An "angry bear" opines on the soaring stock market - and what may bring it down

 

We've met Jared Dillian before in these pages.  He's an investment adviser and analyst with a highly respected track record in the industry.  He's not a happy man these days.

You should never let your emotions get in the way of investing, but I am starting to get angry at this bull market ... You want my thoughts—I will give you my thoughts. But the one data point that you should know is that the stock market is now the most overvalued in history, more so than 2000 or even 1929.

. . .

My friend Helene Meisler tweeted recently that if you weren’t around for the dot-com bubble, now you know what it was like in the dot-com bubble. The difference being that so many more people own stocks this time around. It is estimated that 62% of Americans own stocks. If we have a 50% bear market, it’s going to be Mad Max Beyond Thunderdome. We are really going to be questioning the wisdom of plowing all our savings into the stock market via 401(k)s. Let’s hope that doesn’t come to pass because the consequences would be too terrible to contemplate, but knowing markets and karma, that is probably exactly what is going to happen.

. . .

I mean, the consensus view is that all this [AI] capex is going to go to waste, so maybe the out-of-consensus view is that it is actually needed. This is one of these situations in which I am glad I am 52 years old. The internet was also the future of the human race, but capitalism being what it is, there was overinvestment and malinvestment, and eventually supply caught up with demand, and everything crashed.

It looks like a tiny blip on a log chart (which is one reason why I hate log charts), but trust me, the crash was no fun. I lived through it and barely held on to my job. This time is no different. This time is never different! Whether it’s railroads, industrials/utilities, the Nifty Fifty, Japan, or any other bubble. The difference is that this one is bigger than all of them, and it looks like it’s not stopping.

. . .

Back when I was at Lehman in 2006, I’d drive out in the country and take pictures of all the housing developments under construction that were completely vacant and then send them out in my Bloomberg messages. Maybe I should take a road trip and take some pictures of all the data centers under construction that will be Spirit Halloween stores in a few years.

I ordinarily don’t like to write rants. I like to write reasoned, thoughtful pieces. But I’m currently on a plane to Minneapolis, and S&P futures, which opened lower (because oil was up), just ripped to new highs… again. It’s truly incredible that the market goes up every day. It will be equally incredible when it goes down every day because that is what it felt like in 2002. A bear market without end.

There's more at the link.

I'm afraid I agree with Mr. Dillian.  Stock market prices have been soaring into the stratosphere year after year, without any sound economic underpinnings.  It's all been a leap of faith.  "The Fed will provide!"  Well, what happens when the Fed can no longer provide?  What happens when the economic consequences of the Iran war begin to bite?  What happens when international market turmoil makes it clear that, despite all the positive punditry from paid opinion writers, the emperor has no clothes, and nothing is or can be guaranteed?

The very real dangers confronting any and all Western economies aren't limited to the Iran war.  Ambrose Evans-Pritchard focuses on China, and points out:

Europe's leaders are waking up to the terrifying danger that China could obliterate much of their industrial base within less than a decade, shattering the old political order and the EU project itself.

The Rhodium Group says the Chinese Communist Party is digging in its heels, doubling down on a strategy of systemic over-investment and over-reliance on exports that cannot be absorbed by the rest of the world, and certainly not a Europe already in semi-slump.

The original "Made in China 2025" plan a decade ago targeted a clutch of specific technologies. Beijing is now expanding this into an "industrial policy of everything": cars, machinery, chemicals, pharma, software, AI, you name it.

China is pursuing this ruthlessly, aiming to capture a larger share of global value added with vertical control of the entire lifecycle.

It is moving towards autarky in its home market while undercutting the West in its own market and in third countries – everywhere and in every product. It devours foreign technology without releasing its own. The Rhodium Group said the foundations of G7 manufacturing are under comprehensive threat.

The "China Shock 2.0" is bigger and more sophisticated than the original China Shock in the 1990s and early 2000s, which flooded the world with cheap goods and wiped out swathes of blue-collar manufacturing in the West.

America bore the brunt of the first shock. The pauperisation of the Midwest Rust Belt set the stage for Donald Trump.

