Forward Guidance: Policy Intervention Is Keeping The Bull Market Alive | Weekly Roundup

Sourced by podcast-ingest on 2026-06-12. Auto-transcribed via AssemblyAI (universal-2, en). Speakers identified by AssemblyAI Speaker Identification using the per-podcast host/regulars hints; the resulting label→name mapping is in the frontmatter. Duration: 56m. Episode page: (not provided). Audio: https://traffic.megaphone.fm/BWG1391215115.mp3.

Show notes (from RSS)

Markets increasingly seem to respond more to intervention than fundamentals, raising a bigger question about what actually drives asset prices today.

This week, we discuss how policy intervention, systematic flows, and AI-driven capital allocation are reshaping market behavior and investor positioning.

We also explore volatility squeezes, Fed rate expectations, gold and oil, AI infrastructure spending, hyperscaler equity issuance, Bitcoin miners pivoting to AI, and the growing tension between technological progress and market centralization. Enjoy!

TIMESTAMPS:

00:00 Intro

05:11 Trump’s Market Playbook

08:11 The Fed Pricing Trap

12:12 Volatility Positioning Unwinds

17:22 Markets Are Centrally Managed

21:48 Mag Loses Leadership

28:54 The AI Capex Risk

30:17 The Best Rates Trade

34:20 Policy Powers The AI War

38:20 Will AI Politics Hit Markets?

43:52 The AI Access Divide

50:34 The Centralization Trade

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› Felix – https://x.com/fejau_inc

› Quinn – https://x.com/qthomp

› Tyler – https://x.com/Tyler_Neville

› Telegram – https://t.me/+CAoZQpC-i6BjYTEx

› Blockworks – https://x.com/Blockworks

RESOURCES

› Weekly Roundup Charts – https://drive.google.com/file/d/1I_E0fiARx9ikBBddWaGJegaAAfa00ODn/view?usp=sharing

EVENTS

› Join us at Digital Asset Summit 2026 Asia October 7th & Digital Asset 2026 London November 10-11th

https://blockworks.com/events

DISCLAIMER

Nothing said on Forward Guidance is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only. Any views expressed are opinions, not financial advice. Hosts and guests may hold positions in the companies, funds, or projects discussed.

Transcript

Tyler: We're watching centralized asset management play out where you can control the market like that off positioning.

B: He wasn't going to set the world on fire into the SpaceX IPO.

Felix Jovan: We've hit max asymmetric hawkishness. I don't know how we get any more than where we're at right now.

B: To me, it's likely a local top in both growth and inflation right here.

Felix Jovan: I just don't know how you get this pronounced inflationary cycle without wage growth.

Tyler: When the VIX curve is inverted and everyone's scared. That's when you have to buy risk. Right? You could get a super squeeze these because I think a lot of these CTAs delevered.

B: The next thing that is also going to catch people off guard is to

Felix Jovan: nothing said on for guidance is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the company's funds or projects discussed. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. All right, everybody. Welcome back to another episode of Forward Guidance. Random Edition. The trail's back. After week off, enjoying the sun. We're back. What's going on, guys? How you doing?

B: What up? What up?

Tyler: What's happening? Good.

Felix Jovan: Everything and nothing. Yeah, I hung some art up finally. It's not just sitting on top of my bookshelf anymore. That's a big deal. I know. Took me months to get the courage and motivation to do it.

Tyler: Is that the Matisse? Is that a new Matisse?

Felix Jovan: No, no, the Matisses are in a bathroom now.

Tyler: Oh, nice. Yeah, this way. Functionality a little bit more. It's like. Yeah.

Felix Jovan: Thank you.

B: Tyler knows one artist, so it makes him sound smart, so he just keeps using it.

Tyler: It's so true. I got no art here.

Felix Jovan: Do you know where Matisse was from, Tyler?

Tyler: I figured France. I figured.

Felix Jovan: Yeah. There you go.

B: There you go.

Tyler: Nice, nice, nice. Aren't you Felix Jovan?

Felix Jovan: Yeah, yeah, yeah.

Tyler: You got a little French in you.

Felix Jovan: Yeah, it's actually, it's always quite difficult for me during these World Cups because I'm half French and half British, so I always have to decide which team to support the most. And I've always been England first and then France second. But, yeah, it's always tough trying to decide who to support on. And then, I guess, I mean, Canada's in The World cup too, for once. Which is kind of.

B: I was gonna say, what about. What about the home school?

Felix Jovan: Yeah. I'm used to Canada not even being in the World cup, so that's. Yeah, I gotta get used to that one as well.

B: You're like the kid who shows up in whichever jerseys winning.

Felix Jovan: No, no, no, no, no, no, no, no, no, it's. Oh, yeah, no, I have.

B: My aunt's from Portugal.

Felix Jovan: No, no, I have a sequence of support one after the other, but the sequence never changes.

Tyler: So I. Speaking of, this is the NBA Finals too. I grew up outside, you know, New York City in New Jersey. And one of my buddies, Dan Grunfeld, and his dad was the GM of the Knicks, so we were always rooting for the Knicks. And. And now that I'm in, you know, outside San Antonio, we.

Felix Jovan: All.

Tyler: My kids love Wemby, so I'm, like, kind of torn. Last night, my kid's heart was torn out because, like, they hit the shot and I'm also like, let's go, Nicks. It's a really weird situation.

Felix Jovan: There's a lot of Nick's bandwagon accusations out there in the wild too. Speaking of bandwagoning. But you're an og, Tyler, so respect to that.

Tyler: Yeah, yeah. So anyway.

