Everyone Hates AI (EP. 453)

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Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, I talked to you yesterday. You were feeling a little uh a little down i think is that fair to say not down just okay the ai doom is reached escape velocity and it's now a daily daily weekly occurrence where you have one of these big pieces that paints the doom and as a glass half full guy uh i like the other side of these but i don't mind the ai doom porn i think it's good to go through these scenarios i don't necessarily agree with them, but I think it's probably healthy for people to think through what the potentially bad ramifications could be on these things. I appreciated the craft and the effort behind the post. I thought it was incredibly well done. It comes from a Cetrini research, and this person is not a bare pornographer. This is a legitimate research person. They are not one of these people that has been saying the world is going to end the last 10 years. So I think that context is important. We'll get into some of what was said. The part that bummed me out the most is let's say that, I don't know, 30% of it comes true. Who the hell knows how to handicap this? The thing that I was thinking about where my head went was there are people in and around our lives, everybody listening, who are going to be impacted in a material way and they don't know it yet. And I can see this coming where there will be people that get laid off from a very nice white collar salary that won't be able to replace it. And they're first, they're going to miss a vacation and then they're going to miss this. And then their kids won't be going to camp and then they're going to have to move. and that is going to happen all across the country and the human element of it um breaks my heart a little bit all right maybe we don't know yet we're we still don't know how this is going to play out this is to me this is all science fiction still okay none of this stuff has happened yet the unemployment rate is at 4.3 come on yeah but but but isn't there but isn't there an inevitability feeling that you had reading this. Well, listen, here's my take. Even if it doesn't lead to 10% unemployment, I mean, it's not a stretch. Like, it's not, the thing that bummed me out about it. But Michael, the bearish arguments always sound more plausible. Always sound more plausible. Yeah. Always. I agree. This stuff is more plausible than a lot of the other stuff that technology people have been telling us is going to happen in the last five to seven years. But a lot of the stuff they've told us hasn't happened. That's true. So for me, this feels personally different from every other stock market linked event. And it is wild that what this piece did to the stock market, which is already very fragile on thin ice, what it did to Capital One and American Express merely by mentioning what would happen with stable coins. And this piece went mega, mega, mega viral. It actually did move the market. No, it really did. But I feel like for the tariff tantrum, like I think there was a – I was able to look past it a little bit because it wasn't – yes, I guess the global world order was changing. But like it was very easy to see that maybe not in real time. Like it was hyperbole that he was going to be able to walk some of these things back and not just the tariff tantrum but every like market-related sell-off. when in the spring of 2022 when netflix got bombed out i know that's like a very you know it's a netflix issue specifically because they had business issues right like they lost subscribers and they were able to figure it out eventually this is just so much bigger than all of that and it does seem like there's an inevitability of some of this happening even if even if it's overblown all right i all right i'm gonna i'm gonna paint it with a with a much brighter brush than you are. So it starts out saying that in 2028, the unemployment rate is 10% and the market is down 40%. And the reason for this is because AI leads to white collar job loss. That leads to demand slowing because who's going to spend money if a bunch of people are losing jobs? And that in turn impacts the economy. That's the TLDR of this piece, right? Even though it was a lot longer than this. And it went through specific examples. And it's basically saying like, listen, And AI exceeded all expectations. It's just the economy wasn't ready. It says the AI capabilities improved. Companies needed fewer workers. Weight color layoffs increased. Displaced workers spent less. Margin pressure pushed firms to invest more in AI. And AI capabilities improved. And it was a negative feedback loop. That's what it's saying happened. And then it's also saying, you know, this is going to impact the mortgage market because people aren't going to be good on their loans. And that was the cascading like, oh, no, here's the doom. Okay? I get it. Hold on. Before the other side. There was two things in particular that like, oh, and I'm generally always in the same mood. I'm not a moody person. I don't have a temper. I never yell in my house except for when my kids are getting me upset. Like I'm a very sort of down the – I don't wake up on the wrong side of the bed. But this definitely changed my mood. Financial advice, tax prep, routine legal work, any category where the service provider's value disruption was ultimately, quote, I will navigate complexity that you find tedious, end quote, was disrupted as the agents found nothing tedious. And here was the coup de grace in terms of like putting my head in my hands. We had overestimated the value of human relationships. Turns out that a lot of what people called relationships was simply friction with a friendly face. And that is some real talk. I absolutely don't agree with that at all. I think that's the most wrong thing in the whole article. Oh, I got it. Over to you. Make me feel better. There are so many things we could do right now without human relations that we choose to do. So the big one that they talked about was real estate. Like, hey, listen, agents are going to be able to comb through everything. Listen, real estate has already been disrupted by the internet. You can go on Zillow and find anything and everything you want about a house, how much it sold for in the past, all the different rooms, what people have said about it. You couldn't do that in the past. You literally had to go to a house. and realtors still exist because people like working with humans to make these transactions possible you don't need a human to buy a house right now because all the information is there for you to see it already happened and we still require humans think about all the things that we could have done this with and we didn't okay so i think that this is just making a huge leap this is like this is like saying everyone in the world is going to act like an economics one-on-one textbook everything is going to fall supply demand you're going to look out just for yourself and that's just not the way the world works. The biggest thing that they said that like is going to be disrupted is network effects. There's going to be no more network effects because these agents will find everything and I just don't really agree with that. I think network effects are still going to be very important because you look to see what other people are doing to do stuff that makes sense to you. You don't do it just because this is the absolute right decision. There's jealousy and envy and what does the Cialdini call it? You look to see what other people are going to do and then you do it yourself. Like that stuff still exists, the human element. Like there's no way you can take away the human nature out of this. That's a part of the piece I absolutely say, throw that in the garbage. That is not how the real world works. All right, more practically, Gavin Baker tweeted, and Gavin is all over the stuff. He's an analyst, he's a PM. Love the Cetrini piece, thought piece. However, it seems unlikely we will have enough compute for the scenario in 2028 or even the early 2030s. distillation quantization and edge ai cannot bridge the gap agi is an event horizon with a significant compute dependence so i said oh enough said i feel much better now and then i saw jake's tweet uh economic said the ai will create new jobs we haven't thought of argument falls apart the moment you assume ai will probably be better at those jobs too but here's here's the thing though the i thought the best pushback was this stuff costs money like running these agents is very expensive. You can't just say, I'm going to have AI run these agents for me all day and all night, and they're going to find the best of whatever's out there, and they're going to do it all for me. It costs money. It's going to be cost prohibitive. And then guess what? Other companies are going to say, you're going to have to go through 50 different steps, and you're going to be running your agents so hard, and you're going to spend so much money to do this stuff. It's not going to be worth it anymore. You don't think that there's going to be hurdles and place to stop this stuff? Of course, of course, of course. So, all right. On the one hand, I definitely feel bummed out, and I'm not going to say that I feel a lot better this morning. Like I'm still pretty uneasy about everything. And there are people who I saw people like, did this only just occur to you? Like, why are people? It is weird that we've been feel like we've been talking about this for two years now. Like what I could do to people. Yeah. You know what? I guess this was just so well done. It just seemed