• 11 months ago
Check out our show notes and transcript: https://riskreversal.com/podcasts/on-the-tape-podcast-of-markets-and-men-with-tommy-vietor-from-pod-save-america/

Guy and Danny discuss the state of the market (4:49), the meme madness in Bed, Bath & Beyond this week (8:02), the gamification of the stock market (11:28), Wall Street calling the Fed’s bluff (21:08), bank stocks (29:05), Walmart earnings (31:44), and Nvidia earnings next week (36:16). Later, Guy and Dan sit down with Tommy Vietor, co-founder of Crooked Media and co-host of “Pod Save America” and “Pod Save the World,” and discuss where we are in Ukraine (44:09), tensions with China escalating (54:14), and the midterm elections (59:40).

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00:01:20 (upbeat music)
00:01:21 There's a saying, Danny Moses,
00:01:22 "When the cat's away, the mice will play."
00:01:25 You heard that saying,
00:01:26 "When the cat's away, the mice shall play."
00:01:28 Is that true?
00:01:29 ♪ It's not time to make a change ♪
00:01:31 Cat Stevens?
00:01:32 - That's pretty good, actually.
00:01:35 Well, no, Dan Nathan is away.
00:01:37 As we're doing this,
00:01:38 he's on the campus of Georgetown University.
00:01:41 He's taking his oldest daughter to school.
00:01:44 I think that's beautiful.
00:01:44 - It's a good school, I heard.
00:01:45 You like that place.
00:01:47 - Georgetown University is typically ranked
00:01:49 anywhere from 18 to 22,
00:01:51 depending on what publication you buy,
00:01:54 whether it's US News and World Report, Forbes,
00:01:57 Fortune, Wall Street Journal,
00:01:59 any of those things.
00:02:00 If they had a larger endowment,
00:02:02 and perhaps if the On the Tape podcast becomes something,
00:02:05 I can help them with that.
00:02:06 - You've helped them.
00:02:07 You've put a lot of kids through there.
00:02:08 I think you've done your part.
00:02:09 - On the tuition front.
00:02:11 - Yeah.
00:02:11 - But what they, so they lack there,
00:02:13 they lack in the library category,
00:02:15 and they're weak in the sciences, but working on it.
00:02:17 But it's a wonderful school.
00:02:19 I would submit, outside of a few schools,
00:02:21 it's the best school in the country.
00:02:22 But that's not what we're here to talk about.
00:02:24 Our conversation is the cat is away.
00:02:27 The cat comes in the form of Dan Nathan.
00:02:30 So as I look at his empty chair,
00:02:32 I'm staring at two $50 bills.
00:02:34 By the way, on the $50 bill for you playing our home game
00:02:37 is Ulysses S. Grant.
00:02:39 Is that true?
00:02:40 - That is true.
00:02:41 You're right.
00:02:41 - Now, why is that there, Dan?
00:02:43 I didn't put it there.
00:02:44 - Last show, I made a bet to Dan
00:02:45 that by the time we record this today,
00:02:47 the markets will be down for the month of August.
00:02:50 And that was wrong.
00:02:52 - Wrong.
00:02:53 - That was wrong.
00:02:54 I'm gonna rehash it for next week,
00:02:55 but he's not here to collect.
00:02:56 The one time he takes money from me,
00:02:58 the one time he's not here to collect.
00:03:00 - It's, but see what's gonna happen is,
00:03:04 by definition, you have to double that.
00:03:06 And he's gonna wind up losing twice.
00:03:07 He should have won,
00:03:08 and he's gonna wind up losing twice as much.
00:03:11 So as I mentioned, when the cat's away,
00:03:13 the mice shall play.
00:03:14 It made me think.
00:03:15 So this is how my mind works.
00:03:17 I think of mice.
00:03:18 I think of John Steinbeck.
00:03:20 I think of Steinbeck's classic "Of Mice and Men,"
00:03:23 which was released in the late 1930s.
00:03:26 - Where's the rabbit, George?
00:03:27 - Look, you are, see, that is so good.
00:03:29 We didn't even script this.
00:03:30 - Go ahead.
00:03:30 - But my point is,
00:03:31 this was written in the late 1930s by John Steinbeck.
00:03:35 It's a wonderful piece,
00:03:36 which everybody should read or should reread.
00:03:40 But it's really, it's portraying
00:03:42 sort of early Depressionary era stuff.
00:03:45 Now, before you start adding my ass on Twitter,
00:03:48 I'm not suggesting we're on the verge of a depression.
00:03:51 But if you go back in history, by the way, Danny,
00:03:53 and look at some of the things that were happening
00:03:56 leading up to, and things leading up to now, eerily similar.
00:04:01 Before we get started, this is the "On the Tape" podcast.
00:04:05 I'm Guy Adami.
00:04:06 Today, I'm joined just by the devilishly handsome
00:04:10 Danny Moses.
00:04:11 Dan Nathan, as I mentioned, in parts unknown,
00:04:13 although we know where he is.
00:04:15 In a few minutes, we're gonna have a conversation
00:04:18 with the Pod Save the Queen, or Pod Save America,
00:04:21 or Pod Save Somebody.
00:04:22 - Save Somebody.
00:04:23 - He's saving the world.
00:04:24 - Yeah, save the world.
00:04:25 That's their, they have that also.
00:04:26 - Pod Save the World.
00:04:27 By the way, I'm just messing around.
00:04:28 The guy's a genius.
00:04:29 Tommy Vitor's gonna join us on the tape.
00:04:32 That's gonna be a great conversation.
00:04:33 As I mentioned, Dan's away.
00:04:35 Oh, and oh, by the way, for those that care,
00:04:37 on Monday, we're dropping a special podcast
00:04:41 with Peter Buckvar of The Book Report.
00:04:44 We're gonna talk markets, we're gonna talk all things.
00:04:47 Leading up to Jackson Hole,
00:04:48 he's gonna have a conversation with Doug Sifu.
00:04:51 So that's coming as well.
00:04:53 So much to talk about, but I started Of Mice and Men,
00:04:57 which is my sense, the title of this podcast.
00:05:00 Am I making any sense whatsoever?
00:05:02 Are you seeing similarities, hauntingly familiar things
00:05:06 from the textbook in the 20s, 30s,
00:05:08 to what we're seeing right now?
00:05:10 - Other than looking to find the rabbit, George,
00:05:13 to see where to pull it out of a hat, right?
00:05:15 - Ah! - Ah, you like
00:05:16 what I did there.
00:05:17 So I don't know if it's similar or not,
00:05:19 but like I said before, this state of the markets
00:05:22 is a lot of the last 50, 60, or 70 years.
00:05:25 It has a little piece of everything.
00:05:26 So to answer your question, I don't know what year
00:05:28 I would say we were in the 20s at this point.
00:05:30 We've already been through one major dip.
00:05:32 We know what happened in the 20s,
00:05:34 and then we had a nice rally,
00:05:36 and then it sold back off again, right?
00:05:37 So if that's what you're insinuating,
00:05:39 do I think that that can happen?
00:05:40 Yes, I think that can happen.
00:05:42 The SEC, which I'm gonna rot about later,
00:05:44 was formed after that, correct?
00:05:46 - All right, so hold on a second.
00:05:47 And by the way, we're gonna have a rot by Danny Moses.
00:05:51 I'm not asking you to insert that.
00:05:52 I'm just doing that now organically.
00:05:54 Please continue, Danny.
00:05:55 - No, so listen, I don't know what the simulators are,
00:05:57 'cause I wasn't around, and you were.
00:05:58 - Nor was I, nor was I.
00:06:00 Don't be a wise guy.
00:06:01 I wasn't around.
00:06:02 I know people make fun of my age.
00:06:03 I'm old, but I'm not that old.
00:06:05 - But I will say, again, the one thing
00:06:07 that people owe to themselves right now
00:06:08 is to do bottom-up work,
00:06:09 and none of that is happening right now.
00:06:10 At least none of it is paying off,
00:06:12 and that will pay off over time.
00:06:13 So the crowd moves in various directions.
00:06:15 Everybody moves together.
00:06:17 I like to think against the crowd, right?
00:06:18 I like to use behavioral finance.
00:06:20 So if you were a behavioral finance person
00:06:22 during that time period, you would have been okay.
00:06:24 You would have picked up on those signals.
00:06:26 - Are you a fan of roller coasters?
00:06:28 I'm going someplace with this, so indulge me for a second.
00:06:31 You are?
00:06:32 I see I'm not really, but I'll do it.
00:06:34 So typical roller coaster, you go up very slowly.
00:06:38 It's a slow rise.
00:06:40 You go up, and you hear the creaking,
00:06:41 but it continues to rise.
00:06:42 You never think you're gonna get to the top,
00:06:44 and then you finally get to the top,
00:06:46 and you pause for a brief second
00:06:48 before you sort of go down a huge hill.
00:06:51 It feels to me as if, in terms of the market,
00:06:54 we already went down the first hill,
00:06:56 and we saw that in June.
00:06:58 We've been sort of climbing the next hill,
00:07:00 which might actually be the longest climb,
00:07:03 and then I think subsequently,
00:07:04 although it feels like it's never gonna end,
00:07:06 it ends abruptly, and I do think
00:07:08 that's where we're on the precipice of.
00:07:10 This move in the S&P 500 has basically got us
00:07:13 a 50% retracement of the all-time high
00:07:16 made much earlier this year or late last year,
00:07:19 depending on when it was,
00:07:20 and the recent low we saw in June.
00:07:22 This is a textbook 50% correction,
00:07:25 something we alluded to, by the way, in mid-June as well.
00:07:28 Here we are.
00:07:29 I will tell you, although people will say
00:07:31 earnings have been great, great, great, no.
00:07:33 Earnings have been fine.
00:07:35 The price action on the back of the earnings has been great,
00:07:38 and we still have some big boys yet to report,
00:07:41 and I'll point you to NVIDIA in a second,
00:07:43 but again, markets at some point,
00:07:46 fundamentals come into play,
00:07:48 and to me, the fundamentals suggest
00:07:50 that earnings growth is going to decrease.
00:07:52 There's significant headwinds out there,
00:07:55 and the multiples are still too rich
00:07:57 in a number of different sectors.
00:07:59 - This is a big difference.
00:08:00 Companies that actually make money, have a real business,
00:08:03 are gonna survive, are separated
00:08:04 from the companies that don't,
00:08:06 and now the companies that don't,
00:08:07 it's almost as if they're on a different rollercoaster.
00:08:09 It's almost as if you don't want them
00:08:10 to have real earnings or real revenue
00:08:12 'cause it's easy to fantasize on some of these meme stocks,
00:08:14 and Dan's not here so I can talk about the meme stocks
00:08:17 since he hates talking about them, but that's where,
00:08:18 so we've gotta separate those in two worlds.
00:08:20 - When you look at a company like Bed Bath & Beyond,
00:08:23 symbol BBY, comes out B-B-B-Y as we used to say.
00:08:27 When you see something like that,
00:08:29 to me, it's not a sign of a healthy market.
00:08:31 It's a sign that the insanity is still out there.
00:08:35 - Yeah, I mean, you had a stock,
00:08:36 so let's go back to March when Ryan Cohen
00:08:39 decided he was gonna become an activist and take a stake
00:08:41 'cause he wanted them to sell Bye Bye Baby.
00:08:43 He wanted to get on the board, he wanted to do these things.
00:08:45 So the stock was 15.
00:08:47 We were on air the next day, I think that happened.
00:08:49 Stock traded pre-market 30, back to 15, back to four.
00:08:52 - Round trip, as we say. - Round trip.
00:08:54 - You talked about it. - I did,
00:08:55 and now look what just happened again.
00:08:56 - I know what happened. - Same thing,
00:08:57 where did it hit?
00:08:58 It hit 30 the other day, right?
00:08:59 Then he comes out, he goes, "I'm selling my stake."
00:09:01 So there's activists and then there's activists, right?
00:09:04 So you got the value acts of the world,
00:09:05 the Elliott management of the world,
00:09:07 the third point of the world that actually wanna go in,
00:09:09 restructure companies, help them grow value.
00:09:11 And then you have the Ryan Cohens of the world
00:09:13 or the Adam Aarons of the world or even the Musk,
00:09:16 whatever the world, that just say things
00:09:18 because they think it's cool and wanna do stuff
00:09:19 really never amounts to anything.
00:09:20 And that's my point.
00:09:22 You can't really fix the Bed, Bath & Beyond.
00:09:24 You can go in and fix a Disney to tell 'em to sell ESPN
00:09:27 or spin that out.
00:09:27 You can go in and fix certain, right?
00:09:29 There's certain companies, and I think,
00:09:31 I was gonna go through that whole exercise here.
00:09:32 We are seeing a lot of activists right now,
00:09:34 and people should pay attention to those are real activists.
00:09:37 You may not like the geckos of the world,
00:09:39 but they're tearing apart.
00:09:40 Go ahead.
00:09:40 - That's it.
00:09:41 Well, it's exactly right.
00:09:42 Sir Lawrence Wildman actually wanted to fix Blue Star.
00:09:47 - 70 and a half.
00:09:48 Yeah.
00:09:48 - If you remember, like he actually had a vested in,
00:09:50 like he thought he could fix it.
00:09:52 Gecko didn't.
00:09:53 - Your ruthless pirate gecko.
00:09:54 - To buy the stock, watch it go higher,
00:09:57 break it up, do that whole thing.
00:09:58 It's very interesting that you mentioned.
00:10:00 I think in some ways activists are good.
