저자: EdDodd · 외국인
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AI 주도 주식 시장이 과열 정점이며 AI 관련 재정 조달(순환적 거래)이 막히고 있다고 주장. 엔비디아·OpenAI의 정부 지원 요구 논란을 신호로 해석하며, CDS 스프레드 상승과 신용 긴축을 근거로 경기침체가 이미 시작됐다고 봄. 침체 시 연준이 뒤늦게 대폭 인하할 것이며 현금 확보 후 저가 매수를 권고. 비트코인과 알트코인 약세를 위험자산 선행지표로 해석하고 주택가격·임대료 하락으로 인플레 둔화를 예상.
다듬은 글
Another day, another hedge fund manager telling you to raise cash that we're at the top of the market bubble and it is a time to be prepared for a guaranteed recession. Now, this individual, Ed Dodd, interviewed on the Julia LRO show, which I'm pretty sure she's a CNBC analyst like Sarah Eisen, which it seems like CNBC is starting to really promote the whole podcast scene.
Uh, but they don't really brand it CNBC. Kind of kind of interesting how they do this and I'd love to find out details on that. But anyway, uh, what's going on here is you've got somebody tossing some bear poop and I think we should listen to it to see if he has a point. So, I've gone ahead and cut the most critical components in my opinion and we'll react to it.
Let's listen in. First, we'll talk where we'll start where he talks about how we're in the stock market mania right now. Let's get into it. You know, it's being driven by seven stocks that are 40% of the S&P market cap right now. It's the AI stocks and we are at a feeding frenzy of AI circular. They call it the cir the circle jerk of financing.
There's no there there's no money to fund all this. This is the problem. They there they want trillions of dollars, but their revenues aren't there. The ROI is not there. And the markets are starting to figure this out. And that's why they're doing all these circular deals to keep their uh their you know I guess the momentum of hype going.
And then yesterday or the day before Sam Alman and and and Jensen at the same time said two things. They wanted uh Jensen said China's going to win and Alman said we need a government back stop basically and then he denied it. Then it came out that two weeks ago in a memo they asked for a government back stop.
Okay, both of these people, just to add clarity here, denied uh the their their original comments. So, you had Jensen who walked back the China is going to win comments after it sounded like the Trump administration got pissed. Mind you, we have Nvidia earnings this week, so it should be quite entertaining.
Uh those along with jobs data for September and the new uh ADP weekly report. Uh we'll get the EDP weekly report today and then uh sorry tomorrow and then of course later this week we'll go ahead and get the other data. But Jensen walked this back after I believe the Trump administration was pretty disappointed in Jeden.
Uh and then Jensen said don't worry you know the United States we are still substantially ahead but he was really planting the seed for dude stop like we need to we need to go all in here on supporting the chip industry which was interesting. Uh I think part of it is because Jensen really wants chip sales to China.
The problem is you just had companies like uh Amazon blocking or supporting the blocking of Nvidia chip sales to China mostly because there was also reporting that Alibaba is potentially utilizing artificial intelligence to help the Chinese military potentially against uh the United States. And you know that that'll piss the United States and White House off.
But yeah, take a look at this. Amazon and Microsoft back effort to curb Nvidia exports to China. Uh so you could this tension has been very real and this is one of the reasons why Jensen's like, "Hey, if we sell China our chips, then they're relying on us. Come on, let us sell chips." Jensen wants the revenue.
He's about to tell us that they're expecting a tr, you know, half a trillion dollars of revenue uh in this next earnings call. It should be a phenomenal earnings call. Of course, how the market reacts is a totally different story. And then of course, yes, Sam Alman essentially did ask for a government back stop, then came out and denied it.
The CFO asked during an interview. Then they denied it. Sam Alman walked back her comments. No, no, no, no. We, you know, we're just saying like, hey, things would go faster if if the whole industry was supported. Uh, and then of course a White House memo comes out which says, "No, yeah, we basically have been exactly asking for a government back stop because it would make financing cheaper." which making financing cheaper is exactly what people are worried about today because you even had Jeffrey Gunlock just this morning come out and say raise 20% cash because the private credit bubble is a ticking time bomb and there's a reason credit default swaps are going up because credit risk is starting to be realized as being very very dangerous.
