James E. Thorne

18.3K posts

James E. Thorne banner
James E. Thorne

James E. Thorne

@DrJStrategy

Chief Market Strategist @WellingtonAltus. PhD Econ. Astute, observations and conclusions. Personal views. Not investment advice. Please do your own research.

Katılım Kasım 2019
33 Takip Edilen112K Takipçiler
Sabitlenmiş Tweet
James E. Thorne
James E. Thorne@DrJStrategy·
Gibbon, Trump, Bessent, AI – and a five‑digit S&P 500. What happens when late‑imperial America collides with agentic AI and an America First, supply‑side policy regime? This piece connects Gibbon’s Rome to today’s Washington and argues that a Warsh‑Bessent‑Druckenmiller mindset could push the S&P 500 not just past 8,000, but toward a target that starts with a “1.”
Wellington-Altus@wellingtonaltus

“The game itself is changing.” In his July #MarketInsights, @DrJStrategy demonstrates how investors should reposition their strategies to capitalize on the new opportunities of Trump’s America First rebuild—or risk sitting on the sidelines. ow.ly/Ehq150ZiEQu #Investing #AI

English
6
20
119
21.3K
James E. Thorne
James E. Thorne@DrJStrategy·
Largest inflation decline in over six years. Core inflation comes in at 2.6%. Four years ago with Biden inflation was at 9.1%. Watch the consensus crowd on Wall St execute a familiar pivot. Only weeks ago, the dominant narrative pointed to imminent rate hikes, driven by the so-called “Iran shock” and reinforced by the ECB’s tightening. The argument was framed in terms of central bank credibility: if the ECB hikes, the Federal Reserve, under Chairman Warsh, must follow. That logic is flawed. It rests on a narrow, demand-centric view of inflation that has long dominated Wall Street thinking, the growth is bad. The Keynesian reflex is to treat inflation as a function of excess demand, with higher rates serving as the primary corrective tool. Yet this framework struggles when inflation is rooted in supply constraints rather than overheating demand. The second- and third-order effects so often invoked, wage spirals, tariffs , embedded expectations, are not immutable laws. They are contingent outcomes. But when supply is impaired, tighter monetary policy can exacerbate the problem rather than solve it. Basic supply side theory. Housing offers a clear example. Elevated rates have constrained new construction, tightened inventory, and reinforced price pressures in shelter, a major component of inflation indices. In such cases, policy is not restraining inflation; it is helping to sustain it. CPI ex shelter was -0.7% MoM. This raises an uncomfortable possibility for policymakers. If inflation is being driven, even partially, by supply-side bottlenecks, then rate cuts, not hikes, may be the more effective tool. Lower financing costs can stimulate construction, unlock capacity, and expand supply, easing price pressures over time. That perspective has been largely absent from the policy debate for decades. But as the limits of demand management become clearer, it may be due for reconsideration. For Chairman Warsh, the implication is straightforward but politically fraught: credibility is not established by reflexively tightening in the face of inflation. It is established by correctly diagnosing its cause. If the source lies on the supply side, particularly in interest-sensitive sectors such as real estate, then easing policy, yes Rate Cuts, may be the more credible response.
James E. Thorne tweet media
Fox News@FoxNews

Consumer prices post their biggest monthly drop since 2020... and the new Fed chair is sending a clear message: "Inflation is a choice." Kevin Warsh says the Federal Reserve's "number one objective" is getting monetary policy right, saying that inflation over the long run is largely determined by the Fed. "If we get policy right, and I can assure you we will, the inflation surge of the last five years will be a thing of the past."

