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Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast.
Welcome to Animal Spirits with Michael and Ben. It's going to be a long show. We've got 50 pages in the Google Doc. It's got to be approaching the 2020 COVID records in terms of the length of the doc. We had a few people ask us if we're going to do an emergency pod. That didn't happen because I'm in spring break. I don't think we would have done one anyway, though, because I think we wanted to let things play out a little bit. Not that they still can't play out more, but where do we begin? We're
I always love hearing travel stories, some observations from the aisle, but let's put that to the side. I could wait. I do have travel stuff, but yeah, I think there's more pressing issues than my takes on cabanas. All right. So we're going to start with tariffs, of course. A lot has changed inside the market in the last week. And we're going to start with some wise words from our friend, Cullen Rush. Cullen said,
Tariffs are perhaps the most nonpartisan issue in economics. It might be the only thing that Paul Krugman and Milton Friedman agree on, but somehow, someway, the narrative got hijacked in recent years. How did this happen? How did we get to this place where something that was once so universally believed has somehow become controversial? And part of the talking points are
fixing some of the problems in America, leveling the playing field inside of our country and with the rest of the world, the global trade. And Cullen says, listen, inequality is real. There are certainly problems in our country that need to be addressed. We can do better. We should do better. But with that context, these are some of the data points. Household net worth at record highs. This is before we blew it up.
US households spend less on necessities than ever
This is the surest sign of increasing living standards as our basket of necessities evolves into items that the average American couldn't even fathom 100 years ago. So I read this in the, I wrote a post about tariffs and William Bernstein wrote what I think is the best book on trade called A Splendid Exchange. And he says that in the 1920s, households spent 25% of their budget on food. And now it's like 10%. And his whole point was, guess what made that number come down? Free trade.
Because we get food from other countries and it's cheaper. Inflation-adjusted median income is up 50% since 1975. The misery index is low by historical standards. Real GDP is at an all-time high. The median net worth, median, of over $200,000 places the average American in the top 10% of global net worth. That's a crazy number, that our median is top 10% worldwide.
Global life expectancy is improving dramatically. Child mortality has collapsed. We are experiencing exponential growth and technological advancements. The share of the world living in extreme poverty has collapsed. America owns 33% of all global wealth.
When you exclude the UK, France, Germany, Japan, India, and China, we own 50% of all global wealth. Yet we've somehow convinced ourselves we're being taken advantage of by the rest of the world. And that I encourage people if they want more from Colin on tariffs, he has a great video explaining in greater detail. Is it too far to say, and I know other people have said this, that we got to the point where things are so much better than they were in the past that we're starting to make up our own problems? Yeah. Yeah.
Yeah, I think a lot of the chronic complaining, and listen, there are problems, so it's not like to minimize it. Compared to any point in history, we've never lived in a better place than we are in today. And it's like we decided to just throw, just, eh, fine. Well, I've made the case that you don't compare yourself to your ancestors. You compare yourself to your neighbors. And when you do that, the situation changes dramatically. I think it was Jonathan Haidt who said this, maybe it was somebody else.
Complaining the way that we do is a sign of success. Back in the day, of course, there was no internet, but there was no time for this nonsense. You went to work. So the biggest question that we got in our inbox, and we got quite a few this week, is bending your brain into a pretzel, trying to figure out the motivation. What is the end goal here? What is he doing? Where are we going with this? Neil Dutta from RenMac says...
bringing, quote, bringing down interest rates to refinance debt. He's playing chess while everyone is playing checkers, end quote. This is a talking point circling around right-wing circles. Here's why it is dumb.
Recessions are nonlinear in nature. The risk is always that things can get away from you. Trump's policy, if it is indeed deliberate, is the equivalent of cutting off your nose to spite your face. Will you refinance debt at lower rates? Maybe. Then again, unemployment will be higher, which means fewer people will be paying revenues into the treasury. What about households with bank stocks getting destroyed? What makes anyone believe banks are going to go out there and loosen lending standards to help people refinance in the first place? Trump is not, and here's the coup de grace, Trump is not doing this because it is part of some grand plan. The plan is the tariffs.
He is doing this because it is what he believes. Trump thinks trade is bad. The market thinks trade is good. I would not expect Trump to be the one to deescalate because he does not believe in trading with other countries. His heart is not in that. It really is that simple. Trump is playing Russian roulette, not chess. This is the hardest part about this downturn is that every other downturn in history, or at least in the last 20 years or whatever, you'd think, well, the government is going to come save us. We can throw money at this somehow.
Rates are going to fall. The Fed is going to step in. But the government is causing this. They're causing this crisis. And do you think that a recession is the baseline now? I think it has to be. Baseline is, I mean, I think it's 75% chance. It's very, very high. And that number shot up in the last month drastically. Yeah. So betting markets have it, I think, at 60%. I can't remember exactly where. But it's gone on dramatically. Base case is hard because the base is changing every day.
Uh, Larry Fink was on stage yesterday and he said that CEOs that are telling him that we're already in a recession. And of course, what we've learned over the past many years is that there are certainly going to be pockets for recessions as there have been. The real estate market, for example, has been one forever, whether or not the
The globe is going to be into a recession. I think it's early to say. But the longer this goes on, sure, the likelihood of that happening increases dramatically. So this is from Ryan Peterson, who works at Flexport, which is, remember, he was a big guy people were citing during the pandemic because of supply chain stuff. He said 28% of all customers in Flexport's call yesterday said that they're pausing all ocean freight bookings from Asia until there's more clarity on where tariffs will end up.
I think the biggest problem is even if, let's say, they say, we're going to put a, we're going to stop this tariff talk for 90 days, like they've been talking about, or we're going to have a deal with every country in the world now. Even if that happens in the next few days or weeks, I think the confidence is the problem where does the market,
trust him and business leaders go, wait a minute, we can't trust anything he's going to say now at this point. I think that's the confidence and trust part is going to be very hard to bring back. Okay. But so let's just say that we roll this back. He makes a beautiful deal and we sort of move on. And this story is not over because we're still going to see the ramifications of this. But do you think that people are going to, and businesses are going to say, all right,
We've got another three and a half years. We're just going to coast until he's out of office. I don't believe that. I don't think people need confidence in his policies. I think they just need him to remove the uncertainty. Yeah, and I don't know if we're going to get that. That's a problem. This is how crazy the thing is. Dan Ives is bearish. Dan Ives put it out this week. He said, Trump tariff Armageddon will take U.S. world back a decade. China wins. He said, if U.S. tech companies are faced with this reality, saying if Trump, everything he laid out in that Rose Garden ceremony or whatever,
It will negatively change the tech landscape for decades to come. The cost structure of the US tech world would make it impossible to compete with China. And this would be a lotto ticket for the China tech landscape, BYD, Hawaii, Alibaba, Tencent, and thousands of other Chinese tech players to gain more global market share over the years. And he goes to all the stuff that he's been talking. He travels the globe. He talks to tech suppliers. I've never seen Dan Ives like this before, obviously. I've obviously been wrong on what he was going to do.
I still don't believe it. Maybe I'm the idiot here, but I still believe that... I think we have to... The door has been beaten down at this point. I think...
that's what the market hope is. And that is what worries me. So this is from Morgan Housel. He says, I spoke to an investor who said, if the market actually processes what happened yesterday, and he wrote this on Thursday, obviously, it would be down 30% to 40%. The fact that it's not is either denial or belief that it will soon be reversed. And I totally agree with this. If these...
tariffs are in place as they are laid out right now, the market could be down 40 to 50%. And I say this without, this is not, I'm not a scare person. I actually believe this. I believe that too. I just, what I don't believe is that the tariffs as proposed are going to stay on. That's the part that I don't believe. Yeah, I sure. Yeah. Because again, it would nuke
There's no way businesses could operate. There'd be so many businesses that would be completely shut down. So here's the people who are trying to wrap their heads around why is he doing this? Here's my analogy. This is the Luka Doncic trade to the Lakers. So everyone says, okay, set aside the fact that this was one of the worst trades of all time. And it's funny that trade is in the both of these, right? The Luka for Anthony Davis is probably the worst trade in sports history for what you're giving up and what you're getting.
