Rate Hikes Return & Michael Burry’s “Lights Out” Signal

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Summary

History doesn't repeat itself, but it rhymes (with 2008).

Today, the Fed, ECB, BoC, and BoE are preparing to RAISE interest rates for the same erroneous reasons they did between Bear Stearns and Lehman Brothers. In this critical update, I break down why these central banks are getting blinded by a transitory oil shock, ignoring a real economy that is slowing down sharply and a private credit crisis (the "subprime of 2026") that is worsening every week.

In this market analysis, you will discover:

• The Macro Trap: Why short-term inflation is masking systemic failure.

• Private Credit Update: Funds blocking redemptions and BlackRock’s search for "exit liquidity."

• S&P 500 Signals: A technical setup identical to March 2020 and Michael Burry’s “Lights Out” warning.

• Strategy: Why one last bounce is possible, but often constitutes the final trap before the drop.

https://www.youtube.com/watch?v=NbCP-0SKlZM

TIMESTAMPS

0:00 - The 2008 disaster is repeating

(Intro: The macro trap, private credit updates, and S&P 500 exhaustion)

0:41 - Central banks: blinded by the oil shock

(Why the Fed, BoC, BoE, and ECB are misreading short-term inflation)

1:24 - Visualizing the energy crisis and market liquidations

(Charts on the DXY, gold, silver, and rising bond yields)

2:18 - The 2008 parallel: oil prices and the 2-year yield

(How today’s vertical move compares to the period just before Lehman Brothers)

3:24 - Private credit update: BlackRock and the exit liquidity trap

(Why retirees are being targeted to buy "unbuyable" opaque assets)

4:17 - Gating and liquidity: when you can't get your money back

(Real-world examples of funds limiting redemptions to 11%)

4:43 - Apollo Asset Management: "All the marks are wrong"

(The arrogance of private markets and the looming solvency crisis)

5:40 - The "Dealmaker" problem: fee leeches and opaque models

(Why private equity incentives are disconnected from actual performance)

7:45 - The real default rate: 2% vs the actual 6.4%

(Revealing the hidden numbers behind distressed exchanges)

8:05 - Chart of the week: credit spreads at a critical high

(A rare technical signal that preceded 2008, 2015, and 2022)

10:00 - Michael Burry’s outlook: -32% to -77% downside

(Analyzing Burry's "Lights Out" signal and the 1921 historical context)

11:28 - S&P 500: the 200-day moving average break

(Why 3 consecutive closes below this line trigger algorithmic selling)

13:51 - The final bounce: don't get trapped by the FOMO

(Why a short-term rally is likely the ultimate bull trap)

15:43 - DXY and the gold/dollar correlation anomaly

(What’s happening behind the scenes with global currencies)

16:34 - Why "Buy the Dip" is premature

(RSI indicators and cash allocation levels compared to previous crashes)

18:22 - Gold, silver, and Bitcoin: when the tourists leave

(Technical levels for hard money and why I’m looking to re-enter gold)

22:30 - The fake diversification of the S&P 500

(How the index is now heavily concentrated in just a few tech stocks)

24:00 - Conclusion: the death of 60/40 and the 3-pillar strategy

(Why you need stocks, cash equivalents, and commodities for stagflation)

Nico de Bony

If you found this briefing helpful, feel free to share it. For those ready to build a defensive process, the links to my training are below.

• Watch my Free Masterclass to understand the 5 core hedging strategies.

• Watch the Practical Demo to see me execute these trades live.

• If you want to master this, check out my Self-Paced Course

• or apply for one of the few remaining spots in my 1-on-1 Coaching.