Peter Boockvar Gives Us His "Boock Report" On The Markets

Ajouté : 2026-05-27

[00:00:01]Welcome to the On the Tape podcast. I'm your host Danny Moses and today I welcome back Peter Bookvar. Peter is an independent economist and market strategist and the chief investment officer at 1 point BFG wealth partners.

[00:00:12]Peter is also the author of the book report on Substack which I highly recommend as mandatory reading. Please enjoy my conversation with Peter and stick around for my couch picks of the week. All right, Peter, welcome back.

[00:00:24]>> Danny, great to be here in person.

[00:00:26]>> Yes, for sure. It's been uh a while since we were together in this office. I know you were on came down to Florida for an episode of the Danny Moses show that which was great and timely obviously and there's no shortage of things for you to write about and as I told people in the opening I start my day every day or throughout the day with the book report on subsec I think it's excellent. So every once in a while unsolicited you and I will call each other. It's we we hit our >> just the the peak of insanity and you just need a sanity check and I normally give you one you you give me one.

[00:00:54]Normally, when you and I call each other, that's pretty much the near-term top of the market. But the last two times, >> our personal pain threshold. Yes. You might need a session.

[00:01:03]>> Exactly. Need a session.

[00:01:05]>> I I want to say that the last time I called you and then the last time you called me, it wasn't the top actually.

[00:01:11]Actually kept going and things kept going here. So, I'm trying to make sense obviously of what's going on in the market. And there's a lot of negative data points out there for the US consumer, but maybe we're overthinking it. And maybe it's just that, okay, you know, benefit of the doubt to capex and AI and data center buildout. Data centers aren't impacted by oil right now, at least at the moment. Forget about and and user demand. Talk to me, make some sense of of what's happening here, if you don't mind. Well, I think the day that the market started to care about things being oil or yields was not this past Friday, but the Friday before when the 10-year yield got to 4 and a half, jumped over four and a half%. The day before it didn't care at a 10-year yield of 448. Uh, it cared the next day at call 452, >> got over 460, I think, >> in the subsequent days. Yeah.

[00:02:01]>> Market started to care. Now that we're on the downward trajectory, even though we're closing about four and a half, you know, the market, okay, says, okay, that that uptrend is over and I think to make sense of this, since early April when the White House signaled that they wanted to be done with the war, add on the AI tech trade, those are the only two things that the markets needed to just go up. Nothing else mattered. No one wanted to miss war's over straight open trade. No one wants to miss the AI recipient trade. Um, and that's it. To me, it's as simple as that.

[00:02:38]>> So, it's just flows that are keep coming in. Until flows were to reverse for some reason, it's just self-fulfilling that it's going to move higher.

[00:02:44]>> Well, the flow thing is it's it's flowing into AI and it's flowing out of everything else, >> right? And even now they're getting to Walmart which traded at, you know, you you've owned it at 45 times multiple or Costco that traded north of 50 was was down today last time I checked. So the market's getting to the things um that it's bothered by that being consumer spending and it's just giving a free ride and a whole pass call it to to the recipients of the 700 billion plus of AI spend.

[00:03:17]>> So let's unwind that for a second. Let's let's go back here. So, we're we're roughly up almost 9% in the S&P 500 since the war started. So, that I just look at it in that context. Okay. Oil's gone up from 65 to 100. Rates have gone up from, I don't know, 4.15 to 4.5, wherever it was. I don't know exact. So, on the margin, everything's gotten more expensive and the consumers can stretch.

[00:03:39]I hear what you're saying and you're putting your bullish hat on to explain what's happening. But even if this is solved, maybe it's a sell on the news event. I don't know when it actually happens. It's hard for me to see oil dropping back below even $80 in the when I say near-term the next two to three months given just it's gonna it's not I mean we're not going to have full peace there. There's going to be flare-ups and so forth and rates really coming down a lot especially since the economy or appears spending patterns and capex look to be okay. So reconcile that for me and maybe I'm just overthinking it here and maybe I'm being too logical but reconcile that for me because inflation and rates are going to be with us for a while and I don't think it'll be as transitory as as people believe. So I I I agree. I I think we are in a full-fledged bull market in commodities and you can draw a chart over the past 20 years and overlay the CRB index with the 10 with a year-over-year change in CPI and they pretty much follow each other. So, let's just say the war ends today, that the talks the last couple days actually come to fruition. Sure, it reopens. Yeah, maybe oil drops down to $85 in WTI. I don't see it going much lower than that. Uh I I've seen some people talk about being a year before things normalize. Uh now, maybe that's a bit too long, but call it shorter than that. It's still going to be six months. and all the strategic reserves that need to be refilled, let alone those countries that are going to create new ones. There's going to be a huge underlying bid under oil. Uh I read last week that the EU is going to create a stockpile of fertilizer.

