Are Rates and Breadth Warning About a Bankpocalypse Crash

[0:00] back for another week. Um, this is a long one in terms of slides. So, I'm not going to spend a lot of time on any one slide. Uh, just to make sure that I can do this hopefully in uh, less than an hour. So, this is the speed round. So, you guys can pause here and go look at the agenda for the week if you would like. Uh, in terms of disclosures, I really want you to highlight on this. Um I appreciate all the subscribers that are reaching out and are thanking me for the educational side what they're learning particularly as we move into
[0:30] something critical that very few people understand which is personal AI agents from the consumer agent side it is a need for everyone to use them and at the same time the educational side on the crypto which is going to become as in my opinion the people that spend the time on it now today for the next two months are going to have a huge advantage from an investment standpoint over the course of the next year. It was a big week for me in terms of putting things up for the subscribers. This I put up 13 different things including three. This will be the third video. Uh for those of you who get
[1:02] the video, subscribers get it with no ads. Not that that's a reason that you should subscribe to it, but um doing all of this and kind of going through it to make sure that the education side is accelerating is because of the crypto launch, but also because consumer agents happen at the same time. So there's a new report up on consumer agents there because I believe this is as important as what we went through in November of last year with Opus 4.5 in the beginning of the enterprise agents from a token perspective. Uh bonds and breath the
[1:33] main story. I did a subscriber video this week. Uh if you didn't see it you should go to the site and pull it down. The slide deck is there. I do that for all the subscriber videos which means you can just go through it. I go through the history of bond yields. Uh this is being over dramatic. I'm going to go through the reasons why. I'm not going to take you on the same journey as I did in the subscriber one. I'm going to have some of the same slides, but I want to make sure you you you go through this. When you see rates moving up and you have breath moving down, not only does
[2:04] that make perfect sense, but it is insane to me that people are sitting there saying that this is going to be like the.com bubble. So, I'm going to take you through a the reasons why this is different, b what things in the market you can look for for what will warn you. Having lived and traded through this when I was already an experienced person, I was running the S&P options book for Morgan Stanley during the do-com bubble, writing an S&P side on it. I've been through all of this. This is not the same thing. First
[2:34] of all, for everyone who's too young and for everyone who's too stubborn, uh, from the great financial crisis, Lehman Brothers right here, to basically the normalization of Fed rates after COVID, here's what happened. We had basically a lost 14-year period where we had negative yielding bonds. Negative yielding bonds, something that is not possible. We had negative yielding bonds. So, this period should not count when you're looking at a chart. What is happening now? If it was this, no one
[3:04] would care. But because we're doing this with this, everyone freaks out, which is just insane to me. So they start writing things like, "This is going to take down the world. You've never seen this before. We have too much debt." As of right now, we are not even in the midpoint of a normal range for when nominal GDP is where it is today. Nominal GDP is about 6.5%. We should be probably closer to seven. I will start worrying about bonds at least from being a long-term problem if we
[3:34] start getting above seven in a major way. It does matter as it goes higher. Certain parts of the market starts to underperform, but those parts of the market have been underperforming for years as I'm going to highlight. This is why it's a different economy. So, I'm not going to go through every single thing here, but I do want you to pay attention to this part if no other. pause and go through every single thing or go watch the subscriber video. The technology sector including Alphabet,
[4:04] Microsoft, Google, Amazon, Nvidia, Meta and Tesla which are in different sectors and not in the technology. They were just barely above 10% and the great financial crisis as a waiting. They're now 56%. This is the main reason why rates don't matter compared to back then. So again, these companies did not take debt during that period. These companies are not based on it. Yes, they're taking debt now, but it doesn't matter as I go
[4:35] through this why it doesn't matter. Uh the main point is the economy has changed dramatically since then purely from that basis. And if you don't believe me, in 2015, so not at the great financial crisis for GM and the four main the four major homebuilders, they had revenues of 333 billion in 2015. They have 432 for a kagger of just 2.4%. They've been sucking wind for the last however many years. This is what Nvidian Micron had in revenues combined those
[5:05] years, 21 billion. Here's Nvidian Micron now 535 billion. These names deserve to go down when rates go higher. They need rates to go down. It should not be a surprise. These companies are, it's not even a comparison how small they are. Their market cap is is smaller than the revenue. There's nothing to talk about in this. It's a joke. When you add in Google, Meta, Apple, Amazon, Microsoft, that's another 2.4 trillion, not in market cap, in
[5:37] revenues. Here's where they were back then. It was actually comparable to some degree. This is a completely different economy. Anyone that is going before 2015 and telling you what happened before then because rates went higher is comparing it to a time that doesn't exist. If you don't believe me there, here are the estimates for next year's earnings or revenues for Nvidia. This is where they're going to finish this year. So 410 to 700, let's just round it to 300 billion in delta.
