TOTAL CHAOS! The Fed Has NO CLUE On Interest Rates

0:00Hello, everyone. The Federal Reserve cut interest rates yesterday, but they created an even bigger mess in the process. President Trump explains his views on the U.S. economy, and Eric Jackson, the GOAT hedge fund manager, he sits down to explain what's happening with Open Door Stock. We are live today from the desk of Anthony Poffiano.

0:27Before we get into today's show, I need your help. My goal is to get to 1 million subscribers, but we only have 24 ,467. That's where you come in, my friends. Hit that subscribe button and let's get into it. All right, ladies and gentlemen, as expected, the Federal Reserve cut interest rates by 25 basis points yesterday. Chairman Jerome Powell held a press conference afterwards and he shared information that people on the internet, we've known it for months. What's this guy talking about? He told us in the near term, risk to inflation are to the upside and risk to employment are to the downside.

0:59Wrong, but that's what he said. Take a listen. In the near term, risks to inflation are tilted to the upside and risks to employment to the downside. A challenging situation. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate. With downside risks to employment having increased, the balance of risks has shifted. Accordingly, we judged it appropriate at this meeting to take another step toward a more neutral policy stance. Now, Powell's posture throughout this press conference, it seemed to just be one of defeat. The guy is losing. He's waving the white flag.

1:35He's just giving up. He did not appear excited to be there, nor did he seem enthusiastic about the challenge that he faces. A very big reason the Fed is in the current situation is because they went from being data dependent in past years to economic forecasters more recently. That's dumb. Rather than simply look at the data and manage monetary policy based on the current measurements, the Fed decided to get into the prediction game. And they did that by anticipating high levels of inflation from tariffs. But as we now know, and as I predicted from the start, even though some of you thought I was crazy, tariffs are not inflationary.

2:08The sky-high inflation that the Fed thought was coming, it never showed up. This means that their prediction, it was not only wrong, but the monetary policy stance of keeping rates higher for longer, that was erroneous as well, like that SAT word. But things are even more complicated than they seem at the Fed. There is massive disagreement between the Fed's board governors about where interest rates should be right now. Navy Federalist Chief Economist Heather Long explains. She says, this is wild. Look at the 19 different Fed leaders' predictions for interest rates the rest of 2025. You can see the tension at the Fed in just one chart.

2:42One person wants to hike rates. Six people think the Fed should keep rates the same. Two favor one additional cut. Nine people favor two additional cuts. And then there's even one person, who everyone thinks is Stephen Myron, who wants the equivalent of five rate cuts by the year end. It's likely that we're going to get two more cuts, one in October and one in December, she says. But you can see that the battles ahead are there. So just think about how insane things are for a second. Like, just think about it. This is crazy. Someone wanted to hike interest rates yesterday. Someone else wanted to cut interest rates five times before the end of the year.

3:15Not only are people disagreeing on how many rate cuts to make, but they can't even agree on whether we should be hiking or cutting interest rates. What is going on at the Fed? What are these people doing? This highlights the problem with human-led monetary policy. It is impossible to have individuals successfully manage the cost of capital. People are bad at making complex decisions. Add in the fact that we ask a committee of people. We take one person and now add a bunch of people, and we ask them to do it, and you can see why it gets even harder. Management by committee is a surefire way to make bad decisions.

3:47But if that wasn't bad enough, look at this chart of interest rates just since 2020. We've been all over the place. How is someone supposed to plan their life around such variability? It's really, really hard to navigate the world if the cost of capital can go from 2 % to 0 % to over 5 % and back down towards 4 % all in the span of five or six years. This is crazy. It's just insane volatility. And that insane volatility doesn't need to be there. Bitcoin's monetary policy in comparison, that was set in 2009, and it hasn't deviated from the programmatic monetary policy for a single second in more than 15 years.

