I Will Say This (EP.71)

Episode Summary

Executive Summary: The episode ranges from market history and housing to fees, fraud, and personal happiness. The hosts argue that sharp bear-market rebounds often occur near major bottoms, debate whether QE fueled generational inequality, and conclude housing is mainly a supply problem after the 2008 bust. They also discuss free ETFs, content moderation’s human cost, the persistence of ambition, and several listener questions and recommendations.

Main Topics: Sharp market rebounds and historical context (Priority: 5/5): Michael’s piece on the S&P 500 rallying roughly 18% in 44 days found that similar snapback rallies historically tended to start near major market bottoms, with 2001 as a notable exception. QE, wealth effects, and millennials (Priority: 5/5): They discuss a Financial Times argument that QE boosted financial assets and worsened young people’s affordability, then counter with evidence that younger cohorts have increased homeownership since 2015. Housing supply constraints and mortgage misconceptions (Priority: 5/5): Using YCharts charts, they argue the post-crisis housing issue is largely a supply shortage caused by the collapse in construction and permits, and clarify how mortgage prepayments actually work. Attention, outrage, and internet moderation (Priority: 4/5): A Verge story about Facebook content moderators is used to illustrate how constant exposure to toxic content can be psychologically damaging and how online discourse amplifies strong opinions. Market structure, U.S. dominance, and EMH (Priority: 4/5): They discuss a Credit Suisse chart showing U.S. market-cap share rising dramatically since 1899, and a Supreme Court case that leaned on efficient markets to assess fair value using a pre-deal price average. Fees, free ETFs, and business models (Priority: 4/5): The hosts react to SoFi’s zero-fee ETF launch and note that large asset managers can cut fees to near zero while still monetizing clients through other products and services. Human ambition, unhappiness, and enough (Priority: 3/5): They connect NBA players’ unhappiness, billionaire quotes, and retirement planning to the idea that people rarely feel satisfied even after reaching major goals.

Key Arguments: Quick, violent market rallies are historically associated with major bottoms more often than with false bounces, so current rebounds deserve attention even if they feel suspicious. The alternative to the post-2008 bailout was likely worse; the hosts argue the most legitimate anger is over banks being rescued without meaningful accountability. Young people’s housing frustration is driven less by QE alone and more by a housing supply deficit created after the crash, when construction and permits collapsed. Prepaying a fixed-rate mortgage reduces total interest and loan duration, but does not lower the monthly payment unless the loan is refinanced. Free ETFs are not truly free in an economic sense; firms may use them as acquisition tools to cross-sell other products and services. The U.S. rise in global market share reflects durable advantages such as geography, institutions, scale, and postwar resilience, not just recent valuation trends. People often become more ambitious or dissatisfied as they gain wealth; “enough” is hard to define and may be psychologically elusive even for elite earners. Long-form content and emotionally resonant pieces tend to attract disproportionate attention and links compared with short-form posts.

Data Points: S&P 500 rally duration: 44 days - Time it took for the index to rally about 18% in Michael’s historical study S&P 500 rally size: ~18% - Move analyzed in the “Killer Vs” market-history piece Historical instances: 9 total instances - Occurrences of an 18% rally in 44 days found in the data set Facebook monthly users: 2.3 billion - Scale of the platform discussed in the moderation story Facebook security workforce: 30,000 employees - Total staff working on safety and security Content moderators’ workload: Up to 400 items per day - Moderators reportedly spend about 30 seconds per item Housing ownership change: Largest increase since 2015 among under-35s - JPMorgan chart showing homeownership gains for younger cohorts Housing price comparison: Underperformed inflation and weekly average earnings since 2006 peak - YCharts chart discussed on the show Housing starts / permits / residential construction: Down roughly 20% to 50% - Post-bubble construction metrics remain far below prior levels U.S. market cap share: 15% in 1899 to 53% in 2019 - Credit Suisse yearbook chart on global market-weight shifts UK market cap share: 25% in 1899 to 5.5% today - Comparison cited in the global market share discussion ETFs with very low fees: Almost 20% of ETF dollars charge max 5 bps - Jason Zweig stat cited in the free-fund discussion Fidelity revenue growth: Up 12% - From Mutual Fund Observer commentary on Fidelity’s annual report Fidelity income growth: Up 18.6% - Despite fee compression, profitability continued to rise Fidelity expense growth: Up almost 9% - Used to show business remains profitable even with lower fees Fidelity customer growth: Up 6% to 7% - Growth in customer count despite flat/down assets under management Corporate drawdown statistic: 40% of companies suffer a 70% decline they never recover from - JPMorgan study referenced during the stock-concentration question Jack Bogle savings habit: Saved 15% of paycheck - Personal finance detail from the Bogle book Jack Bogle philanthropy: Donated half of income yearly from age 60 to death - Noted as a striking personal fact from the book

Pivotal Quotes: "Humans don't mind hardship. In fact, they thrive on it. What they mind is not feeling necessary." — Sebastian Younger: Quoted from Tribe to frame the discussion of meaning, work, and satisfaction "The reality is most players don't want to play together. There's an enormous jealousy amongst our players." — Adam Silver (as quoted by the hosts): Used to illustrate widespread dissatisfaction among successful NBA players "The alternative was worse." — Michael / Ben: Their summary of why the financial crisis bailouts, despite flaws, were preferable to letting the system fail

Implications: Listeners are encouraged to see market moves, housing, and personal finance through history and incentives rather than headlines. The episode suggests supply, behavior, and psychology matter as much as rates, fees, or valuations, and that satisfaction rarely comes from “more” alone.