The Wolf Of All Streets - Politician LIES, Bitcoin FLIES l Macro Monday

Episode Date: December 11, 2023

It's Macro Monday with Dave Weisberger, James Lavish and Mike McGlone. James Lavish - https://twitter.com/jameslavish Mike McGlone - https://twitter.com/mikemcglone11 Dave Weisberger - https://twitter.com/daveweisberger1  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘2MONTHSOFF’ WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker  ►►TAP A super-powered money app - an all-in-one investment, money, and trading platform. Coming to the U.S. soon, with tons of bonuses. 👉https://referral.withtap.com/scottmelker  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉 https://www.okx.com/join/SCOTTMELKER ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=453131... ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   Follow Scott Melker: Twitter: https://twitter.com/scottmelker Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Politician lies, Bitcoin flies. When we came up with that title last night, Bitcoin was still trading around $44,000. But if you guys are paying attention, we've seen a correction down to just above $40,000 before bouncing up back into the $42,000 area. Of course, when we're talking about politician who lies, in this case, it is Elizabeth Warren and her claim that 50% of the nuclear program in North Korea is being funded by Bitcoin and crypto. We'll show you that clip a bit later. Bitcoin was flying and still, in my opinion, is flying relative to everything else. But if you ask Mike McGlone, I'm assuming

he's going to tell us it's a leading indicator of what's to come for the markets when we're seeing this correction. You guys know what to expect. It's Macro Monday. I've got Mike McGlone, James Lavish, and Dave Weisberger. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel and hit the like button. Going to go ahead and just bring on Mike and James now. Dave is listening, watching, lurking, and we'll be here in a couple moments. But as has become tradition, Mike, why don't you tell us what happened on the morning call? Where's Bloomberg stand today?

Well, good morning. Bloomberg Economics, my colleague Anna Wong pointed out that the Fridays, although the number was a surprise, it doesn't really change their recession trajectory. 80% of the gains were for government, health care, which are recession proof, and the strike resolution. So we'll see what comes, and the strike resolution. So we'll see what comes out by the next month. Pointed out the Psalms rule is just like a matter of time to kick in. They think the Fed's going to dot plots that are going to be coming out. I guess we're going to have the minutes.

They're going to show 75 base points of cuts potentially. CPI is likely to be flat um retail sales will be significant right now expectations are for retail sales to be but down a tenth percent which should be a bit of a shocker and she pointed out it was 2008 when we had those those retail sales um for the end of 2007 that were signs that, oh, this is a problem. The Fed had already started cutting rates in 2007. So keeping a close eye on the risk for subpar retail sales. Not much. One thing that was kind of striking to me is we had our technical strategists come in and point out how the stock market is. We all know it's number go up. Everything is going up. Everything is great. Everything's bullish. Exact opposite of this time last year and exact opposite of what I'm seeing in commodities.

So I'll tilt over to what I pointed out and showed in the meeting is commodities are showing a completely global trend towards recession. I mean, we have energy down about 20% a year, the energy sector. We have industrial metals down about 20%. We have cranes down about 20%. The only key thing that's up is gold, about 10%. That's giving back some gains. But that is the global space. And there's two headlines that really struck me that I wanted to bring out just in this morning's reading.

I obviously read a lot during the weekend, but I tried to. This morning, two headlines were Saudi chemical giant sees weak global demand extending into 2024. That was a headline on Bloomberg this morning. I'm like, okay, well, that makes sense why OPEC's been able to cut supply because their customers aren't really demanding a lot. I mean, remember, they might piss off their customers if they cut supply too much and prices go up. That's China and Europe. And then another key headline was from our Bloomberg intelligence group that global economy is set for 2.7% growth in 24, down from 3.1%. And that's a lesson I learned in trading treasuries.

It's the trend in demand estimate revisions, and they're still down. 2.7% growth would be the worst since the financial crisis. And when is the next time we can expect demand estimate revisions for global growth to pick up? Commodities are showing that big problem. we can expect demand estimate revisions for global growth to pick up. Commodities are showing that big problem. The key big dichotomy on a global basis is this resilient U.S. economy and the resilient U.S. stock market, which would be wonderful if it keeps going. What you're seeing in Bitcoin this morning is showing the lessons that you kind of hinted at.

I still think Bitcoin is the number one leading indicator for risk assets um and this year was like last year was down about the most and this year it's up about the most and obviously we're getting that little tilt downward which is completely expected you know it's just kind of way overdone um now we know 30 is a great floor support level but i look at this is um it's kind of this we're at the point now we're kind of going to be sliding in, just gliding into the end of the year. And a lot of things you see in the screens might not matter, except for me. And from a commodity standpoint, I see nothing but a global tilt towards recession. And I'll end with this. It was only a few months ago, central banks, most central banks on the planet were still hiking rates. And the effects of those, just normal lessons of history and economics and cycles, those

effects are not even barely, just far from being felt yet. And the market's already priced for a lot of E's next year. We have ECB and BOE this week, I believe, right? Bank of England and the European Central Bank. So a lot of people, I think, watching those to see if that'll give us a preview of what might happen down the road for the United States. This is in Bloomberg today. Rate cut pivot can't come soon enough for debt strapped companies and governments, if you actually read into this. There's a lot of people who not only want this pivot to happen, but need it to happen. Right, James?

