Bizarro World Podcast,
with Nick and Gerardo
Oct. 10, 2022
Gold and silver got a bump — rising the most in three months — as the US dollar and bond yields pulled back. Will it last? Or will the dollar and yields resume their upward trajectory, keeping the precious metals range-bound? OPEC announced a two million barrel per day cut to oil production. What does it mean for the price and was it a political move? The SEC won’t let Kim K. be. The current and former First Families are under federal investigation. Elon’s spat with a Ukrainian diplomat. Where Are the Blue Lives Matter People? Biden pardons federal weed offenses. And a bear market update. This is episode 189 of the Bizarro World Podcast.
2:38 Where Are Gold (and silver) Prices Headed
10:24 OPEC to Cut Oil Production. Does It Matter?
12:17 The SEC Won’t Let Kim Be
17:07 Fourth Turning Update: Last Two First Families Under Federal Investigation
20:52 Elon Musk & The Ukrainian Diplomat
26:31 Where Are the Blue Lives Matter People?
30:49 Joe Biden Pardons Federal Weed Convictions
Gerardo Del Real: The UN is begging Jerome to quit hiking rates. It's getting real out there, everybody. We talked about a potential dollar top last week. We'll talk about gold strength this week. We'll talk about OPEC cuts. We'll talk about Hunter Biden. Hunter might be getting grounded soon. We'll talk about the Trumpster. He might be getting his Twitter account back soon. We're going to talk about Elon. We're going to talk about Ukraine. We're, of course, going to get into all things funny and offensive. I am Gerardo Del Real along with Mr. Nick Hodge. This is Therapy Session number 189, otherwise known as Bizarro World.
Nick, how goes it, sir? How are you? I didn't ask you how you were last week; I felt bad afterwards. I just had assumed that you were doing pretty well. But how are you this week?
Nick Hodge: I'm doing good. I'm in a new office. Sorry for the barren walls. I'll get some stuff up there eventually. At least they're freshly painted. I'm doing good. The markets are the markets. They continue to be bearish. I don't think the UN is going to change Jerome's mind.
Gerardo Del Real: The UN is begging the Federal Reserve chair to quit hiking rates. What is going on in 2022, Nick?
Nick Hodge: A lot of noise out there, but I'm sure we'll get into it. Q3 numbers are about to come out, and you just had three down quarters of the S&P in a row, and I think that's going to continue. So other than being bearish and pessimistic, I'm doing good. How are you, Gerardo?
Gerardo Del Real: I'm doing well. I'm doing well. Look, I think by the time people watch this or read this, I think Patriot Battery Metals (TSX-V: PMET)(OTC: PMETF) have their financing closed. I know there's a ton of assays in the lab that they asked to hold off on while the financing closed to avoid a conflict of interest. I'm excited as all heck to see what those numbers look like. And I think whatever cap there was on the share price, and I mentioned this last week, I told you you should have been in the market taking advantage of that weakness.
I think given the close today on Thursday the 6th, it looks like that financing will be closed soon. And the weakness in the stock, I mean, we're talking slight weakness, right? It's 15% off. It's all time highs, but I think that is done. So I'm excited there. I mean, there's bull markets and stuff, right? We've talked lithium. Uranium is a bit stagnant, but I think that's coming. I had a great conversation earlier this week with Uranium Energy Corp. (NYSE: UEC) CEO Amir Adnani, who is as bullish as I've ever heard him, and I've known him for quite some time now, as have you. I think there's a lot of opportunities out there and, yeah, excited to get to it.
Where Are Gold (and silver) Prices Headed
Let's get right into the markets. Let's talk gold. We talked last week about gold needing to close right around or above that $1,684 mark on a monthly level to kind of reestablish some support. It failed to do so, but it started the month off pretty strong on the back of a weaker dollar. That index went from 115 to 111-ish the last time that I looked this week. And so correlation there, rates are doing what rates are doing. I know that's a lot in one question, but how do you see the recent strength in gold, and do you think it's a head fake?
Nick Hodge: It's complex. By the time you heard last week's podcast, it would've been the close of the month. Like you say, gold prices didn't make it back to that support level in the $1,680s, but they did after, and exactly like you say, on the back of a dollar weakness. But I think it's a short term fluctuation, so you got to be able to have a couple of thoughts in your head at the same time. One, that gold can be weak in the short-term, but still be in a long-term bull market.
