Transcript was automatically generated.

0:00:02 – Announcer

Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.

0:00:16 – Frank Curzio

How’s it going out there? It’s September 11th. I’m Frank Curzio, Wall Street Unplugged podcast, where we break down the headlines and tell you what’s really moving these markets. Sad day, the anniversary 9-11. It’s one of the saddest days, I can say, the history of our country, but definitely in our lifetimes. In my lifetime and being a New Yorker knowing people that died there, yeah, just every time, you know, I remember September 11th.

I try to be optimistic because I visited that site two days after it happened and I mean the scene is, it’s indescribable. I wish I could describe it for you. It’s indescribable, I wish I could describe it for you. Just the rubble, the smoke coming out, the search for people. But the one thing that I take away from that as positive is the unity and how all stores and restaurants open free food. People are coming from all over the country, even all over the world, to help. You know just this unity, which was amazing. So, um, you know, we always say never forget. It’s a big day, especially for people who live in New York and for everyone, right, Americans, everyone around the world. But, uh, yeah, I just want to start out with that and say just never forget. And um, yeah, it is a sad day and uh yeah. So uh, hate to start the podcast off like that, but we’ve got Daniel Creech on what’s going on. Buddy, how’s everything?

0:01:45 – Daniel Creech

Hey, what’s happening Frank? Yeah, it is a rough day there. Prayers to family and friends and everybody who lost loved ones on that day. That is a bummer. On a lighter note, Frank, I’m going to start taking a boat to work on my commute because it’s going to rain every day, evidently down here. I know we live in a swamp but we normally don’t get the dreary overcast all day, rain off and on. I don’t know how many inches of rain we’ve gotten in the last week. Three weeks.

0:02:11 – Frank Curzio

It’s rained every day. In the past three weeks it’s serious rain Every single day. In the past three weeks it’s I mean, it’s insane and it’s easy to keep track, because it’s three weeks, because I’m getting my driveway. I’m getting it sealed no, I’m getting it sealed and the guy’s like I gotta come. When it stopped raining three weeks ago, he’s like I just need to stop raining for a day, day and a half, and it has like every day, and it’s it’s pouring some of these days. It’s not like this light drizzle away.

0:02:35 – Daniel Creech

Yeah it’s not going to either. It’s it’s wild. So yeah, I may uh, maybe the Curzio uh watercraft or something I know.

0:02:41 – Frank Curzio

I didn’t remain optimistic when every day you come in, it’s pouring out anyway. Um, we talked about the country and unity in september speaking of unity Frank let’s talk about the debate.

Holy shit, what a crazy. I mean, what were your thoughts on the debate? I think, man, I gotta tell you I think everybody, everybody, um, I’d like I haven’t seen the numbers yet, but I’d be surprised with 60. So I mean, everyone was watching it. Right, they were just because we wanted to really see it. But I guess we’ll start off with you and your thoughts and what you thought about the debate, because there’s lots of opinions out there. I have very strong opinions about it. But, Daniel, let’s start with you. I’m curious.

Who do you think won the debate?

0:03:15 – Daniel Creech

I think the major takeaway will be that the vice president won the debate last night. I think it went in stages. So when I listened to probably about the first 40 minutes last night, I went to bed because I’m getting old, Frank and I go to bed early and then I listened to the remainder of the replay on my way into work this morning and I definitely think that if you only listen to the first 40 minutes, she definitely won that round if you split it up in kind of three 30 segments. So she won the first 30 minutes. I thought he did better. In the second 30 minutes I thought he had a better closing argument, but I doubt many people stayed in tune that much longer.

I don’t think a lot of people watched all 90 minutes of this. I would be shocked. We’ll look for those stats. Um, I do think that it was hers to lose, meaning that she had a lot more favors and kind of tailwinds in her corner A. She was on a favorable network.

The moderators are very anti-Trump, but everybody knew that she’s also a woman. I’m not digging on any women out there, hold your horses. I’m simply saying it looks a lot easier and better from a national standpoint to see a woman talk tough to a man than it does a man talk tough to a woman. So there’s a lot of spitting pieces there, just like on this podcast, and I’m guilty of this, Frank, you understand this. You prepare, you have ideas, you think of how it’s going to play out and how it’s going to sound. You get not lost.

I thought both of them did pretty good. They both went on little rabbit trails, as everybody does, but I do think he missed a couple of key points. To really drive the nail home, however, it’s very hard to nail down somebody that doesn’t have any policies and when you don’t really stand for anything, it’s easy to deflect blame and all that. Cnn’s out with 63% of the viewers voting viewers, Frank. They make a quote to say that that Kamala vice president won the debate. She is seeing a small surge and actually a pretty large surge on the betting sites. We’ll see how that goes, but I want to ask you what you thought of the debate, Frank, and I want to then dig into sectors about if Ms Harris is going to be the first president woman president, you know I don’t.

0:05:21 – Frank Curzio

I view this as it’s almost like when you see a brand new pitcher come out and pitch for the very first time in the pros Baseball. In baseball I’m going to use a baseball analogy here and usually that pitcher does fantastic because you don’t have the playbook on him. And then once you get the video and a playbook, you start learning his weaknesses, you start really learning his best pitches, you start learning his tells. When you have a candidate that basically has no policies, okay and who flip-flopped on everything which we know just watching TV right, everybody knows that and going in, when you’re going against someone who does so many campaigns and you know exactly how he’s going to respond to every single question, the Democrats did an unbelievable job. They really did an unbelievable job preparing and if you think that Kamala did not win that debate, you just have to look at Truth Social and that stock which is down 20%. If you think otherwise, okay, she clearly won that debate. My four takeaways or that’s one of the takeaways other takeaways and I’ve had four of them is ABC showed the world how biased the media is if anyone was questioning, because I feel like sometimes we really don’t realize that, despite debating three people last night, which Trump did and everybody clearly saw that he should have been more prepared and missed a ton of opportunity. My last point is this did not sway anyone.

