Greetings and welcome to Inside Baseball with Old Chestnut. I'm Liam Allen with Morris Sacks. Good afternoon, MB. How are you, my friend? Was that uh was that uh excuse me for interrupting, was that first tube from the Garden two thousand and nineteen? You're good. You are good. And I think I was uh at that show with Ed. You were there. Yeah. Yeah. Yeah, yeah. Yeah. So here we are. Here we are, my friend. I'm in that secret off site location bunker. Uh in preparation of the civil on Rust. Right.
Well you know I you know I saved that song for for very, very special episodes, okay. Um And as the audience has been anxiously anticipating this episode, no one more than myself. has been anticipating sitting down.
and speaking with the Oracle himself. Okay. Oh my Lord. Okay. Because uh this entire audience m I would I think them a lot of them have been with us since the beginning. I don't get a lot of emails saying, Hey, I'm a new listener I occasionally get the hey I I'm getting caught up and during COVID people binged the thing, which is is mind mind boggling in itself.
But if you were here in the beginning, like when we were first just doing this, like episode five or six before we really had w before we were really professionals when we were like stone cold cat five amateurs w we we spent a lot of time banging on crypto like that, you know. So w how long ago was it? It it's gotta be like I looked at some of the episodes, it was like like November of two thousand twenty one.
Where like I'll never forget Morris saying, I can't tell Cheryl the money is gone. Like those words haunt me forever. Though I can't tell Cheryl the money is gone. Guess what happened? Guess what happened? The money is gone. I'm so excited. I'm so excited. Yeah, so I don't know if I told you but I broke my arm this Uh patting myself patting myself on the back. I told you to wait. I said just wait, it's gonna get better. And it keeps getting better and better. I mean, we've never seen this.
unfold in real time. So like again, we we mo you know Morris loathes Twitter, but like if you've been paying attention to the FTX thing, the fastest place to get the news and the gossip and the story has been Twitter where like every hour you get an update from
you know, whoever it is and and then you you find out all the things that have been going on. Like it's like a it's it's a movie. And sure enough, Michael Lewis is there writing the book. I mean you just can't make it up. How many how many emails did we send this week? Where we just said you cannot make it up. Um Well I I before we had the podcast there was the whole Elizabeth Holmes thing. Yeah. And I remember telling my cycling buddies, This thing's a fucking fraud.
And you know, I I I tend to be Debbie Downer on stuff. So, you know, I kinda got waved off. And I remember the first the first clue there was the board of directors included Henry Kissinger. Now with with all due respect to Dr. Kissinger who invented the polio vaccine or I forget, was that or or pasteurizing milk? I can't remember which. Um yeah, it's like y y it's just come on. I know uh this so this crypto thing is to me is far from
Over, although we are at the beginning of the end. And here's here's the where the end is going to be. Tether. Okay, so um we talk a lot or I talk a lot about how I'm bad at math. And I can give you my whole history on that another day. But I I I really am and there's there's a a real reason for But um oddly enough, like Warren Buffett said, he liked business because the math is easy. So somehow uh and I blame or thank my mother for this. She said uh and I tease my kids a bit, um
We were I was a senior in high school getting ready to go to college and deciding what I was gonna study. And I forget how eloquently she put it, but it was basically I don't want you going down there and getting some bullshit liberal arts degree. Well, right? Yeah. Well um, you better come back with something that you can earn a living with. Amazing. And because math is easy, uh
I took accounting'cause it's add, subtract, multiply and divide. Now Truth be told, when we got the compound interest that that that was a little bit of a upright, but um but uh So my training is an accountant. I have two degrees. A bachelor's and masters. I'm a certified public accountant. Yeah. And I taught accounting in graduate school. So amazing, yeah. Those are my those are my bonus.
Yeah. My wife Cheryl accomplished the same thing I did in half the time. Not a shot. True story. But uh nonetheless, we proceed. So everyone knows what we're doing. Or they've heard the term audit. Mm-hmm. And that's a very thorough test of a business's systems to make sure that they're functioning properly. Which is more than just looking at the numbers and saying the numbers are right. Right. They have these things called internal control procedures.
And you know, the first internal control procedure was the guy who invented the cash register. Okay. So you basically you ring up the sale, the money is in the till, the till doesn't open until you ring up the sale. That that that is an early stage um internal control procedure. Anyway, what an audit part of what an audit does is it tests these systems and makes sure that they're functional. So that's an audit.
So um there are lesser degrees of systems tests that over the years I think the names have changed. then they they do different things. So for instance, since I graduated they came up with what's called a I think a compilation which was they would go in and compile the data. It didn't have the same gravitas as an audit. But now there's this thing and we've touched on this in earlier episodes called an attestation.
