The Wolf Of All Streets - Anthony Scaramucci On War & BTC | Crypto Town Hall

Episode Date: October 9, 2023

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Scott, you there? Yeah, I'm here, man. I'm here. I'm here. I'm in the process, but I'm here. Yeah, I did that last week. Always fun trying to go through, you know, customs and passport control and security

when you're trying to do Twitter spaces, but alas. It's all good. I think this is a very important space to do. I mean, there's a lot of other spaces currently covering the actual war. But I think there's not many people have been focusing on the effects that it's going to have on the markets. And I think there's a lot of people that are quite worried about what's happening on the markets today and what will happen in the markets. I think they're

very important spaces nonetheless. I agree 100%. I actually yesterday was sort of reluctant and woke up today. I just did, obviously, my YouTube with Mike McGlone, who's here, Dave Weisberger and James Lavish, and it sort of reinvigorated me on how important this is. It was really nice to have some adults in the room to give me perspective, certainly on what's happened in the past and in situations like this and what's likely to happen. I think it's just hard to get past the human element of it in any moment like this, regardless of your feelings inside, you know, to focus on the investment market and portfolio side. But I think that there's definitely a lot of people who are looking to spaces like this

to get some perspective on what's going to happen. Yeah, I mean, look, for me, the war is very, very, very close to home. I mean, a lot of people know that I'm Israeli. I was born in Israel. I try not to get involved in Middle East politics because I think politics like religion and sport and everything else, you know, it's one of those things where I don't think

that some people are going to see my side and I'm not sure I'm ever going to see their side. But I think that, you know, this war hit very close to home specifically because they were using social media as a tool to parade innocent people being murdered and stuff like that.

But I think this place is to appeal to people that didn't get affected as much but are worried about investments, are worried about the markets, are worried about where the markets are going to go as a result of the as a result of what's going on. So anyone who has any opinions, anyone who can see things going up,

I mean, we saw oil shooting up last night. We can see an escalation coming up. We can see some currents strengthening, some currents weakening. Let's use this space. Let's use this forum to perhaps chat about where the market is going

in the next couple of weeks, specifically if this actually escalates. I think it's also really important for us to just point out really quickly, obviously, it's kind of a new day here. You'll see that we are not hosting today from Mario's account for obvious reasons. He's been on probably a 72-hour bender covering incredibly this escalation and what's happening in Israel and in Gaza, of course. I don't think the guys slept basically in three days, but we didn't want to really mix the two conversations. And we've been looking to move to the crypto town

hall account for hosting in general. So just to be very clear, Mario is still very much the third part of this. Nothing has changed on that end. We just were looking for the chance to move it over, you know, regardless of numbers or the impact. And Mario will be here in the future. This is just one of those times when his focus is understandably, I would say, I would say elsewhere. So Ran, how should we kick it off? I see Anthony Scaramucci is attempting to connect. Hopefully he's up. We have him here alongside, obviously, Gareth, Mike, etc. Benjamin,

welcome, Carlo. Good to see all you guys. It came together incredibly well. Mike, listen, we just spoke, obviously, on YouTube, so I sort of know where you stand. My perspective here is that we should be focusing on two things, what the existing situation is now and what it could theoretically be if there actually is an escalation. I don't want to pretend that that is necessarily going to happen. I don't want to pretend that that is necessarily going to happen. We don't want to be hyperbolic here about the situation, but we do have a lot of context as to what happens in situations like this in the past. Maybe since obviously you've spent a career focusing on commodities in situations like this, you can give us some perspective. Yes. It's a good lead off. I think the number one thing is

we'll have some experts come on and help out in the bigger picture macro and what's happening in crude oil and in Iran connecting everything. But the facts are this morning is from Friday, crude oil is up about 4%. It's still about 10 bucks below the low and the high. So from a macro standpoint in the U.S. macro market, this is really not a big deal. Just pointing out facts and markets. Ethereum is down about 4%. Now and they both trade about the same 36% volatility. So that's the key thing to think to remember to take away from this when you have risk off events like this,

risky assets almost always go down the most now this is probably temporary for Bitcoin. I'm sorry for WTI crude oil because typically when it spikes, it's its own worst enemy. Remember, the low for this year is 63. And it's what it does for other markets. This will probably help accelerate the global recessionary tilt, which has clearly already happened in Europe. It's happening in China. In the US, it's just a matter of time if you look at leading indicators and things like that. The good news is that the reaction to stock market is very muted but one thing you don't see that we see in futures is short end like the t-bills you almost always buy the dollar which is what's happening you buy treasuries and that's

happening in futures so if you look at the treasury fed fund futures go out to the back months they're down about 10 basis points which means means that 10, the two-year note yield, which I think has been the giant black hole for risk assets, would probably be below 5%. And when it opens up tonight, we'll see that. So this is, the thing is, it's, it's usually these happen, things like 9-11. And in what happened when Saddam Hussein invaded Kuwait, it kind of can trigger, can add the catalyst to pre-existing trends. And that's what I'm really concerned about, is we have the big recession already tilting in, the Fed tightening the market, tilting towards a global recession. And this is only going to accelerate it. Now, it'd be wonderful if there's a quick resolution. I think that will

probably, it seems like it's already leaning there. But from a crude oil standpoint, this is really a non-event right now up four percent still up only seven percent on the year down ten ten bucks from the highs and the price you see on crude oil and with this is the same price as first traded in 2007. it shows you also that what's changed in the world from these past events when those of us who grew up in the inflation in the 70s the us and canada are massive net exporters of crude oil liquid fuel so this is also showing the overall overwhelming benefit of u.s dollar and u.s situation on a global scale when events like this happen and you're seeing in markets like the stock market's

barely down my question why do you think oil's only up four percent why do you think the effect on oil hasn't been much worse? There have been a lot of talks about potentially Iran being involved in the background. And I think there was a meeting held yesterday. I was on a plane. I didn't get the outcome of that meeting. There was one published. But what are the

implications if Iran was involved? What then are the implications for oil? It's to trickle down from that. So let's look at the facts. Iran crude oil exports increase about a million barrels a day. To put that in context, the US and Canada exports are about six million barrels a day. Ten years ago, that was the opposite. We were importing about ten million barrels a day.