00:10:03 There's an altruistic element to that.
00:10:05 And I think Sir Lawrence Wildman in the movie "Wall Street"
00:10:08 was that character.
00:10:09 Gordon Gecko portrayed by Michael Douglas was not.
00:10:12 He was in it for himself.
00:10:13 By the way, nothing wrong with that,
00:10:15 but let's make sure we identify what's going on.
00:10:18 In terms of what happened just now with Bed, Bath and Beyond
00:10:22 that stock was going nowhere.
00:10:23 I don't think it was coincidence, Danny Moses,
00:10:26 that the options deep out of the money options that he bought
00:10:30 somehow made it into the ether.
00:10:32 People will say, well, he thinks it's going there.
00:10:34 No, he doesn't.
00:10:35 That to me is a low cost advertising way
00:10:38 of getting your position higher.
00:10:40 And that's exactly what happened.
00:10:42 So if he's gonna lose, let's just throw numbers out.
00:10:45 A million dollars in his options,
00:10:46 and I'm making up numbers now,
00:10:48 but he makes $10 million in the stock move.
00:10:51 Guess what?
00:10:52 You do that trade every single day.
00:10:54 - Yeah, so those options were bought previously, right?
00:10:57 - Yes. - Prior to this run up.
00:10:58 - Yes. - So we're on the same page.
00:10:59 He bought a lot more stock than he did options,
00:11:01 but yes, it was $60 strike price, I think.
00:11:03 - 60 and 80, I think.
00:11:05 Now again, people will say to me,
00:11:06 well, guy, he thinks the stock is going.
00:11:08 No, he doesn't.
00:11:09 He doesn't think that at all.
00:11:11 That to me is a way again,
00:11:13 to get the sort of the juicy afterburner going,
00:11:16 understanding when that makes its way out there
00:11:19 into the public, people will start talking about it
00:11:22 and it becomes self-fulfilling.
00:11:23 He never, I'm just speaking for him,
00:11:25 I don't know, obviously.
00:11:26 In his wildest dreams, he didn't think it was going there.
00:11:29 But I think he did know that once the Reddit
00:11:32 Wall Street Bets crowd gets their arms around it,
00:11:34 the underlying stock was gonna go to a level
00:11:37 that made him a shitload of money.
00:11:39 Yes, I said shitload.
00:11:40 - Yeah, listen, let me go back to all this
00:11:42 activist investing that's been going on, the real stuff.
00:11:44 So Elliot Investment Management
00:11:46 sold out of their soft bank, why?
00:11:48 Because they believe for a period of time
00:11:49 that soft bank should buy back their stock
00:11:51 because they thought there was a mismatch
00:11:53 on what the value of their portfolio was
00:11:54 to where the equity was actually trading.
00:11:56 They figured out over a period of time
00:11:58 that the assets were mismarked and they got out.
00:12:00 What'd they do?
00:12:01 They got involved, Cardinal Health, PayPal,
00:12:04 Pinterest, Aerojet, right?
00:12:05 These are all things that they've been involved in.
00:12:07 There's a thesis behind all of them.
00:12:09 Dan Loeb at Third Point, right?
00:12:10 Disney, like I just before,
00:12:11 he wants to spin out ESPN, right?
00:12:13 Corvex, MDU Resources, right?
00:12:15 There's activists there.
00:12:17 Read those versus reading this other stuff
00:12:18 is what I'm talking about.
00:12:19 And the market, by the way, in hindsight,
00:12:21 probably should have been talking about this before,
00:12:23 has been ripe.
00:12:23 Activist investors, what this market did,
00:12:26 we always said there's opportunities
00:12:27 on the long side and the short side.
00:12:29 They do real work.
00:12:30 They're evaluating this.
00:12:31 And they take a stake and they announce it.
00:12:32 And yes, they're doing it to make money, guy.
00:12:34 Let's not kid ourselves.
00:12:35 They're not doing it to help people necessarily,
00:12:37 the boys, but they're capitalists.
00:12:38 That's what they get paid to do.
00:12:40 So take a look at that versus all this other bullshit
00:12:42 that's going on because here's the SEC, right?
00:12:45 Who has done nothing.
00:12:45 You know why they're doing nothing?
00:12:47 This is now my rot.
00:12:48 This is my rot.
00:12:49 I'm rotting now.
00:12:49 - Oh, oh, oh.
00:12:50 - I'm going right into the rot.
00:12:51 - All right, so wait a second.
00:12:52 - Rip off the tape brought to you by the absent Dan Nathan.
00:12:54 - Without further ado, Danny Moses
00:12:57 is gonna rip off the tape.
00:12:58 Something here on the tape podcast we call a rot.
00:13:01 Danny, please not sponsored yet.
00:13:02 We should get somebody to sponsor it
00:13:04 like some jockage commercial.
00:13:06 - Right.
00:13:07 - Save your rot, go to Danny Moses, something like that.
00:13:10 I don't know.
00:13:11 I'm just throwing it out there.
00:13:12 Amanda, I'm sure is smiling right now, but please continue.
00:13:13 - So let's go back to GameStop a year and a half ago, right?
00:13:17 Where all hell broke loose, right?
00:13:18 Where the buy button supposedly was canceled
00:13:20 and all that shit.
00:13:21 And everybody got upset in the retail world.
00:13:23 Again, it's Wall Street screwing us.
00:13:25 So the SEC realizes they're in a tough position.
00:13:27 Do you protect the retail investor from themselves
00:13:31 by going after and trying to figure out what happened?
00:13:33 They kind of did nothing, right?
00:13:34 If you remember at the end of the day,
00:13:35 the report was, yeah, there was some inefficiencies.
00:13:37 Nothing really happened.
00:13:38 We're not exactly sure what happened.
00:13:40 Yeah, maybe Citadel was colluding here and there
00:13:42 with Melvin Capital, whatever it might've been, whatever.
00:13:44 So it goes by the wayside.
00:13:45 So now we have this second run up,
00:13:47 which is an SEC nightmare and all these names, right?
00:13:50 GameStop, Bed Bath, what'd you name?
00:13:51 There's 10 of them, 12 of them now.
00:13:52 They're running out of, so what do you do?
00:13:54 Does the SEC have an investigation?
00:13:56 Do they look and see what's happening?
00:13:57 No, the reason they won't do it
00:13:59 is because the retail world, who they're supposed to protect,
00:14:02 thinks that they're out to hurt them.
00:14:03 So what do they wait for?
00:14:04 They wait for the stocks to get killed,
00:14:06 go back to the levels that they think that they should be,
00:14:08 and then they'll come out
00:14:09 and announce some type of examination.
00:14:11 Their hands are completely tied.
00:14:12 And where did this all start, guy?
00:14:14 This all started with Elon Musk.
00:14:15 The whole thing, by not reprimanding him
00:14:17 to the degree that they should have,
00:14:19 just a $20 million fine for a fake 420 buyout, right?
00:14:21 That's all it really was.
00:14:23 It allowed, did it go uncheck?
00:14:25 It opened the door for all of this.
00:14:26 So now if you're the SEC,
00:14:27 you didn't go after the biggest meme stock in the world.
00:14:30 How do you go after all this stuff that's going on?
00:14:31 You have Adam Aaron at AMC
00:14:34 talking about what's going to happen
00:14:35 when he reports the quarter.
00:14:37 Stay tuned, APE fans, I gotta surprise you.
00:14:39 How is that even legal to even trade on, right?
00:14:41 That kind of shit.
00:14:42 Musk the other day,
00:14:43 I think I'll buy Manchester United soccer team.
00:14:45 I think that's what I'm gonna do.
00:14:46 Stock trades up, this shit that's going on too long.
00:14:49 So the SEC has done nothing.
00:14:50 They're completely powerless.
00:14:51 The only thing the SEC has done right
00:14:53 was not allow coins in the crypto world
00:14:56 to actually make it into the,
00:14:57 or to stop those from happening.
00:14:59 Like I give them credit for that.
00:15:00 And that just, I think they got lucky.
00:15:01 - They got lucky with that.
00:15:02 - So this is all, again, people think,
00:15:04 oh, you hate meme stocks.
00:15:05 It's not about hating the meme stocks.
00:15:07 It's about telling,
00:15:08 and I know we have people that listen out there
00:15:09 that trade these stocks.
00:15:10 - Which is fine.
00:15:12 - Right, so many make money.
00:15:14 This kid out in USC, this 20 year old,
00:15:16 made $120 million trading Bed Bath & Beyond
00:15:19 or whatever he just did.
00:15:20 Congratulations to him, right?
00:15:21 We should have him on the show, by the way.
00:15:22 But they're gonna end up losing money.
00:15:23 The majority of these people will lose money
00:15:25 because they're just hoarding.
00:15:27 They're just joining a club or a crowd
00:15:28 and they believe in it.
00:15:29 There's no, without any question,
00:15:32 back to the poker reference, cards speak in the long run.
00:15:34 You can have these things trade to wherever they wanna go.
00:15:37 We saw Volkswagen 12 years ago.
00:15:38 We've seen crazy shit.
00:15:40 Tilray, we saw, we've seen stuff, guy, in our careers.
00:15:44 We know how this ends.
00:15:45 So shame on the SEC for not being very vocal about it
00:15:49 and saying just a statement.
00:15:50 Hey, retail, hey, retail investor,
00:15:54 I'm out to protect you guys.
00:15:55 You need to do fundamental analysis here
00:15:58 'cause you shouldn't pay attention
00:15:59 to a lot of the gossip and stuff that's out there.
00:16:01 And it's just shit, it's just bad.
00:16:03 - No, look, I agree.
00:16:03 They're so far behind the curve on this one,
00:16:06 this completely blind side of them.
00:16:08 I don't think they understood the power of the mob,
00:16:11 the mob in this case, you know, vis-a-vis social media
00:16:15 and what it can do and how quickly these stories
00:16:18 begin to sort of get around the market
00:16:20 and how quickly these stocks move.
00:16:22 My concern with this one specifically is
00:16:25 for probably 75% of the people that got involved,
00:16:29 I'm sure they're the people that bought the stock
00:16:30 somewhere north of 25.
00:16:32 And a day later, it was a teenager.
00:16:34 That's a problem.
00:16:35 And I think people are like, oh my God,
00:16:37 it's sort of the old horse adage,
00:16:39 they're off, you lose.
00:16:40 And that's exactly what this here.
00:16:42 So we're not trying to protect you from yourselves.
00:16:45 We're not trying to be arrogant here.
00:16:46 There's no condescending comments coming out of us.
00:16:49 Just understand what the game is.
00:16:51 And if you can gamify it as well as some of these
00:16:54 other people, go at it, but understand that
00:16:57 that's exactly what it is.
00:16:58 It's the gamification of the stock market,
00:17:01 something you talked about 15, 16 months ago, Danny.
00:17:04 - Yeah, we talked about that and we talked about
00:17:07 sports gambling, which is part of that as well,
00:17:09 which I want to lead into here also,
00:17:10 which is the same aspect, right?
00:17:12 People had a DraftKings account, a Robinhood account
00:17:14 and a Coinbase account, and they kind of see that.
00:17:16 And you can see that still is pervasive.
00:17:18 I'd much rather have the Yankees last night,
00:17:20 bottom of the 10th, the odds were 20 to one
00:17:22 for them to win and hit that, right, Guy?
00:17:23 It was a nice walk off.
00:17:25 That was a nice walk off by Donaldson.
00:17:25 - By the way, Josh Donaldson, about freaking,
00:17:27 this is an MVP of the league that's done jack shit all year,
00:17:32 finally had his signature moment as a New York Yankee.
00:17:35 I hope, Danny Moses, and I think you would agree,
00:17:38 that might turn the tide back for the Yankees this season.
00:17:43 - Just to be clear, I'm not a Yankee fan,
00:17:44 but I'm a sports fan, so I like seeing cool shit
00:17:46 like that last night. - That was cool.
00:17:47 - That was cool, the Mets are gonna sweep 'em
00:17:48 next Monday, Tuesday, we should make a bet on that,
00:17:50 but that'd be quite a spectacle.
00:17:52 - You know, see, you and Dan do your thing.
00:17:54 If you've noticed over the last,
00:17:56 we've been together a long time now.
00:17:57 I mean, we started this in January of 2021, is that correct?
00:18:01 - Yep. - So what is this,
00:18:03 August now? - We started right
00:18:04 when games stopped, that's when it all started.
00:18:05 - I understand, I'm just trying to do the math here.
00:18:07 I mean, we're some 20 months into this thing.
00:18:09 Have you ever heard me make a bet?
00:18:12 - Nope. - Nope.
00:18:13 - No, that's you and Dan, and Dan went down
00:18:15 that rabbit hole and he's never been able
00:18:17 to extract himself from it.
00:18:18 Here he is with $100 sitting in front of him
00:18:21 in the form of two $50 bills.
00:18:23 - Already took it back. - And he's not here
00:18:24 to collect. - No, I'm not getting it.
00:18:25 - So tough shit. - So let's talk
00:18:26 about the gambling stuff, right?
00:18:27 - Please. - So for years, I get it.
00:18:29 DraftKings, FanDuel, they all spend
00:18:31 tremendous amount of money, right?
00:18:32 So it's all marketing costs, and I get it.
00:18:34 I know the short thesis very well.
00:18:36 We are now anniversary-ing here on like two to three years
00:18:39 of kind of sports gambling being legal.
00:18:40 It's gonna get approved in California
00:18:42 probably later this year, so it's on the come.
