RenMac Off-Script: Warsh Case Scenario

[MUSIC] Ren Mac Offscript originated as a weekly internal research meeting designed to summarize and discuss what happened in Washington, the markets, and the economic data over the past week. It was always intended to be and remains a free flowing conversation with no discernible objective other than to extract the wisdom and opinion of our analysts and their expertise. This is a conversation among colleagues. Individual circumstances are unique and nuanced. Do not mistake these conversations for investment advice because it's not. Here we go. [MUSIC] >> Okay, welcome to the Ren Mac Offscript podcast today is Friday, July 31st. I'm Eric Boucher, filling in for Steve Guttanoffer. >> I'm Jeff DeGraf. >> I'm Neil Detta. >> And I'm Steve Pavley. >> Yeah, good week for Steve to take off. Pulled the Tom Sawyer on me. Decides to biggest. >> Yeah, you missed half the intro, by the way, where we talk about markets, history. >> Yeah, I feel like that Steve's gig. >> Boucher's not a big planner. Boucher's kind of off the course. >> Yeah, I know. We know he's not much of a planner, Jeff. He's got like 10 kids. >> Yeah. [LAUGH] >> Yeah, it's coming out hard. I mean, halfway through his intro, we usually hit the 30 second advance, but when I'm listening to it on the weekends, I think everyone-- >> No, you just lost half the audience. So congrats. >> Welcome to the Grand Mac Podcast where we talk about life and interesting things. The, no, just like this, what are the biggest earnings week of the year? Probably, a wash, testimony, foult you up there and duds up in the on-tucket. Probably having one of those like bloody marries and transfusions with that. >> I think he's a crew. They've got, what's the, what's it called? The crew cocktail or something? It's pretty good, I have to say. Sitting on the dock, overlooking Port noise boat. I'm sure that's what he's doing. >> Yeah, he's that, yeah, it's probably something with cranberry up there. They're big into cranberry and nantucket. >> Yeah. >> Yeah. Well, I gotta say before we start, the amount of research that you guys are putting out is just unbelievable. The last several weeks, Stephen and I were actually talking about it. We look at the numbers. Usually this time of the summer, it's pretty low. In terms of like clicks and readership, it's through the roof. With the reports coming out that you guys are generating and then just decline in interest. And as I mentioned, earnings going on, macro is usually, you know, backseat, but it's just, it's just tremendous. So, kudos to the team. I had a guy in Miami prospect, I've been prospecting for two years. I call it dripping on the guy every once in a while, trying to get him in front of our research on Tuesday out of nowhere. He hits me out. You know, hey, Bouch, add me to the research. It's been a while like we're best friends forever. So you start to see people coming out of the woodwork, we've got this volatility. Team's been going to good job covering it. And, you know, I think the takeaway is you can't really get, you know, reverse engineer or call through a couple of podcasts or tweets. You got to be on the research. We got a Monday morning macro meeting. We got you guys putting out the written research. So, you're not on it. Give me a hall or make my job easier. Fill in for DUT. Make it look like I know I'm doing over here. But, you know, Jeff, to you guys with your call, I just want to jump right into it if I could. Unless you guys think I'm going to all script here. Can I go on? Strange, strange audio that you get coming out, not only with the messaging but the technology. But that said, what was the big takeaway this week? Was it, was it Worsh? I think it was. What would you get out of it? Neil? I mean, the, you know, this is what the bond market do, the talking, right? I've always said, you know, I mean, I don't think what the current strategy that he's pursuing is a particularly sustainable one. I mean, at some point he's going to have to talk. So, you know, going into the meeting, I actually made the point that I thought they would just hike, right? I mean, basically, if you see something that's going to happen anyway, you might as well do it now and show like you're in control of the committee. Worsh opted for not doing that. And, you know, I think he went a little bit beyond just, you know, sort of not hiking. I mean, he went beyond holding. I mean, it was a, it was a, it was a dovish. She tried to deliver a dovish kind of communication. You know, there were a couple of things in there that I think are going to be a little bit grating on his colleagues. So for example, he talked about the PCE inflation target and while it's 2%. You know, that's really only the case until January. You know, I think that's, you know, in other words, he's sort of pre-committing to task force outcomes without actually consulting