Is our stock market bubble thesis intact?

Happy Wednesday out there, team 42 at your Skipper here, Darius Delta, present our macro minute for Wednesday, August 26, 2026. As always, we'll start with the executive summary from today's Lead Off Morning Note. So let's dive right in. Today's key macro question is, is our stock market bubble thesis intact? The short answer is yes. This is one of the best investing backdrops of all time. The July PC report and revised Q2 GDP data, which featured critical insights regarding the corporate profit cycle and the historically bullish widening disparity between labor and capital income, confirmed bubble risk remains as high as we initially outlined last fall. As per verse as it sounds, a productivity boom that perpetuates a jobless recovery in the resilient U.S. economy amid paradigm CAK running hot is among the most bullish growth signals ever. We have been fundamentally bullish on risk assets since we pivoted bullish in January of 2023 after being appropriately bearish in the everything bubble bursting of 2022, save for the two months ending in April of 2025 ahead of the tear of tantrum. No change to this view. The only thing more bullish than a productivity boom that perpetuates a jobless recovery in the resilient U.S. economy amid paradigm CAK running hot, these are all themes of ours, is a bond market that perpetuates an extension of Besson's bridge and pulls forward Fed youth curve control, Besson's bridge being another theme of ours. This would mark the official start of paradigm D, AKA default via debasement for those who weren't paying attention at the start of reserve management purchases in December. So, I know that sounds perverse. I'm not cheering on the historically wide and widening spread between labor share of national income and capital share of national income because I'm smart enough and educated enough on the subject matter to understand where this is all headed, which is paradigm E, major political realignment and total war. We've done this twice already in this country, we've done this hundreds of times around the world across the last few millennia. It's not imminent, but in our opinion, we think the timeline of that outcome is far sooner than the bond market realizes, far sooner than the stock market realizes, far sooner than I would say some in the currency market realize in our opinion, we think the rapidly ascending share of gold as a share of central bank FX reserves implies that we are right on paradigm E being sooner than the bond and stock markets realize is correct. So, we could be wrong in that view, but in my opinion, central bankers panic behind gold to the degree that they have over the past few years and selling dollars to the degree that they have over the past few years indicates something is up. And so, I'm aligned with Ray Dalio, Dr. Peter Turchin and Neil Howe, people who were far smarter than me and far smarter than 99.9999999999 to the if degree percent of people on earth, they have that view too. So, I'm standing on the shoulders of giants when we arrive at these inclusions. But for now, the stock market bubble thesis is still intact. So, as always, a wrap up with a question from our community. Not a question, but this was just titled Tuesday's macro-minute Epic Rants. So, if you missed our macro-minute yesterday, we talked about why we are staunchly of the opinion that the U.S. China AI race and, okay, end quote, air quotes is little more than a cleverly concocted marketing campaign that's designed to tickle your Magdala and separate you from large quantities of your money as quickly as possible so that you can further enrich those who are responsible for perpetuating that fear in the market. So, just reading this macro-minute, or I started this comment from one of our members, I said, "Just watch yesterday's macro-minute." DD, awesome take on the AI race. I have not heard that perspective and it hits like a sledgehammer. Once again, you enlighten us. Thanks for sharing your next level of thinking. So, appreciate the kind feedback. I know I'm not for everyone, 42 macros, not for everyone, but I will say this. I don't speak from the perspective of being a Democrat. I'm not a Democrat. I don't speak from the perspective of being a Republican. I'm not a Republican. I don't speak from the perspective of being someone who supports socialism. I despise socialism. I speak from the perspective of a Christian who supports inclusive capitalism, the kind of capitalism that we romanticize about, the kind of capitalism that allows for families to actually spend time with each other, as opposed to everyone having to work two or three jobs seven days a week to stay on the hamster wheel, that is getting longer and longer and longer and bigger and bigger and bigger as a function of this nationwide affordability crisis, which we know is a core driver of this K-shaped economy crisis via the Cantalon effect. My perspective is as someone who grew up at the very bottom of the K-shaped US economy and has ascended to near the top of the K-shaped US economy with hard work, great mentorship, and ultimately many blessings from my Lord and Savior Jesus Christ. And so I have a heavy heart in understanding the hardship that a greater and greater quantity and greater and greater share of our society is feeling because of the selfish pursuit of corporate profits above all else in this society. And so, again, I'm not a socialist and I'm just, I'm a capitalist. Obviously, I'm a big fan of capitalist. Not a Republican, not a Democrat. I'm a purple tie wearings, data driven, robustly research centrist that probably forgets more about this stuff on his way to the bathroom than most people have ever learned. And I say that with humility because I know how many hours how much work it takes to arrive at these conclusions. I know how many charts. I'm on my 2500 chart in Bloomberg in five years. I've made 2500 charts in countless others in Excel and Python in five years. And so when we talk about these big subject matters like the fabricated US-China AI race or the widening disparity between labor and capital income and the likelihood of paradigm D default by debatement perpetuating a deepening nationwide affordability crisis that ultimately tips the boiling pot over into paradigm E which is major political realignment in total war. I'm not making this stuff up. I'm drawing from decades of experience studying these very big topics with data and precision and ultimately applying that's deliberate study to making accurate forecasts about the economy and financial markets, accurate forecasts that thousands of investors are using to make tons of money and to save money in bear markets on a consistent basis. You're not gonna find somebody my age who's had a better significantly better career on global Wall Street. And so we wrap it up there. Thanks for human being today. We'll catch you back here tomorrow. Cheers.