The Wolf Of All Streets - Bitcoin On Brink Of Collapse As Oil Prices SURGE? What You Need To Know!

Episode Date: March 2, 2026

Bitcoin is hovering at a critical level as global tensions escalate, oil prices spike, and gold surges on renewed safe-haven demand. With geopolitical uncertainty driving volatility across equities, commodities, and currencies, risk assets are feeling the pressure and Bitcoin is no exception. As liquidity tightens and macro stress builds, traders are questioning whether this is just short-term turbulence or the early stages of a deeper breakdown.

Bitcoin is on the brink as the United States and Israel go to war with Iran. Oil prices in Europe have surged as much as 50% as Qatar has cut off their oil supply waiting for more clarity in these Straits of Hamoos. All of this is way over my head. So luckily we have the geniuses, Dave James, and Mike, to unpack all of it for us. I don't think there's ever been a day when we need a macro Monday more as people who are watching the price and market in Bitcoin and Bitcoin. crypto. Let's go. Good morning, everybody. Welcome to another edition of Macro Monday. Mike McClone is currently on TV. He will be here in three or four minutes.

And what's actually amazing is I was sent a ton of links to look at this morning for the show, news updates, I could bring on the screen. And McClone's face was literally on three of them on TV. You know, like the video clips on Yahoo Finance. Every time I clicked on a link, there was Mike McClone. So we're obviously. obviously being forced to share him with the world now. But he will be here momentarily. We've got Dave and James already here. James is fresh, well-rested, slept a lot.

I mean, they just can't make air travel any more miserable, can they? It's true. It's incredible. You know, it's funny. If you're not in first class, it's almost just unbearable. We went back and forth from Florida to, Valley and four flight segments. Every one of the flights was on time.

No issues whatsoever. And when we landed, as we landed as the plane hit the tarmac, I said to my wife, wow, it's amazing. We had the whole flight, you know, nothing, whatever. And then we sat on the tarmac for half an hour because they couldn't get a plane out of the gate. I flew in from New York yesterday to Tampa. And we got, I landed a foot above the ground.

And all of a sudden, the guy goes straight vertical like F-15. I love that one. left and he completely had missed the runway. He was like 10 feet left. We had to spend on the background. So it was a good time. But anyways, as we wait for McGlone, I don't know. I've had three hours of sleep.

We're good. Let's go. You're good. Okay. Nothing going on. What I missed last week? I don't want to dive into oil yet or any of that because I want to wait for Mike. So we do have a story here that has Mike's face right on it. As I said, look at him.

Crypto loses its grip on retail crowd, now defecting to equity. So this is coming from Bloomberg, no surprise. The fact that Mike's face on the article like that, obviously, no surprise. But effectively all of the data here that retail has not participated at all in this market for quite a while. Can I fix the headline for you? Please. The headline is, if this article had been written in November, then I think I could go with that headline. But the truth is retail has not did not really was not really participating very much in crypto in the back half of last year's rally. And after 1010, they were gone. And, you know, so it's like when you start reporting on stuff like that, that tells me the bottom is in.

Full stop. I love that. I love seeing those stories because we know that we talked about it two weeks ago, how search for Bitcoin is dead hit a peak. We know. We know. what extreme fear looks like. We understand where the participation is. Retail has been out of of alt coins now for months. So when Bloomberg finally starts saying, oh, they're doing this, this is trying to throw dirt on the grave. You know, that tends not to work. You know, in markets. I'm an article last week, crypto is pointless. Even the white. Yeah. I mean, come on. These are the I mean, look, the funniest part about all of this is this is at the same time that Morgan

Stanley is ramping up to not just trade crypto, but custody Bitcoin. I mean, Look, there is this huge great dichotomy, and I talk about this all the time, but I'm tired of people who are stupid on both sides. The fact is that crypto rails and the technology are going to reformat the financial system. They're going to reformat the artistic systems, meaning that if you're a creative, it's going to change many, many verticals in industries. We know this. Some tokens will be able to be used. used for the incentive structures that tokens can do in order to create value. But if the token itself doesn't pass value through the token holders,

they're going to wither and dive and saying that for a long time. Bitcoin, on the other hand, has survived through all of this. Right now looks almost frighteningly cheap and hated, but that's exactly what you get at bottoms. I mean, you literally, I mean, could it go lower? Of course, anything can happen. But the truth is, is freaking war didn't cause it to break below what when we said that, you We said when it dropped below 60 to 58, you know, or 59 or whatever hell, it ticked on that

wick that that's probably the bottom. And even over the weekend, at the most desperate lowest liquid period of time, they couldn't slam it below 62. So you tell me what does this look like. Every time I see these news stories, it tells me that, you know, it's like trying to, you know, when you have a fire and there's no wood left in the fire and you're blowing at it and you're hoping the fire will keep going. well, there's just no wood left. I mean, who's left to sell within the crypto community? The people who are left in the crypto community that will sell will be the people who need to raise fun

for life. That's it. Because nobody is making discretionary sales at this point. And so when I see these articles, I just laugh at them. I mean, it's just, it's actually funny because it's exactly the wrong thing. It's the same people who at the end of 2008, beginning of 2009, were saying the equity markets are dying and retail is exited the equity market. And you saw those stories. You can go back and look at them. It happens every time. GFC has been running its course.

It's been going crazy. They've been throwing shit tons of liquidity, but didn't matter. Nobody wanted to buy anything. Tom Lee. But let's be clear, though, that clearly, I mean, like you said, the sentiment is so low in Bitcoin and crypto currencies that obviously something else has been going on. And the funny thing is that when people are running to things like gold and silver, as like, you know, a quick trade, you know that something is structurally wrong macroeconomically or geopolitical world.

Oh, absolutely. Yeah, so watching central banks pile on the gold trade and then watching everybody pile into the silver trade on the backs of EV and data center buildouts and demand. It tells you that there's just, you know, we all know that people are now worried about inflation. So if you just step up, step back today now and look at what's going on, obviously you have oil up. And the funny thing is that Bitcoin's kind of holding in there.

