Summer is here—which means the kids are home from school all day.
I hope you all have some fun plans to look forward to. Unfortunately, it won’t be a good summer for stocks. In fact, I expect a lot of pain over the next 18 months.
Guys, this might be the most important podcast you listen to all year.
I break down how a few large stocks are propping up the entire market… why we could see a big selloff following the debt ceiling deal… and a major factor that’s about to crush consumer spending.
We’ve dealt with debt ceiling issues before… but this time is different—and for the first time, investors should be worried. There are only two options to deal with our current national debt levels—and I explain why neither is really feasible.
I also share some staggering data about the U.S. national debt… and why consumer debt will wreak havoc on the economy over the next year.
Next, I explain why the market is making a big mistake trusting the Fed… why the Fed’s bailouts in 2008 cursed us… and why they’re not an option this time around.
The bottom line: The economy and the stock market are both in serious trouble. But there are still ways for investors to make solid returns. I highlight the two assets you should have exposure to right now… and an investment strategy designed to profit from the coming turbulence.
To help you survive this dangerous market, I’m working out the details of a limited-time discount on three of our advisories: Crypto Intelligence, Curzio Venture Opportunities, and Moneyflow Trader. I end the show with some hints about what’s coming your way… and the tremendous opportunities these newsletters offer right now.
By the way, if you haven’t yet, be sure to listen to last week’s special interview with Luke Norman, chairman of U.S. Gold (USAU), to get the inside scoop on why gold is poised to enter a new bull market.
- It’s going to be a painful summer for stocks [0:30]
- Why the debt ceiling deal is a lose-lose situation [5:30]
- Why this time is different when it comes to U.S. debt [14:15]
- Don’t trust the Fed [27:45]
- How to profit as the market plunges [40:45]
- Don’t miss last week’s special episode [48:43]
Wall Street Unplugged | 1043
How to survive the painful summer ahead
This transcript was automatically generated.
Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.
Frank Curzio: How’s it going out there? It’s May 31st.
I’m Frank Curzio.
This is the Wall Street Unplugged Premium podcast where I break down the headlines, share my favorite stock ideas with you and tell you what’s really moving these markets.
Hopefully you’re enjoying the start of the summer.
It’s weird since Memorial Day weekend in Jacksonville.
Weather was a little mild, usually in the nineties.
I think it was in the seventies, starting to heat up now.
But my kids finish school so they’re home all day, which could be a little bit of a pain in the ass based on their ages.
Depends, I love my kids at 12 and 15.
My 15 year old is about to get a permit, so she’ll be driving next year, so it’ll be a lot easier right when she’s driving all around.
She knows how to drive already.
I taught her how to drive.
my 12 year old I is awesome, right? She’s like, dad, you know, you go to work again.
Can you stay home? Can you hang out all the time? So, you know, she doesn’t like that perfect age.
She still wants to hang out with dad and stuff and you know, gotta love that age 15 year old though.
My daughter going through the hormonal stage that I hate you and I love you in the same sentence.
Insanely moody, which I ignore, but my wife gets on her a little bit, which usually costs some blowups.
I try to tell her it’s just a phase.
She doesn’t really hate you.
But yeah, you go into freshman year, the insecurities, meeting new friends.
I mean, I remember my freshman year, holy can, I think I had like two or three friends.
Yeah, everything’s just all over the place.
Plus with social media these days, just looking at everyone who’s hanging out, your friends, you think everybody’s perfect.
You’re worried about your body.
It’s just the insecurities is crazy.
It’s just such a, such tough age.
So, you know, I try to tell my wife just to, to relax a little bit and, and have fun.
She’s a really good kid though.
My 15 year old, they’re awesome, both of them.
But yeah, they’re home all the time.
So, which puts a little extra pressure on mom to you know, show ’em a good time and drive ’em to their friend’s house and stuff like that.
But, anyway, I hope all you enjoying the summer with your families, right? Have vacation plan.
Hopefully you have time to relax, which is always tough these days.
Everybody seems really, really busy.
Uh, unfortunately I don’t think it’s gonna be a good summer or a good year for stocks.
In fact, over the next 12 to 18 months, we’re likely to see a lot of pain.
Uh, and when I look at the details I’m about to share, none of it is good.
I mean, I’m trying to say that, you know, there’s a little bit of money on the sidelines for, for managers that they could put to work.
You know, very few positives here.
And, and, and I want you to hear me out on this because this podcast would be the most important one you listen to all year.
And if we look back six months, I thought it would take place six months ago.
And as that goes up, what? we’ve seen so many sectors get nailed, right? We’ve seen small caps get destroyed.
Aggressive sectors where turnover of energy, green energy stocks backs.
You look at EVs outside of Tesla, a lot of banks got hurt recently through the bank crisis.
But what’s different now compared to six months ago, cause we’re the NASDAQ and tech stocks mostly surging.
But this is led by five companies, right? You have Nvidia, Microsoft, Amazon, Google, apple, which now represent over 25 of the 5% of the overall market.
If you take the top 10 stocks, they represent 33% of the entire market.
That’s the highest that we’ve ever seen.
Even Digg back to the tech bubble.
So if you take those 10 stocks that represent that they’re accounting for all the gains in the S&P 500 this year.
So if you don’t own those stocks, chances are you’re not doing that good.
But looking back, anticipating like these are gonna be the areas that are like treasuries or a safe haven for money managers where they can get paid for investing in equities and investing that capital.
And these companies, you know, despite how good you think they’re doing, their earnings are still down on average on 10% year over year.
But their stocks are up tremendously.
How often do you see that? How often do you see the NASDAQ go up 25% when earnings are down the NASDAQ at 52 week high, some people say it’s a positive, it’s a new bull market.
But you really have to look at the breadth, which is horrible.
