Becoming the Amazon of Real Estate With Rocket’s Varun Krishna, Roaring Bank Earnings, Wall Street Fires on All Cylinders

25:16We have better models on our clients. We have better understanding of where they are in the conversion funnel. And so we are, I would say, not just like connecting the homeownership journey. Josh, we are fully, fully reinventing it. You know, it's AI powered. It's data driven. It's built on trust. And the one thing I would also say is that this is very much going to translate into core KPIs. And one of the things as an investor - new KPIs or existing KPIs that will be supercharged? I would say it's existing KPIs that are supercharged, but it's ones that I think that our investors should be able to hold us accountable to.

25:52Are we growing the top of the funnel? That's one that we've talked about. Are we driving massive conversion improvement? Are we becoming more efficient and reducing the cost to produce a loan and obviously thereby creating more value for clients? And then are we driving a recapture rate that is best in class for the industry? And so those four metrics, those four KPIs are effectively how we're going to run the company. And so the same metrics, I think, should be applicable to how we think about telling our story to the street as well. And so there should be no error between how we think about running the company and how we manage the expectations of our shareholders.

26:27But the reason that these KPIs are important is because they're directly relevant to our investments in AI. Yeah, I think that's right. And I think you get a bigger, I think you get a better multiple on Wall Street these days if you can demonstrate that not only are earnings growing as a result of efficiencies due to some of these next-gen technologies, but if you're a leader in creating the path for these technologies, I think the investor base changes. And you're looking at more of a growth kind of tech investor versus I got to fill my bucket with 10 % financials in a mutual fund. So it's a very exciting time for Rocket.

27:10I totally agree with you. I'm really thrilled to be part of the story as an investor. And on behalf of all of your shareholders who are watching today, I just want to thank you for giving us some of your time and sharing what you guys are working on. It's really interesting and and we appreciate it. We appreciate it too, Josh. And thank you for having me on the show. I love what you're doing with this, with this community as well. And I'm going to come to Detroit and we'll do a tour and I'm going to get a Coney dog. Sounds good. Love to have you anytime. All right, Varun Krishna, ladies and gentlemen, thanks to, thanks to Rocket Companies and thanks to Varun.

27:44Thanks for watching all of you. Like and subscribe, do all the things and we will see you soon.

28:09All right. You have a Jackson Dart shirt already? Gotta support Jackie, baby. Of course. Do you know, I tried to, we tried to find Justin a Jackson Dart jersey and they said they're not being shipped until October 30th. Like they weren't ready for this kid's level of popularity. Like nobody had any idea. Oh, shit. We better have a million Jackson Dart jerseys ready. So just get a just get a fake one from China before they have the blue one. Oh, I shouldn't say there were no jerseys. They have the blue ones, but he just got the Brian Burns in blue. He doesn't want to have two blue Giants jerseys.

28:45So he wants the white one. There aren't any like literally. So it's a cut. Listen, we say the market's efficient. It's not always so efficient. Hey, ladies and gentlemen, welcome to an all new edition of What Are Your Thoughts Here on the Compound Network? We are so excited to be here live tonight. The chat is going crazy. You all say hello to my co-host, Mr. Michael Batnick. Michael Batnick, you say hi to the folks. All right. What's up, folks? Let's see what's going on in the chat right now. I am told Table for Seven says, ready to go to pound town. I'm becoming a gold bug. Okay. Maybe we'll talk about that.

29:28Some shout outs to Nicole in the chat. Guys, I want to tell you about something. Nicole has officially gotten the Compound's Instagram account as of today to over 50 ,000, 50 ,000 followers, which I think is coming from 1 ,000 or 10 ,000 when she joined. So she's 5X the channel in just a couple of years. I think we have a shot of Nicole here being Nicole. Nicole being Nicole. She is literally our resident social media genius and has absolutely helped us transform this channel into more like it's more of a movement, I would say at this point. So shout out to Nicole. We're going to drop a link where you can follow us on Instagram in the live chat on YouTube right now.

30:18And for those of you listening, it's the compound news is the official compound handle. So there she is. Thanks, Nick. All right. Also wanted to mention we have only or there might be less by now, only 10 tickets or less left for the New York live show with Michael, myself and Jim Kramer. So that's happening on Friday, October 24th. Doors open at 6 p.m. There will be food, drinks. There will be Kramer. There will be signed copies of his new book and a live podcast recording. Nicole, do we have that link? Let's drop that now. If you guys are watching this video later and there are none left, don't say I didn't try.

31:04Don't say I didn't try. I really hope that I hope that whomever wants that ticket, sees this alert. She's saying now saying less than 10. All right, we're on fire. Sponsors tonight, FM Investments. Michael, take us through FM Investments. All right, listen up, folks. Even after the Fed's recent modest cut to overnight rates, compelling bond yields are still attracting a lot of investors. That's right, 90 billion, 98 billion in September, wild. Most bond funds come with a catch, which is the catch is those regular income distributions that bond funds have to pay out. Distributions sound nice, obviously, in theory, but they actually weaken the magic of compounding.

31:46Why? Because every ETF distribution - Why do distributions weaken the magic of compounding? Taxes. Oh, shit. Taxes. That's it. Every ETF distribution pulls assets out of the market. Just shut up for a second. Let me finish this. Temporarily. It says verbatim. So the FM Compounder ETFs are designed to solve the fixed income distribution problem. Compounder ETFs can help investors avoid distributions, stay invested, and compound their capital gains. What are the Compounder ETF tickers? I'm glad to ask Josh. It's CPAG, that's C-P-H-E, the FM Compounder U.S. Aggregate Bond ETF, and CPHY, the FM Compounder High Yield ETF.

32:26CPAG and CPHY help investors harness the magic of compounding. learn more about the FM compounder ETFs at fminvest.com. Shout out fminvest.com. That is a real problem. And it's nice to see somebody finally address it. All right. We have some, uh, shout it out their website. Unbelievable. Yeah. Well, listen, yeah. Shout out to the website. Shout out to the site. Um, we got some peeps in the live chat tonight. I want to say hello In Jensen, we trust Cam Rackham. Matthew Stevik is here. Oliver's here. Joe Altamoro, we see you. Jay Luther, what's up, man? Ring, KPS, Fred, C-Note, Connor McLaughlin, what's up?

33:08Georgie, all right. Thank you guys for being here for the live. Let's get down to business. First things first, the banks reported, some of the banks, some of the largest financial companies in the world reported earnings this morning. and the reports were awesome. Now, I don't think that's surprising to most people. Financials have been among the top three or four sectors of the year pretty much all year. And the big banks are among the best of the financial sector stocks. So no one was really like totally knocked out that these reports were so good. But I think it just underscores the broadness of the rally because the banks don't just deal with technology companies.