Set that aside. The way that they executed the trade was almost as bad as the trade itself. And that's what's going. So that's the same thing that's happening with this. If people looked at these rates, these tariff rates that he created in all these different countries, and he did it on, it seems like every country in the world almost. And,
And people eventually figured out, like, wait, how did he calculate this? And people looked at the calculation, and it was basically like a fourth grader put it into chat GPT and said – and there was this formula, and people said even if this formula made sense, he did the formula wrong. And so that's the thing. Let's say you really believed that you want to onshore everything and that tariffs are a good idea. History shows and logic shows tariffs are not a good idea, but let's set that aside.
Let's say they are a good idea. The way that you do this, would you not say, listen, we're going to give you three years to get your act together and reshore as much as you can. And if you don't bring back a certain amount of
And we're going to incentivize you. If you reshore everything, we're going to, we're not going to tax you or something, or we're going to, we're going to give you incentives to do this. Instead of just laying these tariffs on, he could have said, we're going to give you three years to get your act together. Even then it probably is impossible. But so like, I feel like if he really believed this, he didn't, he gave it, he didn't give it a chance to succeed from the start. The execution was terrible unless his strategy and this strikes me as ridiculous, but let's go so far over the top just to bring them to the negotiating table. Um,
People are saying that this is as big a deal as the bread and woods, that it is going to reshape the future of global trade and the global economy. Maybe I'm in denial. I think that the megatrends that are in place, I think that if you go back, if we're 10 years from here, I don't know that this is going to be looked back upon as a watershed moment in global capitalism or global trade. It's hard to say, again, because the trust and the confidence thing, if all these other countries say,
Screw you. We're like if, you know, China and South Korea. Yeah, but we're the world's biggest customer. And so we have the leverage and he knows it. I agree. It's also a thing where, wait a minute, he's a lame duck president. We're going to, in 24 months, we're going to be getting new candidates who are going to be throwing their head in the ring to be president. Could we ride this out for 24, 36 months? I guess that is the thought process too. The funny thing is, is we keep, we do keep getting emails from people and comments from people saying, this is all political for you guys. And the only people that say that are obviously-
Yes, the only people that say that are obviously – they're being political, right? But so I am – I think you and I could probably count on one hand the number of times we've had an actual political conversation. You and I are not politics people.
Right. We, we would rather if we never had to deal with politics. The only time you and I have ever discussed politics off, off of the camera is through the lens of the market. Never asked you. That's not our thing. So I'm going to give a very nonpartisan political take because I never give political takes. So here's my, here's my political takes. I think the last two years have cemented the fact for me that we need to have age limits on the presidency.
Because the Democrats screwed this up by Biden not leaving. And guess what? Trump is almost 80 years old. Yeah, if that makes us ageist, I'll sign up for that. Yes. I think we should have limits on that. And also, here's my other thing. Because I feel like we have one party who is completely inept and doesn't get anything done. And we have one party who is just completely insane and does crazy things. So why don't we have a third party? Why don't we have someone come in and say...
I don't like what these people are doing, and I don't like what these people are doing. Let's do it a different way. Why don't we get that? Where is that? Probably never going to happen, I suppose, but those are my political thoughts. All right, let's move back to how did we get here and what in the hell is going on. By the way, this morning, there's some faction in the party. Not that Elon's the party. Well, I guess actually he is. Who am I talking about? Elon called Peter Navarro, who is spearheading, who is like the microphone for Trump. He called him Peter Retardo.
Is that what he called them? That sounds about right. So this is from the Washington Post. Over the weekend, Elon Musk launched into a barrage of social media posts criticizing one of the lead White House advisors for President Donald Trump. That's Navarro. His aggressive tariff plan. Musk was going over that same official head and making personal appeals to Trump. So this is the thing. A lot of people said, well, if Elon Musk is going to be the, and I think this is what a lot of tech people thought when they backed Trump. If Elon Musk is going to be the de facto president, then that's who we're backing. It's not really Trump. It's Musk. And it is kind of,
scary that he's listening to this Navarro guy as opposed to, to Musk. Okay. But I would disagree. I don't think so. My friend was like, doesn't he have advisors? Like who, what's going on? Who is, who's advising him? I said, no, no, no, no, no. I mean, yes, technically, but he's, they're not advising him. Right. He's got yes men around him saying this is yeah. Great job, sir. He's not doing what Navarro says. Navarro says math piece. You did awesome. Yeah. Matt Klein said, uh,
Like all sharp budget tightenings, this will reduce living standards. And these tax increases are targeted such that the poor will suffer disproportionately. The tax increases are also sufficiently complex and arbitrary that they will create substantial costs for businesses, reducing productivity and exacerbating the direct hit to income. Yeah. So he's saying tariffs are taxes, which when you, when you, it really is a tax. So he's saying it's like an equivalent of a 2%.
tax increase. And to some people, well, that doesn't sound like very much. But his point is this is going to hit the poor much harder than the rich. Of course. Yeah. So Jeremy Siegel said on CNBC, I think this is the biggest policy mistake in 95 years. So that gets back to the Great Depression thing. And I think that is completely true. I totally agree with that. This is like the biggest own goal. And it's also, so I did a history thing where I looked at, there was, remember Michael Semblitz did this thing of the 1890 tariffs. And then there's the 1930s tariffs.
And the world is more global than those times even. It was bad back then, but doing it now is even 10 times worse because of how interconnected everything is. Yeah, it's surreal. Like just watching the screen these last couple of days and not just the market, but like, well, who am I kidding? The market. It's hard to understand what it's doing. Here's my feeling though, because a lot of people are thinking like, oh, boo-hoo, the rich people are going to lose money in their stocks.
The stock market is from the rich people. Most people in America, more than 50% own the stock, own 60% of people in stocks. The home ownership rate in this country is 65%. Guess what? The majority of people own financial assets in the United States, even if the rich disproportionately. And the other thing is I keep thinking, I told this to you the other day, I'm in Florida for spring break and people are, the restaurants are full. People are spending money. And I feel like one of those people in a climate change movie, you know, where like the world is going to end and you're running around telling people like, do you people not realize what's coming? Because if we keep these on,
guess what? It's not going to be the stock market. It's going to be the economy, and that's going to be more painful. The market has been through more than this. The stock market will come back, but the pain that could be causing the economy from this, that is going to hit people beyond their portfolios, and that's what I'm worried about.
Right. So there's obviously been a political divide in the country, the haves and have-nots, the hollowing out of the middle classes, as I like to say, the destruction of the manufacturing class. There was an op-ed in the Wall Street Journal from Norbert Michel from the Cato Institute, which is not a liberal think tank. It's a conservative think tank. Right. Okay. He said-
Populists such as Vice President J.D. Vance argue that free trade agreements cause middle-class wages to fall, hollowing out towns across America. Yet the only way to make this argument is to cherry-pick the data to death.
The U.S. middle class has thrived over the past 40 years. In fact, Americans of all economic backgrounds have done well. The share of households earning more than $100,000 has tripled over the past five decades, and the share earning less than $35,000 fell by 25%. For most of this period, workers in the bottom 10% of income distribution experienced stronger wage growth than those with higher incomes.
