Wall Street Unplugged
Episode: 936August 23, 2022

The Fed will crash the economy if it doesn’t change course

economy crash

Stocks moved lower yesterday as investors worried about Fed Chair Jerome Powell’s upcoming speech from Jackson Hole, Wyoming. I continue to pound the table on why the Fed is the biggest risk to the markets.

Next, I highlight how the Fed has crushed a major sector over the past six months… and what possible actions would cause me to sell stocks. And while the Fed’s plan to tame inflation is working, I explain how the shift in consumer behavior is hurting several industries.

I’m back from the Crypto Connect & NFT Expo in West Palm Beach, Florida. I share some highlights from this incredible event… how retailers are pushing into the metaverse… and why billions of dollars are already pouring into the space.

Inside this episode:
  • What caused yesterday’s market selloff? [1:35]
  • The Fed crushed this market in six months [5:15]
  • Why the Fed is a threat to the markets [14:00]
  • A recap of the Crypto Connect & NFT Expo [26:55]
  • How individuals—not big tech—will control the metaverse [31:10]
Transcript

Wall Street Unplugged | 936

The Fed will crash the economy if it doesn’t change course

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 August 23rd. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break the headlines and tell you what’s really moving these markets. Man, what a week. Just back from the Crypto Connect Expo in West Palm Beach. Met so many amazing people. Just blows me away, how big their followings are in social media. Hundreds of thousands, millions. Just walk up to you, start talking to them, they’re like, “Yeah, follow me. Or, you could see these followers.” I’m, “Holy cow.” So many of them are all in the NFT space. The metaverse, where it’s true ownership. Just a way to monetize themselves, which is their brand. Their name.

Frank Curzio: Get more in to this later, really digging into the weeds. Great interviews. Awesome stuff. Also, ideas. We were there for four days. Probably did 25 plus interviews. Hosted panels. Really, really cool stuff. A lot of tokenization too. A lot of tokenization talk at this thing. I think I’m the only person there that actually has a security token. They didn’t put me on that panel, which talked about how big it’s going to be. I’m like, “Yeah, I think I know that.” So, it’s pretty cool. But at first, we want to talk about the markets, right? Because, what happens every single time I go away and I go to a conference, or I’m working hard for you guys, the market comes down. It’s never easy. Makes my job harder. Get tons of emails, which is cool. But we had a real crappy day yesterday. People get more and more worried that we’re heading for a recession.

Frank Curzio: The only person, or should I say the only organization, that’s not worried is the Fed. They don’t see it. At least, that’s what they’re saying. Right? Powell, Fed chair. He gave a speech at Jackson Hole on Friday. And, the tone from him, and every other Fed president, is that we’re not seeing any signs at all, and inflation is moderating. No signs at all, which means pedal to the metal. That’s in terms of rate hikes, which is weird. Because, we’re really seeing clear signs that inflation is moderating. I mean, to be fair, there’s also signs of inflation is still being severely high. We got food. We got rents, natural gas, hotels, airlines. Yes, we see it.

Frank Curzio: But, clearly lots of signs. It’s not just moderating, but crashing certain industries. The most important driver of the economy, which is housing. So, new home sales came out today. They felt 12.6%. They’re supposed to only fall 2.7%. Guys, when it comes to economics and this data, you never ever see that, these wide swings. The expectations are this far off are massive. Massive. Because, when they say they beat estimates, that’s the economist, right? That’s all the economists. That’s their estimates. Package them all in and say, “This is the average.” And, these are the guys that believe the Fed’s going to continue to raise rates. Crazy. These are the guys that are saying, “We’re not really seeing those signs.” Inflation’s moderating. That’s a 2.7% estimate. So, at 12.6%, it’s slapping you in the fucking face and saying, “There it is. There’s the sign.”

Frank Curzio: If you can’t see it now, fine. Well, it’s the worst since 2016, this number. I’m going to put that in perspective, because it doesn’t seem a long time. But, the housing market eased up incredibly in 2016. Why? Because, that’s the first time the Fed started raising rates. First time since the credit crisis, zeros in. They said, “We’re going to do it many years before.” They didn’t. They said, “11, 12, 13, 14.” They talked about it finally, right. Raised by just 25 basis points. And, guess we had some fears that China was rolling over a little bit. But, just from the Fed raising rates that much. And, it’s not the 25 basis point, right? That filters through the system. Yes. 25 basis point hike. It’s the fact that we were going see interest rates go high for the first time, in a very long time. And, it spook to markets, especially housing. Housing slowed considerably in 2016.

