All About DeBase (FvF Ep. 202)

Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, mark episode 202 with "It's All About the Base(ment)," digging into last week's surprise Treasury announcement to double buybacks of long-end bonds after the 30-year yield hit 5.33%, its highest since 2007.

Ryan and Sonu explain why this move — an operation-twist-style intervention rather than QE or yield curve control — spooked markets into the "debasement trade," sending gold up 5-6% and Bitcoin up more than 20% on the week while the dollar fell roughly 1%. They break down Stanley Druckenmiller's sharply critical Wall Street Journal op-ed on Bessent's approach, along with pushback from economist Guy Berger, and debate whether today's 10-year yield near 4.7% is simply normalizing back toward 1990s levels or whether nominal GDP growth suggests rates should go even higher.

The conversation also covers a blowout Philly Fed manufacturing report and strong flash PMI data pointing to continued economic strength, market breadth and sentiment signals suggesting the bull market remains intact above key S&P 500 support, and a broader look at the $40 trillion national debt in context of rising household net worth. Ryan closes with thoughts on market technicals, portfolio diversifiers, and previews of Jackson Hole and Nvidia earnings coming later in the week.

[Key Takeaways]

• Treasury's move to double long-end bond buybacks starting September 9, following the 30-year yield's spike to 5.33% (highest since 2007), sparked what Ryan and Sonu call the "debasement trade" — a rotation into gold and Bitcoin and out of the dollar.
• Gold rose 5-6% and Bitcoin surged more than 20% over the week, while the U.S. dollar index fell about 1%, an unusual reaction given that rising yields typically strengthen a currency rather than weaken it.
• Sonu frames the Treasury action as closer to a 1960s/2011-style "Operation Twist" than true quantitative easing, since it shifts duration without expanding the money supply, but notes it still risks pushing short-term yields and imported inflation higher.
• Stanley Druckenmiller's Wall Street Journal op-ed argued Treasury's buybacks amount to artificial suppression of the "only fiscal disciplinarian" left in Washington, sparking debate over whether the intervention is as powerful as he suggests.
• Comparing current nominal GDP growth (~5.5%) to the late 1990s (~5.8%) with today's lower 10-year yield (~4.3% average vs. ~6% then), Sonu argues rates may need to move even higher than current levels to reach true equilibrium.
• A blowout Philly Fed manufacturing report (47.4, highest since 2021) and strong flash PMI data (56, highest since April 2022) point to renewed industrial strength, largely tied to AI-driven investment.

Jump to:

0:00 - Welcome And A Playful Title

1:22 - The 1,000-Point Dow Day Memory

4:01 - Personal Low Moments And Path Dependency

7:06 - Treasury Steps In As Yields Surge

14:18 - Druckenmiller Critiques Yield Defense

20:40 - Operation Twist And A Falling Dollar

23:12 - Gold And Bitcoin Jump On Debasement

27:54 - Are Rates Simply Back To Normal

36:02 - AI Boom Data Signals Real Strength

39:20 - Jackson Hole Expectations And Nvidia Setup

41:49 - Market Breadth Levels And Investor Sentiment

44:10 - The $40 Trillion Debt Context Check

49:30 - Portfolio Diversifiers And Final Takeaways

53:00 - Closing Thanks And How To Support

Connect with Ryan:

• LinkedIn: https://www.linkedin.com/in/ryandetrick/

• X: https://x.com/RyanDetrick

Connect with Sonu:

• LinkedIn: https://www.linkedin.com/in/sonu-varghese-phd/

• X: https://x.com/sonusvarghese?lang=en

Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com

Transcript

Copy Transcript Copied

Welcome And A Rough Market Memory

SPEAKER_02 0:02

Welcome to the Facts versus Feelings Podcast. I'm your host, Ryan Dieter, and I'm joined by my co-host, Tony Varke. Cutting through the noise, Ryan Dieter, Chief MicroStrategy, and Sonovarky, Chief Macro Strategic. Taking out the board and helping investors focus on what really matters. Alright, episode 202 of Carson's Facts versus Feelings is back, Sonu. Like all great things, it just came to me as I was driving my son to work. I thought the title today could be It's All About The Bass. I don't know. You big Megan Trainer fan? We had to look up who uh who they literally sang that song about two seconds ago.

SPEAKER_03 0:50

It's a good song, though. It was a catchy one. I mean, I remember it was maybe it was soon after the kids are born or something. It was that time, but you know, the kids like to move a little bit. It's two-year-olds are toddlers, and I remember playing the song more than a few times. So because you know, once they get it's like a yearworm.

SPEAKER_02 1:09

Yes. As we sit here, I'm thinking we have like the thumbnail, you and I, Megan Trainer and Scott Basent, and it's all about the bass. Or Scott Basent and Megan Trainer is dancing too. Yeah, yes. It's Scott Basent and Megan Trainer. That's exactly all right. Uh, so it was 11 years ago, yesterday, August 24th, 2015. I shared it on Twitter, so you probably know. Do you know what that was by chance, Tony? From market history? Does that ring a bell? August 28th, 2015.

SPEAKER_03 1:38

Any guesses? August 28th, 2015. It wasn't the China thing, was it? Or was it China? So it was a China devalued the one. Devaluation. Okay, okay. Who remembers what the market history? Yes.

SPEAKER_02 1:52

Here's what I know. Here's what I know. That was the first day in market history that the Dow Jones industrial average fell 1,000 points. And listen, whenever I point this out, I'm aware, we're aware, percentages matter. But I'm just going to tell you that particular day when the Dow was down a thousand, and I we can look it up, down three, four, five percent. I don't know, close enough for government work. It was a bad day. Um, that was a pretty sick feeling. And a little bit of history here. So that was August 2015, August 24th, August 2015. I was unemployed. I had major, major back issues. I remember saying, I mean, my wife's 5'2. I'm 6'2 on a good day. I was shorter than her when we'd walk because it hurt so much. I spent most of the month of August. And the kids are young, so you probably had to carry them. Everyone, I just laid on the floor and worked. It felt okay when I laid on the floor. So unemployed, doing all the stuff I could do, trying to get a job. So I was thinking, like, when I go to this back doctor, I remember driving up there and hobbling in and looking on this little screen in the TV or the TV at the uh doctor office, and the Dow's down a thousand points. I'm like, I don't have a job. I I was I mean, eventually I was hired by Bert, our current uh Bert White, our current CEO here at Carson at a different shop. Um, but it took a while. I had no job, I um was unemployed, unemployed, I couldn't walk, uh, and the market was collapsing. You know, I remember thinking there literally 11 years ago. Did he just think I just retire or something? I well, I couldn't retire, I had no money. Um I was thinking, I sure hope it doesn't get much worse than this. And believe me, I get it, things can always get worse. But that was a pretty low moment for me, and now here we are, 11 years later.

SPEAKER_03 3:37

11 years later.

SPEAKER_02 3:38

Yeah, my back is good, get to work with you every day. Carson's great, markets hitting new highs. Always hold up a little bit, we'll talk about it. But anyway, just a just a do you remember that? I mean, that day always will stick out to me as like, you know, I'm sure there's gonna be worse days in my life, but I felt pretty low the morning of August 24th, 2015. Do you remember that at all? Or what's your low moment in life? I don't know what's your low, we'll talk about what's your low moment in life. You have one that stands out? Oh gosh, I think it was 2010.

