← The Wolf Of All Streets
The Wolf Of All Streets
BITCOIN COLLAPSES! $11 TRILLION ERASED | GLOBAL FINANCIAL CRISIS COMING? | BLACK MACRO MONDAY
01:09:38
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- [00:01]
Scott Melker
Bitcoin held strong through the fire last week, two of the worst consecutive days in market history before seeing a significant drop on Sunday, leading many to believe it's the canary in the coal mine for a massive Black Monday. 2.0 futures opened extremely down but have bounced since. What is going to happen today? Does Trump actually have a plan? And what does this mean for bitcoin and markets moving forward? There couldn't be a better setup for a macro Monday than we have today. With markets opening mid show, we've got Mike McGlone, Dave Weisberger and James Lavish here to unpack it all. This is a macro Monday not to be missed. Let's go.
- [00:44]
Dave Weisberger
Let's do. Let's do.
- [00:59]
Scott Melker
What is up, everybody? I'm Scott Melker, also known as the Wolf of Allstreets. Before we get started, please subscribe to the channel and hit that like button. Without further ado, Dave, Mike and James. Mike, here's your flowers.
- [01:16]
Mike McGlone
What? From my grave?
- [01:19]
Scott Melker
All of our graves. Listen, it's not like you ever necessarily wanted to be right, but we have a long way to go to prove if Bitcoin is going to 10,000 or Ethereum to 1,000. A lot of the predictions you've had, but directionally we're clearly seeing exactly what you've predicted for a long time, even if this is just the normal mean reversion correction that you've talked about. Now we're taking the elevator instead of the escalator to get that there. But we're likely in bear market territory for s&P, NASDAQ, Dow and such. Go ahead.
- [01:54]
Mike McGlone
So I, if, if I think that's a good place to start, I just want to show one screen and point out why. I think I want to go with the iteration. If, you know, if you keep saying the same things sometimes, eventually you're right. And this is a chart I pulled up from a year ago and actually I think I started publishing on two years. It's just a simple stock market cap to GDP which push back on it again. And also I overlay the S&P 500 divided by gold. I think they're both going to one. It's a question of when will I live. This seed will happen this year, will happen in 10 years. They're just starting to roll over. The key thing is we've had a situation. U.S. equities in this country, the most overvalued since 1929 in the U.S. or 1989 in Japan. You don't have to put that screen anymore. If you want and what I think is happening now. First, let's talk about the good news on a trader standpoint. This is an awesome trading environment for the tactically orientated, yet most people are and they shouldn't be unless that's their primary profession. Otherwise it's too encompassing and taxing. Now Dave and you and James can do that well, but most of our listeners I don't think are full time traders and if they are, they have bots doing it for them. But the key thing that's happened good news overnight is we did get the Vix to 60. We do have a gap lower in S&P 500. I remember when that happened in August and James and you and Dave were all buying Bitcoin around 50. Now it's 77. The point is, the difference with how you started is when I made the call for 100,000 Bitcoin in 2020, when it was around 10 after me, you'd seen what Michael Saylor was doing and what the Fed was doing. And we were doing the biggest liquidity pump in history. Making a call like 100 grand was a bit profound. It never been there. Now I'm just making a call for normal reversion. And that's what I pointed you on a chart that's normal reversion. And do we have a catalyst for it? Yes. So the key thing I want to point out is something. I got my MBA in 93 at DePaul University and it was so cool because it's five minute walk from the border trade. So I went to school at night and I worked in the trading pits during the day. It was an awesome intellectually stimulating environment. A little bit taxing mental physically. But thing I learned in grad school is how great free trade was. I mean this is all academic and that's what you still hear people repeat. It's just bs. It hasn't worked for the US the thing I learned in trading pits was yeah, everybody wants free trade. As long as they can run net exports to the US we're shutting that off. So let's not complain about it. Let's point out the facts. We shut it off fast. And what does it mean? Complete global reset, which is happening this morning. Gina pointed out how that's going to really crunch profits for the US multinationals. And I encourage everybody to listen to the Scott Besant interview this weekend with what was his name? Tucker Carlson. And the key thing that he pointed out is things that have been resonating with me forever. First of all, we have leaders in this country that some of the best drivers, traders and market people on the planet compared to as Zena is the chief economist chief editor at Economist Zinni Benton Meadows pointed out that Mr. Z was an economic competent these people get markets and they get what's going on. And Mr. Bessant pointed out the top 10% of his country owns 80% of stocks. They did not vote for Trump but the last 50% who want gas price is lower which I'll make a prediction. I think the average gas price is going to drop to 2 bucks by the midterms. They want interest rates lower so they can buy a house and get a mortgage, even sell hosts in the mortgage. I suspect the average mortgage rate will drop to 4% and lower inflation which I think will be negative by the time we get to the next election on a CPI basis midterms which is just a normal reversion. So the key things we've done so far is we added $12 trillion of market cap to stock market last year and we just wiped that out. Not a big deal. But now you're going to see that effect to consumer spending. And part of the reason we pumped up so much was in the massive fiscal that's been shut off and the Fed started easing which we all pointed out the risks of doing that. So I'll point out right now from our morning meeting both Ana and Gina and Ira our chief strategist said the Fed can't ease right now and they won't and they may be not even at the in the May meeting. They'll wait for some kind of event which means the first iteration market keeps going down, tide goes out, it might force them to ease. And so to me that's what I think people are missing is we've reached that inflection point in history of too much liquidity. Inflation in the Kenny's market's up too high. We've reached the inflection point of too much fiscal stimulus that's being cut off and now the rest of the world's facing this recession because I like to point out is the whole world became completely dependent, increasingly dependent on exporting to the US it's being shut off now like it or not. That's the facts of what's happening. And unfortunately like you pointed out it might be happening too fast. But this is where we are in the meantime we're going to have a great trading environment but I'll stick with that call. Bitcoin is one of the most most highly speculative leveraged assets. It went Up a lot and it's just mean reverting. Where's it stop? Will it tell me when the stock market stops? And we're learning that it's much more leveraged beta or much more leverage stock market than digital gold.
- [06:49]
Scott Melker
Dave, I'm not going to let you lose your mind on that one yet because we're going to get to Bitcoin in a minute. I still want to stay on the macro for a second just to give some perspective about the last two days of trading. Top five worst consecutive days of all time. If we get a significant down day today, 3, 4, 5%, it would officially be the worst three day slide, I think, in the history of markets. Pretty astounding when you take a look at that, just to see how global markets are reacting today because they've obviously been open. You can see outside of Saudi Arabia, it's a slaughterhouse across the world, circuit breakers firing everywhere. Singapore, worst day in, you know, 30, 40 years. That's happening across the board. Not trying to be hyperbolic, but I just want people to put the context of how bad these past few days have been, leading to wonder what will happen in the next few days. Now, I think Bessant is very smart. Mike, I thought that interview was great. Yeah. But I will. And I agree with you. I think actually the average Trump voter is probably cheering for this at the moment. You've seen it everywhere. But I disagree with you that the rich people didn't vote for him. And I think there's a lot of pain and anger there.
- [07:57]
Mike McGlone
Well, it's in the masses. That'll make a difference in the polls. I mean, I love going to the Greenwich Economic Forum in October right before the election in Virginia, everybody said, why vote? It doesn't matter up there. It's mostly a Democratic leaning state. And they, you know, they were voting for Kamala, but that's just. I'm from the heartland, I'm from the Rust Belt, and they don't, you know, I remember when I first said I was moving to New York, people would say, why are you going to New York? Most people there present New York and they vote against New York. And New York to me means the high stock market and all those rich people.
- [08:28]
Scott Melker
Yeah. Who wants to go next?
- [08:31]
Dave Weisberger
So I'd like to take a bit. I'm going to ignore the foolishness because I agree with.
- [08:37]
Scott Melker
We're not gonna argue beta.
- [08:39]
Mike McGlone
Well, let me just fire up Dave a little bit. Let me fire up Dave. Okay. Because Gina mentioned it this morning. Gina Martin Adams. Yeah.
- [08:48]
Dave Weisberger
Okay. What'd she say?
