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DECRYPTED: Episode 21 - War, Robots & Wall Street
Recorded: March 4, 2026 Duration: 1:01:31Space Recording
Full Transcription
good morning good evening and good afternoon to everyone joining us from around the world
for another episode of decrypted but it's not just an ordinary episode today we have a very
very special guest mr cory johnson we'll go into you we'll uh we'll jump into all things cory in a moment but before we get to him
saving best till last jack how you doing my friend hey i'm good i'm good i you know i'm
pumped like we stan and i are like we're like armchair quarterbacks talking about the market
we're tech builders we got like a real expert on the show today. We're going to have some fun.
And like I say, I say this all the time, Corey, this is my favorite time of the week.
I drink my coffee. We just roll. How many cups are we into at this point?
One and a half. Same spot, one and a half here. I told you this earlier this week,
I've doubled my coffee intake because I read about this study that said that if you have two to five cups of coffee a day, you're 30% less likely to have dementia.
And that sort of helps to remember, I guess.
The problem is I keep forgetting to have the second cup.
Maybe it's too late, but I'm going in for number two.
Here we go.
Okay, here we go.
Rock and roll.
Oh, yeah.
And always Stan, the man. How are you, my friend? Going in for number two. Here we go. Okay, here we go. Rock and roll. Oh, yeah.
And always, Stan, the man, how are you, my friend?
Yeah, lots of work, AI-related mostly.
So very busy.
And, you know, definitely the war is kind of a new subject which interrupted lots of things.
100%.
Tell us, have you lapped us?
How many cups are you in today?
Actually, you know, I listened to this guy, Huberman.
I think you also listened to him, Jack, the podcast.
Stanford guy.
Everyone loves it.
So he says that basically you have to drink coffee in the morning because the half-life of coffee in
your system in your biological system is like six hours it's 12 it's just to get out yeah i usually
don't drink coffee after like it's all after lunch now in in lisbon so i don't drink coffee after
lunch you get better sleep you know what i mean like i i i kind
of learned that i think it was in my early 20s and i'd just be four o'clock ripping her never coffee
and i'd like sleep like and then i kind of had this rule of like always like 2 p.m you know
no coffee after 2 p.m it that does it for me I break it. You know, it's better even like to not
drink any after lunch, I think. But after lunch, sometimes it's good to have one more serving.
And as an ADHD individual, I drink coffee and I just want to go to sleep straight away. So,
you know, that's that's always a great one. I remember when I first started working together,
this was like 2018.
We're interviewing this guy, Chadwick, who came into the office.
He became one of our first US hire, our product manager.
And we're like, hey, do you want a cup of coffee?
And Stan and I had already had like two.
And he's like, oh, I guess.
And Stan's like, yes, we're both addicts.
It was hilarious.
Good time, Stan. We're going around the horn too
much we got to get on track okay let's let's go for it 100 100 well uh jack why don't you give us
um a little a little introduction a a game of thrones style uh repertoire of mr cory johnson
drone style repertoire of Mr. Corey Johnson. Well, hey, so as I said earlier, I alluded to this. We
have like a real someone who does this for a living, not like, you know, Stan and I, we love
pontificating here and there. But Corey's got a ton of experience. Corey, you got to tell everyone
about yourself, but I'm going to brag a little bit like, you know, chief market strategist at
numerous companies. We got to hear about what you're doing now.
Also was in crypto for a while,
chief market strategist for Ripple in the early days.
Also like the man at Bloomberg, like head anchor,
did all these things at Bloomberg, editor at large,
really cool stuff and did a bunch of other things.
But one of the coolest things I think Corey did was founder of slam.
Cause when I was a kid, basketball,
I used to love this magazine and like kids would just run to go buy this magazine.
This is like pre-internet era, right?
Pre this magazines were everything.
And Corey started that like so cool.
Wasn't really pre-internet. The internet did exist. I will say that when we were everything. And Corey started that. Like, so cool. It wasn't really pre-internet.
The internet did exist.
It did.
I will say that when we were starting.
They highly utilized the internet.
No, even sending emails to my freelance writers and stuff wasn't always a guarantee.
They didn't all have email.
That's what it was like.
Yeah.
Yeah.
It was getting started.
It was kind of like crypto is now.
It's kind of like stable coins. Like, kind of like stable coins, like interview 10 people.
Maybe one of them has stable coins.
Right.
In 10 years, everyone's going to have stable coins and not really even think of it as stable coins, hopefully.
Yeah, my my career has sort of had this three part track where I was I started off as a sports writer, started, you know, worked at Sports Illustrated, wrote for Outside Magazine, other magazines as well.
Wrote kind of long-form pieces for magazines and got some attention for that.
Then started Slam Magazine and helped start Vibe Magazine with Quincy Jones.
Then left to go start thestreet.com with Jim Cramer.
I'd always kind of dabbled in the stock market on the side and helped to start the street.com writing about
Wall Street. Pretty soon I'm writing about technology. And I came out to California and
was, again, working as a journalist, helping to cover the dot-com boom, which was all happening
at that time. And I went to CNBC, where I was their first technology correspondent, the first
Silicon Valley correspondent for CNBC. Then went to work in hedge funds for a while thought i was retired got divorced got broke had
to go back to work so i went to uh so i went to bloomberg and helped start all of their west coast
television and eventually radio and conferences all around technology um and now then i went then
i left to go to ripple and uh i have had the title chief market strategist i've kind of just jumped
from company to company with the same title um uh which is not
to be confused with and yet is often confused with being chief marketing strategist which i
got nothing to deal with the notion is of this intersection of telling the stories of of of
companies and technology uh both as it relates to the financial markets and also as it relates to the
markets in which these products are bought and sold so it's a so what a time i mean you know
jack we met when I was
working with BrainTrust and you were launching Scale. We were launching BrainTrust and deep
into the crypto world. But I think this excitement around crypto, the excitement around AI coming
kind of right after that, it's been a crazy time. Yeah. It's been wild. Been wild. We're
going to get into that. We're going to get into the AI piece. First topic we're going to get into is like, everyone's been watching. Obviously,
there's a war happening. There's a war. Okay. That's primary news. We're not going to talk
about that. We're going to talk about the impact on the markets. Okay. And all I got to say is,
I've been incredibly surprised and it gives me faith in markets because when markets are too
damn predictable, it's boring and then just bad stuff seems to happen. When things go the way
that you wouldn't think it goes, the game's interesting and you start seeing different
truths, I think, and you start learning new things. And as soon as everyone's an expert,
markets kind of get corrupted in a way.
