The U.S. equity markets have been hitting all-time highs despite an ongoing war on Iran and relentlessly-increasing prices for gasoline, diesel, and other oil-derivative products like fertilizers. The rise seems to be driven almost entirely by huge increases in the share prices of AI-related companies (producers of the technology and of the materials necessary for the "build-out" of the process) - justified in the minds of investors by the potential for enormous gains in productivity and profits at some time in the future. The financing of these investments and the issuing of new shares to finance growth has sucked money out of other investments. These developments are alluded to in a recent statement by the CEO if Sun Microsystems, reproduced here in a post from Facebook several months ago:
For old-timers like me, the numbers look crazy. I'm old enough to remember the Black Monday stock market crash of 1987, when the DJIA fell over 20% in one day. I was an investor back then, and I've told people I "slept like a baby" through it (i.e. "woke up every hour and cried").
This ongoing and totally unjustified war by the U.S. and Israel on Iran is having widespread rippling effects through the world economy; the U.S. has been relatively spared but is unlikely to escape unscathed. Full disclosure: I established bearing options positions on the S&P index yesterday. Further disclosure: I tend to be a "perma-bear" predicting market falls that typically don't occur.
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