Bill's thesis of bonds selling off in spite of the Fed lowering interest rates has been spot on. He's a great mind on the macro, thanks for having him on again!
but then why did bond yields fell and prices went up during 2024. To me personally this more looks like a wait-for-data situation like at the end of 2023 but we shall see.
@@drscopeify Bonds, as measured by the TLT etf finished 2024 lower than they started the year in January (price down, yield up). The Fed just started lowering rates in September, and you can see since that point the yield on the longer end (like TLT), has gone up. So while it's early yet, this is how Fleck has thought the bond market would begin taking away the printing press.
If you overlay FEDFUNDS on US02Y, US10Y, and US30Y you'll see that the fed almost always chases rates up then rates chase the fed down with a lag. The longer the duration the longer the lag. To say after just a few months this time is different is premature imo, but I guess it makes for good headlines.
Oh good for you !!!! I tell people all the time. The FED being in charge is an illusion. They just follow the 2 year yield on a lag. Which is why they are always late. The 2 year yield is going up not down... they are going the wrong way. We should just get rid of the FED and reset the overnight rate at whatever the 2 year yield is sitting at once a month. But then that would take away the buyer of last resort of treasuries (paying a credit card off with another credit card) and we know the govt like to spend and move digits around. I think it gets us into trouble. I also think that how we delt with the GFC, the at or near zero rates for 15 years, and how we dealt with COVID is going to come back and bite us in the ass. WE have to pay for all that nonsense. It is going to be painful. That 10 year yield going up and keep on going up is very concerning if you are a bull. I knew this was going to happen. i was telling freinds and family over a year ago we will know when the wheels are about to fall off when the Govt tries to do any QE (rate cuts, money printing, stimis, loan forgiveness etc) and the rates go up not down... like they usually do. Add the yield curve 3 month / 10 year uninverting and the huge bubble and huge debt. We are right on the edge of the cliff which one foot in the air. It takes but a breeze to send us over the side. The govt will be too broke to bail anyone out. That FED Put... it is dead. I worry for folks.
That was one of the very best interviews ever! I really enjoyed listening to him go down memory lane about the 1980's. Will listen to a replay of this. Thank you Adam.
Very clear argument: Debt-to-GDP 1981 was 31.8%. Today, 123.1%. If a $100K income household has $31,800 in debt, I would gladly give them a loan at prime rate. If that $100K income had a debt of $123.1K, and the analysts at my bank all expected recession, I would want a decent yield premium above prime. Recession means falling tax revenue and even greater fiscal deficit than we have now, which don't bode well for ROI.
From my heart to yours, I have less and less faith in the markets because of the divisions amongst us in literally everything. Yes,as a result I am certainly shorting most assets except in self preservation!
Thank you, gentlemen. The scary thing is that Bill is absolutely right. The bond market is the only thing that will stop runaway government spending. The piper will be paid.
This economic mess that the United States is in cannot be fixed without major pain. Each person in the United States is indebted to the federal government for over $100,000, that's for every man woman and child. In order to fix this we're going to have to go into a major depression for a long long long long long long long long time. And there's going to be a lot of suffering. There is no way around this. It's simple mathematics.
I couldn't agree more, with the inclusion that printing money to delay the inevitable has done horrendous damage to this next generation of investors due to the "buy the dip" mentality. They have been trained that "number go up", when in the future, they'll buy the dip, when it doesn't. We definitely need to bring bankruptcy back if just to put caution back in the market.
Maybe 10-15-20 years from now, but for the next 10-15 years, we still have a lot of debt ceiling to create. Debt buys time. Debt pushes up asset values (by enriching the debt holders - the very top classes - who re-invest in assets). These debt-holders effectively own the FED, executive branch, legislative branch, and high court (oligarchy). Because of this, there will be no depression for a long, long time, and the asset markets will continue to rise, with an occasional 10-20% dip, followed by a long debt-fueled bull run. It's all about who's in control of policy, and that ain't the middle-class. The middle is walking dead. They weren't smart enough to reject supply side policies in 1980, and still aren't. Ha, the middle class thinks their ever-worsening socioeconomic plight is because of immigrants, commies, gays, and baby killers. Hilarious. So stupid. The ultra-wealth oligarch class has done an amazing job at obfuscating their complicity, and have painted themselves as heroes! The middle voted the oligarchy into the greatest levels of power they've ever held. Hahaha. Breathtakingly genius.
12:30 Yes! But there will be out-flows. A down turn of 15% will be the edge, then flight of capital, for a 40% drop. Who knows, maybe more? I don’t know
a hypothetical here: imagine as the bigger markets around the world start going down because of their economic issues become prevalent. players from those markets (india, europe, hong kong, etc) will look around and see the US markets holding up relatively better than the rest of the world. As Bill said, fundamentals dont matter (now). Said players only have to allocate 15-25% of their portfolios to the US markets and that can still end up giving us a blow off top. at which point not only would the US investors be "trapped" at nosebleed valuations but also the global investor would be more allocated to the US markets. thats when there is no one else to sell to and the market collapses under its own weight.
My honest opinion is that smarter money doesn't go from one failing market to high risk equities in another. They go to safe and liquid. E.i. government bonds. Best example is China, government bonds are being absorbed at record rate by the largest banks and biggest players.
Well said. I think if we are not at the top...we are very close. I am not going long anything except energy... Energy is out of favor and cheap. Oil and nat gas are at multi year lows. That is a very long trade... years out .... like 10 years.
Or as their economies unwind they pull capital back to keep their own heads above water. IMO, human nature is to pull capital back to save ones own ass.
I agree with Bill Looks like its' already happening in the UK Fantastic discussion Excellent analysis Thank you Sir I always love listening to you Adam Thank You Gentlemen Thank you Adam, you are waking up and educating a whole generation
You guys are the greatest. Thanks for the update. Age 71 and retired looking for guaranteed returns and little risk. Purchased some 20 year 4.5% bonds at a discount. Thanks.