[00:05:18]I'm sure there's going to be as best they can uh stockpiles of natural gas and uh copper and nickel, even though that's not necessarily sourced in the straight. You can't build a data center without it. Who wants to get short that?

[00:05:32]Uh I wouldn't be surprised if right now we're seeing double triple ordering of semiconductors.

[00:05:39]The amount of times that I read in a conference call that said to the question of are you seeing a pull forward of ordering in those sectors where prices are going up, the obvious answer was yes because if you see prices going up, you know, you want to get ahead of further price increases on top of that and also you want to uh take off the table the risk of a shortage. So, no semiconductor company is is going to say that they're seeing it. But CDW, a company that does business with commercial customers, government and uh healthcare and education, they said, "Yeah, we we see customers that are pulling forward orders because they're trying to get ahead of the memory price increases and fears of potential shortages." So, let's just say the war ends. maybe that double triple ordering ends and maybe tech sells off and the market rallies other things. Uh so I do think to your question and your point there is going to be a bid under commodities generally speaking there's going to be a bid of uh and a hoarding going on that's going to complicate the interest rate story. Uh we're all looking forward to hear what Kevin Walsh has to say in the middle of June. And one other thing that I don't think anyone is really thinking about, you know, they heard, okay, Kevin may want to cut uh the size of the Fed's balance sheet. Well, maybe actually if he follows through with that in lie of raising interest rates as his way of tightening. Well, we know the balance sheet transmission is the markets.

[00:07:10]What what the market's not prepared for that maybe taking the balance sheet to below 6 trillion. Uh markets aren't prepared for that. Uh the it's the long end of the yield curve is not prepared for that. And instead of a four and a half tenure that bothers the market, maybe it goes to four and three/4ers five.

[00:07:26]>> Yeah. One of the things you just mentioned, you gloss right over memory chips. Let's talk about Micron because as we sit here today, yay through a trillion market cap, right? 200 billion I think in one day on a price target revision upward. Again, not trying to call the top or we see these things before. Talk to >> that price target is was double >> the closing price, >> right? We we've we've seen this game. Um talk to me because it doesn't look expensive. People will say, "Oh, Danny, Peter, the stock's cheap." Well, it is cheap if you're going to keep this obviously run rate up. Talk a little bit about Micron specifically because I think you shared data points that really relate here. So, >> so I don't want to downplay the huge demand for their product right now. And in terms of the the value ad memory that they're in right now, it's really just them, Samsung, SKHix as we know. So, it's not like these companies can snap their finger and bring on all the supply. So I acknowledge business is gang busters and that the extra supply that may come online may not be till 2027 2028. Markets aren't thinking about and discounting that extra supply.

[00:08:29]They're looking at the huge demand right now. But as I say, it'll be interesting to see in retrospect what extent of this is double and triple ordering. Putting that aside, I went back and looked in terms of its valuation back in 1999 when and let me just pull back for a second.

[00:08:45]anything any company doing business in a cyclical industry never tell me what their PE ratio is when things are great and tell me it's cheap because when you look at a steel company an auto company I'm looking for when multiples are expensive on the surface because that means earnings are probably depressed when things are great earnings look cheap how many times Danny did someone tell you in 2007 that the homebuilders were cheap at at a 6PE Well, that was peak earnings. Now, is Micron peak earnings right now? I don't know. $100 a share, maybe, maybe not.

[00:09:22]But don't give me their PE multiple.

[00:09:24]Give me their price to sales multiple because that can in my way smooth out the cyclicality of that business. So, I did go back and look just for perspective in 1999 when obviously DRAM and memory was feeding into PCs and Micron peaked at about eight times sales. Today, Micron's trading at about nine times sales. Can this time be different? Maybe. Can the structure of the industry be less cyclical? Yes.

