September 7, 2023 • 57 mins
My good friend Nobody Special Finance joins me on this episode to unravel the mysterious story of fraud, deception, and market manipulation involved in Nvidia's massive bubble right now. You don't want to miss this one. Follow https://www.youtube.com/c/NobodySpecialFinance for more.
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Episode Transcript
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Speaker 1 (00:00):
What's up, everybody. My name is Joe Brown. This is
financial heresy where we talk about how money works so
that you can make more, keep more, and give more.
Today I've got my good friend Jack Nobody Special Finance
on the channel where you've got a bombshell report for you.
Nvidia has been in the news a lot recently, mainly
because its stock price has been going through the roof
(00:22):
reaching new levels and then going through those roofs as well,
just skyrocketing. And Jack did some research and found out
that might not all be above board and started doing
some digging figuring out where these orders are coming from
and the companies involved in these very suspicious numbers of orders,
(00:46):
and what these companies have done in the past, and
found out some if it proves to be true, some
very crazy things, some very shady things happening behind the
scenes potentially here. And so really excited to have have
Jack on the show today for you, and you can
be the judge. After listening to all of the evidence.
(01:08):
You know, there's not necessarily a fire, but there is
a lot of smoke, and so we're going to go
through a lot of that. So really excited for this
one for you today. Report on what's going on behind
the scenes at Invidia. All right, Well, thank you so
much Jack for joining me today here. I am really
excited to get into this. Like we said earlier, unweaving
(01:30):
the story of Core, we've here, So let's start with
what's going on right now within Nvidia.
Speaker 2 (01:39):
All right. So, unless you've been under a rock, you've
probably heard AI mentioned a few times in the last
few months, right and in Vidia is at the epicenter
of the AI mania, and Vidia is AI mania. Let's
just call it what it is. Most of the games
in the S and P five hundred have been from
the magnificent seven big tech stocks, and then VideA has
(02:00):
been the leader of that pack. Without Nvidia, the AI
rally would not have been and we'd be looking at
an S and P that was maybe up one or
two percent this year, maybe even down. So in Vidia
is driving the growth narrative of the entire stock market
right now. And within Nvidia, we're all familiar and VideA
(02:23):
just posted a fantastic quarter. I remember being blown away
by the numbers, just amazing growth. Their growth had already
been amazing, and I remember hearing their projections a quarter
ago and being doubtful of the numbers they were given,
and then they came in and they blew away even
those numbers. So just phenomenal quarter. And then the stock
(02:44):
reacted kind of strangely. The stock shot up eleven percent
after hours after the earnings, and then the rally faded
pretty much from the opening bill. We saw some selling
of the news and the only takeaway from that was
that retail piled in at the numbers and the big
money faded the rally, and so that made me very suspicious.
(03:08):
And then I caught wind of a tweet from Samantha
La Duke, who is the founder and chief investment officer
of LaDuke Trading. She posted a Twitter thread describing how
most of this magnificent performance of in Vidia's quarter was
driven by one of their customers, a company I had
never heard of called core Weave, and in particular, core
(03:30):
Weave had just placed a massive order for these new
h one hundred GPUs in videos amazing technology, and it
is amazing technology, you know, through this whole narrative here,
don't mistake this for me doubting in videas tech. The
tech is amazing, that doesn't mean the business practices are though,
and this company, core Weave was really the big driver.
(03:54):
They had just taken out a two point three billion
dollar line of credit, and they took that two point
three billion dollar line of credit and they bought two
point three billion dollars worth of Nvidia GPUs And coincidentally,
that two point three billion dollars was the exact number
of the beat in data centers for Nvidia. So really
(04:14):
all of Nvidia's growth was from this one company, core Weef.
And that's when I started to go down this rabbit
hole of the company, the people behind the company, the
other companies involved, where their money was coming from, some
of Nvidia's history, and every time I turned on turned
over a rock, there was just more rot and more
(04:37):
stink and more cockroaches scurrying, and it really this rabbit
hole goes deep. Joe, I am going to try to
be as efficient with my words as possible here, because
this story does go deep. But I promise you there
is so much here you're going to want to hear
every word of this.
Speaker 1 (04:51):
All right, Well, I'm excited for anybody who's been following
this podcast and my YouTube channel for a while knows,
and but I do need to make the disclosure right
here that as of the time of this recording I
do have a a short position on both the S
and P five hundred and in video and so uh
(05:14):
and so take take that uh uh for what it's worth.
And so I personally am very excited to dive into
this because I started seeing you talk about about this,
like as you mentioned once, you started kind of turning
over the rocks and discovering things.
Speaker 2 (05:33):
So I was just like, you know.
Speaker 1 (05:34):
What, we've gotta We've got to have you on the
show to hammer this out. So let's let's start at
Let's start at the beginning chronologically with uh, just in
video the history of how they've you know, maybe fudge
the numbers a little bit here and there, just so
(05:54):
we can see how far back some of this, uh
these practices go to boost their their stock price.
Speaker 2 (06:02):
So right now I'm actually looking at a press release
from the SEC dated May six, twenty twenty two. The
SEC charges in Vidia Corporation with inadequate disclosures about the
impact of crypto mining. It turns out, in twenty eighteen,
during the last crypto bubble, Jensen Huang, the CEO of Nvidia,
(06:26):
withheld vital information about how much of Nvidia's business was
dependent on crypto mining. Right, these Nvidia GPUs were selling
like crazy, and all of those earnings were being reported
in their gaming business on all their quarterly and their
annual reports, and these numbers were fantastic in Nvidia was
a big growth story in twenty eighteen, and Jensen Wang
(06:49):
was fined by the SEC because he withheld information that
most of those Nvidia GPUs were being sold to crypto miners,
and that was vital information for his investors because, as
you know, in twenty eighteen, crypto didn't do so well.
That was the end of the prior having cycle, and Bitcoin,
(07:09):
along with all the other cryptos, started to crash and
with it crashed invidious earnings, and Jensen Wong withheld information
from his investors about how dependent on crypto minors his
business was, and his investors paid the price for that.
So the SEC, in typical SEC fashion, Jensen Wong wrote
him a check five and a half million dollars and
(07:31):
they settled without any admission of wrongdoing, and so we
basically got away with it. This was that was the
first one. What was the date on that, This was
May sixth of twenty twenty two. Last year it was.
It was based on events that took place in twenty eighteen, okay, and.
Speaker 1 (07:55):
In twenty eighteen, for those of you who are not
looking at a chart. In October of twenty eighteen, the
stock price in Video stock price peaked out at just
about seventy three dollars per share. That was in October.
By the end of the year it had crashed all
the way to like thirty one thirty two dollars per share,
(08:15):
so fifty percent just about decline in the stock price
as a result of that. So, as you said, investors
paid the price. This wasn't the first time, though, that
they had done something like this under his leadership.
Speaker 2 (08:33):
That's correct. It turns out I found another SEC filing
and somebody responded to I can't remember the individual on Twitter.
I'd give them credit, but somebody sent this to me
just today in response to one of my Twitter videos
about Core. We've that all the way back in two thousand,
which I didn't even know when Video's history goes back
(08:53):
that far. Nobody had ever heard of them. In two thousand,
the cfo's name was Christine Hoberg, and I'm looking here
at a SEC filing that's dated September eleventh, two thousand
and three, and they are accusing the CFO of in Nvidia,
which at the time was still you know, Jensen Wong founded.
(09:15):
He's been the CEO the whole time. So this was
on Jensen Wang's watch that she made materially false statements
in in Vidia's quarterly earnings, that in particular, she purposely
failed to record three point three million dollars in expenses
related to a deal with suppliers. And what happened was
(09:36):
Christine Hoberg, then CFO of Nvidia, cut this deal with
one of her suppliers where they would undercharge in Vidia
for some of their product, and then they cut a
separate deal in a second document that said the vendor
would recoup that investment by overcharging in a following quarter.
And this resulted in a fifteen percent is actually fifteen
(09:59):
points three percent overstatement of Nvidia's earnings on that quarterly report.
And she furthermore, she withheld the second document that said
the vendor is going to overcharge us next quarter to
recover their investment. She purposely created two different documents, two
different agreements, and withheld the agreement about overpaying later from
(10:20):
their independent auditors, because obviously their independent order would have
flagged that and said you can't do that, that's illegal.
So she hid that document from them and once again
settled with the SEC admitting no wrongdoing. But she paid
six hundred and seventy one thousand dollars. That's a pretty
expensive not wrongdoing admission there. And what we have here
(10:43):
is two examples of Nvidia either withholding vital information, if
not outright making materially false statements to their investors for
the sake of maintaining a growth narrative in their quarterly
earnings report. And this is not a theory. These are
doctors documented. You know, I just sent you the links.
Anybody can go check these. They're out there. So that's
(11:06):
in Vidia's history, not a squeaky clean company. And you know,
I've heard the criticism that Jensen Huang run he runs
his company like a hedge fund. So there's a pretty
good example of Nvidia doing some unclean practices when it
comes to their books.
Speaker 1 (11:22):
Now, so we've got two examples historically a little bit
spread apart, but still under the same leadership. As far
as employee compensation goes, I know that it's extremely important
that their stock price continues to grow because the way
that their stock options work, they do have the capability
to basically backdate the cost, so they can they can
(11:49):
increase their compensation if the stock price continues to climb.
And so it's a kind of a system wide incentive
to have that stock price continue to go up based
on internal compensation and how their stock options are are
set up. What's going on right now, So so you
(12:11):
alluded to it at the beginning. Let's get into a
little bit just the Nvidia side. First they beat. It's
keeping the market up what the stock price did, and
then we'll get into the other companies.
Speaker 2 (12:24):
So you have to understand in Video's share right now,
the stock is being driven by the growth. It's not
being driven by how awesome the tech is. All right,
And that's the biggest criticism I've seen of my work
recently is people saying you just don't get the science. Okay, Boomer,
I'm not arguing that the chips aren't awesome. I produce
my videos on an in videographics card. Okay, the tech
(12:44):
is awesome. It's the business, it's the growth narrative and
in videos trading it's something like thirty eight times sales
right now. Obscene, guys, this is quadruple the peak of
the dot com bubble. Right. You know that famous quote
from the Sun Microsystems CEO, what were you thinking when
you gave me a ten time sales valuation? And he
(13:06):
goes on, you know, I could go ten years without
paying any expenses, any taxes, any anything, and I still
it would take me ten years to pay you back
at that rate. What were you thinking? Nvidia is almost forty,
So if ten was crazy, forty is obscene. Now that
also means that in Nvidia needs to maintain this growth
story at all costs. The second the growth even slows
(13:26):
a little bit, this thing is coming back down to
earth in a big way, and it's bringing the whole
market with it. And what I see in this most
recent quarter is a last minute edition of two point
three billion dollars of money from this company core weave
that nobody has ever heard of, that the source of
(13:47):
that money is highly suspicious, and the people behind this
company are highly suspicious. And these two this company and
the people giving them the money, are propping up the
stock value of a company that has a history of
making false statements and doing some shady deals to inflate
their stock price, and considering what's riding on this, I
decided to start looking at it.
Speaker 1 (14:08):
Yeah, so it's worth mentioning as well because we'll hit
on this later that basically the valuation of the major
indexes is being held up almost purely by and video
right now. Without that, you would not have indexes where
(14:28):
they're at.
Speaker 2 (14:29):
Yeah, you know, my background is nuclear power. I spent
fifteen years working at commercial nuclear power plants. I should
just close that I'm not a finance guy by pedigree,
but when I used to work in nuclear power, we
were always on the lookout for what was referred to
as a single point vulnerability. Right. Nuclear power uses defense
(14:49):
in depths. We have multiple barriers to protect the public
from radioactive materials, multiple fail safes, fail safes for the
fail safes, fail safes for them, and we're always on
the lookout for a single point vault moerability. Is there
one component that could break and you lose your backup
and your backup and your backup and your backup. So
we're taught to seek those out and limit them, eliminate them.