The only reason gold went up, and you lump copper in with that as well, is that the dollar pulled back and rates went down a little bit, but that's temporary. You're already seeing rates starting to go back up, certainly in the UK despite what the Bank of England did, and I think you get a reprisal of the bull market in dollars in the US as well. And so I think it's a short-term thing, a short-term bump for gold. Everybody came out of the woodwork last week, all the bugs came out from under their rock to tell you that silver was at $20 and going to $30, and it was the best week for gold in something like three months, I think. But a short-term blip, I think, in the overall trend that we're in, which is not necessarily down for gold, but certainly not a short-term bull market.
Gerardo Del Real: Well said. I couldn't agree with you more. It would not surprise me to see the dollar absolutely rip here in the next several weeks and coming months. And then I think by year's end we have a situation that looks very different than the situation we're in now, but it's only October, y'all. And I told you last week, October has a track record of being host to a lot of very important instruments in the financial space breaking, right? So when we talk bond markets, when we talk stock markets, I've been watching credit default swaps all week, Credit Suisse credit default swaps. Those, the premium on those, Nick, I don't know if you saw it, it looks like a Viagra chart, straight that way. So-
Nick Hodge: At least something's going up.
Gerardo Del Real: Something's going up. People are getting nervous, right? People are getting nervous out there. And so anytime I see those premium spreads widen the way that they've widened there, it tells me something's not right under the hood. And I know that Bank of England and Bank of Japan, and they've all done quick pivots and reversals, but again, we have to look at the market as a whole. And it doesn't just depend on two governments or two central banks deciding to pivot, it's going to take a little more than that.
And there's countries that are hiking rates. Mexico just hiked a month or so ago, or a couple of weeks ago, I'm sorry. The Bank of Canada is busy. No, yeah, it's a long-winded way of saying, "Spot on with your analysis." Very complex times. It takes a lot to keep track of all of it, and hopefully this can provide a little bit of guidance on what you should be watching, right? Watch the bond markets, watch those yield spreads. And then look, again, there's bull markets out there. You just have to find them and make sure that you're allocating capital towards those companies that are bullish internally, bullish on the macro side of it, and cashed up, because this isn't the time that you want to go to the market, right?
Nick Hodge: Yeah. I mean, interesting times, we say that all the time. Not a lot to do if you're a long-term-minded investor or speculator. I mean, I haven't been making a ton of moves. We've talked about the cash position. At the end of every week, I go and I look at my account history and see what I actually bought and sold throughout the week, and some weeks are much busier than others, but I haven't bought and sold a lot recently. The only thing I've done, really, is short the NASDAQ. We had a couple of up days and I took the liberty to short the NASDAQ.
And then the other thing I'd say is if you are willing to trade on a week to week or two week basis, then you can do that as well. I remember telling you I was going to buy some Filo Mining (TSX: FIL)(OTC: FLMMF) on this podcast a couple of weeks ago. That was your free tip from me. And I did that, and it's up 20% as copper has come up in the past couple of weeks. I don't think that's a long-term thing. I'll probably bail out of that position, take my 20% in two weeks and be happy. You never go broke taking a profit. And so there's things you can do if you're willing to be more short-term minded. But for the long-term-minded investor, I was writing today, "Go back to bed," is what I said.
Gerardo Del Real: The same Filo that just reported 1,132 meters of 1.11% copper equivalent?
Nick Hodge: Was that all?
Gerardo Del Real: That one? That Filo? Good gracious, good gracious. And I'm telling everybody, here's your free tip of the day, other than you should still be buying Patriot Battery Metals, Hannan Metals (TSX-V: HAN)(OTC: HANNF), this time next year, we're going to be having similar discussions. That's my gut feeling. And I'm not just saying it to say it, I'm telling you because I will be front running all of that and buying the heck out of it here over the next six months and establishing a very, very robust position, because I think we're going to have a lot of fun with that one next year. So everybody's yawning right now, it's C$0.25, C$0.30 cents. They just consummated a deal with Teck (NYSE: TECK), which clearly sees the potential. They came in and took some 9% of the company. And it wouldn't surprise me to see them joint venture individual porphyries, right? They've discovered seven or eight porphyry centers now just on one project, and they control an entire basin.
So yeah, short-term copper might pull back, mid to long-term copper's absolutely going to rip. I'll be bored for a year with Hannan if that's how long these drilling permit takes. As long as I can make my 1,000%, 2,000%, 3000% that I think I'm going to make, perfectly fine adding on any weakness with Hannan Metals.