Love Lacey also but as your friend says simularly; Bond guys have to think Inflaton will be in a box. Look, we broke the down trend I believe in 2021. I can't unsee that break.
I tell people often to pull up a long term chart of the 10 year yield. Weekly chart is just fine. Draw a trend line.... It is very apparent that we have broken the 40 year down trend and we are now up trending... which means money is no longer free or almost free, and is most likely just going to get more expansive as we go forward. And with all these debts and all these zombie compaines and all the underwater real estate (espeically CRE). I think the bubble pop and people lose at least half. There is nothing that is going to be safe, not stocks, not bonds, not gold, not BTC, not real estate nothing. Diversification is not going to save anyone. The only 2 things I think will do okay or even well is commodities, and energy (oil and nat gas). Those that know how to short safely and how to time it correctly will rule the world. Investors ... those buy and hope it goes up are at great risk. I mean the big crashes too over 20 years to get to just break even. If you are 40 years or older that is it... you have to go back to work. No way would I risk that... if you are 20 or 30... you keep buying... and buy even more the more it crashes.
Detective of money politics is following this very informative content in my holiday time off cheers from vk3gfs and 73s from Frank from Melbourne Australia
pet peeve...you're not "begging the question", you are raising a question..."begging the question" is a fallacy that occurs when an argument assumes the truth of its conclusion within its premises, essentially using the point you're trying to prove as evidence for itself, creating a circular reasoning loop where no actual proof is provided.
Agree and the bond market not letting the Govt drive the dollar to zero. We lost 40% of the dollars purchasing power in just the last 7 years. Bonds are valued in dollars. The Bond market is gong to have something to say about it... which is why 3 cuts and the yields surged higher... much higher. I think we just stared the first stage of stagflation... which is the worst possible outcome. That happened because Powell was trying to be cute. He should have slammed the breaks on very hard and crushed inflation and even had a period deflation... but he didn't he was wishy washy... and he is no Volker. And that means America is most likely going to have a really tough 10 years ahead of it. And it will drag the whole rest of the world with it.
Perhaps it’s the value of the dollar shrinking rather than the increase in the value of stocks… real stuff… hard assets are becoming more valuable whether in a futures contract or a stock certificate… buybacks create scarcity as does taking delivery
Thinking the reverse repo theory through further. The safest reverse repo would be one based on the 30-year treasury bond. Instead of the situation today where the bills seem the safest. The longer the duration the more valuable the bond asset would be as it would take longer for them to mature out of existence. I'm not an expert so I don't know what's the duration are the repo contracts are. I would guess they are very short term?
Bill is not my favorite and I have been watching him since 2008 or so. If there's a $500 billion cut in federal outlays, don't you think that will have an effect on long term interest rates? I do. The possibility of a virtuous cycle is real. Also I'm with Michael Lebowitz in that what matters is Debt to GDP. Mention to Bill to give his position more thought. I think he's incorrect.
2000 was when this could have been fixed. A quarter of a century ago. By 2008 the geni was out of the bottle. All that can be done now is watch it play out.
How do you turn around local municipality inflation in local property taxes, insurance, hoa fees, water utilities, electric and gas prices...these entities never reduce their tariffs
It's probably completely overblown, yields went up between October 2007 and January 2008 as well. He's right that the bond yields go back down when stocks crash and that'll happen soon
Thank you, Bill....Economists are so far in with their graphs, charts, data, etc. that they don't see the psychology of the people that are outside of their boxes. When you have investors thinking with their emotions or expecting something for nothing like money printing, what plays out doesn't jive with economic fundamentals. That is why economist get their predictions wrong over and over again. Bill is the few remaining people I can rely on now.
I don't know how long it would take if all he has to say is you're fired grab your things you're done unless every time he does that they're able to take him to court then nothing will get done but I don't see how somebody can take him to court for just being fired
The biggest market is R.E. residential, commercial and office. How can anyone predict the financial future without factoring in what will happen to Real Estate?
FOLKS, If you were impressed by this interview as I was, a lot of great points, items to track/etc, read the Exec Summary that Adam wrote, it was a great read - I copied it to provide me with a reference doc., cause in 24 hrs I will forget most of the great points Bill highlights - suggest Y'all do the same -- IMO, thanks Adam/Bill, another great show - Happy New Year and best wishes to both of you --
Exactly. The bond market is everything. One just needs to pull up a weekly chart of the 10 year yield (where the big boy and girls play)... it has broken out of a 40 year down trend and is now up trending. Which means money is no longer free like it has been for the last 40 years. And that is all we need to know... especially with the crazy high valuations in stocks and massive debt load everyone (personal, cooperate, and govt) are carrying. I think it end horribly. Thoughts?
The Market Sniper has shown how the bind market is not what it used to be and to stay away. Even TLT will stair step down more into the future. Gold and Silver will be the safe haven play the next decade. Just like the 2000s. Another capital Rotation event is starting this year just like the early 2000s.
China has been dumping Treasuries for the past 2 years due to their own liquidity problems. Also, rampant speculation in equities ha drained money out of bonds. Powell said in no uncertain terms that the Fed would be curbing their holdings of securities and bonds in an attempt to reduce their balance sheet. In hindsight, it shouldn’t come as a surprise that the long end of the bond market rates have risen. Every time the bond market had been inverted then normalized, the economy has entered recession within 18 months.
I wonder if Trump will set bond yields at a fixed rate and force pension funds, hedge funds and huge financial institutions to buy a certain percentage as part of his MAGA policy. I think financial repression is the only way out of this without tanking the bond and dollar markets!!!
bill’s smart. and his analysis seems spot on. just because lags between coomon sense and mass delusion are long and variable doesnt mean sense wont win in the end
The passive bid ends when the tipping point hits for automatic investment for retirement accounts due to decreasing employment (very poorly worded I know).
