Transcript was automatically generated.

Frank Curzio 00:00

What’s going on out there? It’s Wednesday, March 25th, and I’m Frank Curzio. You’re watching the Wall Street Podcast.

Frank Curzio 00:05

We’re breaking the headlines, and, uh, tell you what’s really moving these markets. Mr. Daniel Creech.

Daniel Creech 00:14

Hello, Frank.

Frank Curzio 00:15

One way for the weekend. Went to go see your family in Ohio. How was it, man?

Daniel Creech 00:18

I did. It was good. It was good. I, uh, I took beautiful weather up with me, and then I brought horrible weather back. So it was amazing.

Frank Curzio 00:23

Horrible weather.

Daniel Creech 00:24

I’m, I’m as good as any weatherman, Frank.

Frank Curzio 00:26

It’s so it was, it was 80 degrees here what? Yesterday? And then it was this morning, I think it was 50s. I mean, it, it’s, there’s like a 40-degree difference where we are. It’s pretty crazy right now. So yeah, it’s nuts.

Daniel Creech 00:37

Yeah. But there’s people in real winter. Now it’s summer everywhere. It’s gonna be hot like across the whole country. I saw a headline. It’s gonna be hot across the whole United States.

Frank Curzio 00:46

Yeah. I know. It’s like everywhere.

Daniel Creech 00:48

Yeah.

Frank Curzio 00:48

But.

Daniel Creech 00:48

Let’s get to something serious, Frank. In my best bookie voice.

Frank Curzio 00:51

How’s your bracket?

Daniel Creech 00:53

My bracket is very well intact. This is the first time, I think, in four years that my Final Four teams are still intact. I know how that feels, so I’m not making fun of you. Pick Florida. Uh, I, I think I filled one out on CBS Marco Watch, which we did, um, not Marco Watch, but Sportsline. Uh, so I filled out a bracket, and we did it live last week.

Daniel Creech 01:13

And the picks were good, though. The picks were good. I mean, and my Final Four team’s still live, which is UConn, Houston, Arizona, Iowa State. Uh, I said to bet TCU, great team. Some familiar to Big 12. I’m a KU fan who lost to St. John’s. St. John’s is, I’ll get to that in a second. Uh, but they beat Ohio State TCU. I also loved High Point. I said, “I’m not too sure if they’re gonna win.” I think they were getting seven or eight points against Wisconsin,

Daniel Creech 01:33

and they won outright. Uh, and also I didn’t have Florida in the Final Four, which means all four of my Final Four picks are probably gonna lose this weekend. So, um, I don’t know. With that said, when I look at these teams and someone’s followed college basketball as long as I have, uh, you know, it was my life for 40 years, basketball, uh, this is the best Final 16 teams, Daniel, that I’ve ever seen.

Daniel Creech 01:52

I mean, have you seen the teams that are available? I mean, who, who are still left? I-It’s, I mean, you’re, you’re looking at 11 of them could easily win the National Championship, and you never see that. There’s like five or six, maybe, and usually two or three that stand out. I mean, you have Duke, St. John’s, Arizona, Michigan State, UConn, Purdue.

Daniel Creech 02:11

I’ll throw Nebraska in there. People might think I’m crazy. Nebraska was a top 10 team for most of the year. They won 21st 21 games. They’re legit. Same with, uh, Purdue. When you look at them, they were ranked as one of the top teams, and they just, in the middle of the year, they just didn’t play well. And now they’re coming together, and they’re playing great. Uh, you throw in Michigan, and it has awesome, I would say, Alabama, but that one top player is, you know, go went to jail for selling pot.

Daniel Creech 02:31

He just said he was using it. He might stay on the team. Uh, Illinois is great. Houston, Iowa State, but, you know, I don’t know if you have your favorites in there. You’ve been watching, but holy cow. I mean, this is a, these are really, really great games across the board. No, my favorites, uh, anybody but that one team, I would be happy to see. The only that team, that’s all I care about. And you know who you have to thank for this spread-out talent?

Frank Curzio 02:52

Mm-hmm.

Daniel Creech 02:53

The NIL money. It’s not ruining college basketball, people. It is spreading it out.

Frank Curzio 02:57

It’s ruining it for everyone, except the most important thing is the ratings,right? It’s ruining it for coaches. They hate it. They’re all leaving. It’s ruining it where people are pissed off. Trump had a, had a special meeting with all, you know, people, big names in college and coaches and stuff like that. So they’re all pissed off. It’s not a good system. It’s all shitty. But people love watching it because it’s creating this parody across, uh, the whole entire industry.

Frank Curzio 03:19

And that’s all they care about is the money. So for them to change it, I don’t know how much they’re gonna change it. But I will say, you know, Florida, I didn’t have, I thought they were a good team. Uh, they played really great. I think they won something like, I don’t know, like 12, 13 in a row before losing. But, uh, I love the coach. He made a very, very huge mistake that last play. I don’t know what he was thinking. You’re up two,right?

Frank Curzio 03:38

You’re not down two. You’re up two. Iowa has the ball. I don’t know how much time left. What is it? 11 seconds left or something? And you’re full court pressing, which is fine if you keep the people in front of you. Keep the team in front of you. These guys gambled and went for the steal. And as soon as they got it, there was like a three on one the other way, and just passed it out for a wide open three, and they lost. But I was just like, man, I, I didn’t understand why the full court pressure.

Frank Curzio 03:59

I get the full court pressure if you just want them, you wanna put pressure as they’re dribbling up. You keep them in front of you the whole time. Get a hand in their face. They went for the steal. Like, as soon as they caught the ball, it was a three on one. It was like, what are you kidding me? Anyway, but, uh, Florida, lots of Florida fans say they’re disappointed. Listen, Iowa State, I really love, but Joshua Jefferson may be the best player in the tournament right now.

Frank Curzio 04:20

Uh, but he got hurt three minutes into game one, and did not play the second game because of his ankle. It’s MRI came back negative, and they say he’s probably gonna come back, but they cannot go too much further. Uh, they’re not gonna go too much further unless they, they have him. So they have to make sure they have him. St. John’s beat Kansas, which was a,

Frank Curzio 04:38

you know, I can’t believe they gave them wide open layup at the end of that game. Uh, Kansas, congratulations. Uh, I thought St. John’s was a better team. I had St. John’s moving on my bracket, but the comeback that you had down 14 with a few minutes left, and man, I just can’t believe he got, gave up a layup. I will say this about St. John’s. Holy shit. They can’t shoot. They cannot shoot. They must have had about 20 wide open three-pointers.

Frank Curzio 04:58

And I mean, they were hitting the backboard. They weren’t even hitting the rim. So you’re not gonna get away with that with Duke. Duke’s, it’s gonna be a tough game. St. John’s, St. John’s, great defensively. They’re gonna be pressuring the ball. Also, you gotta see who’s playing for Duke. They’re pressuring the ball. That point guard’s not playing. It will be an interesting game. UConn, Michigan State, both of them look great. Uh, you know, so, and that’s all in one bracket.

Frank Curzio 05:18

UConn, Michigan State, KU lost to St. John’s. St. John’s playing Duke. That’s one fricking bracket of four to five teams that have a shot to, to win it in one bracket, which is crazy. Houston, Illinois, best offense against the best defense. That’s gotta be an insane game. Nebraska is legit. Like I said, top 10 for, for most of the year, playing great right now. I mean, two, two blowouts. Purdue, said earlier,

Frank Curzio 05:37

rated one of the best teams to start the year, uh, playing great. So was Texas. Out of nowhere, nobody, nobody has Texas,right? Because Texas is a play-in. Uh, Arizona, listen, there’s no surprise with Arizona. They’re a beast. They won the best conference outright, which is the Big 12. Uh, you could see by the teams that are left, it’s the best conference. They also won a Big 12 Championship, and they beat Houston and Iowa to,

Frank Curzio 05:56

to, you know, Iowa first and Houston to win it, which I have those two teams playing in the final of this tournament. Uh, so look, great, great games. One of the best Sweet 16s I’ve ever seen with that many teams. 11 of them could, could win. And, and, you know, you can make arguments. Some people might say, “I don’t know about Nebraska,” because Nebraska never won a game in the tournament.

Frank Curzio 06:16

They’re not used to seeing them. I’ve seen Nebraska play several times this year. They’re a great team. They’re a top 10 team. Uh, so, you know, you could throw in Arkansas. I know that, you know, if you’re an Arkansas fan, you’re like, “Frank, what about Arkansas?” They have one of the best point guards that Arizona is playing them said it’s one of the best point guards he’s seen in his 30-year career as a freshman. I think he leads that team in points and rebounds.