00:18:43 And all these companies that are competing
00:18:45 against each other, BetMGM, FanDuel.
00:18:48 - Caesars, they can rattle 'em all off.
00:18:50 - Right, so you see, that's all you see.
00:18:51 I don't even remember what ads there used to be
00:18:52 on sports before gambling.
00:18:53 I can't even remember Gatorade.
00:18:55 I don't know what it was, but they all kind of come
00:18:58 to the realization they gotta slow down the spending,
00:19:00 that they're entrenched now.
00:19:01 This is gonna be a huge season.
00:19:03 Obviously, it doesn't take a genius to figure out
00:19:05 this will be a record-breaking season for online gambling,
00:19:08 but I think the seeds have been sown,
00:19:10 and these stocks now, look at Sport Radar, SRAD, right?
00:19:13 Look at MGM, these things are starting to move.
00:19:14 Entain, these things are acting, DraftKings.
00:19:17 Like, yes, they're moving with kind of the rest
00:19:19 of the market, but I actually believe the short,
00:19:21 on a lot of these names, I'm not saying
00:19:22 they're not overvalued, but that's a tough macro train
00:19:26 to be short ahead of, and so when you think about,
00:19:27 Sport Radar came out with their numbers.
00:19:29 How many businesses in this world right now
00:19:31 are accelerating, like in terms of revenue growth, right?
00:19:34 And marketing spend's coming down,
00:19:35 so that's gonna be a great combination, obviously,
00:19:38 to see better growth in these companies.
00:19:39 So I would not be short these names right now.
00:19:41 I think you're gonna see, if anything, consolidation
00:19:43 may come in these names, and listen,
00:19:45 there's two sectors right now that we're gonna need
00:19:47 over the next several years.
00:19:48 It's sports gambling, I'm talking for tax revenue,
00:19:51 'cause if we're going to what we think we are--
00:19:53 - I bet you I know what the other one is.
00:19:54 - What is it? - Cannabis.
00:19:55 - Yes, correct, so meanwhile,
00:19:56 so those two kind of go together sometimes, I guess,
00:19:58 if you're crazy enough to bet, anyway.
00:20:00 So do you think that the Big Ten just signs this bill,
00:20:04 okay, whatever, why, why, Guy?
00:20:06 - I know why. - Why, Guy?
00:20:07 - Because of gambling. - Exactly right.
00:20:09 - Because of sports gambling.
00:20:10 - Let me read you the opening weekend in college football
00:20:13 that, with the exception of the alumni of these teams
00:20:15 and players' family and the players,
00:20:18 it's a marquee schedule, right?
00:20:19 This is August 27th.
00:20:21 The real season starts September 3rd,
00:20:22 but the reason you have these names on the 27th
00:20:24 and these games, Austin Peay and all this stuff,
00:20:26 which is great, I love Austin Peay,
00:20:28 my point is that people watch it now.
00:20:31 Why are they watching it?
00:20:32 There's only one reason.
00:20:32 - 'Cause they got action.
00:20:34 - Exactly, 'cause they got action.
00:20:35 So those type things, to me, in-game, in-game,
00:20:37 and we're gonna have Chris Bevilacqua on here
00:20:39 in a couple weeks to kick off the NFL season,
00:20:41 pun intended, Guy, with us, who runs Simple Bet,
00:20:44 who's partners with Jav Kings,
00:20:45 who's doing real in-game live wagering stuff, right,
00:20:48 using artificial intelligence, which, by the way,
00:20:50 I'm gonna talk about in a second,
00:20:51 artificial intelligence for lending
00:20:53 and artificial intelligence for sports gambling
00:20:55 are two different worlds, obviously,
00:20:56 but it's exploding here.
00:20:58 So there's, it's no going back, you know,
00:21:00 I'm not saying there's not bad things that can happen
00:21:01 from people being addicted to gambling,
00:21:03 but it is what it is, so.
00:21:04 - I wanna talk about the broader market.
00:21:06 By the way, Chris Bevilacqua,
00:21:08 I like saying that, not to be confused with the great
00:21:11 Kurt Bevilacqua, who had a cup of coffee with the Yankees.
00:21:14 As you're listening to this podcast, it is Friday,
00:21:17 maybe you're listening to it on Saturday, I don't know,
00:21:19 but you're not listening to it on Thursday,
00:21:21 Thursday the 18th, Wall Street Journal headline.
00:21:26 This is really interesting,
00:21:27 because I said exactly this a week ago.
00:21:29 "Wall Street bets that the Fed is bluffing
00:21:33 "in a high-stakes inflation game."
00:21:35 Here's the point of that headline, in my opinion.
00:21:38 Market's getting bought up, people are buying stocks,
00:21:41 thinking at exactly that.
00:21:43 With the data coming out, as soft as it's been,
00:21:46 the Fed's gonna have to back off,
00:21:48 and they don't wanna be behind that curve,
00:21:51 they wanna be ahead of that curve.
00:21:52 And they hear the Fed talk tough,
00:21:54 they hear 'em talk hawkish, we're gonna fight inflation,
00:21:57 but the data suggests, maybe at some point,
00:22:00 they're gonna have to stop.
00:22:01 And people have been buying stocks hand over fist
00:22:05 in anticipation of that.
00:22:07 I would submit that's completely wrong course of action.
00:22:11 Now, it's been right that stocks have gone higher,
00:22:13 but I gotta tell you something.
00:22:14 I think this Fed is steadfast
00:22:16 in their want to get inflation down,
00:22:19 and they've trotted out just about
00:22:20 every single Fed governor imaginable,
00:22:23 and people that aren't even there anymore
00:22:25 to say exactly that.
00:22:26 Yet the market thinks they're bluffing.
00:22:29 Thoughts?
00:22:30 - I'm Captain Obvious.
00:22:32 So let me explain.
00:22:33 So in the Fed minutes, it says,
00:22:35 they could see the pace of hiking slowing.
00:22:37 Really?
00:22:38 Back to back 75 bips?
00:22:39 Yeah, you bet your ass the pace is gonna start slowing
00:22:42 at some point, right?
00:22:42 It's hard to imagine more.
00:22:44 So I don't think anyone believes
00:22:45 there's 1% rate hike coming on the table during a meeting.
00:22:48 There's either 50 or 75 maybe coming next.
00:22:50 Who knows?
00:22:51 Maybe 25, if things really slow down a lot.
00:22:53 So they honestly, from those Fed minutes,
00:22:55 if you really read them, don't take the quotes
00:22:57 and extract them to how you wanna view the market,
00:22:59 positive or negative.
00:23:00 Read 'em in their entirety.
00:23:01 'Cause really what it said to me
00:23:02 is they have no effing idea.
00:23:04 By the way, that's fine.
00:23:06 'Cause I don't think anybody really has a sure thesis
00:23:08 for what's gonna happen.
00:23:09 - Nor do I.
00:23:10 But I'm not a Fed governor.
00:23:11 I'm not the one that was begging for inflation for years
00:23:14 and then saying somehow I could control it once we got it,
00:23:16 and then saying it's transitory for months, months, months,
00:23:19 when it was clear to the entire frickin' world
00:23:21 that it was anything but transitory.
00:23:23 Then finally throwing in the towel in November,
00:23:25 now have an inflation rate which peaked at 9.1%,
00:23:29 which recently made it 8.5%.
00:23:31 You want it to get to two.
00:23:32 I gotta tell you, the move from nine to seven
00:23:34 might be pretty easy.
00:23:36 The move from seven to two is gonna take a lot longer
00:23:39 than people think.
00:23:40 And oh, by the way, this is off topic,
00:23:42 but I'll just mention it.
00:23:44 Crude oil getting off the mat over the last couple days.
00:23:46 Keep an eye on it.
00:23:47 But the one that nobody wants to talk about it
00:23:50 for whatever reason,
00:23:50 and the one that actually has an equal impact on industry
00:23:54 is natural gas.
00:23:55 And look what's been going on in nat gas
00:23:57 over the last week or so.
00:23:58 Yes, Danny Moses, it's been going higher,
00:24:01 and it's gonna continue to go higher.
00:24:02 - I was doing the higher winks.
00:24:04 - Yeah, thumbs up.
00:24:05 Higher. - Higher wink.
00:24:06 - Moset, that was card sharks. - Card sharks, yes, exactly.
00:24:08 - I love that, Gant. - Change that card.
00:24:10 Change that card.
00:24:11 But yeah, listen, that's a big problem.
00:24:12 You've been talking about this.
00:24:13 The flip side of all this excitement
00:24:15 about the market the Fed done
00:24:16 is that it's going to force the Fed to keep going
00:24:19 because that will reinforce inflation pressures
00:24:21 that are gonna occur.
00:24:22 So other side of the Goldilocks,
00:24:23 we've said that 100 times, I won't say it again.
00:24:25 But the other impact this is having
00:24:26 is on corporate bonds, right?
00:24:28 - Yes. - And on yields.
00:24:29 And so S&P Global Ratings,
00:24:31 who we can talk about what they did in 2008.
00:24:33 That's a whole 'nother discussion.
00:24:34 Now they wanna save the world, right?
00:24:36 They're talking about-- - It's interesting you say it.
00:24:37 Save the world.
00:24:38 See that ties us back to-- - Save the world, exactly.
00:24:39 - By the way, in a few minutes,
00:24:41 Tommy Vitor of Pod Save the Queen will be here.
00:24:43 Back to you.
00:24:44 - So they have, in corporate bond world,
00:24:46 there's something called fallen angels.
00:24:47 There's a great article this morning,
00:24:48 I think it's in the journal,
00:24:49 about the amount of fallen angels.
00:24:51 So if you get downgraded into junk status,
00:24:53 that you're then a fallen angel.
00:24:54 So just a point of reference,
00:24:55 last year I think there was $32 billion total of debt
00:24:59 that fell into this category.
00:25:00 S&P estimates that globally that number
00:25:03 potentially could reach 176 billion this year.
00:25:05 What does that mean?
00:25:06 It means your HYG and your JNK and all this stuff,
00:25:08 and pension funds can't buy things that are rent.
00:25:11 So this is what we talked about before,
00:25:12 about bond selection, stock selection, right?
00:25:14 You can't just buy a passive fixed income ETF.
00:25:17 You're better off buying,
00:25:19 if brokers don't know how to do this,
00:25:20 an individual corporate bond, right?
00:25:22 Can you imagine? - People even do that?
00:25:23 - Do you imagine?
00:25:24 Can you imagine? - No, I don't think people,
00:25:25 you know who does that?
00:25:26 I'll tell you who does that, Federal Reserve.
00:25:28 - Yeah, Federal Reserve.
00:25:29 That's true. - No, it's true.
00:25:30 - You got it, that's true.
00:25:31 I'm so glad Dan's not here to talk about this,
00:25:32 'cause you, oh, the guys move on from the Federal Reserve.
00:25:34 No, but it's true.
00:25:35 There's been no price discovery.
00:25:36 - Okay, Dan, you're not here.
00:25:38 We're gonna move on from the Federal Reserve.
00:25:39 The problem is, that's the story.
00:25:42 Everything is predicated on these bozos.
00:25:44 Back to you.
00:25:45 - Yeah, so listen, it doesn't,
00:25:46 it also has an impact on other things, right?
00:25:48 So we talked about this before, funding costs.
00:25:50 We're gonna talk about the banks in a second.
00:25:51 - Yes.
00:25:52 - Before we get to real banks,
00:25:53 let's go to fake banks, right?
00:25:54 So Upstart and Affirman, these guys, again, Carvana.
00:25:57 Companies that depend on the ABS market
00:26:00 to fund their balance sheets.
00:26:01 What does that mean?
00:26:02 They make a loan, they're not a bank,
00:26:04 they don't hold it, they have to sell them to invest.
00:26:05 So banks provide them capital, they create the loans,
00:26:07 and then put them in packages and sell them.
00:26:10 As soon as that bottlenecks up,
00:26:11 as we've seen, they have choices.
00:26:13 Well, last week, I don't know if anyone saw it, Upstart,
00:26:15 right, they actually came out and said,
00:26:17 "You know what we're gonna do?
00:26:18 "We're gonna buy back our own paper,
00:26:20 "because we're gonna use our cash to buy back paper."
00:26:24 Let me tell you, that happened to Subprime,
00:26:26 that's exactly what happened.
00:26:27 So Wall Street cut the funding to all the Subprime lenders
00:26:30 in 2005, '06, '07, a period of time.
00:26:33 Those companies had no choice but to say,
00:26:34 "You know what?
00:26:35 "We're gonna balance sheet these loans, hold on."
00:26:37 - No, no, I want, yes, I remember that.
00:26:40 And the way they positioned it,
00:26:41 the way they packaged it was,
00:26:43 "We're so confident that that's where we're gonna
00:26:45 "buy our own stuff back."
00:26:47 In reality, they had no choice.
00:26:49 It's all the way they packaged it then,
00:26:51 and it's the way they're packaging it now.
00:26:53 - So, I mean, this is the quote from the Upstart,
00:26:55 that was last week, right?
00:26:57 I don't know how I missed it, but whatever.
00:26:59 So, "Upstart plans to start using cash reserves
00:27:02 "to buy some of its own asset-backed bonds.
00:27:04 "The company executive said on an earnings call last week,
00:27:06 "Our mission is to try and bring people
00:27:08 "who might not seem optically credit-worthy
00:27:11 "through their traditional banking lens into the system."
00:27:13 This was the CFO.
00:27:15 - Hold on, what is optically?
00:27:16 Was that somebody that wears a suit?
