← The Wolf Of All Streets
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- [00:02]
A
Bitcoin crashed on Friday. A $20,000 spread candle from the top to the bottom on some exchanges. $19 billion were liquidated from crypto markets across the board. About 12 times the largest liquidations we've had in the past, including the COVID crash and ftx. We're going to dig into the macro circumstances that may have had an impact on that and and also the actual mechanics of this liquidation. This is going to be a massive show. James is not here today. We are honored to have the author of the Big Print, Lawrence Leard here with Mike, Dave and myself.
- [00:37]
B
Let's go, let's do Tom.
- [00:54]
A
Good morning everybody and welcome to Macro Monday as markets attempt to allow the dust to settle of what happened on Friday specifically and over the weekend. I don't even know where to start. I'm going to just bring on Larry, Mike and Dave, welcome gentlemen. We'll start where we always start. Mike, tell us how Bloomberg's viewing what happened over the weekend and then we'll dig obviously into the crypto side of it. Just massive liquidation event.
- [01:25]
C
One of our top economists, Estelle pointed out that China tariffs and AI are the key things to really think about for next year. She pointed out they're looking at alternative data, their price tracker showing renewed deflationary impulses, price cuts, cash strapped consumers, hotel and leisure which gives a green light for the Fed to cut rates. So their alternative tracker is likely to give the Fed a red light. Sorry, green light for easing. She thinks retail sales will probably be okay but lower rates might start to help. So not much difference from her. Ira Jersey, our chief rate strategist point out the next important level for the 10 year support remains 4% but the next is 3.862's 10. He's still in that steepen or just for our audience, no steepen or means when short term rates usually drop more than long rates widen that spread. Twos tens have been stuck and can't seem to get above 60 basis points. It thinks it's eventually going to 100 just a matter of time. And right now I point out the two note yield right now is priced for two about three cuts into March. And then our Gillian Wolf equity strategies point out some of the excesses in equities but she actually rarely tilted over to gold. Pointed out it's been a key driver of earnings, most notably in Canada and it's mostly going up on weaker affairs. I figured that would peep you off there Lawrence.
- [02:53]
B
And then.
- [02:56]
C
I focused on gold and metals. And just an FYI, Bloomberg Radio has asked me to comment in the silver rally today after our show. And usually that's a sign of a peak, just let you know. And not to mention the key thing I've been focusing on is this gold silver ratio. It's dropped below 80. 80 has been good support. I view that as a level to be testing that support. Right now it's 78 point, basically 79. And the key indication for that is stock market volatile in the US is just buried. 90 day volatility was last week bottomed 8.6. Now it's a 0.10. I point on the VIX volatility index of 200 day moving average is basically a bull flag and we're above that level now about 19. And so my indications are this is just getting started. Gold's really expensive. Crude oil is just getting hammered and those signs are clearly global recessionary. And copper is a key thing I'm focusing on. This is the next big move. It's at five. Can it go to six or drop to four? And I think the risks are fouls. Iron ore bond yields in China and crude oil heads towards four. Back to you.
- [04:05]
A
So before Dave, before we go into the liquidation event, I know you're dying to do it, I do want to show, because Mike talked about metals, this is the silver chart obviously making a new all time high. Absolutely skyrocketing right now over $51. This looks like an illiquid altcoin chart in 2018. Larry, there's some wild things going on in silver I know that you wanted to discuss. So let's not before we move on to the crypto markets.
- [04:33]
D
Okay, Just quickly. Yeah, I retweeted this morning there was some. Bloomberg had a story, Mike, I'm sure you saw it, where they said that there's a squeeze going on in silver in London and people were checking out how to ship 15 to 30 million ounces from the New York comics stocks to the London stocks because, you know, lease rates etc are very, very tight. And you know, this is kind of, in my view, this is kind of the paper markets, the paper silver market, like the paper gold market. You know, people are saying, okay, give me the metal, right? And silver is one of those things. I mean it's easy to move a billion dollars of gold or not easy, but it's doable. A couple hundred million of gold. Silver is goddamn heavy relative to its weight. And to put, you know, 15 or 30 million ounces on airplanes, going to cost a lot of money. And so I think, you know, it's on my Twitter feed. I think it's an interesting story to me that, and you're right Mike. In the past when, you know, when, when these become front page news, you're near a peak. I think in this particular case it's slightly different in that these, these metals are both very, very undervalued relative to you know, total fiat money outstanding that competes for them out there. And so I, I personally believe we've got quite a ways to run which is not to say there won't be pullbacks all along the way but you know bull markets try and throw off all the riders. But as for me, I'm going to continue riding the silver and gold bull because I think we've got you know, years of, of upward movement here. So that's just overview.
- [06:00]
B
Well let's, let's make it clear. The important part is the denominator, Larry. Right, that's the important part. It's not that it's a, in over expensive in 20, $20. Yeah, 20, $25 when there's like double the number of them. I'm not so sure how expensive it is.
- [06:19]
D
Well in 20, 30 or 20, $40 they might be downright cheap. Right?
- [06:23]
C
Yeah.
- [06:24]
B
So I, I, I think it's, it's important. I mean if you look at the market this morning it basically it's almost amusing, you know. So you know the S P futures are indicating about recovery about half of the losses of Friday whereas gold is well beyond it sniffing out what's happening. Silver as we've said is crazy. The long bond yield is looking like it's about to flirt with four again but you know, it's still well within, you know, the four in that very tight little range where it's been. But the important thing that needs to be discussed is what actually happened in the crypto market and what does it mean. And you know, I know we're a macro show but it's very important to understand the macro process here. So people need to understand that in global futures markets other than perpetual swap markets in most of them the, there's very strict controls on what you can use as, as margin and most traders use T bills, you know, they use something that is in the denominator as their margin for trading whatever they're going to trade. When in crypto particularly on hyper liquid and you know, which was half of the liquidation and on finance you people are using multi product market margining which, what does that mean? That means they're using their volatile crypto to mar as margin against their, their leverage. So you could have a trader who thinks well you know, 10 times leverage isn't that bad because it means the market needs to drop 10%. Well of course obviously that, that's whatever or even five time leverage isn't that bad because it would need to drop 20% for me to get wiped out. But if your collateral also drops 10% or so on the move or looks to be dropping more, then it literally almost doubles. It's like, it's like a hinge if you think about it. It basically doubles the amount of leverage that you actually have. And so trading firms in crypto and I'm pretty sure we're going to find out that they were not with seasoned people sitting there trying to, who understand risk, you know, get wiped out as well as most individuals and small, you know, you know, basically crypto degen trader because they don't understand how bad it can be. So here's the problem. If things start dropping and excess leverage is getting wiped out and your collateral is dropping at the same time, particularly if it's really a liquid collateral, what will, what the liquidation engines will do at the exchanges is they will be selling at any price. The problem is, and I wrote a paper about this, so it's actually, and it's on my Twitter feed and we can find it with a guy named Paul Rosa when I worked at Two Sigma. The paper based basically shows that in all electronic markets, liquidity is concentrated right near the bid in the offer. So what does that mean? That means once you punch through and start moving in that instant, there's much less liquidity. Now imagine it punched through, there's much less liquidity. And at that time is when forced selling happens from liquidation. Well then it will continue to punch through at the same time. The collateral value is valued by the liquidation engine at where it thinks it can sell, but there's no bids at that instant. So things like, like there are a couple are obvious. I mean everyone's talking about Cosmos and I was looking at Bittensor Tensor is one of my holdings. I'll four bit tensor was at around, you know, 370, 380 before the event it started falling. And before all the liquidations of Bit Tensor were done, it was down at 270. By the way, it's at 400 today. Just, just to give an idea of, of the, of the flush. And then it's like people are like well wait a minute, I need to buy it back. I didn't really want to be out of it. And so you see that those sorts of things happening. The problem with all of this is it means if you use, and we talked about this with Luna, when it happens, Scott, it's when you use illiquid collateral, very bad things happen. Because what it means is at the exact same time that your leverage is getting flushed, your, your collateral is getting flushed, flushed.