[6:07] That's the increase that is expected and that is based off what Jensen Yuang already said. You know the number is going to be above it. So we're talking about equal to the entire revenues for the year for these companies for this year. That's how much Nvidia is going to increase next year. So when you're listening to people tell you this, I'm telling you this is a fact. strategists who called for a broadening out this year are not admitting that they were wrong and they're hoping that the market
[6:38] crashes so they can get bailed out. This is not a guess from me. I've seen this. I've jumped into X a couple times this week because I find it insane that people are not realizing that the market cap has changed. 78 companies make up 56% of the market. And these companies are nonyclical. They are not hurt by rates moving from 5% to 5.3. There are a lot of old economy names, not the digital
[7:08] economy, the old economy names that are basically getting taken out. If you don't believe me, financial conditions is something every macro strategist talks about. From 1971 to 1999, this is the fitting of what would happen if rates went higher. Financial conditions would tighten. Here's what's happened since then. No change. It doesn't matter. This is from 2010 to 2026. You want to see it broken out? The 70s rates went higher. Tightening in the
[7:38] market. Rates went higher. Financial conditions. It's not just it's been going on since the launch of the computer. So, this is something that's been happening. If you want to say how big the number is, sometimes you just got to put it into perspective. Here is the combination of year-over-year change in 10ear yields plus Fed funds looking back over history. So, this is the rolling one-year change in basis points. Does this really look scary? When you're comparing this to 2022, which I will repeat, this did not turn into a recession. That should be a signal that you shouldn't be worried about rates
[8:09] here. Look, boom. Did we have Silicon Valley Bank end up in trouble here? And everyone likes to jump on, oh, let's add that to the mix. That wasn't a blip on anything. It didn't change economics. It didn't change anything. So, why is Breath weakening? Well, we had the yield curve basically flattening, which is the rates way of saying there's more higher probability of recession, but really this is just a representation of rates moving higher because this was unfortunately for the market a bare flattener. So, we had rates going up
[8:39] across the curve. They were just going up faster in the short end because we were building in more expectations of Fed rate hikes. Well, that changed dramatically this week because John Williams came out and basically said no hike in October. We got a weaker PCE and then we got weaker payroll data. So, breath at some point maybe it'll stabilize. I'm not saying expect Breath to get much better, but maybe when we get through earnings and companies start talking how they're not seeing the dramatic change, I think that's when
[9:09] you'll go because this is a one correlation move amongst it. I'll show that too. NDX over the S&P. Everyone who bail, you know, has been worried about the AI trade. Well, NDX over S&P is going higher. This is the relationship to the S&P. Basically, we've been consolidating now in the S&P really since June when the AI trade broke down and now we're rebuilding it. And at some point here, I would expect us to go higher. Here's the thing to watch. So, as I mentioned during my time during the dotcom bubble, this is what
[9:40] was going on with staples over the S&P. So, as you had breath going down, guess what was going on? People were rotating away from the stuff that was risky and they were moving it into the safe names. So, it moved in here. But that's not just it. Staples over the S&P remained incredibly strong for a long time. We are basically now going through where tech had a hard time during this period. This is all during the doc the the iPhone side. So
[10:13] staples over the S&P held in and everyone was wondering how this was possible. And the reason was because we had negative yielding debt. And so instead of buying bonds, you would buy staples or utilities. Well, now Staples versus S&P is making new lows. You don't believe me? Here's the breath from 20 2008 to 2023. And basically anytime we had a a breath selloff, which is the white line, you'd have staples falling relative or you've had staples
[10:43] rallying versus the S&P. So this is inverted. So again, I I I don't know how to say this uh enough for you guys. Uh when we get to a point where there's something to worry about with breath, you're going to see people rotating into defensives. I've shown this before. I showed this on a subscriber video. financials relative to utilities. So banks have been very weak. I'm going to go through the banks because they're going to have a bank apocalypse uh just like SAS did and I think we're in the early stages of something that'll be probably a Q1 story. Um financials
[11:15] relative to utilities when this is going higher this means growth is good because banks which are interest rate sensitive and certainly get hurt with credit problems. People rotate into utilities. So this is a rate situation. Now, equal weight tech. We keep hearing how equal weight's getting destroyed. No, it's not. Equal weight tech made a new all-time high today. Uh, equal weight tech relative to equal weight S&P, which has been going down. Again, these things are correlated. So, eventually we'll go
[11:46] higher. Tom Mlen basically going through the new highs, new lows. This is typically a bottoming sign for the market. So, is that the way we should look at it? Well, I think so because look who is making all the new lows. So, this is from the compound and friends. Uh, big shout out to them because I thought this was a great way of breaking it down and I listen to those guys a lot. Um, chartkidmatt.com. You can go get his charts on there. But basically showing that staples seeing a
[12:17] spike in new lows, utilities having a massive spike in new lows. Tech no spike in new lows. Financials news that's a good growth sign. Um that's how oversold we were. So if you take a 14-day RSI of breath going back to 1999, actually we have data back to 2004. This blue line here is 25. So, I wanted to go back and look and see, well, how do these things do when we hit those levels? Okay. Well, here's all the times that the RSI the
[12:48] day it hit or broke below 25. So, this date, you guys can go back and go look the date that we broke it. Here are the hit rates going forward. These are the returns going forward. Again, I think when you look at this stuff and you see that breath is usually a bottoming sign, uh, rather than something negative, and in particular, if you just go look kind of at the course of the last whatever years, aside from the great financial crisis, you're heavily skewed on the six-month performance to the upside. Uh,
[13:20] this is the reason why strategists are bearish. when you make an outlook call at the beginning of the year and you call for a broadening out trade. I've watched a lot of ex people be bragging because they were long Europe short the US. All of these different things. Well, that's completely unwind now because rates and oil have gone higher and the weak have been basically underperforming. But also the AI trade continues to defy the doubters. This red line here is chat GPT. This is equal weight S&P relative to S&P. You are talking to someone who believes that all
[13:50] equities are vulnerable over the course of the next 5 years. But first, we have to get rid of all of the small businesses that don't supply the infrastructure for AI. Yes, I will repeat it. We need to get rid of all the businesses. They are being replaced by AI native businesses, which is I why I reach out to you to sign up for my service to at a minimum get your kids to be using AI. I think I've had a good hit ratio now with college kids and my son in particular with using the tools that I'm showing and how to think about it because most of the video I put together
[14:20] is done with AI. So here is equal weight versus capweight S&P correlated to the ISM. So when we got this move higher, we were supposed to get a bounce which we did. Now if rates had stayed low, I think this trade would have continued for at least the rest of the year. But because rates in oil, and this is what sent it down first was oil. Then we got the bounce back up, but then we got the rate problem and the oil problem. It makes perfect logical sense. But those names don't matter to the economy.