(15:10):
And right now, in Vidia is a single point vulnerability
for the whole market. Right, it is one company that
any flaw in the Nvidia narrative, the whole market comes
down with it. And I found a lot of flaws
in the Nvidia narrative, and the press is not covering it.
The press is writing puff pieces about this core Weave company.
And the time to ask questions is when the number
(15:30):
is going up, not after the number has gone down.
And everybody's saying, how could this happen? And so I
want to just zero in on that two point three
billion dollar line of credit that drove these Nvidia earnings,
because it was this company, Core Weave, that got this
two point three billion dollar line of credit credit. First
of all, that is the entire market cap at the
time of Core Weave. So somebody loaned them their entire valuation.
Speaker 1 (15:57):
Are these public company? No, okay, it was loaned to
them by.
Speaker 2 (16:04):
Magnetar Capital was the leader of this round, but also
Blackstone was played a major role in that. Blackstone has
a ownership stake in Magnetar Capital. Other players included black Rock, Carlisle, Pimco.
There was a couple other smaller players in there, but
the big dogs of Wall Street all got together and
loan Core. We have two point three billion dollars and
Core We've turned around and gave that money right to Nvidia,
(16:26):
and that resulted in that big earnings beat. And the
connection that Samantha LaDuke made is, Hey, all these people
who are giving this money to Core Weave for the
purpose of driving in Nvidia sales higher, they're all major
stakeholders in Nvidia. So take that eleven percent rally in
Nvidia's share price after hours, these companies made that two
(16:47):
point three billion dollars back. If they sell, if they
sold a small portion of their position after hours or
at opening bell the next day, which you know that
rally after earnings faded that day, then they could have
recovered that the whole two point three billion dollar investment
and then some just by selling that rally after the
earnings were announced. And there was more smelly things about
(17:10):
that two point three billion line of credit, like the
fact that it was collateralized by the very chips that
they bought with it.
Speaker 1 (17:17):
So magnatarin Code, we gotta pause there because I'm gonna
need I'm gonna need to focus on that. So just
to make sure that I have I have this story
straight so far, in Vidia flies up after hours because
they report a beat the amount that they beat by
two point three billion dollars. Turns out that was all
(17:39):
a purchase order from one company, Core Weave, who will
get into But nobody's ever heard of these guys before.
Suddenly they have two point three billion dollars to make
a big purchase from Nvidia. Where did they get that money? Well,
it wasn't from earnings, it wasn't from revenue. It was
a pile of loans. And these loans came from companies
(18:04):
like Magnetar, Blackstone, black Rock, Pimco, and these guys, especially Magnetar,
are major shareholders of Nvidia.
Speaker 2 (18:16):
I don't know if Magnetar is a major shareholder of Invidio.
I don't know that the rest of them are. Okay,
the rest of them are. Yeah.
Speaker 1 (18:22):
Of that two point three billion dollar loan, that that
line of credit, how much of that came from Magnetar.
Speaker 2 (18:31):
They didn't break out that specifics of it. Okay, it
was led by Magnetar, And I can't give you Magnetar
until recently, right until recently, it was almost all Magnetar. Yes,
And I can take it through the timeline of core
Weave's capital raise if you want.
Speaker 1 (18:49):
I think we should get into that in a minute.
Speaker 2 (18:50):
So all right.
Speaker 1 (18:51):
So, so basically in Video is flying up because they
get a bunch of purchase orders, but it's coming from
money that was loaned through, you know, from people who
were invested in the company, meaning that they they could
just sell and Video shares after hours to pay for
(19:11):
the cost of that of that loan. Okay, if allegedly,
if you know, because obviously we don't know, we can't
see who was selling those shares. From a technical perspective,
it does look like, uh, the market didn't believe the
rally that big money sold. As soon as it pops,
it has retested to try and get back above it
failed again. So it looks like the big big money
(19:34):
doesn't doesn't believe this thing has what it takes to
to keep on going.
Speaker 2 (19:38):
It looks like retail bought the earnings and big money
sold it. Yep, Okay, keep that in mind.
Speaker 1 (19:44):
Okay, So before I cut you off, you were just
about to start talking about Shoot, I thought I wrote
it down you You were about to head into the collateral.
The collateral, right, Okay, So what do you mean by that?
The chips are the collateral for the loan.
Speaker 2 (20:06):
Yes, the loan was made to core Weave by Magnetar
and Blackstone and black Rock and the other guys. The
loan was made to core Weave. It was collateralized by
the chips that they bought with that loan, Right, I
guess it's not heard of. Your mortgage is the same way. Right,
you take out a loan, you buy a house, The
(20:26):
loan is collateralized by the house that you're buying. Although
you know, you usually put money down, you have to
buy insurance on it and all kinds of things. In
this case, though, they lent core Weave the entire valuation
of their company two point three billion dollars, and then
they collateralized it with these circuit boards, these GPUs that
they're buying. Now, think about the upgrade cycle of computer technology.
(20:51):
Circuit boards do not hold their value. So that's fishy
to say the least, that they would collateralize a two
point three billion dollar line of credit with the circuit
boards that they were buying something that what do they
have maybe a year to make that money back, maybe
two tops before These are near worthless assets. So right
(21:13):
away this thing doesn't smell right. The circular accounting. You've
got major shareholders loaning money to a company for the
purpose of them turning around and buying product from a
company that you know, the loaner owns shares of the
company collateralized by the chips that they're buying. This is
circular accounting, is what it looks like.
Speaker 1 (21:34):
So if if for some reason they are forced to,
you know, try and liquidate the collateral to get paid
back for the loan, if it takes longer than a
year or two, the collateral is worthless.
Speaker 2 (21:51):
So that's what I'll say. It's worthless. Maybe it's not worthless,
but this stuff is going to bleed value pretty quick. Sure, Okay,
all right, So who is who is Core Weave? What
are they doing with these chips? And where did they
come from? What have they been what have they been
(22:13):
doing this whole time? So Core Weave their business model.
They don't own any technology, they don't own any intellectual property.
There's nothing unique about their business model. They buy chips
from Nvidia and then they build data centers warehouse full
of these GPUs and their plan is to rent out
the computing power to provide. They look at it as
(22:37):
like the plumbing, the electricity, the grid. For artificial intelligence,
all these AI companies are going to have to rent
the computing power from core Weave, so that business model
resembles a real estate investment trust more than anything. Right,
they don't have any IP, there's nothing special about them.
The only thing special about core Weave is that Magnetar
(22:58):
will give them money and Nvidia will let them buy
their chips. Right, Microsoft would buy in Vidious chips, anybody
would buy in Vidious chips. But for whatever reason, whatever
reason in Video will sell them to core Weave mostly.
Speaker 1 (23:09):
So why when you say that, is that the just
they can only produce a certain amount and they're selling
them to core Weave, or.
Speaker 2 (23:16):
Is like yes, yeah, I mean the line to get
their hands on these chips is around the corner. Everybody
wants them, right, And that's one of the big criticisms
of my work, is that everybody wants them. And you
know my answer to that is, then why sell them
to these guys who are having to borrow their own
(23:36):
market cap collateralized by their own chips? Why are you
selling to these guys and not anybody else?
Speaker 1 (23:42):
So and so that that may not even be because
they're doing anything shady with them, it's just because where
that that uh, it circulates back to back to their
share price, which is always their ultimate goal.
Speaker 2 (23:57):
And it's also worth pointing out that in Video owns
a small state in core Weave. I don't know how much,
but Nvidia is a partial shareholder in core weaf.
Speaker 1 (24:07):
Okay, now you you mentioned earlier their total valuation was
two point three billion dollars, which is odd because that's
the same size a line of credit.
Speaker 2 (24:17):
Joe. That's that's month ago news. They're trying to sell
a stake. Core Weave is now asking for an eight
billion dollar valuation a month later, so and again reads
don't do that. There's nothing special about their business model.
So yeah, now they're asking for an eight billion dollar valuation.
They just that article hit the tape a few days ago.
But finish your thoughts. Sorry.
Speaker 1 (24:39):
So, up until recently, the main investor who's been plowing
money into core Weave has been Magnetar.
Speaker 2 (24:47):
Yes, and just to give you an idea of this,
core Weave has not always been core Weave. They were
founded in let me get the date right here. They
were founded September twenty first of twenty seventeen by these
three guys, Michael and Trader, Brandon McBee and Brian Venturo,
all right, and there was this a fourth player who
(25:08):
you'll hear about later, a guy by the name of
Jack Cogan. He's one of the board of directors. So
they were founded in September of twenty seventeen. They were
in athereum mining operation that that was what they did,
and they did that for a few years, and then
you know, they raised one point two million dollars in
twenty nineteen trying to do a cap raise. There. Good
(25:30):
for them. Something weird happened on October twenty eighth of
twenty twenty one. That's when Atlantic Cryptocorp filed the trademark
for the word core weave. And the date is important here,
October twenty eighth of twenty twenty one, because just two
weeks later, on November tenth of twenty twenty one, Magnetar
(25:51):
Capital gives them fifty million dollars. Took a fifty million
dollar stake in this outfit that two weeks ago was
just a theory minors. And then a year goes by
in November of twenty twenty two, November thirtieth, Chat GPT
is announced in AI Mania begins, all right, that's when
(26:11):
everything changed. A week after chat GPT gets announced on
December sixth of twenty twenty two, Magnetar gives core Weave
another one hundred million dollars. Four months later, April twentieth,
twenty twenty three, core Weave raises another two hundred and
twenty one million dollars one hundred and eleven million from Magnetar,
(26:34):
and the rest is split between Nvidia themselves along with
former Getthub CEO Nat Friedman and a former Apple exec
named Daniel Gross. But again Magnetar is the big player here.
Hundreds of millions coming in from Magnetar. Now we've got
in Vidia themselves taking a stake in one of their
customers a couple other guys. A month later, May thirty first,
(26:56):
core Weave gets another two hundred million, all from Magnetar.
And then on August third, was that fateful two point
three billion dollar line of credit, again led by Magnetar.
I don't know how much of that was Magnetar, just
that it was led by Magnetar. But for whatever reason,
Magnetar Capital keeps pumping tens of millions, hundreds of millions,
(27:16):
eventually billions of dollars into this company, core Weef, that
owns no intellectual property. They're just They're basically a rate.
So you know, I was sitting here putting together these videos,
and I'm saying, what is so special about core Weef?
What do they have? They have two things? And video
will let them buy chips because everybody wants some video chips.
(27:39):
But for whatever reason, core Weave gets them, and Magnetar
will give them money to buy those chips with. So
I go down the rabbit hole of who is Magnetar
because that seems like, now I'm why are they giving
these guys the money? Yeah, And when I learned about Magnetar,
oh boy, it's called the Magnetar trade. And that is
(28:03):
not a good thing. That's like having a disease named
after yourself, right, you don't want to be you don't
want there to be Joe Brown syndrome. You don't want
to be remembered for the first guy dying from some
paradise parasite, or you know, it's not a good thing.
The Magnetar trade has made famous because these guys are
the sleaziest, slimiest, most despicable people in all of Wall Street,
(28:25):
and I want to recall I'm assuming most of your
viewers have probably seen The Big Short. There's a memorable
scene in The Big Short where Steve Carell's character Mark Baum,
who's based on Steve Weisman in real life, He's having
dinner with this Asian gentleman, a CDO manager, and you know,
all of his buddies are in the corner watching and
(28:45):
they're like, oh my god, his head's going to explode,
and they're like, no, he's too, he's fascinated. He's going
to keep going. And by the end of the scene,
Steve Carell's hair is all messed up. He can't believe
what an unbelievable schmuck this guy is that he's talking
about this CDO manager. And this CDO manager was based
on a real life character by the name of wing
F Chow, and wing F Chow he worked for his
(29:09):
own company, but his job he assembled CDOs, collateralized debt obligations.
