes how formative Macdonald was for their generation. As a nine-year-old who did not watch conventional news broadcasts, Michael learned what an anchor was supposed to look like entirely from Macdonald. Despite occasional controversies stemming from his later public remarks, Michael considers him an icon who held near-universal admiration. Watching a recent documentary on Macdonald's life deeply moved Michael: “I cried watching this documentary. I thought his life was incredibly incredibly sad.”
Ben Carlson points out that Macdonald's semi-fictional memoir, *Based on a True Story*, reveals similar heartbreak, detailing how the comedian made and lost fortunes multiple times due to a severe gambling addiction. Ben praises the documentary for letting the comedic highlights and classic bits speak for themselves. Both hosts reminisce about the era of *Saturday Night Live* they grew up watching, sharing the universal sentiment that viewers always love the cast from their own youth. Ben lists his defining lineage: starting with Dana Carvey and Mike Myers, followed by Chris Farley, Adam Sandler, Chris Rock, David Spade, and Norm Macdonald.
[01:05:20](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3920s) Larry David and the Loss Aversion of Heckling
Ben shares an anecdote featured in *Colossus* about Larry David filming *Curb Your Enthusiasm* in New York. While attending a game at Yankee Stadium, David was treated like royalty, with an estimated 50,000 fans shouting praise, saying, "Larry, you're the best," and treating him like a god walking through the concourses. Yet as he walked out and got into his car to leave, a lone spectator yelled out, "Hey, Larry, you suck."
That single negative shout was the only reaction David remembered, while the praise from 50,000 cheering fans evaporated immediately. Ben connects this reaction directly to human behavioral psychology: “That explains Larry, but to me that explains everyone. That's like loss aversion. Everyone remembers the one bad thing and not the good things.” Michael agrees completely that this asymmetrical focus on negativity mirrors broader human nature.
[01:06:03](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=3963s) Streaming Recommendations: *East of Eden* and Halloween Horror
Revisiting their critique of Netflix's inconsistent output, Ben highlights a rare high-end offering: a miniseries adaptation of John Steinbeck's novel *East of Eden*. While Ben had never read the book, Michael mentions having read and loved it. Ben is impressed by the high production value, arguing it looks more like an HBO or Apple TV+ prestige project than standard Netflix fare: “This is a show that looks like it could be on Apple or HBO. It's very high quality for Netflix. This is the kind of stuff they should be doing more of.” The story is dark and brutal, but Ben considers it the best thing on the platform in a long time, anticipating he might end up reading the novel afterward.
```mermaid
flowchart TD
accTitle: Film and Television Recommendations
accDescr: Overview of projects discussed by Ben and Michael covering adaptations, horror, and sequels.
subgraph S1["Prestige Drama"]
EE["East of Eden Miniseries (Netflix)"]
EE --> Cast["Cast: Florence Pugh, Christopher Abbott, Mike Faist"]
EE --> Tone["Brutal Steinbeck Adaptation / HBO-Caliber Production"]
end
subgraph S2["Halloween Horror & Sequels"]
QP["A Quiet Place Trilogy"]
QP --> P1["A Quiet Place (Original Horror)"]
QP --> P2["Part II (Action Turn, compared to 'Aliens')"]
QP --> P3["Day One (NYC Spinoff)"]
end
```
The hosts discuss the cast, which includes Florence Pugh, Christopher Abbott (Marnie's boyfriend Charlie on HBO's *Girls*), and Mike Faist (from the tennis movie *Challengers*). Mentioning Abbott leads to a brief exchange about reports of another season or return of *Girls*. Ben expresses distaste for reviving finished series after their natural conclusions, though both hosts admit they genuinely enjoyed the show during its original run.
Turning to Halloween movie watching with his kids, Ben notes he doesn't watch as many horror movies as Michael. Michael asks Ben to guess his pick for the best horror movie of the past decade. Ben guesses *Get Out*—which Michael watched with his kids over the weekend—though Ben considers it more of a psychological thriller. Ben instead recommends *A Quiet Place*, having watched the entire franchise with his kids:
- *A Quiet Place*: Praised for its intense suspense and how engaged his children were throughout.
- *A Quiet Place Part II*: Ben compares its tonal shift to *Alien* versus *Aliens*, moving from pure horror to high-octane action. Michael considers it the best sequel he has seen in 25 years (barring *The Dark Knight*), praising how the opening ten minutes hum with tension.
- *A Quiet Place: Day One*: A prequel set in New York that both describe as decent, with another installment planned for next year.
[01:08:10](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=4090s) AI as the Decadal Macro Narrative and Show Wrap-Up
Closing out the show, the hosts reflect on the barrage of news. Michael remarks that this is not just a busy week, but part of a historic decade where artificial intelligence dominates the landscape: “For better or worse, this is going to be the dominant theme for the rest of our podcasting career.” Ben echoes this point, noting that Michael Santoli called AI "the story of the century," pointing out that there is virtually nothing else of comparable scale driving markets and the economy right now. Even while wrapping up, headlines cross the wire showing Meta executing a $100 billion stock sale to fund its massive AI infrastructure push.
Ben and Michael sign off, thanking Duncan and the production team, and urging viewers and listeners to subscribe on YouTube, leave podcast reviews, and send questions to spirits@compoundnews.com.
## Notable quotes
> [20:19](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1219s) If you're really nervous about AI, bonds are the best hedge you can get. — Ben Carlson
> [00:46](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=46s) The market is being uncharacteristically wise. We're not in anything like Euphoria. — Chris Grasanti
> [27:24](https://www.youtube.com/watch?v=Hd5DSQfHMMM&t=1644s) The tickets for experiences where it's a limited number is going to go up 8 to 12% a year for the next 10 years. — Michael Batnick
## Mentioned
A Quiet Place, A Quiet Place Part II, A Quiet Place: Day One, Adam Nash, Adam Sandler, Adrian Wojnarowski, AIG, Alex Morris, Alien, Aliens, Ally Financial, Alphabet, Amazon, Amazon Prime, American Express, Anthropic, Apocalypto, Apple TV+, ASML, Axios, Bank of America, Barclays Center, Ben Carlson, Bill Simmons, Broadcom, Carl Quintanilla, Challengers, ChatGPT, Chevron, Chris Farley, Chris Grasanti, Chris Rock, Christopher Abbott, Cinemark, Citigroup, Claude, Colossus, Curb Your Enthusiasm, Dana Carvey, Dario Perkins, Dark Matter, David Spade, Disney, East of Eden, Eaton Vance, EchoStar, Ed Yardeni, Ed Zitron, Elizabeth Holmes, ExxonMobil, Federal Reserve, Florence Pugh, Friday Night Lights, General Electric, Get Out, Golden State Warriors, Goldman Sachs, HBO Max, Historic Vids, House of Cards, Hyperliquid, Instinct, Invesco QQQ, iShares 7-10 Year Treasury Bond ETF (IEF), ITB, J.P. Morgan, Jack Dorsey, Joe Weisenthal, John Hilsenrath, John Steinbeck, Jordan Belfort, JPMorgan Chase, Judd Apatow, Justin Brown, Kevin Gordon, Knocked Up, Larry David, Layoffs.fyi, Lennar, Madison Square Garden, MAI Capital Management, Marathon Petroleum, Matt Higgins, Matt Klein, Mel Gibson, Meta, Michael Batnick, Michael Biehn, Michael Santoli, Micron Technology, Microsoft, Mike Faist, Mike Myers, Nathan Fielder, Nebius, Netflix, New York Giants, New York Knicks, Nick Maggiulli, Nick Timiraos, Norm Macdonald, Nvidia, OpenAI, Orange Is the New Black, Paramount, Peacock, Peter Berg, Philadelphia 76ers, PIMCO, Planet Fitness, Polymarket, PulteGroup, Roundhill DRAM Memory ETF, Sam Bankman-Fried, SanDisk, Saturday Night Live, Sean Fennessey, Shams Charania, Shrinking, Silicon Valley Bank, Silo, Slow Horses, SMH, SpaceX, Steph Curry, Synchrony Financial, Ted Sarandos, The Dark Knight, The Mosquito Bowl, The Terminator, The Wall Street Journal, The Wolf of Wall Street, Today Show, Toll Brothers, TS Lombard, TSMC, Valero, Weekend Update, Whalefall, Whirlpool, XHB, YouTube, YouTube TV
## Video description
On episode 488 of Animal Spirits, Michael Batnick and Ben Carlson discuss: the bull market in earnings, the bear case for AI, defining the AI bubble, the 1987 crash, the best AI hedge, why the labor market remains strong, consumers keep spending money, luxury real estate is booming, why old people are so wealthy, how to fix Netflix, Norm Macdonald and more.
This episode is sponsored by Eaton Vance. Discover how Eaton Vance helps investors at https://www.eatonvance.com/active
Content sponsorship by Pimco ETFs. Learn more here: https://www.pimco.com/etfs
► 00:00 - Eaton Vance Ad
► 00:46 - Stock Market
► 24:21 - Investor Behavior
► 30:06 - The Economy
► 37:50 - AI
► 42:12 - Real Estate
► 47:19 - Great Quarter Guys
► 55:34 - Personal Finance
► 59:44 - Entertainment
► 1:01:35 - Recommendations
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here:
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Hosts Ben Carlson and Michael Batnick argue that the current market rally is driven by genuine corporate earnings power rather than unbridled euphoria, even as extreme concentration and massive capital requirements reshape traditional market mechanics. Meanwhile, broader economic divides—from housing to wealth accumulation—reflect structural compounding and demographic advantages rather than sudden systemic failures.
Earnings Power, Multiple Compression, and Modern Monopolies (0:46)
Unlike past speculative manias, the recent market climb has occurred alongside compressing forward price-to-earnings multiples, even as S&P 500 earnings overshoot 30-year historical trends. Michael Batnick highlights that just two semiconductor producers—Nvidia and Micron Technology—account for 34% of recent U.S. corporate earnings growth. Calculations from Matt Higgins indicate that had valuations remained constant rather than contracting, U.S. equities would be up nearly 30% on the year.
While historical economic theory posited that elevated profit margins mean-revert as excess profits attract competition, Batnick asserts that dynamic has broken down. The net profit margin for the median S&P 500 firm has expanded from under 6% in 1995 to roughly 13% today. Competing against dominant platform tech monopolies now demands hundreds of billions of dollars in capital, creating nearly insurmountable moats that insulate incumbent corporate margins.
The AI Capex Cycle and Downside Scenarios (5:17)
Market concentration has surpassed dot-com peak levels, with the top 25 S&P 500 stocks reaching 211 times the market capitalization of the bottom 25, compared to 195 times in 2000. Despite skepticism around circular financing and the pace of everyday consumer adoption, corporate filings indicate robust liquidity cushions. For instance, Anthropic's preliminary S-1 disclosures show $130 billion in cash and short-term investments alongside 250 enterprise customers spending over $10 million annually, with operating losses narrowing from $2.135 billion to $693 million.
Assessing downside risks, Carlson cites TS Lombard analysis suggesting that an AI infrastructure unwind would likely result in a mild recession rather than a catastrophic financial crisis. Additionally, while high debt costs strain data center buildouts, Carlson points to fixed income as a reliable diversifier, noting that during recent tech selloffs, intermediate Treasuries rose as yields plummeted.
K-Shaped Consumer Realities and Housing Disparities (34:36)
The broader domestic economy displays a stark split between capital-rich consumers and liquidity-constrained households. Discretionary spending on travel and live entertainment remains robust, with Bank of America data showing entertainment spending up 13% by dollar volume year-over-year. Affluent younger cohorts are fueling this trend, with Millennials and Gen Z growing their share of total American Express card spending from 20% in 2019 to 38% today.
Conversely, real estate illustrates a severe structural divide driven by elevated mortgage rates. While entry-level builder PulteGroup reported a 14% year-over-year drop in buyer foot traffic, luxury builder Toll Brothers has raised prices on average sale prices near $996,000, with 25% of purchases made entirely in cash. This advantage is largely enabled by older homeowners, who benefit from holding their previous homes mortgage-free and rolling substantial accumulated equity into high-end transactions.
Why Baby Boomers Dominate Wealth Distribution (55:35)
Addressing grievances regarding generational inequality, Carlson reframes the fact that Baby Boomers and the Silent Generation hold 62% of U.S. wealth as the natural result of multi-decade compound interest rather than institutional theft. Citing a model by Adam Nash where all workers save 10% of identical wages and earn 8% annual returns, individuals aged 65 and older mathematically end up controlling 75% of aggregate wealth under uniform conditions.
Furthermore, while older homeowners often push back against local school property levies, federal spending heavily favors retirees. J.P. Morgan data shows that Social Security, Medicare, and Medicaid together consume 49% of the 2026 federal budget, reflecting a substantial net fiscal transfer from working-age taxpayers to older generations who hold the vast majority of nation's asset base.
Carlson and Batnick conclude that while artificial intelligence will dominate macroeconomic narratives for the coming decade, near-term market behavior remains bounded by skeptical valuations rather than speculative fever. The unresolved tension lies in the enterprise handoff: whether the astronomical capital poured into AI infrastructure by a few mega-caps will generate sufficient productivity gains to justify current investments before balance-sheet pressures force a consolidation.