like, yeah, this could happen again. There was a million different industries that he got into quickly that I don't know if I'm gullible. I'm sure I am. To a great story, right? Morgan always says best story wins. This is a really well done story. And I don't know enough about each of the industries to say, oh, no, that can't happen with these agents with DoorDash or whatever. Can I give a market explanation of this, though? This is back to the Keynes Beauty Contest. This is kind of like how what happened with crypto and what happened with meme stocks is that investors are trying to think about what other investors are going to do next. What are people going to think the next meme stock is? And so they think, listen, everyone thinks software is going to be disrupted. What companies do they think are going to be disrupted next? And let's sell those. And I think that's where a lot of this is, is just getting ahead of it. So I thought Ben Thompson had a really good piece this morning. He said, basically, the view in this article and from all the anti-monopolists is grounded in a fundamental lack of belief in dynamism, human choice, and markets. DoorDash didn't always exist because DoorDash was one of the big things he took down. He said, hey, listen, there's going to be a million apps being created, and they're going to create their own DoorDash. DoorDash ceases to exist. So he said, DoorDash was built and it wins through affirmative choice of all three sides of the market it serves, customers, restaurants, and drivers. Does the company have varying degrees of power over different sides of that market based on its dominance of other sides? Absolutely. But that power flows from delivering value, not from extracting it. And that's the whole point is that these companies exist not just because we use them because they make us use them and we're forced to. The human element here cannot be taken out of this. Yeah. Okay. So that part I totally agree with. and also for as not great as I'm feeling, which I hope will pass, I also think that the market overreaction is stupid. So American Express and Capital One falling 8% yesterday. Now on the one hand, I am a big efficient markets guy. I really am. Not in the sense that the price is always right at every time and not that the market can't get drunk, which I think the market is more drunk than sober right now. I do think there's information in American Express and Capital One falling 8% of the day, but I also think it's an overreaction if I'm trying to, like, thread that needle. So I am going to buy Microsoft today. I am running into the fire. That's the only thing I know how to do when I'm scared. Maybe I'm early. I'm sure I am. It's okay. You're like an octopus lately catching falling knives. You got tentacles everywhere catching knives all over the place. Daniel, make Michael an octopus for me, please. I know this is – I've said a million times why this is a bad strategy, and please, this is not investment advice. I'm not trying to make you feel better. I'm trying to make you feel better. I feel like you've taken over my mantle here of being the person who's trying to catch the – Listen, here's a good thing about investing in a brokerage account. You either make money or you make tax losses. Either way, you win. See? That's Michael Math. So these are the stocks that I'm – these are the knives I'm catching. I bought Blackstone on Friday. I'm already down 7%, lol. Wait, wait. We'll get into that later, but all the private market stuff is getting slaughtered because that was part of it too. Private credit is going to get killed in this. Anyway, keep going. So Blackstone is in a 43% drawdown. Yeah, I'm comfortable holding this stock. I understand. So here's the thing. Oh, these names are risky. No shit. This stock is down 43%. Software just had its worst month since October 2008. Don't tell me it's risky. I know. The market knows. Instead of buying the individual names, why wouldn't you just buy IGV? You think there's more money to be? Because I'm buying – I bought Salesforce and ServiceNow. These stocks are both down, and I'm down 7% on each of these names, by the way. Just full transparency there. I want nothing to do with these stocks. Fair. Nothing. Listen, maybe I change my mind next week and say, yeah, I sold it for a 10% loss. ServiceNow is down 57%. Salesforce is down 52%. Um, those I am definitely not getting married to, but like Netflix, I'm not selling Netflix. I bought Netflix last week. I'm not selling Netflix. I don't care what happens. Um, I sold, I sold it a couple of weeks ago. Okay. I feel like we've, we've changed spots here. That's okay. Listen, I'm changing my mind every, every other day. S&P global, not scared. I bought CrowdStrike yesterday. This seems like a really, really, really, really stupid overreaction. Like you're going to, companies are going to claw it away, clawed code away their cybersecurity. Get the f*** out of here. Um, and I bought Schwab. That never makes sense. And I'm buying Microsoft at the open. If AI is so powerful, I think Microsoft is a buy down 30-something percent. It is kind of funny. You can't have these two competing ideas that AI is going to kill the technology industry, but it's also going to be so powerful. So these tech companies have to be part of this. Let's also say that right now, yeah, the market looks abominable. There's no evidence. So this is what I'm going against. Well, no, the market looks fine. These stocks look abominable. The market is 2% from highs. I've always said to people, and this is maybe not watch what they say, watch what they do. I don't know. I'm being a hypocrite. Wait for any evidence that there's a bottom. Wait for a higher low. Wait for the sellers to dry up. The sellers have not dried up. They've got all the ammo. I don't care. I'm running to the fire. Here's one thing that I might think. The sellers are David Goggins running an ultramarathon. Here's what I take comfort in. There you go. um it's not it's not hard to imagine us laughing about this in six months at all think about how fast sentiment changes i think and i think when we get to 2028 they're gonna look back at this piece and go why did people believe that i totally wholeheartedly believe that in 2028 people are gonna look back and go oh my gosh how could we be of course of course think about how fast narratives changed last year and over the last couple of years this can it seems really hard that this is all of a sudden going to dry up because this this this fear that has that is spreading rapidly it's it's it's covid it's a virus and we're not gonna we're not gonna get vaccinated um and all of a sudden like or or a magic wand bing forget about it so that's the part that's like it is hard to foresee this changing or stopping at a time but things change Now it has changed. There was a story flying around Twitter yesterday of someone from Meta who put an agent to work and it went through and deleted all of her emails. Even she said, don't do it. There's going to be a story where someone's going to be using this software, they're using cloud or whatever, and it's going to make a mistake. And everyone's going to go, oh, it made a huge mistake. I feel way safer in these software stocks now. That's the kind of thing where AI is going to have a mistake because, of course, it's not perfect. I want to talk about one more thing with this article. He talked about how the real estate market is going to get hammered, right? But I actually think that real estate is the best AI hedge that there is. I think the physical world becomes way more important in a digital environment, in a digital world that we're moving into. And I think especially if you really believe in the AI case, that it's going to be deflationary. Rates are going to fall. Guess what? The government's going to have to print more money. That's the other thing that this piece didn't mention is the fact that there's going to be a fiscal response and a political response. I think in that scenario I think housing prices are going to be one of the strongest Hedges against AI that there is Because we're obviously not building more of it I thought, anyway What he said, which was like What happens when the top of the K Gets busted And we start seeing mass unemployment And the mortgages are no good Yeah, that to me was a stretch Whatever, listen, it was a good piece Really well done, obviously For your worry about all the white-collar workers getting out of jobs So he mentions tax client taxes lawyers. There's going to be when lawyers don't have to hire paralegals to do all this grunt work and they don't have to be reading all the time. Guess what? There's going to be there's going to be a million more lawsuits. There's going to be a million more people that you can do taxes for. There's going to be more financial advisory clients. There's going to be more medical testing. Think about if you can use an AI chat bot for customer service. Think about how many more complaints there are going to be. And someone's going to have to take go up, run up the poll and then take care of those complaints. okay there's gonna be more media there's gonna be more work to be done we're not gonna be laying laying on a hammock doing nothing people are doing more work with this i completely agree with you on that front i completely agree no hedge think about what by the way you know what's funny open eye ain't shit nobody was worried about chad gpt up the labor market at all you're right Not at all. Anthropic is the one that did it. Thanks a lot, Anthropic. Everything was hunky People were laughing at Sam Altman This thing gets everything wrong