- [08:50]
Mike McGlone
She mentioned the US stock market is the highest beta stock market and she mentioned Saudi Arabia is one of the lowest and expects that to continue in the market going d globalization. US stock market continues suffering. And then she just mentioned it's the highest beta and it's 65% of market cap and that's probably going to drop.
- [09:07]
Dave Weisberger
Well, it's certainly when you're talking about stock beta, of course the S and P is the beta engine in the world. I mean, look, let's give some perspective before we actually talk about anything else. Let's talk about Black Monday because I ran program trading technology was on the trading desk on that Monday. I have very clear recollections of what happened. Had to testify in front of the Brady Commission in terms of the causes of the crash and what went on. But what a lot of people don't know, a few fun facts. Hong Kong was closed for a week after Black Monday. Right. You know, the US sneezed and the rest of the world caught pneumonia. You know, as bad as it felt in the US it was so much worse everywhere else. So what Gina Martin Adams is. She was probably, I don't know, grade school, you know, not born yet, I don't know. But you know, I talked to most people in this industry aren't around as long as I have been. It is 100% true that if the US did continue down and hit limit down on the futures after the last two days, which it didn't, and we'll talk about why I think that is in a second. But had it done so, the rest of the world would have been catastrophic. And that is true from a stock market perspective. So that's thing number one. Thing number two is part of the reason that it was so catastrophic doesn't exist today. So why did I say Cramer was wrong over the weekend? Because Cramer predicting a crash? Because in 1987, between 5 and 8% of the entire market cap of the S and P was portfolio insured. What did that mean? That meant that somewhere between 5 and 10% down triggered between 5 and 8% additional of the entire market cap, additional forced selling. So what happened was the market opened down and people had to sell futures and there just wasn't enough liquidity to buy it. And it kept going down and then it paused in the afternoon and then margin calls came in at three and there was literally no one left to buy. And you know, I sat and I watched all sorts of funny stories. People literally wouldn't answer the phone because remember when you wanted to sell something in nasdaq, you had to actually pick up a phone to consummate the trade. So, you know, it was. There's a lot of shit going on. None of that exists. People point to circuit breakers is the reason. Look, I helped design the circuit breakers, right? And limit up, limit down. I sat on that committee. I understand that wasn't necessarily. That's not really the issue if it was a fundamental lead drop. But it is something to stop forced selling liquidations, by the way, in crypto we don't have that. And so bitcoin's drop was because the highest. I don't know the data because I only saw pieces of it, but I saw almost half a billion dollars of bitcoin liquidations over the last 24 hours. Now that matters because even when we see a billion dollars of liquidations, bitcoin is usually 3 or 400 million. So you know, its percentage of total liquidations is way higher. Somebody or some people got caught and we saw a wave of forced liquidation selling in bitcoin, which is interesting. And the market's gonna have to digest that. But understand the market mechanics here. The other thing that changed since 87, which people don't like.
- [12:11]
James Lavish
But to add to that, Dave, the market mechanics of that, people are wondering, what, why, why would it sell off on a Sunday? Well, because you've got hedge fund managers, massive hedge fund managers who are expecting to have very large margin calls on Monday. And what can they sell on Sunday? What is the only asset that they can sell on Sunday?
- [12:34]
Dave Weisberger
Right, exactly. Well, that was what I thought and I still think that's true. And I think that people were surprised. Everybody. I think a large number of people figured the administration would blink over the weekend as opposed to double. Right. And, and so those. And so that's the proximal cost. But let's go through that, let's get to it later. I just want to talk a little bit teeny bit more about mechanics so that everyone understands where I'm coming from. The other change that was made from 87 was that they established the President's some funny group like the President's working group on capital markets, AKA on Wall street. They called it the plunge protection team. And they have the ability to buy futures, they have the ability to buy stock. They can do whatever the hell they want to reduce assure markets. Now, I'm not saying they did it, no one talks about it, but it certainly feels like the Plunge Protection team swung into action last night when it was looking like it was going to go towards a limit down and it didn't.
- [13:30]
Scott Melker
And down about 2% now across 2 to 3% when it opened.
- [13:37]
Dave Weisberger
Yeah, right now that's a significant bounce, personally. Is it a dead cat bounce? You know, to quote Mike, because I tend to agree with Mike, I think it probably is a dead cat bounce. The real question is if you're Scott Besant and you're Donald Trump and you're sitting here, you want, if you're going to see the stock market revalue lower, you want it to be an orderly re lowering. Right. You know, and you. As long as it's orderly, they don't care that much until people start screaming. The other last point I want to make on this opening salvo is what do they truly care about? They care about where people are thinking in about 17 months. They don't give a crap what people think about today. They don't freaking care. And if you think there are, there are people saying, oh, it's going to kill them in the election, I'm sorry, you have millions of people protesting based off of paid scripts this weekend, none of which made any sense. In fact, most of it was, was based on a lie. And now there'll be more people will be protesting, you know, whatever. I mean, protests don't matter because I think all the Republican voters like me are look at this and say, you know what? In 2020, we said, you know, we were tired of mean tweets, we were tired of protests. But then we saw Afghanistan and then we saw the border get opened up and then we saw a lot of other things that we. So we saw my own industry destroyed. We saw free speech being censored. We saw all this stuff and it's like, you know What? No more Mr. Nice Guy. And I think the average Trump voter doesn't give a crap about any of this stuff. And so you're not moving. Anybody in the center can kind of starting to see what's going on. So what you're getting is, look, they need to do a reset. I mean, they want to reset. There's no question about it. My concern with this reset is I think it could have been done better, done in a way not to screw up capital markets. I tend to think Bill Ackman, he wrote a long screen this weekend. Cliff Asness wrote a long screen this weekend. I tend to agree with both of them. But I want to point one last point out that happened this weekend, which is really, really interesting. And I think they're paying attention inside the White House, which is, look at the bitcoin hash rate. Can you bring up that, Scott?
- [15:41]
Scott Melker
Yeah, give me a second and I'll find it.
- [15:43]
Mike McGlone
I knew you'd go there today.
- [15:45]
Dave Weisberger
Well, no, it's important because it looks like a hash war is starting. Bitcoin as a strategic asset is under a hash war, and that's going to squeeze for profit miners. That tells me that there's state subsidization going on of bitcoin, which is going to make it a strategic asset. Which if you're sitting in, if you're BO or if you're David Sacks, you're saying there's something that needs to happen here. Don't be surprised. You really, really shouldn't be surprised. Remember, follow the money guys and understand what's going on. I would not be remotely surprised to see almost anything happen based off of what's going on. This feels like state actors who are moving into bitcoin mining are just pushing the accelerator at a time that they think they can cripple for profit American miners. That's what it feels like now. I don't know. James, I'm curious. What do you think?
- [16:31]
James Lavish
It doesn't make any sense otherwise, really, financially, it just doesn't make financial sense for these miners to be throttling forward like this. They would be pivoting to the high speed computing. But look, going all the way back to the top, thinking about what percent needs, what Trump wants, right? And what percent needs is he needs to push out on the curve. But he doesn't control the curve and neither does the Fed. The curve is controlled by bond traders and it's controlled by their appetite for duration and interest rate risk. Right, Mike? And that's just reality. And so. But what can they do? So if you. Look, I'm not the guy who's over here saying that Trump is playing 4D chess, whatever. Like, look, there's simple levers, though, that you can allow to be pulled. And there's a legend that goes around. I'm sitting in Dallas and I remember this story that goes around in Fort Worth, that it was Sid Bass and he was talking to Richard Rainwater. For those who don't know who these people are, Bass. The Bass family is the richest family in Fort Worth and many billions of dollars. And Richard Rainwater is the most successful hedge fund manager in Fort Worth. But there's a story that goes around that the Bass family was buying up all these buildings in, in downtown Fort Worth back many decades ago and letting them just kind of fall into ruin and just not putting any money into them, and they're just getting worse and worse. And Rainwater said, what are you doing? You're ruining your investment. You're ruining your investment values. And Sid said, you know what your problem is, Richard? Your problem is you don't know how to be really rich. And so the point was, he said, I'm going to let everything fall and let it become, you know, lower the property rates, the property values. Now I'm going to go in there and buy the whole thing. And they did. And so now the whole downtown Fort Worth is called Sundance Square, and they own it. And so that's kind of a little bit of the thinking here is let this stuff fall to ruin. And what do we get out of it? Well, I'm not worried about the stock market now. I'm worried about the inflation. I'm worried about the interest rates and resetting the debt, because we have $9 trillion of debt that's coming due this year.
