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- [00:00]
A
War's back on the table, boys. Happy Monday.
- [00:04]
B
Or is it depends on, depends on what hour you're talking about.
- [00:07]
A
Is this ever going to end? Is this going to be the eternal September? The straits open. Straits closed. War's over. Peace deal being made, Peace deal off.
- [00:15]
B
There's an oil analyst in Asal Haji that I think you've had on the show before who has contended that it is in neither party's interest to actually resolve this for various different reasons. So we may just be eternally doomed to the, the eternal recurrence of straight of Hormuz being open and then closed.
- [00:32]
A
Yeah, I mean we'll open with that today. That's the first, the first page on, on the deck you sent which is the of, of headlines that we've gotten over the last week as it pertains to what's going on in the street.
- [00:44]
B
Yeah, I mean I'm not going to read all these, you know, I ain't reading all that. But happy for you. Sorry it happened. But yeah, this is, you know, it's, it's increasingly low signal to, to worry to too much about any given headline here. But here's what we're looking at as of I think the start of this show. The headline on the bottom right which says US and Iran agreed to halt days of fighting over straight after a bunch of weekend slap fighting seems to be what's prevailing right now. So check back in later this afternoon and that'll probably be flipped but directionally, if you were going to look at this I think on a chart chart basis and do kind of a TA of what's going on here, you, I think we're very much up and to the right from the US's perspective and up into the right trend. Maybe this weekend was a bit of a bull flag, little pullback and now we're going to resume the uptrend. Generally it looks like development's tracking more in US's favor and we'll talk about a few indicators to that effect later in the show. But yeah, for all of our sanity, I'm hoping we can finally cancel the reruns on this one and move on to something else.
- [01:48]
A
Yeah, as we've been saying for months, let's look at the data and not really focus on the headlines. We're looking at WTI, it's at $70.50 right now, so still relatively depressed from its highs in the heat of the war a couple of months ago. And so oil markets, they're up 1.25% right now. WTI is so maybe reacting, but not as aggressively. Maybe the stalemate is not as deleterious to oil markets as many people were led to believe a couple of months ago. But on that, I think just zooming out and thinking about broader economic strategy here in the US you flagged Secretary Scott Bessant's speech at the Economic Club in New York, America 250 gala dinner, which happened last week over the weekend. His focus, at least in this section of the speech, was on rearchitecting supply chains and highlighting where our weak points are, where they could be strengthened and what we need to do to make sure that we can sustain the economic engine in cases of pandemic cyber attacks, war, financial shocks, whatever it may be, just auditing our economic supply chains, making sure they're strong wherever they need to be, wherever they're critical for the functioning of our economy.
- [03:10]
B
Yeah, it's a pretty comprehensive speech. It's pretty long. I recommend people either go watch it or you can read it on the treasury website as well. But I think there's a lot in there. The interesting thing to me is like, you know, it validates everything we've been talking about on the show for the last basically year and the timestamp for that amount of time. And that's not by accident. It's not because Scott is a listener. He may be, but I highly doubt it. The causality runs in the other direction.
- [03:34]
A
Hey, Scott, you're listening.
