Quick Look Back and Start Looking Forward

You can go out again. I think you got to score You really know. Why is it anybody? You don't have to answer.

Greetings and welcome to Inside Baseball with Old Chestnut. I'm Liam Allen with Morris Sacks. How you doing, my friend? Happy holidays. Indeed. Indeed, indeed. Thank you. Likewise. Yeah. So you got a little uh sunshine? I did. I went to the I went to the sunshine state. I went down to Florida. Um dude, I love it down there.

Do you? Yeah, I I'll tell you why. I go to Delray Beach. It's got one little main street, a chocolate shop, an ice cream shop, a beautiful beach, a cute little hotel, a hundred-foot-tall Christmas tree for the kids. It's a two and a half hour flight. I don't I don't deal with DeSantis. I don't deal with Trump. I don't deal with any of the like the Florida I mean, don't get me wrong, the lunatics are down there if you're looking for'em. Um

And everyone down there's from New York, so y you can't go down the street without bumping into somebody you know. Um but Dude, it's it's forty two degrees and miserable here at home. It's it's it's terribly depressing. So to let the kids run around in the beach, um Yeah. No, it's a great. So we skipped last week's podcast and I I want to come clean on this. Um we were we were sorta set to go and the things

I've had planned on talking about just took me to a fucking dark spot. And instead of Trying to pretend I was someone I wasn't. Um we just decided to uh pull the plug. Um there had been some talk of a full fish show, but there was such Such blowback last time. And by the way, for those listening out there, pro tip. If you're fifteen minutes into the episode and you haven't heard Liam or I, y it's probably best you hang up then, okay? Or or enjoy the show. Or enjoy the show.

So we got a lot to talk about and um uh it's it's a little bit I think off the beaten track because it's more society, social behaviour uh stuff. And typically I like to focus on markets with you because I feel no matter how much we talk about it, there's always a little bit of benefit where you're gonna pick something up that you might not know otherwise, right? Yep. Um And hopefully that will be true here. Um

But I think it's gonna take a little different form than it normally does. I mean, let's save some time at the end to talk about the markets and where they're gonna go. But in the short run There were two th two or three things that happen happened simultaneously that put the kibosh on the show for me. One was this FTX blowout. Two was uh DJ D. Sall, also known as David Solomon Chairman of Goldman Sachs, talking about getting oral sex.

And then I think the thing that really bummed me out was I watched uh the Dave Chappelle monologue in Saturday Night Live. And those three things just a a dark cloud descended.

So let's let's let's go one by one. So let's do them this week. Okay. Yeah. So let's start with the low hanging fruit, Dave Chappelle. Okay. Now I d think the guy's very funny. I think he's very bright. Okay. But if I started our show The way he started his monologue, okay? The police would come get me. I mean there's two words you never say together. The Jews. Okay. Well let's pretend, okay I'm gonna put my monologue together.

Well let's guess what those two words might be. And I'll leave it to you to decide. But it ain't gonna be the Jews. Right. Yep. Okay. So my without delving too deeply into this. Mr. Chappelle, this isn't a comment, a contest about who's been treated worse. Okay? So I have minimal experience growing up as a black person. Almost none, you might say. is a Jew uh Let me tell you about the last time I went to temple. Okay? The parking lot was so barricaded.

that Shana had to park about a half a mile from the temple and walk on a main road with no shoulder'cause of all the cars in the dark. Uh we get to the temple, there's a Greenwich police car parked right in front with two officers wearing body armor and holding automatic weapons. And as we walked into the temple, the driveway to the temple was filled with uh cement barricades.

Okay, so um that's my experience as a modern day Jew. Okay. Now America was founded on freedom of religious expression. I'm not beating the drum, but I mean, you know, it's you should okay, that's number one. Number two, and I invite our listeners to go as I have in the past, go to Google and type pogrom And you'll see that every fifty or seventy five years ago.

There's a government entity whose mission is to eliminate the Jews. Mm-hmm. Okay. So I'm a little sensitive to that. I'm not a religious guy. I I I live my religion. I try and be a good And, uh... So on Saturday Night Live, which has hasn't been funny in 30 years, um I don't know how it's still on on TV. I guess it's just because you got a bunch of idiots watching it. Um I I I just I just was taken aback by by that. So that that

That's what I got to say about that. You don't have to agree with, you don't have to defend, that's just my spiel. And uh so now I got that off my chest. Mm-hmm. Um Can I move on to the next subject or you want me to extrapolate? No, no no no no no no no no. No, no. My only thing was like uh the my only pushback would be Don Rickles, all right. At w now can we say it falls under the umbrella of comedy? Like when Rickles did his thing with Sinatra and

And and Dean Martin, like Rickles was vicious, man, and like nothing was off limits. Um and it fell under the umbrella of comedy. Dude. So like Chappelle, yeah, I get it. Like for you like to r to hear him do that. And number one, number one, I heard he had to sneak that monologue in. I heard he in the rehearsal he gave a phony monologue to get it past Lauren Michaels and the producers.