with his colleagues. Like, I think that's probably a mistake, you know, for him to say that. But at any rate, I mean, the market reaction to it, it was, was pretty swift. I mean, you saw the long end go up quite a bit. It's still rising, by the way. You saw the dollar go down. So to me, that kind of wreaks of a, a credibility issue. And it didn't have to be about credibility. But now it is. And so, you know, I think given his performance, you know, if you're a Christopher Waller, right? I mean, Worsh made the point of, you know, we could be watchfully think, like we could do engage in a watchful thinking over the, you know, the data. Comparant contrast that to Governor Waller who basically said, you can't just sit there with a weathering gaze and, you know, and look at inflation and expect it to go away. You have to do something about it. So, you know, I think he kind of contradicted his colleagues in fairly public ways. And I think he's not going to get off so easy in September. So they're going to be coming back in September. And they'll be meeting. And I suspect at that point they'll deliver a hike because I think it's just going to be very difficult for them not to at this point. So, you know, I think a lot of the governors are going to be pushing for a hike as well. And at that point, Kevin Worsh is going to have a choice to make. I mean, is he going to vote with everyone and look like he's sort of, you know, it's kind of pathetic actually, but it's going to look like he's in control, but he's not really because it's all of those other people that are kind of bringing him to the water, so to speak. So I just think he comes out of this looking like a much weaker Fed chair. And, you know, I mean, this was sort of a fear that I had very early, right? I mean, you know, if you go back to stuff that I was saying in January when he was getting nominated, I looked up an old tweet of mine. The good thing about Worsh to the extent I have anything nice to say about him is that he isn't very good at actually doing the blocking and tackling of economic analysis, which is why he could get easily pushed around by the FOMC. And I think we're now getting to that point. So if you're an investor and Jeff, I'd love to hear your thoughts. You either believe that Worsh is in control of the committee or you don't. And if he's not in control, then you should probably expect the curve to flatten because the rest of the committee is going to be inching towards Hikes. What am I supposed to add to that? I don't know. I'm going to die. Oh, the curve. I got you. Okay. Yeah. Well, I think that's right because you already have pretty high real rates. You've got, you do have breakouts. I mean, the one thing I would say that makes me a little uneasy. So far, the 10 year yield has held below. It's, you know, an important pivot point, you know, roughly four, four 80. But you have, you have boons breaking out. You have guilt breaking out. You have JGBs breaking out. All those are at new highs. But I do agree. I think the curve is likely to flatten as the two year yield, you know, catches up essentially. And that should take some of the, some of the vinegar out of, out of a long end. But we'll see. I'm not as bearish. I mean, the charts, the chart is, it's certainly from a yield perspective. It looks like a breakout looks like you'd want to be long yields, right? So higher yields, but looking at the, looking at the kind of math underneath it, it doesn't, it doesn't scare me. I'm not in the, my God, we're going to 6% camp. But, you know, certainly the chart is, the chart of yields is more bearish. We're looking for higher yields than, than where I sit. And maybe that's a mistake on my part, but that's how I'm seeing it. Neil, but you say warship is like a bad governor on track to be. And if you'd come in with an easy bias, people would have thought that he was, you know, doing a bad job. So now he's not, not hiking right away. So he was doing a bad job. It's sort of a lose, lose situation for the guy. Well, I mean, I think there was a way to deliver a sort of, I mean, like if you wanted to hold, there was probably a way to do it without, you know, frankly, looking so clownish, in my opinion. For example, he could have said, maybe, I mean, the issue is he doesn't want to talk really. He doesn't want to talk to communication. Everyone is mad about his communication. issue, he could have said something like, you know, we, we, We thought this was a prudent move for the time being, but we're carefully watching inflation and deflation remains elevated. We are prepared to deal with that. The issue is that the other thing that I thought was interesting is this whole notion of like, oh, the market's doing the work for me. Therefore, I don't have to do anything. It's sort of like the, I call it the school for people that can't read, raise rates and want to learn to, the air to on school for