True or False - Private Credit Is This Generation’s Subprime

Summary

Podcast Summary: "True or False – Private Credit Is This Generation’s Subprime"

Podcast: The Compound and Friends
Hosts: Downtown Josh Brown, Michael Batnick
Guest: Garrett Baldwin (Author, Research Economist, AJB Capital Research)
Release Date: March 6, 2026

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Episode Overview

In this episode, hosts Downtown Josh Brown and Michael Batnick welcome research economist Garrett Baldwin for an in-depth discussion on current market dynamics, private credit risks, and the shifting cycles in business and investing. The team explores if private credit is the "subprime" of this era, the role of liquidity, changing investor behaviors, and their impact on everything from oil prices to rotation among market sectors. They also tackle technology’s influence, the psychological climate of investors, and actionable trading/investing frameworks.

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Key Discussion Points and Insights

1. Market Recap & Initial Context

Market volatility and geopolitics:

• Discussion opens with Josh Brown referencing recent Middle Eastern conflict, market reactions, and the rapid normalization in asset prices.
• Garrett Baldwin (03:51): "We've just been range bound... stocks up more than 5%, up 10%, but the Mag 7 continues to bleed. It goes back to liquidity peaking and shift toward defensives, energy, commodities."
• The surprise: Even after alarming global news (e.g., missile attacks), markets bounced back quickly. (05:03)
• Michael Batnick: "Futures opened down 1.2%. That’s not a lot given the headlines… The U.S. as a net exporter of energy gives our market resilience compared to Europe or Korea." (08:15)

2. Liquidity, Flows & Market Structure

The importance of passive flows:

• Passive investing/persistent inflows act as a "price-insensitive buyer." (10:24)
• Josh Brown: "That's the secret undercurrent people haven't wrapped their heads around. There's a price-insensitive buyer coming in almost no matter what happens."
• Discussion on whether passive investing distorts price discovery; agreement that even most 'active' managers hug benchmarks, reinforcing trends. (11:23)

Trading amplification:

• The algorithmic, high-speed nature of modern trading means news and reactions happen much faster—so do reversals.
• Josh Brown (24:58): "Algorithms have made all intuitive thinking, at least in the short term, completely worthless... The machines are speed-running that process in minutes rather than weeks."

3. Geopolitics, Technology, & Market Sentiment

AI and Modern Warfare:

• Technology (drones in Ukraine, AI in Middle East conflicts) is reshaping both warfare and market reaction paradigms.
• Josh Brown (11:59): "Every time Iran launches, there's an AI DOD effort to pinpoint the launch and wipe out the launcher. That's part of why we're not contending with $100 oil."

Investor psychology:

• The emotional landscape for investors feels anxious, not euphoric, despite market resilience (21:24).
• Michael Batnick: "I think people are very anxious and the market has swallowed so much... There are so many more buyers than sellers despite the way we all feel."
• The "vibe session"—hard data (market) says one thing; soft data (investor feelings) says another.

4. Cycles, Rotation, and Trading Approaches

Market sector rotations:

• 2023-2024: S&P 500 returns heavily concentrated in top 10 stocks.
• 2026 is different: Top stocks are detracting; most others up—the market trends are being netted out, leading to tightest starting range in S&P history. (32:07–33:53)

Credit cycles and liquidity's role:

• Baldwin (35:11): "If you believe in cycles—liquidity expands and you buy high beta. Once everyone’s missed that, rotation to commodities and financials, and later, defensives. We are on the other side now…energy, materials, consumer defensive."

5. Is Private Credit the Next Subprime?

Core debate:

• Josh Brown: Reads the provocative claim: “Private credit is this generation’s version of subprime.” (38:00)
• Garrett Baldwin: Scores it a "seven out of ten"—not the same in impact, but "the source of the crisis is in private credit... It’s the shadow banking system, largely unregulated." (38:00–40:05)
• Post-2008 regulations pushed risk out of banks into private credit funds, but banks still indirectly involved by financing loans. Not as ring-fenced as regulators hoped. (41:26–42:33)
• Michael Batnick (47:01): "Everyone is all over this private credit trade. Equities [in the space] are bombed out. But they’re illiquid—5% a quarter bleed until people calm down, not sudden collapse."

Sentiment and Schadenfreude:

• Many (media, investors) seem to 'want' a blow-up in the space, partly for retribution against wealthy private equity players (41:41–50:24).

6. What Could Break the Cycle?

• A major negative event—boots on the ground in Iran, broad job losses, or clusters of sudden 1% moves followed by reversals (historically precede bear markets: 52:35).
• Proving resilience: So far, markets rotate (from AI/tech to energy/defensives); no mass retail exit from stocks—supported by ongoing employment, 401k inflows (53:45).

7. Practical Frameworks and Models

Liquidity & Momentum Analytics:

• Baldwin describes a multi-factor momentum model (liquidity, momentum, insider buying). When the model goes negative, major events often follow (e.g., August 2024 Japan crash; January 28th, 2026 model turn preceded gold/silver crash: 71:30).
• Uses Cross Border Capital’s Global Liquidity Index, scrutinizes Federal Reserve and Bank of Japan actions (67:34–70:39).

8. Stock-Specific Discussion

Trade Examples:

• Garrett’s approach: Buy stocks breaking down only after insider buying picks up; cites Trade Desk (TDD) as recent example (73:16).
• CrowdStrike vs. Black Stone Minerals (59:59):
  • Michael Batnick: "CrowdStrike—the best company in the space, but a trade, not an investment for me right now."
  • Josh Brown: "CrowdStrike’s multiple justified by network effects—once under the umbrella, clients don’t leave."
  • Baldwin: Favors royalties and “choke point” plays (e.g., Black Stone Minerals) for long-term wealth preservation, with momentum stocks as short-term trades.

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Notable Quotes and Memorable Moments

• Garrett Baldwin (07:02): "Price discovery—I don't know if it exists anymore... We're just in a YOLO market where people are chasing headlines."
• Josh Brown (10:24): "There is a price insensitive buyer coming in almost no matter what happens... If we had that current in reverse, you’d never want to invest in a stock again."
• Michael Batnick (21:24): "I think the market is lying to us. The market continues to be hit with these super bearish narratives and it just won't go down."
• Garrett Baldwin (24:58): "The difference between the 90s and now: we would see 3–5% moves, continuation. Now it's round-tripping during the day... I'm not blaming Zero Date [options], but it's wild."
• Josh Brown (38:00): "Rate this phrase: Private credit is this generation's version of subprime."
• Garrett Baldwin (38:03): "Seven. The source of crisis is in private credit—the shadow banking system, largely unregulated."
• Michael Batnick (47:01): "What makes me feel a lot better about this not being the next subprime? These things are illiquid. They’ll bleed 5% a quarter until people calm down."
• Josh Brown (63:35): "Cyber's TAM is bigger and faster. AI is a gift to cybersecurity—every workload needs to be secured."

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Important Timestamps

• 03:51 — Garrett on market cycles, liquidity, and the Mag 7’s underperformance
• 08:15 — Michael on energy independence’s impact on market reaction
• 10:24 — The effect of passive investing flows
• 11:59 — AI’s real-time effect on warfare and markets
• 24:58 — The rise of algorithmic speed and near-instant market reversals
• 32:07–33:53 — Unique 2026 market dynamics: top stocks underperforming
• 35:11 — Liquidity cycles and sector rotations
• 38:00 — “Private credit is this generation’s subprime?”
• 41:26 — Why banks aren’t fully insulated from private credit risks
• 46:57 — BDCs (business development companies) as stress indicators
• 52:35 — Clusters of 1% reversal days as warning signals
• 59:59 — CrowdStrike vs. Black Stone Minerals: trading vs. long-term investing
• 67:34 — How Garrett tracks liquidity and momentum (Cross Border Capital model)

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Final Thoughts & Actionable Takeaways

• Investors must know their risk profile: Separating “traders” from “investors” is more important than ever in fast, algorithm-driven markets (27:09).
• Private credit could be a brewing risk, but is not hidden: Everyone is watching, and its illiquidity changes the crisis profile (47:01).
• Rotation is constant: Money does not stay still for long in today’s markets; sector leadership is fluid.
• Focus on liquidity and momentum for early warnings: Stay attuned to moving averages, insider buying, and Liquidity Index movements.
• Beware of financial narrative schadenfreude: Many are rooting for certain risks to materialize—don’t get swept up in headlines or biases.
• Know your edge: Whether riding trend stocks like CrowdStrike or seeking "choke point" plays (royalties, toll roads), stick to your expertise and system.

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Follow-Up Resources

• Garrett Baldwin
  • Website: garrettbaldwin.com
  • Substack: Me and the Money Printer
• Hosts:
  • Josh Brown: Twitter
  • Michael Batnick: Twitter

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For More

• Check out the episode on The Compound’s site for links/references.
• Review Garrett’s substack "Me and the Money Printer" for liquidity and momentum model signals.

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This summary captures the full arc and tone of the episode, providing a resource for those who missed it and a companion for those wanting to revisit the details.

Transcript

[Michael Batnick]

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[Downtown Josh Brown]

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[Michael Batnick]

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[Downtown Josh Brown]

Fidelity Brokerage Services LLC Member NYSE SIPC Today's show is sponsored by Janice Henderson Investors where we believe working together is the way to work better. Like combining your portfolio plans and our in depth strategy, your valued assets and our valuable insights, your mission and our vision always working in perfect harmony. To find the right investment opportunities. To Janice Henderson Investors investing in a brighter Future Together, visit Janice henderson.com.

[Garrett Baldwin]

Welcome to the Compound and Friends.

