Jay Pow is Flying High Over Wall Street, and We're All About to Die with Stuart Sopp of Current

Bullish Studio

See our transcript & show notes: https://riskreversal.com/podcasts/on-the-tape-podcast-jay-pow-is-flying-high-over-wall-street-and-were-all-about-to-die-with-stuart-sopp-of-current/  Dan and Danny are joined by Stuart Sopp, CEO of Current, to discuss what the Fed said (2:05), the consumer (5:30), the BOJ intervention (16:15), NYC rents plateauing (19:59), JPMorgan chart on the brink of a breakdown (23:38), turbulence in the markets (23:38), and what the term crypto winter means to Stuart (35:58). Later, Dan and Danny discuss what’s happening in Europe right now (48:23), why you shouldn’t be pressing stocks (51:45), and Danny's NFL picks (55:22).

Transcript

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01:20 Hello, listener, you're listening to On the Tape.

01:23 I am Dan Nathan.

01:24 I am here with my co-host, Danny Moses.

01:27 - By the way, is Guy running in the election

01:29 on Sunday in Italy?

01:29 Why isn't he back yet?

01:30 What is going on?

01:31 - Do you think head-to-head versus Berlusconi?

01:33 He would probably-- - He would crush him.

01:34 - Oh, he would crush him, right?

01:35 - Guy thought he was Adonis.

01:36 I mean, yeah.

01:37 - All right, well, Guy will be back next week,

01:38 but in his stead, we have Stuart Sopp.

01:40 He is the CEO and co-founder of Current.

01:43 He has been a guest on this fine podcast.

01:45 You've also been a guest on OK Computer.

01:47 Stuart, welcome back to On the Tape.

01:49 - Thank you guys for having me.

01:51 This is awesome.

01:51 - Well, listen, we wanted to have Stuart this week.

01:53 We planned this a while ago.

01:55 Stuart is an ex-macro trader.

01:56 He traded globally.

01:58 You were in, what, Singapore?

01:59 You were in Hong Kong.

02:00 You were in London.

02:01 You were last in New York at Morgan Stanley.

02:03 You were a rates trader, a currency trader, correct?

02:06 So we're gonna hit the macro here, but Danny Moses.

02:08 - Yes.

02:09 - We just gotta start with this Fed,

02:10 what the Fed said, I mean, what they didn't say.

02:12 You and I have been doing this a long time.

02:13 You have not traded actively, Stuart, in a very long time.

02:16 But you watch the markets very, very closely.

02:18 You run a company that, not a bank,

02:20 but it is a fintech company.

02:20 - By the way, thankfully, it's not a bank,

02:22 'cause we'll get to that

02:23 where these debts sitting on people's bank accounts.

02:24 - We will get to that, but the action that we saw,

02:26 not just in the stock market, in the currency market,

02:29 in the yield market, commodities, if anything,

02:31 which have been crazy,

02:32 have actually seemed really calm right now.

02:34 Let's just talk about, we're recording this Thursday,

02:37 into the close here.

02:38 One other thing, people, I listen to a lot of podcasts.

02:41 I listen to every podcast that we do.

02:42 I listen on One and a Quarter.

02:44 I think we sound really good on One and a Quarter.

02:46 - I talk pretty fast, though.

02:46 - Let's just talk at One and a Quarter.

02:50 Can we do that?

02:50 - Well, then it would be One and a Half.

02:52 It was a spinal tap, you put it on 11.

02:54 - 11, okay.

02:54 - I wanna start out with this,

02:55 'cause while I'm watching the press conference yesterday.

02:58 - The presser, don't they call it the presser?

03:00 - The presser, right?

03:01 In a world where one man throws common sense out the window,

03:05 enter stagflation.

03:07 All I could think of,

03:07 when I saw their stupid dot plots again,

03:09 like there's no common sense here at all.

03:11 They are taking down GDP, and now they're focused on PCE,

03:15 which is like the one thing you gotta look at.

03:16 But what are we doing?

03:18 You have to get to 2%?

03:19 Do you need anyone to tell you that's happening?

03:21 Let me just say this.

03:22 If they had just aired the same way,

03:24 his quote was, "Hope for the best, plan for the worst."

03:26 He didn't do that during the transitory period,

03:29 where he did the opposite.

03:30 He waited and waited,

03:31 so now he's completely on the other side.

03:33 There was no common sense here.

03:34 I cannot believe that the Fed Fund futures were correct

03:37 actually going into that meeting of 4 1/4,

03:40 ending at 4 1/2 type number.

03:41 I still don't think we get there.

03:42 Dan, yes, I'm gonna owe you the five grand,

03:44 because they're obviously--

03:45 - Yes, you will.

03:46 - Not cutting in December.

03:46 - Just so you know, that sounded like a trailer

03:48 for the Avatar movie that's coming out

03:49 that no one's going to see this weekend.

03:51 - By the way, we won't talk about shorting AMC anymore,

03:53 but literally, that's what you're going to the movies for,

03:55 is a remake of Avatar.

03:56 Anyway.

03:57 - All right, well, Stuart, when you're sitting,

03:58 even at your fine offices in Flatiron,

04:01 you're running this company,

04:02 you got a lot of things going on here,

04:03 but I'm assuming that the old trader,

04:05 the old macro trader in you

04:07 is sitting in front of your screens.

04:09 You're watching CNBC on a day like yesterday.

04:11 - Absolutely, yeah.

04:13 Almost more than that is that

04:14 when you're running a fintech, not a bank,

04:16 there's a few moving parts in there.

04:19 Of course, we have a savings rate.

04:20 There's liquidity being drained from the banking,

04:22 and that's why a network, a banking system,

04:24 and that's why Jamie Dimon's always complaining,

04:25 he's like, "There's a risk here."

04:27 Because for the first time in just over a decade,

04:28 we've seen net deposits come out.

04:30 And so he's panicking,

04:31 and the system is panicking on the liquidity of the plumbing.

04:35 And I think that's fair, or at least semi-fair.

04:38 And then I think in terms of how it directly affects us,

04:41 we've got like a VC community, investing community,

04:44 and there's no stability in the crossover funds,

04:47 the people who just before IPO,

04:49 you know, you'll fund those high growth companies,

04:51 all the way down to something like a series A, series B.

04:54 And there's one thing they're all focused on,

04:56 and it's inflation.

04:57 And the reason why is because inflation

04:59 affects the rates market,

05:00 which affects the cost of capital,

05:01 which affects the price of equities,

05:03 which affects the public market comps

05:05 of the private companies of which we're in.

05:07 So it's a human centipede of excitement

05:10 that's coming all the way down here,

05:11 but it does ultimately affect the VC community,

05:13 the private company community,

05:14 and more importantly for us,

05:15 obviously the fintech community.

05:16 For all those reasons, the funding reasons,

05:19 as well as the products we're offering to our consumers.

05:21 - And it's changed so quickly.

05:22 Let me just say this, those are private companies,

05:24 but I have no sympathy at all

05:26 for people that own public companies

05:28 that do not trade on fundamentals,

05:29 because they got what they, you know--

05:31 - Got what you deserve.

05:32 - Yeah, they got what they deserve, and so sell them.

05:34 Like you don't say,

05:35 and we can get into those single names later,

05:37 but something's gonna break here in the market, right?

05:39 You can't have these type of, something's going to break.

05:42 Things are just feel like they're cracking by the second,

05:44 but something's truly gonna break here.

05:45 I don't know what that's gonna be.

05:46 I'd love to get your thoughts on what it's gonna be.

05:47 We have currencies moving everywhere.

05:49 There's just too much happening.

05:50 - But it's funny, so Danny has spent a lot of time

05:52 in the podcast talking about some of like

05:54 the kinks in the armor over the last year

05:56 as it relates to consumer.

05:57 Guy has said this for years and years,

05:59 and he and I have been doing Fast Money

06:00 for over 10 years together.

06:01 He's been doing it for 16 years,

06:03 but he has this saying about the consumer,

06:05 "Never bet against their want to spend.

06:06 "It really is their ability to spend."

06:08 And I think some of the things that,

06:09 Danny, you've been highlighting for over a year,

06:11 some of these models, like a Carvana model,

06:13 which to you is just a subprime lending model

06:16 wrapped up in a used car dealer or something like that.

06:19 Talk to us a little bit about like

06:20 what you're seeing from the consumer behavior of your users.

06:24 - Yeah, and very important for us personally at Current,

06:26 but also maybe a bellwether and indicator

06:28 for the broader health of the economy.

06:29 We are banking probably the bottom two decile tracks

06:33 of America, people who are living paycheck to paycheck,

06:35 trying to make it work, blue collar workers primarily.

06:38 It's inflation and it's high inflation,

06:40 and they primarily spend on staples.

06:42 So it's gas, it's shelter, it's food,

06:44 and that's not going away.

06:46 So basically they're getting less for their money.

06:48 The demand for credit is massive.

06:49 We've seen that in the credit card numbers

06:51 that have gone ballistic.

06:52 We've seen it in the BNPL numbers that have gone ballistic.

06:55 Now the CFPB wants to come in

06:57 and start regulating that as well.

06:58 I think in the short term,

07:00 we have seen a focus on being smart about your money.

07:04 So people are going, okay, if I go to this ATM

07:06 and it charges $5, I'm not gonna do that anymore.

07:09 I'm gonna go to the free ATM.

07:10 And we've seen that behavioral shift.

07:11 But what we haven't seen is any cut down

07:13 or cut back in spend on the things

07:15 that they actually need, obviously, right?

07:16 So, and they're filling the gap

07:18 with sort of easy, cheap-ish debt at this first cut.

07:21 I think a lot of companies are also well-funded.

07:24 So we're in this sort of transition phase.

07:25 We're in this phase where everyone's making do.

07:27 And so everyone's pushing the boats out.

07:29 And I think there's a lot of fragility

07:31 being built this year with our consumers,

07:32 but also with the broader population of our area.

07:34 - It's interesting, so that's the consumer.

07:36 And on the corporate side, like you just said,

07:38 I mean, corporate balance sheets are in pretty good spots.

07:40 Right, there was a lot of capital raised

07:42 when money was free for a while.

07:44 I mean, Danny, talk a little bit about that

07:46 because you've been harping on these BNPL models

07:48 and just really what you were seeing,

07:50 because we started seeing kind of defaults.

