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tv   Fast Money  CNBC  November 17, 2022 5:00pm-6:00pm EST

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they look pretty good. but they do it so kquietly and there is no marquee name running away but it is not based on hopes and dreams but what they're able to do right now so i think the character of semis has something to do about that. >> that is mike santoli. we'll see you tomorrow and i'm see you. "fast money" is now. >> right now on "fast," mixed messages for markets while mortgage rates and energy prices are all falling. there is fresh hawkish rhetoric from the fed viewer session is rising again so will this new tug-of-war keep st stocks stuck in neutral. and big bacts getting crushed. one in particular silver gate cut in half this month the latest revelations about sbf and the new ceo of ftx and later charting energy. one of the traders sticking with his call that best days of the black gold boom are behind us
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right now. i'll melissa lee and on the desk, carter, guy and tim, live from where else, sin city. we start off with a couple of fed officials reining in expectations james bullard saying the policy rate is not jyet in a zone that is considered restrictive and there is a limited effect on inflation. and kansas city esther george said it is so tight that inflation can't be brought down without some real slowing. these comments come even as we've seen relief on pricing and better than expected cpi and ppi numbers. mortgage rates with the biggest drop since 1981 and gas prices to where they were before russia's invasion before ukraine. still interest rates went higher today. the spread between 10 and 2-year treasury in a new 40-year low. so what are the markets telling us right now, guys >> that is what i'm focused on
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the two ten at 65 basis point and we thought it could go to 75 basis points in the form of 3.5% of the ten year which we're close to and 4.25 for the two-year and i think this 14% rally since october 14th or so is fluff we've talked about it. we thought the overshoot with 41 h hundred and we got to 4130 and the fed officials continue to speak hawkishly. and you have to listen to them so i think the path of least resistance given the rally over last month is lower. >> we talked about this yesterday as well. the notion that where we are in rates there terms of the ten-year yield, 3.76 and yet we don't have a trajectory or cushion for the growth of the market and we're not seeing any traction from that part that you would think would gain on the back of lower rates. >> and i think that is the hope. but think what we're hearing
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from the fed officials and what people need to understand is inflation is coming down which is a great thing that is what markets need to see. but it is still not coming down to the 2% to 3% rate which is why they continue to need to raise rates and it is those growthry areas of market that they need to -- valuation matters and if rates continue to be high and valuations are still pretty high in a lot of categories and that is why they'll continue to face pressure here. >> i think one of the things we're all subject to is something known as resensy we've just come down from 4 to 3 and if you look at the headlines in the last week of september, worldwide it was rates exceed 3.67 so which is it a is it down from 4.3 or at 12-year highs if we roll the clock back five months ago i don't think rates are effecting anything other than the dream that you could pretend to put a multiple on a stock meaning 376 or figuring out what
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you're going to pay for google, microsoft, apple no way. >> tim, that is a good point carter has good points and puts things into context. does is it-t matter 4.3 versus 3.7? >> it does on some level if rates were moving higher, you would have a better sense of th economy and where the sense of the fed pushing too hard when the fed makes the comments and bullard's comments today i thought were a little outrageous i thought they were aggressive and they -- saying we are not making an impact on any type of inflation when the housing market is under a lot of pressure, when you look at different parts of the at least i think the consumer markets that are under pressure and we haven't even really seen a lot of the teeth of this it is very important and we have housing down in today,p single family houses starting are down 6% and an interest rate dynamic which is frozen and so the fed is, i think, slowly getting there but the kplcomments need to continu
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and this is a fed that understands the market really never believed them in the past or that they never stood and had the resolve that they needed to have in the past so bullard's comments okay, i get it i tend to agree, rates have come down zdramatically p the inversion in the yield curve is a function of they have to pin rates on the short end. you could see where terminal rates and fed funds are and i think that is why the markets that focused on this inversion. >> it almost feels like bullard was trotted out today to be more hawky based on waller's comments yesterday. waller was just saying yesterday that he was more comfortable downshifting to 50 basis points which is what the markets are discounting at there point but today bullard mentioned the restrictive zone being 5% to 7%. i don't know if 7% is in anybody's mind right now, guy. >> did you just say trotted out. that is something that i would say. the fact that the market rallied
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and they trot these guys and get mostly guyed out to sort of talk down the market. >> maybe it is strategic i don't know. >> it is strategic and the market is giving them air coverage to do that. if this is a 3200 s&p, my sense it we'd had a much different conversation and the rhetoric would be much different. but given the fact that the market has found its footing, it gives them the air cover to say exactly what he's been saying. so they are hawkish. they should be hawkish inflation is not under control despite the fact that cpi and ppi has come in lighter. an inflation rate north of 7.5%. if you said a year ago we would be here, and we're championing it because we've come off of 9.1. they still have a problem they need to address. >> sick rantely, what did you make of the comment? >> i don't really have a problem with it.
