← The Mark Moss Show
Loading summary
Transcript129 lines
- [00:00]
Advertisement Voice
This is an iHeart podcast. Guaranteed Human.
- [00:05]
James Thorne
I turned off news altogether.
- [00:08]
Mark Moss
I hate to say it, but I
- [00:09]
James Thorne
don't trust much of anything.
- [00:12]
Pharmaceutical Ad Voice
It's the rage bait.
- [00:15]
Advertisement Voice
It feels like it's trying to divide people.
- [00:19]
Mark Moss
We got clear facts.
- [00:20]
James Thorne
Maybe we could calm down a little. NBC News brings you clear reporting.
- [00:27]
Pharmaceutical Ad Voice
Let's meet at the Facts.
- [00:29]
James Thorne
Let's move forward from there. NBC News reporting for America.
- [00:34]
Advertisement Voice
Eczema is unpredictable, but you can flare less with Epglis, a once monthly treatment for moderate to severe eczema. After an initial four month or longer dosing phase, about four in ten people taking ebglis achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing.
- [00:54]
Pharmaceutical Ad Voice
Empclus Librekizumab LBKZ, a 250 milligram per 2 milliliter injection, is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema, also called atopic dermatitis, that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. Eglis can be used with or without topical corticosteroids. Don't use if you're allergic to ebglis. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Ebglis. Before starting ebglis, tell your doctor if you have a parasitic infection.
- [01:28]
Advertisement Voice
Ask your doctor about ebgliss and visit ebgliss.lilly.com or call 1-800-lilyrx or 1-800-545-5979.
- [01:35]
Mark Moss
This July 4th, come celebrate at America's Block Party. Hosted by America 250. America's Block Party is a can't miss 4th of July concert happening at the Los Angeles Memorial Coliseum.
- [01:44]
Advertisement Voice
Experience music, performances by major artists, patriotic tributes and the kickoff to giving 4th, helping to make July 4th the largest day of giving in American history.
- [01:54]
Mark Moss
It's more than just fireworks.
- [01:56]
Advertisement Voice
Join this landmark celebration and get your America's Block Party Tickets now for $17.76 at america250.org LA what's up y'?
- [02:06]
Starbucks Ad Voice
All? Summer's got a different tempo. Everything's a little looser, brighter. One plan turns into another. You hear something, you stay a little longer. Next thing you know you're Somewhere you didn't plan to be. It's those in between moments. That's where the ideas hit. Conversations stretch out. Little memories sneak up on you. Sometimes it's just about what's in your hand. That color, that chill. The new Tropical Butterfly Refresher from Starbucks. Guava and passion fruit flavors with mango pineapple flavored pearl. Yeah, that feels like summer before you even taste it. Funny how one small stop becomes the best part of the day. Start your summer rhythm with Starbucks. Try the new Tropical Butterfly Refresher from Starbucks.
- [02:54]
Bethenny Frankel
This is Bethenny Frankel from Just be with Bethenny Frankel. Most dog food is marketing, not nutrition. That is why Biggie and Smalls eat just food for dogs. Real 100% human grade food with ingredients I actually recognize. And yes, I do see the difference. Better digestion, healthier skin, more energy. Dogs that feel better. My babies. If you've been on the fence about switching, stop overthinking it. What's more important than your furry babies and their health? Go to justfoodfordogs.com right now and get 50% off your first box. No code needed. Just try it.
- [03:30]
James Thorne
It's debt and arms race in AI. Those are the two things that have changed the game. And we are going to have a Fed that understands that.
- [03:41]
Mark Moss
And then what's your take on the independence of the Fed? Is that a good thing or a bad thing?
- [03:44]
James Thorne
That's the four year cycle, which goes into the 20 year cycle, which goes into the 60 year cycle.
- [03:50]
Mark Moss
I thought you'd been calling bitcoin the metagame. What is Bitcoin's role in this metagame?
- [03:55]
James Thorne
People actually think that the Clarity act has anything to do with Bitcoin and it doesn't. Does anybody do research anymore?
- [04:01]
Mark Moss
The SpaceX IPO, what does that signal to you? Well, have we seen that before?
- [04:07]
James Thorne
We really don't know, Mark, what the future holds. So we need to have humility. We are not God and things can happen.
- [04:14]
Mark Moss
I've never been shaken out of any of my position.
- [04:17]
Starbucks Ad Voice
But
- [04:19]
Mark Moss
James, I want to dig into so much with you. I've been following you on X Twitter. You're one of my favorite followers right now. You talk about a lot of cycles. I like to talk about. I want to dig into macroeconomic cycles, asset valuation regime changes, the Fed stepping into markets, Bitcoin, of course, all those things. But let's just start the conversation with this. For the average investor listening right now, what's the single biggest misconception they're operating under? And maybe the most Expensive thing they believe that maybe isn't true anymore.
- [04:51]
James Thorne
I think what the average investor has to understand is to have a good investment thesis you have to, I call it recognize what game we're playing. And I think what Mr. Or President Trump and Scott Besant is, are doing is they're rewriting the rules of the game as we speak. And what we're doing is we're heading into a period where growth is going to be hot. We are going to have supply side economics and we are going to have a Fed that understands that and is going to abandon what I call Keynesian economics. So the number one thing your listeners or your viewers have to get is that the game has changed. And once that you get that then you can start looking forward and stop being moved around by the noise of the market on a day to day basis.
- [05:49]
Mark Moss
I like that. So the game has changed which then means all the models are outdated. And so you need to first understand the new game that's being played. So you have a new set of models, a new set of, of measurement sticks to, to look at the mod or look at the market through I think is what you're saying. And so one of the things I've been saying you over and over.
- [06:09]
James Thorne
Yeah, Mark, and, and, and, and, and, and on that point the models, you have to understand that Wall street is still playing the old game. Okay, so their models are wrong.
- [06:22]
Mark Moss
Okay, the models are wrong. So it's misreading where we're at. One of the things I see you talk about quite often is that the market is screaming bubble. We're seeing asset prices continue to make new all time highs. And you're like, well it's only a bubble. If you look at it through the old lens. If you look at it through the new lens, it's not a bubble, it's something completely different. Is that an example of that?
- [06:45]
James Thorne
That's fair. Like let's, let's just, you know, I'll put my CIO strategist hat on. Look Mark, by 2030 the S& P is going to do somewhere between 650 to $700 in earnings.
- [06:58]
Mark Moss
Is that, is that, was that what you're predicting?
- [07:00]
James Thorne
I am predicting 650.
- [07:02]
Mark Moss
Okay.
- [07:03]
James Thorne
And that's very conservative. And where you get that is now we're getting into the game a little bit is the fact that you know, and you get these fancy articles in the ft. But look, the President wants to run the economy hot. We have to grow out of the debt. That is the forcing function. Right. And you And I, we were talking before about going back into history. This goes back to Edward Gibbons book on the on the Rise and Fall of the Roman Empire. When you get too much debt, the empire fails. We need to grow out of it. So if you grow the economy hot, by definition nominal GDP is going to be higher than historic norms. Earnings growth is just a function of, of the growth of nominal gdp. So in non innovative times, times where there's the productivity growth is de minimis, it's typically one to one. I would suggest to you that because of AI and crypto and everything, you could put a one and a half to two times multiple on earnings growth relative to GDP. We've got earnings growth right now at 16% this year. So you do and you sit there and go, I picked 2031 because that's when the big beautiful bill, the 100% tax deductions of capex stops. You do some very conservative 10 to 12% earnings growth don't include dividends. I can get you to $650. You put the multiple on. You want 22, 25. If we're going to get a peace dividend, which I think we're going to get with President Trump, you can go back to the 90s and forward. PEs were extremely high. So 650. Put a 20. You wanted to put a 22 fine. You want to put a 25 fine. And we could be low. We could be low.