Felix Jovan: Nice. Okay, before we get into it, got some exciting announcements of some new digital asset. Seven days coming up over the next while we're launching one in Asia in Singapore. Super exciting. Going to be right off the back of token 2049, so the whole industry will be there. So that's happening in October 7th DAS Summit Asia. And then, as usual, we're doing the London one as well, although a little bit later because of that. So. November 10th to 11th in London. Always a ton of fun. I'm so. I've never been to Singapore. I'm excited. It's going to be. Going to be a good one. And yeah, hit the website, get your tickets early, register early. It's going to be a good one.

B: Are we gonna make it out there, Felix?

Felix Jovan: Oh, yeah, yeah.

Tyler: Is Mike gonna pay for my flight?

Felix Jovan: Yes, Mike's personally. Yeah, yeah, no, yeah, we'll be there.

B: That'd be a good trip.

Tyler: Yeah, I've never been out there either. I've heard it's beautiful.

Felix Jovan: Yeah. There you go. All right, pleasantries aside, what do you guys want to talk about right off the bat? Like, right before we recorded this, it started to seem like we got an Iran deal. Finally, for real this time. I know we've had 30 of these deals, but maybe this one's the real one. I don't know, are you guys even paying attention to this at this point or how do we even start thinking about it?

B: I, I was most interested this week because the Vol complex that blew out and I was surprised at such. I mean we did get some pretty extravagant selling days, particularly in the Nasdaq, more so than anything. But there was across the board some selling. But the V response, I think probably partially because just people weren't hedged. Everyone was sort of riding the, the magic carpet into the SpaceX IPO being a sell the news date and you could just kind of print until then. And so I think it caught a lot of people off guard by the looks of it. And so to me, that was a very interesting setup going into today or into tomorrow really where you have this ipo, but a lot of selling and hedging already taking place. And I hadn't been paying so much attention to the Trump stuff until this morning when he did the exact same thing he did on the last time he wanted to do this and to

Tyler: the perfect point in fx. Like, yeah, he nails it. Every, who, whoever is giving him advice on the side is incredible.

B: It's best, I mean, obviously like it's the hedge fund manager running the treasury because Yen USD JPY gets up to 160, things are a little teetery in markets and then he knowingly was never going to take over Kharg island or strike, you know, what, what are you saying? And it's what they did at the end of March too to, you know, announce the end of civilization in Iran, you know, strike up fear and then, and then do this taco that gets a big ball crush. So it's become a lot more, I guess, predictable in this sense because it was very obvious to me this morning what playbook was going to be ran like he wasn't going to set the world on fire into the SpaceX IPO. And I, I, I've been tweeting these things like tinfoil hat theories that are things that I actually, sometimes they're sort of true, but sometimes not. And they ruffled some feathers because people are like, no way, he wouldn't do that for Elon. And it's like, well, maybe he would. And so here we are again. But next week we have BOJ and FOMC. It's going to be interesting because, I mean the 160 on USDJP py, my gut says it's got to go, but I would say that they want to try and bat it down one more time. But I don't really know how they can keep a lid on it materially without causing some weakness in equity markets. So there's a lot going on I think in gold. I think we're getting to peacockishness and, and war expectations, things like that. There's a lot to do outside of just betting on semis.

Felix Jovan: Yeah, I feel like the gold and the rate hike cuts, pricing are the two most interesting markets to me right now. Because first off you have just this huge pivot of going from multiple cuts expected before the war to yes, now we have multiple hikes and it's not really moving that much more now, especially by end of year hikes. Like there's another hike I think priced into 2027, but for the most part I don't. Look, we have another one I want to show here on slide 26 here. Real wages are decreasing, like wage growth is lackluster. I just don't know how you get this pronounced inflationary cycle without wage growth like we've talked about on the show many times. The main reason they had the most panicked, fastest rate hiking cycle in history in 2021, 2022 or whatever was because they were scared of a wage growth, a wage price spiral. And we just have no signs of that right now. But yeah, we have negative real wage growth and you have all these hikes priced into the curve. And yes, there's a lot of inflation right now, but it's like commodity inflation, it's energy inflation, it's supply shock inflation that I don't know, I feel like generally speaking gets self served through market equilibriums as opposed to like a Fed reaction function. So I don't know, I'm kind of at a fade right now of what's priced into the curve. And then I mean you see gold's just been getting whacked by it. The market is fully bonded to this idea of Kevin Morse coming in next week to his first meeting and just being a turbo hawk and he's going to tamp down inflation. So it feels like that's what gold is reacting here to. But I don't know, I feel like we're stretching the other direction now. What do you guys think?

B: Yeah, my, my, my gut's the same. I think it's interesting to me because it's like the, the Warshaw ideology is not how I portray or perceive his sentiment. I mean in his hearings he's talking about using trim mean averages and core inflation measures which the, the difference between core and headline has never been in recent years greater because of this energy shock driving most of the, the headline year over year. I mean, not that that's great like you know, if, if your inflation rate is nothing, if you don't eat, drive to work or fly anywhere. So I guess that's, you know, one thing they have going for them. But I just think that the pressures, particularly in a politically political year will, will be on him to not, not act. And I think there's enough ground to get the committee in that direction given the reasons you outlined. And also there's in my opinion like we've been talking about sort of bearish on oil for a couple of weeks now because of the, of the issues come, that come to head in June. If they don't, you know, get the straight open, there's a lot bigger problems. But it's clear to me there's more demand destruction going on than what I think people are giving credit for. At least on the oil bull camp side. I think, I think there's a lot more demand destruction happening at the consumer level given these higher prices. So maybe that gets relieved and the economy gets a little boost over the few months if we start seeing traffic

Tyler: and oil prices down.