- [19:21]
Scott Melker
We're back over 4%, by the way. So if the goal is way diminished debts, after what we've seen for the past four days, rates should be at 3.5. So that's not even working.
- [19:32]
James Lavish
Well, it's not. Not yet. But there, there can be economic pain. I agree with both Dave and Mike that there can be economic pain between now and midterms. And what they want, what Trump really wants, he wants the big prize. He wants the grand prize, which is I fix the trade imbalances, I balance the budget, I lowered the debt, I got us into. I got us into surplus. Well, how does he do that? He does it by raising revenues. And whether that has to do with just nominal revenues raising because of the tariffs or it has to do with a crash in the economy and knowing that the Fed's going to lower the rates, they're going to come in and print money. We're going to balance the budget, and by the time I'm leaving office, we're going to have a surplus. We're going to be, we're, we're going to be moved out on the, on the curve on our Treasuries, and we're going to have a lower rate on our interest rate on our, an expense on our bottom line there. And I'm going to be seen as the President that fixed the problem. And that's the golden, that's the big prize. Can you get there? Well, I don't think. I personally.
- [20:50]
Dave Weisberger
Don't be thinking. I just, I have one question, James, and this is the simple one. If you push us into A recession, tax revenues go down, and they do.
- [21:03]
Scott Melker
My next question is how does that align with massive tax cuts?
- [21:07]
James Lavish
Well, it only aligns if, if, if the, if the tariffs make up so much of that tax loss. It's the only way it works. But I don't see that math work. I'm not saying this is, this playbook is going to work. I'm just saying that I think they're willing to. I think they're willing to go there. That's the point. I will go there.
- [21:29]
Dave Weisberger
I kind of want to make the point because from Bitcoin perspective, you know, everyone worries about sound money. From gold's perspective, people worry about sound money. And I don't see any way around this other than monetary printing. I think the question is where does that monetary printing go and what does it do for. So look, the only strategy, and I've said this on the show many times, so let's be really, this is simple, is deregulation is the most important thing that Doge can do. You're going to find, okay, let's be expansive. I mean, at the outside, absolute tippy tippy top of what they could be able to cut of spending without people whining and complaining and screaming in the streets and you know, and hanging effigies of Elon Musk is fraud and waste and some abuse and yeah, there's probably billions of fraud.
- [22:18]
James Lavish
There's not enough. There's not enough to balance the budget.
- [22:21]
Dave Weisberger
Exactly. It's not even.
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James Lavish
Not.
- [22:23]
Dave Weisberger
So the absolute outside of what they could cut by Musk's own words, is probably half a trillion dollars. That's the outside. And they're probably not going to get more than $100 billion.
- [22:33]
James Lavish
Remember, remember. Do remember. Do you remember, Dave, we have, we have a trillion, $1.2 trillion of interest expense annually now. 1.2 trillion in interest expense that could be brought down severely if we get back towards zirp. I don't think we should go to Zerp. I think it'll only exacerbate the issue and, and then we'll, we'll have a catastrophic event later. But that's, that's the thought, right?
- [22:58]
Dave Weisberger
I think the two things that they're going to try to force are as close to zurf as possible. Get half a billion, half a trillion dollars of waste, whatever. Give back most of that in the form of no tax on tips and paying people in the middle class. And so you're going to end up with more monetary printing. The question is, where does it go? The monetary printing that Happened in the last wave. A huge chunk of it went towards globalization. Companies spent a lot of money and this is why people are pissed. People, a lot of Trump supporters spent a lot of money moving from China to Vietnam, for example. It's not cheap to build a factory. I don't care where you're building a factory. Maybe it's cheaper in Vietnam than it is in Texas, but it's still not cheap. And so a lot of money got spent on a lot of stuff. Right. You know, he has this deal with Taiwan semi to build here. You think they haven't spent a ton of money in Taiwan? You think they're not saying, well, wait a minute, you're going to kill us before you're going to. We're going to do this. This is a problem. So there's all sorts of little bits here.
- [23:59]
James Lavish
Well, there's another thing, but just, just extending on that, Dave, Even if it does work, that takes years and years and years to build the, to source the land to, to, to design the, build the property. Like regulation still in place, also happening by midterms. It's not happening by midterm.
- [24:18]
Dave Weisberger
Person in America is probably Lee Zeldin because right now it takes 18 months just to get an environmental impact statement. That doesn't mean you're going to get the permit. It means it's a state statement. When you want to build a factory, you want to build something. They have to get all of this crap down. And it is, it is non trivial to say the least. Now, I'm not saying that I want them to butcher the environment. I mean, frankly, it's. Most of that time is bureaucratic waste. It's sort of like anyone who's done any building locally knows how the permitting process works and knows what it is. It doesn't mean we don't want standards. Right. You know, I live in Florida. You know, we saw what happens when you allow people to build buildings without standards. Right. You know, fall. It's not good. So, but that doesn't mean you have to have six bureaucrats with different paper stamps going around it. But look, you don't build that stuff that quickly. The point is, is that the part of the narrative, of everything you said, of what he wants to accomplish, a lot of it is feasible. What is not feasible is balancing the budget unless we do something like basically sunsetting old rules. Right. You know, and understanding what those costs are and cutting out the ability and doing the things that Doge should really do. I mean, there's this great speech from Obama in 2012, basically saying literally exactly the same shit that Elon has said. And, you know, unless you get both parties behind it and you're not, because of this environment, it's going to be really, really hard. And so hopefully they can cut regulation and create an economic boom. But that created economic boom is really hard when even, you know, look, you look at Tesla 70, it's. It's made in America. American car. 70 to 80% of the car is made in America.
- [26:04]
Scott Melker
20 assembled in America.
- [26:07]
Dave Weisberger
20 to 30% of the parts are made by factories outside of America because American factories don't exist to build them. And so you end up destroying supply chains and they're going to.
- [26:16]
Scott Melker
Elon Musk. Yeah, and Elon came out very clearly alongside a lot of rich people who are getting hurt, that he wants a global free trade alliance, that these tariffs should go to zero. It's a negotiating tactic. Meanwhile, you have Navarro, who constructed this, wanting to blow everything up, keep them forever. You have Besant saying this is about negotiation and fair deals. Trump saying he'll never change. And you have Lutnik saying, let's bring it all back home. External Revenue Service. So the issue here is messaging.
- [26:42]
Mike McGlone
So the issue is, let's point out, must be careful about complaining versus the facts. We have the highest tariffs in this country right now in 100 years. We have the most expensive stock market in 100 years. And last recent example is 1989 in Japan. Like some of us who traded Japanese.
- [26:59]
James Lavish
Government on one measure, market cap, the.
- [27:02]
Mike McGlone
GDP and even some of the things that Gina pointed out, just pure PE versus the rest of the world. She pointed out a month ago, we are on a scale 20 over the top. So.
- [27:12]
James Lavish
Right. And I'm gonna, I'm gonna, I'm gonna share this so you can see this. And I want you to talk to this too, Mike, because this is important too. You see that?
- [27:19]
Scott Melker
Yeah.
- [27:20]
Mike McGlone
Not yet.
- [27:21]
Dave Weisberger
Yep.
- [27:21]
Scott Melker
Bring it up now. Right.
- [27:23]
James Lavish
This is so. I mean, this is where the, the forward PE ratio has come down quite a bit. It's, It's. Is it back to normal levels? It's getting pretty close, you know, but it's, it was, it was at historic highs. It's true.
