Thunderclouds Overhead
The gap between the charged-up price action on Wall Street…and the depressing ground of the macro world....must be closed. What will spark a correction, we don’t know.
Friday, May 1st, 2026
Bill Bonner, from Rancho Santana, Nicaragua
We began the week amazed and baffled. It’s now Friday and we’re still amazed and baffled. Between the state of the world...and the state of the stock market...is a state of confusion so wide even Evil Knievel couldn’t jump across.
As for the state of the world, and the US position in it, the news has gotten worse. The quagmire looks deeper. Federal finances are shallower. And America looks more and more like a desperate, bumbling empire led by an aggressive geriatric.
(In a good way! Trump is showing the world that America’s near monopoly on coercion — bombing, bullying, threatening, sanctioning — won’t stop its decline. On the contrary, the more we use it…the faster we go down.)
And the feds are doing their part too — more dysfunctional and incompetent than ever.
At home, the Committee for a Responsible Federal Budget:
Debt Reaches 100% of GDP It’s happened — the national debt is now larger than the U.S. economy, about twice the historic average. With debt now above 100% of GDP, it’s only a matter of time until we pass the all-time record of 106% reached in the immediate aftermath of World War II. This time the borrowing isn’t borne from a seismic global conflict, but rather a total bipartisan abdication of making hard choices.
And overseas...
Trump thought he’d score another easy win by murdering Iran’s leader and much of his family. Surprise, surprise. Iran blocked oil shipments from the Gulf. Trump didn’t like that, so he’s blocking them himself. This, of course, has a cost. CBS News:
Oil prices hit wartime peak, with Brent crude touching $126 a barrel
Newsweek:
Gasoline prices skyrocket to new high
MarketWatch:
Most US farmers can’t afford all the fertilizer they need this year
As many as half of all Americans live ‘hand to mouth.’ And they have to buy gas. Result: less for the hand to bring to the mouth. CNBC:
30% of car buyers trading in vehicles in the US now have negative equity, owing an average of $7,200 on their old loans. A record 43% of these underwater car buyers are opting for 84-month (7-year) loans. Their average monthly payment: $932, the highest level ever recorded.
Team Trump says that whatever we pay for the war is a small price to pay for whatever it is that they expect to gain from it. But it seems more and more likely that we will gain nothing.
So...either POTUS has an ace up his sleeve...
Or the whole thing is just another foolish shenanigan — like Vietnam, Iraq, the Covid Lockdown, stimmie checks, $39 trillion in federal debt — another wretched gift to the military/industrial/think tank/Israeli/university/surveillance industry.
Meanwhile, over in the wonder world of Wall Street, stocks are surging ahead. Quartz:
The S&P 500 reached a new all-time intraday high on Thursday, while the Dow Jones Industrial Average added 730 points, or 1.5%. The Nasdaq $NDAQ +0.70% Composite rose 0.2%.
So, what happens next?
Somehow, the gap between the charged-up price action on Wall Street…and the depressing ground of the macro world....must be closed. What will spark a correction, we don’t know. But when it happens, speculators are likely to find themselves on open ground, with a dark thundercloud overhead...and a puddle beneath their feet.
Stay tuned...
Regards,
Bill Bonner
"Team Trump says that whatever we pay for the war is a small price to pay for whatever it is that they expect to gain from it."
I disagree. I imagine that mid-terms will tell us what the rest of us think.
The bag holders drive up oil and shipping one day and Wall Street sells off their holdings after hours. Over and over again the big money is leaving on every rise. That's my guess as to why it up one day and down the next.