33:52The banks have customers in every segment of the economy. What do you think of that? That's right. What do you think of that take? Like banks as a gauge of the economy beyond tech. I know they're involved with tech as well. Yeah. So JC was on the show earlier in the year. And if you'd listen to me for a second, I'll let you know that, yes, banks are important to the economy, to the stock market. It's discouraging when you see the banks being left behind. You want to see real confirmation that there is activity in the real economy. outside of just this circular notion of open AI and Salesforce now, which was a dud and Oracle and all of these deals.

34:30You need the real economy, damn it. So just before we get into the reports today and the market's reaction, I wanted to highlight Adam Parker's work. Adam did this really interesting thing showing what you want to pay attention to in terms of stocks before earnings. So chart on, please. Adam said, stocks in the bottom half of industry group relative momentum, all right, so stocks in the bottom half, tend to beat expectations on the earnings release. And those in the highest 5 % of two-week stock performance see a statistically significant underperformance on the day that they report earnings. This is important.

35:12On average, big moves into earnings releases should be sold and big laggers should be bought. So let's see what happened today with Citigroup and with Wells Fargo. Next to your charts, please. Both of these acting pretty damn heavy. Not necessarily if you were just purely technicals. I don't know that I want to be long if this go into earnings. Boom, big candle. Next one, same thing with Citi. Also pretty cruddy price action. And you had a very nice day today. So kudos to Adam. I thought that was interesting stuff. I only agree with half of that. Which part? I like, I guess it's the on average part that I don't love because think about, I know, but think about anecdotally, like how many counter examples of this that are so easy to find at your fingertips.

36:05Dude, of course. He's just, he's all, put his chart back on, put the bar chart back on. So this is showing you pretty clearly that the stocks with the strongest momentum, now listen, this is very short-term stuff. We're talking the next day. The stocks that are ripping into earnings, like they tend to, the expectations are too high in the short term. Is that percentage gain? Yeah. I mean, I don't know if it's percentage gain. It's a T-stat. Don't worry about what T-stat means. It's very tough. Because the point is, this is not, so what this is not saying, chart off, what this is not saying is that stocks rallying to earnings have bad earnings results.

36:43No, the opposite. It's just describing profit-taking, selling the news. Correct, that's it. You're such a hater. What's wrong with you? It's a great chart. It's a great chart. It's a great chart. I think it's good food for thought, but I want to see, what is that, the next day? Like I kind of want to see, give me the total return the two weeks before the earnings and the one week after. and I guarantee you that that stat gets obliterated. Like how many people are buying the stock the day before earnings and selling it the day after? That's a very small component of the market. His clients are hedge funds.

37:21I'm merely making the point. That's it. All right, so let's get to the best. I do understand the point. I just question the practicality of paying attention to it. Is that? there's a lot of things that we talk about that people should not pay attention to let's be honest that's definitely true all right um earnings uh so so we have a bunch of great stuff here from the gang um cali chart kid matt sean i don't know whose is whose but these are some things that we want to share this is the financial sector earnings week not every one of them reports but almost every big company that reports this week is a financial 65 of the companies reporting this week are from the xlf i love this sector okay um me too and i love that it's first by the way i think that's huge okay um the entire financial sector is expected to have growth of 13.2 percent for the quarter that is the fourth highest within the s &p 500 fourth of 11 um not all of these stocks even though they all had good earnings, not all of them went up after.

38:31Again, Adam's right. That phenomenon is real. A lot of these are stocks that have run up 20%, 20 % into these reports. So I get it. Okay. Trading and investment banking revenues beat and look strong across the board. Deal making is okay. I think deals were the big story at Goldman Sachs or overall investment banking revenue, I should say. Worries about credit quality are, I don't know, they're not new. I feel like it's every quarter. People are dying to find some sign of it. Dude, there's nothing there. There's nothing there. JP Morgan, the provision for credit losses was$59 million, driven by the impact of a charge-off related to a single client, which we'll get to later.

39:16Net charge-offs were$62 million, and the net reserve release was$3 million. They asked about the credit card business early, or they didn't even, before they were even asked about it on the JP Morgan call, they just went right to it. CCB, there's nothing happening there. There's like literally nothing to report. There's no uptick. There's no like scary activity in the worst borrowers, like none of it. So that's the good news. Jamie Dimon's economic comments were, you know, the usual. He is never gonna give you what you want if what you want is everything's great. That's not Jamie-esque. He sees himself as a risk manager, not as a cheerleader.

40:05Well, hold on. Let me read this quote. So this is slide one in their earnings release. While there have been some signs of a softening, particularly in job growth, the US economy generally remained resilient. However, there continues to be a heightened degree of uncertainty stemming from complex geopolitical conditions, tariffs and trade uncertainty, elevated asset prices, and the risk of sticky inflation. As always, we hope for the best, but these complex forces reinforce why we prepared the firm for a wide range of scenarios. He says this every quarter. It is who he is, and he shouldn't say anything different.

40:38He's the head of the biggest bank in the country, in the world. You don't, right. Somebody was joking around. I forget who it was. Like, what would get you bearish? He'll never spike the football. Is Jamie Dimon taking a victory lap? He never will. All right, we're good. He never will. We made it. Okay. City, anything crazy to say on City? Not really, right? So, you know what? I'll be honest. City and Wells, I just, I can't listen to them all. I do BlackRock, I do Goldman, and I do JP Morgan. Yeah, I only did BlackRock and JP Morgan today, and Goldman I read about. City beat on revenue for all divisions and didn't really have any negative comments on the economy.

41:20I saw they put somebody on TV today and he echoed a lot of what Jamie Dimon had to say about overall credit quality and lending and et cetera, et cetera. They basically all said the same thing. It's business as usual though is I think the takeaway. Wells Fargo got out of bank jail. So for a long time because it was the worst run bank in America, worst run large bank in America, literally lying, cheating, and stealing. They had a cap on how much money they could return to shareholders. They were shut out from doing any kind of M &A. They were like in a penalty box, deserved. They faked 40 ,000 fake accounts at the retail bank branch level.

42:08Everyone running the firm has been fired as a result. New management. They have this guy, Charlie Scharf, now for the last couple of years as the new CEO. He is a Jamie Dimon protege. people seem really happy with the turnaround at Wells Fargo. And now they have this asset cap lifted. So the third quarter was the first full quarter without that, without that cap. So they're going to be treated like every other systematically important financial institution or SIFI. And they should be able to do bigger buybacks, dividends, et cetera. Now this was a good reaction though, Mike on, on Wells. Yeah, well, because nobody expects anything from them.

