Frank Curzio 00:00

How’s it going out there. It’s Wednesday, September 2, and I’m Frank Curzio, this is the Wall Street Unplugged podcast where I break down the headlines and— Say what’s really moving these markets. Right off the bat here, right off the bat: let everyone know tomorrow we have a very, very big event that every single person listening to this should attend. Live on X, coming to you, Wall Street Unplugged, 11:00 a.m. That’s it, period. That’s my plug. Just kidding.

Daniel Creech 00:30

Well done.

Frank Curzio 00:31

The subject is: how to prepare for a 20% drop in the stock market, which I believe is inevitable. Don’t get worried. We could say a crash is coming. A 10% correction is called the correction, right? If we pull back 10%, it’s a correction. It’s 20%, it’s a crash. And we could say, “It’s going to market, it’s going to crash, currency thing’s going to crash,” and he’s bullish a lot, all the time. It’s the “it’s going to crash.” True. But what we’ve seen since the credit crisis is: when markets pull back 20%, they almost immediately snap back. And during this event—live, free, unbiased—I’m going to show you why, and tell you why I believe the market’s going to come down over the next couple months, probably the next couple weeks. How to position for it, and not to worry, because if you’re prepared, you’re going to make a shitload of money on the other side, just like we did during the credit crisis in 2010, 2011, going all in. Just like we did during COVID, where we told you to get out and we got back in at the right time.

Frank Curzio 01:23

I’m not saying I predicted every single crash, but those two we did very, very well on. Same thing here: you want to protect yourself, because as the market does come down, there’s areas of the market, and stocks, and sectors that are going to do well if we pull back because of the conditions and the reasons why we’re pulling back. And you have to look at those factors, which is going to make you money on the downside and also on the upside. So tomorrow, 11:00 a.m. on X, I’m going to break down the whole thesis, tell you how to position yourself, and give you an opportunity to ask questions. We’ve been announcing this on X. We just hit 40,000 followers, which is really, really cool. Again, it doesn’t matter to me. We’re just getting massive, massive traction. We’re getting, I think, 5 million impressions per month plus, which is great. That’s a bigger number than, you know, how many followers you have. I know people who have millions of followers who are getting less traction than we are when it comes to that, right?

Frank Curzio 02:11

And that’s great. A lot of people listen to our stuff because we’re real, we’re unbiased, we’re unfiltered, and we tell how it is. And I’m going to give you an opportunity to ask questions. So we’ve been posting this the past couple days. If you know, if you follow X account @FrankCurtis, yeah, we’ve been posting the past couple days. And we’ve been getting in unbelievable questions. Really, really good questions. And we’re going to try to get to all of them. Seriously. We’ll be on for—I’ve done these things for 2 hours, I’ve done them for an hour, it seems like a long time. I know Daniel just looked at me like I’m actually crazy.

Daniel Creech 02:36

Two hours? How are we doing?

Frank Curzio 02:37

But we—I know, for free, two hours. But next thing you know, when Daniel and I go through this, we’re just answering questions and really getting good questions. It’s a lot of fun. We’re going to stay on for you guys, right? We don’t even realize how much time is passing. Other times, when we don’t see questions coming in, we’re like, “All right, that’s it for us, we’ll see you.” But tomorrow, 11:00 a.m., tune in on X platform. It should be really, really cool. With that said, Daniel, how’s it going? How’s everything?

Daniel Creech 02:58

Going well, sir. Another beautiful day in Florida.

Frank Curzio 03:00

Beautiful day in Florida. Maybe not for Tiger Woods. He lives in Florida. Who lost his license for 5 years. What are your thoughts?

Daniel Creech 03:08

That’s a bummer. Well, that poor guy doesn’t have a very good driving record.

Frank Curzio 03:13

Yeah, I’d say.

Daniel Creech 03:13

This is another one of those things. I mean, hey, I don’t wish the guy bad, you know? He clearly has an issue with substance. I get that. Been there, done that. Got the t-shirt and all that. However, this is a glaring thing of rules for them versus us. He’s rich, he can do it every once. That’s a bad part of the way our world works, Frank. But a lot of good memes in the internet, that’s exciting. But yeah, I mean, I don’t—I don’t like hating on him, but I mean, it’s, you know, if I did that, and I’ve done this before, thank goodness, I just didn’t—I’d be in jail.

Frank Curzio 03:42

Yeah, they can’t really just do that.

Daniel Creech 03:43

You don’t just get a slap on the wrist.

Frank Curzio 03:44

Nobody will admit it.

Daniel Creech 03:45

Plus, yeah, everybody does.

Frank Curzio 03:46

Yeah.

Daniel Creech 03:46

This just shows you how fun the system is. And again, I don’t want to punish him even more. I’m just thinking out loud here.

Frank Curzio 03:50

Yeah.

Daniel Creech 03:51

Are you really punishing a guy that has his own pilot, Frank?

Frank Curzio 03:54

I don’t know.

Daniel Creech 03:55

However, I do understand this concept. You tell me not to drive, all I can think about is driving around. Forget $4 gas. I don’t care. I drive around and—

Frank Curzio 04:02

It’s not the driving, it’s the flipping of your car. I mean, maybe you should stop flipping cars when you’re—

Daniel Creech 04:07

We can’t do one without the other.

Frank Curzio 04:08

I mean, it’s almost like—you know how hard it is to flip a car? He’s done that several times. I mean, damn. I mean, it’s almost like, is it on purpose? Like, how do you flip a car? I can picture, oh, you’re drinking, you’re swerving around the road, you get pulled over. This guy flips cars. Like, he flips cars every time. I can tell you, though, one of the things that are going to kill him is, you need a license to drive a car. So he’s going to have to walk the courses or pay. His Caddy just got a nice raise. Because I would demand a lot more money, because that guy’s got to walk every course now. It’s only, you know, on tour and some of these—they got to walk every course, which kind of sucks. So that’s going to be an issue.

Daniel Creech 04:40

Somehow I think he’ll be all right.

Frank Curzio 04:42

I think so. I think he’ll be all right. That billion dollars and stuff like that. The funny thing is, the no contest. Like, our laws are so funny in America. Like, when you plead no contest. You know, it’s like Michael Jackson. No contest. No contest. No contest. I didn’t do anything. We found all this—

Daniel Creech 04:54

You got to go from Tiger to Michael.

Frank Curzio 04:56

It’s so—it’s just—it’s celebrities. It’s celebrities. It’s just like—I love when we got emails in, “He’s not a chalumelist.”

Daniel Creech 05:04

Oh, God.

Frank Curzio 05:05

He’s not. He’s not a chalumelist. I don’t understand why you can’t be great and be terrible at the same time. I mean, that’s our life, right? If you look at Steve Jobs, look at Steve Jobs. Steve Jobs was a great innovator. He was the biggest asshole life I’ve ever seen. I mean, that guy went after his family. Right? Who cares, though? It’s like, you know, Michael Jackson was one of the greatest entertainers, but he was, you know, did what he had to do with kids. And you don’t pay off people. They found all this stuff in his room, right? I don’t get it. So whatever.

Daniel Creech 05:32

Tiger.

Frank Curzio 05:32

You can deny it, deny it. But Tiger, getting back to Tiger, the no contest. I mean, how do we plead no contest? Because our laws are so funny where it means you accept punishment and conviction without formally admitting guilt. I mean, shouldn’t be the point of this, especially in a situation where he’s lucky he didn’t kill anyone? Shouldn’t it be about embarrassing him? And yes, he’s embarrassed on TV and all this stuff, but he’s not admitting guilt. He’s not admitting it. So it’s no contest, right? So it’s—for me, the point should be to embarrass someone who continues to do this, who drinks and drives like 100 times. Again, I got caught only twice. And admit it. I mean, I don’t get that part. I just don’t get the no contest. I’m going to pay the fine, but I’m not going to admit to it. You’re not going to admit to flipping in the car, calling, saying, “Hey, I just got off the phone with the president.” That didn’t work, buddy. All right? Take your responsibility. A lot of people have done this.

Frank Curzio 06:24

A lot of people have been embarrassed. That’s the point of this. But no contest. Nope. I’m not admitting guilt. I don’t know. I just don’t get it.

Daniel Creech 06:30

Last thing here. Isn’t the part of the embarrassment the publication of mugshots?

Frank Curzio 06:38

I love the mugshots.

Daniel Creech 06:38

So I have friends that check these, like, every morning. And family members. And they’ll be like, “Oh, hey, look, we got her out.” I mean, I don’t check that. Knock on wood. Hopefully I don’t show up on one of those. I’m just saying, like, I do think that’s kind of the point of, like, why do you publish those and make those public if it’s not kind of for that?

