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Speaker 1: All right, Joe Joe Klas Sorry, welcome to the show.

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Speaker 1: I'm excited to sit down with you. We've gone back

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Speaker 1: and forth on Twitter bunch, We've been in several Twitter spaces.

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Speaker 1: I've always enjoyed our conversations back and forth. I'm excited

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Speaker 1: to sit down and do a long form with you.

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Speaker 1: So thanks for joining me.

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Speaker 2: Yeah, likewise, Mark, thank you. This is going to be great.

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Speaker 1: Yeah, I know we can explore maybe some of our

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Speaker 1: differences in opinion. We'll see what those are like. As

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Speaker 1: we were kind of talking about a minute ago, I've

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Speaker 1: been off of Twitter for about five months.

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Speaker 3: My account got hacked. I think I'm a week away

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Speaker 3: from getting it back. We'll see.

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Speaker 1: So, you know, I'm not sure where if we agree

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Speaker 1: or disagree, we'll talk about that. But real quick, you know,

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Speaker 1: just to kind of set this up, you kind of

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Speaker 1: come about it from a little bit of a different angle.

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Speaker 1: We all do different angles, which is what makes it good. Right,

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Speaker 1: we're all individuals, but.

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Speaker 3: You sort of have like this.

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Speaker 1: You're an attorney, You're you're a litigator. In my experience,

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Speaker 1: I've worked with lots of attorneys. I always hired lots

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Speaker 1: of attorneys, and they can think of every single problem

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Speaker 1: that should ever could ever go wrong for me. But

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Speaker 1: that's why I hire them, right, I'm the eternal optimist.

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Speaker 1: I need my attorney to like protect me from all

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Speaker 1: the damn. So I'm guessing just attorneys. Well, from my experience,

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Speaker 1: attorneys just think things a little bit differently. Again, I'm

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Speaker 1: the optimist and you're probably more of the pessimists. But

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Speaker 1: you're a commercial litigator and you work in the bitcoin

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Speaker 1: crypto space. Give us a little bit of a background

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Speaker 1: on that, just to set this up.

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Speaker 2: Yeah, and you framed it very well. I do think

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Speaker 2: a lot of attorneys are kind of natural sort of

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Speaker 2: let's see the worst case scenario. I like to think

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Speaker 2: of myself as like, let's see every scenario, right. I

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Speaker 2: like to play out every type of possible thing, from

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Speaker 2: the insanely bullish optimistic to the most unlikely sort of

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Speaker 2: tail event pessimists. So I hear it all and I

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Speaker 2: try to think through it all. Just give you my background.

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Speaker 2: I am the co chair of the Fintech, blockchain and

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Speaker 2: Cryptocurrency Practice Group at Aminson Davis, Chicago based firm. Well

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Speaker 2: over half of my practice currently is something related to

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Speaker 2: bitcoin cryptocurrency miners. I represent a ton of different folks,

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Speaker 2: both on the commercial litigation front in the bitcoin space,

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Speaker 2: but also in the regulatory front, you know, advising startups

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Speaker 2: and entities as they bring tokens to market, advising bitcoin

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Speaker 2: companies and how they navigate the space, which is always changing,

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Speaker 2: as you know, from a regulatory standpoint. And then I

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Speaker 2: do have a good amount of my practice which is

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Speaker 2: just general commercial litigation, preach of contract, breach of fiduciary duty,

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Speaker 2: litigation that really is more sort of neutral from the

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Speaker 2: bitcoin crypto space. So I think I bring an interesting

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Speaker 2: perspective on this. And I have been just an armchair

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Speaker 2: retail investor since you know, I was in grade school

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Speaker 2: basically trading on a custodial account with my father. So

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Speaker 2: I've always been a student of the markets and love

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Speaker 2: bringing the macro into discussion. I think in many ways

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Speaker 2: it makes me a better lawyer, because I think I

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Speaker 2: understand some of the business aspects and some of what's

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Speaker 2: going on in capital markets better than a lot of

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Speaker 2: my other contemporaries.

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Speaker 1: Great, that's a great way to frame it up. I

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Speaker 1: want to get into some of the legal stuff. Let's

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Speaker 1: start on some of the financial macro stuff in the beginning,

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Speaker 1: and let's sort of let's go back and just look

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Speaker 1: at twenty twenty three for a minute, and then we'll

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Speaker 1: talk about where we think twenty twenty four is. As

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Speaker 1: I said, you know, you and I, I know we did

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Speaker 1: a couple of Twitter spaces and things like that. You know,

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Speaker 1: I know you're good friends with our mutual friend or

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Speaker 1: you're working with Nick Batya. I've done a bunch of

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Speaker 1: stuff with Nick Bodia over the Bitcoin layer as well.

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Speaker 1: And I remember doing some shows with him sort of

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Speaker 1: back like November a year ago of twenty twenty two,

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Speaker 1: and talking about did the FED? Is the FED gonna

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Speaker 1: be able to pull off this? This soft landing? And

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Speaker 1: so that was sort of my narrative. I just did

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Speaker 1: this live presentation and I showed twelve videos over the

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Speaker 1: last twelve months where I kept saying, Hey, the soft landing, Hey,

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Speaker 1: they'd be able to.

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Speaker 3: Pull it off.

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Speaker 1: You know, January of twenty twenty three, they changed the

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Speaker 1: CPI calculation. I thought that would give them the cover

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Speaker 1: they need. Then, you know, the BTFP was basically silent easying.

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Speaker 1: And so those are kind of some of the things

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Speaker 1: I was looking at from some of our earlier conversations

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Speaker 1: before I was kicked off Twitter, it seemed like you

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Speaker 1: were kind of more of looking at the year bearishly,

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Speaker 1: and there's no shortage of bad indicators to look at. So,

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Speaker 1: first of all, do you were you a little bit

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Speaker 1: surprised in how twenty twenty three ended up?

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Speaker 2: Yeah? Absolutely, I'll just tell you. I think, you know,

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Speaker 2: it's really important to be honest and sort of reflect

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Speaker 2: what you get right and what you get wrong. And

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Speaker 2: I think what many folks, not just myself, but many

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Speaker 2: others were sort of focused on, and it was a

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Speaker 2: flaw right. It's like the old adage you never want

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Speaker 2: to be the general that fights the last war. And

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Speaker 2: I think what most people were focused on was the

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Speaker 2: fact that in prior hiking cycles for the Federal Reserve,

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Speaker 2: what you tended to see is you saw this very

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Speaker 2: pronounced reaction function where they would hike rates and then

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Speaker 2: corporate net interest costs would instantly almost react to that,

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Speaker 2: and that would cut into the bottom line of companies,

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Speaker 2: which would trigger a basically a recessionary dynamic were unemployment rises.

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Speaker 2: And what we've actually seen is corporate America in large expects,

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Speaker 2: at least for now, has dodged really the damage that

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Speaker 2: would be inflicted by higher rates. Why is that? Two reasons.

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Speaker 2: In my first off, I think a lot of companies

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Speaker 2: were really hogs at the trough, feeding on low interest rates,

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Speaker 2: and they borrowed at those very low interest rates, moved

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Speaker 2: out those maturity dates for you know, in some cases

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Speaker 2: four or five six years, and they did this twenty

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Speaker 2: twenty and twenty twenty one. So when the Fed began

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Speaker 2: to hike, I think, yes, you saw some sort of

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Speaker 2: chaos in the bond market for the on the run treasuries.

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Speaker 2: But what you didn't see is you didn't see companies

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Speaker 2: sort of start to panic because they're saying, look, from

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Speaker 2: a balance sheep perspective, I'm locked in at very low rates.

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Speaker 2: I'm protected in some cases until twenty twenty seven, twenty

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Speaker 2: twenty eight. Why would I panic? Why would I trigger that?

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Speaker 2: That couple with the fact that you still had significant

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Speaker 2: fiscal support is still to this day. I mean, we're

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Speaker 2: running basically wartime deficits at this point, and you had

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Speaker 2: consumers who built up a really big honeypot of additional savings,

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Speaker 2: accumulated savings which they've drawn down on to try to

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Speaker 2: combat higher prices. So all those dynamics together, I think

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Speaker 2: have lengthened out this cycle far beyond what most people

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Speaker 2: had anticipated.

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Speaker 3: Yeah.

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Speaker 1: You know, the one thing that I think with Mark Twain,

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Speaker 1: he said, it's not the things that you know for

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Speaker 1: certain to get to or you don't know, they get

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Speaker 1: you in trouble, to the things you know for certain.

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Speaker 1: And I remember like, as soon as the FED raises rates,

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Speaker 1: the risk free rate goes up, then docs have to

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Speaker 1: reprice lower.

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Speaker 3: They have to. They have to. They have to. Well,

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Speaker 3: they don't have to because they didn't.

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Speaker 1: And then it was like, well, when mortgages go from

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Speaker 1: three percent to eight percent, home prices have to come down.

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Speaker 3: They have to. They have to. They have to. Uh, no,

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Speaker 3: they don't because they didn't.

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Speaker 1: Now a lot of that, to your point is because

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Speaker 1: you know a lot of that, we have this lag. Right,

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Speaker 1: So when they raise rates, we have this lag. Maybe

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Speaker 1: because they've won, to your point, they locked it in low.

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Speaker 1: But two, because they also raised it really fast, maybe

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Speaker 1: that changes the lag a little bit as well. But uh,

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Speaker 1: something that I'm thinking of is to two things. So

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Speaker 1: I'm just curious to get your take on these things.

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Speaker 1: So one you mentioned you mentioned sort of like the

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Speaker 1: companies didn't react, and part of that, to your point,

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Speaker 1: is because they had this long locked in debt, right,

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Speaker 1: something that I've been thinking about as well. I just

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Speaker 1: keep going back to Ludwig von Misus's crack up boom.

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Speaker 1: And then suddenly the people realize that inflation is both

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Speaker 1: permanent and intentional. And once that happens, people want to

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Speaker 1: get rid of the currency and they just want to

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Speaker 1: buy assets.

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Speaker 2: Right.

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Speaker 3: That's basically paraphrasing what he says. And so it.

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Speaker 1: Almost seems like globally we're seeing sort of this switch

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Speaker 1: to assets. Nation States, China bought half the lithium mines

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Speaker 1: in the world, right, OPEC would rather keep oil in

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Speaker 1: the ground, so to speak, Central banks about you know,

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Speaker 1: thousand tons of gold again, right, And maybe some of

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Speaker 1: it is just like the world is starting to wake.

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Speaker 2: Up to it.

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Speaker 1: Maybe this is optimistic, optimistic to like, hey, these are

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Speaker 1: the games the FED plays, and we're not gonna we

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Speaker 1: don't want to go back into this via game.

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Speaker 3: We'll just stick with assets. Do you think maybe the

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Speaker 3: world is starting to see that a little bit?

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Speaker 2: I think that it's been in a trend that has

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Speaker 2: basically persisted for the last thirty years. I think that

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Speaker 2: the only real disruption of that comes in moments where

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Speaker 2: you have a huge sort of spike in unemployment because

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Speaker 2: of passive indexation, primarily right as particularly with the American

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Speaker 2: stock market. The American stock market has driven you know,

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Speaker 2: overwhelmed by the passive indexer, the person who reflexively bids

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Speaker 2: stocks with every single paycheck into vehicles. They don't even

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Speaker 2: think about it. They're just buying. I mean, they're not

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Speaker 2: analyzing it in terms of pe multiples or so forth.

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Speaker 2: They're just taking whatever their savings and putting it into accounts.

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Speaker 2: And I think what you've also seen is that that

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Speaker 2: has been sort of contributing to this sort of disparity

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Speaker 2: between the haves and the have nots, where those who

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Speaker 2: have disposed well income are buying assets. They're using it

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Speaker 2: to buy assets, and they trust assets probably more than

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Speaker 2: the actual currency, mostly because they can always get liquidity

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Speaker 2: in the form of credit creation whenever it's needed. Right

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Speaker 2: And you kind of know this. There's this statistic that

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Speaker 2: people talk about how you know, most Americans would have

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Speaker 2: to go into debt if they had to make up

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Speaker 2: for you know, unexpected five hundred dollars, you know, expenditure.

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Speaker 2: The reason I think that is is because a lot

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Speaker 2: of Americans just put their excess savings into some sort

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Speaker 2: of you know, vehicles, some sort of asset, even the

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Speaker 2: conservatives things bonds or stocks or real estate, whatever it is.

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Speaker 2: If they need short term liquidity because credit is so ample,

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Speaker 2: just tap it that way. So to your point, like, yes,

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Speaker 2: there is a mad rush to ditch your dollars and

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Speaker 2: put them in some type of asset that can have

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Speaker 2: a better store of value. In the store of value

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Speaker 2: of our time at this point, overwhelmingly is the US

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Speaker 2: stock market, mostly the S and P five hundred, that

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Speaker 2: is the premier choice. So I think, like, I don't

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Speaker 2: think this is a new development. I think to your point,

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Speaker 2: it is a trend, and it is trending towards more

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Speaker 2: and more of the you know, let's save and store

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Speaker 2: in some vehicle other than the currency.

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Speaker 3: Something else.

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Speaker 1: That was sort of driving my narrative throughout the year

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Speaker 1: and actually still is. And I've done some videos about this.

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Speaker 1: I went on Swan signal, broke it down, and I've

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Speaker 1: done videos. But basically, how the FED and all the

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Speaker 1: central banks really have changed how they interact in the

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Speaker 1: market really since two thousand and eight.

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Speaker 3: So I'd love to get your idea on this or

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Speaker 3: your opinion on this. But you know, in two thousand

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Speaker 3: and eight sort of the first time we saw QE,

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Speaker 3: at least from the Fed.

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Speaker 1: Right, maybe it's been applied to different forms or other places,

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Speaker 1: but really the Fed sort of jumped in and intervene

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Speaker 1: in the market, right. You know, in two thousand and

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Speaker 1: six we saw twenty six percent plunge in home starts,

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Speaker 1: but yet it wasn't until two thousand and eight that

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Speaker 1: they started to even think about doing in the real

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Speaker 1: estate market. We had Bear Stearns go down bankrupt, which

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Speaker 1: sort of triggered deck collapse.

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Speaker 3: It took seven months to get a bailout. Seven months.

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Speaker 1: Right in twenty twenty three we saw six days they

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Speaker 1: got a bailout. A couple other parallels I'll just throw

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Speaker 1: out real quick would be, you know, obviously the Tart

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Speaker 1: Package seven hundred billion, you know, about about one trillion overall.

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Speaker 1: You know, twenty twenty we had ten trillion. We saw

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Speaker 1: the stock market in twenty two thousand and drop sixty

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Speaker 1: percent this time thirty percent, six year recovery, three month recovery,

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Speaker 1: you know kind of thing like that. And now even

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Speaker 1: more of what we've seen is, you know, in twenty twenty,

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Speaker 1: we saw i think thirteen special funding facilities get set up.

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Speaker 3: Three four letter.

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Speaker 1: Agencies, they were buying equities in the market. I mean,

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Speaker 1: they're just throwing everything at the kitchen sink. And now

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Speaker 1: you know, again back to the PTFB, this funding facility

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Speaker 1: for banking.

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Speaker 3: Six days they got that set up. They have swap

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Speaker 3: line set up, not.

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Speaker 1: Just with friendly nations, but even non friendly nations, non allies,

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Speaker 1: we have the swap line setup which is sort of

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Speaker 1: like giving them these credit cards. And so it just

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Speaker 1: looks like the way the FED interacts in the markets

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Speaker 1: is a lot more. It's not reactionary like it was

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Speaker 1: in two thousand and eight. They're like, preemptively, here's your

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Speaker 1: credit line. If you get into trouble, go ahead and

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Speaker 1: use it. You don't need to like call me and

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Speaker 1: get an Act of Congress to go through. And I

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Speaker 1: think a lot of that is changing it. So like

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Speaker 1: today for the last several months, with a lot of

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Speaker 1: people are saying, oh, but Mark, don't you know the

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Speaker 1: commercial real estate mortgage two point nine trillion, it's going

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Speaker 1: to crash and take down the comer you know, the

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Speaker 1: mid sized banks with it. Sure, the FED could just

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Speaker 1: take it all in their books, like you know what

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Speaker 1: I mean. And so it's like, uh, do you think

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Speaker 1: I guess one?

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Speaker 3: Do you think that that that's correct?

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Speaker 1: Do you think the FED and the central banks are

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Speaker 1: interacting different than they were today preemptively as opposed to

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Speaker 1: reactionary and do you think that changes sort of the

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Speaker 1: direction moving forward from here?

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Speaker 2: Yeah? I think they definitely are increasingly and becoming more rapid,

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Speaker 2: which I think is your point now to me, Okay,

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Speaker 2: I think the FED primary tool and this isn't just

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Speaker 2: my opinion. This is if you go interview some of

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Speaker 2: the former FED chairs Bernanki and others, they'll tell you

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Speaker 2: that the primary tool of the FED is to talk. Right.

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Speaker 2: They want to smooth expectations, they want people to be comfortable.

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Speaker 1: And that's what we saw in November, right, they brought them.

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Speaker 1: They ease the markets without doing anything, just the job

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Speaker 1: owe exactly.

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Speaker 2: And you can go back and look at some of

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Speaker 2: these policies, whether it be the BTFP that you alluded

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Speaker 2: to in March or even look at which I think

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Speaker 2: is a better scenario when the FED announced. Almost to

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Speaker 2: the day when the FED announced that they were going

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Speaker 2: to buy corporate bonds like hig yield bond ETFs, you know,

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Speaker 2: the HyG and others. That's the day of the market

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Speaker 2: bottom in March of twenty twenty. And what I read

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Speaker 2: from that inconsistently is that like the FEDS, Fed's communication function,

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Speaker 2: their ability to set expectations is basically a form of

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Speaker 2: psychological mind population for market participants. If you can convince

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Speaker 2: the market participants we've got your back, you know, the

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Speaker 2: FEDS that are back and they're going to make sure

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Speaker 2: that you don't have a cascade of bank failures or

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Speaker 2: that we don't have a cascade of high yield debt

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Speaker 2: that defaults, then the market will move on that expectation

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Speaker 2: and will provide liquidity in itself. You've got to remember,

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Speaker 2: when everybody's scared and nervous, the one thing they want

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Speaker 2: is they want someone to you know, pat them on

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Speaker 2: the shoulder and say it's going to be all right.

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Speaker 2: And that's the primary I view that as the primary

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Speaker 2: role of the FED. The FED right or wrong. Okay,

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Speaker 2: you can dispute whether it's a good system or not.

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Speaker 2: I don't really care My point is that when they

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Speaker 2: come forward with these programs, they always have to announce

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Speaker 2: some other new program or new venture, and it's all designed,

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Speaker 2: I think, primarily just to calm things down. You know,

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Speaker 2: you had, you had significant movements in capital markets before

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Speaker 2: the FED actually was buying junk debt. Okay, that tells

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Speaker 2: me really that it's all about pacifying a very nervous

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Speaker 2: market and if they can pacify it, mission accomplished.

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Speaker 3: Yeah, I agree. How I say this all the time.

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Speaker 3: I love that you said that as well.

