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Wall Street Unplugged
Episode: 826December 1, 2021

The era of ‘easy money’ is about to come to an end

Fed Chair Jerome Powell finally admitted inflation isn’t transitory… and his change of tune shook the markets. Daniel and I give our take on Powell’s comments and the market selloff that followed. [0:30]

The Fed’s new stance marks the beginning of the end for the easy money policies we’ve seen since the start of the pandemic. We highlight several sectors and companies that will thrive… as well as ones that will suffer… as the Fed implements new policies to fend off inflation. [7:00]

Rising inflation—not to mention the new COVID variant, Omicron—will mean more volatility in the coming weeks and months. Daniel shares a handful of “boring” stocks that investors should consider as we prepare for a shaky market. [13:00]

We still don’t have a lot of data around Omicron… Yet, governments and markets are already overreacting. And individual investors can use these overblown fears to their advantage. [14:40]

Jim Cramer recently made some alarming comments about using the military to enforce vaccines. Prepare for a rant… [15:15]

Inside this episode:
  • Jerome Powell’s change of tune shook the markets [0:30]
  • The beginning of the end of easy money policies [7:00]
  • “Boring” stocks for a shaky market [13:00]
  • How to take advantage of the market’s overblown fears [14:40]
  • Jim Cramer’s vaccine plan is completely crazy [15:15]
Transcript

Wall Street Unplugged | 826

The era of ‘easy money' is about to come to an end

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 December 1st. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break down the headlines and tell you what’s really moving these markets. Really slow week. Nothing to see here. Not much to talk about, other than the markets falling 3% on Friday due to concerns over another variant called Omicron. I covered that in detail yesterday. But starting to spread internationally, going country to country. Data still coming in, still saying that it’s mild right now, but it did impact the markets. And oh yeah, we had the Fed Chair, Powell, testifying for the Congress. From out of nowhere, going from dovish to hawkish, almost on the same day the markets got spooked from Omicron, saying that inflation’s no longer transitory.

Frank Curzio: It should be no surprise to you, if you’ve been listening to this podcast for the last nine months, or if you’ve just been going out, and buying stuff, and living your life. All the economists are, “Transitory, transitory.” This is why you’re a lot smarter than these guys. You’re out in the real world, you see things. They’re looking at charts and analyzing past data to try to provide outcomes for the future. And we’re in unprecedented times, which is crazy. But it did surprise the markets, which fell sharply again on Tuesday.

Frank Curzio: So, I’m bringing in Daniel, because Daniel has all the answers. He’s going to answer all these questions on what you could do. Daniel, thanks so much for coming in. What’s going on, man?

Daniel Creech: That’s right. What’s up Frank? Happy December. It’s December 1st already, man.

Frank Curzio: So, I guess we need to start with Powell.

Daniel Creech: Transitory is retired.

Frank Curzio: Yeah, it’s retired. I mean, I went on my podcast, and I taped it just as he was going on. So, I taped it early, like 10, 10:30 and knowing he was going to testify. Right? So, testified to Congress and he mentioned inflation went higher due to the new variant. And he was suggested like, ports can get closed, could have further supply disruption. So, we knew that going in and I was just like, “Look, he’s stuck. He is so stuck. And, he should have been raising rates before this.” And the longer you wait, the more factors you bring in. Now we have a new variant, that’s scaring the shit out of somebody. I’m like, “Now he can’t. They’re not going to raise rates. There’s no way they’re going to raise rates and taper cook it.” And he went on, just what, a day or two later, saying, “We need to raise rates.”

Frank Curzio: I mean, their timing couldn’t have been worse. And the Fed’s not used to spooking the markets. Right? They usually say what they’re going to do. This really, nobody had a clue. And nobody had a clue that he was going to say, “Listen, we got to push this up.” I thought he was going to say, “Well, we got to wait because the economy can get worse.” That’s how worried he is about inflation. What’d you think?

Daniel Creech: Yeah, it was a little bit of a surprise on that front. I don’t… There’s no reason to panic here, because everything is calculated. So, it wasn’t just a shooting from the hip, from his perspective. He knows what he’s doing, blaming the next variant, and people need to listen to this and get used to this, because we kind of joked about this in the past. Not joking like ha-ha, but the way this is being handled, and the Delta variant, these are going to continue forever. So, anytime you see these kind of pullbacks, and you mentioned this, and this is a boring answer. Nobody likes to hear this, but longer term investors can basically ignore most of this, but just get used to this. Get used to this around election time. We’re going to talk about a few political hacks coming up, one that you know well.