00:27:17 - No, optically, so, oh, you have a 530 FICO,
00:27:19 but it must be different, 'cause we're gonna run you--
00:27:20 - I don't know, I'm asking. - We're gonna run you
00:27:21 through your social media and see if you approve.
00:27:23 "We're on a journey of convincing the markets
00:27:26 "that they can rely on our technology,
00:27:28 "and we are comfortable stepping in with our balance sheet
00:27:30 "to provide financing to do it."
00:27:32 To which I wrote to myself, to mention to myself,
00:27:34 and then underneath it, to myself, I wrote, "Nighty-night."
00:27:37 Okay, that's it, it's over, it's over, okay?
00:27:40 So, I was short Upstart, right?
00:27:42 I'm reengaging, I'm reengaging Batman here,
00:27:45 because that's all I need to see.
00:27:46 And let me explain, I wanna talk one other thing.
00:27:48 - No, it's your podcast. - I don't wanna lose people.
00:27:50 - Please. - So, these things,
00:27:52 like people don't, 'cause there's no cycles, right?
00:27:53 People don't see cycles.
00:27:55 That's bullshit, what that guy just said.
00:27:57 But there was a guy named Mark Rosenthal,
00:27:58 really close friend of ours, who ran a fixed income fund
00:28:01 for us when we were at Frontpoint, right?
00:28:02 He was at CBAS, he saw the world ending.
00:28:05 He told me and our group how to trade the world ending.
00:28:07 He was one of the really instrumental guys to kinda do it.
00:28:11 In 2003 and four and five,
00:28:14 when subprime was really taking off, something happened.
00:28:17 Traditionally, subprime bonds, everybody hang with me here,
00:28:19 subprime loans tend to default within 12 to 18 months.
00:28:23 That's what they do.
00:28:24 You get a car, you make payments
00:28:25 for the first seven or 12 months.
00:28:26 You buy a house, you make payment,
00:28:27 whatever it might be, you tend to trade.
00:28:29 This time was different in 2003, four and five, why?
00:28:32 Because brokers, mortgage brokers and banks
00:28:35 were inventing new products.
00:28:36 They invented 228 mortgages, 327, what does that mean?
00:28:40 Arms, right?
00:28:41 Come out of your loan.
00:28:42 So what happened was subprime bonds,
00:28:44 hang with me everybody, were prepaying within six months.
00:28:48 You never saw the deterioration, okay?
00:28:50 You following me, guy?
00:28:51 - Yeah, I completely follow.
00:28:52 - So what happened was Moody's, S&P,
00:28:54 everybody just jumped on the train.
00:28:55 This time's different.
00:28:56 No, lending is never different.
00:28:58 Let's shift to the banks here, but lending's never different.
00:29:00 My point is that look under the sheets
00:29:02 and what is going on, a firm, upstarting these guys.
00:29:04 It's all bullshit.
00:29:05 You can't AI lending, it just doesn't work.
00:29:08 - The deterioration was there.
00:29:09 They just created products that created
00:29:12 its opaque environment where you couldn't see it
00:29:15 unless you were Danny Moses
00:29:17 or the aforementioned Rosenthal, who you probably--
00:29:19 - Rosie.
00:29:21 - I was just gonna say.
00:29:22 - My favorite Rosie, my Rosie.
00:29:23 - Rosie, let's talk about the banks.
00:29:25 And we're gonna talk about
00:29:26 a couple of individual stocks as well.
00:29:27 And if you listen to this, we're not doom,
00:29:30 stop with the doom and gloom stuff, we're not.
00:29:32 You have to understand what's going on with the markets.
00:29:35 I think I understand, and I gotta tell you,
00:29:37 this high stakes game of chicken,
00:29:39 I think that's exactly what's going on.
00:29:41 But you should look at some of the stocks you own
00:29:43 over the weekend and say, all right,
00:29:45 stock X, Y, and Z has run 30% from where I bought it
00:29:48 or 35% since the June low.
00:29:50 What am I thinking here?
00:29:52 Those are the conversations you have to have with yourself.
00:29:54 Banks are really interesting.
00:29:55 And I'm telling you folks, this one we nailed on the screws.
00:29:59 When Goldman Sachs was trading 275 before earnings,
00:30:03 we came in here on the On the Tape podcast
00:30:05 and I said, look folks, I'm telling you now,
00:30:07 Goldman is now trading at book value.
00:30:10 Goldman's quarter is gonna be excellent
00:30:12 in the form of fixed income currency and commodities.
00:30:15 They're gonna crush it on the trading front.
00:30:18 And I said, I'm not certain how much
00:30:20 the market will reward them for it,
00:30:22 but this is gonna be a great quarter.
00:30:24 The stock will trade higher.
00:30:25 Fast forward to today, Goldman Sachs has completely
00:30:28 outperformed some of the other banks.
00:30:31 That to me is not a great sign.
00:30:32 It's a great sign if you own Goldman Sachs,
00:30:35 but when you look at a JP Morgan, which bottomed out,
00:30:37 I think around 106 or so in the middle of June,
00:30:40 currently trading either side of 120,
00:30:43 that's not nearly commensurate with the move
00:30:46 Goldman Sachs has seen over that same period of time.
00:30:48 And that is telling a story.
00:30:50 We haven't even mentioned the fact,
00:30:52 and we're not gonna dwell on this,
00:30:53 that again, Tuesdays 10s,
00:30:55 around 40 basis points or so inverted.
00:30:58 That bottomed out around 50 basis points.
00:31:00 By the way, you'll see that again, folks,
00:31:03 coming to a theater near you.
00:31:04 That does not auger particularly well
00:31:06 for traditional banks,
00:31:08 despite what you hear from people out there.
00:31:11 - Yeah, so the banks, like we've said,
00:31:12 are gonna trade like utility stocks, right?
00:31:14 Safe places, right?
00:31:15 A lot of capital, they're fine.
00:31:16 Why is Goldman outperforming?
00:31:18 'Cause they're great at what they do.
00:31:19 Because what they've made up for in lack of M&A,
00:31:22 mergers and acquisitions,
00:31:22 or lack of initial public offerings, IPOs, as we call them,
00:31:26 they're trading their way out of this.
00:31:27 So they might be losing some counterparty customers
00:31:30 in the trading world,
00:31:31 but they're doing a great job of trading themselves,
00:31:33 as we well know.
00:31:34 Morgan Stanley, I think, plays second fiddle to that,
00:31:37 but I think that's how they also get viewed.
00:31:38 Then you have the consumer banks.
00:31:40 You have the JPMorgan, the Wells Fargo, the Bank of America.
00:31:42 We've been saying this all along.
00:31:43 Don't buy the XLF.
00:31:45 Buy the individual stocks.
00:31:46 And if you had done that on Goldman,
00:31:47 you would have seen, right,
00:31:48 guy, massive outperformance relative.
00:31:50 So the banks are a safe place to be.
00:31:51 They're just not sexy.
00:31:53 So can you park money there?
00:31:54 Yes.
00:31:55 But again, look for the companies
00:31:56 that have increased their credit reserves
00:31:58 and not released them or built them accordingly,
00:32:00 'cause they're in for a rude awakening,
00:32:01 'cause credit only has one way to go, guy.
00:32:03 Back probably a year or so ago,
00:32:04 you sort of put a bullseye on Walmart
00:32:07 and you created the bullish thesis,
00:32:09 which was right for a long period of time.
00:32:10 The world obviously changed quickly underneath their feet.
00:32:13 And I don't want to go down what happened at Walmart,
00:32:17 but I will tell you, as you know,
00:32:18 the inventory bill that they saw
00:32:20 was like four standard deviations worse
00:32:23 than the worst one they'd ever seen.
00:32:24 I mean, typically, Walmart's a company
00:32:27 that understands inventories better than any company
00:32:29 in the history of mankind,
00:32:31 and somehow they managed to screw it up.
00:32:33 The thing that saved Walmart was the next day,
00:32:35 Target did exactly the same thing in their release.
00:32:37 That's a couple of quarters ago.
00:32:39 Why do I mention Walmart?
00:32:40 Because again, if you listen to these things,
00:32:42 and the stock has bounced,
00:32:44 and it's basically gotten back half of the move
00:32:46 we saw from the recent high five or six months ago
00:32:50 to that trough low.
00:32:51 We're about halfway through it, but we're still not there.
00:32:54 But if you listen to what they're saying,
00:32:56 their customers are being affected
00:32:58 by exactly what's going on in the world.
00:33:00 Inflation is a problem.
00:33:02 And again, does it go away overnight?
00:33:05 No, it doesn't go away overnight.
00:33:06 When Walmart tells you this, when Target tells you this,
00:33:09 when a litany of companies tell you the same thing
00:33:11 over and over again,
00:33:13 when the Federal Reserve tells you this, it's a problem.
00:33:16 The stock market says, no, it's not.
00:33:19 I say, listen to the reports, listen to the CEOs, the CFOs,
00:33:23 and then make your own judgment, Danny Moe.
00:33:25 - Yeah, I feel like it's Peter Lynch 101, right?
00:33:27 - Yes. - Listen to what they say.
00:33:28 Just like, don't overthink it.
00:33:30 What is Walmart doing?
00:33:31 So just so we know, Walmart has basically round-tripped,
00:33:34 probably since we started this show,
00:33:35 it's gone as low as 115 or whatever, 112, as high as 165.
00:33:39 It's sitting at 140.
00:33:41 But the one thing that is happening,
00:33:42 which I thought might happen,
00:33:43 is the middle and upper class are starting to trade down.
00:33:46 - Exactly. - To shop at Walmart.
00:33:47 - And if you listen to that,
00:33:48 now people took that as a good thing.
00:33:50 No, no, no, no, no, no, no. - Maybe for Walmart.
00:33:52 Maybe for Walmart, yeah.
00:33:53 - For Walmart, it might be a good thing.
00:33:55 For Target, it might be a good thing.
00:33:57 But what is it really saying?
00:33:59 It's not, again, you have to sort of do
00:34:01 two standard deviations away from this.
00:34:04 What is that telling you?
00:34:06 To me, it doesn't paint a rosy outlook.
00:34:08 - No, and what's really interesting is we talked
00:34:09 that Walmart may have pre-announced
00:34:11 the day before the Fed meeting, just to,
00:34:13 "Hey, Fed, look at this.
00:34:14 "This is what's happening in the real world."
00:34:16 And then they beat the numbers, actually.
00:34:18 They beat revenues decently, right?
00:34:20 Not a ton percentage-wise. - They lowered guidance.
00:34:22 - And then they beat it a week later.
00:34:23 Just so we know, the quarter was closing in five, six days.
00:34:26 So, okay, so they wanted to give upside surprise to the street.
00:34:30 And then I think they raised the low end
00:34:31 of their guidance for the rest of the year, whatever.
00:34:33 My point is that I feel now,
00:34:35 from a two to three standard deviation,
00:34:37 they released that the day before the Fed would see it,
00:34:39 for a reason.
00:34:40 I think when companies like Walmart report,
00:34:42 if you're the Federal Reserve and you're not listening
00:34:44 to Walmart, Target, Home Depot, Lowe's,
00:34:46 what better real-time information can you get?
00:34:49 I don't need to know what a doctor jobs report is
00:34:50 or what, oh, continuing claims go up,
00:34:52 but initial jobless claims go down.
00:34:54 No, I wanna know what is happening in the real world,
00:34:57 not on statistics, which I'm not saying
00:34:59 they're all manipulated, I'm just saying
00:35:00 they're very inconsistent at times.
00:35:01 So, we're gonna get, we're gonna have one more round here.
00:35:04 We're gonna have Jackson Hole,
00:35:05 then we're gonna have another round of economic data
00:35:07 for the August print before the September.
00:35:09 We'll see what happens.
00:35:10 - It's interesting, Jackson Hole's coming up,
00:35:11 and we're gonna, obviously, we mentioned Peter Buckvar.
00:35:13 We're gonna talk to Peter on Monday, that's gonna drop.
00:35:16 And we talked about exactly that.
00:35:17 Peter's got some great thoughts.
00:35:19 But I'll ask you this, I made this point on fast money,
00:35:21 and again, this is what makes markets.
00:35:23 I think the higher the market goes,
00:35:26 the more latitude it gives Jerome Powell specifically
00:35:30 to talk hawkish and actually be hawkish.
00:35:33 What are your thoughts on that?
00:35:35 - Yeah, I agree.
00:35:35 We talked about that before.
00:35:36 I think it actually gives them more ammunition
00:35:38 to feel like, all right, let's do this.
00:35:40 We weren't gonna go 75 in September.
00:35:42 Seems like the market can take it, though.
00:35:44 Let's do the 75 instead of the 50.
00:35:46 That's the incremental difference, Guy,
00:35:47 I think, with what you're kinda talking about there.
00:35:49 - No, I agree, and it's gonna be fascinating
00:35:51 to see what comes out of that.
00:35:52 Because again, from 9/1 to 8/5,
00:35:54 everybody's doing jumping jacks, and the world is saved.
00:35:57 The reality is it's still a problem.
00:35:59 So we're gonna see.
00:36:00 And I guess the good news is they gave themselves
00:36:03 enough runway, and this is where the calendar lined up,
00:36:06 between the last meeting and the meeting we're gonna have
00:36:09 in mid to late September.
00:36:10 So that's gonna be interesting to see.
00:36:12 What sticks out to you here, though?
00:36:14 Because again, the cross-currents, Danny,
00:36:16 are many, to say the least.
00:36:18 And I'm trying to piece this all together.
