Elon Musk’s SpaceX IPO, Fed Rate Hikes, Bitcoin Crash & Gold Replacing Treasuries
The economy is not crashing. It is freezing. In this episode of The Higher Standard, Chris and Saied break down the Fed’s Beige Book, a bifurcated consumer, sticky inflation, margin-squeezed businesses, and a labor market that has become low-hire, low-fire. Then the conversation turns to the real insanity: Treasury buybacks, Bitcoin liquidations, Ethereum weakness, gold replacing U.S. Treasuries as the world’s top reserve asset, and SpaceX preparing for a historic IPO at a $1.77 trillion valuation. The question is simple: are we watching the next great technological leap forward, or the biggest liquidity-driven rug pull of all time?
💥 Have you left your "honest ⭐️⭐️⭐️⭐️⭐️" review?
This episode is proudly brought to you by Fridays.
Because real wealth starts with your health. If you want to feel sharper, stronger, and more in control, visit joinfridays.com and use code HIGHER for an exclusive discount.
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🔗 Resources:
The Beige Book: May 2026 (Federal Reserve)
FedWatch Tool (CME Group)
SpaceX targets $135 IPO price at valuation of $1.77 trillion (CNBC)
How SpaceX’s Dream of a Record Breaking IPO Stacks UP (Bloomberg)
Gold replaces US Treasuries as world’s top reserve asset, ECB says (Financial Times)
⚠️ Disclaimer: Please note that the content shared on this show is solely for entertainment purposes and should not be considered legal or investment advice or attributed to any company. The views and opinions expressed are personal and not reflective of any entity. We do not guarantee the accuracy or completeness of the information provided, and listeners are urged to seek professional advice before making any legal or financial decisions. By listening to The Higher Standard podcast you agree to these terms, and the show, its hosts and employees are not liable for any consequences arising from your use of the content.
Transcript
This is Wemby, bro.
Speaker A:We're talking about the greatest player of all time.
Speaker B:Wow, they're early.
Speaker A:Wow.
Speaker A:Hey, you know, the Michael Jordan fans are like this.
Speaker A:Let him just lose his first NBA finals.
Speaker A:And he can never be the best.
Speaker A:No, he'll never be the best if he loses this one.
Speaker B:You know what they're doing?
Speaker B:They're going like, oh, this gonna break something.
Speaker B:He gonna break something.
Speaker B:Right?
Speaker B:They just hope.
Speaker B:They're like, it's in there.
Speaker B:The voodoo dolls and trying to, like, pray that he breaks, like, ankle something.
Speaker A:Are we on?
Speaker A:Are we live?
Speaker A:It's officially.
Speaker A:Everything I say now might make the show.
Speaker A:I can't make the.
Speaker A:The normal jokes we make off the air.
Speaker B:I don't know what you're talking about.
Speaker A:What?
Speaker B:These are the jokes that I make off the air.
Speaker B:If you're an inappropriate person and disingenuous on the hot mics, that's how you probably.
Speaker A:I am an inappropriate person.
Speaker A:Off the mic.
Speaker A:Yes, I am.
Speaker A:Are we live?
Speaker B:Welcome back.
Speaker B:How was furlough Fridays?
Speaker A:Paid their bills, and now we can bring pursue back.
Speaker B:They actually haven't paid.
Speaker B:They're down two checks right about now.
Speaker A:This show is brought to you by Fridays.
Speaker B:Yeah, sometimes.
Speaker A:Well, let's get started.
Speaker A:Welcome back to the number one financial literacy podcast in the world.
Speaker A:This is the higher standard.
Speaker A:Oh, old school C4.
Speaker B:Yeah.
Speaker B:I got myself a little pink lemonade here.
Speaker A:We wanted a C4 water fountain at one point, sitting in front of me in a white dress shirt.
Speaker A:Who are you?
Speaker B:I don't know.
Speaker B:It's very confusing.
Speaker A:My partner in crime, Christopher Nahibi, because.
Speaker B:I have a weird body.
Speaker B:These are polo material tailored to shirts.
Speaker B:Yeah.
Speaker B:So they make me feel light and airy.
Speaker B:Okay.
Speaker A:Yeah.
Speaker B:The obesity doesn't show through generally.
Speaker B:Okay.
Speaker B:Yeah.
Speaker B:You're supposed to say you're not fat at all.
Speaker A:You're not.
Speaker A:No, I know what it is.
Speaker B:It was a sponsor plug.
Speaker A:Oh, there you go.
Speaker B:You're a terrible human being sitting across from me.
Speaker B:My partner in time side Omar, everybody.
Speaker A:Thank you, my man.
Speaker A:And sit behind the desk in the production suite.
Speaker A:The only one in the higher standard merch that you can find@thspod.com is the fine Fijian slim Rejeel.
Speaker A:What's up, my guy?
Speaker A:Hello, everyone.
Speaker A:Welcome.
Speaker A:Good to be back.
Speaker A:Yeah.
Speaker A:Welcome back.
Speaker B:He bought that shirt when he wasn't skinny enough to fit in it.
Speaker A:Oh, you should see.
Speaker A:He knew.
Speaker A:He knew the future.
Speaker B:He knew he was going.
Speaker B:The future.
Speaker A:Yeah.
Speaker A:The force is strong in him.
Speaker A:And so is Fridays.
Speaker B:The Fridays are Strong in you, son.
Speaker A:It runs through my veins, young Jedi.
Speaker B:I can feel it running through your veins.
Speaker A:Got an old school episode for everybody today.
Speaker B:Yeah.
Speaker B:Lots of cussing and inappropriate jokes.
Speaker A:All jokes.
Speaker A:Yeah.
Speaker B:Yeah.
Speaker B:So the beige book came out and I wasn't going to do a live show today.
Speaker B:Right.
Speaker A:Nerd alert.
Speaker B:Yeah.
Speaker B:What beige book?
Speaker A:Yeah, come on.
Speaker B:Because it's brown.
Speaker B:The taupe book came out.
Speaker B:Landlord dope.
Speaker B:Yeah.
Speaker B:And the beige book comes out.
Speaker B:It comes out every time after an FOMC meeting.
Speaker B:Takes a bit time to put together.
Speaker B:And I think a lot of people who haven't seen the book don't realize there's not graphs and charts in this bad boy way.
Speaker B:It's just kind of like a long narrative.
Speaker B:Unless it's got the dot plot, in which case you see a bunch of other stuff.
Speaker B:This one does not have it and.
Speaker A:It goes into the data points and that the Fed likes to use when making their decision.
Speaker B:Right?
Speaker A:Yeah.
Speaker A:So you kind of get an insight as to what it is they're looking at.
Speaker B:So I wasn't gonna do the live show today.
Speaker B:I got really busy.
Speaker B:I was actually talking to my wealth advisor about where to put some of my money at, and the conversation went long and I didn't get a chance to get back in time.
Speaker B:And then I'm listening to what's going on in the market in real time as I'm driving back to, to the office and I'm going, huh, that don't make any sense.
Speaker B:And then I start looking at crypto prices anecdotally.
Speaker B:Cause somebody made a comment to me and I'm just going, huh, that don't make any sense.
Speaker B:I get to the Office and then SpaceX, I. E. Elon Musk and co.
Speaker B:Modify their Form S1, the IPO initial filing with additional information, and I'm like, turn those mics on, we going hot.
Speaker B:Oh, I did a brief live just because I, I thought it was apropos, if you will, but that really formed a new track for this show tonight and it will still be valuable in a week when this comes out.
Speaker B:So we're going to go over the beige book to start this show.
Speaker B:We're going to talk about kind of the baseline of where the Fed and the FOMC sees us today.
Speaker B:Then we're gonna spend some time looking at cryptocurrency and SpaceX and their IPO.
Speaker B:And believe it or not, these two things may actually be related.
Speaker B:We're gonna talk about a Treasury action that we're seeing in the, in the Treasury Market, which is probably gonna drive mortgage prices higher near term for reasons that are still very much unclear to me.
Speaker B:And then we're gonna break down some extra details in an old school way and tie it all together with a big fat set, sexy bow at the end of it.
Speaker A:I like this.
Speaker A:Yeah, let's dive right into it.
Speaker A:So we got the beige Book.
Speaker B:Beige book.
Speaker B:So I'm going to read certain salient points from the beige book because these are not our opinions.
Speaker B:These are the opinions of much more intelligent people than us.
Speaker A:At least they claim to be.
Speaker B:Yeah, people.
Speaker A:Some people.
Speaker A:Some of them have crayons in the back.
Speaker A:But it's fine.
Speaker B:Even Neil Kashkari is smarter than we are.
Speaker B:Yeah.
Speaker B:Sorry to say it.
Speaker B:I mean, he's got alopecia, but he's smarter than we are.
Speaker B:All right.
Speaker B:The consumer is bifurcating hard.
Speaker B:Yeah, I see.
Speaker B:This is why I can't have a serious conversation with you guys.
Speaker B:I say bifurcating hard and you guys giggle like.
Speaker B:Like it's a Diddy article or something.
Speaker A:You know, he knew what he was doing.
Speaker A:Yeah, he knew what he's doing.
Speaker B:Is 50 Cent mad?
Speaker A:No.
Speaker A:He's gonna get the last laugh.
Speaker B:Come on.
Speaker B:Your baby mama had a tape with two dudes, and one of them happens to be your arch rival who got that leaked while he was in jail.
Speaker B:I mean, he went through a lot of effort.
Speaker B:But 50 Cent did put out a movie about him.
Speaker A:It was gonna.
Speaker A:It was bound to happen.
Speaker B:It was bound to happen.
Speaker B:Yeah.
Speaker A:So did he put out a movie also?
Speaker B:His was clearly not as well produced.
Speaker A:Doesn't need to be.
Speaker B:Yeah.
Speaker B:For that matter, reproduced anyway.
Speaker A:Yeah.
Speaker B:Yeah.
Speaker A:Is it on Netflix?
Speaker B:Yeah.
Speaker B:Offered a half a million dollars, which.
Speaker B:This is a financial literacy show.
Speaker B:I got to ask the question, would.
Speaker A:You take the half a million or have dinner with Jay Z?
Speaker B:Actually, mine's much more technical than this.
Speaker B:Okay.
Speaker A:So that's the viral clip, though.
Speaker B:Yeah, it is a viral clip.
Speaker B:I'm going to forego the grossness of it.
Speaker B:Let's just say Diddy comes to you and says, comes to me.
Speaker A:That's very.
Speaker B:Try to be grammar.
Speaker A:Make sure grammar is proper with this.
Speaker B:We got to tighten this up a little bit.
Speaker B:Okay.
Speaker A:He bifurcates.
Speaker B:Yeah.
Speaker B:If you take $500,000 to do something you would do anyway, but maybe a little more extreme.
Speaker A:A little bit more extreme.
Speaker B:I'm just trying to.
Speaker B:Does the money make it okay?
Speaker B:Does it make it worse?
Speaker B:Because he allegedly paid $500,000 and she took the money to.
Speaker B:To do the.
Speaker B:So this is all pre arranged, pre negotiated.
Speaker B:I'm probably contracts for all I know.
Speaker B:Yeah.
Speaker A:Knowing that it's going to be taped and.
Speaker B:No, she said she didn't know it was taped.
Speaker B:I mean, but again, you have to.
Speaker B:You got paid half a million dollars.
Speaker A:But what if that was part of the contract?
Speaker A:You have to come out and say you didn't know.
Speaker B:I mean, she isn't suing anybody.
Speaker B:Right.