And it’s actually its widest gap in over two years.
When it comes to new lows, hitting new highs, that’s considered a very bearish sediment indicator, especially from technicals.
When you see something hit a new high or market hit a new high, you would think most stocks are hitting new highs.
Most stocks are hitting lows, not highs.
Suggest just a few select companies are healthy and most are not.
And we’re seeing that through a lot of reports.
So companies are beating, it’s a lot of buybacks.
They’re not really raising their estimates too much.
You’re seeing, you know, again with the big tech companies with huge balance sheets and 70 billion, A lot of money going to AI specifically, which is great for Nvidia.
But if you look at all the CapEx spending, which is hundreds of billions of dollars in this sector, what is it leading to? It’s leading to almost no growth in earnings.
At least they have cash positions.
Cuz you could earn four and a half, company.
So they’re in pretty good positions.
We’ll look at a positive way.
You can say the debt ceiling deal got done.
It’s awesome debt.
Okay, we all knew it was gonna be a deal, right? We’re not gonna shut down the government.
No surprise there.
And now let’s break it down.
Assuming that doesn’t, you know, again, they’re voting on it.
You’re gonna see the far right and the far left.
Argue the middle I think are in agreement.
Uh, but assuming they get the necessary votes, let’s cover a couple things here because people think this is a a, a win-lose situation and it’s, it’s not.
It’s basically a lose-lose situation.
First we’re gonna extend the debt limit and it cuts almost nothing.
They’re gonna tell you they’re cutting 10 to 20 billion are gonna rename this thing.
Whatever they renamed, it was kind of funny, I saw it.
Uh, what they always do about politicians, they just look at us like we’re a******s.
Uh, but we’re gonna see our debt inflate from 32 trillion, which is closing in right now to over 35 trillion in 2025.
Okay? So it’s gonna go higher.
Now here’s some scary details since again, most believe this is great news since we’ve avoided a government shutdown.
Once this is approved, the Treasury is gonna need to scramble to replenish its cash buffer, which is empty, right? It’s empty.
That’s to pay its obligations, right? Chan Hill said we’re broke, we’re broke on the first of this, whatever they pushed out to maybe another week or whatever.
So this is gonna happen through treasury bill sales, which are estimated to be well over a 1 trillion, right outta the gate.
They’re gonna drain liquidity from the banking sector.
So in other words, in short, for the treasury to build up cash, you see a massive reduction in banking reserves which will reduce liquidity, which results in a further tightening of credit.
That’s a pretty big deal considering Bank America came out and said when the treasury does this, this are 1 trillion in bonds, it’s considered that this short-term funding and this race is similar to having a quarter point interest rate hike.
I love putting it in that perspective.
I hate to throw numbers at you without putting perspective.
That’s what this has seen right out right outta the gate.
And people aren’t talking about that.
Oh we we’re fine, we’re just gonna raise it.
Well, well to personally taking liquidity out of the market, which the Fed ‘s trying to do anyway, that’s less money to go to other things.
Also including a debt deal, which is a major headwind.
The suspension of payments under 1.
1 trillion student loans, that’s over.
So you have these students who are gonna have to start paying this now and I think it’s three to four months, like starting it in in September I believe.
Now why is that such a big deal? Well, during COVID, right? Announced Biden administration, especially student loan payments and this provided a massive boost to the economy.
So if you’re looking from March 20th to December 22nd to December, 2022, it boosted personal income by 2.
This is according to a consulting firm that respect freight waves.
The Fed estimates that the average student loan payment is close to $400 a month.
Now that’s going to kick in.
Again, this is for 25 million Americans that have deferred payments for student debt.
These are people in the 18 to 44 year old demographic, one of the most important demographic groups that drive consumer spending.
Now they’re gonna have to start paying these bills again, which is a lot of money.
Again, something that’s gonna take money out of the system, less liquidity.
People aren’t talking about that.
So while we got this deal done, you have to be careful.
I mean it’s kind of like a lose losee.
You don’t want the government to shut down, but just cause we got this done doesn’t mean okay we’re fine.
The government’s gonna spend money, everything’s great.
I’m also curious to see who buys this debt.
And if you look at the last three years you had what the Fed the banks, you know, absorbing this debt, you know, fell on them.
But if you look at recently raising and rates due to quantity of tightening and things like that, they kind of were drawn from that world a little bit.
And then when you look at foreign investors coming in, they’ve been net purchased of US treasuries, right? Or have not been net purchased of US treasuries for a while now.
I mean if you look at the charts and how much that has gone down considerably from like 40% to like 22, 20 3% and have all the charts.
Again, lots of data on this and research and what are they buying? They’re buying gold, which we’ll get to in a minute.
Massive gold buying again last month.
I mean we’re talking about half century high and gold purchases from central banks outside the US So it’s gonna be interesting to see how this goes once it gets approved and signed.
And there’s some really good economists that are talking in numbers.
Even Goldman talked about these numbers Two, the two things I talked about.
And it’s gonna result in a lot of money coming outta the system, less spending on discretionary things.
And are we factoring that in? I don’t know.
So don’t be surprised if we sell off right off the bat as we do get the decision and all the votes come in.
I wouldn’t be surprised.
You’re kind of seeing that now.
We kind of peaked that day and now it’s selling off a little bit.
If you look at earnings, which growing up 30 years go back for a hundred years, that’s the main driver of stock prices, right? You know, and growth.
You wanna see earnings and growth like growth works like SPACs, but you have to have earnings behind it or this is what happens to SPACs.
You don’t have the earnings growth behind it with these crazy valuations, right? So usually you have to have those earnings.
Well if you look at earnings this core, they came a little bit better than expected.
And that’s thanks to a few, you know, companies in technology, they beat the estimates that were significantly lowered and also announced major buybacks.