English
9
7
28
2.4K
James E. Thorne
James E. Thorne@DrJStrategy·
Truth 👇
Overton@overton_news

This is one of the most important moments ever aired on CNBC. Billionaire investor Chamath Palihapitiya says the media lied to millions of Americans about President Trump, and that after going back to the original source material, he realized he had been completely misled about Trump’s character. PALIHAPITIYA: “The reality is that most of us were lied to by the media about President Trump.” “And if you just go back to the source material, you should take away two things.” “One, he didn’t say half the things he said, and two, why did these other people just fabricate what they wanted to say so that they could essentially assassinate his character?” “I think that that second thing is completely unacceptable in America, and there’s still been no repercussions, really.” “I took the time to learn about it. I admitted where…you know, the way that I met him was, I admitted on the pod, which, you know, has millions of viewers.” “And I said, I got it totally wrong because I went and I watched Charlottesville.” “And, you know, the first person to call me? President Trump.” “And I got to know him and I put the phone down, I called my wife, and I said, we got it TOTALLY, totally wrong. We were lied to.” “And then I got to know him and he is fantastic!” @chamath

English
35
43
381
29.5K
James E. Thorne
James E. Thorne@DrJStrategy·
Keynesians, Warsh, and the Fed’s Wrong Inflation Fight Wall Street and the Federal Reserve continue to cling to a Keynesian orthodoxy that is not merely outdated, but increasingly contradicted by the data. Today’s CPI release should put that tension in plain view. For years, investors and policymakers have insisted that strong growth and low unemployment are inherently inflationary. The prescription has followed predictably: tighten financial conditions, suppress demand, and accept slower growth as the price of stability. Yet the evidence no longer cooperates. Inflation has moderated even as labour markets remain firm and activity resilient. This is not a paradox. It is a repudiation. Inflation is not driven by “too much demand” in the abstract, but by supply constraints—energy shocks, fractured supply chains, regulatory drag, and insufficient productive investment. When supply expands, growth becomes disinflationary. When supply is constrained, tightening demand merely produces stagnation. The Powell Federal Reserve, however, remains structurally committed to fighting the last war. Its toolkit is calibrated to crush demand, not enable supply. Warsh will change this. By keeping capital artificially expensive, it is impairing the very adjustment mechanism that resolves inflation: investment in productive capacity. Small and medium-sized businesses, the marginal drivers of output, are the first casualties of this approach. Wall Street’s parallel fixation on tariffs as inherently inflationary reflects the same analytical failure. Strategic tariffs, deployed to reconfigure supply chains and incentivise domestic production, can alleviate structural bottlenecks. To treat them as uniformly inflationary is to ignore second-order effects that matter far more than first-round price changes. Even the language of “hawks” and “doves” obscures more than it reveals. The real divide is between those who believe inflation is cured by suppressing growth, and those who recognise that it is solved by expanding supply. Today’s CPI should end the pretense. Growth is not the problem. The refusal to enable it is.
Rapid Response 47@RapidResponse47

"Expecting a headline number to be negative...this is 4X more negative!" CPI fell by 0.4% in June, the largest decline since April 2020—and below the forecast of every single Bloomberg economist. Core inflation also came in better than expected, falling to 2.6% year-over-year.

English
31
20
142
12.2K
James E. Thorne
James E. Thorne@DrJStrategy·
Contentious thesis. Next move by Fed will be a cut. And it will happen in 2026. Have a nice day.
English
63
67
738
22.2K
James E. Thorne
James E. Thorne@DrJStrategy·
Trump’s Gut Was Right About Hormuz The same experts who sneered at Trump’s “gut feel” on Hormuz are now living inside it. The people who insisted he had no strategy were, in fact, refusing to see the only strategy that ever mattered: keep the world’s most critical energy chokepoint under American power, not Iran’s. For years, the foreign‑policy clerisy mocked his instinct that allies were freeloading on U.S. security guarantees and that Iran was gaming a system rigged against American taxpayers. They called it “primitive” to talk about tolls, blockades, and hard control of sea lanes in an age of rules and norms. They assured us that delicate understandings and half‑enforced red lines would somehow keep the peace. Instead, Iran read that elite condescension as weakness and overplayed its hand, attacking tankers, pushing proxies, and treating Hormuz as its private leverage over the global economy. Each escalation proved President Trump’s basic thesis: a chokepoint either belongs to a responsible hegemon or it becomes a permanent hostage situation. So yes, it offends refined sensibilities when Trump says out loud that America will control the strait and get paid for it. But the joke is on those who confused their own aesthetic dislike of Trump for strategic insight. His blunt instinct, that U.S. power should not underwrite global energy flows for free while Iran menaces them with impunity—has beaten their elegant theories on contact with reality.
Sean Parnell@SeanParnellASW

