Transcript
0:00 I think crypto would go up far faster than people realize >> Bitco that that type of move to me and the reason I say it with conviction the more I'm talking to people let's say traditional finance so related to the banks cuz remember the banks are out there telling people they're ready for this they're going to be involved you know all this stuff tokenization pension funds need regulations what's going on guys today we got a great conversation with Jordi Visser in this When we talk about what's going on with oil, inflation, why the doomers are wrong, why the stock market's going higher, why Bitcoin's going higher, why the AI companies are going higher, what's going on with Astra, Grockbot, how Jordy's using these technologies, and then we even get into what's going on with Kevin Walsh, Scott Bessant, President Trump, are you going to bet against the White House? Should you think that the market is going higher?
0:49 And what does all this mean for your portfolio? This one is fun. It's informative, and I promise you're going to learn something. Here's my latest conversation with Jordy Visser. All right, Jordy. I hear a lot of people in the macro world talking about interest rates and oil. I know people have been talking to you about this recently. when I'm using AI, when I'm thinking about Bitcoin, and then I hear someone talking about interest rates and oil, my brain is telling me, "Oh, yeah, that's what we're supposed to think about in the macro world, but my heart's kind of telling me like, does that stuff really matter anymore?" What do you think?
1:19 Well, it depends what you mean by does it matter. For me, I love it. in the video I did this past weekend, I was as direct as possible. We're worried about whether the Fed is going to raise 25 basis points. And I think the curve says they're going to raise 25, but maybe there'll be one more, possibly two more before they come back down. Why anyone would care about this when earnings are growing 30 plus%. Is beyond me. Why anyone would care about this when, as I showed in the video, there is no rate sensitivity to the AI trade. Zero. Like despite what people want to believe and the bare porn that goes everywhere with like, oh, rates are going higher. These guys can't raise rates. Their CDS is blowing out.
2:13 progress is moving right now at a pace so fast and is accelerating by the day. Not by the week anymore, by the day. The models are getting released. I was talking about Grockbot the last two weeks. Today we'll talk about Astra. I don't I I mean I have Grockbot doing things for me, but it's not even in league of anything I can do with Astra now, which is now combining the agentic side with the chat, with the work, with images, with everything else. so when people talk about rates and yeah, I I had a bunch of conversations this week where I'd get a text message from again people I've known in the business a long time starting with the market's going to fall because rates are going higher and oil is going higher. And I'm like, did you watch my video? Like year-over-year oil for the sixth contract is up 20% from where it was a year ago.
3:04 Why do you care about this? Just because you see a chart that shows it making the highest price for the December contract when it's below where it was. Didn't we just go through this stupidity with every oil person saying that we'd be I mean we were supposed to be out of gasoline in California during July. So like if some if people are that wrong and now we're 6 7 months from the beginning of the war and we've now heard that they're building pipelines so that Hormuz is not as important or not important at all at some point 3 years from now. Why do you don't think the market is smart enough to look through this? But most importantly again I'll say it. If earnings were only growing 5% a year and if the economy was sensitive to interest rates because what was driving the economy was like what was driving the economy before the great financial crisis which was housing rate sensitive stuff. I I I'd worry but the economy is now digital. The economy is not based on what we thought it was with autos and this. We know that people are not going out and borrowing money to buy housing. We know they're not going out borrowing money to buy cars the way they did, but the household net worth is going higher because profit margins are booming and the stock market's going higher. So, I just think when I listen to a are we going to raise 25 or not and oil's up and 10ear yields are up 35 to 40 basis points since July. I just think people are they're missing the story for what's happening and this is a reflection that people just either don't believe in AI or they don't use it. I have a a new framework to put people bucket-wise in. There's static people and dynamic people. What I mean by that is usually you think about I want people who work for me or work with me or I work for who are dynamic. They're constantly learning. They're constantly evolving. They're constantly improving.
5:00 Dynamic people is the same thing like a volatile asset, right? You need volatility for it to go up. So I think people who are intelligent and want returns, they're drawn to dynamic and volatile. But actually you can put people in bucket of do they think statically or dynamically. So for example tariffs are going to lead to all these crazy prices blah blah whatever. Static people just looked at it as the tariff increases that means that inflation increases. Dynamic people say well if tariffs increase then does domestic manufacturing increase does this happen? Does this have what are the other tools the government has to blunt the effects? Oh maybe it's not going to be as big of a problem. Oil is another good example right now. If we go into Iran, then oil will spike. And if oil spikes, then that means that every single person's paying $10 at the gas pump, and you know, we're going to blow out inflation, etc. Dynamic people think, well, what if we have our own oil or Venezuelan oil or maybe we have a pipeline that we build or maybe the economy isn't as stuck with the oil sensitivity that it used to be. And so when you think about this like static verse dynamic, I actually think that almost all of the like you know fear porn kind of doomsday predicting is people who are just looking at it from a in this moment in time X happened so Y has to happen cuz I've read it in a textbook but actually the people who are on the internet they are so used to the speed of information the dynamic nature and they've seen this play out enough times now where almost all of the doomsday saying is coming from like the traditional world of people who are just now like getting on the internet but the people who have been on the for a long time and I would put the AI people, the crypto people, etc. They're actually not bearish at all. Like they're super bullish almost to the point where actually they're getting accused of being too optimistic, you know, that AGI is going to like, you know, kill humanity. Like I mean like crazy crazy stuff. So I do think in a weird way it maybe it's me just rationalizing being terminally online now is such an advantage because it keeps your brain from like getting to be hard cement and looking at the world statically, but like what you're describing is really just a dynamic view of how the economy is playing out.
