The Final Melt-Up of a 43 Year Bull Market Continues with David Hunter

本站添加: 2026-05-19

[00:00:00]equity targets are still the same, although I think the odds are pretty good I'm going to have to raise uh at least the NASDAQ, maybe the S&P, uh maybe maybe all of them. Um I did raise my uh metal targets um in my January letter and then when we had that huge run in December, January um and then the correction on the correction I raised them even again. So, so we can go over that later, but um you know that's that's where I've had to increase. I've I've increased a few sectors, but but this market is in its meltup phase, and I think there's there's more room to go than I thought even.

[00:00:49]>> Hey everyone, my name is Anthony Fatsiz and welcome to another episode of the What the Finance podcast. On this episode, I have the pleasure of welcoming back David Hunter. There are two ways the cycle ends, and my guest today believes both are coming in sequence and faster than almost anyone expects. First, the meltup. David has long argued that risk assets have one final parabolic up leg left in them. The last stage of a 43-year bull market and the biggest steepest rally of the postwar era and then the bust, a glo global deflationary unwind that brings the curtain down on the entire cycle.

[00:01:21]It's a contrarian framework in the truest sense and David has built his career on exactly that. 52 years on Wall Street with a contrarian philosophy that has allowed him to forecast economic cycles well ahead of the crowd. With the Iran conflict reshaping energy markets and markets pricing in everything except a genuine turning point. There's rarely been a more important time to hear his road map. David, thanks so much for coming back on the podcast.

[00:01:44]>> Yeah, Anthony, good to see you again.

[00:01:47]>> Yeah, very good. Last time we spoke it was uh December and a lot's definitely changed in the world and markets especially. Uh but yeah, I think then you were saying you'd recently increased your price target on the S&P to 9500. Um how are you looking at at the moment? Do you still have you increased it since then or do you still think 9500 is the target?

[00:02:04]>> No, my my Yeah, I raised them in October of last year and and my equity targets are still the same. Although I think the odds are pretty good I'm going to have to raise uh at least the NASDAQ, maybe the S&P uh maybe maybe all of them. Um I did raise my uh metal targets um in my January letter and then when we had that huge run in December, January um and then the correction on the correction I raised them even again. So, so we can go over that later, but um you know that's that's where I've had to increase. I've I've increased a few sectors, but but this market is in its meltup phase, and I think there's there's more room to go than I thought even.

[00:02:54]>> Yeah, it definitely seems to be the case. It's just extremely resilient despite all the volatility we've been seeing in, you know, geopolitics and macroeconomics. So, how do you see that flowing through? Do you think it'll be positive for stocks? Well, it has been, but do you see that continuing?

[00:03:08]>> Absolutely do. We we came out of the correction, you know, the the March April correction where we, you know, because of the war, uh, pretty much can look at it, you know, right as the war entered, you know, started March one.

[00:03:22]Uh, the thing rolled over and went south and people were getting very bearish and talking about the highs are in, etc., etc. Um, I remained pretty bullish. I said, we, you know, we've got a correction. we can get down um you know seven or eight% but it ended up the S&P down almost 10 uh I think nine um and from there it reversed and hasn't looked back and I think this move out of that correction is that parabolic meltup if you look it's gone very vertical here in recent weeks and I think that's only going to continue into you know into the summer months so I think you know my 9500 could be reached by July. Uh and and if I have to raise, I'm not going to be raising a huge amount. But um I I think I think you could see a top this summer.

[00:04:14]>> Yeah. Interesting. I guess a lot of people are worried about, you know, if the Austral continues to be closed. If that the crude and then the jet fuel and all these other uh commodities aren't getting to the rest of the economy, then that will start to drag on, you know, we're already seeing it coming through inflation and it will start to drag with demand destruction in other parts of of the economy. Do you see that or you don't think it will have an impact?

[00:04:34]>> That's that's the narrative that's in the market in spite of us being at all-time highs. You know, there's an awful lot of uh negative sentiment out there. Uh cautious, skeptical, uh looking looking for the top, looking to get out. Um already out, you know, already positioned defensively. I think that's the general sentiment out there.

[00:04:55]And it is a lot of it is that fear that inflation's turning up that the you know oil prices can go a lot higher that you know this war could drag on for a while.

