Markets, Populism, and the Limits of Confidence

Stocks Down, Gold Up, and a Market Searching for Anchors

In this episode of The Real Eisman Playbook, I sat down with Jason Trenard, CEO and founder of Strategas, for a wide-ranging discussion on markets, populism, inflation, and where risk is quietly building beneath the surface.

At the time of recording, the market tape told a confusing story. Equities were down, gold and oil were up, and crypto was falling even faster than the NASDAQ. On the surface, this looked like classic risk-off behavior. Underneath, it revealed something deeper: investors are confident, but not comfortable.

Tariffs, Trump, and the Return of Negotiation Risk

With President Trump once again threatening tariffs—this time aimed at Europe and even French wine—markets are reliving a familiar anxiety. Jason’s view is clear: Trump is always negotiating. The aggressive rhetoric is part of leverage, not necessarily the final policy outcome.

That said, the risk is real. Markets remember April’s tariff-driven correction, and repetition alone can create volatility even if the end result is muted. Greenland, rare earths, and national security concerns are now firmly part of the macro conversation.

Populism as the Defining Macro Force

Jason framed much of today’s market behavior through one dominant lens: populism.

Across the political spectrum, voters are reacting against decades of policies that favored efficiency, globalization, and financialization—often at the expense of wages, jobs, and affordability. Free trade with currency manipulators, foreign wars, uncontrolled immigration, and aggressive environmental mandates have all contributed to backlash.

From an investment standpoint, populism has a simple implication: more spending, less discipline, and structurally higher inflation.

That helps explain why gold continues to rally. Fiat currencies may fluctuate against one another, but against gold, they are all steadily losing purchasing power.

Inflation vs. Affordability: The Real Political Problem

A key distinction emerged in the discussion: inflation is about rates of change; affordability is about price levels.

Even if inflation slows, prices remain permanently higher. Wages, especially for the average worker, have not fully caught up—particularly when measured against price levels going back to the year 2000. Housing remains the most visible pressure point.

Jason noted early signs of life in housing data, but higher long-term rates remain a headwind. Mortgage rates may be down from their peak, but affordability is still strained due to supply constraints and regulatory friction.

Crypto’s Identity Crisis

On a day when gold rose and stocks fell, crypto dropped even more than equities. That contradiction matters.

If crypto were truly digital gold, it should hedge fear. Instead, it trades like leveraged risk. Jason was blunt: crypto has become primarily speculative. Its thesis is unclear, its intrinsic value debatable, and its behavior inconsistent with its narrative.

That doesn’t mean crypto cannot trade higher. It means investors should be honest about why they own it.

A Strong 2026, With Questions Beyond

Strategas expects 2026 to be economically strong, driven by fiscal stimulus from Trump’s “big beautiful bill,” accelerated capital spending incentives, the World Cup, and America’s 250th anniversary. Nominal growth looks solid. Earnings expectations are robust.

The real question is sustainability beyond 2026. Can capital investment translate into productivity gains, or does inflation reassert itself before the benefits materialize?

The Market Is Expensive—and It Doesn’t Care

By almost any historical metric—price to earnings, price to book, price to cash flow—the market is expensive. Yet valuation has not mattered for years.

Why? Two reasons. First, the Federal Reserve’s balance sheet remains large. Second, investors believe the Fed will always intervene during a crisis.

This implicit backstop encourages risk-taking, financial engineering, and leverage. It also distorts capital allocation, rewarding buybacks over factories and opacity over transparency.

Where the Real Risk Is: Private Markets

Jason was unequivocal: the most dangerous excesses are not in public equities but in private equity and private credit.

Private assets appear low-volatility only because they are infrequently marked. In reality, they are often highly leveraged, rate-sensitive, and mispriced. Secondary market sales consistently clear at discounts, revealing what daily pricing would show if it existed.

With tens of thousands of unsold private equity-backed companies and weak exit markets, stress is building quietly.

Retail Power and the New Market Structure

Retail investors now matter in a way they never did before. Commission-free trading, fewer public companies, and social platforms have changed price discovery. Stocks can move violently on narratives rather than fundamentals.

This doesn’t invalidate markets—but it does shorten cycles and amplify extremes.

Jason’s Personal Playbook

When asked what he owns personally, Jason was candid. He favors defense and aerospace, gold miners, and space-related assets. He is also intrigued by the convergence of prediction markets and traditional financial markets.

His positioning reflects the broader theme of the conversation: hedge inflation, respect geopolitics, and recognize that traditional guardrails no longer function as they once did.

Final Thought

Confidence remains high, but comfort does not. Investors are fully invested, aware of the risks, and relying—perhaps too heavily—on the assumption that policy makers will always step in.

That belief has worked so far. History suggests it eventually won’t.

And when that changes, it won’t be subtle.

Until next time, this is Steve Eisman, and this has been The Real Eyesman Playbook. .
If you’d like to catch my interviews and market breakdowns, visit The Real Eisman Playbook or subscribe to the Weekly Wrap channel on YouTube.

This post is for informational purposes only and does not constitute investment advice. Please consult a licensed financial adviser before making investment decisions.