The middle class has shrunk only in the sense that former middle income earners have moved up the income ladder. Materially, Americans are much better off than they were in 1970. Over the past 40 years, 70% of working age Americans spent at least one year among the top 20% of income earners. I'm going to repeat that.
Over the past 40 years, 70% of working age Americans spent at least one year among the top 20% of income earners. And 80% never spent more than two consecutive years in the bottom 10%. So he says it's true. Those are really good numbers. I've never heard that before. It's true that the number of manufacturing jobs is lower than it was in 1970, but that's because we can make so much
more with fewer people. And one of the things that is always cited is NAFTA and the WTO, and look what happened afterwards. Armand Domoluski tweeted, I am so tired of posting this chart, and it's the manufacturing share of US employment. With 1993, NAFTA passes on it. But the thing is,
It's been crashing since the 40s. It has been only going one way. And if you look at JP Morgan as a chart, showing Germany as well, their manufacturing share of employment now significantly higher than ours, but it's going down because technological progress. And we have more service jobs in this country. If you look at manufacturing versus service jobs, service jobs are the opposite. It goes straight up to the right. This next chart shows that.
Straight up into the right. And so this idea that the world has taken advantage of us and we're like, boo-hoo, it's just a complete f***ing joke. There's a chart from Bloomberg that shows US GDP per capita continues to grow at an accelerating pace. We are the envy of the world.
So let's talk about the other side, the people that are supportive of these tariffs, the people that feel like they are getting left behind. Cause I don't want to dismiss those feelings. They're real and they're, they're legitimate. Um, everybody's life is personal. You're not right. Like you live your own life. And so I totally get people's point of view that are feeling that way. So Michigan is a perfect example of this because, so I lived in the Detroit area for a few years. And it's funny because, um, if you drove like a foreign car in the Detroit area, like people would look at you side-eyed, like you,
Everyone knew someone who could get an employee discount at Ford or GM. Luckily, I was driving a Ford Taurus back then, so I fit in nicely. But obviously, there was talk all the time of, why can't we just have these people who could graduate high school and go get a factory job and live a middle-class lifestyle? And look what happened to the car manufacturers. Because they gave these unbelievable pension medical benefits, they almost went bankrupt. GM did go bankrupt.
I guess it was just an unsustainable period. And I think we'll probably never see anything like that again. That just didn't make any sense. And I understand people like wish it would be that easy. Um, and unfortunately it's just, it's not that, that world is gone. Uh, correct. All right. So there was an article in the journal talking about the, the title was the first victim of Trump's trade war is Michigan's economy. Uh, Mary books, Ziger, uh,
CEO of Lucerne International, another local auto supplier, is also talking with customers about her need to raise prices because of the new China tariffs. About 80% of the automotive hinges, brackets, and other components, Lucerne says, are made in China. She said, quote, there is no way we can absorb these tariffs. I don't have 20% margin to give.
She's the owner of the company with 25 people. I'm sure that they look at this and they say, okay, great. We'll pass along that higher cost to customers, but our customers can all of a sudden go, wait, okay, you're making us pay 20%. We had an email from someone saying the manufacturing of his small business product is going to be, the tariffs will be in the 40% to 50% range. And he said, if they go through
I'm done. I don't have a business anymore. It's completely nuked. And there's going to be so many cases like that where, and obviously we, I think we heard an email from someone who said like, I'm actually on the winning end of this for whatever, because of steel or something. Um, but he, he even said, I'm sure I'm going to be in the minority of this. So it's, um, strong feelings on both sides. Like there, there are a lot of people cheering this on and I want to give some examples of that. So
I saw a thread from Russ Latino. He tweeted, I just got off the phone with a business owner in Mississippi. He's pumped millions into a business distributing a product he imports from China. His contract with the company prevents him from manufacturing in the U.S.,
He also contracts with a number of large retailers. He described some of these contracts as inflexible, requiring him to sell a unit at a set price. He told me he anticipates paying over $1 million in tariffs next week and has no ability to simply upcharge his retail customers to cover the expense. In his words, Russ, I don't have 54% profit. This puts me out of business stuff.
I share this because there are probably tens of thousands of businesses in similar situations. I just happen to have one reach out to me. So here's some of the replies and some of the dialogue back and forth. And this went viral and toxic and blew up. And somebody said, okay, well, maybe it's best you don't make a contract like that. I'm just a simple guy, but I would have
There was another reply. Yeah.
I mean, come on. And move manufacturing back to the US. And that's a good thing. To which Russ replied, nothing screams free markets like you just have to do that here if you want to be in business. Somebody said, if your business relies on exploiting Americans, we're happy to shut it down. Russ replied, his business literally saves American lives. This is the hypocrisy that gets me, is the people who have been screaming for years about government manipulation and the government needs to get out of markets for free markets now want to see tariffs and price controls?
This is literally controlling markets. And Colin's point from last week was, this is going to drive prices up not only because of the tariffs, but because it's going to reduce competition and give the businesses that win have more pricing power, and they essentially turn into a monopoly. And so that way, you get lower quality goods for higher prices, the opposite of what you want, obviously. All right, I'm going to read an email that was kind of long, but I thought it was just really emblematic of the type of frustrations that people in this country are legitimately experiencing.
To my favorite weekly podcast hosts, thank you.
Your podcast brings up a survey a lot. It's a repeated survey whose conclusions are something like, my personal situation is good, but the whole economy other than me seems to be very bad. It's always come across to me the same as it comes across to you. People are just listening to too much doomer media, and things are actually pretty good. I have an econ degree from whatever, and until very recently was a disciple concerning tariffs being bad. This despite growing up and returning to living in the Quad Cities, an area that has been truly devastated by factory moves in the past.
I still believe in the comparative advantage stuff. Something clicked with me today while thinking of all this tariff news. Everyone in positions like yours are absolutely livid or freaking out. It seems like something seriously bad can come of this. It's frightening. But what are we defending here? I've got a good job. I'm the survey respondent that says I'm doing well. I am doing well. We make a lot more than the local average, but
I didn't start trying to have kids until I was 35. I saw these plant closures when I was a kid. I still remember my father pulling me aside and telling me that I absolutely needed a degree in this info economy. I couldn't repeat his mistakes. So I did.
I joined the Air Force to afford school. I worked hard to get a decent job out of school. I focused early on my career, the American dream baby, Ivy grad finance job. And then I was 35 and I just started having kids. I'm 39 now and having kids is tough, but I have one drive to my, to work with my wife, which is nice. We drop off the kid at daycare along the way. And then I pick him up from daycare, return to my empty neighborhood, bereft of kids, maybe probably just like your neighborhood, uh,
Our communities doesn't have its own little league anymore. I honestly don't know how to reliably get my kid playmates. What are we doing here? In the 1970s, before shopping containers, we all had cars, a house, food, some form of TV. And we had kids, people graduate, get a job that paid enough to have some form of life. And if kids in their early 20s in this information economy, it is really hard to have kids early.
And I need a bit more animal spirits myself, because let me tell you, it isn't easy having kids late. And my neighborhood is empty. Everyone says to the person on the other end of the survey that they are doing fine, but their neighborhood is empty too. Anyway, thanks for all you guys do. So I can't empathize with this, or I can't relate to this, because my neighborhood is the opposite of empty. Yeah, so is mine. We have a ton of kids. But I get the whole thing behind thinking in the past, people having kids, because that's a real concern, is the fertility rate is dropping and people aren't having as many kids. I also wonder, though, what young people,
So my wife and I had kids when we were, I was 32, I guess, 32, 33. And I think about what if we would have just had kids when we were like 22? I enjoyed having that extra buffer period to enjoy my life. I wonder how many people, young people want to grow up that quickly these days.