They do a pretty good job in the movie with
Chef Bourdain describing what a CDO is when he takes
the three day old fish at the restaurant and he
says it was yesterday's fish and you know, now, this
fish is not fresh anymore. So I'm going to cut
(29:30):
it into pieces and put it into a pot, and
I'm going to call it seafood bisk Right, it's all
the leftover mortgage bonds that nobody wants to buy. They're
all triple B rated crap, risky like people aren't lousy
Fico scores, ninja loans, no income, no jobs, no assets.
They put these all into a bucket. They call it
a CDO and they say it's a safe investment. So
(29:53):
Wing Chow was assembling these CDOs. What's that Because there's
a lot of them. Now it's safe, a whole lot
of yeah. Yeah. And this is at the height. This
is right before the GFC, So there's a lot of
this crap. So the banks. By now, the banks realize
what's going on. They need this stuff off their books,
and so they hire Wing Chow to sell these CDOs.
(30:16):
And what was going on was Magnetar Capital was helping
Wing Chow assemble these CDOs and they were urging Wing
Chow to put the riskiest possible mortgage bonds into these CDOs.
They wanted them to fail. They made sure these things
were the most high risk toxic sludge assets and all
(30:37):
the banks ballad sheets, and then they were sold to
unsuspecting investors while Magnetar was buying credit to fault swaps
on them, which means Magnetar was betting against them. So
they sabotaged investments, sold them to unsuspecting retail traders, and
made a fortune betting against them when they failed. Innocent
people lost billions. Magnetar made hundreds of millions. That's the
(31:02):
people who are funneling money into core Weave right now,
so core Weave can take that money and buy Nvidia chips.
So I ask you, if you're one of the guys
holding in a call option in video right now or
a share congratulations, you're up this year, You're up more
than me. Good job. I have no position in in video,
by the way, but these numbers are being driven almost
(31:28):
solely by a company with a history of creating sabotaged
investments and convincing retail to buy them so that they
can bet against them. That's the people that's the money
behind core Weave. Who is the money behind Nvidia's earnings beat?
So that's that's scary, especially considering how much is riding
(31:52):
on in video right now, the whole market, and in Nvidia,
is riding on core weave. So the whole market is
riding on core weave, and core weave is being financed
by people who sabotage investments while betting against them for
their own game. That's their history, and.
Speaker 1 (32:08):
It's important, I think, to point out that a few
people got in a little bit of trouble for what
they did during the financial crisis, not these guys. And
to make it, to make it abundantly clear to the
five year olds, you are selling something to somebody that
(32:33):
you know is gonna catch their house on fire, and
at the same time, you're buying fire insurance on that property.
So you're making somebody pay you for something that is
gonna then turn around and make you even more money.
And there's going to be a sucker holding the bag.
And so in this circumstance to kind of weave these
(32:58):
threads together. And we have a company that has a
long history of somewhat shady things to try and boost
their stock price based on for a number of reasons,
maybe it's because of employee compensation, whatever, But we've got
the same leadership at the Helm they've gotten in trouble
(33:19):
for it in the past, and the narrative that's driving
their stock higher is a growth narrative, meaning they're they're
continuing to grow, so people are buying the stock because
they think it's going to be way bigger in the
future because you know, AI is going to take over
everything and they're just growing like crazy. So growth, that
growth narrative is essential to everybody at the HELM right now.
(33:40):
That growth narrative hinges on one order from a company
called core Weave, who is just kind of they're just
they're like a data center basically, and for some reason,
and Video is letting them purchase all their chips. Because
of that, core Weave is exploding in their valuation. But
(34:00):
that explosion in their valuation is being driven by investment
and loans from a company called Magnetar. Magnetar is this
company who has a history of, like we said earlier,
selling people things that are going to catch your house
on fire while simultaneously making large bets that the house
is going to catch on fire so that they can
make a bunch of money on it. And to your
(34:22):
point that you talk, I think we were talking off
air first before we hit record. If you're like, if
you're putting this stuff together, you don't even have to
be shorting in Vidia. Maybe you're unloading shares of Nvidia
if you're overexposed, So you're trying to drive this so
you can get somebody else to buy the shares from
you at a high price. But if this thing goes down,
the whole market is going down really quickly. It's all
(34:44):
it's it's all writing up on in video right now.
So if in Nvidia slows down, stops its growth, everything
else is coming down. So you're using this potentially to
unload your long on the market. You're using this to
short the market. So there's there's no paper trail for
you know, insider trading or manipulating the market here.
Speaker 2 (35:08):
That's right, you can, and Magnetar has done a very
good job of maintaining an arm's length through their sleazy history.
Magnetar was not prosecuted during the fallout from the GFC,
Bank of America Merrill Lynch, who were Bank of America
I think who bought Merrill Lynch. They paid hundreds of
millions of dollars in fines to the SEC because they
(35:30):
withheld information from investors that those CDOs that they sold
to them were assembled by a company that was betting
against them. Don't you think the people who bought those
CDOs would have liked to know that information? That is
exactly what it looks like when emphasize looks like I do,
not having controvertible proof that they're all short these things
(35:52):
right now, right, but it really looks like it. And
look at the share performance of Nvidia after that earnings beat.
Look at that eleven percent after hours pop as retail
piles in, and look at the fade over the rest
of the day, over the following day, the big money
sold that rally. So it really there is a lot
(36:12):
of smoke there. There's a lot of smoke, all right,
And I'm not saying there's fire, but that's a lot
of smoke. Yeah, And there's more smoke coming, Joe, there's
so much more smoke coming. What do you want to
know next? Well, let's uh, well, let me ask you this.
You said there's a lot more smoke coming. What other
(36:38):
smoke is there? Because that's already a lot of smoke.
So we've got this this three way thing going with
magnetar to core weave to win video. We talked about
some of Nvidia's shady history. There run ins with the SEC.
We talked about Magnetars wonderfully unethical, diabolical unloading of CDOs
(37:00):
to the general public, and they got away with it. Amazing.
There's no happy ending in that story. Let's talk about
core weef now, because why core weef. I can't figure
out why will Nvidia sell to core Weave, Why will
Magnetar give core weave the money. There's got to be
something about these guys because they just own warehouses with
room for chips. Anybody can do that. And so I
(37:21):
started looking at these founders, all right, and I want
to zero in on three players here. Two of the
co founders, Michael and Trader, the current CEO, who has
no technical background. That's not a crime, right, I'm here
sitting here talking finance. I don't have a finance background.
I'm a mechanical engineer, all right, but that's not a crime.
Brian Venturo, he's their chief technology officer, again, does not
(37:45):
have a technical background. And one of their board of directors,
Jack Cogan, all right, there's a third founder, Brandon McBee.
He joined the party in twenty seventeen. He also doesn't
have a technical background. He's their chief science officer, but
he doesn't go back as far that I have been
able to find as these other three as Jack Cogan,
Michael and Trader, and Brandon McBee and not Brandon McBee,
(38:07):
Brian Venturo. Those three guys have been together for decades.
They founded a hedge fund together called Hudson Ridge Asset Management.
There is almost no history about what happened on that
hedge fund. I dug into them, I couldn't find anything
about them. I found a picture of a beer with
a reference to fridays at Hudson Ridge Asset Management. I
(38:29):
found an article about a weather intern from Penn State
who spent a summer in turning for Hudson Ridge Asset Management.
But nothing else. And Hudson Ridge did really good for
a year or two, and then they started to underperform
the S and P five hundred. They shut their doors
right around the time Atlantic Cryptocorp was founded. Now, Michael
and Trader, the CEO of Core Weave, Brian Venturo the
(38:52):
CTO of Core Weave, and Jack Cogan all worked together
at Hudson Ridge Asset Management. And even before that, these
three guys all worked together at a company called nat Source,
and that's where the smoke is. That's when when I
saw NAT Source that I found in about the first
ten minutes of this deep dive, and that's when I
knew something was up because NAT Source made their money
(39:15):
in carbon credits, and as soon as I said carbon credits,
all the red flags went up. I knew there was
something going on here because carbonreddits is a hot bread
hotbed of fraudulent activity, money laundering, tax evasion, all of it,
not to mention greenwashing at the expense of poor people.
(39:35):
And Jack Cogan was the former CEO of NAT Source,
Jack Cogan who sits on the board of directors at corwef.
Michael and Trader, the CEO of Corewave, was one of
his portfolio managers, and Brian Venturo, one of the co
founders of core Weave, also worked for Jack Cogan at NATSURCE.
So I went looking into nat Source and they were
(39:58):
leading the charge for cap and trade in the United
States back in two thousand and three. All through the
early two thousands, cap and trade was the big thing.
They were trying to create this mandatory market, and Jack
Cogan in particular, I found old footage of c SPAN
two this is in my part three video I talk
about this. He's asking Congress for flexible compliance frameworks, which
(40:21):
means give me a free for all. He's asking for
a mandatory cap and trade, which means force companies to
buy my product where I have very lax rules governing
my conduct. He said, do not exclude derivatives trading from
the carbon market, so allow me to financialize and do
all the kinds of wonderful engineering, manipulate prices through derivatives.
(40:41):
And he said, allow me to use carbon credits to
fund projects and developing countries in order to maintain cost
and coincidentally, that would also allow them to do business
in countries where they could take advantage of cheap land,
cheap labor. But also there's a lot of very dangerous
people with a lot of money to hide in countries
like at and Interpol warned about everything Jack Hogan was
(41:05):
asking for in a report in twenty thirteen that I
referenced in my part three video. Interpol warns how carbon
credits could be used for tax fraud, they could be
used for securities fraud, that there could be misstatement of
environmental benefits, that there could be transfer miss pricing, which
is where you basically ensure all of your profits are
(41:26):
booked in a tax saving country so that you can
low ball poor people in Africa, collect all your profits
in the Cayman Islands and then sell them into Europe
for no profits. So basically all the money is tax
free because you booked it at your shell company in
at tax saving So everything that Jack Hogan then source
guy who is now on the board of Directors of Corps,
(41:48):
we was asking Congress for Interpol, warned could facilitate financial crimes,
and Gary Gensler, oh, he's in this. Gary Gensler was
the head of the Commodity's Future Commission, the CFTC back then,
and Gary Gensler caught a lot of heat from Congress
because even though cap and trade was never passed, we
do have a voluntary carbon market, and it's not very
(42:11):
voluntary because ESG mandates forced companies to buy these carbon credits.
Otherwise the big fund managers won't buy their stock. So
Gary Gensler was running interference. He was getting a lot
of heat from Congress saying you're allowing these imaginary commodities
carbon credits to be traded willy nilly, and you're guaranteeing
that none of them fall under your jurisdiction. Why are
(42:32):
you doing that? And in one of the articles I
reference in my part three video, Gary Gensler is just
paying lip service to the need for transparency and strict regulations.
But then he's siding with Jack Hogan every time, giving
Jack Hogan exactly what he wants. That's the same Gary
Gensler who's now the head of the SEC who he
did nothing about precious metals manipulation at the CFTC, he
(42:54):
did nothing about dark pools, he did nothing about the
naked short selling of memestock. He met behind closed doors
with Sam bankman Fried. He's now leading the government takeover
of crypto. So Gary Gensler ran regulatory interference for Jack
Cogan back in the early two thousands so that he
could have this free for all in the voluntary carbon markets.