Oh, yeah. I mean, we are just like Mike said, we're not seeing the lagging effects yet of just the sheer velocity of rate raises that we've seen over that 18 months. So one of the things that I pointed out this weekend that I'm surprised more people weren't talking about and should be talking about is the fact that we've got three big bond auctions coming up the beginning of this week, you know? Um, and,

uh, and really most importantly, you've got that 30 year bond auction on Tuesday, which is a few billion dollars, uh, smaller than the last auction. Pretty interesting that the, uh,

the treasury decided to, to float fewer 30 years, um years after the last one was just abysmal. So I think a lot of eyes are going to be on this, but I do expect the Treasury is kind of positioning itself for success in this auction because if it doesn't have success, that's a severe red flag. That's a really big red flag for us. They've been issuing more and more and more T-bills on the short end of the curve because they're able to use that money market, the money market funds that are sitting in the reverse repo, and they're just drawing that out. And when that's gone, they're going to have to go further out on the curve unless they just continue with this bandaid of short-term treasuries, short-term treasuries. But the problem if they do that

is that they signal that there's not demand on the long run to the curve and there's not demand for U.S. treasuries as an asset. And that's a major problem. So I'm watching that Tuesday auction pretty closely to see what happens. I expect it's going to be okay. I expect because they're issuing, I believe it's $3 billion less than the last auction. And they probably had some solid discussions with dealers. I think that the when issued market is not going to be trading quite as optimistically as it was last time. Uh, you've already see yields ticking up here. They're up a percent this morning. And I mean, again, 1% in a, in, uh, you know, a 10 year treasury is a lot. So that's, that's a, that's

a quite a bit of a move for, for one day. And so I believe that the street is aware. They're wary of the auctions. They're keeping an eye on them. And so while everybody in equity land is waiting for the Fed, I think they ought to have one eye on these auctions as well. Right. But this idea, obviously, from this article as well, was that these companies really need these rates to come down or they're going out of business and it's kind of like what we saw with silicon valley bank and all the bank collapses where they were just too skewed towards the long end and right but it's

kind of it's kind of interesting yeah it's interesting so we've got rates the rates came all the way in off the you know uh the the the soft landing narrative has just been so broad and we just keep hearing it over and over. Half the articles I read the few minutes after I got up and between the few minutes I got up in the show, half the articles, because it's only 6 a.m. here, half the articles I read were about how the Fed is achieving this. They're winning. They're going to have the soft landing. And you've got strategists who are calling for the S&P all-time highs next year and in 2024.

And then you've got the other half, which are like, we're going to have a recession, but it's not going to cut deep. So nobody expects that we have any event. It seems to me it's clearly not the overwhelming majority. It's a very small minority that believes that we could have some sort of event that knocks us off kilter completely. I don't know what that would be. That's why they call them black swans. But the fact that nobody expects it at all, everybody expects either a soft landing or a really shallow recession, that gives me concern as an investor who's been doing this for a long time. When the entire street is looking in one direction, you should be aware. I got to piggyback on that one a little bit, James. I think it's the concept

of people expecting black swans. I remember that book came out. I remember a good friend of mine was reading it in 2009. Insurance policy is already over. That trade already happened. The key thing I'm worried about is a gray swan. And that is just what you described is this is almost complete juxtaposition of this time last year. I mean, recession was assumed, accepted everywhere, and we didn't get it. Yet we've had this massive rally in all risk assets. And now that we're all expecting, it's OK, the Fed's going to ease. It's a soft lane. You and I both know as traders or risk managers, the probability of success next year is a little

bit of the counter trend to the acceptance. What people generally accept is Benjamin Disraeli said, typically doesn't happen. It's the trade for next year. It's just a little bit of reversion in all risk assets. So you mentioned the bond auction. I'm a bond guy at heart. I started in bond trading. And I mean, to me, the number in trade I always love is trading zeros. I mean, long as possible. You can get a lot of pain in zero coupon bonds, 30-year zeros. So one thing I'd like to point out is my colleague, Ira Joy, pointed out, as you mentioned, the 30-year, it's a reopening and they typically go well. So I think that's the consensus. And I think you're also seeing the bent, the tilt towards the government and the treasuries realize, okay,

if there's the most significant asset in this planet that really matters is the us needs to manage that 30-year it's the benchmark and do it well so i think and also a key thing i'm enjoying is the way human nature in psychologies and cycles work is the markets just assuming because rates are going down from the highest levels in 40 years um and yields are going down that's highest levels in 40 years and yields are going down. That's great for the stock market. But I think they're missing. Well, what did you expect as we tilt towards a recession? Yes, rates and yields have to go down. The question is what stops that downward trajectory?

Typically, it's the things that used to be the case of Fed would ease. But why should they? I mean, this is what's changed in our entire career. We've never seen that pump up in, let's say, in inflation and from massive liquidity. And we're still seeing the aft effects. We're still in that hangover. Yet the market's expecting the market, the Fed and central banks to do what they always have. Just throw the liquidity at the market. Yet they've learned that lesson of throwing liquidity at markets in inflation. So to me, that's the fight the market hasn't figured out yet. And I think Bitcoin will be the first one to figure out, okay, well, we might not be getting that massive liquidity that we're used to. And I bet Dave is ready to fire up on something. Yeah. And I want to, before I let Dave fire off, I want to bring something up because we talk about Bitcoin being a leading indicator. I personally think in this case, the evidence

shows that once again, we had a massive ramp up in open interest and someone took an opportunity to flush that out and make a whole ton of money. We have roughly $400 million in total liquidations. We were talking about these last week, if you guys recall, and it was very even short long, even as price was going up, which I found astounding that longs could be getting liquidated in this environment. But this time you're looking at 86% was longs that got flushed. Like for any big trader who understands Bitcoin, there was a huge opportunity to just sell this off and cascade liquidation to make a ton of money. I mean, Dave, does that align with what you think probably happened on this move? Well, it is what happened. It's very clear that it's what happened. I was actually right now furiously typing, looking at last night and the perpetual swaps were printing well below

spot, you know, and so you can kind of see it and spot kind of looks like it led it. So I'll go through and do the diagnostics later and post about it. But, you know, look, at the end of the day, if you if you look at what happened and you look at it, the mechanism of why it happened is it's almost always the same every time. You know, there's a possibility to what happened last night, which is interesting. It means that it was nowhere near as profitable as it usually is. But the numbers from a technician point of view, and you have your chart guys on later in the week, you'll see it. The number is almost textbook. So we had this rally when I won the bet last week, when it pushed through 40 all the way to 44, which is a crazy size rally. And what have we