You know, I think, I just think it's the, it's an affordability issue. So I don't think we're arguing whether it's good to have kids at 22 or 39. But I think it's also a maturity issue. In the past, people had to grow up and be more mature way earlier. And we don't think we, I don't think our young people are mature enough to have kids these days. So here's my takeaway from this email. This person represents millions of Americans, right? This is not a completely, this is not a total outlier.
However, people have seen, especially in the Midwest, towns that have been howled out that once were manufacturing hubs that are not anymore. That's a real thing. Yeah. So if you are this type of person who lives in this type of America, of course you feel this way. It doesn't mean that it's representative of the economy. It doesn't mean that the economy isn't working. But for these people, it really isn't. And so I could cite Cullen's data points, and I am on the side that like,
Tariffs are not the answer to this, which is a separate conversation. So there are millions of Americans that feel this way, but their attitude towards people like us complaining about the stock market, I understand where they're coming from. How could you not? I don't agree with their solutions, obviously, but I understand. I understand why they feel how they feel. Frederick Lewis Allen had that great book only yesterday that talks chronicles the roaring 20s and then the aftermath.
and he talks about the Roaring Twenties were this unbelievable time in America, obviously. The war was over. The Spanish flu was over. People decided we're going to spend money and have fun. But he also showed, remember back in like the 1800s, 85% of the country worked on a farm. And he said the 1920s, that was when people started going to manufacturing jobs for the first time. And he said that farmers of America got absolutely crushed as people went from working on farms to working in manufacturing.
In that period of transition, the farmers were like, to them, it felt like a depression. But to everyone else, it felt like the biggest boom time in history. And now we're seeing- And that's capitalism. That's progress. And unfortunately, people are left behind. Yes. Unfortunately, that is kind of what happens. And I think-
Because what do you mean they're wrong about their own situation? Right, but the whole AI robotics thing is not going to make this – is not going to lead to more manufacturing jobs. We're not going backwards. We're not going backwards. And so this idea that we're somehow getting ripped off to the bereft of – that's not a – I didn't use that word right. A for effort? Yeah.
Thank you. The rest of the world is ripping us off. Not even close. Jeez. So somebody posted a chart. The United States renamed for countries with similar GDPs. And this goes back to 2019. But nevertheless, California does as much GDP as India, Texas as Brazil, Hong Kong, Illinois. I'm sorry, Netherlands. I always get Illinois and Indiana backwards. So New York is Canada, Michigan is Belgium. So the point is that like,
We are the richest nation in the world by any metric. And this idea that they're taking advantage, the rest of the world is taken advantage of. And listen, I'm not going to pretend to be like an international cross-border economist. I don't know the details of how all this works. And I'm sure there are things that are, I'm sure there are areas in which it's unfair and we are getting ripped off. Can we discuss though too, there's the economic impact of this, obviously. Can we discuss how the internet has brought us to this place too? Yeah. This does not happen without social media and the internet. Of course. Right? Yeah.
It feels like we are being run in some ways by commenters on Twitter. Yeah, it does. Because it's true. And the hard thing is when you have a post that sort of blows up, I had to mute a lot of conversations on Twitter. I'm not going to lie. Through the last couple of weeks,
This is probably about as angry as I've been about a bear market. Usually I kind of, I think this is the dumbest bear market of all time. And if we go into a recession, it'll be the dumbest recession of all time. And so I was putting some tweets out there and I was venting. And the comments I get, it's hard to tell the difference between a bot that's programmed to think a certain way and the way that some people are replying.
Because they just, you know exactly what they're going to say. Yeah. If tariffs are so bad, how come other countries do it? I think we've lost the ability to think critically. And that is a thing that worries me, that this is not just a one-time shot across the bow. This is something that is, so, and this is something that I want to talk to, we're going to talk to Derek Thompson about his new book in a couple of weeks.
And I think one of the things I like about the book, I don't know if you've read it yet, is that it's an optimistic book. It's not a pessimistic book. And my biggest worry, and I want to ask him about this, do we as a society have the ability to back an optimistic view?
message like that. And I don't think we do anymore. I disagree. I hope we do. I'm worried that we don't. Getting back to the execution of these ideas. So some of the towns that have been hollowed out and some of the areas where we're vulnerable, that we have no production, that we're just reliant on China for whatever. I think most reasonable people would agree that we do need to protect national security interests. That should be like a bipartisan agreement. Like, yeah,
Some of the stuff needs to get fixed. Then do it that way. Let's be a little bit more targeted. These blanket tariffs on everyone everywhere, this is not the way to do it. No. If it would have actually been targeted, that would have made sense to me. Listen, we're not going to let China rip off our technology anymore. We're going to produce chips here. That sort of stuff would have made sense. The way that we're doing it now just –
Everyone's just going to end up paying higher prices and businesses are going to be hurt. And guess what happens? Businesses are going to protect their margins, and that means they're going to cut costs. And what does that mean? Layoffs are coming. There's going to be a ton of layoffs coming in the months ahead. Will so? Oh, no way. I almost can guarantee this. We're going to see a lot of layoffs because of this. Probably. Companies are not going to eat their margins. Let these eat their margins.
Uh, what if they just make, make stuff with shittier products? Like are we going to wear Nike's and, and they're just going to explode after the whole stitches are going to fall apart? Well, I tell you what, maybe we need to start making fishing poles in America again, because I bought like five fishing poles already on our trip. And every time I do, they break, um, car dealership guy tweeted Mercedes Benz to quote, protect the price of its vehicles in the month of April.
Parts pricing for customers will also remain unchanged through April. Incentives and discounts continue to be defined monthly and remain available. Stand by to stand by. So I just saw a commercial down here for like a Tomyami Ford or however you say that word. Like they were having a pre-tariff sale. Buy your car now before the tariffs hit. You know what else is going to happen too is used car prices are going to skyrocket. So maybe you can actually sell your Jeep for more than it's worth. So what about this? We're going to see a lot of unusual data.
people buying before tariffs and there's going to be a surge in the hard data and Trump's going to declare victory? It's possible. It's possible we see that. It's also, we're also- No, there will be funky data in the next month or two. Probably. As people get ahead of this. It is going to be weird. Somebody emailed us, guys, last week, our team at a bank was debating what's the opposite of animal spirits where we came into the year with? And they landed a sober resignation. Oh, that's pretty good.
I like silver resignation. Last thing before we get to the market's reaction. We got small business optimism this morning. Mike Sicardi tweets that the index fell 3.3 points to 97, its lowest level since October 2024, and its largest decline since June 2022, down three months in a row. I guess this is the thing, Ron Burgundy, I don't believe you.
Again, maybe I'm just a complete idiot, but I don't believe him. I don't believe because if I'm wrong and these are not a negotiating tactic, which I think they are, and these policies go through, Ben, I do agree with you that we will be down another 40% from these levels. So I made this point in a blog post.
You remember the old story from Art Cashin about during the Cuban Missile Crisis, how he talked to the old trader and he said, we have to sell everything now. There's going to be a potential nuclear war. And the old trader said, no, no, no, no, no. When the missiles are flying, you buy. Because guess what? If the missiles actually come and hit our shore, it's not going to matter what you own anyway because the market won't be open anymore.
But if the missiles don't come and you buy, you're going to look like a genius. And it does seem like that last week, your whole point was a binary outcome. It feels like that because, again, if these tariffs are implemented as he laid them out in that stupid sheet of paper that he's holding, if they're laid out like that, the market is going to be down 30%, 40%, 50%. And again, I don't say that lightly, but I really believe this. Yeah, so do I, for the record. Okay, so do you think – so I got –
I got a flashback to 2008 on Sunday night. So Thursday, down 5%. Friday, down 6%. When futures opened down 5% or 6% Sunday night, that reminded me of 2008. Because every time over the weekend, something really bad would happen, and futures would get slaughtered.
