Investors have finally gone down the rabbit hole. Investors are beginning to recognize that the economic regime has changed. The emerging policy framework prioritizes production, infrastructure, energy, technology, strategic capacity and investment—the tangible foundations of durable growth. Yet this transition carries a central risk: the Federal Reserve may interpret supply-side, Hamiltonian policies as inflationary demand stimulus, tightening against investment-led expansion before its productive benefits are realized. The prior order rested on a different set of assumptions. Cheap money favoured borrowing, globalization restrained costs, and capital expenditure was often viewed as a dilution of near-term shareholder returns. And that deficits did not matter!! In the past, Economic growth depended heavily on consumption, leverage and financial engineering, while investors focused on Federal Reserve liquidity and the familiar relationship between interest rates, inflation and asset prices. Those assumptions were rational in the post-2008 environment of low inflation, weak productivity, subdued investment and extraordinary central-bank influence. They are less suited to an economy increasingly shaped by reindustrialization, supply-chain resilience and the strategic imperative to build.

The Market’s Sweet Spot The Stock Trader’s Almanac identifies the period from the fourth quarter of a midterm-election year through the end of the second quarter of the following pre-election year as the “sweet spot” of the four-year presidential cycle. It is historically the market’s most powerful and reliable seasonal advance. The pattern begins after the typical midterm-year weakness, when stocks often form an important autumn low. From there, the market enters a sustained rally that runs through the fourth quarter, accelerates in the first quarter of the pre-election year, and remains favorable through June. The Almanac’s historical work shows that the Dow has gained roughly 19% to 20%, the S&P 500 about 20% to 21%, and the Nasdaq close to 30% over this nine-month stretch. The core period, Q4 of the midterm year through Q1 of the pre-election year, has delivered particularly strong average returns, with the S&P 500 up about 14% and the Nasdaq near 20%. In practical terms, the four-year cycle’s message is clear: midterm-year weakness creates the setup, the autumn low marks the turn, and the next three quarters produce the cycle’s most constructive market environment.

Carney’s invasion talk has jumped the shark Prime Minister Mark Carney’s decision to publicly elevate the possibility of a U.S. military invasion of Canada may be the moment his “elbows up” politics finally jumped the shark. The United States is not simply Canada’s neighbour. It is our largest trading partner, principal security partner, NATO ally and NORAD counterpart. Canada and the United States operate the world’s most integrated bilateral economic relationship and share its longest undefended border. To publicly elevate the possibility of an American military attack is not strategic clarity. It is the political exploitation of public anxiety. Canadians have every reason to be unsettled by the direction of the United States. Washington is changing structurally. It is more protectionist, more transactional and more willing to use tariffs, industrial policy and national-security powers to advance its interests. It is demanding more from allies while pulling investment, supply chains and strategic capacity toward its own market. The postwar rules-based order, underwritten by American power, open trade and dependable alliances, is fading. Canada cannot wish that reality away. Canada should respond by diversifying trade, rebuilding its productive base and reducing needless dependence on a single customer. But there is a vast difference between recognizing a tougher world and publicly entertaining an American invasion. Carney’s political brand is hard-headed realism, take the world as it is, not as we want it to be. Fine. But realism requires distinguishing genuine strategic risks from political fantasy. Washington can impose tariffs, lure investment south and pursue its national interest without American troops preparing to cross the world’s longest undefended border. Carney has called military action an “extreme tail risk.” Governments should assess even remote contingencies. But transforming an internal planning exercise into public political messaging is alarmism, not leadership. It also ignores the practical reality of continental defence. Canada and the United States are NATO allies and NORAD partners, jointly responsible for aerospace and maritime warning. Canada’s security is deeply intertwined with America’s, not because Canada is subordinate, but because geography and mutual interest make continental defence inseparable. Gordon Sinclair understood that relationship. In his 1973 editorial, The Americans, the Toronto broadcaster pushed back against reflexive anti-Americanism, praising Americans as generous and underappreciated even amid the bitterness of the Vietnam era. The commentary became an unexpected U.S. hit because it came from a Canadian willing to acknowledge both the complexity and value of the relationship. The irony is sharper in Carney’s case. While chair of Brookfield Asset Management, he sat on the board that approved moving the firm’s head office from Toronto to New York. His government has also elevated Maia Johnson, an American Democratic political operative, to a critical PMO role, including chief operating officer and adviser on U.S. stakeholder strategy. There may have been legitimate reasons for both choices. But it is a strange sovereignty message, warn of an American military threat while your corporate record includes moving a Canadian head office south and your inner circle relies on an American partisan strategist. Canada’s real weakness is not an imagined invasion. It is our inability to build, pipelines, LNG facilities, mines, power plants, ports, homes and export infrastructure. The answer to a more self-interested America is not anti-American theatre. It is capacity, freer internal trade, faster approvals, reliable power, larger export infrastructure and credible military readiness. Canada does not need fear to rediscover sovereignty. It needs to build. Let’s revisit 1973. 👇 piped.video/z4i3LmR0K74

Super Cycle standings in front of us. #Bitcoin $MSTR

Left to its own devices the market adjusts. 👇

Yes, adjustments are coming.