But they’re still expected to decline sharply earnings over the next two quarters year over year.
Yet if you’re looking at the NASDAQ and how much sub, again, when you look at tech earnings, they beat across the board and viya rays incredibly, I don’t know if they saw the earnings number, I just saw obviously the revenue go from 11 to 14 billion.
But even their projections are showing that earnings are down year over year by roughly 10%.
Maybe it it’s 8% after earnings, but it was like it’s 10% as facts that I looked about four days ago for overall tech sector.
So you’ve see the NASDAQ rise tremendously in the face of slower earnings, which I mentioned earlier.
And if you look at the next two quarters, what are we gonna see? Earnings expected to decline year over year.
The next two quarters while we’re trading well above the 10 year average on valuation of 18 times forward earnings for the S&P 500 and even much higher for tech companies, I think is 33 times.
So over 30 times earnings for tech companies.
And these valuations are insane because we’re taking a 10 year average, which included what free money by the government and super low interest rates, which we don’t have anymore.
So we look forward and people say, well the market may crash.
It’s gonna be hard for the overall market to crash when you have, you know, money into.
It doesn’t mean the, it doesn’t mean your portfolio can’t go down 20, but you’re gonna have to own some of them at at at skyhigh valuations.
So we could see tech hold up a little bit and they’re just so big.
Great balance sheets get earning 4% of their cash that’s they could earn on the cash and their balance sheets, which is better than get that CapEx spending hundreds of billions of dollars in CapEx spending going in, right? So, so you, you know, to grow your company and you’re not seeing that growth in earnings, why don’t you just hold the cash some of these companies are buying back their stock.
Do you really want them to buy back? Do you want Apple and Google to buy back their stock right now? Maybe Google, it’s not too expensive, but Apple at like 27, 28 times earning.
Do you wanna see them buy back at this level? I mean you’re seeing slower growth across the board in so many different sectors.
For Apple it wasn’t the best quarter.
Now you’re seeing the big thing to flip phones.
I dunno if you saw this major articles out how, how millennials are going to flip phones.
They’re not buying the more expensive phones.
Now there’s a reason why Apple never gave away their phones.
I just switched to at and t.
They, they gave you away the free 14.
I know the fifteens coming out whenever September, but they never did that before.
Never gave away.
If you switch, you get a free phone, automatic upgrade.
They never did that.
They didn’t have to do that.
Okay, that’s a bread and butter.
You the one that buying back their stock here? No, but they have a lot of cash and could earn pretty good money on that cash.
So it may seem ’em hold up a little bit, but when you look at the market as a whole, especially if we, if we look at a debt and we look at this time around, okay, I remember looking and watching videos from Doug Casey in, in the eighties.
Again, I was born in in the early seventies.
Uh, you know, even videos, you know, just everybody was always worried about debt, debt, debt, right? And, and I always said this, and especially for the last 10 years, you have nothing to worry about debt.
That’s not an issue unless you stop paying it, then it becomes an issue.
Okay? And we never had that problem because we had 0% interest rates and money was free.
So we never had that problem.
Even no debt levels went up and up and up.
But here’s why it’s different this time around the US and globally.
I know you hear that and you’re like, well, people say it’s different 10 years ago, 20 years ago.
Just hear the numbers, okay? And, and, and please pay attention cuz I am gonna throw some numbers at you, but I’m gonna try to simplify it because this is very important for you to understand.
So when you have global debt, you can cure it in two ways.
You can cut spending, which our idiot politicians will never, ever do, right? We know that there’s no accountability, they’re gonna spend as much as they can or you grow your way out of it.
Some more revenue from taxes, capital gains or whatever.
So forget about, we just saw, you know, we just raised a debt ceiling, right? We’re not cutting spending at all.
So how do we grow our way out of it? Well, let’s see if we could do that.
So we look at the conference board, some I respect very much.
And, and these estimates are kind of similar, but world growth, right? GDP goes expected to slow 2.
3% this year.
That forecast rise 2.
5% in 2024 for developed nations.
That’s expected to slow 1.
Much, much worse for developed nations.
That’s how slow it’s again, world growth expected to grow just 2.
3% this year and 2.
5% next year.
Let’s put this in perspective.
If we look since a credit crisis of 2010, world GDP has grown around 3.
3% on average annually.
So we are growing 3.
3% on average annually, zero rates.
And during this time, global debt surged from 210 trillion to 305 trillion.
Again, this is what, 3.
3% growth annually.
Global debt was just 220 just, but it was 226 trillion in January, 2021.
So in January, 2021, think about that timeframe, what happened? You’re like, well, COVID, COVID, we started reopening.
A lot of places started reopening in 2021.
Almost every single asset class hit an all-time high in January, 2021.
This includes real estate stocks, collectibles, autos, almost everything across the board.
Unemployment was strong, everything was reopening.
We would just like sky high and our debt still increased from 226 trillion in January, 2021 to to 305 trillion, 75 trillion higher global debt.
Even though we reopened, this is when the economy was strong and good in 2021, great year, rebounded all this money into the system.
So how could we grow our way out of this debt with world GDP expected to grow And you’re looking at the numbers we had close to a hundred trillion in debt in world GDP spend to gorgeous, 2.
3% and 2.
And what a country is doing right now, they’re still announcing stimulus plan, including us again, just increase our debt limit.
We’re just gonna go up at least 3 trillion in the next co, next three years at least.
So I ask you this question, if you’re bullish, where’s the growth gonna come from? Where are we gonna get growth from? Most European nations are in terrible shape.
Some are slowing and, and still have inflation at 30 year highs like the uk.
You see the core inflation for the UK last month said 10%.
Some recession like Germany, Italy, France have barely growing, expected to barely grow.