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5% to 7% i think trying to decipher the fed, they have no clue in my opinion how inflation is going to set up an the idea that 7% is too high when inflation is in that neighborhood, and agree, z guy, these are high. i look at it like a babe ruth hit, you hit the ball and it is not anti-gravity, it keeps going up inflation though is starting to come down. and the isolated and static fashion makes no sense they were wrong about inflation going high and wrong about inflation coming down. in the end everybody needs to chill because most of what is going wrong is self-inflicted reactions in -- in reactions and actions regarding covid and how we dealt with it we're still unraveling all of that it is effects in the market place and in finance and in derivatives is still distorted and when you add energy into the entire mix, it really gets crazy. so if you tell me 5% to 7% on
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overnight rates, i'll tell you 250 basis point inversion, twos to tens. >> and here is the question, rick, if the fed has no idea what going to happen with inflation, does the bond market, and the corollary question is what is the inversion telling us if it does. >> well that the fed is aggressive and in the end all traders realize it will hurt the economy in a big way and long dated treasuries will go up in price and down in yield and most likely we're going to be having conversations in september and october next year about how many eases are in the system. >> rick, thanks. great to see you get your ftake on things >> i think you have to consider the june highs so june 15th, it is the low for the s&p. we get a bounce and that was the high right for yields at 3.5
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subsequently we've made new highs but we're coming back to that level. >> but rates going lower and stocks go lower. everything is going lower. >> i think dollar a lower, that is happening and i think yield is lower and that is happening and ultimately i think stocks go lower as well. >> all right our next guest said that inflation linked assets should take a permanent place in the investigate portfolio. here with us now to explain is nancy davis of quad rattic capital. great to have you here on set. how do you investment in this environment. >> i think the comments about the yield curve were spot on it is lower now than it was even in the '80s, so we've never had this amount of inversion because exactly to your point, carter, consensus is that long dated y yields are going to fall and there is a negative 1% in the derivative in the swap market and it is lower than the treasury market. it is 102 basis points negative
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between the two and the ten-year swap rates so it is crazy it is like your paying a tax to buy long ated bonds. here u.s., i'll lend you some money but it doesn't plaque any sense to the markets are pricing for this low growth, disinflationary, it is for a recession and that is consensus. >> and we're still in an inflation environment, but they don't work i-val does work. and can you speak to that. >> well i'm the portfolio manager for the eyeball etf and it takes tips and tries to solve the problems which is exactly right, the bonds, they lose money when ten-year yields move higher and the only index is the consumer price index it is like only using the dow jones in your equity portfolio even the fed doesn't use the cpi. so a third of the cpi is rent. and it is a lagging number so, i think it is a good
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solution and i do think mostly to your point, inflation protected bonds should have a place in core fixed income portfolios, especially because so many of the indices like the ag index, they don't have any inflation protection in it so how could it be core fixed income if it is missing that key component of the market. >> and i have very much believe in having inflation protection in your portfolio. we want to have that for our clients but i do get a bit of a pushback and why do i need the inflation hedges that point in time that is any question how do those still have a place in your portfolio. i'm not saying i disagree but i want to hear your thoughts on that. >> all stock move off of future inflation and so even if you look at the bond market you see the break evens are all around 2% even at guy's point, we just had our last print at 7.7.
