It's a New Bull Market, Right?

Last week's mention of the "It's a new Bull Market" crowd came with some contrasting views from our Brain Trust folks. This week we'll post some clear opposition to the Bullish crowd.

Now, shouldn't there be something more than markets and the economy in life? Of course. And from time to time we try to insert some something more. But not this week. We're just getting back from taking some time away from the daily grind. (I think some call this vacation, right?) Summer has begun. And this summer won't find any more extended away time from this poor fella (boo-hoo).

Of course, it's a choice, one we all make unless we've got to work 24/7/365. I can live with that.

So since vacation has become a misty memory, and I'd prefer resting up for the return to the office thing on Monday, what say we just get to the Brain Trust comments that oppose the Bull. But there's texture here, if you can find it.

-   Refutes “This is a new Bull Market in stocks

-   Next 2 phases: Decline later this year, followed by bull market in 2024

-   NB: Bear Markets don’t end I a whimper, as this one bottomed in October 2022

-   Current credit contraction not priced into stock market yet

-   Falling monetary liquidity will cause downturn in the fall – Re-liquification by Fed will cause stocks to rise in 2024.

-   Stock Indices now near a top

-   Keep exposure low – Patience of Bears now being tested. Patience very important,

-   NB: Entire rise of Dot Com Bubble of 1996-2000 wiped out the bear market that followed.

-   Crypto: Reiterates that all Crypto will end at zero

-   A new speculative bubble, even bigger than 2009/2020 could occur if Fed in cooperation DC eliminates fighting inflation.

-   7 Stocks in S&P had big gains, avg 53% - other 493 had no gains.

-   AI: Nothing new – In speculative Bubble – will not recommend anything here as it will end as all other speculative bubbles have ended.

-   Discussion of “Seasonal Adjustments” used to falsity economic data – BLS as one example.

-   CRE in big trouble – Converting office buildings to apartments is something that will take much time and require financing which is not now available.

-   Oil Sector will be vulnerable in downturn, even though valuations are attractive.

-   Reiterates that Gold and Silver are miserable inflation hedges.

-   Bankruptcies: 236 in 2023 vs. 109 same time last year – Bankruptcy bubbles create even more loan restrictions and credit market seizures.

-   Plunge in M2 Money supply in 2022 – first since Great Depression – will produce plunge in inflation short-term: excuse for the Fed to step on the accelerator next year.

-   Thinks Bonds will bottom and have a strong rally in 2024

Covers more than stocks, as you can see. 

The AI comments provide perspective. AI has become a darling - which typically means a speculation waiting for its demise. The perspective comes with the realization that AI is nothing new. Sure, it's been beefed up. But so what? Crypto beefed up quite a bit from the original Bitcoin. and where did that get you if you're a crypto-maniac?

Re the "Seasonal Adjustments" comments, this analyst has been on this for years. And he's mostly spot on. So beware stats, especially those spit by government.

Ditto for the Gold is a miserable inflation hedge. Flies in the face of many of those gold bugs, doesn't it? Then again, when you look at Gold vs. the value of the US dollar since 1971, it does seem to be something you might considering holding at least in some measure. 

Maybe the most striking note is the one about M2 plunging for the first time since the Great Depression. Others have noted this as well. What does it mean? Another Depression? Not necessarily. But it does kick up a red flag, if nothing else, doesn't it?

Well, enough for now. You know how it is when you take vacation and land back on normal ground. Maybe the time away was refreshing. But landing can be hard sometimes.