- [10:35]
A
And so that also had automatic deleveraging. Hey, Ian's here. Many, many might recognize the last name Ian Weisberger this year is the automatic deleveraging that wipe people out on the short side and cause them to get unhedged.
- [10:47]
B
Yep. And so all of that combined together to be a disaster. When you look at the, the aftermath, you look at bitcoin. You know, you talked about bitcoin having the biggest candle ever. Sure, I guess in, in dollar terms. But in percentage terms, it wasn't even in the top 50 probably of all bitcoin involved bitcoin candles. Because Bitcoin, you know, collateral was, was reasonably well bid. Yes, it, it briefly dropped down to, you know, 100, which was at the time a 20 drop. But very briefly. I mean it was, it was within a five minute candle, but it was back up at a 1108 to 110 almost immediately. So all of this together shows you something about the mechanics of the market. Now, I don't want to have a mechanics talk. I want to do this in a longer form with somebody else talking about the benefits and the costs of things like exchanges having circuit breakers and what does that mean and all the implications. The point here is the market itself is pure naked capitalism. It is pure free market. And unfortunately, in pure free markets, people who don't understand the things that they're trading do bad. So like, you know, since Ian is watching, I'll plug one thing about coin routes. It's interesting. People were whining about stop losses not working well, stop losses cannot work if they're market orders. Orders in a time when there's no bid, it just can't. But if you have a stop loss that's a little bit more intelligent and the market does what this does, you can do much, much better. So a smart.
- [12:15]
A
Isn't this telling you, Dave, that. But isn't this telling you that we have effectively a fake order book? I won't say no, but potentially the bulk of the bids are market makers. If you're firing a coin, can't go to zero. If there's any actual bids, these coins.
- [12:29]
B
Here's the thing you need to understand, this is true in every electronic market it is true in equities, very true in equities. It is very true in every electronic market that the bids and offers in the market are clustered very strongly near the price that it's trading at. And if you right, there's no bids.
- [12:50]
A
Down 80, it's not, it's not fake.
- [12:52]
B
It's just the way it is people's buying interest. People like to react to what they're seeing. That is the general nature. So there's a thing called an auction and we all understand how auctions work. You know, in equities now you have single price auctions all day long and very whatever. But in an auction you don't get a price until people have a chance to respond. How many people would have put in bids if they had the ability to do so with Bitcoin at, you know, 102, 100, 105 and they just weren't fast enough. Many, many, many. How many people would have bought cosmos at 50 cents, forget a penny or as I mentioned bittensor at 300. I mean it's just, I mean I.
- [13:35]
A
Saw sui went from like $3 to 50 cents to 250 and.
- [13:38]
B
Yeah, right, so. But the point is this is not fake. This is the nature of electronic markets without any speed governor it's essentially the Audubon. Now in a lot of markets, equities, they put in something and I was an architect of this, I'm not proud of it because I don't like the way it ultimately came out called limit up Lim which basically says it has it's over engineered as most things in equities always are. But it basically says if a stock moves too far, they halt it to let the buying and selling get back together again. In futures they have circuit breakers at, you know, at total futures, you know, at index level things and it's halts the market. Now the problem with circuit breakers, and there's lots of problems, so the problem with circuit breakers are it becomes a target when things go bad. Right. We've never hit the circuit breaker in the equity markets since they put them in the total ones for any length of time. But there is a circuit breaker where the market gets shut down for the day. And if Mike is right about a great unwinding or in deleveraging and crash, like what happened in 87, you would hit those circuit breakers and the market would get closed down. In 87, the market, if the circuit had the same structure it does today, it would have shut and it would have shut for the day sometime around 315, 320, thereabouts. So understand that that doesn't make it a better market because now all of a sudden you can't trade, you can't hedge and you're, you know, there's all sorts of reasons why that's not necessarily good. I'm not advocating for it. But to argue that crypto is faker than equities because it allows it to happen at all at 24, 7, there have been plenty of times in the equity markets where if the market was open longer and there were no circuit breakers that really bad things would happen. And a lot of after hours trading in equities looks very much like this. So I resent, I know I'm, I'm act defensive here, but I don't believe that those words make any sense. It is the nature of electronic markets. When you allow for instantaneous trading to do that, that isn't a feature, it's not a bug. It's the way it's designed. And if you want it to be designed differently, then some, you know, exchange could design it differently. I mean I could certainly help exchanges to figure out ways.
- [15:43]
A
On the leverage side though, a lot of these exchanges have insurance funds, right? So they basically step in as the, as the bid the insurance fund hyper liquid and the decentralized exchanges, they don't. So that's right.
- [15:55]
B
I think you saw something and that's why Ian's point. And by the way, we, we haven't talked so I, I didn't know he was going to comment. But that's why Ian's point about automatically leveraging is important because what does that mean? It means that there was a fear. The reason for, for automatic deleveraging is because they think their insurance fund's going to wipe is gonna, is gonna.
- [16:11]
D
Dave, can I ask a question? I don't really play in the space, you know, because I just buy and hodl bitcoin so I don't trade it at all and I don't play in the switch is leverage of you know, 2, 5, 10, you know, 50, 100. Is that still available? I mean, yes.
- [16:24]
B
Yeah, but it's not that, it's not the leverage that's the problem here. I mean, yes, it is. I mean if people, if someone's an idiot and they put 50x leverage and it moves 2%, they're wiped out. That's fine. The problem that I'm trying to say is if you think you have 10 times leverage, which means you, you, you think you have time before a 10% move happens, but you actually have your, your collateral in the same asset. You actually have collateral in the same asset then effectively you have double the amount of leverage than you think you do. And a lot of people were like that. A lot of people had big baskets of lots of a, lots of assets that all move together and many of them went to crazy, right?
- [17:09]
A
Yeah, people got wiped on cross which is why.
- [17:12]
D
Yeah. Some of the people who had the cryptos are getting margin called on their crypto position and so they have to sell bitcoin to come up with it.
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B
Correct. And, and in fact that's probably what happened.
