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Sunday, March 30, 2025
Please critique- interested in what others may have noticed.
I love the stock market. It’s the largest, most complex puzzle in the world. It’s a game that’s impossible to ‘beat’ completely, but gifted observers are still rewarded with a pure, measured amount: returns. Asset classes each have their own function and best-use case within the market, and you ‘win’ if you buy them before everyone else buys them. My favorite thing? It’s all probability. Nothing is certain, and nobody can pretend it is, like they can in the real world. The stock market is honestly random.
My methodology at this impossible game is similar to that of a detective trying to solve a crime. If I’m presented with a fact, any fact, say, “The FED is lowering rates,” there are perhaps ten, twelve, or twenty, or a thousand explanations for why they might be doing such a thing. Maybe they think inflation has burned off and want to start a rally. Maybe they think a recession is about to start and want the fiat-pump-dump economy to have one last gasp. Maybe Jerome Powell misspoke at the meeting.
You can’t possibly make a decision based on one event. But when you have another event, say, Costco cutting their prices 40%, and the price of eggs falling after an insane high, then the number of likely reasons for the first event has to line up with the reasons that caused the second event too, because the truth, though it will never really be attained, caused them both. Add a thousand events, a thousand individual circumstances, and a blurry picture emerges. As time passes, add other explanations fall away, and the blurry picture sharpens.
I observe all the time. I cannot turn it off. If I walk past a pickup truck on the street, I’ll notice that it’s parked in front of a factory in New Hampshire. From that, I’ll think it’s likely that the wages are not high, probably less than 100k per year. Then I notice the pickup truck is a nice, new model, one that easily cost 100k, or 70k. From that, I’ll think that the person is likely in debt. Then I’ll walk past a billboard, and it advertises a credit union. I wonder to myself how many people actually know what a credit union is.
These individual facts don’t help much. Big determiners, like tariffs, rate cuts, and yield curve graphs narrow the odds much more considerably, and this is what will be focused on.
Take the example of the eggs. The price of eggs skyrocketed to $9 because of bird flu. Then they fell, again, to $4. I assumed that they had solved the bird flu issue, but then happened to come across information that indicated the prices did not fall because of bird flu. They fell because consumers were no longer able to pay for them. That’s right- Americans ruled out eggs in the grocery cart because they cost $9. Combine that with a tidbit I picked up that said Costco was cutting its prices 40%, and that Walmart, which normally does very well during pricey times, had low customer volumes, as did the rest of the sector, during the holidays. If things are too expensive, then people go to Walmart to buy gifts. But this year, they didn’t. Retailers braced for christmas shopping, and no christmas shopping came. $9 eggs and Walmart gifts stacked on shelves. The price wasn’t just too high- it was broken. But I’m getting ahead of myself.
To explain this fully, I need to start with the key breadcrumbs — beginning about a year ago. I rewatched The Big Short, and on a whim, decided to check the major banks’ exposure to credit card debt. Right away, I found something disturbing: banks are still dealing in tranched debt assets. But instead of mortgages, they're using credit cards. The same structure. Different packaging.
I tried digging deeper, even with access to a Bloomberg terminal, but hit a wall. The system locked me out unless I shelled out $50,000 and registered as a financial institution. So I pivoted. I focused on macro data instead, indirect indicators of just how rotten things already were.What I found wasn’t pretty. Consumer debt is skyrocketing. Savings are zeroing out. It’s not just theoretical. Every day, I see signs of consumer capitulation.
Thus was born my first thesis: there would be a crash. Not from mortgages this time, but from the general irresponsibility built on any kind of debt you can think of. I couldn’t pinpoint the maturations, so I gave it a rough window: ten years.
Another critical datapoint is the government’s $30 trillion debt. Though let’s be honest, we probably don’t even know the real number. That figure has been snowballing for decades, the result of a system addicted to borrowing. It’s the numeric form of screwing over the next guy in charge. It’s a game of hot potato, where each administration prays the music stops under someone else.
Last time the banks got fancy with credit, the government stepped in and restarted the system. Whether they’ll do it again is unclear. That depends on the madness of men. But one thing seems likely. The sheer size of the debt now makes it less likely they’ll print. In 2008, they had room. After COVID, they printed again. But near the ceiling? They might not be able to. More on that later.
COVID was another major determiner. It was the perfect, sudden, hard acceleration of inflation exactly what we didn’t need. It exposed the inflation that had been lurking on balance sheets since the 2008 money-printing spree. You can’t inject that much liquidity into a system and expect no consequences. You can dress it up with accounting tricks to make inflation look tame, but if the money supply grows faster than the economy, the inflation is just waiting. COVID sped up the timeline. It hit consumers hard and triggered another round of printing. That was the moment the long fuse got shorter. These three major determiners kept my crash forecast at a likely ten years or less. Until I had more information, I could not narrow it down further.
