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Studio Prometheus, Grant Stoddard, Ryan Pallotta
Making sense of the stories beneath the headlines. We bring you experts to simply explain what's happening around the world, and current events in business, finance and technology.
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US debt ceiling debate, increasing interest payments, inflation, Biden's strategy, potential implications of default discussed.
(0:07:43) - Fed Tools and Tech's Economic Impact
US debt ceiling, Fed tools, 'printing press', GFC, human trust, and technology's speed are discussed.
(0:13:12) - Chat and AI Transformation Power
Chat GPT is a transformative technology used to facilitate projects, create content, and quickly assemble syllabi.
(0:21:40) - AI's Implications for Productivity and Investment
AI and GPT are transforming markets, accelerating vaccine development, aiding professional investors, and helping retail investors access alternative data.
(0:27:19) - AI and Blockchain Power and Potential
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Crypto assets, fraudulent activity, adoption of crypto as payment, and AI/chat GPT are discussed in relation to the potential of a Ponzi scheme.
(0:41:47) - Crypto Investment Future
(0:48:52) - AI and Trust in Banking
(0:58:33) - Python, Creativity, and Health Hacks
AI, recipes, investing, diet, breathing, mind-gut connection, and virtual reality are discussed to help users become more creative and age gracefully.
(1:16:30) - Household Deposits and the Economy
(1:23:31) - AI and the End of Scarcity
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Marko Papic leads Clocktower’s strategy team, providing bespoke research to clients and partners on geopolitics, macroeconomics, and markets. Prior to joining the firm, Marko founded BCA Research’s Geopolitical Strategy practice (GPS) in 2012. Marko began his career as a Senior Analyst at Stratfor. He holds graduate degrees from UT Austin and the University of British Columbia.
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0:11:44 - Fed Cuts Rates and Consumer Response (68 Seconds)
0:14:38 - Inflation and Interest Rates (60 Seconds)
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0:24:22 - Impact of American Elites on FOMC (90 Seconds)
0:32:43 - Geopolitical Pornography and Containing China (53 Seconds)
0:45:34 - Emerging Market Commodities Bullish Case (79 Seconds)
0:52:46 - Debt Ceiling Debate (34 Seconds)
1:06:34 - Lakers vs. Golden State (69 Seconds)
Follow Marko Papic on Twitter https://twitter.com/geo_papic?lang=en
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https://twitter.com/Jkylebass
TRANSCRIPT
Ryan: [00:00:00] One. Thank you for joining us today, Kyle, you're one of our most popular guests ever. I think the only episode that came close was what about like the SV banking crisis? So it took a banking crisis to get close to your popularity and streams.
Kyle Bass: So,
Ryan: So the first thing I wanted really talk to you about though, is a little bit of an update on all the amazing work that you're doing. And we, before we started recording, what I was talking about was like, how it's almost like. The perfect business. It seems too good to be true. You're saving the world, you're helping endangered species.
You're an environmentalist at heart, and you're able to bridge that with your background in finance, I'd really like to hear about this black rail bird habitat that you guys are creating and how that came to be. If you don't mind talking a little bit about that for the audience.
Kyle Bass: Yeah, sure. So, you know, o one thing that that I would say people I was not aware of throughout most of my life is when you have development and mostly industrial, but you could also be commercial and or residential. But typically when you are developing [00:01:00] something that has a large footprint, whether it be an LNG export facility or SpaceX or.
Or you're widening a port or anything that you're doing, building highways down, near down near coast coastal areas invariably you're gonna be impacting and sometimes ruining habitats of endangered species or even endangered species migratory PA pathways. The ocelot cat looks like a links or a bobcat, and it, and it migrates.
Through South Texas in New Mexico. And if you were to build a highway let's just say longitudinally across that habitat, invariably those those cats are gonna have to cross a highway, which is a terrible thing. So there are a lot of things that the, the impactors, whether it be the Highway department or the industrial impactor, when they have to build such roads or such facilities, US Fish and Wildlife and the Army Corps of Engineers, two federal agencies have to come in and decide.
much of that habitat you might be ruining. And if you ruin those habitats you either have to go [00:02:00] build habitat nearby and permanently conserve it or leave it to the experts that build those things and permanently conserve them. And those experts will sell you credits. So the, the beauty of this is you get to charge the impact or a pretty penny for their impact, and you create more of the habitat than that's being destroyed.
So it's a pretty good. It's a pretty good way that our government keeps ahead of habitat destruction.
Ryan: And for the listeners that may not know, so you guys are some of those experts and you have on your property, chocolate bay is where we're speaking about the black rail bird habitat that you'll be creating. So these are, this is an endangered species and when it's an endangered species, can you talk a little bit about how that works and how it's gonna work in chocolate bay?
Kyle Bass: Sure. So, at US Fish and Wildlife, basically determines what, what an endangered species is in this particular. Again, this, we're making a big deal out of this bird. It is a, it is, it is one species of many that are on the [00:03:00] endangered species list. But the populations do. The number of factors, including habitat loss and destruction, like we just talked about, coastal flooding, and popula populations of this particular bird have dropped 90% over the last few decades.
And so when it, when they get to a certain number they make it on to the endangered species list and, and It was, this was added at the end of 2020 to the endangered species list, which then once it's on that list, it requires an impact to be mitigated or handled through the US government. So again, it's just a way that the government tries to protect species from going instinct.
Ryan: And, you know, you, you and your team of experts, could you walk us through a little bit about how that would work at Chocolate Base? So you guys would create a, basically a habitat that would encourage their species to continue to thrive.
Kyle Bass: That's right. So, you know, we have you've been to the property Ryan. We've got about 5,000 acres of both upland and wetland area. And it's, it's one of the [00:04:00] largest privately owned wetland areas that's still left on the coast, anywhere near Houston and the Houston Ship channel. And that particular piece of property, what you do is you bring us fish and wildlife out you make the case that yes, this is a habitat for black rails, or it could be because it meets all the specifications of that particular bird, and you need an expert on that bird to come out and tell you whether or not the habitat is, is Is, is, is identical or let's say amenable to that species.
And then once they agree, they agree, we work closely with them to, to basically determine the various, how, how that needs to be architected, what it needs to look like, what we need to do in, in, from an improvement perspective to create that habitat. And the, they, they come out and measure our progress along the way.
And then when we're, when we're finished with it, . We will then put a permanent conservation easement on the area that we build for the black rail. And [00:05:00] once that's codified and, and legalized they will release credits to us that we better are then transferrable to people that are impacting that habitat.
Ryan: Wow.
That's incredible. Sounds too good to be true. And, and at this current state, is there a potential impactor that could. Affect the species and then have to pay you guys credits
Kyle Bass: Oh, I mean, they're everywhere. Basically you know, any, anyone, anyone expanding an L n G or, or train on the coast? The port. Expanding the port facilities or port landing facilities? The highway department building highways, as we mentioned. of those players are gonna be forced, to mitigate their impacts by buying these credits.
And so, you know, it's an interesting supply and demand scenario. You can't create a credit in near Houston and sell it to an impact or downward. SpaceX is in Boca, Chica, you know, hundreds of miles away. It has to be in the same. geographic region is defined by by the regulator. So [00:06:00] again, it's very specific.
