The Age of Discontentment | Animal Spirits 441

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Welcome to Animal [music] Spirits with Michael and Ben. All right, Michael.

Through the close on Monday, we're recording this Tuesday morning right before the open. The [music] US stock market, the S&P 500 is up 17% and it's in a draw down of 1%. [music]

>> Priced to not not price in gold.

>> Well, price in gold is down. Priced in

Bitcoin, it's up. So, which one do you follow? Which is your which is your

follow? Which is your which is your currency?

>> Maybe people overreacted a couple weeks ago. Is that fair to say?

ago. Is that fair to say?

>> No.

>> You don't. So, we had a little 5% correction. We had that one day we were

correction. We had that one day we were up one and a half%, they were down one and a half% and it seemed like the mood of people were some people overreacted a little. Listen, I'm not calling anyone

little. Listen, I'm not calling anyone out. One of our producers,

out. One of our producers, one of them me and said, >> you know, I have we have a lot of guys here. He said, "Hey, is this the start

here. He said, "Hey, is this the start of the crash?"

>> I I just think I do think every time, this is obvious to say, but you can't have like a 40% crash without starting with a 5% correction. Duh. But every

time we get a 5% correction, I feel like from now on, people are going to think, "Okay, this is it. This is the correct."

>> True.

>> I think that overreaction is going to happen every time we have a correction.

Now, >> I agree with that part. The the part that I don't agree with is did we overreact? It's easy to say with the

overreact? It's easy to say with the benefit of hindsight, but I think the the reason why the stocks were falling

off was and is warranted because this is like at you know uh Atlas with the with the world the globe on his shoulders that statue in New York City.

>> Mhm.

>> That's what this is like this market is with the hyperscalers and AI and the spending and that legitimately came into question. And so I think that we're

question. And so I think that we're three weeks removed from the episode. Um

but when Nvidia reports a blowout quarter and has a huge reversal, yeah, people are going to react appropriately and investors never underreact. They

always overreact. So I don't think that it was an overreaction like oh people are being babies and freaking out. Um it

was warranted that we we we got some news that was dis disconcerting and people responded as they always do. I'm

still saying this is a healthy correction that we a lot of the speculative stuff because if you say well >> wait no but that but that could be true too because I was saying it's a healthy correction but that doesn't mean that

like investors were dumb to sell Nvidia and Meta and whatever.

>> So it's a healthy overreaction.

>> Yeah.

>> Okay. Um this is kind of interesting if if you look at just plain vanilla because I feel like in the past few years people have wanted to put a stake in the heart of like plain vanilla is

dead. You need you need you need more.

dead. You need you need you need more.

You plain vanilla can't work.

>> 640 died in 2022.

>> Yeah. Yeah. Remember I wrote the eulogy.

Um plain vanilla this is doing fantastic this year. So the EPA is just developed

this year. So the EPA is just developed international stocks is up almost 30%. I

mentioned the US stock market is up around 17%. The A bonds total bond

around 17%. The A bonds total bond market is up 7% this year. So if you just had this boring threeund Vanguard portfolio of US international bonds you're having a fantastic year this year.

>> Boring work.

>> It's kind of it's kind of surprising right? Especially I think the bond piece

right? Especially I think the bond piece I don't how many people do you think know that bonds are up almost 10% this year like the aggate bond market probably not many people correct >> no yeah >> it's a good year for it's a good year

for playing vanilla >> most years are right >> most times stocks go up as Samro likes to say >> that's true speaking of Sam Row he does this every year and I love it because he

does this he takes all of Wall Street strategist price targets and he shows them they at the because they start coming on now he keeps track of them by um by the firm and then he updates them

throughout the year and he shows what happened at the end of the year. And so

right as of right now we're looking at like 7,100 to 8,000 for next year. I'm

actually kind of surprised because so they're all gains so far. I'm sure

there's got to be a bearish person coming out somewhere. So the gain >> I think Sevita's not too bullish.

>> Okay, so the gain range is 4% to 17%. If

I'm a strategist and I want to stand out because that's the that's the game. You

want to be able to get on CNBC and Bloomberg because of your calls. You

want the headline to read, "Hey, strategist who predicted dot dot dot."

That's what you want to happen if you're a strategist. I'm predicting a 10 10 to

a strategist. I'm predicting a 10 10 to 15% down year in 2026 because you know my stat. The average

down year in the S&P is down 13% over the last 100 years. If the stock market is down, the average is down 13.

>> So you're you're not predicting that.

You're saying that if you were coaching, if you were doing PR for a strategist, that that's what you would tell them to say. If I was PR, I' I'd say, "Hey,

say. If I was PR, I' I'd say, "Hey, listen. No one is doing this yet." You

listen. No one is doing this yet." You

be the first one to say, "Hey, the market's going to finish down 15% in 2026. If it happens, you look like a

2026. If it happens, you look like a genius. If it doesn't happen, no one

genius. If it doesn't happen, no one remembers it because everyone else picked gains."

picked gains." >> Yeah. Well, the thing is, if you're

>> Yeah. Well, the thing is, if you're bearish and wrong, nobody cares.

>> Well, a lot of wrong bearish people.

>> That's not true. But but it's not as if uh one strategist is going to make a client do anything, right?

>> No, they they don't only listen to one strategist. Exactly. So, yeah, because

strategist. Exactly. So, yeah, because >> now if if you're bearish and wrong on your managing money, you're fired >> because all these firms have strategists that make that have views, but then they also have asset management firms that

have their own views and they their portfolios don't always match the views of their strategist. I'm just saying if you want to get on TV, that's what you predict right now.

>> And by the end of the year, everyone's going to forget it anyway if you're wrong.

>> Okay. Uh I have a take here. Uh so Jeff Gunlock was on Outlots and he says almost all financial assets are now overvalued.

And my take is that this is impossible to happen. You all financial assets

to happen. You all financial assets cannot be all overvalued because money has to go somewhere, especially in today's day and age. Everything can't be overvalued.

Okay, I pulled this one because I wrote about this in 2015, way back when, >> that that was when the everything bubble was happening.

>> So, Robert Schiller said, "Unlike 1929," and this was on zero hedge. this time

everything stocks, bonds, and housing is overvalued. I just think I just don't

overvalued. I just think I just don't think that is possible for every because people have to allocate capital somewhere.

>> Um >> I mean you could say well they could just put it in cash but I think I don't think it's possible for everything every financial asset to be overvalued simultaneously. Thoughts?

simultaneously. Thoughts?

>> I mostly agree. I guess maybe the push back if I were to give push back, not that I am, but if I were to be the mathpiece for people for Jeff Gunlock, not that he needs me as a mouthpiece,

there's been so much um the bazooka was fired during co and so much money made its way into the

system into people's banks accounts, filtered into the stock market, into private assets, into crypto assets. Um,

so I think that I think that you can have that dynamic where and and this is part of the broader conversation that was taking place this week about um, and it it's not just this week. I mean, it

did it did there was a piece that went viral this week, but just the overall sentiment of something is not right.

And I am I am definitely sympathetic to that view because you're seeing it in elections like something it's not just feelings. It's not just vibes. But I think maybe the diagnosis

vibes. But I think maybe the diagnosis of it of where the bad vibes are coming from where it's like it's so expensive to live. True. I don't think anybody

to live. True. I don't think anybody would dispute that it is more expensive to live than it ever has been. But I

think maybe the root of the problem is there are too many people with too much money.

Bringing back to the point that you can have this type of thing where most asset classes are overvalued even if it doesn't mean that all of a sudden they're going to all burst simultaneously. So there was this there

simultaneously. So there was this there was this post I think >> what do you think about that take that there's the real problem is >> there's too many people >> of course the have nots that's a

perpetual issue but what's causing the consternation is there's too many people with too much money >> so there was a post on LinkedIn a couple weeks ago from the tops you know tops

the trading cards from the CEO of tops >> which I used to be I I used to dabble in cards a little bit back in the day I feel like everyone got into it you know five years after the fleer 1986

Michael Jordan. So you everyone had one

Michael Jordan. So you everyone had one friend who had the Michael Jordan rookie card and then you then everyone in the '90s started buying cards and all those cards in the '90s are worthless cuz we all bought them. Uh anyway, so he said,

"Listen, the card market is crazy out of whack because there's so many rich people coming in and buying stuff up and everything is he was kind of saying that like everything is overvalued." And he talked about the K-shaped economy and

all this other stuff. And uh I do think that that's a thing where everyone has a lot of money because money market assets, bonds, all this stuff like we keep asking where is all the money coming from? The money just keeps

coming from? The money just keeps flowing in >> this the stock market and people borrowing against their assets. I was

listening yesterday Patrick Oshani did a podcast on business breakdowns with the founder of what's the watch company called? Hodinki I believe. Um, and they

called? Hodinki I believe. Um, and they were talking about and it was it was a a Rolex episode. And you used to be able

Rolex episode. And you used to be able to get a Submariner for five grand, whatever it was. The entry price for a starter Rolex is now twice that. And at

the upper end, you can go to a watch store, you can try and get a Rolex or the these fancy brands and literally try and slap down $100,000 for a watch and told be told no.