Like Dave said, it's hung in at 65,000 all weekend, even though, you know, this is, uh, the, the conflict has now kind of, um, you know, expanded. And it's not, it's not going to be a, uh, just a one and done, you know, know, one and done daily thing. This is going to, this is going to probably be ongoing for a few weeks from what we can tell. So you've got futures down a percent. You've got gold up one or two percent. You've got silver kind of down a percent. You've got Bitcoin just pretty much unchanged. And then you've got the 10-year, or looking at the long bond, the T-LT, and the 10-year and 20-year and 30-year, those rates are up.

Okay, so we're back over 4% on the 10-year, which we dropped below 4% earlier this weekend, late last week. And so if you look at the TLT, you know, that is pre-market. It's down. So what is that telling you? Well, that's funny because I read it. Yeah, yesterday, I'm going, I'm sorry to interrupt, keep going. I was just to say yesterday we had this story that basically showed that bonds were flight to safety.

I didn't even realize, you know, using yesterday's data. Go ahead. Yeah, and that's the funny. That's the paradox now with the bonds. Bonds can be flight to safety if you're going into, you know, T bills. If you're going into T bills, sure, that's a flight to safety. But if you're going to the long bonds, the problem here is that now people are concerned, that with the conflict in the Middle East, it's a particular issue geopolitically that is inflationary.

War is inflationary, number one, and oil going up, it's the main driver of prices of everything. Going up is inflationary. So people are clearly, you know, investors are clearly concerned that long-term inflation impacts from a higher price in oil or an extended higher price in oil is an issue. So that's kind of what we're seeing across the board here today. And then the dollar on the backside of it is just it's an energy trade, you know. So but I would be interested to hear what what we got out of the morning meeting, Mike, assuming you went to it. Mike, you didn't hear this, but I'm operating at about three hours of sleep because of our great air travel system in America.

So, but we're here. So let's go through it. Okay. Well, the, Anna Wong came in, pointed out that, obviously, if we have oil, oil staying up that's going to have an inflationary impact. But she focused on non-farm payroll. She thinks it's going to be a negative number, a weak print due to whether the unemployment rating staying at about 4.3%, so it might have a small uptake, but it won't really be that

significant. That should stay the same. Look, the takeaways that expect the number to look weak, but the unemployment is stay steady. We had our geo-economics expert come on, Deanna Fendiary, who pointed out, The Iran retaliation has been fast and wide, spreading out to the Gulf states, trying to put on cost on the, trying to expand the tax and put on cost on global economy. Her point was she thinks things could likely to get worse in the meantime. Michael Caspar, equity strategist, has pointed out, you know, we have major oil shocks that usually bad for equities. And that was really it from the morning meeting.

I had to hop off early to talk to TV about, guess what? oil. Yeah, with your thoughts on food oil, for sure. Yeah. Let's start with oil, because that's where I wanted to go. Yeah. So we need a sustained supply shock or disruption to keep Brent above last year's high, which is $82.63, which is about today's high.

It's right now just below 80. You need some kind of, now, right now it makes sense. You're supposed to pop up to those levels. And that risk, the straight is closed, but not for military actions, but for normal prudence. get away if Iran succeeds in closing that which has never happened that's a problem i think by time we get to the end of the week we'll find out that the u.s military this part of an operation it usually does pretty well it's very good at rendering enemies defenseless and offensive lists so if we're still seeing a lot of missiles coming out of uh iran by the end of the week that's a problem otherwise

i fully expect this bid to be short term to look very similar to what the bitcoin bid look like in january because the bottom line is this is people are talking there you keep forgetting the answers of change. The price maker status in Cordill switched to the Western Hemisphere. So what I'll probably republished for tomorrow is pointing out is Iran exports less than two million barrels a day. Obviously, it's very political where it is now. But the U.S. and Canada, their supply demand surplus is running 8 million barrels a day. That's just, that's the highest ever. That's where things are happening. So I guarantee you, you can see that in the forward curve. All these producers are selling forward in the forward curve. And you can see like these crude oil is running $62 or so.

This is short term. Something bad has to happen. We have to hear about the U.S. military having setbacks. But this is, as we know, and Dave, I'm sure you can get this part. Is this part of the operation for U.S. military? They usually don't mess up. Their ability to take out bad guys and rip apart anything is easy.

It's afterwards that's more complicated. But I think the key thing I want to point out to the light crude and the oil that's coming out of the Middle East, though. So that does matter and who the buyers are. And the largest buyer of, or I'm sorry, China is, you know, has been buying quite a bit of oil from Iran, if I'm correct. I don't, I'm not an oil expert, but you're on to something, James. That is to me the funniest part of what funny. I mean, if you look at the data today and what's going on, there's a bunch of things that are fascinating. I mean, one of them, first of all, Brent is up more than West Texas.

That's not terribly surprising. you know, light sweet, you know, whatever. The premium there is for obvious reasons. It's not about oil production. It's about oil transportation. The, you know, look, you know, my son, you know, left Dubai and got someplace else. So I won't go through his personal life, but he managed to buy, you know, on Friday or Saturday. And, you know, it's a shit show over there.

I mean, not in the sense of there's anything really bad, but there's generally speaking, you know, around the Straits of Hormuz, the fact is the Iranians, it's a very small thing. I mean, you know, it's like it doesn't take a whole lot to shut down oil transport. Now, their biggest ally is pissed. I mean, like really pissed. This is, this is really bad for China. They don't want it to happen. And so geopolitically, they're sort of in a, in a ridiculous situation, which is, you know, if they tried to help, in fact, if, let's say, for example, they use the Chinese provided weapons to, to hit oil tankers and close the straits for any extended period of time, that screws China. So you have to look at the geopolitics here as very interesting.

And many people, some of the ones I respect the most that I've seen, some of the commentators who actually understand what the hell's going on, basically see a large part of the reason for this action has to do with China. A, as in general, there are some people who are saying, well, China was using Iran to test out their weapon systems to see how well they're working. you know, stories is not so good. They probably have to go back to the drawing board. But more importantly, the U.S. sees this as a deterrent towards Taiwan. And so we're not going to back down. It's just zero probability of us backing down at this point. And so you need to understand what's actually happening. And the straits are vulnerable for short or longer term. If the insurance companies aren't giving people insurance, so they're not going through it right now. The truth is, if major damage was done, done there, it could be a real headache for Chinese oil prices. So, you know, Mike, when you always talk about China's deflationary issues, you know, right? Well, all of a sudden,

they're going to have huge problems because they won't be able to get at the oil that they need, whereas we, as Mike points out, have no problem. Exact same thing's playing out natural gas. Natural gas in the U.S. is cratered. And it hasn't budged. It's $3. European natural gas is dramatically higher because of the geopolitical factor is the fact that, what was it? I forgot who was Qatar. One of the Gulf states shut down their LNG factories. So I read this morning.