B: But I think that's been weighing and we might see that in the next quarter earnings, particularly on the consumer related companies that, that can't price pass those price pressures through as much. So yeah, I just don't see the sustainability of the, of these prices to be passed on and that feeding into hikes. And I think the bar is just really high to hike as it is.

Tyler: Yeah, I'll play a little devil's advocate. I think I'm somewhat in the same camp. Like I think they might even more even ease here. But check out slide 55. So that's two year break evens. Surprisingly this was going down while nominal yields were staying basically flat. So there was actually like real, real yields were actually growing meaning liquidity was kind of getting taken out of the market. Meaning the policy rate is too high on nominal yields while inflation's dropping. So the Fed's kind of too tight here. If you take the two year nominal versus two year break even, break even is going lower. Right. So I think inflation's dropping here and the Fed is behind on easing now, which is kind of odd and it's weird. But this is mostly just oil related. And if you get Hormuz opened up like Trump said tomorrow this could really drop. And then the Fed's in this place where all these hikes were priced in and everyone's on the wrong side. I also want to go through two weeks ago when we talked I was really nervous about the market because of the dispersion trade. We've seen that actually unwind now not to toot our own horns but like maybe let's go to like side 53. So a lot of funky things happening, right? So we saw when I said implied correlation, you know I've tweeted about this too but like it was at 6 implied correlation 1 month implied correlation. This is what we're looking at was at 6 and I'm like all the meme stuff was going nuts. You had the Vix was at like, let's see sub 16 and every single day you had single stock volatility just skyrocketing and index volatility was basically flat to down. And this is a giant derivatives thing. And then if you look at Slide 54 the volume of the Vix, this was, you know, as this was fault, this was falling alongside you know, implied correlation. So these are the inputs for a lot of the CTAs and systematic investors. So when correlations are low they go out into stock pickers market, they buy growth, they buy earnings, etc. But it gets so extreme, these things, these passive systematic things get pushed to such extremes and now we see bam, something just flips in the market which was probably you know, oil going up, Iran happening. And then it basically set off like this volume spike which unwound a lot of the single stock volatility. Everyone was basically, if you looked at a lot of this call skew these, these retail investors were balls long calls, they get absolutely wiped out. Index volume goes spiking and that whole dispersion trade unwinds. This is, I'm probably talking derivatives but basically all the meme stuff unwinds and everyone goes to buy downside protection where the rubber hits the road. And this is from Cullen over at Goldman Sachs. This is the 1 chart. I don't want to steal a lot of their stuff but this, this is slide 50. He's the man. So over the last week this was, this was. He puts this out like right before Trump spoke. He says over the last week seen a huge uptick in demand for very short dated downside one week and in as a result we've seen the term structure invert Short dated downside explode S&P1 one week downside Vols up 12 all points in just five sessions. So basically this last week when Trump started talking crazy again, everyone bought short dated protection. They inverted the volume curve which is usually a great sign that everyone's overprotected. The downside, they bought insurance. They kept buying insurance as the hurricane's hitting. Right. And of course Trump wants it locks it back and we get the revenue. And you know, if oil stays low here and you have now the Fed's behind on easing, you could get a super squeeze. Because I think a lot of these CTAs delevered. Check this out. This is where like if we're talking statecraft, go to slide 51 and I'll shut up after this. But this is the dollar was basically set up to break out this morning. Like we're watching it tick higher and higher through 100 and this is causing gold imploding. Real rates are going higher. Like you could have the carry trade unwind and now go to 52. The yen. The yen was breaking down. There's gotta be. It's probably bested just watching tick for tick. Okay, yeah, announce it now. This is like we're watching a centralized, centrally planned economy. And I guess it, I don't know, you could say it's a good thing. You could also say it's not really a free market, but we're watching centralized asset management play out where you can control the market. Like that off positioning and like they do have a new, you know, department of, of economic statecraft. And I'm sure, I'm sure that's really what we're watching here is like when you get to the breaking point where things are going to unravel, they talk it down because it really would unleash major havoc. And of course we get dollar down, gold rips, real rates start flattening. We're going to grow our way out of the debt. All the AI stuff goes bonkers, High yield gets a bid, credit spreads come lower and the whole thing kind of keeps going. And so like, I don't know, we'll watch, we'll watch oil tomorrow or if it gets rescinded or whatever, you got to adjust. But I do think a lot of protection was bought. And these derivatives things really, they go in such extremes. And now, yeah, you know, now we'll

Felix Jovan: say dude, yeah, you love her. The state of the market over the last few months has just been like any like just look at put SKU call skew and it's like yeah, we're talking about who's the, who's the fx quant is best. But I want to know who the who their derivatives quant is too. That's just like, you know, there he's on the phone with Trump just being like, all right, you know, put skews elevated, they bought the puts, all right, bring back in the deal. And then that's why we have these like violent rallies because of like all the CTA is buying back in. And then like everybody's trying to unwind their, their, their hedges and it's just like this like four times now.