Frank Curzio: Because, when I saw this number 2016, I’m like, “2016. I don’t remember the housing market slowing that much.” But apparently, it did. New home sales. Scared to build. Rates are going high. The Feds talking about it. We’re at 0.5% right now, could go to 1%. It could put mortgage rates up to 4%. Holy cow. We’re at 5.8% in a 30-year, right now. We’re at 2.5% immediately within six months. Zero to, not 100, 250 miles an hour. That’s how fast we did this. You have to realize how a 75 basis point hike, compared 2016, how it resulted in slowdown because of the fears that rates were going to go higher. We’re higher. And now, we’re fearing that it’s going to go to 4%. Are you crazy? 4%? Just crash the entire housing market in six months. If it’s still pockets that are doing okay, I’m doing okay with Florida. Other people doing okay in Texas.

Frank Curzio: And, some of these areas. Paying cash for your home, you still getting good deals. But, man. If you’re borrowing money between that, whatever. I don’t know if you get housed at 250,000 these days. But, between that and 600,000, the real estate agent I talked to said, “It’s drying up. It’s horrible.” And, you’re looking at the supply. Over 10 months of supply. What does that mean? On average, it should be four to six months. I think it was below two months or one month at one point. He was, “Everything was coming on market was just gone.” It’s 10 months.

Frank Curzio: Now, these home builders are sitting on tons of inventory. What does that mean? It’s not inflation. It’s deflationary. How are they going to sell this? You have cancellation rates surged through up to May, right. In a couple months when we started raising rates in March or February too. And in January, the Fed just started talking and going crazy raising rates. Because significantly, we were so wrong. It’s not going to be transitory inflation. It’s here. Holy cow. But since May to now, they doubled again. The cancellation rates that tells you how bad it’s going to be. And, remember when I said about 2016, we’re looking at rate hike of 20, 25 base point hike. And then, expectations that it’s going to go higher. Maybe to 1%, 1.2%. Whatever.

Frank Curzio: We just did two 75 basis point hikes, back to back. What was that June, July? Or month before that? Whatever. Back-to-back. And before that, it was 0.5. Hikes. I mean, it’s insane of how fast, last time it does this, 1994. A 35 base point hikes. This is the fastest raised rates in close to three decades. But, you look at the home builders right now. And, I think toll brothers reports this week. Not too sure what day, maybe it’s tomorrow. But, take a look at what they have to say. It’ll be a lot different than what they were saying in the past.

Frank Curzio: But, if you look and say why they have tons of inventory? Builders, who are balls to the wall, post COVID. $11 trillion injected into the system, handed directly to people. People buying houses like crazy. Then, we had supply chain concerns. They were saying demand has never been this strong in the history of our industry. And, they were right. Because, you injected $11 trillion in less than 18 months into the system, and kept going and going and going. Even though asset prices, including housing, surge to all-time highs. Earnings surged to all-time highs. Car prices surged to all-time highs. This was in early 2021. And, you still injected another $4 trillion to this system over the next six months. Are you crazy? Trillions.

Frank Curzio: So for two straight years, these guys are like, “We’ve never seen anything like this.” And, even as little as two months ago, home builders said, “We’re not seeing a consumer slow down.” I mean, home builder prices went sharply higher off their lows, but this is two months ago. And, I’m going to tell you because the home builders, at least from the perspective of their conference calls now and where their positioned, they’re going to experience the same fate as the retail industry. The Walmarts, the Targets, the Kohl’s. What happened? Seeing massive demand, ordered tons of inventory. Need those products, have seen massive demand, given the supply chain concerns as well. We have to get this through the system. Just whatever we need to do. And, Walmart and Target are great companies and figure it out. And, got a whole bunch of through the system, which a lot of companies weren’t able to do.

Frank Curzio: They still have supply chain concerns. Got all of this product. Now, what happens? Demand falls off a cliff. It falls off a cliff. Force them to what? Lower prices to sell the excess inventory. Deflationary. Remember how fast these large retailers saw the dramatic shift in sentiment. It was 30 days. The first two months of the quarter were fine. The last day, as you see both Target and Walmart companies, when it’s that bad they’ll come out to the big companies. And, warn them and say, “Look, we’re lowering our estimates into the quarter. Here’s why.” I don’t know. It’s a tip to Wall Street and say, “Hey. We know we talked to you guys and we were wrong, and we don’t want you to look like idiots, when we come out with these numbers.” They didn’t even have time to update those numbers or to report that guidance before they reported.