The milkshake theory basically holds that there simply aren't enough US dollars created to keep up with the rising demand. And when the greenback rises high enough and fast enough to lead to defaults abroad, the demand for dollars swirls up and its supply shrinks, leading to an epic squeeze higher. I don't agree with this. I think people want less not more US Dollars think BRICS and think 2 of the 3 buyers of our debt (Japan and China) are now net sellers not net buyers of US Treausies (dollars). I think what happens next is some type of QE happens and the rates go up not down (oh wait that just happened)... that leaves the govt two choices. 1. They can try to print (do QE in any form) the bond market smacks them back down... or 2. They can raise rates and we default on the debt. We are stuck and Powell knows it... he is scared shitless and he should be. There is no good way out of it now. But say the milkshake theory is correct and the FED gets away with printing (QE of any sort) that just causes hyperifnation and even more price rejection (prices are already way too high) If Infation had not erroded 40% of our purchasing power in the last 7 years well I would agree with that theory. I don't think people (consumers) can handle much more increase in prices. Everyone is crazy broke even if they haven't figure it out yet. Thoughts?
The fed just follows rates. That's why the cut. The 2 and 10 year rate was falling. The fed cut to follow. The market sold the news. The fed now waits until the market rates start coming back down. But we need weak data to come out OR something that causes the stock market to come down. This is why the fed is always late. Go back and look at the 2 year right before inflation. The 2 year rate started moving up. The fed started raising rates to follow
Nah. All assets are on a long rising trajectory. For many more years, maybe 10-15 years. Why? Because we still have a lot of debt ceiling to create. Debt buys time. Debt pushes up asset values (by enriching the debt holders - the very top classes - who re-invest in assets). These debt-holders effectively own the FED, executive branch, legislative branch, and high court (oligarchy). Because of this, the asset markets will continue to rise, with an occasional 10-20% dip, followed by a long debt-fueled bull run (the dips give permission to the FED to print more QE). It's all about who's in control of money policy, and that ain't the middle-class. The broad middle (130M souls) is walking dead. They weren't smart enough to reject supply-side policies in 1980, and still aren't. Ha, the middle class thinks their ever-worsening socioeconomic plight is because of immigrants, commies, gays, and baby killers. Hilarious. So pathetically stupid. The ultra-wealth oligarch class has done an amazing job at obfuscating their complicity, and have now painted themselves as heroes (Musk, Doge, etc)! The middle class just voted the oligarchy into the greatest levels of U.S. power they've ever held. Hahaha. Breathtakingly genius. Hats off to the oligarch-controlled media for creating one of the greatest fictional socioeconomic narratives in human history.
Jimmy Carter, in his last interview, said this, "[Unlimited money as political speech] violates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members. So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favors for themselves after the election’s over. The incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves. Somebody’s who’s already in Congress has a lot more to sell to an avid contributor than somebody who’s just a challenger.”
In my view the Bond market is just sitting on the sidelines waiting for data - a new trend I think will form and will expose that bonds have formed a double bottom play. My theory is bonds are conducting a double bottom from late 2023 we had the first bottom and now at play is the second bottom. We shall see how this all plays out but that's my view anyway. The talk about long term, inflation and debt and Trump I think is really a more fine tweaking of numbers in the long run but that the current situation is a short term move, that's my view.
Yield control incoming. 😢😢😢. Also in addition to passive bit you c Have companies buying their own stock which was illegal as manipulation of true stock price and way to funnel money to corp insiders. 😢😢😢
Curious ... how does the govt pull that off? Espeically with the debts so high, inflation erroding 40% of the dollars purchasing power in the last 7 years, and the bond market revolting. If the FED come in as buyers of last resort because no one want to buy US Debt... that make the yields go up even higher. WE are out of room. Powell know it. Bonds are priced in dollars the bond market is not going to let the Govt drive the dollar to zero without of fight. Do you see this differently?
@ most of the bond market is owned by US banks and regulated by the Federal Government. The just tweak the regulations requiring banks to purchase only Treasuries at the offered price. Then Treasury just sets the rates at 0 or whatever number they want. Most treasury demand is domestic now anyway.
First thing you need to balance budget and who you need to help you would be Newt Gingrich. We let Doge try to get to its 2 trillion dollar Target gold to its true fundamental value taking all the gold that we have and divided by all the debts and deficits on and off balance sheet. And that will be a good blueprint
well if we look at the great infaltionary period of 1968-1982 as a guide, it will need to go much much higher. My dad in the 80s had a mortgage rate of 18%. anything above 5% the stock market crashes. all the bubble pop and we go into a massive deflationary period. But before we get that I think we get stagflation that leads us into it. I think that has already started. Thoughts?
hi Adam. Many of your videos are over 1 hours. I've stopped watching because of this reason. Just a suggestion most videos don't need to be more than 20 minutes long. Just a thought.
You might have what they call attention disorder. this is caused by too much content... too much tick tock... Face book, you know instant gratification. Maybe stop surfing and scrolling so much and read books instead. Then a 1 or even 2 hour video will not be too much. Some things take a longer time to explain that we would like but it is necessary. Just a suggestion. If you stop scrolling (maybe that is not your problem at all ... maybe you just hate long video)... but if it is, you will feel much better. I stopped watching main stream media and all social media except YT 20 years ago. I read 2 books a week on avearge. I feel much better for it. Just a suggestion.
Help! I cannot seem to find a money market fund whose assets consist exclusively of reverse repos. If the zealots in the Congress can't or won't lift the debt limit and the treasury actually defaults this time does reverse repos might still be paid off the Federal Reserve apparently has the legal right to continue endlessly printing money buying back those reverse repo assets. It's just a theory of mine that I haven't been able yet to get confirmed. If that is the case, treasuries wouldn't be the safest financial asset in the world it would be the Feds obligation to repurchase those assets which would at least be temporarily and default. 😢😮
All these people do is make guesses. The idea bonds may keep going up and cause stocks to crash is the same theme we've been hearing for years. When will these talking heads adjust their expectations based on reality? Bond yields don't matter as much as they think they do.
