2025 Make It. Or Break It.

2025 has gone nothing like anyone expected. The year started off strong with Trump's inauguration in January but then instead of a Golden Age of prosperity, bulls got immediately monkey hammered by the biggest trade war since 1930. Stocks rolled over in early February and declined to the bear market (SPX -20%) lows of early April. However, then aggressive bears got whiplash by an AI melt-up which continued into the end of October. November was uncharacteristically weak as AI momentum stocks and Cryptos imploded. However, this last week of November was the strongest Thanksgiving week since November 2008. For those who don't recall, in 2008 stocks continued to decline for over three months after that rally. So that Thanksgiving rally was the last chance to get out prior to a -55% total decline.

So the trillion dollar question is - what will it bring this year?

Normally stocks are seasonally strong at this time of the year because Wall Street rigs its algos to levitate into year-end close on low volume. However, IF there is another bear market this year as there was in April, then it would be the first double bear market in the same year since the 1930s. It all comes down to the Artificial Intelligence super bubble.

Speaking of which, today happens to be the third anniversary of ChatGPT release which sparked the AI melt-up in the first place. Below we see that Bitcoin entered a "Death cross" during November, wherein the 50 dma crossed below the 200 dma. Notably, Bitcoin and all other risk assets made their low three years ago when ChatGPT was first released (Bitcoin happens to be 95% correlated to AI momentum stocks). My entire AI bubble hypothesis is that following the disastrous pandemic Tech bubble that wiped out many investors, Wall Street and Silicon Valley were desperate for another theme to build a bubble around, so they created the massive and now totally out of control AI arms race narrative around a totally unprofitable internet chat bot. Because what moron wouldn't believe that?

TechCrunch:

ChatGPT Launched Three Years Ago

“Empire of AI” author Karen Hao argued in a recent interview with TechCrunch that OpenAI has “already grown more powerful than pretty much any nation-state in the world,” and is now “rewiring our geopolitics, all of our lives.”

Tech dorks with zero social life are rewiring our entire existence. We see the future.

Consumer sentiment is ending the year at the dead lows - exactly where it was when this whole AI bubble started.

History will say that the AI super bubble accelerated the deflationary trend that began after the Global Financial Crisis - greater and greater concentration of wealth in the hands of the few to the detriment of the many.

Accompanied by ever increasing concentration of profits and market capitalization in a handful of massive Tech monopolies to the detriment of the economy.

2025 summarized:

WindowsCentral:

How Does Loss-Making Monster OpenAI Survive?

"OpenAI has made a truly staggering $1.4 trillion (with a T) in commitments for compute to meet its projected needs, despite posting a "paltry" $20 billion in revenues this annum. To put it into context, $20 billion represents just 1.43~% of that $1.4 trillion commitment. It's a truly insane gap."

It's not ideal that OpenAI's success may depend on big companies using it to replace human workers at huge scales. How will people pay for OpenAI if nobody has a job?"

That's a question for 2026.

We are now entering Fed silence week because the next (last) Fed meeting of 2025 is on December 10th. Unfortunately, due to the government shutdown the Fed has been flying blind for this entire last quarter of the year, so they have no clue what is going on with the economy. Current market odds favor another rate cut, but suffice to say it will be too little too late if the economy is already rolling over. The only consistently reliable labor market data that we've had throughout 2025 is ADP private payrolls data. Today on Twitter I showed that these past 10 months through October are the weakest since Q4 2007 which was the peak for U.S. stocks and the start of the GFC recession.

So there you have it - 2025 has been an existential year of Artificial Intelligence, ending the year with a collapsing jobs market, a clueless Fed, and an imploding asset bubble.

What's not to buy with both hands?