07:52 We started seeing default rates ticking up

07:54 before the markets really felt bad earlier this year or so.

07:58 And so again, this push and pull between the US consumer

08:02 that is clearly weakening on the low end.

08:04 You highlighted this a couple of weeks ago.

08:06 I mean, Walmart talked about a couple of weeks ago

08:08 how they're seeing a new consumer

08:10 that they haven't seen,

08:11 a high-end consumer trading down a little bit.

08:14 But are we about to see this in corporate earnings

08:16 for Q3 when we see them rolled out over the next few weeks?

08:19 We've seen some big pre-announcements.

08:20 We talked about a few of them last week or so.

08:23 Is this starting to seep into the corporates here?

08:25 - Well, the first thing is the buy now, pay later,

08:28 BNPL, which I called short now, cover later.

08:31 At the time, you're starting to see the upstarts of the world,

08:33 these firms, the clarinets, which is private,

08:35 raise money at a much lower valuation.

08:37 There's no artificial intelligence that works for lending.

08:39 Vinny always says you cannot grow GDP.

08:41 If you outgrow GDP over a period of time,

08:43 you have underwriting problems.

08:44 So no one's reinventing the wheel there.

08:46 So if you're a consumer and you want to use it, great.

08:48 It's a great source of capital.

08:49 And if you need it, you can do it.

08:50 But I don't believe those companies long-term.

08:52 And now the banks that they use, the renter banks

08:54 that they use to cross rivers of the world are pulling back.

08:56 So now these companies are forced

08:58 to balance sheet the loans themselves.

09:00 That's exactly what happened in the subprimes in 2005 and '06

09:03 when the big banks started to pull the funding from them.

09:05 So let's just put that in one category.

09:06 So what we're seeing now, behavior of consumer,

09:08 using miles to travel, right?

09:09 But someone tweeted at me about how do you reconcile

09:13 the people going out?

09:14 I'm like, I think we're still in the kind

09:16 of post-COVID celebration mode.

09:17 Not everyone's invested in the stock market, right?

09:19 People are out kind of enjoying themselves.

09:20 - Most people are not, actually.

09:21 - Right, and so compare it to the last cycles.

09:23 This cycle, every cycle is different,

09:24 but this one is the most different.

09:25 And why is it the most different?

09:26 Because there's no Fed coming.

09:28 Rates are going one direction.

09:29 There's no incremental buyer, I believe, of assets,

09:31 of bonds, of equities.

09:33 Who is the incremental buyer of these things?

09:35 Everything will have its price.

09:36 It'll move down.

09:36 But as far as companies go and how they're preparing,

09:39 the good companies are preparing.

09:41 They're telling you what's happening with the consumer.

09:43 Walmart's telling you in real time

09:44 what's happening with the consumer.

09:45 FedEx is telling you what's happening with companies,

09:48 clients of theirs that's going on.

09:49 They're adjusting.

09:50 Those are good companies.

09:50 They're gonna be around.

09:51 They're gonna be fine.

09:52 They're quality. - But we haven't seen it yet.

09:54 That's kind of the point, is that the thing

09:55 that's holding the stock market, the S&P 500,

09:58 which is only down, what, 21 or so percent on the year,

10:01 are a handful of stocks.

10:03 So we just saw Microsoft and Google,

10:04 which are more than three and a half trillion dollars

10:06 in market cap, so two of the largest

10:08 in the top five of the S&P and obviously the NASDAQ.

10:11 They just made new 52-week lows.

10:12 But Amazon and Apple, which are also

10:14 about four trillion dollars in market cap,

10:16 they're still up 20%.

10:18 Now there's tons of stocks.

10:19 There are dozens and dozens of stocks in the S&P 500

10:22 that have been cut in half here.

10:24 So it is a multiple thing on some of the largest-weighted

10:27 stocks in the major indices.

10:28 - It is.

10:29 Can I back up and go to the Fed again for a second?

10:31 - Yeah, we're not done.

10:31 - I don't think we've spent enough time.

10:33 - I think Stewart wants to go back.

10:35 - I love FedTalk.

10:36 - I'm looking at their dot plot.

10:37 - Okay, let's do it.

10:38 - Since we started this show, you started laughing at me

10:40 19, 20 months ago.

10:41 When I first mentioned dot plot, you go, whatever, Dan.

10:43 You know what I'm talking about.

10:44 And it is absurd because of how they use it.

10:46 So they are now at GDP growth.

10:48 So in June, they were predicting 1.7% for 2022.

10:52 They are at .2.

10:54 Okay, okay, hello.

10:55 For 2023, they were at 1.7.

10:58 They're at 1.2.

10:59 Unemployment.

11:00 Somehow they think we're only gonna end up at 4.4%

11:03 in 2023 and '24 based on what they're doing.

11:06 They're just effing clueless.

11:07 Like I honestly, it is--

11:08 - Wait, wait, wait, do you think,

11:09 so 4.4% unemployment off of a 3.5% low,

11:13 do you think that's low?

11:14 You think it's too much higher?

11:15 - Well, let me just say this.

11:16 So in the last 75 years, I think,

11:18 Bank of America put this out today,

11:19 that you cannot have more than half a point increase

11:22 in unemployment without a recession.

11:23 It's never happened.

11:24 - Well, Rosie said that on our podcast a few months ago.

11:25 - No, but it's just asinine.

11:27 My whole point is that why do you have to,

11:29 and listen, I don't necessarily, I'm not bullish,

11:32 but at the same time, common sense,

11:33 why do you have to hammer?

11:34 Why can't you just go 50?

11:35 Why can't you just take a pause?

11:36 What's the risk?

11:37 I know what they think the risk is.

11:38 They think it's a wage price spiral,

11:40 that he was so excited to have credibility yesterday.

11:43 When anyone asked him a question, if you noticed,

11:45 he would look down in his notes to answer certain questions.

11:47 Like he would look down,

11:48 "I am as hawkish as I was in Jackson Hole.

11:50 "Make no mistake, I'm gonna be here to do this."

11:52 But something's gonna break here, right?

11:53 And let me just say this.

11:55 I'm not a fan of economists in general, because whatever,

11:58 but the last non-economist to run the Fed,

12:00 he's not an economist,

12:01 and Guy, you're not gonna listen to this,

12:02 so it doesn't matter,

12:03 but he has a Georgetown graduate degree,

12:05 he has a law degree from Georgetown, so that's great.

12:08 Princeton undergrad, right?

12:09 But-- - Who, Jay Powell?

12:10 - Yeah, smart guy.

12:12 The last non-economist was replaced by Paul Volcker, right?

12:15 1978 to 1979. - Who's that?

12:16 - William G. William Miller.

12:18 - Wait, wait, wait, William Miller?

12:19 The protagonist in "Almost Famous"?

12:21 - Exactly.

12:22 - I'm flying high over Wall Street

12:24 with America's hottest podcasters,

12:26 and we're all about to die.

12:27 - That's perfect, exactly right.

12:28 - That's pretty good.

12:29 - If you follow @SOPSTU on the Twitter,

12:32 he doesn't have any weird numbers

12:35 - I don't have any weird numbers.

12:35 - Walter Payton? - That might,

12:36 all right, he doesn't have Walter Payton's number

12:38 after there, but you are a Fed critic.

12:40 I don't think you're-- - A little bit.

12:41 - You seem-- (laughing)

12:43 - I'm in good company.

12:44 - You look through the Twitter there, there's a lot there.

12:46 What was your takeaway, and Danny made the point, okay?

12:49 The policy errors were made in 2021.

12:52 They kept their foot on the pedal for way too long,

12:54 and then the transitory nonsense, whatever,

12:56 but now the aggressiveness,

12:58 and really, at this point,

12:59 we've seen the stock market rollover,

13:01 we've seen housing start to weaken,

13:03 it feels like it's gonna get a lot weaker,

13:05 so we're gonna have that negative wealth effect

13:06 for consumers.

13:07 The last piece of the puzzle is that unemployment rate.

13:10 That's why I kinda stopped you on that 4.4%,

13:13 because I've seen a lot of strategists say,

13:15 "Listen, if they keep going to 4.5% in Fed funds,

13:18 "we're gonna have high single digits,

13:20 "and that's without a crisis."

13:21 Think about the last two times

13:23 that we had high single digits unemployment

13:25 was the financial crisis, and then the Black Swan event,

13:28 which was the pandemic, so where should unemployment be?

13:31 And this is really important.

13:33 Pre-pandemic, you remember we were talking about things

13:35 like universal basic income,

13:36 because the bots, the machines,

13:38 were gonna take all the low-end jobs?

13:40 Well, the low end is where the wage increases have come,

13:43 so I'm curious how you think about that.

13:46 What are your major criticisms of the Fed,

13:48 right here, right now, and what they're expected to do

13:50 between now and the end of the year,

13:52 and then this unemployment thing,

13:53 I think is a really important piece of the puzzle.

13:55 - Yeah, right on.

13:56 I think the Fed, dare I say it, the Fed is political.

13:58 I think everything's political now,

14:00 and the reason why I say it, I can back it up,

14:01 because Jay Powell basically held his foot off the gas

14:04 while he got re-nominated back in December last year,

14:07 and then all of a sudden, inflation wasn't a problem

14:09 until he got his re-nomination,

14:11 and then he came clean, once he got it,

14:13 and said, "Actually, we've gotta get going."

14:15 And so it was a political problem for, you know,

14:17 this is the function that we have.

14:18 - So quick one, the next Fed meeting is November 2nd,

14:20 it's exactly one week before the midterms.

14:24 Do you think, is there a chance

14:25 that they basically get a little dovish?

14:27 I mean, I'm just saying, you know?

14:28 - 100%.

14:29 - You think so?

14:30 - 100%.

14:31 - I mean, they'll talk it, they won't do it, maybe,

14:32 but they'll talk it.

14:33 Everything's got out of control.

14:34 I think Stan Druckenmiller said that,

14:36 and it's one of his stats,

14:37 that when inflation crosses 5%,

14:39 we have never seen a Fed funds rate

14:42 that hasn't gone above it.

14:43 So you're gonna have to hope that it comes down to four.

14:46 You're talking about things breaking.

14:47 We're not pricing out some really bad things happening here.

14:49 They're not coming to save us.

