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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

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

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

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