Tyler: When you think about it. It's the direct result of centralizing the asset management industry. It's like you have all these pension funds played not to lose after 2008. So they threw a lot of money into longshore beta neutral hedge funds and then they put a lot of money into systematic, you know, quant funds. And now you have basically a market structure where you have huge piles of capital, $40 billion funds, $100 billion funds and to move that money. This is why I don't think it can change because you need to decentralize the asset management industry to get real fundamentals again. But my point being is when it's so centralized like that, until those assets change hands and change incentives and change fund structures, this will just keep happening. It's why the VIX inversion is one of the greatest contraindicators ever because these guys have to protect their books. Their incentive is to not lose money. So it's always beta neutral. And then until what happens is I think you're seeing the real winner, you could theoretically say if they can, if they can actually withstand the drawdowns is retail because they're the ones that actually take super risk and are backed by the fact that the government is short nominal growth and they just pouring money into fiscal and the capex from hyperscalers. So I don't know, I think this, the market structure is just so bad. But you have to take advantage of it and use it to your advantage. So when you get super low volume and insurance is cheap, you buy it. When, when the VIX curve is inverted and everyone's scared. You know, you, you, you actually that's when you have to buy buy risk, right? And vice versa. So that's the way I'm thinking about things here. But yeah, it's tough. It's tough.

B: Yeah. The, the timing each day is really important too because these early afternoon announcements, they're, they're always for the pumps are planned because it, the, although the presence of the leveraged ETFs has grown to be so large rebalancing that you into the close, you know, people, the, the algorithms are just front running that flow and doing it depending on whatever the day's move is up until that point. And so you get extra squeezy when you flip the market upside down like this or inversely in both directions. So yeah, it's very strategic and people are catching on to the game more and more. I mean even prior to this the market didn't really go down on his big threats because no one believed it anyway. So at some point there will need to be new games and strategies because the market is catching on.

Tyler: You, you know what's super interesting to me is just from a macro basis is like a lot of the levered players building out AI their bonds are 100 cents on the dollar and this is not affecting high yield really that much. And you'd think corporates are, you know, corporates aren't really that levered in a lot of senses. It's the government that we're worried about which is why the carry trade matters so much. But like all this stuff like you, if you looked at the high yield bond market over the last, you know, week or two, it really didn't move that much. It was, it was largely unchanged. This was, this is a equity market

Felix Jovan: phenomenon and that's that, that's actually so. Because I was just looking, it's, it kind of shocked me. But the Mag 7 ETF is down year to date versus like Nasdaq Hughes X Mag 7 is up 12% year to date like despite everything that they're doing like the Mag Sevens are actually red year to date. I, I feel like that's quite, I mean. Shout out Quinn. You've been, you've been on top of this. Like everything else has been, you know, the equity issuance, the reversal of the buybacks is actually affecting it. I think like that is, that is going very understated but I mean, yeah, these things are not, they're lagging.

Tyler: The most money under the hood is moving to the growth pockets and where it should and I guess that's a, you know, that's a good thing. And I think if you look at the numbers though, this is kind of wild. Another reason we probably sold off was 75 billion raised from SpaceX. 40 billion I think it was from Oracle. They're raising core weave did another 3.5. Like these are numbered.

B: Google did a bigger one than Google.

Felix Jovan: Google 80 billion equity issuance.

Tyler: Yeah and then, and then they're all getting ahead of OpenAI and anthropic coming public. So it's like we're, we're part of this is probably Just like a short term like funding phenomenon where these guys, everyone's moving their books to make way for that capital. And you know that's. But, but the numbers are kind of, they're kind of huge. And I think I had a, I had a chart on my Twitter where it was basically saying, and I said if you look at the past, I don't know, 10, 15 years, there's a net negative supply of equity because we basically did debt for equity buybacks. It was a giant debt for equity swap. And now for the first time we're almost seeing the issuance is going positive for the first time. So it is no surprise that I

Felix Jovan: think is it this chart here so good. Yeah. You know it's funny, crypto investors know this well because they're so finely attuned to supply token dynamics. And it's like, okay, we're going from Dev is hitting the min button now on supply. Supply is going up and yeah, it leads to a lagging performance relatively speaking.

B: It's interesting discourse around the Mag 7 because yeah, it's been a straight line of underperformance relative to equal weight relative to the whole entire market since October. Even out of the lows in March through the last few weeks it is, and now it's down again year to date yet and it's something we've been talking about since like October, November and nothing has changed like fundamentally they're increasing capex still, they're increasing their debt and share issuance, their income from their investment markups in the labs, the OpenAI, the Anthropics, SpaceX, et cetera are coming to market and at an overvalued and so you know, the, the income they are able to, to mark up will go away in some respects. So like, but people still argue this on Twitter. They're like the share buybacks don't matter. They're good fundamental businesses. It's like yeah, well it's, it's the price you pay for these things. And so it's just interesting to me because people get so upset and the other thing too, I see this pedaled a lot is oh my gosh, Nvidia. And these companies are so cheap. Like the multiples are so cheap and it's rich because it's always coming from people who never, who never look at multiples. They just buy on narratives. But then when it's cheap they say the multiples are cheap. But that's the point. Like a $6 trillion company should not trade at a growth multiple that like you to be Growing quicker than the GDP to than the GDP rate and you're the size of every country's GDP except the US it doesn't work that way like that. Give that three years and we're talking like you know the numbers that physically are impossible. So there's a reason that as companies get bigger their, that's not true. And growth rates go down.

Tyler: It could keep going if you know they're the K shaped economy and we just all end up serfs. That's definitely possible.

B: I mean the K shaped economy is going very strong. Absolutely.

Tyler: Sex slaves. You're Mark Zuckerberg.

B: That is going very strong. But that money is being sent to other parts of the market. I mean look at Nvidia's stock is, hasn't done anything.

Felix Jovan: And that was, that was what my whole point was early. Like a couple months ago when I was really focused on this like mythos AI trade was to, to don't touch the hyperscalers. Buy the things that the hyperscalers are buying funded by the things that they're selling which is their debt and their equity. And like I just feel like it's a continuation of that. Like memory is up 3x over the last few months while mag7 is down year to date because Google, Google's issuing 80 billion of equity plus their debt to go and buy those things. Like people are getting it mixed up and they just, they bucket the whole thing as one trade. It's like AI trade. I go by Google and it's like it's, it's a lot more nuanced than that I think. And, and you see that in the price action.