00:36:21 I will tell you, semiconductors, to me,
00:36:23 again, I think semiconductors today,
00:36:25 and Tim Seymour said this,
00:36:26 so I'm not trying to steal it from him,
00:36:27 but semis today are what crude oil was
00:36:30 15 or 20 years or so ago.
00:36:31 I mean, semiconductors are basically the lifeblood
00:36:34 of a lot of things.
00:36:35 And you listen to a lot of these companies
00:36:37 lowering guidance, cutting revenue forecasts.
00:36:40 There's some school of thought out there
00:36:42 that Nvidia lowered revenue, lowered guidance
00:36:45 a couple weeks ago on gaming,
00:36:48 and now there's a thought that, you know,
00:36:50 when they release earnings, I believe on the 24th,
00:36:53 we're gonna see them do it again.
00:36:54 Thoughts?
00:36:55 - Things don't start to trend down like that
00:36:57 and just reverse course that quickly, right?
00:36:59 We talked about this is a 13, 14 year buildup.
00:37:01 This is secular, not cyclical.
00:37:03 So as that unwind starts to occur,
00:37:04 you're not gonna have, you may have less bad occurring,
00:37:06 which I think is a reason the markets have rallied,
00:37:08 and that's fine.
00:37:09 And certain companies can excel in this market environment
00:37:12 for sure, but I just think less bad
00:37:14 is not a great investment thesis
00:37:16 if you're expecting a V or even a U at this point.
00:37:19 There could be sectors that will benefit from it,
00:37:21 but to me, it's just been a washing machine.
00:37:23 And I don't even think I'd be doing well, obviously,
00:37:26 if I was actively trading on a desk.
00:37:28 I wouldn't because it's nonsensical, right?
00:37:29 This is not a fun tape to trade.
00:37:31 And I said on our last show,
00:37:33 right now if you're a hedge fund,
00:37:34 you're entering, you know, you're in the Ides of August,
00:37:37 you're heading into the end of the summer,
00:37:39 you wanna take down your book,
00:37:40 go into labor day, enjoy your last few weeks.
00:37:42 If you're even for the year, maybe you're down five,
00:37:44 maybe you're up three, there's a big difference
00:37:46 in being even and down five and down 12 and down 15.
00:37:49 They see where they need to be.
00:37:52 And so the thing that's been happening also
00:37:53 is the pairing of the risk down, right?
00:37:55 So a lot of these meme stocks and other stocks
00:37:57 that may not even be memes,
00:37:59 that have run up, that have high short interest,
00:38:01 hedge funds are like, you know what?
00:38:02 Just cover it and get out of the way.
00:38:03 We'll come back to it.
00:38:04 And if you're bullish on the market,
00:38:06 the last thing that you wanna see
00:38:08 from a technical perspective
00:38:09 is that shorts go cover everything
00:38:11 'cause they are your natural buyer.
00:38:13 So I don't know if I answered your question.
00:38:14 I think there's a behavioral finance aspect to this
00:38:16 and a realization that these companies
00:38:18 that have been doing well for 10, 12 years
00:38:20 and start to not do as well,
00:38:22 they don't snap back and do well again.
00:38:24 These aren't one quarter phenomenons.
00:38:25 And so if the inventory buildup indeed
00:38:28 at Target and Walmart and Home Depot and Lowe's
00:38:30 because of the shortage of products,
00:38:31 they wanted to make sure that they had them
00:38:32 and COVID and supply chain, yes.
00:38:34 You can squeeze that out over a period
00:38:36 of maybe six to eight quarters
00:38:38 before you kind of normalize again.
00:38:39 So I figure for every quarter that went by
00:38:41 when they were building,
00:38:42 you got to kind of have that on the other side.
00:38:43 So every company is different.
00:38:45 I'll just say this again.
00:38:46 Take the time.
00:38:47 The market's a fun, market's a great place to trade.
00:38:49 The market's incredible, it's dynamic,
00:38:51 but do yourself a favor and spend more time
00:38:52 really understanding these companies.
00:38:54 And don't get caught up on these Reddit boards
00:38:57 and all this stuff just to be a part of something
00:38:59 'cause you will lose, you will lose.
00:39:01 - Last year, you had an epic and historic run
00:39:06 in the league where they play for pay.
00:39:08 That's a hat tip to Mike Francesco.
00:39:11 It was, I just sitting watching it every week,
00:39:15 it was staggering the accuracy
00:39:17 with which you pick games in the NFL.
00:39:20 As we get closer to the beginning of the season,
00:39:23 my sense is you've been doing some work on some teams.
00:39:25 And I just want to give a taste to some people out there.
00:39:29 The obvious teams are the obvious teams.
00:39:31 They come in the form of the Buffalo Bills,
00:39:34 the Bills of Buffalo.
00:39:35 I think there's some people out there
00:39:36 that think the Chargers might have some magic left
00:39:39 in their tank.
00:39:40 We shall see.
00:39:41 I think there's some Raven fans out there
00:39:43 that still think somehow magically they can do damage.
00:39:46 In the NFC, bit of a horse of a different color.
00:39:49 Can the Rams do it again?
00:39:51 I don't know.
00:39:52 It's gonna be interesting to see what happens there.
00:39:53 Is anybody coming out of the NFC East?
00:39:56 Chances are no.
00:39:57 Do the Vikings finally figure it out?
00:39:59 Is there a team on your radar screen
00:40:02 that you're really doing work on
00:40:04 and some of you are over or under work?
00:40:06 Or just do you want to sort of give the audience
00:40:08 just a taste of how Danny Moses thinks?
00:40:11 - You know what?
00:40:11 The Buffalo Bills are gonna win the Super Bowl.
00:40:13 Barring injury, barring Josh Allen getting hurt, they are.
00:40:16 When you get that close, that's what it takes.
00:40:18 You gotta lose a couple of those games to get there.
00:40:20 So I like to take a few weeks at the beginning of the season
00:40:23 and see how teams are playing,
00:40:24 whatever the surprise teams will be.
00:40:25 I'm not gonna give those out right now, guy.
00:40:27 I'm gonna wait a couple weeks.
00:40:27 - That's just so I try.
00:40:28 - Because you got injuries and you got things
00:40:30 that are happening.
00:40:31 I don't want to be out there.
00:40:32 But as it stands right now,
00:40:33 the Bills should win that division, right?
00:40:35 And they should have home field
00:40:37 and they should go to the Super Bowl.
00:40:38 That's what I believe and I think they're gonna win it.
00:40:39 I think they have all the tools.
00:40:40 - Joe Burrow, if you're listening, we didn't mention you.
00:40:43 I dig you, by the way.
00:40:44 I think there's a chance that you make it back as well.
00:40:47 But when we come back, Tommy Vitor from Pod Save America.
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00:43:02 (upbeat music)
00:43:04 Tommy Vitor is co-founder of Crooked Media,
00:43:08 co-host of Pod Save America,
00:43:10 and the host of the foreign policy focus,
00:43:13 Pod Save the World.
00:43:15 He worked for President Obama for nine years,
00:43:17 including serving as the White House
00:43:19 National Security Spokesperson.
00:43:22 So Dan, last week on the On the Tape podcast,
00:43:25 featuring you and the intelligent,
00:43:28 brilliant, sexy Danny Moses,
00:43:30 we brought up the name of Tommy Vitor.
00:43:32 And I said, what's that podcast?
00:43:34 I think On the Tape, On the Save the Pod,
00:43:37 Save the World podcast.
00:43:38 I mean, what are those cats doing?
00:43:40 So I figured might as well get him in here to explain it.
00:43:43 Without further ado, Tommy Vitor, ladies and gentlemen.
00:43:46 - Guys, great to see you.
00:43:47 Dan, also great to see you.
00:43:49 - Here's the deal, Tommy.
00:43:50 You probably heard your name
00:43:51 and we really appreciate your listenership
00:43:53 of On the Tape podcast.
00:43:55 - I'm a power listener now.
00:43:56 - I know, when you were on last back in April,
00:43:59 I mentioned to you that I've been listening to you guys
00:44:01 on Pod Save the World and Pod Save America.
00:44:05 And I think where a guy got tripped up here a little bit
00:44:07 was he's like, are you guys America first?
00:44:09 He's like, what are your pod?
00:44:10 He's trying to figure out what's going on here.
00:44:13 What are you saving?
00:44:14 What is your pod saving?
00:44:15 And has anyone ever suggested
00:44:17 that you guys are an America first pod?
00:44:19 - You know, when we started the show,
00:44:21 we thought it was like a funny, ironic, stupid thing
00:44:24 to suggest that a podcast could do anything,
00:44:26 let alone save the country or the world.
00:44:28 And I think people might've forgotten
00:44:30 about the irony along the way.
00:44:32 Although when Obama came on Pod Save the World,
00:44:33 he called it Podcast the World,
00:44:35 which was a good slap down and a reminder
00:44:38 of sort of who we are and our station in life.
00:44:40 But here we are.
00:44:42 - So Tommy, I'm half Italian, half Sicilian,
00:44:44 Roman Catholic, although I will tell you
00:44:46 I'm not a hugely practicing Roman Catholic.
00:44:49 So I'm not one to quote from the Talmud,
00:44:51 but the Talmud says to save one life
00:44:55 is as if you've saved the entire world.
00:44:57 So I would submit that if you just reach one person,
00:45:01 and now I'm actually being serious,
00:45:02 if you can just reach a few people,
00:45:04 I think you've really done what you've set out to do.
00:45:06 And hopefully those people then talk to other people,
00:45:09 becomes a viral thing.
00:45:10 - Kai, I didn't expect this to be
00:45:11 sort of a spiritual journey, but I like it.
00:45:13 I also, I want you to know that I know,
00:45:15 like as a power listener, I know you like pop culture.
00:45:17 I know you like movies, music.
00:45:19 So I came prepared with some new lingo for you.
00:45:22 I want you to be able to reach
00:45:23 kind of like the Gen Zers of the world.
00:45:25 I think the sky's the limit for this show,
00:45:27 but you just got to expand.
00:45:29 - Tommy, embedded in that statement
00:45:30 is the notion that I'm somehow not reaching those people.
00:45:33 Maybe you want me to reach them at a deeper level.
00:45:36 - It's just a lingo thing.
00:45:37 It's a lingo thing.
00:45:37 A couple of words, we can get into it later,
00:45:39 but we'll talk about it later.
00:45:40 - I think Tommy's picked up on that guy
00:45:42 really touches with a specific audience.
00:45:45 It's somewhere in the boomer crowd.
00:45:47 - Oh no.
00:45:48 - Let's get into it because Tommy does Pod Save America,
00:45:50 and they're primarily focused
00:45:52 on a lot of domestic issues here.
00:45:54 And there's a whole host of stuff to talk about.
00:45:56 But last time you were on in April,
00:45:58 we're really focused on Russia's invasion of Ukraine
00:46:02 and just really some of the kind of knock-on effects
00:46:04 that we spent a lot of time talking about,
00:46:06 supply chains, inflationary pressures
00:46:08 on industrial commodities, access to food.
00:46:11 I think you guys have covered this really well.
00:46:14 Almost a quarter of the world's wheat is produced
00:46:16 in Russia and in Ukraine here.
00:46:19 So we want to follow up on some of the things
00:46:21 that are going on in Europe
00:46:23 and how you see it kind of playing out a little bit
00:46:26 and some of the things that have just passed
00:46:28 and what I think a lot of people are labeling
00:46:30 as a sort of historic.
00:46:31 I think we all agree that the inflation reduction,
00:46:35 the IRA, it's kind of maybe some misbranding here,
00:46:39 but we want to hit on that.
00:46:39 There's some really important political implications.
00:46:42 And then of course, we've been talking about this issue
00:46:45 with China and Taiwan for a while.
00:46:46 We touched on it with you in April a little bit.
00:46:48 It seems like there's definitely some things
00:46:50 have been bubbling up of late.
00:46:52 And then how all of this relates
00:46:54 into what might happen in the midterms,
00:46:56 because for us, this is really important stuff
00:46:59 as it relates to the economy, as it relates to markets
00:47:02 and the kind of gaming of it.
00:47:03 So let's just start with where we are in Ukraine,
00:47:06 at least how you see things kind of playing out.
00:47:08 I think you told us a few months ago,
00:47:10 this was not going to end anytime soon.
00:47:12 Where are you right now, Tanya, on all this?
00:47:14 - Same place.
00:47:15 I mean, it's just a slow, brutal, truly horrifying grind.
00:47:18 I mean, I saw yesterday that the US estimates
00:47:21 that Russian casualties are around 500 troops per day.
00:47:25 That's killed and wounded.
00:47:27 That's a staggering amount of people.
00:47:29 Colin Kahl, I think he's the deputy secretary of defense,
00:47:31 thinks that there's been like 20,000 deaths
00:47:33 for the Russian side.
00:47:34 5,000 of those are the Wagner group,
00:47:37 which is a group of sort of private mercenaries.
00:47:39 The Ukrainians are suffering enormous losses too.
00:47:42 The thing has been a bit of like a World War I style
00:47:44 trench warfare stalemate for a while.
00:47:46 Ukraine is now going on offense in the South.
00:47:48 They're using these HIMARS long range rocket weapons
00:47:51 that the US has given them recently to hit ammo depots,
00:47:55 air defense sites, other high value targets,
00:47:57 and they're making some progress.
00:47:59 They also hit deep into Crimea recently,
00:48:02 which was sort of a strategic game changer in a lot of ways
00:48:05 if the Russians suddenly have to defend
00:48:07 the entire Crimean Peninsula.
