Inflation in Plain English | TCAF 134

On episode 134 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Peter Boockvar and Dan Greenhaus to discuss: inflation, the Fed, stock market bubbles, Tesla, short sellers, international stocks, banning TikTok, and much more!
This episode is brought to you by Franklin Templeton, manager of 70-plus ETFs in the US, including EZBC, Franklin Bitcoin ETF. To learn more, visit: franklintempleton.com/ezbc
More from Dan:
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00:00 - Cold Open
18:41 - Intro
22:20 - Inflation in Plain English
30:33 - How is the consumer?
46:39 - The state of the market
51:58 - Comparisons to the '90s
01:08:06 - International Stocks
01:17:03 - Banning TikTok
01:24:16 - Where are the Tesla buyers?
01:27:36 - Favorites
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be relied upon for investment decisions and is not a solicitation or recommendation to buy or sell any securities. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See additional disclosures: www.ritholtzwealth.com/podcas.... “Likes” or other comments are not intended to be endorsements of Ritholtz Wealth Management, or their employees and are not compensated.
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[@TheCompoundNews]

This episode is brought to you by Franklin Templeton, manager of 70-plus ETFs in the US, including EZBC, Franklin Bitcoin ETF. To learn more, visit: franklintempleton.com/ezbc

[@rafaelzeitunian1673]

In light of the discussion on inflation, actions of the Federal Reserve, and other aspects of the financial world, I can't help but mention an important insight from Dr. Artur Grandi in his book, where he presents a clear formula for revitalizing the financial system. This would surely spark interest in the context of our discussions on the current market situation.

[@ronf28]

I am starting to really appreciate the artful way that you guys start the show casually, sound checks, lighting,... Set up... So smooth, quick and frictionless. 17 minutes in. "you ready? Let's go" lmao

[@Feliz_BroDad]

😂 yea, Why not just wait until the 30 minute mark… add an element of surprise, a little pizazz! 🤷‍♂️

[@bonitasprings34135]

Best Compound show in a long time. Dan & Peter should be regular guests.

[@cliffpeebles9705]

Number 6 on the investment podcast chart? Should be # 1, and by a wide margin.

[@jeffossola668]

Absolutely Cliff!

[@stankiah]

Who's first?

[@michaelskyros8803]

No one as good as this

[@cliffpeebles9705]

@@stankiahGood question Stan. I'll ask Duncan. I'm sure we won't be impressed.

[@youngzoe7492]

Me as well I've yet to find another finance show that is a joy to watch an informative from authentic reliable ppl with credible background

[@tjrozdilsky189]

“your hand is very close to mine” 😂

[@muxi0121]

Saturday morning ritual complete. ☕️ and compound and friends. Another great episode fellas!

[@jedpittman6739]

always great to see Josh and Micheal talking to great guests! Thanks for a great show!

[@js_henderson]

This is my favorite episode to date. Please have the two smartest guys Josh knows back!

[@LRRYFSHRMN]

Another one! Best content out there right now, well done gents (and Nicole 😊)

[@aj8599]

It's Friday let's gooooooooooooooooooooooooooooo

[@ThaboHermanus]

I don’t know why I get so chuffed when returning guests come up to remind Josh and Batnick about Favourites. Dan was like that kid who wanted that particular exam question 😂

[@GimmeThalewt]

JB with the KRS 1 reference. Respect!

[@mikewaller6081]

It was nice to have Duncans’ voice double on the show.

[@rtbull11]

Congrats on the popularity of the show! Well deserved!

[@Bigchuckers]

I often think of all the great nuggets and great info we miss out on from guests because one of the two hosts has to interrupt with a joke, a point of half the value, or some personal antidote. Just let these people speak..

[@dp2120]

It was pretty bad in this episode

[@no_goo]

Unfortunately thats a feature, not a bug of this podcast

[@analysis1957]

You know what is great about this podcast. Fantastic content that makes me think and I can have a few laughs listening. Keep it coming. Great job to you and your staff.

