Transcript
Ryan Reynolds (0:00)
Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do@mintmobile.com.
Mint Mobile Representative (0:17)
Switch upfront payment of $45 for three month plan equivalent to $15 per month. Required intro rate first three months only, then full price plan options available, taxes and fees extra. See full terms@mintmobile.com so here we are today at 95,000.
Dan Taparo (0:33)
If we took short rates down back to zero, I think bitcoin would be probably closer to 300,000. Now I don't think they're going to zero just because the interest rate is a reflection of how much liquidity is being put into the system. And it's a whole bunch of other things. But this is just my back of the envelope. Guess we take the two year note back down to around 2%. Bitcoin's at 180. 180,000 with nothing else changed.
Host (1:10)
10T Holdings CEO and founder Dan Taparo joins the show now. Dan, welcome to Markets Daily.
Dan Taparo (1:18)
My pleasure to be here.
Host (1:20)
All right, I want to talk about some of what you've been saying on social media. I know that you tweeted recently about macro data that's signaling an economic slowdown. Talk to me a little bit about what you're watching. What should we be watching as we look to interpret what's going on in the economy and apply that to our investment strategies?
Dan Taparo (1:38)
Yeah, I, I think the way, you know, I was a long time for over 20 years as macro hedge fund manager, portfolio manager. And I basically, people, you know, don't really realize this. I probably spent, you know, essentially eight hours a day reading. You know, I was not trading every moment and this and that. You don't really do that. You do a lot of research, a lot of thinking and then you position and you have risk parameters around that. And what I was doing was essentially looking for outliers, looking for pieces of data that maybe weren't that obvious, that reflected something about a reality that I thought the market didn't know. And in any investment process, that's sort of what you're doing. But with macro, you're looking for these, I would call sort of second derivative pieces of data, little more esoteric pieces of data that turn at the right moments. And so I think the other day what you're referring to is the Richmond Manufacturing survey from the Fed, the employment component of it. Okay, so this is the employment component of a regional Federal Reserve survey. So not something that let's say is on the front page of the Wall Street Journal, but it collapsed down to a level where we were in 08, and it's actually below where we were during COVID Now, if you remember, during COVID the unemployment spiked pretty dramatically and 08, it was also very bad. And so right now, it sort of strikes me as funny, things don't feel that bad. The economy is still growing. We've had some issues out there with fiscal tightening being as aggressive as it has been with DOGE being active with federal spending being cut back, uncertainty on the tariffs. All those things are what I call fiscal tightening, fiscal austerity. And we don't have an offset on the monetary side, which ordinarily we do. The Federal Reserve has said for now that they're more concerned about inflation than they are about, you know, the slowing economy. I think you're going to, you're going to hear a change in their voice soon. So when I see a piece of data like that, I love posting it on Twitter because I feel like people out there, they're just not aware of these, you know, I would call them lesser data of lesser importance, but really like of, of of lesser importance or. But what you do is if you get 10 pieces of data like that that are showing you something that is very different than like what the market or what the populace or what the Wall Street Journal or whatever, whatever they're thinking, it tends to be, if you can get enough data, points a view into the future. And so that piece of data is very rare. Right? You could, you could almost argue in 40 years it's not been signaling that employment is going to be as weak in this survey as it is right now. That's. That seems to me a bit funny. I mean, a bit, you know, of an outlier. But then when I start getting 2, 3, 4, 5 things like that, I keep posting them, then that makes me think, okay, I know some, I'm a little ahead of the Fed here. The Fed hasn't gone, hasn't changed their posture publicly yet. And I think that the US two year note, which is the most sensitive indicator to macro US macro data, is leading federal funds rate. So the two year note yesterday hit 3.69. And the funds rate is, I mean, and the funds rate is over 4%. So I think the two years leading it down and I Think over the next six months, we could definitely see the Fed cut interest rates. And it's because there's a lot of data like this underneath the surface that is responding to uncertainty, concerns that tariffs may end up being too severe. And economic data can be shaped by expectations as much as by actual data, if you follow what I'm saying. A CEO can say, I'm confused by all the things going on in D.C. those 2,000 people that I was planning on hiring, well, I'm going to hold off. I'm not going to hire them. And if all those CEOs say that, at the same time it actually has a tremendous impact on the underlying economy. And that's called reflexivity. And, and that's the famous concept that George Soros first wrote about in the early in the mid-80s called the, in the Alchemy of finance book. And most macro trading is essentially, you know, a process of interpreting reflexivity before it kind of kicks in.