- [09:06]
Mark Moss
When you, when you say peace dividend, do you mean if we can get the Middle east settled down and potentially end the Russia, Ukraine situation, we get into this era of prosperity and peace where the world could sort of work together? Is that kind of what you're talking about? Peace dividend?
- [09:20]
James Thorne
And, and yes. And that's where you go back to the late 80s with the fall of the Berlin Wall and you know, the end of the Cold War where we had this very short period of time where multiples expanded.
- [09:34]
Mark Moss
What were multiples during that period?
- [09:36]
James Thorne
Well, they came in very, very low when Volcker got in, but they peaked over 35 by 2000. So I'm just calling for a little bit of an earnings, I mean, multiple increase to let's say 25 trailing. And you can get these numbers. The point I'm trying to make is going back to the 90s. And it's funny because now you're getting some of the strategists saying, well now it's an earnings bubble. In the 90s. There were, there wasn't any earnings. Now what you're getting is we're getting into a period of time of historically high earnings growth. Given that we're going to run the economy hot, given with 100% tax deductions of capex, that goes right to basically earnings. And we're going to get productivity growth, which is going to juice earnings. I mean, I think it was Hewlett. Hewlett Packard came out this week and basically said they've hit their 28 numbers already.
- [10:33]
Mark Moss
Wow.
- [10:33]
James Thorne
Dell came out with a monster number. Right now I'm not saying you're going to grow at 15 to 16%, but let's just average 12%. And we're not even including dividends. You, you can get those assumptions. So what I do, Mark, is there's the basic model. Now, agree or disagree, right? You know, there's an old saying, all models are wrong. Some models are useful. So here's a model. Let's use it for a conversation purposes. You may not like it, you know what I mean? But when you start sitting here saying, having strategists come on and sit there and say we think that the S and p will be 10,000 at the end of the decade, you can deconstruct that to sit there and go, they're basically saying there's no earnings growth or GDP growth. Right. The, the price target that they're giving is not supported by the economic fundamentals. Now I give it you the. I'm suggesting to you that nominal gdp, which is inflation added to real gdp, is, is the driver of earnings. And now what we do is, I suggest to you we get a multiple of that because of productivity growth, because of AI.
- [11:46]
Mark Moss
I love it. So let's, let's then back up. So then what gives us that and so does that bring us into kind of where we started, which is this isn't just another cycle. This is a regime change. So we're sort of seeing the end of the, as you said, maybe a Kenzian sort of way to run the Fed. We're bringing in a new, a new system, a new regime. And that's what's going to enable that. So I guess the question is, what is that new regime? What are we, what are we missing in that piece?
- [12:14]
James Thorne
The regime is, is that let's another son. We're assuming that there are two big players in this game. One is the United States and the other is China. And the arms wraith is to. Is towards dominance in artificial intelligence. And if that happens, then you get a period of time where, you know, you, you, you, you people are really, really focused on you know, growing and innovation deregulation, you know, tax cuts, making sure that innovation can really, really kick in. And in those periods of time, and I'm not saying those periods of time are very few and far between. That's the, this is the point, right? Don't say think this is going to last forever. But in those types of periods we typically get very strong secular bull runs that basically surprise everybody. And we've got an earning support for that. And so for me, it's two things. It's debt and arms race in AI. Those are the two things that have changed the game.
- [13:30]
Mark Moss
Okay, would you liken this to sort of like a post World War II re industrialization where sort of, as you said, everybody's sort of focused on building this out. So the re industrialization. Sure. The air race, which then means that we need more energy, which then means we need more mining and refining. And so you sort of have all of that like that entire industrialization.
- [13:52]
James Thorne
What is unique about this one is when you look at what happened after World War II is the United States was the unrivaled power of the world. Nobody else had a nuclear bomb. And what the United States did was instead of taking over the world, they decided to rebuild the world. And the United States does not get any credit for that whatsoever. And that environment where the United States, you know, some people call it Pax Americana, right? Or the rules based order after World War II, the United States, Keynes at Bretton woods warned Harry Dexter White, who was the American negotiator, that this is unsustainable. And it is unsustainable. So where it's different is the United States. And President Trump is clear on this and correct on this is that they've needed to take care of our own backyard. Secretary Bessant gave a wonderful speech at the Reagan symposium the other day. We need strong economic growth domestically. So why it's different is it's called the economic sovereignty angle, where the United States no longer wants to, they need to de risk, they need to focus on productive capital, which is completely different than after World War II, where they help grow the world. And they had this rules based order where everybody could basically devalue their currency to the United States dollar and you know, do what we call economists would call mercantilist policy. And basically the United States was the destination of all the cheap goods. Our standard of living fell, our manufacturing base got hollowed out. We were warned about it by Keynes. Well, that's being reversed right now. So that's how that's that's how I was. So what's very interesting is, you know, with the straight of Hormuz and what the President is doing there is he has called on everybody. He is basically the tide has gone out. And everybody in the western world realizes that their economic policies, their industrial policies are not set for an era going forward where the United States is not going to write a blank check for the rest of the world.
- [16:29]
Mark Moss
Here's a question I get asked almost more than any other question mark. How much bitcoin should I actually own? Not should I own it, but how much? Now almost nobody can answer that with a real number. The retirement system was built for an era. It's gone. Meanwhile, they're printing away your purchasing power while your 6040 portfolio, it limps along trying to keep up. Now that's exactly where Unchained comes in. Now if you want, you can book a free 30 minute session which is a one on one call with one of their specialists and they'll walk you through the retirement calculator, all live. They'll model, you know, the Bitcoin strategy side by side with a traditional 6040 portfolio over the next 20 years. You'll also see what your balance sheet could look like at retirement, how much bitcoin you could be holding, and what different tax structures do to the outcome. At the end of the call, you're going to walk away knowing exactly what your number is and they'll send you a complete personalized link where you can keep it, you can revisit it, you could share it with your friends, your family, whoever else needs to see it. So book your free session@ Unchained.com MarkMoss and so that's a massive shift. And so that sort of changes everything, which is sort of this big, I guess the part, part of the regime change. Part of the regime change. We could talk about the Strait of Hormuz and what that's really doing. But maybe if we stick with sort of the regime you talked about like this new axis of power. So sort of like the Trump administration. We have Scott Besant who seemed to handpick the new Fed chair, Warsh, both of them coming from the goats, the goat farm, Stanley Druckenmiller, you know, company. They're not monetary theorists. I mean, Jerome Powell wasn't even a monetary theorist. He's an attorney versus, you know, Yellen was. But these are actual practitioners, people who have actually done it at the highest level. And so that's part of this, this axis. And so when you look at that war percent Druckenmiller part of a network, right? Not, not individual appointments, but part of a network. Does that lead into the great game? Or how do you see that? Is that like the instrumental piece of sort of re. Envisioning the way this is all coming together?
- [18:29]
James Thorne
You've got very smart people now at the helm. I can't tell Scott Besant anything he doesn't already know. And, and Warsh is as sharp as a tap, right? And you talked about the goat. So we've got guys in the White House. Well, I mean, I know Mr. Drunkenmiller's not in the white, but we've got people in Washington, D.C. that are the, the smartest guys in the room. And I, and, and I mean that. And so they, you know, and remember, I think I wrote an article about this. You know, Scott Besant taught history of economic thought at Yale. They're going back and their economic playbook is really clays and from an Alexander Hamilton and the American system coming out of the Revolutionary War. I mean, if you go back and you read that economic history, it's just chapter and verse, right? It's, it's there. They get it, they're going to implement it. And what I would say to your listeners and viewer, the smart money in the room knows this, right? And so, you know, everybody's freaking out, but everybody's, you know, you know, should recognize the fact that, you know, we're going using, we're using Henry Clay's playbook, right? We're using Alexander Hamilton's playbook.