4:27There's lessons in there for the Fed to learn from Bitcoin, in my opinion. Lastly, remember that the 25 basis point rate cut all the way back in 1998, that helped kickstart an insane rally in tech stocks during the dot-com boom. As Peru points out in that tweet, the current situation is eerily similar. The Fed is cutting rates during an innovation boom related to artificial intelligence. If the central bank does multiple cuts this year, which is what they said they're going to do yesterday, then we should expect stocks to fly higher. The Fed's behind the curve. Duh. They chickened out yesterday.

4:59They only did a 25 basis point cut. But if ultimately it is not going to matter for investors, everything's going higher. So all you have to do, just hold on to your assets and enjoy the ride. Oh boy, here we go. So the president of the United States, he's taken victory laps about his tariffs and the stock market winning. He recently spoke to the All In podcast about what has transpired since Trump announced the tariffs. Take a listen to this conversation. Two months ago, we had dinner and you said you're very sensitive to the exchange rate. And it turns out that what you said actually happened, which is the exchange rate has completely stabilized.

5:33Despite all these other fluctuations, the dollar has held up. Dollar's held up. The dollar's held up. And honestly, everything's held up. It's really working. no inflation. They said, oh, tariffs will cause inflation. They've been wrong about everything. And these guys, and for the most part, they've said, you know, Trump was right because we've taken in hundreds of billions of dollars at levels that nobody's ever seen taken in. And so we've taken in all this money and there's been no inflation. It's just been hard, I think, for them to admit it because it's not that you were right. You were very right.

6:06You know what I mean? Even after Liberation Day, remember, they tried to create this panic in the market. the market went down because they created so much fear. You called a panic. And you were right. It all bounced back. No, you called, there's a tweet. You called the absolute bottom. You posted on Truth Social, this is a great day. It was literally the bottom. And it's kind of straight. I saw 35%. This is a great day to invest. Exactly. I hope a lot of people followed it. A lot of people did, I guess, because, you know, you see what's happening in the market. No, it's been a great thing to watch.

6:36They had 71 economists, and they put me in that group. And I just, myself and one other person were right. Everyone else was wrong. But it's even more than anyone ever thought. But when you posted that, were you thinking something or were you seeing something? No, I just felt it was low. I just felt it was low. It's more instinct, I think, than maybe anything else. Certain amount of brain power, but instinct maybe is more important in some cases. but I've had an instinct and my instinct has been for a long time. This is what the country has to do. You know, this is what happened to us. Other countries were doing this to us, but we are in a position where we can do it better, much better.

7:17Nobody is able to do what I'm doing now with this. All right. So first of all, it's pretty cool. They're standing in the Oval Office, just chilling, chomping it up with the president. But now everyone's going to focus on that inflation data. And Trump has been right because the data has been much more favorable to his worldview than what the economists thought. But my favorite thing is that the president called the bottom of the stock market. There's nothing more democratic, in my opinion, than the leader of the free world publicly tweeting to the citizenry to buy the dip and help people make money.

7:48It helps that the president of the United States, he can do certain things economically to stimulate the market. So a big lesson from earlier in the year is to simply buy stocks when the president tells you to do it. Now, is that almost too basic? Absolutely. Shamelessly basic. I don't make the rules though. Keep it simple, stupid. He says buy, you buy. That's been an incredible investing strategy for 2025, and it's likely to continue to be one throughout his presidency. Now, the big story in traditional finance is Opendoor. This stock was 50 cents back in July. It's now over$10 today. And the man who drove the entire rally, his name's Eric Jackson.

8:27He runs a hedge fund out in Toronto. And he sat down with me recently to explain exactly what's going on with Opendoor. Here's my conversation with the GOAT, Eric Jackson. I'm not even going to talk during this conversation. No, you're just going to sit there. Tell us about Opendoor. This seems to be working, man. Yeah, it's been wild. I mean, I think, Anthony, when you invited me to come to this conference, it was before I had actually sent a tweet out about Opendoor for the first time, which was like July 14th. So kudos to you for having the foresight that all this was going to play out the way.

