NY Times Bestselling Author, over 1 million copies sold, now published in 12 languages globally. Long-time @CNBC Contributor, founder of the @BearTrapsReport
New York, NY
- Tweets 91,244
- Following 13,872
- Followers 144,560
- Likes 23,133
Midterm Election, Most House Seats Lost by President's Party in Power
2010 Obama: -63
1994 Clinton: -52
1958: Eisenhower: -48
1974 Ford (Nixon): -48
1966 Johnson: -47
1946 Truman: -45
2006 Bush: -30
1950 Truman: -29
1982 Reagan: -26
2018 Trump: -26
*NY Times data since 1946
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Met Charle Munger in Omaha in the years after Lehman - he said:
"Larry, never, ever tell anyone about your problems, 90% of the people really don't care... The other 10% are glad you have them."
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When you see a sector like the Semiconductors, the hottest of all last 12 months, up 7% and down 7% in 24 hrs, this is a classic signal.
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CNN - “the Trump White House is negotiating with itself. China has NO interest in talking to Trump."
*Bonds are speaking a FAR different narrative. FACT.
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Nvidia - This will go down as one of the most significant downfalls in the history of passive investing. All the monkeys are in one tree. Nearly 8% of everyone's 401K is crammed into $NVDA, with nowhere near the energy infrastructure buildout to support the growth assumptions.
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Bitcoin
Aug 2024: 62000
June 2024: 62000
April 2024: 62000
Feb 2024: 62000
Oct 2021: 62000
April 2021: 62000
*Inflation, up 30% since 2021.
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*BERKSHIRE HATHAWAY RAISES 90 BILLION YEN FROM BOND SALE.
Just wow. Buffett is loaded with cash and he's reaching into the margin account (borrowing) in yen. Next 12 months - he's going to buy this puke festival with both hands.
Thoughts?
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Since 2021
Bitcoin
59k to 59k
Gold
1750 to 2500
*Last ten years - Gold’s largest drawdown? 21% vs. Bitcoin -82%, -58%, -65%, -75%.
*A store of wealth holds its value. It doesn’t lose half its value or more every few years.
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Drawdowns
Facebook -75%
Disney -48%
Fedex -50%
Tesla -46%
Nvidia -60%
Nike -50%
Netflix -58%
Amazon -46%
All-Time Highs
T-Mobile
McDonald´s
Northrop Grumman
Amylyx Pharm
Pepsi
UnitedHealth
Merck
*You won´t see internal divergence like this more than once or twice a decade
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Another Lehman moment? Bonds are driving the bus, here's everything you need to know.
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Shiny Rocks vs. Pieces of Paper
Since 2000
Gold: +1050%
Silver: +428%
Nasdaq 100: +366%
S&P 500: +244%
*Bloomberg data.
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Breaking news, when you pay human beings NOT to work it is very hard to get them back into the labor force.
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On Black Monday, October 19, 1987 — working with my Dad at his brokerage firm.
He asked me to call the floor, phones ringing off the hook.
Me: “I need to sell x shares of IBM.”
Trader: “98 bid.”
Me: “Well, my machine says $119.”
Trader: “Well, sell it to your machine then.”
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After living through the Lehman fraud - there is one ultimate takeaway - this era will go down as a period where central banks fueled con-men and women - Saylor (MSTR) and Wood (ARKK) - to prey on retail investors - FACT - Mark my words.
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Black Monday - working for my Dad’s brokerage firm, on October 19, 1987:
Me: “I really need to sell x shares of IBM”
Trader: “$98 bid”
Me: “But.. But, my machine says $122”
Trader: “Well, sell it to your machine then.”
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*BIDEN ADMIN: CAN WORK WITH ENERGY COMPANIES TO SURGE SUPPLY - Bloomberg
*PIONEER'S SHEFFIELD: EVEN IF BIDEN REQUESTS MORE OIL, SHALE CANNOT RESPOND. - Bloomberg
*"VP Harris did indeed call for banning fracking during the primary campaign." - Axios
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Market rally since @realDonaldTrump won the election now exceeds all other newly elected US Presidents since at least WW2, + up 25.4%
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True Story - October 19, 1987
Me: “I need to sell x shares of IBM”
Trader: “$98 bid”
Me: “my machine says $119”
Trader: “Well, sell it to your machine then.”