Daniel Creech: And yeah, Powell, listen, he’s using the variant for an excuse. They are trapped. He’s just saying, if he is actually nervous now, I would like to… He’s in front of The Hill again today. So, today is day two of the testimony. So, we’ll sift through some of that, see if he elaborates anymore. But yeah, I mean, he should have said this a long time ago. It’s about time, and it was a good pullback. Dow is off, I think 6%. Russell’s down over 10% from the highs. Not counting today, obviously, as the market’s rallying. But yeah, it was a good little shocker and added some volatility.

Frank Curzio: Yeah. I mean, you’ve been saying transitory, I went back to look, for nine months, right? We’ve been covering this and saying, and you know this. This is something I didn’t have to tell you, that times are different now. You’re handing checks directly to people. We’re talking about 20X the amount of money you’re handing people directly, compared to what you just put into the banks during talk, right? The numbers are like, we talk about trillions like it’s nothing. And, they just went nuts and again, they shut down everything. So, I get it. But now when everything got back to normal and better than normal, all the asset classes are much, much, they’re all at record highs, basically, other than gold, of course. And earnings, I mean, you’ve seen earnings surge. Earnings are above, they have record earnings this quarter, right? They’re already above pre-COVID levels in 2019.

Frank Curzio: So, we’re back to normal, yet all this money’s been injected into the market and you keep interest rates low. For me, I was like, when is this going… If you’re keeping rates low and you’re not going to taper, and taper’s really nothing, guys. I mean, the time it’s going to take, taper is going to take nine months, a year, whatever. It’s very little in the scheme of things when you look at the numbers. But it just looked like, “Hey, just keep buying a dip, keep buying a dip, keep buying a dip.” Because this guy, who thought that they were going to keep interest rates low this long, this long for like 11 years, other than a slight period of… and then taking that back right away. And, just to see where the markets are right now with inflation, and for us, it’s not a surprise. But when you go on and you’re supposed to…

Frank Curzio: The way the Fed is, especially since 2008, 2009, is when they’re going to do something, they start like six months, nine months and they start saying, “Hey, here’s what’s going to happen. This is what we’re looking at.” This way, they prepare, right? There’s no surprises. For him to come on and just, to me that it was a big surprise. It was a big surprise because as a guy telling us, “Don’t worry about inflation. Don’t worry about inflation. Don’t worry about inflation. It’s going to go down. It’s got to go down. It’s going down.” Now, all of a sudden you switch. And I think it’s important to note, because he used the excuse for the new variant and there’s no news on the new variant. There’s no news. So basically, you’re using that event to say that you were wrong, and now what are you going to do? Because if you’re raising rates here, I mean, you’re looking at, even crypto covering is a 30, $40 billion market caps that barely have a utility.

Frank Curzio: I mean, the amount of money that’s out there and people raising 20, 30 million like it’s nothing, in days. I mean, a lot of that’s going to get washed out of the system. And that’s why you’ve seen the big pullback in small caps and risk assets. Right? So, that was interesting to me. I mean, inflation’s here. And to me, it seemed like a guy that’s very, very, very scared of inflation now, over the next year. And this is something that we’ve been talking about. And, why is it transitory? I have no idea why he thought it was going to be transitory, but this is the first time where these companies can raise prices almost by whatever they want. Not by two, 300%, but by 10, 15, 20, 30%. And they’re okay, they’re making their money because we’re handing checks. Our government’s handing checks to everybody. Everyone’s spent.

Frank Curzio: That’s why you’re looking at, Black Friday sales were flat. I mean, I don’t even know, you can go back how long that they were flat year-over-year, but they flat because everyone’s spending all the money that they were given for the last six months, and bought everything that they wanted. So, it wasn’t a surprise, but inflation’s here. I guess it’s how you’re going to position yourself. But, you absolutely want to.

Daniel Creech: Yeah, only one day doesn’t make a trend, but it was good to see Apple go up. I mean, a lot of money flows into quality. So, know what you own, know why you own it. And like I said, for events like that, when things get triggered and everything just kind of gets washed out, and you have a lot of volatility, that’s okay. So, that’s going to happen. Expect more of that, and use that to your advantage.

Frank Curzio: No, definitely. And when it comes to inflation, it’s the same playbook, right? I mean companies with pricing power, you’re looking at the reopen names that just got hit, I love, like airlines, is a surprise that they’re trading at. Again, we’ll go into reopen. I don’t think this is going to be a big deal. Even if it is, we’re going to see traveling come back. We already saw it come back enormously. And, the quarters that they reported were very, very strong, right? And people are still traveling in the US. It’s all open. And even, hotels as well, have pricing power. Banks, good inflationary, right, as rates go higher. Oil, probably a good buy on the huge pullback. And that was a very, very big pullback for oil. Crypto, and not just Bitcoin, a lot of great names out there with technologies. And, I covered that in our Crypto Intelligence newsletter.

