Street Analysis

The Federal Reserve is Cooked…so is Stock Market and the President

October 27, 2026

We had been enjoying the ever-declining interest rates for the previous four decades starting with early 1980s thru early 2020s. Thanks to many macro factors such as globalization led by the life changing technologies of computerization, Internet and finally the mobile phone revolution.

Even more importantly, it was the Federal Reserve, central bank for the U.S. that artificially suppressed the interest rates since the Great Financial Crisis (GFC) in 2008. Effectively, it was a creation and/or the byproduct of low interest policy in prior decades that triggered the dot com mania in late 1990s and housing mania in early 2000s only for an eventual crash in both instances.

In the post GFC world, most major central banks all over the world including the U.S. have moved onto even more dangerous game of ZIRP (Zero Interest Rate Policy) or “near ZIRP” under the more benign name or disguise of Quantitative Easing (QE), which is nothing but the money printing in layman’s terms. Keep printing, baby! Keep inflating and devaluing the currency!

Thank God, we never saw the ‘negative’ interest rates in this great country of the United States, lunatic policy that is so “hard-to-believe” that it can even exist on this mother earth. It is like you have to pay me if I borrow from you – not the other way around. How crazier it can get than that?

Negative interest rates were not uncommon in certain parts of the Europe and of course our key ally or shall I say “partner-in-crime” – Japan. We scratched Japan’s back and they did ours. Both “happily” enjoyed the journey of going downhill from the societal perspective. Only more to come or shall I say rather worse to come?

Well, the time has come to pay the piper. The irrefutable ‘Law of Karma’ spares no one – no individual or country, the organism that is nothing but the group of individuals can get away from it.

What all this non-sense has meant is simply this: Bread (and butter) for billionaires and the crumbs for the rest of us in the so-called democracy. More apt name is aristocracy.

Europe as a continent is seeing a tremendous amount of unrest in various countries for the cost of living and affordability reasons or rather crisis. Japan is like a frog in a water pot that is gradually boiling and does not even notice or realize the pain yet after four decades of stagnation led by the same issue that we are about to see here at home. Japan is simply a leading indicator for us. What they have witnessed in the last few decades, we are starting to see it now in a more pronounced way.

The U.S. has seen the unrest in its own unique ways, as always, though, not with a greater and better awareness. Unfortunately, rather, it is with a major lapse in its judgment, by electing the most unqualified person ever, Donald J. Trump, in the history of the United States and awarding him the highest and most powerful seat in the world to such an unworthy person. Unknowingly out of our ignorance, our populace began the downward trend in 2016 by making someone the U.S. President who had been known for multiple corporate bankruptcies and countless character allegations from all aspects of life including someone who disrespected even Pope.

Then the awareness in public rose to the respectable level in 2020 presidential election to give him stunning defeat that the megalomaniac, delusional, grand-liar still has a hard time to accept. Had it not been a big screw-up of COVID-19 handling by the incompetent fellow then he may have been elected once again. That would not have been a big surprise.

Oh, well, the public slid once again post 2016 lapse and brought him back to the power with 2024 presidential election only to their chagrin and now populace seems to realize it more and more to strip him and his cronies of the unchecked power with the upcoming midterm elections.

As majority of the people know by now, the second term is nothing short of a total disaster or catastrophe that no one wanted to see and few realized, especially in the Republican tent. The list is long by miscreant starting with the tariff shock to immigration snafus to government agencies’ deformities to major tax cuts for rich and privileged and now unprovoked war with Iran – every action leading up to more and more inflation and affordability issues let alone soul-kicking injuries to heart of America.

The damage is unfathomable to the set of values that America and most Americans hold. It was all owing to a few in power.

Democrats had a better understanding of the situation and the independents held the best of all assessments of an impending disaster. Yet, most of us felt powerless while holding the power of voting. In a two-party political system, it is unfortunate that everyone is forced to choose the “lesser of the two evils” when it comes to picking our “so-called leaders”.

However, as mentioned in the post published last month on September 17, 2026, I am truly encouraged and optimistic to believe that 2025 likely marked the bottom for our greatly declining democracy: Finally…the Federal Reserve does the Right Thing…

Or so I hope, at least that the American values will rise again.

We can now look to better and wise actions by our populace and eventually the leaders in Congress. The midterm elections are approaching and we can look for some meaningful changes to challenge the chaos and corruption by the “criminal and cruel gang”, not just “white-collar” criminals, in its most apt or accurate terms.

It is all relative, by the way. Our Congress is always paralyzed by design and will likely remain so for the foreseeable future or until we hit the major crisis once again like GFC. Yet, we do expect them to deliver certain things at a minimum for the American people.

The Federal Reserve should raise the interest rate once again in a meeting this week. However, in all likelihood, they will not, given the constant pressure from the presidential administration. When it comes to the Fed – ‘Should vs. Would’ is always a big thing. They ‘should’ does not mean that they ‘would’. They will quietly raise the rates just before Christmas time and avoid the fallout prior to the election even though the inflation is brooding at both the consumer and wholesale level.

Fed is in the box as we had commented last year in the following post on September 17, 2025 and it continues to be “boxed in”: Stagflation & Misery Index: Fed-In-The-Box – What Fed would do vs. should do. It is interesting that both posts about the Fed share the exact same date – just one year apart.

Bond market is getting ‘healthier’ again after having been heavily manipulated over the course of last several decades as the ‘bond vigilantes’ finally are awakening from their deep slumber and ‘demand’ better (read higher) rates. Enough stealing from the grandpa’s and grandma’s accounts to do a massive wealth transfer from poor, retirees and middle-class to the rich and powerful.

Stock market is cratering already. It is the beginning of an end already. Artificial Intelligence (AI) trade is getting out of fashion a little by little. One trade at a time. Before we know it, people will start wondering why did I do that? They always do the same act. Some people never learn from the past or history. As they say, history never repeats, but always rhymes.

Investors heavily invested in expensive stocks, namely, technology or AI are bound to suffer the most damage out of sheer greed as they are sitting out to squeeze every last penny before they come out of the trades. Guess what, before they fathom the eventual reality, it will be too late. Walmart (WMT) and Micron (MU) have been booted out of the trillionaire club already for an eternity. More members are on the way out such as Tesla (TSLA), SpaceX (SPCX) and Eli Lilly (LLY).

Potential merger between Tesla and SpaceX is only to keep the façade of a trillion-dollar valuation and keep fleecing ordinary Americans.

Add to the list of tragic items from the “miscarriage of capitalism” – now Anthropic is going public soon near $2 trillion valuation to fleece ordinary Americans even more while the market is still hot. Strike the iron while it is hot and before it gets too late. No matter that the losses are just as staggering in billions as revenues. You never know what is going to happen next year.