[Downtown Josh Brown]

All opinions expressed by Josh Brown, Michael Batnick and their castmates are solely their own opinions and do not reflect the opinion of Redholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Ladies and gentlemen, welcome to an all new edition of the Compound and Friends. My name is Downtown Josh Brown here with my co host as always, Mr. Michael Batnik. Michael, say hi.

[Michael Batnick]

Hello. Hello.

[Downtown Josh Brown]

All right. And with us today, Garrett Baldwin. Garrett is a research economist and financial analyst based in Maryland. He is the author of Me and the Money Printer and the founder and editorial director of AJB Capital Research. Garrett, welcome back. Good to have you back.

[Garrett Baldwin]

Thanks for having me, guys.

[Downtown Josh Brown]

All right, so the last time you and I spoke, the audience went wild. They just, they really, they really loved the conversation. Michael didn't get a chance to, to be in the mix. So now it's the three Amigos. We're all together and I see that you are coming to us live from what looks like Series Bar at the Sea at the cme. I know it's, it's AI, but still that's, that's a pretty cool call out for the people that trade commodities in our audience.

[Garrett Baldwin]

It's either that or you just see boxes of baseball cards in my office and I don't want to look like a 12 year old boy. I want to look like I'm old enough to drink.

[Downtown Josh Brown]

Understood. So in real life you're actually in Baltimore, Maryland. All right, awesome to check in with you. So can I ask a very general question to get us started? What even just happened we on Sunday night I said oh okay, cool. Wartime stock market, let's go. Let me brush up on all my charts and all my data so that I can speak intelligently, provide thought leadership for the clientele of Ritholtz Wealth Management and do my job. What's what do I need to know? And we're pretty off script right now as far as a post initial airstrikes of a war playbook. What do you think is the story behind that?

[Garrett Baldwin]

This is one of those days where I get up and I say I could have done anything else with my career. I could have chosen any other thing to be passionate about and I could be covering the World Baseball Classic right now. I wouldn't be frustrated getting up in the morning and just trying to figure all this out again. We've talked before that my thesis kind of comes back to my monetary support liquidity and what the Federal Reserve is doing and what Japan has been doing. And I think that that's the more critical thing. And we've just been range bound, we've done nothing for three months. And as we'll talk about you still have this large swath of stocks that are up more than 5%, up 10% but the Mag 7 continues to bleed. I think that goes back to just the natural cycle of liquidity peaking in August, September and the kind of shift toward defensives energy commodities which tends to correlate with this period in that cycle.

[Downtown Josh Brown]

I heard somebody, I heard somebody on TV saying it's not even really. What were they saying? Saying it's not really a war until Congress declares war. And then I, and then I chat when is the last time Congress declared war? And I think it was against Japan.

[Michael Batnick]

So.

[Downtown Josh Brown]

So I don't know if that's the best way to gauge whether or not we should expect a wartime stock market. I don't know if we need the official declaration, whether you like that or dislike that. That's just the reality. The reaction to the reaction in oil and the dollar and all the things that you would typically expect to react sort of had like an 18 hour moment and then we were right back to our regularly scheduled programing which is the software sell off and the private credit crash. Does that surprise you how quickly we got back to business?

[Garrett Baldwin]

It does a little bit, but I think, I don't think the worst of this situation is over. The people that I talked to who were oil traders, people who traded large swaths of, of oil back in the day before the Russia war, they're very concerned about this. They're more concerned about the Strait of Hormuz. They think that escalation's coming. They are, you know, the people who are reading the report saying $200 oil. I don't know if we're going to get there, but the reality is that this is one missile away, one, one headline away from, you know, a, a significant shift that is comparable to the commodity rally, if we want to use that term. That happened back when Russia invaded Ukraine.

[Downtown Josh Brown]

Remind us, what was the reaction, what was the run up and then what was the reaction when Russia invaded Ukraine?

[Garrett Baldwin]

It was a monstrous runoff, but the process had started sometime about two months before they actually went in. And then we had a huge run up that ran I believe until April. And then all of a sudden it was just a massive risk off event and all of a sudden just funds were dumping oil and gas and we had a huge downturn. I believe the June 8th downturn in 2022 was the largest hedge fund sell off in 15 years. And it was a lot of relationship to commodity profit taking.

[Downtown Josh Brown]

So they decide, they decided not to keep oil prices elevated indefinitely because that war is still going on. It's where you're, you're four now or three, something like that.

[Garrett Baldwin]

I, I wish I knew what was going on. I really do. It just, it just, you wake up and we go. I go back to something that I wrote last week about Japan changing the rules around insurance and, and what the insurance companies have to hold and whether or not they had to sell their bonds like Price Discovery. I don't even know if it exists anymore. And you know, we're just in an environment where it's kind of just a YOLO market where people are chasing headlines. We, we got back to the private credit side. I think that that's still a major issue. It's very, very clear that Federal Reserve has had to step in with $55 billion a month in short term treasury bill purchases in order to protect our banking reserves. And at the same time, the private credit story just continues to be this ongoing concern and deterioration about ongoing refinancing and questions about whether or not there's enough capital in the system to enable a lot of refinancing that's going to be needed to be done later this year. I believe Cross Border Capital put it at something like 13% of GDP needs to be refinanced just this year. And then, and then you have to account for the fact that the US is refinancing a significant amount of Treasuries. That can crowd out private credit, that can crowd out private equity. That needs to refinance as well.

[Michael Batnick]

I think one of the reasons why the futures markets are responding as calmly as they are so Sunday night you saw missiles flying and futures market opened down 1.2%. I mean, it was really not a lot. And we've seen this, this is not the first time where you've seen something happen over the weekend. And then you look at the market's reaction like, all right, I guess, like not really that big of a deal. The market doesn't seem too concerned. And I think the primary reason why is. Throw this chart up. Chart one. John, please, from Yardani. The US has been a net. The net imports have crashed. We are now a net exporter of energy. The energy independence story, I think is the primary reason why our markets aren't doing what say markets in Europe are like those stock markets and of course Korea, that is much more dependent on energy, are getting hit a lot harder than we are. And you could talk about liquidity and all of this other stuff that obviously does matter, but for this week particularly, I think that is why you're not seeing the market react the way you think it might.

[Garrett Baldwin]

I agree. I concur with that. One of the things that's such a strange thing about geopolitics and I don't know if this happened post Covid or not, but remember there was a time when Kim Jong Un just launched a single missile into the Pacific Ocean. And it wasn't an attack, it was just a test fire. And the s and P500 or the Dow fell 4% like instantly. That doesn't happen anymore.

[Downtown Josh Brown]

And we might even rally on that, right? I might actually, because that might be bullish for Palantir. And I wish I was. I'm only half, I'm only half kidding.

[Garrett Baldwin]

Yeah, but I think, I think that that has, I think there. I don't know if it's the plumbing of the financial system. I don't know if it's the fact that again, passive investing is 50% of. Of equities now compared to 5% in the 1990s. So once, you know, once again, it may just be the fact that there is just this ongoing burn, continued support of equity prices. And you've talked about this regularly, the fact that every two weeks more money flows into these equity markets through passive ETFs.

[Downtown Josh Brown]

Yeah, that's the, that's like the secret undercurrent that people still haven't wrapped their heads around.

[Garrett Baldwin]

Right.

[Downtown Josh Brown]

That there is a price insensitive buyer coming in almost no matter what happens. Literally, other than maybe nuclear war. We learned From COVID the Vanguard 401k contributors, they didn't blink. Fidelity, same story. Schwab, same store. Like, we know that that underlying bid exists. It doesn't mean. All right, so just always buy. It's always going up. But like, man, could you imagine if we had that current in reverse, you would never want to invest in a stock ever again.

[Michael Batnick]

Let me ask you this, because there is, there is a large chorus of people that I don't say blame the positive market because that sounds like a weird thing to do, but they do they. That there's a lot of blame for passive money distorting markets and, and no price discovery. If, if mutual funds were 100% managed by active managers who were merely closet indexing, do you think that would change the story? Like, do you really think that the pass. Okay, yeah.

[Garrett Baldwin]

No. And, and, and the, and the other thing about that is that you actually see, I, I'm, I'm trying to go back to the exact numbers because I did something on this back when I was at Modern Trader where you had massive amounts of pack passive flows. But then you have all the active managers who are just trying to. Their benchmarks, so they're buying the exact same stuff. They're buying.

[Michael Batnick]

They set the benchmark, they set the indexes.

[Garrett Baldwin]

Right, right, right. So there's no, there's no, there's crowding around those, those, those specific figures. Everybody's buying the same stocks. And then, you know, ultimately what we hear is we have a narrative shift and that's how we end up in a situation right now where we're trying to make sense of what's going on with the software stocks.

[Downtown Josh Brown]

There's a, there's a technological component to this particular geopolitical crisis, if that's what we're going to call it, where like with Ukraine, it was the first live example of a battlefield with drones like actively participating in war, fighting for both sides. And I think it sort of changed the story somewhat. In this case, it's AI. We know there are huge issues with Department of Defense wrestling with anthropic because they Want, you know, obviously more control over the technology. They don't want to abide by the same terms of service that my mom does. So that's part of it. Someone was saying the reason why oil is not reacting is because, number one, the first thing that we did was take out the Navy. So the Strait of Hormuz is an issue in that ships don't want to go, but it's not blocked. And then number two, every time Iran launches, there's an AI Department of Defense effort to immediately pinpoint exactly where that launch came from and they wipe out the launcher. And as a result, Iran has stopped launching, either because they've run out of launchers or most of their launchers, or because they know this shot better count because the minute we fire it, the United States has this AI thing that instantly routes a Tomahawk. To take that thing out like that is. I'm not a war expert. I'm just saying this is part of what explains why we're not contending with hundred dollar oil, a CPI spike to come, and people freaking out about whether or not this means the Fed is now on hold. That's not really the conversation right now and thankfully, because I think that would have wrecked the market this week.

