
Today’s Dive is more of an underwater exploration, an investigation, a postulate —less whodunnit, more whogonna last?
Three charts, same story: something’s gotta give.
The first is a reprise from yesterday:
Amid record retail buying and insider selling, the U.S. stock market has grown to nosebleed heights over the rest of the world’s capitalist exchanges.
Chart two:
The Shiller P/E ratio, which compares current stock prices to a ten-year inflation-adjusted average of earnings, now sits at 38x — higher than it’s been 96% of the time since records began.
Only the dot-com era beats today. And we all remember how that ended.
The ADP’s jobs report reveals private sector hiring in June came in at 115,000 — 45,000 below expectations.
That’s enough to raise eyebrows and plant the seeds of doubt. Hiring is slowing, and that matters more than ever in a world where machines are quietly taking more of the workload. (More on the ADP below.)
Chart three:
This one shows that the 50-day average put/call ratio — an index of how many investors are hedging versus those simply buying — is at one of its lowest points since the early innings of the 2022 bear market.
That’s a long way of saying: almost no one’s hedging.
Complacency is now the base case.
And… it’s very cheap to short the S&P 500.
What Keeps the System Ticking?
Andrew Packer and I came to the proverbial office this morning with the same uneasy feeling: yes, it’s a pre-holiday summer day… but “it’s all too quiet.”
The numbers are extraordinary — historic highs in valuations, historic lows in volatility — and hedging is dirt cheap.
So we asked ourselves: what could go wrong?
Andrew noted that July tends to be a reliable up month, ten years running. But come August and September, things tend to sour. If the data keeps rolling over, “we could start to get some market sag later in the year,” he said.
What makes it worse is that every catalyst feels plausible.
Bank fragility from unrealized losses. Stubbornly high interest rates are making refinancing a pain. AI-induced job cuts are hollowing out consumer demand. Another carry trade unwind like last summer or a geopolitical flare-up.
It’s all a messy pile of possibilities — any one of which could tip the balance.
It’s the kind of setup that would make a predictive AI model salivate.
Feed it inputs like these — jobs reports, interest rates, layoffs, debt levels — and it would likely start blinking red.
But as Andrew pointed out, if we add a recessionary crisis, no one will care about inflation, at least not at first. They’ll care about liquidity and solvency.
And markets, in their infinite optimism, aren’t pricing in much of either.
It all stacks up to an excellent shorting opportunity, if you’re bold enough to take it.
For ideas on how… check out our research on President Trump’s Great Reset plan, in which we issued a report: Profit From the Panic , (available to paid-up members).
The report rummages under the hood of a fund designed to rally as markets fall. With stocks back to all-time, it may be worthwhile to take some profits off the table and build a position in a contrarian holding.
Trump Secret Plan to Revive Reagan’s 42-Year-Old Dream
The media mocked it. Experts said it could never be done. But, 42-years after Ronald Reagan first dreamed of an impenetrable strategic U.S. defense shield, President Trump is creating the most ambitious defense initiative in modern day history. It could make early investors extraordinarily wealthy. But not in the way you expect. Here’s how.

Narratives Are Breaking Down
Meanwhile, notable macro contrarian trader, Hugh Hendry echoed dissent this morning.
In a post entitled “The Quiet Collapse” on his Acid Capitalist substack, Hendry, too, was looking for signs of a fissure.
He writes, acerbically: “The number on the screen means nothing until you bleed… Our mission is to understand collapse. That means turning away from the televised noise… True understanding is found in the patterns that whisper, not shout.”
Hendry points to overlooked metrics like the Freddie Mac Serious Delinquency Rate for multifamily housing — not because it’s trending on Twitter, but because it quietly tells us the flow of capital is breaking.
Tenants can’t pay.
Property owners can’t roll debt.
And investors, fattened by years of low interest rates, can’t keep the plates spinning on margin alone. That’s how collapse creeps in — not with a bang, but with a skipped rent check.
AI Layoffs: The Coming Paradox
The ADP report also gives us more of the unfolding paradox of AI.
Microsoft announced another 9,000 layoffs recently, and it’s not alone. Many big tech firms are slimming down, citing improved productivity as the justification. For shareholders, layoffs are bullish — lower costs, higher output.
But what happens when every company joins in? You get fewer paychecks in the real economy. More unemployed consumers. Less spending. And no amount of productivity gains can fill a shopping mall with buyers.
We’re witnessing the early stages of this shift, and it’s unclear where the cycle breaks. Companies get lean. Stocks go up. But the people doing the buying? They start pulling back.

