Latest / Earn Your Leisure / What Wall Street Isn’t Telling You About $42 Trillion

Transcript

What Wall Street Isn’t Telling You About $42 Trillion · Earn Your Leisure

• 0:00
  Speaker 1: All right, let's jump into it, man. Let's kick it
• 0:03
  Speaker 1: off with the investing fact of the week.
• 0:05
  Speaker 2: What you got? My four.
• 0:07
  Speaker 3: Number one, Trump has disclosed more than a thousand trades
• 0:10
  Speaker 3: in June, totaling up to 263 million, including Visa, Berkshire Hathaway, MasterCard,
• 0:17
  Speaker 3: and Census. Those first three, even though I don't agree
• 0:21
  Speaker 3: with the inside trading, well, he reported it, so it's
• 0:23
  Speaker 3: not inside trading, but the first three are great. Ray
• 0:26
  Speaker 3: Dalio has said to sell bonds And buy gold, which
• 0:30
  Speaker 3: I've told you for a long time. The all-weather portfolio
• 0:34
  Speaker 3: has had some issues. The bond coverage, I think, is
• 0:38
  Speaker 3: probably the weakest part of the portfolio. So I'm glad
• 0:41
  Speaker 3: he's saying this. Treasury may tap $ 1 trillion cash account
• 0:44
  Speaker 3: to buy bond buyback.
• 0:46
  Speaker 2: We'll talk about that in a little bit.
• 0:48
  Speaker 3: And the White House has stated that the Trump June
• 0:51
  Speaker 3: trades show no conflict of interest.
• 0:56
  Speaker 2: That's fascinating. Back to you, Farron.
• 0:59
  Speaker 1: You know, I saw that report this weekend and it
• 1:01
  Speaker 1: made me, you know, we covered that. I feel like
• 1:03
  Speaker 1: that was a month ago, maybe a month and a
• 1:05
  Speaker 1: half ago, when we were talking about the historical value
• 1:09
  Speaker 1: of presidents trading equities. And there was zero up until
• 1:15
  Speaker 1: this point. And then we got to the current president.
• 1:18
  Speaker 1: He was at like 3,000. And that was a month ago.
• 1:21
  Speaker 1: To have 1,000 trades in June?
• 1:24
  Speaker 2: It's insane, bro.
• 1:24
  Speaker 1: 1,000?
• 1:27
  Speaker 3: Like for context, for those who don't know, you can
• 1:29
  Speaker 3: go look and see what firms are trading, how much
• 1:32
  Speaker 3: Goldman didn't take a thousand trades.
• 1:34
  Speaker 2: And I'm going.
• 1:35
  Speaker 1: To be honest with you. I haven't made a thousand
• 1:37
  Speaker 1: trades in my life, bro. It's in my life for.
• 1:41
  Speaker 2: The month of June, bro.
• 1:45
  Speaker 3: Citadel hasn't made, they took over Leo's fund and dismantled it.
• 1:49
  Speaker 3: And with buying the portfolio and selling off, they didn't take.
• 1:53
  Speaker 2: A thousand trades. Bank of America has not taken a
• 1:56
  Speaker 2: thousand trades. It's crazy. Two Sigma, who that CEO is
• 2:01
  Speaker 2: going through a divorce issue.
• 2:02
  Speaker 3: We'll talk about it on Blackout. He hasn't went through
• 2:05
  Speaker 3: a thousand trades in a month of June. It is
• 2:08
  Speaker 3: interesting to say the least. But this bond market thing
• 2:13
  Speaker 3: is scary. I've been on this for a long time.
• 2:17
  Speaker 1: You have. You've been talking about the bond market and
• 2:21
  Speaker 1: we keep seeing the Treasury Secretary get on I feel
• 2:25
  Speaker 1: like he every time he wants to say something, it's
• 2:28
  Speaker 1: CNBC at eight o'clock.
• 2:30
  Speaker 2: On whatever morning the prime slot is.
• 2:32
  Speaker 1: Yeah, that prime slot. So we can talk about it.
• 2:34
  Speaker 1: Last week, it was trying to figure out how we're
• 2:37
  Speaker 1: going to lower yields. He got back this morning talking
• 2:39
  Speaker 1: about sanctions on Iran. What what are we actually seeing
• 2:43
  Speaker 1: with the bond market? Because a lot of people hear
• 2:44
  Speaker 1: the bomb. They have no idea what it is, how
• 2:47
  Speaker 1: it works, how it affects the economy or definitely the market.
• 2:50
  Speaker 2: What are we seeing? What are we hearing?