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so it is priced to fall but but why not have some diversification. i think for retirees, if you're not in the labor market, you're not going to benefit from rage inflation so you have a higher cost of living so why take ape bets against it and i think that is why it is a core in the portfolio. >> good point. >> nancy, labor markets versus goods and services, or goods versus labor markets and services, which is the most important driverer for the direction of your fund. >> well i think they're all important but there is a lot of complacency that the fed is going to ease inflation in the future and i think the challenge is the fed hiking policy rates doesn't fix the labor market, it doesn't fix the geopolitical risks around the world, it doesn't fix the supply side delays we're experienced because of covid so it is just hiking policy rates and that inverted yield
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curve, that is crazy right. a negative over 1% difference between two and ten-year swap rates doesn't make a ton of sense because consensus is buy long dated bonds because we're in a recession and the fed is going to pivot and i think there are very few things that you could buy in today's environment that are trading at valuation levels below the late '80s what else is there. >> nancy davis, thank you. carter what is your take >> this is just a consensus moves so quickly if you were to roll back the clock. last week in september we just crossed over 3.76 and people said inflation will never end and everyone is on the other side and inflation has peaked. the consensus responds to price. price leads. in every market. and while consequennsus might b lower now, i think it is lower than consensus thinks. >> do you think that the
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investing back drop is better today verse us late september? carter was referencing late september because if we use that as bench mark, rates are flat. i wonder if the outlook is much different. >> to me it is all where have prices gone on valuations and where have markets gone and we're -- we're 30% higher on semiconductor and with vix at a 23 handle and we've priced and a major rally in the ten-year. that is not that bullish to me even though i think we're further along in terms of the fed messaging and i think -- i kind of scoffed at cpi number off of a 40-year high because of used car prices and health care costs. i still think, i look at services inflation that outstrip goods inflation that in cpi number in that ppi number, those t the things to worry about. so the labor market is tight where would i be today versus
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september, i'm more cautious because assets have priced in a lot of good news. >> we've got some after hours action after the results, the details from the reports next. plus baba bumps higher last month onech traders eyed this stock for a potential trade. one he or she is doing with the name now don't go anywhere. "fast money" is back in two.
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welcome back to "fast money. we have an ernst alert on williams sonoma as margins came in lower than expected steve kovak giants us with the detailed. >> it is falling gross margin that send the shares lower despite slight beats on the top and bottom line and they wore wed about the back drop more certain. eps beating by a penny and revenue coming in at $2.19 billion also a slight beat but it is the gross margin disappointing investors falling about 2% from the year ago quarter and missing the street
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estimates. now the ceo was blaming shipping costs for missing the margins and saying shipping is getting worse. but we have gotten some stata saying shipping is going down. reaffirming the guidance for the full year and still a lot of uncertainty heading into the holiday season among all retailers. we got this narrative of goods versus services an luxury versusp discount it is all still playing out but we see how williams sonoma is trading on it. >> steve, thank you. tim, seymour, how do you like wsm. >> i like it i guess i don't like it as much as i like restoration hardware and some of this is around promotional activity and some of there is around i just think the multiple i think that the fact that is the stock is not expensive even relative to a market multiple. i think that the lack of guidance that the fact that they said that they weren't going to give guidance into '24 has got karen finerman with a smile on
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her face i think we've talked about the housing market, the question really and we're debating this and we debated this with lowe's versus home depot, will people spend more on fixing up the one they have or pull forward the once in a lifetime trade for williams sonoma. >> i think your retails will face headwinds here and i think you're seeing you're higher income consumers are holding up better and williams sonoma should benefit from that but i think moving forward it is the retailers an the home buyers are not going to have as much momentum moving forward. so it is not something i'm going to jump in currently. >> there are only so many cast iron skillets that one needs especially when wealthier households are trading down which is the trend that walmart is seeing. are they going to williams sonoma to buy that >> and all of the other good things lemon squeezers.
