Dr. Mark Thornton, Senior Fellow at the Mises Institute, joins Julia to explain why the bond market is the pivotal story right now. The 10- and 30-year Treasury yields are back above 5%, the national debt is over $40 trillion, and deficits are running at about $2 trillion a year. Thornton argues that this is wartime-level borrowing during supposedly good times. It crowds out private investment, weighs on wages, and widens the K-shaped divide between asset owners and everyone else. He explains why he thinks the Fed's recent hike won't be its last. In his view, Chairman Warsh and Secretary Bessent are managing the problem rather than solving it, and a market break or crisis could give the Fed cover to restart money printing. He describes the US as merging onto the "highway to hyperinflation," draws on historical cases from Revolutionary France to Weimar Germany, and closes with why he expects hard assets and commodities to outperform financial assets over the next decade.

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links

X: https://x.com/DrMarkThornton

Free Hayek book: https://store.mises.org/Hayek-for-the-21st-Century-P11367.aspx

Mises Institute: https://mises.org/profile/mark-thornton

Timestamps:

0:00 Intro: Why bonds are the big worry

0:43 Big picture: 10- and 30-year yields at 25-year highs

4:24 Are we in a new higher-rate regime?

11:48 Wartime deficits in "good times"

18:21 Who wins and who loses from easy money

20:25 Young people, housing, and the K-shaped economy

24:02 Food, energy, and the Persian Gulf conflict

28:10 Are we on the on-ramp to hyperinflation?

34:03 Fed rate hikes: more coming, and what's next

39:27 No consequences: the "magic checkbook"

47:28 How to protect yourself: hard assets

51:28 Where to find Dr. Thornton's work

Andy Constan, founder and CIO of Damped Spring and a veteran of Bridgewater and Brevan Howard, makes his debut on The Julia La Roche Show. He lays out his four-pillar macro framework and explains why he's turning cautious on equities despite a strong U.S. economy. His "pie theory" argues that the earnings AI companies are promising add up to more than the GDP available to deliver them. His "hamburger theory" warns that the massive borrowing needed to fund AI capex could stall if capital markets take a breather. With rates spiking for the seventh time since COVID, Constan doubts policymakers will engineer another V-top. He is currently short equities and max long long-term bonds, arguing that the much-maligned 60/40 portfolio is finally worth owning again. He also gives his early read on Fed Chair Kevin Warsh, explains what it would really take to kill inflation, and argues that this cycle has no clean historical analog because it's fueled by public-sector rather than private-sector debt. He closes with the story of analyzing every trade from the 1987 crash on the Brady Commission at age 23, and his core advice: own a well-constructed portfolio at your risk target and hold it for life.

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links:

Website: https://dampedspring.com/

X: https://x.com/dampedspring

Substack: https://substack.com/@dampedspring

Timestamps:

00:00 Introduction and welcome Andy Constan
00:50 The four-pillar macro framework: growth, inflation, risk premium, positioning
02:42 Where we are: a strong economy and 66 months of above-target inflation
05:20 AI and the "pie theory": why there isn't enough GDP for the earnings expectations
12:22 The "hamburger theory": who pays for the AI capex boom
13:50 The seventh rate spike: will it V-top again?
17:43 Why he's getting cautious on stocks
18:13 How most people should invest: risk targets and always owning beta
21:43 Seeking alpha and his current positioning: short equities, max long bonds
24:21 "The 60/40 Strikes Back": why bonds make sense again
29:30 Bonds finally get the growth memo
31:58 Vulnerable to disappointment, not recession
32:52 His read on Kevin Warsh at the Fed
36:59 What it would actually take to kill inflation
38:45 Why the administration isn't fighting inflation
41:37 What's mispriced right now
43:35 Historical analogs: 0DTE options, portfolio insurance, and a public-debt-driven cycle
48:09 Serving on the Brady Commission after the 1987 crash at age 23
53:02 Parting thoughts and where to find Andy

The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.

