Can You Hear Me in the Back?
This latest event tells us everything we need to know about markets. They don't run on fundamentals... they run on financialization.
Dear Fellow Traveler:
Well… this was quite a day.
We’re back near all-time highs, and no one has blinked at the idea of nuclear war.
I’m not going to take up much of your time right now.
I’m just going to tell you… over and over again… that this is a market that runs on financialization. As I’ve said… it all comes down to the amount of capital in the system and the amount of risk investors are willing to take at any given moment (and remember… risk… chases risk).
Michael Howell’s global liquidity versus the Global MSCI Index is quite amazing.
This is NOT a market running on fundamentals, earnings, or any real growth.
It’s just money… lots of it… sloshing around.
Since 2020, stock prices have stopped caring about silly things like "profits" or "growth." Here’s what moves markets now:
Fed money printing (or pretending not to print)
The kind of debt the Treasury issues (short-term = party, long-term = hangover)
How much collateral does Wall Street have to gamble with
Momentum traders chasing whatever’s fast and popular
Liquidity events (aka “when the global financial system is under stress”)
The last 48 hours only cements that thesis…
I guess we are going to hit 6,500 to 7,100 this year… aren’t we.
Thanks financialization… thanks money printer…
Drink up…
And stay positive,
Garrett Baldwin