And what an attestation is, and I is I mentioned and I think I even put up on the website one of my real estate partnerships, I I had them go and do an attestation. And what that means is the the auditors Not the auditors, the accountants go into the firm, they say to the chief financial officer, Give me your records. Look at'em and they say, Yeah, these are these are the records. Yeah, understood.
Yeah, yeah. It's about as good as a notary public. Yeah, you're notarized. Well there's a notary public person. No I couldn't pass the test. Okay. Um The thing is in Notary Public you're personally liable, which you know Under yep. If if you're not worth anything, it ain't a big risk. But anyway, um All this tether thing is doing is getting attestation Okay. Well a deal cut by Leticia James. Mm-hmm.
Moron Extraordinaire from the state of New York, right? Southern district. So she grabbed a fifty million dollar fine. Which is about thirty minutes of its stealing that is going on at Tether. Right. And uh to me is a sophisticated uh previous life institutional investor, an attestation is merely a f a sign sticking up saying, I'm committing fraud. Yeah. Okay. Yeah. Now um One of the things that holds the glue of the financial system together is mutual trust.
So for those of you keeping score at home, as we head into the holidays, I'd invite you to watch a movie that Mark and I enjoy called It's a Wonderful Life. And we watch it all the time and in there there's a bank run. Yes, there is. And the bank runs caused because there's a loss of faith in the credit. Okay. Well In the modern era to prevent bank runs. The auditors go in, they do an a real audit, they certify that the company is as it purports to be. Um
And that supports the the financial system. Now they're not perfect. An example that actually touched the life of old chestnut was There was a firm up in Canada named Poseidon. Enterprises, something like that. And what they did was they built sort of above ground swimming pools. Interesting. Uh to to dump the fracking water when they were fracking. Yeah, nice. And uh I read about it and I got the auditor's report.
And it looked legit because I read the auditors report. Well, oddly enough, there was a fraud perpetrated and five years later after the class action suit I got five cents back on every dollar. So so these things aren't perfect, but they're a little bit of a of a higher benchmark. Yeah, sure. So what I come back to is uh I'm convinced because of the lack of tether to produce an auditive financial statement that they're a fraud. Now, do you remember last week I think I called Kathy Wood
A sociopath. Yes. And and uh I had this partner of a white jewel firm over dinner told me she could sue me for libel. And then he said they probably wouldn't. because the the due diligence would involve her going through a mental examination um and she wouldn't she wouldn't be willing to do it, right? So I'm gonna do the the same thing with Tether.
I'm going to go on the record and say tether is a fraud, okay? And I'm saying they're a fraud because they won't produce audited financial statements by a legitimate The guy in the Bahamas is no good? You know, geographically. You know I I I don't know. Bahamas is nice. They got their life for K. Lifeless K? Yeah, lifeless K. Life that's what they call it. Lifeless K. Yeah. So if if Tether wants to sue me for libel because I'm saying they're a fraud, it's pretty simple. Produce A discovery.
I a audited financial statement for discovery. Okay. And and then they can sue. uh old chestnut at old chestnut enterprises L L C But you know I'm waiting for I mean look He's been dancing around it too. He's been dancing. Who with the guy he's been dancing around it and The excuse me for interrupting, but you're talking about the guy that's an ex plastic surgeon doctor, right? Yeah. Okay? That guy. Okay.
By by the way, I can't help but think about the cheating in the chest with the anal beads from last week. Okay. It's been haunting me as well. Go on. Well,'cause it it reminds me of this of this thing. There's a comedian named um Oh god, his name escapes me. But he was talking about how there This is a joke, but I'm sorry it's early. I gotta get it off my chair. He's talking about there's a famous actor known for Yeah darts. The human is the only animal that sticks another animal up its ass.
That guy lives in Bedford, by the way. It's a rumor. That's a c it's a joke that I heard in elementary school. You you know it now. Here we are twenty five years. Imagine that being the rumor of geez. It's tough. Well, anyway, uh anyway, yeah, go on. So um Come see us, Heather. Yeah, come. I'm at it. And and and I'm waiting for the lawsuit. against Matt Damon and Giselle Buschenstein. Mrs. Brady. Tom Brady. Um you know, I did I did go back and look.
at the very, very, very end of that little promo they did, which I'm sure they were compensated for, it it did say in fine print for about four tenths of a second. You may lose money, yada yada yada yada yada. But um You know, there's a saying the process is the punishment. Mm-hmm. Okay. So if I'm the plumber who is shot answering Tom Brady's phone going, Is it the bottom is it the toilet in the basement? Um I'm suing him because he he's if if I if you went on T V and started Toton um
I don't know. XYZ. Passios, yeah. Yeah, pistachios. Okay. So there's that. Um The number keeps growing about the money that's missing. Our our friend our friend and quasi correspondent Leslie Harris. I forget how he phrased it. Allow me to try, he said.'Cause there there was a question about how much And how long is it going to take for the investors to recover their money? And Leslie's like something like they're going to recover zero and never. Zero and never. That money's gone.
