The Rundown – Why the Oil Shock Could Trigger the Next Recession | Mike McGlone

Date: March 9, 2026
Host: Zaid Admani
Guest: Mike McGlone (Senior Commodities Analyst, Bloomberg Intelligence)

Episode Overview

This episode dives into the recent oil price shock, triggered by the closure of the Strait of Hormuz amid escalating conflict in the Middle East. Zaid Admani speaks with commodities expert Mike McGlone, who shares his data-driven, contrarian perspective on oil prices, volatility in the stock market, and the broader economic impact—including his call that these events could tip the US into its next recession. The conversation is rich with historical comparison, market structure insight, and prediction.

Key Discussion Points & Insights

1. Why Oil Prices Spiked and What It Means

• Recent Surge: Oil prices surged over 25% since the start of the war, with Brent and WTI crude trading above $90 (00:36).
• Strait of Hormuz: The unexpected closure of this critical oil chokepoint surprised McGlone and triggered a sharp short squeeze (01:05).
  • Quote: “This is a stopping out of shorts and that to me is probably the sign of a key peak.” – Mike McGlone (01:10)
• Historical Context: McGlone compares the move to previous commodity spikes—Ukraine/Russia 2022, oil in 2008—arguing that sharp surges tend to precede major market turns or recessions (01:17).

2. Predictions: Oil’s Trajectory

• Bearish Outlook: Despite the dramatic increase, McGlone expects oil prices to be “down on the year” by year end—predicting sub-$50 levels (02:34).
  • Quote: “If I'm wrong, I’ll own it, but by the end of the year, I think the price of crude oil in this country will be down on the year.” (02:34)
• US as Price Maker: Unlike past shocks, the US is now the world’s largest energy producer and net exporter (03:40). This enables US producers to ramp supply and hedge against price spikes, dampening long-term price impact (04:08).
  • Quote: “The price maker status on the whole planet has shifted over to the Western Hemisphere, led by the US, from Canada to Argentina.” (07:43)
• Demand Destruction: High prices curb demand and incentivize supply—reinforcing McGlone’s expectation for a swift reversal (07:28).

3. Geopolitics and the Stock Market

• Market Volatility: Surging oil and precious metal prices contrast with historic lows in stock market volatility (05:36).
  • Quote: "We have the US stock market cap to GDP about 100 year high and 180 day volatility on S&P 500 and Nasdaq is running near a 10 year low.” (06:10)
• Stock Market ‘Hangover’: McGlone warns that this volatility is set to “trickle up” to equities, predicting a coming bear market and potential recession (06:18; 13:08).
  • Quote: “I think crude oil is going to fall… it’s very rare for that kind of volatility not to trickle up to the stock market." (06:18)
• Political Stakes: Outcomes of the Middle East conflict, US midterms, and oil prices are seen as interconnected, with political motivations influencing market dynamics (03:35–05:00).

4. Macro Forces: Inflation, Deflation & Global Dynamics

• Deflationary Risks: China remains a key source of global deflation, with its bond yields much lower than in the US (06:55).
• Risk Asset ‘Mean Reversion’: McGlone highlights the overvaluation of US stocks versus global peers and GDP—arguing for a significant correction (13:08).
  • Quote: “I'm just expecting a little bit of reversion... This could be part of that catalyst—the invasion.” (13:08)

5. Passive Investing and the Myth of ‘No More Recessions’

• Passive Flows: Zaid brings up the anchoring effect of regular 401k and passive investor flows (14:46), asking if this can prevent any major drawdown.
• McGlone’s Take: He rejects the “this time is different” consensus, forecasting a potential 50% S&P 500 drawdown as in 2000–2022 (15:39).
  • Quote: “We are on the cusp of the third 50% drawdown in the S&P 500 since the beginning of 2000... and prices are more expensive now than ever.” (16:07)
  • Reference to Benjamin Disraeli: “What we generally expect seldom occurs.” (15:54)

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|---------|-------| | 01:10 | Mike McGlone | “This is a stopping out of shorts and that to me is probably the sign of a key peak.” | | 02:34 | Mike McGlone | “If I'm wrong, I’ll own it, but by the end of the year, I think the price of crude oil in this country will be down on the year.” | | 03:40 | Mike McGlone | “The US is the largest energy producer on the planet and a net exporter. That’s an oxymoron compared to the past.” | | 06:10 | Mike McGlone | “We have the US stock market cap to GDP about 100 year high and 180 day volatility on S&P 500 and Nasdaq is running near a 10 year low.” | | 07:43 | Mike McGlone | “The price maker status on the whole planet has shifted over to the Western Hemisphere, led by the US, from Canada to Argentina.” | | 13:08 | Mike McGlone | "I'm just expecting a little bit of reversion... This could be part of that catalyst—the invasion." | | 16:07 | Mike McGlone | “We are on the cusp of the third 50% drawdown in the S&P 500 since the beginning of 2000... and prices are more expensive now than ever.” | | 15:54 | Mike McGlone | “As Benjamin Disraeli pointed out: ‘What we generally expect seldom occurs.’” | | 12:19 | Zaid / Mike | “Gold is a meme stock.” — “It’s the highest in 20 years. 2006 was a great time to buy gold. But this time it’s probably a great time to sell gold.” |

Segment Timestamps

• Oil’s Reaction to Strait of Hormuz Closure: 00:36–01:30
• Historical Context of Oil Spikes/Recessions: 01:17–02:05
• Price Predictions, US as Oil Superpower: 02:34–04:30
• Geopolitics, War, and Market Forces: 03:35–06:55
• Stock Market Volatility Disconnect: 05:36–06:55
• Demand, Supply, and Shock Absorption: 07:01–08:45
• Stock Market Correction Talk: 10:22–13:37
• Passive Investing/Potential for Major Crash: 14:46–16:55

Tone & Takeaways

The conversation is brisk, dense, and contrarian, with McGlone emphasizing the danger of consensus thinking and highlighting structural changes in oil and risk markets. He stresses cyclical mean reversion, the new global status of the US as energy king, and links between commodity/asset volatility and systemic risk—arguing that passive flows and recency bias won’t shield markets from inevitable correction.

Final Thoughts

Listeners are left with unconventional perspectives to consider—such as a possible oil price crash, evidence of complacency in equities, and the warning signs buried in divergences between commodities and stocks. Zaid promises to revisit these themes as the year (and global events) unfold.