Category Posts

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

I had to take some time off of posting on Twitter because my mind had melted down at the amount of bullshit streaming out of the Trump Administration regarding this ONGOING Iran clusterfuck. Trump's latest demands that the world now clean up the gargantuan mess that he made would make a petulant three year old blush. But I don't want to go down the rabbit hole of wartime propaganda again. So below I will focus on markets: Despite the obvious risks, Wall Street pundits remain

"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

This is an update on the Iran war and markets at the end of the first week of the war. Picking up where we left off mid-week - having killed Iran's religious leader Trump is now demanding unconditional surrender of the Islamist regime. Therefore this coming week Iran's religious warriors will all lay down their arms and become insurance salesmen. And if you believe that, then you've been watching Faux News for too long and your brain is imploded. This is all deja vu of Operat

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

It started with software stocks a few weeks ago - investor panic over the idea that AI was about to make software development companies obsolete. Then last week the selloff spread to the hyperscalers and their "existential" level of over-spending. All of their available cash flow plus additional borrowing is getting thrown at AI and markets are not happy, however they keep increasing their spending anyways. Amazon and Google were the most recent companies taken to the woodshe

Many bull pundits are now pointing to the Dow as confirmation that the Moron Bubble is NOT over. However, I suggest that it will not pay to wait for consensus confirmation for when this bubble ends. In an Idiocracy there is no strength in numbers. Bubbles burst when investors allocate capital to unprofitable sectors based upon pure speculation and non-financial growth metrics such as "daily user count". In Y2K the well known unprofitable stocks were the Dotcom internet compan