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Announcer 00:00

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Frank Curzio 00:11

How’s it going out there? It’s Wednesday, June 10th.

Frank Curzio 00:14

And I’m Frank Curzio with the Wall Street Unplugged podcast, where we bring you the headlines and, uh, tell you what’s really moving these markets. Deal Creech, how’s it going today?

Daniel Creech 00:28

It’s going excellent, Frank. It’s another beautiful Wednesday.

Frank Curzio 00:30

You know, I got to be honest with you. Usually, uh, I have my nephew who’s running, like, operations behind the scenes, so he tapes everything. I used to do everything myself, right? Every all the pictures you see, even the live events, everything on the technology side. So he’s been doing it for such a long time, but he has, like, three weddings in a row that he has to go to back in New York. So now I’m forced to do it again, and I’m a little lost. So if I actually, yeah,

Frank Curzio 00:49

if I so if my camerawork is not on you correctly or whatever, yeah, that’s going to be, uh, you know, it’s going to be different controlling the cameras and everything. But yeah, very interesting.

Daniel Creech 00:56

Yeah. Just put up, like, a chart or a cartoon or something to entertain people then, Frank.

Frank Curzio 01:00

Yeah. Yeah. So the little things, right? Yeah. You forget so quickly. But holy cow. Anyway, uh, a lot going on with the markets. A lot going on with California elections. Pretty hot topic there. I mean, I feel like I feel like the Democrats in California,

Frank Curzio 01:19

they’re like, “We’re cheating, and we don’t even care if you know.” Like, we don’t even care anymore, right? It’s just like.

Daniel Creech 01:25

You got to fill me in here, Frank.

Frank Curzio 01:26

It just it just I mean, it’s Spencer Pratt, and Spencer Pratt is not, you know if you know his history, whatever, um, you should be proud of I don’t know. Anyway, I’m not a Spencer Pratt fan. But the fact that he was gaining traction through all his videos and everything with California and stuff like that, and he was, like, clearly in second, of course, they did what they did, like, you know, in 2020, Trump. And if you question it,

Frank Curzio 01:45

you know, they ruined your career and everything. But.

Daniel Creech 01:47

Oh boy. We’re going to have to.

Frank Curzio 01:48

Yeah. They shut it down and said yeah. They shut it down and said, “Okay.” And he’s in a good second. But we got to shut it down because we’re not allowed to count the votes on the day of you know, only third-world countries do that. And other countries in some states, of course, Florida does it. We know the results of Florida right away after the debacle that happened in whatever election it was with Al Gore and Bush.

Daniel Creech 02:05

The hanging chad.

Frank Curzio 02:06

Yeah. So now it’s very simple. You show your ID. You fill it out. Then before you they even accept it, they make sure all the boxes are filled out correctly. And they’re like, “Okay. Boom.” You know, it’s good. Like, they put it in, and they say, “Okay. It came back okay. And you’re good.” And pretty much an hour later, you know, the results. They can’t do that in California, so. Um, and they have all the results. Now it’s the top two to go into a runoff,

Frank Curzio 02:25

and Spencer Pratt has now fallen to third after the votes came in. And he got, like, zero of the mail-in votes, of course, which is funny. And the third-place finisher actually, I think, dropped out of the race and.

Daniel Creech 02:35

Oh.

Frank Curzio 02:35

Was had, like, this crying speech and everything. And now all of a sudden, she’s, like, more popular than anyone in the world after the mail-in ballots came in. So it’s kind of.

Daniel Creech 02:42

Now, help me out here. I’ve seen Trump rant on his post on social media about mail-in ballots. So essentially, what we’re saying here I haven’t been following this, but.

Frank Curzio 02:52

Yeah.

Daniel Creech 02:52

So he had a he was in the running. They stopped. And then once the mail-in ballots come in, they count. And now he’s nowhere to be found.

Frank Curzio 02:58

And now they count. And the mail-in ballots should be counted on the same day, right? That’d be in early. But they’re not. They’re counted after they see the results of how many votes they probably need to win. And then they go, “Okay. Oh, wait. We needed 25,000 votes.” Oh my God. He got 26,000. How many did Spencer Pratt get? Zero.

Daniel Creech 03:11

At curzio-research.com?

Frank Curzio 03:13

Yeah. But the best thing is, is there’s a video servicing, too, which guys are going around toll, like, the homeless areas. And they’re going to these people, and they’re saying, “Has anyone approached you to vote?” And they’re like, “Yeah. They gave me $5 to vote for Karen Bass.” And, you know, they basically all strung out on drugs. And they’re like, “Yeah. They gave me $2, but I talked them up to $4.” I mean, they can’t even give these people, like, $200 to vote. Like, if you’re going to.

Daniel Creech 03:32

Frank. They’re homeless.

Frank Curzio 03:32

You’re going to give them $200 for.

Daniel Creech 03:33

They gave him two bucks and, you know, which is crazy. But I know people get pissed at that. But just how do you not show ID? I mean, if that’s the case, if you think it’s racist racist or whatever you call it, then I guess you should sue every airline, right? Because you have to show your ID to get on an airplane. It’s just you want fair elections. It doesn’t matter who wins or whatever, but you just want them to be fair. It’s just it’s crazy when you shut them down,

Daniel Creech 03:53

and then all of a sudden, things change afterwards. So yeah, it’s been crazy on the California front. But again, that’s never going to change. And no matter how much people complain about it, there’s nothing you could do about it. You never got to show your license there or ID or whatever. And that’s just the way it is. It’s just they don’t even hide it anymore. They don’t care. It’s just it’s not even like, “Hey, you know, don’t say anything.” No. They’re like, “Nope.

Daniel Creech 04:11

We’re going to cheat. Here you go.” It’s just it really is insane. So I don’t know. You know, whatever it is in California is whatever it is in California. And yes, I love California. I think it’s a beautiful state. It’s just, yeah, the politics. And it’s not just Democrats, Republicans back and forth, this nonsense of, you know, you have to hate the other side no matter what, right?

Daniel Creech 04:30

You can’t just be realistic and be like, “Okay. Hey, you know, I do adopt some Democratic policies and some, you know, policies from Republicans.” No. It’s, you know, all or none, or we are going to castrate you. That’s it. It’s we’re not supporting you at all. That’s why. If you look at the party lines and how they vote, they’re like, “If you go against that, you get no funding.

Daniel Creech 04:48

You’re not going to if you’re a Republican and you go against anything that Donald Trump says, you’re not going to get his endorsement.” And they show nearly 100%. I think one of the one of the recent elections I forgot one of the states or one of the first times where he, through his support behind, he didn’t win, right? That candidate didn’t win as a Republican. So he wins almost 100% of the time.

Daniel Creech 05:07

But if you don’t support those big guys and those ideas, it’s still like, “Nope. We’re not going to fund you. We’re going to go against you. We already have profiles of everything that you’ve done, and we’ll release that to the public.” And that’s what you see. It’s, it’s man, you got to be a different breed to really be a politician in this world. And I think people are just getting sick of it and tired of it.

Daniel Creech 05:26

But yeah, it definitely is frustrating, but. Sick and tired of being sick and tired, Frank.

Frank Curzio 05:30

Sick and tired of being sick and tired. Even Elizabeth Warren was on CNBC today making a rounds. And I don’t know if she was actually on CNBC, but she came out with a note today. She wants to delay the SpaceX IPO. She wants to delay. She hates.

Daniel Creech 05:44

What’s up with that?

Frank Curzio 05:45

I don’t know. She.

Daniel Creech 05:46

I didn’t even see that.

Frank Curzio 05:46

She hates I mean, she hates Elon Musk. She hates Elon Musk more than she hates America, I think. You know, I mean, she wants to break up every company, opposes everything for corporate, wants to tax the crap out of corporate America, including adding a tax on unrealized gains. I think if you’re in finance, you understand that is. If you support that, either you’re getting bribed by someone and getting tons of money,

Frank Curzio 06:06

which, okay, that’s what you choose to do, or you’re just a complete and utter idiot to do that. You know, it’s like imagine, imagine, like, say if AI falls like 30% from here, you know, you would tax on your unrealized gains.

Daniel Creech 06:17

Yeah. For sure.

Frank Curzio 06:18

Right? Holy shit. Like, unrealized gains. So you didn’t sell the stock yet, and you’re going to be taxed at the end of the year or the end of 2025. And I mean, imagine getting taxed on a good example. Imagine getting taxed on Bitcoin. Unrealized gains, you didn’t sell at the end of 2025, right? Now you’re down. Not only did you get taxed, right? The max rate, you got to get nailed, right? Because, you know,

Frank Curzio 06:36

whatever it is, whatever the tax rates are going to be, 25%. I don’t know if it’s short-term, if it’s going to be unrealized gains, too, which would be, you know, 45%. But, uh, and now it’s down tremendously, right? Holy shit. I mean, that’s what it that’s a good example of, you know, trying to tax unrealized gains. But she did have a letter, and I got to give her a little credit because she said this.