00:48:09 But the truth is like there's not a clear end in sight.
00:48:12 It's incredibly ugly.
00:48:13 And as you guys have talked about on the show,
00:48:15 the knock on economic effects across Europe
00:48:18 and the world are still enormous.
00:48:21 - Well, as it turns out, all quiet is not
00:48:23 on the Western front or Eastern front for that matter.
00:48:26 I read the book, believe it or not.
00:48:27 Saw the movie too for that matter.
00:48:29 But it's all quiet here because it's now,
00:48:31 you know what, we don't seem to talk about it
00:48:33 here in the United States anymore.
00:48:34 It was 24/7 for that period of time,
00:48:36 rightly so by the way.
00:48:38 Now we've moved on to other things.
00:48:39 That's problematic to your point
00:48:41 because things have gotten worse there.
00:48:43 And one of the things I've said, Tom,
00:48:44 and I absolutely believe this,
00:48:46 forget what you think about Putin,
00:48:47 my sense is this whole thing with Ukraine
00:48:50 on top of trying to reunify the Soviet Union
00:48:53 or the Russian Empire, whatever the hell it is,
00:48:56 is to control the commodities market
00:48:58 in the form of Ukraine, which as Dan just said,
00:49:00 is the fourth largest commodity nation on the planet.
00:49:03 - Yeah, no, look, the knock on effects
00:49:05 in terms of people starving all over the world,
00:49:08 mostly in poor countries, a lot of them in Africa,
00:49:10 is just beginning to be felt.
00:49:12 I mean, the Russians allowed a couple of ships'
00:49:15 worth of grain out of Odessa, the port in Ukraine recently.
00:49:18 That's not gonna begin to fill the gap
00:49:21 that is gonna be created by constant warfare.
00:49:24 I mean, you can't farm in the midst of constant warfare.
00:49:26 And then there's the natural gas piece of this.
00:49:28 I mean, I saw this morning a company called Uniper,
00:49:31 which is Germany's largest importer of natural gas,
00:49:34 reported a loss today of more than $12.2 billion
00:49:38 for the first half of the year
00:49:40 because they were dwindling supplies
00:49:42 from Russia of natural gas,
00:49:43 and they had to seek more expensive gas on the open market.
00:49:46 I mean, Germany's, we could be in a situation
00:49:49 where people are rationing gas in their homes
00:49:51 and entire industries collapse
00:49:53 because German, it's like a heavy industrial nation.
00:49:57 They do aluminum, chemicals.
00:50:00 These are huge industries,
00:50:01 and they're incredibly energy intensive.
00:50:03 And I think the Germans get like 35, 40%
00:50:05 of their gas from Russia.
00:50:07 And so, I mean, it's gonna get worse
00:50:09 as we go into the winter.
00:50:10 - So the other point you said,
00:50:11 that diplomatically there's been no progress made,
00:50:13 and you just mentioned the fact that Crimea,
00:50:16 ammunition's depot, and then a strike
00:50:18 on what looked like nine jets, Russian jets.
00:50:21 And I heard you guys on Pod Save the World,
00:50:23 you and Ben, I think on the episode
00:50:25 that dropped on Wednesday here,
00:50:28 is that this really opens up,
00:50:29 Guy was just talking about fronts.
00:50:31 It really opens up a new front.
00:50:33 It almost is a sort of messaging in a way.
00:50:35 And you said that Zelensky in a comment this week
00:50:39 suggested that they will not cede until they retake Crimea.
00:50:44 And so again, I think all of us would love
00:50:46 to see some sort of diplomatic solution,
00:50:48 but is it really opening the door
00:50:50 for a much longer protracted fight
00:50:52 if the Ukrainians are just not willing
00:50:54 to kind of cede anything here?
00:50:57 And the success in which they've had
00:50:59 in some of these occupied territories,
00:51:01 does it just kind of mean that they are digging in here?
00:51:04 - Yeah, I mean, I think the challenge
00:51:05 for Zelensky is twofold.
00:51:06 I mean, one, the more we learn about the Russian treatment
00:51:10 of civilians in these occupied areas,
00:51:12 the more horrifying it is,
00:51:13 the more it starts to feel like echoes of World War II,
00:51:16 indiscriminate torture, slaughter of individuals,
00:51:19 children being shipped over the border from Ukraine
00:51:22 and forced to emigrate into Russia.
00:51:24 I mean, sort of the worst things you could possibly imagine.
00:51:27 So if you're Zelensky,
00:51:28 I don't know how you can talk to a population
00:51:31 that's seeing this,
00:51:32 that knows people that are experienced this
00:51:34 and suggest that you're willing to give up
00:51:36 any amount of Ukrainian territory,
00:51:38 whether it's Eastern provinces
00:51:40 where there's been an ongoing war since 2014
00:51:43 or Crimea where the Russians moved in
00:51:45 and basically took it over without firing a shot
00:51:47 and have frankly like more, legitimate's the wrong word,
00:51:50 but kind of like defendable historic claims
00:51:54 or ties to the territory.
00:51:56 So it's not clear if Zelensky's setting up a negotiation
00:51:59 and he's anchoring his initial offer as a maximalist one,
00:52:04 but if we take him literally,
00:52:06 it doesn't speak to an easy outcome
00:52:10 that any of us can see here.
00:52:11 - This is just my opinion.
00:52:12 We should, we, United States, should be doing all we can
00:52:17 because it's the right thing to do, full stop.
00:52:19 I mean, it begins and ends there, okay?
00:52:22 So let's get that out there.
00:52:23 We should also be doing everything we can
00:52:26 because economically, if we don't,
00:52:28 this could potentially be a disaster for Europe,
00:52:31 which it's becoming,
00:52:32 and then subsequently a disaster here.
00:52:35 Unfortunately, it seems as though,
00:52:37 and I don't follow this as closely as I probably should,
00:52:40 this comes down right on party lines right now.
00:52:43 You put on Tucker's show and Zelensky's a corrupt guy
00:52:47 and what are we doing there?
00:52:48 And then the flip side of the coin,
00:52:49 we should be doing everything we possibly can to help.
00:52:51 I mean, it's probably a pretty obvious question.
00:52:53 Why has it become so polarized
00:52:55 and such a political hot button topic?
00:52:57 - I think it's a little more complicated than that guy.
00:53:00 You're right that the Tucker Carlsons of the world,
00:53:02 the Rand Pauls of the world are a lot more isolationist
00:53:06 and they're thinking like,
00:53:07 their comments are basically,
00:53:08 we shouldn't be interfering in any of these wars anywhere.
00:53:11 I do think if you look at the comments and actions
00:53:13 by Mitch McConnell or a broader sort of subset
00:53:16 of Republican senators,
00:53:18 there is a lot of bipartisan alignment.
00:53:20 I mean, I forget the exact number,
00:53:22 but they passed a bill months and months ago
00:53:24 that authorized like $40 billion in aid to Ukraine.
00:53:28 And so they're beginning to draw that down.
00:53:30 So they did set this thing up for the long-term.
00:53:32 And I agree with you.
00:53:33 I mean, I think there's a long sort of like TikTok
00:53:36 that's a nerd speak for a backstory story
00:53:38 in the Washington Post yesterday
00:53:41 that talked about how from sort of October of last year
00:53:43 to today, how the US learned about this intelligence,
00:53:46 efforts to prevent the war, negotiations.
00:53:49 And it talks about how Macron and the French
00:53:52 kept trying to broker some sort of peace talks
00:53:54 with the Russians and they thought they were making progress
00:53:57 and Putin just lied to them.
00:53:58 So I'm with you in that,
00:54:00 I don't think Putin backs down from this.
00:54:02 I think he probably views it as existential
00:54:03 for the country and for himself.
00:54:05 And that there's a credible argument to be made
00:54:08 that the way to end the war fastest
00:54:10 is to help the Ukrainians win it,
00:54:12 because I'm not sure that Putin's going anywhere.
00:54:15 - Fair enough.
00:54:16 So let me rephrase then.
00:54:17 I agree with you maybe in terms of politically,
00:54:20 in terms of our representatives,
00:54:22 it's become bipartisan, which is a good thing.
00:54:25 I will tell you for the man and woman on the street,
00:54:28 it comes right down on party lines.
00:54:30 And that to me is problematic
00:54:32 because it speaks to a bigger problem in this country,
00:54:35 which we'll probably get into.
00:54:37 I mean, everything now is you're either
00:54:40 on the right side of things or on your left side of things.
00:54:42 And people that don't believe in this are pissed off.
00:54:45 And there are other people that are pissed off
00:54:47 that we're not doing enough.
00:54:48 - Yeah, that's fair.
00:54:49 And listen, I think people are right to wonder why
00:54:51 after 20 years of fighting in Afghanistan that just ended,
00:54:55 after a disastrous war in Iraq,
00:54:57 all sorts of other conflicts that,
00:54:58 my former boss was part of, Barack Obama,
00:55:01 why we would be so heavily engaged in another war.
00:55:04 I do think you have to continually message why this matters.
00:55:07 - The irony of all of this is that
00:55:08 there's another geopolitical hotspot
00:55:10 that we've talked about in the past.
00:55:12 And that's the situation with China and Taiwan.
00:55:15 And one of the reasons why this has kind of flared up
00:55:17 because some of those same people
00:55:19 on a certain side of the aisle
00:55:21 who oppose involvement in Ukraine
00:55:24 are over there going to Taiwan
00:55:26 and doing bipartisan trips there.
00:55:28 They know that it's gonna aggravate the Chinese.
00:55:30 And so I do think it's interesting
00:55:32 in the last few days or so
00:55:33 that the Chinese are sending soldiers to Russia
00:55:37 to do joint exercises.
00:55:39 This is at a time where Chinese military
00:55:42 are running exercises in, around, and over Taiwan.
00:55:45 So Tommy, how have you come to think about this issue
00:55:48 here a little bit?
00:55:49 Because again, it's a very complicated political thing.
00:55:51 It goes back decades,
00:55:53 multiple presidencies and administrations,
00:55:56 and there's really no clear cut answer to it
00:55:58 other than the fact that I think our tensions
00:56:00 are probably never been higher with China
00:56:03 and our support for a democratic part
00:56:06 of something that China thinks is theirs
00:56:08 is really likely to kind of have repercussions
00:56:12 from potentially militarily,
00:56:14 but obviously economically at a time
00:56:16 where the global supply chain is fairly strained.
00:56:19 So thoughts there about what's going on in China
00:56:21 and how likely are we to see some sort of dust up in 2022?
00:56:26 - I think a lot of smart people,
00:56:28 analysts that understand this stuff better than I do
00:56:30 think it's sort of not a question of if,
00:56:32 but when the Chinese Communist Party
00:56:34 tries to quote unquote reunify with Taiwan,
00:56:37 in other words, invade.
00:56:39 Xi Jinping is definitely someone
00:56:41 who sees himself in historic terms.
00:56:44 I think it was 2017, the Chinese Communist Party
00:56:47 literally enshrined his words into the party's constitution,
00:56:52 which means like, you cannot, you will not question Xi.
00:56:54 It kind of elevates him to the level of Chairman Mao
00:56:58 and Deng Xiaoping, right?
00:57:00 Mao was the founder of the Chinese Communist Party.
00:57:02 Deng was the guy who modernized the country
00:57:05 and made them rich.
00:57:06 That's the company he sees himself in.
00:57:08 Great question on, I don't know that this is a 2022 problem
00:57:12 or even a 2023 problem.
00:57:14 Again, I'm literally guessing,
00:57:16 but the Pelosi reaction was instructive.
00:57:19 Like they ran days and days and days
00:57:21 of large-scale military exercises.
00:57:24 Ed Markey, the Senator from Massachusetts
00:57:26 just led a delegation.
00:57:27 The reaction was lower key,
00:57:30 probably because he's not third in the line
00:57:32 to the presidency.
00:57:33 He's maybe less of a critic.
00:57:34 I don't think his trip was public in advance,
00:57:37 but it's certainly alarming.
00:57:38 It's alarming for the people of Taiwan.
00:57:40 The United States is required by law
00:57:43 to provide military support to Taiwan
00:57:46 so that they can defend themselves.
00:57:48 It's a constant debate about how much support that entails,
00:57:52 how advanced, how sophisticated it.
00:57:53 But you guys have talked many times
00:57:55 about the economic stakes here
00:57:57 when it comes to semiconductors, et cetera.
00:57:59 - I think it's a story for sure.
00:58:00 I hope you're right that it's not a story this year
00:58:02 or next year.
00:58:03 I just think things move much quicker in today's world.
00:58:07 And look, in terms of what's going on domestically,
00:58:10 I do think, and this is not a political comment,
00:58:12 I'm just trying to be down the middle on this one.
00:58:14 I think the Biden administration has a lot of wins here.
00:58:16 I think they do a shitty job of messaging,
00:58:18 but that's probably for another conversation
00:58:21 unless you want to address it.
00:58:22 But what I'll say is, as we get closer to the midterms,
00:58:25 which by the way, you're gonna wake up one morning
00:58:27 and it's gonna be right here,
00:58:28 inflation's still a problem.
00:58:30 And that seems to be the one thing
00:58:32 that everybody is harping on.
00:58:34 Dan mentioned this Inflation Reduction Act,
00:58:37 which is one of the worst named things
00:58:38 in the history of mankind.
00:58:40 But again, I don't make those decisions.
00:58:42 Now, what are your thoughts here?
