You might not be old enough to remember this, but…
Back in the late 1970s and early 1980s, an investment firm called E.F. Hutton ran commercials non-stop where one person shares his broker’s advice with a friend and asks, “What does your broker say?”
The friend replies, “Well, my broker is E.F. Hutton. And E.F. Hutton says…”
With that line, the crowd of busy people milling around in the background abruptly stops to near E.F. Hutton’s investing wisdom.
A narrator then ends the commercial with the now iconic line:
“When EF Hutton talks, people listen!”
Back then, solid financial advice from experts wasn’t easy to come by.
Today, the world wide web is exposing us to quite a few “E.F. Huttons.” And for anyone looking for valuable financial insights, it may be time to stop and listen to what they’re saying.
In the banking sector, one of the most vocal experts is JP Morgan CEO Jamie Dimon.
According to CNBC, Dimon says the “recent tariffs are causing many to consider a greater probability of a recession.”
In JP Morgan’s annual letter to shareholders this year, Dimon also expressed that…
“The consequences of not dealing with this range from bad to catastrophic.”
One of the business world’s most outspoken “E.F. Huttons,” Bill Ackman, echoes Dimon’s concerns and says the world now stands on the verge of a “self-induced economic nuclear winter.”
As the captain of one of the world’s top-performing hedge funds, Ackman’s investments span multiple industries, which makes him acutely aware of how global trade disruptions impact businesses across sectors.
In a lengthy post on X, Ackman warned that “such policies (extensive tariffs) would cause business investment to grind to a halt and destroy international trust in the US that would take years and potentially decades to fix.”
And Bond King Bill Gross says, “Investors should not try to ‘catch a falling knife.’”
In his view, many of the so-called bargains people are rushing into right now will likely not be considered bargains tomorrow and the day after.
Because when the markets are this fragile, the real risk isn’t missing out on a quick win…
It’s failing to protect what you already have.
Boaz Weinstein, founder of hedge fund Saba Capital, echoes similar concerns in an interview with Bloomberg, saying that an “economic collapse” may have already begun.
And this concept, coming from Weinstein, is worth considering.
It’s not by luck that he became the youngest-ever managing director at Deutsche Bank at age 27 as he racked up “billion-dollar profits” during his time there.
Whether Weinstein’s forecast is correct remains to be seen.
But in times like these, Americans should be looking to the Federal Reserve to step in to calm markets.
And former New York Fed president Bill Dudley shared with Fortune that it “may already be too late” for the Fed to stop a recession.
Even Fed Chair Jerome Powell himself, usually guarded, now admits the odds of a downturn have “moved up.”
Don’t forget that America is also grappling with a national debt that has surged to an unprecedented $36.7 trillion. Of this staggering total, $9.2 trillion is slated for refinancing or maturation within the year.
It might explain why Goldman Sachs CEO David Solomon issued a cautionary message earlier this year that the mounting US debt requires “immediate attention” and why his own analysts have raised the odds of a US recession twice in a single week.
This was quickly followed by seven other top investment banks raising their recession risk forecasts, with JP Morgan putting the odds of a US and global recession at 60%.
This, for many people, should serve as a clear warning worth listening to.
If an E.F. Hutton–style commercial aired today and the camera panned to Ray Dalio, the room would fall silent as he delivered the line he’s repeated for decades:
“If you don’t own gold, you know neither history nor economics.”
And gold, the canary in the coal mine, is telling us with its aggressive price movement and record-breaking track record how bad things really are and are going to be.
With recession odds climbing and policy tools looking blunt, owning gold won’t make market risk disappear, but it can give you the breathing room that Jamie Dimon, Bill Ackman, and other market veterans warn may soon be scarce.
Please don’t hesitate to reach out to us with any questions you may have.
May you be safe and well during these uncertain times.
Todd Sawyer, Director of Client Education
Colonial Metals Group