A third factor is sky-high P/E ratios across the US stock market in growth stocks, coupled with a toxic business philosophy. The conventional wisdom is that in order to earn new investors, companies have to beat earnings and revenue every single year. They have risen to the challenge, but in the last few years, have been stretching and stretching to earn Wall Street’s favor, earning growth stocks a very high P/E ratio- and pushing an already struggling consumer harder every year. These so-called “growth” stocks have very far to fall- so far that Warren Buffet pulled into cash, and Michael Burry went to China. When Buffet pulled out of major indices, that was a very, very bad sign. The iconic value investor has stated, with this move, that no value is left to be found, and wordlessly pulled into cash.
Then the new information came, and it sped up my timeline considerably: the yield curve re-inverted.
The yield curve, the spread between the 10-year and 2-year Treasury yields, has predicted every recession since World War II except for 1966. It has been deeply inverted since October 2022. This is now the longest yield curve inversion in history.
When the curve re-inverts, flipping from inverted back to normal, it is not a relief. It is an alarm. Historically, it signals that something very bad is about to happen. The curve re-inverted in July 2007, November 1989, and again in February 2025. Each time, a recession followed within a year, often sooner. This was the signal I had been waiting for. Now the rest of the picture had to line up. After the election of Donald Trump, assets and especially U.S. equities rallied. Then came the tariffs. First floated as a negotiation tool, then actually implemented. That tightened my timeline further. I expected markets to react badly at first, forget about it, and then crash once the tariffs showed up in earnings reports. That explains the bizarre sideways action we are seeing now. This is classic bad sentiment. Retail investors are backing off. Institutions are repositioning. We are not crashing yet. We are leaking. So where are the institutions and ultra-wealthy moving? Bitcoin. And yet, despite being the dream of every Bitcoin holder, it is moving sideways. Odd.
The institutions, including the US government, moving into bitcoin, now of all times, as all the traditional analysts throw up their hands, is very strange. This is because there are very few realities that could cause these two events- which are diametrically opposed. One explanation is the institutions are readying themselves for the largest rug-pull that the retailers have ever seen. Another explanation is that institutions know something we don’t, and are already getting one foot in the door before something, whatever it is, blows a major gasket, and the US either prints or fails to print. Central banks and countries are also madly buying gold, so much gold that it caused drama with the London exchange paper gold market. This vanished from the news fairly quickly- but I remembered it.
I see many complaints about the cutting of essential government departments, foreign aid, and other things from the government. This is causing all hell to break loose, as the largest employer of the largest economy hemorrhages employees, who will soon have to draw their savings out of banks to pay rent and buy food. Those banks will have to decrease their position sizes, and the snowball will roll on. Jobs are one the most important indicators of crashes, and the job data is some of the least helpful, because it has long been badly measured. The unemployment rate has ceased to be a good measure of recession, but the US government firing workers at this rate will not be good for the consumer.
Why would the government be firing and cutting this frantically? Either they are draconian and heartless, or they are draconian and heartless and panicked, because we actually couldn’t afford any of it to begin with. Either way, in about a year, I figured the firings would start forcing people to pull from their savings in the bank, which will force the banks to exit their positions and maybe start runs. When the employer of last resort starts laying off, the cycle is near death.
After I saw the yield reinversion and layoffs, I tightened my timeline to a year. Then came another major determiner- NVDA earnings. NVDA beat earnings, again, because it has solid fundamentals and is still firmly cemented as the AI profiteer. But it sold off anyway, just like many major earnings sold off in winter around the holiday absence of shopping. This was a major tell- if good news becomes bad, and bad news becomes bad, then I considered my timeline tightened again, to eight months, or seven. Then, tariff concerns hit hard, and I thought the crash was here. NVDA stumbles, and the rest of the herd falls.
I was wrong- we have ground sideways for a month now, and that in and of itself is new information. It means that a mere crisis in confidence caused by tariffs is not enough to push the boulder, else we would have been crashing already now, and I wouldn’t need to write this thesis. After I braced, and the crash didn’t come, I realized that this was very similar to 2008, again. There was an odd grind sideways, where the S&P tries to reach higher highs, but fails, three times or so, followed by a period of sell-offs. The crash in 2008 wasn’t caused by these crises in confidence- or even by the credit bomb exploding with the collapse of Bear Stearns in March. It was caused by a sudden collapse in confidence in October.
Why October?
Well. Who ever feels good in October?
