Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I send out three thoughts…
Sometimes these thoughts are on the economy, life, or hard assets.
If they’re helpful or hopeful to you, that’s great… Sometimes it just comes down to reality. That’s what I’m interested in…
So, here we go.
Here are three Sunday morning thoughts for you:
1. Technology, Media, And Telecom stocks (TMT) just had their largest net selling month, ever.
In the month of June, TMT stocks recently sold off at levels never before seen.
This doesn’t just mean that a bubble is shrinking…
It means the concentration of investors piling into these stocks is also higher than ever.
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At the beginning of June, the Magnificent Seven were responsible for 31% of the S&P 500’s valuation, which places an enormous amount of money in just a few places…
Tech stocks.
At the same time as the highest sell off of those stocks, the majority of investors have been stunningly optimistic.
And that optimism has reached peak “Dot Com” Bubble levels.
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The last time we saw the hopes and dreams ratio this high, the S&P 500 dropped almost 49%.
That was the dot com bubble bursting.
2. The Thursday night debate was peak collapse comedy material. Reagan was questioned over his age too, but he was more clever likeable than Trump.
Probably the dumbest part of Thursday night’s Presidential debate on CNN was when Trump was given the “too old” question.
With much wit and trepidation, Trump went on to explain his health in terms of cognitive testing and… his golf score.
Recently, Trump won 2x Club Championships.
And they weren’t even Senior tournaments!
So he’s in GrEaT shape.
Biden shot back with his -6 handicap, challenging Trump to a round of golf so long as he carry his own bag…
Peak collapse comedy.
Then you have Reagan. His so likeable wit turned the “too old” question into the kind of wise elder you go to for advice when you’re not sure what to do.
Believe it or not, when Reagan was running for President he was 69 years old.
At that time, 69-years-old was old enough to question.
The moderator asked Reagan the question:
“I recall yet, that President Kennedy had to go for days on end with very little sleep during the Cuban missile crisis. Is there any doubt in your mind that you would be able to function in such circumstances?”
Reagan:
“Not at all…
…And I want you to know, for the sake of this campaign, I am not going to exploit for political purposes my opponents youth and inexperience.”
Think what you want about Reagan, but there’s some light-hearted wit you can’t help but love.
It was a different time.
3. Big Bank’s Buyback Because their “Capital Cup Runneth Over.”
In April, JP Morgan CEO, Jamie Dimon, increased the bank’s dividend and continued to buyback shares because he said, “our capital cup runneth over.”
Bank buybacks have been ramping up since 2022, but no where near the amount of 2021.
Banks bought $82.3B worth of their own shares back in 2021.
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So far this year, they’re at $58B.
Companies can buy back shares for two reasons.
To increase the demand for their shares by decreasing supply.
Or because there’s been unexpected drop in stock prices. Like in 2021, when stock valuations dropped for banks, the S&P, and really the whole global market as a whole.
Big Banks used their excess capital to prop up their shares.
Now, banks are buying back shares for another reason: to decrease risk.
With less shares, banks like JP Morgan will have less risk in a market crash while increasing their share value price in the present moment.
Because of increased regulatory oversight via the Basel III Endgame plan, banks can no longer take on “blue sky” risk like the used to.
They are already suffering from billions in unrealized losses from commercial real estate.
Tighter oversight from regulators is there for a reason.
Does their “Capital Cup Runneth Over”?
Or, if Dimon has recently given warnings about a “hard landing” for the American economy, are they hedging themselves against risk in the future?