I think this was a big debate for Donald Trump because, look, the Republican side gets it. They understand there’s no policy over there. They feel like absolutely, things are much better than they were four years ago than they are now on almost every single metric. I mean, you can look at the economy, you can look at inflation, you can look at safety and wars and stuff like that almost every single metric. I think he had a chance, because when I look at a Democratic Party, I think there’s moderate Democrats that look at their party and say holy shit, we are way, way over to the left and you have a little opportunity and that’s all you need to sway those. And he lost that opportunity just then. Not over by any stretch. I don’t think anyone would sway, but I wish I coached Trump for this debate, because whoever coached Kamala should get a million dollar raise.

I mean, she baited him perfectly. She baited him perfectly and he fell for it right when she said people leave his campaign rallies. That was, people didn’t even leave his campaign rally when he got shot. When he got shot, when he got shot, there was snipers on the stage and people weren’t leaving right. So you know, right away he fell for that. He, uh, taking a jab of wharton specifically. We know you create these economic things, you know, because economic people, they said this. He, she specifically said warren, because that’s where he graduated, that’s his college, right away, you know. So he started getting angry. I would disagree. I think he did well in the first like 20 minutes and then he kind of came off the rails a little bit and at the end his closing statement was good, um, but no, but do you think anybody saw the closing statement?

Yeah, I think a lot of people say Tim for close a statement because I thought there was interest there. But when I look at ABC and the bias, even with that, he needed to drive home certain points. I will say this about ABC If you’re a moderator because it’s such a shit show if you’re a moderator, right, your job is to ask questions and let these guys go and then moderate it like control the debate, make sure the timing and stuff like that, like no one’s going over, and make sure everyone’s. Your job is not to fact-check one candidate and not the other. And not only that if you’re going to fact-check, make sure you’re right, because they weren’t right when they fact-checked. It’s almost like they had the questions, they knew what Trump was going to say and and they made sure they had the fact check there because they knew what he was going to say. They knew exactly what he was going to say, right, which is terrible.

They did little to talk about the economy, corporate taxes, no tax on tips, something for me what I think is big is every single Democrat voted Every single Democrat voted that men are able, and transgender are able, to compete against women. You know, and I would say 90% of the population in America do not agree with that, and especially women, and you want to appeal to that right? So when I look at the fact checking and the things that they were saying about late stage abortion, they were wrong when they fact checked, right? The corrupt FBI? Right. They were saying, like you know well, the FBI said crime is not going up in the US. There’s no statistics on that. Then why the hell are we seeing mass migration from every major city? Why are people flooding into Florida? Why are people flooding into Texas, right?

So despite that, trump had the opportunity to come back and he didn’t do it, right? I mean, when she said that Trump wants to change the Constitution, he’s a threat to the Constitution. Bring up how she wants to expand the Supreme Court. You had a threat to the Constitution. Bring up how she wants to expand the Supreme Court. You had a chance to bring up that. She brought up really quickly, but kind of let it go. She became the nominee with no votes. She wants to take guns from people. So there was ways to really spin it. When she said guns, she has a gun, but she wants to implement mandatory gun buybacks. You had to know the facts.

He needed to ask her why she was flipping a fracking. They asked her really quick and she pivoted immediately. When it was his turn to speak, he should have said could you answer the question? Because we’re in Pennsylvania, which is the swing state. Both of them say that need to win, to win the election. We need to know are you flip-flopping? Why did you flip? He should have said it.

Right, you saw the bias there, the geopolitics. It should have been a layup for Trump. I mean, look at the wars that we’re in, right. And she was like well, you know, I met with Zelensky and went to Europe. Okay, well, you did that. I would have said you know, why didn’t you know you’re visiting Europe and Zelensky more than you visited the war? The wars are For immigration. Why weren’t you there?

A major, major point which she said. I think he could have really crushed her, because I think this is his strong suit is talking to other nations and people fear him. He’s right, he’s a great negotiator, probably why we weren’t in any wars. But she said that she didn’t meet with Putin. That was a very, very big point. You want peace. People are really because you want peace. People are fucking dying, right, you want peace.

Ukraine had the chance right away to prevent this war. There was a peace agreement on there and now any deal now is going to result in much more Russia’s favor. Right, because they’re winning that war, no matter what anyone tells you. They’re really winning that war. But the fact that she said she didn’t meet Putin means how could you stop this war if you don’t meet both sides? And you’re never going to come to agreement if you’re not going to meet both sides and sit down with them. The fact that she never met with Putin was huge. I think she could say how could you ever solve this problem if you’re not meeting with both sides?

Afghanistan I thought that’s the immediate pivot, no matter what Afghanistan’s immediate pivot. Right, because that was a disaster. I think most people agree with it. What happened? And yet she didn’t even pivot. She actually bragged about it and Trump had the opportunity to say the military to me is the most sacred thing in the world.