Okay. And and listen, I'm chuckling. I I wanna be clear about this. Okay. The fact that people got taken advantage of is not a laughing matter to me. There are very real people that have been hurt, and by the way, they're gonna be hurt worse than they realize, because If they've been doing this for a couple of years and they made some money, they paid tax
Okay. Now the money's gone, their loss is limited to three grand a year. So it's it's not funny. But the long and the short of it is We don't give investors to Right? Why? Because every person's different. I even think you so eloquently labeled one of the episodes, It's All About You, right? Okay, so I'm gonna give you some investment advice. To Liam Allen. Thank you. Okay. It's just you and me. Anyone else, you're on your own. Okay. Don't give anybody else your money to manage.
Okay. I don't care who the hedge fund manager is. I don't care what special product some investment councils giving you. Don't give it to anybody. Why? Because it it won't work. It's the y let's let's say indisputably, or disputably if you like, the greatest investor of all time is Warren Buffett. What did he say? Put it in a low fee. fund. Right? Okay. Why does that work? Because that money, whether the stock market goes up or goes down,
That money's yours. Yeah. Okay. You give it to any hedge fund manager from George Soros to Tweedledum. Okay. There's nine ways that thing can go sideways. And so The good news is you get eighty of the up, right? Mm-hmm. And you get a hundred of the down. That's the good news. The bad news is you get a hundred of the down, and if by the way, the guy w takes off with your money, okay, I don't care How much your other genius hedge fund manager makes?
Zero, you don't come back from zero. It's amazing. Yeah. And somebody said something the other day which never occurred to me and I I felt it was a moment of genius. You think about losing money, okay? Well you lose money, but you know what's worse than the money is the time.
People think so mono dimensionally about money. I made money, I lost money. Oh, I made a hundred percent of my money. Well how long did it take you? Forty two years. Right. Well okay. Uh Investing has got a time element to it, which is why when we talk about younger people younger than me, which is most people these days, whether it's you or the younger guys I mentor, uh you know, when when you realize and learn the power of compound interest.
It's the eighth wonder of the world, right? And and but the problem is that doesn't compound interest doesn't work at zero. I I know I've said I'm bad at math, but you can take zero and multiply it by anything and doesn't matter. It's zero. Okay. So um So the money in the FTX is gone. Goodbye. Uh I read something that the guy who's bigger than FTX Finance. C Z I
I read on Twitter that cesspool you dragged me into, thank you. That they've been laundering money for foreign states. Okay. Of course. That's that's great. Yeah. Um And you know, I I just I didn't really prepare uh much today'cause I figured there was so much to talk about. I didn't need to but In invariably when you don't prepare you you end up fucking things up, but um uh So I'm not saying the Bitcoin at sixteen thousand five hundred wherever is is going up or going down. It it's gonna exist.
For good,'cause people have it. And I there's even beanie babies still out there. They've come up if you right? They've reared the they've come up again in conversation. Beanie babies and tulips, okay? They're both they both showed up. Yep. Yeah. So the bulk of this business to me anyway, is pattern recognition. And so I was thinking about, you know, my career and how I've moved along. And I realized one of the great gifts for me was I worked for a number of really, really talented trainers.
None of them are household names. W one may be John Francis Axtein III, who was written about in um one of the books about long term capital. In fact it was like the first five pages. Well I worked for John for for three years, whatever. Um I got a note The other day from a former colleague whose name I d I I haven't asked permission so I won't mention it. But he and I worked together for a brief period of time at that French grain company. And um
He sent me an article about the FTX. It's FTX? Mm-hmm. Yeah. Yeah. There's that line from that famous anti Semite um Mel Gibson in the movie Um Mad Max Beyond Thunderdome. He just wrote a one-liner to me. Bust the deal, face the wheel. And I laughed so hard. Yeah. Um this fellow, I I once again, I don't have his permission to mention his name. really one of the all time great traders, I learned a tremendous amount from him. In fact I believe his son
has followed him into the business as a grain trader as well. Wow. Um or like in that that famous movie the uh Star Wars, it's like, Oh, I understand you're become quite a good pilot yourself. Mm. Interesting. Yeah, yeah. It's genetic. So for instance Who's the greatest mountain biking coach in the world? Oh, Jason Teller. Okay. Jason Tullis' son Liam Tullis, a sophomore at in Arizona High School, finished fifth in the Arizona State Mountain Biking Championship.