- [17:22]
A
Yes.
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B
Because bitcoin was less than a third of the liquidation despite being obviously a larger percentage of the overall.
- [17:27]
D
Interesting, huh? That's a good number.
- [17:29]
B
So basically the amount of, of what's important is the lever. The bitcoin was white, was, was five something billion out of 16. But Bitcoin is around 60% of the non stablecoin, you know, market cap. So bitcoin was significant and yet it had the candle that we talked about. We talk about it in bitcoin terms, the ethereum candle was much more violent and a lot of these other altcoins, even the bigger ones got killed. Now the interesting thing is if you look the meme coins, the ones that Mike loves to bash on and, and I actually agree with them. I mean fart coin is still.
- [18:04]
A
Mike just wants to buy lower.
- [18:05]
B
Fart coin is down over 30% from where it was trading before this.
- [18:09]
D
How does Salana hold up? Did Solana's fine?
- [18:12]
B
Solana's at 190.
- [18:14]
A
It was Solana Eth. Bitcoin kind of had comparable levels of movement and I said persistent bid from non crypto entities that will, you know, keep those I think afloat.
- [18:27]
B
Right. I mean it's very, it's fascinating to look, I mean, you know, as I said I mentioned Bittensor already is actually higher than it was. You know, where were we?
- [18:36]
A
BNB made a new all time high this morning before going down by the way. You know there's a. Listen, there's a lot. So we're going to move on from this in a minute but Binance faces intense backlash obviously over this. Binance covered 283 million in user losses already and they admitted that effectively things broke down. Right. So yes, it's a free market but Binance also said our systems didn't work that great. Right. And we know that that happened on effectively every exchange. I also find it wild and on the, on the bitcoin side, by the way, if you look at volumes, Larry. You were kind of asking about it. We had two larger volume days on Coinbase, on Bitcoin in the summer with these kind of small candle spreads and dips being bought up. So this wasn't even the highest volume we've had in the last three months on Coinbase, on Bitcoin. So this is a very much a crypto thing, you know.
- [19:26]
B
Right. But the rest of crypto had. Had extraordinary volumes.
- [19:30]
A
Right, that's my point.
- [19:31]
B
And obviously it's also worth it.
- [19:34]
D
I'm sure Mike's going to comment on this. It's also worth pointing out that the stock market got shellacked. I mean, to me, the bigger. You know what all this means. It's a bigger issue, is just how fragile is this whole system. That, you know, a tweet by the President, you know, and now he's claiming that he just misunderstood what. Which is kind of.
- [19:53]
A
The market went down.
- [19:55]
D
Yeah. And the market, you know, just gets absolutely shellacked. I mean, it's. I don't know that it doesn't strike me, but no signs of a healthy market here. I mean, this is a. I'm with Mike. And that this is a very overvalued, very fragile market. And while it looks good to the, you know, casual observer, I think there's actually a great deal of risk in this market right now.
- [20:15]
A
I mean, we had, yeah, we won't call them stable coins, but we had deep. We had, we had the like entire library list of catchphrases you can have go wrong in a crypto market in one day. You know, like stable coins, Athena de pegging and, and market makers obviously breaking down. They said the oracles weren't working. I don't believe, Larry, that this is all because Donald Trump said this at 5pm on Friday. Everybody loves to assign a narrative, but we didn't have a $19 billion liquidation because of a quick tariff threat.
- [20:45]
D
Fair enough, Fair enough.
- [20:47]
A
Right, Go ahead, Mike. I'm sorry.
- [20:52]
C
The key question now as we enter the beginning of 4Q, is this the beginning? Is this the end of just a little bit of liquidation or is this the beginning? Obviously my bias. It's the beginning. I'd like to show a few charts. Why. First of all, Trump made those comments. But we know the number one thing that emboldens this president is the stock market. And that was proven by his 90 day delay back in April on the tariff. So what I show you Here, this is 90 day volatility on the S&P 500. It just bottomed from the lowest level in five years and the same chart is a 200 day moving average. The VIX you know those of us our technicians call that's a bull flag. It went up it's staying there now the VIX is above that level right now 19.3 so this is just little normalization you get that that 90 day volatility towards the same levels of VIX which is but it's average VIX is usually trades at a premium that's going to happen it's just a question of when. I think it's happening now and sooner and I'll point out some of the key things that really trigger me. Here's gold in terms of bitcoin the gold ounces it's broken below this key support that sells since the bottom 2022. Now I show a weekly chart and also show 500 in terms of ounces of gold. It's breaking down looks like it's going to break below that low from 2020 at 1.5. And again there's a good reason volatility so low. When Volunteer gets this low he just needs a little trigger and Trump saying anything can be the trigger. Here's a key leading indicator strategy those of us who invested in this thing in the past it's broken down strategies below its 200 day moving average it's showing resistance and breaking down at the same time Dave mentioned earlier T bond prices again this is why I started in the trading pits. What I thought I know most I thought had bottomed back here it's just starting to show life to start rallying that's deflationary forces as we get the deflation from cryptos And I want to show you one thing that I've been Scott's no I've been wrong and for quite a while I'm just showing you this is the total return of the S&P 500 this year peaked up around 17. It's heading lower as volatile's body now it's around 12% and this is a total return of TLT the most widely traded long bond contract in the world. I've completely wrong in this. I think they're going to cross paths and TLT is going to outperform the the stock market this year. And one key reason is because volatility is just so low there's so much speculative excesses and cryptos are the leading top of that whole thing. And this is where I just look at this little chart from microstrategy if it's going down it's just a signal. The whole space just do for some mean reversion. What we saw this weekend is what you typically expect. So what do we do going forward? And that's why I think you're supposed to be looking to sell rallies in all risk assets. Even gold is pretty expensive at $4,000 an ounce. And silver above 50, it's not a place you want to go out and buy. Lessons have been taught by buying silver above 50. Sure, maybe it goes to 55, but you don't want to buy into when you have short covering or squeezes like this. This is when you're supposed to say thank you very much. And here's what I like to end with is it's really hard picking bubbles, shorting in the bubbles, using dribs. Now I did that well in 2008 but because I had a rough year in 2007. But it's been easy. This year is being long gold. But now that's expensive. So what's the next big trade? And that's why I just look at that volatility. This volatility continues to just recover a little bit from a five year low. That's an awesome trade. But for buying hold people it's going to be tough.
- [24:03]
A
Larry, in one second I want your thoughts on tlt but Dave, I just want to show one thing because Mike and I did a show with Gareth Soloway on Thursday afternoon. And listen, Mike, we know that you've obviously been bearish and you've hinted towards it. This was the first time I ever heard you flat out say I'm saying something I've never really said. Sell everything. Which for those who don't know, Mike was also as he just said, saying sell gold, sell silver, sell the things he's been very bullish on throughout this entire time. And you said it very emphatically. Obviously it's an impeccable timing what, what happened on Friday. But there's a very high conviction for you.
