‘End Of The World’ Trade: ‘Big Short’ Investor Warns 'We're Playing With Fire' | Danny Moses
Summary
- The "K-shaped" economy is deteriorating; the top end (wealthy) is starting to trend downward due to a potential reversal of the wealth effect.
- US debt and deficit levels are the primary macro concern, with the potential for US 10-Year yields to breach 5%, which would trigger a systemic credit issue.
- Geopolitical risks (Middle East, Russia/Ukraine) are currently underpriced in commodities, specifically oil and gold.
- The AI trade is viewed as a secular growth story that will eventually turn cyclical; a 20% drawdown in the Nasdaq is plausible as hardware becomes commoditized.
- Japan's debt crisis and potential selling of US Treasuries represent a significant "black swan" risk to global markets.
Trade Ideas
"If we see 5% [on the 10-year yield] this year, you have a crisis on your hands... Japan who's the largest foreign holder of US treasuries... might trigger and feed on themselves." The US cannot cut spending, and debt is spiraling. Simultaneously, Japan may be forced to sell US Treasuries to defend the Yen. This supply-demand imbalance forces yields higher (and bond prices lower). SHORT long-duration US Treasuries (betting on higher yields). A massive "flight to safety" event where global capital rushes into US Treasuries, lowering yields.
"If $65 oil happens, it's the cheapest stock in the S&P 500." (Referring to Exxon Mobil). The market is pricing energy stocks as if oil is crashing to $45-$50. However, oil has stabilized around $65-$70 (WTI). Furthermore, geopolitical risks (Iran/Israel) are not priced in. Therefore, energy majors like Exxon offer a massive valuation safety margin even without a price spike. LONG energy majors and the broader sector for valuation and geopolitical hedging. A global recession crushing oil demand; rapid de-escalation of geopolitical conflicts.
"That's basically a 20% draw down from here. I think we could hit that... At some point it becomes cyclical... you don't have memory chip companies trading [at these multiples forever]." The AI trade is currently priced for perfection (secular growth). Moses argues it will follow the 1999/2000 path where infrastructure builders (like Cisco/Lucent then, Nvidia now) eventually face commoditization and cyclicality. A 20% correction is needed to normalize valuations. SHORT or HEDGE technology exposure, anticipating a rotation out of mega-cap tech. AI mania continues unabated; Fed cuts rates aggressively, fueling further multiple expansion.
"If you are a bull on AI I don't know how you don't own uranium... nuclear which is about 19% of US power source is only going to grow." AI data centers require massive baseload power. Wind and solar are intermittent. The only scalable, carbon-free baseload solution is nuclear. This creates a structural supply deficit for physical uranium (SRUUF) and benefits the miners (CCJ/URA) who will supply the fuel for new reactors. LONG uranium miners and physical trusts as a derivative play on AI energy consumption. Regulatory hurdles for new nuclear plants; another nuclear accident (e.g., Fukushima style event).
"I'm long gold. I would be long silver here... The industrial use for silver is real... We need silver as our conduit... in these data centers." Gold is the hedge against US debt/deficit spiraling and dollar debasement. Silver, however, has a dual thesis: it is a monetary hedge *and* an industrial necessity for the AI buildout (data centers) and green energy (solar). Supply is inelastic, so increased industrial demand must drive prices higher. LONG precious metals, with a specific emphasis on Silver and Silver Miners (SILJ) for the industrial "catch-up" trade. A strengthening US Dollar; deflationary crash reducing industrial demand for silver.
Up Next
This The David Lin Report video, published February 19, 2026, features Danny Moses discussing TLT, XOM, XLE, QQQ, CCJ, URA, SRUUF, GLD, SLV, SILJ. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Danny Moses · Tickers: TLT, XOM, XLE, QQQ, CCJ, URA, SRUUF, GLD, SLV, SILJ