I feel that way and I’m probably a little biased, because I just went to the National Security Conference and the War College Soil colonels, graduate lieutenant’s, graduate to colonels. These are people that don’t give a shit who is president. They do their job. They don’t want to thank you. The reason why we’re able to watch this debate, the reason why we have all of our freedoms, are because of these people. Right, it’s sacred, and there’s 13 people that died with the Afghanistan withdrawal, which was a disaster. She hasn’t even visited these people. She hasn’t even like, said I’m sorry. She hasn’t even said listen, you know, sorry for your loss or anything. You know he could have drove home that point. Even when it comes to immigration, instead of all these people flooding them, go personal. Talk about people. We know how. There was illegal immigrants that have raped people, that killed people. You could have gotten more personal, so he didn’t really do a very good job.

On abortion, she said how nobody should tell a woman what to do with their body. Yet your government told tons of women, nurses, all kinds of people you better take the shot or you’re getting fired. They mandated it. You told them what they needed to do with their body. Let me tell you something about those statistics. They’re published. They’re published. The statistics are people who took that shot who are dying right now, who are getting sick right now. There’s no drug in the world that doesn’t list all the fucking effects they have, except for the fucking vaccine. Let’s get real. They’re published but they’re not publicized.

Okay, so you could have gone into that part a lot more with COVID, but the first 15 minutes I won. I just thought that they did a very, very poor job. Abc, because we want to know more about the economy, we want to know about key issues. I thought he did a good job with tariffs the fact that I created tariffs. You guys hate them, but yet you didn’t take it off because we’re making so much money off of it, right? I mean, I thought he did a good job there.

But this ABC, I thought, was an absolute freaking disgrace. It was a disgrace. Just ask them tough questions. Ask them questions. Americans want to know. We don’t want to know about the racism, we don’t want to know about dogs and stuff like that. And again they had the perfect stat to well, we just reached out to this person, right? That was very strong for the Republicans, because I think Republicans believe.

Again we see it with the media and Justice Department going after him and this is clear that this wasn’t a fair debate. There will not be another debate. I mean Harris is crazy to debate again after this, but I think she’s getting a bump up, but I don’t think it’s going to hurt his base at all and I don’t think he did anything to persuade, when she had an opportunity, moderate Democrats Because even Bill Maher talks about freaking. How far left are we? This is insane, right? I mean you’ve seen Democrats come out. This is insane what we’re doing with DEI and handing money to people and stuff like that.

So when I look about this, when I look at this, it’s I think he failed. I think he wasn’t as prepared, I think he was caught off guard and to me, he clearly lost the debate. I mean, even with January 6th, when she said it’s the worst attack since the Civil War. I mean it’s a fucking joke. I mean 600,000 people died. One person died there on September 6th and you did it on the anniversary of September 11th, where 3,000 Americans died. You had 3,000 Americans die. You had the opportunity to say, really, that is the worst attack since the Civil War. I mean, now you could have brought up September 11th and brought that into your favor. So they knew exactly what he was going to say, they knew how to trigger him and it’s hard to attack a person who really doesn’t have any policies right now? Nobody knows. So I think, for the American people, who are really in the middle, they just wanted to know more and I don’t think they got that, which is sad, because we should be able to get that, we should get an honest debate and there’s no way there’s going to be an honest debate or anything. I thought CNN did a great job the last debate.

But why am I so focused on this? Why am I looking at all these details? Because it matters. I mean, look at some of the stock. Look at the stock market. Today the stock market is coming down a lot. Why? Because it’s going to be. Harris wins more regulation. You’re going to see less deals get done. You’re going to see solar stocks are on fire right now. You’re going to see energy. Energy’s going. Why energy is going higher? They say well, because of the hurricane and stuff like that’s coming in. Francis said well, not necessarily because if you’re really going to cut production like they did for three years and kind of open it up the last six months because oil prices went all the way over 80, but if you cut that, it’s going to result in prices going much, much, much higher. So you’re seeing oil go higher. So the market is impacted with this and seeing his true social platform.

If you think that he won the debate and you’re biased or whatever I don’t want to be biased at all His stock would not be down 20%. I mean it was leading up because they thought he was going to win that debate. He didn’t win the debate. He didn’t have a good day. I don’t think it’s going to hurt him as much in terms of people not voting for him because of this, but we’ll see and let’s see if Kamala starts going around campaigning doing interviews she still hasn’t done interviews.

If I was Trump, the best thing for him to do is go on every single influencer’s platform. Everyone will have him. She will not do that because that’s an unbiased thing and they’re going to ask her real questions and she’ll never answer them right. That’s the point of this. This is why she hasn’t spoken to the media. That’s why she hasn’t gone out there. That’s your advantage, because these social media platforms have not millions, but tens of millions of people on them and you can go literally to over a hundred of them and if you’re doing that, that’s a significant advantage.

But overall, when I look at what’s going on with the market and stuff like that. I just you know, I think it’s clear that he lost that debate and he didn’t do himself any favors. I know it was three on one, but he could have did a lot better job in terms of preparation and knowing what she was going to say, because, put her feet to the fire, she didn’t answer any questions of all the flip flops, all the policies, of everything she’s doing. And he had that opportunity because ABC was not going to fucking do that, they were not going to ask her those questions. But he could have just asked them or said you know, answer the question, I’ll come in and answer the question. He just highlighted it because I think a lot of people wanted those answers.