- [19:44]
Mark Moss
Can you tell us what those are? Can you tell us what that, what that playbook is?
- [19:47]
James Thorne
Well, it's, it's, it's. Have, you know, what Alexander Hamilton said was let's have, you know, let's identify our industry leaders, okay? Let's have tariffs high enough to protect, to protect our industries, but yet at the same time not too high enough that products don't come in so we can generate revenue. Remember, there wasn't an income tax back at that point in time and they had to pay off the debt from the Revolutionary War. You had the Monroe Doctrine, right? You had Andrew Jackson basically going after the Federal Reserve because they had mission creep, which is exactly what Scott Besant has identified. There's mission creep. They're not above the Constitution of the United States. He has been very eloquent, very transparent in implementing President Trump's policies on that. So once you place yourself back into the 1800s and the United States evolving after the Revolutionary War and weaning itself off of The British Empire. Everything makes sense in terms of what they're doing. Obviously it's not perfect, but it rhymes. And so you can see the sequencing in the way that they're doing it. I, I would argue with, with Warsh, what, you know, when, what's very interesting, when I got, when I, I was leaving grad school, I was in, no, just started grad school but, you know, start really paying attention to markets. It was Volcker was the Fed, head of the Fed and then it was Greenspan. And Greenspan didn't have a PhD. Greenspan came from Wall street. And so he had market savvy. And I think Warsh has market savvy. And so look, I think what they're going to do is they're going to get rid of the dual mandate. They're going to basically not focus, you know, be handcuffed by the labor market. I think they're going to redefine what price stability is. They're going to undo what Bernanke did, which was canonized 2% inflation using CPI or CPE. We know that that's a flawed area and it was Ben Bernanke who ushered in the era of Keynesianism into the Fed. And so we're no longer going to focus on the demand side, which means economic growth for Bernanke and Yellen and Powell, because I don't think Powell is, pardon me, strong enough academically to push back, which is a whole other argument. But it really is, is that with, with Bernanke and Yellen, if the economy grew, that was inflationary, growth was bad. Worsh and Besent are coming in with Trump's policies, pushing out the supply side where it's the supply curve, the through America first or the American system. And it's not necessarily the case that when you do that, that strong growth is inflationary, you're pushing the supply curve out. That's all these plants that are being made back in the United States. And so it's unfortunate because when you look at the makeup of the Fed, there's a lot of individuals that are voting, I would say presidents of regional Feds that aren't subject matter experts. They're very smart, but they're not smart. They haven't taken a graduate course in economics. Right. And then the import, the unfortunate thing I would say is the PhDs on the Fed, whether they're a regional president or whether they're a governor, should be ashamed of themselves of how they have carried on knowing that over the past period of time, the things that they were saying were not supported by standard basic economic theory.
- [23:40]
Mark Moss
Oh, man. So many, so many, so many questions to ask there. I want to get to the way that they're looking at inflation and accommodating this future growth, which I think is important because Powell and the previous Fed chairs weren't accommodative to that. And then the Fed independence in there. Before I get into that, I just want to ask you a question. As somebody who has, you worked in, you've been a cio, you've been in the trenches, you've had to make the money, you've had to deal with these policies. Do you see there's just a big gap. So you said, I seen Scott Besant saying, you know, calling out the PhDs at the Fed. You know, you got all these PhDs, what are they even doing over there? And to the point that you said, which is, you know, they have all these PhDs, and they're still recommending the same policies, even when they can look in hindsight and see how bad they were. And so do you think it's a big gap of that, that the PhD, the theorist versus the practitioner, as someone who's sort of been on both sides of that, it's like, hey, you know, we, we rely on our models. Well, models don't save you in the real world because if you go bankrupt, you go bankrupt kind of a thing. I mean, is that, is that the gap?
- [24:40]
James Thorne
Yes, I think what's been. You're a practitioner. You. I have, you have a PhD or I have a PhD, great markets don't care. Right. But then you get these guys at the Fed that are probably the smartest kid in their high school, smartest kid in their undergraduate class goes to graduate school. Everybody says they're really, really, really smart. No one's ever pushed back at them, and then they go get a job at the Fed. And it's a, basically, it's an echo chamber. It's a hall of mirrors. And these people have never had to basically deal with the consequences of their actions in the real world of allocating capital. And that's where I see, I see Worsh and Besant completely differently. Right. And I say, and that's where I would put, I would put Alan Greenspan in that camp, you know, you know, Ben Bernanke is a really, really smart guy, but he's never, he's, his whole life's been in academia or a bureaucrat. He's a technocrat. Right? So it's, you know, and, and, and let's be clear, they don't think that they're being political. Like, let me be honest. Right, but they are. I mean, in the sense that when you adhere and suggest that there is only one school of thought in economics and there's always these jokes, Mark, about, you know, you put five economists in the room to try to order a pizza and it takes forever to happen or whatever. And they feel that there is only one way to look at the world and that's through Keynes. And what's wild about this is that on Keynes's deathbed he came clean and said that the General Theory, his famous book on, was mislabeled by his publishers to sell more books. It was only supposed to be used for the period of time during the Depression. But what do we have? We have a massive school of thought coming from mit. This is a whole. Mark, this is generational. This is my generation of an economist growing up. Do you know what I mean? This was indoctrination of a view. And it was, you know, does it have some validity? Yeah, but it's, it's not the canon. It's not like Moses came down from the mountain with the tablets and said, this is the way to go. It's not. And we're, and we're seeing that. And besent knows that in Warsh knows that the question is going to be what do the rest of the other global central bankers do who still adhere to the dogma or to still, you know, worship at the altar of the general theory, of John Maynard Keynes theory?
- [27:15]
Mark Moss
Okay, so I got to tell you what I've been doing with my money lately. I moved my cash over to river, and before you ask, yes, I still pay all my bills in dollars. Everything works the same. But here's the real difference. You see, river pays me 3.3% on my cash and they pay it in bitcoin.
- [27:31]
Bethenny Frankel
Bitcoin.
- [27:31]
Mark Moss
So my money that was just sitting there doing nothing at all in the bank, it's now stacking bitcoin while I sleep. And I started thinking like, my bank takes my deposits, they loan those deposits out, they make 12, 17, 24, and they pay me 0.04%. I mean, honestly, that's kind of a shakedown when you think about it. Now Rivers, FDIC insured, they use full reserve, they charge no fees. So I don't know why I didn't do this sooner. So click the link down below and get a hundred dollars in bitcoin just for getting started. And so that, that brings up the piece that you had referenced earlier, which is sort of, kind of going back to this historical period where Hamilton was fighting the central banks. And sort of now we have the fight at the central banks again where, you know, Jerome Powell has been, you know, pretty open about the attacks that have been sort of lobbed his way and, and the threat, the danger of the Fed losing their independence. And to me it's like, well, shouldn't the Fed be working with the treasury to push the policies and the game of the United States not trying to work counter to that. And you said maybe they weren't really political. But we do see them pushing dei. We do see them pushing green energy policies. We do see them pushing lots of policies that are political, they're not monetary. So I guess, number one, is that what you're seeing, that's how you're reckoning back to history. It's sort of like in history we saw them go after the independence of the Fed. We're sort of seeing that again now and then. What's your take on the independence of the Fed? Is that a good thing or a bad thing?