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Speaker 1: But you know, I think a lot of the we'll

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Speaker 1: call them intellectuals in the macro space, they're factually correct,

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Speaker 1: but intellectually dishonest. And what I mean by that is

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Speaker 1: we'll say, but the FED didn't do anything, and I say,

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Speaker 1: but they said they were going to do something, and

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Speaker 1: to you, and just by.

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Speaker 3: Saying it, so technically you're correct.

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Speaker 1: They didn't do anything, but they said they were going

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Speaker 1: to do something, and that did something right, And so I.

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Speaker 3: Agree with you.

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Speaker 2: The thing is this, and this is a quote I

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Speaker 2: always like to like to remind myself of In many ways,

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Speaker 2: when you have those discussions with those sort of macro folks,

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Speaker 2: you're talking about It's not about reality. It's about the

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Speaker 2: perception of reality, and the perception influences people's actions. So

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Speaker 2: people perceive that they've got their backs that can reinflate markets,

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Speaker 2: that can reinflate you know, the bubble, and that's really

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Speaker 2: what's required. Now, what I will say is there are

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Speaker 2: times where despite the message they're broadcasting, you know, they

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Speaker 2: can go out there and they can say, as they

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Speaker 2: did and two thousand and eight, that the banking system

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Speaker 2: is strong. It doesn't make it so right. But got

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Speaker 2: to remember Mark, as you know, when Bear Stearns went

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Speaker 2: down in the spring of two thousand and eight, the

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Speaker 2: market originally rallied off that Okay, it bottomed, and then

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Speaker 2: it rallied because people said, okay, they're saying it's fine.

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Speaker 2: They said, you know, subprime is contained. Remember these things.

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Speaker 2: They would go out there and try to, you know,

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Speaker 2: manipulate the marketplace. It wasn't. It clearly wasn't, and you

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Speaker 2: finally had the shoe drop, which sent people into a panic.

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Speaker 2: But my point is that like just because they're saying

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Speaker 2: it doesn't mean it's true. However, the market can react

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Speaker 2: base on what they're saying. So it's a very complex

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Speaker 2: dynamic there.

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Speaker 1: Yeah, one hundred percent, I agree with all that. But

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Speaker 1: going back to the Bear Stearns, as I already laid out,

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Speaker 1: it took them seven months to get a bail out.

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Speaker 1: Today this now it's six days. And so to your point,

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Speaker 1: they tried to job own the market, but then the

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Speaker 1: market realized, hey, we still don't have liquidity, the whole

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Speaker 1: system is still seazing up, we still have bigger problems,

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Speaker 1: Whereas this time it was like, here's the liquidity, everyone's whole,

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Speaker 1: no one's losing money, everyone's good, right, And so I

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Speaker 1: think it was the job oning, But they also did something.

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Speaker 1: And I'm just curious your take on this, because you

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Speaker 1: know Harry Dent Junior. I've read five of his books.

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Speaker 1: His research is amazing. I've had him on my show,

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Speaker 1: he spoke at my conferences, and not to call him out,

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Speaker 1: but I pulled up a bunch of YouTube videos and

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Speaker 1: for twelve years, the market's going to crash ninety percent,

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Speaker 1: seven years, gonna crash ninety percent six years. In June

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Speaker 1: of this year, it's gonna crash by ninety percent this year.

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Speaker 1: And it's just like he'll be right eventually. Right, But

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Speaker 1: I think a lot of it is failing.

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Speaker 3: My opinion.

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Speaker 1: Again, I've read his books because I think his research

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Speaker 1: is correct. I think the assumptions are wrong and failing

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Speaker 1: to think about how many more magic tricks the FED

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Speaker 1: can just pull out their out of their sleeve, Like, oh,

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Speaker 1: the bank's going to collapse, Well, let's just throw BTFP out.

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Speaker 3: There and eventually we know this collapses.

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Speaker 1: Right, But I think about these constraints that we have, right,

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Speaker 1: and you're well aware that we could dig into. But

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Speaker 1: you know, you mentioned the fiscal spending, Like the government

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Speaker 1: has to keep spending that's there, right, they have to

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Speaker 1: can do to have buyers for the debt. There's not

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Speaker 1: enough appetite internationally for the debt they're producing.

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Speaker 3: The Fed's going to have to buy.

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Speaker 1: The rates are gonna have to come down, the interest

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Speaker 1: is going to overtake, you know, the expenses or the income,

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Speaker 1: et cetera. So these sort of constraints that we have,

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Speaker 1: and it just seems like the Fed's gonna have to

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Speaker 1: just keep.

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Speaker 3: Pulling magic tricks out of their hat.

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Speaker 1: And again, like I said, just hypothetically, you know, this

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Speaker 1: commercial real estate mortgage market two point nine trillion could

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Speaker 1: crash the whole market.

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Speaker 3: Or the FED could just put it on their books.

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Speaker 1: Like what would stop them from doing that? Or do

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Speaker 1: you think that's the or do you think that's the

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Speaker 1: likely scenario?

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Speaker 2: I think again, these are all ones of degree, right, Like, so,

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Speaker 2: can you have some defaults and problems in commercial real estate? Yes?

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Speaker 2: And I think what the FED would look at is

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Speaker 2: they look at is the default rate? Is it something

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Speaker 2: that is undermining or causing a systemic risk? Okay, And

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Speaker 2: that's always a fine line. You don't know, you know

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Speaker 2: where they're going to draw that line. I mean that's

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Speaker 2: the quote unquote FED put right, which I think still exists.

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Speaker 2: The question of where the strike is and what I

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Speaker 2: would look at it like, is like, Okay, to the

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Speaker 2: first point of your question, how much debt it becomes

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Speaker 2: an untenable amount of debt? And nobody knows the answer

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Speaker 2: that question is that two hundred percent of GDP? Is

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Speaker 2: it two hundred and fifty? Is it three hundred percent

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Speaker 2: of GDP?

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Speaker 1: Well, I think it's diminishing returns, right, It's It's not

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Speaker 1: like at this point it just falls off a cliff.

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Speaker 3: It just gets worse, worse, worst, worse, worse.

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Speaker 2: Right, But now you know, look at look at what

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Speaker 2: has triggered. But by by just going out there and

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Speaker 2: you mentioned it earlier when we were talking about the

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Speaker 2: FED pivot, right, just going out there in the Fed

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Speaker 2: making some statements about how they think they're ending or

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Speaker 2: near the end of their rate hiking cycle, you saw

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Speaker 2: the tenure yield drop like a stone, right, showing a

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Speaker 2: massive bid for treasures, particularly at the long end. Right now,

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Speaker 2: you can bid the government can borrow at rates, you know,

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Speaker 2: in in compared to where they were just just a

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Speaker 2: few months ago, much lower, right, So why is that bid?

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Speaker 2: Why is that bid there? Why is there a global

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Speaker 2: bid for treasuries right now? And you can talk about

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Speaker 2: maybe it's a recession fronting recession. People are trying to

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Speaker 2: put on the safety trade of buying buying bonds. Maybe

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Speaker 2: it's just that they think that, you know, rates are

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Speaker 2: going to be much lower in the future. The Fed

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Speaker 2: is going to you know, have to bring interest rates down,

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Speaker 2: so there's going to be buyers coming in. But I

435
00:19:14,920 --> 00:19:18,840
Speaker 2: really question this notion that there's not sufficient structural demand

436
00:19:18,920 --> 00:19:22,680
Speaker 2: for treasuries, given the fact that you have rates where

437
00:19:22,720 --> 00:19:25,360
Speaker 2: they're at, inflation where it's at, and if you take

438
00:19:25,400 --> 00:19:28,960
Speaker 2: those two numbers. You know, ten yere yields should relatively

439
00:19:29,000 --> 00:19:32,240
Speaker 2: track nominal GDP. They're actually, by some measures under that

440
00:19:32,320 --> 00:19:35,320
Speaker 2: right now. So I really struggle with this notion that

441
00:19:35,359 --> 00:19:39,119
Speaker 2: there's not sufficient demand for treasuries. I think that if anything,

442
00:19:39,119 --> 00:19:42,960
Speaker 2: the last few months shows you there's a considerable demand

443
00:19:43,160 --> 00:19:45,840
Speaker 2: for treasuries, and the big the big whales that would

444
00:19:45,840 --> 00:19:49,800
Speaker 2: provide even more liquidity. The insurance companies, the pension funds,

445
00:19:49,880 --> 00:19:51,719
Speaker 2: they're not even buying right now. And you've got ten

446
00:19:51,800 --> 00:19:55,040
Speaker 2: year yields that have fallen you know what, seventy BIPs

447
00:19:54,680 --> 00:19:55,800
Speaker 2: in recent weeks.

448
00:19:56,640 --> 00:19:59,200
Speaker 3: Okay, so let's let's talk about that. That's a good point.

449
00:19:59,240 --> 00:20:01,800
Speaker 1: So I kind of made the case I threw out

450
00:20:01,800 --> 00:20:03,800
Speaker 1: there that there wasn't enough demand, and you're saying that

451
00:20:03,840 --> 00:20:06,000
Speaker 1: there is enough demand, and I think there's nuance to that,

452
00:20:06,000 --> 00:20:06,919
Speaker 1: and I think we're both correct.

453
00:20:07,000 --> 00:20:08,560
Speaker 3: Right. It sounds like if we.

454
00:20:08,560 --> 00:20:11,040
Speaker 1: Look at that was that failed auction in August, the

455
00:20:11,119 --> 00:20:13,280
Speaker 1: thirty year, right, and it wasn't failed obviously, but it

456
00:20:13,320 --> 00:20:15,800
Speaker 1: had a long tail on it. And if you look

457
00:20:15,800 --> 00:20:18,680
Speaker 1: at the difference in the auction from January to the

458
00:20:18,720 --> 00:20:21,600
Speaker 1: auction in August, this is a thirty year, and it's different.

459
00:20:21,640 --> 00:20:23,840
Speaker 1: It's a longer length of time, and the raids different,

460
00:20:23,880 --> 00:20:26,080
Speaker 1: and the market was different back then as well. But

461
00:20:26,160 --> 00:20:28,679
Speaker 1: what we saw is actually the international well there's you know,

462
00:20:28,720 --> 00:20:33,560
Speaker 1: three categories of bond buyers. The demand actually was the same,

463
00:20:33,600 --> 00:20:36,119
Speaker 1: the appetite. They bought as many bonds. The problem was

464
00:20:36,119 --> 00:20:39,320
Speaker 1: the Treasury issued way more, and so there wasn't enough

465
00:20:39,359 --> 00:20:43,280
Speaker 1: at that point. Now to your point, so is there

466
00:20:43,440 --> 00:20:46,840
Speaker 1: enough demand for the supply of the treasury is giving? Well,

467
00:20:46,840 --> 00:20:48,399
Speaker 1: what about if the Fed still tries to roll it

468
00:20:48,440 --> 00:20:50,040
Speaker 1: off their books? What if the Treasury tries.

469
00:20:49,880 --> 00:20:51,880
Speaker 3: To double right, So at some point, at some point

470
00:20:51,880 --> 00:20:53,200
Speaker 3: there would be a mismatch.

471
00:20:53,080 --> 00:20:55,960
Speaker 2: The treasury doesn't. Really this is a big misnomer. So

472
00:20:57,280 --> 00:21:00,840
Speaker 2: QT is not the opposite of QI. They're going and

473
00:21:00,840 --> 00:21:03,520
Speaker 2: they're taking a treasury on the bank's balance sheets and

474
00:21:03,520 --> 00:21:06,040
Speaker 2: they're swapping it for bank reserves, a less liquid or

475
00:21:06,520 --> 00:21:09,919
Speaker 2: liquid but a less versatile form of collateral. Okay, QT

476
00:21:10,240 --> 00:21:13,240
Speaker 2: is not that. QT is effectively, we have a bond,

477
00:21:13,720 --> 00:21:16,880
Speaker 2: whatever maturity it is, we will let it naturally expire

478
00:21:16,960 --> 00:21:20,000
Speaker 2: and not replace it. That's a different dynamic, right, mark,

479
00:21:20,040 --> 00:21:22,480
Speaker 2: Because what you just said, let's you know, are we

480
00:21:22,600 --> 00:21:25,680
Speaker 2: selling this into the marketplace. Are we reintroducing that long

481
00:21:25,800 --> 00:21:28,840
Speaker 2: duration instrument and actually putting it there so someone in

482
00:21:28,880 --> 00:21:30,879
Speaker 2: the private market can bid it. And that's not what

483
00:21:30,960 --> 00:21:34,720
Speaker 2: QT does. QT says, Okay, you had a seven year

484
00:21:34,720 --> 00:21:37,440
Speaker 2: piece of paper, We're going to let it naturally mature

485
00:21:37,840 --> 00:21:40,080
Speaker 2: and then we're not going to reintroduce it in the marketplace.

486
00:21:40,080 --> 00:21:41,359
Speaker 2: What does the Fed have to do at that point?

487
00:21:41,760 --> 00:21:43,480
Speaker 2: Excuse me, the Treasury? What does the Treasury you have

488
00:21:43,520 --> 00:21:44,960
Speaker 2: to do? The Treasury has to go then, and they

489
00:21:44,960 --> 00:21:48,119
Speaker 2: have to borrow from the marketplace. And what we've learned

490
00:21:48,200 --> 00:21:50,679
Speaker 2: in recent months, and what I think most people naturally know,

491
00:21:50,800 --> 00:21:54,000
Speaker 2: is that how they borrow, the duration they issue is

492
00:21:54,119 --> 00:21:58,120
Speaker 2: really important because institutions can better and more easily absorb

493
00:21:58,240 --> 00:22:01,920
Speaker 2: short term paper than long term instruments. Okay, it is

494
00:22:02,200 --> 00:22:04,840
Speaker 2: very difficult from a liquidity perspective to buy a twenty

495
00:22:04,920 --> 00:22:07,600
Speaker 2: year or thirty year piece of paper versus a two

496
00:22:07,720 --> 00:22:10,240
Speaker 2: year or a six month And what I think that

497
00:22:10,280 --> 00:22:14,280
Speaker 2: to your point, I think, in fairness, what Secretary Yellen

498
00:22:14,280 --> 00:22:16,920
Speaker 2: has been doing at Treasury is she's been favoring more

499
00:22:17,000 --> 00:22:20,359
Speaker 2: short term paper, which is far easier for the market

500
00:22:20,480 --> 00:22:24,080
Speaker 2: to absorb, particularly when you can drain reverse repo and

501
00:22:24,119 --> 00:22:27,320
Speaker 2: have that big pot of money serve as a stimuluve effect.

502
00:22:27,440 --> 00:22:28,240
Speaker 2: Does that make sense?

503
00:22:28,800 --> 00:22:31,000
Speaker 3: Yeah, it makes sense. But let's just go back to that.

504
00:22:31,040 --> 00:22:34,399
Speaker 1: So the under QT, the FED has a bond mature

505
00:22:34,920 --> 00:22:39,359
Speaker 1: correct which rolls off their books, hm, right, which then

506
00:22:39,400 --> 00:22:40,920
Speaker 1: the Treasury has to go to the market to get

507
00:22:40,920 --> 00:22:42,400
Speaker 1: the money for correct.

508
00:22:42,600 --> 00:22:45,879
Speaker 2: Then, But it's a difference in the maturity, right, So

509
00:22:45,920 --> 00:22:48,119
Speaker 2: if they had a five year bond or a seven

510
00:22:48,160 --> 00:22:50,960
Speaker 2: year or ten year that is maturing, okay, And they

511
00:22:51,040 --> 00:22:53,080
Speaker 2: have all these maturing routinely, right, you know.

512
00:22:53,040 --> 00:22:55,000
Speaker 1: That they take a five year, thirty year and go

513
00:22:55,080 --> 00:22:56,359
Speaker 1: at one year and send it back out at one

514
00:22:56,400 --> 00:22:58,919
Speaker 1: year or three month bill or three month or whatever,

515
00:22:58,960 --> 00:23:02,479
Speaker 1: which two year point earlier, which is the corporations did

516
00:23:02,480 --> 00:23:04,400
Speaker 1: a pretty good job of locking in long term debt.

517
00:23:04,520 --> 00:23:06,520
Speaker 1: Homeowners did a pretty good job of locking in long

518
00:23:06,600 --> 00:23:09,240
Speaker 1: term debt. Yellen looks like the worst trader in history.

519
00:23:09,359 --> 00:23:11,320
Speaker 1: She put like, when rates were at the lowest point

520
00:23:11,359 --> 00:23:13,000
Speaker 1: in history, they could have locked it up for thirty years,

521
00:23:13,000 --> 00:23:14,360
Speaker 1: and here she put it all on the front end.

522
00:23:14,680 --> 00:23:17,199
Speaker 2: Yeah, but that but that's a little bit unfair because

523
00:23:18,040 --> 00:23:20,520
Speaker 2: you think about why She's not just stupid in doing that.

524
00:23:20,720 --> 00:23:23,480
Speaker 2: Why didn't she want to introduce long dated supply into

525
00:23:23,520 --> 00:23:25,800
Speaker 2: the marketplace? And if you go back at those periods

526
00:23:25,800 --> 00:23:28,880
Speaker 2: where rates were really low, she's trying to provide liquidity

527
00:23:28,880 --> 00:23:31,760
Speaker 2: to the marketplace, it would run counter to her efforts, right,

528
00:23:32,040 --> 00:23:34,359
Speaker 2: So take take for example, when the ten year is

529
00:23:34,440 --> 00:23:36,679
Speaker 2: at zero point three percent and there's fear in the

530
00:23:36,720 --> 00:23:39,960
Speaker 2: marketplace after COVID, do you really think it would be

531
00:23:40,000 --> 00:23:42,200
Speaker 2: wise for her to issue a ton of short term

532
00:23:42,240 --> 00:23:44,720
Speaker 2: paper at that point when the when there were many

533
00:23:44,720 --> 00:23:46,159
Speaker 2: people that thought, we're going to end up up in

534
00:23:46,160 --> 00:23:48,879
Speaker 2: a depression. Because if you're introducing that supply at that

535
00:23:48,920 --> 00:23:51,919
Speaker 2: point where the markets are already weak, Okay, what are

536
00:23:51,920 --> 00:23:53,800
Speaker 2: you going to do. You're going to give You're going

537
00:23:53,880 --> 00:23:56,399
Speaker 2: to put that yield up higher, Okay, you're going to

538
00:23:56,480 --> 00:23:58,000
Speaker 2: move it to close to one percent, And it's going

539
00:23:58,080 --> 00:24:00,160
Speaker 2: to run counter to your efforts at the same time

540
00:24:00,160 --> 00:24:02,800
Speaker 2: to do qi to do fiscal stimulus to try and

541
00:24:02,840 --> 00:24:05,960
Speaker 2: reinvigorate the economy. So I think that's a little just

542
00:24:05,960 --> 00:24:08,320
Speaker 2: from my perspective, respectfully, I think that's kind of a

543
00:24:08,359 --> 00:24:10,879
Speaker 2: little bit unfair because they're trying at that point to

544
00:24:10,920 --> 00:24:13,560
Speaker 2: stimulate when they would do the issuance there, it would

545
00:24:13,600 --> 00:24:16,160
Speaker 2: actually be run counter to their efforts to stimulate.

