The U.S. economy’s recent growth has a distinctive engine: large‑scale capital expenditures (capex) tied to artificial intelligence (AI). Firms such as Microsoft, Alphabet (Google), Meta Platforms, and Amazon have announced massive investments in data centers, servers, networking equipment, and AI infrastructure.
Over the past two weeks, we’ve addressed a persistent question: if the data signals weakness, why hasn’t the recession arrived? In "Slowdown Signals: Are Leading Indicators Flashing Red?" we examined the cracks forming beneath the economy's surface.
I recently penned an article on "Money Supply Growth," which elicited a very thoughtful response from Garrett Baldwin via Substack. He argued that labeling Federal Reserve operations as "money printing" is not rhetoric, but rather a reality.
Recently, MarketWatch ran a provocative headline: “When the world’s largest asset manager and the Bond King both agree: Run to gold, silver, and bitcoin.” The article highlighted how Larry Fink’s BlackRock and Jeffrey Gundlach, often dubbed the “Bond King,”
If you want to understand where we are in the cycle, skip the noise and follow profits. Corporate profits are the lifeblood of investment, hiring, and market returns. Crucially, linkage to the real economy is very tight. In the national accounts (NIPA), the BEA’s “profits from current production”
Over the past three years, the economic conversation has been a "promised recession." If you read the headlines, tracked economist surveys, or even listened to Wall Street strategists, you would have assumed a downturn was imminent.
Lately, there’s been a growing sense of confidence among investors that the U.S. economy has dodged the proverbial bullet. Despite a historic rate-hiking cycle by the Federal Reserve, two years of stubborn inflation, and signs of strain in global trade, the dominant Wall Street narrative is now a curious mix of “soft landing,” “no landing,” and even “re-acceleration.”
Could data centers and the power grid be America's next "renaissance?" With the U.S. national debt exceeding $37 trillion and interest payments surpassing defense spending, many articles have been written about the "debt doomsday" event coming.
A funny thing about bull markets is that investors develop a very short memory about the previous bear market. Such is why cycles repeat throughout history as lessons must be learned and relearned.