So I looked at this, the two days, in the two days, Thursday and Friday, the Dow was down 9%, S&P was down 11%, NASDAQ was down 11%, Amazon was down 13%, JP Morgan was down 15%, Nvidia down 15%, Apple was down 16%, and Boeing was down 19% in two days. It was pretty close to a Black Monday-ish for two days.
which is just nuts. Yeah, market did not like that. Joel Wiesenshaw said, this is the 11th worst three-day performance of all time. And if you look at this list, it's recessions, 1929, World War II, depression. It's the worst of the worst, essentially. This is a great looking chart from Luke Stein. I've never seen data displayed this way. We just finished the 10th worst week for the S&P 500, down 9%. 10th worst week,
Since 1940. You ever see it laid out this way? No, it would take me a really long time to learn how to do this on Excel. No idea. All right, so we got... Where do we go here? Let's start here. So wait, let me just lay out where I was at on Thursday and Friday. So Thursday, the day after...
Remember we were all watching the futures market because he did the announcement at 4 PM or whatever. And the futures market originally was okay. It was weird because we rallied pretty hard into liberation day. Yes. Because people are trading on rumors and who knows. And Thursday starts off and the stock market is slack. And then it keeps going down and down and down. And we flew out for spring break at like one 30. So I'm watching the markets, you know, on my phone all day, seeing what's going on, what are the announcements and I'm taking off for spring break. And then the next day,
Friday, we get into Florida. The next day, we had planned to go to a water park on Friday. We bought the tickets ahead of time. And I'm watching the market just melt down in real time. And the stock market goes down 6%. One of the worst days, I mean, since 2020, but one of the worst days of all time. What was, I don't know where it hid in the hierarchy, but probably one of the, what, 25 worst days of all time? Something like that? It was bad.
And, uh, so we go to a water park and, and I had fun at the water park all day with the kids and wrote a bunch of rides, you know, those water park, those water slides where you, you go down the water slides straight down. And at the very beginning, you feel like you come like six inches off the water slide. Like you're floating in midair. You were done with those before. Then you come down and you scream at the bottom and it just gives you a huge wedgie.
Right. We had what we had one of those slides and we did it a bunch. My kids loved it. And that's what the stock market felt like that day. But here's the thing that I realized me sitting in front of the computer screen was not going to make the sell off any better. Like I felt like I almost felt guilty that I wasn't sitting in front of my screen all day watching. But I also thought like, what what good would that do to sit and watch the stock market get hammered all day?
It's not like I had, I could put my hands in the steering wheel and control it any better. I couldn't make it go up. So not being in front of the screen and watching it, I, it was, it was actually a freeing feeling because there was nothing I could do. Right. And I, the whole thing, my whole thinking was life goes on. It does. Right. You can't let like a couple of bad days in the stock market throw you off from doing what you were doing anyway.
Although I'm sure you were in front of the screen all day. I was, I sure was. Um, are you trying to push it higher on your own? I was doing some buying. I'll get to that in a minute. Um, Bill Ackman tweeted, if you haven't noticed by now, I speak the truth regardless of the consequences to me personally or what other people think. Somebody responded, good job speaking out, but it seems like you should have foreseen the chaos. Your anger toward Dems clouded your judgment. In my opinion, Ackman tweeted back. I have no anger toward Dems, just disappointment. This is the part that I want to
I italicize and bold. I don't think this was foreseeable. I assumed economic rationality would be paramount. My bad.
And that's where I was. That's a lot of people, obviously. That's where I was. No one possibly could have assumed the president is going to crash the market like this on purpose. Especially the pro-business president. The guy who all he does in his first administration is tweet about the stock market and any down day in Biden's administration tweet about how Biden should be impeached because the Dow was down or whatever. So the analogy that I gave was there was a red button on his desk that said push to destroy the economy and he pushed it. I couldn't believe that he would do that. Yeah.
And so that is still where I'm at. I still think that this is a negotiation executed terribly. Tom Lee tweeted, or Tom Lee was on TV, saying, and credit to Tom for doing this, we got it wrong. We want to apologize as the terms of Tariff Liberation Day were far worse than we expected. The resulting market fury is not due to a reaction to a trade war, but rather the fact that the White House broke a core covenant of capitalism. So Tom Lee, owning up, myself, and Bill Ackman, I think it was representative of a lot of people on Wall Street felt.
By the way, I love that you just put yourself in with Tom Lee and Bill Ackman. Me, Tom, Bill. Here's the thing. There aren't enough rich people who will say, you know what, hand up, I was wrong. And I think a lot of people say, oh, thanks. A little too late for you, Ackman. I think that's what a lot of people think. But at least you're saying, and again, I think a lot of people should just say, I thought we were getting deregulation and lower taxes.
Right. I didn't sign up for this. Yeah, it's okay. Listen, wrong all the time. Publicly wrong. It happens. Yes. NBD. So I did write this in the doc and I had to delete a lot of the stuff that was in the doc because it aged so quickly, so poorly or so poorly, so quickly. One of the things that I wrote was this was, I guess over the weekend, I'm a little bit nervous that I wasn't nervous. Like I wasn't feeling any sort of panic whatsoever. Sunday night, I felt it. I felt the feelings of like, okay,
Okay. Sunday felt like the ship was going down a little bit. Yeah. Sunday night futures opened down, whatever. I don't know, 4%, 5% at its worst. We finished green on Monday. But what was interesting on Monday was Walter Bloomberg, who we've been talking about, but I think he made the joke. Is this a robot? Like literally is it? I'm pretty sure he's an AI. Walter Bloomberg at Delta One tweeted, has it, quote, Trump is considering a 90-day pause in tariffs. And we had the craziest intraday volatility ever.
I've ever personally seen in my career. It was up 7%. The NASDAQ was in like 20 minutes, then gave it all the way back. And then it finished up on the day. But I think the fact that the market isn't down a lot more and the fact that you get this sort of rally on any type of news reaffirms my position that if we do get a resolution that the market will scream higher. I don't know, man, we were down almost, we were down 20% in like, like that. You don't think that was scary enough? What do you mean?
You just said that the market isn't down more. The market went down very fast. If you look at a drawdown chart of the S&P, it looks like it fell off. Oh, yeah, yeah, yeah. Trunk fan, this is fantastic. You see this meme? It's Walter and Jesse from Breaking Bad sitting at the diner. And Jesse says, you follow Walter Bloomberg? Huh? Huh?
So there's this anonymous ex-account, Walter Bloomberg, Swiss dude, but his real name isn't Walter and he doesn't work for Bloomberg. Weird. He takes paywall financial news and pops it to 850,000 people on his feed. This morning, he said Trump was going to delay tariffs by 90 days. Markets ripped, added one to $2 trillion in minutes.
Turns out it was fake news. Markets dumped again. He misheard a CNBC Q&A with a White House official. Then CNBC published a story with him as a source, which he then sourced as his source. People wondering if he could do it again and trade on it. Would be insane. Anyway, Farcoin is up somehow 100% since Liberation Day. Walter says, Jesse, what the f**k are you talking about? Wait, Walter Bloomberg is from Switzerland? Okay. So, all right. A core tenant that I have when investing, and I can't help it,
I'm proud of it. It's what I do. I have to do. When the market crashes, when the market panics, I buy. I have to. When the markets were on, the markets are on 5% in a day. I was buying on Thursday and Friday. It's bad as it felt. I, I was too. And then those may be turned out to be way early. And it felt like it after the fact. Uh, cause again, I, I still think the prospect of like a 30% crash in total is, is still very much on the table. Agreed. But what else are you supposed to do? So, right.