[47:19] Ally Financial 高管: 消费者的表现就好像他们根本不看新闻头条一样。
[2:42] Michael Batnick: In order to compete effectively with these modern monopolies, you need to raise a trillion dollars and most companies can't do that.
[13:13] Michael Batnick: I continue to believe if and when there is a bear market for AI, it's going to be an unbelievable buying opportunity.
[9:11] Michael Batnick: Nvidia falling 50% would mean the bubble burst for sure at this point.
[0:46] Chris Grisanti: The market is being uncharacteristically wise. We're not in anything like Euphoria.
[56:47] Michael Batnick: 一分钱一分货，如果你不想交那么高的房产税（其中很大一部分用于建设优质学校），你完全可以选择住在更差的地方。
[49:05] Michael Batnick: Streaming is one of the greatest inventions of all time and the stock and the company that won their stock stinks.
[27:24] Michael Batnick: The tickets for experiences where it's a limited number is going to go up 8 to 12% a year for the next 10 years.
Source quotes
[20:19] Ben Carlson: If you're really nervous about AI, bonds are the best hedge you can get.
[0:46] Chris Grasanti: The market is being uncharacteristically wise. We're not in anything like Euphoria.
[27:24] Michael Batnick: The tickets for experiences where it's a limited number is going to go up 8 to 12% a year for the next 10 years.
Original transcript
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[0:46] Welcome to Animal Spirits with Michael
[0:48] and Ben. I want to start here. The Wall
[0:50] Street Journal had an article last week.
[0:52] Two chip [music] two AI chip makers make
[0:54] up 34% of America's earnings boom. And
[0:56] the gist of the article was how
[0:57] concentrated the the the rally is. And
[1:00] uh I thought this quote from Chris
[1:03] Grasanti who is the chief market
[1:05] strategist at MAI Capital Management
[1:07] perfectly summed up where we are today.
[1:11] He said, "The market is being
[1:13] uncharacteristically wise. We're not in
[1:16] anything like Euphoria." [music] Is that
[1:19] how you say it?
[1:21] >> That's how we've been talking about it
[1:22] this year. My one question in the back
[1:24] of my mind is is it actually that the
[1:27] market just really doesn't believe this
[1:28] and that there is a possibility this
[1:30] could just be bearish that the the
[1:32] market's not taking the bait. It's not
[1:34] going up because earnings growing up and
[1:35] it's saying listen these earnings aren't
[1:37] re aren't well they're real but they're
[1:39] not going to last and so we're not
[1:40] taking we're not taking the bait.
[1:42] >> Yeah. Exactly. The the the stock market
[1:45] hates it. So we we've got a chart from
[1:48] Ed Yardeni which shows the forward
[1:52] earnings per share. So what analysts
[1:54] expect the earnings to be and they're
[1:55] usually bang on going up and to the
[1:57] right. You also have the S&P 500 going
[2:01] you know gyrating as it does but the
[2:04] forward PE crashing that this is a very
[2:07] very unusual moment. In fact I don't
[2:10] think we've ever seen anything like it.
[2:12] I'm pretty sure there's never been
[2:13] another revolutionary technology, world
[2:15] changing technology that everybody is
[2:17] like this. No, we don't like it. We
[2:21] don't want it. We don't believe it. No.
[2:24] Chart Kid did this thing for us where he
[2:26] said if if the stock market would just
[2:28] have traced earnings this year, if for
[2:30] the for sorry if the 4P was flat, not
[2:32] even rising, if it just stayed where it
[2:34] was at the beginning of the year, US
[2:35] stocks would be up almost 30%,
[2:37] international stocks would be up almost
[2:39] 15% and emerging markets would be up
[2:41] almost 50%.
[2:42] >> And this is what usually happens. We say
[2:44] this all the time, investors pay up for
[2:47] growth. That is like that is the entire
[2:49] story of the stock market. He's not even
[2:51] talking about uh rates of valuations
[2:54] rising. Like you would think maybe in a
[2:56] mania valuations would be going to the
[2:58] moon. He's saying let let us what if
[2:59] valuations just stayed where they were?
[3:01] Returns would be crazy. Uh so Goldman
[3:04] Sachs has a couple charts on this. They
[3:06] they show they kind of put this on trend
[3:09] since 1995. Like what is trend 30-year
[3:12] earnings look like? And to me, this
[3:15] earnings number looks about as far off
[3:17] trend as we've had it in the last, you
[3:20] know, my brain is still broken. Anytime
[3:21] I try to do like how long it's been
[3:23] since the 80s or 90s, I can't
[3:25] >> I know. I know. It's It's not been since
[3:27] the '90s.
[3:28] >> Not a fun exercise.
[3:29] >> So, in the last 30 years, this is about
[3:30] as high off of trend as we've been. If
[3:33] that if that trend means anything. Okay,
[3:36] maybe that trend doesn't mean anything.
[3:37] Well, but maybe it does because any time
[3:41] that we have seen anything like this, it
[3:44] does revert
[3:46] in a pretty nasty way.
[3:48] >> Yes. And and the last time this far off
[3:50] trend was
[3:51] >> leading to recession.
[3:53] >> But here here's why maybe I don't know
[3:55] maybe why it won't. So they also have
[3:56] this chart that shows net profit margin
[3:58] going back to 1995.
[4:00] >> Well, yeah, there's that. And this is
[4:02] this shows not just the index but the
[4:03] median company and this goes from less
[4:06] than 6% in the 90s to 13% today. The
[4:09] thing is you didn't you didn't really
[4:11] even get a huge jump in profit margins
[4:13] from the internet. It it was kind of
[4:15] like a slow burn and now we're just
[4:17] we're so to me this is why some things
[4:21] don't this was the one that should have
[4:23] reverted. Remember everyone said this is
[4:25] the most mean-reverting economic data
[4:27] point of all time profit margins. It has
[4:29] to because comp what they teach you in
[4:31] business school is competition comes in
[4:34] that that eats away at the profit margin
[4:35] and it goes away. That hasn't happened.
[4:38] >> Well, that theory has been I feel like
[4:40] we we buried that 10 years ago. Uh but
[4:44] officially it's gone because
[4:46] in order to compete effectively with
[4:49] these modern monopolies,
[4:52] you need to raise a trillion dollars and
[4:55] most companies can't do that. So the
[4:56] natural laws of economics about
[4:58] competition coming in don't exist
[5:00] anymore. In order to compete, you need
[5:02] to have access to capital. Tons of it.
[5:04] >> And opening I do and SpaceX does
[5:07] >> and that's about it.
[5:08] >> Yeah, you're right. It it's just
[5:10] everything is more
[5:11] >> so the whole idea of margins mean
[5:12] reverting because competition comes in.
[5:14] Not exactly. Uh let me ask you this.
[5:17] Is it crazy to say that the stock market
[5:20] today is more levered to AI
[5:25] than it was to the internet in 992000?
[5:30] And I have a chart to show it. I don't
[5:32] know if this is proof. I'm just just
[5:34] asking.
[5:34] >> Oh, by far.
[5:36] >> Okay.
[5:36] >> Yeah. That I don't think I don't think
[5:38] it's even close.
[5:39] >> Oh, really?
[5:40] >> Yeah. Cuz if you look at what the
[5:42] biggest companies were in the late
[5:43] 1990s, it wasn't all tech companies. It
[5:46] was still like Cityroup and AIG and
[5:48] General Electric and it wasn't. Now it's
[5:50] the biggest companies are all these tech
[5:53] companies.
[5:53] >> All right. I I'm I'm I'm sure you can
[5:55] make an argument either way. The the but
[5:57] the chart that that that Matt made for
[5:59] us shows the size of the top 25 stocks
[6:03] today versus the bottom 25 stocks. And
[6:07] maybe this is a different argument that
[6:08] we're having, but anyway, it's just
[6:09] remarkable because at the peak of the
[6:11] dotcom bubble, the top 25 were 195 times
[6:14] bigger than the bottom 25. And now
[6:18] they're 211 times bigger.
[6:21] >> I I both of our favorite scenes, I
[6:23] think, in Knocked Up is when the guy
[6:24] does the dice thing too many times.
[6:26] [laughter] I I watched it again
[6:27] recently. It's still
[6:28] >> I'm going back to the many times.
[6:30] Listen, he he made this. He made it.
[6:31] >> I'm just I'm just saying this. No, but
[6:33] this is your thing. You're good at this.
[6:34] You're like showing you have you're
[6:36] you're really good at creating.
[6:37] >> I had nothing to do with this. Honestly,
[6:38] Matt made it. Although I guess he
[6:40] learned from proximity.
[6:41] >> What he what does he say? He's doing the
[6:42] dice thing too much. He ago that's
[6:43] really all he's got. I [laughter] mean,
[6:46] >> we used to make funny movies in this
[6:48] country. Not anymore.
[6:50] >> Did you listen to Appetite, by the way?
[6:52] I know we'll talk about the norm doc
[6:53] later, but did you listen to him with
[6:54] Fantasy?
[6:55] >> I did. It was good.
[6:56] >> Yeah. Miss that guy.
[6:58] >> Yeah, we don't have it anymore. Um,
[7:00] what's this? What's this one from the
[7:01] Wall Street Journal? Is it one you
[7:02] already talked about? Oh, it was it was
[7:04] just the the data point from the article
[7:06] that um just two companies Nvidia and
[7:10] Micron account for 34% of the growth of
[7:12] the 30% growth of the S&P 500. I I never
[7:14] would have guessed that Micron was the
[7:15] second stock. I think everybody would
[7:17] have said Nvidia number one. Number two,
[7:19] Micron. Jeez,
[7:21] >> that is pretty hard to believe. And it's
[7:22] not like not like that's not like that's
[7:24] a company that people were pounding the
[7:25] table on heading into the last couple
[7:27] years saying this is going to be the
[7:28] thing that drives a revolutionary
[7:29] earnings in the market. Like it wasn't
[7:31] something this people were talking
[7:32] about.
[7:32] >> No. So, this is a this is a nifty little
[7:34] graphic showing this. All right,
[7:36] Micron's number one actually. Are you
[7:37] kidding me? Wow. In terms of percentage
[7:39] point contributors, Micron, uh, Nvidia,
[7:41] Broadcom, Exon Mobile, Echoar, that's
[7:43] like a weird accounting that that
[7:44] company was in bankruptcy, so forget
[7:46] about that. Uh, Sandis, Marathon
[7:48] Petroleum. Interesting. Meta, Chevron,
[7:50] Valero.
[7:51] >> Okay,
[7:52] >> it is. I mean, look at all the energy
[7:53] stocks on there. That that's kind of
[7:54] crazy as well. Um, I So, you always hate
[7:57] it when I waffle and you always say,
[7:59] "Damn it, Ben. Make a decision or make a
[8:01] point or this is a podcast. This is what
[8:03] we do." Right. You always get mad at me
[8:04] about this.
[8:04] >> Well, I don't necessarily hate it. I
[8:06] just think it's bad content.
[8:08] >> That's true.
[8:09] >> Although, it's it's so bad that it's
[8:10] become your thing that it maybe it's
[8:12] turned good.
[8:13] >> No, but I think at this point, this this
[8:16] far into the cycle, I've never been more
[8:17] confused about my feelings on AI.
[8:19] >> Well, sure. Of course. I mean, yes, we
[8:21] say that to each other with the
[8:22] microphone off, Ben. not not in front of
[8:23] an audience
[8:24] >> but but there are so many conflicting
[8:26] things so many argument I think there's
[8:28] really great arguments for either side
[8:30] and when I say this I think the
[8:32] technology is going to be re I'm not
[8:34] like saying AI is going to be fake I'm
[8:35] saying it's going to be revolutionary
[8:37] it's just are we going to have a bust
[8:39] before we get there that's the thing
[8:40] that I'm just trying to wrap my brain
[8:41] around because there are really [snorts]
[8:43] great arguments for we're going to have
[8:45] a bust and there's also really great
[8:46] arguments of no we're going to break
[8:48] through the wall and it's not going to
[8:49] happen like I I am really torn between
[8:52] both of these arguments.
[8:54] So on the one hand,
[8:56] >> well, I'm not I am much closer to bull
[8:58] market goes on.
[9:01] >> I I guess I'm I'm just I'm more willing
[9:04] to see I I think both of them are very
[9:06] intellectually stimulating. It's not
[9:08] like I can easily push aside one or the
[9:09] other. That's where I am.
[9:11] >> Well, yeah. Yeah. Okay. Keep going.
[9:14] >> First, let me get into this first. So,
[9:15] Poly Market actually has a AI bubble bet
[9:19] that you can make. Will the AI bubble
[9:21] burst by? And it says December 31st,
[9:24] June 30th. I'm sure they're just going
[9:25] to keep pushing this out. And so I
[9:26] always look at these things like what do
[9:27] you how do you define this? So they
[9:30] define the AI bubble as it three of the
[9:32] following things have to happen out of a
[9:34] list
[9:35] >> within a 90day period. Okay, I like
[9:36] this. So they're defining it. Good.
