← The Wolf Of All Streets
The Wolf Of All Streets
Bitcoin & Stocks Crash, Gold Hits Record: How April 2 Tariffs Could Shake Crypto! | Macro Monday
01:02:25
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- [00:01]
Scott Melker
The Trump named Liberation Day for tariffs is coming on April 2 this week and markets seem to be holding their breath. As we know, markets hate uncertainty and we have uncertainty in spades right now as to what the direction will be, what will it mean for our beloved assets, stocks, crypto, bitcoin itself, and what is likely coming. We've got the best panel on this platform, Planet of Earth, Mike Mlone, Dave Weisberger and James Lavish to discuss right now on Macro Monday.
- [00:34]
Dave Weisberger
Let's do.
- [00:48]
Scott Melker
Let'S do what is up, everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel. Hit that like button for our three amazing guests here. Well, James just disappeared, but I'm assuming that he will be there. He is. Look, we got him. We got everybody here. And Mike, let's just start with the morning meeting man, because there is a lot to talk about this week in macro.
- [01:12]
Mike Mlone
Yeah, I really appreciate Anna's comments because she did work on the Trump's Council of Economic Advisors and she pointed out in 2000 she was focusing on tariffs. And she pointed out when she first started, when they first started, tariffs were 1.5%. Trump moved them up to 3% on average US tariffs, now they're around 4.5%. And her view is they're going to go up to 10 to 15% by end of the year. And she sees a lot of downside risks in the S&P 500 due to tariffs. So she addressed potential Fed put and Trump put and she doesn't think they're going to be until another 20 or 30% in the stock market. And for a Trump put, she said you basically just need to see manufacturing payrolls start to plummet. So overall she expects a payroll number this week to be decent, 200,000, 4.2% to kick up and doesn't really expect data weakness to kick in until the fourth quarter of this year, the week data. And she sees sentiment negative, pretty negative that way. Chris Crane, our technical guy, pointed out one thing that's really happening is we're seeing downward estimate revisions in earnings and 22 out of 26 industry groups. That's pretty serious. And it's been one of the In 20 years, one of the best years for lowval and worst years for momentum. And as he pointed out, in 20 years. So pretty significant shifts in sentiment in market stuff. From the morning meeting.
- [02:34]
Scott Melker
We have a bit of a interesting situation at the moment. I was going to bring it up, but I got to share the screen Better. But we have futures pretty massively down right now. This article now coming right on CNBC. Dow futures dropped 300 points as a jittery Wall street braces for Trump's tariff rollout. Right now the S and P futures are down over 1%. Nasdaq futures down 1.5%. Bitcoin's up since this morning when this started happening.
- [03:02]
Mike Mlone
Bitcoin's down about 2% from the same mark. You have to mark them Friday. So I bet right now is down about 2%.
- [03:08]
Scott Melker
Okay, that makes sense. So how big is this Liberation Day on April 2 that we have coming here? It seems like this is the thing that everybody is holding their breath for and nobody really knows what to expect because it changes on a day to day basis. I mean, James, what do you think is this kind of moment?
- [03:28]
James Lavish
Yeah, well, I mean it may give us a little bit of clarity, but look, we, we've seen Trump in this role before. It's just right now he just seems unyielding and what is he going to do on April 2nd? Like does he really lower the boom and, and, or is it just a starting point of negotiations and more uncertainty for, for weeks and weeks? It, it's possible we get either or so the market is starting to price in more uncertainty. That's it. Simple as that. And just like you know, Mike said, tariff uncertainty means that you have margin uncertainty, which means that you have, you know, like I think the big, one of the biggest problems that the, the US Market is seeing is that if you can't, you can't have capital investment in, in these companies unless you have clarity on, on what's going to happen with that capital investment. If you hold off on that, that just pushes out earnings. So that's, that's one of the big problems.
- [04:29]
Scott Melker
Dave.
- [04:31]
Dave Weisberger
I think that the real question and, and there's, there's a bunch of, of themes through this is will financialization come to an end and asset prices will go down at the same time as consumer, as consumer prices going up? Which is what happened when people, when the stimulus checks were given out to people, etc. And they saw it, they looked into the abyss and all the people on both parties and policymakers said this is an absolute disaster. We can't allow this to happen. Now why do I say this? Because gold at this price where we are 3,100 or so more or less is slightly outperforming the CPI, but pretty close. But still over the last few decades dramatically underperforming assets. And so the question really is will that unwind, unwinding. That has massive implications that are negative. And I honestly just don't think they're going to let that happen. It's really that straightforward. And because what does that mean? What does that look like? What that looks like financial assets, not just stocks, but all financial assets going down, banks going back to 10% of the S&P financials as opposed to 30 some odd percent, et cetera. It has very, very big implications. So when you look at this, that's what you need to understand or discuss. And the next question is, because all the bitcoiners in the world think that that's exactly what should happen. But instead of the beneficiary being gold, the beneficiary should be bitcoin. That's the bitcoin eat the financial sector narrative, which James and I kind of roll our eyeballs at when the bitcoiners talk about it, thinking that, well, maybe, but a lot of things have to happen along the way to get there. And so you have to look at what is actually going on. And what is actually going on is you have an administration that Mike has correctly pointed out wants to reboot American manufacturing full stop, that is willing to take consumer pain in order to do it full stop. Do they want to change anything else? Absolutely not. So the question is, can they navigate it and can Mark, will markets let them navigate it? And you know, I don't like words. I never like the words bond vigilantes. I don't like anything market vigilantes. I think markets do what markets do. And so if the markets tell them, listen, you keep doing this and, and we're going to keep dropping and you're going to be out of power in 15 or 16 months, then they're going to stop. And that's what they're worrying about. And so, you know, you've seen, you saw a couple weeks ago, you know, you could measure for whatever remark you were. Every time we get in bitcoin around these levels, it's, there's buyers now because there's buyers, because the same people who believe that bitcoin is a better version or will be a better version of gold globally are the ones who are sitting here buying. And that's why you could say it's trading with risk assets and it is trading with risk assets to a point. But the bid has been here. We were talking three weeks ago, Bitcoin was $4,000 cheaper than we are today. And we did it two weeks in a row. So it's important to understand now, at the same time, Crypto X Bitcoin is getting hammered and Crypto X Bitcoin is trading with beta to the downside of the nasdaq. I mean, the S and P, the bitcoin beta has vanished, but that's not surprising because it really never made any sense. But when you look at Solana and Chainlink and all of the stuff that people say, oh, these are good cryptos, forget the crap. The beta is certainly every tick down in the NASDAQ is multiple ticks down in those things. And we have seen that over the last week. But that's because it should trade differently. So bitcoin dominance. I have, I was looking this morning, I didn't see your measure of it, Scott, but I'm g. I'm going to bet it's pretty damn high. X stable coins, I think it's 60.
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Scott Melker
I think, I think it had just. Yeah, I think it had just made a new cycle high once again.