[Garrett Baldwin]

That's an interesting observation because at the end of the day, I believe it was the former head of Google wrote a piece in the Financial Times recently, Eric Schmidt, and he basically said the future of warfare is happening in Ukraine right now. And the no man's land from a source of mine was 15 miles. So you know, those, those tanks are not rolling across Europe anytime soon. And you know, 35, $35 drone can knock out a million dollar to $10 million tank. That could be part of the story. It could be the fact that the future of warfare is going to be much more localized, it's much more targeted. It's not carbon, it's not carpet bombing. And in some ways the question is, is kind of nuclear war off the table? I don't, I don't mean that, you know, it's obviously you have deterrent, but the reality is we can put a, you can put a missile into a single car and just take out one person rather than hitting an entire block. And that's going to be very interesting to see how all this works because once again, companies like Kratos, you're seeing it with, I'm blanking on Palmer Lucky's company and, and that, that, that I had, that I had somebody who was recently in Ukraine and came back and he said I need to do every single thing that I possibly can to invest in this company, however I possibly can.

[Downtown Josh Brown]

That seems to be the tone around and all. It's. That is the hottest ticket in town. Everyone wants in. What's this? What's this? Korean Cosby Index chart.

[Michael Batnick]

So on Tuesday, the Korean market had its worst day going back to 1990. And then a day later it had its second best day going back to 1990. Garrett. I don't know the composition of the Korean market in terms of the traders, but it seems like there's obviously a lot of leverage. They're having a very good time. They're partying over there.

[Garrett Baldwin]

Yep. I couldn't tell you a thing about, about what's going on over there. I can't know everything, so let's put

[Michael Batnick]

that to the side.

[Garrett Baldwin]

But the thing is, with South Korea, there has always been stocks that have been highly undervalued comparatively to other countries. I remember Posco a couple of years ago was trading at 0.6 times book value. Steel manufacturing.

[Downtown Josh Brown]

Korea is a memory chip stock. Korea is a meme stock for people that are trading international country ETFs. It got slammed because they import almost 100% of their energy.

[Garrett Baldwin]

Yeah.

[Downtown Josh Brown]

So that's the obvious reason to sell that market. But also it's like 40 something percent to chip two memory chip plays. One is Samsung, the other is SK Hynix. So you have like, you have this incredibly weird situation where it's both an energy exporter, but also it's the primary source for the most important chips on the planet right now. And people just, I guess, panic sell and panic buy when that thing gets moving. I think it's fascinating.

[Garrett Baldwin]

It's one of those, it's one of the countries where I'll just look at and say, I, I don't know enough about it to make a decision. But it kind of feels to me when somebody says, yeah, I'm long Korea right now or I'm long. You know, pick it, pick a random country. It's like, yeah, I used to bet on ping pong back during COVID when there was no bait, you know, no, no other sports to bet on. Like, okay, you're just looking for action wherever you can find it.

[Michael Batnick]

So this is a very, very weird market and this week was weird. And 2026 has been weird.

[Garrett Baldwin]

Yep.

[Michael Batnick]

I was very surprised. I wasn't surprised Monday when they took the 1% loss away and we closed green. I was very surprised on Tuesday afternoon. By Tuesday afternoon. So Tuesday morning we gapped down hard and it was like, oh, like that rally didn't stick. And when that sort of thing happens, you usually have trap bowls, complacent bulls, and they took it all back Tuesday too. But and when you have that sort of reversal, John, chart, the bespoke chart, when you have that sort of reversal where you're down 1% and you finish in the green, historically that is very bullish. So bespoke says that this has happened on 2.8% of all trading days. So it happens. Like obviously it's not, it's not super unusual, but it happens. And they look at the performance of what happens a week, a month, three months, six months. And I think intuitively, so these type of bullish reversals have historically been bullish for the stock market on a go forward basis.

[Downtown Josh Brown]

But Garrett, I want to ask you about that chart and just the mentality around that. I'm one of these people that has a very strong belief that when people sell stocks for any reason, either it's something with the individual company like misses earnings or it's something where like the market is getting volatile and they just want to sell something. I have this like mental model and I hate that phrase, but I do where like the, the maximum amount of time the money is going to sit in cash in that person's account. And I don't care if it's a hedge fund manager, a PM at a hedge fund, or a mom and pop on Schwab. I think the maximum number of days that money sits in a money market is like three days. And then three days go by, the world doesn't come to an end, right? And they're like, they're like, what should I buy?

[Garrett Baldwin]

Right.

[Downtown Josh Brown]

And I understand it's not that simple. And you know, it's not as, it's not as contained a world where it's the same dollar amounts and we don't have money moving in and out of banks, etc. But just big picture, I think it explains the V's, I think it explained. I just think it's a different investor class, both professional and retail these days and they don't buy their time. And I think some of that just has to do with the pace of life in general. 100%, everything we do is sped up. So why would that reallocation into a new stock process not be sped up? What do you think about that?

[Garrett Baldwin]

Well, I just, I think that there's a, there's a couple of moving parts. One, there's incentive for, you know, brokers to try to get People to sell. There's, there's incentive, you know, for as much market action, as much money flowing around as possible. And if you look at it, there's that one crazy chart where it says like the average holding time in the 1970s was like 10 years. Now it's down to what, like 16 minutes? Yeah, yeah, it's it. And, and, and it. I, I think that there you speak to the immediacy of the market, you speak to the fact that we can trade on our phone at any given time. Everybody's got a tip, everybody's got an opinion and everybody's, you know, bouncing from one platform to the next trying to find something. And I think that in an environment like this where we're at all, we're within 2% of all time highs and most of us feel like what's going like the, again we talked about jc, JC is going to say that it's going to go to 8,000, but like the, the rest of us are sitting here going, there's a war, there's constant money printing, there's a lot of uncertainty

[Downtown Josh Brown]

around new Fed chair coming in.

[Garrett Baldwin]

Right. And I was going to say this. There's that one meme that says while the end of times will be horrifying, the pre end of times will be extraordinarily profitable. Defining on the opportunities that you can invest in that. That's what this feels like. And when, I think when markets are at highs, right, it's, it's, people are looking for higher. Missed out on this. I missed out on this. I missed out on this. So do I try to buy this stock that is, you know, trading at 20 times sales but is unprofitable, but it's down 40%. You know, it's going to go back and, and I'm gonna, and I'm, I'm gonna be, I'm gonna be smart because I, you know, I timed that and that's a very, that's just kind of the way that the market, I think,

[Michael Batnick]

I think the market is lying to us. I think. Remember the, remember the Vibe session, the hard data and the soft data. I think the hard data is the market and the soft date is how we all feel aside from JC and by the way, I'm more team JC and they're not on this one. I don't think anybody feels fomo. I don't think anybody's like, I can't miss the next rally. I think people are very anxious and I think that the market has swallowed so much like I can't Believe the rally on Tuesday. I really can. I was shocked that we didn't close on the lows after opening like that. Down EM down 7%, the Dow down whatever was down at the open. The market continues to be hit with these super bearish narratives and it just won't go down. It won't. Like at some point you have to say like, okay, like yeah, I'm, I'm anxious too. But clearly there is an overwhelming demand for stocks. There are so many more buyers and sellers. Despite the way that we all feel, like this doesn't feel great.

[Garrett Baldwin]

But what about, what about the narrative or the argument of, and I'll go back to what Stanley Druckenmiller said in 2018.

[Michael Batnick]

You already got me. I mean I can't, I can't rebut it, whatever you're about to say.

[Garrett Baldwin]

So all he said was, look, you know, like trend investing is very complex now. Like if I'm, if I'm down, if I'm looking to go down on something and short it, this, this stock moves into the third standard deviation and the Algos step in and start buying it. And if you watch, if you just look at volume weighted average price on a one minute chart, watch, you know, watch somebody like Jamie Dimon say something about the bond market, watch it dip into the four standard deviation and then watch it rally to the fourth deviation on the upside. Like it's, it's absolutely wild this type of price action that we're seeing. And the, and I think the difference between, you know, the 1990s and now, we would see 3, 4, 5% moves, we would see moves to the downside, we would see a continuation of trend. And now what we're seeing is kind of like this round tripping during the day. And I don't know how that's possible. I don't know what's necessarily driving it. I do understand, you know, what's going on with Zero Date, but I'm not

[Michael Batnick]

going to blame Zero Date, dude, on Liberation, Liberation Day. So we were down like 10%, 12%, whatever it was. And I'm staring at my screen, as I always do, I am staring at the screen and I blink and the market went from down 4% to up 7%.

[Garrett Baldwin]

Yep.

[Michael Batnick]

How, how does that happen?

[Downtown Josh Brown]

Because the, so what the algorithms have done is they've, they've made it, they've made it. So all intuitive thinking, at least in the short term is completely worthless. Any, any sort of like linear, like if A happens and then B happens, therefore the probabilistic Result will be C and then D and then E. The people who think that way, the most intelligent people in the market who understand all of these connections between cross asset. It's blah, blah, blah, blah, blah. It's not that they're stupid now, it's that the machines are speed racing, speed, running that whole process in minutes rather than weeks. I remember there were weeks for a story to play out and then it would go too far and then the buyers or the sellers would come in and correct that. And that's where the term correction comes from. Right now you're wasting your time. And actually one of the most popular trader memes for this reason is that thing where it's like the bell curve and you have a complete moron with crossed eyes on the left, the midway. Then. Yeah. And then all, all, all the way on the other side on the far right, you have a complete genius egghead. And both of them, their returns are zero.