Frank Curzio: And, what happened? They got wrecked. Both names saw the sharpest decline, one-day decline, since 1987. Since, the market crash in 87. Holy cow. That’s how fast it happens. There’s a bigger point here. Yes. You have the home builders sitting on massive inventory. Supply numbers. They’re surging, right. Over a 10-month supply down in the market. So, definitely going to need to get the inventory off their books. So, they have much lower prices. But think beyond the home builders, they have thousands of companies that supply them. I just went through this building my new home. Hopefully, it’ll be done in November, but the whole supply chain concern and everything. I mean, there was one area I got wrecked on, which is the pool. Which is a joke. Everything else, this is a large home builder that does custom homes. So, they had a lot of supply, which a lot of people didn’t. But, you saw lumber prices come down.

Frank Curzio: A lot of stuff come down. Plus, I was able to lock lower interest rates. It was still very high and I almost guarantee a lot of stuff I paid for, is going to be a lot lower. Three, six months from now, if it’s not already. But, I went through this. “Oh, we have to tell the suppliers. Oh, we have to switch this. Oh, you like this brand? Sorry we can’t use it. We can’t have this. They’re not going to get it to us. It is a nine month wait. So, we switched. So, you got to pick from this group instead.” Think about every single thing you have is thousands of suppliers, right? Thousands. What are they going to do? Who’s the number one customer? Home builders. They’re all cutting orders. They’re in scrambling mode to reduce the massive, massive, massive amount of inventory they have. Because, that was two months ago. Again two months ago, consumers find we’re seeing everything great.

Frank Curzio: That’s how quick it could change, when you’re looking at interest rates. That’s what higher rates can do to the economy. The Fed was able to crash the housing market in six months by raising rates as fast as in what? Close to three decades. Right? Like I said, last time we saw a 75 basis point increase was 1994. We just had two back-to-back months. And, before that 50 basis point. And then next month, what are we going to see? Another 50 point rate hike. But, the hikes that have already taken. They’re not filtered through the economy yet, guys. They’re not. On a scale of one to 10, they explain how much is filtered to the economy. We’re at a four right now. We’re at a four. This still hasn’t filtered. It’s not, “Wow, we’re seeing it. Okay. Keep going.” No, we haven’t seen it yet. We just starting to see it. Usually, it takes a little bit longer, but we raised it by so fast. By so much, so fast. I mean, look at the housing market. It was booming six months ago. It’s crashing.

Frank Curzio: It’s important for every investor. You need to realize that it’s going to get a lot worse. Just with rates at 2.5%. Because, the Fed plans are raised by another 50 base points next month. And many economists, granted who have been so wrong in inflation over the past two years, and are still wrong. Now, that’s why you’re seeing the numbers come out with a 12 point decline for housing. When they’re expecting 2.7%. Looking at a manufacturing index, what is it? Minus 30 compared to minus, what was it? Seven or eight, whatever it was. Why is that huge discrepancy? Because, the economists are so wrong right now and they have no idea. And, they’re all programmed the same way, wired the same way. Let’s just have good contacts with the Fed, the models around there. Don’t go against the Fed. This way, we’ll always have access and all this shit.

Frank Curzio: But for them to say, “We’re not seeing any signs,” and be this far off on these numbers… Guys, economic data is something I’ve followed for over 20 years. I love this stuff. I don’t blame everyone for hating this stuff. It’s my job to explain it to you. You don’t see these numbers that far off ever, unless there’s something boiling below, whatever. Because the economy, you don’t see that during regular economic times. You see a slight here, not that much of a discrepancy in what the economists are projecting, and what the numbers are coming in at. We keep seeing it and seeing it and seeing. And, that number’s coming in now a lot worse than expected. And, it’s going to. At first, it was coming a lot higher than expected, especially with inflation. Now, you’re going to see it come in a lot lower than expected. And, you have to be careful.

Frank Curzio: It’s a big deal. It’s not citing why the Fed is wrong or why the economist is wrong. What I’m saying that, if Powell pushes the Fed funds rate to 4%. Or, continues on this where we’re at 2.8%, here comes another 50 base point increase. We go to 3%, and he’s still going to say I’m seeing no signs. Again, he’s talking to the markets. That’s perception that changes sentiment. The Fed could change sentiment just by talking. That’s what you saw in 2016 and why the housing market corrected, so considerably, when they just raised rates by 25 basis points. Because, it was the expectations of them saying, “We are going to start to raise a lot more now.”

