Title:   Lawrence McDonald: How To Listen When Markets Speak
Show:    On The Tape with Danny Moses (RiskReversal Media)
Guest:   Larry McDonald (Bear Traps Report; author, "How to Listen When Markets Speak" / "A Colossal Failure of Common Sense")
Date:    2026-JUN-04
URL:     https://www.youtube.com/watch?v=mEnwznPeyA4
Length:  ~40 min
Note:    Auto-transcript, timestamps mm:ss. Saved for personal study.

================================================================

(00:01) In this episode of On the Tape, I welcome back my friend Larry McDonald. Larry was on the tape about a year ago, and I thought it'd be good timing to get an update from him and his thoughts on the markets. Just to refresh your memory or introduce Larry to you if you aren't familiar with him, Larry was a distressed credit trader at Lehman Brothers during the GFC and wrote a book about it titled A Colossal Failure of Common Sense.
(00:23) Soon after, Larry started the Bear Traps Report and still going strong today. Not satisfied with one New York Times bestseller, Larry wrote a book in 2024 entitled How to Listen When Markets Speak and the Risks, Myths, and Investment Opportunities He Sees Today. We're going to get into those risks, Myths, and Opportunities.
(00:40) And be sure to stick around for my couchy picks of the week and enjoy my conversation with Larry. Larry, welcome back to On the Tape. >> Danny Mes, thank you, my friend. Good to see you. So last year we had you on almost exactly a year ago and a lot of your predictions actually have come have come to fruition and I want to just go over some of these because we're going to get to them and talk about present day and what you're going to see ahead here.
(01:04) Um at that time we had just come kind of out of the tariffs a little bit. We needed to raise the debt ceiling which we ended up doing. You talked about Bessant pulling out his bag of tricks which he has which we'll get to which includes stable coins. We talked about regulatory relief coming for the banks in the form of SLR, right? We talked about um kind of energy potential rotation into those stocks.
(01:26) And one of the things you hammered on was if you really believe in this AI trade and the tech trade, then you have to believe in nuclear and all the infrastructure stuff around it, namely the NUKZ, which is up nicely. And by the way, some of those energy stocks, Weatherford and Apache or APA, whatever it's known now, are have more than doubled.
(01:43) So, we're going to get to that. And I also want to get to what is still lingering here, which is obviously the strength still in the semiconductor space. It shocks me, I think, as much as it does you in terms of the secular trade still not yet becoming cyclical. So I threw a lot in there and as well as the stuff going on in the Middle East, you were already talking last year before the Iranian war that how oil might start to go even higher as a result of what's going on.
(02:06) So, you know, I don't want to stroke you too much here until you were right about everything here. Uh, but you were definitely on the mark here. So, let's get into it right now. Um, and I also want to talk about the Fed a little bit here, Larry, going forward as we sit here.
(02:21) Obviously, we just transitioned to Worsh as well. So, let's start with kind of right now the state of the economy I think is good. And let's and we'll dovtail from there. >> Well, thank you Danny. And, you know, remember there's no I in team, right? There's no there's never an I in team. I know that's a old uh phrase, but what I try to do is our two books have now been published in 12 languages, about a million copies sold.
(02:50) And what I quickly learned over the years is make more money on the speaking tour, about 10 times more than you do writing the book. But what the best part of the speaking tour are the mentors that you meet. And so what we do is we go on the speaking tour, say you get a speaking fee, we give that back to the clients in ideas dinners.
(03:08) And so we're constantly doing ideas dinners. Last year, Geneva, Zurich, London, LA, San Francisco, but then behind me, we run a Bloomberg chat every day with some of the best hedge fund manager, you know, PMs, CIOS, head hedge fund managers in the world. And so if you do the dinners and if you really work it in the chat and really kind of triangulate, you can see the birth of new thinking narratives and you can kind of like figure out, okay, how bought in is this trade? And that helps me kind of really get out in front of some of the new
(03:45) trends. And that's what we were trying to do last year like like you said with AI infrastructure, aluminum, Alcoa, you know, EC cols last year have really started to flourish, but they're still just a fraction. Uh so here's an amazing step. The NASDAQ 100 has 41 trillion in it today.