[Garrett Baldwin]

Right.

[Downtown Josh Brown]

And then in the middle of the meme you have like a Jedi figure who's just like, I don't even think, like, like I just, I just basically buy the index and I don't even know what you guys are trying to do.

[Michael Batnick]

But, but also.

[Downtown Josh Brown]

And that's, that's what those.

[Michael Batnick]

Don't you think that this is awesome for people that have a brain? Because we saw what happened when Schwab fell 10% because of the altruist news. I know we keep bringing up, but it's important. And when CBRE and all these related names just got whacked and CrowdStrike fell 10% one day and then 8% the next day, doesn't that provide opportunity for people that aren't trading with an algorithm that can think for a second?

[Downtown Josh Brown]

Yeah, I couldn't agree more.

[Garrett Baldwin]

Yeah. And to compliment that, you know, one of the things that I focus on, there used to be a very distinct pattern that would happen in the market. The S&P 500 would fall under its 20 and its 50 day moving average, it would peter out. There wouldn't be any, there wouldn't be any buying. Then it would squeeze back up to its 20 and then it would just tank and then insiders would start buying and there would be some sort of policy accommodation. You can see that in 08, 11, 15, 18, 20, 21, 22, 23, 24 and last April, of course. And then the best one of the year was insiders picked up on November 19th and Japan announced $117 billion in stimulus. And I just, it was a Sunday night. I just Sent an email out, I said you better cover your shorts because this is just going to move. And now what's happening is we're seeing policy, policy moves. We're seeing repo, we're seeing, you know, the support of the Fed. But like even that right now in the last couple of weeks and months, all we're doing is we're hitting the 100 day moving average and we're going right back up, we're hitting the 100 day moving average and now what's happening, the a hundred day moving average is now moving right in line with the 50. That's where I think it can get interesting, particularly tax season into April. But this is a market where you better be compressing, if you are a trader, compressing the timeframe that you are trading on. If you're long term, if you have a thesis, if you believe in capital, efficient businesses, if you wanna buy pull corporation because there was just a massive amount of ins. Insider buying, that's a good company, that's got a good thesis. I'm good with that. But from a trading perspective, I mean it is.

[Downtown Josh Brown]

Oh, that's a great point.

[Garrett Baldwin]

Wild.

[Downtown Josh Brown]

So I actually, I actually believe this very strongly. It has never been more important for people to decide whether or not they are investors or traders. Whereas I think that you could have had sort of a more nebulous definition about what you do in the markets as a regular person over the last couple of years. You could say like, yeah, I'm an investor and then every once in a while I'll throw on a day trade, like that kind of thing. I just, I don't think that this is an environment that's conducive to tourism on either side of the fence. If you're a trader, don't miss your opportunity to stop out and then become an investor by accident and vice versa. Like if you want to bet against the trend, you have to decide I'm an investor and I'm going to let that trend keep going against me and I might buy a third, a third, a third on the way down because I'm determined to be an investor here.

[Michael Batnick]

Or you sell,

[Downtown Josh Brown]

but you have to know what are you doing? Like what are you doing? And I think there was a long time where you could kind of just be like a whatever. I don't think people should be a whatever right now.

[Michael Batnick]

Totally.

[Garrett Baldwin]

And again I focus heavily on momentum and insider buying. So there's a chart that you guys have, but it's all of the stocks that are breaking down right now. The Worst of the worst. It's like Campbell's Soup and it's all the cred credit companies. It's, it's KKR, it's Huntington bank shares, CBRE's on that list. Aries Management. And we're seeing a MA. A massive amount of insider buying on a lot of different equities. The moment that that stock falls off that momentum list, that negative momentum list and there's insider buying. Look at a stock like MSCI Fernandez, the CEO, he bought it at 520. It broke down, it fell to like 500. Every time he buys this stock, it goes from 520 to 600. And yeah, like, you just look for these, you just look for these themes, these strategies and you return to it. And by the way, I'm, I would love to buy kkr. Like I would love to buy. I think it's a phenomenal company, but I'm not going to touch it yet. And also when do I really want to own it? When we do our next round of qe, like that's it. Like the second that we, the second they really print money and they will. Our financial sector goes up because we're a financialized economy.

[Downtown Josh Brown]

Let's stay there. You're not saying they'll print money because of the KKRs of the world, but you do think we're going to have a credit cycle that goes heavily against some of these companies, but it'll also go against publicly traded. It's not going to be a, if we have a credit cycle, it's not going to be a private equity, private credit only situation.

[Garrett Baldwin]

Well, the, the, the, the theme right now in monetary policy is you have Warsh, who doesn't, who wants to reduce the, the balance sheet. But then you have Besant, who wants to issue more capital, more, more, more T bills for refinancing purposes. And that matters because when you move, when you move out of 10, 15 years, not having to lock things up in bonds and you start issuing Treasuries, go back and look at the 2017, 2017 chart of the S&P 500. We have gone from what, 3,000 to 7,000. You know what happened that year? The Tax Cut and Jobs act. And the Tax Cut and Jobs act, in order to afford it, they started to sell aggressively at the short end of the treasury bills. So instead of trying to fund it with 10 years, they funded it. We've gone from 11% of our debt being funded under, under a year to roughly 23 to 24%. And bank of America Thinks it's going to go higher. That. That is. That is bullish. That. That's bullish for. For the. For the amount of money that is sloshing around in the system. And that help. That.

[Downtown Josh Brown]

Why is it. Why is it bullish?

[Garrett Baldwin]

Because those. Because those treasury bills are liquid assets that could be utilized for the purposes of repo. And that is what. That is what has helped drive that. That leverage trade of, you know, you can call it 64 or how 60, 40, however you want, but, you know, we rehypothecate. Somebody made fun of me for using rehypothecate last time, but it's the most wonkish term in the world. I love it. You live and then. And then you borrow. And then you borrow. You know, we. You go out, you buy Facebook, you take it back to the repo market, you do this 10 times. And now you have turned $100 million position at 2.5 billion.

[Michael Batnick]

Wait, who's doing that? I'm not doing that. I wish I was not doing it.

[Garrett Baldwin]

No, you should, Michael.

[Downtown Josh Brown]

We should. Michael. We should be rehypothecating.

[Michael Batnick]

What am I doing? All right, let's get back to the stock market. So there, there. There's all sorts of weird, as I keep saying. So our friend Todd Stone has this killer chart. I guess it's a table. And he updates this all the time. And we're looking at every year that The S P 500 was positive.

[Garrett Baldwin]

Yep.

[Michael Batnick]

And then also how much did the top 10 stocks contribute as a percentage of the total? And of course, 2023 and 2024, it was all the big boys that did the heavy lifting. It was like 60% of the overall return. But year to date, the S P is marginally positive.

[Garrett Baldwin]

Right.

[Michael Batnick]

So I don't know how Todd did this math. It doesn't matter.

[Garrett Baldwin]

I don't get.

[Michael Batnick]

Doesn't matter.

[Downtown Josh Brown]

Minus 533.

[Michael Batnick]

I don't know. Whatever.

[Downtown Josh Brown]

Yeah, no, I. I have it.

[Michael Batnick]

Not.

[Downtown Josh Brown]

10 stocks are a detracting.

[Michael Batnick]

No, we know. I know. But the negative that Todd's my quant. I don't care. The point is this. It's never happened before. You've never. You've never seen an environment.

[Downtown Josh Brown]

That's the weird. That's one of the weirdest things about this year. That's right.

[Michael Batnick]

And I've got.

[Downtown Josh Brown]

It's anti leadership.

[Michael Batnick]

I've got.

[Downtown Josh Brown]

It's an anti matter.

[Michael Batnick]

I've got two more data points and then I'll shut up. So our friend Andy Thrasher has a chart that shows as of Yesterday, The S&P 500 has a three month negative return. However, more than half of large cap stocks are up 5% or more over the last three months and 38% have advanced 10% or more. We'd have to go back to 1990, 2000 to find a similar setup. And then lastly, so you've got this tug of war between the top 10 sucking wind, giving everybody else an opportunity to make some alpha, which is great, and the rest of the market and they're netting each other out. Right, That's a tug of war. And we're like, we're not moving. So this is the tightest range for the S&P 500s to start a year in history. And this just feels so wrong. It doesn't feel like this is possible given like even prior to the missiles flying. It just feels like there's so much noise and anxiety between private credit, the software, like all of this. It just feels like the, the AI build out what is happening.

[Downtown Josh Brown]

Well, don't you see that this proves my, my idea?

[Michael Batnick]

Like yeah, you're always right.

[Downtown Josh Brown]

No, no, no. In this particular case though, doesn't go back to the second chart for a second. So the S and P is a three month negative return, but more than half of large caps are up 5% or more during that period and almost 40% are up 10%. So chart off what's happening very simply. No people are selling the AI trade that they were long last year. They're coming out of the Metas and the Microsofts and the Amazons because those stocks are not working and they're not sitting around and doing nothing. They're saying, well shit, look at Exxon. I'll buy that. Look at Lilly. These are mega cap stocks that institutions can buy in size, liquid as water, and they're going up and they have nothing to do with data centers. And that's, that's, that's my point. Nobody is sitting on their hands. When they get out of Microsoft they're like, okay, what else are we doing? And I, that's happening like that. They're not waiting, they're not deliberating. You can't deliberate. Yeah. So I really do think it's money coming from the left pocket to the right and the S and P is so far able to hang right where it's been and not give up anything.