Fifth. And guess what? He's a sophomore. Jeez. You think that kid's going places? Jeez. Jeez. He was a kid last week and now he's fifth in the state. Holy smokes. Good job, Liam. Yeah. Yeah. He uh So he's riding one of old Chestnut's former bikes. Ice. Now, I didn't give it to him. I sold it to him. Mm-hmm. Now I I feel like I gave him a below market price, but I didn't give it to him because
You know, I wanted him to have skin in the game, right? Totally. So he I don't know whether whether he paid me a hundred bucks a week or whatever, but you know, Jason told me about how, you know, he's never seen a son clean a bike. that often in his life. And yeah. And you know, it's just one of those little little life lessons that I I uh I'm happy I did. And I'm I'm just delighted for uh
for the kid. I I'm delighted for his dad. I mean, you know, your kids are little. Wait till they start impressing you with stuff. It's one of it's one of I mean it's it's not fifth in Yeah. So a and anyway, um we're gonna have to get some Cycling T shirts made up or something like that. Along with Traders Gotta Trade. Gotta get that merch store open before Christmas. So I was uh having a conversation with Kevin Muir. uh about uh the crypto dynamic. And um
One of the listeners mentioned that I I'm not very nice when I talk about Kevin. And uh to be clear We make fun of each other all the time. But I was explaining something to Kevin and I said the the plan is basically just to ice the puck. And he said, Oh, you're becoming Canadian. You're using Canadian phrases. I said, No, no, Kevin, I just wanna put it in terms you'll understand. Make sure you underst yeah. Speak your language.
Um part of the reason I hurt myself, patting myself on the back this week, is because um I At least based on the PL of SACS Enterprises. We nailed it. You do an update? Yeah. It was uh honestly uh with apologies to the market gods, it was the best week I've had since I stopped working in twenty and thirteen. Wow. Best week, yeah. In ten years. Um Yeah. Best week in ten years. How did that happen? Well, it I went back and I listened to the episode and you know
There was reference to the Ethan Fanschel comment about how I talked about going from eighty percent to ninety percent. So I found some of these uh uh muni bonds that I liked, right? And I was talking to uh Peter uh McGary and we were emailing and uh Uh I said, you know, I kinda like the long paper here and he said, Funny you.
He'll probably get mad at me for repeating this now, but it's too late. Sorry, Peter. Uh he said he likes the long end. Uh he bought some stuff out there. So I I hung up the phone and I called Bobby and King, the Muni guys. Mm-hmm. And I said, Can you get more of those those bonds? And And Bobby says, That's what we do. And uh and then the the the the the shit ripped on Thursday. Friday the bond market was closed.
Uh uh in terms of the forecast, uh my personal forecast, uh, and it relates to something that's gotten to be fairly well known now is um There's this concept of seasonality. So I I understand we have a div a very diverse audience here, so I I I I I just want to explain that concept very briefly. So um simply put You're familiar with the uh holiday of Thanksgiving, which is in November.
So one would expect the price of turkeys to go up in October in anticipation of Thanksgiving. And since it happens Thanksgiving happens every year. You can kinda count on okay. So sometimes the price goes up in September, sometimes it goes up in November, sometimes and sometimes it doesn't go up. Maybe there's too many turkeys, but roughly, you know, that's what happens. And it sort of ties into this other situation where it had to be a year ago.
uh Mark or Uncle Mark, depending on who you are, said he he had a trade that's a seasonality trade, and he really wanted to get this one right. So he sent it over to me and I don't want to talk about it that way. But it has gotten to be a little bit mainstream. Uh anyway, uh Anytime my brother wants to talk about the markets, we talk about the markets, which is pretty much almost every day. But this one really resonated with me. So uh I contacted uh
my uh former colleague Robbie Wall and I said, Hey Robbie, uh Marky's got this trade idea. Do you mind taking a look at it? And you know, Robbie's like, sure and he comes back and he says, Yeah, this this thing looks like there might be something to it. Uh the months go by and um it involves the stock market. And we're now we're in a bear market, right? And and we're you and I are talking about it and I'm talking about where
I might wanna buy it and and the Schiller price earnings ratio and and this this and that. And and Uncle Mark's, you know, longtime equity investor and Uh, you know, he's not pleased to watch stuff go down. But I was look, you know, talking to him and I said, I you know, look, I'm not a stock guy, but I gotta tell ya The shit looks like it's lining up pretty good. And he's like, Well, what do you mean? I said, Well, there's a seasonality.
