The Wolf Of All Streets - Bitcoin Had Its Best August in Years - Now Everything Gets Harder

Episode Date: August 31, 2026

Bitcoin heads into September under pressure as renewed U.S.-Iran strikes push oil above $90 and markets sharply raise the odds of a Fed rate hike after Kevin Warsh’s hawkish Jackson Hole speech. Despite September’s historically weak reputation, midterm-year seasonality has often been much stronger, while gold is still coming off its best month since January. Learn more about your ad choices. Visit megaphone.fm/adchoices

Bitcoin just had its best August in years. Now everything may get harder. September is historically a very difficult month for markets, although there is some nuance there because the best Septembers tend to be in midterm years, which is where we're at now. We're going to discuss that and everything happening in the macro today because it is, after all, macro Monday. We, of course, have Dave and Mike,

but we also have Chris joining once again because you like me so much from Franklin Templeton. Let's go. Good morning. everybody, welcome to Macro Monday. We're not going to waste time listening to me. Let's bring on all of the guests. Good morning, gentlemen. Chris, welcome back. You made it through the first audition. Congrats. Good to see you guys. You might get the part. Just kidding. Mike, morning meeting. Let's get into it. Good morning. Now, Anna came out swinging this morning. She thinks Worstreet deemed himself. She gave five issues. We can talk about those later as you want, but she did get to the non-farm payroll. She expects 12,000, which is small, 4.2%. And she pointed out, August is the month of anomalies. The pattern is usually typically can disappoint by 30K. So she thinks there's substantial downside risk to this payroll number. State and local governments are reducing federal funding. The American Rescue U.S. Act has been depleted, and so she thinks it's a potential trip in Wyoming, and then she pointed out, never in the modern area of the Fed have they hiked rates with two consecutive payroll numbers going negative. So she still thinks they're unlikely to hike, even though the market's

price for 50-50 in next meeting, and then 90% for the set meeting. And the CPI, she thinks will be the week after, will be 0.3%, expects the core to drop to 2.4%, which is the lowest in five-year basis. So those are not environments for the Fed to hike, even though, as Ira Jersey pointed out, they're priced 50, 50 for a hike at the SEP meeting. And he thinks if they do hike, it's unlikely they go just two times, they go back, take back 100 base points, which means a two-year would end up around 4.5 percent. We'd have pretty substantial flattening of the curve, which would mean probably the bond yields would maybe spike initially and then drop. Now, he's not expecting that, but he thinks that's typically how they do it when they do it.

And he did say he disagrees that markets are mispriced because of what Mr. Warsh said about fundamentals. He said they're fairly priced. He's mentioned he's been using his 6% nominal GDP growth. Chris Kane, our equity person, came on and pointed out stocks are not overbought on an RSI. The breath has not been great. It's all mega caps.

And then he said earnings unadjusted, 51% are just crazy blowouts. David Sen Santana, FX person spoke of Colombian pesos, the best performing. He's in Latam performing Latin American currency points out. Brazil's got an election come up. They're doing well, but there's probably going to be a lot of de-leveraging before that. And then I piggyback on Anna and pointed out, if she's right about this, that's probably good for gold. But overall, I just point out the macro and commodities. This is just a bad environment for gold and Bitcoin.

their same exact trajectories, expecting 50 base points of hikes in one year. It's typically not a good environment. Then I point out, it's all about oil. That's up to Mr. Trump. He needs lower prices by midterms. And by the way, he's getting into the natural gas. That U.S. January natural gas contract is still below four. It's the lowest level since Russia invaded Ukraine, and that's in one measure of heat, electricity, and fertilizers.

So I ended with this. I just point out this year is all about energy and commodities, but the Bloomberg Energy Spot Index is the same price as 20 years ago. And precious metals have been the best studs, but they look almost as expensive as energy in 2008. Back to you. There's so much done pack there. It's hard to know where to start. I just want to show this really quickly because I happen to check the Kalshi markets. And they're way more bullish on a rate hike than even, obviously, the Fed is. So before 2020, okay, those are irrelevant. But before 2027, 71% after his, his, his, he's, he's, his comments on Friday, and you can see that's been obviously steadily rising here with time.

So, you know, the public starting to really believe that there might actually be a hike. I'm still not personally buying it. Maybe you're about to jump in there. I mean, look, there are so many different pieces or threads we could go down. We should have a longer conversation about Warsh because the fact that Mike made started with the comment that, you know, they think Warsh is finally on the right path. I mean, let's understand something. The primary tool of the Federal Reserve Chairman is and has always been jawboning.

They talk, they talk, they talk, and what they do, we'll see. The reality is Zero Hedge came out with an article, which it would be good for you to find, which said that something about raising rates would be a colossal mistake. And it was interesting because it actually, if anything, understated the point. If they raise rates, two things are absolutely certain. First, the yen crisis will, the yen situation will be a far bigger deal. But the bigger thing is the cost of funding the federal deficit goes up because we're all funding on the short end right now.

And so that means that fiscal dominance gets even bigger and the need to accommodate in terms of liquidity will get even larger. People keep ignoring the fact. And it's a fact that the largest holders of U.S. Treasury, are sovereigns and the hedge fund complex which buys it on leverage. When you have to sell more bonds and they're buying it on leverage and facilitating that leverage, that increases money in the economy and creates that liquidity loop because it pretty much has to. The only thing that would be an out of disaster would be if, in fact, that contracted. Because if long bonds, you know, spiked significantly,

we have a serious problem. If the short end is forced to spike significantly, our budget deficit becomes from difficult to almost unsustainable. And that's the thing that they're watching, and that's what they're looking at. So I find it amusing. You know, he's going to talk tough. Of course he's going to talk tough.