(04:10) Um in March it had 30 30 trillion. So there's just a lot of capital that's still in tech, even though there's been a rotation into hard assets, but there's just a ton of money in tech, which really sets up for a spectacular rotation. >> Well, Larry, how much has the economy, which is what I want to talk about here, has kind of forced this.
(04:30) When I say that is things that are um obviously not impacted by higher oil right now, that would be tech right now because the secular trade is so strong. things that aren't impacted by the bottom half of the K-shaped economy. That's the spill. These are all issues which will come later. I know. And unemployment if it were to start rising obviously has a long-term impact on the demand equation for AI, you know, and and data.
(04:54) So, talk about that a little bit because this is the perfect kind of perfect storm or perfect setup, however you look at it, of where passive flows, which I know you've talked about, I want to get into that as well, have such an impact on things and and it's just being ignored. I think underlying fundamentals, >> we already had a K-shaped economy over the last year or two, but think about 8 trillion in money market funds up from maybe three and a half um maybe four in 202021.
(05:19) So imagine that an extra 4 trillion with an extra 300 basis points of income. So that's a lot of wealthy people spending money. That's why the top 10% of consumers are maybe 60 70% of consumption. But we had that for a while because we had this move in money market funds. Wealthy people have their money in money market funds.
(05:41) They used to pay 1% now they're paying four fourish four and a quarter. And so that's created the K-shaped economy. Then we took two trillion of capex into artificial intelligence over the last couple years. And so what's happening in the in the market is the manufacturing say construction side of the market is is an an incredible economy.
(06:06) It's like a I call it like an 8% 10% nominal GDP grower over that side. But then if you look at McDonald's, look at Darden restaurants, look at Home Depot, look at Nike, the divergence on the consumer side, the restaurants, the retailers are all in flames. Uh we did a little look this morning where conversation the suppliers to Home Depot are all down 10 20 40%.
(06:34) And so so this is like a rubber band stretching. It's a lot like just before CO just before CO the market went up every single day Danny in February of 2020 even though off the shore coming on shore was this really nasty storm and everyone was hiding out everyone was hiding out in tech and it's the same thing today it's perceived as the safe trade because there's a lot of pain in Home Depot 30% off mic McDonald's and go on and on and on the retailers.
(07:09) Uh so there's a lot of pain and so money is moving out of that those areas and it's crowding into tech and then on top of that because of the SpaceX anthropic and open AI IPOs coming there is some people that are just they're selling down their exposure to other parts of the market to make room. Just look at today Denny look at today.
(07:27) So, we have these three big IPOs, right, which is about potentially $300 billion of of new stock coming on market. And guess what? Google front ran these guys today, you know, by putting in the 80 billion, right? So that's 80 billion of of cap they that they they need that for kind of like their AI capex and then the three IPOs like the divergences between say healthc care and and the market or healthcare and tech are way way getting stretched and so that's where we're starting to to really find some interesting value. Let
(08:06) me make a point on that Google because I saw that this morning and of course I'm I always like to try to find negative potentially in something especially in a market like this versus the positive. But my takeaway was actually pulling back from what it meant for Google stock which is actually not down uh that much um or wasn't down this morning that much that it's actually another positive indicator meaning they see the opportunity.
(08:30) They're not stupid Google, right? They've done only done a few cap raises in their, you know, entire livelihood. Um, so it actually adds a little more momentum in my opinion into the ecosystem that you just described that continues to get this economy going. That's its own little world. So I hear what you're saying and there's no question from a supply and demand perspective, how much can these investors continuously absorb.
(08:50) And you and I both know when you change rules, little technicalities like the like S&P and NASDAQ letting these things list and be part of kind of the passive flows, that's never good. it may be good shortterm so they can list them and get them but there's a reason that profitability metrics need to be done and so so that never ends well.
