00:00Joining us now is Mike McGlone. He's a senior commodity strategist and a Bitcoin expert for
00:04Bloomberg Intelligence. And Heather Long, she's the chief economist at Navy Federal Credit Union.
00:09Mike, I want to start with you. Before we get to the what, let's talk about the why.
00:13What started all of this? How did this get rolling? What were the big factors?
00:18The key fact for Bitcoin is there's unlimited supply of cryptocurrencies. Bitcoin's one and
00:24there's millions of them. What happened last week is strategy. Michael Saylor, who said he would
00:29never sell, has started to sell a little bit. Some of us have just been waiting for this forever.
00:33I know Michael Saylor. I met him years ago and he just got too long. My asset, he probably shouldn't
00:38be buying low and selling high. He just bought higher. But the key theme is you were talking
00:42about that game earlier. There's a game on all the time in cryptos and they're trading right now.
00:47The key thing to remember about cryptos is everything's getting tokenized and the most
00:51significant tokens are the U.S. dollar. And the number one token that tracks U.S. dollar is Tether.
00:56And right now, Tether is on track to potentially flipping Ethereum. Ethereum's number two. By
01:02flipping, that's a good nomenclature in cryptos when you surpass assets under management of
01:08another cryptocurrency. And it's a key trend is these tokens or Tether has been flipping
01:12and everything. As we wake up Monday morning, it might be the number two cryptocurrency after
01:17Bitcoin. But the bottom line is there's unlimited supply. There's starting to be a purge. It looks
01:22like the purge just got started. And the key thing to remember is Bitcoin's a good leading
01:25indicator for risk assets and stock markets starting to follow. And Heather, can you say
01:29why we started to see some of these big tech sell-offs? I mean, I know there was there was
01:33jobs numbers. There was some Berkshire Hathaway sell-offs and some similar properties. Why did
01:38this start to, again, get the ball rolling? Well, to me, it seemed a little bit overdue. I mean,
01:44some of those rallies in the last couple of weeks have just seen needed to breaks, needed to hit the
01:50breaks. The one thing that really jumped out at me at the end of the week, other than the jobs
01:54data,
01:55which I'm well known for, for following closely, was the, you know, what happened in South Korea.
02:00It also seemed to be a bit of a canary in the coal mine. People pulling back on trades there
02:06and
02:07starting to reassess and then, frankly, take their gains. Heather, you mentioned the jobs numbers and
02:12your eagerness to follow those month after month after month. I think a lot of folks gobsmacked when they saw
02:18that beat yesterday. It was something that was startling, just the magnitude of that beat.
02:22What do you make of it? What does it say about the labor market as we kind of talk about
02:26the agita
02:26in the markets more broadly? It didn't take long before we saw chief economist after chief economist
02:32after chief economist revising calls for what the Fed is going to do next. Indeed, it does seem like a
02:38hike is all but inevitable. Yeah, I mean, to me, the hiring recession is over. The magnitude,
02:45not just of the May number, but of the past three months, it's just incredible. 188,000 average a
02:52month the past three months. That would have been a good number back in 2019, let alone sitting here
02:57in 2026, you know, when the break-even rate for the jobs is probably somewhere in the 30,000 to
03:0350,000
03:04range. I think it was really telling as well the breadth of the gains in the past three months. This
03:10is no
03:10longer just a health care story. And even if you think hospitality got boosted by the World Cup
03:16effect of more hiring in restaurant and bars, you know, it's harder to brush off the rebound in
03:21transported warehouse or in retail or even in construction as some sort of one-time effect.
03:28Another really good indicator was the black unemployment rate. Black unemployment rate hit
03:33its lowest level in a year. These sort of trends seem a lot more sustainable and long-lasting.
03:42You know, the one Achilles heel is that wage growth number, the lowest in five years,
03:483.4 percent, probably going to get a 4 percent CPI print next week. That's the pain point for the
03:54economy, and that's the big question mark. I call it an E-shaped economy now. You know,
04:00can the middle class hold on? I know we were joking about Nick's tickets, but can they even
04:06keep spending the same amount at Costco through the end of the year? Yes, a very good point.
04:11Mike McGlone, you mentioned Bitcoin as kind of a leading indicator for risk
04:14assets, and I wonder if you could situate that in this environment we're in right now,
04:18or we're just days away from a SpaceX IPO. We're talking about an open AI IPO, an Anthropic IPO,
04:25just a ton of money flowing to the markets. And I'm curious what that means for cryptocurrency.
04:30We've seen it as this kind of prominent risk asset for so long here. How much do you think
04:36these outflows are going to continue now that we see these AI companies and SpaceX kind of coming to
04:41the public markets? David, I think you nailed it. That's the key thing, is cryptocurrencies and
04:46precious metals have no income, no earnings, no revenue, and the earnings from the stock market
04:51are off the charts. So to me, it's just one of those things is what money manners are doing,
04:56and they're realizing cryptocurrencies have unlimited supply. They're duds, so they're selling every
05:00rally. You sell the duds, and you buy the studs. The studs are stock markets. Stock market's the
05:04only game in town. Sure, we've had a little bit of a healthy correction, but that's the key thing I
05:08have from a commodity standpoint. You're going to see continued selling cryptocurrencies, most notably
05:13Bitcoin, because there's a better game now. And we realize, and most of them, it's just speculation,
05:17and that speculation is just getting purged. I think it's the beginning of a purge of,
05:21there's millions of cryptos that track nothing. We get rid of those, and at some point, we'll find
05:25a bottom. Looks like we're far from that bottom, though. Mike, you made a call that Bitcoin was
05:29going to drop below 50,000 back in February. I'm looking at it now. It's hovering around 60.