So it's what's changed in the world where this just doesn't matter too much anymore, which means the US might be less involved i hope not i mean hope to help protect its security but it's just not as significant it's to trickle down if there's a major issue from saudi arabia and opec and the thing is they've already been cutting and also its positions ran if you look at managed money net positions all petroleum basically hedge funds they're way overweighted long and they already started tilting lower and they had some good profits. It's just the wrong time for crude oil, it just peaked around 95. They tilted a lower now if it was like early in the year,

it was around 70. The average price this year is 77. It was on its way up and help accelerate it. But right now, I think it's just a blip in the downward trajectory. And then I look at all the other commodities on this year, look at things like industrial metals and ones that really indicate recession, They're down a lot and crude oil is barely up. It just shows the tilt is spiking crude oil is going to make the economy worse for everybody. So immediately, not a big deal because Iran is, even if they cut off complete supply in Iran, it's not a big amount. And it's also the pre-existing tilt towards pressure on commodity

prices and global economies. Is there a concern, Mike, that the U.S. has depleted their oil reserves, their strategic oil reserves? Because there was a point where to keep prices down, Biden administration dug into the U.S. strategic oil reserves. And those, if I remember correctly, are quite depleted at the moment. Is that a risk going into this potential escalation absolutely not it's entertaining to see that clickbait headlines the crude oil preserve the spr has been depleted a lot yet but remember the days when i was pumping gas in 79 we had a you know double the price we had it charged in half gallons because it went over a dollar it completely changed the problem right now is the only time you really need the spr as if for hurricanes or something locally because there's so much the problem in right now in the

us and canada right now is an excess of supply we have to export or else there's an overbalance six million barrels a day to put that in context that's enough to refill the spr in about about two months if you completely cut off exports which is point my making this is a problem for the rest of the world the us is the shining star and spr yes it was like the strategic midterm reserves but just the point is how things have changed ryan we need to point this out is the us and canada are a massive surplus of liquid fuels and biofuels and energy that's what's changed from the first of the main the war in 73 79 and then the uh the Islamic Revolution in 79, 73 and 79, were the key points, the worlds,

and then the major war in 1990. Remember, that peaked crude oil at $40, and that peak lasted for 40 years. The market knows that, traders know that, and they see this as, this is not the same crude oil that was our father's crude oil. Great explanation. Yeah, that is a great explanation.

Gareth, what are your thoughts on what Mike just said and what's happening now? Yeah, I mean, in general, I agree 100% with what Mike's saying is that, you know, oil's reaction is basically telling you that the oil traders are not taking it as seriously as a lot of the media in terms of thinking about escalation. And, you know, if we really did see escalation in the whole Mideast got involved, yeah, I mean, then you're looking at a much higher oil price. But I think, you know, we've seen past conflicts between the two parties in the past. And I think while this one's far worse, and it's horrific, the market has that look back in history and says, oh, well, it kind of works its way out,

and then eventually there's peace for a while. So that's the way the market's taking it right now. And you can even see the S&P. The S&P was down a lot initially when the futures opened last night. Now we're down 10, 15 points on the S&P. I mean, it certainly is not a fear factor trade here. I mean, VIX is up, but it's not soaring. So all the signals right now, at least from the market, is that it's, you know, and again, I hate saying this, but it's like it's kind of like business as usual, which, again, is not what you want to say in this environment. But that's the way the data is showing it at this point. Gareth, do you think that could be because Israel is such a small

country on the map? I mean, you're talking about a country of, I think, 13 million people. Do you think that in the big scheme of things, the world's looking at this and going, oh, it's only a small country in the middle of nowhere. And it's not really, you know, even if things do escalate there, so what? It's, you know, even if things do escalate there, so what? It's, you know, this is not America fighting or Russia fighting or China fighting or India fighting or, you know, one of the one of the big superpowers with with huge populations. This is a little dot on the map. You think that could be a factor? Yeah, I do think that's you know, just like Mike said, is that historically, oil from the Middle East was just such an important part to the global economy, and really the US domestic economy. And now it's such it's almost, it's almost inconsequential. And so, you know, when it comes to money and

decisions on money and investments, people look at and say, Okay, well, even if that part of the world, you know, starts to get kind of crazy, and it spreads, what does that actually mean for the US domestic economy? It's not like it's happening in China, right? China would be a big deal. Europe would, you know, if Europe got in, you know, somehow, something like that happened in Europe. But but our main main trading partners, in fact, I think the US Mexico is now the biggest trading partner, those are kind of excluded from this. And so we don't have that same reliance, which again, it's partially the size of it. And then just partially the non-reliance on that part of the world at this point. Okay. Now question, wars in general,

are wars good for economies or bad for economies? Like I've heard, you know, my initial reaction, my initial gut feel says, you know, war must be bad for economy. They cause destruction. They cause, you know, death and suffering and whatever else. But then I always hear the, I don't know if it's knowledge or if it's just, you know, something that people say, but they always say like, the only thing that can stimulate this economy is actually a war. Walk me through how wars, whether wars stimulate economies or are bad for economies.