9:02July 14th, when you tweeted, what was the share price of Opendoor? When I tweeted, it was 88 cents a share. 88 cents. I had bought, I don't know, my average cost, I think, was like around 73, 75 cents a share. And on June 25th, it hit its all time low of 51 cents a share. And Kerry, the former CEO, was dumping shares as part of a 10B51 plan at 56 cents a share. All right, that's not good. I think that this is the single most successful activism campaign to happen in recent history. Point blank period. Forget the retail component. The retail component is interesting. But in the last 60 days, you, along with the open Army have been able to get the CEO to step down.

9:51You've gotten the management team to stop dumping their stock. You've gotten some of the management team to buy more stock personally. You've gotten a new CEO who is the former COO of Shopify to come in. And you've gotten two of the former founders, Keith Reboy and Eric Wu, to come back and join the board. The stock has gone from$0.51 at the bottom to$10.50 was the close yesterday. I don't think that there's a better activism campaign that's happened probably in a decade.

10:21So the question is, was that the game? Is it over? Or what do you think about Open Door moving forward? And what do you think the opportunity is for a company like that? Well, I didn't think it would happen this fast, but no, it's not over. I mean, on July 14th, I mean, the whole tweet thread was about how this thing in three years could be worth$82 a share. Now, we're still a long ways away from that. So that's an 8x from here. But obviously, the world has sort of changed over the last, I think the end of today, it's going to be nine weeks since this campaign has been going. And I know the company a lot better.

11:01I've spoken with lots of folks inside and outside the company to understand the opportunity set. and the company's turned into what I call a cult stock. I don't think of it as a meme stock. What's the difference? Like, I personally would not be interested in owning any of these meme stocks that CNBC talks about as being meme stocks, like GoPro, what was another? GameStop, AMC. Dunkin' Donuts, or not Dunkin' Donuts, Krispy Kreme was one. I guess American Eagle was one for a while. And then in the prior instance, GameStop and AMC and I guess BlackBerry, although the BlackBerry fans tell me it's a real company.

11:41But all these companies, like you couldn't pay me to own their shares because they're shooting stars. They got popular for reasons unknown to me, frankly. Colt stocks, besides Opendoor, I can only think of Palantir and at the end of the last decade, Tesla. You remember, you used to go to parties in Tesla and like probably, you know, if there were 100 people at the party, 50 were telling you, man, that company is going bankrupt tomorrow. And then 50 were saying Elon is like this genius. He walks on water. Like, I can't wait to see like the bears take it, you know, because he's going to lead them to the promised land and all this kind of stuff.

12:19So and in both cases, it was really like those cult stocks were retail led, you know. So retail got it before Wall Street, before the so-called smart money of the hedge funds and institutional managers. I mean, I remember watching, I mean, I didn't, I wasn't smart enough to catch Palantir. But I remember when Palantir was at$5 a share, you know, at its low point. And there would still be people that would go on business TV and say, it's too expensive. It's nuts how this thing is valued on this forward price of sales. this is a defense contractor, you know, these retail, they just don't get it.

12:57And yet they got it, you know, and they saw sort of the vision. So I think of a cold stock as a sort of like a long-term compounding, real business. And that's exactly how I see Opendoor. So for me, like today, especially with Kaz now as the CEO and with Keith and Eric back on the board and how smart they are. It's going to take some work, but I definitely think$500 a share is in play like five years from now for this company. I mean, real estate is a massive global market, and nobody's come along to create a carvana of residential real estate. And so that's the opportunity. And I think that's how Keith sees it.

13:41I think Eric Wu sees it. I think different people use different terminology. I've heard Keith talk about the Amazon of housing. So that's what they're going after here. And I don't think the COO of Shopify would have quit his job and joined a$3 billion market cap company if he didn't see that possibility. What you're talking about is going from a$3 billion market cap to a multi-trillion dollar company. I mean, this is, as you said, the largest real estate or real estate is the largest asset class in the world. It also happens to be right now a major pain point for a lot of people in America and obviously internationally as well.