Frank Curzio 06:55

I mean, I think it’s so real. It makes it so real and identifies with people, I think, when you have moments like that. Because Scotty Scheffler, I think, when Scotty Scheffler—Scotty Scheffler was the most boring person on the planet. I didn’t even like watching him golf before he got arrested. After he got arrested, I loved the guy. Right? And someone had a shirt of him. I have this mugshot.

Daniel Creech 07:14

Very odd.

Frank Curzio 07:15

Yeah. And what did he walk by? And he high-fived them. He’s like, “Good job.” But that’s when it’s like, wow, this guy is actually real. He’s not a robot. Even though he played like a robot when he took the championship, who’s incredible.

Daniel Creech 07:25

To wrap this up, the best one was when Tiger Woods had to walk by the guy with Tiger Woods’ mugshot on his t-shirt. That was funny.

Frank Curzio 07:32

Yeah. I think that’s the thing.

Daniel Creech 07:33

Tiger’s got a great mugshot. Not great as in it’s a good picture. It’s a great mugshot picture, meaning they can’t look good.

Frank Curzio 07:38

Not the mugshot. His current pictures. He doesn’t look too—

Daniel Creech 07:40

The only pictures that look good on mugshots are those wild chicks that get busted for crazy stuff. I don’t know how they do it.

Frank Curzio 07:45

Yeah, I don’t know. It’s so amazing. Because they look—before they get arrested, they look good. And then after they get arrested, which should be the same picture, right? Just a different, like, outfit with the stripes on it.

Daniel Creech 07:53

It’s a filter. I think the filter.

Frank Curzio 07:55

You think so? I don’t know. I don’t get it. Because they look okay when they get arrested. Like, hookers and shit like that. They look good. And then all of a sudden you see the picture and it’s like, whoa, what happened? Who was that guy? Who was that guy? That English guy who got that girl in the street? What was his name? Oh my God. What’s that guy’s name?

Daniel Creech 08:09

The 49ers guy?

Frank Curzio 08:10

No. The English guy’s an actor. He’s pretty cool. I forgot his name. Same thing. They don’t come back from this stuff all the time, though. What are you going to do? All right, let’s get to the markets. Let’s have some fun here. The markets are moving a tiny bit higher today, but very, very weak. Right? And we’re seeing that because the 10-year—the 10-year is a very, very big deal. You look at it on the screen. It’s 4.8. I don’t know how to put this in perspective to you, because this has a lot to do with my thesis tomorrow on X, where I’m going to tell you, you know, if this thing goes to 5%, goodbye. I mean, the market’s getting crushed. So forget about the 2-year. Forget about everything. It’s the 10-year. The whole market revolves around the 10-year. It’s mortgage rates, credit cards, student loan debt. All the loans revolve around the 10-year. Joe, pull up a chart of the 10-year and put up like a 5-year chart if you can. So if you look at a 5-year chart and you go back to, say, July lows, right?

Frank Curzio 08:57

So that’s July low of 2022. 2022. The other way. The other way. The other way. 2022. What’s that number right there if you look at it? Let me see. So if we go back to July 2022, we’re looking at, like, you know, 2%. But let’s even go to, like, November, 3.7. You know, we’re looking—the 10-year, we don’t see these major, major moves. I mean, we saw a high in 2023. This is October 2023 of 4.9. And between 4.9 and a low of, you know, 3.8, back and forth, back and forth, back and forth. My point is, even if you look at a year chart, this might be better for me. When you look at a year chart, you’re looking at something that floated basically, even in the past 3 months, say, 4.2 to 4.8. I mean, 4.2 to 4.8. That is a major—that is a 4.2 to 4.8 in just a few months’ stretch is probably equivalent of the markets coming down 20 to 25%. That doesn’t happen. It doesn’t happen. And we’re seeing the 10-year Treasury skyrocket.

Frank Curzio 09:59

Why? Because it’s telling us inflation’s going higher. Inflation’s going higher. What do we do? It’s telling you that the Fed, who kind of came out there last meeting and said, “Hey, okay, we understand where everything’s going. We understand inflation’s a little bit higher, but we’re good right now. We like where it is.” So you’re looking at the rates on the Fed Funds futures showing up rate hikes for September and December. Crash. They crashed, I think, at 35, 40%. And then when Walsh just talked in Jackson Hole, he sounded much, much more hawkish. And all of a sudden after that meeting, now we’re back over 65% of rate hikes. But what we’re noticing is no matter what they say, and that’s a short-term rate, no matter what they’re saying about the short-term rate, the long-term rate’s like, “F you, we don’t believe you.” We see inflation going higher. And as it happens, what does this do? It hurts the housing market. If you notice, the housing market was frozen at 4.6, 4.5. It’s 4.8 now, right?

Frank Curzio 10:49

Mortgage rates are going higher because of this. It tracks the 10-year. So, you know, when I see—and I like Bessent—when I see Treasury Secretary go on TV and say, “The economy’s strong, inflation’s going to come down, elevate energy prices, they’re going to come down.” And he actually said this today, this morning. He goes, “Energy, those elevate energy prices, they’re going to come down.” I have no idea when, but it’s going to happen. Like, what? Like, that didn’t work too well with a former Fed chair, right? Oh, it’s transitory. Inflation is—it’s going to come down. Okay, when we think it’s going to come down, we’re looking at weeks and months, not a full year where we went from, you know, 3.5%, 4% to 10% inflation, right? So, you know, they’re going to come down eventually. Well, you can’t see the end if you don’t have a solution to Iran. And we have zero solutions for Iran. We have zero solutions of how we are going to—how we’re going to be able to open a straight fully. And yes, they’re saying, “Oh, we got more oil pushing through that straight than, you know, any time during wartime since what Iran and all this BS and stuff like that.” But you’re looking at elevated energy prices, you’re looking at elevated inflation, and it’s hurting the markets.

Frank Curzio 12:01

It’s hurting a lot of the markets because we are sitting in a debt cycle that’s pretty crazy that, you know, we’re making lots of promises. And hopefully we’ve been down this road in telecommunications and other areas where, you know, we see this massive buildout. But what happens during every bull market, right? Everybody gets greedy. You see this massive, you know, there’s so much demand that we build a massive amount of supply. We oversupply, the market crashes, right? It’s just cliché. It’s constantly throughout, you know, 100 years of the market. 100, even longer. Just this constant up and down, up and down, up and down wave. And that’s what’s going on now. However, we haven’t seen the demand destruction yet. Demand keeps pushing higher, pushing higher, which is forcing these companies to take out more and more debt beyond their free cash flow. And now you’re like, “Holy shit, what happens if this doesn’t come to fruition? What happens if AI just—it’s not as strong as you say?” Not that, you know, we believe it.

Frank Curzio 12:50

We’re all in. We’ve made tons of money on this trend if you listen to us the past two, three years on AI. A lot of great stock picks. 10X winners, 8X winners, lots of winners. But when it looks at AI and what happens if we see the demand come down, I mean, it’s look out below. And that’s what you’re seeing here. And people are worried, Daniel.

Daniel Creech 13:07

Yeah, absolutely. Did you say the odds of a rate hike now are about 65%?

Frank Curzio 13:15

Last time I looked, this was a couple days ago.

Daniel Creech 13:16

I saw 60-ish, yeah.

Frank Curzio 13:17

Yeah. But they were like 35% for September. Now they’re like 65%. Just this month.

Daniel Creech 13:22

And the reason I asked that is because I was talking to a bankster, one of my favorite banksters on the island, Frank. He’s a really nice guy. And their bank, I was asking him, I said, “Hey, what are you guys forecasting? Or do you guys forecast?” He says, “Yeah, our bank’s saying, listen, we think the Fed’s on hold for the remainder of the year. We’ll see how this goes.” He did say, though, he looked at me and he says, “Hey,” and this is the question I want to point to you, because I was thinking this as well. What would a 25 basis point hike actually do other than signal? I think the signaling would be much more impactful than the actual rate hike, in my opinion.

Frank Curzio 14:02

Of course.

Daniel Creech 14:02

I want your opinion on that first.

Frank Curzio 14:04

Yeah. In my opinion.

Daniel Creech 14:05

That’s all it is?

Frank Curzio 14:05

That’s all it is. I mean, it’s almost like you never have to go to war, but if you show up with a million people at your front door with bats and knives and guns and stuff like that, you’re going to be like, “Holy cow, all right, let’s not.” No, no. I’m exaggerating the point for that. I’m saying that.