(43:15):
And one of the things I found was that nat
Source had at least twenty shell companies set up in
the Cayman Islands, possibly sixty. And I found that through
something called the Paradise Papers, which if you're listening you
probably heard of the Panama Papers, where all the wealthy
and the elites of the world were hiding their money
in shell companies in tax haven countries. The Paradise Papers
(43:39):
was essentially the same thing. It came out a few
years later. It was over thirteen million documents involving one
hundred and twenty thousand powerful people across the world. Jeffrey Epstein,
who didn't kill himself, was in it. Queen Elizabeth Prince,
Charles Rex Tillison, former Secretary of State, Wilbur Ross, former
Secretary of Commerce. All these guys were implicated in this,
(43:59):
and also implicated in the Paradise Papers were Michael and
Trader and Jack Cogan, the current CEO and director of Corweef.
These guys had at least twenty shell companies set up
in the Cayman Islands that I could find, and they
had names like Carbon Compliance Acquisition Corp. Fourteen, Carbon Compliance
Acquisition Corp thirty, NAT Source Acquisition Corp ninety nine, NAT
(44:23):
Source Carbon Acquisition Corp twenty two. There was even Carbon
Compliance Acquisition Corp sixty So I only counted twenty, but
the nomenclature suggests there could be as many as sixty
of these, So maybe somebody can enlighten me. What legal
reason would somebody have for setting up twenty at least
(44:46):
possibly sixty shell companies in the Cayman Islands a notorious
tax haven other than either transfer mispricing i e. Tax
evasion or more center money laundering, because another thing that
Interpol Interpol warned is that criminals could use carbon credits
(45:08):
as a way to purchase carbon credits or fund projects
in countries that don't ask questions, and then that money
could generate carbon credits which could be sold into the
traditional finance system as a way of washing the money.
And of course to do that you would need a
network of shell companies. Well, NAT Source Energy which was
run by the founders of Core We've had a network
(45:29):
of shell companies. And also keep in mind the business
that that got into after they left nat Source. All
these guys they got into crypto mining. And what is
one common denominator between carbon credits and crypto mining. Those
two things have nothing in common except money laundering. Both
are used for money laundering. They're actually the two best
(45:52):
ways to clean dirty money. I'm not saying that is
what Core Weave did, but they have a proximity to it,
that's for sure. They have a very close proximity through
their shell companies in the Cayman Islands, the trading in
the carbon markets, and the crypto mining. All right, those
are an awful lot of coincidences right there. That's an
awful lot of smoke. I do not have definitive proof
(46:14):
that they were engaged in these activities, but I do
have definitive proof through the International Consortium of Investigative Journalists
who published the Paradise Papers, that they did have that
network of shell companies, and they did specifically ask for
all the things that enabled these crimes. They ask Congress
for it. The footage is in my video. So now
(46:36):
let's loop this whole thing together. Magnetar Capital, who engineered
the sabotaging of CEOs, dumped them onto retail investors while
betting against them. Magnetar Capital inexplicably giving tens of millions,
then hundreds of millions, then billions of dollars to core Weaf,
people who formerly used to mine crypto and before that
(46:58):
they used to trade carbon credits through shell companies in
the Cayman Islands. And then core Weave turns around and
gives all that money to Nvidia, a company with a
history of cooking their books to drive artificial growth narratives.
You take all three of these stories and aggregate these
three main players in this all three of them have
(47:19):
at best a checkered past. And now I'm starting to
get a picture here. It really looks like retail traders
are being used as exit liquidity for these guys to
get out. And that's exactly what the trading pattern after
that magnificent quarter that Nvidia just posted looked like retail
piled in and big money sold.
Speaker 1 (47:42):
M Well, I mean that's a perfect stubble. But the number, yes,
number one, I can't even imagine the amount of work
that you've had to put in to number one just
find to all of this information, and then number two
(48:03):
figure out how it weaves together. And for those listening,
you just had a big facial expression. Sounds like there's shill,
looks like there's something else you need to say. Ten minutes, brother,
here this is the shocker. It took me longer to
put it together, all right, putting it together and painting
the picture.
Speaker 2 (48:20):
That took a while. And it takes a long time
to tell the story because there's it's a very hard
story to tell. And look, I got a little goofy
in my Part three video. I use C and C
Music Factory to try to tell the story because I
knew when I had to put C span two footage
from a decade ago in the video, I'm like, how
am I going to keep people with modern attention spans
engaged in this video? I know things that make you
(48:42):
go hmm, and which also means I had to demonetize
the video. I felt it was that important. I worked
all through Labor Day weekend. God bless Gigi, my wife.
It was our anniversary and I spent the whole weekend,
all three days, just buried in this putting this video together.
But Joe finding the stuff, I gotta tell you, brother,
ten minutes. It took me ten minutes to go to
(49:06):
the core Weave website and find the names of the guys,
and then with the names of the guys, go to
their LinkedIn pages find their common history, the Hudson Ridge
and the NAT Source company. And once I had NAT
Source and I started looking into them, then I found
the Carbon Compliance Acquisition Corps Shell Companies. I mean that
took ten minutes of Google to find this information, and
(49:30):
then it took a few days to stew and marinate
on it and build the picture. But Joe, this tells
me the ease with which I found this me nobody special, right,
I'm just I'm a former engineer who has a home
office YouTube operation. I put this together in a couple
of minutes of Google and then a few hours of
thinking about it. And the real shocker here is this
(49:51):
tells me I am the only one in the world
who bothered to look, because anybody else with half a
brain who looked would have found what I found.
Speaker 1 (50:02):
Well, nobody looked in You're not. You're not getting this
from inside information.
Speaker 2 (50:06):
You publicly available information, publicly information. It's it's.
Speaker 1 (50:14):
It reminds me of going back to the movie that
we've talked about a few times in the Big Short,
when Michael Burry's saying that that it's it's it's going
to crash, They're going to default.
Speaker 2 (50:25):
They're like, how do you know?
Speaker 1 (50:25):
He's like, I read it, like I just I looked
and read it all and everybody's everybody's delinquent and not
making their payments. What do you mean I just looked.
I looked at all of them. They're not they're not
making their payments.
Speaker 2 (50:40):
But you know, Joe, let me give you a word
of caution about that, because Burry was magnificent and he
was right, but he was early. Yeah, all right, And
you know I mentioned I have no position in in video,
and I commend you, brother for being short in video,
because that's you're braver.
Speaker 1 (50:55):
Man than me.
Speaker 2 (50:55):
That's and I'm a firefighter doing that. I'll run into
a burning building. I'm not short in that's stock standing.
You know. That's like standing in front of a freight
train and betting your life. It's going to stop. The
laws of physics are on your side. Eventually you're going
to be right, but you might be a pancake by then.
So Bury was early, and he almost didn't make it.
You know, he was way down. He was getting sued
(51:16):
by his investors because he underestimated just how much corruption
there was, just how how bad they with a capital T.
I always use air quotes. They all right, because they
will use the public for exit liquidity. They need time
to dump this stuff on our pensions. They need time
(51:36):
to dump this stuff into mutual funds four to one case.
They need time to get their money out. And the
AI Bubble, which appears to be a narrative concocted by
these sleezebags at Magnetar And I'm not saying the technology
isn't great. The technology is amazing, but the business practice,
the growth, the numbers behind it are all engineered, engineered
(51:57):
by people with a very shady past. And I just
need people to hear this story. I need to get
this story out there. People need to be warned. And
that's why with Part three, I got a little nutty
and a little loopy with the song because I needed
a way to keep non finance people engaged, and I
had to demonetize the video to put the song in there.
(52:18):
I felt that strongly about it. And the song is perfect,
by the way, because the song is by C and
C Music Factory, which is a fake band. They stole
Martha WASH's voice and dubbed it over a dancing model
to make her look like an artist. So you know
in the video there's people are dancing and they're having
a good time. But the joke is even the song
is fake. There's just so much corruption and greed and
(52:41):
fraud and it's everywhere and people need to know about it.
I got to get the message out because it's going
to get worse if people don't hear about it quick well.
Speaker 1 (52:50):
I think it's very important as well, and the implications
are beyond justin video like we talked about earlier. Since
the whole market is writing on this AI craze and
the growth story here and without it, and without that
little bump that in Vidia's crazy growth has given the
(53:11):
overall market a little bump, you can imagine how ugly
things could get real quick. And I do want to
make a note, just because you brought it up, I
don't do this myself, and I would never recommend to
anybody ever participating in naked shorting anything, making any investment
choice or trading in any way that opens you up
(53:33):
to unlimited risk, especially for a limited potential gain.
Speaker 2 (53:39):
Is literally the.
Speaker 1 (53:42):
Last thing that anybody wants to do investing. And so
the way I just want to be very clear, the
way that if I ever enter into shorts, like I said,
I have a short position on Nvidia and the S
and P five hundred is through the use of options,
and that way I can make sure that I'm taking
on a very limited amount of risk so that if
I'm wrong, I lose a small amount of money, and
if I'm right, then I, you know, win big it's
(54:03):
an asymmetric rist to the upside for me, even though
it's technically a short on the on the market. So
anybody's interested in how I do that Heresy Financial University,
I teach advanced hedging techniques like that. But thank you
so much, Jack for coming on and explaining all this.
You've put together some really in depth stuff on this.
(54:23):
Everybody's been having you talk about this. I imagine more
and more is going to come out as people start
contacting you and saying, hey, I have more information. So
I encourage everybody to go subscribe to your YouTube channel
and I will link that in the show notes. And
it's Nobody's special finance.
Speaker 2 (54:43):
Yes, nobody Special Finance. That's me and Joe. If I could,
I'm going to give you a partial credit for this
one because you are one of the reasons I started
a YouTube channel. I just want you to know that
I don't have a finance background. I knew after Repo
Madness in twenty seventeen that something was up. It was
it twenty seventeen or twenty eighteen, No, twenty nineteen, sorry,
(55:05):
September of twenty nineteen. I knew something was up with
repomannas I didn't know what I didn't know enough, and
I went digging and I came across your YouTube channel,
and that's why I discovered Heresy Financial right around Repomannas,
and you did a fantastic explanation of what was going
on and a very large part of this trip that
I've taken over the last few years that saw me
walk away from a very lucrative career in nuclear power
(55:25):
and into a very non lucrative career in youtubing. But
you were a big influence in that and your channel,
and I really admire what you do here and I
would not have been in a position to go do
this digging and find this if it wasn't for your influence.
So I'm going to share the credit with this one
with you. So thank you for that.
Speaker 1 (55:45):
Well, thank you. That means a lot to me, and
I'm glad that you are doing what you're doing. I
think what you're doing is good for the world. Everybody
needs to needs to hear it, and so I keep
on going and I'm really really excited to say, see
how this whole thing unfolds, and I know you'll be
leading to charge.
Speaker 2 (56:03):
With the story. You and me both brother yep. And guys,
if you hear this, share this, get this out there
because the press will not cover it. I have sent
this to journalists. I see people are tagging journalists left
and right on Twitter. This got one. This series got
one point three million views on Twitter, oddly enough, and
(56:24):
only got about thirty thousand views on YouTube, even though
my YouTube following is twice as big as my Twitter following.
I'm not saying that google Stock would sink along with
it in video if the AI mania were to fade,
but things that make you go. But it did really
well on Twitter, and I know people in the financial
press have noticed. Nobody has talked about it, yet nobody
(56:46):
wants to cover it. And remember that was another feature
in that movie we talked about. The press was more
worried about losing access that they didn't want to cover
it until it was too late.
Speaker 1 (56:56):
Well, we are the new press, so.
Speaker 2 (56:59):
I started.
Speaker 1 (56:59):
I've I've been seeing this start to trend, and I
think that this is the proper way today today's day
and age, to get the word out about things.
Speaker 2 (57:06):
So keep it up.