6:59 So yeah, the only thing I would disagree with what you said at the very end there is I think being online is super critical all the time as opposed to be sitting at a job and maybe looking at a screen, but you also have to be curious enough to look at all angles from a story. If you just get caught watching Fox News or or MSNBC, you're not really changing your brain. I think the point you're making, so let me use an analogy and just say, you know, one of the great things about being a sports fan and especially using the Knicks, if you go back to Jaylen Brunson in college and you look at him today and you would have asked a million people when he came out of Villanova and was a second round draft pick, if he would become one of the top 10 players in the world, the answer would be zero chance. Like, he's not going to morph into that. And they would use the traditional things of, well, he's not athletic enough. He's short.
7:53 Like, he's how how is that going to turn into something? You still have people that said, you can't win a championship with your best player being someone like Jaylen Rose, even when he had evolved into an all-star. >> The thing is Jaylen Brunson got better every single year. >> that is the whole point of AI right now. And if you're living on the past when historically oil's gone higher and like people will say inflation's high and I'm like core CPI is 2.4% year-over-year.
8:23 You pick the highest one PCE core year-over-year which is going to be revised. It changed and Kevin Worsh has publicly said he doesn't agree with PCA cores being he's got a whole group getting together to figure out what they should look at. I I just think people in this dynamic side and as someone who grew up this way, I was trained to be a trader. I sat in front of screens minute by minute. If people haven't done it, I mean, you get caught thinking every single thing that comes out for a second matters in some big scheme. So, when people text me now and I don't have that side, I'm like working on AI and this happened to me when the PPI came out.
9:02 People were like, "Oh, stocks care about this." And I remember saying like, "What are you are you kidding me? What what do you mean they care about this? >> But is that an opportunity? Like is it is it almost like hey let let the market react to the old world you know economic data points etc. And then you could almost arbitrage and say I have a medium to long-term view on these and so when they dislocate based on these short-term metrics just like have emotional control and capitalize on it.
9:30 >> Yes. So he this gets into the market structure thing and I believe we've talked about this before and I think everyone who works on Wall Street will laugh at this. Everyone who works at a hedge fund and having done it and having people work for me, they really are measured in many many ways minuteto minute like they have a draw down level which means that if something happens in their portfolio and it draws down 50 basis points on a day when they're running a market neutral portfolio and they they're only allowed to have a 5% draw down. Well, they've now lost onetenth of what they can lose.
10:07 Will it affect their emotion? Of course. and they start extrapolating that this could get worse. What is happening in the market structures? I think you should break it into three simple buckets. One is there's the active traders that have a a draw down level where their capital will change and their kids won't be able to go to private school anymore. You have AI agents which don't have any kids and don't care about anything and their job is just to make money. They don't have the emotion that or the the the bars that that they have fixed rules but they don't have that stuff. And then you have retail traders sitting at home or anyone that has a longer time horizon that doesn't have to respond to oh the PPI.
10:44 And that's to your point. Now that I'm in that crowd, meaning I'm managing my own money, I want bad news to happen at a time when people are panicking, especially when it comes to crypto where I think we're at the beginning of a mega bull market. It helps me to be able to get entry points into things if these guys are worried. I think the agents do respond to what the hedge fund people are reacting to. Meaning, oh, historically, if the PBI comes out a little bit hotter and rates go higher, then we need to sell stocks. And the agents go, fine, we're going to sell stocks, too. We're going to jump in front of you. But then the next day, the agents don't care about what happened the day before. They're looking at what's going to happen today. What are the hedge fun guys doing today? Okay, I'm going to go buy in front of them.
11:22 And I think this is becoming a a very dangerous game because when I talk to people who are still managing money, the market, they complain about it. It's not easy to trade because you're getting these herkyjerky moves every day and there's no consistency. And so my belief is that we are in a speed of a game that has changed dramatically. And the people that have the big advantage now are the people that can look through it and say, "Well, I know the earnings of the S&P are going to be up 20% next year." So, and I know there's not going to be a recession. I know rates don't matter. I know oil doesn't matter. So, if these guys are going to over overreact to this stuff, well, it gives me a better entry point. I think that's what's happening for a lot of different people in the marketplace.
12:01 >> Are the Bitcoin and crypto people better suited to invest today because they've been through so much volatility in such a short period of time? >> Yeah, it goes further than that. the question I get asked most by people getting into crypto now that I've spent a lot of time there is how do we value it? And I've started I'm going to write a paper this week or I already I already wrote 75% of it. I had to do a lot of research. I had to find a person which I did and I'm going to show it on the video this week who went through a metric and the reason this person was interesting he he's part of the Ethereum or was I think he's still part of the Ethereum foundation. He was also part of the Salana whatever it was foundation.
