Markets in Crisis: Why You Should Sell Technology Stocks Now
History Repeats: Lessons from the Great Depression in 'Another Fine Mess' (1930)
Just before the 1929 stock market crash, Joe Kennedy sold all his stock holdings after a shoeshine boy insisted, “Buy, buy, buy!”.
Wall Street has become the home of casino capitalism, where valuations, earnings, and debt no longer matter. My Uber driver assured me recently that I would make a fortune if I bought NVIDIA, whose market cap is currently around $3.6 trillion, and TESLA, with an eyewatering market cap above $1.2 trillion. Technology valuations are ridiculous. Spoiler alert: None of what’s coming is President Trump’s fault or has anything to do with tariffs. Today’s BUBBLE TROUBLE was caused by decades of money printing, QE, MMT, and other reckless Fed policies under Greenspan, Bernanke, Yellen, and Powell. It’s time to restructure the Fed, which is anything but independent!
$12 trillion BlackRock’s ETFs are part of the problem
Larry Fink’s BlackRock is too big to fail, bail, or jail—aka too big to exist. ETFs help facilitate today’s stratospheric valuations in technology stocks. Everyone is chasing the same dream. It’s more than an overcrowded trade; it’s Alan Greenspan’s ‘Irrational Exuberance’ 5.0 on steroids.’ There is far too much complacency and too many cracks in the markets, none of which Powell mentioned, but, in fact, he purposely neglected at his last meeting.
Technology stocks have seen their market cap increase by nearly $4 trillion since the lows around April 8th. Trump policies and tariffs are to blame for everything, including the obscene valuations of the magnificent seven technology companies, NOT!
While stocks received an April-May boost from President Trump’s positive tariff comments, I would strongly sell into this rally as I remain highly concerned about the massive debt totaling $37 trillion, all created by the decades of misguided inflationary Fed policies.
Before Christmas 2024, Apple’s market cap had bubbled to $4 trillion. This was the magnificent seven-stock peak bubble, which is dangerous. I cannot get my Uber driver’s advice from my head: “Buy, Buy, Buy—YOU DON’T UNDERSTAND, IT’S DIFFERENT THIS TIME.”
At 8:30 AM, the Bureau of Labor Statistics released the May Consumer Price Index (CPI), signaling inflation has come down more than market expectations. We expect better-than-expected Producer Price inflation data in tomorrow’s 08:30 AM release!
Greenspan, Bernanke, Yellen, Powell’s Debt Tsunami: Bond Market in Peril
As many investors remember, Joe Biden’s U.S. Treasury Secretary Janet Yellen altered the yield curve strategy, financing a significant portion of U.S. debt by issuing short-maturity bills and notes. Yellen should have funded far more long-term debt by issuing 10-year notes at rates below 1%.
Yellen’s yield curve policy error alone will cost U.S. taxpayers between $400 and $800 billion in extra interest payments on our debt. Fueled by Bidenflation, as evidenced by the highest CPI inflation in 40+ years, 9.2% recorded in July 2022 (above), rates had to rise sharply. For years, Yellen and Powell repeatedly misrepresented the situation, lying to Americans and the media, “Inflation is transitory.” Inflation was never truly under control—so much for ‘honest’ experts!
Bond Prices have surged as the Fed refuses to cut rates despite the massive refinancing needs.
Based on the 10-Year Note currently yielding 4.45%, a stronger U.S. dollar, and this week’s benign inflation data, the Fed has room to cut rates. However, the Fed remains behind the curve, with the EU cutting interest rates again last week. That was the eighth time the European Central Bank cut rates in a year, compared to the Fed’s three cuts. One may only imagine that the Fed is motivated by politics, not its dual mandate of price stability and full employment, as it claims.
Recently, the U.S. dollar strengthened in the foreign exchange markets following the Federal Reserve’s ‘wait and see’ policy announcement, particularly against Japan’s yen, which I have highlighted in my last article. Next week, the Fed meets, and there is an 80% chance they will get their policy wrong again.
Powell’s last press conference: What stood out - He repeatedly mentioned the Federal Reserve’s dual mandate several times: 1) Price stability, and 2) Full employment.
Powell oddly mentioned how Trump’s tariffs may cause unemployment and higher inflation. However, Powell never mentioned the dangerous asset bubbles in property, equities, and credit markets that the decade-plus of the Federal Reserve’s easy policies inflated. Commercial real estate, leveraged loans, and high-yield debt pose enormous risks to the banking system’s stability and the economy. In addition to the Fed’s refinancing needs, there is a waterfall of around $7 trillion++ of rollovers in the next two years. No ‘journalist’ in that press room called out Powell; it was pathetic pandering.
As mentioned above, the U.S. Treasury must refinance approximately another $8 to $10 trillion at rates above 4.5%—it’s almost as if the Fed is implementing policies that lead to a crash, causing the bubbles created by Bernanke, Yellen, and Powell to burst on Trump’s watch.
Trump Administration and Path To Prosperity Faces Intense Multi-Front Challenges and Obstruction
Since President Trump was elected, the good news is that U.S. gasoline prices have tumbled.
Trump Derangement Syndrome (TDS) is a Marxist phenomenon that’s real and dangerous.
The hypocrisy by today’s modern Marxist party, aka Democrat socialists and RINOs, is a real shocker. For example, Barack Obama deported 5.3 million illegal aliens, Bush deported 10.3 million, and the leader was sexual predator Bill “No, I did not have sexual relations with that woman, Monica Lewinsky,” Clinton, with around 12.5 million illegal aliens deported. Where was the outrage? No, crickets, and that is only one tiny reason we are witnessing the death of the legacy mainstream media, CNN and MSDNC will be the first to go.
The pace of protests, lawsuits, and opposition to every Trump policy since the return of President Trump’s second administration is now closing in on 400, which is unprecedented. It’s strange, considering President Trump won his recent presidential election by a landslide. He secured both the popular vote and the electoral college, receiving a broad-based mandate from the public to implement the policies he is delivering -promises made, promises kept.
The Problem: Predominately democrat appointed district judges are unlawfully legislating from the bench.
These are not judges but radicals in robes who aim to undermine policy with unnecessary delays and obstruction at every turn, gaslighting taxpayers while costing them hundreds of millions.
Today’s democrat party and their dishonest political operative partners posing as journalists are gaslighting the public. For example, these video clips on the LA insurrection do not lie (Here) and (Here). These were not peaceful protests, but part of a planned insurrection. Believe your eyes, its bullshit that the current protests are peaceful. Its exactlty the same gaslighting bullshit the Marxists peddled in 2017 and 2020.
It gets worse, and hugely unpopular anti-Trump EU want-to-be dictators, UK’s Keir Starmer, France’s Emmanuel Macron, and Germany’s Friedrich Merz, are all attempting to destroy Trump’s progress by starting a nuclear WWIII with Russia that cannot be won.
It’s TDS! Who is funding this obstruction? China? George Soros? Other foreign governments? These obstructionists must be stopped, and the rule of law must be restored.
For the past two years, I’ve been warning that a crisis is approaching and that those preparing and positioning for the next downturn will create generational wealth. Those who have listened to my advice on commodities and energy have more than doubled their investments with very low risk and volatility.
My closing thoughts: It’s no different this time, next time, or anytime; chasing nickels in front of steamrollers is dangerous. Keep an eye on the 10-year Note, and remember that commodities and energy will dominate as these Fed-induced bubbles burst—look out below!