Priced for Perfection in an Imperfect World

Posted on April 24, 2026 by MN Gordon

Investors, having seen the light, race towards it with great expectations. The S&P 500 and the NASDAQ are, once again, near all-time highs. By the look of the lofty stock market indexes, the American economy must be operating at full tilt.

But what if the light investors are racing towards is not the promise of riches they’re expecting? What if it’s the headlight of a freight train locomotive that’s headed right towards them?

The Cyclically Adjusted Price-to-Earnings (CAPE) ratio, which was developed by Nobel laureate Robert Shiller, looks at real per-share earnings over a 10-year period to measure valuation. Right now, the S&P 500’s CAPE ratio is above 40. To give you some perspective, the historical mean is around 17.

There is only one other time in the history of the United States stock market that the CAPE ratio has been higher than it is today. That was December 1999 – at the peak of the dot-com bubble. When that bubble burst, it destroyed trillions of dollars in wealth.

Today, we are approaching those same manic levels of overvaluation. Yet investors don’t seem to be appreciating the risks they are taking. They’re assuming a quick peace in the Middle East, low inflation, falling interest rates, and rising earnings decades into the future. Continue reading →

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The Digital Noose Tightens

Posted on April 17, 2026 by MN Gordon

“They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”

– Benjamin Franklin

“Ultimately, arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.”

– Edward Snowden

GENIUS Act Update

In January, as part of our 2026 outlook, we detailed how the GENIUS Act, which was signed into law by President Trump on July 18, 2025, would bring about the next shift in American money. The GENIUS Act, if you recall, requires stablecoins to be backed one-for-one by U.S. dollars or short-term U.S. Treasuries.

This is a topic we don’t like writing about. In fact, we’d rather ignore it. But by doing so we’d be in dereliction of duty. So, today, begrudgingly, we offer an update on the latest efforts to tokenize the U.S. dollar – including the dollars in your bank account.

On April 8, 2026, less than 10 days ago, while most people were distracted with bomb dropping on Iran, the U.S. Treasury, its Financial Crimes Enforcement Network (FinCEN), and the Office of Foreign Assets Control (OFAC) issued a joint proposed rule to implement provisions of the GENIUS Act. This rule formally integrates stablecoins into the Bank Secrecy Act (BSA). Continue reading →

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The Big Money Mirage

Posted on April 10, 2026 by MN Gordon

“Big money will be made.”

The remark was made by President Donald J. Trump on Truth Social following the ceasefire deal with Iran.

Who will make the big money is unclear. But it sounds good, nonetheless.

With the announcement of the two-week reprieve in bomb dropping and missile strikes, and the supposed resumption of shipping through the Strait of Hormuz, the price of oil promptly dropped over 16 percent. By Wednesday morning both WTI and Brent crude were below $95 per barrel.

Perhaps two weeks will turn into a permanent ceasefire with Iran. As far as the greater Middle East is concerned, it’s unlikely. Israel was quick to clarify that the ceasefire with Iran does not include Lebanon. The war campaign in Beirut continues.

Back home in the USA, we’re witnessing a slow-motion economic train wreck. The promise of a low inflation strong growth economy remains elusive. Consumer prices are rising at an accelerated pace, while the jobs market is much weaker than advertised.

To fill the gap between rising prices and stagnating wages, consumers have loaded themselves up with massive amounts of credit card debt. Continue reading →

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Is Everything Contained in the Private Credit Market?

Posted on April 3, 2026 by MN Gordon

Is everything contained in the private credit market?

An affirmative ‘yes’ was the conclusion recently offered by Federal Reserve Chair Jerome Powell.

“We’re looking for connections to the banking system, and things that might, you know, result in contagion. We don’t see those right now. Interest rates are in a good place.”

Don’t mind the sudden appearance of restrictive redemption gates or the aggressive marking down of distressed collateral by the big banks behind closed doors. There’s supposedly nothing to see here.

Over the last decade, private credit was the ultimate speculative stretch for yield in a stubbornly low-yield world. It offered the seductive promise of higher reward, without the potential pain of higher risk. It became a fashionable place where wealthy investors could eke out a few additional percentage points of seemingly risk-free income and flatter their sophisticated egos in the process.

But now an eerie and familiar sense of impending déjà vu has settled over this shadow market. It’s a tragic movie we’ve already seen before. The one where localized and contained instability rapidly becomes systemic. Where financial contagion breaks out like a deadly virus through a crowded grade school classroom before anyone thinks to wash their hands. Continue reading →

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