[14:52] BKX close below the 200 day moving average. Um, like I said, I think there's a bank apocalypse that is starting just like I talked about a SAS apocalypse beginning in the third quarter of last year or the fourth quarter. By the fourth quarter, I was talking about the fact that the agents were here. Well, we have another agent move which is personal agents which get into crypto which I'll go through. But we had our first kind of viral thing that Torston Sllock sent out this week
[15:22] basically talking about how agents will make the logical decision to move money and take away the fees that are on yields. That is just one part of the agentic side. Um I believe and again I'm putting all of this in there that you will be living and I believe this is true and I'll be talking about Joseph Chalum. I'll give you guys some homework. But over the course of the last three weeks, I've had multiple conversations with people about Mastercard and Visa, and they are trying to defend those companies. I see zero chance that these companies are going to benefit in the
[15:53] long run. It's not that they won't benefit today and maybe for the next two years. A bank apocalypse is not about them going out of business, but a bank apocalypse is about gradually, just like it was with Agentic Coding. We get multiple compression. The software names are still making money. We've had a bounce in a lot of them. They are not out of the woods. I do not see them as being anything but on a perma bare market invaluation. And I think banks are now going to go through the same thing as I highlight here is what has
[16:24] happened since crypto or since uh we got the release of Grockbot. This is the my 46 token index which is the crypto ecosystem relative to the BKX going down going down bare market then all of a sudden we get the bounce instinct AI launches their beta version then we get Muse the crypto rails this is the way I go through things guys I bring you facts on what's happening when they started and try to connect them
[16:54] back two-year rates during that period have gone straight up normally crypto gets thought of in liquidity terms. I've debated everyone in Bitcoin about the debasement trade and liquidity as being the story. It certainly started the move when we got Bessant coming in in in August, but then we got Worsh moving higher. So, you've had a change, but here's the thing that matters. Cryptos held in there while rates have gone higher and not a little bit. We brought in Fed rate hikes, multiple ones. Here's
[17:25] the way gold reacted. So, gold broke down. If this was the basement then Bitcoin would have followed it. The crypto side would have followed it. The reason it's not following it is because we have a different stage. We have the agents coming. Clearly Bessant wants rates to go lower or at least to do something different. So I think the Zervos higher was absolutely uh another warning shot about hey we don't want rates to get higher. We don't know how we're going to get them down. We're going to do something. Then you get John Williams coming out. There's no need for urgency. Then you
[17:55] have the buyback in terms of getting the six billion. You get the reaction day one and then of course it turns the other direction. Um here's where we are for the week with all of that going on. The S&P continues to have a beautiful looking breakout chart at some point consolidating these gains. While the breath has been horrible. I showed you the oversold signal. The fact that the breath has been so weak, rates went up and now we've had a situation where we're going to have a pause on this stuff. So, I think at some point here
[18:25] we're going to break higher, especially since the NDX made new all-time highs today. And that chart looks very similar to the S&P. It just looks like it broke out. Equal weight uh tech, same thing. Here's the frustration for people. I hear this from many, many macro podcasts. They want a trend. There's no trend. This is copper. Obvious trade. Can't make any money. I already showed you gold. Can't make money. Everyone who had the anti- I want to be long crypto or AI trades. That's the problem, guys. If you've been fading crypto and saying I want to be long gold, I don't want to be long crypto. Sorry, you're losing. If
[18:56] you said, I want to be long uh commodities because this is the trade for both the debasing side, but it's also the trade for uh the buildout, the infrastructure side. That's not working. Nobody wants to be long the AI stuff because they're scared. Here's the dollar. Pain, pain, pain, pain. I mean, basically a year of pain. And yet, here's the AI trade. Started here, consolidation, everyone freaks out. We get situational awareness, and now we're just going right back to the
[19:27] same old story. Um, my constant. So, that was my 100name portfolio. Here is the 10 name concentrated one. I just wanted to show you guys like it worked almost every day, came back, and since then, it's gone right back up, and it's now up 106% for the year. State of the Markets from Andre Horowitz in terms of AI. Definitely worth the read. I'm only going to show you some of the slides. If you're long the tech earnings,
[19:58] I mean, this is pretty much what I was showing you guys, but like this is what you want to be long, not call it a bubble. You call it a bubble and you go, I've seen this before with the dot bubble, you're paying the price. Because I've been hearing that now for two years. I can bring up the videos that I was doing in 24 or 25. Yeah, 24. And show you guys the bubble talk. Here's what you're investing in if you're playing for anything but that. This is the reason Breath is so bad is because the earnings are just not there for home builders and autos and staples which are getting disrupted by AI especially as people are going to live longer. They
[20:29] have OMIC. Every single trade is a disruption trade. The alpha is on shorting the 440, not being ignoring the fact that they're going down and thinking it's going to take the entire economy down. um reports of obsolescence on chips. So, every time you hear someone talk about GPUs, and this is all through uh I guess two weeks ago, every single chip from Nvidia continues. There's supposed to be in decline, guys. When it once it comes out, it's like a car. It's supposed to
[21:00] depreciate because there's a better one the next day. This is what they talked about in terms of the opportunities coming up. The reason I want to show this, more tokens, more tokens, more tokens, more tokens. Every one of these means a lot more tokens. And then we get Micron this week. Everyone wants to fade Micron. the amount of crap I got when I said I bought started buying it back in the 800s from people and I said I wanted to be involved because I thought it would
[21:30] go higher over the course of the next year and I was prepared to build a sizable position if we went back towards 500. Uh but we never did. We just sat there. It's not a huge position for me. It's not as big as Marll or Nvidia, but I'm still in it and it's not as big as crypto. But I mean the revenue jumps 11fold as you go through. We do not see line of sight when supply catches up with demand because the demand trends of larger models, growing context, more concurrency, greater
