Inflation Hits 4-Year High: What's Next for the Fed?

We just got the hottest inflation reading in four years, but somehow prediction markets are predicting that the Fed will pause and not hike rates. Make any of it make sense? Meanwhile, Msei may delist digital asset treasury companies. This is the newest crisis that people are overpricing. We've got a lot to talk about here on the Daily Wolf. Let's go. What is up everybody? Welcome to the Daily Wolf on Yahoo Finance. I am your host Scott Melker, also known as the Wolf of All Streets. It is Friday. It's the last day of the week, which means that I can be a little looser with the show. We're going to cover some of the big news items that just hit, but also review a few of the bigger stories of the week that I think are worth continuing to discuss because they will have implications moving forward into the future. Now, I don't even know how to talk about this story, but let's just start right here. Right. Uh, economists hot PPI shows Fed's work is not done. Okay, so last I checked last week, we were talking about soft PCE. Then we got a hot CPI print. Then we got a blazing red hot burn your tongue hot sauce jalapeno PPI reading that just came in. If you didn't see it, this from the BLS. September PPI jumped 1.3% month over month, the largest increase since March 2022. Annual producer inflation reached 6.3%. Month overmonth was 1.3%. The expectation, the forecast. 6%. It was more than double the forecast. Usually we see like, you know, like a couple bips above the forecast and markets react either way. They go up, they go down. You never know. This time a blazing hot rating. How can you have PCE soft last week and then markets get excited and then you have CPI hot and PPI hot and then you read the articles about PPI and they're saying that the next PCE reading will be extremely hot because PPI just came in hot. It's going to make the PCE reading that was just cold come in hot. Does anybody believe any of this anymore? What has two thumbs and ceases to care about the data anymore? This guy. Right. jobs numbers are cooked. We get a job number and they revise them a few months later when nobody's looking, but markets still react to the job number as if it's meaningful. We know that they recalculated PCE last week, the way that they actually come up with it and that magically came in soft, but now CPI and PPI are hot. Which number are we supposed to believe? And is there any meaningful data that the Fed is looking at? Oh, and by the way, at the same time, markets have actually crashed. Take a look at this. For a Fed rate hike, hot PP and CPI should mean that the Fed's going to hike, right, to cool inflation. Fed hike odds crash from 55% to 13%. Worst signals in October paused despite inflation hitting 3.7%. Cali now puts the odds of a Fed hold at 86%. Up from 50%. Why make it make any sense? I don't understand. Worse made some vague comments. He's famously bad at giving you any sort of clarity or any sort of projections that maybe we were going to hold and the prediction markets believed him and not the numbers. I listen just buy Bitcoin. Opt out of all this entirely because it has become complete and utter nonsense. I don't want to talk about CIA, FBI, PPE, CPE, OP. You know me. I'm going to keep making that joke. Some of you may not have heard it and I think it's good. And I'm a big fan of Naughty by Nature. Hip hop parade. Ho. Hey ho. The next story we have right now is about this guy right here. Of course it is. MSCI decision moves sailor strategy towards index exit. Much to do about nothing in my opinion, but this seems to be the biggest story of the day. Rocking treasury companies, right? So listen, strategy and metaplanet are in the MCI index. That means that passive flows come into these stocks because the index has to buy them to provide said index. We've been talking about this story for a while, but there were some rumors that the MSCI may consider new ways to determine who qualifies to be in the index and companies that don't have meaningful cash flows may be eliminated. Right? Strategy, MetaPlanet, they make their money or their balance sheet based on financial engineering and not an underlying operating business. and the MC MSCI is saying, "No, no, no, no. We don't necessarily want that." So, the the list is going to come out November 11th. We don't actually even know. Uh, and it would go into effect November 30th. But the big story that you're reading about this, you know, is people saying that would mean a $3 billion dump of strategy stock. It's all over $3 billion dumping. $3 billion is not even one trading day of strategy stock, which is one of the most highly traded assets in the stock exchange. Not even a day of daily volume. So even if 3 billion was market dumped in a day, which is not how this would happen, it would slowly unwind and they would be eliminated. It would be a rounding error in the amount of trading that happens on strategy stock on a daily basis. We have yet again managed to make a massive narrative out of something that's probably a meaningless rounding error. Yes, there's some signal in them potentially being delisted because people say that they could then be delisted from any other index they're in if all those indexes maybe adopt the same rules as the MSCI, but we have literally no evidence that that will happen. uh we just have a bunch of people on the internet saying things which uh is basically news at this point, right? You can say whatever you want. Doesn't even matter. Uh and speaking of saying uh whatever you want, we have a lot of people with new narratives about quantum. Google, this one is a real narrative, but people say whatever they want about quantum. So, first of all, we had Coinbase this week saying that working together on Bitcoin's postquantum readiness is important. I think we covered that. We know that everyone agrees that quantum could probably won't but maybe be an issue for Bitcoin. And if we agree that it is, why not get ahead of it at the moment, right? People are on both sides of that battle. Quantum means nothing. Some people think that Quantum is going to end Bitcoin and have literally sold their Bitcoin and everyone else is in the middle. But it seems reasonable that if there is a potential threat coming, you would just get ready for it. Cool. But the bigger news today is Google demonstrates quantum computing breakthrough as observers weigh Qday implications. So reading this, Google's quantum AI said it has demonstrated magic state cultivation, they grew mushrooms. Which could be a practical solution to one of quantum computing's most severe bottlenecks. So to be clear, now everybody is back on