Yeah, That Was Dumb - The Fed cutting rates with inflation above its target, the stock market at multidecade highs vs. GDP and public debt -- and rising T-bond yields -- telling it not too. Result: Equities have reached their highest valuations vs. GDP (2.5x) and debt (2.1x) on a year-end basis since 1928 and 1999. The US stock market now is the economy, and most data mean little vs. the implications for all assets of the next +/- 10% move in the S&P 500, based on most worthy VAR models. Copper and gold 100-day correlations to the S&P 500 have reached near the highest ever, with beta rising. Bullish copper, gold? Stocks likely have to go up. - Doubling down after a 10x in a highly speculative, volatile digital asset that tracks nothing, has millions of competitors, and taunting the market gods. Result: Strategy Inc (MSTR) may need to get stopped out for a bottom in Bitcoin. I expect a low-price cure near $10,000. Bitcoin has already flunked the test of 2026 by going down while stocks went up. What of millions of cryptos worth $ billions when stocks drop? What to expect: Post-inflation, deflation may be what plunging Bitcoin and crypts are signaling -- Bitcoin led the way up. Endgame is my take of Fed easing supporting risk assets. Affordability is a top issue in elections, and if incumbents want to get reelected, they have to get inflation under control now. A top force for that is a minor drawdown in the stock market, which at 2.5x GDP, would be the most significant headwind for the economy in about a century. If stocks stay resilient, inflation will remain underpinned and Democrats will be more likely to sweep midterms and 2028. If stocks drop (a matter of when) and stay down awhile, it would be a prime spark for recession. Some Takeaways: - President Trump needs lower crude oil and energy prices and WTI low-price cures since 2008 have been around $40 a barrel - Bitcoin and gold were great alternatives to beta, but went up too much and their low-price cures may be much lower - The stock market has to go up in 2H, or else - Or else could be the start of a trade of a lifetime - Will the US Long bond at 5.20% on Aug. 7 end 2026 at its highest year-end yield since 2001? - Stocks have to go up :) Full report on the Bloomberg here: https://blinks.bloomberg.com/news/stories/tje6her24u81 {BI COMD} @Bloomberg(Mike McGlone)