You have to, you know, as you know, land prices have gone up a fair amount along with everything else on the inflation side of things. So you have to have the balance sheet, you have to have the capital, you have to have the know-how, you have to have the relationships with the regulators. It's, it is not an easy thing to do, but my partner, Terry Anderson, has been doing things like this for three decades.
and he and, and the rest of our call it on ground team, a biologists and foresters know what they're doing.
Ryan: Yeah.
he's a legend. When I met him, he was really passionate about what he's doing and he's incredible. So I love that you're working together on that. Could you tell me, are there any other updates around Chocolate Bay? You know, you're spending a lot of time in Houston there. Have there been any new updates regarding, you know, the infrastructure bill was a benefit for you guys?
Has there been any updates regarding
Kyle Bass: You know, things move slowly from the perspective of, of the Inflation reduction Act. Some things are moving quickly, like carbon sequestration and some of the new federal tax credits. Some things move a little slower. There were a lot of [00:07:00] grants for coastal wetlands improvement in conservation and preservation in the Inflation Reduction Act.
You know, you have to find grant writers. You have to be deeply, Ingrained in that kind of partnership, either with a local conservation authority or municipality. There's so many things that you need to do to get to the finish line there, and we are we're doing what we can. those, along those lines.
But where we're spending the majority of our time on Chocolate Bay Ryan is, we are trying to get to the finish line on the finalization of the, the envelope and the geographic outline of the, RIS Johnson wetland mitigation bank. As you know, we're, we are looking to do put together over 2000 acres of newly built and existing wetlands into a big.
Wetland mitigation bank where we put a permit conservation easement on it. The Galveston Bay Foundation is our neighbor. They own 5,000 acres immediately adjacent to us. They will be the overseer of said easement. And once we [00:08:00] get that in place we will be one of the few very large private wetlands left, and we will be able to sell those credits to people that are, that are impacting wetlands in the area.
Ryan: Well, it's such a beautiful property and like I think people don't even realize how stunning and massive it is until you go up in the helicopter like we did when we were there to see how expansive and how much wildlife actually is there. There are even birds that were constantly, I forget what the name of that species was, but they, it was, I think they were coming back.
Now that you guys are rehabilitating,
Kyle Bass: Yeah, the, the, we had a, we had, when you were there, we had a, a pair of whooping cranes, which are you and I, I didn't set eyes on them. I don't know if you did on your independent flights, but. The caretakers of our, of the property down there had seen them and those are endangered species as well.
And those ha we have their habitats on property because they were living on property I think you and I also saw those amazing pink birds. They looked like flamingos, but they were pink spoonbills by the thousands, and that was, that was phenomenal
as well
Ryan: Yeah. it's, it's so amazing the work [00:09:00] that you guys are doing and the fact that you're able to merge finance and that as well together is, is incredible. And next, well, I wanted to get into a little bit of, you know what, you know, you're pretty famous for talking about on Twitter right now.
You recently changed your avatar on Twitter to the Taiwan, I think Navy logo. It's a pretty amazing image. Can you tell us a little bit about what that image means and what it, why you wanted to change your logo
to that
Kyle Bass: Yes, sure. So, so at at, at the cost of a blue check mark. I, I think you noticed I guess the new, the new, the new laws or the new laws and regulations on Twitter are, if you change your profile photo, Twitter has the right to review that photo. So they, it costs you your blue check mark until they review.
So at some point in time in theory, they'll give it back. But I just, I saw a story about how the Taiwanese Navy and Air Force. Are sewing these patches on. So this isn't, this is not Taiwan government issued patchwork, but this is something that someone came up with in Taiwan. [00:10:00] And, and the, the funny thing about it, as you know, in China, anything related to Winnie, the poo is banned because there's a famous picture of president, she walking with President Obama.
And someone made the comment online that it, that it looked like Winnie the poo walking with Tigger. You can Google this and look it up. But ever since then, related to Christopher, Robin, Winnie, the Poo, a hundred acres, anything that has that kind of genre of animal is completely banned.
It is not allowed on anything in China. It's not on why.
Ryan: sounds like this guy's got a pretty sensitive ego. He has. He's a leader of one of the biggest countries in the world, and he's got offended
Kyle Bass: Yeah, so, so when you look at that particular patch, the, the, the funny thing when I immediately saw it, it, first of all, it's generating a lot of camaraderie and, and positivity amongst the. know, the forces of Taiwan, which are dwarfed by the forces of, of China. It's the Da David and Goliath battle. But it's, it's a very rare black Formosa bear. And Taiwan, [00:11:00] as you probably know, used to be called Formosa. So it's a black bear punching Winnie the poo in the face. and I just got a, a huge kick out out of all of the symbolism and, and all of the, let's just say all of again the, the epic battle thought that, that everyone has that unfortunately in a very dark situation, people find light and finding that light.
Put a smile on my face.
Ryan: Yeah, it's an incredible image when, we'll, we'll post it in the edit for people to see, and it's a, and it also says Fight for freedom scramble. So,
Kyle Bass: Well, there's another, there's another one too that says Open 24 7. Bring it when you're ready. Which is, which is pretty also pretty funny.
Ryan: So from your perspective, the, a lot of the, there's a lot of camaraderie around resisting any sort of attack from China, and you mentioned something recently in some press that you did where. You mentioned that in the last six years, and if you listen to anti X's p, sorry, X Jinping's speeches that he's always talking [00:12:00] about war and that we're on, that he's on the brink of war, especially in his most recent speeches that he gave.
Wh why do you think we're ignoring that so much? Or are we, and we're just not talking enough about it? And how close do you think we are to an invasion of Taiwan right now? Like how much has that changed in the last couple months?
Kyle Bass: Yeah. Great. That's a, that's a fantastic question. Um, Look, I, I've been following very closely, what Xi Jinping has, has been saying. What he's been writing in, in some of the official work papers for the the 19th Party Congress, which happened back in, in 2017. As you know, the party Congress has happened every five years. Uh, And then the two sessions, call it annual meetings happen, happen each year. And so when, when you look back to what he said in 2017, he talked about the. you know, the peaceful reunification of Taiwan. then from that day forward, things got less peaceful. And in fact they, they outlined in 2017 what would be [00:13:00] a triggering event for a Chinese invasion of Taiwan.
And, and back then it was the Declaration of Independence by any anyone in the Taiwanese cabinet. I, if, if any of the leadership says, we are declaring ourselves independent of China that would precipitate an invasion. What's interesting is you probably can, can imagine that as time goes on, the, the, the Chinese are moving the gold post.
Xi Jinping and the 20th, 2020 party Congress, the 20th party Congress, so sorry, 2022 is the 20th party Congress. He changed the rules of engagement and, and the triggering event to a simple refusal. of China's outreach to reunify i e if you're the, if you're the, if you're this, the let's say the girlfriend of the boyfriend that wants to break up with the. the abusive spouse, or partner, and you say, I just don't want to be with you. That in itself is enough for attack now, so you really move the goalpost in a major way. The most interesting thing to me was [00:14:00] about four weeks ago, three and a half weeks ago, was, was the end of the two sessions or the, the annual, meeting of the, of the central committee. of the, of the of the op, call it the operating Government of China. And it, she gave four speeches in that two week period, of Wall Street and the media were expecting. She to really focus his speeches on the the, the the. Making the economy a re an an economic restart, a a a a stimulus to get the Chinese economy moving again. And all of the four speeches were directing the central committee and the people of China to prepare for war. All four of them.
