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Welcome to Animal Spirits with Michael and Ben. I have some thoughts to open the show. It's been sort of a quiet period, at least the last week alone. Feel like the docket is a little bit light this week. There's obviously a million bajillion things happening, but it was a slowish news week, so I have some things that I want to talk about. But actually, you know what? Before we get there, you've got a mustache. You look like a Ron Jeremy circa 1977 without the ponytail. What's going on?
I did this for you. Let's just marinate it for a while. I'm going to save it for the end of the show and give you a... but just so you know, I could have shaved this off, but I wanted to keep it for you.
For me. All right. Well, consider me intrigued, Ben. All right. So, I was talking about this on TCAF with Josh and Dan Skelly, and I know everybody knows this, but I feel like we don't talk about it enough. We're all trying to suss out what's happening. And it's been the same storylines for a while now, right? Especially the past few months. I feel like this show and pundits in general have gotten pretty repetitive. So forgive me, but that's just whatever. It's just what's happening right now. The amount of money that has been created by the bull market over the last 15 years has completely, completely, completely reshaped global economies, the stock market itself, of course, and everything that we talk about, and even things that are tangentially related. I listened to Pablo and Sam Koppelman talk, by the way, amazing show, talk about the Mark Walter stuff and the prices of everything from my $13 Chipotle bowl, which has now been normalized in my brain, to the $12.5 billion Lakers, to the hyperscaler buildout and the myriad ways of funding this, whether it's debt, equity, SPVs, follow-on, secondaries, distress, whatever it is, the pool of capital is so deep and vast that it has changed everything.
Now the caveat to that is another side effect of this prolonged economic stock market expansion is it's really difficult as investors to picture yourself in a different regime. It's very easy and normal to be lulled into this is just the way it is because it's been this way for so long. And last week we were talking about the idea that there might not be another recession this decade, which listen, I mean, we've got three more years. So that's not like, that's not an outrageous statement, right? Certainly, certainly possible. But I think that not only will there be another recession, which is also not going out on a limb, there will probably be another financial crisis at some point because the psychology of markets, we are just going to push this too far. We always do. And maybe this is the culmination of what we've been saying for the last 10 years. It feels a little bit, a lot of things feel different this time. But I feel like that is almost, I won't quite say inevitable, but that's just where the human participants of stock markets go eventually.
There was the old Onion headline that like Americans go in search of another bubble to save them from the last bubble. That's just kind of, you're right. It's kind of what we do as humans. The other thing is we've talked a lot about the fact that there's just so many wealthy people now and that's helping power the economy and keep prices up and all this stuff, but also these tech companies have become so big and so profitable and their margins are so high that it gave them agency to do this AI buildout, right? It's like we're playing with so much money here.
But you know the point, we couldn't have done this if it wasn't a raging bull market. Did you know that every company in the top 10 of the S&P, and go out to 11 and almost 12, are now trillion dollar companies?
The entire top 10. JP Morgan is sniffing. So Eli Lilly is a trillion dollar company now. Berkshire Hathaway is. Micron. JP Morgan is within spitting distance of being a trillion dollar company. These companies are so big. They have so much money that they can do this now. And you're right, it's totally changed things and people, you're right. Everyone keeps waiting for the... it could be 20 years until we have an actual financial crisis.
It could. But you're right. It's never going away because people always take things too far and too far, and if we don't get a financial crisis in the next 5 years, 10 years, 15 years,
No, but then we're going to go even further. And that's the thing.
I'm saying if this doesn't end in an absolute panic, then what was the point of all this?
Yeah, you're right. It's, you're right. I think that's been the one thing everyone has underestimated, just the sheer amount of wealth that is in this system right now. It's absolutely, and we have something on everywhere millionaires coming later for how many, like how many rich people there really are. It's nuts. But yes, the year recession thing, this is the, the timing of it is hard because people have been trying to predict this stuff every single year. 2022, we have to have a recession. 2023, well, okay, fine. Stagflation.
Ben, do you remember what, do you remember what the first, I think Apple was the first trillion dollar company. And let's say that happened in, I don't know, 2015, 2016, somewhere around that time frame. And there were so many eyeballs and so many articles about if this were the top with a trillion dollar company, it would be so poetic. And the idea of a trillion dollar company seemed so fantastical. At the time when it happened, it said, 'How could a single company possibly be worth $1 trillion?' And now you have companies like Broadcom that are sniffing a trillion. Broadcom was, and now it's not. And we don't even discuss it. It's like, yeah, trillion dollar company is sure, right? Eli Lilly is a trillion dollar company. And he's like, 'Ah, okay, that's cool.' Oh, they solved obesity. All right, what's next? What else do you got for me?