people that can't raise rates, but want to learn how to do other stuff good too, like to borrow from Gary Zuander. So think about that, right? Like the market's doing the work for me. So I don't have to do anything. So by that logic, maybe the Fed should have cut rates in July, and monetary policy would get even tighter as a result. Think about it. Think about how stupid that sounds. It's like sort of MMT clap trap. And that's kind of where he's going with this. So yeah, look, I would just say, I mean, there's a lot there that frankly, didn't make a whole lot of sense to me. And the proof of the pudding is in the eating boys. Don't take my word for it. Just look at what the markets have done. Look at the bond market. The 30 year yield is up a lot. I don't really think you've seen the curve you know, I've seen hawkish policy mistakes in my time. I haven't really ever seen a dubbish policy mistake. And that's kind of at least on an announcement day. Like when you see a move like that, right? The 30 year going up a lot, the two year you're coming down, the dollar selling off. I mean, that looks like a dubbish policy mistake. Obviously, equity sold off a lot on the day too. So yeah, I mean, look, we'll see what happens, but at the margin for someone that hasn't really been like hawkish, like, you know, based on the economic data, I think given the dynamics of the committee, it's very likely at this point that they hike in September. And at the margin, the dots probably move up a little bit, right? Like this probably is a little grating on his colleagues, frankly. And that's a consensus building institution. So you can't just keep saying like task forces, task forces, task forces, like they're not gonna wait for four months for that stuff to come out. They're gonna deal with it. What like one fight at a time, and that's the fight right now is obviously the fact that inflation remains quite elevated. - I wanna come back here, but Jeff, you said the biggest news of the week might have been worse, but I think a lot of people would say the markets, 'cause they've been, you know, absolutely nuts. Like you and the team just did a fantastic job. You know, same momentum was vulnerable. That was over three months ago that you started calling the bubble in momentum, and you've seen this crack here. You know, I don't think anyone was calling for that. I think it's an excellent job. We've gotten a lot of credit for it. Like I said, my job is easier. Prospects coming back in. So if you could make another call like that, I'll get two prospects. But what now? So that's the next question, right? Which is sort of the nature of business. - What have you done for me lately? That's this business. - That was good, but that was last week's fall. Give me something fresh to work with. I thought was interesting is, you know, Leopold, I'm not even gonna try to pronounce his last name from a strategic, I'm sorry, situational awareness. Leopold puts a face on it, right? So for those not in the know, Leopold, again, something with an R or with an A in it, had a hedge fund massively levered based on a paper that he wrote, which was essentially what the momentum trade personified, which is the world's gonna be short of compute and processing and it's gonna be the world's long or saturated with SaaS and software because agents will be able to write, basically write code, right? So over the last nine months, we've seen nothing, but you know, semis straight up and software practically straight down. And Leopold, as it always does, you know, we saw some type of fissure there and the crack and he was liquidated, 45 billion down to 10 billion and Ken Griffin and company came in and rescued him. That's a very, very old playbook. I think it puts a face to the crack that we've seen and gives people the quote unquote reason. Look, I've been doing this a long, long time. Everybody needs a reason. I don't need a reason 'cause I've done this long enough, but I know there's always something behind the surface that we can't see. Now we have a face, now we can see what that was. And you know, the assumption is that was a clearing event and I think that's true. I think in a very, very near term, that was a clearing event because you've got foreselling, you have what people call capitulation and usually you have some type of whale or large fish that floats up to the surface. And so I think you had that in the very near term. Does it change the dynamics, right? We put out the bubble warning back at the end of April. We wrote a piece over the July 4th holiday called the semi-conductors, the anatomy of a top. It doesn't change that. All those are still in place. And I think one of the reasons, and it's important, it's actually, we wrote it in the note this morning, there's a saying, a Greek saying, that is, essentially you never stand in the same river twice. Herocleides said, a man never stands in the