[22:01] agents across enterprise and consumer only continue to drive greater need for memory. AI is moving to the edge. Physical embodied AI. They're seeing their first deployment of physical AI and autonomous vehicles. Why does it consume so much memory? The magnitude of the increase, the human. These are all quotes from the earnings call. You're crazy if you don't believe that the compute needs are growing. Another part of the 100 thematic infrastructure
[22:33] portfolio is a company called Rogers in the chemical side. I think it's a really important one. They had an investor day. So, it wasn't earnings, it was an investor day, and they took their numbers up. This was a step up function, a massive move. Um, basically from $3 to 14. So when you go through this, and I'm not going to read all of these because again, this is a long thing I've got here. We're getting into Reuben time where everything is about efficiency and watts, which is why Marllin,
[23:05] go look what these names did this week. Our internal target is higher than that in terms of what they're talking about in needs. Here is for you guys the because it was a step up and I love stepups. And then I go, well, if they're stepping up and they're having supply issues, there's tons of places to go look. Here you go. For those of you who are not subscribers, don't say I didn't give you anything without subscribing. There's a bunch of names on here that you guys can go look at. These are the
[23:35] names that connect back to Rogers on the work that I've done over the course of the last two years in my writings. So all I do for those of you who are subscribers whenever this happens upload all of my work that you have saved or just put it in one folder in anywhere have co-work go into the folder and only use that data and go out of the hundred names take what Rogers did and connect it back and show me what'll have an important side. So again the packing compl the power density the heat density
[24:05] we're starting to get into the point where heat matters. Most great investments begin in discomfort. This is when we start to segue to the consumer agents and into crypto. Um, I basically included this part. So, this is from Howard Marx. Um, and I wanted to show this just because last year when I was writing about inference and talking about Micron, the push back I got was again the discomfort people had. Part of it was
[24:35] tariffs, but part of it was believing AI was a bubble. So every time you say AI is a bubble, you've been wrong and it's cost you dramatically. So we have a new inflection point here. So tokens grew dramatically because of inference, because of memory, and now we're getting into consumer agents, which I'm selling you is more demand because we're now going to have 8 billion people over the course of the next five years using personal. It's going to be on your phone. Everyone has a phone. They're going to have it. Muse is free. So when
[25:07] I use Muse, the amount of tokens I'm using between Grock and Muse is far bigger than any month I've ever used. So if you're not using them, great. But I'm already causing demand issues. This is a paper I wrote in May 15th of 2025. The inference inflection, where real time AI meets real time opportunity. I want you to read this. While everyone was busy debating tariffs, AI inference quietly had its breakout moment. While markets fixated on trade headlines and the daily churn of social media noise, think rates and breath, a far more important macro
[25:38] trend was again meaning momentum. You missed AI because of this. Then in June, the firework shows over. One of the hardest things for investors to recognize during an exponential technological transition is the difference between new information and delayed understanding. The Agentic AI buildout has just begun. And the reason I want to show this, since that period, there's been no money to make in AI. Now, I'm not saying Micron's not going to continue to make you money, but you had to go through a 700 point fall, 50% fall in the stock, and I think it might
[26:11] go up from the peak another whatever it was, it was a,000 back then. So, I when I wrote this paper, Micron was $98. When I wrote this paper, it was over 1,000. You don't get windows to wait. So now I'm going to take you through the educational side. I have a lot of podcasts in here. For those of you who want to get smarter on the situation, go listen to them. Don't just take what my summary is in this video. Go listen. This young kid here is the founder of uh
[26:43] Instinct AI. The personal ra the founder argues we are entering the largest software race in history. Agents replace interfaces. Trust becomes everything. I'm going to emphasize trust again and again. This is the argument that people give for Mastercard and Visa. They are wrong, wrong, wrong. You want trust, you go to crypto, you go to cryptography, you go to instant settlement. I will show you why. You are wrong if you believe trust in the system is there. It takes time. And this kid explains trust, not intelligence, is presented as the
[27:14] biggest bottleneck. And that's because of stubborn thinkers. users gradually provide more permissions as confidence builds, which means as they use it, they get less worried about the other issues. This will happen with crypto as well. It will take time. Everything takes time. But when you say this is the way people trust, I will show you times where I've heard this before and it came to bite people big time. Attention economy versus the agent economy. This is important for people who think that Meta and these other places are going to win.
[27:44] I think this is going to be a feeding frenzy. The Mag 7 used to have their own lanes. Now they're going to be fighting with each other over the same TAM. I think it is very very difficult because it's going to depend on what you're comfortable with and where you spend your attention. And that's why the attention economy which is where we've had the Mag 7 in different verticals now we're going to have it harder and the agent economy is very very different and businesses must adapt. He talks about that product design is becoming psychology and that's what I mean. It's becoming something that is very very
[28:14] challenging uh to deal with. I'm moving away from being with my phone because Muse is sending me things during the day multiple multiple times. I can't even tell you how many things I get on Muse all day long. The compute problem. This is one of the most interesting parts. Exponential compute demand. User growth compounds daily while proactive agents require constant background reasoning. Meaning compute demand scales much faster than traditional applications. The founder explains why buying GPUs becomes extraordinarily difficult. Infrastructure lead times stretch
[28:44] months. This is the most important part in there. He's telling you how difficult the compute side is. They already have 1 billion annualized transaction volume. Think about that. We're at the point where commerce is happening. 50% of that volume is travel. He goes through the daily user growth. Look at these numbers. 10 10 to 11%. Again, it's early, but it's fine. 40% remember that trust thing. Give Instinct a personal credit card within 3 weeks.