OpenAI, sadly speaking, to the management disappointment, is going to be left out of the party of going public and fleece Americans…at least for now. SpaceX was the wisest of all three to go public first back in June at the wildest valuation one can imagine. Was it the wisest or the most criminal? Clearly, the latter is more fitting. Now, the turn is for Anthropic to do the same – second in a line – fleece the public. OpenAI at least will not be guilty of that charge.

Enough of trillion-dollar companies that do not deserve such valuations – the worst of the pack being Tesla, SpaceX and now Anthropic.

Mr. President and his criminal gang is about to get booted out by in droves with these midterms. Or we hope so, at least. And they are panicking for sure. We are encouraged to see that it already is happening a little by little. Thanks to certain brave souls and the courageous media that is taking on these bad actors.

It is the same media that has been called the ‘fake’ media since 2016, for a reason, by the biggest hypocrites, the pack that is led by one of the worst criminals in the world, to serve their agenda and self-serving interests and propaganda. In fact, the very first time, frankly, I heard the term ‘fake’ media is from our master propagandist when he started campaigning heavily back in 2016. The rest is history as most of us are well aware.
Investment Legend, Warren Buffett, Retires and Market Scales Another Peak of Insanity: SpaceX Followed by AMD Now for Trillion-Dollar Market Cap

September 22, 2026

The investment legend, Warren Buffett, officially retired as of this week by relinquishing his title of Chairman of Berkshire Hathaway after stepping down from the Chief Executive Officer (CEO) role earlier on January 1. His timing could not have been more perfect as he often excels in everything that he does.

Of course, he has seen it all and it is not the “market madness” that is causing him to leave. It is as simple as his age demanding it. He turned 96 on August 30. He must have felt that ‘enough is enough’. The fact that he continued till this ripe age in itself is quite astonishing. Most people would not. Only a man of mettle like him can.

Advanced Micro Devices (AMD) reached the new all-time high yesterday and hit the market cap of a trillion dollars. I had been waiting for sometime now that how come it has not happened yet in the midst of all market craziness. It finally did!

Another feather in the cap of the “Mr. Market” gone mad! So sad!!

That, too, after having witnessed couple odd things pertaining to SpaceX (SPCX):

1) Company going public back in June so prematurely

2) Valuation of a multi-trillion-dollars and

3) Inclusion of a security in major market indices only to help decimate many portfolios in not-so-distant future.

What bigger evidence than that one would want in today’s world gone crazy, especially in “good ole’ USA” and we are not going to the highest political office in America at this time.

I have been rooting for the markets to “stop” its madness for a little over 3 years now or since the summer of 2023. Quite foolish of me! As a great economist and capitalist, John Maynard Keynes, said that the “Markets can remain irrational longer than you can remain solvent”. I have learned this lesson once again – second time and probably the last time – first after the dot com mania and secondly this time after about 25 years.

The exclusive club of trillion-dollar market cap now boasts 12 companies for its much-coveted membership with AMD being the latest entrant yesterday.

The old adage of “easy come, easy go” saying will eventually apply to these “unstable, weak or undeserving” members such as AMD, Micron (MU) and Tesla (TSLA) and most likely Eli Lilly (LLY), the odd ball in a tech-crazy world just as it kicked-out Walmart (WMT) after a ‘fling’ for brief period.

Insanity surrounding AMD is just as astounding as it sells now at the price-to-sales ratio of 24 over 18 for the market behemoth Nvidia (NVDA) and Artificial Intelligence (AI) darling for quite some time now. Oh, well, it all began with Nvidia and it would not be too surprising if it all ends with AMD and Micron creating a classic ‘top’ for the market. I am anxiously waiting for the sane heads to prevail once again in the very market, my beloved, that they have hijacked.

This is all while many great companies or rather opportunities are available at insanely low or attractive valuations including some tech companies, more specifically in the software space depicting quite a dichotomy of the market. Generally, everything is high or everything is depressed in the market given the mood of Mr. Market. However, that is not the case this time around. It is a roaring bull market for some securities while equally depressing and outright disgusting bear market for some. Extreme bipolar personality of Mr. Market at its worst is on display for some time now and that feels like an understatement.

Moral compass of institutional investor class as a whole is downright appalling driven by extreme greed and fear to the detriment of ordinary investors as well as average American who does not even invest in the market or having no slice of the proverbial American Apple pie (American Dream).

Avarice of this level comes at a huge cost for the society to say the least. No wonder Warren Buffett always lived and still lives in Nebraska, far, far away from a typical Wall Street hustle and bustle. Hence, his quote is so apt that without integrity, presence of intelligence and energy do not matter.

We must brace for and be well prepared for an ugly, very ugly aftermath of this madness of a “few” on the Wall Street. The entire society and country will suffer in a major way, just as it did in the aftermath of the Great Financial Crisis (GFC) of 2008 created by the avarice of a few.

History is about to repeat once again as it always does, only much worse, as this a mother of all bubbles surpassing of all prior ones in terms of its magnitude and vastness alike. Wishing you the best!
Finally…the Federal Reserve does the Right Thing…

September 17, 2026

Source: tradingeconomics.com

Yesterday, the Federal Reserve (Fed) decided to hike the interest rate by a quarter percent in light of the elevated inflation level. Even more importantly, it decided to do it unanimously, which means that the two minions, including the Fed Chair, installed by the biggest bully and evil of the world also finally came to the realization and truly served the country by focusing on what matters to the ordinary people for the long run, not just the elite class.

Inflation does not erode much the ‘ability’ or value of the assets held by well-heeled investors, however, for the ordinary Joe’s, it is their day-to-day living that is significantly hampered by the ‘claws’ of inflation.

The rise in the interest rates came after about 3 years when the Fed left their job ‘unfinished’ by not raising the rates enough and furthermore, cutting it in 2024 and 2025 aggravating the inflation issue even more. The entire situation got worsened by two catastrophic decisions made by the ‘inept’ presidential administration or we must say the most ‘dangerous and harmful’ man of the century after Adolf Hitler.

First catastrophic decision was to pursue the wrong-headed strategy, against the advice of all major economists and plain common sense, of instituting tariffs on most every nation in this giant and interconnected world including our allies that was announced on the so called ‘Liberation Day’ in April 2, 2025. Of course, the naming it as such was the height of hypocrisy just as the entire ‘conservative’ establishment is or much more than their ‘liberal’ counterpart.

That was followed by another catastrophic decision to fight a unilateral war with Iran that began on February 28, 2026 and still goes on after almost 7 months with no end in sight.

