The Compound and Friends - We Haven’t Seen the Third Act Yet

Episode Date: May 13, 2022

On episode 46 of The Compound and Friends, Jan van Eck joins Michael Batnick and Downtown Josh Brown to discuss the bear market, inverse ETFs, the bond market, venture capital, Bitcoin vs gold, Terra's collapse, oil and gas outperformance, and much more! This episode is brought to you by our friends at Masterworks. Visit https://masterworks.art/compound to skip the 10,000 person waitlist. See disclaimer at mw-art.co/x. Check out the latest in financial blogger fashion at: https://www.idontshop.com Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Yeah. And I was just noticing this morning, Grand Central, like there are live guys in suits and ties. I'm like, what's – The New York Times did a thing yesterday about how we didn't realize it, but 2021 is going to be looked back on as the good old days. What do you mean? Everyone's house was worth way more than it should be. Asset prices – Portfolios were booming.

Nobody had to go to work. It was like really a golden moment where you can watch Netflix all day, get paid the same amount or more, not have to be anywhere or put on a tie. And that's all. Yeah, more. If you're in asset management, it was more.

Yeah, and how was Miami? That's going away. Miami, Bitcoin Miami? Were you in the Bahamas, Miami? Where were you? Yes. Both? Yes? Yes.

DJ Khaled? I were you? Yes. Both? Yes. Yeah, good times. Where were you at? DJ Khaled? I went FTX Salt. Oh, I had dinner with Howard. I don't know if you read Howard's note. Linsen? Yeah. Oh, we love Howard. He got stuck down there.

Yeah. I didn't know. Yeah, he got COVID. I had dinner with him. Every day he was tweeting COVID, positive, positive, positive. He got stuck. You gave it to him. Last week when we were sitting here, we were talking.

Who was on last week? Oh, Matt Phillips. Yeah, we were talking, who was on last week? Oh, Matt Phillips. Yeah, we're not good with this. We forget really quickly. And I'm looking at the screen as deja vu.

Remember going to the clothes on Thursday? I'm like, fuck, we're not balancing. We're not balancing. We're not balancing. What's the pattern?

Did you share with me the pattern where the market goes down every Thursday and Friday? So, you know how people like, will like quib, like, oh, nobody wants to be long going into the weekend? Yeah.

So Bespoke, I think it was Bespoke, did this chart. Somebody did it, where it showed the cumulative daily return by hour of every day of the year. And it showed nobody wants to be long going into the weekend. Thursday and Friday. It started Thursday afternoon. Negative 4%.

And it continued into Friday morning. All through the afternoon. And then Monday, it started to rebound. It's like negative 4%. And it continued into Friday morning. All through the afternoon. And then Monday, it started to rebound. Did you post that? Where was this? Who did this? We did this on What Are Your Thoughts on Tuesday. Let me see if I can find this.

But we wiped the doc out. I'll find it. I don't have it. You have that? Let me pull it up. Pull that up. It's hilarious. It's like quantifying the stupidity.

But it's still working. Is that as of? I mean. It was here to date. It was here toity. But it's still working. Is that as of? I mean. It was year to date. It was year to date. Right. Yeah. It's not like a permanent thing, but it feels permanent.

I am launching a hedge fund based on that. Oh, look, look, look. Oh, BFA. I feel like this is going to go on forever. It's an ETF idea, obviously. Yeah. So look at this. Nine o'clock.

Woohoo. Things are good. All right, whatever, whatever. Mix, mix, mix. F***. clock. Woohoo. Things are good.

All right. Whatever. Whatever. Mix, mix, mix. Wait. So the cumulative S&P return. It's a killer chart. Year to date on Thursdays is minus 10.6%. So we should just start a hedge fund.

And Friday's minus 8%. We should start a hedge fund that buys at three o'clock on Monday and sells at four. Right. Three o'clock. The three o'clock hedge fund. Yeah. No. ETF.

You can't earn enough but you know people can get screwed on the open and close right so you've got some weird things people you know enter their trades overnight and you could you don't have like a best x uh i don't know what the technical stuff is solves this i'm just saying i what i would do is i would tokenize fractionalizeize, and then – Retokenize. Retokenize, probably spin it off, and then LBO it. So – Not SPAC it. Listen.

Maybe SPAC it. All right. I mean that's – I don't know if you ever have seen anything like this for any other year. I can't imagine any year looking at something like this. Even in the reverse. This is almost eerie. What happens on Thursdays that people get so bearish? They remember that Saturday's

coming up. It's almost the weekend. They're front-running the Friday sellers. Yeah, exactly. My lord. We wrote you a really great bio. I'm going to read it to you. It's going to be a little bit awkward because I'm going to make eye contact with you

while I read about you. But that's okay. It's comfortable for everyone. It's comfortable for everyone. I'm very comfortable. The reader, the bio reader. Yeah. The bio-ee.

All right, guys, how are we doing on time? Looking good? Does that have some good dirt on me? What's that? Does that have some good dirt on me? No, no, no. Like some of my friends. Put my mic on!

You are one of the most accomplished people in this room uh one of the top 10 you're in the top five no you've had you've had a hell of a career i want to i want to celebrate that for sure for sure don't make me laugh the whole time okay no i won't please i won't we'll be good we'll be good uh let's do some claps am I supposed to put the headphones on? What do you mean, us? Put on the headphones. Clap it up.

Clap it up. Three claps coming in. Here we go. All right. No, you don't have to. I mean, it's great if you do. It's great if you do. Compound and friends.

Say it. 46. 46 of these. 46 we've done. 46. Welcome to the Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any

investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. How do you own a Picasso? I know how much money you have. It's not that much. Tell us how you do that. Well, there's a site called masterworks.io.

Okay. And they fractionalize art. So I'm a proud owner. I don't have my wall, but I've got it on my virtual wall, my digital wall. Okay. So you own point something percent of a Picasso. That's kind of cool. Not to brag, but yes.

Okay. How many other pieces of art do you own pieces of? I've got six. I think I've got seven. I think I've got seven. I've got six others in my repertoire, my portfolio. Okay. So how do you do it? And how do you do it and how do you get liquid?

How do you do it? Do paintings sell? Do they? Tell me the whole thing. Do they sell? Tell me the whole thing. I go to the site. I see what I'm interested in.

I buy. And then when they sell on my behalf, I will get liquidity. Ben got liquidity. Ben got a sale. Ben got a sale of one of the paintings he was a fractional owner in? Yeah. That's kind of cool. Anyway, here's what you do.

You go to masterworks.io. You got to check out the disclaimer, masterworks.io slash disclaimer. Let them know we sent you. And thank you for listening. Thank you guys so much for listening. Thank you for tuning into the show every week. We have so much fun producing it. And today is going to be an episode for the ages.

You guys are in luck. So much fun producing it. And today is going to be an episode for the ages. You guys are in luck. We have Mr. Jan van. Is it van or van? Van. Jan van Eck, ladies and gentlemen. Welcome to the show. Come on.

I'm psyched. Yeah, let's go. I can't hear anything. It's so loud. I just Googled you to make sure that we had everything in your bio that we wanted. And you come up as a Holy Roman Empire era painter, Flemish painter, which I guess makes sense. But that guy has a Y, E-Y-C-K. Yep. I knew when they were studying him in art history in college.

Because everyone would be like, hey, did you know? Good artist? First time he's heard that. Oh, yeah. Oh, he is? Oh, yeah. Okay. Do you know art? You must know art.'s heard that. Oh, yeah. Oh, he is? Oh, yeah. Okay.

Do you know art? You must know art. Not really. A little bit. All right. It's a manipulated market. But you do know a lot about the biggest topics of the week. And I said to you before, I feel like you are the perfect guest that we could have had. Not that we knew any of this would happen when we invited you, but the timing is excellent.

Let me give the listeners a little bit of an idea of who you are. Jan Van Eck is the CEO of Van Eck, a New York headquartered mutual fund and ETF company. You joined the firm in 1992, but you joined the executive management team in 1998. So you've seen some things. You've been around for a little while. Yep. Okay. Very cool. All right. So I think what VanEck itself is most well known for is thematic ETFs or sector ETFs, and you dominate a couple of pretty important categories. So I think most people are familiar with GDX, which is the gold mining ETF. It's about 14, 15 billion-ish. How long has that been around? That was our first ETF in 2006. Okay. So you actually started the ETF group within VanEck. Yes. That's your baby.

Yep. Okay. So you're pretty early, 06, I would say. Yep. Felt late, but- It felt late at the time, but look at how much has happened since then. Okay. You have SMH, which I didn't realize, the semiconductor ETF, which I think you guys dominate that category. Okay. OIH? We bought the holders that were set up in Merrill and we converted them from this really bad inflexible trust structure into ETFs.

So it was like a big one-time create, redeem and then create. So yeah, SMH and OIH are the two big winners out of that. OIH is large oil services companies. Shaker Hughes. Also the leader in that sector. And you have the junior gold miners, GDXJ. If the volatility of GDX is not enough for you and you're looking for more, the juniors, GDXJ.

Morningstar Wide Moat is one of your top five ETFs. What is that? So the theory, Morningstar does equity research, research on companies, not just on funds. And it's very simple. Like a company has a competitive advantage that it can achieve higher than normal profitability for a longer period of time, right? And that can be network effects or whatever it is. And then they have a valuation methodology that when they get below their target prices, they add it to the index every quarter. Okay. So like what would be in that Google, I'm guessing? No, Facebook is in there, right? Because it's not always in there, but when the price fell, remember it had a bad quarter, boom, they add it back in.

So the universe is which companies have this wide moat per Morningstar's quantitative standard. Right, and it's not that many. It's not that many. It's qualitative. They have like people, hundreds of people. Oh, and then the quantitative part is, well, what are the ones that are valued correctly to buy? Correct. Okay, that's a very cool idea.