- [03:36]
B
Scott. Scott, if you're out there, let's get in touch. I think you'd be a great TFTC guest. But the causality runs in the other direction. Right? We're just reading the, you can't even call it the tea leaves. Just reading speeches like this for the last year from Besant and Elbridge, Colby and Trump, all of the guys kind of around the decision making table and they're all kind of speaking off of this one talk sheet. And so I recommend people go look at it. It's a good summary of all this. If you've been listening for a while, it'll all seem very familiar. And I think I highlighted this one part just because I think this is really the key question is not even just, I think the pandemic stuff, the cyber attack stuff, the financial shock stuff, obviously it's relevant and we saw big supply chain issues worldwide and say Covid in early 2000s. But I think the real question to me is can it withstand coercion and does it depend on a country that could use economic leverage against us? Because that's really the latent power behind all of the different dynamics and relationships that Trump is trying to thread the needle on right here all come down to it's basically just a big geopolitical poker game. And you don't necessarily know who's got what cards or when they might play them. And that lack of awareness, that black box, that potential that someone could pull a lever that they previously hadn't pulled, maybe you didn't even know that they had or that you thought that they wouldn't pull, that's coloring that element of deterrence, is coloring everything that we do and that our adversaries or our trade partners can do or would do. So I think, again, it's really not even so much about kinetic war on a global scale. Hopefully that doesn't happen. It's not so much about entirely cutting off one half of the world and saying the US Just isn't going to play in another hemisphere, that someone else will just see that as someone else. I think it's much more about how do you keep the plane flying and fix it while it's in the air in such a way that it doesn't require you to land it and start a whole new flight. Can you keep the system running while implying that you have certain levers you're going to pull or that you could pull if absolutely necessary, and that often just even the implicit threat of that can be a useful tool. And I think Bessant would probably argue we haven't played those cards or threatened to pull those levers sufficiently over the last 30 years. And certainly it seems like he's been teeing that up very directly here.
- [06:08]
A
Yeah. And I think if you look at the growth of this sort of, particularly on the startup side of things coming out of parts of the country like El Segundo, Michigan, you have companies like Knox Metals spinning up sort of metal refineries and really getting back to locking down like inputs of critical parts of the system. It's early days, but you look at something like Valor Atomics, what they did with getting that, that small modular reactor online in nine months. I'm actually pretty bullish on this. This real reshoring of parts of the supply chain that we need to lock down. As he says in this quote, it'd be foolish to think that we're going to bring everything here. It doesn't make sense. Division of labor globally makes a ton of sense still, but making sure that we have critical materials being produced here in the US Is going to be big. And I would say if you haven't been paying attention to the wave of industrialization coming out of El Segundo, places like Michigan and even outside of Austin as well. I believe Michael Dell's nephew has a sort of startup incubator between Bastrop and New Braunfels that is testing all this sort of hard supply chain startup infrastructure. And I'm pretty bullish on this.
- [07:28]
B
Yeah. I mean, you can go look at a lot of components of XLI, which is the big State Street Industrials ETF. Look at any of those charts over the last 12 months. All the examples you mentioned of rate doesn't necessarily mean that every single company that has any leverage to this is going to be a fantastic investment. But it's clear that if you take Besant at his word, if you take the national security strategy at its word, there's kind of there's only one way that this goes. And it seems like this should be pretty obvious at this point, but based on mainstream commentary, I think it's still not as obvious as it should be, though, certainly I think it's notable that this phrase economic statecraft that Besson is using here to title the speech, that was a year ago. That was the provenance of analysts like Michael Every, who is really good geopolitical kind of strategist who's surveyed a lot of this stuff over the past couple years and even before that called a lot of the direction that we've been going in several years ago, that phrase, I don't know if he actually coined it, but he's certainly it's become kind of his calling card. But Michael Every is not going on Fox News. He's not going on CNBC every single day. He's far from a household name. He's far from a name that most of your Wall Street PMs are going to know at this point. And so for a phrase like that to make its way into this, you know, a speech given by one of the most important leaders and decision makers in the world right now is, is, I think, very telling.
- [08:55]
A
Yes. What else is telling is something that we highlighted last week. But sticking on the Scott Bent section of the show, talking about dollar strength with, with our good friend bitcoin, bitcoin advocate Joe Kernan from cnbc. But really leaning into what we've seen, which is dollar dominance despite what's going on with the war and this geopolitical fracturing, a lot of people thought, myself included to a certain extent that this would lead to people diversifying away from the dollar system. But what we've Seen and like we discussed last week, probably predominantly, or maybe not predominantly, but definitely a material contributing factor being this, this AI wave pulling capital into the US but the dollar's been relatively strong and Besant was making the case here that he thinks that anybody who has been cut off from the dollar system, whether it be Russia, Iran or Venezuela which is being let in, will jump back into the dollar system if given the chance because it is the most liquid and best money market in the world.