Nick Hodge: Well, Teck likes what they see for sure. And not just Teck, but JOGMEC as well, which you well know is the Japanese oil and gas and mining arm. And there was a conference in Peru this week, I was reading, where they're starting to whisper sweet nothings into the miners’ ears. Whereas it's been a tough environment in Peru, like you just said, it takes a year to get a permit sometimes. They were talking about easing the way permitting gets done and not increasing taxes. And so I know there was a lot of fears in Peru, but they're least saying the right things now, which helps on the macro side of things for sure.
Gerardo Del Real: It sure beats what they were saying before, right? We talked gold; we didn't talk silver. I always call silver gold's bipolar mistress or gold's bipolar cousin, and we saw it this week. I mean, gold was up a percent or two; silver surged something like 12% over a couple of days. Is it going to go back to trade like the industrial metal that it is, or do you think it keeps its precious metals luster that it's been demonstrating here recently?
Nick Hodge: I think silver's an industrial metal. If you make me bet, I bet that it goes to $15 before you see $30.
OPEC to Cut Oil Production. Does It Matter?
Gerardo Del Real: Me too. The silver bugs are going to love you, Nick. Hashtag silver squeeze. Let's talk oil. OPEC managed to piss off Joe Biden and throw a middle finger at everybody by cutting oil production by 2 million barrels per day to make oil more expensive. This, right before the midterm elections. And this, right as Joe is out there making mistakes left and right, though he did something today that I really liked and we'll talk about that. But oil production to be cut by 2 million barrels per day. You have been spot on in your oil price analysis from a year and a half ago up until this very day. What do you see for oil, Mr. Hodge?
Nick Hodge: I think priced in. So last week, I was telling you it was going to be between $60 and $80. And I was sort of wondering why it's been going up for the past, call it, week or so. It's trading at $88 today. And I think that's about all you're going to get from this announcement, right? They cut by 2 million a day, we'll release another 10 million barrels from the reserve, Biden said. And you just don't have the backdrop there from a demand perspective given that basically the entire world is in a recession. So a bit of politics going on, I would say there more so than actual supply-demand fundamentals driving OPEC. It's interesting to see our staunch ally, Saudi Arabia, helping out Russia a bit.
Gerardo Del Real: Our staunch ally that we were just over there licking boots too? That staunch ally?
Nick Hodge: Yeah, the one that cuts up journalists, the one that puts the bombers on the plane? Yeah.
Gerardo Del Real: Yeah. American citizen journalists by the way. He had dual citizenship, y'all. In the Saudi embassy. Don't forget that, everybody.
The SEC Won’t Let Kim Be
The SEC won't let Kim be. Out of all of the enforcement action that the SEC can take.
Nick Hodge: She's the new Martha Stewart.
Gerardo Del Real: She's the new Martha Stewart. Man, y'all better leave Kim's pretty ass alone, man. That's one successful, intelligent, beautiful woman. She tweeted about a crypto thing. I mean, if Kim's in trouble and had to pay $1.4 million, they're just cherry picking for headlines at this point. Talk about clout chasing.
And again, I'm actually a big law and order guy. I just want you to apply it equally, right?
Nick Hodge: Sure.
Gerardo Del Real: I hate when people come out and it's law and order on one thing and then, "I don't see that because I don't agree with that, so don't apply law and order over here." Leave Kim alone. Any thoughts on that?
Nick Hodge: Well, first, some of these shitcoins were fake as her ass. And you're starting to see that now. I've had Miss Kardashian on a couple of slides in presentations that I've given, talking about some of the fakeness that was going on.
Gerardo Del Real: And looked good in every single one of those slides, every single one of those slides. You look great, Kim, baby. Don't worry about Nick.
Nick Hodge: My favorite are the pictures of her sisters from like five, 10 years ago and today, right? Au naturel.
And what you say is true. I mean, all kinds of celebrities, athletes, etc., were involved in crypto schemes where people lost money. And I mean, lots of people lost money in crypto this year. But even the likes of Elon Musk was using Twitter and his following to pump up Shiba Inu coins last year, and you haven't seen any action taken against him, for example. And so that's a total headline grabber.
But from a much bigger picture, there's a lot going on in the crypto space, and some of the bigger failures are being cracked down on. Do Kwan of Terra Luna infamy has a global red alert out on him from Interpol, right? Like, arrest on site.
Gerardo Del Real: Yep.
Nick Hodge: And so they're trying to get some of these people. But at the same time, crypto, despite Bitcoin being down some, I don't know, 60% from its high, if not a bit more, continues to make inroads as it relates to the larger global financial picture.