Frank Curzio: So right now, they’re raising a lot more and saying we are not stopping. We don’t see it. I’m hoping they do see it. And, I understand why you’re saying it because you don’t want to come out dovish because you made that mistake already. And, the market surged a thousand points in a day. Remember that? After the first 25 base point hike. “Oh, we’re okay. We might do more and might do more.” Three weeks later they came out with a, what was it? One week later they came out with a press release saying, “No, no, no. We’re going to get more aggressive.” Then, what happened? After the 25 base point hike? 50 basis point hike? 75 basis point hike? This is when Powell said, after the first hike of 25 basis points that, “Ah, we’re going to get a little dovish.” He’s not going to make that mistake again.

Frank Curzio: He’s not going to go on and say, “No I’m seeing signs.” Because, if you’re going to see the market. Money start pouring in. Again, it might take a little bit longer for inflation to cut. You need inflation to come down. He’s trying to do it without crashing the economy. If he goes to 4%, we’re not just going to go in a recession. We’re going to go in a very deep recession. I’m talking about, we’re not just going to retest the lows. We’re going to go down probably another 15% from those lows. That’s how bad it is out there, right now. People are getting stretched. They’re changing their habits. They’re going to buy less food because these prices are so high. They’re going to find ways to save on gasoline, which they did when gasoline price was $5. And, that’s why you saw demand come down. That’s normal.

Frank Curzio: That’s why the Fed always believed, inflation was transitory, usually takes care of itself. You raise prices high enough to the point where you can’t raise them anymore, no one’s going to pay for that. And then, they come down, right? You see transitory because outside of the 80s, that’s what usually happens. But, this time it’s different. Because, the Fed was caught completely off guard. And, we injected $11 trillion in 12 months into this economy. They gave this money directly to businesses and consumers. So, it takes time to shrink this money supply. This $11 trillion, but it’s working. It’s working. You could see it. Look at the leveraging in the stock market. Technology, Biotech, Cryptos. You see the money come out of there. Look at housing. Probably the quickest I’ve seen this market crash, since I’ve been alive. “See Frank, what about 2008?” I mean, 2008 was different.

Frank Curzio: I mean, it took a while. You look at the history timelines are usually just… Look at 2006, how many firms blew up. Then 2007 for housing prices, finally topped out. And, the market started to collapse and it took 2008. It didn’t take six months. Of course, this is different than that market. I mean, housing’s on a much better footing. You need more than a library card, no money in the bank, to buy a house these days. You didn’t need more than that back in 2004, 2005, and 2006. And, selling all those loans to whoever. Fannie and Freddy, whatever you did. But, this is different. I mean, banks’ balance sheets are stronger than they’ve ever been. They’re raising their dividend to buy back a stock because they’re being forced to keep all this capital on their books. At least, a lot more of it.

Frank Curzio: People are paying their mortgages and there’s no credit crisis here. But in six months, we took a booming industry with the most important drives of the economy, housing. Which, based on Zillow total value of this market, as of February it started to crash $40 trillion and in six months the Fed. Boom, was able to crash it. That’s how powerful the Fed is. That’s how raising rates this quickly. That’s what it can do to markets, could impact the biggest industries in the world in months. Now imagine if the Fed decide to go to 4%, what’s going to happen? Because, you talk about housing. We saw the same thing in retail a few months ago. The rising rates so fast, we saw in crypto causing massive deleveraging. Also, in biotech. Just mention that, right? What’s the next sectors to watch for, that saw a huge demand to the point that they couldn’t get enough product to market. And now, going to… Holy shit, demand’s falling off a cliff, and we’re going to be sitting on too much inventory. The next is going to be cars.

Frank Curzio: We have a massive amount of cars being built and shipped right now to meet that huge demand. Where did demand come from? It came from pre-orders from people like me, seeing how the system works, putting down. I think it was a couple hundred dollars on a Rivian truck about 18 months ago. Still, they update me and they tell me how much prices are being raised and stuff, all the time. Probably, every three months. I’m not getting that car probably for another six months, at least a year, if I decide to get it. But, look at the environment now where people had all this money, wanting to buy cars and EVs. And, holy cow, this is great. And now, look at today with economy slowing. Consumers, again, pinched while what? EVs are up 20% year-over-year, the average price is $66,000. Average for an EV. That’s going to be $80,000 in a few months.

