Stocks Climb the Wall of Worry While Bitcoin "Crashes"

Right. Overall, uh, fairly quiet week to end the summer. Hopefully, this video will, uh, give you some things to think about coming out as we begin September.

Uh, you know, despite everything that happened, uh, in this month, all of the worries, the reciprocal tariffs, everything going on, uh, Fed drama. S&P posted its fourth monthly gain in a row, finishing up two and a half%. Big month for small caps. So, small caps also had their fourth month. I've been focusing a lot on small caps. Uh you're going to hear that more and more as I focus on the PMIs and a tide that lifts all boats. Uh but the Russell 2000 finished up more than 7%, its biggest month since the election.

Uh banks continue to power higher as part of this reflationary boom theme. Uh banks around the globe are doing great as I've highlighted in prior videos, but the BKX finally made new all-time highs, taking out the 2021. And I want you to think about that 2021 peak area where it fell. That is basically where the PMIs peaked when the rate cycle started. So now we're coming out of a bludgeon PMI. Uh MSCI World XUS con uh picked up the pace a little bit up 2.6% also up for the fourth month in a row.

Earnings uh we're now basically done with earnings as we've gotten through Nvidia. Uh this is where we are in the MAG 7 26.6% year-over-year growth. The 493 493 8.1 these were the expectations coming into the quarter. So we obviously beat in a big way. Uh here's where we are Q2. So there's the 26.6. This is the the 493 at 8.1. And you can see the expectations are for declining year-over-year growth rates in this. So again, uh we still have a scenario that the economy and profit margins are lining up the same way. So you have the strength in there showing up in the sector revenue side. So this is surprises at the sector level. It's across the board the beats. Uh and these numbers are pretty big especially in a world of nominal GDP of around 4%. That's how much sector revenue is beating at the earnings level which is going to get into the profit margin story. So AI is helping drive this. AI is helping drive the profit margin story. And that is where again I'll keep saying it. macro people are too focused on academic things that again are not where they should be and this is the place bonds.

So you've been tortured trying to be long bonds or short bonds. This is 10-year yields in the US. Uh does look from a chart perspective. I mean it looks good. Looks like it'll probably move higher uh on the back of growth getting better, but the reality is inflation is down here right now. So I'll get into that more later, but this is the big story and this is what I expect in the uh final four months of the year is a PMI that is starting to rise higher on the back of the expansion of the needs for the AI infrastructure where it was really just about compute. Uh now it is a massive buildout help being funded again by the hyperscalers raising their capex numbers an expansion around the globe in capex numbers. uh but also the fact that the AI action plan is in place and now we're no longer going to be using the excess capacity or the already built things out there for power like 3M Island as an example and we're now going to get into the need to build all this stuff where there's tremendous shortages on things like gas turbines, transformers, cooling systems, everything along those lines. Uh, I expect the PMI to gradually move higher as the tide lifts all boats and all companies start to see some benefit that comes from this kind of massive buildout.

Uh, to show how important this PMI is, this is basically this is taking the 20month average uh, and this is back over time. We've never been down in this kind of a level and not been in a recession. So, when you think about the economy, people have been trying to forecast a recession. We are not in a recession. We're not even close. But the manufacturing side of the economy has been in a recession and it's been in one for one of the longest times in history. So sitting down at these levels uh for 20 months below way below 50 is important because it means there's a lot of companies, a lot of low multiple value stocks, a lot of things that haven't seen anything positive. This will not be uh in my opinion, you know, some massive buildout of the old his uh the way you'd see it historically. This is a different one because it's about the AI demand and it's leading into humanoids. It's leading into a new fame of all kinds of hardware and cars, robo taxis, all of this stuff is coming uh down the pike in the next 3 years.

Uh Ed Yardi put this out. I've I've talked about this, but it just continues. And he highlights it. We are seeing signs that S&P 500 company earnings gains are broadening. The percentages of S&P 500 companies with positive three-month changes in forward revenues and forward earnings have increased significantly in recent week. That suggests that the S&P should do well. So here it is. This is the change in terms of earnings and where this connects back in. And I had I took that post. I put it into chat GPT asked it the broader implications. uh S&P 500 excluding the MAG 7 should perform well talking about the 493 as more companies are participating in the growth uh for much of 2023. They were heavily concentrated mega cap tech. Broadening earnings revision success suggests healthier market participation. If the S&P 493 strengthens, investors may rotate into midcap and non- tech sectors, diversifying performance away. This comes amid worries of a slowing economy, Fed policy shifts, and tariff headlines. Chad GPT does a really nice job of just explaining it.

