The Biggest Speculative Bubble In History
Over the past twenty years markets have been systematically hijacked by sociopaths in Silicon Valley and on Wall Street. Now, investors have been cornered into risk markets, with no chance of getting out.
In no particular order - Cathie Wood, Elon Musk, Jensen Huang, Donald Trump, Michael Saylor, Tom Lee, Jim Cramer to name the most egregious pump and dump specialists of this era. But to be clear there's an entire generation of pundits and acolytes who are complicit in this disaster. Without them, none of this would be possible.
Measured in total speculative fervor and market cap, this bubble now eclipses the pandemic bubble. As of this week, Crypto has exceeded its market cap from 2021. The AI bubble is of course orders of magnitude larger than it was in 2021, the "Magnificent Seven" bubble much larger. And of course there's that housing bubble everyone forgets about.
How soon they forget. The pandemic took the home price index far above the trend line and it hasn't looked back.
Chart data via Fred:
It's highly possible that the Fed is already done cutting rates. Which means that rates will remain the same or move higher in 2025.
Higher for longer rates of course is deflationary for the working class.
Here we see the Dollar Store and Bitcoin are heading in opposite directions. Which is good if you are in the Ponzi class.
It appears that the combination of global rate cuts and promise of excessive fiscal stimulus GLOBALLY has captured the imagination of investors on a scale that eclipses even the pandemic. And yet, it's amazing how this bubble is following the exact same trajectory as the pandemic bubble, which exploded in late 2021.
As I showed on Twitter, the events of this year are eerily similar to 2021. The 2020 mega rally carried over into early 2021 and then it imploded. Momentum stocks pulled back but then regrouped and melted up higher. Speculators believed they had time to get out, but they ran out of time before the end of the year.
This time, Momentum Tech is record overbought:
On the topic of rampant psychopaths, a lot of people don't know or forget that this is Michael Saylor's SECOND mega bubble. Microstrategy was at the epicenter of the DotCom bubble as well.
In terms of price, the stock is just now getting back to the Y2K level, but in terms of market cap it's much larger now due to ongoing share issuance. The latest gambit is turning the entire company into a leveraged bet on Bitcoin.
The current price / sales ratio is 140. Yes, you read that right.
On the topic of overvaluation, this is the highest price to sales ratio in at least 25 years, and yet analysts are STILL raising their end of year price targets:
The junkiest assets are now leading this market using record leverage to manipulate markets higher.
In summary, no one saw it coming.
