MacroVoices #512 David Rosenberg: Will The 2025’s K become 2026’s

This is Macro Voices, the free weekly financial podcast targeting professional finance, high net worth individuals, family offices, and other sophisticated investors. Macro Voices is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred. Now, here are your hosts, Eric Townsend and Patrick Ceresna. Macro Voices episode 512 was produced on Wednesday, December 24th, 2025. I'm Eric Townsend. Happy holidays, everyone.

Economist David Rosenberg returns as this week's feature interview guest. I particularly enjoyed this interview because Rosie disagrees with my view that we're in the early stages of a secular inflation. And I always seek out really smart people who... views don't match my own to check my own thinking. We'll discuss the U.S. economic outlook, why Rosie's not concerned about persistent inflation, precious metals, and much more.

This will be the final regular format episode of Macro Voices for 2025. Next Wednesday, New Year's Eve, we'll release our long-form Macro Voices holiday special. Have you ever wondered why so many high-profile wealthy people from hedge fund legends like Julian Robertson and Peter Thiel to Hollywood icons like James Cameron and Shania Twain are all establishing residency in...

New Zealand? Do they know some sort of secret inside information about the end of the world that the rest of us aren't privy to? I contend that many of them do know something the public doesn't. but it has nothing to do with the end of the world or surviving nuclear winter. Tune in next week for the full story, including why New Zealand is arguably an even better tax domicile than Singapore for global investors who derive all or most of their income from investments in financial markets.

And I'm Patrick Ceresna with the Macro Scoreboard week over week as of the close of Wednesday, December 24th, 2025. The S&P 500 up 280 basis points to 6909, closed at an all-time new high, putting 7,000 in play. We'll take a closer look at that chart and the key technical levels to watch. in the post-game segment. The U.S. dollar index down 47 basis points trading to 97.94. The price action remains very weak.

The February WTI crude oil contract up 505 basis points to 58.63, bouncing off the year lows, but not yet above key technical levels. The February Arbob gasoline up 353 basis points to 176. The February gold contract. Up 306 basis points trading to 45.10. An old time new high as precious metals continue to rock and roll. The March copper contract.

up 387 basis points to 564, continues to climb toward the year highs. In December, Uranium up 396 basis points to 8140. Uranium finally waking up from its slumber. The U.S. 10-year treasury yield up two basis points, trading at 417. And the key news to watch, in the holiday shortened week next week, we have the FOMC meeting minutes and the unemployment claims.

This week's feature interview guest is economist David Rosenberg. Eric and David discuss potential Fed policy errors, the labor markets, the U.S. economy, the equity markets, and more. Eric's interview with David Rosenberg is coming up. as Macro Voices continues right here at MacroVoices.com. And now with this week's special guest, here's your host, Eric Townsend.

Joining me now is Rosenberg Research founder David Rosenberg. Rosie, great to have you back on the show. It's been way too long. Let's start with the Fed. Boy, who is it? What's going to happen? And it seems to me like, you know, this is maybe a setup for a policy.

because I don't remember politics ever being quite this influential in Fed policy, in my memory anyway. I would tend to agree with you, and I guess we'll have to reserve judgment going forward as to who the choice is going to be to replace Jay Powell. It looked as though just a week or two ago that Kevin Hassett was going to be the choice. Donald Trump said that he was down to one. But it looks like there has been quite a bit of pushback on that. So now he's tied with...

Kevin Warsh. I think Warsh probably is the more desirable pick. He actually has central bank experience. And I think the view is that out of the two, Hassett would be actually just the voice piece for the administration. So we'll probably find out about that, I reckon, early in the new year. Then it comes down to, I mean, does it even matter? We're going to have a shift in the Fed Bank presidents as to who's going to be coming in to vote on the voting committee.

and who is not going to be voting. It looks as though the take is that it could be a more moderately hawkish makeup. But the bottom line is that although there's a wide divide on the Fed, they are, as they've said, data dependent. It's really going to be the incoming economic data and how the data shapes the views and projections of the Fed that will dictate whether they just do...

one more rate cut next year, which was in the latest set of dot plots, whether they do none, there are several that don't want to do any more, or do they do more than one? I'm in the camp that believes that the data will dictate that the Fed probably ends up cutting rates more aggressively than what's priced in right now. More aggressively than what's priced in. So it seems to me like everybody's kind of expecting that as soon as the Fed share changes.

policy is going to get much more dovish. You think it's even more than consensus dovish? You know, you have the perception that you get a new chairman that will be more dovish. I think you could argue that Kevin Hassett certainly is extremely dovish. But again, he's viewed as being a spokesperson for Donald Trump, and we know where he wants rates to go. But it is a committee after all.

And I don't think a new chairman really wants to have a mutiny or revolt in his or her first year at the helm. So we have to recognize that the Fed is an institution. It's not one person. It probably is way overblown to some extent as to who is going to be the next Fed chairman. If you remember when, I think it was President Obama. appointed Janet Yellen. Everybody thought she was going to be some sort of patsy. She was the one that started engineering quantitative tightening.

You know, you go all the way back to when Volcker resigned early and you had Greenspan in 1987, which was a surprise choice. And people were baffled that Alan Greenspan... who's handing out whip inflation L buttons for Gerald Ford, was ever going to become Fed Chairman. I remember I was starting out in the business back in 1987. That raised a lot of eyebrows, and you couldn't have predicted that within two decades, we'd be calling him the maestro.

So what you see isn't always what you get. I think when push comes to shove, it will be like it always is, how the data unfold. You have a wide divide on the Fed. The hawks are uncomfortable with the fact that... underlying inflation has been above target now for four years there's still this collective shame over blowing the call on transitory a lot of committee members still live with that memory and simply put they are still

not comfortable with the fact that inflation is still above target. From my lens, inflation is a lagging indicator, and what they should be doing is the analogy with... Wayne Gretzky and Mark Messier back at the Edmonton Oilers in the 1980s, and Mark Messier said, you don't pass the puck to where Wayne Gretzky is, you pass the puck to where he's going to be. I agree, actually, on this with Stephen Myron that...

The Fed should be more forecast dependent than data dependent because the data inherently that they look at are backward looking and lagged in nature and the Fed's actions have their peak impact at least a year down the road.

You know, you mentioned before about a policy error. Yeah, I would tend to agree with you. I think the more the Fed talks about data dependency, the more they're painting themselves under the corner of we're just going to be focused policy on coincident to lagging indicators, which I do think is actually a mistake.

So the hawks don't like the fact inflation today is above target without referencing where inflation is going to be a year from now. They're just looking at the here and now. The same group of hawks tend to believe that. the weakness of the labor market is not demand-related. It's supply-related because of the immigration curbs and the impact it's having on the labor force.