Next year they’ll probably be in a recession pretty soon.
Then we go to China.
Remember the China’s story over the past couple months, they’re reopening, everything’s great and China and the bricks, nations and everything.
China is now having COVID breakouts again, almost every metric even from today in Pima.
But you look at manufacturing, p contracted worse than expected in April.
Especially when you strip out the steel pmi, which is the ultimate gauge of manufacturing and growth in China, right? Steel that’s slipped to 35, that’s the lowest number.
Forget about what it, you know, 35 is the lowest number since June, 2022.
How in the hell is that possible? Because in June, 2022, again last year China was mostly closed.
This number is worse than that.
That’s how bad it is in China right now.
Home sales are slowing, real estate develops are in horrible, horrible, horrible condition.
Look at the C commodities index.
Copper iron ore coming down as well.
Clear indication that China is slowing, it’s starting to crash.
Not just slow, but to crash outside of Macau, which gambling people are gonna gamble no matter what.
I mean, if you’re looking at the data that’s coming out here, it’s pretty scary.
And you’re seeing that again from the commodities index just starting to crash.
Let’s talk about non-manufacturing, right? Fell to 54 from 56 last month.
All you need to know is it’s declining.
How is it declining with China opening? And this is while construction also fell.
So when you look at China, these figures are supposed to be getting better and better and better now falling, which means what? China is going to have to provide more stimulus to help stimulate their economy and growth.
So if you look at GDP estimateS&People say, well, GDP is growing it, you expect to grow 5%.
That’s what the estimates are about.
2% for 2023.
And they’ve come down recently outside of 2020.
Let’s put this in perspective cuz 5% seems like a lot, but this is China.
Okay? So if you look outside of 2020, which is COVID, the last time China grew its economy by less than 5% was over 30 years ago.
In 1990, if you going under 6%, that’s a recession for, for China, probably under six and a half percent’s a recession.
So China’s in recession right now.
So growth gonna come from China.
That’s what we expected.
Oh, they’re reopening.
Here we come.
No, are we gonna see from Brazil who’s seeing mass deflation, unemployment at eight point a half percent while inflation’s over 7%? And deflation, I mean you’re seeing deflation inflation stack flight.
Russia is a non-factor, right? Right now India is in pretty good shape, very high in India, is just not big enough to move the needle for the rest of the world.
It’s like China.
So again, I mean, I’m asking where’s the growth gonna come from? I look at the research and just really digging in and going into the numbers.
Yeah, I don’t wanna boil this s**t outta you with numbers, but it’s important that you understand this.
If you listen to me for the past 20 years, 30 years, I’m an, I’m an optimist.
I, I’m mostly bullish on stocks.
I always find opportunities for stocks.
This is going to end a disaster.
And it’s not gonna be pretty, I mean most of these countries have very high inflation rates are sitting at record debt, G D P ratios.
So how much could the government stimulate these economies without causing inflation to run even higher? And that’s these countries, well let’s get back to the US at 32 trillion in debt.
Our interest payments alone are over 1 trillion, around 1 trillion more than what we spend on defense spending.
Also equal to what we pay a little bit lower than social security.
A better way to understand this is the overall interest payments.
Now that rates as rose on this debt.
So the overall interest payments on this debt alone accounts for 3% of G D P, which is fascinating, right? Tess forecasting a US recession coming this year or two straight quarter of negative GDP P growth.
But our debt payments account for 3% of G ju just the interest on our debt.
Just the interest.
That’s how out of hand this is.
Now when you look at reports and you’re seeing what’s coming out and, and you know, you again, e even the ones that Invidia just, I mean a one off, incredible, incredible quarter, but even some of the technology companies that reported decent earnings, you know, Meta is starting to come back again.
You know, they’re starting to see sales, they, they addressed a lot of their problems.
But if you’re looking just at the reports of what these companies are saying, I, I mean no one’s really like significantly raising their estimates.
I mean, you gotta be crazy raising your estimates right now, but you saw the report from Footlocker, advanced Auto Parts today lowered their, you know, they cut the dividend and, and what was it, $10 a share to expect for the next year for this year, whatever it was.
And they lowered to $6 and see margin compression.
Most major retailers, if you listen to the, they’re one and consumers are cutting back people to raise prices and, and do okay.
And you know, especially, you know, the Walmarts and McDonald’s were the lowest prices in their sectors.
It’s a lot easier for them to raise price a little bit and still be cheaper than everybody else.
But they’re warning loan loss reserves are going up at every single bank.
I mean that not as many people are paying their bills.
Holly Davis cannot hire enough people to repossess their motorcycles as people stop making payments.
Credit card debt has now surged to a record over 1 trillion.
how many people have credit card debt? 25% interest? Are you outta your mind? If you look at the banks, they’re supposed to be a driver of this market, right? Higher interest is supposed to be better for them.
But now af they’re gonna come out new regulation.
Once that’s passed, it’s gonna result in tighter credit standards.
And you’re gonna see earnings come down because of that.
That’s why earnings are being lowed across the border.
Many of these banks outside of JPMorgan who just got, you know, a, a bank for free, which is awesome, you gotta love that.
Have you guys seen interest rates? Do you see what’s happening? I think interest rates are coming down.
It’s a better market.
Mortgage rates for 30 year just topped 8% this week.
If you look at add to two years surging, all industry surging.
But specifically if you look at mortgage housing’s one of the biggest drivers of economic growth.
When you buy a house, think about everything that you buy inside of it.
Believe me, I know this firsthand with all the money I’m spending right now, which is crazy on new things, built a new house, it’s just all the money that pours in all the appliances, everything, everything that you’re doing.
Major, major drive of economic growth.