[00:09:55]Maybe an igopoly. Maybe these contracts that they're signing, which which I'm sure they're outs to those contracts, but let's just say they they come to fruition. Maybe it is different. But only show me a price to sales ratio in a highly cyclical industry. And we're like pushing the envelope here of 9 10 times sales. And we all think about what Scott McNeely said, but you know, 10 times sales is not doesn't fear people anymore because they don't think about what that actually means when you're willing to pay 10 times sales for a company's uh stock.

[00:10:25]>> Along those same lines, you track investor sentiment. I know it's a little bit of a lag indicator. You get it, you don't get it the day of kind of where are we right now on the bull bear index and what you what you've been tracking.

[00:10:34]So, I think it's important to look at the whole sort of uh slew of them because some people like to pick and choose which sentiment number uh feeds their story. I like to look at them all.

[00:10:45]If I look at the city panic euphoria index, their threshold of euphoria is 41. The last read is 83. So, double the threshold, but in 2021 it got over one.

[00:10:58]So, maybe we go there before we end up exhausting ourselves. If I look at the investors intelligence numbers which surveys so-called professional investors or newsletter writers bullar spread is maybe 30 points. I you to me extreme is something north of 40. So yeah you got more bulls but it's nothing extreme.

[00:11:20]AI is the most fickle measuring uh retail investors. that actually quickly flipped last week for more bears than bulls, but that was in response to the sell-off. That thing moves around like an EKG chart. So, I take that with a grain of salt.

[00:11:35]>> Then I look at the NAIM exposure index and that's like in the 80s, so usually 100s extreme. So extended, but nothing extreme. So I I put it all together and the CNN fear greed is in the greed uh category, but not extreme greed. So all in all, I don't know what to make. Nothing extreme, but you know, certainly more bulls than bears if you take it in the aggregate.

[00:12:01]>> As far as the K-shaped economy goes at this moment, um doesn't seem to matter how low the bottom half of the K is going, but at some point it will matter.

[00:12:08]I mean, they're the ones that buy products and the ones that are going to have to subscribe to Chat GPT and pay all these going to happen. We're just ignoring it at the moment. And um one of the Cali event contracts I'll talk about today has to do with auto delinquencies which are being completely ignored in this market and they're off the charts right now above the 08 highs now.

[00:12:25]>> Yeah, it's it's really it you know it's really mind-numbing when you look at it but it doesn't matter. When will that start to matter and if you get a sentiment flip at the top I feel like those things will all come back into play. We still have private credit issues potentially going. We have all these things which were just you're right to your point war is going to end.

[00:12:42]War is over. War is going to end. War is over. But at what point do we go back to this other narrative?

[00:12:46]>> Well, $45 on average per gallon now matters cuz Walmart told us it did last week when they said for the first time since 2022, the average person is buying less than 10 gallons of gasoline when they go fill up their car. and BJ Wholesale last week sort of confirmed similar wording because they have a similar model in terms of the the warehouse and also uh the ability to put gas in your car. Now I would say maybe month two months ago when Casey's General Store first reported this was after the war but when gasoline prices started to rise. Gasoline was still around three and a half bucks. So it was off the lows but still a dollar below where it was today. And the CEO was asked, "So at what price per gallon do you think you'll start seeing demand destruction?" And he speculated five.

[00:13:42]Well, he was close. Walmart said 450. So if 450 is just another stop to five, it it's really going to start to drag down even more of that that consumer.

[00:13:56]And the AI trade, no one's going to care until that trade exhausts itself. But the rest of the economy has started to show some some shaky legs. And then it gets to okay well unfortunately because of the inflation, particularly the commodity inflation, the Fed is not going to be able to address it. and anybody looking for Walsh to cut rates to satisfy Trump. Well, Chris Waller and Michael Bar, interestingly enough, within a day of him getting or two days of him getting sworn in said, "Okay, Kevin, welcome to the seat, Michael Bar said, I don't agree with shrinking the balance sheet." And Waller said, "I don't agree with cutting interest rates." Now, somehow that to me is not a coincidence. And even the Wall Street Journal criticized the two of them, saying, "Hey, just just let him have some breathing room here instead of within a day of becoming Fed chair, you're already breathing down his neck."

