The Wolf Of All Streets - Bitcoin HOLDS STRONG As Global Energy Crisis Unfolds! Should We Be Concerned?

Episode Date: March 9, 2026

Global markets are showing signs of serious stress as energy prices surge and financial tensions escalate worldwide. Oil is exploding in what some analysts are calling the worst energy shock since the 1970s, while major equity markets in Asia have suffered sharp declines. At the same time, a massive regulatory battle is unfolding in Washington over the future of crypto. Lawmakers are pushing forward with the Digital Asset Market Clarity Act, a bill that could determine whether the SEC or CFTC ultimately oversees the industry and potentially unlock the next phase of institutional adoption.

Bitcoin is holding strong even as global energy markets go up and down like illiquid alt coins in 2021. We saw oil go all the way up to $119 a barrel before dumping immediately back down to around 101. Since I am definitely not an expert on oil markets and the effects of war, luckily we have Mike, Dave, and James here to unpack it all right now. This should be a good one. Let's go. Good morning, everybody, and welcome to Macro Monday. Before we get started, please like and subscribe and do all the things that YouTubers are contractually obligated to do them to go ahead and bring on the team right now. We've got Dave, Mike, and James, good morning, gentlemen.

Mike, if you did a shot every single time they said oil in the morning meeting, how drunk would you be today? I wouldn't be sleeping because I usually can't handle my liquor. or a little wine with alcohol. I'd be sleeping. My wife's good at that stuff. But you want to start there? Because they asked me to start the meeting. And yeah, my assumption is that oil is the hot topic.

I mean, what a day. Yeah, well, first, they asked me to start. Well, let's go to first of our economist's views. Ana had some key points. Her key point was inflation. If this keeps up, the oil spike like this, we're fully expecting the inflation numbers to kick in. Her quote was, are we at June 22?

And that in June 22, 22, CPI peaked at 9.1%. And, you know, that was because of the war with Ukraine. Your quote is, are we there? Her point is, US gasoline prices have bumped up to near $3.50 a gallon. That was $3 dollars before. That's going to be a factor in CPI. She thinks it's going to add four to five tenths to CPI in March, which she could see CPI six to eight tenths, which would be the highest in years.

Overall CPI this year, things might be by March would be 3.1 and 3.2% on a year-over-year basis. She pointed out for the CPI that's coming out this week, we've seen a new shock in metals prices, most notably aluminum jumping up a little bit higher. So I think that's with January-February shock. And the ISM metal prices have jumped. So this is all bad from a consumer price index standpoint. Chris Kane, our economic strategist, I'm sorry, our stock market, strategy is point out that signals are clearer in the oil level. When it gets above 100,

it's usually a problem. Typically, just going up or down, it doesn't find a lot of correlation. But when WTI is above 100, it's usually your problem for margins, profits, and stocks. And I pointed out the key thing for oil is, as you mentioned, the high overnight and Brent and WTI, those front contracts, was $1.19.50. And that's kind of a shocker because I watched it trade a little bit last night. When WTI trades above. Brent, it's classic short cover. We know we're cleansing the market of shorts. How much we do it is going to matter.

But I pointed out, that's the front contract. It's the December that matters. December crude oil right now is running $71 a barrel. That's near the high of its range. It's been trading almost 10 years for this contract. But its significance is it will be the front contract in October right before the elections. And you have to ask yourself, we all know what happens. If it's higher, certainly if it's near the front contract,

about 100, that's just toast for Republicans and maybe for Mr. Trump's legacy. I fully expect it to be lower. And the key thing I published on today is this pretty significant superabundance of food and energy in this country. This is how things have changed from the past. And if you look at yourself from a producer standpoint, yes, it's horrible to war and everything. We have to be cognizant of the death and destruction. But if you're a producer and you got a chance of a hedge at higher prices, you're doing that. And you clearly see that backwardation. You've seen that. and corn, got them there five bucks last night. I just hear producers just saying, thank you.

Now I can bring on a crop at a profit. And same thing for all the U.S. producers with the net exporter surplus in the U.S. and Canada of around 8 million barrels a day. To put that in context, when crude oil peaked at 145 in 2008, we were importing 12 million barrels of day. That's U.S. and Canada.

So that was my outlook from commodities, but it's not just crude oil. It's the same problem in grains. Grains are looking at this is, thank you. I got a chance to sell. And the key thing I want to end with that I think significant is the term I heard this morning, first thing I turned on the news and there was an analyst on Bloomberg who said, gold and de-risking in the same sentence.

And that's the problem I have with most other markets have gone up a lot. Gold is now a risk acid, just based on its volatility, 180-day volatility in gold, is 2.4 times S&B 500. That's the highest in 20 years. And I think this is events a trigger to sell. If you weren't long it before the event, buy the rumor sell the fact. part of the problem. I'm passed back to you and I'm sorry I do have to hop off from a bit and I can come back. Yeah, I guess for you since you have to hop off or anybody else, he mentioned 2022 in Ukraine

Dave or James, you can take this one. I've heard a lot of people making that comparison to the price of oil, but at that time it was sort of this existential threat of what might happen to oil and it feels like this time with the straits of Hormuz actually closed and, you know, the biggest producers of oil in the world actually shutting down that this is a very different situation. Mike, you want to handle that or do you have to hop? It's a short-term shutdown now for an event that is unprecedented, and that makes sense. Now, this is one thing I completely got wrong. I fully expect when the U.S. military went in and they would say the first focus,

okay, let's make sure the street's not closed. Well, it's close. How long that lasts? I don't know. But the bottom line in the macro is we've seen these things before, the pump with Ukraine included grains and everything. But remember, that high got to 130. And then what happened? It shifted the world order.

