"Does anyone remember losing 20%, 30%, 80% of their hard-earned capital in 2022? Well, that's not politically palatable. So, the government started spending their brains out."

- Keith McCullough, The Big (G) webcast, 11/21/23

Market Edges: "The Government Spent Their Brains Out" - 10.19.2023 national debt cartoon

When the cameras started rolling on Keith McCullough's deep-dive webcast on excessive government spending, the U.S. debt was already comfortably above the $33.7 trillion mark.

By the time he wrapped up (an hour later), another cool billion had been tacked onto the total. 

"By lunch, it'll be more. By lunch in San Francisco, more. By dinner time, more," Hedgeye's CEO said of a federal deficit that has grown 8,500% since 1970. "And more and more and more. I'm not trying to scare you. It's just scary."

That's the pace the Government is willing to spend to keep the GDP artificially inflated and hide bleak economic realities from Americans.

"This is unreal. People are numb to it," McCullough added. "Federal debt has gone from $372 billion in 1970 to $33 trillion in 2023. Many of you are upset because you know that for your children and theirs, this is the worst thing you can do."

This webcast on "The Big (G): Deficits & Debt" highlighted one of our three 4Q 2023 Macro Themes: the breakneck speed of government spending and the immediate and long-term impact it will have on average Americans.

Click here to watch the full webcast free on demand.

This morning, McCullough hosted another complimentary webcast explaining his long position on India and shorts in Europe. 

"U.S. retail sales just slowed from 4.5% to 2.5%. That's the beginning of worsening numbers," McCullough explained. "In Europe, it's negative -2.9%. You're below 0 and falling. I don't know why anyone would debate it: Europe's in a recession."

McCullough shared how he's gotten long India equities via ETFs like INDA and SMIN, two of the 25 positions subscribers can currently see in Portfolio Solutions. This brand new Hedgeye product provides an inside look at the ETFs McCullough is adding, removing and re-ranking within his actual Long-Only Portfolio.

"There's a significant lack of education out there on how to do this. What people perceive to be a 'call' on Wall Street is not what I do. I execute on a process. It's all about counting, measuring, mapping and changing as the game changes."

Click here to watch today's webcast free on demand.

To check out our full schedule of on-demand and live webcasts for Cyber November, click here.

Market Edges: "The Government Spent Their Brains Out" - 03eZnbzi

Keep reading below for more Market Edges.

Here's what's inside this edition:

  • Client Talking Points: The VIX is low coming off a holiday weekend, but Keith McCullough warns it won't take much for an immediate uptick in volatility. 
  • Chart of the Week: Macro analyst Christian Drake says probable November acceleration will be followed by a stiff double shot of hard comps and downside risk in January.
  • Sector Spotlight: When Deere stock fell Wednesday morning, Jay Van Sciver was the only analyst with a #timestamped short position.
  • What the Media Missed: Through a strict adherence to the process, McCullough provides insight on positions you won't hear about from consensus reports.
  • Around the World: Director of Research Daryl Jones notes a sharp slowdown in China due to weak internal demand and declining commodity prices,

Good luck out there!


Below is our 'GIP Model Risk Management Overlay' to better guide your asset allocation decisions. Watch a brief video about our GIP model.

Click to enlarge

Market Edges: "The Government Spent Their Brains Out" - quads

Market Edges: "The Government Spent Their Brains Out" - quad regime




  1. FX Consensus Short positions remain Canadian Dollars and Swiss Francs
  2. QUALITY (Balance Sheet) took over again last week with LOW DEBT +1.6%
  3. SMALL CAP right back to lagging, as it has since the end of July

Market Edges: "The Government Spent Their Brains Out" - callout1

Market Edges: "The Government Spent Their Brains Out" - callout2


Smushed by super-short-term 0DTEs during a no-volume U.S. holiday week? What could possibly go wrong with front-month < 13 with immediate-term upside toward 16.21? Our content partners at Tier 1 Alpha have the dealer Gamma Flip line at 4536, so it wouldn’t take much to move dealers back into a negative Gamma position from what’s been positive in November.


Oil continues to signal a US (and Global) #recession pending (we have Monthly #Quad4s for December through February don’t forget) with Oil (WTI) down another -1.5% this morning and officially moving into #Quad4 Crash Mode, down -20.5% from its Q324 Peak (when GDP had a 4% handle on the headline); going from Long to Short both Oil and Energy Stocks (XLE) was good risk mgt #process.



Below is an excerpt from Real-Time Macro by analyst Christian Drake:

“I love it when a plan comes together”

The quote above, of course, comes courtesy of former A-Team captain and current 4Q23 macro strategist, John “Hannibal” Smith. 

And below is the Durable Goods edition of our ongoing Shot → Chaser series whereby we document the evolution of “The Plan.”

*Reminder: The Plan: 

  • Shock-tober (shot)  organic deceleration + UAW distortion + Other (student loan repayment/etc.) = accelerated/amplified deterioration in the domestic high-frequency data
  • November (chaser)  Easy Y/Y & M/M comps + UAW distortion reversal = probable acceleration in the reported sequential & Y/Y data (November data reported in December) = Quad 1 or Quad 2 month, at least optically

From there, January will = stiff double shot of hard comps and asymmetric downside risk.

