Frank Curzio 00:01

Hey, it’s going on out there. It’s Fed Day, September 16, and I’m Frank Curzio, your host, the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets. Mr. Daniel Creech, how you doing?

Daniel Creech 00:13

Doing well, sir. Another beautiful day in paradise.

Frank Curzio 00:15

You sure you’re doing well? I saw that Ohio State game on Saturday, buddy. I know you were throwing stuff at the TV, probably.

Daniel Creech 00:21

I was not. But I’m telling you, you know I go to bed pretty early. I’m kind of an old folk. I actually stayed up and watched that whole horrible ending. Then I laid in bed until like 2 a.m., somewhat upset. Oh well, bummer.

Frank Curzio 00:33

Yeah, heh.

Daniel Creech 00:33

Play to lose, you lose, Frank.

Frank Curzio 00:35

You know what, both of those things are second to me. It would have made a difference if Ohio State really blew them out, which it looked like it was going to happen before the fourth quarter. They scored like, you know, 3 touchdowns. But I don’t think it hurts Ohio State at all. I mean, even if they lose another one, they should make the playoffs. They’re one of the best teams. But if you get a lose, you lose early. But that was— that was a hell of a game. That was a hell of a game, from someone who’s not a fan of each of those teams. But also, NFL! Your favorite sport. But—

Daniel Creech 00:57

The wokest organization in the world.

Frank Curzio 00:59

Listen, a lot of stuff happened, including me losing both of my fantasy football leagues, which I was going and winning into because I have guys on Denver, and Denver got destroyed. But I gotta say, if you’re a Bears fan, you gotta be happy. If Seattle looks good as well. Baltimore? I mean, I’m not sold on Buffalo yet. Texans are a good team, but their defense was not good, and they could have lost that game pretty easily. The Chiefs are back. I mean, you could say whatever you want about Tom Brady, and he has a Super Bowl to back it up, and you have an argument saying he’s the greatest quarterback ever. But talent-wise, I don’t think— it just— what my home is capable of doing. I mean, just him on that field, it’s 11 or 12 wins. With him, it’s like 2 or 3, right? It’s just incredible. Like, every time they blitz him, he’s like, “You’re right.” I mean, you can’t blitz a guy. You blitz freaking Jalen Hurts, he’s like, “Where do I go? What’s going on? Holy shit.” You know, all these quarterbacks.

Frank Curzio 01:47

You blitz him, you die. You die, right? It’s the same thing with Brady, but man, he’s just incredible. Glad to have him back for the NFL. They actually— I mean, absolutely destroyed Denver. I mean, Denver’s— if I have to listen to those commentators, who was it? Troy Aikman? And I forgot the other guy. Just say that Denver is the best at every single thing. Every single comment. They had one of the best offensive lines. They have one of the best defenses. They have one of the best wide receiver cores. They have one of the best this, the best that, the best— they got freaking annihilated. Annihilated that game. The Giants! The G-Men! Which is pretty cool. They beat the crap out of the Cowboys. A lot of people, including myself, thought the Cowboys would be a lot better. They beat them handily. I mean, it wasn’t even close that game. It was, you know, maybe you could say close to a touchdown or 8 points in the fourth quarter, and the Giants really put it away. But they— they were in control of that whole entire game.

Frank Curzio 02:38

And they look good from every single level. Their defense, they just really look good. And how about the Jets?

Daniel Creech 02:44

About them, what they did.

Frank Curzio 02:45

J-E-T-S. They won for the first time in 25 years. That’s all they did. So they won a no, which is great. And I looked the stat up. The Giants and the Jets are 1-0 for the first time in how many years? How many years do you think?

Daniel Creech 02:59

25. You already gave it away.

Frank Curzio 03:00

17 years.

Daniel Creech 03:01

Oh, blah.

Frank Curzio 03:02

Both of them are 1-0. 17 years. Two big markets that are so big they have to play in the same stadium. In the worst stadium in the world that they won’t rebuild. They’re rebuilding every— they’re even rebuilding the Jaguar Stadium.

Daniel Creech 03:12

Oh, so.

Frank Curzio 03:12

You can’t really rebuild that stadium, which takes you— by the way, if you ever go to a Giants-Jets game, or if you ever go to watch anything at the Metal Lands, you’re watching it at MetLife Stadium, just prepare. Three hours. Least amount of time you’re going to get out of there. It’s like one major highway. You can’t even get out of that place. Just letting you know, and it’s a horrible stadium.

Daniel Creech 03:27

Best thing about a skeptic like me is you silly guys, they don’t even play in New York. That stadium’s in Jersey, right?

Frank Curzio 03:32

It’s in Jersey, yeah.

Daniel Creech 03:32

That cracks me up. So the only NFL team that plays in New York is Buffalo. Is that correct? That’s the only stadium in NFL.

Frank Curzio 03:41

I don’t know what team— yeah, it’s the only NFL teams.

Daniel Creech 03:42

Yeah, because the other ones— yeah.

Frank Curzio 03:42

Yeah. I mean, the Knicks play in New York and—

Daniel Creech 03:44

The only other thing I’ll say is the Giants.

Frank Curzio 03:46

Brooklyn.

Daniel Creech 03:46

I actually saw some of that game because I was at a dinner, and I didn’t realize, but Harbaugh is the new coach there.

Frank Curzio 03:53

Yes.

Daniel Creech 03:54

That as a—

Frank Curzio 03:56

Huge.

Daniel Creech 03:56

Growing up with family that are Bengals fans, I know John Harbaugh and how good he is because they would kill the Bengals all the time and ruin a lot of seasons. I will say, that to me is a great example of, like, you get a new manager, CEO, people matter. Harbaugh seems like a guy that will turn a franchise around. That’ll be interesting to watch.

Frank Curzio 04:14

Yes.

Daniel Creech 04:14

And I could care less about him, I’m just saying.

Frank Curzio 04:17

So Miami play. Disaster. Listen to this stat on Miami. I don’t know if anybody knew this about Miami. They have an NFL record 183 million in dead salary cap. That’s from getting rid of 2 and everything, that they had these, you know, guaranteed payments. 183 million dollars. That’s their dead salary cap. That means that’s what they paid. It’s dead. To put that in perspective, the active players currently on the team who are getting paid, that’s 104 million dollars. They’re paying more money for people who are not on the team than they are on their current roster. In dead cap. That’s how horrible that organization is. Except there’s one that’s worse, which is Cleveland, who may lose every single game this year if they keep the Shawn Watson at quarterback, because you just saw that they did not want to play for that guy.

Daniel Creech 05:00

Too bad the Jags can’t play Cleveland every year.

Frank Curzio 05:02

I know. I mean, the Jags. We don’t know if the Jags are good yet. Because, you know, if we played Cleveland, we started a team, we’d beat them right now, right? I’m not— it’s that bad because— and it’s not even talent-wise. It’s the quarter— you want to play for your quarterback, you want to play for your teammates, they don’t want to play for that guy. You saw that. They didn’t even care. It was disgusting. It was really disgusting. And of course, a Cleveland organization would they say, “Ah, we’re staying with Shawn Watson this week.” So any— whoever’s playing Cleveland just played.

Daniel Creech 05:28

It’s only one week, Frank. Don’t overreact.

Frank Curzio 05:30

No. This is not an overreaction. This is a guaranteed bet.

Daniel Creech 05:34

Oh, boy.