• 2:52
  Speaker 3: Now, essentially, when you look at the bond market, just
• 2:55
  Speaker 3: think of it as debt. But the thing that's interesting,
• 2:58
  Speaker 3: and I talked about it at InvestFest, we're seeing the
• 3:01
  Speaker 3: decay of securities and financial products go away in our lifetime.
• 3:06
  Speaker 3: Like I remember when my aunts would have CDs and
• 3:09
  Speaker 3: they would get 9% to 13% in a year. And
• 3:11
  Speaker 3: the thought was, well, I don't even really need to
• 3:12
  Speaker 3: invest in the market if I have a CD. Those
• 3:15
  Speaker 3: went away post-2008. So the bond market is supposed to
• 3:19
  Speaker 3: balance out the stock market, stocks and bonds. But now
• 3:24
  Speaker 3: ETFs are the hedge to the bond market. So you
• 3:28
  Speaker 3: have no diversification. The reason why it's scary for me
• 3:31
  Speaker 3: is that the bond market has been down for six
• 3:33
  Speaker 3: years and now we're currently at the 2007 levels for
• 3:38
  Speaker 3: an instrument.
• 3:38
  Speaker 2: That's supposed to be protected.
• 3:40
  Speaker 3: So like if you have an aunt or grandma that
• 3:42
  Speaker 3: has never watched Market Mondays or wasn't aware of me
• 3:46
  Speaker 3: talking about this, like someone tried to tell my mom
• 3:49
  Speaker 3: at the bank a couple of years ago to invest
• 3:51
  Speaker 3: in bonds.
• 3:51
  Speaker 2: She's like, They're no good. And they looked at her
• 3:53
  Speaker 2: like she was crazy.
• 3:55
  Speaker 3: And then the conversation started to happen amongst the bankers
• 3:58
  Speaker 3: in a six month or a year period that maybe
• 4:01
  Speaker 3: we should stop offering these to our clients because they're
• 4:04
  Speaker 3: not going up anytime soon. So to see, this is
• 4:08
  Speaker 3: like the brakes of the economy going away. And for
• 4:11
  Speaker 3: them to say, okay, now we're going to tap this
• 4:13
  Speaker 3: trillion dollar account. But no one will still, I've asked
• 4:17
  Speaker 3: every guest that has come on, every person I've talked
• 4:19
  Speaker 3: to in Stock Club that I've interviewed, What's the real
• 4:21
  Speaker 3: reason the bond market is going down?
• 4:23
  Speaker 2: No one has a clear answer.
• 4:25
  Speaker 3: This has been down for imagine if Microsoft had been
• 4:28
  Speaker 3: down for six years straight.
• 4:31
  Speaker 2: It would be.
• 4:31
  Speaker 3: Blood on the streets. So I think it's an issue
• 4:35
  Speaker 3: that needs to be addressed. And with the spending. We're
• 4:39
  Speaker 3: looking at the national debt being at 42 trillion and
• 4:43
  Speaker 3: maybe by the top of next year, something has to
• 4:46
  Speaker 3: be done. And I think this measures a little bit
• 4:49
  Speaker 3: too little too late.
• 4:50
  Speaker 2: What do you think?
• 4:51
  Speaker 1: Yeah, I mean, we watched it today and it felt
• 4:54
  Speaker 1: like last week when he spoke, we saw the market
• 4:59
  Speaker 1: respond in a positive way.
• 5:01
  Speaker 2: And he got on this morning and.
• 5:03
  Speaker 1: It kind of, you know, it was, I feel like
• 5:06
  Speaker 1: the strategies that they're using are becoming redundant and less effective.
• 5:11
  Speaker 1: And by that, I mean, right, one week to the next,
• 5:14
  Speaker 1: the reaction was different. We watched what, you know, the
• 5:18
  Speaker 1: tariffs did and that we're going to suspend them. And
• 5:22
  Speaker 1: the response that happened with that, we've seen the Iran, hey,
• 5:26
  Speaker 1: we're coming to a peace deal and maybe we're not,
• 5:27
  Speaker 1: we're going to extend this. The more you use these tactics,
• 5:30
  Speaker 1: the less efficient they become. And so at a certain point,
• 5:34
  Speaker 1: there's no more tactics you can use. And we're going
• 5:37
  Speaker 1: to have to face a real world scenario. And I
• 5:41
  Speaker 1: don't know what that is, but in my mind, I
• 5:43
  Speaker 1: keep hearing you say the bond market's in shambles and
• 5:45
  Speaker 1: nobody's saying shit.
• 5:46
  Speaker 2: That's all I keep hearing when I hear this.
• 5:50
  Speaker 1: Is that day now coming?
