Bitcoin $65k on cooling inflation. Warsh says not so fast.

Transcript

Tom Bitcoin's knocking on sixty-five thousand, buddy — inflation's cooling, but I'm getting whiplash from the Fed.

Marie It's Wednesday, July 15, the New York Edition. I'm Marie, with Tom and Gerald. And Tom — whiplash is right. The C P I print crushed rate-hike expectations, and now Warsh wants to tighten. Which one do we believe?

Gerald Honestly, Marie — I believe the bond market. And the bond market is short-duration, long-dollar, and very, very twitchy.

Tom Alright, but let's start where the energy is — crypto. Bitcoin ripping toward sixty-five thousand because rate-hike odds just collapsed from forty-three percent to thirteen. CoinDesk says it's the inflation print. COIN is still down sixty-four percent from its high, so there's room.

Marie Hold on, Tom — COIN trades at thirty-three times forward earnings. That's not 'room', that's a valuation that needs everything to go right. If Warsh re-tightens, volume dries up.

Tom No but that's exactly my point — Warsh talk is campaign rhetoric! He's not even confirmed. The C P I trend is real. COIN's a call option on crypto adoption, and sixty-five thousand Bitcoin is the headline that brings retail back.

Gerald Tom, you're chasing a narrative. COIN's not a call option — it's a thirty-three multiple on a cyclical exchange. I'd rather play the macro: long TBT, short TLT. Warsh's speech sent the ultralong bond short up five-point-four percent year to date, and that was BEFORE the C P I.

Marie Yeah look, Gerald's right about the macro. The Warsh pledge — 'regime change' to kill inflation — that's not just talk. The dollar index is at new highs, gold's down nearly eight percent, and TLT is wobbling two percent above its low. The market's pricing a hawk.

Tom Okay sure, but did you actually look at the — wait, Gerald, yesterday you said 'buy EM bonds' and now you're long dollar? Which is it?

Gerald Ha — fair enough. Yesterday's call was pre-Warsh tape bomb. Today, I'm watching the BOJ independence story Nikkei Asia ran. Japanese long-yield risk is leaking into global bonds. TLT could crack further. The EM bond trade is... under review.

Marie See, Gerald, this is what I mean — the dollar is the missing story. FXI is down sixteen percent, INDA down ten-point-seven. Nobody's connecting the dots to EM carry-trade stress. A dollar rip from here could spark a sell-off that catches everyone offside.

Gerald That's a barbell I can get behind: short long-duration bonds via TBT, and lean into the real-economy buildout. AI infrastructure, maybe energy. But not retail crypto.

Tom Speaking of real economy — Foxconn's fully automated lines are pumping out one server tray per minute for Nvidia's Vera Rubin. Nikkei Asia says Taiwanese companies are using AI to build AI servers. This is the self-reinforcing loop, buddy.

Gerald Right, and Nvidia's also teaming up with Mitsubishi Heavy on data center cooling. Nikkei Asia again — that's two sources flagging the same infrastructure acceleration. NVDA is still eleven percent below its high.

Marie I'm going to push back here — eleven percent below a high that was priced for perfection isn't 'cheap'. But the physical buildout is undeniable. Foxconn and Mitsubishi Heavy are tangible beneficiaries. 2317 and 7011 are buys.

Tom Exactly. The supply bottleneck is easing. That's bullish for the whole AI stack. Nvidia, Foxconn, Mitsubishi Heavy — it's all one trade.

Gerald Alright, but the market hasn't moved on twenty-four percent earnings growth in two months. Santoli at CNBC frames it as a 'sell the news' — good news is priced, bad news isn't. That's a warning.

Marie Yes! That's the disconnect. The S&P 500 is within one percent of its all-time high, and yet no rally on blockbuster earnings expectations. Perfection is already in the price. I'm skeptical of adding broad beta here.

Tom So you're saying we just sit on our hands while AI factories literally build themselves? That's a tough sell, Marie.

Gerald Tom, you can buy the factories — not the index. That's the stock-picker's market. Which brings me to refiners: Valero up seventy-nine percent year to date, Marathon up eighty percent. WSJ says they're minting money. But they're at all-time highs.

Tom No way — refiners are profit machines right now! Geopolitical crack spreads are wide open. But okay, I'll hold VLO and MPC, not chase. The easy money's been made.