Serious question, what should everyone's expectations be? I definitely think interest rates matter less than a healthy, sustainable underlying system but high interest rates should eventually impact a highly indebted system
The US economy is built on an economy that needs record low interest rates to function. Its called a post industrial high finance economy. If you think low interest rates are sustainable you’re an idiot. The entire economy in the western world is unsustainable. The world is going multipolar period. The US either accepts that or we suffer a long term catastrophic soviet style collapse. If you don’t think it can happen to us, you have no clue what’s going on in the geopolitical global landscape. Our competition now has bigger and better nukes than us. Pay attention.
I am at the beginning of my "investment journey", planning to put 385K into dividend stocks so that I will be making up to 30% annually in dividend returns. any good stock recommendation on great performing stocks or Crypto will be appreciated!
As a newbie investor, it’s essential for you to have a mentor to keep you accountable. Ruth Ann Tsakonas is my trade analyst, she has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
I managed to grow a nest egg of around 120k to over a Million. I'm especially grateful to Adviser Ruth Ann Tsakonas, for her expertise and exposure to different areas of the market.
I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $200k passively by just investing through an advisor, and I don't have to do much work. Inflation or no inflation, my finances remain secure. So I really don't blame people who panic.
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how would you recommend i enter the crypto market? I am also looking at studying some traders and copying their strategy rather than investing myself and losing money emotionally. What's your take on this approach? and How can i reach her, if you don't mind me asking??
I really want someone to give me a good definition of "Woke"... I can't seem to find one and MAGA folks I know don't really want to talk about it when I ask. Can anyone help me?
@ well it’s been used by black Americans since the 1930’s to draw attention to social injustice, J Powells top priority, obviously. Conservatives generally use it to mean “things we don’t like”.
@@bpb5541 his brain is depressing his performance instead of waiting for the charts to confirm his thesis he is saying the chart is wrong or i want in early bec i am right
I’m sorry, I can’t take financial analysis seriously from a person that doesn’t have the critical thinking and data analysis skills to know RFK Jr. is wrong and crazy for the most part.
With all due respect what have prior yahoos in RJK hour role done for our country??? The answer would be nothing other than being one of the most unhealthy cultures on the planet! Wake up!
Good luck to Lacey Hunt😂🤣 He fails to consider many factors that run the global mkts😂🤣like the stonk mkt has no impact on how bonds trade😂🤣he sweeps everything under the Velocity carpet😂🤣& thinks ED system is not as significant & any disparity is taken care of by Velocity😂🤣 Velocity is a plug & is neither dynamic nor observable in real time😂🤣 God help the zombies 😂🤣
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Bill's thesis of bonds selling off in spite of the Fed lowering interest rates has been spot on. He's a great mind on the macro, thanks for having him on again!
but then why did bond yields fell and prices went up during 2024. To me personally this more looks like a wait-for-data situation like at the end of 2023 but we shall see.
@@drscopeify Bonds, as measured by the TLT etf finished 2024 lower than they started the year in January (price down, yield up). The Fed just started lowering rates in September, and you can see since that point the yield on the longer end (like TLT), has gone up. So while it's early yet, this is how Fleck has thought the bond market would begin taking away the printing press.
If you overlay FEDFUNDS on US02Y, US10Y, and US30Y you'll see that the fed almost always chases rates up then rates chase the fed down with a lag. The longer the duration the longer the lag. To say after just a few months this time is different is premature imo, but I guess it makes for good headlines.
Oh good for you !!!! I tell people all the time. The FED being in charge is an illusion. They just follow the 2 year yield on a lag. Which is why they are always late. The 2 year yield is going up not down... they are going the wrong way. We should just get rid of the FED and reset the overnight rate at whatever the 2 year yield is sitting at once a month. But then that would take away the buyer of last resort of treasuries (paying a credit card off with another credit card) and we know the govt like to spend and move digits around. I think it gets us into trouble. I also think that how we delt with the GFC, the at or near zero rates for 15 years, and how we dealt with COVID is going to come back and bite us in the ass. WE have to pay for all that nonsense. It is going to be painful. That 10 year yield going up and keep on going up is very concerning if you are a bull. I knew this was going to happen. i was telling freinds and family over a year ago we will know when the wheels are about to fall off when the Govt tries to do any QE (rate cuts, money printing, stimis, loan forgiveness etc) and the rates go up not down... like they usually do. Add the yield curve 3 month / 10 year uninverting and the huge bubble and huge debt. We are right on the edge of the cliff which one foot in the air. It takes but a breeze to send us over the side. The govt will be too broke to bail anyone out. That FED Put... it is dead. I worry for folks.
Very good guest!!!
That was one of the very best interviews ever! I really enjoyed listening to him go down memory lane about the 1980's. Will listen to a replay of this. Thank you Adam.
Great convo. Nice to see Bill likes PCT Pure Cycle long too.
This is exactly the video I wanted to watch today. Thanks for knowing what I wanted before I did!
Thanks for giving us Bill Fleckenstein.
Very clear argument: Debt-to-GDP 1981 was 31.8%. Today, 123.1%. If a $100K income household has $31,800 in debt, I would gladly give them a loan at prime rate. If that $100K income had a debt of $123.1K, and the analysts at my bank all expected recession, I would want a decent yield premium above prime. Recession means falling tax revenue and even greater fiscal deficit than we have now, which don't bode well for ROI.
Like the way Bill thinks. Very useful ideas. Thanks Adam.
i just luv listening to the sages - thank you TM♥
Have subscribed for years. Always thought provoking. Good interview
I enjoy when Bill speaks ,I agree with lot of what he says and btw learn a lot from his macro view .
Thanks Adam 😊
Thanks Adam for bringing us this great content great guest once again God bless you both stay safe and well
From my heart to yours, I have less and less faith in the markets because of the divisions amongst us in literally everything. Yes,as a result I am certainly shorting most assets except in self preservation!
Incredible video!!! Been waiting to see Bill’s thesis play out! Historical moment!!
I'm old enough to remember when Bill Fleckenstein predicted the 2000 crash.