- [24:38]
C
Oh yeah. That's the key thing. When you keep saying the same thing, eventually you're right. But Dave knows it, Larry knows. You know, I've been wrong in a lot of things but it's the main macro that's just starting to kick in as we head towards fourth quarter nine. Just it looks like the bitcoin to gold ratio, our model, my, my colleague Josh Daniel created model can easily go back to 15. It's 28 right now.
- [24:59]
B
Yeah.
- [25:00]
D
So it's just thrown over the line barely and I think it'll come back up through that line, go ahead.
- [25:05]
B
Well, look it, it's the denominator. I'm gonna, I'm a broken record. I mean so like your call on front on Thursday look great. Gold is now a hundred dollars higher than silver is higher than it was back then. The stock market by the end of probably tomorrow or Wednesday will probably be higher than it was. I don't know about bitcoin. We'll see. Crypto is, is this was. There was a lot of, of blood in the water. It's going to take some time for it to un, for, for things to, to, to flush out and we'll talk about it. The crypto specific stuff on Crypto Town hall this morning. So I don't want to delve into a lot of what's going on there, but in terms of bankruptcies and people trying to figure out where the hell their positions are, etc. It was, this was a big rock in a big, in a small pond causing lots of ripples. But the thing about it is, is when we were sitting on Friday afternoon at 3:30, it looked exactly like the Friday before the stock market crash in 1987. It was exactly the same. It was a pinwheeling Friday. It had all the same vibes, the same sort of market action. And I tweeted at the time that there's going to be a lot of people over the weekend saying oh my God, this is the same thing. We're going to come in Monday and there will be no bid and blah, blah, blah, blah, blah. Now here's why at the time I didn't think it would happen because there's no such thing as portfolio insurance, which is what caused the 87 crash and to spin out of control. And so people remembering things will get it wrong. But the truth is that if we do in fact do what I expect the market to do today, which is recover at least 50% and then see of what it lost on Friday, that the potential for an October panic seems to kind of not be there. Right. Barring a black swan event like, you know, Xi and Trump deciding to, to, to punch each other or shots being fired or something, most likely that won't occur. The truth is, is that if you look at constant dollars to make decisions on the prices of assets, you're missing the fact that more dollars are being printed. There's a guy on this panel, I'm looking at him here, who kind of knows a little bit about, you know, the amount of dollars being printed, but it's a big deal now. The government is shut the one, I don't call it a black swan. The one thing that could actually help with the amount of printing is if the Democrats are dumb enough to continue filibustering for enough time. And I don't know what the exact rules are, we'll have lawyers could tell us. But there are some rules which basically will allow Trump to permanently close programs, lots of them. Will that help enough on our budget deficit? Probably not. Will people start thinking, oh well look, this is good, we're going to start getting the deficit under control. Yeah, people will think that that narrative is there. Honestly, it's not going to happen. What's going to happen is they're going to fold. We're going to get a continuing resolution. They're going to talk about how much they need to add back for health care because Republicans don't want to give them an issue for the midterms and it will be business as usual in operation print. And that's the most likely scenario. And so we just have to understand that that's what you're looking at. And these markets are, are, are not tethered to a chart that doesn't divide by the number of dollars in circulation is going to get things wrong. And that's been my main point all to the, the entire time. And so, you know, gold doesn't seem crazy to me. I still think gold's gonna hit 5,000. I've been saying that for a while. I mean, yeah, pullbacks will happen. Getting ahead of itself. Silver, you know, the gold silver ratio could go to 50 easily. It's 15, 15 in the Earth's crust. The reason for the gold outperformance where 80 has been support is because gold has been a monetary asset and central banks have been buying it. Right. At some point that starts to, you know, kind of fade as bitcoin gets into the picture. But it's not going to be now, it won't be this year. But could the gold silver ratio go down to 60 or 70 before it goes back up? Yeah, it could, it could. I mean it, honestly it will be probably under 20 in my lifetime if my, if I, if I stay in good health, certainly in my son's lifetime, it should be that way because that's where it should be. And those are the sorts of, of relationships that, that are very long standing. But since we've had the gold backed money era, that's when the gold silver ratio has been between 80 and, and 100. And so those are a lot of cross current Scott. And you know, if you're trying to trade this market. I mean look, we just saw a candle in bitcoin. It just jumped, you know what a thousand bucks which is nothing really. I mean it looks big on the chart but it really is nothing compared to what we are. The question really is with all of these assets is where's the value? And you know I will be happiest and say this, this rally that that is likely to happen is more likely if the things that rally are the things that people really do want to buy and are the unless degeny of assets. So I, I, I think the bitcoin fart coin ratio is really important. Right. And I love to see that. I mean you laugh but I think it's a big deal. Yeah, right. I think it really matters and I think that's the sort of thing. But, but remember money is being printed consistently in every major economy around the world. And so that's something that we have to understand as far as interest rates are concerned. I mean Bloomberg just told you that they think there's going to be three cuts. Remember the newest member of the Fed thinks the risk free rate is 3 1/2% below where we are today and we're going to have a new Fed chair in May who likely believes the same thing. So what does that tell you about, about risk assets relative to historical norms?
- [30:48]
A
That's a natural sort of. Yeah. The next conversation. Larry, just going back to what Mike said. I know you have a probably opposing opinion on bonds and then I think we should kind of just set the table for what we believe comes next. Mike obviously kind of in the sell everything camp. Obviously Mike thinking, I mean Dave thinking, you know, gold to 5,000 things continue up. I would be curious where you stand have a conversation on that as well. But starting with bonds.
- [31:19]
D
Well, yeah, so let me react to Mike's comments and we'll come to bonds eventually but so I think I disagree with Mike on sell gold and sell silver here. I think and I understand from a trader's point of view and you know, I mean it's way overbought, etc. It's moving, you know, very rapidly for you know, this past year. And so you know, yes, there'll be volatility, no question and could they both correct significantly? They could but I take a more multi year point of view on these things and I think we're going to 150, 200, $250 silver and $10,000 gold. I'm with Dave. The denominator is just going to keep growing and What I think, what, I think the mistake a lot of people are making is that they don't realize that, that the market is changing and we're, we're kind of repricing what is money. And we're, we're now in the, we've gone from the gradually phase of fiat failing. I think we're kind of entering the suddenly phase. And you know, and that's based on what I observe in the acceleration of the gold price and, and the silver price as well. And so, you know, it depends on how you want to look at it. There are a lot of charts. In fact there's going to be a lot of this. I'm writing my Q3 letter for my fund, which is free, it's on my website. It'll be out in about a week, less than a week, probably five days, four days. And I've got all these ratios of the amount of gold and silver compared to the amount of the money supply. And we're still just scraping the bottom in terms of gold and silver repricing. I mean, you know, if we were to go to 100% gold standard, full coverage of all dollars outstanding with the 261.5 million ounces of gold that the US holds, we'd have to have a gold price of $90,000. So 90,000 is a long ways from 4,000. So I'm not suggesting we're going to go to 100% coverage. Generally 20 to 40% gets it done. But my point is that I think we're in the third or fourth inning of a very significant gold repricing in fiat terms. And that's primarily because the government is completely and totally irresponsible. And if that were to change, I would have to revise my views quickly. But I still don't see any evidence that that's changing. I mean, you know, they're, they're the big beautiful bill. And you know, yes, tariffs brought in some more income, but the big beautiful bill ate all that up. And you know, it's interesting to me, they just reported the year end deficit at 1.8 trillion, same as last year. It should have come in closer to 2. If you read through the notes carefully, what you see is they change the classification of some of the accounting to prevent it from coming in at 2.1.