He's going to say inflation, inflation, inflation. But what they really care about is keeping the funding costs for the U.S. government down. And they have this huge problem, which is the largest sovereigns, Holder is Japan. And if you're watching the yen, you understand and you're watching the JGBs, you understand that U.S. interest rate rises is not going to, well, interest, are not going to be appreciated by the head of the Japanese central bank and the Japanese monetary authorities. And so it's an interesting vice that they're in with Wall Street and traditional economists saying, well, they need to raise rates to stop inflation. But I will point out,

continue to point out that the mechanism for rates to cut, quote, inflation is to hurt aggregate consumer demand. But consumer demand is not what's causing inflation. What's causing inflation is two things, too much freaking money and oil prices that are high because of geopolitical and delivery problems. And you know this. And the last thing I want to close with is in Mike's whole thing, when he talks about precious metals and oil, you need to understand, Precious metals have not, literally the technology has actually made it more expensive to produce precious metals, whereas it's gotten ridiculously cheap to produce energy. So natural gas and oil cost production has come way down over the last 20 years, whereas gold cost is actually higher, mostly because of oil as an input and environmental laws. And silver, we don't produce enough.

And so when you look at precious metals, technology is not really helping. and that's why it's going to be, and plus there's only so much in the Earth's crust anyway. It is, they're going to diverge based upon that deflation of technology not being existing for precious metals. So the monetary aspect is what you're seeing. So those two things I think are important. But the most important question really is, if Kalshi's right, okay, they're going to make a big mistake.

And yeah, you're right. I think we will tilt into recession here. and then the budget deficit gets bigger, which is exactly the opposite of what they want to achieve. I don't think they're that stupid, which case the market, therefore, is wrong in the way it's pricing itself, because corporate profits still look pretty good, as well as the simple fact that the market sold off last week on the basis of what you showed on CalShe. And remember, it's all about expectation versus what happens. It's not about what happens. So an interest rate flat in September, which I firmly expect.

or in the next meeting, I firmly expect to be the case, is going to either the expectations are going to change or you're going to get a rally in the back of that and the, you know, fall swoon won't happen this year. Now, if you do get an interest rate rise, we could have some serious issues and probably were required them to dump a bunch of liquidity into the market. So we'll see what happens. But I think those are the key things. Sticking with Warsh, I want to go to Chris and see what your thing is on all this. I think that they've made a lot of good points there, right? But I think he's got himself, he's got himself on a little bit of a pickle.

First of all, let me say for everybody. I'm a strategist and an equity PM, not an economist, thankfully. But I think, you know, Dave made a lot of great points there. I think it's a little bit of a tricky, you know, he's in a little bit of a tricky spot, right? I was actually on vacation last week, so I didn't watch the speech live. I read all the notes over the weekend. And so it's seemingly, well, if I read between the lines, my sense of it was he seems pretty, this is the second time we've heard from him, right?

So he seems pretty consistent in the economy is okay, full employment, et cetera, and that they're, quote, unquote, committed to the 2% target. And so markets are reflecting that a little bit. I don't know what to think about, you know, the prediction markets. I have not tested that. I don't know if they're accurate or not. Frankly, I don't really care. But Fed Fund Futures are moving in that direction to your yields.

I have been moving in that direction. And so, you know, as Mike said, there's a coin toss chance of a hike here in September. And there's 100% chance that this 25 basis point hike put in by the end of the year. I think if that were to happen, here's what I think about, right? You know, we've been doing this a long time, everybody. And I think of the Wall Street adage, three steps on a stumble. And so to me, that's the real question. Is this a one-time thing?

Is it 50 basis points? Because if it's going to be the beginning of a new rate hike cycle, we all know that that generally, that, you know, that can create a problem to get the backdrop as good. And, you know, earnings power has been off the chart strong. Might be a peak rate of change in earnings power here, you know, through Q2. So I think this would be interesting to see how it plays out. But if you just watch nothing more than two-year yields,

which always leads Fed policy in both directions. Two-year yields have been barking here for six months, but longer, that they probably need to move. My sense of it would be at this point that if they were to hike rates, and the September meeting, right, as Mike pointed out, and statistically it looks like a coin toss, I'm wondering if they hiked rates in September, would the equity market and the bond market breed the sigh of relief?

and I don't have any inside baseball knowledge, of course, but I wonder if that would be the case. And I say that because is that restoring credibility here, right? Well, the thing that's interesting about that, look, first of all, if the market expects a hike and a hike happens, it's not going to really hurt the market, right? We all know that. But the more interesting question is if you hike rates,

funding costs go up and, you know, on the short end, and their goal is Operation Twist, is there a scenario where they figure out a way to put in liquidity, they add balance sheet to bring the long end down and finance long. And that liquidity, of course, is jet fuel for certain aspects of the market, monetary things, the gold, Bitcoin, etc., as well as for corporate profits in many cases. I mean, look, in your equity strategist role, Chris, I'm curious what you think about this. There's all sorts of talk to cross currents hitting the largest single aspect of CAPEX, right, which is data centers and infrastructure.

The question is funding cost and whether or not that CAPEX will go forward, whether or not there'll be the IPO of Anthropic will happen. Will all these companies, you know, get there? And the political issue are these stupid CCP-funded, you know, literally nonsensical upside-down ideas. that are floating around social media that, you know, data centers are bad for communities when the United States needs a massive upgrade to its grid. And the only way you're going to be able to finance a massive upgrade to the grid is literally by funding data centers. I'm curious what you think of those cross currents, because that is a large part of what's happening in a lot of stocks. Yeah. I think that, you know, the funding part of it and the issuance of debt so far anyway seems to be,

that's gone reasonably well. I hear you on, you know, this, you know, probably in the last only couple weeks, maybe a month, you start to get this outcry against this whole thing, i.e., the building of data centers. It, you know, we talk to the management teams and we meet with the management teams, and we meet with the companies that are involved. That's seemingly going on, you know, unabated and up into the right. And we can talk about the implications on individual names if you want.

