A Generational Stock Market High, December 2024

[Walker88]

It is my opinion the US equity market hit a generational high in the last full month of the Biden Administration, in December 2024. I suspect we will not see those highs breached for 25 years*.

 

*One caveat is if the Federal Reserve chooses to monetize the massive deficit and Depression the current POTUS will bring on, as money would be almost worthless, so stocks would be an inflation refuge of sorts.

 

While over the very long term, equity markets tend to move higher, partly from actual growth and partly as a function of the fiat monetary system, the world has seen two generational highs in the last 100 years. One was the 1929 crash in the US, where the Dow did not achieve a new high until 1954. The other was in Japan, which hit a high of 38,915.87 on 28 December 1989, and took until 2024 to top that level. So we have two examples of a generational high lasting 25 years and 35 years. This time will be no different.     

    

Three things are necessary to achieve such an ignominious accomplishment. One is excess exuberance that blinds people to actual risk. The second is stupidity. The third is a change in the economic underpinnings of the market. There is often a fourth factor, which is fraud that has gone ignored or unnoticed.

 

Markets have suffered from some of these factors, but not all of them at once, so sometimes scary market moves do not turn out to be generational highs. 1987 in the US was stupidity and excess exuberance. The stupidity evidenced itself in the idea of “portfolio insurance”, where market players thought they could immunize themselves from loss by shorting futures. They forgot that there had to be another side to that trade. Everyone tried to “immunize” themselves at the same time, but there were no buyers. The market fell 23% in one day. Because economic fundamentals were okay, the market recovered in a few months.

 

Another example was 2000, but that was largely part of NASDAQ and the dot com bubble. Nonsense was weeded out, such as Pets.com, but Amazon, Google, etc. proved they had a viable business model, so they recovered and prospered.

 

2008 was another, and nearly a generational high, as the entire world’s financial system was on the brink of collapse. That period had all the hallmarks of a top---stupidity, fraud, weak fundamentals and excess exuberance---but the bailout orchestrated by Obama in 2009 saved the system by backstopping banks and insurers, forcing banks to issue equity and slash leverage, and getting help from the Fed and its ZIRP. Confidence was restored (and banks bonused themselves undeservedly). Who can ever forget Synthetic CDO Squareds with a CDS kicker?

 

Today, there is excess exuberance (high P/Es), plus a belief---built from extrapolating limited experience into the future---that one is “always” rewarded for buying dips. There may well be fraud, too, but that will not evidence itself until a crash occurs. Like 2008, it’s probably in the $750 trillion in notional value of derivatives throughout the financial system.

 

The other necessary factors are also here. Economic fundamentals are deteriorating by the day, exacerbated by the idiocy of the current Administration. The dollar has already fallen 10%. The flip flop on tariffs has introduced uncertainty that will have business sitting on its hands. Alienating allies has likely made funding the deficit much more difficult, as foreigners have been buyers of upwards of 30% of US Treasuries. Even the across-the-board 10% tariff that remains in place, coupled with the 10% fall in the dollar, means inflation is guaranteed to pick up. Considering the basket of goods the average consumer buys, higher priced imports will produce at least 8% inflation, and much higher if tariffs are upped after this 90 day retreat.

 

What we clearly have in spades, which is a needed factor for a generational market high, is stupidity. It is abundantly clear POTUS has no clue what he has done, and has no realistic idea of where he intends to go. He is the proverbial dog chasing a car, with no plan what to do if he catches it. His idea of building everything in the US is patently absurd. The US lacks some of the key resources required in the modern technological world, so has no choice but to rely on others. Also, even if the US wanted to produce TVs and phones and other things domestically, factories take years to build and get into production. Besides, there’s no way a US-produced TV or iPhone can compete with foreign brands or production in terms of cost. People might pay $1500 for an iPhone, but few would pay $3500, which is the estimate of the cost if built in the US. Foreign producers may also realize the tariff is less than what it would cost to build in the US.

