Tom Lee Is STILL Bullish On Stocks, Bitcoin Despite Shakeout

0:00Hello, everyone. Tom Lee is hyper bullish on the stock market and on cryptocurrency. ChaTGPT has officially killed the job market and we unpack what's going to happen when quantitative tightening ends. We are live today from the desk of Anthony Pompliano.

0:23Before we get into today's episode, I need your help. My goal is to get to 1 million subscribers on YouTube. And right now we have just over 36 ,000 subs. So hit that button and let's get into it today. All right, ladies and gentlemen, this is exciting. Tom Lee, the GOAT Wall Street analyst. He was on CNBC yesterday. And let me tell you what, Tom Lee is bullish. Take a listen to what he thinks is going to happen in the stock market and with crypto. I think the market has a lot of walls of worry because we've got the shutdown. We've got China. We got the Fed speak, but the The market's been up six months in a row now.

0:58Only six times since 1928 that's happened. So if you look at November, we're up five or six times. And in 1942, it was flat. So basically, November should be really strong. I think at least 200 points on the S &P. So maybe... For November? Yeah, maybe even 250. So maybe we get to 7 ,100. See, that's a call that I just wish you wouldn't make a call like that, right? Well, you could... 250? You're shifting to 3 % if that makes you feel better. It does make me feel a little bit better. Because 250 points to say in November, 250 points. You're giving a time and a size. But maybe we wobble the first couple weeks just to digest all the games.

1:38I want you to quit while you're ahead, but I have to ask you about Bitcoin. I mean, you want to go out on a limb there, too? Because it's weak again today, 107. Go below 100 or no? Well, you know, Bitcoin, I mean, if I look at everything since October 10th, because that was the biggest liquidation in the history of crypto, like bigger than FTL. Like a margin call. Yeah, it was like almost a miniature rupture, like a tsunami. We're only a couple weeks from that, so I think the market is consolidating. But if I look at fundamentals, like Ethereum, stablecoin volumes have been exploding, application revenues at all-time highs.

2:15So right now, fundamentals are leading price in crypto. So I think eventually we consolidate, and then we rally into year-end. Now, I got to say, anytime I see Tom on CNBC, I get hyped up. It's like having your favorite musician, your favorite artist go up there and do what they were made to do. Tom understands where markets are going. He's bullish. If he's bullish, I'm bullish. And it is not that crazy to think about stocks and crypto continuing to go up in a market where we see that quantitative easing is going to come back. Interest rates are going to keep going down. And the economic boom that is being driven by technology innovation.

2:50All that makes Tom bullish. And my guess is he's probably more right than wrong. So buckle up. Things are about to get fun. Chat GPT, the killer product. Let's kill the job market. That's the big takeaway from new data making its rounds online. Just look at what has happened over the last three years since Chat GPT launched. It has been a massacre in the job market. The S &P 500 has gone up into the right, yet total job openings have been cratering at the same time. If you ever wanted to see a visualization of the K-shaped economy, there you got it, folks. Asset owners are winning while salary-based workers are finding their job prospects tougher and tougher and tougher.

3:31The longer this goes on, the worse the situation for them. But you don't just see this in job prospects via job openings. Companies are simply hiring less people. You see it in every single data point that's related to jobs. And the craziest part is that everything changed in these charts when ChatGPT launched. It's really hard to say that the automation, the new digital workers that are being done by artificial intelligence, that they're not having a profound impact. And of course, companies, they're becoming more productive. So it incentivizes them to do more of this. They're doing more with less, which means they're more profitable, which means they're more valuable.

4:07Now, ChatGPT is the software version. There's also a lot going on in hardware. For example, we know that China is manufacturing an immense amount of hardware, especially for robotics. Take a listen to this clip from TBPN recently, where they described how China is winning in the hardware wars. It's sad, but it's like, you know, the supply chain here is like China's China makes more robots. You know, if you go back five years ago, China made as many robots as roughly Germany, South Korea, Japan and the US. Right now, China makes more robots than all of them combined. Right. And the cost that they do that at is way lower.

4:43And like, well, the Japanese companies argued that they're that the Chinese robots are shit. yeah, but you speed run up quality faster than you speed run down on cost. And the same applies to Germany, although Germany sold some of their best robotics companies to China and all the tech got transferred. We don't have the manufacturing supply chains to turn raw goods into motors or actuators. And if we can, or when we do, it costs 10x as much. And so it's just like it's impossible, at least without some huge industrial policy for the US to compete here. Now, it's kind of crazy as an American to hear how well China's doing.

5:22We can complain about it, but my suggestion is that we should step up and start competing. And that's exactly what Jensen Huang of NVIDIA is doing. He says that he is going to bring back American manufacturing. Slap a flag on this guy's shoulder. He's a patriot, and he is trying to bring back American jobs. What an incredible story for him to go from the booth at Denny's to now trying to save the American economy. Take a listen to what Jensen said here. We can't afford to have the critical manufacturing of things that are technologies and products that are so important to national security be manufactured around the world and can't be manufactured here.

6:01And I think that argument is sound. It makes perfect sense. And we decided that we would go all in on bringing manufacturing back on shore. And so I think it's great for jobs. It's great for national security. It's great for supply chain resilience. It's great for our business. It's great for America. I think everybody wins. It's terrific. Now, I don't know about you, but that gets me pretty excited to see one of the most valuable companies in the world, the CEO saying he's going to get the job done. We're going to bring back American jobs. Now, whether it's ChetGPT being disruptive in the software world or China trying to take over the world in robotic hardware manufacturing, All I know is that AI and automation, it's taking a sledgehammer to the job market and we got to do something about it.

6:45Binance Research has one question for us. What happens after quantitative tightening ends? Well, they say that the Fed is now entering a neutral or a frozen phase for its balance sheet where the total size will remain static for now. As its holdings of agency debt and MBS mature, the principal will be reinvested into short-term treasury bills. This alters the composition of the balance sheet. not its size. That composition is worth paying attention to, folks. However, even with a frozen balance sheet, commercial bank reserves held at the Fed, which obviously is a key measure of system liquidity, that commercial bank reserves will continue to decline slowly.

7:23This is because as the economy grows, so does public demand for cash. When banks withdraw cash from the Fed, as they tend to do, they're withdrawing that cash to meet customer needs. Cash on the Fed's liability side increases. It's just math. To keep the balance sheet balanced with assets constant, reserves must decrease. This is known as a passive liquidity drain. Therefore, the Federal Reserve of the United States of America cannot freeze its balance sheet indefinitely. Once reserves passively drain to a minimum comfortable level, that's their phrase, minimum comfortable level, the Fed will be force to resume balance sheet expansion, even if it isn't called quantitative easing.

8:04The purpose of this future expansion would likely be to organically grow reserves to offset the drain from cash and circulation, thereby maintaining an ample level of reserves to ensure financial stability. All that to say, QT is going to end and QE is coming back, baby. Interest rates are coming down and asset prices, they only know how to go up and to the right. That's it for today's show. Thank you guys so much for watching. I'm having a blast putting this together. We only have just over 36 ,000 subs on YouTube. With your help, we're going to get to my goal of 1 million. The people are saying it's not possible, but hit the subscribe button to prove them wrong.

8:41And I'll see you guys live tomorrow from the desk of Anthony Pompliano.