Ryan: Wow.
Kyle Bass: One of them talked about building 18 new air raid shelters in the Fuji Province. Fuji is, is the province directly across the Taiwan stra, from Taiwan? Well, they're building the largest combat hospital in the history of ti of, of China on the coast.
They're, so, they're building air raid shelters, a [00:15:00] combat hospital, and they just passed a law at the bottom, at the back end of the two sessions whereby stating that if you're an incarcerated criminal in China and any of the Chinese prisons the new law stipulates that you'll be, you will have your sentence commuted if you fight on the front lines of the great war.
Well, what great war are they talking about?
Ryan: They're calling it a great war
Kyle Bass: It's crazy if you just take the time to listen carefully or read carefully what's being said, that the timeline for the war has been, has been basically playing out since 2017. really it hit, it hit a high gear in 2020 where they amended a, a national security law that makes it that gave Beijing the legal ability to foreclose or, or take foreign assets whether it be investments or pp and e in China, in, in special circumstances, including war. My, their words, not mine.
Ryan: [00:16:00] So they're already looking at ways to fund their, their great
Kyle Bass: Yeah. And they, and she, in the middle of May of 2020, instructed his entire banking system to, to risk test their system for under extreme US sanctions. Well, what would cause the US to sanction the Chinese banking system? Well, that would pretty much just be a war, because we all know that the, that Wall Street has a very large interest in China. and that there's no way we would be sanctioning their banking system and removing them from swift unless something really went sideways.
Ryan: Why do you think that we're not talking more about this or why some of the news pundits aren't talking more about this and reading in between the lines? Like you're, in most cases you're not even reading in between the lines. You straight up saying, we're going to go to war, and people aren't. Do you think we're not taking it seriously enough?
Kyle Bass: Yeah, I mean, there is no doubt in my mind that the press and Wall Street, Brit large don't want to talk about this. [00:17:00] And because look, when negative they look. None, none of us want negative things to happen. I don't want World War II to happen. That's the last thing I want. I've got three kids. We have a lot.
We have lives to live. We don't want life to get much more difficult. But you also. right? As, as a position that, that, that we're in, we have to call the balls, balls and the strike strikes. And that's our job is to be objective in our analysis and in, and in this case all of the writing, if I, if you just put it all up on a whiteboard, Ryan, it is clear as day what's happening.
Think back to World War ii. Think back to what Churchill was saying between World War I and World War ii. was screaming at the top of his lungs. should not be lending billions of dollars. The the allies, meaning the uk, the us, and our allies. We lent Germany billions of dollars to help rebuild after World War I, because we felt bad about the the Weimar Republic and the hyperinflation of 1923 and ruining wiping out the savings of [00:18:00] Germany. Well, guess what happened? rebuilt Hitler's army for him. We rebuilt the German Air Force Army, Navy.
Ryan: Mm-hmm
Kyle Bass: Our money was used against us. It is exactly what's happening right now. Money is building the Chinese military civil fusion. They, we are, our dollars are building their. Fighting forces, and they do it under the auspices of being open, and we need an economic relationship with them. And yet their global belligerence as evidenced by what they did in Covid. What did they do? They, they, they, they, they lied about human to human transmissibility. pulled all their research off the internet that was at the Wuhan lab, and they won't let scientists into this day to study the crime scene like they are.
They are an irresponsible global actor that doesn't share any of the same values that the United States and the rules-based order and our allies share. [00:19:00] the only reason we would interface with them, Ryan, is because we, we, we keep chasing that Chinese El Dorado. At the end of that 1.4 billion person rainbow, we have to figure out how we can sell things into China and, and use them as our factory floor to make cheap things. And China has played us like a fiddle and it's easy to see that they're on war footing and we are marching ourselves straight into a war.
Ryan: is there anything at this point that we can do, do you think? Would a stop in any sort of cooperation with them from a business standpoint help this situation at all? And is it mostly Taiwan that they're after?
Kyle Bass: So I think, I think the misconception is that Taiwan is the prize. If you, if you read unrestricted warfare written by two Chinese admirals they talk about they're securing the first island chain, which includes Taiwan, the second island chain, which includes [00:20:00] Japan and, and out to Guam and then, and then the rest of the world.
Taiwan is a simple stepping stone. If, if we allow Taiwan to be taken what that means is everyone in Southeast Asia will have to either submit to China's iron fist or. Gear up and fight. And that also includes Oceana. When you think about Southeast Asia, on the northern side, and Oceana like, well, you know, Fiji, the Solomon Islands and Marshall Islands, all the rest of those on the island nations in the Southern Hemisphere.
I, I just think this is what, this is a misnomer. I just think Taiwan is the first of many. And you even saw the the Chinese ambassador to France said some crazy things over the weekend, right? They said that. He said that, that, that the, the the Baltics have no sovereign boundaries that are, that are recognized by China because they used to be owned by Russia.
Therefore, they're Russian. I mean, saying crazy things like that. Macron should send that [00:21:00] ambassador home, right? I mean, that person was saying World War III is around the corner. because as we all know, Latvia, Lithuania, Estonia are NATO nations. And he was saying that, that they didn't have individual sovereignty, which is just in insanity. And it again I think you see we have something coming and we're whistling past the graveyard, and you ask why. don't see it coming. And I just think the negativity associated with such an invasion would be so many concentric circles, right? You'd have a global GDP decline of somewhere between three and a half and call it 7%.
We'd be in a global recession to a global depression. We'd have to retool in real time. We'd have to immediately retool our supply chains that haven't been retooled yet. And.
Ryan: on them for so much
Kyle Bass: Yeah, but at the same time, like we are the most adaptive nation in the world. We would adapt very quickly. We have the best education system, we have the best entrepreneurs. would and will adapt if this happens. And you know what? [00:22:00] The history, history isn't all puppy dogs and rainbows, right? There are hinges in history where the world goes into very dark places. And I believe that we're, we're at one of those hinges in history right now.
Ryan: If we brought all those jobs over here from China, imagine the, well, the, the benefit they would create for a lot of people here.
Kyle Bass: I mean, you know, the net beneficiaries, if this happens, the net beneficiaries will be the US and Europe. And, and I guess more importantly, places that are more third world countries like like Mexico South America where you'll see, you know, some of that manufacturing will come and be reshored in the US and some of those will be reshored in places like Maki, LAORA and, and in the industrial sector of Mexico, which is a good thing for North America, writ large and, and Canada as well, right? So again, no one wants this, no one wants a global recession slash global depression. But the people that have money invested in China, if they leave it there, they end up losing everything, then unfortunately they deserve it because all of the writing is on the wall.[00:23:00]
Ryan: It seems foolish to have any of your money over there right now, and especially when a lot of people can't get access to their money while it's in China. I'd, I'd love to get your thoughts and thank you so much for ringing the alarm bells on a lot of this stuff and your, seems like you're one of the few publishing.
Really good information on Twitter and being, you know, appearing on CNBC and as many news channels as you can to, to speak about this. We don't have enough people speaking about it. I'd love to get your thoughts as well on the Binance CZ situation. You know, he's been reported to have some connections to the CCP and there's like a lot, Binance seems like it's about to collapse any minute now, and that could have greater repercussions for crypto in general.
What are your general thoughts on cz and the, you know, that, that we've heard that they've had some, they've been funding criminal activity and their connections to the ccp.