12:45 the interesting part is he really talks about valuing and let's just take Ethereum because that's where his focus is as the ecosystem and its most similar comparison is the internet. And so regardless I don't like people getting into philosophical debates. I'm old enough to remember the way people valued the internet back in the '9s. And people have to think about this now. Most people that we're talking to were not trading during the '9s. During the '90s when the internet started and when we led into the dotcom bubble, the way they were valuing Amazon was eyeballs. And he mentions like we didn't have metrics back then. And he goes through like it was eyeballs, it was clicks, it was a bunch of different things, but it didn't mean anything. Now he was involved with Napster, so he's an original peer-to-peer person. That's what makes his angle so interesting. I also think he's very academic and boring, which is why whenever I've asked people in crypto, they don't either they've never heard of him or they've never followed him. I listened to him. I went, "This guy finally hit on it." Like for crypto to be valued as something, we don't know what the metrics are going to be. And we're starting to see that with Robin Hood chain. I >> what's going on there?
13:59 >> We're the volumes are picking up. Everything is starting to go with tokenization. And again, if I go through the this year, the importance of the ecosystem and I think of pers, I think of prediction markets, I think of all of the things like SpaceX, what its valuation was before it went public and how quickly the market kind of migrated around to it. This 24/7 active trading and what Robin Hood chain built on Ethereum is doing through Arbitum is literally saying we're at the beginning of tokenization. Like we're we're literally at the beginning of it. Now, we've talked about it a lot and I've said that the network effects will kick in if you take what's happening now and the person's name that I was referencing and I I I don't know the proper way to pronounce it, but William Goyabber.
14:45 Okay, if you go back, he was on a he did a TED talk somewhere around 2015. I asked Chat GPT from the transcript to go through and say how much of what he said back then about the blockchain, it was all on the blockchain is correct. and it went through and said his vision of what was happening was about an eight and a half out of 10. If we drill down to each separate component, it's about a five, five out of 10. But 8 and a half out of 10 for the general thing of the importance of the blockchain and what will happen eventually over time. And so the Robin Hood chain, fast forward 11 years, that's what's going on right now. like we're starting to get to the point where tokenization is happening and even though it's being driven predominantly by memecoins at this point in terms of the volumes that's what should be happening and I mentioned bucket last week and I said this is a memecoin but with other component parts of the programmable side that people should be paying attention to because it's a leadin to what is going to happen more and more on Robin Hood chain. So for me in thinking about the crypto side and what's actually gone on, I again believe that people that were trained in crypto, number one, they deal with speed. Number two, they deal with quote unquote pump and dump or things that move a certain way. They get used to the volatility.
16:00 They've been bred on it. But the other thing is how do you value a market, the S&P 500, in a world that of exponential as opposed to linear? And that's why when you go to my website and you go look, I've got a V for Visser. The left side of the V is linear. The right side is a parabola. And the reason it's a parabola is because when things start changing quickly, the only people, in my opinion, that can deal with the movements are people that have been trained in trading in chaos. I grew up in emerging markets. I think crypto is a very similar thing. This episode is brought to you by Lava. The Lava card is the first credit card that allows you to earn up to 5% back in Bitcoin on every single purchase. Most cards have steep annual fees and unclear points programs, but the Lava card offers a much better deal. Earn real Bitcoin every time that you spend. Plus, there's no annual fee. There's zero FX fees, and zero spread when you spend internationally. On top of that, Lava gives you access to a Bitcoin line of credit, yield on cash, instant stable coin deposits and withdrawals, on and off ramps to and from your bank account, and much, much more. With Lava, you can borrow against your Bitcoin at the lowest rates, earn yield, move money globally, and stack Bitcoin with each and every purchase you make. Most financial services squeeze you with high fees, confusing rewards programs. Lava keeps it simple, and they help you build your long-term savings via your everyday spend. Visit lava.xyz/p to get started in just a few minutes today. lava.xyz/p to get started today. Robin Hood chain is like explain maybe just in a little bit of detail what exactly is happening there and it seems like they really have pushed themselves to the frontier in terms of they now I think make more revenue off of the prediction markets than they do off of stocks. They have really doubled down on agentic trading.
17:50 I think public many others have done that as well. but it does feel like Robin Hood, which started out as like come buy stocks and don't pay a commission, was pretty dead square in the center of like traditional finance. And the like challenger type attitude was around fees. >> Mhm. they have completely migrated to like let's be on the frontier of the products we offer and how people interact and and has become almost more of a challenger you know type neo bank or like fintech than where they started which is very unique. Usually you start off as like the most extreme version and then you become more of like the man, right?
18:30 They seem to be going the opposite direction with at their size and scale seems, you know, a little bit unexpected. >> Well, let's go back to the title of my research. AI crypto macro nexus. So, what's the macro part of Robin Hood? Well, it's the original stock trading side. What's the crypto side? Well, now we've got Robin Hood chain. What's the AI side? Well, we have the Agentic plugin that's going to this. I think what Vlad has done and he spoke this week at at a Goldman Sachs conference.