US vs Canadian Banks RBC ~3.7x TBV (Tangible Book Value) vs BAC ~1.9x. Canada: excessive regulation, companies leaving for the US, weak productivity, housing and demographics. 2026 earnings got a lift from cheap 2021-22 mortgages repricing higher. That tailwind fades in 2027. Hard to defend the multiple RBC multiple. But then again, the Elbows up insanity can manifest in many way.

Micron next week With earnings next week likely to underscore Micron’s AI-driven earnings power, MU is trading at less than 7× fiscal-2027 consensus earnings—a valuation that still treats memory as a purely cyclical commodity business. The market is pricing little durability into an earnings base being reshaped by HBM, advanced DRAM, and a far more concentrated industry structure. The central question is whether Micron can finally earn a structural rerating. Memory will never lose its cyclical character, but the investment case no longer rests on commodity DRAM alone. HBM is a technically demanding, supply-constrained product with high qualification barriers, deep customer integration, and a small set of credible suppliers. If Micron can demonstrate that its AI-memory mix supports consistently higher margins and returns through the cycle, a single-digit earnings multiple will look increasingly untenable. The market does not need to treat MU like Nvidia; it only needs to stop valuing a strategically essential AI infrastructure supplier as if it were an undifferentiated commodity producer. $MU

Lots to talk about.

No, Growth Is Not Bad For decades, Western economies accepted secular stagnation as the price of globalization: weak investment, depleted industrial capacity, cheap imported goods, and supply chains optimized for cost rather than resilience. That model is breaking down. Covid exposed the danger of depending on distant, concentrated supply networks for everything from medical equipment to semiconductors. The policy response, led by the United States, is not full decoupling. It is de-risking: rebuilding domestic manufacturing, diversifying supply chains, strengthening energy security, and investing in the infrastructure necessary to support a more resilient industrial economy. Yet much of Wall Street research still treats growth as an implicit problem. A strong activity number becomes evidence of overheating. Higher capital spending becomes a source of inflation. Any sign of momentum is filtered through a single question: how long must the Federal Reserve keep rates restrictive? Consider the over reaction to this week’s preliminary PMI headline. One firmer activity reading was enough to revive inflation warnings and push the prediction market to price in multiple rate hikes! Yes Main St is once again scarified. But contrast that response with company calls in housing and consumer-facing industries. There, the message is often much less buoyant: affordability is strained, consumers are selective, and high borrowing costs continue to restrain demand. The economy is not homogeneous. AI investment is a genuine secular growth story, but it is not the whole economy. Data centers, chips, power infrastructure, and industrial investment can be strong at the same time that housing, lower-income consumption, and rate-sensitive sectors remain under pressure. That distinction matters. Growth driven by consumer demand outstripping capacity can fuel inflation. Growth driven by investment in factories, power generation, grids, ports, mining, logistics, and technology expands supply. It raises productive capacity, strengthens resilience, and reduces vulnerability to future shocks. America does not need a policy framework that treats every growth signal as proof of excess demand. It needs one that recognizes a fragmented economy and distinguishes a necessary supply-side rebuilding cycle from broad-based overheating. The Fed and Wall St need to get out of the 1970s.

Sec Bessent stated strategy: derisk not decouple. IMHO, Yes a Grand Bargain will be reached b/t the US and China.

Make America Produce Again America’s resurgence is being driven by the private sector, not by a larger federal bureaucracy. Since January 2025, the economy has created more than one million private-sector jobs while the federal workforce has fallen to its lowest level since the 1960s. More than 1.3 million additional native-born Americans are working. That is the signature of a stronger growth model: investment over bureaucracy, opportunity over dependency, and productive work over government expansion. President Trump’s approach is distinctly Hamiltonian, with a touch of Clay, Jackson and Mckinley. It prioritizes productive capital, energy, domestic manufacturing, infrastructure, and the capacity to make real goods. Rather than relying on public hiring, deficit-funded consumption, or monetary stimulus to inflate demand, it seeks to expand the supply side of the economy. That is how America achieves durable, non-inflationary growth. More investment raises productivity, expands output, eases supply constraints, and supports wages through genuine demand for labor. This is also how America grow out of the fiscal crisis Trump inherited. The Federal Reserve and Wall Street should not reflexively attack this recovery. This is non-inflationary growth. Private-sector job creation, a smaller federal workforce, and more Americans in productive employment are not warning signs. They are evidence that pro-investment, pro-production, and pro-worker policies are working.

Keep it simple. The Fed will ignore theory and data and just follow the predictions market. Yes the Fed will hike again before the Mid-terms. Another hike in December followed another in March. Historic policy mistake on its way, count on it. 👇

The Warsh Fed. Pain must be felt on Main St! Fed still believes it has a false choice: growth or price stability. Don’t fight it. Yes it’s wrong ! 1) Tariffs are inflationary .. Hike rates 2) Growth is bad inflationary.. Hike rates 3) Hike rates into Negative growth Supply Shocks. 4) Wage growth inflationary: hike rates. 5) we live in the 1970s. 6) choose Wall St over Main St. Expect a massive policy mistake, more rate hikes. No the Fed reaction function has not changed. Have a nice day.