As Good as it Gets | Australian Markets

First, a flashing yellow mild. Charlie Bilello warns that this is perhaps “as good as it gets.” US stocks are up 260% during the last ten years. The S&P’s price-to-peak earnings ratio is the very best it’s been since 2000. Its price-to-sales ratio is twice what it was in 2000, and is the very best it has ever been, at 3.4.

The ratio of growth stocks to worth stocks, the ratio of tech to the S&P usually, and the ratio of massive cap to small cap stocks — all of these ratios measure how speculative the market has turn out to be, and all are back to 2000 ranges.

Another factor that appears to point a bubbly high is the focus of worth in a only a few stocks. The high three — Nvidia, Microsoft and Apple — symbolize 20% of all the market’s worth. The high 10 are value 38% of it.

Anything can occur. But the factor almost definitely to occur is that these corporations unload — decisively — evaporating a lot of the ghost wealth now haunting US markets. Runner-up almost definitely is a persistent ‘70s style inflation that reduces their real values even as nominal prices remain elevated. In either case, this could be the last time to get out…before a crash.

If there is a crash, you can count on the Fed to lower interest rates. It is still committed to backing the Wall Street party, by putting more gin in the punchbowl when necessary. Whether that would set off another boom, or merely add to inflation, we don’t know.

Persistent, Seventies-style inflation, alternatively, would stop a rescue attempt. The Fed must maintain its peace…and even raise rates of interest…as inflation wore down the stock market.

Neither final result may be very enticing. And if both occurs, please do not forget that we despatched you this message warning you. If neither occurs, we’ll declare we by no means despatched it.

And no matter occurs, we’ll persist with our positions in gold, relying on the unrelenting Primary Trend to keep bringing actual stock values down. They’ve already misplaced about two-thirds of their worth, in phrases of gold, since 1999. Another 50% haircut, more or much less, and stocks will start to look good again. T’could be good if it occurred in our lifetime.

Meanwhile we’re watching an extinction-level occasion. Light a candle. Put on a black arm-band. The final of his type…a political neanderthal…the final true ‘conservative’ in Congress has been marked for elimination. Newsweek:

Thomas Massie’s polling numbers ‘turned upside down’ by MAGA marketing campaign

The ballot attributed Massie’s falling assist to a barrage of adverts from MAGA Inc, a pro-Trump super PAC that spent $800,000 on a current TV marketing campaign in his district, following an earlier $1 million advert buy focusing on him.

Where did the money come from? Mostly from AIPAC and its supporters. Massie opposed more assist to Israel and voted in opposition to Trump’s Big, Beautiful, Budget Abomination. He turned a hunted man.

Massie defined how simple it is for large money to make a conservative look dangerous:

“They pass these big bills, such as the Big, Beautiful Budget Bill. I couldn’t in good conscience vote for it because it would make America’s debt problem worse.

“But in that bill [it was more than 1,000 pages long] were provisions to give benefits to veterans and other things that sound good… as long as you don’t look at them too closely.

“And then with the support of the Trump machine and billionaire donors they can run ads that say “Massie sided with Democrats and voted against our veterans.”

That will not be a message that the voters within the backwoods of Kentucky need to hear. If Massie had time to clarify what was actually happening, he might most likely persuade voters to stay with him. But politics works on soundbites, BS, and money. It’s no place for considerate dialog.

Party politics used to make long, troublesome explanations pointless. The Democrats stood for one thing. Republicans stood for one thing else. Voters didn’t should know a lot more. They might vote ‘the party line.’

One occasion was broadly ‘liberal’ — in favor of Big Government. The different occasion was broadly ‘conservative’ — believing, as Reagan put it, that ‘big government is the problem, not the solution.’

But it’s 2025. And now it’s the Republicans who’re pushing for a greater authorities. A couple of years in the past, you’d have by no means seen a headline like this, CNBC:

Trump administration weighs 10% stake in Intel through Chip Act grants, making authorities high shareholder

Politicians on the board? Big authorities as the principal capitalist?

How is that more likely to work out?

But Republicans have advanced into a new species. Conservatives go away their footprints and their bones within the Capitol. The Big Man and his furry little followers take over.

So take cowl, and await the ‘great reckoning’…when Big Government inevitably makes a mess of issues, the Dow/Gold ratio sinks down to five, and we are able to safely buy stocks again.

All advice is basic advice and has not taken under consideration your personal circumstances.

Please search impartial financial advice relating to your own scenario, or if doubtful in regards to the suitability of an investment.