Give me Liquidity or Give me Death!

Source: Michael Ballanger 11/02/2026

Michael Ballanger of GGM Advisory Inc. shares his thought on the current state of the market, taking a careful look at Friday’s tech crash.

Being leveraged during a liquidity squeeze is like playing with matches in a gunpowder factory — not a very wise practice.

As the fateful month of October was drawing to a close, we learned the hard way how leverage creeps into the markets led by levels of avarice that commonly arise during periods of extreme market optimism. The late former Fed Chairman Alan Greenspan gave it an apt description when he called it “irrational exuberance” in the late 1990′s to describe the public’s love affair with “anything tech,” which morphed into the dotcom bubble that popped with a deafening roar in March of 2000. In the next two years, the NASDAQ dropped 78%, with many of the dotcom and technology favorites shedding 90-95% before the rout was done.

At the top in 2001, the Buffett Indicator (Total U.S. Market Cap divided by Gross Domestic Product) was causing nosebleeds at 159.2%. Today, that indicator is at 236%. In March 2001, total margin debt was at $479.29 billion; today it is at $1.48 trillion (with a “T”).

The Case-Schiller P/E ratio in March 2000 was 43.03; today it is at 40.69. The yield on the U.S. 10-year Treasury Bond was 6.26%; today it is markedly lower at 4.93%. It is estimated that the capital required to build out the entire global internet infrastructure in the 1990s was $500 million; the global capital expenditure required to build out the AI infrastructure is projected to be vastly larger than the 1990s internet boom, with current estimates ranging between $5.2 trillion and $7.9 trillion in cumulative spending by 2030, with much of that being borrowed by way of the bond market.

CNBC has trotted out all the usual suspects today. Howard Marks, most of the rockstar bankers, permabull Tom Lee, and a long array of “stiff upper lip” bulls that are all singing from the same hymn sheet – that earnings will save the day and that the yield on the 10-year bond is inconsequential.

As a trader/investor, I look at one of the culprits of Friday’s technology crash, Intel Corp. (INTC:NASDAQ), whose 30% crash today into weaker-than-expected earnings and reduced forward guidance took its P/E ratio down to 32.89 from 47.69, and I can only wonder what traders were thinking two days ago when the analysts acted like they were in the Sunday choir all reciting the same bullish lilt that centered around the “AI buildout“.

What changed between Wednesday and Friday reminded me of the famous Mike Tyson quote about “Everybody got a plan ‘til dey get punched in da mouth!” It is also similar to what I heard an old veteran Vancouver floor trader tell me some forty years ago. He said, “The difference between a great deal (stock) and a crap deal (stock) can be a 100,000 share sell order at exactly the wrong time.” The INTC report last night was like that “100,000 share sell order” that came at “exactly the wrong time“.

Now, looking at the “Mag Seven” group that led the NASDAQ all last year and for the first six months of 2026, here is how they now look:

In Bear Market (down 20% or more)

• Alphabet Inc. Class A (GOOGL:NASDAQ): Down ~29% from its peak. Shares suffered heavily following earnings disappointments and growing scrutiny over free cash flow pressured by AI infrastructure spending.
• Meta Platforms Inc. (META:NASDAQ): Down ~20% from its peak. Similar to Alphabet, Meta has been weighed down by immense capital expenditure outlays that lack an immediate, high-margin ROI narrative for investors.

In Correction Mode: (Down 10% to 20%)

• Tesla Inc. (TSLA:NASDAQ): Down 19.2% from its peak. It is sitting right on the precipice of a formal bear market as its identity pivots away from pure EVs toward high-cost robotics and autonomous AI systems.
• Amazon.com Inc. (AMZN:NASDAQ): Down 15.1% from its peak. The stock fell into correction territory after reporting negative free cash flow figures in its recent earnings release.
• Nvidia Corp. (NVDA:NASDAQ): Down 12.2% from its peak. Despite stellar revenue growth, the chipmaker has entered a digestion phase due to market anxieties that hyperscalers might scale back hardware orders in 2027.

Approaching Correction Mode (Down less than 10%)

• Microsoft Corp. (MSFT:NASDAQ) and Apple Inc. (AAPL:NASDAQ) are the only two companies successfully bucking the trend. Microsoft managed to reassure Wall Street by pairing its hefty AI spending with positive free cash flow and Azure cloud growth. Apple has largely avoided the infrastructure spending wars altogether, remaining insulated as a consumer hardware and services play.

The Magnificent Seven “generals” heavily led and dominated the U.S. stock markets for roughly three years, specifically from the beginning of 2023 through 2025. Without them, markets are seeking out new leadership, and after this week, it is painfully apparent that no new leaders have yet to grab the baton and lead the next charge. From where I sit, it is going to be the commodity stocks that assume leadership, which includes energy.

