Headlines play to emotions but a 2% pullback is healthy.

I was surprised to find out that Nvidia's $5-trillion valuation (now $4.8T) equates to only a 35 P/E. The average for tech companies in the S&P 500 is 40.7 so Nvidia, despite hype and real growth, is a significantly more conservative investment than most.

Is crypto creating money every bit as much as any Fed asset purchases could? Crypto is the new QE and the new asset-backed mortgage derivative? AI chips are pricier than gold by far. Crypto may not be greenbacks but they're buying everything in sight.

I'm pondering if this is Delusional Wealth. Crypto, AI "knowledge", AI infrastructure, gold .... It seems like 1979 all over again to me, the age of hard assets in fact, fiction, and film. It was all going to the moon.

But, I think this pullback is temporary. It's AI, and the growth aspects of the businesses involved will reassert as soon as Congress passes a budget. But by April, I expect we'll revisit a more serious stock market correction.

The "Delusional Wealth" is that the AI bubble (premature over-promise which won't be achieved until the next wave) is propping up the economy. Take data center frenzy away and most of the country would be in recession and people would see the stagflation. The 1970s effect of supply shock of 73 and 79 oil embargos was stagflation. The 2025 supply shock is the drying up of the labour market. Companies are reluctant to fire because of uncertainty and they are reluctant to hire for the same reason. There is less labour on the low end (farm workers, construction labour supply down due to deportation frenzy) and fewer jobs in the middle and high end due to tariff tax impact and TACO uncertainty combined with unrealistic (this time around, not next) expectations for AI productivity. The crypto business is just chasing around new tokens which have little value other than some anonymity.

It would not surprise me if the market will continue up after a pullback. But a bear is coming and could easily come sooner than April. On the other hand I've been saying that since February.

Yesterday’s elections sent a message that voters are fed up with Trump. I think the No Kings matches helped raise awareness and convinced enough voters that they could no longer sit on the sidelines or we would all soon see a police state. Those rallies need to continue next year before the midterms, and Senate and House candidates need to participate.

AI is looking like a bubble that will pop sooner or later. Crypto was always a bad risky investment.

But sure, GOP will blame the 2025 election results but really it's the 2024 election results.

Let these unethical and environmentally destructive industries die.