Well, here we are. Uh, now you've got Nvidia asking for help from the government and open AAI. And in other words, Ed here is saying they want that's a bad sign. Well, we'll see. They want government guarantees. So, that signals to the market a couple things. What does that signal? That signals that the financing of this uh this bubble is coming to an end.
We're starting to see it in CDS spreads, credit default swaps. Coreweave is exploding up. Oracle is exploding up. And so the financing is getting tight because the mark the credit markets are starting to tighten. Keep in mind some of that increase in CDS's, those spreads could be hedging, you know, and it's sort of it's I mean that's what CDS's are, right?
It's taking out an insurance policy. So some people are like, you know, a lot of people are still very long these names. Maybe it's just hedging. Who knows? Or it's the start of something in in general because there's economic woes. We saw some uh subprime auto companies go bust. So the credit markets are tightening and so the finance
that wasricolor first brand thing for this whole this whole um you know I guess momentum AI hype is coming to an end and Jensen and Altman told you that because they want a government bailout at all-time highs on Nvidia stock. I wouldn't go as far as calling it a bailout, but I do think that Jensen wants the government license to go sell more to kind of keep the cycle going.
And I do think that Sam Alban absolutely believes that if the government backs stopped the underlying chip values, then you could finance into infinity. But now you completely remove the market weighing any kind of risk and you actually create guaranteed excess. We probably already have excess, you know, we probably already way too euphoric, but that just guarantees it because you basically license excess.
It's always the rich that get bailed out by the government, isn't it? So, this this is this is a signal that demand is rolling over and financing is getting difficult. So, the end days are near. I suspect the Trump administration the end days are here. My gosh. Will, you know, take equity stakes or do something.
Uh, today it came out. They're trying to figure out they denied it yesterday. David Sachs denied it. Uh but then today we're seeing PY uh talking about using Fanny and Freddy to take stakes in in in these companies. This is madness. They're buying at the top and once they do this, I suspect those stocks will have one more pump and then it's over.
So, hey, that sounds bullish. One more pump. The euphoric end to the Nike smoosh. I don't know. Some would say we already hit the euphoric end. We're just waiting for the the the uh the S&P 500 and the rest of the global indices to roll over. They all have similar characteristics. They're very narrow markets and uh the stock market is kind of hiding what's going on on the street and what's going on in the street is a disaster.
And this is, you know, we tried to tell the Trump administration they should have us sit down with the American people and say, "Look, there's going to be a hangover from our policies to get us to the golden age." They're now declaring the golden age is here. That's wrong. affordability is not inflation is coming down, but it's not coming down as fast.
Keep in mind, this guy voted for Trump. And what he's really asking is for Donald Trump to sit down to the American people and go, "Look, we've got a hangover here from all this crazy illegal immigration that happened. We're going to slow this down. We're going to have some tariffs to try to re-industrialize America.
It's going to put us through a recession, but it's fixing what we needed to do." He makes this argument. I'm summarizing that part so we don't have to spend an hour through it all, but and you could watch it obviously yourself, but it's an interesting argument that he makes. He's like, "Hey, the president should be honest with us." What do you think he forgets is the psychology of that?
The president comes out and says that, you'll immediately cause a dash for cash and you'll literally induce the very recession that ideally you would try to avoid. You would remove any chance of avoiding a recession if you did this. as people would like. There's still health care costs rising because of the co debacle.
Uh so we are we are at the precipice of um this becoming apparent to the masses. But you know if you look at what the institution aka stock market down is what he means when he says apparent to the masses are doing they're starting to slowly reallocate to treasuries which is the safety trade and there's we're in the distribution phase of the stock market meaning the insiders are selling to the uh retail investors and if you look at insider sales they're unprecedented record so we're we're close we're I I believe when we look back on this we will see that we're already in a technical recession right now.