00:58:43 I mean, it seems as though they've stemmed the tide,
00:58:46 them being the Biden administration
00:58:47 in terms of their approval ratings and stuff,
00:58:50 but it's still not going particularly well,
00:58:52 at least on the public sentiment side.
00:58:55 - Yeah, I do think the approval rating
00:58:57 is gonna be a lagging indicator here.
00:58:59 Got your earlier point about bipartisanship.
00:59:01 It's interesting and I think also unfortunate
00:59:04 that the only way we can pass
00:59:06 these kinds of industrial policies,
00:59:08 these American renewal policies,
00:59:10 is when you frame it as competition with China.
00:59:12 I don't know that that's a good thing.
00:59:14 Like I'm glad the CHIPS Act passed.
00:59:15 I think there's probably some real fair critiques of it
00:59:19 as kind of like corporate welfare
00:59:20 and encouraging companies to do things
00:59:21 they might do otherwise investment-wise.
00:59:24 But it's a bit of a bummer that like jingoism
00:59:26 is what gets to bipartisanship.
00:59:28 But again, that's another story.
00:59:30 I do think Biden has racked up
00:59:31 some really impressive successes.
00:59:34 The CHIPS Act is one, the infrastructure bill.
00:59:37 I don't think your people are gonna be excited about it
00:59:39 on the campaign trail, but it's a significant investment.
00:59:41 The Zwaharie strike, the IRA.
00:59:45 I hear why you guys think it was unfortunately named.
00:59:48 I do think there's real value for like a Joe Manchin
00:59:50 or other moderate Democrats to run around the country
00:59:54 and say, "We just passed the Inflation Reduction Act."
00:59:56 That value gets turned on its head
00:59:59 if inflation is not reduced, right?
01:00:01 Although say, "Hey, you promised us
01:00:02 this was all gonna be fixed and it hasn't happened."
01:00:05 But the truth about the IRA is like,
01:00:07 this is a bill whose impact will not be felt for years
01:00:11 kind of by design.
01:00:13 - Obviously you're very close to politics,
01:00:14 but now since leaving the White House years ago,
01:00:17 you're a media guy here and messaging is really important.
01:00:19 You also spent a lot of time thinking about campaigns
01:00:22 and how to successfully get messages across.
01:00:25 So it's easy for us to cherry pick a name of something
01:00:28 that we think is kind of silly or whatever.
01:00:30 But all that being said, when you think about 2022
01:00:33 and where we are here, and as we barrel into the midterms,
01:00:36 we know that there's obviously some very important primaries
01:00:40 that have gone on just this week alone.
01:00:42 Obviously the one in Wyoming is not that important,
01:00:44 but it's interesting to kind of see
01:00:45 where the Republican base is on a lot of these topics.
01:00:49 And if you think about 2022 is like,
01:00:51 okay, Biden was limping into this year.
01:00:54 I think that we were still, I think,
01:00:56 bipartisan reeling from the pullout of Afghanistan.
01:01:00 Record low approval rating.
01:01:02 The economy seemed to like all of a sudden hit the skids
01:01:05 when interest rates started going higher.
01:01:07 We had this geopolitical mess where right out of the gate,
01:01:10 I don't think we were as emphatic
01:01:12 as we ended up being in support of Ukraine.
01:01:15 We had a stock market that was careening lower.
01:01:17 Inflation, as Guy said, was on everybody's radar.
01:01:21 Are we starting to come out of this here?
01:01:23 The stock market's up, what, 15, 16% or so from the lows.
01:01:27 We're starting to see inflation come down.
01:01:30 Guy's point about Ukraine not being on the front page
01:01:33 is probably not a horrible thing politically.
01:01:35 If the situation with China cools out a little bit,
01:01:39 might we see a different political environment
01:01:42 than a lot of us thought we were?
01:01:43 And the last point I'll just make
01:01:45 without debating what the Supreme Court did with Roe here,
01:01:49 you guys have done a great job
01:01:51 documenting the political implications.
01:01:53 If you look at that Kansas referendum,
01:01:55 red state Kansas on this,
01:01:57 you guys made the point 100,000 independent voters
01:02:01 who could not vote in the primaries were activated
01:02:04 and came out to vote on this referendum on Roe
01:02:07 or on abortion rights in general.
01:02:09 What does this all mean, the political calculus,
01:02:11 as we head into now, we are what,
01:02:13 two months away from the midterms?
01:02:15 - Dan, sometimes I need to like slap myself
01:02:18 and remind myself that I'm a nerd
01:02:20 that pays attention to politics all day, every day.
01:02:23 And that makes me like a space alien for most other people
01:02:27 who don't give a shit.
01:02:29 I hope I can say that.
01:02:30 So I think that sometimes it's better to be lucky than smart
01:02:34 and the fact that gas prices are cratering
01:02:37 is an enormously important thing
01:02:39 for the Biden administration.
01:02:40 I do think a lot of the anxiety people were feeling,
01:02:44 the right track, wrong track numbers,
01:02:45 the hits to his approval can be tied directly
01:02:48 to people literally seeing $5 gas
01:02:50 every time they drive by it.
01:02:51 And it wasn't just like mainstream media coverage.
01:02:54 Like I'm not a big TikToker,
01:02:56 but like there was constant coverage
01:02:58 or jokes about gas prices on TikTok and on Instagram.
01:03:01 Right, I think people were talking about all the time.
01:03:04 And the fact that basically the Chinese economy
01:03:07 is cratering is leading to reduction in gas prices
01:03:10 is gonna benefit Biden enormously.
01:03:12 I do think though, in terms of like policy choices,
01:03:15 messaging choices, the thing you're gonna see the most
01:03:18 is talking about abortion.
01:03:21 It's currently the focus of most midterm television ads.
01:03:24 I think the New York Times had a piece the other day
01:03:26 that said Democrats have spent $31.9 million
01:03:30 in ads on ads about abortion.
01:03:33 I think that is beneficial
01:03:35 because it's something a lot of people care about.
01:03:38 You can message it in a way that is basically where you say,
01:03:42 Republicans want the government
01:03:44 to dictate your own personal medical decisions.
01:03:47 Remember how annoying masking was?
01:03:49 This is like that, right?
01:03:50 And that reaches people who might be personally
01:03:52 anti-abortion, but are more libertarian in nature.
01:03:55 And I think that's what you saw happen in Kansas.
01:03:57 So I think this will be the Democratic Party's focus.
01:03:59 We'll see if it works.
01:04:00 We'll see if messages about Joe Biden is too old,
01:04:04 inflation is too high, gas prices too high,
01:04:06 maybe that will swamp these abortion ads,
01:04:08 but time will tell.
01:04:10 - The reason we ask these questions,
01:04:11 I know you know this in terms of politics and those things,
01:04:14 because if, and obviously this seems to be,
01:04:16 it was a bigger if a month ago.
01:04:18 I think it's a lesser of an if now,
01:04:20 but if let's just say the Democrats are somehow able
01:04:23 to hold serve in the midterms,
01:04:26 obviously that opens potentially the gates
01:04:29 for more fiscal stimulus and things that are gonna affect,
01:04:33 obviously the economy and subsequently the stock market.
01:04:36 So you understand the questions.
01:04:37 I guess my pushback is, what does it look like right now?
01:04:40 I mean, again, you watch Fox News
01:04:43 and they'll tell you there's a red wave coming in the fall,
01:04:46 and then you go the other way and it says,
01:04:47 you know what, it looks like we might be able
01:04:49 to get through this somewhat unscathed.
01:04:51 What are your thoughts on that?
01:04:52 - I think you're right.
01:04:53 The grounds have been shifting beneath our feet
01:04:55 the last few weeks.
01:04:56 Biden's approval is terrible.
01:04:57 His approval rating has been low for a very long time.
01:04:59 No one can spin that.
01:05:00 And I think, but if that ticks up a few points,
01:05:02 I think that can help a lot, just sort of like the mood music.
01:05:05 Same with the right track, wrong track.
01:05:06 Those numbers have been terrible for a very long time.
01:05:08 If that ticks up a little bit,
01:05:09 I think that can help all Democrats running in the country.
01:05:12 The thing that's really interesting is
01:05:14 Republicans have nominated some terrible Senate candidates.
01:05:18 Like Dr. Oz is a weirdo.
01:05:21 Yesterday, he got asked how many houses he owns.
01:05:23 He said two, the answer is 10.
01:05:25 - Oh, 210.
01:05:26 - The 210 split, that's not a very good answer.
01:05:30 John McCain actually faced a similar question
01:05:32 in the 2008 campaign, and we ran ads against it for months,
01:05:35 just 'cause you're like, he's out of touch.
01:05:37 There was a video of him going grocery shopping.
01:05:40 - I don't even know what crudité is.
01:05:41 I mean, that was the most ridiculous thing
01:05:43 I've ever seen in my life.
01:05:44 - Guy, this wasn't a video
01:05:46 that some oppo research person put out.
01:05:49 This is a video his campaign filmed and released, right?
01:05:52 And like John Fetterman is running a great campaign.
01:05:55 We got exciting candidates in Wisconsin.
01:05:57 Mark Kelly is a strong candidate in Arizona.
01:06:00 So like- - Look at Georgia though.
01:06:01 I mean, I don't know what goes on in Georgia.
01:06:03 I really have no idea.
01:06:04 I mean, MTG, I watched those.
01:06:07 My wife thinks I'm obsessed with her.
01:06:09 I think I might be.
01:06:10 For the life of me, I can't understand how she was elect.
01:06:14 I mean, forget it.
01:06:15 She shouldn't be a dog catcher in the state of Georgia,
01:06:18 let alone a representative.
01:06:19 And to me, it's frightening.
01:06:21 But Herschel Walker, who was a great football,
01:06:24 probably the greatest college football players of all time,
01:06:26 just again, just watching things.
01:06:28 I mean, he is not equipped to be in the Senate
01:06:30 or the Congress, just my opinion.
01:06:32 But yet there's a good chance that he gets through.
01:06:34 - Yeah, it's tough.
01:06:35 Look, I mean, Marjorie Taylor Greene,
01:06:37 there's one answer that explains her political existence
01:06:40 and it's gerrymandering.
01:06:41 When you have a bright red district
01:06:44 or a bright blue district,
01:06:45 you can get some wacky people in there
01:06:47 and she's kind of like the MAGA flavor of the month.
01:06:49 And it is what it is.
01:06:50 And like, I think everyone thinks she's a joke,
01:06:52 but she's a pain in the ass
01:06:53 and is someone we have to deal with
01:06:54 and can be actually damaging.
01:06:55 Herschel Walker is trying to run statewide.
01:06:57 And it's an interesting year in Georgia
01:06:59 because you have a real deal race at the top.
01:07:01 You have Stacey Abrams versus Brian Kemp.
01:07:03 We're both incredibly strong candidates
01:07:05 and that's gonna be a really tough race.
01:07:06 Then you have Senator Raphael Warnock versus Herschel Walker
01:07:10 and Warnock has proven to be a strong candidate.
01:07:12 He's got a bit of a record now in the Senate
01:07:14 'cause he's been there for a couple of years.
01:07:15 He's gonna run on his bio
01:07:16 and the things he's gonna do for the fight for the state.
01:07:19 But his message,
01:07:20 the message that the Warnock people are gonna go with
01:07:22 basically is exactly what you said,
01:07:25 that Herschel Walker is not up to the job.
01:07:27 And there have been brutal ads
01:07:29 that talk about previous spousal abuse,
01:07:31 including pointing a gun at his ex-wife.
01:07:33 I mean, that is frightening.
01:07:35 The guy lied about being an FBI agent,
01:07:37 which is really weird.
01:07:39 Although maybe, you know, I joked about the city,
01:07:40 like he kind of might've dodged a bullet there
01:07:42 because the FBI is not very popular
01:07:43 in the Republican Party right now.
01:07:45 There's the crazy thing he said about climate change.
01:07:47 He compared himself to Jesus
01:07:49 because he had disassociative disorder.
01:07:52 But Jesus did too, because he's like the Holy Spirit.
01:07:54 I was like, it's the craziest stuff you've ever heard.
01:07:57 - Okay, so I agree with all of that.
01:07:59 When they pulled that video a month and a half
01:08:01 before the 2016 presidential election
01:08:04 of Donald Trump talking, whatever that entertainment,
01:08:07 I forget his name,
01:08:08 about all the things we've heard a thousand times,
01:08:12 that should have been it.
01:08:13 That should have been game over.
01:08:15 I actually think that helped him win the election.
01:08:18 I know that's perverse,
01:08:20 but I mean, these things might work
01:08:21 to Herschel Walker's favor
01:08:22 in the world we currently live in.
01:08:24 - They might.
01:08:25 I think that Donald Trump, as much as I dislike him,
01:08:27 as much as Dan disliked him,
01:08:29 is incredibly talented politician.
01:08:32 He can be funny, he can be charming, he can hold a crowd,
01:08:35 he can have a rapt audience.
01:08:38 He doesn't care about the kind of sacred cows in Washington.
01:08:42 He could run as an outsider.
01:08:44 Those are powerful, powerful things.
01:08:46 And he was tireless on the stump.
01:08:48 He's given hour and a half long speeches
01:08:49 like four times a day.
01:08:51 Herschel Walker has not shown that level of acumen yet.
01:08:55 He might, he could still win.
01:08:56 It would be very bad.
01:08:57 - Yeah, it's funny, we spent some time talking about
01:09:00 some kind of whack job candidates running against
01:09:03 some people like Warnock.