[@lurkingcaro]

Josh should take a limo to the office CNBC royalty 🎉🎉😂❤

[@orioles7023]

RAV4 Hybrids are everywhere. Toyota is raking it in.

[@martytayman9138]

20 minutes of “cold open” may be a bit long.

[@no_goo]

That convo is happening whether they include it or not. Personally i find them interesting and don’t think they detract. I like em included. I could see if it was randomly in the middle somewhere messing up the flow it would be annoying. Easy enough to bypass yourself if it’s not your cup of tea though

[@irwinjones3960]

Speaking from the ground, there was a cry for a wage (minimum wage) increase since Occupy. The pandemic actually gave workers leverage and the common refrain became pay essential (lower wage) worker what they’re worth.

[@teachingjaw]

Great show!

[@arod3295]

These guests are SO SMART

[@vickie8774]

Love the show

[@takeyourprofit]

Very educative show. Keep it up

[@chriswithac408]

WE WILL BE HERE FOREVERRR!

[@Miggy2j]

Hey everybody! Great show

[@Bob-Sacamano]

Hell yea Thomas Gibson is back for another episode!

[@arod3295]

LOVE YOU JOSH BROWN ‼️

[@bluesky2145]

Every time you guys say in plain English what are we talking about I get so excited

[@DannyMacinPhilly]

@13:50 The roof of a car will never have enough surface area to power a car, the physics don't work, barring some new discovery. There will be a need to charge electric cars at a station of some sort, at home or at a stop of some sort. The sun only sends so much energy per square foot to the ground on earth. Maybe it'll get a couple extra miles worth of watts while sitting idle in the sun while you're not using it. Bet on the stations.

[@mr.robertsrelentlessreader8746]

Pushing for top 5!

[@MatthewMS.]

Great show

[@MitchellHighway]

Peter is the reason I came to watch this one, no disrespect to Dan Michael or Josh

[@jimdemerath1032]

Soon to be #1 show😊

[@paulcaldwell9839]

"it's not forever", so true. Thought provoking show.

[@kingfish806]

This show. It just works. There is no need to embellish. The proof is the truth. ✊

[@orioles7023]

Josh, JBL - best chart I've seen. Next day, down 16%. Stock picking is a tough business.

[@JSS5391]

Excellent

[@rparker7710]

Saying that increased wages for lower income workers is causing inflation misses the point. Most regular people (my opinion) are anchored to 3 things. The cost of housing, the cost of a car and the cost of groceries. Those represent the largest expenses monthly for most and they are up dramatically. It's hard to convince folks that the increases in those 3 items is somehow tied to a worker at McDonalds making $5 more per hour.

[@bernieyue]

Cathie Woods been buying $TSLA on 5th and 6th of March. Feb 1st, 2nd, 3rd, 5th and 6th. Jan 26th, 29th, 31st.

[@BitsOfInterest]

1:26:20 DTJB, have you heard of a Prius? You can get any Toyota as a hybrid these days and even better, as a plug-in hybrid. Smaller battery for commute, gas tank for road trips. You can't find these things anywhere under MSRP if they even have them last time I checked (last summer).

[@arod3295]

Best show ever

[@blairberry2189]

Definitely pro ginger ale on the plane Josh.

[@Trumpindad]

We need 2 hour episodes

[@maxs351]

Music is at 17:12 😊

[@lrm21]

You think people are looking at the fact they have slightly more money in their account since 2019. No they are looking at the fact that they have their liquidity cut from peak 2020 levels, while wages, cost of money, services and goods continue to march up. The worst of it is the price of taxes and financial services which provide no improvement in QOL, paying more for health insurance, auto insurance, home insurances, and higher taxes because your wages are up nominally but not in real terms all mean for a quality of life reduction for many Americans

[@joealtamuro]

Do you guys remember when the Overstock CEO in the 2000’s would get mental over the short sellers. ? 😂

[@joealtamuro]

Alex Karp reminds me of Kleinfeld from Carlito’s Way!!