Frank Curzio 06:55

No reason to delay the IPO, but she goes, uh, saying that, you know, the $1.75 trillion valuation for SpaceX, it would be the seventh largest company. But if you rank it based on revenue, $19 billion a year, it’s ranked not even at 200, the S&P 500, or on par with General Mills. And I think she said, “Who sells lucky charms?” or something like that.

Frank Curzio 07:16

So I’m not sure why that Warren’s a delay in the IPO. I mean, you know, based on that thesis, you’re saying SpaceX should never IPO unless the valuation came down 70%, and the valuation is determined by the market, not based on hog control or, you know, how she wants to control the stocks of the market. But I thought that was funny when she compared the revenue. We talked about the revenue. It’s scary.

Frank Curzio 07:35

I mean, they’re losing they lost $4.5 billion in the last three months. So if you take that run rate of 12 months, they’re losing more money than they’re generating in revenue right now. And you’re talking about a $1.7 trillion valuation. We’re not talking about Anthropic that’s coming out. Anthropic has massive growth. Everyone’s using it. Coding disruptive. OpenAI would take, you know, we’ll talk about this a little bit later.

Frank Curzio 07:55

It’s taken a little bit of a step back, seeing less growth. But out of those three companies, Anthropic seems like, okay, at least you have a company that’s just growing out of its just insane growth where you’re not really seeing that insane growth inside SpaceX or OpenAI. And they’re coming out at IPOs, which we explain is a liquidity event.

Frank Curzio 08:15

Those are liquidity events. That’s when the insiders get to sell you their shares that they had forever. And you’re, like, cheering going, “Yes.” And they’re like, “Here you go. Here’s the shares. You can have my shares that I bought at a dollar, and you can buy them at $100 if you want. Here you go. That’s for you. Here’s that Snickers bar that I bought for $0.10. I’m going to sell you for $75. Here you go.” And they’re like, “Yes. I got it.

Frank Curzio 08:34

I got the Snickers bar. It’s so great the way we’re conditioned. Oh my God. I’m in a SpaceX IPO.” Do you know because ETrade has been fucking me in one of these, you know, I’m supposed to get shares transferred over for a while, and they haven’t done it, you know, which is typical. And transfer rates are usually transfer shares into your account. It’s very simple to do. But when you call ETrade,

Frank Curzio 08:53

they actually have it online saying, “If you need help with the IPO or shares of, you know, basically talk about SpaceX IPO.”

Daniel Creech 09:02

Oh.

Frank Curzio 09:02

Right? So not only that, like, these brokerage firms, it’s so big, right? And they’re getting so much I think it’s 25, 30% is going to be retail. Fidelity, if you go to Fidelity, they have their own page. I think we showed that last week. Their own page just for the SpaceX IPO. I’ve never seen that. You have an option to hit the button that says one for trades, two for this, three for this.

Frank Curzio 09:23

It’s five. If you want to learn more how to get into the IPOs and stuff like that, which has to do with the SpaceX IPO, they actually added that to their system. The reason why I know is because I had to call ETrade about nine times in the past week to have them do something that, you know, a child that’s six years old could do. But that’s okay. I think ETrade I don’t know why I still have an account in ETrade. I use Interactive Brokers, too, but.

Daniel Creech 09:40

Oh, we’re not doing that yet. They don’t sponsor us.

Frank Curzio 09:42

Oh, yeah. No. We’ll get it. We’ll get you know, we should get a sponsor like that, Interactive Brokers, for our podcast, which is cool. For the Interactive Brokers Studio.

Daniel Creech 09:49

That’s right.

Frank Curzio 09:50

Right? It’s Tom Keene.

Daniel Creech 09:51

That or AJ Fernandez so I can smoke cigars in here.

Frank Curzio 09:54

Yeah.

Daniel Creech 09:54

By the way, we need a bigger fan.

Frank Curzio 09:55

Yeah. We do. So we can smoke cigars and do whatever in here. But the big news today, right, this way, Daniel Cadula has drugs in here. We’re getting an old drug drug factory, like a big.

Daniel Creech 10:03

Hey, this isn’t the paid version. Don’t say it on that one.

Frank Curzio 10:06

Oh, this is the free version. All right. On the paid version, we could say the drugs that we do. We can’t say that. Only to the select few people that paid that want to know us, we can tell them.

Daniel Creech 10:15

Oh, they’re all paying subscribers.

Frank Curzio 10:16

How to get the best drugs. Not on a free podcast. Everybody listens. The CPI came out today. The CPI, the Consumer Price Index. And mostly in line, you know, in the core, which includes food and energy, you know, and overall CPI, most of those, they came in line. But the core came in at 0.2% lower than the 0.3% expected.

Frank Curzio 10:38

But even at 0.2%, we’re seeing core inflation up close to 3%, 2.9%, which is almost 50% higher than the Fed’s benchmark, which is kind of a joke now. The only good news to this is it’s a lagging indicator. Energy accounted for a 23% increase in energy prices, right? So that was a big factor. But this is a lagging indicator, right?

Frank Curzio 10:57

So this isn’t measuring today. It’s measuring what happened pretty much, I would say, you know, last month, all of last month, but it comes out the 10th, right? It’s on the 10th today, right? So it comes out today, but it has nothing to do with June. And we saw in the past 10 days, energy prices have really, really pulled back, right? And they’re around 90 now. They’re below 90.

Frank Curzio 11:17

And we’ll get to that, you know, more impact with Iran war. Looks like it’s going to last a little bit longer than expected. But, you know, that’s the good news. But overall, Daniel, I think this is a story that needs to be told. You know, we have these firms that have the consensus, and they all say what they think this is going to happen.

Frank Curzio 11:36

That’s a consensus estimate. You should always know that, right? And those are the brokerage firms like, you know, investment banks like Goldman Sachs, JP Morgan. They’re economists, and they all fuel to the consensus estimates of what they expect and take the mean or whatever. Okay. Fine. They all expected inflation to increase, you know, a lot. And the overall CPI came in at 0.5%, again, in line with estimates.

Frank Curzio 11:57

So not a big surprise. The market was down, came back, and now it’s, you know, going down a little bit more. But annual inflation, this is the big star. Annual inflation is tracking, Daniel, at 4.2%. Okay. It’s the first time we’ve seen a forehandle on inflation in over three years. It’s a massive, massive, massive number.

Frank Curzio 12:17

Is this scary? Is this lagging? Do you think it should be concerned? Because the market saw this as a positive at first, and now I think we’re realizing, holy shit, 4.2% isn’t supposed to be at 2%. Isn’t that the Fed’s number? And we still have 4%, even though it met estimates. It met estimates. So we’re okay in met estimates. It’s like, you know, you’re going to bomb the United States, and we’re like,

Frank Curzio 12:35

all right, there’s 30 states that are going to disappear from the bomb, right, from a nuclear attack, and only 28 get, you know, get blown up. And we’re cheering that because, oh, we said the expectations were 30, but only there’s 28 states that don’t no longer exist. So we’re good. So we should be positive, and everything should be great. What are your thoughts?

Daniel Creech 12:55

That’s true. Not on the nuclear reaction, but, hey, you hit the nail on the head. It is about expectations, and you have to pay attention to those, mostly with earnings and with any government data like this. I completely agree on that. And that’s why I think the reaction was good from a stock market perspective, because, A, I think this gives the new Fed chair, Kevin Warsh, a lot of breathing room.

Daniel Creech 13:17

A couple I want to talk to you about this later, about when it’s being talked about. Frank, please remind me to say that. But on the inflation number, it looks horrible, you know, a forehandle and all this. We are going on one, two, three, four, five, six, seven years now in a row of the Fed missing its inflation target. Two things on that. One, it’s a BS target. It’s not going to happen.

Daniel Creech 13:37

We have said I will take a victory lap here on this because we have said since COVID that inflation will not return back to anywhere near this. That has proven right every single year because for the simple fact, you cannot dump 10 to 20% of the money supply into the economy and have a one-time print of skyrocketing quickly 9% inflation and then be like, hey, we did it.

Daniel Creech 13:58

We’re over the pain. That’s not how economics work. And if you think so, just hang in and tune into the podcast more often. Number two is the reason I think this gives the Fed more breathing room is because, to your point, the expectations, if this had come in a lot higher than expectations, market would be down 3%, in my opinion. It’s only one number.