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>> or the $20 pot holders. >> and a pizza pie and there is no way around this, there are two types of weakness, weakness to take advantage of and weakness to stay away from and you have to determine which this one is so, is it down it it was 130 close down at 140 just two days ago. but guess what, last wednesday it was at 115. so you're 115, it went up 22% ahead of earnings and now back to where you were last wednesday. i think you take advantage of the premarket dip or post market weakness and buy. >> buy i wasn't expecting that. after you rattled off this very expensive items that you have probably have your own home, carter we have another earnings alert on palo alto networks. it felt like you knew the things you could get there very well. palo alto beat on revenue and earnings let's get to frank holland for the details. >> a solid quarter for palo
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alto security ar, that is current customer spend with the growth portfolio beating estimates. rpo showing a strong revenue and free catch flow topping $1 billion well above estimates foreign guidance was solid with a top range above estimates. the ceo explains a short time, inflation is impacting cybersecurity. >> as we all know, the fed is working to tame inflation impacting growth p while cybersecurity is somewhat resilient, we do see some marginal signs of impact. cybersecurity is getting more scrutiny suggesting deeper and longer review. >> the stronger report giving a major boostto other cybersecurity stocks including z scale and sentinel one and coming up on "mad money," jim cramer will sit down with nickesh aurora to discuss the state of cybersecurity
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>> thanks. >> it is a great quarter that is trading at five times, six times revenue or something 40 times next year's numbers but this is best in breed and it is in a silo in a vertical that everybody wants to be in so if you could wrap your head around valuation, again that i pointed out, that i love this stock. but it is problematic. there is a $211 stock just a few months ago and pulled back i love the name and if you're time horizon is longer than typically "fast money" allows it to be, this is the name in the space that you absolutely want to own. >> do you want to be in this high valuation stock, tim, in this environment is this okay >> the silo is morrow kay than others and i think we've seen some of the high multiple names held up in the first whack palo alto is a name and i think again the m&a activity and the balance sheet is not in question at all question is what were they willing to pay and i think that is something that the stock is
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working through. this is a company that, as guy pointed out, for a long time is best in breed in its space the tail win winds there around cyber are here for a long time we're not seeing any let up in spend despite what is going on in the economy. >> carter. >> it is not impacting the pattern that much. this is a darling. 36 buys and no sells and it is sort of a pair of twos for me. not particularly bearish or bullish. >> and that is bad >> two, 27 off suit is bad. >> but unless on the flop, you flop a couple of -- >> tim is in vegas that is right. >> i don't know gambling stuff a lot more "fast money" to come. here is what is coming up next. >> bingo on baba. shares jumping on the back of earnings and guy predicting just that he'll lay out what to do now plus the ftx collapse sending waves through wall street and it is not just crypto firms
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it's the best protection for your vehicle, new or pre-owned. great. but where do i---? order. sfx: bubblewrap bubble popped sound. welcome back to "fast money. shares of alibaba jumping after the giant posted bet than expected earnings. their up more than 30% in month and a trader is calling for this only a few weeks ago >> you go back and look at what happened to alibaba at fourth of july we talked about it leading up to it i think you have another situation where it is setting up for a trade at five times normal
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value volume and and think i could trade into earnings next week, mel. >> so now we're past earnings. what do you do, guy? >> prescient it is a trading call and we mentioned this looked family or similar to what we saw back on the fourth of july the volume suggested that the down side exhausted itself and you could see a rally of this magnitude. since 2020, october, this stock is gone from 310 down to 58 but you've seen seven, eight, nine, 30, 40, 50 rallies and how do you trade it now if we were fortunate to trade it around the $64 level which is october 24th, you have to take some money off the table and be disciplined. i think carter would say that as well personally i still think there is some upside here but you have to pare down risk in alibaba. >> should you leave money on the
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table, tim did we learn from earnings that maybe they have a grip on costs an their implea. ing this and maybe covid policies would be less restrictive. >> yes, yes and yes. they're going to pay out 40 of adjusted income and in fiscal and that is only a half year and if you look at p.e. based upon '24 estimates you're talking about a ten times p.e. with expected -- if you listen to jp morgan, eps growth of 40%. the whole story so me is the worst over in terms of the pressure on the company from the government because china will open its economy for the december quarter is not good. we know all of this. it is in the price but at some point it is very much where e-commerce gets better. >> i think this is now time to be an investor in baba and i recognize it got right in the trading ranges an you've been trading if from the short side
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and trading it on the 30% ranges it is now moved 45% and i think you stay here. >> courtney, where are you on this. >> some of the tail winds are you seeing hopefully china is going to reopen. i think it is a question of when and not if and the other thing is the dollar is docoming down and when you take that into perspective, i think it will have room to run and i think you want to look at this optimistically. >> what do the charts say, carter >> that is right it is the hardest thing of all. how to cope with a winner. and you have a great winnerch this is where selling calls makes sense. the december 90s are going for $4 strong is trading at $85 which mean you participate to $94 over the next month. >> and ftx collapse is spilling into other areas of the market and plus sheila bair will dig into the crypto crash.
