October closed as a winner for the indexes — the S&P’s sixth winning month in a row, the Nasdaq’s seventh.
Investors cheered earnings beats and a softer labor mood last week.
But the real story is cash — who’s sitting on it, why they’re hoarding it, and what that patience says about the risks everyone pretends are priced in.
Warren Buffett is teaching a masterclass in restraint:
(Source: Financial Times)
Berkshire’s cash pile is approaching record heights, with an enormous stash parked in short-term Treasuries.
As of the end of Q3 2025, Berkshire holds a stunning $382 billion in cash – enough to buy any of the lower 400 companies in the S&P 500 with a comfortable cushion left over.
When the greatest buyer in markets prefers T-bills to headline-grabbing names, he’s telling you the bargains he wants simply aren’t available.
We don’t look at Berkshire stack of T-bills as a bearish forecast, although many will. Rather, it says more about the market discipline Buffett has exhibited his entire career.
Best pockmarked by the statements: “Be fearful when others are greedy, and greedy when others are fearful”… and this chestnut: “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”
(Source: Financial Times)
Back in August 2008, before the financial crisis, we premiered our documentary IOUSA. Among other financial luminaries, it features Buffett describing his views on the balance of trade between the US and China. The premiere for the film was hosted at the Qwest Center in Omaha, the site of Berkshire’s annual shareholder fest.
During the Q&A following the airing of the film, Buffet claimed to be “the token Pollyanna” on the panel assembled and that he would always, always bet on America in the long run.
AI bubble or no, patience can be a market call as loud as any trade.
The K-Shape Gets Real
Earnings and data this month deepen the financial media’s resolve that we’re in a K-shaped economy – a term used because the economic recovery and growth are bifurcating, or splitting into two distinct paths, like the two arms of a capital letter “K.”
On one hand, wealthy consumers and certain sectors are thriving due to factors like rising asset values and strong performance in high-growth industries.
Conversely, lower- and middle-income consumers are struggling with inflation, job market instability, and high costs for essential goods.
Auto prices hit new highs, repos increase, and even “value” staples show a two-speed dynamic. Corporate profits are real — many companies are generating significant cash — but the distribution matters.
If you’re managing a portfolio for preservation, it’s worth asking whether your bets are on the winners or on the lucky handful that have borne most of this market’s gains.
The Fed Cut and the Bigger Question
Between a softening job market and better-than-expected inflation prints, Friday’s quarter-point cut was widely telegraphed.
The Fed trimmed the fed funds target to 3.75%–4.00% — the first meaningful loosening in three years.
But here’s the iceberg below the surface: Powell emphasized that December is “not a foregone conclusion,” and the committee is split. The Fed cut — that was the relatively easy bit.
Trump’s Shadow Fed plants on the FOMC board (Stephen Miran) want more, more, more.
The harder task is what comes next: more cuts, or a pause while the committee watches incomplete data because the government remains shuttered.
The Dealmakers Are Rearranging the Map, Maybe
Trump’s Asian trips, trade truces, and down-the-hall handshake diplomacy aren’t purely political theatre — they’re the plumbing that lubricates supply chains, rare-earth access, and data-center build economics.
So far so good.
The real Grey Swan here is policy whiplash: We have one eye on the Supreme Court hearing tomorrow. The justices will weigh arguments on whether the tariffs imposed by Trump at bargaining tables in Asia are outside the president’s powers granted by the Constitution.
Article I, Section 8 of the U.S. Constitution explicitly gives Congress the power to lay and collect taxes, duties, imposts, and excises, and to regulate commerce with foreign nations.
Over the 20th Century, however, Congress has delegated parts of this authority to the president through specific statutes, such as Section 201 and Section 301 of the Trade Act of 1974.
These laws enable the president to act in situations such as a surge of imports threatening a domestic industry or when foreign countries are perceived to be restricting U.S. commerce. Not simply because the U.S. is getting “ripped off” in trade deals, as POTUS has argued for decades.
The SCOTUS hearings begin tomorrow.
The AI Energy Race
AI is as much about megawatts, data centers and land-use as it is Large Language Models applied to financial spreadsheets.
Google, Microsoft, and hyperscalers are signing power deals and lining up nuclear or dispatchable generation. Data centers under construction and the scramble for reliable, cheap kilowatts make energy the scarce commodity of this cycle.
It’s almost too easy to forecast. We can expect utility and power equities, contract manufacturers, and firms with long-term offtakes to matter more in the next decade than the buzzwords on an earnings slide.
The Bond Market’s Quiet Hand
A reminder: While the stock market is cheering every word of Jensen Huang, the corporate bond market continues to take a more sober look.
Credit will smell trouble before stocks do: leverage clocks, capex pledges, and multi-decade bets show up first in widening credit spreads.
That divergence — ecstasy in stock prices, caution in debt yields — is a telling signal. The market itself is asking, “Who will pay when the bill comes due?”
If you want a market thermometer, watch credit.
Politics as a Market Variable
Tomorrow, voters go to the polls in New York City to elect a new mayor.
The Social Democrat Zohran Momdani has maintained his lead against the OG Democrat Andrew Cuomo, depending on which polls you trust.
In New Jersey and Virginia, they’ll select new governors – and polls are tight, especially shocking in the Garden State.
All three races are pitched as a referendum on Trump and his grand realignment strategy one year ahead of Congressional mid-terms.
There are also protests against “fascism” planned around the country.
About the protests, our friend and oddly aggressive political commentator James Howard Kunstler wrote this morning:
Doesn’t it kind of look like the Nov. 5 ‘Trump Must Go Now’ action in Washington is designed to be our time’s Fort Sumter moment, to kick off Civil War 2.0?
The organizers behind it are the usual suspects: George & Alex Soros’s Open Society Foundation at the hub and spin-offs such as the Tides Foundation, Revolutionary Communist Party, and Refuse Fascism doing the logistical grunt work. . . buses. . . snacks. . . signs. . . brickbats, frog costumes. . . .
The idea is to entice a million protesters in Halloween costumes to surround the White House and literally exorcise the president, get Donald Trump teleported out through the roof into the cosmic ethers, to be seen no more. We’ll have to wait and see how it works. Something like it was tried in October, 1967, when anti-(Vietnam)-war celebrities — poet Alan Ginsberg, The Fugs’ Ed Sanders, hippie rabblerousers Abbie Hoffman and Jerry Rubin — led incantations to ‘levitate’ the Pentagon. (Failed.)
You might have noticed by now that the most hysterical voices crying about “fascism” are exactly the people who yearn to push everybody else around, tell them what to think, run your life, wreck every institution and relationship in society, and take all your stuff. The Left never notices how all that resembles their notion of what fascism is. Self-awareness is not the Wokesters’ strong suit.
One World Trade Center officially opened in Manhattan on November 3, 2014.
The new tower, along with the rest of the World Trade Center complex, replaced the Twin Towers and surrounding complex, which were destroyed by terrorist attacks on September 11, 2001.
~Addison
P.S. Grey Swan Live! returns this week with Harry Dent on demographics and a shocking market outlook. Mark your calendars now – Dent is legendary not just for some shocking predictions – but the strength of his convictions. You won’t want to miss this one. The fireworks go off at 2PM Eastern time Thursday.
If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.