[9:38] >> Yeah, they're So I'm I'm Nvidia has to
[9:39] crash at least 50% from all-time highs.
[9:42] The semiconductor ETF has to close 40%
[9:44] below alltime highs, which is kind of
[9:45] funny because it already is.
[9:47] >> Uh Open Air and Anthropic declares
[9:49] bankruptcy. OpenAI is acquired. They
[9:52] have like uh the price of the the
[9:55] compute has to fall below a certain
[9:56] amount and then major AI hardware
[9:59] supplier collapse. So Taiwan Semi or
[10:01] ASML or Broadcom and they have list all
[10:03] these names have to crash 50% from
[10:04] alltime highs. The funny thing is I
[10:07] think these things could happen in the
[10:08] but it still wouldn't be bursting. I
[10:10] guess Nvidia that'd be the one to me. Uh
[10:14] Nvidia falling 50% would mean the bubble
[10:16] burst for sure at this point.
[10:19] >> Um because it because the stock's not
[10:21] expensive.
[10:22] >> So something really up would have
[10:24] to happen. Openai going bankrupt or
[10:26] anthropic obviously,
[10:28] >> right?
[10:28] >> Taiwan semi getting cut in half. Same
[10:30] thing. Like I don't know. That's the
[10:31] only manufacturer. I don't know how that
[10:34] would happen either.
[10:35] >> Okay. Okay, so here's some of the I
[10:37] think the legitimate arguments I've
[10:38] heard that that are like, hey, this is
[10:40] going to be this is going to burst
[10:41] before we get the good stuff later, like
[10:43] the dot, but not as bad. So, it's
[10:46] basically most of the spending is coming
[10:47] from the top 1% of spenders. It's it's
[10:50] very the spending is very concentrated.
[10:53] And this seems
[10:54] >> I don't see that as a bad thing though
[10:56] because a a it's going to broaden out
[10:59] and b where would you rather the whose
[11:02] shoulders would you rather the risk be
[11:04] on other than Amazon and Google and
[11:06] whoever else is spending Microsoft
[11:08] >> I think the point is like it's it's also
[11:09] it's all tech companies that are
[11:11] spending on this which makes sense if
[11:12] you talk to people in Silicon Valley
[11:14] they're living in a different planet
[11:16] than everyone else right now in terms of
[11:17] their usage of AI
[11:18] >> to me that's like saying the back in the
[11:20] day the wrist of the warriors is is
[11:21] Steph Curry gets It's like well yeah I
[11:23] mean obviously but like who else would
[11:25] you want
[11:26] >> carrying the team?
[11:27] >> Well no the the thing is like will it
[11:29] broaden out? So uh TS Lombard did this
[11:32] piece they called it the Bini report
[11:34] kind of like the Satrini thing and they
[11:36] said let's look at a reasonable way that
[11:38] this could go wrong right let's let's
[11:40] lay it all out. I don't know if you read
[11:41] this. He said, "Listen, all the stuff
[11:43] people are worried about, that's what's
[11:45] going to by 2028. It's going to kind of
[11:47] that's so he capex recycling and vendor
[11:50] financing and offbalance sheet leverage
[11:52] and it's circular financing and all this
[11:54] stuff and the concentration of the
[11:55] customer is never broadened out." He's
[11:57] saying this is this is a reasonable way
[11:59] we could get an AI bust.
[12:00] >> Mhm.
[12:01] >> And but actually the the end of it was
[12:04] we get a minor minor recession. This
[12:06] isn't a financial crisis. We move on and
[12:08] this stuff works fine. To me, that that
[12:10] would be if if we did get a bust, that
[12:11] would probably be my baseline as well.
[12:13] Like, this isn't going to be some nasty
[12:15] financial crisis. We get a very short
[12:17] recession. It's not big in magnitude.
[12:21] You pick up the pieces, then they move
[12:22] on, and AI is still a big thing. That
[12:24] would be my baseline if there was a
[12:25] bust. I'm coming around. This is this is
[12:27] from the article. I want to get your
[12:28] take on this. And again, this this is
[12:31] like Catrini where it's like it's
[12:32] putting out this piece just to kind of
[12:34] say whatever. What people who worked in
[12:36] tech and finance didn't realize that
[12:37] people outside the ecosystem, you know,
[12:38] regular people just weren't that
[12:39] interested in AI. Yes, it made web
[12:41] search easier, but contrary to the
[12:43] assumption of Silicon Valley, regular
[12:44] people were never going to use AI to
[12:45] organize their lives or run workflow.
[12:47] Tech insiders were living in a bubble in
[12:49] at least two senses of the phrase. So,
[12:51] I'm just like, is that possible?
[12:54] Obviously, enterprise is the big thing
[12:55] and maybe consumer layer of tech is not
[12:57] as big as they thought it was going to
[12:59] be the beginning. Yeah, that's what I
[13:00] was say.
[13:01] >> Is it possible though that so it has to
[13:02] be enterprise that most people just like
[13:04] most people regular people never pick
[13:06] this up or at least they don't pick it
[13:07] up for a while till it's much better.
[13:09] >> Um, totally possible. I don't know that
[13:11] that would constitute a bus though. This
[13:13] this surprised me. So, Anthropic filed
[13:15] their prelim preliminary S1 yesterday.
[13:18] They're going public. Obviously, we know
[13:19] that. Um, in terms of the enterprise
[13:21] adoption, more this was uh
[13:25] much lighter than I expected. So, more
[13:28] than 11,900 customers with $100,000 or
[13:30] more of revenue. All right. I mean,
[13:32] basically nothing. More than 1,900
[13:35] customers with a million or more of
[13:37] revenue.
[13:38] And 250 customers with $10 million or
[13:42] more of revenue.
[13:44] I I don't know what I would have
[13:45] guessed, but only 250 customers. Now,
[13:48] wait a minute. Wait a minute. Wait a
[13:49] minute. Wait a minute. Wait a minute. Am
[13:50] I reading this entirely wrong? Hold on.
[13:52] Um,
[13:54] are these companies that are spending
[13:56] that much? Oh, it must be my bad.
[13:59] >> My general sense of the anthropic AI.
[14:01] >> Wait, did you hear what I just said?
[14:02] >> Yes. That's what
[14:05] >> So those numbers that I just gave, I in
[14:07] my head I I presented it as that's the
[14:11] revenue of the companies themselves.
[14:13] It's got to be the revenue that they're
[14:14] spending with OpenAI. Otherwise, it
[14:16] doesn't make sense. All right. So, in
[14:17] that case, it's incredibly impressive.
[14:20] Delete what I just said from your brain.
[14:22] They have 250 customers spending $10
[14:24] million or more.
[14:27] If that's the case, that's impressive.
[14:31] >> The my general read on the S1 from
[14:33] walking through it, and it's funny
[14:34] because what percentage of people do you
[14:37] think just took the S1 and put it into
[14:38] Claude or Chad GPT and said, "Give me
[14:40] the highlights."
[14:41] >> 99% of us.
[14:42] >> Yes.
[14:43] >> It's funny because I put it into Claude
[14:45] and it said, "I can't offer an opinion
[14:46] here because I'm conflicted." And I
[14:48] said, "No, give me your opinion. Damn
[14:49] it. I'll tell you what to do." AI uh but
[14:53] it seemed relatively like they have a
[14:54] ton of cash. Their margins are improving
[14:57] like this this is actually my general
[14:59] read of it is this is a real company.
[15:02] >> Okay. So
[15:02] >> I think a lot of people were like this
[15:04] is a fake company.
[15:04] >> So the Ed Zitron argument who's
[15:06] basically like this is all
[15:08] slight of hand smoke and mirrors. I
[15:10] don't know how and I'm sure he's
[15:12] pressing but I don't know how he does.
[15:14] Uh these some of these numbers are
[15:17] really impressive. So, this idea that
[15:20] they're burning so much cash, why
[15:22] they're raising so much cash, they have
[15:24] $141 billion of capital and cash and
[15:27] cash equ uh uh I'm sorry, they raised an
[15:31] aggregate they raised in aggregate $141
[15:33] billion
[15:36] and they have cash and cash equivalents
[15:38] of 112 billion and short-term
[15:40] investments of $19 billion. That's
[15:43] incredibly impressive. So, they've
[15:44] raised 140 and they still have 130.
[15:47] >> Yes. You're Yeah. Yeah. So, they're
[15:48] making money and their revenue numbers
[15:50] are like just going to the So,
[15:51] >> and their their operating loss for the 6
[15:54] months ending in 2025
[15:57] was 2.135 billion. The operating loss
[16:01] for the 6 months ending June 2026 only
[16:05] $693 million. That's pretty
[16:08] extraordinary. I do think there were a
[16:10] lot of like value investor balance sheet
[16:12] types who were looking like once we dig
[16:13] in the numbers you're going to see this
[16:15] is all fake but this is a real company
[16:16] and if your polyarket bet is they're
[16:18] going to go under uh you're going to be
[16:20] waiting a long time they have enough
[16:21] cash to last them a long long time even
[16:23] if things did go bad. So this is the
[16:25] other side of it though is that no this
[16:27] is these are real numbers. This is a
[16:29] real company and to your bull market
[16:31] continues point
[16:34] that that's probably where I'm leaning
[16:35] as well. Well, I think all right, on the
[16:37] one hand, I feel like, and I'm not
[16:40] dismissing the bear case at all, so
[16:42] please don't take that as my
[16:43] interpretation. I'm like, naive to the
[16:44] risk. I'm not at all. I get it. I
[16:45] totally get it. Everyone gets it. All
[16:48] weinging do is talk about the risks.
[16:49] That's all we do is talk about the risks
[16:52] and the forward multiple contracted
[16:54] because there's so much risk. We all
[16:56] know there's risk. Isn't there also
[16:58] another world where three years from
[16:59] now, four years from now, 10 years from
[17:01] now, we were like,
[17:04] why were we so bearish,
[17:05] >> right?
[17:06] >> Like why was everybody so afraid that
[17:08] this is going to be a bus when it was
[17:09] clearly like the thing? I continue to
[17:12] believe if and when there is a bare
[17:14] market for AI, it's going to be an
[17:16] unbelievable buying opportunity. I say
[17:18] that about every bare market, but like
[17:19] if if we get like a slowdown in this
[17:21] because just they they there's not a
[17:24] perfect handoff. It's going to be an
[17:26] amazing buying opportunity.
[17:27] >> Yeah. All right, let's move on. Um Sam
[17:31] >> Oh, go ahead.
[17:32] >> No, you you have anything more on this
[17:33] topic?
[17:34] >> No, no, go.
[17:35] >> Okay. Uh so this is wild. So, so on
[17:38] Black Monday, which is something that
[17:40] the internet was to varying degrees
[17:41] predicting a week ago, um the S&P 500
[17:46] fell what like 23% on the day.
[17:49] >> Wait, I think it's funny people were
[17:50] predicting this off of some like some
[17:53] weekend stock market thing. I
[17:55] >> I don't whatever. The internet predicts
[17:57] every can't take anything seriously
[17:59] anymore. But uh but anyway, the point is
[18:02] the mark was actually positive for the
[18:04] year
[18:06] uh in 1987. So to which after Black
[18:08] Monday, Ben would have said that what
[18:10] stocks are up two stocks are up 2%.
[18:12] >> This is actually kind of funny.
[18:13] >> Nothing to see here.
[18:14] >> When I first started my blog, this is
[18:16] probably back in like 2014, I wrote a
[18:18] piece and I said, would a repeat of the
[18:20] 1987 crash really
[18:21] >> be that bad? [laughter]
[18:23] >> And so I showed it and I said, "Most
[18:25] people don't realize that the market
[18:27] finished up that year." And I got an
[18:29] email from a guy and he said, "Hey,
[18:32] listen, dummy. When the 1987 crash
[18:34] happened, we didn't have news or social
[18:36] media. I was driving home from work and
[18:38] I heard about it happening on the
[18:40] radio." He's like, "I almost drove my
[18:41] car off the road because I thought we
[18:43] were going into a depression. No, we we
[18:45] had to go home in the news to watch it."
[18:46] He's like, "It was like the scariest
[18:48] thing I've ever ever lived through."
[18:51] Anyway, yeah. So, uh but it is kind of
[18:53] crazy. You know why? because the stock
[18:54] market was up 40% year to date heading
[18:56] into the uh the end of the summer and
[18:58] then it crashed. It's also kind of nuts
[19:00] that the 10-year Treasury was trading at
[19:02] 10% interest rates back then.
[19:04] >> Yeah, it is.
[19:05] >> People are like, "Screw this. I want the
[19:06] stock market."
[19:07] >> So, I'm I'm in conclusion, I'm just a
[19:09] little bit less worried because
[19:10] everybody seems to be so worried and
[19:12] it's reflecting the valuations. If the
[19:13] stock market was up 38%
[19:17] and the forward PE was at 33 times,
[19:20] believe me, I would be singing a
[19:21] different tune. So, do you think when
[19:23] Anthropic does go public that it's going
[19:26] to be just kind of a eh me like you
[19:29] don't you don't think it's going to like
[19:30] go crazy on day one because the
[19:32] valuation is already so high?