All right, so you've been in the business a long time. It always feels different, but I have to say this particular bear market, which I'm calling it that, I know it's not 20% exactly, but it's close enough for my taste. This one feels really different to me for three main reasons. And I wanted to just hit you with these and get your reaction. The first is that it perfectly coincided with a bond bear market year to date. Both asset classes having the worst start simultaneously, which I don't think anyone had that on their bingo card. Even if you thought rates would go up this year, you probably didn't expect a bond market crash

with a stock market crash. The second though is the speed. You know, outside of COVID 2020, I don't remember a bear market hitting this quickly. I guess, I mean, statistically, I might be wrong. Well, the average stock is down 20%. The average bad stock is down 50%. And the average really, and the really bad stock is down 50% in three days.

So that's depth, which is the second place I was going to go. We're now in a place where most individual investors who own stocks, not just funds, have names that are down 60% to 80%, and it's normal. And that, to me, is one of the most shocking aspects of this bear market. It's not like it's two years of this. How about having a stock down 60% that falls 30% after earnings? Yeah. So those three things, I think, set this one apart. But maybe I'm overstating that and there have been worse and I'm not really recalling. What are your thoughts on all that? I think you're wrong on every dimension. Okay, tell me. So first of all,

we're in a different regime. The Fed has supported the market for the last decade, since the financial crisis and the Fed put, right? Everyone would just buy the dips. The Fed has been very loud, very clear that they're not just raising rates, but they're pulling back that quantitative, the buying of bonds that they've been doing. So like in the 70s, the era that I kind of grew up in the markets, like it's common that financial assets, meaning stocks and bonds, do bad in a time of inflation. Right. So that's outside of my experience. So I've never seen it. Yeah.

So that's the playbook. As far as the speed is concerned, I actually think if I'm at the Fed, I think that the bear market in stocks has been orderly. And what I mean by that is there is enough liquidity in the markets. You're not hitting jumps and having to halt trading and all that kind of stuff. No trading firms are blowing up. That's true. We haven't had that yet. It's painful. Every day is painful, but it's spread out now over many days. I mean, compared to 2020, right, when there was no liquidity, boom. It just left the bond market.

We had multiple circuit breakers in that bear market. Right. But that was like super fast. Yes. Right? And so that's – No, you're right. This is not that. Well, I'm worried that the bond market could get disorderly because the thing that I've circled on my calendar is when the Fed stops buying bonds in June. So that's – not to jump ahead of ourselves, but that's what I'm worried about. I've been saying that growth stocks have been overvalued. And I'm dying to put cash to work. I'm telling you, every day, every hour I look at that little chart, I want to buy. But I'm not going to do it until the Fed

just gets out of the market. And why are they buying? Why were they buying mortgage bonds a year ago during the middle of a housing boom? I've been screaming about this. I really don't understand it. What were they looking to have happen? We're already – you have home prices nationally up 20 percent. In some cities, up 30 percent. What are we trying to do here? Why are we buying how much?

$35 billion worth of mortgage bonds or whatever. To what end? Right. And so the last point is like how far prices have fallen. And it's been really painful. And frankly, the arc dynamic of getting into thematic disruption stocks. I think there's been just a bloodbath for those investors. I think this is the week that they pull out.

They've been piling in. We've been talking about this on the show for weeks now. I think this is the uncle. I think this is when they cry uncle. AUM is still positive. We don't know. We don't know if they're buying in. Because look, I know there's inflows into the fund, right? But as an ETF sponsor, I can tell you there is create to lend. Why did KWEN grow in assets last year? It's because people were shorting. The hedge funds wanted to short Chinese tech.

That's a good point. But why wouldn't they just buy S-Ark if they wanted to short it? I think it's in the first. The hedge funds love – like it's a very liquid name, so they probably can borrow cheap. That's a good point. That's fair. You might be right and you know way more about this stuff than we do. Well, I'm just saying we don't – I'm just saying neither of us really know whether the retail – Nobody on the New York Stock Exchange knows –

Duncan, what's going on? Are they buying – Duncan might know. Do you know? I have no idea. Okay. Nobody at ARCA or the exchange or any of the market makers knows. The prime brokers know. And the market makers know.

They're knowing if they're creating to lend, but they don't tell us. And they're not calling the Wall Street Journal and being like, here's what's really going on. VandaTrack tracks retail flow. And I think that they're showing buyers, but I could be wrong. You could be. So the inflation is causing like a deflationary death spiral in stocks. People know that they're going to be cheaper tomorrow. So who's buying?

You and I. I'm waiting for a higher low. Just give me one. I'm not buying it when they're crashing. And look, no one owned government bonds last year. No one said, oh, I want to buy 1% on a 10-year, and I think I'm going to make money. Like literally I would ask everyone I know, do you own any? No.

So in a way, is it weird that the 10-year would go to 3% or 4% when you have 2% economic growth and inflation of at least 2%? No, that's like totally – like if I had asked anyone in the markets, they would have said, yeah, that makes sense. Not me. I would have said no, only because demographics. I thought there was too much demand at 3%. There were a lot of narratives around why the bond market was the way it was over the last 10 years. It's the central bank.

It's just one reason. To that point, to that point, Verdad did this kick-ass piece that perfectly describes the current environment. They said, raising rates when growth has already started to decelerate creates significant dangers for the economy, which is one of the reasons why stocks have been selling off. So the question that I have is, to this point, is the stock market overreacting? No. This is all kind of predictable. Growth was so overvalued. Everybody said that. People were buying SaaS companies at 20 times revenue.

Revenue. 50, 60. Whatever. Insane. Insane multiples. They were coming public at those multiples. Rivian at 100. Zoom was bigger than Exxon at one moment in time.

Exxon is now 13 times bigger than Zoom. So that shit has been corrected real quick. Right. The name to me that's the poster child of that is Rivian though. It was the biggest IPO of 21. Yeah. It had all the right

people involved. They sold stocks- Ford, Amazon. Ford. They had a deal in place with Amazon. No, I'm just kidding. This thing came out-

No revenue, right? No. No, how many cars did they have? They came out on the verge of delivering their first cars.

Exactly, no revenue. But they- I guess they had bookings but nothing – but no actual – but now they do. But they came public at $160 billion. So it's like even if you're the biggest fan on earth of the truck, the management, whatever you like about Rivian, what on earth could justify $160 billion other than did you see what they're paying for tesla did you see what they're paying for lucid it was always a relative gain but that's what it is so those stocks are the the north star anymore the way that the fed funds rate is gravity for the 10 year or whatever everything trades off of apple i think and so now that now that apple is cracking look to get back to your question mich, about where we are in the cycle

with the financial markets, the economy, the statistic I look at is the unemployment rate. I mean, we have such a super hot economy and the labor market is so tight. It's so tight. So until that starts loosening, now the bears are going to say it's going to roll over like crazy. Yeah, there's all these job openings for all the unemployed. But that demand for jobs will go away instantaneously. I don't think labor markets adjust that quickly. So I'm saying the Fed is happy. The Fed is happy.

The stock market decline is orderly. And they're being very transparent in, you know, in what they're communicating. And, you know, the labor market, people still have jobs. We could have the poster child, the mother of all the stock market is not the economy environments where the stock market gets completely obliterated and the economy is relatively okay. We could track, but not a deep recession. And so unless we get a deep recession, then you could say the market is overreacting. Wait, unemployment rate for college graduates is 2%. So even if you said the labor market's about to roll over, it's what, four? Like,

what are we talking about here? That's my point. This is going to be generational. It's going to get weird. It is weird. Okay. Well, the only problem is, right, our cost of living is going up. Well, the only problem is, right, our cost of living is going up. So wages are going up. So that's where, you know, are you better off? That's the one thing I do want to say. I look at wages, but a lot of people are suffering, right? Because these gas costs are hitting everybody.

I agree. And one of the questions, I gave a talk last night to YPO, like a Long Island chapter with Barry. And there are people of all different ages in the room, but mostly over 40. I said, imagine yourselves back in your mid-30s. You're a millennial. You are about to enter into your peak earnings years. You're getting promotions. You're becoming a boss. And not only are you about to earn more money than you've ever earned, but you can quit your job and get a new one like that. There's 1.9 open jobs for every one person seeking a job right now. How powerful do you feel? And now let me add on to that. The stocks that you're forced to buy in your 401k are anywhere from 15 to 30% lower than where they were last year. Who should be more upset about the stock

market? You or your parents? Your parents are selling them to you. Where do you want to take your parents out of these stocks? At a record high or where they are now? But the fly in the ointment of that story is the cost of living is just completely absurd and getting worse. Like if you look at rentals, if you look at filling up a tank. We're going to talk about the inflation stuff,

but it's not just supply chain shit anymore. It's services are going up too. What's this about the Taylor rule? Do we have to get into this or no? Hell no. Who put this in here? You did. I did?

Where? I didn't put Verdana in there. No, no, no. Get out of there. I read that whole piece. Get out of there. I had no idea. We're not doing that.

We're not doing that. I want to talk about, so Josh wrote a post like, is the stock market cheap enough? And to the question of the stock market overreacting, I think absent a big one, meaning like a big policy mistake, which we might be on the verge of, absent a big, deep recession, I think we are maybe not there yet, but we might look back and say the stock market overreacted to the downside. Amazon down 43%.

Why? In other words, two scenarios. Scenario one, soft landing. If that's what ends up happening. Well, then stocks are screaming buy. And it's apparent by the end of this year. Not every stock, but many stocks are down too much. Yeah. However, if it's a recession, we're not low enough.

I agree. Because multiples still have to come down and earnings will collapse with them at the same time. So I see it as very binary where we are now. What do you think about that? I just, look, I focus on the elephant and that's the Fed, right? I mean, it doesn't really matter. I know we all think about what we think about. We don't, you know, the Fed is the giant in the fixed income markets. And so the act that, you know, we haven't seen the third act of the play, and that is the Fed is going to get out of the fixed income markets. And we have, you know, commercial banks that provide no liquidity to the fixed income markets.

So that is where the breakage could happen. It may be a little bit abstract for equity investors, but it's still like everyone needs to borrow money if you want to buy a house or whatever. But they come back. That's the third act. They come right back. No, no, no. The third act is a twist. What's the thing that none of us can comprehend might happen when the Fed gets out of the bond market.