Chris Whalen joins Julia La Roche to break down a turbulent week in markets, as the 30-year Treasury hits its highest yield since 2004 and the 10-year breaks 5%. Chris argues that long rates have structurally reset, driven by Washington's credibility problem and the deficit rather than by the Fed, and he says 7%+ mortgage rates are the new normal as the housing industry heads into consolidation. He makes the case that the world is moving back toward a pre-WWI-style system with gold at its foundation, and explains why he's still long gold and silver despite short-term swings. Drawing on his conversation with John Dizard, Chris explains how damaged Persian Gulf refining capacity is squeezing diesel and sulfur supplies, sending fertilizer prices up eightfold and setting up a food price shock next year. He warns that double-digit inflation is already "baked into the cake," and predicts demand destruction could force the Fed to cut rates by 2027. In viewer questions, Chris covers trimming his Annaly position to buy energy stocks, means-testing Social Security, where housing prices are falling, and the risks private credit poses to life insurance and long-term care policies.

Thank you to our sponsor, Monetary Metals. Learn more at https://www.monetary-metals.com/THEWRAP/

Links:    

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/ 

Twitter/X: https://twitter.com/rcwhalen    

https://www.amazon.com/Inflated-Money-Debt-American-Dream/dp/139428571X

Use the code TheWrap2026 for 25% off your first year of The Institutional Risk Analyst https://www.theinstitutionalriskanalyst.com/plans-pricing

⁠

Timestamps:

0:00 – Preview

0:28 – Welcome to The Wrap

1:06 – 30-year yield hits 2004 high, 10-year breaks 5%

2:18 – 7%+ mortgage rates: the new normal

3:16 – What higher rates mean for housing and the mortgage industry

4:24 – Fed hike and whether Warsh has lost the long end

5:48 – Inflated and the University Club talk

6:34 – Gold and the return to a pre-WWI monetary system

7:40 – Sponsor: Monetary Metals

8:55 – Why rising yields haven't broken the gold thesis

9:49 – The dollar and a multilateral currency world

11:58 – October hike? The refinery capacity crisis

14:05 – Diesel, sulfur, and the fertilizer shock

15:40 – Double-digit inflation is "baked into the cake"

16:36 – The endgame: Iran and the Strait of Hormuz

18:22 – Demand destruction and why the Fed may cut

21:24 – Viewer Q: Selling Annaly, buying energy

23:36 – Viewer Q: Any shorts?

24:21 – Viewer Q: An oversight board for Congress and means-testing Social Security

27:42 – Why Social Security is invested in Treasuries

29:10 – Viewer Q: Will housing prices fall?

30:23 – Viewer Q: Private credit and long-term care policies

31:25 – Wrap-up

The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.

Michael Pento, president and founder of Pento Portfolio Strategies (PPS), returns to The Julia La Roche Show to warn that the U.S. faces what he calls a "triumvirate of bubbles" in equities, real estate, and credit, all inflated at once for the first time in history. He argues that years of persistent inflation, soaring national debt, foreign creditors stepping back from Treasuries, and the unwinding of the yen carry trade are pushing bond yields higher, and that rising rates will ultimately burst all three bubbles. For the first time since 2021, Pento gives a timeline: he expects 2027 to be a very difficult year as the Fed under Chair Kevin Warsh hikes rates and slows balance sheet growth, putting it in direct conflict with Treasury Secretary Scott Bessent's efforts to hold down long-term yields. Pento explains why he reluctantly uses the word "depression," why the traditional 60/40 portfolio could fail retirees, and why he believes the Fed will eventually return to money printing, triggering a prolonged era of "hyperstagflation." He also shares how he's positioned today, still net long, with short-term Treasuries, dividend payers, and precious metals, while watching credit markets closely because "the clock is ticking."

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links:

https://pentoport.com/

https://twitter.com/michaelpento

0:00 Cold open: "With reluctance, depression"

0:19 Welcome back, Michael Pento

0:59 The macro picture: 5+ years of inflation crushing consumers

4:16 Insolvency, foreign creditors & the yen carry trade unwind

8:15 Sponsor: Monetary Metals

10:06 The "triumvirate of bubbles": stocks, real estate & credit

14:40 Not a perma-bear: 35 years in the business

15:18 Pento's first timeline since 2021: why 2027

20:08 The forgotten middle class & why the pain is necessary

21:39 Sponsor: Augusta Precious Metals

23:12 Warsh vs. Bessent: are the Fed and Treasury at odds?

24:43 Who wins? "The free market always wins"

25:43 Why he's calling it a depression, not a recession

28:26 Retirees beware: the danger of the 60/40 portfolio

33:02 Where to hide in "hyperstagflation"

34:48 How Pento is positioned right now (still net long)

39:19 Is there hope on the other side?

