#763: The Everything Bubble Is Ending with Nick Nemeth

Summary

TFTC: A Bitcoin Podcast

Episode #763: The Everything Bubble Is Ending — With Nick Namus

Date: June 27, 2026
Host: Marty Bent
Guest: Nick Namus (Financial Expert & Analyst)

---

Episode Overview

In this wide-ranging conversation, Marty Bent sits down with financial analyst Nick Namus to dissect what they describe as the “end stage” of the so-called Everything Bubble, exploring the interconnected risks in private credit, private equity, insurance, real estate, and the broader financial system. They draw analogies from the 2008 crisis, detail mechanisms of leverage and moral hazard, and analyze the future for Bitcoin amidst growing systemic fragility. The episode also includes a candid critique of institutional players, the dangers of financial engineering, and a call for a genuine reset in economic structures—with a particular eye toward the lessons (and limits) of Bitcoin.

---

Key Discussion Points & Insights

1. Macro Backdrop: Systemic Fragility in the Financial System

• Freer Than Free Money & Central Bank Policy
  • Central banks have devalued fiat worldwide, fueling massive risk-taking and bubbles across asset classes.
  • Bitcoin is positioned as the ultimate beneficiary in a fiat devaluation regime.
  • Quote: “In a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor.” — Nick Namus [00:18]
• Shift in Narrative vs. Reality
  • Despite systemic credit risks receding from headlines, underlying stresses such as redemptions and private credit defaults are accelerating.
  • Headlines fade, but the “shark attack” continues beneath the surface, with periodic flare-ups.

2. Defaults, Leverage, and Private Markets

• Sectoral Defaults
  • Surprisingly, software is not leading in defaults—healthcare and consumer are under more stress. Software uses “payment in kind” (PIK) arrangements to delay cash defaults.
  • Example: Medallia defaulted despite positive EBITDA due to reliance on PIK and refusal by lenders to extend terms [02:28].
• Private Equity/Private Credit Quality
  • Many private equity portfolios filled with lower-quality assets compared to public markets.
  • The incentive structures encourage perpetual leverage: “leverage on leverage on leverage,” including margin loans and NAV (Net Asset Value) loans inside funds [07:18].
  • Institutional players (sovereign wealth funds, insurance firms) often employ even more leverage than traditional pension/endowment LPs.

3. Contagion Risk and Systemic Interconnections

• Contagion Channels
  • Private credit itself might not set off systemic contagion, but insurance companies with deep exposures could.
  • Wealth effects from private equity/credit losses hit the top 1–10%, where consumer spending is concentrated [05:32, 56:00].
• Leverage, Regulatory Blindness, & Incentive Failure
  • Regulatory capture and loopholes allow excessive related-party exposures (e.g., Apollo & Athene, violations of capital surplus rules).
  • Some “fortress balance sheets” are illusions built on goodwill and questionable marks. Example: Athene’s $4B capital supports $670B in liabilities [23:38].

4. The End of the Road: What Could Trigger Collapse?

• Possible Triggers
  • Rising defaults (especially if they hit software/AI-infrastructure sectors), markdowns, and risk-off events.
  • Slow institutional retreat already underway (“banks are offloading risky exposures”), but catalyst timing is impossible to predict [32:52].
• Secondary Market Liquidity Games
  • Explosion in secondary funds (e.g., Stepstone) marks a late-cycle scramble for exits and liquidity, sometimes relying on questionable marks and promotional narratives [38:20].

5. Role of the Fed, Moral Hazard, and Political Economy

• Policymaker Attitudes and Constraints
  • Unlikely that bailouts will be politically “as easy” next time, but skepticism is warranted: “I just don’t trust it necessarily.” [51:24]
• Elite Self-Dealing & Social Cohesion
  • Current system fosters “socialism for the rich” through repeated bailouts and systemic moral hazard, distorting true capitalism.
  • Real capitalism “requires losses;” class mobility is impossible without risk of downward mobility for elites [72:38].
  • Quote: “What we have is not capitalism. What we need is free markets, like legitimately free markets where there are losses.” — Nick Namus [72:38]

6. The Future of Bitcoin in a Crisis

• Short-Term Correlations
  • In a true systemic crisis, Bitcoin, along with cash and gold, is likely to fall as correlation between assets spikes—no immediate safe havens [13:10].
• Long-Term Thesis
  • Bitcoin’s role as a monetary alternative becomes clearer as trust in fiat erodes, but leadership/narrative issues could harm its adoption.
  • On Bitcoin Culture: Concerns that “if Micro Saylor is the face of it,” Bitcoin could fail to reach its potential due to credibility/narrative risk [95:00].
  • On Innovation: Emphasis on use-case-driven development (e.g., Block/Dorsey), Lightning Network, and everyday usability over financial engineering.

7. Historical Analogies and Final Thoughts

• Repeat of History
  • Cites Weimar Republic, Japan’s lost decades, the South Sea Bubble, and the “mini-depression” of the 1920s as warnings for ignoring excess and bailouts.
• Need for a Reset
  • Temporary acute pain (asset price drops, failed institutions) would pave way for a new “golden age” if the system is allowed to clear malinvestment.
  • Quote: “We need losses. We need to test the assumptions. Honestly, everyone needs to go to private equity networking events and just listen… the justifications, if you really test them…” — Nick Namus [58:54]

---

Notable Quotes & Memorable Moments

• "The best time to [buy gold] is not before the panic… when the panic actually comes, they sell it… wipe out years of gains." — Nick Namus [13:30]
• "Private equity guys… are five times levered into the fund… leveraged on leveraged…" — Nick Namus [07:18]
• "It's not a Ponzi scheme, but it's Ponzi-like." — Nick Namus [15:52]
• "All of the moral hazard that we've been dancing around… what if there’s not a bailout?" — Nick Namus [72:38]
• "We don’t have capitalism. It is socialism for the upper class… the inequality is exacerbated by socialism for the rich via these bailouts." — Marty Bent [71:53]
• "Saylor can be pouring in $70 billion and stopping $1 trillion from going in just by going on CNBC and saying… bullshit." — Nick Namus [96:32]

---

Timestamps for Key Segments

• Central Bank Policy, BTC bull case: [00:07–00:36]
• Private credit default mechanisms: [01:06–03:02]
• Leverage inside funds, global systemic risks: [06:08–09:47]
• Sovereign wealth funds’ risk (Saudis, Norway): [09:47–11:45]
• Gold as a liquidity source (Turkey gold sales): [13:15–13:30]
• Private equity-insurance interconnection, Athene/Apollo example: [18:41–23:35]
• Discussion of rating agency inaction, Big Short analogies: [32:02–34:52]
• Secondary funds, evidence of late cycle: [37:51–41:50]
• Concerns over bailouts, Fed (Warsh), and political risk: [43:53–48:25]
• Class mobility, socialism for the rich: [72:38–74:37]
• Bitcoin risk, Saylor critique: [94:36–99:00]
• Bitcoin and "digital credit," Lightning-network priorities: [99:00–104:30]

---

Tone and Style

The episode maintains a critical yet occasionally irreverent tone, mixing metaphors (“Ponzi-like,” “shark attack,” “juice to the gills”) with market analogies and historical callbacks. Both participants are unafraid to challenge mainstream narratives, poke at the financial elite, and interrogate sacred cows within the Bitcoin community. The conversation shifts fluidly between sharp, technical takes and satirical social commentary.

---

Summary for Non-Listeners

This episode is an incisive, sometimes biting dissecting of the instability at the heart of today’s financial system. From private equity’s dangerous leverage games to insurance entanglements and the questionable sustainability of “free money” policies, Marty Bent and Nick Namus lay bare the mechanisms and consequences of systemic moral hazard. They argue that only a true economic reset—one involving losses and a return to genuine capitalism—will set the stage for robust, equitable recovery. For Bitcoiners, the message is clear: the asset’s ultimate test is still to come, and clarity of vision and leadership will be just as critical as code.

---

For further detail, listen to the full episode or check out Marty's "best newsletter in Bitcoin" for ongoing analysis.

Transcript

[Host (possibly a financial or Bitcoin-focused podcast host)]

You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all, all the central banks going nuts. So it's all acting like safe haven.

[Nick Namus (guest, financial expert or analyst)]

I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Probably should be. Probably should be.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Nick Namus. It's a pleasure to meet you in person, sir.

[Nick Namus (guest, financial expert or analyst)]

Yeah, it's good to see. It's been two months since our first

[Host (possibly a financial or Bitcoin-focused podcast host)]

conversation and what has happened since I was telling you. It seems like the whole systemic credit contagion headlines that were in the news when we first spoke have, have left the headlines, but it seems like there's still progression, the back end in terms of redemptions, redemption gating and actually saw we wrote about in the newsletter yesterday, private credit issuance and underwriting is down like 40% month on month.

[Nick Namus (guest, financial expert or analyst)]

Yeah, it's like in March, if you were looking at the AI token numbers, they were just going up, but AI stocks were falling off the cliff. So there's a little bit of, there's, it's, it's not making sense. Right. Because if you look at the defaults, redemptions, everything's going up but the narrative, you know, people get tired of hearing about it until the next shoe drops. And during something like this that's deteriorating, it's almost like a shark attack. Maybe like the shark will nibble you and get your calf and then it'll go swim off and you think you're fine and then it comes back and like takes your leg.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, what's, what's new on the default front? What, what sectors are defaulting?

[Nick Namus (guest, financial expert or analyst)]

So it's actually really interesting. I, I've done a lot of work into this and I keep on expecting software to be up at the top and it's not. It's like healthcare and consumer. So software is basically at average levels and again a lot of it's pick payment in kind, which is these guys just instead of paying your credit card minimum every single month, they're just like, okay, just keep on rolling it up and if you don't have any cash commitment, you can't default. I mean maybe they'll call it quits. But the medallion, you remember hearing the medallion story. Your audience probably knows that. I'll get like really specific.

[Host (possibly a financial or Bitcoin-focused podcast host)]

What is the Medallion story.

[Nick Namus (guest, financial expert or analyst)]

So, so Medallia had half cash, half pick. So they had some cash component and they actually were ebitda positive by $200 million. But they defaulted on their debt because one, EBITDA is not cash flow, but two, they wanted to ask Blackstone like hey, can we switch this over to pick? And Blackstone was like, nah, we're not, we're not really going to do that. For a business that's not likely, not growing.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And for those who are unaware, these, these payment in kind loans, they come with egregiously higher carrying costs too.

[Nick Namus (guest, financial expert or analyst)]

Yeah, it's like 14%. So if you look at US equities, the S&P 500 is much higher quality equities with moats. You know, there's some junk in there, there's some value traps in there. But generally speaking, these are some of the best companies in the world. What's in these private equity and private credit portfolios? If you look through Tama Bravo, I'm like, what are these companies? I'll see a couple cyber companies that I'll know like McAfee or whatever and the rest are like the, the narrative that they go out and say these are quality companies, these are great companies. And I'm looking through and it's like and plural site that's Chegg for techish employees to learn how to use a CRM.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Like now they're just prompting Claude like

[Nick Namus (guest, financial expert or analyst)]

how do I exactly. They're just like Claude, go do that. And there might be some value in infrastructure of software, but that value is likely in the public markets. Databricks is in the private markets, might be a great one, but there's definitely a lower quality in software and we haven't even seen that in defaults yet. So when that picks up and joins the consumer and the healthcare, we're already seeing 2008 level defaults. So I mean people don't seem to care until they do care.

[Host (possibly a financial or Bitcoin-focused podcast host)]

But defaults from a rate of default perspective or magnitude of defaults, I want

[Nick Namus (guest, financial expert or analyst)]

the rate of default. But I wonder on the magnitude. It's definitely more because the asset class is bigger. But I wonder, just segmenting out, is the lower middle market doing worse than the middle market doing worse than the big software companies? That's something I don't have off the top of my head. Good idea though.

[Host (possibly a financial or Bitcoin-focused podcast host)]

No, I think that's something we. Not that, but another thing we touched on a couple months ago that I'm still trying to wrap my head. Is this systemic? How much contagion risk can, can come from this, this private credit market specifically, and that's what we focused on predominantly in the first conversation is the intermingling of private credit and the insurance goes. And you're. From what I recall your, your basically thought process is that it's not necessarily private credit that could incite this contagion risk. It's the insurance that are insurance companies that are exposed to it.

[Nick Namus (guest, financial expert or analyst)]

I think private credit would incite the insurance which would infect the system wherever there's a massive wealth effect to the negative side. I also think it's systemic. So if you're thinking about private equity guys, and I just wrote this up yesterday, two days ago, if they're driving the economy because they're the highest income earners and they're relying on their carry and their carry doesn't come and they're also sometimes five times levered into the fund, you know, subsidized. Maybe the loan subsidized by their fund or this huge GP financing industry.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, on this note, I watched your video describing this. I don't think many people realize this, but when you run a fund, you're expected to invest in the fund and it's not always coming out of pocket.