[29:14] 80% retention after connecting sensitive information. The amount of compute that you need access to is now doubling effectively every week. So, it's going to be an order of magnitude more than what we thought we needed. They're different than coding agents. It becomes a new source of compute demand. I'm not going to read the whole thing anymore, but basically, no matter how you take it, guys, if you haven't increased your memory needs, I want to bring you back to something that I've
[29:45] shown you that Goldman Sachs put out. I've shown it for months. We are in the first, yes, the first inning of of of token consumption. So, whatever silly things you're looking about about overall spend and all these things and going through it, you're missing it. Remember, and I saw this today, I didn't include it in the video, but the total revenue this year for OpenAI and Anthropic combined, which is going to be about a hundred billion dollars combined, not the ARR, but their actual revenue is going to be greater than the
[30:16] entire software sector. So again, when you go through this and you start thinking this money is coming from somewhere. So people that thought that the only TAM that they would get would be on the software side, the increase this year is bigger than what the increase is for the rest of software. They're taking it from other places for sure. Meta expands Muse to small businesses. OpenAI launches dots. So they've got their first competitor. Grockbot now connects to your finances,
[30:47] your bank card, investment accounts, new finance. Again, thank crypto. Why didn't Google build Muse? It is kind of amazing that Google has fallen so far behind in terms of getting stuff out. Uh this is just another thing that came out this week in terms of another product. This is called FO. Uh just more agents uh personal AI bots will blow the everyday tech user away in the next few months. In the past month, we've noticed the usefulness of these bots has gone off the charts. I completely agree. And
[31:17] that's the thing that I mentioned in last week's video, uh, which was how much things changed from the Zuckerberg town hall to that. So, because this is an important point and because I wanted to take it in, I did put on the website a 25page report. Now, this report is using all of the research I already did. It's taking the hundred names that are in my basket and basically going through and showing you like I did with Rogers, but now from the entire thing who benefits from personal assistance, edge
[31:48] AI, embodied AI in a step-up function. So, it's not changing the enterprise benefits. It's just saying how will this impact the other names because this will add to their earnings going forward. So, I go through the difference between the two of them. There's a lot of parts in this and because it's coming out so fast, I think it's important for you guys to go spend the time. Smartphones, AIPCs, wearables, smart home. We are in the agentic physical AI side because you
[32:18] have to remember agent swarms mean the technology is good enough for agents, which means we're getting closer to humanoids, to FSD, to all of that. So, start pushing those. Whatever you thought the time period was, they're coming faster. the two names that come out to give you an idea of the way this goes. So the direct side, the edge side, the cloud side, what is the ranking they get. So again, this is using um uh a new tool that I went through. So I'm doing this via the
[32:50] reports that I did. So the research is there any new stuff, but then I'm using Jev tool uh on this. The other thing I did, so this week there will be two weekly dashboards up for the hundred names. So you guys can start finding the names that you want to be involved in as the breath continues to increase and these names are going to many of them are going to go to all-time highs. Um I did a weekly one as well. I'm going to replace the one that I do each week with one that has weekly data as well. So as of now you can see for those of you who
[33:20] use it all of the stuff is the same but now there's weekly parts as well. I just want to highlight that because I know a lot of you have prompt set up and things like that. You bring it up. I take the the prompt that's there and explain to your LLM what's going on. Reach out to me if you have an issue, but both of them I'm uploading the weekly and the regular one. And then based on how people are doing with the weekly one, I'll just stay with the one. Um, this is the prompt that I'm bringing out. So, I put together an analyst prompt for this
[33:52] to basically help people that have just come on because a lot of crypto people have come on. You need to be on top of the AI side because they're connected. The reason I want crypto people to learn AI, it's going to make you smarter and feel more confident in crypto being in a bull market. Most crypto people have been involved have seen this before where they get a head fake and it goes right back to lows. I've heard this repeatedly. And for people who have a lot of money already in crypto that don't want to get involved, I understand if you already have money there, but start paying attention to not only the list of the names, but also the
[34:23] technical side of AI. It will match up and they're moving. Here's the breath number, the most recent one. So, the 20-day, we've jumped up to 74. You can see it's the highest number since the peak. The 50-day is up at 69. Again, the highest number since the peak. You've now got a turn up, a decisive turn up in the above the 200 day moving average. And the 50-day slope just jumped by seven points. So, we have now a good scenario. and the average to
[34:55] range V has continued to collapse. So we are 20% that's the average from the 52- week high. We still have 20% of room. This number to me is going to continue to fall like I've been talking about. Go through the list if you haven't used Jev yet. Absolutely use it. Absolutely load it up. Has been a magical thing for me. I'm not going to show you the output and what it is, but basically what I'm using Jev for is exactly it does a scoring system. It goes through everything. It is a It puts into the entire context
[35:27] into play. So, if you haven't spent time looking at it, I highly recommend figuring out how to get it connected to either Claude or Astra. You can do it. It's through an MCP. If you haven't done it yet, I highly recommend this is the analysis that it goes. So, use the Jev portfolio tool again and make sure this is incorporated into the analysis. So, this is with the Aentic consumer inflection report going through and giving me probabilities. the agentic regime strengthening 100% probability based on everything that it's seeing in