Right. Right. 50% premium to European natural gas already. So there's a gas price. These are all cross currents. From an asset point of view, there are traders out there who are playing this in all sorts. sorts of different spreads within this market. I mean, but what Mike is basically saying is the traders have also said, this ain't lasting and oil shouldn't be at these prices, right? And so that's why when

you see that kind of backwardization or, you know, of where December is 15, 16, you know, 20% below June, you know, you know, that's a big number. I mean, that is not normal, right? You know, And so Mike is right. I mean, the world thinks this is going to be temporary. Now, whether it's true or not, that's also interesting. The last thing, and I'm curious what Mike sees about this, the other really interesting trade this morning, the one that I think it may be the most interesting, is totally rational, by the way, makes total sense, is gold up, silver down.

I think it makes complete sense because silver is a risk asset, right? You know, it's tied to the global. global economy. It's tied to, as you said, it's solar EVs. It's also tied to Tabahawk missiles, but they don't need as much silver in those drones, which are what we're really using. And a fascinating story about, you know, how we've managed to reverse engineer drone technology and get it out in the field. But the fact that silver, and by the way, it's still at 92, so it's hardly exactly falling. But gold is pushing 54 again. And that's basically, gold is monetary value, silver as risk asset. And so you're seeing silver trading more

with the NASDAQ. That actually makes a huge amount of sense. One day does not make a trend, though. But I'm curious what you think about that, Mike. Yeah, Dave, I think you're spot. And it's a key thing that always happens. Anytime you get a spike in stock market volatility, gold always outperforms almost anything, particularly leverage gold, silver. But I think it's smart to go there because I'm seeing potential peaks in all these metals on this event now. And let's put it in context. When we had rushes, and President Zee and President Putin created their unlimited friendship four years ago,

then the war started in Ukraine. It was supposed to last two weeks, it's been four years. Mr. Trump proved in Venezuela, you want to take out of government you don't like he can do it in a couple hours. So that's kind of a shocker. So since then, what's happened?

That was the bid for gold, but it took three years. It stuck below 2000 forever until 24. But what's happened since is now they've lost Syria. They've lost Venezuela. They've lost Iran as potentially toast. And this Iran, This is almost a 50-year event.

Those of us to remember the revolution in 1979. This is huge relief on a global cage potentially kicking in, kicking in by end of this week if Iran is no longer able to lash out with missiles. And if the U.S. military doesn't stop that or be able to control that, shame on them, because they've had 40 years of wargaming for this. For me, this is part of that geopolitical bid for gold getting puff. It's gone. It's not going to be necessary anymore.

And the problem is it's priced in. The last thing you want to buy on this type of rally is a gold rally. because it's like thank you we've already done the rally and if you still got a few longs it's supposed to be lightning up my point is i think what's happening here is when the dust settles which we know will the u.s should be able to suppress this situation quickly i mean it's if they can't they shouldn't have gone in and we know we've obviously been prepared for this forever but so to me this is part of that peak and like you have to expect something really bad for you know crew to stay above 72 in brunt and w t i and right now it's 79 in brent so i'm i'm looking that this is

See all that does stuff. But what I'm really worried about is this might be the trigger for all that volatility and precious metals and the collapsing cryptos to trickle down to the stock market. See, I look at at the opposite. And I'll tell you why. Well, first of all, I don't look at the opposite on gold. I actually kind of agree with you there. I think that we're at its equilibrium price. I do think that the reason for the bid for gold isn't geopolitical because it's not come.

The bid for gold, the early bid for gold came from outside of the general. G7 and those countries aren't changing their gold, their gold accumulation. That's not going to happen. I think that the U.S. use of sanctions, et cetera, those are the, we're not going back from that. So I don't think it's nearly as dire as you think, but yes, I mean, it feels topy right now in the short term. Can it run to 5500? As I said before, yeah, can. You know, can't go a little above that because markets always over correct. Yeah, okay. But let's not talk about goal for a heartbeat. Let's talk about what is the market ignoring as a potential. And markets do this all the time.

You know, one of the interesting things is when people are unhappy and things are bad, people rarely price in the good tail events. People always want to try to price in the negative tail events. People always do. So you get people will buy put insurance, but no one buys insurance against world peace, right? You know, they just don't do it. And so what does that mean? Well, if you're an investor, you want to understand what the ultimately largest potential

left tail, you know, good tail, whatever you want to call it event is, it's no longer having Iran as the world's largest state sponsor at terror. And I'm not, and by the way, this is one of those rare occasions because when we talk about markets, we talk about, you know, what we think in terms of our favorite asset prices. But the peace dividend would be absolutely massive at a time when we really need it, given what's going on with AI. But it is not priced it. People do not understand what the, you know, the amount of economic breakage, the amount of the amount of economic drain having Iran stirring up trouble throughout the GCC. Talk to people in Dubai. Of course, before this, now they're yelling it. But the entire Gulf as a global hub of economic activity

is restrained by political and geopolitical risk. That goes away, those regions will go absolutely bat-shick crazy. The demand side of the equation becomes huge. The amount of military spending is not going to decrease in the short run. It just isn't because we're literally spending enormous amounts of money. I mean, the entire increase probably in the defense budget that Trump has put in is probably going to armaments that are being used. So it's not like that's going to go anywhere.

So, you know, in terms of fiscal, the fiscal impetus is not going to decrease. You have rebuilding. You have all sorts of things that are going to go on. But the truth is it's a massive peace dividend. And, you know, in terms of, you know, drain on economies and productive use, et cetera. And markets are absolutely not pricing that. Now, is it likely? You know, I'm not a geopolitical strategist.