[Nick Namus (guest, financial expert or analyst)]

No, they don't have the money for the numbers that they're contributing. I mean if you. The thing is with private credit and this idea as well, at first principle, it kind of makes sense. You want to have skin in the game and help us want to see that you have skin in the game. But the way that it's gone and I've been meeting in New York City and when I heard the extent of that, I mean we're talking Greenwich Homes being secured for a margin loan into private equity that some of these funds you may not get back for 15 years.

[Host (possibly a financial or Bitcoin-focused podcast host)]

What's it called? Asset portfolio. You loan against your asset portfolio. They have a typical mortgage.

[Nick Namus (guest, financial expert or analyst)]

No, no. Yeah, I, I think that might be what it's called. But then there's on the underlying portfolios or stat. So you have NAV loans and this is all basing. So you have the private credit and you have the private equity.

[Host (possibly a financial or Bitcoin-focused podcast host)]

If you're just not mark to market consistently.

[Nick Namus (guest, financial expert or analyst)]

No, well, I, nobody trusts the marks. If you ask these guys in private credit, you know, hey, is this company actually worth 3 billion? The answer more likely than not is maybe like maybe when we extend it for four years and it recovers the multiple or something like that. It's always hope about the future and it's very untested. If you talk to private markets guys they're not like public markets guys. You may see a personality difference. Private market guys talk slower. Public market guys little like cuckoo for Cocoa Puff sometimes they're constantly. Because they need to play speed chess and people will tell you you're dumb. Private markets for 15 years has been told that they're the greatest gift to earth and they believe it. And maybe they're the ones that started this story. So I think that a lot of the stories that are being told and again, you could be five times levered into the fund. By the way, the Saudis are happy to see that they are going to Norges bank, the bank of Norway, and giving them $100 million of treasuries and getting a billion dollars back minus a haircut. Then they'll put out of that $100,000,000 that turned into a billion dollars. $250,000,000 in this fund and $250,000,000 into this fund and $250 million into this fund. So the LPs, the GPs are levered. Pension funds are less levered, endowments are less levered. But the sovereign wealth funds and certain players on the LP side are extremely levered. So inside the fund you have leverage. Then on the portfolio level, let's just say it's a billion dollar fund, they'll take out 200, $200 million of debt on the whole portfolio, which is the first lean to the portfolio. Then they'll invest, do leverage buyouts of companies at an extremely high leverage rate. So it's leverage and do leverage and do leverage.

[Host (possibly a financial or Bitcoin-focused podcast host)]

So what you just described there, I think highlights to me where this could become systemic. Going back to the Saudi Norway bank. Yeah, levering up.

[Nick Namus (guest, financial expert or analyst)]

People don't think about that.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Levering up 10x and then spreading a two $250 million chunks around different funds and the Norwegian banks looking to make a return on that billion dollars that or that $900 million that they lent you.

[Nick Namus (guest, financial expert or analyst)]

They are incredibly smart. So if they pull the plug on the Saudis and say, hey, we need more money, we need more money, the Saudis are going to go ask the US for US dollar swaps, as they have done, just to get more money and to stay levered into the system because their cash flows are good, but do not support their massive real estate build outs and the full, not even remotely close to the full equity of their investments across the world. That's mainly in the us A lot of that's illiquid. So there is a massive amount of globe sovereign wealth fund risk. I believe the Norwegians are Better. You know, Swiss might be better, but I have a particular concern about the Arabs that everyone think they have infinite money. Their economies are collapsing right now. And, you know, if you make, I don't know, a trillion dollars per year, I forget their. Their GDP, but I guess maybe 250 billion naturally could go into markets after they spend their real estate and whatever investments they're doing at home, they're deploying a lot more than that. There's. There's no. They don't have the money printer. They have to get access to our money printer. So I'm, like, slightly concerned about the Arabs in just the system.

[Host (possibly a financial or Bitcoin-focused podcast host)]

What's going on in their economies.

[Nick Namus (guest, financial expert or analyst)]

Well, tourism's falling off a cliff because the Iran war.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

And a lot of pipelines have been slowed or stopped. The Qataris, uae, Saudis. And they're just shoving. They're. Right now, they're just shoving. Right. During March, they bought a lot of puts they didn't sell. Like, these guys don't sell. And a lot of people have this perspective that markets just go up. You just gotta buy yourself time. And I think that's creating a massive bubble everywhere.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. No, and you think about it, too. You look at Dixie, Dixie strengthening, and that would validate what you just said, because that's what I've been talking about it on my Monday show with John Arnold.

[Nick Namus (guest, financial expert or analyst)]

Hard. It's been strengthening hard.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, it's. Because where else are you going to go? Especially if you're blowing out the Middle east and you have this AI wave hitting here, who knows that wave is going to crash or not? But if you're looking for a return, you got to come to US Capital markets. Yeah.

[Nick Namus (guest, financial expert or analyst)]

I mean, people ask me, what's a safe place if this plays out poorly. I'm not a perma bear. Right. I try to make money wherever I see the best place to make money. I had to force myself to buy on the Gap up in April. Right. And I was like, the market should not be going up right now. It just shouldn't. But it is. So I just got to force myself to buy something. And then the week, a week later, you know, I'm like, okay, what's the most irrational thing to buy right now? What? Like, what should I not be buying? Okay, I'm going to buy that. But yeah, ultimately people ask like, hey, if this goes, you know, the way that you think will eventually go, what do I buy? And I'm like, cash. Like, you buy cash. Because even Treasuries will come down initially. Even Bitcoin will come down initially. Even gold will come down initially. All the assets are correlated and there's no real place to hide. And that's kind of a scary thing.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, maybe we're already seeing that. Right. A lot of people in bitcoin describe bitcoin as this liquidity alarm bell that

[Nick Namus (guest, financial expert or analyst)]

acts leading indicator and precious metals do as well. Because again, you saw turkey sell a bunch of gold.

[Host (possibly a financial or Bitcoin-focused podcast host)]

If there's like, turkey, Excuse you.

[Nick Namus (guest, financial expert or analyst)]

What?

[Host (possibly a financial or Bitcoin-focused podcast host)]

Turkey?

[Nick Namus (guest, financial expert or analyst)]

Yeah, they're gay. Yeah. When you see big players really need liquidity, they sell gold and that's scary, you know, so people, people like, will buy it when they're worried about something, but not when they're panicking. And you gotta wait until, like, there's dust settles in order to be like, okay, there's gonna be a bailout or whatever. You know, that's how people typically justify buying precious metals. There's gonna be a lot of money printing. But the best time to do it is not like it's not before the panic. People will be hedging out over two, three years on gold. And then when the panic actually comes, they'll sell it and I'll just be down. So. So massively in a couple of days. Might wipe out years of gains.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. Because we actually wrote about in our newsletter this morning, 45% of central banks have signaled that they're going to increase their gold holdings year on year from 26 to 27. The pace of buying over the last three years is surpassing, I believe, the decade previous. So they have been stacking a lot of gold.

[Nick Namus (guest, financial expert or analyst)]

And the price, the price isn't showing that.

[Host (possibly a financial or Bitcoin-focused podcast host)]

No, no, no, it's not. That's. Maybe these are lagging indicators from last year when the price was ripping. But again, bringing this back to like, systemic risk contagion where it may break out. Like, give us an update on the interplay between private credit and insurance.

[Nick Namus (guest, financial expert or analyst)]

Yeah, so I think that's the bomb. You know, I, I talk about the big picture because it's. It all happens at the same time. There's so much leverage built into the system. People want to talk about, oh, the consumer's not as leveraged as it was in 08. And it's like their home values are fake. Like, you know, those homes aren't worth that much. Right. Especially if you look forward to, you know, the boomer retirement. You know, next 10, 15 years, they're all going to be retired and a lot of them are going to be selling their homes for one, for one reason or another. So, you know, the Home mortgages that are at all time highs. People are like, but home equities are at all time highs. And I'm like, yeah, a little bit, you know, something egregiously high.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

On the total residential real estate market, then you have credit cards at all time highs. You have asset backed lending, which they're doing burritos and you know, used car loans, Carvana, So you know, everything. Mortgage backed securities, commercial mortgage backed securities. Like the commercial real estate market is God awful right now. You know, so it's all these asset classes and they all move together. But the private credit is the worst, most untested part of credit. It's not all bad, but it's a lot of real bad junk. And people usually get off the stop in the exit where they go, do the banks have a lot of this? And for you and me, they do, but for their balance sheets now they don't have a lot of it. Or they'll look at the fact sheets from Aries, Blackstone, blackrock, all, all of them. Everyone is in this like it was the, it was the freest money on earth because you don't have to follow interest rates. You know, you just mark your little Excel spreadsheet every quarter or every month. So you all just started rushing to it. It's the greatest story in Earth. And at a certain point you got to find new buyers. Right? It's, you know, it's not a Ponzi scheme, but it's Ponzi like. And you see like a desperation when all of a sudden the money's not coming in because, you know, Bernie Madoff said he had 10, 15% returns every single year. Very smooth. All of a sudden, you know, it's all of a sudden the assets are going down and people are like struggling for liquidity and wanting their money back. And he can't find. And typically, you know, just human psychology, then they start panicking and they go into the next one. And right now it's 4 1ks. But prior to that, all the wealthy people had made money from 2010 to 2017 in private equity. And they actually survived 2008 because a lot of funds could just be extended through it. And they mostly recovered. They started looking for insurance because they're looking back to Warren Buffett. And we talked about this last time and they're like, well, you can take a big balance sheet and just take risk with it. Right? It makes sense.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And for those who didn't hear our first conversation, where the risk is introduced there, where it may differ from Buffett strategies that these private equity funds were getting large, I think like majority ownership stakes in these insurers and then replacing the asset manager of the insurance program with themselves and then feeding that investment capital into other products that they control.

[Nick Namus (guest, financial expert or analyst)]

Yeah. So the alternatives, the private placements,

[Host (possibly a financial or Bitcoin-focused podcast host)]

that's

[Nick Namus (guest, financial expert or analyst)]

where they make the money. Right. So they're, they've been maxing out immediately. They get all the assets. Warren Buffett was buying value stocks, Coca Cola. It's better than buying just bonds, right. Typ. You know, before the mutual insurance era, it was a lot of bonds. At some point it got into high yields and then Executive Life blew up. So there has been like historical blow ups, but there weren't a lot of equities, especially in the 50s. So. So Warren Buffett was like, hey, like got $100 million here. Why don't we put 10%, 15% in value stocks and you buy the business for like 5 million, 10 million bucks. So then all of a sudden it's like you're levered, but it kind of spreads out. And if you do really good underwriting, you can make a lot of money.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. And his whole play is like we're buying value stocks that have a track record, that are sustainable, that are sort of embedded. I mean, I mean for Berkshire, halfway, a lot of cultural brands, Coke, the insurance company, Geico, all that established economies of scale, pretty predictable cash flows. But bringing this back to like private equity buying these insurers like their, yeah, private credit funds are more speculative in nature.

[Nick Namus (guest, financial expert or analyst)]

Yeah. And Al. Yes. So Buffett was really good at just being completely ignorant of, I mean he would address it, but he somehow would just put the blinders on and he would be like, can this business handle everything inside of a portfolio? Where I may be wrong a few times, but is this just going to stay intact through whatever cycle comes? And he would do intelligently, but he would look for pristine balance sheets with moats that are operating in a cash flow basis. And private equity was like, okay, like we can do that, but let's charge 2% fees. Carry lever up these businesses a lot. The businesses rarely have moats. You know, if you look through these portfolio companies, you wouldn't recognize the names. It's not like See's Candy or Coca Cola. So they took it to the limit and then the limit kept on moving. Almost every year, especially over the past five years, it's accelerated. This private equity push to insurance probably started with a, with Athene's founding. So Apollo co founded Athene and they ended up buying It. And those are two points in this that marked the beginning in the acceleration, in my point of view. And the regulators are supposed to stop this, Right? But the regulators have been allowing it. And they'll literally have rules that say, you can't put this more than this much in, you know, affiliated paper, which is Apollo, owns a theme, and these investments are underwritten by Apollo. And we are trying to see if Athene is safe.

[Host (possibly a financial or Bitcoin-focused podcast host)]

So you like related parties.

