On My Radar - Float Like a Butterfly
April 18, 2025
By Steve Blumenthal
“Service to others is the rent you pay for your room here on earth.”
— Muhammad Ali
It was 1964, and the world was watching a brash, 22-year-old heavyweight contender named Cassius Clay. He was loud, unapologetically confident, and about to face the seemingly invincible champion, Sonny Liston. Few gave Clay a chance. Liston was a monster in the ring - a heavy-handed brawler who had bulldozed his last opponents in a matter of rounds.
But Clay wasn’t like other fighters. In the buildup to the fight, he taunted Liston with poems and rhymes, one of which included the now-immortal line:
"Float like a butterfly, sting like a bee. His hands can’t hit what his eyes can’t see."
It wasn’t just bravado. It was strategy. Clay’s plan was to use his superior speed and footwork to avoid Liston’s power shots, while peppering him with sharp, fast punches. On February 25, 1964, in Miami Beach, Clay put that plan into action.
From the opening bell, he danced around the ring, making Liston lunge and miss. His jab was crisp. His movement was poetry. By the seventh round, Liston, battered and frustrated, refused to answer the bell, giving Clay a shocking victory and the heavyweight championship of the world.
Shortly after, Clay announced he was joining the Nation of Islam and took the name Muhammad Ali.
A Short Story
Years later, an old reporter asked Ali if he still remembered the first time he used the “butterfly-and-bee line.”
“Of course,” Ali grinned. “I wrote that for Liston, but it was for the world.”
He told the story of a boy in Louisville, Kentucky, who once had his bicycle stolen and vowed never to let anyone take anything from him again. That boy learned to fight, to dance, to dream louder than anyone dared.
In the twilight of his career, Ali would recall the Liston fight not just as a victory in the ring, but as the moment he became himself.
“When I said I’d float like a butterfly and sting like a bee, I wasn’t just talking about boxing,” he said softly. “I was talking about life. Move with grace, strike with purpose.”
Muhammad Ali passed away on June 3, 2016, at the age of 74. He died in Scottsdale, Arizona, after a long battle with Parkinson’s disease, which he had been diagnosed with in 1984.
Even after his retirement, Ali remained a global icon - not just for his boxing accomplishments, but also for his activism, charisma, and humanitarian work. His funeral in Louisville, Kentucky, drew people from around the world, including former presidents, athletes, and everyday fans who admired the man who called himself "The Greatest."
Still floating, still stinging, forever a champion.
Grab your coffee and find that favorite chair. We are in a bit of a heavyweight fight ourselves. It’s been another interesting week in the markets. I don’t believe I’ve ever fielded more concern calls.
I intended to provide you with a detailed outlook update piece; I need more time to complete it and will share it with you next week. The report will examine the implications of tariffs on the economy and global trade. We’ll also discuss the outlook for the dollar, inflation, interest rate direction, earnings, valuations, and various asset classes, including stocks, bonds, currencies, commodities, and the gold market.
Bottom line: probabilities favor higher interest rates, higher inflation, slower growth, and increased volatility. Unusual times. To tee it up, listen to Ray Dalio’s Meet the Press interview. Finally, do check out the brilliant Muhammad Ali clip in the personal section.
On My Radar:
Ray Dalio - “Something Worse Than Recession, If This Isn’t Handled Well.”
Trade Signals: Update - April 16, 2025
Personal Note: A Few Cups of Love
See Important Disclosures at the bottom of this page. Reminder: This is not a recommendation to buy or sell any security. My views may change at any time. The information is for discussion purposes only.
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Ray Dalio - “Something Worse Than Recession, If This Isn’t Handled Well.”
Source: Yahoo Finance, Meet the Press
Billionaire hedge fund manager Ray Dalio isn’t just worried about a recession in the United States, he told “Meet the Press” host Kristen Welker Sunday, he’s worried about “something worse than a recession if this isn’t handled well.”
The “this” in question are Trump’s international tariffs.
“A recession is two negative quarters of GDP and whether it goes slightly there. We always have those things. We have something that’s much more profound,” the investor and Bridgewater founder explained. “We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money. So we have that problem. And when we talk about the dollar and we talk about tariffs, we have that.”
The United States has precedent for the situation the country faces, he added. “Such times are very much like the 1930s. I’ve studied history. And this repeats over and over again. So if you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors, those changes in the orders, the systems, are very, very disruptive. How that’s handled could produce something that is much worse than a recession. Or it could be handled well.”
After Welker asked Dalio for clarification (and noted that the correctly predicted the 2008 recession), he added that the United States is “at a juncture.”
“Let’s take the budget. If the budget deficit can be reduced to 3% of GDP, it will be about 7% if things are not changed,” Dalio answered. “If it could be reduced to about 3% of GDP, and these trade deficits and so on are managed in the right way, this could all be managed very well. I believe that members of Congress should take the pledge, what I call the 3% pledge. That in one way or another, that they will get that budget deficit down to that number. If they don’t, we’re going to have a supply/demand problem for debt at the same time as we have these other problems. And the results of that will be worse than a normal recession.”
