The Meb Faber Show - Better Investing Whitney Baker on the End of ‘Buy the Dip’ & the American Bubble | #586
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Jun 13, 2025 Whitney Baker, founder of Totem Macro and a former leader at Bridgewater Associates and Soros Fund Management, joins the discussion on the shifting macroeconomic landscape. She highlights the end of the 'buy the dip' strategy and the unique challenges facing the U.S. economy as bubbles burst. Whitney also explores opportunities in emerging markets, the impact of tariffs and AI on growth, and the 'Triple Yasu' phenomenon. Notably, she advocates for including gold in investment portfolios as protection against currency devaluation and economic uncertainty.
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End of 'Buy the Dip' Bubble
- The 'buy the dip' mentality ended because central banks stopped money printing globally last year.
- US equity gains post-money printing pause relied on leverage, foreign inflows, and are now unsustainable, marking an end to the bubble.
Navigating US Debt and Capital Limits
- The US runs large twin deficits needing continual foreign capital, but available capital is insufficient as foreigners unwind US exposures.
- The US must engineer a recession to shift flows from equities to bonds, lowering yields and easing fiscal pressure.
Leverage Limit Caps Markets
- The US and global markets have hit maximum leverage and cash allocation limits, halting leveraged equity inflows.
- Without fiscal or monetary easing capacity, the US equity bubble can no longer be supported, ending 'buy the dip' behavior.