>> I got to I got to I I have to admit this. As a finance guy, I'm going to

this. As a finance guy, I'm going to lose my finance burl card here. I don't

get the Rolex thing. And I never have like I don't I don't even think they're attractive watches.

>> Is that is that a contrarian take? Like

I I see a Rolex I don't think like man that's a beautiful watch. I don't

>> Yeah, that is a contrarian take.

>> Okay. For me

>> the point is like there's so many different You mentioned cards, I mentioned watches, look at the stock market. There's so many different areas

market. There's so many different areas to point to. Look at real estate prices where it's like this just doesn't feel great.

I don't think that that feeling is going away though because I think this is also social media dynamic. I I don't think that all this is going to be solved and one day everyone's going to wake up and go, "Yay, everything's great again." I

think this is going to be a perpetual feeling that is is probably just going to slowly but surely get worse because this is the this is the where how we live now. This is it's it's like one of

live now. This is it's it's like one of the trappings of wealth. everyone is

wealthier, but when you see other people wealthier, it's really hard because I think one of the things that's happened is on social media especially, a lot of rich people are telling middle class people that they're actually poor

people. And who's going to argue with

people. And who's going to argue with you when you say, "Yeah, I'm middle. I

should be because by definition, everyone can't be above average." By

definition, you can't be above average.

There's always got to be a median. And

it it would be great if everything was better for everyone.

>> And the average the average just keeps getting pulled higher. and so does a median for that matter.

>> Yes. And you're right.

>> If you do fall below there, then it it's very painful and you see every like this person's doing fine. Why am I not doing fine? It's a

fine? It's a >> hard absent complete wipeout, which obviously hurts the lower >> the lower part of the K the worst.

>> I mean, if you if you do read >> if you read a lot of the books about the Great Depression, they had the wipe out, but there were still a lot of rich people who did just fine and they kept living with their servants and their like that's the thing is

>> this is the new normal.

>> It is. I unfortunately for a lot of people I think it is it's not so the guy stuff is not going to get better.

>> Did you see uh did you see Oh my god my brain. Cinderella man.

brain. Cinderella man.

>> Remember that scene where Paul Giamati where Russell Crow goes into his apartment and he sees that he's living broke.

>> That's a that's a really good movie actually. That's underrated Russell Crow

actually. That's underrated Russell Crow one.

>> Very good movie. Saw that in the theater.

>> Uh all right. Where we going? Okay.

>> I can I just every movie you say you saw in the theater on half of them.

Call my dad. Call my dad. We saw

Cinderella Man in the theater.

>> All [laughter] right.

>> Positive. Uh,

>> but I guess it is true. Back in the day, like when there was nothing else to do.

There was no stream. Like we would literally just go to the movie theater every weekend.

>> So, also my my parents got divorced when I was six and every Saturday I went to my dad's and we either we either went to Blockbuster or most of the times we went to the theater.

>> Yeah, >> that's what we did.

>> All right, that's fair.

>> All right, this is a chart. um in April.

So let's start with this actually. Let's

start with Yardini. So US net capital inflows foreign private purchases of US equities totaled a record 66 $646 billion over the past 12 months. Um look

at that chart.

>> So that whole sell of the US thing lasted about a month.

>> So here's here's the thing that I'd like to see though, like what does foreign purchases of foreign assets look like?

because you if you showed me this data before the year I wouldn't say man foreign stocks are probably crushing US stocks this year or doubling up their return >> um I would guess not as much but I don't

know it's just a guess all right but here here's the kudigra um net foreign purchases of US assets this is from Apollo and it breaks it

down by month so look at April 25 there was a massive outflow like that was a thing and the narrative was uhoh >> US exceptionalism question mark. Uh, and

that narrative died because immediately as soon as they sold them, they came back in record numbers in May and it's been positive inflows for the rest of the year.

>> One of the things that we asked in April or May or whenever was going to matter more, tariffs or AI and obviously I think we have our answer.

>> Yeah, what a year.

>> Um, okay.

>> Was scary as Like >> it it we had the president of the United States saying like listen I don't want to make a depression but like what if we put this stuff through and we're willing to

>> remember remember the talking points from Bessant and Lutnik where it's it's main street's chance.

>> Yeah. Everyone's got to Yeah. rich

people have to take their pain and we're going to that if we have to go to recession, who cares? There are people who who are like legitimate people saying we we have to go into recession to do this. So be it.

>> Anyway, moving on. All right. I've never

seen this before. Eric Belchunis,

believe it or not, 54% of Americans own a mutual fund while only 15% own an ETF.

Uh why do gap people think so? Um

obviously the big part of this is I guess just baby boomers who have most their money in mutual funds and didn't want to sell them or 401ks >> like

>> so 401ks is the thing. I can't believe that there hasn't been a bigger push to get ETFs in 401ks.

Does that does that not seem like a like we're going to look back in 20 years and go why did that take so long? What was

the hold up?

>> I don't know the mechanics of cash settlement and all that sort of stuff.

>> Yeah, I know that. But I mean the robo advisor figured it out. You've got to imagine that the 401k Yeah, I I guess maybe it's a little behind, but that this number surprised me. 15% of

households own ETFs. I would have thought higher.

>> Yeah. Here's a great chart from Mike Zakardi from via Bank of America.

Robin Hood holds the biggest share of daily active users. This is a hell of a chart. Um, so

chart. Um, so >> for online platforms, >> they compare. Well, yeah. What? They're

not measuring physical branches.

[laughter] >> Well, you know, so this is what E Toro, Erade, Schwab, Fidelity, Robin Hood.

Surprisingly though, Robin Hood peaked in 2021 at the meme stock craze and the other companies have eaten into the share a decent amount. Obviously, it's

still what 50% of the total.

>> I mean, yeah, it's wild.

>> But it was, I guess, 70 75% of the peak, but yes, Robin Hood is is like a behemoth in the online space, obviously.

>> Yeah. I mean, I'm a daily active user.

>> You know what I did?

>> Probably go probably go on Robin Hood to check the market. I mean, when I'm out on my computer, I think I'm a sicko. I

think I I think I look at the market 474 times a day.

>> You know, one of the great the >> there is there is never there is never How about this? I almost never unless I am recording with you, but even still I've got the market on my screen. I

probably go I'd probably never go more than six minutes without looking at the prices.

>> I'm I'm probably a little bit more of a range than you. I But here's the thing.

So I'm I recently I think a people give say like Robin Hood's plat or like their technology and and the access and what how they their interface works is one of the reasons that they've done so well.

Obviously the zero commissions was a big thing but their their interface is just better than everyone else.

>> It's a great app.

>> It's it's kind of like Netflix and the other streamers, right? The other

streamers >> he's got a great app.

>> The other streamers are so much worse than Netflix, right?

>> Well, I don't know what that's from.

>> He >> Oh, a great Oh, I got you. Okay.

>> Thank you.

>> That was your Pacino. But so if you use other streamers and like it doesn't just automatically go to the next episode like you like why is this so much worse than Netflix? Netflix's interface is

than Netflix? Netflix's interface is just so much better. But does that but I and so it would be the same thing with like Schwab and Vanguard and Fidelity.

Like their online platforms just aren't as good as Robin Hood's.

>> I think that's that's that's undisputed.

Here's the thing though.

>> Yes. Yesterday I was >> wait I have a point I have a point here real quick. I moved all my my money, my

real quick. I moved all my my money, my stocks and stuff from Robin Hood to Schwab recently and I don't check it nearly as much because Schwab's interface just isn't as nice and easy as Robin Hood and I think that's actually a good thing. I I'm not checking it

good thing. I I'm not checking it compulsively like you were saying like, "Oh, what is this stock doing? What is

this ETF doing? What's the market doing?" I'm not checking it as much

doing?" I'm not checking it as much because it's not as easy. I think that's a good thing.

>> Oh yeah. I'm not saying what I do is healthy. It's insane.

healthy. It's insane.

>> Well, I did it. It's like it was like it's kind of like a relief like [sighs] I don't have to look all the time.

>> Yeah.

>> What was I What was I doing? Is that

helping anything?

>> I do wonder is is will there be a point in my life? I'm sure there will be when I don't do this, but it's been like this for 15 years. I don't know. All right.

Anyway, >> getting back to the point of the interface last night. So, we watched The Beast in

last night. So, we watched The Beast in Me, which we'll talk about later.

>> I was trying to search for on the Disney app. I was trying to search for The

app. I was trying to search for The Americans, a show that you love, a show that I've never seen. Um, the main star of the beast in me is in The Americans.

>> That guy is fantastic, isn't he? He's

such a good actor.

>> I don't think he's a very good actor.

>> You don't like him? Oh my gosh. Wow. We

disagree on this totally.

>> Okay, we'll talk about >> I think he's phenomenal.

>> Um, so I was on the Disney app looking for The Americans. I couldn't find it. I

The Americans. I couldn't find it. I

literally typed in the and I go on my phone. I said, "Wait a minute. Isn't the

phone. I said, "Wait a minute. Isn't the

Americans on Hulu? I don't understand."

So I open the Hulu app inside of Disney and again I search for Americans. I

search for the Americans. Nothing. But I

open up my phone and it's right there.

So then I go into I'm in the Hulu app and I'm scrolling to like the action category. Scroll down. Nope, not there.

category. Scroll down. Nope, not there.