18:59 You mentioned some of the numbers. They are, and I wrote a paper on this for people who are in the traditional finance world. Robin Hood is the company to go look at to figure out what this means in terms of this merge that's happening. It's the problem that people have is how do we value this? Well, tokenization is something that you and I have talked about and it is probably the I'm at Freedom Tech next week. Are you going to Freedom Tech? Okay. I'm looking forward to doing my presentation down there. And the reason is because when I put the slides together, one of them is about this bridge being built right now. And tokenization for me is the bridge between the two worlds because Robin Hood has a community of traders. And I mentioned last week that when I went to a Robin Hood event last year to speak on a panel, I was blown away by the community aspect. Now, this is after I had been at your event. I'd been at Raul Powell's event and I saw this community which was very different than events I went to on Wall Street.
19:56 There's no community. It's literally like you put a bunch of people to get together, they want to kill each other. It's it's a competitive world. While a community of Robin Hood, of crypto is very different. And so, I think Robin Hood merges not just these technologies together, I think it merges this community aspect. And it's very easy to take the community that is trying to make money as a group trading on stocks. They don't care whether it's Palunteer.
20:21 They don't care whether it's Micron. They don't care whether it's Ethereum, whether it's a meme, whether it's Bucket. It doesn't really matter to them. They're just trying to make money. And they're doing it in a way. And Robin Hood has, yes, they've changed their business enough that the reason I wrote a paper on them was they got a couple upgrades last week. and specifically Morgan Stanley publicly upgraded the stock. It was not based on the crypto revenues though. It was based on other things and the fact that the company was becoming a little bit like Apple, meaning multiple service revenue streams. And I think that's the thing to go through when you go back to the William Goyabber stuff. I believe that we are leaving a world of revenues and we are entering a world of two things that have value. trust and that's where Ethereum becomes really important. It's where Bitcoin becomes really important because I think in a world of AI people are underestimating the amount of hackings and the lack of trust that will be there and the trust that a company will be here in a decade and we can talk more about that with some of the things with Astra. But I think terminal value is declining. So trust is number one.
21:30 The second thing is velocity of of of it's the flow. It's the volume. It is just the mass of speed. And AI agents get a hell of a lot more done than humans. So, we're leaving a world where human beings were doing the trading and doing the consuming and doing everything. And we're getting to one where AI agents are doing more and more. And so, Robin Hood is built for that. You mentioned the agentic trading side.
21:53 I just did a video which is going to go up on my subscriber wall this week to teach people how to build and back test a model using a a a GitHub code that I put together that they can then pull in, stick it in their own LLM and then back test something to create a signal model and I go through a training episode of how they can do this and where the edges are for the humans and where the edges are for AI so that they and I think retail traders are very good at this so I think it's going to work well but then take that information and plug it into Robin Hood. And it's not just Robin Hood. Mumu has this. Interactive Brokers have this. Like the Agentic side where you can do it and you can paper trade it. You don't have to put money in. But I think it's really important for parents to have their kids do this because doing this type of stuff is the beginning of training your children on how to be entrepreneurs. And I've talked about my son on this point. I don't talk about my daughters as much because they're in the healthc care field.
22:46 They're helping people. My son's going to be more of an entrepreneur, but he's using agents daily. And I think for parents out there and everyone, what Robin Hood is allowing you to do is actually become a training ground for building stuff. So, I think of Robin Hood definitely in kind of the Apple App Store place, multiple revenue streams, and it's expanding not just with prediction markets, but also with what they've been doing right now with the trading side on Robin Hood chain.
23:09 >> You mentioned earlier that you think crypto is on the cusp of a very big bull market. Is that a in the month of September type thing? Is that a through the end of Q4 we should expect this? What how do you think about timing for the next great Bitcoin bull market? >> Well, I and I hate I hate for people to have to sit there and acknowledge it this way. So, quarter to date when we come to sit in here the best performing asset by far of all the major assets and I I'll say major assets by anything that's worth that has a valuation of let's say more than a hundred billion.
23:43 Ethereum is by far the best performing asset. Like not even close. it's I think it's almost double Bitcoin quarter to date. While the S&P 500's around flat, NASDAQ's around flat. So we've so far had Bitcoin and crypto outperforming for a quarter while stocks have done nothing. I think that's good. That's very good. But the importance of that is the low correlation. But it also means the next thrust to me stocks will go up with crypto with it. So, I do think we're at the beginning stages of getting away. I have been very surprised at how I don't want to say negative, but how little people want to embrace this. I don't hear crypto people as like uber bullish. At least, let's say the regular people that I talk to on a they're they're skeptical because >> the crypto people are skeptical about Bitcoin and crypto's recent rally.
24:38 >> Well, that we're not going to retest the lows first. >> they're they're worried that we will. >> Yeah, they're worried that we will. And I guess that makes sense. That's the way it should be after a bare market. >> They got four cycles psychosis, you know. Yeah. It's like, hey, October's the bottom. That's what they've that's what they've been told. They line up their charts. I get it. I you know, I'm starting to lean more towards how important the Clarity Act situation is. Not it's not going to stop what's going on regardless of what happens cuz they're going to put rules in place. But if anything positive happens on on clarity and it's funny you you go into X you read Brian Armstrong you read you know I forget Patrick's name what's the >> Patrick Whit I mean they've been very positive this week that it's going to surprise the prediction markets which are below 20% it but I think that's for this year we if we got anything positive on clarity I think crypto would go up far faster than people realize >> big 100k if we get clarity Yes, I that that type of move to me and the reason I say it with conviction, the more I'm talking to people, let's say traditional finance, so related to the banks, cuz remember the banks are out there telling people they're ready for this, they're going to be involved, you know, all this stuff, tokenization, pension funds need regulations for this.
