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.

 

Future Economic Growth

Here’s an improved version of your message that maintains your critical insights while refining clarity, flow, and tone. I’ve preserved your points but made them more fluid and polished for a thoughtful, forward-looking audience:

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Long-term investing—unlike short-term trading—tends to perform well when underlying investments are fueled by economic growth. For much of modern history, population growth has been the simplest and most reliable driver of that growth. As populations expand, so too does economic output, consumption, and innovation.

However, the world is now entering uncharted territory. For the first time in human history, many nations—including the U.S.—are approaching or have fallen below replacement-level fertility, with fewer than one child per adult. Simultaneously, the U.S. is curbing both legal and illegal immigration, historically one of its strongest levers for demographic and economic vitality.

But don’t worry—we have a new lever: AI-driven productivity. In the short term (2–10 years), AI will likely fill gaps in labor force participation, enabling major efficiency gains and potentially offsetting some demographic headwinds. Productivity could jump 100% to even 1000% in certain sectors.

Yet this is not a generational solution. Like any technology, AI’s exponential gains will eventually plateau. And when it does, we’ll still face the same structural issues: fewer workers, aging populations, and flatlining demand growth.

Meanwhile, the U.S. faces a geopolitical challenge of its own making. In its effort to "rebalance global fairness," America is increasingly pursuing international policies and trade frameworks that seek win-lose outcomes—with the U.S. on the winning side. Even if these lopsided arrangements succeed in the short term, how long will the rest of the world accept them?

History provides a clear answer: Sustainable global growth requires perceived mutual benefit. Nations do not tolerate long-term disadvantage, and global systems that depend on asymmetric power tend to erode over time. Today, we’re seeing early signs of decoupling, as countries look to reduce dependency on the U.S. and pursue more equitable or self-reliant paths.

AI could accelerate this shift. Unlike past technological revolutions, AI is not confined to proprietary, walled gardens. Much of its power is openly accessible—downloadable, customizable, and deployable by any motivated government or organization. This democratization of capability means productivity leaps are no longer the exclusive domain of the West.  It also has the unfortunate side effect of dramatic reduction of being a leading world consumer as US wages on average depress.

The U.S. had a choice. It could have continued leading through trust, partnership, and innovation—quietly shaping global systems while benefiting immensely from them. Instead, by trying to secure overt advantages, it may awaken a more self-sufficient, multipolar world.

In the near term, the U.S. might surge ahead—leveraging AI, reconfiguring labor, and driving GDP and corporate profits to new heights. But once the easy gains are realized, the question remains: How will the U.S. maintain global influence and economic dominance if others no longer rely on its leadership or accept its terms?

The take away is, invest in 1-5 year growth, but depending on your investment goals hedge with world investments.  See link at top of this blog for some ideas.

Sell in July, now or later?

The story is AI is driving us into the future. I am seeing a surge of AI announcing LLM advancement peaked.  Assuming this is true, the AI bubble is about to pop, and with it the market.

Bravos Research has been a solid bull for quite a while, he decided to sell everything yesterday.

 

 30+ year trader, who is pro-Trump, and pro-market is turning bear

   

 A balanced trader is getting bearish, just not quite there yet.  Institutional selling is massive.  Corporations and citizens are stock market buyers.

 

Next leg down, and then higher?

Trump administration is pushing to relax the Supplementary Leverage Ratio (SLR), which currently forces large banks to hold 5 % capital against Treasuries (3 % baseline + 2 % GSIB buffer) instead of treating them as zero-risk assets.

This should boost demand for Treasuries amid record issuance, helping keep borrowing costs down.

Relaxing the SLR will increase banks’ liquidity. By exempting (or lowering the capital charge on) U.S. Treasuries from the Supplementary Leverage Ratio, large banks free up balance‐sheet capacity they’d otherwise have to hold in reserve. That means:

• More high-quality liquid assets count toward their liquidity buffers without eating into capital ratios.

• Greater capacity to intermediate—banks can step in as market‐makers in the Treasury market more readily, supporting trading desks and repo operations.

In plain terms, a 1 percentage‐point cut in the SLR is estimated to unlock up to $185 billion of extra capacity at the big banks, making short-term, secured financing (i.e. liquidity) more plentiful and cheaper.

This excess liquidity has to flow someplace, I don't expect a windfall of bank lending to small businesses.  I expect  liquidity finding its way to what many consider less risky assets including Bitcoin, gold, and some stocks to benefit from this liquidity injection.  The Trump administration is also cutting taxes, decreasing spending on the bottom 90% of citizens.  AI is enabling companies to have capacity increase with half their tech workers increasing corporate profits even if their topline is reduced. 

These changes will supercharge some assets and corporations.  

What we are witnessing is the final separation of the rich vs the poor, and the rich have liquidity to put money into assets. This will continue until the people require it to stop.

For me, the pivot here is to cover my shorts - again - on this next leg down, and go long less risky assets that will catch the liquidity. 

This all ends very badly, but not in 2025 once SLR is changed.  The administration is shifting the crisis to the private sector.

This videos covers some indicators of we are getting closer to the next leg down.