- [28:56]
James Thorne
Well, yeah, it's interesting. So the one period of time recently that we had what we would call, I would call the American system, right. You know, clay system that really supercharged the US economy was during World War II where we focused on productive capital, where the Fed was subordinate to the treasury in terms of financing the war effort. And the economic results were phenomenal. I mean, people forget that when Pearl harbor happened that the folks thought that the United States could not crank up their industrial strategy quickly enough. And, you know, the United States proved the world wrong again. So there's, there's a little snapshot in that World War II period. And so what I would suggest is, you know, let's, you know, I love John Le Carre and James Bond, and that's my happy place. And I love conspiracy theory, but let's just say it was serendipity. And what I mean by that is, you know, you had the global financial crisis, right? Then we come out of the global financial crisis and we have an extremely harsh change in the regulatory environment that really handcuffed, shall we say, the private market credit creation vehicle to redistribute natural resources or factors of production. And there, there was voids that needed to be filled and that was filled by the central bankers, rightly or wrongly. Okay? And it went too far. So constitutionally speaking, yes, they have gotten admission creep and they need to get put back in the box, I think. You know, and, and, and so the Fed act is not above the US Constitution. I have a real problem with Mr. Powell saying that oversight because of the cost overrun in the Fed building is attacking the Fed in terms of their independence on setting monetary policy. Not only they think about this, go do a deep dive on what happened what how the Fed got involved with Elizabeth Warren. And in terms of unbanking people and industries, choosing winners and losers. I don't think that was supposed to happen there. You know, independence is about setting the monetary policy. Right. And so setting interest rates, ensuring that we have a solid US dollar. Right. Not all these other. Mr. Besant knows this. Right.
- [32:03]
Mark Moss
Why should they be independent for that? Even though. Right. Because if we need to re industrialize, if we need to push this AI race, shouldn't it be accommodative to that goal as opposed to. Nope. We're just going to do it in isolation.
- [32:16]
James Thorne
It should. And if you read the legislation, that's what it says. You know, given what the President wants, you know, setting. They should not be setting interest rate monetary policy in a vacuum and not taking into consideration the policy agenda of the administration.
- [32:38]
Mark Moss
Okay.
- [32:39]
James Thorne
They are not the emperors of the economy.
- [32:42]
Mark Moss
Yeah. And so with Warsh and Besent seemingly coming from the same school and potentially working together to achieve those ends, that's the regime shift which could then now usher in this whole new era that, that we've been sort of talking to and then something you've been talking about. So as we're making new all time highs and you're calling for the S and P to get even higher because of both, I think technology AI as you mentioned, probably also because of the regime change. And you're talking about like when you look at these, you mentioned Dell. When you look at Dell or when you look at The S&P 500, it's not a bubble. It there's a RE rating going on. So how would you explain the RE rating? Is the rerating because of these other factors we've already discussed or is there some sort of new measuring tape that you're using?
- [33:29]
James Thorne
What PE ratio do you apply to an economy that is running hot, that is having an innovative cycle for the ages? It's not the same PE as we had coming out of.
- [33:50]
Mark Moss
Got it.
- [33:52]
James Thorne
The global financial crisis when we had secular stagnation and we could barely grow. So if you know, and so if you're flexible enough to realize that we have. Think of a regime in an economic growth like a golf course. Right. Some are very narrow and you have the high rough and Some are wide open. You know Mark, you and I go there, we can, our hot, our slices and hooks, they don't matter, right. Everything is, everything is, is pristine. And so my whole point is that we're in a new regime, therefore we need to re rate the market. Given the fact that the President is implementing a policy as he should, to strengthen the productive capacity of the American economy, that doesn't mean that he's going to ignore the world. He's just not going to blank check it. We have an AI arms race between China and the United States. And oh by the way, the United States is now a resource superpower, which is what really the knock on effect of the Strait of Hormuz does. Everybody realizes that secure, you want secure safe natural resources. It's in the Americas, not in these other areas. And so in that type of environment, remember like just a couple of years ago is the end of US exceptionalism. I mean I can't, everybody just forgets about it. So what multiple do you put on it? I sit there and say, you know, look at, I am not, I'm not an advocate for 35 times or 40 times. Right, 25 times, that seems reasonable. I might, and I'm going to be low. Look Mark, when I came in this year I said 8,000 on the S and P. Right? Hey, you're a cycle guy, right? I mean, and why did I say that is because when President Trump went into the Rose Garden and we had that, that, that, that market hiccup where we had a 20% drawdown, 20% drawdowns are really, really, really important in cycle theory. And it is my opinion, it's not everybody else opinion, it's my opinion that it sets the four year cycle clock. Because Mark, you never have gotten two years in a row where you've had a 20% drawdown intra year outside of a global financial crisis or a recession. So everybody else was using the old playbook saying this is the midterm election cycle, which means that or the presidential cycle. So that's the four year cycle, which goes into the 20 year cycle, which goes into the 60 year cycle. The President reset it all and so would I. And when you, when you just do that, it's never happened before. And then you start saying, well what if we just set the clock? What if he just unplugged it and plugged it? So it says 8,000 this year to possibly 8,400 is the stretch. But look, I can get you by spring of next year to 93 to 9,400. My number for next year, pardon me, is 10,000 because I think you have a very good opportunity of getting another 16% earnings growth year. And if you do that, you get 1400. Yeah, sorry, you get 14. Sorry, you get 400 on earnings. And then, and then you sit there and go, mark, okay, that's two years in a row. What are all the backward looking strategists going to start to do when they realize that we've just clipped 16% or 15 or 16% two years in a row? I would suggest then you start to get the multiple expansion and you go from 22 to 25. I get you 10,000, right? And here's the thing that's very interesting and I want to amplify this. There are a lot of smart people on Wall street that are just reading the wrong playbook. They will get onto the right playbook. Goldman Sachs right now is really starting ub. They're starting to sit there and go, maybe we gotta look at this one. And they're starting to sit there and go, holy smokes, man, this, the earnings are really starting to kick in. And then all I am doing is saying, look, all you gotta do is listen to the earnings call, which is, you know, kind of going back against the economist. You listen to the earnings call and these companies like Dell and Hewlett Packard or whoever, because of the scarcity of silicon, which is the gating factor here, wafers, people are locking in three, four, five year contracts. That, that, that elongates the cycle. And why is that important? It's because typically a typical, a typical cycle in semiconductors is two to three years. If you get a five to six to seven year cycle, why then Micron doesn't trade at a discount to the market, right? If it trades at a market multiple mark, it's a $3,000 stock. Now I'm not saying it's going to get there in a New York minute, but then you start to go through the RE rating and here's where it gets unique. This is where you, your listeners got to be really careful. There are stocks that are getting RE rated now that are very expensive in the semi space. There are semiconductor stocks right now trading at 100 tons. I am not talking about those. They, they will grow into those earnings. I'm talking about these other areas. I think the market right now is getting a little bit too casino ish. When you know Nvidia and Micron, you know, there's a couple of really sweet, nice sweet spots. But the key in all of this, Mark is Taiwan. And the foundries in Taiwan are not expanding wafer supply fast enough to meet the demand. And as long as that happens, you're going to have scarcity and you're going to have these long term contracts signed, which means somebody who's forecasting, I don't know, $150 earnings in 2029, maybe you should be putting a 20 multiple on it, not a 9 multiple on it. That's what I'm saying. In terms of the RE rating.
