[00:02:34] Preston Pysh: They were just laying it on so thick like everything you see coming out of the media drones which is how I’m referring to any like traditional media at this point is it’s just it’s like they’re just chirping all the exact same messaging as if there’s one string puller at the top saying all right now everybody’s gonna talk about soft landing from now on

[00:02:54] Preston Pysh: And like, you’ve, you posted this and it was so absurd, the amount of articles coming out with soft landing in the titling and it’s just like-

[00:03:03] James Lavish: It wasn’t all, let’s make it clear that wasn’t, this is just a Bloomberg term, the news feed.

[00:03:08] James Lavish: Yeah, so it was all kinds of different sources. It wasn’t Bloomberg. It was like all kinds of different sources that they’re quoting there and, or, you know, that, that they’re listing there. Whether it, you know, whether it’s the Dow Jones or Canadian sources, it just, it’s all over the map. So it’s pretty widespread.

[00:03:25] James Lavish: And that’s the point is that there’s been a lot of talk of soft landing, a lot of talk. I wonder why. And today you see, and you see the market just march, march, march towards new highs here. Yeah. At the same time, you’ve got these banks laying off, I think Genevieve just tweeted something about upwards of 20, 000 financial layoffs thus far this year.

[00:03:48] Preston Pysh: I mean, there’s, well, let’s, let’s be very, let’s be very clear and like, let’s define something that I think is really important for people, because you’re right, the major indexes, whether you’re talking about the Dow or the nasdaq, like they are on the cusp of making new all-time highs. But when we look at what the composition of these indexes of-

[00:04:09] James Lavish: Absolutely, absolutely.

[00:04:10] Preston Pysh: There’s a couple companies. That got massive market caps, the Apple’s, the Microsoft’s, you name them. And they are performing flawlessly, right? They’re they’re performing better than ever, but if you go into like the smaller cap, they’re getting crushed. When you look at bonds, bonds, I mean, there was this minuscule bid that’s happened over the last two weeks ever since the, the Fed meeting, but like for all intents and purposes, bonds have, have had the largest selloff they’ve had in what a two year span on record.

[00:04:48] Preston Pysh: It’s a couple companies. It’s the consolidation of equity into a couple of these companies that is that people just chirp this narrative that the markets are. You know, almost at all time. No, a couple companies are at all time highs, right?

[00:05:03] James Lavish: Right. Yeah. And, and so it’s true. The breadth has been pretty tight.

[00:05:07] James Lavish: We’ve seen, I think it’s nine weeks straight now of net decreases in estimated earnings versus increases in them for analysts. It appears that we understand that there’s a slowdown coming. We had a, that abysmal bond auction a couple weeks ago. We had one this morning. It was a 20 year small auction, maybe $16 billion, which is really tiny now compared to the auctions that, that we’re, that we’re having.

[00:05:37] Preston Pysh: Which should have no issue right? From getting that sold.

[00:05:40] James Lavish: And it didn’t, it, it went off without a hitch, you know? Yeah. It was actually, there wasn’t even a tail. It, it stopped through. slightly from the wind issued to the market, but probably reality, the market was probably a little bit hesitant to buy these things at a price that they didn’t overbuy them pre market like they did the 30 year.

[00:05:58] James Lavish: That was just nuts. So, you know, it’s interesting there there’s, you see the shipping slowdown. You see the inventory numbers, the industrial production numbers. Like there’s clear red flags yet. It seems that everybody is, is entertaining this narrative of soft landing. Okay, so let’s, let’s think about this.

[00:06:22] James Lavish: You could have a few different things that are going on here. Number one, Mike McGlone and I talked about this morning, the analyst from Bloomberg. He said, Typically, I agree, you have this escalator up and an elevator down in the markets, right? You escalator up, elevator, escalator, and we’ve seen it over and over and over again.

[00:06:43] James Lavish: But this past time, we had an elevator down and an elevator straight back up. A slingshot up. A slingshot. It was a rocket ship, right? Remember, you remember the markets in March and April of 2020. And so. Well, the issue here is that there was just so much liquidity poured into the market during that time that maybe that’s enabling a little bit of an escalator down, and that could be the case, it could, as long as we don’t have some sort of credit event during that escalator down Or as long as you don’t have just a steep drop off of production employment.

[00:07:18] Preston Pysh: Is this the new norm or is, is that where you’re going with this? Is this a slingshot up the new norm?

[00:07:25] James Lavish: No, I don’t believe that that would be a new norm. Can I see, I mean, anything’s possible. So the question is, this is the real question for me. Is it because the market is so conditioned now to having a Fed backstop?

[00:07:42] James Lavish: that they’re going to buy risk assets and get ahead of it before we have a downturn and they miss it. Because what if the market is up 25, 30 percent from here, and then it draws down 10 or 15%. The Fed comes in and saves the market. It goes right back up and you missed that. So you net, net, if you bought all the way along, you were fine.

[00:08:07] James Lavish: So it could be the market is just conditioned to, Oh, we’re getting QE. The feds got our back. No problem. There’s no way that they’re going to allow for a dramatic drawdown in the markets. Why? It’s not the equity markets. They don’t care about that. They care about the debt markets. They care about the treasury market.

[00:08:27] James Lavish: That’s number one. That is the number one priority of the United States financial system. Make sure that we can sell treasuries, a lot of them.

[00:08:36] Preston Pysh: So don’t wait for the handler to put the dog food in the bowl. If you bite the handler’s leg, as they’re carrying the bag of dog food to the bowl.

[00:08:45] James Lavish: The person will spill the dog food and then you can nibble it off the ground.

[00:08:49] James Lavish: Exactly. So it’s, I gotta tell you, man, I’ve been, I’ve been investing for almost 30 years. This is the craziest.

[00:08:59] Preston Pysh: You’re right. Everybody’s been conditioned to that. They realize. A very fundamental thing here. They’re realizing that these aren’t free and open markets anymore. They know the markets are manipulated.

[00:09:12] Preston Pysh: And so to, to outperform, you have to play a game of, okay, so I think the manipulation is going to, to happen at this point in time. So I’ve got a front run that. And any type of rational free and open market dynamics, like if you’re playing that game, like you’re using the wrong, you’re playing a game of basketball, all the refs are cheating and you’re, you’re playing the game as if they’re not cheating, right?

[00:09:37] Preston Pysh: Like you have to play the game like they’re cheating.