Uh the third quarter numbers are coming out. People are talking about 4% but you know that's that's mostly uh da uh AI databases but probably because a lot of that data that goes into the GDP calculation was held up. So we didn't actually get all of the data right about half of the GDP is that that's all we got going on right now is database building.
every other part of the economy is rolling over and people are feeling it. And you know, look, I I I call balls and strikes. I voted for Trump. Uh but you know, they came out yesterday and they basically gas lit everyone. Said the economy is great, jobs are coming back and uh affordability is is fabulous.
It's unfortunate nature of a politician. You kind of have to fake it till you make it. And it's that's just gaslighting. The economy is not great. We're hurdling towards a recession and and if you look at Bitcoin, Bitcoin is usually an early harbinger. Bitcoin is now year-to date underperform US treasuries or perform slightly worse than US treasuries.
What he means here is that Bitcoin is a leading indicator of what risk assets are doing. And it's not just Bitcoin. I mean, really, if you look at the alt market, alt season, I mean, people have been waiting for alt season for a very long time. And the alts are just absolutely getting reamed. Uh I mean not just on on uh you know the 7-day but if you go out for just the last 6 months on on some of the alts the vast majority of these are red.
I mean, yeah, I mean, if you look at various different ones, some of them are going to have a little bit of green and life, but boy, a lot of the alts, I mean, this is a sea of red here, and this is on the 7-day. Uh, and and this this is true when we go out towards uh some of the uh uh the 30 days or even the six-month numbers as well.
Uh, and it has frustrated a lot of people in the cryptocurrency market because the thought has been, hey, like, you know, the stock market is at record all-time highs. Why are we not seeing more movement uh in the alts? Uh you know, here now all the way on the far right, I added the 30-day column. And you could just see, yeah, you've got some here, Monero, and uh what do we got over here?
UniS swap up 30% on 30 days. But it's it's mixed into mostly a sea of red over here. Pretty wild. Uh and so this could be an early indicator of risk asset saying, you know what, we've got too much exposure to debt. it's time to diversify from some of this debt, which I'm a big advocate of. A big big big advocate of saying, "Hey, you don't want debt right now." I I worry that one day you're going to wake up and like your stocks are going to be down like 20 or 30%.
And as soon as the market opens, you get an instant margin call. Terrible time to be in margin, my take. So, Bitcoin is probably going a lot lower. That's an early warning indicator of liquidity drying up. Uh, you know, nothing against the Bitcoin people, but it's not a store of value. It's a speculative instrument that's 95% correlated to the NASDAQ.
period and inflation is coming down and we'll get a deflationary scare soon enough once hous uh interesting to say that Bitcoin is 95% correlated he said to the NASDAQ that would be to tech stocks somewhat true you tend to see that relationship I don't know that Bitcoin leads as much as it follows uh it used to back in 2021 it was a really good tool for that but lately it's certainly been leading uh it just hasn't done that a lot this year so it is it is quite interesting there's been a little bit of a divergence uh but anyway uh as far as things are going a lot lower.
He's not the biggest fan of um uh you know pumping it up right now, is he? Collapses cuz housing is 36% of the CPI and that's coming. Ah, right. Okay. And then he makes the argument that because illegal immigration has slowed down so much in areas that were big beneficiary areas of not just overbuilding but also surges of immigration.
you could see rents come down and that ends up driving inflation down substantially more. We know that owner's equivalent rent, yes, housing, like you mentioned 36% of CPI, it's only about 25% of PCE. But he is right. If we do continue to get flatlining rents like we're seeing on apartment buildings right now, especially or or even falling rents in in some parts of the Southeast, yeah, I mean, you you're you're going to keep pushing inflation down.
You know, there's this study that was circulating from the Federal Reserve that, oh, tariffs don't cause inflation over the long run. They just lower GDP, right? I mean, but this is what people have been saying that tariffs would lead to a one-time increase in inflation because that the tariffs were applied over a larger period of time, you know, over let's say 6 months.