Kyle Bass: So if you remember, there was a Russian living in China operating a company based in Hong Kong that, that we were able to grab. Basically if you, if you read the indictment, that the, the US Department of Justice, brought against [00:24:00] Anato, like Mon with, with the company his crypto company, biz Lato, what I found interesting about that indictment is it named the number one counterparty for let's just say all for seven up to 700 million of their kind of dark web transactions happen to be Binance.
And so they named Binance in the indictment of bis Lato and, and the, the DOJ minced no words in that indictment. they talked about it just being a entire criminal enterprise. And it became a safe, the result was that Bis Lato became a safe haven for criminals, drug dealers and ransomware groups.
That's what the Do Chase said Breon piece, the US attorney in Brooklyn, they knew that when the police traced their funds into bis, Lato, bis, Lato would not be over to turn its users and true identities so that they hid there. But Biz Lao's, number one counterparty was CZI and Binance. now, you know, the, the rumors have it that cz lives in [00:25:00] Dubai his wife and his mistress and his mom Now,
Ryan: my God.
Kyle Bass: Apparently there's, there's all kinds of unpacking to do in that statement.
And I'll, I'll stay away. I'll stay away from the unpacking. Let's just, let's just say that there's a lot more to the story from, from what I hear in, in international circles than meets the eye.
Ryan: It sounds
like there is and it sounds it
sounds especially like when we, we saw the c e O of TikTok recently speak to Congress, and he couldn't answer simple questions like, are you con being controlled by the ccp, or does the CCP have any connections to your business? And he wouldn't really answer it,
Kyle Bass: That was, that was one of, that was, yeah, that was one of the worst appearances before Congress that I've ever seen. The guy, the guy was terrible it's clear as day where he's coming from and they, they've already admitted to. You know, the data being breached by Beijing and the C C P, and now they're saying that well, they'll move the data to the [00:26:00] United States shores or to, to Oracle or, or wherever those servers are gonna be.
But they, the, the Chinese Communist, the C C P has said, if we require the algorithm to move, they will shut the company down. And you say, wait a second. Whose company is this is, I thought it was a private company. What do you
mean
Ryan: Clearly it's not if the, the government is actually making demands. What is your thought? What, what's your thought on the latest on that? And we saw Montana was the first state to ban TikTok.
Kyle Bass: yeah. I mean, outright. Yeah. I mean, I think Montana took the lead here. It's, there's no doubt in my mind that it is the digital Trojan horse. it is in our kids' bedrooms. The algorithm has direct implications or it can even lead the thought processes of our children. It is that we've allowed this to happen. We must unwind it. And, you know, look, bite dance owns a lot of companies. TikTok, U s A is like a billion of 15 billion of free cash flow. [00:27:00] Just think about that
Ryan: Wow. I didn't even know they did
that
Kyle Bass: Is so if, if I were them, and I realized they have the digital Trojan horse in the gates and they hired a hundred lobbyists or more to, to try to drive a wedge between our political parties to try to keep it alive. In the end, it must be either completely sold, the algorithms gotta move to the us, the data's gotta move to the US in all ties to China have to be severed. Or it has to be shut down.
Ryan: which it seems very unlikely that they would be able to just move everything and then ch check the code. How do you know that the code doesn't have something secretly hidden in it? And there's, so it seems like pretty unlikely we'd be able to just fully move it from them or sell it from them.
Kyle Bass: And again, now, now I'm gonna speak way out of my way, way
Ryan: it when you do
Kyle Bass: Myoi, but I, but I've read, I've read enough about this, that there was a, a, a great press run on this where they talked to a number of developers that use the soft, the software development kits of different apps. Apparently they're [00:28:00] 20,000. Apps that use the software development kit, the sdk that, that TikTok gives 'em, and they're all with the same call it ccp, malware, and gates. So even if you were able to remove TikTok from your device, if you've got other, any of those 20,000 apps on your device, you have the same doorways to the ccp. that are built in. And so unfortunately, unfortunately, everything's compromised in, in my mind. Again, I'm speaking out of term because I'm not a software developer and I know nothing about exactly how tech works. So you take that with a grain of salt.
Ryan: wow. Well, again, thank you again for ringing the bell in a lot of these situations and like I see so many like friends of mine who are on TikTok and the way that it's been able to infiltrate daily trends in their lives it almost happens instantaneously. So it's like a, a drug that a lot of them Americans are hooked on right now. B. Before I let you go, there's a couple couple questions I wanted to ask you. One thing that Prometheus is trying to do is make it easier for [00:29:00] smaller hedge fund managers to do their job effectively. C, if you could think back to when you were starting out as a hedge fund manager, would you be able to tell me a couple of the biggest pain points that you may have experienced when you were starting out, or if you had advice for small hedge fund managers that are starting out there, or any fund manager in general?
Kyle Bass: Yeah.
You know, I, I think you have to, you, you have to bifurcate this idea of small into two, two kinds of people. Let's say you were at working at you know, Duquesne understand, or let's say you're working at, at any of the big hedge funds, let's say you're working for Dan Lobit Third Point, or Bill Ackman somewhere.
Let's just say you were working for someone. That had institutional relationships with investors and you had that back and forth with an investor. If you're leaving the start a new small fund you are gonna find it much easier than, so two kids coming outta college, super smart, let's say, you know, one 60 plus IQs and it's two kids in a Bloomberg. Those days are all but over.[00:30:00] Given the new compliance regulatory environments, given the institutional reluctance to in new startups that where there's no pedigree and no history I think it's just much harder for those, for those people. But let's assume you, you do get launched and you are small. I think that a, you need to have a huge portion of your own net worth invested. Just so that your money is where your mouth is. Some, some of the biggest pitfalls are trying to put together a track record where you have low to no monthly drawdowns and un you know, under these, this model, these models where all these managers try to live in a, in a market neutral delta adjusted neutral, not no lose environment, then that means you're never gonna win a lot. So I, I just think that being yourself, keeping position limits in your own, under your own let's just say compliance programs as opposed to someone else's is really important because you know that Warren [00:31:00] Buffet has bad days and he has bad months and bad years, just like the rest of us do.
And, and trying to ensure yourself against low-vol and no drawdowns is, is a way toure yourself out of business. So, you know, my advice is you know, believe in yourself, set your own risk limits, and be careful with short positions, right? One thing we've learned. the, in the expansion of M two that we saw in 20 20, 20 21, and the you know, let's, let's call it the the game stops of the world. You know, if you have a 2% short position that goes up 600%, you lose 12% of your fund. So you have to be very careful sizing things on the short side.
Ryan: Do you think that's why those days are limited now, where you could, you were, you know, you were a small fund at one point and you know, just you and your Bloomberg. Do you, why do you think some of those days are limited now for people?
Kyle Bass: I just think that that with Dodd-Frank and with the enormity and the complexity of the [00:32:00] K Y C A M L rules, the know your customer anti I money laundering rules and the rules regarding. Chief Compliance Officers and Compliance Oversight, you know, it's really hard run staffing levels where you need to staff them and pay those positions.
You know, chief Compliance Officers don't come cheap guys. And when you're running, again, two people in a Bloomberg and trying to make a name for yourself, that's a massive negative cash flow you have to put together. So all I'm saying is it's much, much harder today than it was 25 years ago.