Traders have long known October as the month when the market gets cold feet. It’s not just folklore — look it up. The biggest crashes cluster there. October 1929. October 1987. October 2008. Something always seems to break. At first glance, it seems arbitrary. But after reading The Hour Between Dog and Wolf, it didn’t feel arbitrary at all. That book makes the case that markets are ruled by biology as much as logic. Cortisol, adrenaline, testosterone — they shape risk appetite, mood, behavior. In spring and summer, testosterone tends to rise, along with market confidence. But by fall, those levels drop, and cortisol takes over. Fear has a season. Maybe October really is wired into the system. Still, timing a collapse is a fool’s game. It could be November. Could be December. But you couldn’t catch me dead in any assets during October 2025.
One piece of information I’m still waiting on is the rate cut expected this summer. Jerome Powell is getting pressure from all sides. Trump is hammering him to lower rates to make room for his vision of a new America. Investors are begging for cuts so they can keep funneling money into the stock market.
Powell, for his part, insists that the money printing in 2008 and during COVID means rates should stay high, maybe for a long time. But he knows he can’t follow through on that without triggering a crash. Raising rates now would be an admission that the data has been lying, that inflation never really left, and that the entire market is overleveraged. If he goes that route, investors will sell. Fast.
So for now, Powell holds steady. He keeps rates unchanged and pretends everything is fine, that Americans not buying eggs is somehow normal. But he can’t stall forever. Once the tariff noise fades, markets will look for the next excuse to climb, the next catalyst for another euphoric leg up. And Powell will give it to them.
He’ll concede with a small rate cut this summer, just enough to buy a little more time, calm the noise, and try not to blow up the whole machine.
I’ll be taking that rate cut, whenever it comes, as a klaxon alarm. It will be the final chance to sell into strength, because most investors will see it as the start of a new Trump rally. But I won’t. I’ll see it for what it is: Powell playing the only card he has left.
Behind the scenes, institutions will be exiting through their dark pools like never before. Quietly, efficiently, ahead of the crowd.
Rate cuts after a yield curve inversion aren’t the green light everyone thinks they are. They don’t signal recovery. They signal desperation, a last-ditch effort to pull up a plane that’s already nosediving.
As of this writing, my thesis and my portfolio are positioned for a period of sideways movement in the short term. I plan to exit all U.S. equities during the spring or summer rally, likely around the time of the rate cut. After that, I expect continued chop through the summer, followed by another bull trap in early fall. It may be weaker than the last. Then comes the crash. October is the most likely window, but it could stretch into November or December. It probably won’t wait much longer.
In the near term, the only clear winner is gold. Bitcoin, tech stocks, U.S. equities, and foreign markets will all struggle. Spring will bring a strong buy-the-dip rally. Prices will rise, possibly near or above previous highs. But that surge will not hold. It will be the second-to-last move before reality sets in. This also gives time for the Bitcoin cycle to play out, and then finish…right around October.
As summer drags on and the rally fails to break new ground, fear will return. We will see a quiet, indecisive market. It will feel like the summer before 2008. No momentum. No conviction. Just drift.
If a rate cut comes during this period, it might trigger one more upward move. Otherwise, markets will hang in suspension, waiting.
And in autumn, the illusion will break. Investors will realize the last push is over. The exit rush begins. Markets will sell off sharply in a full-blown flight to cash.
After the crash, new winners will emerge. The recovery will be sharp and fast, a true V-shape, as inflation comes roaring back. It never really left after COVID. We just buried it under credit cards and corporate balance sheets.
Everyone who fled to cash will suddenly realize the problem. Prices are soaring, and their money is shrinking. They’ll rush back into assets, desperate not to get left behind. If the U.S. prints, inflation will spike, and commodities will take off. If they don’t print, and instead begin the long, painful recovery we’ve delayed since leaving the gold standard, trust in the dollar will collapse — and commodities will still take off.
Gold will rise. Bitcoin, by then decoupled from the S&P, will soar. Both will leave traditional assets behind. U.S. equities and foreign markets might recover, or they might not. It will all depend on how shaken the world is after the crash.
This market has been downright bizarre. Unexplainable. Most people gave up trying to make sense of it long before I did — and I don’t blame them. It’s the most complex game on the planet, and there are machines far better at it than any of us. But what I don’t see are people updating their models to account for what doesn’t make sense. I see them rejecting it, dismissing it, pretending the confusion itself isn’t worth addressing.
It reminds me of the Bitcoin critics. They say it has no value. That’s true — in the way all currencies are true. It has the value we assign to it. And that value is about to explode. Because Bitcoin, for all the attempts to label it as a risk-on asset, as a meme, is a meme with no connection to the U.S. economy. It is tethered only to code.