Speaker A:Because it doesn't make it, it doesn't make it as good if, if she comes out and says, yeah, I knew he was going to do that.
Speaker B:I don't know.
Speaker A:Doesn't make it better.
Speaker B:I haven't seen the video.
Speaker A:I do not co sign any of this behavior.
Speaker A:It's.
Speaker A:That is never.
Speaker B:Okay, let the record show that I expressed that I did not see the video and Reil and said were silent.
Speaker A:Hold on, Christopher, you did not say.
Speaker B:You didn't see the video.
Speaker A:You did.
Speaker A:You, you said you didn't see the video.
Speaker B:Is that what you.
Speaker B:I have not seen the video.
Speaker B:I have only seen pictures from the video.
Speaker A:Let's get back to the page.
Speaker A:This is the first time I'm hearing about this.
Speaker B:All right, back to the Diddy Brown book.
Speaker B:All right, so higher income households are still spending, but middle income consumers are, and I'm quoting here, squeezing more life out of every dollar.
Speaker B:And lower income consumers are showing more strain.
Speaker B:The report also notes increased credit card usage, fewer retail visits, and demand for necessities.
Speaker B:Now that shouldn't surprise anybody in the room, right?
Speaker A:Not at all.
Speaker B:I mean, we've been talking about this K shaped economy for a prolonged period of time.
Speaker A:Yep.
Speaker B:And it sounds like the Fed is pretty clearly expressing that the Americans are feeling it.
Speaker B:Right?
Speaker A:Yeah.
Speaker B:Right.
Speaker B:Okay, so nothing really crazy there.
Speaker B:Number two salient point, the second one here, inflation pressure is back in the room.
Speaker B:Okay.
Speaker B:This doesn't surprise anybody.
Speaker B:As a matter of fact, inflation predictions seem to be suggesting that inflation's going to rise.
Speaker A:Yes, it really, but it does depend on how you look at inflation.
Speaker B:Yeah.
Speaker B:Prices rose at a moderate to strong pace, with most districts reporting higher inflation than the prior Beige Book.
Speaker B:The Fed specifically points to energy costs tied to the Middle east conflict as the main driver spilling into shipping, packaging, groceries and fertilizer.
Speaker A:The shit talking continues.
Speaker B:We did talk about that shit on a prior show.
Speaker B:Yeah, yeah, we did.
Speaker A:Look, there's a lot of talking.
Speaker B:Here's the thing.
Speaker B:There's a lot of podcasts that take themselves way too seriously.
Speaker B:We have a little bit of fun with it, and all of a sudden it devalues the message.
Speaker A:Yeah, like not every, not everybody should have a podcast that.
Speaker A:All that commentary again.
Speaker B:Oh yeah, the podcast mics.
Speaker B:Should you just come with a license or something?
Speaker A:So, so I, there, There's is one YouTuber that we've seen on.
Speaker A:I, I do like his content.
Speaker A:It's very straightforward to the point we've talked about on the show before too.
Speaker A:Is that clear Value Tax guy?
Speaker B:All right.
Speaker B:His production value sucks.
Speaker A:Sucks.
Speaker A:People seem to like though he gets straight to it.
Speaker A:Right.
Speaker A:It's kind of dull, dried.
Speaker A:Not really for me.
Speaker A:But I don't get it.
Speaker A:Clearly.
Speaker B:But yeah, why, why is he more love than us?
Speaker A:Yeah, exactly.
Speaker A:But he had an interesting take on this too.
Speaker B:You watched his channel.
Speaker B:You didn't watch our own videos.
Speaker A:I do watch our own videos.
Speaker A:I watch our lives like after the fact, like a day late.
Speaker A:I watch our lives.
Speaker B:You watch our lights.
Speaker A:I watch the lives late.
Speaker B:You watch the lights.
Speaker A:Yeah, I make them.
Speaker A:I make them late.
Speaker A:Yeah.
Speaker A:So he had an interesting take.
Speaker A:Like if you were, if you were to the conversation, you brought up inflation pressures back in the room.
Speaker A:Yeah, well, clearly, I mean it never left.
Speaker B:Okay.
Speaker A:I don't care what they, what they said.
Speaker A:It was compounding.
Speaker B:We never hit the 2% target.
Speaker B:For sure.
Speaker A:We never hit the 2% target.
Speaker B:But.
Speaker A:And we talked about how I, I personally take great exception with how CPI inflation, inflation in general is even measured.
Speaker B:Right.
Speaker A:Some of, some of it does make sense, but it can be applied to everything.
Speaker A:And I get it.
Speaker A:It's very, it's very tricky to, to measure.
Speaker A:There's no.
Speaker A:It's not a perfect science, if you will.
Speaker B:For instance, you and I have not had this conversation.
Speaker B:But do you know that other countries measure it differently?
Speaker B:Right?
Speaker A:I'm sure they do.
Speaker A:We've changed the way we look at it.
Speaker A:Like, I don't even know.
Speaker A:Maybe Raju can look into how many times we've changed the way we've measured inflation.
Speaker B:Right.
Speaker A:But for instance, one, one key aspect that they like to always measure is if beef gets too expensive, we're not going to continue to measure the price of beef to see how much inflation is increasing.
Speaker A:We're going to, we're going to look at, you're going to make a substitute, a like substitute.
Speaker A:So you go to chicken.
Speaker B:Right.
Speaker A:Costco is famous for saying that, you know, that's one of the key alarms for them, that a recession is around the corner when, you know, their sale production of beef goes down and people are buying more chicken.
Speaker B:Right.
Speaker B:Which just happened, by the way.
Speaker A:Which just happened.
Speaker A:And they, they came out and they announced it.
Speaker B:Right.
Speaker A:So.
Speaker A:But not everything is.
Speaker A:You can't expect people to substitute, like, certain fruits for other fruits.
Speaker A:You know, people are going to keep buying the fruit.
Speaker A:People are going to keep buying eggs.
Speaker A:What's the substitute for eggs?
Speaker B:Right.
Speaker A:What do we got here?
Speaker A: f times since its creation in: Speaker A:So this isn't new.
Speaker A:And anytime decisions are made financially based on reports that are given to the government, you got to think they will be skewed in their favor.
Speaker A:It will be.
Speaker A:Because you know why?
Speaker A:When inflation hits a certain, A certain, A certain amount, you know what also changes for the government?
Speaker A:Spending payments to Social Security.
Speaker B:That system's so broken.
Speaker A:It's so broken.
Speaker A:Right.
Speaker A:But like, if inflation was high, then they have to adjust the cost of living to Social Security recipients and pay them more.
Speaker B:Right.
Speaker A:So those numbers will always, never truly reflect what it is.
Speaker A:So what Clear Value Tax went on to say, what I want to tell you is logically, if you really want to measure inflation, there's a report that the Fed releases called the M2 money supply.
Speaker B:I have a great.
Speaker A:I want to hear your take on this.
Speaker B:Yeah, yeah, Pull the beige book down for a little bit.
Speaker A:Okay.
Speaker A:There is, there's arguments against it, too.
Speaker A:But, like, it's all.
Speaker A:It's not something that we shouldn't discount or just completely overlook.
Speaker B:The M2 money supply is one of the most manipulated things that people use to express where the economy is.
Speaker B:And because it isn't something that's measured by anybody in any standard, it's just one of those metrics that economists and smart people look to how much money.
Speaker A:Is in the system.
Speaker B:Yeah, right.
Speaker B:Which does parlay well into the latter half of the show tonight where we're seeing.
Speaker B:Yes, bro, tapping himself.
Speaker B:We're seeing an interesting trend in gold versus Treasuries.
Speaker B:And we're seeing, for the first time, some things happen where you're seeing other countries more invested in gold than they are in the US Treasuries, which is, in my mind, a classic recessionary icon.
Speaker B:It's one of those things that kind of sends the alarms up.
Speaker B:And the M2 money supply suggest that there's an overprinting of money that occurred during the last.
Speaker B:I'm just going to call it Jerome Powell term.
Speaker A:Yeah, the last year.
Speaker A:Right.
Speaker A:So when you measure that year over year right now, it's.
Speaker A:It signals that inflation is at 6%.
Speaker B:Yeah.
Speaker A:Okay.
Speaker A:Obviously, the Bureau of Labor statistics and the U.S. the government, labor statistics.
Speaker B:Okay.
Speaker A:What?
Speaker A:Wouldn't, wouldn't agree to that because they're obviously have a much lower target.
Speaker A:So what do they do?
Speaker A:They measure CPI the way they want to.
Speaker A:CPI comes in headline figure.
Speaker A:What is it?
Speaker A:3.8%.
Speaker A:But hold on, hold on.
Speaker A:The FOMC says no, we don't like to look at CPI.
Speaker A:We like to look at this other inflation reading called the pce.
Speaker A:Right, Core pce, which removes the volatile so food and energy, and that has that.
Speaker A:That actually comes down at, in.
Speaker A:At 3.3%.
Speaker A:So even lower.
Speaker A:And now there's rhetoric, and we've talked about this before the show that they're floating the idea around of, you know, maybe we should begin to look at how we analyze inflation and start looking at it from a trimmed mean perspective where we look at all the data and the extremes on both sides.
Speaker A:Things that are way too low, that are bringing it down and things that are way tight.
Speaker A:We just remove all that and we just look at the stable prices.
Speaker B:Yeah, because the outliers aren't getting that.
Speaker B:What you're doing is playing hide the sausage with the numbers.
Speaker B:Okay.
Speaker B:Let's be honest about what's going on here.
Speaker A:A game Chris is very familiar with.
Speaker B:Yeah, I'm very familiar with hide the sausage.
Speaker B:So the problem with that logic, and I know Warsh has been a proponent of it because he's looking for kind of like the overall median number is like the average price going up or down.
Speaker B:No, no, no.
Speaker B:The average price.
Speaker B:Inflation is supposed to represent what we spend on the things that we buy.
Speaker B:Right.
Speaker B:Stripping out food and energy has always been ridiculous to me.
Speaker B:Oh, those are just more volatile.
Speaker B:Geopolitical conflict breaks out in the Middle east, and guess what?
Speaker B:You know, prices in California go up to $8 a barrel for gasoline.
Speaker B:Okay.
Speaker B:But Americans are still paying that.
Speaker A:I got to pay that, though.
Speaker B:You know what I mean?
Speaker B:Like, so you can just go, ah, no, no, no, no, no.
Speaker B:We don't look at that here, but we still pay it here.
Speaker B:Right, right.
Speaker B:So it, to me, it just always seemed like a convenient way to use the lack of financial literacy, the lack of understanding of how this stuff comes up against Americans to try to fulfill the need.
Speaker B:Now, there are arguments that are rational here.
Speaker B:You could argue that The S&P 500 is going increasingly more tech focused, so we should start to look at tech as a sector, as a bigger and larger component of how we live every single day.
Speaker B:Right.
Speaker A:But even to its own measure, if, if an iPhone increases in price by a certain percentage The CPI will start measuring a different cell phone for you to go buy.
Speaker B:Yeah, it's.
Speaker A:Hold on, wait a minute.
Speaker A:No, people are gonna keep buying these phones, man.
Speaker A:What are you like, you know, that's.
Speaker B:What they're gonna do and it's a problem.
Speaker B:And as you go through the beige book, there's continual problems like this in the book.
Speaker B:Number three, businesses are getting margin squeezed.
Speaker B:Businesses now are getting squeezed.
Speaker B:So now it's inflation affecting the consumer.
Speaker B:But now businesses, the margin for them is their profits.
Speaker B:Right.
