LEGENDARY INVESTOR DUMPS ALL OF HIS STOCKS, LOADS UP ON TREASURIES (NOT CLICK BAIT)

The title would make any skeptic believe this story would turn out to be #1 horseshit — but it’s true!

My reliable source is Bloomberg via Zerohedge.

Legendary investor and now shit-bear, Stanley Drunkenmiller domp’d his stocks and went into treasuries. POMP EET.

But it’s no longer just Albert who sees a deflationary tsunami flooding over the US. The grouchy permabear was joined by billionaire Stan Druckenmiller, who said he could see the Fed funds rate going to zero in the next 18 months if the economy softens, and that he recently piled into Treasuries as the U.S. trade war with China escalated.

“When the Trump tweet went out, I went from 93% invested to net flat, and bought a bunch of Treasuries,” Druckenmiller said Monday evening quoted by Bloomberg, referring to the May 5 tweet from Trump which threatened an increase in tariffs on China and which sparked the most vicious bout of trade-war related selling yet. Explaining his decision, Druck said that it’s “not because I’m trying to make money, I just don’t want to play in this environment.”

Incidentally, for those confused what going from 93% invested to flat means, the answer is he liquidated his entire equity book.

In an interview by Key Square Capital Management founder Scott Bessent at The Economic Club of New York, Druckenmiller went against conventional, and Beijing, wisdom which believes that Trump will capitulate ahead of the 2020 elections, and said that at the moment he doesn’t see Trump giving China room for negotiation because the president sees tariffs as a winning strategy for the 2020 election. That, of course, could change if the economy and markets get weaker, he said.

“If you can analyze Donald Trump more power to you. I’ve been more wrong footed by this guy, and shame on me”, Druckenmiller summarized his feelings toward Trump.

At the same time, as we noted earlier when we pointed out that several of Druckernmiller’s key warning indicators are flashing an “amber alert”, while the former chief strategist for George Soros wouldn’t say whether the U.S. is headed for a recession, he said he sees “many warning signs” adding that he was concerned that Trump may have broken a fragile economy going into the next election and assumes he won’t be re-elected in 2020.

Looking at other asset classes, Druckenmiller said that while Treasuries have become less interesting amid the furious rally in recent days, they remain “the best game in town” if the economy deteriorates, and certainly if rates tumble another 2% to zero or below. “Gold’s not bad either,” he added.

As we reminded readers earlier today, last December Druckenmiller warned that trading conditions could worsen, and that while the indicators he historically used were not red yet…

This isn’t important because Drunkenmiller is a guru anymore — because he’s not. He’s probably a drunk senile bastard. But sentiment is important and CNBC and other networks eat stories like this up and then broadcast it around the world for clickbait in an effort to scare the shit out of Joe Public and get him to sell his stocks.

This is how panics start, with small ripples that turn into tsunamis. Can we talk about leveraged loans yet?