So Pierce Crosby tweeted, US economic policy uncertainty index. And obviously spiked to basically highs on record. Then he shows S&P 500 returns a year after the spike. And not a perfect track record. 01, 08, we were down more a year later. But a lot of people, and I don't know if this has me nervous. Listen,
This muscle memory, it's going to take a while to unwind. Bank of America tweeted, I didn't tweet this, somebody else tweeted it. Client US equity inflows were the fourth largest in our data history since 2008. Balchun has tweeted, VOO took in $4 billion yesterday. We're recording this on Tuesday, by the way. Its biggest inflow in about three years. So people are, at least retailers buying. And we asked like, what would have to happen
for this to reverse, for the buy the dip, the every two weeks, for there to not be some sort of... And I don't know if it puts a floor underneath the market. I don't see how you could say that because we could still go a lot lower just to fight the people and the 401k. But Jeffrey Patak, we asked, well, what do people do in 2022? And there were outflows from mutual funds, as there always are. And the outflows from mutual funds exceeded the inflow into ETFs. But the VOs of the world, they bought them.
Yeah. So that's the thing. My whole plan, I was kind of laying it out in a blog post. Every week I buy stocks in my brokerage account. Every month I buy stocks in my SEP IRA. Every other week I buy stocks in my 401k. I'm not going to change that because of this. If anything, it makes me feel better making those purchases because stocks are lower. And
The thing is, if you're a young person, this is not going to feel like a blessing if we get a complete wipeout in a recession. We've said, you don't cheer for a recession. You don't want to play that game. Again, that's Russian roulette, where if you lose your job, who cares how low stock prices are or if home prices come down or if interest rates come down? But the fact that stock prices are 15%, 20% off their highs, and for individual stocks, in some cases, it's more like 40%, 50%, 60%. You know?
You still think of this as a good thing. And you don't try to overthink it. Okay. Here's the thing, though. Here's my worry is interest rates began to creep up again yesterday. That is a big problem. If we do get a spike in inflation and rates go up and the Fed says we can't cut rates, like this...
That's where this thing is not just like one or two announcements and everything's back to normal. This is where this turns into a multi-year kind of thing and trust is broken. And then we see a sideways bear market for three years. And that is the thing that breaks some people's backs. Totally possible. Sentiment Trader tweeted, the S&P 500 after the VIX hits a high of over 45 for the first time in a month.
I feel like you and I have switched roles here. Usually in the downturns, you're the one who's not panicking, but you're feeling bearish. I feel like we've switched roles where I've felt very bearish. And I'm not trying to take a victory up for last week, but what I felt, what I worried about was actually what happened. And I think it might have been worse than I thought. Yeah. So again, I'm a little bit nervous and I'm still not nervous. But when Vic's over 45, so basically this looks at panic.
And generally speaking, so two months later, it's higher 67% of the time. So certainly not always. Three months later, it's higher 83% of the time. Six months, 92%. 12 months, 82%. So those are the odds. This goes back to 1990. Those are the odds. Positive 82% of the time after a panic. Not 100%. There's no such thing as a certainty with investing. Subutrade tweeted, what happens to the S&P 500 after two consecutive days of negative 4% declines?
Which obviously doesn't happen very often. No, six months later, it was negative. So there's like N equals whatever, 11 here maybe. Positive later, 90% of the time, six months, 80% a year later. Look at those 1929 ones. It happened three consecutive weeks in the 1920s. So-
And this is not to make fun. We got a lot of people sending this to us. This has nothing to do with Matthew Shaughnessy, so I'm not dunking on somebody that's not a financial expert. I'm just, and I'm not dunking on the Wall Street Journal. People know that we like these stories. It's just funny that the Wall Street Journal does this. Whatever. Can't help it. Tickles my funny bone.
I'm just sending out as much cash as possible, said Matthew Shaughnessy, who runs an auto repair shop and pet spa in Idaho. If I try to catch his falling knife, I'm just going to get cut over and over and over on the way down. The 43-year-old said he holds his shares in Rivian and Roblox in the days he sold. I'm sorry. He sold the shares in Rivian and Roblox in the days leading to Trump's Rose Garden tariff announcement. He still owns shares of Novo Nordisk, and he has some $10,000 in cash in a brokerage account, Shaughnessy said. He doesn't plan to buy any more stocks until the market currently subsides.
I don't know why this is necessary. Again, no disrespect to Matthew Shaughnessy whatsoever. He's waiting for the dust to clear, right? Okay, so this morning, Trump tweeted, or he socialed, or I don't know what they're calling it. I just had a great call with the acting president of South Korea. We talked about their tremendous and unsustainable surplus. We are likewise dealing with many other countries. He says, China also wants to make a deal badly, but they don't know how to get it started. We are waiting for their call. It will happen. God bless the USA.
He's negotiating as far as, as far as I'm concerned. I hope so, because if he's not, then things are going to keep getting worse. All right. So, so, so is it, is it premature to buy? Should you wait for the dust to settle? Here's how I see things.
And why, and this is not blanket advice. You do what you want to do, right? There's not like, there are many different personality types. That's what you have to understand when you're listening to different people. My personality, my investing personality may be 180 degrees different than yours. It's fine. There are many different ways to do this. For me, for me, I buy panic because I know that if we get the bounce and roll over, then there will be a point in time where I'm too scared to buy.
So I'd rather like just buy before that point happens. Okay. I always buy too early as well. So, so here's, so here's, here's the thinking. You might be like, Michael, how dumb are you? You're buying stocks. We haven't even, we're day four. The tariffs, it's not even April 9th. What are you doing? You dumb bald asshole. Just, can you, can we just see how this shakes out? Here's the problem. The market doesn't wait.
The market, obviously the market didn't, the market didn't even wait it. I wonder how surprised they were in the White House to see the market just get completely slaughtered. And back to the thing of the stock market, not caring what you say, you can tell the stock market all you want, that these are going to be wonderful, beautiful policies. It does not care. So here's the thing to your point about being early in the stock market, moving way faster than ever before. We could see the stock market rallying in the face of a recession. Big time. 100%. Like we could, the recession might get here, but
six, 12 months, whenever it happens, if he keeps going down this road. Just think about 2020. Remember when we made all-time highs later in the year? And you're like, you're telling me that stock XYZ is better today than it was in 2019? How does that make any sense? And people, myself included, it didn't make any sense to me.
But that's how the market behaves. It bottoms way in advance of the things turning. So we have this chart from JP Morgan that I suspect will be shown for a long time. And it shows the course of it's from Semblance, the S and P 500 earnings, payrolls, GDP, the market on average bottoms five months before GDP troughs. So the news will continue to get worse and worse and worse. And the market will stop going down. You're gonna say, what? Why isn't the market going down? Cause it already went down. It already went down. Apple fell.
How much did Apple fall? 30%. NVIDIA was down 40% in like a couple of weeks. It already did it. So we have this great chart from ChartCode, Matt, Chartkin Matt, showing since 1957, all of the bear markets, and there was 11 of them, the stock market bottoms on average nine months before earnings bottom.
So on the one hand, I understand how it feels way premature because this shit could get way worse, but that doesn't mean that the markets could be like, all right, guys, come on in. We're all clear. We're just going to, we're just going to stop going down and we're going to late. We're going to let everybody back in. Everybody come back in before we rally. It doesn't work like that. Yeah. The stock market bottom in 2009 in March and the unemployment rate went up all the way through October till it finally peaked in October, which was whatever, seven months later, uh,
The thing is, the stock market moves so much faster than it did in all these periods, too. So this is looking at all these different periods in the 50s and 70s and 80s and even the early 2000s, the great financial crisis. The market moves way faster than it did back then. Yes. All right. Let's just talk about some economic data real quick because people are waiting for the hard data to fall off a cliff. And we got non-farm payrolls data last week, significantly better than expected.