They're banging the market and the economy's weakening and I think we're hitting the apex in rates. I said, you know, this might all this might all line up. And so Robbie says The low of the stock market is going to be october thirteenth. And this is where we had this joke'cause Kevin Mirk put out a piece the thirty first and then we were teasing Kevin about being dyslexic. Mm-hmm. So uh yeah, so I I bought a
as I promised, I went out and I bought a bunch of stuff on the open. Remember if we had the two orders? Colonel, buy the two orders? Yeah. Yeah. Um, I bought a limit and then thanks to Leslie I bought a market order and You know, I don't know, this stuff's up what, fourteen percent from there? And and I know you're not supposed to talk about it because Prophets are like goblins, uh, you know, blah, blah, blah, blah, blah. But, you know, fuck it. And uh
Uh I'm gonna enjoy a while last. Uh but um what I thought was a nice thing to bring up in the show is so I was talking to Mark and This was the first time he's worked on a trade in what I would call an institutional setting, meaning talk to other traders. working together. Now we all have our own P and L, we all manage it slightly differently. I don't know how Robbie and Marky did, I know how I did, and it anyway. Um it it kind of resonated with me as to why
And I talked about this with Mark, but why we did so well at Greenwich Capital. We had a small group of guys that we talk about trades and everyone had their same had had had their own sector to trade. Okay. But their generic themes within market Whether it's volatility, shape of the yield curve, level of price earnings ratios, Fed policy, money supply growth. And so when you have an open discussion About these topics. Sometimes we have
somebody says, Hey, well, if this is gonna happen then what's the market gonna do? And then we would kinda distill down what the market would sorta do and People would run around, come up with their own little sort of trade ideas and and and talk about'em. And since everyone had their own sector, they could express a similar view without impacting anybody else. And we had world class analysts, b both of which whose names I haven't been given.
And so, you know, you wanna know how we made money every year for sixteen years? It's'cause It's'cause we sat down and we talked about these things. And and, you know, since this is always and everywhere about me, you know, I was thinking about my career and w what was my greatest talent, I think. I think my greatest talent was the ability to bring people smarter than me together, create an environment where they didn't feel threatened. They felt encouraged.
to talk about what they were thinking without the risk of being made to feel bad. And most importantly, they knew that They would be compensated fairly. And that was part and parcel of the generic. Greenwich Capital model, but uh I I think, you know, I might as well take credit'cause it's uh it's'cause it's our show. Yeah. I think we I I think we I I think we had that dialed in. as good as anybody. And um so it was fun to experience this with Mark.
i especially given the result has been pretty good. It wouldn't be quite as fun if if we didn't of course money. But when when we talk about the crypto and my entire crypto Exposure is this. Big ad God bless'em, gave me one dollar worth of crypto. It's a at Coinbase? Coinbase, yeah, yeah, yeah. Yeah. Yes. I mean, I'd get my fucking money out of there. Dollar run. Dude. Binance, yeah, Binance, Coinbase, Kraken.
uh, who's very, very bright, great with computers, called me up nine months ago and had just become familiar with the cryptocurrency and was a zealot about You know, it's the way of the future. You don't understand. Yeah. Flat Earther. You're not gonna make it. And he he tells me about how. There's a system called Swift. And it's kind of an antiquated way to transfer money to banks in foreign countries. And he's he's like, you know, if you want to transfer money to a bank in Africa
It'll cost you thirty dollars and you can do it with Bitcoin or or the blockchain and it's virtually free. Virtually free. I said, Okay, that's that's great. Now you're in my wheelhouse and let me give you a little counterpoint to this. I said You go to the bank and you want to wire money to your buddy somewhere else, foreign country, and You pay them the twenty five or thirty dollars and it takes a couple of days.
Right? Why? Well you give them your wire instructions, you give them their wire instructions. They make sure the wire instructions match. Okay. Once everything's all agreed upon, then they wire the money, then they acknowledge receipt of the money, and then they tell you the money's been delivered. Okay. Mm-hmm. And for that they charge you the enormous sum of twenty. and by the way
They're there twenty four seven. Meaning somebody set up a business to do this. They're sitting there. If nobody shows up They don't make any money. So they took some risks setting up this business, right? I said so you pay twenty-five dollars and you know if there's a problem, by the way, if there's a problem, if it somehow goes in the wrong account, they go and they get it.
