Strap in, the market may have an uncontrollable epic parabolic move up, with a terminating event.
Long the market should be excellent, providing you can get off at the right level.
If we end above S&P500 666 today, there is really no reason for the market to go down until everyone is in, with full saturation of buyers.
The Federal Reserve under Greenspan in the 90's made a fatal mistake. He signaled the Federal Reserve moved from stability to helping the economy. Most people see nothing wrong with the Federal Reserve helping the economy. But in a capitalist society, and wanting to avoid government intervention into the public sector, the Federal Reserve should have maintained its disposition. Once he lent a helping hand, politicians and the public switched to view the Fed is the driver of the economy.
This lead to politicians not being accountable for the economy, and to point to the Fed. Stock market, Bond rates, asset processes are suppose to reflect the economy health as signals to politicians. Then Politicians adjust policy and lead the country forward.
Leadership is hard, easier to ask someone else to kick the can. That has landed us to today.
At some point, can kicking won't work. There IS one exception to this view, if the economic model changes. AI has the potential to be so impactful the economic rules I am viewing no longer apply.
Until AI has invaded the economy sufficiently, the older economic model is the guide.
There IS the possibility that the can kicking is sufficient to switch to a newer AI economic model, though I give this a low probability mainly due to multi-front resource constraints.
To me, Ray Dalio is the most articulate of the future view excluding AI rewriting the economic model. And I completely agree we must suffer in the USA and UK economically to force change. This will happen when the fed tries to kick the can, and it can't.
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.
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 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.
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.
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.