gotten a 50% retracement? I mean, literally textbook, where did it bounce right below the 50% retracement level? Where is it kind of holding Kind of right there. So, you know, it's not terribly surprising. I mean, Bitcoin is an option. I've talked about it a million times. Expect its volatility to be higher, not because it's a risk asset per se. It's a risky asset per se. And that's where Mike and I differ. We've talked about this a bazillion times on the show. I don't want to go over old stuff, but I also want to point out something else. Your, and I loved your, I actually copied it in our recap, your no, no, no, no, no, Dikembe Mutombo moment to what happened to gold and silver last week is exactly what happened to Bitcoin. So Mike's talking about Bitcoin as leading indicator. Sounds good on TV if you're doing a soundbite. But as soon as you look at it, you realize it actually suffered exactly the same sort of rejection, you know, at a, you know, at its level as gold did.

So I don't know that there's a whole lot to read into it. I think that the fact is we've seen, you know, you get these flushes, you get open interest. Now, the truth of the matter is there wasn't that much. You know, there was very little euphoria at 44. So, you know, this wasn't a billion dollar liquidation kind of event. Moreover, my guess is there was more demand on the exchanges where they wanted to push the price down than they would have normally expected. That didn't mean they didn't make money doing it. But it is important to put everything in perspective. I mean, you know, the price of Bitcoin has basically, you know, basically doubled, you know, since it's not quite doubled to 50% from where it was last

time. You know, if you go back and you look at liquidations, liquidations we saw in the summer event were much larger than they are today. And so as a percentage of its market cap, it's just not that big. And it's kind of crazy. But, you know, $350 million is non-trivial, obviously, but it's really not that large. I mean, in the FTX days, we'd see a billion. Right. that large so i mean in the ftx days we'd see a billion right right so you're looking at this and and you say okay well you know the the big buyers in america aren't aren't awake when this happened i mean they were actually awake it's sunday night people are watching football or doing whatever the

hell they're they're doing uh you know they're cowboy Eagle fans, but the reality is, is, yeah. I mean, you know, it's like, it's always these like dawn raids at varying times that this stuff happens and, you know, no news and, you know, and, you know, look, you called it, Scott, you, you, literally within minutes of you posting your tweet about the candle, lamb. And it was no, no, no, no, no. I'm going to start calling you the chem bank.

Lucky timing. Lucky timing. Yeah. I mean, eight straight weeks. I think the trend we need to step into that is tough. I mean, look, there was some euphoria in some of the altcoin markets and some of those got plastered. And I'm sure you're going to have a great time on blocking, unlocking that this week.

But look, I think that it's, if it were done in a normal way, and we weren't dealing with this sort of, you know, gap volatility to the downside, which of course, is like asking, you know, whatever it is, it's one of those things that that is the way the market works until the market structure changes. The fact is, is I don't think it changes a whole lot in what's going on. Now, that said, you know, both, you know, James and Mike said a few things that were interesting the bond auction almost certainly they are being

smarter they realized last time they didn't really do a great job of checking in and doing their normal master class of manipulation so expect expect class to be in and the bond auction will go off you know reasonably because they've done their homework last time they didn't and you know it's like it basically proves them that if they're not you know putting their thumb on the scales they got a big problem and we kind of know that and that goes along with what Mike was saying the other thing Mike was talking about was retail sales and look you know the American consumers being in it been an engine but

a large part of that engine uh the cylinders are all glunked up because you can't take money out of your houses when mortgage rates are like this uh your 401ks are are literally the only things that that people are having to sell but based on what's gone on in the market there hasn't been a whole lot of selling yet and so it's one of those things that you know i, I come back to the GI Joe with the Kung Fu grip line, right? You know, you kind of think that we should have the opposite of a Santa Claus rally this year, at least in the stock market, people to pay for whatever they're spending in December, because it's literally the only place they can go. And they can, they can borrow from it without

selling. So, which just, just piles a little bit more debt on top of all that debt. So, right. So remember, look, remember everybody has to recognize the fact that Bitcoin, yes, it has been the leading risk assets, been the tip of the spear for years here, you know, but in this, in the last number of months, it is diverged from that because it has significant underlying fundamental value change that's going on with the probability of a spot Bitcoin ETF. And so as people realize that this is coming mainstream, it's giving an absolutely giving a fundamental lift to to the price of bitcoin and so uh i i believe that it's going to remain i don't believe we're going back down to 16 18 000 i just

don't i don't see it of course it's bitcoin i could be completely wrong but uh yeah it's cotton what can i say please please please be wrong yeah so yeah and so that that's that but that is a significant uh that's a significant development in bitcoin that that uh that we have to recognize and as we get closer to that next date uh do you guys know when it is it's uh it's in january it's um that the next drop date for for the sec you know it's the eighth okay i was thinking ninth for some reason so okay yeah man maybe it might have been close yeah so that that is on but that that is giving a fund that's fundamentally changing the way that this is trading and so like dave said what happened last night was yeah it's a washout of leveraged leveraged trades you know that it's the it's a story I've seen all the way through since I've been

watching it is it's a foolish trade in my opinion so yeah that's time right I got a question for the three of you. There's something that's been bothering me for a while, and I learned the lesson the hard way is we've had an enduring U.S. stock market rally for over a decade. And what it's done, it's pumped up U.S. stock prices versus the rest of the world, versus housing, versus everything, the highest prices ever, versus GDP, highest prices since 1930s. And the one thing I've learned is until that ends, for your average retail investor or money manager or wealth manager who has access to a good Bitcoin ETF within the next month or two, until that what's been making them money and making them look good and their clients do great, until that ends, i see little reason to