[19:34] >> Go crazy to the upside. Oh, I have I
[19:36] mean I have no prediction. I don't know.
[19:38] >> Yeah. I also think I also think because
[19:41] I really do think that Hyperlid
[19:43] >> is changing the game here because every
[19:45] time there's an event like yesterday
[19:48] like anytime something's happening I
[19:50] pull up the chart on Hyperlid
[19:51] >> and I think it's less of a shock to the
[19:53] system like we're we're watching the
[19:55] preview we see it every single day
[19:58] there's 20 $20 million trade in the last
[20:00] 24 hours so we see the price it's not
[20:02] like and I know it's a it's a derivative
[20:04] or synthetic price whatever you want to
[20:05] call it but I uh I I I don't I I don't
[20:08] want to say I would be surprised if a
[20:10] feller gained 20% on the on the first
[20:12] day.
[20:13] >> I'd be moderately surprised.
[20:15] >> It's 80% of a public company already
[20:16] with all the numbers people know. Right.
[20:18] Uh
[20:19] >> uh Fed Woge uh Nick at the Wall Street
[20:22] Journal said Thursday 10-year Treasury
[20:24] decline of.19 percentage point.
[20:27] >> Hold on, Ben. I a lot of the listeners
[20:28] don't know what Fed Wogege means.
[20:30] >> Oh, sorry.
[20:32] You don't think we've got enough inside
[20:34] jokes here? Okay. [laughter]
[20:35] >> Well, there's there's new listeners. So
[20:36] there was this guy who used to cover the
[20:37] NBA, Adrien Wjinowski, and he was the
[20:40] breaking news guy before shams. And now
[20:43] the person who has been in that seat at
[20:45] the Federal Reserve is this guy Nickos,
[20:47] who Ben calls Fed Wge.
[20:49] >> Yes. Okay. Glad we got that out of
[20:50] there. Uh and he used to be a different
[20:52] guy. Was it uh
[20:53] >> John John Hillsenth?
[20:54] >> Yeah. Uh so he says that almost 20 basis
[20:57] point fall in the 10-year in one day.
[20:59] this largest single day yield decline
[21:01] since March 10th, 2023, which is the day
[21:03] Silicon Valley Bank FE Valley Bank
[21:05] failed. It is funny how quickly that
[21:08] narrative shift happened from, oh, rates
[21:09] are rising from fiscal concerns to no
[21:11] rates are falling, it's AI slow or
[21:13] whatever. Like that whole thing was AI
[21:17] essentially, right? To me though, this
[21:19] is a bare case like the access to
[21:22] capital if that spigot turns off. And
[21:24] the Nebia CEO, one of these uh Neo cloud
[21:27] providers was giving an interview with
[21:29] somebody where he basically said, "Yeah,
[21:31] last week we we can't raise any more
[21:32] money."
[21:33] >> But this is why they're all doing equity
[21:34] raises now. So did you saw today Nvidia
[21:37] said they're going to invest in Meta's
[21:39] equity raise. So they're
[21:39] >> Oh, really?
[21:40] >> Yes. So they're this is why they're
[21:42] doing equity raises because they don't
[21:43] want to have to be relying on the debt
[21:44] markets. So bonds,
[21:46] >> but but this like the what you just said
[21:48] like, oh, Jensen's bailing us out again
[21:50] or whatever.
[21:51] >> Yes, it is it is a global conspiracy to
[21:55] keep this thing from busting.
[21:57] >> Yes. Yes.
[21:58] >> Everybody wants this to work out.
[22:01] >> But the thing is, so my take after that
[22:03] last week was that was the day that the
[22:05] Q's were down almost 3%. Like we had a
[22:07] pretty nasty day in the market. There
[22:08] was a there was actually a one bad day
[22:10] in F, which is the 7 to 10 year Treasury
[22:12] was up 1%. So
[22:13] >> it wasn't one bad It was one bad day in
[22:15] the mega cap index.
[22:16] >> Yeah, sorry. So, but NASDAQ 100 down 3%.
[22:20] 10-year treasuries up 1%. Bond, if
[22:22] you're really nervous about AI, bonds
[22:24] are the best hedge you can get. Like, if
[22:26] you want a one for one hedge, I think
[22:28] that's it. It's bonds because they're so
[22:31] tied to the debt market. Now,
[22:32] >> I would also offer the uh the Halo
[22:35] stocks or like the lowvall stocks. Yeah,
[22:39] >> because when the when the AI trade was
[22:42] unwinding or has been unwinding the past
[22:44] couple of weeks, the lowV stocks had a
[22:45] V-shaped rally and you we haven't seen
[22:47] it in a long time. These are the anti-
[22:48] AAI trade.
[22:49] >> So,
[22:50] >> but it's awesome that you can do that.
[22:51] That's there something exists. It's not
[22:53] everything going up and down together.
[22:55] >> This segment is sponsored by PIMCO ETFs.
[22:57] They have an incredible chart that they
[22:59] shared with us um that shows the
[23:02] starting yields today or the yields
[23:04] today versus where they were at the end
[23:07] of 2021. And we got an email asking you
[23:11] how the heck are you getting 5% in bonds
[23:14] and you said the egg,
[23:16] >> right?
[23:17] >> And so so whatever uh point is this core
[23:21] bonds so let's use that as a proxy for
[23:23] for the egg. core bonds were 1.7%
[23:27] five years ago and people held bonds
[23:30] five years ago because owning 100%
[23:33] stocks just is
[23:35] too uh it's just too much smoke for most
[23:39] investors. Okay, so it wasn't great but
[23:41] it was what it was.
[23:42] >> A lot of complaining back then
[23:43] rightfully so about about bonds.
[23:45] >> 5.6% today for core bonds.
[23:48] >> Well, look at all the different yields
[23:49] too. corporate bonds, high yield bonds,
[23:52] emerging market bonds, munis, it's
[23:54] across the whole bond spectrum. Even
[23:56] cash is still paying 4%. So yeah, now
[23:58] versus back then, investors have so many
[24:00] other choices. And that's why I keep
[24:02] saying if you're really worried about
[24:04] something with the risk part of your
[24:06] portfolio, bonds are the hedge. It's
[24:08] it's so much easier.
[24:10] >> Tax equivalent yield on munis at the
[24:12] highest marginal tax rate is 7.9%.
[24:16] >> That's crazy, right?
[24:17] >> Unreal.
[24:17] >> Yes. Yes. If you live in California, New
[24:19] York, like that's a that's a pretty darn
[24:21] good deal. So, last week you talked
[24:23] about how it must be glorious to be a
[24:26] person like your wife or my wife who
[24:27] just isn't paying attention to this
[24:29] stuff all the time and like doesn't know
[24:30] that something's gone in the market. I
[24:32] got a text message from a friend last
[24:33] week, a high school friend who's not in
[24:35] the markets at all. And he said, "Hey,
[24:38] I'm trying to understand the markets
[24:39] more. It's quite a learning curve. Can
[24:41] you explain to me what this is?" is and
[24:42] he sent me this video of a a one of
[24:45] these scary YouTube channels about how
[24:47] um bond yields are rising cuz this is
[24:49] it. This is the debt spiral. This is,
[24:51] you know, the the scary stuff. It was
[24:52] probably had flames in the background.
[24:53] And I clicked on this and I'd never
[24:55] heard of the guy who did the video. I
[24:56] don't want to share it, but it had 40
[24:58] million views.
[24:59] Uh just, you know, this is it.
[25:02] Inflation's out of control, bond yields,
[25:03] all this stuff. Like this is the end of
[25:05] the republic, all that stuff. And I'm
[25:07] I'm just thinking in my putting my in my
[25:09] friend's shoes, you know, he he's
[25:11] mid-40s guy. Really trying to understand
[25:13] the markets. Now imagine trying to apply
[25:16] logic to this market and try to
[25:18] understand it coming in like just blind.
[25:21] So uh this is from another one from your
[25:23] research. Semiconductor earnings are up
[25:26] 176% year-over-year. Yet the industry's
[25:28] PE has collapsed. The market doesn't
[25:29] believe its own profit forecast. So the
[25:31] the DRRAM ETF, Round Hill Memory ETF,
[25:34] which is all these companies, is in a
[25:35] 40% draw down right now. So earnings are
[25:38] up 176% year-over-year. The ETF in this
[25:42] market is down 40% from the highs. Still
[25:44] up 75% on the year. So here's my
[25:46] question to you in this scenario, since
[25:50] you say, well, I'm leaning this is going
[25:51] to continue. Are you a buyer of DRAM
[25:54] here?
[25:55] >> Oh, yeah. I mean,
[25:58] I don't own it. [laughter]
[25:59] >> Okay. But if I had to buy or sell, yeah,
[26:02] I buy,
[26:03] >> right? It's down 40. So this is why it's
[26:06] so hard. So Meta was up, we talked about
[26:08] this. Meta was up 40% in a month. This
[26:10] is a 1.6 trillion company because, hey,
[26:12] Muse is going crazy. Then I I don't know
[26:14] why. It might have been the funding
[26:15] stuff. It might have been I did see some
[26:17] data saying, "Hey, people use Muse on
[26:19] day one. Maybe on day 10 they don't use
[26:21] it as much." Whatever. It's down 18% a
[26:23] month later.
[26:24] >> So Meta just filled that gap. You know,
[26:26] I'm a big gap gets filled guy.
[26:27] >> Yeah. So that's wild. Um, even after
[26:32] hours in the earnings report, everybody
[26:34] was like, "Holy they are knocking
[26:36] it out of the park." The stock was
[26:38] trading at 750 in the after hours. It
[26:39] was up 8%. The next day it closed at
[26:41] like uh what did it close at? 650. It
[26:44] was a 15% swing. So there is bent to
[26:47] your like earlier point. Nobody has any
[26:50] idea,
[26:50] >> right?
[26:51] >> Obviously obviously us included. Uh no,
[26:54] we are all guessing.
[26:57] But it's just, this is my thing about
[26:59] the mini booms and busts, how quickly
[27:00] things are getting priced in. This is
[27:02] what we've never had before. Things get
[27:05] priced in so quickly that you can't, if
[27:07] you're someone who's just relying on
[27:08] fundamentals. If if you like pound the
[27:11] table on something in the AI trade right
[27:13] now, you can look like an idiot a week
[27:15] later, even though you looked like you
[27:17] were right a week before. Uh, I got one
[27:19] other stock picking thing here. I'm
[27:21] going to give you a little tip here.
[27:22] Okay, so I go to my local Planet
[27:24] Fitness. It's right down the street from
[27:25] me. $10 a month. I still don't know how
[27:27] they do it. And about earlier this year,
[27:31] I noticed they they tried to fix the
[27:32] drinking fountains. They weren't
[27:33] working. And the drinking fountains used
[27:35] to be ice cold, like really cold. And I
[27:37] love a good cold water after workout,
[27:38] right? It's great. You know what? Put
[27:41] your face in it. It's probably really
[27:42] disgusting, but whatever. I noticed that
[27:45] the the water wasn't ice cold anymore.
[27:46] And in fact, it was like room temp. I'm
[27:49] like, "Oh, they'll fix this." Like 9
[27:50] months later, it's still like that. And
[27:52] you know what? I So I said, "How's the
[27:54] stock doing? This stock is down 50% this
[27:56] year in a 50% draw down. That should
[28:00] have been a sign to me. They're not
[28:01] paying for cold water anymore. This is
[28:03] the company that So, I looked at it a
[28:04] little bit and I said, "Why is this
[28:05] stock getting killed so much?" So, they
[28:07] charge again $10 a month for gym
[28:09] membership, which is nothing. And the
[28:11] whole reason behind it is people sign
[28:14] up, they have it taken out of your bank
[28:15] account, and then people just never show
[28:16] up, right? So, it's they just lock in
[28:19] people to pay and pay and pay.
[28:21] uh they were going to raise prices and
[28:23] people fought back and said no. Like can
[28:24] you imagine like if they would raise
[28:26] prices from $10 a month to $12 a month
[28:29] that's nothing but people fought back on
[28:31] it.
[28:31] >> Well they were they were in the consumer
[28:33] inertia basket. So when meta when muse
[28:35] and instant came out they got crushed.
[28:37] By the way, I am tripling down on my on
[28:40] my theory of inflation in services at
[28:44] the upper end is going to keep getting
[28:50] crazier.
[28:52] So Josh was talking about Justin wanted
[28:54] to go to a concert last week. I don't
[28:56] know. I don't know who the a band for
[28:58] younger kids or a DJ who would. I don't
[29:00] know. And it was 600 bucks at Barclays.
[29:03] The tickets for experiences where it's a
[29:07] limited number is going to go up 8 to
[29:10] 12% a year for the next 10 years.