B: The next thing that is also going to catch people off guard. But, and maybe this is two months too early, but the way you stop your share price from declining a la Meg 7 hyperscalers is to stop doing what everyone is telling you is a bad idea which is aimlessly spending on low rate of return capex. And so that's the next leg of the trade. The only way you stop the Mag7 Hyperscaler share price underperformance is by curtailing the thing the market is punishing you for, which is your drunken spending. And that then is when the rest of the NASDAQ complex you really see the cracks. But people don't want to hear that either. Even though to me it's clear as day. I don't know when exactly it happens or when the market cares. I guess we're still caring about Trump's Iran shenanigans, but it's coming and it has to come like make seven. CEOs aren't stupid. They're not going to just, there's still this. Clearly they're still happy to hit the bid. They don't think their share prices are undervalued. Google's issuing, they're all issuing plenty of equity. But given how late stage we are in this whole thing, that's what I would be very cautious about.

Tyler: We could have just started a new cycle today though. I mean a new credit cycle in

B: some, I mean it's been like credit spreads haven't done anything for months. It's fine.

Tyler: Like that's. I guess what I'm trying to say is like they, they, if they kept driving this Iran thing off, off the cliff.

Felix Jovan: Yeah.

Tyler: I think the credit cycle would come to an end and then you would have to raise rates. But now I don't know if, if this really is the last of it and there's an agreement and you see the 10 year yield took a dump and now, now you got, I don't know, oil's going lower. This is better for the K shaped economy, maybe that collapses and you just take off again.

B: Yeah. My favorite trade, sulfur futures because you win either way. If they pump the A AI bubble by cutting into it, they have to lower sulfur. If growth gets on, they keep the war going. Demand destruction, all those things. I think the most asymmetric to me is long so far.

Felix Jovan: Yeah, 100. The point of asymmetry is that if, if you believe that rake hikes will not formalize and we have two hikes priced in over the next year, you should only be looking at cuts here and like, and even then in terms of like, yes, it's super clear in terms of SOFR trades there. And I think a gold long is the same reflection of that trade and I think it can do really well. But even then, like in other asset classes, if, if, if war should the Fed just stay flat and don't do anything that's a passive ease because eventually if they keep staying flat, the sofa market's going to have to price out those hikes to get back to neutral where they're at now. So there's still going to be that passive ease anyway. So it's like the entire asymmetry is on the other side. We meet, we've hit max asymmetric hawkishness. I don't know how we get any more than where we're at right now.

B: Yeah, I, I don't think like yes, the economic data is, is, is strong like labor Market stabilized. But I have no reason to believe that this is nothing more than the, you know, umpteenth dead cat bounce in stabilization we've seen over the last four years. Every, every single year we've had this in 20, 23, 24, 25, now 26. Where you've had it looks like growth is teetering and then they do something. In the last two years it's been a string of Fed cuts. This year it's been intervention in currency and oil markets and different things and the tax incentives, the OBB tax incentives. So I don't have any reason to believe though this is a complete re acceleration to me it's likely a local top in both growth and inflation right here. I think there's risk of an earnings hangover when we start getting Q2 earnings in, in mid July to, to through August. And another reason I like, I like that long sofr trade because I think the real economy, while the AI trade is running hot, the Capex is running strong. We know this. I think the real economy can't really handle real rates above where they're at, which you pointed out, Tyler. So I think that's a drag. All else equal if fed funds doesn't come down.

Tyler: I think the biggest thing that I'm looking for is the rate of change of growth going lower. But at the same time, you know, if you look at like the seasonal Vol. July is where like every year everyone's on vacation in the vix goes, you

Felix Jovan: know and like yeah, every time.

Tyler: Every time. I should probably vix chart but like August in, in July it's usually. And especially if Trump does this now and everything's out of the way geopolitically. I wonder, I wonder. They really nailed the seasonality.

Felix Jovan: Yeah.

Tyler: I have to say like I hated, I still hate, you know, how Trump treated the whole Epstein thing. I think it's still a travesty that we, that the. Nothing came out of that and, but you can't argue that he's savvy with making, you know, economic deals for America and manipulating, you know, the geopolitical sphere.

B: Like it's, I don't, I don't know if in what way he. The tariffs have been a complete failure and now there's no tariff revenue. Like it's just pomp and circumstance with no mus. Like nothing behind it.

Tyler: Yeah, yeah, just the, the, I guess

Felix Jovan: the, the machine like success here in the straight of four Muse is just going back to where we were four months ago. Yeah, but, or even like okay, there's A nuclear deal. But yeah, there's a nuclear deal before

B: Trump, I guess his manipulation of markets. Yes. His actual politics.

Tyler: He's allowing the credit cycle and the capex cycle to keep going so that we win the AI war. And I think that's the policy. I think, I think the real power,

Felix Jovan: yeah I agree with that part is

Tyler: build out your AI infrastructure as fast as you can. You saw China, they just did. I think it was like and this is not as big as hyperscalers but they're doing about 300 billion USD of spending for AI infrastructure and they're ahead of us on the power side. But you know, and then not only that, imagine Trump starts taking stakes in certain companies to like lower their cost of capital and for the AI build out, I mean we're seeing real bottlenecks. Right. I could see that being a catalyst. So it's really hard to battle when the government is short nominal growth. Your deficit is huge, the policies grow your way out of it. And there's times to be bearish like I think where everyone messes, you know they are like these guys flip flop. We're pretty, we've been pretty good at this but like when things are really imbalanced on euphoria and all these derives things we call it out and we say hey like be careful. But now I think that got largely washed. Everyone's on the wrong side and, and the growth, I think the growth is still there. They're, they're not stopping spending. In fact that all the, all the money that they're going to raise from Oracle, Meta, Google, where does that go? That goes to another company's top line so that they're in.

