Markets Repeating 2008: Trader Reveals Best Places To Hide | Todd Horwitz

We are setting up to have another 2008. The highest amount of defaults on mortgages since 2009 are happening [clears throat] right now. They couldn't pay their debt off if they wanted to. I'm still and I'm still shorting guys. I don't think there's enough money to handle this and there's way too much debt and there are way too many other issues in this overall economy in my opinion. >> Markets are setting up for another 2008. That's the grim prediction from my next guest, Todd Bubba Horowitz, founder of bubbrading.com. We'll be going over what Todd likes, what he doesn't like, the outlook for interest rates, and why he thinks consumers are so weak right now. Well, we'll also be going over what to make of this current selloff in the semiconductor space and whether or not that's indicative of the rest of the markets to come. This video is sponsored by Koshi. It's the largest prediction market in the United States. Unlike a sports book, you're trading peer-to-peer on real world events from economic data to political outcomes. And the price moves based on public opinion, not a house. Go to the link in the description down below or scan the QR code here to get started. And new users who use my code lin can get $10 when you trade $10. Right now, traders are predicting that there's a 71% chance that there will be a next the next FET rate hike will take place before July 2027 and a 60% chance that there will be a hike before 2027. If you believe that there's going to be a hike before 2027 and let's say you put $50 down on this particular trade, your payoff could be $79, $80 if you're correct. Todd is actually going to reveal to us what he thinks is going to happen to Fed monetary policy and when we can expect the next Fed rate hike. So stay tuned for his answer. Welcome back to the show, Todd. Good to see you again, >> David. Always great to be with you. A great show and I'm happy to be here. >> Great uh show because of great guests like you. So, thank you for being back. Oil, uh, you were previously, um, I I I believe you wanted to short oil. Correct me if I'm wrong. And, uh, that worked out, uh, well into May and June. Now, the Iran war has reigniting. Uh, ships are getting attacked once again in the straight form moves once again, effectively closed after a ceasefire. Oil's on the rebound, $82 a barrel. Are you still short? >> Yes, I'm still and I'm still shorting. I sold some at 85. Uh, look, at the end of the day, no matter what's going on in the Middle East, a, it shouldn't have as much of an effect on WTI. Number one. Number two, there's a there's a worldwide glut of oil laying around that we can't use as we have now. So, if we go back and look at the beginning of the Iran war when oil spiked to 120, the next big action spiked it back to 100. Now, we're back to 90. And now we're back in the 80s. And again, I still believe that by year's end, we'll probably be be in the low 60s or high 50s, if not lower. Uh there's a big problem in the economy, big problem with oil and and again, all the all the news has not changed that dramatically yet. The price of oil has come down consistently and we've just had a little bit of a rally back from 75 to 85 and I think that's about as far as we're going to go. I would look to be a seller still. >> Do you think inflation is reigniting again? We had two uh inflation prints that were lower than the previous month. So, it's been on a decline. What's happening next? >> Oh, I I think we have a problem with the numbers that we get. I I I have to I have to argue with numbers that are reported from the government. Uh you go to the store, inflation is high, gas is high, and [snorts] gas, let's face it, the component of fossil fuels is is the biggest component of the economy. So when you look at it and you're paying, you know, depending on where you live, but let's say the average now is $4 at the pump, okay? Very bit very big political number as well, but you're paying more for gas, which is a big part of your expenditures. You're paying more to deliver the goods to the store. So you're having to pay more there. And of course, the prices have not fallen commensurate with the initial spike in oil that we got when this whole thing started. prices have come down nowhere near as fast as the actual crude itself and of course that is going to lead to much higher inflation. Uh we still see uh the beef prices are still high although coming in a little bit but again we have a lot of expensive prices here and those prices have not come down putting a lot of stress on the consumer and the consumer will continue to struggle. Again, listen, if you're in the top end of the K, it's [clears throat] no problem. But it's for the for the majority who are deep in debt with defaulting on their credit cards or minimum of 90 days past due. There's a lot of problems out there. And I think that the Fed's going to be forced to hike rates no matter what they talk about. And of course, the the markets are pricing in a rate hike as well. >> Who's forcing them to hike rates? >> Well, the inflation is going to force them to hike rates. I mean, that's the free market is saying that interest rates are higher. And of course, if you're going to slow this inflation pace down, you know, there's good inflation and there's bad inflation. The