- [08:41]
Dave Weisberger
Right. And that's, that makes sense because they're, they're, they're not. Yes, they trade together in a sense because the crypto community has been selling bitcoin and basically selling whatever they can because there are people who are panicking and that happens. But the what the great washing machine, I keep calling it, of people who look like us either sitting here, no hair, gray beards, whatever, we're the ones buying. We're the ones buying. Not buying Ethereum, not buying altcoins, buying Bitcoin. And that is, that is clearly what's been going on. And so we see it so as a macro show, we need to understand what are the macro things. So you know that that all matters. It's also worth pointing out over the last week that the battle lines are very, very clear in what is a seismic battle in the regulatory space in stablecoins. Now, why and why do I mention that in a macro show? Well, because the seismic battle is should fractional reserve banking be supported by government regulations and to protect them from competition? It is no less than that. Kirsten Gillibrand said the quiet part out loud over the weekend. It's like, well, I don't know if we let yields on stablecoins, it gets eerily similar. And you can look, it's exactly the same thing when the money market funds came out earlier. Why does this matter? Because at the time money market funds came out, there was genuine fear that the only way people could get mortgages and small businesses could get loans when they're saving and loan were from banks. Because that's where all capital was pooled. We have this thing called the Internet and it's changed the ability to source funds rather dramatically. And this matters because if stable coins are allowed to give yield, which of course they should be, otherwise you're hurting consumers, then you're going to see a move away from a risky fractional reserve banking system towards a system that is more fully collateralized with, with using the speed of information that we have on the Internet. And that seismic shift will have huge implications to macro assets as well. So I, I just think it's worth talking about, but I think we should probably start today. As I said it before, James, you were talking about the basis trade this weekend. I think you should explain that too, because that's a very big deal.
- [10:54]
Scott Melker
I have that up here.
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Dave Weisberger
Go ahead.
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James Lavish
Yeah, so the basis trade, this people, it started talking about last week about how Brookings Institution, the Institute was institution, I guess it's called what was looking at ways to, for the Fed to prepare itself and have tools to deal with a sharp sell off like we saw and you know, like a, a rate spike like we saw back in 2019 when we've discussed this before, when there was a liquidity crunch for dollars and, and the treasury market was hit hard and the overnight repo rate spiked, I believe it was up over 7%, Dave, in one night. It was crazy. And so the, the Fed had to come in and rescue the, the, the bond market, the treasury market. And they did that through straight qe. And that's that little bump you always see in that QE line of, of the Fed assets, The, the assets that are on the Fed's books. It started rising. It was decreasing, decreasing, decreasing all the way into 2019 fall. And then it started, and there was a bump where it started rising before 2020, before the lockdowns, before we had that massive liquidity. It's because of the repo spike. And what had happened is there was, there was a liquidity problem. So the basis trade is where hedge funds will go long U. S Treasuries and then they'll short the futures a similar treasury duration against it. And there's a little bit of, there's a little bit of arbitrage there, you know, maybe 5 to 20 basis points, whatever it may be, at the absolute most. It's, it's usually just, it's a few basis points, it's not a lot. And so what they do though is they'll, they'll borrow heavily in the repo market to do it. They'll buy the treasury and, and then borrow against it in the repo market in order to create this trade. And it's a tiny little spread. And then. So what does that mean? Well, it means that in order for them to really make it worth their while and make profit on it, they have to lever it. And so they're levering these things 10, 20, 50x, you know, 50 times. And that leverage is what's dangerous. Okay, why does it all matter? It all matters because if you have another repo spike like we saw, this trade could blow up, and there would be massive unwind of these trades and a massive hit to the repo market, which means that there would be another spike in the repo rates and there would be illiquidity in ultimately the treasury market. And this scares the. The, you know, the bejesus out of the Fed and the treasury and there. And so much so that the Brookings Institution is looking at ways for them to mitigate this risk. And one of the ways they're talking about, and the, the most insane thing that I think I've ever heard in my financial life is they're talking about taking these trades right off the hedge fund books and putting on the hedged basis trade themselves. So instead of doing qe, instead of doing straight qe, where they just print money and, and buy those bonds in the market, they're literally going to take these, these trades off the books. Now everybody can say, well, wait, wait, wait, this is the Brookings Institution. This is not the Fed saying this. And that's true, but the Brookings Institution is really just a research arm of the Fed. I mean, it. They have done a lot of policy work. And, you know, both Mike and Dave know this. They've. They've implemented plenty of policy that came out of the Brookings Institute. So this is not something that's isolated. Fed knows about it, and they're quietly looking at ways that they can mitigate this. And this is one of the ways. They're talking about literally taking the trades off the hedge fund books and backstopping it completely and putting on their own books and that way. And the Brookings institutions, their. Their rationalization of this would be, is that, well, this takes risk off the Fed's books because as these trades move up and down, they're hedged. So it's even better. So, I mean, it's like the epitome of qe, not qe. And this is where our, this is where we are in the, in the, you know, the life cycle of the leverage system. We are so leveraged and so scared that a few big hedge funds could blow up and take down the entire market that we're talking about creating a special tool and backstop in order to prevent that. And that's, and that's just in my mind, it's pretty significant.
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Scott Melker
Anyone want to comment on that?