I'm not an expert. I've been reading lots of experts. I, as a result, I would kind of, I had to pull a number out of my ass. I would say somewhere in the 10 to 20 percent range for that kind of Goldilocks scenario where Iran ends up with civilian elections, whether it's under Pahlavi in the interim or not. And we don't want to delve into the details here as that's not this show. But that scenario where there is no, where that particular side of the global war against terror can end is a incredibly big deal.

And people don't understand. It doesn't mean the war on terror ends, by the. the way, because, I mean, as crazy as it is to see ISIS literally telling their fighters to help Israel against Iran because they see the opportunity to take out their enemies, that should warn you that terror doesn't stop just because, you know, one, the major provocateur ends, but it is a very big deal. And so there's a lot of cross currents here. And the reason the markets are, the reason I said, Scott, you know, you had a post this weekend, you quote posted someone who talked about today being the biggest bloodbath since 87.

And every time I hear that, I basically said this may be the dumbest post I've ever seen. And because, look, the worst thing that could possibly happen is something we won't know today, which is that this drags on for months. The most likely scenario for this, and it is the most likely scenario, is within days Iran's ability to act as a coherent military power is gone. and you have splintered groups with access to portable missiles firing from random locations, and we're playing whackamol against them. And the real question that we won't know for probably weeks is, will a, is there,

it will enough of the IRGC commanders and subcommanders and sub-sub-commanders effectively lay down their arms and submit to a civilian authority to where they can actually have a government? Because right, because what it will start with is what you were saying over the weekend, Scott, is will this be warlord central with, you know, with anarchy? The likelihood of Iran surviving in its current form as a theocracy with a top-down theology with top-down control and authoritarian control over their military is close to zero. I don't want to repeat that. I mean close to zero because that is literally what we're not going to allow. It could reestablish itself months from now, years from now.

But it's not going to happen. There's no way. Mike is right. There's no way in hell we're leaving. But the immediate economic impact is going to come out of the Strait of Hamouz. So that's the, that's. But understand. Control and, you know.

Can I make one more point, James? Because I just want to make just complete because then I'm done. The point that that you just made and what I'm saying is one small battalion, one truck. you know, kind of on the road with one set of commanders with the right set of missiles could close the strait of Hamoos, even if it is not Iranian government policy and what people don't understand the economic risk. And why, by the way, Mike's right that it's temporary is it doesn't mean that top down, but bottom up, somebody could decide to go ahead and and fire at all the ships that are there and try to close the straits. That's the bigger risk. Okay, now I'm done.

I'm sorry. That's exactly right. And that's, and that's, the issue right there is that short-term economically, that's what we're staring at. So how much is it, how much impact do we have there? And then because of that, you know, how much is it damage? Not that we have good relations with China right now, but how much is it damaged the, you know, any of the talks that are going on there, you know, how much is it, how much impact does it have? So that's another issue. It's hard to tell. It's, and we're going to be obviously watching, in closely, but you're watching oil move up and down. Like you said, there's, you know, the between the Middle Eastern oil and the light suite that comes out of here, they're just

completely different products. I mean, we can't, we don't even, we don't even refine our own oil. So that's great that we have a ton of oil production. We don't have the refineries to do it. And it's a whole other conversation of why we can't get those built. But, you know, that's, that's that's that's one of the the problems we have here and so um but you're watching the markets try to game all of that out and you and i fully agree that's why silver's down because it's it's basically a risk asset you know and it also ran so hard because it was one of the it was one of those assets that investors you know they pivoted to when when bitcoin started rolling over because they thought oh that's it bitcoin's bitcoin's done

on this run, I need something else that's going to be running hard. And Silver's got all of the, you know, AI and EV narrative. And we're going to take that up. And that's going to be the next thing. You know, it's not like it was GameStop because it does actually have a, you know, obviously it's got tremendous value. And, you know, but, but it's just that this is that you're watching traders move from one risk asset to another, try to figure out where they can actually make money.

And the meantime, they are concerned about inflation. or you wouldn't be seeing what's happening in the 10-year, completely pivot from falling below or getting driven below 4% yield, and then now popping right back over it on Monday morning. Yeah, I think we should just give the broad strokes on the oil situation as it is, just so people know. Like that article said, Bloomberg thinks that the worst situation could go to 108 a barrel. Just really interesting here, because Goldman did estimate specifically if you guys just want to. want to look what each potential event would mean for the price of oil. And I think that that's relatively interesting, for example, $15 for a full one-month closure,

etc. But also, I mean, people should know that Iran has been firing off missiles in basically every direction. And it's not like they're just hitting Israel or United States interests. I mean, this is Saudi Arabia's Aramco, right? So clearly they're targeting things to destroy oil infrastructure in some way, shape, or form. I mean, you can see the people bailing from that facility. And I don't know, I don't know about if that really came out of Al Jazeera. We also have to be really careful. It's something to caution people is that I've already seen a few AI video that are just not true about, about hotels or whatever hit out in resort areas. And it's just, yeah, in Dubai and whatever. It says, you've got to be careful and people just

of what the source is. And the hyperbole, right? I mean, VU has state panic moment as not all member states have sufficient energy reserves. A leading energy analyst, it's just one analyst, as the EU is likely to increase energy imports from Russia, which many people pointing to could be sort of a secondary negative effect that would not have necessarily been anticipated. I think the bottom line is that markets hate uncertainty, and we are in the peak of uncertainty right now with oil. I mean, I think that maybe is the kind of finisher there.

I mean, Mike, do you think that that's accurate? This is the initial stage, but look how significant this is. James, you mentioned President Trump meeting with President Z pretty soon in China. Just imagine his upper hand now. I kind of got sick of a leader in the South American Venezuela who was pushing back in American. Like, Puff, he's gone. Cuba, we've already warned their leadership. Poof, you're going to be next.

Iran's, their leadership's gone. Okay, Puff, U.S. has kind of got pissed off, said, you're done. I mean, this is a huge. There's only one country in the world that can do this, and they're doing it. This is not good for hope. So much so that even though Europe and UK want nothing to do with this, Canada wants nothing to do with this, they have absolutely. I love that. They say it, but then they want open season to be able to trade the U.S. is providing that.