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Dow Jones Industrial Average
Nov 2017: 24,300
Nov 2016: 17,900
Nov 2014: 17,900
What’s going on here?
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"When Markets Speak" - Best Seller on Amazon.
The Epilogue -- Chapter #1.
I was sitting there in Omaha, across the table from Charlie Munger, one of the all-time greats. I'll never forget this line. He said,
"Larry - if all you ever did was buy high-quality stocks on the 200-week moving average, you would beat the S&P 500 by a large margin over time. The problem is, few human beings have that kind of discipline."
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Japan was planet Earth's bond yield anchor for decades. When central bankers distort the true cost of capital over longer and longer periods of time, there's a price to pay for this charade; it's not free.
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Would You Desribe the State of the US economy in Excellent- Good shape?
2017: 66%
2016: 29%
2015: 37%
2014: 31%
2013: 30%
Quinnipiac Poll
via @cvpayne
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Never, ever forget... Buffett backing up the truck from 8x to 18x, dumping shares near 34x.
$AAPL Apple
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Never forget, we live in a world where "insider trading" is illegal, but Fed policy path leaks to Wall. St. Journal reporters move asset prices in the hundreds of billions of dollars.
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If the top 10% are now close to 60% of consumption, then increasing tariffs is actually taxing the rich.
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There is only one reason why the Fed cut 50bps this week... They MUST get front-end rates lower as this colossal wall of debt matures.
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Drawdowns this Week
Bitcoin -17%
Ethereum -27%
Solana -27%
Cardano -44%
Dogecoin -51%
Litecoin -52%
XRP -57%
*Hail the King - Gold closed up 1% Friday, just off an all-time high.
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Thank you! CFA Institute - Top 20 Finance Books All-Time, as chosen by CFA candidates.
“Holiday gift ideas - “Colossal Failure of Common Sense” - pick up one for that college student.
Gratitude.
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Serial Convertible Bond Issuers
SunEdison*
Chesapeake Energy*
SunPower*
Molycorp*
Lehman*
iStar Financial*
Calpine*
Fannie Freddie*
Enron*
Tyco*
Adelphia*
Six Flags*
eToys*
Avaya*
Worldcom*
Tesla
Coinbase
Microstrategy
*went bankrupt.
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Dear Equities,
$1M in T-Bills, Interest Paid
February
2023: $51K
2022: $6k
Best regards,
Cash
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Since December
Platinum +50%
Copper +35%
Silver +33%
Palladium +33%
Gold +30%
Steel +30%
Gasoline +16%
Bitcoin +8%
Uranium +4%
Mag7 ETF -3%
Bloomberg data.
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Gets very little coverage:
If @realDonaldTrump didn’t land the September Debt Limit - continuing budget resolution deal with “Chuck and Nancy”, there would be no tax reform (bill passage) in 2017
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True Story - working for my Dad’s brokerage firm, October 19, 1987
Me: “I need to sell x shares of IBM”
Trader: “$98 bid”
Me: “My machine says $119”
Trader: “Well, sell it to your machine then.”
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How the Game Works
December 2020 - "Coinbase Picks Goldman Sachs to Lead Upcoming IPO"
November 2021: November COIN was a "Buy" and Goldman raised the price target to $387.
June 2022: GS Downgrades to Sell from Buy - price target now $45.
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Interest rates up --- bonds prices down.
$1 million invested in this Apple AAPL bond is now worth $600k, duration risk is on stage here. Now think of all those mortgage-backed securities on bank balance sheets.
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Markets are Speaking...
US YIELD CURVE TURNS POSITIVE FOR ONLY SECOND TIME SINCE 2022 - Bloomberg.
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Your 401k has been hijacked…
Largest 25 Stocks - Valuation
2023: $18.4T
2013: $5.5T
*Ten years ago, no stock made up more than 3% of the S&P 500, today 5 do. - Bespoke data.