Daniel Creech 14:18

I know. I’m just saying.

Frank Curzio 14:18

That’s what the Fed’s all about. Hey, we’re going to raise if we don’t see this. It’s all about what we think they’re going to do. That’s why even when it comes to fines with companies, it’s like there’s this uncertainty. And then all of a sudden, when you have the fine and you’re done like J&J and paying the fine, J&J is on its way off to the races, right? Because now you have the certainty. That’s the Fed’s job, is to project and let the world know, no surprises, “Hey, this is where we’re going.” And right now you have the uncertainty. Are you going to raise rates? Are you not going to raise rates? And based on Washington communication, nobody’s know what the hell he’s going to do. And that’s a problem when you go from 70%, yes, and this is probably two months ago, that we’re going to get a rate hike. And then all of a sudden down to 35% after you have your Fed meeting. And now you’re just talking Jackson Hole and back up 65%. That means you have a communication problem. That means people do not understand.

Frank Curzio 15:03

And that’s what you don’t want to have at the Fed. The Fed, and thank Alan Greenspan for this, there’s always that communication. You have Bloomberg, you have the Wall Street Journal. Those are the outlets that you feed your information to all the time, which is fine. And say, “Okay, push this out. This is kind of where we’re going.” And you never want surprises. Like, for example, you never want the market would absolutely—the global markets will go in chaos if you had Walsh come out and say, “We’re cutting rates by 25 basis points.” The whole markets would be in absolute chaos. Cut, not raised, because nobody expected that. All global markets would be like, “What the hell is going on?” Because, you know, we control the world when it comes to these rates. You don’t want surprises when I don’t have surprises. So yes, what they do is they try to communicate. Walsh’s like, “Hey, we’re going to communicate less.” I get it, but you still have to communicate to the point where we kind of know what’s going to happen.

Frank Curzio 15:50

And this way, there’s no surprises. And right now, we don’t even know what’s going to happen. Really, we really don’t know if there’s going to be a hike or not. Because a couple months ago, you said, not even six weeks ago, five weeks ago, when was the Fed meeting? You said, “Hey, you know what? We’re okay. Inflation’s coming down. We see good numbers from the CPI, PPI, right? Everything’s showing the last two months that inflation’s moderating.” Moderating. 2% is an absolute fucking joke. Okay, that will never hit that rate ever again of 2% inflation. But that’s the target. Let’s just pretend that that is the target. If you just said the target’s going to be 2.5%, it’ll be a lot more better. Because we’re never going to have 2% ever in the history of our lives again. But now, a couple months later, not even six weeks, five weeks later, you’re at Jackson Hole. And then, you know, the odds change completely because no one knows how you communicate. So my answer to your question, Daniel, is communication is the most important part of how you are basically communicating to the market of what you’re going to do.

Frank Curzio 16:42

And right now, the market doesn’t really know what this guy’s going to do. And what the Fed is going to do, I should say. So everybody wants to know.

Daniel Creech 16:47

Right. And that’s what he wants, clearly. Now, let me ask you another question then. Did you listen to Walsh’s speech?

Frank Curzio 16:54

No.

Daniel Creech 16:55

So he started talking. He started his speech about hiking in the mountains. Hiking, Frank.

Frank Curzio 17:00

Oh, yeah. I saw that. Yeah. Hiking in the mountains. Yeah. I saw the video part of the speech.

Daniel Creech 17:04

Was it a signal?

Frank Curzio 17:05

Maybe. I don’t know. He’s talking about how he almost died, right?

Daniel Creech 17:08

If what?

Frank Curzio 17:10

Yeah. The hiking, how dangerous it was.

Daniel Creech 17:11

Oh, no. That was a whole story.

Frank Curzio 17:13

Yeah. He tried to be funny, but you’re a Fed governor. You can’t be funny.

Daniel Creech 17:16

Fed governors aren’t funny.

Frank Curzio 17:17

No, you’re not funny.

Daniel Creech 17:18

You got to be Treasury Secretary to be funny.

Frank Curzio 17:19

Yes. True.

Daniel Creech 17:23

So let me ask you this. If he doesn’t hike at this next rate, is that a good thing or a bad thing? Because everybody’s expecting a hike rate. Not that 60% is 100. However, I do think it would be a bigger surprise, given the markets and the media’s attention, if he doesn’t hike rates in September. I’m still in the camp to where, and I’m not trying to just take the other side for the sake of taking the other side. I see these rates going up. If rates go up to, say, 70, 80%, okay, I just think that he’s put all this time—Walsh has put all this time and effort into this task force and such. I think that that has bought him enough time to convince his minions, voting members, that you can wait until this task force comes back. Unless we get really crazy, what am I, information, data next week. Because next week, we have the CPI and all that kind of stuff.

Frank Curzio 18:14

And Friday’s unemployment rate.

Daniel Creech 18:15

Before—well, this Friday, yeah. Next week, I’m sorry, we have more inflation readings. And then we have the—

Frank Curzio 18:19

We’re going to know if those inflation readings—

Daniel Creech 18:21

And we have the Fed government.

Frank Curzio 18:22

We’re going to know if those inflation readings. And the meeting is 15th to the 16th, right? So we’re going to have the CPI, PPI come out before that, unemployment Friday. We’re going to know with 90% certainty of what Walsh is going to do when his meeting is on the 15th to the 16th, whether he’s going to raise rates or not. And we should know. Steve Leeson is going to be reporting, but they’ll leak that out to the right sources saying, “Hey, rate hike odds.” You’re going to see them go above 80% or below like 40%. And that’s going to be based on how they leak it to the market. That’s their job. That’s what they do. They want to leak it because you don’t want these surprises. I think we really need to hike. We really need to hike because, you know, inflation is not slowing. Yes, you could highlight a couple of sectors. Joe, how many views did that post get where I didn’t even think it would be that big, but I was in Dick’s Boarding Goods and Dick’s Boarding Goods bombed the quarter after the last quarter manager was like, “Things are great.

Frank Curzio 19:10

It’s the greatest thing ever. We’re awesome. We’re on fire.” And all the analysts were like, “Yeah, high five” and each other. All the analysts are like, “We’re great.” And then they came out and lowered, completely bombed the quarter, lowered guidance like, you know, by a ton. And the stock lost 30% one day. And there’s the video. You can see it up there. Look how much these are HOCA. I mean, we’re looking at—look at the price. That’s not Jordan’s. That is not really Jordan’s. Those are just—it’s not the Kyrie earrings. It’s not the Curry’s. Are you kidding me? That’s just a regular average brand. If you walk through there and see the prices, and you could even go through it, and New Balance—my New Balance is, New Balance, by the way, is pretty cool here. Oh, I got my Brooks on. My Brooks costs like 120. New Balance costs 120. You can’t get a sneaker in Dick’s Boarding Goods for under $125 anymore, unless it’s like sandals or something. And this is insane. This is insane. This is a regular stick.

Frank Curzio 20:00

I’m not like targeting. This is, you know, cherry picking here. I mean, you’re wondering why nobody’s buying more and more sneakers and have four, five pairs. Are you kidding me with that price? 225 for HOCA? Are you kidding me? What is there that’s worth 225? That costs probably $20 to make that sneaker. Are you kidding me? And sneaker prices, if you look at inflation, you see all these numbers going up incredibly. If you look at the last six months, look how much sneaker prices have gone up. And that’s their bread and butter right there. Good job for Under Armour saying, “Hey, you know what? We really got to get out of this business a little bit.” And they’re still producing sneakers, but, you know, good job for them and noticing, “Hey, maybe we can’t be Nike and just sign these athletes and sign all these crazy freaking deals.” And, you know, they don’t have Curry anymore. But, you know, that’s an old business model that worked. And it’s not really working. Let’s sign the rights, you know, for the stadiums and put up all this money for the stadiums and these rights and stuff like that.

Frank Curzio 20:47

It’s getting absolutely insane right now because you just go higher and higher and higher every single year. But, you know, when you look at inflation, inflation is just so out of control. But sorry, Daniel, I mean, you know, every time you ask me a question, I feel like I go on this tangent. But go ahead. What was your point here? 15, 16. I think we’re going to—I think he’s going to raise. Go ahead.

Daniel Creech 21:03

Yeah. I was just curious because I, like I said, I will have to watch the odds and wait for the information this week and next week. I just think there’s so much on the task force there. And really, I think the media—and go ahead, email me, Daniel@curzioresearch.com. I just think the media is trying to make this effort to hike so that he has independence. And we’re going to cling to this independence. And this is the only thing I get so frustrated with the billionaires and investors and all this kind of stuff. We’re talking about Fed independence. We’re talking about Treasury independence. That is the biggest lie to all you individual investors. Do not listen to it. They’ve never have been, never will be independent. And if he falls into that trap, that’s silly. Now, I would like to ask you, Frank, I do think that two things can be true. I do think that higher yields are somewhat of a result of a growing economy and the demand. It’s simple supply and demand. You have all this demand build-out.