Frank Curzio: Did you see the recent price increases from Ford and GM, they just put through? Soon as we pass the bill for the… Whatever, I can’t even say it. The inflation reduction act. I can’t even say it. The inflation. We’re going to spend all this money. It’s an inflation reduction. I know it would go into midterm elections, a couple months away. And, you want to try to appear that you’re lowering inflation in this current administration. I just love it. That’s slapping people in face. It’s, when you check out of a grocery store, we have Publix here. And, Publix is very, very expensive compared to everybody else. But, they have more fresher food and stuff, and whatever. And, you go in there and they’re, “Oh.” And, they hand you a receipt. “You just saved $6.” And, if you put that same thing in a Walmart or whatever. Or another grocery store, it would be you would’ve saved $20. But, they actually slap you in the face and give you that, “Oh, you just saved $6 by shopping here.” That’s like the EV industry, right?

Frank Curzio: And, they’ve raised prices. So, Ford and GM raised prices between $6,000 and $7,500. They just announced these price hikes and how much you’re going to save based on the inflation reduction act. It’s probably less than that. So you’re like, “Hey, here’s tax credits and you’re going to get this money.” So, you could. And then, what do they do for you, Jim? Just so basically, it’s a wash. You’re spending tax payers money, but yet, companies are raising their prices by that amount, which is great. It’s fantastic. Can’t make this up. Anyway, won’t get too political. But industry by industry, they’re going to be hit by lower demand, especially those who had the worst supply chain concerns six months ago and a year ago. Since they over ordered… We were seeing it in semiconductor industry. We’re seeing it. We’re seeing a lot of warnings. Some of them are doing okay, depending on what industries that you’re in.

Frank Curzio: But, we’re seeing that in semiconductors. Almost all of them. Right to the point where, that’s why we’re going to Taiwan so much. And, with our politicians. And, who goes there. And, puts a little feather in their cap. “Look how good with Taiwan.” I’m okay. Anyway, but we need to work with Taiwan semi, where they have all the secrets. They have everyone. If we’re going to build our own fab plants in the US, or whatever. But, you’re seeing it. So, we’re not going to have to build a lot of these plants because demand’s falling. It’s falling. So, to combat the supply chain concerns, a lot of these industries did, well like I said, they raise prices considerably. But now, you have a market where demand is slowing. You have rising inventory and you can’t raise prices anymore, which is deflationary. What we need.

Frank Curzio: So, if you’re looking at inflation, it has nowhere else to go but down. The Fed, all they need to do. It’s simple. Go on vacation for six months. Come back, February, March. And, the markets will be fine. But, if you’re looking to go out there, raise rates, to bullshit talk, scaring the crap out of everybody. That’s why you seeing the market sell off. Because, we see the signs of inflation coming down. Yes. Again, I cited places where it’s not, but we’re seeing those signs and it need to come down further.

Frank Curzio: They’re going to come down a lot further and faster, than anyone imagines. For the housing industry to come down this much in six months and how much is going to be filtered. How many things are sold through housing. Look through your house. All the things, right? All that demand coming down. Those prices and everything you see in your house. Next time you’re in your house, you’ll listen to this in your house. Right now, whatever you’re doing. Look around, everything in there is going to be at a lower price. It has to be. Because, demand’s falling off a cliff and nobody’s buying houses. Very few people are. It’s down tremendously. And you can say, “Well it’s temporary.” It’s not. When you see the supplier homes that high, that quickly. Holy shit.

Frank Curzio: So, the Fed’s in the driver’s seat. If they really want to continue to raise. I get the 50 basis point cut to say, “Listen, let’s just make sure.” After that, you need to stop. You may go up to 3.25%. These numbers are going to constantly get worse and worse, especially in housing, and you see it across the board. Rates will be the last to come down and food prices will be the last to come down. But, you’ll see it. You’ll see it. If you’re just going to go out there and say, “Well, we don’t see it. We don’t see inflation coming down. We have no idea.” And, you’re going to continue to raise rates and you go to 4%. Be careful. Because, overshooting is extremely dangerous. By far, the biggest risk to the market. If we don’t overshoot, we’ll be fine.