[@shares7832]

“Caterpillar” nice one 😊

[@Muddywaters54321]

Love the cold open. Getting a little long though. Just start the pod.

[@josephmunro7768]

I sold a lot of stock recently to open a business, watching this hurts a little because I miss participating in the market lol

[@BrentSchmurda]

I was on a plane yesterday, you already know i got thr Ginger Ale

[@kibirkshtis]

Zydrunas Ilgauskas :) boy oh boy, guy from basketball capital of the world Kaunas, best greetings guys, never miss a show :)

[@hotknives]

@43:01 don’t reverse repos reduce liquidity in the market? So it’s actually a QT activity, not QE? @TheCompound

[@paulo4371]

You guys money!!

[@hanswhite8620]

The Swedish Riksbank adopted a 2% inflationgoal policy in 1993 after the realestate bubble in the 1988-1991s. Other cbs has since copied it. Thats it.

[@freddonson5436]

Marc Cohodes, the KING of shorts, a GOD

[@BaroloBartolo]

Lmao

[@Carma1035]

Josh LITERALLY picked the market top 😂 JBL got killed in earnings on Friday 3/15 (the day after this video is posted) 1:03:15

[@abitler9445]

Toyota rav4 hybrids are everywhere

[@JamesDell-ni9hp]

Problem with a hybrid is now you have two engines to maintenance. Snatch "what Im a gonna do wit a caravan wit out any fookin wheels"

[@thebarryman]

"If inflation continues to decline, January or February notwithstanding" This phrase is a good example of the wishful thinking bias across financial media. Inflation has not "continued to decline" at all. There was a transitory peak, followed by a transitory crash, followed by a sustained plateau above the Fed's annualized target, followed by a recent climb. At no point was there a downward trend that looked like it was "going to continue."

[@maxs351]

What will that mean to the markets ? 🧐

[@stevecatpatrick8056]

I don't even necessarily know if it's anchoring to pre-COVID levels completely. I would definitely agree a good portion is. But what they are thinking about is cumulative changes in price level versus incomes. AKA the area under the curve or cumulative inflation relative to cumulative earnings compared to the previous projections pre-COVID. So even though it's in line going forward and in the US you guys have positive real wage growth in aggregate, people won't be happy until their individual situation is such that their cumulative income over What they expected previously is At least equal to the cumulative inflation experienced in the past and continuing. Basically to use myself as an example (though I'm a Canadian school teacher and we are getting absolutely crushed by real wage decreases in a way that's not happening in the States) If I knew I'm going to make 90K and then 95 and then a hundred in the next three years in 2019, and contract negotiations we're going to equate to cost of living raises approximately in line with the inflation, then I know I can expect a certain amount of really income and they're more purchasing power. However there was passive inflation in that time, and now there's like 20% cumulative inflation in that period, and as a union member we are currently negotiating to get compensation for those years that have already went by, that we know what the inflation was. Yet there's absolutely no budging from the employer and lots of shady underhanded tactics to end up forcing us to take a much lower than inflation raise or be out of a job on strike and lose 5 years of cost of living increases in lost pay. So yeah now we are pissed and we want to see not just a 20% increase In real wages to get back to our previous purchasing power, But above that for some period of time to pay back the lost area under the curve of lost income for those many years it takes us to get back to the same level. Which is a lot because it's not like we're going to get 20% in one year, Even if we got an amazing agreement that gave us 5% over the inflation rate each year then it would still take us years to get back there so you add up to 3 years of inflation and then three to four years to get back to that same real income and that's 6 to 7 years of lost income that then needs to be made up to 7 years of real wages being higher than inflation after we reach parody such that after 15 years will be back to what we expected to be before 2019. People may not think of this so explicitly as someone who is a giant finance and econ nerd like me but they feel it and that's exactly where we want to be. And the only way to square the circle of getting these real wage increases without causing massive increases in price level and inflation that would wipe them out is for labor to gain a larger share of the income. Labor knows that they're going to be left holding the bag and ultimately paying for it if that is not the case. So the only way for labor to gain a larger share of GDI is through shrinking profit margins, and by absorbing all the increases in income due to growth and productivity. Because growth and productivity is too low to equalize the area under the curve lost in a decade so profit margins would have to shrink. Ultimately this is which is frustrating that your conversations don't even consider that it's not an impossibility to think that prices could be relatively stable with rising wages. What it would need is to have a growing share of GDI go towards labor via the 2 to 4% growth due to productivity gains plus a 2 to 4% drop in profit margins would add up to the 4 to 8% growth in labor income without inflation. Now of course if the money is going into the hands of more people there's going to be an increase in velocity of the money supply which will be inflationary on its own, But labor would still gain in aggregate.