Daniel Creech 14:18

So we’ll see. Is this the peak, to your point, on energy? The problem, one of the problems is, even if energy goes to, say, $80 today and stays there for this entire rest of the month, it’s not going to bring inflation down significantly according to these numbers because you got a lot of sticky inflation in these things.

Daniel Creech 14:39

What I well, do you have anything more on this? I don’t want to jump off this topic, but I want to ask you about one of these numbers in here that, in my opinion.

Frank Curzio 14:46

I have a lot more on this, actually.

Daniel Creech 14:48

Well, you go ahead, sir.

Frank Curzio 14:48

I want to explain this to people because I understand oil price eventually going to go to move, going to move lower. The tariff impacts, okay, also move lower.

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Frank Curzio 17:02

But we have to look at the full picture here. And when you look at the full picture, you’re looking at energy, food, medical, insurance, tuition. I mean, the cost of living right now is absolutely insane. And people are like, okay, with all these costs going up, Frank, how come the market’s still doing good? How come home prices have stayed pretty stable, you know, down a little bit in some areas and stuff, but overall, they’re up tremendously over the past four or five years?

Frank Curzio 17:23

And when you really look at the cost of living, or you look at the CPI, and you go back to 2019, right before COVID, okay, and this is CPI until today. So we’re looking at eight years of data. Consumers are paying nearly 30% more on all their goods and services, 30% more. And you’re saying, holy shit, okay, with that kind of inflation taking place,

Frank Curzio 17:43

which is massive, right, much more than the 2%, as you can figure out, do the math, how is the market? How do people have money to spend? Because that’s what’s driving the markets. That’s what drives earnings is a spending part of it. And, you know, how come the market hasn’t crashed? Oh, home prices crashed. Well, it’s because wages have gone up around the same percentage. Okay. They’re up around 28 to 30%,

Frank Curzio 18:01

which is, you know, you’re making more money to account for this, and that’s fine. But now you’re not seeing that growth in wages, right? It’s not that strong growth anymore. While inflation does what? It’s surging, right? It’s going up even higher, meaning more people do not have enough money to make ends meet. And what does this mean?

Frank Curzio 18:21

It means more borrowing, more leverage. And we’re seeing that across the board at a time where interest rates are rising, not going lower. So the cost to borrow are surging. So in 2019, the Fed funds rate was around 2%. Now it’s 3.6%. The 30th fix was 3.75%. Today it’s, you know, what, 6.5%? Massive. So borrowing is getting so expensive.

Frank Curzio 18:42

You have companies like Google saying, hey, you know what? We tapped the bond markets already, but let’s just sell our stock. We can sell our stock for the current price of where it’s trading, raise $85 billion because it’s so much cheaper than going into the debt markets right now. But Google has that option. The hyperscales, I’m sure we’re going to see them do the same exact thing.

Frank Curzio 19:00

It makes a lot of sense for them. They need a shitload of money for their AI needs, right? Why pay these huge, huge rates when you could actually issue stock, which is a lot higher even today, even though some of them might be down 10% off their highs in the past few days. But now when you look at everything together and you’re sucking trillions out of the rest of the market, right?

Frank Curzio 19:21

You have the SpaceX IPO coming, filed by Anthropic and OpenAI, all trillion dollars each. When I look at this whole picture with inflation going higher, wages kind of stagnant, and a market where we really expected interest rates to be lower, we expected the Fed to cut early this year, mid-year.

Frank Curzio 19:41

Now we’re seeing where they’re saying not only are they not going to cut, they might raise this year. And they have an argument to actually raise. I think it’s crazy, but they have that argument to raise. So we’re seeing a lot of money that’s going to get sucked out of this market, which we’re kind of seeing right now with the market coming down. I got to tell you, I told you a couple of weeks ago, too, you know, I’m getting bearish on this market. We sold a lot of stocks.

Frank Curzio 20:01

We still have an AI presence as well. So, you know, but we sold a lot of stocks in the newsletters over the past pretty much month. And we still have exposure to AI, and we’re in very early on AI. So I don’t mind if some of these stocks are down 10, 20% because we have literally like 7x, 8x, 10x winners in some of these things.

Frank Curzio 20:17

But when you’re looking at how much money is going to flow out of this market and you’re looking at spending, and pay close attention to this because, listen, AI spending is going through the roof, Daniel, which you all know. But as of right now, if you look at the numbers, it’s $725 billion going to AI infrastructure this year from hyperscales alone.

Frank Curzio 20:36

Yet revenue from the space is roughly just $35 billion. So to put it in a simpler way for you to understand, for anyone to understand, hyperscales are only generating $1 revenue for every 20 they spend right now. We’re looking at the future and how much money they’re going to generate in the future. And they’re all seeing record profits, but the spend is that much higher. So, you know,

Frank Curzio 20:55

maybe that’s why we’ve seen a little bit of reversal AI trade. A lot of these things are up tremendously over the past two years, especially over the past six months. Along with going into this, people forget the S&P 500 was up for 10 straight sessions before the pullback on Friday, 10 straight sessions. And that’s why we’re like, you know, we said that a couple of podcasts ago. We’re like, you know, just getting a little crazy. But it’s probably why you’re looking at the S&P 500,

Frank Curzio 21:16

even though it’s not, I don’t know how much off its highs. Maybe is it more than 5% off its highs? Probably not. The S&P, and the Nasdaq is not the S&P, but 350 stocks in the S&P 500 are down over 20% from their highs, with the major index just off its all-time highs. So I’m looking at a market that’s a little broken to me.

Frank Curzio 21:36

And I could see us pull back even further. And as we pull back even further because of this, I mean, you’re looking at the catalyst. I have to ask you, Daniel, I mean, what’s a reason to buy stocks right now? I mean, you’re looking at the earnings growth. All right, we’re already in there. Stocks are trading at a very high multiple because of that strong earnings growth.

Frank Curzio 21:56

And I get it. But with higher rates for longer, it’s going to be more difficult. You know, you’re going to see spending increase. It’s going to be much more difficult for these companies to spend as much money, which interest rates, when interest rates are higher, because of the cost of debt is so much, you know? So now we have interest rates higher for much longer than expected, inflation much higher, longer than expected.

Frank Curzio 22:17

I’m trying to figure out over the next six months, what’s the catalyst that’s going to drive stocks higher? And we’re anticipating an end to the war. And that even escalated yesterday, right, where we’re fighting and back and forth again. And, you know, I think I ran by them a couple in the Middle East, you know, but, you know, we’re supposed to get this resolved pretty much. And oil prices are trading as they’re getting resolved, where they’re under 90.

Frank Curzio 22:39

And now there’s clear escalation as of yesterday where this could escalate even further. I’m just trying to figure out, like, if you don’t have interest rates coming down, earnings, we know earnings growth is very, very strong. We’re seeing it, but it’s probably going to slow down a little bit because the spending is going to slow, obviously, with interest rates staying higher for longer. I’m trying to figure out, okay,

Frank Curzio 22:57

you know, we have geopolitical risk, but what is the huge catalyst that, you know, in terms of risk-reward, that makes you want to buy stocks right now that I think taking on that risk over the next six months of upside is worth the downside that could happen? And I just think there’s much more downside ahead compared to upside. I would say on upside, I would say there’s 10% upside in this market and 30% downside.

Frank Curzio 23:17

That’s how I feel even right now after the pullback. And that’s not a favorable environment. Not all stocks. There’s a lot of stocks that have hit two-week lows. There’s a lot of stocks that just not in the AI trade that looked very, very positive. There’s restaurants separating themselves from others. Others are getting annihilated. But yeah, that’s how I feel right now with the markets. And I just think you have to be very careful. Look, I’m not a perma bear.

Frank Curzio 23:36

I’m not a perma bull. I just see it how I see it. And I love opening up this conversation, everyone, because this goes to 130 countries. I mean, you know, day to day, hundreds of thousands of people, which I love, and our lists and listen to podcasts. I love to hear, like, what is the catalyst over the next six months to buy this market? And that’s what I’m struggling with, to the point where it’s worth taking the risk to buy stocks here compared to,

Frank Curzio 23:57

you know, maybe just sitting on the sidelines or trying to go into safe havens. I don’t know. What do you think?

Daniel Creech 24:04

I continue to be surprised that markets haven’t pulled back. They just kind of have this melt-up feeling to them. And I’m not going to act like I know what’s behind that. So a pullback, you know, I could have said we were due for a pullback. I continue to be shocked. I have no doubt we will have one. It wouldn’t shock me to see us give up all the gains to this year.