So he must have known so so there was some red flags there already. So he knew it w he was walking a tightrope. Okay. Um But like it's like you said, it's SNL. Like when's the last time we t anyone's talked about SNL or paid attention to SNL? And Chappelle's been like He hasn't to me he hasn't been funny in a while. He was funny when he was younger. Um so like I get it. Dude, I'm not disagreeing with your point. Like y that is you know but the the way he

Yeah. I you have a right to feel how you feel. Yeah. And and I'm never gonna I'm never I'm never gonna try and tell him he shouldn't feel the way he feels. Yeah. But I I guess, you know Clearly he's trying to defend a couple of guys. Yeah. And get laughed at your expense. I g yeah, I just anyway. That's that's my sh shtick and I've said I've said more than enough. So let's move on to more insanity.

I think the larger insanity uh on a smaller scale is David Solomon chairman of what was once the most prestigious investment bank in the United States, or perhaps the world, was at a trader's dinner. And I don't think this is a quote, but apparently he made some comment about being the only guy there who had received the blow job the night before. So, um a couple comments. I went to my first trader dinner at the age of twenty-three. Okay. I'm sixty-two. So what's that? Thirty-nine years? Okay.

I I keep checking my math. We can talk about the A S A T analysis I did over the weekend, but let let anyway. Um so I've been to I would say hundreds. Oh, more than that, yeah. Yeah, you can go to a thousand. I know your numbers, yeah. Okay. Never once have I been in a trader's dinner. And anyone ever said I'm the only not only have they never said I'm not the only I'm the only guy here who got one last night. No it's never it's never come up. Mm-hmm. Yeah. Okay. Yeah. So um

That's number one. So a thousand dinners, five thousand topics, seven thousand topics over the course of a thousand dinners, you do the that's never even come into the into the neighborhood. Okay, go on. And by it and and by the way, you know, it's not like Uh you've met you've met my crowd. Yes, yes, I have. I mean the Yes, I've been to the dinners. Yes, yes. Yes, indeed. But politely, right? Yes. Okay. So here we have this total passive aggressive behavior by

The head of Goldman Sachs. Okay. So there's so much wrong with this. Uh so the firm is fined twelve million dollars. Okay. Whether that number's right or whether that's wrong, that's the number. So our good friend Anthony Peters had made a a comment about something a while ago. How the executives do something wrong, the firm is fined, and the shareholders suffer. So the firm was fined twelve million dollars for something he did. Okay? Why is the firm paying?

So let me give you an example, not exactly the same, but uh I don't know the policy of Goldman Sachs, but this is how it worked to Grange Capital. If you were a salesman and you made an error, and this in fact happened, a guy made a million-dollar error. Now i it was a little touchy feely about whether it was an error or he was trying to get cute and sneaky and i i it didn't work out right. Okay. Okay, yeah. He ate the million dollars.

I'm not talking about million dollars of sales credit. Mm-hmm. He ate the million dollars. I understand. And by the it and by the way, it wasn't, oh my bad, I'll eat the million dollars. It was like we saw what you did. Cough it up. Wow. So now you got a guy who clearly has emotional issues. If he's having these kind of conversations, that's number one. Number two, why do the shareholders need to suffer for twelve million dollars?

Okay. Number three, the board of directors of Goldman Sachs. And I'm I'm gonna take a a shot at something, but I would bet they're the highest paid directors of any firm in the world. in any industry. Okay. How do they tolerate this kind of behavior as a representative of the firm? Why? Because they're getting millions of dollars and they have director's liability insurance.

And the beat goes on. Yeah. So And they sweep it under the rug, you know. This doesn't make news either. You you we gotta dig for this stuff, you know? I maybe you did. This one Maybe maybe Google knows what I like to read. Right, right, right, right. Maybe. So that's the DJ Sal. Yeah. And and you know, look, his days are your shareho you're shareholder. You know, I mean, trust me. There's plenty of guys that can do that job. Why they why they women and why they keep hiring these clowns?

