In 1989, the entire financial world agreed: Japanese inflation was inevitable.
They were spectacularly wrong for 35 years.
Now the US is making the EXACT same mistake, and I can prove it with 3 charts. 🧵 Japan 1989:
✅ Massive money printing
✅ Sky-high asset prices
✅ "Inflation is coming" consensus
US 2025:
✅ Massive money printing
✅ Sky-high asset prices
✅ "Inflation is coming" consensus
Spot the difference? There isn't one.

I'm going to make a falsifiable prediction that will either make me look brilliant or destroy my credibility:
The traditional 60/40 portfolio will experience a 25%+ drawdown before the end of 2027.
Here's my exact reasoning: 🧵 First, what counts as "traditional 60/40"?
60% U.S. stocks (S&P 500 or similar)
40% U.S. investment-grade bonds (10yr+ duration)
Rebalanced quarterly
This is the benchmark for $18 trillion in assets.

First, what counts as "traditional 60/40"?
60% U.S. stocks (S&P 500 or similar)
40% U.S. investment-grade bonds (10yr+ duration)
Rebalanced quarterly
This is the benchmark for $18 trillion in assets. The setup is already in place:
Current environment:
S&P at ~6,000 (elevated valuations)
10-year yields at 4.5%
Stock-bond correlation at +0.33
Inflation running 3%+ (above target)
Fiscal deficits $1T+ annually
We're one catalyst away from crisis.

The U.S. government needs to sell $2 trillion in bonds this year.
But here's the problem: the three biggest buyers (Fed, China, Japan) are all SELLING.
This creates a doom loop that will destroy portfolio diversification.
Let me explain: 🧵 Quick history: Who traditionally buys U.S. Treasuries?
Federal Reserve (money printing)
Foreign central banks (China, Japan)
Domestic buyers (banks, pensions, you)
This trio absorbed all government debt for decades.
Then 2022 happened.

In 2022, I watched $18 trillion in "safe, diversified" portfolios lose 16% in a single year.
The math that promised this couldn't happen?
It was taught in every finance class for 70 years.
And it just stopped working.
Here's what broke: 🧵 Modern Portfolio Theory (1952) proved mathematically that 60% stocks + 40% bonds = optimal diversification.
When stocks fall, bonds rise. Perfect balance.
It worked flawlessly through 2008, 2000, 1987.
Until it didn't.

I'm making 3 falsifiable predictions about private equity's collapse.
These can be proven right or wrong.
If I'm wrong in 2027, roast me mercilessly.
If I'm right, remember who told you.
Let's go 🧵 PREDICTION #1:
By December 2027, at least 3 PE firms currently in the top 20 by AUM will have STOPPED raising new flagship buyout funds.
Confidence: 75%
They'll pivot to credit or evergreen funds rather than admit their flagship product is obsolete.

If you're a pension fund, endowment, or family office with 25%+ in private equity:
You're about to learn an expensive lesson.
But there's still time to fix this.
Here's your playbook for the PE reckoning 🧵 Step 2: Cut bottom-quartile and median managers.
This is a hits-driven business where top-quartile funds capture almost all outperformance.
If you can't consistently access tier-1 managers, you're better off in liquid markets.
The "diversification" argument is debunked.

From 2009-2021, private equity operated in a fantasy land:
Borrow at 3% → Buy at 12x EBITDA → Do nothing → Sell at 16x EBITDA
The IRRs looked incredible.
It wasn't genius. It was interest rates falling.
And that party is OVER 🧵 Multiple expansion was just falling interest rates in disguise.
When discount rates drop, asset values rise automatically.
PE firms were like homeowners in 2005 thinking they were investment geniuses because their house doubled in value.

Private equity firms claim they create value through "operational excellence."
Better management. Strategic repositioning. Margin enhancement.
Academic research says: 80% of PE returns come from leverage and multiple arbitrage.
Only 20% from actual operations.
Thread🧵 When you strip away the marketing, PE's value creation formula is simple:
40% = financial engineering (leverage)
30% = multiple expansion (buying at 10x, selling at 14x)
10% = riding sector/market beta
20% = genuine operational improvements

Private equity firms are sitting on $2.8 TRILLION in uninvested capital.
That's double the 2015 level.
Everyone thinks this is a sign of strength.
It's actually a ticking time bomb.
Here's why 🧵 Dry powder = committed capital that hasn't been deployed yet.
PE firms are in a trap:
Can't invest at good prices (everything still priced for zero rates)
Can't return capital to LPs (would admit they can't find deals)
So they sit... and charge 2% management fees.

You commit $100M to a private equity fund.
It doubles your money in 10 years.
Sounds great, right?
After fees, you earned less than SPY.
Let me show you the math that LP consultants apparently can't do 🧵 Typical PE fees:
2% annual management fee
20% carried interest (on profits above 8% hurdle)
On a $100M commitment over 10 years, you'll pay $15-20M in management fees BEFORE any performance fees.
Already down to $85M working for you.

