Dan and Danny discuss the Fed minutes (0:01:39), similarities to the financial crisis (0:08:40), mega-cap tech stocks (0:11:27), bank earnings on tap (0:16:45), why gold can’t rally (0:21:27), and what could send the S&P 500 back through the lows (0:27:19) . Later, Guy and Danny turn the table on Dan and interview him about his career, how he got started at CNBC, his avid music fandom, and his illustrious lacrosse career.
For the full show notes, transcript, and links to mentioned content, please check out the episode page: https://riskreversal.com/podcasts/on-the-tape-podcast-twisted-thoughts-that-spin-round-the-feds-head/
For the full show notes, transcript, and links to mentioned content, please check out the episode page: https://riskreversal.com/podcasts/on-the-tape-podcast-twisted-thoughts-that-spin-round-the-feds-head/
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00:01:22 Welcome to On the Tape.
00:01:23 I'm Dan Nathan.
00:01:24 I'm here with Danny Moses.
00:01:25 Guy Adami is off for the week.
00:01:28 Danny, how are you?
00:01:29 I'm good, buddy.
00:01:30 I'm jealous of the trip which you are about to take, very jealous.
00:01:33 I am about ... It's like, "Doo-doo-doo, doo-doo-doo."
00:01:35 I'm going to London.
00:01:36 This is why we are recording this Wednesday into the close.
00:01:39 Like I said, Guy is not here.
00:01:41 Danny and I are covering all of the action this week on On the Tape.
00:01:44 And actually, stick around because after we cover this week's volatility, which we've
00:01:48 had a lot of in a lot of different risk assets, we are going to continue our series, Better
00:01:53 Know, an On the Tape podcast host where Danny and Guy interview me.
00:01:57 That'll be fun.
00:01:58 That was fun, actually.
00:01:59 We did that last week, so check that out.
00:02:01 All right, Danny, let's do it.
00:02:02 It's Wednesday afternoon.
00:02:03 We got about 45 minutes left in the trading day.
00:02:06 It's already been a very volatile week.
00:02:07 We've only had two trading days, but we had the Fed minutes that just came out from their
00:02:11 last meeting.
00:02:12 What was that?
00:02:13 From mid-June or so.
00:02:14 We have another Fed meeting coming in July.
00:02:17 The CME Fed Funds futures tracker is basically saying very strong likelihood of another 75
00:02:23 basis point increase.
00:02:24 What did you take away from the Fed minutes?
00:02:26 And let's talk about some of the reactions that we're seeing across risk markets.
00:02:29 Yeah.
00:02:30 So the minutes basically, they said we need to talk a big game because we need to get
00:02:34 inflation down, the expectations for inflation down.
00:02:37 And they basically said in the minutes that over the next few weeks, which is now, we're
00:02:41 going to keep talking a big game because we want to convince the markets that we're going
00:02:44 to do whatever it takes.
00:02:46 But if you read what they actually said in there, I mean, they basically that's exactly
00:02:49 what they said.
00:02:50 And so you're seeing a reaction.
00:02:52 The first reaction, the market was down.
00:02:53 I'm not sure why the Fed minutes did nothing but tell us what we already know, which is
00:02:57 the Fed is talking a bigger game than I think they will actually follow through with.
00:03:00 And so we'll see.
00:03:01 We're having a lot of moves here.
00:03:03 Obviously, Treasury markets are very volatile.
00:03:05 Oil is very volatile.
00:03:06 Let's talk about Treasuries because I think it's truly astounding.
00:03:08 If Guy was here right now, I think he'd be jumping out the window with what we've seen
00:03:12 just today in the two year Treasury yield.
00:03:15 The trade is as low as 2.76.
00:03:17 It's trading right now about 2.96 percent.
00:03:21 That is an extraordinary percentage move, especially in intraday range for a two point
00:03:26 whatever yield right on a two year note.
00:03:29 What did the Fed minutes say that caused that spike that we've seen over the last hour,
00:03:34 hour and a half?
00:03:36 Obviously, the yield had been coming in.
00:03:37 We've seen the 210 spread invert.
00:03:40 It is the widest spread.
00:03:41 When you say, Danny, that we've had, it's five or six bips or something like that.
00:03:45 So what has happened specifically in this minute?
00:03:47 And then we're going to talk about stocks, crude, dollar, gold.
00:03:50 We already had this inversion, right?
00:03:52 That had already occurred.
00:03:53 I think we're four bips inverted on the 210.
00:03:55 Basically nothing.
00:03:56 It could change the way this market's trading.
00:03:57 It could change in a minute.
00:03:58 But what it did was this, I think.
00:04:01 I think because they said we're going to talk a tough game until we don't have to.
00:04:04 I think the have to moment, people may think is coming sooner rather than later.
00:04:08 Therefore, I know this sounds as a contraindicator, but I've been saying this for a while.
00:04:12 You would rather have the economy have a better chance for a soft landing.
00:04:16 Let's not talk about the two year for a second.
00:04:17 Let's talk about the 10 year.
00:04:18 10 year yield is going higher here, I think is actually healthier sign for the equity
00:04:22 market than the 10 year going down.
00:04:24 Because the belief will be the Fed will overshoot so much that it will cause a massive recession
00:04:28 and a slowdown.
00:04:29 And therefore, the 10 year yield should reflect that.
00:04:32 So to me, this is telling us that they're talking big game, but with the data we're
00:04:35 going to see.
00:04:36 And let me tell you something.
00:04:37 If you're a bull right now, you're rooting for a negative jobs print.
00:04:40 Why would you root for negative jobs on a Friday?
00:04:42 Because you already had a negative GDP in Q1.
00:04:45 You probably going to have a negative GDP in Q2.
00:04:46 You have the definition of some type of recession already out there.
00:04:50 So that's kind of price into the market.
00:04:51 We're going to go into earning season.
00:04:53 One of the keys in here was about mortgage backed securities, which as we know, is a
00:04:57 multiple trillion part of the Fed's balance sheet, which is being unwound here with treasuries
00:05:01 and the rolling them up.
00:05:02 And the concern has been that they've talked a big game in that and it's made mortgages
00:05:05 sell off more than they probably should have relative to treasuries.
00:05:08 They said that they're going to reinvest mortgage backed securities, the amount of
00:05:11 principles from the Federal Reserve Holdings, if they exceed 17 and a half billion.
00:05:15 They also said, I think this is key and I didn't see anyone report on this.
00:05:18 They will allow modest deviations from stated amounts for reinvestments if needed for operational
00:05:24 reasons.
00:05:25 Well, what would the operational reasons would be if they lose control?
00:05:27 The mortgage market goes, hey, why?
00:05:28 I thought that was interesting.
00:05:29 If I'm reading that correctly, it's telling you that they will adjust on the fly.
00:05:33 That should be a very bullish for the market.
00:05:35 I'm not looking at home builder stocks right now or where mortgage rates are relative to
00:05:38 treasuries.
00:05:39 I would take something away from that, that they're acknowledging that things have gone
00:05:42 a little bit crazy in the mortgage market.
00:05:44 So again, Dan, let me just say, I think people underappreciate the amount of trading on treasuries
00:05:49 relative to mortgages.
00:05:50 There are books set up on the street, there are fixed income funds.
00:05:53 When you buy a mortgage backed security yourself, you do the corresponding treasury trade, whatever
00:05:58 that may be.
00:05:59 And I think that's also creating.
00:06:00 So go ahead, Dan.
00:06:01 So you think that's adding to the volatility?
00:06:02 This week, I just think that it's about as confusing as you could get with the dollar
00:06:06 rallying at multi-year highs, the Dixie, the US dollar index above 107.
00:06:12 It's just on a runaway breakout.
00:06:13 We know that the Euro is making 20 year lows and a big part of that Dixie, that basket
00:06:17 against the US dollar is Euro.
00:06:19 So we just talked about the move in yields.
00:06:22 I think obviously crude oil just in the last two weeks is down 20% or so.
00:06:26 It got absolutely creamed on Tuesday down 10% and that had little to do with anything
00:06:31 geopolitical, which we all agree was a large part of the move up earlier this year.
00:06:36 And at some point when you start considering what does a soft landing look like?
00:06:40 Well, you have copper that's absolutely gotten destroyed over the last couple of months.
00:06:44 You have wheat that's come in a lot.
00:06:46 We just mentioned crude.
00:06:47 There's other industrial metals that have just been absolutely destroyed also.
00:06:50 So does that play into it a little bit?
00:06:52 If the commodity complex comes in hard enough and stays down enough, does that give the
00:06:57 Fed a little bit of cover?
00:06:59 I understand that we're going to get this June jobs print and it's going to be, again,
00:07:03 do you want a negative print?
00:07:04 Do you want a strong print?
00:07:05 Your guess is as good as mine, but ultimately there is a scenario maybe where some of these
00:07:10 risk assets that have been going haywire because of all of this uncertainty, maybe all of it
00:07:15 starts to moderate a little bit and they find new levels and then the Fed can kind of take
00:07:19 their foot off the pedal on the hiking front.
00:07:22 The argument will be that some of those things you're talking about were indeed transitory
00:07:26 or impacted by other things, lack of liquidity in the market.
00:07:29 You don't get moves.
00:07:30 I mean, I don't know what standard deviation that is in these metals and in oil, right?
00:07:33 There's massive, you've never seen anything like that before.
00:07:35 So we are in uncharted territory.
00:07:37 And so the answer would be yes, it gives the Fed complete cover and it should blend its
00:07:41 way in over time into their numbers.
00:07:43 And what's interesting is that during the Fed minutes, they also basically were citing
00:07:47 near term, like literally to the minute CPI print, to the minute economic number citing
00:07:53 that.
00:07:54 So if you were to keep with that same feel and you go into the July 26th, 27th meeting
00:07:58 timeframe and we start to see things slowing in conjunction with earnings, which we don't
00:08:02 think will be very good.
00:08:03 We can talk about that in a moment.
00:08:04 You would think again that the Fed is going to pull back.
00:08:06 And again, Fed fund futures are indicating that the Fed is not going to go to their stated
00:08:10 3.4 or 3.5 number.
00:08:13 This is not going to happen.
00:08:14 So again, I think it just adds another element, but I think the Fed gave too much credence
00:08:19 to the point you're making about all the rip and the upside in the metals and stuff.
00:08:22 And now they're going to have to acknowledge the other way.
00:08:25 One thing that's really clear to me, Danny, is that whole idea, the back and forth on
00:08:28 transitory as far as inflation was concerned.
00:08:30 If Russia had not invaded Ukraine and we didn't have the potential disruption to be, and obviously
00:08:36 natural gas and Europe's dependence on Russian oil and all the sanctions, we just wouldn't
00:08:40 be in this position.
00:08:41 We wouldn't be having these inflationary prints and we wouldn't have all of the disruption
00:08:46 as far as supply.
00:08:47 In my opinion, I don't think the Fed was so far off.
00:08:50 I think where they got really screwed up is that they stayed.
00:08:52 And you and I, we were all yelling about this last year.
00:08:55 Why are they still buying $40 billion a month of MBS?
00:08:59 So they overheated so many different markets.
00:09:02 And we're starting to see anecdotally, have you seen on Twitter?
00:09:04 I'm seeing San Diego, which was one of the hottest markets down 20 some percent over
00:09:09 the last quarter or something like that.
00:09:10 Real estate we're talking about.
00:09:11 Yeah.
00:09:12 Real estate.
00:09:13 Las Vegas.
00:09:14 Again, this is residential real estate.
00:09:15 It feels like it's 2008.
00:09:16 I feel like I'm watching the Adam McKay movie with my friend with the bushy eyebrows, Danny
00:09:21 Moses in there.
00:09:23 Doesn't it feel like all over again?
00:09:25 And then the other thing, let's just throw this in here.
00:09:27 It feels like there's lots of elements to the financial crisis, if you will.
00:09:31 If you look at what's going on in crypto and you've been talking about this, all the leverage,
00:09:34 you've been talking about the stable coins.