So like one of the clowns they need a woman to w would you be I they need a woman to run Goldman Sachs. They need a a s sharp, tough woman to change the culture there. How about that? Okay. Listen, how about Condoleez Rice? Not my first choice. Okay, what's your first choice? Uh uh let me get back to you. Let me get back to it. We got a on the fly. I like Shelly Lebowitz. Morgan Stanley.

She'd get it done. Okay. There you go. There's your candidate for the next thought, Trevor Goldman Sachs. Let's move on before we get people in trouble. Oh, I thought that was the point of today.

So um let's talk about the FTX FARS. Geez, where do you wanna start? Well I'm gonna break this into pieces so there it's more than just you and me nagging, right? Because as as we both come to learn, we have listeners across the spectrum from medical residents to firefighters, from housewives to Fortune five hundred people. Right. So we gotta we gotta keep this thing going. So

FTX, I just assume is an unregulated entity. Correct. Anyway, there's multiple two hundred entities. I was gonna say and and and the idiot kid is shoving money to his ex girlfriend. Okay. And, you know, they're losing a trade and They're doing Yeho at the sex parties. They've bought a thirty million dollar apartment. Okay. Mm-hmm. Okay. So How does a regulated entity work? Okay, let me let me give you a little example. So I bank with one of the major And they have this know your customer.

So once a year I meet in person with my wealth manager because that's the role of a regulated entity. Okay. I give you another example. I use them as my checking account. Okay. So I wrote a check for$68 and with my handwriting it looked like It was written out to Isis. Okay. So my wealth manager calls me up and he says, I could just tell He's like the dog that's been kicked too much. Like he knows he's gotta do his job, but he knows like I'm not the guy.

I don't think he I don't think I don't think he ever wants to call me. I never have anything nice to say. Oh man. But but but he says compliance flagged it. Well uh please just make it easy on me. And I said it's a check to the New York ICE. It's how I pay for my live feed. Okay. You gotta so like the Schmo that goes on the Yahoo gets the delay quotes. Yeah, yeah, yeah. I'm tra I'm trading so and the exchange is charger for that. Sixty eight bucks a quarter. Okay. That's awesome.

So what? That's a f that's a s that's that's insane. Okay. It's insane. This is beautiful. This is a thing of beauty. Well, but think about it. They're they're charging you for prices. They can do it. Yeah. Anyway, that's not the point of this. The point is a regulated entity sees a check made out to ISIS. Ha ha ha. They want to know, right? I mean it sounds a little funny, but yeah, imagine that man. Okay, okay. So Anyway, we have this FTX thing going on, and let me just be

A total open book on this thing. Every one of these exchanges, okay, it's exactly the same. You can kind of scoff and laugh and say, Well, I'm at this one or I'm at that one. They're all the fucking same. Okay. The worst one is tether. Okay. Now Uh is we put up on the uh the the the Twitter feed, this is how sick I am about what's going on with this thing. Any multi billion dollar company that won't get An audit of the

by one of the big four or one of a globally known account okay, it's a fraud. Mm-hmm. So I'm saying out loud, Tether is a fraud. And if you keep your money there, one day you're gonna wake up and it's gonna be gone. I'm sure Somebody convinced how could you be con who could convince you what could convince you otherwise? What is the audit gonna show?

That all that the w what does the audit show? What are they hiding in the audit? What do you think that they don't want you to see? That it's not it's an a an audit is a very thorough examination of the financials and the internal controls. So for instance, the financials, if they say we got forty billion dollars worth of commercial paper, okay. They go and they make sure there's forty billion dollars of real commercial paper. Thank you. Okay.

So a i one of the great stories is this thing called the Great Salad Oil Swindle. Mm-hmm. Um did you ever hear of this one? Hey, he's hiding the stuff in Jersey and it wasn't oil. Go tell it, tell it, tell it. Well it it it was Oil floats on water. So they'd fill up these huge tanks with s with seawater And they'd put a thin layer of oil on top, and then he would say to the bank we have five hundred million dollars.

So there were there were there are two lessons in auditing. Um one was physical counting. So Probably they sent the junior guy out there, he climbs up to the top, he opens the lid, he looks down, he sticks his finger in and there's oil. Okay. Well You ever seen like when they check your oil tank, they got this huge stick and they Okay. So they didn't do that. No? Then the other one is they didn't do a ratio analysis. Meaning the guy borrowed money

that was like ten times the amount of all the oil avail uh you know, it's like it's impossible. There's not that much. So an audit will go and test that. the assets are there, they'll go and verify the liabilities that they're say that they say they are. That's sort of the meat and potatoes. But the more important thing The second order thing is they test these things called internal control. And that means, as I said last week, the first internal control procedure was the cash register.