[00:05:07]I don't I don't believe any of that and frankly I think it's discounted at least you know a lot more is discounted in this market in terms of negativity than than is deserved or than is going to be you know will end up happening. So I think it's quite the opposite is if we get a resolution and we could get a resolution this month in my opinion. Um I think you'll see oil fall very sharply you know certainly down into the 70s and and ultimately back into the 60s and 50s and you know I have an oil target of 30 in the bust which is more next year but um so I I am not one of those looking for 150 or 200 on oil. I could be wrong, you know, if this thing really does turn south and and get extended, but I think more and more it looks to me like this thing will wind down. Uh oil would be coming down. Uh those that are worried about the 5% uh long bond that we saw this week, I think that's going to turn out to be the high water mark for yields. And I think you're you're heading for on the 10ear I think you're heading for 3% and ultimately 2 and a.5% in this year and in the bust I think you can get the tenure down to zero which has been my longheld view that you know in a deflationary bust which is uh more of a 2027 story that you're going to see yields fall dramatically because the central banks are going to have to print money so and print a lot of money uh to pull us out of a bust. So, um, so I'm in, you know, I'm just not in that camp that worries about inflation here, worries about the Fed having to hike, worries about, um, you know, rates going a lot higher. I think it's quite the opposite story. The thing is what we can spend all the time we want looking at technicals and all that. Ultimately, the story right now that's going to change things is Iran. if Iran, you know, turns negative, gets worse, um then, you know, the scenario could be quite different that I'm portraying. But I think Iran is the reason we're, you know, we're we're where we are now. And I think if it turns to a resolution of some sort and the straight opens up, um, you know, you're going to have all of that rates down, uh, market up and and both in pretty big, uh, pretty big amounts.

[00:07:33]>> Do you think that's likely or it not sure?

[00:07:36]>> Absolutely do think it's likely. That's what I'm saying is I think >> Yeah. Okay. uh you know obviously I don't know uh when things will get resolved or what their agreement will look like but I think one way or the other Iran doesn't have a lot of staying power here most of the cards are in you know the US hands and Israel's hands um if we have to resume um bombing uh then you know that could stretch it out and oil could go higher but even even if we have to do that I think it it will be resolved pretty quickly. I I just We've taken out their navy. We've taken out their air force. Um you know, depending on who you believe, we've taken out a lot of their drone capability and missile capability and and so whatever is left. Yeah, it's tricky when you've got a regime that basically doesn't, you know, isn't worried about what their people are going to suffer uh without income, without revenues coming in. um is a little tricky, but they they can't hold on for very long when there's, you know, the the block eight has basically shut off their revenue source. So, um one way or the other, I think this thing cannot be dragged out very long. What I also see is that a lot of what you hear in the media obviously is anti-Trump.

[00:08:53]You know, they're they'll spin everything negative. Same with the Democrats. they they almost act like they would not almost they act like they would prefer Iran to win than Trump to win. So, so you get a lot of that out there and I think, you know, people should know better, but I think that does weigh on people's minds or influence people's thinking. And and on top of that, I think people are still um kind of living in that world of what happened in Iraq and Afghanistan where they just they're, you know, they're fatigued of any kind of long wars and that's their biggest fear that sits around, you know, and I just don't think this is at all like that. Number one, you have a different commander-in-chief who's not going to not going to drag it out. He knows he has to get this thing wrapped up. But number two, it's just a very different situation and we have, you know, we have most of the Middle East on our side on this. Um, we may not be getting a lot of help from Europe, but you know, we Israel and the US have this pretty much in hand. It's again, it's tough because it's, you know, I don't think Trump wants to take the risk of putting soldiers on the ground and and have and that's what probably would finish this off pretty quick is if we could, you know, uh, go after the IRGC.

[00:10:15]But even without that, I I think this thing gets wrapped up pretty, you know, again, I don't know whether it's days, weeks, or a month or two, but nothing beyond that in my opinion.

[00:10:26]>> Yeah. Okay. makes a lot of sense. And I I I feel like the one maybe issue that we could see and you know, let's see if they would be willing to do it, is the Fed potentially increasing rates because of the inflation. And I feel like that would be very detrimental to uh the economy and then to the markets as well.

[00:10:42]Do you see that as a risk or you don't think they will?

[00:10:45]>> It's obviously a risk. I don't I think it's very uh low probability.

[00:10:50]um you know when you're betting on what a committee will do um it's it's hard to know because it's they're human beings and they can do whatever they want you know but but I think when you look at the economics of it I I don't think it's really justified from the standpoint that the economy we still have a have and have not economy or a K-shaped economy whatever you want to call it and that that bottom half of the economy continues to worsen and I don't and the Fed is aware of that their number, you know, their their data shows it too. Um, I don't think they would feel comfortable raising rates in that environment. Now, they're going to talk about oil prices and talk about inflation and you know, you got the hawks that are going to come out like Qashqari has. Um, at least putting that out there as possibility.

