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Market Talk- Crypto and Stocks pump?! Bull market is back?!
Recorded: Feb. 13, 2026 Duration: 1:34:09Space Recording
Short Summary
In a recent market talk, crypto enthusiasts discussed the latest CPI report indicating a 2.4% inflation rate, potential growth in Ethereum, and the impact of Trump's company filing for a BTC and ETH ETF. The conversation highlighted trends in altcoin resurgence, community engagement, and the overall positive outlook for the crypto market despite recent challenges.
Full Transcription
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. I can't remember anything, can now that the world is through with me
I'm waking up again, I see that this is not what it's left to me
Nothing is real but hey now, oh my grace I wish for dear
Oh please God, wait
Back in the womb it's much too real In things like that iron ball is real
I can't look forward to reveal
Look to the time when I live
And feel it through this day to me
Just like a wartime novel
Tying to shit and me
Cut this life from me
I can hold my breath side with my dear.
Oh, God. The world is gone, I'm just born Oh God help me, hold my breath inside
Wait for my dear, oh praise God help me music Thank you. I'm losing all I cannot feel, I cannot die Just to watch self, fight my only fear
Knock my eyes and take in my sight, take in my speech
Take in my hearing, take in my arms, take in my legs
Take in my soul, let me live life in hell my legs so music Thank you. so so yo what's going on guys welcome back to market talk brought to you by bb hope you're all having
a fantastic friday or saturday nice start to the weekend guys we had a cpi coming in today
actually quite cool i think cpi came in at 2.4 percent we're seeing a nice little rally to
i think mid-range we're trading just under 69k on btc we also have uh the stock market closing
off the week uh pretty uh pretty nicely honestly a nice little pump volatility coming back into
the market is something that uh a lot of us do like to see instead of this chop. We also have the IWM closing in at 1%. We just had the closing bell, but it's still ending the week in the red. on hood that was a nice little rally that hood had today and um I still think we're still going
to get some um some nice prices on hood moving forward but just going back um to crypto I mean
you've got ethereum just over 2k and uh I think the biggest thing that I want to see is honestly
Solana breaking through 87 88 I think if we can get
above those levels this weekend, then we might actually make at least a slight deviation above
current range highs. But we'll see what the market gives us. We will see what the market gives us.
But I think this is the lowest print that we've had on cpi in a very long time so
maybe the market actually um likes that maybe the market actually likes that we do have
a long weekend ahead of us markets are closed on monday for president's day and usually on uh
long weekends there there does tend to be um there does tend to to be some action in the crypto market. There actually does tend to
be some action in the crypto market. So maybe there is something on chain that's about to
happen right now. There's a lot of hype going on with crypto AI. So despite majors still more or less being in a higher timeframe downtrend,
there's always going to be some pockets of on-chain that do outperform. But I mean,
my day's been pretty good so far, guys. I had a protein shake, carnivore, cookies and cream.
It's probably the best supplement that you could ever have as
far as taste. It is a beef protein isolate. So materially, it's a lot better than your standard
whey protein. Absolutely, for sure. Also had my branch chain amino acids all day you may from 5%
nutrition, mango pineapple, probably the best-tasting branched-chain amino acid supplement that you can buy.
And we're not sponsored by them.
I just like giving these supplements a shout-out, as I have over the last few years.
And the proof is in the pudding, man.
The proof is in the pudding.
And if you don't take care of your health, then you're just not really going to perform optimally in these markets, especially with crypto being a market where you have to concentrate so much, where if you lose focus of the slightest bit, you could actually lose your edge.
lose your edge. But just going back to the markets, I mean, as long as we have some volatility,
you even have micro strategy up 8% today, as long as the market is trending, even if it's just in a
volatile range, then it's going to be awesome for both bulls and bears. Even if we just crab around
before the next leg down,
or perhaps this is accumulation and we spike back up. I do have some concerns over Trump's
company, Truth Social. They filed for an ETF with the SEC. They filed for a BTC and ETH ETF.
And any time any entity in regards to the Trump family
having anything to do with crypto,
it usually results to the downside.
We saw that last year in Q1 when World LibertyFi
was buying a ton of altcoins.
They were buying some of the most obscure altcoins unbeknownst to mankind.
I think they were even buying like on-chain shitters.
And the fact that they might be back and they're going to be having an ETF when there's already so many products for that.
There's IBIT.
You have all the people call them paper traded BTC.
These companies that when you buy them, they're effectively levered Bitcoin treasuries, right? So Tratify asked themselves, why would I buy BTC if I can just buy shares in
a company that is directly tied to Bitcoin's growth? And effectively, that kind of dilutes
BTC's market cap because you're effectively setting a ceiling for BTC because who really
knows if these treasury companies are actively buying the Bitcoin, right?
Who actually knows?
And, you know, we've seen in previous cycles the crime that has happened with companies that facilitate in this kind of business, right?
There's BlockFi, Celsius, and many others as well that there's just way too much to mention.
Same thing with exchanges.
When clients want to withdraw, there tends to be a halt.
Basically, whenever there's a bank run,
a lot of these entities actually don't have the goods and services
that they provide that clients pay.
We also saw that with FTX.
So why would stratfi why would some stratfi boomers um
buy spot btc a lot of them actually would rather just buy proxies they'd rather buy
ibid or some of these uh or some of these other names but nonetheless some nice volatility going out in the market um same thing with some of these
miners you've got things um like iron up up about five percent today and um i still like that name
for the long term i actually think that it outperforms micro strategy moving forward i think
It outperforms micro strategy moving forward.
I think the AI data center's narrative is much better to sit in for the long term instead of just something like a micro strategy, which honestly just dilutes its shareholders while the main person behind it just increases their leverage over and over and over again um and just going back to crypto
like i'm here on coin gecko and i'm clicking on the top gainers a lot of this is is um some old
some old names you've got zcash up 20 today um you also have some things on Solana and on base that are trending that have to do with AI.
And that's probably the most exciting narrative, in my opinion, for myself to position in this market when quote unquote easy mode comes back.
We saw what happened in Q4 of 2024.
You had multiple names skyrocket to billions. And that was without,
I think the most important thing to note is that that was without Solana or Ethereum and some of
these other majors, without them being in price discovery. That was when BTC dominance was still going through the roof.
And so what happens when you actually start to have altcoins?
Specifically, if you want to look at a pair and index to kind of gauge altcoins outperforming BTC, forming btc it's it's going to be the uh others btc pair which is essentially everything outside
of the top 10 in its bitcoin pair appreciating in value because you could have alt usd go up
but still have their bitcoin pairs trend down and we haven't exactly been in a regime over the last few years where we've seen others btc outperform
with the exception of a quarter or a quarter and a half and the last time we saw significant
outperformance with others btc was uh in q4 of 2023 all the way through Q1 of 2024. We saw things like Pepe trading from 300 mil all the way to 5
bill in a matter of months. We saw other tokens like Render and FET and TAU go up like 20x when
all BTC did was go from 25K all the way to 74.
You saw things like TIA and Injective, 10X.
You saw things like Sui and Say go up parabolically as well.
And you also had the first substantial on-chain run-up. You had things like Mog, Popcat, and I think the darling of on-chain that really started it all was Bonkin With on Solana.
And those went to billions in a matter of months.
And that essentially created a ripple effect where that pool of capital throughout 2024 spawned other runners.
And right now we aren't in that regime.
Right now, we aren't in that regime.
I think we would have to see Bitcoin trade well above 100K or at the very least 95 to get any sort of echo bubble.