14:13What I'm fascinated by is yesterday, and this is good timing on our part, the stock was up 80%. Now, not many stocks go up 80 % in a day, right? But it was the day that after they had announced that the new CEO was coming in and that Keith and Eric ran into the board. So this was obviously the market liked this. But more importantly was it also was the day that the new CEO's pay package came out. And usually, if I said, hey, guys, a CEO's pay package became public, what do you think? What do you think the response was? Almost always is, he got paid too much money. No matter what the numbers are, he got paid too much money.

14:53The market loved the fact that if he can get the stock to$33, he personally is going to make$2.6 billion. Think about that for a second. I didn't know it was that much. The market, right? More power to him. If he gets it to$500, I don't care. But this idea that he's also getting paid$1 per year, right? So it's a pay package where he basically gets nothing if he doesn't perform. But if he performs, he gets a ton. How do you think about this idea of that is a 180-degree difference? He's got skin in the game versus the last CEO was selling shares and basically didn't care what happened to the stock.

15:31They were just monetizing all of these RSUs that they were getting. I don't see what, like, remember all the brouhaha about Elon's pay package from a few years ago? And this was after he 10x'd the stock. So there's, like, shareholder lawsuits after, like, who 10x's the stock and then complains about it? Like, I didn't get it. Like, if you, if he, I don't know what, I forget what Elon got, but it probably wasn't enough from that. And I say, hey, this is America, and let a Canadian come down and run this company and make as much money as he wants. If you become a three billionaire, I mean, this is the greatest country in the world.

16:11So I say, Godspeed. All right. Last thing on Open Door is you've become very well known with Drake because you keep standing outside his house. Explain what you're doing outside of Drake's house every day for 20-something days now. This is day 24. I'm obviously not going to be there today, but the Open Army has voted and they told me that I got to keep doing these videos even if I'm in New York. So I'll do a day 24 video today. I was there a couple of days ago. I got to give full credit to my son, Julian. He's not here today. He had to be in school up in Toronto, but he's my 16-year-old son. He's the one who came up with the idea.

16:50This was probably in, I don't know, week three or four of this campaign against Opendoor. And he said, Dad, you're always talking about Opendoor, you know, when you're at the dinner table and you think it's the greatest investment opportunity you've seen in your career and all this stuff. He said, you know, you know what you should do, though? Like most people don't, they don't watch CNBC. They don't watch Bloomberg and all this kind of stuff, you know. So how do you communicate this opportunity to them? And I I said, oh, that's a really good point, Julian. And he said, yeah, you know what you should do?

17:24We live, like, not too far away from Drake's house, like a sort of, like, five-minute drive. And Drake is, obviously, he's beloved in Toronto. And everybody loved, like, when he was, you know, he sort of made people from Toronto proud to be from Toronto. You know, they're sort of like, you know, I think everybody, most people in Toronto, they kind of wish they lived in New York, but they don't. And so they kind of, like, feel like the little brother. and are we good enough and all this kind of stuff. Finally, a Canadian admits it. Finally. So when you see Drake become this dominant star, you're like, wow, that's amazing.

17:58Maybe I could do that too. But he's obviously had a bad year this last year, right? And I had a lot of people kind of turn his back on him, people who he thought were formerly his friends. So I said, that'd be kind of great because maybe he'd be interested in buying some open door. You know, like I hear he's into sports betting and I think he lost$350 ,000 on Sinner last week in the U.S. Open. And I know he does crypto trading and stuff, but I don't know whether he's done like stock trading. You know, maybe I could be like a Toronto guy to a Toronto guy, you know, and make the pitch on why he should like really compound his wealth, which he has a lot of already, obviously, into something that I think is going to be this 100x idea.

18:43and so I said, Julian, great idea. Let's just go, we could shoot this this afternoon. You know, you can film me. And he said, well, dad, you can't just do it today. I said, why? And he said, no, that's not how it works on social media these days. You gotta, you'd have to go every day until he actually buys stock in Opendoor. And it's like, every day? He's like, dad, that's how it's gonna go viral. You know, that's how it works. And so, all right, you're the boss. And so he's been my video guy up until school started just a week ago or whatever. And I've had to do some on my own. But I think we've got 4 million impressions of these little two-minute videos in 24 days.