25:57 And so for the ecosystem as a whole, which is really the most important thing to me, Bitcoin can keep going higher and it can drag a little bit of glass on here. Bitcoin can rally high. >> You ever seen someone get wounded on a podcast? You just did. >> It's all good. if clarity goes through, I think the ecosystem will be valued higher immediately because I think this opens up investment from pension funds, which are critical to the overall size of the money coming in. I think they need regulation. I think they need something to be able to again they're fiduciary.
26:37 They can't just jump into something. Bitcoin has been around long enough that they can do that. But I think investing in the ecosystem, which is what the entrepreneurs need. I don't think it's a venture thing. I I think it's a pension thing. And I I think if clarity goes through, it's a big deal. It does feel to me like clarity can't hurt and not like by it not being passed it can't hurt but it would be a a net new buyer entering the market or at least getting more excited and kind of sending us upward. on AI there's been a ton of stuff that's come out. GPT live one I think it's called like the voice Astra got released. we got a whole debate as to whether OpenAI was unethically looking at mathematicians potential solutions to these century old problems. we have a guy who got a job at Anthropic for 6 weeks, quit, says it AI is going to kill everybody, but then somehow he's part of like the Doomer crowd and they're all retweeting him and like piling on. Seems kind of like a scop, but unclear what the hell is going on in AI.
27:41 I mean, there was like a year's worth of progress in the last seven days. >> Well, and you not only have that, I mean, Paul Tudtor Jones wrote an op-ed in the Wall Street Journal and I think I think Greg Jensen from Bridgewater also came out again on the risks with AI and how I think the I think Jensen's thing was it's going to kill people. Jensen said that. >> Yeah, I've seen the news today or something. here here's the thing.
28:09 I am a person that believes that any progress in AI from this point, we should be expecting there to be problems. I mean, I don't know if you heard the Boston Scientific News this week, but they had a hacking and they basically said they're not going to meet their earnings numbers for the rest of this year and they had to take them down and had an impact on some other stocks like Striker. and then there was a power plant hack in the UK. and I think we got some information on Iran's plans on hacking and everything.
28:44 >> This is a crazy story. Yeah. So, first of all, I'm an investor in a company called Galvanic. I'm going to give them a shout out. somebody who worked at the White House left and his whole thing was we need to secure the critical infrastructure in America from cyber attacks. And when he first started talking about this a couple years ago, people are like, "What are you talking about?" He's like, "Yeah, water treatment plants, you know, power plants, whatever."
29:06 Josh Steman looks like a genius right now. Like do not go short Joshua Stein. so that that's on the power plan stuff. This Iran story is almost literally you couldn't put it in a movie. So for those who don't know, Iran was supposedly taking their war plans, the Ayatollah's funeral plans, targeting lists of people, spreadsheets, all this stuff, and they were feeding it to Claude. Now, it does make sense like if you want superhuman intelligence, it's probably smarter than anyone in Iran cuz it's smarter than anyone in the United States. So, like, okay. but then Claude was like, "Wait a minute. We're not going to let Iran use our computing intelligence to then plan killing people or all this kind of crazy stuff." So, they had the plans and I'm assuming they turned it over to the government. Like >> that's kind of the same thing that OpenAI is being accused of on the mathematician problem of like oh that's you guys going to solve that century old problem. It'd be a shame if we figured out the exact same way to solve the problem which I'm not saying that they did it but if they are training the model on the questions that are being asked and then all of a sudden they solved the problem.
30:22 >> It does feel like privacy does feel like data security does feel like owning your own intelligence is going to become pretty important here. All right. So, we've we're for anyone who either doesn't know these stories or doesn't know the importance of both of them and especially the the Navier Stokes part. if you're living in a world talking about oil and interest rates going higher, again, I I ju I just want to say we are so far past everything now. I asked Chachi PT what the IQ of Astra is because I used Astra on on lab on Labor Day and I built a model a signal model and it led me to doing the video that I mentioned and the reason was that I was blown away with the step function change in this. Now I had talked about Crockbot for two weeks here. Astra took me to another level. So these stories that are coming out, whether it's the doomer story or whether it's the progress story, the reality is AI is here and it has a huge impact.
31:22 When you go through the astride and I listened to an interview with Greg Brockman on TBPN, where when you listen to it, basically we've reached the point where okay, we used to have chat and we had openclaw. Then we had chat, co-work, and openclaw. Well, now we have co-work and claude code and claude chat. What Brockman said is basically everything now is inside chat GPT.
