I want to be a bear. I truly do. No bull. I want to jump on the bandwagon—anyone will do—bear wagon, bubble wagon, apocalypse wagon. It doesn’t matter how full those wagons are, just make room for one more. But each time I’m nearly about to leap onto that wagon it seems to lurch ahead, just enough so that I can’t quite catch it. Why does it toy with me like this?
I’ve been full of bull for so long, and it just can’t last forever. Dang it, what does a fellow do to “get on board”, “join the team”, become who I know I was meant to be?
In hindsight, I see where it all went wrong. Sure, the S&P 500 and Nasdaq hit record highs this year. Fine. But, isn’t that enough to convince me that the party is over? Am I blind? Of course markets cannot sustain this level of growth indefinitely—just look at what’s happening today (SPY 0.00%↑) , as evidence! And everyone knows that what happens today is most likely going to repeat itself over and over again, right?
I am aware we have seen corrections that pull the market back—so called “normal” market activity—but those are just the reverberations laying tracks for the big one, surely! No, my problem was believing that this market was actually growing on the back of a resilient economy, corporate earnings, and the prospect of more of the same. What a chump I’ve been.
Tenuous Players
I want to be a bear, because these markets (and many around the world—yes, I’m looking at you, KOSPI) are certainly being supported by such a false sense of security—by tenuous players who talk a big game and “forecast” more profitability, but most assuredly won’t deliver. They throw out impossible growth figures in attempt to squash beautiful bear-like pessimism like an overripe mango.
I mean, so far, of the S&P 500 companies reporting, 83.5% beat Q3 EPS estimates. Come on! Why not 90% or 95%? What’s worse is that there are still 300 companies still to report, as of today. That alone is enough to get me worried stiff.
OK, sure, 83.5% beat Q3 estimates, but so what? And 83.5% beats the 5 and 10 year historical beat rate average. Big deal. Tenuous players give the illusion that all is well, but there must be something else going on. Bears are busy looking at every trick up your tenuous sleeves. My message to those tenuous players: ball’s in your court!
Anyways, earnings reports are always backward looking. You can’t drive a bandwagon looking in the rearview mirror. What I need is to be looking into the future. So, take your so-called “beat rate” and shove it in your latest earnings report hole! There must be more to this. There HAS to be if I’m finally going to get on that bear wagon.
Overleveraged Bear Chow©️
Let me be completely emotional about this. Someone—I’m not saying frontier AI CEOs, but I’m not, not saying frontier AI CEOs—is cooking something that smells like bear chow. And this “chow” goes by the brand name “OverLeveraged.” (OverLeveraged Bear Chow©️). I feel, a super strong feeling, that debt is going to overwhelm AI companies. AI recursive learning? Pffw! These leaders need a lesson in the evils of recursive borrowing. They’ll never be able to pay them off. Never! Maybe, but probably not. So be it…they’re just paving the way for my initiation into the Bear Club.
Hyper-scalers are throwing money at “the future” at a ludicrous rate. Think about it. Who invests in the future? Everyone knows you wait til the future arrives, first! Why? To avoid taking on too much risk. To eliminate any chance of unintended consequences. The only way to avoid those icky consequences is by sitting on your hands! Instead, we have companies climbing over each other to build compute capacity capable of satisfying future demand. The only demand we bears have is that you stop risking our future with your recklessness.
Isn’t it enough that corporate titans (haven’t heard anyone talk about titans in a while, so thought I would drop a titan-bomb) are ignoring their obligation to their “snare”-holders? We have rights too! I’m not exactly up to speed on those rights, ‘cause I’m too busy watching your stock price “take off”, all the while you’re “making off” with millions billions trillions! Stop thinking that making me richer is any recipe for the future. Why not? Because it will come to end, that’s why…not.
And, if there is anything that defines a genuine bear is that we care about one thing: ends!
It’s no wonder that the average person (6 ft tall, balding, likes long walks on short beaches) feels completely lost in this sea of ambiguity called the “stock market.” Let’s nip this in the bud before you really open a can of worms.
Whoa, I’m fuming now. Mixed so many metaphors, I can’t type straight. Not exactly sure what I’m saying, but I’m sure if I get riled up enough, I’ll feel more bearish. (Crap on a stick, I don’t ever use the word “riled.” That’s how riled, I mean exasperated—whew, that’s better—that’s how exasperated I feel about the empty bear-shaped hole inside me.)
It’s The Stupid Economy, Dummy
I’m not going to say it. I won’t. I promised myself. OK, I’ll say it, if only to move one step closer to the bear-dom threshold. The economy sucks! (Stop me if I’m getting too technical.) It’s hanging on by a thread. A thread laced with the sinew of front-page headliners that scream—and we all know the louder a headline is, the more it is likely to be true—of shocks, disruptions, misalignments, discombobulations, malefactors, socialists, fascists, literalists, typists, and warnings so grave that they would make your average sumo wrestler blush or even wretch. Ewww!
Let’s break it down like any sane bear would. I’ll use question marks after each topic just to amp up the threat reality. (After all question marks speak louder than words ever could.)
Deep breath and here we go….
Government debt?…enough said.
Treasury yields?…now we're talking.
