NOT PREDICT HOW WE’RE GOING TO
CLOSE BUT I’LL TELL YOU WE ARE
OPENING RIGHT NOW, THOROUGHLY,
ON THE DOWNSIDE.
WE’RE OFF, WE’RE RUNNING IT’S
MONDAY MORNING, IT IS 9:30
EASTERN TIME, AND HERE WE GO.
RIGHT FROM THE START, WE ARE
DOWN ALL ACROSS-THE-BOARD.
YOU’RE LOOKING AT THE DOW 30,
ALL THOSE 30 STOCKS MAKEUP THE
DOW INDUSTRIALS EVERY SINGLE
ONE OF THEM IS ON THE DOWNSIDE
AND THE DOW ITSELF IS DOWN 651
POINTS.
THAT’S ANOTHER TWO-PLUS PERCENT
PERCENTAGE POINTS ON TOP OF LAST
WEEKS BIG SELL-OFF.
THE S&P 500 ALSO OPENING SHARPLY
LOWER 2.5% DOWN AT 3,800 THAT IS
THE S&P.
THE NASDAQ IS DOWN 3%, THAT IS A
3% LOSS, 337 POINTS, BIG TECH
ALL OF THEM SLIDING BIG TIME.
FORTUNATELY, WE HAVE SUSAN LI
WITH US THIS MONDAY MORNING.
>> GOOD MORNING.
STUART: CAN YOU SORT OUT BIG
TECH WHAT’S HAPPENING?
>> WELL I THINK IT’S LOWER IN
LINE WITH THE YIELD MOVE THAT
WE’RE SEEING.
HAVE YOU LOOKED AT THE INTEREST
RATE EXPECTATIONS THIS MORNING?
EVERYONE IS RATCHETING UP THEIR
PREDICTIONS, RIGHT?
AND LAST NIGHT YOU HAD THE
INVERSION OF THE YIELD CURVE
WHICH IS THE TWO-YEAR YIELD AND
THIS WAS, WAS THIS BAFFLING TO
YOU THAT SPIKE UP IN THE TWO-
YEAR HIGHEST SINCE 2007.
HAVE YOU SEEN THIS KIND OF MOVE
IN A TWO-YEAR TREASURY BOND?
STUART: IT IS HUGE.
>> SO THAT ACTUALLY BRIEFLY
TOPPED WHAT YOU WERE GETTING ON
A 10 YEAR TREASURY NOTE.
STUART: THAT’S A SIGNAL OF A
RECESSION.
>> YOU HEARD THAT ALSO FROM
STANLEY MILLER SAYING HE
BELIEVES A HARD LANDING IS
PROBABLY MORE PROBABLE THAN A
SOFT LANDING AND TALKING TO A
LOT OF THESE BIG DOLLAR
INVESTORS OVER THE PAST WEEK OR
SO, THEY ARE SAYING THE REASON
IS BECAUSE ONCE YOU GET ABOVE 5
% IN INFLATION IT’S VERY HARD
TO BRING DOWN WITHOUT MOVING
INTEREST RATES REALLY QUICKLY,
REALLY HIGH, AND SPEAKING VERY
EARLY ON.
STUART: OKAY, GOT THAT.
NOW LET’S MOVE ON TO WHAT I’M
CALLING CRYPTO CRASH, MAYBE
THAT’S THE WRONG WORD TO USE,
SUSAN.
I DON’T KNOW HOW YOU FEEL ABOUT
THAT BUT LOOK $200 BILLION WIPED
OUT OF THE CRYPTO INDUSTRY OVER
THE WEEKEND.
>> I’D CALL THAT A NEAR TERM
CRASH BUT YOU HAVE TO --
STUART: I WASN’T EXPECTING THAT.
I THOUGHT YOU’D GIVE ME A HARD
TIME.
>> BACK IN
DECEMBER 2019 BITCOIN WAS
TRADING AT 6,000 DOLLARS SO
YOU’RE STILL UP 500%-PLUS IF YOU
BOUGHT IN THEN, HOWEVER IF
YOU’RE ONE OF THE FEAR TRADERS
AND OF THE FOMO TRADERS TRYING
TO BUY IN AFTER THAT LEVEL, WELL
IF YOU BOUGHT A 30,000-PLUS
, YOU WERE UNDER
WATER TODAY SO WE’RE LOOKING AT
THE LOWEST LEVELS FOR BIT COIN
SINCE DECEMBER 2020, ETHERERUM
IS AT 1,200 LOWEST IN THE YEAR
AND THERE’S SECTOR-WIDE CONCERNS
ABOUT COMPANIES BUCKLING UNDER
THE SELL-OFF AND YOU SAW THAT
LAST NIGHT.