Thank God and many thanks to our Supreme Court including brave conservative judges that struck out the tariff ruling and situation was brought under control. However, the war with Iran still rages on with the Congress that is coward, corrupt and paralyzed as always with no real leaders that are truly ready to serve the country.

The good news, in my view, is that the 2025 marked as the true bottom for our democracy in decline that was brought to its heel almost ready to die with sheer hopelessness. The year that marked the beginning of the second term of the ‘evil empire’ led by the ‘Evil Commander-in-Chief’ that literally started wreaking havoc on the ordinary people and even throughout the world for that matter. It is no less than waging a war on its own people – America itself and innocents of the world.

Finally, the best of the mankind started showing up as more and more evil acts started to affect greater number of people in this great country and even the world.

Let us be ‘realistic’. We still have a long way to go; however, I feel better and ‘hopeful’ now that America will ‘eventually’ do the right thing, albeit at a very high cost. We already have paid enough and will continue to pay more for the misdeeds that we have done, though, there is no getting away from the ‘Law of Karma’. Everyone must pay his or her dues – individually and as a country.

The reason that I stopped writing, at least momentarily, after May 27^th post is that there is so much negativity all around so what is the point of keep writing negative piece one after another? There has to be enough “light” to talk about and if all we see is “darkness” all around then it defeats the purpose.

On the financial markets front, the 10-year treasury yield hit 5% yesterday, rightly so, though, an ominous sign of things to come. Similarly, the housing market continues to plumb new depths such as the lowest housing ‘turnover’ in over 3 decades. Over 3 decades!! Talk about the affordability issue.

On the crazy dizzying level of the stock market, one more casualty has occurred from the trillion-dollar market club. Eli Lilly (ELY) teeters at the edge of the exclusive club – on again and off again. A good example will be the ‘homage’ paid by Walmart (WMT) by being a member of this most coveted club for the time-being. Micron (MU) is the next casualty to be followed by Tesla (TSLA). Keep watching, though, we cannot hold our breath given the fact that market craziness still continues.

Much more has happened in the preceding few months since we wrote the last piece such as SpaceX (SPCX) going public at a multi-trillion-dollar valuation, the most flagrant example of completely lost fabric of America’s institutionalized systems of controls, checks and balances. There is not a greater example than that for fleecing America and its magnitude. Lawlessness has not only infected the highest seat of the world, The White House, though, other parts associated with that as well, namely Wall Street.
Limitless Greed & Sign of Times: Micron’s Entry into the Exclusive Trillion Dollar Market Cap Club

May 27, 2026

Micron (MU), a memory chip maker in the commodity, low margin business hit the trillion-dollar market cap yesterday joining the other 10 companies in the exclusive club. Thanks to a massive expansion of about 5 times increase in its price to sales ratio, from about 3, the median over the last decade to about 15 now. That brings the price increase of about 10x from the 52-week low of $92 to about $956 now, all in short 12 months.

Micron’s entry into an exclusive trillion-dollar market cap of about 10 companies is owed to the Wall Street frenzy fueled by the “rogue” sell-side analyst call with wild prediction of the Micron share price to $1600. It created a massive increase of $200 billion in market cap in just one day and catapulted the company in this exclusive club yesterday. Remember the equally wild prediction of $1,000 in the share price of Amazon (AMZN) back in 1999? The rest is history.

If the Federal Reserve (Fed) was not as “impotent and incapacitated” as it is today and truly independent then it would have started to raise the interest rates long ago especially in the wake of Iran war and resultant inflation that is already brewing in a material way on top of the pre-existing “sticky” inflation with the core CPI (consumer price index) well in excess of targeted 2% inflation for the last several years. Total or headline inflation is not too far from 4% for quite some time. Speculative mania is only a cherry on the top for the responsible Fed to act. However, “responsibility” is quite a foreign concept to the current Fed.

Fed of the past raised the interest rates steadily at the peak of the dot-com mania starting in summer of 1999 thru May 2000 and that did the trick to burst the bubble of late 1990s. The most speculative market index of all – NASDAQ hit 5,048 level in early 2000 only to crash by about 70%. It took good 15 years for NASDAQ to recover to its previous height and surpass 5,000 mark again. Yes, you read that right. It took 15 years to reclaim the same milestone – from March 10, 2000 to April 23, 2015 to get to over 5,000 level again.

See the “responsible” Fed rate hikes listed below to help “tame” the beast!

Source: Forbes Advisor

Current Fed is not “about to lose” independence. It “already has lost” its independence given the incessant pressure by the “The Biggest Bully” of the world on the Fed. That is the biggest bully sitting at the highest seat of the world… just a pure “evil” that “blind” populace of America is not able to see, unfortunately. In fact, the highest office on this land is not of the “Commander-in-Chief” to the prosperity, rather, it is occupied by the “CDO or Chief Destruction Officer”, not “CEO – Chief Executive Officer” who can take America to the greater heights. Instead, he will take America into the abyss of despair.

U.S. stock market of today is not a stock market anymore, rather it is a casino where the odds are rigged in the favor of the house.

Institutional investors are not truly investors anymore, they are “gamblers” betting like there is no tomorrow and having an “orgy” with other people’s money including 401(k) and retirement money pools for many ordinary Americans.

Bond vigilantes are in the hiding in a plain sight and just as “impotent” as the Fed is watching this “silly” game of “stock investors” silently.

If America is capable of electing a “moron” and evil president then clearly, it is fully capable of destroying itself. There is no doubt about it. It is unfortunate that the president still has a big sway onto the Republican party that has already destroyed itself. It became amply evident with the loss of his adversaries in recent primaries, namely Sen. Bill Cassidy, Rep. Thomas Massie and now Sen. John Cornyn.

Sane Republican party voices are getting squashed as the party has been taken over by the evil. Only a true “exorcism” can save the party from being possessed by the evil spirits, however, hoping for that in a very near future is like “day-dreaming”, a futile exercise.

This only goes to show how our culture has “devolved” instead of having to “evolve” – a responsibility of every human being. A beacon of hope that was this country is turning into an utter despair and full of pain to see utterly corrupt and evil acts of this presidential administration in broad daylight as the “fools and masses of ignorant” are being taken for the ride to the detriment of our country.

It is beyond belief that we are capable of “manufacturing” a crisis of this proportion. So, when the Armageddon hits there will be no place to hide. By the time all the dust settles, there would have been so much destruction all around that we cannot even imagine. It is beyond fathom. The Great Financial Crisis (GFC) of 2008 driven by equally insane housing market back then will pale in comparison. This is not just our view, however, echoed by many great minds and thinkers that we shall respect for our own benefit.
Three Drunken Sailors Hit Three Icebergs Sinking Titanic of USA

May 16, 2026

10 Year treasury rate spiked to 4.6% yesterday and 30-year bond to 5.13%, close to a 20-year high. Is it a sign of times?

