Category Posts

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

Circus Donny is about to find out who is really in charge around here. In my last blog post "Now For The Main Event" , I surmised that Trump was about to begin an imminent ground invasion of Iran, based upon the escalating build-up of ground troops. That scenario is still very much on the table, however Wednesday night Trump raged in his address to the nation that he is planning to bomb Iran into the "Stone Ages". Iran has made it equally clear they will retaliate by destroyi

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 is now week four of the Iran war with no end in sight. The pattern of the war has stayed fairly consistent from the start - the U.S. and Israel pound Iran incessantly with their air superiority while Iran blocks the Strait of Hormuz with their superior tenacity. The strategic miscalculation the U.S. military made was believing that after having attacked Iran last June that they can just show up whenever they want and start carpet bombing the country without any consequen

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

"Bin Laden wanted to draw the United States into Afghanistan, which was already being called the graveyard of empires...Bin Laden caught America at a vulnerable and unfortunate moment in its history" Wright, Lawrence. The Looming Tower (p. 272). What Bin Laden started, Iran is finishing. The U.S. and Israel are attacking Iran for the second time in less than a year, which has given the Islamic regime zero incentive to stand down in another fake ceasefire. Trump has painted hi

At the Monday open in Asia global oil prices sky-rocketed to Ukraine war highs (see second graph below) and the overnight futures imploded. However by Monday afternoon in the U.S. Trump was getting worried so he declared "victory" on the war in Iran and said it would be over "soon". Markets sky-rocketed on the news and oil tanked. However, this morning (Tuesday) the IRGC stated what anyone could predict except Trump and the Wall Street Journal, which is that they have no inte

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

First, I will get the politics of this Iran fiasco out of the way before I focus on markets: This morning "Secretary of War" Pete Hegseth gave a briefing telling the American public that the U.S. is retaliating for 47 years of "one way" aggression by Iran against the United States. Nothing could be further from the truth. Iran has never attacked the U.S. on its own soil. Whereas the U.S. has attacked Iran twice just in the past year. In addition, the U.S. funded the Iraqi pro

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

It's clear that we are heading for a meltdown of a biblical magnitude. When I say "clear" I mean totally unforeseen by the Terminal Idiocracy. As the chart below shows, entering the last week of February, global stocks (incl. U.S.) have been up 10 months in a row since the trade war lows in April. This is the longest monthly win streak since the Y2K lows of 2003 at the onset of the Iraq war. As of this writing, everyone KNOWS that war with Iran is inevitable and yet unlike th

Two weeks ago I enumerated the various risks coalescing in markets - which culminated in a global mini crash led down by Cryptos and Metals. Subsequently markets bounced, and subsequently risks have grown, along with complacency... The climax low was on Friday February 6th and has been followed by a global relief rally leading into Asian New Year this week. The various risks I listed were as follows below, just prior to the relief rally. Pundits are of the belief that these r