546
00:24:16,760 --> 00:24:19,520
Speaker 1: Yeah, yeah, I see that.

547
00:24:19,640 --> 00:24:20,080
Speaker 3: I see that.

548
00:24:20,880 --> 00:24:22,800
Speaker 1: So so forward back to the constraints that we have,

549
00:24:22,880 --> 00:24:25,760
Speaker 1: and so where we're going. You also mentioned, you know,

550
00:24:25,960 --> 00:24:29,040
Speaker 1: the appetite for these treasuries and how at the tenure

551
00:24:29,119 --> 00:24:30,280
Speaker 1: right now it seems very strong.

552
00:24:30,320 --> 00:24:31,040
Speaker 3: And so what does that mean?

553
00:24:31,080 --> 00:24:33,639
Speaker 1: Are people expecting a recession or lower rates in the future,

554
00:24:33,720 --> 00:24:34,320
Speaker 1: kind of a thing.

555
00:24:34,200 --> 00:24:38,320
Speaker 3: Like that I covered Reuters had picked up.

556
00:24:39,160 --> 00:24:43,520
Speaker 1: Yellen said that she projected the interest on the debt

557
00:24:43,720 --> 00:24:48,119
Speaker 1: would be one would average one percent of GDP for

558
00:24:48,200 --> 00:24:52,280
Speaker 1: the rest of the decade. Yeah, and so to do

559
00:24:52,359 --> 00:24:55,320
Speaker 1: the math on that, how do we get to interest

560
00:24:55,480 --> 00:24:58,399
Speaker 1: being one percent of GDP? Obviously there's a bunch of

561
00:24:58,480 --> 00:25:00,920
Speaker 1: levers in there to play with. I got this from

562
00:25:00,960 --> 00:25:04,080
Speaker 1: an article from RIA, I believe it was. But when

563
00:25:04,119 --> 00:25:06,639
Speaker 1: you look at the math, so it's basically the interest

564
00:25:06,680 --> 00:25:09,439
Speaker 1: rate has to get down to zero point eight. I

565
00:25:09,480 --> 00:25:12,160
Speaker 1: already have like this one percent of GDP average, right,

566
00:25:12,440 --> 00:25:14,800
Speaker 1: So that's what she's saying, and so then the market

567
00:25:14,800 --> 00:25:16,320
Speaker 1: probably goes, well, shoot, if we could lock it in

568
00:25:16,359 --> 00:25:19,040
Speaker 1: at three, two, three, four, five, percent. I mean, it's

569
00:25:19,040 --> 00:25:20,959
Speaker 1: better than the zero percent is going to average, So

570
00:25:21,000 --> 00:25:23,520
Speaker 1: maybe that really kicks up the appetite for that.

571
00:25:24,280 --> 00:25:27,119
Speaker 2: It all depends on what is going to happen with

572
00:25:27,200 --> 00:25:30,840
Speaker 2: growth and inflation. Okay, if you're a serious bond trader,

573
00:25:31,560 --> 00:25:33,480
Speaker 2: and I have some friends that that's all they do, right,

574
00:25:33,520 --> 00:25:35,960
Speaker 2: they they'll tell you that the big odd ball in

575
00:25:36,000 --> 00:25:38,760
Speaker 2: this whole cycle is what happens with inflation. There are

576
00:25:38,920 --> 00:25:41,200
Speaker 2: there are some of the inflation nistas who said, we're

577
00:25:41,200 --> 00:25:43,720
Speaker 2: going to have structurally higher inflation for the rest of

578
00:25:43,760 --> 00:25:46,840
Speaker 2: the decade. You know, we're going to have it clo. Okay, Well,

579
00:25:46,920 --> 00:25:51,240
Speaker 2: if that's the case, then yields are completely mispriced. You

580
00:25:51,240 --> 00:25:52,919
Speaker 2: know you're sitting I just want to make sure you

581
00:25:52,920 --> 00:25:54,320
Speaker 2: have the right number. You're sitting at a ten year

582
00:25:54,440 --> 00:25:57,800
Speaker 2: three point eight nine, okay, And when you're calculating that

583
00:25:58,040 --> 00:26:00,520
Speaker 2: three point eight nine, you have to factor in growth,

584
00:26:00,720 --> 00:26:03,560
Speaker 2: and you have to factor in an inflation kicker, Right,

585
00:26:03,800 --> 00:26:05,560
Speaker 2: Why would you own a piece of paper that does

586
00:26:05,600 --> 00:26:07,680
Speaker 2: not keep up with the rate of inflation. It doesn't

587
00:26:07,720 --> 00:26:10,680
Speaker 2: make sense unless you expect growth to collapse and inflation

588
00:26:10,760 --> 00:26:13,040
Speaker 2: to collapse. So I think what many traders are doing

589
00:26:13,160 --> 00:26:18,359
Speaker 2: right now. They're expecting disinflation. They've put in this goldilocks

590
00:26:18,440 --> 00:26:20,359
Speaker 2: sort of period where you get inflation back down to

591
00:26:20,359 --> 00:26:23,639
Speaker 2: two percent. And to your point, if that were to occur,

592
00:26:24,080 --> 00:26:26,480
Speaker 2: then yeah, bonds at three point eight percent, bonds at

593
00:26:26,520 --> 00:26:29,679
Speaker 2: four percent, a tenure at four percent, that's a no brainer,

594
00:26:29,920 --> 00:26:32,240
Speaker 2: right if you have if you have inflation, you know,

595
00:26:32,280 --> 00:26:35,439
Speaker 2: the official government sat is CPI at two percent, and

596
00:26:35,480 --> 00:26:37,879
Speaker 2: you've got a tenure, then you have a BAK basically

597
00:26:37,880 --> 00:26:40,400
Speaker 2: the quote unquote risk free rate at four percent, you're

598
00:26:40,400 --> 00:26:42,400
Speaker 2: getting a two percent you know, a kicker there. That's

599
00:26:42,480 --> 00:26:44,520
Speaker 2: that's a no brainer. Now if you're your side of

600
00:26:44,520 --> 00:26:47,280
Speaker 2: the trade, you're saying these tenures should be closer to

601
00:26:47,400 --> 00:26:50,160
Speaker 2: five or six percent because inflation is going to pick

602
00:26:50,200 --> 00:26:51,560
Speaker 2: back up again and there'll be another wave.

603
00:26:52,920 --> 00:26:57,720
Speaker 1: Yeah, I think you know. And to your point, wave perfect, perfect, right,

604
00:26:57,720 --> 00:26:59,760
Speaker 1: It's like inflation comes in waves, and so this is

605
00:26:59,760 --> 00:27:02,000
Speaker 1: not nothing that ever does a smooth line. I just

606
00:27:02,000 --> 00:27:03,720
Speaker 1: think for the rest of the decade, right, we're looking

607
00:27:03,760 --> 00:27:05,640
Speaker 1: at now, you know, seven year period or whatever, six

608
00:27:05,680 --> 00:27:09,520
Speaker 1: six year period you know, with with sort of the globalism,

609
00:27:09,600 --> 00:27:12,440
Speaker 1: globalization sort of breaking apart, you know, trying to reonshore

610
00:27:12,480 --> 00:27:14,800
Speaker 1: supply chains, et cetera, et cetera. I think it just

611
00:27:14,920 --> 00:27:15,880
Speaker 1: leads to inflation.

612
00:27:16,320 --> 00:27:19,040
Speaker 2: But going back true, then short bonds is the trade

613
00:27:19,040 --> 00:27:21,480
Speaker 2: of the decade. Just just to clarify for the audience,

614
00:27:21,520 --> 00:27:24,040
Speaker 2: if you're correct, which you may be, I'm not saying

615
00:27:24,080 --> 00:27:26,440
Speaker 2: you're not, But short bonds is the trade of the decade,

616
00:27:26,640 --> 00:27:27,680
Speaker 2: sure sor treasuries.

617
00:27:29,480 --> 00:27:33,160
Speaker 1: Let's talk about the Fed pivot here, not technically, well,

618
00:27:33,200 --> 00:27:35,440
Speaker 1: whatever you consider a pivot. For me, I consider a

619
00:27:35,440 --> 00:27:37,399
Speaker 1: pivot would be we were raising, now we're lowering, so

620
00:27:37,560 --> 00:27:39,800
Speaker 1: right now we're looking to pause. But whatever you want

621
00:27:39,840 --> 00:27:42,639
Speaker 1: to call it, certainly a hawkish to dubbish pivot, we

622
00:27:42,640 --> 00:27:45,400
Speaker 1: could call it that, right, Maybe.

623
00:27:45,240 --> 00:27:46,840
Speaker 3: I'm curious your take on that.

624
00:27:47,080 --> 00:27:51,280
Speaker 1: And is this a political move or is this a

625
00:27:51,359 --> 00:27:53,040
Speaker 1: data move or is it both?

626
00:27:54,680 --> 00:27:59,240
Speaker 2: I think it's both so And to your point just

627
00:27:59,280 --> 00:28:01,879
Speaker 2: about the term alogy. You got to remember the most

628
00:28:01,920 --> 00:28:06,720
Speaker 2: famous Powell pivot, the one coming out of December twenty

629
00:28:06,720 --> 00:28:10,720
Speaker 2: eighteen early January twenty nineteen, where Powell originally said the

630
00:28:10,760 --> 00:28:13,840
Speaker 2: balance sheet runoff, it's on autopilot. And then by the

631
00:28:13,840 --> 00:28:16,159
Speaker 2: middle of next year, after the yield curve inverted, they

632
00:28:16,200 --> 00:28:21,240
Speaker 2: were cutting. He actually quote unquote pivoted before the cut came. Okay,

633
00:28:21,280 --> 00:28:24,920
Speaker 2: the pile pivot came in Q one of twenty nineteen,

634
00:28:25,040 --> 00:28:27,240
Speaker 2: after the stock market sold off pretty violently. At the

635
00:28:27,320 --> 00:28:30,160
Speaker 2: end of twenty eighteen was down twenty percent. So I think,

636
00:28:30,400 --> 00:28:33,159
Speaker 2: you know, for their perspective, they love to prime the

637
00:28:33,160 --> 00:28:35,520
Speaker 2: pump from a communications standpoint, Like we talked about, it's

638
00:28:35,520 --> 00:28:38,280
Speaker 2: all jaw owning setting market expectations, and I think that

639
00:28:38,400 --> 00:28:40,040
Speaker 2: was calculated in what they were doing.

640
00:28:40,200 --> 00:28:42,760
Speaker 1: They came out and to add on to that, Joe,

641
00:28:42,800 --> 00:28:46,440
Speaker 1: in November of twenty one, the pivot came, we're going

642
00:28:46,520 --> 00:28:48,360
Speaker 1: to start tightening, but they didn't actually start doing it

643
00:28:48,480 --> 00:28:49,400
Speaker 1: until twenty twenty two.

644
00:28:49,560 --> 00:28:53,400
Speaker 2: Exactly, Yeah, it's exactly right. And when did bitcoin top

645
00:28:53,480 --> 00:28:56,080
Speaker 2: November of twenty twenty one. When did I think NASDAK

646
00:28:56,160 --> 00:28:59,120
Speaker 2: top somewhere within a month, Yeah, a few weeks later.

647
00:28:59,160 --> 00:29:00,600
Speaker 2: Same thing with the SMP at the end of twenty

648
00:29:00,640 --> 00:29:02,960
Speaker 2: twenty one. So it's always about like sort of front

649
00:29:03,040 --> 00:29:06,320
Speaker 2: running what they're now pivoting to tell you is coming

650
00:29:06,320 --> 00:29:08,360
Speaker 2: down the line. They don't want to surprise the market.

651
00:29:08,640 --> 00:29:11,160
Speaker 2: Even just as one final little nugget of this, do

652
00:29:11,200 --> 00:29:14,400
Speaker 2: you remember even when it was a blackout period, okay,

653
00:29:14,480 --> 00:29:16,560
Speaker 2: which is basically when the Fed's not supposed to leak

654
00:29:16,560 --> 00:29:18,480
Speaker 2: any information, they're not supposed to give you any information

655
00:29:18,520 --> 00:29:21,360
Speaker 2: in advance of the FOMC being They gave that famous

656
00:29:21,800 --> 00:29:24,800
Speaker 2: sort of leak to Nick Timross, which really made him

657
00:29:24,800 --> 00:29:26,880
Speaker 2: a star, right where they basically said we're going to

658
00:29:26,960 --> 00:29:30,520
Speaker 2: do a seventy five basis point hike in the summer

659
00:29:30,560 --> 00:29:34,480
Speaker 2: of twenty twenty point two. Excuse me, that was unexpected, right.

660
00:29:34,520 --> 00:29:36,800
Speaker 2: They realized we're behind the curve with respect to inflation.

661
00:29:37,000 --> 00:29:39,440
Speaker 2: We're going to move it up expectations from twenty five

662
00:29:39,480 --> 00:29:42,160
Speaker 2: or fifty basis points to seventy five, which was really

663
00:29:42,360 --> 00:29:45,360
Speaker 2: not something you normally see. That's all about setting expectations,

664
00:29:45,360 --> 00:29:47,120
Speaker 2: and I think he did that with the last meeting.

665
00:29:47,160 --> 00:29:49,600
Speaker 2: He took the market by a surprise with how devish

666
00:29:49,600 --> 00:29:52,280
Speaker 2: she was coming out. So why is this, I think

667
00:29:52,320 --> 00:29:55,200
Speaker 2: it's because they're seeing some of the forward indicators show

668
00:29:55,400 --> 00:29:58,920
Speaker 2: significant disinflation. I think they're seeing some of the early

669
00:29:58,960 --> 00:30:01,800
Speaker 2: signs of an economic slow down. And what they're trying

670
00:30:01,840 --> 00:30:03,920
Speaker 2: to do is they're trying to stick the soft landing

671
00:30:04,280 --> 00:30:07,600
Speaker 2: by just by getting ahead of the curve. Right, Typically

672
00:30:07,640 --> 00:30:10,720
Speaker 2: they're behind the curve. They're being reactionary. And again this

673
00:30:10,800 --> 00:30:14,160
Speaker 2: goes back to your point the new dogma being preemptive, right,

674
00:30:14,400 --> 00:30:17,160
Speaker 2: They rather than sitting here in the spring, when you've

675
00:30:17,200 --> 00:30:20,640
Speaker 2: got some clear recessionary like data, they want to say

676
00:30:20,640 --> 00:30:23,240
Speaker 2: we're easing now because they know there's a lag effect

677
00:30:23,240 --> 00:30:26,320
Speaker 2: before those that easing comes into the marketplace. And I

678
00:30:26,360 --> 00:30:28,400
Speaker 2: think the market got its message from the FED, and

679
00:30:28,440 --> 00:30:30,800
Speaker 2: that's why I think you've seen repricing along the curve.

680
00:30:31,560 --> 00:30:33,719
Speaker 1: Yeah, yeah, that's some of the data points I've been

681
00:30:33,720 --> 00:30:36,120
Speaker 1: looking at. I mean, the PCE right potentially is what

682
00:30:36,320 --> 00:30:40,040
Speaker 1: maybe they're more important indicator than the PCI and core PC.

683
00:30:40,200 --> 00:30:42,560
Speaker 2: Yeah, core PC is the main copia.

684
00:30:43,280 --> 00:30:45,840
Speaker 1: And what we can see now, like the forecast is

685
00:30:45,920 --> 00:30:49,720
Speaker 1: like they're undershooting their target right, like they were projecting

686
00:30:49,760 --> 00:30:51,280
Speaker 1: by the end of next year to get it down

687
00:30:51,320 --> 00:30:53,640
Speaker 1: to you two and a half is two point four

688
00:30:53,880 --> 00:30:55,760
Speaker 1: and like we're going to be there like right now,

689
00:30:55,800 --> 00:30:58,400
Speaker 1: like and so like we might achieve twenty twenty five goals.

690
00:30:58,920 --> 00:31:00,560
Speaker 3: It looks like based off of sort of where they're

691
00:31:00,560 --> 00:31:02,560
Speaker 3: projecting it, which is not good, by the way, No,

692
00:31:02,640 --> 00:31:05,160
Speaker 3: it's not good at all. No, that's bad.

693
00:31:05,480 --> 00:31:08,840
Speaker 2: It's recessionary type type readings, right, Yes, I mean.

694
00:31:08,760 --> 00:31:09,840
Speaker 3: We agree on that.

695
00:31:09,880 --> 00:31:11,280
Speaker 1: And this goes back to what I kind of set

696
00:31:11,320 --> 00:31:15,080
Speaker 1: up the conversation with was like really being preemptive instead

697
00:31:15,080 --> 00:31:16,680
Speaker 1: of reactioning, because like people would say, oh, when the

698
00:31:16,680 --> 00:31:20,800
Speaker 1: FED pivot happens, stocks crash, Well, that's correlation not causation, right,

699
00:31:20,840 --> 00:31:23,120
Speaker 1: It's like they were already crashing and the FED acted

700
00:31:23,200 --> 00:31:25,920
Speaker 1: too late, and so to see them doing this now

701
00:31:26,880 --> 00:31:29,160
Speaker 1: seems like at the data driven move. But then also

702
00:31:29,440 --> 00:31:30,920
Speaker 1: but then of course, why would they do that when

703
00:31:30,960 --> 00:31:33,720
Speaker 1: inflation is still there and it seems like they would

704
00:31:33,800 --> 00:31:39,040
Speaker 1: choose inflation over deflation, particularly going into this political cycle

705
00:31:39,160 --> 00:31:40,680
Speaker 1: in two and twenty before election cycle.

706
00:31:41,040 --> 00:31:43,560
Speaker 2: There's one other aspect that I should add, okay, which

707
00:31:43,600 --> 00:31:46,640
Speaker 2: I think is huge. If you remember the stock market,

708
00:31:47,360 --> 00:31:50,440
Speaker 2: the SMP and the AZDAC, we're selling off pretty hard

709
00:31:50,920 --> 00:31:54,080
Speaker 2: near the end of October. Do you recall that, and

710
00:31:54,400 --> 00:31:57,120
Speaker 2: almost to the day of when the stock market bottomed

711
00:31:57,160 --> 00:32:02,680
Speaker 2: after more than ten percent correction, peaked in July in August,

712
00:32:02,960 --> 00:32:05,680
Speaker 2: sold off down into the end of October and within

713
00:32:05,760 --> 00:32:08,960
Speaker 2: a day, as folks have pointed out on fin twit,

714
00:32:09,400 --> 00:32:11,600
Speaker 2: it was right after you got this update, the quarterly

715
00:32:11,640 --> 00:32:15,080
Speaker 2: refinancing announcement from Treasury, And what the big sort of

716
00:32:15,120 --> 00:32:17,440
Speaker 2: news item that many attribute to be a catalyst for

717
00:32:17,480 --> 00:32:20,600
Speaker 2: this run in risk assets was that, like we talked

718
00:32:20,600 --> 00:32:23,280
Speaker 2: about earlier, Janet Yellen was going to issue more short

719
00:32:23,360 --> 00:32:25,680
Speaker 2: term paper that's easier to absorb, and she wasn't going

720
00:32:25,760 --> 00:32:28,280
Speaker 2: to issue as much long term paper. I think George Gammon,

721
00:32:29,000 --> 00:32:32,160
Speaker 2: your friend, he talked about this as well. The decision

722
00:32:32,240 --> 00:32:35,040
Speaker 2: not to put that much supply of longer duration into

723
00:32:35,040 --> 00:32:37,680
Speaker 2: the market was read by many as being a pro

724
00:32:37,800 --> 00:32:40,880
Speaker 2: risk on rally. Why is that relevant to what's happening now.