- [09:56]
B
Yeah, I think it struck me as a pretty blatant statement to make on cnbc. He says everything President Trump is doing here, if you look new, Venezuela, Iran, et cetera, he frames it as basically this is a dollar dominan which 20 years ago, I think the idea that the esoteric flows between currencies and how the dollar plays into that and how the US wants to situate the dollar as dominating that was just simply not something you were going to hear again on cnbc. So it's notable that you've got someone like Bessen again coming out and saying that very directly. This obviously has always been a meaningful bulwark of US strategy. But to say it so plainly, I notable and I think also cuts against a lot of the narratives that people built up around the war. And I think you just scroll to the next slide. I think it leads into that. Well that this headline last week that I believe Bessant was going on CNBC specifically to talk about this headline, but the US issues sweeping Iran oil sanctions waivers unlocking billions in revenue for Tehran. This is a 60 day waiver for Iranian oil sanctions and US dollar sanctions for the country provided that oil is invoiced in US dollars. It seems that from early reports that's being very much taken up aggressively by both Iran and its trading partners. Seems like notably China as well. So just an example that early days, the fan of outcomes is wide here. Things can still go many different ways. I don't think it's off the table that people around the world would in some sense like to not be beholden to the currency system and the financial system of a much more powerful semi adversary. So the idea that countries wouldn't always be looking for alternatives, I think that that's always going to be happening. But this development is just the latest in a long line of developments we've seen over the last year or so and especially since the start of the war, showing that it's easier said than done to de dollarize and stand up your own competing international currency system and international capital markets system that can facilitate all the trade that people want to do in an increasingly complex and interconnected economy. And down at the bottom on the slide, you can kind of see the results. We're now at 101 on the Dixie. A lot of that's driven by the Japanese yen component. But nonetheless, we're basically at post Liberation Day highs despite the war. And after many, many Twitter analysts assuring us that that was the final death knell of the dollar. So, yeah, it's. It's kind of gone again in the opposite direction that I think many expected a few months ago.
- [12:43]
A
On that note, what does it say about the current administration and our geopolitical counterparts lack of willingness to diversify away from the dollar in earnest because they know there will be a response from sanctions and potentially a kinetic response, maybe not a response, but a proxy response. As you're walking through that thesis, it's like, okay, what happens if we get sort of a weaker administration from the geopolitical front? Let's say Democrats come to office in 28? You think our geopolitical adversaries would be more willing to try so earnestly to diversify away from the dollar?
- [13:23]
B
Yeah, look, I think it's an interesting question because it kind of depends on how powerful you believe the deep state is, the administrative state, and who's actually pulling those levers. To be fair to the prior admin, the lithography ASML lithography export controls started under Biden in 2223, and it was greeted with quite a lot of controversy in the industry at the time the CHIPS act started under Biden. And so to some extent, you kind of see these things, different incarnations of these things bubbling up across administrations. Obviously, as he's wont to do, Trump has taken every turn of everything to 11 and gotten people around him who would do that. You could ask yourself whether that's because of Trump specifically or because the powers that be under the hood behind the scenes realize that the hour was late and it was kind of now or never to start pushing a lot of stuff aggressively in one way or another. But if you believe that thesis, then I think it's arguable that, especially now that the band aid has been ripped off, you kind of don't get to put the toothpaste back in the tube and put the genie back in the bottle, and you're going to see versions of this continuing at a slower or faster pace based on who's in office. I don't really know that. Even if we got, let's say, President AOC or President Mamdani that we would get a very. And frankly, I would say, let's not have that happen.
- [14:45]
A
Mamdani can't happen. He wasn't born here.