- [41:03]
Mark Moss
Quick question. How much control do you have over your money right now? Technology's changed everything and now it's changing how money works. Crypto started as a niche, but now it's going mainstream. It's faster payments, more control, fewer middlemen. This isn't hype, it's just where things are going and getting started today, it's easier than you think. With a Rumble Wallet, you can buy Bitcoin, you can hold dollar back stable coins, you can even own digital gold backed by real gold. And it's all in one single place. It's a non custodial crypto wallet, which means that not a bank, but you, you hold it. Not a bank, not a platform. You controlled access to your funds. The setup, super simple. It connects with Moonpay so you can use your debit card, your credit card, your bank account, and you can be up and running in minutes. And for a limited time, you can start your wallet with $10 in US stable coins by downloading the Rumble Wallet and entering my exclusive promo code, Moss 10. When you sign up right now, you can even use your Rumble Wallet to support your favorite Rumble creators, maybe like me directly. So do this right now. Scan the QR code on the screen, click the link in the description or go to wallet.rumble.com moss and download your Rumble Wallet. Now from there you can set up your wallet. Enter promo code Moss10 to get $10 in US stablecoins. And this is a limited time offer, so you gotta do it right now, but take control of your money. Get started with Rumble Wallet today. Of course, terms and conditions apply. See the description below or visit rumble.com promoofficial rules for details. So the, the old playbook they're looking at is, is failing to realize the cycle that we're in, the regime change that we're in, the growth that we're about to face, the historical parallels. And if they understood that, they would realize that the RE rating should probably go up. And so they're missing that piece altogether. And so they're only looking at the stock price or the company valuation. And they're failing to realize the, the era, the regime, they're failing to realize the long term contracts, the cycle extending and the potential rerating.
- [43:00]
James Thorne
You nailed it. So if, if you and I were working together as a team, our conversation now is where's our offering? Right. I've said I've given you third 2031, right? I cannot foretell the future. Like, you know, this goes back, you know, Keynes. The real book people should be reading is Keynes treaty on probability in 1921, where he, he separates the fact between risk and uncertainty, right? And we live in an uncertain world where, you know, we really don't know, Mark, what the future holds. So we need to have humility, right? We need to basically understand that we, we are not God and things can happen, right? But if you go back in behavioral finance and this is, you know, critical when you, you know, is, you know, there was a, there's a, it all starts with, you know, the study of, you know, there are these French hikers in the Alps and you know, back decades ago and they got lost and you know, they worked their way to a safe house and they finally got found, you know, after the blizzard left and they got there and the rescue say, how did you get out or how did you get to the safe house? They said we had a map. They looked at the map and it was the map of the Pyrenees. And from there in behavioral finance it's all about Mark. We have to have a map, you and I. I just painted you my map. I know it's not perfect, right? I'm thinking we go to 2031, right? What leads us to believe that we stay on this route? What happens? What do we need to see to get on the off ramp? But what I'm trying to say is because you and I are having this discussion and we're not worried about, you know, the day to day noise in the market. Those are the discussions where this is what Peter Thiel would call the metagame. We're talking about the game above the game. And we're now discussing. Well, hey, Mark, Mark, it may be 2030, right? What hap. You know what happens if we get your 16, your, your 650 number? You get that in 29.
- [45:05]
Mark Moss
Yeah.
- [45:06]
James Thorne
You know what I mean?
- [45:07]
Mark Moss
What if, I don't know, it's the timing, it's the signs versus the timing. I want to get into the metagame, which I think you've called bitcoin, the metagame, which I'm eager to get into. But just to stick on this for a second, you talk about, you, you talk about having a map. I've called it a thesis. But like I have to have something that I think is going to happen. And rather than trying to like nail down exactly when things will happen over time, rather I look at the signs and I liken it to if I gave you directions to my house, I said, hey, turn right at this sign when you see the billboard go left. But I didn't tell you how long it was going to take. So you don't know watching a clock when you're going to get there. But you know when you're passing the signs, you're getting closer. And that's kind of how I've thought about it. And then information I'm receiving is then being measured against my thesis or my map that I have. Right. So it's like, okay, I see this new information, I see warsh coming in. Does this confirm or deny my thesis? Does it confirm my map? Is it checking off one of the signposts? That I'm getting there. And then as I see that I'm getting to the, you know, there's 10, 10 signs and I'm at sign eight or nine, I know I'm getting close to that off ramp, as you called it. Is that sort of how you're talking about it?
- [46:12]
James Thorne
Exactly. And, and, and you add things, you know, look, we might be wrong about the, the length of the cycle in terms of, look at if, if, Remember when President Reagan got in, you know, he affected society so much that when, when, when President Clinton came in, President Clinton was putting basically Reagan's economic policy for which was a supply side policy. Right. So are we back to the 80s where this, we get this big regime change and we go for 15 to 20 years? Mark, like I don't know, is this a short term blip? You know what happens if Trump loses the midterms? What if we get there too far, too fast? All of these things come into considerations. But if we have a model ideas about where our price, what our earnings are, we've got the meta game, we've got our top down, we've got a historical perspective. Now you and I can have some very interesting conversations. And it's not held Hostage by the 24 hour business, you know, news cycle that is basically talking about whatever the topic du Ju is for the day.
- [47:21]
Mark Moss
So let's move on to the, the, the big metagame, which maybe the, this is a piece inside the big metagame, but I thought you've been calling Bitcoin the metagame and sort of talking about the real metagame, which I think is also digital assets, stablecoins, sort of the clarity act, all these things together. And you've been talking about bitcoin being the real game is being in this metagame, not the price. And so the price is maybe distorting or making us miss the bigger play that's going on. If I, if I have that right. So what is, what is Bitcoin's role in this metagame or the metagame of bitcoin and digital assets?
- [47:58]
James Thorne
Well, I'll tell you bluntly then, if you want, I'll. You. I look at, I see bitcoin as, as a perfect near cash settlement or near cash substitute with no counterparty risk.
- [48:13]
Mark Moss
Yeah.
- [48:13]
James Thorne
Why do I say that? And why is that important? Because if you go, I lived. I lived the financial crisis. We did not have any exposure to the financial crisis. None whatsoever.
- [48:26]
Mark Moss
What do you mean you lived, what do you mean you lived it but didn't have any exposure to it?
- [48:30]
James Thorne
I worked when I was at the bank, we made sure I, we were the only. I worked for M T bank, which was owned by Berkshire Hathaway. And we, I, that's where I went to the States from Canada. And we, you know, we grew it. And, and we were the only bank in the United States that did not have exposure to the financial crisis.
- [48:48]
Mark Moss
Okay.