Now the reason this is important this is also your denny and this is uh uh a report that he put out late uh last year and this just shows the importance of the S&P revenues relative to the PMI. So historically whenever you get these big revenue surg uh surges in PMIs you end up getting revenue surges. So they've been directly related. If the PMI goes higher you're going to see revenues start to broaden in terms of where they're coming from. uh S&P 500 year-over-year stock price relative to PMIs just to show again how important the PMI is relative and this is the this is my chart. This is S&P year-over-year currently versus the PMI. The PMI is here. S&P year-over-year is up 15% right now. Uh again, I expect PMIs to go higher. We did get one earnings report just to highlight on the the PMI side. That's important. This is the durable goods order. This is for the capital goods new orders non-defense xair year-over-year. Uh I showed this chart before back over time but it is sitting up here. This is again related to the data center and the computer equipment buildout.

Uh Goldman Sachs current activity indicator continues to move higher in August. But the thing I want to highlight this breaks it down by manufacturing, consumer, labor, housing, other this bar here is manufacturing and what you can see is this which is the PMI is the highest number going back based on what they have here in the manufacturing component. So we've seen basically manufacturing bottom here in April gradually move higher. It continues to move higher. And here's something that was released this month. This is the Dodge construction network momentum index for construction. So it breaks it down by commercial building institutional and you can see these changes. More importantly, you can see this chart. Planning data skyrocketed in the month of July on the back of several large projects entering the planning queue for data centers, research and development labs, hospitals and service stations. On the commercial side, all sectors gained momentum. All sectors over the month, notably led by strength in data centers and warehouses. In July, the DMI increased by 41% compared to the same period last year. Commercial segment increased by 24. Institutional segment 85. If all data center projects between 23 and 25 were excluded, commercial planning would be up 26% from year-over-year. So to strip out the data centers which is what this red chart is commercial in this is their their index now is stripping out. So here it is. And now when you strip out the data centers what you can see here is an increase that's dramatic. And if you think about the PMIs again PMI sitting down here and now we're getting up. So there's just no way to refute it in terms of the fact that we are seeing a pickup.

that shows up in DRAMs. Now, this is an important um one. This is the PMI, the orange line overlaid with DRAM spot prices. This is these are the DDR3s. These are the uh the old school ones, the hardware ones, the ones again that have been you can see it bottomed here. It was gradually going up. It has accelerated. These DDR3D RAM chips are widely used in PCs, laptops, servers, consumer electronics, and embedded systems, routers. So old school stuff, not software stuff. Analysts use it as a leading indicator of men of the memory cycle shortages, gluts, prices rebound. DDR3 was the industry standard. I asked is it more older hardware? It was the standard in 2008, 2014. This is the part that I think is important. Um, DRAM markets are cyclical like the PMI. Even older Gen DDR3 pricing can signal tightness or over supply that spills in there. Again, think about a tide that lifts all boats. When you start getting through the stuff that you need and the prices go up dramatically and their shortages, you move to the places where you can get stuff.

Now, one thing that I just want to highlight, if I'm right about the PMIs, and I think we will get up close to 60 just based on a bunch of uh leading indicator signals that uh come from the earning side, the revisions, everything. If we get up here, this is the year-over-year oil price. And I'm bringing this up, you're going to start hearing me talk about oil more and more just because of the sentiment side of it, and because I'm hearing people saying sub50 oil. I like to find ideas that where the stocks charts look great and where the sentiment is bearish. So, this is year-over-year oil. This is the six-month forward contract. When PMIs go up 260, we've basically, you can go back. This is a 60% year-over-year increase. So, again, oil, if we were to have a 50 to 60% year-over-year increase, that would be talking $100 oil. I don't think we're going there, but again, nobody thinks we're going higher. Hedge fund slash this came out late Friday. Hedge funds/bullish oil bets to 2007 low on glut concern. Here we are. This is the chart.