“The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’” — PRESIDENT DONALD J. TRUMP

English
41
36
213
14.2K
James E. Thorne
James E. Thorne@DrJStrategy·
No one should be surprised!! Core CPI negative MoM CPI negative MoM
English
33
13
213
12K
James E. Thorne
James E. Thorne@DrJStrategy·
What will the inflation porn cohort do now? CPI -0.4% MoM Iran Supply shock dissipates. But we need to wait for the Tariff inflation to kick in. The Fed and Wall St are so wrong.
James E. Thorne tweet media
English
38
31
246
12.9K
James E. Thorne
James E. Thorne@DrJStrategy·
The pause the refreshes. Memory, not GPUs, is quietly becoming the beating heart of the AI trade. SK Hynix, long the quiet backbone of the generative AI boom, now dominates high-bandwidth memory and just delivered a 72 per cent operating margin in the first quarter of 2026, with its entire HBM output for the year already spoken for. Until days ago, most US institutional investors could not own it. In a market where the economics of AI are increasingly determined by memory bandwidth, SK Hynix has been the key node sitting outside the core of US capital. That changed on July 10, when SK Hynix listed American depositary receipts on Nasdaq under the ticker SKHY, in what is set to be roughly a $29b raise, the largest US listing by a foreign company. This is not just another tech float. It is a structural opening in access to the dominant AI memory supplier at the precise moment HBM has become a chokepoint input for Nvidia and its peers. The paradox is that SK Hynix arrives in New York into weakness. The recent sell-off has been driven less by fundamentals than by Korean retail positioning and leveraged ETF mechanics. Memory and semiconductor charts have gone parabolic; a pullback was inevitable. But this is a pause that refreshes, not a broken thesis. For investors who missed the first leg, the pause that refreshes in Micron and SK Hynix should be used to your advantage. Yes, speed bumps due to psychology or positioning would not surprise in the near term. They are to be bought. To be clear for long term investors Micron is not a sell; it, too, remains a buy, a core holding in a portfolio. Memory is the place to be. Memory is intelligence, and in the long run the owner of intelligence wins. But in the early days of the AI arms race, the picks-and-shovels of that intelligence remain one of the cleanest investable themes.
English
8
9
106
11.5K
James E. Thorne
James E. Thorne@DrJStrategy·
The Clarity Act. Will the Bankers ever be satisfied. The short answer is no. The ABA’s latest stablecoin broadside is pure 1970s money‑market déjà vu. Back then, banks warned that money market funds would starve communities of credit; today, it’s yield‑bearing stablecoins supposedly draining deposits that “support” Main Street lending. The through‑line is defensive: whenever innovation offers savers market‑rate returns outside the insured‑deposit box, banks rediscover their sudden love for small businesses and farmers. The irony is that the new CLARITY draft largely gives the ABA exactly what it demanded, Reg‑Q‑style bans on passive stablecoin yield and tight limits on “yield‑like incentives” and yet it still complains. Having secured protection for its subsidized funding base, it now insists that even residual rewards are intolerable.
Patrick Witt@patrickjwitt

Asked and answered. Give it a rest.

English
41
38
298
27.1K
MC
MC@corvette72778·
@DrJStrategy What would all these crazy historic valuations hit with an SP500 14k? By all metrics valuations are off the charts! You've gotten the mega IPOs, secondary offerings, debt insurance by cash flow machines, money losing companies and negative FCF by Mag7. x.com/i/status/20744…
The Aden Forecast@TheAdenForecast

The stock market has never been this expensive. Not in 1929. Not in 2000. Not even before 2008. This chart combines 9 different valuation metrics dating back to 1900. Considering the sharp declines following ATH valuations, we continue to advise caution. Stay informed. Stay prepared.

