Crash Not Over: 50% Haircut is Coming for the Market Warns Bubba Horwitz
“I still think there’s a 50 to 60% haircut coming to the markets,” warns Todd Bubba Horwitz, founder and CEO of Bubba Trading. In an interview with Daniela Cambone, Horwitz dives deep into the critical issues facing the U.S. economy, from the manipulation of interest rates by the Federal Reserve to the looming crisis in over-leveraged banks. He argues that the Fed’s interference is contributing to the destruction of capitalism, insisting that interest rates should be determined by the free market. “There’s a buyer and a seller, and they will find the correct rate,” he asserts. As markets face potential downturns, he advises investors to focus on solid companies and to protect their wealth by investing in physical metals like gold and silver.
CHAPTERS:
00:00 Stock market
4:35 Recession
7:21 Inflation situation
8:58 Donald Trump’s view on free market
11:15 Jim Cramer’s view on gold
12:35 Lessons to be learned from global sell-offs
14:07 Gold
14:54 U.S. election
TRANSCRIPT FROM VIDEO:
00:00
Hi everyone, Daniela Cambone here for ITM Trading. I’m just back from vacation, feeling refreshed, recharged, ready to go and provide you with incredible content and interviews. But before we get to that today, I just wanted to remind you and urge you to book a Calendly appointment with one of my incredible colleagues at ITM Trading. Why? Well, you saw what happened.
00:25
during that global stock meltdown last week. But what is resilient in the face of all of this? Gold. It is the ultimate wealth preservation tool. And that’s why I urge you all to book a strategy session where one of my colleagues will help you build a wealth preservation strategy centered around owning physical metals. It’s free, it’s educational, and I strongly urge you to waste no more time and get to it and book that calendar.
00:54
All right, let’s get to today’s interview.
01:02
Hi, it’s Daniela Cambone back from vacation thrilled to have my guest on with me today on the Daniela Cambone show here on ITM Trading. Todd Bubba Horwitz of BubbaTrading.com. Bubba! Hi, Dani. Who do I call? First person I call when I’m back from vacation. Ghostbusters. Hi, Dani. It’s great to be with you as always. Man. Okay. I got. So let’s talk about.
01:29
Well, I need to get your insights because I was like, you need to help me make sense of what’s going on in the markets. But here I am vacationing and basically, the world is ending. We all know the global markets had an acute panic attack last week. The dizziness started in Asia with markets crashing in Japan. And then we saw what happened to the S&P, the Dow, the NASDAQ. The world is ending. By the time I’m on the flight heading back to New York City, Bubba.
01:58
Because I’m like, I got to get back. I got to start doing videos. The world’s ending. By time I land every, oh, and by the way, talk of emergency rate cuts, of course. By the time I land, everything is okay again. All the indexes rebounded, making gains as if nothing had happened. How? Why? What happened? And where are we headed?
02:27
Explain, please. Well, first of all, we are in an election cycle, okay, which is normally higher to the markets. But we did have a rate hike in Japan which caused some overnight panic last week. And of course, the markets melted down and they’re just waiting to melt down. I mean, we are so close to a top and a bubble. Again, I’m not saying they’re going down tomorrow. I’m not saying they’re going to melt down before the election.
02:53
But if you remember, the last time we had a down year and election year was 2008. And of course, in September of 08, Paulson came out and said the banks are in great shape, and of course they’re not. And I think that’s also a concern today, is the banks are not in good shape. As much as they wanna try to convince us, we already know that over 1,200 regional banks have claimed to be having some issues, and we all know that if they did a legitimate stress test on the banks, that they would not be able to actually meet them because they’re way over leveraged.
03:23
But again, you have a very small percentage who are investing in these markets because nobody’s got any money because we’re in a recession. And if you look at the SOM rule, which just says that if you have three months in a row that are 50 percent higher, not 50 percent higher, but 0.5 percent higher in inflation, I mean, in jobs, you’re going to have you have a recession. Now, I think we’ve been in a recession for well over a year if you’re in the middle class or below. I think you’re really struggling because there isn’t enough jobs.
03:52
And I think that of course, the administration that’s in power is really destroying this country and destroying our taxpayer dollars by continuing to sound with your brain and never will. So we are on edge as a as an investing society. And of course, the wealthy are thrilled with that because they were the ones who swooped up and bought it all after the markets collapse because who panic the guys who are short the money the guys that are over leveraged the markets trying to squeeze out a little bit of profit.