725
00:32:41,120 --> 00:32:43,880
Speaker 2: You've got to remember that in mid January, I think

726
00:32:43,880 --> 00:32:46,200
Speaker 2: it's the twenty first of memory serves there's going to

727
00:32:46,240 --> 00:32:49,200
Speaker 2: be another quarterly refinancing announcement, and what we may see

728
00:32:49,240 --> 00:32:51,920
Speaker 2: at that point is Janet Yellen finally saying we need

729
00:32:51,960 --> 00:32:55,040
Speaker 2: to now introduce some more of the duration supply. She

730
00:32:55,080 --> 00:32:57,040
Speaker 2: doesn't want to run the entire government on short term

731
00:32:57,040 --> 00:32:59,160
Speaker 2: paper that you constantly have to roll. She needs to

732
00:32:59,160 --> 00:33:02,560
Speaker 2: lock in some of it in longer duration. So what

733
00:33:02,800 --> 00:33:05,360
Speaker 2: many have sort of theorized is that one of the

734
00:33:05,360 --> 00:33:08,040
Speaker 2: reasons why Pile had to come out and potentially be

735
00:33:08,280 --> 00:33:11,160
Speaker 2: more dubbish at this meeting. Is because she knows that

736
00:33:11,280 --> 00:33:14,520
Speaker 2: Jannyellen's going to come with additional duration supply into the market,

737
00:33:14,760 --> 00:33:17,000
Speaker 2: and they don't want to sell that paper at you know,

738
00:33:17,160 --> 00:33:19,640
Speaker 2: near or five percent or four point eight percent tenure.

739
00:33:19,680 --> 00:33:22,200
Speaker 2: They much rather sell that tenure paper at three point

740
00:33:22,200 --> 00:33:22,960
Speaker 2: eight nine percent.

741
00:33:23,040 --> 00:33:25,200
Speaker 3: Yeah, yeah, yeah.

742
00:33:24,760 --> 00:33:24,920
Speaker 2: So.

743
00:33:27,720 --> 00:33:30,400
Speaker 1: Do you think I mean, so history tells us that

744
00:33:30,800 --> 00:33:33,320
Speaker 1: a president in a reelection, an incoming president of election

745
00:33:33,400 --> 00:33:36,560
Speaker 1: cycle going into recession, you know, has very little chance

746
00:33:36,560 --> 00:33:37,960
Speaker 1: of reelection.

747
00:33:37,600 --> 00:33:38,120
Speaker 3: At this point.

748
00:33:39,600 --> 00:33:42,160
Speaker 1: So maybe maybe two part question here for you. One,

749
00:33:43,040 --> 00:33:46,080
Speaker 1: you know, the FED being this independent agency, do you

750
00:33:46,160 --> 00:33:48,000
Speaker 1: believe that it looks like I mean, I can give

751
00:33:48,000 --> 00:33:49,960
Speaker 1: you a bunch of data points. I don't necessarily agree

752
00:33:50,000 --> 00:33:51,920
Speaker 1: with that it looks like there's taps on the shoulder.

753
00:33:52,520 --> 00:33:54,240
Speaker 1: The FED wants to control the dollar, but if the

754
00:33:54,280 --> 00:33:56,360
Speaker 1: government goes bankrupt, what good is good?

755
00:33:56,440 --> 00:33:57,280
Speaker 3: Is the dollar sort of thing?

756
00:33:57,320 --> 00:34:00,320
Speaker 1: So anyway, one, do you think they're being sort of

757
00:34:00,320 --> 00:34:03,360
Speaker 1: coerced or working with the government, let's just say, and

758
00:34:03,400 --> 00:34:06,880
Speaker 1: then two, If that's true, then do you think if

759
00:34:06,920 --> 00:34:09,840
Speaker 1: the Biden administration wants to win, they would do pretty

760
00:34:09,880 --> 00:34:12,560
Speaker 1: much anything They could whatever they're possible to make sure

761
00:34:12,600 --> 00:34:14,000
Speaker 1: we don't go into a recession this year.

762
00:34:15,239 --> 00:34:17,839
Speaker 2: So I'll start from the spirit of the first part

763
00:34:17,880 --> 00:34:20,239
Speaker 2: of the questions, which I think the FED is inherently

764
00:34:20,280 --> 00:34:23,359
Speaker 2: political at this point. I don't think there's any doubt

765
00:34:23,400 --> 00:34:27,160
Speaker 2: about that. I think their actions have shown that, particularly,

766
00:34:27,239 --> 00:34:29,399
Speaker 2: you know, ever since really the dual mandate. I think,

767
00:34:29,520 --> 00:34:33,280
Speaker 2: I think it's very difficult to have the dual mandate

768
00:34:33,360 --> 00:34:36,680
Speaker 2: where you have stable prices and the labor market when

769
00:34:36,719 --> 00:34:39,279
Speaker 2: in many cases they can run against each other. And

770
00:34:39,400 --> 00:34:41,040
Speaker 2: what I think you've seen a little bit of this

771
00:34:41,080 --> 00:34:43,439
Speaker 2: with the hiking cycle, where you know, Pole has said

772
00:34:43,440 --> 00:34:46,440
Speaker 2: the labor markets out of balance, that's the phrase he use.

773
00:34:46,520 --> 00:34:48,680
Speaker 2: What he's really saying in code is that there needs

774
00:34:48,719 --> 00:34:51,600
Speaker 2: to be more unemployed people because there's too much demand

775
00:34:52,480 --> 00:34:57,640
Speaker 2: for labor and that causes sort of increased inflationary dynamics.

776
00:34:58,200 --> 00:35:01,720
Speaker 2: So I do think you have consistency. And also this

777
00:35:01,719 --> 00:35:04,359
Speaker 2: this sort of natural thing that you know, we have

778
00:35:04,400 --> 00:35:06,919
Speaker 2: to be married at the hip with treasury because there's

779
00:35:07,000 --> 00:35:09,279
Speaker 2: so much of the fiscal dominance in play that we

780
00:35:09,400 --> 00:35:14,680
Speaker 2: have to sort of at least implicitly backstop the demand

781
00:35:14,680 --> 00:35:17,800
Speaker 2: for treasuries. Where necessary, Okay, if there is liquidity or

782
00:35:17,840 --> 00:35:20,640
Speaker 2: certain issues. The bigger issue, though, I think, is that

783
00:35:21,000 --> 00:35:24,080
Speaker 2: you know, what does it mean a in an election year?

784
00:35:24,080 --> 00:35:27,120
Speaker 2: And I think what a lot of folks are missing?

785
00:35:27,440 --> 00:35:29,640
Speaker 2: And I think I'll credit people like Lynn Alden, who

786
00:35:29,680 --> 00:35:31,680
Speaker 2: talks about this quite a bit. Is you know she

787
00:35:32,719 --> 00:35:34,920
Speaker 2: uses and I think is refer to this term of

788
00:35:34,960 --> 00:35:39,280
Speaker 2: fiscal dominance and the ability of Treasury really to dwarf

789
00:35:39,719 --> 00:35:41,400
Speaker 2: what the FED is doing. And I think there's a

790
00:35:41,440 --> 00:35:44,960
Speaker 2: lot of truth to that. When you're running wartime deficits effectively,

791
00:35:45,600 --> 00:35:48,680
Speaker 2: do you really believe Mark that hiking twenty five BIPs

792
00:35:48,760 --> 00:35:51,759
Speaker 2: or fifty BIPs or cutting fifty BIPs are going to

793
00:35:51,840 --> 00:35:53,799
Speaker 2: is going to impact the economy with the amount of

794
00:35:53,840 --> 00:35:57,040
Speaker 2: spending that's coming into the marketplace. And that's what puts real,

795
00:35:57,640 --> 00:36:01,080
Speaker 2: real money into people's hands. You know, the FED had

796
00:36:01,360 --> 00:36:04,680
Speaker 2: they were well documented for years after the GFC saying

797
00:36:04,920 --> 00:36:07,120
Speaker 2: we don't understand why the QE we're doing is not

798
00:36:07,160 --> 00:36:09,759
Speaker 2: triggering inflation. We don't understand it. We don't see the

799
00:36:10,200 --> 00:36:12,759
Speaker 2: CPI ticking up. And I think that the same is

800
00:36:12,800 --> 00:36:14,560
Speaker 2: true of the interest rate policies. When they're at zero,

801
00:36:14,680 --> 00:36:18,719
Speaker 2: you still had relatively muted CPI and PCE. I think

802
00:36:18,760 --> 00:36:22,080
Speaker 2: what they found out after COVID, or during COVID rather

803
00:36:22,400 --> 00:36:24,640
Speaker 2: was that if you really want to get the economy running,

804
00:36:24,640 --> 00:36:26,800
Speaker 2: if you really want to induce consumers to spend, just

805
00:36:26,840 --> 00:36:29,200
Speaker 2: give them cash. And the only entity that can give

806
00:36:29,360 --> 00:36:31,920
Speaker 2: give them direct cash is the Treasury. Right, So what

807
00:36:32,239 --> 00:36:34,239
Speaker 2: I expect is that, like you know, my view is

808
00:36:34,239 --> 00:36:38,680
Speaker 2: that Treasury continues to dominate and overshadow what the FED

809
00:36:38,760 --> 00:36:40,680
Speaker 2: is doing, and I think that will continue, and the

810
00:36:40,719 --> 00:36:42,960
Speaker 2: FED is sort of the backstop behind it. They're kind

811
00:36:43,000 --> 00:36:44,879
Speaker 2: of the janitor that it's to come in and clean

812
00:36:44,960 --> 00:36:48,040
Speaker 2: up the mess that the fiscal spending is doing and

813
00:36:48,040 --> 00:36:50,640
Speaker 2: and to to you know, to their credit, I think

814
00:36:50,640 --> 00:36:54,840
Speaker 2: they were trying. But ultimately, Janet Yellen spend spending, Treasury

815
00:36:54,840 --> 00:36:57,640
Speaker 2: spending is just dwarfing anything they're doing. The one final

816
00:36:57,640 --> 00:37:00,640
Speaker 2: thing is you got to remember that Janet well, by

817
00:37:01,080 --> 00:37:04,200
Speaker 2: Jen Yellen, by Q one, she will have successfully rebuilt

818
00:37:04,239 --> 00:37:06,799
Speaker 2: like eighty percent of the TGA And to your point

819
00:37:06,840 --> 00:37:09,279
Speaker 2: about an election year, that's a huge pot of money.

820
00:37:09,320 --> 00:37:11,840
Speaker 2: It's hundreds of billions of dollars. She will have to

821
00:37:11,880 --> 00:37:14,120
Speaker 2: provide liquidity to the marketplace and she doesn't care what

822
00:37:14,160 --> 00:37:16,600
Speaker 2: Pile does. Pole can raise, he can keep them steady,

823
00:37:16,600 --> 00:37:18,880
Speaker 2: he can lower them. She's got hundreds of billions of

824
00:37:18,920 --> 00:37:21,520
Speaker 2: dollars she can use to provide liquidity in conjunction with

825
00:37:21,560 --> 00:37:25,720
Speaker 2: the executive branch where necessary, without any effect on monetary policy.

826
00:37:26,280 --> 00:37:28,960
Speaker 1: Yeah, very well broken down, And I agree with all

827
00:37:29,000 --> 00:37:31,480
Speaker 1: of that, you know, to your point, Lenald and I

828
00:37:31,520 --> 00:37:33,440
Speaker 1: had her on just recently. We talked about that, and

829
00:37:33,480 --> 00:37:35,719
Speaker 1: I agree with that. And you look at a lot

830
00:37:35,800 --> 00:37:38,640
Speaker 1: of factors, obviously just the government spending, but even how

831
00:37:38,680 --> 00:37:40,440
Speaker 1: that's being broken down. And look at the amount of

832
00:37:40,480 --> 00:37:45,040
Speaker 1: labor force participation just by government jobs, right, Like they're

833
00:37:45,160 --> 00:37:48,680
Speaker 1: driving over half of the economy, right, plus all the

834
00:37:48,719 --> 00:37:50,680
Speaker 1: spending they're doing and all these other things, and even

835
00:37:50,680 --> 00:37:53,640
Speaker 1: the job owning. And so the FED is trying to

836
00:37:53,640 --> 00:37:56,759
Speaker 1: crush demand by making everybody broke. But the people they're

837
00:37:56,760 --> 00:37:59,640
Speaker 1: making broke is a small percentage of the market. The

838
00:37:59,680 --> 00:38:01,479
Speaker 1: FED is just pumping the other half. So I agree

839
00:38:01,520 --> 00:38:04,399
Speaker 1: with that. So then based off of that, let's put

840
00:38:04,400 --> 00:38:08,399
Speaker 1: our prediction hat on. Let's just go to November when

841
00:38:08,400 --> 00:38:14,200
Speaker 1: the election is. Do you think that they're able you again,

842
00:38:14,280 --> 00:38:16,320
Speaker 1: I think we both agree that they'll probably do whatever

843
00:38:16,320 --> 00:38:20,280
Speaker 1: they can. Whether they can or not is a different story.

844
00:38:20,760 --> 00:38:22,359
Speaker 1: And so I guess the question is do you think

845
00:38:22,400 --> 00:38:24,880
Speaker 1: they'll be able to keep this thing going through November?

846
00:38:25,080 --> 00:38:27,080
Speaker 1: And are we up or down by then?

847
00:38:28,080 --> 00:38:31,760
Speaker 2: Yeah? I mean so, I think the success in that,

848
00:38:32,320 --> 00:38:36,600
Speaker 2: the success and their efforts to keep the plates all spinning,

849
00:38:37,040 --> 00:38:40,360
Speaker 2: is going to be mostly driven by what happens in

850
00:38:40,400 --> 00:38:42,960
Speaker 2: the labor market, because I think you can make a

851
00:38:43,000 --> 00:38:46,480
Speaker 2: case here based on some of the indicators that unemployment

852
00:38:46,600 --> 00:38:49,600
Speaker 2: may begin to rise in Q one Q two of

853
00:38:49,680 --> 00:38:54,719
Speaker 2: next year. If it rises gradually and slowly, I think

854
00:38:54,719 --> 00:38:57,439
Speaker 2: their chances of success and sort of keeping the plate

855
00:38:57,480 --> 00:39:02,120
Speaker 2: spinning till the election is higher. But you've got to remember,

856
00:39:02,880 --> 00:39:06,600
Speaker 2: economic systems are dynamic, right, so they don't respond. Everybody

857
00:39:06,600 --> 00:39:09,320
Speaker 2: thinks it's just a linear, sort of slow gradual rise,

858
00:39:09,600 --> 00:39:12,200
Speaker 2: when in reality, what we've seen in prior recessions is

859
00:39:12,239 --> 00:39:14,799
Speaker 2: you generally have the straw that breaks the camel's back.

860
00:39:15,000 --> 00:39:17,239
Speaker 2: You have sort of the tipping event, which can cause

861
00:39:17,239 --> 00:39:20,360
Speaker 2: a significant spike in unemployment. And if you see a

862
00:39:20,360 --> 00:39:23,000
Speaker 2: significant spike in unemployment, that's going to be very difficult

863
00:39:23,239 --> 00:39:25,520
Speaker 2: for them to deal with. And in addition to that

864
00:39:26,040 --> 00:39:28,440
Speaker 2: while you will have liquidity from the treasury because of

865
00:39:28,480 --> 00:39:31,200
Speaker 2: the rebuilt TGA, you're not going to have any stimulus

866
00:39:31,200 --> 00:39:33,920
Speaker 2: packages come through in Congress. There's no reason for the

867
00:39:33,960 --> 00:39:37,680
Speaker 2: opposition party to bless a stimulus package when they're trying

868
00:39:37,719 --> 00:39:39,560
Speaker 2: to take back the White House. So that's going to

869
00:39:39,560 --> 00:39:41,640
Speaker 2: be an interesting dynamic. But I think it all comes

870
00:39:41,680 --> 00:39:44,120
Speaker 2: back to the labor market. You know, even by the

871
00:39:44,160 --> 00:39:47,520
Speaker 2: Fed's own estimates, they expected unemployment rate, the unemployment rate

872
00:39:47,520 --> 00:39:49,319
Speaker 2: to be higher by the end of twenty twenty three,

873
00:39:49,320 --> 00:39:52,160
Speaker 2: they didn't come close to the target. That is telling

874
00:39:52,200 --> 00:39:54,920
Speaker 2: me that, you know, there is a structural shortage in

875
00:39:54,960 --> 00:39:58,560
Speaker 2: the labor market and without you know, a recession without

876
00:39:58,600 --> 00:40:00,640
Speaker 2: a rise in unemployment is sort of meaning this, Right,

877
00:40:00,640 --> 00:40:02,520
Speaker 2: what is that? What does that really mean? Like you

878
00:40:02,560 --> 00:40:05,480
Speaker 2: know the old adage that you know, recessions when your

879
00:40:05,520 --> 00:40:07,839
Speaker 2: neighbor loses your job at depressions when you lose your job.

880
00:40:08,000 --> 00:40:09,560
Speaker 2: There's a lot of truth to that, right. What we

881
00:40:09,640 --> 00:40:13,160
Speaker 2: really care about in the recession is how does labor respond.

882
00:40:13,880 --> 00:40:17,279
Speaker 2: We've had plenty of periods post GFC where the growth rate,

883
00:40:17,320 --> 00:40:21,319
Speaker 2: the actual statistical growth rate real GDP, has been very muted, right,

884
00:40:21,320 --> 00:40:23,439
Speaker 2: it's been in the you know, one percent one point

885
00:40:23,440 --> 00:40:27,640
Speaker 2: two percent before the the you know, before the two thousands,

886
00:40:27,680 --> 00:40:30,080
Speaker 2: they used to say that was pre recessionary growth. Now

887
00:40:30,080 --> 00:40:32,400
Speaker 2: it's sort of become the norm for us to expect

888
00:40:32,400 --> 00:40:36,200
Speaker 2: one percent growth two percent growth. So so I personally,

889
00:40:36,239 --> 00:40:37,759
Speaker 2: if you had a gun to my head, I think

890
00:40:37,800 --> 00:40:39,960
Speaker 2: it's far more likely than not they can keep it

891
00:40:40,000 --> 00:40:43,319
Speaker 2: sort of stable. But if you got some unexpected event

892
00:40:43,360 --> 00:40:45,840
Speaker 2: that tips and breaks the camels back front for the

893
00:40:45,880 --> 00:40:47,600
Speaker 2: labor market, that's a whole different ballgame.

894
00:40:47,960 --> 00:40:49,799
Speaker 1: Yeah, and I would definitely agree with you on them.