There are going to be much, much fewer people buying at this rate compared to when it was 3%, which is what, The average home price was around 425,000 in America.
So if you put 20% down and you take out a 3% 30 year mortgage, the payment is $1,400 a month.
If you increase to 8%, it’s over $2,500 a month.
$1,100 more, How much money that is when 60% of people living from paycheck to pay, you know how much $13,000 a year is to so many people going homes, that’s what you’re gonna have to pay.
Which does not include property taxes which are being raised every year.
Homeowners insurance, which are being every year raised every year.
H HOA fees if you wanna get someplace in nice areas or whatever.
But rates are surging right now.
Remember in, you know, we’ll crash the market in 2022, especially technology companies.
Well, higher rates are going to hurt them the most.
Well, we’re at the highest levels here guys.
I mean they would considered bad for big tech and growth stocks.
Are they not no longer, I mean these guys spend so much money, they can cut costs.
They’re gonna be buying back their stock.
You’re gonna see earnings, you know, do okay for them, probably hold up better.
But there’s probably still gonna be down overall outside of the invidia, which everyone’s buying the CH 70% margins.
They’re not gonna maintain that.
If you have 15% margins, people are gonna come after you.
Plus you have all these big tech companies.
I think you have Microsoft and you have Google launching their own chip divisions.
I mean it’s 70% margins and the amount of money that you’re, you’re paying in billions is to AI and, and programs.
And I mean this is a hardware company basically, right? With software programs inside of it.
But at 70% margins, everybody’s gonna be coming after them that you have to maintain those.
But anyway, they should do pretty good, right? They’re, they’re one company that’s gonna be doing good earnings, but again, it’s like a one off.
But now I guess higher rates aren’t considered bad for these stocks.
I mean they’re considered bad for many of the growth stocks you’ve seen names across the board get annihilated outside of like the top 10 and pretty much maybe the large caps in most of the sectors.
Some of the like top three large caps where you see more money go into the safer areas right now.
Not a good sign, but I guess higher rates are good.
I don’t know, maybe that changed.
Now remember earlier this month the Fed raise rates and they had to pause.
Everyone’s gonna gonna pause.
I mean shortly after the FMC futures priced at a 91% chance of a pause at this June meeting.
Know what it is right now.
This is right now there’s a 70% chance they’re get a hike when they meet in two weeks.
How quickly that changed? Why? Because we’re seeing inflation run hot.
Even though we’ve seen deflationary indicators all over the place.
Now, why is it such a discrepancy? Why aren’t we seeing it all over the place? Because we injected 13 trillion into his system.
Four and a half trillion after the markets are recognized in 2021.
And now it’s almost impossible to get all this money outta the system.
So it’s inflating some areas while crushing other areas while we have tighter conditions.
So it’s all over the place making it extremely difficult to predict where the economy is headed.
If you’re looking at unemployment, if you’re looking at wage growth, you’re like wow, the economy’s booming.
If you’re looking at a lot of other indicators, it’s not.
What I do know is inflation at the core inflation is well over 5%.
It’s not even closer to 2% target.
But this is something that the market is not seeing, in my opinion.
This is the big disconnect because we’ve always had the Fed to bail us out time and time again, right? If you had the credit crisis, they went all in.
And we are gonna look back 30 years from now and highlight the credit crisis as one of the biggest things that hurt the United States of America in terms of not losing our reserve currency status.
But it’s gonna go down below, well below 50%, probably the 40%.
Uh, and and other alternatives because the amount of spending that we did, the worst thing that happened during the credit crisis guys, is that we needed to bail out the banks.
Otherwise nobody would have money.
Unemploy went to 40%, 50%.
Your money’s in the banks.
Everybody has money in the banks and they had no money, right? So you had a bail amount, whether you like it or not, I hated it.
But you had a bail amount.
I understand what the government did, but the fact that they made money on everything that they bailed out meant that it was gonna give ’em a pass to spend as much as they can whenever they want for the next crisis, which happened to be COVID.
And to put that in perspective, they spent what, to save the financial markets.
And if you’re looking at the US alone, it’s what 12 trillion that we spent on COVID alone just inflate the markets when we shut everything down and we didn’t take the money outta the market.
When we reopened and we reopened pretty quickly within four to six months, pretty much everything started to open again.
One more and more.
But it gave the feather, right? Say Hey, you know what? And our politicians just spend as much money as you can.
Nobody’s keeping balances.
Whatever throw are trillions in climate change.
There are trillions in everything, anything that you wanna do.
And that’s fine.
And there’s consequences to doing this.
As someone who never really cared about the debt because were always able to pay it off.
It’s not gonna be that easy going forward.
So now why is it different this, this time? Cuz the Fed ‘s not gonna be there to bail us out again.
They can’t because they have inflation that’s very, very high.
So when you have core inflation, well over 5%, they still have to bring that down because that gives them power.
They don’t care about force and recession.
Yes, things are gonna break.
They have no power unless they bring it down.
You can say, well they do have power, they could increase, you know, whatever, you know, and, and, but it’s gonna result in much, much higher inflation and you can’t get, as we saw, and they made the biggest mistake in the last 30, transitory.
So much so that you’ll buy mortgage backed securities right into it saying Oh, we’re gonna be fine, we’re fine, we’re fine.
And stimulating the market.
And now you raise rates by the fastest pace in the Fed era by 1900% and you’re gonna raise again in two weeks, most likely.
Again, that creates tighter conditions.
But with this debt and would inflation running, why? It limits the Fed ability to stimulate the economy if things get worse.
And they were always there to stimulate the economy.
They’re not anymore.
So when I look at technicals fundamentals, earnings, economic growth, it’s hard to find catalysts that are gonna drive equities higher.
They could go higher, they can Google higher for another year.