[00:14:51]But this is a complicated economic situation here that 23 times earnings is not necessarily discounting the complexity of what we're seeing. But of course, we know, getting back to what I said earlier, this is all about the war's going to end. Buy AI stocks.

[00:15:06]Nothing else matters. One thing is clear when this war does end that the one country to come out stronger on the other side is China. Um they're getting stronger by the minute politically, economically, you know, possibly as a result of this. What does that mean to the markets? Again, another thing that's being ignored. Put Taiwan to the side for a minute. Let's just hope that doesn't happen. But if it does, it's not now. What does this What does it mean?

[00:15:29]What does it mean to US treasuries? What does it mean to their currency? What what does it mean to global markets?

[00:15:33]>> I see there there really a couple of interesting things here.

[00:15:37]Since 2018, when Trump punched China in the face via the tariff war, >> China said, "Okay, we're we're we're not going to take this anymore." And China since then, when Trump basically almost took down ZTE and Huawei, China said, "We we can't rely on this country anymore, and we are going to develop all the high-tech stuff all by ourselves."

[00:16:00]And maybe it's going to take us time and maybe we're not going to be able to go toe-to-toe on the technology side, on the chip side with the US. We're going to do our best to to stay close. Well, they've ran past us when it came when it comes to EVs like fast. They've ran past us. Uh automation, robotics, solar, um they can produce things at half the cost that we can from a kilowatt perspective when it comes to electricity. Uh so on everything X chip, they've run well past us. And on the chip side, we saw the Huawei news where they said over the next five years, they'll be able to basically catch up. So, what we did was just incentivize them to not rely on us.

[00:16:44]So, here we are today, Nvidia has basically zero market share in China, and that may not even get to 5%.

[00:16:51]>> Well, they had some, but we just they just didn't quote know about it. It was being sent through. Yeah. Okay.

[00:16:55]>> Essentially zero, right? So here uh we've cost Nvidia a customer of the second biggest economy in the world because of our policies. So it's now to the point where we've now allowed Nvidia to sell some of the some of their chips, but China says, "H, we don't want them anymore because we don't want to become dependent on you and we're creating our own uh semiconductor ecosystem and software system uh that we don't need you anymore." So, not only are we losing China as a customer for our US tech, but China is now going to compete with keep compete with us on the global stage.

[00:17:31]So these AI models, well, China's going to be able to offer them at that bootstrapping company in the UK or in Singapore, in South Korea who needs to have an LLM uh for their internal systems and they need to buy some chips and then some hardware and China's going to offer it to them at 75% off what US technology companies are offering. So now we have major competition on the global stage. Now this is not something that matters today. something that will play out over time. But, you know, we keep talking about this AI trade. I don't think anybody's doing the analysis of after this buildout takes place, how competitive are US models going to be on a on a on a price per token basis, for example, with with with the Chinese and and I would have to say it's going to be pretty brutally competitive.

[00:18:22]>> So, you don't just track the US stock markets for people that don't know you.

[00:18:25]And it's not like I'm trying to put you in the bearish camp. you're just more practical about US markets. You go around the globe, you've owned Japan for years, which has been an incredible call. It seems like China equities on a relative basis seem to be cheap here. Am I wrong on that? Is that something you're recommending right now? Whether it's just buying the FXI and >> ETF there.

[00:18:44]>> So, we're we're along a couple of Chinese themes. Yeah. The the the tech trade because they trade at a a cheaper multiple than the US and >> by a long shot >> by a long shot. And they're also, you know, in in the US what's happening and and this is not me saying it, it's the CEO saying it. I'd rather overspend than underspend. and they're throwing everything against the wall because they want to reach this AGI where I think the Chinese companies are being more targeted in how they're developing applications for AI to cater to specific industries, specific customers, and that allows them to do it at a cheaper cost and allows them to um really create uh useful and practical uh uses of this AI.

[00:19:29]So, we're long those stocks.