[Nick Namus (guest, financial expert or analyst)]

Exactly. So it's supposed to be half of the capital surplus or. Or 10% of assets, but the lesser of the two. And we are talking about, I believe it's 26 times what the limit should be. Apollo and Athene. And this regulator in Iowa, he goes, sure, sign it. And then he has the audacity to go out there and say, well, we really, you know, we really shouldn't allow this. Should. Shouldn't be happening. And it's like, you're allowing it, buddy. He's like, oh, I wish we could see what's in Bermuda. And it's like, athene's in Bermuda. Like you're allowing that to happen. So, you know, there's a lot of perverse incentives. And I guess what I would say to, like, bring it to, okay, this is systemic, is if this blows up, these balance sheets are levered 30. If you're a mutual fund, it might be 15, but MassMutual is horrendous to 60 to 90 times. And when you look at Athene, and I've done a lot of work on this, because I think that there's going to be money made shorting it. If you look at a theme's capital surplus, they say 20 billion. Oh, fortress balance sheet. It's like, okay, how about we take out the goodwill and the amortized sales credits, all of a sudden it drops down 16 billion. So the 20 billion becomes 4 billion. And then you can take out other capital that's intangible not.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And that 4 billion supporting how much in liability?

[Nick Namus (guest, financial expert or analyst)]

$670 billion. It's insane. And people just think these Apollo guys are so smart that they can.

[Host (possibly a financial or Bitcoin-focused podcast host)]

They're smart in a sly way.

[Nick Namus (guest, financial expert or analyst)]

They are so. They're so evil. They are smart. They're good with the narrative. I'll. I'll give Mark Rowan that. The hubris, the arrogance. And you can see it. They will. They do a couple things intelligently compared to peers. They pull away from certain industries that they just feel like the crowd's getting in and they'll go to the next one. But they run a risk level that

[Host (possibly a financial or Bitcoin-focused podcast host)]

is,

[Nick Namus (guest, financial expert or analyst)]

I think it's, it's higher at a bigger scale than anything that's ever happened in financial history. I keep on going back to the South Sea bubble where there was a government, a private, private partnership with the government, where for the time I feel like maybe that would rival this scale. And people were like, oh, the government's behind it. And the poems and the first person accounts that I see kind of feel similar. Other than that it's not 2008.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Sup freaks? This work was brought to you by our good friends at bitkey. Guys, things happen, things get lost. You need to replace your phone. Life happens. And bitkey has been designed with this in mind. So if you're looking for the easiest way to secure your bitcoin off the exchange, go get a bit key doesn't come with any seed phrases. There's no single point of failure. It's a two or three multisig. You have your device, you have the mobile app and block stores a key in the server. So you have collaborative multi sig there. On top of that, the new bit key has a screen so you can actually see and verify what you're approving. You can look at transactions, addresses, account changes. The difference between trusting and knowing has been built into the new bit key with the screen they've changed code delegation and other advanced features like inheritance recovery. If you're looking to get your bitcoin off exchange, you haven't done so you're looking for the easiest way to do that. Go get a bit key. You can use our code today TFTC to get 10% off the new bit key. So go download the bit key app, use the code TFTC to get 10% off the new BitKey and start your self custody journey today. This episode has been sponsored by our good friends at bitkey Freaks. Look at me, I'm glowing. I've got like an angel's halo going around me. You know why that is? I feel good, I feel taken care of, I feel blessed, healthy, happy. That is because I'm a crowd health member. My family and I have been crowd health members for five years now. Literally this month, five years ago, we joined crowd health. We've had two babies, we've had multiple health events and we're never going back to health insurance. Crowd health is crowdfunded health care. So you sign up for crowdhealth, you pay monthly fee, you help out with other people's bills, and it's significantly cheaper than health insurance. We were on cobra. It's a family of three. When I left my last job before I went full time to tftc, went on the crowd health. Now as a family of five, we pay, I believe $700 a month. It's significantly cheaper. They're going to negotiate prices lower for you. They've consistently negotiated healthcare prices as much as 50, 60, 80% in many cases. They help out with babies. If you have a pregnancy, you pay the first $3,000 and the CR covers the rest. If you have a regular health event, you pay $500 and the crowd pays the rest. Go to joincrowd health.com sign up today. Use the code TFTC. Opt out of health insurance. I'm uninsured, baby, and I love it. Use the code [e-mail] and you'll get $99 a month for the first three months that you're on the crowd health platform in the community. Bitcoiners, you found sovereign money. Now find sovereign health and sovereign healthcare. There are many people who listen to our first episode. It's like, is this guy, does he know what he's talking about? But I DM'd you a good friend at a big four bank working on basically their private credit desk who texted me immediately after listening to our episode. He's like, he's dead. Right? Showed me some presentations that they've been going around giving warning about this risk. And there are people in the industry, particularly in banking, commercial banking, that understand this risk exists. They're trying to point it out. But from what I understand, a lot of people on the inside have been hitting you up independently as well. What are they saying?

[Nick Namus (guest, financial expert or analyst)]

Well, it's 50, 50. So when it comes to insurance, there is some, the smartest people that I know, I try to, I talk to, like, especially people that you've known for years. They will look at it and they'll look at the statutory equity and the gap equity and they'll read the sell side reports and they'll just be like, there's, you got to reconcile that. You know, and then I spend four months going through 10,000 page filings over multiple years for 680 insurers. And I'll come back to them and I'll be like, I reconciled this, this gap equity. What Fitch and Moody's are saying is the capital surplus in Bermuda, it's not real. And then they go, okay, these things are going to take longer than you think. Right. So there is that side that just, you know, it's been a bull market for 15 years. And even long, short guys are mostly just trying to stay afloat on. On their shorts. Then on the other side, I have to say that there is an extreme understanding that there's a massive problem that could infect absolutely everything. The question is the timing. But there is, and I don't want to lead myself too much there, There is a content. There is a segment of the hedge fund community. It's not the tiger cubs, right? Tiger cubs are, you know, beaten, raised, beaten rays. Oh, no. Beaten raise. That's it. They're not looking to really make money on the short side, generally speaking. But there is a segment of the hedge fund community that's trying to do work and get their hands around this. And I think the banking guys like more, more. 25% of them actually kind of understand. And it's just sort of because I've been on this for so long and doing so much work and talking to so many people and getting inflows, I can tell that it's picking up intensity.

[Host (possibly a financial or Bitcoin-focused podcast host)]

What's the, the spectrum of timelines that people on the inside that understand this?

[Nick Namus (guest, financial expert or analyst)]

That's the trillion dollar question.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. Well, what are, what are their, their inclinations in terms of.

[Nick Namus (guest, financial expert or analyst)]

People are scarred and they look back to 2007, 2006, and they don't want to be too early and blown out. I'm, you know, with a few, A few partners, I'm like, you can make this carry neutral, right? You can get paid to wait and then when it blows up, you'll lose on something and you'll make a whole lot more on something else. But I think we're talking in quarters. I don't think we're talking in years. And I get, I understand the wisdom of like, hey, it's not going to happen as soon as you, you, you think. But I also think at the same time, it happens sooner than you think and it happens quicker than you think. So the work that I've done and continue to do, I mean, it was like two days when Mythos came out, just auditing my work. In one night. I spent 1500 bucks. I'm like, yeah, you got it in

[Host (possibly a financial or Bitcoin-focused podcast host)]

before they pulled it out.

[Nick Namus (guest, financial expert or analyst)]

Yeah. And then they took it away from me. I felt like I'd been broken up with. It was the worst thing ever. I had all these ideas. I saw our future together.

[Host (possibly a financial or Bitcoin-focused podcast host)]

But it was worth that fifteen hundred dollars.

[Nick Namus (guest, financial expert or analyst)]

It was worth that fifteen hundred dollars. Mythos is really good at, you know, whatever the next gen model is. I'm sure they're all going to do this really good at segmenting out and tackling large data sets sort of almost agentically inside of a prompt. So it would put out 120 sub agen and just do one task and then 70 more and do another task. And I was kind of shocked because I'm used to opus, like I gotta type this out, ask me questions, let's go through it, let's make a game plan. Which gave great output, but Mythos was just ripping it. I was like, oh yeah, go get them, go get them.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, thinking of again and it's probably annoying to hear this time and time again, particularly for me, but it's like what is, what is the, the match that lights the fuse? And thinking back to 08 as an analog and the big short, it was

[Nick Namus (guest, financial expert or analyst)]

just, it was just defaults in 08, you know.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, yeah, we remember the part of the big short where things are defaulting, but the writing agencies refused to, to downgrade a lot of those mortgage backed security investments and the CDOs. So like it's just purely defaults.

[Nick Namus (guest, financial expert or analyst)]

And I think it could be, I think it could be four or so things.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, because also when that was going on, like defaults were rising, rating agencies weren't moving, but the banks were offloading their books.

[Nick Namus (guest, financial expert or analyst)]

And I think that's starting to happen.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. And that's, that's the point I'm getting. Is that happening right now?

[Nick Namus (guest, financial expert or analyst)]

Yeah. So they'll do it uniquely, right? Maybe they'll sell a swap against it, do a bonds. I'm not inside an investment bank, but I do kind of hear things. I have friends and I talk to them. They're definitely cutting back the risk. And when it comes to the funding mechanisms like these guys got basically commercial paper sometimes for these BDCs and the funds that Jamie Dimon is sitting there with his hands on the rug, right? And you know he's gonna rug pull and he's gonna be right. Because you're, it's your financial best interest to not take the loss. And you may know that by pulling this rug, it's gonna blow up. But it's not your responsibility, right? It's not your responsibility to help Cliff Water have liquidity. Right? So I do think that the institutions, qualified institutional buyers, whatever funders, they're really starting to get their hands around this. And ultimately it's only a matter of time. You know, maybe it's not this quarter, maybe it's not next quarter, but could be three or four quarters from now. And you know, as defaults continue to Go up again. Software hasn't even defaulted yet. Right. You know the idea I see a lot of people that say well AI is you know, AI is a bubble so software has to be fine. Like there's a potential and I think AI is more fine than probably the consensus these days. There's a potential that the. There's no ROI on hyperscalers and software explodes and they've just rushed into hyperscalers in order to diversify away from software.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well that's what I was going to bring up. Maybe that's the match is right. You have all these hyperscalers that have funded their capex build out via cash flows for the last three years and you had Google come out last month and do an equity raise at participated in but next they're going to have to go to debt markets to really. And they're starting to.

[Nick Namus (guest, financial expert or analyst)]

They've done more than people understand that

[Host (possibly a financial or Bitcoin-focused podcast host)]

markets that's a big question like do they go to really tap the debt markets and then all these private credit funds are like we don't have the cash or we need to get liquidity or do the private credit funds view this as like a Hail Mary? Like yes, let's pile into this and hopefully the ROI makes our nutback on the back end.

[Nick Namus (guest, financial expert or analyst)]

They don't, they don't know how to have reservation when allocating capital their businesses to allocate capital. They get paid to allocate capital. There's no and maybe it's not the best time. They're just thinking kind of like a rat in a maze, you know, oh, we're getting burned on software. Like we gotta go here and now they're going to energy. Like they just go. And that's a huge problem if you think about what private markets are supposed to be. It's like stuff that's not going to do well in public markets because it's not popular and it's quirky and you know you can make good return just by maybe pretty ing it up but mostly just operating it well and you know it's cheap now they're like Blackstone is like ooh year's 2021. What's hot enterprise SaaS and infrastructure. Okay, let's do a bunch of green and a bunch of you know rapper like the 10 times ARR software application that was built by 25 guys and you know built upon since but it you know has some revenue and seems to be on a good trajectory. You know every year since it's like they just go into the hot stuff. Okay now it's data centers now it's you know, going to be energy because they can see oil prices. Well, we think it's going to stay above $70. So let's go into that and also we are underexposed there. It's like yeah, but you guys are writing seven year loans. Like if you go into the hottest thing every single year and expect to exit in seven years, it's not like a public markets person where you know you can buy the momentum and if you know how to get out, you'll make money. These guys have no liquidity. So they're going in at not at already elevated multiples, in some cases extremely elevated multiples, expecting in seven to 10 years that while clipping a management fee every single year that there's going to be a multiple expansion and EBITDA is going to grow so well.

[Host (possibly a financial or Bitcoin-focused podcast host)]

I mean and I think to solve this problem, within the last few years you've seen these secondary funds get raised where somebody will go raise a fund basically to buy secondaries from private equity VC funds that have underwritten and deployed capital and their fund life cycle is coming up and they need to, to get liquidity back to their LPs and so they'll basically go to a secondary fund, sell their share and the secondary fund will take on that risk.