Frank Curzio 06:37

I mean, I mean, points and assists as a point guard. Holy cow. You know how hard that is as a freshman.

Daniel Creech 06:42

Yeah.

Frank Curzio 06:42

And he, he was unbelievable last game. He won that game for them. But Arizona, I’ve seen them play. They’re good at shutting down people. They shut down the best player for Kansas. Uh, so it’ll be interesting because they’re gonna need help. So, uh, let’s see. Arkansas is also a legit team. Really good. And congratulations to Iowa, man. They outplayed, they, they outplayed Florida the whole time. They should, they don’t deserve to lose that game. Florida deserved to lose that game, even though they took the lead late.

Frank Curzio 07:01

But awesome tournament. Looking forward to this weekend. Should be fun. With that said, let’s turn to the markets because we have a couple positive days after getting, what, four weeks of garbage and stocks getting hit. On positive news from Iran-US front,right, with two sides negotiating a ceasefire. Trump provided, what is it, a 15-point plan for a ceasefire, which includes opening the Strait of Hormuz.

Frank Curzio 07:21

So stocks up solid the past two days. Oil prices falling. They’re now around $87, $88, down 12% the past two days, just this week.

Frank Curzio 07:30

Uh, even though Iran said that there are no negotiations in progress, and even though they said after the 15-point plan, we’re not gonna accept it. And also, even after Trump said, “Hey, we’re in negotiations and everything’s good,” while he’s moving paratroops to the Middle East to back up the Marines who are already on the way there to the Middle East.

Frank Curzio 07:51

So I don’t know if this is gonna stop anytime soon. It’s good for the market right now. I’m gonna tell you exactly why it’s going up, but I wanna get your thoughts first, uh, first, uh, Daniel.

Daniel Creech 07:58

Well, yeah, it’s, uh, talking about going back and forth. And man, who was it? Is it, and I always butcher this comedian’s name. Is it Ricky Gervais? How do you, how do you say it?

Frank Curzio 08:07

Gervais.

Daniel Creech 08:08

Gervais. And he did the Oscars a few years ago. You remember he had this great standup about, “This is gonna be my last Oscars,” and all that kind of stuff. And he remembered that he talked about, “Hey, if ISIS had a reality TV channel, you’d all call your agents.” And the reason I bring that up is because it is pathetic, but you gotta learn to laugh at this.

Daniel Creech 08:26

I understand that our media and a lot of people do not like our president, but to take the opposite side, no matter what that is, whether it be on immigration or politics or taxes and now war, because as soon as Trump comes out and tweets, and you have to follow Trump’s tweets or posts if you wanna stay up to tune,

Daniel Creech 08:43

because you can’t take the headlines in media for anything, what they say. And I’m not trying to defend President Trump here. It’s going to sound like that, but that is not my intention here. My intention is to point out that it doesn’t matter what Trump says. The media, CNBC, NBC, everybody is going to take the other side right away. Case in point,

Daniel Creech 09:02

Trump says, “We’re negotiating with Iran.” CNBC and Eamon Jabbers, that guy must be one of the most miserable reporters ever. And I can’t hardly, I mean, I’m, I’m, I’ll tell you what. You talk about people that make it difficult to be Christlike. Okay. He’s like, “Well, we don’t know if we, you know, Iran, Iran says that they’re not talking with him.” Okay.

Daniel Creech 09:22

So I know a lot of people think President Trump is a terrorist. Iran are literally terrorists, and you’re taking their word for it. Trump points out, Trump gives this 15-point plan, evidently. So today, Frank, the non-negotiating Iran came back with a five-point plan. So our media says, “Well, Trump’s making everything up. He’s not negotiating anything.

Daniel Creech 09:41

He’s just trying to talk the stock market up. He’s just benefiting his friends.” But now we have Iran wants to complete halt to, quote, “aggression and assassinations.” Frank, we can spend a lot of time on this reading between the lines. They want, um, they wanna control the Strait of Hormuz. Obviously, there’s a lot of reports about paying tolls.

Daniel Creech 10:01

Um, I’ve looked into that. You gotta take everything with a grain of salt. But I think the negotiation, the fact that we got something from them, I think is a positive. Um, I can hand it back there and we can go. But I, I wanted to point that out first because you literally cannot believe anything. I mean, even check us. I mean, it’s okay to be skeptic. We just ask that if you’re gonna be skeptic, you at least listen to our answers.

Daniel Creech 10:20

That’s all. But I, I have to point that out first. Um, Frank, do you wanna talk about these trades that went through on Monday morning, evidently,right before Trump’s post on social media about that ceasefire?

Frank Curzio 10:31

What were the trades? How much, uh, went through?

Daniel Creech 10:33

Well, evidently, and I, again, take numbers with a grain of salt.

Frank Curzio 10:35

Mm-hmm.

Daniel Creech 10:38

And to set this up, markets were down. I’m gonna round up. Market futures were down about 1% across the board, if I remember correctly. Trump post on his social media about this five-day pause. They’re not gonna take out the electricity, power plant, generators, and all that kind of stuff. Markets turn around and rally up 2%, give or take, by the time market opens. Reports are, Frank,

Daniel Creech 10:56

there was a billion five, 1.5 billion in equities bought and 192 million in oil that was evidently sold short, covered, and/or backed out of oil because oil was going down, stocks going up. Frank, we know insider trading is disgusting, and it happens all the time. Doesn’t mean we’re okay with it.

Daniel Creech 11:16

But how can this not be that?

Frank Curzio 11:20

I don’t know. I mean, you know, offshore accounts, whatever you need to do to open up to, to, to prevent this trading, uh, to, to, to actually see it, um, because insider trading’s the easiest thing to get caught on. I mean, there’s records of it,right? Unless you’re really, really smart. And, and what they do is they set up trust accounts and they say, “Well, I had no idea, like the politicians,

Frank Curzio 11:39

I had no idea they were gonna buy and sell this stuff. I had no idea.” And then they look at the records and they’ve been on calls with, with their financial advisor the whole time because they’re supposed to not know what’s going on. Okay. Yeah. Uh, politicians. Okay. We believe all those guys. Uh, I thought it was also funny when you saw, you know, CalSHE Polymarket, there were new accounts created. So these accounts created for the first time. This is, um, March 24th,

Frank Curzio 11:58

March 25th,right before 24th, really before, uh, this whole conflict, before this,right? So this is really on the 23rd, but then they reported on the 24th. But they said all these new accounts were created, uh, and they bet, uh, over $160,000 on a US-Iran ceasefire by the end of March. Remember, last week, that was not even close to being on the table.

Frank Curzio 12:16

That’s why the markets were down for four straight weeks. Um, and it pays out over a million dollars,right? So now, all of a sudden, literally the next day, it comes out. So, so anyone in Garrett Kushner’s circle, anyone in Marco Rubio’s circle who’s negotiating some of these deals, you know, it just, you need one person.

Frank Curzio 12:37

And that’s why they’re really going against these, these, you know, the Polymarkets and the CalSHEs, uh, just for, you know, predictability markets and a lot of laws going out there, CNBC interviews and stuff like that. I just think it’s hilarious. I mean, it’s very easy to see this stuff, but just, um, you know, not to be able to see it on CalSHE and Polymarket of who’s making it. You see that there’s new accounts there,

Frank Curzio 12:57

but man, there’s so much insider shit going on right now. It’s so crazy. And, uh, you know, who’s jealous? The, uh, I won’t mention names, but, you know, all, all the ones that have these, uh, you know, algorithms and, and, you know, just play the market.

Daniel Creech 13:09

Oh, I thought you were gonna say already.

Frank Curzio 13:11

No, I’m not gonna mention this specific. I was gonna mention specific companies. I don’t wanna say that, but, but same thing. They’re like, “Shit, how do we get on in this?” I mean, we’ve been front-running the market for fricking 15 years in the government. We just pay them off and nobody cares. And, you know, it doesn’t matter what the company does or anything, who the CEO is, management team, where they operate, business innovation, whatever. They just front-run the market quicker than everybody else, making an absolute fortune.

Frank Curzio 13:31

It’s a reason why, you know, being in this industry for such a long time, you’re not gonna have, I think one of the biggest firms in the world, I won’t mention them, had like four losing quarters in the past 15 years, four losing quarters, or three losing quarters. Okay. There’s a reason. It’s almost like perfected,right? You’re just front-running all the orders that you see and you’re able to buy before everybody else, which is illegal, but they’re able to get away with it.

Frank Curzio 13:50

But yeah, this whole entire thing, you know, more to the point here, Daniel, is, um, you see stocks go higher, you see oil prices push lower, and that’s great. And we know that if the conflict ends, which means the Strait is open,right? That’s when the conflict’s gonna end. That, that’s gonna signal victory. If it ends, stocks gonna shoot high.