19:28Well, you're standing outside his house, by the way, with a sign that has the ticker. and i did i actually did get word yesterday from from someone at open door like high up that uh we've we've heard from drake's team that he likes he likes you you know in front in front of the house and and and any and he's he likes open door like you know and this is when it was like 10 50 and you know all this kind of stuff so who wouldn't you know this stock is like moonshotted So I don't know exactly what that means. You know, I've told the people at Open Door, like, why don't you guys do a Super Bowl ad with Drake?

20:04I mean, like, come on. It's a no-brainer and stuff. And, like, you know, it's good for him, good for you. Take advantage of this. This thing has been totally, you know, organic the way it's developed. I was flying down here yesterday. I was on the plane, and someone bumped my, you know, my shoulder next to me. And he's like, aren't you the guy who, like, makes all these, like, Drake videos in front of his house? I said, why are you doing that? And I said, well, it's about Open Door. Have you heard of Open Door? And he's like, no, I haven't heard of Open Door. But I really like those videos. I'm going to check this Open Door out.

20:34And so, you know, I think that's the whole point of this is like hopefully Drake invests. Hopefully people that like Drake invest and get fascinated with the stock market and like get curious and see that. I think it's like a much more productive way to, you know, invest your money rather than sports betting, me personally. But, you know, that's my hope. It just brings a whole new set of eyes and ears to, you know, not just open order, but just like how great stock investing can be. Can you imagine being the 60-year-old going to school? You know who his dad is? He's the one who stands outside Drake's house.

21:09Julian tells me that everybody knows about these videos now at the school. I'm sure. And what's more than that, he said, like, dad, like, all the dads are buying open stock. It's like, you know, so-and-so's dad just bought$50 ,000 worth of open stock. And so, like, yeah, everybody's – I'm glad the stock is up. It'll make the first, like, parent-teacher meeting, you know. A little easier. Yeah. All right. All right. So you have a hedge fund. And the idea of your hedge fund is you're using a bunch of AI tools to try to find 100 bagger opportunities. As soon as people hear that, they're interested.

21:42Explain what you guys are doing in terms of identifying things like Opendoor, where you think that there are specific opportunities for these things to rapidly appreciate. Well, it's tough. You know, like there are 100 baggers and public stocks aren't available, like especially as all these great companies like OpenAI stay private for so much longer. It's usually the VCs get the first crack at these things. But, yeah, the first iteration of our first AI model a couple of years ago flagged Carvana when it was$11 a share. After it had gone from$400 in 2020 down to$3.50 in December 2022. And then it was sort of on the upswing now at$11 and said, we should get in.

22:27And so, at first, I thought the AI model was like, you know, maybe like the engineer had made a mistake, like your guy Shane or something. Like, are you sure, Shane? Like, you want me to make this the second biggest position? And I had traded Carvana, but, like, everybody was negative on Carvana at that point. Everyone was like, oh, the thing's circling the drain. A bunch of criminals running this company, they would say things like this. And so he came back a week later. He's like, no, no, this thing's rock solid. You should get in. By that time, it was$15. And now it's gone back. It's close to$400 again.

23:03And I remember talking about it on CNBC at the time, a couple weeks after that, and there was just silence in terms of like, you know, there was no like frenzy. There was no like, I want to get into the next Carvana is Carvana. I want to get into Carvana. Like there was just like no interest, indifference. And yet now, so we can.

23:32We did, we were really right on with that. Let's try to do more of that. Let's try to find these companies that kind of share some characteristics that Carvana did. And so that's what we've been working on. And what I would say is there are, you know, a lot of good examples out there that there's no, it's not like you find these 10 characteristics all the time with all these kinds of companies. It's more the case of there's probably a list of 40 things that happen if you looked across like a set of like 10 or 15 of these kinds of companies. And what you want to look for is maybe a certain threshold, like say 40 % of that list of 40 being hit.