- [33:50]
A
Which we don't, we don't define recessions the same either.
- [33:54]
D
Change the name. You mean we can't trust the government numbers? Oh my God, I'm shocked. Right?
- [33:59]
A
If we get them.
- [34:00]
D
Yeah, so, yeah, and, but it's all held together by the increasing stock market. So to me, to me, what's going to happen in the gold and silver markets is kind of a pretty easy call, kind of a no brainer almost. They're going to go higher over the next several years undoubtedly. And then I think bitcoin is going to do even better still. The chart that Mike showed where the bitcoin being right up against the increasing trend line bitcoin to gold, you know, I think right now the easier trade is to buy bitcoin than to buy gold. Gold's had a nice run. Bitcoin has lagged to that. Bitcoin will follow in my opinion, and it'll follow with a vengeance. I mean, I think we'll be at 150 by year end and 250 sometime next year. So, you know, I'm quite bullish on, on both of these, you know, both of these assets as against fiat where I'm a little less certain. And I've been dead ass wrong and I don't know, Carlosari and some other guys took me to task for it on Twitter which kind of pissed me off. But you know, I've always thought the stock market was a bubble and was going to be going lower and I've been dead ass wrong on that. You know, they've managed to keep the stock market inflated despite being at record high valuations by every single metric and nope, not, not every, close to them all day close to them.
- [35:09]
B
I mean corporate profits are as, as bubbly as, as market cap, market cap to GDP and corporate profits, GDP are the same chart. That's the difference.
- [35:20]
D
Right. But they're, and they're both at record highs as I recall.
- [35:23]
B
They are absolutely 100. But the point is that there are things, there are dynamics going in here. Some of that sloshing money is, is more money is moving into financial, financialization of financial products than people want. And it's causing all sorts of interesting pathologies.
- [35:40]
D
And I mean here we are, we're running these record deficits and we've got a healthy stock market. So tax receipts from stocks are where they should be according to the government. Well, you know what happens if and when that changes? Because we know in the last big two big stock market declines, you know, social costs go up, tax receipts go down, deficits blow out. We're running a record deficit percentage of GDP right now. Close to it other than the two big, you know, the two big prints. And, and we're starting to see cracks, you know, tri colors a crack first Brands is a crack. You know, this Argentina thing is a big deal, right? I mean, you know, we don't have money for lots of things, but we can print 20 billion pesos to, you know, to keep Argentina out of China's hands. So, you know, it's, we're starting to see. And the, you know, the, the data on, you know, consumer delinquencies and cars and consumer delinquencies on credit cards is getting worse. Not, not, not, not terrible yet. But, you know, there's, there's some signs that, that maybe, you know, maybe the economy is, is getting to be punk. I mean, even, I mean, I know Powell, for example, would have definitely liked to have been steady on rates or raised them so that he could maintain his Volcker reputation. Even, he said, and he admitted the risk to both sides were quite high and they hadn't attained their inflation mandate. But he's even, he said he was worried about the employment side and that's why he cut 25 bips. So, so here we are. But I, I remain a raging bull on gold, silver and Bitcoin. I think they're really the only way to protect yourself against what Dave describes as an increasing denominator, or I described in my book as the big print, which is kind of in the process of happening. But it hadn't gotten really big yet, but it might. So we'll see.
- [37:19]
B
Yeah. Hey, Mike, the, the story that, that Lawrence mentioned, which is, it's big enough that it really is a macro story, is first brands and Jeffries. Any conversation about that in, in morning meeting or people talking about what's going on there?
- [37:34]
C
No.
- [37:34]
B
I've heard multiple people saying, oh, is this going to be this, this, this, you know, Lehman moment? I mean, I, I actually, my career working at Jeffries and a good friend of mine is, is in senior management there. I have not called or talked to him in ages, but, you know, I guess we used to be good friends. I just haven't talked to him in a while. But there are a lot of people, you know, who are looking for the pin to prick a bubble. In my, in my opinion, when everyone's looking for pins, chances are it won't happen. I prefer to think that bubbles happen when people are not looking for them. And, and it's really interesting. I mean, I, I want to see bearishness, you know, if I, if I'm, if I'm long. Right. You know, it's, it's that sort of thing. But the question is, is that it really is Mike, you know, chatter around your newsroom or the people looking at anything any of these things as systemically risky.
- [38:32]
C
So that that's. I want to tilt on that. Last week I had the honor of presenting that and being part of Greenwich Economic Forum. And it was after that when I came out with that comment that sometimes you just have to sell everything and I can't give investment advice but sometimes it's telling people to sell stuff that's appreciated too much. That was my take from meeting with some of the wealthiest people on the planet. And it's amazing. The one thing I enjoy there is a crypto panel with 3430 somethings on that panel and every one of them was extraordinary bullish and had a lot of humouring. Seemed to know everything about everything about markets. And I looked around the audience and the Average age was 50 to 60. You know, Greenwich types, New York types who very wealthy and just look at them like Yeah, I was 31 too and we all were. So it's just remember what's happening. I wanted to show you one chart of guilty as charged of trying to find peaks and bubbles. And that's why I want to point out because we did spot speak out the 87 crash. Here I show this is S&P 500 divided by GDP and trillions is not divided by, you know take and make it take the trillions down to 100. So it's like 30 trillion right now the peak when right before 87 crashes below 1 to 1 it was like 0.7. That held for seven years. Okay. Stock market cap the GDP and this is my point. Now you just look at pattern recognition. Here we are the highest ever. Now it shows 2.1 because it's S&P 500 versus GDP. The actual stock market cap to GNP is 2.3. But I use this metric because I can go back 100 years. This defensible data on the term number one thing in life is defensible data. This pattern I see here would got volatility down really low. And you know this most, you know and I would say entitled president ever is very scary. So what's going to happen? I just don't know from where is we're going to go down maybe to this level have a 50% correction I might call it's just question of what sparks it. And so my thought was beginning the year was okay, still have the same view. It's overweight golden bond now the gold has done great shorting the markets a big hard part. I did a lot of that 2008 shorted a market and you caught part of this, but you had to deal with this first. That's the key point is right now we're so elevated, the only thing that matters, retail sales, everything is the stock market. It's the most great, the greatest wealth effect in history. And I do appreciate ping is part of that wealth effect is cryptos. There's so many 30 somethings have made a lot of money. Some of them traded too much. It was the wrong thing. They're just buying and holding. At some point you're supposed to say thank you and sell a good portion of that. Now my rule, when I traded, when I doubled, I'd sell half and then put the rest away. And that was a good problem because I'd love getting pissed off when things kept going up. But this is the point. Now we're due for a reversion here. It's just a question what sparks it. And that's why I pointed out volatility solo, these kind of things. I look for the signals. It's the time of year. You're supposed to just sell really. So my call for just sell everything was not a day trade. Yeah, it's nice. That happened the day before. One little, one little drop. But it's, you know that s P500. I know. Total return on the year right now is 13, 14, 14%. Yet bonds are catching up. I'm thinking maybe by the end of the year, might be five or actually down on the year now. If it's up, cryptos will be fine. If it's down, cryptos will lead the way. So bitcoin will just fall on the back of all these millions of things that are just numbers on a screen.