 

China holds far more cards than the US or POTUS, but he is too stupid to know. He also lies about the size of the trade gap, which is not the $1 trillion per year he claims, but was $295 billion in 2024, and about $260 billion after adjustment for services. The US is now only 15% of China trade, as China has diversified. China has the power to affect US interest rates by selling USTs or simply going on a buyer’s strike. China can withhold key things such as chips, aircraft parts and rare earths. China could nationalize all US investments in the Middle Kingdom, too. If the US halts grain sales to China, China will source elsewhere, as it did with soybeans under POTUS 45, which required POTUS to go “Socialist” and bail out US farmers.

 

All of these things point to a generational high in the US equity market. That’s going to hurt 401ks, corporate pensions, and insurance company portfolios. Heaven forbid a natural disaster hits and insurance policy payouts are required.

 

The last factor missing in setting a generational high was stupidity, but with this POTUS, we have more than enough of that.

 

It will probably be Joe Kernen III who finally announces a new market high in 2050 or so….if we get lucky.

[Harrisfan]

25 years 

 

Be a new high in 3 years.

[FlorC]

Stock market = overvalued , rigged casino.

Time for a big reset.

[FriscoKid]

1 hour ago, Walker88 said:

It is my opinion the US equity market hit a generational high in the last full month of the Biden Administration, in December 2024. I suspect we will not see those highs breached for 25 years*.

 

*One caveat is if the Federal Reserve chooses to monetize the massive deficit and Depression the current POTUS will bring on, as money would be almost worthless, so stocks would be an inflation refuge of sorts.

 

While over the very long term, equity markets tend to move higher, partly from actual growth and partly as a function of the fiat monetary system, the world has seen two generational highs in the last 100 years. One was the 1929 crash in the US, where the Dow did not achieve a new high until 1954. The other was in Japan, which hit a high of 38,915.87 on 28 December 1989, and took until 2024 to top that level. So we have two examples of a generational high lasting 25 years and 35 years. This time will be no different.     

    

Three things are necessary to achieve such an ignominious accomplishment. One is excess exuberance that blinds people to actual risk. The second is stupidity. The third is a change in the economic underpinnings of the market. There is often a fourth factor, which is fraud that has gone ignored or unnoticed.

 

Markets have suffered from some of these factors, but not all of them at once, so sometimes scary market moves do not turn out to be generational highs. 1987 in the US was stupidity and excess exuberance. The stupidity evidenced itself in the idea of “portfolio insurance”, where market players thought they could immunize themselves from loss by shorting futures. They forgot that there had to be another side to that trade. Everyone tried to “immunize” themselves at the same time, but there were no buyers. The market fell 23% in one day. Because economic fundamentals were okay, the market recovered in a few months.

 

Another example was 2000, but that was largely part of NASDAQ and the dot com bubble. Nonsense was weeded out, such as Pets.com, but Amazon, Google, etc. proved they had a viable business model, so they recovered and prospered.

 

2008 was another, and nearly a generational high, as the entire world’s financial system was on the brink of collapse. That period had all the hallmarks of a top---stupidity, fraud, weak fundamentals and excess exuberance---but the bailout orchestrated by Obama in 2009 saved the system by backstopping banks and insurers, forcing banks to issue equity and slash leverage, and getting help from the Fed and its ZIRP. Confidence was restored (and banks bonused themselves undeservedly). Who can ever forget Synthetic CDO Squareds with a CDS kicker?

 

Today, there is excess exuberance (high P/Es), plus a belief---built from extrapolating limited experience into the future---that one is “always” rewarded for buying dips. There may well be fraud, too, but that will not evidence itself until a crash occurs. Like 2008, it’s probably in the $750 trillion in notional value of derivatives throughout the financial system.