Don worry about it Here the thing though And then comes Daria So last week we talked about how like is AI a mistake and people are going to hate it And the media picked up on that narrative really big this week. So Time had this article. But wait, hold on. Just before we shift up to this point of it, I just want to stick with the productivity, the work piece of it. Okay. Think about how much better you're getting at the work that you do as a result of having access to these tools. I feel it. I feel like every time I open these things up and I type something in and I'm talking to it, I feel like I'm getting so much smarter, so much more effective at being able to communicate and understand. But is it making you work less? Are you working any less because of this? Exactly. Same for me. I'm working more. I'm doing more stuff because of AI. I'm not working less. Right. So that's the part of it that gives me hope and excitement. And again, I'm not saying it's all doom. I'm just saying that some of the stuff like the stuff I said at the top of the show about people that we know that are going to be made obsolete, like that's that's it's it is fair to think that the transition is going to be bumpy. It's just it's kind of crazy that something like DoorDash and Uber were created and now we have three million people doing these jobs. and then you look ahead and you go, oh my gosh, autonomous vehicles are coming. What are those two or three million people going to do? But what did they do before? That's the thing is like how dynamic this economy, but you're right. I totally agree with you that the transition period for millions of people is going to be very painful. And I don't think anyone wants to look at them here and go, that's me. Even a lot of, I think a lot of tech people right now are doing that. Anyway, thinking through all this doom porn though, this is why everyone hates AI. Sorry, I will let you get to this piece. But that's also what is putting – that is also why the stock market feels so bummery right now. We'll get to the overall stock market, how well different parts of it are doing. But that's what can shift like the – what would stop the buy the dip mentality. It's like, well, if I'm like sort of anxious about my job, I'm probably not psyched to put money to risk that I might need. Yes, right. Yeah, people – if it changes people's appetite for risk. And we've kind of wondered, like, boy, it seems like this risk on attitude for this decade has just been unstoppable. What could stop it? And maybe AI is that thing. You're right. Unreal. Okay, get to this cover. All right. I totally understand why people hate AI. We sort of planted the seed last week. Time did this thing about the people versus AI. It's called, like, the growing backlash. The New York Times had a piece called People Loved the Dotcom Boom. The AI boom, not so much. And they interviewed this guy who's a co-author of Boom Bus. He said, I can't remember a boom with such active hostility to it. People used to find new technology exciting. It happened with electricity, bicycles, motor cars. There were fears, but also hopes. AI is notable, perhaps unique for the lack of enthusiasm. Because, duh, hey, do you want a CapEx bubble or a bunch of job loss? Which one do you want? No one wants either of those things because that's what's being presented to us. And I think the tech people have done a horrible job of telling people why they should want this technology. I think the tech people and Blue Owl shared the same PR manager. Right? Sam Altman needs a new payout. And he's not the guy to lead this because he was telling people, listen, yeah, it takes a lot of energy to run AI, but it takes 20 years of life and food before someone gets smart enough to work at a job. This guy, he is not the person to do this. And so the thing we're learning is that tech people, obviously, their intrapersonal skills are not very good. And that's one of the reasons why I think that they're overlooking the fact that the human element of this, because they're not good at being humans. No offense. They're not good at the emotional side. They don't have they have IQ. They don't have EQ. There's a lack of deficiency of EQ among the tech leaders, and they don't understand that part of it. And they just assume everyone is going to be a robot. And that's not going to happen. But I don't I totally understand why people hate AI because the way that they're presented is, listen, you you don't even know what's coming. Just wait. You have no control over this. There's no stopping it. Job loss. And it's like, why would I want this? So my question is, what's the political backlash going to be? We're going to get if this all this stuff comes fruition, we're going to have a socialist president in three years. Jamie Dimon was talking yesterday at an investor event, and he was saying, like, for people running companies. If you can eliminate one hundred fifty thousand dollar jobs and replace them with twenty thousand dollar line item expenses, like we sure we want to be doing that as business leaders like that. Yes. Good for society. And I hope more CEOs are thinking like that. You're right, Jamie Dimon probably could snap his fingers and replace a lot of the people at J.P. Morgan with AI. But politically, how does that work for him? Financials are a regulated institution. Is the government going to look kindly if you just all of a sudden let go of 25% of your labor force? No way. So there's going to be other human elements to this, these decisions, like career risk. Right? Do we trust government to step in and make good decisions here? That's the problem Because I think a lot of people think Well listen, in 2020 we learned The fiscal response when something like this happens We throw a bunch of money at it and the economy is fine So if this happens with AI, we'll throw a bunch of money at it But yeah, you're right, I don't have faith that the government Is going to thread this needle I think they'd probably wait for a crisis first And then do something That's my worry Here's another interesting thing Somebody tweeted We sort of hit on this last week James Wong said I've followed tech for 25 years and I've never felt a larger gap between the million people using Codex Claude and the rest of humanity. And it's like, are they gaslighting us? You know what I mean? Like, are we just believing? Or is the rest of the society just like walking dead and they don't even know it yet? I'm sure it's not either or. It's probably somewhere in the middle, hopefully. But don't you think it's possible in the future that people are just going to be using these tools and they don't know it? It's going to be part of their life. And it's like, oh, that's easy. But they're not going to like celebrate it every day. It's just going to be slowly ingrained into our lives. I don't think the tech people still want it to be like, boom, this day. It's like B.C. and A.D., right? I don't think it's going to be like that. Maybe there's a maybe there's a prediction market for this. Will unemployment be over? 10% in the next five years. Oof. I would need a caveat there because it's like, is AI going to cause a massive recession? Well, yeah, obviously that's it. Will unemployment be over 10%? No, but I think some people think that there's going to be a, you're going to get this, this unemployment in this, at the same time the economy is booming. That's what the AI people are trying to tell us. Productivity is going to go through the roof. You're going to get huge unemployment. all right that's separate that's part that's part two will unemployment hit 10 or higher in the next five years i i would say i would say no i mean you're gonna need some pretty juicy odds to to make me better not that i would bet on that but right you say no i said no i'll stop the stock market so last week i said you know what i'm still i'm still bullish like the the macro back sorry i'm gonna backtrack one more time so you said like you're walking around i like try to talk to my wife about this occasionally and you're right there's a lot of there's what percentage of the population just isn't paying any attention to this 80 no more most people have yeah like most people that just aren't online that just live a normal life why would they be paying attention and the other thing i think a lot of people assume twitter is like this dead place but twitter is the reason all this stuff has blown up in the last month if twitter didn't exist this stuff doesn't blow up as much as it used to it so twitter is still like a market moving mechanism for even for warts and all. I feel like they try to change something to make me hate it more all the time. The way videos play now is way worse. The way you read stuff and links is way worse, but they keep trying to make it worse on purpose, I feel like, and they can't make it go away though. Anyway, let's talk about the stock market. Okay. So last week I said, I think this is healthy. Rebuilding the wall of RE is a good thing. You need that. I love that the stock market is that that stocks are outperforming the stock market, like 65% are outperforming the index highest on record or something like that. That's a crazy – highest in the last 50 years from Ned Davis, 66% of index constituents are outperforming the S&P itself, which is nuts. Yeah. Especially since you hear about all these stocks crashing. You would never think that. I do love that, and I'm not going to change my tune there. And the macro backdrop is still good, like inflation, okay, consumer spending. See, this is what's funny to me about your strategy. Instead of doubling down and buying these