There is this thing, there is a line of thinking though that if it wasn't for AI, this would all be, it's the AI house of cards. If AI didn't come along and they didn't spend all this money, everything would be falling apart. And I think that that's actually probably wrong. I think there's a huge crowding out by AI that people are now coming around to. So, there's two charts I want to show you. One from Michael Semblat that shows not only the amount of spending that's being done by these, but it's showing the hyperscaler and Nvidia debt issuance as a percentage of Treasury bond issuance. And it's 70% of Treasury bond issuance. So people keep wondering why do rates on government bonds keep going up? And it's funny, every time there's a government bond talk over the years, you and Josh and I always joke that, well, the real reason is just flows. And what if the real reason government bond, yes, it's growth and it's inflation and it's all the macro things, but what if it's just investors are not putting as much money into government bonds and they have to raise rates to get because there's so much other debt issuance going on right now that AI is crowding out the government bond market.
Well, there's, it's never just, there's two main, there's two main things. You just discussed both of them. It's the macro which is entirely legitimate, war, tariffs, a lot of issuance, and then it's the second column which is competition from hyperscalers, and both those things are combined to drive yields higher. I'm sure you saw this chart from the Wall Street Journal that shows private construction relative to December 2023, and it shows data centers going up, and then it shows all other private construction spending crashing and falling off a cliff, and it's basically saying the data centers has sucked up everything, and that's what we're building now, and maybe it's taking construction workers and permitting or whatever, and we're not doing it. And so if you take just, you can't say in a vacuum, if you take away the AI spending, the economy is in a recession. It's all the same story, and woven into the higher rates is, I don't know what's in all other private construction spending, but obviously a lot of that is real estate, a combination of commercial, residential, industrial, and aren't higher rates negatively impacting that as well?
So other construction is getting hit from both ends.
So here's the thing, so getting back to your point about like having this blowoff top, I think if this is going to be a full-blown panic, recession, financial crisis someday, if AI was going to cause that, we have to get way stupider than this. This is not nearly stupid enough. And I actually think you could make the point. This is from the Wall Street Journal. They show, it's kind of a perfect thing. They show the US attacks Iran at like the actual bottom in rates this year, and then they take off. And now if you zoomed out a little on this, you could say, 'Come on, rates were already rising as it is.' But I think that we've actually kind of put a cap on ourselves for being stupid, and it's the White House that's doing it. So if Trump would have come in and just done his ballroom and put through his tax cut and done nothing else, no tariffs, no war with Iran, if he would have just said, 'Let the AI stuff run crazy,' I think we would be in a much different place now because think about it, rates would be much lower. Mortgage rates would probably be lower. Housing would probably be picking up more right now. People would be borrowing more money because rates weren't so high. I think if he wouldn't have done what he's done to make inflation stay stickier or higher, and obviously it's not all coming from the White House. There was other stuff going on.
No, I think you're 100% right. I think he maybe inadvertently saved us from something really ugly.
Which means it's just being pushed down the line probably because it's going to come, because listen, obviously that's what they want too. They don't want to, like they don't want to have high, the whole thing was he ran on lower inflation, lower rates, and we've gone the opposite.
Well, the other thing is about the financial market, even though we can't help it as individual participants, as a group collectively, nobody wants a bubble.
Because a bubble will burst, but individually we can't help it. It's a scorpion and the frog.
Because we all want to get rich quick. And so it doesn't matter what everybody thinks. It matters what like each person thinks,
Right? And it's like, all right, fine. If that group's going to go into it, I got to go too. And then it's the M&A getting more M&A. If my competitor is buying companies, we can't be left out. You can't override human nature. You could slow it down a little bit with tariffs and whatever, but all right.
And I think technology is just an amplifier of human nature. We've all seen this, sometimes in good ways, most of the time in bad ways.