Thank you, gentlemen. The scary thing is that Bill is absolutely right.
The bond market is the only thing that will stop runaway government spending.
The piper will be paid.
What's to stop the Fed from QE-infinity?
@@boggy7665 Hyperinflation might be a problem for them.
How? Raise to 8-9%? That will last till the water gets hot.
The economy will go into a tailspin, forcing the FED to restart QE.
The most passionate original critical thinker on this show
Fleck is the maan!
“Bonds leak til stocks tank” - by the legendary Fleck.
This economic mess that the United States is in cannot be fixed without major pain. Each person in the United States is indebted to the federal government for over $100,000, that's for every man woman and child. In order to fix this we're going to have to go into a major depression for a long long long long long long long long time. And there's going to be a lot of suffering. There is no way around this. It's simple mathematics.
I couldn't agree more, with the inclusion that printing money to delay the inevitable has done horrendous damage to this next generation of investors due to the "buy the dip" mentality. They have been trained that "number go up", when in the future, they'll buy the dip, when it doesn't. We definitely need to bring bankruptcy back if just to put caution back in the market.
I agree that there will be lots of pain for an extraordinarily long period of time.
You are 100% spot on. Unfortunately no one wants to accept the reality
Maybe 10-15-20 years from now, but for the next 10-15 years, we still have a lot of debt ceiling to create. Debt buys time. Debt pushes up asset values (by enriching the debt holders - the very top classes - who re-invest in assets). These debt-holders effectively own the FED, executive branch, legislative branch, and high court (oligarchy). Because of this, there will be no depression for a long, long time, and the asset markets will continue to rise, with an occasional 10-20% dip, followed by a long debt-fueled bull run. It's all about who's in control of policy, and that ain't the middle-class. The middle is walking dead. They weren't smart enough to reject supply side policies in 1980, and still aren't. Ha, the middle class thinks their ever-worsening socioeconomic plight is because of immigrants, commies, gays, and baby killers. Hilarious. So stupid. The ultra-wealth oligarch class has done an amazing job at obfuscating their complicity, and have painted themselves as heroes! The middle voted the oligarchy into the greatest levels of power they've ever held. Hahaha. Breathtakingly genius.
Everybody agrees. Just...when? Tomorrow, next week, next year, 10 years?
12:30 Yes! But there will be out-flows. A down turn of 15% will be the edge, then flight of capital, for a 40% drop. Who knows, maybe more? I don’t know
a hypothetical here: imagine as the bigger markets around the world start going down because of their economic issues become prevalent. players from those markets (india, europe, hong kong, etc) will look around and see the US markets holding up relatively better than the rest of the world. As Bill said, fundamentals dont matter (now). Said players only have to allocate 15-25% of their portfolios to the US markets and that can still end up giving us a blow off top. at which point not only would the US investors be "trapped" at nosebleed valuations but also the global investor would be more allocated to the US markets. thats when there is no one else to sell to and the market collapses under its own weight.
My honest opinion is that smarter money doesn't go from one failing market to high risk equities in another. They go to safe and liquid. E.i. government bonds. Best example is China, government bonds are being absorbed at record rate by the largest banks and biggest players.
@@justinsweet2232 gold would be the better alternative.
Well said. I think if we are not at the top...we are very close. I am not going long anything except energy... Energy is out of favor and cheap. Oil and nat gas are at multi year lows. That is a very long trade... years out .... like 10 years.
Or as their economies unwind they pull capital back to keep their own heads above water. IMO, human nature is to pull capital back to save ones own ass.
I agree with Bill
Looks like its' already happening in the UK
Fantastic discussion
Excellent analysis
Thank you Sir
I always love listening to you Adam
Thank You Gentlemen
Thank you Adam, you are waking up and educating a whole generation
You guys are the greatest. Thanks for the update. Age 71 and retired looking for guaranteed returns and little risk. Purchased some 20 year 4.5% bonds at a discount. Thanks.
Love Lacey also but as your friend says simularly; Bond guys have to think Inflaton will be in a box. Look, we broke the down trend I believe in 2021. I can't unsee that break.
I tell people often to pull up a long term chart of the 10 year yield. Weekly chart is just fine. Draw a trend line.... It is very apparent that we have broken the 40 year down trend and we are now up trending... which means money is no longer free or almost free, and is most likely just going to get more expansive as we go forward. And with all these debts and all these zombie compaines and all the underwater real estate (espeically CRE). I think the bubble pop and people lose at least half. There is nothing that is going to be safe, not stocks, not bonds, not gold, not BTC, not real estate nothing. Diversification is not going to save anyone. The only 2 things I think will do okay or even well is commodities, and energy (oil and nat gas). Those that know how to short safely and how to time it correctly will rule the world. Investors ... those buy and hope it goes up are at great risk. I mean the big crashes too over 20 years to get to just break even. If you are 40 years or older that is it... you have to go back to work. No way would I risk that... if you are 20 or 30... you keep buying... and buy even more the more it crashes.
Great programme today thanks. Yes i do think mag7& bitcoin are now household names and very much the bubble 👍
very good analyais of interest rates.
Spot on Bill!!
The risk of default is real… it’s the policy makers that need to change
Detective of money politics is following this very informative content in my holiday time off cheers from vk3gfs and 73s from Frank from Melbourne Australia
pet peeve...you're not "begging the question", you are raising a question..."begging the question" is a fallacy that occurs when an argument assumes the truth of its conclusion within its premises, essentially using the point you're trying to prove as evidence for itself, creating a circular reasoning loop where no actual proof is provided.
Were you that annoying pedant in my sophomore English class? ...
Buy Silver , Platinum , & Crystalized Osmium .
And weps and good pot.
Perhaps it is a lack of confidence in the US’s ability to pay it’s debt
I have 100% confidence the us won’t default on its debt.however the dollars it pays out may not be worth a whole lot.