That's fully what I had expected. It shifted world order towards EVs and less demand for crude oil and more supply from the places that were already creating access supply. Here we are now. When that happened, U.S. and Canada were exporting maybe 3 million barrels a day. Now it's 8 million barrels a day. So this is a rest of the world problem right now. If the straight stays closed, that's a problem. But right now, you have to admit, this is an oversupplied market that just got a great incentive to bring.

on more supply. From the part of the world where the bulk of that oversupply is coming from, the Western hemisphere led by the U.S. It's just how it cycle works. It's the auto-collar correlation factor. So be careful about the short-term shutdowns. And I'll give you one example. 2019 and Iran proxy hit Saudi oil supplies really hit them hard, crude out pumped up for a week, and then went back to that downward trend. All right, Mike, I know you've got to jump. So we can go and you'll be back in a few minutes. Guys, Mike, we'll be back. Just what I maybe as he's leaves we can put in context of just how crazy this oil market is right now. The energy crisis, crude oil up 30, Brent up 26, heating oil 22. You can read through those

at your leisure. World's largest oil companies, Saudi Ramco Kutch production at two oil fields. We obviously know that Qatar had done the same last week. We talked about it. If you're wondering about that price action, we literally have had U.S. oil futures on track to rise 60% this month. G7, if you're wondering why we saw up to 120 and down, because the G7 said that they're basically going to go deep into the reserves and release as much as 400 million barrels of their 1.2 billion total. I mean, it's just insane. The most severe energy crisis since the 1970s, according to the Wall Street Journal. I mean, guys, what's going on? And oil's round-tripped

it, too, if you haven't paid a bit more than that. Get back to 100 now, right? And we see it every time. There's a, and it's funny. So when there's a hurricane in the Gulf, you see these spikes, you know, because there's worries that refining capacity is going to get destroyed. You see, you know, you're seeing it here. The math is ludicrously different than what people think. So if you're in the United States, understand that, that we import somewhere in the neighborhood

of 400 and like less than half a million barrels a day from the Middle East, uh, we self basically could be self-sufficient. We aren't for a variety of reasons. The Saudi crude is lighter, et cetera. There's, we don't have the, we don't have the refiners,

refiners to, uh, to refine our own oil. That's the, that's the craziest part of all of it. We could be independent, but, you know,

there's a lot of factors around that and a lot of us to do with, you know, environmental and stuff. And it's just, It's insane that we don't call it what it is it's the it's the green news scam so one of the only things that I agree with Trump completely on But that one it's just it's insane and you know I'm sorry I don't want to hear I would love the global warming Nazis to try to argue with me But you know I'm sorry guys The US could literally go to zero and it wouldn't make a damn bit of difference

Given what's going on out of India and China and it's been it's been and look Germany committed effectively national suicide for and you've seen it in terms of their electricity prices, et cetera. That's the reason. But it doesn't matter. Let's get off of that. As much as I like, you know, what's important is for people to understand that. But it's just important for people to understand because you always hear that we've,

you know, we're one of it is the largest oil producer in the world and we are still importing oil. They don't understand why. Right. That's why. Because we can't find our own oil. I wanted to get to, James. Yeah.

We live, even with the Strategic Petroleum Reserve, of having been drained by Biden to try to help out with the election, even with that, even with Trump having failed and kind of been asleep of the switch and not refilling it when it got into the 50s, when it was below 55, we have two years, years of being able to replace 100% of all of imported oil sitting in the Strategic Pro Petroleum Reserve. Two years. And so, you know, that is, that tells you from the U.S. perspective what's going on.

So why did West Texas jump above Brent? Brent usually trades at a significant premium to West Texas. Why? Because people need to be able to get at oil. And even if you have to go the long way, you know, you can't get the oil out of the Persian Gulf because the hormone straits are closed. So you get it from wherever direction you're going to get it. And that's why.

And so when you see these sorts of things, unless you think that somehow, unless you think that Iran is going to mine the straits and cut it off for a year or two, which would be incredibly devastating to their benefactors in China, you have to believe that it's short-term, which is why, by the way, the markets in December are very different than the markets now. In fact, the markets I read this morning are effectively pricing the conflict to be over one way or another in May. That's what the oil markets are pricing. So now ask yourself the question. If you're valuing the long-term cash flows of any asset or the long-term value of any asset,

something that is expected to be over with in May, what does that mean? And the answer is not a whole lot, which is probably why Bitcoin, for example, is at 68,500 or damn close to it right now, which is by the, for people who are keeping score at home, the exact same price it was at three weeks ago, two weeks ago, one week ago, and now today. And we're getting this trend, by the way, that we get a quote unquote dump on the weekend as some sort of news happens and nothing else is trading and by Monday morning it's a non-event. That's right. So, you know, when we start going into, because our audience wants to care about how macro impacts Bitcoin, the answer is not a whole lot. Bitcoin is going to eventually delink and trade on its own things and we can talk about why and how it's trading.

When you look at stocks, we're still way closer to all-time highs than anything else. Yes, there have been a few sectors, the software sector that's been pummeled for a variety of reasons. Most notably, yeah. Most notably AI, which is a macro factor on its own. and definitely deserve some conversation, but we can table that for now. But the real question that people have is what's going to happen with global liquidity. And this is why, this is where I absolutely am dumbfounded at the stupidity of so many analysts. So oil prices spike, it will hit CPI.

Unless you think that the people running our government are stupid and want to self-immolate, ask yourself what else is happening? Well, we're spending boatloads of money building bombs, building missiles, building munitions. We're going to spend boatloads of money to reconstruct both Lebanon and Iran when this is done. I read somewhere that, and I don't have this verified, so maybe one of you guys can verify it. It was something I saw over the weekend that Trump wants to spend as much as $1.5 trillion on defense this year.

or the Department of War. So that's a 50%, you know, raise from the 900 billion that we're currently spending. Is that, has that been confirmed? I don't, I have seen the exact same figure, but I don't, he can't do that unilaterally, James. I mean, you know, right. But also isn't this effect, I mean, the amount of spending that's happening, won't that naturally happen if the war continues to go on? Yeah, it has to. A million dollars a day at war and more continues on for 365 more days around

that's divided by seven. And so where is the money going to come from? Right. You know, we all've seen the memes. We know what's going to happen. And, you know, it, you can look at it and say, well, okay, but then, you know, that'll be inflationary.