Speaker B:So because inflation's going up for them, they can only pass on so much to the consumer.
Speaker B:So prices aren't going to keep up with their cost of production going up because it's not just gasoline, it's all the parts and everything else they sell as well.
Speaker B:So it's cumulative for them.
Speaker B:Non labor input costs are rising faster than selling prices.
Speaker B:Meaning that companies are eating costs where consumers cannot absorb more price hikes.
Speaker B:That is especially true for consumer facing businesses.
Speaker B:That is restaurants, always somebody who gets pinched during recessionary economies.
Speaker B:Number four, labor market low hire low, fire.
Speaker B:The jolts report came out.
Speaker B:It was actually beat expectations.
Speaker B:Jolts report came out.
Speaker B:I think it was like 7.5 million AD or something to that effect.
Speaker B:Let me double check right here.
Speaker B:I actually have it.
Speaker B:And.
Speaker A:But we know that's bs.
Speaker B:Yeah.
Speaker B:Come on.
Speaker B:Well, the jobs numbers have been materially inaccurate for a very long period of time and it's been somewhat concerning.
Speaker A:I mean I think we all know people that have applied for jobs and we talked about on the show before, you know, on LinkedIn you see over a hundred plus applicants have applied to this job.
Speaker B:Jolts hit 7.62 million.
Speaker B:Previous was 6.9 million.
Speaker B:Consensus was 6.9 million and it be consensus.
Speaker B:So if you're the, if you're the fomc, you're looking at the job market, you're going like wait a minute.
Speaker B:Okay.
Speaker B:It seems to be improving to me because they're Jeff Cox with.
Speaker A:Oh is the fascinating reporting.
Speaker B:Jeff Cox just always reporting.
Speaker B:I have always thoroughly enjoyed Cox's reporting.
Speaker A:Mr. Cox himself.
Speaker B:Yeah, he only brings up the big stories.
Speaker B:The.
Speaker A:Yeah, that's right.
Speaker A:The biggest stories.
Speaker A:Yeah, someone call it.
Speaker A:Yeah.
Speaker A:The substance inside of his, of his stories are girthy.
Speaker B:That's too far.
Speaker A:Too much, too far.
Speaker A:Yeah, that was a stretch.
Speaker B:We should probably edit that out.
Speaker B:We're not going to.
Speaker B:I mean just in theory.
Speaker B:All right.
Speaker B:Yeah, it's a stretch.
Speaker B:Yeah, yeah.
Speaker B:It, it's a little flaccid that joke.
Speaker B:All right.
Speaker B:So I told you it's going to be old school joke.
Speaker A:It's going to be old school going.
Speaker B:Yeah.
Speaker B:Labor market low, higher, low.
Speaker B:Fire.
Speaker B:Manufacturing is the bright spot but it's narrow.
Speaker B:Manufacturing activity increased in nine districts.
Speaker B:Why we're trying to bring back everything here because of the tariff wars.
Speaker B:Right.
Speaker B:Credit stress is quietly building and I want to read this one in its full context here.
Speaker B:Banking conditions were mostly stable but the beige book noted rising residential mortgage, consumer and agricultural loan delinquencies in several districts.
Speaker B:Now I have looked at this data pretty heavily.
Speaker B:I've not seen a serious enough delinquency increase in the housing market for me to be any type of concern.
Speaker B:Okay.
Speaker B:If anything I think the housing market is going to have forthcoming stress as it relates to the cost of everything in general.
Speaker A:Okay.
Speaker B:Right.
Speaker B:Is interest rates rise because of some issues that we're seeing here.
Speaker B:I think that's going to be another challenge.
Speaker B:Agriculture looks weak in the outlook.
Speaker B:Here is the kind of the end all conclusion of the Beige book.
Speaker B:Businesses generally saw little change in expected growth over the next six months because elevated uncertainty and signs of weakening consumer spending spending.
Speaker B:Our weighing on sentiment.
Speaker B:That was the take home thought from the fomc.
Speaker A:So with I feel like these, these headlines of, of all the risk and that that's out there right now.
Speaker B:Yeah.
Speaker A:That's been going around for.
Speaker A:We've been talking about it now it feels like two years.
Speaker B:It's been longer than that dude.
Speaker A:Right?
Speaker B:Yeah.
Speaker A:Where we're really sound like sounding alarm.
Speaker B:Like we sound like doomers now.
Speaker B:We sound like those on YouTube who are like oh they always think of broken clocks.
Speaker A:Right.
Speaker B:They're Peter Schiff, man.
Speaker A:Yeah.
Speaker B:And it's like no dude, like there's been metrics that have been.
Speaker B:I will point out there's some really bright spots in the economy.
Speaker B:Nvidia is, is an anomaly.
Speaker B:You got SpaceX open AI, anthropic all coming.
Speaker B:But as much as these look like positive things, I'll be honest with you, by the end of the show you're going to hear why I think they're very, very scary.
Speaker B:I think we're setting ourselves up for and I'm gonna go ahead and say it now, the biggest rug pull of all time.
Speaker B:Yeah.
Speaker B:I'm talking trillions.
Speaker A:Damn.
Speaker B:The biggest rug pull of all time.
Speaker B:I think a lot of the way the money's been.
Speaker B:We've talked about this in previous shows with the chart where we show the capital expenditures and all the money being thrown around company to company intercompany Right.
Speaker B:None of these companies are really profitable.
Speaker B:We all have this hope that they'll get to AGI.
Speaker B:They will.
Speaker B:Right?
Speaker B:But someone's gonna own that.
Speaker B:Someone's gonna win.
Speaker A:Someone's gonna be the winner.
Speaker A:And there's gonna be a lot of losers.
Speaker B:A lot of Ls are gonna be handed out.
Speaker B:You get an L and you who get an L, going to do a.
Speaker A:Whole show handing out L's.
Speaker B:Yeah, we should.
Speaker B:We should literally just start mailing people Ls.
Speaker B:We know you don't watch our show, but here's an L for you anyway.
Speaker B:Yeah, see that.
Speaker A:I feel like that wouldn't do well for like future sponsorships, but it would be really funny.
Speaker B:Yeah, I pretty much ruled out most of sponsorships.
Speaker B:The problem is I can't keep my mouth shut.
Speaker B:The ones who do listen are like, did he just make a penis reference?
Speaker A:Yeah, yeah, yeah.
Speaker B:Let's go to the Fed Fed Group, Fed Wash Tool.
Speaker B:So the Federal Reserve is expected to hike by at least one quarter percentage point by the end of the year according to the CME Fed Watch tool.
Speaker B:This is the end of the year.
Speaker B:Did you pull up.
Speaker B:Oh, you bunch of the URL, there's an image.
Speaker A:You click December.
Speaker B:Yeah, December.
Speaker B:And that's fine.
Speaker A:Yeah, right there.
Speaker A:Right in the.
Speaker A:Right in the middle.
Speaker A:Right, right.
Speaker A:Yeah, right there.
Speaker B:Yeah, yeah, click that one.
Speaker B:That's the same thing.
Speaker B:So you'll see Approximately, last I checked, 41.
Speaker B:Yeah.
Speaker B:41.7 Probability by the end of the year of being between 375 to 400.
Speaker B:That's a 25 basis point increase.
Speaker A:So you're essentially looking at a coin flip.
Speaker B:Right.
Speaker A:Like this.
Speaker A:We might stay.
Speaker A:We might go up.
Speaker B:Well, I don't know how we stay.
Speaker B:If War Scott convinced the FOMC to stay, I'd be kind of surprised.
Speaker B:Particularly because Jerome Powell is still a member here.
Speaker B:My concern with this is as you go through to Q1, this becomes even more of a closer certainty.
Speaker B:It stops being a coin flip at Q1 at 27.
Speaker B:But certainly the, the growing concern is that you're going to have to do something to stop runaway inflation.
Speaker B:I don't think you're going to get away with changing the way inflation is calculated at the FOMC in time to stop this issue.
Speaker A:Okay.
Speaker B:So I think that's going to be a prolonged series of events and I don't know that wash is as diabolical.
Speaker A:Yeah, I'm interested to see how this is going to play out because the only other time in history where we've been where we are with our debt to GDP ratios where they're at.
Speaker A:It was post World War II.
Speaker B:Right.
Speaker A:And the only way they were able to come out of that time the way that they did as fast as they did was a fancy economic term called financial repression.
Speaker B:Right.
Speaker A:Where you artificially keep interest rates low.
Speaker A:Right.
Speaker A:Lower than inflation, intentionally increasing inflation up higher to basically make your debt seem a lot smaller than what it actually is.
Speaker A:And then that, over that, I think solved the debt to GDP ratio much faster than they would have if they would have just raised, you know, raised taxes on everybody and pay down their debt slowly over time.
Speaker A:That would have taken an additional like 20 years to get to where they wanted to get to.
Speaker A:So that's where I'm thinking what.
Speaker A:Where this may go.
Speaker B:I don't know that you've got the buy in to being that creative fiscally from the.
Speaker A:That's a major bet to do that.
Speaker A:I mean, because if that fails.
Speaker B:Yeah, but most Americans back then were so disconnected with the FOMC was doing.
Speaker B:I mean, it's only been the last like 10 years or so that everyone's like, oh my God, the fmc.
Speaker B:We just watched the meeting.
Speaker B:The fact that I can do a live show now and people actually tune in to see us like, treat this like a sporting event is nuts.
Speaker A:Yeah.
Speaker B:That has me, I think, like, you know, 20 years ago, 30 years ago, you could have done that and people would have been like, what are they doing over there?
Speaker B:I don't know.
Speaker A:Why does it matter?
Speaker B:Yeah, but it's tantamount to making your stomach look bigger, you know, smaller to make your junk look bigger.
Speaker B:That's what they're basically doing over there with inflation.
Speaker A:That's true.
Speaker A:That's.
Speaker A:That's a great reference.
Speaker B:Yeah.
Speaker B:I mean, you can't always make something bigger than you wanted to, but you can make things look smaller.
Speaker B:Right.
Speaker B:And that, that's effectively what they did.
Speaker B:And you know what?
Speaker B:It, it, it's a gamble.
Speaker B:And it's a gamble that I don't think you're going to get bipartisan approval on at this particular time.
Speaker B:Not that you need it.
Speaker B:Yeah.
Speaker A:Not that you.
Speaker A:But that's just going to have to be something that the FOMC agrees upon themselves.
Speaker B:So because I have a cadence for the show, Rejeel, I didn't put an article in the show notes, but I put this just in.
Speaker B:U.S. treasury is projected to buy back U.S. treasuries expected to buy back 12.5 billion of their own debt this week.
Speaker B:That did Happen.
Speaker B:See if you can find an article on that.
Speaker A:On it.
Speaker B:Yeah.
Speaker B:So the US buying back their own Treasuries has a trickle down effect which is likely to drive treasury prices higher.
Speaker B:It's a supply and demand argument.
Speaker B:If you're buying it back the same way a company can buy back its stock when they have extra liquidity, that means there's less of your stock in circulation or less of your Treasury Treasuries in circulation.
Speaker B:The demand for what's left should in theory go up.
Speaker B:Should.
Speaker B:Should.
Speaker A:And if it doesn't, well then you've.
Speaker B:Got a lack of confidence in said debt or Treasuries.
Speaker B:So.
Speaker B:And, and this is one of those situations where I think the expectation is that it's going to go up.
Speaker B:And I think that that's probably reasonable.
Speaker B:The question is.
Speaker B:Yeah, there you go.
Speaker B:Yeah.
Speaker A:Bar chart official.