Yeah, the market obviously didn't. Don't you think, though, that at this point you cut it off and whatever has just happened in the past six, 12 months for the economy, it doesn't matter anymore? I don't think it does.
I think you have to start new and we have to see what happens from here. This is, this is a total pivot point. A, this is a before and after. I agree. I do agree. I do agree. So while I, while I don't think that we're going to look back on 2025 as like a global inflection point before and after I could be wrong. I do agree that the data will, the data will continue to soften as a result of the lack of confidence. But what if we, what if we do look at this as a global inflection point? What does that mean? Then, then, then it's good. Then it's really bad.
For everyone or just for us? Because I don't know. How could the rest of the world do great if the largest consumer in the world is second wind? I don't see how that's possible. We are the global importer. It's true. That's the thing that concerns me, though. What if in a small way, things are just different? Come on. You think we're going to let that happen?
I sure, I sure hope not. Do you really think we're going to let that happen? I do think that if we, if we had a 40% stock market crash and the economy went into recession because of these idiotic policies, these people are going to be like rats in a sinking ship. Yeah, I do. I do agree with that, that I told eventually, I can't believe Congress hasn't stepped in to try to take these powers away from him yet. It's like, grandpa, give us the keys. You don't drive anymore. Ben, what you just mentioned, the way that you just said, like, that's generally how the market behaves.
The stock market, investors tend to expect the worst and the worst doesn't usually come to pass. Now, again, I could hear somebody saying, Michael, we're flat year over year. What are you talking about? This hasn't even started. I get it. I get it. Unemployment rate, still pretty low, creeping a little bit higher, but still low. All right. Anything else you have to say? That's what makes this so...
infuriating is that he inherited a pretty darn good economy with low inflation, low unemployment rate, and he's just going to blow it up for no good reason. That's the problem that I think so many finance people are just ripping their hair out right now. What are you doing? Why are you focusing on this? You focus on a hundred other different things. Why this? And again, this idea that it only, that this is going to only hurt rich people is so foolish.
It is so foolish. Yes. Guess who will be able to weather the storm? Rich people. They'll be fine. Okay. One thing on AI that I thought was kind of cool, and this is a plug for Exhibit A. So Michael Kitsis put Exhibit A on the Advisor Technology heat map, or I don't want to call it a heat map. And I uploaded this onto ChatGPT, and I said, put a red square around Exhibit A. And it did it.
But it changed like a lot of the images, which is weird. But back in the day, you would have to like use snip, maybe paste it to a spreadsheet, like hit the square button, remove the shading or the color. And it did it for you? Okay. Let's talk about crypto real quick. We haven't talked much about that. So it was very bizarre. I think you even sent me a message or me and Josh being like, crypto is holding up really, really well right now. And last week, as I was on Friday,
Yes, I think Friday, Bitcoin held up pretty good. It might have even risen a little bit as the stock market was crashing. It seemed weird. And then over the weekend, one of the Winklevoss twins said, look, Bitcoin is finally decoupling from risk assets. And almost to the minute after he tweeted that, crypto just completely crashed. But why was it for
For that one day, why was crypto still doing okay? I mean, there must have been some flow. I don't know. I have no idea. So this tweet from Punk9059 says, this chart looks at S&P 500 daily returns versus Bitcoin over the past 15 months. And he said pretty much every day the S&P was down 2%. Bitcoin was also in negative territory. So I don't know. I can't tell you why. It was an outlier. Certainly not holding up today. But then it played catch up over the weekend. Do you think that's why futures were down so much too? Because it was following crypto's lead?
I don't know. Okay. I mean, I think absent crypto futures would have still been done quite a bit. Anything else you have to say about the market? Listen, I'm, I'm not, I'm still not naive to the risks, right? Like if, if this is not a negotiation and the tariffs are the point, then, then low we go. I'll, I'll, I'll believe it when I say it. I am still a long-term optimist. And again, I think the stock market eventually will be just fine. My biggest worry is that there wasn't a huge margin of safety coming into this.
Yeah. In terms of them. I mean, they're the consumer balance sheets there is. So I think that the consumer is not going to get crushed right away by any means, but in terms of valuations for us stocks, there wasn't a huge margin of safety. That's the, I suppose that's the concern is that just the valuation premium, if that compresses along with the earnings, that's, that's the, okay, this isn't going to be very fun. We shall see. All right. I have some travel thoughts. Um,
Airplane first. This has happened to me the last two times I've flown. The rush the aisle people when you land because they either have – they want to get off the plane or because they think they have – and it's just like when you cut someone off in traffic to get in and you give them the wave. Like just say something. Just say, hey, I really have to catch my flight. But the people, they run up and then they pretend – they look ahead like you're not there. And I just want to be like – Nothing grinds my gears more than somebody who –
uh, cuts in front of you to like, as you're pulling into a red light, it's, it's the rudest. Yes. All I want is a, Hey, I really have to, do you mind if I just go real quick? Cause I really have to catch a flight or I have to get off the plane. Um, but the people that like, like run ahead four seats and then just get stuck. It's like, what are you doing? Literally you're going to make it off 60 seconds earlier. All right.
Cabanas are out of control. We got to put a stop to this. There's way too much cabana. So the first we got into town, we couldn't get in our house until Saturday. So we stayed in a hotel. And by the pool, there's all these cabanas. And then the next day we go to the water park. There's all these cabanas. You have to pay to rent them, obviously.
I know that there's some places that are these really, really nice cabanas and they have like TVs and air misters and stuff and you pay like $600 and it's really nice. But these are like, we're talking like Bed Bath and Beyond cabanas, you know, that all it is is shade and two lounge chairs and they're charging, I don't know, $150, $200 just to get some shade. It's too much. Why does that bother you? It seems like a weird nit to pick. When did we start charging people for shade in the sun?
Did we, when you were growing up, did they ever rent out cabanas? I feel like this is a new thing. It's just a new way to rip people off. Shade is a scarce resource. I just think these cabanas aren't even nice. Right. And then you look at them and most of the time they're all empty and just sitting there and no one's using them. Yeah. Well, the nice cabanas are really nice. And those are way more than $200. Yeah. They're really expensive.
I had a sentimental moment with my kids the other day. So I'm still the entertainment dad where I have to, hey, dad, you got to come in the pool with us. Hey, dad, you got to ride the bikes with us. My kids do stuff on their own sometimes. So they still want me to like be their entertainment. And I have to play games and throw balls. And sometimes I kind of like, can I just sit here and not do this? But I think I'm going to really miss it when it's gone. Like the day that they stop asking me to do stuff and not be the entertainment dad anymore, that's going to be painful. I'm already feeling it.
I was in the moment playing with my kid. You know, I throw the ball and they jump in and we play paddleboard or whatever. I'm really going to feel it when they don't want me to do that anymore. I'm the opposite. And I think I wish I was more like you in that sense. My kids are very self-sufficient in terms of like entertaining themselves. Sure. They want me to come in the pool and like the lazy room and stuff. And I do, but they are not reliant on me to entertain them. And I don't know that I'm going to miss that part of it. Maybe I'm wrong. Maybe I will. Time will tell. All right. Um,
So for some reason, the laptop, I'm doing this from an Airbnb in Marco Island, and the camera on my laptop for some reason has never worked. We've had the tech people on our team look at it, the production people. No one can figure out how to get the camera to work on my laptop. Where was your laptop made, China? Seriously. And it's never worked. I can't figure it out.
And I got down here and I realized yesterday, I don't have a camera to do the podcast. And I ordered a podcast or I ordered a camera on Amazon at 6 p.m. yesterday. It was here by 4 a.m. this morning. That is a benefit. Who says we don't have a good?