We saw that 1999 when equities doubled when they were overvalued, we go from NASDAQ 2,500 to to over 5,000.
I think it might have hit, hit 6,000 and it crashed to below a thousand, right? And the 1200, whatever it was in 2020, in 2022 just went down for three straight years.
So it was overvalued for most of 1999.
But you could see Golo high.
But right now with everything going, it seems like we’re at that point.
I mean how much more money could go into these 10 stocks? I said I covered 13Fs for, for decades.
I’ve never seen this much money from money managers go into those big stocks.
I mean they’re over owned.
How much more money can go into them? I don’t know.
But you’re seeing a decline in a lot of stocks.
Why are you seeing so many hit 52 week lows and the breath is so terrible.
But it’s hard to find a callous, not to mention, especially when you can make wow 400% risk free and go to sleep at night.
Four and half percent and savings accounts, many savings accounts include apples new savings account, four and half percent you can make, go to sleep and wake up.
You know, hey I’m, I’m okay at four and half percent.
And say you’re gonna be earn buying tech companies trading at 30 times earnings that aren’t growing earnings.
Right? mean 4.
Sounds pretty cool right? Now.
With that said, you need to start positioning yourself to benefit.
And how could you do that? Buy gold and buy Bitcoin.
Central banks are loading up on gold.
Biggest buying in a half century.
It’s happened all last year.
People thought it was gonna tail off.
It’s happening even more.
Bitcoin Ethereum are gonna be extremely powerful alternatives, essential banks printing an limited amount of debt, which again, China just said, we’re gonna print more money.
We just raised a debt ceiling.
Everybody’s gonna be printing money, printing money, printing money until you can’t.
Cuz these debt levels are getting outta control and their printing money while most of their economies are still experiencing inflation.
Good luck with that.
Now this may sound crazy.
Start looking at small caps, tell you the market’s gonna come down the worst.
Listen, the NASDAQ 100 compared to the Russell 2000, okay? When you take these two and compare the performance of them, they just retested its peak of a tech bubble in 2000.
It’s a wise discrepancy that we’ve ever seen between these two asset classes and user results in small caps significantly outperforming.
In short, if you look at it, it’s a price people are paying, which is 30 times rejected growth for large cap tech with their expectations that fundamentals are gonna improve insig just significantly from here, which is not really gonna happen.
I don’t see it.
But when you look at small caps, expectations are zero when many of these names are already down, 70, Now I say this a lot, but I’ve been doing this for three decades and there are times that go all in.
There’s times will be the sidelines for me.
My biggest wins and biggest gains, they don’t come from buying stocks in bull markets.
You get nice percentages that way.
It comes from when you’re seeing massive disconnects, which only happen when you have markets like this that are crazy when no one knows what’s going on.
And we really did a great job during COVID.
We sold out of many of our stocks and two months later, three months later, we really got in and had exceptional gains.
And we even provided some research reports saying, these are the companies once this thing bounces back.
I didn’t know it bounced back that quick.
I didn’t think the government was gonna throw trillions and trillions of trillions into the economy right away.
Nobody saw that coming.
But you know, we timed it pretty well and did well with a lot of stocks.
But the biggest gains come when you see those disconnects.
Even the biggest trays in the world.
If you look at admin, if you look at at sorrows, you look at at, at, you know, just managers, top managers in the world, they’ll always tell it it.
It’s when you have these disconnects is when they make the most money.
The disconnect at small caps, it, it, it’s, I don’t think I’ve ever seen it this big compared to the rest of the market with biotech names are trading below net cash SPACs are down 90% plus, which came out at s****y valuations and crushed everyone while insiders got out.
Biggest scam in the world.
But SPACs, many of these c there’s still good companies, they’re growing earnings and sales much, much faster than the overall market.
They have no debt and they’re sitting on massive cash hoards.
They’re in great position.
People are gonna hate them cause a lot we’re in the Coinbase is at 400 space stocks, they’re at 90% higher.
They’re going outta business now.
But I’m seeing tons of ideas in this space which have much of the risk I mentioned during the podcast are priced in because they’re down so much and it might not be three months, six months, but the next 12 months and going forward holding these things for next three, four years.
And we, you’re gonna see exceptional gains in many of these names cause they’re down so much plus they see the risk coming.
They’re already cut costs, they’re just down tremendously compared to a lot of large caps which get mentioned on c, bbc, on TV all day.
Lastly, learn how to buy puts.
We talked about this from Moneyflow Trader newsletter.
And look, the performance has sucked over the past six months.
Cause the, you know, for the Nasdaq at least the NASDAQ up 20% plus.
But this is not a newsletter just best against tech companies.
There’s many names and sectors that are starting to crash now and starting to crash by.
You see names fall 20, And this newsletter can make you an absolute fortune if the market or a stock recommendation falls just 15, 20%.
If you think it’s gonna happen over a 12 month period, pretty much in the early stages of that 12 month period, maybe the first four months since Jenny Turino runs his product, she’s an expert.
She’s buying long date puts.
So as news is about putting three to 5% of your portfolio into buy puts, where the most you can lose the money you put in.
The many times, even if those bearish bets don’t work, you lose 3% of your portfolio, But the chance of the rest of your portfolio is probably gonna make up the difference and do pretty well, which has happened in our newsletters where we have a put or two, you know, we lost our money and our put but you know, performance been keeping up with the overall markets.
But when it does work, guys, this isn’t like insurance.
This isn’t like hedging, right? And protecting yourself, I mean it’s protecting yourself.
But Jenny has a lot of a 500% gains on one position in two months.
And this is during COVID, a bunch of 200% gains in a few months.
You know, when the market has come down, even in 2022, lots of triple dig winners.
When you see the portfolio, you’ll see losses cuz right away it’s, you know, it’s time value and losses and stuff like that.