AI boom sustainability?…nice. (Capital misallocation the real issue? There we go.)
Persistent inflation?…it never stops delivering.
Labor market dislocation?…yep, just around the corner.
Household financial stress?…for sure, any day now.
Consumer spending rose?…wait, what?
World trade volumes grew 7%?…yeah, but.
LEI rising?…oh, crikey.
Real GDP at 3.4%?…no comment.
Business equipment investment increased 20.9%?…I don’t feel so good.
Core PCE Inflation at 2.5%?…not fair!
Moving on.
Every dummy knows the economy is merely a singular element in the milieu which encompasses the totality of the financial systems at work in the compendium of artifacts that we take as reliably constant given the nascent variables which ever so often obstruct an otherwise authentic peroration.
(Whew! Spoken like a true economist. I think I came out of that section unscathed.)
Politics! GEO-Style
There is no politic like a geo-politic. Here’s where the coats of the true bears shine! I feel it in my paws already.
First, POTUS had a maganificent idea to tariff the heck out of our allies and non-allies (the recent pseudo-alliance with Russia aside). Check.
Second, POTUS, in a magananimous gesture, unwinds many, if not, most of those tariffs. Only to circle back on Canada. Oh, Canada! Sorry. And then, he throws a diesel lifeline to Putin. Aww, so sweet.
Third. Undeterred by the economic backlash of those tarrific flip-flops—markets hate certainty anyways—POTUS sets his sites on Iran. Boom. Oil. That’s the ticket.
So, you see, any second now—well, not this one because it just passed—we will witness the final shoe drop, the bell toll, the buzzer sound. The glorious games of shoes and bells and buzzers will come to an end. It’s bound to happen, it just needs more time to sink in.
Sure, tariffs have proved an annoyance, but they will wreak havoc any day now. Havoc! (If I repeated it twice, it means it’s more likely to happen.) Just look at how many pundits called it on the nose: [This section, including pundit links, failed to appear due to an undersupply of verifiable deets.]1
OK, more oil is flowing now out of the strait than when the war began, but that is hardly the point. The damage is done. And if there is one thing about investors—we never forget! Ever. Not until the media tells us to, or an interesting meme arises from the creative ashes. Or when dinner is served. (Sometimes, when an NFL game is on.)
No, investors will take their memories to the polls in a few days, and then we’ll see the final reckoning. If Democrats take the house, just wait to see what the market will do. And if Republicans hold the house just wait to see what markets will do. Just you wait!
Um. What do they do? OK, I did some checking and turns out “the S&P 500 gained in 84% of midterm year Q4s and 92% of the nine-months stretches that began with those quarters; together averaging a whopping 19.8% gain!
The trend strengthens as the president transitions into a lame duck, and because of high global stock market correlations it ripples overseas. In the 10 nine-month episodes since accurate foreign data exist, it has never overall lost money overseas.”2
And, those figures hold up regardless of whether the chambers flip.
Give me just a moment…please feel free to watch the video below, as I re-check some facts and figures.
Sorry, for that interruption.
My Malleable Manifesto
I wouldn’t want my readers to think of me as someone who is inflexible, or unswayable. And, I want to make it clear that I am not flip-flopping. It’s just that my bear-ometer is suddenly feeling a little less bear-prone. I did want to be a bear. I just need to step back and see this from all angles. Reassess. Recalibrate.
Truth is, I just needed to get this off my chest, I suppose. In fact, I’m feeling quite bubbly at this stage. Enough of those gloomy bears with their “the-sky-is-falling” propaganda. We don’t need the entire sky to fall, when just one part of it will do.
Give me a bubble. That’s for me. Something quick, inevitable. Something that everyone agrees on and everybody is talking about. A big, round, juicy bubble just waiting to pop.
That’s the bandwagon for me. Come to think of it.
In response, I offer in all sincerity—no bull—my new manifesto:
I declare that I will henceforth conduct myself in a manner befitting a—what in the heck do you call a bubble watcher, anyways—bubbler, to uphold my obligatory duty to withstand, to stand up to, to stand clear of and to take a stance against such bubbles, as they may form, forthwith in every situation, regardless of condition, in rain, sleet, snow or hail, whether pundits are pro-bubble or anti-bubble or just blowing bubbles, and that I, will endeavor to duly call out those bubbles for what they are, openly and without reservation, regardless of the financial reality or inconvenient economic data (past or present), to predict, forecast, rail against, warn vigorously, even if I receive no likes or comments, and to instill a spirit amongst the bubbler community that seeks to both expunge and to ultimately ensure the popping of bubbles both domestically and abroad.
Signed, SR Bubbler.
Take that, bears! Just wait. I’ll be on a bubble bandwagon before you know it…3
This publication is for brains, not bets. The Other Side of Obvious shares ideas, stories, and general financial information - not personalized investment, tax, or legal advice. Investing comes with risk (including losing money). Talk to a pro before you act. Please take time to read these important disclosures before you get started.
“Deets” = the erstwhile structurally substantive symbols composed in the form of both sentences and world wide web links (a.k.a., details).
At this point, some may wonder whether I am selling bubbly stocks. I can only respond with an emoji: 🤣
Sad - you are already second in a row of those among my favorites who is sharing this view on what’s going on.