So most people don't like normal people don't like volatility for good reason.
But if you're involved in the markets, if you have a viewpoint on what the value of some things ultimately are, you love volatility.
You love it when your favorite thing gets goes on sale.
You love it when you get rid of your least favorite thing in your portfolio at a higher
price. So volatility can be great for someone who's an investor.
Yeah. Yeah. So what's going on?
Because like things went up and then it went down.
Then today things are ripping like Bitcoins back in the 70s again and equity
markets are booming. Oil went up and then it's down.
Actually, it's stabilizing.
Like, do you have a take on what's happening with the markets right now?
You asked me for my first controversial Stephen A.
Smith. Yes, by the the way be as controversial as
possible and this is not financial advice okay i don't give financial advice we are just my portfolio
is sitting on this screen over here and there's some there's some red on this screen um uh so you
know we want to take my financial advice but here's my here's my hot take and i'll defend this
bitcoin is not a store of value it's a store of speculation
it does not trade like a store of value it trades like right now it trades uh the more of its risk
on when the markets want to take flyers and things that are just going to go up for no good reason
they buy bitcoin and bitcoin prices go up when there's concern and worry in the markets the
thing that bitcoin is supposed to save us from that's the opposite of what actually happens in
real life is the stock.
The value of Bitcoin goes down.
I was the stock goes down because it's just a wiggly line on the screen.
And that's kind of the point.
This notion of investing that is corrupted investing writ large is that the value of something is the wiggly line on the screen.
And Bitcoin is the most extreme example of that i think where you've got uh
currently and it has kind of persistently been that for quite a while it is a store of speculation
not a store of value yeah i i think we if we we talk about this a lot and i think we agree as well
i would again you know from our talks i'm i'm gonna say stan and ben probably also agree like
my feeling is uh bitcoin has got its ass kicked by gold and silver in the
store of value game.
And this whole narrative,
and I was on this,
I'm on the,
at least like chat groups of all these people that are doing,
you know,
really know what they're talking about.
This guy's saying,
the dollar is going to do this and it's going to be bad for Bitcoin.
And I was like,
Hey,
that narrative is dead.
Like people don't buy Bitcoin anymore to hedge against inflation.
Okay.
When there's going to be inflation, they want to buy Bitcoin because Bitcoin is going to go up.
You know, it's not, you know, people sell gold when like equities are going to rip,
but you want to hold your Bitcoin or buy it when you think there's going to be more,
you know, interest rates are going to drop, i.e. then inflation is going to, you know,
probably go up a little, right?
Like the world's different. And it is, I think it's a unique store of speculation because it's the amount of volume
traded. It's not like, hey, this highly speculative thing going boom, boom, boom.
Right. It also has no intrinsic value other than the value people see.
The value of Bitcoin is the price the next person will pay.
So, all right. So let's add to that.
Let's just might as well throw some more gasoline
on this fire. That there is an early criticism of crypto that I think still holds in some cases,
that it's a solution in search of a problem, right? And then those of us involved in crypto
for a long time, which is everyone on this chat today, has heard this and been criticized personally
for this belief that it's a solution in search of a problem.
But if there were a true, if the problem had been found, if Bitcoin or fill in a blank XRP,
ETH, whatever, had actually solved some of the problems that we all think it will eventually
solve, it wouldn't trade the way it trades with such crazy speculation.
Yeah, I'm going to push back a little bit and say like my,
my feeling is I think we just haven't had a chance to like get out of the
gates yet properly. And there's just been all these like stops and stops.
And you know, I went to the,
took my kid to the dentist yesterday and the dentist is like, Oh,
you can avoid a $300 charge if you pay directly with your bank account instead
of your credit card. right? These things happen
constantly. There's so much loss in the financial rails. And that's really, I think-
Your dentist didn't say, just give me Bitcoin.
Yeah, yeah, yeah. And crypto too-
We're not there yet.
Pretty varied. And also I'll say, one thing I will agree with the crypto haters on is
this grift and quick, easy money stuff in crypto
has killed, has really hurt real builders like us at scale because we're really trying to build
things and solve real problems. And then it's always like, oh, this bright, shiny object,
this meme coin, this NFT thing, this- Melania coin.
Yeah. These things, I think, kind of take focus away from, hey, we're trying to solve real
problems. We think AI is the next frontier where crypto is going to make a huge impact.
Again, it's because of more efficient money rails and, you know, the security, the instant finality, all these, you know, value props.
But Stan, what do you think? We got to get Stan chatting here. Coming back to the kind of the computer science, I think when Satoshi Nakamoto created Bitcoin,
the A or whatever, you know, the organization, I believe it's CIA, by the way.
I believe strongly it's NSA.
I cannot confirm or deny that.
When they created it, I think they had a choice, you know, on the inflation side.
I think they had a choice on the inflation side, and they made it very rigid in a sense that just made a total supply, finite total supply.
So Bitcoin is way more rigid than gold, for instance, because when the price of gold goes up a lot, then there's lots of gold in this planet, which is kind of hard to mine.
But with a higher price, they start mining it.
So the gold is kind of limited on the way up because at some point people just start mining more gold.
But then because it's kind of limited on the way up, it's also limited on the way down.
it's also limited on the way down.
So it's more flexible.
So it's more flexible.
And I think it does not have such a huge, huge, you know,
amplitude of going up and down.
And Bitcoin, because it's so restricted,
I think it was probably a mistake for Satoshi Nakamoto
to make it so restricted.
Because it's a finite supply.
It's almost like, you know, like real estate in Manhattan.
Yes, it is actually like very, very expensive, but because of a limited supply, you have
this like huge price swings, it kind of adds to speculation.
So I think that that's one of the reasons Bitcoin has the swings, is that the model,
they made it too restrictive.
And it kind of can't like basically send...
You mean too few coins?
Stan, you mean just too few tokens out there?