Welker continued to push Dalio and asked him to name his “biggest fear” in terms of a financial crisis. “The value of money, what is a ‘storehold’ of wealth? That is a bond. In other words, one man’s debt is another man’s assets, bond holders. And so we’re going to be a situation where if that ‘storehold’ of wealth is in jeopardy because there’s too much supply and demand and so on, and we have a monetary inflation,” he explained. “We will have great disruptions. And that could be like the breakdown of the monetary systems of ’71. It could be like 2008. It’s going to be very severe.”
In August 1971 President Nixon announced a series of economic actions, including 90-day wage and price freezes, a 10% import surcharge, and the US dollar was delinked from gold, all of which had a negative impact on the economy. The importance of the US economy around the world was diminished, international transactions were threatened, and developing nations were especially hit hard by the import surcharges.
Known as the Nixon Shock, the measures were received well in the US but not internationally. The policies have also been cited as a cause of stagflation that plagued the decade that followed.
Watch the interview with Ray Dalio by clicking the video above (or click here).
The post Hedge Fund Billionaire Ray Dalio Warns ‘Meet the Press’ Tariffs Could Bring ‘Something Worse Than a Recession’ | Video appeared first on TheWrap.
Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. The information provided is not recommended for buying or selling any security and is provided for discussion purposes only.
Trade Signals: Update - April 16, 2025
Market Commentary:
Equity markets sold off sharply today after Fed Chair Powell flagged trade war risks as a threat to the Fed’s policy goals and struck a wait-and-see tone. The S&P fell 2.24%, with tech lagging as the Nasdaq dropped just over 3%. Adding to the negative backdrop, the US imposed fresh restrictions on NVDA’s chip exports to China. On the consumer side, though, spending remains firm — March retail sales rose 1.4%, the strongest monthly gain in nearly two years.
Notable this week is the Zweig Bond Model moved to a -1 score (signaling higher interest rates) and the movements in gold, the dollar and the yen.
Gold, the Dollar, and the Yen.
Gold is ripping higher, the dollar is under pressure and the Yen is nearing the level it reached last summer (recall the market disruption back then - unwinding of leverage in the Yen carry trade). See: What is the Yen Carry Trade and Why Did it Blow Up Markets. Note the red circles in the Yen/Dollalr chart that follows.
Strong Gold:
Source: StockCharts.com
Weak dollar:
The dollar is breaking below the lows of the last two years. A weak dollar is inflationary, folks! Add a 10% tariff (call it a consumption tax) into the equation, and ouch.
Source: StockCharts.com
Strong Yen:
The concern here is the amouint of leverage tied to the yen carry trade. No one knows the size for sure but we are nearing a point where we are about to learn a lot more. Simply, leverage elevates risk. Keep the seat belt buckled.
Source: StockCharts.com
TRADE SIGNALS SUBSCRIPTION ACKNOWLEDGEMENT / IMPORTANT DISCLOSURES
The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. Not a recommendation to buy or sell any security.
Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only.
Personal Note: A Few Cups of Love
An interviewer asked Ali, “What would you like people to think about you when you’ve gone?”
Ali answered, “I’d like for them to say he took a few cups of love, he took one tablespoon of patience, one teaspoon of generosity, one pint of kindness, he took one quart of laughter, one pinch of concern, and then he mixed willingness with happiness, he added lots of faith, and he stirred it up well. Then he spread it over a span of a lifetime and he served it to each and every deserving person he met.”
Source: Instagram, hustlingfacts
Wishing you a few cups of love, one tablespoon of patience, one teaspoon of generosity, one pint of kindness, one quart of laughter, one pinch of concern, a combination of willingness with happiness, and lots of faith.
My daughter, Brianna, sent me a link to an excellent report from Lonnie Ali, Chair of the Muhammad Ali Index and Co-Founder of the Muhammad Ali Center. The main message is that compassion matters! Here are a few quotes, along with the link to The Compassion Report.
“IMPOSSIBLE IS NOT A FACT. IT'S AN OPINION. IMPOSSIBLE IS NOT A DECLARATION. IT'S A DARE. IMPOSSIBLE IS POTENTIAL. IMPOSSIBLE IS TEMPORARY. IMPOSSIBLE IS NOTHING.”
"THE AMERICA WE DREAM OF IS NOT IMPOSSIBLE. IT BEGINS WITH US DARING TO BELIEVE, TO ACT, AND TO LEAD WITH COMPASSION."
“EVERY HAND WE LIFT, HONORS THE GREATNESS WITHIN US ALL.”
— Muhammad Ali
A toast to you from me, wishing you compassion, grace, and hope, with a whole lot of joy mixed in!
Sunny and 70s! It’s time to bring the porch furniture out. I’m so looking forward to a morning coffee outside again. My favorite chair is moving outside starting tomorrow.
And I’ll be channeling my inner Rory McIlroy, visualizing his perfect golf swing while playing some golf this weekend. What a Master’s, what a Master’s, what a fantastic Master’s!
Happy Easter. Wishing you and your family a “few cups of love.”
With kind regards,
Steve
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Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.
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Stephen Blumenthal founded CMG Capital Management Group in 1992 and serves today as its Executive Chairman and CIO. Steve authors a free weekly e-letter entitled, “On My Radar.” Steve shares his views on macroeconomic research, valuations, portfolio construction, asset allocation and risk management. Author of Forbes Book: On My Radar, Navigating Stock Market Cycles.
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