Daniel Creech 24:22

However, I’m not entirely bearish on the rest of this year right now. I’m not putting that on you. I’m simply saying we have a new Fed chair. And again, I put a lot of weight on politics. The biggest fear out of the CPI report, in my opinion, because it came in line with expectations, is the real wages that you pointed to.

Daniel Creech 24:43

So first time since April 2023 that real wages are shrinking on a year-over-year basis. That’s a big deal. However, that doesn’t mean that that’s the new trend. So we’ll have to wait, like Tom Petty saying, waiting is the hardest part. You have earnings. Well, in my opinion, you have to believe the earnings are going to continue to be robust.

Daniel Creech 25:02

You have to believe that inflation will come down because of the Strait of Hormuz and such will be reopened at one time. And then I think, Frank, you have to buy into this AI is everything. And you have to buy into this productivity thing. And you got to get these sky-high silliness. You got to put on your muscats. And you got to say,

Daniel Creech 25:20

listen, AI is going to do your laundry for you. And it’s going to do robot. Forget it can’t Florida fix the drive-through at your favorite fast food restaurant yet, but it’s going to be this new humanoid robot dream thing. I think AI is going to be amazing, bigger than the internet, but it’s not going to happen overnight. I’m just simply saying if you want to buy blindly or go all in right now here, which, you know, I still think you ought to have exposure,

Daniel Creech 25:40

don’t get me wrong, but I think those things are what you have to do or have to believe to be buying hand over fist right here. Outside of that, quickly on the CPI, Steve Leishman on CNBC this morning, Frank, was him and who’s the gentleman that does the numbers usually, Rick?

Daniel Creech 25:59

Anyway, I’m sorry, I can’t remember his last name.

Frank Curzio 26:01

Rick Santelli.

Daniel Creech 26:02

Yes.

Frank Curzio 26:03

Rick Santelli.

Daniel Creech 26:04

Steve Leishman made a great point, in my opinion, on how if he thinks Worsh is going to try to do, what’s he going to do to the Fed and make it his own? And what kind of reforms is he going to try to make? And he talked about this range or shifting to a range of inflation. Now, the low-hanging fruit is, hey, this is an excuse.

Daniel Creech 26:24

This is a new Republican. It’s a Trump puppet. He’s going to change all the things. We have already been on record pointing out the 2% target inflation is complete BS and made up out of a child’s book because it’s a New Zealand thing that a bunch of economists that know zero, Frank, zero about reality and should be fired from all their jobs at the Fed.

Daniel Creech 26:46

Seven years now off target. Seven. Remember that. Every time you see somebody in a suit from the Fed talking about it and they act like they’re smarter than you, you just remember the last time you were dead Florida wrong seven years in a row and had no repercussions. And you will, and then email me about that and tell me how you’re employee of the month of your own company because you were fired. I think that that is a big deal.

Daniel Creech 27:07

You could do a range. I’m shocked. I was actually dead wrong about this. Let me say that again. I was dead wrong, and that is difficult to admit. I thought Jerome Powell and the Biden administration was going to be the one that finagled with the inflation data because they had no prayer of getting it back to normal or their target. They didn’t do that. I was wrong on that. Doesn’t mean it can’t happen in the future.

Daniel Creech 27:27

You have to tinker with this silly box that they have. Last into my rant here, Frank, remember, everybody, the good news here is, and this is my dry sense of humor, we are going to witness and make everybody, and I mean everybody, admit that the Fed is not independent.

Daniel Creech 27:46

It is not apolitical. You are going to see Republicans and Democrats fight just like the House and Senate in the Fed. You’re going to have Kevin Warsh on one side, and you’re going to have Jerome Powell on the other side with his cabal of buddies undermining everything they do. And here’s the only thing you need to know. We could fix this right away. The Fed, supposedly, Frank,

Daniel Creech 28:05

by data, the Fed is one to two hikes, 25 basis point hikes, so half of 1% is two, two hikes. The Fed is one to two hikes behind their own benchmark to have a neutral rate, supposedly. Okay. So we’ve shifted this narrative from cutting, like you said, to raising. If the Fed actually gave a flying Florida about what it says,

Daniel Creech 28:26

you know what they would do? They would hike rates immediately, and they would put rich people and those who have access to money in a recession, like the bottom half of the K, 50 Florida percent of the American people that they claim to help and look out for have been in for years and years and years and years, significantly since COVID. They have gotten undermined. That is the whole game, everybody.

Daniel Creech 28:45

And if you don’t want to admit that and you want to live under a rock, that’s completely fine. But this all could be fixed right away. The Fed could jack up rates just like Arthur, what’s his name who did it to kill inflation before Reagan? Is it Burns? Am I Arthur Brooks? Damn it. I shouldn’t. I shouldn’t. The guy that killed inflation hiked it way back when everybody was buying Volcker.

Daniel Creech 29:06

Yes. I don’t know why I was going the other way. You could do that. You could hike rates if you, this just shows you they don’t care. And it’s a lot of just Willy Wonka and the Wizard of Oz. You could put rich people through a recession. You know why they don’t? Because that’s who controls the Fed. So that’s the most simple thing. And you can say, oh, it’s conspiracy theory. Again, go back to data.

Daniel Creech 29:25

Data says they’ve been dead wrong on this stupid New Zealand target for seven years, and nobody’s doing anything about it. Now, Kevin Warsh is going to try to do something different, and nobody’s going to care about what that is. They’re just going to say it’s wrong because change is wrong, and it’s pathetic. The Fed could fix everything, jack up rates, put rich people in a recession. It won’t last as long as everybody thinks. Why are you laughing?

Frank Curzio 29:45

The rich people will never be in a recession.

Daniel Creech 29:47

Exactly, because that’s the game. So as long as they don’t ask, I mean, inflation’s here. Yeah, inflation’s here. And unfortunately, even that’s why you see this big separation, bigger than it’s ever been, ever between, you know, that wealth gap. And people aren’t as fortunate where owning assets during inflation every time is the greatest thing ever. It’s the greatest thing ever, though, on inflation, right?

Daniel Creech 30:07

During inflation every time. And that part is tough. And then if you’re raising rates, you’re going to have higher interest rates where if we do control inflation, interest rates are actually higher. They’re just going to take it out and put in money markets can and put their billions in there. But, you know.

Frank Curzio 30:18

Yes, they would. But that would also work through a lot of issues on general. It would take away a lot of demand when you have money parking there instead of investing, and that would bring inflation lower. It’s sorry, I’m not saying they’re going to do it. They’re not. But anyway, sorry.

Daniel Creech 30:30

And Steve Leishman, too, I remember this. This is like 15 years ago. I was at like a big CNBC conference, something that they were hosting one time. And I was bathing and washing my hands. And all of a sudden, Steve Leishman walks in like in a panic, and he’s got coffee all over his shirt, and he’s really going on stage like next. And he’s like, I can’t believe I spilled coffee all over my shirt is right next to me. And I was just, I looked at him.

Daniel Creech 30:49

I was like, dude, nobody cares. I said, do you think you’re the only person that that happened to? I said, first of all, if you go out there, I said, just go out there. I said, make fun of it. I said, you’re going to identify with the people. They’re going to love you. He’s like, yeah, but I got to get the soil. You scrubbing. I was like.

Frank Curzio 31:03

What a cheapskate. He didn’t have a jacket.

Daniel Creech 31:04

I was like, don’t worry about it. He did. He had a jacket. He had a jacket up, but it was all, and it was just, it was just, yeah, I think it couldn’t even cover where it went. But he was like so nervous and everything. I was like, dude, I was like, just go up there. Just do your thing. He was pretty cool. He’s a very real guy. He was just like, yeah, he’s pretty cool in person, too. He’s exactly how he is on TV. So.

Frank Curzio 31:20

Hey, good dude.

Daniel Creech 31:21

But yeah, I mean, with the markets, too, and people say, okay, Frank, so, you know, we sold some of our stocks, you know, where should we go as a safe haven? Whatever you do, don’t go into gold as a safe haven, whatever you do. Or, you know, of course, Bitcoin. We’ll talk Bitcoin in a minute. But I mean, if you’re looking at gold, and I have a chart here, right here at CNBC, you look at it at the year, right? You’re looking for the year. I don’t know if you want to take a guess at this,

Daniel Creech 31:40

how much gold’s up for the year and how much silver’s up for the year. Tough question. Tough question. I would get this so wrong. Gold’s up 24% for the year.

Frank Curzio 31:46

Oh, I wouldn’t have guessed that.

Daniel Creech 31:47

Silver’s up 76% for the year. However, however, okay, let’s take it from those highs in February and look what’s happened, you know, where you have this total annihilation, where you have silver since February, silver’s down 44%, and gold is down 22%.