SPEAKER_03 4:03

Good. Don't say yesterday or something. No, no, no, it was 2010, which is ironic because 2010 is a great year. That's the year I got married, right? Oh, but two months before I got married, I found out like I was running my own quantitative modeling shop about the options, things like that. And my biggest, let's say, client, right, is a hedge fund manager, and he went bust. Ooh, okay. And I was like, shoot. You didn't say that, you said something else. Yeah, you said something else. And and then, you know, and we were planning to move, you know, two months later, the our wedding was going September 4th is our wedding anniversary.

SPEAKER_04 4:41

Yep.

SPEAKER_03 4:42

And but we got married in court a couple of months before in June, or so two and a half months before that. And I remember telling my wife, I mean, it happened like a few days after that. I remember telling her, you know, we're planning to move into my place, which is you know, more expensive. And she had a she owned a home. I was renting, but mine was like quote unquote nicer. It was by the lake and things like that. She had a nice place, but it was smaller, and she owned it. And we were like, you know what, honey, that's too small for both of us. You know, we weren't planning kids immediately. And, you know, as it turns out, I was like, oh, wait, the money may not be there. So I had to go tell her, like, you know, this is not happening. It's all close to the last minute. We planned everything out, right? She's gonna move all this stuff, and suddenly I'm like, oh no, I have to move all my stuff into your place, right? So that was a big switcher who it all worked out. I mean, to be clear, it worked out, and you sometimes wish you don't want those sort of things to happen to you in life in the moment. Now I look back, and there's path dependency, like your case, right? Because if you were not unemployed, who knows? You may not have met Bert White and we wouldn't be doing this. And same thing with me like there's a path dependency because it happened that way. I'm here today, I'm happy, but in the moment, gosh, it sucked.

SPEAKER_02 5:59

I remember again the the previous job that I lost when I was laying on the ground, that the guy said something along the lines of, oh, you know, it'll all work out. One door closes, another door opens. And I say to this day, you want to punch the person. It tells you that when you're that person in that moment. But I I I guess I'm proof of that, and you're proof of that. And you think you talk about your wedding, we talked a few weeks ago about that. Uh, I forget the guy's name. What was his name? The guy just went out. Leopold, Leopold. Leopold at his hedge fund literally at his wedding or at the uh rehearsal dinner. They're talking about his imploding hedge funds.

SPEAKER_03 6:28

I wasn't running like $10 million or something at that time, but it wasn't the weekend of your wedding, I guess. No, no, no. It was it was two days out, two or three days, I think, something like that, after we got married in court. Right.

SPEAKER_02 6:40

Well, listen, hey, it happens to all of us. Um, oh, oh, I forget the quote.

SPEAKER_01 6:46

Who said it? Maybe Jim Simons. I think it was Jim Simons, I think.

SPEAKER_02 6:49

He said, you know, everybody should try to get fired once, but don't try to make a career of getting fired multiple times. I paraphrased that, but it was something along those lines. So that's what we're doing.

SPEAKER_03 6:57

We fired that to Seg. You should use that to Seg.

Treasury Steps In On Long Yields

SPEAKER_03 7:01

Exactly. How long do you think Scott Besson stays in the job?

SPEAKER_02 7:04

Well, that's uh that's where we're going now. So a week ago, so we're recording this. What is today's date? So today's uh August uh 25th, 25th. 25th. I mentioned 24th. So about a week ago, right now, right? Was it on Tuesday when the Fed did their announcement they're doubling the treasury purchase? Yes, it was Tuesday, yes. Yeah, so anyway, we'll just say this closing up for government work. Last week, the govern the uh Treasury said they're gonna double their treasury purchases during years to back up starting the week.

SPEAKER_03 7:29

Long yields, long yields have been, you know. True. It was look, this shouldn't be a big surprise to folks listening to the podcast. We've been in talking about only since the beginning of the year that you know we're in a period of inflationary growth, and you wouldn't expect that's great for stocks actually, because revenues are up, profits are up, margins are up, but it's not great for bonds, and long yields took a new leg higher early last week. This is Monday and Tuesday. And the I think the 10-year had hit 474. That was the highest since January 2025. The 30-year hit 533, that was the highest the cycle, highest since 2007. Yep, you know, back in 2007, June, I believe it the 30-year peaked at 540. So we're not far away from there. I think Treasury looked at that and it's like, uh-oh, we have a problem here. And I think it would have all been fine if they didn't, right? Like, if but but once you say once the cat's out of the bag, you have to keep supporting it. And you know, as you said, Treasury came out on Wednesday, actually, it was the 19th. It was a okay Wednesday the ninth. Yeah, I just checked. Treasury came out and said they would at least double their buybacks of long-end treasuries, right? 10 to 30 year tenors, effect of September 9th. So it wasn't like they were starting, you know, last week or this week, right? It's still a couple of weeks away, and this is off schedule. Look, they do buybacks all the time, but that's on schedule, they have a quarterly schedule, things things like that. This is off schedule. And guess what? What when we can put this chart up of US 10-year and 30-year yields, corner. What would you expect? You're like, wait, you know, you have a this potentially big buyer with a big bazooka coming in and saying they're gonna buy treasuries, so yields fell, right? The bond prices went up for a moment, and then it tracked back on Wednesday, it tracked back, and then what happens next? Once you say you're going to try to support the long end of the curve, of the yield curve, you gotta keep doing it. And then so Besson comes back on CNBC on Thursday morning and says, Oh, maybe buybacks can exceed $4 billion, and Treasury has a big toolkit. By the way, $4 billion is like a drop in the water, right? For such a big treasury market, but still Besson coming out and says, or implying that we'll do what it takes, right? But we're not sure. Are they going to do what it takes or not? You know, we could talk about the Stan Druckenmiller op-ed too. Oh, yeah. What was your take? I mean, you know, all this is going on. I was at a plane for half, you know, when all these announcements are happening. I was traveling eventually on Thursday last week.

SPEAKER_02 9:59

So well, you know, I mean, listen, the news is the news. We we decipher it, we look at it, and it's I kind of like, you know, what'd the market do? What happened under the surface? That's this whole debasement trade we're going to talk about. The US dollar, which listen, a month ago, I know on this very podcast, I was mentioning dollar looked potentially toppy. A lot of people who look at this, like CFTC commodity traders, um, kind of their bullish positioning on the dollar. Speculators were very, very bullish, and the dollar's kind of up around a peak. I said, Yeah, maybe the dollar could roll over. Sure enough, that is what's happening. I said the basement trade, we'll talk more about that, but we'll get into the weeds of this. Bitcoin looked up like 20% last week. So Bitcoin went up a lot after he spoke. Actually, we have do you have those charts? Yeah, Bitcoin gold?