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the critical regulation she's calling for right now. "fast money" will be back in two. >> get your trades to go with a "fast money" podcast catch us any time, anywhere, follow today on your favorite podcasting app we're back right after this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones ♪♪ for skin as alive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin.
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welcome back to "fast money. another check on markets today stocks finishing well off the lows but still in the red for a second straight day. the drow dropping 7% and the s&p 500 down and all three indices closing out in the red shares live nation dropping 3% after taylor swift fiasco. ticket master canceling tickets to -- it said tay tay. is that what she goes by it said tay tay's latest tour. after fans run into a number ever technical issues due to extreme demand so much bad blood on this one. and shares of gap jumping on the back of results. the company posting a beat on earnings and com sales. now to the latest on the implosion of ftx, the new ceo who helped with the enron bankruptcy has never seen such a
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complete failure of corporate controlled and ab sense of trustworthy of financial information. this comes on delaware court filing saying today it was a clear there is a misappropriation of funds. >> i'm very shocked. i obviously did not know him until about a week or so ago so, i'm just shocked i'm shocked that he lied to everybody. >> meanwhile silver gate out with a mid quarter update, it is reporting that bitcoin loans have not seen losses this is what the silver gate ceo had to say back in june on cnbc. >> we have absolutely seen no credit issues at silver gate because we only lend against bitcoin. >> and investors punishing silver gate for its involving in crypto, the stock down 12% but already cut in half this month
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and tim, we continue to see a fallout in names like robin hood and coin base and coin base bonds are trading 57 cents or so on the dollar. bonds are up in 2023 so there is real pain here >> yeah, micro strategies. you picked the folks that hit the wagon here and it is interesting to me, though, i tell you i look at bitcoin over the last few days an i'm impressed. if you think about where there is liquidity and margin calls an the complete seizure of at least counterparties to counterparties and it is pretty fascinating i think -- it is of course greatly ironic that a lot of the crypto bros are now here wanting more regulation. but that is what i think a lot of people, and i believe we've been saying that on this show as well, institutional involvement begs for more regulatory oversight and of course the people that are in the middle of
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this also have said that while we wish that the code itself and the decentralized nature of the unde underlying assets and thep concepts here should have survived without regulatory approval and oversight we need it very badly. but think bitcoin has traded pretty well over the last couple of days. >> let's turn to our former regulator. sheila bair is on the board of paxos which has a stable coin. happy to of you. >> thank you happy to be here. >> to regulation prevented this from happening, seeing that ftx was basically an off shore entity. >> right first of all, i'm expressing personal views here. i'm not representing companies, i may be affiliated with i think regulation could have prevented a lot of this. especially the misuse of customer funds this is why we have regulation people complain about regulation but at the end of the day, you need it to protect consumers and
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financial stability and you need it to protect creditors an investors. it is completely, you know, flying freely without any kind of meaningful regulatory oversight. but there were other problems. you didn't have an independent board or risk controls and there were a lot of things that were standard for responsible run companies whether you're regulated or not that they just didn't have. but it is amazing to me that this guy could have the kindof credibility he did in washington and nobody looking behind the curtain and realize that this is what is going on. >> and so many congressman hitching their -- accepting his donations in size. when you take a look at the regulatory landscape, who do you point your finger at and i'm not looking to point fingers but who is responsible for this is it s.e.c., who should have been on top of this. >> i don't think you could involve regulators we've all
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been saying you need to regulate for a long time. they want congress to act. there is not a lot of clarity about whatsy security or commodity and what should be with the banking regulators but congress is not going to act for the foreseeable future with split -- with the republicans and democrats and republican control in the house and the democrats in control in the senate they need to get together and here is what we're going to use and the s.e.c. should agree and this is what is regulated as security and this is subject to its cfdc jurisdiction and stable coins, i think you could get it into regulated banks or trusts occ has tried to make moves in that direction but they just need to use the authorities they have. dodd/frank gives them authority under title 8 for payment systems to be zeg natded as systemic you might make the case under dod frank, they need to get creative it is not easy but they need to move forward because people are