Speaker A:Yeah.
Speaker A:It's got a blue check mark, so you got to trust it.
Speaker B:Actually bar charts are pretty, it's, well, the treasury newsletter there.
Speaker B:Yeah.
Speaker B:So There we go.
Speaker B:So 12.5 billion.
Speaker B:Yeah.
Speaker B: ,: Speaker B:Preliminary announcement.
Speaker B:So I look at this and I think to myself, okay, why would you do this now?
Speaker A:Why would you do this now?
Speaker B:I don't know.
Speaker B:Yeah, it just seems like a really strange time to do that.
Speaker A: Maturity date range: Speaker B:Maybe they're trying to get the, the, the treasury curve even, I don't know.
Speaker B:But this seems like it's going to be impactful long term.
Speaker B:Let's not take my word for it.
Speaker A:But if you're buying.
Speaker A:But if you're buying back Treasuries that were at a, at a lower rate and now, I mean, your interest payments are now going up too.
Speaker B:Let's be objectively neutral here, Rajeel.
Speaker B:Google this.
Speaker B:What happens when the government buys back its Treasuries?
Speaker A:What happens?
Speaker B:Yeah.
Speaker B:Okay, let's see.
Speaker A:Let's see what Google's AI has to say.
Speaker B:Yeah.
Speaker B:Okay.
Speaker A:What's the spin?
Speaker B:Google AI what happens?
Speaker A:No pressure, bro.
Speaker A:We're all just millions of people around the world watching you type.
Speaker A:Oh, right there.
Speaker B:Feel like millions might be.
Speaker A:You're going to let that go?
Speaker A:It's billions.
Speaker B:When a bond is bought, the money supply increases and interest rates tend to fall.
Speaker B:Yeah.
Speaker B:No, it's not true.
Speaker B:The exact mechanism and impact depend on whether the purchase is made by the U.S. federal Reserve or the U.S. treasury Department.
Speaker B:There you go.
Speaker B:So let's go to the U.S. treasury Department.
Speaker B:Debt management versus monetary policy.
Speaker B:Occasional U.S. treasury itself will buy Back its own previously issued bonds from investors before they mature.
Speaker B:The process using surplus cash generated from tax revenue.
Speaker A:Where'd that come from?
Speaker B:Did you give them extra?
Speaker A:I actually owe?
Speaker B:Yeah.
Speaker B:Or by issuing new shorter term debt, the treasury purchases unmatured securities from the open market.
Speaker B:The effect, this acts as a cash management tool.
Speaker B:It allows the government to restructure its debt load, retirement higher interest debt and reduce overall interest expense and smooth out the maturity timeline for the, for the national debt.
Speaker B:Yeah, to me looks like it's going to drive prices higher, not down.
Speaker A:Yeah, I mean it's a 12 and a half billion dollar gamble.
Speaker A:I guess it's worth a try to.
Speaker B:See if it'll work even then.
Speaker B:Why, why are we doing this now?
Speaker B:Like shouldn't that be like a conversation point that, that someone you know?
Speaker B:It just shouldn't be something that happens in a vacuum where we don't have any input and understanding as to why it's happening.
Speaker B:But okay, that's out there.
Speaker B:So now we know where the FOMC stood, we know the treasury market.
Speaker B:Let's talk a little about SpaceX.
Speaker B:And believe me, this does all tie together.
Speaker B:Okay, SpaceX announced just earlier today, $135 IPO price.
Speaker B:Now this is strange.
Speaker B:Everyone's like, oh my God, this thing can go public and get up to $2 trillion.
Speaker B:Well, Elon Musk, who's done everything a little bit unorthodox on this, has taken a very unique tack.
Speaker B:And by way of backstory, 30% of this is allocated to retail.
Speaker B:Typically it's closer to 10%.
Speaker B:You've got all the largest banks in the world right in the country, frankly, looking at this.
Speaker B: office presentation to: Speaker A:What was my invite?
Speaker B:Yeah, I didn't get one either.
Speaker B:Presenting this as an investment opportunity.
Speaker B:Senior leadership from SpaceX will be there.
Speaker B:The question mark is on Elon Musk at the moment.
Speaker B:But they effectively locked in their IPO price.
Speaker B:Normally you get an IPO price range and it's likely to go public at this range to this number.
Speaker B:To this number.
Speaker B:There's the range.
Speaker B:Elon Musk said, nah dog, we selling at 135 a pop, locking in the valuation at $1.77 trillion.
Speaker A:Honestly, it probably wasn't his decision.
Speaker A:Probably some somebody there.
Speaker A:I'm not gonna lie, the demand is there.
Speaker B:So let's, let's, let's get into that because that, that might be, it's, it's.
Speaker A:Palpable Now I could like.
Speaker A:Okay, I can wrap my mind around.
Speaker A:I'll do this.
Speaker B:All right, boys, let's have a theoretical conversation.
Speaker B:Elon Musk.
Speaker B:Do you recall during the crypto era that Elon Musk was all about having diamond hands?
Speaker B:Like he rode the crypto wave, right?
Speaker A:Doge.
Speaker B:Doge, yeah, he was a big Doge guy.
Speaker B:And Tesla and SpaceX, they hold cryptocurrency as part of their treasury management function.
Speaker B:Right?
Speaker B:Cash manager, they have some crypto.
Speaker B:It's safe to say that Elon Musk has been a crypto enthusiast for at least several years.
Speaker B:He also seems to value truth and transparency with his purchase of Twitter.
Speaker B:Looks at that.
Speaker A:That's.
Speaker B:That's the spin.
Speaker A:Yeah.
Speaker A:That's the narrative.
Speaker A:Yeah.
Speaker B:Or could have just been.
Speaker B:He wanted to see response.
Speaker A:Yeah.
Speaker A:He cares a lot about the First Amendment.
Speaker B:Yeah.
Speaker B:Or.
Speaker A:Yeah.
Speaker B:Or he doesn't.
Speaker B:Whatever.
Speaker B:SpaceX plans to market its IPO at a fixed price of $135 per share with a valuation of 1.77 trillion.
Speaker B:The valuation would make Elon Musk firm the seventh biggest company in the US above Tesla, which has a market cap of 1.6 trillion.
Speaker B:SpaceX is planning to debut on the NASDAQ on June 12th.
Speaker A:Now why June 12th?
Speaker A:Why so fast?
Speaker A:I feel like this is all being rushed.
Speaker B:It does feel like it's being rushed.
Speaker B:And I think the reason why is he lost the lawsuit against OpenAI and because we saw in the previous show, episode 3 88, that, that he was trying to sue and suggest that they were supposed to be nonprofit and their competitor and he brought X. AI into SpaceX.
Speaker B:So AI is a huge portion of this for him anyway.
Speaker B:At least that's where their TAM is coming from.
Speaker B:Total accessible market, addressable market.
Speaker B:So I think that first to market gets the best response.
Speaker B:And Elon Musk has always been enigmatic in some ways that he's been able to capture the public retail attention and the retail world, which largely uses X, is going to listen to him.
Speaker B:He hyped a lot of the crypto hype and now he's hyping his own product.
Speaker B:And Tesla, for a lot of people who backed it early, was very lucrative.
Speaker B:So there's a chart that I have in there.
Speaker B:Is it after this?
Speaker B:No, no.
Speaker B:We have some Goldman Sachs stuff first and then we'll get into that.
Speaker B:So Elon Musk, SpaceX, the fixed price, we already got into the SpaceX said it plans to sell 555.6 million shares, which would amount to a $75 billion fundraise.
Speaker B:Remember that number, $75 billion fundraise.
Speaker B:The underwriters have an option to purchase an additional 83.33 million shares at the IPO price amounting to 11.2 billion.
Speaker B:Trivial numbers when you're talking about 1.8 trillion.
Speaker B:Musk will own over 82% of voting control after the offering, the filing said.
Speaker B:So you're not gonna outvote him?
Speaker B:No, he still runs the show.
Speaker B:Right.
Speaker B:Goldman is the lead bank for the offering, followed by JP Morgan, followed by Morgan Stanley, bank of America, Citigroup and JP Morgan Chase.
Speaker B:Typically, at this stage of the process, new issuances will also offer a price range that will allow a company and its advisors to gauge demand sensitivity at different levels.
Speaker B:In this case, SpaceX took a more unique approach.
Speaker B:After a slew of testing the waters meetings leading up to the roadshow launch.
Speaker B:At the $135 price share, you get that 1.77 trillion, which assumes the echostar spectrum and cursor transactions close.
Speaker B:So using them as similar transactions that he's looking, looking at.
Speaker B:Right.
Speaker B:Valuations would make SpaceX the seventh biggest company.
Speaker B:We already talked about that.
Speaker B:And Musk's company is planning to debut on the nasdaq, which is tech focused.
Speaker B:So there's a chart.
Speaker B:How often is Elon right?
Speaker B:There you go.
Speaker B:So this was a little something I had, I helped me put together.
Speaker B:Of Musk's more than 600 claims, approximately Mr. Musk has made over the years, he achieved what he said he was going to do only about 19% of the time, but.
Speaker B:But major.
Speaker B:But he was either late or did not deliver on his goals about 35% of the time.
Speaker B:I really wanted to break that up, but I couldn't get there.
Speaker B:And for about 33% of Mr. Musk's plans, he or his company did not provide a public update.
Speaker B:And they were just too vague to know if he succeeded or not.
Speaker A:If he succeeded, you would have heard.
Speaker B:Maybe, maybe not.
Speaker B:Maybe they abandoned it for other reasons.
Speaker B:And about 13% of Mr. Musk's goals came with delivery dates that are still in the future.
Speaker B:So tbd, like a million people on.
Speaker A:Mars, you never know.
Speaker B:Baby colonies.
Speaker A:Yeah.
Speaker B:So he's, I mean, 20%.
Speaker B:Not bad if you add in the extra percentage there, you know, let's just say 20%.
Speaker B:Let's say you add half the 35%.
Speaker B:That's 17.
Speaker B:Let's just say 26 plus you got 13.
Speaker B:That's out in the future.
Speaker B:Let's say you nail about, you know, seven of that.
Speaker B:That's 30.
Speaker B:You got about a 33, 40% ish somewhere in there, probability of him doing this.
Speaker B:But I'll ask the other side of the question.
Speaker B:People are gonna be like, oh, you're a fanboy.
Speaker B:I'm not.
Speaker B:I'm just.
Speaker B:I'm neutral, baby.
Speaker B:Who else would you believe could do this?
Speaker A:But why do.
Speaker A:My question would be why do I have to believe somebody would do this?
Speaker B:Because humans evolve.
Speaker B:We're evolutionary.
Speaker B:We are going to become a type 2 civilization at some point in time.
Speaker A:Yeah.
Speaker A:But I don't.
Speaker A:I have to.
Speaker A:I have to pick a side.
Speaker A:I have to believe that he.
Speaker A:Somebody can do this.
Speaker A:I can't just say, no, nobody can do this.
Speaker B:Listen, I know you're in the corporate world, so I'm gonna break this down for you.
Speaker B:Right.
Speaker B:I know that you feel that you need a project manager to lead the organization to its end conclusion on this particular subset of KPIs heard this.
Speaker B:In order to really get the collaborative buy in, you need somebody who's going to carry the torch, if you will.
Speaker B:Someone who's going to be your cultural leadership.
Speaker A:Yeah, yeah, yeah.
Speaker B:Someone's going to manage you down to the Kris, the KPIs and deliver upon those expectations.
Speaker B:Side.
Speaker A:Yeah.
Speaker B:Who's that person gonna be?