Frank Curzio 14:10

Oil prices are gonna push even lower. Uh, Trump’s needs this, needs this to happen. We all know that,right? You could say it’s a taco trade, Trump chickens out, or, or, you know, the Fed, you know, the Trump put, or whatever you wanna call it. But he needs this to happen if he wants any chance to win midterm elections. And, and, you know, also, you need gas prices lower because he talked about this and his policies, you know,

Frank Curzio 14:29

all through the first, you know, six, nine months of his presidency, saying, you know, oh, look what gasoline prices are all going to say. They’re extremely highright now. They’re $3.75, $3.80 still. They paid $3.99, almost $4 the other day. Uh, so he needs this to happen. With that said, I’m gonna say something that’s different than what everyone’s hearing. I don’t think there’s a quick solution here. Uh, there’s a lot of stuff going on under the hood.

Frank Curzio 14:51

We have access to lots of information. If you look at, no one’s paying attention to Ukraine, Russia anymore, but Ukraine just struck a key Russia oil port and refinery. I don’t know if you saw that news. And more refinery pressure,right? You see Russia just, they reroute their oil to where? India, China.

Frank Curzio 15:06

So we have Middle Eastern countriesright now that are reducing their refining operations because they can’t get oil there because the Strait’s closed. And they’re really, really pissed off because their economies were rocking and rolling. Everyone’s economy across the world was rocking and rolling. All their stock markets were up much more than us before this war. So you have, you know, India and China. You have Middle East countries who are, who are pissed off but saying,

Frank Curzio 15:25

“Okay, we got the US back,” and stuff like that. None of this shit wouldn’t happen. They wouldn’t have got bombed if we didn’t bomb Iran. That’s what they’re saying. Uh, you know, Brent has surged up over $100 a barrel. That’s not great for the Middle East, uh, believe it or not. It makes it harder. Uh, and, and it’s not good for Europe either, who imports a ton of energy. They’re having trouble getting it. And then you have India and China, also huge importers of energy, being significantly disrupted.

Frank Curzio 15:46

So you have all of these countries, many of them are allies, you know, and short of Israel, everyone’s really pissed off at us,right? The entire world. So, you know, who knows this best? Iran. Iran knows it. And remember, it’s not just oil and natural gas,right? We talked about this and some of these stocks. It’s amazing to see that, that they have these stories on CNBC,

Frank Curzio 16:05

which is why I love this podcast and love the access to information. Love that this podcast gets downloaded in over 130 countries or whatever, uh, because we get information in real time and we have a great, great network. But just, you know, learning about, telling you about fertilizer. One third of urea is transported through the Strait. And CF Industries bought a while ago, pulled back a little bit past two days because the reverse trade is happening.

Frank Curzio 16:26

But it was up, what, 35, 40%. Uh, you know, helium and necessity of semiconductor companies. I just saw that, I think, the other day on CNBC. We talked about that over two weeks ago. Uh, you know, very huge necessity for semiconductor companies, which is data centers, AI,right? Huge. The biggest trend in the world that could get impacted. Aluminum, we talked about. And now what are we seeing? Massive inflation in both CPI and PPI.

Frank Curzio 16:46

And these gauges, by the way, are lagging. These are lagging indicators. So they did not see the effects from the war in Iran yet. They’re not pricing it in. But CPI is through the roof. Interest rates are pushing high. And mortgage demand dropped like a rock, down more than 10%, uh, as mortgage rates now, 6.5%, highest in six months. Just saw Kaby Holmes. We’ll cover that in tomorrow’s podcast.

Frank Curzio 17:05

You know, report really weak numbers and warn. So Iran knows all this stuff’s going on and they’re in controlright now. You can say, “How can they be in control? We could bomb, we could bomb the shit out of them.” But all they need to do, and you know, Daniel too, is throw a few mines in the water, launch a few drones at a ship or two, and that creates massive fear where everyone’s like, “I’m not shipping through this,”right?

Frank Curzio 17:25

We have insurance rates through the roof to ensure the cargo. And Trump’s like, “Well, we’ll cover that.” Will they? Who knows? You know, but they’re at skyrocketing levels. So they don’t need to do a lot to scare the shit out of you to keep it closed, which means they came back with a five-point plan. They could dictate a lot in this agreement. So, you know, common sense tells me this is gonna go on longer than what we think unless Trump actually just says,

Frank Curzio 17:46

“Okay, we’re gonna, you know, under the table, we’ll do whatever we need to help rebuild, whatever.” But this, to me, common sense, it’s, it’s gonna go on a lot longer than what people think, Daniel. And, and, uh, Iran has a lot of control. More than you think. Yes, we took out the army. They took out the navy. We took out a lot of their leaders and stuff like that. But for the Strait is,

Frank Curzio 18:05

that is, is that, that’s, that’s the goal. If it’s open, was over. If it’s closed, we’re losing,right? And everyone’s pissed off. And it’s closed. And they could keep it closed. They showedright now that they can keep it closed. That’s why we’re trying to negotiate with them. So, you know, with that said, not going back and forth here. Have you seen the fear and greed index?

Daniel Creech 18:24

I haven’t really seen it.

Frank Curzio 18:25

I’ll put a picture up there. So extreme fear. So what that means when you’re extreme fear and based all on sentiment indicators, you know, bull pair, uh, ratio, you have, um, you know, put-call ratio, you know, just all these sentiment indicators that Vicks throws them all in and creates this fear and greed index. And extreme fear means when you’re extreme fear, it’s a contrarian indicator. You should be buying.

Frank Curzio 18:43

It’s usually a great, great time to buy. But we’ve been in extreme fear for a while now. And, uh, you know, which marks a buy rate. But we were there two, three weeks ago, two weeks ago, and we saw two more weeks of really terrible returns in stocks. Citadel put out a report two days ago, citing how we could see a massive short squeeze.

Frank Curzio 19:04

Professionals and institutions are sitting on one of the largest short positions in the history of the US stock market. So these short positions are run mostly through ETFs, meaning if, and they could flip in an instant. But if Trump comes and pulls this off and says, “Okay, you know, here’s a ceasefire and the Strait opens,” you’re gonna see this unwind. We saw,

Frank Curzio 19:22

we’re probably seeing this unwind the past two days and even a little bit into today, into today, with the markets kind of reversingright now. We’re doing taping this midday. But, you know, we could see upside. You’re looking at valuations. When you see a company like Nvidia trading at a market multiple with the S&P 500 projected to grow earnings by 15%, sales by 7%, and it’s trading at, what, 21 times earnings.

Frank Curzio 19:41

Nvidia’s trading at 22 times earnings, basically a market multiple that’s projected to grow earnings and sales by 75%. I know people are wondering, we covered this, Daniel. Why isn’t Nvidia going high? Kramer just had another meltdown. He’s so pissed off that no matter what Nvidia does, it can’t go high. It’s going to go higher eventually, because if you look at the PE ratio, price divided by earnings, the P is staying the same,

Frank Curzio 20:00

but the E is getting bigger and bigger, which means the valuation is getting more favorable. I mean, Nvidia, you’re not buying for a growth stock, even though they’re in the biggest growth market in the world. It’s one of the best value plays you could own. So instead of saying, “Oh, well, it’s not going up from here. We haven’t seen what’s gonna push it down from here.” You’re growing earnings at 75%. You’re growing sales at 75%. All these hyperscalers are still spending.

Frank Curzio 20:19

We’re hearing from all of our contents that, that are in these fields that build these things, that they’re pushing away business because they’ve never been that busy before. They just, they don’t have the capacity, which is insane. So, you know, Nvidia, eventually, that stock, I think, is gonna do what Apple did, which we said a couple weeks ago, is out of nowhere, they’re pissed off. You know, Apple didn’t get to AI. You don’t want Apple Intelligence on their phone.

Frank Curzio 20:38

And then, you know, all of a sudden, this stock went up tremendously over the past six months,right? And I think you’re gonna see it when Nvidia, this slow move higher, you know, probably 15, 20, 25%, because it’s extremely undervalued to the point where if you wanna get defensive, Nvidia is a defensive companyright now. I mean, it’s trading at a low valuation, growing earnings in the greatest trend that’s not slowing down anytime soon.

Frank Curzio 20:57

But as that E keeps getting better and better, and they just said expecting a trillion dollars in sales, what is that? 2027? Holy shit,right? So that’s not even being priced in because the stock is at the same level. You’re gonna see this name move up because more money is gonna flow into, especially from defensive sectors. I don’t wanna own a consumer stakeholder like, like Walmart trading at 40 times forward earnings.