[35:57] terms of the data. So, and the biggest change it said was Qualcomm. So, that report uses Jev in there. For those of you have not had your kids on this video and have not subscribed and then got your kids subscribed, this is my son texting me this week when I asked when we started talking. We check in about what he's doing in AI and I was asking him how his internship or his co-op is doing. Um, I have literally enjoyed working here so much. I'm telling you, as someone who lives in Williamsburg with a bunch of people around the age of
[36:28] my son, so my son is 21, uh, he would be a junior in college, but he's doing this internship. The amount of people in their 20s who say I have literally enjoyed working here so much is close to zero. It is literally adapt or die, though. Whenever I have meetings and they are walking through a process, I'm always like, why on earth is this not already automated? That's why he's having a great time because he knows how to use AI. This is amazing. And the most proud moment I was is when I asked him,
[36:58] "Have you used Jev Tool yet?" He said, "Yeah." I said, "How could you have used it so far? It only came out a month ago." And he said, "I stay on the X all day long looking for the newest features that I can upload." Because he's already AI native. College has become less needed for him. He could already work and be doing phenomenal because he's able to do things that 99.9% of the people on the planet can't do. He's a finance major. He only had a Python boot
[37:28] camp which was like a oneweek thing that I gave him. Get your kids going. Have them watch this. It will inspire them. Trust me, I have a lot of them reaching out to me. Um, I want to bring up this guy. I spoke to Ilia uh Pulukin uh this week. amazing story. He was one of the Transformer 8, which is one of the eight co-authors on the Transformer paper that Google put out that allowed for Gen AI the way we see it today. So, I spoke to him because he's with this
[37:59] protocol near he's the founder. Um, very interesting story. I talked a good deal about it with Pomp. Uh, very impressed with the kid. He's a young guy, but obviously very smart. He's not as young as he was in the Transformer side, but NEAR is one of the tokens that I've mentioned. Uh, one of the ones I've invested in personally, but this episode with no priors is really what I wanted to mention as a segue here. This is important for you if you're a mutual fund, if you're a hedge fund, any asset manager. If you go
[38:30] listen to this episode, the reason it's important is because this was in 2023. I think it was May of 2023. No priors is a very good uh technology podcast and they talked to him. So here's someone who this is in the peak of now people being hired. I mean this guy worked on the transformer paper. He obviously could go to any one of the labs and yet he was working on Near and his story on what it
[39:00] is is amazing. So Near was set up and this is again 2023 this interview believing that the blockchain was an operating system for AI agents. He talks about all of this agentic side back in 2023. Again, ChachiBT had just been launched 6 months earlier. to listen to visionaries who have an AI background talk about how the blockchain is necessary and why he personally decided this was the best path for him to go to where he had left Google to do a coding
[39:32] agent company like open ai openai and anthropic you have to go listen to it if you're curious and want to learn Ily is the guy to go listen to from that this is the way it is if AI agents are equipped with a blockchain account they will become an economic agent that is able to pay other people as other people AIs do. He talked about this whole thing and it was his reason with his AI company that he decided this was a thing because he couldn't make payments to people around the world and the tested
[40:02] the blockchain and it wasn't ready. So he decided to go out and build an L1 basically the infrastructure the internet necessary for the payment side to be ready for AI agents. It's a great story. It's worth listening to. He did a more recent one which was uh two weeks. Oh no, this was uh almost last week. I listened to him again and again again. I spoke to him this week uh on a call because I had spoken about them and it's very weird that the founders of companies will sit on the phone with you. That doesn't happen in public companies. But in private companies
[40:32] where they are just growing, this is the Peter Lynch thing. You get to talk to these people and find them before everyone else does. this John Gillan article uh interview with Tom Lee I'm going to reference again as I move forward the William Mugayar uh this is a podcast so I'm going to give you guys the subscribers all of these podcasts that I'm referencing the weekly podcast info will go out Sunday at 9:00 a.m. Look for it. This is the one to really go through. Almost all of them are related to crypto. But this is
[41:03] where your education begins. William is a brilliant guy. He was involved in Napster in the '9s. Then he got involved in Ethereum. He and I had a conversation as well this week. He has a new book coming out. He and I spoke because he also heard me talk about it. These founders and these highly, highly smart, experienced people want to talk. And the reason they want to talk is they can feel where we are because they've been building things for this moment. It wasn't for 2021. It wasn't for 2017. It was for now. So, in this uh in those two
[41:35] interviews, the reason I want to bring them up is it talks about Ethereum, how it's mispriced, how it should be thought of as four connected pieces. Now, this is Mugayar's uh side. I'm going to get into Tom Lee's side and another person, Joseph Chalum, who worked at Black Rockck as well, but Ethereum is something you need to understand. Ethereum is effectively the internet in my opinion. uh and how you value the internet right now is all of the apps on top of it. That is not the way crypto is going to work, but there will be some connection to it. So, Ethereum is
[42:05] important for everyone to go through and I think William does the best point because he's been involved in the space from the beginning, but he also was involved in peer-to-peer with Napster. He gets it. He was also at Ula Packard a long time ago. So, this is an experienced person, very, very bright and he both Ilia and him said a lot of things. dot con dots that connected for me. I don't get that too many points when I talked to people. So between the two of them, one hour I probably had seven things that I left with. Um this is just a summary of William. You guys
[42:35] can look at this on your own in terms of the way to value it. Joseph Chalum um he is now the CEO of Sharplink. He was at BlackRock. He's probably the closest person uh to Tradfi in terms of the finance side. He's the person you want to listen to for the agentic big bang. So, this is a podcast that came out this week and this is the bank apocalypse. We estimate agents will touch about 4,000 trillion dollars of fees over the next decade for the financial industry.
