Episode summary
Is the AI Trade Over? | Animal Spirits 439
Animal Spirits
· · Hosts: Michael Batnick, Ben Carlson
Summary
The conversation centered on whether the AI trade has really ended or is just going through a healthy reset. The host argued that the current selloff is more of a correction than the end of the cycle, while a guest pushed back slightly and said there was real euphoria over the summer around OpenAI, Oracle, and the hyperscalers. Both agreed that skepticism is now widespread, especially after the huge run in speculative names and the backlash around AI jobs and power costs.
They spent a lot of time on market drawdowns, noting that meme stocks, quantum computing names, Oracle, and other high-beta tech names had been hit hard even as the S&P 500 was only down modestly. The guest also argued that media skepticism is much stronger than in the late 1990s, which may be capping the melt-up but could also keep the market healthier. They also discussed how rare long bear markets are, whether the economy really needs a deep recession to reset expectations, and why rapid recoveries may now be the norm.
The second half broadened into private credit, crypto, housing, and consumer strain. Mark Rowan’s comments on private lending were held up as unusually candid, while Blue Owl’s response was criticized as evasive. The pair also debated Bitcoin’s weak follow-through, the possibility of a 50-year mortgage, and the slowdown in first-time homebuying, with the guest warning that some widely cited housing data may be less reliable than people think.
Key takeaways
- The host thinks the AI selloff is a healthy correction, not proof the cycle is over, even after Oracle and speculative names fell sharply.
- A guest said AI euphoria was real in the summer, especially around OpenAI and Oracle, but believes skepticism is now limiting the melt-up.
- Mark Rowan’s framing of private credit as a rotation out of equity was praised as honest, while Blue Owl’s stock defense was treated as evasive.
- The discussion suggested long bear markets are rare, but fast recoveries and sharp drawdowns may now be the normal market rhythm.
- The host questioned whether commonly cited housing data on first-time buyers is reliable enough to support the “millennials are screwed” narrative.
Notable quotes
“there's no euphoria in this this market. This is like a kind of it feels this year like a joyless bull market”
“if that was it, that then this is that was the worst bubble ever because we didn't we never got the exciting part”
“I think the whole everyone there's so much skepticism about like gosh this is this is a bubble”
“The rotation into private credit is a rotation out of equity”
“Everything changes all the time, so experience is of little use”
How the episode opens
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Visit noven.com/future. To learn more, investing involved risk, principal loss is possible. Welcome to Animal Spirits with Michael and Ben.
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Uh, I got to take here. Um, so the mark market is rolling over. The speculative stuff is getting dinged pretty good.
I I had this take here before this stuff all kind of started happening. Um, there's no euphoria in this this market. This is like a kind of it feels this year like a joyless bull market.
And so it doesn't like the for all the bubble talk and everything like this is going to be crazy. I don't think we ever got to a euphoric phase. So like I I disagree.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai skepticism
- bear market outlook
- bitcoin crash
- real estate demand
- private markets
Companies and tickers mentioned
- OWL
- Blue Owl
Watch the episode
Watch “Is the AI Trade Over? | Animal Spirits 439” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Animal Spirits, this episode and its artwork belong to The Compound. Octagon is not affiliated with the show; this page is an independent summary.