- [48:50]
James Thorne
And my department, right. The equity side, right. We had no exposure. But what I can tell you from, from I was just a guy like, so don't, you know, I'm you know, CIO or whatever, you know. But as a fly on the wall, I tell you what took it down, the system down is when the near cash instruments went no bid. Or let me be more focused or a little bit more blunt. When the money market funds broke the buck that in September of 08 that caused the crisis, the, the, you know, countrywide blowing up. Yeah, it was bad, but the system was absorbing that. Do you know what I mean? And then what was very interesting is you go back so if that, you know, and, and, and, and Chairman Greenspan testified on the Hill that it was settlement. It was settlement that caused the fight global financial crisis. Lo and behold, a couple of months later, we get the white paper. And if you really think about what bitcoin is, it has no counterparty risks because it's on the blockchain, okay? Whether you think it's digital gold or you think, you know, because there's a hundred, 100 million satoshis in every bitcoin, it's, it's a near cash instrument. You can trade all that type of stuff, but to its kernel it's a cash substitute that has no counterparty risk. And then I would say to you, the metagame is the financial system where people take, going to take it from the analog and we're going to put it on the digital where blockchain is going to be there. Ethereum's important. But bitcoin is going to be the center of collateral, credit, the whole shoot match. That's why Jamie, in my personal opinion, that's why Jamie Dimon in the American Bankers association, from my point of view, is they have delayed it as long as they have through regulatory capture with the help of Elizabeth Warren. Now they know that they can't do it anymore and they're going to have to compete. And let me be clear, they can compete. They're very, they're very smart. But it's, this is not about interest rates on stable coins. I mean this is the same argument going back into history, Mark. This is the same argument the Banking association had when the, with the introduced introduction of the money market funds back in the 70s. It's the same playbook. Oh my God, we're going to lose, you know, we're going to lose deposits. And they evolved. So to me this is, and that's why all the noise, all the, the junk that's going on, I mean think about it. Secretary Besant today, I was watching this before we went on, said that there's going to be a bitcoin reserve. Nobody cares because they've given the noise. They have fried everybody, totally fried everybody into believing that bitcoin is dead. And it's not dead. Blockchain is the biggest innovation in record keeping in finance since double entry bookkeeping, accounting since 1500s. Replace the abacus. Centuries ago you wouldn't put all your
- [52:26]
Mark Moss
money in one stock. So why have your whole life in one single country? Now if you've thought about another passport, Italy and bitizenship might just be what you've been looking for. Italy has one of the most underrated golden visas in all the of of Europe. Just a €250,000 investment threshold. And with bitizenship you can make that investment into bitcoin, not some risky business venture or real estate that you don't actually want approval times are usually about three to six months and you don't put any money in until your visa is approved. Plus with the golden visa, there's no physical residency. That's required. You can get full Schengen access from day one, and it's renewable forever. Now, Italy puts you at the heart of Europe, and with Schengen access, it gives you flexibility across 29 countries. If you want another passport and you want your investment to have bitcoin exposure like me, then bitizenship may be the answer you're looking for. So go to bitizenship.com markmoss and check it out. Let's dig into this a little bit. So the way that I would say it is we have bitcoin, not crypto. So there's bitcoin and then there's everything else. 19 and a half million of them. And then we have stablecoins. And I think you talk about Jamie Dimon fighting stablecoins. I want to talk about that specifically. But if we talk about bitcoin just for a second, if we stick on that, a couple things are you familiar with in technology and diffusion of innovation and technology cycles? Infrastructure inversion. So infrastructure inversion would be sort of like we had telephone lines, and so we put the Internet over the telephone lines, but the Internet was constrained because it didn't really work over telephone lines lines, because telephone lines had a real narrow bandwidth for just voice. And so it didn't have enough bandwidth for the Internet. And the telephone companies didn't like that. So they fought against the Internet trying to use their lines. Well, now the phone is over the Internet, right? And so, you know, we have a way, a system of moving money around the world that's antiquated, right? Whether that's the Swift system, the correspondent banking system, et cetera. And the bank, that banking system fought bitcoin. But now there's this infrastructure inversion going on where I believe, and I think what you're saying is the banking system will be built on Bitcoin. And one way that we can already see this happening, David Marcus has built a company called Lightspeed. David Marcus is from the PayPal mafia. If there's anyone in the world that knows anything about payments, it's David Marcus. Not only, not only at PayPal, but he was working at Facebook or Meta when they launched their Stable Coin. He had to go before the Congress to talk about launching their stable Coin that got shut down at the end. And what he realized is like, hey, none of that's ever going to work. It has to be built on Bitcoin. And so what, what he does now with his company is working with major banks already, where if you want to send a dollar or a Canadian dollar to someone In Mexico, you could send a Canadian dollar, it moves across a bitcoin rail and then they receive a peso. So literally using the, the bitcoin rail system to, to, to move money. So it's pretty interesting. So I see that happening, but I think, and so, and then I think you have sort of what's, I think you've been talking about like microstrategy, which is now sort of almost moving the fixed income market, the largest market in the world over to a bitcoin standard, sort of moving the 350 billion or I'm sorry, trillion of fixed income over to like a bitcoin standard. So that's kind of what I'm seeing is like this infrastructure inversion. One more thing I'd say is if you study geopolitics, you can see how there's a real loss of trust in U.S. treasuries. You know, Russia had their bank account seized, for example. And so it seems like in order for the world to move forward, we need a neutral reserve asset, as Keynes would have told us, right. In Bancorp on a neutral settlement layer. So that's sort of how I would sum up bitcoin. And then we could talk about stablecoin separately. But I don't know, what do you think about that?
- [56:15]
James Thorne
That's it. You nailed it. Right. And you know, Friedman talked about it in the 90s, right. And so, yeah, I mean, you, you just sort of think about, I mean, then go, but, but think about all the pushback, right? You've got, you've got a very profitable system.
- [56:29]
Mark Moss
Yeah.
- [56:30]
James Thorne
Like this is, you know, whether it's Machiavelli or whether it's, you know, Clay Christensen, who used to teach, you know, he just passed, but taught at Harvard. You know, you have to accept the status quo to push back on new innovation. Right. I mean, and if you think about it, I mean, prime brokers, I mean, where do they, I mean, think about this. If you put all, you know, we're talking about tokenization. Well, if you put tokenization, if you put all the stocks in the world, the publicly traded stocks in the world on the blockchain, then the whole profit center of the primes of locating stock, I mean, the whole thing, the theory was that they could only lend if they had it in inventory. That we know that that's a dirty little secret, right. That if you reconciled the paper claims to the underlying bearer assets are, is, is just exploded. So, you know, you've got decades of a system that is very profitable. I mean, a prime broker was never designed to have 80% of its earnings, basically on locating stocks to short. That system has never been reconciled. Okay, so. Yeah, so you understand. But you know what, going back to, you know, with your telephone analogy with the Biden, I would say with the Biden administration, right. They went to war against this and they stopped the evolution of blockchain. And what do you hear Mr. Besant or the president or, you know, the head of the SEC say if we don't get the rules of the game going here, they're going to go offshore. So just as we have a
- [58:28]
Advertisement Voice
war,
- [58:29]
James Thorne
an arms race in AI, there's one in blockchain as well. And you know, the financial system needs to innovate and they will. I mean, just think about, just think about what Jamie Dimon or just those big Wall street banks, once they stop trying to slow down the innovation and they apply AI and blockchain and bitcoin and everything, they're going to have their profits and their margins are going to expand and they need to get out of that and into the regime that we were talking about previously.
- [59:16]
Mark Moss
It's really hard for an incumbent business to disrupt themselves, though. That's always the problem that we see.
- [59:20]
James Thorne
That's, that's Clay Christensen. That's the innovator's dilemma, right. It's, it's, you know, he says, why, why is it that some companies can evolve and others can.
- [59:31]
Mark Moss
Yes, which is interesting because I've always thought that about the U.S. and the U.S. dollar, the U.S. having the U.S. dollar, you know, reserve currency of the world, reserve asset of the world, et cetera, has the most to lose. And so you would think, like you see El Salvador move on to a bitcoin standard years ago, and you could see smaller countries, Oman, whatever, doing that. But the US Would have the innovator's dilemma. Like we have the reserve currency, we're not going to do it. But now the US Is leading that. And if the US Leads that, I mean, Trump himself, Besant, Warsh, all those guys are actually leading that. Bent's been on. You mentioned what he said about bitcoin earlier. War just said, I think last week that bitcoin is the new gold for people under 40.
- [60:07]
Starbucks Ad Voice
Right.
- [60:07]
Mark Moss
Trump bought two and a half billion dollars of bitcoin himself. Right. His sons left real estate, went into the bitcoin business. And so to see the US leading that through the innovators dilemma lens, I think is pretty telling.