• 5:52
  Speaker 3: I think so, because now if you look internationally, you're
• 5:56
  Speaker 3: trying to force countries to take on our bonds. And
• 5:58
  Speaker 3: they're like, why wouldn't this is like the big short
• 6:01
  Speaker 3: all over again, except instead of the housing market being broken,
• 6:05
  Speaker 3: the bond market is being broken. And then even for
• 6:08
  Speaker 3: Trump to say, well, the bond market is safe because
• 6:11
  Speaker 3: we have warships.
• 6:12
  Speaker 2: I'm like, you can't bomb them into buying a financial product.
• 6:16
  Speaker 2: Sounds good.
• 6:16
  Speaker 3: But even to have to go to brute force for
• 6:20
  Speaker 3: a financial instrument tells me Something's wrong. Something is deeply
• 6:24
  Speaker 3: broken that they need to fix soon.
• 6:27
  Speaker 2: But I don't know if they will.
• 6:29
  Speaker 1: I'm not sure if they will. I think if you've
• 6:31
  Speaker 1: watched the history, especially if you look at every it
• 6:35
  Speaker 1: was it was great. I saw the statistic was every
• 6:37
  Speaker 1: Republican president over the past 20 years. If you look
• 6:40
  Speaker 1: at what the national debt has gone, it's risen under
• 6:44
  Speaker 1: every Republican president. And we're under that regime for the
• 6:48
  Speaker 1: next two years, two and a half years. And so
• 6:51
  Speaker 1: I would imagine that the debt is going to continue
• 6:53
  Speaker 1: to rise. And so now what is, how do we
• 6:56
  Speaker 1: combat that, right? Like you're putting Lutnik and you're putting
• 7:01
  Speaker 1: our new Fed chair in a very peculiar spot. And
• 7:05
  Speaker 1: they both, right? And those guys both used to work together.
• 7:08
  Speaker 1: Shout out to my man, Champ. I'm sure he sent
• 7:10
  Speaker 1: it to you as well. They come from the drunken military, right?
• 7:14
  Speaker 1: And he's that two of his his greatest protégés are
• 7:17
  Speaker 1: now pretty much the people who are in control of
• 7:19
  Speaker 1: the United States economy.
• 7:21
  Speaker 2: I mean, we could say that.
• 7:23
  Speaker 3: And their hands are tied behind their back. And also, too,
• 7:26
  Speaker 3: I'm not just beating up on Trump because, you know,
• 7:28
  Speaker 3: MAGA and all that. But when you have a person
• 7:30
  Speaker 3: who leads financially the way that he does and everything
• 7:32
  Speaker 3: ends up in bankruptcy, Novogratz told us this will happen.
• 7:37
  Speaker 2: Novogratz came on and told us, hey, he's traditionally been
• 7:41
  Speaker 2: a spender.
• 7:43
  Speaker 3: I don't see the debt going down under his regime,
• 7:45
  Speaker 3: and here we are. Then we can talk about Project 2025.
• 7:51
  Speaker 3: Some of that stuff is getting scary, and I'll say
• 7:54
  Speaker 3: for the next couple weeks, ease up on the ground beef.
• 7:58
  Speaker 2: Remember what I told Rashad?
• 8:00
  Speaker 3: Pause.
• 8:01
  Speaker 2: You got to pause that.
• 8:04
  Speaker 3: Y'all going to be eating horses. So, I just think
• 8:10
  Speaker 3: it's interesting to see the state of the economy. And
• 8:13
  Speaker 3: I talked about it on stock club, like the crash
• 8:15
  Speaker 3: that everyone needs to worry about is the crash of
• 8:17
  Speaker 3: the economy, but the S and P and accused, they're
• 8:20
  Speaker 3: going to do incredibly fine because you need somewhere to
• 8:23
  Speaker 3: place the money.
• 8:24
  Speaker 2: And now it's almost as if.
• 8:28
  Speaker 3: The selection of investments is really down to 20 things
• 8:31
  Speaker 3: in the world and the money has to be parked somewhere.
• 8:34
  Speaker 3: So they figured out a way how to stop a
• 8:36
  Speaker 3: stock market crash from happening, but an economic one, won't
• 8:40
  Speaker 3: be stopped anytime soon. All right.
• 8:42
  Speaker 1: So that brings us to our next piece, which is
• 8:44
  Speaker 1: interesting because we've been saying it for years, right? When
• 8:48
  Speaker 1: we see midterm years, traditionally the S & P, the
• 8:51
  Speaker 1: NASDAQ have had negative years, right? Especially in the midterm section.
• 8:57
  Speaker 1: This year has been kind of tricky. I'll be honest.