[Nick Namus (guest, financial expert or analyst)]

My favorite, one of my favorite shorts, I have a few favorite shorts is Stepstone. Stepstone is a secondary platform, used to be institutional went towards retail. Pays a massive sales credit 3.5% for one share class to sucker people in day one markups does it, you know, on average I think that's 3% of their returns throughout their portfolio. But then they'll mark up day two and day three they will tout the SpaceX made a bunch of money on SpaceX. The small lines in Anduril and Anthropic. The rest is hidden in these SPVs. Nobody has any idea what they are. And you know that it's enterprise SaaS and it's infrastructure and it's stuff that like one of them is called Peggy Aggregator, LLC ones. I have a tweet where I just go through and I'm like reading through and I'm just highlighting the craziest names for these SPVs that make absolutely no sense. And then I actually like tried to, tried to figure out what they were. I was like no, okay. Or a couple of them. I did figure it out and I excluded those. So Stepstone, that's an example of what's happening in the private market. Hamilton Lane's another One, they're just trying to get liquidity. We're in the end of the cycle. Okay? I don't care what anyone says. It's been a long cycle, it's been a great cycle. You might not think it's going to end as poorly as I do. Okay, that's fine. We are closer to the end than the beginning. And these guys are like, oh, SpaceX this year, like, this is going to CAGR 10, 15% like their gains right now. They think next year they're going to have 10% more and the next year they're going to have 10% more. And Stepstone particularly is paying mostly for executives, basically 60% of their market cap because they built this retail business.

[Host (possibly a financial or Bitcoin-focused podcast host)]

What?

[Nick Namus (guest, financial expert or analyst)]

Yes. On a multiple of 2026 and 2027, it's like 50% 26. They're going to exercise the pot. That's an assumption. 50% of 2026 is unrealized gains. 40% of 2025 unrealized gains. And this is like the best, this is the best IPO market ever, especially for a secondary platform. Typically, getting good shares in the secondary market's hard, but like SpaceX was a very unique situation that had a lot of liquidity because it was private for

[Host (possibly a financial or Bitcoin-focused podcast host)]

a long time and now it's below where.

[Nick Namus (guest, financial expert or analyst)]

And they're going to dilute the crap out of common out of shareholders. And the stories that they tell. I'm like, man, you guys are dumb.

[Host (possibly a financial or Bitcoin-focused podcast host)]

SpaceX or the investors?

[Nick Namus (guest, financial expert or analyst)]

Stepstone, the analysts. I came out with a short report and all of a sudden it was right before the earnings call and all of a sudden all of the analysts were reading a line to ask from my short report. I swear to God, they had never asked any of those questions before. And all of a sudden they're all asking about the put and the SpaceX valuation and how much it was marked up. And the answers were hurt, horrendous. Besides the first call, typically they give a softball like it's a fake hardball.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Who was answering these questions? The underwriters or SpaceX?

[Nick Namus (guest, financial expert or analyst)]

No, the Stepstone executives.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Okay.

[Nick Namus (guest, financial expert or analyst)]

That made this deal with their sub agents.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Oh, so you're, you were telling the LP analyst in Stepson to ask these questions?

[Nick Namus (guest, financial expert or analyst)]

No, it's the, it's the step. The sell side analyst. Oh, after the earnings.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Stepson public.

[Nick Namus (guest, financial expert or analyst)]

Stepstones public.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, there we go.

[Nick Namus (guest, financial expert or analyst)]

Patent public. And all of a sudden it's like, all right, guys, like, thanks. You know, there's a lot, a lot more to come in my view.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Sup freaks? This rip is brought to you by good friends at Lygos Finance. Celsius Blockfi ftx. They took your bitcoin and gambled it away. Lygos can't because they never hold it. Non custodial lending on Bitcoin's base layer. Your keys, your collateral. It's verifiable on chain. Go to Lygos Finance. Tell them that TFTC sent you sup freaks. When you take bitcoin seriously, you start with custody. You want to control your keys, avoid single points of failure and make sure your savings cannot disappear because you or someone else screwed up. That is what Unchained has been focused on since 2016. Unchained is the leader in collaborative multi sig custody and bitcoin financial services that keep you in control. They secure over $12 billion in Bitcoin for more than 12,000 clients. That means about one out of every 200 Bitcoin sits inside an unchained vault. Their model is simple. You hold two keys, they hold one key. And it always takes two keys to move bitcoin. Meaning their single key can't access your bitcoin on its own. Just resilient shared custody that gives you institutional grade security while keeping you sovereign. Unchained also lets you trade straight from your vault. Access bitcoin backed commercial loans, open a bitcoin IRA where you hold your own keys instead of personal business, trust or retirement vaults. They even offer inheritance solutions built for long term hodlers. Or opt for the highest level private client service with unchained signature and get a dedicated account manager, discounted trading fees, exclusive access to events and features and much much more. If you want a partner that helps you secure and grow your Bitcoin without giving up control, go to unchained.com and use the code TFTC10 at check to get 10% off your new Bitcoin multisig vault. That's TFTC tenchain.com well another interesting twist here too is with Wash coming in, I mean last week's FOMC meeting I think he made it pretty explicit that he doesn't really want to do bailouts this time around like he wants. He yeah, there's so many articulate the definition of a recession is when you have over levered over indebted companies that that got over their skis actually just dying off because that's, that's what should happen and so it'll be interesting to see if that does manifest and he does let him go.

[Nick Namus (guest, financial expert or analyst)]

Everything he says like 95% I agree with if you just look at the history of war at Morgan Stanley, they were like, he doesn't do work. He just walks around and pats people on the back and says like Sabra, what are you working on, bruh? And then he marries a billionaire heiress and all of a sudden is in the Bush administration. If you look at reports of what he did in the Bush administration, he was just like setting up meetings and shaking hands and being the networker guy. Then he becomes Fed governor because apparently he did a good job at that. The worst track record on record of identifying crisis and responding to them out of probably any of the Fed governors. And then he's like a Stanford professor after that. I don't know. Works for Druckenmiller, probably setting up meetings and, and giving him chit chats. And now he's controlling the economy. He has good ideas. Like I do think that he is intelligent on a intellectual theory basis. But when shit hits the fan, those types of people have no idea. You know, you may see it for making money. The smartest people, you know, the Isaac Newtons of the world, have no idea what to do when shit hits the fan. In it's not the speed chess that

[Host (possibly a financial or Bitcoin-focused podcast host)]

you famously aped into the East India Company at the top, right?

[Nick Namus (guest, financial expert or analyst)]

It was. Yeah, yeah, 17, 20.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah,

[Nick Namus (guest, financial expert or analyst)]

yeah. So it's like Rick Reeder is actually a genius. I get that he works at Black Rock, but I've grown up listening to him. Every time Rick Reeder is on cnbc, I'm like turning up the volume and I'm just listening on my. And he's like, he uses his hands. I feel like intelligent people when they're trying to explain something simply they use their hands a lot. And I just feel like he's just conjuring a mental model that is sufficient to handle most scenarios versus when I look at Warsh, I'm like, I don't know if he really understands these things. It's different to build a mental model versus to follow a wave of, you know, intelligent discussion.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, that's another question too. Does it really matter? Because it seems pretty clear that the whole thrust of the Trump administration going back two years now in the lead up to the 2024 election was we're going to basically go back to a Fed treasury accord where they're going to work in some patico. And since the administration has come into office the beginning of last year, they've really sort of leaned into, for lack of a better term, nationalization of core sectors of the economy, putting direct investments in companies like intel and other infrastructure companies. And it seems like we are as a country and as at the treasury and at the executive level, like on wartime footing in terms of the nationalization of parts of the economy. So is there like a Treasury bailout that manifest through all this? Maybe it's not. Maybe it's not a bailout of private equity. It's just like a, hey, private equity got over their skis, over indebted. Maybe that's why Wash is out there saying we're not doing bailouts this time. But AI being a systemic national security risk as identified by the administration of like, hey, we're going to let that fail, but we're going to ensure that this infrastructure build out sustains. Yeah, no, I'm there for that.

[Nick Namus (guest, financial expert or analyst)]

It doesn't help these portfolios because you're screwed at 90, 90%. It doesn't matter if the government backstops 10%. Right? It just doesn't. I do think that if hits the fan there's going to be like a, you know, new deal that's going to be UBI and pushing AI. Like that's the fiscal response that I would imagine. It's just you can't print enough money for true systemic distrust to be jawboned. You can't. There's only $22 trillion of US dollars in circulation. We're talking about asset classes that are extreme multiples of that. Right? So if you double the money supply, okay, but what if people still don't want to own that stuff? Right? You could double the money supply and you could buy private equity companies, right, based on how much they're levered, maybe have a little bit to spare.

[Host (possibly a financial or Bitcoin-focused podcast host)]

But I don't want that to happen. Like, I mean it's gonna suck, but

[Nick Namus (guest, financial expert or analyst)]

the dollar is gonna be worth nothing.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

And, and by the way, more importantly,

[Host (possibly a financial or Bitcoin-focused podcast host)]

like you should have a fail back loop of failures.

[Nick Namus (guest, financial expert or analyst)]

There's so much moral hazard in all of this. You know, it would take three hours to explain the incentives at each level and you have to follow one to a trail and you're like, oh, but this is a different moral hazard. We have to come back to that. And they are like tied. And it's this, you know, tree of how this incentive system has done exactly what it's done. We gotta let it fail. And like last time I'm talking and I sound like a sour post, like we need the market to crash and I'm like, would it be that bad? Right? I get that young people take more risk and we're going to get smoked. And it's, it is what it is. But imagine just clearing the deck and all of a sudden maybe you can buy a home in the Hamptons for 2 million bucks again. So you might go back to, you know, not much, but you have skills, right? You have the opportunity, you have the youth and you have the vigor. And by the way, those vacation, those Florida homes might be 150 grand, right? They're 750 grand now. Someone's going to get liquidated. You can buy a foreclosed house and you can have a winter home as well. If we just let this stuff deliver, it would be so much healthier. And the only way I can describe it is like, it's like somebody that has like a real, like cerebral palsy or something, and you're just putting steroids into them and you're like, okay, are you like, better? Like, you're not. You're just juice to the gills, like, and, and eventually it's going to be worse. And it's going to be worse the longer that it happens and the more cycles. Because every time that the repo market blows up, a hedge fund is like, oh my God, we're going to lose all our money. And then, you know, everyone hears about it in like certain circles and the Fed comes in and just like completely seals it. That guy's fine. Three more hedge funds are going to step up their risk, right? And it happens every single place. Like every time we bail out people, the. There's people with a thousand residential homes, you know, in the Sunbelt State because they heard that was a great idea. And they're all renting, rent rental properties. They think that housing price is never going to go down again because last time it was too hard. So, you know, this time they're just, it's just not going to happen. So they can take a billion dollars of debt or $250 million of debt to do that. Just like, can we just clean out a little bit of the greed in the system?

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, you would hope. That's the question. Again, going back to Marsh's comments last week, like, is he actually going to stick by them?

[Nick Namus (guest, financial expert or analyst)]

Yeah, I mean, I hope so. So that's a good comment. Good comment. Don't want to criticize the comment. I just don't trust it necessarily.

[Host (possibly a financial or Bitcoin-focused podcast host)]

I will imagine the thick of the madness. They're like it, we got to fill this hole. Let's just print the money.

[Nick Namus (guest, financial expert or analyst)]

Yeah. So when people, when people. I, I do worry about Warsh not being independent, but do you really They've

[Host (possibly a financial or Bitcoin-focused podcast host)]

never really been independent.

[Nick Namus (guest, financial expert or analyst)]

They've never been known.

[Host (possibly a financial or Bitcoin-focused podcast host)]

They've never been of independence.

[Nick Namus (guest, financial expert or analyst)]

But I think that Warsh is actually.

[Host (possibly a financial or Bitcoin-focused podcast host)]

I actually find the. The. The explicit cooperation a bit refreshing, where it's like, all right, you're not pissing on my face and tell me it's raining.

[Nick Namus (guest, financial expert or analyst)]

I think that there's an opportunity to call, you know, a cat. A cat. But I'm worried about his dependency on. Not Trump. Trump thinks he's his guy. Warsh is not Trump's guy. Warsh is the guys of the people that are currently backing Trump. Right. And if they switch sides, Warsh is immediately anti Trump. Trump's saying Warsh is the worst pick ever. I can't believe I did this.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, that's. I mean, we've had a shout out to Matt Dines, who's on the show a few weeks ago, and he said explicitly that same thing where it's like, you have this sort of American heritage rich that are backing Trump to preserve. I mean, this gets into a whole meta layer, negative. One discussion of, like, what is America? And, like, what are we trying to do here? And his argument was that, like, washes old heritage Americans be sent old heritage Americans. Trump backed by old heritage Americans to preserve American autonomy in this transition to the digital age, where the Davos class would like us to sort of be subsumed by their view of the world. And.

[Nick Namus (guest, financial expert or analyst)]

Yeah, I think it's a different group than Davos.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Oh, it is.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

That's. Yeah, yeah.