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Mike Mlone
I wanted to point out one thing. I remember. In 1998, right before long Term Capital Management blew up, some of us with real money were able to nail that trade partly by trading on the money calls and Eurodollar options. Because every single dime the, remember the Fed was, it was tightening back then. But these, all the money calls, all the money just kept tickling down. I'm like, something's going on here. I remember buying some with customers and they're expiring worthless. And then finally I'm going to hit we got 10 X's. And that to me is what I see potentially is what, what James just described. If that's the case, you stick with the things I've been looking at, and that's long, long bond futures and the gold. And I want to tilt over some of the macro to, to point in that, what Dave even mentioned. If you can just show my screen real quick, the biggest macro I think is happening in the US Stock market. And I show that on my screen a little bit. I'll show you anytime you get the, The S&P 500 that, I'm sorry, the price of gold divided by S&P 500 go above its 50.5 threshold. I don't know if you can show that, Scott. Okay, we've just did that the last single specific time. We really did it in 72 and then 2008. And we started doing it recently. But we've got distorted by the pandemic and biggest money pump in history. Now we're doing again this big trade here. It's got to, if it doesn't stop, there's a problem. And all this doing is reverting also. And the main reason it's doing it is because just the stock market cap to GDP, it's just bottoming or peaking at 2 bucks or 2 times 2x. I mean, that's only happened a few times in history in different countries. And I want to put that into the shorter term. What's happening? We're seeing bitcoin roll over at 100,000. At the same time Gold ETFs. We've had outflows from Gold ETFs for four years in a row. That's shifting that's pretty darn significant to me. That's the macro that's kicking in. Is that going to shift? Sure. The number one prerequisite for that is the US Stock market has to go up and it's potentially going down. You know, demand estimate, earnings estimate reversions are all tilting lower. We just get a normal 20, 30% correction. That gives us a 50, 60% correction in Bitcoin. Not a big deal. But I want to keep tilt over to what we've talked about. Dave mentioned too early. This to me is one of the most significant thing that I think that's happening in cryptos. One thing about cryptos is there awesome for trading now I don't trade anymore, but I just watch them like, oh, I look at things that would happen. Like last week again when XRP bumped up flipping the total market cap of tether for a couple days, that was a sell signal again for all cryptos. It did it again. To me. The next big flipping is when tether flippings ether, meaning it becomes the second most significant stock market or crypto in terms of market cap. And that would happen around 1200 and an ether. I don't see what stops ether or ethereum from going there. We see it. It's a sell rallies market. It's failed at 2000 and we all know it's just part of that massive amount of the keyboard. I've been changed. I started using this and why I'm still quite really bullish. Gold is there's only four precious metals, but bitcoin used to have just one. Now it has millions of dependents. Now, I think Dave's right. Bitcoin can go up and the rest of them can tilt down. But if bitcoin goes down, they all go down harder. And to me, that's the key thing that's kicking in in all this market in terms of. And it's just unstoppable right now. It's the thing that's just shifted. Also, there's one key trade we point out last week. I think this is a short because I probably would have been stopped out. Copper. If you talk about basis, it's not so much basis, it's just our. This is LME traded copper. It's the widest spread ever. This is CME traded copper versus LME because of risks of LME, copper is equivalent of US copper around $4.40 a pound and US copper is above $5. That's never happened. And it's because of the risk of tariffs which haven't been implemented yet on copper and which are still in exploratory stage, we've already priced for about 20%. What does that mean? There's a trade there and it's just a question of if you can put it on before it gets stopped. So I see the tilt all heading that way and I want to see what shifts it. Now, right here we are Monday morning again. We beat up stocks on the Monday morning. But the key thing I want to point out about what's happening here is this is a shift in the post World War order, World War II order. Remember, Mr. Trump did not get elected by the rich people who own property and stock market. He got elected by the populace, the people who earn wages. If he can come to that a year or two before the midterms and say, hey, I lowered the price of your mortgages, I lowered the price of gas, by the way, most of them drive F150 pickup trucks. I used to have a pickup truck. They care about the price of gas more than they care about the stock market. Typically that is win win. This is what's happening to me. This is, and the main way to get everything to go lower, to make the average person in this country who is the most expensive, it's most difficult ever to buy a home. To go lower is part of it is stock market tilting lower and say, oh, by the way, see all this jobs coming back. This to me is what's happening and it's right now just early days. We just have, how do you trade it? So I think I'll end with this. I think the risk acid bear market started on January 20th and is accelerating from 100,000 bitcoin. Now bitcoin should outperform all those, all its million of dependents. But it's still, I think if, if I'm right and we're, we're right about certainly me about the S&P 500 just having a normal 1/3 correction. That means 60 to 70% for Bitcoin, 90 for other cryptos.
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James Lavish
I think you're, I think you're discounting Mike and I, I hear everything you're saying and I've been saying that bitcoin's been the tip of the risk spear for a long time and it has been. But I think you're discounting just the sheer amount of people who are, who are starting to understand bitcoin, that it is a better version of gold. And so if you bring that chart back up of gold versus bitcoin that you had, and this is what's important about this is that you can see that bitcoin, if you look at it, you just, if you can just squint your eyes and pull out the volatility, those, those blow off peaks, okay. And you just imagine a curved line from that left side all the way up to the right side. And the curved line of adoption of bitcoin, it's not, this is just imagine right through the middle of all of that. Okay? So it's not, it's not. You don't have the peaks and you don't have the valleys. It's just a curved line all the way up through the middle. That, that's the adoption of bitcoin and that's people understanding that this has a greater value than gold in many ways. And I hear you, that gold can be worn on your, on your, your neck and your wrist and your, and you've got it in your watches and all that. And it does have some, it absolutely has, you know, use cases and utility, but bitcoin does too. And the base layer of bitcoin has utility that people are starting to understand and that this adoption is what's giving the floor that you're seeing here. And so when Dave talks about we're seeing a massive amount of buying in the, in the eighty thousand dollar level, that's mind blowing because you're talking about massive buying of a, of an asset that's become $1.8 trillion, 1.75 or whatever it is right now. And this is, this is not going away. And so the question is, where is that bottom? And I, here's where you and I greatly differ. Do I expect volatility in this adoption phase to continue? Yes, I fully do. But do I expect volatility of 70 or 80% down from here? No, I do not. I think that's, that's absolutely ludicrous with the amount of people, the number of people who now understand this. And we'll be standing there waiting to take advantage of these, these price movements and the volatility, if you have a 30 or 40 drop, a drawdown in the S P from here, sure, all bets are off because that's catastrophic for the entire financial market. We are so financialized that we would go into depression here. So my contention is that they won't even allow that because they know and the they is the Fed and the treasury and it's the money printer because they know that there's no way that we could pull out of that.
- [23:31]
Mike Mlone
So my point is, part of that is what helps Trump get elected and Helps push things up for the midterms. The key thing I want to point out, as Dave always points out all the time, is leveraged. What you're seeing from people like Strategy or MicroStrategy and GameStop is they are borrowing and issuing securities and borrowing money to buy more Bitcoin. This is the essence of the wrong thing to do when you have had massive price appreciation. So that's the key thing I'll point out. I've always said Bitcoin has the final diminishing supply and increasing demand and adoption. Now the point is it's so leverage long. It happens. It's if, if you ignore the rules of human nature in bull markets, maybe it's okay. That's what I think you're doing. You're missing how leverage this is and how the wrong example people like him are giving to the rest of the world. We're buying one asset and leveraging it up. I heard this from one of my friend's sons who was 30 who said, yeah, I've got 80% of my net worth in, in Ripple. I'm like, that's insane. I mean, good luck. I just remember learning in the training, this, this, this. My point is we're so over leveraged now, we're deleveraging the system and I do expect that. I think I pointed out we're not going to. We don't have a Fed put and we have the most significant fiscal bell tightening ever. What's really pushed up risk assets for the last 10 years. So to me, all that's shifting. We've only had a 10% correction. So here's the next test for bitcoin. The next 10% in the S&P 500. If bitcoin only goes down 20%, that's a great sign.
- [24:56]
Dave Weisberger
Okay, so, okay, you go first. James, go ahead.
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James Lavish
Well, I mean the, the whole, the whole notion of, of microstrategy being over levered is just, it's just problematic and it's incorrect. MicroStrategy currently has $41 billion of Bitcoin on its balance sheet. $41 billion and $7 billion of debt. 7.3 billion I think it is. Or maybe, maybe it's a little bit, actually it's a little bit more. They've done, they've done more since the end of the year. The, the notion that they are over levered is just incorrect there. You don't have. This debt is, is stairstepped very carefully in both price and time. And so it's not going to all mature at the same date it's going to mature years and years out. And so the, the Bitcoin would have to drop so catastrophically that there would be no buyers left for, for them to get into a leverage problem. That's, it's just incorrect. And the, the main reason for that Mike, is that because of the volatility of the underlying asset, they don't have to pay any yield for that debt. There it is. The, the only thing it costs them is the volatility in the market which the market provides for them. That's the, that's literally the price of this, of this asset. And that's, that's how they've monetized it.
