James E. Thorne

The thesis from my Market Insights is playing out in real time with Oracle ($ORCL)'s latest results. Oracle's AI-fueled sales surge drove a strong earnings beat, with revenue up ~22% YoY to ~$17.2B and EPS at $1.79 (beating estimates). They raised fiscal 2027 revenue guidance to $90B (above consensus), fueled by massive demand for AI infrastructure and cloud services—cloud revenue grew sharply, with AI-related bookings exploding. This sent ORCL up ~10% in pre-market/after-hours trading, highlighting the software recovery amid AI disruption fears earlier this year. Software is emerging as a relative haven in tech, with the S&P 500 Software & Services sector showing strong relative performance recently, and valuations attractive (12-month forward P/E near 3-year lows). Tech overall remains the only S&P 500 sector positive since recent geopolitical tensions (e.g., Iran conflict), and as inflation potentially picks up, tech could hold up better. To be sure, Oracle's gains could face tests ahead, but this reinforces that AI capex isn't a bubble set to mean-revert—it's the foundation of a new industrial and geopolitical regime. The real winners are owners of true bottlenecks: proprietary silicon, power-dense campuses, grid/transmission, specialized memory/fiber, and software embedded in mission-critical workflows. Not fleeting consumer novelty apps. $ORCL's move is one more signal to rotate back into quality tech amid uncertainty.

A simple rule: when the U.S. asks for help, it’s best to step up. Canada’s decision to join the Strait of Hormuz operation is a smart move by the Prime Minister.

The disconnect couldn’t be clearer. Canadians tumble down the global happiness rankings and watch their living standards erode, but not to worry, the Bank of Canada has it covered with a royal wave and a cheerful “let them eat cake.” Meanwhile, Mark Carney basks in political adoration, the media swoons on cue, and we’re told it’s not propaganda. Just another day in paradise.

For the record. Still Fighting the 1970s: How Central Bankers Turn Every Shock into a possible reliving of the 1970s. It needs to stop! In the 1970s, the House of Saud discovered that oil was not just a commodity but a sword, and they were delighted to show Washington how sharp it could be. That episode left scars on Western policy elites, but for today’s central bankers it has curdled into a full‑blown psychological condition. They no longer analyze shocks; they reenact trauma. The result is a kind of monetary cosplay. Every time the economy stubs its toe, Wall Street pundits and central bankers rush to the dressing room, squeeze themselves back into the polyester of the 1970s, and insist we are one supply shock away from reliving stagflation. They wheel out the same tired anecdotes about OPEC, gas lines, and wage‑price spirals, as if the mere mention of the decade absolved them of the need to understand the present. This is not “historical awareness.” It is therapy masquerading as analysis. Research has devolved accordingly. The cutting edge of “macro” now consists of overlaying today’s CPI with a chart from the 1970s, tweeting the two squiggly lines, and fishing for likes from people who could not explain the difference between a cost‑push shock and a monetary regime shift if their lives depended on it. The more superficial the resemblance, the more breathless the commentary. It is numerate numerology: charts in place of incense, engagement in place of thought. What this theatre politely omits is that shocks, left to themselves, disappear in due time. Supply shocks are not a permanent state of nature; they are a level shift that the system digests. Oil shocks in particular are, over the medium term, disinflationary rather than inflationary: they tax consumers, crush discretionary demand, and slow growth. The idea that every blip in crude is the opening act of a new 1970s is not economics; it’s policy incompetence. Meanwhile, the world they pretend to be diagnosing has changed out of all recognition. The United States is no longer an energy supplicant begging OPEC for mercy; it is an energy superpower exporting barrels and molecules to the same world that once held it hostage. The economy is less energy‑intensive, more digital, more diversified, and far more resilient to the kinds of shocks that defined 1973. Yet in the cloistered imagination of central bankers, every price disturbance is still a sequel to the oil embargo, and they are the heroes, bravely “getting ahead of inflation expectations” by strangling demand on command. This is not prudence; it is malpractice. To treat every modern disturbance as a rerun of the 1970s is to confess, in public, that one has stopped thinking. The structural conditions that produced stagflation—dependence on foreign oil as a weapon, rigid labor markets, primitive monetary frameworks—have been dismantled or transformed, but the high priests of monetary policy keep swinging at ghosts. Central bankers and their Wall Street acolytes need to abandon the 1970s as their base case for every shock, or admit they are no longer in the business of analysis at all, only ritual. At some point, the question stops being whether central bankers are overcautious and becomes whether they are simply unfit for purpose. If the best the “guardians of stability” can do in 2026 is replay a half‑century‑old nightmare with new graphics, then the real systemic risk is not inflation, energy, or geopolitics. The real risk is that the people running the system are still fighting a war that ended before many of today’s market participants were even born.”

It’s Options week Triple witching. Have a nice day.