Frank Curzio: But yeah, what I’d be worried about here is restaurants, apparel companies, places that have pricing power, because everybody has pricing power now. But what happens when you turn the faucet off? What are they going to pay for? Because, you have tons of competition in this space. Right? So, and that’s going to be a big difference, like the Nikes, and the Kohl’s, and stuff like that. You can go to different places, right, and get similar clothes and similar things. And, now the department stores have come back sharply, but now it’s like, “Okay, who has the cheapest prices?” It’s not just like, “Ah, it’s people just like spending money like it’s crazy.” But, I’d go with McDonald’s or Wendy’s, because those are places that you could still eat very, very cheap for a family. And yes, I know it’s, fast food is not that healthy, but still it’s cheap. Instead of maybe the Shake Shack, which had a nice move, WingStop.

Frank Curzio: Dine Equity owns IHOP and Applebee’s. IHOP is breakfast. I mean Denny’s is much cheaper. You got other options, Applebee’s, too. Maybe people are going to say, “Applebee’s, a little bit expensive. Maybe I’ll just go to a McDonald’s or a Wendy’s, or someplace else.” Again, not apples to apples comparison, but that’s how you have to look at the market. Who’s going to have pricing power? Right now, you say, “Well, everyone has pricing power. Look at earnings.” That’s not going to be the case. We’re seeing names drop off that don’t have pricing power. Disney doesn’t have pricing power with streaming, right? They’re giving it away again. You just, Peloton. It’s, Peloton has gotten crushed, but there’s a lot of names that we’re seeing. Cloroxes that don’t, when you don’t have pricing power, then these things really come down, and you got to position your portfolio because inflation’s here. It’s not going away. And that’s going to be a massive… You think it’s a big theme now, wait until next year. I mean, it’s going to be huge.

Daniel Creech: Yeah. I mean, well said. There’s really no reason to expect it to slow down. I’m bullish on oil, and have been for some time. That’s been a rocky road, but it’s not just a supply and demand issue, which is what I want to get across on. I mean, it’s good for inflation because commodity prices rise during times of inflation, so you definitely want to have exposure to that. In addition to supply and demand, you also have political headwinds and, or tailwinds, depending on how you want to look at that. OPEC is meeting again today, or I think it’s kind of a spur of the moment meeting. They’re going to talk about the variant. They’re going to kind of ebb and flow that, as need be. But you have a lot of anti-carbon headwinds out there from politicians, and that’s going to help drive the prices up. And that’s what you need to pay attention to. And that’s great for an inflationary environment. So yeah, don’t expect it to go away, expect a lot more volatility, and that’s not right, so.

Frank Curzio: Yeah, and one of the things, and I’m going to say this, because this is the first time I say this in a long time, as you know. Is, this might be the first time where it’s not a buy the dip market, a buy a dip market in everything. Usually when the market comes out, you can buy anything and you’re going to be fine, right? That’s how it’s been for the last 11 years. But when you… That’s the big difference in this news with the fed. If they’re looking to raise rates, that’s going to impact a lot of companies. Some companies are going to thrive and some other, but now, you’re taking money out of system. A lot of these are, whatever, leisure companies that you’re just spending money on, or whatever that you don’t have to deal with. And that’s fine. Everybody has money right now, because they handed it out for free, where you don’t even have to pay it back as business loans, and everything, which is crazy.

Frank Curzio: But it’s, I feel like, it’s not a buy the dip market in everything right now. So, I think a lot of the names that got hit will continue to get hit, like the Peloton, Zooms, Baidu. Well, I’m looking at biotech, which has gotten slammed, especially since February, but even for the year, biotech, most things are still up tremendously this year, if you look at the major indices. The XBI, which is one of the leading ETFs, not the largest ETF in biotech is down, and healthcare, it’s down 17%. And, I’m seeing names that have gotten absolutely destroyed. Now, I’m going to the CS, as you know, from the third to the eighth, and that’s a massive conference. You’re going to see huge media outlets there and everybody. We’re going to be doing live reporting. It’s going to be fantastic on YouTube, and also through TikTok, where our presence is getting bigger on TikTok, which is really cool. And, a lot of people are going to be focused on that.