inflation we have now is very bad inflation because it's it's driven by [snorts] a lot of the stupidity that the Fed used over the years taking trying to keep interest rates lower. So, it's created a lot of this mess. It's created a lot of this excessive debt that the consumer is now feeling. So, unfortunately, they're going to have to bite the bullet and and hike these rates and whoever gets hurt gets hurt. But you're going to have to in capitalism, you have to clean out the weak and and let those start over. And and that's what I think you're going to see happen here. >> Todd, what are other trades you're eyeing right now that have the potential to move uh extremely uh bullishly or bearishly in either direction here? >> Well, I I think if you look at tech, I mean, tech has taken a little bit of beating. The semiconductors have taken a little bit of a beating, but I think they still have a lot more room to go on the downside. I think, you know, because we're in the middle of earning, not even in the middle, we're in the very beginning of earning season. I think, you know, tomorrow you get Tesla and you get Google. Okay, those have a potential to move dramatically. Now, Tesla's been kind of flat, trading between, you know, 350 and 450 for a couple of months. Google had made a big move and made all-time new highs. I could see I could suspect you could see a significant drop in Google on their earnings unless they're just some unbelievable massive blowout number. But now a lot of people are looking into what is their commitment to spend for AI and that has been a little bit the of the of the the beating that some of these stocks have taken because the amount that they're going to spend but I think you'll see uh you know Nvidia's been under some pressure. I think there's more room to go. I think a lot of these tech stocks could go the route of Palunteer did which went from you know the 200s to 120. And I I would more expect a move to the downside anywhere than to the upside. The one I'd be looking to potentially buy to the upside would be SpaceX, but I need a little bit more data. You know, you so you and I talked when SpaceX came out, it was 250. Now it's down to 130 and it got as low as 120, so even below the offering price. But I think now you're probably getting to a spot where it's probably a pretty good spot to take a look at buying it. Uh by the way, it's already starting to happen in South Korea where semiconductors are their largest uh uh sector the uh in the Cosby index. Give me my money back says investors who have been losing money on SKH highinex. Okay, so as of now um it's not working so well, says a CBC article. The Codex SKH Highex single stock leverage ETF, a product designed to deliver twice the daily move in SKH High shares, has fallen about 70% from its record high in June. South Korean online trading forums were in lament, says one poster. I want to go back to before I started investing in stocks. Give me my money back, says another person. You're determined to kill me. All right. Uh, wow. When you see comments like this, what does that tell you about market sentiment? >> Well, I I think there's a lot of concern, but I think this is the issue we're dealing with here, David, is a little bit different. You know, when we have a lot of these leverage products here as well, and the problem with leverage investments is that they only work for a very short period of time because they work on a multiplier effect very much like retail. If something [snorts] goes down 50%, it has to rally back 100% to get back to where it was in the first place. So, the underlying is not down quite as far. But if you take a look here, I'll give you one example right here in the States. Gold is down 30% from its all-time high. Okay, Nugget, which tracks gold pretty well, is down 70% from its high. So, that is the that is the difference. When you get involved in these leveraged ETFs, they do not represent true investment opportunity. They they represent almost like a large option that are really meant by design to be very short-term traded or day traded because of the amount of movement you can get. But they're like big options. They have time decay. And if the underlying that they're representing does not move in the direction that you're playing, those [snorts] things continue to decay every day. So they're nothing more than a big option and a lot of risk. And people have no business playing those unless they're traders and they understand how to trade the market. By the way, this is a remarkable story. And just in relation to what I just read you, uh 1.2 million, let me just Yeah. According to Goldman Sachs, more than 1.2 million leverage retail trading accounts in South Korea triggered margin calls as of July 13th with an estimated 320,000 to 360,000 accounts fully liquidated. Goldman strategists reckon this means around 1 in 30 adults in the country were 3.4% 4% of the adult population have received margin calls. And by the way, that's about 10% of all the trading accounts in the country. I mean, I I I just want to get your reaction to that. >> I mean, that's that's what happens. Again, you you get you get into a market like we have and of course, you get these wild moves and you get these great returns and you keep leveraging up and you keep leveraging up and then all of a sudden you get [snorts] the