[29:13] Because remember in 2021 where
[29:16] corporations used inflation as an excuse
[29:19] to jack up prices even if even if where
[29:23] they were doing business was not
[29:25] impacted by inflation. They were like
[29:27] well everybody else is. Same thing same
[29:29] thing is going to happen here. There's
[29:30] there's no reason for these companies
[29:32] not to continue to raise prices at the
[29:33] upper end of of the top of the K.
[29:35] >> But I agree with you, it's it's the
[29:36] services, not necessarily the good
[29:38] because if you actually if you look at a
[29:39] lot of the luxury stocks, like they're
[29:41] getting killed, but I think you're
[29:43] right. It's the service things where
[29:44] like the hotel prices and all this stuff
[29:46] like
[29:47] >> $150 $150 for for uh the spa last week.
[29:51] >> I guess somebody's paying it.
[29:53] >> Yes, it is. Someone did make a funny
[29:55] joke that it's funny that Michael paid
[29:57] money for uh getting rehydrated and then
[29:59] he wanted to go in the sauna and get
[30:01] dehydrated.
[30:02] >> To be clear, I did not I did not
[30:04] actually spend $150. Um but yes, that
[30:06] was a funny email. Uh okay, this is
[30:09] something. Initial jobless claims down
[30:11] to 194,000 last week from Kevin Gordon,
[30:14] the fourth lowest level going back to
[30:16] the 1960s. So of course you could say
[30:18] this and say all of the AI fear is
[30:20] overblown, not happening. I still think
[30:23] that is way premature, way way way
[30:26] premature to say that it's over. It's
[30:28] settled. We've seen how AI is going to
[30:30] impact the labor market and there's
[30:31] nothing to see.
[30:31] >> Yeah, there's no spiking of footballs
[30:33] now. But I am still really surprised by
[30:35] these labor market. If you think about
[30:37] where the models are and the predictions
[30:39] people made, it is surprising that we're
[30:41] not seeing more of this. So there was
[30:43] yesterday Microsoft announced
[30:44] >> Wait, hang on. Before you get to that, I
[30:46] just want to It's funny because even
[30:47] before I was thinking about this uh
[30:50] >> before the announcements, I went to this
[30:52] website. Remember we used to track this
[30:54] pretty closely. What What site is this?
[30:56] Uh
[30:58] is that layoffs.fyi?
[31:00] Remember this site that we were that we
[31:02] were looking at a lot during the
[31:03] pandemic?
[31:04] >> Mhm.
[31:04] >> So it shows employees laid off,
[31:07] companies with layoffs, AI attributed,
[31:08] non AI, and there was quite a bit in Q1,
[31:13] I think, as we all remember. And we were
[31:15] talking about, oh, companies are just
[31:16] they overhired, right? Like Microsoft
[31:18] overhired and and uh and Jack Dorsey's
[31:21] company, they overhired and they're just
[31:23] using this as an excuse. Well, actually,
[31:26] we really haven't seen much of that.
[31:27] It's come down quite a bit. And then
[31:31] yesterday, we got an announcement from
[31:34] Microsoft. How many people are they
[31:36] giving the option to?
[31:38] >> So, this is interesting. So, Microsoft,
[31:39] so they have 220ome,000
[31:41] employees worldwide. They said they gave
[31:44] 60,000 people the option to take an
[31:45] early retirement severance package. This
[31:47] is this is maybe just a coincidence, but
[31:50] how many employees has Microsoft added
[31:52] in the 2020s?
[31:54] What would you guess? Like so like the
[31:56] all the hiring that that tech firms did
[31:57] in the early 2020s, how many have they
[31:59] added to their company in the 2020s?
[32:00] >> So they have 220,000 globally.
[32:02] >> Yeah. So what have they added this
[32:03] decade?
[32:04] >> 50. So they've added 60 and they just
[32:07] gave 60 the but the thing is if the tech
[32:10] firms aren't going to rightsize and you
[32:13] use productivity from the AI tools and
[32:14] who is right
[32:15] >> so it h they have to be the first ones
[32:16] but I agree the Kevin Gordon thing so I
[32:19] I got some charts from uh exhibit A in
[32:21] here the unemployment rate is still
[32:23] 4.2%.
[32:24] >> Okay. It was never that low in the 80s
[32:26] not even once. It wasn't that low in the
[32:27] 90s until 1999. Job openings in the US
[32:30] right now are higher now than they were
[32:31] in all of the 2010s.
[32:33] >> Mhm. job loss, layoffs, initial
[32:35] unemployment claims, like you said,
[32:37] about as low as it's been. So, how are
[32:39] we still having no labor market in how
[32:41] is this possible? The models are getting
[32:42] better. Why is it just no just I agree
[32:45] you can't spike the football and say
[32:46] this is never going to happen, but why
[32:48] is it not happening? I don't get it.
[32:49] >> So, I was about to say it's coming and I
[32:51] don't want to like say that doomer with
[32:53] with any certainty. Um cuz I don't know
[32:55] how bad it's going to get, but we have
[32:58] obviously not seen it yet. Whatever it
[33:00] will be, we have not seen it in the data
[33:02] yet, which is surprising. Okay. Anyway,
[33:04] to that point though, Carl Kinttonia
[33:06] tweeted this from Goldman. We are
[33:08] starting to see clearer signs that the
[33:11] AI impact is spreading beyond the
[33:13] technology sector. The share of US firms
[33:15] that have adopted AI in regular business
[33:17] functions now shows a statistically
[33:20] significant [clears throat] negative
[33:21] correlation with employment growth. So,
[33:24] they have they have uh whatever they
[33:27] charted this by the Am I saying I think
[33:28] I'm saying to that point way too many
[33:29] times.
[33:30] >> I didn't get that. Ostensibly you are.
[33:33] >> No, I'm not. I that is that word is not
[33:35] in my vocabulary.
[33:36] >> I'm kidding. Uh this this is a reach
[33:38] just I I don't know why you you hear the
[33:41] anecdotes and I hear people say I'm I'm
[33:42] hearing this more than ever about people
[33:44] who are doing more with less and it's
[33:46] still not showing up in the data. And
[33:48] obviously there's a lot of
[33:49] >> well no it's more with the same. It's
[33:50] more with the same. you are seeing you
[33:52] are seeing productivity boost because
[33:54] revenue is is growing faster than
[33:56] headcount.
[33:57] >> But but it's really not showing up in
[34:00] the general economic productivity
[34:01] numbers yet,
[34:02] >> right?
[34:03] >> That's that's the thing that's hard to
[34:04] wrap your brain around. So is it is this
[34:06] a 2030 story
[34:08] >> because I feel like we do we do keep
[34:09] pushing this out, pushing it away,
[34:10] pushing it away and obviously
[34:13] >> No. No, I don't think so. It's also it
[34:16] also could be that the US economy is
[34:18] like turning a battleship and like
[34:20] you're not going to just flip this
[34:21] overnight. Like the fact that we did for
[34:24] whatever percentage of the workforce go
[34:26] from not from working in office to
[34:28] working remotely is kind of insane that
[34:29] it happened that quickly, right? And I
[34:31] think that's how people want this AI
[34:33] thing to play out or think it's going to
[34:34] play out and it's just not.
[34:36] >> Um, all right. Bank of America reported
[34:39] earnings last week, and there's a lot of
[34:41] rich data in there that I like to look
[34:42] at to determine the overall health of
[34:44] the consumer. And one of the charts in
[34:46] here that caught my attention was the
[34:48] credit and debit card year-over-year
[34:50] growth.
[34:52] And what stands out to me is uh
[34:56] entertainment and travel. Holy So
[34:58] entertainment, the transaction number is
[35:00] up 7% year-over-year, but the dollar
[35:03] volume is up 13%. Okay, so there's
[35:05] inflation there, obviously,
[35:07] >> right? Travel, same thing. Transactions
[35:09] are up 4%. Dollar volume up 7%.
[35:13] Interestingly, retail going the other
[35:15] way. Transaction uh is up 6%, dollar
[35:20] volume is up 5%.
[35:22] How about that? Kind of kind of
[35:24] interesting.
[35:24] >> Matt Klein had a different had one
[35:26] showing this kind of similar I put in
[35:27] here. So, he says Americans are boosting
[35:29] their spending on goods and at bars and
[35:31] restaurants by 8% a year. So, spending
[35:33] at bars and restaurants alone is rising
[35:35] 9% a year. three percentage points
[35:37] faster than 2017 to 2019.
[35:39] >> Wow.
[35:40] >> So, you're right. People are that the
[35:42] whole service experience thing, people
[35:43] are still doing this stuff.
[35:46] >> And I think, let me let me just fast
[35:47] forward to the great quarter section. I
[35:50] think a lot of this is coming from young
[35:51] people. So, check this out. You know,
[35:54] we've we've we've spoken about whenever
[35:56] AMX reports, they always break out their
[35:58] share of spending between Gen Z and
[35:59] millennials, and we're always like,
[36:00] "Huh, look at Gen Z and millennials
[36:02] coming up the rear." So this chart here,
[36:05] Ben, is from 2022. And in 2022, they
[36:09] compared millennials and Gen Z spending
[36:11] as a percentage of of their entire pie
[36:14] compared to pre- pandemic.
[36:17] So this is not like coming off a small
[36:19] base. We're looking at the entire pie of
[36:21] AMX's spend.
[36:23] Gen Z and millennials were 20% in 2019
[36:28] and in by 2022 they were 30%. Fast
[36:32] forward to today. Look at the next
[36:33] chart. It's 38%.
[36:36] >> Wow.
[36:36] >> So, rich kids,
[36:39] kids with money are spending so much of
[36:43] it.
[36:45] >> I don't have the numbers to quantify
[36:47] this. Maybe Nick Mullie could do this
[36:49] for us. It feels to me like wealth
[36:51] inequality has never been greater among
[36:53] young people.
[36:54] >> That's Yes. Because it felt like when
[36:57] when we were coming up after the GFC,
[36:59] millennials kind of felt like we were
[37:00] all in the same boat.
[37:01] >> Yep.
[37:02] >> And I think that is also driving a lot
[37:03] of angst among young people because
[37:04] they're saying, "Look at these other
[37:06] young people getting rich and I'm being
[37:08] held behind. I'm being held back."
[37:10] >> I didn't know a single friend. Now
[37:13] granted, I graduated college alone, but
[37:15] even still amongst like my core group of
[37:17] friends, nobody was killing it.
[37:19] >> No, you didn't have people like that
[37:20] that's like, "Oh my gosh, they're doing
[37:21] so well in their mid20s." No one. Yeah,
[37:23] you're right. There was no one. it was
[37:25] you should be lucky to have a job. You
[37:27] can't ask for a raise. All that stuff.
[37:28] >> And I think it's quite common for
[37:32] uh later genzers, the ones that are like
[37:35] 27 to whatever that are making six
[37:37] figures. Like that is that's that's
[37:41] how that's everywhere,
[37:42] >> right? Yes. So that's also driving the
[37:45] angst among young people who feel like
[37:46] they're left behind. Like I'm not making
[37:48] any money, but all these other young
[37:49] people are. They're killing it. That's
[37:51] tough. All right. Are you still using
[37:53] the your what's what's your one called?
[37:56] >> I use Instinct and
[37:58] >> Instinct. That's it.
[37:59] >> Yes, I'm using it all the time.
[38:00] >> How many people emailed us saying, "Hey,
[38:01] Michael, give me a give me a referral
[38:03] code."
[38:04] >> I'm using it all the time.
[38:06] >> So, this is from
[38:08] >> as an example.
[38:10] Uh, so I'm taking Kevin and Dan to the
[38:14] Giants game on November 12th. By the
[38:16] way, we I bought I bought us tickets
[38:18] after the Cowboy after week one. And
[38:20] then after week two, I was like, "Oh,
[38:22] are we really still going to this game
[38:23] now? We're in first place. Could be a
[38:25] fun game." Anyhow,
[38:26] >> hey, you got an old mission guy, a
[38:27] quarterback, old Jing,
[38:29] >> right?
[38:30] >> Uh I was super bearish on him, but he
[38:32] did look good. Anyway, point is this. Um
[38:36] a friend of mine has season tickets and
[38:39] he said, "Hey, do you guys want to just
[38:40] come with me?" So, what I did was I told
[38:46] Instinct, "Hey, what can I sell the
[38:47] tickets for based on comps around where
[38:50] my seats are?"
[38:53] Uh, it told me, I said, "Okay, list them
[38:56] and if they don't sell by 6:30 tomorrow,
[38:59] drop the price by whatever 10%." And
[39:02] it's I mean, it's a micro example, but
[39:04] that's yes, I'm using all that.
[39:05] >> That's not bad. All right. So, Axios via
[39:07] Joe Weisenthal. Major US banks are
[39:09] detecting unauthorized third party AI
[39:11] agents operating inside customer
[39:13] accounts with some agents attempting to
[39:14] take actions that appear to be
[39:15] independent of user instructions sources
[39:17] to Axios. Now this could be banks
[39:20] >> sources.