I scroll scroll. I'm like, is it in the drama category? Finally, it's in the

drama category? Finally, it's in the drama category. But why is it so hard?

drama category. But why is it so hard?

And your point, Netflix is the Robin Hood of of uh content.

>> Way better.

>> All right. There's an article in uh the Wall Street Journal. Uh

>> Duncan says, "I have to live a little."

>> Why? because you don't check the stock market that much.

>> Yeah, I guess so.

>> Um, meet the teens and investing in stocks for their future home and retirement.

>> This is great. So, they they give all the stories as usual like this person is doing this and and we interviewed this person.

>> I just think all these stories are great.

>> This stuff was not happening when we were young. Not at all.

were young. Not at all.

>> And this is all Robin Hood.

>> Yeah. And in 2020 and 2021, a lot of people like you and I were wagging our fingers and saying this is not healthy.

The stock market is not a casino. People

are learning the wrong lessons. And a

lot of that is valid. They're gamifying

investing. And a lot of that is is valid. But the benefits to people, and

valid. But the benefits to people, and we did say this at the time, maybe we changed our tune a little bit later. the

benefits of getting people to learn about the market and to discover that there is a right way to do this and long-term compounding and all that sort of good stuff. Like that was all Robin

Hood. They It really was.

Hood. They It really was.

>> It just we it broke the barriers down. I

think the whole zero commission trading and just making it easier to set up an account in minutes, attach your bank account, and then start trading or investing immediately. And the the other

investing immediately. And the the other thing is I think people are realizing the stock market really is like the greatest wealthb buildinging platform on the planet. So they there's this in the

the planet. So they there's this in the story they talk about this this this teen I think is in college and they talk about all these kids who saved up their money from summer jobs and put it in the stock market and their parents help them and it says that this this this one girl

growing up in Manhattan's Chinatown Zang translated her immigrant parents tax form for them and noticed that her classmates homes were nicer than hers.

She says I felt an obligation to be financially stable because my parents aren't always that stable. now a college student studying finance and accounting and she started saving and investing investing in the stock market because she wanted to create a better life for

herself. I think that's a wonderful

herself. I think that's a wonderful story.

>> Yeah.

>> Good for these good for these kids. And

we we hear about it all the time. I hear

from young people all the time who are investing in way way way younger than I was. And if they keep their money in

was. And if they keep their money in there, >> they are going to be so much better off and wealthier than than even our generation.

>> Uh I don't think I told you this. Josh

and I are interviewing Vlad on Thursday.

>> Okay. No.

>> Yeah. So, that that should be fun.

>> Okay. Yes. I I I'm I love their You always pull out from quarter the Robin Hood charts and stuff that shows their >> They have the best deck in the business.

>> They do. Yeah. It's very good.

>> All right. Getting to the point that we were talking about earlier about um the discontent and where it's stemming from.

Allison Shreger uh had a really good piece on this. She said, "This is an age of discontent."

of discontent." Just note how often we use the word crisis. The affordability crisis, the

crisis. The affordability crisis, the housing crisis, the everything crisis.

And yet, we've never had so much. Not

only in terms of wealth, uh, but also income.

It's true the middle class is disappearing, but largely because so many people have become upper middle class and fewer people than ever live in

poverty, even by real American poverty standards. She has a chart um showing

standards. She has a chart um showing the percentage of US households with a total income greater than $150,000 uh has increased as the middle class has

been shrinking. So more people are

been shrinking. So more people are getting pulled up. It is important to note this figure includes earned income tax credits and transfers to some extent. It shows how much redistribution

extent. It shows how much redistribution we already do. It also shows how much propos how much more prosperous America has become over the last 50 years. You

can't even compare our standard of living today with how we lived 15 years ago. So why do people feel like the

ago. So why do people feel like the economy isn't working for them? Some of

it is higher expectations of what a home should be, where you should be able to live, and how fast your earnings should rise. Some of it is legitimate

rise. Some of it is legitimate affordability issues. Health care,

affordability issues. Health care, education, and housing do cost much more even if they are much higher quality than they used to be. Well, maybe not education. More on that later. uh if we

education. More on that later. uh if we are richer, our expectations would rise.

It all last thing it also it could also be that while the upper middle class has grown and is better off in many ways, the very rich got much much richer and this makes the economy feel more zero

sum to people striving for success even if overall it has meant a more prosperous economy for more people. I

think she nailed it. So the people that um would have been discontent 20 years ago are so much angrier, understandably

so, because they see so much excess and so much wealth and it's so visible and it feels soed up when everything that

they're paying for is so expensive.

>> So I thought about this recently in terms of my own family dynamic over the years and how the expectations rise. So

my dad and his he had four brothers and sisters. They lived in a tiny tiny

sisters. They lived in a tiny tiny house. One of my uncles still lives

house. One of my uncles still lives there. And I can't believe that with

there. And I can't believe that with seven people they lived in this house.

And when we were growing up, he would always tell us that they didn't have anything at all. He would say like and he would every year at Christmas he would say, "Listen, we didn't get Christmas presents every year. We rented

them." And he was trying to tell us like we didn't come up so what you guys have is way more than I ever had. Okay. Um

but I think about something like childcare which I think is a is a big thing. Um I asked my my parents recently

thing. Um I asked my my parents recently like what did you guys do for us for childare? My mom my mom worked night

childare? My mom my mom worked night shifts. She worked 7:00 p.m. to 7:00

shifts. She worked 7:00 p.m. to 7:00

a.m. 3 days a week. And she said in the other days me and one of the moms down the street, we traded off doing daycare.

So half the time I took her kids, half the time she took us, right? And so she said, "You sending your kids to daycare?" Like they're actually learning

daycare?" Like they're actually learning stuff. They're doing stuff. We just like

stuff. They're doing stuff. We just like made do with people in the neighborhood.

And I don't think people do that as much anymore. And so when we went to Florida

anymore. And so when we went to Florida last week and our kids flew, I said, "Listen, when we went to Florida as a kid, we drove. I laid in the back of a minivan. We drove for 24 hours to get

minivan. We drove for 24 hours to get there or something. Um, we stayed off premises. We didn't stay at Disney like

premises. We didn't stay at Disney like we were doing like and I I think that stuff like over time that that's a sign of progress, but also the expectations are rising and rising and rising and that I think that is a form of progress

in itself. But unfortunately when the

in itself. But unfortunately when the expectations get higher and the luxuries become necessities, >> that can make it easier to be discontented. I told this story a couple

discontented. I told this story a couple months ago over the summer, my dad took me to the apartment that he grew up in, the complex, and my dad grew up in poverty. He was uh he he shared a

poverty. He was uh he he shared a bedroom with his grandfather, like a bunk bed with his grandpa, which is wild to think about. And he I asked him if he felt poor, and he said he said no because they didn't know,

>> right?

>> He didn't know he didn't know that people lived in houses and that there was now there wasn't the extravagance in the 1950s that there is today, obviously, but that's the point. It

wasn't visible. It was much more local.

>> Everyone was kind of in it together more or less.

>> Right.

>> Yeah. Again, so I think this is a sign of progress and this is one of the reasons that this this these feelings aren't going away.

>> Yeah.

>> Probably ever.

>> Um All right. Good chart. Claire Lehman

tweeted the trends in mathematics, reading, and science performing. This is for the OEC

science performing. This is for the OEC OECD. So it's global. It's not just the

OECD. So it's global. It's not just the United States. People who don't think

United States. People who don't think phones, social media are having a delletterious effect on developing brains. What's the alternative

brains. What's the alternative explanation for this? Did every country put lead in the water at the same time?

So the test scores for mathematics, reading, and science are collapsing. Now

there was a noticeable break especially in mathematics around CO.

>> Yeah, CO's a big thing for this for sure.

>> Had a horrendous impact on society, but this was trending lower. And these these there's been a lot written about this over the past couple of weeks. This

trend is alarming.

>> I don't want to poo poo this at all. One

I I feel like for decades we've heard how bad our education system is.

>> Why do things keep improving then? Why

do we keep why do like if if our education system is so bad, how do we keep creating such great stuff?

>> How do how do we keep creating so much wealth? I just I I'm not trying to poo

wealth? I just I I'm not trying to poo poo this. And I also think that like the

poo this. And I also think that like the solution is coming. Every kid is going to have an AI tutor. Like I I don't think I'm not as worried about this because I think the solution is already here.

>> That I like that take.

>> Like it's going this it's I agree. This

is not good. This is not a good thing.

The solution is here. All of our kids are going to have an AI tutor that's going to like understand and know their specific strong points and weak points

and help them on the weak points.

>> Yeah, I agree. Um All right. Carile has

two charts that I wanted to highlight.

One of them is the household consumption index. I don't know exactly what this

index. I don't know exactly what this measures, but it breaks down into highest income, middle income, lowest income. And the takeaway is the

lowest income. And the takeaway is the highest income. The middle income and

highest income. The middle income and the lowest are are up and to the right, but nowhere near as steep as the highest income line. And then they have another

income line. And then they have another chart next to it showing the household financial stress index. And of course at the highest income there's you know no

stress less than 2% delinquency rate.

The middle income is steady under 4%. Um

but the lowest income although declining is still way way way higher.