(09:11) So I'm in full agreement but I would push back not push back on you necessarily but I would say that I think that's if I'm a bull I'm like great Google knows what they're doing they're the smartest in the world. So just answer that for me if you could. Here >> in the discussion behind me, um the S&P is already 45 47% tech and now you're you're really um force-feeding retail investors.
(09:37) This is this is a disaster Danny because right now SpaceX at the two billion uh two sorry two trillion valuation would be almost 6% above 6% of US GDP and if you look at all the great IPOs of all time the Facebooks of the world the Microsofts the Nvidia they're just a fraction you know less than a half a quarter% of GDP and so u you you've just got too much of the market that's going be either tech or u you know traditional tech or AI and it's probably at the end of the day going to be 50% and whenever we've seen this in our career Danny you
(10:17) remember I wrote the book about Lehman Brothers and at one point the financials were up near I think 25% of the S&P market cap you know in that 2005 whenever you see a a sector that gets that big >> it's really hard and then four returns on the S&P key because like you said, they're going to force feed these passive investors, these indexers.
(10:40) So, the S&P and NASDAQ are going to be forced to take on um these IPOs which are already up four or 500% over the last two two years. year groups really so crazy valuations force feeding into the indexes and I think it sets up where we're too you know it's really what we talked about in the book you know the dark our book of when markets speak it's the dark side of passive investing and and at the end of the day that's what that's the bad the worst setup >> I think what we're both describing also is the wealth effect right now that the
(11:14) market's having on the high end of the economy people that are participating and that can just as powerful on the way up as it is on the way down. And I think that people say, "Oh, what's going to cause the sell off?" Well, the market going down actually might cause the sell, meaning it might exacerbate it on the way down because of everything that we just talked about that the market is overowned potentially and the impact that it's had, I think, on consumer spending in general.
(11:38) >> Yeah. So, think about the NASDAQ 100, 40, 41 trillion today, 30 trillion, like I said, in in March of this year, but $12 trillion valuation in 2022. And oh, by the way, the last time we had an inflation spike, uh, the NASDAQ 100 went from about a $20 trillion value to down to 12 in like less than a year.
(12:03) So, the last time we had an inflation spike, and we can get into why that happens, uh, it causes a big rotation out of tech. And now I look at Danny. I look at the summer driving season with a World Cup that's going to be in three countries. I mean, this is just I did a little Grock I was playing a game with Grock on the weekend.
(12:23) I said, how many miles driven potentially will this World Cup and and not only that, flights. You're talking about billions of miles because there's a hundred different games in all those different cities. And so, and this is on top of a a a a straits of Horus shut for 90 days, right? 90 days. And all of the supply chain problems that come out of that and this is on top of, like I said, the shoulder season with energy and with you, we've got the the the Trump administration just dumped the SPR.
(12:54) So, it's really like a false sense of security. We really dumped the SPR to hold down oil prices, but now we have this summer driving season and all this demand for energy that's coming out of AI. And so the probability that we have a real inflation bounce that's going to drive money out of tech into hard assets is I think almost like a I think 90 to 100% certainty over the next two months.
(13:19) >> You had that call last year to start buying hard assets. And now as we sit here today, I don't think either of us envisioned this war andor getting to this point andor oil being where it is now. It's one thing to like the stocks and the sector. It's another to try to predict that.
(13:34) Last year we were here and they needed to raise the debt ceiling, right? Because they were messing around with the TGA and all that stuff. Then they're going to re refill and all that. So now we've raised the debt ceiling to just over 41 trillion. We're going to get there probably in a year, a year and a half from now. We're sitting approaching 40 trillion. I think 39.
(13:49) 4 trillion or something like that. It goes up every second I look. It doesn't matter. So right now, no one's looking at that fiscal constraint. It still doesn't quote matter what the federal debt is at this point. But I do fear the day where it might matter. Talk about what's going on. And if we can incorporate what you've talked about before, which is in order to get a handle on this, you need inflation.