42:52Yeah. The team notes that's the best earnings performance, best post-earnings performance since 2015. Stock hasn't done this in response to an earnings report in a decade, which I find notable. All right. JP Morgan, Goldman both went down or underperformed the KBW Bank Index. Let's put that chart up. Goldman was down 2%. Goldman and JP Morgan both down 2 % on the day. This is market caps. Look at JP Morgan acting like a mag seven, almost a trillion. 846 billion. Goldman is 238 billion. BlackRock, 178 billion. Are you surprised by the order?

43:40That's a good question. Between Goldman and BlackRock, if I blindfolded you, which would you have guessed is bigger by market cap right now? I probably would have guessed BlackRock. I think I would have guessed that too. We would have been wrong. Although they're close enough that like a month of market performance could change that. Wait, hold on. Hold on just for a second. We spoke about this with Scott Nations. Man, I know Rob Hunt is killing it and their future is bright. but 120 billion just in the context of BlackRock being 100, what do we say, 180? One of those is wrong. Oh, why is Robinhood almost the same valuation as BlackRock?

44:23One of those is wrong. Very wrong. Come on. I mean. I pitched BlackRock on CNBC today. Pull up a technical chart though. This is a legit, legit, legit breakout. Like a highly legit breakout. So it closed out on Altam High today. BlackRock took in$205 billion in quarterly net inflows. $205 billion. How much is on Robinhood's platform? Is it that much? Does Robinhood have$300 billion? What's the number? Whatever. It's close. It's in the billions is the point. And BlackRock's at$13.5 trillion. blackrock took in and i know it's their different businesses but blackrock took in 200 billion dollars in quarterly net inflows oh i had some notes from jp can we just go back to jp morgan yeah all right so the consumer is fine was my big takeaway they said it 50 different ways um and you know they would love to tell you if that's not the case they'd love to be the first bank to say yeah no there's a real problem here because they're going to handle it everyone else Yeah, they'll tell you.

45:33So Jeremy, the CFO said, I mean, Jamie may have his own personal opinions here, but I think at a high level, the story that we're trying to tell is one that's anchored on the current facts. The current facts on the consumer side are that the consumer is resilient, spending is strong, and delinquency rates are actually coming in below expectations. Those are facts that we really can't escape. Can't escape. As if, right, as if it's a bad thing to say. It's crazy, which I'm going to ask you a question about. The net interest income outlook for 2026, which is the bulk of their the bulk of the revenue.

46:10It's a bank after all. They said the consensus estimate on Wall Street of one hundred billion dollars for 2026 quote does look a bit low. So this bank could conceivably exceed one hundred billion dollars in net interest just given the size of its deposit base, which is really, really, really remarkable. And then two different analysts wanted to talk about first brands, which I know we're going to dive into in a minute. But I just wanted to point out to people, so JPMorgan has minimal exposure to first brands, although not zero. But they do have exposure to this thing called Tricolor, which we talked about this last week, how that's being talked about as the next disaster.

46:59It's another auto-related business. but I, they kept saying NBFI, NBFI, NBFI. And I had to Google it cause I forgot. It's been a really long time since we heard analysts on a call asking about this. But non-bank financial institutions, NBFI is going to be the buzzword of the fourth quarter in, in the financial world. I believe it's my, that's my top pick for like top buzzword that people start writing articles with that in the headline. I think it's going to be like, just because there is a huge contingent of people who want things to go wrong, especially for hedge fund managers and private equity people.

47:45And especially the Financial Times. Oh yeah, the FT would love to see this all blow up. But I think this is the new buzzword that people are going to walk around saying because they think it makes them sound significant. sophisticated. Jamie kind of said he thinks the news gets worse or there are more revelations. No, no, no, he did not say that. But he doesn't think it's like a catastrophic. Hold on, he did not say the news gets worse. He did not say the news gets worse. No, he did not. Dude, he did not. First of all, this is from Jeremy. So Jeremy said, we've also acknowledged that a lot of the private credit actors are, you know, large, very sophisticated, very good at credit underwriting.

48:24I don't think you're supposed to jump to the conclusion that there are necessarily lower standards or a huge systemic problem. To the extent that we lend to some of these folks who are client of ours, as well as competitors of ours, that lending follows our normal practices. It's often highly secured and everything we do is one way or another risky. I'm not sure that our lending to the NBFI community is an area of risk that we see as more elevated than other areas of risk. And the quote that you're mentioning about Jamie, Jamie said something like, I probably shouldn't. No, no, no. He didn't say that.

48:57He said, I probably shouldn't say this. And I'm guessing because he doesn't want to scare people, but there's never one cockroach in the kitchen. That's what he said. Oh, okay. Yeah. So that's not the same thing as I'm saying? No, more to come. How is there a big difference? Wait, how did your voice just go up six octaves? Yes, more to come. There's never one cockroach. How are these two? Those are not the same thing. How are these two turns of phrases not synonymous? Okay, because there's never one cockroach in the kitchen is saying - What's the implication of that? That there's another cockroach.

49:27More to come. No. But it's not the same. Stop. It is not the same. Please stop for my benefit. There is more to come is saying that you know. There's never one cockroach is like, would it be surprising if something else happens? there's a difference sure michael let's do goldman all right let's do goldman um so goldman it was the same questions on on the call and david's dj solly you know he might he might drop my playlist because it's never interesting no i think i'm done with goldman on purpose do you think um i don't know he's just there's no there's respectfully there's just not that level of charisma and he doesn't say anything interesting maybe nor should he but i think that's like by I really think that's by design.

50:16I don't think he wants any more attention personally. Like, I don't - He came through. Credit to him. They come through. There was two years ago. It was pretty dark. So they were asked the same questions about, you know, private assets, private credit, risks, et cetera. And nothing, you know, I listened, nothing to pull out. But the big story for Goldman and to the point that we opened the show with is that the economy is firing. There is deals, there is activity. So throw this chart up. Look at investment banking fees. Second quarter was$2.1 billion. Third quarter,$2.6 billion, up from$1.9 billion in the third quarter of 2024, year over year.

50:57I mean, it's humming. It's definitely cooking. Things are happening. That's a meaty bar right there. Things are happening. Yeah. Goldman bought Industry Ventures, which is interesting. $8 billion venture. What is that? It's just a venture capital fund or it's more than that? They do a lot of different things. They were the pioneers of venture secondaries, and they've had a very successful storied career. $8 billion in AUM and on the platform. I think the cash comp was like$600 with another three engine on their earnout, something like that. So Goldman is – So it's almost a billion dollars for the business.