This time China cannot dump its excess capacity on the US market so easily because of trade barriers. The tsunami is instead being displaced into the softer target of Europe. It is hitting with even greater intensity. China's trade surplus hit a record 1pc of global GDP last year. No country has ever reached such an imbalanced position in modern economic history.

Again, more at the link.

My wife and I aren't rich.  Right now, our savings - and some extra debt through a second mortgage - are funding medical care.  Assuming all ends up that ends well, we'll have to rebuild our savings, but I tell you right now, with the stock market as it is, we won't be putting one red cent into it.  I want a store of value that will retain its value in a stock market slump, and for me that means precious metals.  Even before that, I want to make sure we have enough of the essentials to survive a severe, prolonged economic downturn.  If you want a useful list that most of us can use, click over to Lawrence Person's Battleswarm Blog and see his helpful list from last November.  It makes a good start to review our preparations.

Want to invest in something that is likely to offer a reasonable return on investment in the short to medium term?  Look at domestic essentials that may be in short supply during a prolonged downturn, and lay in a supply of them as trading material.  Baby diapers.  Feminine hygiene essentials.  Soap.  Toothpaste.  Basic, essential canned food.  Flashlights and battery powered domestic and camping lanterns.  Think of what your family can't live without, and you've got the start of a useful investment list, right there.

Am I a pessimist?  I don't think so.  I'd rather call myself a realist.  Regular readers will know that I, and many others, have been uneasy about our economy for years, if not decades.  The numbers have been getting worse all that time, and now they're getting worse a lot faster.  Forewarned is forearmed.

I'll leave the last word to an astute observer.  Click the image to be taken to the original post on X.com, and read the more than 600 replies (so far).

Word.

Peter

Who's behind the anti-ICE riots in New Jersey

 

The Twitter user known as DataRepublican, whom we've met in these pages before, has done another masterful job of analyzing the groups and individuals behind the out-of-control anti-ICE riots in New Jersey.  She condensed her findings into a lengthy post on X.  Here's how they begin.

ORG CHART EXPOSED: Which NGOs Are Organizing the Newark Protests, and How

How a six-word Signal message shut down a thousand-person protest.

On the night of June 1, 2026, journalist @NickSortor drove to Delaney Hall expecting what he'd seen for ten straight days: hundreds of protesters surrounding Newark's 1,000-bed ICE detention facility, human chains blocking federal vehicles, pepper balls and tear gas, helmets and gas masks distributed from organized supply stations, catered meals arriving on schedule. He found silence. The crowd — 200-plus the night before — was gone, with tens of thousands of dollars in pre-staged gear abandoned in place.

What happened between Sunday morning and Sunday night was a single message in an encrypted Signal group, as discovered by @bitchuneedsoap. A Cosecha NJ communicator posted a six-line announcement: "Cosecha is NOT mobilizing to Delaney Hall tonight. We are talking to strikers and their families to regroup." No negotiation, no vote, no gradual loss of enthusiasm. Some switch had been flipped off.

The natural question is how a protest of that size can be turned off with one message. The answer is that it was never a protest in the way most people understand the word. It was an operation — assembled, maintained, and disbanded through an organizational structure that looks, once you map it, like a military deployment with a nonprofit org chart.

The structure has four layers. Each answers a different question. Layer 1 decides whether to act. Layer 2 decides how many show up. Layer 3 decides what happens on the ground. Layer 4 keeps the whole thing running across days.

Understanding these layers is understanding how every major protest in America works, because the same people built the template.

There's much more at the link.  Follow it to learn precisely which organizations and individuals are funding and pre-planning all of the anti-Trump and anti-ICE demonstrations and other activities around the country.

We're going to see more and more "spontaneous" demonstrations and unrest as the mid-term elections draw closer.  Their objective will be to give the Democratic Party (and its further-left-wing supporters) a majority in both the House and the Senate, thereby stymie-ing President Trump as he tries to implement the rest of his agenda.  If they succeed in that, and in blaming all the country's problems at his feet, they're confident they can take back the Presidency in 2028.  Given a trifecta of President, House and Senate, they'll lock in their agenda so hard that it'll be impossible to root it out again.