We might see that bump over 6 months, year over year, but after that, you sort of build in the prices and then you don't have actually long-term inflation. What you have is a long-term compression of the economy which actually then when you compress the economy what a surprise leads to disinflation potentially even as he just mentioned a deflationary scare if you go through a recessionary period that's when you get the Federal Reserve to print print the question is will the Federal Reserve print early enough or will they follow history absent what they did during COVID and actually be too late to print
so they're going to be behind the A-paul and that's well there's your the Fed will be behind the eightball when things really get going and uh we see the credit markets blow out, there's some uh bank issues, bank stocks start collapsing and and the general indices start going down quite a bit, we'll see the Fed panic and cut 50 to 100.
That that by the way would be a form of a shock, which we are shock primed for that now with where we sit with yield spreads. I don't know when that's going to it could happen. It could happen before the end of the year or sometime in the beginning of the year, but the Fed will panic. at some point because they're so behind the curve.
It's it's and it takes Julia is like speechless here. It takes 18 months for interest rate cuts to actually affect the real economy. So these cuts, you know, won't save the stock market. They won't save risk assets. That is a big belief right now is that oh well, you know, if we just if the Fed just starts cutting, you know, oh, we'll we'll be rescued.
Everything will be fine. They're not going to cut enough until it's too late and and the amount of pain there. There'll be a you know a risk asset rally, but not not anytime soon. What happened and and why if he doesn't do it soon, it doesn't matter what I say or you say and we can say it's Biden's fault.
The American people won't, you know, the opportunity to communicate this and lay blame where it is is is passing quickly because you're gaslighting. It's not a good move. What this this, by the way, I cut that in from the interview. This was him where he makes the argument that Donald Trump should take the opportunity now to basically say, "Look, we're going to go through a recession and blame Biden uh for that now rather than gaslighting and say everything is fine." That's where that is.
I said in January, February, there needs to be fireside chats. We're going to cut government spending, the illegal immigration, juice the economy for two years. I'm stopping it. Uh we're going to have a recession and I'm going to do trade deals and I'm going to bring manufacturing back. We're going to have some
again like if you did that, you would literally just engineer a recession. We know he's not the biggest fan of what happened with immigration. We got that loud and clear. But there there is a little bit of a problem here with with messaging potentially creating reality. As much as we would like that teacher or that doctor that says, "Listen, this is going to be hell, but we're going to get through it." There's a reason why politicians usually prefer to gaslight us.
And people people are scrambling for dollars right now because things are getting tight and the dollar uh dollars are valuable because the the best uh remember the fund manager survey at Bank of America. It says hedge funds have or fund managers have the lowest available cash right now that we've seen in quite a long time.
And it has triggered the Bank of America sell indicator. So when cash allocation falls under 4% uh and even worse if it falls under uh 3.8% they say time to start thinking about selling uh and so cash is becoming scarce not just amongst fund managers but also amongst retail. I mean really the way we're seeing extra inflows in the market right now is just more debt.
We saw with the Robin Hood numbers that debt has increased on a month- over-month basis in the highest most extreme manner that we've seen for the duration of the chart they gave us. So, it's not great. Uh, collateral to shore up margin accounts and other things. So, that's why the dollar liquidity issue is going on.
And, you know, I I I think one of one of the benefits of this recession that's coming is we'll be able to term out our short-term Treasury bills into longer term notes. So, we're going to be able to do that. But, okay. Basically, what are the benefits of the recession coming? First of all, that line is like so like it's guaranteed happening.
I mean, I'm on the 50/50 teeter totter. This guy is like, "No, man. Foregone conclusion. We are going into recession." He's like, "Oh, we'll be able to do what Janet Yellen wanted to do, which is uh, you know, lengthen our our duration at lower interest rates for debt." But, you know, it'll also give us an opportunity to buy things cheaper, I suppose.
Okay. It won't it won't be be because of uh you know economic growth. It'll be because of a recession. So our Treasury Secretary Besson that's the argument about inflation coming down and yields coming down. He's making the argument no yields are not going to come down because of growth like Besson says or Lutnik or Slutnik or um whatever his name is.