 

The other necessary factors are also here. Economic fundamentals are deteriorating by the day, exacerbated by the idiocy of the current Administration. The dollar has already fallen 10%. The flip flop on tariffs has introduced uncertainty that will have business sitting on its hands. Alienating allies has likely made funding the deficit much more difficult, as foreigners have been buyers of upwards of 30% of US Treasuries. Even the across-the-board 10% tariff that remains in place, coupled with the 10% fall in the dollar, means inflation is guaranteed to pick up. Considering the basket of goods the average consumer buys, higher priced imports will produce at least 8% inflation, and much higher if tariffs are upped after this 90 day retreat.

 

What we clearly have in spades, which is a needed factor for a generational market high, is stupidity. It is abundantly clear POTUS has no clue what he has done, and has no realistic idea of where he intends to go. He is the proverbial dog chasing a car, with no plan what to do if he catches it. His idea of building everything in the US is patently absurd. The US lacks some of the key resources required in the modern technological world, so has no choice but to rely on others. Also, even if the US wanted to produce TVs and phones and other things domestically, factories take years to build and get into production. Besides, there’s no way a US-produced TV or iPhone can compete with foreign brands or production in terms of cost. People might pay $1500 for an iPhone, but few would pay $3500, which is the estimate of the cost if built in the US. Foreign producers may also realize the tariff is less than what it would cost to build in the US.

 

China holds far more cards than the US or POTUS, but he is too stupid to know. He also lies about the size of the trade gap, which is not the $1 trillion per year he claims, but was $295 billion in 2024, and about $260 billion after adjustment for services. The US is now only 15% of China trade, as China has diversified. China has the power to affect US interest rates by selling USTs or simply going on a buyer’s strike. China can withhold key things such as chips, aircraft parts and rare earths. China could nationalize all US investments in the Middle Kingdom, too. If the US halts grain sales to China, China will source elsewhere, as it did with soybeans under POTUS 45, which required POTUS to go “Socialist” and bail out US farmers.

 

All of these things point to a generational high in the US equity market. That’s going to hurt 401ks, corporate pensions, and insurance company portfolios. Heaven forbid a natural disaster hits and insurance policy payouts are required.

 

The last factor missing in setting a generational high was stupidity, but with this POTUS, we have more than enough of that.

 

It will probably be Joe Kernen III who finally announces a new market high in 2050 or so….if we get lucky.

 

Useful post, thank you. Just one small caveat: while the market may have peaked toward the end of Biden’s presidency, the S&P 500 actually hit its all-time high on February 18, 2025, reaching 6,130.00. That’s exactly 30 days after his last day in office on January 19.

 

Having studied the market on a technical level over a long period of time, I’ve often noticed patterns like this that involve exact round numbers or time intervals, whether it’s a high occurring exactly 30 days after a key date, or market drops that are precisely 10%, 20%, or 30% from their previous peaks. Many people write these off as coincidences, but in my view, they often aren’t. These kinds of precise movements can be the result of behind-the-scenes manipulation by market makers, which only highlights just how much the markets can be rigged or engineered in subtle ways.

 

You’ve built a strong and compelling case for why this could indeed be another generational high. Only hindsight will tell. That said, even if it doesn’t turn out to be, I think there’s a strong chance we’re heading into a “lost decade” instead. That seems like the more probable outcome to me.

 

A lost decade typically means the market moves sideways for an extended period, rising and falling in ways that give the illusion of multiple bear and bull markets, but never truly exceeding the previous high for 10 years or more. We’ve seen this before, such as during the Dot-Com Bubble and Financial Crisis (2000–2010), and during the period of stagflation and economic turbulence from 1965 to 1983.

 

Given everything you mentioned: tariffs, inflation, deficits, rising US sovereign debt, and the real possibility of China surpassing the US as the world’s largest economy, I think the stage is set for something like that to happen now again.

 

[SunnyinBangrak]

1 hour ago, Harrisfan said:

25 years 

 

Be a new high in 3 years.

Before the end of this year more likely. The OP's apalling record on everything Trump makes him a reliable contrary indicator.

[swissie]

5 hours ago, Walker88 said:

It is my opinion the US equity market hit a generational high in the last full month of the Biden Administration, in December 2024. I suspect we will not see those highs breached for 25 years*.