04:20
And so we get a rebound rally because of course everybody got too short right away and you got the short squeeze rally coming in. And of course they’re higher again this morning, but they’re kind of more mixed this morning with the S&P and NASDAQ higher and the Dow and Russell lower. It just seems to me, Bubba, we don’t want to face the pain, right? And that’s why everything was just magically erased. And by getting to your point about recession,
04:50
So it’s interesting because I know your argument is we are in a recession. But on the flip side, most would say all those big smart names are talking about a recession, but technically it didn’t happen. Now the SAM rule, yes, is signaling yellow that we’re like heading into a recession. But some would say all this recession talk is just nonsense. And they’re just trying to shake out the average investor. So institutional players can…
05:18
get back into the higher flying names at cheaper prices. So it’s just trying to understand what’s the real story here. Well, you know, we built a whole rally based on potential rate cuts starting back to last October. So we got the big rally, we got the big rally, and of course we never got the cuts. So now if you get a rate cut, it’s going to be more damaging because now a rate cut would not be positive, a rate cut would be negative because it would be panic, especially if they were to cut
05:48
is the true destruction of capitalism. Because when you don’t allow businesses to go out of business because they don’t perform well and you continue to bail them out, hence the banks going back to 08, this is a problem and this is a destruction of capitalism. And this is what we’re seeing globally is they want globalization. They basically want the middle class to become surfs again, like they were thousands of years ago.
06:13
and they want to have the bourgeoisie up at the top to have all the money. And that’s really what you’re watching. You’re watching a destruction of capitalism and you’re seeing that this happening all the time. And at the end of the day, if we don’t get back to a free market capitalism system, because interest rates should not be determined by the Federal Reserve. Interest rates should be decided by the free market because asset classes know how to price themselves. It’s very simple. There’s a buyer and a seller and they will find the correct rate.
06:41
And certainly the rate, even at the low rates we are now, are high for many. If you’re under 40, these are very high rates, okay? But if you’re my age, these rates are still very, very inexpensive. And of course, if you look at some of the peer-to-peer lenders, they’re getting 15, 16%. And if you’re looking at the credit cards, which are using usury rates, which are on the mid-20s, those rates, we have more people, and they max on their credit card debt that can’t make anything but the minimum payment, which means they’re never gonna pay it off.
07:10
So tell me or not in a recession, make up all these lies about what, how the economy is doing, because in my opinion, and I think if you ask the average American, the economy is in horrific shape. Well, yeah, the economy is in horrific shape and yet we have the SMP soaring, right? So such a huge disconnect there. It’s like, how did we, how did we get here? How do we fix it? Or more importantly,
07:39
to your point about recession, why don’t we just come out and say, yeah, we are in a recession. It’s like, we don’t wanna talk about it. We don’t wanna face it. Well, it’s always been the case. I mean, that’s been part of, since Alan Greenspan took over the Fed in 1980, that has been kind of the case. I mean, it’s been the bubble builder. If you go back to 1988, an average home was 150,000. That same home today is 720,000. So you look at the expanse and the indexes from that day, you’ll see that they’re in proportion.
08:09
to those, if not a little bit higher. But at the end of the day, you have to make more to be able to live less than you live then because everything is so much more expensive and they refuse to admit that inflation is higher. We’re not at 3.5% inflation, that is a joke. We are way north of 10%, just like a crude oil or gasoline. You’re paying, depending on where you live, but let’s just say the average across the country, you’re paying 65% more for gasoline.
08:38
than you were paying four years ago. Now, if you think about it, your biggest expense, besides gas, is food. And food is about 40 to 50 to 60% higher on an average throughout the country. So how are we going to survive when you can’t make a living and you can’t make enough to cover your bills?
08:58
It’s really, really a sad state of affairs. And just want to bring up two points. You talked free markets. So what are your thoughts on Donald Trump recently saying that he should have a voice or remember the president is when the Federal Reserve makes his decisions on interest rates. He said, quote, I feel the president should have at least a say in there.
09:21
I think that in my case, I made a lot of money. I was very successful. I think I have a better instinct than in many cases people that would be on the federal reserve or the chairman. As you know, he appointed Jerome Powell back in the day and has always been quite critical of him. What do you think of the fact that, you know, should the president have a say? No. First of all, the Fed is a cartel.
09:47
The Federal Reserve is a more of a criminal organization, in my opinion. If you go back to the creation of the Federal Reserve in Jekyll Island, who were the main players? Paul Warburg, the Rothschilds, JP Morgan and the Rockefellers. So they didn’t have the best interests. They are not. They have single-handedly destroyed the dollar by conning the government into instituting the Federal Reserve. You know, the Federal Reserve, obviously, people don’t know, is a private organization, it’s a private corporation. Name the Federal Reserve because you relate it to the government.
10:17
But nobody should have any say, but the Fed is so far off their mantra of what they’re supposed to be doing. Their job is jobs and stability, not manipulating interest rates to help others and to create bubbles in which they have done. OK, that is more the bigger problem. And I’m with Ron Paul that if we can’t end the Fed, which we should, then at least have an ability to give it a true audit, which we don’t. So, again, if you look at the agencies…
10:46
that we have in this country, the SEC, FINRA, the Fed, none of them have the best interest of the citizen. They all have the best interest either the brokerage firms or the government. And of course, we supply the government with money because we have to pay taxes, which again destroys all the extra money that you had because of all the extra taxes we’re paying because of the excise tax and taxes on goods that you buy because with inflation so high, you’re paying the hidden tax of inflation.