0:18:00 – Daniel Creech

Yeah, well, Frank, we can want something and wish in one hand and one the other. You know what I mean. Hey, markets are selling off hard. Dow’s down over 1%, s&p’s down one and a half, nasdaq’s down one. Gold is down, Frank, everything’s down, hey look at crypto.

0:18:15 – Frank Curzio

Crypto’s selling off tremendously too. Oh, absolutely, and I love that. Mike Novogratz is like yeah, you know she’s great. Let me tell you something about Mike Novogratz. I’m going to be honest with you. Frank’s fired up. I’m going to be honest with you.

0:18:24 – Daniel Creech

Just a minute. Novogratz is Galaxy Digital’s CEO, big crypto play that I have been a fan of and we’ve recommended.

0:18:29 – Frank Curzio

Let me tell you something. Now you go If he endorses and he’t know how I could do it, because you have Elizabeth Warren, just totally like crypto’s dead Gensler crypto, attacking you. We’re going after banks illegally If he really supports this party, there’s not one person in the world that should own his stock or have any money at his company because, basically, his company is going to crash. Okay, now we may see a flip-flop, because we saw more money coming into super PACs from crypto than any place else, which that’s really surprising Democrats, and that’s why they held the Kamala for crypto. Did you see that? That webinar event, kamala for crypto? Now, because of the money, and we know that both sides of politicians, both sides I don’t care who you are money is more important than their mother, than their families. They’ll get in, they’ll shoot their mother in the head for money. We know that. We know that from both sides. That’s the way that they are. That’s all they care about. And to see the amount of money coming in from crypto. That’s why you’re seeing a big footfall from Democrats who are against it. I do think that would be favorable on crypto because of the amount of money that’s coming in anyway, but crypto is selling off. So you’re seeing this impact a lot of sectors.

I just think, when I look at this debate and this is the final thing I’m going to talk about it’s very simple. It was very simple for Trump to say for 85% of Americans maybe 90%, the 10%, the rich you got to exclude them. But for the middle class, lower income people, is your life better today than it was four years ago? And there’s not one data point you could point to and say, yes, you can’t point to inflation. Inflation is up tremendously. We talk about that because CPI just came out and all the headlines are like look, this is the lowest inflation, holy shit, we’re going to tackle that in a second.

You’re looking at crime rates in major cities, right, I mean just safety, taking rights out of parents for their kids and stuff like that, transgender and stuff like that and pushing the age. There’s no data points that you can look at that say, yes, things are better right now for the majority of Americans than they were then. And Trump had the chance to drive that home and he drove it home in the last two minutes of his speech, which I thought was really late. You could have just kept pounding that and pounding that, but you’re seeing the difference in impact stocks. That’s why we have to talk about this stuff and we have strong opinions about it. But you’re seeing the reaction in the stock market and a lot of that has to do with the results from the debate last night.

0:20:48 – Daniel Creech

Before we get into more stocks and market reaction, Frank, let’s talk about this. Better off now than four years ago? Cpi data came out, Frank. The big headline is CPI is only rising at 2.5%. That’s the lowest level, Frank Lowest level Since February of 2021, that’s a big deal. That’s a good headline. Core remember to think of core as stripping out the unnecessary things that we don’t use in our lives, like food and energy. And that is up 3.2%. That is unchanged versus last month’s in July. Frank. Taking away from this, do you think? I know you don’t think anybody’s better off, but the big takeaway here is we have the Fed all guaranteed to cut interest rates next week. The market’s basically saying, hey, they’re not doing 50 basis points Now, they’re only going to do the 25. I personally think that’s a good thing. I want your opinion on that in just a moment. But did anything shock you in this report?

0:21:45 – Frank Curzio

What shocks me is the headlines that are coming out and how political they are, and we got to stop that shit, because you can’t say inflation is. You’re right, inflation is coming down, but when you really look at the numbers, if you strip out food, energy, it’s up 3%. We still have a three-handle on it. So the headline was great because that was a two-handle 2.5%. If you look at prices, they’re up tremendously, tremendously. They’re up over 20%. They’re up 22% and this is the CPI. If you look at the CPI, people look at the percentage and that’s what gets highlighted, but there’s an actual number. So the number of the CPI, which is an index, it was 257, is the number, and this was at the last month and this was at the end of December in 2019. And it’s 314 today. That means prices have gone up 22% for Americans, right? This is an immediate tax on them, right? You can say, well, wage growth has kept up a little bit, but not really, and instead of coming down, it’s still fucking going up. It’s going up by 3%, right? So if you’re looking at it and you’re cheering this number, prices are still going up. They’re still going up.

And you can say, well, a lot is rentals. Well, that’s because you fucking the way you structured that index is to make sure that it’s very difficult. Why is rental income? Why is housing over 30% of the CPI? Really, why is it over 30%? I mean, we know what rentals? Right, because they revised it so many times. They revised the way they calculate the CPI, but if you’re looking at rentals specifically, they made it more of a component, because rentals almost never go up by more than 2% annually, dating back to the 80s, and that’s why they changed it.

Even when we saw housing prices rise tremendously, dan, we saw the housing price rise tremendously, leading up to the credit crisis, and even during that time, housing prices rose, rentals were only going up like 3%. We didn’t see 8% 9% increases year over year, like we saw in 20, what is it? 2021, 2022, right, when they opened up the economy, we had this massive inflation, so that’s stumbling high. But to really have headlines like, hey, this is great, inflation is coming down, you’re doing better. There’s nobody I don’t know anyone really, even if you’re listening to this that can honestly say that the economy is really strong right now and it’s great, it’s dangerous.