For the record. Excuses Aren’t Policy: The Fed’s Crisis of Competence. The Powell Fed’s latest decision shouldn’t surprise anyone, by now, incompetence is the baseline. Shocks don’t need central bankers to “manage” them; they dissipate naturally. That’s first‑year economics. Yet the Fed continues to treat every temporary disturbance as a crisis of their own invention. When the results inevitably disappoint, Powell hides behind the platitude that “it’s a difficult decision.” It isn’t. Monetary policy is difficult only for those who refuse to learn from their own mistakes. And when cornered, the Fed retreats to the tired excuse that “it’s always in a different position.” It’s not, and that is no justification for the steady degradation of judgment we’ve seen under Powell. Consider inflation expectations: before the Powell circus arrived, the five‑year five‑year forwards were the gold standard. Today, at 2.12%, they remain well below long‑term averages—proof enough that expectations are firmly anchored. Rate cuts, we’re told, are blunt instruments that “affect the whole economy.” They don’t. Real estate is in recession, and an insightful Fed, if such a creature existed, would already have moved toward 2.75%. But insight has never been this institution’s strong suit. The Fed clings to lagging indicators like inflation and employment while ignoring the leading signals flashing red across credit and housing. They remain unmoved by the inconvenient truth of policy lags that stretch two years or more. So yes, the Fed made another mistake. And no, it shouldn’t surprise anyone. High energy prices are not inflationary in any sustained sense. They drain real incomes, crush discretionary spending, and deter investment—classic deflationary dynamics. The logical result is weaker growth, not runaway inflation. Yet the Fed remains trapped in a 1970s hallucination, reacting to every cost spike as though OPEC were plotting at midnight. It’s the same textbook error they made with wages and tariffs: mistaking a negative supply shock for a permanent inflation regime. After half a century of economic evidence to the contrary, the persistence of this misunderstanding can only be described as what it is, total incompetence dressed up as vigilance.

For the record. From Banker to Bureaucrat: How Carney Perfected Trudeau’s Politics of Pretence Mark Carney, of all people, should know better. Yet here we are, another grand committee, another multi‑million‑dollar “study” to rediscover what first‑year economics students already understand. The Carney government’s decision to launch a $6 million, 15‑year research initiative to “identify productivity solutions” is not policy, its performance. The gaslighting is insulting. Canada’s productivity malaise is neither novel nor complex. It stems from chronically weak business investment, an inflated public sector, and policy settings that punish innovation and reward dependence. The result: stagnant living standards and a widening gap with our peers across the developed world. Economists have laid out the remedies in plain sight for decades. Slash the uncompetitive tax regime strangling capital formation. Dismantle the regulatory thicket , particularly the environmental red tape that has crippled investment in energy and resource development. Remove interprovincial trade barriers that make a mockery of a “single market.” Revive entrepreneurship by reducing uncertainty, not multiplying committees. For a former central banker who built his reputation on financial discipline and market clarity, Carney’s descent into bureaucratic theatrics over basic economics is galling. If the government is genuinely looking for an answer, it doesn’t need a $6 million study: abandon Keynesian economics, climate alarmism, and perpetual wealth redistribution, and embrace, deregulation, tax cuts, basic supply‑side reforms. There, problem solved. I just saved taxpayers $6 million.

For the record. A Master Class in Incompetence: the Bank of Canada. High energy prices are deflationary: they squeeze real incomes, crush discretionary spending, and deter investment, so the ultimate macro effect is weaker growth and downward pressure on underlying inflation, not a permanent inflation spiral. Yet you should fully expect central bankers to ignore basic economic theory and, as they did with wages and tariffs, misread a negative supply shock in oil as the start of a permanent inflation regime rather than a growth shock with only temporary price effects. It is hard to describe that repeated error—treating every cost shock as a 1970s rerun, as anything other than total incompetence. The Bank of Canada just delivered a masterclass in that incompetence: leaving rates unchanged as Canada heads for a hard landing is not caution, it is negligence—tight policy into a weakening, energy‑squeezed economy is how you turn a slowdown into a policy‑induced recession, then blame “inflation expectations” after the fact.