But if you hit a banking stock that collapses and, and collapses like some of the ones that we saw, and the 5% of your portfolio could be worth more than the other 95%.
That’s why it’s worth it.
And with this many risks in the marketplace, you need this.
Okay? I’m not a guy shouting from the rooftops going, holy s**t, get the Illinois, I gotta crash.
I didn’t, I didn’t sell everything outta my out, out of, you know, all of our portfolios this time around like I did in COVID.
But you have to be cautious here because there is more risk in this marketplace than I’ve seen.
And I, I can’t remember another time when I saw it like this, with the outta control spending, the amount of interest where rates are and how we’re still seeing stocks and valuations in, in some areas.
It, it, it’s, it’s really crazy.
There’s just a lack of growth catalysts to be trading at this, this expensive valuation.
And most importantly, you do not have that Fed put in there, which is gonna be there all the time for the last 10 years.
Low interest rates, free money no matter what.
Debt, easy to pay.
It’s a lot different now.
It’s a lot different now.
So there’s many risks in the marketplace, guys.
This is important.
Learn, learn this strategy, learn it.
And Jenny with our money flow trades says exactly what to do.
Each trade shows you how to buy these things or your online brokerage account.
It’s very easy to do.
It’s not hard at all.
Again, it’s not shorting the market where you have unlimited downside.
And if you short the bar, say if you short Nvidia, I thought Nvidia was gonna come down, I didn’t think it would go after running up tremendously, a hundred plus percent into the quarter that it’s trading.
It was trading at 300, which was higher than the average target price of all the, the, the whatever 40 analysts covering the stock, which I think 80% had buy rating, 75% had buy ratings on it.
And you go, no way, no wage is, and, and it went up and it’s surge, right? But if that would happen, you get annihilated if you’re short, if not, you lose, you don’t lose the money you put in the put whatever that is, it could be 300, $500,000, whatever.
So you know your full risk going in.
Now we have three newsletters at Cursor Research that are called backend services, right? That fall into these areas that I think offer tremendous value from investors.
Okay? You’ve never heard me pitch these companies and talk about them at the same time.
But we have Moneyflow Trader, which I mentioned. Crypto Intelligence.
We saw cryptos and Curzio Venture Opportunities, we saw flagship newsletter.
I sold these products for as much as $5,000 annually.
I discounted ’em at $3,000.
I only sometimes maybe a little bit less on special deals.
Uh, but that’s only for like two, three years that people come in, in the coming weeks.
I’m gonna discount these newsletters significantly.
It’s gonna be a one time only thing.
So if you currently have these services, you could add another year to it and might be asking why would I discount premium newsletters so much? Okay, marketing or email.
You never wanna discount products and stuff like that.
The reason why I’m doing it, because any of you buying these newsletters today, you’ll likely become a client of mine for the next 10 to 20 years.
That’s the opportunity I see in front of me right now for these three newsletters.
All three of them to be positioned in them.
Because when you look at businesses and analyze ’em for decades and decades and decades, the the ones that survive are the ones that take care of the customers.
It’s been a tough market, lots of confusion.
You need someone you could trust gonna be there during these times.
Someone that writes their own stuff and you know, again, I’m doing a podcast for you.
It it’s a difficult market.
I love this s**t.
You could tell by all the numbers I threw at you.
I usually keep this from my premium podcast, but I just wanted to share a lot of the data, the stuff that this is what I’m doing.
This is like my hobby.
I love doing this, right? So, so just looking at the numbers and trying to figure out ways of how I could be wrong on this or I could be right on this.
And the more I analyze this data, the more I look at it, I mean these three newsletters are set up perfectly for this.
Now, you know, make no, no mistake with this offer, these newsletters are not even come closer to what we’re gonna be selling for a year from now.
But I’m gonna put together a special offer since I want you in these areas of the market.
The timing is very good for small caps for crypto where Bitcoin, Ethereum survived the past 18 months of carnage to where Coinbase is solid and not leaving the US Fidelity’s gonna continue allow trading cryptos.
But if you look at the technology coming outta this sector right now, it’s incredible.
Not to mention demand with so far on 2023, the amount of Bitcoin addresses with more than $10 increased by 16%, more than a hundred dollars increased by 23% and over a thousand dollars have increased by 32%.
You’re seeing more and more people go into crypto because of what’s happening, especially from central banks.
And they might be thinking, well it’s crypto and it’s cheap.
Investors looking to speculate.
If you’re a speculative investor, which everyone should speculate with small portion of your money at least, even if you’re 95 years old, that portion should be much, much smaller compared to someone who’s maybe 30 years old.
But you should always speculate with a chance of hitting a grand slam.
And if you like to speculate, there is no sector in the world that offers a better risk return than crypto.
Especially now that a lot of the garbage outta the market.
And we saw one of the worst conditions, bankrupt companies, a lot of the garbage leave.
But in 2021, our portfolio, the average position, the average position in our portfolio, we’re not talking about three stocks, probably 12, 15, the average position was up over 600%.
The average position, I’ve never seen that in anything, right? 2022 was a nightmare.
We took lots of losses.
2022 was bad, it was horrible, lots of bankruptcies.
But from a risk reward perspective, you can never get close to those returns by investing in stocks unless you’re getting founder shares, which you have to be an a credit investor, right? But you’re getting into SPACs and you’re getting in at 50 cents.
And then when these things crash from 10 to seven, you’re still getting out what massive profits while everyone’s getting murdered, the average investor is getting murdered.
Crypto also gives you a chance to invest in AI at the early stages.
There’s a lot of great companies in there doing ai and the utility features are amazing where you can create your own AI programs and generate money through their crypto.
That’s about utilities.
Crypto, right? NFTs are starting to do well.