- [41:49]
B
So my thesis has always been that the most bullish scenario for bitcoin, bitcoin on a two to three year time horizon is a massive stock market wipeout. Because that the response to the stock market wipeout will be money printing on a scale that rivals where it was in the pandemic with this president and this Fed. I think that's fairly likely because they can't afford it and they need to juice asset prices. The trend toward financialization is coming towards its terminal point. But its terminal point, as you know, you know, is you guess because you're getting closer and closer. You're going halfway each time. You don't actually get there for a while. It takes a lot longer than you think. But this entire complex where the chart you showed is one of the scariest charts ever. It really is. And there's no question about it. But the question is, what's the denominator? I mean, how many dollars exist and the pathologies that are happening. If you look at elections. So New York is likely to end up with arguably the most unqualified person to sit in the seat of mayor of New York that could even be proposed. Right. You're talking about someone who doesn't believe in free markets in New York. You're talking about someone who wants to give free stuff to everybody because of the pathologies. And there's a lot of anger out there in younger people for a lot of very good reasons. I mean, if you listen to people, they will tell you. And the data on affordability of houses and things is, is rather extreme. And so what's happening is all this financialization, you know, has a problem. And we talked about it last week, housing is an asset. And if what you're doing is pushing inflation into assets, you're pricing people at the beginning of their lives out of those assets. And so, you know, it doesn't. It's not hard to understand how we're going to end up having a reckoning. I don't know when that reckoning will be. I think that I've said this before. I think that Treasury Secretary Bessant has the right idea. The only real chance to escape this is massive nominal growth, or as I like to say, grow, baby, grow at the same time. At the same time as. So you need to deregulate and print at the same time to get out for our debt, to try to get somewhere. But I just don't know if they're also going to be able to, to cut the waste that they think they can cut at the same time. You know, it just, it's a very difficult situation. It's what they're trying to do. And as long as they're trying to do that, that's going to be a bid for assets that are performing. I mean, the entire stock market is very scary. There are the companies that are leading the stock market have, are priced, to quote perfection. That's, that's what most of us would call it. But if you look at their profits and you look what's going on in AI, I mean, it is a new industrial revolution in many respects. Some companies are going to do phenomenally well from a profit point of view while labor is going to get trashed again. And that's going to cause all sorts of political backlash. So the likelihood of this being sustainable is not high in 2025. However, I don't think those Fault lines are really going to show in 2026. They might next year could be extremely interesting as we approach the midterms, as we see how things are going. I mean if there was a stock market crash between now and the midterms, unless it happened in the next couple days, you would see. I mean look, it's pretty obvious of what happened.
- [45:26]
A
They're gonna print so much money in May.
- [45:29]
C
So let's, let's get, let's just get.
- [45:30]
B
To the next issue. And that's what people are, that's why markets are where they are though.
- [45:35]
D
Yeah.
- [45:38]
B
And then you have to ask the question is it enough?
- [45:39]
C
And that's the next three months. Well it's not that we have unfortunately Dave for our audience they like when we disagree, we agree. I just want to point out the current situation in China is the big print. Their money supply running around 45 trillion by some measure but on a terminal I chat GPT it and said more than that. It's double the US their debt to GDP on their according to Goldman Sachs is running 300% yet PPI in China is minus minus about 3% and the 10 year yield is 1.85% that's turning Japanese we those of us who remember trading JGBs 30 years ago it did the same thing and Japan still finally coming out of it, they did the big print. It took them years to get out of that inflation but it was because risk assets went down too much housing and the stock market is when you get the bubble that bursts you can print as much as you want. You're still going to have those problems. And that's my point is why I'm so concerned about cryptos and bitcoin is because their risk on assets, assets on the back of the stock market we get that normal drawdown which we haven't, you know at least 20% and stay down for a while. You'll have the flush, you purge all the excesses will be great buying opportunity. But that's my point is the big thing that's emboldened me to make the call I made recently is gold. I've just never seen this kind of rally. I look at S&P 500 is down 28% versus gold this year. Bitcoin's down what? 20% versus gold this year. That's just not the kind of thing the last time these things happened was 2008 and Bitcoin didn't even exist. That's why I'm just very fearful and I have to say say what I Think. Because if I don't, it's not. It's disingenuous. I have to be able to help people when I see risks in markets.
- [47:12]
D
That's a good point, Mike. And I think the, the risk of. I mean, when you've got a debt bubble that's as big as the debt bubble we've got, when it bursts, that's enormously deflationary. And 2930 showed you that. And you're right. They printed money back then, and it didn't solve anything. And the price of gold actually didn't go up much during the 30s, but the purchasing power of gold went up 10x because that price of everything else fell massively. So, yeah, it's. I mean, if. If we get into. I mean, one of the cases that I often consider is what happens if we have a deflationary bust and they print like crazy and the prices of gold and silver, everything go up a ton, but, you know, it's not enough to get the economy going again, and the economy is just kind of broken, and it's. It's kind of a nasty world, to be frank. I mean, it's. It's. It's kind of a mess. But I. If you have to decide what assets you want to hold, I, I contend you still always want to hold assets that the government cannot print because the problem is they've got too much debt, and they have to reprice that debt in something that can't be printed. And there are really only two choices. And, and the. Well, three. Gold, silver, and bitcoin. And so that. That is going to happen sometime in our lifetimes. But you're right. Predicting exactly when. And is there a deflationary impulse before we get the massive big print? Probably there certainly could be.
- [48:36]
A
I mean, Larry, just quickly, you have obviously seen over the past two weeks, all of a sudden, the debasement trade narrative catching.
- [48:43]
B
Yeah.
- [48:44]
D
Isn't that amazing?
- [48:44]
A
J.P. morgan, Paul Tudor, Joe and Griffin from Citadel. Right. Obviously the biggest names in the world. Most of them have said bitcoin gold, some added silver. Paul Tudor Jones added nasdaq. He thinks states bitcoin gold, nasdaq, or your hedges against what you described. But you wrote the book. Like, what does it feel like to hear everybody screaming the debasement trade when you've got three copies of it right behind. I got one right there.
- [49:07]
D
There's one.
- [49:07]
C
Yeah.
- [49:08]
A
That's what that orange thing is.