- [27:38]
Mike McGlone
However, so these things don't bottom on a dime without significant fiscal and monetary stimulus. That trigger is shifted off, turned off. That's why I'm trying to point out we are looking at just two years ago, the highest inflation. Some of our lifetimes, those of us who live in the 70s saw it, but we are younger. It's what's changed and now we have a paradigm shift with the rest of the world's post World War II paradigm shift. The rest of the world depending on us for defense most of it and to export to that's being shut off. I'm pointing out this is a paradigm shift to get those valuations to cheap. So give you an example I learned in commodities. Commodities go down because they go up. One example is copper. Why is copper down more than a buck from its highs? 537 I'm an ex trader, I would have been stopped on the way up and I guarantee I would have put a short back on it around 537 and now we've already dropped a full point. That's what's tilting over to the US stock market and all risk assets. The most expensive housing market versus income ever is being flipped back. This all helps Trump's constituents. My point is this, this trade is early days. It's just getting started. The concept of potentially pulling back on those tariffs is only going to happen if the market forces them by going lower or there's significant negotiation. It's just what's happening now. So we're going to have some great trading environments, we're going to have some great short covering rallies. Just last night was a great bottom indication. The Vix got to 50, we a 60, we had a gap lower. The point is in the macro risk assets are probably going to get cheap like they usually do in commodities. I mean we're nowhere near that because we've reached that point of inflection like we pointed out last year when the Fed started easing and the stock market's in a tear. We predicted this, pointed out the risks of that and it's happening. What stops it? You keep pointing I mean and if and so here's a 1 to 10 scale. What matters to treasury yields, inflation, stock market rally. The mart of the debt is a 1. Just look at rights right now 1.64 in China. By the way they're somewhat if you can figure it out some I think Goldman Sachs says their debt to GDP is over 300%. In Japan it's maybe 200%. My point is let's get through the first iteration in this cycle right now is to get everything cheap which is a normal cycle. After getting too expensive. Run that cycle right now. You give me a good reason for that to stop, fine, I'll give you bounces, I'll give you stops. I think like the next key place in cryptos is ethereum being flipped by tether right now it's 1500, it gets around 1200, gets flipping by tether. But that shows that massive significant technology in this space. We're all learning that. Why do you need to have things like XRP when you got a great crypto dollar like USDC or tethered to transact instantly? Why do you need this peer to peer capital like Bitcoin was supposed to be when you have crypto dollars? That to me is what's happening. And again I just think point out we have to wipe out many zeros off of some of these silly expensive dogecoins and things like that. This is just where we're going right now. Let's trade accordingly. It's. And let's point out it's just a thing I've enjoyed seeing. I saw a lot of the chats when the market went after on Wednesday, Thursday morning, everybody's complaining. I obviously knew they're losing money. Again, I'm sorry, but you know, those of us who've been overweight risk off assets, who are supposed to analyze the market openly, I just point out on a year to date basis right now, gold's up 15%, Bitcoin's down 18%. I just expect simply that to widen. You know, it's one of the next best performers. The U.S. treasury 20 plus long bond, it's 7%. Yeah, it's hurting a little this morning. Just fully expect that to continue. Now let's think about the time we get to the midterms. This will be over. The market would have stabilized. The Fed will probably ease probably a couple hundred basis points. And by the way, they don't go 25 when it gets bad, they go 50 or more.
- [31:10]
Scott Melker
And it's.
- [31:11]
Mike McGlone
But it's got to get really bad for them to go that much. We're not there yet.
- [31:15]
Scott Melker
That's the next topic. Okay, first of all, I just brought up the Ethereum chart when you mentioned it, just so people realize how bad that is. Back to the 2018 bull market highs, just absolutely astounding. But I want to talk about the Fed because we have emergency meeting which I don't know is really an emergency meeting. I think it was actually announced last week, closed door meeting. But Trump, a lot of people believed on Wednesday when he announced the tariffs that this was a high stakes game of chicken with China and likely with the Fed because he continues to say that Powell needs to cut. Powell needs to cut. Powell needs to cut.
- [31:47]
Dave Weisberger
Right.
- [31:47]
James Lavish
And Powell keeps saying he's not going to cut. He's supposed.
- [31:50]
Dave Weisberger
Exactly.
- [31:50]
Scott Melker
China, China, came back with 37% tariffs. And Powell immediately in his statements on Friday said, I'm worried about inflation. My mandate is inflation. We have this interesting scenario where the rate cuts are being priced in more now for the coming months.
- [32:08]
James Lavish
Pull it up.
- [32:09]
Scott Melker
Yeah, but Pal, who's been very honest, actually, you can disagree with Pal's moves, but you can't disagree that he's said exactly what he's going to do the whole time. He's saying he ain't going to cut and he's worried about inflation. And by the way, I would also make the point worth discussion. I don't think Fed rate cuts matter at all right now. I think they only matter with massive QE and fiscal stimulus. But we are fiscally dominated. And rate cuts already, they cut before and bonds went the wrong way, interest rates went up.
- [32:37]
Mike McGlone
So he'll make another prediction. The Fed, the Fed will be forced to cut by the market going down and wiping out all that extraordinary wealth we created last year. Cryptos are the riskiest.
- [32:46]
Scott Melker
It's already there. I mean, 11, you know, 11 trillion gone, like you said.
- [32:49]
Mike McGlone
But that's not exactly. But you got to get cheap now that was too expensive. Lessons of history.
- [32:53]
Scott Melker
Oh, you're saying we're back to the mean now we got to get.
- [32:55]
Mike McGlone
Exactly. Now let's get cheap.
- [32:58]
James Lavish
So, so for people who are wondering what this means, if you look at that, if you look at the dates there on the left, you can see 12, 10, 25. That's one of the Fed meetings. And so this is saying that here are the next Fed meetings and you're expecting, there's a, there's almost a 50% chance of a cut in May. There's, you know, over, there's a 100% chance of a cut in, in June. But it's saying this pricing in 1.44 cuts. So now it's saying that by the time we get to December 10th, there's four point, you know, there's over four cuts basically because of the probabilities of how they weight these things. But the market's telling you they want, they want, you know, four cuts, which is 1% taken off fed funds rate. But like Mike said, like this when they come, when they go and they cut and they have to cut, they'll do it mid meeting and they'll probably do it 50 basis points.
- [33:49]
Mike McGlone
Points.
- [33:50]
James Lavish
And that's, and that's the, that that's not going to happen today. This, this emergency meeting that, that, that they're having is probably just, it's just A cover. You're asking where they got to say well the markets were in turmoil right now. The equity market, we don't control that but we're going to meet and, and see and talk about it, you know.
- [34:10]
Scott Melker
Well I can tell you really quickly just not to interrupt but the S, P did just, I mean the markets did just open. The S and P futures were down to something percent while they're already down about another 2% since the Open. So no bounce, follow through? Yeah, I mean no bounce thus far.
- [34:25]
Dave Weisberger
The only people who knew that was going to happen are the ones who have all the retail orders. And given the way the world works today versus the way the world worked, you know, 20 years ago, 20 years ago they were actually orders called into brokers. So there were people on the floor knew there were people in Wall street knew the futures would have been more accurate. The reason you get these gaps around the open now is because most of these open orders are electronic and people have an individual brokers and traders don't know anything about them. They're, you know, they're done via online. So you get a wave of retail selling. It catches people, I won't say by surprise, but they didn't know about it. I think most traders are smart enough to understand that this can happen. So we do have a different type of market than we used to and that's non trivial and so that's why you see a lot of that. So that's why you see dislocations around the open now that you didn't used to and that from the future is nearly as much and that's why around between 245 and you know, 3:15 at some point when margin calls start happening you see a dislocation at that period of time as well. On days like today, you know I said it on Thursday on crypto town hall, it then happened on Thursday afternoon. I repeatedly reminded people again on Friday, it happened again Friday afternoon and I'm going to say it again this morning, although I'm not going to be on Crypto Town town Hall because I'm at the New York Stock Exchange for our security traders annual conference.
- [35:43]
Scott Melker
But what a place to be today.
- [35:46]
Dave Weisberger
Oh yeah, well I'm wearing, you might have noticed, you know, black wearing my, my full black. So for Black Monday funeral, there you go. I got my Johnny Cash outfit on now.
- [35:55]
Mike McGlone
It's a New York look too.
