Open Book with Anthony Scaramucci - America’s Affordability Crisis, Zohran Mamdani, Trump's Economy, & Crypto’s Lost Momentum

Episode Date: December 23, 2025

Mike and I discuss why we're "nervous bulls" on markets—with the Fed cutting rates and Trump pumping money into the economy, valuations look attractive, but an exploding wealth inequality gap and growing political backlash could trigger a revolution that ends the bull market. We dive into housing affordability (half of America earns below what's needed to buy a home), tokenization's global impact, Abu Dhabi's rise as a financial hub, and what economic warning signs would make us turn bearish. 📚Mentioned in this episode: The Hour Between Dog and Wolf by John Coates Streetwise: Getting to and Through Goldman Sachs by Lloyd Blankfein Michael Novogratz is the Founder and CEO of Galaxy Digital. He was formerly a Partner and President of Fortress Investment Group LLC. Mr. Novogratz served on the New York Federal Reserve’s Investment Advisory Committee on Financial Markets from 2012 to 2015. He serves as the Chairman of The Bail Project and has made criminal justice reform a focus of his family’s foundation. Follow Anthony on X: ⁠https://x.com/Scaramucci⁠ Follow Novo on X: ⁠https://x.com/novogratz⁠ Anthony Scaramucci is the founder and managing partner of SkyBridge, a global alternative investment firm, and founder and chairman of SALT, a global thought leadership forum and venture studio. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Realtor.com says right now the average price for a home in the U.S. is 425. So therefore, not to be house poor, you need approximately $131,000 a year in salary to afford that home. The median income in the United States is $84,000. That means half of our people will blow that. Respond to that anxiety. It's real. I think you're seeing it, not just in the working class, in the lower middle class, in the middle class, in every strata of society. it's getting harder to do what you thought you would earn your way into.

Well, welcome to all things markets. This is Mike Novagrats and Anthony Scaramucci. Michael, how are you today? Doing well, Anthony. I'm loving the galaxy sign behind you in the scarf, all right? You're looking badass. But let's start with the macro environment. Okay, you and I both got back from Abu Dhabi last week.

Tell us a little bit about what's going on around the world. And where do you think things are here in the United States now that we've seen this inflation print. Yeah, listen, in inflation, these numbers for first of our, are hard to trust because of the, you know, the data shutdown that we have with the government. But certainly looks like inflation is heading lower. And the, you know, that's going to make Trump more aggressive on whoever he picks as Fed governor. It's going to make the Fed feel more comfortable in this, in this debate between, you know, jobs and inflation. And so my gut is, whoever we pick, and I think it's either going to be HACET or Kevin Warsh, are both going to be pretty dovish.

I think we're seeing short rates. We'll get down to two and a half percent. You know, Fed funds two and a percent within a year under both of those Fed governors. All right. So let me, you and I know Kevin Warsh a long time, okay? And Kevin was a hard dollar guy back in the day. He was a full on monitorist. What happened? Now he's a dove. So tell me how, tell me about that transition in your call. Listen, I think a power is pretty, you know, be the Fed share is a pretty powerful thing on your resume. And power is an aphrodisiac. And so I think part of it is you're not going to get the job unless you're, you're doing what the boss wants. Part of it, I actually think.

Kevin is intellectually honest and thinks this AI boom, productivity boom, is going to be unbelievably deflationary and wants to get ahead of it. And that's, you know, listen, it's going to be one of the great questions that we all have to answer over the next, you know, six to 18 months, 24 months. Does AI just eviscerate jobs and put labor, you know, pressure on wages? Does it increase productivity so much that we get growth? but we get, you know, kind of a Goldilocks scenario or almost a deflationary growth scenario. All right. So let's play ball and bear. Okay, let's play ball and bear. So on that, let me make the bear case for you. I want you to react to it. Okay. If you look at forward S&P earnings,

they're they're peaking. They look at they look like on multiples of pre-2008 global financial crisis. They're back to like 2007 PE multiples. If you strip out the Mag 7, it's a little bit better, but the MAG7 seem to be the ones that are driving the capital spend in the economy, Michael. So are you worried about the PE of the stock market irrespective of where rates are? You know, kind of yes, but if you look at some of the big MAG7 companies, you go out to 27 earnings, their PEs are already low. They're increasing their earnings at such an amazing pace that, you know, you're 17, 18 times of 27. And people will start talking 27 as soon as the calendar year flips. And so not as expensive as they were.