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getting hurt a lot of people are getting hurt. >> sheila, without question, fraud will exist regardless of the environment. >> that is true. >> there will always be people that will look -- >> yes, that is right. >> so i want to put that out there. so here is my question federal reserve that has been in my word, not yours, reckless overly acome stated for years flooding the system with liquidity and it needs to find a play and it makes people really lazy an complacent does the fed have any role in this what so ever. >> i want to personalize it. but the near zero interest rates we've had for 14 years absolutely have contributed to all of these bubbles and capital is just been so cheap and it is just been drawn to speculative uses because it is so cheap. people use a lot of leverage it is absolutely had a role to play with crypto speculation and so i celebrate the fact that
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it is going to be painful to get out of this. i celebrate the fact that we're going back to more normalized interest rate where capital cost something so investors have to be disciplined about where their putting their investment dollars and not some shiny new toy that some wiz kid said i have some great idea and they do no due diligence and they have needs to come to an end you can't fault the fed for people doing stupid things but monetary policy has made it much easier to do stupid things with money because it is so cheap. >> some of the pain that has been put on to the crypto industry has been done by lenders within the crypto industry giving people 8% in yields and these are not necessarily -- these aren't banks. as the chair of the fdi cia, do you see that these sort of ledders might in another framework in the future have to be regulated like a bank >> well, i think there clearly
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needs to be some oversight it is not clear what a lot of these -- these defy lending schemes that are promisingthe outside returns what, is behind that and there are a lot of regular flags. i wrote a book for kids about ponzi schemes. i think a lot of adults may need to read that book too. it is not clear where the returns is coming from it is a good chance it is coming from other investors who came in after you. so we don't know what the facts are. but that is certainly an area that i would investigate but back to the earlier point, that is just fraud that is illegal. there are a lot of authority tosz crack down over that kind of behavior. consumer lending needs to be regulating and there is the cfpb has oversight. they should have been this is going to -- to i think there is a good argument that they should have some authority over crypto lending as well. that is not the case
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but again, individuals are players in this market, unfortunately a lot of young people speculating with money they didn't afford to lose so, yes, the short answer is yes, we need some oversight of it but to the extent it is just an illegal ponzi scheme, there is less authority to go after them. >> sheila, thank you >> thank you >> sheila bair there are always bad people out there, carter, looking to rip other people off that is for sure. >> that is for sure. and in every industry and every undertaking. it is nature of human interaction. but i think interesting ri, tim, if you think about the june low in bitcoin 17,600 we have 5% below that low. so while we broke hard, we're basically not deteriorating further and i think that will matter. >> courtney, do a lot of your clients, are they still interested in crypto or has in burned them. >> we've never recommended it as part of our portfolio. but i could say over the summer, we were getting a lot of
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interest, people saying i know you don't recommend it but i still want to put some in there and i feel that is when you get these things are topping from a consumer sentiment standpoint which is kind of what hwas happening. so it is nothing that we touch, but this is something that is going to have to have the regulation which the whole point of bitcoin is not to be regulated so i don't know where that brings bitcoin from here. >> that is sort of the rub with sam bankman-fried going to the rescue of all of the firms it is like a decentralized financial system and yet so much power was actually centralized and then you see the fallout now. >> yeah. >> well, there were -- by the way, terry duffy was on capitol hill a year ago and called b.s. on this entire thing and got ca castigated in front of congress. i'll throw this out because why not. this is an exchange ftx, right they're an ex change why is that then an indictment on what is trading the same way the mercantilepp
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blew up, it doesn't mean the crude oil contract should go lower. so i'm not a bitcoin bull, but i'm just surprised that bitcoin was collateral damage in all of this if you think about if that way. >> coming up, one trader said that energy is the most important area of the market to watch right now and where he thinks it heading. and a move in crude. how they are playing the stock straight ahead
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welcome back to "fast money. crude falling to the lowest level in over a month and on pace for the worse week since august as rising covid cases in china stifle demand. the chart matter said it is time to take money off the table. in the energy trade, you're at the market board, so let's walk it through. >> so let's look at charts and figure it out together the commodity versus the underlying stocks but here is the picture of crude oil and it is fairly clear, at least to my eye, what we have. we have a well zdefined trend an an instrument that is breaking trend on the cusp. look at the next chart it is just putting in the converging trend lines so a big juncture and we're on