Frank Curzio: But however, on the 10th to the 13th, you have the JP Morgan Healthcare Conference. One of the biggest health conferences in the world. They’ve been doing this for 40 years. And a lot of these companies that attend, which is a ton, they use that platform to announce news on a lot of drugs within their pipeline, and give them updates and stuff like that. I’ve seen names go 50% plus in a day. I don’t remember seeing this much of a sell off on biotech leading up to that event. So, we in CVO, we recommend a biotech. We might recommend another biotech, in CRA. I just think that’s a good opportunity with that catalyst coming up that nobody’s talking about, because people are going to be talking about it, right, in January. Right after Christmas is CES. So, I would look there. I think that’s a great place, but I don’t know.

Frank Curzio: This is kind of a game changer to me. I mean, if they are going to raise rates during this time, when you have international markets going to close, you’re going to see more supply constraints. We could be in for a tough, at least six months, or 2022. But, I think it’s significant.

Daniel Creech: It is. Definitely a changing of the tide, if they actually follow through with what they’re doing and the pace of what they do. But yeah, just to get, I would buy quality and boring. So, I don’t think it’s coincidence. Goldman Sachs, we talked about this, picked Amazon as their top pick for next year. I still am a big fan of Exxon Mobil. They had an interview on CNBC today. The CEO is doing a lot of changes. They’re conforming with their progressive board and that’s, they’re doing what they need to do to, to please investors and get money to flow there. It’s up a couple percent today. Goldman Sachs, as you mentioned in finance. So Amazon, Goldman, and Pfizer, of course. I know you just mentioned that ETF, but it’s not a surprise that Pfizer is near 52-week highs. And one of the board members, ex-FDA guy is on the CNBC every day, talking about how you need to get what, are we up to three or four booster shots now? How long until you need those to stay alive, Frank?

Frank Curzio: I don’t know. Booster, booster, booster. You need it. You got to get it every month?

Daniel Creech: Anyway, Pfizer, the take away from there is to have exposure to Pfizer like that.

Frank Curzio: And, let’s get into that now. So, the new variant, Omicron is, massive overreaction, considering we don’t know the news. And also, massive overreaction is that we’re well ahead of this compared to Delta. Again, I won’t get into that, covered that yesterday. We’re well ahead of this. Even covering the worst case scenarios, if this happens, we know we have vaccines that could hit the market and be distributed within four to five months, which is kind of amazing. That distribution and that logistics, all that stuff is in place right now, which wasn’t in place the last time, which takes a while. But the over-reactions and the craziness, I mean, the New York Governor issued a state of emergency for New York, with hospitals. And, only emergency, only necessary surgeries or whatever, but she’s declared a state of emergency.

Frank Curzio: There’s no cases in America, in New York specifically, right? So there’s no cases here yet, of this new variant. You issued a state of emergency. Think about that. That’s like Florida issuing a state of emergency for, “Hey, we’re likely to get five, six, seven hurricanes,” or whatever it is. It’s like 12 or 13, but it’s that’s how many kind of hit. And then you get one or two that you have to worry about, now that I’m in Florida for 11 years. But it’s like issuing a state emergency for future hurricanes. You do it when you know. When you see, “Hey, there’s a couple cases here,” or you see it spread. I mean, this is premature. And then, we have to talk about this because a lot of you have emailed me, and talk about my boy Cramer, and I know this really set you off, Daniel. That was interesting.

Daniel Creech: Yeah. Well, I mean, it’s scary as hell because this guy, you talk about a political hack, for crying out loud. He just comes out swinging at the… I guess he was trying, he didn’t have the guts to, but I guess he’s calling out DeSantis, right? That’s what he was trying to say with the Florida reference. But anyway, yeah, you can go ahead and play your clip, but this is, it’s okay to laugh at this because it’s really upsetting. But just listen to the words. I mean, people tell you exactly who they are. You just have to listen. And this is scary stuff, because this is just your typical… There is a culture war going on right now. And it’s between elitist and those who just want a better life. It has nothing to do with race on that front. They use that as a toy, to pit each other against us. And this is exactly that mindset. Scary stuff.

Frank Curzio: We have to play this clip for you, because it is really, I mean, to me it is. It’s crazy. I mean, it’s crazy. You have to listen to it, and then I guess I’ll give my comments on it after I listen to it, but yeah, let’s see if we can play that clip right now.

Jim Cramer: We have companies, that have tried hard to get people vaccinated, now backing down. We have governors, who want to be president, by grandstanding on a foolish state’s rights issue. The right to get sick, and get other people sick. So, it’s time to admit that we have to go to war against COVID. Require vaccination universally. Have the military run it. If you don’t want to get vaccinated, you better be ready to prove your conscientious objector status in court. And even then, you need to help in the war effort by staying home until we finally beat this thing.