Daniel Creech 21:57

It’s just like you said, railroads, internet, whatever you want to talk about, the big build-outs you go through, these boom and bust cycles. And in addition to that, I do think that some of that is pushing on higher yields. The other side of that is the absolute massive demand for government bonds. Not only us, but let me bore you with a couple of stats here quickly. So T-bills are short-term bills, think under a year. Then you got Treasury notes. That’s 2, 3, 5, 7, and 10 years. The Treasury bonds are what Mr. Bessent made so important a couple of weeks ago when he was talking about the buybacks on the 20 and 30 years. What I want to point out here is that the bills, the short-term stuff, this started under really significantly under Janet Yellen. And Mr. Bessent, our current Treasury Secretary, blasted her and said this was silly. And he just took the baton and ran with it. So that just shows you the political game there is. However, bills represent about 22, and I’ve seen a lot of different stats here, so let’s round.

Daniel Creech 22:58

Let’s just say 25 to 35% of all of our debt is short-term, okay? About a third of that, Frank, has to get refinanced in the next 12 months. So in addition, so think about this. You have this tons of money out there looking to invest in bonds or wherever, and you have hyperscalers that we’ve talked about. You basically got a trillion plus going into CapEx over the next pick-your-timeline. But you have trillions in deficit. You have trillions in debt. And that all has to be financed. Yes, yields are going to go higher. For how long, how high, yeah, we can have that fun debate. But when you look at the breakdown of Treasury bills, and really the big thing here is you can look at, hey, what’s the debt makeup of bills, notes, and bonds. But what I really focused on is the idea that how much have bills, what percentage of bills short-term represented the debt, and now what do they do today? Those are growing significantly. So you will see less long-term bonds and more short-term bills and notes and stuff.

Daniel Creech 23:55

And that’s just going to continue to have this kind of momentum, unfortunately, for higher yields.

Frank Curzio 24:00

Yes. And I could see the concern here, right? Because, you know, high yields are terrible. There’s a lot of—now we’re taking out a ton of debt. And if you look at how much debt we’re taking out, I mean, for me, this was a big signal. And we saw this. And, you know, I wrote down this stat, which is from—this is from Google. So if you look at Alphabet, right? So Alphabet, when they came out, they raised $55 billion in debt. Good, right? $55 billion in debt. However, in the preceding month, just a couple months later, they decided to raise $80 billion of equity. $80 billion in equity. And when you see that, you’re like, wow, these guys. One is you’ve seen the debt market. It’s not as easy. You’ve seen, you know, spreads widen. You’re looking at, you know, Oracle caught that problem as well, where, you know, I think we all look at it from the equity point of view and say, okay, what about equities and equities coming down? When you—the debt markets are very, very dangerous because they’re illiquid.

Frank Curzio 24:59

And when you have illiquid markets and you need to dump stuff, that’s where you get into the private equities and why they’re getting crushed right now, right? They have all these companies, everything. They’re supposed to be funding. They’re supposed to grow. They’re supposed to build these companies. They buy them, you know, just change the management, do what they have to do. They get in the board. They cut costs and stuff like that. Usually, they’re great assets. You know, these guys have lots of assets where, you know, they could basically borrow off those assets. And they come out and they go public and they make a fortune. And now they have what is called dry powder. And they do it again and again and again and again, right? And they do it with their portfolios. Well, they’re sitting with a list of tons of companies on the balance sheet. And the worst thing that happens to them is interest rates are going higher. So they’re not able to leverage as much. Now they have these companies where the CEOs are like, hey, you guys took us over. You’re supposed to grow us. Well, you’re not getting any money anymore. Well, could we sell? No. Because we’re not going to mark-to-market you because it’s about 40% less than where we bought you.

Frank Curzio 25:44

So we don’t want to let the world know about that. And now you’re seeing all these people who invest in these private equity funds going, you know what? You told me it was like a seven-year period, eight-year period. I’ve been here for 10 years, and you haven’t done shit. I want my money back. Okay, to the first guy. Okay, to the second guy. All of a sudden, 10, 50, that big investor is like, I want my money back. They’re like, no, no, no, no, no, no, no, no. You can’t do that. You’re not allowed to do that. We’re going to halt redemptions. You can’t take it out. No, no, no, no. We got to wait. That’s where we are when you have illiquid markets. It’s incredibly dangerous. So when you’re looking at the amount of bonds and amount of debt that’s being taken out to fund this AI, it’s insane. Because yes, these companies generate a shitload of free cash flow. How much? 26, 27. The cash flow for 2026, 2027 for the hyperscalers is projected to be, let’s call it 100 billion. It says 75 to 100 billion.

Frank Curzio 26:31

This is from Sycamore Tree. Capital Partners did a great, great research report just came out about debt and everything and why we should be worried. It’s not like a doomsday report. It’s just point facts here. Now, if you look at their free cash flow and how much their bonds are taken out, you have that number, right? What’s that number, Daniel? When you talk about the numbers of how much is got to be refinanced, but also when you talk about the amount of debt, what was it? $2.5 trillion?

Daniel Creech 26:55

Oh, I’m rounding here. It’s basically a trillion five when you back out free cash flow and then the capital and debt raise. Is that what you’re asking for?

Frank Curzio 27:02

Yeah. So a trillion five.

Daniel Creech 27:02

Basically have a trillion five.

Frank Curzio 27:03

Right? And you have 100 billion of free cash flow. Okay. But what are the projections for 2030? People don’t talk about this. Their free cash flow is supposed to be 500 billion. It’s supposed to go from 100 billion in 26, 2027 to hyperscalers generating their free cash flow of close to $500 billion. Now, if that happens, okay, fine. We don’t have a debt problem. But you have to ask what if. Because the what if question, if it does happen, you have Cerebras announcing these deals. You have all these companies announcing these deals. OpenAI is opening these deals. And their financing is based on, hey, once this happens and this happens and this happens, like the circular financing deal. We’ll finance this, but once you get up and running, we get to buy this. We’re going to give us money. You know, you got all this stuff going around, offshore balance sheets and stuff. And, you know, so it gets scary when you look at the numbers because the projections, again, the projections are okay until they go down.

Frank Curzio 27:53

And that’s when you have the credit crisis. That’s when you have a lot of this stuff where we’re like, holy shit. Wait a minute. The housing market can crash? It can come down? It never crashed before. It could crash? Yes, it could crash. It goes up on average prices 2% a year. And they went up literally 20% plus a year annually for four straight years. Yes. So you’re going to see it on the other side somewhere when you have this massive growth. That’s what we’ve seen in this market. When you see this massive, massive growth, unprecedented growth that we’ve never seen. We’ve never seen 1.3 trillion in spending in a year. That’s going to get next year from hyperscalers for AI. We’ve never seen anything close to that. Now that we’re getting that number, it’s like, okay, people are saying, well, what if? And the what if doesn’t have to be like, what if it’s not 1.3 trillion, but what happens if it’s 500, 600 billion because we’re taking out a lot of debt on this? That’s where you see in this market disconnect.

Frank Curzio 28:40

Interest rates going higher. It’s taking a wrench and throwing it right into the system. Because nobody’s really anticipating that where, you know, again, the 10-year is the most important rate. That’s factors into consumers. It factors into housing, credit card debt, all this debt we borrow off of. That’s what you have to worry. That’s why you’re seeing this pushback. So the market’s clear. It’s telling you clear as freaking day. If interest rates, that 10-year goes higher, the market’s going to come down. I don’t know how the 10-year goes lower, Daniel. Maybe it goes lower temporarily if we get a good PPI and a good CPI this week. Fine. That would be three in a row. I get it. But we’re still seeing inflation. Again, we say they beat the estimates. The estimates are still calling for inflation to rise. And we’re rising on top of 30% annual inflation. If you’re looking at a four-year period, inflation was 30%. We didn’t give that back, that 30%. Now we just went, okay, here’s a 30% increase in prices.

