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.
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.
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.
Love Your interviews with Bill. He is always a little bit of distorted in the beginning, but You get him ignited, and he get's to a level of unreachable enthusiasm. I'm living in Sweden having my pension funds and private savings in goldminers, TLT and Swedish Stockmarket & Bonds because of the risk that the USD is overevaluated.
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.
As someone who had their securities license in the past, I came to the realization that funds would start a long bull run due to what you are calling the passive trade. I have said this for at least 15 years. As corporations moved from pensions to pushing 401Ks onto employees, the employees had a set it and forget it attitude due to other daily life issues. And fund managers loved the steady stream of fees. Until employment drops precipitously or retirement withdrawals increase dramatically, the steady inflow will force prices up because the managers ar e required to invest. They can not sit on it. Another possibility of asset decline (but less likely) is if investors wake up, see the light and start reallocating their portfolios from stocks to bonds...or an combination of the aforementioned possibilities.
Some economists are worried that the policies of Trump 2.0 will prove to be inflationary. My question is, does the economy really determine the stock market? I still see booming performances and curious how to go about investing for my eventual retirement.
It kinda does. There are cycles and we are due for a crash to snap things back in line with reality. Ideally, investors find help utilizing the service of an advisor to avoid irrational behaviour in face of volatility and uncertainty
The market is based on reality yet I don't see the reality. I'm in line with using an advisor, saves me the time and hassle of picking the right stocks. Thankfully, I'll be entering into the new year with another 60% annual return, just about 10% shy of $1m in barely 5 years.
a booming stock market does not always mean we’re in a booming economy and when you see this disconnect between the real world and wall street.... things have a way of snaping back inline. By the way, your advisor must be grade A, cheers!
Amy Lea Kohlert is the licensed FA I use. I've stuck with her since the covid-outbreak, and her performance has been consistently impressive. She’s quite reputable in her field with over two decades of experience, so I guess she's one of the best out there.
Appreciated Bill's comments. The last interview I saw in 24 (different host) I thought he was very 'wishy washy' but feel his insight here is thoughtful.
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!
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.
Short AAL & UAL (I started shorting Friday (10 JAN). Look at any recent chart and the 'why' will be crystal clear. Plz wait till Tuesday to lay on your airline shorts bcuz I want to short more on Monday. Thank you for your usual fine cooperation. 🤠
You have a lot of helpful analogies and metaphors in these interviews, and the one at 1:35:00 on earthquakes is excellent. The investing risks discussed in this interview are extreme by the data, and no matter how well one might have done in the past, even recently, shouldn't one at least consider risk? At least factor in risk mitigation for severe negative outcomes, whether wrong or right going forward.
I covered my DHI shorts just before xmas bcuz I wanted to take the gain in '24. That said, HBs are prolly also a worthy short. What happened this week (Crude & Airline stonks) makes the airline short better...imo. Thank you 🤠
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.
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.
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
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.
What u r saying has already happened last few yrs. Tremendous capital has already fled china, europe into US equities. US stock market cap is now 65% of global. Highest ever in human history. So i believe we already had the blow off top. Decline is next.
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.
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.
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
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
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
This year might be harder. Looking back, I see I didn’t make the best financial choices last year because I was so focused on my portfolio. I had to decide whether to invest more or buy a house. After selling my stock, I realized the house needed more work than I planned for. I’m finding it harder to keep going
Best thing 2 do: 1) Have recession n stock market crash in 25. Will help with debt refinancing wall. Will lower inflation n inequality making middle class happy. 2) Use the crisis to get congress to act n do hard reforms. I.e. 2008 3) Do a small fiscal stimulus n boost stock markets right b4 relection. 4) Blame dems 4 cooking the books if the experiment fails.
According to von Mises, the Fed follows the market, it doesn't lead it, and that the "neutral rate of interest" (the rate which is neither bullish nor bearish) is actually the prospective rate of profit. Thus bonds (the Fed's product), trying to keep it's product as cheap as possible, yet still more profitable than it's competitor's product (equities), follows the prospective rate of profit down until the crash.
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?