- [14:47]
B
That's a good point. Never say never. But in any case, I'm not necessarily convinced you wouldn't just see a rebranding of the exact same policies with a different veneer and a different kind of framing. But we'll see. Certainly, if you're China, if you're Russia or anyone kind of in that nexus, I don't know that you can necessarily afford to hope you can run out the clock for another two years and just maybe get someone who's a patsy in office to completely reverse everything. I think the right thing that you have to do is just behave as if this is going to continue.
- [15:21]
A
Yeah, that's a good point. I mean, we mentioned it earlier. WTI again, trading around $70. But you also have the change in consumer prices for computer software and accessories from a year earlier juxtaposed with each other.
- [15:34]
B
What are you trying to tell us? It's an interesting dynamic for the Fed, for congressional leaders who are up for reelection, midterms. For the Republicans, as they look at midterms, you've got what looks like if this kind of general megatrend continues, oil prices coming down to basically pre war levels, if the Iran deal, such as it is, holds, that probably continues, or we hold around here, gas prices more manageable. Okay, so that helps you on one big meaningful component of inflation. At the same time, you're seeing ripping prices in electronics components kind of all across the board, thanks to the AI buildout that we've talked about a lot on the show. And I think it's notable because that's a meaningful countervailing trend potentially to relief on oil prices. But also basically, if you're under 40, you don't really remember a time when. And this chart doesn't really even go back that far. It's like 2020. But we've all seen the great charts of deflationary things versus inflationary things in the economy. Obviously, health care, college tuition, those things are up and to the right. One of the great examples of deflation in our economy, though, has been consumer electronics. If you're under 40, you probably don't remember a time when TVs and computers of the same quality didn't get less expensive year on year. Right. That same model of tv, that same model of iPhone, that same model of a new PC. Generally, you could rely on it to, at the Very least not go up year on year. And typically it was going to go down. Memory was thought of as a commodity, and I think you could make an argument that probably still is true. But the AI build out is so aggressively memory hungry that the memory oligopoly has now put players like Apple and Microsoft in a position where they basically have no choice but to pass through costs to consumers to the tune of 10 to 20% year on year for the new models of iPhones and Xboxes, et cetera. So that'll be a meaningful trend to watch as it relates to how the consumer feels about how far their paycheck goes and whether their life is getting harder or easier. I think if you had to pick, you'd rather as a politician trying to get reelected, you care more about gas prices than you do about iPhone prices. But if it keeps up at this level, if the shortage keeps up at this level that we've talked about and it keeps broadening out, it's going to have more impacts beyond just your fancy consumer electronics. This stuff is an input into everything we do now. And so you're just going to see more and more pressure there.
- [17:59]
A
Yeah, I watched part of an interview with Dylan Patel from Semianlysis over the weekend and I mean, this memory shortage is not going to be sorted out anytime soon. I think he was saying Maybe back into 2027 is when they begin. They can begin to spin up the supply chains to bring on enough supply to meet the demand, but the demand is still outpacing supply at companies like Micron and other other memory dealers out there. That's a callback to Roger Ver there for those who are unaware. But yeah, you can expect this sort of consumer electronic inflation to continue for a couple of years. And I think you had AOC come out over the weekend and say that Apple needs to be broken up because they're using their monopoly pricing power to increase prices, completely neglecting the physical reality of this memory shortage that has arisen because of the AI boom. But to your point, I think focus on oil is much more important where the memory story is very much explainable because you can point to the demand, the growing demand and the efficiencies being driven by AI and parts of the economy say, hey, this is just part of this build out and we're going to have to suffer some years of inflation on these electronics.
- [19:19]
B
It also helps that two of the three basically memory oligopoly players are Samsung and SK Hynix. So Koreans. So just if you're thinking kind of cynically about the way that Republicans and Trump could position it. It's foreign companies are not playing ball and they're ripping us off and they're not expanding capacity fast enough. And they're the ones who are kind of doing the aggressive, predatory pricing, never mind Micron, don't look over at them. But yeah, it'll definitely be interesting to see. We talked about this before on the show, but every vertical chart always has a supply response. I think there are interesting things that the industry can do in terms of high bandwidth flash potentially over time to maybe replace HBM or otherwise displace it, make it less relevant and critical to the design stack. But in any case, I don't see that happening in the next year or two. Right. So be interested to see how the narratives get spun.