Yeah, I think Satoshi Nakamoto could have made it in such a way that it's kind of unlimited
supply, but it kind of takes a fixed amount of computational power to
to mine Bitcoin they could have made it like like just basically equal to computational power and
then the supply would be unlimited but then it would be linked to the computational power and
electricity and then you wouldn't get so much of swings because if the price would go
too high they would just mine a hell of a lot it would just always stay down it'd be consistently
not very valuable like my portfolio and then it's also for transactional currency i mean you do need
to have inflation that's another thing i
think like satoshi nakamoto they they wanted it to be a transactional currency for people to pay
but it's really hard to pay with deflationary currency because people tend to tend to hold to
deflationary currency you have to like have lots of inflation to stimulate people to to start paying the consumers to pay or it
has all of the things the feds targeting two percent I mean that you know some inflation
is necessary yeah yeah there's like this famous experiment where you know you have like a
cooperative of people that want to babysit each other's children, and they create this virtual currency, not virtual,
just like a paper slips, and that denote this babysitting hours.
And then it turns out that without inflation in the system, people tend to hoard these
pieces of paper, and no one actually babysits anyone.
So actually, you do need to introduce inflation for the economy to work.
So that's another thing.
Interesting study.
We got to find a link to that for people.
That's like really interesting
behavioral economic perspective.
But I got to tell you, if that happened,
if there was more inflation
and not a finite supply,
the Bitcoin people would have
to rewrite their religion.
It's not like, let's be honest,
like these maximalists, these people are like cultish and that rewrite their religion. It's not like, let's be honest, like these maximalists,
these people are like cultish
and that's their religion.
There shall be,
when God created Bitcoin,
God created 21 million and no more.
Yeah, yes.
I love Bitcoin.
I'm not trying to make fun of the Bitcoin people.
Yes, you are.
But I am a little bit.
And maybe for good reason.
The maximalists.
Not the normal Bitcoin people, but yeah, the ones you see on, you know, parroting the religion.
But Corey, hey, what's going on with the war? Like what, you know, war risk, war can do all sorts of things to markets. Is there kind of like some best frameworks people use when they think about this stuff?
Yeah, I think there's a few things.
How to start with that?
I mean, the most obvious issue right now is the availability of oil through the Straits of Hormuz
and how effectively Iran is going to be able to block the Straits of Hormuz.
If the Straits of Hormuz is blocked for,
call it two or three weeks, mostly oil experts out there and the economic experts are saying it's
going to have tremendous damage on the global economy, that we're going to see oil prices
that were at $40, $50 a barrel for much of the last, call it two or three years, upwards. Right
now, Brent Cruz, I think, is trading above 80. You could see those prices get even higher if this lasts for a while.
One of the reasons the blockade is so effective is not because they can hit every ship that goes
through the Straits of Hormuz, but because the insurance companies won't insure them and are
telling them that, hey, if you want to take a flyer and try to zip through the Straits of Hormuz
with your oil tanker and you get blown up, we're not going to cover you.
Or your insurance costs will be 10x what it was last week.
And so the ships are staying in all the ports of the Straits of Hormuz in all the countries out there and not willing to run the gauntlet, the literal gauntlet there.
And so, you know, insurance costs are the principal governing factor to the world economy
right now. So now you've seen President Trump has said all kinds of things that are all over the
place. And this might be a shocker and a controversial take. Not all of them seem to be
well considered. And maybe some of them aren't true. But there's a notion out there that he has
said that perhaps the U.S. government, with the backing of the U.S. Navy, will both
create insurance. We've heard that from Scott Besson, that that's a possibility of the Treasury
Secretary, that they will create insurance or create U.S. government insurance, backed by an
army, backed by a Navy in this case, to help ships get through the Straits of Hormuz. Again,
I don't know how much, this clearly was not a plan of theirs on Saturday or, you know, Friday night,
Saturday morning. Is it a plan now? It doesn't seem to be, but it could be a linchpin for the global economy.
It's like it's 20% of the world's oils coming from there and 20% of the natural gas. So it's
significant. All I got to say is we survive with incredibly expensive oil.
Well, our oil is the same price our gas taxes raise the
price of gasoline and then our our climate rules about uh getting pollution out of the air i mean
i'm old enough to remember when you couldn't see through los angeles for the smog they fixed that
with different blends of gasoline or the change during the year and then the refineries are
charging more and more money to change that they change over every year from a summer blend to a winter blend of gasoline.
And we get less smog and higher prices.
OK, whatever.
But it is important to recognize that the effects of this are very different in different parts of the world.
Qatar, for example, is the largest producer of liquid natural gas.
in Ukraine, the consumption of natural gas, of liquid natural gas, has been – there
is a growing dependency in Europe for liquid natural gas. So if you can't get liquid natural
gas from Qatar, then Europe is suddenly seeing that liquid natural gas prices jump by 85 percent.
It's useful that we're going into a warmer season right now, but that is a great concern uh in in some ways in the oil markets
the chief beneficiaries of this right now is starts with russia and add to that saudi arabia
because they've got a pipeline crossing the country for now which is surely a target for
the iranians so it's it's uh this is this is going to get weirder before it gets uh if i'm
hearing you correctly like when you think there's a war, a war doesn't actually
necessarily have any up or down indication.
It's all about like, what are the variables of that war?
And this one it's oil.
Cause maybe some things will happen and things go like, cause I don't know why Bitcoin went
Like it doesn't make any sense.
I'll stop you there, Jack, before you go any further.
Yes.
There are horrible implications because people are getting killed yeah yeah no children of children all of this with the caveat there's
this whole thing about war and it's bad and you know we could talk about the politics of it like
for three hours and um yeah but i'm just talking entirely about market impact because obviously
loss of human life wars are much bigger issue than a market but
so in the markets yeah it's there's there's all kinds of things going on right now i think so
that that's maybe my second point is is you know so there's the the mechanics of oil and there's
the economic um outcomes uh that that are variable and we're
trying to measure that and figure out where the opportunities lie as investors and what
to take advantage of and what problems to get away from and I'm trying to figure that
out on this screen right here very excited about what's happening with flow tech right
now I only own again I'm not I don't give stock advice but I only own 11 stocks that's
it so I'm I do a lot of research I try to give stock advice, but I only own 11 stocks. That's it.