[@mitchRaph10]

just sounds like fake hate in all honesty. love the show

[@juliemcgowan9810]

shadow stats explains inflation

[@jasonchen-alienroid]

Reverse repo is a damper to monetary tightening. 2022 drawdown was part of constraint financial condition. It stopped tightening when rates are attractive enough to pull from reverse repo. tldr; the concern is when repo run out, financial conditions will tighten. Now the fed policy seems to pick between GDP expansion vs inflation this year. so...

[@smitd4ty]

Great show as always! This market feels frothy and froggy... Josh's rift on Barbie's Oscar snob is so spot on!! Completely ridiculous and unnecessary imo

[@sergeyyakubovsky7259]

AG1 the new Herbalife?

[@mitchRaph10]

if shorts had any money left, they can be right eventually

[@ryanweaver7971]

I will provide a market difference between now and both the late 90s and 08’ crash. Now we have high frequency market trading and the market place is thousands of times more efficient.

[@GM4ThePeople]

"Dan Greenhaus" is an anagram for "Endures Ghana", whereas "Peter Boockvar" is an anagram for "Covet Pork Bear". o/

[@adamj8385]

$RH - Totally agree with Josh, who the hell is buying 27k sofas???

[@RoyalFizzbin]

Some people are well-off, and some people are downright wealthy. I think sometimes if we’re working a daily grind it’s easy to underestimate how many fall into that latter (downright wealthy) category. You should see the money that gets thrown around in Lower Manhattan.

[@jasonchen-alienroid]

I thought the issue is that top 20%'s consumer spending is increased that covered the bottom 80%'s reduction in spending. Second is that, yes some lower income are still spending, but they are now working 2-3 jobs.

[@mitchRaph10]

PLTR is up nearly 200%

[@tygorton]

"Coke" was used as a metaphor for traders using crazy margin, guys. Do people not understand metaphors anymore?

[@theonlycaulfield]

He is also the opposite of a run of the mill country club CEO, who worryingly complains about short-sellers. The guy has been running Palantir as a founder CEO for over 20 years. This isn't his first time in the ring.

[@Michael-tz7tj]

"None of the clocks have any hands..."

[@TonyTrupp]

Short and Distort scheme are real. They just tend to focus on smaller companies where it’s easier to force the price down with BS allegations.

[@jluther1755]

New Sneaker shopping episode today Justin Timberlake tiny desk concert yesterday and Of course TCAF.. weekend off to a Booming Start. JB's Downtown Dog Pound 🐩 Poodle pack Woof 🤙

[@user-pz8db3oh9y]

cringe

[@jeffossola668]

Poodle back woof? Jluther my og but Pound Nation needs more flair

[@jluther1755]

Don't mess with the poodle pack 🐩 Remember we Are From JB's Downtown Dog Pound..

[@no_goo]

Sup! First!

[@mikeman8913]

China currently does that. US companies have to share their technology with the chinese government to do business there....

[@sergeyyakubovsky7259]

The parking spot will charge your ev

[@cliffpeebles9705]

Yep, there is no free energy.

[@Reutzel507]

Have Uneducated Economist on your show. He will give you a master class on the fed

[@hhn0505]

Peter has been consistently predicting doom and gloom since I can remember. I listen to determine how dug-in he still is to fade his views.

[@meta4kl237]

I spent 37 minutes. listening to these guys say that inflation is still experienced by the average consumer because prices went up so much over the last 3 years and are still high?