I mean, we’re looking at CPI data, we’re looking at PPI data tomorrow. And then we look at jobs data in the jobs market. These are lagging indicators, guys. These are lagging indicators If you look at the jobs and how much they’ve been revised. It’s a fucking joke the way they calculate this shit. It’s a joke, it’s a disaster, you know what.

But let’s look at a leading indicator which came out two days ago which nobody’s really paying attention to. It’s the NFIB Small Business Optimism Index. You probably never heard of it. It came in at 91.2 versus 93.7. And you might say, okay, well, that doesn’t look that bad, no big deal. That’s the largest amount it fell by in two years. This is a leading indicator. This is how small businesses feel. This is how.

If you look at the Beige Book, guys, if you get a chance, it’s probably the most boring shit in the world, but really we highlighted some of it. If you break it down by state and what each state is saying about unemployment, how they’re not going to hire, how dangerous it is out there, I mean it was disgusting, the Beige Book. It’s disgusting. The Fed has to have access to this. So your point, Daniel, of it’s going to be 25-50. Does it matter?

50 might signal the Fed’s a little nervous, especially after we just saw the banks come down yesterday, which we’ll get to in a minute. I believe they should go 50 basis points. There’s all the evidence there. We’re seeing it. The bond market’s telling you to go faster, but they’re probably going to go 25. That’s a consensus. They might do that and then whatever.

But either way, you’re going to see rates come down and I think if they do 25, I really think that they’re going to do 15 November, despite the election, despite all that crap, because I think you’re starting to see the deterioration in the economy. You’re really starting to see it and it’s happening fast. I mean NFIB, that optimism index. You’re seeing things change on a dime right, even the banks with Alec Financial. We can get into that now. But looking at what the Fed’s going to do, I think a 25 basis point cut is likely. Now. They should do 50. They’ll probably do 25. And when they do it, I think you’re going to see the market actually sell off on the news. It’s going to be muted and it’ll probably sell off on the news, depending on how much we come down today, because we’re starting to really sell off now. It might be oversold going into tomorrow, but let’s see. I mean, let’s see what the Fed does. I think it’s going to be a 25 basis point cut, but they have a lot on their plate now.

0:26:10 – Daniel Creech

They really do. What shocks me and is not funny haha, but it is funny irony type deal is that now markets are going to pull back. Markets can pull back A lot of volatility, a lot of algorithms. There’s a lot of noise there. Stocks trade five days a week, no big deal. If the CPI would have came in much weaker then I still think we would have seen a sell-off today. Because it’s just funny how nervous investors are in the Mr Market. You go from being nervous that the Fed is too far behind the rate-cut cutting cycle and you need a 50 basis point cut to now you’re disappointed that they’re only going to do 25. So now we’re going to sell off and throw a little tantrum and stuff like that. That’s fine, no-transcript. The revision in jobs you talked about, and then what I want to get to here we’re going to get into the banking system.

I understand Ally Financial yesterday dropped about 18 to 20% because they’re at a conference and they warned about delinquencies going up, default rates going up, net interest margins and credits going down. But, Frank, what stood out to me and don’t get me wrong, the jump. What I liked is they said hey, versus our own expectations, okay. So auto delinquencies soared 20 basis points. Net interest income dropped 10 basis points versus our own estimates in the last two months. That’s significant, but the reason they said is because of a hurting consumer with high inflation. No offense, we all know that, we can feel that.

But what stood out to me is, he said, because of the recent weakening in the labor force.

It stood out to me is, he said, because of the recent weakening in the labor force. That is why and I think you’re spot on with the 50 basis point coming in November or even October if those guys meet in October because it’s the rate of change everybody’s worried about and while unemployment’s up about a percent, 1% year over year, the majority of those gains have come in the last few to six months and I think that’s what’s going to scare everybody and that will cause markets to go down and that will generate incredible buying opportunities, because we’re not going to fall forever. We might have a significant pullback, especially if the market really thinks which policies although we don’t really know a whole lot of policies will take a hold. But you can clearly see the reaction to the Fed, the markets and the upcoming data. But I do think I’m getting very excited on a pullback for markets in general and I think this is going to play out very well for investors. That can be just a little bit patient.

0:29:03 – Frank Curzio

Yeah. So Ally I’m quoting here said borrowers are struggling with a high inflation and cost of living and now, more recently, a weakened employment picture. Okay, that’s a quote. So the stock did get nailed. One thing, one point I want to bring up is on September 3rd, right, Goldman Sachs who’s, you know again, is the premier bank did it perfectly right. They removed this name from their conviction list. Nice timing, but the writing was on the wall with this company. I mean, it’s a stock. You can see last quarter, which was July, mid-july I think, they reported they said that ProVision’s credit losses increased to $457 million, reflecting higher net charge-offs. That was last quarter, what they said. Right, so they see the deterioration.

But I think when it comes to the Fed, they underestimate the speed at which consumer sentiment can change. And it changes on a dime, like boom, boom, boom. It changes on a dime and you’re seeing that happen. You’re seeing a lot of people close their wallets. It’s no coincidence. It’s almost every single company, even the ones that are doing good, even if you look at the Walmarts, the Targets, the Roses, the Burlington’s, the Costco’s, they all said that you’re seeing a change in consumer behavior. They’re telling you that where they weren’t that aggressive with that even a quarter ago, and especially not two, three quarters ago. You’re seeing a change very, very rapidly. The costs for everyone are going up. Insurance costs are fucking a joke, healthcare costs are effing a joke, it’s just the cost of these things continue to go up and hurt consumers and they’re starting to close their wallet and a lot of people.