areas of the market that are going up, you're trying to buy the ones that are going down. Usually a momentum trader would say, no, no, no, I'm going to buy staples and industrials materials. Okay. We haven't spoken about this, and maybe we will at some point, but we have a strategy internally that I put a lot of my money into the momentum strategy. Me too because I would rather have an algorithm or rules pick my stocks than me. That's why I decided to – you know what I did? You said you were going to do this. I sold all my individual stocks like three weeks ago, and all I have is this one rules-based strategy. So I told Ben I'm done picking individual stocks. I'm just going to – when I want to buy stocks, I'm just going to put it back into whatever strategies we run internally, one of them being a momentum one. And I meant it. I did meet it. And then sometimes opportunity strikes. I didn't think that CrowdStrike was going to fall 15% to two sessions. I meant what I said three weeks ago, and then the world changed. All right. So getting back to like the backdrop, like everything fine, like earnings, revenue, top line growth, multi-year high, things are good. The thing that worries me, there's two things. One is the rotation, the hard rotation into risk-off names out of discretionary and not just the cap weight but the equal weight basket into staples. That worries me, seriously. So this is more like a late cycle kind of stuff, right? Late cycle behavior. Just – if the Mag 7 keeps getting killed, like the market can only take so much. So right now Microsoft is down 30%. Apple is fine. Meta is not doing great. Amazon is not doing great. Google is fine. NVIDIA reports later this week. Like I feel like the Mag 7 as a group can't fall 20% without bringing the market down. Don't you feel like we're at the point where everyone kind of assumes we deserve to be in a correction right now? Like it should be worse. It should be worse than this. Why isn't it? I think that's what the – But why should it be worse? I just said that revenue growth is at an all-time – revenue growth is accelerating. The market is forward-looking. In 2028, this market is going to be on 38%, remember? Right. So might as well get to getting there now. Yeah. But you know what? But for all of the anxiety that I'm feeling, and I'm sure I'm not alone. Listen, imagine people that like – what if you're a Salesforce employee? What if – there's a lot of people probably listening that work inside these companies. It's like, Michael, shut up, asshole. Oh, you're down 6% in Salesforce. This is like my life. Yes. If your retirement plan was all based on I'm going to get shares in these companies and now my shares are down 60%. It's devastating. Yes. Yes. I totally get it. But here's the thing. If we do get an AI-induced sell-off, if people start extrapolating and, oh, my gosh, if this technology is as great as they think it is, I think it's going to be a wonderful buying opportunity. I think every bear market is a wonderful buying opportunity. But I think that if you get a tech-induced innovation sell-off, and as we sort of slowly but surely integrate this into our society, I think that's a fantastic buying opportunity. How about this? You heard it here first. All right. But if you've ever said buy when there's blood in the streets, if you've ever used that quote and you're selling here, you're a clown. I'm not saying you have to buy. But if you are selling right now, you don't get to quote Warren Buffett ever again. Fair? Okay. So the MAG 7 is in an 11% drawdown. The equal weight index – let's use the cap weight actually just for apples for apples. the cap weight is down two percent unbelievable so i'm not suggesting that the mag 7 which is what 35 to 40 of the index i'm not suggesting that 35 is bigger than 65 but i'm just saying if the mag 7 falls 15 forget about it weighing mathematically on the market i'm saying the psychology of the market is going to shift i agree it seems like there's only so long that these stocks can crash without people saying, okay, now I got to sell something else. Exactly. That's my take. So if a lot of ifs, a lot of ifs. You know what I'm doing? Every month I buy stocks in my IRA. Every paycheck, every twice a month, I buy my 401k. Twice a month, I put in my brokerage account. Once a month, I put in my kids' 529 plan. And AI is not going to cause me to change that, ever. Yet. Of course. No, of course. Listen, auto buys for the win. Hey, if you really think AI is going to be this disruptive, invest in the stock market. Okay? If profit margins are going through the roof and profits, like, the stock market is going to be the savior in the future. Okay? I totally disagree with the fact that this is going to cause a stock market collapse. That makes no sense to me at all. Keep going. Okay. Oh, this is a good one. All right. for financial advisors we built a platform called exhibit a we've spoken about a million times we do these charts of the week different charts upload your logo your call scheme blah blah blah i'm gonna be doing i'm we're working on something i'm gonna be doing some more commentary there yeah well we'll tease that later yeah um all right there's a great chart that chart go created that shows the number of 1% up and 1% down days by decade. And the average is 507. We are halfway through the 2020s, and we're basically right at the average. Are we going to break the record? This shouldn't happen. The thing is, this shouldn't happen in a bull market. This should happen in a crappy market. right? Right. This is, this is, it's all weird. Yes. Anyway, um, things are just happening way faster these days. The repricing. So there was really, everything is like pretty much in line with like, they all cluster in a pretty tight range as you would expect, like market, like normal markets. The 20, the two thousands was through the roof, right? Yeah. The dot-com bubble and the GFC. So that was eight 40, but we're on pace to smash that, which is kind of nuts. Yeah. It's been a crazy decade. It's only going to be crazier. Yeah. These overreactions aren't going to just die down all of a sudden. You know what? Right? Could I put in some hedge and trades? All right. I'm buying Microsoft right now. So Microsoft, I'm looking at the Mag 7, is down 21% on the year so far. Oh, it's what, down 30% from its high? Yeah. So three of the MAG7 are down double digits this year. That's Tesla, Amazon, and Microsoft are all down double digits, Microsoft being the worst. All right, Godspeed. Listen, if I'm wrong, I'm a big boy. I've lost money before. Many times, I should say. Many times have I lost money before. But do you think that the MAG7, so I saw that you have a global breadth chart in here showing that the most number of markets near highs in over 20 years, and this is like the global stock markets. If the MAG7 and AI takes a bigger tumble here and software stocks continue to get hit, that's not going to impact overseas markets at all, is it? That's the hedge, isn't it? It depends how bad it gets. I mean, obviously in a bear market, correlations go to one. So I guess if the MAG7 falls 30%, the rest of the market will tumble too, no? Okay. Yeah. All right. I am actually buying Microsoft. Bear with me. First time in a long time I've done this on the show. Locked in. All right. Let's move on. Market order kind of guy? Market order. I mean, especially with a stock like that, right? Isn't it a new move to buy in the first half hour of the market? First or last half hour? I don't know, man. I'm scared I'm buying. Okay. All right. this is a good chart it's so fun i mean it's markets man am i right how much fun it's unbelievable how i know we're broken record here broken horse dead horse dead record walking dead yeah beating a dead record dead man walking never saw that one sean penn sean penn not a good hang that movie all right um of course coming into 2025 it was like all right game on i'm sure there were many episodes where we said is it even possible that we avoid an ai bubble that's how we were talking right like yeah probably not it's probably coming wrong all right here's a good one steve don's tweeted i definitely not pronounce his name right but um there's a there's a line a diagonal line over the e i don't know which i don't know what is that don zay don zai who knows he has a chart showing global it sector in the late 90s and the global it sector today and the 90s chart shows the price and the earnings and of course the price diverged bigly from the earnings versus today where the earnings are ahead of the price. Nothing like the 90s. Couldn't you say that? We never really – so like we're already separating the wheat from the chaff. We're trying to. And these – it feels like people are in a stage of – the surprising thing to me is that where people are more looking for losers than winners, right? It feels like when this – usually in innovative bubbles, everyone's looking for winners. It was not like this in the dot-com bubble where people are trying to figure out who the losers are going to be. Let's sell those suckers, right? This is different. Great use of suckers. We never really got our, like, blow-off bubble here because people are looking for the losers as opposed to the winners. Which, by the way, let's assume that we're, like, somewhat in the vicinity of a bottom, right? Let's say that the S&P falls 10%. I don't know. Whatever. That we don't, like, the wheels don't come off. as shitty as this feels i still maintain this is a much better outcome for all of us stock market investors because had it gone had the s&p gone straight to 8 000 you know it coming back you know