With respect to Durable Goods:

  • Headline Durables = -5.4% M/M (against negatively revised September estimates) = -680 bps deceleration to +0.3% Y/Y = RoC Cycle Low
  • Ex-Transports (i.e., imperfect read on ex-UAW related impacts) = +0.0% M/M = flat at +1.3% Y/Y
  • Ex-Defense & Aircraft (cleanest read on underling private sector demand) = -1.2% M/M = -110 bps deceleration to -0.2% Y/Y = RoC Cycle Low
  • Capex = -0.06% M/M = -97 bps decel to +0.58% Y/Y = continued Trend deceleration

In other words, “The Plan” remains on script with respect to the reported October data, as does the prospective November data as:

  • Some/all of the Transport-related weakness is likely to reverse
  • Boeing received $63B+ in November orders alongside the Dubai airshow … which will presumably flow through the Aircraft Orders data for November and help juice Headline Durable Goods

Market Edges: "The Government Spent Their Brains Out" - drake1

Market Edges: "The Government Spent Their Brains Out" - drake2



As Keith McCullough pointed out, our Industrials analyst Jay Van Sciver is the ONLY analyst on Wall Street with a published SELL (Short) view (look it up on Bloomberg) on Deere $DE.

When Deere (DE) fell -6% in the pre-market Wednesday, Van Sciver was the only analyst who recommended shorting the ag manufacturer. 

“Deere is correctly giving guidance for next year that’s pretty far below consensus,” Hedgeye’s Industrials analyst explained on The Call @ Hedgeye. “They’re saying $8 billion, and consensus was closer to $10 billion.” 

“It’s a cyclical. If you run a cyclical business, you know this,” McCullough added.

“People should know these things. For Jay Van Sciver to have, nevermind a sell, but a short rating on Deere is another big win for Hedgeye Risk Management.” 

Market Edges: "The Government Spent Their Brains Out" - TheCall 11.22.2023 Thumbnail PB

Subscribe to Industrials Pro for more of Van Sciver’s analysis on the sector. 



Below is an excerpt of The Early Look written by Keith McCullough.

I don’t get my team to write my morning “observations” and put my name on it! Is there a difference when you’re “bolted to the chair” (going through all the numbers yourself) vs. opining from upon high?

A: Big time.

Oil down -1.5% this morning and gold up another +0.6% is just another signal that a #Quad4 recession is pending.

As a matter of #process, I get the numbers from my teammates every weekend and measure and map ALL of Global Macro markets across my TRADE, TREND and TAIL durations myself.

  1. US Dollar Index had follow-through selling (down -0.5%) after breaking TRADE support (but remains Bullish TREND, barely)
  2. EUR/USD was up another +0.5% last week after moving to Bullish @Hedgeye TRADE and Neutral TREND
  3. Colombia’s Peso was up +1.3% vs. USD last to +4.4% in the last month and broke out to Bullish TRADE and TREND

Why am I the only Global Macro market strategist writing to you about Colombian Pesos? After being short both the currency and Colombia’s Stock Market for a long time, I’m Long of Colombia via GXG.

In addition to Long Colombia (GXG) you can see all of my Long Only Asset Allocations in our new Portfolio Solutions product either daily or weekly. When I say we’re building a “better way,” that’s because no one is going to give you our transparency & accountability.

Is the Commodities Market still signaling a recession (in demand)?

A) CRB Commodities Index (19 Commodities) was down another -0.6% last week to -3.5% in the last month = Bearish TREND
B) Oil (WTI) was down another -0.7% last week to -9.0% in the last month and continues to signal Bearish TRADE and TREND
C) Corn was down another -0.6% last week to -3.1% in the last month and continues to signal Bearish TRADE and TREND too

Live Cattle was down -3.3% last week to -5.5% in the last month and continues to signal Bearish TRADE and TREND as well. Are you measuring and mapping ALL of it? I think that’s a must in being modern day Macro Aware.

While you’re measuring & mapping you’ll notice the big Global Macro Divergences between Gold/Silver and Oil/Copper again today:

A) Gold is up another +0.6% pushing towards new 3-month highs after being up another +1.1% last week
B) Silver is up another +1.8% this morning after being up +2.1% last week and moving back to Bullish TRADE and TREND
C) Copper is down -0.7% and down for the 2nd day after I signaled SELL on it in Real-Time Alerts last Wednesday

Not only am I writing about all of Global Macro, I am trading it myself with my family’s hard-earned capital. Again, instead of opining about it on TV, I am the Antichrist of CNBC, fully loaded with #timestamps of EVERY Real-Time Alert since 2008.

Our Long Insurance (IAK) Asset Allocation was hitting all-time highs alongside our Long Only allocations to Nuclear & Uranium (Long NLR and URA). All-time is a long-time and we fully expect to provide you with differentiated research and positions vs. consensus.

Market Edges: "The Government Spent Their Brains Out" - media missed



Below is an excerpt from a Macro Pro research note written by Director of Research Daryl Jones.

  • Sharp rate of change slowdown in China Industrial Profits to +2.7% Y/Y for October
    • This compares to +11.9% Y/Y in September and +17.2% in August
    • This is some combination of weak internal demand and declining commodity prices, but a notable slowdown
  • Just something to watch, but there is some stress showing up in China money markets into month end ... 7D repos reached +2.8% and non-bank financials were up to +3.5%
  • ECB President Lagarde spoke to European Parliament this morning, saying “not time to start declaring victory on inflation”
  • Some key economic data releases to watch this week:
    • Tuesday – France and German Consumer Confidence
    • Wednesday – Inflation data for November from Italy, Belgium, and Germany; Japan Retail Sales and Industrial Production
    • Thursday – China November Manufacturing and Services PMI (expectations: 49.7 and 51.1, respectively); German Retail Sales; Eurozone Flash CPI (expectations: +2.7%)

Market Edges: "The Government Spent Their Brains Out" - jones