And that's about half the FOMC. The other half see it the other way, less about inflation. They're concerned about inflation, but they're more concerned about the labor market and see the cooling that we've been witnessing as being more demand-related. And then supply related. And they're respecting the fact that they have a dual mandate, which is full employment and price stability. Price stability defined as 2% core inflation. Even within the doves, there's tension.

because they're not comfortable with inflation any more than the hawks are. The big difference is their view on the labor market. From my perspective, by the way, as we're talking about the Fed and they talk about the dual mandate, They call it the dual mandate, but it's not really a dual mandate. It still is a single mandate because you're not going to be getting inflation if the labor market doesn't play ball. So they call it the dual mandate.

If the labor market is cooling off, and what I say to the hawks is that you can see it in the rise in the unemployment rate, and you could see it in the fact that despite what they say on labor market constraints, As we saw in the non-farm peer report, the participation rate is actually going up, not down. And wage growth is cooling off. You've got wage growth cooling off. You've got the participation rate going up. You've got all the different measures of unemployment going up.

That's not telling me that we have a fundamental supply problem in the labor market. It looks to me as though the cooling is demand related. And so what happens is that insofar as we have any inflation, it's just going to get snuffed out. in the labor market, which means that real wages contract. Real wages contracting leads to a decline in real consumer spending, which is 70% of the economy, and that demand destruction, which nobody's talking about.

is what ultimately is going to trigger the disinflation that the hawks don't see right now because they're looking in the backward, looking in the rearview mirror. So that's where I come out of it. I think that people are going to be surprised.

that probably as soon as the second quarter, the inflation that's above target is going to be back to target and heading below target. And the Fed will be scrambling to cut interest rates. I know that's not on the market right now. That is... far from the consensus view but i've never been shy in my career from betting against the consensus rightly or wrongly but my sense is that when i'm taking a look for example at the information

that Jay Powell gave us at the last meeting. Powerful information. I don't know why people in the bond market, people in the swaps market, have ignored it. Powell came out and said that cornflation... after adjusting for the tariffs, which, by the way, haven't had a monumental impact on inflation, not nearly to the degree that we thought it would by now. But he says we're already in the low twos on core inflation.

X tariffs, which means we're almost at price stability X tariffs. And you'll say, well, why are you X-ing out the tariffs? And I'm saying, well, because he also told us that the tariff effect should start to subside in the first quarter of next year. So if the tariff effect, which is really a cost, exogenous cost shock, it's not a demand-led shock with any multiplier impact, it starts to fade. But what's going to be ongoing is this dominant...

component of the CPI and core CPI, which is shelter. And now you're seeing home prices declining, but you're also seeing rental rates continue to decline. And that hasn't shown up yet with its full force. in the CPI data. But once we get past the tariff effect, and at Powell's right, it's the first quarter peak in tariff-related inflation, and we get the cascading impact where...

the negative rental rates start to seep in with a lag into the CPI data, people will be surprised. They'll be surprised at where inflation is going to be going. You know, this reminds me of all the inflation being talked about.

in 2008 of all years. Now, I want to make the point that up until Lehman and AIG and Merrill collapsed in September of 2008, nobody had a recession in their calls, except for me and a... maybe a couple of others. The recession started in December 2007 once we got all the revisions. We were told that the recession started in December of 2008 by the NBER.

And they had the temerity to tell everybody, by the way, it's been with us for a year. It didn't start with Merrill and Lehman. And it didn't start with Bear Stearns in March of that year. It started in December of 07. And if you remember in that same year. People were not talking about the economy. They were talking about what? They were talking about inflation. Because oil hit $150 a barrel. And you had tremendous consumption coming out of China.

driving commodity prices sharply higher. All anybody talked about was inflation. In fact, if you go back to the summer of 2008, the Fed switched to a tightening bias two months before Lehman collapsed. Richard Fisher, who was president of the Dallas Fed back then, was a voting member on the FOMC, and he voted for a rate hike in July of 2008. And Trichet, the ECB actually raised rates. If you told anybody...

As oil was heading to $150 a barrel in the summer of 2008, that in the coming year, inflation was going to swing from, say, plus five to minus one, you would have been a laughing stock. you'd have been a laughingstock. I'm not saying that inflation is going negative, but I think the surprise in 2026 will be how pronounced this disinflation is going to be that nobody seems to see right now. Okay, so softening inflation in 2026. Let's...

broaden the conversation, not just to Fed policy and inflation, but just the U.S. economy generally. Seems like most market participants are just obsessed with artificial intelligence as if it's everything. What are the major drivers going to be in the U.S. economy? important is the AI trend really? And what do you see in terms of the big picture for the economy? It was all AI this year and most likely will probably be all AI next year unless you start seeing a pullback.

in these dramatic spending commitments that have already been announced. Maybe that'll happen. But right now, that's just a guess. It's a very lopsided economy we have in our hands. And even though there's been some broadening out... in the stock market lately, it's still basically a bifurcated market as well. I mean, I was astounded to see that almost 40% of...

The S&P 500 membership actually hasn't risen this year. In a year where we were, up until the other day, up 17% of the S&P, almost 40% of the market didn't participate. That's rather astounding. You know, when we hit the highs in the stock market, back on, when was it? December 11th, just a few days ago.

On that particular day, only 17% of the members of the S&P actually hit a new all-time high on the same day that the S&P hit an all-time high. So I'm starting to see all sorts of divergences in the stock market ongoingly that... is also reflected in the economy. So 2025 was the letter K, K-shaped economy all around. We always talk about the K-shape for the consumer, but we also have a K-shape to...

business capital spending, because that's where the boom has been. AI and related CapEx in value terms is up at a 17% annual rate so far this year. That's a boom. The rest of... CapEx and what we used to call the old economy is negative 3%. You look at the industrial production numbers, it's incredible. You look at the 12-month trend, 12% in technology and it's almost flat in X technology.

We haven't seen a bifurcation like this really since the late 1990s. It might not be 100% the same, but there's a lot of similarities. So CapEx is actually in a downturn, ex-AI. The AI boom. is basically diverting resources out of other parts of the capital spending picture. This is not a broadly based CapEx story. And then we all know the consumer story, right? Where basically the top 10% are carrying the load.

The low-end consumer is in a whole lot of pain, and that stress is now morphing into the middle-income people. And, of course, they've been hit by the stubbornly high prices and the fact that wage growth is rolling over. So their real incomes are being constrained. The high end is carrying the ball, and the high end is carrying the ball because their spending is less sensitive to the labor market and more sensitive to the equity wealth effect on spending.

As Ben Bernanke should talk about at Dosia when he was Fed chairman, we have the mother of all equity wealth effects on spending, which is allowing the top 10% to carry the load as the other 90%. are dragging their derrieres, as they say on the Quebec side of the border. So it's a bifurcated CapEx picture, a bifurcated consumer spending picture. It's astounding.

that people talk about the vibrancy in the economy, because if you're taking a look at the economy from an income standpoint, now, of course, equity investors pay for profits, but most of the country's income comes from the labor market. And in real terms, real disposable personal income is actually running almost negative 1% in annual rate since April. But consumer spending is up almost 2%.