31:56 what happened with what they did and I think people should spend time on the Navier Stokes thing from and if you listen to Moonshots from this week they go through everything but 100,000 GPUs I believe that's what that number is now 100,000 GPUs so this was brute force and this gets back into like anyone who thinks open source is going to compete with the brute force to get you know a century old formula math problem figured out leading to physics problems that will be solved. And when physics problems, if people really want to spend time on it, which I did this morning for a while, we talked about it before we sat down. I mean, we're talking about terminal value for the S&P 500 changing for any physical company, any mining companies, anything. Now it won't change it for the earnings for the next 3 years, 4 years, but 5 years and out, as I keep saying all the time, I think you have a question of whether these companies that are doing old traditional things of mining are really going to be able to make money ever again if we've got solutions that get down to physics and get into things for the heart and things for drug discovery and thing everything that you can imagine. And that's why you have to spend time not kind of reading about Navier Stokes but just going to chat GPT and say what does this mean for the world and I'll have a slide on that in there from my own exploration for 30 minutes to learn about it. So AI is moving so fast and the compounding of these models is going at a speed which is unbelievable that when Jensen Yuang goes on stage and says congratulations to Open AI on hitting AGI.
33:39 Imagine in a week where a Jensen Yuang, >> godfather of AI, >> says, "Congratulations for reaching AGI and the front page of the stock market has Besset saying, "I am the house on one side and on the other side you have everyone panicking over rates and oil." The week that Jenzen Wong says that in AGI, everyone's worried about that. And that is the reason why I just think for people that are using what's happening on the news and what's happening in the market, the S&P 500 is unchanged or at least as of yesterday, it was unchanged since like June 2nd.
34:17 But we've made all this progress in AI. We've solved all these things. We've jumped. The market's completely mispriced relative to the progress that's happening. And that means that it's like keeping a water on or ball underwater and at some point it explodes higher. And that's why I said I think crypto as just a segue into why it'll go higher. Well, it did really well when stocks couldn't move and all these panic fears when what would happen if oil went down for a week and rates went down for 5 days and we got the rate hike and everyone's like, "Okay, now what?" It's like the midterms, Jordy. The midterms are going to kill this and the Dems are going to win this and data centers are going to be I'm like, "So, I guess the day the midterms are over and you turn around and you've been worried about this, what are you going to say when the stock market goes higher?" Like, sometimes the Trump paid for it. That's what they're going to say. They're 100% going to say, "He he said he's going to give out stimulus 100%."
35:08 Sometimes having done this a long time, the best thing for the market >> is just getting through the events and having what was expected at this point. >> The Dems are expected to win >> everything regardless of what people say. At this point, the market expects the Fed to raise 25. >> Mhm. >> Okay. That's what's expected. >> Do you think it's going to happen? Do I think they'll raise 25? >> Yeah. >> I I don't think it's a 70% chance. And >> 81% on poly market as of this morning.
35:36 25 basis point. take I so I'm going to I'm going to say I don't think it's going to happen. I'm also gonna say I kind of hope it does happen so we can just get rid of it because >> I think the more likely scenario or the one that's the most bullish for the market because if he doesn't go it just leaves up that he could go forward. if he goes and basically says okay we I did this because the committee is split and because I felt like the arguments were towards this side as an insurance and I believe it's better to do 25 now and get ahead of things if they keep going to open up the possibility but I don't think we're going to do any more.
36:24 So basically a dovish hike that would satisfy the Fed credibility. It might help the long end of the market. It would give people something. I don't think it matters. Like I said, I don't know why 25 basis points up or down matters to anyone as long as earnings are growing. And unlike 2022, and every time I see someone in the market do this, 2022 was a very unique situation. We were coming from incredibly low rates. AI was not a part of the equation. So we didn't have this massive capex and earnings boom based on that.
36:59 We were coming out of a recession obviously and we had inflation up at 10% or nine and change. Now we've got core inflation at 2.4% in terms of core CPI. We already have rates at this level and we were going the debate wasn't 25. It was do we go 50, do we go 75? And so we raised rates really quickly in 2022. And then once we slowed down and basically came to the end, that's when you wanted to buy stock. So I just think the best thing for the market would probably be raising 25 with some kind of dovish message that this was an insurance thing. And since inflation is already on the low side there, but it would not surprise me if behind the scenes the pressure from the White House and what Donald Trump wants. I think we all make mistakes when we start fading what Besson and Trump are going to do to make sure what they want to have happen happens. Today's episode is brought to you by Token 2049. The largest conference in crypto is back. Token 2049 will host 25,000 people, 300 speakers, and a,000 plus side events in Singapore on October 7th and 8th at Marina Bay Sands. The speaker list is absolutely stacked. Shane Copeland from Poly Market, Jeff Yan from Hyperlquid, Adena Freriedman from NASDAQ, Arthur Hayes, Bellagi, and Eric Trump. Crypto and traditional finance in the same building, which tells you a lot about where this is going. And the conference runs right into F1 weekend, so the whole thing turns into one giant week. If you're headed to Singapore, use code POMP 10 for 10% off your ticket. Token 2049, October 7th and 8th in Singapore.
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39:42 That's simplemining.io/p. Go check it out today and see if you should get into the mining game. If they raise rates, I will understand why. If I'm a betting man, there is a negative% chance they're cutting or they're raising rates. And it all falls down to we are going to learn a lesson that we have learned in the past, which is the Fed is not independent. And the same reason that Jerome Powell cut rates right before the election is going to be the same reason why I don't think Kevin War's going to raise rates right now. And if you have a job, you got a boss. And if you got a boss, you may say you're independent, but you kind of listen. You may even argue back, but the message kind of gets through.