Frank Curzio 21:18

That’s not growing as fast compared to Nvidia trading at 22, growing four or five times of what Walmart’s. And you’re gonna see money from Walmart push into Nvidia. And that’s what’s gonna push the stock up, I think, going forward. So valuations are good, but you’re gonna see this nonstop volatility, what we’re seeing, the VIX going up, going down, and Marks going up, going down, until we get the Strait open,

Frank Curzio 21:40

which, you know, unfortunately, I don’t see in the short term. You know, a lot of countries are pissed here. I don’t think that’s gonna change because I don’t know if it’s gonna, it’s gonna resolve itself in weeks, what Trump said, compared to months.

Daniel Creech 21:50

Well, that’s true. I agree with the, we’ve said that from the very beginning. I mean, it’s all about the Strait of Hormuz. That’s what separates Russia, Ukraine from US and Iran, in my opinion. Taking these five-point counters from Iran with some salt as well, I like how they talk about the Strait of Hormuz. Frank, they want damages and repudiations.

Daniel Creech 22:08

They want to be in total control and Iran’s sovereignright to exercise authority over the Strait of Hormuz. I don’t think they have as much. I think they have leverage. Don’t get me wrong, because of the narrow passageway through the Strait of Hormuz. I don’t think they have as much leverage as I can’t blame them for touting and doing their propaganda and all that everybody does.

Daniel Creech 22:27

When you look at who you just pointed out with China and Iran or China and India and such, I think that whether they like it or not, our allies or even their allies are gonna start putting more pressure on them. Um, again, not believing everything as the gospel, but listen, it seems to be more true than not true,

Daniel Creech 22:48

Frank, when President Trump says, “We have free reign over them.” And if you really want to get serious, then you would knock out some kind of power plan or whatever.

Daniel Creech 22:57

Um, I don’t see, and again, I’m no expert, but it’s hard for me to fathom, Frank, how long can I mean, you live underground. You can keep doing, you know, secret stuff. But to your point, you know, we’re almost 30 days into this. The China’s and India’s,

Daniel Creech 23:17

the people that really need the ingredients and commodities going through that, that Strait are going to put more pressure on Iran, in my opinion. We’ll see how all this plays out. I, too, unfortunately, don’t think it’s an easy fix. What I’m really kind of nervous about is, you know, Trump seems to have this playbook where, hey, you can negotiate while you move position pieces in position, you know, like chess.

Daniel Creech 23:39

Um, if we have to take over their oil fields and all that kind of stuff, I just don’t know how that goes. I think the markets are gonna be very volatile. Um, I’m impressed with stocks. I mean, Frank, if you had to guess, do you think the markets are up or down more than 5% since February 28th?

Frank Curzio 23:54

I mean, it’s probably close. I think they were.

Daniel Creech 23:56

Right, basicallyright at that.

Frank Curzio 23:57

Yeah,right.

Daniel Creech 23:57

I mean, it feels like a lot more. Don’t get me wrong. And hey, I’ve been wrong. I’m impressed that certain stocks outside of your, you know, commodities and LNG and things that Frank has highlighted is going up. But I still think it’s all about Strait of Hormuz. I think it’s okay to hold tight forright now, but, or, you know, buy your best value and stuff like that. But not only,

Daniel Creech 24:17

you know, listen, when you turn the page to midterms, historically, the current party in power gets wiped out. I think on average, they lose over 20 seats in the House in the first midterms. And it’s not just gas prices, Frank. You hit the nail on the head there. But did you see Chevron’s comments warning that California could have a real oil issue?

Frank Curzio 24:37

Yep.

Daniel Creech 24:37

Because those dummies shut down refineries left andright. They hate oil and gas.

Frank Curzio 24:40

I loved it. That was great stuff.

Daniel Creech 24:42

I’m not cheering that, but I feel I have compassion for the people there who are stuck and are paying the penalty of stupidity. And the premium of stupidity in California is off the charge more than the greed and fear index.

Frank Curzio 24:53

Yeah. No, no, I agree. I definitely agree. So, um, yeah, look, it’s we’re looking at a marketright here where it’s confusing. And when you have confusing markets, uncertainty, you’re going to see like this huge fluctuation,right, in some of the stocks in your portfolio. They could be down 10,

Frank Curzio 25:12

15% over the past month, even with the recent move higher in the past couple of days. And I get it. You know, stay the course. This is gonna resolve. It’s just, it’s a matter of when it’s gonna resolve. And I think we’re pricing inright now weeks. And if it takes months, you’re throwing interest rates come into play. And that’s a big factor here. And I think that’s why someone tapped Trump on the shoulder, you know,

Frank Curzio 25:30

and said, just like with tariffs, he’s like, hey, you know, when he first launched all the tariffs and tried to negotiate with every single country at the same time, which is a terrible thing to do, I think, you know, best in tapping on the shoulder and said, hey, you know, the bond market is, is, you know, not actingright. So you need to do something. He’s like, allright, we’ll suspend. And same thing here. Like, you’re seeing interest rates really surge. You’re seeing inflation go through the roof.

Frank Curzio 25:50

Now we’re pricing in, what, several price cuts,right, from the Fed. And now we might not even see a price cut. We’re not gonna see any hikes. People are like, oh, I’m not gonna see hikes. But, you know, higher inflation, and this is a surpriseright now, is it temporary? I don’t know, because it’s gonna go higher next month when you factor in where oil prices are, where food prices are going higher, would ag, you know, getting disrupted as well and those prices through the roof.

Frank Curzio 26:11

But yeah, it is gonna be interesting to see, because if it’s months, you could see the market pull back further. It’s gonna create a better buying opportunity. Long term, stay the cost. Short term, expect more volatility, because this is gonna last a lot longer than what people think. It’s not gonna be weeks, probably gonna be several months, because Iran knows that it does have some power here. It has control. And they could, you know, shut that Strait. You want to see the power?

Frank Curzio 26:31

It’s still shut. The US can’t get it open unless they negotiate. And that’s a big bargaining tool where they’re gonna get what they want. It’s a matter of how much the US wants to give to them. And we’ll see. And hopefully it gets resolved, because a lot of countries are really, really, really, really pissed off at usright now. And it’s not, nobody cares if it’s just the Saudis or it’s, you know, the UK or it’s just a couple of countries.

Frank Curzio 26:50

When you have like 30 or 40 nations together pissed off because their economy’s doing shitty now and these high oil prices are impacting them and they’re having trouble getting oil, you know, it gets dangerous for us when everyone else is against you,right? So we got to be careful with that as well. And hopefully this gets resolved sooner or later. I just don’t think it’s gonna be weeks. It’s gonna be months. Now, moving on here,

Frank Curzio 27:10

there’s a lot of news coming out. And I feel like it’s the same thing. But I want you to talk about the news where it comes to, you know, Circle. So Circle and Coinbase fell sharply after a new draft of the Clarity Act came out. The Clarity Act is basically the crypto bill was released. Now, this bill, which is the new draft, significantly limits the amount of yield stablecoins can generate,right?

Frank Curzio 27:32

And Circle fell hard, fell like 20%. Coinbase fell 8%. The whole basis of this bill, Daniel, is stablecoins and the yield on stable. That’s the basis of this,right? I’m not sure how this bill gets passed unless I resolve this. But it’s like passing a bill to increase infrastructure spend.

Frank Curzio 27:51

And you have clauses in it say, well, you can’t spend on roads, bridges, and dams, though, you know, and buildings. It’s like, what? It’s like, why pass this for? This is what the bill is about.

Frank Curzio 27:59

I mean, yes, you have crypto laws in there and most of the agreements there, but it’s the yield part that they can’t come to terms with, which throws this bill like, there’s no way it’s close to passing unless they’re able to have that yield on stablecoins. It’s the biggest part of this bill. What are your thoughts? Because we saw these companies, they did come back a little bit. But, you know,

Frank Curzio 28:18

it seems like we’re really far apart when it comes to this bill. And it’s a much bigger point here. I’m gonna get to in a minute, but I want to get your point just on the crypto part of it.

Daniel Creech 28:25

Yeah. So you talked about the stocks tanking yesterday. And this is just, this is just another straw on the camel’s back of idiot politicians on both sides, not taking any sides here. This is confusing because I read through this.

Daniel Creech 28:41

And evidently, Frank, what they’re saying is you can’t pass through stablecoins aren’t allowed to pay any yield for buyers that just buy the stablecoin and hold it. But there are carved out instances that you can pass through yield, I don’t have any numbers to give you.