- [35:58]
Dave Weisberger
So look it's the stock market has, is comprised of, of a lot of stocks but the indices are dominated by a few stocks and that's, that's why it matters. I mean, there were some stats the other day about number of stocks making 52 week lows that were extraordinary. Right. You wouldn't think that with the market having performed as well. So Mike makes the comment that the market is, you know, whether we've gotten the market back down to fair or, you know, whatever the number is, it does matter. The Russell, which is the smaller caps was getting, got absolutely annihilated last week. I mean, it was down what, 12% in two days or something like that. Am I getting that about right? I think that's about right. It was, it was pretty bad. And so, you know, when you see this crap, you need to understand that it's. There is, I mean, 60% of people in the country, 60% of voters do have some stock exposure. They can't ignore it. And so they're going to figure out something and we'll see what they're going to do. You're going to see all sorts of weird stories coming out, dribbling out over the next few days. You know, even I've seen people who you would never expect to say that there's going to need to be a blood sacrifice, whether it's Navarro or Lutnick or somebody else. I mean, I'm not making this, this isn't coming from me. I mean, there are people who are generally well informed.
- [37:18]
Scott Melker
Well, Trump said take your medicine. Trump literally said markets, sometimes markets need to take their medicine. Not, not to quote it exactly, but clearly unfazed by the market moves, at least publicly.
- [37:30]
Dave Weisberger
But one thing that's absolutely true in all of this conversation of macro is that in a reset there will be different winners and different losers. And so treating everything based upon statistical relationships that existed before a reset is exceedingly problematic. In other words, when there's a regime change, things change. So what will be the market leaders in this world? The market leaders in this world will probably not be multinationals that depend on incredibly complicated supply chains because they're going to take a long time for their profits to come back because they're getting slaughtered. Right. Hey, Dave, you know who, I understand that.
- [38:09]
Scott Melker
Yeah. You know who's been a market leader in this market? Mike. You love this chart. Love it. Because you've been saying that Michael Saylor tempted the market gods.
- [38:16]
Mike McGlone
Yeah.
- [38:17]
Scott Melker
Who's the best performing billionaire out there? Warren Buffett's up 12.7.
- [38:21]
Mike McGlone
There you go.
- [38:22]
Scott Melker
Humongous stack of cash earned 4 to 5% in United States T bills. Listen, man, you know the, the it kind of reminds me of you. But people who have been here for a while can be quote unquote early and tell you what's coming, but still have the conviction to be patient.
- [38:42]
Mike McGlone
Well, I look at it as early, wrong, stopped out, ex trader. I get it. Sorry if some people didn't, you know, do the opposite. I say, but the key thing is that's gonna go in my book. I mean there's some things I remember from the past are just striking. I remember being on my trading desk, it was 1999 and I was talking about zero coupon bonds with a client and a salesperson walked by and said, are you an idiot? I mean unsolicited. I was on the phone with a customer. Are you an idiot? Didn't you see what Internet stocks are doing? I'm like, I'll never forget that. It's going to my book. I called father's money manager, Northern Think it was, yeah, Northern Trust a year ago. And I'll never. I'll title my one of my chapters. Why, when I said the guy's 88 years old, why do you have him 50% in stocks? And his quote was why am I stop out. Get, get me out. And I remember I put them all into T bonds, T bills. He's been happy clicking coupons. And that statement from Saylor, he got me really bullish in 2000. It was the opposite. It's never under a separate markets from human nature. And the human nature we're seeing here now with even my colleague wrote about it. With your average retiree in, in Florida really getting hurt by the stock market. They should not care too much about the stock market unless they're doing the classic human nature thing as well. My wife's best friend's husband's killing the stock market. I want to kill. It's just, this is happening, it's happening in Japan in the late 80s, it happened the US in 1929 and 1999. It's happening now. Act accordingly and get out of things like dogecoin.
- [40:09]
Scott Melker
I mean, Mike, that begs the question. If you're sitting in speculative, if you're sitting in tech stocks right now and you've already seen, you know, 20, 30% drawdown or 10, 15% in the last few days, is it too late now to sell or is this S P.
- [40:22]
Mike McGlone
500 total return on a two year basis is 22%. Here's my violin. I'm sorry, but you look to just liquidate and that's what's going to happen. People will not play that narrative I've always heard long time. So I quoted this morning, what does hold mean? It means the thing I learned in 1999, everybody's in for a long haul. As long as is going up, that's being switched. So what's going to happen? And Dave will point it out. He's just pointed out with margin calls people are going to unfortunately sell at the lows. That's just the way it always works. Those people who are playing the game and this is why you're supposed to look to sell rallies. Maybe we'll be lucky enough to get them. But I'm pointing out the fact is we're probably good. Maybe it's going to happen this year. Maybe it's 10 years, maybe within by the time we get the midterms, we're going back to 1 to 1 stock market cap to GDP. Remember Bassent even said it. We're switching away from Wall street back to Main Street. So my suggestion is for people, if you look around, look to buy some land in the Midwest which I used to own, I just don't anymore. I miss that. It's just this is what's happening right now. What's going to take to switch that? Typically it takes a major paradigm, a major reset which means markets going down for them just flip on a dime. No, but it means the Fed's going to ease. Yes. Okay. We're going to have problems with the fiscal but we remember we have some of this, the most significant business sharks on the planet running his government. So yeah, it's going to be hurting in the long term. But give it. That's the key thing I think Lutnick got wrong. He pointed out fourth quarter is going to be the Trump quarter and the first quarter was Biden quarter. He's missing by years. These things take years.
- [41:51]
Scott Melker
I just want to point out this truth social point post from Donald Trump because it outlines exactly what you just said and what you said at the very beginning. This is going to be the narrative. Oil prices down, interest rates are down. Slow moving Fed should cut rates. Of course, take you a shot where you can. Food prices are down. I don't think that's true. There's no except for eggs which are because of bird flu. But there's no inflation and the longtime abused USA is bringing in billions of dollars a week from the abusing countries on tariffs that are already in place. We can dive into that. I mean I'm still like pretty confused as to how tariffs are a good idea in this, in this situation. I mean These are American companies that are paying the tariffs to United States customs short term. And we. And the idea, I actually want to talk about this idea. Are we being abused by foreign countries or is exporting dollars and inflation abusing them? Because the average person in Vietnam, like who's sitting in a factory making Nikes for a dollar an hour, certainly isn't like consuming American goods. We are the consumers. We buy the dumb shit endlessly and we do it with money that we print effectively for free, that we export to them, force them to use as the global reserve currency. I mean it's the tiffin dilemma, whatever you want to call it, but we our export that makes it even in my mind, in the mind of many is our inflating dollars that we forced them to use.
- [43:13]
Mike McGlone
I'm sure Dave and James have comments and let's point out the facts. When you're a net exporter, that's a drag on gdp. I'm sorry, on your net importer it's a drag on gdp. When you're net exporter that pushes up, it helps your gdp, that lessens. The Valkyrie. Zanner Hamilton. We need to export. We did. So I just want to point out the facts. The top three export predators on the country, Germany, China and Japan. I was just doing notes on this morning. They're on average their total GDP exports of GDP is about 24% now. Germany is a leader and a total of $6.6 trillion. The US exports 10%, that's $3 trillion. Their net exports are 2.2 times. This is an economic war. The book I'm reading right now is called Choke Points. Fishman I think is his name. And the world's gone economic. Complete economic war. We have the best team possible to do it. Now yes, they're going to piss people off unfortunately, but that's always happens when you have paradigm shifts. That's the key thing I want to point out is this is just a reordering of the post World War II order. When yes, we won, we provided security and yes, if you want to get you export to us now, dependents abuse that it's being shut off. And that's the basis of the book no Price. The Price of no Trade is Free by Robert Lighthizer, which is happening exactly way he expected. One other thing I'll mention is a book by General McMaster, no Trade is freeze. Trump's going to have nothing but loyalists. So there's an article on Friday about how Besant might be the first to leave. These guys are loyalists. They've been thinking these things for decades. Like, good luck with this one. They're going to ride it out.
- [44:47]
James Lavish
Well, maybe. Maybe they'll ride it out. Or maybe, you know, we have 10 days. Right? Or not. Not anymore there to enact these things. And that's not enough time to negotiate if you have 50 to 100 countries that come to the table. I think Ackman was talking about this this weekend and I think he's right. You can't just not give them a chance to negotiate. You're going to give them a chance. So maybe you hit the pause button, right? And so you say, well, we'll, we'll. Okay, ten days. We're gonna, we're gonna postpone that because we've had 200 countries come, you know, we've had 50 or 100 countries come to the table and they want to negotiate and we're going to give them the chance to do that. You know, and that would be a businessman's approach, which these people are businessmen. And that does. That does make sense to me.