stop doing that and it's a lesson i learned in in marketing i used to ran commodity indices and every i remember learning this at conferences all these wealth managers told me well why would i best invest in a commodity index that tracks futures when i can invest in equities that go up more anyhow or energy equity so to me that's the question for the group is there's so much how many many ETFs are going to be launched? I mean, a dozen or so and Bitcoin. And I mean, that's kind of extreme. We're going to be telling the story of history, like, yeah, the market got too enthusiastic about something that expects to change. And I know what Dave's going to answer, but the key question is you got to get people who've

made a great money and with their clients for over a decade, just being in the stock market to tilt over to this thing called Bitcoin. To me, that's the key thing I'm worried about is until we get the stock market at some point, you're going to have a bear market. We have to, obviously it's not one way I measured is the big, the S&P 500 has not been below its 60 month moving average on a closing basis since 2011. Okay. Well, that's pretty down long bull market. Yeah, but we see winners and losers in ETFs all the time. ETFs are not cheap to start. They cost hundreds of thousands of dollars just to get them listed and going. So not anybody can just go out there and list one and manage one. But I believe, Mike, I believe that the reason that Fidelity and BlackRock in particular are launching these is because of the demand that they're already hearing demand from

their clients. And so that's a key indicator for me is that they wouldn't do this unless the demand was there. Like the market is ready for it. Now, is it ready for 12 ETFs? Likely not. It will consolidate down to three or four. There will be the BlackRock, there will be the Fidelity, there's going to be GPTC in my opinion. And then there's going to be one that rises and takes hold that is one that people are willing to hold in their 401ks who are Bitcoin maximalists that don't want their money at Fidelity and BlackRock. So there's going to be a number of them. And we all know this as risk managers, if you're going to hold gold in an ETF in your

IRA, if it's a long-term holding, you should probably hold a few of those. 12, that's a lot. We don't have, I mean, are there 12 really heavily traded gold ETFs? I don't think so. There's a handful, three or four, that really take all the market share. So, yeah. Yeah, but that to me is the most bullish case for the ETF is because all 12 will be trying at once

if they get approved. The marketing campaign in that battle for AUM is going to absolutely blow minds, I think. And it's just going to be sort of a de facto marketing campaign for Bitcoin. At least that's my sort of wet dream surrounding this in the short term. We see them everywhere, every subway, every TV, everywhere. Man, I was watching some football yesterday or basketball the other day, and every commercial was Coinbase. Coinbase is running commercials like mad right now. So, I mean, we're getting the marketing now again. I'm seeing the same

thing in GBTC. I just look up, I see it in CNN. And then I've been in, I think, what, a dozen airports in the last six months. I would say at least half of them, I saw GBTC on the screens. Really? Interesting. Yeah. He's mentioned that before. Yeah. I do want to circle to the topic. Well, two things. Dave, you kind of mentioned- I just want to say one thing. I think the ETF in Bitcoin, as it refers to as it's based on whatever, us at retail investors is netscape's ipo and those of us who are old enough to remember netscape's ipo uh in 96 uh the internet bubble didn't happen in 96 the internet bubble really accelerated in 98 through 2000. Yes, timescales are compressed these days, but it is the first product that a mainstream investor who has a brokerage account, who doesn't want to, you know, it won't be, how do I do this crypto thing? What place do I go? I've heard these people aren't real,

they're not regulated, etc. First time you can do it, it is literally the same thing. The Netscape IPO rang the bell it took a while there were ups and downs things went were extremely volatile we had a rational exuberance back then we've had all sorts of stuff at some point however it is the introduction of this stuff to the mainstream and that is why by the way it has taken this long, because the people who don't like it and realize they don't really have much of a choice anymore, have been fighting it. And they're still trying to fight the all the other stuff, because what where the real mania will be will be not in all those Cisco and the other internet stocks that other stocks, you know,

AOL, Netscape, all those things went crazy. What really went crazy in the internet bubble were all the small cap crap, most of which ended up being flushed out, but some of which ended up being winners. And obviously the ones that were big were, you know, Amazon, et cetera. We know the horsemen now. But my point on this is that the reason for all this stuff, and we saw it based on the story, this is your perfect segue, Scott. The reason Elizabeth Warren and Jamie Dimon are saying such complete bloviating nonsense, you know, provably wrong crap in front of the Senate is because while they may accept Bitcoin and, you know, they don't love it, but they understand it. What they really want to do is stop that, that that excitement in the technology that

will fund the real next generation of disruption. And that's really the issue here. So we could talk about what all this stuff means. But at the end of the day, remember that the reason why the Bitcoin ETF matters is because it's the first mainstream product that is going to get marketed by mainstream people. And then people who become crypto curious, they get Bitcoin, then they start looking at other stuff. And so it's, we all know how this story goes. I just I think that's a very important point. It's also an important point that it took years, you know, from the event that I did for it

to go in. So this is not a snap your fingers and jam. And if there is a global recession, there's a global recession, right? So it is worth understanding that. I like the analogy. I would have mentally maybe compared the Netscape IPO to Coinbase when they came on because it isn't necessarily an ETF. It was the single largest company basically going public in the biggest name that introduced it publicly. And we've seen what happened with Coinbase, right? Absolutely slaughter. And now this massive bounce in the volatility that you talk about. And I actually think that Coinbase will be a huge winner if the ETF is approved,

just because obviously their name is on everything. They're partnered with BlackRock, the surveillance sharing agreements, all that. But you did hearken elizabeth warren and so now she she cometh uh the devil from from satan from hell herself will now uh grace us with her presence i want to show you some of that bloviating that you mentioned right here because it does say politician lies bitcoin flies right out there it's crypto and it is being used for terrorist financing it is being used for drug trafficking north k is being used for drug trafficking. North Korea is using it to pay for about half of its nuclear weapons program. We can't allow that to continue.