Yeah. So, so, I mean, there's no doubt that I think overall wars help the economy. And again, you know, it's unfortunate that that's the case. But if you think about what happens in war, right, people pull together, they're willing to spend more because it's for the greater cause, right? So there's this camaraderie that can be developed during wartime, where deficits don't matter as much, you have to fight the foe. So you have to spend, spend, spend, spend, spend. And all of these things kind of come together to actually stimulate growth. So that certainly is part of it. Ran, I would love to hear, Chris, I would love to hear your perspective on what's happening here

and what's likely to happen. And then we'll go to Dave. Yeah, man, you know, I'm a firm believer in, you know, social mood kind of leading into the charts, which kind of tells us more or less what's happening rather than looking at, you know, the events outside of it kind of causing things to happen. So, I mean, you know, we're talking about oil and when we look at oil, you know, this bounce, if you look at my charts, was expected. You know, we're just looking know this bounce uh if you look at my charts was expected um you know we're just looking for this bounce right here and then looking for continuation lower um as has already been said really there's no uh no real move in oil that you know i i think that even even if you look for explanation um via events that are happening you know i don't think

you know there's much of a move in moving oil really for what's really happened. Now, do I think necessarily that because, you know, it's a smaller territory and whatnot, that it's not a big deal? No, because, you know, again, we got to look at alliances, right? And so, you know, we're looking at when things really kind of pop off over there, there's always that possibility that the, you know, the U.S., you know, and China, you know, that they get involved, you know, through their alliances. And, you know, I think that's the bigger part of that.

But, you know, again, I look at the charts here and nothing is actually happening. I mean, we've got TLT, which looks like it's bottomed out. It's got a year-long bullish divergence. So it looks like it's ready to reverse. We've got gold and silver kind of getting ready to head higher. It looks like Bitcoin's continued to kind of push up here lately after some reaccumulation over the last six or seven months. I mean, I just don't see anything in the charts that are saying, you know, that everything's going to just tank and get, you know, terrible.

The dollar itself looks like it probably topped out here. What was it, just here recently, just last week, was it? Yeah, so, I mean, I don't see anything in the charts saying that, you know, that we've got anything significant, you know, coming up here. I mean, I saw gold's been involved at a very, very bad 10 days prior to this. I see a $17 uptick in gold.

Has it broken any specific levels? Was that just the bottom? And also how significant is gold in the time like this? Again, I'm not very experienced when it comes to wartime economics. So like, in a time of war, do people actually flee to gold gold just to be clear gold's up about 40 in two days from i think it bottomed two days ago at about 1810 1811 it's trading at 1851 and just

for context i mean generally you know 60 40 portfolios are built for peacetime in times like this in times of war, you generally see gold and commodities outperform. But to be clear, once again, there's a differentiation between what is happening now and what theoretically would happen if this became a larger conflict that involved the United States in a much bigger actual war. But in times of true war, you expect gold and commodities to outperform stocks, bonds, and cash to underperform, right? I mean, governments print money massively to fund the wars. They put bonds to fund the wars. And obviously, a lot of what's spent is, quote unquote, wasted in the war. It doesn't create

more production. It's not productive for the economy. So generally, we do see gold perform exceptionally well in these situations. I get Anthony's Anthony, I'm still trying to bring you up. Hopefully we'll be able to get you connected. I know you're there listening. We're trying. But go ahead, Chris. If Chris is gonna go, I can just piggyback on the gold little one. All about gold. Gold is all about the in wars, you always want gold. It's just the way it

always works. I mean, how did the U.S. accumulate so much during World War II? Because that's how they, you know, accepted payment. But it's always been, and people always demonetize and go to fiat during wars. But gold up about a percent today, I think it's coming off a pretty significant low. Remember, it's been consolidating unchanged for a while. And I think it's one of the best performing commodities. It always has been one of the best performing commodities in history, particularly if you have to pay for storage. And I think it's just a matter of time it breaks out higher, particularly if we get to a US recession, which is the case. But it's been under pressure a lot lately for the key factor that I think is still the black hole for all

risk assets. It doesn't pay interest, just like most cryptos. And in that too, you know, you've been able to get over 5%. So a lot of we've had major significant outflows in gold ETF holdings, ETF holdings, despite central banks buying. That's the key thing to remember about gold is the deepest pockets on the planet are buying gold. They have been buying gold. And I don't think that's going to stop particularly this war getting started. So if there's one commodity that I'm quite bullish on, it's gold. I didn't think it'd get down to $1,800. But at $1,850 now in dollars, it's just a matter of time. I think it breaks out to new highs. And the key thing to remember about gold, it's made new highs in virtually every other country that's melted. And that's

what gold does. It's the great hedge. It's your store value. That makes perfect sense. Dave, I saw you had your hand up yeah i think you made a point earlier on your show that's really important to answer ran's question ran basically said is war good or bad for economies etc etc and i think that 1971 was a big dividing line. War was terrible for economies before the fiat era, because essentially what war did is, you know, people continued as long as they had money. Right. You know, they had you run out of money. You stop fighting. Well, now you can print more money. And if you think about it, that's very, very important. And, you know, while I'm not getting into the Bitcoin fixes that ethos on a Monday after the horrors we saw this weekend, the fact is the sound money is very relevant here.