[43:06] Ethereum is financial in in uh infrastructure trust commodity for the future financial rails. It'll be the settlement layer for almost all of finance. Why agents change finance? Traditional rails can't handle agents. Everything that he talks about in here is all about agents being the catalyst. Again, I'm not just throwing this at you and going through it. I'm giving you the people so you don't have to believe it from me. This is the research I do. This is the education you get. Ethereum is
[43:36] effectively the toll road to tokenization. And that's Larry Fin's framing. Um, again, another one that you guys will get on this. So, here are the three of them. Ether will end up being the trust commodity for the future financial rails. Ethereum security layer and finan finality and trust. The paradigm shift is about trust. You guys notice trust, trust, trust. I showed you Noah trust. Noah from Instinct AI. You have to understand that when you say the current system you can trust, you cannot
[44:07] trust it. You cannot. And I will explain why. So if you're older and you have money, you have something to lose. for younger people and for AI native businesses who depend on instant settlement and don't want their money hung up somewhere throughout the system. There's a corn car horn in the background. Sorry, you guys have to listen to this. Um, are we going to trust them if they're running Visa Rails and JP Morgan accounts to make sure that they're not going to drain our financial resources? I feel like every week now there's something that goes on. Last week it was my uh it was my uh uh Siri talking on here. So,
[44:39] sorry about the horn in the background. uh level of trust within financial systems. All right, let me go close the window and see if that'll help. Didn't need to do it. See, you guys get a show with Jordy. It's not just It's real time. It's one It's a It's a If you thought there was a script, there's no script. There's no editing. Um AI agents weaken the old human trust model. Need We need machine verile verifiable trust. Lee, AI creates a new trust problem. Absolutely. The old architecture of
[45:09] trust is breaking. Absolutely. ETH becomes the trust commodity for the new financial rails. This is the title of William Muggayar's book. I'm doing a uh a sentence in it in terms of the forward. Uh I believe in what he's going and this trust shift thing is brilliant. This is the part where like it was with other things which I'm going to highlight now. Remember where you were with iPhone vers Blackberry, wherever you were working,
[45:39] whether you didn't trust the iPhone or didn't want to use the iPhone, whether your corporation wouldn't let you go on the iPhone for security, and now the iPhone is thought of as the most secure place. This was a huge deal. So the Blackberry to me is Visa, Mastercard. You can sit there and pretend this stuff is things you don't understand. Go back to Howard Marx. Just because this brings discomfort for you doesn't make it the best investment. This needs to prove to
[46:09] be a winner. I find 0.0 chance that Visa and Mastercard will be the winners. Will they participate? Yes, just like Salesforce.com. But you have to be a growth business. AI native businesses and demographics are not going to use this. They are going to use cheaper things. So will big companies and people that have lots of money continue to use Visa, Mastercard? maybe for a while. But when you're investing in growth, you have to realize that the ecosystem is changing now. And
[46:40] that is going to be billions of entrepreneurs like my son, like me building businesses and revenue streams that are competing with other places. And everything to me is about putting it on the crypto rails if you use agents because the agents want it. There is absolutely no doubt. So, I've given you Ilia. I've given you Tom Lee. I've given you Joseph Chalum. I've given you now something you can look at and go, "Yeah, was I one of those guys that thought this would be the trusted thing? Did I work for a company that thought that
[47:10] it's not real?" And so, I want to give you part of the reason why and then give you something that William told me, which uh again, Muggy are. So, agents demand speed. And this is the part that I think people say for Master and Visa card, it's just not that important. No one needs that kind of speed, which I disagree with. Uh, but when you wire money on a Friday night and it doesn't get into your bank account until Monday and you might think, where's your money? Well, we have to go through a lot of
[47:40] different places. So, it's not only slow. The reason it's slow is because it needs to go through a bunch of checks and balances. Here are the hackers. Every time that it doesn't settle, there's an issue. So speed is also a safety feature. If you haven't factored it into your thinking, you must. And if you don't know that, here is an example. GameStop, remember in Jan 21, we had the freak out. Well, it created a lot of issues because of margin calls and all
[48:11] kinds of stuff. So what happened over the we went from T+1, T+2 to T+1. And William pointed that out. That was the trigger point. It was GameStop. It was a situation where too much volume happened in too short a period and there were all kinds of margin issues. I will let you know it took multiple years, three and a half years. This is the friction with inside the current system to make the change to go to T+1. But the reason it went to T+1 to was to reduce the risk. They found the faster the settlement,
[48:42] the less the risk in that situation. With agent swarms now, you don't want your money sitting out in Never Neverland. we want to immediately settle. Here we are the latest updated numbers so far for the month of October there for those of you who are looking at it. Um it gets reweed remember. So we reweed the index or I reweed the index September 30th. So the names got reweed. That's the benchmark waiting now for all of them. And the index level when I show you the charts and things that keeps
[49:13] everything constant. And then we just reweigh it uh just like you would with an index in stocks. Month to date, been a quiet day. Got off to a huge start on Friday on the payroll numbers, then cuffed in. Here is the breath and trend. If you're not involved here so far, uh you're missing out on a bunch of things. Uh again, here's the crypto rails relative to the banks. So if you agree with me that Mastercard Ves and all the banks are going to have their business disrupted not just on the payment side but the tokenization side as well then
[49:43] you should subscribe and go look at my crypto video. So I did crypto why now last week which went through a lot of the different reasons this week is on learning the stack making sure you start to learn the verticals for the next five weeks. I will give you two of the 10 verticals. Think of them as themes or sectors. Um, I will give you the charts on them all and then I will give you prompts to do the homework along with the videos. The two I did this week, AI agents in the machine economy and stable coins and synthetic dollar systems. Uh, Peter Lynch is the inspiration for why