14:50 If their primary mandate, they've got dual mandates,

14:52 so they've got the inflation mandate,

14:54 which is primary in my view,

14:55 and then unemployment, full employment.

14:57 They're gonna kill employment,

14:59 they've already said they would, over inflation.

15:00 So they're just going to keep going

15:02 until they get it under control.

15:04 And also, when you talk to economists,

15:05 the smart guys, these central bankers and the rest,

15:08 they kind of really don't know how inflation works, right?

15:10 They still kind of don't know.

15:12 And so they're playing with the system.

15:13 And so hopefully it's about now.

15:15 Maybe it's done now,

15:16 and maybe the next 75 or 125 is too much,

15:19 and they can unwind it quickly, but we just don't know.

15:21 And I think the uncertainty going into the,

15:23 from this point on, from this high con,

15:26 this is where I get really, really scared and uncertain.

15:28 This is the most dangerous part, I think.

15:30 - I agree, and I was saying this,

15:31 like, I'm not gonna waste any more emotions,

15:34 like hating on the, is what it is.

15:35 I'm gonna adjust to what they're doing.

15:37 I'm gonna let fundamentals play out long.

15:38 You're gonna be right in the longer term.

15:40 You just have to deal with this volatility.

15:41 So I'm not looking for them to panacea.

15:43 I'm not looking for anything to happen.

15:44 So what am I gonna do now?

15:46 I believe, and we'll talk about this later,

15:47 that the long-term yields for the US

15:50 are close to peaking here.

15:52 And now if they're not, I'm still willing to buy them here,

15:55 knowing that I think they're gonna come down here.

15:56 - So buy Treasury's short yields.

15:58 Really quickly for the listener,

15:59 and again, just so you know, I mean, I've done that.

16:01 I bought the GOVT, it's the iShares US Treasury ETF.

16:04 So if you're buying that,

16:05 you're making a bet that yields come down.

16:06 Another way to do it would be the TLT.

16:08 You and I talked about it on a market call

16:10 earlier in the week.

16:11 The TLT is the 20-year US Treasury ETF.

16:14 So you wanna be careful here,

16:15 because those kind of near-term rates might stay well bid,

16:19 but the long-term ones, reflective of growth

16:21 or slowing growth, are the ones

16:23 that are probably gonna come in first.

16:24 Now Danny, I just gotta ask you this, though,

16:26 because we just saw the 10-year US Treasury yield

16:29 break out above that prior high from a few months ago

16:32 at 3.5%, and it broke out in a meaningful way.

16:35 And my buddy BK, Brian Kelly from Fast Money,

16:38 was talking about this on our call earlier today,

16:40 the BOJ intervention and what we're seeing now.

16:43 Talk a little bit about that,

16:44 'cause that changes the complexity.

16:46 Talk about what it means when you have these central banks

16:48 selling US Treasuries.

16:50 - Well, for the first time since 1988,

16:52 BOJ is actually intervening and buying the yen.

16:54 That's the first time.

16:55 Now, their entire reserves is just over a trillion dollars,

16:57 I believe.

16:58 So I think the world global currency trading

17:00 is six trillion a day, so they have a little bit

17:03 to fight for, but not a ton.

17:04 So I think the yen went from 145 to 140.

17:07 I don't know where it's sitting now.

17:08 As that thing weakens again, weakens when it goes higher

17:11 for everyone out there.

17:11 If it goes back to 145, 146, again,

17:14 these are the things that could break in the system.

17:16 But you have everyone around the world,

17:17 not everybody, not China, not Japan,

17:19 raising rates, except for them, basically.

17:21 And so all the other currencies are getting dismantled.

17:24 Japan imports basically everything.

17:26 - All their fuel, right?

17:27 - Their food, their energy, everything.

17:29 So they're at this point.

17:30 Now, Corota, who runs Bank of Japan,

17:33 came out yesterday and said, "We're not raising rates."

17:34 But then today they came out.

17:35 So it's a lot of talk, it's a lot of whatever,

17:37 but that's what scares me, is once you get

17:39 an announcement like that, if it doesn't work

17:41 and doesn't hold, this is where things can possibly break.

17:43 - Right, and just real quickly, the knock-on effect,

17:45 when you see the 10-year breakout like that,

17:47 what was the knee-jerk reaction?

17:48 The futures got nailed.

17:50 This was pre-opening when that headline came out.

17:52 So US stock futures, that is.

17:54 - I think we're entering this zone where the market

17:56 has this recursive or reflexive feedback loops

17:59 centered around exceptional breaks and dislocations

18:02 in asset classes and the relative correlations to them.

18:05 And something like a Corota and a Bank of Japan saying,

18:08 "Hey, actually, we can't afford our fuel anymore."

18:10 And to heat housing, we're an export nation.

18:12 They also export a bunch of cool stuff.

18:14 - Like Walkmans and stuff like that?

18:15 - Yeah, and like Toyotas and stuff.

18:17 - Yeah. (laughing)

18:18 That was a guy joke.

18:20 Sorry about the dad joke, people.

18:21 - God damn it. - Okay, okay.

18:22 - Casio watches or whatever they do.

18:23 On balance, they're just saying this is terrible for us,

18:25 but can they really plug that hole?

18:26 And so I was on this podcast a few months ago,

18:29 and I said, "Look, watch out for the dollar wrecking ball.

18:31 "We'll see 3,600 in the S&P."

18:33 And here we are.

18:34 - We kind of nailed it.

18:35 - Kind of, yeah. - Yeah, that's pretty good.

18:37 - What I do think is we've already seen

18:38 that bear market rally.

18:39 We're going to 2,900.

18:42 I think we're gonna over-crack. - Wow.

18:43 - Yeah, I think we're gonna over-crack.

18:45 I don't think it's a straight line,

18:46 so don't go out there and buy puts.

18:48 'Cause you look at the VIX.

18:48 VIX isn't moving because everyone's buying puts.

18:50 It's like the world's most amount of buying a put.

18:52 So that's not the strategy.

18:54 - Wait, so your point is the smart money has it right.

18:57 Hedge funds are all bared up.

18:58 That's one of the things that's really interesting.

19:00 Danny, you see these AAII,

19:01 you know, these kind of bull bear sentiment sort of things.

19:04 And they're reaching heights back to 2008 levels,

19:08 but you have a VIX that just stuck here

19:10 at like 25, 26, 27 or something like that.

19:13 So the smart money, and I'm doing air quotes here, people.

19:16 You can't see me.

19:17 They're already hedged up.

19:18 - It all comes down to leverage.

19:19 It comes down to leverage on the corporate balance sheet.

19:21 - I've heard you say that before.

19:21 - It's come down to leverage on the hedge funds.

19:23 And when you take leverage down and you de-gross,

19:26 it has a very destabilizing impact on the markets.

19:28 And you have these type of moves in the S&P

19:30 and other assets that you see.

19:32 The one thing that was interesting that the Fed did say

19:33 was ask point blank about,

19:35 would you actually go outright

19:36 and sell mortgage-backed securities?

19:38 And he was actually very ready for that question.

19:39 He goes, nope, not gonna do it.

19:40 Nope, nope, not gonna do it.

19:42 But at the same time, he said,

19:43 until he sees rents come down,

19:45 he's not gonna assume that rents are gonna come down

19:47 as far as shelter costs go.

19:48 My whole point is that common sense tells you

19:50 that with rates up here, that housing is slowing

19:52 and it's gonna happen.

19:52 - But housing though, prices coming down and rates,

19:55 obviously mortgage rates, the 30 year above 6%,

19:57 doesn't it only mean that rents are gonna go up,

19:58 the demand for rent?

19:59 And that's something that, that's your backyard

20:01 as far as your consumer a little bit.

20:02 - Exactly right.

20:03 Yeah, so a large percentage of our consumers are renters.

20:06 We focus on a younger demographic.

20:07 They're trying to save to get into housing,

20:10 but they're at the stage where they're primarily renting,

20:12 seeing much more pain.

20:13 I think what's gonna happen is more transitions

20:14 for going back home, living with the parents,

20:17 trying to share with the friends, all those things.

20:19 - So let's talk about New York rent.

20:21 I realize that there's other cities in the country.

20:23 I realize that Seattle, LA, Miami, Florida's its own thing.

20:26 And we've been talking about this on the show

20:28 for a year, over a year.

20:30 The housing thing has been very secular where it's been.

20:33 It's been very, people moving to Florida,

20:35 there's a secular move there, et cetera.

20:36 We know that New York, you can pretend, yeah,

20:39 Google's here, yes, tech companies have come.

20:40 At the end of the day, it's Wall Street that drives,

20:42 it is, drives the commercial real estate,

20:44 it drives the residential real estate.

20:46 It drives everything, really. - When you start to see things

20:48 like Citrix debt getting hung

20:50 and an 800, 700, 800 million dollar write down

20:52 and billions of more behind it on several other deals,

20:55 that's common sense to me.

20:56 So there's an article actually today in the Times

20:58 or the Journal about New York rentals have finally plateaued.

21:01 And I've always said how Wall Street-centric

21:03 some of these investors are in Boston and New York.

21:05 They only see what's going on around them.

21:06 Those are the people that are managing the money.

21:08 They don't tend to take a broader picture.

21:09 And when it hits home, and that's why it took so long

21:12 in 2005 and '06 to seep into people,

21:14 because it was the last cities to really get hit.

21:16 They weren't paying attention

21:17 to what was going on in middle America.

21:18 It's my life changing.

21:19 And I think now-- - We saw you

21:20 in the strip bar in Tampa. - People, people--

21:22 - In the movie, The Big Short.

21:23 Oh, we did, I did see that.

21:24 - Yeah, you know what they said in there?

21:25 - What? - Let's welcome

21:26 Dan Nathan from States. (laughing)

21:27 Congratulations, Dan Nathan.

21:29 Happy birthday, buddy. - No, no, but that's a really,

21:31 you made this point a lot, and I think it's interesting

21:33 'cause Guy and I, we've been sitting on a set

21:35 in midtown Manhattan in Times Square

21:37 talking about markets, talking about the economy

21:39 from that very perch that you're talking about.

21:41 And sometimes, that's where all the strategists,

21:43 all the economists, that's where all the hedge fund guys,

21:45 for the most part, and we all tend to look

21:47 and see what's exactly in our backyard.

21:49 I wanna go back to Stewart's 2900,

21:52 not in a straight line, and not investment advice,

21:54 people, as he says. - Not investment advice.