00:09:36 There was systemic risk as it relates to within that ecosystem.
00:09:40 It hasn't really shown itself in the traditional banking system.
00:09:44 There was a great article, Andrew Ross Sorkin in New York Times Dealbook earlier in the
00:09:47 week where he talked about just the crypto collapse and that Wall Street won and they
00:09:52 avoided all the disasters.
00:09:53 So there's lots of elements to these prior crises.
00:09:56 Don't you agree?
00:09:57 Yeah.
00:09:58 There's all kinds of things going on here.
00:09:59 The channel, my inner guy, Adami here, he'd be talking about a guy born in 1911 who had
00:10:05 the great song which encompasses all of this, which is the great Robert Johnson, which is
00:10:09 credited with literally starting blues and rock and roll and if Crossroads was his song.
00:10:14 And so that's where we are.
00:10:15 And again, give me a little, we went down to the crossroads.
00:10:17 You can't do any of that.
00:10:18 I'm not a good clapton, but I know it's been done by 20 bands.
00:10:21 I'm going to give you a little bit of Pearl Jam later today.
00:10:23 Fair enough.
00:10:24 But that's where we are.
00:10:25 You've got to go on an adventure here and create your own narrative by the minute, by
00:10:29 the hour.
00:10:30 And that's just not healthy in terms of how you got to trade.
00:10:33 People are going to have to start to dig in, lengthen their timeframe or how they're thinking
00:10:36 about risk reward on certain things.
00:10:38 Focus on fundamentals, buy the stocks that they want.
00:10:41 Forget about shorting for a second.
00:10:42 Buy the stocks that they want.
00:10:43 Dan, you've been talking about it.
00:10:44 You've been doing it now for a couple of weeks.
00:10:46 Dollar cost averaging, dip your toe in.
00:10:48 Let's see how these quarters are going to be.
00:10:49 You're going to get outsized moves, both to the upside and the downside off of these and
00:10:52 take advantage of them.
00:10:54 But you're going to have to basically, if you're a portfolio manager or professional
00:10:57 investor, start to come up with a theme.
00:10:59 And it's very, very difficult when your input, Dan, all the things you just mentioned are
00:11:03 changing by the second.
00:11:05 And that has to do even in crypto land with companies that aren't directly in crypto,
00:11:09 but are in it in some form or fashion, have a business line that was going to show growth
00:11:12 because of it.
00:11:13 That has to factor in.
00:11:14 If it's an interest rate plugin and it's some type of bank or financial, that plugs in.
00:11:18 If it's an energy company, it plugs in.
00:11:19 If it's a builder and all these material costs, you plug it in.
00:11:23 Like, how do you weigh how far you want these things to come down, but not too much to indicate
00:11:27 that we're going into a massive recession?
00:11:29 So there's no one answer to that question, Dan.
00:11:32 And I guess my point is you've been covering the buy now, pay later.
00:11:34 There's a subprime element.
00:11:35 There was a housing element.
00:11:36 There was this really speculative equity market element.
00:11:39 I mean, there was lots of different things.
00:11:41 I mean, we've been calling them out for the last 18 months and they all seem to have come
00:11:45 together or cascaded together over the last few months.
00:11:48 One thing I think is really interesting, Danny, is that the MAGA complex, as I call it, the
00:11:52 Microsoft, the Apple, the Google and Amazon, look at them all today.
00:11:55 They're all up about a one and a half, 2% here as we're about 35 minutes into the close
00:12:00 on Wednesday.
00:12:01 And they were some of the first stocks to go up.
00:12:03 I think they're kind of a flight to quality right now.
00:12:06 If you think about it, if you look at all of the charts too, Microsoft, Apple, and Google
00:12:10 are all down about 21, 22% over the last couple of weeks from their highs or from the recent
00:12:16 highs this year.
00:12:18 Amazon down a bit more.
00:12:19 The patterns all look the same on the charts.
00:12:22 They all did not make new lows with the S&P when it was a couple of weeks ago.
00:12:27 I think that's really interesting.
00:12:28 So it almost feels like we're trying to put a little bit of a near-term bottom into Q2
00:12:33 earnings because, and you can agree with this, right?
00:12:35 There's a scenario where maybe the results aren't that bad and the guidance isn't that
00:12:40 bad to justify selling another leg lower in the stock market.
00:12:45 And I seem to recognize your face haunting familiar.
00:12:50 So these are familiar names.
00:12:52 These are safe names.
00:12:53 They're not going to blow you up.
00:12:55 They're down enough where even if they start to miss because of currency, you can feel
00:12:58 safe owning them.
00:12:59 It is a true flight to quality here.
00:13:01 And I think with rates coming down like they did, even though they're kind of going back
00:13:04 up a little bit today, it's a little bit of cover there because that's how they're kind
00:13:07 of programmed to trade that way.
00:13:09 So I think that's why those are acting that way.
00:13:11 Those are going to be the defensive names for this cycle for sure.
00:13:15 It is also interesting.
00:13:16 I don't know if you saw this headline, Amazon made a small investment in Grubhub, which
00:13:20 is the online delivery company.
00:13:22 And as soon as they did that, it's meaningless, I guess, for Amazon.
00:13:25 If you think about it, they're going to layer in those services to Prime, which is great.
00:13:29 They've been adding services to Prime for 20 years since they introduced it.
00:13:33 But look at DoorDash.
00:13:34 I think it was down like 10% or something like that.
00:13:36 Uber, obviously Uber Eats is a big part of their business right now, also getting destroyed.
00:13:40 So I think we're also in this part of the market where some of these big incumbents
00:13:44 are going to have the opportunity to flex as it relates to spending their way out of
00:13:49 a recession, if you will.
00:13:50 I don't know if you remember that saying.
00:13:51 I think it was a CEO at Intel two decades ago used to say, "We just spend our way out
00:13:56 of recessions and then we're really set up well to come out and sing it on the way out."
00:14:00 Listen, the most vulnerable names in this market are the ones with no earnings.
00:14:03 What are the earnings projections in 2022 for Uber and DoorDash?
00:14:07 You're vulnerable by nature when you don't have something to fall back upon.
00:14:11 So you're just seeing that get exacerbated, obviously, on announcements like that.
00:14:14 And so it's good that people are still paying attention and it's another excuse to not own,
00:14:19 those aren't meme stocks obviously, but to not own names which have not proven in the
00:14:22 easiest money cycle in the history of mankind that they could excel.
00:14:27 And they didn't.
00:14:28 And so if they didn't do it then, how are they going to do it now, I think is kind of
00:14:31 the question.
00:14:32 Yeah, no doubt.
00:14:33 I mean, listen, the stocks were excelling for a while because of basically the easy
00:14:36 money cycle, but the path to profitability was never particularly clear for a lot of
00:14:40 these business models.
00:14:41 And again, I mean, I think that's the story of the last couple of years.
00:14:45 It was that pull forward that actually made so many investors aware of these stories,
00:14:50 their ability to capture growth in a very unique market.
00:14:53 But it was that deceleration that we saw in early 2021 on a lot of these business models
00:14:59 that made a lot of investors just run for the hills.
00:15:02 And the other thing I'll just say is like Netflix, this is not a company that was born
00:15:06 in the last five years of the free money sort of era.
00:15:09 It goes back to the late 90s, but this stock is down 70 percent.
00:15:13 Facebook, again, this company went public in 2012, is going to have $125 billion in
00:15:19 sales this year.
00:15:20 That stock is down 50 percent.
00:15:22 So the point here is that there's meme stocks, then there's companies that were born in this
00:15:27 period of just easy capital with no earnings.
00:15:30 And then there's real companies that are just basically seeing material deceleration in
00:15:34 their growth.
00:15:35 So to me, I find the latter kind of interesting.
00:15:38 I mean, I mentioned it, you just mentioned it.
00:15:40 I'm picking at things like Netflix and at Meta and at Snap.
00:15:44 And I think that these are companies that once this economy, however it comes out, soft
00:15:48 or hard landing, these are going to be companies that are going to have to make some pivots.
00:15:52 They're going to have to readjust their business models.
00:15:54 But I think some of the best tech companies are going to use this last couple of years
00:15:58 to really reorient how their workforces are, how they think about profitability on a per
00:16:03 employee basis.
00:16:04 I actually think this is almost a generational reset in some of those sort of Internet names.
00:16:10 Completely agree.
00:16:11 And I think the other thing, Dan, is there's a group of investors that have been kind of
00:16:14 hit hard here that aren't professional investors, but they've been a massive part of the market.
00:16:17 It is what it is.
00:16:18 I don't think that many of them need to shift their focus away.
00:16:21 Like I said just now, go find the quality, stop trying to chase the dirt and try to pick
00:16:25 a bottom in them, because at the end of the day, dirt is dirt and it's not going to accelerate
00:16:29 no matter how this thing turns out.
00:16:31 I don't believe the odds of a soft landing I think are below 5%.
00:16:34 But that being said, again, stop looking for the kind of the quick hit and buy the quality.
00:16:39 I think that's a very tough adjustment.
00:16:41 Let me answer your other question, because I think it's almost like a stock.
00:16:44 The amount of homes that came for sale in San Diego, Las Vegas is really what we're
00:16:47 talking about, the amount of supply, which people waited and waited and waited.
00:16:50 All of a sudden, inflation started to hit them personally.
00:16:53 They thought their home would keep going up in value and they flood the market.
00:16:56 It's really as simple as thinking of it as just an asset that they had, like the soft
00:16:59 market and putting it up for sale.
00:17:01 But it definitely, with mortgage rates going up in conjunction with that, it certainly
00:17:04 was easy to see that would come up at some point.
00:17:06 All right, let's talk real quickly.
00:17:09 Money Center banks are going to report next week, they're going to start reporting here.
00:17:12 JP Morgan at 112.5.
00:17:14 It's down 27.5% on the year.
00:17:18 It's down more than 30% from its all-time highs in October.
00:17:21 We've talked about this group an awful lot here, but in this rate environment, in this
00:17:25 mortgage environment, in this consumer lending environment, so we're seeing it on multiple
00:17:30 different levels.
00:17:31 We just mentioned Buy Now, Pay Later.
00:17:32 We're seeing defaults rise there, so that's more of a subprime thing.
00:17:36 But we're also seeing stocks like American Express trading at 52-week lows down tremendously
00:17:41 in just a matter of months, where it looked like they were bucking any and all negative
00:17:45 consumer trends.
00:17:47 What are your expectations into these prints here and how do you think these stocks trade
00:17:51 on the way out?
00:17:52 Because they've obviously led to the downside all year long.
00:17:54 Yeah, listen, a lot of these banks, some of them have more exposure to Wall Street, some
00:17:58 don't.
00:17:59 I'll talk about the Wall Street banks for a second.
00:18:01 Obviously, capital markets have been hit and I talk about initial public offerings, IPOs,
00:18:05 mergers and acquisitions are low, debt, all this stuff's been dead.
00:18:08 That's kind of priced in.
00:18:09 The one thing that hasn't been priced in is people thought you would have massive loan
00:18:12 growth.
00:18:13 You have loans being originated, but obviously at very different levels than I think people
00:18:16 thought.
00:18:17 And the most important thing to me is credit.
00:18:18 And many of these Wall Street banks, some more than others, JP Morgan, Wells Fargo,
00:18:23 Bank of America, have very large consumer exposure.
00:18:26 And so again, it's nothing catastrophic, but the banks that have not reserved properly
00:18:30 for losses or have under-reserved are the ones you want to stay away from.
00:18:34 And I said it on our market call yesterday, run from the bank which somehow releases reserves.
00:18:39 I don't think that will occur, but we're just going into a new paradigm and there's a shift
00:18:44 here going on.
00:18:45 And again, I think these stocks will be viewed like they're really utility stocks in kind
00:18:49 of a down market.
00:18:50 They're not in danger, they're well capitalized and so forth, but you start to get towards
00:18:54 1.2, 1.3 times book on some of these.