40:30 And so, let's see, right? But if they raise rates, I will understand. I I think that the data is, you know, kind of iffy and there probably is going to be some disagreement on and there has been disagreement at the FOMC, but I do think that the politics of it all is heavily mispriced or misallocated in terms of its importance. >> So, let's go let's go back this way because I I again, let's say there's three possibilities. There's the the Trump pressure one. Doesn't raise.
40:58 >> Okay. >> There's the Okay, fine. I'm going to raise, but I'm also going to be dovish. >> Mhm. >> And then there's the third one, which is I'm going to raise and be hawkish. Oh, >> there's a fourth. What if he cuts? >> Okay, let's leave that one alone. We'll put that at zero. >> Bitcoin to a million. I I think if I was going to say then if though if we I think you can take one and two and and put them together because I think a hike with a dovish message is the same as in fact I actually think it might be better for the market than not hiking because to your point I think the Fed credibility thing will become an issue and the question is what does that mean? Now, if the dollar falls off and everyone goes through this, fine. But if rates shoot higher because he doesn't cut because he doesn't raise, I I think that might be a bigger issue. But let's assume that the first two are the I mean, I'm guessing that those are 90% when combined. I don't think I don't think raising rates with a hawkish message.
41:58 >> Yeah, I don't think that's >> I I don't think it is either based on the data that we've had over since the last meeting. >> I don't think it is strategic for them. I don't think the data supports it, nor do I think that's what they want to do. Correct. Right. So, it's like you're kind of three strikes you're out on that. it's an interesting way to think about maybe raising and being dovish is the same as just leaving. but you may get an advantage from it.
42:19 >> let's see. But, you know, I don't know if you got the message. we are the house now. >> I mean, did you hear his his commentary this morning? >> No. >> Or maybe it was late last night, but it was all over X today. He went on Steve Bannon's war room of all places >> and he said, "If the Bloomberg terminal bros are upset with me, then so be it." >> And he's just like, "Look, I'm going to do what I'm going to do. I kind of don't care." But whether it is the commentary around the Edmonton submarines when he was talking about Canada, the Bloomberg terminal bros, I mean, this guy is a all-time communicator. And I think that he's been rubbing shoulders with Trump for a while now cuz he is definitely finding his you know his voice if you will.
43:05 >> I I I mean I I lived in the world of Wall Street. I've known Scott Pesson a long time or at least known of him a long time and I have had many many people talk to me about him. The same thing with Kevin Walsh. >> work with many people who worked for them, been around them. This is not the Scott Bessant that >> he was not an elite talker forever. >> I mean, I I remember before he got the before he got the job when we were talking about if he got the job, a lot of people were saying I don't know if he'd be able to handle which Trump's going to go. I think actually he's incredible.
43:42 >> He's become in many ways. So that's why I I do agree with you that and it's the reason why I think when people are challenging like rates, it's not that I 10ear rates to me should be 200 basis points higher. Okay. Now, that is not what the administration wants and it's not what the Fed wants either. And I say that based on well, what's the the point that we'd actually be restrictive on the economy? And I think tenure rates need to be significantly higher to be restrictive.
44:16 In the past, tenure rates were about 200 basis points above nominal GDP. Well, nominal GDP is 6%. So, theoretically, you should be eight. Now, that all changed in 1997. And in 1997, we went below during the Asian financial crisis, and we never got back above except for periods of time when nominal GDP collapsed during recessions. When nominal GDP was stable, tenure rates were always below it. The reason I say it should be above it, well, we no longer are depend. This economy is not dependent on autos and housing. Like I can't say loud enough to people, this is not an interest rate sensitive market.
44:52 >> If rates at higher level, everyone that has cash is getting more money in their bank account. And so we're just at a point of time where transfer payments are huge, meaning the government is handing out money to people that don't have enough money. And then at the on the other side, the AI trade has nothing to do with tenure rates at this point. And I can't say this loud enough to everyone who listens to doomers and all this stuff. Well, they need to go borrow money.
45:19 That's ridiculous. I mean, it really is ridiculous. I am the unofficial president of the Scott Besson fan club. And you know, Mr. Treasury Secretary, if you're watching this, talk your I I love it. I I think it's amazing. I think that he does calm the market compared to, you know, Trump's kind of erratic craziness sometimes. And I actually think that they are a pretty good duo because it's kind of like carrot and stick to a degree. Yep.
45:46 >> Although Besson maybe is, you know, he's developing a stick in that he is the house now. but if you go and you look at the other side of this maybe kind of private sector, you know, man, they really need the entrepreneurs and the AI companies and you know, the data centers, etc. perform and in a very weird way there's an unofficial public private partnership that is attacking the problems of the US economy >> and the private sector is doing a damn good job of getting this technology out creating you know jobs and growth and productivity and revenue and earnings growth and like all the things that actually are providing a lot of relief for the Treasury Secretary the Fed you know they would be in a much more dire situation if they did not have the productivity gain and the technology innovation that's happening. And so I think that the macro people really focus on like reading the tea leaves and you know kind of playing the you know astrology for men game of like what are they going to say? What are they going to do?