Citadel buys it. You know, no, we could all come up with a scenario where there's a liquidity crunch and there's a, you know, a 20% spike in bankruptcy filing. We all could do that. Doesn't that seem just too obvious? Or sometimes the obvious thing ends up happening. That's what the market's struggling with right now. I think does the Fed tighten too much and just are they irrational? And I think they care more. I don't think they care about asset prices to a certain extent because they

would need to kill inflation, right? They just made a big policy boo-boo. And so whenever we make boo-boos, right, we want to fix them as fast as possible so they really want to get rid of inflation. What was the mistake? Stimulating in 2021? Yeah, causing inflation, the temporary of inflation. That is their job, is price stability. So I just think they have to – they want to solve that. But if the fixed income market starts creaking and crunching like it did in 2020, that's the third act. Now, maybe we don't get there, but I really want the third act to start and make sure it doesn't happen and everyone dies at the end. People forget that pre-COVID, they had to step into the repo markets in 19.

They've had to step in a few times that we kind of gloss over because of how much they stepped in in 20. And listen, there's all these – remember European debt crisis? Guess what? Greece still has borrowed a lot of money. We've borrowed a lot of money. These higher rates – Don't joke about that. I'm a lender.

No one's really in the markets to me talking about the pain that's going to come from borrowers having to pay a lot more interest for their debt. We haven't seen a big spike yet. Speaking of debt, we haven't seen a big spike yet in really anything that would concern you about junk bonds or high yield or even the leveraged loan market, which is enormous at this point. They're all functioning fine. That has not happened yet. Maybe that's the third act. But again, that would be very predictable. It's what always happens.

What do you think is the reason? Is it just because companies were able to lock in such low rates that they can coast on that for a while? And they're cashed up. Well, that's the thing. They're cashed up. Corporations are okay.

It's governments. Balance sheets are good. It's governments that are barging in. Consumer and corporate balance sheets are good. That's why I struggle with the wheels completely falling off. Agree. And that's why I'm saying the labor market sheets are good. It's governments that are bargaining. Consumer and corporate balance sheets are good. That's why I struggle with the wheels completely falling off. Agree. And that's why I'm saying the labor market's still good. People have jobs, right?

So- What do we think about the markets still reacting to CPI prints that might have already peaked? Maybe they're not, but I am a little bit surprised that the market puked the way that it did on the inflationary. Or even today. I mean, look, inflation is sticky and very high and difficult, but it's not like we're accelerating still in producer price index. And actually, if you look at core and pull out a lot of the noise, it's like kind of stabilizing. Not that you want it to stabilize at these levels, you want it to fall, but I don't know. Are we getting that part right or wrong? I don't think there's a lot of conviction about longer-term commodity prices, which is something that I look at.

And if you look at how cheap the commodity stocks are, they're like – the stuff goes up and it goes down to zero. So I don't think the market is really fully pricing in higher for longer on commodities. Can I ask you, absent the invasion of Ukraine, probably we wouldn't be dealing with the energy component of the inflation issue. And agriculture too. And agriculture too. I own a stock that just went down 30% today because dairy prices are up 25%. Like absent that, would transitory, the word, be looked at as less stupid than it is now? Like, because I feel like the Fed was kind of there.

Like they were moving too slowly, obviously, but at least they had identified the problem. And then in February, when Russia invaded Ukraine, it like doubled or tripled the extent of the problem overnight. And it would be very hard for a Fed to plan for that. I think – but I think – look, we had two longer-term multi-year research theses about what was happening in the world at the end of last year. One is crypto is super interesting, but growth is ridiculously overvalued, right? And the other is that we are coming out of a 10-year bear market in commodities,

and we're going to be in a golden age of commodities for two reasons. ESG has twisted, if you will, the commodity demand mix. So we're buying more green metals and things like that. But we still, the companies have gotten much more capital discipline. And so it's a perfect setup. I mean, it's kind of a silly industry commodities, right? Because it's always mean reverting. But we tighten supply. Capital discipline is the problem, though. They should be out there drilling more. It was a great setup. We tighten supply and demand. The world economy keeps growing. So we were saying you're in a multi-year kind of secular, because of the energy transition, bullish cycle for commodities. So yes, Ukraine kind of secular because of the energy transition bullish cycle for commodities.

So yes, Ukraine kind of accelerated it, but I think we were there anyway. And I still think commodity stocks are cheap because I do think it's higher for longer. And they're paying out huge dividends, right? They're gushing cash. I think what's weird is I think they're pricing on some kind of political risk. Like someone goes down to Texas and says, this is not OK that you guys are making all this money. Well, Katie Porter and her whiteboard in Congress is making a lot of noise about, let me get this straight. The raw material to make gasoline is oil. That goes up X amount. Why aren't you just passing that along? Why are your profits also increasing 20%, 30%?

And I know there's a good answer for that and what she's doing is grandstanding, but that is going to get louder if it's going to cost you $5, $6 a gallon for an extended period of time. They can't keep those expanding profits without a lot of political unrest. What do you think about that? Yeah, no, that's exactly what I'm talking about. I think that's being priced in. That's keeping a lid on it. Otherwise, why else would they be so cheap? I mean, I know energy stocks are up. Like, I do look at the tape, right?

But still, like some of the base metals companies, I just think, you know, given the supply, forgetting politics, giving the supply-demand setup, which is multi-year, and you can't fix it. You can't spin up an LNG export facility in three days. Right. You know, it's not 3D printer.

It's not cloud computing. You can't just put more servers. Right. I'm with you. Right. So that's why I think it's a great multi-year setup. Now you have to just look at how things are priced. Would you still feel that way if Putin said tomorrow,

mission accomplished? Yes. You would? The biggest global risk is a China recession. Okay. And that's priced in, I think, over the last couple of weeks because China's in a recession. Yeah. I think stocks bottom when this chart bottoms. John, throw up the one from Bespoke. They're showing headline CPI has only been weaker than expected three times in the last 24 months.

That's wild. Meaning we keep coming in hotter than expected. And once this bottoms, stocks are going to rip. So this is showing that since it looks like 2020, headline CPI, wait, I don't understand what it's showing. It's showing headline CPI has only been weaker than expected three times in the last 24 months. That is such a weird thing to chart that way. Yeah. Isn't that strange? I understand what they're saying. So we're looking at 24-month periods, okay?

Obviously, 12 would be right in the middle. One out of every two, it's hotter or colder. Okay. So we're saying it's persistently coming in hotter than expected. Upside surprises to inflation. Yeah. But when you have a regime change in the markets, right? I mean, Barry's probably writing a book on this right now, right?

People are slow to adapt to the new regime. They're living in the old regime. I can tell you Barry's not writing a book right now. So I just said this, that when people touch a hot stove, they learn right away, instant feedback, I'm done. If you've bought the dip 10 times and on the 11th time, it doesn't work. You're like, oh, that's weird. Whatever. On the 12th time, what's it takes? You just showed me the chart where they don't get it. No, but I'm saying it takes you

until we're living this right now. People are still in denial. It takes you until the 15th time of it not working or the fifth time of it's not working where you're saying, holy shit, this is a different market. Your point is eventually those expectations will catch up to reality. We don't know how long it takes. But these estimates on CPI are going to get higher, and then the reality will fail to meet them at some point. But it could be a long time. Look, I think arguably, OK, the 10-year has gone to 3%. One of my colleagues thinks bonds rally from here.

First of all, this has been such a straight-up move in interest rates. It's wild. Just take a break. And if people are worried about recession in China or the U.S., they should come down. When are they going to buy bonds? I think that's a dangerous play because the other group, part of our research says it's going to be 4-plus percent on the 10-year

because you have 2% growth and 2% plus inflation. That's 4%. How do you stay less than 4%? Bonds caught a bid this week and they seem to be, they're not rallying. Barely, dude. I mean, barely. Barely. But they stopped doing that. They're flat. That's a heroic. Flat's the new one. Well, here, this is from Jason Zweig. Almost never has the US bond market lost as much money in the first four months as it has in the first four months of 2022. Long-term treasury bonds lost more than 18% this year through April 30th.

That surpasses the previous record of 17% in the 12 months ended March 1980. They stopped going down. Hold on. The broad bond market has performed worse so far in 2022 than in any complete year since 1790. That was a tough year.

Yeah, but 1791 was super bullish. Hold on. Back to 1842 when a deep depression approached rock bottom. So back then, bonds went down in the depression, which is something that you said. Okay. Bonds at 10-year at 3%. It seems to have backed off. I don't think three and a quarter anyone anyone would say, is the top that we'll see.

But it's nice that the buyers at some point came in. Because January, February, March, there were no buyers in sight. Or April. When you talk to people about the bond market, what do you try to make them understand? There's only one buyer. There's only one buyer. I got to yell at you? No, I get it.

There's only one buyer. No human being I met ever owned a treasury. Yeah, but what about the ETFs? It was only the Fed. It was the Fed was hoovering up these bonds. Let them get out of the market, and then you can talk to me about buyers. But what about – There are no buyers in IEI, in SHY, in –

Okay. They're not big. But I think everything prices off at treasuries. I agree with you. So let's get the Fed out of the markets, and then we can get some kind of transparency. Let's get them out so we can get them back in. Yes. They'll be back very quickly.

If they get out fully in June, I predict they're back in June. By the way, the 10-year's at 2.8, so it's coming down finally. Yeah, bullish. Yeah, bullish. What's the biggest misunderstanding that you find when people talk about the Fed's approach to doing rate hikes and shrinking the balance sheet simultaneously? That to me seems like there was no rush for 16 months, and now you have to do the whole thing in three months. What are we thinking? But they're going to do that. They're going to do 50 basis points twice at the same time as they start cutting all of their exposure to the bond market.

Is it necessary, do you think? What are people missing? I think people are missing this, how important their balance sheet actions are in the market. Okay. I mean, I said it a couple of times. So much emphasis on the rate. If there's one takeaway of today,

is that's happening in June. So nice to look at stocks every day, but what is the Fed doing in the fixed income markets? Will that be orderly? I think that's the news of the summer, if you will. What if it's not? How quickly do they come out and try to- They stop it. How fast? Oh, I think they do it really fast. I mean, that's – but I'm on one camp. Hey, the Fed seems to really hate Joe Biden because we used to say, oh, the Fed is political. But this Fed is not political. This Fed doesn't care what happens to him and he is dead in the midterms. I mean this might be the toughest midterm setup for any party.