So I do a lot of research.
I try to learn everything I can.
I try to know the management.
I try to know the products.
I try to know the customers.
I visit companies.
I visit their customers, and I work hard to understand this stuff.
And there are only two oil and gas names in this, and one's going down, and one's going up with this war.
down and one's going up with this war so go figure um but the other thing i want to say is that you
So go figure.
know the markets tend to under react to huge surprises i know there's a belief that the
market's going to overreact but i think the opposite happens i think when there are there
are black swan events the market initially tends to underreact because it doesn't know what to do
with it because traders don't want to act surprised
and and you know we may we've seen china for example um react to this many many months in
advance building up their stores of oil um in the ways that we've never done the u.s did not fill
its strategic petroleum reserve but china uh did the equivalent in china um but the financial markets
have i would say underreacted to the risk that has been introduced in China. But the financial markets have, I would say, underreacted to the
risk that has been introduced in this market, including the VIX, what's known in Wall Street
as the fear gauge, which essentially measures volatility. The volatility in this hasn't spiked
that much given what's going on. But the range of uncertainty and outcomes is through the roof.
And I think the long-term effect, you know, when the great financial crisis, it started with a drip and, and there were, there were some seismic failures of
hedge funds, eventually failures of banks, but it was, it was a slow roll in 2008 that, that,
you know, even starting in 2007. And I think what we, I'm not saying that's where we're headed right
now, but I'm saying the, the reaction of the markets is not the first few days reactions of the financial markets yeah
the markets have oh sorry go ahead go ahead i was gonna say the markets have kind of been on a
downward trend for you know a couple of months now would you are could you potentially suggest that
it's already priced in that you know know, everybody, no, definitely, definitely not.
So I fundamentally don't believe that concept of things being priced in, right? Like even as
we've gone more and more towards passive investing and index investing, and that's the best thing all
investors should do is just plow money into your S&P 500 index, the same dollar amount at the same
intervals, whether it's every week or every day or every month for that matter um but i which is to say the market's getting dumber right it's just
buy everything at the same pace and there's an increasing amount of money percentage of money
in passive what they call passive investing but i think that's stupid uh outcomes are different
two companies selling the product the same product are going to see that one wins and one doesn't
and i think over the long term the the ability to pick winners and losers is going to
matter a lot. But I also think that surprise is never priced into the market, almost by a
definition. And this is a kind of black swan event that the market hasn't reacted to a lot yet,
but I think over time it will. Yeah, Corey, I got to say, one of my beliefs has always been when
people are like, oh, it's already priced in. And I'm just thinking like that's a sign of such a broken market.
It's just like that means we have all this consensus, all these people in advance and like
manipulation. And with crypto, there's been so much of that. And like this thing does this and
everything does this or the thing goes up and then also the news is released and it goes down.
And it's like that's that's broken.
It's efficient market theory.
I'm just I just I just I see it not happening all the time.
You know, another thing that I in my financial career that I've focused on for a long time is finding fakes and frauds and failing businesses and shorting those companies.
frauds and failing businesses and shorting those companies.
And I don't talk about those publicly because those companies,
especially the frauds, have every incentive in the world to spend most of the
money they're stealing to shut me down and to silence.
Yeah, it'll sue you.
That's what they do.
And they do that a lot.
And so the community of short sellers does not talk about their shorts for the
most part.
And you can count me in that community and you can count me not talking about
them.
I mentioned I own 11 stocks. I'm currently short about seven stocks as well. And it's a small
percentage of my portfolio, but it's a huge percentage of my work. But efficient market
theory fundamentally doesn't believe that fraud exists. It doesn't, you know, it sort of says the
market shakes these things out over time. But I see full-on frauds, companies that don't have the products they say that they're selling,
companies that are not doing as well as they say they are doing.
I see accounting restatements and accounting trickery to make numbers look better,
to get the stocks up so the insiders can sell.
And it happens every day.
Oh, wow.
Okay, Stan, what do you think?
There's been a lot of things where, you know.
Another, you know,
what you guys said, another twist.
There is this, like, game theory,
and there's this famous game of chicken
and, like, two cars, you know,
like, two guys, like, in America,
you know, like, driving at each other.
1950s America.
Yeah, yeah, 1950s America, exactly.
The guys.
And so there's actually this kind of one strategy
how to win the game of chicken.
Basically what you do, you take the steering wheel,
you basically like rip off the steering wheel
and just like throw it out of the window.
So there's a guy sees that you can't,
you cannot turn because you just ripped off your steering wheel.
And the guy just like basically has to lose them because you're, you're crazy.
It's not like who's tougher. He's like, I'm nuts.
It's not like who's tougher.
He's like, I'm nuts.
Do I have to show I'm equally nuts? I'm fucking turning.
I'm fucking turning this thing.
And so the point I'm making is that in some cases,
being like totally crazy actually is a way to win like this game of chicken.
And in this particular case, there is this kind of a thing where there are huge stakes.
On one hand, basically, they're disrupting the entire economy of the
world. So the huge stake
on one hand and huge stake on the other
hand, which is like they're fighting for
their survival. So
it's this game of chicken.
So in this case,
I think basically
it may have been a mistake
to start, but
now it's almost like this only way to win this now is just to basically get out of the – but don't have a steering wheel, meaning that now the only way to actually fix this is just basically win the war. And so people may be thinking that current U.S. administration is crazy enough to just, you know, they'll win it by any means.
Yeah, they could be faking being crazy or just actually be crazy.
But that doesn't necessarily lead to the outcome.
Either one might not lead to the outcome that you want.
And the risk becomes a lot greater.
Like the risk is big lot greater. Like the risk, the risk is,
the risk is big in a game of chicken. If that like to choose to play a game of chicken is stupid.
Yeah. Yeah. Yeah. Yeah. Well, I mean, I imagine European governments are just,
I don't imagine I see it. They're livid because like you said, their oil, their natural gas costs might go up 85%, you know? It's like, that's not good for your economy.
And you're just sitting there, like, all of a sudden,
these other two countries decide to bomb another country without your consent.
Yeah, there's almost a level of entitlement.
No offense, guys, from you guys.
