Episode summary
Liquidation Event: How Bad Will It Get? | Mike McGlone
The David Lin Report
· · 34 min · Hosts: David Lin · Guests: Mike McGlone
Summary
Mike McGlone argued that the recent selloff is the start of a broader liquidation cascade, not a finished correction. He tied the move to a late-cycle unwind in risk assets, saying Bitcoin, gold, silver, copper, and high-multiple tech stocks have already been flashing warnings while the NASDAQ and S&P 500 begin to roll over. In his view, the market is moving from a long period of excess liquidity and wealth creation into a phase of mean reversion and forced de-risking.
He said the key macro force is still the Federal Reserve, but not in the simple sense of one more rate hike. McGlone expects the bond market and stock market to do much of the tightening for the Fed, and he argued that if the equity decline continues, the Fed could eventually shift from hikes to cuts. He also linked the pressure to higher mortgage rates, weaker housing affordability, and a broader deflationary setup tied to falling commodity prices.
On positioning, McGlone said the recent highs in gold and silver versus Treasury bonds make them less attractive as safety trades than U.S. Treasuries themselves. He expects crude oil to fall toward $50 next year, sees copper as a warning signal for equities, and thinks the first casualties of the cascade are already visible in crypto and large-cap tech.
Key takeaways
- Mike McGlone says the current market action is the beginning of a liquidation cascade, not a finished correction.
- He expects the Fed to stay tight for now, but says continued equity weakness could eventually force rate cuts.
- McGlone argues Bitcoin has been the best leading indicator and is already pointing to broader risk-off behavior.
- He says gold and silver are no longer the best safety trades because they are at four-decade highs versus Treasuries.
- He expects crude oil to move lower, with $50 a barrel by this time next year as his base case.
Notable quotes
“This is a cascade is kicking in. Still think it has a lot of room to go lower”
“It's not even started. This is stuff so far”
“No, it's not. This the play for safety are good old US treasuries”
“My view is by this time next year, we're going to be talking about $50”
How the episode opens
It's not even started. This is stuff so far. This is a cascade is kicking in. Still think it has a lot of room to go lower. It's not this the play for safety are good old US treasuries. Gold right now is the highest price versus a basket of US treasuries in about four decades. To me, this is a cascade getting started.
Tech stocks are rebounding today with the NASDAQ up 1.8%. We're speaking on Friday, November 6th, after a brutal selloff the day before. Uh this comes after another uh big update right after the midterm elections. We're going to examine this completely wild volatility and what's next for markets and commodities alike with Mike Mclo, senior commodity strategist at Bloomberg Intelligence. Welcome to the show, Mike. Good to see you,
David. Thank you for having me back. And let's solve some world's problems. — Absolutely. One podcast at a time. Mike, I saw you on another show, um Mike uh um Mel Scott Melker Show. — Uh people should check out Scott. Great great great guy, great show. And I correct me if I've misqued you, but I believe you said this is the biggest market reset ever.
It could be. I I I mean that, you know, I'm only been in the business about four decades. I'm only 62.
The stuff I like to look back and study. For instance, um the things that are happening this year are just phenomenal. I mean, from a market strategy standpoint, first of all, what just happened with Mr.
Trump? It's just like, oh my gosh, thank you very much, Mr. Trump, for giving us something to write about and trade on and work on.
So just one here, start one example. What what silver did this year was historic.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market selloff
- bitcoin risk
- fed rate hikes
- commodity weakness
- tech stock crash
Companies and tickers mentioned
- Bloomberg Intelligence
Watch the episode
Watch “Liquidation Event: How Bad Will It Get? | Mike McGlone” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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