About a three percentage point gap between what incomes are doing and what consumer spending is doing. And so if the consumer writ large were compelled to. keep their spending in line with their incomes, we would actually be talking about a mild consumer recession right now. But you see that hasn't happened because the stock market gains.

have triggered a significant decline in the personal savings rate that's allowed consumer spending to rise, even with negative real incomes. And that's principally because of the high end. So what happens for 2026? is basically it all comes down to the stock market. If you're going to tell me the stock market is showing up another 10%, 15%, 20%, the high end is going to continue to keep the whole thing together. That'll be the energizer bunny.

And if the stock market doesn't continue to go up, we've got some major problems. Everything really rests on the stock market for 2026. Not fiscal stimulus, but the stock market. Because the glue is being held together right now by the high-end consumer, and that's it. And the glue and CapEx is being held together by AI. And so they're all joined at the hip, basically. And what if we start to see...

a pullback in some of these spending commitments. So these are some of the downside risks. The labor market, to me, is really key. The labor market is really cooling off significantly. In fact, when you're taking a look at the data, We're either at a point of just utter stagnation, depending on the measure you look at, or jobs are actually contracting. But the one thing we do know with certainty is that labor market slack is coming into the system. I mean, look at it. We got...

What did the unemployment rate go to? 4.6%. We're already above the high end of the Fed's forecast for the cycle. We're already above that. And if that continues, it puts downward pressure on wage growth. And wages lead consumer spending. And so everything boils down to the stock market to keep that high end. That high end's got to keep on spending because they don't expect at the low end.

and the middle end are going to participate. Now, maybe they will in the opening months of next year because of the tax refunds, but there's no multiplier impact on that. That is, the tax refunds that everybody talks about is not a repeated source of income growth. That's a one-off. And basically, from my back of the envelope calculations, 50% of that windfall is going to go into healthcare premiums, auto insurance, property insurance.

and electricity costs. That's going to eat up all those refunds that people are talking about are going to precipitate a consumer spending boom. Yeah, there'll be a spending boom in the basic necessities of life, but that money is not going to flow through into... Airlines, autos, furniture, appliances, hotels, casinos, that's not going to be happening. That money is going to be diverted into sustenance.

And so I think next year is going to be a pretty difficult year for the economy. This year was a difficult year for the economy, but the market saw right through it because of the AI craze. But we'll see if that's going to be repeated in 2026. So I think that there's a lot of challenges ahead for the economy. The big difference now compared to a year ago is the shape of the late market is deteriorating.

And this is why we never got the recession in 2022, 2023. We had the inverted yield curve. We had the Fed aggressively tightening to get ahead of the inflation. You see, back then, we had two things going on. We had the $2 trillion of Biden stimulus checks still being spent in the system, which managed to dwarf the impact of rising interest rates, but we didn't have any job loss.

The labor market in 2022, 2023 was just fine. The labor market was tightening, and that was giving workers more wage growth. That's why with the Fed missed that for a period of 18 months, we had a wage price spiral. But that's what we have on our hands today. I think that's probably when I mentioned that there's a lot at risk if the equity bull market doesn't continue, a lot at risk because the spending growth in the economy is confined to the high end and they are spending their equity wealth.

So a lot rides on what the stock market does. But at the same time, what's really changed? What's really changed? The bond market hasn't changed that much. The stock market hasn't really changed that much. What's changed the most is maybe the most important market that's out there, which is the U.S. labor market. It's basically responsible for over 70% of the economy.

So that to me is going to tell the tale. And frankly, when I hear about the refunds, refunds, refunds, refunds are not going to cause employers to go out and hire people. It's a transitory effect. So that to me is my principal concern for the U.S. economy, two of them really. Will the bull market continue? And we've never had a situation before where S&P 500 and GDP were this tightly linked through the high-end consumer.

And at the same time, is this just a blip in the labor market? It doesn't look like a blip. It looks like a pattern. And will it continue? Because that, of course, is going to have a big impact on the lower and middle income households at the same time.

Okay, you've made a really good argument that... Basically, everything is riding on the stock market more so than ever before. Seems to me like a lot of people have made a very good argument that what's holding the stock market up is the AI trade. That's really what it's all been about. It sounds like you agree with a lot. I can't help but notice the AI.

boom cannot continue without a whole lot more electricity supply that we don't really have. And as much as that makes me bullish about nuclear energy in the long haul, it takes... 10 years plus to build a nuclear power plant. It's not going to solve any problem this year. Are we at risk of...

The AI boom basically being stopped in its tracks by a lack of energy and also complaints from consumers about higher electricity prices. Is that potentially the black swan event that could screw everything up?

Oh, absolutely. That is a critical constraint, is the strains that AI is putting on a power infrastructure. You're already seeing the impact it's having on electricity costs. For people to talk about the... deflationary impact of ai which is probably valid in the future the currently the energy related strains and constraints are pervasive but the other part of this story is what about the financing

And this is where the EAI story has shifted because it's no longer the case that the boom is being financed from internally generated cash flows and strong balance sheets. We're seeing tremendous debt issuance. And now in a lot of cases, those credit spreads are widening out pretty dramatically. So there's two constraints. One is the capital markets and one, as you say, is energy. And, you know, when you consider that.

The AI craze has been such a monumental shift in expectations. Historically, at any given year, corporate profits are up around at a 7% annual rate, 7.5%. That's the normalized historical earnings trend. The market now has priced in for the next half decade, 15% average annual earnings growth. So there's been this shift in the innovation curve has caused the investor outlook for corporate profits because of all the...

alleged productivity gains are going to be getting and cost reductions, that's a double. So you have a lot priced in. Look, the reality is that comparing this to the late 1990s, it's true that the valuations were... in the stratosphere back then but this is basically i would argue the second biggest bubble after that one in the past century and you know when you're in a bubble phase the news has to continue to come in stellar

And so it's interesting because this AI trade and the financial markets has started to roll over. Maybe not everybody simultaneously, but, you know, from their respective peaks, the average... mega cap tech stock is actually down 20% and the median is down 10%. It's just not that noticeable because there's been this rotation towards the value trade.

and rotation towards the value trade because there's this view that the economy is going to be doing just fine, so go into the cyclicals. But I think that's going to be put to the test as well. The thing we have to remember is that the major averages don't typically peak all at the same time. They certainly didn't back in 2000. So my sense is that if you're looking beneath the veneer, you're starting to see some cracks already emerging as far as the stock market's concerned in the EI trade.