01:09:04 The guy has already proved himself
01:09:06 in a very short time in the Senate,
01:09:08 and he's a guy of great character,
01:09:09 and he's the sort of candidate, I think,
01:09:11 no matter whether you're a red, blue, or purple state,
01:09:13 which is really what I think a lot of people
01:09:15 think Georgia has turned into.
01:09:17 But then when you think that that same state
01:09:19 has people like Marjorie Taylor Greene representing them,
01:09:22 and possibly a Herschel Walker, it's just insane.
01:09:25 And then take it all the way back.
01:09:26 You just mentioned Mark Kelly.
01:09:28 Here's a great candidate, he's a former astronaut,
01:09:30 and he's in the Senate.
01:09:31 Guy is running against him, Blake Masters,
01:09:34 and you and I, Tommy, were talking about this last week.
01:09:36 Go read this article, "The Violent Fantasies."
01:09:40 It was an op-ed, actually, in the New York Times.
01:09:41 "The Violent Fantasies of Blake Masters."
01:09:43 This is a guy who worked for Peter Thiel for a long time,
01:09:46 funded by Peter Thiel.
01:09:48 He's smart.
01:09:49 This guy's smart.
01:09:50 And I almost think that I'd much rather have guys
01:09:53 like Herschel Walker scratch that itch
01:09:55 for some of these far-right sort of people
01:09:57 than a Blake Masters,
01:09:58 because Blake Masters seems dangerous to me.
01:10:01 So talk to me a little bit about that,
01:10:02 because you do have this barbell situation
01:10:05 in the Republican challengers here.
01:10:07 - Yeah, I mean, Blake Masters is a real weirdo,
01:10:09 like Peter Thiel, acolyte, far-right, scary dude.
01:10:13 He is smart.
01:10:14 He's trying to tack back to the center now,
01:10:15 as every candidate does always in the general election.
01:10:19 I think it'll be a big turnout election.
01:10:20 The thing I think Democrats screwed up in 2016
01:10:24 is they were like, "Look at this quote
01:10:25 or video from Donald Trump.
01:10:26 Look how bad he is.
01:10:27 Look how offensive he is," and kind of left it there.
01:10:30 I think the thing we have to do is be like,
01:10:32 "Look at Dr. Oz.
01:10:33 Look at what a weirdo he is.
01:10:35 And you know what that means?
01:10:36 That he doesn't care about you.
01:10:37 He doesn't care about inflation.
01:10:38 He doesn't care about prescription drug costs."
01:10:41 Making the turn that explains why
01:10:43 he's not a good representative for you.
01:10:45 That's the kind of thing we need to do in Arizona,
01:10:47 because I don't think anyone knows who Peter Thiel is.
01:10:50 No one cares except for nerds like us.
01:10:52 But they need to make the case
01:10:53 that this guy is not gonna actually fight for them,
01:10:55 but Mark Kelly will.
01:10:56 And look, it's gonna be a tough race.
01:10:58 It really is.
01:10:59 - What did you call yourself?
01:11:00 A super listener or the Uber listener of On the Tape?
01:11:03 - Power listener.
01:11:04 - Power.
01:11:05 I like that, power listener.
01:11:06 - I listen enough to know that you guys
01:11:08 dump all the different shows on the same feed,
01:11:10 but they all come to me, so that's helpful.
01:11:12 I don't have to subscribe to Mark McCall and On the Tape.
01:11:15 I get 'em all.
01:11:16 - So you don't have to go to your favorite podcast store
01:11:18 like Dan tells me all the time?
01:11:19 - Yeah.
01:11:20 - You know what we think of what you do in your arena.
01:11:23 You're second to none.
01:11:24 How do you, and this is a self-serving question
01:11:26 if there ever was one, but in terms of markets and stuff,
01:11:29 are we speaking the language?
01:11:30 Do we make it accessible?
01:11:33 - Yes, the reason I like the show, I started listening.
01:11:35 I was like, okay, I'm gonna do some of the things
01:11:37 that these guys recommend.
01:11:38 So then you have a little bit of skin in the game.
01:11:40 There's a casino element, right?
01:11:41 There's a sports gambling element.
01:11:43 You're watching the markets
01:11:44 and you kind of are invested, literally.
01:11:46 But I also was watching because I thought
01:11:48 it could have a huge impact on sort of general sentiment
01:11:51 about how people feel about the economy
01:11:54 and what that meant for Biden.
01:11:55 And I was pretty worried about it in June.
01:11:57 So I was sort of listening to you guys contextualize it.
01:11:59 I think you do a great job.
01:12:01 I had to yell at Dan the other day
01:12:03 because someone was talking about like high volume Delta.
01:12:06 And I was like, hey man, I didn't go to business school.
01:12:09 I don't know what the hell these super genius people
01:12:12 you're talking to are talking about.
01:12:14 So I was like, dumb it down for the dummies.
01:12:16 But also, guy, I want you to get on TikTok
01:12:18 and reach that generation.
01:12:19 So I just think we need to work in a couple of things.
01:12:21 Like I want to hear you say EY from SoFi,
01:12:24 you know I don't simp for Elon Musk.
01:12:27 You know what I mean?
01:12:28 Like talk to the kids.
01:12:29 - Slow that down.
01:12:30 I'm going to try that, okay?
01:12:31 You ready?
01:12:32 I'm going to- - Simp.
01:12:33 I used it in a sentence.
01:12:34 - Simp.
01:12:35 EY from SoFi, you know I don't simp for the Musk.
01:12:40 - There you go.
01:12:41 That's a good one. - Oh man.
01:12:42 - This is a 41 year old telling a slightly older gentleman
01:12:44 how to talk to the kids.
01:12:45 So take this advice with a grain of salt.
01:12:47 You know, maybe you work in like a no cap,
01:12:49 if you want to signal that whatever you just said was honest.
01:12:51 I'm just trying to give you the lingo
01:12:53 that I know Amanda wants you to use.
01:12:56 - What does that mean?
01:12:57 Help me with that no cap.
01:12:58 What does that help me with that?
01:12:59 - It means like kind of what you said previously was honest,
01:13:02 that you meant it sincerely.
01:13:04 - Yeah.
01:13:05 You know, Tommy, I love you, man.
01:13:06 No cap.
01:13:07 - Dan, if he really says this, that's going to be bad.
01:13:10 - Oh, he will.
01:13:11 Oh, I will say it.
01:13:11 You know, we sit in the green room
01:13:13 right before we're going on Fast Money
01:13:15 and we'll be having some just cockamamie conversation
01:13:18 and Guy Adami will be like, oh, I'm going to work that in.
01:13:20 He'll work that word into the show, like during the thing.
01:13:23 So here's one thing, Tommy,
01:13:24 that I don't think Guy really appreciates.
01:13:27 Our mutual friend, Steve Hunsberger,
01:13:29 who I think is a great political mind,
01:13:31 also a market mind who introduced us.
01:13:34 He knows I've been a big fan, but Guy, you have no idea.
01:13:38 Tommy, John Lovett, John Favreau, Dan Pfeiffer, Ben Rhodes,
01:13:42 these guys that he pods with, okay,
01:13:44 they are literally rock stars.
01:13:46 I saw them to a sold out crowd at the Beacon Theater.
01:13:50 Now, back in the '70s,
01:13:52 you were probably seeing the Allmans in the Beacon,
01:13:53 you were probably doing your thing or whatever.
01:13:55 These guys go out there,
01:13:57 they get huge applause for what they do
01:14:00 in front of big crowds.
01:14:01 Now, where were you guys, Tommy?
01:14:02 In Nashville, you guys were at the Grand Ole Opry
01:14:04 with former Vice President Al Gore this past weekend.
01:14:08 I mean, talk to us about that vibe.
01:14:10 - It confuses me.
01:14:13 I remember we started the pod 2017,
01:14:16 'cause we all felt guilty
01:14:17 about not being a part of the last election.
01:14:18 We lost, all our friends were like,
01:14:20 "What do I do now?
01:14:21 "How do I fix this?"
01:14:22 And the answer is, you don't, there's no easy fix, right?
01:14:26 Democracy and citizenship is a everyday
01:14:28 kind of baby steps process.
01:14:31 And we wanted to try to address
01:14:33 what we thought was bad reporting
01:14:35 and be a little more entertaining and substantive,
01:14:37 and then help people figure out
01:14:38 what they can do in their real life.
01:14:40 At some point along the way, someone said to us,
01:14:41 "Why don't you guys do live shows?"
01:14:43 And we're like, "Who the hell
01:14:44 "is ever gonna come to that crap?"
01:14:46 And somehow, for some reason, they do,
01:14:48 and so I'm very grateful.
01:14:49 I'll tell you, though,
01:14:50 the Nashville show is one of my favorite,
01:14:52 and Al Gore was like fun and funny
01:14:55 and goofing around and making jokes about himself.
01:14:58 And we made like seven 2000 election jokes.
01:15:02 At the end, we played a game with him.
01:15:03 At the end, Levitt told him,
01:15:05 "Mr. Vice President, you actually got more votes,
01:15:07 "but you lost," and he laughed at that.
01:15:10 - I heard it.
01:15:11 - He's a great sport, man,
01:15:12 and I felt bad last week on our pod.
01:15:14 We made a joke about Al Gore,
01:15:15 but he really stood in there and took those body blows,
01:15:18 and he was a great voice,
01:15:19 and I think your conversation on climate change
01:15:22 and how he's been involved in that fight for decades now
01:15:25 was really impressive,
01:15:27 and I think your coverage of the IRA
01:15:29 and what it means and the significance of it,
01:15:31 and your old boss going on the Twitter yesterday
01:15:34 calling it a BFD.
01:15:36 I mean, that was kind of cool, too, huh?
01:15:38 So guys should not use BFD on the pod?
01:15:40 - That's fine.
01:15:41 It's just sort of like an inside joke
01:15:43 to a bunch of inside joke recipients.
01:15:44 I do think the IRA is a big thing.
01:15:46 I mean, just for listeners,
01:15:47 it's like $370 billion in clean energy.
01:15:50 It increases healthcare spending by almost $100 billion,
01:15:52 so a bunch of people who got more subsidies
01:15:55 from the Affordable Care Act
01:15:57 don't see their premiums go way up.
01:15:59 I don't know what you guys think
01:16:00 about this corporate minimum tax,
01:16:01 but 15% doesn't seem high to me,
01:16:04 nor does a 1% excise tax on buybacks.
01:16:06 Just dividend it out or invest in human beings.
01:16:09 How about that?
01:16:10 And then the fact that our own government
01:16:12 didn't let Medicare directly negotiate
01:16:15 prescription drug prices with pharmaceutical companies
01:16:18 is one of the dumbest things
01:16:20 in the history of this government,
01:16:22 and I think fixing that problem
01:16:24 is gonna save nearly 300 billion over 10 years.
01:16:27 And so Republicans are focused on this IRS piece.
01:16:30 They're claiming that 87,000 new IRS agents
01:16:34 are gonna be kicking down your door.
01:16:35 That's not true.
01:16:36 The IRS thinks they can hire 87,000 employees
01:16:39 by 2031.
01:16:40 Most of them will be replacements for workers who retire.
01:16:43 Half of that money goes to enforcement.
01:16:45 The rest is gonna be like IT support
01:16:48 and people who take your phone call
01:16:49 when you try to figure out what's going on.
01:16:51 So I think you guys underestimated in the past
01:16:55 the amount of revenue that could come in from this.
01:16:57 Again, I'm literally just regurgitating
01:16:59 what Larry Summers thinks,
01:17:00 but he's been right on a lot of stuff,
01:17:01 and he thinks that this will bring in a ton of cash.
01:17:03 So I don't know, maybe it'll reduce the deficit.
01:17:06 That seems good.
01:17:07 - Well, Laura Ingram, if you're listening,
01:17:08 you heard it here from Tommy Vitor.
01:17:10 And watch what I do here.
01:17:12 Tommy Vitor, the quintessential,
01:17:15 the pride of Kenyon College, no cap.
01:17:18 I'll simp for you any day.
01:17:20 (laughing)
01:17:22 - I'm so sorry, Dan.
01:17:23 I'm so sorry.
01:17:24 - I know, man.
01:17:25 Well, listen, we appreciate you jumping on
01:17:27 and making us smarter about all of this stuff,
01:17:30 and we appreciate your support,
01:17:31 and we love what you guys do.
01:17:33 So we hope you'll come back soon, man.
01:17:34 Thank you.
01:17:35 - Thanks for having me.
01:17:36 I won't be able to listen to this one
01:17:37 'cause I can't hear myself talk,
01:17:39 but excited for the next episode.
01:17:41 - Thanks once again to CME Group and iConnections
01:17:45 for sponsoring this episode of On the Tape.
01:17:48 If you like what you heard,
01:17:49 make sure you hit follow and leave us a review.
01:17:52 It helps people find our show,
01:17:53 and we love hearing from you.
01:17:55 You can also email us at onthetape@riskreversal.com
01:18:00 anytime.
01:18:01 Follow and connect with us on Twitter @OnTheTapePod,
01:18:05 and we'll see you next time.
01:18:07 On the Tape is a Risk Reversal media production.
01:18:09 This podcast is for informational purposes only.
01:18:12 All opinions expressed by me, Dan Nathan,
01:18:15 Guy Adami, Danny Moses, and any other participants
01:18:17 are solely our opinions and should not be relied upon
01:18:20 for specific investment decisions.
01:18:22 (upbeat music)
01:18:24 [BLANK_AUDIO]

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