GoldFish Charts

Inflation expectations are crashing. The data shows that the market’s projection for future inflation has plummeted, dropping to levels lower than we saw back in February at the onset of the renewed geopolitical conflict in the Middle East. This is a critical development because those elevated inflation expectations were the key justification for the aggressive rate hike premium that has been built into the market. The fear of runaway inflation was the only thing keeping the hawkish narrative alive. With inflation expectations now collapsing, the fundamental justification for further monetary tightening has evaporated. The central bank is highly unlikely to raise rates into an environment where the market is signaling that inflation is already rolling over. This means that the aggressive rate hikes currently priced into the market are wrong. The risk has shifted entirely. The market must now begin the process of pricing those hikes out, and that reversal is going to act as massive rocket fuel for the hard asset sector.

US CORE CPI (MOM) (JUN) ACTUAL: 0.0% VS 0.2% PREVIOUS; EST 0.2%

Paul Singer sent 115 analysts to figure out Bank of America's balance sheet - they found $75 trillion in derivatives on $150 billion of equity: "I challenge anybody in the room, outside of the room,come tell me what that looks like" this is him explaining why no one - not regulators, not investors, not even the banks themselves - knows the real financial condition of any major bank, and why the next crisis will be worse than 2008 "$150 billion of equity, $2 trillion of assets on the balance sheet. but here's the problem - $75 trillion, that's with a T, of derivatives. that makes the financial condition of Bank of America completely and utterly opaque" "I challenge anybody in the room, outside the room - come tell me what that looks like. what we found in '08 is the insiders didn't understand what was on their own balance sheets. Stan O'Neal, Dick Fuld, Chuck Prince - billions of fake AAA garbage" bookmark & watch the full conversation ↓

The S&P 500 has never delivered above average returns after these 18 year cycle peaks over the last 100 years. History doesn't repeat perfectly, but it often rhymes. Go back to 1900s, then every 18 years after that, and a remarkable pattern emerges. • 1918: Around a 30% decline. • 1936: More than a 55% crash. • 1954: Five years of dead money. • 1972: Nearly a 50% crash. • 1990: Around 20% total return over the following five to seven years. Positive, but still below the long term average. • 2008: More than a 50% crash. Not once over the last century has this point in the cycle delivered above average long term returns. Now ask yourself... Do you really think it's a coincidence that the Gold-to-Dow ratio is sitting on major support seen only a handful of times in history? Do you think it's a coincidence that the Buffett Indicator is at the highest level ever recorded, the Shiller P/E is approaching dot-com extremes, and almost every major valuation metric is flashing red? Or do you think this time is different because of AI? Investors said the same thing during the dot-com boom. They said it when automobiles transformed the economy. They said it when radio arrived. They said it again when television changed the world. Every generation believes a new technology has rewritten the rules. It never does. Technology changes. Human psychology doesn't. Markets move in cycles. Valuations matter. The COVID decline wasn't a true secular bear market. It lasted only weeks before unprecedented stimulus pushed markets to new highs. The 2022 decline was painful, but it wasn't the kind of prolonged wealth destruction seen in 1929, 1973 or 2008. Most investors today have never lived through a genuine secular bear market. When one eventually arrives, it has a way of humbling people very quickly. History never guarantees the future. But ignoring over 100 years of evidence because "this time is different" has rarely ended well.