I highly recommend reading all that DataRepublican has to say in the linked article.  I'm sure you'll see the pattern playing out in your own towns, cities and states.  As to what to do about it?  I'm sure you can come up with some useful ideas for yourselves . . .

Peter

EDITED TO ADD:  The news has gone mainstream, with many additional details coming out.  Follow the link for more.

Tab clearing

 

Over the past few days I've come across several very useful and informative articles.  I haven't got time to make each one into a detailed blog post, so I'll link to them here.  I'm sure some of them will interest you.

1.  What is the British military actually for?

This is about the British military, not the USA's, but nevertheless there are many common factors in the problems confronting each of them.  I daresay we on this side of the Atlantic should pay equal attention to the reasons for the existence of our armed forces, and whether (and how well) they are structured to implement those reasons.

2.  What happens if the State decides you're too expensive to keep alive?

A very thought-provoking academic study of Canada's Medical Assistance In Dying (MAID) program, and the pro's and con's of expanding it to provide involuntary euthanasia - in other words, a doctor or medical panel will decide whether your life is worth saving.  If you're a net expense to the government or medical insurance, here comes the lethal injection.  The abstract opens with this chilling statement:

"This study explores the potential economic savings from expanding medical assistance in dying (MAiD) in Canada, where it is currently a leading cause of death, to include vulnerable groups that cost the government more than they contribute in taxes. These groups include individuals with severe mental health issues, the homeless, drug users, retired elderly, and indigenous communities. Both voluntary and non-voluntary scenarios were analyzed, projecting total savings of up to CAD $1.273 trillion by 2047."

So, if the Canadian government thinks you're worth less to them alive than what it would cost them to treat your medical issue(s) . . . enjoy the euthanasia polka!

3.  The Declaration of Dependence

We are amid a significant shift in the cultural messaging around parenthood, and we can’t throw shame or money at the problem if we hope to solve it. A growing number of people in younger generations have decided that having children simply isn’t worth it. Why? ... The biggest shift ... is the acceptance of the idea that having children is merely one among many viable choices available if one is to live a flourishing adult life; indeed, it might lead to greater personal growth if one doesn’t have children at all. In very short order, the social pressure that used to insist that people who did not have children were selfish has shifted to its opposite—the idea that having children is selfish, given the world’s unsolvable problems and the need to pursue one’s own goals. From here, it is a short leap to viewing children as a burden, a cost to personal autonomy that is not worth paying. 

4.  The Loophole That Put Drunk Truckers Back On The Road

"A federal database built to flag and remove drunk and drugged truckers from U.S. highways used the equivalent of an "honor system" as its last line of defense between a family in a minivan and a substance addict steering an 80,000-pound mass of steel ... But what if a current alcoholic or drug addict could immediately get back behind the wheel by paying a third party to simply check off a box inside the database, rather than complete and pass follow-up drug or alcohol testing?"  Looks like thousands of truckers have been doing precisely that - posing a grave danger to other American drivers.

5.  Stop Nick Shirley!

Instrumental in exposing sufficient fraud so it could no longer be ignored by local or state officials is independent journalist Nick Shirley, who exposed the infamous “Quality Learing Center” day care fraud in Minneapolis, as well as many less well-known fraudulent day cares. So effective was Shirley, and so quickly did his work anger local fraudsters and state officials, Shirley received so many death threats he apparently decided to give California a try ... In Minnesota and California, honest public employees tried for years to expose fraud, but their superiors and the state Attorney General’s Office ignored them. But with Shirley’s discovery of incredible levels of fraud, the California Legislature was prodded into action: they’re criminalizing exposing fraud ... why would legislators, people sworn to protect the public, presumably at least in part by catching criminals defrauding taxpayers of billions, want to protect those criminals? It’s a puzzler, unless, perhaps, those NGOs and nonprofits are primary funding sources of the Democrat Party and Democrat politicians?