I think the chart always looks like this. But all right good news. Good

this. But all right good news. Good

news. On the other side of this, the fantastic news, in fact, Michael and Susan Dell announced on Tuesday that they would deposit $250

in individual investment accounts for 25 million children, an amount totaling $6.25 billion, and is one of the largest philanthropic philanthropic gifts ever

to go directly to Americans. Um, these

are called Trump accounts.

>> This is a cool story.

>> That's great. The federal government will give $1,000 to babies born between January 2025 and December 2028. The

Dell's gift extends to children up to 10 years old, though it limits eligibility to those who live in a zip code where the median household income is below $150,000.

Uh, more of this I and I think I think more of this is coming. I think people will follow this lead.

>> If you're a really really super duper rich person, I think I looked it's like he's worth like 150 billion. Um, what

what better way to give it like than doing something cool like this. I've

seen other billionaires that have like paid off everyone's student loan debt or something like this is this is a very cool story. I do think that one of the

cool story. I do think that one of the ways that we could help a lot with young people. We talk a lot about the housing

people. We talk a lot about the housing market.

>> I do think that the the daycare there should be a way bigger tax credit you get for daycare. If you if you have a dual income family, you like it's it's so stupid that

>> backbreaking. We subsidize education K

>> backbreaking. We subsidize education K through 12, but not preK when it helps people go to work and and be members of the economy and help things grow. Like

that that should be a way higher number.

Like if this frame, >> people hate people hate this. Why should

my taxes go up to subsidize you having babies? We didn't have that. Like this

babies? We didn't have that. Like this

is a very this is a electric rail.

>> It's a net positive for society because it helps the economy with more people working and producing.

>> Yes. I I I I uh I unapologetically agree with this take like uh whatever child child cause pre-day or daycare are just completely unhinged. All right, this is

completely unhinged. All right, this is this is another interesting one from Carlile. So last week we we shared the

Carlile. So last week we we shared the stat from Matthew Bose. I can't remember what the stat was, but it was something like what we're seeing has never happened outside

>> recessionary for job losses. Right.

>> All right. This is not a good chart. the

local experiences versus travel spending index. Both of them are going down big

index. Both of them are going down big league. There was another chart showing

league. There was another chart showing the experiences spending index, which is travel, tourism, and live events. This

turned negative for only the second time over the last 3 years. Not great. I I

don't know what the story is here. Maybe

it's just I don't need to overthink it.

The economy is slowing. I think

eventually people got exhausted and did too much stuff. Like at a certain point it had We've been waiting for this forever. Like we thought ah people are

forever. Like we thought ah people are going to take one or two trips after CO and then it'll be back to normal. It

didn't. This seems like it maybe is back to normal. I tell you what, not at

to normal. I tell you what, not at Disney. Holy smokes. People love

Disney. Holy smokes. People love

spending. So I'd never been to the I'm not a Disney person. I've mentioned this before. I

before. I >> You're a Disney person?

>> I am. We've gone three times, which um so I had never been to Disney Springs before. Have you ever been there before?

before. Have you ever been there before?

>> No. Oh. Uh is that like the shopping spot?

>> It's shops and restaurants. So for

Thanksgiving dinner, we went there.

Which side note, the last two years we've been traveling Thanksgiving week.

We thought we thought it was the kids have time off of school anyway. So I've

missed Thanksgiving, the traditional Thanksgiving day.

>> I didn't miss it at all. Two years in a row. Not at all.

row. Not at all.

>> Yeah.

>> I don't you know. Anyway, um but we go to Disney Springs and there's just millions of people everywhere and there we're trying to go in stores and it's it's too much. It's too chaotic and I um the the kids went and did some like boat there's a car that you could drive that

like a car turns into a boat you can drive around. So the kids did it with

drive around. So the kids did it with Courtney and shoot there's only four spots so I'll just stay back and have margarita. So I'm talking to the

margarita. So I'm talking to the bartender [laughter] and [snorts] uh I said this place is is this place more insane than usual because it's a holiday. And she was like it's a little bit more but she's like

honestly it's always like this. It's

It's always busy and like that just blows boggles my mind that there's just always people spending money in an insane amount of money at a place like that and it it really never slows down.

>> Yeah. Happiest place on earth. Can't

wait to go.

>> I have some more Disney thoughts for you later. Uh let's talk about AI. So Derek

later. Uh let's talk about AI. So Derek

Thompson had a cool post uh with Tim Lee who he does a Substack called Understanding AI. So he's he's and he

Understanding AI. So he's he's and he does a lot he does some of the best charts on AI I think. And they did this thing kind of like the pros and cons, right? It they did a Grand Rapids hedge

right? It they did a Grand Rapids hedge post. Okay, little of this, little of

post. Okay, little of this, little of that, little good, little bad. And I

thought I thought this one was interesting. He said on the on the

interesting. He said on the on the positive side, um AI revenue is climbing fast. So they they said um AI generative

fast. So they they said um AI generative AI revenue has increased ninefold in the last two years from 7 billion to more than 60 billion. And this isn't counting like circular spending on chips and data centers like I'll give to you, you give

to me. Um and they look out what it

to me. Um and they look out what it could be the estimates. So say if AI revenues continue to grow at 100% per year, AI will hit 650 billion annualized in 2029, which is right on schedule. And

it's basically saying all the money they're spending if that happens. Now

that's a big if. Like all the money like the ROI would actually be worth it.

>> I hope so.

>> That's a big big leap obviously, right?

>> Yeah.

>> Okay. Uh we talked a few weeks ago about the construction boom. I said like there's got to be construction companies that are that are going crazy and people doing the Wall Street Journal had this one nailed. Few people sent this to us.

one nailed. Few people sent this to us.

Uh so they're saying that because of high demand from data centers, people from electricians to project managers are earning 25 to 30% more than they did before this happened. So they said they talked to this guy in Columbus, Ohio who

said he's been doing odd jobs hanging drywall trying to find clients. Um he

said he pinches himself every day going to work. He's 51. He now makes more than

to work. He's 51. He now makes more than $100,000 a year. It's a huge increase in pay and it's all because of data centers and they said they had all these stories about these people who are in construction workers making more money than they ever thought possible. But

this is one of those this is one of those things though like if if you're a realtor in 2020 late 2020 early 2021 >> it's the best market environment you're ever going to have

>> ever right low interest rates >> bidding wars housing selling like this is going to be the probably the best >> labor market for these people in these specific industries ever. like this boom is going to be the biggest one they ever see.

>> Correct.

>> They're gonna be talking about this forever.

>> Yeah.

>> But anyway, that's a good benefit, I suppose.

>> Absolutely. All right, let's do some crypto stuff.

>> Um, crypto has been acting horrifically.

>> What do you think what do you think Bitcoin could go to? Like,

>> especially notable considering the strength of the stock market. Are you

asked me for a Bitcoin price target?

>> Mhm. You gave S&P 10,000 couple.

Obviously, a lot of this has to do with the stock market because crypto is a risk asset.

>> This could this could age terribly.

Um, I think the bottoms in.

>> Okay.

>> But could it go to 70,000 and then I mean, yeah, why not?

>> And obviously if if the stock market falls 20%, Bitcoin is going way lower.

>> Sure. But here's my grand hedge. Did I

buy more? No. So, do I really believe it that much that I'm putting my money where my mouth is? No.

>> Oh, okay. See, I I'm a money where my mouth is guy. I start I said I started buying. I've been a little bit tr once a

buying. I've been a little bit tr once a week. I'm buying a little more crypto

week. I'm buying a little more crypto because it crashed.

>> Yeah. If it

>> Every time it crashes, it comes back.

>> If it rolls over again, I'll buy. Um

Okay. So, investors pulled $6 billion from global crypto funds. November's

Exodus is so far the worst on record for ETFs. So, investors are scared. there.

ETFs. So, investors are scared. there.

You know, for whatever reason, I mean, maybe prices are going lower. It's that

simple. I don't know. But they're

pulling money out of it.

>> So, that's interesting because in April, money went in, >> right? Everyone flooded in to buy the

>> right? Everyone flooded in to buy the dip. Now, the money's flooding out.

dip. Now, the money's flooding out.

>> Yeah.

>> I think that's interesting.

>> The April crash felt worse. Maybe

because it was in the context of falling falling stock prices as well. Like for

me personally, I I said this in April, I almost sold, >> right? I remember I was I was on the

>> right? I remember I was I was on the baseball field and I saw um I saw a tweet from a guy that I really respect who I think is really bright on this stuff, levelheaded say that Bitcoin go

to 10,000. I said, "Ken, holy shit." Um

to 10,000. I said, "Ken, holy shit." Um

and that was the literal bottom, but I was genuinely tempted to like sell a decent amount. So,

decent amount. So, >> do do you think it still could go to 10 at this point with the ETF powerhouse behind it?

>> No.

>> I think I almost think it's impossible.

No, I I just think that there's too many people with too much money that would >> unless there's a quantum computing hack or something. But, you know,

or something. But, you know, >> it's funny. Someone did some I saw some conspiracy theory out there saying like Bitcoin is crashing because they're worried about quantum computing figuring it out someday. But if you could figure out the code to Bitcoin, what would be

the point of it? Because it would all crash if if you unless you just wanted to see >> see anarchy like if you could hack Bitcoin and it wasn't secure network anymore, so what? It's all going to zero.