The question you'd have to ask is that, how much will this rotation into other segments of the market continue to play out? But, you know, I'll just say that the valuation excesses really aren't just... limited to what's happening with large cap tech. Most segments of the S&P 500 are actually have their price earnings multiples.

between one and two standard deviation events above their historical norms. Like, nothing's really cheap. You know, there's some areas that are cheap. Energy is cheap. Materials are cheap. The REITs are cheap. Utilities actually, believe it or not, screen pretty well on their relative multiples. But that's basically it. And that's a small share of the market. That will not be able to hold up. The financials and consumer discretionary aren't in bubbles.

but they're between one and two Sigma events. Tech and telecom are well above two. So overall, this is still a problematic market if you're a purist and you believe that valuations matter only in the sense not being timing devices. But are you investing with a tailwind or a headwind?

Is the wind in your face or the wind in your back? I'd say that for the stock market overall, even with a lot of these value plays that recently have worked out well and prevented the stock market from going down more than it has because this AI trade has started to more than.

It's been more than just a wobble over the course of the past four to eight weeks. If that value trade doesn't hold, and remember that we had another shift into value after the tech wreck started in 2000. There was that shift into value. with the same mindset. Okay, we're going to shift the value. That didn't work out so well. And that's what I mean. That was the last time, really, we saw the economy and the stock market joined at the hip to this extent.

You know, when I started on the business in the mid-1980s, it was the economy that led the stock market. The economy led the stock market. Stock market participants wanted to know from people like me, what's the economy going to be doing? Today, economists have to base their economic forecasts off what the stock market's doing. It's like the tail and the head of the dog of changed places. So you go back back then, you know, the stock market peaked basically.

Depending on what measure you want to look at, certainly the tech sector peaked in March of 2000. The recession started in March of 2001, 12 months later. So there's a case where the stock market basically dictated where the economy was going to be going. And nobody, nobody, not even the Greenspan Fed, up until January of 2001, when it started the cut rates, thought a recession was probable in 2001.

Now, I'm not going to go on a limb again and say we have a recession for next year, but I do think that recession risks are higher than what's commonly perceived. I find this to be just fascinating that in 2022 and 2023... And remember, 2022 was a pretty bad year for the stock market overall. Cyclical stocks were down like almost 30%. We were all consumed with recession fear in 2022. In 2023, we never got the recession. And now the recession risks are higher.

And nothing is priced for recession, not one asset class. So that's the dichotomy, but that could also be the opportunity if you're a contrarian investor.

Speaking of contrarian investors, let's go back to your disinflationary call. The other side of that, the inflationists are saying, look at commodity prices. You know, gold is just the first one. It's all a sign that massive inflation is coming.

That's the reason we're seeing all the upside in gold and copper and all the commodities. Well, hang on a second. The most important commodity is crude oil. We're certainly not seeing a huge inflationary signal there. But boy, gold and copper have been awfully strong. So what is... driving commodities. And why are we getting these kind of uncertain signals? You know, these commodities have different specific dynamics and idiosyncratic features. So, you know, copper is...

Obviously, tight supply, silver's tight supply. Gold has been in a bull market since 1999 when the Washington Agreement was signed and the central bank stopped. dumping gold on the market gold is really a function of what central banks are doing and diversifying out of u.s dollars and into in a bullion so that's the story son inflation story it's a allocation shift story amongst the

global central banks. I don't think that's an inflation story. And the bull market and gold that people have woken up to has been going on for the past quarter century. You just have a lot of people recognizing it right now. Well, there's nothing more powerful than oil. And oil is going down, maybe for its own specific features. If it's not been OPEC plus overproduction, then now it's this concern coming to the oil market over possible.

peace with Ukraine and Russia. We'll see where that goes. So remember, oil always has some sort of geopolitical element attached to it. But the oil price can't get out of its own way. There's no impulse. from oil and oil is far more important. I mean, what does copper go into? Copper might go into a lot of things in terms of an industry input and it's part and parcel of what's happening in the proliferation of data centers.

Oil goes into everything. There's nothing more endemic than oil. And it also has powerful spillover impacts into core inflation. I'm not getting a big inflationary impulse from the commodity complex. And even if I did... Remember, I was talking about what oil did because of China when it got to almost $150 a barrel, you know, back in the summer of 2008. And inflation got to between 5% and 6%. And you had central banks around the world freaking out.

And then a year later, inflation is negative. So there's nothing more powerful really than the labor market. And the labor market is loosening. So we can talk about commodity inflation all we want. How sustainable is it going to be? If you have a loosening labor market, then any cost-push inflation you see from any source will hit the wall in the labor market because it'll either lead to contraction and real...

work-based incomes, which leads to demand destruction in the economy from 70% of GDP called the consumer, or it gets absorbed margins. Pick your poison. Do you think the loosening of the labor market is AI-related, as many people are saying? I think that there's a strong element to that. I think that we're still in this policy uncertainty environment, even though the uncertainty levels because of the tariffs have come down from their peaks.

They're still in many cases two to three times higher than the historical norm. But, you know, when you're taking a look, for example, at the Challenger Gray and Christmas survey data that come out, you know, every month. And they tell you what's happening by reason. By reason, why are we seeing these layoffs? And layoff announcements have been picking up almost 40,000 pink slip announcements in the past.

Two months. October, November, just from AI. That's new. This time last year, October, November of 2024, layoff announcements due to AI were zero. And now we're up to just two months, almost 40,000. I was rather surprised that Jay Powell downplayed that at his last press statement. But I think you're starting to see some of that come to the fore.

David, let's translate all of this discussion of the economy and so forth into where the trades are in the market. As you said, the gold bull market has been strongly in place since 1999. But boy, it's had a hell of a run. Does that mean it's over? Does that mean it's...

It's overdone here. Likewise, stock market, boy, it's really been blown up by AI. It sounds like you're a little nervous about that. What do you see in terms of asset allocations and where the trades are? Again, it's a situation where... Your assumptions will drive your conclusions. If you're in the world that believes that we're not in an asset price bubble, and then you just want to whatever worked in 2025.

you'll believe will work in 2026. You may have believed that the same story from 1999 to 2000, and I would reckon that that was probably a pretty big mistake to have made. I think we're in a three standard deviation event, just about when it comes to the most important multiple that I look at, which is the Schiller Cape, the sickly adjusted.

price earnings multiple, which is pressing against 40 right now. Jeremy Grantham famously said that a price bubble is when you cross a two standard deviation event. And that actually happened in the U.S. stock market. back in june of 2024 so this is about a year and a half now of being in a bubble which by the way historically is the norm bubbles don't last one day

We're just in a bubble phase. It's like basically we're playing extra innings. Bubbles go into extra innings. And historically, before the Ghostrunner rule in 2020 in baseball parlance... extra inning games went to the 13th or 14th inning and what i'm saying is that we're in the 13th 14th inning right now and historically during the bubble phase you can make money you just have to understand that you're chasing nickels in front of the steamroller in the bubble phase

But normally you're up 25% in that period. And this time around, up until the recent peak, we were up 27% in a year and a half, which actually mirrors both in terms of magnitude and duration what a bubble period looks like. But as Bob Farrell famously said, that bubbles last longer than you think, but they don't correct by going sideways. So I think that if you have that mindset, and keeping in mind, by the way, that this is the sixth.

bubble of the past century in terms of crossing a two sigma event in the Cape multiple. And when you cross a 35, and we're at 40 now, 35 is the cutoff point because it's the only point in the Cape multiple. where on a one-year, three-year, five-year, ten-year basis, your total return in the S&P of 100 is negative across the board. Why would you relegate yourself, your family, your friends, and your clients to that outlook?