The midterms are always tough if you're in the White House. But this is a really bad one. midterm setup for any party. The midterms are always tough if you're in the White House, but this is a really bad one. I think the Fed just doesn't want to go down in history books of the Fed as being the worst Fed ever, right? That they totally missed transitory. They've just missed it so badly. So they're really fighting for their own reputation. Janet Yellen was out today in Congress talking about a soft landing is, you know, no problem. We got this. She's been in both seats, one of the few people to be a Treasury secretary that was also leading the Fed. Should we have confidence that when she's saying that, that there's like something going on behind the scenes that we're not aware of and things will be okay? Or is she just another person saying her opinion?

aware of and things will be okay? Or is she just another person saying her opinion? No, I think that's their base case. If you define soft landing as unemployment, as jobs, they don't care about asset prices. Remember, they don't care about us as investors. So yeah, I think the labor market could adjust slowly enough as the liquidity is coming out of the system where the Fed has got rates to where they want and the labor market is still OK. And that's my definition of a soft landing. It could be really tough for investors, but that's possible. And then the Fed has ammo to come back into the markets if the economy does slow down, right? They can cut rates again, or they can start doing some bond market intervention. That's what they want to get.

They want to reload their ammo. Right now, they don't have ammo. This sounds like this is a progressive's dream come true, if they can look back at the end of the year and say, we beat the shit out of Wall Street, and employment is full. Like, this seems kind of, everyone's wages went up big.

Everyone can quit their job and get a new one. And the fat cats paid the price. I mean, it's- The one thing they don't understand, though, is the inflation impact on everyone's pocketbook. Say more. Well, just they- That's what they miscalculated politically. The reason they're so underwater is people can't stand paying $200 to fill up their-

I think they're more mad at that than almost anything going on right now based on the service. And it affects the pocketbook of the household. Everything is going up. And that's – like food. It's crazy. Okay. We're going to get into – what are we doing this – I just want to show one more chart.

Let's look at the share of CPI components with 6% plus year-over-year price growth. Holy moly, it's everything. It started in supply chain disruption, airlines, chips, and now it's just everything. Next chart, next chart, next chart, please. There it is. There are 95 components of CPI, and this is showing that 65 of them – No, 65%. 65% of the components have 6% or higher year-over-year growth price growth.

Even when prices were going up and the GFC was 40%. Not to oversimplify, but the one thing that matters is wages. Because wages – That's sticky. That's sticky. Agriculture, six months, you're going to have more wheat or whatever it is, or soy.

You know, that's fixable. You can't pay somebody a lower wage to do the same job. But once it gets into their mentality of I want a wage increase because my cost of living is going up, then they're passing on... You're not going to pay them less next year

when inflation comes down. Right. And you just get into that psychology and that's really what the Fed does not want. Do you think that's now irreversible? We're getting closer. I've been saying until the second half of this year, we won't know. They call this the wage price spiral. So you have to pay me more because my rent is more.

Right. And my rent is more because everyone else is being paid more too. Exactly. Right. And how do you get out of that? You need a recession to get out of that. You need Paul Volcker. Okay. We don't have Paul Volcker. We don't have paid more too. Exactly. Right. And how do you get out of that? You need a recession to get out of that. You need Paul Volcker. Okay.

We don't have Paul Volcker. We don't have Paul Volcker. Okay. Inverse ETFs. Fan? Not a fan? Inverse ETFs? Yeah.

Not a fan. Not a fan. Do you not like them for the same reason I don't like them? Because it's hard to make money in them? Yeah. Well, because the longer you hold them, the less of a chance, unless you nail a trend perfectly. But are they useful for some people, for hedge funds? Who uses these well, if anybody? Yeah, I think short-term traders. Okay. They have a place. Yeah, they have a place.

I'm really, I mean, obviously, right? We create financial products. And FINRA has come out with this proposed rule of further regulating complex products, which includes, by the way, target date funds and closed-end funds. And I think let the individual investor – we have individual investors in our ETFs that came from Wall Street that were prop traders. How can you tell them they can't trade complicated products? They're as sophisticated as anyone in the world. So I just think that's an artificial distinction to try to protect individual investors from themselves. You don't know who those individual investors are

unless you're going to start doing, you can only trade these things in accounts of accredited investors, which if you wanted to, you could do that. But then everyone would shriek, democratize finance. these things in accounts of accredited investors, which if you wanted to, you could do that. But then everyone would shriek, democratize finance. Let me lose my money like a man, right? Well, XIV didn't go very well. What are we saying about this?

Look at, John, throw up the chart of the SQQQ. This is the pro shares ultra short, just assets under management. Ultra short NASDAQ. Just an asset gathering machine. This is up from, it looks like, $500 million to $3 billion since 2018. At the start of the year, it started the year with, I don't know, a billion in this thing. Now it's at three. Does this change your mind at all? No.

Okay. I'm just kidding. I mean, this doesn't, obviously, but nothing ends well. And the fees, you didn't even put the revenue on here. Actually, the fees are like 90 basis points or something insane. Listen, it's a hell of a product if you catch the market trend perfectly and you know how to exit. Okay. Now, if you look at like TQQQ, the ultra pro, like the bullish one, it's 11 billion.

Really? $11. Can you show us your price of that? In a triple long NASDAQ? Yeah. What is the price of that? Zero? Well, it's at a 70% drawdown.

They should do a split. 70. They should do a reverse split. All right. Not a big fan of those. I don't blame you. I'm not either. The stock market is the economy for private investors. Ah, big fan of those. I don't blame you. I'm not either. The stock market is the economy

for private investors. Private companies. So now, so there's a big distinction here. Last week, we were talking with Matt Phillips saying that the stock market is not the economy. That might definitely be the case for this period that we're about to enter. But the stock market is the economy for private companies because they rely on their stock price to hire employees, to raise money. So I think the stock market in private companies is the economy. And AngelList did this thing this week about valuations that they're seeing. And we have not slowed down yet in an early stage. Throw up this chart. So seed from January to today, to April, went from an average of $20 million to $21 million. Series A went from $72 million to $75 million. B went from $283 million. There was a slowdown in B.

Now, at the later stage, you go, sure, valuations are definitely coming down. You invest in private companies, right? Yeah, in the crypto area. Are you having different conversations than you were a month ago or two months ago? Not yet. Not enough yet. It hasn't happened yet?

I mean, to me, again, 20 times revenue, Josh. I. I was throwing my hands up. We had follow on rights to company. I was like, that's a great company, but it's valued at $7 billion. But could I flip it on you? Let's say it was valued at five times revenue. Wouldn't you be like, what's wrong with you? Why doesn't anybody want you? You might not personally think that way, but wouldn't other funders look at that and say, these guys have no heat? Like, these guys have nothing going on? No. You don't think – you don't –

I think – look, I'm not an expert, but I think the private investing industry understands that there's ebbs and flows to valuations because they've all been around. And that's just true, right? There's a lot of VC money raised or VC money is scarce. And so I don't think so. Do you agree with Michael's premise though that the stock market almost acts like a thermostat and when it's cooling off,

you're going to ultimately see that same temperature take hold like all down the line? Yeah. And probably it hits pre-seed last because it's like the caboose. It's like, right? But it's not vice versa. The startup market doesn't dictate stock market value.

Well, because let's see, there's no revenue multiples. There's no revenue. It's an idea. Yeah. Okay. But like the question is, is there a mechanism for equilibrating between the two markets? And I don't really think there is.

The IPO process is the mechanism. Yeah, but that's really slow, right? But I mean, should a VC, right, Sequoia, take one of these tech companies private? They don't do that. That's not their shtick, right? So that's why you have these disconnects. Oh, back and forth, you mean? Yeah. I mean, if I've got a lot of money as a VC, the private market's expensive, I want to buy cheap, right? The public markets are cheap, I go in the public markets.

I feel like we've seen Silver Lake do things like take Dell off the market. Yeah, right. But we're not seeing a ton of that, and it's not for the pure growth. And that's private equity. The company's going through transitions like Dell was. Right. So, but valuations are back at pre-pandemic levels for venture capital index.

I don't know if this is calculated, but this is from a Polish chief economist. Wait. I'm forgetting his name. Refinitiv Venture Capital Index. The index, I guess, whatever companies in there are, all the venture-backed startups. Yeah, it's designed to measure, what does this say?

The value of the US-based venture capital private company universe in which venture capital funds invest. So, okay, they're back to pre-pandemic. This looks exactly like the NASDAQ. I was about to say, the Russell 2000 is back to pre-pandemic highs. It stands to reason that venture would be too. Why not? Right. And this is more risky than the Russell. That's interesting data. I mean, I look, I focus more on blockchain and there there's- There's no slowdown. Well, maybe now there will be. That's interesting data. I mean, I look, I focus more on blockchain and there there's- There's no slowdown. Well, maybe now there will be. It's not that chart. That's not that chart. It's come down, but not to pre-pandemic because there's

so much money that's been raised in that ecosystem, right? So they have so much dry powder. I'm glad you mentioned that. How much dry powder do they really have? Because I'm reading about net worths of the billionaire founders of the biggest companies in crypto being like cut in half in the last two months. And I know it's not permanent. And obviously we're going to moon again. But like right now, I don't know that there's as much dry powder at like, look, you raise a fund, you raise a fund. Then you go make a capital call. Is everybody definitely in? And how much Apple do they have to sell in order to really be in? So that's going to affect blockchain and non-blockchain startups alike.

But I don't feel like it would be different. What do you think about that? Yeah, I think you're right. So you're bearish now. No, I'm just kidding. I'm just kidding. No, no. So, all right.

There was an article. We hope. We hope. That's just part of the adjustment mechanism for making these companies cheaper. Well, I was going to say, you'm just kidding. I'm just kidding. No, no. So, all right. There was an article. We hope. We hope. That's just part of the adjustment mechanism for making these companies cheaper. Right. You're a buyer. But all VCs, remember, are buyers too. They don't deploy.