Frank Curzio: The feedback that I got from this is kind of amazing. Everyone’s like, “Your boy is crazy, he’s off his…” And I’m not a guy to beat someone when they’re down. I really don’t like to do that. Having the military, I mean, I’m trying to defend Cramer here, because sometimes people say things who are on TV, and maybe ratings are down, and they’re going to say something stupid to really get a lot of attention. And I get it, right? Because I’ve seen the transition of people in this industry when they start getting popular, and they totally change. Their personality changes. They’re on TV all the time. And it’s this whole attention thing, it’s whatever. Most become psychotic, not to be mean. But when I hear something like this and first of all, and I don’t know if you heard this clip, but he did compare this to polio, Daniel, which I thought was interesting.

Frank Curzio: So, he compared it to polio vaccine, where it was a 1954, ’55. It was paralyzing people, killing young children. At its peak, there was 58,000 cases that were reported. Of those, 6% of the people ended up dying. However, 36% of those people were left with mild to terrible, or worst case scenario, paralysis. So, it’s two totally different things. I mean, COVID, we have a 97% recovery rate, and well over 99% for people who are under 55. Okay. So, you want to get the military out there to enforce this, and then you’re going to, have to have them defend themselves in court like these guys are doing something illegal. And he also said that they’re hurting people. How are they? I still don’t get that. I know that’s a narrative with, and I know the station he’s on, you’re playing a narrative. I get it, right? I’m trying to find a way to understand why you said this, Jim.

Frank Curzio: But, if you’re not vaccinated, and you’re vaccinated, why’re you worried for? Why’re you worried for? I have no idea. I mean, it’s a simple quote. Why’re you worried for? I should be worried for myself. It’s like not wearing a seatbelt. You don’t want to wear a seatbelt. That’s fine. You get into an accident. You fly through the window, you die. That’s your fault. If you don’t want to get a vaccine, you get infected and die, that’s your responsibility. There may be reasons why you don’t want to take it. But how is that going to impact someone who does have the vaccine? Because if you look at the Dallas Cowboys right now, right now, right now, this, it’s spreading through the whole team. It’s like eight, nine, 10 people with the whole Cowboys team. These are people that are vaccinated. You have to be vaccinated in professional sports. They’re getting Delta right now.

Frank Curzio: So, what is someone that’s not vaccinated, how does that? I don’t understand. I don’t get it. Even if you’re vaccinated, you’re showing, even with some of these other strains, you’re not getting them that bad. Why is everyone so concerned? Not to mention, 85% of the fricking population is vaccinated, Daniel. 85 fricking percent.

Daniel Creech: Is it that high? I don’t know that number.

Frank Curzio: It’s, I mean, has at least one shot. It’s like 83 to 84, I think. It’s probably 85 now. But, I didn’t look last week, but it’s close to that. And I’m like, “Holy shit.” I’m like, “Like you’re still concerned about this?” Where, most of these people that had to get it, got it. And, I know he’s in a danger zone and unfortunately, a lot of the doctors and a lot of the doctors on TV who are talking about this, like Fauci and Biden, and even Trump, they’re in a danger zone. They’re going to think totally different about this, and you should, because you’re in the zone where COVID-19, it’s targeting people over 65 with underlying conditions. You have to worry.

Frank Curzio: If you’re under 40, you have very, very little, almost nothing to worry about. I mean, the recovery is like 99 point, whatever, are you kidding me, recovery rates. So, comparing this virus to polio, I mean, it’s like comparing cancer to the flu. And, Jim is a smart guy. I know that first hand, but the whole military thing? I mean what the? I’m trying to defend it and I don’t want to beat someone down, because if you look at his Twitter account, holy shit. But, you want the military to enforce it because you’re worried about people who are unvaccinated, that they’re going to hurt somebody else? I mean, the statement is 100% false from a guy who’s supposed to be one of the best researchers on the planet. I don’t get it.

Daniel Creech: Yeah. Well, it’s not. It’s all about, I mean, this is just very easy to see what it’s about. It’s about control. It’s just awful. I mean, this is scary stuff. I’m laughing about this, just to try to not get so upset about it, but yeah, it’s just, it’s crazy. I mean, the fact that he would even say that so nonchalant, and all that kind of stuff, and I’m glad to see people pushing back because it is ridiculous. Again, how do you invest with this? Just buy the big connected people, buy Pfizer, buy those people, because that’s how you can hide out and make money. Until a business comes out and actually, until you can invest in the military and it starts rounding people up, and until you can invest in the court systems when he gets his way. Secretively, I just think he’s jealous. I think he wants to be a Senator and… Or Representative. And I know, he knows he can never win. So, I think that’s kind of the pit that’s really getting on him.