Frank Curzio: We’ll be fine. I like the equity markets. Still, lots of bargains, especially in Tech, Biotech, Small Caps. These things fell 80% from their highs, able to nail a few of them. Some of them are up over 20% from their lows. But, still down tremendously from their highs. Good names that aren’t really impacted too much about the economy within Biotech, especially, a lot of these companies got to get funded if they have the research and the technology. And, a lot of them do. I mean, not a lot of them, but a lot of the ones that are down. But, that’s my focus. And even, small caps here. Small caps have got annihilated. They’re more cheaper compared to large caps than in decades and decades and decades. They don’t have to worry too much about the international demand, which is falling off a cliff, where inflation is through the roof, especially, in Europe.

Frank Curzio: And, a lot of our companies have exposure to those markets. Not to mention China. The information we’re getting from China, from subscribers, people that live there. Holy shit, is it a disaster under the hood. It’s not being reported here as much as should be. They’re doing a good job. China of hiding all shit the with their property market. The things that are going on with their banking system right now, they’re hiding it. A lot of our larger companies have exposure to these markets. Small caps don’t mostly to the US, where we should remain pretty good. As long as, the Fed doesn’t go absolutely crazy. With that said, if the Fed decides to push rates. And, I would give it to 3.25% of what they say. Okay. I don’t know what they’re going to say in Jackson Hole. Looks like they’re going to probably reiterate what they said in the past couple months.

Frank Curzio: We’re still not seeing signs of inflation, right? That’s why you’re going to see the market volatile, which is fine. But, September when you raise rates by 50 basis points, that’s going to be a big meeting. That’s going to determine whether I’m going to push the issue on stocks, or reverse course, on a dime. Because, if they’re serious about going to 4%, you got to take money off the table. Equities are going to get annihilated. They’re not going to come down a little bit. They’re going to come down a lot. Right now, we’re scheduled for a mild recession. And then March, April, May, start lowing rates, feed the market. Get it going again, more money into the system, which creates a nice market. If you have 12-, 24-month time horizon, as of right now be very, very, very careful. Very careful. That’s making people nervous. That’s why people go into sidelines. Consumer staples do good.

Frank Curzio: So, I see the dollar index at 19-year high or a 14-year high, I think it is. Man, I lose track with all these 19-, 14-, 30-year high things. And shit, it’s crazy. So, I’ve seen commodities go a little bit higher now. People get nervous. Let’s see what happens with the markets. Let’s see what the Fed says at Jackson hole. But, September’s going to be the key reading. Because, over the next three to four weeks into that meeting, we’re going to see terrible, terrible data. Data that’s clearly showing that demand is falling. Prices are going to get lowered and they’re going lower. And, I’m just hoping the Fed’s not going to continue to raise rates into that type of market. They got to be smart in that. We’ll see. Outside of those numbers, I wanted to cover the Palm Beach conference. This was great. It was amazing to see the younger crowd. And, amazing ideas. More importantly, how they trust us.

Frank Curzio: Now we go into these conferences. We’re building just building our brand and it’s not easy. It’s not easy in any industry. Even when I went to mining, I have Marin to thank for that, and Rick Rule, and you have to be there and going. Participating in deals. It takes a while, especially in that industry, which 90% of it is garbage. And, shit and scammy. In mining, where you have to really get up the ranks to focus, and have the inside on the good deals, the real people in that industry and not the scam artists.

Frank Curzio: And, I’ve done that industry by industry my whole entire life. And, you have to build that trust. You have to be in the room. You have to go to these conferences. That’s why I’ve been away three straight weeks. Holy shit, I’m tired. But, you have to do that, shows credibility. And not only that, the amount of money that we spent in commercial real estate, on the virtual side. The fact that we’re putting our money where our mouth is. We’re not just talking and saying, “Wow, this is a great industry.” No, it’s the biggest purchase we’ve ever made in the history of our company, and it’s virtual real estate.

Frank Curzio: And then, the security token and seeing how we’re in that world. How many people and these big investors, and real estate investors, who have billions of dollars. And, they talk about tokenization. I’m like, “Man. You’re so early to that trend.” And, not that I’m saying rush into that trend, but it provided a great vehicle for us to go public. To have a better valuation our company and use our stock as currency to really spend money in high growth markets, which we’re doing right now. The conference was pretty cool. Little unorganized, because it’s one of the first times they held this type of conference there, but it was expected. You have, again, the contacts. The WallStreetBets crowd and the people that have got in there. Just great people, by the way. They didn’t have anything to do with Bed Bath & Beyond, like I told you. That’s so funny. They’re like, “It was mentioned five X more on their website.”