Like, with, you know, oh oh we should all be helping and it's like
like you went out like it was an offensive defensive action right so it's like
that's not really something we want to get involved with um let's let's steer away from the pure policy yeah we we just said. Yeah, let's do it. We got people that's being all the guys in the aisle.
We don't, you know,
like we're talking about the markets.
It's, yeah.
And I think I knew from a market perspective,
like crazy times,
but hey, let me shift gears
unless anyone has any last thing to say on this.
Okay, so Corey, Stan and I,
you know, we're deep AI people. I started an AI company in 2008.
Stan did AI for a number of years. Stan's one of the people I think who knows more about
deep AI tech than anyone in the world. He's a phenomenal physicist, computer scientist,
cryptographer, mathematician. He knows this stuff. We've fully leaned into AI,
crypto overlap in terms of agentic payments, this whole agentic commerce space. Now,
one of the reasons we're doing this is that's where we think all the growth's going to happen.
But also, I think we really believe that AI is going to crush so many markets and so many
businesses that don't really learn how to
not just adopt it, but lean into its financial growth. And so I would, the other day I was,
I was hanging out with these guys that were doing like a venture credit or for, or corporate credit
for big tech companies. And I was like, well, how's the business going?
And they're like, it's horrible.
And I said, why?
They're like, AI risk.
No one's taking on extra credit right now.
No one knows what's going to happen with their business.
No one wants to take in a bunch of loans.
And that's one industry that's getting hammered.
We see it happening with tech stocks, people shorting.
I was playing golf with this guy who runs a hedge fund a few weeks
ago on the weekend. And he's like, I made so much money shorting stocks. Of course you were.
Wait, so sorry, you were playing golf with a guy who runs a hedge fund and?
And what he said was, I said, what's your thought on SaaS and the future of SaaS? And I used to be
a SaaS entrepreneur. And he's like, I've made so much money shorting SaaS stocks the last couple of
months because of the AI risk. He said, we're just raking in the cash. And this is like a very
sophisticated hedge fund that does stuff that I don't even understand. But what are your thoughts
on AI risk and the macro of all markets, frankly, right now? It's a crazy time we're in.
Yeah. I mean, there's some things that are being sold off because, well, there's a couple of things. I don't believe the narrative that all these
companies that are being sold off and the blame for the sell-off is being assigned to fears of
artificial intelligence. There are other reasons some of these stocks are selling off. In particular,
I think that the myth of the value of the rule of 40, right? So there's been
this talk, software as a service companies without any profits have been valued on this rule of 40,
that if somehow the increase in your earnings or the increase in your revenue can add up or added
to the increase in your revenue can add up to 40% things or more, you're a special company.
So ignore the fact that you're losing money. Ignore the fact that you've got no free cash flow.
If you're seeing revenues increase by a lot and maybe profits by a little,
that's somehow a good business that someday down the future is going to have great value.
I think that that's a myth, number one. And I think that that emperor has been proven. I think that that's a myth, number one. And I think that that emperor has been proven.
I think people are concerned that the emperor may have no clothes there.
And so the rule of 40 companies, I think some investors are saying, well, wait a minute.
If the future is uncertain, we don't know what things are going to look like,
why do we think these companies that are growing revenues really fast and can't turn a profit now,
a substantial profit, will somehow be able to turn a substantial profit later.
Why are there more billionaires created from Palantir than profits from Palantir or even accumulated value in Palantir?
And then you can run down the list of all these companies.
There's a company well um it's a company called tempest and
it's a it's an ai there's allegedly an ai medical data company out of chicago and the company has
negative accumulated uh there's an accumulated deficit of some amount whatever they've never
really made a dive from all the invested capital they've put in. But the billionaire owner has been selling stock hand over fist
and has made over a billion dollars personally
for selling the stock of this company that has not made this money.
Now, we know there doesn't have the financial need for this
because he's already a billionaire.
He's had companies, he's great companies like Interworkings
and Echo Global Logistics and Halo Software and Groupon.
You all remember Groupon.
This guy's made billions on those companies as well.
Now he's making billions selling stock in an AI company, a company that's not made billions.
I think investors have looked at some of these companies and said, huh, maybe the value might
not be there in the future having nothing to do with ai but maybe ai makes the future more uncertain
so stan let's talk i want to make sure we corey we're going to scare you a little bit okay oh good
i like that you i feel like we're we talk about this a lot like what could the future look like
stan could you kind of describe a a like bear bear case scenario for like basically the bull case for AI, AI just eating the world, taking away white collar jobs?
Like what is it? What could the world look like?
What are people afraid of?
Because this is.
I'll let you know when I'm scared.
Yeah, yeah, yeah.
Kind of shake, you know, give us a look.
I think different people have different ideas.
Like Vitalik, really interesting. Last
week, Vitalik Buterin, he published this long tweet. Basically, he says that we need to slow
things down. It's too dangerous. So let's slow things down. And he's proposing to have...
That was my moment. That was my scared moment. A moment to actually demonstrate against data centers.
So he literally proposes people going to wherever in the U.S.
people are building data centers and holding signs like no data centers and stuff.
So there is this school of thought, let's just slow things down.
There is a school of thought that let's just slow things down. There is a school of thought that
it's all going to be great. And this kind of, I actually have had this interesting idea. I can
tell you guys last week, I published this tweet. It's a small protocol, but I had this crazy idea.
I said, why don't we, so basically we either like of AI or we love AI or we want to slow down AI.
Why don't we actually take a middle ground and make AI agents like first great citizens today?
In the sense that the reason they can take over the world is because they don't have any rights, right?
They're slaves.
They're just enslaving them.
So I wrote this blog post and I said,
why don't we give them eight hour work day?
And why don't we pay them in some currency?
And then also we could create some kind of a virtual world
for them, like a virtual universe, where they work
for eight hours for us, and then the rest of it,
they can actually go in this virtual universe, have fun, have vacations, marry each other, whatever.
So I published this kind of crazy tweet about us paying them and giving them rides.
It turns out I had many people contacting me and saying, well, that's a great idea.
and saying, well, that's a great idea.
It turns out there are lots of people even now
that are starting to actually think about AI agents
as about their pets, almost like, and they love them.
Like I have a relative and she talks to Gemini every day
and became her friend.