The reason I care about this AI Eric Schmidt April 9th house and energy commerce hearing. We need all sources of power to accelerate because we don't have a choice. You can't solve the whole problem without an all power solution. All power. All sources of power. From my perspective, the answer is yes to all. Let the markets sort it out. Let everybody build everything. We need it all now. Now he did that in April. Then in May, processing 40 480 trillion monthly tokens, 50 times increase in just one year, he in the the Q2 earnings call just two months later, he announced that we had processed 480 million tokens back here. That was again in in May. This is in June or July. Now processing over 980 trillion monthly tokens. Token growth doubling every 6 to 12 months. Electricity demand from inference alone could rival a midsize nation's grid. This is why Eric Schmidt told Congress, "We need all forms of power, fossil, nuclear, renewables, and we need them now." Every trillion token adds roughly a megawatt of continuous power demand. And with Google now at nearly a quadrillion tokens per month, AI inference is already a multi- aent load on the grid. Uh as I go through the rest of this video, uh GPT5 was released, which basically is exploding inference uh usage. So this is only going to get bigger. And there's a reason again why V3 does not allow you to make movies of more than 8 seconds because we wouldn't have enough power to support it. Uh and that's where the issue comes in.

Now Nvidia reported earnings. So again we need power and at the same time we need power. Nvidia's surprise we've been kind of stairstepping down on the revenue side. So, their revenues beat, good number, nothing to be, you know, upset about. Uh, but as Dan Niles put it, I thought Nvidia would report a very strong quarter and was more concerned about their China commentary. I was wrong. In reality, they miss expectations of data center revenues for the first time since the intro of chat GPT. When I get something wrong, I always try to figure out why. And this one baffles me. less than two weeks after they announced the write down. That is when I bullishly wrote uh bullish wrote bullishly on the stock for the first time since there inference demand started to really take off earlier this year with Google reporting they process 50 times more tokens. I just talked about that. Microsoft five times more. As I wrote this past Sunday, I believe between now and Thanksgiving investors should more broadly invested versus buying the Mag 7 or tech names. I'm on the same page for different reasons. Uh but the power side and the infrastructure side, the PMI side, he's not saying anything about the PMIs.

China Shanghai Composite on verge of the biggest breakout this decade. The China positive stories continue locally. Again, more announcements. People continue to fade China because they're not seeing the old signals they used to see from China. China pushes minimum wage hikes to spur consumption. Michael Pettis, this is certainly good news is most it will easily be the most effective of all various ways has tried. Again, China's important. They're the second biggest economy on the planet and in terms of their contribution to growth. Uh they are right with the US. Uh China races to embed AI across all major industries, tripling their output of AI chips. This is not a good thing for Nvidia. Uh the rare earth thing again I I put this up there because Trump's still talking about it. There will be a meeting coming up. Uh I've talked about growing signs from people I think know uh that there's a high probability. But I think this rare earth magnet again this is what changed the entire tariff situation. It's the reason why I think there has to be some grand deal that occurs. And uh I traveled to China a lot from 2007 to 2013. Andy Roth Rothman basically helped set up most of the the the trips that I uh went out there for. Uh one of my favorite people on China in terms of knowing their living for a long time. He wrote this this week. Are you ready for the world's greatest deal? trade deal between she and Trump is increasingly likely in the coming months. On July 9th, so less than two months ago, uh Trump's unpredictable, but the odds of a trade deal with China, while still low, appear to be rising. Those odds have improved substantially in recent weeks as Trump is focused on meeting she close to a deal close to close a deal around the time of the APEC leaders summit. Um, a deal is not a sure thing, but the odds are high enough that investors should think about how they would take advantage of the potential impact on China's equity markets. Again, this is a a big deal. Remember, it wasn't that long ago that foreign investors pulled out of China. Uh, a variety of different reasons, but one of the major catalysts was fears over uh sanctions. because of the sanctions put on Russia and how much long-term investors got hurt on investing in Russia, those things went to zero and a lot of money pulled out of China. Sentiment has been negative on China for some time. It is amazing how many emails and and notes I get from people whenever I say anything that could possibly be positive about China from a contribution to investing. uh the Chinese yuan is having a big move higher again again as possibly an indication that this is getting more in there is some dollar weakness story involved in it but as you can see when we hit the lows and this is right around the the the lows in the stock market it's also just after the rare earth export ban uh I believe there will be a deal because I believe there's no other way with the rare earth situation the way it is only thing that worries me in this whole thing is that China's continually saying they don't need uh Nvidia chips. Can't possibly be the case, but three years from now probably.