They go get it back. Okay. Now If you send money I don't even know how this works, if you send money to the wrong crypto address. Who do you call? You call it the Winklevi? Fall eleventh. How can I have it back? This happened. I you know, I I keep thinking there's that there's that poster that I love of the dogs playing poker. Yeah, yeah, of course. Which which reminds me of that.
that uh joke about when you sit at the poker table for twenty minutes and you don't know who the chump is, the chump is you. Yeah, of course. So so now You would say this is crypto winter. Um where's Gratz. Missing. Where's where's the Winklevi? Sailor. Where's Matt where's Matt Damon? Matt Sailor's behind bars, right? Okay. Ca Kathy Wood. Sociopaths.
Is still running around bitching about the Fed, not understanding. She said the Roaring Twenties are coming. She said that the hut that the Fed is done and they're the here come the Roaring Twenties. Yeah. That's what she said yesterday. Stop, stop, keep going. I don't want to talk about it. I know, I know. you know, the guy in the mental institution thinks everyone else is crazy and he's the only sane one. Right. So the crypto stuff is
Great technology. Yeah. You know, V C R versus Beta Max. Betamax blew it away. Yeah, yeah. If you know what I'm talking about. Um I I just Get your money back while you can. Fast. And then go sell. Then go then go um Then goes sue Tom Brady and and Giselle for for um inciting you to invest in something that was purely uh a fraud. Dude that commercial is is it in hindsight, I mean even in four even watching it in real time, it
It's a Ponzi scheme. It's a two minute advertisement for a Ponzi scheme where he picks up his phone and he calls ten people. It's it's it's hilarious. Um it has been it's been so much fun. And like I I really I go ahead. I went looking at this thing this morning'cause I'm old enough to remember all of the commercials for the dot com
uh era. And there was one there's a couple of them. One is uh I found Which was a guy in a sales meeting Talking about how get on the line, we got a big allocation of the stock There's two courtside tickets for the biggest producer Let's put some lipstick on these pigs and get'em outta here. And I found at three thirty in the morning, Arizona time, five thirty your time, I found it. And it's worth it's it's worth watching. Um
So one I couldn't find was uh I mean we we all know the classic let's light this candle. Yeah, yeah right? Yeah, of course. But there's one it was one that everything they were thinking of, you know, people's told the truth all the time. Yeah, yeah, yeah. And and and it's like I won't do it justice, but one of the little vignettes was A guy shows up to a girl's house. And she opens the door and he goes from smiling to frowning.
And in his head, he's thinking, My friend said you were good looking. And the girl is thinking. This guy's never gonna be a success. And then and then the guy says in his mind he goes, Oops, I just farted It was groundbreaking. It's it's fucking priceless. Um yeah. So uh old chestnut says Get it while you can. Yeah, well you know, and and I love the notion
Oh old Chestnut said you never should have put it there in the first place. Okay. So now if you didn't listen in the first place, now you have to panic and see if you can log into Binance and Coinbase and get your money and go home, you know? So you made a comment earlier about, you know, I couldn't tell Cheryl I lost the money. Just just to revisit that conversation so people who haven't Been with us longer. So back when the New Yorker wrote an article about Bitcoin, like 10 years ago.
She saw it and she said it's about markets, you might like it, you should read it. So I I read it and it you know, like That's back when, you know, you could buy a pizza for eleven Bitcoin kind of thing. And so I showed it to our top quant, whose name I've not been given permission. But I've worked with him Since 1992. Okay, so that's thir thirty years? Mm-hmm. Okay. So he looked at the thing and and I said, well, why don't we why don't we become Bitcoin miners?
And he said, Well take a look at it. And I don't know where it was at the time. It could have been a dollar, it could have been five dollars, it could have been fifty. I I don't know, it wasn't it wasn't very much. And he came back and he said, You know, we can do it. But in Greenwich, Connecticut, with the price of electricity, we're not we're not gonna make any money.
Okay. So I watched the thing for a while longer and and it's gaining a little bit of traction, but it's still not a hundred bucks a a coin at this point. And I'm like Maybe I'll buy some just to just to see. And so I started hunting the thing down, and it's trading on this. Exchange. was a gaming platform. Gaming meaning like Grand Theft Auto. Right? I didn't know that at the time. Legal. But anyway I I'm thinking about what am I gonna do? And and you know, I
I'm not gonna put ten thousand dollars into something. I I I'm gonna put something up that it's gonna mean something and and uh I'm hemming it hard. And they got robbed. They got robbed of like eight hundred million dollars. And and uh I like the next day I I look myself in the mirror and I'm like, I cannot do this. I I cannot lose millions of dollars until Cheryl I lost. Like if I do a trade and blow up
She's got all the time in the world for me, right?'Cause she's seen the highs and the lows. Of course like it's gone. Like I can't I'd have more luck telling her I had an affair. Dude, I think about that. But like when you told me that story, uh that was the end of crypto for me. Like that was the light that was the light bulb that needed to go on.'Cause I was screwing around and I you know, buying it on Coinbase and oh yeah, this is fun. Um And then when he said I cannot tell Cheryl the money.