[00:19:32]I I've been I I I'm not happy to admit that I'm still long these Macau casino stocks. Um the Las Vegas of Asia, >> six licenses like the China where everyone competes to the death. They've said they've created this igopoly for this industry, but it's still become very intensive in terms of the competition. But I still think that there's a very exciting story there. And then also the rising middle class in Asia particularly also in China is also a very exciting investing story. So anything that can sell into the consumer uh whether it's life and health insurance versus via AIA group which was the spin out of AIG uh or anything tapping into the consumer in terms of travel and leisure to me that's also a very exciting story. Uh but I think generally speaking the rest of the world's still an interesting place to invest particularly Asia where half the world lives.

[00:20:26]>> What about Japan? We've we've talked about that before trying to get into their um central bank policies. They obviously have inflation now. We watching the tenure yields there zoom higher. No one seems to care. That's fine. Japanese equities, you've been long and and correct for a long time.

[00:20:41]Have you taken some off the table here and what are your thoughts?

[00:20:43]>> So we have taken a bunch off really from a valuation perspective and you know getting to China. What what got me also to to sell most of our China is that you know a lot of I'm sorry Japan a lot of Japan a lot of their industrial base is competing more with China and my friend Louis Gav has this saying that uh when China walks in the door the profits walk out and I was just getting more worried that Japan would be butting heads more with China on from an industrial standpoint. Um but Japan still this great turnaround story and interestingly um I don't know if this is going to matter for the nicke but I I read today that you know one of the things that Japan did to really uh lit a fire under a lot of companies was they shamed those companies whose stock was trading below book value >> and that was whole part part of the aonomics corporate governance push they actually are now putting pressure on companies to any excess cash that you have I don't want you paying higher dividends or buying back more stock. I want you to invest more in your business. Now, whether that gains traction, I'm not sure, but was it sort of a change in tone of just allowing Japanese companies to do what they think is right in terms of boosting stock prices, whether it's of any of those things. So, we'll have to see. And and it it it wasn't as uh cheap of a market.

[00:22:10]But if the Japanese JGB market continues to run into trouble, interestingly enough, this the stock market can benefit just from a a flow thing. Um, but I also a flow thing within Japan, but also a flow thing as Japanese investors bring money back home because the Japanese market becomes more attractive because uh they don't want to lose money in non-yen investments if the yen eventually starts to rally, which I think it's going to if yields continue to go up.

[00:22:40]>> As two of the top holders of US treasuries, Japan being the highest, what's that impact look like in terms of what's happening over there? What it means? I I saw your note. We saw a sell a sell by uh China I think of 41 billion recently. I think they've been selling in Japan buying in the UK.

[00:22:55]>> It's kind of you know it's bouncing out a little bit but should we care on that?

[00:22:59]Is something something we need to watch there as well?

[00:23:01]>> So Japan had a similar number. Their holdings fell 40ish billion each.

[00:23:05]>> Now some of that was was bill maturities that were not reinvested but even that's a sign that they weren't reinvested. I think there is there is definitely an intention for the Chinese to continue to reduce their holdings as a percent of their reserve base and own more gold. uh and I also want to touch upon one more thing with with China and the renmi and the question with the Japanese JGB market and their holdings of US treasuries is what is the JGB yield level that will create that money to come back home and I don't think any of us know the answer but all I know is the higher yields go the closer we get to that point and I do think from a short-term JGB yield perspective The BOJ is going to raise rates in June. I do think the yen is going to rally, but maybe that actually tempers the rise in long-term rates. We'll have to see. The other point that I think is important with the Chinese and the Renmi is, and this is a few different things. So when the US put sanctions on Russian and Iranian oil, it meant that if China was going to buy their oil, if India was going to buy their oil, if other countries were going to buy their oil, they didn't they couldn't do it in US dollars. So they started to denominate this trade in Renmi.

[00:24:28]And even before the war, the Chinese started to buy oil from Russia in Renimi. They started to buy oil from Saudi Arabia in Renmi. soybeans from Australia, I'm sorry, in Australia in Argentina in Ren Mimi and corn from Brazil in their own currency. And all of a sudden, instead of being like a few percentage points of global transactions, the Ren Mimi in terms of commodities, all of a sudden 7 8% of transactions even though the dollar is still 80%. Going from 2 to three to 7 to 8 in a short period of time is a change.