[00:11:41]I think it's number one, I don't think inflation is breaking out in any big way. I think actually inflation's people are surprised at what the numbers are given what oil has done um and given what some of the other commodities that are constrained have done. Um, and yet inflation's still pretty well behaved.

[00:12:00]And like I said, if oil goes from 100 here down to 70, all of a sudden you got the exact opposite story where you got to worry about, you know, you got a weak economy, at least half of the economy is in trouble. Um, and you've got inflation heading south in a in a hurry. Um, all of a sudden that thing gets flipped on a dime and and they have to worry about cutting. So, right now, I think you're in kind of neutral territory. They don't want to they don't want to cut in the face of, you know, rising the the monthly inflation numbers rising, but I don't think they're really I I personally would have a hard time believing they're going to hike rates into this environment. And particularly with the new chairman, you know, Worsh Wars is even though he's a hawk in terms of wanting the balance sheet uh shrunken, you know, he he he understands that we've pumped up the balance sheet in a big way in the last six, seven years and even going back before that.

[00:13:03]Um but he he's also understanding that you know there are reasons why rates can come down even if the economy is doing okay. So, uh, and even if inflation is, you know, not not continuing to go farther south. So, so I don't think he's in any way going to push for higher rates. And although there are guys on the committee that could buck him, I think they're going to, you know, it's a it's a collegial group. Everybody outside of the Fed wants to make it into a battle between Powell and Worsh and two two factions.

[00:13:40]those sitting on the committee are are professional economists mostly um in many of them academic economists.

[00:13:47]They're not they're not looking for a battle. They're they'll they'll express their opinions objectively based on what they see in the economy and inflation and unemployment or or employment. Um but they're they're not going to be playing politics with this. You know, that that's CNBC and the media like to make that into the story. It's really not.

[00:14:10]>> Yeah, very true. And how do you see Kevin Walsh coming in? Do you see him making many big changes to what power is doing or you think it'll be quite consistent with uh with his actions?

[00:14:19]>> I think from a long-term uh standpoint, he he really does want to shrink that balance sheet. you know, that's that's the biggest change I think is that and and you know, the balance sheet which blew up from blew up by five trillion from you know, 4 trillion to 9 trillion back in the early 2020s, you know, in um response to the pandemic. Um now now is back down to six and a half trillion or a little above that. Um and so you know Pal did shrink the balance sheet mostly through runoff. I think Wars will continue that. Um the problem is and I have said this um many times.

[00:15:04]I think macro will trump what he wants to do. In other words, no pun intended, but but um you know, basically next year, if we get what I'm calling for, which is a global deflationary bust, he can think all he wants about the long-term um desire to shrink the balance sheet, get it back to a normalized balance sheet. He's not going to be able to do that in the face of a global bust. So, it might be a long-term goal. Uh and he might even think he's going to be able to do it over the next year. I I think the economy is going to sideline that.

[00:15:39]So So even though I think Wars could be different than Powell in terms of some of his objectives, um I I think ultimately like always, you know, the economy, inflation, employment are going to be the things, the factors. You know, the data is going to kind of dictate what they do. And I don't I I was one that defended Powell through all this. I was not on the side of, you know, he he was too slow to cut or anything. I think I think the Fed's done a pretty good job considering if you step back and look at things going forward, I think the risk is and it would have been the risk if Paul's there, it's going to be the risk if War is there. The risk is that they do kind of have in the, you know, the governor on themselves of fighting the last war. You remember uh all the criticism of the Fed for printing so much money in the two at post 20089 and then printing so much money during the pandemic and that's why I say you know worse wants to shrink that back down.

