Banking Sector Timebomb

We see complete disregard for the US Constitution (Executive, legislative,  and Judicial) separation of powers, and each branch not fighting to retain legal boundaries.   It is reasonable expected that legal lines in US financial markets will not be honored.   I do expect extend and pretend to be financed by the federal government.  China is on the precipice of financial failure due to their corrupt financial markets.  The US looks to recreate that mistake, however, it may take a few years until the markets fail.  I do expect the US Dollar to reflect this through relativity, and value of the dollar to Bitcoin, Gold, and some countries.

It is very rational to be 100% invested in the US stock market right now, providing you can time stepping off the elevator before the cord is cut.  I am trying to hedge US financial system reliance with investing in the world and alternative assets, and yes, target US companies.

This is quite a detailed video, but he is trying to communicate some of the shell games going on.

AI Investment Bubble

We have the makings of the AI investment bubble popping.  The popular news is sending out information reflecting a negative POV for AI development.   Without AI excitement, there is not much else to promote US stock market upwards.  

Inflation is crunching all US citizens, and inflation is going to be here for years.  Until US administration decides to tax the rich instead of put heaver taxes (tariffs) on the bottom 99%..   Further USA debt spending and war efforts are not abating, but the safety net for US citizens is being dismantled.  Lastly, with expulsion of cheap labor, and AI data centers demanding energy and water, food prices will continue to skyrocket.
All of this ends with US stock market going down as profits pullback.   But this time is different.

With all the negative about AI, one thing is clear to me, it will be immense efficiencies to corporations faster than the internet did.   It will be hard to capture this in a GDP number, but make no mistake, companies that can leverage AI to improve their efficiencies will be rewarded in the stock market.  

The problem is, the larger the company, the harder to actually manifest this benefit.  I expect after this drawdown an EXPLOSION of new businesses powered by AI.  People of 1-5 in a company providing the value of 20 people.  These companies can adjust much quicker than large companies.  Large companies will return to outsourcing to many small companies to get the work done.

Eventually this will massively benefit large companies.  I have huge optimism for some companies after this next downturn.  Buying general ETFs wont be a winning strategy.

Keep your ears open, the more negative AI news you hear is a signal that the bubble is popping.

The Fed and Markets

 The Fed is talking today, and in my opinion, the US government is slowly dismantling the fed behind the scenes.  I am sure the Fed is fighting it, as it tries to save the US Dollar from crushing collapse with the US president "on a whim" running the world economy on the USD policy changes via a tweet.

For today, Powell may try to placate Trump and cut rates, sending the markets soaring to new highs.  We will see if Powell caves.

Powell is right, inflation is a major concern and cutting rates won't help it.  However, keeping rates simply keeps asset rates down, and doesn't affect real inflation.  Why? Because Americans are broke.  

When they start to cut rates, the 1% will get richer, and everyone else not so much.   If Powell doesn't Trump will once he dissolves the Fed and takes total control over Fed, Congress, States, Military, police, and the courts.  Americans want a dictatorship and they will get it.

Low tide

 

I am on vacation this week, but I did find the time to dump my longs July 30th.   This should come as no surprise as my posts have been pretty negative since June.  

To me, we can have a sea of change once US government injects money into the US and global economy.  Classic US government was to inject money using the tentacles of government into lower 90% of us citizens.

Since this government is dismantling this, I expect this downturn ends with this administration taking over the independent federal reserve.   This will mark the end of any us dollar strength, as US takes the well known path of currency destruction.  Since money will not be injectable into bottom 90%, the top 1% will do very well by government financial injection.

Pensions, fixed income of retirees will be destroyed in years ahead by inflation.  The irony is baby boomers wealth lose the most, since people under 45 have almost no savings.   This will be the start of the world financial reset.   

Best we can do is try to ride the whip saw reaction as wealth tries to find a safe haven.   I will buy more bitcoin on any extreme pullback, as its the only digital asset alternative to the financial system.

I do expect some companies resisting any material pullback as money will move to safety.

We may go higher next week, but we are seeing stress emerging.  We will have material clarity in January after the car market resets, real estate market takes a dive, US sells 6 trillion in bonds, and existing wars hopefully end.  

For now 1 year us treasuries are king until they aren’t.  Good luck.

Living in a bubble

 

I live in a “bubble,” surrounded by affluent towns. The comfort and normalcy I see every day are not representative of the reality facing most Americans. The latest government spending bill slashed essential services for everyday people, gave tax breaks to the wealthy, and ballooned the national debt. It’s a policy direction that benefits the already-wealthy and leaves struggling communities even further behind—at a time when the U.S. economy is undergoing major technological disruption.

To grasp how dire things are, watch the video below. We’re not talking about a few individuals—this car dealership is surrounded by a large community  who simply cannot afford to spend $2,500 on a vehicle.

I’ve heard people say, “Just get a better job, or a second or third one.” That’s easy to say—much harder to actually do. And even if it were easy, the fact that so many Americans aren’t doing it suggests a deeper systemic problem. If we’re going to frame this as a national laziness issue (which I strongly disagree with), then it’s still a crisis—a sign we need programs that actually guide people toward economic stability.

The bottom line is: we are failing to address real suffering across this country. Instead, we find it easier to blame individuals than to create meaningful solutions. Just because your community is insulated from this reality doesn’t mean the crisis isn’t coming. Desperation will grow—and desperate people act out of necessity.

Please, have empathy. This will only get worse if we continue to ignore it. Since our government has given up on the majority, the better off must contribute voluntarily (we give ~5% post tax) —because when people are left with nothing, they will do whatever it takes to survive.

Wall St Cracks

Obviously, I need to change my YouTube subscriptions! :) Information to consider.

I disagree that the rebalance will be even HIGHER housing prices.  Instead rebalance would be lower stocks.  Housing is already going down outside the North East.

 

 And a plus for Bitcoin

 

Rug-Pull?

US dollar has been going lower, and I expect it much lower, due to US government policies.

However,  the dollar valuations doesn't go in a straight line, they rebound.
So what could cause a rebound?  This stock market bull, recently turned bearish explains one aspect.