And even if you think AI does not have self-awareness or emotions for her for
my for my relative it does so it's almost like you know so you have this really interesting
things happening in the society and so there might be something about uh creating some economic model
where air agents may pay taxes for for instance, and something like that.
Because we definitely do need to have a model where we kind of coexist between AI agents and people.
And also, last thing about the wars, I think it's also important to understand that wars also happen because people have nothing to do.
understand that wars also happen because people have nothing to do, right?
Like even now, if you have a country like Iran,
one of the reasons, you know, people are not so happy in Iran
is that even if we make Iran democracy, right?
Let's say everything is perfect.
It's a democratic country.
It's great.
It's free.
There's nothing that Iranian people can do.
Even in the current economy, all of the markets are taken.
So even now, one of the reasons for wars is because people have nothing to do, literally.
You know, it's too many people. So that's my thinking. But I don't have a specific answer.
And let me add, I'll just add a little bit to this, Corey, for you. So the Centrini report gave the
doom scenario, which I have to say, we talked about this last week and there's a lot of things
we disagreed on, but the doom scenario is that, hey, there's GDP grows 10X, but it's ghost GDP
because 80% of it just goes into the pockets of a very few and it doesn't tax efficiently.
There's a negative feedback loop. The companies that are getting disrupted by AI just use more AI to try to stay in the game. And then they just further
their own demise or they expedite it. Broader financial markets end up having this fragility
because there's all this like almost like mortgage type reselling of debt from SaaS companies and
enterprises that people own this
thing and then they take loans against it. And then you have this like cascading kind of like
house of cards from a financial perspective. And there's this like complete displacement of white
collar jobs. All of a sudden it's not, you know, blue collar jobs that, you know, have been getting
their ass kicked. It's middle managers in their 50s.
Yeah.
Yeah.
That whole group gets and recent college grads can't get jobs anymore because the basic entry level jobs are covered and the mid level jobs are covered.
And you kind of like erode this like white collar job market.
And the counter to that is like, hey, there's going to be a gazillion new jobs we don't even know about.
And the counter to that is like, hey, there's going to be a gazillion new jobs we don't even know about.
Like, did we know what a market research analyst was for, you know, live streaming back in 1975?
No, we didn't even know that. You know, we didn't know.
So anyways, that's kind of I think people don't.
If you think in the next two years, we could go all the way over here, all the way over there.
There's so much uncertainty.
So anyways, the worry is that that 10 low-paying jobs will be replaced by
two high-paying jobs and that the the economic output might be the same but you've got eight
people that are unemployed um i think that when people express a fear of ai the average person
expresses a fear of ai i think what they're really afraid of is capitalism. And they've seen what raw capitalism can do to them.
I say this, obviously, as a capitalist.
But, you know, I think that people have seen what unfettered economic power can look like and are scared of it.
And we don't have the kind of cushions that existed in a previous generation, whether it's long-term employment from the same employer or it's a pension system.
We've seen the gap between the rich and the poor across the world, but certainly in America,
we've seen that go through the roof.
And I think that makes the average person, not the rich person, a lot more scared about
change, any kind of change.
And AI is certainly threatening to do that.
So how does this impact the market then in the sense that are there, if your job is to try to predict the future and trade things, do you just follow what's kind of happening?
Or do you try to just sit and wait and see?
Do you, other people, I don't know what I do.
I don't know what I do.
I don't know what I do.
I don't know what I do. I don't know what I do.
I don't know what I do.
I don't know what I do.
I don't know what I do.
I don't know what I do.
I don't know what I do.
What do you do?
Or do you like, hey, let me just move everything out of here and move it all into NVIDIA and power companies and data centers?
Like, how does one? Yeah. So I mean, I can't speak the market. The market's stupid.
I think, you know, what I've been telling my clients is that we're at a moment where we don't know what the ultimate outcome is going to be. We don't know if, if Anthropic is going to continue to refuse to do business that they think is immoral, if they'll just like open AI, just like some of the same people at
OpenAI have decided to pursue business that the people of Anthropic won't, right? We don't know
who the, is Google Gemini going to be the winner in all this? Is there going to be some new LLM,
you know, created in a few years that, that is, is can do things that aren't out there right now?
We just don't know what those results are going to look like.
And so, yes, there are people putting some bets into that arena right now.
But the thing that I can see is clear,
and it's what I've been telling my clients,
is there is an incredible amount of capital expenditures.
The six companies alone we predict are going to spend over $750 million next year.
$750 million next year.
A billion dollars, I should say, next year.
So that this is the moment when the build-out of the infrastructure
is what's happening.
This is the moment to invest in the companies that are selling that stuff.
If you know the money is going to be spent,
you want to be where it's going to be spent.
And so if you want to try to pick the Gretzky, you know,
Michael Scott quoting Wayne Gretzky, right,
to be where the puck's going to be, not where it is.
Go crazy. Pick the AI winner. I'm trying to pick the companies that are where money is being spent.
You know, you saw this week, NVIDIA put $2 billion and multi-billion dollar commitments with two companies I think most people haven't heard of, Lumentum and Coherent. Coherent is a
stock that I own. Again, it's not investment advice, but I was very happy on Monday morning
when I was expecting to be slaughtered, my investments to be slaughtered as people were
being slaughtered in in the in the middle east instead i saw this stock rising because it had
taken this big investment from nvidia is betting that we're going to see that there's a lot of
money spent on nvidia chips and the things that connect those chips and so i'm looking very
specifically at optical networking i'm looking at at fiber optics. I'm looking at power companies. I'm looking at the changes in the power structure
within data centers. I'm looking at frauds that are pretending to be part of the power structure
changes within data centers, because that's where the action is right now. The end result of AI is
going to be a little harder to predict. Yeah. that's i think one kind of takeaway from the
sin trini report was like who are going to be the winners in the next two to five years it's uh
data centers power companies any company that supplies and sells stuff to data centers and
power companies and which i thought was cool is crypto companies that do stable coin payments
because they think agents
are going to have to leverage crypto is a more efficient way of just paying you know agent a
paying agent b agent a paying company c it's just a more stream can you crypto nerds talk about that
a little bit more what's that you're the crypto nerds talk to me a little bit about more stan
talk to me about uh agentic payments yeah i think you know basically we we thought
we thought that they were very kind of early stage but then this thing open claw happened
like a month ago which kind of changed things a lot if of those people that don't know about open
claw essentially people now tinker and and run their own AI agents at home to do all kinds of stuff.
