The David Lin Report Sep 18, 2026 34m 20m saved
With Todd Horwitz, founder of BubbaTrading.com
Oil a year forward was trading about $25 below the front month on the morning Todd Horwitz came on the show, and he had just added to his short.
Most of the market reads $96 crude and a 5% 10-year yield as an inflation problem the Federal Reserve has to answer with more rate rises. Horwitz reads the crude price as fear, the yield as demand for money, and the resolution as a selloff he would welcome.
"I think we're going to see 6%."
Horwitz runs BubbaTrading.com, and the host credited him with calling the 10-year Treasury yield above 5% when he was last on the show two weeks ago. He has been trading long enough that his first mortgage carried a 14% rate while crude oil was $21 a barrel.
The full interview is covered here so you can skip it. 34 minutes of audio, 14 minutes of reading.
Here are the 13 calls that matter.
Key Takeaways
Oil one year out is about $25 cheaper than the front month, which is his whole case for staying short
He expects crude to fall from 96 into the 70s and 60s, possibly this year, if the Iran war is settled
The 10-year at 6% is his call, against prediction-market odds that put 5.1% or above at 32%
Car loan defaults at 8% and mortgage defaults at 7% are why he thinks yields keep rising even after crude falls
He wants a market meltdown, and says the Fed and the Treasury have left themselves no other exit
He is 100% long and 100% hedged at the same time, with daily risk capped at 3% to 5%
The selling in equities starts within four to five weeks, though he does not expect a 40% to 60% year
$7T of triple-witching expiry changes nothing, because the bonds and currencies no longer expire that day
Bitcoin holding 75,000 is the level that gets it to 100,000 by his next appearance
Gold has found a base after a 30% selloff from 5,500, and he would rather buy it than sell it
1. Short Oil, and Shorting More
The host opened on the one position that has gone against him. Horwitz has added to it.
He is short more oil than he was
I'm still short oil. I'm short more oil.
Todd Horwitz
He has an exit level and said so, on the grounds that no trade is worth being broken by. The trade is months old and he dated the original call to seven or eight months ago.
The call he made then and still makes
I said that oil might have been the selling opportunity of a lifetime and I still think that is the case.
Todd Horwitz
Oil is going much lower from here, in his view. The host pushed back that crude has retraced to the level where the call was first made, which makes the short a better entry now than it was in August rather than a vindication of the earlier one.
2. What Brings Oil Down
His answer was demand, supply and the shape of the futures curve, and he read the curve out month by month.
The curve says the spot price is fear
And again, if you go to next September, one year from today, oil is trading at 74.
Todd Horwitz
October futures traded at 102 the day before, he said, and the November contract was at 96. Refiners are not putting the crude through, which he thinks the oil companies are content with because it keeps product prices high, and he pointed back to his earlier call that they would post record profits.
Where he thinks the next leg goes
But basically, we've gone from 120 down to 96. And I think the next move will be from 96 down into the 70s and 60s before it's all over.
Todd Horwitz
He tied the timing to the Iran war and then made a political argument for it: pump prices going into the midterms are a problem for the administration, with diesel in California "over $10" and gas in Nevada, where he lives, at $5.
The pump prices behind his settlement call
Regular gas is over $8. In Nevada, where I live, gas is $5.
Todd Horwitz
So he expects the war settled
So, it would be my guess that we're going to see some type of settlement or some type of deal in this war that's going to bring these oil prices down
Todd Horwitz
Fossil fuels are about 80% of the economy by his reckoning, from driving to shipping to the manufacture of plastics, which is why he treats the crude price as the thing that made the Fed raise rates.
3. Diesel and Food Prices
The host put to him that diesel is at an all-time high and that the crack spread, the margin between crude oil and diesel, is also at a record in the US, with 86% of American commercial trucks running on diesel.
A record spread is a mathematical setup
Normally you would figure that's about four or five standard deviations from the mean.
Todd Horwitz
From that he reads a high probability of a sharp selloff across the board to bring the spread back in line, and he expects the trigger to be a headline saying oil is too high rather than anything in the data. He also expects at least one more rate rise before the end of the year.
Why he thinks the official numbers miss it
You know, the price of oil is a big number and unfortunately our government numbers don't normally count the price of food and energy.
Todd Horwitz
Energy is most people's biggest cost, he said, from the car to the heating bill, and a huge expense in farming.
4. The 10-Year Sets the Price
The host quoted Treasury Secretary Scott Bessent, at a House committee, calling the 10-year the most important asset on Earth, and asked whether that was right.
The 10-year, not the Fed, prices the loans
And right now there's a huge demand to borrow money, which is pushing rates higher.
Todd Horwitz
Horwitz agreed with the framing: the 10-year is what mortgage and car-loan rates are set off, in the way Libor used to be before it was found to be manipulated. He said he is a fan of Kevin Warsh so far and not of the institution.
On the Fed itself
I'm not a fan of the Fed. I think it's nothing more than a cartel.