Frank Curzio 29:33

This normally costs $100. Now it costs $130. But don’t worry. We’re going to go back to growing 2% again. So it’s $130 to $130. You know, so we’re growing 2 to 2.5%, but it’s on top of this massive inflation we already saw. And people are struggling with their costs. And now you’re seeing rates go higher and higher because we’re taking out more debt. And it’s just kind of like this dichotomy. Is the economy growing? Is it not growing? Is it doing good? It’s doing good in certain sectors, but not other sectors. I mean, it’s all over the place right now. But look at the 10-year. If that 10-year approach is 5%, look out. I think that’s what’s going to happen. And I think that’s why we’re going to get a nice correction, even a more correction of 20%. If we do, it’s going to be a great, great buying opportunity because earnings are super strong. A lot would not be expensive. If you think we’re expensive, you should have been selling two years ago. We were much more expensive two years because earnings are growing tremendously.

Frank Curzio 30:20

That’s why we are in the market. You got to be prepared here because what’s going to push stocks higher? We have strong earnings growth. They’re telling us we have a strong economy. AI is on fire. What are the catalysts that I don’t see that could push this market higher? Very few, but I could name six, seven, eight that could push us lower right now, especially higher oil prices are not going away. We’re seeing higher interest rates. But what’s the catalyst that’s going to push us higher that’s already factored in? That’s not factored in. I don’t know. I can’t figure that out. So that’s why we got to prepare. And that’s what tomorrow’s show is going to be like. But I don’t want to get too much into that. But there’s a lot of moving parts right here. And the moving parts do not favor the upside. They favor the downside.

Daniel Creech 30:54

That’s a good point. I’ll just end with signaling because I totally agree with you that a 25 basis point hike in September, if that’s what happens, would not do anything for markets other than make them feel warm and cozy and get back onto this whole communication thing. I’m not saying I agree with that. I’m simply saying, to answer your question and kind of have a good debate here, Bessent and Trump are not going to sit back and watch. If we do get a great pullback and it’s a buying opportunity, if you think Scott Bessent and President Donald Trump aren’t going to start pulling levers and either speeding up the end of the war in Iraq or doing some kind of stimulus, again, I’m not saying I have to agree with it. I’m just saying what I think will happen. And that’s what’s going to keep balancing that. Plus, you have this midterm election coming up that’s pretty important. And listen, I’m shocked and I was dead wrong. I thought that we would stop the bombing and back and forth at least three solid months before the November elections to give gas prices a chance to come down along with oil.

Daniel Creech 31:52

We’re staring at $90 barrel oil right now, $4. A lot of, you know, I’m using an average around here because that’s where I’m seeing it. $4 is high. So I was wrong on that timeline. That can change quickly. But to your point, it’s got to be signaling and stuff. And you have to keep putting up numbers. I do think a lot of it is the numbers have been so impressive with AI that the street doesn’t respect it and doesn’t think it’s going to continue. And I don’t know when that emotion flips. A lot of that’s signaling, but we’ll just have to see how it plays out.

Frank Curzio 32:21

Yeah. I mean, when I ran, I ran has never been in a better position as a country than now. You have our Democrats saying, please bomb everything. Please, please just keep it, you know, make sure you shut the shit out of the street. And then you have the Republicans going, we’ll give you anything you want just to announce for the next three months going into midterm elections that everything’s fine and you open up the street. So they’re in very, very good position right now. Just like we’ll go over oil in a second. Let’s go to Dell because Dell reported earnings. This is a name that you love. We’re up a lot on. It’s up triple digits this year. Another great quarter. It’s up 5, 6% right now, which is surprising because the markets, when the markets were down pre-market, this thing was up 8, 9%. Now the markets are going higher and Dell’s pulling back. But we see this with a lot of companies when I’m going to go over the highs and the lows and stuff like that. This quarter could not have been any better. This is one of the greatest quarters that we’ve seen this earnings season.

Frank Curzio 33:09

To me, when I look at this company and I look at the highs, how is this not trading at an all-time record high, which is, you know, well over 500. It’s 449 right now. So 514 is the how do we you can’t get better than this and this stock is actually below 450, but go over the numbers. What a move. It deserves to be up 10% or more today. But just a great quarter and unbelievable guidance. Unbelievable guidance.

Daniel Creech 33:33

Yeah. That’s an easy one. You want to know why it’s not up more? It’s because your boy jinxed it. Jim Cramer’s out there tweeting. He must know that I’m a big fan of this damn thing. He needs to be quiet, Frank. Email him, tell him to keep his mouth shut about Dell. No, I’m just kidding. Although the inverse Cramer is funny. I know his record’s good. But that is a funny thing. Dell, they did. They absolutely beat the numbers. And this kind of this is a good segue. I do believe that this is a yes, I know it’s up 200% year to date over that. However, I do think this is a continue like where the analyst and the street just keep saying, yeah, these are good numbers, but can it continue much longer? And even though they have put up amazing numbers for several quarters in a row, it just takes time. It’s like a Frank, I assume it’s like a cheating girlfriend, you know? You just keep taking her back. I don’t know why. You got to believe her eventually.

Frank Curzio 34:19

But talk about the call. You listened to the call and you brought some good time.

Daniel Creech 34:21

I did.

Frank Curzio 34:22

I didn’t listen to the call.

Daniel Creech 34:22

Yeah, I know. I’m out of here. The call was amazing. And the reason I’m saying about this, don’t believe me yet, is because when you read through the Q&A portion of the call, the analyst and I’m not trying to take shots here. And I am biased because I’m a big fan of Michael Dell and the stock. However, when I’m reading through the call, the analysts all seem to have this attitude of, hey, great quarter, great results, but hey, that’s pretty good, but can you keep this up long term? This seems like an inflation is leading to all your sales, but. And management, to their credit, just kind of kept reiterating the whole same thing. And I’ll get to some of that incredible growth right now. So earnings per share were expected of 491. They came in at 704, Frank. That’s decent. Revenue rose 57% year over year. Let’s get to the good stuff. Infrastructure Solutions Group, think AI, Frank, 89% year over year to a record. If you had that on your bingo card, the record, you’d be hammered. 31.8 billion.

Daniel Creech 35:17

That was 75% higher year over year than higher guidance. The numbers are just silly here. The guidance was absolutely incredible. For Q3 looking ahead, they see adjusted earnings per share of $6.50 versus an expected, Frank, 446. Revenue was expected in Q3 by the street to be around 41 billion. 49 is what Dell is targeting.

Frank Curzio 35:42

It’s insane. Insane.

Daniel Creech 35:44

Okay. Now.

Frank Curzio 35:44

They listened to your talk. Look, it’s up 6% now.

Daniel Creech 35:47

It’s down. It was up 8 or 9.

Frank Curzio 35:49

It was just up 5.

Daniel Creech 35:50

Yeah. And one of the crazy things here is that they were talking about how it’s not just about and I’ve been pounding the table here. Listen, you can’t just and this is over my head, but I’m smart enough to be dangerous. You just can’t take a GPU from Nvidia. You what?

Frank Curzio 36:09

I love that line. I love that line. I got to actually put that behind you, right? What did he say? Smart enough to be dangerous. I’m going to put that right behind. That’s a nice line.

Daniel Creech 36:18

I got.

Frank Curzio 36:18

It’s a Daniel quote.

Daniel Creech 36:20

You have I lost my train of thought.

Frank Curzio 36:22

No, you should. You should just end it there. We should end the podcast. That’s an awesome line. Go ahead.

Daniel Creech 36:25

What was I going to say?

Frank Curzio 36:26

Talk about Dell.

Daniel Creech 36:26

Dell. So you can’t just take Nvidia’s greatest GPUs and all this and plug them into an outlet like you have some air freshener. You need these systems. And that’s what Dell does. And again, I keep saying this and I will keep saying it. Nvidia CEO says they can build AI everywhere because of two companies, Dell and Palantir. Now, going through Dell’s conference call, what they’re essentially saying is it is AI is expanding into everything in their business. And one of the big things I thought that their answer was key to analysts and, hey, can this growth continue and all this kind of thing. Frank, there’s over a million units, think processors, computers, and such. And they’re already selling network that needs to be replaced because it’s older models. And so some reports that we get can put that around a third. So you think 30, let’s just say 33-ish percent of all Dell’s products out there that they’re already selling to their circle need to be replaced and upgraded over time. Now, what they keep saying on the call is demand continues to outpace supply.

Daniel Creech 37:32

And they can and just at a he even made the COO made a joke on the call, Frank, that said their sales team continues to say, hey, you know, we need more of everything. And that’s a good problem to have. In Q1, their AI backlog was around $51 billion. What do you think their Q what do you think their backlog grew to at the end of Q2? From Q1 to Q2, from 51 to what? It’s going to be higher.

Frank Curzio 37:59

I know.

Daniel Creech 37:59

Guess higher than 51.