They're going to print more money. Well, no. I mean, yes and no. They're going to push it into assets. That's what they always do. They're going to enact policies so as to divert it, you know, take advantage of, you know, I saw Jeff Booth did a tweet storm over the weekend. And the most important TLDR, I have no idea. I didn't have a chance to read it in depth.

But the headline was that natural deflation would be down 5%. And the target of 2% inflation means that you're going to have monetary inflation of at least 7%. And of course, they'll overcorrect. Now, monetary inflation of 7%, basically, in my little P brain thinks, okay, well, that means they want assets to be up across the board by 7% just to stay even. And because they want, you know, obviously it's policies to channel into assets. And so within that backdrop, you're selling assets because we have these words. The word that I think has become, you know, I think the meme from the princess bride, the word, Risk asset now is, you know, that famous meme. I do not think that word means what you think it means.

I mean, risk asset used to mean, used to, mean that you didn't know whether the company was going to be successful, whether their competitors were going to be able to win, whether the product would have market fit, you know, whether their business plan or infrastructure or turnaround. Now a risk asset is anything that moves with volatility in a world which is basically the markets are turned into a giant casino flooded with excess Fiat cash. which means, drum roll please, everything is a risk asset by that definition. And when you do that, what does that mean? Well, it means that you've lost the meaning of the word risk asset. And that's the world that we live in.

So when gold is a risk asset, as Mike said, and by the way, I don't argue with him. It's the way the market is. It is absolutely traded like a risk asset. This is not me taking a pot shot in my role. I will only do that to his face. I'm not going to do that behind his back. as much as people the audience might want me to, screw that.

Mike's a good man and he's not wrong. But when the markets are treating non-risk as risk, what you're really seeing is it's the prediction market, you know, phenomena, bet on everything, right, Scott? Yeah. On the weather, why not bet on where oil is going to go? Last night, I'm sitting at the World Baseball Classic watching Israel win a game against Nicaragua, which was, which was,

they didn't even know they played baseball. It is, well, I mean, it's like all these countries it's all it's you know they all have people with some you know some whatever to it most of them don't live like the the netherlands is a good team because they have a lot of people from curaceau you know and and you know dutch virgin islands or dutch islands or whatever but anyway it doesn't matter it was a lot of fun you know great atmosphere etc but i'm sitting here on my phone and weirdly the wi-fi worked which is because a lot so many people are watching baseball and i'm watching oil and i'm thinking man there's a short there are people

there's going to be some body foot in the top of the pool tomorrow. I mean, and it looks exactly. Coil traded like not even Bitcoin. More like Solosh. Yeah. James, you actually kind of wrote, not specifically about the risk side, you know, that everything's a risk asset, but you wrote this amazing newsletter yesterday,

and this is the tweet that was the inspiration for it, but that a record 95% of asset classes are trading above their long-term trend. and you said when there's no safe haven. Kind of the flip side of the same idea. Exactly. Well, yeah, and you know, people think gold. Gold's a safe haven. And well, okay, so getting to what, you know, what Dave is saying here is that,

look, gold trading like that, like a risk asset, everything's a risk asset, stocks are risk asset, real estate, you know, credit, private credit, anything that's not just a T bill is trading like a risk. asset right now and you know even the the long bonds are all over the map everything is trading wildly with volatility so where do you hide you know and the typical answer is but you it would be gold that's the typical safe haven asset that's the longstanding safe haven asset the interesting part about it though is that you know we've seen the last number of corrections and this that's what i wrote about in here is that the last number of corrections gold is it you know either

held in there or recovered the fastest of everything. But then on the other side of that, when Bitcoin became part of the picture, and that was after the 2008 crisis, so once we hit 2020, 2020, then, you know, Bitcoin, it took a little bit longer, but it way outpaced gold after the recovery. And why is that? It's because of the money printer. It's just exactly what Dave just said. you know that they're going to print money.

And it's going to be on the backside of inflation and the deflationary effects of AI. You know, we're getting into a period here, which is extremely, it is unsettling, to say the least. And why is it unsettling? Because we're seeing people being laid off all over the nation in, you know, typical white collar jobs. You're talking about middle class people that are,

being laid off with decades of experience because they're just being replaced with AI. You know, you're going to see all these industries have a, there's going to be a massive consolidation. We saw, we talked about it, I think a week ago about Block and and Jack Dorsey just laying off like 4,000 employees in one fell swoop. You're seeing it at Microsoft. You're seeing an Amazon. You're seeing it. What's their latest? This was the story yesterday. It's absolutely pretty insane when you dig into it just really quickly because it's worth mentioning. Yes.

Yeah. They made their engineers basically spent eight months documenting exactly what they were doing, 2,847 of them. And then they programmed the AI based on what those agents, what those people did to do those jobs and fired the people. So those people basically programmed the AI to replace themselves. I don't remember what the number is. I think I read that they're down to like 12 guys in Bangalore that are doing this job. I don't even think that's an exaggeration that I that doesn't that wouldn't surprise me in the least and here's the crazy part about it.