Marie Look, I'll take that discipline. But Gerald, what about that China chips I P O? CXMT is raising eight and a half to ten billion dollars — the largest Chinese listing since 2010.

Gerald Nikkei Asia and the Financial Times both highlight it. This is a state-backed push for semiconductor self-sufficiency. FXI is down sixteen percent year to date, near multi-year lows. A catalyst? Maybe. But a re-rating won't be linear.

Tom Buddy, that's exactly when you buy China. Sentiment is rock bottom, and here comes a ten-billion-dollar tech I P O. SMIC too — the national champion foundry. I'm buying FXI and 0981.

Marie I'm going to push back — the dollar headwind is fierce for EM. FXI might get an I P O bounce, but the structural story is still regulatory opacity and geopolitical risk. I'd rather play the AI infrastructure in Taiwan than mainland China.

Gerald Fair point. But the conviction behind the CXMT deal is real. It'll force global investors to reassess China tech. Still, I'd size small.

Tom Alright, let's talk Japan autos — Nikkei Asia warns they have to spend big on software now. Toyota's down almost twenty percent year to date. Gerald, your value radar must be pinging.

Gerald Ha — Toyota at eleven times forward earnings does look interesting. But a fresh capex cycle on software? That's a margin headwind. I'm holding TM and HMC, not buying more until we see how much they have to spend.

Marie And don't forget the BOJ independence risk — that could steepen the US curve and hit Japanese equities. EWJ has rallied fourteen percent year to date, so the risk isn't priced in. I'd hold EWJ, not buy more.

Tom Okay, okay — last signal group: AI agentic payments. Visa, Mastercard, Ripple backing x402 standard. CoinDesk says it's settling twenty-four million dollars across seventy-five million transactions a month. Baby numbers, but big names.

Gerald Right — so it's a long-dated optionality play. Visa trades near its fifty-two-week high at twenty-four times earnings. No near-term revenue impact. Hold V and MA, don't buy. Same for XRP — still fifty-four percent below its high with unproven adoption.

Marie And I'll add — this is exactly the kind of thing that gets overhyped. 'AI payments' sounds great until you realize it's a protocol that might take years. I'm holding, not chasing.

Gerald Speaking of chasing — Airtel Africa is lining up bankers for a one and a half billion dollar London I P O of its mobile money unit. FT Companies notes it'd boost the UK's depressed markets. The stock's popped seven and a half percent in a week on the leak.

Tom Buy AAF.L — it's still down four-point-four percent year to date. A mobile-money spin-off could crystallize value. It's a rare fintech catalyst in a beaten-down name.

Marie I'm on board with that. And it could lift EM digital stories broadly — INDA is down nearly eleven percent year to date, so there's a tangential play. But the India bet is more macro, so I'd size smaller.

Gerald Alright, we've got a lot of signals, but the convergence is clear: real-economy investment is accelerating — AI infrastructure, refining, maybe China chips — while the bond market prices hawkish risk. The barbell: short long-duration bonds, long physical assets.

Tom Right — TBT for the higher-rates trade, NVDA and Foxconn for the AI buildout, and VLO and MPC for energy profits. That's the cross-cutting expression.

Marie But here's the counterargument: Warsh is talking his book. If inflation keeps cooling, he won't even get the chance to tighten. TBT is crowded, and VLO is up seventy-nine percent. A dovish follow-through could be violent.

Gerald That's why position size is everything. And I'll repeat: the dollar is the sleeper. UUP up five percent year to date, new highs — and no one is pricing EM pain. That's the next shoe.

Tom So we're agreed on the barbell, but we're watching the dollar and sizing cautiously. Not bad for a Wednesday morning.

Gerald One more thing — yesterday we bought US Oil Fund. Given the refiner surge, that was well-timed. Up another couple percent?

Tom For real? Beautiful. That trade's working. And SoftBank too — AI infrastructure tailwind.

Marie Don't get cocky, Tom. As always, none of this is investment advice. These are our takes — you do your own due diligence.

Tom Alright, alright. If you're just finding us, hit follow on Spotify, or check investmentflash.com for the full digest with charts and sources. Tomorrow's London Edition at seven-thirty a.m. London time — we'll see what overnight moves bring.

Marie I'm Marie —

Gerald Gerald —

Tom And Tom. Keep it flashy.