In the “normal” times, if we even “dare” to imagine such times, these rates could be 2% higher or upward of 6%. Easily. That is how the business world works and government is supposedly, too, to a fair degree. However, we know all too well that we do not live in “normal” times anymore.

We are anxiously heading to “bankrupting” our country. In absence of the “disaster inviting” president, America would have “likely” gone bankrupt in about 10 to 20 years in a “slow motion” fashion due to unfunded liabilities of Social Security and Medicare, two biggest entitlement programs.

However, with the utterly incompetent president of the country that is in decline for quite some time, we are heading fast towards the disaster. The end is near. America elected a “perfect guy” with an “uncanny pedigree” in bankruptcy to fail and bankrupt our nation. He will only make it faster for us and more painful than otherwise it would have been. Welcome to the new world!

In all, enough damage has been done already to our nation by 3 drunken sailors hitting 3 disastrous icebergs. It is about time we start reckoning.

Three drunken sailors are President of the United States (POTUS), The Federal Reserve (Fed) and Stock market which have already hit three catastrophic icebergs – deficit, tariff and Iran war. These three “man-made” accidents are bound to sink the Titanic of USA into oblivion – a very unpleasant situation.

Bonus part is that the international reputation for the US is already in tatters that can take decades, not years, to restore, if we are willing. We have become a laughing stock for the entire world as many of us cannot recognize is this the same America that we have known for so long.

Clearly, the “bond vigilantes” are not “smart and wise” enough to jack up the rates high enough and fast enough only to recognize at some point later by when much of the damage would have been done already and the monumental cost would have been borne by the “innocent” masses or shall we say “ignorant masses” who allowed all this nonsense to happen?

If these “bond vigilantes” were doing their job properly then truly the interest rates would have been much higher given the “State of the Union” and helped keep the “bad actors” in line or somewhat of a control. Instead, they gave them a free reign to do whatever they wanted. Hence, the heavy price to pay at some point by continuing to kick the can down the road.

In summary, we are well on our way to bankrupting our nation at a faster rate – as fast as we can. As opposed to slowing down the pace, we are quickening our pace to the disaster.

Back in November of 2025, we published the following post and since then, for about 6 months, all the things that matter to all ordinary citizens have continued to get only worse, not better: Fed & POTUS in the Box: Trouble Ahead & Time to Buckle Up

Here is our short synopsis on the icebergs and drunken sailors who are very apt at hitting these icebergs.

Iceberg # 1 – Budget Deficit:

Persistently running 5-6% annual deficit for our federal budget has been a norm, not an exception for our financially incompetent president – be it his first term or second. Federal debt at $39 trillion with the annual deficit approaching $2 trillion is nothing but a recipe for the disaster.

By the way, we have not even touched upon another half a trillion-dollar requested increase in the defense spending – from close to one trillion to one and a half. As mentioned in an earlier post, the interest cost alone will approach a trillion and half in no time that is sitting comfortably at a trillion dollars at this time.

Iceberg # 2 – Tariffs:

We hit the iceberg of tariffs in 2025 by our “Supremely Incompetent Drunken Sailor” and Supreme Court helped tremendously to divert the sinking ship away from the iceberg. However, it is little too late and the damage has already been done.

Nevertheless, kudos to the Supreme Court for doing the “right thing” to “save” our country to the best of its ability, especially, the conservative judges, who voted with the “minority” liberal judges to make it happen and still continue to get the barrage of insults from our “evil” president.

Iceberg # 3 – Iran War:

As if the self-inflicted wound of tariff from 2025 was not enough, our “delusional” president took on a new evil undertaking of going to war with Iran, precisely at the wrong time and when we can least afford it and especially when it was unprovoked. No wonder, we continue to refer him as a “suicidal” individual given his “lunatic” actions while sitting at the highest office of the land that is supposedly the most powerful on this earth.

Drunken Sailor # 1 – POTUS:

Do we need to say much about this?

Drunken Sailor # 2 – The Fed:

As for the Federal Reserve being a drunken sailor, enough has been implicitly understood by many people, though, not enough has been stated explicitly. In essence, they are a complicit to creating the Iceberg # 1 of budget deficits by means of funding it only compounded by financial engineering and all money maneuvers to keep the interest rates low to create the biggest heist in the history of a mankind and “steal” from the ordinary individuals. A thieve in disguise.

That is a wealth transfer form the “poor and average man” to the “wealthy elites” and financial institutions. Essentially, it is the Fed that “robbed” the poor men and retirees to “fatten” the wallet of the riches as if they do not have enough wealth.

Drunken Sailor # 3 – Stock Market:

Yes, when we say that stock market is the culprit here, it is in fact, the “fundamentals and reason blind” investors – both professionals and individuals alike who do not seem to care or give a hoot for what tomorrow may hold and what our children and grandchildren may face. Their mantra is pretty clear and simple – keep drinking the same “cool-aid” and forget about how bad the hangover or resultant pain will be after getting much drunk or how much they may cause to others including their own.

In a last week’s post, we covered about the valuations using the Buffett indicator and CAPE ratio, none of which seem to matter to these drunkards. Sky is the limit for them, not any “other worldly” limit. We can only wish them the luck.

The sad part is the everyone will have to price for the “foolish” deeds of many and “evil” deeds of a few. Folks have started to pay the price already and anyone denying that effect is clearly not an “average” man.

It took a while to sink the giant ship as Titanic over 100 years ago or in 1912 – just about 3 hours. For the Titanic of USA to sink, our drunken sailor may take equivalent of one month, one quarter or even one year for each hour of Titanic sinking time. Meaning, it could be 3 months, 3 quarters or 3 years based on this simple analogy. Where exactly we are on this journey is anyone’s guess. God bless America.

Ticking Time Bomb & Time to Hide in a Bunker (Yet Another Reminder!)

May 9, 2026

We have been warning for quite some time now that the market is completely unhinged and may explode anytime and enter into a full-blown crisis mode. In fact, it is a ticking time bomb that can implode anytime at first followed by explosion in the real economy.

The irony of it all is that the beneficiaries of the current market excesses are few privileged ones, i.e. the Wall Street types, not the Main Street types or the “Real Economy”. However, the explosion or the real effect of this implosion shall be felt by the real economy. In fact, they are all being felt already in way of high inflation.

“Privatize the profits and subsidize the losses” has always been the mantra of the elites driven by the Wall Street and the masses of ignorants are happy to oblige, unfortunately.

We just do not know the exact timing of when the implosion occurs. Yet, it continues to feel that we are eerily close to it. It is not a question of “if”, rather, it is a question of “when” – which is frankly anyone’s guess. However, that does not mean that we shall not prepare for such a dire situation. We must diligently do that in order to keep our portfolios in a fair health…or else, our portfolio can implode as well, which we rather not see.