And that's not to say that we have to wait like a year or something like that.
But these things do take time but the fact that
we still have any sort of attention um despite the absolute hammering that these all coins
have gone through is it's pretty nice honestly and i'm pretty confident that this market is here to stay and that altcoins will probably see better days.
It's just now you just have capital that doesn't exactly know where to hide.
It does not know where to hide.
You haven't had a runner on chain that has traded materially above some of these ceilings that we've seen before. Even in
2024, where we were effectively in a downtrend from March until August, you still had things that
traded around 200 to 300 mil. And we haven't exactly seen that. It's been lower and lower ceilings and this manic capital that's bouncing from coin to coin where ceilings are effectively now not even close to 10 mil on Solana over the last week or so.
yeah there has been there have been tokens that have gone up but there's a difference between
saying hey x x token went to market cap of five mil compared to something that was so common a
year ago where it's like if you were to tell someone hey in 2026 the common ceiling for some
of these tokens are going to be sub 10 mil they'd call you a crazy person a year two years
ago it was very common for you to ride something that would go to 200 300 mil at the very least 75
and right now there's just no breadth in the market it's just random tickers that might have a couple of good days.
And that's that.
It's effectively a crabbish euthanasia roller coaster.
So since we traded at 60K, the market right now in crypto, it's kind of like, all right, let me bounce into this chart.
Let me get out of it.
Let me bounce into this other chart.
It's just a lot of dead cat bounces and really no clear winners at all whatsoever.
And by the way, if you guys want to come up and talk today, you guys are more than free to do so.
and talk today. You guys are more than free to do so. Typically on Fridays, I do like to have
some of you guys in the audience that are regular Market Talk listeners to come up and speak. If you
guys want to do that, just click the Spaces tab, and to the bottom left, you'll see a nice
microphone. You guys can click Request. And also, and also feel free guys to share some love
to the space share some love to the stream best way to do that guys is uh also by clicking the
spaces tab once you guys do that right above the profile picture right above the because bitcoin
profile picture you'll see a nice link above that says x.com slash i
slash spaces you guys can go ahead and do that and once you guys do that click the like button
the little heart button and also the repost button helps get more people in here and who knows maybe
one of your favorite individuals that you follow can catch this on the algorithm.
And maybe they request and I'll bring them up.
And we have had some pretty cool shows over the last couple of days.
Yesterday, we also had a community-based show. I had a lot of people that usually enjoy being a listener come up.
So that's been nice.
And today I kind of like the same thing.
So if any of you guys are listening right now
and want to kind of give your thoughts of the market
or really just ask me any questions,
you guys are more than free to hit that request
and I'll bring you right on up.
And for those of you that missed out,
we did have Peter Schiff on the show,
I believe on Wednesdaynesday that was a very
very very cool show and um some very interesting discussions happened uh on that show and um
i believe we streamed for about four and a half hours close to five hours that day
probably one of um probably one of uh the most interesting shows that we've had here
um in a while not only as far as like length but just um the number of discussions because there
were so many individuals that that wanted to come up and speak that you know i i never thought they
would uh they would um they would even be a speaker because some people honestly they just like to
listen and mostly just post there are a lot of people that like to post more instead of speaking
on spaces which I mean that's understandable I do think spaces are kind of a different i think i think spaces and just posting on x should be two separate apps
honestly um but that's just that's just my opinion i think spaces do suffer from a lot of the
the limited bandwidth um because when x is used a lot and it becomes one of the most used apps, spaces tend to glitch.
Spaces get buried under the algorithm.
And also, something I've noticed over the last few sessions is that spaces have been kicking people out they just close the app or the app just bugs on you and people are not
able to come back into the app for whatever reason and it appears as space is not available which
is honestly um is honestly sad because spaces have been um probably some of the best avenues to to meet new people and
to interact um with those in in the sector that i enjoy which uh which is markets you know um and
i'm also appreciative of all of you that um that's uh that have been tuning into these shows whether
it's been weeks or months or even years,
if you've been with us since the very beginning.
I appreciate every single one of you.
The time that we go live here is usually a hotspot for spaces.
So it's like a lot of these bigger profiles go live,
but you guys decide to come here and listen to me and some of the other speakers yap.
So thank you, thank you, thank you.
But I do see that we have a couple of people that requested to speak.
Some of the people that have come on the show quite a few times.
And I think I'll start it off first with David.
It's been like since last week, the last time.
Actually, no, Monday.
Monday, I think, was the last time that he was on.
What's going on, David? How are you?
How are you doing?
How are you doing?
How's your Friday?
It's good.
I mean, I'm so melancholy about what's going on.
The market is playing out as expected.
Mortgage rates, which people are afraid to let me talk about,
are melting down.
And one of the engines of the mortgage
causes that to accelerate.
And what I'm so excited about, in contrast,
is how people have to learn
that all these FAANG stocks,
the Mama, Meta, meta, amazon, microsoft, and apple,
they benefited from negative cost of capital from the government from 2001 or 2002 after the 9-11
event, where money was printed and any company that can convert a free loan or a negative cost
loan meaning you borrow the money and then they devalue the debt and then you
pay it back you have these giant companies that don't really make that
much money but they convert free loans into making money and then they just
ginormous and it's screwed Main Street they couldn't borrow money for a house
and you can't not see what's going on right now. Mortgage rates are at the lowest level in over three years.
The 10-year rate is about to go back below 4% and you're gonna watch folks
you're gonna watch Microsoft and the 10-year yield travel together. They're
both gonna lose a 4 then they're gonna lose a 3 and then they're gonna lose a
2 because the cost of capital is rising, because inflation is falling so rapidly,
and the only people that know about it are the two-year note and us.
Okay?
Odd Lots, who I love, Joe Weisenthal, they had a podcast with this guy,
whatever the guy's name is from today.
whatever the guy's name is from today.
And then he was on CNBC, and he's saying,
well, inflation's down at 2.4,
but it's going to go back up to 4.
Okay.
No, inflation's at 2.4,
and onus equivalent rent,
and investment services inflation
are the only reason that it's not below 2%.
And so as interest rates go lower,
those things stop having inflation,
and we're going to have below 2% inflation by the end of the year.
We're going to have mortgage rates by the end of this quarter below 6%.
The five-year and one-year reset right now is five and a quarter.
You could get it for $4.99 with two points.
You're going to see a crazy thing because of the snowstorm.
Housing activity was delayed., mortgage activity was delayed. You're going to see some crazy
numbers in the next three weeks going into the purchase season that are going to be off
the charts. We're going to have 200% year over year refinancing activity, purchase activity.
All the people that didn't qualify for these higher
mortgage rates, they can actually get a rate for five and a quarter or less. You watch Lowe's,
it's melting up. You watch the home builders, they're doing well. You watch my Staples,
my healthcare and utilities. Utilities had the highest monthly close of all time today.
Staples also had the highest monthly close of all time. And the laggard of the three,
healthcare was three cents below the highest close of all time. And the laggard of the three, healthcare was three cents below the highest close of all time.
And people are saying,
can I buy a dip on Bitcoin?
Can I buy a dip on IGV, on Microsoft?
Folks, are you so blind?
Are you so rear view mirror looking
that you can't look at what's working in front of your face?
These lower rates, these less inflation
is going to drag down these innovation stocks through the floor.
They're not going to stop going down.
And by May 11th, when we wipe away on the annual chart all of the dip from the Trump Liberation Day,
and you're going to have 100 companies on the new low list out of the tech and the comp space.
People are buying some of the garbage in tech because they're trying
to get out of the big stuff so fast and they have a requirement to be in tech. I mean a
lot of institutions say, ah, we want 40% in tech and comm. So they have to have it but
people are getting out of the big stuff. You could take a look at Nvidia.IA is accelerating lower versus the SMH it's underlying in the most since March of 24.
The derivatives market is so fecac, it's so screwed up, it's so based, divorced from,
I've never seen it like this in my lifetime.
It's the greatest opportunity of all time, but you have to look forward, not back.
You're just talking about you can't get any action out of these alts
because there's natural selling, there's liquidity.
Why would someone want to buy an alt when Walmart melts up?
Costco that they shorted because of the earnings,
which is the stupidest thing you can do,
but they shorted Costco because of earnings.
They took it from 1,088 down to 844. Where is it?
It's 1,018. It's 3% from the highest monthly close ever. What happens when you take a stock
that sits for 12 months in a deficit, in a trough, and it goes up? You've loaded up the shorts.
and it goes up. You've loaded up the shorts. It's a bear trap. You have the whole staples just
melting up and people are short Costco and then you've got a whole 12 months of all those sales
are bad. Folks, the rise of these rebated, the rise of the 493 is what's destroying these big
tech companies. There's no saving them in my book.
There's no salvaging.
They benefited from a negative cost of capital,
including under Biden when we have reported inflation of 9%.
Janet Yellen said it's transitory.
And little Powell on his little puppy dog leash repeated,
oh yeah, it's transitory, oh yeah.
Talk about lack of independence.
He kept rates at negative 9%. That's transitory. Oh yeah. Talk about lack of independence. He kept rates at negative 9%.
That's free money.
You borrow, you pay back 91 cents.
Well, now we have rising real rates.
Don't look at these floating rate notes
in treasuries as a measurement.
There's too few of them.
They're illiquid.
Some people who need optionality will massively overpay
because they need optionality on the book. Just watch the actual two-year, the actual three-year.
We're flattening. We're like under four basis points between the two-year and the three-year.
That's like seven trillion of treasuries. We're at new lows for the two-year, near the three-year.
Rate structure, you're able to fund at lower and lower rates.
They're now pricing in two and a half cuts now.
They have a 97.04 and three-quarters SOFR contract.
Rates are going lower.
They're not going lower.
The other day, and I don't mean to call Evan out,
but he said we're in range-bound in rates.
And on the Monday space,
when I jumped off, because I did lose it a little, when you said, you don't want to make this a rate
space. It's your show. You can do whatever you want. But if you're not watching rates, you're
not going to have any idea what's about to happen. As we shred the volatility, we weaken the banks,
we weaken these tech stocks. Together, they get so weak,
the semis roll over. The semis roll over. And the sand disc that you and I were highlighting,
you gave your folks permission to look outside of crypto. And then you had that sand disc. It was
up a ton. And then it was down $110 in one day. We're almost over with all that stuff. You cannot
have semis stay up if the software,
which is $7 trillion, is melting down. So you get a little lift. Microsoft is, what, 3% from a
multi-year low? Look at Amazon, nine days in a row down. Nine. Amazon is less than 5% above its peak of 188, what is it, 56 or 65 in the COVID era.
Do you really want Amazon to go back below 188
and be at the lowest level in five years?
We have trillions and trillions and trillions of dollars
that are sliding.
And where is that going?
The valve is now open.
More of it can go into mortgages.
And the problem is people don't understand mortgages.
They are not debt.
It's a misunderstanding to think they're debt.
They are equity.
There's a short call there, meaning they're contingent.
As rates come down, mortgages become shorter.
They offset fewer liabilities.
They force pensions insurance companies to replace the refinanced paper
with initially discounted mortgage paper that was issued during COVID,
but that's going to run out.
TLT, it was June 24th, June 26th, I did some podcasts.
It's up on
Polarity Radio
on Apple and Spotify
where I said,
mortgages are now
rolling into bonds.
I'm opening a position in bonds.
I didn't want bonds.
I wanted mortgages
because they paid
more than treasuries.
But now we have
falling volatility,
falling rates.
We have falling inflation.
We have people who don't know anything about policy.
They don't know anything about inflation.
They don't know anything about volatility in mortgages.
And they're telling you, don't worry, rates aren't going to go lower.
They're going to go higher.
When in your own eyes, you're seeing these things melt down.
You do not want to be in an environment where bonds are going up more than double digits
and you're along all this tech stuff. It doesn't work that way. You do not want to be in an environment where bonds are going up more than double digits
and you're along all this tech stuff.
It doesn't work that way.
We're in a different environment.
Inflation is falling, as evidenced by prices, not by politicians,
not by analysts that said they're going to raise rates 25 basis points in 22,
and they raised them 425.
And for those of you who think the dollar's
going to continue being debased, folks, you're wrong.
I'll do one thing in terms of space time and price time
in physics, and then I'll return the mic.
But for all of you who've ever seen any of these space time
explorations about gravitational force,
you see the bowling ball on a trampoline,
which is a very poor representation what's really going on but it's good
enough okay you have this Nasdaq it's 40 trillion you've got the S&P outside the
Nasdaq 30 trillion you've got you've got gold and silver 30 trillion for you've
got a hundred trillion dollars leaning on the dollar
as that goes down, as that deflates,
as that sends money into mortgages and treasuries.
As dollars go from high multiple companies
to lower multiple companies.
As volatility structures normalize and you get skewed back.
You've never had prices at an all-time high in my lifetime
where there was no call skew.
People charging a premium to buy the call over the put
because they're worried that it really runs.
Everyone is selling calls.
We have the greatest number of put buying in Staples,
the greatest amount of call buying in tech.
Those will all go bad.
And you'll lose that stabilization.
You'll see more outperformance of the low beta
coming out of the high beta.
And so when you see the deterioration of the weight,
the market cap, the mass of equity, of gold, of crypto.
You'll see the dollar rally after having gone up from 2008, from 71 about, to its 50-year trend at 99.
It will slice through that and it will go to 120 or 130.
And it will devastate the free cash flow conversion of all of these tech companies.
Amazon down nine days in a row. Apple is a disaster. And then after April 15th, the truth
will come out that companies that are between the April lows of last year and the current level
will have to expose themselves as being on the new low list. And you'll see tons of tech on the new low list,
tons of staples, healthcare, and utilities on the new high list.
That's money moving.
Go where the money's going.
Go where the volatility's going.
We're losing volatility in silver.
It's down to 70.
It was 120.
Gold was 48.
It's down to 30.
Bitcoin got up to 90.
That's what caused me to cover my short
because it's not
going to stay at 90 where it was during the election people will sell it it's
going to help drive up Bitcoin for a little while drive up crypto for a
little while but I have every reason to think that the volatility go back down
and the institutional industrial selling of volatility in crypto will continue
but there are people who think lower rates um are higher lower rates are higher signals
for crypto folks if rates are melting down it's telling you that disinflation is here
it's telling you that the dollar supply is going to shrink and when the dollar supply shrinks and the dollar rises,
no matter what the nonsense about bricks and that, it's,
it's, trends higher, there's big big problems in innovation equity.
Because that means they're paying for money, they're not getting money to borrow.
You get paid to borrow if you're in tech and they're printing money.
Rates are going to just keep on going down.
They're going to get dragged down.
We're losing volatility everywhere.
And then that's sellers industrially of volatility
are overwhelming buyers of volatility.
Every once in a while you get a little bit of a lift.
But that structural pressure is going to hurt banks
because banks sell volatility.
Michael Saylor sells volatility for a living in strategy.
It's all going to be melted down by rates.
It's not a rates call.
It's rates are a reflection of deteriorating volatility.
It's a deteriorating liquidity.
You want to go where the money's going.
You don't want to go where the money's leaving.
You want to walk up an up escalator, not an up and down escalator.
So anybody want to say anything, feel free. But please don't tell me we're in the middle of a
trading range. We are at a new three-year low. We're about to take the four-handle away. The
two-year is below its 200-day working on a golden cross. The move index, the bond vault, it's all
going away. All of the energy, all of the entropy,
all of the enthusiasm, all of the excitement.
And it's going to 19.2% of the S&P.
Staples Healthcare Utilities.
Some is going into the interest rate sensitives.
But you do not want to watch Walmart melt up
and Costco melt up and coke and and McDonald's and
and Main Street American companies and then just focus on deck chairs of the
Titanic of all these tech companies that are going to be trying to feast over a
smaller amount of money price waterhouse Coopers is giving rebates to their
consulting clients because the consulting clients know they're making
money on the AI agent X and they're saying we're not paying you enough.
So they won't have money to buy more of the co-pilots.
The thing is a mess.
Amazon is telling you that.
Microsoft is telling you that.
Do you need all of them to tell you that at the same time?
They're going to become price takers.
They're going to be dropping the price.
They're going to find out they can't get the business without cutting the rates.
There's not enough money there. NVIDIA is about to take out a six-year low. The options on Microsoft were almost free, the puts. This is not advice to buy them, but it's telling
you that people were so enthusiastic to sell Microsoft puts. They kept it in place, and
now Microsoft puts are huge because there's nobody willing to sell them anymore at low prices
because it's melting down.
People were selling calls on Walmart and Costco and TJ Maxx and Burlington
and NextEra, NEE, and Lilly, and J&J, and Gilead,
and all the low beta, they were selling the risk.
They were eating it, and now they've lost their money,
so they're letting it rise.
Why don't you go where the money's going?
Why don't you leave where the money's leaving?
Why don't you stop trying to find a new average DCA
to run yourself off that one 15% move
is going to take you to zero
Why don't you try to make some money with your money move 5% of your money to something that's working and do it again
When it's working more and have more money and stop losing if there's no pride in losing
when we take out 63 and go to 59 on Bitcoin and
Solana is that a lousy, lousy level.
Stop being whale exit.
Grow some.
Buy something that's working.
You don't even have volatility enough
to stop you from buying bonds.
So we are in a low beta ecosystem.
Low beta dominance.
Don't be whale exit.
Sorry.
You can't have rates go down and Microsoft and Amazon go down and ignore that.
Okay.
How long will we stay?
I want to ask David something.
David, you worked on the floor in 87, right?
And in 08?
I wasn't on the floor.
I was in the business in 87.
So tell us a story like the craziest.
Alan Greenspan called, what's his name, who worked for Trump.
He's a producer.
The craziest story where someone like screams so loud.
No, no.
Well, I'll tell you one thing.
It was Thanksgiving Friday.
We had someone who was a super talented woman,
co-desk head,
and she arranged to get pregnant
so she could deliver on Thanksgiving weekend
so she'd have enough time to recover
and come back to work on Monday.
So a guy is getting hit with some paper.
Someone needs to raise money.
He buys 100 mil.
He drops the bid $2.
They come back with another 100 mil.
It's like that fire sale in Margin Call.
The guy was just a regular trader.
He takes in like a hundred million of paper.
Monday morning comes around.
They flip it around for a $15 million profit.
They made him a managing director that day.
Sometimes there are mispricings.
Sometimes you step into the breach.
But if you, that was a one-day
special case no liquidity Friday someone needed to raise a hundred
million dollars I mean a half a billion dollars we're persistently losing our
volatility the IAE is melting down the broker-dealers.
AI is taking away profits.
That means there cannot be profits to buy the hardware.
Do you need Microsoft to go back to a new low at 392 to say,
look at IGV divided by SMH.
It is the lowest ever.
It's a disgusting chart.
On the monthly, forget the daily and weekly.
It's such a horrible RSI, that spread trade. How is it not going to drag down NVIDIA?
NVIDIA is accelerating lower versus the SMH because people have the SMH but Nvidia's not going to have
the numbers I don't know if it's this quarter or next quarter but I know that
when rates go down it's telling you nobody wants to borrow there are more
lenders than borrowers and that's getting worse and the problem is and
this is the core and I don't expect you to understand it on day one or day 100.
We go through it on our spaces.
We go through it with our subscribers.
When we had all of those mortgages issued at 2.5 and 3 and 3.5 and 4 during COVID,
it's now 3 trillion.
Those trade at a discount, not because of a credit issue.
It's that the funding rate is very low. Nobody wants that funding rate that's low. So when you get the prepayments and you wake
up in the morning and you get five million dollars of cash from all your mortgages, you say, well,
get me some, get me some discounted paper. They don't want to prepay, they want to pay par plus.
They don't want to pay par because it's going to be refined.
They don't want to pay 101 and they'll lose one.
So they just buy these lower rates.
We're at 6.04.
It's the lowest yield.
Trump announced a month ago or less,
he's buying 200 million mortgages.
It traded at 599 in
the morning we settled at 606 the mortgage back security the five and a
half percent you could all go and mortgage news daily it's a free app it's
a free website it'll give you the quotes you could chart the rates also we we
gapped down we gapped up to par and a half, closed to par and an eighth.
Mortgage rates closed at 6.06.
Folks, we're making new progress.
We're hurting people that are underweight.
It's a mechanical thing.
Mortgages are model-driven.
It's not sentiment.
It's model-driven.
They get the money and they spend it.
Their prepayment models allow them to lean 1%. That's it.
You get that lower rate. Do you know what's going to happen in the next three weeks because of that snowstorm all the
people that couldn't go look at houses and also couldn't afford because the
rates they have a new lower rate you could get a five and a quarter mortgage
30 year guaranteed rates for five years. You're planning on moving anyway.
What's the big deal?
The Fed's cutting.
They're cutting.
They're cutting.
What happens when the unsubsidized rate's $4.99?
We are going to have double-digit purchases increase.
We're 8% up 33% from 6% adjustable market share. We're at 40 in 2005. We're going
to get triple digit accelerating to 200% prepayment speeds, excuse me, refinancing activity.
You're going to drive mortgage rates down five and three quarters, the fixed. You're going to drive mortgage rates down five and three quarters, the fixed. You're
going to be below five very soon. It's going to kill the banks. It's going to kill Warren Buffett's
Berkshire Hathaway. It's going to break the back of XLF and IEF. Goldman Sachs sells volatility. When volatility goes down, they make less money.
Citigroup, Wells Fargo, Bank of America, JPMorgan,
they're way too overpriced.
A flatter curve hurts them.
And don't just look at 2's 10s.
Look at 1's 10s.
Look at 2's 3's, 3's 5's, 5's 7's, 7's 10's.
Rates are falling.
Volatility is melting,
and when you have high real rates, nobody wants tech or crypto.
You want that because they absorb the liquidity of negative cost of money.
When do you think this environment will end? How long? Years. Years. Why? Because we've had 25 years of monetary policy
punctuated with a 10x in the balance sheet.
Brad Gerstner, Altimeter Capital,
with a performative haircut
and the performative colorless black turtleneck.
He started in November 2028,
the low of the NASDAQ 100 at 1,018, on the way to 25K.
The balance sheet is at $897 billion.
Now it's $8.97 trillion.
He doesn't want to acknowledge that your frame is up by 10x?
And now people think rate cuts cause liquidity to grow.
They do not grow at the bottom of the steep curve in the lower rate structure.
It destroys money mechanically.
I can explain it, but not on this space.
It's too complicated.
We go over it all the time on mine.
But if you have the inverted yield curve like we had in 24,
in 24 and I said the inverted curve is going to cause them to cut more than guidance, even
and I said the inverted curve,
it's going to cause them to cut more than guidance,
a possibility of a mid-meeting cut if they only went 25 to steepen the curve.
We steepen the curve 229 basis points and Bitcoin melts up over four months and then
it stalls.
It stops going up before the S&P and before the NASDAQ. Why would you own Bitcoin if it's not going up longer and further
than S&P and NASDAQ 100?
Of course you don't want to.
Two weeks of that,
it was January 13th,
yields peaked on mortgage at 726,
10-year, 489, up 189.
Excuse me, 129.
And then Bitcoin peaks six days later.
It's not a month.
It's another month, 20 trading days.
It was February 19th.
The market rolled over.
Bitcoin's a short after two weeks.
It's short after two weeks.
The end of January, the beginning of February. Bitcoins are short after two weeks. Short after two weeks.
The end of January, the beginning of February.
It goes down to 75.091 on April 7th at 4.29 AM.
I post on covering. Because it stopped going down faster than the NASDAQ.
Why would you want to be short something
that's more volatile than the NASDAQ,
that's not giving you alpha going down?
Then we do Bitcoin denominator in its own volatility.
It's an endo-vega genesis.
It's just shorting, it's just monitoring something if it's getting too stretched.
If the volatility is not moving and the dealers aren't nervous and they're not buying skew, and lifting volatility.
It's just individual investors.
It's stretched, and it's not going to stay there.
That was September 18th.
Just chart it yourself.
Bitcoin, BTC, denominated DeVol, its own published volatility since 21.
Two weeks later, Bitcoin's going up, and this is not.
That's a sell.
Bitcoin peaks three days later, four days later, seven days later, you get the crash.
Because individuals got too long, too stretched.
The dealers were on the other side or the swing traders.
And then last Thursday, between five and six, six and seven, I posted.
Bitcoin had fallen 15% in a day.
Volatility had doubled.
Okay, it went up seven times as much as the paper.
That's telling you people are going to get fat and juicy shorting the puts.
I cover, I didn't get long, I covered.
6.55 last Thursday.
Down over 50%.
Crypto lost $2 trillion.
I'm just waiting for Vol to come down a little to take my position short.
Folks, you've got to watch things in the context of rates, in the context of volatility.
It's telling you a very large story.
People are on the wrong side.
They're defending it and they're losing their money.
And we're not actually deleveraging,, we're leveraging up. Why? Because we're
losing equity more than we're getting people liquidating their positions. And
you're putting more leverage in the system. And now that you have all these
companies, Walmart and the whole list we mentioned, everybody was short them to
buy tech. And when rates started going down and
these things went up under lower rates, you're squeezing the big tech. You're squeezing the
people along Amazon and Meta and Microsoft and Apple because they own them on leverage.
They overweighted them or they literally short them to buy them. And that is going bad. The
collateral is costing you money. When the two-year yield is falling and people think the dollar should be going down because
our rates are getting closer to other rates and they're not attractive and the dollar doesn't go
down then that model's not working when our rates are fall japan their 40-year, broke below the May 18th level, that 40-year, that was 4.1 basis points, and goes to 420 over 100x.
And now it's back down below, it's a 364, it's below the May 18th peak.
They're flattening us, and we're flattening Germany finally.
Germany's now at a three-month low of their rates.
Their inflation's 1.7, and they're saying,
oh, don't worry, it's going back up.
Well, if rates go down, they won't be able to make the loans.
They won't keep their inflation.
Inflation is falling around the world
if you look at the prices of assets like two-year treasuries
with four trillion of supply.
Not the Pischakaka, but if you didn't hear yesterday,
it's the most amazing thing any of you ever heard.
It's never happened before.
The primary dealers who took the leftovers from yesterday's bond auction
took under 6% of the bond auction, the lowest ever.
The natural demand for duration is the greatest and most voracious
despite what Rubini and Taleb and Druckenmiller and Fink and Diamond
who are all talking their book.
When you put on a steepener and you're losing money consistently on the bond or the note
and you're making the money on the two-year, just admit you're making the money on the two-year.
Cover your bond.
You're losing money on your bond and your note.
We're not steepening anymore you're making money on your two-year note and you're
throwing away money on the other stuff and that is eventually they're not going
to do that we're going to get lower and lower and lower yields and when you see
lower yields at a stronger dollar you'll remember this conversation lower
The lower yields will cause the rest of the world to cut their rates.
Why?
Because they get 87% of their credit out of their banks.
We only get 25% from our banks.
So lower rates stimulate the U.S.
And they devastate Europe.
So they will cut and they will go negative.
Switzerland is at zero rate
and they charge a fee
to any big lender who doesn't
have enough loans.
The U.S. is getting our growth.
We had a shutdown
in the fourth quarter. We're still growing
three and three quarters. The deficit is
collapsing. We have
a 143,
149 billion reduction. Excuse me. We have a $143 billion reduction in the deficit in four months.
That's going to cause us to lose 1.4% of our deficit.
And you've got the Office of Management and Budget saying,
the deficit's going up
So the idiots who listen to those liars because they're only allowed to acknowledge
1.8% growth in any of their models because of the fact of politics
But we're growing at 4% as far as the eye can see and
We're not going to have the deficit likely interest rates are going to come down
They're coming down on their own so So the interest expense is gonna come down.
The tax collections.
So we're losing our rate structure,
and it's bad for the banks,
and the banks are lending to tech.
Why do you think Blue Owl and Apollo and Hamilton,
all these guys are getting smashed?
These over-levered private credit
that led to the delicious AI data centers.
If anyone's ever heard of the term dark fiber, we're going to get dark data centers.
There's not enough power or capital to finish building out all these data centers that they're
talking about.
Please watch prices.
Do not listen to me.
Don't listen to a word I say if I ever disagree with a price.
And a price, obviously, is a liquid price,
not a $2 stock that trades by appointment.
All I do is tell you where I think prices will go.
So you ride the price and you stay just 1% longer
if it's in the direction, and you quickly exit if I'm wrong.
But we have falling rates that I've been calling for,
and there is not one person on Twitter, you can ask Grant Cardone, there's not one person who said
rates will go down, mortgage rates will go down, the economy will be fine. The only people that
you have said rates are going down, Snyder saying that, depression. David Rosenberg, depression.
Peter Schiff, stagflation, depression.
So they could have lower rates on, what's his name,
the guy with the bald head with the dominance word.
How to block him.
Benjamin Cowan?
No, he's good.
He's very good.
No, the guy, 300,000 followers, I forget his name.
Johnny Sins?
No, no, no, no, no.
Logan, with an L?
Anyway, it doesn't matter.
Everyone says, we have to have policy, we have to have QE, QE, to be able to get rates lower.
Folks, the rates are going to zero on their own.
Not with QE.
The QE pumped up tech.
It drove rates below where they want to be.
Rates are going where they want to be on their own.
And we're going to have the greatest time for Main Street.
Gap, are you kidding me?
Look at this thing.
Gap's got a gap. Look at this thing. Gap's going to gap.
Look at that thing.
People have money.
Nike, Lula, buy it.
Do your own research.
Rates aren't going to stop going down, folks.
Five below is less than five below
an all-time monthly closing high.
Lower energy prices, lower interest rates.
Remember, the GFC was the anomaly.
It was not normal.
Lehman Brothers had a rug pull by Obama's Treasury Secretary
who didn't pay his own taxes and still got to be in charge of the IRS
six weeks before the election.
If they were to bail out Lehman Brothers,
the markets would have gone too high
and McCain would have been the president.
They caused a giant margin call with no warning. Nobody thought they weren't going to bail them out. They bailed out everybody. AIG, Bear Stearns,
my beloved Bear Stearns, Merrill Lynch. They bailed out everybody, except Lehman, who was
bigger. They said they didn't have enough collateral. And the New York Times admits that Timothy Geithner,
New York Fed president Timothy Geithner,
said he didn't think there was enough collateral.
He didn't know that there were people at the Fed
that said there was collateral.
They had the calculations.
So he had his excuse to pull the rug.
And just for facts, you could go to Wikipedia or anywhere,
Timothy Geithner's father worked for the Ford Foundation,
who sent money to Obama's mother in Indonesia for a micro-lending.
So that family knew each other.
And he pulls the rug on Lehman Brothers and caused the global financial crisis,
and he gets rewarded with being charged a treasury.
And when they find out out he didn't pay taxes
and he was audited in 2003 and 2004,
he paid the back taxes and he was penalized.
Do you know he didn't go back and audit and amend 2001 and 2002?
He knew he made the mistake.
He stole from the American people.
He still was put in charge of the IRS.
It's an inside job.
Don't let rates go down.
Don't let mortgage rates go down.
Don't let low volatility stocks go up and leave them alone.
Don't let the all-time highs stay alone.
Join them.
Give them 1% of your money.
Get out of 1% of your legacy. Listen to Wabi when he
says it was okay to buy a stock outside of crypto. And he nailed it. We were talking about the legacy,
the last of the legacy, the memory guys. He loaded you up in San Disco. It doubled in no time.
That's over, folks. Look for other winners. Let him
direct you to other winners. Buy winners, sell losers. Do not be whale exit. David, where do you
see the triple Q going end of year, if you had to guess? I'm less concerned about the triple Q
than the SMH and the IGV, because Walmart's now there. Gilead is now in there. There's some buoyancy in the NASDAQ 100.
Much lower.
Is Microsoft going to finish the year above 299?
There's no way.
There's no way.
Next year, much lower than that.
Mortgage rates are telling you.
The two-year note is telling you there is too much lending.
The banks are going to get hurt
inflation isn't 2.4 it's not 1.4 the the inflation that's calculated by onus equivalent rent
rents are falling it's rising versus 12 months ago they're falling and they're not going to stop
falling as lower rates come in landlords can build new properties.
They can buy properties with less money and drop your rent versus what you're paying.
And you'll move across the street.
So you're thinking, I know you mentioned real estate you thought would probably come up, though.
Do you still think that?
Real estate is the asset class because it's leverage that you can put up over a decade.
So they're knocking out of the box cbre and all these other things just saying oh ai we're not going to be
able to rent the space anymore the the the real estate brokers are a problem folks we have 12
and a half trillion of of mortgage-backed securities seven and a half trillion of mortgage-backed securities,
seven and a half year average life according to Besson,
probably just a little less than that.
If you lose one year of average life because the prepayment speeds pick up,
it's like reverse Silicon Valley Bank.
When they thought the prepayment's going to be in four and a half years, they'd get 2% interest, they'd get 23% cash flow, 23% prepayments, to be in four and a half years. They get 2% interest. They get 23% cash
flow, 23% prepayments, 25% cash flow. Rates go up. Cash flow drops to 10%. They had a run on the
bank. What's the reverse? Lower rates, you get more cash. They then got to go buy the mortgages.
Mortgage rates are coming down. Did anyone think we would go down so fast other than me?
We're going to go down faster.
We're going to go from $604 to $499 on fixed rate mortgages before the election.
We're going to be at four and a half or less.
Before this year, the midterms, you're saying?
Yeah, yeah, yeah, yeah.
We lose 100 basis points in six months and 100 basis points in the next three months and the final 100 basis points in six months, and 100 basis points in the next three months,
and the final 100 basis points in the next month.
Because what's slowing that down is we've got $3 trillion of mortgages that we've got to eat through,
while Powell is busy rolling off $420 billion up to.
So we've got to find buyers for $3.5 trillion of mortgages.
Well, Trump started out with 400 billion
uh when his guy gets in that's another 400 billion because they're going to stop the roll-off that's
800 billion and then we get the faster prepayment speeds and the lower rates and then you get
microsoft and apple meta and amazon that's 12 trillion nvidia joins them that's 16 trillion google's gonna join them
that's 20 trillion that's a lot of money going into mortgages you're already seeing the bond by
26th of january i said i'm finally in i like to buy the low yield in the curve. David, I know that mortgage rates don't move in 100% conjunction with the Fed cuts.
It's more the bond market and expectations.
It's completely independent.
No, it's worse than that.
It's independent.
It's a mortgage wave function.
Sometimes the rate cut causes it to go down.
Sometimes it causes it to go down sometimes it causes to go up it relates to the shifting
duration from the proximal
or the near
part of the curve into the distal
the far part, you just flood the long
end of the curve like a Silicon Valley
bank, when rates
were low
it just shoved
steep in the curve
nobody was buying nobody's buying long assets It just shoved, steepened the curve.
Nobody was buying, nobody's buying long assets because the assets that they own, the mortgages,
lengthened.
So they didn't need to waste any money when they had new customers coming into the insurance
company or the pension.
They had the duration already.
So there are times when mortgages, when you cut rates, they go up. And that was when the curve was inverted.
And we said, you're going to get a massive steepener.
We said, you need the massive steepener.
And the banks wanted it.
Then we got the call from JP Morgan on September 12th.
And we steepened 115 basis points, 129 on the 10-year.
And that was in 24, before the cuts.
We said, this year before the cuts,
you're not getting anything near there.
At its peak,
we got 28 basis points.
And where are we now?
Today, we're below the start of the
second. The September 17th,
we're at 4.08.
We're at 4.05.
We're lower than the reach of the cuts.
So you're seeing inflation as the main driver for rates to go down.
Disinflation.
Right, right.
That's what I meant.
Disinflation.
It's dragging the rates down.
Can you clarify something for me?
Because I heard you say, you know, how their inflation data is wrong.
Of course it's wrong.
It's data.
Do you trust the government?
Do you trust the government? No, of it's danger but do you trust the government do you trust the government no i mean no of course the market honestly i don't know who to trust anymore do you trust the market you don't trust the market how can you put money into something
you don't think is a real price i don't trust the market but The two-year treasury yield. We'd all be billionaires.
The two-year treasury yield is the white and the red packets, the SOFR curve.
But I've heard you spit out a calculation number.
That's something else.
That's something else.
That's much more complicated.
My DRAP, my RDEP, my relative duration annihilation potential.
We have three times as much duration destruction as we did before the GFC caused a decade of disinflation.
We have three times as much as that.
But that's a longer-term forecast for why mortgage rates are going to go to 3% and tech gets slaughtered.
I'm talking about what's now, what's today, what can you measure?
What's a fact?
The two-year yield has broken below its 200-week moving average.
It's breaking down.
The five-year is below the Fed funds rate.
The two-year is nearing below the next cut.
The SOFR is at 970475.
That means they expect the terminal rate to be below 3%.
That's 66.5 basis points lower.
That's more than two cuts.
That's priced in today into deep liquid
multi-trillion dollar markets
not data that people
why do they not trust
anything Trump says
and for many good reasons
sometimes
why are they saying God gave us
this data, let's trade against
the data, because it hurts Trump
because it keeps rates up,
it keeps people miserable because they can't afford a mortgage. But when the two-year yield
keeps on melting down, and now we've broken down to a new three-year low, and people are short the
calls because Fed said, short the calls, higher for longer. And now the whole curve is going down and now Germany is
breaking down Japan is breaking down this whole this whole duration scam is
breaking down we have a shortage of global duration if you quantize
duration into its measurable components not the volatility of the vega juice the
real measurement add it all up.
We don't have a deficit.
The deficit goes away in three years.
Add it all up.
It's gone.
This is what happened with Clinton.
He ran a surplus
and he caused the global financial crisis.
He had to buck.
Greenspan begged him to cut taxes.
He begged him.
His ego, he wouldn't do it.
There was a shortage of treasuries.
Wall Street invented something to sell to China
that couldn't recycle the paper.
Steve Mnuchin is the name.
I'll tell you the story right after this,
and I'll let you have a thing back.
The global financial crisis was caused by we didn't have any treasuries to sell we're bringing in goods but we
don't have a deficit so Wall Street creates credit fault swaps that secure
it that then then they did they did the they did these that they chopped them up
then they did synthetics.
They had leverage on leverage on leverage on leverage.
And everyone says, oh, they had leverage then.
We don't have the leverage now.
Folks, we have more leverage now than at any time in the history of histories. When you have a staple that doesn't have call skew,
it means someone short that call skew, that's leverage squared.
Short volatility, that's leverage squared. Short volatility, that's leverage squared.
Okay, short skew, that's another level.
There's leverage you can't even imagine.
It's something I can't not see.
If you're going to keep on seeing staples, healthcare utilities,
as the ETF's going up, and some of the names going up
faster while tech is just soggy every once in a while you get a limp
counter trend people are telling you to DCA how about flow to winners and lose
your losers so mortgage rates are independent from the Fed funds rate the
mortgage function causes to react in a
particular way with a particular
structure where it is what still slope
it is it's very complex I'm directly in
touch or indirectly in touch with over
1 trillion of mortgage assets held by
model driven guys
Dear point. He's all over the internet. He's tremendous. He's involved with a lot of that
They're all model driven. They believe there's a steepener coming and it's not because there's a little engine inside the mortgage engine
Which tells you if you're bare stable?
You're actually bear flattening you need to have excuse me if you're bear stable you're actually bear flattening
you need to have excuse me if you're bull stable you're gonna cause an
acceleration you have to rally as a bull steepener or you trigger the stops and
you accelerate and that's in part because we have very little supply of
mortgages because so many of them are low coupon. So when people
are just
borrowing and they're not
borrowing enough and people want to lend,
there's so many more lenders
because as the rates go lower,
you could borrow at three right
now and a
SOFR contract. You could buy
a mortgage that's five. That's
2% with zero credit risk. That's two percent with zero credit risk.
That's carry trade. That builds up. But the lower the two year, the more that builds up,
because the two year going down will drive down the terminal rate of the Fed funds rate,
which right now is April of 2027. But that's been slow because of these discounted mortgages we have to work through
from the covet era but we're eating through them nicely so you have nine trillion try to eat three
trillion that's three to one we finish one trillion that's 10 against two that's not three to one
that's five to one we want more that's 11 to one that We want more, that's 11 to one, that's 9%. So you're 33, 25, 9.
You see that Nautilus acceleration?
That's why I say
you lose 100 basis points in six
months, 100 basis points
in three months, and 100 basis
points in a month. And the only thing we don't
know is the narrative at the election
whether Trump gets credit for it in
time or the Democrats get credit
for it.
So, David, the thesis
is that there's going to be
a shortage. There is a shortage now.
But, okay.
It'll become more key.
So there's going to be a massive shortage in long-duration
assets.
No. Long-duration
treasuries. Not assets. Treasasuries no yeah i want to be specific
hey guys i i just wanted to say this i've got about like 15 minutes
left um yeah i just i just want to put that out there and i don't know i'm gonna be real quick
give it back i'm gonna be real quick because i two minutes and give it back. I'm going to be real quick because I got to get off anyway. But David, so as the rates, what's going to, you're saying what's going to cause the dollar to get stronger is the increased demand for long duration treasuries because you're saying that.
What's the second order effect of that?
Well, what I take from what you're saying is that as the rates go down and we have a big refi wave.
That's it.
Right, right.
But as that happens, so it's basically going to be caused by the large investor,
like the large institutions or whatever it is that need long duration exposure.
To match their liabilities, it's regulatory.
It's not, it's bothersome.
Okay, so then they're going to flood the 10-year and the 30-year is what you're saying,
because there's no duration in MBS.
But as they're doing it, they're squeezing the juice,
the duration out of the MBS,
which is then going to squeeze the juice
out of the financials, the XLF.
XLF's going to get slaughtered.
Slaughtered.
IAI is the beta of XLF.
It's melting.
Schwab is the beta of IEF.
Schwab may not survive.
They've got a bank.
They've got a big problem.
So you nailed it.
But I wanted to highlight one last thing about that.
When Cathie Wood says, well, you can buy her stuff because she's long-duration assets,
the only problem with what she said is she's off by her sign.
She's negative duration.
Equity is negative duration.
So as equity decays, you have less negative duration, offsetting the duration
demand, and the duration demand grows as equities stop. So it's very complicated. We'll go on in
other spaces so other people can do it. Whether you want to come on mine or whether you come back
to Wabi, we'll go through it again. But we have the most powerful force in the system that shows up 15% of the time.
The rest of the time, don't listen.
There's nothing to see here.
15% of the time, we dominate, and that's now.
David, last question.
Real quick.
Because I know you're going to want to interject because there might be something that I say.
I'm on mute, buddy.
I'm on mute.
Okay. All right. you're going to want to interject because there might be something that i say it's but i'm on you buddy i'm on mute okay all right so in 2024 when we had the first powell cuts since whenever it was we had an inverted yield curve in september and when he did the first 50 he cut
for three straight months basically or not three straight but he cut september november december
we went inverted to a little bit less of inverted by December. When he cut the rates,
like the 30 year, I remember it went up like a percent, whether it was six to seven or 6.2 to
7.2, whatever it was in September, over three months. So the Warsh comes in, I know that the
curve isn't inverted right now. Is that the dynamic that you're seeing as to why if Warsh cuts,
we're not going to see,
you know, mortgage rates actually increase like they did in 2024? I mean, I understand too.
No, no, no. There are many moving parts. I'll tell you two things. Number one, the 30,
you went up 105 basis points. And it was done over three sequential meetings, 92 days.
The yield curve inverted, steepened rather, 229 basis points from funds to tens.
You drop 100, you rise 129.
What's primarily different of all the different moving vectors that are important
is that when you have an inverted yield curve,
there's zero people going from a fixed to an adjustable rate.
Zero.
When you're steep, you get some.
When you're steep, you get some.
When you're steep and low, you get a lot.
And that means people are canceling their fixed-rate mortgage
with a 30-year hedge,
and they're going over to a 5 or a 7 with a 5 or 7-year hedge.
And you're shrinking the supply of volatility
for market participants to buy,
so they're forced to then buy more long treasuries.
Warsh isn't going to do anything.
They're not going to give them the votes.