And we've seen a lot of that already, specifically mag 7 and the spenders and of course the benefactors the picks and shovels guys. But it's a common question, honestly, Dave, about, you know, how can the bond market absorb all this offering? This is in the paper, right? And it seems like this never-ending cycle of raising money in addition to all the money they've already raised. you know, the way I try and think about it is I go back to 2000, right? So I was an equity growth PM in 2000. That was probably 32. I thought I was the smartest guy in the room and all I really was doing was confusing

my own intelligence for a bull tape, right? And that, you know, of course, we all know how that ends. Everyone genius in a bull market, as they said. Yeah, right. Well, you know, I think fundamentally company by company, there's a lot of things that are different from 2000. And so the virtuous or circuitous cycle of this fundraising does worry me a little bit. But I think, you know, you've also on the counter to that,

we've seen some anecdotally some, you know, revenue numbers from Microsoft and Amazon and Google and cloud growth and that sort of thing. So I think it's okay. But I think as we move forward here, I would expect stock market to get a little more volatile, right? We can talk about midterms in September and all that sort of thing. and then the fourth quarter is the best. And the third year, the presidential cycle, historically anyway,

is, you know, massive S&P returns on average. We're okay. I think we're going to be in a lull here for the next four to six weeks. Real catalysts earning seasons over. Everybody knows about it. I think now we watch and see what happens with Warsh and see what they communicate here on a go-forward basis. And we have to keep an eye on all the other things that they've just mentioned, right?

all the bond offerings and the financing, so on and so forth. And, you know, if there's any double upheaval to, you know, to data centers in general. So, so first of all, apparently, if Dave and Scott shaved their heads, too, then the Bitcoin bull market is guaranteed. So Dave, you and I are going to have to sacrifice ourselves to that. Never, never going to happen. It's my best feature. Sorry.

Okay. I'm turning 65 in three months. And it's still this color. And here, not happening. I want to tell. I want to go more towards the Treasury and bond market then, since we've kind of talked Fed's debt, because I think that the interplay between the two is interesting. So first of all, this, you know, whether relevant or not, this just hit.

U.S. 10-year yield rises to 4.75 percent highest since January 2020. I don't know if you guys saw Besson's comments last night ahead of G20 here, but he pushed back on fears over U.S. debt market strains. You basically said, once again, reiterated, what are you guys? guys talking about this is easy. We can grow out of it. 40 trillion is no big deal. I wrote my newsletter about it this morning. I was actually going to write about the Fed, but this was the part that really gets me. So I just want to read this and I've mentioned this a few times. On August 19th, 2025 with the natural debt around 37.2 trillion, Bessett said that he and President Trump

were laser focused on paying down the debt. One year and a day later, and 2.8 trillion of additional borrowing later with the debt costing 40 trillion, his framing could change considerably. There's nothing magic about the 40 trillion number, we can grow our way out of that. I know that Warsh and Bacent are going to be working together. That's the point. But they're certainly not heading in the right direction at the moment. I mean, there's the same direction at the moment. What thing's significant about that is they are missing, those statements completely miss what's happening in the polls and the populations. They don't care about the debt or ran nuclear weapons. They care, but would it cost them to bay for gasoline and diesel and heat and electricity

right now? That's the number one issue. The party in power is talking about growing out of this, which means more inflation, which means the next president is going to be president of O.C. They don't get this yet. Maybe Besson's getting them. Trump's not getting it. The market's changed. So right now, Fed Fund futures for the set meeting on price at 65% for a hike and at the October meeting, their price at 90% for hike, that's priced in. But the number one thing that it's the difference between what Mr. Warsh said and what I heard. What I heard was, yeah, if Star Markle goes down a little but I'm off, I'm good, I'm covered, I don't have the hike rates.

And that's the number one thing. We all know this is volatile season. It's the last day of August. This is not the time of the year you put on short vowel positions. You do that in May. This is when you put on long vowel positions, long gammon positions, just hope you get the right way, at least for the next few months of what's going to happen. Stocks keep going up.

Obviously, that's going to be a problem because it means more inflation. The rich guys make more money. You're going to get crushed in the polls. Maybe they're going to get that eventually. but this is how the world's changed. And the key thing I think, opening the macro is the Fed's priced for hikes, but we all know,

Ivana's right about another negative payroll. We're going to take those out so fast. It depends how the market reacts. We might finally get that, oh, maybe we are getting a slowdown, and maybe the Fed's kind of stuck. They can't really do much because inflation is high. They just got to wait it out.

So I stick with that bias for the year, and I also point out, as I point out in my morning meeting, If you look at the broad commodity market, it's the highest versus a Treasury bond index since those peaks. There's a double peak in 2008, 2011. So about 20 years. And you look at gold, it's the highest since a broad treasury bond market, just a bond market since 1987. That's the kind of stuff.

All you need is a little tweak. And those little things kick in. So that's what I'm looking at. And the key bias I'm looking at, and I really found entertaining in the last few weeks, is the sentiment of people looking at the last big trade and not remembering, And that that's usually the last big trade, the next big trade. It's not the last big trade. And that is, oh, currency debasement, got to buy Bitcoin, but it, got to buy gold. So my headline tomorrow will be foremost studs turning the duds.

They're complete duds right now. And the number one thing is you look at all that hiking price in the market, 50 basis points. You don't want to buy risk assets in an environment. Maybe you get lucky because there's only one thing that really takes that out. As I mentioned, risk sass is going down, which means everything goes down. And then, you know, we have gold is the most highly correlated to the stock market, day basis, almost ever with it going up. But we know Bitcoin's highly correlated.

And then the macro, to me, this is where the trading year of a lifetime might be kicking in. If we start inching, keep inching higher, there's nothing there. But you've seen some great trading opportunities in almost all the metals this year, spikes, then pumps, then dumps, and then we're getting a little bit of a pump. And so I stick with my bias that the risks are volatility picks up. You want to be short things like Bitcoin and maybe even gold and maybe even silver into at least the next month or two and see how things work out.

The number one thing I'm worried about is copper. That's the one that looks to me just like Bitcoin and gold did a few months ago. It's ready to dump just like those did, maybe recover. I found this to be very mclonish. Commodities have never been this cheap relative to stocks. Yeah, I've been pointing that one out for a few years. And that makes sense. But it's also the key thing that we've been using is it.

Can you use stock market cap the GDP? Everybody gets that. I now use, okay, the stock market in the U.S. is basically at a 25-year high versus broad commodities. We get that. But it's that focus on debt. Again, everybody gets the debt, but you can't just focus on that liability without focus on the number one asset. Debt in U.S. 40 trillion got that. Enjoyed right in about that.

But the asset in U.S. is 82 trillion. That ratio is the lowest on a year-end basis. You know, that asset to liability is the highest in 25 years. What's the bond yield? A highest in 25 years. if we end here. So I just look at this right now. It's a good time of year to be flat and look for opportunities.