And why does this matter? Well, it matters because if your denominator for how you're looking at financial assets is something you're printing and money printing is now definitely more likely today than it was on Friday morning. That's something that people need to keep in mind. That makes perfect sense. Alex, go ahead. Yeah. So I'll actually take to a degree the other side of that argument. I think the effect of sound money is overstated on something like that, because it's still limited to the extent that people want to buy your debt. And there's basically one country in the world that can sell unlimited

amounts of debt into the market at even now still fairly low prices. And that's us. So like if the U S I mean, but if the U S gets dragged into a total war, like that's probably the end of the world anyways, as opposed to you know what is still ultimately the very limited conflicts that we've been in so yes like fiat printing has absolutely allowed us to fund like the crap out of you know forever wars in iraq and afghanistan for 20 years um but it is not the same situation for smaller countries around the world who can't sell unlimited 5% debt into the market. Guys, what about US debt? I mean, if the war escalates, the US is going to need to spend more money, they're going to need to take out more debt. Is there a situation now where this can have an impact on US debt rates, on treasury bill rates? Mike, you might be the guy for that one.

Yeah, well, let's be careful with the narrative that's been wrong for four decades since I've been in treasuries that rising deficits will pressure make bond yields go up in the short term. Yes, that's part of what's happening. But in the macro big picture, it's the opposite. And you can just look over debt to GDPdp in the us over time yields have declined over time you can look at it in japan definitely a good example even in china which have doubled debt gdp that the u.s has right now but the key thing remember is flight to quality and something like this if we are heading towards a global recession which i think we are and you can still lock in u.s government treasuries and guarantee 5%

in a world that might be going to a deflationary environment, you'll do fine. And don't underestimate what the U.S. treasuries and Fed can do if they want to, to make yields go lower, particularly as we see economic contraction, which would be a normal response to this significant rate hikes. Now, yes, right right now it's a very unique situation where the us is into you know this fiscal stimulus and this debt increase this year around almost nine percent despite the um you know the economy lagging is quite scary but overall just remember those rules of the world's as you know previous person said is the us's enormous privilege and even japan doesn't have that privilege and they've been able to maintain high debt fees and very low rates. So I'm worried about the next,

that's a bridge to cross after we get past the recession, when you have massive deficits, and then there's nothing left to do. But right now, the Fed is can just monetize it in a heartbeat, if need be. So this oftentimes what happens when you have a capitulation of the bulls, I think that's what happened in crude oil. It peaked at 95. And certainly in bond yields, which I think peaked at 5%, is you got to flush people out, make it difficult. And oftentimes, oftentimes, all you need is a catalyst. And just remember 9-11 was, I was very long a lot of US Treasury zero coupons and bear stocks at the time i was trading back then initially they went down in price but then that was the absolute time to buy u.s treasuries across

the curve that makes perfect sense uh we also chris do you have any thoughts on that or dave gareth as well any of you can feel free to jump in yeah i mean um you know as far as real quick back to gold i mean let's let's be honest about what we're looking at here. You know, gold's been in an uptrend for a year now since October of last year. So, I mean, anything that's happening now isn't, you know, any kind of movement up now is something that's already been in progress. So, I just want to make sure that we make that clear. But, you know, if you're looking at, for instance, like I said, TLT looks like it's bottomed out or just about. So if we look at the U.S. 10 year, you know, I can see potentially a little bit further move up to five percent and then a move back at least to three and a quarter

and then maybe, you know, potentially higher. But I mean, you know, these trends are already in place. And so I think a lot of times we get caught up in in the what's happening today kind of idea but um if we you know step back and look at the charts we kind of pull out a bigger picture um a lot of you know these these trends are already kind of in there they're already doing their thing um and these are just minor movements within that larger trend so um you're basically saying that gold already looked like it was sort of bottoming here and yields already look like they're somewhat topping here. Yeah, yeah, exactly. I mean, again, when we're looking at, you know, the 10 years been going up since what?

March of 20 back to the COVID dip drop back there. It's been going up ever since. And then, of course, like I said, you know, gold itself has been going up since October of last year. It's just pulled back here the last few months. But, you know, ultimately, it made almost a 30% run off that low. And now we're still about 16% off that low. So, I mean, yeah, you know, bigger picture. Check out what that trend is, the bigger picture. And I think it kind of tells you more or less what to expect overall. I think something that very few are talking about, not war-related, but certainly economy-related,

is that the yield curve is rapidly un-inverting here. We've had a historical period here of yield curve inversion basically started, looking back, I'm just looking at a chart right now, basically started in June of 22, right? So we're looking at almost a year and a half of an inverted yield curve, but only six weeks ago, it was sub 1%. Now it's back to 0.269. It looks like there's a very viable chance here that the yield curve is going to uninvert. People historically seem to think that that pivot that generally comes after that is a good thing. But what we've seen almost every time in the modern era, or actually every time in the modern era, is the yield curve un-inverts, then we see the Fed pivot, and then we see a very long and extended stock market correction, and usually a very long time for it to come back to even the pre-recession or pre-pivot

levels. So Gareth, maybe you can take a stab at this. What do you make of the fact that this yield curve is un-inverting so rapidly? Yeah, so that's a big, big warning sign when the yield curve un-inverts. Like you just said, is that that's actually historically when we see recessions hit is when the un-inversion occurs, not the inversion. So we see recessions hit is when the un-inversion occurs. I'm not sure. I'm getting a little feedback there. Hopefully that's it. But the only thing I would just add is just that if you look at the jobs number on Friday, the jobs number on Friday, we showed a gain of 336,000 jobs. But if you actually look at full-time

versus part-time, we actually lost full-time jobs in the month of September and gained a huge amount of part-time. Perfect. Anthony, we got you. That was the technological challenge of all time, Anthony. I know you're ringing in your thoughts since we finally got you up on stage. Maybe he can't speak. Let's see. Anthony, can you hear?