I would agree with her if it was true. Yeah, I mean, could I just, I mean, I tweeted this stuff out. It was my most. I stole the title from your stream anyways dave so you get first crack at her so yeah well you know hamas so let's talk terrorists hamas told their donors uh last april to stop using bitcoin full stop uh yeah there's probably some stable coin stuff that's going on you know but it it is a fraction a tiny fraction of what traditional banking is using and a tiny fraction of what those uh money changers all tiny fraction of what those money changers all throughout the Arab world are doing. And that is through a function that's basically cash and debit cards and other sort of stuff. I mean, it's fractional. More importantly, though, point two, you talk about drug traffickers, only moron drug traffickers, only dumb ones do it.

Because at this point, the FBI is catching the drug traffickers that use Bitcoin far easier than they're catching the ones that use pallets of cash. And the FBI will tell you so. I've heard it from FBI directors three times at three different conferences. It is very clear there is a reason they don't have anyone from the FBI testifying at these committees. Why? Because we're the DEA, because they would have to contradict or lie. And, you know, kind of officers of the law, you know, they may lie, but it's probably not a really good career move to have it proven. So they stay away from it. Now, the third one is the most interesting one, though, right? That's the North Korean, you know, military, the North

Korean one. And here I want to make two points. Point number one is it is completely unproven. Sure, the Lazarus Group is one of the largest cybercrime, you know, committers in the world. That's not just crypto. That's just cybercrime. And some crypto is vulnerable to cybercrime. Yes, that is true. And so when you lock up these numbers and you look at them, it's like, OK, money is fungible, but it isn't really that? I mean, it's cybercrime. But the most important point is why is crypto and these projects, why are they easier to hack? Well, they're easier to hack because of Elizabeth Warren, because she has blocked with her iron fist on the SEC any reasonable regulatory regime in the United States, of which being, you know, cybercrime and

disclosures, all the stuff that happens would be stronger. Now, would they still be able to hack? Yeah, probably. Would it make a material dent in their ability to hack these fly-by-night things? Well, sure. If people had a more regulated, a more robust industry-sponsored, you know, way to get into crypto, there probably would be more of that. But that doesn't happen. And that's the problem with regulation by enforcement. So literally, you can trace part of what she's saying right back to her own doorstep. And I find that reprehensible that nobody points that out. Now, obviously, people like the way I pointed it out, but it's very clear. Regulation by enforcement pushes stuff offshore.

A lot of the offshore stuff is completely unregulated and therefore, and people are incentivized to make bets. And let me be clear, I am not saying regulations are panacea, but if you're a business owner and you have a choice where you know there's no, there is nobody who's going to make it an existential problem. And you have a choice of take a betting on black. And if you win, you make piles of money. And if you lose, well, not your money anyway. You don't really care. That's something we used to call the trader's option on Wall Street.

Everyone on Wall Street knows this, that you don't want to give any trader a payout based on their profits without risk managing what they do. Well, now take that to an entire industry and you have companies out there who say, well, you know what? You know, I want to name them because there's lots of them that we know. Companies that basically short shrifted information security, who didn't care so much about paying for it. Why?

Well, because there's no real risk to them. They lose that. Yeah, maybe their business doesn't work, but they're betting on black. And if they're right, they make hundreds of millions of dollars. And if they're wrong, okay, they start, they pack up their tent and they go to the next store and they try to try it again. Obviously, thankfully, Doquan's being brought back to the US and he won't be able to do it again. But there are lots of other people who did that on the InfoSec side. Having regulation by enforcement makes that easier and easier for the hackers that is and i think that's a very important point okay my rant's over today sorry sorry i got

a really quick one um it's just the lessons of history is bad guys oftentimes adopt revolutionary technologies to and and it's just an example of how revolutionary this technology is and so i like to say elizabeth warren might be right but doesn't mean we're supposed to eliminate guns because they kill people. I mean, that's bad. It's how it's properly regulated and can't eliminate guns because they kill people or knives. But this is this technology is revolution. I got that sense being in Asia and in Hong Kong five years ago. I was like, Mike, we can get dollars and access to something that's not going to, a non-melting currency for the first time in history on something we can get for $12. This is something that's unstoppable. But I, so let's take Elizabeth Warren is a great antagonist,

her and some of her colleagues, because they're not friendly. They're not nice and they're not, they're not attractive. So thank you. I mean, it's like perfect. We can write the history books about this. So I love when they beat up on things, but the technology is, I'm just, you read all the history of how bad television was going to be and how bad railroads, because they went too fast, and electricity, and even the internet. We remember that. Oh, it's not going to, you know, it's just silly stuff. But to me, this is just indicative of how revolutionist technology is. And we had, you know, 20,000 wannabes and we're getting down to 10 that really matter. Yeah, it's interesting because Elizabeth, you know, she always claims she's fighting for the small person and she wants regulation in order to protect people, the little guy, but then

suddenly she's squarely aligned with the big banks here. It almost seems like she's protecting them. And if you just look at first principles, like what, what is Bitcoin to, uh, to Jamie Diamond is just a tremendously disruptive technology that impacts his business negatively and so it it almost feels like and i i don't know i don't have any um information but it just feels like she is squarely aligned to protect them and for political interests and that, that it's, it's seems obvious to me, but that's, uh, that's me and my, uh, my, my, my little, uh, you know, my little house off on the Prairie watching this from afar. And, uh, DC is just there, there are agreements inside DC that we're just not privy to. And this just seems like one of them. DC is going to change soon. I mean, I think we all

know that Elizabeth Warren is a liar. We probably don't have to spend too much time on it. Dave, I do want to say one thing that you kind of mentioned earlier, which was the altcoin market. I also found this interesting, just anecdotally, when we saw this big flush, we did see a pretty reasonable move in altcoins down. They bounced pretty fast. But a couple of them, which we never see if we're truly flipping going bearish, a couple you can see these were liquidated shorts. Like I just was looking at the ones that perform. I mean, Injective, this is one of the better performers this year. Currently at 23.