(14:11) You need rates to be below where inflation is, right? I believe is is is the catalyst. So what does Worsh do now coming in? because any if he tries to even cut rates I think we'll sniff right through it. So he's kind of boxed in. Talk about that and what that playbook might look like. >> Okay.
(14:28) So the last time we had an inflation spike um 2021 22 23 24 into that period interest on the debt was only 300 billion. Now we're at 1.1 trillion. So which is bigger than defense and bigger than uh you know all kinds of you know Medicare, Medicaid. So, at the end of the day, it the market response is going to be, okay, if inflation spikes, they're going to have to hike.
(15:01) But the problem is that rates are so high and inflation so high and we're into our we're into our fourth year of inflation, right? So, it's inflation's cumulative. Just look at like the cost of a Big Mac or the cost of fries is up, you know, several hundred% over the last several couple years. And so it's not what you see in CPI, it's it's the it's what's happening with the families.
(15:26) And so what's going to happen is um it's going to we have the inflation spike. It's going to look like the Fed should hike. They really can't. The consumer is already wounded and the inflation spike just going to cause even more pain. So that we go into a real stagflation where um inflation sticky high and unemployment really starts to to grow higher.
(15:48) You can see that coming in. That's why Home Depot is down 30%. That's why McDonald, look at the chart of McDonald's versus the S&P. So you've got this consumer pain and that that K-shaped economy like I talked before was already out there. Now we're going to throw another kind of level of pain on top of it.
(16:06) the Fed can't hike and that gives you a huge uh rotation into all kinds of hard assets, oil and gas companies, companies that control assets. >> Yeah, for sure. I think you're going to see that rotation. So, that's the other thing is that we're not all doom and gloom. There's always stuff to own. We're looking for more of and you're looking for more of a rotation out into underowned assets that might benefit from this current macro environment, even if that macro environment is stagflation, which is never really a good thing. But I'm going to go back to
(16:35) Worsh for a second and we also talked last year about ending QT which did happen you know on I think December 1st of 2025 what they can play around with the balance sheet but again is it signaling or is it actually doing something and how trapped right now might Bessant be in terms of the options that they actually have here going forward it >> okay so what I've been doing is I'm talking at the ideas dinners in London and New York in the last three weeks when I hear Danny when I hear when I hear two to three PMs that I've known a
(17:07) long time that I really respect that I really respect and you know what they've told me and when when they don't know each other and I hear something like this it really kind of gets the hair in the back of my neck to stand up. Guess what they said? Bent's plan going into Iran before I ran was and I should say Bent Walsh and Ducken Miller they're all part of the same team.
(17:35) Uh but Bet and Worsh they're close they're both close with Trump and directly Miller what the plan was was that force the banks to buy more treasuries look at JP Morgan's reserves of the Fed they've gone from 460 billion down to like 65s 80 billion so to keep this simple for the audience it's like they're doing QE with the banks and that's what That's this all happened in the first quarter.
(18:04) This is what got gold and silver going so crazy because essentially they were doing QE and so to force the banks to own more treasuries and that supposedly was going to justify and here's the war plan. It's going to justify the Fed can reduce the balance sheet a little bit to defend his legacy because he's been saying this for like 10 years and all the white papers that we have to reduce but also cut rates at the same time.
(18:31) So he was going to look cautious on the reduction of the Fed balance sheet even though the banks are potentially going to own an extra trillion more of treasuries. That's why they've been able to keep rates down because they're force-feeding the banks to buy more treasuries. But now since Iran we're back to okay forcing the banks to buy more treasuries, he he he's going to try to reduce the balance.
(18:56) He's really can't really he can't because now he's going to be in an easing bias. I mean, I'm sorry, a tight I guess he I'm sorry. He's going to be in a tightening bias because of inflation. So maybe he tries to play around, but but in terms of getting rate cuts, which that's what was really helping gold and silver.
(19:12) So in before Ran, they were going to justify the rate cuts by him reducing the balance sheet. And now it's going to be no rate cuts and maybe reducing the balance sheet to to show uh to show resilience or to show some type of hawkishness relative to inflation. But at the end of the day, they're really doing QE because the banks are buying uh about a trillion dollars of of treasuries from last year to this year, maybe next year.