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the cusp of really undercutting an important trend line in effect since 2020. now as to the energy shares market, and this is one more chart of crude, you could use yu moving average to measure to trend, but the shares market, this is the issue. do you stay overweight, this is a very long-term chart you're not looking at an street, you're looking at a ratio. energy relative performance to the s&p. now if you put in some lines, look at the next -- what we've got here and this is remarkable, right, that energy, of course, underperforming, underperforming, underperforming and we get to the penny to this day trend line and hit our head. so the final iteration is as follows, you could see where the trend has been since the '06 peak and energy over the last four or five sessions un underperforms s&p and you don't
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want to be overweight energy. >> and mike khouw has the action >> to taking a look at the energy stocks we saw that overall the options market sentiment was bearish and the way they were reflecting that was actually by selling some upside one of the examples, the largest integrated oil name, ex exxon-mobil, a 18,000 sale of the 125 calls and collecting nearly $5 million in premium on a bet that the rally is coming to an end. and i would point out that we saw similar bets of similar size in the oil services like schlumberger and haliburton as well. >> still think that energy is some thing you want to have and it is not part of our portfolio and it does continue to be an inflati inflation hedge. break evens are so much lower so
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they can still be profitable even if energy comes down and that is what you want to look at. >> thank you, mike khouw tune into options action tomorrow at 5:30. and now it is time to weed out names in your portfolio. our cannabis king is here with e blunt truth on that trade. next on "fast money. >> "options action" is sponsored by think or swim by td ameritrade ♪ ♪
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everyone should have it and now a lot more people can. so let's go. the digital age is waiting. welcome back to "fast money. pot stocks taking a hit as the biggest cannabis industry trade show, mj biz conwrapped in las vegas. with two more states voting in favor of legalization in the midterms, one of our traders is as bullish as ever on the sector and that is tim seymour who has been there at that conference for the past couple of days. tim? >> i have been well, it is -- there has been a great exhale if i may. and if you think about where expectations were, going back to the georgia runoff of '21. but we though that story so what has there been and what was the sentiment coming out of this conference today. i led the investor panel with other major investors axd we
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pointed to four or five things including macro dynamics we have the biden decriminalization and dems holing onto it and the dems holing on to the legislation but you had some major strategic, circle k and gti and p diddy stepping up to the table but some divestitures. and how did tsx saying we would list u.s. players even though they're touching the plants in the u.s. so there arine incremental piecs of the puzzle and again a re-set of valuations. industry needs capitol so to tell you that i'm bullish, i'll tell that you the top line is better than we could have expected here. we've had more progress in d.c. than you cover expected. and companies that are at least the leaders in the industry have gotten through most difficult conditions and are operating
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today and very successful. i met with a software company today. so there are sub sectors and technology and ancillary and retail there are companies surviving and do well. the investors need more capital and more trading of the underlying industry and some of that needs to wait for washington if you look at cannabis on the charts you could make a six month basing period having filled both of those biden kind of gap highers and starting to move above the 50 and the 100 day. so a lot of excitement as there always is but a interesting couple of days. >> up next, final trades
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no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. time for the final trade tim. >> i love that oil is selling down and think the oih has a date with 350. oil services. >> a bit of a dip in gold. get some if you don't have it. >> courtney. >> deer coming out of earnings and industrials aring? to watch. >> and watch me connect dots where is tim >> las vegas. >> what is he there for? >> pot. >> what going to happen around
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midnight in las vegas? they're being puffing the magic dragon. >> whatever that means any way, mcdonald's. >> thank you for watching "fast money. see you back here tomorrow at 5: "m money" with jim cramer starts right now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now >> hey, i'm cramer welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to help you make more money my job is not just to entertain but to educate, to teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. we just witnessed the mother of all frauds a financial


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