that's why it's a tricky environment, but not necessarily one that the fed is going to force the economy into anything or not if we get lucky on inflation the way we got lucky on inflation all 2022, it's a more benign story. >> we'll have to talk about the chance of a recession now, the chance of a fed making a major error. i'll talk to you tomorrow. "fast money is now." >> the fed hiking rates to the highest in 15 years. does this mean growth will be lower for longer plus, tesla's unlucky 13 the stock down nearly 13% this week in over 55% this year retail investors piling in we'll go inside the numbers. shark tank kevin o'leary's testifying before the senate on the collapse of ftx. he'll join us with detail. we'll ask him how he and so many investors got duped and what the

new ceo called a straight-up embezzlement scam we start off with a volatile market reaction to the fed's latest policy move. major indices ending a two-day win streak the dow dropping more than 400 points at its low. the nasdaq falling as much as 1.7%, the move coming as the fed sees rates topping out at 5.1% next year versus the previous projection of 4.6% it also cut its forecast for economic growth and raised the outlook for unemployment what does the prospect of higher rates for longer mean for the markets? guy, what do you say >> i'm shocked we traded from 3490 to basically 4100 on the side of 4,000 here. if you told me a week ago this is what he would say, i would

have say, the s&p is down 150 handles easy it was down, what, 25? that's not bad obviously tomorrow is another day. we'll see. he was crystal clear we're missing and we're missing by a lot the labor market is still too tight. he could have been more clear in terms of what their expectations are and what they'll do next year i'm shocked that the market didn't behave in kind. >> mike, what was your take? >> i agree with guy. i think steve leisman opened up the press conference asking about financial conditions to me chair powell sounded quite hawkish, saying basically, guys, we're going to be higher than you expect, higher for longer than you expect, invest at your own peril. i think steve asked specifically about the november meeting to the december meeting and the rally in equities, lower yields. powell said, listen, we don't care about intermediating news the market didn't get it.

>> we were chatting while the press conference was going on. i said it feels like the market should sell off into the close everything was out there for the markets to be like, oh, much more hawkish or more hawkish so, therefore, we need to sort of correct for that. yet that didn't happen why do you think >> i think it didn't happen because people are expecting that the inflation data will be better -- >> force the fed -- >> give the fed some cover to not be quite as aggressive as he sounded. he did sound pretty aggressive we have the plot, 5.6 number out there, 5.63 at the high end. i don't know who that was. it was the idea -- they said for a long time, we want positive real rates with inflation here, we've got a ways to go to get -- so it was very, very hawkish that's my only explanation, that people think that inflation is really rolling over, and that will give them some hope. >> look at the vixx down almost

7% today would you have expected this on a fed day? that vixx tells you there was a message of relief. i think the message of relief is that people kind of -- they have a sense of what they need from the fed. powell was very clear. it's all about the labor market right now. he said market conditions are extremely tight, in a place where we're very focused on that and we'll remain higher for longer ultimately for equities, the problem -- the benefit here of this is that lower growth for longer is certainly not great, but it's not a credit crisis it's great we have a credit expert on the desk tonight ultimately i think markets were preparing for the next leg of the journey. we priced in the fed the fed was 3,450 on the s&p two months ago we're waiting for earnings to be revised downward the thing we're most concerned about is a credit crisis powell doesn't have a crystal

ball but he's sticking by, hey, i'm not sure we have to have a recession. that's an environment where stocks will be under control, people are underallocated, ways to invest through this, buying high quality stocks, free cash flow generators, companies paying down debt there is a playbook for that. >> majority say above 5% for 2023 while there may not be a credit crisis, could things get dicy. interest expense will expand at some point that's wanting to catch up. >> that's right. if you look at lending standards at the moment, they're the tightest they've been since the global financial crisis. what i think investors don't get is the move from 7.1% to 5% is going to be pretty easy. the move going from 5% to 2% is going to be very hard. in order to get that last leg of inflation lower, the fed is going to have to stay restrictive which they already are for much longer. i'm like tim i don't think a credit crisis is

looming. we're going to see wider spreads. we're going to see a much more difficult credit environment as we go into next year it's not a crisis, not the type of leverage you had during the gfc. it's also not going to be all roses either. >> we need unemployment to go up significantly in order for them to take their collective foot off the gas. we're talking a five handle or so unemployment is my sense of what their bogey is. what does the economy look like under those scenarios? what does the consumer look like what doesgrowth look like and what do earnings look like we can say the fed doesn't have your back. at the end of it, it comes down to earnings, revenue growth and earnings growth. we don't have it in my opinion to necessitate or to have this multiple close to 19 times next year's numbers make any sense to me >> the reset will happen -- higher rates, we'll talk about