[39:21] >> This could be obviously this is a lot of
[39:23] >> the source the bank
[39:24] >> this is banks who just want to get ahead
[39:25] of this and want to have regulations and
[39:28] so there could be part of that. I'm just
[39:31] I'm still in the waiting phase of I'm I
[39:34] want to use the stuff I said I'm but I'm
[39:36] I'm waiting till we iron all this stuff
[39:37] out.
[39:38] >> Why? You don't have to give it You don't
[39:41] have to give it. First of all, uh Chase
[39:43] already booted them. Most banks booted
[39:44] them. They uh the brokerages booted
[39:46] them. So, you can't they can't access it
[39:47] anyway. So, why would you why would you
[39:51] deprive yourself?
[39:53] I
[39:54] >> I guess the point is if it doesn't have
[39:55] access to stuff like that, what's I
[39:56] don't have other stuff to use it for
[39:58] really yet.
[40:01] That's all. I don't I don't have like a
[40:02] ticket scheme like you do. You're
[40:03] selling you're buying and selling
[40:04] tickets all the time. You need an AI
[40:06] agent to help with your ticket sales
[40:08] >> because [clears throat] you're
[40:09] constantly buying and selling tickets
[40:10] and fighting with ticket master.
[40:11] >> All right. So, I I I went to uh Nick's
[40:15] opening night. And I am definitely
[40:19] definitely not approved with gambling or
[40:22] prediction markets. Like I love the
[40:26] action.
[40:27] >> Yeah. Yeah, you told us you how many
[40:29] thousands of bets you've made or
[40:30] something, whatever. You you bet a lot.
[40:31] >> Yeah, I bet a lot. Uh
[40:33] >> you and you and I like to play a little
[40:34] blackjack. We we Yes, you're right.
[40:36] We're not gambling prudes.
[40:37] >> I got hosed at the win. Holy canoli
[40:42] straight down. But anyway, that's not
[40:44] the point. This is the point. I'm
[40:46] walking to the garden and on the corner
[40:49] of 35th Street and 7th Avenue, you know,
[40:53] like those digital towers that have, I
[40:56] guess, advertising, whatever. So, it was
[41:00] the bets being placed on the Knicks
[41:02] versus the 76ers. And you saw the bets
[41:06] going through like $200 on the Knicks,
[41:10] $74 on
[41:11] >> King
[41:13] >> just [snorts]
[41:13] >> Oh, man. And I just thought I don't like
[41:17] this. I just don't like it. I don't
[41:20] think And listen, that's not a that's
[41:21] not that's not a contrarian take. I
[41:22] don't think anybody likes it. I think we
[41:24] all agree like this sucks.
[41:26] >> No, a lot of people like it who use it
[41:30] obviously. But do you think that there
[41:32] like what percentage is that there going
[41:34] to be some huge push back in the next 10
[41:36] years or something where regulators come
[41:38] in and really slap these companies on
[41:40] the wrist? Or is it no that this is it's
[41:42] out in the open now and it is what it
[41:43] is? No, it's over. It's It's Yeah,
[41:45] >> sure feels like that.
[41:47] >> Now, maybe maybe it just becomes so
[41:50] common place that nobody cares and
[41:51] whatever, but I don't know. There's
[41:53] there's just a lot about it that is
[41:55] really icky and dangerous and whatever.
[42:00] >> And for but for whatever reason, a lot
[42:02] of people find it very entertaining.
[42:04] >> I love it. I love gambling.
[42:06] >> And what percentage of I don't know, 3%
[42:08] of people are going to have their lives
[42:10] ruined by it.
[42:10] >> Right. That's the bet we've made with
[42:13] it, I suppose. Uh, all right. Here's a K
[42:15] thing. I talked about how there's not
[42:16] many things that are shaped like a K.
[42:18] Here's here's a new one. Uh, Wall Street
[42:20] Journal says, "America's new housing
[42:22] market is all about luxury and it runs
[42:23] on cash." And it's basically saying
[42:25] mortgage rates are so high now that it's
[42:28] the a lot of the stuff that's happening
[42:29] is just people buying in cash. And like
[42:32] luxury prices are the only things going
[42:34] up now. Like if you're trying to buy a
[42:35] house in San Francisco with all the AI
[42:36] money, obviously, good luck. But this is
[42:39] interesting. It said, "So, Lenar is
[42:41] entry- level home builder and their
[42:44] prices are falling. Toll Brothers,
[42:46] luxury home builder, their prices are
[42:48] actually rising."
[42:50] So, and they said all cash buying is a
[42:52] big part of it. Toll Brothers and their
[42:53] their average price of a home is almost
[42:55] a million. $996,000.
[42:58] Said,
[42:58] >> "Guess what? Toll Brothers, the stock
[43:00] looks way better than LAR.
[43:02] >> Way better. Way better."
[43:04] >> So, they said in their last earnings
[43:05] report, 25% of the buyers are paying
[43:07] cash. And again, this is almost a
[43:08] million dollar houses. So this is So how
[43:11] much do you think of this as borrowing
[43:12] in stock portfolios though?
[43:14] >> Well, it's borrowing from some pace.
[43:16] >> We always ask like where do people get
[43:17] cash to buy a house?
[43:19] >> Parents.
[43:20] The parents portfolios.
[43:22] >> Well, I think this is also
[43:24] people, you know, 40% of people have
[43:26] houses paid off. So this is baby boomers
[43:27] who own a home free and clear who have
[43:29] equity. They sell a house, they pay for
[43:30] the next one with cash technically and
[43:32] don't take out a mortgage.
[43:34] So this is a K thing. You can transact
[43:37] in the housing market if you have cash
[43:38] or if you have equity.
[43:40] >> So PY reported this week and it's bad.
[43:42] The CEO said, "Consistent with all the
[43:44] reporting and commentary swirling around
[43:46] the current state of the US housing
[43:47] industry, we experienced a notable
[43:49] slowdown in home buying demand as we
[43:51] move through the third quarter and
[43:53] interest rates surged higher."
[43:56] uh they said
[43:59] traffic to our communities was down 14%
[44:01] from the prior year and on a sequential
[44:04] basis meaning from the last quarter down
[44:07] 11%.
[44:10] >> So [snorts] do you know how what do you
[44:11] know what
[44:13] >> mo most of the missing traffic obviously
[44:15] was first-time home buyers who aren't
[44:18] who don't have the down payment from the
[44:19] sale of a previous house. This is this
[44:21] is just brutal brutal brutal brutal. The
[44:24] homebuilder ETF XHP, what's it in a draw
[44:26] down right now if if you had to guess?
[44:28] >> Uh 48%.
[44:32] >> 22%.
[44:33] >> Huh?
[44:34] >> How is it possible that this thing is
[44:35] not in a greater draw down than it is?
[44:38] >> Are people just still holding on hope
[44:41] that rates are going to fall and like I
[44:42] don't know why. Why is this thing not in
[44:44] a 60% draw down?
[44:45] >> What about what about ITB? It's a little
[44:47] bit of a different basket, but 22. Wow,
[44:50] that's very surprising.
[44:51] >> 30%. Okay.
[44:53] >> I like you. I would have thought this
[44:54] these would be in a 50% draw down.
[44:56] >> Well, the home build the home builders.
[44:58] >> Yeah, they've they've managed this a
[44:59] little better than
[45:01] >> a company reported earnings this morning
[45:02] called Whirlpool. Whirlp Whirlpool. I
[45:05] don't know why that word is hard for me
[45:06] to say. They make durable goods like
[45:08] kitchen applian kitchen appliances
[45:10] >> based in West Michigan. Ben Harbor.
[45:13] >> Guess how much that stock is down from
[45:14] its highs. I'll tell you 90%.
[45:18] [snorts]
[45:21] And this is very rare to see a company
[45:23] revenue just the revenue got cut in half
[45:27] over the last couple of years. Why would
[45:29] that be?
[45:31] >> Yeah, cuz no one's buying new houses and
[45:33] getting new appliances.
[45:35] >> Yeah, that's it. It's
[45:36] >> Speaking of which, last night I came
[45:38] home, my wife goes, "The fridge door
[45:39] won't shut." What do you mean the fridge
[45:41] door won't shut? It like the flap thing
[45:42] it it won't it it's not it's not We're
[45:45] going to have to get a new fridge. I'm
[45:45] like, "We're not getting a new fridge."
[45:47] So, I'm taking apart my fridge and I'm
[45:48] put putting pictures into chat GBT and
[45:51] turn this and change this. Guess what?
[45:53] Fix the fridge. Door shuts.
[45:55] >> Good for you.
[45:56] >> Can you I've got a kitchen story myself.
[45:59] >> Okay.
[45:59] >> Um
[46:02] my oven my oven like I don't doesn't
[46:04] really fully heat all the way. So, I was
[46:05] baking something last night. I guess the
[46:07] Instagram got me Ben trying to like eat
[46:10] healthier these days a little bit. And
[46:12] so, I'm getting served a lot of food
[46:14] stuff. For example, if you mix either
[46:18] black beans or chickpeas with eggs and
[46:21] cocoa powder and you bake it, it's like
[46:22] a brownie hack. It's not a brownie hack.
[46:24] Tasted like But I've I've done it
[46:26] twice in the past week and I keep
[46:28] leaving the oven on and I always leave
[46:29] the stove top on. It's like I've got the
[46:31] the add brain. I always forget to turn
[46:33] the stuff off. And so last night Robin
[46:35] exploded. She's like, "Stop cooking.
[46:37] [laughter]
[46:38] You're going to burn the house down."
[46:40] >> [snorts]
[46:40] >> And in 2021, I suppose, remember I left
[46:44] my barbecue on overnight and I melted my
[46:47] siding.
[46:48] >> Can you tell Instinct to turn my stool
[46:50] for me? Hey, AI agent, turn my stool for
[46:52] me in 10 minutes.
[46:54] >> Uh, I'm impressed. You fixed the fridge.
[46:57] >> I mean, all I had to do was turn one of
[46:58] the things, so like it it moved it up a
[47:00] little bit. Like,
[47:02] >> hey, don't sell yourself short. That's
[47:03] not nothing.
[47:03] >> It took me a long time to do as well.
[47:06] >> Um, all right. Uh,
[47:10] what is this for? I pulled this
[47:17] from Synchrony Financial. I can't even
[47:19] remember. I'm sorry. Uh,
[47:22] all right. Whatever. This is This is
[47:23] from an earnings report. I I I shame on
[47:26] me. I think it's from Synchry Financial.
[47:27] Synchry Financial is a company that
[47:29] issues like the store credit cards. You
[47:30] go to Macy's, you buy something. Do you
[47:32] want to save 10% with the credit card?
[47:33] Follow me?
[47:34] >> Yep.
[47:35] >> Okay.
[47:37] So the CEO said uh higher gas prices,
[47:40] fairly broad-based inflation, and then
[47:41] you you look at consumer confidence has
[47:43] been weak all year, but it's not
[47:45] impacting none of these factors are
[47:47] really impacting consumer behavior. Um
[47:50] as you mentioned, uh uh consumers
[47:52] continue to spend through it. Credit
[47:54] looks really good.
[47:56] Uh
[47:58] purchase volume up. Yeah, this is uh
[48:00] this is synchrony. Oh, this is the quote
[48:02] that I want to read. I'm sorry. uh Ally
[48:04] Financial, this is a great quote.
[48:07] Uh again talking about the same things,
[48:10] right? Like what what what the consumer
[48:12] is facing. And he said, quote, "It is
[48:14] like the consumers do not read the
[48:15] headlines."
[48:17] And I know we've been talking about this
[48:18] for the last 10 quarters plus,
[48:21] >> right?
[48:21] >> Right. The gap between what we see on
[48:23] the news every day and what's actually
[48:25] in the data. So look at this. Look at
[48:27] these two charts from Synchrony
[48:28] Financial. Number one is the
[48:30] generational spending with Gen Z and
[48:33] millennials continue to take market
[48:34] share. You have the credit cohorts. Uh
[48:39] and then you have the net charge offs
[48:41] and it's flat to down. And this is the
[48:45] main street consumer. This is not AMX.
[48:49] It does almost feel so the the consumer
[48:50] has remained strong this whole decade
[48:52] and people at every turn have been
[48:53] saying just wait till the consumer rolls
[48:55] over. Just wait. Just wait. It does feel
[48:57] like that's how the AI stuff has been
[48:58] playing out and will be playing out.
[48:59] Like just wait till it rolls over and it
[49:01] just keeps going and going. That it
[49:03] feels like a similar trajectory there.
[49:05] One one one last thing on this. I
[49:07] thought this was just just interesting.
[49:10] Um the push and pull of capitalism,
[49:14] consumerism.
[49:16] Uh an analyst asked, this was on the AMX
[49:18] call.
[49:21] Appreciate your comments on the agenda
[49:23] commerce and all the initiatives you
[49:24] guys have. I guess one of the concerns
[49:27] that I have been hearing quite a bit
[49:28] about from investors is just how people
[49:31] might gamify rewards and allocate their
[49:33] spending to the highest rewards benefit
[49:36] to the extent that would happen. How
[49:38] would you guys adjust your model? Isn't
[49:41] that such an interesting question? I
[49:42] mean, of course, this is how companies
[49:43] behave, but like what if consumers are
[49:46] actually getting too good of a deal?