895
00:40:49,960 --> 00:40:52,160
Speaker 1: Labor markets are going back to political or data. It's

896
00:40:52,200 --> 00:40:55,279
Speaker 1: both the data being the scene the piece slow down

897
00:40:55,320 --> 00:40:57,640
Speaker 1: ahead of schedule, which is dangerous, but also I agree

898
00:40:57,680 --> 00:40:59,920
Speaker 1: it's the unemployment they're seeing. And we talk about like

899
00:41:00,080 --> 00:41:02,560
Speaker 1: risk assets, like they take the stairs up in the

900
00:41:02,560 --> 00:41:05,480
Speaker 1: elevator down right, and so does labor markets as well.

901
00:41:05,880 --> 00:41:08,360
Speaker 1: And the problem with labor markets is once this de

902
00:41:08,520 --> 00:41:12,520
Speaker 1: growth starts happening, it could take years to recover. And

903
00:41:12,600 --> 00:41:14,560
Speaker 1: so it's like they really want to get in front

904
00:41:14,600 --> 00:41:15,920
Speaker 1: of this. And that goes back to kind of the

905
00:41:15,920 --> 00:41:18,000
Speaker 1: point I made from the beginning, which is they're much

906
00:41:18,040 --> 00:41:21,400
Speaker 1: more preemptively working today. So I would agree that that

907
00:41:21,520 --> 00:41:25,239
Speaker 1: labor market is the thing they're probably most concerned about. Well,

908
00:41:25,280 --> 00:41:26,920
Speaker 1: I don't know about most concerned about, well, one of

909
00:41:26,920 --> 00:41:28,719
Speaker 1: the most concerning things for them. I would agree with

910
00:41:28,719 --> 00:41:30,799
Speaker 1: you on that. The thing that I would just go

911
00:41:30,960 --> 00:41:35,920
Speaker 1: back to is great. So all these people lose their jobs,

912
00:41:36,600 --> 00:41:37,720
Speaker 1: businesses shut down.

913
00:41:38,400 --> 00:41:41,400
Speaker 3: Cool, let's just stend out stemichecks like you know what

914
00:41:41,440 --> 00:41:41,719
Speaker 3: I mean.

915
00:41:42,440 --> 00:41:45,399
Speaker 2: But there's a problem with that, because you know it's

916
00:41:45,440 --> 00:41:48,799
Speaker 2: an election year, right, so you have a reason, a

917
00:41:48,840 --> 00:41:52,160
Speaker 2: political reason, why folks would block that effort. You know,

918
00:41:52,360 --> 00:41:54,640
Speaker 2: if you're if you're a member of the GOP and

919
00:41:54,680 --> 00:41:58,040
Speaker 2: you were attempting to try and retake the White House.

920
00:41:58,080 --> 00:42:01,160
Speaker 2: As I said, why would you vote for anything in

921
00:42:01,200 --> 00:42:03,319
Speaker 2: the form of a stimulus check? Why wouldn't you want

922
00:42:03,360 --> 00:42:04,360
Speaker 2: the pain they get worse?

923
00:42:05,239 --> 00:42:07,480
Speaker 1: Unless unless you don't see all the rhinos on the

924
00:42:07,480 --> 00:42:11,480
Speaker 1: Republican side and don't see a uniparty system, that's more

925
00:42:11,520 --> 00:42:15,040
Speaker 1: of a political conversation. Let's let's let's let's jump gears.

926
00:42:15,080 --> 00:42:17,000
Speaker 3: I mean, unless you want to add something to that. No, No,

927
00:42:17,040 --> 00:42:18,759
Speaker 3: that's great, let's let's jump gears.

928
00:42:18,800 --> 00:42:21,759
Speaker 1: I want to get into more political things. But from

929
00:42:21,800 --> 00:42:24,200
Speaker 1: a different standpoint, and this is more about like the

930
00:42:24,200 --> 00:42:28,799
Speaker 1: Bitcoin ETF. Yes, and sort of Janney, I'm not Jenny

931
00:42:28,880 --> 00:42:32,640
Speaker 1: on Elizabeth Warren's sort of war path against bitcoin and

932
00:42:32,680 --> 00:42:34,680
Speaker 1: cryptocurrency and just tech in general.

933
00:42:34,760 --> 00:42:35,680
Speaker 3: Really I see this.

934
00:42:35,719 --> 00:42:38,480
Speaker 1: Sort of like Elizabeth Warren, Gary Ginsler sort of camp

935
00:42:38,560 --> 00:42:42,840
Speaker 1: Biden camp really against tech. It just seems like specifically

936
00:42:42,840 --> 00:42:45,880
Speaker 1: crypto and bitcoin. So we have, on one hand, we

937
00:42:45,960 --> 00:42:48,040
Speaker 1: have like Wall Street jumping in with his ETF. On

938
00:42:48,080 --> 00:42:50,520
Speaker 1: the other hand, the government's like really coming heavy handed.

939
00:42:50,600 --> 00:42:54,680
Speaker 1: Let's start with the ETF side. So at this point,

940
00:42:54,760 --> 00:42:56,600
Speaker 1: I mean, shoot, man, it looks like any day we

941
00:42:56,600 --> 00:42:58,880
Speaker 1: could see a handful of ETFs get approved, maybe by

942
00:42:58,920 --> 00:43:00,279
Speaker 1: the time this record didn't even shows up.

943
00:43:00,280 --> 00:43:03,480
Speaker 2: We don't know January eighth, we know it's we know

944
00:43:03,560 --> 00:43:05,360
Speaker 2: it's certainly not going to be before the fifth.

945
00:43:05,560 --> 00:43:06,759
Speaker 3: We know, Okay, there we go.

946
00:43:07,239 --> 00:43:09,160
Speaker 1: The reason why are you saying that's are you saying

947
00:43:09,160 --> 00:43:11,160
Speaker 1: that's the soonest or you think that's that's what you're

948
00:43:11,200 --> 00:43:11,919
Speaker 1: calling is the date.

949
00:43:12,600 --> 00:43:14,520
Speaker 2: I think it's most likely to happen on the eighth,

950
00:43:14,640 --> 00:43:16,880
Speaker 2: but we know it's not going to happen before the fifth.

951
00:43:17,080 --> 00:43:19,400
Speaker 2: And there's a real reason for that, because what they

952
00:43:19,440 --> 00:43:22,000
Speaker 2: did is they retooled some of the comment periods for

953
00:43:22,040 --> 00:43:24,760
Speaker 2: the ETFs. The SEC said that some of the comment

954
00:43:24,800 --> 00:43:28,560
Speaker 2: periods will extend through January fifth, which is a Friday,

955
00:43:29,440 --> 00:43:31,279
Speaker 2: And that's I think it's the Franklin one and a

956
00:43:31,280 --> 00:43:34,560
Speaker 2: couple others. And the reason why it would be very unlikely.

957
00:43:34,640 --> 00:43:37,920
Speaker 2: I mean, it's possible. I assume that you could. You could,

958
00:43:38,080 --> 00:43:40,000
Speaker 2: you could have approval, but it's very unlikely for them

959
00:43:40,040 --> 00:43:42,760
Speaker 2: to issue in the Federal Register that people can comment

960
00:43:42,800 --> 00:43:46,040
Speaker 2: on these ETFs and issue feedback and then suddenly approve

961
00:43:46,080 --> 00:43:48,160
Speaker 2: it right before then. That wouldn't make a whole lot

962
00:43:48,200 --> 00:43:51,120
Speaker 2: of sense. They typically allow the comment period to expire,

963
00:43:51,160 --> 00:43:54,160
Speaker 2: and the latest comment period is is January fifth, So

964
00:43:54,520 --> 00:43:56,600
Speaker 2: my bad is the following week after the fifth?

965
00:43:57,280 --> 00:44:01,920
Speaker 3: Okay, interesting, we'll see. Yeah, I don't disagree.

966
00:44:01,960 --> 00:44:03,719
Speaker 1: It looks like just the last couple of days, the

967
00:44:03,760 --> 00:44:07,360
Speaker 1: amount of chatter happening, and not just the chatter. The

968
00:44:07,400 --> 00:44:09,160
Speaker 1: next thing I want to bring up is it's not

969
00:44:09,200 --> 00:44:12,160
Speaker 1: just the chatter, it's like the increase of meetings happening

970
00:44:12,200 --> 00:44:16,040
Speaker 1: between these ETF applicants and the SEC, but more specifically,

971
00:44:16,560 --> 00:44:18,799
Speaker 1: the changes that they've had to start making to these

972
00:44:18,840 --> 00:44:20,440
Speaker 1: applications such.

973
00:44:20,200 --> 00:44:22,680
Speaker 2: As genius for them, right. I mean, have you broken

974
00:44:22,719 --> 00:44:26,399
Speaker 2: down these on other podcasts the changes? No, okay, go ahead,

975
00:44:26,840 --> 00:44:28,320
Speaker 2: so give me your attorney hat.

976
00:44:28,800 --> 00:44:29,040
Speaker 1: Yeah.

977
00:44:29,160 --> 00:44:34,520
Speaker 2: No, it's really actually I view it basically, and again

978
00:44:35,000 --> 00:44:37,680
Speaker 2: I'm speaking for only myself and no client or my firm,

979
00:44:37,760 --> 00:44:39,920
Speaker 2: but I'll just tell you I view it as basically

980
00:44:40,320 --> 00:44:43,319
Speaker 2: an act of retaliation against a gray scale and I'll

981
00:44:43,320 --> 00:44:46,640
Speaker 2: explain why, because they are insisting on this issue of

982
00:44:46,760 --> 00:44:50,240
Speaker 2: the cash creates for the shares, basically for the creation

983
00:44:50,360 --> 00:44:55,839
Speaker 2: purposes of shares. They want the entities the ETFs. They

984
00:44:55,920 --> 00:44:57,520
Speaker 2: really had a sort of their foot down on this,

985
00:44:57,600 --> 00:44:59,160
Speaker 2: and that's what a lot of the meetings have been about.

986
00:44:59,440 --> 00:45:03,319
Speaker 2: They want the to go buy bitcoin with cash as

987
00:45:03,320 --> 00:45:07,680
Speaker 2: opposed to creating shares through people tendering over bitcoin to

988
00:45:07,840 --> 00:45:10,680
Speaker 2: the entity. The in kind creation is what it's called.

989
00:45:10,920 --> 00:45:13,440
Speaker 2: And the reason why that's really significant is that all

990
00:45:13,480 --> 00:45:16,880
Speaker 2: the other ETF vehicles out there, other than Grayscale, they

991
00:45:17,200 --> 00:45:20,319
Speaker 2: are in many respects, although they may want to have

992
00:45:20,360 --> 00:45:22,560
Speaker 2: a better source of bitcoin, they're just letting in kind.

993
00:45:22,800 --> 00:45:24,960
Speaker 2: It's not as consequential for them because they can just

994
00:45:25,000 --> 00:45:27,440
Speaker 2: go source the bitcoin buy it with cash and they

995
00:45:27,560 --> 00:45:30,359
Speaker 2: use that to fill up their ETF structures. Now, grey

996
00:45:30,360 --> 00:45:32,200
Speaker 2: Scale is a different story, right as you know, Mark.

997
00:45:32,200 --> 00:45:33,960
Speaker 1: Before we jump to the Grayscale, let me just ask

998
00:45:34,000 --> 00:45:36,319
Speaker 1: you to clarify this for me. So they went to

999
00:45:36,760 --> 00:45:39,440
Speaker 1: being cash settled as opposed to physically settled.

1000
00:45:39,480 --> 00:45:42,800
Speaker 2: No, no, no, you're not settled creation of the shares.

1001
00:45:43,120 --> 00:45:46,359
Speaker 1: So this means that instead of I'm going to give

1002
00:45:46,400 --> 00:45:48,279
Speaker 1: them cash and they're going to take that cash and

1003
00:45:48,280 --> 00:45:51,160
Speaker 1: they're going to go buy bitcoin, correct exactly, they're actually

1004
00:45:51,200 --> 00:45:53,680
Speaker 1: going to go physically buy it and hold yu yeah,

1005
00:45:53,680 --> 00:45:56,000
Speaker 1: and then if I want to cash out, they'll sell

1006
00:45:56,000 --> 00:45:58,000
Speaker 1: the bitcoin in the market and give them my cash back.

1007
00:45:58,400 --> 00:46:00,720
Speaker 2: Correct. So the way to think about it is this, Okay,

1008
00:46:01,360 --> 00:46:03,719
Speaker 2: you have an original structure of the trust, right, and

1009
00:46:03,760 --> 00:46:05,520
Speaker 2: the trust just has shares. Just think of it like

1010
00:46:05,560 --> 00:46:08,120
Speaker 2: any company. Okay, you have shares of the company. How

1011
00:46:08,120 --> 00:46:10,640
Speaker 2: do you create those shares? How do you determine if

1012
00:46:10,640 --> 00:46:12,560
Speaker 2: we're going to issue shares, how are you going to

1013
00:46:12,560 --> 00:46:16,960
Speaker 2: actually create them? And the reality is that what Grayscale

1014
00:46:17,040 --> 00:46:19,520
Speaker 2: used to do is they used to let people send

1015
00:46:19,520 --> 00:46:22,160
Speaker 2: over their bitcoin and they would give them locked up shares.

1016
00:46:22,200 --> 00:46:24,240
Speaker 2: Do you remember that That's how the premium was extracted

1017
00:46:24,239 --> 00:46:26,760
Speaker 2: for a long time, so that was an inkind contribution.

1018
00:46:26,840 --> 00:46:29,080
Speaker 2: They basically said, here's my bitcoin, you take that, you

1019
00:46:29,200 --> 00:46:32,319
Speaker 2: give me shares, and they were extracting premium. Now what

1020
00:46:32,360 --> 00:46:33,920
Speaker 2: they're trying to get people to do is they say,

1021
00:46:33,960 --> 00:46:35,719
Speaker 2: you can issue as many shares as you want, you

1022
00:46:35,719 --> 00:46:38,239
Speaker 2: can create as many shares as you want, but you

1023
00:46:38,360 --> 00:46:41,239
Speaker 2: have to create those shares with cash. It's called the

1024
00:46:41,280 --> 00:46:44,160
Speaker 2: cash create. Whereas you know, say I have a bunch

1025
00:46:44,200 --> 00:46:46,200
Speaker 2: of bitcoin, I've got fifty bitcoin and I want to go,

1026
00:46:46,480 --> 00:46:49,080
Speaker 2: you know, buy an equivalent amount of shares. I can't

1027
00:46:49,120 --> 00:46:52,080
Speaker 2: tender to blackrock my bitcoin and get the shares. Does

1028
00:46:52,080 --> 00:46:56,200
Speaker 2: that make sense? Yeah, okay, So why is that significant?

1029
00:46:56,200 --> 00:47:00,960
Speaker 2: Why does that matter? Because with gray Scale, Greyscale already

1030
00:47:01,040 --> 00:47:04,040
Speaker 2: has a ton of bitcoin, okay, And if they're going

1031
00:47:04,120 --> 00:47:07,480
Speaker 2: to insist on the conversion has to be a cash

1032
00:47:07,560 --> 00:47:11,120
Speaker 2: creation of shares. If they're going to uplist their ETF,

1033
00:47:11,280 --> 00:47:15,040
Speaker 2: they basically transform the GBDC to in ETF. What they're

1034
00:47:15,080 --> 00:47:16,680
Speaker 2: effectively going to have to do is they're going to

1035
00:47:16,800 --> 00:47:19,880
Speaker 2: have to then get cash from people, and they can't

1036
00:47:20,239 --> 00:47:23,640
Speaker 2: convert this big honeypot of bitcoin that they have to

1037
00:47:23,760 --> 00:47:26,760
Speaker 2: the ETF structure. There's no way to do that without,

1038
00:47:27,440 --> 00:47:29,960
Speaker 2: you know, basically selling the bitcoin in the open market,

1039
00:47:30,040 --> 00:47:32,600
Speaker 2: which they have to realize a tax loss on, which

1040
00:47:32,640 --> 00:47:34,759
Speaker 2: is big deal, right Like if you're selling bitcoin you

1041
00:47:34,760 --> 00:47:38,520
Speaker 2: acquired at fifteen thousand, which Greyscale did, there are tax consequences,

1042
00:47:38,680 --> 00:47:42,200
Speaker 2: potential tax consequences. That makes it structurally a lot harder

1043
00:47:42,520 --> 00:47:45,120
Speaker 2: for Grayscale to convert than a new entity like all

1044
00:47:45,160 --> 00:47:47,040
Speaker 2: these new ones at a file where all they need

1045
00:47:47,120 --> 00:47:48,920
Speaker 2: is cash, they can just go out into the marketplace,

1046
00:47:49,080 --> 00:47:54,160
Speaker 2: buy the bitcoin, issue the shares, boom, it's done.

1047
00:47:54,440 --> 00:47:57,600
Speaker 1: So a lot of this move, you're thinking, is sort

1048
00:47:57,600 --> 00:48:00,520
Speaker 1: of by push to push gray Scale out of the running,

1049
00:48:00,680 --> 00:48:03,879
Speaker 1: because you're probably going to bring in several at one time.

1050
00:48:03,680 --> 00:48:06,240
Speaker 3: To sort of maybe whatever in the air, fairness or whatever.

1051
00:48:06,440 --> 00:48:08,120
Speaker 1: But this gives them a way to sort of put

1052
00:48:08,160 --> 00:48:10,799
Speaker 1: that out and maybe maybe the black Rocks et cetera

1053
00:48:10,960 --> 00:48:14,239
Speaker 1: don't like this maybe unfair advantage that Greyscale has by

1054
00:48:14,239 --> 00:48:16,759
Speaker 1: already having all these customers and shares or not shares

1055
00:48:16,800 --> 00:48:17,320
Speaker 1: what bitcoin.

1056
00:48:17,680 --> 00:48:20,440
Speaker 2: I don't think it's driven This is just my supposition here.

1057
00:48:20,440 --> 00:48:22,840
Speaker 2: I don't think it's driven by what Blackrock or the

1058
00:48:22,880 --> 00:48:25,080
Speaker 2: other participants want. I think it's more just the SEC

1059
00:48:25,280 --> 00:48:29,400
Speaker 2: is very frustrated with Grayscale. They lost in court against Greyscale, right,

1060
00:48:29,440 --> 00:48:32,239
Speaker 2: And if they can kind of, you know, put in

1061
00:48:32,280 --> 00:48:35,880
Speaker 2: place a structural barrier that doesn't prevent them from converting,

1062
00:48:35,920 --> 00:48:38,240
Speaker 2: but it makes it very painful for them to convert,

1063
00:48:38,280 --> 00:48:40,400
Speaker 2: why not. I mean, I think that's their rationale. I

1064
00:48:40,440 --> 00:48:43,440
Speaker 2: think that's why it seems kind of silly to focus

1065
00:48:43,480 --> 00:48:46,600
Speaker 2: so much on this we don't want in kind share creation.