In 2022, private equity firms reported their portfolios were down just 4%.
The S&P 500 was down 24%.
Either PE firms discovered recession-proof companies, or they're lying about valuations.
Spoiler: They're lying.
Here's the scam🧵 When public markets crashed in 2022, pension funds faced a crisis called the "denominator effect."
Their PE holdings (marked at fantasy prices) suddenly represented 35%+ of portfolios instead of 25%.
They were forced to halt NEW investments to rebalance.

We're 24 days into 2026.
Let me show you what's happened—and why this month will define the entire year... 🧵 2/ Jan 2-3: Markets open year with uncertainty
Santa Claus rally FAILED to materialize
"January Barometer" (84% accurate) started shaky
Lesson: 2026 won't be like 2025's "everything up" year

Next Tuesday-Wednesday: Fed meeting.
Expected rate decision: NO CHANGE (3.50-3.75% holds).
Markets pricing: 0% chance of cut.
So why does it matter?
Because Powell's COMMENTARY could move markets more than Intel earnings did. Here's why... 🧵 What Powell will address:
1. The DOJ Criminal Investigation
Will he mention it? Defend himself? Stay silent?
His response (or non-response) matters for Fed credibility.
Silence = letting accusations stand
Defense = appearing political
Either way = awkward

Let me show you the most important chart of 2026:
Gold: +9% this week, +77% past year, at ALL-TIME HIGHS
S&P 500: Flat this week, +16% past year, near highs but struggling
This divergence is SCREAMING something. Here's what... 🧵 Normally, gold and stocks move INVERSELY:
Stocks UP → Risk on → Gold down
Stocks DOWN → Risk off → Gold up
But right now:
Stocks: Flat to slightly up
Gold: MOONING
This is rare. And important.

Intel crashed 13% despite beating earnings.
This isn't just about Intel.
It's a WARNING SHOT for every tech stock that's run 50-200% and is "priced for perfection."
Here's who's next... 🧵 The Intel playbook:
✅ Stock runs 145% on "turnaround story"
✅ Analysts upgrade (14 upgrades in Q4)
✅ Retail FOMO's in at highs
✅ Company beats earnings
❌ Guidance disappoints
💥 Stock craters
This is going to repeat.

What a week.
Tuesday: Dow -870 points (panic)
Wednesday: SCOTUS saves Fed (relief)
Thursday: Intel crashes despite beat (reality)
Friday: Gold hits $4,967 (new paradigm)
Here are the 7 lessons that will define the rest of 2026... 🧵 Lesson 1: Headlines Create Volatility, Not Direction
Tuesday's -870 point crash was driven by:
Greenland tariff fears
Fed independence concerns
By Friday:
Tariffs canceled
Fed likely protected
Markets HIGHER than Monday
Takeaway: Don't trade headlines.

Gold just hit $4,967—a new all-time high.
Up 9% THIS WEEK ALONE.
Best weekly performance since March 2020 (COVID crash).
And 90% of investors still don't own it. Here's what's happening... 🧵 The week's price action:
Monday (Jan 20): $4,580 (Trump inauguration)
Tuesday (Jan 21): $4,720 (SCOTUS Fed case)
Wednesday (Jan 22): $4,800 (Europe tariff threats)
Thursday (Jan 23): $4,928 (record)
Friday (Jan 24): $4,967 (NEW record)
+8.4% in ONE WEEK.

Intel just delivered the PERFECT example of why you don't hold stocks up 145% into earnings.
Beat Q4. Stock crashed 13% anyway.
Here's the $100 billion market cap lesson everyone needs to learn... 🧵 The Q4 results were GOOD:
Revenue: $13.7B (beat $13.4B estimate)
EPS: $0.15 (beat $0.09 estimate)
AI business: "Double-digit growth" sequentially and YoY
By any normal measure, this was a solid quarter.
Stock should rally, right?

Let's recap the INSANE week in markets:
Monday: MLK holiday (markets closed)
Tuesday: 870-point Dow crash on tariff/Fed fears
Wednesday: SCOTUS signals Fed saved, relief rally
Thursday: Intel surges, P&G disappoints, markets digest
Here's what it all means... 🧵 What this week taught us:
Lesson 1: Markets overshoot on fear (Tuesday's -870 point crash)
Lesson 2: Information resolves quickly (SCOTUS signals within 24 hours)
Lesson 3: Quality matters more than ever (earnings divergence)
Lesson 4: Multiple risks exist simultaneously

Procter & Gamble just reported Q2 2026 earnings (fiscal Q2).
Results: BEAT on revenue, MISS on EPS
Stock reaction: DOWN 2% pre-market
This is your real-time consumer health check. Here's what it reveals... 🧵 The numbers:
Revenue: $21.9B (beat by $100M)
EPS: $1.72 (missed $1.88 estimate)
Organic sales growth: +3% (slowest in 2 years)
Beat on top line, miss on bottom line = Margin compression
Consumers are buying, but P&G can't pass all costs through.