00:00:00
I think we're on the precipice of like a
00:00:02
10 trillion wipeout.
00:00:04
>> Whoa. Really? Tell all.
00:00:07
>> By the way, I get this wrong all the
00:00:08
time. This is not financial advice, but
00:00:10
I don't think it's from Iran. It's from
00:00:12
what comes after Iran. This is the chain
00:00:14
reaction here. I think oil is not going
00:00:17
to be at 150 bucks, but it's going to be
00:00:19
elevated through the rest of the year.
00:00:20
And inflation in some markets reignites.
00:00:23
I think corporate earnings are really
00:00:25
impaired as consumers stop spending
00:00:27
because some of them will be paying five
00:00:28
bucks a gallon for gas and their 401k
00:00:31
will start to decline and Q2 earning
00:00:34
season becomes bad and then what CEOs do
00:00:36
when things are sort of bad is they
00:00:38
throw in the kitchen sink and they'll
00:00:40
make it look like a blood bath just to
00:00:41
get all the bad out. But the real
00:00:43
contagion uh here is going to be from
00:00:46
emerging markets. I think there's a
00:00:48
decent chance that Pakistan and Egypt
00:00:50
default and as well as Sri Lanka and
00:00:53
Bangladesh. Dollar denominated debt,
00:00:56
very energy dependent, very fragile
00:00:58
economies. There's this domino effect in
00:01:00
those markets because they can't afford
00:01:01
oil imports and their dollar denominated
00:01:04
debt just becomes unpayable.
00:01:06
And then the real downward spiral
00:01:08
starts. European banks holding that
00:01:10
emerging market debt start announcing
00:01:12
write downs. foreign banks, Deutsche
00:01:15
Bank, BMP, Pariba, all hugely exposed.
00:01:18
Credit spreads blow out and we get sort
00:01:20
of an '08 style which bank is next
00:01:23
moment. Except this time it's happening
00:01:26
while the US is fighting a war we
00:01:28
started for no reason.
00:01:30
>> It's an excursion, Scott. It's an
00:01:31
excursion.
00:01:32
>> By August, the narrative shifts shifts
00:01:34
from transitory war shock to holy
00:01:37
we may have broken the global financial
00:01:39
system. The S&P is off 20 to 40% from
00:01:43
its peak. Bitcoin goes to like 30,000.
00:01:46
And quite frankly, the only thing that
00:01:47
probably goes up is canned goods and
00:01:48
ammunition.
00:01:49
>> Well, that's a scenario.
00:01:51
>> The prediction is the following. The
00:01:52
contagion is going to start in emerging
00:01:53
markets that can't afford oil and their
00:01:56
debt is dollar denominated. It's just a
00:01:59
toxic cocktail.