- [49:09]
D
Yeah. You know, I mean, I even tweeted about this. I was experiencing a little bit of frustration because it's kind of like, you know, I've been screaming this from the rooftops for five years and now all these other people have caught on. That's nice. That's what you're supposed to do in investing. Supposed to be right. And then have other people, people come join you. But you know, Muhammad El erian was out there tweeting that he, you know, like he invented the idea. And in 2017 he was on Bitcoin, you know, and this is what the elites will do. They'll eventually say, oh yeah, we knew this all along. It's like really? Well, were you buying Bitcoin at 4,000? Like I was. No. You know, and, and it's frustrating to me because I can't really get. And I just want to spread the word, okay? I don't care about selling books. I care about trying to spread the word so people get the message about how to protect themselves. And I can't get any elite media channels to pay any attention to me whatsoever, or publishers for that matter. And I suspect it's because I'm pretty edgy guy and you know, I call him as I see him and so, you know, I don't really fit their narrative very well, but they, they will.
- [50:02]
C
When it's too late maybe.
- [50:04]
D
But you know, one, one other thing I find interesting on that, the mainstream is picking it up and this really, actually kind of really impacted me because I have a couple of Morgans. The gym I work out at has a couple of Morgan Stanley brokers there and they've been, been on me for years. They don't believe any of my crap. Why don't you just buy the S P? You know, they've been telling and they drive Mercedes, they drive high end Mercedes and you know, I'll just buy the S P 500. We've been telling our clients to buy the dip since 08. We've made them a Fortune Mag 7, blah blah blah. Well, guess what? Morgan Stanley very recently just came out and said they, they believe that their clients should have a 4% allocation. Now they said crypto, hopefully they meant bitcoin, but I mean that's, that's a sea change. I mean there was a time when there's a mortgage down the broker you couldn't even recommend. Well, you couldn't even, you couldn't even sell it unsolicited. Then they let this say, well if the client wants it, we'll sell it to them an etf and then they got to the point where they could allow them to solicit and Say, hey, you should think about this. And now their chief strategist is saying 4% is a good starting allocation. It's like, wow.
- [51:00]
A
But and to add to that, they were, they announced spot, Bitcoin and Ethereum and a few asset trading would come next year in Q2. And they just moved that up to this week.
- [51:09]
D
Week, Right. Oh, is that right?
- [51:11]
A
Yeah, so Yeah, I think October 17th.
- [51:14]
D
Yeah, the people, people are waking up to this debasement trade. And, and there's really, that's the other thing. There's really nobody in it. I mean, I've got this great chart, my quarterly that, you know, it was a survey by bank of America. It surveyed all money managers nationwide. I don't know if they got them all, but they got some big subset, probably representative. 42% have 0% allocation of gold. 20 plus percent have under 2% allocation of gold. So, you know, you're looking at $160 trillion stock market. You're looking at a $27 trillion gold market. It's really closer to 15 because a lot of that's antiquities and things that don't trade. And you know, basically 60% of the market, the equities in the US are not there. And so it doesn't take a lot of movement from those people. I mean, I mean, as an example, I mean, my fund is probably up 140% year to date. I haven't got my September numbers yet that, you know, the S P 500 is up 14, NASDAQ's up 18 year to date. I mean, how do all these, yeah, how do all these algorithmic traders look at that and say, holy, we don't have any of the best performing asset class in, in the world, you know, and, and they have to come after it. And that's why, that's why back to Mike's point, I mean, I'm very respectful of the fact that he's right. Generally when you get this kind of excitement, you're near a top. But I would suggest that, you know, there really is a sea change going on here. And nobody's been here, nobody is in this space. And so as people come into this space, you know, they're really going to, you know, chase this stuff for some time now. There will come a top, Mike. I don't disagree with that, but I don't think we're there yet.
- [52:47]
C
So let's, let's just address those Morgan Stanley brokers by showing one chart. The S&P 500 total return. I go back to 1926. This is the total return. So you used to get dividends. It's the same as Gold since 1997. So yeah, the brokers are making good money. I used to be a broker. I get it, I know what it is. But if you had just sat and bought gold at every dip and, or GLD or whatever, ETFs, same return as S P500, you got a lot less exp. And you're not making brokers money, you're making yourself money. So that's, that's the key thing. And it looks like it's rolling over.
- [53:20]
D
That's the thing. They don't make money selling gold. Just like they don't make much money selling bitcoin. You know, they're, they're in the stock selling business. And that's why they, you know, have the narrative. They have.
- [53:30]
B
There's. I mean it's the denominator, guys. It really is.
- [53:34]
D
I agree with you, Dave.
- [53:35]
B
It's. That's the only thing that matters. And, and all I'll say is this because I was just going on X and seeing the chatter. There are two massive forces that are, that are, are in play right now at this point in time in our, in our lives. AI and the denominator trade, or the debasement trade, whatever the hell you want to call it. Both of these matter. AI is going to drive corporate profits higher. Not all companies, that's for damn sure, but some will do extraordinarily well. There is an enormous change going on in terms of demand. I know of a lot of people, I was talking to people at conferences last week or the week before and there are people like, oh, you know, this AI stuff feels exactly like the Internet bubble, Global crossing and all these kind of. You have to be old to remember this, but there were all these infrastructure companies laying cables and booting up broadband. Just look at Cisco's market chat cap. You could bring that up and they were saying, hey, you know, the AI boom is the same as that. We're going to bet we're going to massively have over capacity.
- [54:37]
A
We are so fiber.
- [54:39]
B
Except for.
- [54:40]
A
Yeah, but, and to be fair, they were early, but that fiber all got used to eventually.
- [54:44]
B
But it took 20.
- [54:45]
D
Correct. The companies that built it went bankrupt.
- [54:47]
B
Right, right. But here's the thing. Right now the supply demand dynamics are totally different. Right. The amount of compute that is needed for the to. For just. For the. The big companies is more than double what can. What. What is being produced, which is Net. Was not true with the, with, with what was going on in fiber, it was like, oh, well, this demand's going to come. It's going to come. It's very different from the demand is here and we can't satisfy it. Those are very different scenarios. Now, does that mean that the entire market's going to do well? No, it doesn't. It means the people who are producing the stuff that's in demand is going to do well. But here's the problem with this. It's. It's going to be a lot like Peloton. Peloton. In the pandemic, everyone was buying pelotons, right? So you. The stock went like crazy and they thought it was sustainable. And what happened, happened. People got let out of their houses. It's like, oh, damn, my peloton's a coat rack. I don't need it. And all of a sudden, you can sell it. At some point, when all the models are trained to the point where all the old data is there, there will be. This demand will go up. It will peter out a bit. I mean, will it crash like peloton did? Probably not. But there it's going to get ahead of itself. It just isn't there now. And there's lots of really. You know, I've listened to multiple podcasters who, who, who actually been. Look, digging into this. It's different. So while that's happening, I think the stock market is in good shape. That doesn't. It's not the same thing as the. The bitcoin or gold trade. I think the bitcoin and gold trade is simple. We have double the number of dollars. Gold needs to be double the amount of price, and more people are less confident there. The fact that, understand what, what. What happens. The entire world was blithely ignorant about this notion of what is a dollar. You know, people looked at Larry as a lunatic and, you know, and now, now all of a sudden in the mainstream, we're starting to get into cognitive bias. People understanding that there's more dollars and there's more euros and there's more yen and there's more, you know, whatever. It doesn't really matter which other ones you go to. Everything but Swiss francs, who they devalue just to keep themselves afloat because they don't want their currency to be that strong. They like to be able to export stuff. That trade penetrating the public consciousness is not priced into any of these markets. That's why I think gold goes well beyond. You know what? I don't think these levels are high, actually. Even 5,000. I don't think is high. Although I do think the market will have a hell of a time getting through that. And we'll probably have a major correction between now and then. But I think it gets there. You know, that's why I said the same thing. But Bitcoin, if the people who are buying bitcoin as a percentage of bitcoin holders today is much more tilted in the direction that I'm talking about, most of the new money going into bitcoin are people playing the debasement trade. That's just a fact. That's where the ETFs are coming from. Those are, are people who look more like us spying into bitcoin.