Thank you. You're welcome very much. Canada actually support. I was surprised. Carney came out with a statement basically saying, you know, saying to Trump, good job. Let's let's let's work together, right? You know, which, which stunned me. But look, the geopolitics here, for those who are fighting, playing along at home should understand.

There's two huge effects. Z does not is, look, we're not taking out Z. We have no interest in it. This is a, this is far more of a strategic, don't fuck with us in Taiwan deal. That's what this is about as far as China is concerned. And you know what? That is a large part of what, and that is a large part of what we're, we're doing. This is deterrence. As far as Putin is concerned, there is a very real chance that this

leads to peace. In fact, if you noticed, if you noticed the tone of what Putin has been saying and doing and you notice what Zelensky's been saying and doing over the weekend, this is a gun pointed at Putin's head, quite literally. And at the same time, it's not like, you know, it's not like Zelinsky hasn't been looking at this saying, okay, look, you know, he's basically praising the action and talking about it, right? Well, here's a thing. Geopolitically, Dave, this is something that's really important. And then I'm going to tee you up here. But in Trump's first term, everything he said seemed to just be hyperbolic.

Like he just, there's threat after threat after threat. And people are like, well, he's crazy. We don't know if he would do anything. Well, now you know. now you know that the threats are not hyperbolic he's he he will act and he's got you know he's got the uh he's got the he's got the department of defense aligned in a way that he can do it now this first term he couldn't do it because he didn't he didn't put people in place that uh he actually was aligned with but now he's got people aligned with him that are are ready to do exactly what he's saying he

wants to do and figure out ways to do it rather than saying we can't do that and just move on to the next thing. And that's what's got everybody on notice. President Xi, President, you know, Putin, Castro, they're all on notice. Yeah, I mean, he said he sees a world where, you know, you take control of Cuba. Look, it was, we all kind of laughed. They did two things when he, in the first, in the first month of the term that we laughed about, calling the Gulf of Mexico, turning it into the Gulf of America and changing the Department of Defense back to its original named the Department of War. And it is exceedingly obvious that neither one of those was irrelevant. They were very responsible that I missed. I didn't really think that it mattered. Well, no, it matters.

It's like, okay, if we're going to have this capability, we're going to use this capability, and we're going to try to be a force for what we believe to be good. Whether you agree with it or not, it doesn't matter, right? At this point, you know, we could talk about regime change. Look, I have been so outspoken against the notion of foreign interventions for regime change most of my life. I thought the original Gulf War in Iraq was literally the single dumbest thing that the United States government has ever done destabilizing a region. Now, if you want to know why I thought it was the dumbest, it was because Iraq was the counterweight to Iran. So, you know, this is different. And I keep saying it didn't take out the Department of Terrorism, is the problem.

Right. The issue here is the single most destabilizing wildcard. There were two wild cards in this world. One, Trump resolved through diplomacy and one is resolving through violence. Diplomacy was North Korea. Now, is it resolved? No, but have you heard a peep out of them? No, and you won't for a very good reason, right?

You know, if you think about it, those are the wild cards. North Korea has nuclear bombs. Iran, there is no way they can have it. Anyone, no one, everyone in America ignores. Death to America was not just a slogan that they, they're not selling cereal boxes. Literally, that's what they believe. You don't give somebody who has that opportunity, who has that as their mantra, the power to actually do it.

And that's what's going on. I mean, this is going back a long time. You have to be old. Scott, you're probably not old enough, but Mike and James, you do remember. Remember in the 80s? Iran was getting close to nuclear weapons. What happened? Well, Israel, obviously with our help, went in and destroyed the plants.

Preemptive strike, boom, done. Right? You know, they didn't take out the rest of the military because it really wasn't, you know, the threat wasn't there. There's also something else. And this points back to that and back to Benghazi during when Hillary Clinton was Secretary of State. The difference is if you're going to storm our embassies now, we are going to defend ourselves. You know, back in the 80s, we were clueless. We were like, oh, well, we didn't have enough Marines or enough firepower to defend the embassy.

Now we do. You know, that's obviously become abundantly clear. And that's a difference, too. It's a different stance. Yeah, no, that's true. Who's going to come out next and say death? Go ahead. Who's going to come out next and say death to America?

I mean, this is a paradigm shift on a global stage. And there's not too many countries in a plant that are favorable to Iran, but now they're realizing, okay, this marks a major shift in geopolitical trend, which to me is, I don't want a whole goal in this environment. It's all going safe now that. That access that included Iran in Venezuela and South and North Korea is crumbling. And we'll see this by the end of the week. I can't see how the U.S. military cannot render Iran defenseless on offenses, and they can't shame on then. This is, you know, they've had 40 years for this. So now, remember, Mike, it's not about that. Iran as a functioning, unified command and control entity is already gone. It's already done.

Iran having, however, massive amounts of weaponry and people disparate, you know, with individual ability to fire weapons based on what they think the individual commanders can do and whatever. That, that, that, that, that, that, that, that, that, it's a country of, what, 90 million people. This is not small. overlay the map of Iran over the United States. It is not small. I mean, this isn't Gaza. This isn't, you know, this isn't, you know, a war in, in, that you can measure in single digit or double digit miles. You know, this is a huge country.

So it's, that's why they're warning you. This is going to be, in statistics, we call this a fat tail, meaning that the initial thing happens. And you, you crippled their command and control. And now you have, and now you have to go after the rest of it. unless the people start laying down their arms, which is what happened in there. I think it's barking back to our conversation about Venezuela and just to clarify my points, Dave, because you know, you and I kind of debate about this a bit. I think you can both be excited that Khomeini is gone and the potential that that government will be gone

and that that evil will be gone, but also be skeptical of the United States' right or reason for going in to do it. And I'm sorry, I'm glad he's gone. Much like I was glad Maduro's gone, but the United States leaving a power vacuum has notoriously been bad long term for those regions, even if you replace someone evil because we don't have a plan and we're terrible at nation building. That's A. And B, I'm sorry, when I see last year in June, the White House saying all of Iran's nuclear capabilities have been destroyed, anything else's fake news as an official statement. And then we start hearing they're a week away, they're a month away, we've been hearing for decades, literally, I am not comfortable going to war on false pretenses,

even if I agree with the outcome of that war. And so I do not think Iran is any different. I know you do. I don't think it's different. I think it's different to people who are more personally close to, you know, Israel or Jewish and all those things make perfect sense. But I think if you zoom out and look at it in a vacuum, it's very similar to a previous. Trump announcing that, well, all of the people that he had lined up and thought could be successors, well, they were killed too. Oops. So, you know. It wasn't. It's, look, separate space, you go into depth.