same river twice or a man never steps in the same river twice depending on how you interpret the Latin. And the whole idea is that either the participants have changed or the physical embodiment of the river's change and the same thing with markets, right? So what you're kind of asking right now presuming that this was a clearing event is that all those things that were in place in, let's call it June, are in place again today. And that's not true. We just heard Neil talk about the Fed and what's happening to rates and what's happening to financial conditions, right? You also had a player, Leopold in this case, who was large in leverage, right? He was taking a dollar's worth of capital and using leverage to pretend like it was $4 or $5. And so was able to drive up the value of these trades. That's probably not coming back, at least not in that personification, right? So you never stand in the same river twice. I think that's really important to recognize here because that's where we are. So kind of looking at this as a snapshot is very one dimensional thinking that we're just gonna go right back into April. Now maybe the world is short compute, right? Maybe the world is too long software. All that can be true. These things can be true at the same time where the market just doesn't end up really rewarding it. I don't think you have to look any further than in video, which is two years ago in video was all the hype. And essentially this stock hasn't done anything since. Is it cheap? It is ridiculously cheap. Is it also a multi-trillion dollar company? It's also a multi-trillion dollar company, right? How many more trillions can we put on to Nvidia from here? And so the market just have a way of disconnecting from the Carpenter Square, if you will. Not everything's plum, not everything square. And the market will act differently than what the stories are. And I think that's what we're seeing here. So yes, what have we done for us lately? What we're gonna do for us going forward? I think that we had a clearing event. I think that was this week. I think we're gonna have a big bounce. I think we'll rally a lot of these things back to the 50 day. And I think it becomes interesting from there. Do we have winners and losers that go on to make new highs? Absolutely, there will be names that will go on to make new highs. But I think the majority in kind of the big picture thinking is that they'll rally and then they'll fail. And then they'll go into this anonymity for an extended period of time. And that's usually what happens. If we look at the history of momentum crashes, we are probably 75, 80% through the kind of physical embodiment of the destruction, right? Like we've seen a lot of the tear off. What we haven't seen is usually the time dimension that goes on and is required to just, again, make people, it just frustrates people. So you get a lot of volatility, you get no returns, and a new story will pop up, right? Maybe it's about biotech or I think it's gonna be in healthcare. So that's my proclivity. And people get excited about that. And the charts which are now breaking out will then have a narrative associated with them as we look at the beginning of the year. That's what we look at in February and people will ask. Do I need to own this much micron or do I need to own this much sand disk or should I move on and have some other exposure? And I think that's what's likely to happen. So yeah, gun to my head. I am buying them for a trade, but I'm also very, very willing to shoot them in the back as you get 50 day moving average because I think it's gonna be frustrating as we move forward. - Yeah, I mean, talk about, I mentioned the beginning about the research coming out and collection stuff. I feel as if your team's just gotten bombarded with the emails. You can't take a break at all with the amount of questions coming in that's unbelievable. Everybody wants to know what the next move is here. And the managers we talk to are just frustrated, you know, just asking questions like crazy. I'd say if these guys that are running money are frustrated and markets are close to new highs, you can imagine what the American people are feeling right here. - Look, the danger of bubbles is exactly what we've seen, right? Because if you don't play, you get dinged. And when you do play, you get dinged, right? It's a no-in situation. And you know, the term we use is in a bubble, everybody gets burned, right? It's just a matter of, is it a first degree burn or is it a third degree burn? Leopold was a third degree burn, right? And we just hope that with our clients, we can keep it to a first degree burn and isolated. - Yeah. - By the way, I mentioned Leopold in today's daily. And I thought your time, right? talking about Shantaram and the bar in Shantaram. Great book by the way, apparently a great bar. Moonby, what do you guess not? - No idea. - As they said, the