Frank Curzio 38:00

Is it over 60?

Daniel Creech 38:02

95.

Frank Curzio 38:04

95.

Daniel Creech 38:04

93, 95.

Frank Curzio 38:05

Quarter over quarter.

Daniel Creech 38:06

Yeah.

Frank Curzio 38:06

That’s insane.

Daniel Creech 38:07

Just absolutely crazy. I mean, these guys.

Frank Curzio 38:09

The numbers are incredible, right? The numbers are incredible across the board, right? We see it. It’s what I would say, Daniel, here is how do we interpret this, right? How do you interpret this into the next situation? Because we know the numbers of Dell were great. We saw the numbers were great for a lot of hyperscalers. But what are we seeing with the stock price, right? For me, when I look at this and I see the stock price, it was 500 three weeks ago. Three weeks ago before this quarter. And now it’s 450 after a nice move today, right? So it’s, you know, when I look at it, what’s the interpretation? Well, the interpretation is this. You better hit your numbers in AI and raise guidance significantly or you’re toast. You better, right? So and that’s saying something because of Vogel reports after the bell today. So if you’re going in long, you better hope they report a quarter like this because this is the greatest quarter I think I’ve seen in a very long time, including Nvidia’s numbers were great.

Frank Curzio 38:56

This is a better quarter than Nvidia, which is insane. And you look at a stock that’s just up 6%. That was a lot higher three weeks ago, even after this move. Okay. So you have Meta great numbers trading at, you know, 590. That was close to 800. Like, make sure you’re looking at this going in. Like, what are the expectations? Nvidia now trading at 52 week high. You have all-time high. You have Amazon trading at their all-time high. But, you know, Microsoft 10% off its all-time high. But Meta going in next quarter, you know, being at its highest 800, that’s good. 590, right? So it’s trading. But like a Vogel, their stock is at 370. Their all-time high was close to 500. So their expectations aren’t great, but they better report very, very strong guidance here. If they do, you could see the stock go a lot higher from here. You know, we’ll see going forward. But, you know, that’s how I’m interpreting Dell where you better you better report great, super amazing earnings because a lot of these companies are saying, listen, you know, we there’s so much demand, we can’t even measure it.

Frank Curzio 39:50

We just we’re out of supply and no matter what we supply, how much supply comes into the market next year, it’s not going to be enough, right? That’s what everyone’s saying. That’s the norm. So if Vogel comes out today and says anything different, look out below. If they report a number like this, you should see a pop bigger than 5, 6% because this is really well off their highs. And this is a stock again was 500. It’s 370 now. I think I’m going to bet that Avago is going to report a 10% move, 10, 12% move in either direction. You’re not going to see Avago tomorrow up or down 3%. They just better report very, very good earnings. If they don’t, I’m not sure if we see a huge decline again because this is well off their highs. But keep track of this. If a company’s near those highs like Dell and they report a monster quarter, one of the best quarters, you’ve seen a 5% gain. Is that worth it going into the quarter? Because if they didn’t report good, you see Dick’s Morning Goods, you’re going to get annihilated.

Frank Curzio 40:39

So, you know, when you go in with high expectations going into these quarter results, be careful. I don’t know Avago how high they are at a 370 stock price when you’re 500. It doesn’t tell me the expectations are super high, but you know what expectations are super high or for Snowflake, who’s also reporting. Software companies have been kicking it, kicking ass, right? Past month or two, right? They’ve got annihilated. Now they’re doing much better. Even Salesforce came out. You see CrowdStrike through. Right now, there are people, big money, smart money betting strongly against Snowflake going into the quarter, which means tomorrow or today after the bell when they report, if Snowflake beats these numbers, look at that move. That’s a monster move. If Snowflake does not blow out these numbers, you’re going to see this is a stock that could eat and it’s down right now. I could see this stock losing 15, 20% tomorrow if they don’t come out with really good estimates. If they do, you’re going to see the reverse of 15 and 20% because you’re going to see massive short covering.

Frank Curzio 41:28

The smart money is betting that these numbers are going to suck or be worse than expected tonight. I’m curious to see. You’re going to see a 15% plus move, higher or lower in Snowflake. If I had a bet, it’s going to be lower tomorrow. Let’s see what happens. Don’t bet I’m just saying that that’s a guess. That’s a guess from me that’s doing this for a very, very long time. And I’d say I’m probably right on this 70% of the time, which is a good track record. I just think if I’m looking tomorrow, I think Avago is going to be higher. I think I think Snowflake is going to be a lot lower. Let’s see if I’m right.

Daniel Creech 41:55

Last thing on Dell here that I want to make a point and I’m butchering this. Frank, they were talking about AI tokens. What’s the learning inference and all this kind of stuff? And essentially, Dell was saying, listen, it’s not just your AI servers, it’s AI going into everything and kind of IT and everything creating value, not just being a cost pit. And they give some incredible numbers that we can go over later, but they’re talking about going out from now until 2030. Okay. And I’m shocked. I haven’t seen this on a headline across CNBC. And I don’t know, Joe, if you scroll around on that. I don’t know if we can see this, but I cannot believe that this hasn’t gotten more attention. They’re talking about demand to 2030 and they think the inference for AI is going to grow 87 times. Okay. Forget wherever we’re starting. Just 87 times growth between now and 2030. And they give this quadrillion token number and all that kind of stuff. They said, we’re expecting AI to be 75% of all data center demand, 200 gigawatts of power being added.

Daniel Creech 43:00

And then they said this. And if you look at that math, the opportunity in front of us is more than a trillion dollars over that time to 2030. A trillion dollar opportunity that hasn’t even made a headline from company from a company that is putting up unbelievable growth quarter after quarter after quarter and is in the heart. And essentially, I think we’re seeing AI make its way downriver from the king of AI just creating GPUs and financing to those that implement it and then it’ll keep going downriver to the user base and all that kind of stuff. I think that that’s just listen, I’m not if you’re a student of economic history at all, you understand this is nothing new. This is how cycles work. I’m just saying everybody is is scared and I get that. There’s plenty of reasons to be nervous. However, if the market does pull back like we believe it could, this is one of the absolute best opportunities I see. And again, that trillion dollar for those of you following at home and like to nerd out, it’s on page 10 of the conference call.

Frank Curzio 43:56

No, that’s really good stuff. So, so let’s move on here. So we’re a little late. Let’s go into oil prices. So, oil prices on the rise again, close to 90. I mean, people aren’t talking about diesel enough. Diesel is well over 100. That’s the that’s the cost that directly gets passed on to you. Not this. I mean, when you look at at at prices at at the gas pump in in Florida, they’re around, you know, 395, whatever, close to four. And, you know, you look at 20 cents, say if it’s 20 gallons of, you know, something’s 25 gallons. I got a big tank in my new truck, but, you know, if it’s 20 gallons, I mean, you’re looking at $20. You know, it’s not it’s not that big of a deal.

Daniel Creech 44:30

Your truck’s a diesel.

Frank Curzio 44:31

No, but I’m just saying, but the diesel, but I’m saying.

Daniel Creech 44:33

No, I got yeah.

Frank Curzio 44:34

So it’s only like a $20 difference, right? Maybe $25 difference and then times it by like twice if you can get $50. I mean, that’s like what you pay in tips through through, you know, some of these. I hate I hate this now. Even through drive-throughs, when you go through every place you get, if it’s a Dunkin’ Donuts, whatever, they they hand you like they instead of you giving the card, they pull it out and first thing it says 10%, 20%, 30%. I’m like, Jesus, for what? For doing what? For me going through drive-through? The tip thing is out of control. Anyway, it’s not that the oil prices that people are like, wow, it’s 90. Holy cow. It’s crushing consumers. It’s not really crushing consumers when you do the math. What’s crushing consumers is diesel. Diesel is absolutely through the roof. And those costs filtered those higher costs are being passed on to you from every single company, from the Walmart to the everything. Everything that you’re purchasing, that’s what you have to look at. And diesel prices are through the roof. But when you’re looking at oil now at 90, this WTI, you know, again, no solution to the straight at all.

Frank Curzio 45:23

But one of the big news stories that came out, and I don’t know if you saw this, Daniel, is United States of Russia and oil group in Venezuela. We had the the Chevron chairman come on. I’ll talk about that in a minute. Is saying it will more than double American oil reserves, increase oil supply, and lower gas prices. And the deal is said to, quote, secure majority control of more than 65 billion barrels worth of oil reserves in Venezuela or 20% of the country’s total. Do you know how many did you do the math? Like, we go around billions and trillions. If we’re looking at 65 billion and we take a $90 stock, a $90 price right here, we’re looking at at 5.8, 5.9 trillion if I’m doing the math right. 5.9 trillion. 5.9 trillion. 65 billion barrels of oil is close to 6 trillion. Okay. When we look at 6 trillion, I know we’re throwing around trillions in AI and trillions in debt and that’s our interest expense on a 40 trillion. We throw around trillions all the time. I’m going to put this in perspective.