[00:25:01]Now, we're not going to the pro wand just yet or um or or the corn wand, but all you need is a change in in in the the trajectory that all of a sudden makes a difference because also gold plays into this.

[00:25:17]>> I was going to ask you gold. So, let's let's just go to gold.

[00:25:19]>> So, so let's let's just say that um I am India and I buy my um oil from Russia in Juan. So, I get Juan. Yeah, I'm probably gonna buy some goods from from China, no doubt. But I may not spend all my one there. And instead of just holding one as my reserve, I'm actually going to buy gold with that one on the Shanghai gold exchange because it's more of a neutral asset. I don't need to really take that that currency risk. Um, and gold is becoming this increasingly used neutral sort of settlement asset with any extra balance of payments that are out there.

[00:26:01]So the more we you use currencies outside of the dollar, it's not just the dollars not being used to transact, but also more is more stuff is getting settled in gold and not getting recycled in the US Treasury market, for example, which we knew was the case when 10 years ago foreigners owned half of the US Treasury market and that percentage today is down to 30%.

[00:26:23]>> It's really interesting how gold has changed its usage, meaning it's is it used for inflation? all doesn't tend to work in that necessarily, right? When in rates moving higher, it doesn't work for that necessarily. And people now believe they're people are pledging, sovereigns are pledging gold right now to pay for some of their bills. So, the irony is it should go up in a war. It's actually going to go up when the war stops. So, because people believe the financial stresses in the system might go down, which I find ironic, by the way, that gold, you know, gold obviously has a massive place right now. It's, you know, $25 trillion asset or whatever the total is here. But it is ironic that it's kind of changed its usefulness so to speak I would say.

[00:26:59]>> Exactly. And that's why I think gold has fallen more for liquidity reasons >> rather than fundamental reasons. Now that said we have seen a sharp move up in real rates >> and gold tends to trade and all the algorithms very sensitive to real rates and the dollar has come off its lows. So there are some fundamental factors but I think a lot of it is liquidity factors.

[00:27:21]I mean, you had Turkey last week that essentially has sold down their treasuries to nothing and we know that they were monetizing some of their gold holdings. You can make the argument that a lot of gold is bought for a rainy day and for a lot of countries that import energy to a great extent. Well, it started to rain >> and maybe it is a source of funds. So, I see that more as a liquidity thing. But we did see in Q1, now granted some January, February was pre-war, that central banks were still voracious buyers of gold according to the World Gold Council. We'll see how they respond in Q2 in light of all these other things. But it's still and and when you think about the war ending, that desire on the part of a foreign government to diversify their both their capital flows and trade flows away from the dollar. Not that they are they still want to do business with the US of course but on the margin to diversify those capital and trade flows is only going to intensify when this war is over because number one they don't want to get caught up in a in a dollar rally like we saw. Um they don't want to get caught with having to rely on buying um stuff from the US with a weakened currency of of critical stuff. And that gets to my whole stockpiling of things and hoarding of things and and and wanting that on your own land and your own country and relying less on on the US dollar and so on. It's just it's just a prudent diversification thing and I think gold's going to be a beneficiary of that.

[00:28:49]>> One other question just on rates specifically mortgage rates obviously which track 30-year treasuries more or less. Um housing has always been an important component of the US economy. Uh it hasn't been growing for years now. So, you know, on the margin maybe it doesn't matter that much, but what are the policy changes that could really even move housing at this point? And we saw Home Depot's, you know, we we see what these um retailers are saying about if you own a home, you're okay, but there's not not not a lot of transactions. Does it matter right now to the US economy or is it just kind of a sideeshow? So the National Association of Homebuilders always has this stat that all in to the US economy including the builder, the the the building milaterial supplier, uh the contractor, the electrician, the plumber, the real estate broker, that whole entire housing ecosystem, 15 to 18% of the US economy. And now that you have the pace of turnover and transactions at 30 or lows, you know, Home Depot will tell you, as you said, that when you don't have a house that that goes from one from a seller to a buyer, they don't come in by paint. They don't redo the floors, they don't get carp, but yeah, there's some renovation here and there, but you need a house to turn over to get that repair and renovation to really take place. So, it's had So, that part of the economy has essentially been in a recession. And in terms of driving greater activity, unfortunately, you need two things. You need a lot more supply through new building, which is only going to take place at the local level in terms of permitting and approvals and regulatory, nothing at the federal level. And you need a decline in home prices.