Ryan: Kyle, thank you again for being part of the show today. Incredible as always. And your thoughts on macro China and what's going on in the world today and the amazing work you're doing with Chocolate Bay and your new project is just amazing. So thank you again
Kyle Bass: It's been a pleasure, Ryan. Thank you.
Today's conversation focuses on the following:
- Whether the recent trouble in parts of the banking sector speaks to a much broader breakdown in the financial system.
- The differences between the failure of Silicon Valley Bank and Signature Bank of New York.
- The Fed's role in setting the stage for this crisis to happen.
- The advent of “Twitter-fuelled” bank runs.
- Whether the $250k insured by the FDIC is an arbitrary figure and what it should be.
- 2018's regulatory rollbacks.
- Philosophies and processes for investing in this environment.
- The prospect of seeing new market lows due to last week’s events.
- The damage to investors' confidence in banks' stability
- Strategies and financial instruments that could limit bank runs in the future.
Herb Greenberg has spent over 40 years as a financial journalist at some of the country's leading newspapers, websites, and broadcast media. He is currently a senior editor at Empire Financial Research.
Enrique Abeyta is also an editor at Empire Financial Research. The 25-year stock market warrior and former hedge fund manager is also the writer and owner of Inked Magazine, REVOLVER Magazine, The Hard Times, the Co-Founder of Hard Money, and the host of Hard Money's Million Dollar podcast.
Alex Beinfield is the Founder and CIO of hedge fund Blue Duck Capital. Alex has been short Silicon Valley Bank (SIVB) since September 2022 and was short Signature Bank of New York (SBNY) just before it failed.
Short SVB since September 2022, Alex Beinfield shares his investment process explaining how he created his thesis for this massive short idea long before SVB collapsed. How a professional fund manager examines a theme and makes a trade that makes him look like a psychic. We also talk about other lateral opportunities that will happen as a result of this.
Today, your host Ryan Pallotta is joined by the author of the Rosen Report and industry expert Eric Rosen.
Today’s conversation focuses on:
- The Silicon Valley Bank (SVP) collapse. What led to it and what it means for investors.
- The Fed being partially to blame for banks like SVB needing to take on more risk by keeping rates so low for so long.
- SVB’s failure to keep a “fortress balance sheet" and take responsibility for its decisions.
- Eric’s assessment of Bear Sterns prior to its 2008 collapse and subsequent sale to JP Morgan Chase.
- What the 2/10 UST yield curve inversion tells us about the probability of a recession
- The migration of HNW people to south Florida and its effect on high-end real estate prices.
- The recent phenomenon of kids being less enthusiastic about learning to drive and owning a car.
Today, your host Ryan Pallotta is joined by the author of the Rosen Report and industry expert Eric Rosen.
Ryan and Eric kick things off by talking about Wall Street legend Carl Icahn, with Eric recounting a memorable dinner he shared with the man Gordon Gecko was—in part—based upon.
Eric gives his thoughts on an expected interest rate hike of 25 basis points and the squeeze consumers are starting to feel with auto and credit card delinquencies on the rise and credit card and mortgage balances at an all-time high.
He then talks about a greater than zero chance of the US government being temporarily unable to pay its debt and the knock-on implications of that.
Lastly, Eric shares why he thinks EV goals are unrealistic and why the government should be enticing big oil companies with a carrot rather than beating them with a stick.
Today Ryan Pallotta is joined by Jordi Visser, a true legend in the alternatives world. Jordi is President and Chief Investment Officer at Weiss Multi-Strategy Advisers
Jordi is a master at using analogies to explain complex financial ideas. Ryan quickly gets Jordi to open up about their shared love for the philosophies of Moneyball and Bill James, perfectly teeing Jordi up to answer his question: "If everyone has started embracing analytics, how does one achieve alpha?"
They talk about Jordi's latest whitewater Adapt or die 3.0—something everyone should read—discuss why alts are crucial in today's economic environment. Jordi then explains how Weiss is preparing to tackle 2023.
Jordi then touches on his views in China, what the Fed will do in 2023, and how we have to shift our investing perspectives based on Marc Andreessen's ABCs. He even tells us how accompanying his dad to the horse track put his financial education on a fast track.
Later, the conversation turns to Jordi's passion for longevity; how mind and body health makes you a better investor; the importance of sleep; and how using data can improve your physical health as it does with your financial well-being.
Today's episode is an exceptional one. Some of the world's most interesting financial professionals review 2022 and share their predictions for the year ahead.
Host Ryan Pallotta is joined by JAG Capital's Josh Goltry, Blue Duck Capital's Alex Beinfield, Wall Street veteran Eric Rosen and Prometheus Founder and CEO Michael Wang.
The result is a rollicking hour and change of roasts and —a heaping helping of insight into how these professionals navigated a tumultuous 12 months and how they plan to thrive in 2023.
Personal wins and losses are shared, predictions are proffered and challenged, statistics are interpreted, theses are scrutinized, strategies are discussed, heroes are lionized, villains are denounced, and a lot of laughs are had along the way.
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Disclosure: Opinions expressed in this podcast are meant for informational purposes only and should not be considered a recommendation or investment advice. All investments involve risk. Past performance does not guarantee future results. Securities products and services offered in the Prometheus Marketplace are private placements only sold to accredited investors. Private placements, sometimes referred to as alternative investments, carry a high degree of risk, including the potential loss of your entire investment, and are not suitable for all investors. For a more detailed disclosure, including Prometheus’s conflicts of interest, visit: https://www.prometheusalts.com/legals/podcast-disclosure Our second investment idea event encapsulates Prometheus' primary goal: opening up investing in alternative investments—hedge funds, venture capital, private equity, etc.—to more people, giving them access to the same opportunities that institutions and family offices have enjoyed for decades. Today, Prometheus CEO and hedge fund veteran Michael Wang will be talking with: Jose Torres from Lokoya Capital ManagementAndrew Cowen from Brean Asset Management These incredible guests are brimming with insights that may impact how you think about investing forever.
Herb Greenberg, Emmet Peppers, and Matt Smith discuss whether the Twitter/Elon saga jeopardizes the Tesla share price. Could Elon step down as the Tesla CEO, and should he? We get into the banning of journalists from Twitter for encouraging "ElonJet." In this episode, we have some of the best Prometheus commentators analyzing the drama people can't stop talking about.Open conversations and healthy debate amongst people with different opinions are crucial; this episode delivers precisely that. One of our best episodes to date, listen to heavyweights Herb Greenberg, Emmet Peppers, and Matt Smith discuss the chaos at Twitter as we have a heated but healthy debate around the ElonJet "doxxing" policy and the suspension of journalists' Twitter accounts. We also dive into how much Tesla is hurting from the distraction of the Elon/Twitter saga.
Today Ryan Pallotta breaks down what's happening with Josh Goltry. Josh is the Founder and Chief Investment Officer at JAG Capital.
This entire chat focuses on the collapse of what was, until recently, the third-largest crypto exchange by volume—FTX.
Josh starts by describing his initial thoughts on the story when it broke, listing a slew of incongruencies that were beginning to arouse suspicion around Co-Founder Sam Bankman-Fried.
He then describes how so many seemingly sophisticated investors bought into what amounts to a Ponzi scheme and talks us through what he describes as "piggybacking."