is gone. That's that really drove the stake into the heart. And I was like, Oh, that that's really serious and and I and I played that conversation out in my mind, knowing the two of them and I was like, No no no no no if if MB can't can't fly that up the black bowl I'm not sailing that ship either.
permission to sign off before I do trade. I just I just you know I j I just I just think about it. Yeah. Um I know the other side of that story is that you missed out buying ten million dollars worth of bi bitcoin at fifty five dollars. Well, so you you know how as a trading manager and a father of three daughters. Okay. You you hear you will come to hear every excuse in the world. Okay. You know why I'm lucky I didn't buy it at fifty five dollars?
Because it would have gone to a hundred, I'd have sold it, and I would have shorted it at two hundred and I'd have bought it back at seventy eight thousand bucks. Um I do I do wanna hit one point. Yeah. I know we we agreed we weren't gonna dance on the grave, but They're just starting to dig the grave. And I don't know I don't know how much validity there is to this. So I had a conversation with
with an older friend of mine who is in the legal sphere and he's done huge amounts of work with regulatory agencies. Mm-hmm. And he told me uh And this is just a conversation between two friends, so it's not something that can be relied upon. But he said, you know, if somebody came to him and said, We need to create a registration statement for I don't know how I would do it. I had a conversation with Anthony yesterday talking about what is Bitcoin? Is it an asset?
Is it a currency? And all of a sudden this notion became very clear to me why it's going to be hard, if not impossible, to regulate. Okay. So that's one thing. Let's just take that, set that aside. This is the part that frightens me. And it doesn't frighten me in terms of a uh financial meltdown, but it frightens me in terms of uh what we may be heading into. So uh
I'm gonna go a little sideways here and I hope you can bring me back'cause I may get lost. But so back before and during the stock market crash, uh this guy named Wigan who ran Citibank, he went out and he like shorted the bank stock, sold all the stock. bought it back at a huge profit and created all sorts of losses for employees, investors. And then I think there was a congressman named Pakora.
I think I have this right. Okay. Google will get you. Okay. Anyway, that's where a lot of these security acts came in. But this Pakura guy was a a very tenacious, bright man, and he got things organized. Arguably this crypto stuff is the land of the lawless. Amen.
You know. Why do why do I ru why do I rob crypto? Because that's where the money is? Well, every day you you see you hear about someone stealing something, right? I don't know, when's the last time you heard about a guy running into a bank? place outside of a Denzel Washington movie. Yeah really or or The Joker. Mm-hmm. Uh you know, it's it just doesn't happen. But um The reason I do think there's something on a bigger picture to be of f concerned about, and this could be completely hearsay.
And as a member of the fourth estate, you and I both hold ourselves to a higher standard. But since you so subtly seduced me to the dark side of Twitter. Mm-hmm. There has been some chatter that I've read, I I don't know whether it's right or not, but talking about how Gary Gensler Who taught at MIT worked with an economics professor at MIT, and that professor. May I have? Do you know about this? Oh yeah, yeah. C can you fill in the blanks a little bit? Gensler's dad was
at MIT, um and the head of the econ department at MIT is Sam Bankmanfried's dad. So the father taught at MIT No That's right, yeah. It can't be Fran Frank Winfried's father. No. Can't be. What do you uh okay. I I I thought it was something like this. That Gensler was a colleague of an economics professor at MIT, and the colleague's daughter. uh was involved in one of these adjunct corporations of FTF.
Something along those lines. Anyway, I would Okay, I'm sorry, I'm sorry, I'm sorry. Alameda, CEO. Caroline Ca the the CEO of Alameda, that little chick Caroline Capital. Her dad, Glenn Ellison, is the department head of economics at MIT. Her dad is the head of the econ department at MIT, the chick that runs Alameda.