SPEAKER_03 10:43

Yeah, I have a chart of Bitcoin and gold. I want to talk talk about uh the dollar as well, but let's put that up the chart of gold and Bitcoin, gold and bitcoin. So you had gold mostly flat early part of the week until even after the treasury announcement, it was actually flat through the treasury of announcement because, like I said, it's a kind of a drop in the bucket. But then Besson coming out, and then it's like, wait a minute, what are you guys doing? Right? Are you that worried about this market? And look, the 30-year years shouldn't even matter that much. It's not that important for government financing, it's not that huge relative to five, 10 years, things like that. And it's not even a private market benchmark, right? The 30-year mortgage, we all think, okay, you know, wait a minute, the 30-year mortgage, surely it keys off of the 30-year treasury. No, it doesn't, it keys off the 10-year, and that's because most people own a home just for about 10 years and then they sell, right? That's why it's keyed off the 10-year rate. The 10-year rate is more important for the 30-year fixed rate mortgage, but the signal here was that the administration sees 5.3% on the 30-year as the pain point.

SPEAKER_02 11:50

Uncle. They called uncle.

SPEAKER_03 11:51

They called yeah, they called uncle. And implicitly, it's an admission that debasement or fiscal policy will continue going the way it is, which means it'll be inflationary.

SPEAKER_02 12:04

Let me ask um when you hear the word debasement, and for listeners who might not quite understand that lingo, it is a lingo we've been using, not we, the industry's been using for a minute here. What do you mean when you hear debasement? Or what do you think of Stone when you hear debasement?

SPEAKER_03 12:36

I hear the fact that look, we're I'll I'll put it this way. If you're in an inflationary environment and in the same inflationary growth environment, so to be clear, not stack not stagflation, right? Stagflation means you have inflation, but the unemployment rate is going up. Right now, that's not the case. The unemployment rate is 4.11%. So to be clear, I don't think we are in stagflation. I don't think we're close to stagflation either, right? But inflation certainly elevated. Now, two things can happen to policymakers, and this is policymakers at the Fed and administration slash Congress, they can come in and say, you know what, we don't want things to run hot. We want to get a handle on inflation, we want inflation to come down. So we're gonna raise rates if you're at the Fed, we're gonna cut the deficit, we're gonna reduce spending if you're in Congress or and or at the White House, right? Neither is happening right now. And so I and I think Besson sort of added fuel to the flames by coming out and saying saying, you know what, we're gonna put a band-aid on the treasury market because we don't think it you know uh reflects fundamentals in not so many words. I mean, he said something very close to that, and instead we are just going to try to you know push the 30-year treasury yield lower because 530 is that, like you said, the uncle point. And of course, on the other side, you have the Fed. The irony of all this is that a few weeks back, Kevin Walsh told us, you know what, we want the Fed to step back from the market, right?

unknown 14:09

Right.

SPEAKER_03 14:09

We don't want we want to be on the sidelines, we don't want to play the ball. Free market and we want to look at the you know, we want to look at the bond market and follow its direction. And yeah, we have three weeks later, Scott Besson says, Oh, this treasury market doesn't reflect fundamentals, so we need to directly intervene.

SPEAKER_02 14:28

Yes, that should be an interesting uh holiday party um with them. So we're jumping around, but I do want to bring up the Stanley Druckenmiller. So um Nick Timrose does great work at the Wall Street Journal. He's

Druckenmiller Calls Buybacks Price Control

SPEAKER_02 14:38

aka the Fed whisperer. I'm just gonna read directly from his ex what he said. Stanley Druckenmiller renders, and by the way, Stanley Druckenmiller is like the mentor, right? Of Scott Bassett, right? Correct in that.

SPEAKER_03 14:49

I mean, they worked together, they were together with Soros, but John Soros for decades, a couple of decades.

SPEAKER_02 14:56

Maybe like in 10 years or so, you know, we did whatever. Let's say we weren't at Carson. That's not the case, but let's just hypothetically say I was off and Sony did something, and I ripped him in the Wall Street Journal. That's what this would be like. That'd be kind of fun. Uh no, I wouldn't do that.

SPEAKER_00 15:10

Anyway, Stanley Druckenmiller rendered. I guess it would be more akin to maybe Bert White rooping us right now. Like I can see that. I totally get through that. That's not a shock.

SPEAKER_02 15:22

Anyway, uh the shout out to Burt. All right, uh, I'm just gonna read this from X, and I'd love your takes. I know you've been thinking about it. This is straight from Nick Temeros' X Feed yesterday. Stanley Druckenmiller renders an unfavorable opinion of Treasury Secretary Scott the sense use of buybacks to defend against higher yields in a market that's functioned normally. Now, here's the quote unquote part. This is what he said. I've spent five decades trading on a simple premise. Markets aggregate information no committee possesses, and prices are how that information reaches decision makers. The long-term treasure yield is the most important price in the world. It was also the only fiscal disciplinarian the U.S. has left. And then he had a little bit more. Every basis point of artificial yield suppressed is a uh subsidy of procrastination. But he is ripping them here. Return buybacks to their stated purpose, small, scheduled, off-the-run liquidity operations, announced that quarterly refundings, never off-cycle responses to yield curves, term out the debt honestly, and pay the price the market sets. And last thing he said here, this is again straight from Tim Rose's X. If the 30 year must trade at 550 to clear, this isn't a crisis, is an invoice, then do the only thing that durably lowers the long-term yields, address the primary deficit. And you can go read it. Uh that that that this article made waves. Literally, everybody was talking about yesterday. That's pretty rough. Um, Drucken Miller is a legend in this industry, not someone I'm gonna disagree with. Uh, where do you sign on all of this, Sonic? Because that is when I read it again, it's like, oh man, he is he's ripping them. What do you think?

SPEAKER_03 16:50

For what they, you know, I'll I'll get to the serious part of this. But what was interesting is clearly AI wrote the piece for Stanley Druckenmiller. I mean, which is fine. Because, you know, like full disclosure, I use AI too. I I don't use it to write all my pieces, but sometimes I use it like rephrase this. You know, I've written something that's 150 words, I want to shorten that. And my brain's at the end of my tether. So I'm like, okay, let me just see what you know chat GPT or cloud can do from an editing standpoint. In this case, I mean what was ironic, it's because one of the biggest tells that AI wrote something, it's got this construction saying it's not X, it's Y. And in the first two paragraphs itself, you know, in this R-Ed, Stanley Drakenmiller's R-Ped on the Wall Street Journal, is like, this wasn't liquidity management, it was price management. And then you see the dash, the hyphen, which by the way, full disclosure, I used to use it even before ChatGPT came out, right? So now I'm like, oh my God, now because I'm using it, everyone's gonna think I'm right using AI to write all my blogs and daily notes and things like that. Not quite, but still, in the first paragraph, he says this wasn't liquidity management, it was price management. It's that same construct that AI uses. It wasn't X, it was Y. In the second paragraph, he says volatility was contained and trading was orderly. This is before all this happened. It's not a malfunction, but the machine doing its job, right? So again, I thought it was just interesting that AI wrote clearly in low rotten. I don't think Drucken Miller disagreed, otherwise, he wouldn't have agreed to publish it, but yeah. Right now, but go ahead. I have my own take on both of them.