>> Well, then what? And that right if you're the why and why wouldn't you hack the Federal Reserve or the Treasury >> or steal the US Constitution, >> right?

>> Declaration of Independence. I mean,

yeah.

>> All right. So, um, in LOL O news, here's a a press release from Strategy.

Uh, establishment of USD reserve.

Strategy today announced that it has established a USD reserve of $1.44 44 billion to support the payment of dividends on its preferred stock and interest on its outstanding

indebtedness. The USD reserve was funded

indebtedness. The USD reserve was funded using proceeds from the sale of shares of a of class A common stock under strategies at the market offering program.

Uh strategy's current intention is to maintain a USD reserve in an amount sufficient to fund at least 12 months of its dividends and strategy intends to strengthen the USD reserve over time.

All right. So, um,

>> oh, so back into fiat, I see. H,

interesting.

>> So, they sold shares and they raised cash, aka a USD reserve.

>> Is this a massive red flag to you or is this just like, oh, no, they're they're just they're being prudent.

>> Um, >> cuz I feel like you've been more with strategy. You you followed this story

strategy. You you followed this story pretty intently.

>> Both. Yeah. I uh if this is not the local bottom or a local bottom for strategy, which I do believe it is, like I think the next 20% is higher, then holy cow, this stock is in so this company is in so much trouble. Now,

there are people that know about where like the the puking point is for his Bitcoin holdings. I don't know all the

Bitcoin holdings. I don't know all the mechanics of how it works.

>> I saw this morning someone said the average price is like 75 for them.

>> I don't know when that means they have to sell.

>> It's it's much much much lower. So, um,

anyway uh >> but it would to me it'd have to Bitcoin can't like obviously the premium has compressed so much. It would just have to be Bitcoin would have to keep crashing because if you look at the chart of this thing, holy smokes did it

get rocked. I mean,

get rocked. I mean, >> it got rocked. So, relative to Bitcoin, too. So, that's why I think the there is

too. So, that's why I think the there is a floor under strategy because smart people would just be like, "All right, well, now it's trading at a at a 20% discount to its Bitcoin holdings. Like,

I'm buying because if there's a Bitcoin balance, the leverage is here." Yeah, it would be it would just be but if Bitcoin falls 20% more from here, look out below, right? I I think I think you're

below, right? I I think I think you're right. If if Bitcoin stabilizes that

right. If if Bitcoin stabilizes that that this thing I don't know >> it depends it depends on the M. It's

called the MNAV of where strategy is relative to its underlying holdings. And

there is a floor at the where the discount could go to. Like I don't think it could collapse to like, you know, a 20% discount for example because people come in and buy.

>> But the the real where this snowballs is people start worrying like okay he's not going to be able to fund any more purchases anymore because people aren't going to buy the convertible notes. Like

that is when >> but but counterpoint he just did yesterday. They sold the $1.4 billion

yesterday. They sold the $1.4 billion worth of stock. I just think this is one of the stories where when Bitcoin is going up, he looks and sounds like a genius. Like, oh god, this guy has it

genius. Like, oh god, this guy has it figured out. When it's going down, he

figured out. When it's going down, he sounds like a lunatic. And it's it's obviously it's it's not either of those things. Those are the extremes, but

things. Those are the extremes, but that's how this and it's kind of like crypto in general, but this strat this company especially >> Yeah.

>> is like that.

>> Yeah.

>> All right. Uh so there's some new studies that came out. Let's talk

housing. uh in a study from the University of Chicago Northwestern uh they found that Americans demonstrate reduced work effort, increased leisure spending and investment in risky

financial assets among young adults who face little to no realistic prospect of being able to afford a home. So they're

they found out and they I guess I don't know how they did this, but they found that people who are owning a home or it's more realistic uh they take fewer risks and they strive harder at work, which is kind of surprising. the the

work thing I don't I don't know how you can actually figure that out. Um but the whole the risk thing obviously makes sense and we've talked about this and I do think and and some people look at

this and go this is a bad thing and I continue to think this is probably a net positive for most people who are doing this for a wealth not for their psychology not for their psychic income.

I think from their bottom line they're going to be wealthier because of this because they're willing to take more risks and invest in the stock market. I

think that is going to be the outcome of this. Even if they're not happier

this. Even if they're not happier because they would rather own a home than have a stock portfolio.

>> Yeah. Cuz somebody's like, "All right, I have 20. I would have had $17,000 in my

have 20. I would have had $17,000 in my brokerage account and now I have 34."

Whatever it is, like they want to be in the house.

>> Yes. For those that want to be in the house.

>> Yes. But obviously this So they put some numbers behind the stuff that we've been talking about. This obviously makes

talking about. This obviously makes intuitive sense. This is kind of crazy

intuitive sense. This is kind of crazy though. They look at because the FT is I

though. They look at because the FT is I guess a lot of people are based in the UK or overseas. Um they show housing price affordability across the UK and US. They show London, the UK and US. And

US. They show London, the UK and US. And

look at how much more unaffordable it is in London and the UK. Obviously, if you put like New York on here, it would be probably pretty similar to London. Maybe

not as bad. Um but this just shows the house price to income ratio. And I just keep thinking in places like England and Australia and a lot of places in Europe,

things are way, way worse. And I just wonder if people think it's bad now.

Imagine I can't believe that people aren't like riding in the streets or if like the house prices in Australia and London and such. Um I just think that it it could get worse and it doesn't seem

like anyone is willing to do the thing that we need to do, which is build more housing. Well, as far as the the

housing. Well, as far as the the comments about the foreign markets, I I assume you don't track foreign politics.

Like maybe it is bad.

>> Fair. It it's possible, but like the the price to income ratios in places like Australia and the UK are five times worse than they are in the US. They're

they're so much the off the charts worse.

>> Yeah.

>> And I just think that like are we on track to become those type of countries?

Are we actually going to do something to fix it?

I don't I don't see anyone willing to fix the problem yet. There's like a few handful of cities that are doing it.

That's it.

>> Yeah.

>> All right. Uh did you read this piece from Greg Zuckerman about Charlie Munger? So, it's kind of the the story

Munger? So, it's kind of the the story of Charlie Munger's final years and it's a really good read, >> but I wanted to pull out this one piece and I think this kind of >> kind of blends in with what we've been talking about with like higher expectations and how different

generations. So he says um he owned a

generations. So he says um he owned a home with spectacular ocean views in Monaceto, California. Uh I guess he

Monaceto, California. Uh I guess he designed the entire community. They call

it Mungerville. Um and at one point he told a friend he expected to spend his last years there. I looked the house up.

It looked fantastic. Beautiful, right?

And said instead, Mer chose to remain in his longtime home in Los Angeles. The

place didn't even have air conditioning.

During a heat wave three years ago, friends bought electric fans and bags of ice to cool his library. Mer didn't

care. The home was close to people he liked in the project he found simulating. So, this guy is obviously a

simulating. So, this guy is obviously a billionaire, could have easily afforded air conditioning, didn't want it. The

first person I thought of when I read this is my father. My dad would do this exact same thing. And I feel like this is the this attitude, this like I don't want it. I don't need it. It's I'll be

want it. I don't need it. It's I'll be fine. Um, which we grew up in a house

fine. Um, which we grew up in a house without air conditioning, by the way. My

parents just got it finally a few years ago. Um, this is something my father

ago. Um, this is something my father would do. And I feel like this this

would do. And I feel like this this attitude of like I don't need it. I feel

like that is that that is dying with the older generation of the babies.

>> That's depression babies.

>> Yes. Exactly. So we don't have that anymore. And so starting with Gen X and

anymore. And so starting with Gen X and lower, that whole attitude I wanted completely gone.

>> Yeah.

>> That attitude this is gone. Like I I just thought it was really funny because I just thought for like oh my gosh that's my that's my father mentality is is sad and I understand where it comes

from obviously, right? like your

childhood memories form who you are forever. You can't change who you are.

forever. You can't change who you are.

Uh and I'm glad that that that is dying out. I'm not glad that these people are

out. I'm not glad that these people are dying. Don't misar me. But that that

dying. Don't misar me. But that that that is a horrible way to go through life.

>> I actually Yes. When you see the the stories about billionaires who who drives a 20-year-old Honda Accord or whatever, I don't think that's a success story. No,

story. No, >> I think that's someone who like can't get out of a or the the hey, this person was a janitor who secretly had $8 million and never spent a dime on themselves and lived above a garage, >> right?

>> Um I don't think that's a success story.

I think that they should have spent the money on theelves and made their life better.

>> Me, too.

>> Some people would disagree with us.

>> All right. Um All right. So, no one else is going to care about this, but you're going to Disney next month, right?

You're taking the kids on Christmas.

>> I am.

>> How long you going for? Uh, we're going to we're going to Universal and uh Disney.

I think I'm going for five days, something like that. Six days.

>> You're hitting all the Disney parks.

>> I don't think we're doing Animal Kingdom because we did it the last time.

>> That's one we didn't do this time. All

right. So, I'm going to give you the rides that you should buy the Lightning Lane Premier Pass for. Okay.