It was yet another brutal week for gold and I am the first to admit that I turned bullish on gold about three weeks (and $400) ago and no longer am I able to carry around bragging rights for my “uncanny accuracy” in calling the gold market (tongue planted firmly in cheek). The good news is that copper remains in a solid uptrend, spitting defiantly in the face of anyone who dares challenge its supremacy in the metals arena.

However, two important points must be remembered when judging the action in the gold market this week. The first is that gold is used by many large portfolio managers as a hedge against market drawdowns and as a source of liquidity in lieu of cash. If a fund’s mandate is that it must remain “fully-invested“, they will use gold for its instant liquidity because if there is one redeeming attribute of the global gold market, it is that it is very, very liquid. The second point to remember is that when markets enter a sharp drawdown period like April 2025 and March 2020, those gold hedges get sold, serving their portfolio manager masters, as the liquidity inherent in the gold holdings serves their purposes.

The key to this utility is that it always occurs at the tail end of the trend. Blowing off one’s gold positions to meet a margin call on one’s “AI” losers is the ultimate capitulation. The last time we had babies being thrown out with bathwater was at the lows of March 2020 when the world economy was being shut down all for a flu bug that turned out to be (once again) a foolhardy move by global leaders but which also represented the low for gold at $1,472. Five years later, it hit $5,626.

I have been telling subscribers for weeks on end that the U.S. mid-term elections could throw a major scare into the usually sanguine moods of the Wall Street perma-bulls, but up until this week, it was “business as usual” as traders shrugged off the polls and continued to churn and burn within 1% of record highs. However, this week there was a noticeable angst that enveloped the bovine crowd, and as the week rolled on and as election day grew closer, there was a palpable increase in tensions culminating in today’s absolute rout, with the NASDAQ 100 down 3.46% or over 1,000 points as technology was jettisoned overboard at every turn. The big debate now is whether traders will sell the rumor and buy the news, as in using a Democratic sweep as a buying opportunity.

The one truism that constantly keeps me long the metals is that $40 trillion national debt load and the 2 trillion fiscal deficit that will need constant juggling in order to keep the currency from imploding. No matter what happens in Washington or New York between now and year-end, the beneficiaries will be any asset that retains purchasing power against a depreciating currency. The 10-year yield dropped like a stone all week long and went out a full 442 basis points below the 52-week high at 5.365%.

There is simply no other way to avoid the fiscal time bomb, and that involves a self-imposed immolation of the U.S. greenback. If you raise rates, debt servicing costs kill you, and if you stimulate to facilitate “growing your way out of debt,” then you risk inflation, which will also crush the dollar. With any outcome, ownership of copper and gold insulates you from the debilitating process of debasement, resulting in the retention of purchasing power rather than the erosion of it.

One other point to consider about the copper narrative. The copper bears are trying to sell the bear case based on a pending revision in copper demand by the “AI build-out” gang.

What they fail to grasp is that the bull case for copper begins with the issue of supply, not AI demand. With no new large copper mines either in construction or at positive feasibility, it will take a decade or so to get one to production, and that’s if they can find one that can be permitted and funded without the environmentalists throwing up roadblocks and protesting at city hall.

Furthermore, China is moving at rapier-like speed to build out its electrical grid with little or no consideration for “AI“.

So, when I look at the quote screen, and I see a sea of red where my twenty or so mining stocks are blinking feverishly during what has been a massive down day for literally everything, I am absolutely amazed to see two ticker symbols — FTZ:TSXV and FTZFF:OTCQX — standing out as green with everything else either red or white. My top pick and largest holding — Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQX; C3Y:FSE) — traded 846,584 shares volume and actually closed UP on a day when it was a complete ocean of red.

I look out to the final eight weeks of 2026 and thank my lucky stars that I have remained steadfastly overweight both copper and FTZ/FTZFF all year long, although it does distress me that my favorite blue chip — Freeport-McMoRan Inc. (FCX:NYSE) — took it squarely on the chin this week with its worst closing price since August.

The good news is that with a relative strength index of 30.47, any further weakness from here will take it into an oversold condition, which rarely lasts for long and usually results in a sharp reversal.

My next missive will be after the U.S. mid-term elections, and if these campaign tones of hellfire and brimstone carry through for the next two years, it is going to get very ugly in Washington, especially if there is a sweep of both houses by the Democrats.

And Wall Street will not like that…

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Important Disclosures:

1. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Fitzroy Minerals Inc., Alphabet Inc. Class A, Tesla Inc., Apple Inc., Amazon.com Inc., and Nvidia Corp.
2. Michael Ballanger: I, or members of my immediate household or family, own securities of: GLD, Freeport-McMoran Inc., and Fitzroy Minerals Inc. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
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Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

Source: https://www.streetwisereports.com/article/2026/11/02/give-me-liquidity-or-give-me-death.html