42:32 The biggest risk nobody's watching: long-term rates

43:33 Record debt, private credit & "this is not normal"

46:28 How to follow Michael Pento

George Noble, CIO of Noble Capital Advisors and former Fidelity fund manager under Peter Lynch, joins Julia in studio as the 10-year Treasury yield breaks 5% and the Fed hikes rates. George says his call is "rotation, not recession." He's passionately bearish on tech and consumer discretionary and wildly bullish on gold and energy, which have been on fire this year. He argues the bond market is driving everything: runaway deficits and the AI capex boom are pushing up the global cost of capital. In his view, today's rates aren't abnormal; the long era of depressed rates was. He gives a pointed critique of Treasury Secretary Scott Bessent's attempts to suppress yields and explains why the Fed follows the market rather than leading it. He also makes the case that the real bubble is in earnings, not valuations. The conversation covers private credit, the housing correction, $40 trillion in debt, and the money illusion of pricing assets in dollars rather than gold. George explains why he thinks rates and oil keep rising until the market breaks, and why the risk-reward favors gold, energy, and cash over the traditional 60/40 portfolio.

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links:

George Noble's Best Stock Ideas Online Summit: https://noble-capevents.com/

X: https://x.com/gnoble79

Substack: https://substack.com/@georgenoble

Timestamps:

0:00 Intro

1:12 Big picture: "weeks where decades happen" as the 10-year breaks 5%

2:23 "R is for rotation, not recession"

5:18 How high can rates go? Why the ultra-low-rate era was the abnormal one

8:28 Why we're in a dangerous phase of the market

11:46 Why rotation comes before recession: deficits are force-feeding the economy

12:57 Passionately bearish on consumer, wildly bullish on gold and energy

13:31 George's critique of Scott Bessent, plus lessons from Soros vs. the Bank of England

16:45 "I am the house": Bessent, hubris, and Mr. Market

20:18 $40 trillion in debt and "banana republic" behavior

21:48 Midterm elections and what a sweep could mean for markets

22:20 The ticking clock in private credit and private equity

23:17 The Fed's rate hike: Warsh, word salad, and why the Fed follows the market

28:07 The real bubble isn't valuations, it's earnings

30:25 The housing correction is already happening

31:11 Money illusion: the S&P and bonds priced in gold, not "American pesos"

35:35 What "the market breaks" actually looks like

38:44 How George is positioned: gold, energy, cash, and picking stocks

39:17 Closing thoughts

Chris Whalen returns after the FOMC's 25-basis-point hike and calls it what he wrote in his notes: lame. His argument is that the Fed has become the tail and the Treasury the dog — with a $2 trillion deficit running above 6% of GDP, monetary policy is close to irrelevant, and Kevin Warsh will eventually be forced back into QE and debt monetization whether he wants it or not. That leaves Congress, which Whalen says has stopped doing the one job only it can do, prompting a provocative exchange with Julia about whether a fiscal crisis ends with a manager running the purse the way FDR ran 1933. From there the conversation turns to where the damage shows up: housing, where more than half of American homes fell in price over the past year and Whalen expects a real correction into 2028; private credit and insurance, where he agrees with Jeffrey Gundlach that private credit is the fuse and the insurers are the bomb, and warns annuity holders at the wrong carriers may not be made whole; and energy, where the Houthis' grip on the Red Sea may force the refining industry to redeploy away from the Persian Gulf entirely. He also walks through his own portfolio — Schwab, Flagstar, Annaly, AGNC, and steady additions to gold and silver — explains why he holds no T-bills, and gives his take on the SEC's innovation exemption, calling crypto tokens a polite form of fraud better regulated by state gaming commissions.

Thank you to our sponsor, Monetary Metals. Learn more at https://www.monetary-metals.com/THEWRAP/

Links:    

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/ 

Twitter/X: https://twitter.com/rcwhalen    

Seeing Around Corners book: https://www.theinstitutionalriskanalyst.com/product-page/seeing-around-corners-achieving-success-in-business-and-life-hardcover

Use the code TheWrap2026 for 25% off your first year of The Institutional Risk Analyst https://www.theinstitutionalriskanalyst.com/plans-pricing

Timestamps:

0:00 – Welcome back

1:03 – "The Fed had to do something or be irrelevant"

5:38 – Is the FOMC even relevant anymore?