>> Okay.

>> This is Ben's Ben's ride. We did this at the end on Thanksgiving dinner. We all

done all the parks. We all went through and named our favorite rides. So,

Guardians of the Galaxy at Epcot is a must. Uh, that's one of the best roller

must. Uh, that's one of the best roller coasters I've ever been on. I couldn't

believe how great it was. Like, it was fantastic. So much fun.

fantastic. So much fun.

>> Think we did that last time. That was

good.

>> There's an Aerosmith roller coaster in Hollywood Studios that I didn't know about. It's called Rock and Roller

about. It's called Rock and Roller Coaster. It's the only roller coaster

Coaster. It's the only roller coaster that goes upside down.

>> Uh, it's fantastic. Uh, Tron, of course, is very cool. Do you see the picture I put in here of me doing Tron?

>> That's amazing. So, Tron was closed last time we went.

>> Okay. It's very fun. It's It's as advertised. My kids said a little too

advertised. My kids said a little too short, but it's it's like that thing.

Like it looks like it's fake what I'm doing. That's the actual roller coaster

doing. That's the actual roller coaster riding on like a mo motorcycle. Um Tower

of Terror was great. My my daughter Kate, my youngest, was holding on my arm for dear life. Um and a few other ones that you know, but um the Star Wars rides are overrated.

>> Stop. Just stop. Next topic.

>> Really? You don't think this? I think

the Star Wars rides >> resistance is [clears throat] overrated.

What is wrong with you? They could have made a very cool Star Wars roller coaster and they chose to make some like to make you feel like you're in the movie. And

movie. And >> yeah, imagine being a kid.

>> Yeah, but it's the new Star Wars movies like that no one likes. It's not the old ones.

>> Get out of here. Get right.

>> And finally, it's a small You like horror movies. It's a small world after

horror movies. It's a small world after all. Could be a horror movie. They could

all. Could be a horror movie. They could

make a movie about It's a Small That is the creepiest ride. I was telling my kids like just just be aware this is the creepiest ride you're going to go on. Uh

anyway, okay, that's all I got.

>> All right. I have some Disney stuff later, actually, as it turns out.

>> Okay.

>> Um All right. So, ne So, uh let's talk streaming stuff.

>> Oh, wait. Hang on. One more thing. We

did, you know, they had the live Indiana Jones thing, right? The Indiana Jones show. It's Yeah, it's one of my

show. It's Yeah, it's one of my favorites cuz that's my favorite action movie of all time.

>> Um and my son George, who's watched all the Indiana Jones movies multiple times, he loves them. Uh he goes, "I don't think that's a real Indiana Jones, you And I said the the original movie came out in 1981.

Harrison Ford is like 85 years old now.

It's kind of hard to believe that that I mean I know they're still making the the bad movies and recreating them, but uh it's been out for a long long time. And

I also said that's the greatest action movie um jingle ever.

Right.

>> Yeah. It's just absolute goosebumps.

>> Yeah.

>> Um all right. So Michael Seymble did a post that we spoke about uh last week with his favorite movies on the state of streaming.

Um there's there's uh so Warner Brothers is for sale. Talks are heating up that Netflix might buy them in in a mostly cash offer. Paramount is obviously in

cash offer. Paramount is obviously in the picture.

>> Did you did you listen to the James Cameron one with Matt Belly?

>> I did.

>> Okay. And he said he absolutely does not want Netflix buying Warner Brothers, which I thought was because he's worried that they won't show all their movies in the theater, >> right? So they'll show the, you know,

>> right? So they'll show the, you know, the the the Batman of the world, but like um Sinners, for example.

No way.

>> That would go straight to HBO or wherever. Yeah. Or Netflix now.

wherever. Yeah. Or Netflix now.

>> Um so anyway, that interesting to see where that lands.

>> And Netflix hasn't really hasn't ever really done a big acquisition like this.

>> Certainly not a giant studio. I mean, I I don't want Netflix to buy them.

I think we have to just relent and just it's going to be Apple and Amazon and Netflix in the future. They're gonna

>> No, Paramount.

>> Yeah, I guess Paramount. Yeah.

>> Um, by the way, Paramount, Michael Eisner did uh Indiana Jones. More on that in a

second. So, YouTube Premium has

second. So, YouTube Premium has 125 million subscribers, paying $14 a month.

What do you get for that? Just no ads.

>> Um, I wanted to watch I wanted to watch So, my favorite Patrick Oshanosy interviews are with Rue.

>> I don't know what she's doing down there. I hear noises. My favorite

there. I hear noises. My favorite

Patrick interviews are with the Hollywood guys. So, I love listening to

Hollywood guys. So, I love listening to Mike Oitz.

>> Mhm.

>> From CIA.

>> Yeah. Um, I love listening I loved listening to Ari Emanuel >> and Barry Diller, like all these guys that made Hollywood.

>> So, I wanted to watch the Ari Emanuel uh one and I I I popped it up on YouTube and uh there's there's commercials in there. So, for YouTube Premium, which is

there. So, for YouTube Premium, which is not YouTube TV, >> right?

>> YouTube Premium gives you I guess adree viewing.

I think I'm sure there's more to it. I

haven't really like done a deep dive, but they've got 125 million subscribers paying $14 a month. That's $21 billion a year. To say nothing of YouTube TV,

year. To say nothing of YouTube TV, which I I'm sure I could just >> It is kind of It is kind of funny that people tried to like say Google's done.

Like, how stupid was that that people were actually throwing dirt on the grave of Google?

>> So, Barry Diller um said to Patrick, now Barry basically invented the movies. Not

not exactly, but he was a hugely hugely influential um media media guy. He said, quote, "Hollywood is irrelevant."

>> Okay. Meaning

>> meaning >> because of YouTube. Oh,

>> it's YouTube. It's Netflix. It's Amazon.

It's Apple >> like Paramount and Warner Brothers and like who gives a there. I mean,

obviously they're a fraction of >> the old school the old school Hollywood being so important is not anymore.

>> Um so check out this chart. streaming

earnings, Netflix net income since 2019 versus the major studio direct to consumer losses, Disney, NBC, Universal, Warner Brothers, Discovery, and

Paramount. Obviously, Netflix disrupted

Paramount. Obviously, Netflix disrupted them. They were so late and then they

them. They were so late and then they overspent. Remember Disney Plus? How

overspent. Remember Disney Plus? How

much the money they spent out of the gate trying to catch up and uh didn't work obviously. So, this is wild. the

work obviously. So, this is wild. the

share of US TV viewing time.

Like the the the pie is not growing.

Nobody's watching TV more than they used to. And increasingly,

to. And increasingly, uh legacy broadcast cable, it's just it's just it's it's an ice cube. It was

58% in January 2023. 58% I'm sorry, 57 and a half% down to 42%. That is a rapid. It is melting fast.

rapid. It is melting fast.

>> Where do you think YouTube TV falls in this?

>> It is in all of the streaming. Okay,

>> because YouTube TV is YouTube is bigger than Netflix.

>> Wild stuff.

>> Makes sense.

>> All right. Oh, we

>> So, and then the next chart, the next chart shows streaming, US video revenue, streaming versus traditional TV, box office, home entertainment.

And yeah, streaming is just going to continue to eat into the pie, which is why so many people are worried about Netflix buying Warner Brothers. like the

the theaters are already under such uh pressure that if Netflix like does what they do and just move moves a lot of these would be theatrical releases to to

the couch, not great. All right,

>> Disney basically has to hold on to ESPN forever. Like if they get rid of ESPN

forever. Like if they get rid of ESPN and one of these other big streamers picks them up, like then it's over.

>> Lastly, to to put a bow on this, he has this great chart that I've ever seen.

And it shows recovery rates since 20 since 2019.

And it shows all different categories.

US restaurant revenues exceeded 2019. So

they're all the way back.

>> Do you remember when people thought people were saying that like restaurants are dead forever? That was actually a thing.

>> Hotel average daily rates all the way back. North American airline passengers

back. North American airline passengers all the way back. Okay. What's not back?

>> New York City mass transit recovery.

Film industry box office receipts only 75% recovered. film industry tickets

75% recovered. film industry tickets sold only 60% of 2019 levels.

>> I'll get to my recommendations. We went

to the movie last weekend.

>> Zootopia.

>> Wicked.

>> Wicked. Okay. Um All right. Somebody

told us that air fryers are what, Ben?

>> Okay. A bunch of people said this. Air

fryers are small convection ovens. And

yes, you can have a large oven that has convection mode. Convection ovens have a

convection mode. Convection ovens have a heater which is feeding a fan that blows the hot air into the oven space. The

fast moving of the air speeds up the speed of the preheating. It shortens

cooking time. I think people were saying one of the reasons it speeds up so fast is cuz it's smaller. But a few people sent us pictures said, "Hey, I have an oven and uh an air fryer oven right below it." Like those double ones, you

below it." Like those double ones, you know? So, some people had it.

know? So, some people had it.

>> Anyway, >> um so I keep getting emails about my car.

We were >> People have very strong opinions about what kind of car you should get.

>> So, get this. I was dropping Kobe off to school uh last week and he's never said anything about a car. He pointed out a car and says, "Daddy, I really like that car. You should get that." A big white

car. You should get that." A big white Range Rover. I swear to God.