There's been a lot discussed in the headlines about individual investors' anxiety over higher interest rates. And I think that most financial advisors are looking at these headlines and saying, ripping their hair out, saying it's the opposite should be true. Where is this fear coming from? I understand that maybe there's some PTSD when interest rates rose from 0.5% to 5% and bonds got massacred, but now we're on the other side of that. Higher rates are awesome. We finally have high fixed income for the fixed income investors. It should be celebrated. There should be like amazing headlines. Oh my god, this is amazing. You could loan money to the US government for 4.7%. You could get a real after-tax return. It's wonderful. But instead, individual investors are seeing fearful headlines. So, one of our advisors asked if I can come on a call with the client, which is rare these days. Markets have been very calm. I do my best work in a crisis. When the markets are free falling, that's when I shine. That's when I love to talk to the clients, but right now things have been very easy. There's been...
You're right. It's actually easier to have those conversations to provide context than just kind of flailing around looking for something to talk about.
Correct. So anyway, it's been coming up more and more that people are asking about bond yields and should they be worried? And I gave our advisor some talking points. I said, you know, where is this, send me the source of this consternation? Because he said it was an article that this client read. And I clicked the link and I see the bond market supply and demand problem by Ray Dalio. And I said, 'Dude, I want in. I want to talk to those clients. Put me on the calendar. I want in the game.' And so we're going to put a pin in this because we are talking with Colin Roche on stage at Future Proof a week from today. I think today's Tuesday, right? We're on Tuesday.
You know, I didn't even think about this. I looked. We should tell people this. This is a house cleaning moment. We're going on Wednesday afternoon. So our podcast is going to be late next week. So if you're a usual Wednesday morning listener,
I don't know when our podcast is going to go up, but I would say late Wednesday.
All right. Well, anyway, this is going to be advisor focused and the title of the talk is going to be how to talk to your clients about Ray Dalio because it's been 15 years of this guy scaring our clients.
Honestly, 15 years of us addressing his comments.
He's the only one doing it and he can't stop and he won't stop and neither will we.
It is. Yes. Yeah. And it's fun and Colin comes with data and he knows. So I think it's going to be very interesting. So yeah, if you have Future Proof, come check us out.
Just 10 seconds for people that don't know who Ray Dalio is. He's probably the most widely known hedge fund manager. He's not like active anymore. He's retired, but still...
He's active at Burning Man.
That's right. And he's active on the interwebs. He loves telling people that it's 1937 and he's been on this beat for a while. So we're going to give everybody some talking points how to debunk some of the nonsense.
All right. All right, I got a great stat for you from Duality Research that I read this morning.
The biggest takeaway is pretty straightforward. Doing kind of like a market what's going on. Since June, the S&P 500 is up less than 2% while forward earnings estimates have jumped 10.7%. Put differently, the market has become roughly 8% cheaper over the summer while everyone was busy soaking up the sun. Kevin Gordon tweeted this out.
One thing on that point, factually right. To me, the valuation multiples are a reflection of investors' moods. Not to me. I mean, that's not very profound. That is what they are, right? They are a reflection of how people feel about the future today.
Yes. Earnings are numbers. Dividends are numbers. Cash flows are numbers.
Yes. So feelings about the future today. And I love that the market has put a governor on forward multiples. I love that there is disbelief because this does set up the wall of worry which we need. So what did Kevin Gordon say?
So but this is also, I mean, someone would say, well, this is also rates going up and whatever, but he says at the beginning of the year the estimate for S&P 500 earnings growth in the second quarter was 14.9%. So start of the year, 6 months in, like that's not that far into the future. Now the blended growth rate is 53%. I don't think we're talking enough about how not only it's like, 'Oh, of course earnings are higher because of the cash flows and the capex and it's all the AI trade.' I think there's a lot of people poo-pooing this. No one expected this.
Can I poo-poo and unpoo-poo?
This is not a poo-poo per se, but you know what's annoying in these numbers are some of the markups from the private companies.
So we have to look at operating earnings.
Well, shouldn't that have been easy for people to determine?
But no, yeah, but nobody saw operating earnings either. So even if you say, okay, well, there's markups, fine.
For Nvidia over the last 12 months is higher than Apple.
Isn't that hard to believe?
That's why, that's how hard this stuff is.
So circular or not, it's still something to behold.
That's my point. Like this is really impressive that this is happening even if we know, okay, fine, it's not going to last forever, but there was not anyone coming into the year saying we're going to see one of the biggest earnings growth years ever this year. It wasn't on anyone's list, wasn't there.
No. All right, Ben, last week you spoke something about like dividend, the number of, was it the overall dividend yield on the S&P is like 1%?