[00:09:40] James Lavish: Exactly. So what are the rules? You gotta, you gotta understand the rules, and if the rules are, well, we can’t have a, a steep drawdown, okay, those are the rules. Especially in an election year. Yeah, yeah, exactly, yeah, exactly, and I’m, look, I still have, I’ve lived through a number of these, I don’t believe that we’ll have no downturn, I just don’t believe that, I think we’re going to have a recession.

[00:10:03] James Lavish: I think the Fed needs a recession to reset prices a little bit. That’s what they need to make sure that there’s confidence in the dollar and that will induce pain, but it can’t be so severe that you draw down on the federal earnings, right? Revenues, tax revenues to a point where you, you, you exacerbate that debt and the, we, the deficit problem we have.

[00:10:29] James Lavish: This is the craziest thing. We’re running two trillion dollar deficits. We can get into this, but we’re not even in a recession and we’re running these deficits. This is, this is insane.

[00:10:39] Preston Pysh: I want to get to a different elephant in the room before we get to that elephant in the room, because there’s many elephants in this room, right?

[00:10:44] Preston Pysh: There’s a lot of elephants. You can barely even move in this room right now. Which elephant do you want? This is the one I want to talk about. So when we look at the backstop facility that was stood up with Silicon Valley bank. You’re dealing with a security that is extremely liquid, maybe the most liquid asset in global markets.

[00:11:06] Preston Pysh: Now, I’m seeing, I just tweeted out today, I keep seeing these posts where people are like, oh, this building that was 150 million three years ago is 80 percent discount in the open market. And it’s like downtown real estate in you name it, major city. And like every post I’ve seen has been like 70 to 80 percent discount from the previous purchase price.

[00:11:32] Preston Pysh: So what we’re talking about is something that is extremely illiquid. that is on everybody’s balance sheet for banks and you, you name it, these are assets on these balance sheets that are impaired by maybe 70 to 80%.

[00:11:47] James Lavish: That’s the word impaired.

[00:11:49] Preston Pysh: Yeah. Impaired. That’s right. So, so let’s talk about that. And specifically, let’s talk about how illiquid this market is and like what that means for manifesting prices and like.

[00:12:01] Preston Pysh: It’s very different than how they were able to react during the Silicon Valley Bank where they’re dealing with something that’s really liquid. They stand up this backstop facility. Oh, just push those digital units over here. These are real physical things that might only turn over every seven to 10 to 20 years.

[00:12:19] Preston Pysh: Like, what does that mean as we’re like trying to manage this quote unquote soft landing that all the drones keep talking about?

[00:12:27] James Lavish: Well, first of all, the bank term funding program, right, the BTFP, that, that in and of itself, that, that just, that’s going to continue to act as a backstop. I don’t believe they’re going to allow that to just expire.

[00:12:39] Preston Pysh: There’s no way. It’s, it’s, it’s mathematically impossible, right?

[00:12:44] James Lavish: It’s not as though these, these regional banks are suddenly happening upon more liquidity, especially with this, this commercial real estate downturn. I do foresee this downturn to continue, but I believe that there’s significant activity going on in, in behind the scenes to be sure that these regional banks are individually not running into problems on their balance sheet because of them. And whether these, these deals are being struck at prices that are just barely getting the, these regional banks by without impairing their own balance sheets. And so it’s, it’s difficult to know. I don’t know exactly. What the behind the scenes negotiations are, but it’d be interesting to see who winds up buying most of this real estate because the function of it is the, and I wrote about this in, in one of my newsletters, but the function of it is that you have the, the, the buyer of the real estate, right?

[00:13:42] James Lavish: So they’ve got, they own the real estate. Now they put whatever down for it. And they’ve got this, what they’ve got their mortgage on it with the bank, then typically it’s, it’s a regional bank in that area that knows the business, the business area, and they’re, they’re, they’re willing to lend against it.

[00:13:59] James Lavish: So they, we have this lockdown, occupancy rates are down. So workers are not going into work, which means that each company is, they, they’re not re signing leases for as much square, for as much square footage. So the amount they’re leasing is down. So. You have the occupancy rates are down significantly 20, 30 percent in areas, right?

[00:14:21] James Lavish: So then the owner of the building has a cap rate that’s not really covering what he thought it would. And so he, he’s deciding to say, well, at this point, if I just turn in the keys and give the building back, I lose my, my equity in it. And I’ll just walk away. And it’s a non recourse loan. So the bank can’t do anything about it.

[00:14:45] James Lavish: They’re just like, okay, now we have this asset. And to your point, it’s impaired. And so now they’re going to be sitting on this asset that’s impaired 60, 70, some of them 80 percent from where we underwrote it. And now we’ve got to get it off our books. Because we’re just sitting on an impaired asset, an illiquid impaired asset, as opposed to an impaired asset that is covered under the BTFP, that is, you know, we can get capital for that at par.

[00:15:17] James Lavish: And it’s not, it’s liquid because we can just put it to the Fed.

[00:15:21] Preston Pysh: So how does the Fed deal with this illiquidity issue? I mean, I-

[00:15:26] James Lavish: You want to have a new acronym?

[00:15:28] Preston Pysh: Yeah. See that that’s exactly where I’m going.

[00:15:30] James Lavish: So like that’s the shoe I’m waiting to the draw to see if they have a new acronym this spring.

[00:15:36] James Lavish: Because remember a lot, a lot of these leases are, you know, they’re just now coming due again.

[00:15:41] Preston Pysh: And so describe what you mean by new acronym, just in case people don’t understand what you mean.

[00:15:45] James Lavish: A new acronym. So like yeah, so like the BTFP, that’s an acronym. That’s a quasi it’s a new facility. Yeah. QE and people, a lot of people have debated this.

[00:15:56] James Lavish: And look, if you’re, if you’re injecting liquidity into an open market, that’s not there. That’s QE. And the difference between, and it’s not a massive amount, but the liquidity of it and the ease of getting in and out and the, the ability for these banks to just show up their balance sheets with it is it’s important.

[00:16:15] James Lavish: It’s QE. It’s not a ton, but it’s there. That’s what it is. It’s more significant that they have the ability to, so they don’t have individual banks that are impaired. So, the question is, what would the next acronym be? Is it going to be some sort of commercial real estate investment trust? Fed, Fed promoter, Fed, Fed backed investment trust.

[00:16:40] James Lavish: I don’t know. It’s just, we’re going to have to see when these mortgages reset or what, whatever the, you know, whatever the next, the next waterfall event is for each of these commercial real estate holdings and how big they are, we’re going to see a number of them come up. So that’s the question. I’m, I’m waiting to see what happens.