- [60:19]
James Thorne
So Mark, the interesting thing will be two years from now when bitcoin is at whatever price I Think it's going to be substantially higher from here where the average investor didn't take advantage of buying it right here. And you go that, you know, you're going to go back in hindsight and say what? You know, everything was there, the legislation was changing, this was changing, that was changing. Why didn't you. And what are they doing? They're all. Because the price buying parabolic charts. They're buying parabolic charts because every semiconductor company is going to be, is going to go through the RE rating system of the RE rating of Micron. Right. And it's not, not every semi stock is Micron.
- [60:58]
Bethenny Frankel
Yeah.
- [60:59]
Mark Moss
The price people, you know the Warren Buffett frame. Right. People are being distracted by the price and not seeing the underlying value of, of the network or the company or what's going on there. I want to talk about Jamie Dimon in the banks though for a second because you know, the stablecoin bill is another big piece of it. And, and I think if I'm not wrong, I think you're sort of a dollar bull as well. And maybe, you know, the stable coins are a way to sort of grow or cement the dollar's position in the world, potentially help Bitcoin. Maybe they work together. I think it's more of a gateway step to get there. But what I see going on is Jamie Dyne and the banks fighting stablecoins specifically. And you said just like they fought money market accounts in the 70s, it didn't destroy them. I think this could destroy them. And the reason why is I think there's three core purposes of a bank. Deposits, payments and loans. And if I don't need them for deposits, if I can hold my own stablecoins in my own wallet and I don't need them to make payments because now I can send and receive, kind of puts them out of business. But more importantly, the banking model is sort of based off of taking deposits and making loans. And then you have all these different durations. So you have this duration mismatch and if I'm able to move all my money at the speed of light, pull it in and make 4% or 6% in DeFi over here, I could just pull that money out. But now they're stuck in 10, 20, 30 year loans and it creates these massive duration mismatches like we saw three banks collapse in 2023 over. So I think it is really disruptive to the banking system and that's why they're fighting specifically the interest payment alone. But I'd love to hear your take
- [62:29]
James Thorne
on that, yes, the short answer. They need to evolve because if they compete, I mean that is, you know, what Saylor and MicroStrategy is doing with an 11 1/2% perpetual prepared. Right. I mean what the real question, the esoteric question is what if the risk free interest rate in the new digital world, the new blockchain world is 7%, 8%, not 2%. Right. And so if that is the case, the net interest margins for these institutions and their use of all this capital that they've never had to pay, it's basically a monopoly on free capital right now they got to compete. And I think honestly going back to what we said before, this is what percent, you know, and the President wants because we want credit creation to come, to start to come from Wall street as opposed to, to them parking money at the Fed, making 4 1/2% or what have you and not doing and not creating, being the creator of credit right after, you know, we could say and I'm going to be general here so I know if there's going to be people that are pedantic and say, you know, I'm being too general. But you know, the, what Warsh I think is really saying about the Fed's balance sheet is let's get credit creation back to Wall street, get it out of the central bank's hands. And if we can get that happening and we can get, you know, the multiplier. Right, the multiplier going, we get innovation. You know, there's really smart people working at those institutions. They're going to feel like smart people will find a way and find out where the alpha is. That's my whole point.
- [64:39]
Ryan Reynolds
Point.
- [64:40]
James Thorne
But yes, the old way of doing business, I said this decades. I got it. I can't believe along I remember I had to talk to somebody in Washington. They asked me my opinion and I said why shouldn't the banks go through the same type of disruptive period that the department stores did when Amazon came into their industry? Like what is so special about the financial industry so that they are not going to. And they're going to cease innovation. Meanwhile, all the other areas and sectors of the economy can be disrupted through innovation. It will not. It can't last forever. And I think, Mark, that's what we're seeing now.
- [65:23]
Mark Moss
Yeah. To put this into just some numbers for everybody listening when you talk about they need to update their business model. Tether, the largest stablecoin company out there in 2025 reported net profit of $2010 billion. Net profit staggering 33 million in profit per employee. And if you compare that, bank of America had 8.9 billion in profit with 210,000 employees. So $42,000 of profit per per employee versus 33 million. So bank of America did less net profit than tether Morgan Stanley did 1212 billion. So to your point about updating your business model, this new business model makes way more money on just pure profit alone and then especially on headcount on profit. And so you know, there is an upside for them if they can get with it. Let's talk about one more thing. I know we're running out of time here. You know, one, one last piece is AI so you know, you talk about this rerating and we're not in a bubble and the market's gonna go higher and the regime change and all those things we've already gone through, which I agree with all that. I'm very bullish as you are, which is why I love your stuff. Confirmation bias, whatever it is. But, but, but while all asset prices are seemingly making new all time highs, Bitcoin's down 45%. So the price seems to be price is truth, but sometimes price is not up to date. Right, Something like that. A lot of people are saying, and feel free to push back on this statement, but a lot of people are saying, and I sort of agree that maybe AI has sort of sucked that risk capital out of the market. You know, we have all the big IPOs and stuff going. It's been the big darling. So maybe it's sucked a lot of that risk capital out. Maybe real rates are still positive. So money's coming off the risk curve a little bit. Maybe bitcoin is just in this four year cycle and we're just, here we are 18 months after the halving, we made a new all time high. We're in, we're in the bear market and it starts going back up again. So I guess what do you think about bitcoin's price in light of the rest of the assets and specifically in light of AI potentially taking some of that luster, I guess.
- [67:35]
James Thorne
Well, there's no doubt that Albus has left the building. Right. In terms of the bitcoin tourists, right, that haven't done enough research. Right. That just want to own it because of the MO junkie, the MO rush that you get by trading it. Right. And I would say that they will be back, unfortunately. And they'll be back because what they're doing right now is they're like Icarus flying too close to the sun, chasing after Some of these semi names that are just clearly overextended. Right. So let me just be clear. Like I was way early on AI and I'm not saying it's over, but it. You're getting silly. See, I feel like I was on a call. This feels like spax. This is like when the spacs day, everybody's are running around. So look, the money's coming back, will come back. With regard to the perception because they don't do research. I think what happens is, is that, you know, Saylor had to sell a de minimis amount of bitcoin to prove to the rating agencies that bitcoin is capital and everybody loses it. And you look at, there are short term traders that will whip this stuff around and don't care about long term fundamentals. Okay. So there's no doubt in my mind that there's a high degree of volatility and it is still infinite. Fair enough. But at the same point in time I get, you know, what I would say to you is where I push back a little bit on what you say is, you know, oh, they're selling bitcoin to buy SpaceX. Well, I don't think the average investor owns bitcoin like I think the hardcores do. Right, right. And I can, it's amazing to see the infighting. It feels like I'm on like this losing football or hockey team where all the bitcoin maxis are fighting against.
- [69:18]
Mark Moss
Welcome to the bear market.
- [69:20]
James Thorne
Right. But at the same point in time I don't see it being, you know, look at, and look at where the market cap is relative to Nvidia. So I, you know, you know it's, it's, it's, it's buy low, sell high. It's. You always fade parabolic moves in stocks. It's bottoming, you know, sailors got to do his things to get his, his credit. You know, is STRC out of the way and you're in this weird period of time where people actually think that the Clarity act has anything to do with bitcoin. And it doesn't. Right. So you've got a huge. And that's the whole thing I keep talking about. Does anybody do research anymore?
- [70:07]
Mark Moss
No. They read headlines.
- [70:08]
James Thorne
No, we all just look off charts. And so what will happen? Let's talk when bitcoin goes through the 200 day exponential moving average and it goes up, you know, we, it went up, it failed, it's going back down, it will run again. And at the same point in time, I cannot believe that something that is going to be the foundation. The foundation of the global financial markets has a market cap substantially less than Nvidia.