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
Be careful listening to George Gammon. His financial thinking is the equivalent of "They've thrown us 3 fastballs in a row, so the probabilities say we're gonna get another fastball!" That's NOT how baseball, nor our rigged and managed financial markets, actually work.
A significant portion of my $850k portfolio is allocated to (20% in index funds, 20% in CDs, 30% in bonds/T-bills, and other assets). However, I'm looking to explore alternative strategies for potentially better growth given the current market conditions-just seeking some ideas.
This is the exact thought process of persons handling their portfolio themselves. I will advice you engage guidance to help you make smarter portfolio decisions.
I've been through the 'bonds are beating stocks' periods since the 90s with no bonds and with all aggressive stock mutual funds. At 66, my IRA and cash accounts are far more than I expected for my retirement. I can easily handle a worst-case 80% stock crash, Thanks to my CFA
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
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?
Great interview, very informative. I like following his logic and how he see's things at this moment. Not a huge fan of Trump or RFK Jr. but that's ok, to each their own. Kind of interested in Trump's first 100 days and how much we actually see happen and change.
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.
There's no such thing as government waist. The "waste" is wealth transfering from moddle class and even rich to the 1%. That's why we won't be getting rid of government waste.
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.
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
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
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.
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?
It's not different this time. Bill makes the argument that the milk price doesn't go down and people still "feel" inflation. But the thing is that exactly because of this people will and are cutting their spending! This is what is happening in a few major countries already. Lacy Hunt is right here, Bill is not imho. We will see..
*_"...complications and road blocks ahead..."_* for sure, but the question I have, is how did the entire congress so easily send gargantuan amounts of --bogus fiat-- _"money"_ overseas continually after the US has been experiencing disasters? The *_BORDER._* Oaths of office broken? If not, clearly not in our best interests and obviously contrary to stability in the US. Probably just a *_"uniparty"_* thing.
The passive bid ends when the tipping point hits for automatic investment for retirement accounts due to decreasing employment (very poorly worded I know).
It's not that I don't like Bill but who has time to listen to 1.7 hours of one guy's opinion when there are at least another 1000 equally valid opinions out there?
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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.
@@Ficus074 Good take, thank you.
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.
As I'm listening to this excellent interview with Bill, here in UK Gold is at all time high in sterling 😊
“Bonds leak til stocks tank” - by the legendary Fleck.
Yet another excellent conversation, Adam!
I'm old enough to remember when Bill Fleckenstein predicted the 2000 crash.
When was that... 1991?
@@opentrunk Do you always reveal your ignorance for others without even needing to be asked? LOL
@@junkscience6397 The truth hurts, eh?
I used to really enjoy reading Fleckenstein's Market Rap column back in the late 90's-early 2000's. He always gave Greenspan some hard knocks.
Anyone who couldn’t see that one coming was completely blind.
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.
Absolutely right. So far its pretty normal behaviour.
Great interview! Thanks Adam! I love his comment about inflation.
Superb session with Bill, John and Mike. Thank you !
I enjoy when Bill speaks ,I agree with lot of what he says and btw learn a lot from his macro view .
Thanks Adam 😊
Love Your interviews with Bill. He is always a little bit of distorted in the beginning, but You get him ignited, and he get's to a level of unreachable enthusiasm.
I'm living in Sweden having my pension funds and private savings in goldminers, TLT and Swedish Stockmarket & Bonds because of the risk that the USD is overevaluated.
This is exactly the video I wanted to watch today. Thanks for knowing what I wanted before I did!
Like the way Bill thinks. Very useful ideas. Thanks Adam.
Thanks for giving us Bill Fleckenstein.
Terrific interview Adam. Loved the back and forth with a great guest.
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.
@@boggy7665inflation
Great interview. All this is made so much easier with great filters.
i just luv listening to the sages - thank you TM♥
As someone who had their securities license in the past, I came to the realization that funds would start a long bull run due to what you are calling the passive trade. I have said this for at least 15 years.
As corporations moved from pensions to pushing 401Ks onto employees, the employees had a set it and forget it attitude due to other daily life issues. And fund managers loved the steady stream of fees.