Yeah, barely under 1%. One of the lowest. I think someone corrected me that it was technically like three basis points lower in the dot-com bubble, but we're there.
Lowest dividend yields in history.
So, another way to look at this, I thought this was very interesting. Rob Anderson from Ned Davis Research, less than 5% of S&P 500 stocks yield more than the 10-year Treasury, the fewest since May 2007. All right, May 2007, not the greatest time to invest. But that sentence aside, the 2000, the post-GFC period was unusual because all of these stocks got crushed and the dividend yields got pushed higher. But look at 1980 through 2000. It looks the same as it does today. This is not an aberration of history. The post-GFC period was abnormal, you could say.
Well, also interest rates were much higher back then, obviously. You're right. Well, yeah, that is...
That's part of it, but still rates are much higher today, too.
Yeah. And this, you're right. This is not like some signal that, oh my gosh, this is crazy. Unless government bond yields come way down, this is the new normal. Like companies don't pay out dividends anymore because it doesn't make as much sense.
So, to me, I'm not necessarily looking at... well, maybe I am a little bit. Stocks are, I mean, this is just a fact. Stocks are all else equal relatively less attractive compared to bonds than they have been for a long time, which is awesome news. Weren't people upset that 80/20 was the new 60/40? That people were being pushed further out on the risk curve? That's over. It's good. Hey, guess what? I had a little thought that I wasn't sure if I was going to share with you or the audience, but inside my brain over the weekend, Ben, I thought to myself, should I own some bonds in my 401k? So, obviously, I've been 100% stocks since forever because that's what you do as a long-term risk taker with a long, long-term horizon. You own stocks. But the thought did cross my brain. I don't know. Should I be 80/20? And then because you're getting paid, there's reward in the bonds. And if there is a big stock market pullback over the future, well, now I could take advantage of it by shifting back. And if there's not, I don't care. It's still great.
On Ask the Compound last week, there was a middle-aged guy. I think it was mid-40s. He said, 'Listen, I dutifully sat through the dot-com bubble blowing up and the 2008 financial crisis and I became a machine. I dollar cost averaged.' He said, 'But now if I see a big swing in the market, I'm losing like more than my salary in that situation. I'm getting, because I have way more money.' So he's like, 'Help me try to come up with the psychology of investing in middle age.' And I think what you're trying to figure out is like, is taking some money off the table, not market timing, but am I managing risk a little bit better here? Because I'm so far ahead of where I would have been if the stocks hadn't done so well that maybe I shouldn't look the gift horse in the mouth here. I should take the 5% for bonds.
Yeah. So, it's not making a stock market call. It's just being prudent. There's an alternative and it's paying you pretty damn well,
Right? And most investors still don't care. Now, the Bank of America had this chart. This one was kind of flying around social media a little bit. Negative long-run returns are great entry points. So, they look at the last time you had long-term treasuries. So, they say 15 plus years. And they did the rolling 10-year annualized returns when they were low or negative. And it was saying in December 1959 is the last time that these 10-year returns for bonds were negative on a nominal basis. And they got close in September of 1981. And those would have been way, way worse if you would have included inflation. Now it's saying like these are the lowest ones ever. Is this a good buying opportunity? It's kind of funny because on this chart, I hate to be a stickler here. 1981 was obviously the greatest bond buying opportunity in history. There will never be a better time to buy bonds than there was in the early 1980s. I don't know what would have to happen for that to come back again. I don't know how AI would cause 20% short-term Fed rates or whatever. It's never happening again. 1959 was kind of a terrible time to buy bonds because high inflation was coming. In the 1960s, you got negative 1% real returns in bonds because inflation was so much higher.
I get this. I don't love this chart.
People like charts like this though, like...
Right now is just like back then. And I think people love that format.
But this is not, I wouldn't say this is a pound the table generational buying opportunity in bonds. This is a best buying opportunity for bonds at 20 years.
Yeah. And not the same thing,
Do you want to talk about Rich Dad Poor Dad or not? I'll...
Yeah, let's do it. This guy is just an all-time bad guy.
Well, I got a million people sending me this because I wrote some blog posts about the Rich Dad Poor Dad guy and I call him Rich Dad Poor Readers. And there was a New York Post story saying Robert Kiyosaki is $1.2 billion in debt. I actually read beyond the headline. I don't think most people did. It's not as bad as you think. Like he was bragging about this. And I guess this is the way that you know that someone is really rich if they brag about being in debt that much. But then I guess his ex-wife said, 'You know what? This is like his real estate holdings or something. He's not $1.2 billion personally in debt. It's way, way smaller.' And he's like trying to inflate his...