All right, prior to get appoint prior to getting appointed to the SEC, Gary Gensler was the professor of practice of global econ at MIT. So Caroline Ellison, the father, Glenn Ellison is an MIT guy. Gensler is an MIT guy. There's your connection. Okay. Well it's a huge it's a huge school, so there's no way they knew each other. No way. No way. No chance. Um a and anyway, the inference, mm-hmm and I'm sure there's nothing to this, mm-hmm, but the inference is that the father
Has some parlay with Gensler at the SEC. Now, Just one man's opinion. I don't own I own a one dollar of Bitcoin. I will never trade it because then I'd have to tick it on my tax return. I think that if there's something to that, you now have the head of the SEC. Tangentially involved to one of the greatest fraud scams in the history of mankind. Oh yeah. Now That that's like teapot dome, like the great oil scandal. You're gonna i if that is true, okay. Get that ship in the harbor and
'Cause there's gonna be some shit going on and you're gonna need uh like a Pakora guy to come in and sort this stuff out. I I'm not saying Gensler did anything wrong. I'm sure he's an honorable guy and I'm sure this is nothing more than the cesspool, Twitter, internet. Although Elon Musk is gonna clean it up. Totally. But uh that's that's what I would invite people to think about which is what's an attestation, mm-hmm, right? What uh
you know, what do you need Bitcoin for? Mm-hmm. I mean, Michael Saylor argued you should use it because you can avoid Excuse me. Evade paying taxes. Said to mortgage your house. Mortgage your house to buy Bitcoin is what Sailor said.
I I could go on for hours. I I I I'm back in Arizona and I think I mentioned that in like one of the the restaurants here, there's like the waiter that's been there forever and he was telling people about how he made all this money trading Bitcoin and he kept his job'cause he wanted something to do and and the last thing I remember him saying was and the best thing is you never have to pay taxes
You know.'Cause this is this is the same I know it's funny, but uh I it's not. I mean you said the best thing is you don't have to pay taxes because you just borrow against it. My oh Jesus. Oh my god. I I d I don't know that I can go back to that restaurant. Right, I was gonna say. I I don't know so dude, a lot of people have brought up MF Global. M F Global, that that word has been bouncing around a lot. Do you know you know who cleaned that mess up? Who?
Uncle Mark. That's why my ears perked up when I heard it. Um so according to the MF Global history, like so that's Sam Bankman Freed, he's the next governor of New Jersey. Only that's the trajectory, right? You know, somebody suggested and this is true, the best thing that can happen to that kid is he goes into FDI FBI custody because Uh he's got a price on his head.
I don't think it was you. I said the bad guys are letting gonna twist a while. Mm-hmm. And let and then it's gonna he's gonna he's gonna pull a uh Um You know, the pedophile. Yeah. Wait, wait a minute. Wait a minute. Are you saying S That guy Freed, that Kid Freed gave money to the Democrats? Not not only did he give money, he's the biggest donor. The biggest donor. I wonder where do you think he got that money? I could only imagine.
He wouldn't have taken it from investors, would he? No, no, no, no, no, no. No. Oh that would be wrong. No, that's yeah, that's that's that's not on the up and up. Um but yeah, that you know, you got he had so much money and you know, he gave it to that you know, to the political political party and you know. So ten percent for the big guy. Yeah.
Well I said I wanted a body. I I got my body. Little did I know last week I said, you know, I'm not Kathy Wood fine. I wanted a body. I got my fucking body. How about that, buddy? Okay. This has been fantastic. I like uh I know we weren't gonna I I know we said we weren't gonna do it but and there's been a lot of a lot of people on Twitter, like there you know, si people lost their life savings and it's not classy and it's tacky. Okay.
So is telling me to have fun staying poor and telling me telling Morris he doesn't get it. Okay, and you guys have been clubbing us with crypto. You want to do Super Bowl commercials. You're gonna have arenas named after you. You're gonna have Tony Blair and Bill Clinton sitting down in the Bahamas chewing the fat. Okay, now it's my turn, okay? Now it's my turn.
A year ago, when there was two people listening to this show, okay, we had two people listening to the show, and Morris spent fifty-eight minutes on tether to the point where we had to stop talking about We talked about it too much. Guess what? He was right. And it took a while. Okay. It took a long time. But this is the payoff. So to that fucking clown out there who said we don't give actionable intel.
whoever he had the nerve to post that in the apple apple reviews okay these guys are good but they don't give me any actionable here here's the fucking actionable intel okay we nailed the fucking bottom of the spy okay so you got that a couple weeks ago you would have been up 15 And we told you not to put your fucking money in crypto. And if you had listened to that, you wouldn't been in a panic all week trying to get your money out of FTX, okay?
So there's your intel, all right. My boy was dead right, okay? I've been waiting since Thursday morning to get on this microphone and pat him on the back. Okay? So anyone that wants to talk about folksy wisdom, here's your fucking folksy wisdom. Listen to Morris. We told you so. Goodbye. We're out here.