(19:38) >> You've had a nice call on gold and gold miners in terms of timing. Um taking some off the table, re-entering. Gold's obviously been a little bit turbulent here as people have seen it potentially as a source as a source of liquidity in some of these sovereigns that you know need need the money so to speak.
(19:55) Feels like we've kind of gotten through that. We've kind of muddled through that here a little bit. And even with the dollar rising, I know it's down today, but you know, and inflation rising, gold feels like it's found its footing again. And when you talk about hard assets, whether that's miners maybe specifically, you know, in terms of companies like that, what are your thoughts right now on the on the sector and and on the commodity itself? >> You know, with Thank you, Danny.
(20:18) When there's certain trades, there's times when you can see the laces on the ball and there's other times where it's really foggy. Right now, it's very clear clear to me what's happening with gold. Um, you know, picture the tourists, the heavy set guy with the Hawaiian shirt and the camera getting off the bus, right? All the tourists came in because they were they thought the Fed was going to be dubbish.
(20:43) There's a whole bunch of reasons. Money was moving into hard assets. We have this whole inflation regime. Got central banks around the world buying gold. So, there was a lot of reasons like from September of last year to January, February to buy gold and silver. And all of a sudden you had this shock in Iran.
(21:06) Like you said, you had these emerging market countries that need liquidity. And gold is the, you know, 24 25 trillion liquidity pool that's instantaneous. I mean, you can it's the most liquid pool of wealth in the world. Uh a billion times more liquid than than Bitcoin. And so all the tourists got flushed out of the gold trade, a lot of them, because all of a sudden it looks like the Fed might have to hype rates.
(21:31) We've got inflation coming in. Uh we have the war in Iran with with um all kinds of liquidity problems. And Turkey had to dump a lot of gold. Uh a number of emerging market countries had to dump some treasuries because of the shock from Iran. People people forget how this affects countries that don't have their own oil and gas resources.
(21:53) With the United States, we're very lucky. Other countries are are just in incredible stress when go when oil goes up that much. Now, here we are with the inflation bounce. We're starting to buy Agico Eagle and the gold miners. I want to buy the gold miners first um because they're down a lot. AO's down 30% off the highs.
(22:14) And I'll tell you the bullcase. The bottom line is it comes down to the inflation shock that's coming at us. The summer driving season, the World Cup that creates a hawkish bias potentially at the Fed that scares money out of gold and silver. Always remember, gold is extremely sensitive to one-year treasuries because essentially one-year treasuries are up 60 basis points the last maybe four or five months.
(22:42) And so if you can get 4% on a one-year Treasury uh versus say 3% maybe nine months ago in the ballpark, that's like that sucks money out of gold because that's that's a real that's on a million bucks. That's $40,000 versus 30,000, right? So it will pull some money out of gold, which it has.
(23:01) Um but then it gets back to what I was saying before. Interest on the debts 1.1 trillion. anything they do, financial conditions are going to really tighten uh if if inflation bounces and that's going to cause recession risk. So that's where the first stage is the oil puke that's driven from all the tourists getting off the bus where like you said we're above through that.
(23:22) The second part of the trade is the 2022 to 2024 muscle memory. The gold miners got hammered there because the perception was once again the Fed was going to hike. And so there's all that muscle memory in the market where okay, inflation spiking, Fed might has to might have to go hawkish. All of a sudden, one-year treasuries go from three to four.
(23:43) That same thing happened in 22, 2022, 23, and gold miners went down 30%, gold was down 22%. Here it's basically played out. But now I want to use this opportunity to buy the gold miners. If you look at the gold miners at Nico Eagle, David Einhorn in our book gave us gave me some really great advice. If you can buy companies with six billion to 7 billion of free cash flow, free cash flow.