[00:17:03] Preston Pysh: So James, I want to back up just a touch because you had wrote this incredible thread like a year ago, maybe a year and a half ago, talking about these tail, the, the tail on the auctions last week, we briefly covered this earlier in the show where last week there was this really bad auction place. And the narrative that was spread, I’m kind of curious your take on this as well, was that there was a cyber attack and one of the banks that were going to buy couldn’t access, and they were using pin drives to try to conduct trades and whatnot.

[00:17:37] Preston Pysh: And like, that was the excuse that was slapped on this of why the auction was so bad. I’m curious if you agree with that, first of all, and then second of all, get into a little bit of the dynamics so that people can kind of understand how even that market that we just got done saying is so liquid was demonstrating illiquidity last week in the auction that normally doesn’t, I think this was, what was this, like a three standard deviation kind of tail on this thing or something?

[00:18:07] James Lavish: That was something Sigma then, it was crazy. Well, let’s back up. So a few weeks ago, We had the, the Fed was announcing the, their decision on the rates whether they were going to raise or keep rates the same. And that was on a, on a Wednesday. And as typically the entire market will have their attention on that event.

[00:18:30] James Lavish: And so they’ll, they’ll be focused on what’s the treasury. I mean, what’s the Fed going to do. Well, the same day by happenstance, the treasury was announcing their fourth quarter funding program, their refunding program. So they’ve got a, for your listeners, there’s a lot of, a lot of people blame the treasury for all the spending in that’s going on in the United States, but the treasury is not the one who’s deciding the spending.

[00:18:54] James Lavish: It’s Congress. The Treasury’s just facilitating it. Now, they could have done a better job of, of issuing bonds that were longer dated way back when we, we had zero interest rate policy, but that’s neither here nor there now. So. But a couple of weeks ago, they announced what their funding was going to be and all eyes are on this because why, because over just a few months since the end of the debt ceiling crisis and middle to middle to end of October ish.

[00:19:26] James Lavish: The treasury had issued another over 2 trillion worth of debt. So, and then over 600 billion in just a few weeks, it was just insane. The amount of debt that they’re piling onto them, onto that mountain of debt that we’re already sitting on. And so all eyes are on this, say, well, what, what is the Fed going to, or what is the treasury going to do?

[00:19:48] James Lavish: How much are they going to need to issue? How much are they going to need to borrow? And so when they announced this, it was actually very positive to the markets because they said, well, there’s, we’re just going to borrow 776 billion. which was less than the market expected and a little bit less than the quarter before.

[00:20:05] James Lavish: Now, remember, we’re running 2 trillion deficits right now, annually. So we’re on a run rate of 2 trillion. There are things that don’t add up. Part of the issue when they borrow is they’ve got to pay off. They’ve got to give principal back to bonds that are maturing. So it’s not just how much the deficit is.

[00:20:26] James Lavish: They’ve got to refund all that debt that’s maturing as well. And there’s a lot of it maturing. Why? Because we’re issuing so many T bills right now in order to keep the engine going. We’ll talk about that in a minute. But long and short of it is, the Treasury announced that they’ll be borrowing more on the shorter end, more T bills, than bonds, which are 30 years and on.

[00:20:49] James Lavish: They’ll be borrowing less than that. And so when they, when you look at the schedule, they issued, they said, you know, we’re going to, the three year, the 10 year note will, or the 30 year bond, we’re going to, we’re going to borrow about one or 2 billion less on each of those auctions. And so the market was like, Hey, the treasury has got it under control.

[00:21:09] James Lavish: Everything’s great. No problem. We trust the treasury. They’ve got, they’re not going to issue too much debt. It’s all under control now. Not really, I’m being facetious, but you get the point. So the market was happy with it. Now, flash forward. Well, actually there were, there were a couple of nuggets in that release.

[00:21:28] James Lavish: So in that treasury release, when they, when they told the market what they were doing, one of them was. They said that the primary dealers, they basically admitted that they’re getting a little bit nervous. They said that, in their words, noted a high degree of uncertainty overall around deficit and growth forecasts, reinforcing the Treasury’s need to maintain flexibility in their issuance strategy.

[00:21:53] James Lavish: Right there they said primary dealers are getting nervous. Okay. Who are the primary dealers? Basically, they’re the auction houses. So when the treasury has an auction, you’re, they use Citigroup and JPMorgan and, and Wells Fargo, and they’re out there reselling this to their investors basically, right? So, but they, they’re the box, they’re the backstop.

[00:22:14] James Lavish: They’re like, well, we’ll buy this much to make sure that you get all of your debt issued and you can borrow as much as you need. We’ll buy this much from you. And so they backstopped the treasury basically. And for that, that’s for the right to be the primary dealer and get fees for that. The second thing they said is that they, the treasury anticipates, anticipates an additional quarter of increases to the auction sizes.

[00:22:40] James Lavish: Well, that’s normal. Of course, they’re going to have to issue more. That’s, that’s not atypical, but they did. They did make that note. They said, just FYI, we may, we may auction more off than we’ve, than we’ve just announced. Then the third thing they said was, this is the one that gets me. And there’s a lot of uncertainty on this one, but they said the treasury continues to make significant progress on its plan to implement a regular buyback program in 2024.

[00:23:07] James Lavish: What’s that mean?

[00:23:08] Preston Pysh: Yeah. What? Oh my God. Okay. So keep going.

[00:23:13] James Lavish: So they’ve done this before where they buy. Okay. So what they’re talking about there, this all kind of leads up to this 30 year bond auction. But what they’re talking about there is so back in the day. When the bond traders, the big guys, the bond traders, they had these big, huge reams of paper that had all the issues on it, the treasuries and the mortgage backs, they were like, they had these huge runs.

[00:23:39] James Lavish: And you remember the dot matrix printers? So it’s all connected to the, it’s all just one big ream, right? And so when you called back then in, in the 80s, 90s. When you call the bond desk, they didn’t have all the quotes up here. Wasn’t as efficient as it is now. They had these reams of paper. And so they would check if you want to sell a bond, they check the quote from that morning and they would, they would kind of give you a, a price.

[00:24:05] James Lavish: Well, if it wasn’t on that sheet, it was, that was the run. If it wasn’t on a sheet, it was continued. It was considered off the run. So it was not something that was typically traded. It wasn’t very liquid. So they’re like, Oh, it’s not on the run. I don’t know, I’ll bid you this for it and you’ll, you typically wouldn’t get as good of a price typically because it’s not as liquid and they don’t know.