[Nick Namus (guest, financial expert or analyst)]

But it. But I. But it is.

[Host (possibly a financial or Bitcoin-focused podcast host)]

It is an elite group.

[Nick Namus (guest, financial expert or analyst)]

Yeah, it's.

[Host (possibly a financial or Bitcoin-focused podcast host)]

But it's an elite group that's like Davos. That's not the direction we're going. Like, we're. We're going in this direction.

[Nick Namus (guest, financial expert or analyst)]

Yeah. So all of those guys operate in circles that have feedback loops that rarely tell them they're wrong. I'm gonna say that they don't get it. They don't get it. Like, I don't think they're evil. You know, I. It takes a lot for me to think people are evil. Bibi Netanyahu might be evil, but these, you know, rich East Hampton guys, they have nice wives and they have nice dinner parties, and they talk nice ideas, and it's kind of like fencing, and they're intellectualizing everything. They do not understand the way that this will be perceived if it doesn't go to plan. If Warsh ends up being a bad pick and he's tied to a billionaire heiress, and that billionaire heiress is member of these four clubs, and Warsh is a member of these three clubs and they're in such a bubble that they think like, well, like there's always people that are going to hate us for being successful. Like, what if you actually drastically lose the country and everyone knows exactly what, you know, circles you're running in, who your friends are. We're just like publicly friends with, you know, a lot of people that do not want to be public and on photos. And it's like, guys, the elitist domination of this country is only going to hurt the elitist and it's only going to lead us into fascism or communism. Like just put your guys are successful, go enjoy the beach. Like stop trying to control everything.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, I mean, and this goes back to something we were discussing earlier, which is sort of the dynamics of the guys running PE funds and how they can afford their lifestyle using portfolios to get loans out to do all that. But I was at a presentation by Brown Brothers the other week, I got invited and it was a great presentation. Their lead economists basically pulled up the chart of the K shaped economy and showed that there's, I mean you've seen the headlines like the American consumer is alive and well, spending's up, consumer spending's up. And he pulled up a chart that said like the top 10% is driving 50% of consumer spending within the last year when historically that that sort of ratio of the top 10% driving consumer spending should be somewhere near like 30, maybe 20 to 30%. So you're wholly dependent on that top 10% and then within that top 10%, the top 1 to 0.1%, which is the individuals that are involved with private equity and other types of hedge funds. And I think from a self preservation perspective, what you're getting at here too, it's like, hey, you need to realize like this is not going to work unless more people are participating in the wealth effect and able to actually go and go about their lives and put a roof over their heads, buy food and enjoy some, some paltry luxuries. I guess I would say like just

[Nick Namus (guest, financial expert or analyst)]

like a steak dinner on a Friday.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Exactly. And that's like, I think what you're getting at is like the social incohesion that can arise from mishandling this. And I think you just look at consumer spending and the portion of it that's being driven by the top 10% and I think that's proof in the pudding. Like, hey, like if you guys this up on the private equity side, like not only are you going to mess up your own life you're going to ruin the economy. And so we need to figure out a way to like land that plane and get everybody back on a level playing field. There's a little bit of a ramble, but it's something I stoked in my mind while you're saying that.

[Nick Namus (guest, financial expert or analyst)]

No, yeah, well, exactly right. The problem is convincing those people that maybe they got a little bit lucky and they're not God's gift to earth is hard. You know, I just want to delineate when I'm talking about the people in private equity that make a lot of money and are potentially going to lose their homes and to take their kids out of private school. I'm not talking about the people that have the 50 million home dollar home in Southampton or Montauk or whatever or Nantucket and are pulling political strings behind the scenes that do not benefit them. And they're seeing one step ahead and not realizing maybe you should allow some competitive dynamic and you know, a capitalist democracy, if you will, of ideas.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, I think that's another important part. Like I am involved with the private equity fund on the VC side, like I am in this world as well. And I think the point that's important to make is that these things aren't inherently bad in and of themselves. It's just like the risk that's been allowed to take on in some pockets of the market is so extreme, it's creating a systemic risk. And it's not to say that we should never have private equity. You need sort of capital allocators out there to invest in people with moonshot ideas. I mean, Valor Atomics I think is a great example of this. In the last week, able to spin up a nuclear reactor in nine months wouldn't have happened without private equity venture capital dollars coming in the room. Like these things are necessary functions for society and the economy to progress. But it's just like as long as losses are allowed. Exactly.

[Nick Namus (guest, financial expert or analyst)]

Like, I love risk. I get it. Listen, I want to see somebody, you know, hit 100x, but there's got to be at least 50 zeros, right? You can't have this. And what's happened in Silicon Valley, like, yes, we've over the past 25 years had a lot of technological innovation and a lot of people have made a lot of money helping businesses become world changing. Right. But it's been too much of a game and a grift and you know, it's kind of just leading it up and everyone knows it's going to tank, but we IPO it, right? And it's too much of a club. And the good stuff you keep private, that whole, like everything just needs to be stress tested. And I think 50% of venture capital, 50% of private equity, 50% of potentially insurance. It's all, it's. Let's just focus on the private equity. I think 50% of private equity funds are going to be gone in the next 10 years. Right. It's gotten too crowded. It's gotten too crowded. We need losses. We need to test the assumptions. And honestly, everyone needs to go to his private equity networking events and just listen. Hey, we create value by having buying an accounting firm and a janitor service. And then the janitor service cleans the floor of the accounting firm and the accounting firm does the taxes for the janitor firm. Value creation. You know, we.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Synergies.

[Nick Namus (guest, financial expert or analyst)]

Synergies, right? It's like, it's insane if you listen to these guys. It's insane. Yeah. And there are really smart people in every industry but private equity, particularly on the top. You know, if you go to the top 5% of intelligence. And these are probably firms that nobody's heard of, right? Same thing with hedge funds, but I think it's the top 15%. There are obviously smart people in every industry. Mark Rowan, I think he's evil, but he's a smart guy. John Gray, not so smart. Mark Rowan, pretty smart. Eric Getty, Aronati, Michael Aaron, who's the lawyer.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Aaronadi.

[Nick Namus (guest, financial expert or analyst)]

Yeah, yeah. So Michael Aronati of Aries, he's smart, but those guys are just allocating way too much tech capital. And they're so deep into it that they're just Texas hedging by going everywhere at this point in time. But there are plenty of $30 billion private equity funds. You know, I was talking to a private equity fund a week ago and I was like, just good ideas, bouncing ideas back and forth. It lays over to the public markets, which is where I play. But they're generally intelligent people in the industry. But there's 80% nonsense and the consensus on how to create value and what value PE is or real estate, private equity, lower middle markets is the best opportunity. Like the justifications, if you really test them. And again, public market guys get tested all the time, right? If you go out and say, I like service now someone's going to say, you're an idiot. And you say, I'm not an idiot. Here's why I'm not an idiot. And he says, you are an idiot. Here's why you're. You're an idiot. Right. It's a dialectic and, and, and it's quite frequently discussed on social media or otherwise.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, the information's free.

[Nick Namus (guest, financial expert or analyst)]

You can't short private equity.

[Host (possibly a financial or Bitcoin-focused podcast host)]

It's open. So you have like information. There's not perfect information.

[Nick Namus (guest, financial expert or analyst)]

Yes, there's more information available. The public filings do a lot because then you really have evidence. The amount of work that I've had to do in these private credit portfolio portcos using alternative data sets like just going crazy on web traffic and you know, sales surveys, everything in order to try to figure out is this company doing well, all of that stuff. If you're in the public market, the way this is going to end, I think and the way that should end and everyone should say that it should end, you have to file at least a consolidated statement of that, you know, is audited that says how the business is doing and we don't even know the covenants of these loans. But just more transparency would do wonders because then it would be pretty hard to argue that plural site should be marked. Marked at 100 cents.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Right.

[Nick Namus (guest, financial expert or analyst)]

Or 97 cents in some portfolios. That's the Chegg company check, check. Because we see in the public market, yeah, companies go down 95 and then the same companies in private equity portfolio in a different flavor and it's at par. Right. Or you know what they bought it, bought it for four years ago. Just it doesn't make any sense. But you also can't short it. Right. You can't go into now there's some cds on private credit bdcs but you can't go into thoma bravo's fund 7 and be like you guys are terrible. I'm just going to short all of this. The public marks are here. These public software companies are way better. These businesses are not growing, they're not cash flow positive. You underwrote them like idiots. And now, sure, maybe three of them will survive, but the value is certainly going to be lower. The fact that you cannot short this stuff. I think, you know, people talk about shorts and they say that they're an evil upon the face of the earth.

[Host (possibly a financial or Bitcoin-focused podcast host)]

They're throwing short sellers in jail.

[Nick Namus (guest, financial expert or analyst)]

Yeah, a couple weeks ago I think left was a little sketchy. But yeah, I mean the bears are going to jail. The bears are dead. The bears are legitimately dead. And it's like, but like you need some bears otherwise the deers are going to run rampant. And that's what. If you press the typical private equity or private credit person on assumptions. They look like a dough, they look like a Dough with an oncoming 18 wheeler and they just like default to the same five things that they say justifies their existence.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, well, I mean, this is why I do what I do. I've been doing this show for nine years now, which is hard to believe. I think a lot of this, I mean, the bears are dying. Their extinction is almost predetermined by the monetary system. Like going back to that Saudi Norwegian bank. The fact that you can lever up 10x on $100 million, get a billion dollars from money printed out on nothing is the whole problem. So it's floating all these values across the board. Whether it's private equity portfolios, they're able to take loans out or raise a secondary fund to get cash, like keep it afloat, Real estate prices, same thing. Because there's no feedback mechanism. Not only will the government and the central banks not allow these things to fail, they'll back it up with printed money that'll paper over it. And that's why I'm so passionate about bitcoin, because I think bitcoin brings back a true opportunity cost to the market where you're forced away capital allocation decisions. And there is a true cost to fucking up that allocation, which is we can't print more bitcoin. So you got to figure out what is actually providing value in cash flow. And I think that's a core part of the like. Again, going to layer negative one. It's like the money, literally how the monetary system operates does not allow for this.

[Nick Namus (guest, financial expert or analyst)]

I think the feedback mechanism is you identify a risk, the risk doesn't. You know, people cry wealth so many times, right? It doesn't materialize into a crisis and then you're back at the next risk that you identify. And that loop has happened so many times where it hasn't blown up recently. And you know, the memory of people that are investing today that they think it's just always going to happen. But the thing is, you look through financial history, things work for a long time before, you know, eventually they stop working. Japan is a great example and it's recent. You know, they created a bubble and they did, you know, a lot of quantitative easing. And then all of a sudden they didn't have an economy that grew for 20 years, right? But you can look back to the UK, you can look back to the Netherlands, you can look back to the Roman Empire, right? And you know, Ray Dalio, I think he says some things that, you know, again, like these guys cry wolf too much. That's kind of the problem, right? And Then all of a sudden, people are like, well, everything he said was wrong. And it's like, no, some of that's actually true. You're just living on a time frame that is. Well, when he first heard that, I was in high school. And now, you know, I've got a wife and my baby's crying, and I don't even want to hear that shit anymore.

[Host (possibly a financial or Bitcoin-focused podcast host)]

I mean, we get it a lot in the bitcoin space. Yeah, we're crying wolf all the time.

[Nick Namus (guest, financial expert or analyst)]

Yes. Now, the bitcoin people, I think, are directionally correct, but they have been kind of scarred. Kind of like the gold people, where, you know, they're like, yeah, it's all. It's all. It's all. We're just going to buy bitcoin. You know, it's some. Maybe too much some as a hedge, and, you know, you can't print more bitcoin. And we'll just leave it at that. It takes, like, CTE or a certain amount of brain damage to, like, consistently be like, okay, well, I see the risk. Okay, It's. I really want to identify it.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Six concussions here.

[Nick Namus (guest, financial expert or analyst)]

Yeah, I really want to do a tremendous amount of work for, you know, six months on end in order to encapsulate this risk. And, you know, maybe there's a new exit that's invented, but I don't think the old exit is going to work. And, you know, you can come off as schizophrenic. Like, it's. It's a. It's a tough thing, and it's easier to just say, yeah, it's bullshit, and I'll just buy a little bit of this and I'll be intelligent. But the vast majority of people are like, you know, you're a perma bear. If you, like, talk about anything bearish.

[Host (possibly a financial or Bitcoin-focused podcast host)]

A vast majority of people aren't even aware of. They're not even, like, dichotomy.

[Nick Namus (guest, financial expert or analyst)]

I live in. I live in circles where we debate this same. The average American has no freaking idea what's going on. And I just see a turn where everyone realizes it's. And it's going to go completely different than what our leaders think. And, you know, our leaders are so like the. You know, the East Hampton private equity finance crowd. They think that they're just going to be able to say, like, socialism is.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Segway Pipeline did.