Right? That way okay. You sometimes you see, you know, at a grocery store, if your receipt is, you know more than you paid, show the manager we'll give you twenty dollars. So you gotta make sure these things are in place so the employees don't steal you blind.

Um so that's the other part of the audit. So if FTX was w had been audited. Okay. An auditor would have gone through and said, there are related company transactions. Okay. There's no comprehensive sign off procedure for transfer of funds. there's th any host of reasons which would have triggered a um what's that called? Um Senior moment. It would have been a qualified audit opinion.

Okay. In the audit opinion, i it would be legal easy, but it would say we've examined the assets, liabilities, and equity and the internal control procedures of FTX. In our opinion, the financial statements do not accurately reflect. Okay. So once you hear that. picture that old image of the Marx brothers where the reporters all run to the phones and the phone boosts topple over. Okay. So that's what Tether doesn't want to do.

Okay. And you know, uh I isn't Tether run by a doctor who used to be a plastic surgeon with a criminal record? Guy's got a great history. Yeah. A great history. Okay. So It it bums me out and I don't know that I I um use this word correctly, but I'll give it a shot. So there's this cognitive dissonance going on. Meaning, you know Uh most people with a brain know this thing is a sham. Okay. But as long as their situation's okay They don't care what they

So yeah. Dude they did a cut they did a lot of things to make it s not seem like a scam. You could you could know all these things and be like Yeah, but they spent five hundred million to sponsor the arena and they're running Super Bowl commercials and everybody's involved. Like it seemed it's just incredible. That's like the double think, you know? So so there's no there's no uh There's no penalty. This f I'm not even gonna m try and read his fucking name, but the the Chucklehead

with the shitty hairdo who goes to interviews playing video games like Boy Genius. S P Some Yeah, it's I mean, come on, how how about all the people how about all the people that were supposed to do a fiduciary relationship and check their investment. Okay. Dude, how much Ontario the the Ontario Teachers Pension Fund?

The Ontario Teachers Pension Fund. I can s I can speak to that. So you know and I have mentioned that at one point I owned Bye. piece of an airport And as the partners got older and died, it was falling more and more to me and one of my colleagues. And I just knew that I felt an obligation to my partners, especially the ones that had passed. Okay, that I wanted to do the right thing and make sure that we liquidated this thing. We went to Ontario teachers, okay? They crawled up our ass like

Nothing you've ever seen. Okay. Now I don't know what happened between then and now. But the I I'm telling you, so the here's the funny part. I've been told this by sources to be believed reliable but cannot be guaranteed. So now the guy at the Merck is doing this whole spiel about how he met this kid and you knew right away. Oh yeah. Okay. Oh yeah. You know what Terry Duffy's job was in a former life? No.

He's sitting down. He was a broker in the hog pit at the Chicago meeting. So in the big picture, okay. The best brokers would be in the bond pit. Okay. It's the worst brokers being the fuck up Okay. So I'm gonna nominate I'm gonna nominate Terry Duffy. to be chairman of Goldman Sachs. Because because DJ Sow was a commercial paper salesman, which is where we took Yeah. Like you had uh and I I wanna say this without disparaging the repo traders, okay?

You had the uh the people look down uh you know like that's kinda like the scruffy kinda like okay. Like you wouldn't want a commercial paper guy to be your repo trader. That's And so that's DJ Sal, and then of course the guy before him

have been a gold salesman. What is a gold institutional gold salesman doing? I I d I don't imagine. Maybe somebody can write in me. And and by the way The list of losers, you know, they had that that uh clown Gary Cohn who was vying for the top, ended up working for The Trumpster for four hours. I mean, yeah, way to go. But you know, you put these guys in a row, you can see why DJ Sell's saying I got a blowjob last night. No kidding, man.

Oh my god. Okay, so who else can we uh uh but but the point is what's bumming me out about the the Bitcoin stuff is What they've done is they've conflated the value of with the financial technology. Mm-hmm. So they've It's the shell game or the three car Monte game, right? Like, oh yeah, we're pushing this over here, but now let's look at over here. Now we got Tom Brady saying, I'm in, I'm in, I'm in, I'm in, I'm in. Underlying technology. Yeah, yeah. Okay. So we have a system.