(24:14) And the stock's down 30%. And they're buying stock. I mean, they're doing a $2 billion buyback. And they've got the best management team in all of gold, the gold mining industry. That's the riskreward on something like that coming into this is spectacular. So spectacular. So the bottom line the bottom line again is gold's risk down to say 4,200 4,100 and I think the buy zone say 4,100 to where we are now and this whole thing plays out and then we're 6,500 to maybe 7,000 next year or the year after. And to stick with
(24:53) passive themes and I know you know this new mining nam is the only gold miner in the S&P 500. So it never gets the benefit the sector at all from passive flows. I want to move from um gold to uranium and I I I think you like uranium still here at this point. I know you've been you pushed this NUKZ ETF uh which is all things nuclear uh last year was around 50.
(25:17) I think it's north of 70 as we sit here today. talk about that trade and it's hard to see that slowing down even I mean obviously if if AI gets hit it'll just get hit but the this is such I mean what these companies in the NUKZ and I'll let you explain have to do relative to what the overall demand is going to be demand could get cut by 80% of what you think is in these things are probably a buy but talk about that a little bit if you would >> yeah so so just to address the precious metals and nuclear together in the same
(25:46) basket so think of precious metals in in say 1980 when you were in that higher interest rate regime global conflicts from 1968 to 81 that's where hard assets things like uranium but precious metals especially did really well where household wealth was upwards of 3 to 4% of precious metals and and all kinds of of of metals right platinum platium 3 to 4% right now we're still less than less than less than a percent maybe 75 basis points and to your point around pneumont it's the only gold miner in the S&P so there's a very good chance
(26:26) like five years from now through seems probably two two to three years from now you could have several hard asset type companies like the newmonts in the S&P on on uranium we hosted a call last week with one of the largest family offices in the space and I and I like the family offices in the uranium sector because they're fully they're investing They're knowledge based.
(26:50) They've got, you know, boots on the ground. And this 2028 deficit is so daunting. And what's happened with all of the different uh contract buyers, so the utilities, they've been very cocky over the years because in the uranium sector, you're coming out of a 10-year bare bare market. And so the contract buyers have been selling the upside for a long time and not buying not buying.
(27:17) But if you look at the kind of the behind the scenes within the sector and you talk to all the best professionals that we can, we do that in the chat, we do that on calls, it's very clear that the contract buyers are starting to lock in longer term contracts. So we've been buying the uh SRUF I'd rather own the commodity here than some of the uh uranium miners because the the spread's gone a little crazy.
(27:42) But we're talking about with this whole AI buildout and um obviously countries around the world, Japan, maybe even Germany coming back online, um obviously an explosion of nuclear power uh construction sites in in India and China and and now the United States has to ramp up. So yeah, so we're going to have a massive supply problem in 20uh 2728 and the market's going to get way out in front of that because the Iranian market it's it's it doesn't have a futures market.
(28:18) There is no spot price the way there is with other commodities. And so this is going to be this is where you the market has to fix the supply and demand. You've got the brain drain. Think of like the best project in the world, this this nextgen project, which is a major project in Canada, and it's like every single time these companies give projections on production, they're way off because of all kinds of environmental and all kinds of problems with weather.
(28:46) Um, and then there's the brain drain of just not having the right talent in the right places. And so the probability that the uranium producers don't reach their promises and this nextgen site this mine's supposed to come online you know what you know they keep moving it back you know 20 28 29 30 and it's it's it's 100 meters below the surface is the is is is the property and so you're talking about an extremely expensive project.
(29:17) It's the it's the the the world's really supply demand balance depends on that that that project among among other ones. And so you could easily see a dynam dynamic where demand explodes but production because of all these the brain drain environmental rules and all kind of weather you're going to go on and on and on. You're just not going to have the production that we need.
(29:41) That's going to force a crazy crazy uranium price and eventually the price will fix will fix that supply and demand disconnect. >> I'm with you on that. All right. One more thing I want to get to. You just mentioned China coming out of this war. China's going to have more power now that it has it has a ton of minerals. It seems like it's a pretty sweet spot on a relative basis um as it relates to the global economy.