I want to wait for the valuations to normalize. I'm actually amazed that people seem to think that the market cycle and the economic cycle have been repealed, that somehow Mother Nature has been shot in the head. No, everything... In our personal life and in our professional life, they move in cycles. And so I believe we're in a bubble. When you get to these multiple levels, the news has to continue to not just come in good, but come in great.

And it didn't take much. It didn't take much. Remember, the recession didn't start till March of 2001. And the Nasdaq peaked 12 months earlier. And that was the leading indicator. And it just took small amounts of... Not so good news to cause things to reverse. That's the danger of inflated multiples. When people say, well, multiples only matter, valuations only matter when they matter. But then when they start to matter.

They really matter because in a bear market, 80% of the drawdown is the compression of the multiple and 20% is the actually decline in earnings. That is the power of the multiple, the heartbeat. of animal spirits in the risk asset space. You know, I can tell you how I'm situated. I am still involved in gold and silver and the gold and silver miners.

I still like uranium as a long-term play. I've taken a bullish position in the Japanese yen, which is maybe the most undervalued of anything on the planet today. I also have treasuries, twos and tens. I have the mid part of the UK yield curve because the UK and the US are the high yielders in the G10. And I think the central banks in both countries will be cutting rates more than expected.

On top of that, I would say that other themes that we like, you know, we do have a derivative AI play, I guess you could say, but one that has a yield and a payout ratio, which is utilities, which has cheapened up a lot in the past couple of weeks. And global aerospace defense, that's a core holding. And healthcare. You know, when you take a look at my portfolio, it's diversified. Diversification to me is not a dirty 15-letter word.

I'm not zero-weighted inequities, despite how bearish I am. I don't believe in zero or 100. I don't believe in black and white. I believe there's just shades of gray. But there's different ways you can de-risk your portfolio without having to sell. your equities. It's about managing your beta and managing your Sharpe ratio. In other words, risk management. That's the operative word for the coming year.

much more so than this past year when you can just basically throw a dart against the wall and think that you're brilliant. That's been the case for the past few years. That's why everybody thinks that the cycle's been broken. They can't basically separate luck from skill. But this is going to take skill this year. You want to be creative. You want to be thematic. You want to drill down to the subsector level if you're in ETFs. But I would say that you want to be mindful of risk.

management, which means maintaining a low beta. The beta in my portfolio is 0.4. I like that. The Sharpe ratio is 2.5. I like that. The running yield is almost 3%. I like that. I would say that if you're going to be in equities, you want to be defensive and you want to be involved in areas that are not expensive and also have secular tailwinds. Tell me that global aerospace defense.

does not have long-term earnings visibility right now i'm taking a good hard look at what's really lagged this year a lot of that was because of the tariff effect but consumer staples now i buy the consumer staples on an equal-weighted basis, not market cap since Costco is such a big chunk of that, but I would say that the equal-weighted consumer staples...

It's something I'm looking at really closely. That probably is going to be my next move. And we're also looking at, I should mention also, we have Canadian pipelines in our portfolio. But we're also starting to look at energy more broadly speaking since it's so far out of favor. But investing in parts of the energy infrastructure that isn't correlated with the oil price. So you see...

I'm not telling you to go out and buy baked beans, canned tuna, barbed wire, and sawed-off shotguns. What I'm saying is that we have to focus on ideas, thematics. I would not be investing in any of the major averages. I'd be drilling down into your thematics and what you believe has earnings visibility so you don't get hurt when things move in the other direction.

Focus on blue chip dividend growth, dividend yield, so you have at least a running income flow. And I would say that having some cash on hand is not going to be a bad idea. You won't have liquidity. You want to have liquidity. This is the year coming up thematically where you want to engage in much more diligent risk management than you've done any other time this cycle.

You want to make sure that you have liquidity. You know what you want to do? You want to focus maybe on what Warren Buffett is doing. Now, that's pretty extreme. Pretty extreme to have over 30%. of your portfolio in cash. David Rosenberg does not have 30% of his portfolio in cash, but I have a nice cash position. But you should ask yourself the question, somebody who has that much experience.

And let me tell you something. I don't know Warren Buffett personally, but I know people that do, and they tell me he has not lost a step. He's got $380 billion in cash right now. Over 30% of his portfolio is in cash. I think we should all ask ourselves, what is it that he is seeing that the vast majority of retail investors, without his experience or acumen, because it's not the institutions driving this market, it's the retail investor.

The retail investor who has been buying through low-cost ETFs and they don't even know what it is they own. But they should ask themselves the question, what is it? Because Warren Buffett has never not once had a cash position this high as he has today.

Well, Rosie, I can't thank you enough, as usual, for a terrific interview. But before I let you go, I want to ask you about a couple of rumors that are floating around. One is about a new Rosenberg Research macro ETF that might be in the works and also... Maybe a new book coming out. What's going on? Word spreads quickly. But the thing is that I've been writing about this in my daily. I unveiled a model portfolio. I had to show the world that this radical perma bear.

known as David Rosenberg, could actually make you money in a diligent and prudent manner. You know, when I told people that I had not had a down year personally since 1987, people refused to believe it. But why would you think? Otherwise, because I'm a conservative investor, I don't swing for the fences. I bunt for singles and hit the odd double. My philosophy has always been you win by not losing. So I don't hit home runs.

If you want home runs, I'm not your guy because I don't like to strike out. That's the bottom line. Because people were asking me for so many years, if I had to grade my career, all my calls, how would I do that? I thought, OK, at the end of 2000. in 22, I said, I'm going to actually put my money where my mouth is and start a model portfolio. And I've highlighted it, and it's there on my website all the time with all the holdings. People could see it.

It's ETF-based and it covers all four corners of the capital markets, equities, fixed income, currencies, and commodities. And it's actually up 50% since inception three years ago and up 25% this year. through client demand. I got clients that are actually mirroring this portfolio in their own accounts, but I didn't start it to ever run my own ETF fund.

I'm going to be starting that, again, mostly on client advice and advice from my advisors. And it should be sometime in the first quarter. It has to go through all the certification right now, all the regulatory. situation. And I don't know what we're going to call it just yet. It'll be listed on the TSX, but U.S. investors can invest. There'll be a U.S. dollar, Canadian dollar version. That'll be sometime in Q1, probably closer to March, the way things are looking right now.