- [20:07]
A
Yeah, speaking of narratives, big narrative right now is the interjection of the US administration in Frontier model releases. Obviously Fable 5 getting pulled from the market a few weeks ago was a big story, but it seems like the overall thrust from the administration to put some filters on the models or get their hands on them and decide in a centralized fashion what gets released to the market, when is picking up.
- [20:36]
B
Yeah, look, I hate to say we told you so kind of thing. If you go back and look at the situation with the DOD or the Dow and Anthropic right before the Iran war happened and we were saying like this is increasing this stuff, Frontier intelligence, if it's as powerful as these guys think and as industry experts think and the real AGI pilled people in the world think it's going to be increasingly treated as a weapon or a matter of national security, rightly or wrongly. And you certainly are seeing that now playing out in a much more accelerated fashion across all these headlines. I think it's interesting that there's a debate right now about whether this is effectively the, the outcome that Anthropic has essentially been angling toward and that this is all regulatory capture theater to put themselves in an advantaged position with the Frontier labs in an advantaged position to a avoid or make distillation attacks harder, keep more things behind the veil, have greater leverage over all the enterprises in the US be kind of hand in hand with the regulators as they write the legislation to say who gets to do what and be right there in the driver's seat and have a regulatory moat that basically no one else can easily match. And so maybe that's the case. I think if you look at this letter that came out, I think it was submitted early June to Congress from anthropic about Alibaba and their alleged massive distillation attack against Claude that if you look at the text of that, it's all framed as pro national security. Like the US needs to ramp up its cybersecurity and we can't allow China to co opt this frontier intelligence and draft off our draft off us as we do this. So certainly, however much Dario and co may complain about the US government infringing on their rights with Mythos and Fable, there's definitely an element of talking out of both sides of their mouth where they're arguing for restrictions in the name of national security. So let listeners decide what the real motivations are here. But either way the outcome is the same. You're seeing certainly a growing trend toward control and regulation of these things as a meaningful, you know, national security strategic advantage.
- [22:44]
A
Yeah Dario on Capitol Hill last week at least the clips were floating around over the weekend besmirching open source open way models and saying that they're national security threat like in front of Congress so. Or the Senate. I forget what where the hearing was, but he's out there pumping that narrative. And I guess this dovetails into the question of what is the actual competition between these frontier models and the open source open weight models that exist today that many people, based off of the posturing of the US government and the frontier labs over the last month or two are beginning to beat the drum. We really need to lean into open source open weight models. We can't let the government co opt this. And you have this tweet and quote tweet here that basically poke fun at that idea which is like yeah, you may be saying that you want that, but when push comes the shovel everybody just uses the latest frontier model because it's the best and they're willing to pay for it.