21:56 - So Danny, you were saying things that you are doing.

21:58 So you're interested in TLT.

21:59 So you're interested in making or expressing a view

22:02 that US treasury yields are gonna come in.

22:04 What's your time horizon on that?

22:06 Let's say the 10 year that just broke out

22:08 at three and a half, if it were to get,

22:10 it was at two and a half three months ago.

22:12 - Yep, I think over the next month.

22:13 I think we'll see the high here.

22:15 Listen, the way these things--

22:16 - So could it be into this political dovish commentary

22:19 on November 2nd?

22:20 There'll be a trial balloon floated

22:23 in the Wall Street Journal.

22:24 That's how this happens.

22:25 And then you'll see yields peak out.

22:26 You'll see the dollar, the US dollar,

22:28 come in a little bit, right?

22:29 Okay, that may be back to trend.

22:31 What else you got, Danny?

22:31 - Let me ask you a question.

22:32 What economic data point could possibly come out now

22:35 that could create any more hawkishness that is existing?

22:38 I don't think there's--

22:39 - Well, the CPI, PCE, like--

22:40 - No, but I'm saying on a relative basis

22:42 to this terminal value

22:44 where they think rates are gonna be.

22:45 Like to me, that's kind of done.

22:47 So if I think about it that way,

22:48 I don't think the Fed can get any more hawkish.

22:50 So now what's gonna happen?

22:51 We are gonna have so many dirty Friday night dirties

22:54 coming out on, it's gonna start this Friday,

22:56 I would think, end of the quarter,

22:58 going into the holiday week, eight days of atonement,

23:01 which I'm first in line to atone for a lot of things,

23:03 but a lot of things happen.

23:04 - Wait, wait, which holiday are we selling

23:05 and what are we buying?

23:06 Are we buying Rosh Hashanah or selling it?

23:07 - I think you sell Rosh Hashanah, buy Yom Kippur.

23:09 I don't know.

23:09 - The steward doesn't seem to be in tune

23:11 with how people are trading strategies.

23:13 - But my point is that now's the time, right?

23:16 Lay it out there.

23:17 Give your pre-announcement out and set it.

23:18 So what I'm saying is I think fundamentals, again,

23:21 will win in the end of the day.

23:22 And so I'm confident that over time

23:24 we'll start to obsess on the Fed.

23:25 We can be angry and whatever and think they're wrong,

23:27 but it is what it is.

23:28 They've given you the setup.

23:29 And now we know.

23:30 You look at companies that have a lot of debt

23:32 on their balance sheet.

23:33 You look at companies that are gonna have to refinance.

23:35 You look at deals that are out there

23:36 that are getting hung.

23:37 You have hundreds of billions of dollars.

23:38 - All right, so deals getting hung.

23:39 Can I break in here for a second?

23:40 And again, you worked at a few investment banks.

23:42 - Explain to the audience what I mean

23:44 when I say deals getting hung.

23:44 - Well, no, so basically a lot of these banks

23:46 committed a lot of capital for LBOs

23:48 or private equity deals or this or whatever,

23:50 and now they're trying to recut them,

23:51 taking losses basically because--

23:53 - Not just taking losses,

23:54 balance sheeting the loans themselves.

23:55 - Correct, so they were warehousing them.

23:57 - Yeah, exactly.

23:58 - All right, so here's one thing that's really interesting.

23:59 Look at J.P. Morgan.

24:00 I harp on this a lot.

24:01 This stock is down nearly 28% in the year.

24:04 It's the worst acting major U.S. bank.

24:06 So that's a large money center

24:08 on a relative basis, Wells and Citi and Bank

24:10 act much better.

24:11 That's just over this last period or whatever.

24:14 This chart is about to break down.

24:17 110 is a level here.

24:18 Stu, put your hat on here.

24:19 Look at my fine fact set chart here.

24:21 - You don't have enough candlesticks on here.

24:23 Hold on.

24:23 Enough TA.

24:24 - See that gap going back to late 2020 here?

24:28 Okay, that's a gap down to,

24:29 I mean, 105 is coming near you.

24:32 What does that kind of mean to you

24:34 if the largest bank in the world,

24:36 and they haven't had any charging off,

24:38 they haven't, there's no GFC stuff going on here, right?

24:41 Danny, you've been saying this,

24:41 the bank's well capitalized, good shape.

24:44 Why does this bank act so badly?

24:45 - Because I say, when you look at the XLF,

24:48 stop trading ETFs and look at,

24:50 like every bank is different.

24:50 - You don't like the fact the largest holding

24:52 is Berkshire Hathaway and the XLF?

24:53 - No, actually, you should probably just own that.

24:55 I mean, you want to own in a rising rate environment.

24:57 You know their role, they own energy.

24:59 That's the whole point, Dan.

25:00 I'm joking, it's like go buy Berkshire.

25:02 The Wall Street banks are different than,

25:03 so Wells Fargo, yes, they have some Wall Street aspects,

25:05 but they're a consumer bank.

25:07 Bank of America, who got hung on the Citrix deal,

25:09 Goldman Sachs got hung on the Citrix,

25:10 so we know what's in it.

25:11 So what are the earnings gonna look like?

25:13 So the debt issuance, money's been free now for,

25:15 it's not free anymore.

25:16 Money was free for 12 years.

25:17 Like it's not free anymore, so everything changes.

25:19 That whole readjustment of people understanding

25:21 what that looks like, loan loss reserves

25:23 on the consumer side of a bank, right?

25:25 Write-offs on the corporate side of a bank,

25:26 what that means, Stewart's gonna see firsthand

25:28 some of his smaller private companies that'll get funding,

25:31 but if they didn't model it correctly,

25:32 they're going back and rebuilding their models

25:33 based upon higher discount rate.

25:35 We're in a new new,

25:36 and that's what we have to kind of adjust down to.

25:38 So I like to look at these things on the banks overall,

25:42 but then you gotta do bottom up on each of them.

25:43 And again, when the S&P does go to 2,900,

25:46 and I'm with you, I think it gets near 3,000

25:47 and there's 100 points on the other side,

25:49 what do you wanna own when they throw everything

25:51 out of there, right, coming back?

25:52 And that's what I think's important right now to understand.

25:54 - Yeah, I think it's important to look at

25:56 what is leading from a low.

25:58 Say we're right, 2,900 to 3,300, somewhere there.

26:01 No one can really predict the future.

26:02 - Oh, we're right.

26:03 - We're right, we're right.

26:04 (laughing)

26:05 - Go ahead. - We're not wrong.

26:07 But it's important to look at what leads out of that.

26:09 You know, it's old equity trading theory, right?

26:11 So if it's defensive or energy or anything like that,

26:13 it's like, all right, maybe not.

26:14 We just saw this bull trap rally.

26:16 I'd want to see some high tech come out

26:19 and some of the bigger techs.

26:20 But first, you've already mentioned it,

26:21 as we said in this hour,

26:22 you've got to see some of these generals,

26:24 these big tech companies layoffs.

26:26 They've gotta do something.

26:26 Now, what I heard is they have a 13% attrition per annum.

26:30 And so at the moment in their mind,

26:32 what they're trying to do is say,

26:33 hey, we're just not gonna replace.

26:34 So we'll see a 13% contraction.

26:36 And we'll do this for about a year, year and a half.

26:38 We'll have a 20% effective reduction in force

26:40 by not actually doing anything and pissing anyone off.

26:43 And so they're not really hiring.

26:44 Of course, they'll hire certain people,

26:45 but they're not really hiring broad base.

26:47 And so that's their mindset right now.

26:49 Now, if the Fed pushes everyone out

26:51 and this dovish thing in the next couple of weeks

26:53 doesn't really work and stick,

26:54 I think they're gonna have to capitulate into the new year

26:57 and start maybe actually removing some people.

26:59 And that's when, they're doing it

27:01 because of the earnings, right?

27:01 That's all the dirty stuff that you're talking about.

27:03 They're gonna have to reprice some of these

27:04 big large cap equities, Apple and the rest of it.

27:07 Then we start to see that slide into the low.

27:09 Then you wanna see how they behave from that.

27:10 - Listen, and we know the way markets work.

27:12 I mean, they will move ahead

27:14 of those actual events happening.

27:16 And so again, I do think that in this late October period

27:19 with Q3 earnings and Q4 guidance,

27:21 I think there's gonna be a couple bombshells.

27:23 I think that it might be a Microsoft.

27:25 I'm not exactly sure, but if you look at like a meta,

27:28 which just announced that they are gonna do a riff

27:30 for all intents and purposes, 10% of their workforce,

27:33 some people would say after the hiring,

27:34 they had headcount growth of north of 20% a year

27:38 for like a couple years or something.

27:39 They probably have more to go.

27:41 It just seems like a lot of those massive hirers

27:44 over the last few years or so,

27:46 we're gonna see that coming.

27:47 And again, if you can't control

27:49 a lot of the other input costs

27:50 and you're starting to see weakening demand,

27:52 the one thing you could do is lower your headcount a bit.

27:55 And so to me, I think the stock market

27:57 has a chance of capitulating.

27:58 The pre-pandemic high was 3430.

28:01 - Yeah.

28:01 - So we overshoot it to your point, Daniel, a little bit.

28:03 - Yeah, this time of year is always a little bit dicey.

28:05 - So let me ask you this, Danny,

28:06 because I'm looking at, and Stuart,

28:08 we had a fireside chat.

28:09 I was in your offices earlier in the week.

28:11 - Thanks for coming.

28:11 - Yeah, no, it was awesome.

28:12 It was great to meet, I know a lot of your team,

28:14 but it was great to meet a lot of the people

28:16 who work there and some of the questions that they had.

28:18 And one of the points that I wanted to make

28:20 is that a lot of people who are working hard,

28:21 they have their heads down, they have their jobs

28:23 and they have their families

28:24 and they're doing the stuff that they do.

28:26 They look at the stock market as a monolith.

28:28 They think of the S&P 500.

28:29 Some people are still quoting the Dow, I don't know why.

28:31 And some people, if you're in tech,

28:32 you're maybe just focused on the NASDAQ.

28:34 And if you look at those major indices,

28:36 there are dozens and dozens of stocks that have crashed.

28:39 Like for all intents and purposes are down 70, 80%.