Until employment drops precipitously or retirement withdrawals increase dramatically, the steady inflow will force prices up because the managers ar e required to invest. They can not sit on it. Another possibility of asset decline (but less likely) is if investors wake up, see the light and start reallocating their portfolios from stocks to bonds...or an combination of the aforementioned possibilities.
The most passionate original critical thinker on this show
Some economists are worried that the policies of Trump 2.0 will prove to be inflationary. My question is, does the economy really determine the stock market? I still see booming performances and curious how to go about investing for my eventual retirement.
It kinda does. There are cycles and we are due for a crash to snap things back in line with reality. Ideally, investors find help utilizing the service of an advisor to avoid irrational behaviour in face of volatility and uncertainty
The market is based on reality yet I don't see the reality. I'm in line with using an advisor, saves me the time and hassle of picking the right stocks. Thankfully, I'll be entering into the new year with another 60% annual return, just about 10% shy of $1m in barely 5 years.
a booming stock market does not always mean we’re in a booming economy and when you see this disconnect between the real world and wall street.... things have a way of snaping back inline. By the way, your advisor must be grade A, cheers!
Amy Lea Kohlert is the licensed FA I use. I've stuck with her since the covid-outbreak, and her performance has been consistently impressive. She’s quite reputable in her field with over two decades of experience, so I guess she's one of the best out there.
Thank you for the recommendation. I'll send her an email, and I hope I'm able to reach her.
Thanks Adam for bringing us this great content great guest once again God bless you both stay safe and well
Appreciated Bill's comments. The last interview I saw in 24 (different host) I thought he was very 'wishy
washy' but feel his insight here is thoughtful.
Great programme today thanks. Yes i do think mag7& bitcoin are now household names and very much the bubble 👍
Very good guest!!!
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!
Have subscribed for years. Always thought provoking. Good interview
Fleck is the maan!
Well done, thank you!
some gems in this one. thanks for the discussion!
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.
Short AAL & UAL (I started shorting Friday (10 JAN).
Look at any recent chart and the 'why' will be crystal clear.
Plz wait till Tuesday to lay on your airline shorts bcuz I want to short more on Monday.
Thank you for your usual fine cooperation.
🤠
You have a lot of helpful analogies and metaphors in these interviews, and the one at 1:35:00 on earthquakes is excellent. The investing risks discussed in this interview are extreme by the data, and no matter how well one might have done in the past, even recently, shouldn't one at least consider risk? At least factor in risk mitigation for severe negative outcomes, whether wrong or right going forward.
I covered my DHI shorts just before xmas bcuz I wanted to take the gain in '24.
That said, HBs are prolly also a worthy short.
What happened this week (Crude & Airline stonks) makes the airline short better...imo.
Thank you
🤠
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? ...
So you’re saying you knew what he meant?
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.
The risk of default is real… it’s the policy makers that need to change
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
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.
What u r saying has already happened last few yrs. Tremendous capital has already fled china, europe into US equities. US stock market cap is now 65% of global. Highest ever in human history.
So i believe we already had the blow off top. Decline is next.
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.
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.
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
Thank you very much...
Question. How are bond ladders doing now?
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
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
This year might be harder. Looking back, I see I didn’t make the best financial choices last year because I was so focused on my portfolio. I had to decide whether to invest more or buy a house. After selling my stock, I realized the house needed more work than I planned for. I’m finding it harder to keep going
Best thing 2 do: 1) Have recession n stock market crash in 25. Will help with debt refinancing wall. Will lower inflation n inequality making middle class happy.
2) Use the crisis to get congress to act n do hard reforms. I.e. 2008
3) Do a small fiscal stimulus n boost stock markets right b4 relection.
4) Blame dems 4 cooking the books if the experiment fails.
Blame Dema for cooking the books regardless... because they've been cooking the books...
... and draining the SPR...
... and destroying our credit.
No politician will EVER "do hard reforms".
According to von Mises, the Fed follows the market, it doesn't lead it, and that the "neutral rate of interest" (the rate which is neither bullish nor bearish) is actually the prospective rate of profit. Thus bonds (the Fed's product), trying to keep it's product as cheap as possible, yet still more profitable than it's competitor's product (equities), follows the prospective rate of profit down until the crash.