[50:15] I'm doing this stuff. I believe for everyone, especially younger people, but anyone who's involved in this personally, this is the critical time to be involved in something that the banks don't cover that has a fundamental bid to it that is massive. So if you believe everything I said to now, you have to know the big money has not invested there. And it's coming to Ethereum, it's coming to Salana, it's coming to Bitcoin, but it will also spread throughout the ecosystem as people as the fundamental people like Ilia and like William, they're getting calls much
[50:45] more now. I'm hearing this. I'm getting them more from asset managers. The FOMO is growing. So I'm not going to read the whole thing to you, but this is the reason why thinking of Peter Lynch at this point is important. Uh, this is the end result of a prompt that I have. You can see it's 13. I'm going to, again, this is going to go up in the subscriber wall. I'm not going to go through it, but this is meant to help you with these crypto names to where you can just pick one of the names of the 46, add this prompt in, run it, and it will give you a ton of detail on the name. The best
[51:16] place to learn about these things is on the internet. The banks, when they get involved in this, I don't know how they're going to learn. Maybe they'll subscribe to my video. Maybe they'll go get get on there, but they're going to have to hire. How many analysts do you have to hire to actually know what these tokens do? This is a huge advantage to use AI. So, here's the prompt. It's called the Peter Lynch Framework Invisor Labs vertical analysis prompt. You can read through what it's going to do, but this will help you learn about them. Take the 46 names, break them into these 10 sectors so you can think just like
[51:47] you do in the market. I'm giving you one index for everyone who's saying to me they want 10 names or five names or this. No chance. Crypto is a riskier place. The reason ETFs are great is because it's got 46 names. The reason I'm equal weighting it and not cap weighting it is because to benefit from this, I think the equal weight is good. Think about what I just said. I don't think equal weight is good for the stock market because I believe we're losing thousands of companies including the public companies being disrupted like banks and software companies. But on
[52:18] this side, the money is going to flow from that space into this space because it's flowing into the AI native businesses which will use this. That's the way you have to think about it. When tokenization comes, we will go from the mag seven of growth to the mag billion of growth. We will lose many, many companies that will never grow again like Ford, like GM. That should have been gone a long time ago, but we've prevented that from happening. So again, 13 things. you will be smarter at the end of this week. I guarantee you if you
[52:49] subscribe, I work very hard to provide you that and to use AI to help me give you at least something to be good to look at. So, he's been busy. He's a good guy. If you guys haven't reached out to him, Mark will help you out. Just reach out to him this week. A bare market within a bull market. I put this out this week. And again, if you didn't get a chance to read it, own scarcity. how AI and tokenization could reshape valuation for all companies. Joseph Chalum put this out this week. Highly recommend it.
[53:21] If you don't believe me, follow Wall Street. SEC's 5-year transition period. Will tokenized stocks disrupt Wall Street? Here are the timelines of all the things that happened since the Clarity Act failed to pass. [sighs] New rules for the custody of crypto assets. Very important for investment advisors. This is from the Federal Reserve Bank of San Francisco talking about the importance of stable coins. If you guys don't know what stable coins are, and I'm showing
[53:52] you that the government is telling you, the Fed is telling you, start learning now. Start understanding stable coins won't go mainstream on speed alone. Visa found US adoption intent for international travelers jumped from 36 to 56 when bank level protection was added. Why trust is the next battleground again? Trust, trust, trust. Swift, you remember Swift platform transfers, crossber payments across the existing rails and digital value. Robin Hood's next big bet at the Hood Summit, AI bots
[54:24] that trade while you sleep. I will be spending more time on this. I am hopeful that someone on the asset management side who wants me to do an ETF and realizes I will not do an ETF. But what I will do, having run exchange traded fund business at Morgan Stanley, knowing program trading and being a derivative person, knowing how to execute in a basket, the Agentic side is the perfect way of my research being matched up with the names that I have. So whether it's a crypto place, whether
[54:54] it's a bank, whether it's Robin Hood, Mumu, Interactive Brokers, get your act straight, call up. I'm happy to go through this. I want my subscribers to be able to invest in the index and the names, but I want them also to be able to use Agentic Trading, Goldman Sachs going online. These are all this week, guys. Morgan Stanley builds crypto lab to test future of Wall Street. They're setting up a digital asset lab to test technologies including stable coins, tokenization, and decentralized finance applications. Does that sound like
[55:25] something that isn't going to happen, or is a bank worried that their growth might be disrupted? Bank Apocalypse. City expands digital assets footprint with Coinbase partnership. Bank Apocalypse. Big move. 1.83 trillion. Asset manager Franklin Templeton is turning mo tokenized money market funds into active crypto collateral with Bybit. TD Cowan joining. Uh my buddy Chris Perkins wrote this and for everyone who's worried about how quantum will hurt crypto, I already
[55:55] showed you that AI agent swarms are going to hurt your financial system wires and everything. We will have hackings. Pay attention to all the hackings, the ship hacking that happened in near Texas coast that we found out today. Everything is under attack. Quantum won't kill crypto, but it could accelerate Wall Street's adoption of blockchain. Brilliant piece by Chris Perkins. Thank you for your service, my friend, and thank you for doing good work on this. That's all I got. Finishing with the disclosures. Hopefully that was Yeah, it looks like
[56:26] it was about an hour. Sorry for the horn honking, but at least Siri didn't jump in. Thanks to all the subscribers. If you haven't subscribed yet on YouTube, please subscribe. Give it to your kids. Let everyone watch this. Send it around the world. Love you guys. See you.