English
2
0
1
157
James E. Thorne
James E. Thorne@DrJStrategy·
S&P 500 target 14,000 My run‑hot thesis Yes you’re not bullish enough. Markets are finally asking the right question: what kind of earnings and multiples can a Trump‑era, AI‑powered “run‑hot” regime actually support, and how does that differ from the post‑GFC world of secular stagnation and permanent caution. The answer looks less like a replay of the 2010s and more like a modernised version of the late 1980s and 1990s, when growth, productivity and valuation rose together. For those who take the long view, not the day‑trading crowd, the run‑hot thesis is a framework for compounding real earnings and productivity over years, not for trading the next headline. In this sequel, Trump runs the economy hot, nominal GDP grows near 7 per cent a year and S&P 500 earnings grow at roughly 1.5–2 times that pace, powered by an AI capex super‑cycle, full expensing and a deliberate rebuild of productive capacity. If earnings are around US$400 in 2027, that regime produces roughly US$600–650 by 2031, implying 10.5–14 per cent annual EPS growth. From there, valuation drives the range of outcomes. In the base case, the market believes the story but stops short of mania: earnings near US$600, forward multiples around 22 times and an S&P 500 in the low‑to‑mid 13,000s. A stronger supply‑side bull case, where investors treat this as a durable productivity reset, stretches to 25 times earnings and 15,000–16,000. A euphoric 1999‑style phase pushes the multiple towards 30 times and the index into the 18,000–19,500 band, with dividend reinvestment lowering the hurdle on a total‑return basis. The alternative, a world that only delivers 10,000 by 2031, is simply the old regime in disguise: slower nominal GDP, middling earnings and flat multiples. The run‑hot thesis says that anchor is wrong. In an AI‑driven, supply‑side American system, investors either price a genuine repricing of productive capacity, or they mis‑price a decade of higher output before it happens.
English
28
50
434
36.3K
James E. Thorne
James E. Thorne@DrJStrategy·
AI, Intelligence and the Tragedy of the Commons: Ellison Nails It. Larry Ellison has already given Wall Street the only question that matters in AI: own the knowledge, and it barely matters who builds the brain. The true value in AI is not the size of the brain, it is who controls that brain and, by inference, who owns and governs the data behind it and right now Wall Street is fixated on the wrong part of the value‑creation stack, bidding up models while ignoring the quiet consolidation of data and control. Instead of asking who owns the data, investors are mesmerized by model releases, benchmark scores, GPU counts, and token throughput, as if “intelligence capacity” were the asset that will compound over decades. It isn’t. The asset is governed, permissioned data and the workflows built on top of it. Models are just tools plugged into whatever corpus will have them. The ‘Tragedy of the Commons’ explains why this mispricing is so dangerous. For a decade, labs and clouds treated the world’s information as an open pasture, scraping the internet under the assumption that the data “commons” was free and effectively infinite. When a valuable resource is left open to unpriced, ungoverned use, each actor has every reason to take more and almost no reason to hold back, so the commons gets stripped until politics and law slam the gates shut. That is exactly what has happened to the data environment AI feasted on. Ellison’s hierarchy is ruthless and correct: data is the asset, workflows are the leverage, models are tools. Yet the Street still talks about “AI moats” in terms of proprietary architectures and training runs, not exclusive rights over high‑value corpora and deeply embedded decision processes. It is repeating the same error it made with the early internet and with mortgage technology, confusing the instrument for the underlying collateral. If you take the tragedy of the commons seriously, the conclusion for investors is blunt. The open data pasture is gone; what replaces it is ownership, governance, and scarcity. Durable value will sit with the institutions that control permissioned corpora and the workflows that make them indispensable, not with whichever lab wins the next benchmark cycle on a shrinking commons. Put plainly, Wall Street is once again mistaking the instrument for the underlying. The smart money should stop chasing the smartest model and start asking a simpler, harsher question of every AI trade: who owns the data, who owns the workflow, and who can say no?
Dustin@r0ck3t23