00:18:57 Let's forget about Citi for a minute with it has its own exposures, but JP Morgan, Goldman
00:19:01 Sachs, Bank of America, and these things, they'll start to become very, very interesting.
00:19:04 And we may again test those levels and I'm talking tangible book, not book value.
00:19:08 And so it'll be interesting to see.
00:19:09 I think these companies will continue to earn.
00:19:11 I don't think there's losses coming.
00:19:12 I think people do fear a loss in a commodity.
00:19:15 I mean, you can't have moves in this, Dan, you open the show with these metals and the
00:19:19 materials and oil.
00:19:20 And so somebody is wearing that, whether it's a fund or a bank.
00:19:23 So I think people are just a little bit cautious.
00:19:25 If we stay in this environment we're in right now and these stocks stay down, it's probably
00:19:29 going to be a by the news event, in my opinion, unless there's something catastrophic.
00:19:32 Yeah.
00:19:33 Well, here's the one thing I'll just say this.
00:19:34 If Carter Braxton Worth was here on the day of the vaccine announcements back in early
00:19:38 November, 2020, JP Morgan gapped up from like 105 to about 110 and then just never looked
00:19:45 back and look at the stock here at 112, it's right above that gap.
00:19:49 I mean, that gap is going to be filled.
00:19:51 It probably comes in to a hundred.
00:19:52 But your point is, is that under a soft landing scenario, you probably have one or two more
00:19:57 difficult quarters for these large money center banks.
00:20:00 And you maybe see another 10, 15, 20% downside that's off the table if it's a hard landing.
00:20:06 So the risk reward is starting to look pretty favorable is kind of what you're thinking
00:20:10 for these well-capitalized banks that are going to actually benefit if we do just have
00:20:14 a mild recession and then they start earning their way out as capital markets activity
00:20:19 comes back as loans, come back as residential mortgages, come back, right?
00:20:23 All that sort of stuff.
00:20:24 I mean, I can't tell everyone out there, whether you invest in JP Morgan or Wells Fargo, long
00:20:28 short, how crucial it is to either listen to the conference call, read the transcript.
00:20:32 I know it sounds boring, but they're going to give you a look into everything going on
00:20:36 in the corporate business, in the consumer business, Wall Street business.
00:20:40 You're going to get a pretty good look.
00:20:41 So take the time.
00:20:42 Don't just read the headlines.
00:20:43 Take the time to read it.
00:20:44 I know you won't.
00:20:45 If you want a real picture and Jamie Dimon, listen, say what you want about him, but he's
00:20:48 had a pretty good grip on things now for decades.
00:20:51 He's not dumb.
00:20:52 He knows what's going on.
00:20:53 So let's listen to what he has to say.
00:20:54 I'm sure he's going to mention the Fed a couple of times in a certain way and tell them they
00:20:58 might be overshooting indeed.
00:20:59 He may cry a little bit about that, but let's see what happens.
00:21:02 Yeah.
00:21:03 I would just say this, that yeah, Jamie Dimon's a smart guy, but he also knows how to play
00:21:06 the environment a little bit.
00:21:07 And I think back to January when the markets were very volatile.
00:21:11 JP Morgan, like I said earlier, was underperforming the broad market and Jamie had indicated a
00:21:17 somewhat positive sort of outlook.
00:21:19 And then by the time it was their Q1 print in mid April, he was a bit more negative.
00:21:24 And then when the other analysts, so he kept on changing his tune a whole heck of a lot.
00:21:28 And remember, he's the guy in 2022 that brought us an economic hurricane is coming.
00:21:33 So for all that said, I mean, I think a lot of these guys have to understand the environment
00:21:38 they're in, where their stocks are trading, and then use a somewhat measured tone about
00:21:44 how they see things playing out because they have no crystal balls, just like dumb podcasters
00:21:48 like us.
00:21:49 All right, Danny, let's talk about this because you earlier in the year, you smoked me in
00:21:53 another bet.
00:21:54 I think regular listeners know that you kind of have my number here, but this was in gold
00:21:58 and you thought gold was going to make a quick run to 2000 and it did.
00:22:02 And it went parabolic in that period in February into early March when we had all that geopolitical
00:22:09 uncertainty when Russia started rolling tanks into Ukraine.
00:22:12 Well, since then, it's been an absolute train wreck.
00:22:14 This week, it's got it absolutely destroyed here.
00:22:17 The chart looks horrible.
00:22:19 So talk to me a little bit about this because like what's going on here?
00:22:22 I know that this is the boomer trade.
00:22:23 Give me an update.
00:22:24 What are the boomers saying about their gold?
00:22:26 It's down 2% in the last six months or even less than that at this point, just because
00:22:30 it hasn't looked great recently.
00:22:32 It's been one of the best performing assets.
00:22:34 If it can't rally at the highest inflationary period in 40 years where expectations even
00:22:39 for the balance of this year are higher than they've been for 40 years, when's it ever
00:22:43 going to rally?
00:22:44 I don't disagree that it's underperformed where I thought it would be, but I'm just
00:22:47 putting it in absolute terms.
00:22:48 It's one of the better performing assets that's out there.
00:22:51 Find a better one.
00:22:52 You now have a large short interest, obviously in gold.
00:22:54 We see that on a weekly basis.
00:22:56 It's called the commitment of traders report.
00:22:57 No one's going to look at it.
00:22:58 It's a COT that comes out Friday.
00:23:00 We kind of have an overselling.
00:23:01 I think you had a little bit of geopolitical impact with the inability of Russia to use
00:23:05 gold obviously in trade, which got blocked in there.
00:23:08 You obviously have an economic slowdown.
00:23:09 There is an economic part, but look at silver, Dan.
00:23:11 I think silver is down 26%.
00:23:14 People used to put those things together.
00:23:15 So let me separate gold and silver a second.
00:23:17 I'm still a big, big believer in this.
00:23:19 I think people are making too big a deal.
00:23:21 I agree with you.
00:23:22 It hasn't worked like it should.
00:23:24 I hope all the Bitcoin people out there that said, "Oh, you'll see."
00:23:26 Why don't we do that comparison first, which was I got made fun of last year for gold versus
00:23:30 Bitcoin.
00:23:31 We'll just end with that.
00:23:32 But I'm a big believer here in gold.
00:23:33 No, we're not ending with it.
00:23:34 We're not done with this thing because there was a tweet.
00:23:36 I got to bring this up because it's going to tweak you a little bit.
00:23:38 It's from a guy named Macro Tourist.
00:23:40 He said a simple cheat sheet for gold traders.
00:23:43 Here was the columns.
00:23:44 Event impact reasoning, yields up bad, competition for gold zero, yields down bad, declining
00:23:51 inflation fears, oil up bad, energy input costs going up, oil down bad.
00:23:56 This is all bad for gold.
00:23:58 Global recession fears, stocks up bad, risk on safe haven shunned, stocks down bad for
00:24:03 gold, risk off margin selling, dollar up bad.
00:24:07 Adverse correlation to gold, dollar down bad.
00:24:09 Indian gold tax looming, open interest up bad.
00:24:12 Too many long positions, open interest down bad.
00:24:16 Investors losing interest.
00:24:17 I love this tweet.
00:24:18 I think it's such a great troll for all these gold buzzers.
00:24:21 Okay, so talk to me.
00:24:22 Tell me why the Macro Tourist is wrong.
00:24:25 Because you have negative real rates, that's why, and gold will work in that environment
00:24:28 for sure.
00:24:29 And he doesn't mention geopolitical in there.
00:24:31 We've had negative real rates for years.
00:24:33 If you think we're not making a bet right now, I'm going to make this so tasty for you.
00:24:37 Where's gold right now?
00:24:38 1740?
00:24:39 Yeah.
00:24:40 Okay.
00:24:41 I'm not positioned.
00:24:42 I don't care.
00:24:43 This is going to be too good.
00:24:44 I'll take 2000.
00:24:46 You can have 1600.
00:24:49 Any amount of money that you want.
00:24:50 No, see, here's the deal, dude.
00:24:51 I don't like pressing it.
00:24:53 It's basically trading very near 52 week lows.
00:24:56 So I'm not saying that it's going to break down and go down another 400 points.
00:25:01 Likelihood is that snaps back to that 1850.
00:25:03 So I'm not doing that right now.
00:25:05 And here's the thing.
00:25:06 This is how I feel about you and your gold.
00:25:07 I know someday you'll have a beautiful life.
00:25:10 I know you'll be a star, but in somebody else's sky, it's just not going to be in mine.
00:25:15 I know someday you'll have.
00:25:17 Yeah, it will.
00:25:18 Because listen, again, you started out this segment on gold with this thing.
00:25:22 It's down less than 2%.
00:25:24 But it's not doing the thing that you buy gold for.
00:25:27 But Dan, on a relative basis, it is doing it.
00:25:30 And you know what?
00:25:31 The dollar is the main reason.
00:25:32 All those 10 things you just mentioned, gold is denominated in dollars.
00:25:34 It's pretty simple that that's what's been going on.
00:25:36 But I'll stand by it.
00:25:38 I'm a buyer here.
00:25:39 I think we've actually seen the lows in this thing.
00:25:41 I think we hit the lows today, 1725 or 1720 somewhere.
00:25:45 I don't know what gold closed at.
00:25:46 I know it turns prior to the market closing, but I think the lows have been put in.
00:25:49 So let's just leave it at that.
00:25:50 I'm a buyer here of gold, Dan.
00:25:52 Let's take some stock of where we are here.
00:25:54 So the Fed minutes are out.
00:25:55 I think that I see the stock market, the S&P, into the close now is up nearly 1%.
00:26:00 The Nasdaq is up 1.2%.
00:26:02 So whatever they said, investors aren't particularly worried as it relates to stocks.
00:26:06 We've seen yields spike.
00:26:08 We see the dollar continue to move higher.
00:26:10 Crude really hasn't done a whole heck of a lot during 98.5.
00:26:13 It's definitely off of its lows today.
00:26:15 The Dixie is still around 107.
00:26:17 So it's off of its highs.
00:26:18 Bitcoin, who cares?
00:26:19 It's like 20,000 either side.
00:26:21 What do you think here?
00:26:22 We had a really horrible close to Q2.
00:26:25 We had two consecutive negative quarters for the stock market.
00:26:29 We got off to a kind of shaky start here.
00:26:32 Banks are next week.
00:26:33 How do you think the market trades in that?
00:26:35 Do we rally into that?
00:26:36 I don't think we rally into it.
00:26:38 I think we're just going to churn here.
00:26:39 Literally, it's just a wash every single day, up, down, sideways.
00:26:43 There's not a clear direction in this market.
00:26:44 We won't have that, I don't think, for a few weeks.
00:26:47 I think that this jobs print, it's just a number, but it's very important considering how the
00:26:52 Fed, obviously, for the minutes, they told us how they react to the nearest thing that
00:26:56 happens, whatever's most recent.
00:26:57 So what do you want in that number?
00:26:59 Obviously, I don't think a negative number is good, but something below 250 is probably
00:27:03 good for people.
00:27:04 Then you're going to go in.
00:27:05 You're going to get the banks.
00:27:06 You're going to come out.
00:27:07 It's not going to be pretty, Dan.
00:27:08 The banks may earn okay, but I think that the outlook won't be good.
00:27:12 Then I think we're going to get some pre-announcements here coming.
00:27:14 I'm surprised we haven't had more.
00:27:16 We might not.
00:27:17 I actually thought we would.
00:27:19 Somebody trolled us on Twitter about your Friday night dirties.
00:27:21 I responded with the Tesla deliveries that they were just filthy, and they were filthy
00:27:26 down 18%.
00:27:27 I also think that MoneyBurningFern, his comment, he should have really filed an AK on that.
00:27:32 I mean, there's just so much crap going on there.
00:27:33 So we might not have any big downgrades or negative pre-announcements.
00:27:37 The one thing I'll say is looking at this market today, I thought it was really interesting.
00:27:40 We haven't seen the NASDAQ outperform the S&P in a very long time over a sustained period.