Daniel Creech 32:04

And even better is you have Citigroup coming out and saying we could see another 20% decline to 3,500. I think we’re at 41 now. So a decline to 3,500 by September, next two, three months. I read that report, and I get the point where they’re saying, well, if interest rates are going to stay high, I don’t know why it’s three months,

Daniel Creech 32:23

because they’ll stay high a little bit longer than that. But they were also saying less buying due to geopolitical risk with Iran, war, and stuff like that. And I’m like, I didn’t. I read the note three times. I didn’t get what they were saying of why, you know, the Strait of Hormuz is going to result in less gold buying, which I didn’t understand. But they said we could see another 20% pullback, which was interesting. But, you know,

Daniel Creech 32:42

for gold, and gold has not been a safe haven at all, almost ever. I mean, it’s never really a safe haven. Plus, higher interest rates are horrible for gold. Why are you going to park it in gold where you can park it in, you know, and generate a nice rate of return for free, risk rate return, right, for interest, which is great. You know, so you might say, you know, based on inflation, it might be a little bit higher,

Daniel Creech 33:01

but still holding gold, you want to hold gold. I get it. But, you know, and the same thing goes for Bitcoin as well. We’ll get to that in a little while. I mean, it’s about buying and selling. You could have any reason why you’re going to buy any commodity. You need more buyers and sellers, right? You need demand. You need those dynamics to work in order for the commodity price to go higher. Not for anything to go higher, right?

Daniel Creech 33:19

So while I’m bearish on the markets in the next six months, there is good news here. If stocks fall further, like what I’m anticipating, you have to look at this data that Goldman Sachs just published this morning that I got hold of. And this is really cool stuff. I took a picture of it. So if you’re able to watch it, that’s great.

Daniel Creech 33:38

But here you go. So a lot of numbers everywhere. Just know. So they have the core, you know, core PCE, and they have April 2026 as of, you know, now is 3.3%. And then they have December. At the end of December 2026, they’re projecting it to go down to 2.8%, the core PCE. In December 2027,

Daniel Creech 33:59

you know where they’re expecting the core PCE to go to? Again, Goldman Sachs has been very wrong in this shit. So, and a lot of people have been wrong. 2.1% by the end of 2020. If that’s the case, we’re going to see interest rates come down.

Frank Curzio 34:10

By what year? 2027?

Daniel Creech 34:12

2027. Yeah, year end 2027, right? So you’re looking at 2020 at 2.1%. So, you know, you’re expecting, and most are expecting inflation to come down tremendously. We expected it to come down earlier, but then we saw, you know, the whole Iran war and stuff like that. But they just believe, and you look, when I read the notes, the tariffs and energy,

Daniel Creech 34:31

those inflation costs are going to start, you know, declining and fall off a cliff eventually. If you’re looking at, you know, the amount of spending, and we, I saw notes also from Goldman Sachs today about semiconductor exports. Okay, the exports in US dollars, all right? This is the chip revenue. It’s just beginning to ramp up, and this is why they traded so much higher. $78.5 billion in Q1 semiconductor exports.

Daniel Creech 34:52

It’s going to go up in Q2, not year over year, Q2 from $78 to $130 billion. Then in Q3 from $130, it’s going to go to $155 and then go up at $160, $160 billion for Q4. So from Q1 to Q4, it’s going to more than double, right? And that’s,

Daniel Creech 35:12

and you’re looking at AI spends, not going to slow anytime soon, right? That’s a good force in the market that’s keeping us higher. Fiscal deficit running at 67% of GDP. It’s going to continue. Remember, more spending is positive for the economy as long as inflation is controlled. Inflation is expected to come down. Of course, we hate that spending, but we’ve told you how many times have we argued this, Dan?

Daniel Creech 35:32

It doesn’t even matter. As long as the government’s going to be spending like freaking drunken sailors, it’s going to be good for a lot of different industries across the board. And we, of course, we saw defense spending and things like that, but it’s been good for the overall economy. More spending going into the economy. We know that increases deficits. We might have to pay for that in 300 years from now. But right now, as long as we can pay our bills, it’s all that matters. That’s why deficits don’t matter unless you have trouble paying it.

Daniel Creech 35:53

And people think I’m crazy for saying that, but I’ve listened to 1970s and studied this, 70s, 80s, 90s. I was born in 1972. I’ve gone back and seen presentations. I’ve seen Doug Casey from the late 70s into the 80s into the 90s, all the way through, all these people telling you that dollar’s going to lose reserve currency status. The US is on this path. They can’t continue. They’re dead. They’re going to die, whatever, and all this shit. And all you had to do is close your eyes,

Daniel Creech 36:13

take a nap for 40 years, and wake up, and your money would have quadrupled even more than that. You would have been up a billion percent, right? If you didn’t listen to anybody. Deficits don’t matter unless you have trouble paying them, and that’s when you get effed. And right now, we’re not having trouble paying them. So what that means is going to fuel the economy. That’s still coming. So now we have a market that could see lower inflation in 2027,

Daniel Creech 36:33

which could definitely give the Fed the green light to lower rates aggressively. Continue spending by the government. AI spending continue. Earnings growth should still be very, very positive, double digits. But you’re going to have stocks discounted probably 15, 20%, what we’re seeing now. A lot of stocks are down. So I think 2027 sets up for a huge, huge year if we do pull back.

Daniel Creech 36:53

I just, over the next six months, you know, we need lower rates, and we’re not going to get them this year. And I just don’t know what the catalyst is to take on that kind of risk of going into the market right now. You might see one of your stocks. I mean, I don’t know if Nike’s a buy now or not. You know, I’ve crapped the Nike for a long time and tried to trade a little bit here and there.

Daniel Creech 37:13

But RBC just downgraded. Do you know what Nike’s trading right now?

Frank Curzio 37:17

40s?

Daniel Creech 37:18

$44 a share. And they downgraded it. They downgraded it. They have a $50. They didn’t say what their original target was, but they cut it to $50, which represents a tiny gain from here. But they’re saying that it’s now down 70% from their 2021 highs. What a, what a, I mean, this is a brand that was the king. You never, Nike always won this industry no matter what.

Daniel Creech 37:38

And now still a leader when it comes to sneakers. But you have, you know, just on-running Hoka. You have New Balance. I mean, these guys are just, you know, again, different clothing, and their clothing has been good. They’re at a golf now and everything. It’s just, it’s been a disaster. Let’s see,

Daniel Creech 37:57

because I think they are going to generate some good sales and a big sponsor of FIFA World Cup, which is going to be massive starting basically almost now over the next month, too. So that should be interesting. But they haven’t done anything to stop the bleeding. I mean, these are brands that, hey, maybe you want to take a look at because if they do stop the bleeding, totally need to do. It doesn’t have to be positive. When you see stocks down 70,

Daniel Creech 38:15

80% from their highs, all they need to do is report less bad results. Not good results, just less bad. That wasn’t as shitty as the last six to ten quarters that this company’s presented because it’s been horrible for the company. But that’s all you need. Like, just less bad and just a little bit of positive momentum and saying, or a comment from the CEO, hey, you know what?

Daniel Creech 38:37

We don’t longer have inventory concerns. We stem bleeding, you know, and you see these stocks pop 20, 25% immediately. This is where you want to look in the consumer space and the restaurant space, because a lot of these stocks have been annihilated already. But even the high flyers like AI, I could see them coming down a little bit. There’s money rushing out. I mean, there’s a massive exodus out of it.

Daniel Creech 38:55

You know, this is factual from Bank of America’s statistics that we track, Daniel, when we get this report every week that shows us, you know, the money and the money flows of the $4.5 trillion in private accounts and, you know, hedge funds and stuff like that, and institutional money. So there is money. Obviously, you could see it in how much has come out of AI, and AI trade’s like,

Daniel Creech 39:14

you know, kind of blowing up right now for some stocks. But it’s got to go someplace. I’m just worried that you really have to be careful going forward of what you’re going to buy because it’s going to be tough market conditions for the next six months without the catalyst of lowering interest rates, without the catalyst of seeing lower inflation, which we’re probably not going to see again.

Daniel Creech 39:34

More escalation just happened yesterday for the Iran war, going back and forth military, right? So, you know, let’s see what happens. And look, if you’re wrong, I hope I’m wrong. I like when people make money. But me personally, yeah, we’ve taken stuff off the table, and we took stuff off the table in our newsletters. And, you know, we’re getting positioned to really be aggressive once we see inflation start to subside,

Daniel Creech 39:55

an anti-Iran war, and also the Fed giving the green light. Pretty much that could happen three to six months from now. When we see inflation coming down, they might be like, okay, now’s the time that we could really discuss lowering rates, and that might happen mid-2027. Just them talking about it by the end of 2026 is going to fuel this market. But right now, I just don’t see this catalyst. And again, I could be wrong on that.