So we have Chris Curl, who feeds me a lot of this stuff and whose articles I read, but I also try to read at least the big headlines about crypto every week. And you've had a managing director at Goldman Sachs leave to go over to Coinbase to foster a derivatives market there, so making inroads into using crypto to trade derivatives. And then the real big one, which was sort of overlooked, is that the SWIFT banking system, which a lot of people didn't know until earlier this year when we started putting sanctions on Russia and we banned them from using the SWIFT banking system. You and I know it because we send international wires to buy shares from foreign companies. And so when you do that, you got to use the SWIFT banking system, and it takes a long time. I've had wires lost. I don't know if you've had wires lost.
Gerardo Del Real: I have.
Nick Hodge: Right, and it's a tedious process. It sometimes has to go through intermediary banks, and it takes multiple days for the funds to get there and settle. Well, SWIFT is now adopting something called Chainlink, which is a blockchain built on top of Ethereum. And basically they're saying, "We know we're dinosaurs and we know we need to use this whole crypto ecosystem to improve the transfer of money globally." And you had a MasterCard CEO come out and sort of say the same thing. And so while we are in a crypto winter and while Bitcoin prices remain subdued, they aren't going away as it relates to their place in the global financial system. Defi, as it were, versus tradfi, which is traditional finance. And so, don't forget about crypto is what I would say despite all the superfluous headlines that you see from the Kardashian corners of the world.
Gerardo Del Real: There was a great tweet this week that said, "People who've been investigated by the SEC: Martha Stewart, a cook, as you mentioned; a deli store in New Jersey; @ElonMusk, a Twitter shit poster; and Kim Kardashian, a fashion influencer. People who haven't been investigated by the SEC: Almost every politician and executive in power." Well done. Well done.
Fourth Turning Update: Last Two First Families Under Federal Investigation
I tell you who is being investigated finally, and we've talked about this, it looks like, old Hunter, Hunter Biden. It wasn't just crack and hookers, I think he's going to get himself grounded here soon in a very permanent way. Anytime I see a story leak that federal agents are investigating the president's son and that they believe they've collected sufficient evidence to charge him with tax crimes and gun purchase crimes, I don't believe in coincidences when there's leaks like that to the media. I think Hunter will be posting bail soon and that'll be interesting court disclosure and deposition to say the least.
Nick Hodge: I thought nobody fucks with a Biden. Isn't that what the president said this week in a hot mic?
Gerardo Del Real: That's exactly what he said in a hot mic.
Nick Hodge: It's interesting to me that the two most recent First Families both have immediate family members under federal investigation.
Gerardo Del Real: Yes. This is not a coincidence, guys.
Nick Hodge: Right, it's not like it's a Fourth Turning or a major political inflection point in the course of the history of the United States or anything.
Gerardo Del Real: They all think they can get away with it. Again, for those of you upset about my Democrat rants or my Republican rants, this is the government that the Founders warned of. We're living under that government right now. They both think they can get away with it and nothing will ever happen to them. And look, I don't know if he's guilty or not, I don't know if Trump is guilty or not, although he's being accused of taking classified files and not returning them and then they found classified files. So it looks like he's guilty. I don't know. I'm not an attorney general and I'm not an attorney and I'm no legal scholar, but both sides think they can get away with it and there will be no repercussions. It'll be really interesting to see what comes of Hunter Biden and his apparently criminal ways.
It wasn't all partying, right? Up until now I've said, "Well, hey, if he wants to pay for hookers and smoke crack, and the hookers are there consensually and accepting the money and having a great time, and he's not abusing anyone other than himself, then to each their own, right? This looks like a little bit different tone there. So we'll see how it plays out.
Nick Hodge: Maybe after marijuana Biden's going to pardon hookers and crack convictions. We'll see how it goes.
Gerardo Del Real: Definitely going to get into Biden doing a very good thing. Go Joe, right? Yeah.
Nick Hodge: Before we do, this Italian election has been making the news. And you wonder why people like that get elected. The media's calling this woman, her name is Giorgia... What is it? Meloni? Yeah. A far right, fascist politician. But in the speeches that I've heard, she's more a populist than a fascist, speaking right to the people about basically exactly what you just said, like these entrenched bankers and politicians think they own you and are a different class, etc. I haven't dived too deep into any of the racial sentiments. I know that there's a lot of foreigners that are going into Italy, etc., but clearly she's resonating, just as Trump resonated in 2016, with people for being an outsider. I would say that Trump's an insider at this point.
But it's no wonder that people like that get elected, right? I mean, they're able to resonate with people. And it's easier in Italy because there's so many political parties, right? People have more choice
Gerardo Del Real: Yeah.