51:32Do you think that that was a – you think that was a situation where the company put itself up for sale and Goldman won an auction? I doubt it. Or do you think this was strategic and Goldman went to them and said, there's a good fit here for some reason beyond just like - Yeah. So not knowing anything, speculating tourists here, I would say that this company is very well respected. I would guess that they're not hiring a bank to shop them. I would guess that Goldman approached them. Well, you know, there's never just one cockroach. So I wouldn't be surprised to see more deals for these companies now that they sort of can do whatever they want, almost whatever they want.

52:18I think from a regulatory standpoint, from an antitrust perspective, if they want to do something, they could probably do it. So I think we'll see more. Let's just on BlackRock, I know you have some data on this one. This is what stood out for me. 13 and a half trillion in AUM is so big. Yeah. We say the words, we say the words trillion a lot on the show because we're always talking about like Apple and NVIDIA, but like, honestly, an investment firm with 13 and a half trillion under management, this is one company managing 13 and a half trillion, not just managing, but like responsible for, that is so big.

53:05Okay. I'm really glad you mentioned that because show this chart from Bloomberg Intelligence, John, please. So IBIT took in$100 billion in about 400 something days. Oh my God. Okay. So IBIT and their other ETFs total did$61 million in crypto ETF revenue. So I call it a$250 million annual run rate, give or take. A quarter of a billion dollars. And guess what the percentage of that revenue was? 1%. Oh my God. Wait, can we put that chart back up? This is showing how many days it took for IBIT to get to 100 billion. And they have four other ETFs that are 100 billion. VOO, which is - No, no, no, that's not what this is showing.

53:52This is showing how quickly it took other companies, other ETFs to get to$100 billion. Yeah, that's what I said. So VOO, no. That's what I said. These are all BlackRock products. Oh, no, they're not. VOO and VEA are Vanguard. Yeah. IEFA is State Street and IEMG is. No, no, no. Those are BlackRock. IEFA and IEMG, those are BlackRock. Oh, okay. So, but I'm saying that's the length of time by days. That's what I'm saying. Is how long it took. Right. So, I did it in just over a year and VOO, which is like the Vanguard SPY basically. Yep. Correct. Took 2 ,000 days. That's the point I'm trying to make.

54:34Okay. What does that say? Does that say more about Bitcoin or does that say more about just the development of the ETF business in general? Both. Yeah, both. In fairness, obviously ETFs are a lot more mature than they were when VOO was launched back in the day. But my big point is this. Show the table of business results. So look at the fourth column. Okay. September 30th, AUM is a percent of total. Okay. Digital assets, 1%. Oh yeah. And 1 % of fees. It's like a blip and it's a hundred billion dollar product and it's a blip. Look at Quebec. Sorry. I have another question. I have a question on that though.

55:20So only 1 % of BlackRock's AUM is in digital assets. Let's say I - And base fees. And base fees. But how big is BlackRock in Bitcoin overall? Are they 10 %? Like how much of Bitcoin does - Well, if I bid is 100 billion, how much Bitcoin is there? And Bitcoin's what? Is it 3 trillion? I don't even know what it is. I don't know the answer. But they're a meaningful, they're like a meaningful amount and rapidly becoming more meaningful. Yeah. All right. Chart back on. The other portion that's interesting is private markets,$300 billion plus. And it's 13 % of the revenue. And that number will grow higher, undoubtedly.

56:05Yeah. Yeah, for sure. Anyway, the point is - It's super profitable. Even though there's 12 or more digital asset ETFs, none of them are cutting fees. All of them are making money. Bitwise is. Oh, Bitwise cutting fees already? Okay. I think they are. But the point is this, trillions of dollars to your point earlier, it's so much money that showing that the$100 billion ETF is 1 % of their AUM, 1 % of revenue really puts it into context. It's so much money. So like getting back to what I said earlier, BlackRock is either way undervalued or Robinhood is way overvalued. It may be a little bit of both.

56:47All right. A story today in the Wall Street Journal, mid-morning reacting to these earnings reports that we're talking about. Can we get a screen grab of this, John? Wall Street is firing on all cylinders fueled by deals and trading. The subhead is results are beating expectations across the big banks. So not to repeat a lot of what we just said, but here are some things from here. Goldman is now on pace for its best year ever, ever. Did you hear that? In its main investment banking and markets division, JP Morgan is on track to make over 50 billion in annual profit for the second year in a row.

57:26BlackRock, 13 and a half trillion. These are the most important companies on Wall Street and all of them are just absolutely crushing it. This year, we've already had the biggest ever leveraged buyout, that's Electronic Arts, advised by Goldman Sachs, $20 billion in financing from JP Morgan. Bank of America is expected to bring in the biggest ever disclosed deal fee for a single bank,$130 million. So did you hear what I said? Bank of America is getting$130 million for that deal. J.P. Morgan is financing with 20 billion. And either the buyer or the seller was, the seller was advised by Goldman.

58:11It's like, it's unbelievable how much money is being made, which explains why these stocks have done so well. So, and, and they go on and on. There's equity trading, there's equity underwriting, there's debt, debt, debt, capital markets activity, just it's all explosive. And it's all on a year-over-year basis, just a huge change. So the question I wanted to ask you is one thing that's really interesting, we're kind of like in these Goldilocks days for Wall Street with all these records being broken, but it seems like everybody wants to spend the entire time imagining ways for it to all come crashing down rather than just like enjoying it.

58:53Like, all right, we're in it right now. Why do we have to focus relentlessly on how it's going to end? Do you get that feeling that that's all anyone wants to talk about? All right. The question is, who's anyone? Because I think what you're referring to are the headlines. And I was talking to Ben today about this. Journalists don't, and this is not their fault. Good news is boring as shit. Nobody cares. I mean, this is good news, but this is an exciting article. It's a big, splashy headline. Dude, come on. Wall Street's filering on all cylinders? Not interesting. They want more first brand stories.

59:26That's interesting. How could people have been so irresponsible? People with so much money, how could they have been so reckless? That's what people click on. Nobody cares that Goldman's going to have a record year. Investors care as well. They should. It's the second biggest sector in the economy or in the stock market. But this idea that people want to see the banks blow up or whatever, Big Short 2.0, yeah, that's what the headlines want you to see. Of course they do. They want you to – that's their business. But how do you explain the amount of regular people who are doing Google searches for stock market bubble?

59:57Everyone's saying bubble now. Everyone. Is it because things are just so good that people just can't take it and they just have to ask, like, when is this going to come to an end? I mean, that's a different story. The stock market bubble, the banks do well. Those are different stories. Not really. I think they're pretty – I just – I don't hear anyone, regular people or the media, being like, yeah, it's a bull market. Things are good. It's a bull market, but it's weird. Like, I don't understand this obsession with how's it going to end. Well, I love that. When's it going to end? How's it going to end?