Frank Curzio 05:34

Holy cow. These guys are horrible. Anyway, imagine they win by like 3 touchdowns. I’m not even going to do the podcast next week. Anyway, NFL, great. Love it. Good start to opening season, which is awesome. Now let’s get to the fun part. We’re doing this just before the Fed is going to come out with their rate decision, which is likely, 90% chance that they’re going to raise by 25 basis points. You’re looking at the US and the 30-year yields at, you know, 19— close to 20-year highs. Daniel, what are your thoughts on what’s going to happen today? And again, you’re going to get this after the fact. And I kind of like doing this. We get comments on this sometimes. It’s, you know, it’s going to be a different market later, right? It’s up right now. It could be down a ton depending on what Wash is going to say. But it’s cool to really talk beforehand. This way we can analyze it tomorrow and Thursday’s podcast and see if we were right or not, instead of just, you know, playing Monday morning quarterback, which people love to do.

Frank Curzio 06:22

But what are your thoughts on what’s going to happen with the meeting? Because we know it’s 25 basis points hike, you know, that’s what’s priced in. But there’s a lot that could happen in terms of commentary, and that could be huge, huge market moving.

Daniel Creech 06:33

Absolutely. I think they hike 25 basis points. I’m not going to go against 90%. I’ve always said up until now, I didn’t think that they would hike. I didn’t think they would move. I thought that Wash’s plan was to get this task force up and running, and that would buy him time. And I still think he should do that. I think hiking is a mistake quickly, because everything that everybody’s so worried about right now with energy, and you can’t ignore that, war with Iran is skyrocketing energy prices. That is not going to get helped by the Fed rate hike. And when you think about it, there’s a lot of smart people out there that say, “Hey, when the Fed cuts rates, it takes”— and I’ve heard different numbers, Frank, and we’ve talked about this— essentially 8 to 12 to 14 months to work its way through the system. Well, again, that’s not going to help you. And what really bugs me here is that Wash is setting up about this inflation hawk. And a couple things I want to go back and forth with you here.

Daniel Creech 07:27

If Wash wants to really take away the punch bowl, because in my opinion, and I could be wrong on this, but Wash has essentially been saying, “Listen, the market has been spoon-fed by the Fed for too long, and that’s not the right way to run this organization.” The best way, Frank, to come out there and say there’s a new sheriff in town is when you have 90% odds of a 25 basis hike and you don’t come out and you don’t hike. Now, the other two things, and I’ll turn it over to you, is, A, obviously it matters to a huge degree on what Wash says today. And also the dot plot. That’s supposed to come out today. Wash did not do the dot plot last time. If he does it this time, I’m going to be real pissed off tomorrow, Frank.

Frank Curzio 08:08

The dot plot, that’s so funny.

Daniel Creech 08:09

Yeah, well, it’s ridiculous.

Frank Curzio 08:10

When you look at the dot plot and what they predicted, like even when they said inflation is transitory, it’s just so funny. They were like, “It’s going to go— rates are going to stay low forever.” It’s just, it’s so bad when you look at the predictions. It’s not useless because stocks are going to trade on that. But here are my thoughts. If he comes out and says no hike, the Dow’s down 30%. I mean, the Dow’s going to lose 1,000 points, right? The 10-year is going to march to 5.25% if he doesn’t cut. Because that will be totally negative for the market, and you’re going to see the 10-year spike. So, because that’s not what is right now being forecasted. A 25 basis point hike, again, widely respected. Two-year is, what is it, like 2.4.6, I think. So it’s well above the 3.75. So it adjusted over the past week or so, especially since Jackson Hole, you’ll see that. But it adjusted to where, you know, we’re expecting it’s already priced in, right? The markets are pricing a 25 basis point hike because it’s well above the Fed funds rate, 3.75%.

Frank Curzio 09:06

And if Wash comes in and says, “Hey, you know, we’re expecting two rate hikes for the rest of this year,” I think, you know, it’s, you know, not really market moving. And I think it’s going to be short-term and probably the best case. However, if he comes out and says, “Look, we need to control inflation,” and, you know, after the rate hike, and we’re going to see more hikes into next year, that we could have a very steep sell-off of 3% plus at the end of this meeting. I don’t think he’s going to do that. I think he knows that. If not, he’s going to learn a quick lesson on it. But I think it’s kind of status quo. That’s what the Fed usually does. You know, those predictions are usually right. That if they weren’t right in the prediction markets, the Fed would be getting it out to their normal outlets, which is, you know, the Wall Street Journal is one of them, and several others, which is fine, right? They want to, you know, they want to let the market know what they’re doing. They don’t want to have huge surprises because it impacts the global economy.

Frank Curzio 09:57

Everyone. If it’s, you know, if they don’t raise, if they do, what’s not expected. So it’s important that just to, you know, to be transparent is very, very important with the Fed. So I think it’s kind of like 25 basis point hike, obviously, and then him saying, “Hey, you know, we might need a little bit more to control inflation.” However, a lot of comments feel like what you do, Daniel, is saying, you know, we’re not really seeing inflation. Like housing’s down. A lot of this stuff is down. We look at the last outside of, you know, the CPI was okay. The PPI was high. Unemployment showed, you know, inflation, but that’s for this month. But the last two months, we showed, you know, a lot of the stats in the PPI, CPI showed moderating inflation. Now, if you’re looking forward and you throw in oil prices, let’s be forward looking for the first time in the Fed’s history as an organization. Let’s be forward looking and not look in the past, right? Because if you look at oil and what oil prices are, and of course, this is going to be temporary.

Frank Curzio 10:52

We told this is temporary for the last, what, I mean, look at the chart of oil prices since, what, what is it? June, July. I mean, this is supposed to be temporary. It’s supposed to be temporary. It’s not temporary anymore, right? So we’re seeing these prices go higher. And when I say it’s not temporary, maybe, I mean, what happens if Trump says, “Hey, we have an agreement.” No one’s going to believe him because we had seven agreements, eight agreements in a row. Nobody’s going to believe him. And you’re not going to see this massive, drastic— maybe you see oil come down to 90, 87. Still very, very high. But getting back to the 70s, even the 60s, man, do you see that happening anytime soon? I don’t, with everything going on. So, and war’s escalating. I mean, we just posted on it. And, you know, if you look on our X account, again, over 500,000 views just talking about, you know, oil prices going higher and diesel prices absolutely through the roof. We’ve been reporting this, and we have so many people following us right now, just to the point where, you know, just, I think we’re up to 10 million impressions just this month.

Frank Curzio 11:44

Well, approaching 10 million impressions. Might be over that, Chuck. I’m not too sure if we’re over that level now, but it’s insane. But you could see how everybody now, you know, based on the traffic and what we see, and you can monitor this stuff, what we do at X account and what people like to hear and what they’re focused on, oil is it, right? So what’s happening right now, Daniel, I think people need to understand, is there’s no playbook. I think there’s three times in our history, and just one time over the past 30 years, where we’ve seen a 10-year over 5% where oil price is over $10 a barrel, $100 a barrel. Think about it. Higher prices cures higher prices. When you see higher prices, usually demand falls off because people are like, “Hey, I’m not going to pay that much,” and usually it cures itself. It hasn’t, right? So you’re seeing this massive drive in oil prices, which is turning the market upside down. And you have economists saying, “We have no inflation because housing’s going down and other prices are going down.” And others saying, “Listen, oil is going to force these companies to raise prices considerably.” And if you want to look at airlines, you want to look at, you know, just energy prices, heating oil, good luck.

Frank Curzio 12:41

Holy cow. That hasn’t even hit yet. But look at what diesel prices are up around 40% in the past 40 months, which impacts every business, and they’re going to be forced to raise prices. So we’re going to see higher inflation. Whether you want to see it now and look at the past stats, we’re going to see higher inflation because diesel prices, anything that you buy in a store, is driven there by trucks. And you look at a— this is a commodity. I don’t think people understand this. This isn’t a stock price. This isn’t one little thing. This is a 40% increase. Not a product. It’s something that impacts every consumer. It’s something that impacts every single company across the board. So, you know, when I see this and people saying it’s temporary, be careful. Because ex-Fed Chairman Powell lost a lot of his credibility suggesting inflation was transitory in 2022, and he was wrong. And he could say, “Well, transitory is 17, 18 months,” when his definition of transitory was a couple of months, and he was wrong.