SPEAKER_02 18:28

Yeah, I'm just gonna chime in. So this is this is I don't know. I mean, this is why X is pretty cool. So literally, I'm just looking at the comments. Uh, Guy Berger, right? Our buddy Guy Berger, or is it Berger, right? Senior advisor at labor markets. I mean, he had a reply, and I we we respect Guy. I'm just gonna read what Guy said. I thought that's interesting because this is a kind of another angle. Straight from Guy's X replying to uh Timurose. I guess I disagree with the Stanley quote or Stanley Document quote, because I don't think the buybacks in question are anywhere near as powerful as he implies. If you think the tenure yield is an invoice, then so are the yields on whatever debt is issued to finance the buyback. That's pretty cool. I mean, someone we respect, right? There, his his take on that kind of real time.

SPEAKER_03 19:06

Um that's my take too, but it gets to what exactly they're doing. Okay, right, and what they're doing is a twist operation. If to Drocanilla's

Operation Twist Versus QE Explained

SPEAKER_03 19:17

point, you know, yeah, treasury should just pay the price. That's what the market's saying, this is the price. You need to pay the price or get your fiscal house in order. That's essentially what it's what he's saying. Right. Now, that would be true if they were printing money to buy long-end treasuries, right? And that's why I would say this is not quite QE either. Now, QE is not quite printing money in the way we think of money. QE involves the Fed buying long duration bonds with newly created reserves, right? Okay. And they're not sensitive to the yield. It's it's regardless of the yield, they're going to do it. It's not yield curve control either, because yield curve control means the Fed or Treasury is buying only when the rate hits a particular cap. Who knows? We could be there a year from now or even six months from now. But this wasn't that. This is uh something akin to operation twist, right? It buys, you know, the Fed usually, but or Treasury buys long duration bonds funded by short duration issuance. So duration goes down, reserves don't change, the quantity of money doesn't change. And the there were two prior operation twists, both by the Fed, it wasn't Treasury. One is on in 1961 under President Kennedy, they tried to flatten the yield curve, and then 2011-2012, Bernanke announced Operation Twist as part of that post-crisis stimulus to get the economy moving. But to guys' point is like, wait a minute, if you're buying duration and issuing debt on the short end, you're still taking the price the market is setting for the short end. So there is a price mechanism as determined by markets, even there, you know, and we can talk about that. So, you know, the price of the short end, and this gets to the dollar. So let's let's maybe that's a better direction to go. What is really unusual of what happened is that yields went up. And usually when yields go up, what happens? The currency becomes more attractive because you're getting paid more to buy, you know, uh bonds denominated in that currency. You're getting a higher interest rate. So usually the currency goes up when you raise interest rates, or when interest rates go up. Instead, the dollar went down, right? Which was interesting, right? So that was very unusual. The dollar and dollar index, we can put a chart on this corner. It ended the week about one percent lower. And yeah, so the what happens if the dollar goes down? That means you're importing inflation, right? And it's especially now we're importing a lot of goods for the AI build out, right? Especially things uh, you know, uh chips and things like that from South Korea and Taiwan, Singapore, even Hong Kong and China, right? So the dollar goes down, you're importing inflation, and I think that's the problem. Yeah, that sends short term yields higher, right? We're back to that operation twist. Yes, there it's like whack a mole, right? It's like, oh, long end yields are going up, let's buy. Them to push the yields lower, but uh oh, we have a problem on the shorthand now. What do you think? Maybe you tell Kevin Morris, don't raise interest rates, keep job oning markets and tell them we're not going to raise rates anytime soon. But we still are left with an inflation problem. I think that's what's you know happening. And this usually happens with EM, right? If you think about EM countries that go through a crisis, what do they do? They have a balance of payment crisis and they say, you know what? Uh our currency is being devalued, people are rushing out of our equity markets and bond markets, the currency is dropping, we need to prop it up. They raise interest rates. Now that's not great for their economy, but they're like, you know, we'd rather the interest rates go up and the currency goes up than you know protecting the economy at this point. And so they raise interest rates enough, eventually that becomes attractive to foreign investors, money comes back, currency goes up, right? But there's a transition period. I don't want to say the US is an EM country, it's certainly not, right? Definitely not. But the behavior we're seeing with interest rates and the dollar kind of reminds you of that. It gets to the you know, the whole debasement thing. Again, let's put that chart back up of gold and bitcoin. It was flat throughout the week until Scott Besson.

Dollar Down Means Imported Inflation

SPEAKER_03 23:38

It was Scott Besson's comments that came up, you know, that's what set the rally, right? Gold is up five to six percent over the week. Bitcoin, what Brian, it was up to more than 20%.

SPEAKER_02 23:48

Yeah, right. Let's hold on to the gains the time we're doing this. You know, something fascinating about Bitcoin. Um, Alfonso de Pablos over All Star Charts pointed this out. So shout out to him. He does pretty cool stuff. He talked about Bitcoin, and let me find it. I've got in front of me here. Every 3.91 years, I've heard this stuff before, the four-year cycle in Bitcoin. But he actually says this every 3.91 years apart, Bitcoin had a major low. Now just listen to this: January of 2015, December 2018, November 22, and literally right now. And gold, I'm sorry, wrong one, not gold. Bitcoin is just up 20%. Who knows? I mean, yeah, I don't know. I mean, but that's you could someone could argue Bitcoin was due. This was the thing that sparked it. Um, you know, we manage billions of dollars on the Carson Investor Research team for our you know financial advisors all across the country and their clients. Um, we just cracked $65 billion in total assets. Um, so we're we're growing fast, and we do have some Bitcoin exposure. We can't get into the weeds of it, you know, which models and things, but we we have a small allocation to some Bitcoin and some of our you know tactical aggressive models, which I think makes sense. Um, you think about it, and Bitcoin maybe who knows, maybe just another four-year low. I don't know. I mean, uh, it's hard for me to think, though, that Bitcoin being strong is not a bullish signal for risk assets, you know. And we talked about this many times. I keep it simple, right? I keep it simple. The last 10 years, when the dollar is going lower, usually that's a bullish sign. When the dollar is really spiking higher, means things are out of control, people are people uncomfortable, people are flocking to the safety of the US dollar. Well, we're seeing the dollar go lower on all the stuff that's going on. You know, I mean, when they had that big 2% drop on the Fed day, oh, I don't know what three weeks ago, four weeks ago. Uh, you pointed it out, and I agreed with you. The dollar actually dropped that day. You know, if the things, if things are out of control, I just would have to think the dollar might have more strength. And sure enough, four days later, the market ripped to new highs. You know, so those are some concepts. But again, that four-year cycle on Bitcoin is rather interesting. Again, maybe more of a risk-on type of play. Do you want to add anything on Bitcoin or what else you want to talk about?

SPEAKER_03 25:42

Bitcoin and the dollar to your point. The dollar going up is a risk factor.

SPEAKER_02 25:47

Yep.