Josh then talks about how FTX's collapse could be a good thing for crypto in the long term and what this all means for the last major crypto onramp in the US—Coinbase.
Today, Ryan Pallotta breaks down what's happening with Josh Goltry. Josh is the Founder and Chief Investment Officer at JAG Capital.
Josh explains how remote work may lead to grossly inaccurate job figures and describes the time it takes for macroeconomic influences to be felt at the micro level.
He and Ryan talk about why the dollar's strength is bad news for multinationals with US expenses, adding that the negative impact of the stronger dollar will be felt more keenly in Q4.
Josh then weighs in on an intriguing conspiracy theory that suggests TikTok—which he calls "digital opium"—exists to make people outside of China dumber while the domestic version—Douyin—is intended to make domestic users smarter.
Josh then talks about how a red wave could hasten a ban on TikTok in the US and predicts that a total ban could result in Meta's share price doubling in a day.
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Today Ryan Pallotta is talking with Dan Zwirn, CEO & CIO at Arena Investors, LP.
Their chat begins with a look at the current maelstrom of macroeconomic events through a historical lens.
Dan compares the tumult of 2022 with that of the late 1960s and reminds us that we've never seen the sort of environment we see today without it leading to a full-blown panic.
He then talks about how the way in which British PM Liz Truss's message was packaged and delivered destabilized the UK's credibility and caused a wholesale reevaluation of its economy.
Dan goes on to detail the four main ways in which Arena insulates its investors from macroeconomic trends and market directionality and offers everyday investors advice on how to navigate what could be a long and deep recession.
Arena Investors, LP:
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Today Ryan Pallotta is talking with Daniel Clifton, Partner and Head of Strategy research at Strategas Research Partners.
With the mid-terms right around the corner, Daniel explains how he helps institutional investors make decisions as the political landscape shifts and policies change.
He describes a model that Strategas employs for predicting the outcome of presidential elections and explains why this model has gotten just about every election right, including 2016.
Daniel then talks about why he thinks the current environment is reminiscent of 1968, then indicators that will give us a better understanding of the depth and severity of the seemingly inevitable recession.
Daniel leaves us with a slew of predictions concerning the mid-terms, the outcome of the 2024 presidential election, Jerome Powell continuing to chair the Fed, and an October surprise from Vladimir Putin.
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Today Ryan Pallotta is talking with Alon Rosin, Managing Director and Head of Institutional Equity Derivatives at Oppenheimer & Co.
Their chat begins with an appraisal of the current state of the market, with Alon describing what he calls the battle between "economic reality and investor positioning."
Alon then gets into some specific portfolio management strategies. He explains why, with a lot of volatility in the market, it's a good time to use options.
He also touches on the benefits of professional money managers, remarking that even sophisticated investors use the talents of other investment professionals with strengths in other areas.
Lastly, Alon and Ryan discuss the ramifications of work-from-home and hybrid models, honing in on career longevity, productivity, and real estate.
Today's discussion begins with the big shake-up in Shopify's (SHOP) management team, specifically the appointment of Jeff Hoffmeister as CFO.
Josh explains how tech companies hiring Wall St veterans signals their maturity and talks about the possibilities of Shopify expanding into banking and loans for the companies it supports.
Josh and Ryan then chew over the stickiness of cybersecurity with Josh, explaining why, if you're a CSO at any company, it's the last part of the IT stack you eliminate. He also gets into why he's so bullish on Crowdstrike (CRWD).
While Josh maintains that Nvidia (NVDA) is his favorite company, he lays out why he reduced his position by almost 100% and at the price at which he's looking to reenter. He also shares his thoughts on why the CHIPS act is far too little, far too late.
Lastly, Josh and Ryan discuss Tesla (TSLA). The prospect of the company mining its own lithium and why, like Apple, greater vertical integration is likely to improve their product. They also address the fact that no other company has a bigger key-man risk than Tesla.
In this episode of Currently, Kyle Bass talks to us about his incredible project, Conservation Equity Management. This project almost sounds too good to be true. We love Kyle's excitement when he talks about his passion for the outdoors and how he can bridge his investing ability with wildlife and land conservation. Rehabilitating thousands of acres of land while creating venture-like returns is a departure from investing behind a Bloomberg terminal.
Kyle is also a macroeconomics master. We talk about how the central banks are driving a global recession, where the economy is going, why we have not seen a market bottom yet, and how investors can navigate this by investing in hard productive assets.
We then dive into Kyles's current concerns about China and discuss how an invasion of Taiwan is inevitable. This serves as a segue into a history lesson on Russia, the global energy crisis, and the cold reality facing much of Europe as we get into winter.
Enrique Abeyta is a veteran "stock market warrior" and financial newsletter editor who chews up Twitter with an array of unfiltered perspectives on what's happening in the world and the world's markets.
Asked about what we should make of the return of meme stock activity, Enrique suggests that it could indicate a speedier market recovery than many expect.
He goes on to describe why this is the most target-rich environment for long-term, multi-baggers that he's seen in thirteen years and talks about the pitfalls of not having a set idea about the kind of investor you are.
Enrique later talks about his e-commerce platform Project M and how the company is poised to drop a new small-run vinyl project incorporating both NFT and NFC (near-field communication) technology. He explains that to be successful in e-commerce in 2022, products need to be rarer and more differentiated than ever before.
Jason Trennert is Chairman and Chief Executive Officer of Strategas and its related companies.
The podcast starts with Jason explaining why he wrote his 2015 book My Side of the Street: Why Wolves, Flash Boys, Quants, and Masters of the Universe Don't Represent the Real Wall Street and why it remains relevant today.
After describing how his passion for intelligence-gathering informs how he looks at investments, Jason lays out the three fundamental principles underpinning the way he does business.
Jason then voices his skepticism about Wall Street's prediction that profits will be up next year, given that a recession seems inevitable. He also airs his concerns about tech companies valued on revenue growth and not growth in earnings or cash flows.
Lastly, Ryan and Jason talk about the price activity of Bed Bath and Beyond (BBBY) in recent weeks. He explains that meme stocks are damaging confidence in the system and companies' ability to raise money.
Chris Blum is the CEO of Maximum Effort Holdings and formerly held several roles within JP Morgan, including Head of Global Equities and Head of Digital and Data Transformation.
Chris and Ryan get right into discussing the Inflation Reduction Act, with Chris explaining that it is, in fact, a climate bill, does little to tackle inflation and is an example of systemic dishonesty in Washington DC.
Chris then talks about the lag in the public's response to the economic climate in terms of how they are spending and why, without a sharp dose of economic pain, consumer behavior doesn't stop on a dime.
Ryan then asks Chris about how consumers are thinking about investing in assets at a time when macro events—Russia's war in Ukraine, for example—are causing volatility in the global markets. Chris talks about the importance of sticking to an investment plan and not getting fixated on headlines.
Chris then gives his thoughts on the loosening of COVID restrictions in Hong Kong and why we should anticipate a tsunami of pent-up spending.
Josh is the Founder and Chief Investment Officer at JAG Capital.
Today's discussion quickly turns to the market rallying on the CPI print, with Josh laying out a case for why the Fed should continue to make 75bp increases until the situation is under control. Josh goes on to explain why, after a few great weeks, he's weighing up the prospect of taking capital off the table.