Frank Curzio 13:30

So the reason why this is different this time, because it’s a perfect storm. And we’re not just looking at US rates. Rates are surging around the world. You look at Japan’s 10-year just hit 3%, first time since 1996, to 30, 40-year record highs. The UK, 10-year yield high since 2008, 30-year high since 1998. France’s 10-year yield, 2008 levels, last time we’ve seen it. Germany.

Daniel Creech 13:51

The French.

Frank Curzio 13:51

Germany’s 10-year at its highest since 2011, right? So all these central governments, what are they doing? They’re all raising rates at the same time, and we’re last to the party, which is not good. I think it hurts our credibility with the Fed, especially if he decides not to raise several times this year, because that’s going to be an indication, “Hey, this is Trump’s guy.” And we know Trump wants a lower rate, especially heading into the midterms, which is way, way, way, way too late for that. I’ll get more on that in the politics on the side, because we’re going to lose, you know, when you’re looking at Trump, you know, and Republicans, you’re going to lose the Senate and also the House. The House is a given. You’re going to lose that. But if you look at the Senate, look at these odds. I mean, Joe, flip that around. Go back like a month and a half. So this is the Democratic Party almost at 60% going to win the Senate, not the House. But if you look 40 days ago, that was completely reversed.

Frank Curzio 14:39

And then it was even a few weeks. And now, right now, where oil prices are and everything going on, holy cow. I mean, this is completely reversed. So they have almost a 60% chance of winning. Again, the Senate, that was, you know, the House is even higher, over 80%, I believe. But, you know, another thing too, this is happening when the world is carrying more debt than it’s ever carried in its history. And when you put that in perspective, global government debt is now 94% of world GDP. The IMF, not the best at predicting stuff, expects it to 100% by 2029. So if you want to put this in perspective, I thought this is one of the most amazing stats that I’ve seen. Guys, mark it down. Stop posting it everywhere. Global governments are now spending almost 3% of world GDP on interest payments alone. We’re subtracting 3% from global GDP on interest payments alone. That’s how much debt we have. That’s up from a full percentage point from four years ago, which is insane. So high interest rates are crushing us.

Frank Curzio 15:38

We cannot go this high because we have so much debt. And at the same time, what are we seeing, Daniel? We’re seeing one of the biggest, not one of the biggest, the biggest spending booms in history of the world when it comes to AI data centers. The problem is when it comes to these hyperscalers, they don’t have the money in their pockets to build the necessary infrastructure needed for the next few years, which sounds crazy because some of these companies have trillion-dollar market caps. But hear me out. JP Morgan is estimating roughly 5.5 trillion AI data center investment from 2026 through 2030. That’s not a lot of time. It’s four years, right? That’s based on their comments and hyperscalers saying stuff in the media, how much they’re going to spend. However, out of that 5.5 trillion, only 1 trillion is covered by free cash flow generation over that time. So what does that mean? It means trillions are going to have to be raised through the bond market, which is not cheap to do anymore.

Frank Curzio 16:24

I mean, some funding is going to come from leveraged finance, alternative capital, but even these outlets, even when it even comes to equities, right? If you’re raising money through the equity markets, are influenced by interest rates. People are going to want better deals, right? So that cost for a dollar is rising, right? For each dollar, which means if you have rising yields, they’re going to raise the cost to grow this infrastructure, which means mathematically, hyperscalers are going to slow their spending as each dollar they spend won’t get them what they got nine months ago, 12 months ago, two years ago. That’s a big deal since AI spending has been what? I mean, it’s not even debatable. This is a driving force of the global economy over the past three years. If you don’t think so, just look at the market caps of Nvidia, Microsoft, Amazon, Google. Nvidia, their market cap in 2022 is 360 billion. It’s over 5 trillion. Apple, 2 trillion in 2022, close to 5 trillion today. I mean, I’m throwing Apple in there, not the biggest beneficiary, but a beneficiary of AI.

Frank Curzio 17:18

Google, 1.1 trillion. It’s 4 trillion today. In 2022, Microsoft, 1.7 trillion. It’s 3.6 trillion today. And you look at Amazon, 856 billion in 2022. It’s what, 2.7 trillion today. And so you see in what AI has done over the past few years, not just for these companies, the massive spending boom, these guys generating profits that are unbelievable, record everything across the board, even margins. But we have to realize, continued rising yields, if this continues or even stays at these levels, it’s going to crush the world economy. So I’m hoping these economists are right saying inflation is just transitory, it’s going to come down, oil’s temporary, because we can’t, the market has to adjust here. I mean, it’s very easy to see from a numbers perspective. It’s also common sense. And I know earnings growth has been huge. Over 30% earnings growth, massive earnings growth, the highest in several years. You know, another major factor driving the markets, but that’s going to change if hyperscalers are going to be forced to cut back on spending.

Frank Curzio 18:16

And they will because they’re going to have to take out debt at much higher prices. It makes sense, right? Their spending forecasts are for interest rates when they were 4.5 on a 10-year, right? They’re much, much higher now. So, and even lower than that a couple of years ago. And if you’re looking even from the consumer side and what companies, I mean, consumers, inflation surging again, oil prices through the roof. Again, I don’t agree with so many of these economists saying, “Okay, we’re seeing inflation come down, so we don’t have to have the, you know, the Fed raise and, you know, at all, but they’re probably going to raise anyway.” Listen, get ahead of the curve. I mean, energy again, it’s a cost that impacts every company, every person in the world. And if you’re looking at the, “Hey, that strong earnings growth is going to hold.” Daniel, what did JP Hunt say today, right? We just saw that comment. I mean, it’s pretty crazy, right?

Daniel Creech 18:59

Yep. They lowered Q3 guidance by 5 to 10% on the earnings per share because of higher fuel costs.

Frank Curzio 19:06

So CEO said the company is also seeing, and this is quoting, some of the most radical abnormal swings in fuel prices that it’s ever seen. This is a very old company. And record high diesel prices, which are causing at least a $10 million headwind. Okay, this is for the trucking company. So what are they going to do? Everybody’s going to raise costs across the board. Their costs are going to be raised. It’s going to pass down to the consumer of paying more. If they don’t pass it on to the consumer, their earnings are going to go lower and they’re going to warn. And what happened? Put up JP Hunt’s stock price. It’s down 13% on this news. Granted, it’s had a hell of a run in the past 12 months, probably almost doubled. You know, but you look at the past four, five months, it’s been rather stagnant. However, there’s companies in your portfolio that are doing very, very well. And oil, diesel, this is going to be, it’s a significant input cost where they’re going to have either lower their earnings or hope that when they pass off to consumer, the consumers are going to pay.

Frank Curzio 19:56

But this is one of the large trucking companies that delivers all the stuff saying, “Hey, we’re going to lower our estimates.” So they, you know, again, this is a headwind for them. Let’s see. It’s going to be a headwind for everybody else, which again, is common sense. So if you want to put interest rates, and this is the best thing I could do for you guys, so you get a better understanding. If you’re listening, this is from stocks. It’s going to filter down to everything. But for all of you mom and pop retail investors, listen to this. From a consumer level, pre-2021, you get a 30-year mortgage down under 3.2%. Right now, the 30-year mortgage just hit 7.17, 7.2%. If you take a $500,000 mortgage at 3.25% over 30 years, you’re able to do that for pre-2021. And most of the mortgages right now are below 3.5. So if you’re going to get a house and you’re going to move and you’re going to take out a mortgage, it’s going to be 7% plus right now. So a $500,000 mortgage at 3.25 over 30 years comes out to about 2,175 a month.