Larry Ellison just told every AI company on Earth they’re fighting the wrong war. The entire industry is racing to build the smartest model. More parameters. Better benchmarks. Faster inference. Ellison isn’t building a model. He’s controlling what every model needs to be useful. Every frontier AI trains on the same public internet. Same scraped pages. Same recycled text. When everyone has the same data, it’s not an advantage. It’s a floor. The only data that creates separation is private. Medical records. Financial models. Defense systems. Proprietary research locked behind firewalls for decades. That data already lives inside Oracle databases. Not Google’s. Not Microsoft’s. Not Amazon’s. Ellison didn’t enter the model war. He positioned himself above it. He rebuilt the database so AI can reason on private data without ever absorbing it. Training folds your data into the model permanently. Once it’s in, it never comes back out. Reasoning thinks with your data and hands back only the answer. The data never moves. One is surrender. The other is sovereignty. Ellison: “These are remarkable electronic brains.” He didn’t build the brain. He owns what the brain needs to think. Everyone is building the most powerful mind in human history. A mind is only as valuable as what it’s allowed to know. Own the knowledge and it doesn’t matter who builds the brain. That pattern has held through every era of human civilization. AI doesn’t break it. It proves it.

English
18
21
136
23.6K
James E. Thorne
James E. Thorne@DrJStrategy·
South Korea’s overnight selloff reflects an over‑crowded AI and semiconductor trade finally breaking. Parabolic charts in key chip names signaled unsustainable momentum, with price action detached from realistic earnings trajectories. Such vertical moves are inherently dangerous, because any modest shift in sentiment triggers forced deleveraging, margin calls and indiscriminate ETF selling. The result is an air‑pocket: liquidity evaporates just as everyone heads for the exit at once. This isn’t a mystery macro shock so much as a classic blow‑off top in a crowded theme, now reverting violently as positioning, not fundamentals, drives the tape. Old rule avoid parabolic charts.
James E. Thorne tweet mediaJames E. Thorne tweet media
English
32
31
222
21.3K
James E. Thorne
James E. Thorne@DrJStrategy·
For the record. Kevin Warsh’s Quiet Regime Change at the Fed Kevin Warsh is not a hawk. He is a pro-growth monetary reformer who wants to restore price stability, reject mission creep, and rebuild a constitutional central bank that uses modern data instead of stale models, Phillips curves, and Keynesian reflexes. Yes, Wall St consensus is wrong again. Like Scott Bessent, Warsh understands that the Fed’s deepest problem is institutional sprawl. A central bank meant to preserve monetary stability has drifted into credit allocation, financial repression, and de facto debt management. His answer is to narrow the remit, shrink the balance sheet, and scrape away the layers of forward-guidance theater that turned FOMC language into a third policy instrument. The implicit logic of a smaller, quieter Fed balance sheet is more private credit creation, capital formation moves back into markets rather than remaining warehoused on a taxpayer-backed public portfolio. Warsh also rejects the old Phillips curve intuition that strong growth and tight labor markets are inherently inflationary threats. He is not anti-growth, he is anti-fiscal dominance. In his framework, inflation comes from policy error, too much monetary accommodation for too much fiscal excess, not from prosperity itself. That is why he can be pro-AI, pro-crypto, and broadly supply-side at the same time. He sees productivity growth, technological innovation, and new forms of private capital formation as disinflationary forces when the nominal anchor is credible. Just as important, Warsh appears to grasp the constitutional arrangement. The Fed is not supposed to moonlight as an all-purpose technocratic state. It is supposed to preserve the currency, provide monetary order, and leave the rest to elected officials and private markets. That requires price stability first, but it also requires better inputs, more modern data, more market signals, less faith in lagging aggregates and broken academic priors. This is not hawkishness. It is a bid to replace an antiquated Keynesian institution that has come to act as if it were above the constitution with a narrower, pro-growth, market-facing Fed that stabilizes money, scraps pseudo-scientific forward guidance, and gets out of the way.
Bloomberg@business

Kevin Warsh is about to make his first appearance before Congress as Fed chairman, and in two days of testimony he’ll have new US inflation data to discuss with lawmakers bloomberg.com/news/articles/…

English
45
135
604
69.9K

Keşfet

@corvette72778 @elonmusk @BarackObama @taylorswift13 @cristiano @BillGates @NASA @nikifrancismediavine