Big, Beautiful, and Broken
In Washington, Trump’s tax-and-spending leviathan — once dubbed the “One Big Beautiful Bill” — just squeezed through the Senate with a 51–50 vote. VP JD Vance cast the tiebreaker.
The House still needs to vote again on Senate modifications.
The final version keeps the tax cuts for corporations and the highest earners, scraps EV incentives, and adds new money for detention centers and border infrastructure. It also cuts $1 trillion from Medicaid, stripping coverage from an estimated 12 million people.
To help fund it all, the SNAP program — formerly known as food stamps — will lose 20% of its funding. That’s 40 million Americans, 12% of the population, facing leaner grocery budgets while the top 1% pocket another tax break.
Democrats opposed the bill unanimously.
A few GOP senators joined them.
Senator Lisa Murkowski admitted she didn’t like the bill but voted for it anyway after “sweeteners” were added for Alaska. Senator Rand Paul, a “no” vote, accused Murkowski of accepting a bailout for Alaska.
A small paradox of stupidity: Elon Musk has threatened to start the American Party to run against Republicans who voted ‘yes’. Democrats have cheered his opposition. But they oppose the bill for opposite reasons… Elon wants more cuts, less debt. Dems want more spending and more debt.
Oy.
Trump has threatened to take Musk’s citizenship away.

The Market Shrugs (For Now)
Markets are holding steady, for the moment. Despite Apple jitters, Tesla delivery declines, and manufacturing contraction now in its fourth straight month, the S&P remains buoyant. But the pressure’s mounting beneath the surface.
Bloomberg Economics quotes one manufacturer: “Everyone is on pause.” Another said clients are unwilling to commit. The real economy—factories, consumers, orders—is quietly pulling back, even as equities float higher. Again, something’s gotta give.

Grammarly Buys Superhuman
In the meantime, the AI arms race continues. Grammarly — best known for fixing your commas — is buying Superhuman, the speed-reader’s email app of choice.
It’s a play to build a full productivity suite. Competing with Salesforce, Microsoft, and Google is ambitious. But in this AI cycle, even your grammar tool wants to be a boss.

Wimbledon as Asset Class
Wimbledon kicked off this week, and Centre Court seats for 2026–2030 are selling for over $275,000. Apparently, it’s more profitable to own a debenture than attend the matches.
Roger Federer, meanwhile, officially joined the billionaire club. In tennis, as in markets, the returns increasingly flow to those who know when to sit down and trade the view.

From Amelia to Elon and Beyond!
Today, we hit the exact midpoint of the year.
(Source: Massimo (@Rainmaker1973) on X)
Starting at 12:01 ET today, the year 2050 will be closer in time than the year 2000.
Eighty-eight years ago today, Amelia Earhart vanished over the Pacific.
Now, Elon Musk is back to launching dragons into orbit while threatening to launch a new political party on Earth. The arc of innovation is wild — what we can build, what we can lose, and what we never quite find again.
In technology, we advance in a straight line — standing on the shoulders of giants, propelling ourselves into orbit, teaching machines to think faster than we can.
But in politics and markets, we lather, rinse, repeat.
The cycles return.
Debt expands.
Warnings flash, lessons go unlearned, and yet we act surprised when the same mistakes yield the same results.
Complacency is not safety. It might even be a tell.
~ Addison
P.S. Join me and Andrew Packer tomorrow—Thursday, July 3 at 11 a.m. ET—for Grey Swan Live!, where we’ll review the Grey Swan model portfolio (surprisingly robust) , walk through the shifts we’ve made, and offer a strategy for stepping back from the edge… without losing your footing even if the market crumbles beneath.
Your thoughts? Please send them here: addison@greyswanfraternity.com