So well oil going up is going to hit it's going to hit prices just like Dave's you're you're delusional if you don't think that. It's going it's the is the largest by far factor in price of everything. You know you get you get the the we're not going to get at the activism stuff. But so that's that's that is, you And the other side of it, you've got this deflationary effect of things that would be going up in price because of the AI inputs. Okay. So what is that going to cause? It's going to cause stagflation, right? I mean, you've got people being laid off. You've got the economy getting arguably worse in large swaths of large sector.

of the economy, at the same time the prices are going up. But then on the flip side, you're going to have this really hard downturn in everything and pricing of everything because of deflation of the deflationary effects of AI. But it's not going to hit everything, right? It's not going to hit everything. And so it is an extraordinarily difficult market to make sense of right now. And that's part of the reason you're seeing you're seeing rotation out of MagSat. Devon stocks into, you know, defensive sectors. You're seeing gold has kind of topped out and has

come down here. Same thing with silver. You know, you're watching the long bond. The 10-year treasury now is back over 4% on yield. It's 4.16 now. I mean, just a week and a half goes under 4%. So, and then you've got the dollar movement. And then then you look at Bitcoin. And Bitcoin seems to be just doing what it wants to do without any relation to anything. So Bitcoin's up 4%. Today, this is not against Friday. So all the other prices you're seeing are against Friday's closed, but Bitcoin is against yesterday's close, but it's up 4%. So, you know, it, what is it going to do? It's going to do what it wants to do, like it always does. And so there is, but going back to your point, Scott, and what I wrote about is that there's there just is no place safe to hide right now there there's no place to go

except cash and you know and cash is going to melt if you sit in it for a long period of time but this is a short period of time and it's okay to have cash short period in short periods of time while you're trying to make sense of things and make sure that you're being careful because if you need capital and this is the whole point of what a risk asset is if you need access to capital for short-term needs, then you can't be 100% exposed to risk assets. And those are assets that will be volatile because you're going to have to liquidate them at a point that you may not want to. And that's where the whole point of the correlation of one trade comes into play is when some sort of event occurs that pushes people and investors to the point

where they have no choice but to liquidate assets that they don't want to. And that's why everything correlates to one and everything sells off. But the, you know, the interesting part about it that we have seen a lot, many, many times over is that gold recovers first. And then we would expect that if and when the money printer comes out, because there is no choice but to keep this engine going. And by engine, I mean this inflationary run it hot economy engine because you need high GDP in order to keep taxing, in order to keep running these deficits that we're running. And if you're going to spend another $500 billion on defense, where is it going to come from? It's going to come from deficits. And those deficits are going to be funded by what?

Money printing. That's right. And so that is what you need to understand. And that's why gold will recover first, in my opinion, and Bitcoin will slingshot past it and slingshot hard, especially if they print the amount of money that we expect them to. It's just a question of what happens when, if you do have a black swan or not, or if we kind of just tiptoe through this on this razor wire between the Twin Towers, if you've ever saw that documentary, that guy walking across that razor wire. You know, that's what we're doing right now. Is it possible that we thread that needle? Sure, of course it is.

But, you know, it's just, we're in a period that has been extremely difficult to, you know, to navigate. And I'm sure that, that Mike, you guys are hearing it on the desk when you're talking about this and you're talking to the economist. This is a really difficult situation to handicap. And it's not like you saw this train come in and finally Lehman and Bear Stearns went bankrupt. You finally happened. So many of us were talking about on the street for weeks and months. But this one is just like, I don't know which way this turns. It's so political.

You've got war involved. You've got, you know, oil involved. You've got AI involved, which is a new factor that we've never seen before. This is a difficult one. And so, you know, to to to to air on the side of caution is is probably not a bad thing. Can you miss out another huge run in all the stocks? Of course you could. But could you miss out on a, could you protect yourself from a sharp downturn because of some event that we're not seeing that has nothing to do with this, the, the Middle East, but something else entirely.

Yeah, that's out there. That's what you're not. No safe haven't. And I want to make it clear. I'm not, I'm not doomsdaying. I'm just saying that everything seems to be priced to perfection. And that's the problem, except for Bitcoin. I ask guests all the time.

I'm like, you know, someone gives you five million bucks right now. What do you buy? You know, and everybody kind of scratches their head. Mike, I know you say TLT. Well, and I want to go because there's this interesting. This is extremely hyperbolic. But Japan's about to blow up the U.S. financial system and nobody's paying. Okay, there's a lot of alert here.

It's a little bit hyperbolic. I just want to talk about the idea because Japan is the largest foreign holder of U. government debt on earth and are apparently about to sell a lot of that right they they hold a third of it so you know how's tl to why this is why we have wrong this is why we have swap lines that's it that's that's that's a that's why the scent has a swap line with with japan it's to avoid a cascading effect that would uh you know that would take down financial markets but look we had the japanese carry trade unwinded in a violent well swoop that August of 24, look, I don't expect that to happen again. It's not like you're going to have all these hedge funds caught offside because they weren't

expecting, you know, the yen to go to 160. And I think that that's the price that the Japanese finance minister had quoted as kind of the stopping point, you know, that's their stop loss point. But, you know, there's still that it has been the access to cheap capital for the world for a long time. And so that's that's kind of over. And that's the death knell there. Where is it going to come from next? It's not going to, this is the point that people, I think, are missing is that it's not that the liquidity is going to stop.

It's just the question of where it's going to come from next. It's like, it can't stop. The whole world is so indebted. it can't stop it's good it would it would be it would be financially you know catastrophic to to stop liquidity and so that's why you go to war that's why you go to war like you were here we teed you up when you were gone i made a point that that the word risk asset no longer means risk in terms of business implementation risk in terms of whether what the future would hold for its idiosyncratic stuff risk now basically

means if it's been volatile and the volatility is being driven by macro, which basically means everything is a risk asset except for, that's where we got it, except for it, which is, I knew you would agree. I wasn't taking a shot at you, but it is amazing how that changes people's way of trading. You point out all the time how risk models govern a lot of asset allocation, and now they're all Fubbard. Right? Exactly. I just decided I did a music because it doesn't mean what it used to mean. Well, we need to tee each other off partly because I enjoy when Big Brother Dave teaches me stuff.