- [26:21]
Dave Weisberger
Right. And if you look at GameStop with over $4 billion in cash by, unless, unless we follow. It's actually 6 now, Dave. Right.
- [26:31]
James Lavish
Because they did $1.3 billion on Friday.
- [26:34]
Dave Weisberger
Right. So how much Bitcoin will they buy? My guess is not 6 billion and you know, we'll see. So it's, it, the, the part that, that you said which is really important about leverage is exactly why we've been bottoming since 70, since we've touched 77 and 78, 000 now and we've been going on it for three weeks. Because there is no leverage in the system on the long side. There isn't any. Futures are not at a premium. The perpetual swaps have been trading perpetually at cheaper funding rates where they have to, they have to get people, they have to pay people or certainly pay less people less than average in order to go long. There is no leverage. What we see at tops is exactly the opposite. And it's, it's, and that goes on for a while. I mean, you know, when we get these roiling bull markets, you see leverage dramatically higher than this. I mean dramatically. And so yes, you're right. If I was seeing a lot of leverage I would agree with you. But the point is we're not. Now as far as the idiots who put all their net worth in shitcoins, I mean look, you can do whatever you're going to do. I mean I made a tongue in cheek comment to Peter Brandt who said okay, XRP, if it can't hold two, is looking really horrible. Technically. I made the point about XRP, which is your, your catalyst for XRP to go higher and not the higher that people are talking about. I mean Patrick, Ben David is just, his statements are so irresponsible. It's, it's, it's, it's, it's almost hard to to to fathom. But the catalyst for XRP is if and when there's real adoption on real financing things that have real total addressable market. It's nice that you can use XRP to help Africa. It's nice that you can use cross border payments in third world countries. But the amount of demand for XRP that that creates is vanishingly small relative to the market cap.
- [28:38]
Scott Melker
Stable and stablecoins.
- [28:41]
Dave Weisberger
XRP is not a stable coin anymore because it's not stable. It was.
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Scott Melker
No, I'm just saying that I think that for Bitcoin as well. There's nothing against xrp, but the cross border payments argument is been usurped by stable coins. Who would ever send something that's volatile where they can send something that's pegged to the dollar which is.
- [28:59]
Mike Mlone
There you go. Why do you need a token for something that's highly volatile and you can use a stablecoin.
- [29:04]
Dave Weisberger
Right? So, so the, the use case is is real if it manifests and if it doesn't manifest, it's not real. And that is true for most of crypto when it comes to Ethereum. I want to make a point here.
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Scott Melker
Right, but Dave, really quickly, that's something you put 1 to 2% of your portfolio in because it may be an option as you would say on its own future adoption. You don't put 80% of your net worth in something that maybe is going to do something maybe one day.
- [29:30]
Dave Weisberger
And in point of fact, yes you have. You have gotten crawled inside my head and said okay Dave, what are you doing with this stuff? And that's exactly right. And I have a bigger bet on Solana for the same reason. Not because of meme coins, but because it has proven to be a pretty solid technological platform that could be used for trading things. And I know there are people who say the same thing about aptos, I know people who say the same thing about Sui, etc.
- [29:58]
Mike Mlone
Etc.
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Dave Weisberger
But none of these things are anything more than speculative bets on the Internet of value accelerating and the need for those tokens. Whereas Bitcoin is a very different thing and that's why it matters. Now a word about Ethereum because it needs to be said. I was pissed and at the time, but I kept my politics out of it. I thought that, that when Ethereum decided to go proof of stake it was going to get crushed. And I'm not right, wasn't wrong. I mean I sold most of my Ethereum for Solana back at the time it looked bad. And from a trade perspective, who knows how it will be, but long term. Here's why. So at the narrative, which is the same narrative as Mike's gold narrative, was that proof of work used tons of electricity and had no value. And so Chris Larson and others were trying to get Bitcoin to change when Ethereum changed to proof of stake. But proof of stake essentially is just massive centralization of the chain. And yet proof of work, we now have definitive evidence. You don't even hear Elizabeth Warren talking about it anymore. That bitcoin mining, proof of work mining can be used to stabilize grids. We've seen it. It incentivizes production of energy which would otherwise be unproducible from monetary point of view, which includes lots of sustainable and renewable energy. It also includes dispersed energy. So you can't build plants in Africa. One of the reasons Africa has huge problems with their water supply and their power is because it's not economical to do big energy projects there. Because the geographic and topological, topographical, whatever the topography of the land makes it really hard. But with bitcoin mining, they're now able to do that. And people are seeing that bitcoin is back. It's not just backed by energy, it effectively is energy. It translates energy into value. And that is something that matters. So bitcoin versus Ethereum has a lot farther to go in my point. I mean, Ethereum would need to be adopted by the entire, you know, by Tradfi, and be the winning chain. Right. You know, in the whole RWA thing. And it's not entirely clear that's going to happen.
- [32:09]
Scott Melker
Yeah, you just made a similar. This echoes the point we were talking about from Mike being all in any coin, not only, as you said, are you betting on the adoption of crypto as Internet of Value. You're choosing one of hundreds of them to be the winner in that battle for adoption of the Internet of value. And that is an extremely difficult value proposition. I want to point something out, all this bluster about Trump's tariffs and volatility and pain and the stock market, because Mike likes to point out that we should get a much larger reversion. What was the S and P down in the first quarter? 2.5%. I mean, total from open to close. And I brought up the chart of how far bitcoin is down and how poorly it performed. I mean, I keep getting between the screens here. This was the worst quarter in Bitcoin since 2018, worst first quarter. And this is supposed to be the good quarter of the four year cycle, right? And actually, historically, Q2 ain't that really that great in the good years? That's kind of the bad quarter. So we've definitely departed, I think from the four year cycle, at least in this regard. But Mike, even further evidence, right? So if the S and p is down two and a half, Bitcoin was down 11.6. Ethereum was down 45.7%.