I mean listen, if the dollar stores aren’t a tell. I mean, these are people with the average income, whatever it’s. I think I heard $35,000, $40,000 a year, whatever it is. These are people. They’re not shopping, they can’t even afford to go to a dollar store. So you’re seeing it. And now what’s going to happen is it’s going to go up the ladder of the middle income, which is this big demographic? Right, but it’s going up. It’s going up. Obviously, if you’re at the top of the middle income, I think you’re worth like $2 million. Now that’s how high the middle. It’s anywhere from 2 million to making probably $50,000, $55,000. It’s crazy how big the demographic is. So people just talk about the middle class like it’s just one. You know it’s either good or bad. There’s a huge amount of people, it’s the biggest demographic, right, so you know.

And then I see JP Morgan’s. Their president, Daniel Pinto, yesterday said their earnings estimates are too optimistic. Net interest income would fall. As you know, the Fed begins to cut rates, expenses are going to be higher and JP Morgan got hit and the whole banking sector got hit pretty hard because you had this news.

And what do you think of when it comes to sentiment? Right, when it comes to sentiment, you’re like holy shit, here it comes with the banks again. Before you get there again, and you should. I don’t blame anyone for thinking like that, you should. I mean, I remember September 11th day, when they first opened up air travel again and airplanes. I’m not even kidding you. I mean, when people saw airplanes, they stopped and were scared and thinking they were going to freaking crash in front of them. I mean because that’s how crazy it is, because of that traumatic event that just happened, right? No-transcript, by the way, if you think the banking sector is going to, the stocks could fall. The stocks could fall here.

But if you’re worried about a banking crisis, I’m just going to share a couple numbers with you. Morgan will generate over $51 billion, not in revenue, in net income, this year, on revenue of $170 plus billion. That’s up from $35 billion in net income and $126 billion in revenue from just two years ago. JP Morgan is fine If their estimates come down or they think people are a little overly optimistic big deal. Maybe it’s not $51 billion. Maybe it’s $49 billion in net income you generate.

These banks have never been stronger in history. Their balance sheets have never been stronger because of the rules in place and how much they have in capital that they have to keep on the balance sheets. They’ve never been stronger. There’s no threat. You can’t tell me a company is generating 51 billion in net income and if you look at the four banks and net income, could estimates come down? Yes, could you see slower growth? Yes, as interest rates go higher, net interest margins are going to get hit. This is free money to the banks and even now, today, it’s amazing because if you look at the major banks and most banks out there, what do they pay on their checking accounts? What do they pay on their savings accounts? They pay shit. Even though interest rates have gone up tremendously, they still pay you shit in most accounts. So don’t worry about the banking crisis or whatever, but sentiment-wise, that’s what people are going to default to and that’s why you’re seeing even a further sell-off in banks today.

So could we pull back further? Absolutely, we know there’s stocks that are expensive. To me, it was always mind-boggling how we had a 1920 P on stocks, which is fine Overall. If you look at history, that’s very expensive. That’s a very expensive multiple. However, it’s not an expensive multiple when interest rates are zero. Interest rates are no longer zero. Interest rates went up tremendously and now we’re trading at a higher multiple. We should be trading at 18, 19 times forward earnings. That’s fine, but if we see the pullback, there’s going to be lots of opportunity, especially if interest rates come down.

What do we know about pullbacks? They happen right away and then we see this big ramp up because the government’s afraid to allow a recession. I don’t know the playbook for that is never, ever, allow a recession ever, even though that’s a normal course of business. It happens every. I believe every five to six years, normal historically. We don’t allow recessions anymore because the government comes out and just continues to spend money and make sure it doesn’t allow the system to take care of itself If banks get over leveraged I’m not talking about the credit crisis.

You need to bail out there the whole financial system would have collapsed globally and we’d still have 40% unemployment rate today. But you’re probably going to see a pretty quick pullback and it’s going to be a good opportunity to buy because there’s companies that are definitely getting it done and there’s companies that are not and to be a good opportunity to buy because there’s companies that are definitely getting it done and there’s companies that are not and it’s going to provide a really great opportunity to buy a lot, a lot of great names in all the spaces in technology, in oil, in all this stuff. And then we’ve seen oil finally coming back. But what a sell-off in oil, right? I mean, that was pretty crazy.

0:35:06 – Daniel Creech

Yeah, I mean several factors there. Everybody’s worried about an economic slowdown. I understand that I have been wrong on the direction of oil. You can email me, Daniel@curzioresearch.com. Although several picks related to natural gas and oil while down are holding up very well, so I’m not fearful of that. I’m not being arrogant and stubborn. It is an election year. We’re very close to election.

The China slowdown in oil demand is a real theme. Production isn’t going through the roof Wars and rumors of wars. I couldn’t be more bullish on oil and gas here and in the short term. If the price wants to drop to 65 or even 60, that’s fine. What’s wild about that is like I said, I keep coming back to this simple chart. I’m a simple person is like I said, I keep coming back to this simple chart. I’m a simple person.