[00:24:27] James Lavish: So that’s called off the run. The treasury, this, this buyback program, which they’ve done before is for off the run treasuries. Well, but have they done it before when the market has had such a shock that bonds and treasuries have had their worst years in history? Right. So then now you’ve got these bonds that are illiquid and they’re impaired because they’re maybe they’re 20 year treasury, they’re 20 years left in a 30 year treasury that, I mean, they’re down significantly.

[00:24:56] James Lavish: That’s what they’re talking about. Are they going to buy them right at the price? Are they going to buy them at market price? They’re going to make it a little bit easier. Like it’s just, they’re providing liquidity. to insure, they’re basically saying they need to insure liquidity in the treasury market.

[00:25:13] James Lavish: And so, sounds to me like a little bit, like A little bit like quasi yield QE to me, it’s unclear exactly how the program is going to work yet. So we’ll get more details next year, but they did announce it and they were working towards it.

[00:25:32] Preston Pysh: It makes, by the way, it makes, it makes total sense that when they eventually do roll out yield curve control, they’re going to do everything they can to kind of obfuscate the yeah, the terminology of yield curve control as much as possible.

[00:25:45] James Lavish: There will be, yeah, there will be acronyms. There will be, there will be, this is not, this is not QE. This is not yield curve control.

[00:25:52] Preston Pysh: Well, similar to the backstop facility, right? Like I would argue that even that’s a form of yield curve control for banks only.

[00:25:59] James Lavish: Yeah. So, and here’s the point is that look, I do not expect the government, I do not expect the treasury and the Fed to team up and do outright yield curve control like Japan. That is not what I expect. However, I do fully expect that they’ll, they’ll do these back door kind of hidden obfuscated deals where they’re, they’re giving liquidity.

[00:26:26] James Lavish: They’re injecting liquidity into the markets without, it’s not really yield curve control or QE. Now, flash forward. We’re, we have a 30 year bond auction. I’m, I’m on a call for my hedge fund. We’ll talk about that later, but for my, I’m on with a company listening to what their, what their projected earnings are.

[00:26:49] James Lavish: And I’m getting these messages pop up. And one of them might’ve been from you. I can’t remember what it was like. Did you see that bond auction? And I was like, but bond auction, but no, I didn’t, I haven’t heard anything. You know, I’m focused on this call. And so we end the call. I pull it up and I’m like, Oh, the 30 year bond auction was today.

[00:27:06] James Lavish: Oh, how’d it go? You know? And I look up and I was like, I couldn’t, I thought I was reading the numbers wrong. I was like, this is wrong. This is the 30 years. And like, yeah. What? The bid to cover was what? To make it really simple for your listeners, there’s a, there’s a few metrics that you look at when you, and I do have a thread all about this.

[00:27:23] James Lavish: It simplifies it for you. If you want to go back and see, well, I’ll give you the link to it. But when you look at a treasury auctions, a few things you’re looking at, the first big thing you’re looking at is the bid to cover. It’s like how many bids did they get versus how, how much the treasury was trying to sell.

[00:27:39] James Lavish: And that includes primary dealers, includes everything. The bid to cover for this, it’s typically for the 30 year treasury. It’s typically, it’s been in like the 7 range, somewhere around there. And in this auction, it was 2. 236, absolutely terrible. I mean, it was like, Whoa, is really, that’s really low. Then the second thing was the foreign bidders.

[00:28:05] James Lavish: So the, it’s called the indirect bidders. So indirect bidders. Dropped. They’ve been steadily dropping, but they dropped from 65% last auction, which was down from 75% at the beginning of the year to 60% this auction. So foreign bidders only bid for 60%. Now do the math. So you’ve got 60% there. The direct bidders, which is the, the hedge funds, the investment funds and institutional funds.

[00:28:35] James Lavish: The me and you, whoever was in there buying a buying, I wasn’t buying it, but. Anybody in there who’s, who’s buying these treasuries, they only took down 15%. So 60 plus 15, that gives you 75, which means that the primary dealers were left with 25 percent of the auction, which was like, wow, that’s a lot. These guys usually take down around 10%, maybe 9 or 10%.

[00:28:59] James Lavish: They were left with 25%. That means there was a big hole there for demand. Again, to make it easy for your listeners, it’s a, these auctions are called Dutch auctions. And so what that means is that if you or me, a retail person wants to buy a treasury bond, they go out to treasury direct, they put in, they say, I want to buy a thousand dollars worth.

[00:29:21] James Lavish: And they just put in their, their order. Well, they’re going to get whatever the, whatever the auction ends up being. But for everybody else, for the institutions, what they do is they submit a bid for the amount of bonds that they’re willing to buy at what yield they’re willing to buy it at. So that yield, basically the ending yield that the treasury decides on for the auction.

[00:29:45] James Lavish: is as high as it needs to go in order to fill the number of bonds they need to sell the amount of bonds they need to sell. So if they have 10 million here, 20 million here, 3 million here, they’ve got to keep going up. If they, if they have like only say they have, it’s a 30 trillion or a 30 billion auction.

[00:30:05] James Lavish: And 20 billion is down at 4. 75%, but then another 10 billion is up at 4. 8%. Well, then everybody gets 4. 8 percent because that’s where the order is filled. Okay. Does it make sense? So that’s, I know you understand this, but that’s basically how these work. The way that this auction went was they weren’t getting enough bids.

[00:30:26] James Lavish: They had to go all the way up to the price they had to go to, the yield they had to go to, and so what happens is these bonds trade before the auction in something called pre market or when issued. And so investors are expecting to know where that yield is going to be. They’re expecting that it’s going to come out to a certain spot, and if their expectation is that the yield is lower than it actually ends up being, in other words, it’s The treasury had to offer more yield to get the bonds that they needed to get the money they needed to borrow.

[00:31:03] James Lavish: That’s called a tail. And a tail in a bond auction like this, which was 34 billion, I believe, I’m sorry, 24 billion, I believe. And a tail for something this large of two or three basis points, it’s kind of like, Eh, that’s kind of an ugly tail. That’s not great. That means that the, when issued market. Was trading two or three basis points more optimistically than the actual auction occurred. So the win issue was like, ah, man, I bought this at too high of a price. And that they, they paid more money. They needed to, and when you’re talking about billions and billions of dollars. And you’re talking about 30 year treasury. That’s a lot. That’s a, that’s a big number at, you know, in return over 30 years.

[00:31:48] James Lavish: So that’s a, that’s pretty ugly. So this, when I looked at this, I looked at the returns on this or the the results of this, and I saw the tail Preston. 5. 3 basis points. 5. 3 basis points. If you’re like four or five or six basis points, it is abysmal. It is near catastrophic.