All right, Fed drama continues. I'm not going to spend a lot of time on the Lisa Cook thing. We'll let that play out in the courts. Fed is unchartered waters ahead of key decision rate in September because of its dual mandate. Well, an independent Federal Reserve's cornerstone of stable glamour healthy economy. This part here again I think the reason I wanted to include this uh Council of Foreign Affairs piece on here is because I really do believe people are playing a dangerous game with markets. This has been all year. I've heard people, you know, between stagflation, recessions, tariffs are going to take everything down. We're going to have inflation that's going to go forward. The Fed's now making a policy mistake. If I hear another policy mistake thing, uh, people are basically talking about what they think the Fed should do rather than what is happening. And this turmoil going on in the Fed is all related to fiscal dominance and the fact that the administration wants to run the economy hot and the Fed at this point is going against it. You can get into all kinds of academic fights. You can sit in a room, but it's not helping you make money. And that's why I said the bond market is not the place to focus on at this point. But most people sit there and continue to talk about the bond market as a place to be. Uh that resurgence in 2022 is going to be the thing that hurts people because that one little surge of inflation that was due to a one-off situation which has now played its course. There are people that still believe we're going to have serious inflation ahead of the most deflationary technological force that they call it a bubble. So you think of the irony of this whole thing. AI is a bubble. I don't believe in it. I believe we're going back into the world of the 1970s because that's what makes the most sense. It literally sounds ludicrous and it is. Uh because of the dual mandate, the Fed must weigh concerns about both inflation and the labor market. Contrary to expectations, Trump's tariff policies have not yet produced a surge in inflation. No, it has not. It's still 2.7% while core inflation is at 3.1. Just remember those numbers. It's not going to make a big difference if inflation goes up to 3.6 six and or headline goes up to 3.1 core goes up to 3.6 six, which has not happened. But you still have people I wonder if Marco's ever going to be positive. I'm just curious. Uh if this was happening any other country, the stock market would be down significantly. Turkey. Yes. Comparing the US to Turkey makes sense. And it doesn't just stop there. I gave this guy a shout out on a uh on a a report he wrote on on the Mag 7 last week, but going fullans. And I think the most important thing in here, 30s are off a quarter of a point. Bonds are telling you a story here. It's increasingly obvious that the economy is falling down the stairs. That is not It's just I I'm I'm in shock at what everyone does on this stuff to analyze markets. Uh 30-year JGBs. This will again at some point this year. I I'm sure this is the reason why people want to just short bonds. Uh the 30-year bond market in JGB. So, here's the fact. Waller is still the favorite to be the next Fed chair. He sees a quarter point cut in September, then more. I'm back on team team transitory. If this is your next Fed chair, I think you should be caring more to what he's saying and not in the drama that is in there. And the reason is because he's focused on things that are actually happening.