And once in a while, I learn little lessons. Once in a while we learn each other lessons. The key thing is I was get back to back to the macro. And James, I caught enough of it to point out. My main racco thesis for this year remains the same. That stock market volatility, still 180-day volatility, near a 10-year low will go up. Okay, simple fact. What's it going to take to do that? Now, this war has started also with the stock market cap to GDP. near a hundred year high. Yes, we can push back on that. But we also seen what's been the precursor for this. Bitcoin grab beta in 23 and 24. We loved it. It was great. That's when we had the biggest money pump in history starting in 21. Gold grab beta last year, 64%. And this year, I fully expect

T-bonds to grab beta. And now we're getting a good reason for that. But it's one key thing to make this happen. It's just stock market value to do what it always does. Mean revert. Now, I'm using 180-day because I started using 60 day back, I think, in August, and now we're out to 180 day. But I put key levels on that. I'll stick with it. So initially, you know, it looked like we're a sell the opening in Bitcoin on the year. That was 94,000. I've moved that level down to 74,000.

If it can stay above that, prove me wrong. This is the kind of environment I look at this. This is the beginning of a severe normal deflationary trajectory, which is not going to be short term. It might last for a long time. Yeah, they'll be pumping. There's pumping of liquidity in China, and their 10 yields 1.8%, which is why I expect to go. So I'll put a lid on that. So key levels to prove me wrong, Bitcoin stay above $70,000, $74,000, silver, stay above $100 a dollar,

and copper, stay above $6 a pound. They're all picking lower, yet the S&P 500 still down, what are we on the year? 2.3%. That's nothing. Give us 10%. No, there is a trade. And I think that's what's going to happen. It's going to kick in.

But also you look forward this decision that Mr. Trump made for this invasion. I got to think he's going to make it happen the way he wants, which means more and more lethal offensive weapons until he gets what he wants, which is very scary, I afraid. But one time we get to those midterms, he's going to have a decent story to tell, I think, which is part of what I see in the forward curve and crude oil. I even see it in the grains. So like I say, for me to be wrong, prove me wrong,

stay above these key resistance levels and these what are now risk assets. So the interesting question here is, and I pointed out the Jeff Booth point, which is that natural deflation versus monetary inflation, but whatever you want to look at it, I think that one of the, and I tweeted it out this weekend, one of the things that I find disturbing is how people continually to use charts in a world where there is significant monetary inflation going on. So like, and the reason made me think about this is I was thinking about some of these countries back in the old days where, you know, they would price stuff, you know, like the Turkish stock market when Turkey was going through, you know, very low, you know,

basically 10% inflation per month to, you know, 100% plus annualized over years. And of course, the stock market kept going up, right? You know, so if you used a nominal chart, you'd be wrong. You literally couldn't. You had to, you know, you have to do that. Now, are we at that point where the amount of monetary printing throughout the entirety of the West is significant enough? Well, it depends on how long of a chart you're using.

I mean, if using daily charts, probably not. But if you're going back years, probably so. And so, you know, it very much, it is very interesting. So when we talk about, like when you talk about that oil, the most important point about oil is what's the cost of production and where we are? And the cost of production because of technology in oil has not, in fact, it's gone down relative. So it's not like there is any inflation. So using a nominal chart in oil,

makes it works perfectly well right I mean oil companies are like licking their chops that you're gonna hear if in fact it goes the way that that that prognosticators in the betting markets say and we have the midterms go that way you're going to hear from all the democratic Congress about windfall profits from the oil companies you could take that to the bank we saw it in the in the 70s it's absolutely certain you're gonna oh my god look at these oil companies look how much money they made well you know why they're making money they produce between 40 and 50 and they're getting to sell at at you know depending on where they are probably average price of selling now is somewhere between 70 and 80 well guess what if you have a 100% profit margin

the politicians are going to scream about and and but the reason i make the point is if you're valuing the oil companies if you're not taking you have to take that risk into account but if not then if you think that they're going to be able to keep these profit margins for a long time then you should be investing and they should be exploding and they're doing well but they're not exploding because people realize that these things are going to come back down to normal. Now, the flip side of that are all the companies that are going to use AI to keep pushing their corporate profit margins up. I mean, horrible for the humans, really good for the companies. I mean, the biggest days for a tech stock is when they announced layoffs.

Yeah. Yeah. And everyone met it did that. And it was like, one of the middle department because we don't believe in the Metaverse anymore. And they're still massively. Well, so here's one fact that I find incredibly interesting should be a difference maker, and they have to figure out how to make it investing. So Tesla has literally shut down.

They are no longer going to produce the Rodester, the S-Rodster, their top, you know, top-end sports car, and they're X. They've come up with new Y versions, but why? They're literally devoting a huge percentage of manufacturing to producing Optimus Robot. ask me how long the jobs in Amazon distribution centers are going to be safe against Optimus robots. I mean, I took a friend back, right? We went to the World Baseball Classic, and I dropped him off at his hotel last night, and I let my car, my Tesla Y, which is one of the most popular cars in the world now, do full self-driving.

And he couldn't believe how good it was. And I'm telling you, it's better than humans. So the only time I've ever self-driven in a Y was with James in Vegas and the thing literally like got us to a restaurant around an obstacle and a blockade. It's insane. And the thing is the reason I use it, I'll be blunt, is because you're driving on many streets where the biggest fear is that some idiot will open a car door or jump out in between two cars and the car will see it faster than me. And I know that's true. So I use it a lot. Now, why am I mentioning?

I mentioned it because what happens? when Optimus robots can do all the factory jobs. All right. So just stop there for a second. Some people don't know how Amazon, how Amazon distribution facilities work. I was in, if you've never been in one,

it's insane. First of all, they already have robots everywhere, but they're not, they don't look like humanoid. They're just, they just move boxes from, from,

on a massive grid footprint that moves goods from one side of the, of the warehouse to another side. And then they, it ends up, it ends up putting them in these buckets that then humans who are in a cage. So the humans are in a cage to protect themselves. Now, this is years ago.

