Michael Pento, president and founder of Pento Portfolio Strategies (PPS), joins Julia La Roche for episode 299. Pento continues to warn of three unprecedented asset bubbles in stocks, bonds, and credit existing concurrently. Despite being net long and up handsomely this year, he emphasizes the critical need for active management. Pento explains why the next crisis will likely stem from spiking bond yields and intractable inflation rather than insolvency alone, making traditional Fed interventions ineffective. He argues that any meaningful correction would be catastrophic given the massive scale of current distortions, while the Fed desperately tries to keep bubbles inflated through rate cuts and resumed quantitative easing.
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Links:
https://pentoport.com/
https://twitter.com/michaelpento
0:00 Intro and welcome back Michael Pento
0:59 Big picture macro view
1:38 Three unprecedented asset bubbles: Stocks, bonds, and credit
3:38 Inflation accelerating
4:01 Fed panicking to keep the bubble going
6:56 Are you nervous being net long the market?
8:35 The next crisis will be different - Stagflation risk
9:43 Bond market revolt scenario
12:28 Magnificent Seven concentration risk
14:15 Government shutdown and lack of economic data
16:19 Treasury issuance and bond market dynamics
18:42 Federal budget deficit concerns
20:33 Fed's balance sheet and quantitative tightening ending
24:18 Bifurcated economy
36:45 Political pressure on the Fed
38:50 Trump's economic policies and inflation risks
40:33 Tariffs and their inflationary impact
46:23 What keeps Michael up at night?
47:50 The great reconciliation of asset prices coming
49:02 Where to find Michael's work - Pento Portfolio Strategies
50:10 Closing thoughts