David Hunter of Contrarian Macro Advisors rejoins the podcast to update listeners on his prediction of a ‘parabolic melt-up’ in risk assets that will be followed by a ‘deflationary’ bust.
Over the course of the 40-minute conversation, Hunter also updates his forecasts for rates, technology stocks, commodities, and more.
This podcast was recorded the morning of Monday, March 22 and made available to premium subscribers that same day.
Content Highlights
(Spotify users can click on the timestamp to link to the start of the segment directly)
(Spotify users can click on the timestamp to link to the start of the segment directly)
- The coming ‘parabolic melt-up’: new targets for stocks and bonds and timing (3:01);
- What will cause the bust: The Fed will be forced to tighten, despite chairman Powell’s current (sincere) views. This will not likely be by raising interest rates but by tapering bond purchases (7:01);
- Unlike many of his predecessors, Powell is actually trying to be transparent so those conspiracy theories (including one voiced by the host) are probably wide of the mark (9:36);
- “It won’t take a big tightening to send us back in the other direction in a hurry.” People are underestimating how fast this can happen (16:37);
- For now the stimulus checks and reopenings have not worked there way through the economy yet. They may not have even started. This will lead to the “final, vertical phase” of the melt-up (21:48);
- The coming bust will see a 80% correction, peak to trough (25:14);
- What comes after that: the deflationary bust (32:02).