So is he flexing saying like, 'Look, I'm so rich that I have the ability to take on this much'?
Yes, he's trying to flex. And I think a lot of people said, 'Wait a minute, this guy has always railed against debt in the system and people taking on debt and he's a hypocrite obviously.'
And my finance joke here was, 'Listen, the guy is finally putting his money where his mouth is. He's preparing for hyperinflation. If hyperinflation is coming, you want all that debt.'
So, I think he's... Anyway, I was... Listen, I read the book Rich Dad Poor Dad. It was on all the top when I said like 10 best investing personal finance books to read. It was always there. It never made sense to me. I never got it. I never... I was like, 'Oh, yes.' I know some people like the light bulb goes off. That one to me never did it for me.
I liked it. I don't have any remes. But...
Yeah, I guess the whole like it felt like a made-up story to me the whole time. So, I'm like, I don't know. That part doesn't do it for me. All right. I was looking for something. I think I wrote a blog post the other day about you and I were talking about Gen Z will be able to buy homes. And I wrote a piece in like 2014 about millennials saying, 'Hey, I think millennials are going to be fine. They're going to buy homes eventually.' Because people were saying at the same time, just like now, millennials are never going to buy a house. They saw their parents get wrecked. Unemployment is terrible. There was all these stories saying millennials are never going to buy. So I was looking for this thing and I found a story I wrote in 2016. You've talked a lot about the low return thing. So, this is an article from Bloomberg in 2016. Turning 30 just got a lot scarier. A coming collapse in investment returns means that people that age today will have to work seven years longer or save almost twice as much to end up with the same nest egg as those of a roughly generation ago. So says McKinsey and Company in a new report, and they said the golden age of the last 30 years is gone. Exceptional inflation-adjusted risk returns in the stock market won't be repeated. Okay, this is 2016. They had this chart. They show like this is, you can't... Since then, the Vanguard Total Stock Market Index Fund VTI is up 15% per year, almost 325% in total. You know, all right, two points.
As you're reading that, I'm thinking it's so insane that the media is so negative today, and then I quickly reminded myself it's always been this way.
There's always been sensational headlines, and when I say always, I mean like in the 1910s. This is not a 2026 story. It has literally always been this way. And I thought like it's so crazy that this is allowed to be printed by legitimate journalists, credible Bloomberg, a coming collapse in investment returns. A coming collapse in investment returns. And the average listener, what does anybody know? Oh my god. McKinsey says back in 2016, this seemed very real.
It was kind of collective wisdom at the time, too. A lot of other people were saying this.
Of course, it was. All right. My main point is, and I was thinking about this this weekend, unrelated to this. So over the weekend, there was a story in Silicon Valley about a company called Instinct, which I hadn't heard of until yesterday. You know about this story, Ben?
I'm apparently oblivious.
Okay. So, over the weekend, Instinct is an AI agent company, and these things are all the rage. They're raising at billion, multi-billion dollar valuations. There's a couple of them. And people were using their machine, their Instinct agent, to book reservations at Fort Charles and other hard to get, impossible to get reservations. And they were pinging Resy, owned by Amex, they were pinging Resy's API like a gazillion times. And Resy probably looked like they were being attacked. Like, what the hell is happening? So they shut it off. They canceled some of these people's future reservations and just booted them from the platform. Say, 'Nope, you can't do this.' And as I'm trying to make sense of what's happening, and it seemed fairly straightforward, but I was thinking about a bigger picture. You have to find a trusted source. Here's where I'm going with all this. And I thought, you know what? I don't really want to spend that much time trying to get to the source of truth here. I'm excited to see what Ben Thompson has to say about this. Right. He will break it down. I will just wait for his take. And I'm proud of the work that we've done, Ben, since 2017 when we started this podcast and were writing long before that about telling people to ignore this. And I'm very, very, very happy that we are a source of truth for a lot of people to push back against all of this that is constantly shoved down people's throats.