5:57 – Treasury is the dog, the Fed is the tail

6:20 – The Fed will be forced to monetize the debt

6:48 – A dysfunctional Congress

9:39 – The age of uncertainty

10:00 – Half of American homes fell in price this year

11:12 – Misery on the Eights: the correction into 2028

11:24 – Gundlach: private credit is the fuse, insurance is the bomb

11:50 – How PE used insurers to compound too fast

13:28 – Why annuity holders are calling

14:02 – Duration matching and the part of the industry that works

15:28 – Energy

16:03 – Trump, the war he started, and no leadership

17:15 – Echoes of the 1970s — and Europe's winter

18:41 – Bank stocks are dead; deposit costs are rising again

20:34 – The AI trade

21:28 – Where do you put money with no clear narrative?

21:48 – Gold doesn't trade like a stock

22:20 – Chris on his own portfolio

23:06 – Schwab, Bank of America, and the low-hanging fruit nobody picks

24:52 – Crypto: the SEC's innovation exemption after Clarity failed

27:03 – Can Congress legislate at all after the midterms?

28:18 – Viewer Q: Does flattening change the Annaly call?

29:33 – Why Chris owns no T-bills

30:26 – What he's watching the rest of the year

31:37 – Close

The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.

Danielle DiMartino Booth, CEO of QI Research and author of Fed Up, joins Julia La Roche to break down the Fed's 25 basis point rate hike under Chair Kevin Warsh. The statement first looked dovish, but markets reversed after Warsh's record-short 29-minute press conference hinted at more hikes. That sent the 10-year Treasury to 5.01%, its highest level since 2007. Danielle argues Warsh has broken his own "zero forward guidance" pledge and is "enamored with his narrative" of a Goldilocks economy. She points to a labor market already in recessionary territory, with long-term unemployed now outnumbering job leavers. She says core PCE inflation is on a steady path lower, while households face mounting strain from gas prices, utility bills, bankruptcies, and tightening credit. The two also discuss the K-shaped economy and why Treasury Secretary Scott Bessent may not be done acting on the bond market. Danielle explains why peak AI investment, propped up by hyperscaler accounting gains, is the biggest risk she sees. She closes on an optimistic note about the work ethic of today's college-age generation.

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links:    

Danielle's Twitter/X: https://twitter.com/dimartinobooth  

Substack: https://dimartinobooth.substack.com/

YouTube: https://www.youtube.com/@DanielleDiMartinoBoothQI

Fed Up: https://www.amazon.com/Fed-Up-Insiders-Federal-Reserve/dp/0735211655

Timestamps:

0:00 Intro

0:40 Fed hikes 25 bps: the big-picture takeaway

1:22 Markets price in three more hikes after the press conference

4:21 Assessing Warsh so far: forward guidance despite his pledge

5:37 Fed projections: 2.5% core PCE, 4.1% unemployment

7:02 Sponsor: Augusta Precious Metals

8:26 Labor market already in recessionary territory

10:12 Warsh is "enamored with his narrative"

10:53 The household squeeze: gas, utilities, beef to chicken

11:47 Even the top of the K is losing confidence

12:19 AI was 100% of GDP growth, and real AI investment has turned

13:20 Payroll data quirks: the World Cup hiring surge

14:06 Sponsor: Monetary Metals

15:33 Trump's reaction: 10-year at 5.01%, stocks down

16:05 Scott Bessent isn't finished

17:04 Warsh gives Bessent the Heisman

17:41 10-year at a 19-year high, and the Fed was easing last time

18:14 What the Fed is getting wrong: August's one-off inflation blips

20:03 Core PCE is coming down, plus BEA methodology changes

20:56 Bankruptcy lawyers are making bank: record filings

22:23 Do rate hikes even work? Cash-out refis and credit tightening

23:29 The stock market isn't the economy: airlines and the top of the K

25:16 Is Warsh chasing the wrong monkey on his back?