There is now clear evidence AI is wrecking young Americans job prospects. So, this was a Wall Street Journal article. It it used a lot of the data from this canaries in the coal mine. Bring it up in chat GPT. It's 57 pages long. You can get the details of it. Eric Brolson is one of the architects. This is from the Stamford digital I don't know digital economy group. Um so it was released in August digital economy lab. Uh it it goes through using real time data from ADP going from 2022 to 2025. So it's broad and it's really trying to cover these things. But in the end, the only thing you really need to see is this. So this is from the ADP. This is a couple charts. They included employee headcount among software developers by age. The people being hurt the most, the 22 to 30 year olds coming out of school or on the younger side. Same chart now customer service representatives. There's just no way to refute that. We have a problem in the country where right now generative AI which has reached a an IQ level of 148 through GPT5 is able to replace people with no experience coming in because the only thing they have is their memorization skills from school. So it's getting harder and harder for people that are not at the higher end to be able to come in. Um, this is a story on a CEO who laid off nearly 80% of his staff because they refused to opt to adopt AI fast enough. Remember that MIT report? This will this is what this is in reference to. Uh, basically again incumbents having trouble getting people to use AI but not needing the people either as as time goes on. We did get one piece of labor data which continues to weaken. This is the uh jobs plentiful versus jobs hard to get. So the white line here, jobs are getting harder to get and here's the unemployment rate over time. So again, highlighted this before and this matches up uh at least the trend does that if it wasn't for the labor participation rate, we'd be up higher than this probably around 4.9 based on the stuff that Parker Ross did and we wouldn't be having this discussion. So to sit there and say the Fed is making a policy mistake, they're focusing on the weakness in the labor market, which is going to be a a fact going forward because of the AI pressures. Uh I wrote this in my paper last week in terms of the fact that they're never going to announce the new inflation target is 3% or 3 and a.5%, but the reality is people are starting to realize that that's probably happening. Wages. Again, uh Atlanta Fed median wage went to the lowest level during this period. So, we don't have a robust jobs market. We have a weak jobs market. We also have low inflation. And again, until we get a change in oil prices, which I think will happen uh as the PMIs rise, here is unled gas basically year-over-year. And here is the CPI year-over-year. CPI is down at 2.7%. It's where it was during the 2016 to 2020 period. So again, I people that want to fight on inflation, that's all well and good, but you need something to change. Here's another way to look at it. Tenure rates up at 423. Inflation at 270. So the white line is above the orange line to get this sustainable time period. We've been above. All right, we did it briefly in in here, but this was more about the collapse in oil prices. But aside from that, you got to go back a long ways. Like we have tenure rates already significantly above inflation. So unless you believe inflation is going to shoot higher like it did here, doesn't look to me like bonds are off at all. So if they're cutting rates, uh I would be wary about being short bonds as your favorite trade. Unlike last year where the yield curve was inverted in September. They don't talk about that much when they say policy mistake, but the curve was inverted at about minus 10 to 15 basis points on twos tens. We're now up above 50 basis points. You're not in the same place. So if they cut 25, if you go back over history and look at what typically happens when they cut rates, is there a chance that tenure rates could go higher? Sure, but the curve is not at the same spot it was last year when it was inverted.

The Fed is starting to worry about the housing market now. This is the other part. This was in the Fed minutes. So when you start going through and saying, "Okay, it's it's just inflation." It's not just inflation. The labor market is weak. And anyone that wants to fight that is missing a broader picture. There's absolutely no way to refute the fact that the that the labor market, which has seen no negative jobs over the last three months, except for health care. One part of the economy is creating jobs. Uh at this point, the the market's weak. It's not a firing thing. It's a hiring problem because of AI. Uh the Fed is starting to worry about the housing market now. A shift is evident in the Fed's internal discussions. For the first time, several policy makers flag concerns over the housing market, highlighting a weakening in housing demand. I've highlighted we have three months in a row of negative prices on housing. These developments are now being viewed as material to the broader economic outlook. This is obviously about rates.