[Nick Namus (guest, financial expert or analyst)]

Yeah,

[Host (possibly a financial or Bitcoin-focused podcast host)]

I'm interjecting with some Instagram meme. If it's, like, become a meme now. Yeah, Segway Pipeline played lacrosse in an Ivy. So go to private Equity live in the Hamptons.

[Nick Namus (guest, financial expert or analyst)]

Yes, definitely. Super. I think humor does an amazing job of like telling truth. Right. There's. Do you know the guy on TikTok that is like private equity? Yeah. Do you know what that guy's name is?

[Host (possibly a financial or Bitcoin-focused podcast host)]

The. Yeah, the private equity. Like.

[Nick Namus (guest, financial expert or analyst)]

Yeah, Mr. Private Equity. Whatever. It's, it's, it's so true. And I think it tells where this is going to go because I think that the majority of financial elite think that they have to worry about socialism and socialism is all they have to worry about. But a populace that can intelligently talk about free markets and how the markets aren't free and it's been entitled to a certain segment and it's been sort of like a regulated monopolies times 100 in every single industry and capital capture being political capital and isn't a socialist. They're so unprepared to deal with that narrative. And I think it's going to swing extremely hard. And sure there's going to be socialists and there's going to be some whack jobs, but I think that there's a very intelligent argument that these guys are not God's gift to earth. No.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And one could argue, I think you make a strong argument, I have made it before, that we do live in a socialist society. Just socialism for the rich via these bailouts.

[Nick Namus (guest, financial expert or analyst)]

Yes.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And that's what really, that's where the real dangerous trap is, is again going back to. I mean it's objectively true. The vast majority of Americans have no idea what's going on. They'll just know that something happens in the markets, it blows up and they'll blame capitalism for it. We don't have capitalism.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And the socialists use that as an inroad to see, say capitalism got us into this situation, your home value went down, you lost your job because the capitalist system failed. But we do not live in a capitalist society. It is socialism for the, the upper class. Again, I want to be very clear, I'm not trying to denigrate, Denigrate, excuse me, wealth creation or wealth inequality. Wealth inequality is just a foregone conclusion of human society. There are inequalities between each individual. I think Thomas Sowell said it perfectly. No one man is equal to himself on a day to day basis. Like inequality is going to exist. But I think the inequality is exacerbated by socialism for the rich via these bailouts.

[Nick Namus (guest, financial expert or analyst)]

We need class mobility and what that takes is the ability to go from the lower class to the upper class to the middle class. The Upper middle class, whatever you want to say, but also from the upper class to the middle class, also potentially from the upper class to the lower class. And I think that there's, the people are kind of like, oh, the company country could swing to like actual AOC socialism or. And those, those are the identified opposition. But I think you could thread the needle intelligently and explain it to the average American that hey, socialism doesn't really work. Like there's ample evidence of that. But also what we have is not capitalism. And what we need is free markets, like legitimately free markets where there are losses. And if that happens, all of the moral hazard that we've been dancing around, what if there's not a bailout for those guys? And I think that could be a huge, huge recession. A huge recession. If all of a sudden the political power switches and a new crop gets elected and the majority of our politicians are going, they're. They're so old. So what if politics gets taken over by people that just don't service the same power, right? In that case, everyone's looking at, you know, AOC and Mamdani and it's actually that's not the opposition that you have to beat in order to get the bailout that you're counting on for whenever this cycle is going to end. And listen, what I would say is like, you know, maybe I'm an optimist. I think that route is going to have a lot of acute pain, but is going to lead to the, you know, 30 years of a golden age, you know, with technology, with all of this stuff we talked about. But we kind of need a reset.

[Host (possibly a financial or Bitcoin-focused podcast host)]

There's historical precedent for it. Was it the mini depression of 1920 or 1919?

[Nick Namus (guest, financial expert or analyst)]

There was, yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, with the acute pain the you described, it was, it was big, but we recovered very quickly.

[Nick Namus (guest, financial expert or analyst)]

It was like under hardened or something like that. You know, economies typically have cycles the last six to eight years. Eight years is long, right? We have had one cycle since 2008. I don't care what anyone says, they want to say, oh but Covid, oh but 2022, the deleveraging didn't happen and that's going to make it worse. But at the end of the day we could have class mobility and you know, you got to take some of the leverage off and some of these private equity guys that make a million dollars per year and have levered up in every aspect of their life and crap their Lifestyle up to $90,000 for each kid, private school for K through 12 and then go to Duke and whatever and college is extremely expensive and home prices are extremely expensive. The solution to all of this I think is just letting assets go down to reasonable normal levels and probably overshoot and then at which point people that have income should be gracious, sure, maybe your 401k went down 50% and it sucks. But home prices are now down 25, 30% and you got to get into blue chip amazing companies for 14 price to earnings. That is the reset that could get us there. But it has to be with deregulation and sort of a antibiotic for the moral hazard that's currently in the system cannot be unnatural. Oh, things crash, we print every. Everyone that knows better is going to buy stocks when the Fed says we'll do anything it takes. So maybe, maybe worse is that guy what, what I'm concerned with is that when things do inevitably crash it's we're going to try to view recovery it again with the Federal Reserve and it's not going to go well and it's going to lead to more wealth inequality and all of a sudden Wash is going to be the guy that it's like well why did you bail out your rich friends again? And then we could, then the, the political variance from there could be communism, could be fascism. Right. So I'm optimist that we can thread the needle and I think that's the only way that we can lead to a cohesive society for the long term in the United States, Europe and you know, pretty much the entire western world is dealing with this problem.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. And I mean despite what I think we have this, this other backdrop right now which is the natural forcing function for all this to get set in motion, which is you look at the treasury yield curve and the long end of the yield curve, it's elevated to levels that people would have told you were impossible five years ago. And so you have this natural increase in the cost of capital via the bond market that's like forcing, like the Fed doesn't have to force it, but the bond market's forcing financial discipline on the market. And it will, I mean I think ultimately that would, will be the catalyst for unearthing where the bodies are.

[Nick Namus (guest, financial expert or analyst)]

Liquidity is drying up. Liquidity is absolutely drying up. And a $6.5 trillion Fed balance sheet sounds huge. It was nine pre global financial crisis. Might have been one or two. We're talking about hundreds of trillions of dollars in the debt markets. Hundreds of trillions in just government debt, corporate debt, you know, any sort of real estate related debt, whether Residential or commercial, the asset stuff, the, you know, leverage on the companies. When you put all of that together, if that is all coming down at the same time, the federal balance sheet may have to expand at such a level. It's this idea of a job bone. You know, people, people in financial markets understand the job bone. The average American doesn't understand their jawbone where the Fed will backstop and be like, you guys are good. Like, we got your back. It works, while people think it's going to work. But if it doesn't work, we are completely unprepared for that. Because the true amount of dollars needed for the backstop, on the level of the everything bubble that I see, we would have to triple, quadruple the federal balance sheet. And then you have the dollar and struggle. But then if you have the dollar and struggle, remember, this is a European issue too. This is an Arab issue. All fiat currency at the same time. It's kind of like Covid, Covid, backstop worked. But you're going to see massive government response. And then all of a sudden, all that paper that has a number printed on it, that number is worth less. Right. That would be a really painful thing because then you would have everyone trying to rush into real assets. Sure, Bitcoin would do amazing. Gold would do amazing, but the economies would do horrendous on a real basis because you would just see the nominal GDP go up and all of a sudden inflation would kick off globally in a way that it would be hard to create true value. You know, if you just hoard commodities like gold and Bitcoin, you're not creating value. You might be hiding your wealth, but, you know, and the volatility involved in that, you know, it would, it would be gross.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. Because if you think of the return on capital necessary in the scenario you just laid out where you're debasing the currency, potentially approaching hyper deflation. I mean, we've seen this throughout history. I mean, I think the early episodes of the show had people, people from Venezuela, Argentina, Brazil that told the stories of hyperinflation. You literally can't allocate capital because you don't have time to think about it. Your, your time preference is such that you get your paycheck and you run to the grocery store to get as many goods as you can, because the average person.

[Nick Namus (guest, financial expert or analyst)]

Yeah, I mean, listen, if I were to think about the best way that I can climb the, the relative wealth channel, it would be hyperinflation. Like, I think I have the skills to navigate that environment. Very adeptly. It's a zero sum game at that point in time, right. And I don't want to live in like I'll do like I'll do well in a deflationary environment. You know, just go and buy bonds, go be able to read balance sheets and cash flow statements and be like, okay, well I'll buy that debt. Right. The hyperinflation is where you really need skill. Right. And the typical person doesn't have that skill. So the idea that 2% inflation, 3% inflation, inflation can always stay within a relative band and it just takes a monetary finagling and will always stay there. I think right now it's kind of like when the bank of England broke and they were trying to keep a band of the deutsche mark and currencies throughout time. I've tried to keep a relative. Yeah, A peg or a window or something like that. I think that's kind of what we're doing with inflation. If there's massive deleveraging, you're going to see pretty significant potentially great depression level deflation. If we respond to that and stop that, I think we're going to go into probably the more painful category. And the idea that we can just stay here, it's hogwash.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And if you look, it's not even objectively true. I mean the like they say we're staying here but if you look at real the money supply, we're way out of it.

[Nick Namus (guest, financial expert or analyst)]

Yeah, we're way out of that. I like when bitcoin guys point to the money supply instead of the cpi. Because CPI is bullshit, right? You can grow the money supply consistently 10% every single year. But what you will see over the course of doing that initially CPI will be low because where that money supply grows goes into lending and goes into credit that potentially provides more supply. So it's not inflationary on a demand side. Right. But over time there's only so much and you create massive bubbles and there's only so much that you can lever up before all of a sudden people start demanding that either equities go up and equities can only go up with profits going up consistently. So profits can only go up really by raising prices and you know, you can cut costs and AI may help do that. You know, that's kind of just, it's not changing the scale of this in the long run. If that happens, then you're going to get inflation and these things happen, you know, they don't happen on a quarter to quarter basis, they don't happen on a year to year basis. And people think that modern monetary theory can just maintain, you know, this perfect level of, you know, Xanax and morphine and Adderall and like we got so many drugs in our financial system, it's insane. And then, you know, it's just fine. That's how you operate. And nobody ever gets health effects. We're. I think we're starting to experience that health effects. And I don't think that just because certain things I've worked for 15 years that they will always work. And I would say the best scenario that I see is like a good healthy correction. And based on the levels where we are, that healthy correction might be 40%, you know, across asset prices.

[Host (possibly a financial or Bitcoin-focused podcast host)]

That's what, back to where we were

[Nick Namus (guest, financial expert or analyst)]

in 2020, if that on home prices. Yeah, yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, and that's the other. I mean, you mentioned Bitcoiners focusing on money supply versus cpi. And we actually do a monetary. We do a quarterly global monetary base update. There's this guy out of Latvia. He's American, but he lives in Latvia. His name's Matthew Mazens and he's, he's one of my favorite monetary autists in the space. He's basically gone back and collected all the central bank data across the world going back like 50 years. Now at this point, I think starting in 1970 and even before that, he's got some data too, but he's run the number. The global monetary supply over the last 30 years has a, I believe like a 12.5% CAGR rate. So that's 12.5% on a global basis. So adding all currencies together and sort of measuring the growth of the global monetary base over time as a 12 and a half percent CAGR over 30 years.

[Nick Namus (guest, financial expert or analyst)]

So maybe 10% on 11, 12% on equities isn't so good.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, that's the argument you make.

[Nick Namus (guest, financial expert or analyst)]

That's. Yeah. I like the idea of investing in businesses and, you know, having smart people work for you. But when the money supply is growing so much, it can completely corrupt any investment decision.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, it inherently does because you're forced to think like patient. Capital completely leaves the market because it doesn't have the luxury of being patient. Right. And you get this high velocity trash economy where you're getting money and pushing it into every piece of dog shit that exists because you need to get it in and get that return out as quickly as possible. The function and the viability of the actual, actual business be damned. Like just get in and get it out. Hot potato.

[Nick Namus (guest, financial expert or analyst)]

Buffett is Patient capital, like, epitome of patient capital. A lot of the people that think they're patient capital are now fomoing into quantum computing or something. They're like, wait a minute, we've missed out on the past four years. And that's really where you get the pain because you did so good, you avoided it for so long, and now you're into, I don't know, maybe it's mega caps and hyperscalers or whatever. And ultimately, it's unfortunate. It's unfortunate that so many people have gotten rich being, you know, not investors. Like, we're not. We're not compounding a basis on cash flows anymore. Right. We're speculating. It's a massive speculation economy. And the number one way to see the effect of that is like, look at Kalshi. Look at the younger gen generations, right? They feel like they missed on Bitcoin. They feel like they missed on all this stuff.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And go read When Money Dies. This is like a repeat of Weimar.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Have you ever. Have you ever read.