Daniel Creech 29:00

And it’s not because I haven’t looked. It’s because I don’t want to just be silly and throw out stuff. And so they talk about, well, you can use it for payments or you can use it for different transfers and earn yield. But if Frank Curzio just wants to take some money and park it in USDC and earn whatever passed through interest, you cannot do that. This, beyond frustrating, let’s just call this what this is.

Daniel Creech 29:20

This is just keeping the banking industry’s moat intact. This is all just about lobbying dollars. And I know, because we’ve talked about it. So before you send me an email, DanielCurzioResearch.com, talking about crypto outspending lobbyists in the banking industry over certain segments and quarters and things, once you already have your hooks in the banking, crypto lobbying is new. Okay, on this timeline, Frank, we live in crypto is new.

Daniel Creech 29:43

The banking industry is the good old boys, as you always like to call them. They have their hooks in all the politicians. I think this is absolutely hilarious because anytime you see people leading in with fear in the end of the world, you should be extremely skeptical. Frank, $500 billion, you know what that number represents? Supposedly. And you see this all over the internet.

Daniel Creech 30:03

That’s how much money would leave the banking systemright away because banks don’t pay any interest. There’s a great article from Bitcoin Magazine. I’m gonna tee up here, Frank, because you like to talk about this. In 2025, US banks, they don’t break them down, but we’re talking big banks and small banks, generated roughly $434 billion in net interest income.

Daniel Creech 30:23

That’s $1,670 per adult from the research.

Frank Curzio 30:28

Net interest income is the money they make on the spread,right? So they have your deposits in there, and then they lend them out at much higher rates. And, you know, and that’s what they make their net interest income on. And, you know, rates, as you know, and this wasn’t a big part of their business when interest rates were near zero, but now it’s a big part of their business,right?

Frank Curzio 30:47

So, so much so that the last two years, the Big Four, these banks are warning and saying, hey, net interest income is gonna come down because we thought interest rates are gonna come down a lot more. They’re much higher for longer than anyone anticipated, especially from two years ago. Nobody had them staying this high. Everyone’s expecting a lot more cuts, and we’re still not getting them, which means that these guys are making more and more money.

Frank Curzio 31:05

And there’s this big underground fight that’s going on. This is a $5, $10 trillion market, and it’s a fight for yield. And we saw this during the credit crisis, Colorado mortgage obligations,right? They created something that said, hey, we could structure these products together, and we’ll pay the rating agencies to legally put AAA ratings on it. And what happens?

Frank Curzio 31:24

Because there’s literally trillions out there that’s gonna flow to a low risk, almost no risk, or a risk-free interest rate that pays the highest,right? So, you know, you could say, okay, the 10 year is there, whatever. So that would be the 10 year. But if you could provide a higher interest rate and have AAA ratings on it with no risk, you’re going to immediately get trillions of dollars into that vehicle.

Frank Curzio 31:43

And that’s what have a Colorado mortgage obligations. It ended up being $1.5 trillion, CDOs were $1.4 trillion. They were a lot smaller, but they were like, hey, you know what? Let’s leverage the shit out of this and go crazy. Let’s obviously 30 to 1 and create synthetic CDOs and all this stuff of synthetic of synthetic. And, you know, you just need a little freaking pullback. They give a margin account, a little pullback in housing at 3%,

Frank Curzio 32:02

4% correction, and you blow up the whole market,right? So all this was because of the search for yield. So that’s why you see in Circle, you see in Coinbase go down. But I’ve been telling you for a very long time, you got to own the four largest banks. I mean, because they have a moat that’s protected,right? That’s protecting them.

Frank Curzio 32:17

And I’ve loved them for a very, very long time. It’s always been a boys’ club, only issue not to be disrupted. I think these stocks are gonna pull back at least 20% over the next 12 months. That’s a reversal from what I’ve been saying. Okay, again, boys’ club, not disrupted. I’m not talking about apps and stuff like that, but no one was able to penetrate. And you want examples of that.

Frank Curzio 32:36

I mean, look what they charge: monthly maintenance fees, overdraft fees, ATM fees, wire fees are gonna charge you every fee, whatever. They’re going to create the spreads in the bond market. They make an exceptional amount of money in the investment banking fees for just being middlemen. They target people at the bottom who can’t afford to keep $5,000 or $10,000 minimum balances.

Frank Curzio 32:53

But this moat that the four majors enjoyed for such a long time, which was created by a government, you know, it’s now, you know, being penetrated. And if you don’t think it’s that big, look at what our government did to crypto in 2023,right? They debanked everyone. We got debanked. We got debanked. We don’t have any crypto company,right?

Frank Curzio 33:13

Look at Trump and conservatives,right? They threatened the banks. They threatened the banks and said, if you do business with crypto, we’re gonna audit you. I saw these letters,right? They saw these letters, and they were like, holy shit, we can’t do anything with crypto. And that’s why we got debanked. They said, you got to get out of our bank. Bank of America doesn’t matter. We have all of employee payroll and everything in a month. They gave us, they didn’t even let us talk to anyone.

Frank Curzio 33:32

They said, it doesn’t matter what you say, you got to get out. You can’t do it. We think you’re a crypto company. I’m like, are you kidding me? Because we made an investment in the metaverse two, three years ago, and it’s 0% of our revenue. You want more proof? Look at New York Community Bank. After reaching $100 billion in assets, they got punished,right? That’s another tier.

Frank Curzio 33:47

So there’s these ratios that you have to keep a certain amount of money on your balance sheet to protect against the worst conditions: a 10% market crash, you know, 15% decline in housing, you know, GDP, you know, recession and stuff. So you have to keep a certain amount of money. When you have $100 billion plus, those called, I think it’s called category four, they go even higher,right? So in New York Community Bank,

Frank Curzio 34:08

they got assets, I think, from one of the failed crypto banks, and then their assets went to $100 billion, and they got punished. They were forced to increase their loan loss reserves. They had to cut their freaking dividend. They reported a massive loss. And then it was a run in the bank, and the stock is down 95% from its highs. It changed its name to like Flagler or something. Look what happens when banks fail. What happens when banks fail? They give the assets for free to the Big Four.

Frank Curzio 34:27

Most of them, sometimes they’ll use other banks. New York Community Bank got it. But why is anybody gonna want the assets? They pushed them over $100 billion because they got assets from one of the crypto failures, one of the banks that failed, and they got punished for it. So now when a bank fails, they’re given these assets not just for free, but the bail loans that they’re given, they’re backstopped by the FDA and the Fed.

Frank Curzio 34:48

So today, those days are over. A UK company called Riff, pay attention to this, just launched the world’s first AI savings agent, which is automatically gonna move your money out of checking savings accounts, paying you zero interest, and into accounts that actually pay you. And you might be like, okay, well, why is that a big deal? Well, Jefferies has this report.

Frank Curzio 35:08

They interviewed this company, and they said that if this technology scales, which it will, zero interest launch in the UK first, zero interest account balances could drop 80%. In the UK alone, that’s $500 billion dropping to $100 billion. And the margins they collect from those deposits, they’d collapse from 190 basis points to 20. And they said that amounts,

Frank Curzio 35:28

again, it’s hard to know what that amounts to. We’re gonna tell you all the numbers. We break it down: $40 billion hit in industry revenue or roughly 80% of the entire profits generated by the five major FTSE banks. So let me say that again. One AI agent could wipe out the amount equal to 80% of the profits generated by the five major FTSE banks.

Frank Curzio 35:49

And Jefferies says this technology is not a matter of if, but when. It’s just one agent. Now, let’s look at the US banking industry and what this could do, specifically the Big Four. They generate absolute fortunes from net interest income, NII. Again, it’s some money they take for you and lend it out. And the game they’ve been playing and getting away with it because their politicians are in the pockets,

Frank Curzio 36:08

you deposit money in a checking or savings account at the Big Four. You know what they pay? They pay maybe 0.01%. I mean, look what you’re getting. I mean, you can get it. And then they take that money, which is even worse, and they turn around, lend the same money out at 5%, 6%, 20% on credit cards, auto loans, mortgages. Now, it might not sound like a big deal until you look at the numbers, which I love breaking down.

Frank Curzio 36:28

The four major banks generated combined $69 billion. You brought up that point,right? How much was it total, Daniel, in net interest income?

Daniel Creech 36:35

400 plus.

Frank Curzio 36:36

400 plus. So this is $69 billion net interest income, not for 2025, last quarter. Last quarter, $69 billion in net interest income,right? That’s what they’re doing to you. That is a massive amount of money. Amounts to more than double their total profits. So JP Morgan predicted on their call that NII is gonna be over $100 billion in 2026.