 

*One caveat is if the Federal Reserve chooses to monetize the massive deficit and Depression the current POTUS will bring on, as money would be almost worthless, so stocks would be an inflation refuge of sorts.

 

While over the very long term, equity markets tend to move higher, partly from actual growth and partly as a function of the fiat monetary system, the world has seen two generational highs in the last 100 years. One was the 1929 crash in the US, where the Dow did not achieve a new high until 1954. The other was in Japan, which hit a high of 38,915.87 on 28 December 1989, and took until 2024 to top that level. So we have two examples of a generational high lasting 25 years and 35 years. This time will be no different.     

    

Three things are necessary to achieve such an ignominious accomplishment. One is excess exuberance that blinds people to actual risk. The second is stupidity. The third is a change in the economic underpinnings of the market. There is often a fourth factor, which is fraud that has gone ignored or unnoticed.

 

Markets have suffered from some of these factors, but not all of them at once, so sometimes scary market moves do not turn out to be generational highs. 1987 in the US was stupidity and excess exuberance. The stupidity evidenced itself in the idea of “portfolio insurance”, where market players thought they could immunize themselves from loss by shorting futures. They forgot that there had to be another side to that trade. Everyone tried to “immunize” themselves at the same time, but there were no buyers. The market fell 23% in one day. Because economic fundamentals were okay, the market recovered in a few months.

 

Another example was 2000, but that was largely part of NASDAQ and the dot com bubble. Nonsense was weeded out, such as Pets.com, but Amazon, Google, etc. proved they had a viable business model, so they recovered and prospered.

 

2008 was another, and nearly a generational high, as the entire world’s financial system was on the brink of collapse. That period had all the hallmarks of a top---stupidity, fraud, weak fundamentals and excess exuberance---but the bailout orchestrated by Obama in 2009 saved the system by backstopping banks and insurers, forcing banks to issue equity and slash leverage, and getting help from the Fed and its ZIRP. Confidence was restored (and banks bonused themselves undeservedly). Who can ever forget Synthetic CDO Squareds with a CDS kicker?

 

Today, there is excess exuberance (high P/Es), plus a belief---built from extrapolating limited experience into the future---that one is “always” rewarded for buying dips. There may well be fraud, too, but that will not evidence itself until a crash occurs. Like 2008, it’s probably in the $750 trillion in notional value of derivatives throughout the financial system.

 

The other necessary factors are also here. Economic fundamentals are deteriorating by the day, exacerbated by the idiocy of the current Administration. The dollar has already fallen 10%. The flip flop on tariffs has introduced uncertainty that will have business sitting on its hands. Alienating allies has likely made funding the deficit much more difficult, as foreigners have been buyers of upwards of 30% of US Treasuries. Even the across-the-board 10% tariff that remains in place, coupled with the 10% fall in the dollar, means inflation is guaranteed to pick up. Considering the basket of goods the average consumer buys, higher priced imports will produce at least 8% inflation, and much higher if tariffs are upped after this 90 day retreat.

 

What we clearly have in spades, which is a needed factor for a generational market high, is stupidity. It is abundantly clear POTUS has no clue what he has done, and has no realistic idea of where he intends to go. He is the proverbial dog chasing a car, with no plan what to do if he catches it. His idea of building everything in the US is patently absurd. The US lacks some of the key resources required in the modern technological world, so has no choice but to rely on others. Also, even if the US wanted to produce TVs and phones and other things domestically, factories take years to build and get into production. Besides, there’s no way a US-produced TV or iPhone can compete with foreign brands or production in terms of cost. People might pay $1500 for an iPhone, but few would pay $3500, which is the estimate of the cost if built in the US. Foreign producers may also realize the tariff is less than what it would cost to build in the US.