SPEAKER_03 25:47

Right? The dollar is a risk factor that it is a risk. And right now we can clearly see the path. What would send the dollar higher in a sustained way? It would be if Kevin Wars at Jackson Hole this Friday comes out and says, you know what, we're really worried about inflation. We're going to send rates higher. It's at 3.6 right now. By the end of 2027, it's going to be closer to 5% rather than 4%. It's not going to be where it is right now. That's going to send the dollar higher. Going back to my point of interest rates go up, you know, that usually makes the currency more attractive, not less. But yeah, I think that's the risk, right? That's a risk to this bull market that we've nearing on four years. And for all risk assets, but as you and I have talked about, I don't think that Kevin Wars is going to do that. I think they're going to run things hard. I think they're going to do exactly the opposite. That's why gold is up, that's why Bitcoin's up. That's why the SP 500 is closed to all-time highs. And I think this continues.

SPEAKER_02 26:44

And you, on our morning call yesterday, our financial advisors here, Carson, pointed something out that I remember, but I forgot, but I remember, but I forgot. It was Jackson Hole last year, right? Where you can get into the weeds of what he said. But here's what matters. That's when gold took off after the comments from Jerome Powell last year after Jackson Hole. In essence, he kind of said, What, we're going to run it hot a year ago, and that's parked gold. I mean, that's kind of what he said, right? Yeah, we're going to run it hot.

SPEAKER_03 27:10

We're going to wait. You know, we think inflation is vertical. You know, inflation sort of, he didn't say it in so many words, but inflation sort of transitory. Here we are a year later. We're still waiting for these supply shocks to end. It's just that there's one every supply shock around the corner, right? If you look at the administration, I was kind of thinking to myself, goodness, they're pretty busy here fighting wars on multiple fronts. So, like uh, you know, putting that economic squeeze on Iran again, right? That's sort of on off, but that Middle East crisis still continues. Gasoline prices are above four dollars a gallon, right? Diesel prices are even, you know, I think in worse shape. And then they want to fight the bond market too, right?

SPEAKER_00 27:51

And then they want to fight Canada as well. For tariffs. It's a lot of fighting. Um, how much time do you have? I'm looking at the clock. How much time do you how much more time do you have? I have about 15 minutes or so. 15. I have. Yeah, we need to move forward. We we need proof.

SPEAKER_02 28:04

We literally could talk about this all day. Um, uh, one more question on this. This stuff's important, and we'll kind of maybe go through rapid fire on the other stuff we wanted to hit on. Uh Ed Yardini, I'm a big fan of Ed. He was on CNBC yesterday. Oh, I was gonna bring this up. Okay, yeah, yeah. I'll set it up then. He said the tenured yield is

Are Higher Yields Simply Normal

SPEAKER_02 28:18

simply back to normal. Four to five percent is a sign of a healthy economy. He also said, Um, remember late 1990s or most of the 1990s, yields were up around here, even a little bit higher. And last I checked, economy did good, stock market did well. Um, you know, clearly, like the ZERP world of zero percent interest rates. Yeah, that's not normal. Now, if we talked about this, we'll probably get into consumer and household debt uh if we assume we have time here. Um, but a lot of things are just getting back to normal. Where do you side with that? That four to five percent ten-year yield, you know what? That's where we've been historically. It's just we had some weird time out of the GFC, not of the GFC. Are we just back to normal? Where do you side with that here?

SPEAKER_03 28:55

I agree with them, but I would take it even further. Okay. I would go as far as to maybe argue this is something I'm thinking about. I'm gonna write about this this week on the blog, Carsonggroup.com/slash research. You know, that's where we publish all our blogs. Maybe yields have to be even higher, right? Uh, the way I think about it. So let me lay out the case here really quick in a couple of few minutes, right? You think about nominal GDP growth. What is nominal GDP growth? It's essentially nominal income growth, right? I mean, gross domestic income is really income that all of us earn wage, you know, those of us to, you know, earn W-2s, things like that. But then even small business owners, corporations, things like that, profits, it's all income growth for the economy. That's uh, and technically gross domestic income should increase should match gross domestic product, except for some measurement errors over time, right? But over long periods of time, nominal interest rates should move together with nominal GDP growth because uh you need some sort of equilibrium, right? Three reasons think about monetary policy a 4% policy rate, let's say the policy rate is 4%, or today's at 3.6, it means very different things in an economy that's growing at 4%, nominal GDP growth, versus 6%. If the Fed keeps rates unchanged, say at 4%, while nominal GDP growth is running at six, what does that mean? Policy is essentially getting easier. That means incomes, revenues, cash flows is rising faster than borrowing costs, right? So you're running the economy hot, which is essentially what you and I think is happening right now, and there's a reason why risk on asset are doing as well as they are. Then you have debt dynamics. If borrowing costs are four percent, nominal GDP growth is running at six percent, debt is easier to service, including for the government, but but also for corporations and households. For borrowers, what matters is the interest rate relative to how fast your incomes are growing, right? Then you get bond market dynamics as well, a four percent median to long-term treasury yield, right? When nominal GDP growth is growing six to seven percent, like it did in the last few quarters, that's a four percent treasury yield seems too low. Unless investors, unless investors expect growth andor inflation to collapse. Everyone's expecting this whole thing, you know what, growth is suddenly going to shift down to three percent or something. Okay. I don't think anyone's arguing that, right? They argue the opposite. Like AI is gonna boost productivity and growth and things like that, right? So faster nominal growth usually means you have stronger credit demand, you have higher expected inflation, higher opportunity cost of holding fixed rate bonds. So, what I did is I'll put this chart up. I was like, let me compare the current environment, nominal GDP growth, to what we saw in the 90s, 95 to 1999. Nominal GDP growth averaged 5.8%. Right now, over the last 10 quarters, 2024 to the second quarter of 2026, nominal GDP growth is averaging about 5.5%. So we're very close. Pretty much there, where we were in the late 90s with respect to nominal GDP growth. But look where interest rates are. Over the last two years, let's say 10 quarters, two and a half years, the 10-day yield is averaged about 4.3%. Whereas back in the 90s, it was about six percent. Short-term interest rates, three-month treasuries, right, which is the proxy for the policy rate, was averaging about five percent back in the late 90s. Today it's around 4%, right? So nominal GDP growth is running close to where we were in the 90s, rates are still lower. So, going to Yardani's point, yes, we are normalizing, but there's a question to be asked. Maybe it's not high enough. And you can also argue, remember what happened in the 90s. Maybe rates weren't high enough, and that's why we got a bubble.

SPEAKER_02 32:40

Yep, you're right.

SPEAKER_03 32:41

Then we got a lost decade. Maybe rates should have been even higher. And then we wouldn't have had a lost decade. So, anyway, I'll write this up. I'm still thinking about it, but hopefully that makes sense.

SPEAKER_02 32:52

Well, I mean, listen, those are concepts we've talked a lot about, Carson Group, all year. You know, inflationary growth environment, Fed run it hot, stocks do pretty well, economy does pretty well, all things considered, in the in the face of three, three and a half percent inflation. Bonds don't do as well. If you drop it, it hits your foot and it hurts, probably does better. Manage futures, probably adds some diversification. Uh, you said something. So, our buddy Med Faber, he has a new book coming out. Um, what's it called? What's it called?

SPEAKER_03 33:16

Oh, yeah, I have that. I have that.