05:34Do you still stand by that? Has your call changed? And then you also put together this research
05:39explaining that you think 2026 is going to be the year of pump and dump contagions. That's not a phrase
05:44I thought I would say, but can you explain to us what you mean by that? First of all, my
05:48call starting
05:49last year was for Bitcoin, what got above 100,000 to lose a zero to go back to 10,000.
05:54I've made a
05:54similar call in 2018, when it was around 10,000, and I got about 70% right. But the key
05:59theme is,
06:01it's just starting. We had the best backtest in history. We had ETFs jump on, which means
06:07mainstream, and President Trump pumped it, and now it's dumping. But the key theme is Bitcoin pumped
06:12in the beginning year, and now it's dumping. Natural gas in the U.S. pumped in the beginning year,
06:16now it's dumping. Corn was up a lot, and now it's down in the year. And just what happened is
06:21silver
06:21was up 60% in the beginning year. Now it's down in the year. You see that trend? My theme
06:26is,
06:26I'm very concerned, is we have never seen surging volatility in gold and crude oil without it
06:32trickling up the stock market. Bitcoins are collapsing. It just looks like the next big trade is
06:37crude oil is going to follow natural gas on the way down, and potentially the stock market will follow
06:41Bitcoin. We had a number of Cabinet officials on Capitol Hill this week testifying before various
06:46committees, Secretary Scott Besson among them, and he was asked about the pressure that energy
06:51prices are placing on consumers. Picking up on what you said just a moment ago, Heather,
06:54about the real pressure a lot of people in America face right now when it comes to
06:57cost of living. Something he and the White House have floated now or have asked for
07:01is repealing this federal gas tax. Let's take a listen to what the Treasury Secretary had to say.
07:05We have moved. We have asked Congress to move to eliminate the gas tax. That is done through
07:11statute. You have moved that. So you're in favor of eliminating the gas tax. We have asked for that.
07:18So we can join bipartisanly today because you're in favor to eliminate the gas tax.
07:24Again, the White House has asked for it, sir. Heather Long, let me turn to you. I'm curious
07:28of how manifest the pressures from this energy crunch were in that jobs report on Friday. And I know
07:34that you are somebody who can give us the straight dope here on what removing that federal gas tax
07:39would actually mean for consumers. How much of a panacea that would be for those who are suffering
07:43because prices continue to creep higher? Yeah, I mean, politically, it's probably their best option
07:49because there's not a lot that you can do in the short term to get relief on gas. But obviously,
07:54from a budget perspective and from a practicality perspective, it's not a good idea. I've heard on
08:02your show, several budget experts come on and just totally say they've given an F grade in terms of
08:09how to solve this. Obviously, it creates much longer holes down the line for, you know, we need to fund
08:17our transportation. And that's the way we do it, right or wrong, in the United States. I will say,
08:22so we have 15 million members at Navy Federal Credit Union. We're monitoring very closely the credit
08:28cards and debit cards spending data. You know, what I can tell you is two things. Number one,
08:33it's been surprisingly resilient. But number two, there is some pullback, particularly from folks
08:39earning about $50,000 or less. You can see the pain pressures that they are spending less in
08:46inflation adjusted terms than they did in 2019. And what is interesting to me is the two areas we start
08:53to see some real pullback on. One is home improvement spending. That's discretionary,
08:58not super surprising. But the other one that worries me is healthcare spending. We've seen
09:03some pullback, early signs of pullback there. You know, are people not going to the doctor?
09:08That creates bigger problems for society and, you know, even for the workplace if people aren't
09:13getting their needs taken care of. Mike, from a larger perspective, if you're not you and you're an
09:21average person watching these markets, watching us talk about all these different factors and what
09:26they're doing at the moment, how worried should you be? Should the average consumer, the average
09:31investor be concerned about an AI bubble, about the exposure of some of these indexes to these big
09:37companies as they go to IPO? Should people be worried, especially people my parents' age,
09:42who may not have the kind of duration they need to recover if something goes badly?
09:45Well, I'm glad you went there because being in Florida, you see a lot of more retired people
09:51that are way overexposed to risk assets in the stock market. And they can't help it. It's the
09:54best rally we've had in 100 years. We have more exposure of wealth to the stock market than any
09:59time in history. Cryptocurrencies are starting to decline in warning you. Gold's big rally last
10:04year was warning us. So I don't think people should be worried. They should adjust themselves
10:08accordingly. Don't be overweight, a risk asset that is the most expensive on the planet. And the key
10:13thing that happened this week is that U.S. Treasury long bond at 5 percent. To me, that's just too
10:17attractive for a stock market and for gold and for cryptos. And I think that's responsible investors
10:24should just be careful being long an asset that everybody else is long and looking over just good
10:28old U.S. Treasuries.
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