[00:16:43]That's basically if we're heading into a much weaker global economy um I I my fear is and it would have been a fear no matter who was chairman that they're fighting last war. They're so worried that they shouldn't go back to that policy again that they'll be slow to react when they need to react. You know, there's going to if we get a deflationary bust, that means a big financial crisis. If we have a big financial crisis, it's it's not going to allow for a lot of time. You know, in other words, things are going to unravel quickly. And if the Fed is slow to react because they're saying, "Oh, we don't want to go back there again. We don't want to do, you know, zero interest rate policy again. We don't want to go back to QE infinity. If they're, as a result, if they're slow to react, um, it's going to exacerbate the downturn. And I, like I said, it's it's less about who's on the Fed or who's heading the Fed. It's more about what, you know, what the last uh 15 years has looked like. And I I think it's human nature that they're going to be fighting that war. I mean, Pal during his term um pretty much said, "We'll never go back to QE infinity." You know, we're not going to we're not going to repeat those mistakes of the past. The problem is if you get into a bust, which I define as something bigger than 2008, you have to go back there. You know, it's not by choice, but you have to. And yet if they're reluctant to do it, every week that they delay it is going to exacerbate that downturn. Um so it's, you know, it's less about the personalities, it's more about the the cycle we're heading into.

[00:18:29]>> Yeah, it makes a lot of sense. And I guess that you know, another thing that's coming up at the moment that's uh you know, there's a meeting between uh she and Trump. I imagine you think that could be a sort of maybe potentially a positive catalyst as well. uh it seems like there's not many expectations of what could actually come out of the meeting and if things you know progress that could be very positive.

[00:18:47]>> Yeah, it's pretty much I think it's pretty much uh taken place already and I it seems you're not going to have major things now. China sounds like they may help a little bit behind the scenes with Iran, you know, try to try to encourage them to end this thing and open up the straight. um you know, you've got some, you know, China wants wants us to kind of um go their way on Taiwan. That's not going to happen. You know, we're we're not going to commit to anything there.

[00:19:19]Um and so you're going to get, you know, some some agreements on uh some of the things we each side wants. you know, the rare earths, we want some, you know, some agre, you know, agreement that they're not going to withhold that. Uh, in the meantime, we're going to open up a little bit of our chip um technology to them. You know, we're going to be able to sell they're going to be able to sell some they meaning the tech company sell some chips to to China, you know, Nvidia in particular. Um, and so you're going to get some things on both sides.

[00:19:56]you know, we're going to get a big soybean order. I think um you're going to see I think it was announced that uh China's going to, you know, order 200 of Boeing's planes. uh which is maybe a little bit of a disappointment from what they expected but but um ultimately I think that's what you're going to see is you know trade deals and and kind of an agreement between Trump and she that they're going to try to be less confrontational with each other that the countries can mutually benefit if they're you know a little bit less hostile towards each other. So yeah, uh we'll see. I I don't think anything major came out of this, but again, if it if it helps in ending the Iran situation, that that's that's a good thing.

[00:20:45]>> Hey everyone, thanks again for listening and sorry for interrupting. The podcast has always been about the guests and trying to better understand this crazy world we live in and the geopolitical, macroeconomic, and financial trends that are shaping it. to try and delve deeper into these challenges that we're facing in the world. I've recently started a Substack. My first piece, Reset and Reorder, looked at the strings that bind everything together and what's led us to the situation where we are today. My most recent one, the Mechanalist Restoration, has really delved deeper into China, the Mechanalist reemergence, and what this means for trade globally and everyone in between. If you're interested, I'll put the link down description. Otherwise, thanks so much for watching and let's get back to the show. Yeah. Do you think it can sort of go back to maybe not as far back as what was happening in 2016, but before that it was sort of seems like it's quite cooperative the relationship it was quite friendly. Do you see that things going back that way or you think it's going to continue down this path of increasing hostilities?

[00:21:42]>> I think you'll have kind of a bumpy road because it it's still, you know, China, we still have a huge trade deficit with China. China still is, you know, um not not in the US, but they're selling a lot of Chinese cars at at subsidized prices, you know, much cheaper into Europe and into other places where it's disrupting those those uh industries in their countries. um you know, we're not going to allow that. I don't think here you it's and they you know, we just we just caught a a mayor in our country who admitted to being a spy for China, you know, a Chinese national. So, you know, you've got all kinds of things still going on and that's not going to change.

[00:22:27]you know, they're going to still do their espionage and and um you know, we're still their enemy in some ways and we know we can't trust them. But uh you know, I think there's from an economic standpoint, I think both sides are trying to work, you know, make it mutually beneficial. And frankly, as much as Trump gets criticized for so many things, one thing you can say about him is he yes, he's America first, but his view is if if you know, if we do things um you know, he understands that each country should be looking out for themselves and if we can cooperate on things, it's mutually beneficial and that's what he really wants. And in fact, in the Middle East, that's what he wants. you know, if if Iran can become a, you know, get away from their state sponsored terrorism and become a, you know, a nation in the world again, you know, the Middle East will be the beneficiary. You'll see a lot more trade over their economies much better if they're not focused on, you know, terror. So, um, I I, you know, that's who Trump is. He doesn't want war. He just went in here because, you know, time was running out in terms of their nuclear capabilities. Yeah. Okay. Yeah, I sort of agree with that that it's uh potentially continuing drift and continuing bumpiness in the in the uh near and long term. So, in terms of the markets, obviously, you know, still very bullish. What segments do you think are going to benefit the most? I know previously you've mentioned semiconductors, industrials. Do you still sort of see those as as the big winners or do you see other sectors at the moment?