SPEAKER_02 33:18

Investing

Long Run Investing And Keeping Wealth

SPEAKER_02 33:18

in America. Oh, you're oh you that didn't it just come out? Like he sent it to me. He sent it to you. Oh, okay. Okay. So here it is. Investing in America.

SPEAKER_00 33:27

Oh, awesome.

SPEAKER_02 33:28

Uh, he said 10 numbers from investing in America that sound made up, but they're not. This one's kind of what you just mentioned, Sonny. A dollar invested in the market all over the place if you hear that. Making a mess, yeah. A dollar invested in the U.S. stock market in 1800 grew to over $4 million by 2025 in real terms. The same $1 in bonds, less than $900. Now, there are these, he listed 10 that are just wild. There was one, here it is, here it is, here it is. When Cornelius Vanderbilt died in 1877, his $100 million fortune was larger than the U.S. Treasury. At a 1973 family reunion of 100 plus descendants, exactly zero were millionaires. I mean, that's that's wild. Um, the US dollars lost 97% of his purchasing power since 1913. It was just some really cool stuff. Um, so with Meb, and you got that, um, but investing in America. So I just thought that that's that, you know, the bond stock thing. Listen, we've we it sound like a broken record, and you're talking still higher yields. Hey, yes, we have bond exposure, but we continue to think stocks are gonna do better than bonds in this environment. That valuable statistic is amazing. Isn't it wild?

SPEAKER_03 34:34

Yeah, that's crazy.

SPEAKER_02 34:35

There are there are more, but just check out Meb Z and or check out the book.

SPEAKER_03 34:37

Yeah, this is why, you know, at you know, I'll and I'll tell Carson here, and especially even, you know, we work with a lot of you know, individuals who just come into money because of business sales, things like that. Shout out to our friend Jamie Carroll out at the private client services for you know, at Carson here, we work closely with her. I mean, Yumi, Barry, Grant, all of that, you know, in the manage portfolios, set up asset allocation. But a statistic she's told me, and she talks a client who come into a lot of money in really quick time is, you know, this is why you need an advisor, basically, right? To protect generational wealth. Because otherwise, you know, second by the third generation, a lot of the wealth is over. Forget four and fifth, four and five and sixth generation. By the third generation, it's all gone, right? And how do you set things up, you know, to protect that wealth? And I would argue that's why, you know, I think financial advisors play a key role, and especially here at Carson, that's what we do.

SPEAKER_02 35:34

And if you need a good financial advisor, we know some. Carsonwealth.com, check that out. Um, what do you have? Five minutes, Sonu?

SPEAKER_03 35:42

What do you what do you have? Oh, what do I have? Five minutes. I I want to have more time because there's a bunch more.

SPEAKER_02 35:47

I would I'll just say this. Um, Moderna was up 177% in one day. Healthcare had a great rally. You talk about just coming in the wealth. I mean, if you own some Moderna, you did pretty well. Um, according to our buddies over at B Spoke, only one stock ever, I think, had had a better day in the SP for 100 was like Hartford Group or Hartford Insurance back uh in 2008 with uh some some stuff from GFC. It's just an incredible move. But that's why you have a diversified portfolio. Hey, healthcare, we've we've talked on here. We think there's something going on in biotech. We have some pharma exposure, we have a slight overweight to healthcare. Um, I made the comment over the last month or two, like, you know, we haven't really liked healthcare for a long time, but you know, maybe it's gonna start moving. Well, got a little lucky, better be lucky than good with the huge move we saw out of uh Moderna. So so there's some action coming out of healthcare. So new, I mean, if we have five minutes, what do you want to hit on in these five minutes to make this as valuable as we can?

SPEAKER_03 36:35

I mean, speaking of things running hot, last week we got some hot data.

SPEAKER_02 36:40

Yes.

SPEAKER_03 36:40

Philly Fed. The Philly

Hot Data And The AI Driven Boom

SPEAKER_03 36:42

Fed manufacturing index. I have a child too with that.

SPEAKER_02 36:45

Let me let me just let me just ask you. The Philly Fed was historic, right? Again, B Spoke said going back like 700 months. It's good. This data goes back like 50 years. This was the seventh highest ever. It was like the highest month-over month change since I believe uh August or September of 83. Okay. All I know about Philadelphia is LeBron showed up. Is this at all related to LeBron showing up, increasing the manufacturing? I think so. No, you can't no, you're you're supposed to be the guy that says, Ryan, shut up. You're what are you talking about? You're turning into me, so I don't know.

SPEAKER_03 37:14

Maybe it is. I no, no, there's something in the water in Philly. You know, maybe Philly between LeBron and Bruce Wigstein. I don't know. And it's you know, it's uh I guess he's technically jersey shore, but it feels like Philly anyway. But look, the Philly Fed manufacturing index index went up to 47.4. We can put this chart up. It's the highest since 2021, nearly double the estimate, which was for twenty close to 25 points, and it comes in close to 50 points in 47, right? Okay, but I think what was important is the six-month outlook that jumped from 34 points to about 74 points. That is the highest since I think 60s or 70, you know, since the 70s, I think. Yeah, very long time, right? And that same day, so all this happens on Friday, Friday morning. Then we get the SP Global's flash PMIs, flash meaning it's an early read on the PMI for August. Right. That went to 56. That is the highest since April of 2022. Right? And most the big boom came from services. Services went up to close to 57, with the wave of, by the way, employment was also looking good, the sub-indices. Manufacturing is around 53, it's hanging in there. But yeah, look, we have a nominal boom here, especially on the industrial side. I would argue it's even a real boom, real as an inflation-adjusted boom. We got industrial production data last week as well. That was running hard, and it's mostly AI going back to maybe what's happening in Philly as well. It's it's this AI boom that's lifting all boats, you know, on this tight.

SPEAKER_02 38:47

The uh initial jobless claims 206,000, hanging around 200,000. The the employment data inside that Philly Fed was up 17.9 to 27.9. Just though, that was a huge jump in employment. We've seen some of these smaller regional manufacturings, not just Philly, but some of the others saying, hey, employment is looking better. That's one of our base case. Employment the labor market's a little better, and people give it credit for. Yes, last month's monthly job number wasn't great, but we still endure some positive stuff. I think that's going to be our advice. Yeah, well, that's a good point. That is a touche. That is a real good point. Um, okay, so you need to leave. You know, maybe what we'll do, I don't need to leave. I'll just kind of talk by myself for a little bit. I mean, all right, whatever. I got some more stuff I want to say. If you need to take the kids to the bus, that's fine. Jackson Hole and NVIDIA. Why don't we finish up with those two things? You take it, however, you want to talk about it. I know you got to get the kids on the bus here. Is it first day of school? No, you walk them to school. No, second day, second day. Yeah, I walk them to school. I walk them to school. Okay, okay.

SPEAKER_03 39:39

I need a little bit of time. Hopefully, the lunches are packed. Otherwise, in the next five minutes, I'm gonna be like, why aren't your lunches pack on my school meeting? But anyway, no, I'd rather talk about it. Put this on mute.

SPEAKER_02 39:48

I don't want to hear you yelling at your kids on our podcast.