6.  Things don’t happen to me.  They happen for me

Rita is a personal friend of long standing, and shares a Substack with Lawdog, whom most of us know.  I was touched by her recent essay, and thought it worth sharing.

I want to share something that has been much on my mind of late, but I want to preface this with the caveat that there’s a sea of pretty ideas out there that appeal instantly but that don’t stand up to intensive scrutiny ... The story I share with you below is about making a choice to perceive things from a more objective standpoint, rather than seeing every curveball as the ultimate disruptor that could have occurred, and making life a misery ... I’ve always tried to embrace the joy of living, but I’ve not always understood how to go about it. I think now I understand that this joy is not having the right things or the stylish possessions that the world dictates are the measure of a life well-lived. I think one can have a joyous life in the most humble of circumstances, if one chooses.

There you go, friends.  I hope you found at least one or two of those articles worth your time.

Peter

The play's the thing... sometimes!

 

Yesterday Alma Boykin, fellow author, fellow blogger and friend of long standing, wrote on her blog:

It is a good reminder to treat the road crew well, wherever we are. Or we will end up like the infamous performance of Tosca, where the stage crew replaced the pad for the diva’s dramatic leap with a trampoline. She wasn’t hurt, but ooooh, her ego suffered.

Click over to her place to read the rest of her article.

In my younger days, half a world away from here, I used to dabble in amateur dramatics.  I never graced (?) the opera stage, but took part (as an enthusiastic amateur) in theater productions by CAPAB (the Cape Performing Arts Board).  Highlight (?) of my theatrical career (?) was a performance of the musical Oklahoma! in Cape Town.  I initially had only a crowd scene or two as an extra, but some of the local male singers proved to have difficulty hitting some of the tenor high notes, so I was duly roped in to add vocal enhancement to those scenes.  It was weird, but it helped . . . or so I'm told.

With that background, I know many of the stories about opera, theater, etc.  I found an article that repeats many of them, and I thought you might enjoy them too.  Here's an excerpt.

Another delightful, but probably apocryphal, anecdote is the one which allegedly happened at the War Memorial Opera House in San Francisco – to the same “Bouncing Tosca” from Chicago.

The firing squad were played by supernumeraries who received last minute instruction to shoot the person they found onstage, and then to exit with the principals. However, When they got onstage, they discovered there were two people there instead of one. Not knowing which one to shoot, they wavered back and forth a bit as both principals said not to shoot them. They finally settled on Tosca, shot her, and looked bewildered when Mario keeled over dead. They also did not leave, since they were told to exit with the principals – and neither of the principals were exiting. Tosca made some gestures to shoo them away, but they remained onstage until Spoletta came in with the soldiers. When Tosca jumped from the parapet, they saw their chance to finally exit with at least one of the principals, and jumped down after her, giving a Shakespearean greatness to the final tragedy.

There's more at the link.

Another article reports:

OPERA singer Fabio Armiliato must be thinking that Tosca is his profession's equivalent of Macbeth as a work of ill luck.

Appearing as the eponymous heroine's beloved, Mario Cavaradossi, in the production's first night at the open-air arena in Macerata last week, he was stretchered off near the end of the opera after being hit in the leg by debris from blanks fired in the execution scene.

For Friday night's performance, the tenor bravely hobbled back on stage - then fell and broke his other leg in two places while standing in the wings at the end of the first Act. He returned to hospital by ambulance, commenting from his stretcher: "Could it be that I am destined never to leave this theatre on my own two feet?"

. . .

At a performance of Rigoletto in Chile in 1970, as the tenor Louis Quilico threw his head back to start singing, a feather floated down from the rafters straight into his mouth. He passed out without uttering a sound.

Rather higher drama was on offer in Montevideo in 1934 when an orchestra member pulled out a gun and killed the conductor in mid-performance. It turned out that the conductor, Franco Paolantonio, had been sleeping with his wife.

Again, more at the link.

I'll try to look up the hysterically funny misadventures of an English pantomime show, that I recall reading about many years ago.  If I can find them, I'll publish them for your enjoyment.

Peter

Memes that made me laugh 314

 

Gathered from around the Internet over the past week.  Click any image for a larger view.