selloff and the margin calls come due and of course poor people are forced to liquidate. that in my opinion that was part of the reason you saw some selling in gold earlier, the initial selloff, not only from the big rally, but was to cover the margin calls of these other products that people got themselves involved in. And and and typically the the average investor will sell the winners first. instead of taking the loss, they'll hold on to the loser, hoping that it'll get back to even instead of looking at the big picture that they're either making money or they're not making money and they let these margin calls get to them and they start selling other assets to get there. And that's how most people end up broke and that's how it most people end up busting out as a trader and an investor because they get too much too much leverage. They use too much leverage and of course then they don't have the capital to cover the margin calls when they come due. How should you use leverage properly? >> Leverage should only be used in a very short period of time. And the minute you leverage a product, you should know exactly where you're getting out without question. There's not like, well, maybe I'll give it a little bit more and I'll give a little bit more. If you buy something at $3 and and you your stop should be whatever it should be, but that has to be absolute and and take the [clears throat] decision out of your hands because most people will not follow the discipline that they're supposed to. You know, in [snorts] this business, you take losses. It happens. I trade live every day with my members and we take losses on trades, but we know exactly where our risk is. The minute that trade goes on, I know exactly what I'm taking as far as risk. Whether it's leverage trade or not leverage, I know exactly where I'm getting out. And that's what people have to understand. If they're going to be successful in the world of investing and the world of trading, you must know where your exit is. It's easy to make money. Everybody's happy when they're making money, but the minute it goes against them, if you're ready and you're disciplined enough to take that exit and take that loss, it allows you and frees up capital to allow you to get back into the market on something else at a later date. >> Let me show you a chart. I'm not saying this is going to be a repeat of 2000, but I was looking at the Intel Corporation stock. And the last time we had a basically vertical move to this extent and then another vertical vertical move downward that was in 2000. >> Yeah. >> Uh and and this is this is not I mean I'm not not all tech stocks are repeating this pattern. This is just one of them, right? AMD is still high. Nvidia is still high. Uh but if you look at Qualcomm for example, it's starting to happen. Uh we've we've starting to see the selloff. Uh if if you take a look at uh uh Micron uh technology for example, that red bar that's starting to that's starting to uh if you zoom out a little bit, it's it's already sold off 30% from as high as a couple month a couple weeks ago. Not even a month ago, a couple weeks ago. So uh I I don't know what's going on right now. Let us know. >> I expect it. Listen, anytime throw up a chart to SpaceX. Anytime you see these parabolic moves that go straight up, they cannot be sustained. There are not enough buyers in the world to continue to keep that market going and [snorts] we get overly excited. Okay, look what happened to SpaceX. It went straight up after the afterwards and we're now down 50% or so from its highs. I expect a lot more of this. Again, I traded and lived through the 20201 NASDAQ crash. I traded through 87. I traded through 2008 and again we are setting up to have another 2008. I mean I mentioned earlier you've got people that are there the highest amount of defaults on mortgages since 2009 are happening [clears throat] right now. Okay? So more people are in debt that more than their savings. They couldn't pay their debt off if they wanted to. yet they're investing, which if you're paying 27% or 28% on a credit card, you're [snorts] not going to make that much in your investment. You're better off paying off the credit card. It's your best investment you'll make. You want to get rid of your debt so that it frees you up to invest. But the market you're showing me, I expect that to happen. And if you look at some of the the cheaper stocks of the computer era, the the the AI era, InoQ, you can look at that stock that was $70. It's now down to 30. You're seeing this across the board. It always starts out with the smaller ones and eventually the bigger ones fall under the pressure as well. And I would not be shocked at all to see that same repeat of what we saw in Intel in 2000 and what we saw in08 because again I don't think there's enough money to handle this and there's way too much debt and there are way too many other issues in this overall economy in my opinion. >> But I I think you mentioned this briefly earlier. When you see a chart like SpaceX go up vertically and then down, doesn't this make you think maybe this is a good buying opportunity? >> I would I said that earlier and SpaceX would be one that I would now be if you believe in SpaceX if it shows me some support. I would love to be a buyer and I will be a buyer of SpaceX somewhere down around here. In my eyes, I want to