[49:48] What if consumers are actually
[49:49] benefiting benefiting too much from your
[49:51] rewards? Now the answer was like it's
[49:53] not a use it or lose it where it comes
[49:54] to the bottom line if you don't take
[49:56] advantage of it whatever not the point
[49:58] the point is like this is this is
[50:00] capitalism
[50:02] and I feel like uh
[50:06] not just a feel like people are just fed
[50:08] up it is just too much
[50:13] of companies putting their hands in our
[50:16] pockets
[50:18] >> and just trying to extract as much money
[50:20] as possible.
[50:22] But it's also it's not it's not
[50:23] company's faults. This is the system.
[50:26] Like think about think about Netflix.
[50:29] What are they what are they responding
[50:31] to? Like what sort of incentives are
[50:32] they responding to? Their share price,
[50:34] right? They want their share price to go
[50:36] higher. And Netflix has been an
[50:40] incredible company.
[50:42] Alex Morris says that they've added 12.8
[50:44] billion in incremental run rate revenues
[50:46] over the past 24 months. That
[50:48] incremental revenue growth. Okay, that
[50:51] incremental revenue growth, not total,
[50:53] exceeds the current global direct to
[50:55] consumer revenues for Peacock, HBO Max,
[50:58] and Paramount individually. Now, there's
[51:00] obviously a million caveats abound,
[51:02] right? With the rate of growth slowing
[51:04] and the competition with YouTube, but
[51:06] the bottom line looks really, really
[51:07] strong for Netflix, and the stock
[51:11] stinks,
[51:12] >> right?
[51:12] >> It stinks. Their operating income up and
[51:14] to the right, but it's not good enough.
[51:16] So, look at the stock. It's in the last
[51:18] 5 years it's down 6%.
[51:21] Netflix is down 6%. The Q's are up 94%.
[51:24] And not only is it down 6%. But it had a
[51:27] 75% crash, recovered and did a 50%
[51:31] crash. This is one of the this is one of
[51:33] the worst stocks over the last 5 years
[51:36] and it won. Again, caveats aside, but
[51:39] like we it is just such a hyper ruthless
[51:42] capitalistic society that we live in.
[51:45] That's great for investors in the
[51:47] aggregate, right? It's for the market.
[51:49] >> Streaming is one of the greatest
[51:50] inventions of all time and the stock and
[51:52] the company that won their stock stinks.
[51:55] >> Yes. So, it's a lot of on the [snorts]
[51:57] one hand a lot of great stuff. On the
[52:01] other hand, a lot of stuff that drives
[52:02] people nuts.
[52:03] >> So, what like what if people are taking
[52:05] advantage of the awards that they're
[52:06] that they're being offered?
[52:07] >> So, there's a lot of people who are
[52:08] pouring dirt on Netflix right now saying
[52:10] like this company's just dead. YouTube
[52:12] is eating their lunch now. And I there
[52:14] is some push back with the YouTube stuff
[52:16] of like the the the sheer amount of
[52:18] stuff you can put on YouTube. You can
[52:19] have YouTube playing background noise
[52:21] for you. Like it's not necessarily that
[52:23] like everyone's going to like watch
[52:24] YouTube on TV, but do you really think
[52:27] that like Netflix is dead? Like this is
[52:29] this is it
[52:31] >> dead? Okay. No, of course not. What?
[52:33] It's I mean no. Uh but it's it it will
[52:37] never grow like it has in the past ever
[52:39] again. There's no more there's no more
[52:40] leverage to mature company.
[52:42] >> Yeah. So the growth is rolling over the
[52:44] top line. I mean look, it looks it looks
[52:45] bad. And the the the paths of time spent
[52:47] on TV between YouTube and Netflix are
[52:49] diverging big time. They used to be
[52:51] equal. Now Netflix is half of what
[52:52] YouTube is. So it's not dead. But how
[52:55] about this? I think Sarando said on the
[52:57] call, matter of fact, not I think. Let
[52:58] me just quote him. He said something
[53:00] like uh
[53:03] uh our strategy is unchanged. It always
[53:06] has been and it continues to be to
[53:07] combine best-in-class entertainment with
[53:09] industryleading discovery blah blah blah
[53:11] blah blah. Um, we want to be the must-h
[53:13] have entertainment service, the first
[53:15] one members check for a great series or
[53:17] film and the last service they'd ever
[53:19] cancel. All right, the first one members
[53:20] check for great service or film. That's
[53:21] over and the last service ever canceled.
[53:24] I was thinking about this. No, if if I
[53:27] think I think the last service that I
[53:29] would cancel right now, for whatever
[53:30] reason, I'm spending the most time on
[53:32] Prime.
[53:33] >> Well, I do too. I you're probably right
[53:35] there.
[53:36] >> And I'm not even just saying just
[53:37] because they have the best quality,
[53:39] >> whatever. I haven't thought a lot about
[53:40] it. I guess it's quality, it's quantity,
[53:41] but the ability
[53:42] >> selection, the ability to buy things or
[53:44] rent things. Prime would be the last one
[53:46] that I would leave, which is incredible
[53:48] considering it didn't really exist six
[53:49] years ago.
[53:50] >> The the the conversation internally
[53:52] should be because if you think about it,
[53:53] House of Cards was the first show they
[53:55] ever did. I think Fincher directed the
[53:57] first one. That was a high quality show.
[53:59] >> Orange is a New Black,
[54:00] >> right? So internally the discussion
[54:02] should be how do how do we be more like
[54:03] Apple and HBO and less like an algo.
[54:06] >> So that that's what it should be like
[54:07] the algorithm really screwed them. And
[54:09] the thing is
[54:10] >> like maybe this is why they were trying
[54:12] to buy Warner Brothers cuz they wanted
[54:13] the HBO quality on them. If you think
[54:15] about just Apple in the last year has
[54:18] had Silo, Widows Bay, Slow Horses,
[54:20] Friends and Neighbors, Shrinking, Dark
[54:22] Matter, Pluribus, and Stick. Those are
[54:24] shows that I've watched all enjoyed.
[54:26] Netflix hasn't had one show that would
[54:28] push any of those shows aside for me.
[54:30] They haven't had one. How is Apple
[54:32] better at this than Netflix? How?
[54:34] >> They they they've lost their course.
[54:35] They lost their way. They're like the
[54:37] puppy who lost their way.
[54:39] >> They really did. It's it's I would not
[54:41] say that this is a dead company just
[54:43] because the brand recognition. They just
[54:45] have a built-in moat. I think for people
[54:47] still clicking there. So, I think they
[54:49] still have time to turn it around, but
[54:51] obviously they they they way lost. This
[54:52] is but this is also a good AI lesson.
[54:55] There's going to be people who follow
[54:56] the AI stuff way too closely and do
[54:58] everything AI tells them and it's gonna
[55:01] lead them the wrong way.
[55:02] >> Well, the irony is that Netflix was like
[55:05] the coyote
[55:07] or the roadrunner. Netflix was the
[55:09] roadrunner,
[55:11] right? And all of the other companies,
[55:12] Disney and the like, spent billions of
[55:15] dollars, were losing tons of money when
[55:16] that was not a viable strategy in the
[55:18] eyes of investors, followed them off the
[55:20] cliff,
[55:21] >> right? Disney Disney stock has done even
[55:23] worse than Netflix. And now Netflix
[55:24] followed YouTube off the cliff. Yes,
[55:26] >> just get back cuz right now they're just
[55:28] another tile on on this on the screen.
[55:30] There's nothing special. Make good shows
[55:33] and movies.
[55:35] >> Maybe maybe Apple just needs to buy
[55:36] Netflix. I don't know. Um okay, a couple
[55:39] couple things. There's been this
[55:41] pervasive thing and a lot of stories
[55:43] recently about how old people have all
[55:44] the money and they're they're pushing
[55:46] away crowding out young people and old
[55:47] people just have it all. So I looked on
[55:48] the Fed data. The baby boomers and
[55:50] silent generation control 62% of the
[55:52] wealth in the US. Okay, so Adam Nash did
[55:55] this really interesting blog post where
[55:57] he said, "Let's take let's pretend and
[56:00] he put this into context. Let's pretend
[56:02] everyone has the same exact financial
[56:03] life between 25 and 64. They save money.
[56:07] Everyone retires at 65. They they live
[56:09] till 85. They make the same amount of
[56:11] money. They save the same percentage of
[56:13] their income and they see the same
[56:14] growth in their investments." Right? You
[56:15] save 10% of your income. Investments
[56:17] grow 8%. Everyone spends 4% of their
[56:19] portfolio. What would the distribution
[56:21] of wealth look like if you did that? And
[56:23] if you did that, by the time you get to
[56:25] be 65 or older, 75% of the wealth would
[56:28] be with people are 65 or older just
[56:29] because of compounding. So this there's
[56:31] no secret here to baby boomers holding
[56:33] all the wealth. They've had longer to
[56:35] let their capital grow. And because Gen
[56:38] Z and millennials started investing
[56:39] earlier, guess what? When they're 65,
[56:41] they're going to have all the wealth,
[56:42] too. This is a compounding thing. This
[56:44] is not like an unfair system thing.
[56:46] >> Of course,
[56:47] >> this is just the way it is. Speaking of
[56:49] baby boomers, we got a lot of feedback
[56:51] on our property tax discussion last
[56:52] week, as I thought we would. Okay. Uh,
[56:56] here's one email. I agree that paying
[56:58] some form of tax is important for basic
[56:59] public services. Everyone has access to
[57:01] my school property taxes make up 70% of
[57:03] the tax I end up paying. I don't have
[57:04] kids and I don't plan to. You could make
[57:06] an argument that I I don't want to have
[57:07] kids in your area to be educated, blah,
[57:08] blah, blah. However, I can't feel like
[57:10] most of what I'm paying for is never
[57:11] going to directly benefit me.
[57:13] >> That's not true.
[57:16] I think a lot of people we had a lot of
[57:17] people also saying um listen where do
[57:20] you think the tax dollars go they could
[57:21] spend them better and I totally agree
[57:23] the government obviously is not does not
[57:25] optimize perfectly. No, no, no. I think
[57:28] we we all agree the government is
[57:30] horrific at allocating our dollars,
[57:32] >> right?
[57:32] >> But that's not the point where this is
[57:33] we live in a community.
[57:35] >> Yes.
[57:35] >> With our fellow human beings and the
[57:38] argument that you're not getting
[57:39] anything from those property tax
[57:40] dollars, maybe it's a different
[57:41] argument, but
[57:43] what about there is a high correlation
[57:45] between the type of neighborhood that
[57:47] you live in and the amount of money that
[57:50] you spend on property taxes. like you
[57:53] get what you pay for and if you don't
[57:55] want to pay these high property taxes
[57:58] part a huge portion of which goes to
[58:01] great schooling then you have the option
[58:03] to live in a lesser
[58:04] >> yes the two communities in Grand Rapids
[58:07] both have the highest property taxes
[58:08] there's a reason for that
[58:10] >> right
[58:11] >> right it's also true this is the 2026
[58:13] federal budget because a lot of baby
[58:14] boomers were coming at us saying like
[58:16] anyway
[58:17] >> and by the way let me just say like I
[58:18] understand the impulse that if you don't
[58:20] have kids like I understand that human
[58:22] emotion like yeah it
[58:23] >> sucks but that's that's that's the way
[58:25] >> that's the yes uh that's the system also
[58:28] I know property taxes do not count in
[58:30] the federal budget obviously that's a
[58:31] state local thing but the baby boomers
[58:33] coming at us saying that t I don't know
[58:35] where my tax dollars go uh JP Morgan has
[58:37] this data Medicare Medicaid social
[58:40] security make up 49% of the federal
[58:42] budget right now the baby boomers are
[58:44] getting the majority of the money
[58:47] so the tax dollars that young people are
[58:49] putting in are going to baby boomers
[58:52] for all the people. Anyway, one more
[58:54] thing.
[58:54] >> Go ahead.
[58:55] >> Uh I can't take the political ads. I
[58:57] know this is just what we do, but it is
[59:00] so bad that and you know my wife and we
[59:03] don't really watch like TD TV that much
[59:04] like YouTube TV just during NFL games
[59:07] basically sports and then my wife
[59:09] watches Today Show in the morning but we
[59:11] had football on the other day and it was
[59:13] political ad political ad and they are
[59:16] so bad my wife had to shut the TV off
[59:17] cuz she didn't want my kids seeing these
[59:18] ads. That's how like it's like this
[59:20] person supports a child rapist and this
[59:23] person supports pedophilia and it's like
[59:26] >> I can't it's like social media has
[59:28] jumped into the the actual ads
[59:30] themselves and it's it's disgusting. I
[59:32] hate it.
[59:33] >> Yeah.
[59:33] >> And but I blame you know who I blame? Us
[59:36] society. We're the problem because we
[59:37] allow this to happen. We could say no no
[59:39] more of this crap but we don't and this
[59:43] is what we're stuck with. I hate it.