Frank Curzio 40:14

I agree with that. I’ll reach into my crystal ball here, Frank, and I’ll help you out because I realize what emails we’re about to get. They should be directed towards you, but I’m going to be involved in them. He is not saying sell everything and the market crashes. He’s saying a pullback, and he’s still saying to have some exposure. Now, we follow a lot of different macro indicators. If they start to tilt red, I will then tell Frank, hey, you know, I want to lighten up, too.

Frank Curzio 40:35

So there’s a big difference there. On Nike, I liked your comments there. You need to wait on Nike to get a high short interest so you can have a daylight. Cracker Barrel is having today. Frank, if I look at Cracker Barrel on Finviz, it’s up almost 30%. The short float is almost 28%. And Nike, according to this on Finviz, it was under five.

Frank Curzio 40:57

So hold off on that until buying Nike there.

Daniel Creech 41:00

Crack about 26%. It’s up.

Frank Curzio 41:02

The last thing I want to say.

Daniel Creech 41:03

And then, you know, it just goes to show, I mean, look where it was. It was getting annihilated, right? So, I mean, it’s down from, yeah. But, you know, and you see, I mean, the stock, last time I saw, it was up 10%. So you see, obviously, this is a short squeeze, and people are running to cover. But it just goes to show you, like a company like this has been out of favor for a while. All you need to see is, I mean, out of favor for a while, about six months, garbage, one year.

Daniel Creech 41:23

Jesus, look at this one-year chart. Ugh, it’s ugly. All they have to do is say something mildly positive, right? Just a little bit positive, get less bad. And, you know, you’re going to get a move like this, and you could see that in Nike. You could see that in a lot of these names already down 60, 70%. Sorry, go ahead.

Frank Curzio 41:36

No, you’re good. So quickly on gold, I do think, I got this wrong. Listen, I’m still a fan of Agnico Eagle Mines. We’re getting hit on it in CRA. A lot of good positives there. But to your point, this is not the inflation. This is not the environment for gold right now. You’ve had that massive run-up. Still got sticky inflation. I think gold is the great oh moment.

Frank Curzio 41:58

The market is not anticipating or doesn’t care about the Iran war right now. I’m not saying that tongue-in-cheek. I’m saying that because of oil prices. I’m looking right now. Oil prices are $90.67 on WTI, and it’s $93.56 for Brent. I’m simply saying that when gold starts to worry,

Frank Curzio 42:17

in your point, Frank, all those screamers and yellers about de-dollarization, all that, when you actually get nervous on the world stage, that’s when you want to look to gold. And look at central banks. I mean, gold, I forget the number off my head, but gold is a significant part of global reserves now, up significantly than what it was over the last couple of years. Okay, so there’s the trade there.

Frank Curzio 42:36

Like said, Frank said, wait till a better environment. If you want to switch to Bitcoin, it’s very similar, Frank, other than there’s a couple other caveats I have there for you. Do you want to do that?

Daniel Creech 42:46

Go ahead.

Frank Curzio 42:47

Okay.

Daniel Creech 42:47

I’ll follow your lead, bud.

Frank Curzio 42:48

So on Bitcoin, I’m the same way with, I think, similar to gold, you need this oh moment on certain fears and money printing. But clearly, you don’t want to have the end of the world theory because that’s where gold wins. Or in the face of de-dollarization, people, treasuries still rule the world.

Frank Curzio 43:08

Now, with Bitcoin, Frank, it has been an absolute horrible good session here. If you look at a chart, I got headfaked out wrong when Bitcoin went above 80 recently. I threw that into one of my new normal categories, along with oil, interest rates, etc. I was wrong on that. However,

Frank Curzio 43:27

I think there is some really good news on Bitcoin because the main story and thesis hasn’t changed, and it won’t change unless they come out and say, just kidding, on the whole 21 million thing, there’s now 50. Okay, that’s the big change they cannot make. As long as that’s good, I think, I think that is the biggest driver of the bull case over time. And I think that that needs to stay,

Frank Curzio 43:47

and it will stay intact. Frank, let me throw some numbers at you. This is from Bitcoin Magazine, the Relative Strength Index. Now, depending on what timeline you’re looking at, the Relative Strength Index is going to show different things. So if you’re looking at weekly, yearly, etc., Frank, the RSI for Bitcoin is at one of its lowest levels ever, ever.

Frank Curzio 44:07

Excuse me. And this is important because this is a longer-term chart. And so they point to, it’s at levels around 2015, 2018, and the COVID crash. If you’re looking at a chart, that’s a very positive thing. If this is going to replay that, because then the prices spike. The other idea here, Frank, is the 200-week moving average.

Frank Curzio 44:27

Throw that into your charts. 200-week moving average is being tested. That has acted as support. Those are both positives. However, since Bitcoin is volatile as anything, it could go to Florida 40 for 10 days and go right back to 80, and all this would still be true. I have one more comment on mining costs that has my interest,

Frank Curzio 44:49

Frank, but I want to give it back to you if you have anything to say about that just yet.

Daniel Creech 44:55

One thing I’ll tell you is with the recent decline in Bitcoin, now you can look at a five-year chart, and the market has outperformed Bitcoin over the last five years.

Frank Curzio 45:02

Rut row. That’s not good for stats.

Daniel Creech 45:04

For me, I wrote a post on my X account at Frank Kurzi, if you want to follow me, which is great. Posting a lot and getting lots of traction. I think we have 15 million views over the past three months.

Frank Curzio 45:16

Whoa.

Daniel Creech 45:17

Yeah, so it’s pretty cool. So it’s been a great platform for us and really figured out we’re growing really fast on it, and it’s cool. But, you know, I wrote a post that, you know, Bitcoin is dead for basically 2026. And look, it’s not so much where you should dump your Bitcoin at 62,000. It’s about,

Daniel Creech 45:37

you know, you have to have more buyers and sellers in order for Bitcoin to go up. And you had this Michael Saylor moment, and yes, he sold a small amount, but the fact that he had to talk about it made it even a bigger deal. And, you know, I think people just looked at that and said, regardless, it was a big story. It was only 2 million. I get it. And now what happened is Strategy announced it bought, was it 1.55?

Frank Curzio 45:56

Yeah, they sold 32 Bitcoin, then they bought 1,500.

Daniel Creech 45:58

Yeah, and for whatever, 100 million. And, you know, you have to sell it. So he bought over 100 million. He sold 2 million, right, which was 2.5 million, whatever it was. So the message should have, like, reassured investors. And actually, this was like two days ago, right? And Bitcoin fell even further. So, you know, down 27% for the year. Again, underperforming the S&P 500 the past five years.

Daniel Creech 46:17

But for me, it’s, you know, it’s the reasons to buy Bitcoin and the reasons that I wanted, where you’re going to see more institutional buying. Institutions are not buying it right now. They’re just not. Institutions aren’t buying. You’ve seen the Bitcoin miners are dumping their Bitcoin. These are the Bitcoin miners who are supposed to hold it. And it makes sense because they own one of the most valuable assets in the world right now,

Daniel Creech 46:37

which is power. So they’re selling their Bitcoin to fund their AI needs, right, and changing from tier one to tier three, because now you’re going to be able to sign collocation deals and all these GPUs and service deals. And these guys, some of them have signed billion-dollar contracts from the hyperscalers already, which, you know, they wouldn’t never saw revenue like that, just being a Bitcoin miner, because the costs to mine Bitcoin are not economical.

Daniel Creech 46:59

And they will never be going forward, just for the simple fact unless, you know, even Bitcoin crashes. But, you know, the simple fact is it’s not a scalable business. It’s a shittiest business model in the world. I mean, every four years, your margins are going to get cut in half. You know, you have to spend more. You can’t. It’s an unscalable business because you can’t just get to a certain level and make a fortune off of it. You have to spend more money on and get the best chips.

Daniel Creech 47:19

You got to be, you know, have the fastest chips. Cash rate has to be great, right? It costs a lot of money. You have to find places, you know, you got electricity. Electricity prices are skyrocketing everywhere. You need extra cheap electricity. Now you got to pay for more electricity. You have to pay more to make money, right? So it’s not a scalable business model. And now they’re looking at, wow, we have this power. We can just rent it to AI and make an absolute fortune forever.

Daniel Creech 47:39

And, you know, companies were early on this trend. They did great. You know, if you’re looking at governments buying Bitcoin, I don’t even know. When’s the last time I heard of a government buying Bitcoin?

Frank Curzio 47:47

El Salvador. Been doing it for five years.

