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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

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

First re-iterate the risks from the last blog post : $7 Trillion metals collapse BofA Sell signal @Max Bullish Bitcoin/Crypto collapse Rotation to recession Tech Implosion ex-AI Collapsing Economy Now we add to those risks the collapse of the leading AI stocks including Google, Sandisk, Western Digital, Seagate, KLA Tencor, Lam Research, Micron et al. As of this writing the VIX is above 20 and the Tech sector is at critical support. After hours, Amazon just raised their capex

Due to 15 years of serial monetary bailouts, "buy and hold" has become an unquestioned religion. No amount of risk could get investors to sell. Therefore, the bull case and the bear case are now the same. Only the expected outcome is vastly different. On the institutional side, only history's biggest con man could convince so many hedge funds to onboard record risk exposure in the face of record risk... Bulls contend that Trump-o-Nomics is highly bullish and will lead to a bo

Trump landed at Davos overnight and proceeded to tell European leaders that the U.S. is a newfound nirvana and Europe is doing everything wrong. Only someone who has never stepped foot out of the U.S. could believe that - which by coincidence happens to be Trump's entire MAGA base. Business leaders in Europe agree with Trump that the U.S. is a much better place to invest because it has a far greater divergence of wealth than Europe. Far friendlier business practices, and far

Davos of course is the name of the Swiss village where the annual summit of global CEOs and ultra-wealthy elite takes place each January. It's at Davos that global "planners" - of whatever we call this imploding global economic model - assemble to plan out the year ahead. Trump was the first harbinger of global disintegration in 2016 but this second term strategy is even more disruptive to the globalized model. Ironically he is attending a confab that he is actively imploding

Fortunately we don't have to pretend that the Arsenal of Democracy is any such thing anymore. That patina of civility has been shattered. The two countries Trump has already attacked in the past year are among the top four oil reserve nations, and the country with the fourth largest oil reserves (Canada) Trump has threatened to turn into the 51st state on several occasions. Next on the list we can add Greenland to the mix of resource-rich countries that Trump has threatened t

What follows is a market summary of 2025: Consumer sentiment is at a 50 year low. The jobs market is imploding at the fastest pace since 2008. NDFI shadow loans are larger than subprime. The AI Ponzi bubble has peaked. Stocks are record over-valued. Households are record long stocks. Gold is soaring on inflation concerns. BofA is on a sell signal. And yet, pundits are sanguine going into 2026. Therefore it falls on us to ask, what could go wrong? Over the past 15 years, globa

Chaos reigns. Full stop. Never before in our lifetimes have we been confronted with so much mass media confusion coming at us from every direction. Granted, you could have said the same thing for the past 20 years because the problem has only grown far more acute over time, now further weaponized by existential AI over-investment. Into this maelstrom of confusion add the Joker Trump who is master of the ludicrous over-statement and self-congratulatory hyperbole which has crea

It's that time of year when Wall Street pundits gaze into their Magic 8 ball and goalseek the exact level of GDP, earnings, and stock prices for the year ahead. Personally, I will not attempt voodoo to guess the exact level of unknowable future economic and financial metrics, I will merely predict that all of Wall Street's predictions will be off by a minus sign. And that their predictions will implode before the end of January. Google Gemini: "Wall Street analysts largely pr