I talked to one of the great equity investors in the world. He said he's hoping for a 10% correction because he'll load the boat. And so there's a, there's a case that, I mean, Warren Buffett just bought Google. that Google and meta and Microsoft are not expensive. They're just such dominant companies, and they're going to continue to dominate. You know, when I think of tokenization to pivot to crypto for a second, I was just in Abu Dhabi, there's a lot of talk about tokenization. You know, what's tokenization of equity is going to do?

It's going to, in time, give access, not to people in the United States who already can go on Robin Hood or, you know, their Goldman app or Schwab or anybody's appened by stocks, but all over the world, And what are they going to want to buy? So in, in, you know, Paraguay or Peru or the Mide or Brunei or Asia, they're going to want to buy the brands. Give me Apple, to be SpaceX, give me Google. And so I think you're going to have even more demand for those stocks. But that's the big question. All right.

So you're still a bull then. I am a nervous bull. And I think the big. risk, and it's a real risk and it's hard to quantify, is this whole last few years plus AI has even accelerated, which already was a pretty big inequality gap to an insane inequality gap. And that's going to have political ramifications. I read somewhere that 75% of Americans think a wealth tax is a good idea. And, you know, you sit with Ray Dalio. He thinks something like that is coming. And normally what kills the great bull market is a policy error, right?

Or they rate, you know, the Fed finally raises rates. They're worried the economy's too hot and they, you know, they slow down growth and things roll over. Like, we got a Fed that's going to be cutting rates. We got a government that's going to be pumping money in the system, right? Trump does not want to lose these midterms. And his polling is is heading south pretty quick. He's made a lot of mistakes. And so you can bet your bottom dollar that if it's $1776 for servicemen or something else, he's going to find a way to try to goose the economy. And so that's normally not how bull markets end. What will end this, I think, is a political revolution, i.e. maybe the Democrats win. Maybe there's wealth tax.

Maybe there's a real, this can't go on moment. We haven't hit it yet. Mondami was, you know, the first flare. right smoke smoke on the field uh because he's speaking truth to power he's saying this doesn't make sense anymore right right uh and people are like yeah you're right you're right now you can debate how you fix things and like i would argue with him he's not going to fix things the problem let's go to him for a second because you met with him recently i understand you you hosted an event for him what was your what were your thoughts about him so i met with him a few times uh you know before he was mayor

I met with him twice for about an hour each one-on-one and once with a group of board members from Robin Hood. He's thoughtfully smart. He really believes what he says. He's young and aggressive. And I was giving him just advice of a 60-old-year-old man who's watched markets his whole life. I did help in a very small way

because we're not allowed to make major contributions as a Wall Street firm in this transition. gig with the idea that he's going to be the mayor, I want him to succeed, and I want him to have somebody that tells him their version of the truth, and not just all the young people he campaigned with. And he's been open to have a dialogue. I personally think most of what he wants to accomplish has to happen at the federal level, and that as the mayor, he should focus on making New Yorkers lifestyle better. And so he's trying to do that. And so that's housing. It's the stuff you can control. It's not tax policy, right? Tax policy is broadly a federal gig. But we'll see.

You know, the jury's out. I like that he picked Jesse Tisch to continue as police commissioner. That was a good sign that he's open-minded to not having all his teammates on his team. And so we'll see. But where he's become a national sensation is he got his finger on this idea of affordability. Trump's now trying to talk about affordability. But this is going to be. the issue of the next four years. How do we create a system that feels more fair? You're in such an interesting seat because you're on Robin Hood. You love the city like me. You're a city dweller, but you're also a global thinker and you're on a plane a lot traveling around the world. Is this affordability issue just here in the United States? Is it here the United

States in Western Europe? Do you think there are other countries that are doing business? better with this? If they are, how are they doing better or are they doing worse than this? You know, listen, I think it is broadly a Western issue to start with U.S. and Europe. The reason it's not as has, it hasn't been as political in the developing world is, you know, you look at a place like Vietnam or even China, you were lifting people up. And so the optimism just getting out of the getting out of the poverty level into the lower, you know, the working class level to the lower middle class level is so exciting that you still have a lot of optimism, even though they have huge inequality.