1066
00:48:47,239 --> 00:48:48,799
Speaker 2: I don't think it really makes a whole lot of sense,

1067
00:48:48,840 --> 00:48:50,479
Speaker 2: to be honest. But if they can twist the knife

1068
00:48:50,480 --> 00:48:52,319
Speaker 2: a little bit and cause a little pain, I think

1069
00:48:52,400 --> 00:48:57,120
Speaker 2: that's their rationale. And you know, from the perspective of Grayscale, right,

1070
00:48:57,320 --> 00:48:59,880
Speaker 2: it's a big deal. Like having all this bitcoin now,

1071
00:49:00,000 --> 00:49:02,919
Speaker 2: they got to figure out how to convert it. It's

1072
00:49:02,960 --> 00:49:04,680
Speaker 2: not going to be as simple as just a new

1073
00:49:05,160 --> 00:49:08,200
Speaker 2: market participant just spinning up in ETF and just saying, Okay,

1074
00:49:08,280 --> 00:49:09,760
Speaker 2: I've got the cash, I'll create the shares.

1075
00:49:10,120 --> 00:49:10,400
Speaker 3: Yeah.

1076
00:49:10,440 --> 00:49:12,359
Speaker 1: About a month ago, I was in Dallas or Fort

1077
00:49:12,400 --> 00:49:15,359
Speaker 1: Worth for the Texas Blockchain Association, and I sat at

1078
00:49:15,360 --> 00:49:16,440
Speaker 1: dinner with about ten.

1079
00:49:16,320 --> 00:49:18,000
Speaker 3: People that were all very very connected.

1080
00:49:18,000 --> 00:49:19,879
Speaker 1: I don't want to drop their names here, but let's

1081
00:49:19,880 --> 00:49:24,600
Speaker 1: just say some ETF people, some regulatory people, some lawmakers.

1082
00:49:24,880 --> 00:49:27,399
Speaker 3: It's a pretty good table of who's who's there.

1083
00:49:27,560 --> 00:49:30,279
Speaker 1: We got into these conversations and again we have some

1084
00:49:30,320 --> 00:49:32,560
Speaker 1: ETF people there at the table, and they were explaining

1085
00:49:32,600 --> 00:49:34,560
Speaker 1: to me that, like the black Rocks, et cetera, a

1086
00:49:34,600 --> 00:49:36,839
Speaker 1: lot of people are expecting this massive bump, but they're

1087
00:49:36,840 --> 00:49:37,440
Speaker 1: trying to frontrun it.

1088
00:49:37,440 --> 00:49:39,000
Speaker 3: As soon as the ETFs could approve, the price going

1089
00:49:39,000 --> 00:49:40,080
Speaker 3: to go up because the're all going to go buy

1090
00:49:40,080 --> 00:49:42,239
Speaker 3: this the mass amount of bitcoin. They're like, that's not

1091
00:49:42,239 --> 00:49:42,800
Speaker 3: how it works.

1092
00:49:42,800 --> 00:49:44,880
Speaker 1: Like they've already been building these seed accounts for these

1093
00:49:44,920 --> 00:49:47,400
Speaker 1: buffer accounts, these grayce gets or not Gracecus.

1094
00:49:47,400 --> 00:49:48,239
Speaker 3: But with the black Rocks, et.

1095
00:49:48,120 --> 00:49:50,520
Speaker 1: Cetera, they can't be buying and selling in the market

1096
00:49:50,560 --> 00:49:52,640
Speaker 1: every day. They can't move the market. So they have

1097
00:49:52,640 --> 00:49:55,440
Speaker 1: these buffer accounts they've already established, and they'll buy and

1098
00:49:55,480 --> 00:49:57,920
Speaker 1: sell from their buffer accounts, these seed accounts, and then

1099
00:49:57,920 --> 00:49:59,920
Speaker 1: the seed accounts will be managing sort of the market.

1100
00:50:00,440 --> 00:50:03,600
Speaker 1: So they've already been buying all year, and the ETF

1101
00:50:03,640 --> 00:50:07,040
Speaker 1: will have to go buy at market price from that vehicle.

1102
00:50:08,719 --> 00:50:10,239
Speaker 1: So I don't know if you know anything about that,

1103
00:50:10,360 --> 00:50:12,759
Speaker 1: if yeah, it's true or not, And if so, then

1104
00:50:12,800 --> 00:50:14,839
Speaker 1: it would seem like then greyscale could just do something

1105
00:50:14,880 --> 00:50:16,600
Speaker 1: similar they set up a gray scale ETF and then

1106
00:50:16,680 --> 00:50:18,800
Speaker 1: just buys the bitcoin from the trust.

1107
00:50:19,760 --> 00:50:22,360
Speaker 2: They could do that as long as they're willing to

1108
00:50:22,400 --> 00:50:25,560
Speaker 2: pay the taxes, right, and that impacts the value of

1109
00:50:25,600 --> 00:50:30,560
Speaker 2: the shares. So it's conceivable that if they were to

1110
00:50:30,600 --> 00:50:33,000
Speaker 2: do what you're talking about, they're going to realize tax

1111
00:50:33,040 --> 00:50:37,920
Speaker 2: events and that could continue to contribute to the shares

1112
00:50:38,000 --> 00:50:40,560
Speaker 2: of the trust trading at a discount to the bitcoin

1113
00:50:40,600 --> 00:50:44,160
Speaker 2: they hold, which you know, that's the real problem. Again,

1114
00:50:44,400 --> 00:50:47,719
Speaker 2: this would not prevent in any way greyscale from converting.

1115
00:50:48,000 --> 00:50:49,759
Speaker 2: It just makes it a little bit more painful and

1116
00:50:49,800 --> 00:50:50,720
Speaker 2: a little bit more owners.

1117
00:50:50,760 --> 00:50:52,080
Speaker 1: They should have done it last year when it was

1118
00:50:52,120 --> 00:50:56,640
Speaker 1: at fifteen thousand. Now doing it now they're kind of stuck.

1119
00:50:57,360 --> 00:51:00,239
Speaker 3: Okay, So I like that you broke that down for me.

1120
00:51:00,239 --> 00:51:02,160
Speaker 1: I appreciate that because I was thinking it was more

1121
00:51:02,239 --> 00:51:05,000
Speaker 1: cash settled and so it wasn't really there buying the bitcoin.

1122
00:51:05,040 --> 00:51:07,840
Speaker 1: It wasn't really going to affect the supply demand metrics

1123
00:51:07,840 --> 00:51:09,400
Speaker 1: of the bitcoin but you're not saying that. It's just

1124
00:51:09,440 --> 00:51:11,719
Speaker 1: more about the redemption, the addition and the subtraction of

1125
00:51:11,719 --> 00:51:12,400
Speaker 1: the cash.

1126
00:51:12,480 --> 00:51:15,600
Speaker 2: It'll it'll absolutely be spot bitcoin they're buying. Nothing's going

1127
00:51:15,680 --> 00:51:17,560
Speaker 2: to be you know, cash settled. It's all about how

1128
00:51:17,600 --> 00:51:18,560
Speaker 2: do you create the shares.

1129
00:51:19,040 --> 00:51:22,000
Speaker 1: Yeah, Now you were saying that you maybe don't think

1130
00:51:22,080 --> 00:51:23,600
Speaker 1: this is that big of a catalyst.

1131
00:51:23,880 --> 00:51:27,480
Speaker 3: I think you made a point. Is that is that accurate? Uh?

1132
00:51:28,120 --> 00:51:30,160
Speaker 1: And when I say a cattle the ETS being approved

1133
00:51:30,200 --> 00:51:31,680
Speaker 1: is not going to be that big of a catalyst

1134
00:51:31,680 --> 00:51:32,640
Speaker 1: for the price of bitcoin.

1135
00:51:33,120 --> 00:51:36,239
Speaker 2: I think it's already been a catalyst. I think, you know,

1136
00:51:36,640 --> 00:51:40,879
Speaker 2: the notion that people, uh savvy market participants don't read

1137
00:51:40,920 --> 00:51:42,600
Speaker 2: the tea leaves and they're going to wait until day

1138
00:51:42,680 --> 00:51:45,200
Speaker 2: want to buy the spot bitcoin Kieff. I'm sure it

1139
00:51:45,239 --> 00:51:47,560
Speaker 2: will lead to flows and I think it will contribute,

1140
00:51:48,440 --> 00:51:50,520
Speaker 2: you know, in a positive way. I think that it's

1141
00:51:50,520 --> 00:51:53,360
Speaker 2: already sort of trig triggered a bull market here, and

1142
00:51:53,400 --> 00:51:55,360
Speaker 2: I think you've seen a lot of it. You know,

1143
00:51:55,360 --> 00:51:57,840
Speaker 2: the estimates are all over the place. There are some

1144
00:51:57,920 --> 00:52:00,480
Speaker 2: folks at Bloomberg that I was talking with, you know,

1145
00:52:00,520 --> 00:52:03,120
Speaker 2: they estimate in the first year it could be ten billion.

1146
00:52:03,520 --> 00:52:06,080
Speaker 2: I know that there are other people on Twitter that are,

1147
00:52:06,120 --> 00:52:08,480
Speaker 2: you know, wildly bullish. They think it's going to lead

1148
00:52:08,480 --> 00:52:11,680
Speaker 2: to hundreds of billions of dollars in inflow. We don't know, right,

1149
00:52:12,200 --> 00:52:15,120
Speaker 2: but as you know from markets, right, expectations are everything.

1150
00:52:15,200 --> 00:52:18,719
Speaker 2: So if if the expectations are like ten billion and

1151
00:52:18,760 --> 00:52:21,319
Speaker 2: you end up getting ten billion, to me, I think

1152
00:52:21,360 --> 00:52:23,920
Speaker 2: that's in large part, not totally, but in large part

1153
00:52:23,960 --> 00:52:27,000
Speaker 2: that's been priced in. Now, if if the expectations are

1154
00:52:27,000 --> 00:52:29,560
Speaker 2: ten billion and you get one hundred billion in inflows

1155
00:52:29,560 --> 00:52:32,480
Speaker 2: in the first year, that's massive, right, That'll that'll be

1156
00:52:32,520 --> 00:52:35,560
Speaker 2: a huge catalyst. But you know, markets are interesting in

1157
00:52:35,600 --> 00:52:38,640
Speaker 2: this way that you know, market participants don't wait until

1158
00:52:38,719 --> 00:52:42,120
Speaker 2: the actual event to position themselves. And I would expect

1159
00:52:42,120 --> 00:52:44,839
Speaker 2: that the reason we're sitting at you know, forty four

1160
00:52:44,880 --> 00:52:47,440
Speaker 2: thousand or whatever it is as of today forty three thousand,

1161
00:52:47,840 --> 00:52:49,920
Speaker 2: is because people have already read the tea leaves and

1162
00:52:49,960 --> 00:52:52,040
Speaker 2: realized that this is sort of priced in. That's not

1163
00:52:52,080 --> 00:52:53,799
Speaker 2: a reason, by the way, to be bearish and think

1164
00:52:53,840 --> 00:52:55,719
Speaker 2: that we're going to have some crash or you know,

1165
00:52:55,840 --> 00:52:58,840
Speaker 2: cascade down. But I would not be surprised if you know,

1166
00:52:59,000 --> 00:53:02,040
Speaker 2: post ETF sitting in the forties or fifty thousand, and

1167
00:53:02,560 --> 00:53:05,040
Speaker 2: then we continue upward trend, you know, maybe for the

1168
00:53:05,040 --> 00:53:07,759
Speaker 2: next six months to a year. But I don't I

1169
00:53:07,800 --> 00:53:10,440
Speaker 2: guess when I'm making that comment, I don't mark believe

1170
00:53:10,480 --> 00:53:12,719
Speaker 2: that you're going to have a they talk about this

1171
00:53:12,760 --> 00:53:15,600
Speaker 2: god candle right where the day the ETF launches, we're

1172
00:53:15,600 --> 00:53:18,080
Speaker 2: going to go up twenty thousand dollars or thirty thousand dollars.

1173
00:53:18,400 --> 00:53:20,680
Speaker 2: I don't believe that. I could be wrong. I don't

1174
00:53:20,680 --> 00:53:22,320
Speaker 2: have a crystal ball, but that's just my gut.

1175
00:53:22,800 --> 00:53:23,680
Speaker 3: I don't believe that either.

1176
00:53:23,719 --> 00:53:25,920
Speaker 1: That's not my gut either, and partly because like I said,

1177
00:53:25,960 --> 00:53:27,319
Speaker 1: I don't think the ETFs are going to go out

1178
00:53:27,320 --> 00:53:27,880
Speaker 1: and buy all the bitcoin.

1179
00:53:27,880 --> 00:53:28,720
Speaker 3: They already have the bitcoin.

1180
00:53:28,880 --> 00:53:30,919
Speaker 1: So just right off the bat, now, what it would

1181
00:53:30,920 --> 00:53:33,359
Speaker 1: do is potentially what I think the ETF does over

1182
00:53:33,400 --> 00:53:36,799
Speaker 1: a longer period of time, is you know, in new technology,

1183
00:53:36,800 --> 00:53:38,759
Speaker 1: of this diffusion of innovation it's called, and so you

1184
00:53:38,800 --> 00:53:41,600
Speaker 1: have the innovators, the or true believers, then you have

1185
00:53:41,800 --> 00:53:44,520
Speaker 1: the chasm, and then the early majority, and the ETF

1186
00:53:45,040 --> 00:53:47,640
Speaker 1: making it legitimate helps cross the chasm. So then you

1187
00:53:47,680 --> 00:53:49,759
Speaker 1: get the early majority to start coming in and they'll

1188
00:53:49,760 --> 00:53:51,840
Speaker 1: buy on the exchanges in the open market, and so

1189
00:53:52,000 --> 00:53:54,120
Speaker 1: there's a catalyst there. I think this could be a

1190
00:53:54,160 --> 00:53:55,680
Speaker 1: buy the rum or sell the news event. I put

1191
00:53:55,680 --> 00:53:57,800
Speaker 1: out a video maybe two weeks ago saying, hey, warning,

1192
00:53:57,920 --> 00:54:01,279
Speaker 1: just be careful. If it does dip, don't you don't sell, like,

1193
00:54:01,440 --> 00:54:03,000
Speaker 1: don't get shaken out. It might you know, we might

1194
00:54:03,040 --> 00:54:04,640
Speaker 1: see this short term sell off, but I think it

1195
00:54:04,680 --> 00:54:06,960
Speaker 1: is going to be a long term catalyst. Seventy two

1196
00:54:07,000 --> 00:54:09,520
Speaker 1: percent of financial advisor set if an ETF got approved,

1197
00:54:09,520 --> 00:54:11,680
Speaker 1: they would recommend buying bitcoin and crypto for your.

1198
00:54:11,520 --> 00:54:13,000
Speaker 3: Assets or for your portfolio.

1199
00:54:13,080 --> 00:54:15,640
Speaker 1: So like, well, you know, it doesn't happen automatically. The

1200
00:54:15,640 --> 00:54:17,759
Speaker 1: other thing is I think, you know, again, maybe not

1201
00:54:17,800 --> 00:54:20,080
Speaker 1: the first year, but you know, two years, three years

1202
00:54:20,080 --> 00:54:22,840
Speaker 1: down the road. You mentioned earlier these passive index funds.

1203
00:54:23,719 --> 00:54:25,120
Speaker 1: You know, the majority of people have their money in

1204
00:54:25,160 --> 00:54:26,680
Speaker 1: four to one case of mutual funds, and they don't

1205
00:54:26,680 --> 00:54:28,600
Speaker 1: even manage that at all, and so you're going to

1206
00:54:28,680 --> 00:54:31,600
Speaker 1: have these allocation managers, portfolio managers allocating a bigoin the

1207
00:54:31,600 --> 00:54:32,239
Speaker 1: people don't even know.

1208
00:54:32,920 --> 00:54:33,719
Speaker 3: And so but this.

1209
00:54:33,680 --> 00:54:37,000
Speaker 1: Happens over years, right years, years years. I saw you

1210
00:54:37,040 --> 00:54:39,120
Speaker 1: say something else that I thought was pretty interesting. It's

1211
00:54:39,120 --> 00:54:41,160
Speaker 1: the only second time I've ever heard it. I've said it.

1212
00:54:41,840 --> 00:54:43,920
Speaker 1: I talk about like if we if I wanted to

1213
00:54:43,920 --> 00:54:47,280
Speaker 1: price bitcoin's future valuation, sort of like a venture capitalist,

1214
00:54:47,440 --> 00:54:49,640
Speaker 1: I'd look at the markets that it's disrupting, how big

1215
00:54:49,640 --> 00:54:51,840
Speaker 1: those markets are, and what percentage we could calculate or

1216
00:54:51,840 --> 00:54:53,840
Speaker 1: we could capture from those. And so I look at

1217
00:54:53,920 --> 00:54:56,640
Speaker 1: just store of value assets alone. And so you know

1218
00:54:56,880 --> 00:55:01,280
Speaker 1: obviously gold, store value equity. Sure, you know bonds, of course,

1219
00:55:01,719 --> 00:55:05,080
Speaker 1: real estate. But one highways throughout was offshore bank accounts.

1220
00:55:06,080 --> 00:55:08,880
Speaker 1: Thirty to forty trillion dollars sitting in offshore bank accounts.

1221
00:55:08,880 --> 00:55:09,840
Speaker 3: We don't know exactly.

1222
00:55:10,440 --> 00:55:12,480
Speaker 1: We see that those offshore bank accounts are not like

1223
00:55:12,520 --> 00:55:15,520
Speaker 1: they used to be. We saw these Russian oligarchs getting

1224
00:55:15,520 --> 00:55:17,759
Speaker 1: their bank accounts seized, et cetera. A lot of that

1225
00:55:17,800 --> 00:55:21,799
Speaker 1: privacy has gone away. So bitcoin is is certainly a

1226
00:55:21,800 --> 00:55:24,840
Speaker 1: better version of gold for store value, is certainly a

1227
00:55:24,880 --> 00:55:27,439
Speaker 1: better Swiss bank account in your pocket. And I saw

1228
00:55:27,480 --> 00:55:29,880
Speaker 1: you throw out something about you think that could be

1229
00:55:29,880 --> 00:55:30,920
Speaker 1: a really big catalyst.

1230
00:55:31,719 --> 00:55:33,000
Speaker 3: Yeah, bitcoin, am I right?

1231
00:55:33,280 --> 00:55:37,320
Speaker 2: So you go back to how the euro dollar system

1232
00:55:38,280 --> 00:55:42,680
Speaker 2: was developed, and euro dollar system posts world War two,

1233
00:55:42,719 --> 00:55:45,160
Speaker 2: and even to some extent before that, you had a

1234
00:55:45,239 --> 00:55:49,640
Speaker 2: huge influx of dollars into commercial banks and some non

1235
00:55:49,680 --> 00:55:53,480
Speaker 2: banks abroad, and they began to create dollar based deposits

1236
00:55:53,880 --> 00:55:57,399
Speaker 2: from that. And what the reason the analogy I'm bringing

1237
00:55:57,400 --> 00:55:59,760
Speaker 2: this bringing this out, you know, sort of comparing to bitcoin,

1238
00:55:59,800 --> 00:56:03,080
Speaker 2: is that, as you alluded to earlier, right, if the

1239
00:56:03,280 --> 00:56:06,839
Speaker 2: inflationists are correct and you have higher structural inflation, you've

1240
00:56:06,840 --> 00:56:09,480
Speaker 2: got higher debts, you've got higher cost of capital, and

1241
00:56:09,520 --> 00:56:14,080
Speaker 2: bonds trending higher, there will be increasingly offshore entities who

1242
00:56:14,120 --> 00:56:17,440
Speaker 2: are looking for something they can store that is not

1243
00:56:17,520 --> 00:56:20,600
Speaker 2: in equity, right, because equities can be printed at will

1244
00:56:20,680 --> 00:56:22,480
Speaker 2: by the company. If they want to issue new shares,

1245
00:56:22,719 --> 00:56:24,400
Speaker 2: they're going to be looking something that is not a

1246
00:56:24,440 --> 00:56:27,719
Speaker 2: sovereign bond that because those can also be printed at will,

1247
00:56:27,800 --> 00:56:30,640
Speaker 2: you know, by by new issuers or new entities. They're

1248
00:56:31,080 --> 00:56:33,840
Speaker 2: looking at something that you know, to the example, that's

1249
00:56:33,960 --> 00:56:36,320
Speaker 2: similar to gold, that they can have as a hedge

1250
00:56:36,360 --> 00:56:39,160
Speaker 2: in their balance sheets and they can use as reserves and.