Frank Curzio 46:20

If this is right and it’s $6 trillion worth, right? And and this is, you know, again, Risha and oil agreement with Venezuela, right? It’s more than double our American oil reserves. I don’t know how we did it or whatever, but that’s enough to pay off our state debt of 1.1 trillion, 1 trillion defense budget, 1.6 trillion social security problem, and 1.9 trillion student loan debt, which, by the way, I couldn’t believe it was 1.9 trillion when I looked that up because it felt like it just surpassed a trillion not long ago. That’s our student loan debt. All those problems, right? If you look at now, that money’s not going to be taken right away and it takes a long time to get that money. But I’m just talking about like putting in perspective how much that is is absolutely insane. Now, how do we make money off of that? Because we don’t know how this is going to be structured, but the value of this that we know is absolutely insane. If Trump if Trump comes through and by the way, this is going to be fair with you.

Frank Curzio 47:14

Trump who said that the Iran war will be ended in a week and as soon as I’m elected, Russian Ukraine war goes away on day one. That’s what he said. So he’s followed through on a lot of stuff, but this has a lot of stuff that he hasn’t followed through on. So, you know, but 65 billion barrels of oil getting that is I don’t think people actually put any numbers behind of how big that that of a deal that is. Now, you may hate Trump and say, “F you. I hate it. Frank, don’t even talk about this. I can’t stand Trump.” Oh my god. You’re going to go into like going to a corner and shake yourself. You know, Trump derangement syndrome. I get it. And others, you love Trump and and are pissed off that I just said, “Hey, Russia or Ukraine war is going to, you know, again, politics. Forget about the politics. I don’t give a shit about your politics. I give a shit about you making money. That’s why you listen to this podcast. If you want to make money and you’re looking at this, you look at US production at all-time highs.

Frank Curzio 48:02

Refiners setting records for production. They’ve been absolutely on fire. The Chevron CEO got on CNBC today. Great interview. Talk about Venezuela, how, you know, they’re going to triple production in Venezuela. You know what the total cost per barrel to produce in Venezuela is? Now, I’m going to put this I’m going to before I ask you this, Daniel, it used to be $35, $40. Some places used to be at $20 in in the Permian. Now it’s like 60 in Permian because a lot of the oil has been explored. You’re looking at they also had a bunch of idiots running it for a long time. Well, you have lower lower costs that in offshore, believe it or not, because of technology, which is amazing, right? Because I guess maybe you don’t have to pay governments as much as you do in in other places. I don’t know. But offshore is this massive massive opportunity that we’ve been talking about. But when you’re looking at Venezuela, you know what? What the total cost per barrel, you know how much it is? You have an idea?

Daniel Creech 48:54

I don’t.

Frank Curzio 48:55

$20.

Daniel Creech 48:56

Nice.

Frank Curzio 48:57

I mean, I don’t know what the Saudis is. That used to be really, really low. I know what it is now, but, you know, as you explore more, again, it depletes almost immediately, right? So, so, you know, it gets much more expensive. So, easy oil is found and then it gets harder and you got to drill deeper and it got, you know, usually the cheapest is going to be off the start and then it gets more expensive. $20 a barrel, which is incredible. So, how you make money on this, whether it’s Venezuela, whether it’s the US, whether it’s offshore, you have this monster trend that I feel like no one’s talking about, especially within offshore drilling. The US producing at record production. You have the problem with the straight. A lot of countries when it comes to European, everyone’s looking for Europe looking for more oil. How do you make money off of this? It’s it’s a nuts and bolts place. It’s the Halliburtons, which Halliburton to me is unbelievable. I have to look at the financial. I have to look at it’s a $30 billion company.

Frank Curzio 49:43

HAL Halliburton. Baker Hughes is 60 billion. Somber near 52 week high of 60, but it’s a 52 week high. If you look back in 2014, this was a $120 stock. These companies going to be printing money. I mean, we have Technip in our portfolio. I don’t know how much we’re up on that, Joe. We’re up tremendously on Technip. We’ve had it in a portfolio for a few years. Again, nuts and bolt plays. And that’s also offshore play. These nuts and bolt plays. I I mean, how aren’t you going to see business go through the roof? Because when CEO Chevron quoting him on TV today, growing production takes time and also through your supply chains. It takes time to build this stuff. So, you these are the guys that are first that get the calls that are saying, “Hey, from the majors and everybody else, we’re going to use you.” Whether it’s Transocean, Transocean has a lot of debt. I think, you know, we we nailed that one at the beginning. Then we it came down a lot. We should have sold a lot earlier. But if you’re looking at offshore drillers, you’re looking at at, you know, certain nuts and bolt plays in the oil industry.

Frank Curzio 50:38

Look, oil, we’re not going to solve Iran. Oil prices are going to be above 75 for a very, very, very long time. We’re at 90 now for a very long time. There’s no solution to this. And if you believe that, and now you’re seeing this massive trend, offshore drilling, special off the shore of Western Africa, you know, for me, oil is just you you want to get a play if you miss the refiners, you miss some of these other stocks. Right now, it’s a nuts and bolt plays that and these suppliers to to these larger larger players and and you know, some of the biggest companies in the world. That’s where the money is going to be made. These guys should be printing money. They should have backlogs of business for five years. Four, five years. I mean, these guys are going to be printing money for a very long time. This reminds me of AI. This isn’t going away. Even if we open up the straight, oil prices come down. Offshore is still massive. We still have record production in the US. We’re still going to continue.

Frank Curzio 51:24

People worry about the supply. But regardless, when we see things in motion in Venezuela and offshore, it means that these supply the supply chain guys, the guys in nuts and bolts, they’re going to get the contracts. They’re going to get these long-term contracts and they’re going to be printing money like crazy. And you have a nice runway right now of a few years where I think you can make a lot of money in these stocks.

Daniel Creech 51:44

Yeah, absolutely. And shame on me for talking and not taking action on the refiners. That is going to that story is not going to go away anytime soon. The timeline is impressive on the it’ll be impressive to watch. Excuse me. I I would not bet against capitalism and engineering. If if governments stay out of the way, I think that whatever projections they’re making could be pulled forward significantly in Venezuela. However, this podcast, Frank, we’re doing a lot of signaling here from the Treasury, from the Fed, and from oil markets because unfortunately, this is not going to do much of anything other than signal for lower prices in the future and a new partner in the future and all that. That’s not going to help voters in the midterm election. That’s not going to help you and I as consumers anytime soon at the pump. However, this is a long-term play and I I like what you said. I mean, I I’m I’m I’m with you on the picks and shovels. I just am still pissed off that the refineries aren’t in the portfolio.

Frank Curzio 52:38

Yeah. So, all right. We’re running we’re running out of time here. Just wanted to give you a couple of quick things. I like sharing notes that I see because Daniel and I look at the markets all the time. I don’t know if you have anything to share, Daniel. Okay. This isn’t like script or anything, but just a couple things I like I’m looking through the markets, looking at what we want to talk about. I’ll write a couple bullets and this way we share it with everybody. I talked to you about Snowflake, Avago reporting. Snowflake, everyone’s betting against it. I think Snowflake goes low. I think Avago goes higher after the bell. Don’t make big bets on it. Those are guesses basically, but based on my experience, that’s how I feel. Vistra, VST. Joe, if you want to pull that one up. Electric utility company down from 220 to to 140ish. Just saw right now over the Y. Present CEO just bought close to a million dollars worth of shares. That that’s a huge endorsement. So, a million dollars worth of shares.

Frank Curzio 53:29

And look, this is CEO. If I had a guess, if I look, he’s going to own a lot. That that’s a very big purchase for CEO. Whenever you’re looking at at at insider buys, you don’t want to see like a 10% owner. That’s a big fund or whatever. When you see the CEO, right? You see the CEO, you see management team, when you’re seeing them increase, you know, several hundred thousand of dollars, like a million dollar purchase, that’s a very big purchase. And what I like about this is I looked if if you look and you know, I have the chart, you’re not going to be able to to see it up there, but if you look at utilities and so try so this is sector exposure per per sector for hedge funds, right? So so it’s just as percentage. So hedge funds will go out and as people that track this stuff, they’ll track it and say, “Okay, what is their exposure to each sector?” And when you look at a chart like this, you know, you have communication services, you know, 20%, you know, you have energy is 48%. Now it’s 100% exposure.