Frank Curzio: I don’t know.

Daniel Creech: That’s my take.

Frank Curzio: So, I know him pretty well. I’ll be honest with you. He’ll never leave his TV career, because he can make a fortune as a hedge fund, especially how popular he is. Probably make a lot more money than what he’s making at CNBC, and he’s making a fortune, and now they’re pushing his newsletter, and that’s at TheStreet.com.

Daniel Creech: Good for him. I mean, see? It shows you, you don’t have to have common sense.

Frank Curzio: Yeah. He loves it. He loves, he loves what he’s doing and I think, and I truly believe, he loves to help people. I see him angry when he gets something wrong. I do. He’s angry when he gets something wrong on the investment side. I’ve seen it. I know it. He gets pissed off. He understands that responsibility of that, there’s a lot of people watching you. But with that said, you’re reporting something that’s, again, I don’t want to say it’s outside your scope because we’re all, I’m researching this stuff to death, and talk to doctors, leading doctors, and he’s got amazing contacts. He’s talking to, see, Tim Cook called him. I’m like that, whatever the 15th anniversary, 10-year, whatever it was. 10-year anniversary, I think it was. Called into the show. I mean, the guy’s got amazing contacts, but yeah. I’ve been watching Cramer through this whole time, and hearing him talk about mask mandates, and mask, and the contacts.

Frank Curzio: I mean, he’s been really, really overboard. He’s been overboard with everything like with the vaccine, talks about it. And again, he talks about, but you’re taking it to another level when you’re saying you want the military to enforce it, and you got to go to court to defend yourself. Okay? That’s not like, you didn’t say that by mistake. You really believe that.

Daniel Creech: Of course.

Frank Curzio: I mean, that’s goes against our Constitution, everything this country was founded on. You’re putting something in your body, that you have, basically people like us, Daniel, you have a 99 point whatever percent recovery rate. Kids, very mild. I mean, what do we have? Like first like six, seven months? I think there was, just to put this in perspective guys. In California, again, I was doing all the stats. This is on the CDC. In the first six, seven months when California went overboard and said, “Oh, every single school is closed.” It was two children, unfortunately. It was only two children. I wish it was zero, but there was only two kids that died under 12 from COVID in California. And you closed every single school. I mean, I bet you the same amount of kids died from, God forbid, drowning or something like that. I bet you there’s more kids over that time span.

Frank Curzio: But the overreactions, here’s what we want to talk to you about because this is the shit that you see on TV, right? When we watch CNBC, when you’re watching NBC, when you… They have the political agendas, use it to your advantage. I’m not complaining about it. I know. We all know. We all see it. We saw it through social media. We all saw it, right? Even, I don’t care if you’re a Democrat or Republican, you saw it. We just, we created for three years. We created a fucking Russia scandal on Donald Trump, whether you like him or not, which was totally fake. You had Schiff go on, probably about 10,000 times, say, “Russia hoax, Russia hoax.” Now what happens? Well, the story was fake. The guy lied, and you talk to Schiff, he’s like, “Well, it’s not my fault. It’s his fault.” No, it’s your fucking fault. You’re the one that had the platform, the sounding board, you are supposed to do the due diligence on your source and you fucking didn’t. Right? You didn’t do it.

Frank Curzio: That’s the world we’re in and what happens to Schiff? Nothing. What happens to that? Nothing, nobody cares, right? Nobody gets punished for lying, and has this whole narrative, but we see it and everyone’s getting smart on it. We’re getting smarter, and smarter, and smarter, and Facebook, and no more crazy political ads, and stuff like that. You’re seeing a change. Right? And, it’s crazy. But you have to use that to your advantage, because there’s a lot of shit that gets said on TV that’s not true anymore. You’re never ever held accountable. Right? Nobody cares. Right? Nobody cares if you’re wrong, you’re right. Nobody even freaking cares. But use it to your advantage. Because a lot of this shit’s bullshit. You’re going to see, we’ll know if it’s not bullshit.