(30:05) talk about what you're recommending to your clients related to China and maybe you can just take a quick trip around the world maybe on some of the other, you know, emerging market exposures that you're that you're looking at here. Well, the the thing about China in Kimmy and all of the ripoff kind of AI facilities that they have, the amount of processing, the amount of the amount of AI um the this is where it gets complicated, but like the relative AI presence in China and what they're doing to us the US AI industry is pretty wacky and scary. Uh
(30:41) look at today, look at Baba's up a lot. Um, you look at all different types of companies in China, 10 cents up a lot today. And the Chinese the China AI like the value of the companies and the value of the technology on on balance sheets of companies is is a fraction of where we are in the United States, right? Look at how many Babas can you fit into Alibabas can you fit into to to Nvidia, right? Like a thousand.
(31:10) But but worse than that, this to me is almost like a Pearl Harbor Pearl Harbor situation where the these these engineers are taking code, they're dumping into the Kimmy facilities and they're running it through open source and all of the capex that we're spending on AI al some of it being ripped off and in open source is like feeding it into a pool of piranhas and that can get you really this whole malinvestment thesis that's out there about in any in any kind of boom there's malinvestment right there was malin investment in the shale
(31:48) boom in 2010 to 2014 there was mal investment in the internet boom especially on the on on the communication side with the global crossing a massive amount of malinvestment in in natural gas and communications in 2010 11 12 13 14 also 2000 and so the probability that this is like over overinvested or that our return on invested capital is going to be diluted by China uh and among other things is is really high.
(32:19) That's why this SpaceX IPO to have it be 6% coming I want you just think about this relative to China. the SpaceX IPO 6% of GDP uh at a $2 billion valuation when Facebook came public it was only a hundred billion right so it's 20 times the size u of and these are two hot two high two hot IPOs I mean the Facebook IPO was the hottest one um in the 2010 to 2020 period it was a hundred billion dollar valuation uh the SpaceX IPO is going to be uh two trillion and 6% of GDP.
(33:02) And so the AI thing and the space war and the anthropic and open AI, these companies are are just coming into the market at very expensive levels and they're being really picked off by China. >> Any other places like Brazil or anything that's catching your eye as far as resource driven economies? I realize there's a lot of you know you know elections coming up um you know in some of these places so it's hard to really game that but what are you looking at there as well kind of resourceoriented emerging markets >> well we we did this with Argentina so
(33:34) Argentina had a big draw down when it looked like the opposition party was going to score the midterm elections in a very very powerful way and in the end mele did a lot better than expectations but Argentina would you know really came down a lot now Bolsaro and you know Suns and what's everything with Lula it's October elections coming up so it's created this big draw down where Lula's actually picked up some some some probability of winning so the market's going to start has been pricing in Lula which is not
(34:12) you want a market friendly candidate and so Brazil I think if it continues to sell off you can buy uh valet, you know, at a very, you know, cheap price relative to the upside of iron ore and and metals. Same thing with with the energy infrastructure companies u in in Brazil. And so I don't see an opportunity yet like but we're like 70% into into what I think could be a nice sell-off.
(34:46) And most likely what I've noticed with elections is the media tends to overstate um we saw this with with u the United States with Hillary Clinton. They it they media tends to overstate the establishment candidates relatives of the populist all over the world. This is like you can point to 20 different examples and and so if that happens there'll be a big overstatement of Lula and Brazil equities would be a screaming buy on that just the way Argentinian elections were uh ahead of after that first round.
(35:19) It's hard to explain with an Argentina because they had a first round and a second round and it's it's similar with Brazil. You had a first round like the first week of October and then like three two or three weeks later there's a second round in between the first and second round. That's where there's potentially opportunity. >> Yeah, I'm not just saying this because this show is sponsored by Kouchy, but I will tell you that down in Colombia, this election that happened the other day took a lot of people by surprise.
(35:44) Uh the person who won was trading above 62 cents before the election, but everyone seemed shocked. And two weeks ago went from 30 cents basically, you know, just over 2 to1 probability to be the favorite. And so I would tell people to go on the cow sheet before I get to my picks of the week this week and start looking at those things and tag them on a watch list because sometimes those will move.