We’ve showed that graph from Statista several times. The only time oil demand globally dropped anywhere close to 10% was because of government forceful lockdowns of the economy and that was a 10% pullback in overall demand. So let’s assume and that’s not a very far jog. So if we’re at 100 million barrels in demand last year and we don’t go down near as much as people are anticipating and production isn’t rising as much as some people are thinking or fearing it will. What do you have? You have a balancing out and I think that those prices are going to be high. Especially, I don’t think it’s a coincidence and again, it’s all short-lived there’s an eternity between now and the election. However, if you don’t think the markets are reacting to both CPI data and the bump ups in Kamala Harris versus debates, I would disagree with that and that’s going to hurt some commodity prices in the short term, especially gold, bitcoin and oil, but those three I would continue to allocate towards no problem on that.

0:36:52 – Frank Curzio

Yeah, and look, whatever side of the aisle you’re on with politics, you want to make sure that you’re making money for your family, right? That’s, first and foremost, most important thing. We all have strong opinions about shit, but as long as we don’t see a clean sweep on either side in terms of Congress, we should be okay. In terms of Congress, we should be okay. In terms of policy.

I think it gets very, very, very, very, very dangerous if we see especially if we see with some of the policies where we want to give away 50,000 to homeowners, just hand them a check for new homeowners. Again, it’s not going to move the needle at all, it’s not going to do anything. I mean, there’s not a demand problem with houses, a supply problem, so we need more houses built. But as long as we see that, which is highly likely where we see a split government, we should be okay with a lot of these policies. But it is going to matter. You’re seeing a portfolio where you’re going to see more money pushed towards maybe alternative energy, less money where people might be fearful of crypto. Here I will say this I don’t know if you saw the news with the regulatory approval where they had with T0.

0:37:57 – Daniel Creech

Yep, I did see that.

0:37:58 – Frank Curzio

Got FINRA approval custody, one of the only-.

0:38:00 – Daniel Creech

FCC and FINRA approved.

0:38:01 – Frank Curzio

It’s FCC and FINRA approved to be a digitalized platform I think one of two companies. It’s fantastic news for us because we trade on that platform for our CURS token and I was again, I hate to say early to the party, because I really fractional ownership of stock, which is tokenization, is the most brilliant, greatest trend I think we could ever see. We’re talking about tens, if not hundreds, of trillions in assets. When you look at real estate and bonds of how this can impact, well, you’re providing a liquidity across the board. But we haven’t seen in the past few years but now that is a huge, huge deal that they got that regulation, which is great, and I’m hoping seriously, if we see Democrats and they win, I hope they look at the money coming into crypto and how many people love crypto. You need regulations. The greatest and best companies want regulation in the industry. They want it regulated because there is a lot of bullshit and you’re going to weed out the bullshit, but the technology in that sector and how it challenges the banks, which has never been disrupted by technology, ever right. You have this boys club of the four banks that can never be challenged. If you want proof of that, just look at New York Community Bank. New York Community Bank did nothing wrong. They were able to get assets from whatever bank it might have been Signature, I forget what it was, or Silvergate and they went over the $100 billion in assets and once they did, their requirements for the capital ratios increase. So they increased automatically, which means they had to take money directly off the bottom line to cover that and it looks like there’s a run on the freaking bank because their earnings crashed. Then the thing actually sold off. So they make it on purpose. The rules of the government. The rules of the government, which is one of the only industries this is allowed to, is we have four major banks and no one’s ever going to be able to challenge them. Crypto challenges them. It challenges the massive fee structures of these companies, where JP Morgan seriously JP Morgan $50 billion plus net income they’re going to generate Holy shit, right. All fees, net interest, all this crap, right. Crypto disrupts that market and seeing the money coming into that sector from the donations, from lobbying and things like that. Hopefully they take it a lot more seriously and stop illegally attacking this industry, illegally closing two banks the major banks that never did anything, illegally, telling every bank don’t ever do anything with crypto. We’re going to audit you. There’s actually tapes of this. This is called Operation Chokepoint 2. So hopefully you know when it comes to crypto and you see even gold get hit right Gold’s getting hit as well. So it will be interesting to see how this plays out.

But you have to have your portfolio structured correctly and right now you should have a little cash on the sidelines, because you’re going to see some of these names come down, a lot of stocks come down. It’s going to provide a great opportunity, because even the great names get hit in markets like this. Like an example, if you look at, amd is not an AI play. They’re not an AI play. They say they’re an AI play. They’re not an AI play, not yet. Maybe they will become one. They’re not. If you look at some of these other names Supermicro has come down accounting issues but yet if you look at Oracle, holy shit, did you see those numbers? Did you listen to the comments?

Daniel and I are going to break this down in tomorrow’s podcast and give you ideas of what’s going on with data centers, power and the story that nobody’s telling you. People are like, oh, we’re going to use a lot more power? You have no idea. Believe me, you have no idea. Wait until tomorrow’s podcast. Believe me, you have no idea. Wait till tomorrow’s podcast. Seriously, it’s going to be fantastic because the stats and the insights that we have and the context that we have in that industry it’s unbelievable of how unprepared we are in terms of data centers and the massive data center growth and I think when you saw Larry Ellison’s comments yesterday, it surprised the shit out of people. Thousands of these things are being built, how they’re being built, what these companies, the Mag7 companies, are doing in terms of where they’re building these data centers, how they’re perfectly structured, how the Gen4, which are now eight-story buildings these things are massive and the amount of electricity use where they’re going to get bigger and bigger. Having insight into that industry and especially doing a lot of research over it, it’s incredible.