[Nick Namus (guest, financial expert or analyst)]

I haven't. I need to really stop.

[Host (possibly a financial or Bitcoin-focused podcast host)]

There's one section where it's like every paperboy and milk girl was trading stocks, like, or speculating.

[Nick Namus (guest, financial expert or analyst)]

Did you see this morning? So this is apparently Black Thursday. I haven't checked the market, so it was ugly in the morning.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Let's see. Let's see where we're at now.

[Nick Namus (guest, financial expert or analyst)]

We did worse. Bring out the plunge protection.

[Host (possibly a financial or Bitcoin-focused podcast host)]

NASDAQ down 1.7.

[Nick Namus (guest, financial expert or analyst)]

It's better. People think 2 1/2% in one day is like the. The worst it can get.

[Host (possibly a financial or Bitcoin-focused podcast host)]

It's like Hank Paulson's on his knees right now.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Print the money. Yeah. So, I mean, I think your point earlier about getting. Threading the needle again, bringing this back to the juxtaposition of socialism, fascism and true capitalism, free markets. It's like that's the message that needs to get out there. We live in a quasi. At best, I would describe what we have, quasi capitalism.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

There are capitalistic sort of features of the economy, but at the end of the day, that money printing and that backstop is pure socialism for a particular subset of the population, which just so happens to be the rich. And it makes sense you're going to backstop that because it's holding up everything else. But to your point, I think we have to eat the pain in the short term, clear the board and get back to wise capital allocation decisions, backing legitimate businesses, providing goods and services that people value at a profit to the economy, to the market. And I mean, there are certainly companies that are doing that and people that are allocating those businesses. But the amount of businesses that are not doing any of that but are still able to assist and raise and sit in these portfolios is way too much.

[Nick Namus (guest, financial expert or analyst)]

Yeah, I mean, I don't want to completely demonize the, you know, elitists. I just think that they're dumb sometimes they're really dumb.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And you want to get back like elite.

[Nick Namus (guest, financial expert or analyst)]

Like, they don't see it.

[Host (possibly a financial or Bitcoin-focused podcast host)]

They don't see social hierarchy is like just natural and we just need to get it back to like a hierarchy that's actually.

[Nick Namus (guest, financial expert or analyst)]

Yeah, you guys, you guys can still

[Host (possibly a financial or Bitcoin-focused podcast host)]

be rich based on meritocracy.

[Nick Namus (guest, financial expert or analyst)]

We're not, we're not trying to take your money. We're just trying to take your, you know, profit centers.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Your backdrop, the moral hazard centers.

[Nick Namus (guest, financial expert or analyst)]

Yeah, yeah, yeah. You can make money the real way. Like, fine. You just, you can't make money the way that you're making money because what that results in is shackle as slavery for the middle class. And that is something that, you know, really is going to lead to a worse outcome. Just let it go, you know, let go. Take, you know, the boomer billionaires, you know, and the centi millionaires. Right. Just let go of the reins.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, well, and that's. And say there, there are boomer billionaires and centimillionaires that I know that actually like have legitimate family businesses. Most of them are private.

[Nick Namus (guest, financial expert or analyst)]

Right. For sure.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And like they're great businesses.

[Nick Namus (guest, financial expert or analyst)]

If you guys are fine, it's like,

[Host (possibly a financial or Bitcoin-focused podcast host)]

but they're operators, they're operating business. In most cases, the financialization that's been sort of embedded on top of that, where you have a somewhat parasitic class of financiers that are just trying to sort of squeeze everything that they can from that. That's where in the fact that they have a money printer sort of safety net for them alone. Obviously, maybe we get stimmy checks ubi, which would help or quote unquote, help the common man. But like historically, at least in our lifetimes, it's been for that class.

[Nick Namus (guest, financial expert or analyst)]

And yeah, I mean, I do think that we probably need ubi, but it should not be abandoned. Like it cannot be the solution.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Ubi.

[Nick Namus (guest, financial expert or analyst)]

Well, if we. How do we. How do you have unemployment go to 14%? Like, I think demand stimulation is better than supply stimulation. Like I think if you just evenly distribute 30 grand per person for maybe a two year period through a recession and assets are getting crushed, maybe some of that money is going back into assets. I Think that's pro like you. The laissez faire side I just don't think is actually truly going to work. I think there has to be something. I. If we want to do an intelligent, you know, okay, we rebuild the infrastructure. You know, I think a lot of the stuff, the New Deal is kind of bad. Really bad. Long lasting consequences. But I'm understanding of the Keynes. I think Keynes is one of the most underrated economists of all time. What? Yeah. People don't understand what Keynes actually said. Keynes never said you could do this stuff indefinitely and that there aren't consequences.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Debt is only money we owe ourselves. You'll be dead by the time you have to pay it back.

[Nick Namus (guest, financial expert or analyst)]

Yeah. In the long run, we're all dead. Yeah. But a slight, you know, if we have to do something, do it to the demand side, evenly distributed. But let's, let's not use that to obscure what, what has actually happened. And if people just tread water through bad times, sure. Maybe you don't have as much disposable income to go to Florida or the Bermudas or whatever. You're not less wealthy. If everyone's wealth is down 40%. Your wealth is down 40%. You're just as wealthy. It may not feel like it.

[Host (possibly a financial or Bitcoin-focused podcast host)]

On a comparative basis.

[Nick Namus (guest, financial expert or analyst)]

On a comparative basis, right. Just try to take more intelligent risk and find more security. Live within your means and save some money. Yeah. Jesus.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, the part of the equation that's really going to fuck this up is the fiscal side. Like the government needs to cut their spending by arguably 90%.

[Nick Namus (guest, financial expert or analyst)]

On the, on the boomers.

[Host (possibly a financial or Bitcoin-focused podcast host)]

I mean. Yeah.

[Nick Namus (guest, financial expert or analyst)]

Hey, boomers want to raise more taxes on the young people.

[Host (possibly a financial or Bitcoin-focused podcast host)]

You sent me a video today of Pomp talking about this.

[Nick Namus (guest, financial expert or analyst)]

Pomp has some bangers sometimes. That was a banger. I'm like, God, they would literally vote to tax a child. They would be like, you are two years old now. You need to start running on a treadmill to power a data center.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, the other way they're doing that is Trump accounts. It's like you are two years old. We're going to print money and you're going to throw it in equities markets. That's going to.

[Nick Namus (guest, financial expert or analyst)]

Yeah, no, that's, that is, that is true. It's funny how that didn't happen in 2008. And now when they need the liquidity and the permabid to all of their assets, they're like, yeah, now we're going to give, we're going to print money and give it to babies. They can't touch it. They can't sell it. They can't sell it until after we sell it.

[Host (possibly a financial or Bitcoin-focused podcast host)]

To be. To be. Technically, it seems like there's like Michael Dell and others are contributing. So it's not direct money printing.

[Nick Namus (guest, financial expert or analyst)]

But listen to sovereign wealth fund. All this stuff's great ideas. But it is very funny, the timing of all of it, you know.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, yeah. We need to get back to. This has been great. What. What haven't we talked? I feel like we talked about everything. What haven't we talked about? That we should wrap up with the.

[Nick Namus (guest, financial expert or analyst)]

The bitcoin. You know, I think we're clearly in a bare market.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Oh, you think?

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

What would make you think that?

[Nick Namus (guest, financial expert or analyst)]

I just feel bearish.

[Host (possibly a financial or Bitcoin-focused podcast host)]

No, you talking about.

[Nick Namus (guest, financial expert or analyst)]

I think that bitcoiners, I would hope would look a little bit internally at like the leadership. And I am of the opinion that bitcoin will fail if Micro Saylor is the face of it because there is so much hogwash. That guy says that an intelligent person in a corporate or sovereign wealth fund is like, we're not pumping this guy's delusion. And if the consensus doesn't get adopted, we lose the beautiful picture of bitcoin. Right? Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

You're parroting something that's been said on this podcast quite a few times in the last couple of months.

[Nick Namus (guest, financial expert or analyst)]

Really?

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. No, I mean, I'm not sure if you've observed it, but there is a large narrative battle going on around this particular topic.

[Nick Namus (guest, financial expert or analyst)]

It's really divisive in the bitcoin space. People think that anyone that buys bitcoin and kind of like buys at all time highs and is good and finds. So one thing I would say is, you know, really savvy people understand who is with them on the side of the trade that they're on and that they're. Just because someone is buying a stock that you're in. They could be weak hands, they could be perverse, have perverse incentives. And it doesn't. Just because they take a stock from 17 to 18 by buying it doesn't mean that it's good that they did that. Right. But also bitcoin is inherently consensus based. Right. And it's a very, very strange. I've talked about this and it resembles a currency in the way that the more that people buy it, the better the consensus is around it as a store of value. But Michael Saylor can be pouring in $70 billion and stopping 150 or $1 trillion from going in just because he goes on CNBC and says things like, we're making more money than Microsoft. Often you need to apply a 20x multiple on our bitcoin gains. And you know, oh, by the way, this is a new invention. I used AI and now we have preferreds and structured credit. And this is the best credit that's ever existed. And going to eat the entire.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Like that's the semantics asshole in me is it looks at. Because it's not credit, it's preferred equity, Right?

[Nick Namus (guest, financial expert or analyst)]

Yes.

[Host (possibly a financial or Bitcoin-focused podcast host)]

With dividends.

[Nick Namus (guest, financial expert or analyst)]

Yes.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Like this whole digital credit meme doesn't make any sense.

[Nick Namus (guest, financial expert or analyst)]

And by the way, he doesn't have to pay you. He can just stop paying the preferreds.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

But you know, if there's that constant overhang and bitcoin's not cool. Like, I talk to bitcoin people that think you don't need Gen Z to buy in. They have no money. They'll say, yeah, no, literally, they're like, oh no, we just need the boomers to buy in. It's like, brother, if everyone of all. If all boomers go into, you know, I'm going with Gen Z and I'm going tank that. Right? Like that's, that's what I'm talking about. Like the crowd and looking behind and being like, okay, like how do we have better ideas? Because Michael Saylor has raised all of this money on financial engineering that has nothing to do with the lightning network, has nothing to do with development, has nothing to do with crypto broadly blockchain improvements. Like what? We've, we've lost the plot a little bit. And this is coming from a bitcoin bull, but that's a little bit critical because shit, what if we just break up microstrategy, break it up into four, you know, don't you think that would be a little bit better than one guy that's delusional in many ways, having 5% of supply more than satoshi at some point in time. Like, we can do a little bit better in the bitcoin space.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And I completely agree. I mean, you're. And listen, I, I have a lot of respect for Michael Saylor in certain ways. He's been on this podcast once and we fought the whole time.

[Nick Namus (guest, financial expert or analyst)]

Really?

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, he's years ago.

[Nick Namus (guest, financial expert or analyst)]

He's really intelligent in some ways, but he's also says the dumbest shit I've ever heard.

[Host (possibly a financial or Bitcoin-focused podcast host)]

He tries to talk in analogies that just don't make sense.

[Nick Namus (guest, financial expert or analyst)]

Yeah. He also lives in, he lives in a feedback loop that is very tight. And a lot of. Yes.

[Host (possibly a financial or Bitcoin-focused podcast host)]

A lot of sycophants. Yes. And I Completely agree with you. And that's actually been a point of focus on the show over the last six months is really getting back to basics like what are we here for? Peer to peer digital cash with no trusted third parties. Like use it as money, saving it, spend it. I think the emergence and proliferation of the agentic economy provides an incredible opportunity to highlight the unique value prop of Bitcoin and unique capabilities of Bitcoin for the agentic economy specifically. Like you have stripe and all these stablecoins building these products to equip agents with wallets and money that they can spend between each other and with other end with other companies. And bitcoin wholly convinces is way more form fit for that particular use case. And not only that, but it's like going back to what we were saying earlier about like the compound annual growth rate of the global monetary supply. Your comments on Turkey and what they're doing like that. That is an economy that has experienced something close to hyperinflation recently. Like people need Bitcoin monetary system and a monetary good outside of the purview of central banks and governments and arguably they've never needed it more than they do now. And so it's like instead of pushing people to buy preferred equity with a dividend or a common.