[00:24:03]>> Yeah, definitely some of these will continue. You know, as much as they're up on stilts, they they have the wind at their back in terms of earnings. what's really driving the parabolic and it's mostly right now it's really the semis and and tech but it's because their earnings are so powerful I mean the demand is through the roof they don't have the the supply to meet the demand so price goes up that's really the story we're going to see next c not to jump around but next cycle in commodities is when demand far exceeds the ability to supply it um the only thing it can give is price and then those corporations in that industry or those industries see their earnings just um sore. So I think that continues uh for you know probably the duration of this year in semis. Uh I am not one that thinks that it goes uninterrupted for the next few years and you hear that a lot. That will be part of what creates a top is that people think this is unending for quite a while. I do think it comes to an end because of where the economy is headed and not just our economy the global economy. Um but for the next several months semis will be a leader um you know the the mag seven will be leading you know all the AI will be strong but also what I think you're going to see which I get a lot of questions about because people are you know you get the statistics saying how much semis are dominating the performance that it's all semis or it's all AI or whatever. Um I think what you're going to see in the coming weeks and months, couple months, um is that the market broadens out. I think financials are going to be very strong in the next couple months. I think um even even things like airlines and housing, if we if the war comes to an end and oil rolls over strong, you know, sharp and deep, all of a sudden you've got the opposite of what's dragged them down is you got lower interest rates which will help housing. Um but you also have lower jet fuel prices. Um, and that'll be a huge, you know, people who are worrying about jet fuel going higher and higher and hurting the airlines and hurting air airline travel are all of a sudden going to go the other way. So, you have the room for big reversals if if things happen. Um, so those, you know, those areas can do well. Um, I think industrials will continue to do well. Uh I think materials is an area that can do well, which it's just kind of beginning to lift its head. I think you'll see materials in the next two or three months do very well. Uh one area that has lifted its head and will continue to do well is copper. You know, the copper um copper's up, I think, now up to um 650 or thereabouts, maybe a little above that. I have an $8 target on that and that's way above anybody else's expectations and I think I'm too low. You know, it's probably probably going to be closer to $9 is my guess.

[00:27:11]But um you know, it's you're you're in a lot of these areas, you're on a roll. Um and uh um you know, that means copper producers should do well. Um, I'm trying to think what other ones, you know, in the financial area, things like stock brokers. Um, you know, whether they be the big ones, the Goldman Sachs and Morgan Stanley's of the world, or whether they be more retail ones like, um, you know, Schwab or uh, IBKR, any of those, I think I think, um, basically brokers should be big beneficiaries of this final stock run. And then on top of that um you've got the banks which I think have good upside here. Um and basically if rates coming down it's going to help the whole financial sector. So um that area will be strong.

[00:28:04]>> A sector that's sort of underperformed quite a lot is SAS. Do you see them coming back or do you think AI will continue to sort of drag the performance?

[00:28:13]>> Which ones? Oh >> yeah.

[00:28:16]>> Yeah. Um I have I use um I think it's IGV is that the one um is software ETF and it it got down to I think 75 in the big selloff when when software was really under a lot of pressure it has reversed it's back up to 80 close to 85 I think when it was down around 75 I put out a target of 110 on it so um it can you know it'll perform perform okay. You know, it's not going to lead like semis have, but it'll have a nice bounce and that 110 is still far below its its old high, you know, the high it had before it rolled over. Um I I think basically you're putting in the top in software, but it got so oversold that there's a room for it to run as the market runs.