28:42 They feel like October 2002,

28:45 if you had bought internet stocks into that.

28:47 But they're probably sitting around,

28:49 well, it feels really bad 'cause I bought this stock

28:51 'cause my pal worked over there or this and that or whatever

28:53 and it's down 80%.

28:55 But why is it that the stock market's only down 21%

28:58 or something like that?

28:58 And so I think that's a really good point

29:00 is that it's only gonna take a handful of stocks

29:03 to really let us know, to ring the bell

29:06 that we might have capitulation.

29:08 Is that fair?

29:08 - Yeah, I agree.

29:09 And we talked about this before.

29:10 If your shorts are working

29:12 and you find yourself owning a lot more

29:14 of these quote high quality companies,

29:16 the commanders, the captains,

29:18 whatever you wanna call them that are out there,

29:20 you realize that you actually have to start taking them down

29:22 because they actually become bigger.

29:24 The way math works, they actually become bigger

29:25 as a percentage of your portfolio.

29:26 So it's not that they're not good companies,

29:28 but again, I wanna say one more thing on this Citrix deal

29:30 because I think it encompasses everything that happened.

29:33 It was a $16 billion LBO.

29:35 They were taking it private just over a hundred bucks

29:37 a share.

29:38 They announced it in January.

29:39 So in January, if you remember,

29:40 like we hadn't raised rates yet.

29:42 - You know what also happened in January?

29:43 - We had all time.

29:44 - Microsoft paid $70 billion for activists.

29:46 - Where's Barry Diller by?

29:47 Don't get me wrong.

29:48 - Oh, there it is.

29:49 - Oh, there it is.

29:50 - The options trading in front of that.

29:51 - Yeah, Dave Geffen, a prolific options trader.

29:54 - Well, there was also, and there was Tomo Brava,

29:56 a PE firm, they were buying software companies

29:58 at big multiples of sales.

30:00 - Well, here's the thing, Adobe just paid,

30:02 and we talked about $20 billion for a company.

30:04 It's still happening.

30:05 - No, I know, but there's one thing to do it with debt.

30:07 And there's one thing to do with stock and cash.

30:08 So anyway, the debt was eight and a half billion of debt,

30:11 which is gonna be brought in associates.

30:13 The debt got priced at 91 cents on one tranche

30:15 and 84 cents on another, six or 700 million

30:18 with the banks themselves taking down the majority of it.

30:21 And Elliott, who was the leader of this LBO on Citrix,

30:25 taking a billion dollars themselves.

30:27 Vista, I don't think, took any of it.

30:28 They were partners with them as well.

30:29 But when you think about that, to me,

30:31 it encompasses, okay, money was free,

30:33 you can get away with those deals.

30:34 Those deals are gone.

30:35 There is a price for a deal, but it doesn't exist there.

30:37 Because now, with rates where they are

30:39 and a company's cash flowing, that's great.

30:41 But the numbers all change.

30:42 And that's the whole point about repricing risk

30:45 when rates move higher.

30:46 It's that simple, it's just math.

30:47 And so that's why Stuart's right on 2900 or close,

30:50 because the re-rate that's gonna happen.

30:52 People are gonna realize it's not a quick cycle,

30:55 it's a secular move here.

30:56 We're out of a 12, 13 year phenomenon.

30:58 And the Fed is actually selling treasuries.

31:00 But that being said, we're gonna invert more,

31:03 let me just finish, and I do believe,

31:04 I'm a buyer of the 10, the 20 year bonds.

31:07 Two year, it's gonna be tough to move right now

31:09 until the Fed actually does have a pivot,

31:10 given it's still catching up to where it might go.

31:12 But the higher the two year goes,

31:14 the more certain I am that the 10 year yields

31:16 are gonna drop, because the more certain I am

31:18 of funding costs and what that's gonna do.

31:20 Right, Stuart?

31:20 So your thoughts on that?

31:21 Is that logical?

31:22 Nothing in this market's logical.

31:23 It was unfair on the way up,

31:25 and it was unfair on the way down.

31:27 So someone said to me the other day,

31:29 when there's free money,

31:30 you get paid for future cash flow returns.

31:32 When there's a cost of money or a decent cost of money,

31:34 you get paid for cash flow returns today.

31:37 And so everyone's gone defensive,

31:38 and they've had to rewrite their models, like you said.

31:40 And so this is a massive digestion problem,

31:42 whereby we're just really swallowing it here.

31:45 And I think the Fed,

31:46 we've already said it a couple of times,

31:47 the Fed is on the wrong side of this trade,

31:49 and it's the first time we've had a policy error

31:52 for a long time.

31:53 Then we have deglobalization, we have macro events.

31:55 We've had an oil shock,

31:56 plus a potential nuclear war in Europe,

31:59 on the doorstep of Europe.

32:00 And so, I'm sure the Ukrainians

32:02 call themselves European now.

32:03 - Yeah, yeah, yeah, exactly.

32:03 - It's probably Europe.

32:04 And so we've just not seen the confluence

32:06 of these factors, well, ever, right?

32:08 And so everyone's looking at things going,

32:10 they're just not being frightful enough,

32:12 or they've been conditioned in the way

32:13 that things will just V-shape and be fine.

32:16 And I think it's worth,

32:17 without selling fear and all the rest,

32:18 it's just worth thinking,

32:19 okay, maybe it isn't just perfectly fine.

32:21 We should prepare for some of these deeper retracements.

32:23 - I agree.

32:24 When you have PEs that were trading north of 20,

32:27 price earnings multiple on the S&P,

32:29 we're drifting now in the high teens, Dan.

32:31 I don't know where we sit right now on 22 numbers exactly,

32:34 17 times probably, not forward 12, I'm just saying.

32:37 All that was predicated on rates being kind of low,

32:40 because you'd have to go back and look,

32:41 and I don't have, in front of me, Dan,

32:42 you could probably get to it,

32:43 but when rates were this high,

32:45 what was the PE multiple on the S&P?

32:47 What does it look like?

32:48 And I know it's going lower.

32:49 So the question is, when do we get to the cycle

32:51 where we build all of this in,

32:52 where companies have adjusted their business models,

32:54 where the consumer's kind of okay,

32:56 and to your point, Stuart,

32:57 it's probably in 23 at some point.

32:59 - Q2, Q3, I think.

33:00 - Right, so when you start to look at what that trough,

33:02 maybe that's the trough earnings,

33:04 'cause the Fed, as we know,

33:05 will probably be cutting sooner than we think,

33:06 but that's another bet, Dan, for another day.

33:08 But that's coming.

33:10 They'll start to advance, and they'll say,

33:11 okay, you'll pay a premium multiple

33:13 when you think you have the trough earnings.

33:14 But I don't believe we're anywhere.

33:15 So just to keep it general,

33:17 if we're 215 or $220 per share on the S&P 500

33:20 or somewhere in that realm,

33:21 I believe we make it towards the 200 level.

33:24 I believe we get to a mid-teens, 14 or 15 multiple,

33:27 which is where you get your 2,800 to 3,000,

33:29 and from there, we gotta see how this thing plays out.

33:31 But to your point,

33:33 factor in all the geopolitical stuff going on.

33:35 I can't remember a time when I've been an adult

33:37 where things have been worse or more unsettled.

33:39 That's the other problem here.

33:40 And so there's a lot of things you have to wait.

33:42 Yes, professional investors get paid

33:44 to put money in the market.

33:45 They get paid to allocate overweight certain sectors.

33:47 Then there's retail,

33:48 and then there's hedge funds, there's everybody else.

33:49 So everybody has a different angle of where we're going.

33:52 Sorry, Dan. - You know what's interesting?

33:53 I almost think that Tim Cook or Satya Nadella--

33:56 - Tim Apple?

33:57 - Tim Apple. (laughs)

33:58 I think that they would almost be doing J-PAL a big favor

34:02 with a material guide down for the next quarter.

34:06 - But Dan, we already tried that.

34:07 - Oh, 'cause everyone owns it.

34:08 - Well, I'm saying because passive,

34:10 and you like to talk about that.

34:11 Think about how many ETF funds

34:14 or how many mutual funds-- - All the Mike Green

34:15 Professor Plum situation where it'll just unwind one day.

34:18 - Well, I mean, but think about it.

34:19 If they were to just reset the states,

34:21 that's how you get that S&P multiple

34:24 down to mid to low teens.

34:26 And then you're doing the favor on the stock market.

34:28 Housing is gonna do what it is.

34:29 It gives them a path forward

34:31 to take their pedal off the metal a little bit,

34:33 in my opinion.

34:34 - Listen, there's a lot of Fed experts out there

34:37 that have worked at the New York Fed

34:38 that understand the plumbing of the system.

34:40 I won't get wonky here.

34:41 But something's gonna break here

34:43 because Stuart brought up a point here

34:45 at the very beginning about deposit rates

34:47 have to start to move higher.

34:48 People will start to pull money out of the banking system.

34:51 That has repercussions.

34:52 You don't think about it that way,

34:53 but when you leave the deposits,

34:54 and there's write and cash leave,

34:55 so something might break in the reverse repo market.

34:58 That's Guy's favorite thing.

34:59 He won't listen to this.

35:00 He won't remember it.

35:01 But something's gonna happen there.

35:03 That may be where it ends up happening, right?

35:04 Because you're just gonna have

35:05 just the crazy volatility right now

35:07 and uncertainty going on.

35:09 And so I don't know if that's what it's gonna do.

35:10 You have thoughts on it?

35:11 - Yeah, it's so hard to know what's gonna break, isn't it?

35:13 And I'm probably in my most uncertain stage

35:16 of this secular bear that we're seeing.

35:18 Also, on the positive side, I don't think it's over.

35:20 It's important to remember that I don't think

35:22 this is over for the world or over for America.

35:24 I think there's a repricing for assets.

35:26 It's a deflation of these things.

35:28 We spent too long pumping them up.

35:30 I think it's actually relatively healthy

35:32 'cause whoever's left is gonna be great.

35:33 So I think that's important to remember.

35:35 In terms of what shoe's gonna drop, there's so many.

35:37 I think the banking system is one of them,

35:39 but they're normally pretty healthy

35:40 'cause of those capital ratios.

35:41 But significantly different.

35:42 - Although they're now getting eaten by LBO debt.

35:44 But yes, please continue.