All right, here's the here's the new AI bubble one. I got this this week. The real deepseek moment just arrived. got this from multiple people. Uh I I really don't even know what to say to these things anymore. You guys need to watch more videos. You need to watch more of what I'm about to show you now. This one is a must for anyone who believes there's an AI bubble just because this is an MIT report. Most of the people on this, three of the four on this, they're MIT grads. most of them are still involved with the school and they're coming out and saying this is I mean they don't want to speak out against the school but they're out there saying the faculty is do is thinking completely differently than the students on on this. So I'm going to go through this but I want to make sure you guys realize there will be efficiency gain. So when you see these deepseek moments and you hear it the demand for compute is insatiable. We are not even at the stage of the acceleration. So it doesn't matter how fast the efficiency gains come, the demand side will continue to grow faster than the supply side. I can't use it as much as I used to on the deep research. It slows it down. They are finding ways in chat GPT in Gemini and everything to slow down the compute usage because there isn't enough and the demand is insatiable. So in this thing what I really they spent probably about a third of the video on how important GPT5 is. If you go into X or into all publications they will say GPT5 was a disaster. The presentation was a disaster. There's no progress. Then you go listen to these guys who actually know everything and you just go listen to what they're saying. They have no bias towards this stuff. They're talking about it as users and what it can do and the importance of it. So, I'm not going to go through all of these, but I highly recommend whether it's on the robotic side, whether it's on using this to predict the future, possible applications, forecasting the S&P 500, predicting the future may converge with inventing it. That's how fast and how good this stuff has gotten. So, the next important thing, and I'm going to go through some of this, the early trickle of breakthrough is expected to become a title wave book discoveries. They said that the IQ now is 148. This is the level where you start getting into some of the benefits that come from recursive self-improvement which I talked about. Better optimizers train better models. It's an acceleration loop. So when you reach this point, you actually start to accelerate on the breakthroughs. Things start coming faster. AI agents happen faster. Open AI CFO revealed GPT5 rollout drove eight times growth in reasoning usage. So again when deepseek was released in January you got a massive growth in reasoning. This is one of the reasons why the token consumption exploded. Well this has 700 million users. Deepseek had none. So to get deepseek this was mainly for let's say non consumers sitting at home this was for coders this is for people who really understand technology pretty much now everyone they have however 700 million users uh for chat GPT it is the biggest one by releasing GPT5 eight times growth in reasoning usage demand is insatiable creating a positive feedback loop more users more productivity more economic output absolutely not a bubble instead said the biggest shift in human history. If you're saying AI is a bubble, you're missing the point. And again, Sam Alman said it last week and he's right. There is a bubble in tons of startups which will be zero investments. A lot of companies, public companies on the software side that have gone up to insane multiples. Yes, that's absolutely a bubble. But the power of AI, the profit margin benefit, the ability for the economy to grow, the amount of power needed, and how long this is going to take to get there. This is the very very early innings before robo taxis, before humanoids, before flying cars, before everything that you've ever dreamed about as you read about this is coming. So GPT brought reasoning capability democratization at scale. So democratization happened with DeepSeek back in January, but now at scale because you've got all these this is their choice model and they don't have to go in and select reasoning. It will do it for them based on the question that they asked. GPT5 is portrayed as a credible leap forward with higher intelligence of 148 consumer level deployment within a year predictive and scientific discovery capabilities and massive economic scaling effects. It is less about hype and more about establishing the infrastructure benchmarks and feedback loops for exponential self-improvement. Now the part that they did say which I'm not going to go through here, startups are structurally advantaged over incumbents. So it's they did talk about the fact that startups have a huge advantage in accelerating and using it while the public companies have major friction for being able to use it. So that's why the study found 95% of large company AI pilots deliver no financial benefit. No is just ridiculous. That's covered later by me too. Um this isn't because AI doesn't work. Because legacy systems, cultures, and bureaucracy block impact, public companies bound by quarterly reporting and entrance are structurally unable to adapt quickly. Public incumbents are wasting years and billions while AI native startups leapfrog them. That's the major story you have. And remember, I did a video this month about the 2030s being a graveyard for Fortune 500 companies. This is the reason why and this is what these guys cover and that's what the MIT report shows. Incumbents are designed to fail at AI adoption while startups are designed to succeed. All companies will be disrupted by AI. All established companies will be disrupted. Doesn't matter whether it's law, healthcare, finance, retail, take your pick. They will all be disrupted including commodity companies, everything down the road because there will be breakthroughs in solutions for scarcity.

