"Massive Market CRASH Coming..." - David Hunter

Hinzugefügt: 2026-05-26

[00:00:00]What we see is that certain parts of the economy are propping it up and doing very well. As we saw when the capital goods orders came out, you know, the industrial side where we're seeing the reshoring, where we're seeing defense spending, where we're seeing a lot of the heavier industries actually expanding, they're doing very well. When you kind of look at the consumer, half the consumers are doing very well.

[00:00:24]Unfortunately, you know, half the consumers are basically just getting by.

[00:00:29]Cost of living is going up. We obviously got hit with, you know, big rises in prices over the last few years in groceries. And now we have with the Iranian situation, oil, you know, going up sharply. So, the consumer is, you know, those that have equity portfolios, those that have good jobs and are making, you know, are in the top half of the income spectrum, are doing quite well. Their housing equity is is still strong. You know, they're in pretty good shape. But the bottom half of the economic spectrum is really struggling.

[00:01:02]And so you are seeing, you know, fall off in some areas. Dining out isn't as strong as it was, things like that. The economy, I think, is probably, we're not in recession. There are aspects of the economy in recession. We may be able to get this thing through to the election.

[00:01:20]You know, at one point, for those that are don't want to see a change in, you know, who's kind of running the government, they're worried, at least in my forecast, that we'd see that all come to an end by midyear this year and that the second half would be rough and it'd be tough for Republicans to win. Given that where the economy is right now, that may be, for those that want a Republican victory, the good news is that it may actually hold together for longer than I expected. So, the economy's kind of mixed. It's not roaring away, but there are parts of it that are doing pretty well. Obviously, if the Iranian conflict lasts for very long, that could change a lot. My targets have been raised pretty substantially in the metals. I think they may have been raised in the equities, maybe not. Depends on around that time cuz in my fourth quarter letter comes out in early October and I did raise equity targets then. So, they did raise back in October to 9,500. So, I think we are in that final parabolic melt-up phase and I expect we'll probably see those targets reached this summer. I think certainly we have the supply that a lot of the world does not have as a result of the blockade at the close of the straight. We are not going to be short of energy. We are not going to be in that position. Prices here are probably going to be better behaved than around the world. But, oil's gone from 65 to, you know, 103 or 4 dollars here in what, you know, 2 months time and gasoline's gone up, you know, a buck and change. So, it is for those on the where they were tight already, that just makes it they have to choose now. They have to say, you know, do I choose between taking a trip or do I have to choose between certain, you know, the gasoline cost is going up and they have to take it from somewhere else, you know. But, generally, yeah, I mean, the US is probably in the best shape of anybody around the world as a result of our energy situation. And I think if you fast forward, if you have any optimism about Iran and I do, this could turn out very well for the US and basically the world could turn around here pretty quickly. It's a situation where I think everybody's caught in right now and right now, obviously, things are going adverse to what maybe we would like to see, for sure. And everybody gets gloom and doom about, well, how are you going to ever get, you know, the Iranian guard to do a deal? How are you going to really see this thing evolve? And so, they go back into that worry about this is going to be a drawn-out situation. I think that's unlikely. I think the move to a blockade, in my opinion, was a very, very good move. And, you know, the IRGC Iran try to talk a good game, but ultimately their days away from there having no place to put their oil and having to cap their oil. That's a very detrimental thing longer term, you know, if they allow that to happen. So, I think they're under a lot more pressure than they want to make us believe. Sure, they can cause mischief around the Middle East and elsewhere, but ultimately I think it's just a matter of having a little patience. We are a country right now having gone through Afghanistan and Iraq that has little tolerance for war. But right now we're just in a waiting game. Again, there's things that can go adverse, but ultimately if you step through this and have some optimism, I think you could have for the first time looking out a few months, for the first time in many, many decades, peace in the Middle East, development in the Middle East in terms of Gaza, and Iran that is no longer a state sponsor of terrorism, but actually is can start looking forward in terms of being more of a productive country again. But, you know, it doesn't happen overnight. And right now it's messy, so you know, investors are skittish. It's cost of living. You know, everybody obviously the elections are going to turn probably on whether the Democrats can convince people that affordability is something that Republicans aren't handling well. And if they can, they'll probably win the midterm elections. But that's I think affordability is number one topic for consumers. You see that and luxury goods are doing okay, but you know, things that are kind of necessities are slowing down or the lower end of the income scale retail markets are, you know, sluggish. But that's I think, although it's probably more extreme this time, I think that's what you see typically going into a recession is those that can't afford it can keep pushing longer, but ultimately these are early signs of a recession I think is what we're seeing. And ultimately it will tip the entire economy over, but not yet. I think it's probably not just AI I think AI probably not going to be the tipping point. I think it's overall. Yeah, AI influenced technology workers and things like that where AI is taking over. Yeah, some of that will be part of it. But I also think it is economic and you will ultimately see it tip over. I would not be surprised to see and I'm still calling for a global bust that next year we move towards double-digit unemployment. So it won't happen fast.