00:27:46 Yesterday, that was the first thing on Tuesday that started to rip, and all those banged-up
00:27:50 ARK sort of names or whatever were really squeezy.
00:27:53 I'm looking at the market today, and I just mentioned it's the MAGA complex.
00:27:57 It's a couple of internet stocks, and then it really is semis, and semis have really
00:28:01 underperformed to the downside, thought to be very cyclical, thought to be some issues
00:28:05 as it relates to supply chains, thought to be maybe some inventory problems.
00:28:09 There's a whole host of things going on there.
00:28:11 That's really all that's going on in the market.
00:28:12 I still see the banks negative.
00:28:14 I still see home builders negative.
00:28:16 I see some of this fintech-y stuff squeezing.
00:28:18 I don't see that to be quality rally whatsoever.
00:28:21 So to me, I don't think the stock market is poised for a sharp rally by any means, and
00:28:26 I do think if there's any meaningful disappointments, or if you do have JP Morgan, Jamie Dimon
00:28:31 give a really negative outlook for this current quarter, and if you have a guy like Moynihan
00:28:36 over there at Bank of America, remember he clapped back at Jamie about his economic hurricane?
00:28:40 If they give a negative outlook, I think that's the thing that sends at least the S&P 500
00:28:45 through new lows.
00:28:46 I think people need to watch Europe, specifically Germany.
00:28:50 Specifically they're most impacted by what's going on with Russia, Ukraine.
00:28:53 They're rationing gas already.
00:28:55 They're bailing out utilities already.
00:28:56 It's already happening.
00:28:57 I know we're in the summer months here.
00:28:58 No one's thinking about what stockpiles might look like in the winter, but listen, Germany's
00:29:03 I think the fifth largest industrialized country in the world or something like that.
00:29:07 I think it's fifth, and it has a huge impact on us.
00:29:09 They buy from us.
00:29:10 We sell to them.
00:29:11 It has a big impact.
00:29:12 So if those companies and those industries can't perform because literally they can't
00:29:16 get the power that they need to produce whatever, that's a big issue.
00:29:19 So a lot of the multinationals, I don't think they're going to be talking about it on this
00:29:22 quarter, but it's something to really pay attention to.
00:29:25 I think we're so focused here in the US, which we should be, but just you got to think about
00:29:28 what impact that might have.
00:29:30 And again, it lends itself to Europe continuing to weaken against the dollar, which has positive
00:29:34 benefits, but for the most part has negative benefits for capital markets.
00:29:37 All right.
00:29:38 So Danny, let me ask you this.
00:29:39 So is there a scenario at some point, maybe it's late summer, early fall-ish, if let's
00:29:44 say some of these commodities that have come in hard, if they stay down.
00:29:47 Let's say some of the economic data that was really hot on the jobs front, on the CPIs
00:29:51 and the PPIs, we start seeing the inflationary data really kind of moderate here and we don't
00:29:56 see unemployment tick up meaningfully and then rates can kind of chill a little bit
00:30:00 and the Fed has this period where they can say, "Hey, listen, not mission accomplished.
00:30:05 There's no banners up on aircraft carriers or anything like that."
00:30:08 But they can say, "Listen, we think we have some sort of price stability at this point
00:30:13 after a period of a lot of poor visibility and a lot of erratic geopolitical sort of
00:30:18 stuff."
00:30:19 Is there a scenario though where you would get more constructive on the stock market?
00:30:23 I'm constructive all the time, but Dan, that's not going to happen anytime soon.
00:30:26 I think that's three to four months away at a minimum, something like that playing out.
00:30:30 I see a situation where if things really do start to roll over on energy and materials,
00:30:34 there's a reason for it and that's really demand and that will not coincide with an
00:30:38 S&P that still trades, I think, at a hefty premium on a PE basis.
00:30:42 And until we get through the second quarter and reevaluate, until we get through Jackson
00:30:46 Hole in late August and whatever, I think that's a conversation, Dan, to have after
00:30:49 Labor Day as we move into the fall.
00:30:52 But right now, I still think we're going to have massive volatility and swings.
00:30:55 And just saying what you said before and round this out is that identify the quality companies
00:30:59 that you think you want to own, that you like what they do and start to chip away at them.
00:31:02 Because whether you're off by a month or a quarter or even two quarters, it doesn't matter
00:31:06 if you have a three to five year time horizon.
00:31:08 And I agree with that.
00:31:09 I mean, listen, I haven't changed my tune whatsoever.
00:31:10 I do not think this stock market bottoms until the S&P 500 round trips its entire move back
00:31:15 to its pre-pandemic highs.
00:31:17 That was February 2020.
00:31:18 It was just around 3,400 or so.
00:31:21 But I do think that there are stocks, the lesson that you learned and that I learned
00:31:25 as traders or as investors in the wake of the financial crisis or the wake of the dotcom
00:31:30 bust is that certain stocks will start to show good relative strength to the S&P 500.
00:31:35 You just used that example, gold relative to this, whatever risk asset you want to do.
00:31:40 That's how you're going to ultimately pick some of these winners in the first cycle of
00:31:44 the next bull run.
00:31:45 So to me, you can still bet on a broad market going lower, but you can start picking at
00:31:49 some of the names you like.
00:31:50 All right.
00:31:51 Well, I think we covered a lot of ground here, Danny Moses.
00:31:54 You better FaceTime me from the show.
00:31:56 I will do.
00:31:57 I'm going to see Pearl Jam two nights in Hyde Park, Friday and Saturday.
00:32:01 Pixie's opening Friday night.
00:32:02 It's going to be pretty sweet.
00:32:04 And I'll be back in the saddle ready to go next week.
00:32:07 Well, guys, stick around.
00:32:09 And while Guy wasn't here for this segment, Guy and I had the pleasure of interviewing
00:32:13 Dan Nathan.
00:32:14 I did a little John for sender emanated from Syracuse, New York, made his way to New Jersey
00:32:19 and Pennsylvania.
00:32:20 But, yeah, we interviewed Dan, got down to some nitty gritty.
00:32:24 So stick around for that.
00:32:25 I think you'll enjoy it.
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00:34:39 Welcome back to on the tape.
00:34:40 Now, Danny Moses, the question I get often and a question that you ask me is, do you
00:34:46 guys and gals all get along on that fast money show that you do?
00:34:50 And typically I say, yes, we do.
00:34:52 You can't fake chemistry and television magnifies everything.
00:34:58 And you'd be like, yeah, well, I don't know.
00:35:00 But I will tell you, I think it was and Dan Nathan, correct me if I'm wrong, 13 or so
00:35:06 years ago when we first met on the set of Fast Money.
00:35:09 And you have an anecdotal story that you tell.
00:35:12 That's what they call revisionist history.
00:35:15 But I will tell you, Danny, before we get into this interview with Dan Nathan, that
00:35:20 I consider Dan an extraordinarily dear friend.
00:35:23 And although he thinks we had a rocky first date, as it were, it's been nothing but roses
00:35:30 ever since.
00:35:31 I love watching the two of you interact.
00:35:33 You know who John Fasenda was?
00:35:34 Of course, John Fasenda is the voice of the NFL.
00:35:37 Do a John Fasenda voice for us, Danny.
00:35:40 Born out of Syracuse, New York, led the Green Bay Packers to four touchdowns.
00:35:45 But that's the BART star.
00:35:46 That's John Fasenda.
00:35:47 If ever a man was born to trade options on CNBC.
00:35:50 I think of John Fasenda.
00:35:51 Get your story out of Syracuse, New York.
00:35:53 Blue collar makes his way onto the Syracuse lacrosse team.
00:35:57 Some reason that's not good enough.
00:35:58 We'll get into why you transferred to Penn.
00:36:00 We'll go there.
00:36:01 But I want to say, I see you interact.
00:36:02 I know you have a twin brother, but you and Guy are like brothers.
00:36:04 You banter a little bit back and forth, mutual respect, and it comes out.
00:36:07 It's genuine.
00:36:08 And that's why everything that you're doing on air, off air, on the podcast, I think is
00:36:12 truly genuine, because you can be yourself around Guy.
00:36:14 Totally amazing.
00:36:15 And Guy, the story that you're talking about, I started doing Options Action in April of
00:36:19 2009 on CNBC.
00:36:20 At the time, the show literally aired at 11 p.m. on Friday nights.
00:36:24 How many people you think were tuning in at CNBC?
00:36:25 Wait a second.
00:36:26 Hold on.
00:36:27 Say that again a little slower.
00:36:28 The show aired at 11 p.m. on Friday nights.
00:36:31 11 p.m. on Friday nights.
00:36:34 And so Mary Duffy at CNBC said, "Hey, listen, Dan.
00:36:37 We'd really like to get you some more exposure on the network of people who might watch this
00:36:41 show just so viewers could recognize you if they happen to tune in at 11 o'clock."
00:36:46 So she's like, "I'd love for you to go on Fast Money."
00:36:48 Melissa Lee was the host of Options Action.
00:36:50 She also had just become the host of Fast Money.
00:36:52 I came on the end of the desk.
00:36:53 I remember it like it was yesterday.
00:36:54 It was May 9, 2009.
00:36:57 I was previewing AMAT's earnings.
00:36:59 I walk on during a commercial break.
00:37:01 Not one of you looks up and says hi to me.
00:37:04 Melissa Lee said, "Hey, Dan," as she would.
00:37:06 And I walked off the set and I said to Mary, "I will never do that show ever again.
00:37:11 Those guys are a-holes."
00:37:14 That's fair.
00:37:15 And in a vacuum, you're probably right because around that time, we had a lot of people that
00:37:19 would come and go off the show.
00:37:21 I don't think we were being Johnsons.
00:37:23 I just think we were sort of immersed in our work and we really sort of discounted a lot
00:37:29 of the people they paraded through.
00:37:31 Obviously though, Dan, you acquitted yourself extraordinarily well, so much so that you
00:37:36 became a staple on that great Options Action show for years.
00:37:40 And obviously, you're an integral part of Fast Money.
00:37:43 And I don't say that in jest.
00:37:44 It's absolutely true.
00:37:45 The voice you bring to the network is essential, especially now more so, I think, than ever.
00:37:51 Well, to be fair, the market hit 666 on the S&P on March 9th, 2009.
00:37:57 So literally in the midst of the Great Recession or the global financial crisis, you come on
00:38:02 board.
00:38:03 Well, it's funny.
00:38:04 I had been watching you guys on Fast Money for what, a year or two prior, and it was
00:38:08 a very unique show because it did speak to people like us, right, Danny, who grew up
00:38:12 on trading desks and understood there's only a sliver of the market that actually stares
00:38:16 at FactSet and Bloomberg machines all day long, tick for tick.
00:38:20 And that's what Fast Money really spoke to, and it was one of the reasons why that sort
00:38:23 of format was something that I was interested in trying to do.
00:38:27 And I will say that as I got to know you guys, you know how they got me back?
00:38:31 John Malloy, who is the producer, he knew I was a big fan of The Grateful Dead, and
00:38:35 we were having Bob Weir on one night.
00:38:36 And he said, "Listen, I know you don't like to do the show.
00:38:38 I know you haven't done it in a while, but we have Bob Weir on tonight.
00:38:42 Would you come on?"
00:38:43 And I was like, "You didn't have to ask me twice."
00:38:44 And I was on, and ever since then, I started popping in, and then I became a regular kind
00:38:48 of shortly after.
00:38:50 Then sitting next to Guy Adami, which is always fun.
00:38:52 And for a long time prior to COVID, the shtick was if you were sitting to my right, as you
00:38:59 would get up to walk to the smart board or to whatever the hell they call that thing,
00:39:03 the telestrator, you would walk past me and pat me on the back.
00:39:07 So I took the opportunity to use that pat as sort of a Rudy Giuliani thing and sort
00:39:12 of fall forward onto the desk.
00:39:14 And people would be like, "Oh my God, he's being so mean to you.
00:39:18 Look at the way he whacks you on the back," to the point where a couple times I just really
00:39:22 fell off my chair.