You can't deploy. They raise $2 billion. First of all, to your point, you started a $2 billion fund on January 1st. You're only taking a percent of that from your investors, right? And you're only spending it. I mean, they did accelerate the spend during the pandemic, I think, a lot of the growth investors I know, but you can still slow it down. So, you know, we have a mutual friend, Howard Linson, right? And he and I give a little ham and egg talk together in March. And I was like, Mr. Cash and Mr. Cash. He was like, I sat on my hands last year.

Right. And now he's rubbing his hands because he wants to start deploying capital. So they do have that ability to spread it out. So he's happy. Shout out to Howard. He actually, he was on the show and he said exactly what you said. He said, like, I'm not in any rush. My LPs understand that I can't be pushed to give somebody money just because everyone else is doing it. He's like, I mean, he's seasoned. He's not 27. He's 87. So that makes perfect sense. So, all right.

We're going to do the SoftBank thing really quickly. One of the price setters for venture capital and growth tech, I mean, we have to say what it is. Masayoshi Son, SoftBank reported a $20 billion loss for the first quarter, which is like a lot of money. And I understand it's mostly his. So what?

It's not all his. Here's his quote. In terms of personality, I do like to play offense. We know. But with the pandemonium of COVID-19 and war in Ukraine, he understands that now is the time to play defense. Quote – Too late.

When it rains – no, he slowed down in fairness like two weeks ago. He said, quote, when it rains, you open an umbrella. OK. If Masayoshi Son's umbrella is open, that's like – I'm not saying it's a signal for bottom. I'm just saying like that is very indicative that times have changed and probably aren't going to go back for quite a while. Do you think that's like a fair statement? Because that's one of the biggest risk takers in the world. I think, A, it's, as Michael says, late. And second of all, I think that's just because he doesn't have a lot of money, right? Doesn't he make a lot of money in Alibaba or

something like that? Tons. So have you looked at Alibaba stock recently? Yeah. He doesn't have any money to spend. Of course, he's not spending money. Tiger, same thing. Their biggest winner was JD.com. Yeah. Same thing. These guys are getting crushed.

Sun said SoftBank's safe driving in recent months has solidified its financial position. He did a slide deck, and the first slide slide was questions about SoftBank? He explained in a slide the company has allocated 2.9 trillion yen of cash or roughly twice the 1.3 trillion yen due for bond redemptions in fiscal 22 and 23. scaled back investments dramatically, doling out only $2.5 billion in January to March, down from $10.4 billion in the fourth quarter and $33 billion in one quarter in fiscal 2018. So he still put $2.5 billion out on the street in the first quarter. So I guess that's slowing down. For him. That doesn't sound like an umbrella.

2021 was the outlier. Anybody could get funded at any valuation. That was the outlier. I think that we – I am experiencing my version of the dot-com bubble bursting. I'm not saying – not that the economy is going to go there, but that's what this is. What else do you call this? Where Coinbase – all of these names are literally down 70 percent going into earnings, and they fall 20 percent after hours. That's what this is. But I don't think that this is going to be 2002. So Dan Primack at Axios wrote – what a reason why it's not going to be 2002. He said,

the internet tech was still fairly new in 2002. So the crash caused many potential founders and investors to question whether launching a new company even made sense. Thus, a major deal flow deterioration for VC funds. Today, there are no such doubts. So I think we can see a material slowdown, but I don't know that this is going to stop people from investing in SaaS companies. Nobody thinks the internet's going right. Or fintech or crypto. But you know, so this is what I talked with Howard about too, you know, this concept of zero to one, which is, you know, getting a startup going. I like to focus on one to two. It goes back to the wide moat ETF concept. You want to have a company that's more than one product. So Robinhood was cheap trading or zero-cost trading.

That's great. Okay, get a lot of customers. Then what? That's not a company. That's the zero to one. So how do you give your customers other products, other services that give you a competitive pricing mode. And that's where Robinhood is.

That's where Coinbase is. In fact, you almost know that Coinbase is going to get decreasing revenue from their customers just because there's going to be more competition. But even if you can do that, it doesn't guarantee success because I think SoftBank, excuse me, SoFi is that version of Robinhood where they say, okay, we have like people that were helping with student loans. Let's do credit cards. Let's do bank. Oh, you know, we'll get a bank charter. Let's do trading. Yeah, we'll do crypto. Let's do automated asset management. They're bolting all these things on and they do have a growing customer base.

Wall Street doesn't give a shit. That's a $4 stock. Because I would argue they're desperately, which they should be doing, desperately trying to get from one to two. But it's not easy is my point. Like he focuses on zero to one is hard. I mean one to two is hard. Yeah. Do you ever look at any of these fintechs? Do you ever look at any of these fintechs and say there's too many of them? So I think that's kind of a problem right now.

There's a lot of them that do the same thing and they're spending tons of money on marketing and customer acquisition. And it's not clear that that's good for anyone. But like one of my colleagues calls it the race to zero. Yeah. Right, because like, yeah, what is... How many buy now, pay later companies do we need?

Yeah, there's four of them. It seems like two, two. How many, this is not FinTech, but DraftKings, Caesars, FanDuel, Penn Gaming, how many do we need? And I think there was, investors were willing to subsidize growth, growth, growth, lose money, lose money, lose money.

When money doesn't cost anything, who gives a shit? Pay me back today, pay me back in 10 years, what's the difference? It's over. Do you see a lot of me too's in the blockchain space, similarly to the vanilla fintechs? You know, the blockchain to me, you know, this is not a direct answer, but it's still first inning.

And the second thought that I wanted to add to this fintech conversation is blockchain can be like the yeast inside. Like you can use the technology, but it doesn't have to be like it could be wrapped within something else. Right. So like you could have a music streaming company that uses blockchain like Audius does and no one knows and no one cares. Yeah.

Right? So I think fintechs will evolve and some of them will use crypto, but more than just crypto trading, they might use the technology, but no one really cares. Okay. So it's too early to say like it's too crowded in any one space and you don't really know who's going to end up doing what. What are you betting on?

Like people for the most part in that space? Because you're not like looking at two different algorithms and saying this one's right. You got to be betting on jockeys, I feel like. Well, software development teams, right? They can solve a problem that needs to be solved for a longer period of time. Okay. What's this? Okay.

Not what they said. All right. The NFIB, Small Business Outlook. problem that needs to be solved for a longer period of time. Okay. What's this? Okay. Okay. Not what they said. All right. The NFIB, Small Business Outlook, general marketing conditions or general business conditions, I should say. On screen. Fell off a freaking cliff. Nobody is bullish.

John, you're getting fast. I'm just saying. Nobody is bullish. What is this? Small Business Outlook, general business conditions. Well, because they're getting crushed. Yeah. Right?

I get it. This is the worst in 17 years? But – Is that what this is saying? Yeah. This is worse than the financial crisis? Who are they calling? Small businesses.

All right. Yeah, I mean, it's like a sentiment indicator. So you know what? We don't know what's really driving their thinking. It could just be I can't hire enough people, and I have to pay them too much. Yeah, I mean it's like a sentiment indicator. So you know what? We don't know what's really driving their thinking. It could just be I can't hire enough people and I have to pay them too much. Yeah. Right? So it could just be the labor market that we're talking about.

It could be, you know what? I looked at my brokerage account and it shrunk and so I'm in a bad mood, right? I don't know. It's sort of all these things are wrapped up. You call one of these people on a landline in the middle of the day, guys running a dry cleaner, and you're like asking questions about how do you feel? How do I feel? Like my cost of everything is up. Everyone quit on me.

My stock portfolio looks like trash. OK. But at the same time, look what people are spending. And I don't know that this is just inflation. I'm sure that some of it is that things get more expensive. Lizanne Saunders tweeted, consumer credit ballooned in March by most on record. $52 billion versus 25 estimated.

Bad. Wait, what is this? I'm sorry, I'm so slow. This is consumer credit. Bad. Why? It's too much, right? Bad.

To me, that's a sign of my gas prices are too high. I need to leave a higher balance on my credit card. The economy is overheating? No, no, no. Oh, the opposite. My cost of living. I was not squeezed at all for the last two years because we got stimmy checks and I had a job. And now my household costs are going up, right?

And so I'm not paying my gas – my car – gasoline bill with cash. So people are outsourcing it. I'm putting half of it on my credit card. They're outsourcing it to their credit card. Yeah, and that's like a sign of weakness. I had this debate with somebody. She's like – People have different views.

This is how I look at this. She's like, the consumer is so strong. Look how they're spending. I'm like, they're on a treadmill. They have no choice. They don't want to be spending like this. That's what it costs now. I don't know that we're reading that correctly.

To just look at consumer spending absent the context of prices is crazy to me. I think that's a really important point. If people are shifting things to credit cards that they were using cash for, that's not great. It's not a panic button, but yeah, I completely agree with you. Prior to a week ago, I was really surprised with the resiliency in Bitcoin and Ethereum relative to the overall market. You would think that if the Nasdaq's down 25, I don't know, I would think that like ETH is down 40. And that wasn't happening. Well, now it is. And I wonder, like, obviously nobody knows how systemic this Terra Luna breakdown is going to be.

And you know all about stablecoins. You wrote a piece in Barron's a couple of months ago. What the hell is going on? Well, I certainly don't know everything. So, and it's hard to keep up in crypto. So let's just talk about what happened and then maybe what the implications are. So Terra Luna is a – this is, I was told, overly simplistic description. But it's an algorithmic stablecoin, which put it a different way. There's not a dollar of assets sitting behind the dollar of stablecoin for UST, right?

There is for Tether. There is for the other biggest. No, it is. Okay. I will guarantee you. No, I pretty much know it. I've seen the accounts. So I'm less worried about that.

But this was always a trust kind of game that the economic system, the reserve currency, would kind of bail out that link to the dollar. So it's like a money market fund, not having any assets behind it, just kind of like trust me. Trust the computer. Well, none of us trust computers.

The algorithm in question, they're relying on market arbitrage so that if one goes up too much, the other one will sell it and buy it. And they're relying on buyers and sellers basically to balance that, right? Right. Okay, go on. But let's leave that mechanism aside.