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If you use the same metrics inside the CPI formula that Paul Volcker gawked at in the early 1980s, inflation is running at 14.145%, a real theft purchasing power.
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Never, ever forget - the fundamental foundation of capitalism is to let the charlatans, the hubris filled pretenders, and bad guys fail. For most of the last 20 years we are living in a society where this is NOT the case. There is a price to pay for this charade. It’s coming.
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November 2017 vs 2016
Dow Jones Industrial Average
23,602 v 17,883 (+31.9% high to low)
NFIB Business Optimism
103.0 v 94.9
Consumer Confidence
125.9 v 100.8
Bloomberg data
cc @DonaldJTrumpJr @stevenmnuchin1 @realDonaldTrump
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All In - David Tepper just said he broke (risk) limits to own China, 15-20% is usually his limit, but we think he is higher than that. When asked about a "hedge" he said I have no hedge, valuation is the hedge...
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U.S. home prices are 6-7x income vs. 2-3x thirty years ago.
*When central banks do NOT allow the business cycle to function over longer and longer periods of time, they inflate asset prices and price out millions of Americans.
Peter Thiel on why 70% of Millennials say they are pro-socialist:
“When one has too much student debt or if housing is too unaffordable, then one will have negative capital for a long time… and if one has no stake in the capitalist system, then one may well turn against it.”
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Bonds - just woke up to this.
Rated Aaa -- Microsoft 4.10% due 02/06/37
vs.
Rated Aa1 -- USA 4.25% due 05/15/35
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*BLACKSTONE DEFAULTS ON €531M CMBS AFTER PROPERTY SALES DELAYED
*”Credit leads equities”, rinse repeat…
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I believe Bank of America is insolvent with a 6% Fed funds rate, leverage explodes. If your core capital is impaired, any losses on tertiary assets (credit cards, commercial real estate, asset backed securities) are exponential painful.
Veteran banker calling for "TARP 2.0" in Op-Ed to help banks with steep unrealized losses on their securities holdings
Proposal would lend up to $1 Trillion against securities that have lost value to Fed's "meteoric increase" in interest rates
1/5
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China - Keeps dumping US Treasuries.
*In December, foreign holdings plunged further. China and Japan - the two largest holders cut their position in US debt.
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Any asset class that is relentlessly promoted by strippers and charlatans, an “investment” that plunges 70% four times in a decade is NOT a store of value. Long term track records on crypto are meaningless garbage.
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Zuck lost $4B on a Metaverse bet, now he's cheating on the AI capex - balance sheet - income statement game?
Listen to @RealJimChanos right now.
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Biden is now officially in Jimmy Carter territory.
*Inflation is as high as the 1970s - 1980s. Using the CPI formula trafficked in those days, inflation is above 14%, matching the height of the worst consumer price pressure era.
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With US Treasuries at 5%, Bank of America is close to 45x levered, at 6-7% infinitely levered.
piped.video/watch?v=bWiBI0Jh…
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The Federal Reserve is kicking off a rate-cutting cycle with core PCE NO-where even close to the 2014-2019 norm. Clearly, they have chosen a new, higher inflation target in reality. They will publicly say this in the coming years.
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17 Years
"Our liquidity position is strong, we are adequately capitalized."
Alan Schwartz, Bear Stearns CEO, March 2008.
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*FED'S KAPLAN, ROSENGREN TO SELL ALL STOCKS AMID ETHICS CONCERNS - Bloomberg
Central Bankers trading stocks - Why in the name of God´s green earth did it take a public shaming on Twitter to inflict common sense?
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.@MMFlint In 2001 Venezuela was the richest country in South America; it is now among the poorest
via @TheEconomist
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October 19, 1987, a Day to Never Forget
Me: “I need to sell x shares of IBM”
Trader: “$98 bid”
Me: “My machine says $119”
Trader: “Well, sell it to your machine then.”
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2025
Gold Miners +39%
Gold +21%
Silver Miners +20%
Berkshire +14%
Copper +7%
Silver +7%
Platinum +3%
Global Value +2%
Cash +1%
Palladium +1%
Iron Ore -6%
S&P 500 -10%
Oil -13%
Nasdaq 100 -13%
Bitcoin -15%
Russell 2000 -18%
Uranium -22%
Coal -34%
Bloomberg data.