From a macro point of view, I think that people need to understand one thing, which is the messiness that you're talking about is going to drag on. We're not going to have answers to this. We'll be talking about this for months. as long as we're going to be talking about the messiness and the power vacuum and what will actually happen, if anything other than that happened, i.e. Pallavi comes back and shepherds and is good to his word. And by the way, for those who don't know, Mario did an amazingly detailed interview with Pahlavi last summer, which was a great interview.

And he talked about a lot of things. The most important takeaway from that interview was the son of the Shah. basically said he has no interest in being a monarch. What he wants to do is help them transition to a constitutional, you know, parliamentary or republic, whatever. I mean, but basically an elected, you know, civilian-run country, a secular civilian-run country. That's, that's his goal. Now, if he's good to his word and if he has enough popular support and that happens, that is a massively right tale, like a good tale event. Will that happen? I mean, look, how the hell you do it. But if it does what what normally happens, as Scott says, we're stuck in in an unknown,

uncertain environment for months. We'll be talking about this. There's no way in hell that we're going to have this resolved. And if we do have something resolved. Don't talk about Afghanistan and Iraq. You know, these things never end because there's no plan in place. I do want to pivot, I guess, off of Iran a bit because some of the other schickendary offense, that's now. odds of the Fed not cutting rates in March have surged to 95.7%. I would love your opinions on this. If Defense Secretary is listening, I think that the Fed is within weeks of a nuclear weapon, so we should where is what is the rate? When you look at the curve, though, the curve is, I was on this before. So let's go back to the full curve.

So right now, the market is 50% rate cut within a year. It's basically three and a half. And then flat, you know, effectively flat to two years, flat to three years, flat-ish to five years. And it just starts ticking back up, you know, 379 at the seven year to get to that four. So you have a yield curve that more or less is saying there'll be one or two, depending on whatever rate cuts and then nothing more. Two cuts by the end of this year, two. Right. And then nothing in the out years is what the bond market is saying.

Obviously, that's not true because of the way steepening yield cuts. Well, let me share this. So you could see the Fed futures off of Bloomberg. and then you, you know, we can talk about it. But you got this there, Mike? Or Scott, you got this? Yeah, I'm bringing it. Dude, is it even showing?

Yeah, no, I got it. I just have to. All right. So, so what you're seeing here is that you've got two cuts basically that are priced in to the end of the year. Okay. So here's 12.09. So it's 2.2 cuts. But then you're saying the market is saying that the, you know, the, you know, the,

The ultimate rate, not the neutral rate, what's the word I'm looking for here, guys? Anyway, you know, you're getting down to the number of cuts is 3.4 and your implied rate is 2.8. So, you know, that's in 2028. Of course, the market is always good at just kind of hedging itself, which gets to your point, Dave. And so where do we end up? You know, I mean, right now, this is, this curve is not, this is not a very dramatic curve. And it means that the bed's going to be sitting on his hands quite a bit. So the neutral rate is closer to three percent is what they're saying.

There was no expectation for March anyway, effectively, because we're on a slower curve going through the end of the year. That doesn't change the fact that people believe we'll get. The word I was looking for is a terminal rate, by the way. I could point out the one key factor that'll get the Fed to ease, get rates to go down, yields to go down, risk assets, Bitcoin, even crude oil to continue to go down, because it's still bare markets, just the upper in the range, is NASDAQ, 180-day volatility, 15% the lowest in eight years, just recovering a little bit. That's my base case for this year.

It's still the lowest in eight years. Volatility, stock market volatility will go up with my base case, and I don't see a reason to end that. all this volatility we're seeing in other markets, still not pressuring that, still not trickling down the U.S. stock market. To me, that's the key thing is until that happens, until the stock market backs up, and there's no reason for the Fed to do anything. Well, there is, there is. If we have a large spike in unemployment, there is. And then there's the other thing. Here's the funny thing is that last week you had, you had, you know, Jack Dorsey, the, for those who don't know, who, who cut half of his workforce at Block, 4,000 employees. Not a lot of employees in the scheme of U.S. American workforce,

but it was a huge, huge red flag of, wow, he just cut out half his workforce in one fell swoop. Okay, that's number one. Number two, here's another data point that some people have not heard maybe, is that I was on stage with Michael Saylor and Fong Lee last week at the strategy conference. And we were talking about AI and how much they use AI and how much, middle management has just been absolutely eliminated from the conversation because they just don't need them. And now he's not out there just slashing workforce, but he's saying that he goes from, you know, they have the heads of each department. You've got your legal officer and you've got your financial officer.

You've got your marketing officer. You've got your investment officer. And you've got those heads who are there, okay? They have long, deep experience. And then you've got the underlings that are around the. you know, intern level or entry level that understand how to prompt engineer. And then you work with that. They're going, bypassing all those people going to prompt engineer and talking to them

who's just a kid. And then they come up with these ideas, these plans, these models. And then they go to the head of that department and say, is this a good idea or not? Because now you need the critical thinking. But the vacuum that has been created between the two levels is astounding. And that's the shot over the bow that we heard last week from Jack Dorsey, that that's something to me that is kind of a, it's kind of a bell that's been rung that we ought to be watching unemployment closely now. I mean, week to week to see where it's ticking through all of this AI innovation. I have a-

What did Jeff Dupon us about? Yeah. Can I make a point there on that? What's that right? That is that what Jeff Lee warned us about? Yeah. This is a Jeff Luce scenario. Just rapidly technology's deflationary.

There are two, oh, God, I hate that. However, no, wait, wait. I don't think Jeff, well, yeah. So, but to talk about the rapid, just the rapidity of what's happening and how it's accelerating with AI, like I don't think anybody expected it to be like this. We'll see what happens, you know.