cliff clavans in cheers. What colors the sky in your world cliff? (laughs) So I feel like I'm talking about you. - Good book, you guys can look it up. Pavlik, what do you got going on down there? - I think you've recently upped your odds here of a Republican package prospect getting passed here. - Well, like you said, it's all relevant, but yeah, I think before I was very skeptical of additional reconciliation package, probably 15 or 20%. Now I'm gonna be closer to 50%, but that's dependent on two things that could force Republicans to act, suspect the reluctance. One is a desire to avoid government shutdown on September 30th. That's the fiscal year end. If the Senate next week cannot pass stopgap extension, then Senate majority later John Thune has threatened to use reconciliation to do that. So that would be one forcing function, that's the thing to watch next week. The other forcing function would be the war in Iran. If it continues to escalate, there's gonna be a need for money and that need's gonna come sooner. And I think what you've seen is the administration pivot from an additional war supplemental request that would require support amongst Democrat lawmakers. I think the White House has concluded, they're probably not gonna get that and the political price they'd have to pay in order to do that in terms of being Democrat demands. The juice isn't worth the squeeze. So again, depending on the war in Iran, which appears to be trending towards escalation, that could force Republican lawmakers to act soon. And now there's another added wrinkle that I would keep an eye on too. It's not a forcing function, but there's a political desire here and that's for Republicans to also address the debt limit using reconciliation. You might recall that they did this as part of the one big beautiful bill last year. In the political calculus, it's pretty simple. We don't wanna provide the other party with negotiating leverage. And so that's pretty where I think the White House is looking at this. And that leverage for Democrats would only be enhanced next year if they win control of one, if not both, chambers of Congress. So I think the administration is gonna force, try to force Republican lawmakers to back this again, many of them already on record driving done that. So you think about what the election impacts would be for markets. Usually divided government means greater threat of the government shutdown. We just had the longest one record and that was without divided government. And you also have greater risk of defaulting on the debt limit, which isn't really supposed to become an issue according to the bipartisan policy center with respect to that X-date, that's sort of maybe a third quarter event for next year. But if you could just go ahead and remove that, my guess is the administration would ask it to be removed until Trump's out of office, which is January 20th, 2029. Again, that's just one less thing you have to worry about from DC. - One last thing, I know there's not much more they can do this year. So it's one of them, maybe another one. We'll come back to that. Neil, you talked earlier about declines about the numbers this week. GDP was pretty good and consumer spending pretty good. All in. So is it really just down to inflation for you here? - Yeah, I mean, inflation sort of owns the Fed's reaction function. GDP, the headline number was one and a half percent, but when you dig onto the surface, the private domestic demand number was actually pretty solid with strong consumption and investment spending. I think going forward, there's probably, you could make a pretty good case to say that consumer spending isn't going to be a strong going forward as it was in the second quarter. Obviously, there's a hangover from the World Cup, Prime Day, America 250, that's all sort of stuff that pulls consumption into the present at the expense of the future. So there's probably some reason to anticipate some slowing and consumer spending, but beyond that, you have a fiscal tightening. You don't really see very strong weight in salary growth, so there's a limit to how far people can keep drawing down their savings, right? The gas prices are probably going up again a little bit. It kind of makes the shock feel a little bit more permanent in nature. So I think you can make a good case that consumption slows down for the remainder of the year. But yeah, I mean, to your point, let's just assume that underlying growth is around 2%. That's more or less close to the Fed's estimate of potential. So GDP is more or less on the nose, and inflation is not. And so that means that the inflation outlook is going to kind of drive everything at the moment. And-- - I don't want to get you on a tangent here on productivity, but that is a bull case for a lot of people out there. And I know Warsh mentioned it as well. Where are-- Let me set you up a little bit. Where are you