That works. And I'm gonna do this in reverse order. Okay. How many times in the last ten years have you opened the news? or the internet and seen a story about how somebody's robbed a bank. for hundreds of millions of dollars. Or someone's had their account stolen and the securities have disappeared. Never. I'm going with never. Never. And and by the way, in most instances, if that happened Okay. That's the broker's problem. Okay. So

It's pretty robust. To give you an example, I'm like a nobody, okay? I'm saying in the last Two months I've traded. Between five hundred thousand and a million shares. not counting stock options and stuff like this, not counting the tens of millions of municipal bonds I've traded. And I'm just like Guy old guy sitting in Arizona farting around for shits and giggles. Right? So imagine the amount of transactions that take place. It's mind boggling. Mind boggling. Okay.

You never hear of a problem. Never. It's amazing. Never. Okay. So the way it works is this. Each security is unique. And they have their own code which is called the QSIP. It's an anachronym, C-U-S-I-P. Did you want to say something? No, I I want to know No, tell me about the Q SIP because they were asking F they said to FTX, give us one Q sip. Couldn't do it. Yeah, okay. Good. Well that I'm that's a funny coincidence, right? Um so for instance, let's see if I wrote this down. Okay.

One of the highest volume securities traded is this these spiders. Mm-hmm. The symbol is S P Y. Mm-hmm. If you I'm assuming you go to Interactive Brokers, you want to trade SPY, you type SPY, buy, sell, whatever. Put it in, trade gets done. That's the end of your concern. In terms of the clearance, I mean you'd probably paralyze watching. Okay. But the the system doesn't know it is SPY. The system knows it as 78462 FI030. That's the QC. Okay. That's how all this stuff gets matched up.

and is it The fastest system in the world? I I I don't know. It's pretty fucking quick. Yeah. Because with the billions of shares that trade every day, they get it all mopped up by the next day. It's amazing. Yep. So what what do we need what do we need a blockchain for? What what do we need I I don't I I don't understand. And and so

If I can't like I said the other day, if I can't understand something in the financial markets, you ain't gonna make any money out of it. Because it's not that complicated. Why why do Why does Tom Brady and Giselle and uh Larry David and Matt Damon why do they need to be involved in technology? that's supposed to take a quote antiquated system. that hasn't had a failure ever.

And move to Oh, because fortune favors the brave? Decentralized. It was all in one exchange. Yeah. So now you have you have all the decentralized guys wanting regulation. Well what is regulation? It's centralization. Yeah. So amazing. And anyway, uh I could go on. Your your winkle your winklevoss boys are on the ropes too.

You know, um I hate to make predictions, especially about the future. Here we go, folks. They're all going they're all going broke. Ah yeah, nobody picked up the phone. Nobody even answered their calls. You're done. If you have your money in exchange and you can get it out Gotta go. Well I I I can't tell you what to do. I wouldn't deign to tell the broil you.

But it's like like you talked about, it's like what am I gonna do? I'm gonna tell Cheryl, Hey, I I g I bought these magic beans. I took I I took the cow to market like you told me. And instead of getting milk and cheese and money, I got these magic beans. Yeah, exactly. That's exactly it. So um it's a farce. And uh Liam and I and I won't mention the name because that would be uh inappropriate. But Liam and I received an email from a highly regarded podcast about cryptocurrency.

And they were very careful. kind, uh making comments about us, about being, you know, kind of know what we're talking about. And they like they would like us to come in and debate it on a podcast with them. And Liam and I are like Not a fucking chance. I'm not validating your existence in debating with you when I know more about this than you do. And uh uh anyway, um I think we beat that horse dead. Um let's move over. Uh It's not over yet, dude. It's not a good thing. How come he's not in jail?

Shouldn't like'cause he's in the Bahamas? Like wire where's the wire fraud like you got wire fraud on him? Is like is like what like what do you even charge him with? Dude, he's gonna do that New York Times speaking engagement this week. Are you kidding me? Dude, you got the Wall Street Journal talking about like oh here are the investors that lost money in FTX.

And it's some like it's some kid from New Canaan with his Patagonia vest that lost eight hundred dollars. That's what the that's who the Wall Street Journal shined the light on. Um dude, it's insanity. The whole thing is bizarre. I'll tell you what. There was I think it was something like forty years ago. Ross Perot had a bunch of employees like in some Arab country and they were being kidnapped. And I think Jimmy Carter might have been president or something. So it was completely ineptitude.

Ross went out and hired his own mercenaries and went in and if I were younger and didn't have children I'm saying five million bucks you can get a group of guys go down there, drag his ass back here, and I'd stick him in the I don't have a basement here, but I'd stick him in the basement in Greenwich and just let him think about his life for five days or Yeah. I don't know how one of these oligarchs hasn't put a bullet in his head.