- [70:39]
Mark Moss
I will tell you, I started buying Bitcoin in 2015. So I've been through a few of these cycles and I've never been shaken out of any of my position. But every time at the bottom, it's still hard to go in aggressively. And you think, oh, I'll back the truck, truck up if I get an extra chance. And then all of a sudden, because it's always a new narrative. And anyway, you know, now, as you said, the infighting is there, all the stories are there. Peter Schiff is of course telling everyone it's going to drop down to 10,000 or whatever. And it's difficult. It's like, man, I already own some. Do I need to buy more? And to your point, if you're looking ahead, it's like, man, you could buy, you know, the bedrock of the new financial system for less than Nvidia today.
- [71:22]
James Thorne
But think of this, Mark. You know what's going to happen? We're going to go to. I'll pick a random number, but I don't know, we're going to have another massive bull run, okay? And then we're going to have another correction and we're going to have a chat. You think about what we're having a question chat about the end of bitcoin when it says 65,000. Think about that coming back where it's come from. It's going to go up and we're going to have this chat is the end of bitcoin when it's basically corrected 50% and it's at 175. Right?
- [71:56]
Mark Moss
Well, in a 50 correction is great because I'm used to 85% corrections and 75% correction. So 50 is actually much better than what I've lived through in the past. Right? So,
- [72:06]
James Thorne
yeah, but if you can't, if you haven't, if you don't look at it as an opportunity, which it is, then there's an old saying, right? You don't want to be the dumb money at the poker game. And all I'm trying to say is the people that are buying the parabolic charts in AI, you know, and that doesn't mean Nvidia because Nvidia has been consolidating for over a year. Let me be clear, Let me be clear. Just the same thing. There are some beautiful software stocks that are really cheap, but everybody thinks that AI is going to take make sure that every software company is a Terminal short because of the gamification of this industry. You get these extreme outside moves and if you are a trader or a tactical asset allocator, you must take advantage of selling the parabolic moves and selling these wipeouts. Whether it, you know, was the sell was the software names or it's going to be Bitcoin.
- [73:05]
Mark Moss
Yeah. So I'm a partner at a, at a bitcoin venture fund, the Bitcoin Opportunity Fund and we were just on a call right before I jumped on here with you and we were Talking about the SpaceX IPO a hundred years forward looking revenue, not profit. What does that signal to you? Well, have we seen that before?
- [73:26]
James Thorne
Let me, let me go back, let's go back to the off ramp that we're talking about before with 2031, right. Orbital compute is real, okay. They have a monopoly because of the reusable rockets. The, the use case or the beta case is Starlink. Just replace the satellites with a bunch of, you know, whether Dell racks or whatever, connect them through lasers and you've got Orbital Compute. You don't have power, you know, you have free power and it's cooling up there. How quickly can that happen? I think the, the problem you've got here when you look at AI is you've got some stocks down here and I'll use like Micron, which is you know, very cheap but has I think a sustainable business model to the, you know, it's still cheap and you should consider it on a pullback. And then over here we've got power which is like G. Verona's, the Eaton, the nuclear names. You know, even Cat has a turbine company. They're all trading at extreme valuations. That's got to rectify us itself, right? And so the risk I would say is what happens when everybody sits there and goes Orbital Compute and then terrestrial data centers. All of a sudden there's an over capacity. Can you imagine what that's going to be like for the market? So I, I, I, the thing that Elon's done is it, is it to me the moat is the reusable rockets. He is also building out Terrafab as well. So I don't know, you know, you don't bet against this guy.
- [75:20]
Mark Moss
I don't want to bet against 100 years.
- [75:22]
James Thorne
100 years, but what is space, right?
- [75:24]
Mark Moss
I don't. 100 years of revenue, not even profit. Yeah. Anyway, all right, I just thought maybe is that peak parabola? Anyway, I think we can wrap it up with that. What a great conversation. James thorne on X Dr. J, strategy chief market strategist at Wellington Altus. Anything you want to call out, point people to where should they go to keep up with you?
- [75:48]
James Thorne
Hi. If you want my conscious stream of thought, it's on. It's on X. And you know, we just, this is, this is who I am. This is how I look at the world. And we rock. Right? So I love technology. I love bitcoin. Try not to get traded out of the market and quell your emotions. And the other thing is, I would say to use. I want to rip off Raoul, pal. Right. Don't screw this up. You've got a really good period of time to make a ton of money.
- [76:14]
Mark Moss
Yeah. And good advice, don't mess it up. All right, we're going to wrap it up with that. Thanks so much.
- [76:20]
James Thorne
Take care.
- [76:25]
Mark Moss
This July 4th, come celebrate at America's Block Party hosted by America 250. America's Block Party is a can't miss 4th of July concert happening at the Los Angeles Memorial Coliseum.
- [76:35]
Advertisement Voice
Experience music, performances by major artists, patriotic tributes, and the kickoff to giving forth, helping to make July 4th the largest day of giving in American history.
- [76:45]
Mark Moss
It's more than just fireworks.
- [76:46]
Advertisement Voice
Join this landmark celebration and get your America's Block Party Tickets now for $17.76 at america250.org LA this is Bethenny Frankel
- [76:57]
Bethenny Frankel
from Just Be with Bethenny Frankel. Let me be blunt. Most dog food is junk. It just is. And I'm not feeding junk to Biggie and small. That is why they eat just food for dogs. It's real, 100% human grade food with ingredients I actually recognize, not mystery pellets pretending to be healthy. And once I switched, the difference was obvious. Better digestion, better skin, more energy. Dogs who actually feel good instead of just surviving dinner. Here's the thing. You care about quality. You make an intentional choice to be healthy. So why are you gambling with your dog's health? So let's think about our furry babies. Go to justfood4dogs.com right now and get 50% off your first box. No code. Just try it. Because once you see the difference, you're not going back.
- [77:42]
James Thorne
Ryan Reynolds here from Mint Mobile with a message for everyone paying Big Wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying.
- [77:55]
Pharmaceutical Ad Voice
No judgments.
- [77:56]
Ryan Reynolds
But that's weird.
- [77:57]
James Thorne
Okay, one judgment. Anyway, give it a try@mintmobile.com Switch upfront
- [78:04]
Advertisement Voice
payment of $45 for 3 month plan
- [78:06]
James Thorne
equivalent to $15 per month required intro
- [78:07]
Mark Moss
rate first 3 months only then full price plan options available, taxes and fees extra.
- [78:10]
Ryan Reynolds
See full terms@mintmobile.com when Kohler, global design leader in luxurious kitchen and bath products, asked me to be their ambassador for timeless, elegant, durable cast iron, I said, I'm in. Soon after, I was in their Kohler Wisconsin foundry watching molten iron, poured enamel applied by hand and the beautiful finished pieces ready to ship. Since 1883, Kohler cast iron has been crafted by incredible artisans and seeing it firsthand gave me a whole new appreciation for their craftsmanship. Now I am proud to lend my staff of approval to my favorite Kohler cast iron products for their durability, beauty and enduring style. Shop my curated picks@kohler.com as the Kohler Cast Iron Ambassador, I say Long live Cast Iron.
- [79:04]
Advertisement Voice
Maintenance Fee Overdraft Fee Minimum Balance Fee Maximum Balance fee Banking fees are just a part of modern life. Or are they? They're not at Ally Bank. At Ally bank, there are no tricks, no hidden fine print or jumping through hoops for better rates. They just want to help you save automatically while you spend with spending accounts and savings tools with great rates. No tricks, no hidden fees. Banking built for like today. Learn more@ally.com, ally bank member FDIC.