Frank Curzio 54:23

A lot of these guys have huge exposure. Financials are at 90%. This is based on, you know, the hedge fund exposure per sector. You know what it is for utilities. So, real estate 71%, information technologies 80%. You have energy at 100%, financials 90%. Daniel, take a guess where utility exposure. So, this is how much hedge funds own when it comes to utilities.

Daniel Creech 54:42

30.

Frank Curzio 54:43

2%.

Daniel Creech 54:45

Way to make me look stupid, Frank.

Frank Curzio 54:47

2%. That was the point because it made me look stupid when I looked at it, too, right? So, and that’s the thing you want to look at, right? Because you want to be like like the holy shit moment. So, basically, they have zero exposure utility. So, as a contrarian investor, when you’re looking at this, one, Vistra looks great because you have an insider buy, very little exposure. This guy sees something coming. The insiders are going to know exactly what’s coming. They’re not buying for a gain. They’re not looking for Vistra to go to 170. He thinks it’s going to go back to its highs if he’s buying this money, right? If he’s putting this money into it. That’s what they look at. That’s what they see. They know the track. They see it ahead of time. They know what’s going to come out in the next three, six months and the next year and how they’re going to do. And this guy’s buying, you know, the most important person, the company’s buying Vistra. So, if you’re a contrarian investor looking at this, you should be buying utilities right now because nobody owns them. And when nobody owns them, it can only go higher. And when you see a market like this where we’re pushing 5% rates, utilities historically have been a good safe haven.

Frank Curzio 55:36

I’ll talk about this tomorrow in the live broadcast at 11:00 a.m. Historically, utilities have been a good safe haven when the markets do come down because they pay higher interest rates. And yes, they have debt, but that debt’s a lot easier to figure out and stuff, and they have cash flows to cover. It’s not like they’re taking out meaningful debt where they’re going to grow tremendously. A lot of these guys also have exposure to AI, so and AI deals. But this is a sector that makes sense to me. And I look at Vistra just coming on saying, “Wow, this insider buy and utilities are very underweight where this could get overweight right away if we see a market pullback, which could happen if we see rates go and push past the 5% mark, which I think we’re going to see.” Take Two is another one.

Daniel Creech 56:13

Hold on quickly. Can I say something on this?

Frank Curzio 56:15

Of course. Yeah.

Daniel Creech 56:16

If you would back that chart out to year to date, please, Joe. So, this has been a painful couple of months as it’s just seesawed. We added this to the portfolio last September. Actually, we’re up 25% even after the poll. I would absolutely buy this thing hand over fist. It shows up in 13x. Your boy, David Tepper, added to it. Owns a little over 2 million shares. Peter Thiel owns a couple hundred thousand shares.

Frank Curzio 56:37

Nice.

Daniel Creech 56:38

Now, some hedge funds did trade out, did decrease it and all that kind of stuff. But listen, it’s a midterm election. Power is in the the corner in timeout along with data centers and a lot of stuff where spineless Republicans are joining Democrats and complaining about everything. That’s just going to happen. I I would absolutely be a buyer. The the only thing the reason I think that this insider buy, in addition to what Frank said about a CEO doing it, is because if you look at Finviz and you don’t have to pull it up, Joe, but if you look at Finviz and you pull this stock up and you scroll down, they show you insider buys and sells. Guys, insiders were selling this thing like crazy through the summer and then it stopped in July, about mid-July or mid-June, if memory serves me correct. And then boom, you got this CEO who has bought day over day over day about a million, not a million shares, million bucks. Anyway, sorry, but yeah, if you don’t own this in our portfolio, you should buy it, in my opinion.

Frank Curzio 57:30

Yeah.

Daniel Creech 57:30

Sorry. Take Two, Frank.

Frank Curzio 57:31

Take Two Interactive. They’re going to come out with a new Grand Theft Auto. If you haven’t seen the previews, there’s a lot of leaks and the leaks were shitty and a lot of them are bullshit leaks, which is crazy because now the Netflix actually they came out Netflix and published like I think it’s like a 5 10 minute piece or something. I mean, the graphics are better than if you were watching someone in real life. I mean, it’s absolutely insane. They already I think they generate close to 5 million pre-orders. That was as of, you know, today. This stock is absolutely going to go through the roof. If you put up take two, put up a year chart. Look where it is. I mean, this this is a company that’s trading, you know, closer to its 52 week low than its 52 week high. So, yes, it was down a little bit more, but really if you look the past few months, it was up a lot more. Now it’s down. This is a stock I think is easily going to go over $300 a share 12 months from now and it’s probably going to make their way into their portfolio pretty soon.

Frank Curzio 58:20

I just think they’re going to sell the crap out of this game. And remember, take two, this is a company I recommended in the single digits when I was at Kramer. I worked for Kramer. I love this name. I know very well probably better than anyone on the planet because I’ve been following such a long time. Their previous game, Grand Theft Auto, I think it was 13, 14 years ago, came out. They generate a fortune every single year. The reason why they waited 14 years is because everybody upgrades. They’re not even talking about the live version yet. They’re just talking about the play version where you buy it and, you know, you play the game. But their biggest part is you could do anything in this world. You could buy anything you want. And that’s why their original, well, not the original, the last one, it lasted for 13 years into now where you’re seeing record results where people continue to buy stuff within this game and it’s unbelievable. This is going to come out with AI. They’re going to they’re going to kill it where this part of the game hasn’t even been announced yet.

Frank Curzio 59:07

I think those pre-orders are going to go to 10, 15 million pretty easily. And you’re going to see this thing sell 20, 30, 30 million plus. If it does, this thing’s going well over 300. JPM just came out with a note today on it talking about and saying it’s a good buying opportunity for September. Again, in a week month where you have good certainty, this stock should be up a lot more and it’s pulling back for no no reason really. But once this thing gets released, which is coming pretty soon next couple weeks, it’s going to be very exciting. I really like take two here. Just I like the price of the stock, right? I mean, I always like the company. It’s a great company, but just with the price pulling back here, I think this is a really good buy. So, you know, I just like to talk about things that we see, you know, before we come on air. Those are a couple things. Like I said, Snowflake, the big money’s betting against it. We have take two, I like. And then you have the insider buy of Vistra, which is really cool in portfolio. So, other than that, Daniel, tomorrow live event.

Frank Curzio 59:52

We love doing live 11:00 a.m. on X. I’m going to tell you why the markets I think are going to correct and how to position yourself accordingly. These are some of the names I just talked about now. It’s going to get much more in-depth, all for free, live unfiltered. And be sure to ask questions on X. We have a lot of great ones. You probably have like 20 of them already that are great. 25. But we just had a post that went out. How many how many people what was the viewership on the post when we we announced that we’re going to come out with this event? Joe, you have that? I mean, there’s a lot of people that commented and and it looks like what does that say? 576,000. Holy cow. That’s a lot of people. I don’t know what they’re thinking.

Daniel Creech 01:00:29

Bots, Frank. Bots.

Frank Curzio 01:00:30

You have something better to do. 500. Wow. That’s a lot of people. So, that’s how many people view the post of this going out tomorrow. So, you’re going to get a lot of people, a lot of questions. You know, if you want to ask, just go on X, answer questions tomorrow at 11:00 a.m. on X live event. And I think you should pay attention if you’re in the markets because I do think we’re going to see a correction here. If you know my background, I haven’t called a correction since the the credit crisis. Not since the credit crisis business COVID. And now I think we could pull back and it’s a great opportunity to own stocks on the way down. Certain stocks and sectors are going to do very, very well as insurance go higher. And also at that bottom, you want to be very smart because every correction that we’ve seen dating back for the last 13, 14, 15 years, it’s met with a quick rise and a great opportunity to buy stocks. And that’s what you’re going to see because earnings growth is very, very strong here. But when the worst month that could possibly be for stocks, it’s even worse when you look at the statistics.

Frank Curzio 01:01:18

I’ll go over tomorrow when it comes to midterm elections during September. Throw in higher interest rates. There’s a lot of negatives, much more negative than positives that suggest the market is going to come down. Let’s see what happens. I’ll cover it tomorrow. Hopefully, you join us at 11:00 a.m. on X. With that said, Daniel, questions, comments, they could email you where?

Daniel Creech 01:01:34

daniel@curzioresearch.com.

Frank Curzio 01:01:35

Or email me, frank@curzioresearch.com, and I’ll see you tomorrow. Live event X 11:00 a.m. 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.