Dude, he's he's somebody's got his back. Somebody's got his back. Like I said. So I I sent you this thing, Jarndice and Jarndice. Now I'm not a classical litigator. But one time uh the girls and I went snowboarding out in Telluride and you know, we're not a hitter. Like, you know, if it's warm enough and there's some some, you know, uh freshly Groom you're riding groomers. Right, yeah. Blue okay. So but so we come back in the afternoons.

You know, you're kinda killing time, relaxing, have a nice conversation, a little little cocktail, getting ready for dinner. So they put on the they put on this uh series called Bleak House. Okay. Which highly recommend. Okay. But what I took away from it is there was a lawsuit between two family members and the lawsuit was called Jarndice v Jarndize. But the point of bringing it up is

It went on so long and the legal fees were so big that by the time a decision was made there was no money left. Right. So so I looked at I don't know where I saw But Sullivan and Cromwell is involved in this FTX thing. They got lawyers on that case. They're billing out at two thousand bucks an hour. Absolutely. Let's dig in, folks. Let's dig in. Yeah. So um and so the rest of'em are all the same. Mm-hmm. So uh if and what I really get a kick out of this is

I mean, I don't know. Maybe I'm just a little bit. I'll just put mine in cold storage. Meaning they'll take they'll take what it must be a meaningful amount of mine. Right? Sure. So there's no point in me saying it's five thousand bucks or fifty million bucks, whatever it is, to that person it's meaningful. So they're gonna take it. They're gonna have a key that only they know. Please. And they're gonna put it on

fucking piece of equipment that was made in China by slaves. Mm-hmm. Yeah. And that and that's safe. Cold storage.

Speaking of slaves, um Did you notice that um Foxconn is giving employees fourteen hundred dollars severance? Dude, I read I fell asleep last night reading the Wikipedia to Foxconn. Okay,'cause I don't know why. I dude, I was like, dude, it's two hundred thousand employees on one campus living in dorms and they've put down riots before. So you've got two hundred thousand people trying to get out and you can keep them in somehow. Like

Folks, I'm I'm holding my iPhone. We're doing the show on the Mac. Okay. Um I I Foxconn, sniff around that, that is ugly. So so the first thing I see this is this is for g this is there was a bonus. There was a bonus to take the bus. Fourteen hundred bucks and a four hundred dollar bonus if you got on the bus like now. Yeah. But but th what they didn't tell you is

To get the fourteen hundred and the bonus, you gotta give'em one of your kidneys. Dude. And you don't get the money till next year. Oh, oh, oh, trust me. There was pushback about against that. The delay in the money. They were like, Oh, sorry. There was a dude, the statement was amazing. It's it's dude, it is I don't know how Tim Cook keeps that quiet. Um

But yeah, Foxconn. Read about it. Yeah. And and I would imagine if you look up ESG companies, Apple's gotta be top ten, right? I mean, I don't know. Remember you were talking about Apple buying di uh buying Peloton? Yeah. I saw an interesting thing about Apple buying Disney this week. I don't want to talk about it on the show. But yeah, Apple Apple buy App they said I saw a good case for Apple should buy Disney.

Ah, you know, you're you're talking of v investment banking. I'm I'm a trader. But um you know one of the things when we circle back to the farce that is the

the Bitcoin. So um I gotta be a little careful here, but there's a guy that I've affectionately nicknamed Bobo. I know who you talk about. Okay. So Bobo has been a prolific investor in many of these exchanges. Okay. It's my impression Bobo has gone out and set up a hedge fund. with the mission statement of investing in crypto infrastructure, which oddly enough is what Bobo has already bought.

You know, I got a little problem with that. I uh you know. Um that might be viewed as front running investors and in Hong Kong the term for doing that? I I've probably told you this before. It's called rat fuck. They've got a term. Wow. Yeah, yeah, yeah. It's it it's in the lexicon. Yeah, yeah, yeah. I get it. Mm mm, okay. Um and if it's not rat fucking, it's worse than rat fucking if there's something Okay. And then we get to um

Ms. Wood. Ah. Okay. So I made a mistake and I wanna apologize for that. I called her a sociopath. Mm-hmm. And I I I apologize I was wrong. She has a narcissistic personality disorder. Okay. Um claiming Bitcoin in Seven years will be at a million. Now I mentioned to you I'm no good at math, right? But I ran it I ran it on the HP twelve C. That's an eighty percent IRR. That's a lot. It's quite a bit. If you gave an order, Santiago wasn't to be touched. And your orders are always followed.