• 8:59
  Speaker 1: We've been covering it for every month, every week, which
• 9:03
  Speaker 1: feels like, I don't, it just feels very different. We
• 9:06
  Speaker 1: thought the second half of 2026 was, Might be a
• 9:09
  Speaker 1: little volatile. It happened early in July, which is traditionally
• 9:12
  Speaker 1: a great month. August, I mean, we're at the 24th
• 9:15
  Speaker 1: of August, and usually we see a lot more volatility.
• 9:18
  Speaker 1: We're seeing some, but it still is trended positive. Volatility
• 9:22
  Speaker 1: usually hits us in September.
• 9:24
  Speaker 2: We'll see.
• 9:25
  Speaker 1: What's your thoughts around midterm elections, how we go into them,
• 9:29
  Speaker 1: which we'll find out who is taking the new seat
• 9:33
  Speaker 1: or who's retaining their seat in early November, and then
• 9:36
  Speaker 1: what happens post yeah midterm elections.
• 9:39
  Speaker 3: I think post midterms is probably the easiest to answer
• 9:41
  Speaker 3: i think historically post has always done well and i
• 9:44
  Speaker 3: think post this midterm election the market is going to
• 9:47
  Speaker 3: do incredibly well this midterm is different because the crashes
• 9:52
  Speaker 3: are lasting a lot less so we started to fall
• 9:56
  Speaker 3: july 17th we fell up until what the 29th of July.
• 10:01
  Speaker 3: And then we went, we took off to the races.
• 10:04
  Speaker 3: Normally that rut or that drought would last the entire
• 10:07
  Speaker 3: month or 14, 15 days.
• 10:10
  Speaker 2: We're not seeing that.
• 10:11
  Speaker 3: And I was expressing to stock club call, like any
• 10:13
  Speaker 3: crash that we get now, they're not lasting as long
• 10:15
  Speaker 3: as they used to.
• 10:16
  Speaker 2: We used to get a two month down cycle.
• 10:19
  Speaker 3: I think the retail trader who is like almost as
• 10:25
  Speaker 3: good enough to work at a fund.
• 10:26
  Speaker 2: It's a lot of them there.
• 10:27
  Speaker 3: I think for the first time in history, the most
• 10:30
  Speaker 3: million dollar accounts on a retail side are present on brokerages.
• 10:34
  Speaker 3: So there's a lot of great traders, a lot of
• 10:36
  Speaker 3: great investors. I know we played our part in that,
• 10:39
  Speaker 3: but I think people are taking these opportunities to buy
• 10:42
  Speaker 3: these dips and seeing a tremendous upside and the buying
• 10:45
  Speaker 3: power is just so high that we're not having a
• 10:47
  Speaker 3: normal cycle. Also for the first time in history, You
• 10:51
  Speaker 3: have a president go on TV and say, buy stocks.
• 10:56
  Speaker 2: Buy stocks, buy crypto. That helps a hell of a lot.
• 11:01
  Speaker 3: And you can argue and say the days that he
• 11:02
  Speaker 3: told you to buy them, you can get really good
• 11:05
  Speaker 3: returns on the days that he bought them. Now, you
• 11:06
  Speaker 3: can argue that it's not right, and I would agree.
• 11:09
  Speaker 3: But I think once we look at the record books
• 11:11
  Speaker 3: and in history books, we have to factor in that
• 11:13
  Speaker 3: he is manipulating the market to tell people to buy.
• 11:17
  Speaker 2: So, allegedly. Thank you.
• 11:20
  Speaker 1: I feel like history might be being rewritten in real time.
• 11:30
  Speaker 1: It's interesting. Specifically, Bitcoin has had an amazing three or
• 11:36
  Speaker 1: four days here recently. We heard about the Clarity Act
• 11:40
  Speaker 1: and the September 15th deadline. Circle that on your calendar.
• 11:43
  Speaker 1: Whether that's going to improve all signs of.
• 11:45
  Speaker 2: That, it will be. You saw Coinbase.
• 11:48
  Speaker 1: The micro strategy, you saw the crypto.
• 11:52
  Speaker 2: Space move a little bit.
• 11:54
  Speaker 1: And when I looked at the crypto cycle and, you know,
• 11:57
  Speaker 1: having conversations with Austin, usually the third year is the
• 12:01
  Speaker 1: strongest year in the Bitcoin cycle. But last year was
• 12:04
  Speaker 1: the first time that the third year, you know, going
• 12:07
  Speaker 1: into it was it was in decline. Yeah.
• 12:10
  Speaker 2: OK, now we're rewriting history.
• 12:11
  Speaker 3: Right.
• 12:11
  Speaker 1: So what does history look like now? So I'm starting
• 12:14
  Speaker 1: to think about the marketing itself and, you know, we're
• 12:17
  Speaker 1: going into it. We think to ourselves,