Nick Hodge: Here in the United States, we know the two parties collude to get the candidates who they want to keep others off the stage. So yeah, it's global, people are pissed off, especially in Europe, which we know is already in a recession that the media actually recognizes. Whereas here, we're still approaching a recession or wondering if we're going to go into a recession.
Elon Musk & The Ukrainian Diplomat
Gerardo Del Real: Politicians were spicy and sassy this week. We had Joe with the hot mic. Did you see Elon and the Ukrainian diplomat and their little Twitter spat?
Nick Hodge: No, I didn't. Well, I saw he was saying something about the war. He was even getting into it with Garry Kasparov, the chess guy. There's a whole chess thing going on. We'll have to spend a whole podcast on it.
Gerardo Del Real: Oh, well, yeah, well, let's do that one next week or the week after. And on that note, everyone, we will be at the New Orleans Investment Conference next week, so next week being this week, so there may be a lapse in your next Bizarro World episode. We will make it up to you with some live footage from New Orleans or figure out a nice little something instead. So I just wanted to get that out there in case next Monday, Tuesday after this podcast you're wondering, "Where the heck are Nick and Gerardo and the rants and the raves and all the other stuff?"
But yeah, so anyhow, back to Elon. So he tweeted, he posted a Twitter poll, which is hilarious, because now he's back trying to buy Twitter if he's able to secure the financing and all of that. But he said he's got a potential solution to end this seven-month conflict. And basically, it was three parts. That a Ukrainian territory, which Russia annexed by force in 2014 be permanently given to Russia and guaranteed a permanent water supply. That was step one for Elon. Step two was that the four regions of Eastern Ukraine, where Russia held referendums last month before illegally annexing the land, to be put to the new referendums, this time organized by the United Nations. That was his step two. And then step three for him was that Ukraine should be forced to remain neutral, accomplishing the long-term Kremlin goal of barring Ukraine from joining the NATO defensive alliance. And in response to that, the Ukrainian diplomat replied, in a tweet of course, "Fuck off is my very diplomatic reply to you." So between that and Joe's hot mic, I'm like, "Man." They're spicy out there this week, Nick. They're on edge.
Nick Hodge: The curse words are flying around. It reminds me that we have bad language on this podcast sometimes, but it's par for the course for the world. You've got the president dropping F bombs on hot mics, man. I mean, that's just how it is. I think the curse words show passion and sincerity, and we're past the Puritan days of needing knee-length dresses.
Gerardo Del Real: Look, I grew up on George Carlin and Richard Pryor, everybody, so I don't know what to tell you. It's going to be what it's going to be. In the words of Dave Chappelle, “You're watching me. I'm not in your house watching you. I'm not bringing this to your place of employment or to your home. All you have to do is turn this off, baby. You don't got to listen.”
I get into it on Twitter with people sometimes and they go... I'll interview someone or I'll post a comment on a stock I like, and you'll get some troll or some bot just trolling the stock. And I'm like, "It's easy, just don't buy it. God, don't buy it. I'm not jacking your bank account and forcing you to buy shares in this thing, just telling you what I think," right? So no, definitely interesting times.
I'll tell you what was interesting about Elon's spat with the Ukrainian diplomat is the fact that he's actually used, and the Ukraine has used, that Starlink satellite communication system to bypass a lot of these internet outages that have been caused there. And so he's kind of provided a little bit of a lifeline in that sense without having to. While everybody else is sending weapons, including us here in the US obviously, and aid to buy more weapons systems, he's actually taking the route where it's like, "I just want people to be able to communicate and find an outcome." So I thought it was heavy handed. I could care less either way. I don't know either one of those two gentlemen. But I thought it was a heavy handed response given that they've been allies, at least on the Starlink satellite communication front.
Nick Hodge: I have to tell you, I finally got the Starlink last week in my house. We've had some slow internet for five years because we had to have a dish, because there's no cable or Comcast or Verizon where we live. Some people have line-of-sight, but we have so many tall trees that you can't get line-of-sight internet. I mean, it's been tough for us to watch Netflix or on-demand shows or certainly not being... I wouldn't have been able to record this podcast from the house or upload big files or anything like that. And it's been a game changer, man. For the past week we've had the Starlink on the roof and, oh, man, no buffering, Netflix, on-demand, all good.
Gerardo Del Real: Really.
Nick Hodge: So kudos to Elon Musk for that; he's definitely done some big things.