[59:45] >> Yeah. Not not great. Um, Ben, last week
[59:48] you were talking about uh
[59:51] what were you talking about? CGI, how we
[59:53] don't have like the action movies like
[59:54] we used to. That right?
[59:55] >> Yes.
[59:56] >> Okay. Uh, so I saw this tweet from
[60:00] Historic Vids at History and Memes if
[60:03] you're curious. Uh, Mel Gibson's
[60:05] Apocalyptto delivers a gripping
[60:07] action-packed journey. Yeah, it did.
[60:08] Into the ancient Maya world following
[60:10] Jaguar Poor Jaguar Paw, excuse me. So
[60:13] anyway, this this there's a video of
[60:14] this guy getting like made up and Mel
[60:17] Gibson, the piece of that he is,
[60:18] knows how to make an incredible [snorts]
[60:20] movie. This movie rips so hard.
[60:23] And can you imagine if it had to be made
[60:25] today?
[60:25] >> I never really got into that one.
[60:27] >> You never saw Apocalyptto?
[60:28] >> No.
[60:28] >> Sorry, that was an obnoxious. I don't
[60:31] like to be that guy, but in this case, I
[60:32] do. You have to see that movie. Not
[60:35] probably not with George. Okay.
[60:37] >> This is This is such a kick-ass movie.
[60:42] Okay.
[60:43] >> Um, yeah, Table Pounder. All right. Uh,
[60:45] also with movies, Ben, it's not just
[60:47] IMAX stock that's doing well. Cinemark,
[60:51] look at the stock up 71% year-to- date.
[60:55] I took Kobe to see whale fall on Sunday
[61:00] night.
[61:00] >> So, that's where the whale eats the guy.
[61:02] >> Yeah. So, Robin took Logan to the to the
[61:05] Knicks game and I went I I did a movie
[61:07] night with Kobe. We went we went to see
[61:08] whalefall Sunday night at 6:30. There
[61:13] was a lot of people there. I was
[61:15] shocked. I thought it would be empty.
[61:16] There was a lot of people there. And
[61:18] this was the first grown-up style movie
[61:20] that Kobe has seen.
[61:22] >> Okay.
[61:22] >> Um I think George would love this movie.
[61:25] >> Okay. I mean, he saw it previously. He
[61:27] can't wait.
[61:28] >> All he saw was a guy getting eaten by a
[61:29] whale.
[61:30] >> It was a good time. It was a good time.
[61:32] Um
[61:33] >> did you enjoy the movie?
[61:35] >> Uh yeah, I enjoyed the movie.
[61:37] >> Okay. I enjoyed the movie. Um, okay. Uh,
[61:40] I told you to listen to Peter Berg on on
[61:42] Bill Simmons. I So I I miss Friday Night
[61:45] Lights, so I I don't I never heard of
[61:48] this. Never heard of this guy.
[61:49] >> That's a show you should watch with your
[61:51] wife. That's what my wife and I that's
[61:52] probably our favorite show we watched
[61:54] together. Like it's in my top five of
[61:56] all time. I absolutely love that show.
[61:59] >> So this guy has a new movie coming out
[62:00] called The Mosquito Bowl, which I just
[62:02] saw a trailer for. I do want to see
[62:03] that. Um,
[62:03] >> I saw the trailer, too. Looks good. What
[62:05] a great what a fascinating guy, right?
[62:08] >> Yeah. Oh, yeah. He I mean he started out
[62:09] as an actor. If you watch he in the 90s
[62:11] he was an actor and then he transitioned
[62:13] to be a writer director.
[62:14] >> He looks like the guy in some movies.
[62:16] >> He looks like Michael Bean or Mike Bean,
[62:19] >> right? Terminator.
[62:20] >> Yeah.
[62:21] >> All right. Did you see uh so so did you
[62:23] see you can see everything?
[62:25] >> Man, I don't have time in the fall to
[62:27] watch a three-hour movie. Why do they
[62:29] have to release this stuff now? I got
[62:30] sports going on and stuff.
[62:31] >> All right. You'll watch when you watch
[62:32] it. Yeah, definitely going to see it.
[62:34] >> I've been talking a lot about my uh my
[62:37] movie watching habits. Inability to lock
[62:40] in.
[62:42] Mostly part half a reflection of me and
[62:44] sometimes the quality of the movies.
[62:46] This one all the way locked in. And
[62:50] thankfully, I will report this is I know
[62:52] it's annoying when you miss the hype
[62:53] train. It's like annoying when people
[62:54] are like, "Yo, you have to." Right.
[62:56] >> This movie has 100% approval rating. It
[62:58] seems like
[62:58] >> Yeah. There it's it's there's there's no
[63:00] possible zag. uh on and I'm not a Nathan
[63:04] Fielder guy per se, but
[63:07] >> can I can I offer one area where I am a
[63:09] little hesitant on this movie. I I'm
[63:10] can't wait to see it. I don't like how
[63:14] we are not holding up to a pedestal, but
[63:17] giving these psychopaths
[63:19] a forum. I don't I don't enjoy the fact
[63:21] that we're like Sam Begman Freed and
[63:23] Elizabeth Holmes. I don't like that
[63:24] we're holding them up to something. I
[63:25] know that it's trying to shine a light
[63:26] on them. I don't like that.
[63:28] >> Okay. Uh very moral of you. I love it.
[63:30] I'm on the aside. I I enjoy every second
[63:33] of it. Uh
[63:34] >> all right. See that I don't see like
[63:35] like I know Wolf of Wall Street was
[63:37] objectively a good movie. I didn't like
[63:39] it because Jordan Belelffort is a
[63:41] psychopath and a scumbag. So that's my
[63:45] only reservation with this movie. Am I
[63:47] going to have a problem with it or not?
[63:49] >> It was so good. I I mean
[63:50] >> All right. All right. I'll have an open
[63:52] mind.
[63:52] >> What he was and and his and his
[63:54] co-director were able to do with this
[63:56] was really stunning. All right. Lastly,
[63:58] we spoke about the norm doc earlier.
[64:01] So Norm was the anchor for Weekend
[64:05] Update. I say anchor, I don't know what
[64:07] else it's called. Norm did a weekend
[64:09] update on SNL from 1994 to 1997. And you
[64:13] and I are of the same generationish. At
[64:15] that age, I feel like I feel like I
[64:17] learned what the news was from Norm.
[64:19] Like obviously at at 9 years old, I
[64:21] wasn't watching the news, but I learned
[64:23] what a broadcaster was like from
[64:25] freaking Norm McDonald. And again,
[64:27] somebody with 100% universal approval,
[64:30] some of his later remarks
[64:32] notwithstanding.
[64:34] But I cried watching this documentary. I
[64:36] thought his his life was incredibly
[64:38] incredibly sad.
[64:40] So if you he has a book, too, called
[64:42] Based on a True Story. Uh, and it is
[64:45] kind of sad and he he like made and lost
[64:48] a fortune a million times. Like he he
[64:50] was a huge gambler. Speaking of
[64:51] gambling, ruining people's lives. I
[64:53] thought that the appetite did a very
[64:55] good job of this. and the fact that he
[64:56] just let the highlights speak for
[64:57] themselves in a lot of ways and just let
[64:59] the bits go and yeah great you're right
[65:02] he was he was my you everyone loves the
[65:06] SNL that they grew up in and my
[65:07] generation was
[65:09] >> starting with Carrie and Mike Myers
[65:11] leading into Farley Sandler Chris Rock
[65:13] David Spade Nor McDonald
[65:15] >> those guys that that was my SNL that I
[65:17] grew up with right it was it was really
[65:19] really good
[65:20] >> I enjoyed it that that was very good um
[65:22] speaking of of comedy uh Colossus had a
[65:25] really good feature on Larry David and
[65:27] this is funny. They talk about how he
[65:29] went to when he was filming Curb in New
[65:31] York. He went to a Yankees game and they
[65:33] said 50,000 people were talking about
[65:35] Larry, you're the best. You're the best.
[65:36] I love you, Larry. You're the man. And
[65:38] it was like he was like a god walking
[65:39] around. And then he said at the very end
[65:41] he gets into a car to leave and some guy
[65:43] goes, "Hey, Larry, you suck." And and he
[65:47] said that was it. Like the only thing
[65:49] Larry remembered was the one guy saying
[65:50] it to him. But all the 50,000 people
[65:52] tell him he's great. He didn't remember.
[65:54] And it's funny. It's like that explains
[65:56] Larry, but to me that explains everyone.
[65:58] >> Correct.
[65:59] >> That's like loss aversion. Everyone
[66:01] remembers the one bad thing and not the
[66:02] good things. I thought that was good.
[66:03] Um, one other thing, speaking of
[66:05] Netflix, not having anything high
[66:07] quality. They do right now. East of
[66:09] Eden, which is a Steinbeck novel I never
[66:11] read, is a mini series.
[66:13] >> I actually did read that novel and I
[66:14] love it.
[66:14] >> You read it?
[66:15] >> I did read it.
[66:15] >> Interesting. Uh, I have This is This is
[66:19] a show that looks like it could be on
[66:20] Apple or HBO. It's very high quality for
[66:23] Netflix. This is this is the kind of
[66:25] stuff they should be doing more of. It's
[66:26] And at first I was like, man, cuz
[66:29] there's it's a kind of a brutal story.
[66:31] >> Oh, yeah.
[66:31] >> It's brutal, but it's very very well
[66:34] done. And I It's really It's the best
[66:36] thing on Netflix in a long time.
[66:37] >> If I know Ben Carlson, like I think I
[66:39] do. I think you're going to read the
[66:40] book after you watch it.
[66:42] >> That's possible. I I thought about that.
[66:43] So, Florence Pew is in it. She's very
[66:45] good. Uh Marne's boyfriend from the show
[66:47] Girls is the I don't know what his name
[66:49] is. And then one of the guys who's in
[66:52] uh the tennis movie with Zenaia is in
[66:54] it. So
[66:54] >> Oh,
[66:55] >> good cast. It's It's very well done.
[66:57] >> They're making a another season of
[66:58] girls.
[67:00] >> I saw that. I I don't like the bringing
[67:01] the call back of shows. I just When it's
[67:03] over, if you have a finale, that's it.
[67:06] >> All right. I'm embarrassed to admit I
[67:07] did like that show.
[67:08] >> Well, I did, too. I of course it was I I
[67:10] enjoyed it. Uh okay. I don't watch
[67:13] nearly as many horror movies as you do,
[67:15] but we've been trying to watch a little
[67:16] bit of horror movies with my kids
[67:18] because it's Halloween.
[67:20] >> I have a I have a the best horror movie
[67:22] of the past 10 years. What do you think
[67:23] I would say it is?
[67:24] >> Get out.
[67:25] >> I watched it with my kids this weekend.
[67:26] >> Oh, I don't know if I call that a That's
[67:28] like a psychological thriller. Maybe I'm
[67:30] splitting hair. Uh, A Quiet Place. I
[67:32] showed my kids a Quiet Place this
[67:33] weekend.
[67:34] >> Soing good.
[67:35] >> We watched all three of them.
[67:36] >> And the sequel was great, too.
[67:38] >> The sequel was fantastic. The sequel,
[67:40] it's kind of like Alien where the first
[67:41] one I think is a horror. The second one
[67:42] is more of an action.
[67:44] >> I said I think that's the best sequel
[67:46] I've seen in 25 years.
[67:47] >> It's really the first 10 minutes of the
[67:49] sequel just hums. The day one is with
[67:52] New York is like it's okay. It's not
[67:53] bad. But the first one my kids were
[67:55] really really into it. They loved it.
[67:58] >> Third one was okay. Third one was was
[67:59] still pretty good.
[68:00] >> And they're going to do another one next
[68:02] year.
[68:03] >> All right. Obviously Batman is a better
[68:04] sequel but
[68:06] >> but
[68:08] >> Okay.
[68:10] >> Okay. All right. What a what a busy week
[68:13] in in news.
[68:16] >> That's a busy decade, man. The
[68:18] >> This is for better or worse, this is
[68:21] going to be the dominant theme for the
[68:23] rest of our podcasting career.
[68:26] >> AI. Yes. We're never going to
[68:27] >> Yeah. For the people who get sick of us
[68:29] talking about it, this is the story. Uh
[68:31] uh Michael Slas called this the story of
[68:33] the century.
[68:34] >> It is.
[68:34] >> It is. What What else are we going to
[68:36] talk about?
[68:36] >> For the economy, for the markets.
[68:39] It's crazy that I pulled up the news
[68:41] here. It says Meta's $100 billion stock
[68:43] sale is a turning point for a big tech
[68:44] pace for AI. It's constantly stuff
[68:46] happening.
[68:48] Get used to it. All right. Thanks to the
[68:51] production team, Duncan, everyone, as
[68:53] always, watch us on YouTube, listen to
[68:55] us, give us a review, subscribe to the
[68:57] Compound. What else? Email us.
[69:01] >> That's right. Go ahead.
[69:02] >> Spirits at compoundnews.com. We'll see
[69:03] you next time.
[69:07] Heat. Heat.
[69:09] [music]