So if you thought you were gonna have something that was gonna have an eighty IRR, why would you own anything else? Or tell anyone else. Well I'll tell you why she's hush. No, she that's not the business model. She goes remember we talked about this a couple weeks ago? She goes and buys A few hundred million of some thinly traded microcap biotech and then tells everybody about it. Worked out for a while.

breaking the the Hong Kong dollar peg. Dude, they embarrassed themselves twice this week. Yeah, go ahead, go ahead. You talk tal talk about I I I I I mean I'm not gonna say it won't work, but I will say and I know I know Leslie And Robbie and E. G. are sitting listening to this, laughing their ass off. I've been trying to do that for thirty fucking years.

Dude, some some some greats have tried. I mean that's taken down some taken down some big names, right? Well I I don't think it's taken them down because what happens is It was explained to me a long time ago when I was in Hong Kong. I think it's something like this. The Bank of China just kind of lets it be known, like, just sell as much option premium as you want on this thing. You're good.

And so you get guys rolling in there buying, you know, five million, ten million, twenty million, fifty million. And it's like, oh, if the peg goes, it's gonna go to here and my one dollar is gonna be two hundred dollars. And it's like I remember I I remember distinctly We're on the trading floor at Greenwich and Robbie is like 50 feet from me. And I go, hey Robbie, we're doing something stupid. You want in?

And he runs over and he's of course he's in'cause it's stupid. Yep, yep. But um I sent a note to Bill wishing him well, reminding him that I've been trying to do it for thirty years. And he was like, you know, there's a time for everything. And I said, the best part about this is A young bright kid's gonna come to you and tell you he's buying puts on the Hong Kong dollar and You know, it's from generation to generation. Exactly. Exactly. It's a tradition. That's nice. That's nice.

Kathy Wood's a n nuts. Between bit Bitcoin going to a million and that even Cliff Astness when you know, we of course were first. to say her fifty percent IRR portfolio. Um even Cliff who was a a PhD well respected said it's absurd. Um Uh I don't know. Uh her IRR is probably higher'cause the stock was lower when she said it is lower than when she said it. So the the short arc ETF is like up a hundred percent since inception.

It's a thing of beauty. Yeah. So there's this thing we've talked about, the Dunning Kruger effect. That's when you don't have the ability to know, you don't have the ability to do something. Okay. She's so far down the Jesus is my Lord, rabbit hole that, you know Yeah. I I mean the whole we knew at a hundred and seventy couldn't get any better. I didn't do anything. Nope.

You did nothing. It can't get better. It's like when the train pulls in the station, get off. And we do our best and we do our best work. It's the load. Of course you do. Of course you do. The problem the problem in most organizations, okay, is Who run the departments don't want to be challenged by their subordinates. They're too afraid to hire people better than them. They don't like being debated, and they certainly don't like being wrong. Okay. The thing about trading, okay.

You just need to make sure, okay, you got a balance of guys on your squad that are willing to cry bullshit. 'Cause everybody everybody Fuck stuff up. This is what I wanna do. I said, you know, people just never go out of their way to make people feel good about themselves. I said, Oh, okay. He said, you know, I I'm going to take an ad out in the New York Times and I'm going to say You know, Mr. and Mrs. John Doe, American taxpayer, I want to thank you. For working hard and pay your taxes.

And just that was it. And I said, How much is that going to cost you? And he said, For the times it was going to be two hundred and fifty grand. And he says, that's a that's a good idea, don't you think? And this is one of my rare moments of tact. I said, you know, I like it. I like it. But let's do this. Let's both go home and sleep on

And we'll talk about a first thing tomorrow. Now this was not my money, this was his money, but I am very fond of I keep in touch with him this day. And the next morning I go in, we're having coffee, he's like Can you believe that fucking stupid idea I had the the idea?

Well I you know, I tried to tap it down a little bit instead of instead of piling on, you know, I think Well, you know, it's good to talk these things out. But you know, so Kathy Wood lucky or smart or both at the right time and made a bunch of money. And she confused being smart with being in a bull market. And uh then she got involved somehow with the Archigos guy. Mm-hmm. Bill Wang, yeah. I I I don't know what the story is with that. But they they sit up in Westport or wherever they are now.

coming up with, you know, this fiction that, you know, the world's gonna change permanently and all this is gonna happen. And, you know, there's no And and they and and as what happens with a lot of these people with, you know, mental illnesses, they can spin quite a comprehensive Compelling story. Oh absolutely. That's yeah, that's right. Yeah. New York to Washington and Yeah.