Right now we call it the Rosie Macro Fund. And you can check it out on our website. The book is something that, again, people were bugging me to write a book since I left Mural back in 2009. And I finally got to it about a year ago. And I've been writing more chapters. And that will probably be, again, a first quarter story. I may end up, because I don't want to wait a year to have a big publisher. I've been talking to some of the publishers.

It seems to be a little just too bureaucratic for me. I may just end up self-publishing so I can get it out earlier. And that'll be coming out probably sometime, I hope, in the first quarter as well. And it's basically just a book about my 40 years of experience. on Wall Street and on Bay Street, and how these 40 years of experience have continued to help shape my views and convictions to this very day.

Now, of course, all of our listeners are familiar with Breakfast with Dave, the newsletter that you've been writing since before the beginning of time, I think. You've expanded quite a bit in your offerings at Rosenberg Research, and you've been a perfect gentleman about offering our Macro Voices listeners a...

free one-month trial to all that cool stuff in your last few interviews. Can we get that deal again? Yes, except, you know, Jacob, my COO, has told me that it's actually a two-week trial, but it doesn't mean that if you... like it a lot in another couple of weeks that we wouldn't extend it. But we do have a free two-week trial for everything that we do, which includes the daily commentary and the weekly. You know, we scan the world.

I have 2,300 clients in 40 countries. Our investment analysis and economic analysis looks a lot like our client base, geographically diversified, but also diversified across all the asset classes. The other thing I just want to mention is that we also have an information hotbox that 24-7 people that want to contact me through the information hotbox. I call it the information inbox.

Clients have access to me 24-7 through email, and that has been a major home run, that one service. I spend 20% of my day just conversing with my clients insofar as they have questions, queries, criticisms, whatever. That's a great way for me to stay engaged and keep myself sharp. David, if people want to sign up for the two-week trial or if they want to find out generally about that, give us both the contact for the two-week trial and also the website.

Sure. Well, you could always just Google Rosenberg Research and it'll pop up. If you want to sign on to the free trial, it'll take you 20 seconds to register. Just go to information at RosenbergResearch.com or if you run into any difficulties. Just email me, drosenberg at rosenbergresearch.com. Patrick Ceresna and I will be back as Macro Voices continues right here at macrovoices.com.

Now, back to your hosts, Eric Townsend and Patrick Ceresna. Eric, it was great to have Rosie back on the show. Listeners, you're going to find the download link for the post-game trade of the week in your Research Roundup email. If you don't have a Research Roundup email, that means you have not yet registered at MacroVoices.com. Just go to our homepage, MacroVoices.com, and click on the red button over Rosie's picture saying looking for the downloads.

Patrick, Rosie made a strong case for revaluation of the Japanese yen. So for this week's Trade of the Week, talk us through how you'd position for that long yen theme. Eric, if Rosie is right and we get a deflation scare... With the Fed ultimately cutting more aggressively, then the US-Japan rate differentials are going to compress hard. And that's exactly the kind of backdrop where the yen can really move. Now, on top of that, the yen is already trading.

at historically cheap levels in real terms, I want to structure a long yen trade that gives us convex upside if the revaluation finally starts to play out. On page two of the deck, you can see the implied volatility on the yen sitting down near the lows of the year, which makes owning gamma relatively inexpensive here and materially reduces vega risk of putting on a long vol structure. Normally,

I'd be looking for some kind of options combination to engineer more tailored payoff. But given the upside potential relative to the premium outlay here, I think the best expression is to keep the upside open-ended. rather than capping it. The December 2026 yen futures are trading around 66, and the December 4th 66 calls are about 24 points, roughly 3.6%.

of the underlying for almost a year of optionality. Buying that gives you a clean topside yen exposure with clearly defined risk. The breakdown of the trade is on page three of the chart deck. Patrick, every Monday at Big Picture Trading, your webinar explains how retail investors can put on our most recent trade of the week. For those listeners that want to explore how to put on these trades in greater detail, don't miss out on a 14-day...

free trial at BigPictureTrading.com. Now let's dive into the post-game chart deck.

Eric, last week you didn't give a strong view on the short-term direction of the stock market, so instead of commenting on the S&P, you gave our listeners a long-term outlook for the likelihood of a dovish policy error by the Fed in 2026. You also told me off the air that you also had some strong views on where the AI trade is headed for 2026. So let's cover that before we dive into our usual weekly post-game chart deck.

Well, Patrick, the trade of the decade is clearly AI. So the most essential question is whether this is a bubble that's about to burst, as many astute investors are betting on by putting puts on NVIDIA and making other bear trades on the AI story. An investor I respect recently told me that he thought that in the long term, AI could be even bigger than the public internet as an investment trend. I agreed in principle, but immediately I was hit with the feeling that, yeah.

Internet is the wrong trend to compare AI to. What I would say instead is that AI could be as big as the Cold War. The reason I prefer that analogy is that the public Internet was primarily about private... sector opportunity to profit from the emergence of e-commerce. AI has many applications, but to the U.S. and Chinese governments, this will be an existential race for survival on par with the U.S.-Soviet arms race.

AI leadership are daunting, and both governments understand this well. Hence the Genesis and Stargate announcements from the Trump administration. But I contend that most investors who are focusing on who has the best GPU technology or which large language model has the best inference performance, I think they're missing the real story.

We're still early in this arms race, and what will ultimately matter the most in determining the outcome, in my opinion, is spare capacity for electricity generation. All the stories you've heard about AI consuming all of our electricity and demand from massive data centers, overwhelming markets, and sending electricity prices to the moon, it's all true. That's coming. plain and simple, and there's nothing we can do to stop it. AI is going to consume a shitload of electricity.

There will be very loud cries from consumers for electricity to be rationed to AI data centers to prevent breaking the back of the American consumer. But the federal government already correctly understands that they can't give up or back off on AI. It's become an arms race that will literally determine the balance of power in the world starting in the mid-20s.

30s and through the end of the century. So throttling AI's electric consumption simply won't be an option from a national security perspective. And that's not true for all AI. Obviously, chat GPT isn't essential. to our standard of living. The development of AI technology and particularly the military and economic dominance aspects of AI that could provide a major competitive advantage economically to one nation over the other.

Those are really important national security issues. Now, here's the rub. Building out new electric generation capacity takes several years for power plants fired by coal and gas and at least a decade for conventional nuclear. Now, you're hearing a lot about things like Three Mile Island coming back online. It's true that there are restarts of existing nuclear power plants that are going to provide a big shot in the arm initially.