We don't care. It doesn't matter. Rates are coming down on their. Warsh isn't gonna do anything. They're not gonna give them the votes.
We don't care, it doesn't matter.
Rates are coming down on their own.
We don't need his help.
Mortgage rates are the engine that are gonna do it.
And when we're in this environment right now,
when the two year goes down, the rates go low.
Because you have low mortgage rates and low two year,
you're gonna build up massive domestic carry.
So it's not just going
to be the big investors. The speculators are going to take on Druckenmiller and Fink and Rubini
and all the steepeners and all the guys in all the world in mortgage. They're going to start
putting on flatteners. That's going to start forcing Europe to cut rates. That's going to
levitate the dollar. It will devastate the free cash flow of these tech companies,
and their bonds are going to get slaughtered.
Oracles at 155 are from 55, as their stock fell by 60%.
And I was the only one on the Internet the day that Software Cat said,
the order book, and she admitted it's coming from this guy,
little Sam Altman with his fables.
I said, go watch their paper. They're going to blow up.
Those aren't real orders. They're never getting that money from steve they're never getting those
orders from sam albin if it came from softbank if it came from microsoft maybe never from sam
albin he's a faker so they blew apart google just did a century bond do you know how juicy
i want to short that thing they would scream on the top of your lungs that it's over it's over it's over my voice I can't do it too
loud today it's over folks the last point Steve Mnuchin's dad was on the
floor of the New York Stock Exchange Alan Greenspan called him at six o'clock in
the morning on October 20th and he he said, buy everything you can.
We're adding liquidity later.
These firms were all insolvent.
From the Black Monday on October 19th,
Soros hit the stop for the portfolio insurance.
Soros made a fortune that day.
He gave it all back the next day.
He told them to buy. It wasn't inside information.
They needed to have the dealers,
you know, the
houses,
they needed
them to have money. So that stabilized
everything. David, I'm sorry.
I keep forgetting. The two
years at it's like three years low right now.
Three and a half. The yield is.
What did you say that your reasoning for that is for?
Why do you think that's happening other than people just buying it?
Because there's not enough borrowing.
You borrow when there's inflation.
You don't borrow when there's no inflation.
Nobody's borrowing.
There's more lenders than borrowers.
And it's accelerating.
Because real people are making the decision.
There is deflation in AI.
There is deflation in these tokens.
We'll never make money in these tokens.
Amazon down nine days in a row, 2006 level,
10 days goes back to 1997.
The capital is leaving where there's no profit
and it's going to where there is profit.
Who's gonna make money from AI?
All the Staples companies, they'll lower their costs. all the staples companies they'll lower their costs
all the healthcare companies they'll lower the cost to add innovation and all the utilities from
lower interest rates that's where all the money's going go where the money is and go with big cap
big cap goes first then middle cap goes after and then lower cap go with it go where it's liquid so
they're all they're all gonna make money because they're gonna i get Go where it's liquid. So they're all going to make money
because they're going to...
I get what you're saying about the staples.
But, and I know, I mean,
I just hear from what you're saying.
You feel so negatively about the infrastructure companies.
Don't you still need, like,
the compute and, like, more computing power to...
Who's going to own them?
The creditors or the equity holders?
They're not going away we had dark fiber the fiber they laid didn't get lit up until 2013 because someone came up with
software that sped up the fiber you didn't need to light up all of it we're going to have dark
data centers that you won't have the need for so people are going to write them up we're going to have dark data centers that you won't have the need for.
So people are going to write them up.
We're going to have a trillion dollars of data center write-off.
So when you see this chart going around that MAG-7 is only 2% higher earnings growth than the rest,
and that's explaining this, no, folks.
When FANG tells you what they're going to earn, they're telling you based on their order book. But their
order book is going to get cancelled
and those orders are going to get cancelled.
And watch Dell, watch SMCI,
watch CoreWeave.
Watch these things with debt.
We're going to go to town
shorting Microsoft debt.
We're going to have to short the stock
to hedge their paper.
Google, we're going to short... We're going to do to short the stock to hedge their paper. Google, we're going to short.
We're going to do to Google what we did to Oracle.
So you don't think that they're going to be spending money to secure electricity to run more compute?
What I'm telling you is the revenue that they're going to get is less than everybody thinks.
So they're going to buy less stuff.
They're not going to need to light everything up yet.
It'll take years till we get a Google,
we get a Facebook,
we get a YouTube.
And you think that that's going to show up
in the earnings reports this year
with like Q2, Q3?
For sure this year.
Q2, Q3.
Q2 guidance for Q3 or Q2.
What happens when the dollar goes up?
They're going to lose cash flow.
They're free cash flow.
They're going to lay off every...
Salesforce, are you kidding me?
They go to 50 bucks.
Service now, there's a glut showing up
and the prices are telling you
because real cost of money is rising.
Negative cost of money is going away and that blew up these inflations.
So what do you think Anthropic is going through Anthropic's head when they, you know,
when they bring in 50% more than they wanted to for Series G and their valuation?
Because they want that money.
They want to lock in the capital.
But what's it for?
Isn't it not to like expand, buy sites? No, it want to lock in the capital. But what's it for? Isn't it not to expand, buy sites?
No, it's to pay all the talent and pinch everyone when they're jumping ship over everywhere else.
You've got the smartest people at AI and at Anthropocene, the smartest people.
Who's at Microsoft?
You've got a million two people at Amazon.
Microsoft is filled with people that don't add any value.
These are going to be the winners.
And you're going to buy these at a fraction of their series.
They'll go public in years.
If they go public soon, the stocks will go down.
If they go public in years, you'll get them cheap.
They'll be the winners.
But they bought, they
drew down their credit line, basically.
Their market
access, so they can weather
the storm that's coming. Not because they've got
to spend through the nose. So they can
weather the storm. The storm
is coming, folks. And the two-year
is your barometer.
The two-year is your barometer.
Anyway, Wabi, thanks for the time,
buddy. I mean,
so much is happening. Don't look in the rear
of your mirror. And when we finish this,
I'm doing his bases. So anybody
that follows me should go over there.
Does anyone know why
the Israeli stock market's up
like 7x over the last few months?
It's just following the trend
of emerging gut? It's just following the trend with emerging.
It's peace. No, it's peace.
Emerging markets are going to get screwed. Do you know how much money is going
into Israel and Gaza? It's
$100 billion.
They're not going to be fighting terrorists
in five years, in three
years or two years. Did you see the
news conference with our energy secretary
and Delcy Rodriguez from Venezuela? We already got the first billion dollars from them
a billion for oil sales they're getting religion they're letting the political prisoners out
oil is going to forty dollars gold is going under three thousand iran will stop their games
is going under 3 000 iran will stop their games and there'll be a hundred bit it's a peace dividend
and it's a hundred billion dollars to rebuild the gaza and syria well all right guys thank you robbie
yeah i hope you guys have a long safe weekend as i stated earlier the space, it's going to be a long weekend, guys.
Markets are closed on Monday, so we'll be taking the day off.
But in case you guys are new here and you guys have enjoyed the stream over the last two hours,
my name's Wabi.
I go live here throughout the week, Monday through Friday, between 3.30 to 3.40 p.m. EST,
where we talk all things markets.
I want to give all the speakers a thank you.
Evan, David, Small Cap Sniper, and everyone else who came on up,
if I'm forgetting anything, but pretty sure I covered everyone who came up to speak today.
Give us a follow.
Give the BecauseBitcoin a follow.
Give all the other speakers a follow. Thank you you thank you once again have a good safe weekend
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