1:00:33Dude, we need a wall of worry. We can't have everybody's like, you know, everybody in the boat, no risk, whatever, S &P 15 ,000, get in, moron, we're getting rich. Like, I'm happy that there's, and but. Yeah, well, there's a lot. I want to show you something funny. um put this first tweet up this is a good tweet yeah nathaniel whitmore um do you know him i don't know i don't know an entire generation watched the big short thought michael burry was cool and spent the next decade calling everything a bubble i wanted to i didn't like this because i'm not on on twitter but i would have liked this 500 times if i could this is i think one of the best explanations for all of the hate and bitterness about the stock market.

1:01:23I think a lot of it boils down to all these ambitious young men who saw that film in their teens or 20s, or God forbid, read the book a little bit earlier than that. And just, they thought like, this is what you're supposed to do. You're supposed to be the smartest person. Find the fraud. You're supposed to be the smartest person in the world, outsmart everyone, spot the bubble before everyone else, bet against it. And like, that's like what you're supposed to do in the market. That's like literally what a hundred million people think they're supposed to be doing. And I'm exaggerating the numbers, but like there's a whole, there is this whole generation.

1:02:00They think that shit is cool being like this, uh, freakishly like brilliant contrarian who makes everybody else look like a moron. Now, I think a lot of these people that you're describing are people that wanted to be a professional investors, like real serious investors. I think most average people don't aspire to be Michael Burry. And I think a lot of people grew out of that shit. Like our friend, Dan McMurtry is killing it in the hedge fund business. And he's not one of these freaks that is betting on the world and that everything's a fraud. Like I think that there are certainly, there was a corner of the universe.

1:02:35Absolutely. That was brainworned by this, but not everyone. Like brain worms, but like, I think in a, I think they want to be the hero. I don't think they're like villainous. I feel, I almost like they want to be the guy that saves everyone. Well, you know why? Because they're like, that's about to blow up. Yeah, and I'm going to save you. So Michael Steinhardt famously said, nothing makes a money manager feel better than making their clients money when everybody else is losing theirs. You are hero goaded forever and ever. There's no higher mountain for a money manager than that. And so bull markets make that sort of investing really difficult, obviously.

1:03:14This was a good clap back from High Yield Harry. This is one of the top five funniest people in the world in finance. He's pseudonymous. I don't know him in person. He said, disagree, I was inspired by these guys. These are the mortgage brokers in the big short, right? Who would like beyond ridiculous caricatures of, I know mortgage brokers and directionally the movie sort of had it right, but like they were like to the nth degree. I thought that was I thought that was good. Anyway, it's kind of sad that there aren't a lot of people who are just like, yeah, this is pretty great. Like my friends who work on Wall Street are doing well.

1:03:53They're making money. They're, you know, buying bigger cars. They're buying bigger homes. OK, maybe a little bit of envy. But overall, it's a good thing that the capital markets are working. that like nobody has that opinion. I don't know. I don't know. I think people in the real world might have that opinion. Like people in Wall Street in the real world might have that opinion. I think that all forms of media consumption, social or otherwise, just warp everything. I really do. I do too. All right, let's move on. Okay. So I saw this poster. I think Robin actually shared this with me. Throw this Luther thing out.

1:04:32All right. So The Economist,

1:04:37famously late and the poster child of a lot of magazine indicators, which I don't believe in, but sometimes. I was going to say, this might be the bottom for Lulu. But sometimes. So I immediately wanted to buy the stock. So I thought I'd play a game with you, Josh, where we're going, okay, value or value trap. And we're going to start with Lulu. So, and I told Sean, we're going to revisit this in a year. Okay. So Lulu is in a 67 % drawdown. So this is obviously surface level analysis, right? We're not going deep on each of these names. So chart on, please. We'll start with Lulu. So on top, you see the price.

1:05:11Lulu is down 67 % from its high. In the middle, we've got the free cash flow. And on the bottom, we've got the PE ratio. And I got to be honest, so the free cash flow is obviously turning. Like, duh, it's, you know, stocks don't fall 67 % for no reason. I thought it would have been way worse. I think, yeah. I think it's a buy if my only two choices are buy or sell. But I don't invest this way personally. I'm not a value guy. And in fashion, it's even twice as hard. So like in other words, one thing to be a value investor and look at like Hershey and be like, all right. This company's been around for 380 years.

1:05:55I'll take the bet that whatever's going wrong, they'll fix it. and there will still be an underlying demand for chocolate. I don't know that anyone can say that about any fashion brand. That being – and some go away forever. That being said, there are some really great examples, and I'm sure they're a minority of the time, of brand resurrections. And what we witnessed – Yeah, Crocs. Just think a couple of months ago, all it took was Sidney Sweeney and Abercrombie and – what was it? What is it? American Eagle. I don't even know. Oh, Crocs is going to kill the end. No, you're right. So retail companies turn around, but it is hard as shit.

1:06:35It's hard, dude. As much as I really want to fade the economist and just hold my nose and buy, I think you're right. Like Aloe is just destroying them. So maybe they get it together. Maybe they don't. All right. So it sounds like we're both pretty skeptical. Just get Sydney Sweeney wearing Lululemon yoga pants. Why is it so difficult? You can't write a big enough check? Close 10 stores and give her the money. And next question was the question, how do I turn around Lululemon? All right, Salesforce. Cassie. Salesforce. So interestingly, the stock is down 35%. Free cashflow is near an all-time high.

1:07:13Forward PE is about as low as it's been for the last couple of years. And nobody wants any part of the stock. In fact, it failed to rally on the news today that there's a partnership with OpenAI. I mean, nobody wants to own the stock right now. I think that there's an open question about the need for buying seats per employee head on a go-forward basis. I think every SaaS company will be facing this reality in the AI age. Companies are writing their own software at this point with the aid of AI to enable them to do a lot of the things that you needed to rely on Salesforce for. That's A. B, yes, we're in a low hiring, low firing equilibrium.

1:07:53That's going to break in one direction or the other. and I think most people would bet it's going to break negatively and you will eventually see layoffs. It doesn't have to be catastrophic, but companies like Salesforce that rely on enterprise sales, those are per head deals. And if you have a lower headcount working in corporate America, it stands to reason it's going to be very hard to sell, very hard to grow an enterprise SaaS business that quite frankly already has everybody as a customer. who are they where are they going next enough of this value value trap I have two more names what do you think trap it's going lower trap I don't want it okay Nike we've spoken about the stock a million times down 62 % holy shit close your eyes and buy it just buy it I'm gonna buy this I'm gonna violate my own rules just close your alright here's what you do here's what you do here's what you do buy 500 shares now have 500 shares in reserve for when it when it has a false breakdown and breaks below 55.

