Presidents do NOT change markets

But business cycles do…

A thread 🧵 2/ A chart comparing post-election S&P 500 performance shows an eye-opening stat:

S&P 500 sees around 40% higher returns under Democrat-led administrations than under Republican ones

Tariffs are set to rise to 18% under Trump

This level was last seen around the Great Depression

Things are about to get absolutely crazy…

A thread 🧵 2/ One Trump policy could negatively impact the economy is tariffs

This looks similar to Herbert Hoover’s trade policies

Which contributed to the onset of the Great Depression

The US money supply has doubled in just 10 years

This liquidity surge could fuel Bitcoin’s parabolic run-up

If Bitcoin reached gold’s market cap, it would hit $1 million

Is this really possible?

A thread 🧵 2/ Bitcoin's chart looks parabolic right now

But its market cap is still just $2 trillion - about the same size as Meta

For all the hype, it remains relatively small compared to other global giants

3 MAJOR stock market crashes had one thing in common

Today, we have the EXACT same condition in place

Buckle up.

A thread 🧵 2/ 3 of the most significant peaks in US stock market history all happened under Republican presidents:

1928 (Great Depression) - Herbert Hoover

1973 (Inflation wave) - Richard Nixon

2008 (Financial Crisis) - George W. Bush

A 1% rise in the debt-to-GDP ratio = 4 bps increase in yields

At today’s levels, that implies a 9% 10-year Treasury yield

Is that where the bond market is headed?

A thread 🧵 2/ The US government has been running a steep deficit since 2008

And is still overspending about $500 billion per quarter

Fed’s aggressive rate hikes haven’t caused a recession yet

The unemployment rate has begun turning back down

This is the goldilocks scenario for the markets

A thread 🧵 2/ In the 1940s and 1950s, US bond yields stayed low before gradually rising in the early 1960s

But something happened in 1967 that caused them to surge

And that same thing has just happened again today…

US tariffs are set to hit the highest levels since the Great Depression

This has MASSIVE implications for the US economy

A thread 🧵 2/ The Tax Foundation estimates that under Trump, the average US tariff rate could rise to 17.7%

He’s proposed a 10% tax on all imports, 25% on Mexico and Canada, and 60% on Chinese goods

This chart shows how that compares to tariff levels dating back to the 1930s

US stock market has gained 60% in just 2 years

This has only happened 4 times since 1985

3 out of 4 ended in over 20% crashes

But 1 ended in a complete melt-up

Which one is it going to be this time?

A thread 🧵 2/ Over the past 2 years, the US stock market has surged by 60%

To put that in perspective, it took 20 years to achieve similar returns between 1965 and 1985

And 15 years between 1996 and 2011

Trump’s average US tariff rate could hit 17.7%

Levels last seen only during the Great Depression

This has MASSIVE implications for the US economy & stock market

A thread 🧵 2/ The Tax Foundation estimates that under Trump, the average US tariff rate could rise to 17.7%

He’s proposed a 10% tax on all imports, 25% on Mexico and Canada, and 60% on Chinese goods

This chart shows how that compares to tariff levels dating back to the 1930s

Markets are very close to new all-time highs

But market breadth is at its weakest in a year

This should NOT be overlooked…

A thread 🧵 2/ The S&P 500 has surged back to ATHs after a brief consolidation

And right on cue, mainstream media is fueling euphoria again

DeepSeek’s AI release has just crashed a MASSIVE bubble

But it’s not the one that you think…

A thread 🧵 2/ A new Chinese AI model, DeepSeek, is shaking financial markets

After the US stock market hit a new ATH, fueled by a 2-year AI boom, investors are speculating whether DeepSeek could burst the AI bubble

Similar to how the tech bubble burst in the early 2000s

Bitcoin’s parabolic rallies have always coincided with this signal

And it is now on the brink of triggering once again… Buckle up

A thread 🧵 2/ Something is happening on Bitcoin that has also happened here, here, here, and here

In each of these instances, the US economy was experiencing what's called a “cyclical recovery”

A cyclical recovery is a moment when the majority of the US economy is re-accelerating after a cool-down period

The last 2 times this happened, it marked major tops on Bitcoin

This is a signal that every crypto investor should monitor closely

A thread 🧵 2/ Believe it or not, Bitcoin’s next top will likely be influenced by oil prices

The last 2 major Bitcoin peaks were indirectly caused by rising oil prices

And we can see that by overlaying this data set that shows us when oil prices are trending higher or lower

Banks are not tightening lending standards anymore

This is EXACT opposite of what happens going into recessions

A thread 🧵 2/ While the central bank has significant influence, people and businesses borrow from domestic bank, not directly from the Fed

The Fed lends to banks, which then provide loans to businesses and consumers

WARNING: Housing defaults have skyrocketed

This is unlike anything we’ve seen in a decade

A thread 🧵 2/ The Fed had been on an unprecedented hiking cycle

Taking rates from near 0% to 5.5% in just 1.5 years

US government debt market collapse has begun

This has MASSIVE implications for the economy

A thread 🧵 2/ US government bonds have broken below a 40-year uptrend

After experiencing one of the most painful bear market since the 1980s

The stock market is now off by 5% from its ATHs

Fund manager positioning & rising yields caused this drop

But, how much more pain is left?

A thread 🧵 2/ On December 9, 2024, we posted a video warning that the stock market was due for a short-term pullback

Since then, the S&P 500 has corrected a few % points

And the equal-weighted S&P 500, RSP, has dropped about 7%

The big question: Is it time to turn optimistic, or is more pain ahead?

Unemployment reached a RECORD 25% following the 1929 peak

This was cause of something called “Structural Unemployment”

Today, AI threatens of doing something similar

A thread 🧵 2/ There’s a big similarity between the lead up to the 1929 market top and today

And that is technological disruption

In the early 1900s, machinery like tractors boosted productivity, while employing fewer people

So, many skills that were useful in 1900 were no longer relevant in 1930

Two 50% declines followed by an aggressive rally

This is exactly what happened leading up to the 1929 crash

A thread 🧵 2/ A pattern has been developing over the last 2 decades in the US stock market that we’ve seen before

In the early 1920s, after a decade of stagnation and 2 violent 50% declines, stocks began to move aggressively higher

Which kicking off a prolonged bull market

S&P 500 is 26% above its 2021 highs

But transportation sector is still 6% below

This divergence is called Dow Theory

And is sending a major WARNING signal

A thread 🧵 2/ Between 1999 and 2000, the Dow Jones Transportation Average began to decline

And created a divergence with the S&P 500, which kept hitting all-time highs

The transportation sector’s decline was an early warning sign for the 2000 market peak

The 1920s saw the greatest stock rally ever

Followed by the WORST crash in history

Today’s market is following a similar footpath

A thread 🧵 2/ A pattern has been developing over the last 2 decades in the US stock market that we’ve seen before

In the early 1920s, after a decade of stagnation and 2 violent 50% declines, stocks began to move aggressively higher

Which kicking off a prolonged bull market