Felix Jovan: Yeah, they're going to lever up like

Tyler: yeah and like what's the money multiplier on all that? All the money, you know and all the deals, like how many more deals. The big problem is like the data center build out. Do we hit hiccups? Political things. But, and I think you are like there's some stuff and I believe it was like was it Wyoming with Crusoe? There was some chatter about them not building something out there, but yeah.

Felix Jovan: And there's one in like Utah data center moratorium stuff. But that's okay because we're gonna have space data center in two years.

Tyler: Yeah. And one of my, I actually think

Felix Jovan: we're going to get them. I, I, I'm not, I'm not fading. I think it's going to happen.

Tyler: This is really interesting too and I think this leads into like what's happening with bitcoin. But so one of my buddies runs a bitcoin mining facility in, in Arkansas and they have nuclear power there. And he, he, he, it's, it's called Block Ops. I'll give a shout out. You should totally reach out to Ricky. He's the man.

Felix Jovan: Call of Duty. Block Ops.

Tyler: Block Ops. But he's got cheap power in Arkansas and he's like, these guys are knocking down my door for AI because all the bitcoin miners, they have the power and all the other. There's so many guys out there that say they have power, but they don't. Meaning like. I think what's happening is you're seeing the economics are so good for AI power that they would rather knock on bitcoin miners doors. And so, you know, there's a couple bitcoin miners that are selling their bitcoin to actually finance their AI build out now. And that's probably largely the supply of why bitcoin's been really struggling is that the, the miners are actually transitioning to, to their power to AI and it's winning the battle now eventually that'll, that'll hit an equilibrium right where you know, it's too cheap to, to mine. And then you, you mine for bitcoin. And I think that's the battle of centralization, decentralization we're watching.

Felix Jovan: Yeah, hash rate's been falling apart on bitcoin over the last year because like all these rigs are turning to AI.

Tyler: Yeah, it's national policy to get the power. So like in the truth is all the miners, bitcoin miners actually have the power they're, they're mining. Right. But a lot of these other companies are saying, oh yeah, we have a gigawatt of power. And all the, you know, the states are saying, no, you don't, like, you don't. The grid, the grid's like, you don't have that power. So that's why they're knocking on the doors of all these miners.

B: It's going to be really interesting coming down. We're what, five months out from midterms because the heat is growing politically to oppose or at least slow this build out. I mean, it's from all fronts. It's not wanting data centers in your backyard, it's not wanting higher electricity bills and it's not wanting to lose your job and mix on top. You know, people's unhappiness with the war and everything. So I, I don't know if it is such, like, such a, a cakewalk to just infinite AI spending because like why is it good? Like I don't think it's a good thing if the government's taking stakes in these companies. If you're an investor.

Felix Jovan: Yeah, there's a lot of, there's a lot of cross currents going on right now because then we also had Anthropic's new fable model come out this week or like which is just like a safeguarded mythos version. And so even the, the true AI believers are pissed off too because you know, if, if you're, if you're part of the, the short list that Anthropic improves, yes, you get unrestrained mythos access but, but then for the rest of the permanent underclass, you can't really do anything meaningful with it. So you know, there's, there's a lot of talk right now too about some of these, these AI companies and, and whether you know, it's this now we have the lead, we're pulling up the ladder from everybody else and making sure that we retain that lead. So there's a lot of political frustrations happening there too about like what do we do there? And so yeah, I think you're right. Like at the same time around like token like efficiency as well for different companies, suddenly these token usage is becoming more expensive sometimes than individual employees. Already we've seen headlines from like Uber suddenly was spending way too much on AI and they had to deposit and reset and so yeah, I mean these, it's not just a straight line towards adoption non stop for sure. And I feel like a lot of these cross currents are about to hit in the lead up to this midterms and it's going to be a, a key piece of the ballot is where do these parties stand on, on AI policy?

B: I get if you're in triple levered socks ETF and you made some money over the last few months, like you're gonna, you know, be cheering this on. But I'm not sure that that's going to last because it's, it's, it's pretty dark. Like the, the centralization. This takes centralization of both wealth and power to a whole another extreme. If you. Centralization of intelligence, if you believe that AI. You know, I'm a bull on AI of course. Like how could you not be if you used it at all? You know, it's, it's m. Materiality and magnitude. But the idea that it's good to at all cost pump. We already have monopoly or oligopoly dominated cap. You know, somewhat not really capitalist anymore system and this is proposing, you know, Trump's stakes in these companies again, the government taking an even heavier hand, picking winners and losers more than it already has. You know, the Mag 7 should have been broken up years ago if they actually, you know, wanted to fight monopolies and, and spur innovation. So I think it's pretty, it's pretty interesting because yes, the, the general public has not picked up quite yet on it. They, they know something's fishy, like they know that they're losing jobs and their data centers are going like, what are these data centers going up in my backyard for? Why is my electricity bills going up? But I would say the average person probably can't quite put their finger on, on the pulse of what, what the exact problem is. But I think that messaging will become more coherent as we go on. And frankly, like Trump's put served up the Democrats on a silver platter. Their campaign messages like, do you not like the war? Do you not like your gas prices going up 80%? Do you not like, it's like it's crazy like if the Democrats don't sweep like they are morons. But because he's just, you know, butchering everything, the, the tariffs, like he caused all this ruckus and all these problems to businesses. We know that small, you know, small medium enterprises ate the most of it. Now he's reversing it because it was such a failed policy rollout and you never hear about it anymore. Same with Iran. It's just nonsense. And I think to believe that the AI story is going to help people and now he's trying to spin it as the government taking stakes so that everyone can participate is just, it's, it's baloney.