- [33:28]
Mike Mlone
Yeah, it's going to a thousand. Unfortunately that to me, Ethereum's been great for tactical indicators. So like I said, as an ex trader I just like, oh man, I'd be trading this or that. And I'm glad I don't because it takes away your intellectual stimulation and property and it makes me lose money anyhow. So I just learned that lesson the hard way. But I don't see what stops it from flipping with tether. And there's a good reason for the fundamental good reason is we're all seeing what's happening with the new Trump administration finding out this technology is awesome for tokenization. Why do we need highly speculative, you know, tokens that gone up millions of times and made a lot of people rich? That's the lessons I'm pointing out. We're missing the essence of human nature here. And what's happening is anybody who's buying bitcoin now is finding out the hard way they have as Dave loves to hate, to hate to say that you don't like it, but it's leveraged beta. It's been trading like leverage beta and it's doing it more. Maybe it's doing less so than less to cryptos, but just pointing out is corrected 30% s and P5 is correct at 10%. What's the next 10% s and P500. That's going to be the tell. I think it'll drop another 30% for Bitcoin. Why shouldn't it? It's been doing that way and we reach parity and ETFs with gold and Bitcoin ETF. So to me it's the key thing that's, that's, it's, it's, it's the rollover now we're at that early stage of people. Let me finish. Right. That early stage of the biggest bull market is most of people, you know who've only been trading for 20 years is, is just ending. That's US stock market. Since the global and world is like, all right, we know Trump is great for America, but we don't like the guy. We're out of getting out of America. We're selling U.S. stocks in every uptake. We're selling the dollar an uptick. It's what you're seeing now what shifts that it's going to take lower prices, the low price cure. And we're looking for that. That, that put. I'd say it's not even close. And that's my point is what's the best leading indicator in planet Broad? Cryptos and bitcoin may be outperformed but they're all heading lower right now. What stops that? I just. To me the trend is just getting started.
- [35:18]
Scott Melker
Go ahead, Dave.
- [35:22]
Dave Weisberger
All the talk about beta misses the actual narrative. So what was bitcoin up from November 5th to the peak?
- [35:32]
Scott Melker
From November 5th to the peak it was like almost 50%.
- [35:36]
Dave Weisberger
Right?
- [35:36]
Scott Melker
Almost double. Well no, it was in the 60s.
- [35:39]
Dave Weisberger
Right.
- [35:39]
Scott Melker
I guess it depends on where you.
- [35:40]
Dave Weisberger
Yeah, right.
- [35:41]
Mike Mlone
72, about 110 was the peak.
- [35:43]
Dave Weisberger
Right. What did the S and p do from November 5th to its peak?
- [35:47]
Mike Mlone
It's. It's leveraged beta on the way up and on a way down it's less so because it can't go below zero.
- [35:52]
Dave Weisberger
Yeah, I mean it looks that way.
- [35:54]
Mike Mlone
That's true. I mean it's just the way it is.
- [35:56]
Dave Weisberger
I mean leverage beta. Beta means that people were buying bitcoin as a play on the S P. They would buy bitcoin because Trump wanted is talking about making a strategic bitcoin reserve and it was bitcoin specific news. It's like comparing bitcoin to the S and P as leverage. Beta is. It's. If you hedge your portfolio like that, you'd be out of a job. You just can't do it. You can't. They're not the same. It's not. People bought the S and P when Trump got elected and said ah, he's not going to do the adult. He's not going to do all this tariff stuff. He's going to do this other stuff and he's going to cut taxes and cut regulation. That's going to be good for companies. Honestly, the trade there is go along the Russell versus the, versus the S and P. But the Russell has not outperformed the S and P. In fact today it's down even more. Right? Yeah. Isn't it? Yeah. Russell's down 2%. Why do I say that the Russell are the smaller companies, many of which might reshore haven't been able to do as much on off on shoring and that's where you would expect the growth to be if in fact you re you reboot American manufacturing. So by the way and Just, just to be clear, I ran a multi. Well, a very large book at Two Sigma for many years and we used 15 different forms of beta, we call them factors, to hedge our overall portfolio. And I can tell you that size Russell versus S&P is very, very important and is incredibly unstable. Beta from individual assets is ludicrously unstable. And that's the reason. The reason I pointed out no one. I think you are in a camp of a single human being on the planet that I talked to who thinks that the reason Bitcoin outperformed the S and P from November 5 into February was because of leverage.
- [37:45]
Mike Mlone
Beta never said that everybody. Trump got elected. The world changed on November 5th because, you know. So don't, don't. No one's ever said that.
- [37:53]
Dave Weisberger
No, no, no, no.
- [37:54]
Mike Mlone
The point is people bought into it, they leveraged up, and now they're getting stopped out.
- [37:59]
Dave Weisberger
Well, okay, so here's what did happen. So let's be clear. Two things. What did he do and what did people do? What he did is he made Bitcoin investable for institutions. It has yet to kick in, but he did that. He called. He got Bitcoin to be called a strategic reserve asset. That matters. And every single firm.
- [38:21]
Scott Melker
I think, I think that the ETFs made it investable for institutions. To be fair.
- [38:25]
Dave Weisberger
Yes, they did. It's one thing to technically, but it.
- [38:28]
James Lavish
Took some of the. Took some.
- [38:30]
Scott Melker
I'm not disagreeing.
- [38:31]
James Lavish
I think is what Dave is saying that is correctly.
- [38:34]
Dave Weisberger
Right.
- [38:34]
Mike Mlone
So let's just talk about the.
- [38:36]
Dave Weisberger
No, hold on, hold on. Let's just. Let's just finish the. Finish the point. So he did that. What did happen, however, were people in crypto went nuts. You're right. They levered on the upside and then they got their asses handed to them and got liquidated. And you were right about that. That liquidation was over on the first liquidation cascade down into below 80. It then has been bouncing around since then, ever since, quite stably as more and more crypto people selling to pay for their taxes for last year, which is pretty much done now. No one and no, no rational human being goes into April with tax liabilities that they haven't sold for. So that is what's going point and that. And so that we've had that. And so that's been.
- [39:21]
Scott Melker
Dave, we got your fire alarm going off. So we got your fire alarm going off. So now's a great time to let Mike jump in. Go ahead.
- [39:27]
Mike Mlone
No, that's not fair to mute Dave. I love when Dave rants It's not fair to me. But I'll point out he did say.
- [39:32]
Scott Melker
He was getting the test at some point during this hour.
- [39:36]
Mike Mlone
Your rents are great, you educate us, clearly. And it's a good point. Tax law, not selling, but tax. You pay your taxes, you sell some assets. So he's been happening this time of year. But I, I, if I can show my screen, I want to show that bitcoin gold ratio, it's heading lower. I think it's going to go lower. I mean obviously I was early, might have got stopped out, but 40 was the peak. It's at 26 now. What stops it from going back to 10? And that part is, I'm just overlaying that with the S&P 500 divided by its 200 day moving average. It's just finally broke below it. Finally. After you had such a long stand period, it's going to have to get cheap. Typically cheap is 10% below its or 10 to 20% below its 200 day mover average. This way it's always worked. At least it used to work. The point is we have flipped the switch. This is an inflection point. I think we're going to tell our grandkids about the election of President Trump and the amount of optimism is going to only go one way. It's always the way it's worked. And the fact he's already thinking about a third term means the guy is getting a little delusional. How markets always work with sentiment for a human being who's in power and how great he made cryptos upon it. I think he picked prick the peak. It was a bit of a Faustian bargain, got him elected and so far everything's tilting that way. I'm waiting for signs for the opposite. I look at ethereum, stay above 2, 2 grand, I'll see it. Look at Bitcoin, stay above 90 grand, it'll make points. They don't make sense. Maybe the S&P 500 staying above its 200 average. 200 day moving average. Give me that, give me that. Oomph. I'm not seeing it. Maybe gold dropping below three grand. Give me that. Otherwise I stick with that. I think goal is going to be the best performing assets along with T bonds for quite a long time as we get a normal reversion of highly speculative, excessively priced risk assets. That's where it's tilting. Show me signs of otherwise. Like Dave keeps saying, buy a bitcoin. Like okay, show me. It's a lesson I learned in trading is show me at least get me above resistance. Starting with Ethereum at 2 grand. Now it's heading to 1 grand. It's just I don't see the signs yet. All I see is people selling rallies and the world getting out of the.