Speaker A:It's got to be him.
Speaker A:I get it.
Speaker B:I'm just saying, who's it going to be?
Speaker B:You trust Bill Gates.
Speaker B:I'm g. Say, Bezos don't look like a good contender right now.
Speaker B:Rockets blowing.
Speaker A:This doesn't feel like somebody's assigning him.
Speaker A:This feels like very much his own doing.
Speaker A:And it feels like.
Speaker A:It feels like a rushed liquidity event for him.
Speaker B:It very much does.
Speaker B:Right?
Speaker B:Yeah.
Speaker A:And.
Speaker A:And it just feels like with all these other companies.
Speaker A:You said anthropic and OpenAI are trying to raise a hundred billion.
Speaker A:SpaceX trying to raise 75 billion.
Speaker A:Google raising 80 billion.
Speaker B:Right.
Speaker A:It's like Michael Saylor's selling off positions off Bitcoin.
Speaker A:Like, what's going on?
Speaker A:Why are people needing all this liquidity now?
Speaker A:What do you know that's coming around the corner?
Speaker A:Or what do you feel like you're hedging against?
Speaker B:All right, I got your back on this.
Speaker B:But before I do, all complaints about cryptocurrency need to be addressed, as said@highstandardpodcast.com that's S A I E D@highstandardpodcast.com I am not taking the virtual X for you.
Speaker A:Virtual.
Speaker B:This will be a real.
Speaker A:All right, virtual high fives.
Speaker A:Are also welcome.
Speaker B:Yeah, there's nobody who's giving you a virtual high five.
Speaker B:Okay.
Speaker B:All I get is, you guys need paper hands.
Speaker B:And I'm like, it's not me.
Speaker B:And the worst part about it is they can't tell the difference between two brown guys with beards.
Speaker A:I can't have.
Speaker B:I know.
Speaker A:That's why I did this.
Speaker B:Yeah, I'm the one with the mullet.
Speaker A:Screw that guy with the.
Speaker A:With the gray beard.
Speaker B:Yeah, yeah.
Speaker A:Everyone has gray beards.
Speaker B:Yeah, right?
Speaker B:All right, so, Rajeel, if you'll be so kind as to pull up the next chart.
Speaker A:Can have paper hands if you never bought anything.
Speaker B:Yeah.
Speaker B:Well, you might be.
Speaker B:You might be right.
Speaker B:You might be wrong.
Speaker B: Os and similar listings since: Speaker B:You have.
Speaker B:Interesting.
Speaker B:So you have to look at the offer size.
Speaker B:The offer size of Saudi Aramco.
Speaker B:$38 Billion for a $2.4 trillion company.
Speaker B:They were making a ton of money, by the way, back then.
Speaker B:Yeah, they were making, let's see here, blah, blah, blah, 90 to $110 billion a year in profit, not revenue.
Speaker B:Yeah, profit.
Speaker B:That's just bang, bang, pow, pow at the end of it.
Speaker B:You know what I mean?
Speaker B:Like, that's.
Speaker B:That's the dynamite, right?
Speaker B:Yeah.
Speaker A:Boom goes the dynamite.
Speaker B:And we all know how rich the Saudis are.
Speaker B:And because it's coming from this, the whole Saudi family is coming from this.
Speaker B:Right?
Speaker B:Like this.
Speaker B:Right.
Speaker A:Like everything you've ever seen them spend.
Speaker B:Money on coming from this.
Speaker B:Yeah.
Speaker B:Like all that unnecessary buying and stuff, it all came from this.
Speaker B:And some other stuff, too, from legacy money.
Speaker B:But, yeah, you got Alibaba below that, Visa way back that Petro China behind that.
Speaker B:And then way at the top with a $75 billion offer price, more than double the 38 billion of Saudi Aramco, which was making a ton of money.
Speaker B:You've got a 1.8 trillion plus market cap less than the market cap of Aramco, but a bigger offer size.
Speaker B:And this company is not making money.
Speaker A:Yeah, this is a hard sell, bro.
Speaker B:It's not.
Speaker A:It.
Speaker B:Oh, God.
Speaker B:It's not that it's a hard sell.
Speaker B:It's that it's.
Speaker B:It's a dream.
Speaker B:You're buying into the dream that this could be.
Speaker A:Yes.
Speaker B:Oh, and we got to issue an apology.
Speaker A:We do.
Speaker B:Yeah, man.
Speaker A:An apology.
Speaker B:This sucks, because you're a terrible human being.
Speaker B:Me And I'm associated with your terrible human being.
Speaker B:What did I do?
Speaker B:We may have both done it.
Speaker B:I don't know.
Speaker B:I'm confused.
Speaker A:I have a feeling it was just Chris.
Speaker B:No, I don't.
Speaker B:I don't know.
Speaker B:I don't know who did it.
Speaker B:Okay, we don't need to fact check this one.
Speaker A:I'm gonna tell you right now who did it.
Speaker A:Which episode was this?
Speaker B:So I walk into the wealth advisor's office today and they're telling me how they're going to break the money and all that stuff and whatever.
Speaker B:And then, you know, because we.
Speaker B:We run a little podcast, they're like, are you cool with the spending?
Speaker B:I'm like, no, I'm cool.
Speaker B:I trust you guys and like, we know your feelings on this.
Speaker B:And I'm like, nah, man.
Speaker B:We say that for the show.
Speaker B:Put it all in Tesla.
Speaker B:But so we have a conversation and then like one guy stops me in the break room because I went to their break room because I'm an invasive bastard and I'm drinking my energy drink and he's like, hey, man.
Speaker B:Hey, Phil.
Speaker B:You know Phil?
Speaker A:Oh, yeah.
Speaker B:And he goes, hey, well, shout out to Phil.
Speaker B:Yeah, the homie love him.
Speaker B:He goes, hey, man, you know Michael Saylor has a fake eye, right?
Speaker A:Damn.
Speaker B:Damn.
Speaker A:Wait, we didn't say.
Speaker A:We talked about his eye.
Speaker A:You.
Speaker B:You.
Speaker B:We said that.
Speaker B:We said it looked like.
Speaker A:No.
Speaker A:Is it Michael Burry?
Speaker B:Michael Burris.
Speaker B:Michael Burry.
Speaker B:Not Michael Taylor.
Speaker B:Oh, I. I'm just.
Speaker B:I'm traumatized.
Speaker B:I'm trying to avoid it.
Speaker B:Yeah, Michael Burry has one fake eye.
Speaker A:I did not know that.
Speaker B:Yeah, you took shots at Michael Burry, bro.
Speaker B:One of them is fake.
Speaker B:Hold on.
Speaker A:I didn't take a shot.
Speaker A:I said that when people hyper focused, the eye becomes.
Speaker B:Yeah, he did the quote.
Speaker B:He was so offended.
Speaker B:He knew the quote.
Speaker A:Damn.
Speaker B:Yeah, you gotta apologize to Michael Burry, dog.
Speaker A:Oh, I also took a shot at Kobe too.
Speaker B:No, you didn't.
Speaker B:Yeah, we pulled up Kobe.
Speaker A:Didn't we pull up Kobe?
Speaker B:Yeah, you said Kobe had a one eye face.
Speaker A:I did not.
Speaker B:This is up.
Speaker B:Read this.
Speaker B:What is.
Speaker B:No, it's.
Speaker B:I read it.
Speaker B:You did this.
Speaker A:I did not do this.
Speaker B:We had to make a public apology to Michael Burry.
Speaker A:I just said, what's wrong?
Speaker A:It was wrong.
Speaker A:I asked, asked what's wrong with his eye.
Speaker A:You didn't have an answer for me.
Speaker B:Yes, Michael Burry has a prosthetic glass eye.
Speaker B:He lost his left eye to a rare form of cancer, by the way, at the age of two you insane, sensitive prick.
Speaker B:You're going to hell.
Speaker A:Damn.
Speaker B:Yeah.
Speaker A:Yeah.
Speaker B:I feel bad.
Speaker B:Hey, man, I don't think you know this.
Speaker B:I'm like, no, I did not know.
Speaker A:Does your eyeball size, like, change over time?
Speaker B:I'm not doing.
Speaker B:Yeah, I'm not doing this with you.
Speaker B:Google that.
Speaker B:I'm sure it does.
Speaker A:Does it stay the same?
Speaker B:No, I'm sure your head grows.
Speaker A:Your head grows, but does your eyeball grow?
Speaker B:I think you have to.
Speaker B:I mean, if you lost it at two, bro, he went through several different.
Speaker B:I mean, his.
Speaker B:His head got bigger.
Speaker B:Yeah.
Speaker B:We are humans.
Speaker A:No, we did not know.
Speaker A:Hold on.
Speaker B:Know that.
Speaker A:Hold on, hold on.
Speaker A:We didn't know.
Speaker A:Yes, your eyes do grow after birth.
Speaker A:Okay.
Speaker A:Damn.
Speaker A:So you had to do multiple times.
Speaker B:Don't do that.
Speaker B:Don't make it more real than it has to be.
Speaker A:So bad.
Speaker B:I didn't know.
Speaker A:We're so bad.
Speaker A:Thank you, thank you.
Speaker A:Thank you for bringing it to our attention.
Speaker B:In his defense, it must be a really good prosthetic, because I had no idea.
Speaker A:Yeah, it's great.
Speaker B:Yeah.
Speaker B:But we are terrible human beings.
Speaker B:When we try to insult people, we try to insult people that we don't take advantage of, like, their insecurities.
Speaker A:Look at the integrity of the show.
Speaker B:What?
Speaker A:Willing to address it live, right now.
Speaker A:Apologize.
Speaker A:We're sorry, Michael.
Speaker B:You think he listens to the show?
Speaker B:No, man.
Speaker A:Somebody should send it to him.
Speaker B:Yeah, yeah.
Speaker B:These guys.
Speaker B:I had no idea.
Speaker A:Yeah, I had no idea, too.
Speaker B:And of course, then I'm like, I feel like I'm closing one eye.
Speaker A:I'm kind of ashamed.
Speaker A:Like, I feel like that's something we should have known.
Speaker A:We're so plugged in.
Speaker B:Yeah.
Speaker B:I'm not taking that bait.
Speaker B:I'm not taking the bait.
Speaker B:I'm not taking the bait.
Speaker B:All right, let's go to Bloomberg here.
Speaker B:This is every portion of the show where he gets to bash crypto for an hour.
Speaker B:Crypto liquidations top $1 billion as Bitcoin slides deepens.
Speaker B:And you might be saying to yourself, wait a minute.
Speaker B:Why?
Speaker B:Why are we going from.
Speaker B:Yeah, calm yourself.
Speaker B:Calm yourself.
Speaker B:Okay.
Speaker B:You're still in apologetic mode.
Speaker B:You gotta be sad, right, rv.
Speaker B:All right, Just keep one eye on the slide.
Speaker A:Hey, wow.
Speaker A:You can joke about it because he's rich.
Speaker A:It's okay.
Speaker A:You can joke about it because he's rich.
Speaker B:That one eyes made way more money than all of us.
Speaker A:It's okay.
Speaker A:What's your excuse, bro?
Speaker A:You got two eyes, he's got one.
Speaker A:Come on.
Speaker A:That's true.
Speaker B:We were Just like I have to turn to my resignation now.
Speaker A:I just got back from furlough.
Speaker B:This is wildly inappropriate.
Speaker B:I'm going to call somebody.
Speaker B:All right.
Speaker B:So sourcing bitcoin sentiment has triggered souring.
Speaker B:Sorry, I can't even read it.