[00:06:05]You're not going to go from four to 10 or anything like that. But I think if the global economy really tips over into a credit crisis, this thing could get pretty ugly. I think it's early signs that we are moving towards a recession and ultimately what I call a global bust or credit crisis. You get the weaker areas, just like the consumer, the weaker areas show up first. And obviously private credit is an area that got a lot of money in this cycle and it's starting to show signs cuz some of that money chased some things that probably were a little more should not have been maybe been done. And people in the private credit business would tell you this is normal. We price in for risk and when that risk happens, we adjust.

[00:06:46]So the market is newer to this, overreacts and says, "Oh my god, private credit, the bust is now." Whereas those in the business tell you, "No, you know, there are write-offs. We're adjusting things and at the margin, yes, it's deteriorating, but we're nowhere near, I don't think, the tipping point yet. That could come, you know, in the months ahead, but I don't think it's a sign that we're about to roll over. We've been basically in a range between, say, 4 and a quarter and 450 for the last couple months since the war began.

[00:07:14]That's amazing resilience given what oil has done, given what that the inflation numbers are ticking up, given talk that the Fed is nowhere near [music] another cut. All those things and yet the bond market it's, you know, the 10-year backed up, I think. So it's up a little bit higher in that range. But it really, in my opinion, has been remarkably resilient since the war began. And that's a good sign. I continue to call for that the bond market is in a bottoming formation that's been in for the last two and a half or almost three years and that that's a major bottom, a major top in rates and that once we come out of that formation, once we come out of that bottom in bonds, you're in for a very big run in the bond market, a very long decline in rates driven later by a global bust, you know, a slow economy that ultimately recession, ultimately global bust. And I continue to say, although this is a crazy forecast and not unlike some of my others and when they start out, a very contrarian forecast, but I continue to say we could see a 0% 10-year [music] at the bottom of the bust. Now, that's 12 to 18 months out probably and maybe closer to 18, but to go down to anything close to zero would be a remarkable run.

[00:08:25]I do think that on the other side of the bust, because of the response that will be necessary for the bust, which means a massive money printing, we're going to have a situation where you're going to have huge debt as we have now, you know, 330 trillion in global debt and you know, we know what our government debt is here in this country. You're going to have a situation where out towards the end of this decade, you could have high double-digit interest rates and still have that massive debt and actually higher debt because of what the response to the bust will be. The 330 trillion could grow to 450 trillion by, you know, early 2030s and even far bigger and yet have interest rates in the high double-digit category. There's no way you can square that equation. You know, something's got to give and what I think will give will be this is the bust will be the kind of the warning signal as bad as it will be, it will be kind of the shot across the bow that this thing's coming to an end and then I think the mid-30s you're looking at basically down for the count, you know, the Ponzi scheme's over, the Ponzi scheme that's been in place for 80, 90 years comes to an end because you can't print money because there's high inflation and you don't have the wherewithal to service your debt. So, even sovereign debt goes down, you know, tumbles over the mountain.