For the record. As Operation Epic Fury continues ahead of schedule. Doomers freak on hot PPI print. Wall Street has never met a data point it couldn’t torture into a grand narrative. This week’s hot PPI print and an oil supply wobble are merely the latest props in a familiar morality play: inflation is back, the spiral is here, and only higher-for-longer can save us from ourselves. The same crowd that insisted “wages cause inflation” and “tariffs cause inflation” now chants “supply shock causes entrenched inflation” with the same unearned certainty. It’s not analysis; it’s Pavlovian Keynesianism dressed up in a PowerPoint deck. The basic error is embarrassingly simple. A relative price shock – oil, shipping, selective bottlenecks – is treated as a permanent, economy‑wide regime change rather than what it almost always is: a one‑time tax on real incomes that eventually snuffs out its own impulse. Yes, it sounds counterintuitive, but high energy prices are ultimately deflationary, because they choke off real economic growth by squeezing household budgets and raising business costs, which dampens demand across the rest of the economy. Instead of distinguishing between level effects and ongoing inflation, between transient cost pressure and genuine wage‑price dynamics, Wall Street happily sums everything under the banner of “sticky inflation” and calls it a thesis. Meanwhile, the same strategists who were visibly late to the first inflation wave now overcompensate by seeing ghosts in every monthly print. They extrapolate the noisiest components, ignore base effects, and airbrush away the supply response that higher prices inevitably trigger. The oil market is treated as a static cartoon, shock goes in, inflation comes out, rather than a dynamic system where new supply, substitution, and policy all work to neutralize the initial hit. The fact that prior energy spikes have given way to lower inflation as the dust settles is quietly forgotten; it doesn’t fit the slide deck. Overlay that with the Trump strategy, a coming peace dividend and the Street’s blindness looks even more costly. A deliberate push to rebuild domestic supply, deregulate production, and normalize trade terms is already working its way through the system ahead of schedule, setting up exactly what the inflation doomers say is impossible: a dramatic fall in prices and a genuine peace dividend as energy, logistics, and geopolitical risk premia all deflate. The architecture is in place for cheaper goods, cheaper energy, and a re‑pricing of risk away from permanent crisis and back toward productive investment. Against that backdrop, the Powell Fed is not “prudent,” it is materially too tight. Fed funds should already be sitting near a neutral 2.75%, not pinned in a zone designed for yesterday’s inflation scare. And yet Wall Street’s Keynesians house view still pretends that policy is roughly appropriate, while conveniently ignoring one awkward empirical fact: it takes at least 24 months for the full effect of rate cuts to transmit through the real economy. By the time the same people who misread the first wave of inflation finally concede that policy is restrictive, the lagged impact of today’s stance will already be biting into growth and prices. Investors should, once again, do the opposite of what the Doomer narrative prescribes: discount the coming disinflation,fading the inflation doom shock. A too‑tight Fed marching behind the curve, a Trump strategy accelerating the restoration of supply and security, and long lags in monetary transmission are not the ingredients of an endless inflation spiral; they are the set‑up for falling prices and a peace‑time repricing of assets. The tragedy is that Wall Street, still hyperventilating over a PPI release, is about to miss the turn, again.

For the record. Canada is sleepwalking into recession, with a collapsing standard of living and a soaring cult of Mark Carney, and once again earning its honorary place as a member of the Third World. Even as growth flatlines, per‑capita incomes stagnate and policymakers openly tell Canadians to get used to being poorer, Carney enjoys record‑level approval ratings unmatched in a decade. It is a bleak rerun of the early 1980s, when Pierre Elliott Trudeau’s interventionism delivered stagflation, recession and mounting debt while Ottawa insisted that more state control was the cure. The difference now is that the delusion is more brazen: Bay Street demands higher rates to clean up the non-existent inflationary mess, Carney wraps managed decline in climate and “equity” branding, and the political class applauds. Proof that Marx’s bourgeois socialists are not just alive in Canada, they are firmly in charge.

For the record. Canadian investors should ignore the partisan noise and performative outrage surrounding the current U.S. administration; what matters for Canada is policy, not personality, and the hard facts are that our economy, our security and our markets are still inextricably tied to the United States. As John F. Kennedy reminded Parliament in 1961, ‘Geography has made us neighbours. History has made us friends. Economics has made us partners. And necessity has made us allies.’ For investors, that enduring reality matters far more than the latest viral clip or talking point.

Expect Wall St pundits and MSM to suggest the elimination of Larijani is a sell the market event.

How soon we forget.

For the record. Wall Street’s herd instinct hasn’t evolved since 2020. Once again, they’re dumping stocks at the bottom and congratulating themselves for “raising cash,” as if panic were a strategy. You’d think after the COVID selloff and the so‑called “Liberation Tariff Tantrum,” someone in lower Manhattan might notice who the real dumb money is—but self‑awareness isn’t a line item on the balance sheet. IMHO Kharg Island will fall, the Strait of Hormuz will reopen, and President Trump will emerge victorious. Yes peace dividend awaits! That will bring not crisis, but opportunity, a peace dividend for investors with the nerve to buy what Wall Street is too frightened to hold. For months, the pundits have foretold a 20% drawdown, yet the market keeps proving more resilient, more adaptive, and more forward‑looking than their models allow. Let Wall Street sell the bottom; the real money will be made in this pullback, not in hiding from it. Give it six months and the same pundits who screamed “sell” at the lows will quietly rewrite their PowerPoints to claim they were buying all along. Wall Street today is no bastion of capitalism, it’s a progressive, Keynesian priesthood that believes in stimulus more than stewardship, redistribution more than risk. We saw after the Berlin Wall cracked and the Soviet Union evaporated, when the financial commentariat declared, with chest‑puffed certainty, that socialism was dead and capitalism had triumphed forever. Multiples expanded and risk taking returned with a vengeance. How long did that confidence last? Until the next bubble, the next bailout, the next central‑bank rescue. History doesn’t repeat, but Wall Street’s hypocrisy performs an encore every generation, each time with a fresh slide deck and the same hollow bravado.