Frank Curzio 36:56

I guarantee you this. That’s supposed to use a guarantee in business. I guarantee you this. I’ll double and triple down that JP Morgan and Jamie Dimon, they’re gonna revise that forecast sharply lower. Because this money they’re basically stealing from you, it can now be pushed into one-year treasuries, earning 3.7% in interestright now,

Frank Curzio 37:14

automatically be pushed into money accounts at Robinhood or Interactive Brokers, earning 3%. Yes, you might have an open account there, but you’re gonna have these AI saving agents,right? These savings agents taking money automatically and pushing it to wherever it’s gonna earn the high interest. And they’re doing this on a daily basis. So you might have one account, then it’s gonna go into another account,

Frank Curzio 37:33

it’s gonna go into another, but you’re gonna be generating the highest interest possible when they’re paying you 0.01% to four banks, not all the banks, just the majors. That’s an F you to everyone else. So the next 12 months, I really think this is gonna impact. They’re saying, you know, in UK first, this is happening now. This is the massive disruption that you’re seeing that’s causing so many of these companies to lay off 20%,

Frank Curzio 37:54

30%, 40% of their staffs. This is happening as well. You’re gonna see margins get compressed in the banking industry. I would say over the next 12 months, it maybe doesn’t happen for six months or nine months, but they’re gonna start talking about it. And then when you’re talking about it, something’s gonna happen. It gets inflected in the stock prices, and you’re gonna see these banking profits. They’re going to start lowering their profits. They’re gonna start shrinking.

Frank Curzio 38:14

And a lot of this is because of this free money, which is $10 trillion in assets that are in checking and money market accounts in the US. Okay, some of them, that all $10 trillion aren’t 0.01%, but $10 trillion, you got to figure a few trillion of that is money that could really hurt them, that they generate in the highest margins are, that that business is not gonna be around.

Frank Curzio 38:34

It may be around slowly. Some people might be like, I don’t care. I care. I move my accounts from all my savings accounts that I have in all my banks, and I move to Interactive Brokers. If you have more than $100,000 there, I don’t get paid by Interactive Brokers, but I’m earning 3.5% just for keeping it in a money market account and not trading. I’d rather have that than have it in the banks, and they’re taking my money, lending out, and making an absolute fortune. That’s better for me.

Daniel Creech 38:56

Oh, I agree. That’s better for you. I will be surprised to see how this catches on and does this. So that it’s embarrassing, but it’s difficult to make people take a few steps, jump through a few hoops to do something. You know, if like, I’ve told many people, well, credit cards, you know, oh, I hate my credit card. I hate my credit card rewards.

Daniel Creech 39:15

There’s a million options of credit cards to do anything you want on the rewards side. We’re not talking about getting in debt and paying interest. We’re talking about paying it off every month. Yet how many people refuse to jump to a different credit card? Because it’s a hassle. I get it, or even change bank accounts. Now, I don’t keep a whole lot of cash. So, you know, I’m not in Frank’s category over there. Just kidding, boss. But I mean,

Daniel Creech 39:34

listen, I’ll admit this, Bank of America, I keep very little cash in one little account, but I haven’t moved from Bank of America since they screwed us. That pisses me off. But you know what? I’m lazy because why do I want to keep very little in anywhere? I don’t make any money off of it. I should do it just as a thumb up. But hey, so I’ll be interested to see that. Also, Frank, I just don’t know how, if you could save me money and earn me money,

Daniel Creech 39:55

I get it. But even to get me, in my silliness, to trust this AI agent hopping around, I’m not saying it can’t be done. I know the tech is there, and I’m not disagreeing with you for the sake of disagreeing.

Daniel Creech 40:05

I just want to know what’s your opinion on this scalability? And not only can’t it be, I believe you on the tech can scale. But do you think there’s any hesitancy with people, or do you think they’re just gonna see, hey, this is good for me because it’s gonna get me the best interest, and I’m going for it?

Frank Curzio 40:21

They’re gonna do that. Yeah. Now you’re seeing it because even, you know, whether it’s the Zells and the Yes to Hooked Up to your bank accounts, it’s just with digital markets. That’s why with crypto, a lot of it’s bullshit. 92%, you know, we always say it’s bullshit, but the technology behind it, these are really software companies that allow you to transfer payments for free. Like, why am I paying $30 every single time I have to send a wire?

Frank Curzio 40:41

You know, why am I paying? Why am I paying all these massive fees for them to have my money in their bank? And you don’t need that anymore,right? There’s so many different options. Butright now, do people gonna use crypto? No, it’s a learning curve. They’re a little nervous about it. But, you know, these are real AI agents and real companies that are gonna come out and say, hey, you know, they’re gonna be advertising like crazy and say, why are you keeping your money in savings?

Frank Curzio 41:00

Hey? And they put together, like, and I don’t know if I took a picture of this. I’m gonna see really quick. I thought I did.

Frank Curzio 41:11

Yeah, I do. Okay, so this is a bank yields chartright here, if you guys can see. So it’s basically, it’s big bank versus high yield and the earnings gap. And it shows earning at 0.01. It has 5,000, 10,000, 15,000, 25,000, 50,000, and has three columns next to it. For those of you not watching on channels at YouTube or Spotify, so earnings at 0.01%,

Frank Curzio 41:30

they show 50 cents, the difference after one year on 5,212, the difference after one year. So you’re earning 50 cents a year on 0.01 compared to $212. That’s just for 5,000 after a year. And that’s at a 4.25 average percentage yield.

Frank Curzio 41:48

At 50,000, if you have $50,000 in your account at a bank earning, they’re giving you 0.01, you’re making $5. Okay, I know, because I have some money there, and you have to do your taxes. They send you taxes, like, like, you know, $10,000. So funny. You get that. It’s like 12 bucks in interest. Okay, if you’re earning 4.25%, and even if it’s lower, but they’d say at 4.25%, that $50,000,

Frank Curzio 42:07

instead of earning $5, you’re earning $2,125. It’s free for keeping your money in the account. You’re not doing anything. You’re just parking in a different place, a legit place,right? I mean, the difference is that is over $2,000, $2,100, which is a huge difference. Why wouldn’t you do that,right? So when you have something that’s cheaper, that’s faster, that’s easier,

Frank Curzio 42:27

it’s the easier part that you’re going to see happen over the next 12 months. Because the idea is there. They know how to generate. They know how to create AI agents. They’re just gonna get better and better and better. We know we’re very much into AI. We have a systemright now that’s working incredible for us in terms of releasing content. Everything that I said was downloaded in there. We’re able to post on all social media channels much, much faster.

Frank Curzio 42:46

It’s amazing. They’re just gonna get better and better and better,right? So, you know, with the banks, this is going to hurt them. It’s definitely gonna hurt them. Yes, they have politicians in their pockets. They’re gonna provide laws. These are the people that make the laws, by the way, the politicians, and maybe provide just like they’re trying to get rid of and try not to have the prediction companies, the prediction markets operate in certain states.

Frank Curzio 43:05

Again, they have the ability to do that. But eventually, this change is coming. And like the banks, they said, holy shit, we’re not ready for crypto. Let’s just shut down the crypto industry. Now they’re talking about, okay, we’re releasing our own stablecoins,right? Which is funny. Remember JP Morgan? Bitcoin’s a joke. It’s worthless. Is it now? You know, they’re fully engaged,right? So, you know, that’s what you’re gonna see. Now, the last story here I want to talk about is Disney.

Frank Curzio 43:28

This poor company has no luck. Even when it changes its ways, it has no luck. And they’re very, very stubborn. I’ll go over that. But OpenAI came out and said, look, we’re gonna cancel the video deal with Disney. I have to shut down Sora. So Disney was gonna pay a billion dollars to OpenAI for the partnership. But that billion dollars was going to go into OpenAI. And this is before they just raised money,right, Daniel?

Frank Curzio 43:48

If I’m not mistaken, they just raised money or no? OpenAI.

Daniel Creech 43:50

Yeah, supposedly the CFO of OpenAI, Sarah, is it Friar? I don’t have it in front of me. I apologize. Went on your boy show last night, Jimmy, Jimmy Kramer, and was talking about how they raised an additional, I believe she said, over $10 billion, which brings the funding, I believe she said, over $120 billion. Frank, I’ve seen valuations at $850 billion for OpenAI.

Daniel Creech 44:12

Yeah. So this was recent. This was on, like I said, Jim Kramer’s show.

Frank Curzio 44:15

Yeah. And for those of you who think this is like, oh, this is a big bubble, and this is crazy, I’m gonna tell you something, okay? The smartest people, this company just raised $120 billion a couple days ago in funding. They wanted.