Those have already been sorted out. The ones that can be turned back on, they're in the process of doing that. There aren't any more of those in the pipeline. After that, it's going to take at least a decade to design and build the next nuclear. plants after those. And China saw all of this coming decades ago and planned ahead. China has more conventional nuclear reactors already planned or under construction right now than the entire U.S.

operating nuclear fleet. Think about that. It's a really profound statement, and it's true. On the advanced nuclear front, China is the unquestioned leader in commercializing thorium energy. That was invented in the United States in the 1960s. But while the West wastes valuable capital and intellectual energy on fusion energy projects that simply won't be economically viable for decades,

China, on the other hand, has already got much more spare electric generation capacity than the United States and by a wide margin, and they're building a lot more. Simply put, China already has. All the gigawatts they need to scale up their AI data centers as much as they could conceivably need to in the short term. And China is already hard at work.

building out the nuclear plants, not thinking about it, not planning it, not putting it on the drawing board, but they're actually building the nuclear plants needed to take AI to the next level. Now, the Trump administration, and in particular, Energy Secretary Chris Wright, definitely get honorable mention for doing all they possibly can to get the United States back onto a sane nuclear energy policy path. So kudos to Chris Wright. Fantastic job. Couldn't be more happy with that guy.

But look, he picked up the pieces from decades of failed U.S. nuclear energy policy. And it's going to take decades to catch up with China, no matter what decisions are handed down from the White House. to be honest with ourselves, Americans, the United States simply isn't as good as we once were at big, bespoke public construction projects, particularly nuclear plants.

There's only one nuclear plant that's been finished on time and on budget in my lifetime, so far as I know. That's the Baraka Project in the United Arab Emirates. The other... big nuclear completion that was just completed a couple of years ago was the Vodal power plant in Georgia. Guess what? Baraka, basically the same reactor technology.

But they chose the Korean reactor as opposed to the American reactor. They got it for about one-third to one-quarter, depending on how you crunch the numbers, of the cost of building Vodal. Now, a lot of people will say Votel's not a fair comparison because that was a really screwed up project. Well, guess what? Most of our American big...

construction projects are screwed up with major cost overruns, schedule and budget overruns. What we've got in terms of hard data for a comparison is Vodal versus Baraka, and it shows us that the United States just is not good at economically building big nuclear power plants. China is building American designed nuclear power plants at a much lower cost than we can build them in the United States.

Returning to the outlook for the stock market, the AI trend will probably be bigger than the public internet trend that began in the 90s and which continues to this day. But just like .com in the early 2000s, a bust or two along the course of this long-term trend is not only possible, but likely.

The right way to think about the AI trend is to liken it to the Cold War and expect government spending on the same scale in order to support it. But just as economics prevailed in the 1980s and the Soviet Union simply couldn't afford... to outspend the United States in the Soviet-US arms race, it's going to be energy rather than straight economics that determines the outcome of the AI race. And guess what? While I hate to be the bearer of bad news for our American audience,

China is set to kick our asses down the street. USA has the absolute best technology leadership on both large language models and GPUs and designing. nuclear power plants. But I contend that spare electric generation capacity at economically viable build-out cost is going to be what's most likely to decide this arms race. And right now... China is kicking our ass. I don't mean to criticize China.

All they're doing is putting China first, and I certainly don't fault them for that. They've been hard at work building nuclear energy based on U.S. designs that they didn't even have to steal because we gave them away. I expect U.S. government spending on AI and new electric generation capacity, both nuclear and conventional, to skyrocket in this arms race, just as defense contractors profited tremendously in the Cold War.

I definitely think that nuclear energy strategically is the right long-term solution. I predict that a moment of reckoning is coming where we figure out that conventional light water nuclear reactor technology just plans. takes too long to build and it costs too much, at least the way we build it today.

So I'm afraid that the stage is set for us to lose the AI arms race before the first newly designed or newly contracted light water reactors even come online. So I predict that, and this is where the... market surprise is and where the variant perception trading opportunity is. I predict that there's going to be a moment of reckoning where we say, holy shit, we can't afford as much as nuclear is the best solution. We can't afford to wait for it. We need to go massively into really building out.

gas-fired power plants as fast as we possibly can. Now, we're already doing that. There's a huge backlog just to order the gas turbines that are needed to build those power plants. So I predict that there's going to be some kind of government intervention that says we've got to have a Manhattan Project of natural gas-fired power plant construction in the late 2020s and early 2030s.

much of which will be designed as holdover supply until more strategic nuclear generation capacity can be completed because the nuclear construction will take much longer. We've already seen Secretary Chris Wright make some fantastic advances in nuclear energy policy, and I predict that one of his next big moves will be to tackle that five-year-plus backlog for ordering new gas turbines needed to build natural gas.

And somehow make it a national priority to dramatically increase our capacity to build a whole lot more of those gas turbines and a whole lot more natural gas fired power plants. But at the end of the day. The bottom line is that China saw all of this coming decades ago. They planned ahead, and they're already on their way to building plenty of electric generation spare capacity to fuel their AI boom. have to scramble to catch up, and we have only ourselves to blame.

Okay, on to my final prediction, and this is my strongest conviction prediction of 2025. Patrick, I predict that your take on the S&P 500 this week is going to be considerably less long-winded than my views on the AI race. Take it away. well eric my view on the equity markets is pretty straightforward here we have a break to basically 52 week highs

There's a huge open interest of options with the JP Morgan options wheel sitting at the 7,000 strike with the December 31st expiration. At this stage, it's going to act like a magnet. And odds are here that we're going to print 7,000 over the holiday period. After that kind of a move, we'll definitely size things up in the new year. But at this stage, there's no imminent downside risks unless...

catalyst is introduced. And so assuming that the market here gravitates a little bit higher is almost certainly the path of least resistance. All right, Eric, let's dive into this US dollar. Patrick, same as last week, basically, the Dixie sell-off continues in what's now become a very well-established downward price trend. Clearly, the trend is downed. My outlook remains bearish, and the caveat is still that if there's a major policy announcement from...

President Trump and Secretary Besant. That could change things in a heartbeat, but barring a major policy change, I think the downtrend continues. Well, for me, Eric, this dollar continues to actually show substantial deterioration. In my mind, the 98 levels of a key support line, and it's currently being violated, and we have broken to lower lows.

very decisive downtrend. This stage, I consider the window open for a retest of the year lows, where the July and September lows came in around the 96 handle. And does that happen here in the last few weeks of the year? is that reserved for a January drop is yet to be seen. But at this stage, the price action is very weak and further downside on the dollar is the path of least resistance. Eric, what are your thoughts here on crude oil?

Patrick, we saw a material change in the shape of the forward curve this week. Until now, we've had persistent contango. That's a bearish signal from about the March 2026 contract all the way out to the early 2030s. The curve shifted this week to a slight backwardation from the front month all the way out to January of 2027, a full year from now, and then the contango resumes after that.

Changes in the shape of the forward curve often presage big moves in the flat price. So I'm changing my prior call that 55 probably was not the bottom. Because when the facts change, I change my opinion. Now, I'm not sure of this yet, but the way I'm seeing the forward curve evolving, although it's not quite deterministic yet, when we were last at the same flat price about three weeks ago, we didn't have...

this much backwardation. So I'm starting to feel, you know, my spidey senses are telling me maybe this rally is going to really have some some legs to it. And maybe that was a bottom at 55 last week, getting above the 100 day moving average, which.