Speaker 1 (57:07):
I appreciate what you're doing. And then again, anybody, I
highly recommend going in following nobody Special Finance on YouTube,
so thanks so much. We'll talk again soon.
Speaker 2 (57:19):
Thanks Joe,
What's up, everybody. My name is Joe Brown. This is
financial heresy where we talk about how money works so
that you can make more, keep more, and give more.
Today I've got my good friend Jack Nobody Special Finance
on the channel where you've got a bombshell report for you.
Nvidia has been in the news a lot recently, mainly
because its stock price has been going through the roof
(00:22):
reaching new levels and then going through those roofs as well,
just skyrocketing. And Jack did some research and found out
that might not all be above board and started doing
some digging figuring out where these orders are coming from
and the companies involved in these very suspicious numbers of orders,
(00:46):
and what these companies have done in the past, and
found out some if it proves to be true, some
very crazy things, some very shady things happening behind the
scenes potentially here. And so really excited to have have
Jack on the show today for you, and you can
be the judge. After listening to all of the evidence.
(01:08):
You know, there's not necessarily a fire, but there is
a lot of smoke, and so we're going to go
through a lot of that. So really excited for this
one for you today. Report on what's going on behind
the scenes at Invidia. All right, Well, thank you so
much Jack for joining me today here. I am really
excited to get into this. Like we said earlier, unweaving
(01:30):
the story of Core, we've here, So let's start with
what's going on right now within Nvidia.
Speaker 2 (01:39):
All right. So, unless you've been under a rock, you've
probably heard AI mentioned a few times in the last
few months, right and in Vidia is at the epicenter
of the AI mania, and Vidia is AI mania. Let's
just call it what it is. Most of the games
in the S and P five hundred have been from
the magnificent seven big tech stocks, and then VideA has
(02:00):
been the leader of that pack. Without Nvidia, the AI
rally would not have been and we'd be looking at
an S and P that was maybe up one or
two percent this year, maybe even down. So in Vidia
is driving the growth narrative of the entire stock market
right now. And within Nvidia, we're all familiar and VideA
(02:23):
just posted a fantastic quarter. I remember being blown away
by the numbers, just amazing growth. Their growth had already
been amazing, and I remember hearing their projections a quarter
ago and being doubtful of the numbers they were given,
and then they came in and they blew away even
those numbers. So just phenomenal quarter. And then the stock
(02:44):
reacted kind of strangely. The stock shot up eleven percent
after hours after the earnings, and then the rally faded
pretty much from the opening bill. We saw some selling
of the news and the only takeaway from that was
that retail piled in at the numbers and the big
money faded the rally, and so that made me very suspicious.
(03:08):
And then I caught wind of a tweet from Samantha
La Duke, who is the founder and chief investment officer
of LaDuke Trading. She posted a Twitter thread describing how
most of this magnificent performance of in Vidia's quarter was
driven by one of their customers, a company I had
never heard of called core Weave, and in particular, core
(03:30):
Weave had just placed a massive order for these new
h one hundred GPUs in videos amazing technology, and it
is amazing technology, you know, through this whole narrative here,
don't mistake this for me doubting in videas tech. The
tech is amazing, that doesn't mean the business practices are though,
and this company, core Weave was really the big driver.
(03:54):
They had just taken out a two point three billion
dollar line of credit, and they took that two point
three billion dollar line of credit and they bought two
point three billion dollars worth of Nvidia GPUs And coincidentally,
that two point three billion dollars was the exact number
of the beat in data centers for Nvidia. So really
(04:14):
all of Nvidia's growth was from this one company, core Weef.
And that's when I started to go down this rabbit
hole of the company, the people behind the company, the
other companies involved, where their money was coming from, some
of Nvidia's history, and every time I turned on turned
over a rock, there was just more rot and more
(04:37):
stink and more cockroaches scurrying, and it really this rabbit
hole goes deep. Joe, I am going to try to
be as efficient with my words as possible here, because
this story does go deep. But I promise you there
is so much here you're going to want to hear
every word of this.
Speaker 1 (04:51):
All right, Well, I'm excited for anybody who's been following
this podcast and my YouTube channel for a while knows,
and but I do need to make the disclosure right
here that as of the time of this recording I
do have a a short position on both the S
and P five hundred and in video and so uh
(05:14):
and so take take that uh uh for what it's worth.
And so I personally am very excited to dive into
this because I started seeing you talk about about this,
like as you mentioned once, you started kind of turning
over the rocks and discovering things.
Speaker 2 (05:33):
So I was just like, you know.
Speaker 1 (05:34):
What, we've gotta We've got to have you on the
show to hammer this out. So let's let's start at
Let's start at the beginning chronologically with uh, just in
video the history of how they've you know, maybe fudge
the numbers a little bit here and there, just so
(05:54):
we can see how far back some of this, uh
these practices go to boost their their stock price.
Speaker 2 (06:02):
So right now I'm actually looking at a press release
from the SEC dated May six, twenty twenty two. The
SEC charges in Vidia Corporation with inadequate disclosures about the
impact of crypto mining. It turns out, in twenty eighteen,
during the last crypto bubble, Jensen Huang, the CEO of Nvidia,
(06:26):
withheld vital information about how much of Nvidia's business was
dependent on crypto mining. Right, these Nvidia GPUs were selling
like crazy, and all of those earnings were being reported
in their gaming business on all their quarterly and their
annual reports, and these numbers were fantastic in Nvidia was
a big growth story in twenty eighteen, and Jensen Wang
(06:49):
was fined by the SEC because he withheld information that
most of those Nvidia GPUs were being sold to crypto miners,
and that was vital information for his investors because, as
you know, in twenty eighteen, crypto didn't do so well.
That was the end of the prior having cycle, and Bitcoin,
(07:09):
along with all the other cryptos, started to crash and
with it crashed invidious earnings, and Jensen Wong withheld information
from his investors about how dependent on crypto minors his
business was, and his investors paid the price for that.
So the SEC, in typical SEC fashion, Jensen Wong wrote
him a check five and a half million dollars and
(07:31):
they settled without any admission of wrongdoing, and so we
basically got away with it. This was that was the
first one. What was the date on that, This was
May sixth of twenty twenty two. Last year it was.
It was based on events that took place in twenty eighteen, okay, and.
Speaker 1 (07:55):
In twenty eighteen, for those of you who are not
looking at a chart. In October of twenty eighteen, the
stock price in Video stock price peaked out at just
about seventy three dollars per share. That was in October.
By the end of the year it had crashed all
the way to like thirty one thirty two dollars per share,
(08:15):
so fifty percent just about decline in the stock price
as a result of that. So, as you said, investors
paid the price. This wasn't the first time, though, that
they had done something like this under his leadership.
Speaker 2 (08:33):
That's correct. It turns out I found another SEC filing
and somebody responded to I can't remember the individual on Twitter.
I'd give them credit, but somebody sent this to me
just today in response to one of my Twitter videos
about Core. We've that all the way back in two thousand,
which I didn't even know when Video's history goes back
(08:53):
that far. Nobody had ever heard of them. In two thousand,
the cfo's name was Christine Hoberg, and I'm looking here
at a SEC filing that's dated September eleventh, two thousand
and three, and they are accusing the CFO of in Nvidia,
which at the time was still you know, Jensen Wong founded.
(09:15):
He's been the CEO the whole time. So this was
on Jensen Wang's watch that she made materially false statements
in in Vidia's quarterly earnings, that in particular, she purposely
failed to record three point three million dollars in expenses
related to a deal with suppliers. And what happened was
(09:36):
Christine Hoberg, then CFO of Nvidia, cut this deal with
one of her suppliers where they would undercharge in Vidia
for some of their product, and then they cut a
separate deal in a second document that said the vendor
would recoup that investment by overcharging in a following quarter.
And this resulted in a fifteen percent is actually fifteen
(09:59):
points three percent overstatement of Nvidia's earnings on that quarterly report.
And she furthermore, she withheld the second document that said
the vendor is going to overcharge us next quarter to
recover their investment. She purposely created two different documents, two
different agreements, and withheld the agreement about overpaying later from
(10:20):
their independent auditors, because obviously their independent order would have
flagged that and said you can't do that, that's illegal.
So she hid that document from them and once again
settled with the SEC admitting no wrongdoing. But she paid
six hundred and seventy one thousand dollars. That's a pretty
expensive not wrongdoing admission there. And what we have here
(10:43):
is two examples of Nvidia either withholding vital information, if
not outright making materially false statements to their investors for
the sake of maintaining a growth narrative in their quarterly
earnings report. And this is not a theory. These are
doctors documented. You know, I just sent you the links.
Anybody can go check these. They're out there. So that's
(11:06):
in Vidia's history, not a squeaky clean company. And you know,
I've heard the criticism that Jensen Huang run he runs
his company like a hedge fund. So there's a pretty
good example of Nvidia doing some unclean practices when it
comes to their books.
Speaker 1 (11:22):
Now, so we've got two examples historically a little bit
spread apart, but still under the same leadership. As far
as employee compensation goes, I know that it's extremely important
that their stock price continues to grow because the way
that their stock options work, they do have the capability
to basically backdate the cost, so they can they can
(11:49):
increase their compensation if the stock price continues to climb.
And so it's a kind of a system wide incentive
to have that stock price continue to go up based
on internal compensation and how their stock options are are
set up. What's going on right now, So so you
(12:11):
alluded to it at the beginning. Let's get into a
little bit just the Nvidia side. First they beat. It's
keeping the market up what the stock price did, and
then we'll get into the other companies.
Speaker 2 (12:24):
So you have to understand in Video's share right now,
the stock is being driven by the growth. It's not
being driven by how awesome the tech is. All right,
And that's the biggest criticism I've seen of my work
recently is people saying you just don't get the science. Okay, Boomer,
I'm not arguing that the chips aren't awesome. I produce
my videos on an in videographics card. Okay, the tech
(12:44):
is awesome. It's the business, it's the growth narrative and
in videos trading it's something like thirty eight times sales
right now. Obscene, guys, this is quadruple the peak of
the dot com bubble. Right. You know that famous quote
from the Sun Microsystems CEO, what were you thinking when
you gave me a ten time sales valuation? And he
(13:06):
goes on, you know, I could go ten years without
paying any expenses, any taxes, any anything, and I still
it would take me ten years to pay you back
at that rate. What were you thinking? Nvidia is almost forty,
So if ten was crazy, forty is obscene. Now that
also means that in Nvidia needs to maintain this growth
story at all costs. The second the growth even slows
(13:26):
a little bit, this thing is coming back down to
earth in a big way, and it's bringing the whole
market with it. And what I see in this most
recent quarter is a last minute edition of two point
three billion dollars of money from this company core weave
that nobody has ever heard of, that the source of
(13:47):
that money is highly suspicious, and the people behind this
company are highly suspicious. And these two this company and
the people giving them the money, are propping up the
stock value of a company that has a history of
making false statements and doing some shady deals to inflate
their stock price, and considering what's riding on this, I
decided to start looking at it.
Speaker 1 (14:08):
Yeah, so it's worth mentioning as well because we'll hit
on this later that basically the valuation of the major
indexes is being held up almost purely by and video
right now. Without that, you would not have indexes where
(14:28):
they're at.
Speaker 2 (14:29):
Yeah, you know, my background is nuclear power. I spent
fifteen years working at commercial nuclear power plants. I should
just close that I'm not a finance guy by pedigree,
but when I used to work in nuclear power, we
were always on the lookout for what was referred to
as a single point vulnerability. Right. Nuclear power uses defense
(14:49):
in depths. We have multiple barriers to protect the public
from radioactive materials, multiple fail safes, fail safes for the
fail safes, fail safes for them, and we're always on
the lookout for a single point vault moerability. Is there
one component that could break and you lose your backup
and your backup and your backup and your backup. So
we're taught to seek those out and limit them, eliminate them.