And I think Matt Levine and a lot of other people, ourselves included, we're pretty skeptical about this. I'm too confused to be skeptical. I can't figure it out to even say I'm a skeptic. So I just, all right, go ahead. I'm a simplistic guy. Yeah. I can't figure it out to even say I'm a skeptic. So I just – all right. Go ahead. I'm a simplistic guy. I want assets.

I want equity in a firm that does trading. I like balance sheets. John, especially when the return is zero. You're telling me my best case is I get my dollar back. And so what they were offering is yields, right? Anchor the Reserve. It was offering yields of close to 20%. Does that make any sense to you?

No. No. I mean, they're not so smart. When you go to Anchor, I mean, it's almost too much. I feel bad because a lot of people are getting burned here, but what the f*** is this?

So on Anchor, this is where almost all of the UST trading takes place. And they provide 20% APY, or they did. And when you go into this, it says better savings. And it's did. And when you go into this, it says better savings and it's sad. And I forget who wrote this, but I'm going to steal somebody's point is that a Ponzi scheme that promises stability-

Like a cash substitute. Is much, much, much more dangerous than a Ponzi that promises a big return on your investment. Because people understand that if there's high reward, there's probably risk. If the illusion of stability is way more predatory, and I'm not saying that this was that specifically, I'm just saying generally speaking,

the illusion of stability is dangerous. But on its face, I'm giving you 19% yield. That's like so, that's such a ridiculous claim. Well, we know better. Well, we would have been less egregious to say we're giving you 4% yields and the prevailing money market fund is 50 basis points. Like to me, that's every bit as egregious. The regulators don't give a shit.

They're going to look at either one and say this is bad. Well, now they do. That's fine. But listen, anyway, my point is that there was billions of dollars of assets trying to earn a yield. 18. You're right. And they just got hair clipped like 90%, right? billions of dollars of assets trying to earn a yield. 18. Right? And they just got hair clipped like 90%, right? And so there's pain.

And whether it was in crypto hedge funds or market makers, we don't know, I think, yet who has really suffered that pain. So the real question is, there's ecosystem liquidation, right? That's what's caused the fall in prices because you sell what you have to sell. And it also makes you second guess everything related to it. Yep. So if you're-

Not to crypto. I don't think to people in the crypto world. Like this was like a Dogecoin kind of thing. But to newcomers. They knew it was a joke. A lot of the skeptics, like I would say very few people in the crypto world really 100% said, but the whole

game was you get in early in these things, you earn the outsides, and then you get out before the other. But what percentage of people in crypto are crypto natives? For people that are outside, for people that only see headlines, this just makes them even more skeptical. I don't mean to be overly optimistic here, but I will say that I don't think there are a lot of, I'll call it traditional investors that would be sucked into this. Maybe they're kids. Sucked into what, Luna? Into this kind of- Dude, Novogratz got a tattoo of Luna on his shoulder recently. No, I know.

So he can't be the only one. Well, there was a lot of big funds that were in here. I'm just saying, no, but he, again, is my point, is a crypto native. But he's not. He's Fortress Investment Group, and you know that. He acts like a crypto native. He dresses like it. But he's a finance guy, a smart guy.

But Galaxy is crypto. I mean, they're the biggest crypto investment bank. I understand, but let's not call him a crypto native. He wouldn't call himself that. You don't think so? I mean, I don't not call him a crypto native. He wouldn't call himself that. You don't think so? I mean, I don't. He's educated in crypto, right? He's smarter than a lot of crypto natives.

I'm not saying he's not sophisticated. I'm just saying he's been in real markets with hedge fund, macro trades. Like he's done real shit. He's not a guy that woke up two years ago and started trading coins. Right. So, you know. Listen, I guess my, in the crypto ecosystem, there's not a lot of public transparency because none of these firms,

whether the market makers or whatever, are public. We don't know what their books look like. Yeah, that's what I like about it. We know. I mean, VanEck knows a little because we've invested with some of them, but like in general, even we don't have a full picture. So the question is,

is there some kind of cascading or systemic risk to the system? We're having systemic liquidation, but that doesn't really mean that any of the anchor players in the ecosystem blow up. But that is – That's the risk. That's what we have to see. Like, frankly, it's okay if a $10 billion hedge fund loses a billion dollars on UST, right? That's not systemic, right? Right.

Because they're diversified enough. Systemic would be we find out JP Morgan traders are doing something, and then all of a sudden there's an uproar. I don't want to name names. We're all making that up. No, no, no. But I mean, within the ecosystem, right? But there are some leverage providers in the system.

Berkshire Hathaway. You know, Buffett, sure. No, I mean, in the crypto ecosystem. You wrote about stable coins and I read your piece today, but you did this in- It's brilliant, right? No, but it was very apropos.

I guess it was very prescient. There's not a good regulatory regime around these things. And that's your point. You were saying these look and act very much like money market funds. Why are the regulators giving such confusing guidance? And I'm just going to quote you. You're very quotable.

You said, this is February, but even though stable coins strongly resemble funds, there is no regulatory consensus to treat them as funds. A stable coin paper issued by the US.S. government's President's Working Group on Financial Markets in November reflected the regulatory confusion and made some odd recommendations. What do you think should be happening here? I think the SEC – so take Circle, right, which has a stablecoin, USDC, that is backed by Treasury securities, right?

It's just like an ETF money market fund. In other words, for every dollar they issue of stablecoin, there's stuff behind it. Why doesn't the SEC just say, look, it looks like an ETF. Let's just call them up and say, why don't you guys just file and we'll give you the OK if they want to be pro-innovation. But that way they can take a peek at whether there is these assets. Like everyone, we were having this back and forth about Tether before.

Okay, they're offshore. So that's probably not going to happen. But for the onshore stablecoin providers, why make this so hard? Why make it a fight between banking regulators? The SEC should just say, I don't care. You're close enough to an ETF.

Come on in. Let's look at your collateral. It would have to be, you don't need a lot of regulation around this. You'd have to have – Good close. Good close. Finally. We go at it closer to the highs and the lows.

We got some buying. What day is it? Thursday? Oh, we're bucking the trend. We're bucking that chart. I'm super bullish now. So you don't think that conversation has ever happened yet? You don't think like the SEC has gone to some of these stable coins and say, we think you're a money market fund or close enough. Let's talk.

They haven't greenlit them. They haven't said like, I will let you do what you – I will give you the exemptions to the securities laws because remember ETFs always needed an exemption. They should just say, I will publicly give you an exemption if you come on in here and register as a fund. And then you will have to have a big four accounting firm look at your assets standing behind your stable.

Those are traditional stable coins. Remember, this whole Lunaterra thing, that was a very different structure. That was kind of this more mathematical. Okay, USDC is, to all of our knowledge, backed by actual collateral. Yes. So in theory, if everybody wanted to take their money out of Circle, it would be fine.

They could get all their money back. Yes, same with Tether. Okay. What do you think will happen in the wake of this? Because you know that Gensler is monitoring this stuff. He's very hands-on with this stuff. So what do you think is the result? I mean, look, the founder of Terraluna, Do Kwon, is kind of a wild child anyway, right? And as I said, a lot of people, he already,

I believe the rumor is he was at a conference in New York and got served a subpoena while he was on stage. So the regulators are over that. The regulators are all over that one, I think, and they didn't like it and it's offshore and they can't do anything about the offshore stuff. What I'm saying is if you green light onshore stuff and nobody will need to use that. Right.

Oh, I love it. Yeah. I mean, or at least, at least in your, but isn't this the same thing? But the problem is the sec needs to fight against the banking regulators.

Yeah. And I was thinking this morning that this event, while maybe jarring, is hardly shocking and has not shaken my conviction that crypto will be massive in the future and that Bitcoin will at some point be at 100,000. I think that's probably going to happen. And I was thinking, like, what could cause me to change my opinion on this? I don't know because I don't know enough about it. What could cause you to question your conviction about crypto being bigger in the future than it is today? What would have to happen? I feel like you're more blockchain than crypto. Well, whatever.

First of all, I'm definitely pro-Bitcoin in any scenario, which is I just think Bitcoin is going to be a competitor to gold. And I have higher price targets than you. But the same thesis, which is it just think Bitcoin is going to be a competitor to gold. And I have higher price targets than you. But the same thesis, which is it's being adopted. I don't know why central banks don't buy it, right, as a store of value. Look at what it's surviving. And it's acting. That's the cool thing about Bitcoin. My point about Bitcoin is Bitcoin isn't one thing.

It's software, and it's maturing as an asset. It's way different than it was five years ago. I mean, last year, the biggest country pulled the plug on Bitcoin mining and the network survived. Like no one had to call up anyone. The algorithm fixed itself, the difficulty rate adjusted and boom. It's uncillable. It was uncillable. Anything you want to say about it, you have to admit it should have died 10 f***ing times in the last 10 years and it will not. I mean, Terra Luna was buying Bitcoin as its reserve currency. If Bitcoin went to $10,000, would you flinch?

We're at $28,000 right now. No. No. I mean, I've been wrong because I said as part of this maturation process, you're going to have 50% drawdowns, not 90%. You might flinch. Not as a baller. No, no, no. No, no, no.

But let me finish, right? So when I said it used to be 90%, that's what you shouldn't be surprised. I thought that there would be more institutional stepping in right around a little bit higher than we are. So did I. But it's close. So did I. It's close.

So we'll see. I mean, if it goes to lower 20s, then I was flat out. Like, I misunderstood. One thing it's to lower 20s, then I was flat out like I misunderstood. One thing it's not doing, though, let's be honest. It's not giving you non-correlated return stream versus investing in any other technology. And it is definitely not hedging inflation. So you mentioned in the same breath as gold, most of the smart people I end up agreeing with do the same thing. Myself, I try to do that. I try to think of it that way. But it's not.

And you're one of the foremost gold fund sponsors. You're a firm. So you know a lot more about that than I do. Well, did gold hedge inflation in this current environment? No. Not super well. I mean, both of them hit all-time highs last year. So if you took a step back and I told you inflation is now hitting the US and both these assets hit all-time highs, you'd be like, oh, they're doing what they're supposed to.