Range Rover. I swear to God.

>> Okay.

>> Um we were driving on the highway the other day. We were going to IKEA, which

other day. We were going to IKEA, which by the way, when did IKEA become expensive?

>> Oh, really? The Snooping Floorans are expensive now?

>> So, I got Kobe a desk. The desk we didn't spend a lot of money on. and it

was maybe 90 bucks, but the desk chairs are all like $2, $300. I'm like, what?

So, we're Kobe has become a value shopper. I took him to the mall the

shopper. I took him to the mall the other day and he said his budget is $35.

Uh, which is very cute. So, he's So, the chairs are 200 bucks, 300 bucks. And he

said, "Why is this place so expensive?"

So, we ordered a chair on Amazon. But

anyway, on on the uh on the highway, a GX passed us. And I said, "That's the car that I'm going to get." and Robin, Kobe, and Logan looked out the window and they all at the same time said

either ew or I don't like that it's ugly. [snorts]

ugly. [snorts] >> Okay. Uh

>> Okay. Uh >> oh.

>> I'm standing my ground.

>> Okay. I guess I haven't seen the new ones. It's Oh, so it's kind of boxier

ones. It's Oh, so it's kind of boxier now.

>> It's very boxy. I I don't know that I love the look either, honestly. But I

don't want to be I just want a car that works.

>> It does look kind of like futuristic.

Eh, it's not I kind of like the boxy look, too. It's

not terrible. Um,

>> so my my struggles with TVs continues.

>> Okay.

>> Two things I'm bad at. Buying cars and buying TVs. >> Um, so the people who we bought the house from, they left their TVs, which was very nice.

>> Uh, but the TV in the basement is an older TV and so it only has like one HDMI cord.

>> Wait, does that mean you got rid of your TV with a line on it?

>> I left it. Yeah, finally.

>> I left it.

Oh, the people in your house must in your old house thought, "Oh, great.

Thanks for the TV with the line."

>> No, I'm sorry. I'm sorry. No, I threw it out like I you know.

>> Um, so I put I was trying to hang my TV from my office there, but the TV was too thin. It didn't fit on the wall, and I I

thin. It didn't fit on the wall, and I I I'm trying to put it on the the the rack, and I crushed the TV.

>> Just I'm like, "What? All right. It's

annoying. Whatever." So, I go to Best Buy, get a TV, um, and I'm swapping out their TVs with my TVs from my house. Uh,

have some guys come and hang the TVs. There's three TVs. I'm not hanging three TVs. Plug in the TV downstairs.

Blinking red light six times. I catch

GBT. What's going on? Warrant. It's a

It's a manufactured defect. I'm like,

[snorts] come on.

Go back to Best Buy. Uh, swapped it out.

Just annoying. Just annoying.

>> That is annoying. Okay, speaking of breaking stuff, so Mark Andre did this thing on a podcast recently. Um, and

they wrote about it. Uh, Alex Danko wrote about this and he says, "If you live in the United States today and you accidentally knock a hole in your wall, it's probably cheaper to buy a flat screen TV and stick it in front of the hole compared to hiring a handyman to

fix your drywall." And I think we're real like getting stuff fixed is it's hard to do. It's expensive. Like you

have to pay a certain amount just for someone to come into your house, right?

So I have the Wi-Fi enabled uh heater on our phone. Like it attaches to our

our phone. Like it attaches to our phone. So, what do you use? The nest or

phone. So, what do you use? The nest or the honey well?

>> It's like a sensei honey well. Yeah, a

sensei. I don't know.

>> I hate the honey well. I I swapped the nest for the honey well and I regret it.

I want to go back.

>> Okay. So, you can turn it up and down.

Obviously, I get a note that our last night in Disney, hey, your heat fell below cuz it there's a big cold front that came in. It's tons of snow. Heat

fell below 60° and it's like I look and it's like 54 degrees in the house. So,

oh shoot. So, my father-in-law the next morning goes to check it out. Yeah, your

heater's off. It's broken. So, as we're flying home, he luckily he went early and did this. He called the heating place, came to look at it. Heater's

broken. Oh, should we come home to a broken heater?

>> When you say your heater, like your the the water boiler or whatever the the boiler, >> the actual Yes. Heating machine. Yes.

Not the the We had no heat in our house.

Okay.

Whatever you want to call it. The fire.

>> What is it?

>> He's like, "It was unsafe." He's like, "There's like a He's like some water dripped and there's rust and there's like a the flame of the heat was like it was like a backdrop." He's a very unsafe situation, so I have to fix this. He

says, "Here's the problem." So, he was there for a couple hours trying to figure it out. You need this new mainframe. Whatever you're saying, it's

mainframe. Whatever you're saying, it's going to be expensive. Okay, whatever.

We need heat. It's freezing. Here's the

problem. It's Friday after Thanksgiving.

We're open today, but the part carrier for the carrier air conditioning are not open. We can't get it till Monday. He

open. We can't get it till Monday. He

says, "What we could do is you could spend 200 bucks. I could have someone from Carrier drive there for that $200 fee and then they could get the piece."

And I said, 'Or, yeah, of course we can't. We need heat. It's It's freezing.

can't. We need heat. It's It's freezing.

And then he says, "I can't get a hold of him. Sorry. We're going to have to go to

him. Sorry. We're going to have to go to a hotel or something." And I'm going to go clean up and get everything ready so Monday I can come in and just put the thing in and it'll be ready. Okay. All

right, fine. He called and he says, "All right, the carrier guy just called."

>> Wait, did he stay at the hotel?

>> No. So he, as he's walking out the door, he comes back in and he says, "The carrier guy just called." This is like 5 at night, by the way. He's been there all day, almost.

>> He says, "The carrier guy just called me. he can come in and meet me. I can go

me. he can come in and meet me. I can go get it." And I'm like, "Man, listen. I

get it." And I'm like, "Man, listen. I

feel bad. It's a holiday weekend. You're

working." He said, "Listen, I don't get paid until this gets fixed. So, I would rather do it now than Monday." So, I said, "Go for it." The guy did it. Came

and fixed it. Um, but that that kind of thing, those people are never going out of business.

>> No. So, wait, you didn't need a new thing. You just needed a a piece fixed.

thing. You just needed a a piece fixed.

>> It was a big big piece. Some main frame.

I don't He's telling me the names like like I know what it means, you know?

Like I'm like, >> "It's the rotary goodter."

>> Yeah. Do it, man.

>> Yeah. Yeah. Anyway, but you know what everyone always says when this kind of thing happens?

>> Ah, the joys of home ownership. People

love saying that.

>> Of course.

>> All right. Anyway,

>> uh, let me start.

>> I'm due for some good luck on my house cuz I've had bad luck the last few weeks.

>> What happened with your door?

>> They're going to come and refix it, but I they're going to have to give us like all new TR. I don't It's going to be a mess, but they're coming next week to fix it.

>> All right. I'm going to start with some book stuff. So, a couple of weeks ago

book stuff. So, a couple of weeks ago when Josh and I were going to Austin, I saw I was watching CNBC in the morning and I saw this guy who I never

heard of, Tom Preston, do an interview with Andrew Osorin and talking about his new autobiography. So, Tom Fston ran MTV

new autobiography. So, Tom Fston ran MTV from the beginning. Like he was he was the guy and he had a fascinating life.

>> Oh yeah, I saw that interview too.

You're right. That was good. So good

audio book and in the audio book so he worked directly for Snar Redstone who owned Viacom and Sar Redstone is a worldclass

psychopath absolute tyrant maniac.

um and told he was Tom Freso was telling stories of taking him to um uh Southeast Asia to to go to sex shows and all this

sort of stuff. So after I finished listening to the book, which was good, I uh I saw like a a recommendation, right?

Like maybe you should listen to this. So

a book called The Unscripted by this author James Stewart. James Stewart

wrote Denna Thieves.

>> Oh yeah, he's good.

>> Yeah. Um so I listen to this. have a

really good investing column.

>> He he kind of helped me through the 2008 crisis. He was saying like every 10%

crisis. He was saying like every 10% lower I'm buying again.

>> H >> he had like this this rules in place.

Anyway, >> so um so I listened to Unscripted and it's the battle for Viacom and it's

Sumar Redstone and these two girlfriends that he lived with that were that that he gave $50 million each to that were bleeding him dry and keeping him away from the family. And the story about him

and his and and Sharie Redstone of course and uh and looped into it was Les Moonveves and Tom Frost. So they like pulled from that for succession, right?

Is that the book they used for succession? Yeah,

succession? Yeah, >> it it was it was unbelievable.

This this guy's life um and the aftermath of uh of all of that. So then

that led me to um another James Stewart book, Disney War. So Disney War, >> how are you listening to these books so fast?

>> I'm going to tell you. I'm I'm going to get to that cuz I I had a feeling that was coming. So Disney War is about how

was coming. So Disney War is about how Michael Eisner and Jeffrey Katzenberg uh Barry Dillers are involved because Eisner worked from Paramount. So the

story of how they built out Disney the movie studio cuz they were in the like in the 80s Disney was nowhere and remember when the Disney store came to the malls like it was a huge deal at the time.