(36:05) And you're right, some and we've seen this is how all these event contract companies took off in the first place was because of the 2024 election. All right, Larry, people can find you on Bear Traps Report. They can get that and become a subscriber. How do they find you other than buying your two books in the bestselling section of Barnes & Noble? How do they how do they find you? >> How to listen on Market Speak. Yeah.
(36:25) Uh yes so so Twitter we're at convertbond and what we do is we really most of our clients are institutional investors in more than 21 countries and what we do is we kind of recap we recap that really that we want to give the retail investor a lens on a buy side conversation like what are the institutions doing what are the professionals doing and that's at infothebearetrapsupport.
(36:51) com >> well perfect Larry I look forward to I know you're already working on the next book. Um, I'd like to be, you know, a part of that somehow. You know, maybe we could chat and have a section we could dedicate. Pick pick pick a subject we can go there. Maybe government debt or something.
(37:04) But anyway, Larry, you're always generous with your time. Um, you're a great resource for all investors out there. Thanks so much for coming on. I hope to catch you this summer in New York City. >> Okay. Thank you, Danny. Let's do that. >> It's time for my Kowi picks of the week. Remember, when you are trading on Koshi, you are trading with other users, similar to buying or selling a stock.
(37:20) and you can jump in or out of your position at any time to lock in a profit or cut your losses. These are just my opinions, not telling you what to trade or offering any investment advice. On last week's episode, I reiterated gold price being above $4,533.99 on May 29th at 5:00 p.m. It came down to the wire, but gold closed above that price.
(37:42) I'll be looking for another gold contract in an upcoming episode. Yesterday, as I was prepping for the podcast, a headline crossed the tape that Enthropic had confidentially filed to go public. I had remembered seeing a Kowi contract for that. So, immediately went on to Koshi and found it. Contract was titled, "When will Enthropic officially announce an IPO?" Not confidentially, but after review by the SEC and the rules were the following.
(38:05) Enthropic confirms an IPO before October 1st, 2026, or whatever date you want to choose on the contract. Then the market resolves to yes. outcome verified by New York Times, ABC, Bloomberg, Wall Street Journal, FT, CNBC, Reuters, and Anthropic itself. An IPO is confirmed if one, the SEC declares the S1 effective, or two, the IPO is priced, or three, an exchange has assigned a ticker to it.
(38:28) So, as long as any of those events occur, the market will immediately resolve to yes, even if the company does not start trading until after that specified contract date. So, I am choosing October 1st, 2026. I'm assuming that the US government won't hold up the IPO even given their history with Enthropic.
(38:46) And if that's the case, it should be well before October 1st and they that the IPO becomes official. Normal time frames for this are somewhere around two months, but not many IPOs, especially of this size, get done in late summer or maybe even in August. So, I feel comfortable with October 1st, which is currently trading at 72 cents, almost a 40% return if it happens.
(39:06) Secondly, of course, with the NBA championship upon us and the Knicks being a part of it, I am taking the Knicks at 37 cents to win the championship over the Spurs. Wimby is amazing, but the Spurs are a younger team. And I think the Knicks stay hot and they win it. They're trading at 37 cents and I'm a buyer. That equates to roughly 170% return if they win.
(39:23) And remember, if the Knicks win one of the first two games on the road and sees homecourt advantage, I think you can double your money and take some profit at that point. Again, these picks are not financial advice, but if you want to learn more, download the Couch app. Read the rules and use the promo code Moses to get $10 when you trade $10.
(39:39) I'll be back next week with another episode of On the Tape and check out the What Are We Doing Contrarians at the Gate Substack I co-author with my fellow Big Short partners Vincent Dan and Porter Collins which includes our Friday night dirty podcast as well. Thanks for listening to the On the Tape podcast with Danny Moses.
(39:58) If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast and please leave a rating and review, positive only. You can also watch on the On the Tape channel on YouTube and give us a thumbs up there as well.