00:39:23 I was a great shtick at the time, but obviously the world's changed a bit since.
00:39:27 I'll be honest, really the only show I ever caught was probably that because, I mean,
00:39:30 I'm quoted in the book, the big short that I stayed away from CNBC during 2008 and '07
00:39:35 because I'm not even bullish, just rose-colored, rose-colored.
00:39:39 It would confuse me to the point where I'm like, "All right, I get it."
00:39:41 But at least with Fast Money, the market was always closed.
00:39:44 Talk about what had happened in the day, what moved, why, and who.
00:39:46 And you guys do a great job of explaining it.
00:39:47 I'm serious on that.
00:39:48 I'm not just saying that.
00:39:49 No, and I appreciate that.
00:39:50 We do try.
00:39:51 But I'll say this.
00:39:52 We're not looking to bury the lead here either.
00:39:53 We want to get to know Dan a little bit better.
00:39:56 And it's a fascinating family.
00:39:57 I've been fortunate enough, Dan, and you have as well, to get to know Dan's immediate family,
00:40:01 obviously his wife and two beautiful daughters, as well as his family growing up, mom, dad,
00:40:06 brother, sisters, the whole rig.
00:40:08 Dan will tell you, if I'm not speaking out of turn, that his mom's favorite on both Fast
00:40:14 Money and Options Action is one guy, Adami, but you don't have to really necessarily illustrate
00:40:19 that.
00:40:20 But talk to us about your growing up, Dan.
00:40:22 I grew up in a very unique family.
00:40:23 I am one of two sets of twins.
00:40:25 I have a twin brother.
00:40:26 He and I both turned 50 this year.
00:40:28 My sisters are just a tad older than us, so I have two twin sisters.
00:40:32 Identical or fraternal?
00:40:33 All fraternal.
00:40:34 Okay.
00:40:35 My parents are kind of like the rock of our lives.
00:40:37 They were just steady as you could be and always teaching us things the right way.
00:40:42 Grew up in Syracuse, New York.
00:40:43 They had both gone to Syracuse.
00:40:44 My parents met there.
00:40:45 My dad served in the Army and the Army Reserves for many years, and I think his background
00:40:51 in the military and his thought about service is something that I think instilled a certain
00:40:55 level, I think, of character in us about how to do things.
00:40:58 Like Danny, you just mentioned blue collar.
00:41:00 We didn't grow up in a blue collar environment, but that sort of work ethic I think is very
00:41:04 prevalent in places like upstate New York, out of big cities like New York.
00:41:07 Not saying people don't work hard here, but they just do things differently there.
00:41:10 And to get out of places like that, you actually have to start thinking beyond what the here
00:41:15 and now is.
00:41:16 So go to high school there.
00:41:18 You enroll in Syracuse, correct?
00:41:19 Yeah.
00:41:20 Did your brother go to Syracuse also?
00:41:21 My twin brother, Andy, went to Hobart.
00:41:22 We both played lacrosse in high school.
00:41:24 Both of us were decent enough.
00:41:26 True lax, bro.
00:41:27 Well, listen, my dad played at Syracuse in the early '60s, and to me, Syracuse lacrosse,
00:41:31 Syracuse sports in general was everything.
00:41:34 Syracuse lacrosse is equivalent to University of Alabama football back then.
00:41:38 Still to a certain extent today, obviously some other schools have come to the forefront,
00:41:42 but back then, those '60s, '70s, '80s lacrosse programs at Syracuse, that was it.
00:41:49 People will say the best lacrosse player ever was Jim Brown, who obviously went to Syracuse.
00:41:55 So playing lacrosse at Syracuse University is nothing to be trifled with, so clearly
00:42:00 you could play the game.
00:42:01 I was fine.
00:42:02 I basically walked on that team, and I'll just say this.
00:42:04 In 1983, we moved from New Jersey to Syracuse.
00:42:06 My dad bought my brother and I these sticks when he was coming back to New Jersey on one
00:42:10 of his work trips before we officially moved up there, and he brought us sticks, and we
00:42:14 had never played.
00:42:15 We had seen Syracuse 1 in 1983.
00:42:17 Your friend Fred Opie was on that team, guy, that you went to high school with.
00:42:20 It was a huge upset at John Hopkins, and Andy and I just became obsessed with the sport,
00:42:25 and then to your point about Syracuse in the '80s, Gary and Paul Gate went there, and they
00:42:29 just changed the game, and Andy and I were in high school in the mid to late '80s, and
00:42:33 we just were like, "That was it."
00:42:35 Andy went to Hobart.
00:42:36 I went to Syracuse.
00:42:37 I had the opportunity to walk on that team.
00:42:38 I literally was one of the last guys of '48 on that team.
00:42:42 In my freshman year, we were down at University of Pennsylvania playing in the national championship.
00:42:47 We had beaten Johns Hopkins in the semis, and our guys thought that was it.
00:42:51 We were done because we were playing Princeton, and Princeton was there on a lark, and they
00:42:54 beat us in double overtime.
00:42:56 That weekend, I made up my mind, being on Penn's campus, that I was going to transfer
00:42:59 to Penn, and I did that.
00:43:00 And both of those decisions really changed my life because the exposure and being able
00:43:04 to play on that team, that team that I started with as a freshman, they won two national
00:43:08 championships.
00:43:09 Did you get playing time on that team?
00:43:10 No, I played a couple times when they were up by like 15 goals.
00:43:12 So was that part of the disgruntle, little disgruntle at all or no?
00:43:14 No, no.
00:43:15 I mean, listen, I was happy to be on that team.
00:43:17 And then Penn.
00:43:18 I did not have an illustrious lacrosse career.
00:43:19 That's okay, but it's amazing you can even walk on those teams.
00:43:21 Yeah, well, no, I mean, I was more than walk on a pen, but I should have had a much better
00:43:25 career than I did, and I actually had two summers that were really formative.
00:43:28 This is the intersection of all those things that you're not sure as a young person what
00:43:32 might end up turning to something.
00:43:33 I was the last guy, like I said, on that Syracuse lacrosse team, but because they had this DNA
00:43:38 from the Gates who were from Canada and played box lacrosse and they changed the game, there
00:43:42 was a couple of kids each year from Syracuse who went up to Ontario and played junior lacrosse.
00:43:46 I was not clearly one that would have been chosen to do that, but the best player on
00:43:50 the team was going up there and somebody else backed out and he called me up and he said,
00:43:54 "Hey, do you want to come up here and live with his family, work at their bond brokerage
00:43:58 firm and play on this lacrosse team?"
00:43:59 And I was like, "Shit, yeah."
00:44:00 And I went up there and this family, the McGee's, an amazing family, they're actually from Manhattan
00:44:05 where Jim Brown played lacrosse before he went to Syracuse.
00:44:07 I lived with them, an amazing opportunity, but that was my first exposure to financial
00:44:11 markets.
00:44:12 I was working for two summers while playing lacrosse at a bond brokerage firm, and that's
00:44:15 how I really got the bug about it.
00:44:17 You have a great network because I hear you talk to your friends, "Oh, that's the guy
00:44:19 I went to Penn with, Penn, Penn, Penn," and there's some Syracuse thrown in there, but
00:44:22 it is mostly Penn, so you're able to find your way.
00:44:25 So let's fast forward here.
00:44:27 After that, obviously, you give it a shot, you had some success on the buy side, which
00:44:30 I always think it's key for people that have Wall Street experience to have sell side,
00:44:35 buy side, a little bit of everything so you can have the full purview.
00:44:38 So walk us through kind of iteration.
00:44:40 Well, here's the thing.
00:44:41 It's about where you go and the people you meet.
00:44:42 I would not have gotten the job at SAC Capital in 1997 if I hadn't gone to University of
00:44:48 Pennsylvania.
00:44:49 Steve Cohen was only hiring guys out of school, and they were guys who went to University
00:44:53 of Pennsylvania, his alma mater, and they weren't hiring many.
00:44:56 And so a guy who I had played lacrosse with a year ahead of me got a job right out of
00:45:01 school there.
00:45:02 I went to Dallas, actually, to do a job, litigation consulting, and I met my wife down there,
00:45:06 so all things were great.
00:45:07 After a year, I came back up, and I started working at SAC.
00:45:10 So again, this is how kind of your life sort of weaves around, and the guy who actually
00:45:14 got me that job had played lacrosse with me at Penn also.
00:45:16 So I started out in the business.
00:45:18 I literally started in January of 1997 at SAC.
00:45:21 Danny, you were in the business.
00:45:22 Guy, you were in the business.
00:45:24 What was happening to the markets then?
00:45:25 They were just inflating, and the weird pockets of the market were inflating.
00:45:29 So that's why when we see what's happened to crypto, what's happened in some of these
00:45:33 high valuation but unprofitable parts of tech, we've seen this before, and we know how it
00:45:38 ends, and that's one of the reasons why we get animated about this stuff on the podcast,
00:45:42 on Fast Money, on any of this sort of stuff.
00:45:44 We've seen this stuff before.
00:45:45 Because it's rates.
00:45:46 We'll go into that later, but it's rates, because they were raising rates.
00:45:48 It happened again, Subprime Part One, 1998.
00:45:51 People forget, though, man.
00:45:52 1995, on OK Computer, I had Jeff Richards on with me a couple weeks ago, and I read
00:45:58 the returns just for the S&P, not for the NASDAQ.
00:46:01 The S&P from '95 to '99 averaged like 35% a year.
00:46:05 Think about how insane that is.
00:46:07 Yeah.
00:46:08 I covered SAC.
00:46:09 I was in institutional equity sales at Oppenheimer and covered SAC.
00:46:11 I don't think I dealt with you directly, but we did a tech pod.
00:46:13 We buy them lunch.
00:46:14 I was too lowly.
00:46:15 I think that's already a theme of this podcast.
00:46:17 I was the last guy on the bench on all of these places.
00:46:20 You've been on some good benches.
00:46:21 I think the three of us collectively, Dan and I specifically, because we're on TV every
00:46:25 night, you're always negative.
00:46:27 You're always this.
00:46:28 You're always that.
00:46:29 A lot of it has to do with your formative years and what was going on.
00:46:32 As Dan will mention, I started in the late 1920s.
00:46:34 I think we all understand what happened subsequent to that, but it really made my bones.
00:46:39 I started in earnest, obviously, in 1986.
00:46:42 It was a year or so later that the world started crumbling around in the stock market.
00:46:47 That's very fresh with me all the time.
00:46:48 You just mentioned when you started as well.
00:46:50 So a lot of this has to do with what you were brought up with in the business without question
00:46:56 for better or for worse, Dan.
00:46:58 It's interesting to me to see all the crypto bros and what they're going through and other
00:47:02 different cycles, right?
00:47:03 The guys that were into gold or into real estate, flipping homes.
00:47:07 That was us in the late '90s.
00:47:08 I'm just telling you, all these hedge fund guys, all these guys who worked at banks,
00:47:12 everyone thought they could do no wrong and that this was going to go forever.
00:47:15 So to me, I'm actually, it's funny, the guy you just mentioned, labeled as the bear, the
00:47:20 heel on the show or whatever.
00:47:21 I'll tell you where that comes from in a second, but I'm a very optimistic person in life.
00:47:26 I just think when it comes to financial markets, and I think this is a lot of your DNA too,
00:47:29 Danny, we know what can go wrong.
00:47:31 We've been around the block.
00:47:33 We know that a lot of it's a bit of a fugazi.
00:47:35 To me, to point it out publicly, I don't think that you should be labeled anything.
00:47:39 If anything, you're being more of a realist.
00:47:41 People can choose not to listen.
00:47:42 They can ignore it or not want to hear it, but you're just speaking from experience.
00:47:45 Yeah, but Guy says this all the time.
00:47:47 Think about when you started doing Fast Money Guy in 2007, things were still pretty good.
00:47:51 The stock market topped out in November of 2007.
00:47:53 It was still a good ride and there were bits and parts of 2008 where even when Bear Stearns
00:47:58 went under in March of 2008, people thought, "Ah, that's not going to derail this bull
00:48:02 market or whatever."