The all time high is 25. Right. If you're flipping into a bear market, you usually don't see coins go from a dollar to 23 in a year. AVAX, this entire ecosystem didn't care about any of this drop continuing up. I just think it's very interesting and kind of supports the idea that nothing really changed here, that there's a lot of these altcoins that literally don't care what Bitcoin does right now. And if you're really in one of these moments when the market is rotating and things are about to correct massively, you generally don't see anything performing or outperforming.

I mean, look, it actually looks from, you know, that Ether, you know, as a proportion liquidations. I mean, I was just looking at the 24 hour liquidations. I mean, Bitcoin around 90 million bucks and Ether at 70 some odd million dollars. Yeah. Given their proximity and market cap, it looks like this was more broad based. I broad based i mean broad based remember this is all within like a five in minutes right you know this was you know one of those those one candle no i mean it's minutes i mean literally you know a big flush and it looked like it was an attack which is different than normal i mean normally it's bitcoin leading it down on this because it's easier to do it there or Ether.

This one looks like Bitcoin and Ether and everything else just kind of followed as opposed to it being a broad-based thing. So it's kind of fascinating. I mean, it makes sense in a way because Ether had such a strong bounce off of, I mean, the Bitcoin-Ether ratio bounced strong off of 0.05 back up. It was at 0.055 for

long, and then it went all the way down, almost in a very monotonic chart down to 0.05, and then went bounce back to 0.054. It's now 0.053. So Ether was hit a bit harder. But it is interesting when you look at that sort of stuff, right? Because it's telling you something and it's telling you that, you know, this was less profitable for momentum ignition, you know, manipulation stuff, but didn't, it is what it is. I mean, and the only reason it's less profitable is people doing it aren't incredibly dumb. I mean, I keep explaining this to people. The way you do this strategy is you build up long spot, short perpetuals. There's three times or five times the liquidity in the perpetual. And then what you do is you start selling this and hope to buy this cheaper. But if this doesn't go down as much as you expect,

and this bounces, then you can get hurt. Well, it didn't bounce, but it didn't go down as much as they expect. So they made a lot less money than they might have otherwise made. It's the kind of thing that, look, were there a global regulator, they would say if you did this intentionally, you'd be doing a per block. Well, jail, no. I mean, it would just be a fine. Look, this strategy was built, I hate to say it, by my old company Citigroup two decades ago. And the nickname for the strategy was Dr. Evil, literally. That's how come they got caught. Because they did it

in sovereign debt versus sovereign debt futures. Sovereign debt being less liquid than the sovereign debt futures markets. They got long sovereign debt. They got short futures. And they said one day, okay, look out below, bam, started selling sovereign debt across the board, didn't touch the futures and put their bids in lower and made money. Now, when they started investigating this, the only reason they got caught is because the code for this strategy and it was pretty, it was done programmatically was literally labeled Dr. Evil. That's what they called it. And they had the email to prove it. And so they got fined at the time. I mean, back then we were,

our timescale and our things were different. It was like a $20 million fine or something, which now that sounds cute. Kevin, we've just seen. It's 4 billion casual Casual 4 billion. I mean, for Citigroup, it's like, who cares? I hate to say it, but it's a time-honored strategy that most people don't want to see happening. And I think most people in the Bitcoin market would love to see that go away as well. But it is what it is. It doesn't matter. At the end of the day, it tells you where the real

buying interest is versus speculators. Real buying interest in this particular case was at 42, not at 44. Eventually over time, it might ratchet up, but it tells you something. And so yeah, we're kind of where it should be right now in the state. That's really kind of the point. And what happens from here on in? I mean, look, my forecast, when I made it, I said I thought we would bounce between 42 and 46 until January. That's what I thought. And maybe I'll be wrong. Maybe it will break 42. Maybe it'll go back below 40. Who the hell knows? I mean, you know, look, there's always black swans and things that can happen. But it is important to put everything in context. I want to ask you guys another question that we're probably woefully underprepared for, but we've obviously been tracking what's been happening in Argentina with the election of Millet, who was kind of pitched as a pro-Bitcoin presidential candidate. As we know, he won. He was more pro-dollarization and not anti-Bitcoin, I would almost say, if we're being more genuine about it. But he's making quite a bit of waves. And

I guess what we have here, new president tells Argentina shock treatment looms. He basically is one of the first candidates I can remember in a major country that literally ran on a platform of austerity and won. Right? I mean, he's literally saying this is going to be extremely painful. There's no money. We're going to slash everything. You guys are going to feel it. And everybody was up for it. That's how bad it was in Argentina. Could that, maybe James, could that get so bad in other places that people, because this, in the United States, you would think that a guy like this would literally be laughed out the door, wouldn't even get 1% of the vote, right? Saying you're all going to feel the pain. What we see in this country is the dead opposite. You just say no contact you know whatever we need to do to stimulate you mean we could i don't think we have a candidate like

this but how bad must it be in a place like we actually do the most right yeah no it's it's a really good question and uh you know if let me just see if I can bring this up so we can, so we can show exactly, you know, this is, it's no surprise why, you know, this happens. I mean, this is, this is the value of their money against the U S dollar. I mean, this is why these things happen. You know, if you're in Lebanon, you're in Venezuela, you're in Argentina, you cannot store. We've seen the stories from Lynn Alden about Egypt. You cannot store your money. You can't store the, it's not even money, what you've created at work.