it would have come back this probably is a better outcome i agree um all right oh uh speaking of 1999 i haven told you this i been slowly getting back into the sopranos okay so we didn't have hbo growing up no me either that was a sign of wealth for me when i grew up if you had hbo you were a rich kid yeah so i definitely felt like from that angle i didn't feel very good about my standing in life it is funny how everyone has every streaming service now it seems like it but back then like hbo was a really big deal if you had it yeah so as however old i was as a 13 year old you say you're not watching the past i don't i don't like it but do you remember when you'd get a free weekend once a year of the movie channel oh man yeah that was a great weekend anyhow so i'm i'm up i'm on season three and i'm not like plowing through it because i just i just fall asleep in 20 minutes but it's the season where uh tony and ralphie are fighting anywho um i was at the dump last week guess what's not being disrupted by ai my dump runs your favorite place gandolfini that that's that's the best tv acting in history though right there's no one that has a better performance than him maybe you know i find this accent so absurd i can't get used to it yeah okay i i think it's he's the best tv character of all time that's where i landed on sopranos there's a lot of really bad acting in that show though that's the thing that like is kind of hard to isn't there there's a lot of not so great um so anyhow i bring this up because i was at the dump and i saw something that just brought me back to simpler times a box of dvds and cds and i couldn't oh wow you take a look i couldn't help but give one of the one of these um and so the sopranos was on top the sopranos dvd was on top so back in the day like when i used to live in like in this in a story in brooklyn people would leave on the sidewalk a cardboard box of books cds dvds and there's just there's just that was that was that was that was peak life for me you would stop you look what do they got over here i'm glad i never got into the collecting dvds you should i was obviously one of those maniacs i would go to blockbuster get two for 10 used to be able to me or was it two for 20 i i bought i spent all my money on dvds okay not a great investment but good memories all right what's your retail flow all right check this out you mentioned like global breath uh global stock markets the number of markets overseas near a 52 week high i'm sorry more than 2% above their one-year peak has jumped to its highest level since 2004. So amidst all of this, global markets are on fire. But that's what I was asking you. So that's why I say, like, I don't know, man. I know I'm flopping around like a dead fish. But it is hard to get too bearish when the global markets are like this. That's what – I mean the pushback would be, listen, this is the peak before – because I'm thinking the S&P is almost at all-time highs. Global stock markets are breaking out to all-time highs. The economy is still growing. Interest rates are falling. Inflation is relatively benign. And you're bearish? And the 4.3% unemployment rate. It hasn't happened yet. So people say, no, no, no, this is the best before the worst comes. That's the pushback. I don't know. I go back to the Charlie Munger line. If you're not confused, you're not paying attention right now. um software stocks are bouncing pretty hard at the open salesforce is up five percent um who knows let's see what happens at the close this rally could easily fizzle but hit the sell button hit the sell i'm not selling i i'll sell when i'm down 30 or up two percent that's it there's no between i've got great risk reward here um okay uh this is a good one exchange traded call options um are slowing dramatically from retail yeah people are people are uh people are scared oh okay so the the bullishness it really really peaked towards the end of last year and now people are going back okay yeah that's interesting all right here's a great chart showing why investing is so much fun and so exciting and so frustrating and so maddening and probably a great chart on why you should just index but i can't help myself i mean i do index who am i kidding but why i also love the love the game so netflix clearly clearly a a global winner right it won streaming now of course it's not it didn't win. It's not the only winner. YouTube, we get it. But Netflix beat Disney. It beat Paramount. It beat Prime. It beat Max. It won. It won. There's no... The battle in the war is over and Netflix is the winner. Right. And if I gave you the financials of Netflix and the free cash flow, you'd be like, wow. Five years ago, I would have loved to buy that stock. Netflix has underperformed not just the S&P. Netflix has underperformed, let's say, the average stock over the last five years. Netflix has underperformed the equal weight more specifically. Netflix, the biggest winner of one of the biggest categories of the decade, has underperformed the equal weight S&P over the last five years. Why would you ever buy another individual stock ever again? I say to myself as I'm buying another individual stock at the open. Do you know how much less brain damage I have now that I don't have to like check my app every day to see how my individual stocks are doing? So it's such a freeing feeling. I know. Why am I doing this? It's fun. It's a game. It's like, it's entertaining, right? It's part of the game. All right. So I was thinking all the crazy stuff we've thought about. this is like in the when you hear the bad stuff excuse me when it doesn't happen you just kind of move on remember how how long we debated hard landing versus soft landing that was the number one debate in finance and then it just went away right and that's what happens with a lot of this stuff alright what does Mike Zicardi have for us this week okay let's talk about something fun let's talk about how AI is impacting the labor market All right. Average monthly job growth in AI-affected industries over the last three months. So in here is management consulting, graphic design office, administration, telephones, call centers, computer systems, and a bunch of others. And it's just negative. This is not AI-related, though. The reason this happened is because look at how many more jobs they put on in 2021 and 2022. They overhired. True. So there's still not an AI story yet. Okay. Warren Pius has another chart. showing AI exposed versus non-AI exposed payrolls. And I don't know what's exactly in here, but I trust Warren's intuition, not intuition, skills, research skills here. And these charts are diverging bigly. This is payrolls, okay. All right. I mean, there's no doubt about it that this is a thing, right? Like companies are not going to be hiring at the same level as they were. I agree. I actually think that if we're going to have this mass unemployment, It's not going to happen on its own. It's going to be there's going to be fewer job openings and it would be in the recession scenario. That would be when this really drives into hyper gear, right? Because in recession, people lose their jobs and then they don't get them back. That would be the fear for me is that it that's I don't think companies are just going to rip the bandit off and just do mass layoffs outside of a recession. You know, it's not that market express is not bouncing today. That's interesting. Let's see what else is going on. Are the asset managers bouncing? All right. So I thought this was interesting. I think this was Golden Stacks via Samuro at his sub stack. This is interesting. So in maybe why a lot of this is just really feels like it's overdone. One nugget buried in the January jobs report was a notable drop in tech employment over the past few months. And the recent disruption in software stocks could foreshadow further pressure down the road. But it is worth keeping in mind that tech employment accounts for only 2.3 percent of overall payrolls and software publishing for just 0.4 percent. So as big as tech is in the stock market, as far as the economy goes in the labor market, it's still a tiny, tiny piece of the labor market. Because guess what? You don't have to hire those money people in tech. We've talked about this. That's one of the reasons it's so profitable and a big profit margin. So just because you're seeing a bunch of stuff where people potentially losing their jobs or laid off, that doesn't mean that it's going to impact the entire labor force yet. All right. Let me read you some quotes about the economy from the transcript. This is from Thomas Pederfee, CEO of Interactive Brokers. There are two economies in this country. If you listen to the BLS, the economy is doing great. If you listen to the big firms that are making huge capital investments, the economy is doing great. If you listen to the newspapers and the television, the economy is doing extremely poorly. So I don't know quite how to interpret that, but I believe the economy is doing great and it will continue to do great. Okay? I don't interpret that. The media is negative all the time now. Right. Everything is bad. That's how you interpret that. been like that the entire decade for the economy the economy the economy hasn't changed at all really in the past i don't know three years you're right you're right the view of the economy has nothing has changed in the economy walmart ceo across our customer base spending continues to be resilient in the u.s we see the customers choiceful in their spending okay capital one the one word i would use to describe the consumer these days and everything we observe a capital one is the word stable. Let's