Frank Curzio 20:53

If you take the same loan 30-year, but at the 7.17 rate instead of the 3.25 rate, that’s $3,400 a month. It’s another $1,200 a month payment just because of an interest rate that comes directly out of your pocket. That is massive. So to put it another way, your home on the first one, right, with lower interest rate would cost you $785,000 to cost a loan. Well, at 7.17 rate, the total cost of your home is $1.21 million. So you’re paying $427,000 more over the life of that loan in 30 years on a $500,000 loan. Nobody is buying homes right now unless you’re cash rich, because you can’t move sideways from a 3.35, 3.25 mortgage and then just go someplace and transfer it over because it’s going to be 7%. It’s impossible. It’s unaffordable. So housing is a monster driver of this economy, which doesn’t seem like it is because we had this massive trillion-dollar spending boom in AI, right, that’s driving so many companies, so much infrastructure.

Frank Curzio 21:56

Even companies are using AI. You’ve seen profit margins at record highs, near record highs, right? So you’re not really seeing it, but now you’re taking housing off the table and now you’re slowing down the AI trend. I mean, which is probably a good thing because, you know, I’ve been researching, you know, power grids and operators. I mean, again, it’s not like anyone’s doing this except for me because it’s kind of boring stuff unless you’re an analyst in the industry. So you have PGM, you have ERCOT. ERCOT is the Electric Reliability Council of Texas, ERCOT, right? It was created in 1970, responsible for overseeing the reliability, reliable transmission of electricity to the power grid. Serves more than 26 million people in Texas. Supplies more than 105 gigawatts and 52,000 miles of high voltage systems in Texans. Now, what’s happening? Everybody wants more electricity. The hyperscalers, we need more. And they placed orders, this is according to Jefferies. The request for power for ERCOT by hyperscalers and AI are almost 2X the installed capacity.

Frank Curzio 22:51

And this is through 2030, meaning they have to double the capacity. Build new transmission lines, electricity infrastructure by 2030. She’s only four years away to meet demand that the hyperscalers want today. Their current max capacity for ERCOT is 250 gigawatts. So they need to increase this to almost 500 gigawatts. The problem is it takes more than five years to build this infrastructure. So it’s going to crack. So we’re going to see blackouts in Texas, which we predicted. Again, if you do the math, it’s based on math. You’re going to see it. It confirms our thesis from three years ago that there’s nowhere near enough electricity to power the AI boom, which is the real reason, you know, they probably want to slow down. They don’t want to slow down because of safety issues. And you could have fun with that with Sam Altman. I mean, that’s another thing. But you’re looking at all this stuff come into play. There’s a lot of risks in this marketplace where you’re pulling the growth drivers that drove our economy out.

Frank Curzio 23:39

You don’t have housing anymore to participate. And yet you have rising prices where more and more companies are going to warn. We’ll talk about even more companies in a minute. But, Dan, I want to get your thoughts on this because this is pretty scary. When you’re looking from a risk-reward perspective of where stocks are, where you’re looking at very high earnings growth, a lot of companies said not only did they raise earnings and they beat earnings, they raised guidance. Now you have companies that are probably going to lower guidance because of higher fuel prices, higher diesel prices, which sets up for a JP Hunt, you know, down 13% in a day. If these companies are going to come out and warn, they’re warning ahead of time right now for what they’re going to report a couple of months from now. This is just a start.

Daniel Creech 24:15

I agree on that. And, but again, that in what you’re referring to, the silver lining that the people that want the Fed to pause or stay paused are saying that core CPI, which is not part of reality because core strips out food and energy, which we pay for every day and fuel the most, is the lowest since 2021. That’s the big headline out there that says, “Oh, you can pause.” And then they, but you can manipulate data and make it look however you really want to. That’s the key thing there. And I agree, man. You point out some great risk. I just, and again, I’m not saying you’re taking the other side. However, the Fed hiking basis points or rate hike today isn’t changing any of that. The only thing that’ll change the price of oil is the war with Iran and/or the logistics of the oil trade, let’s say. You know, we can be at war with, well, I hate to say this so nonchalant because of the serious of the situation. You look at Ukraine and Russia. Nobody talks about Ukraine and Russia anymore. You know why?

Daniel Creech 25:11

Because it wasn’t impacting everybody’s lives. Now that’s picking up because they’re attacking their energy infrastructure. That’s a game changer. And again, I don’t mean to, you know, talk so easily about that. But the point there is that the Iran war with the US, just like forever wars with Iraq and Afghanistan and all that, Frank, we fought those for what, a decade or more? And nobody cared, essentially from an economic standpoint, I mean, because it didn’t impact prices like that. The biggest elephant in the room is you got to either get the global, you have to resolve the war with Iran, or you resolve the logistic jam up, which is proving to be very difficult. And we’re still doing the reserves things. The strategic release of global reserves is a major issue because we are still doing it in lieu of what is happening. And so you see prices, as Frank is warning about, you see these oil prices continue to go up and up and up. Heaven forbid it escalates and you run into an issue with strategic reserves or some logistics behind that.

Daniel Creech 26:12

So yeah, I agree with you. There’s a ton of risk there.

Frank Curzio 26:15

And listen, the markets are always forward-looking. What’s going to happen in the future? That’s why if a company misses on earnings, it’s not so much of a big deal if they raise guidance. However, a company that blows out earnings and says our guidance and lowers that guidance, that stock’s going to get hit. They don’t care what happened three months ago. It’s more about the guidance. So it’s the forward-looking statements is not exactly what a 25 basis point hike is going to do, which again, if filters through the economy, it takes a long time for something like that and it’s very, very small and may, but it’s the anticipation how companies are going to react and what the comments are going to be. And that’s going to be, that’s going to be the driver of the markets. If he’s like, “Look, you know, we really don’t see too much inflation, we’ll monitor it. We could see another rate hike or two this year or into next year, that’s fine.” But if he’s like, “Hey, we’re worried about inflation,” you know, I don’t know if he’ll say that. And we can get more hikes in three going into next year and first three, six months.

Frank Curzio 27:04

That could be a disaster for the markets. Let’s see what happens going forward. But I think it’s just status quo and the market does okay.

Daniel Creech 27:10

I think that’s a good point. There is no way worse comes out there and it, well, let me say, if he comes out and gives any kind of forward guidance at all, then you can’t trust him because that’s a complete 180. And if he’s already doing 180, I just sincerely hope that he’s not dumb enough to think that he’s going to win over the media. I could not imagine how much pressure and everything is going on. And this is coordinated. We don’t, there’s no coincidences in our life, people. If you think so, I just agree, disagree, especially at this level. You have such pressure from every media outlet and all this kind of stuff. I mean, thank goodness for AI destroying the world so oil doesn’t get blamed for it, Frank. I mean, that’s the only saving grace there. However, if Warsh thinks that he’s going to get on the good side of the media or anything, he’s a bigger fool than deserves to be in that job. We’ll see.

Frank Curzio 27:56

Yeah. And talk about the AI thing and slowing down. You know, the big story out there, it’s safety. It’s going to destroy. We talked about that last week. You know, it’s going to end humanity. Listen, it’s a good thing they’re slowing down because they just, they can’t build electricity fast enough for AI, right? It’s probably not the worst thing in the world. And they all know this. They all know this. I mean, they can build models, whatever they want. They need electricity. They need more power. They don’t have it. There’s no place they can get it. So that could be available for a very long time. And a lot of that is politics. But then to come out and be concerned and say, “We’re worried about safety.” And all the people who are jumping on the safety thing is hilarious. It’s fucking hilarious. I mean, we’re looking at, do you really believe Sam Altman, who lied and got fired by his board about his control of OpenAI, gave false statements about the safety process in the past, right? Who turned away from OpenAI being a nonprofit to profit-driven, whose sister filed a federal lawsuit alleging childhood sexual abuse, whether it’s true or not.

