Are Rate Cuts Dead?

Summary

• Rate cuts are not dead — that’s Jonah’s closing call. In the Iran deal’s aftermath, “an ocean of oil is about to walk the market”: crude nuked from north of $100 to the 80s, energy was ~35-40% of the recent CPI rise, and that collapse is “a gift to Warsh” — the Fed chair doesn’t have to stake his early reputation on a disastrous pivot. “I think it’s just rates lower for the foreseeable future.”
• A full-blown war with Iran and a shut Strait of Hormuz produced barely a sell-off, and both hosts draw the same conclusion: only financial engineering — a credit crisis — takes this market down. Jonah’s analogy from his days as a “Dollar Again” options trader: every Kim Jong-un missile launch made the yen puke a little less, until the market said “show me the war.” Geopolitical catalysts seem unable to crack the mega-trend growth story.
• The regime is flows, not fundamentals: “So many people are still playing the old game of fundamentals and they’re not playing the new game of flows.” SpaceX is the microcosm — “a high FDV low float meme coin” with only ~4% float that index funds must buy ($7-10bn initial Nasdaq-100 buying per Barron’s) and retail FOMOing in. Fundamentals return “when the credit cycle resets and liquidity gets drained” — “we’re nowhere close.”
• The SpaceX unlock map is the trade: 20% (up to 30% if it holds above 175) unlocks after the first quarterly report, 7% tranches at 70/90/105/135 days post-IPO, 28% after Q2 earnings, the rest at 180 days — nothing major until roughly August/September. Jonah says unlocks are “100% going to be front-run… you probably want to sell 2 weeks before. There’s no bullish unlock here.” Avi is neutral at current prices, having missed the 160-165 buy they’d flagged.
• The tail risk is the Fed itself: if Warsh says things that might indicate he’s aligned with Trump and unbothered by inflation, “we’re going to get the craziest sugar rush that you’ve ever seen over the summer” — and if inflation keeps printing high, that sets up the real unwind into hikes. Avi wants Warsh to copy Powell’s game of baked-in 3-5% pullbacks to help prevent people from getting over their skis and avoid a major leverage buildup.
• Avi won’t buy Bitcoin until apathy turns to disdain: it’s “become the Saylor asset” — the active float is Michael Saylor, and his credit problem is why BTC underperforms. He wants grave-dancing and a Bloomberg front page asking “is the era of Bitcoin over” before buying; meanwhile Robinhood can outperform Bitcoin over the next 6 months (HOOD 75→108 since he flagged it vs Hyperliquid 60→75; core thesis: “the everything app”). Avi still holds a million-dollar BTC target.
• The Iran deal is “basically a pause” — Avi gives it 9-18 months while oil stocks rebuild, then another war, but Israel alone with America out: “we’re clear through to 2027.” Avi’s portfolio consequence: with geopolitics cooling into the midterms, he’s questioning his ~1-year America-first positions — “if you’re heavily allocated to the America first and defense contractor thesis, maybe you need to get out a little bit” (REMX, USAR).

Deep dive

1. War couldn’t crack it — only a credit crisis ends the level

• Avi’s opening astonishment sets the frame: “We had a full-blown war with Iran. And we barely had a sell-off. We had the Strait of Hormuz shut. And we barely had a sell-off. What is going to tank the market?” The conclusion: financial engineering rather than war is what brings it down. The story is “massive growth because we’re entering into the mega trends of the future.”
• Jonah agrees flatly — “there’s no real sell-off without a credit crisis” — and points to the live example: Bitcoin’s active float has become Michael Saylor, and “Michael Saylor has a credit problem” — that’s why BTC underperforms.
• His template comes from trading “Dollar Again” options in 2010: every Kim Jong-un launch made the yen puke, “but it would puke a little bit less every time because finally the market was like show me the war.” Same dynamic now — markets are effectively daring Trump and Iran to keep the straits shut past the critical commercial-storage barrel count they’d flagged in advance. “Until that happens, long only.”