35:45 (laughing)

35:45 - When they're not being eaten by LBO debt.

35:47 That's a good point.

35:49 Well, yeah, look at Goldman Markets.

35:50 Great conflation of consumer and Wall Street stuff.

35:53 And they came out with billions of dollars

35:54 of losses on both sides.

35:56 - Well, let me say, Dan, before you go,

35:57 and I'm only gonna talk about meme stocks for two seconds.

35:59 - Go ahead. - Five seconds.

36:00 I know I always say I use them as a barometer.

36:03 People, please listen to me.

36:05 If you think Bed, Bath & Beyond is getting debt done

36:08 at any price that's reasonable,

36:09 do you really believe it's a...

36:11 So those models, yeah, you can be in there trading.

36:13 If I just get my money back, sell it.

36:15 - Yeah. - Sell it.

36:15 - All right, so we've seen--

36:16 - I'm not even, I'm not involved in it by the way.

36:17 - So no, but this is a good segue, okay?

36:18 So this is the last point.

36:19 We're gonna let Stuart get out of here.

36:21 We've seen meme stock gets killed.

36:23 We've seen SPACs get killed.

36:25 We've seen crypto get killed.

36:27 We've seen NFTs and that stuff.

36:29 It's done, it's over for now.

36:31 Stuart and I have had some really good conversations

36:33 on crypto, his origins.

36:35 He and his co-founder, Trevor Marshall, they go back.

36:38 They read the Bitcoin white paper

36:40 when they were still trading currencies

36:42 and Morgan Stanley--

36:42 - Yeah, 2011.

36:44 - So 11 years ago, these guys,

36:45 they believe in a lot of stuff.

36:47 Danny's been a critic of a lot of it.

36:49 You've acknowledged that there's stuff there.

36:51 You don't go from nothing to a trillion dollars

36:54 in market cap and then all the VC capital

36:56 and the stuff that's being built around the ecosystem

36:58 and at its highs, it was what, two, three trillion

37:00 or something like that.

37:02 Now we're below a trillion.

37:03 So talk to us a little bit how you're thinking about it

37:05 because again, you're there,

37:06 but what does the term crypto winter mean to you?

37:09 - I've seen a few of them now.

37:11 So typically Bitcoin, I'll just talk about that briefly.

37:13 We had the Ethereum merge.

37:15 So like, there was that.

37:17 So buy the rumor, sell the fact.

37:18 That's another good--

37:19 - So just so you know, Trevor's gonna be on OK Computer

37:21 early next week and we're gonna talk about the merge.

37:23 - Okay, great.

37:24 So I won't say anything else.

37:25 - Don't spoil it for anybody.

37:26 - Don't spoil it.

37:27 (laughing)

37:28 No, Bitcoin to me, I think,

37:30 it went through a few things in my mind,

37:32 which was, hey, it's a payment thing, it's new money.

37:34 And I think we all settled on it's digital gold

37:37 and I think that's where we've come out at.

37:39 - Does it bother you that like real gold is in the shitter?

37:41 - Not really.

37:42 I mean, I'm long some, long time--

37:44 - Give me high five, come on.

37:45 - But because--

37:46 - F you, Dan.

37:46 - Yeah, I know, I also own miners, which is stupid.

37:49 - No, it's not.

37:50 - But I do own physical.

37:51 - You and I are--

37:52 - You own physical.

37:52 - I'm gonna grow a beard like that.

37:53 - What's your address?

37:54 - I'm not telling.

37:55 - Okay.

37:56 - Yeah.

37:57 - And I just think gold--

37:58 - Well, it's actually not worth it for me

37:59 to like kind of like--

38:00 - No, really, you're rich.

38:01 - At this point--

38:01 - You're so rich.

38:02 - Wait, where is it, Dan?

38:03 You have 1500 or what is it, 1600?

38:05 - Dan, keep, I'm just asking.

38:06 - I love your name.

38:06 - I'm just asking.

38:07 - Stuart, you interrupted.

38:08 - Sorry, sorry, sorry, sorry.

38:09 - No, it's fine.

38:10 - Digital gold.

38:11 - Back to digital gold.

38:11 - So gold miners--

38:12 - What I was trying to say is Bitcoin

38:13 is a dollar debasement hedge.

38:16 It's not an inflation hedge, it's not.

38:18 - Well, hold on, people thought it was.

38:20 Were you one of the people that thought it was?

38:21 - Never did, never did.

38:23 So, because I was a currency trader.

38:25 So I can see the thing.

38:27 So basically what it was was free money,

38:29 dollars going to zero, we're rewriting the dollar, right?

38:31 - So it was the Fed printing.

38:32 - It was the Fed printing, yeah.

38:33 And so when we monetize it, in theory,

38:36 after this dollar rally's over, in theory,

38:38 it depends on what everyone else is doing,

38:40 the dollar should crash.

38:41 It should crash at some stage, like a lot.

38:43 Go down to 60 cents from like 110 or 120,

38:45 wherever we end up.

38:46 And so that's what Bitcoin is right now.

38:48 Look, it can be other things later on and all the rest of it

38:50 but I think that's what its primary use is.

38:52 So until we finish raising,

38:53 until we finish killing inflation,

38:55 it's really hard for Bitcoin to rally

38:57 much more than a bear market rally.

38:59 I think, yeah, maybe everyone talking 13, 12, 13K

39:02 is just positioning and so we'll pop to 25 again or 28.

39:06 - But what does that mean, 12 or 13K on a,

39:08 so it goes down from a 350 billion market cap down to 190.

39:12 What does that mean?

39:13 I mean, I'm saying, can you put a value on it?

39:16 I'm gonna ask this to you as a question.

39:17 - Yeah, so I think when I started in the Bitcoin game

39:20 all those years ago, the main thesis was,

39:23 and it got perverted over time,

39:24 was that gold was like five trillion at the time.

39:27 - It went to 10.

39:28 - It went to 10, yeah, over time, but then, right?

39:30 So it's 2011, 2012 and the theory was like,

39:33 look, this could displace some of that market cap

39:36 and so could it be like a three or four trillion

39:38 market cap asset and digital gold?

39:40 And look, we got pretty close on this bull market wave up

39:43 but I don't think we're going back there

39:45 until we have some of the same dynamics.

39:47 So on the way down, I think 13K, sure,

39:50 but I think where you're trying to go with it

39:52 is why not further, right?

39:53 - No, why not, you know, I've got 16K,

39:56 5K, 10K and 50K.

39:57 - So to be honest, there is no good answer

39:59 other than I think the Bitcoin community

40:02 tends to not be shaken out of those lungs.

40:04 So you would need like people to go short

40:06 and to borrow to really drill it through those.

40:08 - So when I look at Ethereum, and again,

40:10 I'm not pretend, I was never bullish on them,

40:12 I'm not the guy that says I told you so at all,

40:13 believe me, 'cause it's out of my element,

40:15 but if I think of Ethereum right here

40:17 as a $160 billion company, there's actually applications

40:20 and things being built to use it.

40:22 Bitcoin's not, there's nothing really being done, right,

40:25 it relates to Bitcoin.

40:25 - The utility and value of Bitcoin is digital gold,

40:29 meaning in countries and places

40:31 where their currencies have been debased,

40:32 like Argentina, or you need to leave Russia

40:35 'cause you don't wanna go to--

40:35 - Right, but the whole reason of it,

40:36 it started was money laundering,

40:38 and back in, you know, 10, well, Silk Road,

40:41 no, I'm saying--

40:42 - No, that's not reason.

40:43 - That's a use case.

40:44 - Yeah, but then the internet was porn, I mean, like--

40:47 - Yeah, no, but that's great, you know,

40:48 Bill, whatever.

40:49 - And cat photos, you're more porn, I'm more cat photos.

40:52 But here's one of the things I would say to you,

40:53 I actually buy the digital gold,

40:56 I don't buy the payments aspect.

40:57 - It's not.

40:58 - 'Cause here's the thing, and this is a shameless plug,

41:00 I use Current, my kids are off at school, okay,

41:03 I don't have a problem--

41:04 - No, I use Current.

41:05 - No. (laughs)

41:06 - No, no, I use Current.

41:07 I have four accounts with Current.

41:09 I'm 45 and I use it.

41:09 - Yeah, remember FDIC.

41:10 - One in a hundred.

41:11 - All right, all right, all right.

41:12 - Not a bank.

41:13 - But not, not.

41:14 (laughs)

41:15 No, but my point is, it's like,

41:16 those rails work really well, and it's cheap,

41:19 and you know what, and they have a savings account there,

41:21 and you know, all that sort of stuff.

41:23 My point is, I never bought the payments thing,

41:25 and he's gonna say, we're well-banked here in the US,

41:28 and it really is in other places,

41:30 but I do, if you were inclined to buy gold,

41:32 I'd much rather own Bitcoin in a wallet on my iPhone

41:37 than physical gold wherever you own it

41:40 and pay to store it, or the GLD.

41:42 - Stuart, one last question on this.

41:44 So, I've been harping on Tether since we started this.

41:47 - I know.

41:48 - Okay, there's obviously something wrong there.

41:49 I mean, no, it doesn't take, so, does that mean anything?

41:52 Because every time I ask a Bitcoin bull,

41:54 if this turns out to be a fraud,

41:56 we know that from an attestation perspective,

41:58 they don't have what they say they have.

41:59 - No. - Okay, they have some cash,

42:00 but they don't have near.

42:01 - And they have some bonds. - What does it do?

42:02 What does that mean?

42:03 No one can explain to me what that means.

42:04 If this token, what does it mean?

42:05 - Yeah, so if Tether goes down kind of thing.

42:07 - Like, literally, they go to an island.

42:09 - Yeah, so Bitcoin's going down a lot.

42:11 - So, that's going to happen, Stuart.

42:13 - Yep, yep, and that's why I said, I just don't--

42:15 - Dan, no, just know, and he's asked that question, Stuart,

42:18 of a lot of long-term Bitcoin bulls

42:20 who will not actually admit to that.

42:22 - Right, they don't talk about it.

42:23 But, Stuart, why don't the true Bitcoin,

42:26 and I know it's here to stay, Bitcoin,

42:27 no matter what the value is.

42:28 If it's 1,000, oh, God, whatever, it's here to stay,

42:31 but why don't people talk about it more,

42:33 about what it does to the architecture?