Major stock market indices are completely out-of-control by ‘reckless’ acts from both fronts – the fiscal as well as monetary policies. Clearly, ‘people’ are to blame as well since they act like there is no tomorrow. Investors are not “true investors”, rather many of them, especially the ones that do matter, such as professional or institutional investors, have turned into gamblers, not just even speculators without any regard to the valuations, especially as they “play” with other people’s money.

As a result, we have culled the list of the candidates that are prone to implosion now. In our previous post, we covered the stocks that are down significantly from their peak already and this is only the beginning. Worse is yet to come.

Major indices are in an outright danger territory. See below as illustrated by two indicators – CAPE Shiller PE ratio (10 year average price-to-earnings ratio) and The Buffett indicator – market cap to GDP ratio.

Source: Shiller PE Site

Source: LongTerm Trends Site

Picture is worth the thousand words! And if one picture tells the whole story then it will be either of the above two! Take your pick!!

Using a criterion of modestly high to “nose bleeding” valuations such as price to sales (PTS) ratio of over 7 and market cap in excess of $100 billion, here are the stocks that made the list of “ticking time bombs” – 43 of them sorted in the order of high to low PTS. See the list below.

Company name	Ticker	Mktcap	Price	PTS	Down%	% Chge. 52 week	GM 3YA
Palantir Technologies Inc.	PLTR	329,875	137.80	63.14	34	25	81.07
Broadcom Inc.	AVGO	2,038,630	430.00	29.86	2	110	75.53
CrowdStrike Holdings, Inc.	CRWD	133,297	527.77	27.70	7	25	75.00
AppLovin Corporation	APP	158,088	468.55	25.65	37	54	84.13
NVIDIA Corporation	NVDA	5,230,634	215.22	24.22	1	84	72.93
Advanced Micro Devices, Inc.	AMD	742,415	455.19	19.82	0	354	51.93
KLA Corporation	KLAC	244,694	1869.19	18.68	4	169	60.23
Arista Networks, Inc.	ANET	178,304	141.77	18.36	21	64	63.37
Marvell Technology, Inc.	MRVL	144,270	170.13	17.61	3	202	46.70
Sandisk Corporation	SNDK	231,226	1562.34	17.54	0	4368	17.57
Analog Devices, Inc.	ADI	203,626	416.52	17.32	1	108	60.87
Lam Research Corporation	LRCX	367,483	294.05	16.95	1	292	47.13
Seagate Technology Holdings	STX	172,963	782.64	15.71	2	720	26.00
Intuitive Surgical, Inc.	ISRG	159,726	450.06	15.09	25	-16	66.63
CME Group Inc.	CME	101,058	281.25	14.99	15	-1	100.00
Palo Alto Networks, Inc.	PANW	146,348	207.88	14.79	7	10	73.33
Micron Technology, Inc.	MU	840,886	746.79	14.47	0	804	21.63
Prologis, Inc.	PLD	134,185	144.09	14.31	1	37	75.87
Texas Instruments Incorporated	TXN	261,610	287.80	14.19	2	75	59.33
Tesla, Inc.	TSLA	1,385,284	428.35	14.15	14	55	18.03
Visa Inc.	V	605,267	318.79	14.07	15	-9	97.77
Western Digital Corporation	WDC	164,162	480.01	13.94	1	984	29.70
Howmet Aerospace Inc.	HWM	108,765	270.56	13.18	4	72	31.00
Mastercard Incorporated	MA	441,473	495.48	13.01	18	-13	100.00
Welltower Inc.	WELL	150,206	214.63	12.77	2	42	39.80
Applied Materials, Inc.	AMAT	345,238	435.36	12.24	1	179	47.63
Vertiv Holdings Co	VRT	130,182	339.97	12.01	6	256	35.97
Intel Corporation	INTC	634,841	124.90	11.81	4	515	38.50
Eli Lilly and Company	LLY	848,389	948.45	11.74	16	22	81.17
Shopify Inc.	SHOP	144,028	110.51	11.65	39	17	49.43
Alphabet Inc.	GOOGL	4,848,227	400.71	11.48	0	165	58.17
Equinix, Inc.	EQIX	105,484	1072.08	11.07	5	23	49.53
Southern Copper Corporation	SCCO	152,253	185.29	10.46	17	118	57.77
Corning Incorporated	GLW	160,208	186.94	9.82	6	317	34.43
Microsoft Corporation	MSFT	3,082,236	415.06	9.68	25	-4	69.17
Apple Inc.	AAPL	4,303,041	293.26	9.53	1	49	45.73
Vertex Pharmaceuticals	VRTX	109,217	429.82	8.94	15	-1	54.03
Oracle Corporation	ORCL	563,160	195.95	8.79	43	31	71.57
S&P Global Inc.	SPGI	124,902	420.12	7.94	27	-17	68.80
Netflix, Inc.	NFLX	369,397	87.48	7.88	35	-24	45.37
McDonald’s Corporation	MCD	196,941	275.75	7.33	19	-13	57.10
Meta Platforms, Inc.	META	1,544,802	609.63	7.19	23	2	81.50
GE Vernova Inc.	GEV	279,800	1040.15	7.11	12	156	17.73

Source: Stock Investor Pro by AAII

This is where the highest amount of froth resides as they are mega-cap companies and many of them with the low gross margins and puny net profit margins or at least not sustainable enough due to one-time major windfall effect from artificial intelligence (AI) hype.

They can and will drop like a rock once they get out of favor, especially the ones with the low margins such as commodity types, i.e. memory chip makers and data center companies. They are flying high and before we know it, they will come back down to earth. We have seen a huge spike in their gross margins from subpar 3-year average to over-the-top trailing twelve months average due to artificial demand and AI windfall, hence they are up beyond reason.

As a reference, here are some standouts:

See some staggering numbers here for their upward trajectory in last 12 months – these are not percents – they are multipliers – all semiconductor companies!
- Sandisk (SNDK): 40x
- Western Digital (WDC): 10x
- Micron (MU): 8x
- Seagate (STX): 7x
- Intel (INTC): 5x
- Advanced Micro Devices (AMD): 3.5x
Following ones have started their trajectory down towards the earth again, though, some of them still have their price to sales ratio near the top of the list:
- Oracle (ORCL): -43%
- Shopify (SHOP): -39%
- AppLovin (APP): -37%
- Netflix (NFLX): -35%
- Palantir (PLTR): -34%
- Microsoft (MSFT): -25%
- Meta (META): -23%
More to come and many more casualties to be added next to the list above as a great majority of them are in an outright danger zone territory.