[00:30:35]>> You need that because that that is what is going to make it. We have an affordability problem and all the desire and policy initiatives that only stimulates demand via let's buy down your mortgage or let's have federal policies that only stimulates demand without a coincident increase in supply.

[00:30:53]You're just going to get a higher price that's going to offset any benefit from maybe lower mortgage rates or something else. We need lower home prices. And the last thing we need is we need the baby boomers to downsize. Yep.

[00:31:05]>> Because that would be a form of bringing more supply onto the market.

[00:31:09]>> You know, the irony is whatever would drive home prices down would not be good for the stock market. So that, you know, I would say you're on, you know, double-edged sword, right?

[00:31:16]>> You have to pick your poison.

[00:31:17]>> So, one of your friends was on here um kind of late April, Dennis de Busher, founder of 22V, who I know you like and respect and he feels the same about you, I'm sure.

[00:31:26]>> I did like a couchy speed round for him of event contracts based upon the stuff that we had talked about. I did throw him a little curveball that people that don't know he is the son of the great Dave de Busher, New York Knick. Um, and so I threw one out at him when the Knicks were still playing the Hawks in the series was 1-1 in the first round of the playoffs. And I brought it up. He had never even seen Kawashi. I go, "Hey Dennis, the Knicks to win the Eastern Conference are trading at 12 cents." He goes, "What does that mean?" I go, "It means that if the Knicks were to win the Eastern Conference, it would trade at a dollar." So over eight times. He goes, "I buy that. How do I buy that? I buy that." So we got that one right. I want to give you that. Next one was I showed him was and the S&P was much lower then I said look at the odds of the S&P trading at 7,800 at any point during this year and he goes I'll buy that. Are you going to buy that? I go was 31 cents. So it hasn't hit it yet today that's trading like 68 cents. The only thing that he wasn't correct on as of yet was would the Fed cut rates of which he said yes. So I want to give you a couple here that I think throw at you here and we can go there. So let's take a crack at it. So the odds are, will there be zero rate cuts this year?

[00:32:29]Forget about that. They raise and then they lower. Will there be zero rate cuts this year? Yes. Is currently trading at 64 cents, right? So that acrru to a dollar. So no rate cuts this year. 64.

[00:32:40]Yes or no?

[00:32:43]>> There's no prizes here.

[00:32:45]>> I I I'm going to say yes. There's not going to be a rate this year. Okay. I'm with you on that. I just want you to know that's trading. So effectively, you make 36 cents on 64. I'm saying yes.

[00:32:54]That's not bad. All right. All right, the next one, and it's tied to another one I'm going to ask you, is how high will unemployment get in 2026? And keep in mind, this is the U3 unemployment as reported by the BLS. So, we have to rely that that's going to be correct, which is which is its own thing. So, will it exceed 5% at any point? Yes, is trading at 27 cents and no is trading at 74 cents roughly.

[00:33:18]>> I I I'm going to say no. Even though to me, >> even though it might actually be happening, you might not see it. Even though 23 cents seems to be >> but you know you make you got you got 8 months 7 months left in the year.

[00:33:30]>> I know you got a lot of upside there >> right you can make decent returns pick a side >> if oil goes to 150 which is a possibility I guess it's worth paying 23 cents for >> okay so you see might happen so 27 cents 27 going to happen. Okay fair enough right and the last one you're going to have to hang hang with me on this one.

[00:33:47]Okay. What will the state of the economy be at the end of 2026 according to the BLS and verified from the St. Louis Fed.

[00:33:54]Okay, so these are the four categories you have. Don't answer yet. I'll give you the categories. Will the economy be overheating, which would be below 5% unemployment and above 3 and a half% inflation? Will we have stagflation, which would be at least 5% unemployment and at least 3 and a half% inflation?

[00:34:11]Will it be a soft landing, which is categorized as below 5% unemployment and below 3 and a half% inflation? or will we have slack or disinflation which is at least 5% unemployment and below three and a half percent inflation. I I can give you the prices of each, but if you were to pick if you had to pick one of those four categories, where would we be here at the end of 2026?