Yup
..2 year bond
very good analyais of interest rates.
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?
Been riding Lennar down from 180 to 130, expecting it to settle around 100 until the next ugly earnings report
The rate cut was to strengthen the short end for QT. Surprised this isn’t noticed.
Spot on Bill!!
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
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
Rates went up after the Fed, started cutting in 2007 up until late summer 2008... This has happened before
Be careful listening to George Gammon. His financial thinking is the equivalent of "They've thrown us 3 fastballs in a row, so the probabilities say we're gonna get another fastball!"
That's NOT how baseball, nor our rigged and managed financial markets, actually work.
Fleck is the Best!❤ I do Hope that he finally bought hilmself some Bitcoin ! 😊
Incredible video!!! Been waiting to see Bill’s thesis play out! Historical moment!!
He is so right on the republican in fighting. Wish they could stick together.
A significant portion of my $850k portfolio is allocated to (20% in index funds, 20% in CDs, 30% in bonds/T-bills, and other assets). However, I'm looking to explore alternative strategies for potentially better growth given the current market conditions-just seeking some ideas.
This is the exact thought process of persons handling their portfolio themselves. I will advice you engage guidance to help you make smarter portfolio decisions.
I've been through the 'bonds are beating stocks' periods since the 90s with no bonds and with all aggressive stock mutual funds.
At 66, my IRA and cash accounts are far more than I expected for my retirement. I can easily handle a worst-case 80% stock crash, Thanks to my CFA
Could you recommend who you work with so I can check them out?
Her name is Marissa Lynn Babula . I can't divulge much. Most likely, the internet should have her basic info, you can research if you like
I’ve just looked up her full name on my browser and found her webpage, very much appreciate this
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??
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?
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?
Cut the Defense budget in half.
Great interview, very informative. I like following his logic and how he see's things at this moment. Not a huge fan of Trump or RFK Jr. but that's ok, to each their own. Kind of interested in Trump's first 100 days and how much we actually see happen and change.
Buy Silver , Platinum , & Crystalized Osmium .
And weps and good pot.
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.
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?
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.
"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.
So will 10 yr yeild reach 6%?????
Maybe Adam needs to make sure his house is bolted to the foundation, and meets all other codes. (Plus no vegetation near the walls)
There's no such thing as government waist. The "waste" is wealth transfering from moddle class and even rich to the 1%. That's why we won't be getting rid of government waste.
What passive bid was he talking about?
Problem is almost all indicicators tnat are 100% accuracy on calling recessions have been triggered.
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
Interesting theory
Imagine if America raised the level of taxation on alcohol, tobacco and gasoline to Australian levels, it could raise hundreds of billions of dollars.
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.
keep saying it every year and one time he will be correct
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
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.
If we are to pronounce "stein" as "steen", does that mean "Einstein" is now "Eensteen"?
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.
Better: bonds weak until stocks peak.
Silicon Valley Bank was not JP Morgan, but it really gave market confidence a serious kneecapping
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?
Gotta luv Fleck-----never disappoints. Huskies to moon, LOL
I have been subscribed to Fleck for decades... and it is the only investment letter I read Every Single Time it comes out.
It's not different this time. Bill makes the argument that the milk price doesn't go down and people still "feel" inflation. But the thing is that exactly because of this people will and are cutting their spending! This is what is happening in a few major countries already. Lacy Hunt is right here, Bill is not imho. We will see..
*_"...complications and road blocks ahead..."_* for sure, but the question I have, is how did the entire congress so easily send gargantuan amounts of --bogus fiat-- _"money"_ overseas continually after the US has been experiencing disasters? The *_BORDER._* Oaths of office broken? If not, clearly not in our best interests and obviously contrary to stability in the US. Probably just a *_"uniparty"_* thing.
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 passive bid ends when the tipping point hits for automatic investment for retirement accounts due to decreasing employment (very poorly worded I know).
It's not that I don't like Bill but who has time to listen to 1.7 hours of one guy's opinion when there are at least another 1000 equally valid opinions out there?
I do, I have all the time in the world.
Define Passive flow and all the other jargon. Summarize a section before moving on.