Todd Horwitz
Shown a chart overlaying the 10-year yield on the West Texas Intermediate crude price, he called the current correlation a function of inflation rather than a lasting relationship, and offered his own counter-example: his first mortgage was at 14% with crude at $21.
Households are already behind
You're now at 8% of car loan defaults and you're now at 7% of mortgage defaults and those are only getting worse.
Todd Horwitz
He put credit-card borrowers 90 days late at over 19% of the population, said the housing market looks to be in real trouble, and argued those pressures keep yields rising even after crude falls.
5. The 6% Call
The host displayed prediction-market odds: 73% that the 10-year ends the year above 4.75%, 58% for 5% or above, 32% for 5.1% or above. Horwitz picked a number the market does not list.
His year-end number is 6%
I think we're going to see 6%.
Todd Horwitz
He put the odds at 50-50 against a price he guessed at two cents, said he would buy that contract, and said he will be buying bond futures for a 6% yield by year-end. Bond and note futures are collapsing, in his description, with room below.
He does not think 6% is a stretch
So when it all comes said and done, 6% to me would not be that far of a stretch.
Todd Horwitz
6. A Meltdown Is the Exit
Asked what a 5.25% or 5.5% yield does to the Treasury's thinking, given it began intervening in August with the 10-year not yet at 4.7%, Horwitz said the authorities have no good answer left.
There is one way out and it is a crash
I think the only salvation, the only way to get everything back into line is to have a pretty much of a market meltdown
Todd Horwitz
His reasons are the number of companies that are not making money, the amount of debt outstanding, and the money off balance sheet that does not show up as debt, government borrowing aside. The yield curve has gone from inverted to a long end he says is exploding higher. He expects the Fed to intervene once the break comes, and rates to settle only after it.
A 5% yield is not expensive by his history
When I started trading, the 30 years were trading at 66, which was about 14%.
Todd Horwitz
The 30-year contract is near 110 now, he said. He argued the economy can function at those rates once the debt is cleared, and disputed the jobs numbers: on employment to population rather than the U3 rate, he put true unemployment around 14% or 15%.
7. Let the Companies Fail
The host raised Steve Eisman's claim from an earlier interview that Anthropic and OpenAI are propping up the economy, then asked what the administration and the Fed chair could do if they decided the market cannot be allowed to fall.
A selloff is the system working
That is the true definition of a capitalistic system.
Todd Horwitz
Horwitz noted the president was not happy when rates went up on Wednesday and read that as evidence the chair is prepared to let the market clear. His complaint is regulation: it protects incumbents and takes away the garage startup, and he named Steve Jobs, Jeff Bezos, Mark Zuckerberg and Michael Dell as the founders that setup produced.
Someone always replaces the failure
That is the beauty of a capitalism system is that there's always somebody waiting to come in and fill the void left by another company.
Todd Horwitz
And his view of the prevailing model
Which is why if you go back to 1913, your $100 bill that you owned in 1913 is now worth 2.6.
Todd Horwitz
He called the Keynesian framework the economy runs on garbage, and manipulating markets to suit Wall Street the wrong way to run capitalism, because asset prices should be set by price discovery.
8. Against Intervention
The host relayed a congressman's charge at the same hearing that the administration has been intervening non-stop in the Treasury market, then asked whether an investor should not want that intervention.
He wants the rates to go up
I think the rates have to go up that high.
Todd Horwitz
Every intervention he can name failed, including the releases from the Strategic Petroleum Reserve that brought oil down briefly and then did not.
What he wants instead
I do not want the government telling me what interest rates should be. What I want is the government to quit spending so much money and actually live on a normal budget.
Todd Horwitz
The comparison he draws
You know, if you and I lived on the budget like the government does, we'd be in bankruptcy, court, or jail.
Todd Horwitz
Intervention, in his account, does nothing for 90% of the population and a great deal for the wealthy. The person with no emergency savings does not care whether rates are 3% or 20%. An older saver with money does, because higher rates bring back certificates of deposit, leave banks with more cash to lend, and end 15 years in which savers were pushed into equities as the only option.
9. 100% Long, 100% Hedged
Asked whether he is still long equities after the rate rise, Horwitz separated his investing from his trading.
He never sells the stock
I'm always 100% long the market. I don't sell stock.
Todd Horwitz
A model he built hedges the portfolio automatically and buys more stock every time the market falls a set percentage, which is how he wants to be positioned into a panic. The only thing that gets him out of a holding is a change in the company's fundamentals. He put the market's long-run gain at 8.5% a year.
The risk he carries into any day
My maximum risk at any given day is 3 to 5%.
Todd Horwitz
The trader's side of the same book
I don't think we're going down 40 to 60% this year, but I think the selling starts and I think it starts relatively soon within the next four to five weeks.
Todd Horwitz
He expects support levels that have held for years to give way and real damage to follow.
10. A Repeat of 2022
The host walked through the last tightening cycle: the funds rate from 0% to 5% across 2022 and 2023, the S&P 500 down about 30% before it recovered, and stocks, bonds, bitcoin and gold all falling together. He asked how anyone would know this is not the same setup.