Frank Curzio: Maybe this thing turns out to be worse than the original strand. We’ll know this in a few weeks, and we’ll know when it comes here, and then we’ll just accordingly. But right now, when the people who discovered this new variant are saying, “This is mild, and we have zero hospitalizations right now.” That’s the only data we have, and we’re not seeing it. Right now, we would be knowing with, six, seven countries seeing this new strand of the last two, three days, we’d have more data going, “Holy shit, you really need to worry.” And everything’s fine. And then we got, Dan, the best thing I see yesterday. I mentioned this yesterday, is the Moderna CEO. Did you see that? Did you see his comments?

Daniel Creech: Yeah. Something about, they just need new ones and the new cocktail. How do they say that? Cocktail booster, or cocktail drug? That it might not fight off the new variant.

Frank Curzio: He said that. So the day before, the day it happened was Friday. Right? And, he went on TV and he said, “We get vaccines out, or a new booster. Might require a new booster. Right now, we’re not seeing this thing being a big deal,” right? And then the next morning, he goes on CNBC and he goes, the next morning, without having any fucking data, 24 hours later, “We may need a new vaccine.” We may need a new vaccine. And I explained to you, 60 million in sales in 2019 to 17 billion in sales for Moderna. You look at Pfizer, it’s in their best interest, right? To make everyone scared. It’s all about money. And anyone that tells you differently is bullshitting you, especially, when it comes to these people.

Frank Curzio: It’s just like the Notre Dame, Brian Kelly left Notre Dame. He left Notre Dame. They’re still in the freaking hunt. He’s leaving. He’s not coaching them. They’re still a shot for them to make the and NCAA playoffs, right? The playoffs, the four teams, it’s still a little bit of a shot, and they’re playing great. And he left, right? He’s gone. “I’m out of here.” So everyone’s like, “Well, he couldn’t really win. It’s so hard. They don’t have that championship game. And, he probably accomplished everything he needed to, but it’s so hard to get to next level. Don’t you know that?” Fuck that. It’s the fucking money. He’s getting double, he’s getting 15 million a year, compared to what was it? Six, seven. It’s the money. It’s always the money. But when you look at these guys, use it to your advantage when they’re saying shit like this, because right now we don’t have a lot of information on it.

Frank Curzio: Sorry to get emotional about it and cursing it, but it just pisses me off that someone who likes to do the research, and again, I’m going to have my opinion on things. I’m going to be wrong on things, or whatever. And I’ll come on here and be the first tell you, “Wrong,” which is rare in almost any fucking industry these days. Nobody wants to admit they’re wrong ever, ever, but to actually be lying to you? That’s the problem here. Telling you that if you are unvaccinated, that you pose a threat and could kill people who are vaccinated is fucking 100% false. And, I cannot believe someone of that stature who taught me how to research stocks, and helped my career tremendously would say something like that. And again, I don’t want to pound on the guy, because he’s getting pounded right now, but I can’t help myself. I disagree.

Frank Curzio: I love him, but I strongly disagree, and I know a lot of people disagree because they don’t want the military to come after these people. Even if you’re vaccinated, you really want the military to go after people who are unvaccinated? I mean, if they get COVID and they die, that’s their problem. They didn’t want to, they said, “Hey, I don’t want a vaccine,” but it has nothing to do with you if you’re vaccinated. I don’t get it. I don’t understand that. And, yeah. I mean, that’s all I got to say about that, Dan. I’m sorry to go on with that rant, because I felt like you were going on about it even more, but I really took a day to think about this, and tried to calm down, and I guess it didn’t work.

Daniel Creech: Yeah. That’s all right. Well, thanks, Jim Cramer, for drawing attention to the financial media and giving us a fun topic to kick around. Yeah.

Frank Curzio: No.

Daniel Creech: So, it’s just yeah, a lot of political theater. It’s all right. Buy the big connected ones. Hide out. Hide out there, make some money off of it and smile.

Frank Curzio: Yeah. And it’s so surprising, like you said, Apple was one of the few stocks that were up yesterday, and this is on Powell’s comments. But look, inflation is here, and you might say, “Hey, I knew that,” but most people knew it, but you know what? The markets adjusted to the point where, “Hey, we don’t really have to worry about it, because the Fed’s going to keep rates low.” And yes, we’re probably going to see higher inflation, but we, the markets didn’t anticipate Powell to be like, “Hey, we’re going to tighten earlier than expected.” Which, by the way, is the right fucking move. You have to tighten, because if we have runaway inflation, there’s almost no way to control it, that you can’t. It’s not like the China situation, with Evergrande. It’s not like the credit crisis. It’s not like COVID, where things slow down, and you just freaking start printing money out of nowhere, and handing it to them.