[00:29:07]So, um, you know, it's kind of a middle of the road type group right now, but 85 to 110, that's, uh, yeah, it's probably 30% or more. Um, that's not a bad bad move if you get it in the next three months. And then the one one area obviously that I like a lot, one other area is miners, you know, because I think gold and silver have big runs here. As I said, I I raised my gold target 6,800 in a couple steps. You know, I went to 5,500, I think, in my January letter and then 6,800 soon thereafter because of what happened um in in January. Um so I'm at 6,800 on on gold and I'm at 180 on silver. I had raised it from, you know, 100 to 125 in January and then raised it to 180 after after the selloff in in Feb, early February. Um so, and I think you know that you probably know this, there's um there's a couple um estimates out there. One in particular, Michael Oliver, who's calling for $300 to $500 in silver this year. um I can't get there in my work, but I don't rule it out. You know, it's silver's silver's got a lot of upside one way or another, whether it's 180 or whether it's something well above that.

[00:30:30]Um I think silver and and as a result, if the the metals have that kind of upside in the next three to six months, um that means the miners have a lot of upside and I think you're going to see the miners in some kind the silver miners. I have a target on SILJ, which is Junior Silver Miner ETF, um, of 90.

[00:30:54]You know, that's down in the low30s.

[00:30:56]Um, that's almost a triple from here.

[00:30:59]And I've got, you know, GDXJ, I think, is selling in the mid20s, 125, six. Um, and I think that can go to 250. So, that's a basically a double. So, so the miners look strong here. I I think there's a lot of upside there. Selling off today. I actually saw this in the charts. It's a short-term sell off. You could get down to 80 on silver. Um may not go that far. You know, got down to 84, I think, this morning. Um and whether you have, you know, more weakness tomorrow and the next day or tomorrow anyway, or whether this thing reverses from from the lows today, I don't know. But, you know, downside is at most, you know, say four or five dollars and the upside is big.

[00:31:46]>> Have you? Yeah. Have you been surprised by how they haven't really uh reacted to this geopolitical um sort of situation that we've seen? Normally they're seen as a safe haven, but it hasn't seemed to have acted like that.

[00:31:56]>> Yeah, certainly gold normally would be a safe haven. Um it's I think it's because the runup in oil really increases. You know, oil's a big cost factor for mines.

[00:32:09]That's one thing. And number two, um I just think it's it's been a riskon trade, particularly beginning with that December runup. Gold and silver just took off on a riskon move. And so I think they're being they're being viewed just like the equity market was during the correction as riskon trades. And so with with the you know with Iran being the the center stage story uh it became risk off in both equities and in metals. Um obviously equities have reversed here.

[00:32:46]So so have the metals. They're just not they're not at all-time highs yet. They have a long ways to go. I think you'll get there you might get there this quarter even which means the next month and a half. Uh and if not you'll get there this summer. And you might, like I said, you might top by Labor Day.

[00:33:04]Doesn't have to. I my targets are basically this year, but yeah, I wouldn't be surprised if we we have a big run up and get to the highs by Labor Day.

[00:33:15]>> Okay. And then, as you said, that should flow to the miners, and that would be very positive for Yeah. all the gold and silvers. Um, and after you get to the top and Labor Day, do you see aggressive reversal?

[00:33:27]>> Yeah, I mean, I'm just saying it could get there by Labor Day. be very care, you know, I I have to guard against this because people hear a word and then the whole sudden you said it would top by Labor Day. No, I didn't. I said it could happen by then. But um I what I say is and particularly talking about the equity market, tops are a process. Could we go straight up and straight down? We could. More likely what historically what you see is that you get up to a top and then it's a process. you might sell off, you know, five or 10% and then go back up, make a double top, or you might go go back up and not quite get there and then roll over. So, it's hard to say exactly when this thing really rolls over hard. It might be, you know, it could be in the fall. It might be in the winter. Um, it could be, you know, two days after we top. Um, but I I think I can see a top coming in in coming months and and I think in the equity markets, um, certainly could see it this summer. Um, when when that turns into the real selloff where I'm calling for an 80% bare market, it it doesn't mean it's immediate. It might be that you kind of back and forth for a couple months before you roll over. I don't know. I'm not saying that will be it either. it it can take any shape once it makes its stop. So, um but either way, I'm pretty certain that, you know, whether it starts later this year or in 27, 27 is going to be a tough year for equities, for the economy, probably for the metals, um among other things, for certainly for lesser grade bonds. If we go into a global bust, you know, you're going to junk bonds are going to get hit hard. Private credit's going to get hit very hard. Um, private equity is going to get hit hard. Um, real estate's going to get hit hard. You know, it's going to be next year I believe is going to be a 20089 story except maybe worse because of the leverage in the system. You know, meaning in 2008, we had lots of leverage and it caused caused the real problem we had. Our leverage today is so much beyond what it was in 20089. And leverage works both ways. It it leverages your good returns on the way up. It really hits an economy and a financial system hard on the way down.