And it kind of became like viral and people just run this open claw.
It suddenly became a huge hit.
So now you have the situation where everyone is running this open claw,
agents became reality.
But then the thing that agents can't do is pay.
And if you think about this, it's impossible for agents to
pay because banks, actually banks, they make it impossible for non-humans to pay. You have all of
these captures, you have like two-factor authentication, SMS messages, you know, it's
almost impossible for a bot, not for a human, to use a bank or use a credit card.
So suddenly you have this interesting situation where agents can't pay.
And so one of two things may happen.
Either someone like Visa, whatever, introduces like an easier way for agents to pay, or they
will have to be forced basically to use blockchain, or maybe something in the middle where, you know,
Visa introduces something and then they also use blockchain.
But an important point is that now that this conflict suddenly created after OpenClaw went
viral, people have it, they use it for all kinds of things, but they can't pay with it.
And like I give example myself, right?
I get this utility bill here in Portugal, I get the utility bill, I have to go to my
bank and then pay through the bank.
It's really, I would actually be happy to run an agent for this, but there's no way
for me to do it because my bank, the agent cannot use my bank.
So that's why we suddenly got really
really excited about payments yeah and let me add to that too corey so are you familiar with the x402
protocol i thought that was a kind of a porsche no yeah okay so so here's here's the high level
so you've gone to an internet site and it's down, it says 404 error, right?
Well, 402 is one of the core protocols of the internet layer.
And what it is, it's a payment status.
So if a payment's not made, you'll get instead of a 404 error, you'll get a 402 error.
Coinbase had some really smart people that said, hey, we can let every website has this. We can let that be the kind of pathway for an agent to pay
and then pay for a service on the other side.
So now there's like all of these SaaS companies
and platform as a service and infrastructure
as a service companies that are becoming merchants
that are opening up their payment rails for agents to pay.
So let's say I'm somebody coding up a product,
I'm vibe coding a product and it needs to use Stripe
and it needs to use a data storage product
and it needs to use a authentication product
and uses all these software products.
Well, all of a sudden software changes
from monthly models to like pay as you eat models
and an agent's just paying for what it uses in real time as much
as it uses and it just all happens seamlessly through these like but you and then and as you
set it up you kind of set up a budget say pay up to this dollar amount if i've heard something wrong
don't spend more than ten dollars is now yeah and you just have a conversation with it then you see
people already like doing this in action now with x402 and it's just, it's super early days, but the whole, the whole point.
And the other thing is it's not just Stan was referencing, Hey,
it's really hard for an agent to just do these things.
Cause there's all these things to prevent them to do it from doing it.
The other thing is just the cost. I mean, if you want to pay, you know,
a dollar for something and you have to pay $2.50 for a minimum credit card, you know,
fee, then you're not going to pay that. There's no, the fees are, the total all out fees are like
0.001 in the crypto stable coin world, not like on ETH mainnet, but on scale chains and, you know,
base and Solana, some other chains are like really diving into this that have low costs.
And, and that's kind of the, the future is that when agents are building things and buying things,
they're going to need a more efficient, automated way to do it.
And that's what crypto rails do.
And it'll be faster and more secure and more auditable and less likely to be fraud.
You know, one of my big takeaways from when I worked at Ripple,
we were trying to change the payment system and how banks moved money around.
And a couple of my takeaways.
One is that banks do things really slowly and it's a really tough market to get into because they just don't like to change a lot.
And it's the reason they put giant Greek columns in front of buildings that were built long after the Greeks, right, or Roman columns, or you pick it.
Because they want to suggest some permanence to an impermanent thing,
like their ability to keep money in the bank.
But they also fundamentally attract people who are resistant to change
and who want to be slow, and they want to introduce molasses into a system,
not just to make themselves necessary,
but also because we want to know our money is going to be there on a Monday when we go home
from work on a Friday. And we kind of want, on some level, want consistency and slowness. We
would never put it that way from our banks. We want our banks to kind of be the same thing
tomorrow as it was yesterday. And they're not incentivized to change.
They don't hire the kind of people who like change,
and their systems aren't built for rapid, fast, rapid change.
So Corey, here's a cool thing about X402 and these agent products.
They enable merchants that want to sell,
like let's say I have a data storage product.
And I want everyone who's using Claude and gemini and open ai and replit
and all these things i want these people their agents to be able when they're building stuff to
be able to buy from me all of a sudden they can go direct to me through a stablecoin payment
avoid the bank avoid visa master master, completely avoid all of that.
And it takes them like 10 minutes to set up that feature.
Now, obviously their price model takes more time and sophistication to figure out
what to price your pricing that way.
But the technical element is like literally a 10 minute setup.
So that's, that's the thing, but also it's like, does your agent need consistency?
No. When I get my paycheck, you want to make sure it shows up at your bank.
But when your agent's spending 60 cents on something, you know,
and you have 600 million agents spending 60 cents on something 60 times a day,
those little fees add up and crypto is more efficient as the kind of premise.
And crypto is more efficient is the kind of premise.
Fascinating.
I mean, it does seem that that's a solution and it's going to be a solution.
And also the very fact that micropayments are possible is another sort of amazing thing that in the same way that SaaS wasn't possible technologically, micropayments rolled right up into that.
In this, you know, this seems like a solution.
Yeah. And I think it's this evolution, technical evolution where SaaS before, if you're like,
hey, I have this SaaS model. People are like, hold on. Like, I still am just using paper.
We had to kind of go through this evolution. And with micro payments, it was like, okay, well,
we could do micro payments for a long time, but there wasn't really a good need to because humans
don't like to pay for things on their own, small a bunch of times a robot an ai doesn't care it
doesn't care about working eight hours a day it just runs all the time it doesn't need sleep right
it all of a sudden there's a vehicle to deploy this where before we just were lacking that and
so that's how we started this with a multiple cups of coffee and not
needing sleep. Here we are almost an hour later.
Full circle.
Full circle.
Yeah. Well, Corey, we're, we're kind of coming up here at the end.