1:08:57And it'll last for 10 seconds. You need to use a buy stop limit in that moment. But I am telling you, when it breaks below 55, you put in a buy stop limit for 60 and just ride it back higher. And I don't know. I could see this being, this could go to 95 in two weeks if they get the right headline, the right news flow. The reality is it's just not that bad. It's bad. The counterpoint is it's 35 times earnings. Counter counterpoint, nobody gives a f***. I agree. You want to hear how many times earnings Palantir sells for? Come on. What are we doing here? A little bit different, but point taken. All right.

1:09:40Chipotle. I actually think I want to buy the stock. So Chipotle is in a 38 % drawdown. Its free cash flow is near an all-time high. The stock is always expensive. so forget about that. But nobody wants it. I think a lot of this is the CEO leaving and there was problems, no doubt. The food got ridiculously expensive, but I'd be a buyer of this stock. You know what I think about whenever I walk into a Chipotle, usually to pick up food from my 16-year-old? I feel like the kid in the emperor's new clothes. Am I the only person willing to say out loud the food is terrible? No, it's not. It's literally terrible.

1:10:20Why? No, it's not. Why am I the only person who will admit it? And so now it's expensive and terrible. I've seen you eat Chipotle a lot. I know I do. I look, well, look, do I look very selective? Come on. Dude, Chipotle is a great lunch food. What are you talking about? No, it's not. It's convenient and it's nearby everywhere. And it's, and it's fast. And it tastes good. And it's, and it's slop. And I have to be honest with you. All Mexican food is slop. Nope. And it's getting worse. And it's getting worse. Would you like to apologize to the Mexican community? I love slop no it's not good food it's not good I want it to be because Mike I have to go there for nugget every three days that's all these kids eat that's all they eat Gen Z and millennials they'll eat Chipotle seven days a week I just don't understand why people won't say it used to be better than it is now I've been to let's say Chipotle's in five different states in the last two years Okay?

1:11:19It's never good anywhere I go, but it used to be. I enjoy it. We have one more. Okay, last one. What do you get? A salad? Two more. You got a bowl? Don't worry about what I get. I get what I get. It's not good. All right, Airbnb. I like this one too. All right, this is a great story. So Airbnb, the problem here is it just came public in a mania, and the valuation was ridiculous. But it never stopped growing its free cash flow, and the stock has gone sideways for three years. I think this is a buy. I don't want to dislike all of these. What did I say I like so far? Lulu and Nike? No, you don't like Lulu.

1:11:56You said no Lulu. You said if Sidney Sweeney's and Lulu. You don't like Nike. Yeah, no, I think it's turnable. Yeah, so I only like Nike out of these. Okay. I don't like this one either. Well, I never liked it. I never understood it. Because you personally don't like it because you don't like Chipotle. So I have a bias. This is Josh's a Snob episode. All right, last one, last one. All right. I don't like the stock. I think it's too much competition and lodging. Okay, fair enough. All right, Adobe. This is like a value-mounted, the value people won't stop talking about this one. So free cash flow, all-time high.

1:12:30Stock is in a 50 % drawdown. So stock's been cut in half because nobody believes the earnings. Nobody believes the earnings are going to be there. What's the valuation? 21 times.

1:12:43It's a buy. I mean, knowing nothing, it looks like a buy. No, I'm just looking at the chart. I don't care about that. I was joking. It's a buy. There's a lot of support here. It's a buy with a very obvious place to put a stop. I think your stop is your buy. Wear your stop as you buy it. Don't put a stop in. Mike, the April low was tested three times. This is the third test of the April low, which is 330. But it's right there. I understand. I think it's going to break below, and it'll be a false breakdown. And then you plow into it when it reverses. I agree. I love this setup. I love it. I love it.

1:13:32I love it. This will be 450 in a year. so the the reason why the stock's not doing well is um obviously like the business isn't growing but everyone thinks sora and chat gpt and all these services are going to obviate the need for professionals with adobe licenses doing design work i would go the other way i'd go the other the way most of the people doing their own childish childish ai slop design work are doing these like cartoon images of themselves that like that's not gonna pass for design the world my math raves beauty my math just water i'm thinking about chipotle i might get a bowl for dinner like voluntarily not because it's convenient i do help me some chipotle do you bro all right uh All right.

1:14:26This is a good game. I like it. Was that the last one? That's it. We're done. All right. So I like Adobe. I don't know if I have the guts to do it myself, but I think it's trying to bottom right here. Okay. Jerome Powell spoke today. Did the market really react or not really? I couldn't tell. I didn't see like big signs of a big reaction. While he was talking, I don't even know what time he spoke. I did the market react to the Trump tweet. All right. Um, Cali points out the new thing that he said was that balance sheet runoff could end in the coming months. So what that means is that the tightening might be too much, might be too much tightening balance sheet runoff is bonds mature.

1:15:11And then the fed does not go out and buy new bonds to replace them, which is right. Like that's like the end of the runoff. So remember the bull market was only, the bull market was only being supported by fed liquidity, but by the fed, like replacing bonds that were maturing and buying. So I thought, I don't know. I thought that was an interesting comment. I don't, Cali points out yields didn't move much on this. Maybe a few basis points down. Okay. Job market employment prospects continue to worsen, although conditions haven't changed much since the September meeting. Good nugget. let me see what else Callie points out inflation increased year over year for a third straight month in August so that's looking at CPI PCE here was her by the way Callie's our chief strategist at Ritholtz Wealth that's why we're citing her what you wrote to Reuters Jay Powell dropped a major piece of news when he mentioned that the Fed could stop culling the size of its balance sheet in the coming months The Fed has been reducing its runoff for months now, but the idea of a stable balance sheet could help lower yields in the middle to long part of the curve, meaning that's where the Fed would be buying bonds.

1:16:26That's important. Thus, lowering yields. Yes. That's a hidden source of relief, especially to homeowners, that the rate cuts alone may not be able to deliver. Okay. I think that's really interesting. Otherwise, Powell didn't say anything too surprising. He repeated the no risk-free path comment, which I'm guessing will be a buzzy monetary policy phrase for the rest of the year. Both sides of the Fed's mandate are still under threat, even though Powell and Co. have chosen to focus on unemployment. Inflation worries still linger. All right. I think at this point in time, the Fed is a chess piece for the stock market is off the board.