[00:35:51]So that's why I call this, you know, what's coming, I think, a global bust.

[00:35:56]>> Yeah. And do you see that in private credit or do you see that in all sort of credit markets?

[00:36:02]>> Pretty much across the board. Like I said, other than other than treasuries, treasuries and very high grade corporate where they have, you know, they have total control over their balance sheet.

[00:36:16]Um, they will be maybe okay. Treasuries for sure because of the printing press and the government backing will be one of the assets that could hold up in the in the bust. Most things are going to be down and down hard. You know, depending on, you know, higher grade investment grade corporates won't be down nearly as much as, you know, junk bonds. Uh, private credit will be down because that's, you know, a lot of times credit issues show up when the economy gets weak. So, private credit will have some struggles. Um, I would also say, as I said, private equity will too. Um, and I would also say pension funds are going to have big troubles. you know, the um you know, all their alternative investments are going to hit them and and as well as the equity market as well as um you know, the bond market outside of treasuries. So, it's there once once the tide goes out, you're going to see a lot of hurting boats. You're going to see what's underneath the water.

[00:37:17]>> Yeah. It be interested to see who the government then decides to save cuz you imagine pensions probably financials but then all the shadow banking and private credit and private equity probably gets thrown out.

[00:37:28]my um and again this is just a total guess seat of the pants but I've said for many years if if we get this global bust it could take upwards of $20 trillion in new QE coming out of the Fed and similar amounts around the world from the central banks around the world so it could be you know 50 trillion or more around the world if you're printing 20 trillion of new money um and again we printed five trillion in in response to the pandemic, we printed 3.7 trillion post 20089.

[00:38:04]Yeah. And and the balance sheet in 2008 going into the p into the U great financial crisis was 875 billion. You know, we've gone from 875 billion, which was the largest it had ever been going back to 1913 when the Fed was created and all of a sudden we went to 9 trillion, you know, in 2021 or two. Um it just shows you how we've expanded the balance sheet of the Fed. And I'm saying that you could see it up to 30 trillion um in response to the the bust. If you print that kind of money, you're going to be bailing out a lot of things because you got to find places for that money. You're going to be it's, you know, as I tell people when they say, "Well, where can you park your money to be safe?" And I go, "Treasuries are government guaranteed. They've got the printing press." So, that's one place where I think it'll hold up and probably appreciate during the, you know, because interest rates are going to be falling.

[00:39:01]But, you know, FDIC insured um bank accounts, they'll they'll I guarantee you, I mean, this because of the printing press, I can stay state pretty confidently, they will provide whatever monies are necessary to meet that $250,000 insurance threshold for, you know, bank accounts per institution. So, you're okay at 250 in per institution.

[00:39:28]Um but if you get beyond that or if you're in money market funds that don't have that backs stop etc. If you're printing 20 trillion you can pretty much guess like they did in 2008 they are going to backs stop it you know because the purpose of printing that money is to try to turn the economy around. If you if you save some things and let the consumer just dropped because they lost money in the money market or they lost money in the bank or whatever you've defeated your purpose. So the odds are pretty high that there are going to be bailouts left and right one way or the other. Um but they aren't they aren't sure things. You know I can say that but there's no nothing that says that has to happen. Whereas with treasuries it's pretty much a government guarantee. So there you know the government will back back that. Um and with FDI insurance it's pretty much you know I would feel very confident saying they'll back that.

[00:40:25]So it's the other things that are question marks. But my guess is we thought 2008 was 20089 was a, you know, an amazing period of bailouts and things. This time I think we'll make that look like a small change.

[00:40:41]>> Yeah. In 2008 they bailed out the banks and sort of let the consumer struggle and I don't think they can get away with that again without a social revolution.

[00:40:48]I imagine that would be >> well and they did do things for the consumer just not I think they'll do more this time you know the the not break a buck in the money market that was for the consumer you know that that was there um but yeah the banks were kind of front and center they bailed out the banks um and you know technically they certainly let them go to zero but didn't let them go under um and I think you'll see something similar this time Now overseas it's a different story. You know I think it'll it'll parallel us to some extent but there are different bank laws over there etc. So you know bail bailins may be a bigger deal over there. They've certainly got a precedent for doing that there. I I don't expect bailins here.

[00:41:35]You know it'll like I said I think the government will will step in.