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October 19, 1987
Me: I need to sell x shares of IBM
Trader: $98 bid
Me: My machine says $119
Trader: Well, sell it to your machine then
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October 19, 1987 - a Day to Never Forget
Me: "I need to sell x shares of IBM"
Trader: "$98 bid"
Me: "My machine says $119"
Trader: "Well, sell it to your machine then"
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There are few things in this world more foolish than placing 8% of America's entire 401k system in a $4T stock at 27x sales.
Nvidia $NVDA
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In the History on Mankind
1. A ton of coal has never been worth more than it is today.
2. The planet has never used more coal.
3. China is building more coal plants than exist in the Western world.
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Be careful trading stocks when major developed market bonds are trading like this. There is NOTHING more dangerous, than academics who have NEVER taken a professional risk, never actually sat in a risk-taking seat - but now sitting on trillions of pounds and dollars of risk.
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CITIGROUP IS SAID TO EXIT DISTRESSED-DEBT TRADING BUSINESS
*talk about a signal, wow.
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To all the Wall St. traders who were in college or diapers during the 2008 and 2000 credit and equity market drawdowns, what we've seen over the last week was definitely a taste. At your pinnacle, climax of fear, you must do the exact opposite of what you want to do. BUY!
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A Great line from The Big Short:
"One of the hallmarks of a mania is the rapid rise in complexity and the rates of fraud." Dr. Michael Burry
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U.S. 10-Year Treasury Bond Yield
From 3.62% to 4.62% since the Fed started the latest rate-cutting (monetary policy easing) cycle in September. The U.S. 30-year mortgage rate has moved from 6.5% to 7.3%. How unusual is this price action?
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.@JeffBezos Dear Jeff, one of the smartest human beings, who’s ever walked on two legs on this planet 🌏 is selling stock like it’s his last meal before the electric chair? What does he know?
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“There is nothing in this world which will so violently distort a man’s judgement more than the sight of his neighbor getting rich.”
JP Morgan, after the Panic of 1907.
#Crypto
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Never, ever forget. Long-term track records on an asset class that implodes every few years are total BS. Anyone stating them needs to be called out as a pumper looking for a greater fool.
Last 10 Years - Largest Drawdowns
Gold: -22%
Bitcoin: -78%, -82%, -55%.
#StoreOfValue
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Interest on $1M in US T-Bills
Jan 2023: $46k
Jan 2022: $3k
* “56% of Americans can't cover a $1,000 emergency expense with savings” CNBC, January 2022. Wealthy investors just got a colossal pay raise vs. the lower / middle class consumer up against inflation.
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What do Global Yields Know?
30 Year Bonds
UK 5.21%*
US 4.85%
Japan 2.30%**
*Highest since 1998.
**Highest since 2010.
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Buffett would rather buy 5% T-bills than buy his own stock...
Berkshire - share repurchases - Buffett’s actions are telling, indeed…
2024: $2.9B
2023: $9.2B
2022: $7.9B
With @DrDavidKass
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Dear Mr. Powell,
Close to $11T US Treasury bonds maturing - next 24 months, need to be refinanced.
Funding Rate
Current: 1.6% to 1.9%
New: 3.4% to 4.6%
*interest as a % of the budget explodes from 8% to nearly 17%.
**interest (blue) below is a very conservative estimate.
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Friday was a Significant day - Bank of Japan intervention and a Federal Reserve Policy path shift, it was an inside job. Three things you need to know:
thebeartrapsreport.com/blog/…
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Markets are Speaking --- Nasdaq opens down 1%, to close up 2%, how rare is this neighborhood?
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S&P 500 "All-Time Highs
2019 - 2021: 117
2012: 0
2011: 0
2010: 0
2009: 0
2008: 0
2007: 9
2006: 0
2005: 0
2004: 0
2003: 0
2002: 0
2001: 0
2000: 4
1999: 35
1998: 47
1997: 45
via @charliebilello
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