[00:32:07] Preston Pysh: You’ve got to multiply it by the size of the offering, right? Which is, those are huge numbers.

[00:32:12] James Lavish: And for the, yeah, exactly. And, but for them, the investors who bought it pre market. Oh yeah, they got it. They lost five basis points. Yeah. Which is massive. For the whole duration of that treasury. Yeah. For 30 years. Yeah. That’s, I mean, it’s a big number. It was abysmal, put it this way, is the worst tailing auction. That’s the biggest tail that we’ve seen in a 30 year treasury since 2011. And that’s when the S&P downgraded the U S debt for the first time. Yeah. That’s the, so there was no event in this one. It just tailed down really ugly.

[00:32:48] Preston Pysh: No, there was the cyber attack. Come on, James.

[00:32:50] James Lavish: So that’s, so that’s the next thing. So, so then you, okay. So the Chinese malware. So there was apparently There was a malware attack on ICBC Bank of China. It’s one of the largest banks in the world. And you’re right. They were, it was forced them to take USB sticks and run them back and forth between desks and offices and buildings to settle trades and move capital.

[00:33:13] James Lavish: Because they couldn’t get online, they, they, their systems were literally down. So you started hearing people say, well, that’s why the, that’s why the treasury auction was so bad because the Chinese bank was down. Okay. But in reality, in one of the Bloomberg articles I read right afterwards, it said that, that, that unit of ICBC only has the one that deals with the U. S. treasuries only has 24 billion of assets. So how big of a bidder could they have been of this auction anyways? Number one. Number two, which means they were likely not material. And number two, Janet Yellen came out right afterwards. She was asked about, she said they didn’t see any evidence of that malware attack having any impact on the treasury market.

[00:33:59] James Lavish: So she didn’t get the memo in time. She either didn’t get the memo or there really wasn’t. I mean, of course they really just had to admit it was a dismal auction. So how did the, how did the, how did the market react? The market reacted, well, the market moved over 4 percent in just a few hours and most of that was in a few minutes.

[00:34:20] James Lavish: I mean, 4%! on a treasury. This is the, this is the global reserve asset. I mean, this is not a meme stock 4 percent on a, on a treasury in just a, in most of that in a few minutes, it was mind boggling.

[00:34:36] Preston Pysh: Yeah. Cause you’re talking close to 5 trillion, you know, really round math, but something of that magnitude in nominal size to the global economy because of that. Right.

[00:34:50] James Lavish: Exactly. Exactly. So it was ugly.

[00:34:54] Preston Pysh: Well, maybe not that much because you’re only talking about the long term.

[00:34:57] James Lavish: You’re talking about only the 30 year, but still, it’s a big-

[00:35:00] Preston Pysh: It’s a really big number is the point.

[00:35:02] James Lavish: Well, but remember that it’s not just that. The whole market reacted, you know, the entire, like when you look at the, the react, the reaction of, of bonds across the spectrum, I think it was their worst sell off in, in, it was the worst sell off in years.

[00:35:16] James Lavish: I know it was the worst sell off this year. It was the worst sell off since the, since the Silicon Valley which was a really bad one across the spectrum. But the point of all of this is Preston, there was no event. It just happened.

[00:35:33] Preston Pysh: It just, yeah. There was nothing other than-

[00:35:35] James Lavish: So it wasn’t like you could point to, oh, it’s Silicon Valley Bank, or, oh, well, you know, Lehman Brothers just, oh, because the state got downgraded. There was no, there was nothing to point to. Except the malware attack, which likely did not have any impact whatsoever.

[00:35:51] Preston Pysh: So I got one more thing that I want to talk about and I would, I would classify everything we’ve talked about since the start of the show as the backdrop behind Bitcoin at the centerpiece of this whole episode, right?

[00:36:06] Preston Pysh: So we’re going to get to Bitcoin, but I got one other thing that I want to talk about in the backdrop as we’re talking about all of this, everything that we’ve said. Right now, today, you have long duration bonds being the biggest overweight position in US portfolio since 2009, with all of that said, yeah.

[00:36:27] James Lavish: Okay. Piled into it. Yeah.

[00:36:29] Preston Pysh: We already have 8% deficit to GDP. right now, which is the lowest I can, the chart that I see going back into the 1960s. It got lower than that through the COVID very brief spike, but this is the lowest that we’ve been in a non recession period for, since we’ve been on the petrodollar system.

[00:36:52] Preston Pysh: You start getting to like 12 percent deficit to GDP. It’s getting very squirrelly for that. Luke Roman is projecting when we do get into a recession, it could go to 14 to 16 percent deficit to GDP.

[00:37:08] James Lavish: Yeah, because you, you, you’ve got to draw down on both your earnings, your, your, your revenue, your tax revenues, they’re, they’re decreasing and your entitlements are increasing because of unemployment and social welfares.

[00:37:23] Preston Pysh: So all of that. And the majority of portfolios are long duration or long on long duration bonds. Typically, when you see wall street and everybody retail, everybody piling into something, it is time. There should be red flags and alarm bells going off like, Hey, I’m probably the sucker at the table. But everything that we’re seeing from these deflationary, whether we’re talking about commercial real estate and how illiquid that is and how it’s basically going to impair and just all these monetary fiat units evaporate in like with a snap of a finger, you got the reverse repo that I’m hearing is going to not be this supply of liquidity into the system, call it January, February, any longer.

[00:38:08] Preston Pysh: Which will evaporate, you know, fiat units in the system, like the snap of a finger. It seems… Like, that would be a smart place to be, but everything about everybody being there, like, just has me saying there’s something seriously wrong.

[00:38:26] James Lavish: I mean, the hedge funds are piled in. They’re piled in. Piled in.

[00:38:30] James Lavish: Piled in. Okay, so let’s talk through that. Let’s unpack a few things there. First, let’s unpack the reverse repo. I wrote all about this. Very simple terms this past weekend for anybody who wants to read it on my newsletter. Very simple terms. But the bottom line is. The reverse repo facility has just under a 1 trillion left in it.

[00:38:48] James Lavish: It had two and a half trillion. Now it has one left in it. What has been going on is the treasury has been issuing, as we said, the beginning of this segment here is the treasury has been issuing shorter term T bills in order to fund the government. Why are they doing that? They’re doing that because the reverse, the money that is in the reverse repo facility is excess capital that’s at banks.

[00:39:14] James Lavish: The banks take that capital and park it at the Fed overnight, and they park it in the facility. It’s called a reverse repo facility. They get an interest rate on that. That’s a little bit better than Fed funds. Now, what the Treasury is doing is they’re saying, okay, well, we can tease that money out by offering a little bit better rate on the T bills, which are 4 weeks, 8 weeks, 16 weeks, whatever they are, okay?

[00:39:36] James Lavish: They’re, they’re offering these T bills. that are a little bit better and they’re taking money out of that reverse repo facility. And as those T bills mature, that money gets re upped right back in there. Also, the deposits from investors, from individuals, they’re using deposits from banks. They’re getting drawn down and put into money markets.

[00:39:58] James Lavish: Money markets buy T bills because it’s, it’s almost, it’s almost like cash. There’s very little interest rate risk for the short end of the curve. So if interest rates, even if interest rates go down by one, 2%, you only have a few basis point risk if you’re in a, if you’re in a 30 day T bill, it’s not a big deal.

[00:40:17] James Lavish: That’s why they’re almost like cash. It’s very low risk. That’s one thing that’s going on right now. And that, and then that’s being drawn down. And you’re right. I talked to Lynn about this at Pacific Bitcoin. We were talking about that facility and I think it’s going to be drawn down by the end of January.

[00:40:35] James Lavish: I don’t see how it gets past that. at this point with this amount of spending. Now the trade, the basis trade. And so where all these hedge funds are piled into this, you know.

[00:40:48] Preston Pysh: This is what you and I talked about on Peter McCormick show, just for reference, if people listen to that, that’s what we’re about to talk about right now. Go ahead.

[00:40:56] James Lavish: And so what’s important about this is I do believe that it is a pretty good trade. For the moment, things can change fast, but for a trade. Because I do believe we’re going to have a harder landing than that soft landing narrative that we keep hearing about. I do believe we’re going to have a downturn.

[00:41:21] James Lavish: We’re going to have a sharp uplift in unemployment. And we’re going to have a deflationary event that forces the Fed to lower rates. next year, which means that the long duration treasuries will go up in price and their yields will come down. So as a trade, it’s pretty obvious. If you think that we’re going to have a recession, that’s a good place to be now.

[00:41:47] James Lavish: This is such a liquidity trap, right? The flip side of that is it’s dangerous. It’s dangerous. Why? Because of what you just said about Luke Grohman. I agree with him that we’re going to see deficits widen even more because you’re going to have a decrease in tax revenue and an increase in, in entitlement spending.

[00:42:13] James Lavish: And so as those deficits grow, so does the need for the treasury to borrow more. They’re going to be in the, in the issue that we’ve seen. over the last number of months that has all but been forgotten today. And the last couple of days is that there are what we call the bond vigilantes who are out there saying, no, I want to be compensated for something called term premium.

[00:42:40] James Lavish: That means that the further I go out on this yield curve, I want more interest for that risk that the fed or the treasury is going to have to issue a tsunami of debt. which is only going to precipitate the need for perpetual high inflation, money printing, monetizing our own debt, and having more inflation.

[00:43:06] Preston Pysh: What I was going to say is, to your point, as they’re demanding a higher yield for this because of that risk, That yield is going to be like a, like a massive incentive for more and more people to pile in with even more leverage because they think that they’re able to capture additional yield, almost like what you saw during the, the what was happening in the crypto market where there was these massive spreads for a basis type trade and everybody’s like, wow, there’s tons of money to be made here.

[00:43:36] Preston Pysh: So they all pile in. And as they all get in there, it turns into a massive, massive liquidity shock that manifests itself in a snap.

[00:43:47] James Lavish: So what we saw in that 30 year treasury auction last week, remember, Wall Street sees that first. Why? Because they have professional instruments to know when the, where the when issue traded, what the tail risk, what the tail was.

[00:44:01] James Lavish: So if we have a, we have a shocking event in a treasury auction, they’re going to know at first, and guess who’s going to be getting out of treasuries first, right? So they’re going to be able to just, and Preston, we’re talking about these trades are massive, massive, you know, I mean, It’s not unusual to have a few hundred million dollar trade and trade.

[00:44:27] James Lavish: I’ve done a hundred million dollar trades in treasuries. You just, you know, I just need to move a hundred million dollars. Like these are huge markets that can just completely overwhelm little investors. And so the problem is trying to time that is going to be difficult. So if you can, you’re trying to time this down to back to zero interest rate, zero interest rate policy.

[00:44:51] James Lavish: That’s a dangerous trade in my mind, in my, my opinion, I think that we’re, we’re going to go back to higher structural interest rates because we’re going to need higher inflation, you know, that’s just, there’s, and investors are going to want to be compensated for it.

[00:45:06] Preston Pysh: At some point here, you’re going to have such a rivalry going back to this idea of liquidity, right?

[00:45:13] Preston Pysh: They can get on the keys, they can clack on the keys and get more units added into this market very easily to save it. into, or I’m using quotes when I say save it, but stabilize it. But in the background, or at the same time, simultaneously, how about the, how about the commercial real estate market? Like it’s going to be having all sorts, cause you’re going to be watching wild fluctuations and yields.

[00:45:39] Preston Pysh: Right. And like, none of that is getting solved for those people’s balance sheets that are getting prepared in physical, hard, very illiquid things. And I think you’re, you’re going to see such a dichotomy of who’s getting rescued and how they’re getting rescued versus people that are squatting on those physical real estate.

[00:46:01] James Lavish: Yeah. I expect some, I expect significant consolidation in the banking industry. Investors are going to, and depositors are going to just continue to flee to the, the globally systematic important banks. Something interesting though, is that. I think it was S& P, but I, I just saw a headline before jumping on the show about the S& P saying that they’re, they’re, they’re concerned.

[00:46:25] James Lavish: That, and they put them on, on, they put these banks on, on rating watch because they’re concerned that the government’s not going to have the ability to just backstop the globally systematic important banks. Like that’s a what? Well, who’s going to backstop them then? Like who’s right? If the treasury is not going to backstop them, who’s going to backstop them?

[00:46:49] James Lavish: Of course they’re going to backstop them, but it’s going to mean massive money printing to do so. If we have a major credit event, I’ve been saying all along that I think that there’s a much higher than non zero probability of a credit event between now and 2025.

[00:47:08] Preston Pysh: Oh, yeah. I mean, that’s a, that’s my base case, right?

[00:47:12] James Lavish: Like you’re going to have, well, my base case is definitely a hard landing. The question is how bad of a credit event do we have? I would be. Yeah, I would be surprised if we don’t have one between now and the end of next year because of the, just the sheer amount of leverage in the system and the rate at which we raised rates that, and because.