You mentioned, I know I mentioned earlier. I love to be, you know, short Bitcoin at these levels. It just gave you an opportunity. Prove me wrong. I once again reiterate that Kevin Warsh could have just taken his billions and sat on the sideline and enjoyed his life. And he decided to take the worst job on planet Earth at the worst possible time. Go ahead, Dave.

Yeah, well, that was right. I mean, look, it's very hard to have arguments when there's circular reasoning involved. And so let's let's just start with, let's just pick on one thing. You know, we can talk about gold or we'll get to Bitcoin in a bit. But let's talk about bond yields. You are unabashedly bullish on long yields coming down, correct? TLT, long TLT. Mike, you believe that four and three quarters on the long bond or five out the long bond is a high.

And we're going to see sub three and a half at some point in the next year or two. Correct. Is that what you believe? Okay. I actually think that's possible. I'm not saying that it's not possible. If that happens, that is unbelievably bullish, in my opinion, for gold and Bitcoin and monetary assets, because there's only one path for that to occur, and that's flooding

the market with liquidity and cutting rates. That's what I actually believe. So it's, which is fascinating. I am trying to think in my mind under what circumstance with, because if, if, you In fact, we hike rates on the short end and business investment gets hit and consumer demand goes down and we put a crimp on employment and the stock market goes down so there's less tax receipts. U.S. budget deficits will blow out. If at the same time, unless the long bond comes down and they can actually finance on the long end as opposed to on the short end, I don't see how the budget deficit doesn't do, doesn't double from two to four. I, you know, it's just, it's very hard for me to understand that linkage.

What I'm trying to understand, forget the charts, forget the technicals for a heartbeat. Let's just talk about the macro fundamentals. In what scenario do you see long bonds coming down? What do you think is happening to the U.S. budget deficit? What do you think is happening in the economy at that time? Because I want to understand the narrative underneath what you're saying, because I can't rationalize it in my head. So two scenarios. The macro biggest scenarios, stuff that used to happen, stock.

market dropping 20% staying down. Everything goes down in the environment. Number one, cryptos, possibly gold, but obviously, Bono. It's not answered the question. I don't care about it. I'm not done. That's two scenarios. That's number one.

Stock market goes down, normal correction stays down for all. Everything goes down. Bonnials go down. The other one is, I think that's more likely, but happen at least part of it into the year end is crude oil drops. Price of refined products drop like they normally do. Like the price of, unless a guess, always falls in the second half of year, because it pumps up in the first half year, almost.

That's the stuff Trump needs. I showed you the indication of natural gas oil sheds that shows that's going to happen. But to me, this is where we are all sock puppets, complete sock puppets. The Fed is, and almost all markets, complete stockpuff, this is stock market, especially copper. The stock market has to go up for these things to stay stable, bond yields to stay stable. They goes down, everything goes down. It's volatility season. It's time to maybe look for a little bit of least a normal, a little trade there, maybe a 5% correction.

God help us. But my point is it goes down and stays down for a while like it used to do. And there's your next recession. Because right now, if we move 10% up or down, that's 25% of GDP on, you know, that's like the most in 100 years. It's all the matters. The stock market is the economy. Wouldn't the budget deficit blow out in that scenario?

Of course. Just like it is in China, 300% of GDP, just like it is in Japan, 250% of GDP. And those rates in China, the 10, 10,000, 1.6%, in Japan, 2.91%. they've been tightening, but sure, well, but that'll just not. I try, I go on GROC, I go on chat GPT, and I get Chinese debt to GDP at slightly less than ours at about 110, we're at about 120. Where are you seeing 300? Goldman's X.

So Goldman says China, real debt to GDP is 300. I just, yep. Okay, no, I'm just asking. That's just a factual thing. I personally, I want to make, I've made the statement. multiple times that a president of aOC, and it's not just aOC, is a president that is of the Stephanie Kelton monetary theory camp, which by the way, pretty much every one of the Democrats that are running will be in that camp or look at China and say it's time to push the accelerator

on the bond market, you know, on, you know, at the Fed in terms of liquidity in order to accommodate that. They're going to say, well, if China has this kind of debt, we can to, we can spend our way out and they're going to print and they're going to print significantly. That is my scenario for Bitcoin a million. And I've said that before. I'll continue to say it, but I want to be clear that I think they're going to look at China and look at what you're saying and say that's the way out. And I think at some point the market's going to catch a bid on that.

We'll see how things go. But your scenario is the opposite. You're basically saying you believe, and I'm asking this question again, because we go back forth in this all the time. You think bond yields are going to come down because it's going to be recessionary and people are going to be willing to buy U.S. debt on the theory that recession is going to somehow make the U.S. able to pay back the debt easier? I just don't see it. There's no, you're living in a falsely world that I remember Lits, learning in the trading page, trading long bonds in 1980s was completely wrong. It's not true. Yes, right now is a bit of a pressure,

but the number one factor for riskless U.S. debt securities, particularly with Washington, control. There's inflation and inflation expectations. If the stock market goes down, that's the number one force of recession right now. That means those inflation expectations will shift to deflation. I just pointed out a normal 20% correction, get CPI next year to zero or minus. That's the way it's always worked in the past. We're doing it for much a higher level. That matters, but the government just buys it. They just started to. So here's my key theme I pointed out last week. Right now, we have an election coming up, and the U.S. government is selling crude oil, release this from the SPR.

And by the way, we have a massive surplus. We don't really need the SPR anymore. And they're buying bonds. I say go with that trade. You know what? We're going back in the way. You're not answering what I asked. I mean, Chris, am I crazy here?

I mean, do you see a scenario? You know, you're an equity strategist. What's the scenario where stocks drop, risk assets, drop bonds do well in this scenario where the bond market is panicking because of U.S. inability to pay back debt? Yeah, I mean, I think that the number one driver of equities is corporate earnings power. That's the first thing. And I think, but there is a level, direction and level that matters with the cost of money, the cost of capital, with rates.

Our opinion coming into the year was that the long guy, well, 10 year yields would be in a range here, 450, 475. And it's basically where we've been. Now we're at the, Scott put up this morning. we have told our clients that we don't see we don't see rates but 10 year rates trading north of five or five and a half and in reality 475 and through that threshold to the upside we want to be a buyer there knowing that five-year annualized returns and you know i'm scott's bullish tl i don't know if i go that far with whatever 18 years of duration but that Mike says that, not necessarily that I do.