2. Play the game of flows — but you still need fundamentals to have a career

• The episode’s thesis statement, from Avi: “So many people are still playing the old game of fundamentals and they’re not playing the new game of flows… You as the listener, you as the investor, you as the trader, play the game of flows now.” The caveat: when the credit cycle resets and liquidity drains, fundamentals return — “but right now… we’re nowhere close.”
• Jonah’s counterweight, the best advice of his career from his first boss at Lehman: “You got to know the fundamentals. If you don’t know the fundamentals, you’ll never have a career. You may have a good year here or there, but you’ll never have a career.” The synthesis: fundamentals are the long-run license; flows are the current game.
• Avi’s video-game frame for the whole market: “gather as many gold coins before the end of the level” — the level ends “whenever there’s a credit problem, whenever there’s a borrowing issue… that’s when you got to get out. But we’re nowhere near that.”

3. SpaceX is a high-FDV, low-float meme coin — map the unlocks or get torpedoed

• Jonah’s framing: over the long run, fundamentals are Starlink TAM and “mining freaking diamonds on Halley’s Comet”; in the short run “this is a high FDV low float meme coin. Fundamentals do not matter.” Short it on valuation “and you pull a David Einhorn… Elon will be sending you a pair of short shorts” — the same Einhorn who cheerled shorting Lehman while Jonah worked there. What matters: ~4% float, index funds forced to allocate, retail obsessed. Every person holding locked-up SpaceX stock is salivating over a $10-20 million home in Tiburon, or perhaps a $20-40 million home in Sausalito or Tiburon, and will sell the second they can — but they can’t yet.
• The hosts’ actionable schedule: 20% of the stock unlocks after the first quarterly report (up to 30% if it trades consistently above 175), 7% tranches at 70, 90, 105 and 135 days post-IPO, 28% after the second quarterly report, the remainder at 180 days — so nothing major until August or September, with Nasdaq entry later this month and $7-10bn of initial index buying per Barron’s. Jonah says those unlocks are 100% going to be front-run… you probably want to sell 2 weeks before if you own it. “There’s no bullish unlock here.”
• Avi’s warning to crypto-native contrarians who think everyone knows this game: it didn’t even work in crypto — unlocks “might pump for like a week… and then it would just go straight down forever.” The tradfi world missed this whole trade precisely because “they’re playing the old game.” Avi stays neutral at current prices — he missed the 160-165 entry they’d called on the last pod (“I got lazy”).

4. The Warsh Fed: sugar rush risk, and why oil just saved the cut cycle

• With the decision minutes away (99.9% chance, with 97% cited on screen, that the range holds; 2026 cuts already priced out), Avi says the meeting itself is “absolutely irrelevant” — what matters is how Fed chair Kevin Warsh talks at 2:30. If he says things that might indicate he’s unworried about inflation and aligned with Trump, “we could see a rocket” — then “the craziest sugar rush that you’ve ever seen over the summer,” and if inflation keeps coming in high, “that’s what sets us up for a real unwind” into hikes.
• Avi’s hope is that Warsh plays Powell’s game: “let it go and then let it come back,” baking in 3-5% pullbacks so resilience builds — “it’s much worse for the market to get way ahead of itself and then have a massive crash.” One wrinkle via Morgan Stanley: Warsh may adopt a quieter, vaguer communication style with less forward guidance. Jonah’s poker test: “Does he play with the cards face up or face down? If it’s face down… tighten up the risk.”
• Jonah’s resolution of the title question: oil collapsing from north of $100 to the 80s on the Iran deal is “extremely bearish inflation” — energy was ~35-40% of the recent CPI rise — and “a gift to Warsh. He doesn’t have to turn the ship around… I think it’s just rates lower for the foreseeable future. Rate cuts are not dead.”
• On credit itself, Avi sees no stress: high-yield spreads at 275bp vs a 525bp 30-year average — tight but with room — and anyway “high yield is not really what matters. What matters is where the mega scalers can finance… that’s what’s driving the entire market.”