- [45:39]
Scott Melker
Right. And maybe they're just saying these are permanent because that is the negotiating technique. To look crazy enough to do it and to maintain it and to call it the long term. But they're saying it's not a negotiable. Half of them are saying it's not a negotiation.
- [45:53]
Mike McGlone
That's part of the negotiation tactic. I mean, again, I love when people said how negotia. How sharp that like Russian negotiators were. I'm like, have you dealt with New York, New York real estate people like Trump or Musk? Why is he from South Africa and America? Because he's the greatest country in the world. He came here for a reason. And I just, you know, I just look back at this, trying to look back at this from two. Two years from now or in midterms. And I think you can see where it's going. Like you said, we're going to have major deflation cutoff. And he's going to point out a list of all these investments in the U.S. yes, sorry, the stock market's down 50%. But check out the next two years. It's going to go right up. That's probably what he's going to say.
- [46:29]
Scott Melker
Mike, in the context of these tariffs, though, you've been long sort of pointing to deflationary trends. We talk about the price of tomorrow with Jeff Booth. We talk about this being an incoming great depression. Do tariffs change that in your mind at all? Because obviously many point to the fact. Most point to the fact that tariffs are likely to be inflationary.
- [46:46]
Mike McGlone
Yeah. 10% of the economy versus, let's see, stock market cap. The GDP is down what, $12 trillion before that's. How many times X is that, 40% of GDP? Just pointing out the number one deflationary force is the number one lesson. The lessons of inflation. It always comes on the back of deflation. You have to get prices up high and then deflation is when they back down. We have just started going down. Just look at housing. It's just going to get started. You remember 2000? I shouldn't say 8. It's sick. It's probably they peaked in 2006. It's all getting started that way Trump's going to be able to say, hey, you know that house that you couldn't buy last year, couldn't afford because mortgage rates were 7%. Well, guess what, they're 4% now. Now you can afford it.
- [47:26]
Scott Melker
And by the way, flip side of that. Sorry, you're right, I didn't mean to interrupt. You can finish.
- [47:30]
Mike McGlone
No, you're right. I mean, and here's one thing that flipsides.
- [47:33]
Scott Melker
The tariffs send up lumber and then people are going to be short term. Wow, it's so exciting. Expensive to build a house.
- [47:37]
Dave Weisberger
Right.
- [47:40]
Mike McGlone
And I don't want to use it. But it will be. But it's just the key thing. Remember I'm the guy from the Rust Belt. I've seen it happen. And here's the point, here's the key thing about this. This is part of the great natural self correcting mechanism of this country is no other country can do this to this certain scale. Certainly not Mr. Z in China. It's not China, Mr. Z. If it doesn't work in four years from now, we're never going to do again. If it does work, Trump might end up on Mount Rushmore. It'll still change the world. That's why you got to get through the period. This is a major shift and it's a great opportunity for traders. But buy and hold risk assets? Probably not.
- [48:14]
Dave Weisberger
Which means you need to distinguish between what's a risk asset and what isn't and what's the winning technologies and what isn't. And that is what matters. And when you start looking at various things, whether it's depends, right? Inflation. You talk about inflation as if there's no such thing as a printing press. As if we aren't inflating the amount of dollars in circulation. And I hate to go look, Keynesians have had their day in the sun. I think that we know that the reason that we've had 30 plus years of asset inflation that has helped moderate consumer inflation because it's substitute capital for labor. It is not an accident that you saw over the last week people saying well it really isn't about labor because we're going to have robots in the factories and it's not fully robotic. I mean, come on, I mean it's both. But this substitution effect is not going anywhere. That's one thing they can't afford to change. They want asset inflation. They want people to say that we're going to continue to run these deficits and you're going to continue to have, you know, we're going to be able to finance long bonds and yes, your reason, if you think, if you're right, let's just say you're right. And they're going to be able to equalize the US and the rest of the world, they're going to eliminate it. Us, Us long rates have to be the same, you know, as German long rates. Well, Germany's debt to GDP is 1/4 hours. Right.
- [49:41]
Mike McGlone
Okay, well how about Japan in China?
- [49:43]
Dave Weisberger
Well I, I, I understand.
- [49:46]
Mike McGlone
So those, let's point out the three major net exporters on the planet have very low interest rates. Why is that?
- [49:52]
Dave Weisberger
Well, I'll give you the answer. China because it's manipulated and there that, I mean it's because, it's because the government wants it.
- [49:58]
James Lavish
Japan has been manipulating for relentless yield, yield curve control.
- [50:03]
Dave Weisberger
Japan is manipulated and it's manipulated because they have a captive population that they've imposed effective capital controls on because they're only allowed to do certain things. Their postal system and their savings rate is off the frickin charts from their old population that is just living. That basically has it all locked in. Inflation in Japan is a very big deal and that's why they care about it so much because as long as they can control consumer inflation, their aging population, which is very bad and if you listen to Elon Musk talk about what's the real existential risk, it's population decline because that's what Japan is going through. And so those savings are what they're living off of. And if their life expectancy keeps going up, they're utterly screwed. Right. You know, and how did they get wealthy? But that's why they're, how do they get.
- [50:48]
Mike McGlone
Every one of them got wealthy by exporting to the US that's been shut off.
- [50:51]
Dave Weisberger
They all, they all they, they. Well it has not been shut off but what has happened is that the Word manipulation is what they're going. That's what's shut off. They're basically what these guys are saying. And I agree with them. I mean, I support the policy of saying, listen, if you're manipulating your currency and you're giving your domestic producers not paying vat, when our producers have to pay that, that's a tariff, and all of that should be equalized. I understand that, but I think it has to be in strategic industries. I also think that we need to let RFK fix our food supply, because when Lutnick is talking to the Europeans and saying, well, you should take our cattle and our chickens, and they're saying, do you shoot them full of hormones? And we don't want them because they don't qualify under our food safety standards. And you look at their rates of obesity versus ours, we need to fix that shit first. Which the good thing is he actually put someone in charge that will fix it. But once again, as Scott mentioned, this takes time. And so we. Time is what's going on here. I think the bottom line is, is that he doesn't have electoral time. And so what he needs to do is create the shock to the system now, and that's what you're seeing, but.
- [51:57]
James Lavish
Get it over with.
- [51:58]
Dave Weisberger
Really. The only reason that people would be selling bitcoin. Forget the rest of crypto for a heartbeat. The only reason people will be selling bitcoin is if they really think. They actually think that we're going to stop printing money, we're going to get deposits under control. If you think that, then my old apartment in New York had a view of a bridge. I'd love to sell you that as a bit.
- [52:16]
Scott Melker
As a bitcoiner, Dave, like people should, myself included, should support some form of ripping off the band aid, fixing things, you know? But it feels like, as I said on Twitter before, it didn't feel like a Band Aid rip. It felt like nuking the entire hospital instead.
- [52:37]
Dave Weisberger
Let's talk about this. Okay, stop.
- [52:40]
James Lavish
You.
- [52:40]
Dave Weisberger
We. We keep talking about beta, and everyone points to Sunday's Bitcoin raid, which I think was a cleverly designed trade that someone made a ton of money on. In the last. In the last 25 minutes, the NASDAQ has dropped two and a half percent, give or take. Am I getting that about right? I think that's about right. Right.
- [52:59]
Mike McGlone
It's actually bouncing up.
- [53:00]
Scott Melker
It's. Yeah, it's down since last. Since Friday, but actually up on the day. Yeah.
- [53:05]
Mike McGlone
And we got some great oversold signals.
- [53:06]
Dave Weisberger
The NASDAQ.
- [53:08]
Scott Melker
Yes. The NASDAQ opened at 408. It's at 412.
- [53:13]
Mike McGlone
No, no, it's talk of futures. NASDAQ futures open up. Okay, so S&P 500 opened up, down 4% down. Now it's down 2.8. Nasdaq opened up, down around 5%. Now it's down 2.6 up since the open of trading. But absolutely the low silver. I mean this is a classic shortcoming, kind of day 60 Vix. We saw it last night. Big gap, lower. Yeah, but ignore the trade, the, the nuances. Unless you're a trader. I, I'm talking macro.