And I'm somebody who believes that jobs will be, you know, People would be displaced, not discarded, you know, and you'll have to adjust how you're interacting with your profession. But I don't think everybody's laid off. But this is, you know, this is just an interesting moment here. And that would be one of the two, you know, the Fed has two mandates and one of them is full employment. And if you start having a massive tick up in unemployment, you're going to see them pivot

pretty quickly, in my opinion. Okay, this needs a little bit of explanation, but if you looked at what happened to Dorsey's company, 4,000 people, you know, unemployed stock screams higher. That is going to replicate itself throughout the entire industry. AI is going to make assets more valuable writ large. Now, some will go out of business, yes. In any disruptive change, you know, there are losers. but the aggregate will be more profitable capital, less profitable wages, which is exactly the

societal problem pathology that we're facing now at what's so-called K-shaped economy. I'm going to get on the faces today, and I'm sure Robert in front and a few other people who've been screaming at this stuff and I will yell at each other in a bit, although in truth, I agree with them. The fact is that this basically is putting the United States into a crossroads. And the crossroads is the tools to actually come out of this with a reasonable society is reindustrialization, eliminating offshoring. By the way, this makes eliminating offshoring in services really easy because you don't need to pay people in call centers in Bangalore. You don't need to take voters in Bangalore. But you're seeing a prioritization being enforced of capital over labor.

It is deflationary in the consumer sense. It is deflationary in the expense sense. It is not deflationary in a world where what are the policies the U.S. government needs to do to stop pitchforks and knives coming out from the populace saying, oh, my God, we're all unemployed. The answer is two things. Same two things that this administration wants to do. Deregulate and reindustrialize. And reindustrialization requires lower rates. It does. And they're going to want to flood the market. And what you end up with is something that is politically unpopular, not with people, but with our. our octogenarian representatives and senators, because what needs to happen is big companies are going to get eaten by smaller companies

because you don't need to be big anymore. I mean, when you start talking about middle management, look, I don't know you guys, I mean, Mike's working for Bloomberg. They're a fairly big company. I work for Citigroup, and I can tell you that part of their workforce is useless, absolutely useless. You have middle manager after middle manager after middle manager in a world where the actual expert is now empowered. The experts who rate the smart ones who raise themselves up are now empowered to

do the job that they didn't need. You know, they didn't have these tools. Anybody who's using AI to any extent, and I'm not by any means an expert, but I use it every day just for content creation. I mean, you may have noticed. I was on vacation last week and I wrote what two or three articles that are as good as anything that I've written before. Yes, they're my ideas, but AI makes it just so much easier. If you think that having armies of analysts at, you know, just think of the analyst programs of Goldman Sachs, you know, the people who used to work 90, 90 hours a week to prepare spreadsheets and prepare PowerPoints, that's all AI. Now, does that mean that the analysts won't, won't be involved? Of course they will be. Just need less of them. But it'll be those analysts are the ones

who become VPs and, you know, that's the training program. And by the way, by the way, what does that mean? That means that the older you are, the more likely, the less likely that you're going to continue to get raises because you can be replaced easier. There's so many dynamics going on here that are going to make stocks better, but are going to cause a lot more people to have to go out and create newer, smaller businesses. And so if you don't have the, if you don't have the setup to do that from a regulatory point of view, from a raising capital point of view, you're in trouble. Now, if you think percent doesn't know what I just said, then you're smoking something because he absolutely does. they get it.

And those are big trends. We can go in one of two directions with a few minutes left. A, we haven't talked about Bitcoin at all, and there's obviously a discussion to be had, at least conjecture. Do we believe that Bitcoin trades like a risk asset, depending on how this goes? Or can it actually pull a Silicon Valley Bank or a bank of Cyprus and be a store of value flight to safety? And the other is all of the...

It's interesting. It's pretty interesting. It's, you know, I mean, it's just the, The continued un-correlation to regular markets is, it's pretty interesting. I don't know. I bet you, I think that all markets, pretty much all markets except for oil, well, oil probably will be. But depending when you measure it from, but I think markets are going to be green today. I mean, I've been, that was my base case going into today.

So not Black Monday. Yeah, I agree. No, I think it's going to be a green Monday. I mean, we're only down half a percent on the S&P and on the NASDAQ right. now, right? You know, and Bitcoin is slightly higher. I mean, you know, whatever. Look, I wrote my option thesis last week as an article form. You can all read it if you want. I'm not going to speak to it. But I think that that answer is my view of your question. Bitcoin right now is a hated asset in retail. It is the speculators are not there. And there have been people who are quietly

buying. And it's either going to die or it isn't going to die. And if it isn't going to die, it's going to move higher. And I think that it may be a relief rally now. You know, it's not anything, whatever. I still think it grinds higher. Yeah, it's just doing nothing, right? Which is fine. Like, I think it's positive that it's just doing nothing, right?

But it is up slightly today. Well, but, you know, people keep making all these stupid statements. Like Iran's, like they mine a lot of Bitcoin, so it's going to be a ton of supply. And other people are saying, it's going to be a supply shock. The answer is Bitcoin has been a lifeline to certain people in Iraq. That's true. The government, who knows what the government situation is. We don't know. We have no idea.

And so, you know, to even comment on it makes no sense. But, you know, look, risk assets, I think, are set up. I'm contrary. Mike keeps talking about a disaster. I think that risk assets are set up to have yet another good year. I think Bitcoin and the risk assets that will perform the best are the ones who are companies that will benefit from AI as opposed to be disintermediated. and things like Bitcoin, which are foundational for an ecosystem.

That's generally my belief. I have thought this for a long time. I still think it. I think that we're still working through the bottoms of the technical damages and blah, blah, blah, and all of the washout from 1010. But I thought it was worth because James, you wrote about Jane Street. You're going to talk about Bitcoin. I've been in an argument with Justin Beckler and a few other.

the people online about this, defending Matt Hogan, because they got, they're all butt hurt because Matt didn't diverge, didn't divulge, didn't divulge that Jane Street's an authorized participant, which by the way, is public record, has been public record. And anyone who knows anything about ETFs knows that pretty much if you're in an ETAF that Jane Street's in, they're an authorized participant. They, because they're literally the 800-pound gorilla in a lot of, especially the non-equity ETFs. So, you know, this notion that, that they've had a system, systematic 10 o'clock, you know, suppression of Bitcoin price is completely absurd. What is not absurd, not absurd is it is entirely possible.

