Markets: I'm Short Junk Bonds

I'm short junk bonds. The yield spread between junk bonds and AAA bonds now is very, very narrow (never been this narrow) and when interest rates go higher and they have already started going higher, junk bonds are going to get killed.

Related trading instruments: 

• SPDR Barclays Capital High Yield Bond ETF (JNK) 
• iShares iBoxx $ High Yid Corp Bond (ETF) (HYG) 

The Worst Bear Market Of My Lifetime

We are going to have the worst bear market of my lifetime and I'm older than you. I have seen same bear markets. It's going to be a mess.

Related trading instruments: 

• Russell 2000 Index ETF (IWM)
• SPDR S&P 500 ETF Trust (SPY)
• SPDR Dow Jones Industrial Average ETF (DIA)
• iShares MSCI Emerging Markets Index ETF (EEM)

Everybody Owns The Same Stocks

Everybody owns the same things, it is eve more narrowly focused now than in previous bull markets because it is now so easy to buy exchange traded funds (ETFs). If you own stocks that are in ETFs, I want to know what they are. These are the stocks that have not been going through the roof, that are still cheap. 

Related trading instruments: 

• iShares MSCI Japan ETF (EWJ) 
• iShares MSCI Emerging Markets Index ETF (EEM) 
• SPDR S&P 500 ETF Trust (SPY) 
• Russell 2000 Index ETF (IWM)

Market: Treasury Yields Will Keep Going Higher

In September of 1981 the long-term bond in America was at 15.50%. I'm not talking about junk bonds, I mean Treasury bonds. By the way, one other thing, in 1981 America was a creditor nation. Now we are the largest debtor nation in the history of the world and the debt is getting higher every day, every hour.

The Next Bear Market Will Be Awful

2008 was awfully bad but since then the debt has gone through the roof, goverment debt alone has doubled since 2008. So the next bear market is going to be the worst in our lifetime. 

Related trading instruments: 

1. Russell 2000 Index ETF (IWM)
2. Nasdaq 100 Futures
3. SPDR S&P 500 ETF Trust (SPY)
4. SPDR Dow Jones Industrial Average ETF (DIA)

Interest Rates Are Gonna Go Up For A Long Time

Q: where do you think yields are headed to on the benchmark 10-year Treasury? 

I'm not a very good market timer and I'm on a very short term trader but I will tell you that interest rate in America (...) we've had very long cycles in the bond markets. Depending on how you look interest rates or bond prices started a bear market in 1946 which ended in 1981, you can tell that that's 35 years. Then in 1981 we started a bull market in bonds. Well that one is gone on for 36 years I'm 37 years.

So bull markets in America anyway have had a habit of being very long. So I would just suggest you that's it's already started turning and the interest rates are gonna go up for a long long time. If I told you how high, you would hang up, you would stop listening to me. So when the next bear market comes in bonds it's gonna be a doozy.

Central Banks: They Say It's All Going To Be OK

Since 2008 government debt around the world has doubled. Everybody has talked about austerity and how we're going to cut back spending and pay off the debt etcetera but the debt has doubled. 

The debt at the American central bank has gone up five or six times in just nine years. This has never happened before in recorded history. Never, ever have interest rates been this low and they say it's all going to be okay. You better call the Tooth Fairy.