[Garrett Baldwin]

If you are a person who prescribed, subscribes to the idea of cycles and credit cycles and investing accordingly. This is, this is the idea of when liquidity expands, you start to buy high beta Right off the bat. Right. So the second that, the second that they engage in QE or the liquidity bottoms in that, that was early 2023 high beta stocks. And then once everybody misses that rally because most people do because they're still bearish from previous events, that's where you start to see movement into some commodities and financials. Then as we move into the later part of the cycle, we are there now. Yeah, we're on the other side of the cycle now. So now you're seeing the Mag 7, the higher beta stuff drop. It is a rotation to energy, materials and consumer defensive. So it's right on time. And then what's the last stage duration? You know, actually moving into bonds and looking at the possibility of the ten year coming down. We'll see what happens.

[Downtown Josh Brown]

That's party's over.

[Garrett Baldwin]

That's party's over. And then you're buying. Yeah, you're going out, you're looking at corporate bonds.

[Downtown Josh Brown]

How long do these, how long does this phase?

[Garrett Baldwin]

65, 65 months According to Cross Border,

[Downtown Josh Brown]

65 months is the entirety of the cycle or the period that we're in trough to trough. How long does the consumer staples energy commodity phase typically buy us to start getting all beared up?

[Garrett Baldwin]

If, if we were not providing a significant amount of $55 billion a month and Japan doesn't step in and Besant doesn't tell them to get their crap together, we'd be there. I have a very hard time believing that with all we know that we would see SOFR blowing out right now. That's, that's exactly what Powell hinted to and that's what Logan hinted to in Dallas. They said we've got problems in SOFR and our banking reserves are too low. So that's why they're providing the support now. This can, this can go.

[Downtown Josh Brown]

They're not going to call, they're not going to call it QE ever again.

[Garrett Baldwin]

Oh, it's called Reserve Asset Management or something like that. And then they'll come up with name for the next time.

[Michael Batnick]

Yeah, come on you muppet, keep up.

[Garrett Baldwin]

So, so, but the thing is this can, this can either be a slow process and if you look at 2022, it lasted nine months really. You know, but we also did have a war at the same time. But in 2008 it went fast and we were, we were at the top of a cycle in mid 2008 and then it just went. So you know, this is why, this is why we follow momentum, this is why we watch, you know, these key Moving averages. I think right now, if we were not providing the support the way that we are, we would be in a much different place.

[Downtown Josh Brown]

Rate this. Rate this phrase on a scale of 1 to 10, 10 being very accurate, 1 being ridiculous. Private credit is this generation's version of subprime.

[Garrett Baldwin]

Seven. Seven.

[Michael Batnick]

Come on.

[Garrett Baldwin]

Yes.

[Michael Batnick]

Come on.

[Downtown Josh Brown]

Michael does not like it.

[Michael Batnick]

How do you. Subprime, dude. All right, go ahead. You first.

[Garrett Baldwin]

No, no. So. So subprime you have to.

[Downtown Josh Brown]

Which did not matter until it mattered.

[Michael Batnick]

Qualify your statement, Josh. Are you saying that. Are you analogizing them just in the sense that subprime was. Is like the, the epicenter of the spark or that these companies are subprime?

[Downtown Josh Brown]

Great, I'm glad you asked for that clarification.

[Garrett Baldwin]

Yes.

[Downtown Josh Brown]

I'm not the one making that statement, but I think it's meant to mean that it's a sign of something worse beneath the surface, not as it being causal.

[Michael Batnick]

Okay?

[Downtown Josh Brown]

Now in the case of subprime in 06 07, it was both. It was both a sign that there was up underwriting taking place, and it was causal because it was pulling out the Jenga pieces at the bottom of the tower. I. I'm not the one making that statement. I am the one hearing that statement. And I would love to hear from Garrett.

[Michael Batnick]

Private credit is. Is pricing a massive default cycle. It is. So, Garrett, what do you think about this?

[Garrett Baldwin]

Well, this is. But again, it doesn't have to be. It doesn't have to be a subprime crisis of, you know, the proportion of everybody, you know, losing their house. I'm not, I'm not saying it to that degree. I'm saying that the source of the crisis is in private credit. Like it wasn't subprime and like it was an unprofitable tech stocks and like it was savings and loan, you know, paying 20%, having to pay 20% to make eight. This is, this is where. This is where a lot of people who are banking experts that I listen to on a regular basis have consistently said, look, this is going to be the source of the next crisis. And if we look at. If we look at the. We look at what this really is. This is the shadow banking system, right? It's the. It's. It's private credit, it's private equity, it's hedge funds. It's all largely unregulated.

[Michael Batnick]

What being financed. Being financed by the traditional banking system.

[Garrett Baldwin]

But what was there, the. These banks are originating loans and then just can't wait to get rid of. Get them off their get them off their balance sheet. That's what they're doing. Like since Dodd Frank, banks don't bank anymore.

[Michael Batnick]

They, but the banks, but the banks are making the loans, dumping them, right?

[Garrett Baldwin]

Then they're handing them, and then they're handing them off. And, and that's, and that's the real issue at the end of the day. Like where, where did the origination of the housing crisis start? It didn't start at Goldman. It started with MBS in the shadow banking system according to Posner and the people who really covered that. So I think that this is if we were to ask what's the highest likelihood of where the current crisis is. Oh, and by the way, we've already seen a lot of issues. We already are seeing refinancing challenges coming and we're also seeing the fact that the United States government is going to have to refinance a lot of its debt and could potentially crowd out those private credit companies. And that's very comparable to some of the things that we've seen in past private credit.

[Downtown Josh Brown]

The private credit guys though would say, okay, so we're the only people who are going to have defaults.

[Garrett Baldwin]

Right.

[Downtown Josh Brown]

But come on, everyone's going to have everybody. Yeah, this is so, but unless we

[Garrett Baldwin]

print more money, let's just print another $750 billion and plug the holes because that's, that seems to only we could

[Downtown Josh Brown]

have a health, a health crisis to, to give us cover to do that.

[Michael Batnick]

There will be no appetite obviously to bail out these private credit companies that have, that took loans from KKR and Blackstone and the like.

[Garrett Baldwin]

I mean obviously there won't be any appetite. They'll still, they'll still try it.

[Downtown Josh Brown]

Can I ask you as a follow up, One of the things that's really interesting is that we used Dodd Frank and Basel 3 and all of these things to keep banks out of this business of making these loans. And that is why we have the Apollos and the Aries of the world at the scale that they are. And it's a good thing we separated the deposit taking banks with you know, nurses and police and firefighters where they're putting their money. We separated that from people making loans to, to let's call them lower quality borrowers or riskier loans or whatever good. However, the banks over the last couple of years couldn't stand stay on the sidelines completely. So they're not directly making the loans they're funding.

[Michael Batnick]

They're financing the loans.

[Downtown Josh Brown]

They're financing the loans. I don't, I'm not Suggesting that that's some sort of like systemic thing. But I would say they're not ring fenced from this circus if it goes sideways.

[Garrett Baldwin]

One of the things that I think we have to take a little bit of a step back in discussing this is you have to look at what has happened in this market for the better part of 18 months. Let's go back to Japan. Let's go back to the Japanese crisis. Biggest drop since 1987 on August 5, 2024. Right. Since then, and I think it probably happened again since then we have had volatility spikes and then pulled back by 40% in 10 trading days. That had never happened before, before 2011. And my point is this is, what is, this is policy related. This is being, this is Japan stepping in, this is, this is the Treasury Department stepping in, this is the Federal Reserve stepping in. And it's just become constant. It's just this process. And I think that that is one of the other underlying reasons why this market's just doing what it's doing. There's ample capital in the system and as we know there's always ample capital capital until there isn't. And that is why my concern is in the private credit side because it's opaque and because we've already seen what's transpired, we've already seen these, these types of moves and I don't, I think it's just going to be a constant theme that we're not going. It'll go away for a month and then it's going to come back in April and then.

[Michael Batnick]

I totally agree. So everybody is concerned.

[Downtown Josh Brown]

Yeah.

[Michael Batnick]

Blackstone's Equity is down 40 plus percent. All right. Nobody, nobody does not know what's happening here. But I think you're so right because B cred, which they just had a big redemption for which they met, 26% of the portfolio is in middle market software companies. So if Salesforce is under trouble, if their business model is under trouble, can you even imagine companies that are 1/100th of the size?

[Garrett Baldwin]

Right.

[Michael Batnick]

So these, the payment in kinds that we keep hearing about, the defaults which we haven't heard anything yet, there's really been nothing. There's been some fraud, some write downs, but we haven't even started to see the underside of some of the stress in these portfolios. And that is what makes this even just so much more bizarre. Like the returns are good, the defaults are not there, but they're pricing in GFC like defaults. And in 2008, 2009, I think high yield, just. That's not a perfect proxy. I think defaults were like just above 10%, maybe 12%. And that's what is being priced into some of these BDCs right now. There's a, there's leverage there, so that's getting washed out.

[Garrett Baldwin]

Ira.

[Downtown Josh Brown]

Yeah. Ironically, the Hygie and JNK ETFs, which you used to be able to use as a proxy for visually being able to see stress in the high yield market, in the junk bond market, they're not as effective because those portfolios are way higher quality than they used to be, though. Like the bonds that make those, that, that index, both of the indices upon which those products are based, they're just better credits. I don't know if they'll stay that way. But that's not a good. That's not a good canary anymore. That canary has been upgraded to, I don't know, a cockatoo. Like, it's not, it's not even in the coal mine. Those are better credits. I think in this cycle, the publicly traded BDCs are a way better. And it's not to say that they couldn't be wrong, but I told you six months ago, I'm watching those more than anything else because that's like real time stress.