quantum FUD today because Google had another breakthrough and Google keeps having papers. But none of this uh means that there's any further threat to the Bitcoin network. That said, I'm here for the magic state cultivation. I think that's pretty cool. Uh, I personally think that quantum will be a small issue, but will likely be addressed by the time that it could become one and am putting that more in the not so concerned about it basket and not in the utterly uh terrified the world is ending basket. like quantum destroying Bitcoin goes in the AI destroys humanity in 3 years bucket for me and maybe that bucket uh has some meaning if you take the ma mushrooms that are magic state cultivated but otherwise if you live in the real world I think we're going to figure those things out because we're humans the next story is one I talked about earlier this week but I think it's big enough to bring back again Kraken parent to become first crypto firm to buy EU bank as it expands into deposit lending. So yeah, I I really just wanted to write a funny lower third about this. Can you can you Yeah, freak it out. Kraken takes be your own bank a little too literally. My lower thirds, you'll notice today are a little spicier. Uh I I told my AI and be honest, hey Grockbot, be funnier. Uh that was funnier. Like we're supposed to be our own bank. They're literally going to do it. Kraken's like you guys want to be your own bank with Bitcoin. We're just going to buy one in Europe. So listen, this is really important because in Europe we have a bunch of new rules about how crypto exchanges can and cannot operate and a lot of them uh are not operating at all as you know. But a crypto company coming in and just buying a bank and then offering all of the full banking services including deposits and lending and then integrating that with a full crypto exchange. Holy future Batman. That is what is coming for you Europe and I am here for it. So yes, you can still be your own bank. uh with Bitcoin, but crypto exchanges that want to be the everything app and the everything platform are literally going to entirely be their own banks. Like we're talking in the United States and be about like whether they should get skinny master accounts or whether they can become, you know, uh trust banks but not full banks. And over in Europe, you just buy one and you just offer all the services. Pretty sweet. The next story, I I can't even remember if we covered it to be honest, and I just want to make sure we do. Bank of America hit with $1.2 billion fine for money laundering failings. Okay, so first of all, Elizabeth Warren, who I rarely agree with, like wrote a tweet that was like, "We need to dive deeper into this. Why isn't anybody in jail?" I agree. I agree with her. But we have a long history and precedent in the United States of slaps on the wrist for the banking industry and nobody goes jail. Look at that one. Bank of America finds out fees worth work both ways. That's funny. They take your money in the fees and they pay them to the government when they get in trouble. But like this was Chinese money laundering. Like one of the worst things you can possibly do, you know, like JP Morgan, by the way, like Epstein's banker. Nobody cares. But, you know, uh, money laundering for foreign governments and 5 billion that people know about, probably a lot more, and they only get a $1.2 billion fine, and nobody goes to jail. Much like the Great Recession when the banking industry collapsed the entire planet. Nobody goes to jail. Nobody gets in trouble. Meanwhile, Binance CZ goes to jail in the United States for lesser crimes than the ones that are transparently being enacted by our very own banks. And nobody blinks an eye. We need answers. This is why we Bitcoin. This is why we built DeFi. This is why crypto and blockchain were created. Now, given they're being co-opted by these very entities now, it's a whole entire different conversation, but this is why it was created. And you can see it right here transparently. I went ahead and I made a chart. I want you to see how bad this is. Look, biggest bank fines and settlements since 2000. This is only in this millennium. Bank of America has paid $88 billion in fines for money laundering and actual crimes. JP Morgan 40 billion. UBS 32 billion. Wells Fargo 28 billion. Cityroup 27 billion. Where are the perox? Where are the white collar criminals sitting in jail cells? It does not exist because banks have this as their actual business model. do crime, make a bunch, pay a small fine, move on, do more crime. The numbers are right there. How do these entities continue to exist paying fines for criminal activity this large? It's absolutely astounding. And speaking of absolutely astounding, we have a how not to invest. Hit it. >> How [music] to invest. >> How to invest. >> Yes. This is a story that I told you earlier this week, but it's important and it is this one. Ledger says, "Spy chip inside crypto ledger devices transmitted wallet keys over mobile network." Here it is. I have been a huge advocate of self-custody. I still believe you should find a way to be your own bank, but you cannot do it with any of the commercially sold Bitcoin hardware wallet devices. Maybe in multisig where you have a number of them and a single set of keys from one of these devices is not controlling your entire net worth. But you cannot just buy a hardware device in crypto right now and take for granted that your assets are going to be safe. Cold wallet hot mess AI hot mess like this show today. Said it out loud. It's really it's an existential crisis. The how not to invest is not to be your own bank with a ledger device. Right now, I've had the Ledger guys on a lot. I'll have them on again, but man, they have things to answer for. And you know what? Uh, I want Can you show the last lower third right now? We got it ready. It's going to come. Tesla flies. Haters still grounded. There are people. Okay. Show the video really quick. Just show it. Heat. Heat. [music] [music] [music] >> [music] [music] [music] >> I just watched the car do a kick flip. It went upside down. It was inverted. It stuck to the ceiling. It backed down. It went fast. It flipped over and then floated down to the ground. And there are people on the internet telling me this technology already exists. It's no big deal. If you are not inspired by watching that video or seeing what Elon Musk is doing, then you need to go hug a unicorn or buy 17 puppies, eat a apple pie, do whatever it is to reset you and make you happy. Amazing things are still happening in the world. And if you can't witness them, I feel bad for you. That's all I got on the Daily Wolf. I'll see you on Monday. Is