- [57:45]
A
Check this out. Just in total spot Bitcoin ETF's trading volume surpasses 1 billion in the first, first 10 minutes of trading. Right?
- [57:51]
B
So that, that is happening at the same time as the entire crypto complex just got wrapped on the knuckles multiple times by, you know, a nun with a massive ruler. Some people getting it much worse. So the degen control over the, the market is getting less and less. That doesn't mean that it's, it's changing immediately, but as a, as a percentage is definitely changing. And that ultimately will allow Bitcoin to start making the transition. It will at some point, if Larry and I are right, transition from risk to be more like gold and less like the nasdaq. And maybe that NASDAQ because of the AI revolution for a couple years, if Paul Tudor Jones is right, that NASDAQ is trading more like bitcoin and gold than the other way around. But the truth is that the narratives are very, very different. And the narrative in bitcoin and gold is a pure narrative narrative.
- [58:46]
A
Right? And I tweeted something about this and there was some confusion. The new retail is not getting rinsed on hyper liquid using leverage. This is the same crypto natives gaining, losing and going player versus player against each other. The new retail woke up today and was like, ah, bitcoin's pretty cheap. And they bought a bunch of Bitcoin ETFs and they didn't know that after hours on Friday that we had a leverage flush across, across exchanges because they don't watch Binance charts and they've never heard of hyper liquid. And so the buyer of last resort or the base buyer at this point is a very different kind of retail than the retail we've talked about in crypto for all these years. They're just different people. They're normal people who want that 2 to 4% Morgan Stanley exposure and saw that Bitcoin's 114 when they woke up instead of 125.
- [59:36]
B
I mean, as a final.
- [59:37]
A
Yeah, go ahead.
- [59:38]
B
It is, it is. I'll tell you what's amazing thing I'm looking at at the Wall Street Journal under markets and finance right now, which used to the old C1 for those who are old and remember what the hell that means.
- [59:48]
D
I do.
- [59:49]
B
And we have first brands, we have, you know, energy stocks, China tariffs First, JP Morgan investing in companies, former bankers betting on flood insurance, biotech's rally behind the collapse of an auto parts giant. Nothing, not a whisper on the front page or even anywhere of the largest liquidation event in the history of crypto. That makes the chart. And, and do you have the, do you have the liquidation chart up? If you look at the liquidation chart, it's now a meaningless, it is literally an impossible chart to read. So if you look at total liquidations on Coinglass.com, you know the chart that shows the days, the bar is so big that the rest of the chart is unreadable because of the scale. Scroll down. Yeah, scroll down. Look at that. It is literally, it is so large it made the rest of the chart unreadable.
- [60:47]
A
And that these used to be big bars. Really big bars.
- [60:49]
B
Yeah, exactly. And so this was, was big. I mean it was in, in a one day, it dwarfed anything even that that happened in the FTX, you know, Saga and all that. Now there, 12 times wave, wave after wave of 40 selling in a market that had no other buyers. Here we had this massive flush that was so much bigger and the broad market doesn't care. Think about that. What is that telling you?
- [61:18]
A
It's telling you it's a different market, completely bifurcated. It's a completely different market.
- [61:23]
B
That's right. And that matters. And that, that does matter. So, you know, a lot of people are looking at this in the crypto side and saying, okay, what the hell happened? And as I said on crypto Town hall, we'll get into the details, but the truth is that from a bitcoin buyer perspective, part of what could have happened this morning was panic. People say, oh my God, the volatility is much higher than I thought and dumping. And they didn't. Now will they? Who knows? I mean, God, you know, I'm not, I don't have my crystal balls in the shop, but it certainly doesn't look like it. And you know, and all the technical analysts who are saying that this breaks it and you know, etc. Etc. That's just not going to be true. Now you know, Tom Lee is reassuring people, but Ethereum's chart looks more or less the same. I mean where did it go down to 3, 700 thereabouts? I don't know.
- [62:13]
A
Yeah. So it depends on. This is one of those days where exchanges could have a 10% right.
- [62:18]
B
And, and Frank. And it's one of the reasons why the, the single largest volume day in the history of coin routes was, was over this weekend. So yeah, for that reason, for those who don't know or haven't heard me talk about it, it's software that allows our clients to trade intelligently, knowing what's going on on all exchanges at the same time, among other things.
- [62:38]
A
By the way, Tom Lee bought 485 million in ETH on the correction. Greg Cardone added 300 Bitcoin. Michael Saylor, of course he would have bought regardless. But nobody's. The big names aren't flinchy at this and they're not stopping. I know that we got to go like momentarily. I just want to say that it's very interesting to me that no matter who we have come on these shows, the end game is always agreed upon. It's just the path that we have arguments about or which assets own. I mean even if you got Peter Schiff on here and you could get him to emotionally stop talking about bitcoin, I literally had an interview and I said Peter, we're not going to talk about bitcoin. We're going to talk about all the things we agree on. And he railed about bitcoin for an hour like he just can't stop. But if you got him on and you said hey, what do you think the future is with money printing and debasement? We would all agree on all the same things. Things. It's just everybody disagrees on which asset to own to protect against it down the road. It really, it's very interesting because the, the brightest minds, everyone we talk to, they all agree that eventually there's going to be a very, very big fire.
- [63:37]
C
Right?
- [63:38]
A
Yeah. So really interesting. Larry, thank you for joining today with you. Awesome. And guys, we will obviously I'll be back tomorrow. Dave and I will be on crypto Town hall in eight minutes. That that promise is to be relatively explosive. We'll dig into this a lot more and of course we'll be back next Monday. I think James will be back but Larry, you're welcome anytime. Oh, and he, he has three copies of his book back there. I tell you, I have one literally on my shelf. It's the only book there. You guys read the big print. Seriously.
- [64:03]
D
Thanks Scott. Appreciate that.
- [64:04]
A
And not just because. Not just because now Ken Griffin said to all right guys, that's all we got. We will see you tomorrow.
- [64:13]
C
Thanks.
- [64:13]
B
Bye.
- [64:13]
A
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