5. Bitcoin: apathy isn’t disdain — and Robinhood is the better gamble

• Jonah shares the Bitcoin MVRV-Z score hard-bouncing off its ~0.25 buy zone and generalizes: “oil is the MVRV-Z score for the broader economy right now” — with both flashing, “we’re flashing bullish across all of the underlying indicators across multiple markets.”
• Avi’s refusal is about mindshare, not indicators: “Bitcoin has really just become the Saylor asset… Right now we are in apathy mode. What I want is disdain.” Jonah’s pushback — every crypto professional has pivoted to AI, isn’t that disdain? — gets rejected: “It doesn’t matter. We’re not grave dancing yet.” He wants genuine Saylor blow-up talk and “Bloomberg has a front page article about is the era of Bitcoin over” before buying.
• The opportunity cost is his standing HOOD call: since he flagged the Robinhood/Hyperliquid pair (HOOD at 75, HYPE at 60; now 108 vs 75), Robinhood keeps confirming — the Trump account, institutional capture, diversification out of crypto revenue. “I think that Robinhood can outperform Bitcoin over the next 6 months — why bet on Bitcoin when I can bet on something that benefits massively if Bitcoin goes up, but has all these other ways to benefit?” Avi, for the record, still holds a million-dollar BTC price target — “it’s obviously replacing the dollar” in certain global trade.

6. Iran is a 9-18 month pause — and time to rethink the America-first book

• Avi’s steel-man: assuming Iran was months from a testable weapon, the strikes set them back a couple of years — but the deal “is basically a pause. Let’s just let the oil stocks build back up… There will be another war, mark my words.” His window: 9-18 months while global crude inventories rebuild. His color on the new power behind Mojtaba Khamenei: an extremist secret-services hardliner who pushed to continue the Iran-Iraq war and polled under 3% for president — “a real psycho… probably an order of magnitude crazier than the Ayatollah,” but “way less effective and way less credible.”
• The disagreement worth keeping: Avi thinks a solo Israel-Iran round leaves Hormuz open — Iran holding the world hostage over a bilateral war “would really turn the world against them.” Jonah’s contrarian take is Iran would try to ransom the strait to turn opinion against Israel — “I just don’t think it’ll work” — and Israel won’t move until oil supplies restock anyway. Both land in the same place: “we’re clear through to 2027.”
• Avi’s portfolio conclusion: if Trump, now “one for three” on picked fights, takes his foot off the gas into the midterms, the America-first thesis weakens — “if you’re heavily allocated to the America first and defense contractor thesis, maybe you need to get out a little bit.” He’s questioning his ~1-year REMX position and names USAR; uranium, he notes, isn’t part of this thesis.

7. Process: the idea journal, and distilling what you’re actually betting on

• Jonah confessed the SpaceX failure — calling the 160 buy and not executing. Avi’s fix is the idea journal: “every time you have an idea, your job as an investor and a trader is to make sure you get a yes or no on that idea… Some of the worst missed trades in my life are the ones that I was just too lazy to make a final decision on.” Paper and pencil, he says, helps form the neural connections.
• His companion discipline is distillation: the billionaires he worked for spend maybe 30 hours a week on markets because they’ve stopped drowning in decision fatigue. For SpaceX, forget TAM debates — “there’s 4% of this thing on float that index funds have to allocate to it and retail is obsessed with it, and that makes it a phenomenal trade for the next month.” For Intel: can they compete with TSMC on chip design? Advanced packaging accepted by Google and a 3 million order of TPUs “confirms the thesis. Everything else is noise.” For Robinhood: “the core thesis is the everything app” — “if their crypto revenues fall, who cares?”
• Jonah’s version, from 15 years on trading floors: like London cabbies whose brains were rewired by “the knowledge,” traders develop ruthless signal filters — he forgets what his wife says “within microseconds” if it doesn’t matter. Applied to FinTwit: filter out the Starlink-TAM tweets and ask only “Who’s buying? Who’s selling? It’s a stock and flow problem.”