We’re going to go over a lot of picks and go into the details and I’m sure we’re going to shock you because there’s things that really, just like we said with China for the past year, it’s like a depression in China. Everyone’s like, no, china’s okay, it’s okay, china is a disaster, china’s a disaster. And there’s sources out there that are saying, even with the troops. You have China. I don’t know if you knew this, Daniel. So you have China, where their military is now fighting in Russia. Does anybody know that? Does anybody know that? Do you know that China has troops that have just went into India? Does anybody know that? Right, so you look at how bad things are in China, the sources that we have. It’s great, this podcast, thank you so much. It goes out to over 125 countries. We’re now approaching 15 million downloads.

That network is incredibly powerful with the information we get and it’s awesome. It’s not about us having an agenda. It’s about getting the stories right. The contacts that we have help us out tremendously because this is real-time stuff. This is real. You don’t have to worry about the fucking news and all the bullshit that they’re going to tell you. We don’t have an agenda, nobody pays us. We’re fine. You know we’re going to tell you what we hear, what we know, and that’s why we’re well ahead of the curve of COVID. It’s why we’re well ahead of the curve in China. And wait until you.

I recently talked to Amir Nani as well, who’s at conferences that sold out tremendously around Europe and who was there. Who was at these conferences? Who was meeting with him. Take a guess Microsoft, Tesla, all the hyperscalers. All of them are at uranium conferences and energy conferences right now. Is that a coincidence? Absolutely not.

So we’re going to break that down tomorrow and that’s going to be a Wall Street Unplugged Premium Podcast, which is pretty cool. But holy cow, oracle Larry Ellison just listen to that conference call of what he says about data centers. We have great insights into certain shortages that are happening, which certain companies provide these specific components, and they’re on six-month backlog and none of the data centers will work without them in terms of cooling. So great, great ideas. So everyone’s taking this massive sell-off in technology, Daniel, but you’re looking at it. There’s several of these stocks within a particular industry and technology that provide these types of components that are near 52-week highs and they’re going to go a lot, lot higher because they have massive pricing power and you have the biggest companies in the world all jockeying for position to build these data centers as quick as they can. We’re going to go over a lot of ideas with you tomorrow, which should be pretty exciting.

0:44:13 – Daniel Creech

That’s right Tomorrow. Tomorrow Wall Street Unplugged Premium.

0:44:17 – Frank Curzio

Tomorrow, Wall Street Unplugged Premium. So guys, listen, the takeaways here is the debate was a big deal. You’re seeing it in certain stock prices. You’re seeing it in certain industries. Let’s see if that change just turns around. But you should have some dry power here. The market does come down.

We see September, October, usually two-week months, and then going into the next two months usually do very, very well. We’ll see what the election in November. But it’s going to give you an opportunity. You’re going to see a lot of great names get hit. We saw Oracle pull back a little bit. That’s in our portfolio Now.

It’s pretty sure it’s just a lot of good opportunities. Should nvidia be selling off the way it’s selling off? Should it be trading at the same multiples, procter and gamble, when they’re growing earnings by 100, when procter and gamble is barely growing right, maybe low single digits? Should they be trading at the same multiple? So you’re gonna see, even in ai, you’re gonna see the separation which you’re starting to see. It’s gonna provide really good buying opportunities for you, uh, and across different sectors and retail and everything. And that’s how we want to position. That’s what this podcast is for to make sure we’re positioning in the right places to make the most money based on everything that’s going on in the world, and you’re going to see lots of changes, lots of rotations going on, especially with the election just around the corner.

0:45:27 – Daniel Creech

So, Daniel, I don’t know, well said.

0:45:34 – Frank Curzio

Talk a lot about I don’t know. 45 minutes in Frank, 45 minutes in.

0:45:36 – Daniel Creech

We got a lot in there, that’s right, right, so I don’t know we can talk. Send us your thoughts on the debate.

0:45:38 – Frank Curzio

We talk football. How bad are the giants? Holy shit, how bad are the giants, giants. So the Giants and the Jets, New York.

I don’t know why everyone thinks the jets are going to be good. You can’t just snap your fingers, hire a couple people and you’re you’re going to be good. All of a sudden, yeah, it’s just. I mean, they got annihilated. It looked horrible. They have a 40 year old quarterback. Um, just, they expecting again I, you know, he’s amazing. He’s one of the best quarterbacks I’ve ever lived in terms of arm strength and everything. He’s just amazing. But you can’t. He’s just coming off an injury at 40 and everyone’s like this guy’s gonna sling like three touchdowns and their defense is amazing.

It’s all about continuity. It’s all about playing together. I mean, if you look at the Lakers, the Lakers are the greatest team ever assembled and they couldn’t win under any coach until they brought over Phil Jackson. So if you don’t think Phil Jackson’s a great coach, it matters. Coaching matters, continuity matters, bringing all these guys together and being able to play together. It’s hard. Maybe they build that up, but the Giants how did they pay Daniel Jones? Holy shit. Let’s go, eagles. They should have lost that freaking game, but let’s go. Eagles. Hopefully their offense looks great, but other than that, I think we covered everything today, Daniel. I don’t know if you have any final parting thoughts.

0:46:39 – Daniel Creech

No, no more from me.

0:46:43 – Frank Curzio

No more from Mr Creech, but we’ll have a lot to talk about tomorrow, guys, on Wall Street Unplugged Premium. So thank you so much for listening. Really appreciate all your support and All your support and we’ll see you guys, tomorrow. Take care.

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0:48:14 – Announcer

Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.