Daniel Creech 47:49

Did they?

Frank Curzio 47:49

Not a good deal.

Daniel Creech 47:50

I mean, you know, but, you know, just remember, these governments are all going to have these strategic reserves as well, right? Bitcoin reserves, which you’re not seeing. A lot of money flowing out of the ETF market. And, you know, when you have alternatives like AI that’s been going up so much, you know, even the speculative investors who want Bitcoin. But, you know, the people who are holding it, you’re holding it forever. But it has to be more than just Michael Saylor.

Daniel Creech 48:10

And, you know, that needs to change. There needs to be some kind of initiative. You know, even if you look at stablecoins, remember, they used to buy, yeah, they’re buying treasuries. They used to buy shitloads of Bitcoin. They’re not buying Bitcoin. They’re not even buying the Bitcoin anymore. They’re holding it on a balance sheet. So, you know, with this cash. So it’s just, it’s interesting to see where, no matter what you believe,

Daniel Creech 48:29

if it’s a, you know, if it’s a trust system, it’s a method of payment. It’s the future of the monetary system, which it won’t be the future of a monetary system with 21 million coins. But, you know, there’s just not enough liquidity there, right? That’s why the U.S. is the greatest currency in the world, is the liquidity behind it. Everybody wants it. And people who shit on it and hate it, I’ll take your dollars. Give them to me. I’ll take them.

Daniel Creech 48:48

And everyone in the world outside of the U.S. will take them in two seconds as well. Just flash them. They’ll take it. They’ll take it more than their, you know, regular currency in 98%, 99% of countries. But for me, a lot of that thesis is, listen, if you’re going to buy, you’re going to hold. That’s fine. But, you know, you need more buying coming in. And I don’t see the buying coming in right now to Bitcoin. There’s just not a lot of buying coming in.

Daniel Creech 49:07

And now you’re getting money dried up by SpaceX IPO, all these trillion-dollar IPOs. You know, where’s that speculative money going to come from to really drive Bitcoin higher? And it’s probably oversold here. It could go higher. I just, I don’t have that, you know, hey, you know, you’re showing Bitcoin, and people are saying it’s going to $500,000 or a million. That thesis has to be off the table. Has to be off the table now.

Daniel Creech 49:27

I just don’t see it until I see things change, until I see institutions or strategic, you know, reserves from some of these, you know, sovereign wealth, you know, then you have this buying come into Bitcoin. But right now, I just, I see more people exiting crypto, exiting Bitcoin. And it’s one of the reasons why we shut down our newsletter six months ago. So, you know,

Daniel Creech 49:46

it’s, if I see a place where I don’t think you’re going to make a lot of money in it, I’m not going to just pour it down your throat and collect fees and stuff like that, fees, subscribing to my newsletter. No, my job is to make you money. That’s why you subscribe to me. That’s why you keep subscribing to me. That’s the thing. If I don’t show your results, then you’re not going to subscribe to my services anymore. So, yeah, for Bitcoin, you know, it’s not that I’m super bearish on it, where I see 40 or 30 or even, you know, below 50.

Daniel Creech 50:08

I don’t see the case to where I’m positive buying it here, where I see huge gains in the future of this long-term trend anymore. And I just don’t see it. And I’ve got a lot of shit on it, and that’s cool. I got some really good responses on it from Bitcoin bulls. But I just think, you know, your money would be better elsewhere. And if you hold some of it, you can continue holding it. I think it’d be fine at this price. But again, I just, it’s the same with the market.

Daniel Creech 50:29

I just don’t see the reason. Like, the same reason. Give me a different reason, Daniel, right now to buy Bitcoin that I’d never heard of.

Frank Curzio 50:35

Well, I think that’s a genius of it.

Daniel Creech 50:37

Right.

Frank Curzio 50:38

I don’t have.

Daniel Creech 50:39

I don’t look at that as a negative.

Frank Curzio 50:40

Like, you know, so I look at it as a negative because where’s the buying? You need some buying to come in someplace. You need to get excitement. Like AI, okay, it went from hyperscalers who are buying to, you know, these nuts and bolts plays to semiconductors to, you know, the service providers to, you know, now you have, you know, Bitcoin miners who are switching.

Frank Curzio 50:59

So you have this chain of supplies, you know, nuts and bolts where you can go, okay, we need more power. And, you know, so there’s so many different, you know, infrastructure plays, like the Celestica’s a buy. Okay, the power plays. Okay, it’s not going to be really nuclear. We’re not seeing it from nuclear right now, but we’re seeing it from Bloom Energy, okay? Oracle, get, you know, throwing the hat in the ring.

Frank Curzio 51:18

Then you have, you know, the optics now. The optic plays are going where, you know, maybe you have Corning doing well, right? So there’s different areas within that that say, okay, well, okay, we need to buy. We need to improve. We need to increase productivity.

Frank Curzio 51:32

I feel like everyone who’s in Bitcoin, you have to be able to tell, like, a more exciting story right now because everyone’s in it because of those reasons in the past. What’s the reason to buy it right now? Can’t tell me it’s cheap. There’s no fundamentals around Bitcoin, other than 21 million coins.

Daniel Creech 51:45

Oh, yes, there are.

Frank Curzio 51:46

But why? Why would it be going, you know, much, much higher from here? I just need a reason of, you know, where’s the excitement of, oh, Bitcoin’s going to 150,000 now because you have all these buyers? There’s corporates that were supposed to be putting this on the balance sheet. No one. In the S&P 500, I don’t see anyone adding Bitcoin to their balance sheet right now, especially where interest rates were. It just doesn’t make sense.

Daniel Creech 52:06

Yeah. And like I said, I’m not arguing and ignoring the charts and all that kind of stuff. I do think that the no new exciting shining object is still bullish because it’s the same old story. It is out of favor, out of momentum, however you want to say that. And I totally agree. I do, I will say, all the negativity and the selling and a lot of the nastiness,

Daniel Creech 52:25

I think, from a contrarian perspective, would be good. I’m going to throw a few things out to you. There’s an excellent report from Schwab, Charles Schwab, Frank. This gentleman’s name is Jim. I apologize in advance. Ferraiouli, F-E-R-R-A-I-O-L-I, Frank. It sounds like something you could pronounce easily.

Daniel Creech 52:45

Anyway, this gentleman points out, and he’s talking about efficient and inefficient cost of miners. I encourage you guys just Google that at the Schwab report. But what I want to tell you is, and this is impressive because, okay, Bitcoin rallied to 126,000, fell down to 60,000. That 60,000, Frank, was that 200-week moving average I talked about earlier.

Daniel Creech 53:04

It’s also, as this gentleman points out, the efficient mining cost of Bitcoin. So the biggest, best miners, and from a little bit of research I’ve done and trying to use all-knowing AI, I’m going out on a limb here, Frank. I’m going to say about 15% of Bitcoin miners are under this classification of efficient, and that’s around the 60,000 mark.

Daniel Creech 53:25

The inefficient miners’ cost is much more higher, to 90,000 to 95,000. Now, Bitcoin didn’t reach 90,000 to 95,000 just this recently. It was around the 80,000. That’s another reason to watch the 60,000. I’m not saying it’s a hard line in the sand. I’m simply saying I’ve read about this for over the years, and you talk about Bitcoin mining cost.

Daniel Creech 53:45

If you buy into the Bitcoin, which, theory, mining is important, and to a certain point, it’s going to have to bounce around the levels that it cost. So yes, it can go under 60,000, but in my opinion, it’s not going to go significantly under 60,000 and stay there as long as not everybody gives up in the network.

Daniel Creech 54:04

I don’t think that’s a big risk. I could be wrong on that. The other thing here on the inefficient miners and going to 90,000, you can look at that as kind of a short-term trading top or however you want to think about that.

Daniel Creech 54:17

Last thing I wanted to say, Frank, now I forget, but I like to see the report.

Frank Curzio 54:20

I’m looking at it. I’m reading this.

Daniel Creech 54:21

Mining cost. What else was I? Oh, the last thing is this four-year cycle thing. Now, you can pull up long-term charts and see this four-year cycle of Bitcoin because of the halving Frank talked about. I’m going to say this. I’ll be honest and transparent and humble. I don’t know that the four-year cycle is going to continue forever. I will say it’s worth paying attention to because a ton of money pays attention to it, okay?

