The Golden Age of Bull Shit
What we are witnessing is the largest SCAM in history packaged up and sold as the "Golden Age" by Trump, Wall Street, and Silicon Valley. It's a tale of two economies - one for the ultra wealthy and their existential AI bubble, and one for everyone else.
Never before have we seen such a massive and lethal divergence between economic fantasy and reality.
Let's begin with the fact that 2026 will be by far Wall Street and Silicon Valley's largest bonanza in history with respect to total debt and equity issuance to fund AI. The SpaceX IPO back in June was the largest IPO in history but the impending Anthropic IPO will be as large or larger in terms of valuation ($2t) and stock issuance $100 billion.
As we see in the chart below, when Anthropic goes public, IPO proceeds raised for all of 2026 will dwarf the prior record set during the pandemic in 2021. Despite the fact that global central banks are ALREADY tightening. Back in the pandemic, the tightening came AFTER the big IPO bonanza.
Needless to say Wall Street's conflict of interest has never been higher. Last week, Morgan Stanley raised their S&P price target for 2026 to 8,000 and 8,500 by June 2027. Today we learned that Morgan Stanley along with Goldman Sachs are the lead co-underwriters for the Anthropic mega IPO. Go figure.
As we see in the chart below, the AI bubble is already imploding, but Wall Street can't resist dumping MORE issuance into a collapsing market, while telling retail investors to keep buying. After all, someone has to buy up all of this new stock issuance:
"Michael Burry, Seth Klarman, Jeremy Grantham, Ray Dalio and now Ken Griffin have all raised concerns about speculative excess, but judging by where retail investors are putting their money, nobody appears particularly eager to head for the exits"
According to the American Association of Individual Investors, equities now account for 71.8% of retail portfolios, a level barely seen since the dot-com bubble burst in 2000. The only recent brush with similar enthusiasm came in late 2017, when allocations briefly touched 72%, just ahead of the infamous Volmageddon volatility shock"
There have already been two bear markets in the AI momentum sector in the past three years. However, as we see, this was the largest spike in the entire rally, therefore the downside will be symmetrical, and the speculative excesses will be margined out of existence.
In other words, Wall Street's window of opportunity is QUICKLY closing.
What is the most shocking however, is that all we hear about constantly are the RISKS of AI. So far, we have seen ZERO economic benefits from AI:
In summary, investors are allocating insane amounts of capital to a bubble that is a KNOWN threat to financial markets. To the economy. To the environment. And to humanity. In the meantime, it's already imploding the middle class.
Therefore, what's coming next will be an extreme shock to younger generations who have never been through a real bear market. Given the chasmic wealth divergence, there will be no "socialist" bailout for capitalism this time around.
So this event will start off with extreme deflation, as the largest asset bubble in history deleverages.
What happens after that is subject to the political vicissitudes of this 1930s-like era.
But don't take my word for it:
