Crash Alert: Priced for Perfection in an Imperfect World

December 12, 2024 • 51 second read

The last few US inflation reports have been ominous, with the general trend morphing from sharp decline to gradual increase. Here’s the Core Services index, which is now rising at a 4% annual rate:

Stocks, meanwhile, are priced for perfection, with the second highest price/earnings ratio on record:

Investors are getting cocky, as evidenced by the soaring popularity of leveraged ETFs:

And gold has shaken off its post-election correction and is now threatening its all-time-high:

Can the Fed keep easing into all this?

Today’s stock market enthusiasm is based in part on the expectation of ever-easier money for the balance of the decade. But can the Fed really deliver this in the face of soaring financial assets, off-the-charts speculation, and rising general inflation? Wouldn’t that spike inflation? Probably. So at some point in 2025 the Fed will have to stop lowering rates.

What happens then? Well, check the above P/E chart for what became of the last few priced-for-perfection markets.

Beneath the Surface

Crash Alert: Priced for Perfection in an Imperfect World

John Rubino

December 12, 2024 • 51 second read

crisis gold Inflation

By John Rubino, John Rubino’s Substack

The last few US inflation reports have been ominous, with the general trend morphing from sharp decline to gradual increase. Here’s the Core Services index, which is now rising at a 4% annual rate:

Stocks, meanwhile, are priced for perfection, with the second highest price/earnings ratio on record:

Investors are getting cocky, as evidenced by the soaring popularity of leveraged ETFs:

And gold has shaken off its post-election correction and is now threatening its all-time-high:

Can the Fed keep easing into all this?

What happens then? Well, check the above P/E chart for what became of the last few priced-for-perfection markets.

The Confidence Paradox

January 6, 2026 • Addison Wiggin

This is the confidence paradox in motion.

The legitimacy of the action remains contested. The legality may be debated for years. Yet capital immediately priced the outcome as useful.

Pundits on Fox Business immediately began explaining the complexities of processing “heavy, sour” crude oil that the refineries in Texas and Louisiana used to be tooled up for, versus the “light, sweet” variety the shale boom gushed forth.

A Tale of Two Countries

January 6, 2026 • Addison Wiggin

History is clear. The “warmth of collectivism,” as New York City Mayor Mamdani wants you to believe, doesn’t come from a healthy economy. Maybe from, burning books and buildings… but not from building a prosperous society.

Seven Grey Swans, One Investment Strategy

January 5, 2026 • Addison Wiggin

The entire process of reviewing forecasts and then issuing new ones has made us more intensely focused on our purpose. We’re not actually trying to “predict the future” to parody the disdain with which so many lazy media pundits would dismiss our approach.

Rather, we’re examining trends in the news cycle and trying to separate the wheat from the chaff. What signals are coming through stronger than the nauseating cacophony of Washington and Wall Street, amplified by legacy and social media alike?

There are years when markets feel confusing because they are volatile. And there are years when they feel confused because the old explanations no longer work.

Seven Grey Swans, One Investment Strategy

Debt Hangover? Nah…

January 5, 2026 • Addison Wiggin

To start the year, the U.S. government didn’t bother with a hangover, rather it continues to spend so profligately that if we compared it to a drunken sailor, we’d have to apologize to the sailor.

Closing out 2025, America managed to rack up over $38 trillion in “official” debt. Looking at debt relative to GDP, it’s back over 121%.