Gerardo Del Real: I love it. I love it. Go, Elon, appreciate you. Good luck with the Twitter thing. If we talk about the Twitter thing, we got to talk about the Trumpster. You know Elon's bringing him back if he buys Twitter. I mean-
Nick Hodge: Well, it's good for ratings, good for advertising, sure.
Gerardo Del Real: Yeah, 70-something million followers-
Nick Hodge: And it's good for free speech, I suppose. Yeah.
Gerardo Del Real: Sure, sure. Obviously I've disagreed on many policy positions, as I disagree with many policy positions of a lot of politicians of all ilk, right? But you can't deny the guy's entertaining. I mean, you got to give him that much.
Nick Hodge: We would stop having to see the screenshots from Truth Social, or whatever the other thing is called, and he would be able just to get back on there. It was honestly more fun when Trump was on the Twitter.
Gerardo Del Real: It was more entertaining for sure. For sure. Yeah, yeah.
Where are the Blue Lives Matter people?
Where Are the Blue Lives Matter People?
Nick Hodge: Oh gosh, I don't know why you're asking.
Gerardo Del Real: Well, there was a police officer that was killed earlier this year and I didn't see much about it. Story came out, and then I dug a little more. I'm like, "Oh." So there was an officer-
Nick Hodge: Is this LA?
Gerardo Del Real: This is LA.
Nick Hodge: Oh, yeah.
Gerardo Del Real: Yeah. So this officer died during a training exercise earlier this year. And the training exercise was a simulation of being beat by a mob, except that the other four officers that beat him in the simulated exercise really beat him to death. And then we find out, we just found out, that the officers were under investigation. This officer was actually investigating them for a claim that they gang raped somebody.
And so again, when I talked earlier about how selective certain parties and certain movements are about their outrage, if this had been an immigrant that had killed this officer, it would've been all over the media, especially the right wing media. There would've been outrage, and it would've been Biden's fault. There would've been blood on his hands, and it's his weak border policies, despite the fact that he's arrested more illegal immigrants than I think any other president in the first couple of years of his presidency. And Obama did damn good at that as well. But anyhow, I digress.
But again, the fact that this happens and there's not outrage over it, I don't know, it seems kind of odd. Although it's not surprising, it is odd to me.
Nick Hodge: Yeah, well, it was just a couple of weeks ago we were recanting the Baltimore Gun Trace Task Force, and talking about the show that's been made about that. And I was telling you about Detective Sean Suiter. I think I said his name wrong on the podcast, but his name was Sean Suiter, and-
Gerardo Del Real: I say name wrongs all the time, it's okay.
Nick Hodge: I know. So I was rereading the story, and he was basically shot in the head in a park the day before he was set to testify against the Gun Trace Task Force, right? And so that one got swept under the rug. They never found the killer and just attributed it to gang violence, right? Surprise, surprise. And here, same thing. This guy, as you said, he had filed a report for this young lady who filed a rape case saying that she was raped by four guys and they were all LAPD. And then as this guy looks to leave the force, he was looking to leave the forest it sounded like from the article that I read, and winds up dead on, like you said, a mob simulation. But the guy had lacerations to his kidney. He was clearly pounded, man.
Gerardo Del Real: He had three broken ribs, a lacerated liver, head injuries, and a broken neck.
Nick Hodge: Liver, there you go. Right. So his mom is filing a wrongful death case. So we'll see. But more of those bad apples, I suppose.
Gerardo Del Real: And here is the part that does upset me. We talk about Fourth Turnings here often and how we got to get these institutions and burn them all to the ground and rebuild them, right? And in this case, the LAPD Board of Police Commissioners ruled that he sustained his injuries during efforts to save his life. Come on, man.
Nick Hodge: Right. I mean-
Gerardo Del Real: Yeah. I'll leave it alone. I'll leave it alone. The corruption is just insane. Again, this is what they do to a fellow officer. Can you imagine what they're doing to poor whites or poor Blacks or poor Mexicans or illegal immigrants or women that don't speak English and have no money?
Nick Hodge: Well, your first question is actually the answer. Where are these blue line people? They are the blue line. They're upholding the blue line. I mean, he was crossing his fellow officers, he was crossing the blue line.
Gerardo Del Real: Yeah.
Nick Hodge: You don't do that, right?
Gerardo Del Real: I mean, unless you want to die, apparently.
Joe Biden Pardons Federal Weed Convictions
All right, let's get to Joe. Let's get to a politician doing something good. Out of nowhere, right before the midterms, he's decided to pardon everybody that was convicted of weed possession under federal law. So that totals to about 6,500 people. I read a funny tweet earlier saying that he probably already forgot that most of those people were convicted under laws that he helped draft. And Kamala certainly, his vice president, I've been very critical of her and her involvement in excessive sentencing of particularly low income...
