¡Vigile su FONDO de PENSIONES! ¿2026 Año del Pánico? | José Luis Cava

The speaker begins by posing four questions: Is it time to buy junk government debt given the sharp increase in long-term yields globally? What is the "mother of all bubbles," and why are many people exposed to it? Is 2026 a year of panic or preparation for 2027? And when will order be restored in the face of continuously rising stock markets, public debt, and out-of-control public spending? The speaker first addresses the question of whether 2026 is a year of panic or opportunity. Before diving in, he mentions that the OPLA team has opened limited subscriptions for their services to ensure quality. He highlights a significant divergence between the MOVE index, which reflects uncertainty and has risen, and the VIX volatility index, which remains at minimum levels. This lack of economic logic suggests that "strong hands" are artificially suppressing the VIX by selling volatility. The crucial point is when these contracts expire, allowing the market to move freely based on new buying and selling decisions. A very important options expiration is happening this Friday, the largest in history excluding end-of-quarter expirations, which could lead to an increase in implied volatility. However, VIX options and futures contracts do not expire this week, suggesting the S&P 500 might continue to rise in the very short term, leading up to next Friday's options expiration. Another mini-time period of uncertainty is the upcoming US presidential election. Depending on the outcome and political parties' reactions, especially if results are challenged, risks and uncertainty could skyrocket. In such a scenario, the Federal Reserve might lose interest in supporting markets, increasing the risk of a market drop after November 3rd, though not necessarily on the 4th, as these things take time. Regarding why 2026 might not be a year of panic, the speaker points out that since World War II, in 19 out of 20 midterm election years, the market has ended on the upside after experiencing a correction. He illustrates this with historical S&P 500 (SPY ETF) data from past midterm election years. In 2006, there was a mild 8% drop that concluded in July, followed by a rise for the rest of the year. In 2010 (Obama's first term), the market fell 17% but then rose decisively. In 2014 (Obama's second term), a 9.8% drop was followed by a rise. In 2018 (Trump's first term), there was a 19.5% drop, after which the S&P 500 rose strongly. For Biden's term, a 20% drop occurred since July, after which markets rose strongly. This year, except for a drop in March, there haven't been significant drops after July, despite artificially compressed volatility. The speaker expects a 20% drop, but with the Federal Reserve having 3 trillion in bank reserves for potential quantitative easing, he anticipates a similar pattern to previous midterm elections: the market will subsequently go up, leading towards 2027. Next, the speaker addresses whether it's time to buy American bonds. He believes it is not, nor is it time to buy other long-term "junk bonds," because yields are in an upward trend. One should only buy when yields peak and begin a downward trend, which typically happens with the onset of a recession. If the economy remains strong and spending on AI continues, bond yields are likely to keep rising, meaning no significant ceiling has been formed yet. The "mother of all bubbles," in his opinion, is not AI, crypto, or gold, but bonds. He argues that politicians continue to spend and issue public debt, making everyone exposed to this bond bubble through pension funds, insurers, and money market funds, all of which invest in government debt. To understand how long this "madness" in public debt markets can continue, the speaker discusses two points. First, he critiques the predictive value of macroeconomic models, even those developed by Nobel laureates. He notes that while recent Nobel Prizes have focused on macro models based on micro decisions, his experience with models, including Spain's, shows they have very little predictive value and often relax initial conditions when applied. He asserts that models from the Fed, Bank of Spain, and ECB do not work. Instead, good speculators detect recessions by observing stock market falls, as this directly contracts liquidity and transmits to the economy. Second, he critically analyzes the economic proposals of French politician Mélenchon, describing them as lacking sound reasoning and only convincing to his most fanatical followers. Mélenchon proposes spending 250 billion euros annually to "save France": 125 billion on subsidies, 75 billion on creating a million civil servant jobs with increased salaries, and several billion on the green economy. The speaker argues that distributing 125 billion in subsidies effectively would require a massive and competent team, which governments typically lack, and would necessitate a huge tax inspection service to prevent misuse. He also suggests that if the government provides such subsidies, it should take a stake in the businesses for the citizens. Regarding the 75 billion for civil servant jobs and salary increases, he states that the public sector does not create wealth but extracts it. Printing money for these jobs without increasing production would lead to inflation, harming the very people Mélenchon claims to help, especially the poor. Finally, allocating billions to the green economy without clear criteria is also problematic. Mélenchon claims these expenditures won't increase the public deficit, proposing to raise 205 billion euros through increased tax revenue by fighting tax fraud and raising taxes on wealth. The speaker dismisses the tax fraud claim, stating that predecessors have already pursued this and that building the necessary inspection capacity takes years. He also argues that raising taxes in a country already heavily taxed would drive people away and restrict economic growth. The key, he asserts, is not to increase tax revenue but for Mélenchon to spend less, or to spend well by increasing production, not just consumption. Mélenchon's claim that public spending will increase economic activity and tax bases, collecting an additional 60 billion, is also dismissed as made-up. The speaker's team, OPLA, modeling Mélenchon's proposals within a framework for the French economy, found that his plans would ultimately lead to a deficit increase of 40 billion euros per year. The speaker concludes that this situation can last a little longer, but "we are in the final stretches." He believes 2028 is the key year, as preparations for 2030 will be underway. After the US presidential elections in 2028, the new president will likely need to implement cuts and reforms. He highlights statements by Bessent (likely