Frank Curzio: The opposite has to happen. You have to take money out of the system and you have runaway inflation. It kills everybody. Think about it. I mean, your costs are higher than they’ve ever been. And now, you’re seeing companies continue to raise prices. Are your wages going up right now? Well, they might be going up a little bit because profit’s so good. But now, you’re going to see profits get hurt, because people aren’t going to pay for these things at these prices. And when they do, you’re not going to be paying for these things. So, you need to make more money. I mean, the impact runaway inflation has, it’s so hard to explain. Because the last time we saw it was in the seventies, early eighties. Nothing, almost nothing works if we have runaway inflation. It’s the worst case scenario, you see a market come down the 30, 40% and it’s impossible to control.

Frank Curzio: The only way you could control it, is to remove money from the system. Remove leverage from the system. We’re more leverage than we’ve ever been in the history of our country. So, that’s why it’s something you need to take notice. And in fact, Powell is like, “Hey, it’s not transitory.” I mean, he seemed like a guy that’s really scared of inflation. Believe me. It has nothing to do with Omicron. It has nothing to do with that. It has to do with, “Hey, I’m wrong on this. Companies are going to continue to raise prices, and it’s time. It’s time to raise rates.” It’s going to hurt the market. It’s going to hurt some companies. I still think there’s a lot of great ideas out there, but it’s not going to be a layup and buy anything on the dip right now. It’s not, we’re not there. Companies aren’t going to have pricing power. And I think, that’s the big message. I mean, you really have to adjust your portfolios, right?

Daniel Creech: Yeah. Just invest for inflation. And, it’s going to get worse, that we sound like a broken record there, but we can have some fun. We’ll pick out some stocks to benefit from you, to help you hide out when stuff hits the fan.

Frank Curzio: And we do have lots of stocks in a portfolio to position this, too.

Daniel Creech: Like I said, energy, biotech, just listen. People will tell you what to do, and what they think. So, just pay attention. Just like to the Jim Cramers out there.

Frank Curzio: Yeah. It definitely is to your advantage on a lot of things, that are pretty crazy. Right? They’re really crazy. So, all right, Daniel, we’ll leave it there. Thanks so much for coming on, man.

Daniel Creech: Until next week, everybody.

Frank Curzio: Until next week, let’s get your emails coming in, frank@curzioresearch.com. Daniel, what is your email?

Daniel Creech: Daniel@curzioresearch.com. You’ll get several this week. We’ll get called 10-hat wearers and you dropped several F-bombs. That’s a new drinking game. Got off of transitory to the F-bomb.

Frank Curzio: I get emotional, but I can’t-

Daniel Creech: Tim Cook’s going to call you.

Frank Curzio: Listen, I can’t tell you how many emails I got about Cramer. How many emails that I’ve got about Cramer, and people were coming on my Twitter about things that I posted like, “Hey Frank, this is really cool.” And, they’re like, “What’s up with your boy, Cramer?” I was just like, I didn’t really know the story until like a day later. And then you give me the, said, “Did you see this?” I said, “Yeah, I just saw it.” I was like, “Wow,” I couldn’t believe it. But, again, everyone has their own opinion, but that’s, for a guy like that, that’s pretty out there.

Daniel Creech: You’re allowed to be crazy.

Frank Curzio: That’s really great. The military enforcing vaccination. And if you don’t get it, you have to go to court and defend yourself. It’s almost like, you’re going to go to jail. I mean, holy cow. Anyway, anyway, I guess Cramer didn’t have a really good Thanksgiving. I wish he did, but hopefully, he’s a little bit more happier, in a better mood.

Frank Curzio: But, Dan, thanks so much for coming on. I appreciate it. But guys, questions, comments again, just gave you the emails. Feel free to email me at frank@curzioresearch.com. That’s it for me. Really appreciate all the support.

Frank Curzio: Awesome, awesome interview tomorrow. Chris Mayer, one of the best guests to provide under the radar ideas, is going to provide two or three of them for you that are fantastic. So, definitely give a listen. Really, really good guest. Really, really smart. Someone who speaks to the Value Investing Congress, which is very hard to do. It’s like the Chanoses and Ackmans speak there. He’s someone that speaks, that, it’s a high profile name, it’s really cool, and haven’t had on in a while. Glad he came on. That’s the interview tomorrow. It’s going to be really exciting, so definitely stay tuned, and I’ll see you then. Take care.

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.

Frank Curzio, founder and CEO of Curzio Research, is one of America’s most respected stock experts. His research is regularly featured on media outlets like CNBC’s Kudlow Report, The Call, CNN Radio, ABC News, and Fox Business News. His weekly Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 9 million times.

Editor’s note:

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