25:47 Other worries: PE bankruptcies, rogue AI agents, socialism

27:22 Bernanke's 2% target and post-COVID stimulus

28:31 The risk keeping her up at night: peak AI investment

29:49 Hyperscaler accounting games and the "E" in P/E

31:40 What's making her optimistic

33:25 Wrap-up

Legendary bond investor Jeffrey Gundlach, founder and CEO of DoubleLine Capital, returns to The Julia La Roche Show. He warns that the market has "crossed over to the hard side of the street." With the Shiller CAPE above 42, he says history points to negative real returns for the next decade. Cracks are already showing in AI-related credit, where junk bonds and bank loans have widened sharply while the rest of high yield holds up. Gundlach says he now wants out of the AI "epicenter" entirely. He walks through his current portfolio: equal-weight equities, a barbell of high-quality bonds and local-currency emerging market debt, gold, commodities, and short-duration "dry powder." He expects CPI to print above 4% as oil tops $100 and diesel hits $8 a gallon, and he predicts a 25 basis point hike from Fed Chair Kevin Warsh. He also explains why 30-year TIPS won't protect investors from rising rates and why he's skeptical of Treasury Secretary Scott Bessent's Operation Twist. He sees a dangerous web of private credit, arbitraged credit ratings, and offshore reinsurance, calling private credit the fuse and insurance companies the bomb. He urges annuity buyers to stick with mutual insurers and warns that bailout pressure will be intense when the AI and private markets reckoning arrives.Thank you to our partnersAugusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052Monetary Metals - learn more at https://www.monetary-metals.com/julia/Links: YouTube https://www.youtube.com/@DoubleLineCapitalWebsite: https://doubleline.com/Webcasts: https://doubleline.com/doubleline-webcasts/0:00 Intro
1:16 Shiller CAPE, a decade of negative real returns?
3:33 The mood turns: AI credit starts to crack
8:10 Gundlach Unlocked: his new portfolio with zero AI exposure
12:12 Gold, plus commodities and dry powder
17:25 Rising rates and the $40 trillion debt milestone
17:55 Operation Twist and the endgame for the debt
22:19 Oil above $100 and a near-empty Strategic Petroleum Reserve
25:12 Why CPI is headed above 4% and Warsh's 2% promise
28:54 The German Bund and GDP model for the 10-year
31:54 When he'd buy long bonds
35:27 Will Warsh hike?
38:31 Advice for Scott Bessent?
40:14 The Fed follows the 2-year
41:20 Dollar debasement and the 30-year TIPS myth
43:29 Why you can't trust credit ratings
46:27 Private credit is the fuse, insurers are the bomb
53:25 Peak optimism: this feels like 1999 and 2006
1:01:18 Final warning: the hard side of the street

The Wrap with Chris Whalen is back after a summer vacation with a blunt read on the fall ahead: affordability — fuel, housing, food — has already decided the midterms, and the Iran conflict plus the Russia-Ukraine war have created a shortage not just of crude but of refined products, with refinery maintenance season and the shift to heating oil set to push prices higher still. He calls $100 oil and a 5% 10-year Treasury the new normal, argues Scott Bessent's buyback strategy has failed, and expects a quarter-point hike next week while raising the more unsettling question: what happens if the Fed raises short rates and the long end goes up anyway? On gold, Whalen is still accumulating, sees $6,000–$7,000 only after a fiscal catalyst like a bad Treasury auction, and points to Shanghai's gold-linked clearing system and Russia's 100-ton sale to China as evidence of where physical demand really lives. He also answers viewer questions on the exodus at Fannie Mae, the flawed data behind credit scores, how to actually save in gold, why he owns only Flagstar and Schwab, and warns that Florida's home price correction is coming for the rest of the country next year.

Thank you to our sponsor, Monetary Metals. Learn more at https://www.monetary-metals.com/THEWRAP/

Links:    

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/ 

Twitter/X: https://twitter.com/rcwhalen    

Seeing Around Corners book: https://www.theinstitutionalriskanalyst.com/product-page/seeing-around-corners-achieving-success-in-business-and-life-hardcover

Use the code TheWrap2026 for 25% off your first year of The Institutional Risk Analyst https://www.theinstitutionalriskanalyst.com/plans-pricing

Timestamps:

0:00 – Welcome back: summer's over, a lot to catch up on

0:50 – Energy prices and the midterms: decided at the pump?

1:13 – Affordability is the story: diesel, heating oil, Europe's supply crisis

2:51 – The $5,000 "Trump dividend" and buying votes

4:13 – What nobody in Washington will say about insolvency

5:00 – FDICIA, continuing resolutions, and a Congress that can't say no

6:34 – Oil near $100: does it get worse from here?