(15:10):
And right now, in Vidia is a single point vulnerability
for the whole market. Right, it is one company that
any flaw in the Nvidia narrative, the whole market comes
down with it. And I found a lot of flaws
in the Nvidia narrative, and the press is not covering it.
The press is writing puff pieces about this core Weave company.
And the time to ask questions is when the number
(15:30):
is going up, not after the number has gone down.
And everybody's saying, how could this happen? And so I
want to just zero in on that two point three
billion dollar line of credit that drove these Nvidia earnings,
because it was this company, Core Weave, that got this
two point three billion dollar line of credit credit. First
of all, that is the entire market cap at the
time of Core Weave. So somebody loaned them their entire valuation.
Speaker 1 (15:57):
Are these public company? No, okay, it was loaned to
them by.
Speaker 2 (16:04):
Magnetar Capital was the leader of this round, but also
Blackstone was played a major role in that. Blackstone has
a ownership stake in Magnetar Capital. Other players included black Rock, Carlisle, Pimco.
There was a couple other smaller players in there, but
the big dogs of Wall Street all got together and
loan Core. We have two point three billion dollars and
Core We've turned around and gave that money right to Nvidia,
(16:26):
and that resulted in that big earnings beat. And the
connection that Samantha LaDuke made is, Hey, all these people
who are giving this money to Core Weave for the
purpose of driving in Nvidia sales higher, they're all major
stakeholders in Nvidia. So take that eleven percent rally in
Nvidia's share price after hours, these companies made that two
(16:47):
point three billion dollars back. If they sell, if they
sold a small portion of their position after hours or
at opening bell the next day, which you know that
rally after earnings faded that day, then they could have
recovered that the whole two point three billion dollar investment
and then some just by selling that rally after the
earnings were announced. And there was more smelly things about
(17:10):
that two point three billion line of credit, like the
fact that it was collateralized by the very chips that
they bought with it.
Speaker 1 (17:17):
So magnatarin Code, we gotta pause there because I'm gonna
need I'm gonna need to focus on that. So just
to make sure that I have I have this story
straight so far, in Vidia flies up after hours because
they report a beat the amount that they beat by
two point three billion dollars. Turns out that was all
(17:39):
a purchase order from one company, Core Weave, who will
get into But nobody's ever heard of these guys before.
Suddenly they have two point three billion dollars to make
a big purchase from Nvidia. Where did they get that money? Well,
it wasn't from earnings, it wasn't from revenue. It was
a pile of loans. And these loans came from companies
(18:04):
like Magnetar, Blackstone, black Rock, Pimco, and these guys, especially Magnetar,
are major shareholders of Nvidia.
Speaker 2 (18:16):
I don't know if Magnetar is a major shareholder of Invidio.
I don't know that the rest of them are. Okay,
the rest of them are. Yeah.
Speaker 1 (18:22):
Of that two point three billion dollar loan, that that
line of credit, how much of that came from Magnetar.
Speaker 2 (18:31):
They didn't break out that specifics of it. Okay, it
was led by Magnetar, And I can't give you Magnetar
until recently, right until recently, it was almost all Magnetar. Yes,
And I can take it through the timeline of core
Weave's capital raise if you want.
Speaker 1 (18:49):
I think we should get into that in a minute.
Speaker 2 (18:50):
So all right.
Speaker 1 (18:51):
So, so basically in Video is flying up because they
get a bunch of purchase orders, but it's coming from
money that was loaned through, you know, from people who
were invested in the company, meaning that they they could
just sell and Video shares after hours to pay for
(19:11):
the cost of that of that loan. Okay, if allegedly,
if you know, because obviously we don't know, we can't
see who was selling those shares. From a technical perspective,
it does look like, uh, the market didn't believe the
rally that big money sold. As soon as it pops,
it has retested to try and get back above it
failed again. So it looks like the big big money
(19:34):
doesn't doesn't believe this thing has what it takes to
to keep on going.
Speaker 2 (19:38):
It looks like retail bought the earnings and big money
sold it. Yep, Okay, keep that in mind.
Speaker 1 (19:44):
Okay, So before I cut you off, you were just
about to start talking about Shoot, I thought I wrote
it down you You were about to head into the collateral.
The collateral, right, Okay, So what do you mean by that?
The chips are the collateral for the loan.
Speaker 2 (20:06):
Yes, the loan was made to core Weave by Magnetar
and Blackstone and black Rock and the other guys. The
loan was made to core Weave. It was collateralized by
the chips that they bought with that loan, Right, I
guess it's not heard of. Your mortgage is the same way. Right,
you take out a loan, you buy a house, The
(20:26):
loan is collateralized by the house that you're buying. Although
you know, you usually put money down, you have to
buy insurance on it and all kinds of things. In
this case, though, they lent core Weave the entire valuation
of their company two point three billion dollars, and then
they collateralized it with these circuit boards, these GPUs that
they're buying. Now, think about the upgrade cycle of computer technology.
(20:51):
Circuit boards do not hold their value. So that's fishy
to say the least, that they would collateralize a two
point three billion dollar line of credit with the circuit
boards that they were buying something that what do they
have maybe a year to make that money back, maybe
two tops before These are near worthless assets. So right
(21:13):
away this thing doesn't smell right. The circular accounting. You've
got major shareholders loaning money to a company for the
purpose of them turning around and buying product from a
company that you know, the loaner owns shares of the
company collateralized by the chips that they're buying. This is
circular accounting, is what it looks like.
Speaker 1 (21:34):
So if if for some reason they are forced to,
you know, try and liquidate the collateral to get paid
back for the loan, if it takes longer than a
year or two, the collateral is worthless.
Speaker 2 (21:51):
So that's what I'll say. It's worthless. Maybe it's not worthless,
but this stuff is going to bleed value pretty quick. Sure, Okay,
all right, So who is who is Core Weave? What
are they doing with these chips? And where did they
come from? What have they been what have they been
(22:13):
doing this whole time? So Core Weave their business model.
They don't own any technology, they don't own any intellectual property.
There's nothing unique about their business model. They buy chips
from Nvidia and then they build data centers warehouse full
of these GPUs and their plan is to rent out
the computing power to provide. They look at it as
(22:37):
like the plumbing, the electricity, the grid. For artificial intelligence,
all these AI companies are going to have to rent
the computing power from core Weave, so that business model
resembles a real estate investment trust more than anything. Right,
they don't have any IP, there's nothing special about them.
The only thing special about core Weave is that Magnetar
(22:58):
will give them money and Nvidia will let them buy
their chips. Right, Microsoft would buy in Vidious chips, anybody
would buy in Vidious chips. But for whatever reason, whatever
reason in Video will sell them to core Weave mostly.
Speaker 1 (23:09):
So why when you say that, is that the just
they can only produce a certain amount and they're selling
them to core Weave, or.
Speaker 2 (23:16):
Is like yes, yeah, I mean the line to get
their hands on these chips is around the corner. Everybody
wants them, right, And that's one of the big criticisms
of my work, is that everybody wants them. And you
know my answer to that is, then why sell them
to these guys who are having to borrow their own
(23:36):
market cap collateralized by their own chips? Why are you
selling to these guys and not anybody else?
Speaker 1 (23:42):
So and so that that may not even be because
they're doing anything shady with them, it's just because where
that that uh, it circulates back to back to their
share price, which is always their ultimate goal.
Speaker 2 (23:57):
And it's also worth pointing out that in Video owns
a small state in core Weave. I don't know how much,
but Nvidia is a partial shareholder in core weaf.
Speaker 1 (24:07):
Okay, now you you mentioned earlier their total valuation was
two point three billion dollars, which is odd because that's
the same size a line of credit.
Speaker 2 (24:17):
Joe. That's that's month ago news. They're trying to sell
a stake. Core Weave is now asking for an eight
billion dollar valuation a month later, so and again reads
don't do that. There's nothing special about their business model.
So yeah, now they're asking for an eight billion dollar valuation.
They just that article hit the tape a few days ago.
But finish your thoughts. Sorry.
Speaker 1 (24:39):
So, up until recently, the main investor who's been plowing
money into core Weave has been Magnetar.
Speaker 2 (24:47):
Yes, and just to give you an idea of this,
core Weave has not always been core Weave. They were
founded in let me get the date right here. They
were founded September twenty first of twenty seventeen by these
three guys, Michael and Trader, Brandon McBee and Brian Venturo,
all right, and there was this a fourth player who
(25:08):
you'll hear about later, a guy by the name of
Jack Cogan. He's one of the board of directors. So
they were founded in September of twenty seventeen. They were
in athereum mining operation that that was what they did,
and they did that for a few years, and then
you know, they raised one point two million dollars in
twenty nineteen trying to do a cap raise. There. Good
(25:30):
for them. Something weird happened on October twenty eighth of
twenty twenty one. That's when Atlantic Cryptocorp filed the trademark
for the word core weave. And the date is important here,
October twenty eighth of twenty twenty one, because just two
weeks later, on November tenth of twenty twenty one, Magnetar
(25:51):
Capital gives them fifty million dollars. Took a fifty million
dollar stake in this outfit that two weeks ago was
just a theory minors. And then a year goes by
in November of twenty twenty two, November thirtieth, Chat GPT
is announced in AI Mania begins, all right, that's when
(26:11):
everything changed. A week after chat GPT gets announced on
December sixth of twenty twenty two, Magnetar gives core Weave
another one hundred million dollars. Four months later, April twentieth,
twenty twenty three, core Weave raises another two hundred and
twenty one million dollars one hundred and eleven million from Magnetar,
(26:34):
and the rest is split between Nvidia themselves along with
former Getthub CEO Nat Friedman and a former Apple exec
named Daniel Gross. But again Magnetar is the big player here.
Hundreds of millions coming in from Magnetar. Now we've got
in Vidia themselves taking a stake in one of their
customers a couple other guys. A month later, May thirty first,
(26:56):
core Weave gets another two hundred million, all from Magnetar.
And then on August third, was that fateful two point
three billion dollar line of credit, again led by Magnetar.
I don't know how much of that was Magnetar, just
that it was led by Magnetar. But for whatever reason,
Magnetar Capital keeps pumping tens of millions, hundreds of millions,
(27:16):
eventually billions of dollars into this company, core Weef, that
owns no intellectual property. They're just They're basically a rate.
So you know, I was sitting here putting together these videos,
and I'm saying, what is so special about core Weef?
What do they have? They have two things? And video
will let them buy chips because everybody wants some video chips.
(27:39):
But for whatever reason, core Weave gets them, and Magnetar
will give them money to buy those chips with. So
I go down the rabbit hole of who is Magnetar
because that seems like, now I'm why are they giving
these guys the money? Yeah, And when I learned about Magnetar,
oh boy, it's called the Magnetar trade. And that is
(28:03):
not a good thing. That's like having a disease named
after yourself, right, you don't want to be you don't
want there to be Joe Brown syndrome. You don't want
to be remembered for the first guy dying from some
paradise parasite, or you know, it's not a good thing.
The Magnetar trade has made famous because these guys are
the sleaziest, slimiest, most despicable people in all of Wall Street,
(28:25):
and I want to recall I'm assuming most of your
viewers have probably seen The Big Short. There's a memorable
scene in The Big Short where Steve Carell's character Mark Baum,
who's based on Steve Weisman in real life, He's having
dinner with this Asian gentleman, a CDO manager, and you know,
all of his buddies are in the corner watching and
(28:45):
they're like, oh my god, his head's going to explode,
and they're like, no, he's too, he's fascinated. He's going
to keep going. And by the end of the scene,
Steve Carell's hair is all messed up. He can't believe
what an unbelievable schmuck this guy is that he's talking
about this CDO manager. And this CDO manager was based
on a real life character by the name of wing
F Chow, and wing F Chow he worked for his
(29:09):
own company, but his job he assembled CDOs, collateralized debt obligations.