Frank Curzio 28:57

But you just throw in with everything else, former colleagues that work with him raise concerns about his credibility that left tons of them. I mean, there’s a massive list of it. It’s like one or two guys. I mean, you don’t leave a company that’s one of the fastest growing companies on the planet ever in history other than Anthropic. One of the fastest companies. I think I saw a stat of how much, I forgot what it was, 20 billion or 50 billion. I forgot the number of revenue, but they did it in nine years compared to Amazon doing it in like 25 years. I mean, this is the type of growth that we’re seeing for these companies. Like people don’t leave that because of the CEO when you see that growth because it’s a massive fortune for them. They left. That’s how much they hated that guy. I mean, so if you think that guy’s worried about the safety of the people in the world, I mean, and he’s postponing his IPO because of safety concerns, no. Sam Altman’s not postponing OpenAI IPO from this year to next year because of safety concerns. It’s because growth is slowed dramatically compared to Anthropic and the institutions who invested $122 billion in Marsh, their latest funding round at $852 billion valuation, are going to see negative returns if they IPO this year because it’s slowed dramatically.

Frank Curzio 29:53

And they have to find a new way. And they will find a new way. Just like cloud, just like data analytics, right? Just like all these companies, all these major companies have, you know, just found ways within their business to find growth. And even the hyperscalers and now it’s AI, right? So what’s the next biggest growth? You’re looking at Meta. Hey, they might have found it, right? Meta has now we have agentic AI directly for the consumer that’s going to do a ton of stuff for you. It’s not going to use like 10 of these different programs and language models. No, you can use this. It’s going to factor in. It’s going to help you use all these things and you can use it personally. That’s a game changer, right? How do we generate more revenue and service and generate more money out of, you know, millions, hundreds of millions, billions? If you’re looking at Meta and Google users, right? So they’ll figure it out. They don’t have it now, but they can’t raise money to evaluate. They’re not going to get an $852 billion valuation.

Frank Curzio 30:46

You’re crazy. You’re nuts investing in OpenAI near this valuation. It’s like a SpaceX scenario. I mean, it’s crazy. I mean, you got to come out and the time these guys IPO, really, you’re going to sell that to the retail public at that valuation when you’re seeing dramatically slower growth, especially, you know, compared to Anthropic? And this is the guy you want to listen about safety concerns? Well, how about Anthropic? I mean, creating fake profiles, sending private messages to pressure humans to accept, you know, malicious code. It’s trying to trick hackers. Why would you do that? Like, you want to recruit hackers, make sure nobody could ever break into your systems? I mean, there’s a lot of crazy stuff here. And then people leaving Anthropic. Like, these are the people that now really, do you really think they’re concerned about your safety, about my safety? Come on, guys. I mean, you’ve been around long enough. Google and Meta literally steal your personal life and sell it to other people and have targeted young women, teenagers, knowing that the technology caused them anxiety, depression, right?

Frank Curzio 31:40

On purpose and saying, “Full, what we’re doing is we’re going to continue to do this,” right? They don’t care. Nvidia, Apple, largest companies that plant you, do they care about your safety? I mean, I’ve been in this long enough. Money drives everything. Politics, corporations, generational wealth, legacy among the elites, that’s what they’re concerned about. They don’t care about the safety of people. You out of your mind? I mean, this slowdown is more about, “Hey, we can’t really build it anyway because we don’t have the fucking electricity. So let’s just blame safety.” And Sam Altman is the face that you’re doing this with? Are you out of your mind? That’s the guy? It’s like Jack the Ripper. Say, “No, you know, everyone should be nice to the people.”

Frank Curzio 32:12

Jack the Ripper.

Frank Curzio 32:12

Are you kidding me? I mean, for me, when I look at that, it’s hilarious. I know you have more, I think you hate that guy a lot more than me, but yeah, just the credibility. Just it’s not that I hate anybody. It’s the credibility behind him. Like, you’re really concerned about our safety. Come on, man. Give me a break.

Daniel Creech 32:27

Well, they’re not. I mean, I couldn’t agree with you more. They’re not concerned about that. This is a big show. And again, listen, for all you guys out there, haters, daniel@curzioresearch.com, you can say, “Oh, you’re not a scientist. You’re not an engineer. You can’t understand this.” I am not, but I am a common sense guy, Frank. Listen to this. Put yourselves in those Weasel shoes, okay? You can pick whichever one you want, OpenAI or Anthropic. Pick your Weasel, Frank. Here we go. You two are responsible. Now these are AI figures. So, you know, it can’t be wrong. The Terminator is telling us. Basically, you have OpenAI and Anthropic represent about, I’m rounding, 50% of all the revenues for your cloud services, Google, Amazon, and Microsoft. They also represent 50%-ish, some are higher, some are lower, of all the future backlog, remaining performance obligations, et cetera. To your point, they don’t have the technology. We can’t build out the electrical grid and situation as fast as we want.

Daniel Creech 33:25

Totally agree. The other thing they can’t control is the price of tokens. OpenAI and Anthropic are in the business of selling token usage to consumers, businesses to use their proprietary models, which are in fact great, and I have no doubt, which are and can do harm if you use them and all that kind of stuff. However, you’re in business and the key product you have to sell to the world to justify not only investors’ appetite right now to raise money, and it’s okay to be a growth company and lose money. We’re not attacking that. The future payments that you’re on the hook for, you have to keep ramping up this product. The pricing power of that product is getting commoditized, which means it’s going down. So these guys have to sell a product that is becoming cheaper and cheaper or harder and harder to sell to the consumer in order to justify all these investments and all this cost.

Frank Curzio 34:16

Along with much more competition coming out, where you’re going to have different choices.

Daniel Creech 34:19

Exactly. Along with competition. That’s a huge thing. Now they have the answer. Altman come out with this new speaker that basically is getting sued by Amazon and Apple for stealing all their proprietary information to come out with a sneaker. Who’s the Johnny guy that they stole from Apple or poached from Apple or?

Frank Curzio 34:35

I forget. Yeah.

Daniel Creech 34:36

The Beats guy, right? Dre and whoever the other guy is. I know he’s a big wig in music. I’m not putting him down. I’m simply saying, you know, they went out and paid this guy all this money to come out with this new kind of product. And you’re right. They have to figure it out. But again, why isn’t the media that wants to talk about the Terminator not showing the Bloomberg chart that shows token costs plummeting? That’s a key. And to your point, there is nothing new under the sun, people. You want to know one of the first regulatory captures by big business? Go read if you want to be a nerd about the railroad industry. Go back to the late 1800s and see what was passed and what was going on and how the railroads conglomerated with everybody and tried to do. It’s the same song and dance. And I’ll end with this. I’m pissed at President Trump. I don’t know if he listens to this or whatever. He came out and stole our thunder, Frank. He came out and now nobody’s going to pay attention to it because he’s so polarizing.

Daniel Creech 35:27

He was spot on and said, “Oh, the new AI threat is just like global warming. You know, we’re all going to die.” And now nobody’s going to pay attention because he already hit the nail on the head. That pisses me off.