see it slow down and that chart kind of indicates it's slowing down. Uh but the stocks like in Intel, I'd be a seller. Micron, I was a seller. Okay. And when you see the parabolic move up. So here I think that you're looking at a company that's probably a fairly good buy. Now one of the things advantages that I have and that I teach is I'm going to hedge my that stock anyway. So my risk on space that's going to be five or 6% no matter what happens to it. But in general, I think this is an opportunity. If you believe in the company and the company shows you that it's worth investing in, then I think that it's a it's a pretty good buy down here. I don't I don't see a hell of a lot more room to the downside. >> All right. What about a stock like uh Oracle here? I'm not we're not we're not we're not doing stock picks per se, but if you take a look at how far Oracle's gone up and then down, I mean, it's lost about Yeah. almost 70% from its top and uh there's been talks about potentially going bankrupt and the government may be bailing it out. Who knows, right? If you look at just just from a pur purely technical perspective, you look at a chart like this, what's your first question to yourself as an investor or trader? trail like that. If I would have looked at it when I when I did own it, it looked pretty good. But the minute that it spiked up and started to spike up, not the top top spike, but even you know the the two spikes before when it got to I can't see the number, but I guess around 300 it looks like. >> Yeah, 300. >> Not that spike. The one right before there. Okay. Again, I can't wait. Right there is where I was looking to be a seller. Okay. >> And I had to take some pain as it went up and I had to get stopped out first to be able to get back in and do it again. Now the question is is as a as an investor you want to look at the fundamentals of the company. Are they still making money? Are they still going to be in business? You tell me they may be going bankrupt. Okay, that's a problem. Okay. But [snorts] if everything else matches, this is a place you may want to look to buy it. If it if everything doesn't match, then you probably don't want to play it. the the the trade right now in a stock like Oracle is for a short-term trader who's looking for a little bit of a bounce off of that very oversold condition because that move is about three standard deviations from the mean, which means that it's about a 90% chance you're going to get a bounce. How big the bounce is, I don't know, but it will bounce from there most likely. And as a trader, I would not be a seller there. I'd be more likely to be a buyer. As an investor, I'd have to look deeper into the fundamentals and decide if I believe they're going to be in business for the next 10 years. >> Um, I want to get your take on um, uh, the next Fed rate hike. So, uh, let's take a look at what prediction markets are saying about when we're going to get a rate hike here. So, before 2027, 60% chance, 59 actually. Uh, before July next year, 71% chance. Uh, not a lot of confidence we're going to get an immediate rate hike. You said interest rates are going to go up. the Fed's going to be forced to hike. Uh what does that mean? Let's suppose let's suppose you're right. Let's suppose prediction markets are right and traders are right and the market expectations are right. What does that mean for bonds? Uh what does that mean for stocks? Well, the interest rates are going higher. So, the bond futures are falling and they've been falling forever. I mean, I sold the 10-year notes at at 114. They're down to 109 or 108 now. So, that's a pretty big move and I expect them to go even lower. the the free market is dictating that higher rates are accessible and the markets are telling us and the Fed is telling you and Kevin Worsh is telling you that they have to get this under control even if they want to re the re re redo their formulas they're going to have to hike rates and my guess is I don't know how much influence President Trump has over Kevin Wars I I think it may be less than he thought when he when he appointed him there should be a rate hike in September in my opinion, okay, [clears throat] whether or not >> President Trump can can prevent them from doing that because obviously that would not be good for the election if if interest rates are going higher. But on the other side of the equation, retail interest rates, what you and I look at the 10-year notes, okay, which is what our loans are based off of, have nothing to do with the Fed funds rate, okay, of what the Fed does. Because the Fed funds rate is only the money that the banks borrow from the Federal Reserve and the interest rate that they're paying the Federal Reserve. they [snorts] don't necessarily have to translate to the retail market or the tenure notes. The tenure notes have already spiked up significantly. In fact, if you do a comparison over the last three years, the 10ear notes are up 150 basis points. The Fed funds rate was down 100 basis points. So, there's a big significant shift which allowed the banks to make a lot more profit, but did not the the savings did not get passed on to the consumer because our interest rates continue to go higher. mortgages are still north of 6% and so on. >> Yeah, here we go. This is what you were talking about. Fed funds rate continues to stay flat