[Garrett Baldwin]

There's this, there's that scene in the Big Short where they're talking about mortgages and they're like, who shorts housing? And then they stop and they go, oh, my God, this is like the MBS is down like 30%. And it's, it just comes at you really, really quickly and you don't even realize in real time that it's happening. And I have a, I have a value reversion model that we built that I pulled from a lot of different academic sources. And right now, looking at this, it's all BDCs, like, from like, from like value quality perspective, from reversion perspective, from the ability, like Warren Buffett rankings, it's Chicago Atlantic bdc, Manhattan Bridge Capital, Chicago Atlantic Real Estate Financing, BP BCP Invested Corp. Carlyle Secured Lending. Like, this stuff looks dirt cheap.

[Michael Batnick]

So this is my point.

[Downtown Josh Brown]

Yeah, everybody sounds like anything I want to buy, right?

[Michael Batnick]

Hold on, hold on. Risk is like risk. The subprime is always. And it's not to say that people didn't see subprime coming, right? But everybody is all over this private credit trade. Everybody is bearish. The equities are bombed out. And guess what, what makes me feel a lot better about this not being the next subprime. These things are illiquid. So yeah, they'll bleed 5% a quarter until people come down. And if the returns stay reasonable, eventually the 5% selling pressure will abate. So that makes me much more optimistic. Not that I'm naive to the risk that this is not the next subprime.

[Downtown Josh Brown]

Do you think that there are a lot of people that want it to be?

[Michael Batnick]

Yes, the Financial Times certainly does.

[Downtown Josh Brown]

There's shade. There's a shade and Freud element to this where people who did not make money in this space and have watched these guys become billionaires and they have, they think they have no exposure to it. I think there are a lot of people rooting for defaults and blow ups and they want to see some of these guys personally humbled. And I think the same could be said about what was going on with Silicon Valley bank and people wanting to see the startup economy implode. I think there's an element of that, and I'm not saying the reporters covering this are definitely in that camp, but it's really easy to spin every single headline as being dire because there's a huge audience who will click on that.

[Garrett Baldwin]

There's a, I would, I would say two elements of this. And I want to, I want to phrase this properly. I still think that there is a angst and anger that will always linger from 2008, particularly for people who are under 50. And I want to point, I'm going to be 45 in a month. How many financial crises have I lived through in my lifetime post 2000? It's a lot. It's like it's 2008, 11, 15, 8. Like it's, it's a constant process. And on top of that, I think there's a cultural issue here in the US and it's kind of emerged over time, but people are really, I don't want to use the word bloodlust, but there's like, there's an element of revenge that is kind of like an undercurrent of our, of our system, especially for the billionaires.

[Michael Batnick]

Like everybody wants people on top to, to, to have.

[Downtown Josh Brown]

You're on the bottom, right? If you're on the bottom of the K, you, you would, you would love nothing more than to see private equity guys that bought your favorite sports team and whose kids are getting into the schools that your kids can't. You would love to see them taken

[Michael Batnick]

down a peg, dude in handcuffs. People would celebrate it. Honestly. That's the world we live in.

[Garrett Baldwin]

And even if we, and I think it's, even if we are if that group is impacted. So back in the day, well, we got to bail it. We got to bail out 2008 because the housing market's going to go down. And that's going to impact you. At this point, though, I think there are. There is a large group of people that are willing to take down their own ship if it takes, you know, some other people down with it. And that's.

[Downtown Josh Brown]

I think that's political. Especially. Especially they'd love to see rents come down.

[Garrett Baldwin]

Yeah.

[Downtown Josh Brown]

Because. Yeah, I mean, look, I don't think people want to see a ton of job loss. I don't think people want to relive 2008.

[Garrett Baldwin]

Yeah.

[Downtown Josh Brown]

But they, they do want to see some karma come for the top half of the K. We.

[Garrett Baldwin]

I live in Maryland.

[Downtown Josh Brown]

It's a normal human instinct.

[Garrett Baldwin]

I live in Maryland right now, where our electricity costs just keep going up. And you mean the, the art. The anger here is not only am I paying for all of the AI centers that are being built in Virginia with my. With my money, in addition to that, I'm paying for what will ultimately potentially take my job. Right? So that's like. That's like hiring your replacement and then giving them your money in the process while you're training them and that. And that is very palpable here in Baltimore County.

[Downtown Josh Brown]

Yeah, that's the crazy thing. Like, there was an. There was an employee who was not laid off by block last week. This week, I lose track. This, like, probably two days ago, Jack Dorsey came out and said he's firing 40% of the company, right? They're going to go from like 13,000 employees back to six or whatever or seven. And somebody who was part of the 60% that gets to stay quit anyway. And she went on, like, this social media tirade, and she's like, dude, they've been shoving this AI shit down our throats. We have to use AI in everything. None of it works. None of it is helpful. There are no efficiencies from it. But they've just been saying, AI, AI, AI. And then after two years of that, they fire half the company.

[Garrett Baldwin]

Right?

[Downtown Josh Brown]

And it's like they made everybody use AI so they could figure out who they could get rid of sort of thing. And that was like the, the last insult. So I do. I agree. I think societally there's a. There's an element to that out there.

[Michael Batnick]

Percent I have a question for you guys on what. What can. What can break this? So, John, throw that bespoke chart up again, please. So I mentioned that these 1% reversal days, like the down 1% and finishes is green is, is bullish. There's only so much that we can withstand. Like if you continue to see this, that will turn from, from bullish to bearish. And what I mean is the red dots that bespoke has in this chart. I know it's a little bit hard to see those are the times where it's down 1% at the low and finishes green. But it's the first time in three months. Okay, so that's what we just had.

[Garrett Baldwin]

Right.

[Michael Batnick]

That's the first time in three months that's happened. When you start seeing that cluster and it's really only happened in the, in the lead up to the dot com bust in the aftermath and 2008 trot off when that start when that behavior starts to become a pattern, that's when eventually the flush happens. Like so if we start to see more and more of these, I'll become concerned because that's what changes behavior.

[Downtown Josh Brown]

What could. So what could, what could break this meeting? Like what could break the cycle and get us out of this kind of weird market behavior? I posited on Slack the other day a really big strategic acquisition or two. Not a private equity take, not an LBO or not a financial transaction. But if a big European bank made a bid for Apollo, that would get people to shut the up very quickly about.

[Michael Batnick]

I'm saying the opposite, Josh. I'm saying to the downside.

[Garrett Baldwin]

Yeah.

[Michael Batnick]

What could break the retail's likelihood of saying, you know what, like I touched the stove three times. Like I'm going to. So you mentioned like the money boots

[Downtown Josh Brown]

on the ground in Iran would probably do it.

[Michael Batnick]

The money goes from Microsoft to Halo stocks or whatever. The money doesn't stay still. Eventually it will stay in the money market.

[Downtown Josh Brown]

Job loss. That's the answer to your question.

[Michael Batnick]

I think, I think you're right.

[Garrett Baldwin]

Tax people won't change.

[Downtown Josh Brown]

People won't change their investment behavior until they lose their job. And if enough of them do that will that you could say Goodbye to the 401k inflows for at least those people who are affected. But we haven't seen it. In fact, the ADP report this week, Garrett, you called it a narrative violation. What do we make of this situ? Where are all these job losses that we're pricing in?

[Garrett Baldwin]

I just wanted to, I just wanted to add one last tax payments might be the other thing. Right. So seasonally we have a lot of. We look at the money markets going back 2024, 2025 yeah, but that's a short term phenomenon. Sure it would, it would, it would take us into April. But then the question is. All right, well, if it takes us into April, does the, does the Fed continue with its asset management strategies?

[Downtown Josh Brown]

I mean that's getting benefits, but we're getting the benefits of the tax deal this year, the 2025 tax deal, the big beautiful bill. Those benefits haven't shown up yet. That's now, that's this year. So that might be a countervailing force.

[Garrett Baldwin]

This is why I just follow one number and one thing with momentum and then I just trade accordingly. Because.

[Downtown Josh Brown]

Yeah, I was gonna say this is why I stress eat.

[Garrett Baldwin]

Yeah, yeah, yeah. 100.

[Michael Batnick]

Let me ask you this. One of the things that I said, you know, if there's anything that's like flashing a yellow, maybe, maybe a shade of red light, it's the fact that Staples were going parabolic.

[Garrett Baldwin]

Yes.

[Michael Batnick]

Like that was, that was concerning it just at least I was concerned by it. And those stocks, if you look like those stocks have gotten whacked off hard in the last four or five sessions and as a matter of fact we have a chart showing the sector dashboard. John Q, throw that up, please. So this is looking at a bunch of various factors above moving averages and making new highs versus making new lows.

[Garrett Baldwin]

Right.

[Michael Batnick]

And I feel really good that Staples are now at the bottom of the barrel in terms of like weakest breath now. I don't feel great that financials are down there with it. I don't feel great that at the

[Downtown Josh Brown]

top of the leaderboard how fast those cooled off. Wow.

[Michael Batnick]

Yeah. I don't feel, I don't feel great that utilities, energy, real estate are, are the best and industrials, materials like that. To me that, that does feel late cycle like it, it just does. Now maybe it's healthy rotation and maybe, maybe the tech trade comes back and it was just a short term rotation. But what's your take on, on what we're seeing in terms of the leadership with these.