just start with a story from a macro point of view. Things, despite all the noise in the economy, things are pretty stable. And lastly, this is my favorite one from Truist Financial CEO. I'm sorry, senior EVP. Consumers' beliefs don't match their behaviors. And my dad used to tell me a long time ago, watch what people do more than what they say, and you'll learn a lot more. So they're giving surveys or taking surveys that sentiment may not be as high as we would hope that it would be. But what they're actually doing is totally different. They're spending, they're active. And so that's something that we're seeing. You could have said this every year. These quotes could have been read every year since 2022, and it would have been true. It's been the same thing the whole time, this whole economic cycle. It's the same thing. People say they're bearish and they keep spending money and they don't act bearish. All right, let's talk about some funny stories. A $7 billion Japanese toilet company just discovered its ceramics tool can be used to make bleeding-edge AI chips. That's a $60 billion market. Their stock is up 60% on the news. That's a funny story, right? Okay, Mike Isaac, Amazon's internal AI coding assistant, decided the engineer's existing code was inadequate, so the bot deleted it to start from scratch. That resulted in taking down a part of AWS for 13 hours, and it was not the first time it happened. And everyone and their brother pointed out this actually was a plot on Silicon Valley, the show, like the AI bot decided to like just delete stuff. And I rewatched the first season in the last five years. That show, particularly the early was Mike Judge. Mike Judge is a genius. He is such a genius. And ahead of his time with Office Space and Idiocracy and Silicon Valley. And but don't you think that's going to be a savior for I keep saying this stop like AI is going to start making mistakes. Of course it is. It's going to do something. And that's when people go, OK, I'm going back in the loving arms of Salesforce. or whoever like i i can't i need someone to blame if there's a mistake i can't have the vibe coding do a mistake for me the the push and pull is humans always figure it out right we've always adopted new technologies and like yeah but this technology is different and michael people there literally used to be a job or someone would walk around and light gas lights before electricity was around people would knock on people's windows because alarm didn't exist they used to be telephone operators i know i know this is not elevator operators these things all used to exist they don't exist anymore yeah we all know all of this to me why that's like sort of uh erroneous is because none of the inventions and the new technologies that the place specific industries like the blacksmith for example it wasn't like a technology that applied that could be applied to every single sector and industry and job. Like that's the obvious difference. But I can't. You're not going to displace a plumber. The person drywalling is not going to be displaced. You're right. The reason this is so scary is because it's coming for white-collar workers. Because for blue-collar workers, that took place over 30 or 40 years. And this is happening faster. That's why it's so scary. Okay, this is hilarious. Charter has a chart showing the free cash flow that companies burned on their way to profitability. They're looking at Tesla and Netflix and Uber. And just for context, Netflix, which was spending, I remember when they were spending $7 billion on content and people were like up in arms, like this is irresponsible, it's crazy. And it was, it's easy to say now that they won, but it really did seem nuts at the time how much money they were spending on content and how much free cashflow they were burning. So Netflix burned $11 billion. Tesla building electric vehicles burned $9 billion. And Uber building out this three-sided network burned $18 billion. OpenAI is telling investors that I think through 2030, they're planning on burning $218 billion. So if you could right now in the Republic, short OpenAI and go long Anthropoc, would you do it? No, because OpenAI would be down 70% and Claude would be up 40%. But wait a minute. Which corporation has the biggest partnership with OpenAI? Microsoft. What stock did you just buy? all right i just sold it all right uh going down to the ship all right um so bitcoin is still just a a software stock the the charts line up perfectly and i know like the analog charts aren't always right but this is pretty right it's amazing it's kind of amazing it's just it's a software stock but i guess it makes sense maybe we're retrofitting the narrative but it is it is software i guess it's code right i just don't know how this happened with all the things that Bitcoin was supposed to be, how it ended up just being like a software stock. It's really surprising to me with all the stuff that we read about it over the years and all the podcasts and all the think pieces. And then it's just, it's a risk on risk off software stock. Maybe that'll change. All right. Crazy. Let's talk about real estate. Let's talk about some real stuff. Crazy chart from Mike. By the way, hold on. Just one last thing. I probably said this already. The everybody back in the boat can happen really fast. Oh, yeah. I agree. Yes. Like, well, the deep seek thing lasted a weekend. Remember? This is longer than that, obviously. It sounds implausible now, given, you know, whatever, because it's not because it's not going to end. Right. The threat is not going away. It's just a matter of how investors interpret and digest it and react to it, which is, you know. All right. Mike Simonson says this just blows me away. He has inventory change from 2019 to 2026 by state. So for example, Michigan, the inventory is down 40% almost. New York is more than that. Texas, inventory is up 42%. Florida is higher. A lot of places in the southeast are higher. This is showing that like the bifurcation we're seeing in the housing market. Like it's always been kind of a local market, but I feel like for a few years there, it was what happened nationally impacted the housing market. Now it's totally changing and the location matters more than anything. It's like a buyer's market, but there's no buyers. people still don't want to buy there's a there's a house there's a house on my street on the water um listed for 1.2 million dollars and it sounds like an absurd price than it is it's not a it's not a big house but this would have gone in two seconds right because it's not water and i don't know i mean there's just there's no buyers yeah look at this in illinois Okay. But isn't it interesting? 70%. Did buyers dry up? Like, if you wanted to buy a house, you would have bought a house? That doesn't make sense because there's demographics-wise. Or how about this? If you wanted to buy a house and you could have afforded to buy a house, you already did? Yeah. I mean, there's still activity, but it's just – it's certainly slowed. Maybe there is the appetite of steam. Slowed? Pending home sales hit like an all-time low? Did you see that chart? Modern, yeah. Not great. um the company pool pool the ticker's pool what's the name of that company pool something they pool corporation um uh sales they just reported last week sales are down like one percent i think year over year well think about how many pools were pulled forward during the pandemic that would have happened anyway yeah all right we'll we'll do blue owl real quick um If you want to hear a deep dive, I spoke to Brian Moriarty yesterday on the Talking Wealth podcast about what happened here. To me, this is not one story. It's a lot of things happening. I think this was a PR mega, mega, mega fail, like mega fail. So the story with these BDCs, these business development corporations, I think publicly traded, private credit, or not even publicly traded. Some are listed. Some are not listed. It's private credit. But these things first started to go sideways to south when interest rates peaked and started to come down because these are floating rate loans. And they worked really, really well in 2022 because it kept up with increasing interest rates. It didn't destroy the price. And there was really very little defaults. So in 2022, this thing was a home run, especially compared to bonds that were down 15%. And then money flooded in. And there was a lot of questions like, wait a minute, how are you putting the money to work so fast? Like, are there really this many decent loans? What are the underwriting standards look like? And of course, investors, like this is what we were asking over the last couple of years, like, how would we know? I don't know what you guys are doing. I'm not reading the sub docs. Even if I wasn't, I wouldn't, this is not my language. So that was the first threat. And then there was the Tricolor First brands, which ironically wasn't even a private credit thing anyway, but it got lumped in with them. And I was able to like hand wave away some of the cockroach type stuff. you can't hand wave away the software exposure bcred just put out a thing blackstone 26 percent of their funds is private is software like this is this is a thing so it's just like the triple whammy of like bad shit and then potential deflation is bad for these funds too that's not great right so i listened to your talk with brian i thought the best point you made was that isn it weird that this stuff is happening when there no credit problems like the high yield spread spreads are still very tight yeah there no there no stress yet in the portfolios yeah there no stress in the