Elon Musk was back. He continues to hype on this. Uh all will be wiped away by the super sonic to tsunami that is AI. Remember as you're looking at your investments in the fiat system, bonds have produced nothing for a long time. MSI World X the US has produced nothing over the last 18 years. All assets have been having trouble except for gold, Bitcoin, and the Mag 7. If the Mag 7 is now going to run into competition as they spend their way into AI competition, eventually even the S&P 500 and stocks around the world will start to be debased as well. Another podcast if you want to listen to this one goes through it. um little you know I'm just going to read this one claim that 95% of AI pilots have zero return is unrealistic and overly sensational couldn't agree more bold statements like zero return demand very strong evidence which the study lacked hosts argue this is more about people wanting data to validate pre-existing beliefs about real evidence remember when eggs gave you high cholesterol scientific breakthrough this is from again the moonshots and I just want to bring this up as an example of how you can listen to these podcasts and now go into chatt and because it has reasoning models you can basically immediately come up with ideas on investing in at least get into the theme if you haven't seen this the researchers talked about on there GPT4B to tackle a key problem in cellular reprogramming turning mature cells back into stem cells that's why everyone needs to focus on health and uh right now because we are getting to the point where we're going to be able to reverse the biological clock through epigenetic reprogramming. So their GPT4B they talk about this you want to go read it they directly tied this to deis haba's vision using a not for apps but to solve science uh we're going to have bulk discoveries of medicine hundreds of protein therapies uh chronic disease optional aging reversible this is civil relational shift so when people talk about whether CPI is going to be 3.5 or 3.1 just read this What's more important? It is moronic to talk about inflation at 3.5 or 3 or 3.1%. It just has nothing to do with three years from now when we're talking about where we are in this kind of stuff. But if you want to focus on the on the investing side, the longevity industry, one speculative is being transformed into a near-term investable theme by AI breakthroughs like chat GPTB. Now what I did capital will flow into this AO biotech hybrids companies at the intersection found. So this was a line that they had in there. So I wanted to find out okay let me paste it in there and find out the companies that would benefit private company private company private company private company. These are the companies it listed as the best ones to focus on relative to what GPT4B means. Okay. how biotech hybrids went in there. So next question, will this help or disrupt the existing public pharma companies threats to incumbents? So you can go through how it will help. Now I go through and get me specifics on which ones. In summary, AI biotech hybrids are a double-edged sword for public pharma. They help in the short term pipeline expansion faster R&D, but in the medium to long run, they disrupt the moat by democratizing discovery and attacking chronic disease revenue streams. This supports your broader thesis. Within 5 years, all established public companies, including pharma, will be disrupted by AI and Pharma may be one of the earliest, clearest cases.

Tesla, uh, again, I released that report 22V. If you guys are Tesla fans, uh it's a long form report on why the robo taxi right now is the most important thing going on for the gateway for humanoids. The faster that there's acceleration from Tesla on this. Since they've made the bet, which again is here, they've moved away from motion camera suits and VR headsets to collect data. They will primarily focus on recording videos of workers performing tasks to teach the robot through videos. This is meant to scale data collection more quickly in his belief that AI can learn complex tasks through cameras, the same playbook behind Tesla's self-driving tech. It comes soon after optimist director stepped down with AI chief now leading the program. So again, important to pay attention.

Bitcoin down for the month. It's crashing. Everyone's worried. We're down to 108 and change as we do this. Who knows, by Monday it could be 101. Uh this is after four months in a row, just to give you some kind of idea. Uh the last time it went up five times in a row was back in 2020 in 2021. So it really has a hard time extending for long periods. It gets a big run. We get lots of the uh old holders that have been in there for a long time that are billionaires selling out of some of them. Uh it also tends to have trouble uh as it did in here when China stock market's doing well. Uh there's a lot of Chinese family offices that are in Bitcoin and when the stock market by the government is basically free money to go higher and it's going higher at a faster pace than Bitcoin. We did see a lot of family offices that were rotating out back then. I think that may have been some of this in a in a quiet uh August, but the reality is Bitcoin continues to be fine. Uh Goldman Sachs released a report on stable coins. This is my big theme behind the digital economy acceleration. The merging of AI agents and stable coin being adopted as the transaction choice uh around the globe could reach trillions of dollars. If you want to go read the report or go through it, top of mind, stable coin summer, it's on the web. Uh, genius was just a prologue. Stable coins represent a platform shift in payments. The stage is set more and more stuff as everyone is accepting it. And then finally this week, the Department of Commerce is going to start issuing its statistics on blockchain because you're the crypto president and we are going to put out GDP on the blockchain so people can use blockchain for data distribution.

All right, that's it for the summertime. Uh that's it for me in Maine recording. Next week I'll be back in uh in New York in Brooklyn. Uh for those of you attending the event, uh I will be speaking at uh Palms event in September. I'll also be with John Ro out in Vegas at the Robin Hood event and I'm doing a lot of other things in uh in New York. I look forward to getting to see everyone. Uh, hit that subscribe button and I will see you guys uh after Labor Day.