this more in depth the growth stocks came off we saw a move into defensive for sure, tim. is that the playbook then? >> i think the playbook is -- expect small caps to perform we've talked about companies -- we heard from delta. i know airlines aren't sexy. i probably talked about delta for a year and have been largely wrong. this is a company that's going to double free cash flow this is a company -- look at the energy sector. part of the story is i don't inveft in the price of oil, but in energy stocks and energy companies. i just think you've got a backdrop here where there are ways to invest through this. i think the most interesting place maybe is banks if you take credit off the table, banks have great balance sheets at least for now, paying dividends, generating for cash flow net interest margins

look at what european banks, outperforming everything because you went from the worst negative real rates in the world by far to a place where the banks can be profitable in their core business >> karen >> i think that's an excellent point. if we see the feds stabilize and rates are higher but not moving much, that's an okay position to be in. you would know better than i, but if the credit markets are thriving and the new normal, that's a good position for banks as long as credit, the underlying credit worthiness is pretty good. >> one of the things we're seeing, though, is banks are having a hard time off-loading -- you're seeing hung bridge loans, really the demand for risky credit at virtually nil at the moment. ccc issuance has been close to zero i'm a bit more cautious on the banks. higher rates do help remember what nim is going to

follow, net interest margin is the inverted yield curve. >> the banks seem to trade on this two-year, ten-year. however, that's not the way the net interest margin works. the duration is nowhere near that. >> isn't that a function of the fact that deposit rates haven't gone up yet. it takes banks to -- >> definitely there's a lag, and that will -- right now, if you look at the short end of the curve, that's a huge spread for them >> for now >> which yields me to this question. >> it's your show. >> 3.47% is about where we are at the ten-year yield. what does that tell us. >> headed lower. it tells us growth is slowing. the front end at 4.25 tells us inflation is still a problem that's not a healthy scenario. steve might have some thoughts on this.

the equity markets, it's done well so far. negative 80 basis point inversion i think headed to 1%, i don't think that's a particularly healthy scenario. >> let's bring in steve. >> aforementioned. >> senior commission reporter steve leisman. i'll ask you that question you opened up the press conference with chair powell what does 3477% of the ten-year yield tell you >> i don't know what to believe anymore. i'm betwixt and between. i'm about to have an intellectual crisis on international television i have a fed chair and a committed federal reserve to raising rates above 5%, and i have a market, for lack of a better word, showing the fed the finger essentially here. you can see it -- can i say that on national television >> you just did. >> you just did. >> i didn't say the word maybe that's okay. >> it's fine >> anyway, the point being that

when you look at -- guys, if you can put up that fed rate chart, that gap is growing today from where the fed thinks it's going to be and where the market thinks it's going to be. what is that 65 and 15, that's 80 basis points right now where the market thinks fed is going to be and where the fed thinks it's going to be. if you ask me who do you believe, i don't know. the mashlt has a view. the only way to square this, the market view, is that inflation comes down and it comes down hard and fast and convincingly if that is the case, the market will be right and the fed will be wrong i think there's less consequence to the fed being wrong than the market being wrong if the market is wrong and inflation stays high and the fed has to go up to 5 and change, i think there's some adjustment in some of your portfolios over there. >> if inflation comes down very swiftly, which would be a great thing, there's still a lot of

tightening, the lag effect that's going to happen there's the qt effect that's yet to happen. >> that's right. >> i think people on this desk might posit that 3477 is telling you that the fed has overstepped or will be in a position where it has overstepped because inflation will come down >> inflation will come down. >> and all this tightening is already in the pipe. >> and the economy will slow more than the fed forecast i have to say, melissa, in all honesty, i didn't know the answer to the question that i asked powell i don't know what he can do here i think his answer was sort of -- what's the way you say it? sort of a play within a play all he could do is talk tough and say, look, we may raise it again. we'll go up to 5 and change. if you look, by the way, at the conviction of the federal reserve, i broke down the dot plots for you. take a look at how the 2023 projections they have here, 17 members are above 5% now in terms of the outlook for the