Speaker B:My eyes are.
Speaker B:No, tearing up.
Speaker B:My eyes.
Speaker A:I got my eye on you.
Speaker B:All right.
Speaker B: to liquidations over the past: Speaker B:Wow.
Speaker B:As the largest digital asset sank back to a two month low, this forced deleveraging.
Speaker B:The automatic mandatory closure of high risk trades by crypto exchanges is the largest volume seen since February.
Speaker B:According to data compiled by Coin Glass.
Speaker B:Coin?
Speaker B:Yeah, coin glass.
Speaker B:Almost $800 million in positions in Bitcoin were wiped out.
Speaker B:People would bought into the rhetoric that if you leveraged bitcoin and then you took a loan on it, you didn't pay tax on it as earned income.
Speaker B:So that, that was, that was the CPA advice.
Speaker B:Well, that's all good as long as you don't have wide swings of volatility in your price.
Speaker B:Yeah, just a couple, couple months back early in the year is over $120,000 a coin.
Speaker B:Now you're below $70,000.
Speaker A:That fluctuation right there is what keeps me out.
Speaker B:Yeah, well there's a lot more is going to keep you out here, chief.
Speaker B:So that's on.
Speaker B:All right.
Speaker B:Bitcoin slipped as much 7% below the $67,000 mark on Tuesday for the first time since April as lingering concern, conflict in Iran and selling by major holders Strategy Inc.
Speaker B:Continued to dent investor appetite.
Speaker B:I think there's more to the story.
Speaker B:I have a theory.
Speaker B: from an all time high around: Speaker B:Yeah, and of course you might be saying, well that's just bitcoin.
Speaker B:Chris.
Speaker B:No, my second favorite crypto that I used to hold.
Speaker B:I used to huddle baby.
Speaker A:Ethereum.
Speaker B:Ethereum.
Speaker B:Having a bad day man?
Speaker B:Yeah, it's not, it's not good.
Speaker B:180 Crypto rally shows new INVESTING ERA as Bitcoin melts, the move stands out.
Speaker B:As in a market otherwise marked by fading risk appetite.
Speaker B:US Bitcoin and Ethereum exchanges traded funds have posted net outflows of approximately 3.4 billion and 674 million respectively since May.
Speaker B:By contrast, two newly listed funds, Bitwise Asset Management and 21 Shares tracking high hype a new cryptocurrency have gathered about $180 million in assets with three weeks of launch.
Speaker B:Yeah.
Speaker A:When you get large, when they get Crypto itself gets large swings like this.
Speaker A:Right.
Speaker B:I don't think it's supposed to, it.
Speaker A:Has, it has, it has.
Speaker B:Right.
Speaker A:My initial like gut reaction is this is institutional money that's shifting and moving it.
Speaker A:For it to shift like this.
Speaker A:This is not your, your everyday like investor that's deciding like yeah, I, I just, I'm, we all need, I need to pull out now because I, I, I, I don't know where this is going to, for it to swing as much as it has this, it feels like like large institutional money is shifting.
Speaker B:Well, wait for it, wait for it.
Speaker B:We got more coming here.
Speaker B:So I'll just cut to the, the sexy part here.
Speaker B:The slide comes as a revival.
Speaker B:The artificial intelligence trade kept fueling Wall street momentum with stocks also rising on hopes for an agreement that would end the war, which we know did not come.
Speaker B:We also went on.
Speaker B:For most of its history, crypto traded as a single story.
Speaker B:Bitcoin was digital gold.
Speaker B:Ether was a wager on the blockchain adoption.
Speaker B:I haven't heard anything about blockchain adoption in recent weeks and months.
Speaker A:Right.
Speaker B:It's been all AI, all AI, but nothing about the blockchain.
Speaker B:And the blockchain was supposed to have this intrinsic value that was going to make it the new, new platform for all of us, for everything, for receipts, for tracking.
Speaker B:And I don't know that anybody bought in.
Speaker A:Yeah, it feels like that's something that could be easily adopted, right?
Speaker B:Really could.
Speaker B:Smaller tokens were higher risk versions of applications built by decentralized Rails.
Speaker B:What was typically missing was a clear answer to the basic investor question.
Speaker B:How does value generated by a blockchain business accrue to token holders?
Speaker B:Now by decrypt, why Ethereal could tank another 25% before finding a bottom.
Speaker B:Ethereum fell below $2,000 on June 2 and hasn't looked back.
Speaker B:There are several possible reasons beyond the typical macroeconomic winds why ETH may be especially bearish the moment key developments at the Ethereum foundation have jumped.
Speaker B:I'm sorry, key developers at the Ethereum foundation have jumped ship.
Speaker B:Some very vocal high profile supporters have sold their bags and Ethereum ETFs have now logged 15 consecutive trading days of net outflows.
Speaker B:And of course we all thought that Bitcoin was digital gold so it would be a hedge against inflation.
Speaker A:Yep, that was the dream that was sold.
Speaker B:That was the dream that was sold.
Speaker B:Ethereum was going to be the blockchain web3 technology.
Speaker B:You know and there was all this hype around it, which has seemingly gone very silent.
Speaker B:And of course there's a lot of money still in these places.
Speaker B:But let's, let's break down a little bit of the logic as to why these were so sexy.
Speaker B:And before we do Financial Times, Gold replaces the US Treasuries as the world's top reserve asset.
Speaker B:According to ecb, Gold has officially displaced U S Treasuries as the world's top reserve asset, according to a report by the European Central Bank.
Speaker B:Central banks now hold 27 of the official foreign reserves in gold, while the share of U S treasuries has dropped 22%.
Speaker A:So, so, so the US can no longer claim it's the world reserve currency.
Speaker B:Gold is now the world reserve currency, not bitcoin.
Speaker B:Now we always knew that that was.
Speaker A:Going to be the case.
Speaker B:I don't know that we knew that it was going to be the case, but it seemed like the more pragmatic approach, right?
Speaker B:Tangible, real world asset.
Speaker B:It's been the reserve currency in fortnite.
Speaker B:Yeah, we knew what it was and there wasn't some dude named Satoshi behind it who we had no identity on.
Speaker B:Right, right.
Speaker B:I love gold.
Speaker B:Yeah, there you go.
Speaker B:So my theory is going to take a little bit of time to break down, but I think it makes sense.
Speaker B:I'm looking at, you remember during the hype of bitcoin and ethereum and crypto over the last, like call it 10 years, okay.
Speaker B:There was this palpable amount of hope in people.
Speaker B:So much so that popular culture made up terms diamond hands, wet paper towel hands, side hands.
Speaker B:Yeah, Right.
Speaker B:And it was, you were either in.
Speaker A:The crew, in group, out group, in.
Speaker B:Group, out group, or you were out.
Speaker B:Right.
Speaker B:And if you were in, the hopes and dreams of just manifesting millions of dollars were in everybody's like, foresight.
Speaker A:Yeah, this is your way out.
Speaker B:It was a hope.
Speaker B:Yeah, a hope play.
Speaker B:Everybody bought in to the hope that this could decentralize things.
Speaker B:And at the same time, you had Robinhood kind of really picking up and they were going to democratize this space and it was sensationalizing.
Speaker B:It was empowering the retail investor in a way that E Trade and all these institutions that tried to get into retail investing really couldn't break through to.
Speaker B:They didn't have cultural adoption the way Robin Hood did.
Speaker B:And at the same time, cryptocurrency is blowing up.
Speaker B:People suddenly see their, their wallets or crypto wallets blow up.
Speaker B:And then you have these institutional companies that cater to them Like Robin Hood come in.
Speaker B:You had Coinbase come in and all these people coming in and they were chatting in the banking system.
Speaker B:But then it got a rough go and now you're seeing, you know, institutional adoption and ETFs roll out and people.
Speaker A:Are like, yes, this is our time, it's legitimate now.
Speaker A:We're here, we've made it.
Speaker B:Yeah, we've made it.
Speaker B:And then right now, when it's supposed to be flourishing, it's not.
Speaker B:Michael Saley does his PR tour a couple months ago saying, it's going to come back, it's going to come back, it's going to come back.
Speaker B:And I guarantee if you talk to him today and say the exact same thing, the only problem is he spent all his gas.
Speaker B:The last time it dropped below 70,000.
Speaker B:And again, we talked about this and we, and we talked about how, why.
Speaker A:Is this a, why is this its current value of what, 63,000, 67,000.
Speaker B:Yeah, Rejeel, one of us, chosen one.
Speaker B:Yeah.
Speaker B:One of us knows the other one just tries to install crypto bros out here.
Speaker B:Again, it's saeed at higher.
Speaker A:Why, why is that?
Speaker A:Why is that below the threshold?
Speaker A:It costs 80,000 to mine it so well.
Speaker B:So there is an economic obsolescence function built into the crypto mining system.
Speaker B:Whereas the cost of the as the price of a coin drops below the cost of manufacture, which right now is about 80,000 and it depends on where you are in the world.
Speaker B:Some places have more expensive, low cost.
Speaker B:The bitcoin miners will go offline to drive the cost down and change the cost dynamic.
Speaker B:So there is a built in mechanism into the algorithm of bitcoin that allows it to lower its cost when the overall price of a coin drops and that functionality is there.
Speaker B:Now that's a bad thing to happen because it's going to drive prices down until they pull back up and you have to have some type of mechanism to pull it back up and then miners come back online and so on and so forth.
Speaker B:But also remember, there's a fit, there's a finite amount of bitcoin too.
Speaker B:But the real problem is, is that you had a counterculture response to it.
Speaker B:We just saw, what's his name, Ben McKenzie, come out and talk about, he wrote a book, he did a full documentary documentary on why he thinks crypto's a scam.
Speaker B:And you had a lot of politician buy into cryptocurrencies in general that seemed to have gotten a huge amount of tailwinds from their investments that made them a lot of money.
Speaker B:During this time and now they've made their money.
Speaker B:It seems to be that there doesn't seem to be any wind in the sales of cryptocurrency at this juncture.
Speaker B:I'm sure Michael Saylor would come out and do it again if he could, but he's already done that circus and act once.
Speaker A:He's done that circus and act and it's tough when the lead spokesman.
Speaker A:You would call him probably the lead spokesman for crypto.
Speaker B:Right?
Speaker B:No, I don't want to insult the crypto bros out there, but.
Speaker B:But for him to come, he's been a big advocate.
Speaker A:For him to say I would never sell a single bitcoin and for him to liquidate, what does that say?
Speaker A:Not a lot.
Speaker A:I mean, not a lot.
Speaker A:Not a huge chunk, not a huge percentage of his portfolio, but he still did it.
Speaker A:What was the explanation?
Speaker B:I don't know that I saw.
Speaker B:It was.
Speaker B:It was like 32 coins, something like that.
Speaker B:Yeah.
Speaker A:Can you look it up, Rajill, see if he even offered an explanation?
Speaker B:My look on this is, is I think that we have also seen at the same time a die down of rhetoric around just bitcoin and web 3.
Speaker B:The diehard people have now lost the attention.
Speaker B:Right, but where is that attention at right now?
Speaker B:Everybody where does shift to.
Speaker B:Yeah, everybody still has the same tension.
Speaker B:Homes are still very expensive.
Speaker B:Affordability is still terrible.
Speaker A:Yeah.
Speaker A:So I think Michael Sellers company strategy sold 32 bitcoin worth about two and a half million to fund preferred stock dividend obligations and to deliberately.
Speaker A:What does that inoculate the market?
Speaker A:By demonstrating that the asset is highly liquid and can be easily monetized.