Agree and the bond market not letting the Govt drive the dollar to zero. We lost 40% of the dollars purchasing power in just the last 7 years. Bonds are valued in dollars. The Bond market is gong to have something to say about it... which is why 3 cuts and the yields surged higher... much higher. I think we just stared the first stage of stagflation... which is the worst possible outcome. That happened because Powell was trying to be cute. He should have slammed the breaks on very hard and crushed inflation and even had a period deflation... but he didn't he was wishy washy... and he is no Volker. And that means America is most likely going to have a really tough 10 years ahead of it. And it will drag the whole rest of the world with it.
Perhaps it’s the value of the dollar shrinking rather than the increase in the value of stocks… real stuff… hard assets are becoming more valuable whether in a futures contract or a stock certificate… buybacks create scarcity as does taking delivery
I agree. Private equity and big corps are snarfing up public companies, they are becoming scarce. Hence the PE ratio has to stay higher forever.
Yes, of course. But the P/E ratio normalizes the transaction. Yes?
Ask fleck if he learned to hit topspin on his forehand. He really is a good tennis player, just old fashioned forehand. Australian open pick??
Interesting theory
Question. How are bond ladders doing now?
Rates went up after the Fed, started cutting in 2007 up until late summer 2008... This has happened before
Thinking the reverse repo theory through further. The safest reverse repo would be one based on the 30-year treasury bond. Instead of the situation today where the bills seem the safest. The longer the duration the more valuable the bond asset would be as it would take longer for them to mature out of existence. I'm not an expert so I don't know what's the duration are the repo contracts are. I would guess they are very short term?
So back up the truck for long bonds later in the year?
Everybody that has had shot after shot has gotten just as ill as me who's had zero.
Bill is not my favorite and I have been watching him since 2008 or so. If there's a $500 billion cut in federal outlays, don't you think that will have an effect on long term interest rates? I do. The possibility of a virtuous cycle is real. Also I'm with Michael Lebowitz in that what matters is Debt to GDP. Mention to Bill to give his position more thought. I think he's incorrect.
i have enjoyed Fleck's comments for 25 years now. He had some great commentary after the 2000 collapsed, Glad he is still at it
2000 was when this could have been fixed. A quarter of a century ago. By 2008 the geni was out of the bottle. All that can be done now is watch it play out.
How do you turn around local municipality inflation in local property taxes, insurance, hoa fees, water utilities, electric and gas prices...these entities never reduce their tariffs
Flecks been wrong from day 1
Trump taking office works to the benefit of doom sayers.
There is only reason long rates are up 1% since Sept, and that reason is orange
While not an orange fan at all. I think he and his tech wizard make it much worse.
Nah, it is simply the debt and debasement of our currency
Adam, respectfully request how to cash out US Treasury Bonds?
Treasurydirect.gov.
I’ve dealt with them once and they were very helpful. P
Also, some larger banks are able to cash US Treasury bonds.
So Bill's call is full port shorting long bonds?
My call is to short if you have the skillset to do it safely and know how to time the market.
It's probably completely overblown, yields went up between October 2007 and January 2008 as well. He's right that the bond yields go back down when stocks crash and that'll happen soon
Thank you, Bill....Economists are so far in with their graphs, charts, data, etc. that they don't see the psychology of the people that are outside of their boxes. When you have investors thinking with their emotions or expecting something for nothing like money printing, what plays out doesn't jive with economic fundamentals. That is why economist get their predictions wrong over and over again. Bill is the few remaining people I can rely on now.
Cutting government services is not the same as cutting government waste
All govt services are waste.
I disagree, government services are waste, granted not the only waste.
Well said !!!
Right. Because “only” 99.99% of Gov services are wasteful. smFh
I don't know how long it would take if all he has to say is you're fired grab your things you're done unless every time he does that they're able to take him to court then nothing will get done but I don't see how somebody can take him to court for just being fired
Fleck is the Best!❤ I do Hope that he finally bought hilmself some Bitcoin ! 😊
The biggest market is R.E. residential, commercial and office. How can anyone predict the financial future without factoring in what will happen to Real Estate?
FOLKS, If you were impressed by this interview as I was, a lot of great points, items to track/etc, read the Exec Summary that Adam wrote, it was a great read - I copied it to provide me with a reference doc., cause in 24 hrs I will forget most of the great points Bill highlights - suggest Y'all do the same -- IMO, thanks Adam/Bill, another great show - Happy New Year and best wishes to both of you --
BILL BILL BILL BIL!.
The bond yields are the whole story! I agree they know less than they say, but bonds /govt n corp are the life of the markets
Exactly. The bond market is everything. One just needs to pull up a weekly chart of the 10 year yield (where the big boy and girls play)... it has broken out of a 40 year down trend and is now up trending. Which means money is no longer free like it has been for the last 40 years. And that is all we need to know... especially with the crazy high valuations in stocks and massive debt load everyone (personal, cooperate, and govt) are carrying. I think it end horribly. Thoughts?
"In a social democracy with a fiat currency all roads lead to inflation." (Bill Fleckenstein, 1999)😊
And infaltion ends with the collapse of the currency of the govt defaulting. He forgot to mention that.
keep saying it every year and one time he will be correct
I agree the market will correct but Bill mentioned 10-15%. We need a minimum of a 50% correction
I am calling for a 65% cash but am hopeful for at least a 75% crash. 85% would be optimal. Now we wait.
The Market Sniper has shown how the bind market is not what it used to be and to stay away. Even TLT will stair step down more into the future. Gold and Silver will be the safe haven play the next decade. Just like the 2000s. Another capital Rotation event is starting this year just like the early 2000s.
I have been subscribed to Fleck for decades... and it is the only investment letter I read Every Single Time it comes out.
China has been dumping Treasuries for the past 2 years due to their own liquidity problems. Also, rampant speculation in equities ha drained money out of bonds. Powell said in no uncertain terms that the Fed would be curbing their holdings of securities and bonds in an attempt to reduce their balance sheet. In hindsight, it shouldn’t come as a surprise that the long end of the bond market rates have risen. Every time the bond market had been inverted then normalized, the economy has entered recession within 18 months.