46:48 >> Mhm. >> But damn that private sector is rocking and when you look at it holistically I don't know. It's pretty hard to be bearish. >> Well here's here's the thing you said that I think people should keep in mind. So, let's just say you've got Trump and you've got Besson and we're saying that they're aligned in their thinking at this point. Okay, great. Besson also said this week the US cannot lose the AI race to China. So, when you're betting against AI or you're saying I think it's a bubble and go and like okay, you're betting against Besson and Trump who are literally saying we're going to win the race with China because it's too important. At the same time, every AI person is in direct conversation with the White House.
47:33 >> They have rooms at the White House. They literally live at the White House. >> Exactly. >> These dudes are there every week. >> Yeah. And and you can call it what do you want inside? I really don't care. But why would you bet against this? Like why would you be fighting against it? Now, there's one other person that matters. Kevin Worsh. They not only chose Kevin Worsh, they in his testimonies. First of all, he's pro crypto, pro Bitcoin, he also believes in what Greenspan did and believes that AI is a changing technology to where the Fed has to change.
48:08 >> Mhm. >> So, when you put it all together, the people who are bearish, number one, they seem to be betting against AI. And I'm telling you, they don't use it. If you want to be bearish because you think it's going to end the human race, I get it. Like that is I don't get that. Okay, but that's fine. If you want to do that, the reason I say I get it, they're basing it on the fact that AI is getting too strong.
48:29 >> Mhm. >> If you want to >> They're like but they're almost bullish on AI and they're like they're the most bullish people. >> Yeah. >> It's cuz they're the ones who think that it's going to be so good that it gets out of control. If you want to bet against it because of the arguments of Michael Bur and Jim Chenos from a year ago, a year ago, where they said this is a bubble because they're saying these chips will have a lifespan of it's not there's no way. Well, the H100s, go look at the price that's happened year-over-year. They're higher than they were back then. So that is like saying that people get younger every year because there's a depreciation on this stuff. So when Gavin Baker, and I'll be covering this, like when Gavin Baker goes in there and says, "Do you realize that everyone that owns these chips running basic a data center, the compute prices today that they can sell at those things is higher than they were a year ago. And these chips are costing more. So if people want So they basically bought food a year ago before an inflationary spike and they're able to market these at higher prices cuz all the other restaurants right now are charging higher. So if people don't understand what that means and Gavin Baker talked about it, he believes that the cloud providers, so the guys that are spending all the money and taking all the debt out, he said on Patrick Oshan's podcast a month ago, and that was a month ago, H100s are higher than even when they were back then, that you'll be shocked at how quickly the cloud providers will start to have profits coming through, not just from new data centers coming out, but from the fact that the compute prices that they can charge are higher and their costs are actually lower on the existing stuff they have. There's so much in this that again you've got the administration saying we're not going to let this not happen. You have Worsh Bessant Trump aligned on the same thing believing in AI and believing in crypto and you have market participants that manage lots of money all the world's money worried about things in a linear fashion. The reason the market isn't higher is because of the worries people have. No question about it. And I want to end with one more thing on this that I I started talking to people about this week. The beauty of Bitcoin at this point is this magical number for me of $2 trillion.
51:01 So Bitcoin's around a $2 trillion asset. You know what else is around a $2 trillion asset? >> Your bank account. >> SpaceX. Anthropic. And I think after Astra, I think open people are probably missing the boat on OpenAI at this point. Let's assume they're all worth two trillion. Isn't that an interesting part of where the market is? You have four things. None of them make money. And I throw Bitcoin into it. Doesn't make money.
51:31 These other three, let's assume they're two trillion. They don't make money at this point. They're spending the two companies that have, you know, their ARR looks great. They're spending a lot more money than their monthly number. and SpaceX. It's it's a thing based on time. That is $8 trillion worth of things that in my opinion are so important to the future. And people are still talking about the level of the Fed funds rate and oil. You are not adapting to where the world is today. You are still left in a world of 20 years ago. I won't even say 10 because you have to go back before the iPhone. You have to go back before the iPhone because all of this stuff should have been washed from people. It's the reason why I tell the story all the time. I went to Silicon Valley in 2013 to answer the question, how can Amazon up be up 17,000% since 1997? Yes, I want to say that to everyone. The stock at that time when I went there was up 17,000%.
52:33 And it still was really not making money. Now, it was in 2013, but it wasn't really in 20 in 2008. And I went out there cuz I'm like, how can this thing always make new highs after it falls down? It's a bubble. It can't possibly be real on the metrics that I know. How can this be real? And I went there and Singularity University changed my life. And I never thought of the world that way. You have to go back.
52:57 These people are telling you the world is going to end. That's the reason they go back to the.com bubble because it's the only period before technology actually was working when they can find a time in history where okay, this is a bubble. I will hope that those people have a great day. I hope that they enjoy themselves. I feel bad for their children's portfolios cuz it's probably not going to work out for them. Make sure you subscribe to Jord's YouTube page. Go to Jordiv Visser on YouTube. And if you have not yet signed up for Sylvia, go to cfosilia.com. We'd love to have you. You can use the latest greatest AI technology. It won't kill you. It'll help your portfolio. Go check it out at cfosilia.com.