Show Notes
Take the dot com bubble, merge it with the 2008 housing crisis, and that is roughly what we are looking at. You have a commodity deflating at record speed while the debt built up to produce it explodes at record speed. What could possibly go wrong? Normally the market fixes this by itself. Prices fall, management gets nervous, budgets get cut. But that wiring is CUT right now. Prices never fell far enough to scare anybody, and Washington is running a deficit near 7% of GDP that papers over the damage. So prices stopped carrying information. Now they carry a story instead. I call it NARRATIVE DOMINANCE. Reality is beside the point. What matters is what you can get people to BELIEVE while there is enough money sloshing around to keep everyone comfortable. One market still tells the truth: Last month the Treasury doubled its buybacks and Wall Street read it as support. I said short bonds instead. Today the 10 year went through 5% for the first time since 2007. Defend a price the fundamentals do not justify and the market comes for you every time. Eventually somebody cuts a capex budget, and that day the story dies. I do not see how this ends any other way. Do you?
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