- [53:38]
Dave Weisberger
You and I agree on that one completely. I think people ask me, what do I want, what do I think. My strategy is simple. Buy bitcoin, sleep well, don't use leverage.
- [53:49]
Mike McGlone
Okay, so let me check in that strategy. What happened when bitcoin to bitcoins, when futures are launched? Sorry, just my background is now bitcoin has massive leverage, especially with ETFs. And we're finding out the truth of bitcoin. It's the best performing asset in history. It's gone up way too much and is going back down. It has 13 million dependents. Gold has three. My point is one, those dependents get purged. That's when it's time to buy bitcoin. I think it's around $10,000. And now you know who to blame if it doesn't do that.
- [54:18]
Dave Weisberger
The entire market cap of non crypto, of non stablecoin, non crypto is rounding error in where bitcoin goes as it achieves adoption. It's round.
- [54:29]
Mike McGlone
It's a great prediction. I love it. Some of us made those kind of things eight years ago. We were bullish when it was cheap. Now it's just expensive. That's not complicated.
- [54:37]
James Lavish
Now, Mike, the difference is, the difference is let's, the difference is, Mike, is that those other 13,000 cryptocurrencies are in the, they're, they're, they're in the casino. People are, they're, they're trying, they were, they were trying to get rich off of them. That's all they were trying to do. Nobody's trying to get rich off of bitcoin and say they don't think it's going to go.
- [54:59]
Mike McGlone
A lot of traders.
- [55:00]
Scott Melker
Oh, they are.
- [55:01]
James Lavish
Well, not, not the people. Yeah, yeah, yeah.
- [55:05]
Dave Weisberger
Look, in the short term, you're not.
- [55:07]
James Lavish
Getting rich off of bitcoin in the short term, but you, but you're, you are holding value in the long term. And that's the point. That I believe Dave is trying to make. And that that's how, that's how we view it, or that's how I view it, is that. Look, if you, if you really believe that we're going to stop printing money, then yeah, and we're going to have deflation, you know, well, then that's probably not what you want to own, but you can. The reality is I just have zero. I cannot get to a path there. I have, I have racked my brain on it, Mike. I can't get to a path where we don't continue to print money, expand the money supply. Because the entire system, not just the US the entire system is built on debt. All of it. It's all built on borrowing. It's paper knows that there's no real money out there anymore except gold, which has been bastardized, as you know, because of all of the leverage on it and all of the fractional reserves. And you can't tell me that gold has not been held down with all of the paper that's on it.
- [56:16]
Dave Weisberger
It has been. And just to look at, even within crypto, James, I mean, bitcoin ether is now at point below 0.02. I mean, you know, the rest of crypto, the speculative part of crypto, which by the way is as a total undervalued compared to where it's going to be. But as a individual, people don't know what's going to be the winners. And so you see that it's a very different trade, the bitcoin trade. Bitcoin, even with Sunday's catastrophe, is still dramatically outperformed stocks, any metric in since last Monday, you know, since we last met. Bitcoin is down $4,000. The stock market is down double or triple that in percentage of. Anyhow you look at it.
- [56:58]
Mike McGlone
Absolutely, Dave, you got that beef. It's been doing that. It's been showing that that's significant. If it can keep doing that, that's wonderful. For meantime though, most people bought it.
- [57:06]
Scott Melker
And by the way, Mike said on Thursday, we did a show on Thursday and Mike said, wow, it's amazing that bitcoin is showing divergent strength in the face of this. It's not, it's not dogmatic where, where.
- [57:15]
Dave Weisberger
We'Re not screaming at each other. Because I think that when you look at the hash rate stuff and you see what's going on and understand financial incentives, there's one financial incentive we know that, that, that our administration has more than anything else. He is very loyal to his friends and his family and his Family are into this hip deep and they, and they, it's not like they don't know. You could laugh if you want, but you know, it's, there is a time for a trade here. If I were ryan cohen at gamestop, I would have deployed my $1.24 billion today. Yeah, I would have deployed it today for sure. Certainly I would be, or I would have started dcaing last Thursday and be pretty close to done by now.
- [57:58]
Scott Melker
Yeah, look at 87 or 88,000 when they made the announcement. So that's a big discount.
- [58:02]
Dave Weisberger
Right. So look, and so, you know, when you look at GameStop, where, where's GameStop right now GameStop is at 23 bucks. GameStop when the whole thing, you know, it's like it was down as low as, like in the, you know, with the 20 handle. That's a pretty big move. Right? You know, it's a, there's, and that's. Without any knowledge of what he's actually done. The point is, is I just want.
- [58:22]
James Lavish
To, as we're, and as we're talking, but as we're talking, you know, everything is rallying, but bitcoin is, is rallying up on today from yesterday. You know, it's. Again, it's not from Friday. Friday, it's still down significantly, but 6%.
- [58:40]
Scott Melker
Right.
- [58:41]
James Lavish
Remember, it was up on Friday.
- [58:42]
Mike McGlone
It's, it's showing right now pretty good significant divergence strength, which means from this I'd expect a decent short covering bounce in all risk assets. Most notably, the stock market might have just bounced. It might end up up on the day or at least bounce. But it's the macro that matters. And I think if you're depending on to make your bitcoin go higher and your crypto is higher, I'm like saying good luck. What's happening, I think, is creating the divisor.
- [59:06]
Dave Weisberger
It's the divisor.
- [59:08]
Scott Melker
By the way, Jim Kramer is the one who called a Black Monday of 20, 25% down. So maybe we get black.
- [59:13]
Dave Weisberger
So. Well, we knew that that was, that was the same. But all kidding aside, the issue is most of the people, I'll keep pointing this out, Mike, most of the people who own bitcoin that are the smart money. I'm going to go up into this room and it's filled with pretty much all the senior traders on Wall street who will now start filtering in as the markets seem to be stabilizing. And most people who own it believe it's 90% undervalued at least. So it's not that's the point. So you can put that as a risk asset. But that's what they think.
- [59:41]
Mike McGlone
So but here's the volatility. I get that it's wonderful. We anticipate often does not occur. I get that. Understood. But first of all for our audience, we need to disagree. Else if we all agree we provide no value. So let's do it cordially and disagree. It's fun to do it. We have to disagree. But I just point out what's, you know, I think, remember this is like I was very bullish bitcoin, but I just have a sell signal. I stick with that sell signal for now. I'd like to be wonderful if I'm stopped out and everybody makes some money on their bitcoin. But the point is the narrative is shifted. The whole system is going down. I think all the smart people you're gonna see get it. I bet most of them are probably over underweight. Equities are looking to sell. If they're not, they're not as smart. But the key thing I remember learning 1999, everybody's in the long haul for long haul as long as going up. And there's always a good narrative. Always. I just pointed out again and there was one crypto in 2009, now there's 13 million. They're all dependent on bitcoin going up. There's massive excess supply and bitcoin's great, I get it. But I pointed out just, I'm just calling for normal mean reversion. I'm sticking with 10,000 for now. And if I'm stopped out, you know who to blame.
- [60:42]
Scott Melker
Most of those are going to zero whether bitcoin goes up or down. Just for the record, that is a.
- [60:48]
Dave Weisberger
Very important point though. There's a lot, just like in the Internet bubble. Most of the assets numerically north of 99% of you're going to go to using Mike's numbers, way north of 99%.
- [61:01]
Scott Melker
Even when tech went well will be worth zero.
- [61:03]
Dave Weisberger
And most of the 14,000 Internet companies that existed in the OTC and NASDAQ markets back then went to zero. But the net aggregate value of the sector went up by two orders of magnitude or an order plus a magnitude between one and two orders of magnitude over the next 15 to 20 years.
- [61:19]
Mike McGlone
There you go. You need. Because next 15 to 20 years I'm in with you. I'm with you. I'm with you there, Dave. That's a long time. I hope I'm awesome.
- [61:26]
Dave Weisberger
What you're buying that's why I don't. You, you haven't heard me disagree on Ethereum. I haven't. I mean I, I don't know where it goes.
