But in terms of the economics, the pricing, how you kind of see this, this movie playing out, you know, have you seen this movie before? And then I want to get Gene's reaction to it.

I think this is very good.

Lots of impact there.

So, again, I think A is a wonderful thing.

I just don't think it's a good investment.

I'd like to, by way of example...

If you look, to go back to 1989, the internet, and listen, this is not .com.

What is a Ponzi scheme about that? That is just smart business.

the money.

And I said at this turn of the year that sometime during this year AI is gonna come with a serious question.

I'm putting out a video on that as well.

And the problem I have is, you know, it's an easy way to keep the bears quiet.

Show me the money.

They can't.

And you have an industry where costs are collapsing and the pricing on compute and tokens is collapsing at a breathtaking rate.

What is your level of confidence that AI is a bubble? What is your level of confidence that it's going to pop within the next 12 to 24 months?

What do you think of AI? What do we do here?

Why not? I'm surprised.

I thought you would never ask.

You know, as we all like to study history and we stand on the shoulders of giants, I was reminded of this quote.

I pulled it out coming in here today.

Widely attributed to Mark Twain, although it's not clear he ever said it.

It's easier to fool people than to convince them that they have been fooled, all right? Or that's another version of what Soros once said, the real way to make big money in the market is try to figure out what is it the market believes it's not true, but more importantly, identify when you think they're gonna realize they've been had.

But what do you think about oil here?

How rare is that, that you're making money both ways?

Well, I guarantee you our results next year will not be as good as they've been this year.

I mean, it's obscene.

I don't want to mention it, but just go on our Twitter feed or on our sub stack.

As Peter Lynch always taught us, it's a market of stocks.

You know, the lazy, easy, seductive thing to do is sit around and try to call the market.

It's a market of stocks.

But what do you think about oil here?

Anyway, what's your take? Do you

agree? I couldn't agree with you more.

Let me think about this for a second, okay? Imagine you're producing widgets.

We have a labeling widget company, and I'm your customer.

I can't afford to buy your widgets.

You lend me the money.

Then I buy the widgets from you.

Is this a rage story? Yeah, go

Go to hedgeye.com/research for more information.

So deceptively simple question, not so easy to answer.

And as I'm reminded, I can't recall who said it, you know, path o- path is often more important than prediction.

So we can talk about where it's gonna end eventually, but how would we get there? You know? If you're short Enron, and it goes from, you know, it goes from 100 to zero, but at one point it goes from 30 to 50 before going back down again, I promise you at 50 on the inter- in the, in, in intermediate rally, I've been screaming like, "Oh, everything's good now.

Look, it's up 65% off the lows.

Up off the lows," as they say on the Cartoon Network.

Um, there's been a tremendous misallocation of capital, and this gets back perhaps to the biggest story I wanna leave with you guys.

Like, this whole gambit about, about correlation and how diversified you think you are is, is just wild to me.

I would love for you to explain why it's so dangerous and how long has it been dangerous in your view?

There was a famous economist, Herb Stein.

He was, I think, serving in the Nixon administration.

He famously said, that which can't go on will stop.

You know, how much further, how much more can we keep spending more and more and more money, running up bigger and bigger deficits? We can, it's just at what price? Who's going to buy the bonds? So you have right now, so let's start with the bond market, because I think the bond market is driving the bus on everything, even though I'm an equity guy.

You have runaway government deficits in combination with a CapEx boom.

It's not just demand for capital from hyperscalers.

What does that look like? When you say the market breaks, How does that one?

Right.

Just look at the chart and hear the story.

And oh, by the way, if the stock's big enough in the index, the, the, the price will be, uh, appreciation will be augmented by the fact it's passive, the passive bid on all this stuff, all right? So there's no price discovery.

There's no price discovery, which creates threats and opportunities.

When the force is with you, when the passive bid is all the rage in the market, and there's money everywhere, um, as Charles Gott famously once said, "If you have more money than fools, you have a bull market.

If you have more fools than money, you get a bear market," okay? [laughs] Okay? It hasn't really mattered.

Like, I'm, I'm gonna put your ph- I'm gonna, I'm gonna push back against you, Steve, all right? No, I'm, I'm with you.

Okay.

What should be their action into the autumn?

Why am I not surprised by the question? We spoke about it a couple of months ago when I was last on.

Things have gone from bad to worse.

And let's just step back for a second because there's so much day-to-day volatility, this announcement, that release, et cetera, et cetera.

Most recently, all this stuff over the weekend.

I mean, Tom, Paul, think about this.