Oh, okay. I thought you said it. But, oh, you're pointing to Mike. Got it. So knowing that five-year analyzer turn approximates the coupon, I think that's okay. That's okay. One of the things that we haven't talked about, really, is if bond yields do back up into that range, how much of a competitive force is that for equity investors, right?

Where that seemingly is pretty good entry. It's hard. I think what we need, Dave, honestly, to get rates to, to move, move down on top of everything that you guys have said, but I would just put it more simply as a, as a non-economist, we would need some assurance. This kind of goes back to my comments earlier, where I think if he raised rates in September or October or even December, or we get 25 basis points somewhere in that mix, I get everything you said about the debt and all that, I think from through the equity lens that would give the market some confidence

that he's not fooling around. Because, let's Let's be honest, right now, the bond market is testing him. I wrote this a couple weeks ago that the bond market is from Missouri, right? They don't believe it, and they're going to keep testing them. And they are. So I think profitability is not an issue. If rates got out of hand to the upside, that'll put pressure on multiples. Stock market's not that expensive either, right?

If you look on a bottoms up basis out to 2027, training about 19 times, and you go to 28, it's like 16 or 17 times. I don't believe the 28 numbers and 27 probably okay. But it's hard for me to see from this point, 475 handle, maybe a little bit higher, but it's also, I don't see a lot lower either in the intermediate period, say six to 12 months. But how much does the signal matter? I mean, Bessent literally tried to intervene,

or at least signal that he was willing to intervene a week ago and the bond market has once again said, I don't believe you. And the bond market said, I don't believe you when Powell cut rates. The bond market's saying, I don't believe you. And Besson says that he's going to intervene and basically, you know, defend a certain level on the long end. The bond market just isn't believing it. But it will. It's, that's, I agree with that. The key point is it doesn't matter until the stock market moves. A stock market staying lofty means bond yields stay lofty, fed hikes. I don't think the fed's going to hike because I think what's going to happen is

the stock market will do what they have to tighten for them. So what I heard from him, markets price for that. That's your big shift. There's your trade. Again, and this is September. We know people kicking in. You don't want to be short and vial at beginning of step, and it's just getting started. Bitcoin's getting some great vow this year and a bare market.

I think gold's rolled over to a bear market. I think silver's rolled over to the bear market. All the precious metals have. And then last one in my space, a big one is copper. Crudel's bounced in a bare market. It's the same price as 2007, first trade of theirs. So this is all that matters. If you want any view on anything right now, we are all complete sock puppets.

I wrote about this a few weeks ago. 5% S&P 500 up or down. That's all that matters on any value of risk model. Then people say, what's the causation? It doesn't need causation. What happened with Bitcoin and cryptos on October 10th? You just reach a level that it gets stopped out. Too many longs, leverage long.

So this is where we are right now. It's end of August. Enjoy it. But pick up your trading tickets and be ready to react. And my thoughts still are. Okay, you sell Bitcoin as a rallies. We've got a rally. Copper, I think, should be going lower.

That's a big one. Crudeau probably will drop, but that's a different trade. You're not off sides like you are in some of these markets. And all that matters from your value risk models, that's stock market. If you think bond yields are going lower, okay, as stock market going down, that's what you need. So. Okay. So since you've mentioned Bitcoin four times, now I'm going to dive there because I waited.

It's 936. So I waited by the way. Strategies buying again. Okay, go ahead. Yeah, what a surprise. He paid over eight. Great. You know, it's like, I'm going to continue to say, as a share.

of MSTR that that Fong Lee and Michael Saylor need someone who looks and feels like me in their executive suite telling them how to trade because they trade like morons. Every single time they trade, they bleed money. It's like it it's just foolishness the way they trade that they don't utilize the volatility. They don't understand the people are front running them, et cetera. We saw last week. It's not terribly surprising. I'm not, I'm not remotely surprised by what they did. I just want to mention as a micro strategy stairholder, and you know I'm friends with Sailor and I like the guy a lot, you've been diluted 6% in the last two weeks. All I could tell you is, I look, I like the investment thesis and the long-term thesis, but, you know, there are lots of

really good ones. If you look at the history, history and, you know, Eric Balcunis, I think, just wrote a book about Vanguard. You know, you look at the history of Vanguard, and people don't understand how Vanguard became the behemoth that it did. One of the key things that happened with Vanguard was Gus Souter, who ran their trading desk, turned trading from a cost center to a profit center, and brought their costs way the hell down. As they started to achieve scale, they realized that instead of paying brokers' commissions to execute their trades, which at the time was around eight cents a share on the block side and two cents,

share on the program side that since they were trading against the close because mutual funds are priced on the closing price. So instead of that, what they decided to do was they went to the brokerage community and they said, fine, you're going to trade for us for free. You're going to trade for us and half of the performance against the close of what you do, you get to keep and we keep the other half. And because their trades are always in large size, brokers tended to make multiple sense for share. Honestly, it was profitable for the brokers. It was profitable for Vanguard.

Vanguard managed to trade in a way where they paid negative commissions for trading, which brought their cost of implement implempending capital way the hell down. That small edge, which is measured in basis points, I mean, probably single digit basis points, low single digits, added up and allowed them to out-compete on a fee basis everybody else for a very long time. And from mutual fund perspective, Vanguard is the number one with a bullet. On the institutional side, Black Rock State Street, Northern, it was Northern Trust, which is now owned, I forgot who owns them now, but you know, whatever. You know, others have done okay and done well. But on the retail side, Vanguard owns that market. Why? Because they did the basis points. Now, strategy has a huge

edge, right? But if they continue to bleed away, the small number of basis points and the way they implement trading, they will lose. And I'm going to make that statement because I've got a lot of heat from all the sailor fanatics out there. People treat him like some messianic high priest. And honestly, I think he has, I actually generally agree with his global outlook. I think, you know, but, but this is the point there. But let's get back to Bitcoin part.