The usual criticisms — energy use, fraud, transaction speed — once valid, are about to look like minor inconveniences. Bitcoin was created as a response to 2008. And this is starting to look like the version of 2008 we can’t print our way out of.
Yes, the U.S. dollar is still strong. It’s backed by the largest economy in the world, an economy that’s insulated and backed by a serious military. But that economy is now led by a government centralizing control and bracing for something ugly. I’m not sure yet if they are like Tsar Nicholas II, and have no clue what’s coming, or have inside information. That will be clear if we start to see our first trillionaires.
The US economy has been strong, the pump so long, fueled off the fumes of 2008 and COVID, that nobody can conceptualize that you might prefer an asset not connected to the US, even as the US begins its downturn into insanity. The world’s reserve currency has been running the world’s fiat game for a long, long time.
Note- bad times, not end times. The US is still the state best positioned in the globe, with deep resources, ports, and military immunity. The dollar is by no means dead- it will need rehabilitation, and it should not be surprising that other currencies will take up the mantle. US equities will do well, after either a lost decade or more steady growth, though I believe a lost decade to be more likely.
Traditional analysts aren’t just conflicting in their explanations- they’re confused. They’re trying to solve for stability, using past performance, in a system that is inherently unstable. This is why they will miss the mark, just like they did in 2008. They have good logic, and rotten premises. They’re debating interior design, but the house is on fire.
Why? Why did it end this way?
People don’t like reading the fine print.
Fathers sentencing soon
I am not an offender, but the adult child of one (28F.) I’ve been no contact with my father since the events unravelled in 2020-2021. My purpose in posting here is to share my story, and get any sort of insight, find someone who can relate to him or me, or have a discussion even to help me process it, because even though this happened so long ago it still plays in my head daily. I’m just severely struggling to move forward. I’ll try to keep the story as short as possible, so I really appreciate anyone who takes the time to read and/or respond.
Some background info, my father (54) is/has been an addict for a very long time. Alcohol/marijuana/meth/sex/porn… pretty much anything. Majority of my life I was aware of the weed and alcohol. In 2019-2020, he started losing a tremendous amount of weight and showed other signs of meth use. Once I was finally able to confront him with it, he promised to quit, and I told his whole family so that we could all hold him accountable.
2020, a few months into covid, I take my brother who was living with me to our fathers house only to find him completely strung out. He didn’t recognize me and threatened my life, so I had him 302’d.
While his family and I were trying to make plans moving forward, he kept calling from the psych ward denying drug use, claiming to have been only drunk, and adamantly requesting I bring him his phone. (He would not be allowed to have anyways)
I got his phone from his home, and wanted to find the proof that he had gotten drugs but instead found a lot more. The majority of it was just proof of just sex addiction that I’m not sure is important to the story. The important part was, in his hidden album, 9,000 photos of children in indecent positions. (Or as he stated, not actually illegal because they aren’t COMPLETELY naked) But I had also found things that pointed to him using VPN changing apps and buying bitcoin, and hiding this info under grocery lists in his notepad, so I know I hadn’t seen the worst of it.
Once this came to light, a huge fallout ensued with his entire side of the family and myself as I turned the phone into the police. I had a 1 year old and this was very scary and shocking to me. From what I know he did end up going to different rehabs and sober living houses.
During this time I cycled through emotions. Grief, anger, hatred, confusion, empathy. I’d felt so much guilt over what I’d done. Scared that if he went to prison and something happened to him that it would be my fault. But as far as I knew nothing ever came from me turning in his phone. He wasn’t arrested. By the end of last year I’d come to feeling that, although I wouldn’t have him in my life, I’d wished him the best and for healing and recovery.
However, at the beginning of this year things changed a bit. I reconnected with my grandparents and asked them the questions that had burned inside me. They told me that although up and down, he had been getting better, had been sober, had a job he could enjoy. Then revealed to me, that in March, my father was pleading guilty to federal charges on possession of pornography of prepubescent children. It made me sick. Again I was filled with guilt.. he had made changes for himself and my choice from years prior has ripped that from him.
That quickly changed though when I found out the charges were not from the phone I turned in, but instead from 2-3 years later. They caught him buying using bitcoin from someone.. some sting operation.
So where I sit now is full of rage, again. I’m not comfortable feeling so angry. All the time. He had a chance to not be that person. He had reached rock bottom. Losing contact and respect of his children, lost his reputation and friends.. all of it. But still decided to do it again???
I don’t know and I don’t understand. Can anyone help me understand?? Sorry for abruptly ending I just feel I’ve gone and wrote for way too long.
Bitcoin meetups for the UK this coming week.
https://bitcoineventsuk.substack.com/p/beuk-meetup-breakdown-42
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