1:17:08What do you think? um i i agree with you i don't think that what whatever the fed does at the next couple of meetings i don't think it's going to have a big impact on the stock or or cut or not cut i don't think it matters that much it might matter in the moment but i just don't think it matters for where the market ends the year i think they're off i am curious to hear what companies have to say especially consumer facing companies about the impact of tariffs on spending and margins all All right, let's do this First Brands thing. I know we covered it last week. What do we want to say about this?

1:17:44Here's what I want to say. All right, first of all, throw this graphic up. So for people who are not aware of who First Brands is, they are a conglomeration of all these auto parts. The only one that I know, frankly, is Michelin. You and I, just for the listener who can't see us, Michael and I are not the kind of guys that know how to fix anything on a car. we don't lift the hood up for any reason um we don't change tires we just we don't do any car stuff we don't so these brands mean nothing to me you i honestly i've never heard of any of it what have you heard of on this michelin they don't own michelin this is important they license michelin just the windshield wipers okay yeah they don't own they don't own the michelin brand and I only know Michelin because of the restaurant ratings.

1:18:34Go on. All right. So we spoke earlier about NFBIs. Okay, NFBIs. And one of the things that Jamie mentioned was fraud. He used the word fraud. That this is, even though there is not one cockroach, this was fraud. So Bloomberg did a story. So this guy, Patrick James, built a company, 26 ,000 employees, six continents, revenue of$5 billion. But a lot of it was just buying up companies. So debt and very little organic growth. So in 2023 to 24, its revenue only rose 1.3%. The cost of servicing its debt went up 38%. Not great. Is that bad? Not great, obviously. So Jeffries had a hedge fund, Point Bonita Capital, that had a quarter of one of its portfolios, $715 million in first brands, which is very bizarre.

1:19:33I'll get to a sec. Look at this chart of Jeffries. Smoked. Not great. Not great. Why would a hedge fund have a quarter of its money in, I think, the debt of a company? All you can do is get paid back. Why would you make a concentrated bet on debt? It's very bizarre. But so the article goes on to say that in 2011, a unit of Fortress Investment Group sued some of the companies and claimed that they had obscured the CEO's controlling interests and the fact that all the companies share the same employees and management, do not have separate books and records, and are grossly undercapitalized. This guy denied the accusations, but he paid to settle the case.

1:20:16And another one that was alleged fraud two years earlier. Public records showed that he took out mortgages for homes in Cleveland, set up a foundation to give churches and schools in the area money, but he left almost no trace of any of this on the internet. So there's all sorts of red flags all over the place. What the hell? This guy took massive steps to obscure all traces. So you couldn't find anything about this guy on the internet. So one of the analysts said, it seems like he went above and beyond to hide himself and his assets. All of this should be a huge red flag for investors. So I don't know who missed this, how they missed it, whatever.

1:20:50But the point is there was allegedly fraud going on. And Larry said, talk about private credit. The market has grown increasingly anxious given some of the recent dynamics, both related to perhaps growth, blah, blah, blah. So Larry said, all right, thanks, Alex. I hope you do. Okay. So listen, I'd start by saying just that the heritage of BlackRock and HPS and definitely the combined firms steeped in rigorous, Okay. So we're talking a lot with teams about the news, but I say the teams are generally seeing strong credit quality from borrowers. They're generally seeing a positive environment from credit investing, even in syndicated loan markets.

1:21:32Default rates have been declining. We, of course, read the same headlines that you do around private credit, bankruptcies, but those exposures are actually in syndicated bank loans and CLO markets. They're not with large private credit managers and direct lending books. And in those very public cases, the ones that we're reading about, you're reading about, potential fraud's also been reported. So anyway, listen, BlackRock is obviously, they're all in on this. So what do you expect them to say? But this, is there another cockroach? Perhaps. Would it be surprising if this blows over as an isolated incident?

1:22:06Not for me. All right. I actually think it's good that this is happening because I do think that it reprices the market and it reprices the, I should say, it reprices risk in the market. I think it heightens everyone's awareness of this possibility. And I think you can't just have a one-way credit market for 10 years where nothing ever goes wrong because there's this concept known as the Minsky moment after a famous economist where when things are too stable, that in and of itself produces its own form of instability. People have to feel like other people are watching what they're doing and people have to be alert to risks.

1:22:51So I actually think, unless this is the Bear Stearns hedge fund in 07 and it's the true canary in the coal mine, which, I mean, I won't be the one that will know that in advance. Unless it's that, and I look like an asshole, six months from today, I don't think that you want, you have to assume that it's that. A lot of people want it to be that. Back to what we were saying about bull markets, all the usual suspects who want there to be another Lehman Brothers, First Brands is their new Lehman Brothers. They have to have it. They need, it's almost sexual. They want the rich and powerful to be exposed as, see what these guys, why are these guys rich?

1:23:33They don't know anything. It's grotesque. They're licking their lips. They need this to be the private credit version of Lehman. They want it so bad. And maybe they'll finally get it. Maybe this – finally the meteor hit earth. My God. I don't know, man. I don't think that Blackstone and Aries and Blue – I don't think all these guys are idiots. Is there too much money there? Are our returns going to be lower? Someone's going to clip that. Okay, fine. Are returns going to be lower than they were in the past? Probably. There's a lot of money coming in. But is it going to be an absolute destruction of ruin and people going to jail?

1:24:10I don't think so. You know what's funny about bilateral lending? Like in game theory, you would assume that to be the safest form of lending. In other words, syndicated loans, we all understand how they go wrong. That's dangerous. Yeah. It's a thousand people who barely give a shit or putting money into the pot. a bilateral loan where I call you and say, okay, I'm going to give you$80 million, but these are the covenants. And if you violate, we'll go on a court and I will press you until you either pay me back or I seize your assets or some combination. Wouldn't you just like on the surface be like, all right, these probably aren't all first brands.

1:24:53Probably most of this activity is not dumb. Some of it. If you're making that assumption, and you're dumb. Right. It's like, oh, I just, I, I gave this, I gave this guy an entire loan and I had no expectation of getting paid back. Like how, who's doing that right now? Is anyone doing that? Probably not any, like probably not Aries. If somebody's doing it, it's not them. Okay. Um, I actually am going to call an audible here. We're going to dive into this, uh, we're going to dive into this hedge fund, excuse me, into this global fund manager survey during the compounded friends later this week. We'll do it with our guest because we're at 558 and I don't want to skip over it.