fed. none were in the last forecast there's that way to look at it i gave you a better chart that's more understandable. there you go i think that's an easier way to understand it. 17 are to the right of that 5.13 there's a good wing there. seven are above 540. as karen was saying earlier, one person who is not only 563 for 2023, but 2024 and 2025. that one person, we don't know who that is. we'll try to figure it out over time only two at 490. that's where everybody thought the fed was going to there's conviction on the federal reserve of getting up to that level and staying there by the way, that's the year end forecast that's not the peak forecast, the year end forecast. they could all be wrong. that's entirely possible, but somewhere along the line somebody is going to have to make a change here maybe it's the fed, maybe the market. >> by the way, steve, that chart, it looks like someone is

giving you the finger. >> it's a rorschach test >> it's okay higher longer-term inflation in this country because labor is sticky, they've emphasized this, housing costs might come down, also leads to lower growth any projection on u.s. economic growth the next couple years this isn't a fair exercise for you. higher inflation isn't good for stocks because ultimately we're going to get lower growth out of this economy >> you know, i think that's right. in fact, if you want to hear, tim, the other question i was going to ask powell, you notice how he said that labor shortage isn't going away any time soon you know how you calculate growth, right? it's hours worked plus productivity if productivity doesn't change and we have a secular labor problem in this country, that does mean lower growth for the long-term as well. that's something else to think about. i think an environment of lower

inflation is an easier environment for companies to operate, even though they have done quite well in this inflationary environment they have, in fact, increased their margins. what's going to happen now, tim, worth putting into your spreadsheets there, as inflation comes down, margins should come down, too. you've got to figure that out, too. >> steve, thank you. >> pleasure. >> how will companies fare in this new environment, guy? >> how much longer can you pass on your costs -- >> they're reaching. >> we've seen that. >> 16% organic growth which is just code for 16% inflation, passing on to the customer how much longer -- i don't think you can. to answer your question, margins contract i think revenues by definition start to contract. which means the multiple you pay for all that should be lower, too. >> i think expenses contract i think we're going to see a

real white collar recession. the number of job openings for blue collar is still huge, nowhere close to filling that. yet on the other side we see white collar jobs cut every day. we're just, just, just getting started. it doesn't come out in hourly wages, but it is deflationary. >> are if you see people at your company getting laid off, belt tightening, no more travel, dinners, no holiday party, that gets you to belt tighten yourself in your own household how do you think about that hitting white collar and the impact on the economy? >> i think obviously there should be some trickle down from white collar to blue collar. karen is absolutely right. when you look at the labor shortage, it is in the service industry it typically is in blue collar jobs the way i always say this is, if you're a hotel and you're able

to staff to 80% post pandemic and you lose 10% of your business and now you're only 90% full, you don't have to cut the staff around your hotel. that's going to be a tough hurdle to climb. >> we've got an earnings alert on lennar, shares lower after reporting mixed results for the latest quarter, down over 1% now. diana olick has the report. >> came in at $4.55 a share, below estimates of $4.90 a share. revenue beat slightly at $10.2 billion. home deliveries up 13% last year, in line with guidance estimates at the beginning of the quarter. new orders up to 13,200 homes. the dollar volume was down 24% to $5.5 billion. cancellation rate doubled from 12% to 26% chairman stewart miller said our gross margin declined by 270

basis points year over year as we adjusted the price of new home sales and homes in backlog to market, to reduce cancellation rates and promote deliveries q1 delivery guidance is higher-than-expected miller added that sales volume and pricing have been impacted by rising interest rates he didn't reference the recent drop in mortgage rates which are now down a full percentage point from where they were in october. >> a big move. thank you, diana olick how do you think about that? mortgage rates are lower, but the outcome for the economy is more bleak >> i think if you're investing in home builders tactically, the last three months was a great time to do it. i think you just hide your trade. no way i want to be buying lennar in this environment where i think velocity in home ownership and getting loans, michael talking about where banks are, no. i'm sorry. i understand this is less than six times multiple and not the housing crisis, but no, i'm not buying houses. >> from 70 to 90 in a couple

weeks. 90 is where we topped out in the middle of august this is a natural place to take money off the table. but if ten-year yields continue to go lower, there's going to be a place to buy back the stock. it comes in the form of low 80s. take profits here but look for another entry point lower. coming up, what the fed's strategy means for the growth trade in the new year. one media stock taking a big leg lower in today's session, the moves the company is making that had investors dropping out the details when "fast money" returns. nd, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes. go to getrefunds.com to get started.