So they, they're probably even way more developed than, than when I saw this pre-2020. But then the, then humans will take them out of these, out of these bins and then put them on a conveyor belt to go off somewhere to be, to the next. next production line where they're wrapped or put in boxes or whatever they are.

So those are the jobs that are in danger of the of the humanoid robots now. That's that's the points that they're already robots everywhere in in manufacturing and distribution facilities. Just the question of can you eliminate all the jobs? And the answer with, you know, optimists is yeah, you'll be able to. That's the, that is a scary part. I want to pivot slightly because it's worth talking about since we're actually here as the market opens and it's live. And I know it's just one data point.

But just to take a quick look, I mean, Bitcoin is up, right? Once again, it dipped on the weekend, but it's almost trading at $69,000. You take a look, though, at the news here. And the Dow pretty much got smashed at the open, tumbled 400. Last night, Japanese stocks obliterated. South Korea's share market followed by 8% trading halted again. You take a look at the Bitcoin chart. Yeah, this is a rounding error.

It's sideways, but still. I mean, I bet is up a percent, which is fair for Friday to Friday, you know, or Friday to Monday. That's the comparison. Yeah. I'm just saying, like, listen, I know it's not going mad or anything, but it continues to look like it's not that correlated. And, you know, you would used to, if you used to have the stock market open on Monday

morning at 9.30 and everything dumped pretty significantly, you would think that Bitcoin would be dumping with it. it's going up yeah well i mean there's reasons here i mean first of all it's it's more the expectation there at a point last night the nasdaq futures were down eight or nine hundred right you know what are we down now uh it's now down 285 so it's it's it's it's literally regained overnight two thirds of its loss so you would make an argument that regaining two thirds of that loss is bitcoin's higher beta now personally do i think that that that That's true.

Mathematically what I just said is true for a day, but that's such a crappy data point. But it always goes on trend. I mean, look, the selling in Bitcoin, the sellers are freaking exhausted, Scott. All the crypto players who look at this shit and sell, they don't have anything left to sell. And shorts get, you know, are not as stupid as longs. Let's just, let's just be blunt here. I mean, there is someone, I can't remember who it was. It might have been Luke Roman.

And it was someone smart, kind of made a much nicer way of expressing it, but understand that highly levered short sellers are smarter than highly levered long buyers, full stop. They do what Mike says. So Mike's in violin because he knows. He says they set a stop loss and they don't get themselves carried out and they don't over lever and they size their positions right. But on the long side, people are like, let's just yolo and go for it. I'm going to make myself rich.

Well, I lost. I guess I'll try again, you know, when I earn. the money to try again. You know, it's, it's crazy. And but it's, we've seen this forever. So this is, this is what's, what's happening is there isn't a lot of people to sell. And there's still buyers, the people who have been buying are people who believe. And, and I pointed out, I used, you, you could yell at them and talk about, you know, you can look at power law charts until you're blue in the face. But when you look at power law charts, what you end up with is you look at the power law of Bitcoin. And it says, you get into what's the purple ban is the high ban.

And, you know, every other cycle it got there, it hasn't gotten there. Right now, if it gets in the purple band and does what a normal rally would be in Bitcoin, you would be somewhere between $500,000, right? It's happened every other time. And so you got a lot of long-term investors who are saying, you know what? This is a reasonable bet. The market is literally pricing its probability of that happening at just 90% against. So it's like, you know, I saw this other thing on.

on prediction markets where someone asked Claude, what's the best way to make money? And the answer is you find a lot of these prediction markets that are just underpricing the risk of it actually happening and bet on a lot of them. And there's definitely that money going into Bitcoin. There's no doubt about it. And so, yeah, I mean, you can look at all of this stuff, but you have to take into account the dynamics of supply and demand. Unless some new OGs say, yeah, this is the time to sell and that will be self-destructive,

the bottom that happened at 60 seems pretty damn strong unless there's a massive black swan that, you know, whatever. A nuclear bomb goes off. Cascades, it takes everything down with it, yeah. And that's the thing you saw last night when Bitcoin fell, I think, what was the candle last night? What was the large? It hit 604.

We were down to about 655. So, again, we dropped below 66. So you see that because what James and I and Mike tell, everybody here. And you always have to remember this. When markets, when people are panicking, they sell what they can, not what they want to. And it doesn't matter. This is true, this is true with everything. It doesn't matter whether we're talking gold, silver, oil, tech stocks, this, that, whatever, you know, my, you know, your mom's silver set. You sell what you have to. You sell what you can sell. And you see it all the time. And if you don't understand that

those are the market dynamics, then I don't know how to help you. Okay, Mike, certainly you've been teed up enough. Oh, Dave, we tee each other up. I would love to get bullish Bitcoin. And one thing, it's wonderful to see some of these signs of divergent strength. But Bitcoin led the way. And this is my macro theme is if you're buying any risk assets, number one, you have to hope NASDAQ 180-day volatility stays near a 10-year low.

So you're shorting volatility at that level. Yeah, you're going to get bounces. You have to hope that stock market, captain, GDP, stays near a hundred year high. This is the shorter term stuff. And I just pointed out levels are trickling that way. So I'd love to see signs of strength. But then I like to bring out the macro for me for Bitcoin was we've had the biggest pump in history. That happened. And the Bitcoin, the stock market ratio right now is around 10. If you take Bitcoin divided by the S&P 500, it's about 10. That's the same for five years now. So this asset that has two to three times of volatility

of bay, the S&B 500, and still trading flatline, is not. Now, that doesn't include total return. So total return, which is it actually still has, I'm actually asking genuinely, does it still have two to three times of volatility? Here's the Bitcoin data. I just ran it. So the 30 day realized volatility of Bitcoin is running at 40%. The 60 day is running at 43%, right?