1251
00:56:39,120 --> 00:56:41,960
Speaker 1: I hand it without counterparty risk because we saw what

1252
00:56:42,000 --> 00:56:43,640
Speaker 1: happened with Russia.

1253
00:56:43,320 --> 00:56:46,400
Speaker 2: Correct, correct, So I think this is early days right

1254
00:56:46,440 --> 00:56:49,080
Speaker 2: where nobody's talking about it, which to me is that's

1255
00:56:49,080 --> 00:56:50,120
Speaker 2: where you've got to be. You got to be what

1256
00:56:50,200 --> 00:56:53,400
Speaker 2: nobody's talking about. Everybody knows about nation stated option ETFs,

1257
00:56:53,400 --> 00:56:55,200
Speaker 2: these sorts of things. But what I think the market

1258
00:56:55,239 --> 00:56:57,799
Speaker 2: discounts is that savvy financial firms, now that you have

1259
00:56:57,840 --> 00:57:01,160
Speaker 2: a US based ETF, that you have people putting money

1260
00:57:01,160 --> 00:57:03,960
Speaker 2: into establish a floor. Okay, that's the big thing. When

1261
00:57:03,960 --> 00:57:06,600
Speaker 2: when you're building reserves, you want a floor upon which

1262
00:57:06,640 --> 00:57:08,600
Speaker 2: the price is not going to drop and go to zero, right,

1263
00:57:08,640 --> 00:57:11,000
Speaker 2: And I think the establishment of the ETF provides that

1264
00:57:11,040 --> 00:57:13,800
Speaker 2: floor in many respects, and that will be a signal,

1265
00:57:13,840 --> 00:57:17,040
Speaker 2: I think to international participants that yes, there's enough for

1266
00:57:17,080 --> 00:57:20,320
Speaker 2: putting exposure on commercial bank balance sheets and to your point,

1267
00:57:20,360 --> 00:57:23,240
Speaker 2: to offshore accounts in different areas. That will be a

1268
00:57:23,360 --> 00:57:26,240
Speaker 2: huge pot of money that will you know, even tiny

1269
00:57:26,240 --> 00:57:28,600
Speaker 2: amounts of that money flowing into bitcoin is going to

1270
00:57:28,680 --> 00:57:31,760
Speaker 2: make the price absolutely rip. So that's a big, big

1271
00:57:31,760 --> 00:57:33,920
Speaker 2: deal in my mind. I think it's I think it's

1272
00:57:33,920 --> 00:57:36,440
Speaker 2: more impactful than like even the legal tender stuff and

1273
00:57:36,480 --> 00:57:39,120
Speaker 2: the that's all fun, right because it's retail. But at

1274
00:57:39,160 --> 00:57:41,800
Speaker 2: the end of the day, you know, what's the old

1275
00:57:41,840 --> 00:57:43,760
Speaker 2: quote like why do you rob banks because that's where

1276
00:57:43,760 --> 00:57:46,360
Speaker 2: the money's at. Like, banks are where the money's at, right,

1277
00:57:46,400 --> 00:57:48,280
Speaker 2: that's where you want to go if you're trying to

1278
00:57:48,320 --> 00:57:51,680
Speaker 2: really penetrate, you know, and reach critical adoption and you know,

1279
00:57:51,760 --> 00:57:55,200
Speaker 2: to get bitcoin from forty thousand dollars to two hundred

1280
00:57:55,240 --> 00:57:57,520
Speaker 2: or three hundred thousand dollars. I don't believe that will

1281
00:57:57,520 --> 00:57:59,760
Speaker 2: be primarily driven by retail. I think it's gonna be

1282
00:57:59,800 --> 00:58:03,520
Speaker 2: driven by bigger institutions with balance sheet capacity to look

1283
00:58:03,720 --> 00:58:05,920
Speaker 2: that are looking for an alternative to the bond market.

1284
00:58:06,280 --> 00:58:09,320
Speaker 1: Yeah, there was a paper I read a few months

1285
00:58:09,320 --> 00:58:11,840
Speaker 1: ago by I think it goes by on Twitter Deep

1286
00:58:11,840 --> 00:58:13,880
Speaker 1: Throat I Po I think is his name, and he

1287
00:58:13,960 --> 00:58:16,240
Speaker 1: basically broke down a lot of these offshore bank accounts

1288
00:58:16,280 --> 00:58:19,600
Speaker 1: to your point, the three biggest bank accounts being Chinese

1289
00:58:19,640 --> 00:58:22,200
Speaker 1: own bank accounts. And he was basically talking how they

1290
00:58:22,240 --> 00:58:24,360
Speaker 1: could collapse the whole US banking system if they wanted,

1291
00:58:24,400 --> 00:58:26,320
Speaker 1: just by transferring money from one account to the next,

1292
00:58:26,360 --> 00:58:28,200
Speaker 1: like they have billions of dollars in these accounts. And

1293
00:58:28,480 --> 00:58:31,200
Speaker 1: JP Morgan, it's been a month since I read the report, Well,

1294
00:58:31,240 --> 00:58:32,640
Speaker 1: it's been at least five because I haven't been on

1295
00:58:32,640 --> 00:58:34,960
Speaker 1: Twitter that long, but he talked about how, you know,

1296
00:58:35,040 --> 00:58:37,640
Speaker 1: JP Morgan, being the biggest bank in the US, had

1297
00:58:37,680 --> 00:58:40,680
Speaker 1: about eight hundred billion dollars of liquidity and they could

1298
00:58:40,720 --> 00:58:42,959
Speaker 1: just I'll just withdraw eight hundred billion from JP Morgan

1299
00:58:43,000 --> 00:58:45,760
Speaker 1: and move it to bank two over here, like to push.

1300
00:58:45,640 --> 00:58:46,080
Speaker 3: Up a button.

1301
00:58:46,120 --> 00:58:48,320
Speaker 1: But boom, they go insolvent. And they talked about that

1302
00:58:48,360 --> 00:58:50,040
Speaker 1: as a threat. But going back to kind of the

1303
00:58:50,040 --> 00:58:55,400
Speaker 1: point you're making, and we're talking about offshore banking, I

1304
00:58:55,480 --> 00:58:57,360
Speaker 1: liked I liked that that concept of sort of this

1305
00:58:57,400 --> 00:58:59,800
Speaker 1: ETF putting a floor there. You know, what we saw

1306
00:58:59,880 --> 00:59:02,320
Speaker 1: like in the Panama papers and the Pandora papers, is

1307
00:59:02,360 --> 00:59:04,520
Speaker 1: you know, all these rich oligarchs and whatever around the

1308
00:59:04,560 --> 00:59:07,000
Speaker 1: world have all this money also, so not just the banks,

1309
00:59:07,040 --> 00:59:09,320
Speaker 1: but you know, the rich people have all this money

1310
00:59:09,360 --> 00:59:11,080
Speaker 1: and these offero bank accounts. To the point I was

1311
00:59:11,080 --> 00:59:12,920
Speaker 1: making earlier, we saw the Russian allig arcs getting their

1312
00:59:12,960 --> 00:59:15,680
Speaker 1: money seized. When you set up these you know, intricate

1313
00:59:15,720 --> 00:59:20,080
Speaker 1: offshore webs of you know, holding assets this way, you

1314
00:59:20,120 --> 00:59:23,480
Speaker 1: typically use fiduciaries to sort of set this up and

1315
00:59:24,040 --> 00:59:25,960
Speaker 1: and and so forth, and so all you have to

1316
00:59:26,000 --> 00:59:27,720
Speaker 1: do is get a few of them to go, shoot,

1317
00:59:28,400 --> 00:59:30,400
Speaker 1: you know, we can put your money in this sispend counter.

1318
00:59:30,440 --> 00:59:31,920
Speaker 1: We found out the US is actually one of the

1319
00:59:31,920 --> 00:59:34,520
Speaker 1: biggest states nations for this as well.

1320
00:59:35,360 --> 00:59:37,200
Speaker 3: But hey, it could get seized. Why don't you take

1321
00:59:37,240 --> 00:59:38,480
Speaker 3: five percent or ten percent and.

1322
00:59:38,400 --> 00:59:40,640
Speaker 1: Put it in bitcoin over here? And so I mean

1323
00:59:40,680 --> 00:59:43,320
Speaker 1: that could pick up two, three, four trillion dollars like

1324
00:59:43,560 --> 00:59:44,120
Speaker 1: very quickly.

1325
00:59:45,320 --> 00:59:48,480
Speaker 2: Yeah, I mean, so the way to think about this stuff,

1326
00:59:48,560 --> 00:59:51,760
Speaker 2: I think is and I'll just full disclosure, I think

1327
00:59:51,760 --> 00:59:53,600
Speaker 2: it's very difficult even wrap your head around it. But

1328
00:59:53,680 --> 00:59:56,880
Speaker 2: like you know, everybody's focuses on the size of M two, right,

1329
00:59:56,920 --> 00:59:59,040
Speaker 2: you see and fintoid all these charts about M two,

1330
00:59:59,040 --> 01:00:02,400
Speaker 2: which is odd metric in its own right. But you

1331
01:00:02,400 --> 01:00:05,080
Speaker 2: know there are estimates estimates right of the Euro dollar

1332
01:00:05,120 --> 01:00:08,120
Speaker 2: system that it dwarfs the size of M two. I

1333
01:00:08,160 --> 01:00:09,960
Speaker 2: read an estimate one time. They think it's five or

1334
01:00:10,000 --> 01:00:13,120
Speaker 2: six times M two in the United States And people

1335
01:00:13,200 --> 01:00:14,960
Speaker 2: are like, how is that possible? How could there be

1336
01:00:15,320 --> 01:00:18,560
Speaker 2: more dollar based liabilities? And it's really because of fractional

1337
01:00:18,560 --> 01:00:21,640
Speaker 2: reserve banking, right, if you have some dollars in your account,

1338
01:00:21,880 --> 01:00:25,000
Speaker 2: and if offshore banking, you can create deposits for people,

1339
01:00:25,040 --> 01:00:27,920
Speaker 2: and you can create lines of credit. You can effectively

1340
01:00:27,960 --> 01:00:30,640
Speaker 2: print money, and then all that really matters is what

1341
01:00:30,720 --> 01:00:32,720
Speaker 2: is the reserves behind it. And if you have sort

1342
01:00:32,760 --> 01:00:35,280
Speaker 2: of a cascade to your point, like you can, you

1343
01:00:35,320 --> 01:00:38,320
Speaker 2: can create a global dollar shortage. You can create huge

1344
01:00:38,320 --> 01:00:40,240
Speaker 2: problems for the Federal Reserve where they have to open

1345
01:00:40,280 --> 01:00:42,440
Speaker 2: those swap lines and other things to provide liquidity that

1346
01:00:42,440 --> 01:00:45,320
Speaker 2: you were talking about earlier. Why is that relevant for bitcoin? Well,

1347
01:00:45,840 --> 01:00:49,600
Speaker 2: if these entities in large amount can basically print money

1348
01:00:49,680 --> 01:00:52,880
Speaker 2: offshore and for them it's very low cost to put

1349
01:00:52,960 --> 01:00:55,320
Speaker 2: you know, small amounts of their balance sheet into bitcoin.

1350
01:00:56,120 --> 01:00:58,240
Speaker 2: Number one, I think that's going to be a huge

1351
01:00:58,280 --> 01:01:00,320
Speaker 2: rip in the price, more so than you even I

1352
01:01:00,360 --> 01:01:03,400
Speaker 2: think central banks are governments holding bitcoin. And number two,

1353
01:01:03,760 --> 01:01:05,320
Speaker 2: I think what it would do is it would effecially

1354
01:01:05,480 --> 01:01:08,160
Speaker 2: be a signaling mechanism where you know, the banks, the

1355
01:01:08,160 --> 01:01:11,000
Speaker 2: actual liquidity providers for the market are saying we think

1356
01:01:11,000 --> 01:01:14,480
Speaker 2: this is good, reliable collateral. And so again back to

1357
01:01:14,600 --> 01:01:16,800
Speaker 2: you know the perception of reality we talked about earlier.

1358
01:01:16,880 --> 01:01:20,360
Speaker 2: That is huge If the biggest commercial banks abroad are

1359
01:01:20,480 --> 01:01:22,640
Speaker 2: saying this is a good enough collateral that can compete

1360
01:01:22,680 --> 01:01:25,280
Speaker 2: and be on par with with with treasuries, you know,

1361
01:01:25,400 --> 01:01:28,120
Speaker 2: the collateral, the reserve asset of the world, the the

1362
01:01:28,440 --> 01:01:32,400
Speaker 2: psychological you know, stair step. There is going to be massive, right,

1363
01:01:32,400 --> 01:01:34,520
Speaker 2: It's a it's a huge jump for people to get

1364
01:01:34,520 --> 01:01:36,600
Speaker 2: to that point and realize this is what this asset

1365
01:01:36,640 --> 01:01:39,160
Speaker 2: was intended for. It's not meant you know, I believe

1366
01:01:39,200 --> 01:01:41,400
Speaker 2: for at least the foreseeable future. Bitcoin is not meant

1367
01:01:41,440 --> 01:01:44,760
Speaker 2: for regular everyday transactions. I think it is a reserve

1368
01:01:44,840 --> 01:01:48,840
Speaker 2: asset that can be used in coordination of the larger system.

1369
01:01:49,400 --> 01:01:52,280
Speaker 1: Yeah, I know we're running long on time. I have

1370
01:01:52,280 --> 01:01:53,760
Speaker 1: one more topic I want to jump into. The sort

1371
01:01:53,760 --> 01:01:56,160
Speaker 1: of dovetails into this. I do want to say that

1372
01:01:56,200 --> 01:01:59,080
Speaker 1: I think I think bitcoin can be a reserve asset

1373
01:01:59,120 --> 01:02:01,160
Speaker 1: and a moe I didn't exchange at the same time.

1374
01:02:01,200 --> 01:02:03,600
Speaker 1: It's like the first it's it's a new technology that

1375
01:02:03,680 --> 01:02:10,280
Speaker 1: allows us to have instant have unlimited volatility, not volatility velocity,

1376
01:02:10,560 --> 01:02:13,640
Speaker 1: unlimited velocity without having to add debt on top of it. Right,

1377
01:02:13,720 --> 01:02:17,320
Speaker 1: so it could be both. Obviously working on layer two,

1378
01:02:17,440 --> 01:02:19,360
Speaker 1: layer three, layer four. There's a whole lot of talks

1379
01:02:19,360 --> 01:02:22,880
Speaker 1: about you know, block space being scarce et cetera. So transactions,

1380
01:02:24,000 --> 01:02:29,000
Speaker 1: right exactly, it's an evolution, right. So moving into the

1381
01:02:29,080 --> 01:02:30,600
Speaker 1: last topic I want to talk about. So now we

1382
01:02:30,640 --> 01:02:33,840
Speaker 1: have you know, this seemingly Wall Street, you know, finance

1383
01:02:33,960 --> 01:02:36,720
Speaker 1: jumping into bitcoin with the ETFs we just talked about,

1384
01:02:36,720 --> 01:02:39,960
Speaker 1: potentially even commercial banks and globally getting the bitcoin.

1385
01:02:40,000 --> 01:02:40,800
Speaker 3: As we talked about.

1386
01:02:41,400 --> 01:02:43,640
Speaker 1: On the other side of that, we have sort of

1387
01:02:43,640 --> 01:02:46,640
Speaker 1: this war path of regulations potentially coming down the pipe

1388
01:02:46,680 --> 01:02:52,040
Speaker 1: against bitcoin and cryptocurrencies in general. Elizabeth Warren, luckily, she

1389
01:02:52,120 --> 01:02:54,200
Speaker 1: has a horrible track record of getting any bills through.

1390
01:02:54,960 --> 01:02:56,600
Speaker 1: I don't think she's like three hundred to zero or

1391
01:02:56,640 --> 01:02:58,480
Speaker 1: something like that, three hundred and one, so hopefully that

1392
01:02:58,480 --> 01:03:01,520
Speaker 1: that sticks. But she she's trying to pass a bill

1393
01:03:01,600 --> 01:03:03,880
Speaker 1: that's so restrictive it doesn't make any sense, and you

1394
01:03:03,880 --> 01:03:06,160
Speaker 1: would go, well, she's whatever, over seventy years old. She

1395
01:03:06,160 --> 01:03:07,760
Speaker 1: doesn't understand it. That's why she's trying to put a

1396
01:03:07,800 --> 01:03:10,680
Speaker 1: bill through here. Or maybe it's that because it's so restrictive,

1397
01:03:10,720 --> 01:03:13,840
Speaker 1: it sort of makes it impossible to comply with the ladder.

1398
01:03:13,880 --> 01:03:16,120
Speaker 3: It's the ladder for sure, exactly right.

1399
01:03:16,440 --> 01:03:20,000
Speaker 1: So I mean basically it could make potentially if this

1400
01:03:20,000 --> 01:03:23,000
Speaker 1: bill goes through it could make doing any bitcoin trends

1401
01:03:23,040 --> 01:03:26,880
Speaker 1: or a crypto transactions illegal, I guess potentially. And it

1402
01:03:26,920 --> 01:03:30,439
Speaker 1: seems like maybe there's an attack vector specifically coming down

1403
01:03:30,520 --> 01:03:35,000
Speaker 1: against self custody. And so it seems like almost coincidental

1404
01:03:35,120 --> 01:03:38,480
Speaker 1: that let's open up the ETF so everyone can still

1405
01:03:38,520 --> 01:03:41,280
Speaker 1: own bitcoin, but then we'll put a law in place

1406
01:03:41,320 --> 01:03:43,360
Speaker 1: that no one can custody bitcoins, so now you have

1407
01:03:43,400 --> 01:03:45,360
Speaker 1: to buy it all through black rock, et cetera.

1408
01:03:47,200 --> 01:03:48,120
Speaker 3: Curious your take on that.

1409
01:03:48,720 --> 01:03:51,120
Speaker 2: I think you pretty much hit the nail on the head.