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with the fed indicating interest rates will remain higher for longer, we wondered if that means the growth trade will be lower for longer big tech has been hit hard by rising rates on pace for the worst year since 2008 the spdr losing a quarter of its value, its worst year on record. a struggle in store for growth in 2023. karen, where would you stand on that >> i'm short the igb which i think as very high growth. that's still short because even

though things have improved a lot, they were so far in the stratosphere, i think there's still a lot to go. >> tim -- >> when i think about the mega cap names, i think google is a place where we're going to get market trend at a multiple that makes sense. it's going to be the best peg ratio of any of the major. think of all the companies that hinged their future on cloud it's not just microsoft. i don't think it's as much about google, but obviously amazon and on down. even ibm which people, given a lot of credit, related to the game i'm worried about cloud trading. i think it's unbelievably competitive. i think enterprise will pull back. >> you were pointing out apple and how it hasn't polarticipate as of late >> apple is its own animal without question to a certain extent it's apple specific you start going down the food chain president since we'll play

the growth game, nvidia rallied 60% -- >> 80. >> think about that nor a second it's probably still down 50% from the all-time high current levels, it's trading at 15 times revenues which is expensive in any environment, not least of which the environment we find ourselves in should these stocks still be trading there? absolutely not >> i think the growth trade was really driven by a massive bubble in treasuries and liquidity. how the question is going to be whether or not you transition from a liquidity bubble and the popping of that bubble in 2022 to now tech behaving, what it really is, more cyclical cloud is cyclical. subscription services, cyclical. that's the big question, is what is the earnings story going to be for tech in 2023. 2022 is about the liquidity bubble popping. >> semis used to be cyclical, also no longer. >> they should be.

>> that's guy's point, right they used to trade cyclical -- >> something like taiwan semi that priced in a lot of cyclicality, the minute you get that first iphone shipment warning, is probably the time you want to buy taiwan semi. i think six to nine months before you expect to see some reacceleration in the economy, you want to own these things it tells me, despite all the tactical rallies you have, you want to buy taiwan semi late first quarter, early second quarter based on the macro we just talked about. >> there was a case not long ago when people were making the point that big cap tech was not cyclical, it was defensive in good in good weather, good in bad weather. going to serve you well in all

environments that's unraveled. >> when people started looking at valuations in november of last year, obviously it's not coincidental that so many names we talk about every night all topped out 13 or so months ago that's when the fed pivoted. it's a rates thing. >> tech is competing with fixed income and credit markets. think about tina who is tina. gilligan's island. >> i'd go tina turner. >> i was going to go tina louise. >> of course you would. >> isn't the whole story of tech to pay for growth. if you look, what is the best sector for long-term growth? it's actually energy >> tina yothers on family ties >> a lot of things could be happening. coming up, shares of charter communications dropping hard in

today's session, the $5 billion upgrade that had investors losing connection. plus have we seen the bottom of the barrel oil continuing to bounce will prices keep pumping you're watching "fast money" live from the nasdaq mkeart site in times square. back right after this.

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♪♪ for skin as alive as you are... don't settle for silver. harness the power of 7 moisturizers & 3 vitamins to smooth, heal, and moisturize your dry skin. gold bond. champion your skin. welcome back to "fast money. stocks closing in the red after the fed raised rates and signaled more hikes in 2023. the dow dropping more than 140 points, s&p flaulg .5% all three indices on pace for positive weeks the only positive sector today selloff, health care led by

moderna and pfizer check out charter communications that dropped more than 16% after ceo thomas rutledge said at an investor event that capx would come in higher-than-expected he said the company would invest $5.5 billion over three years to upgrade the high-speed internet network, the company losing $10 billion in market cap just today. guy. >> go back and look at where the stock was in 2018. the stock was north of -- not that that matters. just for context north of $800. traded five times normal volume. what they lost today is not nearly commensurate with the amount they're going to spend. the stock has gotten wailed on, five times normal vom volume, very reasonable in terms of earnings, in terms of pe right here probably about ten times or so next year's numbers. i think this is the capitulation you've been waiting for. >> the reason for the capitulation is an investor

meeting where the ceo laid out a spending plan -- thinking about cable companies over the last 30 years, that spending plan was supported by growth and infrastructure and secular tail winds that we know is everything flying in the face of ripping the cord out or whatever we say. it was about whether the roic in a company like this is worth what they're going to go spend. >> coming up, crude comeback wti continuing to climb after scraping the bottom of the barrel a week ago. top annual least paul sankey joining us s oil price, plus a new paris trade when "fast money" returns.