1:25:40I'm very glad you all, because honestly, I don't think it's that interesting, but we can pull out some stuff. All right. So maybe we'll pretend we were never going to do it at all. All right. You want to make the case? I do. So I want to make the case that I think it's easy to get distracted. I keep saying this. It's easy to get distracted by the nonsense, the speculative stocks and become very cynical. Iran, Aklo, all of these names would be like, it's a freaking bubble. And maybe that part of the market is, and it probably is. And see the hyperscalers and think like, there's nowhere to make money.

1:26:12And that's just not the case. You might be shocked to know that a third of the market is in a 20 % drawdown from its 52-week high. Right now? A third of the S &P... There's a lot of areas that have opportunity. A third of the S &P 500, one third, is 20 % or below its 52-week high. Throw this chart up for Matt. Matt charted the median stock, the 52-week drawdown from the median stock. On Friday, that was 13%. Interesting. So there's opportunities. This flies right in the face of the bubble narrative. There's opportunities. How is this a bubble if the median stock is in a 13 % drawdown from a high.

1:26:52Right. Like a bubble. So show the Russell 2000. Let's skip here. The Russell 2000 has been sideways since the peak in 2021. It is only now breaking out. And the longer the base, the higher in space, that's Luis Yamada via JC. JC loves to quote that one. I think this one's going a lot higher. But the one that I want to shout out, It's a stock that I don't own. I've owned it in the past. I was listening to Delta. Delta stock is in a, it's 11 % off its highs. And the stock is, the company is crushing it. Free cash flow at an all-time high. And the story with Delta is very interesting. Chart off, please.

1:27:33Did you know that 60 % of the industry profits are now generated by Delta? It is eating everybody's lunch. It is the only premium brand in the sky. Hard stop. Well, I'm very sorry to inform you that we booked American Airlines for our trip to DC. in a couple of weeks. Delta is always the best, the best customer experience overall, I would say. By far. And with an airline, like that's, the bar is low, but they do it. I'm happy when I fly Delta. Corporate travel, corporate travel is higher than pre-COVID highs, which shocked the shit out of me. They're just winning. They're doing everything right.

1:28:12They're firing on all cylinders. And I think the stock is grossly underpriced. and airlines historically have sucked loan multiple shitty companies but this is different I think it's going a lot higher and I should have and I don't I like it I think you'll have a crack at it these are just high beta sloppy charts like I think you buy a name like Delta when they wrecked the overall stock market and it just yeah I think that's right I think that's right this is not gonna this is not gonna double while you watch it and say I wish I owned it it's just not gonna happen I mean just look at the you know what I mean like it's just it's an airline It's not going to double in a year.

1:28:48You'll be fine. You'll be fine. But I like it. And I agree with you. If you are invested in anything travel related, this is as good a name as any other. So I do like it. Mystery chart time. I feel good about your chances today. I feel great. Okay. These are two different investable assets. They're related to each other. and I think the main point that I'm bringing out is what's gone on over the last two weeks. Okay, so are these semiconductors? They are not. They're not companies. I specifically went out of my way to say that they are investable assets. Investable assets. Okay, so I see a lot of...

1:29:41Oh, okay. Do it for me. Do it. Come on. You got this. One more hint. Is it Bitcoin and ETH? Look at you.

1:29:58Look at you. Super impressive. I'll tell you what I find interesting here. A couple of things. Bloomberg has this really great article about what went on last weekend. It kind of had like a flash crash. Oh, there was a flash crash. Absolutely. So I just want to read this really quickly. For a few manic hours on Friday, the world of digital assets, we played Wall Street's oldest reflex at machine speed during market stress, a stampede for the exits. The spark was familiar but unexpected. Donald Trump's 100 % tariffs. The pain was most acute in crypto with an index tracking altcoins. dropping 40 % in minutes.

1:30:45Dude, that's nuts. It was gnarly. While the crash was brief and prices have partially recovered, critics point to underlying issues in the crypto market structure, makes it prone to violent sell-offs. Quote, during this crash, depth evaporated and liquidation engines got overwhelmed. This is like a crypto expert. Auto-deliverging control mechanisms that exchanges poured gasoline on the fire and it felt like a market and more, less like a market and more like a trap snapping shut. Bullish? It wasn't really Bitcoin per se. It was Sol, I think felt like 25, Sol and ETH felt 20 plus percent, but it was really the altcoins.

1:31:28A lot of these ones went down 80, 90 % and just to their point, just an absolute air pocket, no liquidity whatsoever. It's pretty ugly. Coinglass estimated that a total$19 billion worth of positions were wiped out across trading venues. The actual total is likely much higher since Binance only reports one liquidation order per second. I mean, it's, listen, a lot of people, it's not, it's not good enough that they're taking the risk of being in these things. They also need leverage on them or they have options and futures trades on them. It's like, it's, it's It's the biggest casino on earth. It's so insane.

1:32:07I was saying to Ben today, somebody tweeted, long-term capital management blew up. They were trading fixed income arbitrage. Treasuries, treasuries. So these are basic points. They were using 25 times leverage. So what are you doing using 50 times leverage on - It's just this generational nihilism where it's like, I will never make it in life just doing my stupid nine-to-five job. Like I have to, I have to do this. It's not good. And I'm not a monster. I know there's a whole lot of people like no crying in the casino. And I agree, no crying in the casino. But I do feel bad when people get wiped out.

1:32:47I'm not happy when I see people losing money, even if they should know better. And hopefully the silver lining is some people learn some lesson from this, but it's ugly, it's not great. LOL, nobody learns. We have one more chart. This is from Chart Kid Matt. Bitcoin has seen shallower pullbacks versus ETH. That's about what you'd expect, but he illustrated it for us. His chart on the left, the blue is the Bitcoin pullback, and the red line across is the average. The chart on the right, you could see these Ethereum pullbacks are like, every time is a crash. That's heavy. Interesting though, because back in the day, not back in the day, prior to like two years ago, Bitcoin would have been down 30 % too in 24 hours.

1:33:28That's why Bitcoin is like matured. People aren't as quick on the trigger with that thing. as they used to be. So I thought that was notable. All right, great job, guests in the mystery chart. Guys, thank you so much for tuning into the live show. We appreciate all our pounders in the audience. You guys are literally the best. We miss you when we're not here. We love you very much. Please tune in tomorrow. All new Animal Spirits with Michael and Ben dropping in the morning. Video out as well. I'm going to start on Ask the Compound later in the day tomorrow. Ben has me on as his special guest with Duncan.

1:34:03and we're going to have some fun. I got a peek at the questions that we're answering. I love doing Ask the Compound. So that's happening. And then at the end of the week, it's an all new Compound and Friends with a new guest, a friend of mine, super excited to have this person on the show. And you guys will love it. So thanks so much for everything. We'll talk to you soon. Good night.

1:34:32Thank you.