while the tenure goes up. Is the tenure front running basically Fed funds hikes? >> Well, I mean the the tenure is really not a decision that's made by the Federal Reserve. The tenure is made by capital and money and the markets. So, the markets are the tenure is telling you that there's problems. Okay. [clears throat] the 10 years telling you that interest rates are too low and they have to go higher along with the 30 and along with the five. So we're not seeing the the steepening yield curve and again CD rates are back near about 5%. So again you're seeing the money and the the rates going higher in and in in smaller places peer-to-peer lenders like Prosper and Cabbage they're 15% to borrow money from them. >> It's uh it's it's interesting how we brought up the uh weak consumer strength right now. You talked about rising debt, how people can't pay a lot of their bills. Maybe that could be a talking point for the Federal Reserve to not to use to not raise rates later this year, even if inflation data continues to be hot. What do you think? >> It gets it's always a possibility, but they don't look at the little every decision made by the Fed is not to help the little consumer. Okay? Let's let's be square here. They don't give a sh about the consumer. Okay? They care about big business and big money because that's what drives the country. Okay. And and they don't care about anything else. So they're not worried that Joe Smith can't pay his mortgage because his rates are too high. They're worried about, you know, the money that Google's going to borrow, the money that Nvidia is going to borrow. All those things is what their concerns come through. So I don't think they'll have any problem hiking rates whatsoever. I don't think it'll come back to the consumer because the problem is is you still got very high inflation. And now, as we talked last time we were together, I said the grain markets were a good buy. Well, the grains have now rallied 15%. From their lows, that's going to make prices even higher. So, that's going to even speed up inflation. >> What? Yeah. Except perhaps if inflation uh inflation stays high and the unemployment rate also goes high as well, then the Fed will have to balance what to what what to say if you're inflation or the labor market. Uh let's talk about the precious metals now. $4,000 gold. Uh it's been building this base for quite some time. Uh how are you approaching this market here? >> I've been buying gold when it dips down to 4,000. And I think that's a pretty good hold. I mean, listen, there's there's always a chance it can go lower, right? I don't think it'll go lower than 35 or 3,600, and I'm willing to take that risk, but I've been I've been a buyer around 4,000. I've been a buyer at silver around $55. I've been a buyer of platinum at the 1600 level. I think those are pretty solid base levels. I think what you saw was that parabolic move higher in all three. You saw the dramatic collapse, which you showed me in the stocks as well. I think now they've settled and I think now they're ready to start moving their way up again. And again, I don't want to see those gigantic straight up moves. I want to see base building, which we're now seeing. I'd like to see a breakout to an uptrend. And I'd like to see a long steady uptrend versus that straight straight up parabolic move where we're getting in silver five, six, $8 moves a day or in gold$100 to $200 moves a day. Those are no good. Those don't those don't do anybody any good. Well, are you are you looking at uh Fed rate hikes as a bearish indicator for where stocks could go? Oh, sorry, gold could go later in the year. >> No, no, I don't. Again, I'm a big believer, David, that markets are well ahead and I think gold was well ahead of this and priced in rate hikes. The only thing could happen if they don't hike rates, gold could go up faster. I believe that the hard assets of gold, silver, and platinum have already priced in what they think is going to happen in the future, which is being priced in by the Fed funds rate. And I think that they've decided they've already priced in higher interest rates. So, you're already past that in my opinion. That's one of the things about markets and and the more information flows, the more we're open, the more efficient the market is when it comes to pricing in impending news. So when the when the interest rate I wouldn't be surprised if they hiked rates in September that gold rallied off it because I already know what's coming. >> Are you what are you very bullish on right now? >> I'm not very [clears throat] bullish on anything other than gold other than the precious metals to be honest with you and well the grain markets I'm pretty bullish on. Uh but I'm pretty negative David. I'm looking for this to get whacked pretty good. I I think this rally is sellable the one we're seeing right now. Yeah. >> Uh, I thought that last week and I I know we're up about 11% for the year in the S&P. It would not surprise me at all if we ended up unchanged for the year or down on the year before it's all said and done. >> Yeah. Uh, are you still long, by the way? Because I know I know you're >> I'm always long because I'm always hedge. So, again, I have a my risk is defined with my by my hedge. So, uh, but as a trader, my trading account is short, okay? And I'm short. I've been selling this morning into this rally. Uh, by the way, let's just take a look at uh prediction market odds. Uh, NASDAQ 100 closed by end of 2026. Uh, currently at 29,000, 32,000 to 32,5005% chance. 