- [61:33]
Mike McGlone
I have and, and, and I'm, and.
- [61:35]
Dave Weisberger
I know you have. Look, I own some but it's, it's, whatever it is, it's, it's part of a basket and I reorganize the basket every once in a while and look, it's, it, it's something, it is what it is but it's, it really is A question of the macro side is we are signing up for a world where we change, we really want. Someone is trying to change the global supply chain on a dime and that doesn't work. And so you're going to end up seeing all sorts of stuff. The stories are going to go back and forth and forth and back. I mean Japan comes in, they say they want to do this. There's a limit to what Japan can do. They're an export led economy. Now the difference in Japan and a lot and Vietnam is aren't any Japanese workers making a dollar an hour or.
- [62:17]
James Lavish
If you, yeah, if you believe, if you believe that Trump is not going to win concessions then yeah, go ahead, sell the market. It's going to be a disaster.
- [62:25]
Dave Weisberger
Exactly. I think he will, but I think.
- [62:28]
James Lavish
He'S going to win concessions and will come out better from it. And that's, and that's the, that's the, that's the play and the question is when and how much pain is there between now and then? And Mike, I hear you that there's, that there's significant pain between now and then but I still think, and I'm somewhere between you and Dave, I think that there's, there's levers they can pull in between to get there and, and there's, there's, there's way to save face, you know, and still win. And that's, and that's what I think.
- [62:59]
Dave Weisberger
That they want to do since we're running overtime. Lightning round.
- [63:02]
Scott Melker
What I'm good till 10, 15. I don't know about you guys.
- [63:06]
Dave Weisberger
Between now and next Monday, where do you think the S P is next Monday when we start our show? And where do you think bitcoin is between, you know, where we are next next week.
- [63:19]
Mike McGlone
Let's do now and next year, next Monday can just rip.
- [63:22]
Dave Weisberger
No, no, I understand that. That's why it's fun. I'm not saying I'm planning on being right. I, what I'm about to say I'm going to be at like 55.
- [63:30]
Mike McGlone
What's here.
- [63:30]
Dave Weisberger
You're. My view is the S and P will be down another 5%, but it'll be somewhat orderly from where we are now. And bitcoin will be back into the low 80s again, where we were stuck most of last week. That's what I think will happen, but I think it's going to be volatile to get there, Dave.
- [63:48]
Mike McGlone
If that happens, that'll start to flip some of my views that it's less tilting towards being digital gold rather than leveraged beta. Right now I'm quite convinced it's much more leveraged stock market. I won't say beta. You don't like that term. And. But that would start tilting the view and I think that would start tilting the market's view. Right now we're just seeing little nitpicky stuff. To me, the Macro is Bitcoin's down 16 in the year. Gold's up 15. I just expect that to continue in the macro.
- [64:15]
Dave Weisberger
Yeah, it's your time period to drive me crazy, but. Okay. James, what do you think?
- [64:21]
James Lavish
I agree. I think that bitcoin does recover into next week. I don't know what the market's going to do, but I think that. Look, has bitcoin found a local bottom? Who knows? This thing is so volatile. It's hard to tell. It's hard to tell. Everything that you say, Dave, it makes sense. But the problem is it assumes that we're kind of at status quo here and we don't get any comments from the Fed and we don't get any comments from dissent and we don't get any tweets from. From Trump, but we're going to get all of those between now and the time we get off this call. So, you know, that's. That's the hard part.
- [65:03]
Scott Melker
Yeah.
- [65:03]
Dave Weisberger
But if that's why I said.
- [65:05]
Scott Melker
And that's a terrible situation and we.
- [65:07]
James Lavish
Know all things constant, holding all things constant. I, that I agree with you, but I don't. Who knows what's going to happen. Like the volatility that comes out of commentary is incredible.
- [65:20]
Scott Melker
Yeah. The 10 years are ripping right now, by the way. Almost back to 4.1%.
- [65:24]
Dave Weisberger
So 4.06 the wrong direction.
- [65:30]
Scott Melker
Right back up.
- [65:31]
Mike McGlone
Oh, it's risk. There's. There's signs, clear signs from last year's low, low last night. So there's risk back on. I mean, you see, you can just see the way that it's trading the Vix at 60. You don't want to be short in the market. You hit stops but that's what makes it go up to 60 and then switch. James did last year when it was at 50. Bitcoin dropped to 15. The Vix was at 65. You bought the market.
- [65:52]
Scott Melker
But we're seeing, I can tell you anecdotally that I think that rarely I get pissed off or really euphoric in markets and I was feeling pretty pissed off this weekend and there was actually a moment when I woke up really early this morning yesterday I was like I'm going to sell a bunch of stock today. And instead I counter traded myself and bought Bitcoin around 76 instead of selling off my a bunch of Coinbase at 143 after the market opened while we were doing this, maybe I'll be wrong but I know, I know when I'm getting too, too depressed or too euphoric and generally counter trade myself. So that's what I do.
- [66:30]
James Lavish
We, we, we, we, we had, we had bids down and we had stink bids out there in the, in the mid-70s.
- [66:37]
Scott Melker
And so yeah, I think it's by the way worth noting overnight.
- [66:41]
James Lavish
And we got hit, we got filled good.
- [66:43]
Scott Melker
You filled. I mean it's worth noting that bitcoin basically just after all that time came back to retest that March 2024 high missed depending on the exchange. But I mean no way everybody can be right. That was the most gratuitous level that everybody was watching. Usually that means you either bounce at 77 or you nuke to 65. Right. If that is where we end up at a 75 low, I'm gonna have to rethink everything about the crowd.
- [67:08]
Mike McGlone
But you're talking about a great trading environment. Continue to trade, make some money, just don't get married to positions too long. To me this is just a great environment for what I used to do for a living. I'm glad I don't do it anymore. It takes a special person to do it and I respect anybody. Our call does it. You, Scott and James and Dave who actually do it. I just say it but it keeps me out of the fray.
- [67:29]
Scott Melker
Dave, if I had to take that bet, I would probably default around where you are, I think. But I think that we get a lot of volatility in stocks. I mean Mike always points out and it's very true and, and I don't know what my camera decided to do again but we get these face ripping rallies in bear markets in the downtrends. I mean the biggest moves up like today always kind of happen when things are bad. So it's going to be really interesting to see, I think, how that ends up playing out in the end. But, gosh, I can't believe we have to go. I could have done this for 10 hours, by the way. I think at one point we had, like, 3,400. Probably our biggest Macro Monday ever, not surprisingly, on a Black Monday. I wish we could just stay on the entire day and see how the market closes, because I want to see if Kramer was right.
- [68:10]
Dave Weisberger
I want to take the temperature of the. Of the traditional financial community where I'm actually sitting, so it should be amusing. But we'll see.
- [68:16]
Mike McGlone
Yeah, the NASDAQ future is only down 1/10 at the moment. Yeah.
- [68:19]
Scott Melker
I mean, if these candles close this way, like on the nasdaq, I mean, this is what flat. It's a long day. But I mean, epic bottom type candle on the spf. Spx, the daily of something like that.
- [68:31]
Dave Weisberger
Kramer is undefeated.
- [68:34]
Scott Melker
Didn't they close the inverse Kramer etf? Man, I'd love to get a. A part of that.
- [68:38]
Dave Weisberger
Oh, my.
- [68:39]
Scott Melker
Well, guys, I. Yeah, this is gonna. I have a feeling we're gonna have big numbers and very entertaining shows all the way. Well, just close the gap. It just pumped even more. Look at that thing.
- [68:48]
Dave Weisberger
Yeah.
- [68:49]
Scott Melker
Okay, well, we've got until next Monday to see if our bets are right, and we're gonna come back. It's gonna be like S and P down 47%. Bitcoin, 81,000. Awesome.
- [68:58]
Dave Weisberger
We're so smart.
- [69:00]
Scott Melker
James, Dave, Mike, Another epic episode of Macro Monday. Thanks for staying a little late, everybody else. I'll see you tomorrow. And we'll see these gentlemen next Monday. Have a good one. Let's hope we're up from here. Have a good one.
- [69:14]
Dave Weisberger
Bye. Let's go.