[Garrett Baldwin]

What happened to me? Did I just chunk out?

[Michael Batnick]

That's okay, we still hear you. Just put your. Just click the.

[Downtown Josh Brown]

I think the data, I think the date what happened? I think the data center took your.

[Garrett Baldwin]

Yeah, I think, I think they, they

[Michael Batnick]

hear me and we hear him.

[Downtown Josh Brown]

Took your juice. We hear you fine.

[Garrett Baldwin]

No, give me one second.

[Downtown Josh Brown]

All right. This is pre tape so we can. Don't worry. No, no, no pressure.

[Michael Batnick]

And he's gone. By the way. This, this is awesome.

[Downtown Josh Brown]

He's, he's so smart. Right?

[Michael Batnick]

Really good conversation.

[Garrett Baldwin]

All Right, There we go. That was weird.

[Michael Batnick]

All right, well, you're back. So. So, Gat, what is your take on.

[Downtown Josh Brown]

Somebody's trying to silence you.

[Michael Batnick]

So he is near, he is near the Capitol.

[Garrett Baldwin]

So I am.

[Michael Batnick]

What is, what is your take on what I described as the defensive nature of the leadership board?

[Garrett Baldwin]

Well, it reminds me, and it's very comparable to 2022, and you have geopolitical events transpiring and you ask, like, what can take this down? Well, a significant move in oil can, significant move in food can. And then go back to June 8th. I mean, the XLE falls from 46 to 34 in like three weeks. Right. So that, that might be it. It might just be a bunch of, you know, funds that are following the momentum in the defensives, following the momentum in the energy, following the momentum in the industrials. They all just wake up one day and say, you know what? We're taking profits and we're doing it right now. And that is, that's exactly what happened on June 8th of. And I think we fell 15% S&P, maybe 12% in a very short period of time. And it was just. Everybody woke up and said, that's it, time to exit. And then we had another hated rally through the summer. That was one of the most hated rallies I'd ever been a part of was after that huge fund sell off. We burned higher all the way through when Jerome Powell spoke in Jackson Hole.

[Downtown Josh Brown]

Do you think the rally in stocks and gold last year proves what you're saying about liquidity being the primary thing? Because, like, what else would cause that? It's a very strange thing to have golden stocks race each other higher. And when I see stuff like that, like my. The obvious answer is, yeah, Garrett's right. This is just, this is just money being pumped into the system and buying, buying whatever it can.

[Garrett Baldwin]

It's not me saying that. That's Stanley Druckenmiller back in 1988 in Barons saying, hey, you know, you know what you really want to do? You want to be involved in an environment where the central bank is accommodative and boom. Like, you know, absolutely nailed that call in 88 and had a great run through 90. You know, as far as gold, last time I was here, we chatted, I said, you know, what was the, what was the major catalyst that a lot of people still forget? And it was the fact that we weaponized the dollar against Russia. And you. And you start to see that run in gold transpired. That's when all the central banks started to bid. And, and then the retail, the retail trade in China has just been off the charts. And one last thing to keep in mind, you know, we're at the top of our cycle. China's actually at the bottom of theirs. So if China is engaging in stimulus, they actually would. That would benefit gold, it would benefit oil, it would benefit natural gas and other metals. And that goes back to that argument that China is a manufacturing economy and we are a financialized one, so that when we do qe, we tend to benefit our banks.

[Downtown Josh Brown]

I want to hit your idea CrowdStrike against Blackstone Minerals. Tell us what you're writing about and what's the idea here.

[Garrett Baldwin]

I was watching you guys last week and Michael had a thesis around CrowdStrike, I believe, and I was curious about it because from a fundamental perspective, I found that stock to just be, you know, 20 times sales, unprofitable, potential AI disruption. And granted, like, it's a great momentum stock. But then you've got Blackstone Minerals, which is cheap, pays 8%, highly capital efficient, and is, you know, owns the royalty rights on the fuels and natural gas that's going to actually be pumping, you know, energy into AI. So I was, I was curious, you know, what you were seeing in CrowdStrike from a valuation perspective that made you excited about it.

[Michael Batnick]

So I, I bought CrowdStrike at 355 and I sold it yesterday at the Open at 400.

[Garrett Baldwin]

There we go.

[Michael Batnick]

So that was, I mean. And it traded up to 425.

[Downtown Josh Brown]

No 8, no 8% mineral yields involved.

[Michael Batnick]

No, but you know what?

[Downtown Josh Brown]

Unnecessary.

[Michael Batnick]

I think one of the lessons that I've learned over a long period of making a lot of mistakes, trading is what we said earlier. You have to know what environment you're in.

[Garrett Baldwin]

Right.

[Michael Batnick]

And I was not looking to be an investor. I think CrowdStrike is the best comp, the best company in the space. I mean, this is what Josh is. I take his word for it.

[Garrett Baldwin]

Right.

[Michael Batnick]

But that's not what I'm doing here. I thought, I thought the two day, the 10, the 9% back to back sell off was absurd. And we know how these markets rebound. And I thought, I'll shoot my shot. And if I was wrong, I would have, I would have taken. See, I'm winning either way, Garrett. If I was wrong, I just took a tax loss.

[Garrett Baldwin]

Right?

[Michael Batnick]

No big deal. So that's my thesis. You know, Josh could speak to the longer term thing. Yes.

[Downtown Josh Brown]

The crowd strike multiple needs to be thought of in the context of it being a network effects business. Not a SaaS business. The way Falcon works. Imagine an invisible shield all around the globe covering the most important government, governmental institutions, NGOs corp, mega corporations, small mid business. Imagine this invisible shield. The more companies that join and utilize CrowdStrike, the more threats come in. And the CrowdStrike. The CrowdStrike AI will take an attack on one company that's under this umbrella, learn from it and instantly share that knowledge with every other company that's under that umbrella. So it's a network effects business. If CrowdStrike had three customers, the product is not as powerful because you're only intel sharing amongst three potential victims of hacks. If you have 30 companies, it's 10 times more powerful. If you have 300 companies, what happens when you have 3,000 companies or more, which is the case with CrowdStrike, then all of a sudden every single attack just becomes intel for how to better protect all of the other thousands of companies before that hacker could even get around to them. And that is why it's got the valuation that it has. I think at 100 billion being the most important cybersecurity company in the world, it's probably undervalued. And that revenue, that 5 billion plus in annual, annual run rate, ARR, it's catching up, it'll catch up slowly. Valuation has a premium because people understand once you're in and under the umbrella, you don't leave. You'd have to be crazy, you'd have to be crazy, literally crazy to rip this stuff out and go shopping for another vendor.

[Michael Batnick]

So this is not scientific, but I think we all agree at least maybe we do. Not scientific, but for the leader in cybersecurity to not be, to not one day be a half a trillion dollar business, like yeah, you're gonna have to eat, right? It's not gonna be a smooth ride. It never is. But that's the type of like Josh has, Josh has the personality, which I don't. To ride, to ride massive winners, which is really hard.

[Garrett Baldwin]

Yeah, it's very hard.

[Michael Batnick]

Right. Like Josh has been in Nvidia forever and that's what it takes if you're going to make 3,000% in a stock. I can't do it. I just know I can't if I'm up. I sold Crash like for a 12 gain in four days and I'm like woohoo. Right? Like that's just my personality.

[Downtown Josh Brown]

Cyber's. Cyber's TAM is faster. Bigger and bigger and faster. The cybersecurity opportunity TAM is growing. They can't like gartner and all these research organizations, they. They can't even keep up with their own estimates. They keep going higher. And AI. AI is like a gift to cybersecurity because now you're 1000xing the amount of workloads, and every workload needs to be secured. And every time Snowflake and Microsoft Azure pass some corporations data between each other, that's a workload trans transaction that needs security around. So AI is an accelerator for threats, not a. And. And obviously a revenue accelerator too, which I think Kurt's made the case for on the last call pretty effectively. He says it better than I could say it.

[Garrett Baldwin]

The reason I bring up BSOM and the way that I think in terms of crowdstrike, I see that as something that I want to trade. I see it as a, you know, a momentum stock up and down both. Both ways. And what I. What I look at. We talked about this briefly. Last time I was here, one of the things I went back and I did back in November, I started to look at again, thinking about ends of times, what were. What did all the wealthy families own over time? Like back in. Back in Rome, back during the fall of Judea, back during the, you know, revolution, the Revolutionary War, back during the, you know, French Revolution. It's always choke points. It's always like toll roads, things like that.

[Downtown Josh Brown]

So land, bridges. Land.

[Garrett Baldwin]

Yeah.

[Downtown Josh Brown]

Waterway, waterways, things that kick off concubines. Just saying.

[Garrett Baldwin]

Baseball cards. So. So what I. So a name like BSM or energy transfer or is that related to Blackstone?

[Downtown Josh Brown]

Bsm. Is that related minerals?

[Garrett Baldwin]

No, no, no, no, no, no, no.

[Downtown Josh Brown]

So they just happen to be called Blackstone Mineral.

[Garrett Baldwin]

Yeah, there. It's a. It's an interesting company. It started as a lumber company back in the 1800s, and they. They then found out that there was just a ton of oil under all of their land. Where is. It became Texas.

[Downtown Josh Brown]

Did you watch Train Dreams?

[Garrett Baldwin]

No.

[Downtown Josh Brown]

Holy.

[Michael Batnick]

Oh, come

[Garrett Baldwin]

on.

[Downtown Josh Brown]

Now I got to read the book.

[Michael Batnick]

You loved it. That I. Yeah, watch what you.