I mean, India's got inequality like we've never seen, but you're still lifting a ton of people into a better quality of life. And so there's not the same entitlement of what I expect my life to be, right? And so I think they probably have a 20-year gap in terms of to when the population really gets pissed at them. We have an entitlement of what we think our life should be because our parents had it. Right. We at least think we should do as well as our parents, if not better. The American dream is you do better than your parents. Are your children do better than you? I shouldn't. Oh, listen, there's that anxiety now. You know, Michael, I read this statistic. I want you to react to it. A realtor.com

says right now the average price for a home in the U.S. is 425. So therefore, not to be house poor, you need approximately $131,000 a year in salary to afford that home, and then to also have some disposable income for emergencies, prescription drugs, et cetera. The median income in the United States, that means half of our people, but the median income in the United States is $84,000. That means half of our people are below that. And we do know this from the statistics in the surveys. Lots of people skip medical visits. They skip dental events. visits, they won't repair the car, respond to that anxiety. It's real. I think you're seeing it, not just in the working class, in the lower middle class, in the middle class, in every strata of

society, it's getting harder to do what you thought you would earn your way into. Even, quite frankly, the lower rich, what used to feel rich in places like New York, you know, you you're making big salaries as a Wall Street salesman. Now they feel like, ah, I can't afford it anymore. For the same job for the same salary because everything they used to do got more expensive. And that is, I think, the number one issue in politics right now. And because, listen, if you live in the rarefied air of hedge fund managers or crypto currency CEOs, you're above that stress level, but almost, you know, 80% of my friends aren't.

And it's real. I want to go to our favorite subject. You're my favorite subject, which is crypto, okay? And I want to ask you the following question about Bitcoin. And I'm going to channel our buddies. Okay, we have some other big crypto whales, Bitcoin whales, I feel like Bitcoin, every time it gets a bid, Michael, it gets slammed to the mat. Okay, you're a wrestler, right?

Every time, every time you feel like you're going to win a point in a wrestling match, the opponent to Bitcoin flips it to the ground and starts the pinning process. What do you say to that? So there's a great book that your speculative, you know, listeners, you know, the traitors out there should read called The Hour Between the Dog and the Wolf. and he talked about the psychology of a bull market, which is all testosterone fed, and the psychology of a bear market where it's cortisol. And he's in a bull market, you see guys sitting around the trading floor talking about women,

talking about cars all pumped up, what about their lift. And a bear market, what happens is the market falls, it starts coming back. Oh, thank goodness. Thank goodness. And even though you would promise yourself you were going to cut some of your risk if it came back, You now have endorphins pumping into your body. And you're like, I can do it tomorrow. You go on a walk and it rolls right back over.

You go back in a fight or flight. And so he says in a bear market, traders get these little look like beer bellies, right, cortisol bellies and their hands are on their hips. And all the guys start slunching their shoulders a little bit. You know, that's the market we've been in in crypto for the last, you know, three months. every time it feels like it's going up, yeah, you breathe a sigh of relief and then you get punched. But what is it, Michael? Is it well-selling? Is it- I think we underestimated the damage of Black Friday, the flash crash, October 9th. It was a psychologically damaging and liquidity-damaging thing for retail. And crypto at its prime, you know, the primary user of crypto has. has always been retail. Certainly we've got a lot of institutions in Bitcoin and more in Ethereum and it's a lot of some, but that process really beat up retail and all investors are momentum-based,

right? Like growth stocks and crypto are momentum-based instruments. And so we haven't had enough juice to get the narrative going again. And I think you're going to go in this kind of choppy, sideways, less liquid range until we take out 100. And it's not going to be easy to take out. You're going to need new money coming in. A lot of the guys have burned, there's sellers of calls above. So a lot of the big holders say, well, it's so calls to make some income. That works until it doesn't. It works until ball gets so low. And then there's a catal of event. Asset becomes the Fed governor and pushes of much faster, pays a rate cut. the budget keeps blowing out, right?