STUART: CELSIUS.
>> ONE OF THE LARGEST CRYPTO
LENDERS AND THIS IS A BANK RUN
IN CRYPTOCURRENCY, THEY ARE
PAUSING ALL WITHDRAWALS, SWAP
AND TRANSFERS BETWEEN ACCOUNTS.
NOW, CELSIUS WAS ONE OF THE BIG
LENDERS MANAGING AROUND
$12 BILLION IN LOANS OVER
1.7 MILLION ACCOUNTS, ACCORDING
TO THE THEY NEVER THEMSELVES
REVEALED THE NUMBERS BUT IT’S A
LOT OF MONEY DON’T YOU THINK?
STUART: IT’S HUGE BUT WHAT ABOUT
BINANCE?
THE LARGEST EXCHANGES AROUND?
>> YES, BUT THEY ARE SAYING
THEY ARE PAUSING BITCOIN
WITHDRAWALS TEMPORARILY, THEY
SAID IT WAS 30 MINUTES THIS
MORNING NOW TAKING A LITTLE
BIT LONGER BUT THAT HAS
SOMETHING, WELL THEY SAY, AT
LEAST, ACCORDING TO THEM HAS TO
DEAL WITH ONE TRANSACTION STUCK
IN THE PIPELINE RIGHT NOW, THEY
ARE WORKING TO RESOLVE, BUT
STILL, THIS SELL-OFF THAT WE’RE
SEEING, THAT MEANS THAT BITCOIN
AND CRYPTO IS WORTHLESS THAN
$1 TRILLION FOR THE FIRST TIME
SINCE JANUARY 2021.
STUART: IT’S A HUGE SELL-OFF,
WHETHER YOU CALL IT A CRASH.
>> I DON’T KNOW IF WE HAVE THE
CRYPTO STOCKS THAT MICRO
STRATEGY IS DOWN 27% THIS
MORNING.
MICRO STRATEGY IS ONE OF THOSE
COMPANIES LIKE, WELL, I
WOULD SAY IT’S PROBABLY ON ITS
OWN BECAUSE IT’S USED A LOT,
HALF OF THEIR ACTUAL VALUE TO
BUY BITCOIN, AND AS YOU KNOW,
WITH BITCOIN SLIDING SUB-25,000
THAT STOCK IS GETTING HAMMERED
TODAY.
STUART: IT SURE IS, NOW WE HAVE
TRAVEL STOCKS, I THINK, HOTELS
AND AIRLINES FOR EXAMPLE,, ALL
THE WAY DOWN.
I GUESS THEY BE HIT VERY HARD BY
A RECESSION.
>> YEAH, OKAY YES SO THEY ARE
LOWER IN LINE WITH THE REST OF
THE BROADER MARKET SELL-OFF SO
IF YOU THINK ABOUT IT OVER AN 18
MONTH BASIS THEY ARE ACTUALLY
OUTPERFORMING, ESPECIALLY
TECHNOLOGY, IN A HIGHER-YIELD
ENVIRONMENT, RIGHT?
THIS IS WHAT WE CALL VALUE STOCK
S, AND THE RETURN OF THE
TRAVELER, YOU’VE HEARD FROM
THESE AIRLINE CEO’S THAT THEY
CAN’T SEEM TO GET ENOUGH SEATS
OUT THERE, AND AS I MENTIONED TO
YOU, I GUESS WHEN YOU GET HAMMER
ED BY INFLATION THOSE
CAN ACTUALLY PASS ON THE
COSTS, LIKE JET FUEL, WHICH
I GUESS FOR 80% OF JET LINE
COSTS IF I CAN PASS THAT ON TO
THE PASSENGERS AND YOU SEE THAT
IN THE INFLATION NUMBERS WHERE
AIRFARE HAS GONE UP 20% MONTH-
OVER-MONTH RISING AT A
RECORD PACE YOU’D STILL GET
REWARDED IN THIS ENVIRONMENT
STUART: WHEN DO WE SEE SOME
DEMAND DESTRUCTION.
PEOPLE DON’T WANT TO FLY BECAUSE
THE PRICE IS TOO MUCH.
DON’T GO TO A HOTEL BECAUSE THE
PRICE IS TOO MUCH.
>> I THINK THERE’S A DEBATE OUT
THERE.
AGAIN, I SAY TOLD YOU MOST MONEY
MANAGERS EXPECTED TO BE A REALLY
TOUGH BALANCING ACT FOR THE
FEDERAL RESERVE TO GET
THIS RIGHT, ESPECIALLY WHEN
DEALING WITH INFLATION AT 8%, 40
YEAR HIGHS, BUT IT’S BUFFERED IF
YOU THINK ABOUT IT.
THE STIMULUS AND THE MONEY PRINT
ING TAKING PLACE OVER THE
LAST TWO AND A HALF YEARS
$2 TRILLION STILL IN EXCESS
HOUSEHOLD SAVINGS.
SO IS THAT ENOUGH TO BUFFER US
FROM SAY A HARD RECESSIONARY?
STUART: SO THAT QUESTION IS A
FAIR QUESTION.
WHILE WE’VE GOT TIME I WANT TO
MOVE ON TO TESLA, WE ALWAYS HAVE
TO MENTION TESLA.
IT’S DOWN SIGNIFICANTLY TODAY.
>> BY THE WAY TESLA, DO YOU
REMEMBER THEY BOUGHT
$1.5 BILLION IN BITCOIN?
STUART: YES.
>> IN 2021 SO YOU WONDER HOW
THAT’S GOING TO IMPACT THE
BOTTOM LINE FOR THEM AND DO
THEY BREAK DOWN THOSE CAPITAL
LOSSES IN THE NEXT EARNINGS.
I THINK IT’LL BE INTERESTING.
STUART: I DIDN’T REALIZE THAT.
MUSK HAD WARNED OF JOB CUTS BUT
NOW THEY ARE HIRING?
>> YES.
SO WE KNOW THAT THEY RECENTLY
OPENED THE BERLIN GIGAFACTORY
BEHIND SCHEDULE BY A YEAR, 12
MONTHS, TO HALF A YEAR, AND NOW
THEY ARE HIRING 500 TO 600 STAFF
ACCORDING TO THE GERMAN
GOVERNMENT.
NOW, THEY ARE ACTUALLY FIRING
CONVERSELY BECAUSE THEY FIRED
THEIR SINGAPORE COUNTRY HEAD AND
YOU’VE ALSO HEARD ELON MUSK SAY
THAT RIGHT NOW, HE THINKS
THERE’S A SUPER-BAD TIMES IN THE
ECONOMY HE WANTS TO CUT 10%
OF THE HEADCOUNT AROUND THE
WORLD FOR TESLA, BUT I WOULD
SAY LOOK, IF YOU LOOK AT TESLA,
YOU LOOK AT TECHNOLOGY I
ACTUALLY WANTED TO LOOK AT
AMAZON IN PARTICULAR AND SOME OF
THE BIG TECH LEADING --
STUART: WAY DOWN.
>> BUT AMAZON IS DOWN 12% SINCE
THAT STOCK SPLIT, AND YOU HEARD
TESLA ON FRIDAY SAYING THEY ARE
SPLITTING THREE-FOR-ONE,
PROPOSING SPLITTING THREE-FOR-
ONE FOR THEIR STOCK.
DID YOU SEE THAT?
STUART: I SAW THAT BUT AMAZON IS
DOWN 12% SINCE THE SPLIT.
>> THAT’S RIGHT SO BUT YOU
RALLY INTO THE SPLIT AND THEN,
OF COURSE YOU --
STUART: TAKE IT OUT.
>> YOU HAVE A BIT OF PROFIT-
TAKING PROCESS WHICH IS
WHAT WE’RE SEEING FOR AMAZON.
STUART: BUT TESLA IS DOING THREE
-FOR-ONE.
>> THEY ARE LOOKING TO GET THAT
APPROVED AT THE AGM THIS SUMMER
AND HOPEFULLY BY THE END OF THIS
YEAR BUT I THINK ELON MUSK
IS SAYING STOCK SPLITS ARE
POSITIVE FOR STOCK, SINCE WE’RE
IN A RECESSIONARY ENVIRONMENT,
WHY NOT GET SOME SORT OF
FINANCIAL ENGINEERING.
STUART: HE’S TAKING A HIT FROM
BITCOIN.
SUSAN, GREAT STUFF.
>> THANK YOU.
STUART: TAKE A LOOK AT THE BIG
BOARD, WE’RE DOWN 570 POINTS,
AFTER SEVEN MINUTES WORTH OF
BUSINESS.
THE 10 YEAR TREASURY YIELD VERY
IMPORTANT, LOOK AT THAT.
3.28%.
THE PRICE OF GOLD, 1,836 PER
OUNCE DOWN TODAY, OIL DOWN A
LITTLE I BELIEVE AT $118 A
BARREL ALMOST 119 BUT DOWN A
LITTLE BIT.
NAT GAS UP CLOSE TO $9.
THE AVERAGE PRICE FOR A GALLON
OF GAS MOVING UP AGAIN, $5.01
THAT’S THE NATIONAL AVERAGE AND
OH, DEAR LOOK AT CALIFORNIA ALL