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The world is perfect except for the humans screwing it up. There is no cause for pessimism aside from the people around us acting irrationally because they "expect" something they won't get. Gratitude is the primary driver of happiness. These are the thoughts that keep me sane in this period of mass insanity. Unfortunately, this also means that we live in a very dangerous time in which expectations and reality are going in OPPOSITE directions. Economists are calling this the

This is week 7 of the war with Iran. Bulls predicted the war would be short. They were wrong. Not only is this war not short, but the war just escalated to include a double blockade of the Strait of Hormuz. That said, oil experts predicted that the global economy would implode by the end of April if the Hormuz remained shut. This is the middle of April and nothing has imploded so far. So who will be right in the end? The next two weeks should be decisive. In Phase 1 there was

The most bizarre aspect about this era isn't just Trump's increasingly deranged mental breakdown culminating in his threat to totally destroy Iranian civilization aka. what I call Level '11' End Times; the other bizarre aspect is how easily the mainstream business media can pretend that Trump's derangement syndrome is not an ongoing market risk factor. According to today's pundits, just like the trade war last year, this totally unexpected Iran "detour" is merely a speed bump

If you told anyone thirty years ago that the U.S. deficit would be 6% of GDP, the AI bubble would be bigger than the DotCom bubble, stock valuations would be at all time high, consumer sentiment at a 50 year low, the Strait of Hormuz is shut, the U.S. is waging an ongoing trade war against the entire world, and Donald Trump was president, anyone would think that investors would be panicking. But they're not. All of that risk can be easily swept away by simply ignoring it. The

Writing Tuesday morning March 31st, another huge short covering rally is taking place on the optimism that the war will be ending "soon". Over the past several weeks we've seen this movie at least a dozen times, however, bulls keep believing it over and over again. Trump's goal with all of his massively contradictory messages was to lull Iran into a state of complacency while he built up ground forces in the region. However, the net effect of these "hopeful" message was to ro

This marks the end of week four of the U.S./Israel war on Iran, with no end in sight. Clearly Trump totally underestimated Iran's will and ability to go toe-to-toe in an ever-escalating war, as Iran has shown no sign of capitulation. The U.S. troop build-up continues in the background as Trump attempts to intimidate Iran into surrender. Both sides are far apart in their negotiation demands, because Trump's standard negotiation tactic of "escalating to de-escalate" is backfiri

Trump has been building up troops in the Middle East in order to prepare for his Plan B ground attack. We don't know exactly where ground troops will be deployed, but the highest probability target remains Kharg Island. Nevertheless, it doesn't matter where U.S. troops land, because the market reaction will be the same: Panic, over the idea that this war could go on for several months or longer, and in the process implode the global economy. Markets know that there are only a

The consumer is imploding due to high oil prices and the Fed can't do anything about it because of high oil prices. This isn't "stagflation" as so many bulls want to believe - this is obliteration... Yesterday, we got the news that recession will be unavoidable if oil prices remain at these levels for even a few more weeks despite the fact that the U.S. has energy independence. Why? Because oil is a global commodity, therefore a supply shortfall in the rest of the world trans

The worst thing that could happen to global markets at this point in the cycle is happening right now: A late cycle surge in inflation due to a Middle East oil crisis. This is a mid-week Iran war update. My last update was Monday. What we have learned in the interim is that Iran has been preparing for this war since last June. They now believe that in a long-term war of attrition they can hold out longer than the U.S. and Israel. We know that the U.S. and Israel have inflicte

Up until now I have been focused mainly on the AI asset crash. With this post, I will focus more on the economic consequences of AI. But first an update on the rolling asset crash. Research firms have been putting out articles recently predicting industry after industry that will be "disrupted" by AI. I call it "AI panic". It started with software but has now spread like wildfire to other sectors and stocks both within Tech and other industries. The disruption within Tech has

The term "Black Swan" event was coined by Nassim Taleb in his seminal book Fooled by Randomness . The book tells the story of a novice trader who puts on a trade in a bull market that makes big money. So he puts the same trade on again, but this time with leverage. Again it works. He keeps doubling down until one day the trade explodes and he loses everything. The end. Taleb calls that a Black Swan event. I call that a Minsky Moment. Hyman Minsky had the opposite view of Tale

I don't know what's going to happen next week, but we know with 100% certainty that bullish speculators have been categorically destroyed. That's not a matter of speculation. Pundits are desperately trying to keep the sheeple from bolting out of the Casino as market volatility picks up with each passing day. So they tell the people that the bull trend is still intact - this is still a bull market. At the major index level perhaps, but below the surface breadth has been implod