[Nick Namus (guest, financial expert or analyst)]

Yeah, that only works if Bitcoin works. And by the way we're going to take the excess gains.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well that's the question. I don't think sailor is going to stop. And so I think that's what a lot of people on I won't even say that the opposite side of Saylor, I would say people who say hey Michael, like cool, you're doing your thing. But we really need to get back to these base principles of Bitcoin as money outside the system and work on improving the lightning network, other second layers and embedding native bitcoin into everyday use cases that people will will interact with more. I think that's the question is how do you have that energy surpass Saylor's energy With the idea in mind that Saylor's not going to stop, he's going to try to get a million Bitcoin, probably try to get 2 million bitcoin. It's like how do you, you're not going to stop him. I mean he's sort of committed strategy.

[Nick Namus (guest, financial expert or analyst)]

But if we tell the story that that's bullshit and you're the sucker and by the way, just buy bitcoin if microstrategy equity is permanently trading at a discount, if the SDRC never Gets back to par and he can never issue at par again. He's probably going to issue at 95 cents, people. You know, he said he wouldn't sell bitcoin. He said he would only issue above par. Just watch. You know, that guy is very, very greedy on, you know, being the most powerful person in the future that he envisions for, you know, electrified currency, right? And just, you know, it's easy to point outside and say the financial system's fucked. It's really hard to be like, okay, well you know, I've been living in this community that I love and adore, but like some of it's gone awry. It's like being in a fraternity and all of a sudden you have, you know, a few bad actors. Like, it's hard to be like, shit, those guys are fucking up. I need to address it. But you know, if there is an attention to detail. And also, by the way, it's not just sailor, there's a lot of 50 year old Bitcoin, 60 year old Bitcoin guys that are super arrogant and pick them up, pick. Why didn't you just buy a thousand bitcoin when it was at 100 bucks? Oh, you didn't have any money. Oh well, you should work harder so that you can buy a thousand bitcoin today. And it's like that's a little bit of a different work hard than it was. And you guys just really got lucky, you know. You know, you saw the vision. You were correct. Great. Now do you understand that this has to be a collaborative ecosystem that actually grows or do you want to fuck off? Because you know, if it is just dominated by those guys, Bitcoin I think will fail. And the reason why it will fail is because every four years mining costs double. Right. Functionally.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

Well, well, well, the price goes up, yes, supposedly, but, but from four years ago the price hasn't gone up. And there is the death spiral potential.

[Host (possibly a financial or Bitcoin-focused podcast host)]

No, death spiral is complete bullshit.

[Nick Namus (guest, financial expert or analyst)]

But what if the security drops down because the hash rate goes down?

[Host (possibly a financial or Bitcoin-focused podcast host)]

Then the difficulty adjusts lower which makes it more profitable to mine. So people turn.

[Nick Namus (guest, financial expert or analyst)]

Right, but then the system can be hacked easier. No, the death spiral, the hash rate is an important thing to maintain.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah, but like, yes, I agree. So I've been in the mining industry for 10 years the or nine years now. The like that's the beautiful part of bitcoin is the difficulty adjustment is one of the secret sauces. It is that like so like if hash rate falls off, price is down. It's Happening now. Hash rate had its. We had the 11th largest difficulty adjustment in Bitcoin's history two weeks ago on the 13th. And anybody who's plugged in there is

[Nick Namus (guest, financial expert or analyst)]

more profitable, but it's also less secure. So if, if, then you can hack blocks.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, and now we're getting into like the real game theory, war gaming here. Yes, technically it is maybe not even. It's not technically less secure. It is. Because for it to be attacked. Right. Like there's an amount of ASICs that exist in the world at any given point in time. The ones that are turning off because the price is going down, their electricity costs are too high and it's not profitable. Like they're going off the market for when that happens to attack the network. If a nefarious actor were to attack the network, they would have to go scoop up all those ASICs, scoop up a PPA, build infrastructure, plug those machines in and intentionally 51% attack the network. After that, logistics problem solved, which takes time and a ton of capital. And that's not to say that there could be a nefarious actor who's been planning to 51% the network over a long time horizon. They've been opportunistically acquiring A six waiting for.

[Nick Namus (guest, financial expert or analyst)]

It's China. It's China. China is theoretically the player that you would probably have to worry about on the compute and power. And they already banned bitcoin. It didn't work.

[Host (possibly a financial or Bitcoin-focused podcast host)]

They kicked out all the miners, sent them here.

[Nick Namus (guest, financial expert or analyst)]

Yeah, I mean, listen, I think that's a really interesting conversation.

[Host (possibly a financial or Bitcoin-focused podcast host)]

It's not a risk, but I'm going to say the logistics of effectuating that attack or waging that attack are much harder than people make it out.

[Nick Namus (guest, financial expert or analyst)]

It's hard. But as the total amount of compute goes down going towards the bitcoin mining network, China is ramping up their computer. Right. They could just switch it over from AI to Bitcoin.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, they're running GPUs, right. They don't have.

[Nick Namus (guest, financial expert or analyst)]

You could run GPUs.

[Host (possibly a financial or Bitcoin-focused podcast host)]

You could, but you'd be like one GPUs.

[Nick Namus (guest, financial expert or analyst)]

The A6. This is a conversation for another time. It's an interesting war game.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

But you're saying that the Asics are much more efficient than, you know, black.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Well, the Asics do one thing right, that's all ASICs. You build them to do one thing and Bitcoin ASICs produce hashcash, SHA.256 hashes. That's all they do.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And so they're hyper efficient at that. We went from CPU to GPU to fPGA to ASICS. So GPUs are two sort of compute levels back from where the cutting edge, not even the cutting edge. There's ASICS that were produced in 2016 that are still running today profitably, if you have free energy.

[Nick Namus (guest, financial expert or analyst)]

Interesting.

[Host (possibly a financial or Bitcoin-focused podcast host)]

And then if you're trying to weigh the opportunity cost of transitioning your GPU compute towards bitcoin mining versus training large language models, like, do you believe you're in a systemic existential race to AGI versus the us? Like, what is the cost of turning off some of your GPUs to train models and to mine bitcoin? So yeah, this gets like deep, like layers of game theory of how viable is a 51% attack based off of a falling difficulty and hash rate actually. And you get logistics and then you get opportunity cost equations. You have to run your mind. And I think as it stands right now, transitioning GPUs to mine Bitcoin, it just doesn't make sense for China if, if they believe, and I, I do believe that they believe that they're an existential race for AGI against the U.S. yeah.

[Nick Namus (guest, financial expert or analyst)]

Yeah. I think, I think it's not a concern now per se, you know, but it might be the next bear market. You know, imagine if the next bull market doesn't even get all time highs. Right. That would be kind of gross. Right. You know, I think that the volatility of bitcoin should smooth out a lot and Saylor has increased it a lot. But we should have had a higher high this cycle. Right, I agree with that. And I think that's, you know, there was a, it just, it was a bull market that had a lot of bullshit, you know, Trump coin fucking, you know, it's like what, what it was supposed to be the crypto presidency and I felt like it was the worst thing on earth, honestly. So I'm just, you know, throwing out the, the bear case because maybe that incentivizes a little bit of self healing inside the space. No, no, not that I'm rooting for it.

[Host (possibly a financial or Bitcoin-focused podcast host)]

I think it's necessary to like Trump the whole world. Liberty fi, the Trump coin Melania coin, just complete.

[Nick Namus (guest, financial expert or analyst)]

It was brutal.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Like so disappointing.

[Nick Namus (guest, financial expert or analyst)]

And Solana's completely insider owned.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah.

[Nick Namus (guest, financial expert or analyst)]

You know, a lot of the cryptos, it just, there's so much to like and I think that a rational assessment of like what's going wrong can only make the space stronger.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. And I think we need to do a better job of holding up what's going Right. Like I think Dorsey what he's doing at Block Disclaimer. Block is a sponsor of the show, but I think what they're doing to actually make, put a concerted effort forward to make bitcoin everyday money and to make it more accessible to their millions of users is the type of building that we should be lauding in the space. More so than like I'm not going to say that any public company can't go out and tap capital markets to accumulate bitcoin. If you want to do that strategy, go for it. But I think at the end of the day, Bitcoin peer to peer digital cash. Who's building tools and applications and products that make it easier to operate your life using bitcoin in that way. We need to focus more on that. That's why. Proud to have Block as a sponsor and really excited to see how aggressive the Block family of companies has been implementing Bitcoin and what they're doing.

[Nick Namus (guest, financial expert or analyst)]

WAP is doing some interesting things with crypto, just fintech in general, the PayPal Venmo. It's like, how are you guys fucking up so bad? Yeah, like I think that fintech can get there but you know, these are, these are positives. It doesn't, you know, would still address the negatives while you're pushing the positives,

[Host (possibly a financial or Bitcoin-focused podcast host)]

you know, and going back to like the. We're, we're getting long now. I need to give you back your time. But I want to like the whole concept of digital credit. The way it's been explained, particularly of a strategy is bullshit. And I won't even define this as digital credit. But there is a place for bitcoin in credit structures. It's just as collateral on long duration debt that like, so they're, you look at commercial real estate like we backed a company called Battery Finance Traditional Credit Fund. They spun traditional credit fund New Market Capital. He's a parent company founder Andrew really into bitcoin, said, oh I think bitcoin is a collateral asset and these credit structures actually solves one of our problems which is like we need to get a return and we don't want to go further out in the risk curve. What we can do is go and refi high grade credit commercial real estate in top tier cities. The first one they did was Philadelphia. But you imbue, you put bitcoin in the collateral package and instead of sort of trying to demand a higher return on the cash flow of the commercial real estate property, you're willing to offer lower cost of capital because bitcoin sits in the collateral stack and the credit fund appreciate or participates in the appreciation of bitcoin.

[Nick Namus (guest, financial expert or analyst)]

Appreciation of bitcoin, it's like a convertible.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Yeah. At the end. But like I think duration, like that's a 10 year loan. And so like you need to be able to have bitcoin sit there and do its thing for a longer period of time. And to our discussion earlier about how do you de lever and how do you. I do think there is a place for bitcoin as for lack of a better term digital credit. But it's not in the way that Saylor's doing it. It's like, no, you make it part of collateral packages for long duration loans and then you start sort of de risking the capital that is focused on the underlying assets that have idiosyncratic risk. And you sort of pair that with bitcoin which if we get out of this bear market and people come to their senses and focus on what bitcoin actually is, you have bitcoin which is sort of a risk profile that's completely separate from the individual assets that you're underwriting.

[Nick Namus (guest, financial expert or analyst)]

I will say when capital stacks get more complex, there's a sucker at the table. You can have debt and you can have equity and both can win and both can be, you know, taking different risk profiles. As soon as preferreds come into the equation, anytime I see it either the preferreds or the super sharp money and the common equity and you know, it's like God damn. But is this the public markets just anywhere I see it? Yeah, yeah. In private equity and public markets and you know, digital equity, credit like stuff, you're either the sucker for buying it or someone else is the sucker. As soon as preferreds come in, it's a generalization, but I will say 90% of the time.

[Host (possibly a financial or Bitcoin-focused podcast host)]

So you don't like this digital bitcoin as collateral?

[Nick Namus (guest, financial expert or analyst)]

I don't even like preferreds. I think preferred is just get out of there, do convertible debt, do senior debt. Don't tell me your senior debt is senior. If there's something super senior or if it's the, you know, only the private credit loves to do this. They say senior secured. It's like there's no subordinated debt that's unitranche. Okay. Like cut the shit, you know, or senior secured debt. But they have agreement among lenders and all of a sudden there's like senior first senior and second senior. And the first senior or the subordinated debt actually owns the IP which is the only liquidation value of the business. And you're sitting in senior. But the subordinated debt is below you. But has access to the valuable stuff. To the valuable stuff. It's the first lien on the valuable stuff. Yeah. So let's clean up the cap tables.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Is it possible? We'll see.

[Nick Namus (guest, financial expert or analyst)]

Yeah, let's just. The lawyers are going to be so rich.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Goddamn.

[Nick Namus (guest, financial expert or analyst)]

We need to unemploy some of them.

[Host (possibly a financial or Bitcoin-focused podcast host)]

That's.

[Nick Namus (guest, financial expert or analyst)]

That's the.

[Host (possibly a financial or Bitcoin-focused podcast host)]

That's too many lawyers, too. I mean, that's another thing. Money inflation, diploma inflation. More lawyers, more laws, more regulations, more friction, more compliance. It's problems we're not going to solve. But Nick, this has been a pleasure. It's great to meet you in person.

[Nick Namus (guest, financial expert or analyst)]

Great to meet you in person.

[Host (possibly a financial or Bitcoin-focused podcast host)]

We'll have to do it again.

[Nick Namus (guest, financial expert or analyst)]

Yeah.

[Host (possibly a financial or Bitcoin-focused podcast host)]

Round three at some point in the future. Peace and love, freaks. Thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can, leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month gets you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time,