wti crude rebounding off the l lows of the reason the commodity hit its lowest level on friday is up more than 8% this week let's bring in paul sankey of sankey research for more of what 2020 brings. paul, good to see you. we've seen the lows for crude you think? >> this year, i think so if you look back at 2018 we had very similar market action that we expect every year from labor

day into the beginning of winter which is essentially what we've seen, a significant falloff in prices, since labor day essentially down to the lows that we saw. if you look at what happened from '18 into '19, we saw crude hard into driving season looking for $120 brent which would be $115 by driving season which we may next year, in 2023. the answer to your question is yes. >> what happens with energy equities with this backdrop? >> that's a very interesting question, melissa. what we've seen on the downside certainly for the first part of the big down move in crude, energy equities outperformed, didn't go down as much as oil did. they were okay with a move down to 80. i think when the risk got below 80, then it became a problem for the equities in that last leg. as you can see now, we're getting this beginning of winter, very cold in europe, russian oil coming off the

market, et cetera, et cetera, all the things coming together you can see the equities are moving well here. >> paul, put your economist hat on real quick. we get a 50 rally in brent i think the math is right, by the spring that makes this federal reserve job extraordinarily more difficult than it is right now agreed >> yeah. look at the saudis i think that's what's really upsetting the administration one of the scary things from an administration point of view is the announcement of opec plus that they would cut 2 million barrels a day, they never cut exports. the potential is there for saudi to more more toward a $100-type target which i believe they have i they they didn't cut because of the huge uncertainty we had going into russian sanctions, winter, spi releases, everything else unless we move towards 100, they're going to act to help that on its way.

>> before we get to your pairs trade, paul, i want to see how you felt about china with its sudden and drastic reopening which is resulting to a point where they're not even testing anymore. they're not pcr testing, not keeping track of covid cases it's just too overwhelming is the situation in china, is that going to be a tailwind or headwind for oil prices? >> i was with the chevron ceo on the rode the last week or so the concern is they don't have the health care system to manage a really bad issue here. it's extremely difficult to call actually, mike werth, the ceo of shef haven't called it the biggest macro uncertainty of 2023 they don't have a good vaccine and don't have a great health care system, so that's a brute the iea this morning reported

pretty impressive numbers for china growth they've also got aggressive cuts in russian supply. if you combine those two things together, their note this morning read very bullish. >> your paris trade, paul. we love to do this it started as a fun thing. the last one was what, short ford >> well, yeah. it was long e andi we thought the europeans would have a run the e and i side worked okay karen, to give her credit, said better tesla than ford i said i'm doing ticket e versus ticket f i agree with you on tesla. that trade kind of worked. i credit karen with the call there's an oil supply problem globally we know it's out there we think the oil service is going to be a great way to play a bullish oil run here we're looking at halliburton if you want somereal hair, you

could have gone briggs transocean we're saying halliburton on the long side. one thing the eia is reporting is really bad petrochemicals, the combination of weekenning demand and high input costs. we're saying short west lake you can short almost any chemical play here against halliburton. and that's bad. >> paul, thank you good to see you. paul sankey, sankey research tim. >> $120 oil prices would be great for oil equities except it's not high oil prices are not an environment to necessarily be chasing oil stocks because no one believes those prices are sustainable. if you think about where most of these integrateds and the up stream are priced, off a $70 oil curve which is where we are. i've been hally burton and schlumberger for two years the oil offshore drilling market is getting very tight. wells that were drilled but not completed have all been maxed

out now. there's a lot of fresh drilling that needs to go i think you can stay in this trade. >> you like energy, michael. >> we like energy a lot. we like it from a longer-term basis, more a secular point of view the demand side, if you get a recession, it's going to take energy a little lower, right on a longer term basis, we're very, very constructive, energy and commodities in general that's a trade for higher inflation environment which we're likely going to see. >> grade paul's trade? >> bad ass. >> not paul. >> this is well thought out. short chemicals, long services he'll be back in february and we'll be saying you're a genius paul great call oih will be 320. good for paul sankey. coming up, tress la hitting two-year lows, that's not stopping the retail trader from plugging in. is that right tank investor

