This speculative mania will end in tears as another 2008 style macro meltdown looms!

The outlook for the US economy and the dollar is getting uglier even though sentiment/passive flows suggest all is hunky-dory as the stock market makes new highs, albeit with narrowing leadership and

Rule Britannia, land of hope and glory! As long as the King is at Ascot, the Old Lady is vigilant and sterling has now risen from 1.25 on New Year's Day to 1.37 now while Sir Keir and Mrs. Reeves rule the roost. Britannia may no longer rule the waves but Top of the Pops ensures that it ruled the airwaves when I first encountered the sceptred isle at the time Adrian Mole wrote his secret diary.

Sterling is up because the dollar is down and not because Labour has made Britain PLC a kinder, gentler home for global capital. So where is cable headed next as the dollar swoons accelerates in H2 2025? Definitely the post Brexit high at 1.44 and possibly as I as the 1.48 we saw cable trade on the very eve of the referendum that fateful late June in 2016.

The outlook for the US economy and the dollar is getting uglier even though sentiment/passive flows suggest all is hunky-dory as the stock market makes new highs, albeit with narrowing leadership and flagging momentum.

If Trump could not clinch a trade deal with cakewalk states like India and Japan, there is no way he can pull a rabbit out of his hat with South Korea, Taiwan, Indonesia, Vietnam and the EU by his self declared trade D-Day on July 9th. While the world celebrates America's Independence Day on July 4th, poor Jay Powell must turn cartwheels before Emperor Trumpus on the White House lawn to plead for the Federal Reserve's political independence.

The 25% rise in Nasdaq from the dark depths of the April meltdown but history and the second derivative macro data and earnings revision tell me that it is quite possibly the last hurrah of a dying bull market. When low quality beta goes ballistic, I put my trust in cash but non-dollar cash this time. Momentum rallies can prove fatal since high decibel kaching-kaching lulls investors into a false sense of euphoria even as the killer macro iceberg looms ahead.

Trump's big beautiful bill will pass on Capitol Hill even though he has obviously done a taco on trade but the B2 Mission over Iran without the loss of a single US life is a psychological revenge for Iran's hostage takeover in 1979, the destruction of the Beirut embassy, the mass murder of 241 sleeping Marines by a Hezbollah suicide truck bomber recruited by the Revolutionary Guards and the 1000 GIs killed are maimed by Iran's IEDs in post Saddam Iraq.

The outperformance of financials/banks reflects the tax cut extension, capital markets deregulation and SLR bank capital release that Trump is certain to shepherd through Congress. Eat your heart out Pocahontas from the People's Republic of Massachusetts.

Homebuilders are down 35% and Case Shiller index's slump flashes a dangerous SOS in an $80 trillion asset class that has hit an iceberg. A market trading at 23X earnings cannot accommodate a housing crisis or credit contagion but that is precisely what will happen next as 6-million Americans default on their student loans and have their wages garnished and thus push up stress metrics in auto loans, FHA mortgages, credit cards and even CRE. The nosebleed valuation metrics of a stock market with no equity risk premium cannot gloss over these darkening macro storm clouds.

Housing deflation will replace tariffs as Wall Street's horror scenario by this autumn. This will mean shock and awe Fed rate cuts by Powell or his Trumpian shadow/evil twin but it will also mean a deep recession that will go global at the speed of light as we saw in 2008 and even 2020. Services have begun to sag, notice the steep fall in airfares. Don't worry, be happy, get shorty!