Can you speak? Ran, can you hear? I can. I can't. And maybe just try and unmute. Everyone is seemingly cutting out for me. So I don't know if that's just something on my end. Ran, can you go ahead?

I'm going to come back. Yeah. Okay. Ant, are you there? I think we don't really have, we don't actually have Antony. Yeah. We were getting that feedback

when Garrett was speaking through his mic. So, yeah. Go ahead, Ran. Technological issues here. Can you guys hear me? No, I can't. I couldn't there for a while. You're good. Go ahead. Oh, okay.

How are the rest of the markets actually performing? As I said, I just got off an airplane, so I'm a little bit behind on the rest of the markets. What are the NASDAQ, the Dow, what are the S&P doing? Not much movement, to be honest. The one thing I did notice is that a few of the larger tech stocks are absolutely booming. I mean, Meta was up at 318 this morning. NVIDIA started the day at 440, up at 446, although the NASDAQ itself is just slightly down. To be honest, there just hasn't been that much movement on anything here as you would expect, which maybe I'm wrong. But to me,

I think it means, obviously, that the market is holding its breath waiting to see what happens here, or that everyone's just exhausted and nobody knows what to do in these situations. Go ahead. I was just going to jump in these situations. Go ahead. I was just going to jump in there, Scott, and just say also, don't forget that Wednesday, we have PPI and Thursday CPI. So the markets, again, if nothing gets crazier in the Middle East, they might just be looking towards that data on Wednesday and Thursday. Sure. I pointed this out earlier. I copied over from Bloomberg. I've never seen in my life more key events of the week listed for this week. If you look at how many Fed speakers and announcements in Europe, Japan, China, the United States, there's literally 30 things that Bloomberg listed to point out this week as key events to

watch that could affect markets. Never seen anything like that before. And to your point, we also have those inflation numbers. Do you have any thoughts on what's likely to happen there, if anything will change as a result of what's happening in the Middle East, Gareth? Yeah, I mean, you know, with the Middle East stuff, it's just, it's all probabilities. And again, I hate to break it down to that level, but it's just, as of now, like the market's showing us, the market is the truth teller in terms of the likely outcome. And right now they're not taking it seriously. So then it just turns our attention back to, well, what does that mean for the dollar? What does it mean for the yields if we turn our attention to the CPI and PPI data this week? And again, it's hard to know. I'm in a position where

I wouldn't be surprised if we're due for a little bounce because the dollar and yields, which are the most important, look like they've topped out here. But again, even with a bounce in the market, I remain very skeptical that we're going to avoid a recession. I mean, like I mentioned just before when I was getting some breaking up is that the full-time jobs have actually, I think we've lost about 600,000 plus full-time jobs in the last three months or so or so. So, so again, that's the beginning. It's not, it's not showing us, right. We're still net gaining because of part-time work, but you can't say that the labor market is as healthy because most people are not going to choose to work part-time. They're, they're going to try to get that full-time job and then they'll

fall back on that part-time. So, so again, I think you might. Don't people just see that headline number though? Like very few people dig in and say, oh, those were mostly second jobs or government jobs was 75,000 versus an expected 37,000, right? So the general view is that the labor market's exceptionally healthy. That's right.

Yeah, you're 100% right. And that's why in general, we saw yields initially spike higher on Friday when that number came out, because the reaction was, wow, this is such a huge number the Fed may have to raise. And then what we've actually seen is that the dollar and yields have started to fade a little bit, partially, obviously, because of what's going on in the Middle East. But based on the charts, they've both topped. And I think the bond market is the one that's sniffing it out first. I mean, that's really the smart money out there. And again, we're starting to see kind of pullbacks in those yields. And the charts are

telling us that that's the likely outcome. And the bond market is closed. Futures are open, but the bond market is closed today for Columbus Day, which also makes it interesting. We just had Anthony on stage and he went back to being a listener again. I was about to ask him. But Simon, you can obviously ring in. You just joined this stage. I was about to ask him, but Simon, you can obviously ring in. You just joined this stage. I would like to circle back, obviously, to the situation in the Middle East and what the impact there will likely be. Simon, do you have any thoughts? I'm not hearing Simon there either. Anthony, is your mic working now? I think so. Can you guys hear me now? Okay. I'm sorry. I mean, I just, I rebooted about four times.

So, but I just, there's three things I want to say quickly and let somebody else talk. But number one, just imagine if you're the smartest strategist for Hamas and what do you think Israel's course of action will be after your surprise attack? You have to ask yourself that question. And then you have to wonder is if they want a full on retaliation so that they can further radicalize large elements of the Arab community against Israel. And so I just caution people there, because remember what bin Laden said after 9-11, or actually predating 9-11, he said he would attack the U.S. on its homeland, and then the U.S. would respond by bleeding itself out and having an unlimited war and bankrupting itself. And he said that was the playbook that he used to demise the Soviet Union.

So you just have to ask yourself what they're going to do, okay, in terms of the responding and what Hamas would like them to do. The second thing as it relates to the cryptocurrency markets, I think this is also an important part of it. Something happens in Israel that is catastrophic. It's going to have a big effect on our markets because Israel, from a venture capital perspective, puts out more venture capital money than all of continental Europe. So you just have to think about that. And then the third thing is a U.S. response is going to further show the weakness, despite spending a trillion dollars on the U.S. military, how overextended we are and how limited our supplies are vis-a-vis Ukraine, the situation in Taiwan, etc. So, you know, this is a very big problem. Hamas has thought this thing through.