Tyler: I'll play, I'll play devil's advocate, but if, if, if Leopold Ash Brenner's paper is true and you have 20, 30% GDP growth and there's new economies and it basically makes the, the, you could pay for a large portion of, and Musk talks about this too. But like, if the economy becomes so self productive on its own, then the social safety net will obviously grow massively and maybe people don't have to work and they just become creatives and you know, our artists again. And then, you know, religion becomes big and philosophy becomes big. That's what I think is going to happen.

Felix Jovan: But the, the other side of that though is like techno communism where you, you're not allowed the frontier models unless anthropic believes you're enough of an effective altruist because that's kind of where things are going right now.

Tyler: And that makes me nervous because, like, look it, if you look at history, I mean the way if you look at all the slop on the Internet now, which is like Instagram used to be like, oh, let's put, put pict pictures of our friends. And now it's like just a sex dungeon of like weird things of like, you know, and then here's my link to only fans. It's just, it's. It's a weird dystopia of moral value that, that social media created. And like, that's where the arc bends when you don't, if you don't have like a productive workforce that has morality

B: is, that's the thing is they're. We're gutting humanity. Like, and so people don't get their undies in a bundle. This is like we morphed into a separate discussion from the markets. Like you can have these views. You know, that's where people get upset is like, oh, I can't believe you said like, you know this. And it's like, well, that can be, you know, you could be long semiconductors or something, believing it's not good. But anyways, like, that's what happens is when you got these, like the middle class, like, that's. How do you get ahead? Like, I was having this conversation with my brother who's a physical therapist, and he's like, dude, man, like, you have

Felix Jovan: to go to school three, four years

B: after undergrad for this. You come out like all real jobs. There's no way to get ahead. You have to. And I was explaining to him, Tyler, what you kind of say is like this, there's never been a better time to swing for the fences with an entrepreneurial idea startup business because you sort of have nothing to lose. It's like you're working for the man and you can never get ahead. You talk to, you know, friends. Felix, you're, you're in my age, Tyler. I'm sure even your age, like, people just, they like, I'm nowhere near where I should be savings wise, can't afford a home. And so like, yes, okay, cool. You can melt your brain on social media all day and you have access to a smartphone and Internet. That's amazing. But your life sucks. You can't afford a home and start a family. So I mean, I don't know where you draw the line in terms of like, wow, this technological innovation is so good and we're making 10 people so rich.

Tyler: Well, wait, hold on. I do have to. I'm gonna play more devil's advocate. There's these guys I read you gotta sign up for this newsletter. And this is just. They came, I met them in Austin like probably a year ago. This guy's named Stephen McBride and Dan Steinhardt. They write this thing called the Rational Optimist. And all they go, they go around to like all the cool entrepreneurs in America and around the world and they just talk about their companies and there's like these people doing incredible things. So like they're, we're talking about like on the macro, I totally agree with you. Most of the policy just, you know, annihilates the lower and middle income people. And there's a major skills gap that like, we need to like, figure out from a policy perspective. But there are people really doing incredible stuff that like, will grow the economy in like the right way. And if you want a shot of that, you should, you got, you guys got to subscribe to this, this newsletter. It's like they do it not, it's like weekly, I'd say, but they, they go through the coolest people and they have the greatest, greatest stories solving like great problems. And there's, there's guys building like cheaper ways to build housing. There's like autonomous robots that can like create construction or essentially like make the cost of actually building way lower. And if you look at like San Francisco and all these other places, it's like 100 grand even like break ground and there's no supply. You have to pay like 500 grand to even do anything. And so there's a lot of those problems actually being, trying to be solved from like, I think new entrepreneurs.

Felix Jovan: But that's why my point is like, I completely agree with that. I'm, I'm fully in the optimist camp. I think, I think this is incredible. But I, I believe in like equal opportunity, not equal outcome, but for people to have the opportunity. And if you get to this point where, you know, anthropic and, and these model providers start to king make, who gets access to the models? You, you are, you are hampering that opportunity for entrepreneurship and creativity where it's like, okay, if you're part of, if we deem you worthy, you get access to Mythos. If, if you, if we don't deem you worthy, you, you get fable. And dude, you can't even ask these things. These models Now Bio Biology, 101 questions. Like, there's people asking, like, is the mitochondria the powerhouse of the cell? And it, and it stops the conversation it's like, literally, like, like, okay, if you're, if you're part. If you get Mythos, you can ask it anything. You can discover new protein folding innovations, but if you're not part of that crew, you can't even ask it if it. The mitochondria is a powerhouse of the cell. It's a, It's. That's. That's where I get really concerned.

B: That's like, that's insane stifling of innovation. That, like, goes against everything you t. Like you basically said to.

Tyler: Well, you know, on the precedent thing is like, when, when large institutions become bureaucratic and full of red tape. Like, look at what happened. And, and they actually gaslit the entire population on a lot of, like, they were hiding truths from social media. You were actually, like, looked at as a conspiracy theorist if you actually said it during those times, they literally withheld, you know, real true information and there was a bureau of, like, truth. And you're like, okay, there's not a good precedent for things get too big and the wrong people are in power. So from that perspective, it does make me nervous. I just hope, yeah, there's enough good in the world where people.