1410
01:03:51,120 --> 01:03:55,160
Speaker 2: I was on Preston's podcast Preston PUSH's podcast with American Hotel,

1411
01:03:55,240 --> 01:03:58,479
Speaker 2: and you know, I have said for a while now

1412
01:03:58,840 --> 01:04:01,000
Speaker 2: that I think every person and involved in the space

1413
01:04:01,040 --> 01:04:03,400
Speaker 2: should have in their mental model mark that you know

1414
01:04:03,440 --> 01:04:08,360
Speaker 2: you're going to get overbroad, draconian legislation passed not only

1415
01:04:08,400 --> 01:04:10,440
Speaker 2: by the Feds by the federal government, but you will

1416
01:04:10,440 --> 01:04:13,320
Speaker 2: get passed at some point, whether it's Warren's Bill or

1417
01:04:13,360 --> 01:04:16,560
Speaker 2: something else by states and other localities, and you just

1418
01:04:16,600 --> 01:04:18,760
Speaker 2: have to be prepared for that. It does not mean

1419
01:04:18,840 --> 01:04:20,600
Speaker 2: that you know bitcoin is dead or it's going to

1420
01:04:20,600 --> 01:04:23,520
Speaker 2: cripple the market. We all know that bitcoin is designed

1421
01:04:23,640 --> 01:04:26,600
Speaker 2: purposely to try to not be affected by some of

1422
01:04:26,600 --> 01:04:28,920
Speaker 2: these things. But that doesn't mean that there won't be

1423
01:04:29,040 --> 01:04:31,960
Speaker 2: these sorts of overbroad, vague pieces of legislation that are passed.

1424
01:04:31,960 --> 01:04:34,040
Speaker 2: And what I fully expect, and I've told clients this,

1425
01:04:34,160 --> 01:04:36,680
Speaker 2: is that they will at some point again, whether it's

1426
01:04:36,720 --> 01:04:39,240
Speaker 2: Warren's Bill or others, they will pass these bills and

1427
01:04:39,280 --> 01:04:42,320
Speaker 2: there will be litigation over them. And you know, from

1428
01:04:42,320 --> 01:04:45,480
Speaker 2: my perspective, I work as a literal perspective. You see

1429
01:04:45,520 --> 01:04:49,600
Speaker 2: job security, Yeah, exactly, No, I mean, I mean, honestly,

1430
01:04:49,600 --> 01:04:52,360
Speaker 2: I can't tell you how many times that a regulation

1431
01:04:52,640 --> 01:04:55,440
Speaker 2: or a law or something has come down that doesn't

1432
01:04:55,480 --> 01:04:59,200
Speaker 2: make sense. And the fortunate thing about our system, mark

1433
01:04:59,280 --> 01:05:01,880
Speaker 2: is that you can go for to a judge, hopefully

1434
01:05:01,880 --> 01:05:04,040
Speaker 2: that we'll look at it with open eyes and say,

1435
01:05:04,080 --> 01:05:07,520
Speaker 2: you know what, this captures a lot of innocent activity.

1436
01:05:07,680 --> 01:05:11,320
Speaker 2: It's really not appropriate, and they will strike it down.

1437
01:05:12,080 --> 01:05:13,720
Speaker 2: I'll give you a perfect example, and it's at the

1438
01:05:13,800 --> 01:05:16,160
Speaker 2: risk of bring up a controverential subject. But you've got

1439
01:05:16,160 --> 01:05:19,440
Speaker 2: to remember that during COVID people were talking about a

1440
01:05:19,520 --> 01:05:23,200
Speaker 2: national emergency and how it was life and death if

1441
01:05:23,200 --> 01:05:26,280
Speaker 2: they didn't put in place mask mandates, and over time

1442
01:05:26,720 --> 01:05:29,280
Speaker 2: those decrees, a lot of those mass mandates went before

1443
01:05:29,320 --> 01:05:32,080
Speaker 2: the courts, and many of the courts struck them down

1444
01:05:32,320 --> 01:05:35,560
Speaker 2: saying they were overreaching and overbroad. Okay, that's how the

1445
01:05:35,600 --> 01:05:38,040
Speaker 2: system is designed to work. I don't care if you're

1446
01:05:38,080 --> 01:05:40,880
Speaker 2: the SEC. I don't care if you're Congress passing a law.

1447
01:05:41,080 --> 01:05:43,760
Speaker 2: We live in a system of checks and balances, and

1448
01:05:44,080 --> 01:05:47,040
Speaker 2: when you go before and exercise your rights between hopefully

1449
01:05:47,080 --> 01:05:49,120
Speaker 2: a neutral judge that will look at the issue on

1450
01:05:49,160 --> 01:05:52,400
Speaker 2: its face, he or she will decide is this appropriate

1451
01:05:52,480 --> 01:05:55,000
Speaker 2: or does this exceed the authority that is granted to

1452
01:05:55,080 --> 01:05:58,760
Speaker 2: Congress and to me when you're basically trying to prevent

1453
01:05:59,160 --> 01:06:04,320
Speaker 2: people from worring words in an USB stick that is

1454
01:06:04,360 --> 01:06:08,600
Speaker 2: the head or their head self custody ban. If you

1455
01:06:08,720 --> 01:06:11,480
Speaker 2: try to pull that kind of nonsense, I expect them

1456
01:06:11,520 --> 01:06:14,040
Speaker 2: to lose, and lose miserably in the court system. But

1457
01:06:14,600 --> 01:06:17,280
Speaker 2: that doesn't mean they can't pass it. Now, this particular bill,

1458
01:06:17,760 --> 01:06:19,600
Speaker 2: you know, I don't think it passes the House. I

1459
01:06:19,600 --> 01:06:21,640
Speaker 2: wouldn't be overly concerned about it, you know, in the

1460
01:06:21,640 --> 01:06:24,120
Speaker 2: short run. But I don't think it's just a mistake

1461
01:06:24,200 --> 01:06:26,840
Speaker 2: that she just doesn't understand the technology. She knows exactly

1462
01:06:26,880 --> 01:06:29,200
Speaker 2: what she's doing. She has aids that are looking at

1463
01:06:29,240 --> 01:06:30,640
Speaker 2: these things, and they're trying to say, how do we

1464
01:06:30,680 --> 01:06:32,880
Speaker 2: twist the knife as much as possible. And it is

1465
01:06:32,960 --> 01:06:35,720
Speaker 2: the next step in a sequence that they have taken

1466
01:06:35,800 --> 01:06:39,040
Speaker 2: in this you know aptly coined operation Choke point two

1467
01:06:39,080 --> 01:06:41,040
Speaker 2: point zero, where they are trying to make it more

1468
01:06:41,040 --> 01:06:44,800
Speaker 2: difficult to buy purchase custody exchanges. You got to remember

1469
01:06:45,280 --> 01:06:47,720
Speaker 2: a custody biquin. You got to remember that right now.

1470
01:06:47,760 --> 01:06:50,320
Speaker 2: It is the official policy of the SEC, as set

1471
01:06:50,360 --> 01:06:53,840
Speaker 2: forth in multiple complaints against finance Coinbase in Kraken, that

1472
01:06:53,960 --> 01:06:57,160
Speaker 2: Coinbase is not a registered exchange, They're not a registered

1473
01:06:57,160 --> 01:07:00,280
Speaker 2: broker dealer. They can't even function as a clearinghouse. That

1474
01:07:00,360 --> 01:07:02,960
Speaker 2: is set forth in papers pending in the court. So

1475
01:07:03,200 --> 01:07:06,440
Speaker 2: explain to me how if that's their position that you know,

1476
01:07:06,600 --> 01:07:10,080
Speaker 2: they're not trying to basically shut down the entire crypto

1477
01:07:10,160 --> 01:07:12,760
Speaker 2: industry in the United States. You have the major exchanges.

1478
01:07:12,960 --> 01:07:14,840
Speaker 2: The SEC is saying you can't operate.

1479
01:07:15,640 --> 01:07:17,080
Speaker 1: But then if that's the case, then why did they

1480
01:07:17,120 --> 01:07:19,960
Speaker 1: make all these ETFs use Coinbase as their custody.

1481
01:07:21,000 --> 01:07:22,800
Speaker 2: It's a great question. I mean I think. I think

1482
01:07:22,840 --> 01:07:25,000
Speaker 2: what it stems to is that they got spanked in

1483
01:07:25,040 --> 01:07:28,440
Speaker 2: the in the court in the Grayscale case. They basically

1484
01:07:28,440 --> 01:07:31,280
Speaker 2: wave the white flag because the court said, you're discriminating

1485
01:07:31,320 --> 01:07:34,480
Speaker 2: between the futures product and the spot product, and you know,

1486
01:07:34,480 --> 01:07:36,440
Speaker 2: we don't. You don't have a real good basis for

1487
01:07:36,520 --> 01:07:38,640
Speaker 2: denying it, So what what can they do. They can

1488
01:07:38,680 --> 01:07:41,200
Speaker 2: do something like say we want cash creates, so we're

1489
01:07:41,240 --> 01:07:43,800
Speaker 2: not going to allow greyscale to get the first mover advantage.

1490
01:07:43,880 --> 01:07:46,040
Speaker 2: They can say we want it all custodied. We can

1491
01:07:46,080 --> 01:07:49,760
Speaker 2: say you want disclosures that you know the underlying holders

1492
01:07:49,760 --> 01:07:52,640
Speaker 2: like coinbase and others. They there may be questions as

1493
01:07:52,640 --> 01:07:56,640
Speaker 2: supposed to their regulatory status, and that's all they can

1494
01:07:56,640 --> 01:08:00,320
Speaker 2: do with the SEC. The SEC has limited jurisdiction. People

1495
01:08:00,880 --> 01:08:05,439
Speaker 2: don't really appreciate this. They can only deny ETFs under

1496
01:08:05,520 --> 01:08:09,720
Speaker 2: specific bases. Their bases for denying it for years has

1497
01:08:09,760 --> 01:08:12,560
Speaker 2: been that we don't know if there's sufficient surveillance sharing

1498
01:08:12,600 --> 01:08:15,280
Speaker 2: agreements to monitor the activity in the spot market. We

1499
01:08:15,320 --> 01:08:18,280
Speaker 2: don't know if it's wash trading, or it's manipulated or spoofing,

1500
01:08:18,360 --> 01:08:23,000
Speaker 2: et cetera. So that argument failed. They lost on that argument,

1501
01:08:23,040 --> 01:08:24,720
Speaker 2: and they can do two things. They could double down

1502
01:08:24,760 --> 01:08:26,160
Speaker 2: or just let it go through. And I think they

1503
01:08:26,160 --> 01:08:28,000
Speaker 2: wave the white flag and said, we're going to fight

1504
01:08:28,040 --> 01:08:30,439
Speaker 2: on other fronts. This is not the battle we want

1505
01:08:30,479 --> 01:08:33,840
Speaker 2: to put everything on. We'll let it through. We'll fight

1506
01:08:33,920 --> 01:08:34,840
Speaker 2: on the exchange front.

1507
01:08:34,880 --> 01:08:38,080
Speaker 1: In litigation, they couldn't say that you don't have a

1508
01:08:38,800 --> 01:08:43,120
Speaker 1: registered exchange or registered custody solution, so you can't pass

1509
01:08:43,120 --> 01:08:44,679
Speaker 1: this when you don't have a registered solution.

1510
01:08:45,040 --> 01:08:48,439
Speaker 2: They absolutely could, But I think the argument they would

1511
01:08:48,520 --> 01:08:50,120
Speaker 2: end up then is they'd be back in court.

1512
01:08:50,760 --> 01:08:53,479
Speaker 1: It seems like if they say, fine, we'll approve you, Yes,

1513
01:08:53,560 --> 01:08:55,479
Speaker 1: you can use coin Base, doesn't that sort of like

1514
01:08:55,560 --> 01:08:57,880
Speaker 1: give coin Base the legitimacy they need to. Now, Hey,

1515
01:08:57,920 --> 01:08:59,639
Speaker 1: will you approved us to be their custody.

1516
01:09:00,479 --> 01:09:02,600
Speaker 2: As bizarre as it is, it does not in the

1517
01:09:02,600 --> 01:09:04,880
Speaker 2: eyes of the SEC. To give you an example, the.

1518
01:09:04,760 --> 01:09:08,760
Speaker 3: SEC court like precedents or something like that.

1519
01:09:08,880 --> 01:09:11,120
Speaker 2: Yeah, well, I mean keep in mind Mark the SEC

1520
01:09:11,120 --> 01:09:14,400
Speaker 2: allowed Coinbase to ipo as an entity, they allowed them

1521
01:09:14,439 --> 01:09:16,720
Speaker 2: to come to market as a public traded company, and

1522
01:09:16,760 --> 01:09:19,639
Speaker 2: now they're in litigation saying you don't have the right

1523
01:09:19,720 --> 01:09:22,599
Speaker 2: to conduct your primary business function. How does that make

1524
01:09:22,640 --> 01:09:24,560
Speaker 2: any sense at all that you can come to the

1525
01:09:24,600 --> 01:09:26,599
Speaker 2: market and what they will tell you is they'll tell

1526
01:09:26,600 --> 01:09:30,759
Speaker 2: you they're different divisions, they're different statutory mandates. We can't

1527
01:09:31,400 --> 01:09:34,360
Speaker 2: question someone's underlying business. We can't tell you it's good.

1528
01:09:34,520 --> 01:09:37,360
Speaker 2: The Enforcement Division can come in and stop certain activities

1529
01:09:37,360 --> 01:09:40,960
Speaker 2: like the unregistered sale of securities. But you know that's

1530
01:09:40,960 --> 01:09:43,240
Speaker 2: how weird the government is in some respects, like there's

1531
01:09:43,320 --> 01:09:45,559
Speaker 2: limited power in different spheres.

1532
01:09:48,080 --> 01:09:49,880
Speaker 1: Man, there's so much I'd like to dig into there,

1533
01:09:49,880 --> 01:09:51,160
Speaker 1: but we're running long on time.

1534
01:09:51,520 --> 01:09:51,760
Speaker 2: Yeah.

1535
01:09:51,840 --> 01:09:55,160
Speaker 1: Sorry, No, it's just, man, there's so many, so many

1536
01:09:55,240 --> 01:09:57,720
Speaker 1: questions I have there around that part. But I know

1537
01:09:57,760 --> 01:09:59,360
Speaker 1: we're running a long on times that we won't keep

1538
01:09:59,360 --> 01:10:02,880
Speaker 1: digging down those rabbit holes. But to your point, I guess,

1539
01:10:02,920 --> 01:10:04,559
Speaker 1: sort of to frame this up or kind of put

1540
01:10:04,560 --> 01:10:08,719
Speaker 1: a pin in this, Elizabeth Warren's team knows what they're doing.

1541
01:10:09,560 --> 01:10:12,360
Speaker 1: It's sort of shifting the public narrative, if you will,

1542
01:10:14,080 --> 01:10:17,639
Speaker 1: and watch out for maybe not this one, but bits

1543
01:10:17,640 --> 01:10:19,479
Speaker 1: and pieces of it coming back over and over and

1544
01:10:19,520 --> 01:10:20,639
Speaker 1: over again in the future.

1545
01:10:20,840 --> 01:10:23,120
Speaker 2: The one thing I'll add you brought up a point,

1546
01:10:23,160 --> 01:10:26,400
Speaker 2: which is true that she has a pretty terrible track record,

1547
01:10:26,560 --> 01:10:29,400
Speaker 2: right for passing legislation. The one word of caution I

1548
01:10:29,400 --> 01:10:32,080
Speaker 2: will tell you is that this bill has a ton

1549
01:10:32,320 --> 01:10:35,600
Speaker 2: of really important co sponsors. So you know, most of

1550
01:10:35,640 --> 01:10:41,439
Speaker 2: the bills she's proposing, they're filed with the Senate and

1551
01:10:41,479 --> 01:10:43,080
Speaker 2: they never see the law to day, they're never debated.

1552
01:10:43,120 --> 01:10:46,120
Speaker 2: They get very little or no co sponsors. This has

1553
01:10:46,400 --> 01:10:50,760
Speaker 2: very prominent individuals, heads of certain committees that are significant

1554
01:10:51,040 --> 01:10:53,400
Speaker 2: signing on with it. So that tells me that this

1555
01:10:53,600 --> 01:10:55,920
Speaker 2: is and I tweeted this out. I think of all

1556
01:10:55,920 --> 01:10:58,960
Speaker 2: the bills that have been passed or she could be presented,

1557
01:10:59,240 --> 01:11:01,400
Speaker 2: that have been proposed, I think this probably has the

1558
01:11:01,439 --> 01:11:03,080
Speaker 2: best chance of passing the Senate.

1559
01:11:04,320 --> 01:11:06,400
Speaker 1: So she's like three hundred to zher and maybe this

1560
01:11:06,439 --> 01:11:09,680
Speaker 1: will be her first win before she hopefully leaves office.

1561
01:11:09,920 --> 01:11:12,800
Speaker 2: Yeah maybe, but not the House. I mean the House.

1562
01:11:12,840 --> 01:11:14,559
Speaker 2: I don't think this bill goes anywhere in the House.

1563
01:11:15,080 --> 01:11:18,080
Speaker 1: Yeah, yeah, all right, Joe Man, we're going to wrap

1564
01:11:18,080 --> 01:11:19,800
Speaker 1: it up with that. What a great conversation. I really

1565
01:11:19,800 --> 01:11:23,240
Speaker 1: appreci you taking the time. For anybody who wants a

1566
01:11:23,600 --> 01:11:28,080
Speaker 1: very market savvy and bitcoin crypto attorney, check out Joe Joe,

1567
01:11:28,120 --> 01:11:30,599
Speaker 1: shout out your law firm and your contact information for everyone.

1568
01:11:30,680 --> 01:11:33,040
Speaker 2: Yeah. Absolutely. If you google my name Joe Carlos Sari,

1569
01:11:33,040 --> 01:11:36,040
Speaker 2: you'll see all my contact info at Aminson Davis again

1570
01:11:36,080 --> 01:11:38,800
Speaker 2: based out Chicago. If you have any litigated dispute or

1571
01:11:38,880 --> 01:11:42,000
Speaker 2: regulatory issue in the crypto space, I'm happy to help

1572
01:11:42,080 --> 01:11:43,000
Speaker 2: or talk with you about it.

1573
01:11:43,360 --> 01:11:46,080
Speaker 3: Just reach out to individuals or just businesses.

1574
01:11:45,600 --> 01:11:50,240
Speaker 2: Both both. I represent individuals, you know. Unfortunately, the smaller

1575
01:11:50,240 --> 01:11:52,639
Speaker 2: stuff I can't really handle, you know, the but if

1576
01:11:52,640 --> 01:11:56,880
Speaker 2: there are significant losses, significant disputes, fraud actions can reach

1577
01:11:56,920 --> 01:11:58,960
Speaker 2: of produci your duty actions. That's my bread and butter.

1578
01:11:59,720 --> 01:12:02,879
Speaker 2: And if you want some macro musings and some legal musings,

1579
01:12:03,320 --> 01:12:06,920
Speaker 2: I met Joe Carlos sorry on Twitter. Feel free to

1580
01:12:06,920 --> 01:12:08,800
Speaker 2: follow me and reach out to me there. All right,

1581
01:12:08,800 --> 01:12:10,360
Speaker 2: Thanks Joe, Thanks Mark