with this productivity story and the bull case side of it? - Yeah, I mean, I think-- Look, GDP is running about two, and total hours work are running over one. So that was the big story from where we were six months ago is that the labor markets have done a little bit better. And so if the labor markets are better, and hours are up, and GDP is more or less where it was at the end of last year, which is around 2% in real terms, then there's no productivity boom. So I think what's fascinating is that the policy statement basically said that productivity growth is strong, but when you look at the data, it's very difficult to make that claim. Like, at least over the last two or three quarters. I mean, productivity is more or less, you know, it's like 1% maybe. I mean, it looks even worse than that, to be honest. So, yeah. I think that was interesting. I mean, the fact that there wasn't more internal pushback to keep saying that it was strong, I thought was pretty interesting. We'll see what happens in September when the data are actually released. Yeah, Jeff, the market cycle clock and our work in other areas of show and energy is a good sector to be in. I don't think we get a lot of questions on it. Outside the guy's dedicated to it, because people just have thought it was more more related. We had our sector snapshot on it, still bullish. Any takeaways from you on this? Do you buy in the dip here? Yeah, I mean, you hit the nail on the head, which I think people look at energy and the reaction energy head to Venezuela and obviously I ran most recently. These were good charts before that, right? And that's-- to us, that's important. These were already trending charts. They're very cheap. If you look at it historically on the valuation measures that matter, there's some of the cheapest stocks in the current environment. And they are relatively under-loved. One of the things that you find is that sentiment tends to chase returns, not the other way around. And so the better the historical returns, called over the last quarter or six months, the more optimism people tend to have. And that's just not the case with energy. They were very optimistic back in April. We flagged it in our ETF work and just said, hey, this isn't the place that you want to be really pressing into this trade, but by weakness and by over-shole conditions. And we've seen some of those. And they've held. And so, yeah, I think they're not sandists. They're not Western digital. They're not micron, right? They're not that exciting. But I think they just continue to pump out decent returns, pun intended. And yeah, I think there's more to that story. The market cycle clock, if we're going to get a slow down and aggregate demand, then obviously it's going to be tough on energy from this point. But it doesn't look to be much risk of that in terms of what the charts are saying. What we have to be very careful of just from a broader perspective is we do see tightening financial conditions. There's no doubt about it. The question is whether or not those are leaking into the real economy and having an impact. And we've seen a marginal. And when I say marginal, it requires a magnifying glass to see this kind of uptick in, say, high yield or investment grade credit versus treasuries. But that'll be important. If those start to move and trend, then that's going to be a tough place for energy. But even that, I think the downsides limited, not only from evaluation perspective, but also just because there's not that much enthusiasm. So if you don't have a lot of people to jump overboard, you're not going to rock the ship that much. And so I think it's still a relatively decent place to be. The sector snapshots. We don't do it. But they'd be interesting to have a sentiment indicator on them. On the click, I'm like, readership, energy reads-- we don't get huge readership from these ones. And they're the areas that are sneakily doing well. You get your big readership numbers in the obvious. You mentioned earlier, the report you put over July 4th weekend on the bubble. From my seat-- Top. Top. Top. Top. Top. Top. Top. Top. Top. Top. Yeah. The bubble's earlier. Yeah. From my seat on July 4th weekend, I think it holds off on it. Meanwhile, it's probably our most requested report that we've had. So that sort of lines up where everybody is right now, right? I know people in this business, they can't go three days without some action. And so after a day off, they start to Jones. They start to get that itch. And that's exactly what happens. That's why I like to publish on 3-day weekends, because I'm one of those people that by Sunday, I'm like, All right, I got it like I need something to keep me going here seems like my weekend. summary as the opposite effect. No one clicks on it. No one reads it. Looking for other stuff to talk about. I know we have the mailbag here, but Neil, you're big like DC comic