42:35 'Cause some people say it doesn't mean anything,

42:36 it's a positive, because if that turns out to be a fraud,

42:39 people will then go buy actual Bitcoin

42:41 as opposed to buying Tether.

42:42 - I've got an easy answer for this.

42:43 - Please. - It's religion.

42:45 - Yeah, thank you. - And so, when you have a God,

42:47 you cannot blaspheme and say that--

42:49 - That's a great segue, 'cause we're gonna be talking

42:51 about Tesla in the next segment.

42:53 - Oh, yeah. - Oh, yeah, oh, yeah.

42:54 - Talking of Gods. - They're still public?

42:56 - No LBO comment for that one.

42:57 - Yeah, no, but here's the deal.

42:59 I think it was kind of a really interesting week,

43:01 and I just saw a stat, so we're a few minutes

43:04 into the close here, the S&P's gonna close down,

43:07 60 bips or so, the NASDAQ is gonna close down a percent.

43:11 These are two consecutive down days,

43:12 so the day that the Fed reported, and the day after,

43:15 I don't think that's a common occurrence here.

43:18 So, I think this has to do with the rate breakout.

43:20 If we didn't see the 10-year do what it did this morning

43:22 because of the BOJ intervention,

43:23 stocks would be green right now.

43:25 - Yep, well, Bitcoin's green.

43:26 Bitcoin's up 5%, and it's not looking at the same.

43:29 It's correlated, but not looking at the same.

43:30 - And that's a really good point,

43:31 and I think you agree with this, and I know Guy does,

43:33 is keep Bitcoin on your board,

43:36 no matter whether it's 19,000 or 13,

43:38 because when it does stage that rally,

43:41 it might be saying something about

43:42 what the Fed's next move is.

43:43 - Especially on the weekends.

43:45 - You know, Dan, today's the first day.

43:46 - When people don't have other ways to express those views.

43:48 - Dan, did you notice a change in the weather outside?

43:50 - It's cold and rainy.

43:51 - Yeah, what's the first day of fall?

43:52 Everything's changing.

43:53 We're into a new season here.

43:55 - The paradigm.

43:56 - All right, well, here's the deal.

43:57 Stuart Sopp is a very good friend of mine.

43:59 He's gonna become a good friend of yours,

44:01 and he's gonna be popping in here

44:03 and doing these sorts of convos,

44:04 because we are just hardcore Wall Street guys.

44:07 You're like a recovering Wall Street guy,

44:09 but you are a proprietor, and all of these macro issues

44:12 are really important to the company that you are building

44:14 and the people that you are serving.

44:16 So we really appreciate you coming on with us,

44:18 Stuart Sopp, on the tape.

44:20 Danny Moses, you are just in a mood,

44:22 and I will say this, my friend Tommy,

44:24 our friend Tommy Vittorio, has been on the pod before.

44:26 He texted me earlier today.

44:28 He said, "I can almost see Danny Moses

44:30 "in this environment with this weird backlit light

44:33 "looking this and that."

44:34 I was like, I wanna end on this point.

44:35 This is really important.

44:37 Danny and Guy and myself, we've been unusually bearish,

44:40 I think, since the day we started this podcast

44:42 in January of 2021.

44:45 We've gotten a lot of things right.

44:46 We've gotten plenty wrong here,

44:47 and let me tell you something.

44:48 If you think that we are perma this or perma that

44:51 or whatever, we take no pride.

44:53 There are no victory laps, because we know

44:54 that a lot of people who are listening to these podcasts

44:57 are actually getting hurt on days like today.

44:59 - Absolutely. - And so speak to that

45:00 a little bit, Danny, 'cause it's not fun.

45:02 We don't like being ridiculed when things feel really great

45:06 and we're trying to point out what could go wrong,

45:08 but when it does go right, we take no joy in it.

45:10 - Porter said it when we were in California,

45:12 just a realist, and you just gotta be a realist here.

45:14 It's not about being, I would do anything to be bullish.

45:17 I would love to wake up and be bullish.

45:18 And there's very few times in the last 13 years, right?

45:21 It's been-- - That's not a 2022 thing

45:23 for you though, I'm gonna take that right now.

45:24 - I don't think it's a 2022 thing.

45:25 - It's Stewart's target here. - To people out there,

45:27 but in all seriousness, to your point,

45:28 like I wanna help people with the experience

45:30 that we have, the three of us,

45:32 and even Stewart coming in here,

45:33 understanding having traded this stuff before,

45:35 what we're seeing and try to make it make sense,

45:38 because that's all we're trying to do here.

45:40 There's no, by the way, if you notice,

45:41 I don't victory lap, I own up to what, I don't.

45:44 I just, it is what it is.

45:45 It's a market, and this is what makes a market,

45:46 and I love the market.

45:47 It's two-sided, so I keep saying

45:49 there's gonna be a tremendous opportunity on the long side,

45:52 and I said last week going into the Fed,

45:53 I go, if there is any rally which lasted 10 minutes

45:56 after the Fed, use it as a time to sell things

45:59 that you know you shouldn't be in.

46:01 And then, same token, when you have selloffs like this,

46:03 and you know that you have a short,

46:04 you just don't wanna get rid of it

46:05 'cause you're quote negative, everything has its price.

46:07 So anyway. - Yeah, well,

46:08 I'll just say this.

46:09 I hope we're gaining some steam with Vinnie and Porter.

46:12 I think our listeners love when you have,

46:14 and I think there's a name that's emerging,

46:15 some of our listeners. - What are we doing?

46:16 - What are we doing?

46:17 What are we doing?

46:18 So Vinnie and Porter, if you're listening, I know you are,

46:20 get your asses in the podcast.

46:21 - Yeah, let's do it. - Let's do this thing.

46:23 All right, so final word here, brother.

46:25 - I would just like to say, yeah,

46:26 recovering Wall Street guy turned business builder,

46:29 and I looked at all the stocks and all the currencies

46:32 as numbers, as betting.

46:33 Now I'm on this side, and it's real.

46:35 These are people's real lives.

46:36 They dedicate their lives to building value

46:38 and companies for society, and now they're losing.

46:41 So it's not just the investors,

46:42 it's the people out these companies.

46:43 And so it's become very real for me on this side,

46:46 and it's very humbling to be on the long only side.

46:48 - Sounds so much better with that accent.

46:50 - Yeah, I'm in.

46:51 Whatever, Stuart, whatever you say next, I'll do it.

46:51 - What about the beard in the, in the,

46:53 in the number? - Yeah, that's really good.

46:54 - All right, well, listen, Stuart,

46:55 thanks for joining us, bud. - Thank you for having me.

46:56 - All right, listen, when we come back,

46:57 Danny and I, we have a few bits and bobs to finish up,

47:00 maybe your NFL picks,

47:00 maybe I'm gonna take the other side of one of those.

47:02 - Wow. - We'll see.

47:03 - I'm cocky, Danny. - All right, stick around.

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49:29 All right, we're back.

49:30 That was fun.

49:31 Stuart's the man.

49:32 - He's good.

49:33 - Yeah, he's good.

49:34 All right, let's talk about,

49:34 we started out by saying,

49:35 Guy, Sicily, you think he's running for something.

49:38 There's a lot of stuff going on in Europe right now.

49:39 And I think that one of the things when we talk about,

49:42 I mean, Stuart mentioned this.

49:43 I mean, this news Putin's speech mobilizing 300,000 troops

49:47 and threatening nuclear war.

49:49 It all seems like that is the thing

49:51 that might have this thing mean revert.

49:53 Does that make sense a little bit?

49:54 Because I think we made this point

49:56 and Vinny made this point last week on the pod

49:58 that there could be a coup.

49:59 And I thought that was a low Delta thing or whatever,

50:02 but back a guy like Putin in the corner

50:04 and you're gonna sort of get the threats

50:06 that we got this week.

50:06 Is that fair?

50:07 - Yeah.

50:08 I mean, Russia's not backing down.

50:10 They may not be able to do anything at this point,

50:11 but they're not backing down.

50:12 There's now unrest in Russia,

50:14 arresting people left and right for all these protests.

50:17 Italy has their elections this weekend.

50:19 I don't think anyone's paying,

50:20 I mean, people are paying attention,

50:21 but I don't think-

50:22 - So talk to us, so Draghi stepped down.

50:23 - Draghi stepped down.

50:24 We talked about that on the market call the other day.

50:26 I find that ironic since he was running the ECB at the time.

50:29 - But the risk is that you have a government coalition

50:32 that is formed and a prime minister that is more far right

50:36 and then less supportive of the NATO action in Ukraine.

50:40 - Yeah, they can say one thing and do another.

50:41 We've seen a lot of politicians, I mean, they support Hungary.

50:44 They support the leadership in Hungary.

50:45 That tells you all you need to know.

50:46 - Yeah, that's real skeptical.

50:47 - Yeah, exactly.

50:48 So it's a little scary over there,

50:49 especially where their economy is going right now

50:51 and where rates are going right now in Italy.

50:54 They're gonna need funding.

50:55 So if they start to isolate themselves more,

50:58 I'm no political scientist, but-

50:59 - You are not.

51:00 - I am not a political scientist.

51:01 My point is that, again, you have to start to fact that in

51:04 when you start to wonder what's going on

51:05 in the stock market, is it the be all end all

51:07 for US earnings?

51:08 No, but it does create, obviously,

51:10 a change in risk assets across the globe.

51:12 - And to Stuart's point that I think the dollar could crash.

51:14 Okay, so like, for instance,

51:15 the Euro has been under extreme pressure for obvious reasons,

51:19 but if we were to see some sort of reversion,

51:21 if we were to see things kind of chill out a little bit,

51:24 okay, let's talk a little bit about Germany here.

51:27 Obviously, you see lots of headlines on the table,

51:30 what Macron's saying about in France, about energy,

51:33 the UK has talked about subsidizing

51:35 or putting caps on energy.

51:36 What's Germany doing here?

51:37 - They nationalized Uniper,

51:39 which is like one of the largest power companies, right?

51:40 So they can make sure that they can get the power

51:43 that they need and the natural gas that they need

51:45 for the winter season.

51:46 - So just put that in some sort of context here.

51:47 Here's a fully, really well-functioning capitalist country

51:52 nationalizing one of their largest energy companies.

51:55 - Putting in $8 billion into the company,

51:57 and that's a lot of money, right?