Frank Curzio: It was mentioned five X more on every freaking platform because it was up 300% in a week. No, I mean, they would buy anything a long time ago and some of them sold out of it. But, no. That’s not what pushed that up 300%. They don’t have the power to do that. I’m not saying that as a bad way, but they were laughing when the person who runs one of the biggest parts of that blog on the Facebook side. Great guy. Really cool guy. I was, “Did you guys have a lot of influence on that?” He was, “No. Nope.” Weren’t really posting it too much. Yeah, you had some guys trying to post it and whatever. But, no. It didn’t come from, “Hey guys. Let’s all get together and have millions of people all pump the shit out of this and buy it.”

Frank Curzio: No. That’s Wall Street. That’s algorithms. Sorry guys. It’s just funny. But, getting in big with that, how big their crowds are. The huge influencers. They don’t let many people in their inner circles. They’re asking us to help monetize their names, their followings. Seeing them involve in NFTs around that brand. Providing special services for their best and most loyal followers. That’s what NFTs are about. It’s not digital art and a JPEG. Yes, there’s room for that. A couple of them cool, whatever. But, that’s not what NFTs are about. It’s just creating ownership, non-fungible tokens. It’s tokenizing that asset. And now, you seen fractional NFTs, which is basically what we did. It’s not an NFT. It’s a security token. We fractionized ownership. You sell of a small piece of your business to investors, just like you would do in the stock market, but it’s a lot easier. But it’s, how many of them are pushing the metaverse is incredible.

Frank Curzio: I want to be in a movie that we’re doing and I’m excited to launch this thing. Opening it out by next month, which is right around the corner, but really excited. Because, we have so much awesome footage and I want to show the world what I’m seeing, and it’s not video games, guys. The metaverse isn’t video games. It’s not all about kids just playing and hanging out. You’re going to see why every major retailer is going into this industry. You’re going to see why the wall gardens, which are who? The owners of the internet. The Facebooks, the Googles, the Amazons, the Microsofts, the Nvidias. They’re the biggest investors in the metaverse, right now. Why is that? Because, they know the days of them owning the internet are numbered.

Frank Curzio: That’s the biggest driver of NFTs. It’s the biggest driver of cryptos. It’s the biggest driver of the metaverse. The chance for everyone to own their own content, their identity, without having to share it. And, not getting all your data stolen and sold to somebody without even knowing. Now, we all know that’s where the money’s going in a market. That is pretty terrible right now. Well, IPOs have shrunk up. Worse IPO market, I think I’ve seen, since credit crisis. Probably even longer. SPACs are done. Try raising money for projects, nothing. Try raising money for good metaverse projects, you’ve seen billions flow into that. And, NFTs right now continue, from the biggest investors of the world, is the reason why. There’s a reason why. That meeting those people that influence is just one small part. I mean the amount of developers, holy cow. What these guys are capable of doing.

Frank Curzio: I mean, showing us that technology. And just for us learning about the technology, that’s got to power the metaverse. Unreal and unity, and what they’re doing with these engines. How they can have us build a 5 million commercial real estate property, that we bought. And by the way, the recent sale in TCG, which is a couple weeks ago. Two weeks ago, this is a new sale. A plot was sold for $7.5 million. $7.5 million. To put that into perspective, we own 12 of those plots, that we purchased for $5 million. You can do the math. If you want to listen to Mark Cuban, where sales of commercial real estate. Or, he didn’t say commercial real estate, virtual real estate is a worst investment. It will be the worst investment, seven, eight years from now. When the day happens, where we could transport all of our material from one place to another within metaverses. When there’s one metaverse or two.

Frank Curzio: But right now, there’s a fight with TCG. It’s one of the first open metaverses. Will they get it right? I hope they do. I don’t know. I’m betting on it. Everything else is a closed metaverse. You need permission to enter. All the money flows to those companies. This is open, it’s going to be one of the first, truly open metaverses. That’s why land’s going crazy. Even though land on other sites is starting to fall a little bit. You need permission to access it, build on it, own your own content. That brings the best developers right to your door. So for us, owning real estate, commercial real estate, in those areas. The stuff that they’re building, where we could lease our real estate to them. Let them build out our headquarters or anything we’re going to do. When it comes to real estate, give them a small equity stake, I could do that.