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welcome back to "fast money.

tesla tumbling to a two-year low, losses to more than 12% that hasn't stopped retail traders from buying with both hands. over the last five days investors snapped up more than $600 million worth of tesla stock, nearly as much as their next four favorite names combined we haven't seen a -- actually a record low forward pe. maybe that has something to do with it. are they getting taken >> when does pe have anything to do with why anybody is buying tesla. i actually was looking at the chart two days ago i saw it actually dipped below from where it had been from the share splint going back to the summer of 2020 which i think is a dangerous level onthe chart. >> the other day you brought up gm versus tesla. we had mark fields on and put up the chart. ford handedly outperformed

tesla. finally legacy oems may have a shot at getting into this ev race in a more substantial way because of tesla's troubles. >> i think that's true time has gone by and they are ready to market, but i also think that it's very elon-specific. i got a lot of pushback on that. you know, i looked at -- which state has the most f-150 sales it's texas, by a lot if the ceo of ford would go out and start trashing texas, that wouldn't be a wise thing and i would be pissed as a shareholder. it's not a political statement i don't know, you shouldn't be aggravating half the shareholders or half the potential buyers. >> options trader aren't quite as optimistic on where tesla could be heading next. kelly intelligence ceo kevin kelly joining us >> tesla is a sentiment driven

stock. we saw 1.4 times the amount of puts traded versus calls given that sentiment, it actually was reflected into a sizable trade today where we actually saw a buyer thinking santa claus is going to bring more coal than a rally to tesla. they bought almost 4,000 contracts expiring on december 23rd of the 140 puts they paid $1.22 for that tesla has implied volatility of almost 70, but they were willing to pay the price. >> kevin, thanks kevin kelly. for more options action tune in friday, 5:30 eastern. up next, shark tank investor kevin o'leary joins us m nkn-ietold the senate about sabamafrd and the collapsed firm that interview when "fast money" returns.

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welcome back to "fast money. the senate banking committee holding a second day of hearings on the downfall of ftx ftx investor kevin o'leary who

lost millions had this to say. >> in my view, my personal opinion, these two behemoths that owned the unregulated market together and grew these incredible businesses in terms of growth were at war with each other, and one put the other out of business intentionally. now, maybe there's nothing wrong with that. maybe there's nothing wrong with love and war, but binance is a massive, unregulated global monopoly now they put ftx out of business that's my personal opinion that's what sam bankman-fried told me in terms of where the assets went. >> kevin is a cnbc contributor, the host of cnbc's "money court" and a is that right tank investor great to debt your take on this.

binance didn't make sbf embezzle money. binance didn't insin rate all of the accounting trails from where the money went in terms of alameda research i'm wondering if you think you're laying a little too much blame at binance's foot as opposed to say sbf ran this operation that was completely a mirage >> no, that's not what i was asked today. that's not why the hearing was put together it was designed to explore the reasons for the demise of ftx. there's lots of accounting is issues, lots of investigations, lots of litigationment let's talk about where the money went. this is a pretty simple situation. way back on the saturday when -- the friday after -- i'll give you a date here, looking at my notes here saturday, november 12th. i noticed that our corporate accounts -- yes, i'm an

investor there was nothing there. not only were there no assets. there were no records. there was nothing. it had been stripped clean i decided, i know the management of this company. i'm going to make some phone calls, did it get hacked, go to the behemoth government, go to wherever, ftx u.s. it's a very simple question. not brain surgery here i called sam bankman-fried up and said where is the money. he said i don't have access anymore to is the servers. i said, okay, walk me back 24 months where did the money go forget about the small stuff, $the 50 million, all the allegations of fraud forget all that. you're at $32 billion company where did the real money go? that's when i learned he bought back all the stock from binance. they were a 20% shareholder.