And I think it's not clear to me, the response that Israel is giving them right now isn't playing into their hands. Okay, I'll shut the mic off. But I just wanted to know, I think you're right. I mean, I think that they're smart enough to know that escalation is the goal and that this is going to trigger a much wider conflict if they get their wishes. Why do you guys say, why do you say escalation is the goal? Just walk me through the next couple of moves on the board. I'll let Anthony do it, but go ahead. if I'm Hamas, I'm attacking, I'm taking innocent civilians, I'm creating a public outrage in Israel, which will force them to respond very aggressively. Remember, it's a democracy. And so they've got to show their people that they're going to respond to this. They've also been caught off guard. So it's very akin to 9-11. Okay. We responded with a war in Afghanistan. And then we

obviously made things up to get into a war in Iraq. Okay. It had catastrophic consequences for the US. And so if I'm Hamas in Iran, I'm thinking, let's let Israel come in here and create atrocities here in the Gaza Strip. Remember, 55 percent of that population is below the age of 20. Let's let them commit these atrocities on the world stage. And it will radicalize a very large portion of the Arab community, and it may play into the propaganda about Israel being an oppressive state. You see what I'm saying? I don't believe that, by the way. I'm a Zionist, and I'm a very big supporter of Israel. But I'm just saying that we have to think through,

this is a four-dimensional chess play. don't just attack israel and then expect them not to do anything you're expecting them to do something and the thing that you want them or predicting them to do you've already thought ahead four four moves down the chessboard why you want that and so i mean hamas had to know that gaza would be completely leveled there's no question there so that then you naturally have to ask the question why would they want that of their own people and i think your assessment is well okay as an as an example okay and guys i just want to provide some historical context you can google this when fdr left yalta on the way back he met with ibn saud who's MBS's grandfather. And they were aboard the ship. He boarded the ship that

FDR was on. And he asked the king to allow for more Jews to go into Palestine as a result of the atrocities in Europe. And what ibn Saud said is, no, that's their land. And I don't want any more Jews coming into Palestine. And FDR obviously was sick at the time, was very frustrated. I'm just trying to apply some historical context here. This is a very big dilemma of Saudi Arabia. I have respect for the kingdom. But they also have a need to be advocates for the Palestinians, which is why their response, you know, wasn't such a terrific response. This is something the Iranians know. They do not want relationships to normalize between Riyadh and Jerusalem. And they know that the Saudis have a historical generational bias towards protecting Palestinians. So again, look at the chessboard, think in 4D chess, and try to have an understanding of where all the vested interests are. And what I'm very worried about for the Netanyahu government again i'm not providing them with any advice of course but what i'm worried about is the overreaction in gaza

could lead to unforetold negative consequences for israel again i'm not even saying that that overreaction reaction is not justified i'm just saying've got to be very careful here. It's a very new syndrome. How do you see it playing out? Let's just play out one or two chess moves forward. So if Israel retaliates, like they say they're going to retaliate and effectively wipe out

any remnants of Hezbollah in Gaza, what do you reckon? Hamas. Hamas, sorry. Where do you, how do you reckon? Hamas. Hamas. Where do you, how do you see the next couple of moves on the 4D chessboard in the Middle East? How do you see

the escalation? So let me just say this, if they're killing innocents and it's broadcast or filmed or caught on a iPhone and shared with Mario or wherever it's going to go. And this is one of the beauties of X now. It's just this amazing, uncentered, free speech platform.

I think it's going to have negative consequences for Israel. Remember, you know, they're a democracy. United States is a democracy. We have to handle ourselves differently than totalitarian regimes. OK, particularly if we want there to be beacons of freedom in the world. And so if they go house to house and they get mired down in a huge quagmire in Gaza and it's broadcast internationally that they're slaughtering young civilians. And again, they could be doing it by accident. Okay, I'm not saying they're going to do it purposefully.

I'm just saying that this could be the negative consequences of that type of response. It could lead to a further radicalization and a further isolation of Israel. There's been so much progress made with the Abraham Accords. There's been progress made with the movement, you know, of the embassy to Jerusalem. And again, even though I don't want President Trump to become president again, there were some very good moves that were made by the last administration and there was a cut off of funding for Iran. OK. And also, you know, there was a lot of Sunni alliances towards Israel. This could cause a breach in that. And so I just don't want you know, Israelis to regress in all the monumental diplomatic triumphs that they've had over the last five or seven years as a result of too violent or too aggressive of response in this

situation. Now, there'll be people on this call that disagree with me, and certainly there'll be hard right people in Israel that disagree with that that and they should wipe them off the map and so on and so forth. But I'm just telling you, it never works out the way you intend. Wiping them off the map is going to cause other problems in the region and it's going to cause other problems for Israel. So again, I mean, I think that the worst case scenario and not the one that's likely, but if you're just asking the question of what could happen, what they may want to happen from from what I've seen, and I'm not an expert on it, obviously, is a land war. Right. I mean, Iran and and Syria and Lebanon and Hezbollah think it makes sense that Iran is largely behind this and helped with the planning, that could be what they're angling for. Whether that they will be baited into it or not is another question, but I think that that's the scenario they likely would want. So let me ask a rhetorical