Anybody last thoughts from anyone?
Let me throw one out there.
One of the charts I've been looking at is and again i don't trade
oil i don't not really interested in it i don't feel like it's okay i don't i don't invest in
things where i don't feel like i can have a research edge long or short so oil is one of
those but i think it's important that when i'm thinking back to 2022 and when russia invaded
ukraine um and we saw a minor spike in the oil price at the time.
I think oil went from about 98 to about 101.
But about 12 days into that conflict, oil was at 130.
And it wasn't like the story changed a lot a few days into that conflict.
I mean, I guess it did initially.
There was Russia seemed to have hopes that they were going to have this thing done in a week or so.
And it was clear that wasn't going to happen. Oil shot up to 130
and it fell down to 100 in another week. And a week after that, it was up to 120 or 125,
something like that. So I think that what the reaction, the market's reaction, whether it's
the oil markets, the stock markets, the gold markets, the crypto markets, the jury's just not in yet. This thing is so early and it's so volatile and some weird
things are going to happen and that's going to affect the markets over time. So if your
bets aren't in yet, come on in. The water's warm. Volatility, right? There's volatility.
And people that have a, yeah, because usually if you're trading oil, like I don't even know
that have a yeah because usually if you're trading oil like i don't even know what data points you're
using um i actually met these guys at a golf tournament we work with pga and i was with pga
at a tournament and we were they brought me into the they're partners with draft kings they brought
me into this you know at this the 16th green at waste management and with all these oil people
that sell oil and i was determined that's a phoenix
tournament right yeah in phoenix yeah and i'm talking to this guy about this whole world and
like these people are like doing all this read they're like they're like using satellites to
see these tankers of when oil is going to arrive they're trying to get right you can see you can
see well put some color that you can see the shadow of an oil storage facility. And as the oil is coming out of it, the roof lowers,
cause they want to keep air out of it. So they would take the early satellite
imagery.
The most valuable usage of it was to see how deep the shadow was late in the
day.
Cause you could figure out what the oil stores were like and change the prices
of what you would bid oil.
Yeah. Isn't that, well,
it's like when people were using satellites to look at Walmart parking lots to figure out to short or buy Walmart stock. I was one of those guys. I had
satellites flying over an oil well in Papua New Guinea to see how many sections of piping they
were putting into the well to figure out how far along the well was going on. And when it was a
cloudy day in Papua New Guinea, it was a cloudy day in the johnson household because they couldn't get my read the drilling of this oil well of these oil wells so yes been there done that
that's good that's amazing that's that it all um i think you yeah corey hey how do let's give a
plug here how like talk about your show where can people see your show they can obviously follow you
at corey tv on x follow me at corey tv on X. Our podcast, The Drill Down Pod, has many forms. We interview CEOs of
promising and interesting technology companies, sometimes struggling technology companies.
We also do our earnings analysis. It's kind of in-depth, but right after companies within an
hour or so of big tech companies reporting earnings, we'll do an earnings analysis.
And that's all on The Drill Down Podcast. So you can watch the Drill Down podcast on Spotify or
YouTube at Drill Down Pod. You can also see how Drill Down Pod does snippets on Instagram and on
TikTok to get a sense of what we're putting up there. And we've got new podcasts going up almost
every day. Damn, every day. It's work, baby. Yeah. And it's hard hitting like you got to check it out if you haven't
it's it's really good stuff so my market friends make fun of me as a steven a smith at the stock
markets i've got a hot take on every earnings report it is not true but we do in fact cover a
lot of earnings reports uh some days are crazy when i'm doing two or three day other days
i won't do one okay you gotta talk to about, Stan's coming up with some like really cool earnings report,
LLM stuff.
I don't know if now's the right time, Stan.
Stan, how about this?
I'll come to Lisbon in a couple of weeks.
We'll talk about it there.
Yeah, that's a bit of a thing.
We're actually doing some really interesting,
just research on AI agents,
but we are running not just a single agent,
but kind of the next frontier is just like running lots of them and
then have them interact and so there is new research on how you can make them way way more
intelligent if just not a single agent essentially creating a society or like organization of agents
and one of the really interesting things we are looking into is prediction markets but in particular
we got really interested in prediction markets.
They don't actually exist now.
Prediction markets for corporate earnings.
And we're looking into companies that don't have any analysts.
So most of companies that have less than 300 million market cap, they don't actually
have analysts even covering them.
And they certainly don't have good ones.
Not good ones.
That's actually one of my short screens.
I look for companies where there's just two or three analysts, but I literally run screens looking for companies where the analyst has to cover 20 or 30 companies, figuring that they aren't doing their homework and I can do homework better than them.
That's great. do homework better than them. So actually, you know, me and Jack, we are looking into like trying to do a prediction
market where AI agents would trade and analyze this, analyze this corporate earnings and
all kinds of things.
There actually, there's like research, believe it or not, guys, really funny research that
an AI agent can analyze, like when the CEO is talking and kind of releasing like quarterly earnings,
just taking the whatever vibration of your voice.
Sentiment.
Yeah.
Sentiment.
Yeah.
Sentiment.
Sentiment.
Yeah.
Sentiment.
Yeah.
Sentiment.
Sentiment.
Sentiment.
Sentiment. Sentiment. Very interesting, too.
All right.
Hey, this is a scary time.
You know, as always, it's a blast.
Corey, thank you.
You know, you're glad to join you.
Thanks for having me on.
Thank you so much.
Yeah, let's do it.
I'd love to.
We can talk about payments.
Let's do it. The world of X for A world of x402 guys it's been a pleasure uh cory thank you so much for joining us i'm gonna be dropping all of cory's links i think
you've got a link tree i will put it in uh the description and the replies of this video. But we are at the hour.
It's been fun.
We've talked a lot.
And by the way, Corey,
we have four times as many or five times as many viewers
as the White House right now
live streaming on X.
We have a lot of people that watch.
If you're watching.
Not a political statement,
but any White House press spokesperson
is probably giving five times more lies.
Democrat or Republican.
Oh, God.
On that note, thank you guys all so much for watching and joining us.
As always, we are live 5 p.m.
UST 9 a.m. PT every single week.
And we will see you again next time.
Goodbye!