economy there no stress in in spreads and this is already happening blue owl stock is down 60 so i actually listened i i got i got bumped i had the phone call to take but they they did a they did a call yesterday at 11 30 blue owl did and they just seem to be just deflecting and not taking responsibility and acting like there's nothing to see here. It's just bizarre. And yes, I'm sure that the article in the FT didn't help, but everything's not going great. The stock is down 60%, okay? So there's obviously some shit happening that investors don't care for. There's no way the CEO survives this. Knowing nothing else about the company, there's no way that they handle this is awful. So I didn't even know, and I follow this pretty closely, okay? Anytime there's an article about this, I'm all over it. I'm reading the sub stacks. I'm all over this story. I had no idea that OBDC2, the one that is in the headlines now, that air quote gated redemptions, that was always supposed to be a finite fund. That always had a 10-year life. Did you know that? No. Why did – how did I not know that? That's a huge part. I'm not a big – I'm not a BDC expert over here. No, but how did I not know that? That's a big part of the story that I only just found out about. Anyway, this is the part – You're a private credit tourist. I guess so. I guess so. No, yes, absolutely. Here's the part that – I spoke about this with Josh maybe six months ago. You listen to the Blue Owl earnings call and you listen to Mark Rowan at Apollo and Mark Rowan is being very candid about the opportunities and the environment. And Mark Lipschultz is just like – I don't know what he's saying. He said facts matter or you got to look at the facts. Facts do matter like eight times on the call. So he was asked about the stock reaction. And he said, the end of the day, stories don't drive results. Results drive results. Oh, yeah. And as you can see, we have delivered on every one of our products that absolutely top level performance. Thinking about what we've run at an eight basis point net net loss rate. And so these facts do matter. What else did he say? I mean, it was just a lot. He's like, we don't see red flags or yellow flags. We see green flags. It's like, bro, your stock is getting murdered. There are redemptions out the ass. Like, it's not all misinformation. Now, fine, maybe some of it the media has taken too far. But just if I'm a shareholder, I'm losing my mind listening to this guy act like nothing's going on. yeah that's not great and even on the call yesterday that i was on so you've been you've been very bullish on the wealth channel getting into this stuff do you think this totally slows the pace of this yes right of course it does of course it does now the good news is you're not going to see like like um is private credit going to take on the economy it's like listen there's no rush for the exits that's sort of part of the point is that there was an asset liability mismatch year these loans were illiquid and investors all want their money back like this is not a great this is not a great scenario um do i think that private credit the asset class is dead no of course not but i think that like well blue owl is done they will not raise another dollar in these private credit funds how about this it's probably better that this stuff happened now before the spreads blow out in a recessionary environment hits and people kind of understand okay this is because it's i'm guessing with my experience with like credit hedge funds that have shut down in the past that I was involved with in my prior life, it's going to take years to get all these assets back. Years, not months, years. And you're going to realize like, oh my God, oh, this is what we own. Okay. So, so here's what they did that even when they announced this, I was like, what are you doing? This is so stupid. So they said, okay, you want investors to keep asking for 5% of their money back. We're going to give you 30% of your money back. Take that. How do you like that? See, we're good. We have 30 and we're going to sell for 99, uh, 99.7 cents on the dollar. They said yesterday that they were completely surprised by the market's reaction. They thought that would be interpreted positively. And anybody with a brain or common sense, I'm sure these guys know math very well, could have seen, Hey, wait a minute. There's so much smoke. You would think that the market will take this at face value. Nothing to see. Everything's fine. See, we just did $1.6 billion with the sales. By the way, you asked like how our flow is going to do. So Blackstone, for example, monthly inflows, this is from the Wall Street Journal, monthly inflows into the largest fund managed by Blackstone dropped to $600 million in January from $1.1 billion in November. So still positive in January. I would be very surprised if they were positive in February, but who knows? Anyway, Blackstone, yeah, these stocks got murdered yesterday, murdered. There's one subsect that I follow called Covenant Light that writes about this stuff. And he said, using – this is a bit mathy, so just bear with me for a second. Using OBDCs, that's the publicly traded one. Using their 1.19 debt-to-equity leverage, a 23% discount, implies a 10.5% gross markdown on the portfolio. Okay? He said we can further break this down to see what it implies about future defaults. If you assume a 50% loss given default, a 10.5% portfolio loss implies about 21% cumulative defaults. spread over time. That works out to roughly 11% annualized defaults over two years, seven and a half over three years annualized at four and a half percent over five years. For context, leveraged loan defaults in the worst stretch of the GFC ran at roughly the mid single digits annualized. So 6% from 2008 to 2010. So in other words, here's the TLDR. If you take OBDC's discount literally as a pure credit loss forecast, the market is pricing something like a gfc level or worse so why am i like even moderately comfortable catching some of these falling knives there is a lot of fear out there and yes of course it can get worse there is no valuation support it's not going to stop i get all of that i get all of that i might lose money on these trades i probably will let's be honest but there is blood in the streets you've diversified your blood too very bloody very bloody um all right let's i want to talk about some of the prediction market stuff from mike sellig who's the head of the cftc but we're going to say this to next week so we're already going very long here um all right let's talk about movies all right so mike ziccardi uh gave us a gave us a chart that shows movies are getting longer. So it shows the average runtime of movies going back to 1980. And in the 1980s, 1990s even, it was right around 100 minutes, a little over 100 minutes. That's perfect. Which is perfect. Now we're up at 115, 120 minutes. Movies should not be getting longer. There's a lot of movies I watch these days where I go, man, that would have been a great movie if it was 90 minutes instead of two hours and 20 minutes. I just clowned myself twice. I'm like, you know what? Think back to the 90s movies that were the perfect runtime go to go to the rock um uh go to con air whoops con air runtime two hours three minutes face off two hours 19 minutes the rock two hours 15 minutes all right maybe not nicholas cage movies what about demolition man you're right it was really like the comedy demolition man hour 55 that's that's under two hours under the only you know what needs to be more than two hours shawshank redemption right and that's about it yeah but the comedies and the rom-coms and like that kind of stuff that can be an hour and a half we don't need longer movies i took rob to see wuthering heights yeah um speaking of long movies so this emily bronte she did um saltburn and what was the other one um i never i never subject myself to saltburn not for you i'm promising young woman you saw that one right sounds familiar that was with uh carrie mulligan oh yes yes okay so wuthering heights had a lot of highly anticipated margot robbie jacob alorty it's a it's a romantic movie it's a rom-com without the calm way too long no nudity how do you have sex scenes with with these two people with clothes on there's like a lot of sex with cloth they're wearing cloth or whatever they were wearing People used to wear a lot more layers back then. This movie, this was like the zebra to the donkey meme for me. I really enjoyed the first – I really enjoyed. I tolerated the first two acts. There was some stuff that I – and then to me, the last act completely fell off the rails. But this was two hours and 20 minutes. I took Robin to it, and the person next to her, her entire tub of popcorn fell into Robin's pocketbook. So are you watching Love Story with Robin? I mean you have to. It's a New York – it's the JFK Jr. story with Carolyn Bessette. It's on Hulu. It's actually pretty good. I think Robin might be watching it or she spoke about it. Should I watch it? I'm watching it with Courtney and it's – yes. I mean as a New York person too. It's all about New York essentially. And so – and the guy looks a lot like JFK Jr. They did a really good job getting the guy who looks like him. All right. Anyway, I reject – I don't want to sit in the – so once it goes – like it felt – just the last 20 minutes, unless it's like a banger. It just feels way too long. I don't want to sit in the movie for two hours and 20 minutes ever. I agree. All right, let's wrap it up. Oh, I think I'm having an impact on the culture. Maybe I just identified it. I don't want to act like I invented the question mark. But in