question, if you don't mind, okay? The Chinese helped to negotiate some level of diplomatic truce between the Iranians and the Saudis. So let me just ask a rhetorical question. Do you think the Saudis were caught off guard the way the Israelis were, or you think the Saudis were read into what was going to happen? Again, I'm not saying they were or they weren't, but someone has to ask that question because if they were read into it, did they try to stop it from happening or did they acquiesce? Because if they acquiesce, that's a tell on directionally where those relationships are going. If they tried to stop it, well, why weren't they successful in trying to stop it? But then if you read the response from the Saudi government, based on the aggression that took place, you know, it was

traditional to what they've done generationally in terms of their advocacy for the Palestinians. So again, it's a very complex, very difficult problem. But the one thing that I want, obviously, and I think everybody on this call wants, is peace. And unfortunately, to get peace, you have to negotiate with an adversary that you hate. And you often are looking for an outcome, okay, that isn't perfect for all parties. You know, this is not the second world war guys, where we're going for unconditional surrender in these areas. So it's just, again, it's just something we all have to think about. Okay. And I think good journalism also requires these questions to be asked of the Saudis and others. What's the ultimate outcome that you want? And if you, you know,

and the Israelis, for me, I love Israel, I love the state of Israel. I am a pro-Zionist and I am a, I am a philo-Semite. I mean, I've been to more goddamn bar mitzvahs than I have been to christenings because I live out here on Long Island. Okay. And so I want there to be peace and I want Israel to flourish. And I also want to remember that's a democracy in the area of the world where there are very few democracies. OK, so, you know, you know, it's a lot going on there. And I think we have to like I'm just I'm just wondering if the superficial overreaction is the best play in the playbook. I think that's what they're trying to trigger to your point. I do want to circle back to markets a bit,

but Anthony, just an interesting question sort of to your rhetorical question is, how could all these countries, and it is possible, have known, and it's seemingly Israeli and American intelligence had no idea? Okay, so again, you know, I don't have the answer to that, but we do know from history that that is possible. OK, whether it's the 9-11 attack, the the attack on Pearl Harbor, you know, the Gulf of Talcum, we can go to, you know, you know, you can get people off the grid, conjoined with each other and coordinated. Again, I'm not saying the Saudis knew or didn't know,

but the question is if you did know, hypothetically, would you have advocated to stop it? And I think that'll tell you where the future is diplomatically for Israel and Riyadh, okay? You know, it's in our interest that the Saudis and the Israelis acknowledge each other and come to peace. We do know that they've been working formally together and successfully together for many, many years. And this could be another thing the Iranians obviously do not want. Okay. And so this is why they they helped inspire trigger and plan the attack

you know if you if you have enemies that are teaming up with your other enemies it's not great for you certainly not uh simon uh would love to share your thoughts and then alex that's how you lift your mic as well simon and alex yeah sure i know you want to circle back to markets but i'd just like to i'd like i'd like to provide just a bit of balance to that from a non-us perspective um and i'll try and keep a lot of the emotion out of it because it's a very emotional topic and i agree everyone wants peace here but i believe we have seen you know terror on on both sides sides that needs a slight bit of balance. As a non-US person, when we were watching this unfold, and I come from the perspective, my father's a Christian,

my mother is Jewish, and I married into a Muslim family. And so I see the impacts on many different types of faith and belief. But when this first came about, there was a perception that this was some kind of movement against Islamophobia and that there was going to be some kind of pushback on suppression and suppression and occupation and that is one you know one side of the story and just to give you from the non-us perspective as soon as biden did come out and say you should fight you know you should fight back with all force against terror

that was a massive change in narrative if you were watching you know non-us news outlets and and various other outlets outside of like europe america and various other things so there was a very different perception from what you may have experienced in us over what happened this weekend sure Sure. Alex? Yeah, the thing I was going to point out is, you know, Anthony, you were talking a lot about the Saudis. I think with them in particular, but with every country, there is almost never a unified position at the top. You have lots of factions competing, pushing their own interests, what they think is best for their country,

right? In particular, you know, it's been MBS who's been driving the drive for normalization with the Israelis and a lot of just, you know, trying to push Saudi forward in general in the last, you know, 10 years. And he's done that somewhat ruthlessly at times. There's people there who don't want to do it, who don't want to see that. This is true in the US as well, right? We see this dynamic. I mean, if you go back to the Trump administration, right, this is what all of the, you know, conversing debate over like the deep state and things are. So, you know, we have to, you know, when you're thinking about the four dimensional chess or whatever, just what people's motivations and how they're moving are. You've got to keep that in mind that it's often not as simple as just saying, oh, this country wants this or that country wants that.

There's a lot of competing factions, people doing different things, undermining other people in their country. Maybe someone knew something, someone didn't. And it just, it makes it really complicated because the internal power battles and politics that play out there affect what happens on the world stage and internationally as well. Yeah, all great points. I think we're going to move towards wrapping in the next few minutes. Mike, I mean, do you have any further thoughts? I know I keep coming back to you, but you seem to think that for the moment, this is not largely impactful and that the economy is on a path that's predetermined here from what's already happened. standpoint we all know the significance of israel but in terms of cutting off the supply of crude oils deliberately and really plunging the world into recession it's nowhere near comparable to the shock of 9-11 um and that there was a recession tilt so here it's like right now it's just a shock

and markets are showing that even crude oil just doesn't care that much it's what might happen and as you know we mentioned earlier it's just like seems like israel is doing what with a little help is reacting rapidly and markets i think are doing what to me enough i look at this as more of the trigger is this going to accelerate the pre-exec existing trends towards a global recession i think that to me is more the macro and today it's kind of showing that just a slight downtick in the stock market bond yields potentially. I think they probably assigned that the yield rally has peaked. This is probably a sign that the crude oil rally that really peaked in a month, a couple weeks ago, has probably peaked. And this is probably the catalyst you take to tilt over to recession.