Whereas the implied options volatility of Bitcoin 30 day is 60% and 60 day is actually they're both around 60%. So, you know, that's what that's, what's actually happening in Bitcoin right now, which is a little, you know, realized is always underneath. And that's why people who sell options generally make money, people who buy options generally lose money, except for the outliers. That is true. What's the S&P running at? You know, probably running it at 15 to 20, right, Mike? 180 days, 11%. It's been stuck there forever. It's picking up now. The 30 and the 60 days is what I was

doing. They're picking up. They're picking up. I'm looking at it right now. it's about half, but a lot of that has to do with the fact that there's daily volatility. But here's the thing. And I could ask it, and we can do this. If you take weekends out of it, I suspect that the difference is really becoming close to negligible. Because like most of the volatility is on the weekend. So, I'll tell you on weekends. We see it every week.

That's right. So, well, here's my key point. I just updated it. A 180-day volatility on Bitcoin is right now 3.9 times greater than SVB 500. Why? Okay. So Bitcoin volatility is high at the moment. S&B 500 is very low. That's my point. That's going to narrow S&B 500 stock market volatility

has to pick up to volatility in every single little market around them. And then what's for instance repeat and look at buying risk assets at discounts. I just, that's why I love Bitcoin in beginning because it led the way up and now it's leading the way down. And I think you should be very careful with false hope and bear markets. And that's what we are. And again, prove me wrong. Show me at least one sign of staying above 74. Now that's much lower than 94, which we looked at, you know, three months ago. But you see the trend there? It's just, this is a bounce, I think, and Dave, you nailed it. It was a little bit of de-risking. People have been way short Bitcoin. And I think this is a holistic picture. I get here more. That is I hear from a lot of people,

Bloomberg people I speak to is, yes, we love this. We loved it before, but we look at a risk and just basis. We can get much better return in stocks. And I just point that out. The volatility is high. The performance is poor for five years now. How long is that going to last? They keep people tell me, people keep telling me it's going to get better. I say it will once we purge the excesses of supply and crypto's not Bitcoin. We still all agree on there. It's just, let's get big doge coin and Shibuino flush those things out. And then we might have a great chance to buy Bitcoin.

Yeah, here's a couple of data points. First of all, Bitcoin is already down. It's already touched down 50%. So it led the way. How much more it can go. It really depends on how big an event we have. And I'm not calling for an event. I'm saying that there's always one out there.

I mean, shit, I've been, I've been in Wall Street for 30 years. I've had about 10, 100-year events in my career. So everybody knows. I mean, everybody's like, oh, my God, this is a 100-year event. It's 100-year event. Whether it was 1998, it was 1999, 2000, it was 2001, it was 2008, it was, you know, 2020. And, like, we've had so many 100-year events. It just, they happen.

And those are the Black Swans. So you just have to be aware of that. So Bitcoin down 50% already. You know, it has been wiped out. And so the question is, does it get dragged down with the rest of the market on something else? It's not going to lead the way down from here. And that's my opinion. So that's number one.

Number two, the VIX is at 30. That's not nothing. It had been sitting around 10 for years here. And now it's at 30. And the market is still hanging around its all-time highs. And so that's a very interesting data point right there. Is the VIX 30 out of control? No, you don't see the VIX out of control until it's too late.

When the VIX is at 60 or 70 or 80, that's it. There's no way you can buy insurance at that point. It's over. So that's another interesting data point. And then the last data point that we should talk about here, Scott, is that, as I understand it, 20 millionth Bitcoin is being minted here. So you have 5% of the Bitcoin supply left to be mined over the next 100 years. 5%.

So this is a seriously anti-inflationary asset. This asset does not get devalued like other assets do. I mean, it is a fraction of what gold gets devalued by the expansion of the gold supply. every year. And so that is a very interesting data point that I think a lot of people are missing because of just nonsense and just disinformation, misinformation, and purposeful misinformation from certain networks that just refuse to recognize that Bitcoin has a fixed supply. So there's just an important data point out there as well. Those are all things that are happening while this market is uncertain. And so if you're a Bitcoin holder, a long-time holder and you haven't sold, then you should

give you some comfort that long-term, that this is an asset that's going to benefit from that very strong, a very strong probability that the government's going to continue printing money to fight this deflationary effects of AI and any sort of downturn the economy. And by the way, just worth noting, James, that at the same time, a lesser landmark event, but Michael Saylor just bought Bitcoin for the 101st time and over a billion dollars again this week. So we saw huge numbers on STRC last week. So I'm assuming that's where that's coming from. But yeah, and that's important.

That's an important part. I was on stage with them. Was it last week? Yeah. I mean, God. And so we talked a lot about stretch and this STRC product. And for the people who don't know it very well, a very simple explanation is that this is a, it's a preferred, it's a perpetual preferred that pays you 11.5% yield at when you buy it at par at $100. And so, and that is, it's, this is an alternative to something like private credit.

Is it, do they, do they expect it to be volatile in periods of downturn? They're not delusional. They, and, you know, sitting on stage with Fongley and Michael, they understand that this is not something you can keep as a checking account, but this is something that gives you a better yield a long term than something like private credit where you don't know what is, what you actually own. And you don't, and you don't have. access to that capital. And so it's a, but it's a different, what, what they're doing, though, is that

they're, they're literally just borrowing fiat to buy Bitcoin, add infinitum, you know. And so, that's, and that's the, that's the, this, this is just, it's a, it's a, it's a mind-blowing shift in, in how to arbitrage capital markets. And that's the, and long term, though, it's, uh, it's, you know, this, this is where they're going to be able to just continue buying Bitcoin. Yeah, I can't believe I didn't have this story pulled up, but I don't even know if we have time to unpack it, but you mentioned private credit, five-clock fund,

withdrawals as redoubt. And they, you know, third one, right? In like, in two weeks or something. I don't know what the timeline is, but in a few weeks or the third one.

I mean, this is, yeah, I'd be interested. Did they, did they say anything about this in the, in the morning meeting, Mike,

because this is a, this is a big deal. It wasn't mentioned. I had a hop-off part. So they might have when I was saying. Right. So I want to hear your views on it. I think it's very important for people to understand what this means.