You have a commodity that's deflating at record speed with debt that's being built up at record speed.

How does that play out? Is it play out where, like in August of 1998, it just breaks because of leverage or whatever? Or do you see it as just sort of ebbing into some form of cataclysm?

How does that play out? Is it play out where like in August of 1998, it just breaks or 'cause of leverage or whatever, or do you see it as just sort of ebbing into some form of cataclysm?

Well, what's, what's really interesting here, much has been said about the passive bid and indexation, and much has been said about the huge deficit spending.

And so if you think about past cycles, Tom, what will bring on the contraction is if stocks go down, corporate managers cut back, and that gives you the economic impulse to have a slowdown, if not recession.

With stock prices, though, continuing to stay up there, that sort of information content from the pricing was missing, all right, and they keep driving the economy with more fiscal spending.

So to your question, everyone wants to know what's the magic level of rates that is gonna cause this thing to topple over.

Uh, as you know, I've been pretty outspoken about Scott Bessent and what the Fed's trying to do.

And you know, on August 19th when he said, oh, we're buying bonds and we're going from 2 billion to 4 billion or 4.8 billion, whatever the number was, I said, no.

How important, Dominic, is it tomorrow for the Fed to show the market a unified, uh, kind of, uh, stance here?

... buying miners? Or-

I mean, I mean structurally you need to be go- you need to be long gold and then gold miners.

Uh, let me just tell you one other story.

I just think it might illustrate the point.

Uh, I gave a presentation at a conference last year, and I put up a chart of the bond market, the TLT, and I asked the audience, I said, "What do you think of this chart?" You know, it had crashed, bond market went down for four consecutive years, now it'll be a fifth consecutive year.

Crashed and was kind of like rallying.

It wasn't rallying, it was just going along the bottom.

Have you seen, um, this setup before? And as someone who has some battle scars, like how do you see this one playing out? Because again, like a lot of us don't have those battle scars.

I'm gonna pull this up, yeah.

That's not the point.

That's not the point.

'Cause some of us tried to warn people, all right? But everyone gets so...

Yeah, that's the article.

Everyone gets so drunk on, um- You know, the fact that prices are going up.

There was another article I saw yesterday.

Yeah

Uh-huh.

And Grant-- GMO's assets went from like, I don't know, like 45 billion down to 18 billion.

They didn't lose money.

They just-- The clients just said, "The hell with this.

We want tech.

We want tech stocks.

We, we don't need your value stocks," right? It went from 45 billion to 18 billion.

[laughs]

What's the distinction right now versus '98, '99, and then what we enjoyed in '01?

Um, again, I, I wanna elaborate on the sheer magnitude of this.

Um, Julian Garrid of Micro, Macro Strategy Partners in the UK, an erudite economist, I've known him many years.

He's made a calculation that this, uh, bubble, uh, this, this mal-investment is 17 times, 17 times what we saw in the era of dot-com.

And what's allied to that, what's really important is the, the sums involved are so much larger relative to the real-

On overseas, in the huge ups and some of the challenges you had at T. Rowe as well, are you correlated on overseas to what the dollar does? Like, do you have to have a weak dollar to make overseas work?

N- no, you don't.

The, the...

What's the distinction right now versus '98, '99, and then what we enjoyed in '01?

Um, [clears throat] again, I, I wanna elaborate on the sheer magnitude of this.

Um, Julian Garrid of Micro- Macro Strategy Partners in the UK, an erudite economist, I've known him many years, has made a calculation that this, uh, bubble, uh, this, this malinvestment is 17 times, 17 times what we saw in the era of dot-com.

And what's allied to that, what's really important is the, the sums involved are so much larger relative to the real-

Yeah.

Okay, starting from next month when the quarterly earnings come out, you're g- 20% of the shares come unlocked shortly thereafter, and then there's a whole series of unlocks, 7% every 20 or 30 days.

By December, 100% of the shares will be freely floating.

The point of- the important point that investors should understand is even without any change in the fundamentals, when you go from a 5% float to 100% float- [laughs]

high street inflation, consumer prices,

that is the source of the K-shaped economy.

The owners of the assets are doing really well.

Those who don't own the assets, not so much.

And so this asset inflation, which K-shaped economies combat, Results of a monetary policy, recycling, the surpluses, the deficits on the trade side.

I think he wants to try to get away from that.

He's been talking about a smaller balance sheet.

he just proved my point

George, what is your bear case for bonds? Why are you thinking rates go up?

By the way, Jared makes a lot of sense.

Damn straight.

I think it was a Voltaire quote.