I wonder if Trump will set bond yields at a fixed rate and force pension funds, hedge funds and huge financial institutions to buy a certain percentage as part of his MAGA policy.
I think financial repression is the only way out of this without tanking the bond and dollar markets!!!
bill’s smart. and his analysis seems spot on. just because lags between coomon sense and mass delusion are long and variable doesnt mean sense wont win in the end
Sense winning is the centerpoint in the pendulums swing.
The passive bid ends when the tipping point hits for automatic investment for retirement accounts due to decreasing employment (very poorly worded I know).
Look at what is happening globally. The Dollar Milkshake Theory is playing out in real time.
The milkshake theory basically holds that there simply aren't enough US dollars created to keep up with the rising demand. And when the greenback rises high enough and fast enough to lead to defaults abroad, the demand for dollars swirls up and its supply shrinks, leading to an epic squeeze higher. I don't agree with this. I think people want less not more US Dollars think BRICS and think 2 of the 3 buyers of our debt (Japan and China) are now net sellers not net buyers of US Treausies (dollars). I think what happens next is some type of QE happens and the rates go up not down (oh wait that just happened)... that leaves the govt two choices. 1. They can try to print (do QE in any form) the bond market smacks them back down... or 2. They can raise rates and we default on the debt. We are stuck and Powell knows it... he is scared shitless and he should be. There is no good way out of it now. But say the milkshake theory is correct and the FED gets away with printing (QE of any sort) that just causes hyperifnation and even more price rejection (prices are already way too high) If Infation had not erroded 40% of our purchasing power in the last 7 years well I would agree with that theory. I don't think people (consumers) can handle much more increase in prices. Everyone is crazy broke even if they haven't figure it out yet. Thoughts?
The fed just follows rates. That's why the cut. The 2 and 10 year rate was falling. The fed cut to follow. The market sold the news. The fed now waits until the market rates start coming back down. But we need weak data to come out OR something that causes the stock market to come down. This is why the fed is always late.
Go back and look at the 2 year right before inflation. The 2 year rate started moving up. The fed started raising rates to follow
I'd rather the Fed follow the market than literally guess what to do.
Nah. All assets are on a long rising trajectory. For many more years, maybe 10-15 years. Why? Because we still have a lot of debt ceiling to create. Debt buys time. Debt pushes up asset values (by enriching the debt holders - the very top classes - who re-invest in assets). These debt-holders effectively own the FED, executive branch, legislative branch, and high court (oligarchy). Because of this, the asset markets will continue to rise, with an occasional 10-20% dip, followed by a long debt-fueled bull run (the dips give permission to the FED to print more QE). It's all about who's in control of money policy, and that ain't the middle-class. The broad middle (130M souls) is walking dead. They weren't smart enough to reject supply-side policies in 1980, and still aren't. Ha, the middle class thinks their ever-worsening socioeconomic plight is because of immigrants, commies, gays, and baby killers. Hilarious. So pathetically stupid. The ultra-wealth oligarch class has done an amazing job at obfuscating their complicity, and have now painted themselves as heroes (Musk, Doge, etc)! The middle class just voted the oligarchy into the greatest levels of U.S. power they've ever held. Hahaha. Breathtakingly genius. Hats off to the oligarch-controlled media for creating one of the greatest fictional socioeconomic narratives in human history.
Jimmy Carter, in his last interview, said this,
"[Unlimited money as political speech] violates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members. So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favors for themselves after the election’s over. The incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves. Somebody’s who’s already in Congress has a lot more to sell to an avid contributor than somebody who’s just a challenger.”
In my view the Bond market is just sitting on the sidelines waiting for data - a new trend I think will form and will expose that bonds have formed a double bottom play. My theory is bonds are conducting a double bottom from late 2023 we had the first bottom and now at play is the second bottom. We shall see how this all plays out but that's my view anyway. The talk about long term, inflation and debt and Trump I think is really a more fine tweaking of numbers in the long run but that the current situation is a short term move, that's my view.
Guests I won't waste my time watching anymore: Fleckenstein, Faber and Rogers. These guys are catnip to you Adam.
I'm buying silver (physical) to get ahead of the rush back into sanity.
Good luck with that. Using a consumed industrial metal believing somehow it will again be recognized as a currency.
Quaint.
Yield control incoming. 😢😢😢. Also in addition to passive bit you c
Have companies buying their own stock which was illegal as manipulation of true stock price and way to funnel money to corp insiders. 😢😢😢
Curious ... how does the govt pull that off? Espeically with the debts so high, inflation erroding 40% of the dollars purchasing power in the last 7 years, and the bond market revolting. If the FED come in as buyers of last resort because no one want to buy US Debt... that make the yields go up even higher. WE are out of room. Powell know it. Bonds are priced in dollars the bond market is not going to let the Govt drive the dollar to zero without of fight. Do you see this differently?
@ most of the bond market is owned by US banks and regulated by the Federal Government. The just tweak the regulations requiring banks to purchase only Treasuries at the offered price. Then Treasury just sets the rates at 0 or whatever number they want. Most treasury demand is domestic now anyway.
Drain the swump!
Please define SWUMP. I have my opinions on who that is. Who do you think it is?
First thing you need to balance budget and who you need to help you would be Newt Gingrich. We let Doge try to get to its 2 trillion dollar Target gold to its true fundamental value taking all the gold that we have and divided by all the debts and deficits on and off balance sheet. And that will be a good blueprint
My dude literally how high do you want rates to go? Yields have gone up 20% what more do you want theyve done enough already
well if we look at the great infaltionary period of 1968-1982 as a guide, it will need to go much much higher. My dad in the 80s had a mortgage rate of 18%. anything above 5% the stock market crashes. all the bubble pop and we go into a massive deflationary period. But before we get that I think we get stagflation that leads us into it. I think that has already started. Thoughts?