I agree that that was the biggest, that was one of the reasons I started writing in the first place because I was so sick of the negativity coming out of the crisis. I couldn't take it anymore. Speaking of which, this is interesting because good lead here. There's a great story in the Wall Street Journal this past week that is very positive and it's not, you know, it's not falling back on the victim stuff. The American dream is alive and it's minting millionaires. So they talk about Dick Portillo, which is kind of funny. My kids, I can't remember what movie we were watching. My kids can't believe that people used to actually, your name is Richard and now you're Dick. My kids are like, how was that a thing? I think there was a comedian who did a bit on this. How was that ever a thing in the past that people, like obviously that's never happening again.
Dicky Greenleaf in The Talented Mr. Ripley, right? Like it's just, it's never happening again. Anyway, so it says talk about how he opened a hot dog stand in the 1960s, didn't know how to cook a hot dog. A century later, he sold the company for a billion dollars, which I still remember the very first time I tried Portillo's. My wife and I, I think we weren't even married yet. We go to visit my brother in Chicago at his condo. We go straight to the bar because we got there late and we're like, 'Oh, we didn't even have dinner. We got here so late.' My brother ran over to Portillo's and got us the spicy Italian beef and brought it back. And my wife and I still remember that to this day. Like, oh my gosh, that's one of the best sandwiches I've ever had in my life.
He talked about, I guess, in his memoir, he grew up poor. He thought he didn't have anything to offer the world. He grew up, his family was immigrants. They lived in a housing project. And the whole point of this story was there's all these people that came from really, really bad backgrounds. Most of the people who are these big-time millionaires now, most of them didn't come from like the Ivy League schools or the East. Like they're just regular people and they interview all these people who started an HVAC company or certain like act, not technology like the way you think everyone gets in, you know, rich these days. So they talk about, they call them these everywhere millionaires. He says there's three million of them collectively worth more than $65 trillion. Most come from poor or middle-class families simply because there are 99 times as many people in the bottom 99 as the top 1%. Among star founders, there are two and a half times as many from poor backgrounds as from the top 1%. Only a quarter of business owners worth $5 million or more inherited their companies. And they go through all these different examples of this. And the whole point of the article is, listen, you can complain about how bad things are or you can bootstrap and try something. Now, obviously, how many people are actually going to win the lottery like these people? I get that pushback, but I love the tone of the article. I agree. I loved it, too. Thank you, Wall Street Journal, for writing this.
And also, this was a moment in time. The last, I don't know, 75 years of people being able to do this, that's in the past because the next crop of 65 trillionaires, it's just inheritances.
So in this piece they talk about these guys who started Dave's Hot Chicken eight years ago and sold the business for a billion dollars. They started it in a parking lot in Los Angeles for $900. You don't think AI is going to help people start businesses easier than in the past? Like...
Totally, without a doubt.
You're right. It feels like a point in time like in the 60s and there you could start in the mailroom at Goldman Sachs and work your way up to be a partner. I agree that is gone. But I think AI is actually going to make it easier for people to start businesses that would have never started a business before.
Fair pushback though. All right. I think we got to chill out with the college stuff. I feel like there's a lot of people on the corner now and it's usually like the intellectual elites who are saying the ROI for college just isn't there anymore. It doesn't make any sense. And there's a story in the Wall Street Journal, Americans without college degrees are having one of the best job markets in years. And it's trying to... I don't know if you saw this chart. This chart is kind of doing a lot of work. So, it's saying in 2026, workers aged 22 to 34 with college degrees face worse relative unemployment than peers with no college degrees. Now, that word relative is doing a lot of heavy lifting here because that's relative to 2003. Okay? You're following me? Now, look at the next chart in the same article. Share of population by employment status and age group. What group has by far the best employment prospects? No high school, high school diploma, or college degree,
It's not even close. The college degree is still worth it. And look at this. This is from the BLS. Unemployment rates for people 25 years and older by educational attainment. And they have it by less than a high school diploma, high school graduates, some college, then bachelor's degree. Now, this has certainly shrunk over the years, which I think is a great thing for people that have less education, but it's almost 5% for people who have less than a high school diploma. It's 2.7% for people without a college degree. This is...
2.7% unemployment is just the normal state of being.
This narrative that we discussed at the top of the show of everything being taken too far, this is a great example of that because I think rightfully so. I don't know when people started questioning college. I'm sure it's been a while now, but it really started to get loud. Hey, wait a minute. Are we sure that 19-year-olds should be making the most important financial decision of their life,
Are we sure that $200,000 is an appropriate price? Because the colleges took it too far and they pushed and they pushed and they pushed until eventually it became insane, totally unaffordable, corruption, whatever, whatever. It is, you know, insane. And over the years, we've gotten to the point where we are now where it's like,
We sure that college even makes sense.
anymore as a construct. Yes, of course it does. Nuance, gray areas, you know, abound. But we're now at that point.