Miami, Ben and I did a bit about things people say in group settings when you meet somebody, this guy, there he is, here comes trouble, that sort of thing. Like I feel like that's taken on. We saw the Instagram meme of that. Oh, yes. Right. So we got a great email. Don't know whether this is an addition to the this guy lexicon or just a variation. I was sitting at Starbucks next to two well-groomed guys in their early 30s. They were talking about buying a local business. Another 30-something prances by my table in sneaker shoes, slim fit chinos, and a three-quarter length trend because it was raining. he stops opens his arms and says look at these guys i never thought about the plural uh the three of them bro hugged and i almost shouted there he is that's a thing great email right yep okay recommendations besides we're there in heights so i i was a game of thrones person from the very first episode i watched it um i was always a little confused but i was very entertained and then when the next game of thrones show the dragon when i came out i was like do i need another game of thrones show like how many seasons was that but i watched it and i like i love that show do you watch it yeah so i watch it i like them both and but it's just like and then i saw a preview for the new another new show and i'm like do i really need another one and i didn't watch it and you you said a couple weeks hey give it a try so we binged it and we watched the whole thing in the last week and the finale was on this week too night of the seven kingdoms um it's my favorite one of the three it's not the best it's not the best it's my favorite because they were half hour episodes it had had more it had a way more humor to it it had like a heart and it was just i like i could actually understand what was going on and it's not the best the other ones are by far better there's better actors there's better characters a little bit more fun yeah it was more fun and i it was my favorite versus the best i really enjoyed it okay i can't believe i like it so much can i ask you a question so i i've said this a million times i stopped watching game of thrones in season three because i remember just like looking up one time and like not knowing a single character and i was like i don't why am i watching this i have no idea what's going on i've not a goddamn clue what's happening for the season finale i shame on me i was on my phone the entire episode and then the episode just ended like wait did it What happened? What did I miss? I think I've missed the time. The funny thing is, I don't know what it's about my brain in particular with this type of show that I just, and I really enjoyed the first five shows because there was only six episodes. For some reason, my brain has a blockage with this type of show. It was a lot. I was thinking after we finished this, I don't remember how the Game of Thrones show ended. I remember the finale. I remember kind of being underwhelmed, but I don't remember who won. All right. So I finally, I've been working through my action movies. I showed because George is such a big action fan. We watched Terminator 2 this weekend for the first time. And, man, I mean, I told him, like, the two greatest action movies of all time are Terminator 2 and Die Hard, as far as I'm concerned. Terminator 2 is at the top of the mountain. You can't make a better action movie. Cannot. Well, no, cannot. And Kate kind of strolled in halfway through, and she's like, what this? And she just sat transfixed to the rest of the movie. And it really is – and the funny thing is is you can tell so much of it is just actually done by real people and stunts because you can tell the person on the motorcycle is not really Arnold. It's a guy with a wig. you know when he lands but george just kept saying he kept saying why does this look so real because it's not ai like he's like all the stunts are actually done he's like why does this look so really kept saying that and i think they liked it so much because it wasn't just this ai computer driven garbage and man that was a movie just i still remember like the thing is to this day it came out in 1991 it still holds up but you don't look at it and go oh man that doesn't hold it still holds up i wish kobe would like watch that's kobe so kobe's still like a baby like he's still like he watches diary of a wimpy kid all the time he just hasn't graduated yet i obviously will to like um grown-up movies even like moderate like ace ventura like i don't think he would sit through oh yeah that's my daughter she still likes the movie gets up too so i decided to watch a movie from 2013 to figure out how the future is going to play out so i watched her again which is a really good movie we got lucky phoenix um it's amazing how much stuff that show really but here's Here's what's a great optimistic take on AI. Everyone had their own AI system, you know, and they're – and Joaquin Phoenix wrote greeting cards to people, and he lived in a sweet apartment. So I think everyone's going to be fine. Right? But Chris Pratt was in that movie as kind of like the schlubby friend, and he was like the schlubby guy in Parks and Rec, too. He weighed like 300 pounds. has there ever been a better glow up than him going from like this schlubby dude who was like the sidekick and funny to like the leading man chiseled you know i i completely i have no memory of him being in that movie yeah he he's like the he's like the friend and he's kind of forgettable in it it's it's crazy what happened to him um all right i guess it's on the rewatchables this week but i watched crazy stupid love again on netflix just because it was it kept feeding it to me on the algorithm so all right fine i'm gonna watch it again it's the best rom-com cast ever and i don't think it's even that's even like you can even argue it ryan gosling emma stone steve corell julianne moore marissa tomei and kevin bacon plus like three of that guys that's the best rom-com cast it's it's the most like there he is right anyway um i love that ryan gosling is so good in that movie i i only recently saw that for the first time maybe six months ago phenomenal when every when all the stories come together at the end it's just that one scene is it's just I think the movie came out in 2011. There's no more spoilers for something that old. All right, what do you got? All right, not to be annoying, but industry is so good. And I know, like, nobody watches it. I think I'm the only person that does. It is – season four is the best season. It's easily, for me, my favorite show that I feel like I'm on an island. I feel like nobody else watches it. Okay, it was so depraved. Here's my problem with it. I never believed that any of the lead characters were going to be in those jobs. it just it was too unbelievable for me to to grasp it was so the first two seasons they're like trainees in the bank and then i think i think they leave in season three and season four is completely outside of it okay um season four is so good it's unbelievable and it is it is completely depraved um they do not make shows like that that's the problem with me is that i feel like the depravity like that was the stuff with like the show girls i feel like they did it just to really push buttons and it's like it didn't help with the story at all. It was unnecessary. It was gratuitous. Don't make me say the Patch Adams line. Patch is a hoolihan. Patch is a hoolihan. Patch Adams. That was Robin Williams. I can't believe you're going to quote Patch Adams. Patch Adams. I cried at that movie. Rest in peace, Robin Williams. And of course I watched Primate over the weekend. Robin was playing with her friends. I fired a Primate which is about a chimpanzee that kills its entire family. Ah, how was that one? Great stuff. Is Mahjong making a thing because my wife is playing it now too? Is it like a thing? Yeah, yeah, yeah. I thought it was like only for older women, although I guess our wives are getting older. They're not chicks anymore, little chicks. I wasn't using the misogynistic. Is that misogynistic? I don't know. Either way. They're not baby birds is what I was trying to say. Don't get mad at me. All right. How are you feeling? Are you feeling better now after this? What's the stock market doing? No, listen, I'll snap out of it. Maybe I won't. I'm still optimistic. You know the scene in The Wedding Singer where the old guy at the bar says to Adam Sandler, I just need somebody to hug me and tell me everything's going to be okay? That's you? I feel like that guy. we human beings have survived and made it through worse than this that's why that's what i'm choosing to believe we're a dynamic species we're gonna figure it out we've survived worse yeah it's true all right all right it feels like uh so much has happened between these episodes right i feel like i feel like we could do like two a week it feels like pandemic times that was yeah you burned out pretty quickly though i mean no i didn't we did it for like a year and a half. Was it that long? Okay. I thought we were done pretty quick. I don't remember. The pandemic is like, when you have kids the first three months you black out. That's the same thing with the pandemic for me. Nothing. The only thing I remember from the pandemic other than drinking every night which is maybe why I don't remember a lot is Tiger King and The Last Dance. Okay. The Last Dance did get us through. All right. Email us animalspirits at the compound news.com. What do we say? Personal emails, personal responses. thanks to the production team filling in for Duncan who's in Japan this week thanks to Daniel and everyone else alright see you next time