...until the deflationary crash that occurs when the stock market bubble bursts.
Love your program. However, way too many commercials. You are losing the continuity of presentation.
Thanks for flagging. TH-cam packs a bunch in there. I just deleted most of them.
short comment
The honesty about bitcoin is very refreshing.
If a recession triggers early retirements, we lose a lot of passive bid from 401k and pension contributions
Can robots make investment decisions not programed by human designers? Or, do robots have free will?
shorting apple, thats the take away.
Very nice analogy Adam, to financial earthquake, don't sleep walk into f financial catastrophic event.
Been waiting on the sidelines fir the last two years listening to these bears. Missed 40%, enough!!
Going all in on s and p and Russel
You are buying (going long the top or very close to it). We are almost there. Patience !!!!
Na na na na na Speculation
Sorry, I can't trust anyone that needs a haircut as bad as this Bill guy does when it comes to bonds.
😢
Looney tunes
hi Adam. Many of your videos are over 1 hours. I've stopped watching because of this reason. Just a suggestion most videos don't need to be more than 20 minutes long. Just a thought.
You might have what they call attention disorder. this is caused by too much content... too much tick tock... Face book, you know instant gratification. Maybe stop surfing and scrolling so much and read books instead. Then a 1 or even 2 hour video will not be too much. Some things take a longer time to explain that we would like but it is necessary. Just a suggestion. If you stop scrolling (maybe that is not your problem at all ... maybe you just hate long video)... but if it is, you will feel much better. I stopped watching main stream media and all social media except YT 20 years ago. I read 2 books a week on avearge. I feel much better for it. Just a suggestion.
30th, 9 January 2025
Help! I cannot seem to find a money market fund whose assets consist exclusively of reverse repos. If the zealots in the Congress can't or won't lift the debt limit and the treasury actually defaults this time does reverse repos might still be paid off the Federal Reserve apparently has the legal right to continue endlessly printing money buying back those reverse repo assets. It's just a theory of mine that I haven't been able yet to get confirmed. If that is the case, treasuries wouldn't be the safest financial asset in the world it would be the Feds obligation to repurchase those assets which would at least be temporarily and default. 😢😮
All these people do is make guesses. The idea bonds may keep going up and cause stocks to crash is the same theme we've been hearing for years. When will these talking heads adjust their expectations based on reality? Bond yields don't matter as much as they think they do.
Serious question, what should everyone's expectations be? I definitely think interest rates matter less than a healthy, sustainable underlying system but high interest rates should eventually impact a highly indebted system
As long as massive bond holders are bailed out with synthetic liquidity such as Silicon Valley bank then they can gamble risk free on stonks…
I've come to the conclusion that all these guests are just trying to sound smart so they can sell services, but their guess is as good as anyone's.
The US economy is built on an economy that needs record low interest rates to function. Its called a post industrial high finance economy. If you think low interest rates are sustainable you’re an idiot. The entire economy in the western world is unsustainable. The world is going multipolar period. The US either accepts that or we suffer a long term catastrophic soviet style collapse. If you don’t think it can happen to us, you have no clue what’s going on in the geopolitical global landscape. Our competition now has bigger and better nukes than us. Pay attention.
Correct, I’ve been hearing these experts and they are all just guessing.
I am at the beginning of my "investment journey", planning to put 385K into dividend stocks so that I will be making up to 30% annually in dividend returns. any good stock recommendation on great performing stocks or Crypto will be appreciated!
As a newbie investor, it’s essential for you to have a mentor to keep you accountable.
Ruth Ann Tsakonas is my trade analyst, she has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
I managed to grow a nest egg of around 120k to over a Million. I'm especially grateful to Adviser Ruth Ann Tsakonas, for her expertise and exposure to different areas of the market.
I don't really blame people who panic. Lack of
information can be a big hurdle. I've been
making more than $200k passively by just
investing through an advisor, and I don't have
to do much work. Inflation or no inflation, my
finances remain secure. So I really don't blame
people who panic.
Without a doubt! Ruth Ann Tsakonas is a trader who goes above and beyond. she has an exceptional skill for analysing market movements and spotting profitable opportunities. Her strategies are meticulously crafted on thorough research and years of practical experience..
how would you recommend i enter the crypto market? I am also looking at studying some traders and copying their strategy rather than investing myself and losing money emotionally. What's your take on this approach? and How can i reach her, if you don't mind me asking??
I love taking investment advice from someone who thinks “the Fed is woke” is a coherent opinion.
I really want someone to give me a good definition of "Woke"... I can't seem to find one and MAGA folks I know don't really want to talk about it when I ask. Can anyone help me?
@ well it’s been used by black Americans since the 1930’s to draw attention to social injustice, J Powells top priority, obviously. Conservatives generally use it to mean “things we don’t like”.
TLT is still in a down trend monthly the harbor guy is JV
TLT is getting whacked !!! I think it easily takes out its all time lows.
@@bpb5541 his brain is depressing his performance instead of waiting for the charts to confirm his thesis he is saying the chart is wrong or i want in early bec i am right
I’m sorry, I can’t take financial analysis seriously from a person that doesn’t have the critical thinking and data analysis skills to know RFK Jr. is wrong and crazy for the most part.
Agree totally. His track record has been mixed. Not terribly impressive. So I can’t listen to much of this guy.
What in your opinion, are the things that RFK Jr is wrong about?
He is right on about the medical pharma
@stephenw4720 he isn't wrong !! He knows his stuff
With all due respect what have prior yahoos in RJK hour role done for our country??? The answer would be nothing other than being one of the most unhealthy cultures on the planet! Wake up!
Good luck to Lacey Hunt😂🤣
He fails to consider many factors that run the global mkts😂🤣like the stonk mkt has no impact on how bonds trade😂🤣he sweeps everything under the Velocity carpet😂🤣& thinks ED system is not as significant & any disparity is taken care of by Velocity😂🤣
Velocity is a plug & is neither dynamic nor observable in real time😂🤣
God help the zombies 😂🤣