- [41:31]
James Lavish
U.S. i see, I see a sign, the bond market. If you and you can pull this up. I shared this and this is the chart that everybody loves. This, it's, it's your, it's Bloomberg's chart here. This isn't, this is significant. What we see here is that we had just a week ago this was like a 2.5, 2.3, something like that. Right. Cuts. If, if I remember correctly Dave and Mike I think but over the last week we now have, this is showing that we have over three full cuts in the fed funds rate going into December. And so we've basically added a cut in the last few days. Why is that? Well, is it because of tariffs? No. Is it because of uncertainty? Yes. Is it because of worries of stagflation? Yeah, it's because worries that this economy is rolling over. The Fed's gonna have to stop or start dropping the, the rates pretty soon. And that's the question. And so you're seeing in the bond market now if you pull up the ten year. What, what? Yeah, this is, this is what's interesting is it's stuck here 4.2%. Right. So let's see that 10 year, let's see if it comes down under 4%, Mike. And, and let then let's see what happens with risk assets. That's because the bond market is the tell in my opinion.
- [42:57]
Mike Mlone
And that's where the, the Trump and Bassett put is in the bond market. They want yields lower. I'm not messing with them.
- [43:06]
James Lavish
Right. And they want yields lower. Exactly. They want.
- [43:11]
Mike Mlone
So they're going to go lower. But the number one way to make lowers yields go lower is the stock market has to give up some of its gains. It added $12 trillion of market cap last year, the most ever. It elevated inflation. The Fed put is done. Now you pointed out a cut. Here's the key thing that's going to happen when the Fed actually has to cut. They almost usually don't go 25 basis points as you know how that works. They go 50, they cut a lot because they need to. To me that's the next big trade and it's just what's going to be the trigger. If we have more stock market drop another 10, maybe they start thinking about easing. But right now their put's not there.
- [43:45]
James Lavish
This Is what's so key Right here is what you said, Mike, is what's the trigger? Is it a slow grind lower? Because this was the fastest drop of 10 that we've seen in, in decades, if not ever. Right. It's one of the fastest drops ever in. In from the S P. It moved down 10 very rapidly. So it goes down 10, another 10 in the same. In the same fashion. What triggered it? And if it's because of some, some sort of credit event, this V recovery is going to blow your face off. Like it's going to be so quick that they can.
- [44:19]
Mike Mlone
You're missing. We had that already. We learned that lesson. We learned the lesson of a V recovery. Massive liquidity, most ever fiscal monetary and we cover it and we got inflation. We've already learned the lesson the hard way. And now we got prices so high, like 2 times GDP. We've never been this high. Of course, some of us have been around more than 100 years. We've seen it in Japan. We've seen it in US in the 1930s. We seen it in China 10, 20 years ago. And look what's happening. They're all deflating and trying to start to recover. I mean Japan's recovering a little bit. My point is it's our turn. And the Trump.
- [44:52]
James Lavish
You think the central bankers at the Fed understand that excess liquidity is problematic?
- [45:00]
Mike Mlone
Absolutely. That's why they had to stop easing. Because they eased. They threw punch, they threw alcohol in the punch bowl when the mark was on a rally. They've had to stop easing. They will ease, but the point is get through the first iteration. The first iteration is what's going to take for the next years. It'd be wonderful if we just stay like this and might grind lower and have the Vix stay around 20% and stock market go down easy. That's great, but it's usually not how it works.
- [45:21]
James Lavish
But Mike, you heard what, what? You heard what I wrote about this weekend. And I'm not saying I'm right on this. This is my opinion on this. It has a lot of facts in it. But the, the fact that the Fed is even considering, or their, their research arm is considering, all right, that I'm. It's a tacit connection but you know, they are linked that they're considering taking the, this basis trade off books of hedge funds. It's even a thought in their minds that this is what I'm talking about. That's a backstop, that even. That's QE without qe.
- [45:56]
Mike Mlone
So what's about A backstop. The ball has to hit the backstop first. Means the catcher misses it. Those of us who played baseball, that's my point, you got to have the market hit that backstop to trigger that. We're not even near that. We're at the point where if the ball's heading that way, the catcher hasn't missed it yet. It's got it. That's the trade. And it's happening now. And it's down another 1%. SMB 500. Probably bounce from there.
- [46:17]
James Lavish
But what do you think?
- [46:18]
Mike Mlone
The next trade?
- [46:18]
James Lavish
Maybe 20 is it? Okay, I hear you, I hear you, I hear you. But here's my point is where do markets go when they turn around and they, if they, if this does happen and they do turn around, something happens in the, in the repo market and they turn around and take these trades off the hedge funds books and they don't. They, they, they found a way not to pour more liquidity into the market. What happens to markets? Do they draw down 30% or does that backstop them before that even happens?
- [46:47]
Mike Mlone
It's aft. That's my point. It's after the 30 backup. First things first. First iteration, down 30%, then you get the backstop and then you recover. We're on the way down right now, and we're not at a backstop stage. Okay.
- [47:01]
Scott Melker
Goldman today said 35% chance of inflation, by the way. And their economists here as that article that I brought up before saying they see now more cuts, which obviously supports what James was saying before. And we're looking at likely July, September and November.
- [47:17]
Mike Mlone
And what you've seen from Goldman, two downward estimate revisions in GDP growth s and P500 in earnings. That's a trend that's just getting started.
- [47:26]
James Lavish
And you're hearing how to make, you're hearing out of Jamie warning Trump not to, not to crush the, the stock market in the economy with these, these tariffs. That's what you're hearing the other side. You're hearing shots over the bow. Exactly. That's, that's what this is. Goldman and JP Morgan are warning the government. They're jawboning. That's right. They're jawboning and warning the government, hey, you do not want to do this, I'm telling you. And so Trump, you know, that's the question, does he blink or not? And April 2nd, it's an indication who's not blinking.
