Yen Carry Trade, Recession odds grow, Buffett cash pile, Google ruled monopoly, Kamala picks Walz

If market volatility remains relatively low and conditions do not change materially, equity-trading algorithms will mechanically sell approximately $160 billion of global equities over the following month (from early August 2024), which will in turn induce additional selling of several hundred billion dollars more by other market participants, leading to continued net selling pressure in equity markets over that period.

“right now, if there's relatively minimal volatility and not much changes, the algorithms will have to sell another 160 odd billion dollars of equity, and that'll pull through many hundred billions more from everybody else. So I think we're in a little bit of a delicate moment where the preponderance of the market action will be to continue to sell” View on YouTube

From August 2024 onward, the USD/JPY exchange rate will continue to move in favor of the US dollar, rising above the then-current ~147–150 yen per dollar level to a meaningfully higher rate (i.e., further depreciation of the yen against the dollar) over the subsequent months/years as long as Japan maintains near-zero interest rates.

“So what I would expect is that the US dollar is going to keep buying more yen. It's going to go from, I don't know, 147 150. There is one some bigger some bigger number.” View on YouTube

The US is already effectively in recession as of mid-2024, and this will become clearly evident in official data and revisions by Q3–Q4 2024, prompting Federal Reserve Chair Jerome Powell to begin cutting interest rates during that period; the open question is only the magnitude of rate cuts (whether roughly 75–100 basis points or a slower 25-basis-point pace).

“I don't think the demand is there. I think we're in a recession. It probably becomes more obvious in Q3 and Q4. And so Powell's going to have to cut. The question is, will he overreact to the pressure and cut 75 to 100 versus 25 and take it slow?” View on YouTube

By roughly one year from this discussion (around August 2025), the United States will likely have experienced a technical recession, defined as at least two consecutive quarters of negative real GDP growth.

“I do think that we'll probably be in a technical recession.” View on YouTube

Despite expecting a technical recession by around August 2025, there is a substantial probability that major US equity indices (e.g., S&P 500 and/or NASDAQ) will be higher in level than they were at the time of this conversation in early August 2024.

“But I also think that there's a pretty decent chance the market will be up.” View on YouTube

Within the next year from this conversation (by roughly August 2025), there is a greater-than-not probability that the US economy will enter a recession (e.g., exhibit two consecutive quarters of negative real GDP or a comparably recognized recessionary condition).

“Yeah, I think there's a great chance of a recession.” View on YouTube

During that same roughly one-year period (to around August 2025), if a recession occurs, the US federal government will roll out significant countercyclical programs or interventions that help support financial markets, such that US equity markets can continue to rally or at least remain strong despite the underlying recession.

“But I do think that there's going to be government programs to mitigate the effects. Meaning you could see the markets, the equity markets continue to rally on some of the government programs and government activity” View on YouTube

By around one year from this discussion (approximately August 2025), the US will more likely than not have entered a recession (e.g., two consecutive quarters of negative real GDP growth).

“if you pin me down, I'd say I recession.” View on YouTube

Within a few years after losing the default-search TAC deal with Google as a result of this antitrust case, Apple will acquire an existing search engine company (e.g., DuckDuckGo, Brave, or similar) and operate its own first‑party search engine, using it to significantly expand Apple’s own advertising network.

“My prediction is Apple buys a search engine and they go it alone and expand their advertising network like Amazon, Uber and other companies have.” View on YouTube

The final remedy in the DOJ’s search antitrust case against Google will not be a structural breakup of Google (no Ma Bell–style split into multiple companies); instead, it will be a more limited remedy akin to a consent decree that constrains Google’s conduct in search and related markets for a period of years.

“So I think the big O outcome is probably something that you can pretty safely take off the table. I think it's going to be a little low outcome” View on YouTube

When remedies are decided in the DOJ’s antitrust case against Google Search, the outcome (e.g., consent decree or similar remedy) will receive broad bipartisan political support, with both major US parties publicly backing the court’s action rather than opposing it along partisan lines.

“I think both the Democrats and the Republicans will really support whatever happens here.” View on YouTube

Tim Walz will not remain Kamala Harris’s running mate through the Democratic National Convention; he will be forced to withdraw from the ticket before or during the convention due to mounting controversies (e.g., over his military record and policy positions).

“And I think the question now is whether Waltz is even going to make it to the convention. I think he might have to drop out.” View on YouTube

If Tim Walz stays on the Harris ticket through Election Day 2024, then between his selection and the election there will be recurring, publicly reported protests by Gold Star families at Harris–Walz campaign events, generating ongoing negative media coverage for the campaign.

“If, if, if Waltz doesn't drop from the ticket, I predict there'll be Gold Star families protesting all of their events, and that's going to be a real headache from now until the election.” View on YouTube