Markets Are Misreading A Late Cycle Liquidity Crunch | Michael Howell
Speakers
Michael Howell
— Founder, CrossBorder Capital
Summary
Michael Howell argues that the global liquidity cycle is inflecting lower, moving from speculation toward turbulence as the real economy absorbs funds. He advises reducing risk, favors commodities and energy stocks, and warns that crypto will face headwinds. Yield curve flattening and rising demand for safe assets confirm the late-cycle shift.
- Global liquidity cycle is inflecting lower, moving toward turbulence phase.
- Real economy is accelerating, sucking liquidity from financial markets.
- Yield curves are poised to flatten as liquidity declines.
- Commodities perform well at the peak of the liquidity cycle.
- Energy and cyclical value stocks are outperforming.
- Crypto is highly liquidity-sensitive and faces tougher conditions.
- Treasury bill issuance is a form of liquidity support.
- Investors should reduce risk and increase cash positions.
Trade Ideas
Liquidity decline pressures crypto assets.
Global liquidity is declining and crypto is the most liquidity-sensitive asset. As liquidity falls, crypto prices will face headwinds. The chart shows a 13-week lead of global liquidity over a basket of Bitcoin, Ethereum, and Solana, indicating tougher times ahead.
Commodities thrive at liquidity cycle peak.
Commodities do well at the peak of the liquidity cycle. We are at or just past that peak, so commodities have been on fire and will continue to benefit from the accelerating real economy.
Energy stocks outperform in speculation phase.
In the speculation phase of the liquidity cycle, cyclical value stocks, resources, and energy outperform. This is driven by the real economy gaining traction and commodity markets moving higher.
Up Next
This Forward Guidance video, published April 22, 2026, features Michael Howell discussing ETH, SOL, BTC, DBC, XLE. 3 trade ideas extracted by AI with direction and confidence scoring.