Nick Hodge: Sure.
Gerardo Del Real: All low income people, but skewed heavily towards Black and brown people, right? So again, the cynical me says it's all political and it's another plot to secure votes ahead of a midterm election that looks tough for them at best. And by them, I mean the Democrats. But again, I applaud the move. I think it's long overdue. I think marijuana still being a Schedule One substance is insane in 2022. And I hope this leads to a shift in how federal authorities view marijuana.
As it relates to the markets, I know you were beating yourself up a little bit. And I don't know if you care to share, but this did have an effect in the markets immediately after the tweet went out. And do you want to share your story, Nick?
Nick Hodge: Yeah, well, I think as recently as last week or the week before, I was mentioning the MSOS cannabis Sector ETF. That's the US companies, the multi-state operators. That's why it's MSOS, the multi-state operator cannabis ETF. But it's been bottoming, right? I had a chart up here because I was looking at it. This is an ETF that last Fall was $33, almost $34, and has been plodding right along $9 for the past couple of weeks. People were beginning to call bottom, and I've been paying more attention to it. I had queued it up earlier this week, and as recently as today I had it queued up on my screen thinking, "This is getting pretty damn cheap here. I wonder when the true bottom is going to be." And then all of a sudden I saw the tweet and I clicked back over to it and the ETF was up-
Gerardo Del Real: Viagra chart.
Nick Hodge: Yeah, it was up almost 40% in the closing hours of the market. It closed up 34% on volume. That was about three to four times the average. It normally does two or 3 million shares. It did over 12 million shares today. So I guess good on Biden, right? I mean, this is an important step, right?
Gerardo Del Real: Yeah.
Nick Hodge: I mean, it's the right thing to do.
Gerardo Del Real: Absolutely.
Nick Hodge: And you mentioned how it's classified. I mean, he had three points there. The first one was pardoning federal offenses, the second one was asking governors to pardon state marijuana offenses, and then the third one was asking the Secretary of Health and Human Services and the Attorney General to initiate the process of reviewing how marijuana is scheduled under federal law.
So again, jaded citizen here, I've been listening to Chuck Schumer for a couple of years saying that he was going to legalize marijuana, and it hasn't happened. And my gut reaction to this is that it's a midterm ploy, right? I mean, you've got some elections coming up here soon.
Gerardo Del Real: Sure. Same.
Nick Hodge: And nothing has materially changed as far as banking or taxes or being able to use credit cards to buy marijuana or the actual scheduling of it, so we'll see. That's still going to take an act of Congress. But sending an ETF from below $9 to $13 in a day is certainly helpful in getting it off the bottom. We'll see if it truly does tick the bottom, but I think you'll have continued opportunities to buy as the luster of the tweets wear off and as the bear market continues to play out.
We haven't really talked about broader markets, so you mentioned October's a rough month for stocks. Well, earnings are already starting to come out, but you're going to get more and more earnings reports, you're going to get a CPI number next week that's going to be continued high inflation, and you're going to get GDP later this month, which is, despite the Atlanta Fed saying that it's going to be over 2%, the number's going to be closer to 1%. And so a lot of headwinds still for the broader market that will likely overshadow this short-term euphoria in the cannabis stocks. And hopefully I'm not just telling myself that to make me feel better for not buying it.
Gerardo Del Real: You said ETF and it made me think of... Did you see the Inverse Jim Cramer ETF that somebody filed? They say Jim Cramer is a contrarian indicator because he's had a rough go of it with some of his picks here recently. So somebody decided to file, supposedly, an Inverse Jim Cramer ETF. And then somebody tweeted, "What happens if Jim Cramer recommends it?" And that provided a great laugh. And so I just wanted to share it because laughing is good for the soul, everybody. And there's enough crazy stuff going on out there to where we could all use a good excuse to laugh.
Nick Hodge: I wonder what the ticker would be. It would be like MIJ, like Jim backwards.
Gerardo Del Real: You got to love the creativity sometimes. Nick, what are you watching for in the markets this week? I started with what I'm watching. I'm watching for Patriot Battery Metals to close that financing, if it hasn't happened by the time you read or see this. And I'm watching for those assay results because I think finally we're going to start seeing the potential scale of this thing. Anybody that thought this was 2.1 kilometers, you have another thing coming. This is going to get really big, really quick, and it's going to be a lot of fun between now and year end, y'all.