i didn't know that the second largest shareholder maybe. i don't have the records, but we'll find this all out. the first largest shareholders, the biggest, sam bankman-fried himself, bought out all of stock of finance i said to him why would you do that why would you pay a $32 billion valuation for something you sold for seed stock valuations months ago. he said i can't get licensed anymore. anywhere i go, when binance is 20% of the cap table, the regulators turn me down. either c z. was being uncooperative or he had reasons not to disclose whatever the regulators wanted, in every geography they went. according to sam bankman-fried, i had to buy it back you want to know where the money went that's where it went all i'm saying is, sure, there's other allegations, and i know

that's all going to be put through the system but that was a very -- the major loss of the balance sheet was basically a plated transaction between two share olders the onliry i brought it up, that sounds like a made-up clawback to me. there's something wrong here. >> can i ask you, kevin, you made it sound like he used cash, money in various accounts in order to do this, money that was in your account, for instance. but did sam bankman-fried use ftt tokens to buy any part of that binance stock back? >> great question, melissa nobody knows there's no records anymore that's the first place i'm sure john ray is going to look. but was it cash? my bet is a lot of it was cash we simply don't know the point is let's move forward now to the week of november 6th when this company went bankrupt. why in the world would a block

trade like the one owned by c. z. and/or binance be tweeted out saying i have $550 million of ftt tokens i put to the market you don't trade like that. you go and find buyers, form a syndicate. >> that's in traditional finance, kevin this is decentralized wild west finance, so he didn't do that. >> melissa, that's the whole point. let me tell you something. my read of the senate today, they're tired of this. they don't want to keep holding hearings every six months when the next crypto crap blows up. they're done with it they're not happy cowboys. they're really unhappy it's not going to stop here. i don't know where we're going with this. the narratives will look at binance next all this stuff is alleged. there's no records but the senate, the hill, the legislators, the regulators, they're done

they've had enough so i think we're going to get some action here they can't keep taking these things down to zero a billion at a time. >> action -- if they're sick and tired of this situation, kevin, it sounds like the regulation is going to be very harsh and swif congressional terms, swift on their timeline i'm wondering, because you're an investor in the u.s. platform as well as the foreign entity, with your own dollars, not with other people's money as an investor in this, what did you see? when ray comes out and says this is worse than enron when it comes to accounting, and enron was pretty bad, obviously, weren't you privy to that? didn't you see anything that would tip you off? >> no, i didn't see anything that would tip me off. you're right, i'd never put an lp into this because i was a paid spokesperson. that would be a conflict of interest i look like an idiot and so do the other 90 investors

we all feel very foolish at this point now, the most important thing are the records. john ray has to go get the records. i'd argue this is a very simple situation, not that complicated. you follow the money let me tell you why it's going to be not so hard to do that, every wire transfer going into alameda, whether a fed wire, ach transfer or a swift wire, we're going to know the address it went to, we can audit that all the meat grinding that went on in alameda, we'll get the accounting records and know how that occurred. any transfers between ftx and alameda, we'll get that, too any crypto leaving any of those entities is on the blockchain, irrevocable. you can audit that my guess is we'll find out what happened here. i don't know where the cash is, but the overall -- i was in washington all day today, the mood, the tone, they're not okay

here, melissa. they're not okay so watch what happens. i predict swift, difficult, unhappiness. they don't want anymore hearings. >> so, kevin, i'm curious. have you talked to sam bankman-fried since all this has gone down? >> last time i talked to him was prior to when he was arrested. i was trying to clarify -- when i first talked to him about -- look, i was shocked when he told me -- he told me the first time i talked to him. i said 24 months, where is the cash, i don't want to hear about the trading. where did the cash grow? use of capital off the balance sheet. i'm a balance sheet cash flow guy. walk me back he said i think i spent $2 billion buying back stock from c. z i said $2 billion? a day later, starting to think about this, i called back saying

i just got called to testify in hearings i've got to have the real information. i've got to have the truth i said was it $2 billion he said maybe it was $3 billion. >> kevin, we're up against the clock. i've got to ask you this you clearly have some choice words for binance. it almost sounds like you think that was a great trade for binance. short of the company going bankrupt, they made $3 billion, $2 billion whatever he paid, they made that. >> it was a brilliant move if you think whatever happened on the u.s. senate floor today will make it easy for binance to get licensed anywhere on earth, i don't think so i don't think so. >> we've got to leave it there thanks for joining us. kevin o'leary. an exclusive interview with the ceo of binance on squawk box tomorrow right here on nbc all right. final trade time

tim. >> i'm not even sure i gave one today. here is what i'll say. don't fight the fed. >> we always have final trade. >> that was fascinating. >> i got very scared it's happened before. >> we'll tweet so. my mission is simple, to make you money, i'm here to level the playing field for all invest tors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer, well come "mad money" my job is not just to entertain but teach. call me or tweet me @jimcramer it's too darn hot. it's too darn hot. we have a fed chief who doesn't like it