[00:34:34]>> What is I'm going to have to say stagflation.

[00:34:37]I'm going to have to say above because I'm highly confident on the above three and a half% inflation, right? I'm less confident on the unemployment rate just because the labor force growth is so anemic that it's tough to push that.

[00:34:48]>> Well, it's either overheating then or it's overheating then it's either overheating which is below 5% unemployment. Yeah, >> cuz the over three and a half% inflation is either overheating or stagflation.

[00:34:57]You can own both for a total of 76 cents if you want.

[00:35:00]>> Overheating the the AI trade is overheat for sure, but everything else is cold as a as as a freezer. So where where's the stockflation one priced at? 37 cents for yes.

[00:35:12]>> Yeah, I'd buy that.

[00:35:13]>> You'd buy that one. Okay. Well, that does conflict a little bit with the at least 5% unemployment if you were to say >> Well, the stackflation was above 5% unemployment, above 3 and a half% inflation.

[00:35:23]>> Correct.

[00:35:24]>> And uh I'd pay the 27, right? You said you pay the 27. So, it's a parlay. It's a >> parlay. Even though it will be tough to get to 5%, but you know, to be a little contra, I'll say, "Yeah, I'll take that."

[00:35:36]>> Well, good. Well, the same way I gave Dennis, you know, the report on Dennis, I'll give Dennis next me comes on the report on you on what you just chose.

[00:35:42]But Peter, thanks again for coming on. I told I tell people, and I don't just say this. I read the book report, the the stuff you break down, a lot of it's just factual, you giving your opinion on what's being said out there. If you read through the lines, everyone can pick up on kind of your tone and what you're doing. And obviously, you run a portfolio now over at BFG as well, I believe. Right. So, people can find you at the at the book report on Substack.

[00:36:04]Exactly. and spell that just so people understand.

[00:36:06]>> Uh, B O C K report in my last name.

[00:36:10]>> There you go, Peter. Thanks for coming on. Hope you'll come back again soon.

[00:36:12]>> Thanks, Danny. A lot of fun.

[00:36:14]>> It's time for my Cowi picks of the week.

[00:36:15]Remember, when you are trading on Koshi, you are trading with other users.

[00:36:19]Similar to buying or selling a stock, you can jump in or out of your position at any time or lock in a profit or cut your losses. These are just my opinions, not telling you what to trade or offering any investment advice. Before we get to this week's pick, let's revisit a pick from three weeks ago that appears to be coming down to the wire.

[00:36:34]was the price of gold being above $4,533.99 per ounce on May 29th at 5:00 p.m.

[00:36:41]Eastern time. The contract was trading at 56 and I was a buyer as it would return roughly 75% if the price is above that mark this Friday. It's basically still trading around the same price. I believe we will exceed that this Friday.

[00:36:54]So, I'm coming out of the wire and I am staying with yes. Another event contract I'm looking at involves auto delinquencies. Another issue at the bottom of the K-shaped economy that isn't getting enough attention. This relates to second quarter auto payments that are more than 90 days delinquent.

[00:37:08]The first quarter reading on this, which came out in May, was 5.6%, a jump from 5.21% in the fourth quarter 2025. We should get the second quarter 2026 numbers the first week in August from the New York Fed. And given the spike in oil prices and the challenges facing the US consumer, I'm going to choose yes to higher than 5.6% 6% in the second quarter, which is currently trading at 74, almost a 35% return. Again, these picks are not financial advice, but if you want to learn more, download the Cali app, read the rules, use the promo code Moses to get $10 when you trade $10. I'll be back next week with another episode of On the Tape, and check out the What Are We Doing Contrarians at the Gate Substack. I co-author with my fellow Big Shore partners Vincent Daniel and Porter Collins, which includes our Friday night dirty podcast as well. And this week on our dirty, our guest will be Keith McCulla, the founder and CEO of Hedge.

[00:38:02]Thanks for listening to the On the Tape podcast with Danny Moses. If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast and please leave a rating and review, positive only. You can also watch on the On the Tape channel on YouTube and give us a thumbs up there as well.