Speaker A:That's a good spin.
Speaker A:Let me show you how good, how easy this is to liquidate this when.
Speaker B:You're selling it for about half of what it used to be worth, brother.
Speaker B:It's usually.
Speaker B:It's usually easy to liquidate it.
Speaker A:Yeah, that's right.
Speaker A:Yeah, that's right.
Speaker B:It's a good pitch.
Speaker A: at: Speaker B:Listen, baby, I only cheated on you.
Speaker A:Because I wanted to show you it's at 63, 000.
Speaker A:And what price was it that I said that it was at 63.
Speaker A:And what did you say that it was at 67.
Speaker A:Thank you, sir.
Speaker A:It was 67 earlier today.
Speaker A:So who's plugged in?
Speaker B:You have your iPhone in front of you.
Speaker A:So do you.
Speaker B:I'm not looking.
Speaker A:You got the widgets.
Speaker B:I'm not sitting.
Speaker B:You're the one with the widgets on bitcoin.
Speaker B:Bros.
Speaker B:Yes, you are again.
Speaker B:Say it.
Speaker B:A higher standard podcast.
Speaker B:But look, you know what that excuse is like.
Speaker B:It's just like me saying, hey, baby, I went out and had sex with somebody else to show you how sexy I am for you.
Speaker A:Right?
Speaker A:You're welcome.
Speaker B:You're welcome.
Speaker A:The value.
Speaker B:I wanted you to know how sexy I am.
Speaker A:I still have value.
Speaker B:Yeah, right.
Speaker B:I didn't want to do it.
Speaker A:I want you to know you got a dime piece right here.
Speaker B:Yeah.
Speaker B:But I had to let you know how easy it was for me.
Speaker B:I'm plugged in, right?
Speaker B:Yeah.
Speaker A:I'm out here.
Speaker A:They shot calling on me.
Speaker B:Yeah.
Speaker A:Parking lot pimping.
Speaker B:I'm trying so hard not to make any.
Speaker B:Yeah, just.
Speaker B:Just keep it together, Chris.
Speaker B:Keep together.
Speaker B:Keep together.
Speaker B:All right, so you're welcome.
Speaker B:Yeah.
Speaker B:Live action.
Speaker B:Moana coming out.
Speaker A:Damn.
Speaker A:Transition to Disney is crazy.
Speaker B:Yeah.
Speaker B:And they fired all the Marvel anyway.
Speaker B:Okay, let's get.
Speaker B:Stay on top.
Speaker B:Focus, focus.
Speaker A:We're now rain guys.
Speaker B:Yeah, yeah, we're about that.
Speaker B:So I believe that because the, the pricing and affordability is still a huge problem and it hasn't gotten any better.
Speaker B:And frankly, I don't think it's gonna get any better with some of what's going on.
Speaker B:I understand the Google impression here, but I think it's going to drive treasury prices up.
Speaker B:My, my, my two cents.
Speaker B:At least near term.
Speaker B:Anyway, I looked at the market today and I thought to myself, okay, so gold is now rising.
Speaker B:Cryptocurrency is now lowering.
Speaker A:Shout out to Ray Dalio, by the way.
Speaker B:Yeah.
Speaker A:Says you make up 20% of your portfolio.
Speaker B:We're seeing a risk off market and we have three massive IPOs coming up, arguably the three largest in history.
Speaker B:History.
Speaker B:SpaceX leading the way, satellites, rockets, but really, this is an X AI play.
Speaker B:Anthropic confidential filing.
Speaker B:We'll hear more about that over time and OpenAI behind that at some point.
Speaker A:Also raising liquidity.
Speaker B:Also raising liquidity.
Speaker B:And when you look at the three of them, you go, oh, my God.
Speaker B:Everybody who had the hope of making a ton of money in cryptocurrency is liquidating their cryptocurrency position to buy into what they think and feel has the highest upside potential.
Speaker B:And they don't feel that crypto has the same upside potential it once did anymore.
Speaker B:They felt, they now feel it went up, it came back down, it stayed down.
Speaker B:I don't feel like it's going to rally back up.
Speaker B:And if it doesn't rally back up soon, there's institutional investors who can and likely will try to manipulate this to do that.
Speaker B:But you also have some lawsuits by Michael Saylor against Jane street for manipulating price.
Speaker A:That's right.
Speaker B:So because of that, everyone's really hawkish.
Speaker A:It's okay when it benefits him though.
Speaker B:It's a strange set of circumstances.
Speaker B:So that being said, I believe that you're going to see the retail investor back, Elon Musk and SpaceX.
Speaker B:I think you're going to get the same type of hype and buy in you saw in Bitcoin and cryptocurrency in that retail round.
Speaker B:Because one 35 bucks a share sounds like a lot.
Speaker B:Yeah, but it's just low enough for people to go to the moon, baby.
Speaker B:Remember where bitcoin started?
Speaker A:Right, Exactly.
Speaker B:And this is a man who can use his platform and use it to get it out there to the world to have that rhetoric buy in.
Speaker B:I mean, frankly, if you really wanted to, I'm not saying that he would, but if you really wanted to and said, hey, make this the number one trending topic or push this out to people who own cryptocurrency, he could filter and push the narrative that way.
Speaker A:See, but like getting behind, getting behind a company with AI and look, although it's a bit more dangerous because we talked about at the top of the show there will be a winner and there will be tons of losers.
Speaker B:Yeah, but that's why he pitched his, his S1.
Speaker B:You're not getting behind AI.
Speaker A:Yeah.
Speaker B:You're getting behind humanity.
Speaker A:Right.
Speaker B:It's the light of civilization.
Speaker B:The light of humanity.
Speaker A:Well, yeah, exactly.
Speaker B:You know, I mean this is your digital Jesus.
Speaker B:1251 Times.
Speaker A:Well, who's not going to want to.
Speaker B:Get behind that digital Jesus?
Speaker A:Yeah, I mean, I'm in.
Speaker B:I think you're going to see a continued sell down a cryptocurrency while those people who are liquidating positions are trying to get ready to gear up to buy into all three of these.
Speaker A:Yeah, see that, that I can get behind because it's, it's a company still trying.
Speaker A:Not that SpaceX.
Speaker B:Right.
Speaker A:But any AI company, Anthropic, you name it.
Speaker A:Right.
Speaker A:Even OpenAI.
Speaker B:Right.
Speaker A:Because they actually have users.
Speaker A:Right.
Speaker A:That and we understand how hard it is to get people to cross over, but at least it's a company that is providing something.
Speaker A:Cryptocurrency feels like it's all based on hype.
Speaker A:People are trading it like it's a stock.
Speaker A:There's no what, you're not getting anything out of it.
Speaker A:So we're eventually, I, I, oh, I Always thought that it's going to be.
Speaker B:A rug pool, so.
Speaker B:And I'm glad you mentioned that because my fear and I. I don't know if this is going to materialize or not.
Speaker B:Somebody will win this AI race.
Speaker B:I want Elon Musk to win it because he has the Starlink network and he has all these ambitions that seem to have humanity interlaced with it.
Speaker A:If you were a betting man, who would you bet?
Speaker B:Anthropic all day.
Speaker A:Yeah.
Speaker B:I think Anthropic is the one who gets the AGI first at this cadence.
Speaker B:But for all we know, some kid working in a basement in his mom's garage with enough of the right hardware and software could pro.
Speaker B:I mean, some of these models that are free now, they're amazing.
Speaker B:I mean, from when I started, I mean, I've only been playing with AI for.
Speaker B:I don't know.
Speaker A:Is any company going to be big enough to be able to buy Anthropic, though?
Speaker B:No, not by the time they go public.
Speaker B:No.
Speaker B:I mean, you.
Speaker B:I mean, who's gonna.
Speaker A:Yeah, yeah.
Speaker B:No, no, yeah.
Speaker B:No, I don't think so.
Speaker B:I, I think Anthropic is going to be its own beast.
Speaker B:But the.
Speaker B:We're going to see more and more government intervention models.
Speaker B:We saw the government today say they wanted to have early access to models so that they can, you know, calibrate.
Speaker B:But I think that whoever gets the AGI first, the theory is that AGI, this artificial general intelligence, will be able to, to build everything else from there forward.
Speaker B:And then it's just a straight vertical shot, right?
Speaker B:I. I think that's.
Speaker B:And then you have that AI AGI, and then ultimately asi, artificial super intelligence.
Speaker B:Build the technology and the science to get us to the moon, to Mars, to colonies and do all these things.
Speaker B:That's really the bet, right?
Speaker B:Like, how do you take civilization up a notch?
Speaker B:You build another life form that can take us beyond where we can go.
Speaker B:That's, that's the, the pitch boiled down to like a sense.
Speaker B:Right.
Speaker B:If I were to bet on a model right now, it sounds like Anthropic is beating the way.
Speaker B:But then again, this whole thing.
Speaker A:Yeah, doesn't it.
Speaker A:But doesn't it make you think, like, where's the money coming from to do all this?
Speaker B:Well, that, that's the problem.
Speaker B:And this is why the rug pull argument's important, right?
Speaker B:Number.
Speaker B:Well, number one, and then number two is.
Speaker B:Ignores quantum computing's element here.
Speaker B:There's a whole element of technology that is beyond the current binary ones and zero.
Speaker B:System that can take all of this and put it into a realm we do not fully understand.
Speaker B:Right.
Speaker B:And I think once you marry those two technologies, like, it's game over.
Speaker A:Yeah, it feels like, yeah, well, that's a problem we'll solve.
Speaker A:We'll cross that bridge when we get there.
Speaker A:And there's no real answer.
Speaker B:Not yet.
Speaker B:But I mean, we don't understand the bridge, you know, like, at this point in time, just trying to explain quantum computing to somebody and like quantum entanglement, they're like, wait, what now?
Speaker A:Yeah, the only thing you can do is like, it can solve, like, problems they used to take 30 years to solve in minutes.
Speaker A:But what, like, the average person doesn't even understand what that means.
Speaker B:Qubits existing in multiple states at the same time.
Speaker B:1, 0 And 1 and 0 at the same time is incredible.
Speaker B:But the way I explain it to most people, that really blows them away is if I change a qubit in Switzerland, I can make a entangled qubit in California change to reflect that number instantaneously.
Speaker B:Yeah, that sounds like nothing.
Speaker B:But when you think about what computers are, is like ones and zeros on a screen at the very basic core level, like DOS prompt.
Speaker B:Right.
Speaker B:And I can do that wirelessly with something that's just somehow connected somewhere else in the world.
Speaker B:You don't need cellular towers, you don't need any of the technology we have.
Speaker B:You don't need wires.
Speaker A:Right.
Speaker B:You know, and you don't need time to travel.
Speaker B:If you travel from here to Mars instantaneously with quantum technology, what does that mean for what we know of human.
Speaker B:Human existence has been like this linear path of time.
Speaker B:Oh, yeah, right.
Speaker B:And the reason why we can't travel to Mars or with current technology is by the time you get there, you would be 100 years old or, you know, whatever, years old.
Speaker B:Unless you're in some kind of stasis.
Speaker B:Well, what if that's the solution?
Speaker B:So all these things come as in.
Speaker B:But the rug pull element to your point earlier is we're now going to create trillions of dollars of value in at least three companies.
Speaker B:And the problem is, is you've got Nvidia, Microsoft and everybody else tied deeply into these technologies.
Speaker B:Everybody's got capital expenditures, everybody's got money going different places.
Speaker B:And on another episode we should do is these data centers that are going in some places, there's some real problems there, as in.