- [23:40]
B
Yeah, I think it's very much TBD and I don't want to make a call on exactly where it's going to go. I do think a lot of the data that I've seen that's floating around is basically like you've got 80% plus of tokens that are called that are used are Open source tokens. 90% plus of the actual economic value being spent on tokens is going to frontier models. And you've heard anthropic CFO was on a podcast, I believe it was invest like a best a couple months ago basically saying that they very much see that internally and they believe the meaningful economic returns all accrue to the frontier over time. But I think you could have a volume dollar bifurcation where a lot of volume goes to open source and a lot of dollars actually going to the frontier and both can live side by side. But I do think the narrative that to me, that basically open source is pretty much caught up or it's about to catch up. It's just a few months behind the frontier. And in just a few months or just a few quarters, OpenAI and Anthropic will be totally cooked and we won't need them. And so we'll just wait around until that happens. Is I think as someone who has really ramped up his use of AI agents in the last couple months, and you and I have talked about this offline, you've obviously been many chapters ahead of both me and I think most people. There hasn't been, for either of us or for other members of our team, a massive appetite to transition a lot of those tokens so far over to open source. Because regardless of the benchmarks, regardless of what different meter tests say or what sweepinch says there is for a lot of tasks, at least there is in my opinion. I think you agree with this. A very, very clear feeling, a very, very clear difference in just like what it is to interact with an agent that's running on the frontier versus an agent that's running one generation behind or something on open source, even if it's much cheaper. I definitely think, and I look forward to a world where a cheap open source model that cost me basically nothing gives me something like GPT5.5 or Opus4.8 or Fable5, whatever capabilities. And I think that that's a world where there could be a lot of economically valuable token spending on those types of models. But to the extent that you don't believe scaling laws are anywhere near saturated, we're not at anywhere near a ceiling, which it seems like our most AGI pilled people out there do not believe. It stands to reason to me that you're going to have a frontier that just keeps moving out and out and out. And there's always, I think, going to be near infinite demand for the best possible intelligence that you could deploy, even if it's for totally new use cases that we can't even imagine. And so that gets back to like, this is going to be a meaningful national security conversation, I think, for a long time. Right. Who gets access to that intelligence and when? And what does it mean if you are not in the cohort, which we probably won't be, that has access to that intelligence? Right. What does it mean to is that where the permanent underclass comes from and is it already too late to avoid the permanent underclass? And if so, what are the implications of supporting the group that's locked out of that intelligence?
- [26:42]
A
Yeah, I've got two competing thoughts here. One on the open source side I think a lot of the problems are wrapper driven where like like you can download Claude or Codex and get access to the CLI or the desktop app and they have really good integrations and it's really easy to seamlessly port those frontier models into an agentic flow. Whereas for me somebody has played around with the the open source models as well. It's like not as easy to do so maybe there's some UX hurdles that can be overcome that make it easier to implement these and test them and switch them in and out. Basically model route based off of the particular task you need and hopefully the open source open weight models will get to parity with the frontiers with the health of most likely distillation. But the competing view there is too when you think about the model training side of things and the capex being deployed by the hyperscalers and the frontier labs to train the next generation models that's that's where like catching up like literally in the physical energy and compute side that it's. It's hard to envision the open source models catching up without really getting good at distillation and getting to a point where distillation like they launch a frontier model you could distill it rather quickly and efficiently and competently. I think that that seems like the only hope for for these open source open weight models in the long run.
- [28:10]
B
And it depends on your view on recursive self improvement too. Right. That's where the real it feels like that's what everyone is running toward and you get there first and I think there's a view that you get there first and you win game over. And the three to six month gap between Frontier and open source goes to much wider and basically unbridgeable. Not competent enough in matrix math to tell you whether I think that's going to happen or not, but I think it's much more of an open question than a lot of influencers like to posit.
- [28:39]
A
Yeah, we're running long here, but we've got two more stories shifting gears back to private not back to but to private equity. You have this headline here Apollo curve withdrawals after exit requests at 17% reigniting fears of the private credit liquidity. I had an episode that recorded last week with Nick Namath, who's been on this sort of interplay between private credit, private equity and insurance companies for the better part of a year. We talked originally, I believe in April caught up. And that was basically the tenor of the conversation was what we discussed in April has not gone away, maybe out of the headlines, but these risks that exist in private credit and private equity are still there, lingering and growing in the background. And this Apollo headline would confirm that.