SPEAKER_03 39:53

No, but Jackson Hole, we'll talk about it, I'm sure, on the next episode. True. Yeah, but I think what he's doing.

SPEAKER_02 39:59

You know, we you know, we're not allowed to make guarantees, but compliance, I'm gonna do it. I'm gonna do it. I guarantee we talk about Jackson Hole next week. I'm doing hoping I get my hand slapped too much, but listen, compliance, we're talking Jackson Hole next week. We guarantee we will.

SPEAKER_03 40:15

It's a joke. What Wars is gonna say is, yeah, we care about price stability. Of course you do, dude. It's your mandate. You have to care about price stability. So he's gonna repeat that. But at some point you have to walk the walk, you can't just talk, right? Okay, and but he's gonna say, you know what, I'm kinda still waiting for my committees. And you know, by the time they work, I'm gonna, you know, uh work on better data collection, the Fed's balance sheet. The irony is everything Bessend is doing, where it's opposite to what Wars has said he wants to do with things like the balance sheet, right?

SPEAKER_00 40:50

Okay.

SPEAKER_03 40:50

Anyway, I think that's what's going to happen. Nvidia will do NVIDIA. What do you say? I mean, you know, nothing's certain in life except for death taxes and NVIDIA earnings.

SPEAKER_02 41:02

I have used that quote with the media probably for two years now. I literally same quote, nothing is certain in life except for death, taxes, and NVIDIA beats on earnings. Although we'll say uh they they've been kind of weak ahead of earnings lately. They've also had some weak-ish, um, they being NVIDIA, uh, some weak, not a recommendation, some weak-ish, you know, kind of what it is. We haven't had a big blowout for NVIDIA with the stock in terms of strength afterward, but we'll see. Well, Sonny, do you have to hop and I'll talk about some tacticals or something? Yeah. You uh I'll hop.

SPEAKER_03 41:29

Yeah, good chatting with you, my friend. All right, good stuff, Sonny. Who knows how long? I've got a little bit of time, so I'll just keep going. I'll I'll I'll listen to the episode when it comes out as well. I was like, wait, Ryan bed for another hour.

SPEAKER_02 41:41

I'm I'm going to turn into Stanley Druckenmiller and just rip you. Everything you just said, I'm going to disagree with now.

SPEAKER_03 41:47

Don't use AI though.

SPEAKER_02 41:50

Not today. See you. We'll see you, Sonny. Thanks. All right, just a couple more comments. I wanted to touch on a few things. So our buddy Um Scott Brown, Scott Brown, I'll I'll send you the uh uh chart here, Pod Pony. But Scott Brown

Market Breadth Levels Sentiment Checks

SPEAKER_02 42:00

noted how a week ago there was a lot of bears were out there talking about this huge spike that we saw, the number 52-week lows on the New York Stock Exchange, right? Now, the issue with that is there's a lot of like close-in funds, or some ADRs, or some bonds, or some REITs, there's stuff that's not like pure stocks in essence. And the chart will show right now, Podpony, I'll send it to you. Scott let a common stock only. How many stocks are making new lows that are pure stocks that aren't influenced by, let's just say, higher yields, higher rates, some funky things going on. There are not a lot of new lows going on. So it's kind of hard to think we're just gonna fall apart here and make new lows without a lot of stocks making new lows, which we don't think is the case. Now, another chart I'm gonna share, I'll get this one to you, Podpony, just the SP 500. I think right around 7610. That's a big level. Why is that? That was the June 2nd peak. Remember, we had a June 2nd peak, then the market sold off, then eventually we made new highs again. Previous uh um, previous peaks or previous resistance should be new support. So we stay above 7610. That's a positive sign, but on the chart, we're also showing the advanced decline line on the S P 500. How many stocks going up and down, cumulative basis? That's still trending higher. And you can see there's two lines on each of those there. If we violate those two lines, yeah, then hey, maybe all bets are off in the near-term bullish phase. You got some problems. It's nice thing about market to kind of give you clues before trouble comes. Yes, August and September historically in a midterm year can be trouble, it can be volatile. I mean a pretty good start to August, all things considered. Wouldn't be shocked if we had a little volatility ahead of the election. But I think as long as we stay above 7610, the early June peak on the S P 500, I'd I'd have to say overall still net um kind of optimistic there. So shout out to Scott Brown on that one. Sentiment, AAI sentiment poll. We have now seen five weeks in a row of more bears than bulls. Now, there's other ways we can look at sentiment. Um, are there pockets of optimism? Yeah, there's always some pockets of optimism. But on the aggregate on the whole, I just don't think there's a lot of excitement out there. You know, and again, from that contrarian point of view, we like that, and that's a good thing. Now, I didn't get Sonu's take on, I mean, we might. To save this for next week, but the $40 trillion in debt was a huge um I choked with Sonu. Is that a milestone? Yeah, I don't think it's a milestone. But our US US government, $40 trillion in debt. Just a little context around this. It hit $20 trillion nine years ago, like right now. I believe it was September of 20 um well, nine years ago. What year is it? Yeah, okay. I guess uh 2017. I don't know. I don't even forgot what year it was all of a sudden. See, without Sonu, I don't know what I'm doing. Uh but nine years ago, right now, debt was $20 trillion. Nine years later, $40 trillion. You have to consider the denominator. We're not crazy about that, by the way. I mean, listen, that that's it is what it is. The deficits are run in 6% of GDP, continued spending. I mean, Washington doesn't agree on anything, but you could argue they agree on spending. Most, you know, Trump said one thing, AOC said one thing a while ago, and they actually kind of agreed on potentially spending more money here. So the deficits are real. So if you look at net household net wealth, nine years ago, it's like 101 trillion dollars. Most recent data, 183 trillion dollars. So, yes, there's a lot of debt out there. We're not crazy about it either. But then you look at how much equity is out there, there's been an incredible amount of equity. We talked last week, I believe, about this, but credit card debt on the year is actually down 1.1%. I don't think most people realize that. Whereas disposable income is up 2.4%. If you look at like liabilities relative to net wealth, and we'll probably dive more into this next week. Son who's done some good work on this, you could argue that households are actually less levered than they've been in a long time. In fact, years. Um, you could argue household balance sheets are in some of the best shape that they've been in a long time. Corporate America's balance sheets, yeah, they're not perfect, but they're pretty good. We just had a really good earnings season, as we repeatedly uh mentioned, you know, for the last month and a half or so. Um, so again, these these things matter. And and listen, this is a question we get every time I present, every time we do something, all the debt, all the debt, all the debt we pay. We've annualized between $1.1 and $1.2 trillion in our debt right now. Someone who's mentioned this before, that is more than our entire defense budget, right? So not crazy about it either, you know. And then then you hear, okay, what if yields keep going up? What if yields keep going up? You're gonna be paying more on that interest. Well, then it's that's not a good um thing. But the reality is there's still a lot more positives, and and the honest truth, we've had debt issues for a long time. That's just what our country does. We've when we cracked $20 trillion nine years ago, I guess I don't remember exactly, but I'm gonna assume that was a big, big moment in time and upset a lot of people. We cracked a trillion, I think it was like back in 81 under President Reagan. Took us 200 years plus to get to a trillion. Now we're 14 or an hour for 40 trillion. So congratulations. Um, and it's not just red or blue, you know, it's like literally every president has increased how much debt we have out there. Um, I believe it was $9 trillion under President Biden. Um, President Trump's added another $4 trillion this term. I think he had $7 trillion or so the term before. Um, the reality is there's a lot of debt out there, and it's it's been all different presidents. Um there's a I'm not famous, maybe infamous. I believe it's time. Time magazine. Is either time or newsweek? I think pretty sure it's time, though, with the Statue of Liberty crying, talk about all the debt that's out there. It came out in the early 1970s. All right. So again, we're not crazy about it either, but you have to look at the whole picture. You have to look at denominator blindness, you have to take these other looks at things. And with the debt that's out there, those are some things that we've been talking a lot about, the equity. I know the AI debt, one thing I wanted to ask Sonu about these AI names, they're they had massive cash