And that's a global scale. But right now, an exact direct impact on crude oil supply and everything, it's just not a big deal. Right. But wouldn't we, if this does, once again, back to what is and what could be, if this does escalate in situations like this, wouldn't you expect oil prices to then rise and to be inflationary pressure rather than getting the deflation that would lead to a recession has to arise to a point where there's a significant deliver to cut in supply. Iran is the first source 1 million barrels a day is insignificant compared to the US's excess of supply over demand of 6 million barrels a day. Obviously, Saudi Arabia is in that place. But do they want

their to plunge their customers into recession for something like this? and this is the way the market's looking at it's like go ahead do that but they're going to be their own member it's that wrecking ball cruel can be the wrecking ball but it keeps going up like this with bond yields it's going to squash the global economy which is already heading that way as it is so yes but that's a significant if statement and remember this is not this is not an attack on Saudi Arabia like we had back in, what was it, 2016 or so, when it ended in like a month. I mean, it just had a quick bounce. Right.

Joe, I saw you just joined. Feel free to add your thoughts. Well, the only thing I'll say on the oil front is just look at what makes up the basket of CPI. And the predominant factor has been owner's equivalent rent. So if owner's equivalent rent falls over the next six to 12 months, it's not going to matter what happens with oil. Oil doesn't make up that big of a component of the basket. That's a great point. Makes perfect sense. Anthony, do you have any feelings or thoughts specifically to the situation with oil and what's likely to come? I think has been totally mishandled by the Biden administration. And so they've been using it to stabilize the market. They cut the drilling permits in the U.S., but obviously, guys, we're all living and breathing in the same oxygen. So they're asking our foreign allies to drill

and produce oil when we could be producing it here in the United States. So I guess my question is, you know, how do we replenish this strategic petroleum reserve? And what does that do to the, you know, the near term macro environment for oil? I, I, you know, I think obviously the economy is strong. I think we're going to have a way where I'm in the Morgan Stanley camp where the recession is going to be way worse than people realize, because if you just look at what's going on in housing and housing control, 60% of small businesses, you know, housing getting crushed right now. But my question is, what do we do here to replenish the strategic petroleum reserve? And what is the Biden administration's plan on protecting U.S. interests as it relates

to oil? I think they've been a disaster on this, frankly. Anyone else have specific thoughts on that before we wrap? I'm not an oil expert, and Mike left. I know that I spoke to Mike, actually, Anthony, about oil a bit this morning, and he thought that the SBR, which I don't necessarily agree, was a bit of a nothing burger and that they could refill it. But I tend to air towards your views i just think but also remember that may be true from a technical perspective but a lot of this stuff is image related too you know it's how people think

about things sometimes are as important as the reality which we've learned in in war and we've learned in politics yeah well anthony just just if you're in the hard landing, very bad recession camp, oil is going to be the least of your concerns, right? Because, I mean, just look at 2008, right? In 2008, oil was 150 bucks a barrel. Six months before, it was 30 bucks a barrel because the economy entered a hard downturn. Yeah, well, listen, I hope I'm wrong about this, but it just it just feels way worse that the data is robust right now. But it feels like it's going to roll very hard because the just just remember something. Small businesses generate job growth. Sixty percent of the small businesses just look at your local Main Street and see how much of it is tied to housing.

And housing is about to get severely crushed, given where rates are. So oil is going down in your view? I think I think near term, probably not. But long term, like over the next 18, 24 months, I believe so. And I believe the federal is going to have to cut rates more significantly than they're letting on right now, which will be a boom for Bitcoin and be a boom for asset prices in general. But the next 12 to 18 months are going to be rough. Yeah, I tend to agree. I think this is a great time to wrap everybody. There's always a challenging. We have obviously Mario doing

the huge spaces on Israel. And I think that that story rightfully is going to continue to suck the air out of the room. We wanted to commit to still show up and sort of gingerly discuss it and talk about what it could possibly mean for markets. And I have a feeling that's largely what we're going to be doing into the near future. Obviously, we've switched to the CryptoTown Hall account. So please follow that big red logo up there on stage. We are going to be hosting from here moving forward. And so you should go ahead, follow that and add your alerts. And listen, guys, you know, we plan these shows in advance. We start to talk about topics. We were talking about it all weekend. I can tell you that I personally won't be talking about SBF's trial or social fi or what coin is likely to do what in the coming time when we have something so much more impactful to talk about

at the moment like this. I mean, we will see what happens moving forward. I'm sure as with all things, you know, sadly, the news will change and maybe fade into the background. But I personally don't want to talk about anything else at the moment. And we even considered not necessarily talking at all today. You know, but I do think it's important that we all show up and continue to have these conversations because there are people who this deeply impacts. And people do want to know what's happened in the past with markets in similar situations and what's likely to happen moving forward.

Ran, you're back up. Any final thoughts before we wrap? No, I think we'll just keep on keeping on. And I think we have a responsibility to bring this kind of news to the market. And obviously, certain things will take priority for certain people, but we'll be every day bringing everybody market updates and trying to remain as credible and up to date as possible. Perfect. All right, guys, we'll see you all tomorrow back here likely on this account, big red logo, follow it and set those alerts. Thanks, everyone. Bye.