He thinks it is, and wants it
I think it is and I'm looking forward to it.
Todd Horwitz
Markets need the ebbs and flows to create opportunities, in his framing, and collapses cannot be avoided any more than the failure of an empire can. His reading of history is that empires fail from within, because too many people try to manipulate the system.
The Fed chair he holds up as the exception
And the perfect example is Alan Greenspan, the original bubble builder who was a horrible Fed guy
Todd Horwitz
Greenspan argued against leaving the gold standard in 1972, Horwitz said, then became chair and found he could print. Paul Volcker is the one he rates.
What that leaves
And every chair since until now has been a bubble creator.
Todd Horwitz
Until the bubble is allowed to burst and assets return to fair value, his view is that prices stay ridiculous and the middle class carries the cost. He called the fiat currency system the most corrupt in the world, on the grounds that no currency is backed by anything beyond the credit of the government behind it.
11. Triple Witching Is a Zero
The host raised the day's options expiry, $7 trillion of it, and read Citadel Securities' note that 60% of it takes place at the open and that the positioning which has damped realized moves could change materially. Horwitz gave it nothing.
The event stopped being an event
It meant something years ago when actually everything when the bonds, the currencies, the equities all expired at the same time on the same day.
Todd Horwitz
Bonds, currencies, equities and futures now expire at different times, leaving only the options. Against the volume of the option market outside zero-days-to-expiry contracts, he said, the notional is beside the point.
The number could be ten times larger and mean the same
And that number could be $70 trillion not $7 trillion. So to me it's an absolute zero. It means absolutely nothing.
Todd Horwitz
He expects the usual volume spike in the last hour as the large firms adjust, and credits exchange-traded funds and the futures complex, including micro and nano contracts, for removing the basket trading that used to make expiry day volatile.
12. Bitcoin Above $82K
Bitcoin was up 5.5% on the day while long-dated Treasury yields also rose, which is the opposite of the usual pattern, and the host asked whether that is the start of something.
The levels he has been trading it off
I thought 75,000 was a great spot to buy it. I had it leveled between 75 and 82. I thought 82,000 was a sell. I think we're going to break that 82,000 to the top.
Todd Horwitz
He put more believers into a currency outside the official system, and noted that crude and gold now trade around the clock as bitcoin always has.
The one level that matters to him
As long as it holds that, I think there's a good chance we're going to see a 100,000 by the next time you and I talk.
Todd Horwitz
The level is 75,000. He described the move from the 60s into the 80s as a range being built rather than a top, with the recent weakness a pullback inside it.
13. Near a Bottom in Gold
Viewers had asked the obvious question: if yields are going up and real yields and gold usually move in opposite directions, is he short gold. He is not.
He would not short it here
And I don't know that I'd want to be short gold.
Todd Horwitz
His reasoning is that the market has already priced the rate rise and the path of yields. Gold spiked to 5,500, pulled back to just under 4,000 and was trading around 4,300, a 30% fall from the top that he reads as the discounting already done.
Where he thinks the floor is
I think gold is pretty much near a bottom.
Todd Horwitz
He would not expect it below 3,600 or 3,700.
Which side he would take
I would certainly much rather be a buyer in gold here than a seller.
Todd Horwitz
Bonus Insights
Horwitz spent several minutes on why he thinks regulation and redistribution protect the people they are aimed at.
His claim about who benefits from socialism
Socialism is not going to hurt the rich.
Todd Horwitz
He pointed at China, where in his account the wealthy continue to flourish while the poor have less, and at Venezuela, which he said could have lived prosperously under socialism until Nicolás Maduro and Hugo Chávez took the money. Regulation does the same work, in his view, by keeping the middle class from catching up with the wealthy, and a general repricing of assets would let the richest buy them cheaply with no competition.
He also said he is not rooting for the damage he expects, only that playing with markets guarantees it.
Horwitz's bottom line is that crude at 96 is a fear trade heading into the 70s and 60s, that the 10-year Treasury yield goes to 6% anyway because households and the government both need to borrow, and that the resolution is a market meltdown he intends to be both fully invested and fully hedged into.
Products, Companies & Tools Mentioned
BubbaTrading.com (Horwitz's own firm, where the hedging model and the twice-weekly market calls he described are run)
The Federal Reserve (He calls it a cartel, rates Kevin Warsh so far and Paul Volcker above everyone, and blames Alan Greenspan for the bubble era)
The US Treasury (Began intervening in August with the 10-year below 4.7%; he says a 6% yield leaves it no good options)
Citadel Securities (Its note on the $7T triple-witching expiry is the research he dismissed)
Anthropic and OpenAI (Raised by the host as the two unprofitable companies holding up the economy; he says replacements are already waiting)
The Strategic Petroleum Reserve (His example of intervention that moved oil down briefly and then did not hold)
Bitcoin (Up 5.5% on the day; he buys at 75,000 and sees 100,000 if that level holds)
Gold (Down about 30% from 5,500 to around 4,300; he is a buyer, with a floor at 3,600 to 3,700)
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