Daniel Creech 54:43

Just like moving averages, just like charting. You can say it’s all BS. I’m not saying it’s the gospel. I’m not saying it’s all BS either. When you have tons of money looking at 200-day moving averages or whatever, you ought to put that in your toolbox. Outside of that, Frank, so you have the four-year cycle. If you look at that,

Daniel Creech 55:01

that’s going to end this year or early next year. So that kind of plays into your thesis of, hey, maybe a little bit of a toppy situation in the markets, risk on in general when you’re looking at AI markets, obviously Bitcoin, and then, boy, does that really look good. However, I just think I would be a buyer, not a seller, at current levels if you believe in the longer-term story of Bitcoin.

Daniel Creech 55:23

So yeah, I thought those were some good numbers. An excellent report from this gentleman at Schwab.

Frank Curzio 55:29

And even for me, from my point of view here, Daniel, is I want to see some catalyst. Like, if the U.S. came out and said, and Cynthia Loomis was on this, you know, with the strategic, you know, Bitcoin reserve, they came out and the U.S. said, hey, we decide to buy 200,000 Bitcoin a year for five years.

Daniel Creech 55:44

Oh, yeah.

Frank Curzio 55:46

Of course, I’m going to change my thesis.

Daniel Creech 55:47

Right, of course.

Frank Curzio 55:47

Right, of course. You know, you want to change with the facts. But for me, it’s just, you know, even for a lot of the bulls who emailed me, I just don’t see the case of why I should be buying Bitcoin right now. You know, it just, it just didn’t make, I mean, the speculative money, listen, you have the speculative money going into this asset class, and a lot of speculative money is going to be going to SpaceX,

Frank Curzio 56:07

going to be going to Thrive, going to be going into OpenAI, right? And then you have the Bitcoin miners who are sellers. And again, that’s like 0.7% of all Bitcoin, you know. But it’s, you know, where are you going to get this buying from? Institutions buying? I’m not seeing institutionals buying. Are other countries buying? I’m not really seeing it. So, you know, unless something changes to that fact where,

Frank Curzio 56:27

you know, I feel like that you need enthusiasm. You need enthusiasm for an asset to go higher, okay? You just need it, okay? You need it. I’ve been doing this for 30 years. You can’t have a shitty thing that nobody cares about continually go higher. It just doesn’t work like that. You have the, and then you have booms and busts because you have the acceleration, you know, irrational exuberance, and then, you know, then it comes down.

Frank Curzio 56:48

Maybe we’ve seen a little bit of that with an AI. It’s up so much. Some of these stocks are up tremendously. But you need some kind of enthusiasm. That’s the thing. It’s, what’s the enthusiasm you’re going to tell me? Oh, you got to buy Bitcoin. Why? Because, oh, it’s an alternative currency. You told me that like 10 years ago. Okay, I get it. That’s why it went from 6,000 to where it’s 62,000, over 100,000. It’s down from 120,000. You know,

Frank Curzio 57:07

you got to have, you know, strategic reserves. We’re not really seeing that from other countries. You know, this safe haven quality of owning that and owning this asset, I don’t think you have that. I don’t think this is safe. Are you really going to own Bitcoin as volatile as it is as a safe haven asset? That’s, to me, that argument never made sense. But what’s the excitement behind it?

Frank Curzio 57:28

What’s going to go into this where people are using Bitcoin? Where Amazon is going to be saying, okay, you could pay things, like just have it more of a payment structure? You really need that going forward because the excitement right now has waned completely. And I think it’s 60% to 65%, and don’t quote me on this because I think I heard them say this on CNBC today, but I think it’s close to this, of people who bought Bitcoin are now down.

Frank Curzio 57:49

65% who bought Bitcoin are now down, right? Because a ton of people bought it after this point, after this point, right? I mean, there’s so much money that has flowed into this currency and into this asset class tremendously after, you know, and let me see that too before we end here. I’m just curious to see, you know, a Bitcoin chart here.

Frank Curzio 58:10

And let me get rid of that. And let me see this. So this is like five years. And if you look at five years, you’re looking 2024. So basically, since 2024, that’s when it’s been above this level and been staying there. Now we’re breaking these levels over here. But, you know, for the last couple of years, we’ve been here over two years,

Frank Curzio 58:28

and a lot of people have bought the shit out of Bitcoin, especially going into, you know, the election and going into, you know, okay, all these laws are going to change, and Trump’s all behind this stuff and everything. But a lot of people are now down their Bitcoin and maybe look to sell to, you know, for tax purposes.

Frank Curzio 58:43

I know it’s a little early in the middle of the year, but, you know, we’ve seen gains on some of AI plays where I’m actually looking for losses right now for some of the stocks because, you know, we’ve gained tremendous, you know, had tremendous gains. So anyway, you know, enough of the Bitcoin thing. I guess we’ll see what happens with it. I know we, you know, and I hope it goes higher. There’s a lot of people that own it. I don’t own any Bitcoin presently,

Frank Curzio 59:03

but I, you know, I hope it goes higher for you guys. If it does, I just, I don’t know what the catalyst is. But one of the last things I want to say.

Daniel Creech 59:08

Well, thank you, Frank, because, you know, I’m over here holding Galaxy Digital.

Frank Curzio 59:11

Galaxy Digital, which is into a lot of things, like the perp market probably, and also the, and I hate the perps. So perps are these future contracts with no expiration date. So it allows the, you know, traders to basically, you know, speculate on the price without owning the underlying asset. What could go wrong? What could go wrong with that?

Frank Curzio 59:28

I mean, it basically allows you to take a monster position on an asset without having to have the collateral, which is holy shit. And this is a massive market outside the U.S., but Calchi just got approved to trade these perps and everything. And, you know, we’ll see what happens.

Frank Curzio 59:41

But I just thought that was funny with the regulatory approval coming on May 29th and to show how crazy, you know, again, another speculative market that may take money out of the market for Bitcoin. These perps right now, they said they have $1 billion in trading volume, right? They just got approved like a week and a half ago, $1 billion in trading volume. Bank of America says it’s a $90 trillion market.

Frank Curzio 01:00:02

But, and this is, you know, without Calchi, but Calchi is allowing the U.S. because this is never open to the U.S. in trading, right? So these, and why would you call it perps? Isn’t that like a red flag right off the bat? Perp? Anyway.

Daniel Creech 01:00:15

Perp, Frank.

Frank Curzio 01:00:16

And Coinbase just got that approval too. But that’s what Galaxy, they’re going to do other things, right? They’re going to do other things to make their money. Of course, you know, I guess they’re leveraged to Bitcoin, leveraged to crypto. But, you know, these are great companies like Galaxy. I think it’s a great company, and they’re not just into crypto, right? It’s a lot of different things. They’re into the energy play as well, right, with an AI.

Daniel Creech 01:00:34

Yeah, they’re the data center place.

Frank Curzio 01:00:35

You know, so there’s a lot going on. I just, you need Bitcoin to go high. I don’t know if it goes much lower from here, but hopefully it does go higher. But just a lot of positives. A lot of these stocks are down. A lot of this stuff’s factored in, and we’ll see how it goes going forward. So not the most optimistic podcast ever where buy everything, everything is great. We’ve been selling a lot in our newsletters, as you know, and I just think it’s going to be a tough six months.

Frank Curzio 01:00:54

And maybe we see, what will we see in downturns, Daniel? When we see downturns, ever since the credit crisis, when we see downturns, they happen fast. Boom, like a 4% decline on Friday in the NASDAQ. Today, it’s been back and forth. Oh, wait, those numbers might have been good. Oh, wait, they’re really not good. They just met these crazy estimates. So much higher, the CPI, and now we’re seeing the market sell off a little bit today.

Frank Curzio 01:01:12

You know, I think we’re going to gradually see that over the next six months. Maybe it’s 15%, 20%. I don’t know with the S&P. I just know some stocks that are down 30%, 40% from their highs, which is, I think, over 150 stocks in the S&P 500, might not see as big a downturn as some of these AI names that are up literally 300%, 400% over the past 18 months to two years, and some of them up even more, like Micron.

Frank Curzio 01:01:32

That could pull back 20%. You’re fine because you’re up so much on it. So I just think it’s going to present a real good opportunity for you. You want to prepare. You want to have money on the sidelines when the markets come down because then you can buy cheap assets. That’s what the greatest investors in the world do. Market crashes are great if you’re prepared. I’m not saying we’re going to crash. We could pull back. Just be prepared. Take some off the table.

Frank Curzio 01:01:50

We’ve done very well across the board with our newsletters, and that’s what we’ve done. And now we’re going to put some of that money to work where we seem fit if this market continues to pull back, which I’m expecting the next six months. So questions, comments on me and you, frank@curzioresearch.com. Daniel, what’s your email?

Daniel Creech 01:02:05

Daniel@curzioresearch.com.

Frank Curzio 01:02:06

All right, guys. We’ll see you tomorrow on Wall Street Unplugged Premium. Take care.

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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.