Yeah, sorry. I didn't mean. Bitcoin had the single largest one week rally in its history during a period of time, as Mike was saying, sell it, sell it, sell it. Now it's at a price, which is. right below after that very distorted overbought position, it's at a price sitting just under, you know, a little bit under, you know, $3,000 under, $4,000 under. It's 50-week moving average. And frankly, you don't have a rally like that without a digestion period. As luck would have it,

we are going into a period where you expect digestion. Even Mike expects not a whole lot to happen in the next two or three weeks. So you're going to have two or three weeks, probably range-bound, somewhere between the low 70s to the high 70s. It'll kind of sit in this rally. We're at 78 now. We're at 78 last week. I expect it to be range bound for a while as it digests the largest week that it had. But the reason that it happened is because of a narrative shift.

And that narrative shift matters. Because what I keep saying with Mike is, and we're going to talk about gold also. But Bitcoin is way too small for anyone to care about. And Bitcoin's correlations have been dropping. to the stock market over the last couple of weeks also because of this narrative shift. We've seen three major narratives that have held Bitcoin down over the last couple of years, over the last year since October 10th. One was de-leveraging.

That happened. It flushed it out of the system. Another was quantum. I don't know if people paying attention, but there's a very well-regarded paper out there, which calls into question the fact that quantum will ever, literally ever be able to break Shores algorithm. And frankly, we're not talking about the next two years.

We're talking about like ever. Now, I'm not saying that they're right or wrong. I am nowhere near capable of understanding the math involved, but the people involved, and if you look at it, it looks pretty compelling that it's a lot more difficult to get that next level. Anybody who's done anything in computers understands the 80-20 rule or the sometimes 95-5 rule, which is that the last 20% takes 80% of the effort, Well, it gets exponentially harder as you get towards that.

And this is putting a squash on quantum. At the same time, we've had not one but two that I've seen and probably more proposals inside the Bitcoin community to make the signatures quantum resistant. You're not hearing quantum as a threat anymore. That is a major problem because a lot of capital was sidelined institutionally from that. That's happening at the same time as the third, which is Bitcoin as a monetary instrument coming back to the four. repeat that Bitcoin is priced right now at less than 5% of gold's monetary value. And so, you know, there are a lot of smart money that's been accumulating it based on that. And that's not

money that's going to move based upon 25% of interest rates or the stock market jiggering 5%. The money that moves there is that hotball of money. And we saw something else this past two weeks. We saw the largest short squeeze in Bitcoin's history, which, by the way, is much smaller than the long side selling capitulation. And so, you know, what we haven't seen are call sellers turning into buyers. And so there's a lot of potential fuel out there. And so Bitcoin is in a very interesting situation. Gold is different.

Gold is in the middle of its trading range. And gold is the same narrative. It's a monetary accumulation. China has been accumulating. Other central banks have been accumulating, right? You know, they're looking at the debt and they're seeing this and they're buying it as an asset. Who knows what we are going to do? But I personally think that the fundamentals of gold are, it is basically fairly priced around these levels. You know, the gold counsel will tell me

I'm crazy that it's undervalued. You know, others will say, well, what the hell is the value? But I think fair value is probably here with today's level of monetary aggregates. And M2, by the way, continues to move higher even as debt, because it has to, because if M2 doesn't move higher, if liquidity doesn't move higher, then what could be a normal correction could turn into a catastrophic route and you could see budget deficit blow out to the $5 to $7 trillion. And so all of these things are narrative, Scott. And for the first time in over a year, we're actually seeing, you know, smart people talk about the debasement trade.

understanding what does it mean? And to ignore that is just wrong, in my opinion. Okay, that was way too long of a diatri. But I do think that there's a lot going on here. Just quick response on that. There's a difference between being bearish, a bear market and to say sell or to be short a bear market, I was bearish crude oil around 60 and then something changed. It gave you a chance to sell above 100. Now, there's a big difference between your position and your view and what you're doing. I've been bearish Bitcoin, you know, since too early, late 20204, and you've had some opportunities to sell. This, to me, is a tremendous opportunity to sell. Yeah, 60 was great support.

We pointed that out forever. 77, I still consider myself short to you, Dave, at 78, which is used end of the year, kudos to win or lose on that. And to me, that's where you have to define the difference between the trend and the trade. You don't just short something. Let me. You spoke for a good 10 minutes. Let me finish. So the same thing is.

And also I'll point out is everything you see, every price you see in that screen is fair value now. It's going forward. So I can trust your view about gold. Remember, I've been bullish Bitcoin for a long time. I've been bullish gold for decades until this year. And there's sometimes you have to flip and say that's the best gift we've ever had last year in gold ever. Now, I do walk into conferences and they're so used to hearing this from me. They do not like me now.

I love that. But I have to point out, this is the facts of the market. The facts have changed. All these markets you're looking at gold and Bitcoin are the most highly correlated to stock market, almost in history, and they're facing 50 basis points of hikes. And the only thing that's going to make that go away is the stock market going down. A stock market goes down, and if you think crypto is going to go up, I wish you luck with that trade. Every value at risk model tells you you're going to lose money, but a lot more. And I want to point out one thing I'm going to be publishing tomorrow.

As you look at that price of Bitcoin, just take off one zero. It reached the same level as S&B 500 in 2021. It's the same level right now as S&B 500 in 2021. Let's go back those last five years. It trades it three times of volatility. It's highly correlated by the definition of risk management and portfolio management. Maybe Chris can comment on this. This is a dud.

It's a horrible performing asset. Now this is Bitcoin. You look at the whole crypto space, it's just a Bloomberg galaxy crypto index. The fact is it's a high volatility, high correlated dud versus S&B 500. All that matters. If you're bullish micro strategies, you're bullish any, most of the crypto space, and a macro space is you need that stock market to go up. And by the way, for five years, you've been underperforming, basically.

Good luck. I'm just pointing out facts of market performance and levels. And I think it's volatility kicks up. All those positions are probably going to decline. And that's why I stick it out. I'll say I'm short copper right now at 6.60. Now, I can't trade, but I'm willing to try it because I tried earlier at 6 and I was wrong. And it's up 10%.