Our old boss, Lloyd Blankfine, you said, be careful picking pennies up in front of a steamroller. Remember that expression? I just read Lloyd's biography on the flight over. So shout out Lloyd Blankfine. It read like, it's the first book I've read in a while in one sitting. Right. Yeah, well, it's very readable.

I read it as well, and I'm going to have him on our open book podcast. I love him. He's a very thoughtful, very insightful guy. But I want to go to this, though, is 2026 a big year for Bitcoin? I would have thought, let me rephrase it. If you had asked me, I would have said 2025 is going to be a great year for Bitcoin. The shackles are off. The regulatory environment is going to improve.

And we're going to the moon. We're going to end the year at 150. Bitcoin. We're sitting here at about 88,000 as we're speaking. So I totally got that wrong. and now the sentiment is decidedly negative, Mike. Yeah. So what do we have going for us?

The sediment really does stink. And there's a macro story that I can come up with that potentially becomes a good enough narrative to get sentiment going again. That's the bull case. I think there's still more healing to do. I'm not worried that we've seen the all-time high in Bitcoin. I just am not. There is a gigantic apparatus behind this asset. There's a belief system. It's not going away. But it didn't do what it was supposed to do this year. And so it's going to go sideways until it starts behaving. And I don't think like Wall Street's a selling machine. And we're just getting a lot of these big RIA platforms, you know, geared up to sell. And so I don't think that's going away. We also have an administration that owns a lot of Bitcoin.

Personally, they're connected to it. They bet their gig on it. What really is happening, and I pick this up in Abu Dhabi in a very extreme way, is there is unbelievable optimism around the transition to a world where digital assets and blockchains are more important. And that's going to show it with Neo-Banks. Every day someone else is talking about their. what I call neobank, right?

They're offering, they're bringing that's going to have crypto and tokenized stocks and prediction markets all on one app, right? Like we're going to bank the unbanked. A lot of that's overseas. So couldn't be more bullish on building out the infrastructure or crypto. It's a little bit like the internet, you know, after the internet had trouble, you had some of the greatest years of growth in terms of building the infrastructure.

And so there's no bare market in building. crypto infrastructure coming for trade FI and for crypto. How we get momentum back in crypto pricing is always been about narrative. And we're going to have to see that pick back up and prices begin prices. And so in some ways, you don't need to get bullish until we break 100. Mike, you brought up Abu Dhabi, and I want to get you to react to this. I was there in Abu Dhabi with you at the chance to interview Brian Armstrong and Atolli from Salana. When I go to Abu Dhabi, I see the future. And I think that there's an economic

paradox of being early. And just hear me out for a second. If you build your airport in 1930, well, now you're layering on to the airport. If you build your telecom system with copper wire, there's still copper wire in the ground here in the U.S. But if you are starting and you build your airport in 2021, which Abu Dhabi just did, and you're building gleaming skyscrapers and gleaming infrastructure. Your lateness to the economic game almost makes you more innovative. Where we are lagging with 1930-style water mains here in New York and 1930-style infrastructure. What is your reaction to that? And what does it say about Mina and the future there and the and juxtapose it to the U.S.? Yeah. So it felt like more so than it ever has, and I've been going

there for 25 years, more, 30, that Abu Dhabi is at having its moment, that it's become a real place, that it's an important place in the global, you know, architecture of financial market cities, almost more so than Singapore, which is kind of shocking given the scale that Singapore had. And so hats off to those guys. Let's remember, it's still 11 million people in the Emirates, one million Emirates, it's a tiny place. It is giving a good model for what an Islamic country can look like, hoping Saudi's following. Like we don't have a lot of,

there are 55 Islamic countries and they're not a lot of good models. And so that's the biggest hope. And I do think, you know, it's a long way for them to get to a place of domestic, you know, consumption, right? You know, like when you think of that just as the giant scale of the GDP of the U.S. and China, you know, we're not even in the same conversation. And so I do think there's a lot to do there as a business, right? There's a lot of capital.

There's, it's a great platform to reach Africa and South Asia, right? I'm wildly bullish the next 20 years on Nigeria and Africa. the growth dynamics and the energy, they're all young people. And so I think they're well positioned and they're very strategic. But I think we've got to be careful that we don't confuse the scale with the massive scale of these big economies. So, Michael, we've talked about macro, Fed rate cuts coming. We talked about this wall of worry. You're a cautious optimist.