Daniel Creech 44:26

No, that’s total. I’m sorry, 10, but they’ve raised a total.

Frank Curzio 44:30

Raised $120 in funding, exceeding the $100 billion target,right? So this is just from this funding round, I think, what I’m reading here. So regardless, they said the ongoing funding round includes, you know who’s investing in it. So basically, if you think that this trend is overdone, if you think it’s gonna crash, if you think it’s,

Frank Curzio 44:49

so basically, so Amazon invested $50 billion, Nvidia invested $30 billion, SoftBank invested $30 billion, and it’s valuing the firm now at $840 billion,right? And Disney did this deal in December. So they were gonna get in ahead of this. And I bet you probably, if I had to guess, maybe $600 billion valuation then, because now, you know, your capital raise, every time you raise capital,

Frank Curzio 45:08

that’s how you know how much the valuation is. But in December, it was lower,right? I don’t know, you know, I could find that if I looked. But that’s where Disney had the valuation, invested $1 billion in this company, and then allowing Sora to go use all the characters and everything and post them whenever they want. I thought it was a great deal. And now this is gone. But, you know, just to see this $120 billion of funding that they just did is incredible.

Frank Curzio 45:29

So, and even better is, you know, rumors are out there that they’re gonna plan an IPO in the next 18 months, even though they just raised money. Okay, IPO is a way for all those guys who are in it. That’s a liquidity period for them to get the hell out and sell to retail investors.

Frank Curzio 45:40

But, you know, for these guys that really, you’re talking about the smartest companies, smartest people in the world, smartest engineers, you know, that have been deadright on AI this whole time are investing a ton of money in this still,right?

Frank Curzio 45:50

So now Disney, when they announced this deal, I was proud of them, because, you know, they became the first major studio to license intellectual property to OpenAI and to use it in AI video tools. And now, you know, they’re shutting it down because they’re like, okay, they can’t really monetize it. And it’s a little crazy and whatever.

Daniel Creech 46:10

And it was overblown. It was not, I’m sorry.

Frank Curzio 46:12

I mean, it was cool. I like watching the videos, but they couldn’t make money off it. It gets shot pretty, pretty easily. But I really like, I like the ones when Trump and slapping the President of Venezuela, when they’re in the audience, all you see, you know, elephants jumping on freaking trampolines and doing flips. And it looks so, it’s like, holy cow, it’s so funny. I mean, it’s really good. Now they shut down,

Frank Curzio 46:31

which kind of sucks, but gotta find other forms of entertainment. But Disney always had a major problem, and they’re control freaks,right? And they used to control everyone. And it’s the same way ESPN has run. I don’t know if you know this, Daniel, but they never wanted, and it’s from Dan Patrick. You hear it from Pat McAfee. They’ve all said this through the years. And Pat McAfee’s kind of new.

Frank Curzio 46:50

But, you know, you look back at that talent, they never wanted one person to be bigger than that brand. So if anyone got really popular, they’re like, allright, we’re not, you know, they kind of like, not that they shipped them out, but they just, they almost like beat them down. And it’s why so much talent has left ESPN once they really got popular, and even Pat McAfee. So they tried to shut down Pat McAfee, this insider at Disney, and he came on his radio show.

Frank Curzio 47:10

And by the way, he has one of the biggest podcast followings being broadcast for ESPN. The ratings for Game Day have gone through the roof. He’s entertaining as hell. He’s jumping in freaking, you know, off of the platforms in Miami and stuff into the pool and stuff and underway. He’s like crazy. He’s funny. He’s entertaining. But they wanted to shut him down because he started getting so popular, and he fought back. He announced the names around his podcast,

Frank Curzio 47:29

said, this guy is trying to fight me down, this guy, like, he wentright after him. And everyone was like, whoa. And they backed down. But, you know, another ego moment that Disney had was Harry Potter, and they made a big mistake here. So J.K. Rowling went to Disney first to open Harry Potter and have the Harry Potter world inside of Disney. And you know what they told? They said, okay, we’ll do it, but you’re not gonna have any control.

Frank Curzio 47:50

So we’re gonna build the world the way Disney wants, and we’re gonna sell Disney products like crazy. And she was like, I don’t want you to do that. No, don’t do that. So she went to Universal, FU. No, I want control of this. And that’s her brand,right? That’s fine. So she opened at Universal. Universal gave her full control, best decision ever for her.

Frank Curzio 48:09

She got exactly what she wanted, made a fortune,right? More and more people have seen those movies. While traffic at Universal, holy cow, increased by more than 50% in the first year it opened, they boosted revenue significantly. They were never really in competition with Universal Studios, with their parks, with Disney. Now they are,right? They’re seeing massive increase in traffic.

Frank Curzio 48:27

And you could blame it a little bit on Disney for going to walk route a little bit. But Disney no longer has that power to demand anything they want when it comes to content or high reactions and actors. And, you know, we’ve seen them, you know, Chapik, the former CEO, getting into fights and stuff like that with who’s the girl that’s married to the guy in Saturday Night Live?

Frank Curzio 48:48

I love her too. She’s a great, scared actress. She was one of the superheroes.

Daniel Creech 48:52

I don’t know.

Frank Curzio 48:53

Scarlett Johansson. And they went after her. They went after her because I think she didn’t want some of the content shown or whatever she wanted to get paid. And they went after her. They actually did the woke thing and tried to really go after her. But when you have Netflix, when you have Apple TV, when you have YouTube, which is Google, and you have Prime, which is Amazon, these are companies that have much, much deeper pockets.

Frank Curzio 49:12

And man, they treat their actors amazing and give them rights and give them, and everyone loves working for them because it’s a much easier experience than dealing with the studio. So Disney, I was always like, avoid them. The streaming doesn’t make sense. They can never compete in streaming. Nobody says that still on TV, even though the best content comes out in movies first. They’re cutting content spending. They’re increasing their costs for streaming higher than anyone else.

Frank Curzio 49:32

So they’re providing a much worse experience, doing commercials all over it, having less content. And your best content comes out in movies first, and you’re charging them more, which is just gonna lead to more cancellations,right? Yes, you got profits up, and you left good eye good. This way, you could, you know, have a checkmark on your name and said, look what I did.

Frank Curzio 49:47

But your current solution is gonna destroy that company in the next couple of years, because profits are gonna get killed unless they get out of streaming or just find a way to license the content. With that said, Disney, you know, came out of that show and said, okay, we’re gonna be the first studio to sign AI. And I was like, you know, a little bullish and saying, hey, this could be, this could be it. And sure enough, with Disney, I mean,

Frank Curzio 50:06

here’s a chart, guys, if you want to see it since 2016. 2016, the stock traded at 98. It trades at 98 today. Okay? And there’s in 2020 and Chapit, when everything was closed, and he was saying, oh, with all these subscribers, we got more subscribers coming in, 100 million, 150, 200 million. Nobody decided to look at average revenue per user. Nobody cared. And good for him. That was the KPI everyone was looking at.

Frank Curzio 50:25

We just want to see more and more and more, because Disney’s good at monetizing their people. And they figured, oh, wait a second, these people, they’re getting charged $2 a month because they’re all international and star clients. That’s they put them in a star division. Now they restructured their division. Now they’re saying they’re not gonna report subscriber numbers, which is the biggest red flag ever, which means that there’s gonna be a ton that are gonna get, gonna leave the platform.

Frank Curzio 50:45

And they’ll make it up because they’re raising prices. And it’s almost impossible to cancel Disney streaming. You’ve got a better shot at robbing, you know, a bank than finding out how to just cancel your subscription on Disney. It’s amazing. Try to cancel your subscription. You gotta go through like 20 different. It’s almost impossible. And then when you call someone, they’re gonna leave you on hold forever. So you can’t. But, you know, that’s gonna change.

Frank Curzio 51:04

But Disney, man, I really was happy on this deal, Daniel. I really was. And to see this deal getting canceled, look, you talk with the big boys now. Now you’re investing in OpenAI, $1 billion. And December, that valuation was lower than it is, and they just raised money. Getting into AI, and it’s just, man, it’s a setback for Disney, pretty big. The stock is down today. I was just surprised to see that whole thing.

Frank Curzio 51:23

You know, they finally came out of their shell, and this didn’t work. But hopefully, you have the management team in there, which, again, I don’t agree with the new CEO, because he was great at parks, which is their best division. And now you’re taking the guy who’s great, and now you’re throwing all the shit at him at the same time. I would just love him to be there because he generates most of the profits for you. Maybe he does a good job, but I don’t know.