51:58 'Cause they have to make sure.

51:59 - So would you call this, is this on the scale of TARP?

52:02 Sort of action, going back to GCC?

52:03 - I mean, yeah, I mean, listen,

52:04 you're not doing it for the stock market, right?

52:06 You're not doing it to the banks that function,

52:07 you're doing it so that your consumers are okay,

52:09 because there's gonna be unrest.

52:10 I mean, they see what's going to happen here.

52:12 And so a lot of things have to go right,

52:14 I guess, Dan, is what I'm saying,

52:15 in Europe for things to stabilize.

52:17 And I think that's too much to ask

52:19 over a short period of time.

52:20 So I just think that's one of those things

52:22 you have to factor in when you look at

52:23 the global macro picture of what's going on.

52:26 Does it impact every company in the US?

52:28 No, does it impact a lot of the multinationals?

52:30 Yes, 'cause if you're the CEO

52:32 of a big US multinational company, right,

52:34 and you're looking at European business,

52:36 what's your business in Italy?

52:37 What's your business in Germany?

52:38 Do I have a factory in Germany?

52:39 As a matter of fact, European factories are now--

52:41 - Shutting down.

52:42 - And they're coming here to the US, right?

52:43 They're now manufactured in the US.

52:45 Great for labor.

52:46 - It's also inflationary, though.

52:47 - It's exactly right.

52:48 So I'm just saying, there's a lot of stuff going on,

52:50 China, Taiwan, and listen, there's always stuff going on,

52:53 but it just feels impossible right now.

52:55 - No doubt, all right, before we get to your NFL picks,

52:58 and what I might take the other side of,

53:00 just real quickly, I had Carter Braxton Worth

53:02 on the market call today with me,

53:04 and we're talking about the S&P 500 a little bit,

53:07 and right now, where we closed today at 3764,

53:11 we're down about 12 1/2% from that August 16th high,

53:16 and we're down 21% on the year,

53:19 and if you look at that June low at 3630,

53:21 you look at the July low, it's like 3720.

53:24 I mean, if you're pressing stocks here,

53:27 I just wanna be really careful

53:29 that pressing stocks here is not a great trade.

53:31 I just wanna tell you that.

53:32 - What did Carter say on the S&P?

53:33 - Well, he kind of agreed with me

53:35 that 100-point range between the July and the June lows,

53:39 you could see some pretty decent support.

53:41 That would be down more than about 15% or so,

53:45 and then you gotta wait for a bounce,

53:47 and I gotta tell you,

53:47 because there is no Fed meeting in October,

53:50 and we're really gonna be focused on the micro

53:52 as far as earnings, that's really where we could see

53:55 if earnings are not bad or as bad

53:58 because estimates have been coming down,

53:59 and we saw this in Q2.

54:01 This is what sparked the rally in the summer

54:04 because estimates had come down,

54:05 companies beat lowered estimates,

54:07 and then we started rallying

54:08 'cause people thought it wasn't as bad as it could be.

54:10 - So yes, it's important to look at the S&P 500

54:12 in its entirety, but you made the case earlier in the show,

54:15 and you continue to make the case

54:16 that you have five or six companies

54:18 that still comprise a large amount,

54:19 and those companies are expensive and all this stuff.

54:22 Again, it's the stock picking.

54:24 So when you start to look,

54:24 stop looking at the 3700 on the S&P.

54:27 Yes, it will control the money flows, it will do all that,

54:29 but someone like a Kathy Wood at ARK,

54:31 I mean, if you own that ETF, you're an idiot.

54:34 I'm sorry, you're an idiot, okay?

54:35 Because she's out there begging the Fed to stop

54:37 for different reasons than other people

54:39 because she knows that--

54:40 - And she's been begging them to not.

54:40 - I'm sorry, but I don't mean to be rude,

54:42 but it is what it is.

54:43 It's just because you're not doing your work

54:45 because those aren't the things that are gonna bounce.

54:47 You have to get over this,

54:48 the days of stocks being able to go up 50, 100% on nonsense.

54:51 And by the way, while we're talking about this

54:53 with the SEC, who does absolutely nothing,

54:56 who rumors came out today that they're gonna do nothing

54:58 again about payment forward or flow again

55:00 and all this stuff, it's just a joke already.

55:02 And that to me is upsetting too.

55:03 That's a whole 'nother segment we'll do again.

55:05 But in general, no one's out there looking out for you

55:07 is my point, nobody.

55:08 Do you know what they look out for you?

55:10 When these stocks are down 90%.

55:11 Oh, let's file a suit.

55:13 What did this company do?

55:14 Oh, they were projecting this.

55:15 Oh, this CEO is making shit up.

55:17 Oh, this, that's when they help.

55:18 They don't help now.

55:19 So you gotta do your own work and be smart,

55:21 but know what you're--

55:22 - I've actually bought a bunch of those stocks

55:23 that are down 90%.

55:24 No, I'm long snap, I'm long shop.

55:25 I bought a little Lyft recently.

55:28 I bought a little Zoom, believe it or not.

55:29 I mean, some of these stocks have been absolutely down.

55:31 But that being said, I short the QQQ tactically here.

55:34 Okay, so to me, I'm on board,

55:37 but those stocks to me are kinda getting washed out.

55:39 If we ever had a meaningful rally

55:41 because people feel we're gonna pivot

55:43 the way we did this summer, I own PayPal.

55:45 I bought a little Nike today.

55:46 I fully expect to kind of average in.

55:48 I'm long CME, I'm long a little Faxett I bought today.

55:51 - Remember the game on the Price is Right

55:52 where we were kids when you fake sick

55:54 'cause you could sit and watch it?

55:55 - Not that one, no, that's a different show.

55:57 Where that red range would go up

55:58 and the levels, you'd have to say stop in that range.

56:01 - You just did that?

56:01 - No, well, stop.

56:03 But the whole thing about this 3,600, 4,200,

56:05 the red thing has moved down now, okay?

56:07 So it's 3,400, 3,900 probably.

56:09 My point is this.

56:10 You're not missing anything in this tape.

56:12 My point is that you don't have to run out

56:13 and buy the market here is my point.

56:15 - Right, but I'm short Q, I'm short Tesla,

56:17 and I just bought the GOVT, the US Treasury ETF,

56:20 and I'm short UUP. - You gotta do something.

56:21 - I love it. - The dollar.

56:22 So think about that.

56:23 I'm kinda hedged, so I'm trying to pick some stuff.

56:25 You just said, know what you own,

56:27 and pick some stocks. - No, I like it.

56:28 I'm not disagreeing.

56:28 I guess my point is that stop obsessing

56:30 on the levels of ESG. - No, but I'm a trader,

56:31 and I have fun doing this.

56:32 All right, let's talk a little bit

56:33 before we get out of here, NFL.

56:35 So what's your record on the year?

56:37 - Two and three.

56:38 I already have as many losses as I did through week 12.

56:39 - That's crazy. - I know.

56:41 - And I'm two and oh against you,

56:42 which is kinda weird. - Guy's not around.

56:44 I need his mojo. - Just to reset the stage here,

56:45 I was down 10 Gs, taking the other side

56:49 of your bets last year when you went 27 and three.

56:52 - Or 27 and five, I don't know, whatever.

56:54 - Oh, was it?

56:55 I'm a stranger. - I don't know, whatever.

56:55 - Against the line in the NFL.

56:57 Okay, so what are you doing this week and why?

56:59 And then I'm gonna tell you what I'm gonna do against you.

57:01 - All right, God bless Jets.

57:03 Love you, Vinny.

57:04 But they had no right to win that game.

57:05 Browns suck.

57:06 Bengals are coming in oh and two in thirsty, right?

57:09 They're glaying six on the Jets.

57:11 Whatever number it would be. - Jets at home.

57:13 - I take the Bengals over the Jets.

57:14 That's one. - That's an easy one.

57:15 - Okay, I'm gonna, this third week in a row,

57:17 I'm going after Tom Brady as a favorite, remember.

57:20 I won't bet against him as an underdog.

57:21 But that line opened up at two and a half.

57:23 Buccaneers favored over the Packers.

57:25 It's down to one and a half.

57:27 I think the Packers actually win that game outright.

57:29 But I'm a buyer of the Packers plus one and a half in Tampa.

57:32 That's your four o'clock national game on Sunday.

57:35 And the last one is the Cardinals getting three and a half

57:39 at home against the Rams.

57:40 The Rams almost let Atlanta come back and win that game.

57:43 Again, I'm always a believer in shorting

57:44 the Super Bowl winner into the next year.

57:46 But the Cards may have found something last week

57:48 in that miracle win that they pulled off in Vegas.

57:51 So I'll take the Cardinals plus three and a half,

57:52 the Packers plus one and a half,

57:54 and the Bengals laying six against the New York Jets.

57:56 - All right, do you remember Chris Berman?

57:57 - Of course. - The Bay of Pigs.

57:59 - Yeah. - It was Tampa Bay

58:01 versus Green Bay. - Yep.

58:03 - I'm gonna take Tampa Bay at home

58:04 minus one and a half over the Packers for 500.

58:08 - Got it, done. - All right?

58:09 - Yeah. - All right, listen, people,

58:10 we had a lot of fun.

58:11 That was Stuart Sopp, Danny Moses.

58:13 Next week, we are gonna have Guy Daly back with us.

58:17 - Yeah, thank God. - So stick around.

58:18 Thanks for listening.

58:19 Hey, you know what?

58:20 Leave us a review or something in the podcast doors.

58:23 People like it.

58:24 - Thanks once again to CME Group and iConnections

58:27 for sponsoring this episode of On the Tape.

58:30 If you like what you heard,

58:31 make sure you hit follow and leave us a review.

58:34 It helps people find our show,

58:35 and we love hearing from you.

58:37 Can also email us at onthetape@riskreversal.com

58:42 anytime.

58:43 Follow and connect with us on Twitter @OnTheTapePod,

58:47 and we'll see you next time.

58:49 On the Tape is a Risk Reversal Media production.

58:51 This podcast is for informational purposes only.

58:54 All opinions expressed by me, Dan Nathan, Guy Daly,

58:57 Danny Moses, and any other participants

58:59 are solely our opinions and should not be relied upon

59:02 for specific investment decisions.

59:04 (upbeat music)

59:06 [BLANK_AUDIO]

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