Forty Trillion Debt Credit Spreads Diversifiers

SPEAKER_02 48:01

flows, right? It is what it is. They had, you know, hundreds of billions of cash flows. Well, those went away. We've talked about this. The five large hyperscalers, those cash flows have gone away. Now they're going into semiconductors, but how are they going to finance all this debt? That's not slowing down. The AI spending, AI rollouts are not slowing down. Well, now they're going to finance it with more debt. And those are some things that is something that's um that's there, you know, and then we're watching it, but let's just bring it full circle. How are credit spreads doing? How are the credit markets doing? If there was a monster under the bed, we think the credit markets would sniff it out. Triple B spreads relative to like double B spreads and things like that. Um, we're not seeing worry. You know, the low, the worst credit stuff should be doing worse. We're not seeing that. Now, credit spreads have gone up a little bit, but they're nowhere near recent highs. So those are just some concepts to think about. Um, that things aren't as bad, maybe as they're telling us. Um, my take on Jackson Hole, Sunu gave his. Yeah, I think they're gonna keep running it hot. We'll see what happens. You know, we'll we'll see. I mean, they they have some good old family scuffles, you know. That's what uh that's what's got that's what they're that's what um that's what they're calling it here. Um we'll see everybody gets together, goes fly fishing, they have some fun. Um, but it'll be important. And the and you know, just going through history, there have been some big events, some big moments in time that were announced at Jackson Hole. So it's just something to think about as it comes up this Friday. Again, last year, that's when just check out a chart, what gold did from August to end of the year. It really, really picked up. And the market did just fine too. Uh, but gold was really the big winner, so we'll have to follow that one and see what happens. Just let me give me a second here, look at my notes. I don't think there's really anything else I wanted to um to touch on. Obviously, those NVIDIA earnings are big. Nvidia's down, I think six or seven days in a row coming into earnings, um, which you could argue is oversold. Maybe they can beat the lower bar and get a pop, but they really haven't had strong reactions to earnings uh for a while now, but you know, we'll we'll see. Um, you know, I mean that that the truth is tech tech's lagged a little bit lately, you know, the chip stocks have pulled back a little bit. That's that's that. So maybe it'll spark there uh from that point of view. Oh, I mentioned this in um we do a client-approved video called The Glass Half-Full. There there used to be one thousand dollar bills, actually, there used to be, and they still exist. I mean, technically they still work, I guess. We don't make anymore, but if you had a million dollars worth of $1,000 bills, that would be four inches tall. I don't know about like that. So that's that's a million dollars. If you look on YouTube, about like that, um, of one thousand dollar bills stacked on top of each other. If you look at all the debt we have, that would equate to four hundred miles high stack of $1,000 bills. To put this in context, that is 72 times the height of Mount Everest. Now, the good news, we have a lot of equity too. We do have a lot of equity, but when you hear things like that, it's like, oh boy, that's uh that's interesting. But you know, this is the world we live in, the market we live in, that's why we've with these deficits we have, we thought you'll just stay a little bit higher, gonna run it hot. All the concepts we talked about for the most part have been working out and the diversifier diversifiers. When you look at bonds, things like gold, things like managed futures. As a technician, I look at gold and silver already breaking out, and I look at something like copper, looks like it's about to go. A lot of these material stocks are hanging in there and look like they're about to uh strengthen up as well. So again, if you drop it, it hits your foot and it hurts. Those are still things you want to own in your portfolio. Those are things we're doing for our Carson advisors. I don't think I have anything else to say. We've covered it all. This is usually when I say, hey, Sony, what do you think? And then he talks for a while. Walmart was down 9%. Uh big, big name, obviously. Um, you know, that was their worst day since I guess my math is or my date is right here, May 17th, 2022. Their same source deals uh were very disappointing. Said I'd do some drug pricing, some of the issues there. Um then you can just easily flip it and say, well, target's earnings are strong, home depots were solid, deer was solid. So, you know, you always pick and choose uh things you want to tell any narrative you want, but that was that was in the headlines as well last week. All right, everybody, thank you so much for listening. Um, this is always fun. We enjoy doing these. Hopefully by now, Sonu

Back To School Wrap And Listener Requests

SPEAKER_02 52:16

uh is not yelling at his kids, making a last-minute lunch. Who knows? Maybe they maybe he is. Um walking them to school. And and it's uh everybody's getting back to school, right? I remember last week I did this from Penn State University, dropped my daughter off. She's finding her way, you know, as a first year uh freshman at Penn State. A lot of people are dropping their kids off right now. So good luck to the parents, my wife. So it's been emotional, you know, losing, uh not losing. That's just that's the wrong word to use, but you know what I mean. Uh, with her daughter moving on to uh college, but it's uh it's an emotional time for a lot of people. So thinking of you there, uh for sure. Oh, you know, one last thing. Uh I I'm not wearing headphones this week. Look at this. The the the thing that comes, the little part that goes on, I don't know why this popped off. And I cannot put this back on my headphones to save my life. I was trying to do it. So hopefully by next week I figure out how to put that back on. It's just one of those things that the the squishy part that goes on your headphone. I have no idea how it came off. I don't know. I usually just blame my kids for stuff like that, but um, we'll see. We'll see. I'll try to figure that out. Everyone, thank you so much. Um, please to help this podcast continue to grow. Um, give us a like, give us a follow, positive review, negative review, can't leave the witness, but we do like those comments on YouTube. The algorithms really like that. Share this with your friend, share this in the industry if you can, or with someone, if you like what we do every single week on facts versus feelings. And with all that again, this was episode 202 of facts versus feelings. It's all about debate. There you go. See you by next week. Take care. Thank you. Information provided on facts versus feelings with some of our geeks and Ryan Dietrich are for general information only and are not intended to provide specific advice or recommendations for any individual. The statements and opinions of show guests may not be reflective of CWM LLC or its affiliate. Past performance is no guarantee of future results. All industries are unmanaged and may not be invested in directly. Investing involves risk, including possible loss of principal. No strategy assures success or protects against loss. To determine what may be appropriate for you, consult with your attorney, accountant, or financial, or tax advisor prior to investing. Guests on facts versus feelings are not affiliated with CWM or LLC.