- [47:58]
Dave Weisberger
So, so I want to point one thing out because Mike went on his, his Bitcoin gold ratio. If you overlaid on that chart, the Bitcoin hash rate, you need to understand. No, don't. You could, you could laugh as much as you want but the bitcoin hash rate is literally at an all time high. It is 5x where it was when the bitcoin gold ratio was was last down in at 20 or so. And understand that if gold is backed because if people buy gold because they like it for jewelry as opposed to monetary asset, Bitcoin is backed by energy and what it can do in the energy sector. And it is non trivial in the extreme to look at bitcoin gold ratio without understanding that all the smart money and all the capital investment that's gone on to creating that hash rate, it is absolutely insane to ignore it. And yet it, you know, when you look at technicals it would almost be because remember the bitcoin price is not elastic to supply. Whereas with gold, if gold mining was up five times gold, what would happen to gold's price? We know what would happen.
- [49:03]
Mike Mlone
Elastic to leverage. And there's massive. It always happens in bull markets. It's elastic to leverage. There's futures, there's options, there's everything. It just when you get a leverage a market this expended, you don't know how leverage is until it goes down and it's just started. But I point out I love the hash rate, Dave. I use that five years ago when I was really bullish. But the world's changed now Bitcoin has millions of dependents. Sorry, just a fact dependence.
- [49:28]
Dave Weisberger
I hate this notion.
- [49:30]
Scott Melker
I mean I just don't think they're.
- [49:31]
Dave Weisberger
Taking any of the money that's gone into Bitcoin over the last year from people who actually wouldn't put. Would basically rather chop up a body part than buy one of those than buy something on pump fund. So it's not dependent. It is.
- [49:46]
Mike Mlone
And what happened ETF crypto people.
- [49:49]
Scott Melker
And in case you're wondering Dave, crypto trading volumes plunged 70%.
- [49:53]
Mike Mlone
So that's my point is started the ETF outflows, inflows have turned to outflows. The ETFs in terms of market cap reached parity with gold on a risk adjusted basis did not turn out.
- [50:05]
James Lavish
That's not true.
- [50:07]
Mike Mlone
They've been outflows for the last two months. I'm sorry, my data and the terminal might be wrong.
- [50:11]
Scott Melker
10 days, last 10 days they were up and actually even I'm looking up.
- [50:15]
Mike Mlone
For two months but they did reach period. The point is the lessons you've learned in commodities, yes, I get the adoption everything but people I Remember hearing this in Golden 20 years ago from the hucksters trying to push gold and people like, no, I kid, I want the stock market, sorry, I got earnings. The same thing's going to happen in bitcoin. It's already happening. Just you get caught in your little wedge of eerie. You think everybody's. Most people are like, yeah, great, but where's my earnings? And my point is the people who bought into it are finding out they, that they, if they had bought gold right now they're doing much better on a 20, 25 basis. If this continues, they will continue doing what's happening. Selling bitcoin and buying gold. That's what's happening now.
- [50:55]
Dave Weisberger
Yeah, it's not true.
- [50:58]
Mike Mlone
It is true. I showed it. There's outflows for three months and four.
- [51:01]
Dave Weisberger
Years was look, we, we have Scott and I have, and James, we have the ability to understand and talk to the ETF providers. We know that the basis trade unraveled. Okay. That the inflows. If you took out the basis trade on both the up and the down, what you would see is pretty consistent ever increasing adoption with a little bit of volatility. You wouldn't have seen the whoosh and the down and the this. I mean it's just that's something that you have to do. You have the ability to look at data and normalize what's actually happening. You have to look at it that way. There is no basis trade with gold, so it's not relevant. Now as far as gold ETFs outperforming Bitcoin. Yeah, I'm sure there's some adjustment and that's fine. People are generally wrong. It's like I made the comment today over the weekend that skiing and investing are very similar. In skiing, the first thing you're told by the instructor is your body and your brain wants to do the wrong thing. So when you start feeling yourself getting out of control, your body and your brain wants you to sit backward or pull back and when you do that, you fall in investing when you're feeling the most gut wrenching need to sell, that's generally when you're panic puking and it's generally when you want to buy. It is literally the same. And I'm telling you that's what you're seeing now.
- [52:15]
Scott Melker
Yeah, I tend to agree with that, Mike. I would consider the stake bet on a thousand dollar ethereum personally, but it doesn't.
- [52:24]
Mike Mlone
Oh sure. Well, okay. There's got to be. Okay, sure, I would consider it.
- [52:27]
Scott Melker
I have to think I Do think it's in the realm of possibility but I think if you're a betting man the odds of that are lower than.
- [52:35]
Dave Weisberger
Yeah, I think 26 versus 1,000. Got to be symmetrical. Got to be symmetrical, Scott.
- [52:40]
Mike Mlone
Sure.
- [52:41]
Scott Melker
$1,000 Ethereum would be absolutely devastating.
- [52:45]
Mike Mlone
Yeah, okay. Consider it from where it was just in 2019 before the biggest money pump in history to just distorted everything. That's my point is we're reversing all that now. That's the lessons of the lessons of the Price of Time by Edward Chancellor and the lessons of Jeff Booth. The price of tomorrow are kicking in now. There is an unlimited supply of an unlimited competition for technically advanced markets that go up. Look at Mag7. Look what's happening out of China and AI and BYD. I mean we talked about this last time. You can't stop that. It's just what happens when you make a lot of money in technology. Someone else will probably. That's what Jeff Puth pointed out but he did not point out it's this unlimited supply of cryptos that are better than Solana and Ethereum every day. It's just what's happening. Point is they've reached such a high plateau all we have to do is plugs, flirt some of the pluns or expose some of the excesses and we know, you know, at least we see Dogecoin is less than 50, 50 billion now where is it? 24. I'll be happy when it maybe it's 240,000 market cap but yeah, and then maybe, but the key thing is I'll look at to me the next key signal for where and when to buy markets will be when we see Ethereum flipping with tether and maybe I should say if, but I think that's going to happen. That would be a signal get markets a little bit beat up. But right now we're in a bear market and we're seeing rallies and that are being sold and everything. My point is that's what you're supposed to respect. And the Bloomberg galaxy crypto index 200 day movement just rolled over. Gold is just ETFs are just starting to roll back upwards. And you're expecting that to stop with this major shift with this new president pointing out tariffs and doing the most significant fiscal tightening we've ever seen. At the same time we've seen technology kick in and putting pressure on the Mag 7 from China yet I just to me I see bear markets getting started and act accordingly.
- [54:35]
James Lavish
Okay, but we're looking through that and that's the point is looking through that as long, longer term investors and trading versus investing. And that's a good point. You know, diversification is always good and it'll, it'll help mitigate the downside when you're, when you have short term view and, and short term duration of your trades. The one thing that though, Mike, that you're, that you failed to point out or you just did not point out when you mentioned Jeff Booth is that there's two sides that barbell. One side of the barbell is tremendous deflation and that's caused by, by, by the advances of technology. The other side of that barbell is the need for inflating the money supply to keep up with that. Because of the debt laden society that we live in. We are so driven by debt and so overwhelmed by the amount of debt that we have on our books books that we must do something in order to combat all of that deflation that's occurring. Meaning things are getting cheaper naturally through technological advance. So what do we do? We print money. We have to print the money to pay down the debt. If you don't, then we go under. That's the problem. We are mathematically it's.