33,000 or above, 28% chance. Um, yeah, slightly slightly bullish here on the on >> I'll go I'll be in that market selling. Don't worry. [laughter] >> Okay. Um, what what's the future of the US dollar for you right now? With higher interest rates, you can expect the dollar to strengthen. Uh but we have higher debt. So what's going to happen? >> Well, I think the dollar is going to continue to go higher as long as there's uncertainty around the world, around the globe. Uh and there's issues that I think we have. Uh remember, countries buy dollars for safety. Okay? So I think that's what's supporting the dollar right now. It's not you and me. It's not the little guy. It's countries are buying dollars because that's the safe haven play with the dollar being the reserve currency. So I expect the dollar to continue to stay. [snorts] You know, right now I've got it pegged at at par is is pretty good support. I could see it going as high as 102, 103, maybe higher, depending on how these markets react and depending on how this whole thing plays out. I mean, if if what I think is going to happen, then the dollar will get stronger because I think the markets are in pretty big trouble. >> Yeah. Uh, by the way, uh, just today, Trump announced new tariffs in Canada, 50% tariffs on, um, a list of products here. uh tariffs listed under dairy grievance, bunch of dairy products here. Uh tariffs retaliating against provincial booze bans. Uh so it it it looks like a retaliation against what the Canadian government has implemented in terms of what what the Canadians have banned and put tariffs on themselves. Um but yeah, it seems like uh trade wars are heating up between Canada and the US. I are I are I are I are I are I are I are I are I are I are I are I are I I are I you know you're looking at this and you're thinking what does it does it does it does it matter to you as a trader if let's say Trump imposes more tariffs on other countries around the world >> it it doesn't matter again I'm all for tariffs I'm not for the tariffs he's doing now I think retaliatory tariffs are silly but >> um in general I don't have a problem with it in general the markets know what's going on you can see that the announcement that came out last night the markets are huge so they don't care either [snorts] um I I I think that you know we'll call it the They call it the taco trade, right? I mean, this this is going to end up the same way everything else has end up where, you know, it'll be whatever it is, it'll be relative. It'll be uh commensurate with what Canada is doing in the United States, and that'll be the end of the day. I don't I put no stock in that right now. >> I and I just I'm going to close out the conversation with this point here. If you look at the NASDAQ and even in the te the tech bubble bust was was an exception because it you know the dotcom bubble bust uh busted and then we had no recovery uh to previous all-time highs until literally 2016. So 16-year bare market here um if you want to call it that. I you know I'm not saying that's going to happen now but it's just it just appears to me in the last couple years every time we had a huge sell off in the NASDAQ it's rebounded very quickly. V-shaped recoveries tend tended to be the norm that we're used to today. So, um, if someone were to say to you, well, just look at the charts, Todd. Uh, this is any any any any dip is a is a buying is a buy the dip opportunity. What would you say to that? >> I would say so far you listen, you're not wrong. So far, and again, I don't ever encourage anybody to trade unless you understand what you're trying to trade. You know, when you're investing, it's fine. But you can bet your you can bet you're a sweet bippy, as they say, you'll see a 20, 30, 40% haircut come in this market at some point. When is that point? I don't know. I'm still looking for an overall 40 to 60% haircut. I'm not changing my views. Uh, this doesn't bother me. This only encourages me to think that I'm more correct the way that we're reacting to certain things that everybody's just ignoring. And of course, everybody hides things underneath the covers until it's too late. And you know, it's the old story. The horse ran away, then you built a a fence. Okay. >> Yes. Some stocks already [clears throat] went down 40 to 60%. Others have. >> And there's more. There's more coming. You can bet on it. >> Thank you very much, Bubba. Great stuff. Where can we follow you, >> David? Great to be with you. Go.atrading.com. And of course uh for your me for your listeners always I always offer my books if they'd like to get a copy of the PDF files of my two option books and they can email me at bubba bubbatrading.com. >> Okay. We'll put the links down below. So make sure to follow Bubba there. Appreciate your concern for uh for the traders out there watching us and appreciate your insights. >> Thanks David. Appreciate you brother >> and thanks for watching. Please do subscribe and like this video and share it and follow Todd Horowitz in the links down below. And please use my code lin l i n when you sign up to cowshi. New users who use my code can get $10 when you trade $10. Link down below or scan the QR code here.