But the stock market is up 12%. See the thing is, this is all the manners. We're all sock puppets. Chris, I see nodding, winking, head bobbing, shaking. You're muted, Chris. I have a muted because we were hearing Mike through his speakers. Go ahead, Chris. No, I think one of the things that Mike said is, I think we think we should talk about a little bit,

which is the notion of time frames, right? And this is true for anybody that wants that's trading any market, commodities, rates, spreads, equities, crypto. I think this is really the starting place, right, is depending on what your view is, you need to have some sort of time frame in mind. And then you need to set your risk parameters, i.e. your stop loss GTC properly, right? And so I think we've just seen, we've seen some of this here, certainly in crude oil, certainly in Bitcoin and everything else, where semiconductors was coming to mind as Mike was talking. So they had this parabolic move in the first quarter.

I'm like, this is a train wreck waiting to happen. Okay, we all know the fundamentals there. Great. Earnings power, great. Blah, blah, blah. Stocks already know that. The names come completely unglued. Bottoms, bounces, right?

So you could, most people would probably argue, okay, that that parabolic set up a major top and these things are going to distribute for a while here. But in the interim, they can rally. You can call it counter trend. They can come back, so on and so forth. So I don't want the words in Mike's now. But to me, what I heard was kind of making that point, right? is you need to make sure before you enter any trade,

what your exoplan is numeral uno, right? And you need to define your time parameters because here's what we all know. We've all done this. You take a position for a trade and suddenly you're wrong. And now it's an investment. That is not what you want, right? That is not what you want. All that does is prove to you're dead eff, dead eff and wrong, right?

So you don't want to do that. That's what I heard Mike say. And that's why I was nodding my head. And I've made that mistake. You guys have all made that mistake. And that's something to just be mindful of. Be careful of matching your trade with some sort of counter turn rally. It's all profitable.

You can do all of it. But make sure you know what you're doing before you start it. Entry point, exit point. Mike said a couple times. The game changed with oil 100%. That happens all the time. Are you ready to adjust if the game changes? If the news flow changes.

If the reality on the ground changes. If the market, there you go. if the market that you're trading changes. And, you know, I feel like this year it's changed very, very quickly. So you've got to be nimble and you've got to have discipline. Mike talked about, you know, VAR strategies. All these air pockets up and down, that's exactly what it is. It's not a long-only manager sweeping offers of smashing bits.

It's computer-based, var-based. And you need to be aware of that. And the levels that they use as well. Sorry, I just kind of want off on a tangent there. No, but it's one of my favorite things ever. One of my favorite statements ever. Because people ask me, I've been asked this multiple times. What's the largest mistake that traders make?

And the largest mistake that traders make is let their, is instead of cutting losers, is they turn quick trades on a thesis of a trade into an investment because they somehow get religion later. I mean, it's, yeah, You a trade becomes a passionate community member. That's the, it's so true. It is, you know, it's like, yes, that is maybe the single most important thing.

If our listeners think, hear one thing today, repeat, just rewind to where Chris just said that, never do it. If you buy something on the basis of a short term idea and turn into a long term holding after the fact, the odds of you being right are solo. and it's incredibly destructive. But that said, the flip side is also true. If you sell something that you have a long-term thesis on because of its price move, you often end up being very unhappy. I mean, think of all the people who bought Amazon when they saw AWS and said, this is going to be a big thing.

And they got a double, a triple, a quadruple, a 10x. And they said, this is awesome. You know, I got to take my profit here. And it ends up going up 100 or 200x and they missed the big run. those metatheses are very important. And so a large part of what I'm doing on this show is talking about metathesis. I will say it until I'm blue in the face. Bitcoin is 120th, the monetary value of gold.

Bitcoin will either succeed by getting to that level, by not being cheap anymore, or it will fail or become a niche product kind of where it is or lower than it is today. That narrative has nothing to do with technicals. It is nothing to do with what's going on. And that is something that matters to me. And so I make that point constantly. You know, when you don't take into account more dollars in circulation and constant, and not just dollars, every currency in the world, the entire Fiat experiment since 1971,

when you ignore hard assets to that, you're missing the boat. If you conflate the technology of being able to produce assets cheaper than you're missing the boat, If you ignore, if you look at stock market to GDP without looking at corporate profits to GDP, you're missing the boat, right? You know, the politics, though, we're very real. Mike's right about that. Wages to GDP are going the opposite of corporate profits. By the way, those two things are related. Productivity is a big deal.

That's going to cause all sorts of political cross currents. We're seeing it in lots of countries around the world. It's no surprise that the authoritarian countries are doing better than the, quote, democratic countries, as the democratic countries, the European ones, are slowing down, whereas the Asian ones are doing better because the people running the show say, screw it. We need to keep doing this. We need to keep investing. And so you're seeing these are very important macro-theses. And Mike, you've been on record many times of saying something I agree with, which is America will outperform the authoritarian countries because of our unique characteristics. But at the same time, you and I are both afraid that that idiocracy is taking hold

and we may very end up with, and that might be a problem for, you know, there might be a cyclical problem that we're facing until that self-corrects. I'm curious what you think about that. Well, I obviously biased, go America, but our self-correcting mechanism is unstoppable. The key thing is these deflation flurry forces out of China are unstoppable at the moment, unstoppable. Yuval Noah Herrera pointed out the, you know, the Sorcerer's Apprentice and Mickey Mouse and the broomsticks are unstoppable. Scott Beston said it realized that's trickling down the rest of the world. The key thing I want to point out is a former shareholder of Microstrategy when it was Microstartagnet. It's a former bullish Bitcoin person.

The facts have changed. It is no longer digital gold from Nathaniel Popper. When he wrote that book, I read in 2016, it was really bullish, was now they're stable coins. It's not no longer pair to pair of cash. Why should I bother crypto? And by the way, there's millions of other type of cryptos I can choose from rather than Bitcoin. That's why I started using last year analogy between Bitcoins, just among a bunch of pigeons, and at least gold's among a couple of dubs.