His 60 spot 26 WTI would be a strong confirmation signal that something bigger than just a swing trade to the upside might be in the making. But it's still early to tell. Changes in the shape of the curve can be transient and a return to structural conditions. and Tango at the front of the curve would invalidate everything I've just said. Meanwhile, my spread trade, LongCLZ6Z7, as described on last week's podcast, is performing beautifully, having moved almost a full dollar now from minus...

one spot 75 to minus zero spot 77. So 98 cents of upside just in the last week. Now, 98 cents probably doesn't sound like a whole lot, but that's a pretty big move on a one-year time spread. Well, Eric, crude oil's at a critical level. The FIB retracement of that December drop is right here around this $58 level, and the 50-day moving average is around $59.

And so we have a scenario where if the bulls can clear that hurdle, that would be the first bullish price action that we would have seen in crude oil since September. And so will we see a holiday surge here in crude oil to see that upside? Will we think to watch? Because a failure here still at 58, 59 leaves the window for double bottom retesting and all sorts of sideways prices.

action, that key level is not yet beat. All right, Eric, we got to talk about this breakout on gold. As predicted here on Macro Voices, the breakout above the prior 4,400 all-time high is upon us, and getting from 4,400 to 4,500 took all of 24 hours. This activates measured move targets in the... the 4,900 to 5,100 range, but be...

careful trying to chase gold with new longs up here. We're flashing extreme overbought on the technicals. So some kind of consolidation or cooling off is to be expected and frankly, a move straight back down to retail. the breakout zone at about 4370 or so would make perfect sense here. Remember, a very common pattern on breakouts is after a few sessions, we'll come back down and retest that previous resistance level.

as a support level. So getting back down to 43.70 is not at all out of the question. So if you're chasing this market with new longs, you better be ready to ride out $150 to $200 of downside before the uptrend continues. I don't know that that correction is coming. It's hard to tell here. But with the vigor of this breakout, just about anything is possible. Remember also that we're in a very thin liquidity holiday period. So moves in either direction can be exaggerated.

Eric, gold broke to an all-time new high, and the upside window is certainly open. Those measured moves are in play. But what's particularly more interesting, and I want to talk about... is what silver, platinum, and palladium are doing and putting that into the same context because silver... has now completed a measured move up to 72 and has gone full-on parabolic. This is at a time when we are seeing full parabolic moves in platinum and palladium, all actually even surpassing upper targets.

Now, while I'm not bearish, silver, platinum, and palladium, I am looking to see whether they put in short-term swing highs or a blow-off top that causes a mean reversion. And the question that I'm asking myself is if we did see some sort of swing highs in those. what is the drag or impact it may have temporarily on gold? Now, overall, maybe gold may actually take flows as some of the money leaves.

those other metals but overall the price action on gold is very bullish it has got lots of room to go on the upside and probably old dips will be bought within a one or two hundred dollar pullback if and as the bull

trend is very well established here. Alright Eric, let's touch on that uranium. Really big news this week, in my opinion, was Golden Sacks coming out with a research note that basically said absolutely nothing new for Macro Voices listeners. Everything it contained is stuff we've talked about with Justin Hewn or Mike Alkin. or Guy Keller in various interviews more than a year ago.

But the thing is, it's Goldman Sachs who's saying it. And I say that this research note is a really big deal for the market. Why? Because the whole problem in the uranium sector is very low. institutional participation due to... the ESG madness, the now expired ESG mandates, and a lack of understanding of the term contracting system and how it works in the uranium market and why the spot price of uranium isn't really.

the primary price signal even though most people assume that it is. The analogy I like to use here is a Hollywood director discovering a young actress, a new movie star. Well, the talent was already there. but it's the director who has the power to make them a star that...

really changes everything instantly. In this case, the profoundly bullish arguments have been there for well over a year, a couple of years. We've been talking about them for years here on Macro Voices. The thing is, the ESG crowd... couldn't touch it because of ESG mandates. Institutional participation in this market is extremely low. Goldman's institutional reach is like...

Scorsese discovering a new actor and turning them into a star. So while Goldman has had plenty to say about nuclear energy in the past, and that's probably why we've seen the outperformance in names like Oklo, which is a... reactor company. Okay, that's not for the fuel. And I think the reason the fuel hasn't moved yet is everybody correctly understands that, wait a minute, conventional nuclear light water reactors take at least...

10 years to build. We're not going to need any fuel for those new reactors for at least 10 years. Who cares about uranium? Well, What they just found out from Goldman Sachs, which, of course, has very high institutional pedigree, even though we broke the story three years earlier on Macro Voices. When Goldman says it, people listen. And now they're talking about.

the structural deficit in uranium supply that's starting in the next few years. I think this research note has the potential to wake the institutional market up to what Macro Voices listeners have known. years, which is there's a tremendous bullish argument that... really hasn't seen much investor participation yet in uranium and the uranium miners. So I think 2026 could be the year that uranium prices really explode to the upside. And I think Goldman coming to the table with this

research note could be a big catalyst in order to get us there. Well, I want to focus on the actual prices of uranium rather than uranium equities. And what we have generally seen here in the last few weeks has been strengthening. of the uranium prices now attempting to approach their third quarter highs. Will we get that breakout in uranium? It certainly, to me, is asymmetric. With the fact that uranium consolidated over the last couple months, it unwound all overbought states.

And it's certainly room that if this breaks out, get to some nice higher levels here on the short term. So looking for that follow through on uranium.

Patrick, before we wrap up the final regular format episode of 2025, let's hit that 10-year Treasury note chart one last time. Yeah, Eric, wrapping up here with that 10-year treasury yield, it has been a consolidation for all of the month of December. And really at this stage, expecting a breakout year over the holiday periods is not realistic. Very likely that we stay bound within the... 4.10 at 4.20 range, waiting on some January economic news to potentially be the catalyst for the next move.

Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck, or just go to bigpicturetrading.com. Patrick, tell them what they can expect to find in this week's research roundup.

Well, in this week's research roundup, you're going to find the transcript for today's interview, as well as the trade of the week chart book that we just discussed here in the postgame, including a link to a number of articles that we found interesting. You're going to find this link.

and so much more in this week's research roundup. That does it for this week's episode. We appreciate all the feedback and support we get from our listeners. And we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners, that write or blog about the markets. We'd like to share that content with our listeners. Send us an email at researchroundup at macrovoices.com and we will consider it for our weekly distributions.

If you have not already, follow our main account on X at Macro Voices for all the most recent updates and releases. You can also follow Eric on X. at Eric S. Townsend. That's Eric spelt with a K. You can also follow me at Patrick Ceresna. On behalf of Eric Townsend and myself, thank you for listening and we'll see you all next week. That concludes this edition of Macro Voices. Be sure to tune in each week to hear feature interviews with the brightest minds in finance and macroeconomics.

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