Nick Hodge: I mean, we covered it already. I'm looking to see the dollar resume it upward trend, looking to re-short this market as it continues to deflate, looking to see how the sentiment is with the retail crowd at the New Orleans conference. We were just at Beaver Creek, but that's sort of an institutional conference. And so it'll be interesting to see how these retail investors are seeing things at the New Orleans show and to talk to the companies there. So not a lot really to say. Like I said, I was writing today that you could go back to bed. I think you've got a continued couple of quarters of more of the same here. And so that's about it for me.
We didn't really mention nuclear. So you mentioned that they've been relatively subdued and you've got this continued nuclear threat, which we first started talking about maybe three or four weeks ago here on the podcast. There was a supposed convoy or a train carrying Russian nuclear assets, and the thinking is that they could potentially be deployed. That's sort of the overhang, as I see it, for the uranium sector, right? I mean, you get Putin starting to fire even small scale nukes, that's going to take the wind out of the sales of the uranium market really quick despite the fundamentals, as you said, talking to Amir, being as bullish as they ever were. And so closely keeping an eye on that because those whispers just haven't gone away and, in fact, they're getting louder.
Gerardo Del Real: They're getting louder.
Nick Hodge: Yeah.
Gerardo Del Real: Yeah, they're getting louder. It's Zelenskyy now that is advocating for being able to preemptively strike Russia using nuclear weapons, small nuclear weapons. So that's getting into really dangerous territory. Don't like it at all. Yeah, scary stuff, folks. Obviously hoping for the best on all fronts on that front.
Anytime I see global debt levels where they're at and I see bond markets teetering on the edge and I see institutions looking like they're going to implode... Hi, Credit Suisse. And then I see the conflict between Russia and the Ukraine, the invasion, right? And then the whispers grow into conversations about preemptive nuclear strikes. It's an easy excuse to drop a nuke on somebody and say that that's why the whole financial system needs to be restructured. When in fact, that's not the reason why it's going to get restructured. It's going to get restructured because it's designed to implode and it's designed to transfer wealth from the very, very, very poor to the very, very, very rich, baby. That's the design of it. That's what we've been doing for the past 30, 40 years. I see this as a real easy thing, as cynical as it sounds, for governments around the world to get behind. Because man, would that provide a good destruction, or a good distraction. Freudian slip.
Nick Hodge: Sure. Well, both.
Gerardo Del Real: Yeah. Yeah.
Nick Hodge: Yeah, we'll see how it goes. Hopefully it doesn't come to that, but it certainly would be a good excuse to do some of the things that need to be done. Did your Cubs make the playoffs? I haven't been following.
Gerardo Del Real: This was not that year.
Nick Hodge: No?
Gerardo Del Real: This was not that year. It was a tough year for us, but I think we're putting together a team that's going to contend next year. I think we'll bring in some additional pieces. There were some young stars that really, really emerged this year into all stars and potential future all stars that I think we have a good base now, and I just think we need another pitcher or two and another batter or too. And luckily, we have the capital as a team to go out and spend that money, and the front office seems willing to spend that money, so I'm looking forward to a very, very loud 2023 from my Cubs. But yeah, the season just ended and I’ve supported the team since 1984 when I first moved to Chicago. So a lot more losing seasons than winning seasons, that's for sure. And yeah, it should be a fun off season.
Nick Hodge: Baseball playoffs are always fun to watch. I'm not the most diehard fan and I don't follow day to day, but I saw the Orioles, which used to be my team, had their first winning season since 2016. And here, where I get most of the baseball news, the Mariners, because they're the Washington team, made the playoffs for the first time since 2001. So I guess good to see some new blood in there.
Gerardo Del Real: Absolutely, absolutely. And just for some context on those Credit Suisse credit default swaps, back in mid 2021, you could buy one of those for $50, right? Right now, it's at almost $400, it's at $378. And in the past week, it's gone from the $200 level to nearly the $400 level. It's a 100% increase in risk according to the people that are buying these things. So just putting that out there. That's all I got. Nick, anything else on your mind?
Nick Hodge: No, that's it.
Gerardo Del Real: I love it. I'm Gerardo Del Real along with Mr. Nick Hodge. This was Therapy Session, otherwise known as Bizarro World, number 189. Go be kind to each other out there. Everyone have a fun week. Be safe. Enjoy your October. Nick, say something nice to the people.
Nick Hodge: See you next week from New Orleans.
Gerardo Del Real: Click, like, subscribe, comment. No, we don't care. It doesn't matter. Hopefully we see you all next week. Be safe out there, y'all.