11:14
Another comment I wanted to bring up to you, our good friend Jim Kramer, reminding people amidst the bloodbath, Bubba, that, hey, gold held up a lot better than crypto. Obviously angering a lot of folks in the crypto community. But yeah, gold, yes, of course it held up better than crypto. I mean, were you surprised by that comment or just thoughts on?
11:39
gold’s performance the midst of all this. Well, I mean to listen to Jim Kramer, you should go see a doctor because he’s clueless about he just makes a lot of noise doesn’t really say much but gold held up but cryptos listen if you compare the moves in gold and crypto they’re pretty similar over the over recent history and I think they’re both good products. Listen, I’m a big believer in gold as you know and in silver and in platinum and I think that at some point here we may need
12:08
as a currency because of the weakness of the fiat currency system around the globe, because that is nothing more than a frauds Ponzi scheme anyways, because the currencies are really worth nothing and they’re actually just loans. And that’s really the problem that the central banks around the globe have too much power to reduce or manipulate or crush these currencies. And you see them, it’s a race to the bottom with these high numbers of inflation.
12:36
So what’s the, you know, just to wrap here, Bubba, what’s the lesson to be learned after that global, you know, meltdown sell-off? Can we expect another hit to get punched again? Well, I think that you’re gonna see, listen, I’m still saying, I’ve said this for over a year, so again, this isn’t new, but I still think there’s a 50 to 60% haircut coming to the markets. I don’t think it’ll be tomorrow. I don’t think it’ll be this year, because again, elections are very tricky. But again,
13:04
I think the banks are in trouble. I think we have a lot of problems that are out there. But I think the one thing you have to remember if you’re an investor in the stock market, the stock market has gone up 8.5% year over year since the inception and 10% year over year since 1950. And every time you see that big sell up, that big panic or as we used to call it on the trading board, the big puke, buy it because by good companies, they’re going to rebound. And of course, I told all of my people on Monday that you should be looking for a spot to buy.
13:33
Good solid companies because they’re probably going to rebound, which is the same thing I saw in 1987 when we had that big meltdown. And I think that if this country is going to survive and we’re going to see a system that’s going to work, then the stock market is not going to stop. It’s eight and a half percent year over year gains. Now we may be down next year. We may down the year after. But if you’re using money that is not over leveraged, you’re going to have to sell out, then you should be accumulating assets that are going to grow. Gold, equities.
14:02
and continue to buy into weakness. And when it comes to preserving your wealth, I mean, just looking at how gold held up in the midst of all that, I mean, is there a better wealth preservation tool? Well, I mean, there are other tools. I mean, gold is a good start. I mean, obviously there’s using derivatives to hedge and use that against your portfolio, which I do use. There’s ways to do things, using the products correctly without putting yourself in jeopardy and actually.
14:29
knowing exactly what your overall exposure is to any market. But certainly I believe that everybody should have at least five to 10% of their total net worth in gold or in silver or in some sort of metal because I think that they’re not going anywhere. And I do believe once again, that they could be needed as a currency at some point in the coming years. Just final thought, cause it’s been a while since I spoke with you, we chat outside of filming time.
14:59
all quite a bit. But I was curious to get your thoughts as we as we inch closer to the election. I mean, are you were you surprised by this Harris curveball or the way this narrative is shaping up here? Well, I think she’s taking the Biden approach and hiding in the basement. I mean, it’s been 22 days since she’s talked to anybody. Basically, she hasn’t had any real press conference yet. I think that this is a total spoof and a joke of watching an election in this country.
15:29
You know from from who she picked for a VP. Let’s you know, make America burn again I mean, you know, look what happened in Minneapolis Is that somebody you want as your vice president of your country nor if you want, you know, somebody who lets criminals out early and as the borders are has left the border wide open and it’s not only letting in illegals and dangerous people But they freed 99 terrorists known terrorists that they free. So I again, I think this is a ridiculous situation that we’re watching here
15:56
And I think that Trump has the right idea as to what we should do in protecting this country. And I think, listen, I think we should seal off the borders and I think we should pull out of anything we have with Ukraine and to get away from China. I mean, firstly, we’re up to me. I’d like to make the United States an island and not deal with anybody because we don’t need anybody else. We have enough here to deal with ourselves. We don’t need to use the rest of the world to be globalized. There you go. Bob Buffer, president. That’s me.
16:25
Bubba for president. Ah, okay. We’ll catch up with you soon. I appreciate you joining me this Monday and always keeping it real for us. Thanks Danielle. You’re the best. I appreciate you. Todd, Bubba Horwitz of BubbaTrading.com. We will see you soon. And I’m so happy to be back. We’re fully rolling out with new content. So be sure to stay tuned to the Danielle Cambone show here on ITM Trading and we’ll see you.
SOURCES:
https://www.reuters.com/world/us/trump-says-president-should-have-say-fed-decisions-2024-08-08/
https://x.com/jimcramer/status/1820400695339573627