00:48:04 And the fact that you point out what could go wrong, Guy, what was your saying?
00:48:07 That you were grown up in the business in what?
00:48:09 Yeah, so I grew up in what can go wrong, will go wrong and hope for the best but prepare
00:48:14 for the worst.
00:48:15 And that was sort of my Wall Street DNA back in the day.
00:48:17 And you try to bring forth that on television.
00:48:20 What you learn very quickly is, and Dan, you can speak to this, and Danny, obviously you
00:48:24 can as well, but people say, "Tell me the truth.
00:48:27 I want to hear the truth."
00:48:28 And I think they believe that, but the reality is, I think, people want to hear what helps
00:48:33 them sleep well at night, wake up in the morning feeling optimistic.
00:48:36 So I think a lot of times we point out things that people just don't want to hear.
00:48:40 And what I've learned is when you say things like that, you can really upset the apple
00:48:45 cart a bit, Dan.
00:48:46 Well, here's the deal.
00:48:47 I think it's kind of serendipity that the three of us now are, what are we, a year and
00:48:50 a half in doing a podcast together?
00:48:52 Guy, you and I did not know Danny.
00:48:53 I mean, I knew about you from the book and I knew about you from the movie and we had
00:48:57 friends in common over the years.
00:48:59 But the fact that the three of us are here together, I think there's a common thread
00:49:02 here is that we really don't give a shit what someone else thinks about our opinions and
00:49:07 we're calling it like we're seeing it too.
00:49:09 And I think for years and years, I guess until Twitter really started and people could tweet
00:49:14 at us during a show or tweet at us after a podcast or respond to a tweet or whatever,
00:49:19 you probably didn't know what some of the criticisms were about your commentary in general.
00:49:23 And so for me, I guess in life in general, I just never really give a shit what other
00:49:27 people think.
00:49:28 No, and nor should you, by the way.
00:49:30 And I think there's something, there's an entrepreneurial spirit about you as well.
00:49:33 I don't know if that was sort of galvanized at SAC or not.
00:49:36 My sense is you probably grew up that way, but you've created some amazing businesses.
00:49:41 I mean, prior to risk reversal media, what you did with risk reversal was pretty impressive
00:49:46 in a very short period of time.
00:49:48 Can you speak to that?
00:49:49 So one of the things for me, and I think it goes back to how I came up in Wall Street,
00:49:53 oh, most of the people in and around me, they had a salary, they had benefits, they had
00:49:57 jobs that they just couldn't walk in unless it was like a real crisis where they could
00:50:01 lose their job the next day.
00:50:02 They kind of knew what the bands of their income would be and they could plan out the
00:50:06 trajectory of their careers.
00:50:07 So I started on a trading desk where the guys were wearing ripped jeans and t-shirts and
00:50:12 it was not particularly fancy by any means.
00:50:14 And we were actually looked down upon by many of our friends that worked at other institutions,
00:50:19 whether it be banks or mutual funds or that sort of thing.
00:50:21 And so the thing there was eat what you kill.
00:50:24 And so the more hustle you have, the better you are at what you do, the more opportunity
00:50:28 to get, and ultimately maybe the more income that you could make.
00:50:32 And so for me, I had years on the buy side where I had really good years and I had really
00:50:35 bad years.
00:50:36 And the really bad years, like you don't make any money.
00:50:38 There's nothing coming in.
00:50:39 So for me, I always said to myself, this is the way it's going to be.
00:50:43 There's going to be feast or famine and there's no slow and steady.
00:50:45 Now, some of my friends who kind of did the slow and steady thing are doing really well
00:50:49 multiple decades into it, but you have to be a political animal to make it at a big
00:50:53 financial services institution over a long period of time and be our age and still have
00:50:58 a job that matters.
00:50:59 And so I guess I just made a decision a while ago.
00:51:02 I was at two years at Merrill Lynch in 2007 and 2008.
00:51:06 And I remember what it was like in 2008.
00:51:08 And I looked around me at all of these people who are hardworking, honest people.
00:51:12 They worked on the equity derivatives desk.
00:51:14 They traded a lot of prop.
00:51:15 We were really profitable, but they literally their livelihoods, their savings were all
00:51:19 going to go the way of the dodo.
00:51:20 And a lot of people were scratching their heads like, wait, if Bayer went down and then
00:51:25 Lehman goes down and then Merrill goes down, when the dust settles, there's not going to
00:51:29 be enough seats for me.
00:51:30 So what the hell have I been doing for the last 20 years?
00:51:33 So that was actually a really informative thing for me.
00:51:36 And I basically said, you know what, from here on out, I'm only betting on me.
00:51:40 And I'm only betting on me with people that I think share the same characteristics.
00:51:44 Guy, you and I started talking in 2014 about something called the ticker district, about
00:51:50 literally setting up the framework for what we have now with risk reversal media and having
00:51:54 the sorts of people like Danny.
00:51:56 And we have so many awesome people contributing with us, like Carter, and the list goes on,
00:52:00 Liz and everything like that.
00:52:01 And it's just been really fun.
00:52:02 So to me, it's all of the entrepreneurial stuff is really born out of the fact that
00:52:06 I started in the business as you could go away at any moment.
00:52:09 You could make no money here.
00:52:11 And the whole business is always changing before your feet.
00:52:14 If you're willing to recognize it, you got to take control of your own path a little
00:52:18 bit.
00:52:19 There are a lot of young people listening to this, Dan.
00:52:20 You said something, and when I speak at groups, I say this all the time.
00:52:24 If you don't believe in yourself, nobody else will.
00:52:28 And every once in a while, you're going to get an opportunity to make a bet on yourself.
00:52:33 And you have to take advantage of that.
00:52:35 I mean, I'll give you right now, it's happening right before our very eyes in the form of
00:52:39 Aaron Judge with the Yankees.
00:52:40 This is not a Yankee thing.
00:52:41 But my point is, he turned down a lot of money that the Yankees offered him, and he bet on
00:52:46 himself.
00:52:47 And right now, that's one of the greatest bets in history.
00:52:49 But you did the same thing.
00:52:50 And I think it's important for people to hear that you can do that, and you can be successful
00:52:55 doing that.
00:52:56 Yeah.
00:52:57 Well, one thing I will tell you this, as an adult, it would not have been able to do this.
00:53:00 My wife, Sarah, who you guys both know, I mean, she has put up with it all.
00:53:04 She supported it all.
00:53:05 And if you don't have a life partner who's going to allow you to do that sort of stuff,
00:53:09 I think it's really hard.
00:53:10 My parents have obviously been very supportive.
00:53:12 My whole family, they're all awesome, my brothers and sisters, at everything that they do.
00:53:17 And we've all done stuff together as far as advancing each other's careers and stuff like
00:53:21 that.
00:53:22 So I think the support system, I know both of you guys have amazing wives and families.
00:53:25 And you can't take these sorts of risks.
00:53:27 You can't have these sorts of opinions and be out there the way we are if you don't have
00:53:31 a tremendous support network.
00:53:32 I'm still getting over that you were just compared to Aaron Judge.
00:53:35 But maybe it's the looks, it's the athletic ability, it's all that stuff.
00:53:39 The shoulders.
00:53:40 No, but the one thing I think the three of us share, and Dan, this will probably resonate
00:53:43 with you, is that we all have passion for the markets.
00:53:44 But at the same time, the way Wall Street works, it doesn't matter what seat you're
00:53:48 in.
00:53:49 You try to make money, obviously, because that's your measure of success.
00:53:52 But it's somewhat of an empty feeling.
00:53:54 And when you stop making money at whatever you're doing, you realize you can't grow as
00:53:57 a person.
00:53:58 Forget about, I'm not trying to rank the things in general, and I realize how people view
00:54:01 Wall Street in general, but you care about your job, you care about.
00:54:04 So for me it was always, and I think this is for you, you want to grow as a person.
00:54:07 So if that means challenging yourself to something new that you did with risk aversal, which
00:54:10 you should go into because I don't think you answered that exactly about doing that, that's
00:54:14 how I view you, and that's how I am.
00:54:16 I think that's how Guy is.
00:54:17 You just move on.
00:54:18 The next thing you want to challenge yourself, because you usually, so for everyone out there,
00:54:21 what do you risk reversal is?
00:54:22 Dan, why don't you start with that, so it has an option angle to it.
00:54:24 I think it's really interesting for the three of us all to think about this.
00:54:28 I don't think any one of us could be sitting on a trading desk and doing that Monday through
00:54:32 Friday and doing all weekend long, reading the Barron's and the research reports and
00:54:37 coming back in on Monday and doing it.
00:54:39 I don't know about you guys.
00:54:40 I just couldn't be doing that anymore.
00:54:41 And I love doing that.
00:54:42 When I started doing that in the late '90s, and I would have done it for a while, but
00:54:46 it is a young person's game.
00:54:48 And I think about we went from a very qualitative investment environment when we started to
00:54:53 a very quantitative one now, and I think a lot of the fun, the things that we found most
00:54:57 interesting about it don't really exist.
00:55:00 And so when I started thinking about risk reversal as a brand, I started doing options
00:55:04 action in 2009, like I said, and for a viewer to get in contact with you, they literally
00:55:08 had to send an email to some inbox at CNBC that maybe got forwarded to you.
00:55:14 And it wasn't really until Twitter when we were on those shows and people could tweet
00:55:19 at us.
00:55:20 And then back then, like I just said, "No, I don't really give a shit what people say,
00:55:23 but you're interested in what people say and you want to make sure you're on the right
00:55:25 track."
00:55:26 So until I started getting lots of questions from retail investors, that's what really
00:55:31 piqued my interest.
00:55:32 That's where I thought where I could take my first 10 or 15 years in the business and
00:55:36 having some great training and great experiences and some success and some failure and plenty
00:55:40 of failure, "Oh, how can we help other people?
00:55:42 How can we demystify some of this stuff?"
00:55:44 And options was a great way to do it because it was a product that was exploding.
00:55:47 There were lots of financial services, companies that were really interested in backing content
00:55:51 on that.
00:55:52 CNBC, Max Meyers, dear friend of mine, who's the guy who gave me the opportunity initially
00:55:56 at CNBC when I first met him in 2008 to come on that show, I think he changed the game
00:56:01 with options, the way that we talk about them, not from the think chasing activity.
00:56:05 You guys know I think that's a big fugazi.
00:56:07 It really is about how can this tool be used by everyday investors who don't have the
00:56:12 institutional tools or knowledge that the big boys and girls have in the game?
00:56:16 How can they use them to help add yield to their portfolios, risk manager portfolios,
00:56:20 average leverage?
00:56:21 That was the game changer for me and I basically said, "I think there's a path forward speaking
00:56:25 to retail with a certain voice."
00:56:27 And again, I think that's what we're doing here.
00:56:29 So risk reversal media, let's flash forward.
00:56:31 I started doing risk reversal in late 2010, early 2011 as a way to be transparent and
00:56:36 document the things that I was going on CNBC and saying for options, action, and fast money
00:56:41 and people had a way in which to communicate with me and see exactly what I was saying
00:56:45 and what I was doing and real time, let's call it cheat sheet or whatever, of what I
00:56:50 was doing.
00:56:51 Risk reversal media came about because it was really before the pandemic.
00:56:55 Guy and I started talking and I know, Guy, you had lots of different conversations with
00:56:58 a lot of people about content that you do, you speak a lot.
00:57:01 I was like, "Well, listen, now all of a sudden it seems like the convergence of all
00:57:05 these media models and markets really have become sport."
00:57:08 This was a big thing.
00:57:09 I mean, I know that Danny, you're really into handicapping, you're really into sports
00:57:11 betting and all that sort of stuff.
00:57:13 Think about the convergence of all of these sorts of things as markets and trading have
00:57:16 become sport and I think the crypto craze in '17 really made that very clear.
00:57:21 And so we're like, "How can we make this fun, digestible, demystify these things and
00:57:25 really create community?"