Speaker B:I've seen some documentaries actually, Ben McKenzie did one on this one, too.
Speaker B:Where data centers going in the Midwest, they tend to go to Drought, like dry areas.
Speaker B:Yeah, but it needs water.
Speaker B:But they need water.
Speaker B:But it's cheaper land and easier development costs.
Speaker B:But the water system is just getting.
Speaker B:Just destroyed.
Speaker B:So like some of the houses neighboring the data centers have like no water pressure.
Speaker B:Oh, they'll turn their faucets on and it's like a trickle.
Speaker B:Some days they don't have water.
Speaker B:They have like sediment in their water now from the, the data center somehow.
Speaker B:And I don't fully understand how that gets into the water supply, but I think it's because the water that's coming in isn't meant for consumption for them.
Speaker B:It's meant for.
Speaker B:There's all sorts of.
Speaker A:Oh, man.
Speaker B:And it starts to sound like the Matrix real quick where like the machines are surviving but we're not.
Speaker A:Yeah, yeah.
Speaker B:It's really bizarre.
Speaker B:So I gotta look into data centers and some of, some of that at some point in time.
Speaker B:No, I want.
Speaker A:Yeah, I want to do.
Speaker A:Because I do know that there are people out like their, like local municipalities, like just on strike with not wanting their public officials to allow data centers to come in that.
Speaker A:What is that?
Speaker A:Data centers in the Midwest are placing an unprecedented strain on local water systems, drawing millions of gallons of municipal water and groundwater daily for evaporating cooling.
Speaker A:Yeah, I believe it.
Speaker B:No thanks.
Speaker B:So I'm worried.
Speaker B:I'm worried a great deal about where the economy's at.
Speaker B:I think all the warning signs are flashing now.
Speaker B:You got a risk off stock market.
Speaker B:You've got gold prices rising in response to the other countries weighing on that.
Speaker B:Instead of our treasuries and currency, we have us doing some buybacks and you've got three of the largest IPOs in history coming and not all of them are going to be winners.
Speaker A:And the F and the fomc, Right.
Speaker A:Or the CME actually signaling that the FOMC will raise rates like it's a coin flip, you know, by the end of the year, if not an absolute certainty by Q1 of next year.
Speaker A:That only creates an even tighter squeeze on the economy.
Speaker A:Right?
Speaker B:That's right.
Speaker B:They raise rates.
Speaker B:Well, you're going to get mortgage rates pushing up no matter what the Fed does in the interest rate term.
Speaker A:Yeah, yeah, right.
Speaker B:So refinance now, kids.
Speaker A:Now.
Speaker A:Yeah, do it now.
Speaker A:Get your applications in.
Speaker B:Yeah, There you go.
Speaker B:Well, that was a old school like show.
Speaker A:I liked it.
Speaker B:Yeah, yeah.
Speaker A:Especially the inappropriate jokes.
Speaker A:I'm really sorry, Michael Burry.
Speaker A:Like, I really didn't know.
Speaker A:We're not.
Speaker A:We're terrible human beings, but we're not.
Speaker B:That bad yeah, yeah.
Speaker B:Phil.
Speaker B:Phil's like, you know, sides are terrible.
Speaker B:Him being right.
Speaker B:I'm like, I know.
Speaker B:I will talk to him.
Speaker B:He made the jokes on purpose.
Speaker B:He just wanted to play ignorant and.
Speaker A:Shout out to Phil, I miss you, buddy.
Speaker B:Yeah.
Speaker A:You got anything for Jill?
Speaker A:Let's see who you're going for.
Speaker A:Nexus first.
Speaker A:Who are we going for?
Speaker A:That's a good question.
Speaker A:Who are we, bro?
Speaker A:Basketball is always better if New York is doing well.
Speaker B:Listen, I love New York.
Speaker A:Come on.
Speaker B:But webbing Yama is bang, baby.
Speaker A:Game one in the books.
Speaker B:Really?
Speaker B:Let's go.
Speaker A:And on the road.
Speaker A:You know, they say a series doesn't start until the road team wins.
Speaker B:I don't even know what that means.
Speaker A:Because you're supposed to win your home games, so.
Speaker B:No, I get it, but isn't webbing Yaman Alien?
Speaker A:He's an alien.
Speaker A:Yeah.
Speaker B:Check it.
Speaker A:Check out the box score, bro.
Speaker A:We doing.
Speaker A:What does a box score mean?
Speaker A:Who are you?
Speaker A:You act like you've never played sports.
Speaker A:Why are you this person?
Speaker B:Is that a score in a box?
Speaker A:Yeah, it's basically the statue.
Speaker A:It's not.
Speaker A:It doesn't show here.
Speaker A:Yeah.
Speaker B:Why don't you say stat sheet?
Speaker B:Yeah.
Speaker A:Stop it.
Speaker B:Why are you saying.
Speaker A:Why are you not.
Speaker A:Why are you not more excited about the Knicks making.
Speaker B:I haven't watched sports like a full sports like game in 10 years.
Speaker A:Why?
Speaker A:Because it's rigged.
Speaker A:It's all rigged, right?
Speaker A:Come on.
Speaker A:It is, right?
Speaker B:I just don't want to.
Speaker B:I don't want three hours to like watching that.
Speaker A:That.
Speaker A:Why?
Speaker B:It's a waste of time.
Speaker A:It's the final.
Speaker A:It's like.
Speaker A:I'm not saying watch the whole season.
Speaker A:It's the finals.
Speaker B:I'm not emotionally engaged.
Speaker A:You will be, though.
Speaker B:I won't be.
Speaker A:We got to get Carter into it.
Speaker A:Look at this.
Speaker A:Let's look at these seats.
Speaker A:Oh, we should actually talk about that.
Speaker B:$5,000 Receipts.
Speaker A:Hold on.
Speaker A:25, 000 Right now.
Speaker B:Wait, what are you talking about?
Speaker A:Hold on.
Speaker A:What is this?
Speaker A:Is this San Antonio?
Speaker A:Yeah.
Speaker A:Okay.
Speaker A:No, look up.
Speaker A:Look up ticket prices at Madison Square Garden for game three.
Speaker A:Let's look that up.
Speaker B:People aren't really paying that, right?
Speaker A:Game three, bro.
Speaker B:It's like institutions and tax write off shit, right?
Speaker B:Like nobody's paying.
Speaker A:Oh, 58,000.
Speaker A:That's like a bitcoin way to tie it back, baby.
Speaker A:Bitcoin watching Nick game.
Speaker A:We're talking upper level $9,000.
Speaker B:Why?
Speaker A:Look at 6,000 right here.
Speaker A:Let's see what that is.
Speaker A:That's literally the Worst seat in the house.
Speaker B:You're outside in the parking lot.
Speaker B:Yeah.
Speaker A:You get.
Speaker A:You're watching ants play.
Speaker B:Yeah.
Speaker A:It doesn't.
Speaker A:It doesn't make sense.
Speaker A:8,000 Is amazing.
Speaker B:So basically you're paying $8,000 for surround sound.
Speaker A:People just want to say that they were in the building.
Speaker B:Why?
Speaker A:Because Timothee Chalamet and Kylie Jenner are there.
Speaker A:Why, of course.
Speaker A:You want to be in the same building as them.
Speaker A:They're doing it for attention.
Speaker A:Media man.
Speaker A:Spike Lee.
Speaker A:107,000.
Speaker B:Spike Lee's on the floor.
Speaker A:You know who says courtside at Knicks games?
Speaker B:No.
Speaker A:Your boy.
Speaker A:The director of your favorite, like, TV show.
Speaker A:What was that called?
Speaker A:Ben Stiller.
Speaker A:Oh, yeah.
Speaker A:Courtside.
Speaker B:Every Nick game, it's Ben Stiller.
Speaker A:Yeah, but you like him.
Speaker A:He's emotionally invested.
Speaker A:Where are you at?
Speaker B:I guarantee you, Ben, he's a.
Speaker A:Is he not a brilliant mind?
Speaker B:He is probably using it as a write off.
Speaker A:Oh, that's what he's doing though.
Speaker A:The way he's cheering.
Speaker A:He's not.
Speaker A:It's.
Speaker A:That's 88, 000.
Speaker A:Gosh.
Speaker A:God, bro.
Speaker A:88, 000 Is crazy.
Speaker A:More than what people make in a year, man.
Speaker B:More than I made this year.
Speaker A:Tracy Morgan's there.
Speaker B:He's still alive.
Speaker A:First of all, first you make fun of Michael Burry.
Speaker A:Now you're.
Speaker A:Now you're killing off Tracy Morgan.
Speaker B:Diabetes is a real problem, bro.
Speaker A:What did that.
Speaker A:I thought you were referencing the car accident that he was in.
Speaker B:Didn't.
Speaker A:He's such a terrible human being.
Speaker B:No, I knew.
Speaker B:I knew you saw the car accident.
Speaker A:Terrible.
Speaker A:Anyways, how many tickets?
Speaker B:Chris, I.
Speaker B:That I can't fathom spending that kind of money on it.
Speaker B:On a ticket.
Speaker B:All right.
Speaker B:I just can't do it.
Speaker A:Anyways, let's go.
Speaker A:Let's go.
Speaker B:Nick's.
Speaker B:Really?
Speaker B:I thought you were webbing Yama guy.
Speaker A:I'm a webinar guy.
Speaker B:What?
Speaker A:I can't like him, but root for the Knicks?
Speaker A:No.
Speaker A:Why?
Speaker B:Because they're playing each other.
Speaker A:So what?
Speaker A:I want the Knicks to win.
Speaker B:Why?
Speaker A:Why not?
Speaker B:You just.
Speaker B:You want the.
Speaker B:Like, you, like, take the approach.
Speaker B:Like you think that way.
Speaker A:Hold on.
Speaker A:That's.
Speaker A:That way I win both ways.
Speaker B:You're a terrible person.
Speaker A:All right, if you haven't done so already, please leave us in honest 5 star review.
Speaker A:I doubt there's anybody still listening.
Speaker B:You've never co.
Speaker B:Signed a Nick in your life.
Speaker B:What?
Speaker A:Yes, I have.
Speaker A:Are you kidding me?
Speaker A:We went to New York recently for my son's birthday and I.
Speaker A:And we bought him a Carmelo Anthony jersey.
Speaker B:And the last time you co signed the Knicks, Latrell Spiro was still on the team.
Speaker B:Yeah, I did.
Speaker A:The guy who choked his coach.
Speaker B:Yeah.
Speaker A:That sounds like some say you would do.
Speaker B:And that's where we're out.
Speaker A:That's why we're out.
Speaker A:If you're watching this on YouTube, there's the cough.
Speaker B:Yeah.
Speaker A:Please make sure you subscribe.
Speaker A:Hit that like button, ring that notification bell, do all the moist goody good stuff.
Speaker A:Leave us an honest five star review.
Speaker A:We will read it on the show.
Speaker A:If it's not five stars, you know you're not being honest.
Speaker B:We haven't read one recently because there hasn't been a review in like a year.
Speaker A:Exactly.
Speaker A:So please make sure and if a big thank you that you can provide the show.
Speaker A:Please refer this episode out to a friend, family member, fellow colleague, fellow investors that you feel like can learn something from the show.
Speaker B:You really go.
Speaker A:Nicely done.
Speaker B:No, it's not nice.
Speaker B:That's too long.
Speaker A:I need to do this in the beginning and this episode is brought to you.
Speaker B:But no.
Speaker B:All right.
Speaker A:All right.
Speaker A:Good night, everybody.
Speaker B:Bye bye.