Frank Curzio: Just have them unleash their talent and imagination. Here, you build it. We’re going to take a big portion of those revenues until you get started. We could rework that deal, or whatever. But, that’s the access that we have. Unleashing innovation. Let these developers go nuts. See what they could do with this site. But, we have the real estate. And I can tell you, at least three people came to me looking to purchase that real estate, right now. Not the whole thing, but pieces of it. And, we’re deciding how to structure those deals and work with those companies. And, that’s when it gets pretty cool. It’s part of our company. So, stocks. We started a whole presentation, a monologue on stocks, and what’s going on. But, a lot of these people had those questions on stocks, and whatever. What I do know is, we’re starting to really build our list of the millions and millions and millions of followers, that these people have. And, trusting us and sending our information to their list, wanting to be a part of the movie. And also, be a part of investing.

Frank Curzio: And, that’s the name of the game. We’re a business. We have to add more names, at the lowest costs. And, we’re doing that. From people that we trust people, we want to work with and deal with. And, it’s a lot of fun right now. And, it’s pretty crazy and very busy. But, I’m always going to be there for you guys. Even on days when I come back in middle of the week, basically tired. So, going to have these podcasts, but really looking forward to expanding our position in this industry. And, it was a lot of fun because building that trust between these organizations. Be in a good position, right? 30 years of Wall Street. So, we have a lot of people with money trying to push into this industry, that talk to me and say, “Frank, we need somebody we can trust. We know there’s a lot of shit in NFTs.

Frank Curzio: We know there’s a lot of shit in the metaverse. We’ll follow you.” And now, for me going out there and find the right deals, especially in crypto. It’s hard to get people to trust you in crypto. And we have that, which is awesome. So, I’m going to bring the right ideas to everyone. Listening to this. Wall Street, everyone, being the middleman on this. Everyone’s getting in to Web 3.0, the metaverse, NFTs. And, a lot of these guys have great project ideas that are looking for funding, and help structuring their companies. Again, put us in a good position. So, I get more into the details of that I like. The people we met, the cool projects we like most. Our best interviews and do more than 25, I think, in two days. Get more into tomorrow’s podcast with Daniel, which will be a small part of that. And, we’ll talk about the markets and stocks and ideas, like we always do.

Frank Curzio: Also, if you’re a Crypto Intelligence subscriber, which means you’re a paying subscriber, one of our premium products. You’ll see a lot of new ideas, original ideas, being recommended the months ahead. Including the access and this is going to be really cool for you guys to fund some of these projects, that I’m personally putting money into. I’m not getting paid by these guys at all. When you get an equity stake. Just buying a token early. And no, those are utility tokens, getting actual stake equity stake in their companies. Going to be open to a lot of those ideas going forward, which should be a lot of fun. And, you guys could participate if you want. If not, no worries. But, these are going to be deals that I’m putting my own personal money into. I don’t get paid by the companies. And, a lot of these could be Reg A’s. We’ll see. If not, they might be open to credit investors. But, at least we’re going to be able to offer some of those from what I’m seeing right now, which is very, very exciting.

Frank Curzio: So, guys, that’s it for me. Questions or comments, and, I’m sure I’ll have a lot after this podcast, but the markets and the Crypto Conference we just went to, feel free to email frank@curzioresearch.com. It’s frank@curzioresearch.com. Really appreciate all the support. And, I want to give a shout out to my subscribers that showed up at the Palm Beach conference. Got you VIP tickets for free. Met in person. Really, really appreciate it. Javier, I’m going to give you a shout out, who was someone who sold his production company. And, he actually did the introductions of me when I was on stage. Because, he showed me a video and he did for ESPN with a thousand people there, and he was fantastic.

Frank Curzio: So, it was amazing. It was really, really amazing. I love meeting my subscribers. People in-person, it’s just really cool. And, I enjoyed that. So, that’s my favorite part of the job is meeting you guys in person. So, travel a lot. Getting those conferences going. Even getting our own conference going pretty soon, a Curzio Research conference. And, I know a lot of people been asking about that, Curzio One members. Going to start doing that, getting that off the ground. And, I know there’s COVID and stuff. But, traveling a lot. Getting a chance to meet a lot of you in-person. And, for me that’s the job. It’s awesome. I really, really love it. So, thanks guys. Showing up, meeting me, supported me. Love it. I’ll see you guys tomorrow. 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
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 Wall Street Unplugged podcast—ranked the No. 1 “most listened-to” financial podcast on iTunes—has been downloaded over 11 million times.

Editor’s note:

Over the coming months, Crypto Intelligence members will have opportunities to invest in some of the newest, most exciting projects in the Web 3.0 space—including ones Frank is personally investing in.

And right now, you can get a FREE year of Crypto Intelligence.

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