Uh but but instead it'll be because of a recession. uh we'll have an opportunity to take Yelen frontloaded our our debt with the Treasury bill issuance. He'll be able to term it out at much lower rate. Term it out is is strength is lengthening it. Janet Yellen talked about doing that but never actually did it.
That was his frustration here. Just to clarify that because Yen Janet Yellen did talk about that. I'm not suggesting you take out a helock. Do not do that in this environment. But oh, this is his suggestion. I love it by the way. Don't take out debt. Uh the bottom line is if you own if you own your single family home
and you only have one property, you sh shouldn't care about whether it goes up or down as long as you keep your job and you can pay your mortgage. Basically, as long as you're not going to go bankrupt on your mortgage, doesn't matter if there's any kind of fluctuation in real estate values. What about stons, homie?
We are h hurtling toward a recession, as you put in the conversation. I think we're already in one. I was going to ask you are we in I was like are we in a recession now? We're in one. We'll find out you know a year or two from now when the official when they do the official stats. Okay. From what you can share like how are you thinking about this environment and how you want to be allocated?
I I've said you know for I I I was early like Warren Buffett and I've said you want to be uh and again this is up to you personally where you are in your life. If you're young, you know, don't freak. If you have a 401k and you're 30, you know, raise some cash so you can, you know, buy at lower prices.
If you're near retirement, raise more cash and then once the the storm we're in the in the thick of the storm, you go you go back in. You just want to have flexibility and opportunities to uh take advantage of what's coming so you can sleep well at night. Take advantage of what's coming and sleep well at night.
I actually love this. And I'm not suggesting everybody rush for cash, but I have been a fan of raising cash. You know, the alpha report we've been sending out, I've been sending alerts on here's what I'm selling, here's what I'm buying. And it's not just the tickers or my top 10 stocks to buy for the next 10 years, even if we go through a diply doodle, but it's the ratio of selling to buying that I'm doing.
So, I kind of agree with his race cash idea. And and it is not just about trying to like time the market, but it's also for that peace of mind, that psychology that hey, if if poop hits the fan, I'm I'm already prepared. I've already put together a war chest to go shopping. You know, you can get the alpha report over at me.com.
Uh but let's uh listen to him finish this out. Um I never tell people what to do, but it's called dry powder. And I've done some consulting on the side with people and you know a lot of people who who call me are already wellprepared. I guess it's more it's more of a psychology handholding uh situation to make them feel good.
So you know recessions are painful and bad but there's also on the bright spot you come out the other side asset prices are lower. Millennials can participate and get you know buy homes and that generates a lot of economic activity. And oh by the way, um you know, if millennials and young people have a stake in the country through asset ownership, maybe they won't elect communist mayors in New York.
We'll leave it on that. Look at Julia's face there. Well, I I I guess you could tell their opinion on uh on Mr. Mamani in uh in New York, but wow. Okay. So, I mean, he has a point. If asset prices come down, it gives you an opportunity, gives Gen Z and millennials an opportunity at the the prime of their working career to over time build exposure to assets.
I'm a big fan of that. I do worry that people are going to get hosed and what'll actually happen is the opposite is that people who are now swiping up on stocks and swiping up on leverage end up getting so freaking hosed that they end up taking a decade off and they're like, "Oh, hell no. I'm not touching stocks again in my life.
And it takes them 10 years until we get to the next bull run for them to buy again and they're buying at the top again. Like something to think like put like a sticky note on your desk or something. If we have a recession, fitty fitty chance in my opinion if it happens. Please spend the 10 years from the bottom up.
From the bottom up slowly acquiring, acquire ownership. That's all you want over the next decade. Work hard. Put the blinders on and acquire. Acquire. Acquire. What do they say? Be greedy when people are fearful. Bro, we're like 4% off all alltime highs and if you look on Twitter, it seems like people are fearful on X. We're not even close to fear y Kevin. Always great to get your
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