00:57:26 And that's what I think we came up with as a way to go direct to consumer and do this.
00:57:30 CNBC is amazingly important to us.
00:57:32 It's an amazing brand.
00:57:33 Guy, you and I have had so much fun doing that.
00:57:35 We've gotten to meet so many amazing people like Danny.
00:57:38 We would not have met you probably in this capacity if you hadn't come on our show.
00:57:42 So to me, that's where risk reversal media was born out of.
00:57:45 And right now, I mean, in general, if you think about the properties we have, this is
00:57:48 the most important one to the three of us here.
00:57:51 We do this every week.
00:57:52 We have a bunch of bonus episodes to cover different topics that are less ephemeral here.
00:57:57 We've also been so fortunate to attract some amazing financial services brands to support
00:58:02 us like CME Group, like Current, like recently iConnections, like SoFi, like Faxet have been
00:58:08 an amazing partner to us.
00:58:10 And the list goes on and on.
00:58:11 And I just think there's a way.
00:58:12 There's parallel paths that are going to continue with traditional media models and people like
00:58:17 us will continue to participate in those.
00:58:19 But then there's going to be these other ones that I think are going to kind of be where
00:58:22 the puck is going.
00:58:24 And who knows how that's going to end up.
00:58:25 But I think to continue to try them out makes a lot of sense.
00:58:28 And I couldn't think of a better group to do it with than you guys.
00:58:30 No, listen, I feel the same way.
00:58:31 And not to give away your address, but you do live in New York City.
00:58:34 You have two now teenage daughters.
00:58:37 But can you speak to, and everybody's COVID experience was different.
00:58:41 I'm not underestimating or trying to be glib here.
00:58:44 But I think to a large extent, the period of time that people spent in lockdown and
00:58:49 stuff really opened up a lot of opportunities in terms of what we're doing now.
00:58:52 But speak to how difficult it must have been for you with daughters that age in New York
00:58:57 City, which to a large extent became sort of the epicenter of a lot of things over the
00:59:01 last couple of years.
00:59:02 Obviously, it was the epicenter, I think, in the spring of 2020.
00:59:06 A lot of people felt like all of the negative headlines and a lot of the images that we
00:59:10 had were just of New York hospitals being overrun and people who were outside of New
00:59:15 York was like, they thought it was like some sort of post-apocalyptic sort of thing.
00:59:19 And I think New York in general dealt with it very well.
00:59:22 And I think New York has also been a sign of really one of the first major cities that
00:59:26 I know of in America that closed down meaningfully, that reopened.
00:59:30 And it's so vibrant.
00:59:31 And Danny, you've been coming in.
00:59:32 And Scott, you've been coming in a lot.
00:59:33 You guys live outside the city.
00:59:35 So in many ways, I think New Yorkers should be very proud about how the city made it through
00:59:39 it as far as me on a personal front.
00:59:41 I mean, my wife and my kids were amazing.
00:59:44 Everybody understanding the severity.
00:59:46 We had a group meeting, a family meeting.
00:59:48 We haven't had too many of them, but it was probably the day that the NBA shut down.
00:59:53 So it was March 10th, 2020.
00:59:55 And I said very specifically to all of them, and I just wanted them to really know this,
00:59:58 is that this is serious.
01:00:00 And whatever you think you're reading on social media from some snarky this or that or whatever,
01:00:04 like this is not one week.
01:00:05 This is not two weeks.
01:00:06 And here's the most important point.
01:00:07 This is not happening to you.
01:00:09 This is happening to us.
01:00:10 And I think that sort of mentality, I think they understood that really quickly.
01:00:14 And I think a lot of people showed their better sides during that period.
01:00:18 I think we're all a bit exhausted by all of it.
01:00:20 But I think creatively, when you think of it, take it to the next level, I feel for
01:00:23 the kids because kids of all demographics, socioeconomic situations or whatever, everybody
01:00:29 suffered.
01:00:30 A lot of people suffered far less than the others.
01:00:32 And my kids are going to be just fine.
01:00:33 I think though, creatively, for people like us who are like, all of a sudden, we thought
01:00:38 these constructs that existed for our business that were so formative to our earlier careers,
01:00:43 they all came crumbling down.
01:00:45 You see that in all different sorts of industries.
01:00:46 So for us, I think it really kind of opened our eyes to the sort of potential that we
01:00:51 have to go out there and do a bunch of stuff on our own that, just so you know, and Guy,
01:00:55 you and I have talked about this a lot, I think it's really complementary to everything
01:00:58 else that we have been doing in traditional media.
01:01:00 I think it all works well together.
01:01:02 And if anything, I think some of these new media formats that a lot of people experimented
01:01:06 with over the last couple of years, they actually may be a lifeline to traditional media in
01:01:11 a way.
01:01:12 So I think media organizations that realize that they have to tap new audiences and to
01:01:16 tap new audiences and to get them involved and engaged, they're going to have to use
01:01:21 new mediums in which to do it.
01:01:22 For sure.
01:01:23 So let's fast forward.
01:01:24 So you have a big birthday coming up.
01:01:25 Uh-oh.
01:01:26 I think so.
01:01:27 Five zero.
01:01:28 I had to find your correct date.
01:01:29 Yep, September 20th.
01:01:30 Happy almost birthday, by the way.
01:01:31 Guy doxed me and you're throwing out my...
01:01:33 Well, I mean...
01:01:34 Who's got...
01:01:35 Does anyone have...
01:01:36 I don't know what that means.
01:01:38 What does doc mean?
01:01:39 I saw that on Fox News.
01:01:41 Somebody was getting doc'd.
01:01:42 Doc's, yeah.
01:01:43 It's just all your personal info getting out there.
01:01:45 So the next 10 years here, obviously you're going to grow this into a massive empire.
01:01:48 But no, seriously, the next 10 years, your girls are going to be in college.
01:01:52 Next stage of your life here.
01:01:53 How do you see this thing playing out in the next 10 years?
01:01:55 I got to tell you, we're doing this today.
01:01:57 Guy and I just did the market call before.
01:01:59 You and I are sitting here doing this.
01:02:00 I'm going over to do Fast Money.
01:02:02 I'm just enjoying it.
01:02:03 You guys are enjoying it.
01:02:04 Really, it's given another life, I think, to the way in which we think about markets
01:02:09 and we think about where things are going.
01:02:10 And I will tell you this.
01:02:11 I think one of the fascinating things...
01:02:13 Guy says this all the time, that he gets sick of hearing your own voice, right, Guy?
01:02:17 I mean, I actually enjoy it and it's really energizing when we're enjoying it.
01:02:21 And I think to figure out how to keep it fun, to keep it interesting, to keep helping people...
01:02:25 And again, we're not doing God's work here by any means.
01:02:28 And I don't think any of us have ever claimed to do that.
01:02:30 But one of the things I realized having this connection with a retail audience through
01:02:34 CNBC over the years is that a lot of people take this really seriously.
01:02:38 You know, like some of those people are like political junkies or they're sports junkies
01:02:41 or whatever.
01:02:43 Market junkies.
01:02:44 Guy, you meet them all the time.
01:02:45 That was one of the things that was totally fascinating, that when we walk into the Nasdaq
01:02:50 at Times Square and we walk out of there after the show, pre-pandemic, there was always people
01:02:54 waiting.
01:02:55 Guy would always sit there and talk to them.
01:02:56 And they were like, they're guys.
01:02:57 It was like if you met Judge, Guy would maybe go up to him and get all geeked up.
01:03:01 Some people feel that way about Guy Adami.
01:03:02 So I just think that to me, as long as it remains fun, the people in which you can do
01:03:06 it, it'd be fun.
01:03:07 And if you think that you're kind of helping people, I think that's kind of important too.
01:03:11 Talk about that.
01:03:12 I mean, I think that's so important that you can have fun doing this.
01:03:15 You can be light of heart, yet you can still be serious in terms of what you're doing for
01:03:20 the market.
01:03:21 I think that's a great point.
01:03:22 And what I think Fast Money did, at least I think, is we made all this accessible to
01:03:28 people and fun for people.
01:03:29 And I think that's exactly what I know what we're trying to do with risk reversal media.
01:03:33 But I think that's what you try to do as well with the work that you do, Dan.
01:03:37 Yeah, I'll say this.
01:03:38 So to also answer that question about the pandemic, I did not find doing the shows for
01:03:44 my living room fun by any means.
01:03:45 What I really enjoyed about it is being there with Mel and just the interaction with the
01:03:49 group and just the chemistry that actually can only be created when people are in person.
01:03:54 So do we have more fun in person?
01:03:55 No doubt about it.
01:03:56 I do think it's important.
01:03:57 I think we always really try to strike the right tone.
01:04:00 We can be sitting on that desk sometime and there can be an announcement about something
01:04:04 that has nothing, a piece of news that has nothing to do with markets.
01:04:07 And all of a sudden, we have to talk about a terrorist attack or something like that.
01:04:11 And we never want to talk about it through the lens of the financial markets.
01:04:14 It seems kind of insensitive.
01:04:15 A lot of our coverage guy in 2020 felt that way, right?
01:04:19 There was no yucking it up when people were dying of this disease or people were hunkered
01:04:22 at home or couldn't go to work or that sort of thing.
01:04:24 So that was kind of a unique period.
01:04:26 Hopefully we don't have to deal with that again.
01:04:28 But listen, I feel like we're about to enter a very dark period as it relates to being
01:04:32 a pundit on anything.
01:04:33 I used to catch a lot of heat.
01:04:34 I had very strong political views during the last presidency and I was not shy about vocalizing.
01:04:40 But I'll tell you, the reason I vocalized them was because the financial press, we'd
01:04:44 walk in and you'd hear things like the Trump economy, the Trump this, the Trump that, the
01:04:48 Trump market.
01:04:49 And I'm like, well, that's a bunch of fucking bullshit as far as I'm concerned.
01:04:52 So if you want to keep labeling all that stuff like that, then I'm going to do my best to
01:04:56 debunk why I disagree with that.
01:04:58 I worry though, coming off of just what's going on with the Supreme Court right now,
01:05:03 we know that elections have consequences and we're bearing that out right now.
01:05:07 But it seems like the things that some people are very excited about what's going on through
01:05:13 a judicial process could really spin out of control into ways that legislatively, how
01:05:18 the executive branch handle.
01:05:19 I think that all of this stuff is tied into the markets.
01:05:22 It is tied into the economy.
01:05:24 And so I'm worried that the next six months are going to be not particularly fun to be
01:05:28 a pundit in any way, shape or form.
01:05:30 What's fun for you, and they have these diagrams with three circles and there's always the
01:05:35 intersection of circles, but most of the circle is on its own.
01:05:38 And I think in a lot of ways, that's our musical taste.
01:05:41 I think you and Danny have somewhat on the same page.
01:05:45 I'm probably a little bit different, but music plays such an important role in your life
01:05:49 without question.
01:05:50 Danny, you as well.
01:05:52 Speak to that, Dan, because it's such a great way to get away from some of the market forces
01:05:58 and some of the things we deal with on a day-to-day basis.
01:06:00 Yeah.
01:06:01 I mean, we infuse it in a lot of our content.
01:06:03 All of us are quoting lyrics or song tunes.
01:06:05 And for me, it just goes back to being, I want to say, right before being a teen, my
01:06:10 sisters, like I said, were a couple of years older than me.
01:06:12 They always had really good interest in music.
01:06:14 It started with Class Hit Rock, a lot of the stuff, guy, that you really grew up with,
01:06:18 Led Zeppelin, Pink Floyd, Rolling Stones.
01:06:20 I got into U2 really early, and Grateful Dead was huge, huge.
01:06:23 So for me, and then Springsteen.
01:06:25 I lived in New Jersey when Born in the USA came out, I think it was in 1983 or '84, and
01:06:30 that was just an absolute phenomenon.
01:06:32 And so for me, that music was such a big part of my life.