Uh quickly about the markets. Absolutely. I mean we got five minutes left. So um You know, we've been I think pretty accurate on uh at least the equity. piece. The rates have bounced around a bit, but I think even on balance, I think we did a nice job. I I can just tell because I look at the P and L on my positions and and they've moved smartly. Um Here's the difficult part for me in relation to the equities. The bonds I like, the bonds I the bonds I love.

Still. Yep. The the only disappointing part for me now as a sixty two year old guy is I'm on a ladder. Because if I blow up I I got I got no money, so right. I'm not going and living with my brother. I mean he'd have a place for me, it'd be nice. Yeah, it'd be nice. But if if I could lever this, I'd because I own long data paper now.

I I think these two year notes are like four and a half or maybe something, you know, a little lower in yield, a little longer on a on a levered basis. So I had the you know At this point I'm unlevered. That would start to look a little bit compelling to me because I think we are uh clearly at the beginning or the early part of recession. So the ray should start to normalize. The front end rates should drop faster than the long end rates. Are the long end rates going to go up? They they might.

And in which case, you know, that's not gonna be tasty for my long dated stuff, but th there's enough carry that It it'll work out. Uh if I was aggressively trading, and I guess when I trade hundreds of thousands of shares that might be defined as aggressively by someone. Yes. Um I'd I'd be interested in looking at some like call options on some Eurodollar futures, something where Interesting. When when life when people wake up

And the fr the front rates start to rally. But the biggest challenge for me is I just am never comfortable owning equity, right? I know. And so Uh Robbie and Uncle Mark did all this research. Robbie. nailed the date, Leslie nailed the methodology, and I just happened to be lucky enough to listen to my friends. Mm-hmm. But I'm convinced we're gonna have a recession and stocks don't do well in a recession. So it's hard for me

be a guy that says well recession's coming that's bad for stocks why do I own stocks and the answer is well I I really shouldn't. Okay. Interesting yeah. But but but what is going on is um I lightened up, I sold ten percent on Friday, okay? And uh excuse me, Wednesday. Yeah, yeah. And the seasonals for this time of year are extraordinarily strong. So m I'm expecting to be out of my equities. Between now and the middle of January.

uh and then go back to flat equities, long fixed income and cash, and then wait for an opportunity to get back into equities. You you know how we've talked about I really like that 200 week moving average. Well we're way above it again The Schiller price earnings ratio is twenty nine something. Now, Uncle Mark is convinced.

That that's not an accurate thing to look at because it's backward looking. We should be looking at forward looking things. And he's right, and I'm gonna start looking at forward looking things. But the two hundred week moving average which You know, I know it's backwards, but to get some compound internal rate of return, you need to be near that average, right? Um so I I I've turned over New Leaf where I'm gonna be pretty open minded of being in stock.

But I'm not you being forty, right? And uh Gave Kell uh he came up with an excellent piece and it talked about using the sharp ratio And um using that as a measure of which way the stock market So getting to why uh I think there's something to this and my bad mass skills fuck me up. uh are this. Basically their argument is You have an investment which compounds exponentially. And you have risk? which is measured by the square root

of some number. So you have a you have a numerator that goes to an exp exponent and you have a denominator Which is the square root of something. So you have the top number getting bigger at an increasing rate, and you got the bottom number getting bigger at a not an increase. Or a slower increase. that I think is somehow they work this into the sharp ratio. Okay. Sharp is return versus risk. But um I counted I know seven people who got eight hundreds on their SAT math.

Wow. I'm not one of them. I got a I I got a five fifty. Okay. All right. Yeah, I think I was something like that too. Yeah. Yeah. So um if I said something wrong with the math. I apologize, but I think I repeated it correctly. But that's why when you're forty You put it in You leave it. Yep. At sixty two, you know. Um I'm in just like instead of playing shuffleboard, waiting for my afternoon jello, my late afternoon Sankka. Sanka. I'm flipp I'm flipping some shit around and that's fun.

So anyway, that's all I gotta say about it. All right, my friend. I appreciate it. That was great. That was great. There's some more actionable intel. dogs out there looking for those bones. Oh, you you you uh got a lot of positive feedback on on how you imagine I imagine I did that every week?

Oh no, I don't I don't I never laugh so hard. My sides hurt. My sides hurt. But you nailed it. Yeah. You know? Out of the mouths of babes. So All right, buddy. I'll see you next week. Next week. Take care. Thanks, man.