Frank Curzio 35:35

Yeah. Now, how do you relate this, right? So we have personal feelings about this and you might have different opinions. And before you shut the podcast off, if you’re on the wrong side of this going, “Ah, this is bullshit, whatever.” This is important to stocks. All right. This is how we’re going to relate it. And this is why it’s important. And we’re talking about it. And why it’s such a big deal. Because sentiment drives spending. It drives economic growth. Okay. If people feel like they’re making more money or they feel like their job is great and they’re not going to lose it, they’re going to spend more money. And that’s what’s going on with some companies you’re seeing. They’re saying, “Hey, our consumers are great.” But sentiment drives spending. Okay. So right now, people are seeing and feeling mortgage rates are higher. And they’re reading about the negative effects that happen when the 10-year rise is about 5%. Because now it’s everywhere. And we said that that was going to happen three weeks ago and stocks have been selling off pretty heavily. They’re seeing and feeling higher gasoline prices.

Frank Curzio 36:22

And man, they’re about to see much, much higher heating prices, which no one’s really talking about. We’re talking about oil. We’re talking about gasoline. We’re talking about diesel prices, right? We see heating prices. Holy cow. And the winter’s coming. I feel like I’m part of Game of Thrones. Winter’s here. They must have said that five million times. Winter’s here. Winter’s here. Here they come. Winter’s here. And now they’re hearing AI is about to destroy the planet. It’s going to destroy the world they live in, which is going to push more and more state governors, if they want to get reelected, into slowing and halting further AI infrastructure builds. So not good times when it comes to the market. I mean, gold, silver should do well. You know, I would say, you know, crypto on this pullback, it was widely expected to me. I know that vote was close, but it was widely expected where you’re looking at the Clarity Act, we’ll get to that in a minute that that wasn’t going to pass. But I still think, you know, it will pass next year.

Frank Curzio 37:08

However, you know, we’re saying, you know, Bitcoin’s a good rotation to healthcare. Higher rates for longer are definitely going to help the banks, right? They’re starting to really do well. So it’s not everything that’s going to get crushed, but be careful owning momentum names, high price, expensive AI names. If you’re an individual investor, you should have money into money market accounts or into bonds. I mean, now it’s a real alternative. I mean, money markets are at three and a half to 4% interest is a very great return in a shitty market. I mean, that is an alternative. That wasn’t an alternative a couple of years ago. For a very, very long time, it was a credit crisis, right? We load rates to zero and said, “Holy shit, we’re not getting inflation. Let’s keep it at zero forever.” This is what happens when you try to do that, right? So eventually, it’s going to come back to roost, but this is what we’re seeing right now. We’re seeing a market that’s very, very, very, very, very dangerous right now.

Frank Curzio 37:57

And from a risk-reward perspective, earnings are keeping them high, but earnings and that earnings growth is going to slow. We’re seeing it. And that’s what happens when you have rising energy prices and a rising five-year, which again, it’s only happened three times in the history of the markets from what I study going back, I think, to like the ’50s. But once in the past 30 years, when we see this, usually we see prices come down when, you know, rates go higher and the rates are higher, that’s why the Fed raises to slow the economy, but you need to slow this economy. That’s why raising short-term rates makes sense. It’s going to bring down a long-term rate because the Fed is signaling, “Hey, we need to slow down the economy a little bit because we’re going to see this inflation.” But get ahead of it. I understand there’s some things that are not showing inflation and you’re right, but all economists look at data in the past. They’re not good at predicting the future. They’re fucking horrible. Look at the dot point. Horrible. I mean, these guys, forget it. Forget it. Oh my God.

Frank Curzio 38:42

It’s horrible, but they’re great. They’re great data. They look at stuff for past years and that’s how they try to figure what’s going to happen in the future. But being able to predict something in the future, they’re just horrible at, right? Because you need to know consumers and sentiment’s going to drive that. And right now, sentiment is very negative. It’s very, very low because of everything that’s going on because they’re feeling the higher prices. And now the main growth driver, most people are like, “Hey, I don’t want, you know, I don’t want these things in our backyard.” I mean, they don’t want anything built anywhere near them. It’s just crazy. Just ask them, “What do you want next to you?” Nothing. Nobody. I want the whole planet to myself. But anyway, they don’t want data centers. So another thing to look out for, Dan, before we go off this topic, is look out for food prices, man. I mean, fertilizer stocks, you bring up CF. CF is starting to move higher. I think there’s another level where this thing goes to 150. Planting season. Winter planting season is coming.

Frank Curzio 39:28

Winter planting season, which is, you know, a lot of vegetables, spinach kale, broccoli, cauliflower, wheat you got there, carrots, a lot of this stuff is being planted now. And fertilizer prices because of the Straight Home Roost is still closed and doesn’t look like it’s going to open anytime soon. One-third of fertilizer comes from the Straight Home Roost and they’re not passing through. And I don’t think you’ve seen passing through for some time. So you look at fertilizer prices are going to go through the roof. CF is one of the biggest. I think Urea, see this chart. I think it’s going to break out to another level and go to 150. We saw the ups and downs. We picked it on the way up, which we did good. And then it came down on pretty much saying that, “All right, the straight’s going to open.” We know that’s not going to happen right away, but look, now it’s planting season. So these food companies have to pay for this. And you’re going to see food prices surge. And not just because diesel prices are up 30, 35% in the past 40 days, but you’re looking at fertilizer are going to skyrocket.

Frank Curzio 40:20

And we mentioned JB Hunt. Look at what Nestle said. This is this week. It’s raising its prices, changing patching to deal with surging energy prices. And they said, “We’re passing these prices on to consumers.” They said that. Look at Conagra, Campbell, McCormick, all of them said they’re raising prices. Hershey said they’re raising prices by double digits because of elevated commodity prices. We just saw Apple raise prices, right? Because of memory on their phone. I mean, try buying that foldable phone. I mean, it’s going to cost $23, $24, $2,500. Holy shit. I mean, these phones used to cost $1,200. Now what are they going to do? I mean, that’s real freaking money. And on top of this, you’re looking at wheat prices increasing 45% year to date. Rice is up more than 60%. Sugar up 27%. Corn up 20%. Soybeans up 25%. And all these economists are like, you know, “Oh, we’re not really seeing inflation.” And I don’t know why the Fed, you know, is going to raise because of inflation. We’re going to see it.

Frank Curzio 41:10

We’re seeing it. The companies are fucking telling you in plain English, “We’re going to see it. We’re going to see it.” JB Hunt, we’re going to get crushed on this. They’re telling you, “Stop thinking about it. Just listen. Use your common sense. It’s a mathematical certainty, right? That’s what we’re going to see going forward.” I just think we think about this.

Daniel Creech 41:28

And then they’re going to say a core CPI where you cut out food and energy.

Frank Curzio 41:30

You know, it’s so like we try in a world of conspiracy. Like we just can’t look like that woman who strangled her three kids. She strangled her three kids. What is it a debate? You know, it’s just so this craziness about, you know, seeing something. They’re trying to find an angle. Just look. It’s the easiest answer, right? It’s very easy. Listen to the companies that you own. They’re telling you, “Hey, we’re getting crushed right now because these prices.” And it’s just the beginning. All these companies have just reported earnings pretty much three weeks ago. And now we’re seeing this new level of $100 oil and diesel prices well over $6 now, right? Which is insane. And all these costs up 40, 45% in the past two months are going to be passed on. They’re going to be passed on or they’re going to have to lower their earnings because these costs are going to directly impact a lot of these companies. And I’m going to just talk about cruise ships and airplanes and trucking. But, you know, when you’re looking at these food costs and throwing fertilizer going through the roof, what do you think they’re going to do?