They do a pretty good job in the movie with
Chef Bourdain describing what a CDO is when he takes
the three day old fish at the restaurant and he
says it was yesterday's fish and you know, now, this
fish is not fresh anymore. So I'm going to cut
(29:30):
it into pieces and put it into a pot, and
I'm going to call it seafood bisk Right, it's all
the leftover mortgage bonds that nobody wants to buy. They're
all triple B rated crap, risky like people aren't lousy
Fico scores, ninja loans, no income, no jobs, no assets.
They put these all into a bucket. They call it
a CDO and they say it's a safe investment. So
(29:53):
Wing Chow was assembling these CDOs. What's that Because there's
a lot of them. Now it's safe, a whole lot
of yeah. Yeah. And this is at the height. This
is right before the GFC, So there's a lot of
this crap. So the banks. By now, the banks realize
what's going on. They need this stuff off their books,
and so they hire Wing Chow to sell these CDOs.
(30:16):
And what was going on was Magnetar Capital was helping
Wing Chow assemble these CDOs and they were urging Wing
Chow to put the riskiest possible mortgage bonds into these CDOs.
They wanted them to fail. They made sure these things
were the most high risk toxic sludge assets and all
(30:37):
the banks ballad sheets, and then they were sold to
unsuspecting investors while Magnetar was buying credit to fault swaps
on them, which means Magnetar was betting against them. So
they sabotaged investments, sold them to unsuspecting retail traders, and
made a fortune betting against them when they failed. Innocent
people lost billions. Magnetar made hundreds of millions. That's the
(31:02):
people who are funneling money into core Weave right now,
so core Weave can take that money and buy Nvidia chips.
So I ask you, if you're one of the guys
holding in a call option in video right now or
a share congratulations, you're up this year, You're up more
than me. Good job. I have no position in in video,
by the way, but these numbers are being driven almost
(31:28):
solely by a company with a history of creating sabotaged
investments and convincing retail to buy them so that they
can bet against them. That's the people that's the money
behind core Weave. Who is the money behind Nvidia's earnings beat?
So that's that's scary, especially considering how much is riding
(31:52):
on in video right now, the whole market, and in Nvidia,
is riding on core weave. So the whole market is
riding on core weave, and core weave is being financed
by people who sabotage investments while betting against them for
their own game. That's their history, and.
Speaker 1 (32:08):
It's important, I think, to point out that a few
people got in a little bit of trouble for what
they did during the financial crisis, not these guys. And
to make it, to make it abundantly clear to the
five year olds, you are selling something to somebody that
(32:33):
you know is gonna catch their house on fire, and
at the same time, you're buying fire insurance on that property.
So you're making somebody pay you for something that is
gonna then turn around and make you even more money.
And there's going to be a sucker holding the bag.
And so in this circumstance to kind of weave these
(32:58):
threads together. And we have a company that has a
long history of somewhat shady things to try and boost
their stock price based on for a number of reasons,
maybe it's because of employee compensation, whatever, But we've got
the same leadership at the Helm they've gotten in trouble
(33:19):
for it in the past, and the narrative that's driving
their stock higher is a growth narrative, meaning they're they're
continuing to grow, so people are buying the stock because
they think it's going to be way bigger in the
future because you know, AI is going to take over
everything and they're just growing like crazy. So growth, that
growth narrative is essential to everybody at the HELM right now.
(33:40):
That growth narrative hinges on one order from a company
called core Weave, who is just kind of they're just
they're like a data center basically, and for some reason,
and Video is letting them purchase all their chips. Because
of that, core Weave is exploding in their valuation. But
(34:00):
that explosion in their valuation is being driven by investment
and loans from a company called Magnetar. Magnetar is this
company who has a history of, like we said earlier,
selling people things that are going to catch your house
on fire while simultaneously making large bets that the house
is going to catch on fire so that they can
make a bunch of money on it. And to your
(34:22):
point that you talk, I think we were talking off
air first before we hit record. If you're like, if
you're putting this stuff together, you don't even have to
be shorting in Vidia. Maybe you're unloading shares of Nvidia
if you're overexposed, So you're trying to drive this so
you can get somebody else to buy the shares from
you at a high price. But if this thing goes down,
the whole market is going down really quickly. It's all
(34:44):
it's it's all writing up on in video right now.
So if in Nvidia slows down, stops its growth, everything
else is coming down. So you're using this potentially to
unload your long on the market. You're using this to
short the market. So there's there's no paper trail for
you know, insider trading or manipulating the market here.
Speaker 2 (35:08):
That's right, you can, and Magnetar has done a very
good job of maintaining an arm's length through their sleazy history.
Magnetar was not prosecuted during the fallout from the GFC,
Bank of America Merrill Lynch, who were Bank of America
I think who bought Merrill Lynch. They paid hundreds of
millions of dollars in fines to the SEC because they
(35:30):
withheld information from investors that those CDOs that they sold
to them were assembled by a company that was betting
against them. Don't you think the people who bought those
CDOs would have liked to know that information? That is
exactly what it looks like when emphasize looks like I do,
not having controvertible proof that they're all short these things
(35:52):
right now, right, but it really looks like it. And
look at the share performance of Nvidia after that earnings beat.
Look at that eleven percent after hours pop as retail
piles in, and look at the fade over the rest
of the day, over the following day, the big money
sold that rally. So it really there is a lot
(36:12):
of smoke there. There's a lot of smoke, all right,
And I'm not saying there's fire, but that's a lot
of smoke. Yeah, And there's more smoke coming, Joe, there's
so much more smoke coming. What do you want to
know next? Well, let's uh, well, let me ask you this.
You said there's a lot more smoke coming. What other
(36:38):
smoke is there? Because that's already a lot of smoke.
So we've got this this three way thing going with
magnetar to core weave to win video. We talked about
some of Nvidia's shady history. There run ins with the SEC.
We talked about Magnetars wonderfully unethical, diabolical unloading of CDOs
(37:00):
to the general public, and they got away with it. Amazing.
There's no happy ending in that story. Let's talk about
core weef now, because why core weef. I can't figure
out why will Nvidia sell to core Weave, Why will
Magnetar give core weave the money. There's got to be
something about these guys because they just own warehouses with
room for chips. Anybody can do that. And so I
(37:21):
started looking at these founders, all right, and I want
to zero in on three players here. Two of the
co founders, Michael and Trader, the current CEO, who has
no technical background. That's not a crime, right, I'm here
sitting here talking finance. I don't have a finance background.
I'm a mechanical engineer, all right, but that's not a crime.
Brian Venturo, he's their chief technology officer, again, does not
(37:45):
have a technical background. And one of their board of directors,
Jack Cogan, all right, there's a third founder, Brandon McBee.
He joined the party in twenty seventeen. He also doesn't
have a technical background. He's their chief science officer, but
he doesn't go back as far that I have been
able to find as these other three as Jack Cogan,
Michael and Trader, and Brandon McBee and not Brandon McBee,
(38:07):
Brian Venturo. Those three guys have been together for decades.
They founded a hedge fund together called Hudson Ridge Asset Management.
There is almost no history about what happened on that
hedge fund. I dug into them, I couldn't find anything
about them. I found a picture of a beer with
a reference to fridays at Hudson Ridge Asset Management. I
(38:29):
found an article about a weather intern from Penn State
who spent a summer in turning for Hudson Ridge Asset Management.
But nothing else. And Hudson Ridge did really good for
a year or two, and then they started to underperform
the S and P five hundred. They shut their doors
right around the time Atlantic Cryptocorp was founded. Now, Michael
and Trader, the CEO of Core Weave, Brian Venturo the
(38:52):
CTO of Core Weave, and Jack Cogan all worked together
at Hudson Ridge Asset Management. And even before that, these
three guys all worked together at a company called nat Source,
and that's where the smoke is. That's when when I
saw NAT Source that I found in about the first
ten minutes of this deep dive, and that's when I
knew something was up because NAT Source made their money
(39:15):
in carbon credits, and as soon as I said carbon credits,
all the red flags went up. I knew there was
something going on here because carbonreddits is a hot bread
hotbed of fraudulent activity, money laundering, tax evasion, all of it,
not to mention greenwashing at the expense of poor people.
(39:35):
And Jack Cogan was the former CEO of NAT Source,
Jack Cogan who sits on the board of directors at corwef.
Michael and Trader, the CEO of Corewave, was one of
his portfolio managers, and Brian Venturo, one of the co
founders of core Weave, also worked for Jack Cogan at NATSURCE.
So I went looking into nat Source and they were
(39:58):
leading the charge for cap and trade in the United
States back in two thousand and three. All through the
early two thousands, cap and trade was the big thing.
They were trying to create this mandatory market, and Jack
Cogan in particular, I found old footage of c SPAN
two this is in my part three video I talk
about this. He's asking Congress for flexible compliance frameworks, which
(40:21):
means give me a free for all. He's asking for
a mandatory cap and trade, which means force companies to
buy my product where I have very lax rules governing
my conduct. He said, do not exclude derivatives trading from
the carbon market, so allow me to financialize and do
all the kinds of wonderful engineering, manipulate prices through derivatives.
(40:41):
And he said, allow me to use carbon credits to
fund projects and developing countries in order to maintain cost
and coincidentally, that would also allow them to do business
in countries where they could take advantage of cheap land,
cheap labor. But also there's a lot of very dangerous
people with a lot of money to hide in countries
like at and Interpol warned about everything Jack Hogan was
(41:05):
asking for in a report in twenty thirteen that I
referenced in my part three video. Interpol warns how carbon
credits could be used for tax fraud, they could be
used for securities fraud, that there could be misstatement of
environmental benefits, that there could be transfer miss pricing, which
is where you basically ensure all of your profits are
(41:26):
booked in a tax saving country so that you can
low ball poor people in Africa, collect all your profits
in the Cayman Islands and then sell them into Europe
for no profits. So basically all the money is tax
free because you booked it at your shell company in
at tax saving So everything that Jack Hogan then source
guy who is now on the board of Directors of Corps,
(41:48):
we was asking Congress for Interpol, warned could facilitate financial crimes,
and Gary Gensler, oh, he's in this. Gary Gensler was
the head of the Commodity's Future Commission, the CFTC back then,
and Gary Gensler caught a lot of heat from Congress
because even though cap and trade was never passed, we
do have a voluntary carbon market, and it's not very
(42:11):
voluntary because ESG mandates forced companies to buy these carbon credits.
Otherwise the big fund managers won't buy their stock. So
Gary Gensler was running interference. He was getting a lot
of heat from Congress saying you're allowing these imaginary commodities
carbon credits to be traded willy nilly, and you're guaranteeing
that none of them fall under your jurisdiction. Why are
(42:32):
you doing that? And in one of the articles I
reference in my part three video, Gary Gensler is just
paying lip service to the need for transparency and strict regulations.
But then he's siding with Jack Hogan every time, giving
Jack Hogan exactly what he wants. That's the same Gary
Gensler who's now the head of the SEC who he
did nothing about precious metals manipulation at the CFTC, he
(42:54):
did nothing about dark pools, he did nothing about the
naked short selling of memestock. He met behind closed doors
with Sam bankman Fried. He's now leading the government takeover
of crypto. So Gary Gensler ran regulatory interference for Jack
Cogan back in the early two thousands so that he
could have this free for all in the voluntary carbon markets.