Walmart (WMT) and Amazon (AMZN) would not even make this list as their price to sales ratios are lower than our criteria here. However, they are equally vulnerable as their margins are even lower, materially lower! Tread carefully!!

Irony of Two Meek Kings: Stock Market & USA, Inc.

May 3, 2026

We live in a strange world, really, these days.

Stock market keeps hitting new highs – without any real substance and all nothing but the hype, now aided by extreme manipulation and excess liquidity.

The numbers are speaking for themselves, finally. If we care to look deeper. The ‘supposed’ king of the stock market, Nvidia (NVDA), that hit the $5 trillion market cap back in October 2025 with the intraday high of $212.21 struggled for almost 6 months to make a new high and finally it did just last week by hitting a new intraday high of $216.83 – a whopping $5 increase, a meager 2%.

So much for capex tied to artificial intelligence (AI) that will earn outrageous rate of return on all of the insane amount of AI spendings. This is only the beginning. Calling Nvidia a “meek” king of the stock market at the highest market cap is certainly quite fitting!

So is the ‘toothless’ rally led by the ‘meek’ kings of the stock market, i.e. ‘top stocks’. To be more precise, now about 5 of the top 10 or a trillion- dollar market cap club have reached new highs recently where the other 5 remain well entrenched either in the bear market or in correction territory.

Out of 128 top stocks sporting over $100 billion market cap, well over 50% or 71 stocks are down in excess of 10%. So much for the bull market. See the list below.

Company name	Sector	Ticker	Mktcap	Price	Down%
Intuit Inc.	45 – Information Technology	INTU	111328	399.03	51
Oracle Corporation	45 – Information Technology	ORCL	493839	171.83	50
Accenture plc	45 – Information Technology	ACN	110954	179.83	45
Spotify Technology S.A.	50 – Communication Services	SPOT	104723	441.51	44
Adobe Inc.	45 – Information Technology	ADBE	102841	250.71	41
Salesforce, Inc.	45 – Information Technology	CRM	171872	183.82	38
AppLovin Corporation	45 – Information Technology	APP	155553	460.00	38
Abbott Laboratories	35 – Health Care	ABT	155882	89.46	36
Tamboran Resources Corporation	10 – Energy	TBN	143750	35.89	31
Netflix, Inc.	50 – Communication Services	NFLX	388750	92.06	31
The Progressive Corporation	40 – Financials	PGR	116855	199.31	31
Palantir Technologies Inc.	45 – Information Technology	PLTR	343881	144.07	31
Shopify Inc.	45 – Information Technology	SHOP	166294	127.67	30
International Business Machines Corp.	45 – Information Technology	IBM	217928	232.20	29
Danaher Corporation	35 – Health Care	DHR	123989	175.15	28
Booking Holdings Inc.	25 – Consumer Discretionary	BKNG	134008	169.63	27
Stryker Corporation	35 – Health Care	SYK	112734	294.73	27
Thermo Fisher Scientific Inc.	35 – Health Care	TMO	176423	469.21	27
Capital One Financial Corporation	40 – Financials	COF	121114	191.91	26
Lockheed Martin Corporation	20 – Industrials	LMT	117886	512.77	26
S&P Global Inc.	40 – Financials	SPGI	126668	426.06	26
Uber Technologies, Inc.	20 – Industrials	UBER	155760	75.12	26
T-Mobile US, Inc.	50 – Communication Services	TMUS	215700	196.06	25
Microsoft Corporation	45 – Information Technology	MSFT	3075812	414.20	25
Medtronic plc	35 – Health Care	MDT	102608	80.00	25
Meta Platforms, Inc.	50 – Communication Services	META	1537081	608.75	24
Southern Copper Corporation	15 – Materials	SCCO	144703	171.18	24
The Home Depot, Inc.	25 – Consumer Discretionary	HD	321613	323.88	24
Intuitive Surgical, Inc.	35 – Health Care	ISRG	162466	457.78	24
Tesla, Inc.	25 – Consumer Discretionary	TSLA	1263912	390.82	22
Lowe’s Companies, Inc.	25 – Consumer Discretionary	LOW	130665	233.33	20
CrowdStrike Holdings, Inc.	45 – Information Technology	CRWD	115079	455.64	20
Palo Alto Networks, Inc.	45 – Information Technology	PANW	127487	181.09	19
McKesson Corporation	35 – Health Care	MCK	100287	814.02	19
Newmont Corporation	15 – Materials	NEM	117853	108.62	19
RTX Corporation	20 – Industrials	RTX	234539	173.99	19
Mastercard Incorporated	40 – Financials	MA	444428	495.46	18
General Electric Company	20 – Industrials	GE	299689	286.51	18
American Express Company	40 – Financials	AXP	218981	319.68	17
The Walt Disney Company	50 – Communication Services	DIS	184101	103.08	17
Vertex Pharmaceuticals Incorporated	35 – Health Care	VRTX	107633	423.92	17
Wells Fargo & Company	40 – Financials	WFC	248895	80.81	17
AbbVie Inc.	35 – Health Care	ABBV	366508	206.60	16
Amgen Inc.	35 – Health Care	AMGN	177773	329.82	16
Gilead Sciences, Inc.	35 – Health Care	GILD	163509	131.65	16
McDonald’s Corporation	25 – Consumer Discretionary	MCD	204718	286.64	16
Amphenol Corporation	45 – Information Technology	APH	174403	142.30	15
Eli Lilly and Company	35 – Health Care	LLY	865072	963.33	15
Parker-Hannifin Corporation	20 – Industrials	PH	111337	882.23	15
The Charles Schwab Corporation	40 – Financials	SCHW	162209	91.54	15
Deere & Company	20 – Industrials	DE	156033	577.26	14
Honeywell International Inc.	20 – Industrials	HON	134874	212.50	14
The Procter & Gamble Company	30 – Consumer Staples	PG	342895	147.26	14
QUALCOMM Incorporated	45 – Information Technology	QCOM	188719	177.04	14
BlackRock, Inc.	40 – Financials	BLK	164667	1061.68	13
AstraZeneca PLC	35 – Health Care	AZN	286162	184.74	13
Berkshire Hathaway Inc.	40 – Financials	BRK.A	1021553	710300.00	13
Exxon Mobil Corporation	10 – Energy	XOM	649038	152.75	13
Philip Morris International Inc.	30 – Consumer Staples	PM	259220	166.38	13
Visa Inc.	40 – Financials	V	622810	328.03	13
AT&T Inc.	50 – Communication Services	T	183284	26.12	12
Corning Incorporated	45 – Information Technology	GLW	135471	158.26	12
CME Group Inc.	40 – Financials	CME	104037	289.54	12
The Boeing Company	20 – Industrials	BA	179175	227.38	11
Chevron Corporation	10 – Energy	CVX	379439	190.63	11
KLA Corporation	45 – Information Technology	KLAC	226620	1726.26	11
UBS Group AG	40 – Financials	UBS	135132	43.69	11
GE Vernova Inc.	20 – Industrials	GEV	285934	1062.95	10
Johnson & Johnson	35 – Health Care	JNJ	547233	227.19	10
Merck & Co., Inc.	35 – Health Care	MRK	279054	112.16	10
UnitedHealth Group Incorporated	35 – Health Care	UNH	335590	368.78	10

Clearly, some of these downtrodden stocks can be a great value picks as they may rebound very well over the course of next 12 to 24 months. However, some of them can become ‘value traps’ as well just as is often the case for the value stocks.