[00:47:34] James Lavish: It’s not an even distribution of who has all that capital. We keep talking about all this capital that’s out there, all this, that there’s so much money in the system, but it’s not a, it’s not an even distribution. So at some point in some, in some place, like you’re, like you’re alluding to, it could be that you have a cascading event from a commercial real estate event, credit event that winds up imploding some, either a lot of eyes are on these regional banks, but it could be a private lender that we’re just not expecting that causes them to implode. We’ll have to see because the private lenders are there. It’s opaque. It’s hard to see who’s doing what. And they will have counterpart there, will they, there will be counterparty risk to those that could be large.

[00:48:27] James Lavish: So that’s the question that, that’s another thing that I’m, I’m just starting to dig into is like how much of this private credit is out there and what are the actual risks?

[00:48:38] Preston Pysh: It almost, I guess, maybe I’m pushing on this too hard, but to me, it almost seems like if you have a lot of exposure to physical things, commercial real estate being of prime importance, and the big banks that are heavily exposed versus the ones that aren’t, Wells Fargo, Citizens, Morgan Stanley, those are some of the bigger banks that are heavily exposed to commercial real estate.

[00:49:00] Preston Pysh: JP Morgan, Goldman, some of them are less exposed. But the three that I named there just off the top, those are the ones that I think are going to just get hammered in this coming thing that’s, that’s materializing itself because of their exposure to physical reality. We talk about Bitcoin and like how like proof of work and how it’s tethered to energy and how it’s tethered to physical reality and how it’s these digital energy packets that preserve your buying power.

[00:49:32] Preston Pysh: I think we got to look at traditional finance and we got to look at how it’s tethered to physical reality and how maybe some are less tethered to physical reality and they’re able to kind of like lever the government. to basically protect them because they can just clack on some keys and produce another couple trillion units to save them.

[00:49:54] James Lavish: That’s going to make it very interesting as we come through into this next year and we do get these ETFs approved, which I fully expect that we get multiple ETFs approved.

[00:50:02] Preston Pysh: They’re going to have to tether themselves to it, right? Like they, they have to.

[00:50:06] James Lavish: Spot Bitcoin ETF. And so when we have that, I mean, just imagine that we get the spot Bitcoin ETFs approved.

[00:50:16] James Lavish: It provides an instant super highway on ramp for institutional investors, RIAs, small family offices that just don’t have the ability or don’t want to take on either the career risk. Or that small institutional risk of holding their own keys and all the settlement and all that stuff that we’ve talked about before.

[00:50:34] James Lavish: But imagine that’s happening at the same time that you have meltdowns over here. And investors are searching for places to put their capital.

[00:50:44] Preston Pysh: Well, it also, James, it also provides an anchor for really distressed assets that if, if there’s some type of Bitcoin or hard asset that’s, that’s also associated with the balance balance sheet or ownership of that equity.

[00:50:58] Preston Pysh: Or even a bond, right? Like, I think that there’s something there. And I think that once people start to maybe even insert a small amount of it, co mingle, and I know that has a very negative connotation, but like, you mix Bitcoin with these legacy assets, even in small proportions. It might calm the volatility of the price swings that you see in fiat terms for, especially for like commercial real estate.

[00:51:23] James Lavish: Yeah, eventually, absolutely. And it will, eventually. But that’s the, and those are the events we’re watching. So this year should be very interesting. It’s going to be very interesting for Bitcoin between the ETF. Having, you know, we have a, a, a likely recession, in my opinion, possible credit event. It’s going to be interesting to see just how Bitcoin reacts to all this and how people react to that and, and look at Bitcoin because once the investors, once you have these investors, and I, and I use this term this morning talking to a few people, it was.

[00:51:58] James Lavish: The investors, when they have this, the ETF, they’re going to be able to just leg into a trade. They’re going to buy a little bit because then they’re, they’re going to be forced to learn about it because now it’s there. They have no, they have absolutely no defense of saying, well, I mean, I couldn’t do it because I didn’t want to deal with the settlement or the custody or the operations or the pricing.

[00:52:21] James Lavish: Like that’s all gone now. It’s like, well, it’s just like a stock on the stock exchange at this point, if you can buy it, you know, used to not be able to buy gold. Because you didn’t have a place to store it, you know, a way, how to custody it, a way to, to move it back and forth. Like, you can buy 10 million worth of gold.

[00:52:39] James Lavish: Like, how are you going to get that? Like, who’s going to, where are you going to put it? So that’s what people are claiming with Bitcoin at this point. That’s what institutional investors and RAs and small family offices, like, they’re like, well, we just can’t deal with it. Now they’re not going to have an excuse.

[00:52:54] James Lavish: So once you have that, then that learning it, it, they have no choice but to start learning about it at the very same time that these things could be happening that we’re talking about.

[00:53:05] Preston Pysh: By the way, if you’re a CFO of a, of a large organization and you’re trying to buy Bitcoin and you do it through a BlackRock ETF vehicle, I have pity on you.

[00:53:14] Preston Pysh: And you need to get smart and understand why taking physical custody is so much more important, especially in the long run when you understand like where this is going to be going on layer twos and fees that are collected for, for, you know, sitting on actual Bitcoins and not letting BlackRock hold them.

[00:53:31] Preston Pysh: You need to do your research. That’s all I’m going to say.

[00:53:34] James Lavish: Treasuries. Yeah. For institutional investors, it’s much more complicated, but yeah, it’s much more complicated.

[00:53:41] Preston Pysh: But if you do the work pull out the, the micro strategy playbook and understand how they did it. If you want to eventually, eventually they will.

[00:53:49] Preston Pysh: Yeah. They’re going to have to. Well, they don’t have to, but if they want to do it in a way that yields to better results, they should. So the last thing I want to talk to you about on, on the Bitcoin side, I have something that I’m watching that I’m, that I’m looking at. It’s just blowing my mind before I tell you what that is.

[00:54:08] Preston Pysh: I’m curious if there’s anything that you want to highlight that you are excited about or that you’re seeing in Bitcoin in particular that you think is noteworthy right now.

[00:54:17] James Lavish: Oh, I mean, look, you know that I have that we recently launched the Bitcoin Opportunity Fund and I am everything we’re talking about the, the economy, macro, all of this stuff just emboldens me and gets me more excited and more optimistic about Bitcoin and the ecosystem and the people that we’re meeting and these, and the operators of these companies, the founders, the, There’s some smart cats out there.