[Downtown Josh Brown]

What you watch on your phone.

[Michael Batnick]

Yes.

[Downtown Josh Brown]

Okay.

[Michael Batnick]

That is a you. I was. I was watching.

[Downtown Josh Brown]

Problem.

[Michael Batnick]

I was watching a Nick game while I watched it. No, that is a. That is a. No, that is a you movie.

[Downtown Josh Brown]

Yeah, no doubt. I was floored, stunned, but you could say.

[Garrett Baldwin]

But anyway.

[Downtown Josh Brown]

Oh, Nuremberg. Sorry? Nuremberg on the plane. 12 out of 10.

[Michael Batnick]

I'm watching that tomorrow.

[Downtown Josh Brown]

Michael Shannon. What's the kid with the overbite? Rami Malek. Freddie Mercury. And who's the third guy in it? Russell Crowe as Herman Guring. Holy Shit. With a German accent, this is out of the park.

[Michael Batnick]

So speaking of German accents, Garrett, how do you find what you keep talking about liquidity at the repo market and what they're doing over there? What are you looking at? Like you keep talking about this, this phenomenon. What exactly like for the listeners, are you, are you seeing on the screen to judge whether or not there is favorable excess or a lack of liquidity?

[Garrett Baldwin]

So the, the primary source that I pull from, I had, I had studied Cross Border capital at. In 2018, but I pay very close attention to what Michael Howell writes about. So Michael Howell's on substack. He founded Cross Border Capital.

[Michael Batnick]

What's his last name?

[Garrett Baldwin]

How H O W E L L. Okay. And he created a. He created a global liquidity index. And he has written about this, you know, for years and years and years and wrote a book called Capital wars back in 2020. And what was interesting about it and the reason that I subscribed to this, I was trying to make sense of the 2023 rally because if we go back to 2022, and I know that JC had talked about this, he's like, everybody was bearish and we turned around and we went bullish. I was trying to make sense of that because I remember there was, there was a. I think we were at 3,800. There were people calling for 3,250 because the expectation was that the Federal Reserve was going to run off its balance sheet. And how wrote in the Financial times, I think 20-12-2022 bottoms in. And he explained his cycle. And once I read that book and then I started to analyze that and assess that, looking at Federal Reserve liquidity, looking at the type of auction sheets from the treasury, focusing heavily on soma. Soma looking at what's happening with the Bank Japan, what his number is. It's a liquidity index. It is all money outside in addition to the M2. And there's a multiplier effect on it. And he's got it somewhere around $185 trillion. And that's all of the money that is used for the purposes of refinancing. Because basically six out of every seven new dollars that is created is used to refinance existing debt. It's not used to actually fund growth.

[Downtown Josh Brown]

How much does that 185 trillion fluctuate from? I don't know what periods, month to month or.

[Garrett Baldwin]

Yeah, there's a chart, there's a chart somewhere that I would, that I'd have to pull for you. But I think that during the 2020 crisis, it pulls back from like 100 down to 75 really quickly. And then the Fed prints and we, we start to take back, we start to take up again.

[Downtown Josh Brown]

Oh, so this thing, this thing can move.

[Garrett Baldwin]

Yes, and one of the things that's interesting about it. So we built a momentum indicator. It's basically three different things that we look at. But the primary thing is we're just taking the number of stocks that are breaking out versus breaking down in a very academic perspective. This goes back to the work of Grant Henning, who's a very prominent momentum trader. He wrote a book called the Value and Momentum trader back in 2009. And then we layered that with JP Morgan's 2015. And then Cliff Asness momentum is everywhere report in 2012. And we built this model and it's just basically green minus red equals positive or negative. And I'm not saying that it predicts everything, but when this goes negative, that's where we've had these big events. So, for example, it went negative on August 1, 2024. Three days later, Japan crashed.

[Michael Batnick]

Will you email me the next time it goes negative, please?

[Downtown Josh Brown]

Where do we stand? Where do we stand at?

[Garrett Baldwin]

You're a subscriber to me and the money printer, aren't you? Don't you get the Capital Wave report? All right, I'll give it to you for free. Okay, so, and the point, and the point of what that is measuring is there is a relationship between liquidity, momentum and then returns, right? So momentum lives upstream, or forgive me, liquidity lives upstream. Momentum is the result. Equity returns are the consequence. And that's a pretty simplistic way of looking at markets. And I don't try to overthink that things.

[Downtown Josh Brown]

Where do we stand now?

[Garrett Baldwin]

Right now we're negative. We've been negative since. The last time that it went negative was January 28th. Two days later, gold and cra, gold and silver crashed. And then a week later, we had the biggest. That huge momentum move that transpired. I think it was the Wednesday.

[Michael Batnick]

When did we, when did your model flip negative?

[Garrett Baldwin]

January 28th.

[Michael Batnick]

H. It's such, such a weird market,

[Garrett Baldwin]

even though we are at all time highs. Right? And that's what's, that's what's really crazy about it. And then the last thing that we're. We're focusing on, there's a, there is a slide that I put in the deck and it's just a breakdown of all, like the breakdown stocks right now. So you've got. I don't Know if you guys can throw it up or not.

[Downtown Josh Brown]

Yeah, we have.

[Garrett Baldwin]

Where is it? Yeah, yeah. So these are. Those are the stocks that are part of the equation that are breaking down right now. And as you'll see, you know, Campbell's is on this list.

[Michael Batnick]

What is that? What the hell is going on, Campbell? I just brought up the chart.

[Garrett Baldwin]

It makes no sense because you would think consumer defensive, but didn't they. Didn't the guy say that they're serving horse meat or something and people don't.

[Downtown Josh Brown]

No, I. This does make sense.

[Michael Batnick]

It's a perfect downtrend. This stock looks like a perfect trend.

[Downtown Josh Brown]

Generation Alpha is never going to drink metal cans filled with salt water. So this is a company that is constantly forced to reinvent itself every three years and it never quite does. And it's been a value trap my entire career. But put that one aside. Brown Foreman's interesting to me because it's also consumer defensive. This is basically bourbon and whiskey. Right. When you have the alcohol stocks breaking down with the private equity stocks.

[Garrett Baldwin]

Yeah,

[Downtown Josh Brown]

that's some shit going on. I don't like seeing citizens.

[Garrett Baldwin]

Yeah.

[Downtown Josh Brown]

I don't like seeing genuine parts on a list like this because of how pro cyclical that company is. Literally like, you do not want to see the auto business in trouble. That's one of the worst signs that exists in the stock market for the health of the economy. So I don't love that. Interesting to see a bunch of banks on here, too. That crept up on us and happened out of nowhere. Yeah, I get it. I like this. This is. This is a good window.

[Garrett Baldwin]

So what we do. So what we do with that at that point is now. Now we. We created a. I mean, I love Claude because as I said, it's just like strapping a rocket to my back because I'm just naturally curious about building things. We built a. We built a free website for insider buying that scrapes from Edgar. So now what I'm doing is I'm taking those stocks that are breaking down. I'm looking for insiders to stop start buying. And we've seen this happen. We saw it with msci. We just saw a huge buy with the trade desk. Trade desk is up like 30 today. TDD was down. Was on that list. Was on that breakdown list. And then there was a little bit of insider buying the second that stock came off that list. There's two different things you can do. You can just trade it to try to buy it. Traded to the upside, set a tight stop. I saw spreads below where the CEO or the CFO purchased the stock. So I'm willing to take possession of the stock at a lower level, but I'm targeting like a 20% return and 80% probability of profit and an annualized return somewhere in the 100% range. And I just do that over and over and over again. If the stock falls back on the breakdown list, I get back out. But you know what? What we're seeing is that even the insiders are not calling the bottom for names like KKR and Aries right now.

[Downtown Josh Brown]

Garrett, I want to. I want to let people know where they can follow you for more. And something tells me your website might crash once this. Once this episode goes live. So give us. Give us the URLs.

[Garrett Baldwin]

So that platform that we just showed, that stuff is not going to be live for another couple of weeks. But that's just on my website. Garrett Baldwin dot com. We'll make it accessible. Me and the money printer is at substack. I never miss that.

[Downtown Josh Brown]

I never miss it.

[Garrett Baldwin]

I. Public, we have a. We have a paid level called Capital Wave Report that follows Liquidity Momentum, insider buying. We put that reading up every. Every day. If it goes positive, we send an email out letting everybody know. If it goes negative, we. We do the same thing. We created insider stock buys. I think we'll just read the article. It'll be in there. And then Postcards from the Edge of the World is my other. Other thing on.

[Downtown Josh Brown]

That's a little bit more like polyish almost, right?

[Garrett Baldwin]

Yeah. And again, that focuses on the choke points. Right. So I've talked about AI. I've talked about a lot of these other elements, but we do have a stock recommendation that aligns with it each week. And then in about a week, week and a half, I'm going to start writing more about the AI phenomenon and try to focus on that. So those are the two primary things. Figuring out what else I'm gonna do relatively soon.

[Downtown Josh Brown]

My man, you.

[Garrett Baldwin]

You.

[Downtown Josh Brown]

You crushed your first appearance on the compound. And friends, we're so happy to have you. And we'll do this live in person in New York sometime maybe this summer. Sounds good.

[Garrett Baldwin]

I love it. Great to meet you, Michael. Thank you both for your time.

[Downtown Josh Brown]

All right, awesome, guys. Thank you so much for watching and listening. We appreciate all your reviews. It tricks the algorithm into thinking that this is a good podcast. So please help me be a part of that trickery. And don't forget to subscribe, and we'll talk to you soon. Thanks for listening. Thanks for watching.