What is it? Doubt is an uncomfortable condition, but certainty is an absurdity.

So I'm riddled with doubt.

Easy Voltaire.

Is there anything in the markets that we haven't covered, George, that you would like to talk about?

What do you what do you what are your thoughts when I say there's no fundamentals that justify anything that's happening right now?

Well, if someone tells you that they think they know what's really going on, they're either a fool or a liar, all right? I've been at this 45 years.

I've never seen anything like this.

And most of the folks I speak to, the fellows with a higher investment IQ, would tell you the same thing.

A lot of the old time-tested rules and first principles for investing are have fallen by the wayside because of this tidal wave of liquidity and constant interference in markets from governments.

And so one has to be respectful of that.

And I guess the analogy I would use, I've used this in the past.

do you think we're you know you mentioned that we won't default but a soft default is that what's happening now george

Um, what's changed? What's been reinforced? What's been on your radar of late when it comes to the economy and the markets? And as you know, George, you can take all the time you need to set the table.

Thanks, Julia.

Um, I took a few minutes to review what we spoke about last time.

As folks like to say, I'm seldom right, never [chuckles] an out.

But we had a reasonable number of decent predictions in, in early February.

Um, as I look back at the show notes, at the transcript, we talked a lot about the downbeat outlook for the bond market.

I was negative on bonds, I was positive on energy, and this is before the extracurricular activities in the Mideast took place.

Mm-hmm.

How are you thinking about the miners? Like what is a miner that would make you bullish on them? What, what is the difference between a miner that you're bullish on and a miner that you're less bullish on/bearish on?

So I'm gonna, again, I want you to follow Zach.

He's so good.

Um, he points out that, you know, not only is SSRM selling on whatever it is, seven times earnings, it's kind of three times cash flow.

They sold their biggest asset, their Turkish mine.

They took in a billion five in, in cash for that.

Plus they're, they're, they're generating hundreds of millions of dollars in cash flow per year.

[laughs]

Share with us some of the main insights that will be gleaned and given and, and some of the biggest hitters that are gonna be speaking, please.

Thank you, Rena.

We've had three conferences so far, stock picking ideas.

This conference is gonna be dedicated to income investing, which I know is a topic that's near and dear to many Seeking Alpha, uh, subscribers.

In a world of runaway fiscal deficits, irresponsible policy, bond markets which are in disarray, I think we've had four consecutive down years in bonds, and we're looking at a fifth one now.

What are you supposed to do with your income portfolio? You take the traditional 60/40 portfolio, what are you supposed to do? And so, you know, bonds historically, look at the 60/40 portfolio, their inclusion's really been designed to hedge your equity exposure, i.e., if we had a recession and profits went down or markets went down, the bonds, the appreciation in bonds would offset that.

Historically, that's worked.

Where are you at these days?

How are you interpreting this one?

Yeah.

So the, the most important point I would make, again, I'm gonna defer to our good mutual friend, Michael Howell.

Bank of China and most foreign central banks continue to buy gold relentlessly.

You probably saw the data out yesterday.

I think they bought, like, what was it, like, another eight tons, whatever the amount was, in the month of, uh, I can't remember if it was March or April.

So the PBOC, they're buying gold.

Why the pivot in the name, George?

I think it's worse than that, actually, but go ahead.

Yeah.

You know, so I, I, um...

You know, I, I, I, I've been active on Substack the last few months.

I started writing in December, went to a paid Substack in February.

Anyway, um, so I started to write up a couple stocks-And I haven't really written a report in, I don't know, 30, 40 years because I started my career back at Fidelity in, in the, in the '80s.

So I went and I pulled out of my box in my basement what's known as an investment committee report, ICR.

Yeah.

I agree with that.

Okay? I'm not saying go short the market.

Uh, full disclosure, I've shorted more stocks.

I wish I never knew one eight hundred stock loan, okay? It's a bad business to be in [laughs] right? But there's huge dispersion.

There's huge winners and losers.

I think Tesla is gonna go down 90%.

I think Freshpet, which was pumped at the conference we had last week by Jim Chanos, which just blew up two days ago because Costco's getting in the same business, that's gonna go down 80%.

Yeah.

companies.

Take nothing away from them.

As we all know, for quite a long period of time, from around 2015 to present, you know, U.S. exceptionalism, the S&P beat everything by a wide margin.

Tech stocks beat everything by a wide margin.

It wasn't random.

I mean, it was justified.

Sales went up, earnings went up.

Is there any part of tech that you like or would encourage investors to look at differently?