You just lost all the 2021 performance. But Josh looks at the markets every single day and then correlations. No, no, no. Bitcoin is flat. Bitcoin lost all of its 2021 performance as of this morning. Do you know that? So maybe it started to hedge inflation, but it has not finished the job. You know what's the best inflation hedge? The dollar.

What the hell is happening? How is this possible? The dollar's at a 20-year high. That's pretty good inflation. The dollar is weakening and strengthening. So what do you tell people the difference between Bitcoin and gold in recent times? How do you frame that for people? Well, like I was saying, Bitcoin is a maturing asset. It's not like gold. Gold gold is low vol. We know what it is. We know what it is. There's no uncertainty about what gold is, right?

Bitcoin is just – it's being tested. It's still being tested. It could be outlawed in the United States easily. Mining could be outlawed, so Bitcoin mining. So I just think it's evolving, Josh. Don't you think the industry throws around enough money for politicians now that outlawing it is probably impossible? I think it's physically impossible, but no, I don't say never. Okay.

What – My trivia fact, VanEck started the first gold fund in 1968 when gold was pegged at $35 an ounce. Wow. That's my dad. And why did it invest in gold mining shares as opposed to buying gold bullion? Because it was illegal to buy gold bullion back then. I did know that.

Nixon made it illegal. Remember you had to buy... No, FDR. Oh, FDR did. Yeah. What did Nixon do? He took us off the gold standard. Yeah, he reversed that. He allowed had to buy? No, FDR. FDR did. Yeah. What did Nixon do? He took us off the gold standard. He reversed that. He allowed us to buy gold. FDR made it so that a person couldn't have gold. But his treasury secretary had a gold coin collection so you could buy coins. So what

Americans bought, Krugerrands and Maple Leafs, right? Until Nixon allowed the buying of gold. What are Krugerrands and Maple Leafs? And then everyone bought gold through futures contracts. So every Merrill Lynch office, they had a futures principal and everyone had the futures license. And then we had gold bullion ETFs. I just like to talk about this market history, right? Because it's just interesting. I don't know it at all.

So Bitcoin is evolving too, right? It's just evolving. And it takes decades. It'll take two decades. I'm not worried about its correlation to the NASDAQ in 2022. I don't care. If I ask you a question that probably a lot of people ask their financial advisors or I'm sure they come up to you and they say, is Bitcoin going to get bigger than gold? Is that possible?

Like what percentage of gold would Bitcoin siphon away as, I don't even want to say store value right now. You probably think it's inevitable, right? I think it's happening. My base case is 250,000 Bitcoin, which is basically half the market cap of gold. How could it not do that? But does gold do nothing while that happens? I think it has a drag on it. I think gold has underperformed the last five years because of that. Yeah, 100%. So it's the millennial gold and they don't care about – Correct. That it's the 5,000-year history means nothing.

Correct. This is people that are digital natives. These are people that grew up with an iPhone in their crib. Yeah, or if you're stuck in Ukraine, would you rather walk away with your Bitcoin or would you rather have to carry gold around? What's your favorite shit coin for tomorrow? What do we buy? Can you put a buy rack on an altcoin for the audience?

But wait, hold on. For real, what do you feel about Ethereum? Well, so as a house, we're really into smart contracts. They call layer one, right? The stuff that runs all these databases because whether it's NFTs or DeFFi, they have to run on a blockchain. So that's layer one. So, I mean, Ethereum has been an unbelievable champ until today, but it's outperformed absolutely everything.

And smart contracts, we've created all these different indices and stuff, but smart contracts have way outperformed the metaverse tokens or the infrastructure tokens or the DeFi tokens over the last 12 months. Could you picture? That's what I'd buy. Could you picture? Because they have to, one of them has to be a winner. And I also would buy a basket. Like, it's so early.

We just don't know what's going to have to happen with Ethereum. You know, I mean, it's the go-to right now, but. You have a $65 billion asset management firm, right? Ish? Yeah. Okay. I know it's up and down. Could you envision like three years from now, having multiple parts of your firm operating on a blockchain and having, like taking efficiencies by, people joke around, tokenizing some aspect of what you do at the product level or even taking some of the inner workings of the firm and moving them to some sort of an open ledger as opposed to Oracle or whatever you run the business on now. Like how do you feel about the utility?

That's how I see the industry evolving. So can you tell us more about that? Can I give you a little bit of a longer answer? Yes. Okay. So when I came into the business, right, when I was a kid, Mutual Funds, you know, it was a mutual fund company. At the end of the day or in the afternoon, you take orders, right? And if you had to buy, it was a blue ticket that you'd write the shares down. I wrote blue tickets. Right? And then it was a sales red. And you'd add all those up on a, you know, manually. And at the end of the day, you'd say, oh, Merrill bought X shares of our gold funds, right?

So you call Merrill and say, oh, you bought X shares. And he goes, oh, no, it was Y shares. And you go like, all right, let's go through every transaction, right? So Wall Street started going crazy in the 60s and 70s. They had to automate that. So they moved that system to computers. And what would you do? You just automate the ticket system, right?

That's not so super efficient. So, you know, now everything wants to trade digitally, right? And it will be tokenized. I think that's the world that we're moving towards. And why not just have straight through processing and instant trade? Like if I sell Apple shares, like why do I need to wait two days for the trade to settle? That's a replication of the old days. That seems inevitable, right? That's what I'm saying. That's inevitable to me. And so, you know, it's up to the regulators to what extent they allow that, right?

Because they can slow down that trend. Well, here's a light-up question. Why do we need blockchain for instant settlement? What solution does that offer that we can't do right now? I think that's why I call it the yeast inside. It's kind of like a mixture of things. But what blockchain enables is just to go around the existing gatekeepers so that if we could figure out the technology, we could set up an exchange and trade tokenized Apple shares. We don't have to go through Merrill Lynch and require Merrill Lynch's mainframe to be programmed or NASDAQ, right?

Isn't DTC the problem there? Clearing, yes. Clearing and settlement is an issue. But, like, again, you have a ledger. Yeah. Right? I mean, there are – it gives us the technology to get around the existing players. That's the big thing.

Look at payments. Are Visa and MasterCard going away? Probably not. They're just going to adapt like crazy to a world of blockchain. But blockchain allows the creation of decentralized finance apps to go around them if they want. MasterCard is making all kinds of investments in, quote, the blockchain. What they're doing is getting an early look at their future disruptors and getting an equity stake. And they'll pay for patents if they have to.

But in the end, they're not going to let themselves be cannibalized by someone else. They'll cannibalize their own business. So is there a consortium of large asset managers like yours that are talking about, hey, just for fun, let's try to settle a few trades amongst each other on a blockchain and see if the world blows up. Are there experiments like that underway that are serious? Yes. But you can't divulge any details? No, no, I'm not being secretive, but I wouldn't say that it's being led by asset managers. I'd say they're startup.

Let's call it those two categories. One is throw the old system out. I'm FTX. I'm building it all new. And I'm going to, on my new system, I want to get old system out. I'm FTX. I'm building it all new. And I'm going to, on my new system, I want to get regulatory approval, but I'm just doing it totally modern. And I don't want to get into the why their system is better, but they say they have a better way of trading, right? And lower risk and lower friction and everything like that. And then there's the other group that says, you know, I'm going to automate the existing system better. But that's so slow, right? Like you said, let's try five trades.

Let's do it with a fund with $10 million as opposed to a billion. And it's just like, oh, my God. Whereas look at like the blockchain just moves so much faster. Look at NFTs last year. It's just like, boom. It's like wildfire. You and I have a friend in common, Rick Edelman. I was talking to him this week about his new crypto book. He was saying he thinks ETFs are going to be tokens and there's no benefit to have them as shares.

And so I was like, well, what's the difference? Like why would that be good? Why isn't the way it works now fine? So I wanted to ask you about that as an ETF provider. Yeah. I mean certainly I live in fear of disruption. So the tokenization of ETFs and things like that. But I tell you, what is the magic of an ETF provider?

I think it's liquidity. Why is GDX so awesome? I mean, or pick an ETF. GDX is more liquid than the underlying gold mining shares, right? In a bear market, God help you if you want to trade a gold company, right? A real bear, not just an equity bear market, but a bear market for gold mining shares. GDX trades like water. So the thing about the crypto ecosystem, it doesn't solve for liquidity.

Just because I can put a computer code and add a whole bunch of securities together, that doesn't mean the spreads are going to be tight. I mean, the irony of the crypto digital asset system, which used to be several trillion dollars and is now, what, maybe one trillion, is it claims it's efficient. It's not efficient at all. Everything is harder. No, spreads, specifically spreads and liquidity are so wide. Why do these companies like FTX mint money? It's because you're buying Bitcoin in Japan and selling it in Hong Kong and making 20%. Not 20 basis points, not two basis points, but 20%. What's happening? I mean, this is several years ago, right? But that's where

the money is being made with the trading firm. So anyway, I'm sorry I'm giving a rant here. No, but I was going to say that's why you see non-crypto native trading firms. Citadel. It's a honeypot. Citadel just got in. I mean, what are we doing here? We should go and start a trading firm at Crypto. Well, they're slitting each other's throats

for half a penny in Chicago, in New York. Meanwhile, there are 10% and 20% spreads you could drive a truck through daily in a thousand different coins and protocols. Right. So ETFs are successful if they work hand in hand with market makers to provide really efficient markets, whether people are buying or selling. I'm as happy if people can unload half a billion dollars of one of our ETFs efficiently because I know they'll come back, right? That's the service we're providing.

And so I'm a little less, I sleep better at night in crypto and ETFs being available and sort of blockchain because I know that people still need to provide liquidity. How would it help you if, let's say we talked about your top five ETFs. If one of them, you tokenized it and all of a sudden a whole ecosystem sprang up to trade ETFs, how would that – would it benefit you at all? Or it's just – it's a new wrapper for the buyers and sellers and you're agnostic?

I don't think – for traditional securities, I'm not sure it would help us that much. I think the promise – Get a lot more regulatory visits. The promise for asset managers is token – you can tokenize so many asset classes. I mean this is the promise. I don't know if it will happen. Well, also if you tokenize – Tokenize real estate, fractionalize art.