You can't store that in the local currency. And that's, that's why these, that's why these, you know, these candidates are driving to the top of the heap because the distrust of their central bankers, and they want somebody who will clear that out, even if it means short-term pain, that it's that bad. And so the point is, can that happen here in the United States? We're nowhere near this. I mean, with all the hyperbole that we talk, we hear in the United States about how bad inflation is. Inflation is painful. It is. Like, I do not want to belittle that. Quality of life is going down for many people in the United States, but not like this. Like this is just, this is criminal, you know, to do this to your people where you will work every day

and every single dollar you have, if you don't own assets, you're wiped out. You know, you lose virtually everything you have every year. But for all of his bluster here, I don't know if you guys saw, but the first thing he did, remember, he ran on the premise of eliminating the central bank entirely and de-dollarizing. First thing he did was basically reverse on all of that, hire Luis Caputo, who was the head of the central bank under Macri, to run, to be the economy minister.

So I think he signaled to the rest of the world. I ran on a crazy platform, but I'm probably going to actually to some degree get in line. Yeah. I mean, well, how, how can you not get in line? The system is so powerful. It is, it's extraordinarily powerful. So unless you have, you know, and so, but this, this is how dictators are born, right? So. Well, but look at what he actually did, guys. I mean, first day, 21 government departments down to nine. It's like the first thing you do, it's like, yeah, you basically have to cut spending on stupid shit and reinvigorate the economy.

I mean, look, we're so trained now. It's like it's like I hate the soundbite economy. Right. You know, we're so trained to say, oh, it has to be immediate. But things do take some time. I mean, you know, Thatcher in in Britain, you know, it was it 40 years ago, you know, came in and basically it took time. But, you know, it made a big difference. It was cutting government crap in order to reinvigorate private industry. That's really what he's doing. Everything else he's doing, there's basically a three-prong plan, and the third prong is what we would focus on. First one is get government out of the way of private industry.

Second is reestablish some form of soundness to the money, but you can't do that all at once when you don't have any. So, you know, you do that second. And then the third is to get a little bit more radical with regard to that and probably make money absolutely sound. But you got to go. You can't go from here. It's like crossing the Grand Canyon. Right. You know, you got to kind of go down and kind of whatever. I mean, you don't just build a bridge over it immediately. So, you know, expecting in his first day for him to have dollarized and done what he could do. I mean, it's not even building a bridge. It'd be more like hitting a reset button. Yeah. That's really what he, what he's looking to do. If you think the reason he hired that guy and I don't have to, I could be wrong. I have no notion. But the obvious smart move is to try to make the restructuring of debt more orderly.

And who best to do that but the person who knows all the goddamn creditors, right? So it's like, you know, the answer is we're going to get rid of what you used to do for a living. It's going to take time. I need somebody to help me get the creditors in. Do you want to be part of the solution or just go down in history as part of the problem? And that's probably how he presented it. That's fair, yeah.

And my guess is that if someone's sitting there saying, you know what, this is better. I mean, I understand this. So I don't think, I think you got to be a little bit more patient than that. I mean, the fact is we do have a candidate that's actually calling for what Millet does. I mean, I wouldn't think I think you got to be a little bit more patient than that. I mean, the fact is, we do have a candidate that's actually calling for what Millet does. I mean, I wouldn't surprise. I would have been very surprised if he's done vis-a-vis offending people's sensibilities. He's also young and people don't trust him, yada, yada, yada.

But his ideas are the right ideas. It may just be one or two cycles too soon for it. But this is literally what he's calling for, is getting rid of bullshit government agencies, eliminating red tape to reinvigorate the economy. And so it is worth interest. It's a very interesting experiment. Right. It's the right thing to do. I got to point out two key things on this from a macro standpoint. First of all, those of us remember Walter Mondale. I will increase your taxes and I won't be elected. We remember him. He became, I think, an Illinois Supreme Court justice. But we kind of liked him in Illinois when I was living there.

But so that's very unlikely. But that is one of my fear, key fears. At some point, we're all going to get to a point where we're going to be a candidate and say, you know what? This silly, stupid, we can't just spend to oblivion. We'll stop the change. The key thing I like to point out is it's probably not the time in this country and you guys covered it well but one thing i want to point out is this massive shift of the last 20 years of trends towards china against south america and i'll use one key metric currency value if you look at the one year change in the mexican peso versus the us dollar it's up 12 you look at the one year change in the brazilian real two largest countries in south America versus US dollar. It's up 8%.

You look at the one year change this year, I'm sorry, just to change this year in the Chinese yuan versus the US dollar, it's down almost 4%. My point is this is a major shift in a global macroeconomic sense. It's way positive for the US. Favorable, bullish, up and coming economies on the south border, like Canada and the northern, that's a whole continent that's unstoppable. And all of it's part of China pushing back on cryptos, but China reaching that extreme of communism and socialism that's always failed. And that to me is just getting started.

I didn't know if any of you guys wanted to jump in on that. I just find it very curious that it can get so bad that Austerity becomes effectively a reasonable platform to run on and shows you just how bad it can be. Mike, I want to ask you about oil. It's fallen off a cliff. Yeah, well, it's- Yeah, because we were's what you were. Yeah, because we were talking about it at 96. You said this thing is going to go way down. And everyone kind of said you were nuts.

I saw it. But that's what you have to have. Sometimes, you know, when everybody agrees with you're going to be wrong. And that's what I'm worried about. Bitcoin is so many people are so bullish. I have to point out I'm a bit of a sissy. I just think, OK, well, great. Then I'll make money with everybody else.