- [55:54]
Mike Mlone
What's those doing?
- [55:56]
James Lavish
Well, who cares about Doge? Oh, you mean.
- [55:59]
Mike Mlone
So the commission.
- [56:00]
James Lavish
Is that what you're talking about?
- [56:02]
Scott Melker
Very confusing.
- [56:03]
Mike Mlone
Well, I mean the part. The amount of fiscal austerity we're seeing this country is something I've never even thought we'd do. And we're doing it. We just cut the entire Department of Education.
- [56:13]
James Lavish
Not. But Mike, it's not. It's $250 billion. We are spending $7 trillion. This is nothing. It's not going to, this is not going to impact it. What is going to impact it? What's going to impact is the rise in gdp. That's what's going to get us to fiscal.
- [56:30]
Mike Mlone
And the estimates are heading towards what, 1.5 now from 2 or 3% last year. All the estimate revisions for GDPR heading down.
- [56:37]
James Lavish
I'm gonna, I'm gonna write about GDP now. But the, the problem here is that we're talking about nominal versus real gdp. Nominal GDP is going higher. It's just. It must, there's. Mathematically it must. And if you think that it won't, then we are, we. We have a bigger problem problem. And Bitcoin will be adopted quite rapidly and it'll be pretty ugly. But that is the issue right there. That's the other side of the barbell. You must have monetary expansion. It's it's written in the code now because of all of the debt that we have. And I just don't. Maybe I'm in the camp that I don't think we're going to be able to have austerity to bring this down enough. It's just, I just don't see it. I can't see the numbers working.
- [57:21]
Dave Weisberger
The only austerity is inside the beltway. Inside the Beltway. Doge is trying to take the ill gotten gains from all the family members. Have you looked at Judge Boasberg's family? Wife, aunt, daughter, brothers, sisters, cousins, all making money from NGOs. Have you seen what's going on inside the Beltway? You're getting austerity outside of the Washington Beltway. They're not cutting anything that matters. All the money is going to go to the States. It's a tiny fraction. They've even said that it's the deregulation that matters. And the fraud. You know, he's trying to cut fraud and Social Security to extend the benefit insolvency of the trust fund and they're firebombing his dealerships. Why? Because people like the, people like the fraud. Right. You know, so there's a fight over that stuff and there's no austerity. They can't cut anything sizable. Right.
- [58:14]
Mike Mlone
It's just Department of Education.
- [58:16]
Dave Weisberger
Department of Education is inside the beltway. You, you want to look at the worst court. You like math, Mike? Look at test scores and, and dollars. Yeah, I get education. Yeah, it's. It's not even close education. So anyway, I know Scott, we're gonna, we're gonna run out of time. So I'm gonna stop.
- [58:34]
Scott Melker
I don't care.
- [58:35]
Mike Mlone
But Dave. But you're right. I love your rants because every time you rant, I learn a lot and I appreciate it. I, I just like what's. Here's what I see. When I started trading JGBs in 1995, Japanese government bonds and everybody in US told me o them they're going to yields, they're going to go up. And what happened? U.S. yields went down. I see the same thing happening in China right now. They bounced a little bit. I see 1.82 in the Chinese government bond, US 10 year notes heading that way. And all it takes is a normal stock market correction, maybe 30%. Just giving back some of the gains the last few years. That's all.
- [59:05]
Dave Weisberger
And my point is that I think you could be right and wrong at the same time. Which is the yield. Is the yield. I'M sorry about the beefing, but the stock market is, it's, it's lofty levels because of financialization. It is intentional. And that intentionality, if that's a word, is not likely to change. Now. Do I think people are over lever? Do I think, you know, do I think that we could have a really ugly fall if things come home to roost? Yeah, I do. But I think that today is going to look a lot more like 2000 than others, which is a sell off in March found by a hated rally that extends into the summer and then sell in the summer because bad may happen in the fall, but it'll depend on the policies and we'll see. I don't want to predict the bad, but I do see a relief rally heading into the summer, you know, when this, this period is over. I mean, I suppose it depends on what happens on April 2nd. I have a very hard time believing that he's going to drop the hammer and destroy our GDP on April 2 and be able to get away and do that. I, I don't know. But we'll see. I mean to me it's, it's a classic buy the rumor, sell the news scenario in reverse, but we'll see what happens.
- [60:14]
Scott Melker
Well, Dave said you could be both right and wrong, which means that you, like me, are married.
- [60:21]
Mike Mlone
Plenty of dependence.
- [60:22]
Dave Weisberger
At least they used to be right on the yield side. I think he's absolutely right on the yield side. I think that's because they want to engineer it that way and I think you can trade accordingly. Right. You know, I think that gold is getting close to the top of its, of its, of its internal range. And a flip from gold into hated long bonds might actually make sense because then you're betting with it. I don't want to deal with it.
- [60:45]
Scott Melker
Yeah, I think it was last week, a couple of weeks ago, but I was like, we go a little bit above 3,000 and then it's like, as Mike said, it's like Bitcoin at 100,000. I think we talked about that at market mavericks. Right. Gold at 3,000 kind of get, Gold's.
- [60:56]
Mike Mlone
Essentially right at these levels. Essentially that you said. Secondly, US Stock market put. And just look at today. It's up about the same. Stock markets down and it's not going to do in a day trade, but it's, it's extended, it's rich, it's everybody who's bearish gold, it's a problem. I get it. But right now if stock market keep, keeps going down, gold's gonna keep going up.
- [61:13]
Scott Melker
Bitcoin's hanging in there. I'll take it. Guys, that's all we got, obviously. Today, 1006am I like it. I. I've seen start canceling spaces and we make this a four hour, like church ceremony on every morning. Be amazing. That's all we got for you. Thank you. To Dave, James and Mike, as always. Incredible. Incredible Dave and Mike. I'm gonna be in Miami next week.
- [61:34]
Dave Weisberger
Oh, good.
- [61:35]
Mike Mlone
We gotta go out.
- [61:36]
Scott Melker
Yeah, Dave. Dave's muted.
- [61:39]
Dave Weisberger
Yeah. Well, I'm in New York and Washington next week for two different countries.
- [61:42]
Mike Mlone
Right. Of course.
- [61:44]
Dave Weisberger
My first time out of Miami in about. About eight weeks.
- [61:47]
Scott Melker
I'm actually coming for UFC and to interview Dana White, which is pretty awesome. So believe it or not, quick, quick sneak peek. He's actually involved in crypto now, which will be official when we talk about it. So pretty, pretty crazy. And that's all I have for you guys today. See you next Monday, but also tomorrow. Later, guys. Thanks.
- [62:22]
Dave Weisberger
Let's go.