The thing is though, there's a lot of colleges that are totally screwed in the years ahead. And so, so my dad went to this small Aquinas College in Grand Rapids, Michigan. Aquinas. Very tiny. I don't know, 1500.
Say that word one more time.
Aquinas. Like Thomas Aquinas. Like the, you know,
I don't, I don't know what that is. Is that a word or a name or a category?
Have you ever heard of Thomas Aquinas before?
Okay. Look it up.
So, it's a very tiny school and um he eventually was on the board of the school. And it's funny because if I would have went there, I would have got like a 50% discount for being an alumni.
And they, they see, they look at this as pure demographics that we people have talked about the fertility crisis coming. If you ask Claude or ChatGPT the number of 18-year-olds in the US by year and extend it out to like 30 years in the future, the number of 18-year-olds falls off a cliff. So these colleges were looking at this going, we see this coming. The number of 18-year-olds graduating high school every single year goes down and down and down and down. And if you're not like a name brand college, you are screwed. So what this college did, I think my dad said 50% of the people who are there now play some sort of sport.
So they just let everyone play. So they, they, they've had to try to do something to get more people to come. Hey, you can come be in the soccer team or the lacrosse team or the field hockey, whatever it is.
But a lot of these little smaller schools like that are absolutely screwed. And there's nothing they can do unless we just let in all types of foreign students, which seems to be the opposite way we're going, right?
That's an actual crisis that, that's like you can see coming. There was a huge article in the journal that got a lot of attention about Syracuse having like a, some sort of uh enrollment shortage. I think it was, is how they described it.
But I, I, I generally forget the narrative stuff. My opinion on this, and I'm extremely unqualified to have an opinion, although I think I got kicked out of college twice, so I think I know what I'm talking about here.
You also got uh enrolled twice, so you must have done something right.
I was enrolled four times, Ben.
Okay, here's my journey. Uh, Indiana Kelley School of Business as an undergrad, not bad. I did do well in my SATs, although even though my GPA was...
I still can't believe you ended up in the Midwest. That, that boggles my mind.
Um, it was the best school I got into.
All right. Indiana, Ivy Tech Community College, Indiana, Queens College. Enrolled four times.
You say the American dream is dead.
The college stuff, the cost.
You know how much money you saved by going to community college though, right?
That, that's the thing though. A cheaper version. People who complain about the cost of college, a cheaper version does exist. You can go to community college for two years, pay basically nothing, get all of those stupid coursework out of the way, then go, then go to a bigger school if you're really concerned about the finances.
There's like, as an 18-year-old, of course you don't want to do that.
There's all sorts of social pressures and the parents definitely don't. Listen, I don't want to send my kids to community college. What do you...
I get it. But I'm saying if, if that's your one big thing is the cost, there are ways around it. People just don't want to do it.
Yeah. Um, all right. Here's one part about AI that I really don't like, Ben. This is super annoying. The questioning everything aspect of it.
You see a picture, you repost it. Somebody says, 'Dude, that's fake.' And you're like, 'Oh.' Right.
So, you do that once or twice and you're like, 'Hey, wait a minute. I'm not getting fooled again. Fool me twice.' Can't... Right. What's that line in Tennessee?
So, uh, so I've been, I've been taking screenshots and asking Claude, which is really annoying. I don't want to live in a world like that, but that's the world that we live in. So, there was a trailer on Instagram for a movie called Gatorface, and I Googled Gatorface trailer, and sure enough, it's actually real.
So, that sounds like a movie you'll go see.
It's funny because, so remember on this AI thing, when we were growing up and we'd play video games, you know, when you beat, you beat a video game too much and all of a sudden the computer just goes on beast mode and kills you. Like, oh, the computer, you can't do that. Completed this task or I killed this guy or whatever. Um, when we play video games now on our Nintendo, uh, my son wants to beat all the professional levels on the Nintendo sports, you know, you, you swing this stuff yourself and, and you can't, you can't like remember back in the day in Madden All-Pro, you, you can't even gain two yards, right? So by, so it's funny, they don't call it the computer anymore. They call it AI.