And I don't know this, but entirely possible that there have been some large derivative contract related selling of Bitcoin. So you could do a swap. You could do lots of things. And we'll talk about this. I'll probably go on Bitcoin today and talk about it, just to explain it to people. But when those things are done, so a large seller X says I have, 50,000 Bitcoin I'm going to sell over the next six months.

What they often do is structure this as a product, which picks a period of time and takes a volume weighted average price during that period of time to strike the swap at. And this goes on for days and days and days, weeks and weeks, months and months and months. It happens all the time. When that is being done, who are the people who are actually selling? Well, it's the market makers because it's whoever is on the other side of the derivative. Now, I don't know if it's Jane Street.

I don't know if it's Citadel. I don't know if it's Morgan Stanley. It doesn't matter who it is. There could be someone doing it. I used to sit on equity derivative deaths, so I know this happens. That is so much more likely than some sophisticated manipulation plot that people are telegraphing for other people to front run. I can't even describe it.

I mean, I would assign the probability of it being manipulation at less than 1%, the probability that there have been derivative trades at probably over 80 to 90%. And that's generally my statement. So you can take that as you wish. I'm curious, James. How do you react to that? Yeah, exactly. And not with staying, you know, also the difference here is Bitcoin has has the ability to be levered 50, 100 times in plain view. You know, you could see this on your monitor

that there's a certain amount of perpetual leverage that's sitting on the books. That's like, that's something different for Wall Street up until today. You know, they may, may have contacts that would give them an idea that there was exposure from some big hedge funds that may have a certain amount of leverage. They don't get, they didn't get a run of orders to see exactly where they were exposed, how much they were levered, where the derivatives and swaps were. Like back in 1998, when long-term capital management blew up, we're all trying to figure out who it was, what they held, why it was happening, and what we need to do about it next. Whereas here, it's like, well, you could see right on the screen there where the leverage is.

So if they want to slam it down and take advantage of people who are way over their ski tips and just, you know, wipe out all of that leverage and then swoop in and buy it below, that's not illegal. It's sitting there for them to see it, you know? And do they have the power to do it? Of course they do. Because Dave said they described him in a simple way. They're an 800 pound gorilla.

Good luck fighting that. You know, I was at a $5 billion hedge fund back in 2000, 2002. If we wanted to move something, we could. And we weren't even on leverage. So just imagine what guys like this can do. Like the power that you have at one of these huge institutions is unwieldy at best. Right. I mean, look, I wrote this.

I wrote an article last week specifically. I'll just throw the link up here for anyone who cares. Although it is interesting, Dave, that that 9.30, 10 o'clock sell off was, it did seem like clockwork, not every day. Go ahead. Go ahead, Scott, because it's also when markets open. Well, I was going to say it's also when markets open. So, and we have the. 9.30, 10 o'clock, things get scored out.

Yeah, right? So, like, whatever happened. But, Scott, you understand. Why it happens that way is because when you're running a derivative contract or something and you want to have a baseline price, the open is very messy. So what do they do? Let it settle. And by the way, the same is true into the clothes, but into the clothes doesn't work as well because Europe and Asia is already asleep. Whereas when the U.S. open happens, there's still a late night traders in Asia.

And Europe is in the middle of their trading day. So picking a time period from like 10 to 11 or 10 to 1030 is considered to be. the most pristine time period from a cleanliness point of view. And so that's why they do it that way. It's not nefarious. It's just, it is what it is. But it is important to understand. I literally went through and described and wrote the mechanics of how, not saying it was Jane Street at all, because I have no knowledge, but the mechanics of how you can manipulate crypto markets that are five times more liquid on the perpetuals versus the spot, because it's literally the same thing that was true in the Japanese stock market in the 90s, right?

You know, I was there. So I've seen this thing. And by the way, the Japanese regulators ignored it until a few years later, and then they caught on and it doesn't happen anymore. And my point is that if Sealing in the CFTC, you know, wants to stop this, he can. He has the tools at his disposal. But anyway, I sent you the link, Scott, for that article, which explains it. And if it is true that Jane Street was actually doing this,

and it is possible, given their history. saying they aren't or aren't. I have no opinion because I don't know. Somebody was involved in 1010. And if that was not a market manipulation attack, then I don't know. I didn't fool me. You know, I would be beyond stunned if that was not orchestrated and the moral equivalent of an arsonist trying to burn down a building, not knowing it had a big pile of thermite in the basement. But Mike, you got any final thoughts? I know over time, but yeah. Bitcoin, yeah, Bitcoin, it's simple and sweet. Bitcoin's the tip of the risk assets, iceberg, the whole crypto markets in the bear

market with stock market volatility in an eight-year low. Respect at sell rallies. Initial in the year, 94 is key level. Now I think it's got to prove me wrong. Stay above 74. I think rallies near there should be sold and I still think it's going to go much lower, particularly when the stock market volatility recovers. It's not, and that's not going for a crash, Dave.

It's going for, you know, 180-day volatility on the S&B, And all markets, just to go back to their norms and maybe catch up to precious metals a little bit. So still bears. Bitcoin. Yeah. Yeah. The other topic we didn't get to is going to be Anthropic Open AI and the United States government. If you guys missed it, Anthropic basically said F you to the government.

Then Sam Altman went on TV that day and said, I defend Anthropic. They're doing exactly the right thing. And then six hours later gave into the United States government. So that was a good time for anybody who missed it. literally within six hours, I think Sam Outman went on TV, defended Anthropic, and then wrote a long tweet thread about how he's giving the United States government all of what they were asking for from Anthropic. And B, just to say, I always say this, in times of war, it's hard sometimes rationally to want to talk about markets because there's a human element, obviously,

and it's a horrifying thing that I think everybody rationally is against, but it is our job to show up and talk about what it means for markets, but I don't want that to be minimizing of the human toll or the humanity that goes into all of it. Thank you, gentlemen. Listen, we're going to be talking about this for a while. This is going to be a main topic of this show and others for a very long time. I appreciate you showing up, especially at James. I know you're tired.

Mike, Dave, thank you, gentlemen, and we will see you guys all next week for the next Macro Monday.