There's only three other precious metals. So to me, that's what's changed. And the thing that's also changed is we've got the ETFs that launch. Bitcoin's mainstream now. You can see that volatility collapsed. We knew this beginning. And we got the final biggest pump of them all. Mr. Trump's Faustian.

bargain switching over to me and finally figuring out that this space is favorable and invests in treasuries and U.S. dollar via stable coins, gulfs him get elected, poof, that's over. The trade is over. You're living in the last big trade, and I'm pointing out the last few years of performance just sucks. So to me, this is good luck. Maybe stock market keep going up and maybe it'll keep cryptos stabilized. But once we have a normal correction, cryptos, most of the silly ones will go to zero. I think that still started. I know Shibuino's still worth about $3 billion. It needs to go with zero. Dogecoin's still worth about 13 billion and needs to go zero. Once we get through that, then we'll get a chance to buy things at cheaper prices. That's the question of when. But my,

I would argue that the trade was over and that the hotball of money circulates and we have some evidence that it may potentially be circulating back to Bitcoin. I mean, you can't write off a 25% move. Oh, sure you can. You can't. You can't share at the fair market rally, but I think you have to at least acknowledge that the regime changed a bit and you should be paying attention. And it's interesting because Dave makes the very apt point about what Bitcoin could be, which is a long-term investment thesis for someone who dollar costs average. And Chris talks very clearly about how you should treat it as a trade if you're trying to trade around that position, which people should not be doing if they believe what Dave does, by the way. And now we're in that very awkward

position that happens in markets that I think is very instructive for anyone who's here. We had a lot of people waiting for 50 and 45 to buy Bitcoin. And every one of those is wondering what the fuck they're supposed to do at 78K. So let's be careful of the micro view of people in cryptos. The macro view, as I pointed out, is people keep saying institutions are coming, you have to be careful. They're not going to go buy the dud with poor performance and any value at risk model. The management like me, former risk manager, look over and say, by the way, senior management, what are you buying? What's the performance? It's poor. So that's my point is, we've had a balance. I said, this is your opportunity to sell. So I stick with myself,

being short, Bitcoin from 78 with Dave, prove me wrong by the end of the year. I'm actually not trying to argue whether his premise is correct or yours is correct or not. I'm just stating factually that people who believe in that premise and we're also trying to time the market are feeling very uncomfortable right now. Well, that's the key thing I pointed out from very beginning. When people like Michael Saylor, you got to believe, your risk matter to say, no, never believe. Give me facts of performance, what I can expect. The question is, you know, not you specifically, but let's, let's, you know, not you specifically.

but let's say you bought it. You said, okay, crap, the trains left the station, even though you went to historically overbought and straight to greed and all those things. And he bought it at 78. Where's your stop? You know, because you've got 69 below where the 200 weekly MA is. You could come back test that.

You're looking at as a trader. I'm thinking it's mainstream now. It's an ETS. People who buy ETSs don't buy it just for a trade. Maybe some do, but most of the people who asked me, you know, before it was the institutions who asked me. mainstream retail asked me, they want to buy it and make a quick 100% and maybe get out of some. You should never sell everything.

My rules, when you make 100% you sell got to sell something, give it back to the market gods, which was a mistake Mr. Saler made on the 10x. He didn't give some back to the market gods. But that's my point. You're looking at as a trader. You are traders. A lot of our listeners traders. There's an investment standpoint, from an investor standpoint, putting in this portfolio,

this is no longer things that I love in 2020. So 2020, this merit of a currency based. Now this is an aging, poorly performing asset that you can trade. I encourage people to trade. But as far as putting it in your portfolio and expecting to help enhance your portfolio, which is overweight equities, good luck. It's been showing for five years. It's a poor addition to any portfolio.

I mean, I don't want to re-litigate it. I'd rather listen to Chris. You could search back for the last several weeks, months, years about why I think several of those things are wrong. But the narrative around Bitcoin has changed over the last couple of weeks. and the narrative around crypto is really focused on value. And what's going to happen with reg crypto is those things that you see hyperliquid making an all-time high because hyper-liquid, if it were an equity,

would probably be double or triple what it is today, right? You know, because it's just based on price to earnings, right? You know, it's just, it's ridiculously profitable. You know, the same thing that's driving Robin Hood, by the way, on the equity side, is earnings, right? And money being made on the on-chain economy. There's so many things going on there. But like you, Mike, I agree that there's still a lot of complete shit worth billions of dollars in the crypto world. But I don't think that has the damn thing to do with Bitcoin or those or those assets that actually have real potential. Yeah. Chris, you get the final words here.

I know we're right up at 10. We can go over though, but, you know, if you can. But, you know, go for it. I would say this, right, from a high level, hell of a move here in the first eight months of the year. Equity's all earnings driven, entering the period of higher vol, which we've all talked about. We should expect it. You shouldn't be surprised by it. One of the things, sorry, one of the things that's come up a couple times in the conversation is knowing the difference between trying to trade something and like a long-term DCA approach or an investor, not a trader, those are two. completely different things. Make sure you understand which you are at the outset. I would prepare

the ship for a little vol here. I think the earnings power looks pretty good going through calendar 27. We know that midterm weakness should be bought historically. We just published a paper on it. You can read it if you want it. I hope we get some. I'm a buyer of risk assets here if we knocked around a little bit. There have already been four pullbacks here between this year between four and nine percent or three and a half and nine percent. People forget that. Hopefully we get another one here, give it to me. I'll take it. And it happens, you know, September's generally a rough month, but once again, just to the top here, midterms can be a bit different. Five of the top seven Septembers or midterm year. So maybe they're going to ramp up the rhetoric to try to

keep the markets afloat before the election. Hey, one of the things that we talked about last time was on with you guys. I was thinking about this this morning. We were talking about, I think the narrative on the show with you three guys, tell me if wrong, was Bitcoin should be going down. but it's not going down, right? And one of the things that I said at the end of the show, even a longer affecting the market, exactly. Yeah. And when something doesn't trade in the direction you think it should trade in for the reasons that you believe, that is a signal to not, don't discount that. You could get run over like you just did if you were waiting for it to go to 50 and it just ripped your face off to 8. More shorts got run over that two weeks ago than in the

history of Bitcoin. So we don't need to debate whether that's true because it happened. So now, now I guess we see when all the longs pile up how low we go before we've figure out the direction. Because, yeah, you don't get to leverage long the top of that move at 80 and be right. So good luck. Yeah. Yeah. All right, gentlemen, thank you so much.

Another incredible show, Chris, we loved having you. Dave, Mike. As always, I love hearing the two of you debated out. We'll be back next week, of course, on Macromandie, and I've got a, you. Daily Wolf on Yahoo Finance today. See you guys. Thank you.