Frank Curzio 51:43

I don’t know. It’s just Disney still enchantles here. And I just, I don’t see the catalyst here for this company to be buying shares when Netflix, now that that deal’s no longer available, that now they took Time Warner off, now they’re gonna be talking about advertising. It’s still under 100. I think, I think Netflix has a ton, a ton of upside going forward here. And we’ll get back to the 120, 130 level in the next six to nine months.

Daniel Creech 52:03

I still am in the island by myself and confused as can be. I cannot believe anybody gives Sam Altman billions of dollars like this. Microsoft is evidently about to sue or go into court with OpenAI over this, what you just referred to as the Amazon’s $50 billion deal on, you know, breaching their cloud or partnership,

Daniel Creech 52:24

exclusive partnership, and all that. I don’t know what to believe. You take everything with a grain of salt. I’m sorry I repeat myself all the time and say that. However, I just continue to listen to interviews and watch this gentleman. And I would not touch him with a 10-foot Florida pole myself. But I understand greed is good. We all have it in us. And if you invest in this company and you’re looking to cash out when they IPO,

Daniel Creech 52:43

I’d tip my head off to you. But there is absolutely no way I would give a damn dime to them, Frank.

Frank Curzio 52:49

Yeah.

Daniel Creech 52:49

I’m boring, though, and the world can go without me.

Frank Curzio 52:51

Well, I mean, you gotta give money to one of them.

Daniel Creech 52:54

Yeah. But I would pick the lowest hanging fruit, not the.

Frank Curzio 52:57

No, I mean, whether it’s, you know, Claude, whether it’s, you know, Gemini, whether it’s OpenAI. I mean, you gotta partner with these guys because we’re seeing the effects of this. I’ve never seen anything like this. I mean, we’re producing content and news incredibly, so fast. And it’s in my words. It’s a lot.

Frank Curzio 53:15

You really have to hire theright people to actually do this for you. And it’s hard. But, you know, when you figure that part out and you’re able to generate massive amounts of content, it’s, you know, not really for us because we don’t have a huge staff here. But, you know, you could see from some of these people who do generate content or have a lot of content out there, and a lot of places don’t have great content. They, you know, that’s one of the things we pride ourselves on.

Frank Curzio 53:34

I think as a business, it’s always harder to get the traffic. We’ve always had really good original content, which is why this podcast, you know, again, numbers keep going up and up and up and up and up. You know, in terms of viewership, we’ve done this for such a long time. But yeah, just when it comes to AI and you figure that part out, it’s, you know, a lot of these companies, you have to sign with someone. You have to sign with someone, or you could be left out significantly.

Frank Curzio 53:55

And if there’s any indication of what this means, look at Google. I mean, 18 months ago, I’m like, two years ago, I’m like, wow, this is good. Like, search, like, you don’t need to search anything. You do everything through AI. Wow, Google’s in a lot of trouble. Transform their home business, launch Gemini, that 2.0, which was over a year ago now, I think it’s 3.5. They added a trillion dollars in market cap.

Frank Curzio 54:14

You want to talk about why it’s worth putting money into this? Because now Google’s signing deals with everyone because they have one of the best AI platforms. OpenAI, unfortunately, partnered with the wrong company with Microsoft. And Microsoft is getting hurtright now. You know, the Barron’s cover might be, you know, hey, just shut up and buy it, whatever it said. Be careful here. I mean, it is a software company. It’s getting disrupted.

Frank Curzio 54:33

OpenAI used to be like this great partnership. But now you have this, you know, this suing because they violate their exclusive cloud partnership with AI. They still have a $13 billion partnership. But OpenAI wants to go everywhereright now. And they’re not doing it through Microsoft. So, and, you know, I don’t know. I think the one hyperscaler that’s being left out here that you have to worry about is Microsoftright now.

Frank Curzio 54:53

I think their business model is severely threatened. They’re arguing with the wrong people. Again, they’ve always had great, but we have a CEO that’s unbelievable at cloud AI. You know, hey, we don’t know too much about AI. Let’s partner with OpenAI. But, you know, you’re putting it through your, you know, 360 systems and Word and stuff like that and Excel and all this stuff.

Frank Curzio 55:12

And again, you can create all this stuff very easily in two seconds through other AI models. There’s so much competition out there now. So it is going to be interesting how this plays out. But it looks like Microsoft today, just like Google, which Alphabet was two years ago, was the loser. But who knows? Microsoft does have hundreds of billions of dollars that they could use to, you know, partner with anyone, do whatever they want,

Frank Curzio 55:31

hire whoever they want, and poach anyone they want. So, but their timeright now, they’re at a critical stage, Microsoft. They got to do something. It’s got to be game changing because they’re being left behindright now as hyperscalers. AWS is spending money on everything. Yes, they had some outages, but that stock has not really moved. I think that’s the next stock that you see a massive push higher in terms of valuation in the stock price,

Frank Curzio 55:52

just like we saw with Google, because, man, they’re doing everythingright, partnering with theright people. And that stock really hasn’t moved at all over the past year or so. So I think they’re ready to push a lot forward because the numbers have been pretty good.

Daniel Creech 56:03

I’ll leave you with an interesting stat. And since we’re talking about crazy characters, remember old Sam Bankman-Fried? Remember that chia pet looking mother?

Frank Curzio 56:11

Yeah. Guy’s genius.

Daniel Creech 56:12

Yeah, he was. Frank, April 2022, they invested $500 million in Anthropic. What do you think that’d be worth today? $30 billion, my friend. That’s a quick Google AI overview. So if they’re wrong, email Google.

Frank Curzio 56:24

I think that’s the only bankruptcy I’ve ever seen where people got paid back more money than they put in.

Daniel Creech 56:28

I will say.

Frank Curzio 56:29

Using like $0.10 on a dollar, they probably got like 200% on a dollar.

Daniel Creech 56:32

I’m not trying to defend Mr. Sam for doing what he did and, you know, allegedly and then guilty and all that kind of stuff. However, there is a lot of craziness there in that whole, the way that went down. But that’s for another day.

Frank Curzio 56:45

I’m looking at himright before we go here.

Frank Curzio 56:49

Get paid after bankruptcy. I want to see how much they got paid.

Daniel Creech 56:53

But yeah, $30 billion.

Frank Curzio 56:54

A lot of his investments.

Daniel Creech 56:54

The FTX clients. So FTX clients are set to receive. Remember, when a company goes bankrupt, you usually get nothing,right? Maybe you get a little bit if you had the bonds, whatever.

Frank Curzio 57:02

I’m gonna say, Frank.

Daniel Creech 57:03

You get it.

Frank Curzio 57:04

You know how much they got? You know how much they got?

Daniel Creech 57:06

FTX clients are set to receive between 118% and 140% of their claimed values in cash, in cash, with 98% of creditors receiving at least 119%. Wow. That didn’t get reported near as much.

Frank Curzio 57:21

No, yeah. It’s a bankrupt company. They’re robbing everyone and all this stuff.

Daniel Creech 57:24

They’re getting cash issues and funds. Well, anyway.

Frank Curzio 57:26

What happened really quick, almost at the end here, is when they valued this, they valued it as the cryptos. They didn’t. So they said, okay, these cryptos and FTX and everything went down. They didn’t value how much they actually, like the crypto investments. They didn’t look at the investment point,right? So they’re looking at how much money was in the bank and how much money they looked. But the investments you have to throw in there on the asset line.

Frank Curzio 57:45

And when you threw it on there, the company was not bankrupt at all. They just closed it. And they needed to close it because politically, you’re looking at a guy that donated a lot to a certain campaign, one of the sides. You guys know which side. If I say it, people think I’m biased. But Democrats, I’ll say it, funded a lot of money, right? Just pushed a lot of money that way. And all of a sudden,

Frank Curzio 58:03

they were like, okay, we need to diffuse the situation as quick as possible. And this is what you get. But again, no one’s going to talk about it later. But when could you? Anyone, anyone out there? We have tons, tons of viewership, hundreds of thousands of people,right? So it’s, have you ever seen a bankruptcy pay you back more than 100% of your money? I’ve never seen that. They’re not even paying 100.

Frank Curzio 58:21

They’re paying between 120 and 140%, which is remarkable. It just shows you, you know, a lot of shit goes on under the hood that you really don’t know. But the numbers don’t lie. And when you have access to those numbers, this is what you see. So it is incredible. Allright, guys, look, that’s it for us. Questions, comments, always feel free to reach out to us personally. Frank@CurzioResearch.com. Daniel, what is your email?

Daniel Creech 58:40

Daniel@CurzioResearch.com.

Frank Curzio 58:42

Allright, guys, that’s it for us. And we’ll see you tomorrow on Wall Street Unplugged. Premium. Take care.

Announcer 58:47

Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.