The conversation then turns to the fallout from Nancy Pelosi's trip to Taiwan last week. Fretting over the fate of TSM leads to Nvidia with Josh explaining the size of his position in the firm.
Josh then describes a future for crypto outside of speculation—one where real use cases will dominate and dictate value. The trio then discusses why Coinbase is one of the world's most hated stocks and talks about why its lean towards greater regulation will attract more institutional money.
Kyle Reardon is a real estate expert, currently plying his trade at FactSet. Prometheus users already know Kyle from the insightful content he frequently posts on our app.
With strong financial headwinds gathering, Kyle gives us some context for what may be about to happen in the housing market.
He talks about the depth and breadth of a nationwide decline in home prices and explains why the developments of the recent past are becoming unfeasible due to rising interest rates.
Kyle and Ryan discuss Amazon's throttling back on building of warehouse sites while ramping up construction of its data centers—a decision informed by where it's seeing a more aggressive uptick in revenues.
Josh Goltry is the Founder and Chief Investment Officer at JAG Capital.
During this chat, Josh explains why investors should listen to earnings calls of companies they don't own to gain an edge. He also explains why investors shouldn't consider tech stocks growth stocks anymore.
Ahead of Nancy Pelosi's purported trip to Taiwan, Josh shares his thoughts on how a destabilization of US-China relations could affect chip-maker TSM—a company he calls the most systemically important in the world. He also articulates the urgency and implications of bringing chip manufacturing to the US.
Josh then talks about Nvidia—a company he describes as the connective tissue of the world's entire tech infrastructure. He delivers his thesis on the firm, remarking that there is no better-placed company in the world in the decades ahead.
Josh talks about Tesla and how the companies with the largest AI training sets will be unassailable. He also explains why pitching Tesla at Point72 in 2019 cost him a position there.
On this episode of Currently, we’re joined by Robert Mullin, General Partner and Portfolio Manager at Marathon Resource Advisors.
We sat down with Robert to explore the factors contributing to rising commodity prices in this recessionary backdrop and when we could potentially see the trend come to an end.
Robert explains the economic implications of the tensions Russia has been introducing to global markets by holding hostage energy and food supplies, how the world is bracing for a rough road ahead—hoarding supplies locally and attempting to bring processing facilities online at lightspeed.
His outlook for commodity prices is bullish going into Q3/Q4 2022, with China likely coming out of lockdowns, and fertilizer shortages yielding likely causing higher food prices. We’ve seen shortages worldwide, and countries are now hoarding supplies locally.
As far as oil goes, the price of oil has a wide margin of error—he sees Europe likely going into a full-scale recession, with America’s economy going into a light recession, but showing some signs of strength. A good environment for oil to be between $80-110.
Mixed signals from US government administrations has made ramping up the domestic production of natural gas and oil a difficult prospect—on the EV front, plans for lithium mines in Nevada are being boycotted as well.
Robert sees that the data regarding inflation will likely continue to be bad for a while. He believes the fed will have to continue to play hard ball, hiking rates until it abates—not thinking this will happen until some time next year at the soonest.
He believes that inflation is bad for 99% of markets, that commodities is one of the only asset classes that actually benefits from high inflation.
Robert Mullin
Marathon Resource Advisors
marathonresourceadvisors.com
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Daniel Kirsch is the Head of Options at leading investment bank Piper Sandler.
In our talk, Daniel defines options, trades, and puts and lays out some strategies for people who want to dip a toe into options trading. He also shares the reasons underpinning the recent explosion in options trading's popularity.
Daniel then gets into his bullish outlook on energy and why the ESG push is causing energy producers to make as much money as they can while they can and are disincentivized to pump more oil. He then namechecks two individual stocks and two index funds for people looking for energy exposure.
The conversation then turns to names that have taken a beating—Etsy, Shopify—and why they're starting to look attractive. Daniels sells include names connected to housing, including Whirlpool, Overstock, Wayfair, and Restoration Hardware.
Lastly, Daniel gives us his firm's view on the severity and duration of the coming recession.
Emmet Peppers is the Founder of Good Soil Investment Management.
In our chat, the Tesla expert tells us what he thinks about the impact of the company's upcoming layoffs and the prospects of rival EV companies. He also shares some interesting opinions regarding the recent uptick in public appearances by Elon Musk.
He then gets candid about his own difficulty with unlearning assumptions and how he strives to be a non-binary thinker.
Lastly, we touch upon some of the other companies Emmet in long on—Rocket Lab, Lemonade, and Roblox—and why he thinks that Nvidia could become one of the biggest companies of all time.
Henry Elder is the Head of Decentralized Finance (DeFi) at Wave Financial.
If you're unclear about what DeFi is and how it's different from its opposite CFi, this is definitely a podcast you'll want to listen to as Henry breaks it down in a way that anyone can understand.
During our talk, Henry gives us a broad overview of the current crisis in crypto, explaining why movements in the broader market are felt more acutely in the crypto space and why a lot of Wave's clients are sitting on the sidelines and waiting things out.
Then we talk about the contagion effect and unpack the misfortunes of Celcius and what's driving its growing insolvency risk.
We then discuss the margin call on bitcoin-backed Microstrategy's loan from Silvergate and what's happening with Axie Infinity, and the future of play-to-earn gaming.
Alex Beinfield is the founder of Blue Duck Capital Partners.
This week, Alex with Ryan about the consumer price index for May, the possibility of a ceasefire in Ukraine, and how it could cause a collapse in commodities prices. He explains that another scenario is behind his decision to be long commodities refiners and short anything levered to the consumer feeling good.
The tech, media, and telecom (TTM) sector is Alex's bread and butter. He explains why he remains bullish on Spotify in the wake of the company's investor day earlier this week and why a quadrupling market cap isn't out of the question. He also talks about Netflix will roar back by learning from its recent mistakes and shaking off complacency.
Lastly, Alex talks about misperceptions about green energy and why switching from fossil fuels isn't going to be as easy as we'd all like it to be.
Jose Torres is Chief Investment Officer at Lokoya Capital Management, a fund that focuses on growth technology companies. Prior to founding Lokoya, Jose was at SAC, Tourbillon, and Cypress Funds.
In our talk, Jose tells us about his background as a software engineer and how that informed his specialization in tech.
He talks about why he remains positive on the tech space, citing the enormous amount of damage tech stocks have already sustained and details how great companies have the ability to power through macro messiness.
He goes on to explain why he likes Broadcom (AVGO) and why Salesforce (CRM) is an example of a company who’s stock price doesn’t reflect its recent performance, describing it as the baby that’s been thrown out with the bathwater.
Christopher Verrone is a partner of Strategas, a leading institutional brokerage firm focused on providing macro research, capital market and corporate advisory services, and financial solutions to institutional investors and corporate executives worldwide.
Today's podcast is a masterclass in understanding what's going on in the markets right now.
Christopher tells us about his firm's approach of discovering what the market is telling us about the macro, as opposed to the other way around.
He tells us how the disconnect between what the market is telling us and how consumers are behaving can be interpreted, explains why the current state of affairs doesn’t have the hallmarks of a signature bottom, and talks about why, when that bottom comes, it’s unlikely to be V-shaped.
He goes on to remind us that leading companies in one decade rarely remain leaders in the next and talks about why energy went into this apparent bear market as a leader and will emerge from it as one too.