>> Oh yeah.

>> So Disney was absolutely nowhere and then they they basically reinvented the studio. Little Mermaid,

studio. Little Mermaid, Beauty and the Beast, Lion, King of Aladdin. We were there, right? You

Aladdin. We were there, right? You

remember that?

>> Uh, excellent book. Excellent book. So, anyh

excellent book. Excellent book. So, anyh

who, the the question is, how do I have time to read these books? So, I was thinking about this because I knew I was going to have to answer because people are going to ask, "What are you doing, you weirdo?"

you weirdo?" Over the weekend, I took the kids to see Zootopia 2. Not over on Friday. So,

Zootopia 2. Not over on Friday. So,

Black Friday, Robin was with her friends. I had to kill the day. I don't

friends. I had to kill the day. I don't

know anything about Zootopia. Like I

never my kids aren't fans of the movie.

They uh I've never seen it, >> but my kids really like the first one.

I've watched it many times.

>> So it turns out it's a massive massive global sensation. Like did $500 million

global sensation. Like did $500 million over the weekend.

>> Yeah.

>> So I took them to Lincoln Square to the IMAX because I needed to kill the day, right? So my kids are car sleepers. So

right? So my kids are car sleepers. So

boom, two hours in the car. The next

day, IKEA. I'm putting together Kobe's desk. another hour and a half. I'm

desk. another hour and a half. I'm

running errands all weekend and I'm listening. So, the the book was probably

listening. So, the the book was probably the the unscripted book was probably like seven or eight hours and then a couple morning walks to Starbucks.

>> That's kind of that's the nice thing about Audible, right?

>> So, I'm cutting vegetables. I'm putting

the groceries away. Like, is it a bit antisocial? Yeah, but my kids are

antisocial? Yeah, but my kids are playing. They're out.

playing. They're out.

>> So, they're yelling at you and you're ignoring them.

>> No, no, no. But a table >> table pounder for unscripted, >> you would love this. It's it's

succession. It's it's unbelievable. And

it one of the one there's a lot of things to take away from the book, but envying like these billionaires, >> right? It's not what you think, right?

>> right? It's not what you think, right?

>> Tragic life. Sh Redstone living under the thumb of her maniacal truly sociopathical sociopath pathological.

Whatever it is, that guy's a total psycho.

>> Okay.

>> All right. Anyway, enough with the audiobooks. Um,

audiobooks. Um, we Oh, last thing. Uh, Zootopia. So,

excellent movie. Had no expectations.

Truly a very quality movie.

>> Jason B >> in the the trailer. Project Hail Mary.

I'm in.

>> I can't. That's one of my favorite books I've read in a long time.

>> Remember we were like, how are they going to like put that onto the big screen? It looks good.

screen? It looks good.

>> I don't know how they're going to do the alien. I I still I'm worried about how

alien. I I still I'm worried about how they're going to make the alien look. It

looked pretty good.

>> Okay.

>> Uh, another coming attraction was a Neil Diamond biopic. I'm not a biopic guy.

Diamond biopic. I'm not a biopic guy.

Like I didn't see the Bruce Springsteen one. I didn't see

one. I didn't see >> I'm I'm sick of these the Dylan and Bruce Springsteen.

>> I didn't see Rocket Man. I What did I I watched Queen maybe. I watched

>> We need to have one for all of these guys. No, I'm sorry.

guys. No, I'm sorry.

>> No. Okay. However,

so I certainly in a vacuum I don't need to see a Neil Diamond movie, but it's Hugh Jackman and Kate Hudson.

>> H I don't know. You know, the best the best Neil Diamond pop culture moment is Saving Silverman. They have a Neil

Saving Silverman. They have a Neil Diamond tribute band.

>> All right. Um, did you binge watch The Beast and Me?

>> We're two episodes done away from finishing.

>> This is the first show that we've binged. I feel like we were like 25 again.

Kobe was out of Playdate over the weekend. Logan was somewhere else. We

weekend. Logan was somewhere else. We

like we watched three episodes on Sunday.

Highly bingeable. It's been a minute. I

can't remember the last time I I binged watched a show. So anyway, I think I thought Cla was Clare Dan was so much stronger than her male counterpart.

>> So you didn't see I thought like the scene where they're getting drunk together and the scene where they're at the lunch, I thought that they just played off of each other so well. I

think he is amazing. I I love that guy.

>> I thought there were there were parts where he was strong and part parts where it literally sounded like he was reading.

>> Okay. I I think he's fantastic. So we

we'll have to agree to disagree there. I

enjoyed it.

>> Good job.

>> Anything else from you? No, I I am contented out the ass the past couple of weeks.

>> Okay. I got a little bit too uh so I finished Slow Horses the new season. It

was season five and I would say the first >> three seasons were like a nine for me.

Like I thought just out of knocked it out of the park. This is the best show no one talks about. I say this every year I watch it.

>> Gary Gary Oldman is so good in this show and I think the last two seasons are more like uh eights out of 10, right?

still good, not as good as the first three, but somehow the last episode, they always tie it in so so good and it's always a twist you never saw coming and the ending is always great and they always make you leave you wanting more.

It's just it's such a high quality show and it's only six episode seasons. It's

so it's so good. [snorts] Um I watched The Roses on my way down on my iPad total. Um

total. Um >> so do you ever hear of the War of the Roses from the 80s? It's Michael Douglas and Katherine Kathleen Turner. It's a

couple who's getting divorced who love each other and fall passionately in love and then they grow to hate each other and they sabotage each other's lives and this is an updated version of that and it's Benedict Cumberbatch and Olivia Coleman and Andy Samberg and Kate

McKinnon play their friend couple who's kind of funny and humor and it's just it's a it felt like a ' 80s or '90s movie. It's like not good but a total

movie. It's like not good but a total great airplane movie. Um Benedict

Cumberbatch is actually really funny in a comedy. I thought he was very good.

a comedy. I thought he was very good.

Um, so I that's like a it's on a Hulu, so it's like a it's a good background movie, like not something you have to pay attention to that much. Uh, Wicked.

So I took my kid My kids love Wicked.

They loved the first one. They listened

to all the music. My wife and my mother-in-law love it. So they went and took the kids to see the actual live show of it. So they love Wicked. So they

were so excited for it. Went to see it.

>> Um, and afterwards they're talking about how much they loved it and and how great it was. And uh,

it was. And uh, >> you hated it.

>> I had to be the turd in the punch bowl.

And I just put my hand up and I said, "I just have a little slight slight comment to make." And they're like, and my wife

to make." And they're like, and my wife knows probably what I'm going to say and she's getting mad at me already. Um, and

I said, I it's creative. I get it. But

they're trying to change the story of one of the most magical movies ever made. And I don't like that they tried

made. And I don't like that they tried to change Wizard of Oz to make it a story that it wasn't.

>> Okay. And I thought that they took a lot of liberties there. So, I didn't like the fact that they tried to change Wizard of Oz. That's my problem. And

obviously, the show has been out forever, so I should have known this, but I didn't know what the story was.

Uh, and I don't like that they tried to change Wizard of Oz. I think that's sacred material.

>> Yeah, I agree.

>> Don't.

>> Anyway, but my kids loved the movie. Uh,

and it was way too long for me.

>> Wait, when's the last time you've been to the theaters?

>> It's the first time in a while, I suppose. But yeah, they're they're

suppose. But yeah, they're they're psyched for Zootopia, too. It was

>> great. Not bad. $10 [snorts] ma tickets.

Not terrible.

>> Oh, last thing. So, this goes to the earlier point of Netflix depriving me, the movie goer, of a great cinematic experience. You know, there's a new

experience. You know, there's a new Knives Knives Out coming next week.

>> Can't wait. I I rewatched the first one this weekend because I I'm excited for it.

>> First one was was a 10. Second one.

>> Yeah, the second one was okay, but I >> But that should be that should be a big screen release.

>> I thought they're going to release it on like for like a week maybe. So, you

might be you might get it in New York if you want. I think they're going to

you want. I think they're going to release it for a week.

>> I texted uh I texted Robin yesterday.

Hey, uh Friday, December 12th, 7 p.m.

I'm going to see The Shiny at the IBCX.

It's a re-release [laughter] that I did not see in the theater 100%.

>> Okay, >> I'm writing it wrong, Ben.

>> All right, >> that'll be my Friday night solo.

>> All right. Uh are we going to get your predictions before the end of the year?

Are we doing Michael's 10 predictions again? Is that coming? I don't even

again? Is that coming? I don't even remember what my predictions were.

>> Someone Someone Someone on Twitter said to me, "Hey, you predicted that strategy was going to crash like this." And I said, "There's no way I predicted that.

It was probably a Michael prediction."

>> Did I? I have. I don't remember.

>> It's possible you did. So, I think we're going to need your 10 predictions coming up soon. You do that. That's

up soon. You do that. That's

>> You know what I have to do? I have to start working on it now because I don't I don't want to cram at the end of the It's too much work.

>> All right. Uh, thank you to the production team as always, Duncan and crew. We appreciate it. Thanks to all

crew. We appreciate it. Thanks to all the wonderful emails we always get from people. What's your email address?

people. What's your email address?

Animal Spirits@compoundnews.com and uh we'll see you next time.

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