01:06:36 But the first week on campus at Syracuse in 1991, Danny, 10 by Pearl Jam, Nirvana, Nevermind,
01:06:43 and then Blood, Sex, Magic by Red Hot Chili Peppers.
01:06:47 Grunge rock, and I don't think they called it grunge rock yet, hit me like a ton of bricks.
01:06:51 Because at that time, it changed music for the '90s.
01:06:56 For you, you grew up Athens, Georgia, and I'm sure that whole scene was kind of massive.
01:07:00 Yeah, but R.E.M. is so depressing.
01:07:01 So B-52s were an overrated band.
01:07:04 Widespread Panic was cool, but I was always into music, but probably more of the Southern
01:07:07 rock stuff.
01:07:08 But then when you said first year in college, that was my first year Joshua Tree, so that's
01:07:12 why it resonated.
01:07:13 1987.
01:07:14 My freshman year in high school, I had a week, and this changed my life actually.
01:07:17 It was in September of 1987, in the same week in the Carrier Dome, David Gilmore, Pink Floyd,
01:07:23 played one night.
01:07:24 I think it was a Saturday night, and then the following Friday, U2 Joshua Tree with
01:07:28 Los Lobos opening for them.
01:07:30 You remember Lil Umbamba?
01:07:31 Of course.
01:07:32 And I was like, live music was it for me.
01:07:33 Richie Valens was Guy's favorite artist of all time.
01:07:36 But from there on out, to answer your question, live music was it.
01:07:39 I travel for it.
01:07:40 I still see all of those bands.
01:07:41 You know, it's the great equalizer music.
01:07:43 You can enjoy it with anybody and everybody, and you're just in a trance, and everybody's
01:07:46 there for one reason and one reason only.
01:07:48 And I feel like that's why I like it.
01:07:49 I think that's why you like it too.
01:07:50 It's a true passion.
01:07:51 The other thing, Dan, by the way, that you love, I'm not getting off topic here because
01:07:55 music is important, you're a foodie.
01:07:56 I mean, you're definitely a foodie.
01:07:58 You love going to your restaurants, doing your thing, and I think it's fantastic.
01:08:02 But speak to the quintessential Dan Nathan Thursday evening.
01:08:06 He has his own REOs.
01:08:07 I mean, he has his own REOs basically is what he's got.
01:08:09 You guys know what it is.
01:08:10 You've been there.
01:08:11 It's Fort Charles Prime Rib.
01:08:12 It's in the West Village.
01:08:13 What's really fun for me is that I really still love our business, and I touch our business
01:08:17 in lots of different ways.
01:08:18 And you guys know this.
01:08:19 Danny, your days back there in Oppenheim in the late '90s, you used to go out with the
01:08:22 hedge fund guys.
01:08:23 You'd have a big-
01:08:24 Yeah, the Sack Dickheads.
01:08:25 Yeah, exactly.
01:08:26 Is that what you guys called them?
01:08:27 Yeah, fucking, yeah.
01:08:28 Stakes to go for those guys too.
01:08:29 Yeah, well, I didn't take anything home.
01:08:30 But the whole idea was like you get a big group of guys together, and that's where stuff
01:08:33 really happens, right?
01:08:34 That's where people start to gain trust of other people, and you see people for who they
01:08:39 are after a couple cocktails, a little red wine, a big meal, who wants to do what afterwards.
01:08:43 So I guess what I'm saying is that I've always appreciated that.
01:08:47 I always loved that part of the business.
01:08:48 I kind of have a no assholes rule though now, okay?
01:08:50 So I have this standing table.
01:08:51 I go every Thursday, and I do it with people that I love.
01:08:54 And there are a lot of people that I do CNBC with, that I've been in the business with
01:08:58 for a long time, tons of personal friends, that sort of thing.
01:09:00 And the real fun part about it is putting different groups of people together that I
01:09:03 really love from different parts, and we do that quite often.
01:09:07 So Danny, before you say anything, I'll just say Dan said a no asshole rule, and I find
01:09:11 it fascinating that I've never been at one of these dinners, so what does that say about
01:09:15 me?
01:09:16 Well, first of all, Guy, you have been invited probably like a hundred times.
01:09:19 50 times, you say, "Yeah, I'll do it."
01:09:21 And then you kind of say the day of, "You know I can't do it."
01:09:23 Guy, if it makes you feel better, I've been invited eight times.
01:09:26 I've gone four.
01:09:27 So I'm batting pretty...
01:09:28 It's not Aaron Judge-like.
01:09:29 I'm batting pretty good on that, Dan.
01:09:30 All right.
01:09:31 No, I think it's fantastic.
01:09:32 And that was such a huge part of my upbringing in Wall Street, networking, getting out, doing
01:09:37 those things.
01:09:38 But you get to a certain age that I'm at, and it just makes it very difficult to do
01:09:42 the things you're doing.
01:09:43 I admire you because I think your energy about this is, for me, it's really motivating, and
01:09:49 it's helped me push the envelope a little in terms of what I'm doing.
01:09:52 When I was at Oppenheimer, I was assigned to a man, Barry Kerecnik, great man.
01:09:56 He was older at the time.
01:09:57 I don't know where he is now.
01:09:58 I don't want to think about it.
01:09:59 But first thing he said to me, he goes, "Danny?"
01:10:01 He goes, "This is a people business.
01:10:02 It's a people business."
01:10:03 And that's the whole thing you just described.
01:10:05 You got people, you get to know them.
01:10:07 What makes a stock trade a certain way is how people view that company, right?
01:10:10 What is the aura of that company?
01:10:11 How do the people pick up on the management?
01:10:13 It is.
01:10:14 It's a people business because it's not just about the numbers.
01:10:16 When I was on the buy side, this was in the late '90s and through the mid-aughts in 2000s,
01:10:21 I had a really interesting experience because I was often the guy facing the banks, kind
01:10:26 of also helped be a relationship guy for the organization.
01:10:28 I left this one firm in '05, I think it was, and I was talking to different hedge funds.
01:10:32 There was a guy who ends up, he's a billionaire now and he runs a huge platform.
01:10:36 I remember meeting him after a couple of meetings and I remember him saying to me, "I really
01:10:39 like you.
01:10:40 We wouldn't have had three meetings if I didn't really like you, but I keep hearing this thing.
01:10:44 I either keep meeting people who absolutely love you and then I've met a handful of people,
01:10:49 far fewer, that can't stand you," which I thought was really funny.
01:10:52 I heard this years ago.
01:10:54 Max Myers, who is again our producer on Options Action Forever, and then he did Fast Money
01:10:59 for a while, he said he called me up one day and he said, "I got a funny story.
01:11:03 I got some good news and I got some bad news."
01:11:04 He said, "What do you want to hear first?"
01:11:06 I was like, "All right, give me the good news."
01:11:07 He goes, "The good news is that you're the most hated guy.
01:11:10 We just did a survey of all the panelists on Fast Money.
01:11:12 You're the most hated guy."
01:11:14 He's like, "The good news about that is we need people that are really hated and really
01:11:18 liked, and what you don't want to do is be in the middle."
01:11:20 Guy, what do you think about that?
01:11:22 Well, it's interesting.
01:11:23 First of all, I don't believe that's true.
01:11:25 I don't believe that for a second in terms of the way people view you, but I do think
01:11:30 what I've found in media at least, you don't want to find yourself in the middle.
01:11:34 You don't want to be one of those people that sort of morphs in with everybody else.
01:11:38 You want to be not on one side or the other in terms of the political spectrum or anything
01:11:42 like that, but you want to be memorable and whatever that means.
01:11:46 And without question, Dan, you're memorable.
01:11:48 Well, I will tell you, and I'm not speaking for Danny.
01:11:51 Danny's going to speak when I'm done here, but it's been an absolute honor not only to
01:11:55 get to know you, but to call you a close and dear friend, Dan Nathan.
01:11:58 And although we've done, I think, some really great things over the years, I can say this
01:12:02 with almost certainty, I think the best is yet to come, and large part that's due to
01:12:07 your intellect, your drive, and your energy.
01:12:10 So I thank you.
01:12:11 The stuff that we've been doing over the last few years now, it feels like literally the
01:12:15 seeds were planted a bit of a decade ago.
01:12:17 And I say this to you, when we interviewed you for On The Tape, I learned something from
01:12:21 you a decade ago when you were training for that Iron Man.
01:12:26 I know we talked about that.
01:12:27 I'm not going to get into that anymore.
01:12:28 And just your commitment to it and your commitment to the capital raise for Leukemia Society,
01:12:33 I just knew right then and there, this guy is the real deal here.
01:12:37 And always knew that if we were going to do something on our own, I'd want to do it with
01:12:40 you.
01:12:41 And obviously, I'd say the same.
01:12:42 You said this about Danny, I think, when we interviewed him for this segment.
01:12:47 Meeting a guy like you with the experience that you have and the high-profile nature
01:12:51 of some of the situations that you've been involved with and having access to your mind,
01:12:55 I mean, we've learned so much.
01:12:57 I know, Guy, you feel the same way.
01:12:59 Watching the markets play out since the first On The Tape podcast, I think it was January
01:13:04 15, 2021, and the themes that you brought with us, these are not things that Guy and
01:13:09 I, a bunch of them, we'd be talking about.
01:13:11 And the fact that they played out in front of our listeners' eyes and ears, I think is
01:13:16 pretty fascinating.
01:13:17 So I think we have a really special group.
01:13:18 I'm really excited about what comes next here.
01:13:21 And I do feel like we've kind of just scratched the surface.
01:13:23 And I've got to say, I mean, listen, I mentioned our sponsors.
01:13:25 Our sponsors have been absolutely amazing and really given us this runway.
01:13:29 And we've also had some supporters, guys like Rick Heitzman at First Mark and Joe Marchese
01:13:34 at Human and my friend Dan Turan and Ryan Sarver.
01:13:37 We just have a lot of friends who've been really supportive of what our vision is for
01:13:40 this business going forward.
01:13:42 So again, thanks to you guys, because I could not do any of this on my own.
01:13:46 And of course, Amanda Diaz, and we have Nick working with us and Steven, and we've just
01:13:50 had like a great group.
01:13:51 I got to say Spencer, shout out to Spencer here.
01:13:53 So we're just getting started here, people.
01:13:55 Well, listen, it's been great to get to know you as a person, Dan.
01:13:58 And also, obviously, I would call it business associate.
01:14:01 I don't know what you call it.
01:14:02 But to me, this is just fun being in here with you.
01:14:04 And so I look forward to the next 10 years.
01:14:06 That's why I asked you.
01:14:07 I thought you were going to say, we're going in, we're going to go together, we're going
01:14:10 to go in there and kill it.
01:14:11 But no, seriously, it's been a pleasure.
01:14:12 So you know what, though?
01:14:13 We're part of the market, Danny.
01:14:14 We're like rocket ship emojis for startup companies.
01:14:17 It's not so cool anymore.
01:14:18 That's true.
01:14:19 That's a good point.
01:14:20 Slow and steady wins the race.
01:14:21 That's what we're going to do.
01:14:22 Well, listen, guys, I appreciate the opportunity to kind of speak to our listeners in that
01:14:25 capacity.
01:14:26 And we have to thank the listeners.
01:14:28 I mean, we wouldn't be here if we didn't have the people who are interested in, I guess,
01:14:32 the chemistry that we have, the guests that we bring.
01:14:34 We've had so many amazing guests.
01:14:36 And really, I guess, giving us the opportunity to kind of impart some of the things that
01:14:40 we're seeing and calling it the way we see it on a daily basis.
01:14:43 So thanks to all you guys.
01:14:44 So I appreciate it.
01:14:46 Thanks once again to CME Group for sponsoring this episode of On the Tape.
01:14:51 If you liked what you heard, make sure you hit follow and leave us a review.
01:14:55 It helps people find our show and we love hearing from you.
01:14:58 And we also want to hear from you via email at onthetape@riskreversal.com any time of
01:15:04 the day.
01:15:06 Follow and connect with us on Twitter @OnTheTapePod and we'll see you next time.
01:15:26 (upbeat music)
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