I'm also with you on that, costas optimist. But let's talk about an economic dashboard where Mike Novagrads gets worried. The trader, the macro trader, Mike Novogratz, what would you have to see on the dashboard? Excess leverage, policy tightening. Like, tell me about you're flying. And right now the ceiling and visibility is more or less unlimited. We'll say it's cavo. But you're going to, when the clouds come, what do they look like?

Yeah. If inflation starts ticking back up. up problematic, right? Because we want to, A, we need to fund this $40 trillion deficit, so lower rates are good for that. And the yield curve is already steep. If it starts steeping, steepening at an accelerating rate, it can grind steeper, but if it starts gaping steeper, oh shit, that's problematic. And then I got my figure really on the pulse of politics. I'm I think it's probably tailwind for a while because Trump's behind. But if they get wiped out in the midterms, it's the efficiency or the efficacy of his presidency is going to go way down.

There's going to be all kinds of investigations. There's going to be just a lot of noise. And you're going to be gearing up for 2028 where unless things change, you're going to have the administration flip back to Democratic. And then it's a question of, is it a, is it a Bernie AOC, Mandami, wing of the Democratic Party? Or is it, you know, Josh Shapiro, West Moore wing of the Democratic Party? And that's a big difference in terms of how markets will react. And so markets don't love uncertainty. And so in some ways, I think we have the makings of bull market until we get closer to the election next November.

The average person, when I'm walking in the street, the average person you say is Trump a lame duck president? They say no. He looms larger than life. But you're a political aficionado for 40 years. When that midterm is over, one, is Trump running again? I say no. What do you say?

And then number two, you've seen other lame duck presidencies and you've seen, you know, we can pull out the stock alman act together. what happens in the last two years of a presidential cycle where the president can't run again? What are your thoughts on that? Listen, I think this is going to be different because of the character, right? Trump is just an enigmatic, you know, we've never seen anything like it. So will he run again? I don't think so, but he's going to act like he is.

He's going to go back and forth. And so we're going to have all that drama. who's going to be the nominee on the Republican side. We'll see. I don't think they have a strong one. I honestly don't in this current crop. But you know, you never know. Things change.

And somebody hits a note and people, you know, gather behind it. A lot will have to do with how the economy does, right? The famous lines, it's the economy's stupid. That's going to continue to ring true. If, you know, we might get inflation coming down for lots of reasons, right? We pushed immigrants out. That pushed inflation up, but AI replaces it. You know, oil prices, I'm long oil and it's been a crap trade, right?

Oil price is low. It could go lower. And so you might. get lower inflation and decent growth. And I still don't think that's going to be enough to deal with the inequality. But we'll see. Trump's got a lot of building he wants to get done in the next couple of years. His ballroom, his arch.

And so you could also see an argument where he's just trying to cement his legacy. He is not shy of ego. You think Galaxy will be called Trump Galaxy before his term is over? I mean, because I'm sort of feeling like Skybridge could end up being Trump Skybridge. What do you think? We're going to put a little hair on our astronaut. Last question, Michael.

We've got 30 seconds ago in this podcast. It's Christmas. What is the Novigrat's team doing for Christmas? How do the Novogratz to celebrate the holiday? We always go out to our place in Amiganzet. my parents have a house out there. Big Christmas celebration. The next day we're going off skiing in Jackson Hole.

I've got a boutique hotel that me and some partners built. Yeah, I've been to that hotel. I've been to the restaurant at that hotel, which is a fabulous place. We've had a couple of great dinners there for our blockchain symposium out there. Awesome. All right. Well, listen, I wish you a very merry Christmas. Happy holidays.

And thanks for joining again. And we'll be back with a, no. episode of this. You're back by popular demand, my friend. There we go. The next time I'm going to ask you the questions. We'll do the sharing. When a country's productivity cycle is broken, people feel it in their paychecks, their communities, their futures. What does this mean for individuals, communities, and businesses across the country? Join business leaders, policymakers, and influencers for CGs' national series on the Canadian Standard of Living, productivity and innovation. Learn what's driving Canada's product.

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