adventure. I don't know the difference between the two sides, but I know people take it seriously. You go on a spider rant tonight. I will be. I will be in your usual uniform or just wearing what you have on today. Probably what I have on more or less. Taking and taking the boys to go see spider-man today. Yeah, it should be good. People are hyped up. Almost weak. It feels done nothing, but I am with these theater stocks. AMC. What can I say? I mean, I don't know. We had the writer strike. I mean, I'm not like a single stock. This is not investment advice, anyone. I mean, Jeff can talk to you about the technicals on those charts, but it does feel like a golden age for movies. We basically had the industry effectively shut down. Now you have, gosh, I mean, you see all the news with Odyssey. People are like, where can I find the nearest IMACs theater, Odyssey, Spider-Man. People are excited about the RDJ coming back to the Marvel with the Doomsday and then Doon 3. I mean, there's just a lot going on. People. Oh, we're Story 5. Yeah, Story 5. I mean, gosh, my wife who doesn't really go to movies all the time. I mean, she went to go see Devil Wars product too. I mean, it's just like, yeah, I know the stock's look. I'm assuming they're up into the right. They're up trends. Well, the two two of AMC said the numbers were as high as they've been since 2019, which is unbelievable. Two popcorns and two two sodas later for 54 bucks. I'm like, man, I remember now why I watch Netflix. That's unbelievable. Well, that's why you have five kids because then you buy so many tickets. You get some rebates. Popcorn, right? Is that right? Yeah. So I did go see The Odyssey and it was good. It was three hours. If you read the book, I'm a big, I'm a big history fan, so I'm pretty well versed in The Odyssey. If you read the book, you'll probably be disappointed, but I'd still say it's a B, but I think the best part was, you know, my wife hates this, but no matter what whether it's a Broadway show or it's a movie, I'm always looking at my watch at some point, right? And I waited for two hours till I looked at my watch and I was not even like, I wasn't upset, right? I wasn't upset that I had another hour to go. I'm like, okay, this is actually going along pretty well. So for three hours, it was definitely a win. It was not a hard three hours, which it's, it's, I don't know about you guys, but like when we're looking for something to watch on Netflix, the first thing I do is look at how long it is because if it's over, if it's anywhere close to two hours, once it gets kind of over that 110 minutes, I'm like, ah, I don't have time. I don't have time. I can't do it. But this one was worth it. It's good. Well, Neil, report back next week and tell us your thoughts. I know we got a big crew going tonight. I don't think they're dressing up either. How do we ring in Harry for the mailbag? Their doorbell? Oh, there he is. Yeah, no knocking. You're on it, you're sure? I sure, I want to tell everybody, AMC 25 at the Times Square, their Dupy Theater is my favorite. And he Dolby. Dolby Theater. Yeah, that is so good. I went there for, I'm sorry. Is it an I max? Yeah. Yes, it's I max. And also the sound is surrounding 3D sound. It's fantastic. I can't imagine a word. And this is no offense, Harry, but like going to Times Square first is no. And then going to the movie theater there, it just sounds horrible. How do you think? When I go to see Avatar 3, that was in winter time. And we stand outside for like two hours waiting for the movie time. That was terrible. Well, the good news after the movie you can get a picture with one of those people on costumes and you think you're there. Yeah, take a picture next time. That's great. Okay, let's go back to our mailbag question. Today we have the question come from pushback for wrench. His question is what are the odds of clarity act passing? That's it. Thank you. That's you, Pavlo. I was just thinking I assume that's when it's for me. It's just for those that maybe aren't aware of the Clarity Act is the digital market structure bill that would provide regulatory framework for the crypto industry. And I think that's why you've seen a lot of named in that space move along the headlines there with prospects for bill moving. I guess I would maybe hedge a little bit. Do I think it's going to pass next week? No. And I'd probably put the odds of that at about 5% just because I don't ever really ever use zero. Because the Senate is mostly Thursday. I think they have some other things that they're going to be working on with respect to a stopgap bill and maybe a sanctions package. An absent, a unanimous consent agreement. I just don't think that's going to happen next week. And that's problematic because you're probably not looking at tackling that at best until after the midterms. And if the elections go as history and poll suggests, Democrats are looking to