The other king, need we speak much about it? It is now official as the ‘king’ himself put out a picture of two kings side by side – a “real” king of United Kingdom alongside “delusional king” of United States on his social media platform.

Wall Street Monickers: After “Casino” now “Military Troops Marching without Generals”

April 24, 2026

Speculations galore at the Wall Street Casino that has turned into recently!

Metaphorically, military keeps marching without the generals, i.e. top stocks. That is the story of today’s Wall Street.

It is not too different than the U.S. Department of Defense, sadly speaking now called the Department of War. Two of the top officers were recently shown the door this month alone. First, it was Gen. Randy George, Army Chief of Staff in early April and now John Phelan, Secretary of the Navy just about two days ago. These are high profile departures and nothing to sneeze at for a country as powerful as United States.

What this means is that the end is nigh for the Wall Street speculative excesses as we know it, let alone one of the most powerful defense forces in the world! Neither Wall Street nor military can march much further without its generals. Troops can only go so far. Leaderless rallies cannot last for long.

Last week, we covered that the stock market made a new high without having a SINGLE one of the top ten market cap stocks making a new 52-week or all time high. Yes, that is correct. Not even one of the top ten names. After that, S&P 500 made another high this week with a smaller bump closer to 7150.

This time around, only 3 out of the top 10 participated in the muted rally by making new all-time highs: Alphabet (GOOG), Amazon (AMZN) and Broadcom (AVGO) – with all 3 in a dangerously bleeding category for valuation. They are up 21%, 23% and 36% respectively in past 4 weeks alone. Other 7 of the top 10 including the “Market Cap King” Nvidia (NVDA) are either silently watching and/or staying in their deep slumber.

The bottom line is that the U.S. “system” is finally running out of steam after much collusion between the bad actors of Wall Street and government institutions driving he fiscal and monetary policies which fuel the artificial surges. It is like throwing a fuel on the fire. Now, we are running out of that fuel. Time for the reality check.

Intel (INTC) is up 25% in a pre-market condition today after having more than tripled in last one year based on the earnings beat and better than expected results. It had been one of our favorite stocks a while back and now it turning into a “speculative” one, unfortunately, as if there are not enough speculative big tech stocks that the Street is so enamored with.

At the same time, major software stocks have started to make their way closer to the ground reality after having been pummeled and punished with a recent scare from Anthropic’s major revelation about its product capabilities that threaten the “established” software business models.

On the other side of the equation, the risks remain a plenty with the major ones being now continued and unresolved war with Iran that is causing the long-lasting damage and disruption to the energy markets. That is in addition to the major drag of “unreal” budget deficits and debt the U.S. carries aside from nose-bleed market valuations. Collectively, it does not bode well.

This is one of the most disproportionate and warped share of the risk-reward equations of all time. Clearly, the repercussions can be just as ugly once we are all said and done, i.e. the dust settles after the bust. ‘nuff said as mentioned in a good number of posts before. History is not kind to those who ignore.
Toothless Rally, Record New High for the S&P 500 Index & Shifting Ground Underneath

April 16, 2026
Major stock market indices such as S&P 500 and NASDAQ made new highs yesterday. S&P 500 reached a tad higher to 7023 mark just as it has been timidly doing in last few months to make new highs.

Revealing factor?

None of the top 10 market cap stocks ranging from Nvidia (NVDA) to Walmart (WMT) reached new heights. None. Not a single one. That is quite telling. Isn’t it?

They are all down respectively from 26% to 3% with Microsoft (MSFT) being the most impacted at 26% to Alphabet (GOOG) at 3%.

Walmart (WMT) again got booted out of the trillion-dollar club as it continues to flirt with the exclusive club membership. Earlier, we covered it under the following post about two weeks back: First Trillion Dollar Valuation Club Casualty: Walmart (WMT)

Bright spot? The small cap and midcap stocks continue to strive to make its comeback and reassert its position as they have been brutally killed by the ‘unjust’ market forces in recent years. A big penchant towards the “Magnificent Seven” and mega-caps contributed to the decline of small cap stocks and now they themselves have been on the decline for the right reason. Finally, investors appear to be waking up to “value” stocks and more “reasoned” investments as opposed to the blind following of major names.

Yet, we are far, far away from shaking down all the fascination with investing in big names regardless of any corresponding fundamentals or thesis. It has been a game of a mindless investing for so long and it will take a while to shake it all off or to “wean” investors off of that habit like weaning off of the sleeping pills or worse yet the cocaine doses. Our fear is that it will get ugly, really ugly, before things start getting better and healthy again. History shows that time and again. No exceptions. No mercy.

Historically, a stock market reaching new highs without the leadership of its top market-cap stocks (often called a “narrow” rally) is rare. Usually, because major indices like the S&P 500 are market-cap weighted, it is mathematically difficult for the index to hit a record high if its largest components are lagging.

However, there have been distinct “regime shifts” where the broader market (small and mid-caps) leads the way while mega-caps underperform. We have seen it happen before such as during post dot com bust. The rotation occurred during 2003 to 2006 from the large cap stocks to the small and midcap stocks.

After the tech bubble burst in 2000, the “Mega-Cap Tech” era ended. While the S&P 500 took until 2007 to reach a new nominal high, the equal-weighted version of the market and mid-cap indices hit new highs much earlier. Small and mid-cap stocks outperformed significantly as investors fled the overvalued giants of the late ’90s. From 2003 to 2006, the market stayed bullish, but the “leaders” were energy, materials, and industrials, rather than the top-cap names from the previous decade.

Prior to that, a similar dynamic occurred during 1975 to 1983, perhaps the most famous period where the “top” didn’t lead. Following the “Nifty Fifty” bubble, the mega-caps of the early ’70s, the largest stocks were stagnant for a very long time. Then, small cap stocks entered a massive bull market. While the headline S&P 500 was often weighed down by the “old guard” of sluggish industrial giants, the average stock was making massive gains and hitting individual new highs.