Felix Jovan: One last thing I'll say to play devil's advocate to devil's advocate to devil's advocate is that I will want to give credit props to the Trump admin and David Sachs for handling this AI thing because David Sachs has been ringing the alarm about Anthropic playing regulatory capture around these things, and he's been quite concerned and he's obviously been the AI czar. So they are ringing the alarm bells around this idea of what Anthropic is doing. And maybe the other models, like, maybe OpenAI is doing the same thing as well, but they are concerned about this. So I do give them props that land in the plan on all these nuance, because the other side of that discussion is like, yes, we don't want the average person to have this, like, AGI model that can develop a bioweapon. I get that. Like, we don't want that either. So we gotta land the plane. And I, I do want to give them props for, for thinking about these things in a nuanced way.

B: I mean, also, like, take a step back here. It's kind of batshit crazy that Trump, which we know, he's like, he's just an opportunist. He's not a Republican or a Democrat. He took Bernie Sanders, you know, we've been talking about on this show, the Horseshoe, you know, Trump's close to Bernie. He took Bernie Sanders idea off the shelf, off the rack of taking stakes in the AI companies. Like I haven't seen that talked about anywhere. And it's kind of funny because I saw that from Bernie Sanders and then I saw it from Trump and there was no middle ground.

Tyler: No, it's the unit party, so 100%.

Felix Jovan: Yeah.

Tyler: I mean, same policy. They all have the same incentives, bro. At the end of the day. Yeah, keep centralizing until you cause a revolution.

B: I don't want to see the government get any bigger, I want to see it get smaller. And I'm super, you know, have libertarian leanings in, in many of these instances. But what they're a lot like, yes, they've sort of handled. On the one hand, maybe they've been raising the alarm bells about these safety issues, but on the other hand they've been just exacerbating the problem and cucking the middle class harder than ever on their economic and market financ fiscal and monetary policy. So like they're doing everything. If you wanted to drum up, you know, huge unrest and civil problems, like they're, they're writing the perfect playbook.

Tyler: Pretty much.

Felix Jovan: They got a, they got a lot to figure out from June until this midterms election. I guess that's the point of this whole discussion.

B: Yeah, it's interesting because they just, it's. They, there's. Of late, there's no, there's no, you know, leanings off of the path. Yeah, that too. But there's no leanings off the path of just purely pumping markets, like coming into this year. In January and early Feb, there was all these populist measures announced, the credit card rate caps and the mortgage stuff. And it looked like, okay, this was going to be like a classic midterm year where you sort of put the markets as your second or third priority and put the populist base as the first priority, like to win votes. And I don't know, it's weird. I just am surprised that we're five months out and they're just like that. Them chilling. Yeah, just keep pumping the markets. Even if, even if these people get screwed along the way.

Tyler: Like, look, look what happened in la. It doesn't matter. It doesn't. There's no elections. Who cares? You know, until the boomers, like actually pass. No offense to. I love them, you know, they did a lot of great things, but like, there's just no hope of, of battling that, you know, especially as they get older and their boats are manipulated.

B: I mean, if you have your tin foil hat on. You have to be thinking something of the manipul. Like they've shown an endless appetite to manipulate anything they can. Right? I mean, market, like literally every single outcome possible. Like, why would they not be, you know, devising a plan to do the same for elections? Because you're looking at this situation, you're like, none of their actions align with what someone would do to increase their odds of winning the midterms. The Iran war. One of the most unpopular policy things they've done, raising gas prices 80% at the pump, which is correlated, inversely correlated to midterm success. Like, all these things, like, you're like, and I'm not saying I have an answer, I don't know what the answer is. I'm just observing, you know, the answer

Tyler: is, and you gotta use their, you gotta use their incentives against them and try to, try to front run everything they're gonna do so you can stay ahead of the, the monetary dilution and inflation. That's the only thing we can do as, and, and try to like, when things get too frothy, step aside and have patience. And when they, you know, buy back in, when you know, the blood is in the streets and then the nominal growth needs to kick in again. Like, I think that's my only, that's my philosophy right now is like, try to be, have as much agency as possible and, and belong with things that you know you can and you believe in and that will actually help society instead of all the nonsense. So that's, I don't know, that's my,

B: my, I'm a very optimistic person. I just see things for what they are. But honestly, my day to day, I'm one of the most, I'm, I'm so bullish on life and everything. I just see this stuff that smile, baby. Yeah.

Felix Jovan: I think, I think we're just nuanced people that care about this. I don't know.

B: That's why I'm levered long so for futures. Because I think if, if, if you're super bearish on Trump, I mean, which I think he's master manipulator. So like that's not necessarily the case. You know, things go to, they cut, I think hawkish expectation. Because there's the other thing here that is like to win in that trade, we're nearly or before today's pump, we're about two hikes priced in by next year. So it's not even like you have to get a cut in July or next week to win in that trade. You just don't have to get two hikes by mid next year. Yeah. So that's what's most interesting to me.

Felix Jovan: I'll stay out of the great.

B: The Semiconductor Casino until. Until.

Felix Jovan: Yeah, leave that to me.

Tyler: Love it.

Felix Jovan: All right, guys, that was a good one. Enjoyed the discussion. I had to get my rants out there about this whole anthropic thing, so I appreciate you guys listening.

Tyler: Oh, yeah. Love it.

B: Dude, you're the Quan, so you gotta keep us informed on the.

Felix Jovan: There you go.

B: It's crazy, man. Things are happening fast.

Felix Jovan: Yeah, big time. All right, guys, have a good weekend. Appreciate you.

B: You too. See you, boy.

Tyler: Fell.