- [29:27]
B
Yeah, we don't have to spend a ton of time on it. We've talked about on the show before. I think just notable that you're seeing quarter over quarter with these withdrawal requests grow in terms of percentage of AUM on these funds. And 17% was the highest one that I'd seen for that Apollo fund. So notable there bottom chart is just pulled straight out of Mindprint hash Matt Dines and Cameron Otsuga show from Build Asset Management. Highly recommend people go subscribe to that and also just listen to the latest one. But Matt's calling out here that cash advances from the FHLB to life insurers went back to Q1 2020 highs, really ripped quarter on quarter. And this is actually for Q1, so we don't have the Q2 data yet, so it's lagging a bit. But just notable because I think Nick has highlighted this, as you're saying, you see stories elsewhere in it, Bloomberg's covered it some, but just about the growing kind of exposure that a lot of insurers have both in the US and abroad to these private credit funds. And this would be one sign of potential growing distress in that complex. And it's just relevant to everything we're talking about because it's one more thing that's lingering out there in market that's, you know, maybe it's just a few trillion dollars relative to hundreds of trillions of dollars of, you know, assets across a bunch of different verticals and, you know, asset classes. But we have an increasingly levered and interconnected economy. And as we've seen, as we saw in 22 and 23, you know, relatively small changes in core inputs can cause a daisy chain of unexpected impacts that require meaningful policy response. And so when you've got this out there with all the other, with the AI issues that we're highlighting, whether that's, you know, mass unemployment caused by AI or the AI bubble, if you're, if you think that way, cracking and the constraints on existing debt to gdp, all that just kind of is part of the mosaic you should be considering when you think about what The Fed and Treasury's option set and reaction function will be over the next year.
- [31:12]
A
Yeah, and the 30 second elevator pitch for this interplay between private equity, private credit and the insurance companies is a lot of these private equity equity companies look at what Berkshire Hathaway did by buying large insurers and getting access to those, those cash flows and they would go buy insurer and then immediately replace the asset manager of the insurance balance sheet with themselves and then funnel a lot of those assets into the private equity and private credit investments which are beginning to feel headwinds from AI coming and deflating a lot of the software focused companies in those portfolios. So you have people taking out life insurance policies depending or annuity policies depending on cash flows from the assets managed by the private equity companies that have bought the insurance companies and they may not materialize. And then you have just the whole, the whole thing of these private equity portfolios not being marked to market on a consistent basis. So it's really hard to tell exactly what these investments are actually worth at the end of the day versus their marks. Last but not least, this is a bitcoin podcast. We'll talk about it at the end of the show. Always big headline, big theme in the space. Last week was stretch strategy variable rate perpetual stretch preferred shares series A deep pegging from $100, that's what par is supposed to be fell I believe to $72 at some point last week. It floated back up to 78 by the end of the week. And Microstrategy, this didn't make it in the deck. But right before we hit record they came out with some new forward guidance about how they're going to manage their balance sheet.
- [32:57]
B
Yeah, maybe we talk more next week about that, the updates to their policy. I'd like to spend a little more time thinking about the implications of what Saylor put out there. I don't put this in there to dance on any graves or mock anyone. It's. And there's quite a lot that can be said and has been said on many different podcasts about Stretch and that's in the last minute here. Not really what I want to do but I thought for our purposes was notable that in a very violently downwardly biased environment last week with Stretch potentially many people saying unwinding, I think it's probably too excessive but we'll see. And bitcoin again breaking 60k going down to I think as low as 58, 58k. Gang got their meme finally. Maybe we can stop hearing about that now. For the first time in five years. But when it happened, as all that was happening, BlackRock tweeted out a reiteration of their guidance that all investors should have a 1 to 2% allocation to Bitcoin in their portfolios. That came from December 2024, right after the election, when they first actually put pen to paper on that and made it official. And so again, as we've said in prior weeks, with a lot of different types of headlines around bitcoin, this is not something that you have to do in this environment when you're not sure if everything's going to unwind because Stretch is going to blow up or some other kind of FUD oriented headline. You could just keep quiet. You could just not emphasize bitcoin, sweep it under the rug, not think about it. So to post this in the middle of all that is just the latest iteration on this theme of these little breadcrumbs from people who have no reason to be saying anything about bitcoin, who are still coming out and reiterating their positive view on bitcoin in a terrible price environment and awful sentiment. So just one more thing to think about in your mosaic of how you're considering bitcoin's path from here.
- [34:45]
A
We'll end it there. We'll see you guys next week.