[00:41:39]>> Okay. Super interesting. And what would you say at the moment is your most contrarian uh I guess sort of prediction currently?

[00:41:45]>> I would say it's bonds. I mean, you know, everybody and his brother assumes rates are going up. And I'm I'm calling for not only rates to go down, I'm saying that between now and the end of the year, you might see 3% or below on the 10-year, maybe even two and a half.

[00:42:01]And that um next year, you'll see zero on the 10-year, negative rates on short rates. Uh, in other words, you know, in 2021, I guess it was, rates got down to, uh, maybe it's 2020, rates got down to point4% on the 10-year um, you know, during the pandemic. Um, and everybody's assumed that that's a low water mark on rates, that the bond market had its highs. you know, you saw the secular peak then and I'm saying there's one more higher high in bonds if you go to zero on the 10-year and you know, a quarter or a half on the 30-year and fivey year will be, you know, zero or below. Um that that basically you're making one final bull market top, secular bull market top. This interest rates started their secular bull market in 1981. you know, rates were 15% on the 10-year back then and the 30-year and we've come all the way down. We got down in 2020 and then, you know, backed up here to where we are now, four and a half. Um and I think I think he'll fall to a new lower low below that 04 down to zero and the 10 the 30y year which in 2020 I think got down to uh under one you know it's 08 or nine uh will fall to you know half percent or a quarter percent. Um so it's and and that will mark in my opinion a a final um high in bond market you know secular bull market top in bonds just like I think the coming stock market top will be a a 44year secular bull market top in in the stock market and then I think you know the bust will take us down big time in in stocks and then the recovery following because of all the money printing will give us a big inflation cycle start slow but then it'll pick up speed as we go through the decade and into the next decade and that means you know interest rates will go from zero I think they could go all the way to 20% or higher so um over the course of six or seven years so you know you're gonna you're going to go from a you know finishing touches to a long secular bull market in bonds to a very very nasty the um secular bare market in bonds over the course of the next decade or less.

[00:44:33]>> Okay. Super interesting. So, David, thanks so much for your time today.

[00:44:35]We've covered so much. Um but my last question is what is one message people should take away from the conversation?

[00:44:41]>> Yeah, just uh I would say just be careful. We're in the last stages of this. as exciting as it is and as much as I have numbers way above anybody else on the street, you know, 9500 could soon be 10,000 on the S&P. Um, and that's still, you know, 25% or more away. Um, don't get caught up in this and thinking you're going to hear at the top I'll be turning bearish, but you're going to hear at the top um, people telling you this thing has years to run that this is they'll give you all kinds of good story on AI. They'll give you a good story on, you know, interest rates coming down and oil coming down and that we're kind of in the great new world where you can have your cake and eat it too. You're going to have all kinds of good stories probably in response to the Iran war ending. I think that's going to give us that final spur. And it's going to be hard to argue with the good news. You know, it's it's not going to be easy to sell at the top. So, I just caution people. I think you're months away from a top, meaning could be this summer. Um, just don't get caught up in this and and buy all the the narrative out there that's going to be so bullish at the top because that's how psychology works. At the top, everybody's bullish and all in and at the bottom everybody's bearish as they were in 2022 and all out, um, if you can reverse that and understand that the so-called experts get caught in the tape too, um, you'll be better off. So, >> yeah, great message. So, thanks again.

[00:46:15]If anyone wanted to find out more about your work and what you do, where would the best place for that be?

[00:46:18]>> Um, sure. I'm on uh Twitter or Rex every day. Um, I'm generally replying to people there. So, you should see commentary every day. It if you don't see me on there, I might be away for a day or a few days or something, but generally every day I'm I'm replying to people. If you're not seeing it, that probably has more to do with your settings than it does uh anything else.

[00:46:42]So um look for me there. I also write a quarterly investment letter that is by subscription. If anyone is interested, they can direct message me via X chat and I'll pro provide um details about the subscription.

[00:47:00]>> Perfect. Great. I'll put that all in the description below. But thanks for your time.

[00:47:03]>> Okay. Thanks Anthony.

[00:47:05]>> Hey everyone. Thank you so much for listening. Really appreciate your support and I hope you found amazing value out of this interview. If you really enjoyed it, would appreciate if you liked and subscribe or share. Uh it really helps with the podcast. We're still trying to expand, get to more people to help make sure that everyone understands and decode what's really happening in the world of finance, investing, macroeconomics, and geopolitics. If you enjoyed this one, then you might enjoy this other interview as well. So really appreciate it and thank