7:33 – Rates "going back to normal" after 15 years of Fed subsidy

9:24 – Calling 5% on the 10-year — and Bessent's failed buyback strategy

10:29 – Warsh rules out QE, spreads tighten anyway

11:57 – Why banks are suddenly buying multifamily

12:58 – Is 5% a stop along the way or the destination?

14:31 – What Chris expects from the Fed next week

15:06 – The big question: what if the Fed has lost the long end?

16:11 – What losing control of long rates would actually signal

17:24 – Gold with David Kotok, and why it's not a trading vehicle

18:28 – Tom McClellan on the oil–gold relationship (with a 16-month lag)

20:09 – A quiet year: banks, AI trade, and boring winners

21:17 – What takes gold from $4–5K to $6–7K

22:00 – Russia sells 100 tons of gold to China

22:53 – Is the dollar really in decline? CIPS, Shanghai, and sanctions

24:12 – How high can diesel and Brent go this winter?

25:30 – Iran, the Houthis, and the Red Sea

26:59 – Viewer Q: What's happening inside Fannie Mae?

28:30 – Pulte, VantageScore, and the bad-data problem in credit scoring

29:39 – Viewer Q: How do you actually save in gold?

30:45 – Florida home prices are falling — "Misery on the Eights"

31:31 – Viewer Q: The big money center banks

32:47 – Viewer Q: Book recommendations and the gold book

33:23 – Closing thoughts: an age of instability

The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.

New York Times’ bestselling author Larry McDonald, founder of The Bear Traps Report, returns to The Julia La Roche Show to break down what he's hearing from the veteran investors in his network — and the shift he's watching in real time. Portfolio managers who spent two years as raging bulls have turned bearish on the financials and are quietly spending a slice of their gains on downside protection while volatility is cheap. McDonald walks through the mechanics of the data center financing boom: hundreds of billions in off-balance-sheet debt from the hyperscalers, the banks now holding that exposure, and the credit default swaps those same banks are buying on the Mag 7. He explains why he sees a late-2006 rhyme in private credit and the CCC market, why diesel prices could re-spark inflation over the next few CPI prints, and why the most crowded trade on Wall Street right now may be the bearish one on bonds. Plus: the "supernova" dynamic that turns a hot economy into a fast recession, why he's still long hard assets, and the one risk he thinks almost nobody is talking about.

Thank you to our partners

Augusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052

Monetary Metals - learn more at https://www.monetary-metals.com/julia/

Links:

How To Listen When Markets Speak: https://www.amazon.com/Listen-When-Markets-Speak-Opportunities-ebook/dp/B0C4DFVFNR

Colossal Failure of Common Sense: https://www.amazon.com/Colossal-Failure-Common-Sense-Collapse/dp/B002IFLWMK

Twitter/X: https://twitter.com/Convertbond

Bear Traps Report: https://www.thebeartrapsreport.com/

0:00 — Intro

1:18 — A million books sold, and what the ideas dinners reveal

3:07 — Where the smart money is shifting right now

4:39 — How investors are buying protection: CDS, puts, VIX ETFs

5:35 — Late cycle: data center financing and the Mag 7's cash burn

7:00 — Meta's $30B off-balance-sheet financing and what banks did next

8:22 — Why banks are buying CDS on the companies they lend to

9:42 — Lehman Systemic Risk Indicators: CCCs, LQD, private credit

11:00 — "You're manufacturing Bernie Madoffs": no business cycle, no cleansing

12:21 — Midterms, the Treasury, and the DSA risk to the long end

17:00 — Why inflation isn't as tame as it looks — diesel is the tell

18:56 — Scott Bessent vs. the "faculty lounge" Treasury

21:44 — The Google bond at 88, the Apple bond at 49

23:39 — Are there hidden SVBs out there?

25:55 — The contrarian trade: buying duration when everyone's bearish

27:42 — What the bond market is signaling

29:40 — Why the bad news is 80-90% priced in

31:49 — The supernova effect and how recessions actually start

33:06 — Hedging equities: puts on the financials at record price-to-book

34:30 — Biggest under-the-radar risk

36:00 — What he's still long: energy, coal, copper, gold miners

37:22 — Where to find the Bear Traps Report