(43:15):
And one of the things I found was that nat
Source had at least twenty shell companies set up in
the Cayman Islands, possibly sixty. And I found that through
something called the Paradise Papers, which if you're listening you
probably heard of the Panama Papers, where all the wealthy
and the elites of the world were hiding their money
in shell companies in tax haven countries. The Paradise Papers
(43:39):
was essentially the same thing. It came out a few
years later. It was over thirteen million documents involving one
hundred and twenty thousand powerful people across the world. Jeffrey Epstein,
who didn't kill himself, was in it. Queen Elizabeth Prince,
Charles Rex Tillison, former Secretary of State, Wilbur Ross, former
Secretary of Commerce. All these guys were implicated in this,
(43:59):
and also implicated in the Paradise Papers were Michael and
Trader and Jack Cogan, the current CEO and director of Corweef.
These guys had at least twenty shell companies set up
in the Cayman Islands that I could find, and they
had names like Carbon Compliance Acquisition Corp. Fourteen, Carbon Compliance
Acquisition Corp thirty, NAT Source Acquisition Corp ninety nine, NAT
(44:23):
Source Carbon Acquisition Corp twenty two. There was even Carbon
Compliance Acquisition Corp sixty So I only counted twenty, but
the nomenclature suggests there could be as many as sixty
of these, So maybe somebody can enlighten me. What legal
reason would somebody have for setting up twenty at least
(44:46):
possibly sixty shell companies in the Cayman Islands a notorious
tax haven other than either transfer mispricing i e. Tax
evasion or more center money laundering, because another thing that
Interpol Interpol warned is that criminals could use carbon credits
(45:08):
as a way to purchase carbon credits or fund projects
in countries that don't ask questions, and then that money
could generate carbon credits which could be sold into the
traditional finance system as a way of washing the money.
And of course to do that you would need a
network of shell companies. Well, NAT Source Energy which was
run by the founders of Core We've had a network
(45:29):
of shell companies. And also keep in mind the business
that that got into after they left nat Source. All
these guys they got into crypto mining. And what is
one common denominator between carbon credits and crypto mining. Those
two things have nothing in common except money laundering. Both
are used for money laundering. They're actually the two best
(45:52):
ways to clean dirty money. I'm not saying that is
what Core Weave did, but they have a proximity to it,
that's for sure. They have a very close proximity through
their shell companies in the Cayman Islands, the trading in
the carbon markets, and the crypto mining. All right, those
are an awful lot of coincidences right there. That's an
awful lot of smoke. I do not have definitive proof
(46:14):
that they were engaged in these activities, but I do
have definitive proof through the International Consortium of Investigative Journalists
who published the Paradise Papers, that they did have that
network of shell companies, and they did specifically ask for
all the things that enabled these crimes. They ask Congress
for it. The footage is in my video. So now
(46:36):
let's loop this whole thing together. Magnetar Capital, who engineered
the sabotaging of CEOs, dumped them onto retail investors while
betting against them. Magnetar Capital inexplicably giving tens of millions,
then hundreds of millions, then billions of dollars to core Weaf,
people who formerly used to mine crypto and before that
(46:58):
they used to trade carbon credits through shell companies in
the Cayman Islands. And then core Weave turns around and
gives all that money to Nvidia, a company with a
history of cooking their books to drive artificial growth narratives.
You take all three of these stories and aggregate these
three main players in this all three of them have
(47:19):
at best a checkered past. And now I'm starting to
get a picture here. It really looks like retail traders
are being used as exit liquidity for these guys to
get out. And that's exactly what the trading pattern after
that magnificent quarter that Nvidia just posted looked like retail
piled in and big money sold.
Speaker 1 (47:42):
M Well, I mean that's a perfect stubble. But the number, yes,
number one, I can't even imagine the amount of work
that you've had to put in to number one just
find to all of this information, and then number two
(48:03):
figure out how it weaves together. And for those listening,
you just had a big facial expression. Sounds like there's shill,
looks like there's something else you need to say. Ten minutes, brother,
here this is the shocker. It took me longer to
put it together, all right, putting it together and painting
the picture.
Speaker 2 (48:20):
That took a while. And it takes a long time
to tell the story because there's it's a very hard
story to tell. And look, I got a little goofy
in my Part three video. I use C and C
Music Factory to try to tell the story because I
knew when I had to put C span two footage
from a decade ago in the video, I'm like, how
am I going to keep people with modern attention spans
engaged in this video? I know things that make you
(48:42):
go hmm, and which also means I had to demonetize
the video. I felt it was that important. I worked
all through Labor Day weekend. God bless Gigi, my wife.
It was our anniversary and I spent the whole weekend,
all three days, just buried in this putting this video together.
But Joe finding the stuff, I gotta tell you, brother,
ten minutes. It took me ten minutes to go to
(49:06):
the core Weave website and find the names of the guys,
and then with the names of the guys, go to
their LinkedIn pages find their common history, the Hudson Ridge
and the NAT Source company. And once I had NAT
Source and I started looking into them, then I found
the Carbon Compliance Acquisition Corps Shell Companies. I mean that
took ten minutes of Google to find this information, and
(49:30):
then it took a few days to stew and marinate
on it and build the picture. But Joe, this tells
me the ease with which I found this me nobody special, right,
I'm just I'm a former engineer who has a home
office YouTube operation. I put this together in a couple
of minutes of Google and then a few hours of
thinking about it. And the real shocker here is this
(49:51):
tells me I am the only one in the world
who bothered to look, because anybody else with half a
brain who looked would have found what I found.
Speaker 1 (50:02):
Well, nobody looked in You're not. You're not getting this
from inside information.
Speaker 2 (50:06):
You publicly available information, publicly information. It's it's.
Speaker 1 (50:14):
It reminds me of going back to the movie that
we've talked about a few times in the Big Short,
when Michael Burry's saying that that it's it's it's going
to crash, They're going to default.
Speaker 2 (50:25):
They're like, how do you know?
Speaker 1 (50:25):
He's like, I read it, like I just I looked
and read it all and everybody's everybody's delinquent and not
making their payments. What do you mean I just looked.
I looked at all of them. They're not they're not
making their payments.
Speaker 2 (50:40):
But you know, Joe, let me give you a word
of caution about that, because Burry was magnificent and he
was right, but he was early. Yeah, all right, And
you know I mentioned I have no position in in video,
and I commend you, brother for being short in video,
because that's you're braver.
Speaker 1 (50:55):
Man than me.
Speaker 2 (50:55):
That's and I'm a firefighter doing that. I'll run into
a burning building. I'm not short in that's stock standing.
You know. That's like standing in front of a freight
train and betting your life. It's going to stop. The
laws of physics are on your side. Eventually you're going
to be right, but you might be a pancake by then.
So Bury was early, and he almost didn't make it.
You know, he was way down. He was getting sued
(51:16):
by his investors because he underestimated just how much corruption
there was, just how how bad they with a capital T.
I always use air quotes. They all right, because they
will use the public for exit liquidity. They need time
to dump this stuff on our pensions. They need time
(51:36):
to dump this stuff into mutual funds four to one case.
They need time to get their money out. And the
AI Bubble, which appears to be a narrative concocted by
these sleezebags at Magnetar And I'm not saying the technology
isn't great. The technology is amazing, but the business practice,
the growth, the numbers behind it are all engineered, engineered
(51:57):
by people with a very shady past. And I just
need people to hear this story. I need to get
this story out there. People need to be warned. And
that's why with Part three, I got a little nutty
and a little loopy with the song because I needed
a way to keep non finance people engaged, and I
had to demonetize the video to put the song in there.
(52:18):
I felt that strongly about it. And the song is perfect,
by the way, because the song is by C and
C Music Factory, which is a fake band. They stole
Martha WASH's voice and dubbed it over a dancing model
to make her look like an artist. So you know
in the video there's people are dancing and they're having
a good time. But the joke is even the song
is fake. There's just so much corruption and greed and
(52:41):
fraud and it's everywhere and people need to know about it.
I got to get the message out because it's going
to get worse if people don't hear about it quick well.
Speaker 1 (52:50):
I think it's very important as well, and the implications
are beyond justin video like we talked about earlier. Since
the whole market is writing on this AI craze and
the growth story here and without it, and without that
little bump that in Vidia's crazy growth has given the
(53:11):
overall market a little bump, you can imagine how ugly
things could get real quick. And I do want to
make a note, just because you brought it up, I
don't do this myself, and I would never recommend to
anybody ever participating in naked shorting anything, making any investment
choice or trading in any way that opens you up
(53:33):
to unlimited risk, especially for a limited potential gain.
Speaker 2 (53:39):
Is literally the.
Speaker 1 (53:42):
Last thing that anybody wants to do investing. And so
the way I just want to be very clear, the
way that if I ever enter into shorts, like I said,
I have a short position on Nvidia and the S
and P five hundred is through the use of options,
and that way I can make sure that I'm taking
on a very limited amount of risk so that if
I'm wrong, I lose a small amount of money, and
if I'm right, then I, you know, win big it's
(54:03):
an asymmetric rist to the upside for me, even though
it's technically a short on the on the market. So
anybody's interested in how I do that Heresy Financial University,
I teach advanced hedging techniques like that. But thank you
so much, Jack for coming on and explaining all this.
You've put together some really in depth stuff on this.
(54:23):
Everybody's been having you talk about this. I imagine more
and more is going to come out as people start
contacting you and saying, hey, I have more information. So
I encourage everybody to go subscribe to your YouTube channel
and I will link that in the show notes. And
it's Nobody's special finance.
Speaker 2 (54:43):
Yes, nobody Special Finance. That's me and Joe. If I could,
I'm going to give you a partial credit for this
one because you are one of the reasons I started
a YouTube channel. I just want you to know that
I don't have a finance background. I knew after Repo
Madness in twenty seventeen that something was up. It was
it twenty seventeen or twenty eighteen, No, twenty nineteen, sorry,
(55:05):
September of twenty nineteen. I knew something was up with
repomannas I didn't know what I didn't know enough, and
I went digging and I came across your YouTube channel,
and that's why I discovered Heresy Financial right around Repomannas,
and you did a fantastic explanation of what was going
on and a very large part of this trip that
I've taken over the last few years that saw me
walk away from a very lucrative career in nuclear power
(55:25):
and into a very non lucrative career in youtubing. But
you were a big influence in that and your channel,
and I really admire what you do here and I
would not have been in a position to go do
this digging and find this if it wasn't for your influence.
So I'm going to share the credit with this one
with you. So thank you for that.
Speaker 1 (55:45):
Well, thank you. That means a lot to me, and
I'm glad that you are doing what you're doing. I
think what you're doing is good for the world. Everybody
needs to needs to hear it, and so I keep
on going and I'm really really excited to say, see
how this whole thing unfolds, and I know you'll be
leading to charge.
Speaker 2 (56:03):
With the story. You and me both brother yep. And guys,
if you hear this, share this, get this out there
because the press will not cover it. I have sent
this to journalists. I see people are tagging journalists left
and right on Twitter. This got one. This series got
one point three million views on Twitter, oddly enough, and
(56:24):
only got about thirty thousand views on YouTube, even though
my YouTube following is twice as big as my Twitter following.
I'm not saying that google Stock would sink along with
it in video if the AI mania were to fade,
but things that make you go. But it did really
well on Twitter, and I know people in the financial
press have noticed. Nobody has talked about it, yet nobody
(56:46):
wants to cover it. And remember that was another feature
in that movie we talked about. The press was more
worried about losing access that they didn't want to cover
it until it was too late.
Speaker 1 (56:56):
Well, we are the new press, so.
Speaker 2 (56:59):
I started.
Speaker 1 (56:59):
I've I've been seeing this start to trend, and I
think that this is the proper way today today's day
and age, to get the word out about things.
Speaker 2 (57:06):
So keep it up.
Speaker 1 (57:07):
I appreciate what you're doing. And then again, anybody, I
highly recommend going in following nobody Special Finance on YouTube,
so thanks so much. We'll talk again soon.
Speaker 2 (57:19):
Thanks Joe,
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