The man worth nearly $10 billion can find little to get “excited” about when looking at Wall Street, he told a conference last week, while pouring cold water on the belief that markets will always improve over time.

Speaking at a Robin Hood Foundation and JPMorgan event in New York, Druckenmiller said he had become “really nervous” in recent weeks that something in the economy is about to break.

As a result he revealed he has bought a “massive leveraged positions” in short-term notes, adding his position to the increasing number of investors sounding the alarm on the global economy.

In recent weeks Bill Ackman, founder of Pershing Square Capital Management, revealed he has decided to end his bet against 30-year Treasury bonds saying “there is too much risk in the world to remain short bonds at current long-term rates.”

Shortly after the ‘Bond King’ himself, Bill Gross, urged his followers on X to “invest in the curve” on bonds, which have been hit with a selloff in recent months.

Yields on 10-year government bonds peaked at more than 5% late last month‚ the first time in 16 years, while 30-year bonds similarly spiked at approximately 5.2%. 

When Treasury bond yields rise, Treasury bond prices fall. This is why investors like Ackman have been shorting, or betting against, bond prices.

Druckenmiller’s stock market strategy

The man who managed funds for George Soros for more than 10 years said there are some glimmers of opportunity in the stock market—AI, for example.

And while Druckenmiller admitted further trickle-downs from Biden’s fiscal stimulus package during COVID could help markets in the coming months, he added the unintended pressure the stimulus had put on rates would cause other “things in the market to break.”

All in all, there was little the founder of Duquesne Family Office said he could get “excited” about.

“We’ve been through two or three months of a pretty devastating period,” Druckenmiller continued. “All I know is every sale I made I’m happy about and every buy I made I’m not thrilled with.”

Admitting he wasn’t inspired by many short-term bets, Druckenmiller said he didn’t believe long-term wagers would pay off either: “We have this belief in this country that stocks always go up over the longer term.

“I said a couple years ago, and I still believe it, I think the S&P was 4,500—it’s about where it is now—that I thought the equity market would be in the same place in 10 years that it was then.”

Druckenmiller explained he believes a “fundamental adjustment” needs to be made in the pricing of the market, saying the pricing to earnings ratio has been pushed way out of balance.

He added he doesn’t believe earnings will go up further next year: “They’ll [be] flat at best. So it’s hard for me to get excited about the overall long side of the market—forget individual stocks.”

‘The math has gone crazy’

Druckenmiller also took aim at a raft of prominent figures influencing the economy, from Janet Yellen through to former President Donald Trump, and current President Biden.

The Treasury Secretary is behind the “biggest blunder” in the history of America’s Treasury, Druckenmiller said, highlighting that Yellen had failed to take advantage of the ultra-low interest rates era.

“When rates were practically zero, every Tom, Dick and Harry in the U.S. refinanced their mortgage… corporations extended [their debt],” he said. “Unfortunately, we had one entity that did not: the U.S. Treasury.”

Druckenmiller, like many other economic titans, also sounded the alarm on the government’s debt burden—which is now up to more than $33 trillion.

“The politicians that are telling you and think they’re not going to cut entitlements, it’s just an outright lie,” he said. “Honestly, I think the math has gone crazy.”