But that's one thing I did enjoy about oil and still point out the facts of crude oil is that price you see right now, about $70 a barrel is very much, I think, on its way towards 40. And 40 is very much not profound. It's bottom there, 2008, 2016, 2018, and actually lower, negative. And it's been in a bear market since 2008, despite the stock bull market since 2011. I see it as this is what's happening on a global scale is we are in the back end of the big pump in prices, which crushes, which the rules of supply and demand elasticity

crushes down demand, increases supply. We're just kicking in that there in that it's just a matter of time. It has to get cheap. It always does. Cheap to me is around 40, particularly if we get a little downward trajectory in the stock market. That's all that's holding up right now. You saw it Friday. Stock market went up and crude oil bounced, but now it's going back to its trend lower. And the key thing people forget about crude oil is this is not our father's crude oil market. We use less of it every day in this country. We can create more of it. We use substitutes, ethanol. The rest of the world's got a problem. But I read a great article in New York Times this weekend about all the rickshaws

and all those exhaust spewing vehicles that people ride around in India and a lot of less developed countries are all going electric. And you see that in New York. I saw it five years ago when all these delivery guys went electric. It's cheaper, it's faster, it's more cost effective. It's just both sides of Crude Oil are negative. And now here, I'd like to end with this. Do you really think OPEC can cut supply

to their main sources of demand, the main customers, China and Europe, if there was a lot of demand? So here's what's happening. Here's the facts. U.S. liquid fuel and Canada liquid fuel supply over demand is in excess of 6 million barrels a day. That was a deficit of 10 million barrels in 2008. And if you add OPEC spare capacity, which is picking up every day because they're cutting supply,

that's almost 12% of total production. It's a classic bear market. And I'm like, good luck. And it's only people who are bullish crude oil, those had invested interest. This is why I'm kind of always careful about people who hold positions and make money and talk about their positions. That's just kind of one of my worried signs. So that's why I don't see what stops it. And so the key thing also misses other commodities. Copper had a good peak. Corn had a good peak. The only one I see commodities doing well are the orange juice. It doesn't matter. It's gold. But Scott, you nailed gold. We had a

bit of a blow off top there. It's coming back around $13,000. It's out $160 from that high last Sunday. That's a big move in gold, right? Yeah, it is. But it's doing what it has been for three years, just driving all the bulls crazy. And at some point, it's going to go. But that's the thing. Fundamentally, gold has a good reason not to go up. Because the stock market, US stock market only goes up and rates are high. That's going to change at some point it will. And I thought Friday would give us a signal on that. And Friday just says, no, it's going to keep being the US stock market going up and rates are going to stay high. There's that chart for anyone who's watching. Obviously,

it swept the high from the all-time high of August of 20. And then we had the more recent all-time high in May. And then, I mean, it just absolutely swept both. Huge wick up, very ugly candle, like a major reversal. I mean, that was the best part of that, obviously, was that Peter Schiff tweeted right here. Literally, like, he tweeted, it was like, 2140, 3000 tomorrow, bitcoins dead gold.

And like an hour later, it was back below the all time highs, which I think, you know, if we're going to get satisfaction out of anything as big pointers, we have to have our moments to dunk on Peter. That was the victory lap spiking the football at the one yard line. Yep. Yeah.

It's, it's funny, which is why, you know, it's, you have to be long term or at least intermediate term on most of the things that you're talking about. I mean, look, when you're in technical markets and when speculators are controlling the price action, it goes both ways. I mean, I just want to push back on one thing Mike said.

If this is a if everyone in bullish, if everyone you talk to in Bitcoin is bullish, that may be one of the most surprising things I've heard. I mean, people are happy that it's gone up, but this may be the most hated rally that we've seen in Bitcoin period. You know, it is nothing like the last two bull runs, nothing in terms of speculators.

Even someone made a commentary. So I'm in Miami. We all know this last week was our Basel week. We spent the weekend. We went to a few events. We did whatever. Everyone you talk to is like, yeah, you know, the crypto guys are just so much more restrained this year.

Yeah. So much less euphoria. So much less partying. We were at- I was there at Basel two years ago. And if you guys recall, I've told the story a million times, that was the deadest, deadest top of the market. It was like December of 2021.

The crypto guys were out. The entire Art Basel was aboard apes and NFTs. Literally the entire thing. Like people renting out 50,000 square foot warehouses with projected NFTs. Yeah. And that was when Bitcoin dropped from 52 to 42 during a party Saturday night at Art Basel that year. Right. So we were there this year and there was none of that. We're at the same freaking price as post Art Basel as it was then. Only the network is double the size. All of the news stories line up, and yet people are still like, eh, I don't know about this. And it really is much more dead.

I actually think, funny enough, as I've been watching the CoinRoute screens, right now is the first time I've seen this in a long time. The perpetual swaps trading at a $40 premium to the spot levels. $30 to $40, both on the dollar inverse perpetuals and the tether based Bitcoin swaps. You're actually seeing, this is literally the first time. This is basically, is this bouncing, whatever it's the first time we're seeing any premium since the the rally up past 40 all the way to 44 right so but all last week we didn't see that at 44,043 something we didn't see it so it is interesting speculators are buying and it looks like spot is is yet to catch up right now people are still shell-shocked. You know, you wait a day or two, but it's not big.

I mean, it's a small number. The funding rates haven't caught up to it yet, but it is interesting that this is the first time we've actually seen it. It's a great point, by the way, that effectively 44,000 is where we were two years ago at that event and now and the difference. But as we leave, I'll tell you the exact reason.

And that's because their altcoins are down 90%. And all of those guys were, you know, from what I saw, the NFT guys, Ethereum guys, the Solana guys, everybody. It was all the people with the small projects who had printed billions of their own tokens. Not to say that they did it intentionally, but they're all still way down.

That's just the fact, and I think that that's the reason because the waste was washed out of the market and still is largely gone. All right, guys, that's 1001. That's all we got. Everybody, please follow Mike James, Dave Weisberger down in the comments. Please follow them on X because

that's where we get all the alpha. Guys, I appreciate it. I'm sorry that I had to even grace you with Elizabeth's presence there for 12 seconds. I know it can ruin your entire week, but it is what it is. We got to, we got to share it with everybody. It's all we got guys.

I'll see you on Twitter spaces and back here again. I've got Mark Yusko tomorrow at nine. So that should be fun. See you guys then. Thank you everyone. Bye guys. See you. Bye. Let, guys. See you. Bye-bye.