So I can do all these kind of ETFs that you can't do today. But then you're not beholden to the custodians. No more platform fees potentially. You'll pay new platform fees to somebody else. No, there will be a custody solution. There needs to be third-party safekeeping and all that kind of stuff. It has yet to be worked out. All right, before we go into favorites and wrap up, we cannot not talk about oil and gas. All right, let's make this quick. So there's a few... Oh, this is from you guys. We stole this from you. We didn't steal it, we borrowed it.

We're looking at free cash flow yield over the last 12 months. And I don't know. Let's throw the next chart up. I don't know how unusual it is to see E&P names at the top. Next chart, please. I assume that it is unusual. We've got like 70% free cash flow yields. What's going on?

What's the story here? The companies became way more capital disciplined. And now the commodities have ripped, right ripped and they're just gushing cash. Are these going to be back into – This is totally flipped. These EMPs used to remember the whole argument was shale was great, then shale was horrible because you're just burning cash. You're getting all your production in three years and you're not returning any money to shareholders. And now after several years, they became disciplined. And this is the great story.

This is why the politicians might be attacking. Have you seen an uptick in trading in OIH or people like young people now discovering the joys of trading energy stocks that actually go up? You know, it's funny, Josh. What surprised me is that there was definitely – I thought energy stocks might be the tobacco stocks of the world, right, because of this ESG overhaul. And it's amazing how fast American investors went into energy companies this year.

Because no one – People just talk about ESG. They don't really care about it. In the US, I think. We have a big European operation. I think it's very different there. It's not really a mystery. If you look at the top 30

names in the S&P 500 year-to-date, they're basically all energy stocks. Why don't you launch more products there? There's probably energy. We like what we have. There's nothing new to do with oil and gas stocks, you don't think? No. We launched a green metals ETF at the end of last year.

What about ARK for oil? Like energy innovation. No, I mean like what about like a hot shit startup oil company thing? We do have an ag tech ETF that we launched at the end of last year. Look at these names. So top names year to date. Occidental, Valero, Cotera, Marathon, Halliburton, Mosaic, whatever. Hess, Devon, Marathon, APA, Exxon, Chevron, Pioneer, Conoco.

I'm not just reading the energy. Those are the top performing stocks in this year to date. It's all energy. I can keep going. EOG, Baker Hughes, it's all- Schlumberger, Phillips, it's all energy. Everyone. You guys raise a lot of money.

Someone told me this morning the biggest market cap company in the world. Oh, Aramco. Yeah, that makes sense. They heard it from you probably. That's not very liquid from what I hear. From what I hear. And the conference calls aren't that much fun. So all-time highs. All-time highs

in assets for OIH. 3.4 billion as of today. This thing was one and a half pre-pandemic, got as low as, holy cow, it got low. It got low. You know, someone on this floor called me about OAH. Really? In the spring of 2020, I said it was a little too early. It got to like 300 million and now it's 10x that.

Holy cow. That's the game though. That's how it works. You don't know what's going to be hot when. You need to have the best possible product in place so that when people discover a sector, an asset class, you could say, hey, we got something for that. Like that's the game, right? And they say they don't ring the bell in this industry. They do.

I mean when oil futures went to zero. Yeah. Greatest buying opportunity of all time. Yeah. Hard to pull a trigger on that trade. It was a little weird,. I mean, when oil futures went to zero. Greatest buying opportunity of all time. Hard to pull a trigger on that trade. It was a little weird, but I mean... I bought XM. I made 20%. But also, what was the ETF they just wound down right at the bottom?

Which one was that? Was it Kohl? KOL. We killed Kohl. That was you. It was you guys. Yeah, but we did it for environmental reasons. I'm sorry I brought that up. I didn't realize it was you. You wanted to be ESJ. It was tough to roll with a. It was you guys. Yeah, but we did it for environmental reasons. I'm sorry I brought that up. I didn't realize it was you. Okay. You wanted to be ESJ. It was tough to roll with a coal fund and do that.

I got it. All right. We're going to do favorites. This is the part of the show where we talk about things that you do in your spare time. What do you read? What do you watch? You don't have to give us more than one, but let us into your world, Jan. What's going on with you these days?

more than one, but let us into your world, Jan. What's going on with you these days? Well, besides what we've talked about, several years ago, I really got into history, mainly from my own ignorance. I really like market structure. And so I just realized as an econ major, I didn't know who Alexander Hamilton was. So that really shocked me. And so I teach a course to our interns. We have about 30 summer interns and I teach a 16, I basically teach them a college course on American history. In person or in Zoom? Well, it's been in Zoom, but I did it in person before. So I'll do that again this summer. You should open that up to the public.

We have some lectures on our website that are not well produced, but- You know his grave is two miles from here? Yeah. Okay. Have you been down there, Trinity Church? Oh, dude, yeah. I'm sure you have. He's a rock star. Yeah, yeah.

I read the turnout book, I don't know, eight years ago, whatever it was. That was incredible. I don't know that much about him. I didn't see the Broadway show. I have trouble with people rapping outside of the context of a song. Didn't he create the Bank of New York? Yes, and he started the New York Post. But what he did is he consolidated,

like all the states had borrowed money after the American Revolution. He basically consolidated it under the U.S. government. And so he created a U.S. government bond market. Yeah. And we had market cycles then. When he was Secretary of the Treasury, he actually intervened in the bond market to support the bond market. Yeah. And we had market cycles then. When he was secretary of the treasury, he actually intervened in the bond market

to support the bond market. Like, it's just amazing. How did he have the power to do that? Washington. Both literally wrote checks to buy bonds. Like, he wrote the book. And he also, like, basically talked up the market. He said, I'm going to intervene.

And it worked. The soldiers that he bought the first QE. And over a five-year period, like the cost of borrowing for the U.S. government, we became a good credit. It was awesome. That's like an early QE almost. I love it. He should have tokenized it. That's where I think he –

He would have raised rates. Don't say that. Why? Because we came out with an NFT last week. What's your NFT? You could talk about it. You just guessed it. Hamilton NFT?

Ish. So we enabled the sign up. We got 20,000 ETH addresses in several days. Okay. And we're going to distribute them over the next two weeks. And then we're going to have this reveal. Can we link to it? You can distribute the NFT. And then we're going to have this reveal. Can we link to it? You can distribute an NFT.

Can we link to it? Can we help you? Can we link to it? Is it too late? It's too late. I mean, the chances of someone getting this are pretty small right now. What is it? It's on our website.

Only one will exist? One person out of all those ETH wallets? We're going to send out 1,000. 1,000? And we have to do it for free, just to be clear, because we're a securities firm. Right. You're not selling it. You're just making it available. Absolutely. And we clear, because we're a securities firm. Right. You're not selling it. You're making it available.

Absolutely. And we can't make money off of future sales. So you have people's ETH wallets so you can drop it in. Oh, that's very cool. Okay. And it's related to what we're talking about? Or nobody knows? All right. Don't say anything. Don't say anything. We'll be watching for that. Michael, what's your favorite this week? My favorite thing of the week was watching the Celtics blow a double-digit lead in the fourth quarter last night, not just because I bet on the Bucs to win, but as a non-Celtics fan, that was fun. Well, I mean, I really feel as though the playoffs are pretty exciting this year.

Do you have a team or do you don't care that much? I'm a hockey guy. Hockey fan? Okay, what's your team? Islanders, big time. But I'm a New York hockey, so pro Rangers fan? Okay, what's your team? Islanders, big time. But I'm New York hockey, so pro Rangers now. Okay, I have season tickets to Islanders. Do you want

to go to a game next year? Any day. Okay, they're not going to win, but is that okay with you? I just hope they pick a good coach after Trots. They need a new coach, that's right. That didn't go so well. I'm going to say that my favorite, and this is going to sound a little bit corny, but watching the stock market is like really exciting again.

And I understand a lot of it's to the downside. But last year, we were up 20% in the S&P, and the biggest drawdown was 5%. There were no buying opportunities except in the meme stocks as they spent most of the year crashing. except in the meme stocks as they spent most of the year crashing. There really weren't buy opportunities in things like Home Depot, JP Morgan, the types of stocks that I want. Amazon. Those stocks are now anywhere from 15% to 50% lower.

We're getting pitches. We're getting pitches. You're getting pitches. So if you're somebody in your 30s or 40s like I am, like how I lumped in the 30-year-olds with me, if you're somebody in your 40s and you want to start building positions in great American companies, last year you couldn't think straight. Every day they were up.

This is not that. You have plenty of opportunities. So I'm falling in love with watching the market again. And not that I love people losing money, but I do like viable situations. All right, that's all I have for today. Duncan, was there anything we needed to announce? I don't think so.

Okay. Actually, one thing I was going to say. Please. If people are buying shirts and beach towels and stuff from our shop, share photos on social media of you enjoying this stuff. We like seeing that. Great idea. Are we gifting Jan a beach towel for the summer? We have one right there.

Okay. We have one right there. All right, so we'll go ahead and do that. Check out irononshop.com for the latest in financial have one right there. Okay. We have one right there. All right. So we'll go ahead and do that. Check out irononshop.com for the latest in financial blogger apparel. You will love our merch. All right, Duncan,

thanks so much. Great job. Nicole, John, you guys killed it this week. Special thanks to Jan Van Eck for being part of the show. Did a great job today. Was it overwhelming?

It was so fun. It's fun though, right? Yeah. Okay. It's hard not laughing at your jokes. True. We learned a lot from you today. This has been really helpful for us.

So we appreciate you coming in. Thank you so much. Thank you, Jan. Where can people follow you? Jan Van Eck, number three on Twitter, LinkedIn. Are you super active on social or just here and there? No, but that's where I post my content and the stuff I like. I saw you have a blog, too, on the

VanEck site. Yeah, I write our macro commentary, kind of summarize it. Yeah, I read a couple of things in preparation for today. I think you do a great job. All right, check out Jan VanEck stuff on Twitter and on the VanEck site. Thank you so much for coming in. And guys, like and subscribe, would you please?

Okay, we'll see you next week we're out you guys are phenomenal you guys are phenomenal all right that was the warm-up are you ready to do this like you yeah i'm ready now this is so much fun