Because a lot of people think private credit, they go, oh, this is going to be this. I've heard people make the asinine comment. Well, this is the same thing as 2008 is just a different cause. It's not. It is an overarching thing. Mortgages and building subprime is basically saying real estate has major pockets that were overvalued. And those major pockets that were overvalued, people understand it. It got to every level of society.

You had strippers flipping condos, yada, yada, yada. What's happening in private credit is something very different. Private credit is a much broader thing. It is companies borrowing money to build out businesses, some of which have done very well and are doing okay. Some of which are absolutely royally effed because they built out businesses not knowing what was going on with AI, and they no longer have a business model. And here's the worst part about it,

is that they're not marked appropriately. Correct. And so unlike real estate where at least there's some form of mark, I mean, if something sells, it's like, okay, it's there. You have to do something with it. In this case, you have sectors. And so it's just, it's not that private credit is bad. It's that there are a lot of individual companies

who have borrowed on the private market that cannot pay. their bills back and may in fact be going bankrupt. And so if you're a private credit portfolio manager, then if you were focused on companies on SaaS, you are shit out of luck, right? If you're a private credit manager and you're focusing on building restaurants, you're probably fine. I mean, you know, the restaurant business is up down or whatever, but I mean, you get my drift.

And so the notion that all of private credit is bad is just, that's just not true. What's happening here is we have a massive disruptive change going on in the economy that's going to help companies and hurt companies. And private credit happens to be one of those cases where some of the companies that are being hurt are going to go boom. And when you go boom, that leaves holes in your balance sheet. And the problem with a lot of this stuff is what James just said. When he said not Mark, what is he saying? this is a famous debate. Cliff Asnus is probably the most articulate on the subject.

He runs AQR, people don't know who Cliff is. And he said, yeah, that people like to believe that their private credit or their private investments don't have volatility compared to public markets. Well, the reason is because public markets, every single day, you get a price on the screen every minute, right, you know, while the markets are open. If it's crypto, it's 24-7, whatever, it's, you know, six hours, somewhat a day, you know, five days a week. A good example would be, a good example would be when you were holding a private equity fund that's invested in biotech. And then the entire biotech sector in the market is down 25%. But you're getting a statement from your private equity fund that says that it's marked at cost. that's it's not marked properly or appropriately you know and that's the problem that's it's exactly

right and so what this means to people because we always talk about uncertainty is there's a lot of investors it's a non not a small it's not a small number right that are totally uncertain about what their what their investments are actually worth that's the issue and you know and they don't have they don't have access to the liquidity of it either and so it, you know, and so you're watching, you're watching endowments try to unload this stuff, you know, they're trying to unload it and they're unloading it at, you know, at a discount because they want liquidity out of it and they want to be moving into other stuff. And so it's going to, is it going to be like a 2008 style implosion?

I don't think so. It's just going to, but it's very, it's, it is an important, you know, piece of the market that, that we're not really talking about enough, probably. Right. That answer your question, Scott? It does. Yeah, it does because it seems, this seems like one of those hidden in plain sight, potential Black Swan situations. The one thing I do want to clarify, because there's a lot of these, especially in the crypto world, people who have no understanding how these companies work.

There's all these conspiracy theories, black rods gating people. It's like, guys, this is what you signed up for. If you bought into a, there are many, many private funds, not just credit, but otherwise in hedge funds that literally have when you sign the paper, as they tell you, we are going to limit withdrawals to be this amount per quarter. Or others say we reserve the right to limit. Why? Because the investments that the fund is invested in doesn't have, don't have liquidity. So if in fact they didn't, what does don't have liquidity mean? Let's just make this simple. If you're in a private credit fund and they had to liquidate. say 10% of the fund in a day, then they'd have to go source bids. Those bids could be double-digit percentage below what they believe they're worth. And so what they're trying to do, what they're doing is when you take your money, they're telling you, protecting you from forcing a fire sale. Right, exactly. So it's sort of like saying you put your money in here, you are not, you can't get

liquidated. We are not going to create, we're not going to sell at the bottom of a downwick. So this is not nefarious people. It is not nefarious. It is the reason you structure these funds this way. It's a necessary function, yeah. And that is important because it's got so many people on crypto Twitter are like, or CryptoX, what the hell you want to call it, you know, or saying, oh, look what what Black Rocks said. Maybe they're going to do this to Ibit.

And it's like, oh, God, I bit. I literally have seen at least three different posts that said back. And with all due respect to the people who wrote them, they're not doing that with I mean. Go to school. Don't invest. Get it. All their respect. do something because you literally don't have any idea how markets work.

There is a huge difference between liquid assets and non-liquid assets and the way the funds operate. And just because it's the same company that runs both, please, dear God, don't make that comment because it's just so stupid. Okay. Now I've insulted enough people in the audience. I think I've done okay for the day. It's the perfect time to wrap. It's 10-01. Everybody hates us and we can go home. Actually, I think I would like to give our audience credit for being wildly intelligent human beings that understand the deep functions of all markets. No, no. I think that actually this audience probably does. But when you look out and you see people with these conspiracy theories, like, and I spend time on other spaces, not like the ones that we do, but like on Bitcoin today.

And while I love Lauren and Terrence, the co-hosts, they get some people up there who are just absolutely tinfoil hat. kind of crazy. And this is exactly the sort of thing that will come up in one of those spaces. And I'll be the one person saying that it's not crazy. And I'll get yelled at saying, oh, you just, yours is the shill for tradfai. Like, okay. Yeah, I saw your black check, black rock check was sent in the mail. Yeah, exactly.

It's with all the other checks that I don't have. But that's okay. Good. Me both, buddy. If you say anything positive about anything, you're obviously getting paid. All right, guys, we got to run. Thank you, Dave, Mike, James. You had another amazing Macro Monday.

See you next week. Thanks, everybody. Cheers.