We're incredibly fortunate to talk to Whitney Tilson and get his take on yet another eventful week in the markets. As always, the former hedge fund manager and current investment newsletter publisher gives us plenty to chew on, just as he does to 140,000 avid readers of his daily takes on market movers and shakers.
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In our talk with Whitney, we get into the spectacle of Elon Musk using Twitter to attack Twitter while attempting to acquire Twitter. The latest twist in the tale is Elon's apparent attempt to re-price the deal, citing a need for data to support the platform's claim that less than 5% of Twitter users are fake or spam accounts.
While his Empire Financial Research colleague Enrique Abeyta talked about the prospect of Twitter suing Elon should he derail the deal, Whitney floats an even more costly and consequential outcome to the drama—Twitter deciding to de-platform him.
Whitney talks about the likelihood of the market finding its bottom late last week. He explains why he's turning bullish on Amazon, Alphabet, Facebook, and Netflix, and why when everyone and their mother is using a product like Whatsapp or Venmo, they are good buys explaining that a sustainable financial model can be hammered out at a later date.
It's a particularly great week to be talking about what's going on in the markets with 25-year stock market warrior Enrique Abeyta. Hour by hour, Enrique chews up Twitter with an array of unfiltered perspectives on the economic forces shaping our world. Do yourself a favor and follow @enriqueabeyta if you don't already.
One of the former hedge fund manager's current day gigs is writing newsletters for Whitney Tilson's Empire Financial Research. Another is co-hosting Hard Money's Million Dollar podcast, in which Enrique is tasked with helping turn his co-host's 10,000 dollar stake into a cool million. It's highly entertaining and well worth checking out.
In the early hours of this Friday, the 13th, Elon Musk took to Twitter to announce that his bid to acquire the aforementioned social media platform was on hold, pending details surrounding the percentage of users that are actually spam or fake accounts. Enrique describes how this possible attempt to strengthen his negotiating position could cost him big should he break the deal and get sued by Twitter.
Front here, Enrique segues seamlessly from Twitter's undulating stock price to other tech stocks that have been hit hard of late and could see a pronounced bounce back. He also drops some tantalizing tidbits regarding a SPAC stock he's particularly jazzed about.
Henry Elder is portfolio manager for all of Wave Financial's decentralized finance investment products and manages $250 million in stable coin and crypto-asset investment strategies.
That means he’s perfectly placed to explain the crypto story that everyone's talking about—the implosion of crypto coin Terra Luna and the $41 billion that got vaporized overnight.
Henry does a masterful job of setting the scene that led up to this crypto crisis. He lays out what stable coins are, explains the difference between collateralized stable coins and algorithmic stable coins like UST, and describes the relationship between UST and Luna.
Henry then takes us through the crisis that developed in the past week and how a paradoxical announcement by the Luna Foundation Guard—think of it as centra bank to UST—broke the stable coin's peg to the dollar.
We talk about how won and lost in the crisis' wake, how Luna's collapse is reflected in the pricing of bitcoin and Ethereum, and the prospect of a comeback for Luna. We then zoom out and talk about the timing of this crisis, coming as it does during a recession, a war in Europe, and a lull in enthusiasm for crypto generally. Henry tells us why he remains bullish on crypto generally and describes how the US can establish dollar dominance in crypto via US dollar-pegged stable coins.
Ryan and Prometheus' Lead Product Manager Jeff Brines talk about Elon Musk’s acquisition of Twitter—the way the news is moving the market and dividing public opinion.
In a lively, wide-ranging chat, they talk about the uniqueness of the world's richest person acquiring the social media platform the world's brightest minds choose to share their thoughts, providing—as Emmet Peppers deftly puts it—the cheat codes for life.
They discuss Musk's superhuman ability to attract talent, whether the outcry around the acquisition holds up to scrutiny, and theorize on why Tesla's share price dropped 12%—or two Twitters—on the news.
Ryan and Jeff also kick around the common perception of Elon. Specifically, how much of it doesn't jibe with his actions or lifestyle. They also touch upon what a privately held Twitter could look like and how a genuinely great mind may set about unlocking its value.
Prometheus Founder and CEO Michael Wang learns about Twitter accepting Elon Musk's $44B deal in real-time and shares his thoughts as the New York Stock Exchange halts trading TWTR.
Mike explains why trading is halted in a situation like this, what Twitter will trade at when trading resumes, and whether this deal is good or bad news for shareholders. We talk about how Elon can create value by taking down Twitter's cost structure, the benefits of being a private company, and what the deal this means for free speech.
Today, we’re talking with Good Soil Investment Management’s Emmet Peppers—a Tesla expert and enthusiast. On Wednesday of this week, Tesla reported first-quarter earnings for 2022 and beat analysts’ expectations on the top and bottom lines.
Emmet has owned Tesla since 2010. Back then it had a market cap of $2.5 billion. It’s now well over trillion.
We talk with him about how Tesla blew estimates out of the water and managed to post a greater than sevenfold increase in profit despite supply chain issues. We discuss the advent of robo-taxis, and self-driving cars, and how people need to stop thinking about Tesla as just a car manufacturer. And of course we couldn’t talk about Elon Musk without touching on his plans for Twitter.
Today we're talking with Blue Duck Capital Partners Founder Alex Beinfield about some truly seismic things going on with a couple of tech companies that many of us use daily—Netflix and Twitter.
Twitter is in the crosshairs of one Elon Musk. Alex has been long on Twitter and explains what Elon might be thinking, laying out several ways this modern melodrama may play out, including a rationale for intentionally triggering a poison pill.
On Tuesday, Netflix announced that they had a lousy Q1 and expected a worse Q2. The price tanked by around a third. Alex was short on Netflix but covered his shorts just before the announcement. He tells us why he made that choice, what the dip could mean for other streaming services and the effects of Nexflix's plans to crack down on password sharing and introduce ads.
We got so much out of our chat with Empire Financial Research's Whitney Tilson on Decoded last week that we asked if he'd sit down with us again to talk about what's going on in the world right now. The former hedge fund manager and current investment newsletter publisher delivered, just as he does to 140,000 avid readers of his daily takes on market movers and shakers.
In our stimulating chat, Whitney tells us why he's confident about a ceasefire in Ukraine and a resulting rally in beaten-down growth stocks, skeptical that a viable alternative to the US dollar's reserve currency status exists, optimistic about Twitter's potential to become a 10-bagger in the next decade, and so much more.
To understand current events, it's crucial to understand the events of the past. Today we're joined by someone who can enrich our understanding of what's going on right now by looking at it through a historical lens. Marko Papic's career has seen him at the nexus of geopolitics and finance. He is a Partner and Chief Strategist at Clocktower Group and the author of Geopolitical Alpha: An Investment Framework for Predicting the Future.
During a gripping discussion, we discuss Russia's territorial vulnerability, its recent military record, and how other countries with plans for territorial expansion will be now factoring in the high cost of corporate warfare. Marko also argues that Russia's invasion of Ukraine is a distraction to a macro investor and that the macro truth was revealed prior to the current conflict.
On today's podcast, we're joined by Enrique Abeyta, a "stock market warrior" and financial newsletter editor, who chews up Twitter with an array of unfiltered perspectives on what's going on in the world and the world's markets.
We sat down with Enrique to talk about today's interest rate hike, the advent of crowdsourced warfare, and how owning Chinese stock will be an unforced error should China create a geopolitical crisis of its own.