Right. Another one. A lot. I got a lot of emails about the Canadian geese. Holy moly. Did we get a lot of emails? A lot of them. My favorite ones were the fact that a lot of people call them Cobra chickens. That is a great nickname for Canadian geese. Yeah, that's good.
I like the co-op chickens. Did you see this, Ben? Somebody tweeted, you're hearing the first howl of a dire wolf in over 10,000 years back from extinction. I saw the story on the news this morning about it. Using ancient DNA from fossils up to 72,000 years old, Colossal reconstructed a full genome through precise CRISPR edits and brought the species to life. Holy moly, that's kind of neat. They interviewed the scientist and she's like, this isn't Jurassic Park. And she kind of gave a nervous laugh. It's like, this is Jurassic Park. What are you talking about? Yeah. So these are giant wolves? What are we going to do with them?
It's like the big wolf on Game of Thrones. They're going to protect blind kids. Quick plug for Future Proof Leaders Retreat, May 12th through May 15th at the Broadmoor in Colorado Springs. The Broadmoor is a gorgeous hotel. There will be no booths, no overcrowded panels or anything like that.
These are wealth management CEOs, CIOs, CTOs, COOs, CMOs, industry executives from asset management, fintech, financial services. One of the great things about this event, in contrast with all the others, is it's much smaller and more intimate. I think last year there was
Not I think. I know there was less than 1,000 people there. I don't want to give an exact number because I'm not quite sure. But the experience as an attendee last year was different in the sense that it was much more intimate. And there's a lot of people that came that the feedback I got, and I totally get this, was, listen, I wanted to hang out with you guys. I didn't want to be one of 4,000 people. So sign up May 12th, May 15th, Colorado Springs. People love those one-on-one meetings too. Yeah, they do. People get a lot out of those. It's nice.
All right. Recommendations, Ben, what do you got? All right. Um, so I told you my daughter and I are going through the list of his, of good classic sports movies. And we watched Hoosiers before, which you said was underrated, which are overrated, which I hope you were lying about. Um, so we watched your favorite of all time field of dreams, which is nice because they have Netflix and hotel rooms now.
And I don't know, I hadn't seen this movie in 25 years probably. And there's no better way to describe it than it's just a magical movie. The whole time I just had a big smile on my face. It's perfect. And at the end, I totally lost it because he's playing catch with his dad and his dad's name is John. And so I lost it. My daughter's like, why are you crying? Just leave me alone. But there's the part where him and James Earl Jones go to the Red Sox game and they get two beers and two hot dogs at Fenway. And this is 1986 or something when this movie came out, maybe 87, something like that.
How much did two beers and two hot dogs cost at Fenway back then? Two beers and two hot dogs? $9? $7. That stood out to me. What would that be today? $50? Maybe? Yeah. We've been watching 1923 again lately, season two. I think we have one episode left. Wait a minute. I thought it just started. No, it's all out. I thought that I would be done after one season, and it took me a while to get back into it, but it's still a good show. And
There are some things that happen in the show, like the foreshadowing is like they couldn't be winking at you harder. Like there's this part where she gets over on a boat from Africa and she gets off and she's in the Grand Central Terminal in New York and five people tell her like, be careful. There's a lot of pickpockets around here. And it's like, be careful. Someone's going to see your stuff. And then, of course, someone pickpockets her and steals all her stuff.
But it's still, it's, I'm surprised at how much I still like it. It's like a fun background show, right? Yes. It's, it's still pretty good. Let's, let's save white Lotus for the end. Cause we'll do some spoilers. So why don't you go? Okay. Um, I rewatched, I did some Val Kilmer stuff this week, by the way, I, maybe I, I don't know if it's weird. Like you just, you don't appreciate these people until they're gone. Unfortunately, that's just reality of life. He was one of my favorite childhood actors and I didn't really, I don't know that I would have listened to him as one of them.
But Willow was my first favorite movie ever. I loved Willow too. I made my kids watch that one. Some ones that I hadn't seen, but I re-watched Heat. I haven't re-watched Heat in a while. I re-watched that one every two or three years probably. They should do a release in IMAX because to see that on a giant screen with the machine guns. Plus the Dolby speakers for all the sound. Close to a perfect movie as you get. You agree? Yeah.
Yes. It's the best Heist movie ever made, obviously. Why is The Pit only on Max? I didn't even realize until I went to watch it live on whatever night it was out. And Rob said, no, you have to go to Max. I didn't know that either. I guess I just watch everything on Max now. Weird though, right? It is weird. All right. So I love the studio. I will make no apologies. I love the third episode. I love the second episode. I understand some of the criticisms of why it's too much like Curb. I don't care. I love it.
You're taking a little bit of a contrarian stance here. I don't think so. The consensus that I've seen has been wonderful. Okay. My only problem is I think it's a little too over the top. It needs to be a little subtler. That's my only note. I love it. But it's great to see all those Hollywood people in one place. Wait. Oh, yeah. Go ahead. I'm sorry. I'm done. All right. White Lotus. I watched the season finale. Okay.
So spoilers, if anyone wants to turn it off, they haven't watched it yet. I can't believe Tim Ratliff tried to kill his family with pina coladas. I told my family, listen, I have respect. If I ever try to kill you and we're all going to drink the Kool-Aid together, we're going to do Miami Vices. Okay? Right? Is that fair?
I thought it was pretty good. It's the worst season so far, but it still was high quality and really well done, and I still liked it. Agreed. Worst season of the three. Excellent seasons, but I still had a great time. And I was happy with the episode. A lot of nits to pick, but landing the plane on these shows is very difficult, and I had fun. No complaints. Yes. The shootout and the...
He always kind of surprises you with the fact that the women friends went back and they were all still friends together. And I didn't expect that. So I enjoyed it. I'm ready for another season. I know a lot of people are pushing back saying they didn't like this season. I still enjoy myself. Keep coming. All right, Ben, in conclusion, these are scary times. We're recording this at 1 p.m. or so on Tuesday. Scary times provide opportunities. I'm sorry. That is a core tenet of my investing beliefs.
Not saying that this is the bottom or that the risk that you take will be rewarded tomorrow might get more painful. But I still believe this is the best way to build in wealth. And I don't think that there is anything that could change my mind. I know that there are crashes. We've been there, we've done that. I know that's part of the game. This is why there's a risk premium, though. The fact that the stock market could fall 20% in the blink of an eye like that, that's the reason that you get the long-term results.
premium because of the risk there. I also, this is one of the things that just, I will never back down on the having a automating good decisions ahead of time is so important because that, that was the other thing that made me feel okay to go on spring break, even though the market is falling apart around me, I've already made the good decisions ahead of time for not knowing that it'll happen like this, but knowing that the market could fall out of bed like this. Ben in a hundred years from now, do you think you're going to be upset? You added to stocks this week? I don't know. I mean, by that point, I'll probably be like a, a, you know,
I'll just exist in the computer, right? But in 100 years, my great-grandkids will thank me. The S&P is trading at six times 2134 earnings. So pretty optimistic about that one. At this time next week, are stocks higher or lower than they are today? Not that we're short-term, but either we're down another 10% or we're screaming back 5% or 7% higher, I think. I'd say higher, but sorry if I'm wrong.
All right. Your handicapping skills haven't been that great the last couple weeks, but hey, keep trying. Hey, shoot or shoot. All right. AnimalSpirits at TheCompoundNews.com. Thank you to everybody for the emails. We'd love to see it. Stay staying out there. Hey, listen. See you next week. This is like scary times, but it's still – if you can take a step back, it's still just fascinating to see that this kind of stuff can happen in markets still.
right if you get rid of the losses and all the potential ramifications the fact that this can happen in markets is one of the reasons that i think that it's the greatest game that there is see you next time