[@RoyalFizzbin]

I think they were saying that consumer experience on the ground is painful due to the last three years, but average increase over a longer duration makes the inflation look more gradual.

[@robertcrump8729]

"Twenty Days in Mariupol" is the best movie of the year. Journalist risked their lives to bring the world the true stories of the war. And America thinks Barbie is one of the best movies of the year. Very sad commentary on our priorities.

[@orioles7023]

trivia item - these days, Floyd Norris is teaching economics at Johns Hopkins

[@robertcrump8729]

The big question nobody is asking why didn't US tech companies develop Tic Toc first instead of China?

[@nicklongo2939]

If you really want to sell the AI narrative, do the same thing they always do with fusion energy. Project unlimited productivity gains costing less than the cost of breaking out the accounting.

[@cliffpeebles9705]

The rate of inflation should cause the stock market to rip, because bond yields can't keep pace. How else does a person hedge inflation?

[@garyrogers6977]

Not with the Russell 2000, for sure

[@cliffpeebles9705]

​@@garyrogers6977Gary, the contrarian in me says Mr. Russell is holding the best hand right now.

[@timharbert7145]

Long TIPS? Short longer dated treasuries or corporate bonds?

[@michaelskyros8803]

Bitcoin

[@doubleclick21]

Take on fixed rate debt, pray you keep your nominal job and/or investment income (both inflating) to cover the (diminishing real) payments.

[@miaa7097]

The information and truth will come out. Even if you take Tic Tok 😊

[@Parture]

It's amazing these guys don't really know what's going on. Market cap to GDP, P/B, is through the roof, even more than 1929, 2000, 2008

[@stevenbond4637]

they know where the Buffet indicator is, I heard Josh and Mike discuss it before, they mentioned globalisation briefly, that's important cause the indicator is US only, so if I buy a can of coke here in Ireland it doesn't register on the indicator for US GDP, and my parents couldn't buy coke here in Ireland when they were young. US overseas revenue is about 1/3 of all sales now (down a bit lately to be fair) - it was a lot closer to zero % overseas in 1929. Switzerland Buffet Indicator is bananas, like 250% maybe, because Nestle is so big in their market and sells 99% it's chocolate overseas. Globalization is a big factor here but there are others, such as not including bonds, no account of changing tax rates, interest rates, quantitative easing messes it up no end etc. etc. Is market overvalued, sure, can this indicator make a fair comparison between 1929 and 2024, I really don't think so. These compound lads are doing alright for themselves, I do think they have a fair idea of wha't going on.

[@Southsidelion514]

For those reading, Reels and Stories with any Palestinian content is heavily surpresssed, unlike TikTok

[@rod910]

1776 the year the declaration of independence was signed

[@noun1986]

Large percentage gains of close to nothing is still close to nothing.

[@js_henderson]

FWIW, Jabil (JBL) was the top loser yesterday on weak earnings + guidance.

[@bryanmartin6984]

Shorts need to disclose the same as longs! Then they'd be no problem. The rules aren't fair and they create a playing field that can be nuked by shorts!

[@willisaddison2694]

Oh hell no. Consumers Not fine

[@DJHenny2]

This show could be awesome. If you cannot stop interrupting your guests, please give them a mute button so that they can finish their thoughts. Your guests are too nice if they are not complaining about the constant interruptions.

[@puro52]

india has a long history from the britts with stocks. india will be the best investment for the next coming 10ys. ez.

[@jonjone661]

Rules about foreign entity investing in India, not a direct investment most can make.

[@themusic6808]

Palantir actually isn’t a bad company and if they get S&P 500 inclusion it should wade off some of the short interest but shorts love to bet against companies that have massive cult followings from retail investors (ala SoFi, Palantir & Tesla). I do hold Palantir and am long term bullish but not a huge fan of the fact people with day jobs are betting their life savings on it and making KZbin channels dedicated to it. Having a founder & CEO like Alex Karp is enough to drive momentum up or down lol