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July ended up being a painful month
It was the Nasdaq's worst July in 22 years
Bonds experienced their biggest July yield-spike since 2005
And oil's saw its biggest July price increase in over 30 years
What's driving all this?
Is this just a mid-year pressure-release before prices resume climbing?
Or are these signs that momentum is rolling over?
Most importantly: what does all this mean for investors?
What positioning makes sense in this environment?
For answers, we're fortunate to welcome back money manager Michael Pento, founder & CEO of Pento Portflio strategies.
#bonds #marketcrash #deflation
0:00 – July’s painful stats: NASDAQ’s worst month in 22 years, biggest bond yield spike since 2005, oil’s biggest jump in 30+ years
2:33 – Pento’s proprietary 20-point model and its five stages/sectors
3:07 – Why 2026 has been so difficult: extremely compressed cycles since the February 28 Iran conflict
5:05 – Current portfolio positioning: neutralized, heavy equal-weight S&P 500, some inflation/disinflation protection, gold & hedges (Sector 3)
5:43 – How the Iran conflict drives U.S. yields higher through Japan, the yen, and Bank of Japan Treasury sales
7:50 – Long-term outlook: deflationary depression after the current chaos ends
8:32 – Clarifying Sector 3 as the current “stasis” / safety positioning
10:03 – Sector 1 defined as deflation + recession/depression
10:46 – New Fed Chair Kevin Warsh, his inflation target, and the growing balance sheet
13:05 – Why the Fed must move from an “ample” to a “scarce” reserve regime
14:42 – The credit bubble: $1.6T private credit, $1.4T CLOs, $1.5T junk bonds + $570B in AI-related debt expected in 2026
15:17 – National debt at 123% of GDP and 720% of revenue — government balance sheet is broken
16:31 – Next recession likely drives annual deficits toward $6 trillion
18:03 – Preparing clients for another lost decade in stocks
19:48 – Why Pento believes Warsh will eventually attempt balance-sheet reduction
21:00 – Extreme valuations: market-cap/GDP 230%, price-to-sales 70% above average, record margin debt
22:24 – First time in history with concurrent equity, credit, and real-estate bubbles of record size
23:31 – 30-year yields at highest levels since 2007; bond vigilantes taking control
25:29 – What the bond vigilantes are reacting to: debt supply (AI + Treasuries) + Japan catalyst
28:02 – U.S. intervening in the yen market as a short-term band-aid
28:54 – Would the U.S. be in better economic shape without the Iran campaign?
34:06 – Implications for the K-shaped economy and the bottom 80%
35:38 – Expected sequence: bubble burst → banks fail → unemployment spikes → hyper-stagflation policy response
51:12 – Signs the AI mania may be cooling (semis, South Korea, plunging Chinese model inference costs)
58:34 – Economy already slowing: household survey shows large job losses year-to-date
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