Again, you’re seeing much more applications for them.
But make no mistake with crypto, it’s the future.
It makes sense given the current landscape where nobody, nobody trusts central governments.
Not to mention every central bank outside the US is now launching their own central bank digital currency.
Can’t hate it that much.
The next two years, I think we’re gonna see incredible gains in this sector and it’s gonna come from the best names, which are down 80% plus from their highs.
They got annihilated and we had some moves higher in 2023.
Bitcoin was up four straight months start the year.
I think they fell last month, which is this month in May.
But even if you look at 2021 through all the garbage salons still up a thousand percent.
Avalanche is great.
Crypto up 300% Ethereum’s up over 150%.
But this is second where I personally made more money than almost anything else I’ve ever invested in, in my life.
And that’s, personally it is risky.
I’m not gonna sugarcoat the risk.
I never did.
I did take losses, but for me, those gains exceed those losses by 13 to one.
Getting at the right time of the last four years.
Some people came in a year ago, unfortunately, some people came in two years ago, which isn’t too bad.
If you came in three years ago, you’re still, you know, doing well and we’re still up, you know, a lot in some of these positions on, on the early positions.
But right now we’re the best names in this space who are survivors are gonna be around.
Think about the tech bubble, same thing, those survivors, and look where they were years later.
This offers you an opportunity against it.
Some of the greatest technology, it’s not going anywhere in the us.
You’re gonna see more regulation around it probably over the next year or so.
Again, coy baits not leaving the US for deli, still offering them.
You got Robinhood offering them.
It’s very easy to get in and out.
But this is an area that’s worth investing in for speculation, especially since it’s down so much.
And for Curzio Ventures, again, that is my, i I love that product because, you know, sometimes I’m modeling out and these companies are so small that people are looking at ’em going, using my model sometimes.
So, you know, it requires a lot of research when you’re investing in small, very small stocks because the large caps have tons of coverage and you get that anywhere and get opinions.
But small caps, you really have to dig in and talk to management teams.
So I love this part.
Gold and silver guys.
I mean, you’re gonna see hum especially in gold.
Gold’s gonna surge from these levels.
Uh, it, it’s inevitable based o on the amount of buying, based on what’s going on with central governments.
Uh, most senior miners and mining companies are complete s**t.
They’re, I run terribly maybe from, you know, mining these actual projects.
They might be okay with geologists and stuff like that.
But when it comes to the financing, dilution warrants, options, I mean, look, they don’t generate money, right? So they have to raise money, but it’s just, there’s so much dilution in these things, it’s terrible.
But for me, I have over 15 years of experience in this industry.
I traveled to Vancouver three times a year, spoke at major mining events.
I mean, I met with, you know, billionaires, learned from the best like America Deucer, Jeff Fellows, Rick Rule, and made tons of mistakes where I love companies and I recommended them and people did a financing in my face.
Okay? You know, you go through that trial and error, all that b******t, which, you know, you think crypto’s bad mining, I mean those, those scumbags know exactly what they’re doing.
And crypto, some of these kids really might not know as much that they’re really crushing you and thinking they have a good i these guys know that they’re f-ing you right off the start, right? They know it.
So you really need to understand that industry because most of those companies are run terribly.
They’re run terribly.
There’s a reason why if you look at every commodity, if if oil goes higher, you see oil stocks at all time highs, you see, you know, go much higher.
If you get natural gas, you know, your ram surges, you see that the, I mean golds near its all time high.
And why do you think junior miners and a lot of these stocks are, are still 20, It’s because of how terrible and how much dilution is some of these companies.
So you really have to know to know what you’re doing.
So I avoided gold stocks for most of the part pass.
I recommend a few here and there.
Took some, some, some losses here and there a few exceptions, but you’re gonna see a lot more mining names going to CVO and probably we’re going to get into a lot of private placement deals if you’re in a credit investor.
Uh, one name we just interviewed it’s co-founder and chairs called US Gold.
So given that away, it’s in a a, a portfolio.
The interview is only available to CVO subscribers and, and, Wall Street Unplugged Premium members.
That’s our new podcast.
Uh, you know what Daniel like did tomorrow, every Thursday when you listen to it.
And this is what Luke Norman, co-founding chair, you’re gonna see the difference between a well-run junior miner and one that’s crap.
In fact, this may have been one of the best interviews I did in the gold space because of the education behind how he’s de-risking a project and lowering the expenses on it and preparing for a stock that’s gonna be leaner than ever as gold prices go higher.
And how they’re gonna bring his production at a much lower cost than everyone expects.
I mean, these guys are positioning us gold above five to 10 x here when gold does go higher, which I think is gonna go significantly higher from here over the next two years, which is why we have in our CVO portfolio.
But these are the interviews and these are are the things I’m gonna have available for you with these newsletters.
So it’s a lot to digest here.
Y’all are gonna break down a lot more details tomorrow on Wall Street Unplugged Premium.
But to learn more about our new premium podcast.
You can just go to WSUoffer.com and anyone looking to describe to any of those backend high priced newsletters, they’re all very high priced.
Uh, we are gonna have discounts, just one time discounts.
You’ll see this offer in a few weeks, which only gonna be available to our Wall Street Unplugged audience, right? So most loyal followers, and I’m doing this for customers because coming in at these levels, I think you’re going to be customers of mine and be listening to me.
Maybe that’s unfortunately for the next 20 years or so.
But the opportunities I see in those three spaces, are incredible, are really, really incredible where the markets are right now, and that’s what we’re focused on.
That’s how we’re gonna get through this cuz there is some pain ahead, but you have to position yourself and be smart here guys.
Questions of comments? I’m here for you.
That’s it for me.
I’ll see you guys tomorrow.
Announcer: 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.