A similar shift is underway now, yet, it is still in its early innings and many macro factors continue to hamper its progress including high interest rates, fiscal situation, Iran war and other complex geopolitical situations. Between July 2025 and February 2026, the Russell 2000 index for small caps surged roughly 22%, while the S&P 500, the de facto large cap index, rose only about 11%. Thus, after years of “Magnificent Seven” dominance, the market has begun to rotate in the second half of 2025.

The irony is that even though S&P 500 index along with NASDAQ reached new highs, Dow Jones Industrial Average (DJIA) and Russell 2000 index did not.

Hence, it is time to take advantage of the market rally, which is toothless and cannot last for long without gaining a solid footing on many different fronts. In fact, it is quite the opposite and we need to be preparing for a perfect storm as we have mentioned a few times in recent months. It is advisable to lighten up on the big names, especially the overvalued ones and start selectively choosing the small and midcaps.

Overall, it is a high time to “increase” the quality of our portfolio, not just a namesake and by holding a “seemingly” high quality, though, a “real” high quality names considering multitude of factors.

In summary, while a “Bull Market” almost always includes the whole market eventually, there have been 3 to 4 major eras in the last 50 years where the market made progress specifically while the largest companies were “dead weight”:
1. Late 1970s: Post-Nifty Fifty collapse.
2. Early 1990s: Recovery from the 1987 crash/1990 recession.
3. 2003–2006: Post-Dot-Com era.
4. 2025–2026: The current “Great Rotation” out of AI-driven concentration.
When this happens, it is usually viewed by economists as a “healthy broadening,” suggesting the economy is strong enough to support thousands of companies, not just a handful of tech titans.
Market Manipulations – A Norm, not an Exception & Heavy Price to Pay

April 10, 2026

S&P 500 index is back from the brink of a correction territory. It has happened a couple times already when approaching this much dreaded territory in last couple years, which is actually an essential market mechanism to keep the markets healthy. We simply have not had any healthy correction for a very long time.

This time around exactly when the broader market index was about to enter the undesired place of 6300 on March 30, the magic wand made the markets fly up again soon after. NASDAQ had already entered the correction territory by then. This was then – just about 10 days ago.

Fast forward to now. The index at 6825 now is in a shouting distance of the all-time high of 7000 reached in late January. Once again the index is trying to break out of the doldrums after trying it again and again for several times in last couple months and not be able to cross.

We have covered earlier that the U.S. Government and Federal Reserve (Fed) both are boxed in – with very limited or literally no wiggle room via this post back in November of 2025: Fed & POTUS in the Box: Trouble Ahead & Time to Buckle Up.

Ugly things are at the cusp of unfolding. And both of these above entities via their fiscal and monetary policies arm are doing their best to keep things afloat. The question remains for how long they can. It is a matter of months now, not years.

Ill-fated or rather suicidal strategy of tariffs was a first nail in the coffin for U.S. With the Iran war, it is a second and final nail in the coffin. “Sanchit Karma” – accumulation of all good and bad actions over the years are about to speak or rather roar like a lion.

Quantitative Easing or QE by the Fed as it is known is back in the ‘vogue’ to prop the markets. Along with that, the Yield Curve Control (YCC) is a subtle intent behind this all by deploying different monetary instruments to keep the interest rates low. Yet, the 10-year treasury continues to defy the expectations and stay firmly above 4% and constantly eying at 4.5% as finally the “bond vigilantes” and “gold bugs” have arisen out of their long slumber.

With the Iran war “on-again and off-again” approach and now the ceasefire, the oil price continues to flirt with $100 and stay above at times…only to scare and ‘contain’ our ‘evil’ president from making more and more disastrous moves.

All this does not bode well for the U.S. economy and it is only a matter of time that it is pushed into a valley of despair. The gas price averaging at well over $4 a gallon is only a sign of things to come. No where in sight is a “sound and sane” fiscal policy to lift the U.S. out of such doldrums and do more meaningful “visionary works” for the future. Instead, the U.S. is preparing full well to head for the disaster – crash and burn.

All this is not coming cheap. Obviously. Everyone knows that disaster costs money. Folks may not know if we are heading into one. We are to pay a heavy price, a very heavy price, without a doubt. Why? The market laws can be only ‘bent’, not ‘broken’, else, it is like a “Laws of Universe”. Creation and destruction are the norms, not the exception. That is how the universe operates. Further, we also know that only ‘creative destruction’ adds value to the society. Destructive destruction only extracts the value out of communities and countries.

The best-case scenario is the cease fire turns into a permanent solution for the U.S. – Iran war. Even in that case, things do not get much better. It can only stop us from things being very ugly. The worst-case scenario is that the war drags on and we incur additional expense of hundreds of billions of dollars in expense this year alone, let alone the human cost.

What it means is that the closing in on $2 trillion deficit is a near certainty for this year which will be at or over devastating 6-7% of GDP that this presidential administration is completely tone-deaf about and continues it as a ‘norm’ not an ‘exception’ for much of its first as well as second term.

As for the inflation expectations, during the last presidential administration under the helm of the democratic leadership, the U.S. was gradually heading back towards ‘more normal’ level of economy and inflation around 2% to 3% after having it spiked post COVID, it is sneaking back up again more towards 4% or even 5% depending on what statistics we choose to look at and it already is crippling ordinary Americans that the upper echelon does not care about at all.

All this is while the usual market titans such as Microsoft (MSFT) remain solidly in the ‘bear market’ territory with 33% down from the peak where rest of the market continues to stay bullish via rotation into cyclical, energy and less desirable stocks. Ditto is with Tesla (TSLA) at 31% down and the Facebook parent, Meta (META) in a bear territory at 21% drawdown from the peak.

These three are amongst the highest valued stocks, in fact, members of the much coveted trillion-dollar market cap club. That is quite telling. It only means that the earth is cratering underneath the feet of most investors yet they do not realize it as everything looks pretty good to them on the surface whereas the down under it is pretty ugly.

Other ‘stalwarts’ of the market bulls engaged in the market ‘manipulation’ or sheer ignorance such as Oracle (ORCL), Palantir (PLTR), Netflix (NFLX) and Home Depot (HD) are down 60%, 37%, 24% and 20% respectively from their peaks where all of them still sport the market cap of above $300 billion.

What is next? The market game continues in its final innings and more and more ugliness is destined to unravel to the dismay of many investors, unfortunately. In other words, the bear market is getting more and more entrenched without us knowing it in most cases. Stars of the surface are cratering in front of our own eyes and will continue to do so until there is a market capitulation and we are ready for the new beginning.

It will be a long and dreadful wait to emerge out of all the ugliness that is here to stay.

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