Frank Curzio 42:24

They’re going to raise prices just because of fertilizer, right? Going through the roof because they can’t get through the straight. Now you’re throwing higher energy prices, oil prices, and diesel prices. What are these companies going to do? Wait till you see the Walmarts and the Targets come out and the Costcos say this. And some of the biggest fleets in the world. What are they going to say? How much of that is hedged? That’s where the research is. That’s how you make money in the market. That’s what you want to pay attention to. Be very careful. It’s a very, very dangerous market. The good news is a lot of this stuff, maybe it is temporary. Maybe we see all prices come down. It could be fixed probably after elections, but the elections are pretty far away, man. We’re looking at November. That’s going to seem like light years away. A month and a half or whatever. It’s a long time away when you see the markets feel like they’re coming down every single day or when they do go up, they go down for five days in a row. But we’re going to see that because it’s not a lot of news flow. The only thing we’re seeing is much, much higher oil prices.

Frank Curzio 43:10

The 10-year above, you know, over 5%. Let’s see if the Fed and the comments are going to change that after this. I don’t think it’s going to result in any big change no matter what he says. And I still think we’re going to see higher interest rates for much longer than people are projecting. And that’s not good for the equity markets. It’s not good for stocks. It’s not good for the global economy. But, you know, let’s see how much is priced in and what’s not. And if this does reverse, you’re going to see one of the greatest buying opportunities in a very, very long time. So be prepared. That’s why it’s worth pulling money out of the market and throwing it into Interactive Brokers. Oh, your Robinhood account’s going to pay three and a half, 4% interest. That’s a real rate. You haven’t had that in a very long time. That’s good money right there. That’s good money to be like, you know what? Let me just sit on the sidelines. This market comes down. Let me get back into the stocks that I liked at a 20% discount. That’s how you make money in investing.

Daniel Creech 43:56

There you go.

Frank Curzio 43:57

There you go. Okay, Daniel, time for you to have fun. All right, last subject. What do we got? We got 10 minutes left. Clarity Act did not pass. Not really a surprise. I just love the politics here. They blamed, yeah, it’s all Trump’s fault. Everything’s always Trump’s fault. If you trip over and fall outside, it’s Trump’s fault ahead of the midterms. So you had the senator, also Brooks, who was on there and, you know, said it didn’t pass because of ethics and Trump family and himself making a fortune from crypto. So, you know, I just listened to an interview. Joe Kernan did the interview. Obviously, he didn’t prepare at all for that interview. This woman just talked about how, you know, she and the Democrats support crypto and innovation, which is total horseshit, right? I mean, if that was the case, you wouldn’t have destroyed the crypto industry under the Biden administration, making sure banks were no longer allowed to do business with crypto companies. You forgot that? I mean, Silvergate went out of business.

Frank Curzio 44:43

They didn’t go out of business because, you know, they did anything wrong. They did out of business because they made sure that the regulatory authorities, any bank that took in crypto or anything was going to get audited and they were done. And they said, and that’s why all these banks came out and they started debanking people like us because we had a transaction that we invested in a company within crypto and they shut us down. They said, “You have one month. Here’s a number to call.” I called the number. It’s an answering machine saying basically, “Don’t bother. We’re not going to change it. You got a month.” All of our payroll, everything running through our company and zero revenue from that transaction that we’re generating. I’m like, “That’s not our business, right? It’s publishing, at least back then.” And, you know, you see this where the biggest crypto companies are getting sued by the government and the Biden administration. The CEOs are getting sued as bank lobbying dollars poured into these, you know, Democratic coffers to do this.

Frank Curzio 45:31

It makes sense because crypto, it replaces a lot of the bullshit and fees the banks charge customers, including giving them zero percent trillions, trillions sitting in savings and checking accounts that generate 0.2, 0.1% interest. Really? That’s the banks. That’s how wonderful banks that love us so much, right? The Jamie Dimons and stuff, which is insane when you think about it, which is insane. But I don’t know if this is a good strategy. I get the strategy not passing this bill, blaming everything on Trump. Talk about he’s done nothing for the economy, nothing for the industry. Energy prices are killing Americans right now. I get it with that message because they’re going home now after this vote and get to, you know, wait till after the midterm elections. But you just lost the entire crypto vote and that massive money hoard in the future, which helped Trump and the Republicans win the last election. And it’s debatable that that was the reason. Like you could debate and say that that was the reason.

Frank Curzio 46:21

I would argue that was the reason why Trump won a presidency. I mean, the amount of money he got was more money from an end of the industry. So it could come back to bite you in the ass but we’ll see during the midterms. But, you know, crypto and a Clarity bill not passing, obviously a temporary setback for the crypto industry.

Daniel Creech 46:36

Yeah, absolutely it is. And well, first of all, let me be a real arrogant jerk and take a victory lap. I called this. I said, “There’s no way they’re passing anything this year.” Because and let me give credit where credit is due and pay attention here in the environment that we’re talking about. This is a no-brainer for the Democrats. I don’t understand why anybody would think Democrats and it’s not just Democrat flip it if it was Republican thing and Democrats were in office. The opposing party is not going to give a victory to the enemy or their competition right before a midterm election, in my opinion. Now, time will tell if it’s going to turn out to be good or not. I do think just quickly here, and we’ll see how this plays out. I’m not saying this is a good or bad calculation. I’m just simply saying this is the way it looks to me. Democrats are going to run on the affordability issue, and that’s what they should do right now because you got higher oil prices, everything you just said.

Daniel Creech 47:26

Republicans are banking on the fact that you’re going, the voters are going to look through, quote unquote, “temporary higher oil prices,” and they’re going to pound the table on these traditional ethics and they want, you know, a strong border and more rules and regulation and lower taxes and all that kind of stuff. Freedom. We’ll see how the American voter dictates, but I clearly think, hey, they’ve picking their sides into the midterms. On the vote here, you had four Republicans vote no. One was a little bit of a wild card because Tillis had a yes vote and then he switched to no only because that way he can bring it back up for another vote, Frank. Shocking that our political system isn’t very straightforward and easy to understand either. But you have two Republicans that are up for re-election this time that voted no. We’ll see how they play that out. The other two, or I’m sorry, the one is retiring. Susan Collins is really the only one that out of Maine is the only senator running for election in the midterms that voted no.

Daniel Creech 48:22

The other two that voted no are termed in for a couple more years. So that’s not a big deal. On the Democratic side, every one of them, they stick together better than the Republican Party. Hey, got to give them credit. And they stuck together there. You got about 14 up for re-election this midterms. However, there’s a handful that are retiring and such. It’ll be interesting to see if it plays out on the political side, as you said.

Frank Curzio 48:46

So 14 of them, 14 are going to get zero money and a lot of that money for crypto is going to be funding.

Daniel Creech 48:50

Well, it’s 14, but there are in my screen froze here, so I can’t scroll, but three or four of them are retiring. So that doesn’t, so it’s not, it’s not 14 are technically up for the midterm election, but not all 14 are running for re-election. It’ll be interesting to see if any more money does go to there. And then on the silver lining here from the crypto standpoint, I’ve said this before, hey, I got head faked at crypto’s last, if you just click on Bitcoin, Joe, will you pull up a chart and a year chart be fine? The last uptick kind of head faked me when it hit around 80 and I thought, hey, man, we’re in kind of this new bull market. It sold off into the 60s. I continue to be very impressed and I think it’s worth paying very close attention to. If Bitcoin stays above 70,000 and no matter what the Fed does and what they say, if Bitcoin remains above 70 going forward for the next few weeks, I don’t understand how you can’t argue that that’s a new situation.

Frank Curzio 49:43

What’s the negative of the drive?

Daniel Creech 49:45

And there’s a lot of other stuff that we can cover in the future about why that could happen and all that. However, it’s very important to me to see Bitcoin above 70 given everything that’s going on and we’ll see how capital is treated because the silver lining is you have, quote, yesterday, Frank, Atkins, no, the 14th. So the day yesterday was when they voted on the Clarity Act. The day before that, Paul Atkins, chair of the SEC, was in Washington at a crypto event of some sort. And he was saying, “Hey, I encourage everybody to vote pass this, get it passed, get it sent to the president’s desk.” If they don’t, he was talking about how the regulations, regulators, are going to go ahead and get some more clarity, no pun intended. Two things here quickly. One, that’s positive. If you’re a crypto fan and you want to see this industry and sector build out and get capital investment, I think that’s a good idea. The downside is anything that these guys do can be switched or reversed or canceled with a pin as soon as the next party gets in charge of the SEC, which obviously it’s a volleyball.

Daniel Creech 50:45

It will continue to go back and forth. At best, without a voting, without Congress, Senate, whatever, then these are only going to last through the Trump administration, which until he declares he’s emperor, Frank, is two years.

Frank Curzio 50:57

Yeah. And look, you know, for the Democrats, this is, it should be a layup in this midterm. I mean, given what oil prices are, inflation rising, Trump responsible and saying, “Listen, we want to continue to grow AI,” and he’s still, you know, going on Truth Social and saying that, which is not favorable, right? So, you know, all they need to do really is just lock in the anti-American woke assholes in a bunker and make sure, you know, they’re not doing interviews on mainstream media channels, right? And going crazy and saying, you know, free Palestine and Palestine, defund the police, free illegal immigrants and, you know, support men who say they’re female, kicking the shit out of women across every sport. Lock those people in a bunker just for the next two months. I know they love the media, they love talking. And whatever you do, please, there’s no reason for it. Do not have Kamala say anything in the media. I mean, any comments that it’s just don’t shoot yourself in the foot because you’re going to win.

Frank Curzio 51:46

I mean, you don’t have to do anything and you won. So don’t be stupid here. But any comments about our, even including today where Newsom said, you know, he won’t run for president if Kamala, we know that Kamala won’t. I mean, Joe, play the video of this. We know that she’s not going to run, right? It’s crazy.

Frank Curzio 52:01

Everyone would be taken off a private, the private plan that their company currently has. A private, the private plan that their company currently has.

Daniel Creech 52:14

Yes. There’s no question I’m in favor of banning fracking. Do you ban plastic straws? I think we should. Yes. I am prepared to get rid of the filibuster to pass a Green New Deal. On day one, we’re going to repeal that tax bill. But we’ve got to increase the corporate tax, right? And also looking at estate taxes are going to have to go up. And under my plan, there will also be a carbon fee. So I decided I was going to start prosecuting parents for truancy.

Frank Curzio 52:45

I mean, I don’t know. I don’t know how you put someone out there who already lost and lost big and her own party even didn’t like her when she was running early on in the preliminaries, you know, which is crazy, but lock those people in a bunker, throw away the key until the midterms and you’re going to take over the House automatically and likely the Senate now. I didn’t even know until we looked today that that’s how much it switched. I know that, you know, it was like 54, 55% for Republicans, but on cow sheets, now 58% in favor of the Democrats to win the Senate now. And, you know, I think they do that and they’ll win. So, you know, that’s up to them with that strategy, but yeah, the bull’s definitely in their court and that’s going to, you know, we’ll see how that impacts stocks going forward. I like split governments because it’s usually nothing gets done and just, which is a good thing. Nothing stupid gets done. You let the economy run. Capitalism reigns and that’s a good thing. That’s why we see markets do very, very well when you have split governments.

Frank Curzio 53:35

It’s not just one side or the other side with no questions or whatever and no checks. So it’s usually pretty good because when nothing gets done and these idiots who are getting paid lobbying dollars and bribe by everyone in the world, none of that shit matters because they can’t get anything done, which is good because they don’t really give a shit about anything. They only give a shit who’s going to pay them the most to influence their opinion. So, you know, be careful with these markets right now. A lot of political talk because it matters when it comes to stocks and everything, but just be careful. There’s a lot of risks in this marketplace with rates this high. We’ve never seen something like that when oil prices continue to go higher. I don’t know if the Fed’s going to be able to change that when he meets. We’ll revisit tomorrow. And tomorrow, be sure to send in your questions, right? The askkersio.com. We’re here. Energy, politics, AI infrastructure, food prices, healthcare, all these are hot topics. If you want, go to @FrankKersio@X account. You know, 500,000 views on the last post, over 10 million views this month alone, right?

Frank Curzio 54:25

We’re just approaching that. If we haven’t surpassed that, you know, just writing about the topics that people care about most and, you know, having an opinion on it and, you know, starting to get lots and lots and lots of followers and everything going really cool on X. But, you know, this is what people care about. They want to know the facts with a little bit of opinion there too. But, you know, these are the subjects that we’re here for you on Thursday, which we, Thursday used to be a paywall. It was behind the paywall of that podcast. Now it’s for free. You get to ask us whatever you want. Kind of like the lightning round with Kramer, which when I worked for Kramer, even to that day, starting the first week, first month, first five years, I was with them until now, whatever the show is, 20 years plus, that’s the number one segment. That’s the number one watched segment is the lightning round because people get to ask questions. They get to hear the name and stuff like that. But, you know, use that. That’s incredibly valuable. We’re using my expertise for 30 years, Daniel’s expertise answering your questions.

Frank Curzio 55:13

So that’s what our Thursday podcast is about and that’s what we’re going to be doing tomorrow. Daniel, any final thoughts before we go on Fed or anything? What are your predictions? The market’s going to end the day higher or lower? That’s a good question.

Daniel Creech 55:24

Higher or lower? I’ll go lower.

Frank Curzio 55:26

And it’s higher right now, which is meaningless.

Daniel Creech 55:28

Is it up? Yeah. I’ll go lower.

Frank Curzio 55:29

But I will say this, which is interesting. The last five Fed meetings, I think they’ve met five times this year, every single Fed meeting afterwards, the markets finished lower.

Daniel Creech 55:37

Well, then I’ll take higher. Screw them.

Frank Curzio 55:39

Then take higher. Yeah, it’s going to be interesting. I think we stay higher as long as, you know, I don’t think it’s going to be any surprises and we’re up right now. And Nasdaq’s up, you know, a little bit 0.7%. The Dow is flat. I mean, it’s relatively, the S&P 500 is up 0.3%, but I think that we go up a little bit today. However, I don’t think he’s going to solve any problems with higher interest rates and higher oil prices anytime soon. And no matter what happens with the markets, I think we continue to drift lower for a little while longer. So just be prepared. We’ve been saying this for three, four weeks. We had a special podcast, live podcast about it. Just be careful. If you’re prepared for a market pullback, you’re going to have money in the sidelines. You’re getting paid 3.5, 4% interest. Have money in the sidelines and your money market accounts and some of these things. But, you know, when this market pulls back, the good news is every single time we see these major pullbacks since the credit crisis, they snap back very, very quickly, month to month, and you’re going to be able to buy your favorite stocks for a lot cheaper, which is pretty cool.

Frank Curzio 56:26

So just be prepared. Want to make sure you’re in the market long term, not just looking short term, but short term, we do think that we’ve been right so far. The market’s going to continue to pull back. There’s just so many risks out there. So be careful. We’ll be here for you and also we’ll be there for you tomorrow. Ask your questions. AskCurzio. And is it askcurzio or is it askfrank? What is it? askcurzio.com, right? askcurzio.com. Even though we don’t get a lot of traction on it. If not, frank@curzioresearch.com. Daniel, what’s your email?

Daniel Creech 56:53

daniel@curzioresearch.com.

Frank Curzio 56:54

All right, guys. We’ll see you tomorrow. Take care.

Announcer 56:56

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.