make some gains there. I just don't really understand they're incentive to go along with something in terms of an ethics agreement that President Trump's going to assign and actually abide by. So 5%, which is again my equivalent to zero for next week. And then after the election probably raised that thing up to 15 or 20 right now. But that said, there are reports that these Democrats have provided a counter offer in terms of ethics, language. Again, I don't believe the White House has signed off on that. So I'm still very much in the skeptical count there. Now, I should point out too that if the Clarity Act is not passed this year, it's unlikely to move at all under Democrat control. And that's problematic for the industry because if you have legislation that becomes law, that's much more durable and executive action. And so you could look potentially at another Democratic administration coming in, much more adversarial to crypto industry. I'll get against Lorette SEC. Did you want to timestamp this one? I said it's 947. I believe AM. So if things break after you have seen this, don't hold me accountable. Always, always the time stamp. I don't want to mess up the conclusion to see if you read something or just say, I don't do this. Ask us what we're after you're watching next week. I never made it this far in the podcast. What are you guys watching next week? I'll start because we have a lot of data coming out next week. So we're going to start with the ISM manufacturing. That manufacturing is generally been not solid when you look at the data. I will say that the PMI figures have definitely been more upbeat than the actual data. So when you look at manufacturing production, it's up about a percent. But when you look at the ISM, it's consistent with manufacturing growth much stronger than that. So maybe there's a little bit of vibes going on here. And then we book in the week with the payroll number. It looks like jobs growth is cooling somewhat. I mean, we're still, when you look at some of the weekly ADP data, it shows some slowing in jobs growth. We had a weaker than expected number last month. On the flip side, I mean, initial claims remain very low. They also remain low. So we'll see. I don't really expect a big major surprise one way or the other. And that's it in terms of the data. We're going to start to hear maybe more from from Fed officials. I mean, so that's something to keep an eye on. So for example, just today, we had Beth Hammock and Neil Kashkari discussing why they dissented this week. So we're exiting the black out period. And we're going to hear from Lisa Cook next week as well on the economic outlook. Cures to see what she says. Wouldn't be surprised to see her voting for a hike at some point. So anyway, that's what's on deck. On deck, excuse me. Jack, we already got you, Pavlo. Jeff? Yeah, I think we'll see the follow through from this this force selling to the upside. We're going to see the follow through there. Again, I think the 50 day moving average is going to encapsulate a lot of the strength and help. But I think we go into the dog days of summer, which is, you know, kind of a list list list trading. And, you know, people get pretty amped up about what's going on. I can't remember what's happening from an earnings perspective next week. I do that later today, but I don't have that right at my fingertips. But I'm sure there'll be some more volatility around around that. And then the bond market, you know, that's going to be important. And maybe the one thing just to catch people off is you did have some yen intervention, I believe it was overnight. And so the yen is getting to that. And we've warned about this getting to that point, basically one six year above where the Japanese officials start to get uncomfortable with the end weakness. And, you know, I think that's just something to keep on the radar because yen weakness is a source of liquidity, yen strength is a source of of three children. conditions tightening. So if it becomes a little bit more rampant, I don't know that it will, but that would just be something to keep on the radar as a potential oddity that could be disruptive. Well, as I mentioned, the beginning for clients, we have a Monday morning macro meeting every week, 8 a.m. live with a replay. That is the data that is upcoming and our current thoughts versus the podcast, which is backwards looking and as you can tell, way more informal data. So the Monday morning macro is us more formalized, fresh data, wearing collared shirts all around. Appreciate you guys joining us today, American voucher. Jeff DeGraf. Neil Detta. Steve Peffa. Neil, that. See you guys. See you. Hey, it's Steve. Thanks for listening to the show. Small slice of what we do here at RenMax. So if you liked it and aren't already a client, go to RenMax.com and request a free trial. 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