[00:54:46] James Lavish: Yeah, I mean, I feel, I don’t understand some of the stuff that, and we’re, there are some really smart people out there and I’m super excited about this space. I’m super excited about the opportunities in this space. I mean, you remember back in the day of of the internet when that was taking off and you’re, you’re trying to find places that you can, that you can benefit from and you can help.

[00:55:10] James Lavish: And this is, this is what it feels like right now. It feels like the dawn of the internet in Bitcoin. And it is. Super exciting. And we’re seeing awesome opportunities. So I want to make that clear that I’m optimistic as optimistic as ever in the Bitcoin space. And the fund is for accredited investors. I have to, I have to say that it’s not my rule.

[00:55:31] James Lavish: It’s the SEC’s rule. But we’re still taking some investors before the end of the year. We only have 99 slots. Again, not my rule, the SEC rule, but we’re super excited. And so I just want to make sure that anybody’s watching this, you hear any doom and gloom and the macro outlook that only makes this, this space more exciting and and more opportunities here.

[00:55:55] Preston Pysh: So this plays on a theme that I just love talking about, which is. We are not talking about just the problem. Sure, we defined it very clearly throughout the show, but we’re also talking about what the solution is and the engineered solution that already exists that’s there that can solve all of these problems.

[00:56:16] Preston Pysh: And you see so little of that in legacy financial news and media. It’s just all day long problem definition. There is no solution except for a vote for this politician, which is just laughable, right? Hey, anyway, so the point that I wanted to bring up, James, real fast, I am blown away by these hodl waves and how you have 70 percent of issued Bitcoin that has not moved.

[00:56:44] Preston Pysh: You are a person that understands the supply demand dynamics of a stock or a bond or whatever it might be and how that drives price. And we’re looking at something that’s literally up over a hundred percent on the year. I’m pretty sure it’s up over a hundred percent on the year. And you have seen even deeper conviction of the people that are holding their coins even tighter than they were when the price was, you know, 50 percent lower than where we’re at right now.

[00:57:15] Preston Pysh: This is, I guess, my question to you as a veteran of financial markets. Have you ever, ever seen a stock or a bond or a commodity or whatever that is up 100 percent on the year and you don’t have anybody taking any profits, in fact you have people buying even more, like heavily buying, by the way this is the highest It’s at 70%.

[00:57:40] Preston Pysh: That’s the highest number it’s ever been since inception of Bitcoin right now. What does that mean going into 2024 in your opinion?

[00:57:48] James Lavish: In my opinion, well, first of all, it’s like a closely held stock, right? So you’ve got these, the, the, the people who really know the company the best, these hodlers know Bitcoin the best.

[00:57:59] James Lavish: They’re buying more. They’re buying more and they understand they’re holding, they’re hoarding it, just like a closely held company, then it’s very difficult to get liquidity on the other side. So in the markets, and so what do I, what do I see? I see in the near future, again, like we don’t need the ETFs for Bitcoin to grow by factors.

[00:58:24] James Lavish: But when that happens, I, I do see a period of price discovery, which is the, that’s, that’s the operative phrase. When, because what happens with institutions is when they need to buy some, they just say, buy $10 million. Buy $25 million, buy $50 million today. Just participate, meaning just go along with whatever’s, whatever’s going on in the market.

[00:58:54] James Lavish: Meaning try to be as much percentage of the trade as you can without moving the price yourself. Just participate. And so what happens is you have all of these institutions getting in there and all of them just participating because they’re just, they’re like, well, I got the average price and I didn’t do better or worse.

[00:59:16] James Lavish: And I did just as well as anybody else.

[00:59:18] Preston Pysh: They just want to get exposure at whatever.

[00:59:20] James Lavish: And so price discovery happens when you have these pockets of illiquidity where it just jumps up and they all just move up together and they’ll just keep doing that and keep doing that and keep doing that. Until they get the amount that they need.

[00:59:35] James Lavish: And it doesn’t matter if, if a few million dollars worth trades. or a hundred million dollars worth trades. It can move the price depending on whether or not there are any closely held shares willing to be given up at that price. And so that’s when people who are confused by this are like, well, but you need an additional half a trillion dollars to come into the market for Bitcoin to double from here.

[01:00:03] James Lavish: And the answer is no. If nobody sells between here. and 70, 000 Bitcoin. And you trade one sat, you’re just getting warmed up. One single sat, the price of Bitcoin has doubled. And now it’s worth the, then everybody’s share of, of that chain is now worth a trillion dollars. It’s hard to conceptualize, but that’s just reality.

[01:00:27] James Lavish: So yes, that’s a good point.

[01:00:28] Preston Pysh: All I heard was James Lavish makes forecast of God candle in 2024.

[01:00:34] James Lavish: I do. I do see a God candle in Bitcoin’s future. I don’t know when, but I do. I agree with you. I think there will be one in 2024.

[01:00:42] Preston Pysh: Okay, so you mentioned your Bitcoin Opportunity Fund. Is there anything else that you want to highlight to the audience or throw out there?

[01:00:51] Preston Pysh: I’ll have a link to your Twitter. What else?

[01:00:53] James Lavish: Yeah. Yeah. Thank you. And so if you, if you are interested in, in the learning more about the. fund, just go to Bitcoin opportunity dot fund. And we’ll, you know, we can send you a package and you can just, you just have to check off that you’re a credit investor and make sure that we know that. And I see your little buddy.

[01:01:09] Preston Pysh: Oh yeah. The door was supposed to be shut. They’ve never made it into an episode until today.

[01:01:14] James Lavish: Okay. And so I’m special. So and then, yeah. And then I write the information is newsletter. And every week I take one complicated concept, financial concept, and simplify it for people and it’s free.

[01:01:30] James Lavish: You can just go to the link in my Twitter bio or go to just jameslavish. com and sign up and it’s been doing great. People love it. So I appreciate it. It’s a fun thing to do. Every Saturday, just sit down and write something about the market and get people to understand a little bit more about what’s going on in the real world of finance and, and these institutional worlds and and how these things work.

[01:01:53] Preston Pysh: Well, James, I appreciate you making time and coming on the show. And this is what was brought over to me right now. So I guess I got my work cut out for me. All right. Thank you. See you.

[01:02:05] James Lavish: All right, buddy. See you next time. Bye.

[01:02:08] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for, We Study Billionaires. The Bitcoin specific shows come out every Wednesday, and I’d love to have you as a regular listener. If you enjoyed the show or you learned something new or you found it valuable, if you can leave a review, we would really appreciate that. And it’s something that helps others find the interview in the search algorithm.

[01:02:32] Preston Pysh: So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening and I’ll catch you again next week.

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