 

China holds far more cards than the US or POTUS, but he is too stupid to know. He also lies about the size of the trade gap, which is not the $1 trillion per year he claims, but was $295 billion in 2024, and about $260 billion after adjustment for services. The US is now only 15% of China trade, as China has diversified. China has the power to affect US interest rates by selling USTs or simply going on a buyer’s strike. China can withhold key things such as chips, aircraft parts and rare earths. China could nationalize all US investments in the Middle Kingdom, too. If the US halts grain sales to China, China will source elsewhere, as it did with soybeans under POTUS 45, which required POTUS to go “Socialist” and bail out US farmers.

 

All of these things point to a generational high in the US equity market. That’s going to hurt 401ks, corporate pensions, and insurance company portfolios. Heaven forbid a natural disaster hits and insurance policy payouts are required.

 

The last factor missing in setting a generational high was stupidity, but with this POTUS, we have more than enough of that.

 

It will probably be Joe Kernen III who finally announces a new market high in 2050 or so….if we get lucky.

All the above can happen if Donald gets his way. The question is: Who or what is possibly going to stop him?  I believe that violent reactions of the international financial markets can serve as a final referee to restrain or reverse the plans of the current oval-office "wild bunch".

 

Amazing, it takes 1 single person to unhinge the world. By a person, if not rich and famous, would have spent the last years in a mental institution.

[Cameroni]

6 hours ago, Walker88 said:

It is my opinion the US equity market hit a generational high in the last full month of the Biden Administration, in December 2024. I suspect we will not see those highs breached for 25 years*.

 

Lol, yes, I'm sure you can predict the stock market for 25 years. 

 

Can I have next week's lottery numbers as well, once in a lifetime genius?

 

 

[Cameroni]

6 hours ago, Walker88 said:

China holds far more cards than the US or POTUS, but he is too stupid to know.

 

Looks like you're too stupid to know that China's biggest export market is the USA, a value of 400 BILLION USD to the Chinese economy. 

 

But Trump holds no cards. Okay, well, thanks for your razor sharp analysis...hahahaha

[swissie]

6 hours ago, Walker88 said:

It is my opinion the US equity market hit a generational high in the last full month of the Biden Administration, in December 2024. I suspect we will not see those highs breached for 25 years*.

 

*One caveat is if the Federal Reserve chooses to monetize the massive deficit and Depression the current POTUS will bring on, as money would be almost worthless, so stocks would be an inflation refuge of sorts.

 

While over the very long term, equity markets tend to move higher, partly from actual growth and partly as a function of the fiat monetary system, the world has seen two generational highs in the last 100 years. One was the 1929 crash in the US, where the Dow did not achieve a new high until 1954. The other was in Japan, which hit a high of 38,915.87 on 28 December 1989, and took until 2024 to top that level. So we have two examples of a generational high lasting 25 years and 35 years. This time will be no different.     

    

Three things are necessary to achieve such an ignominious accomplishment. One is excess exuberance that blinds people to actual risk. The second is stupidity. The third is a change in the economic underpinnings of the market. There is often a fourth factor, which is fraud that has gone ignored or unnoticed.

 

Markets have suffered from some of these factors, but not all of them at once, so sometimes scary market moves do not turn out to be generational highs. 1987 in the US was stupidity and excess exuberance. The stupidity evidenced itself in the idea of “portfolio insurance”, where market players thought they could immunize themselves from loss by shorting futures. They forgot that there had to be another side to that trade. Everyone tried to “immunize” themselves at the same time, but there were no buyers. The market fell 23% in one day. Because economic fundamentals were okay, the market recovered in a few months.

 

Another example was 2000, but that was largely part of NASDAQ and the dot com bubble. Nonsense was weeded out, such as Pets.com, but Amazon, Google, etc. proved they had a viable business model, so they recovered and prospered.

 

2008 was another, and nearly a generational high, as the entire world’s financial system was on the brink of collapse. That period had all the hallmarks of a top---stupidity, fraud, weak fundamentals and excess exuberance---but the bailout orchestrated by Obama in 2009 saved the system by backstopping banks and insurers, forcing banks to issue equity and slash leverage, and getting help from the Fed and its ZIRP. Confidence was restored (and banks bonused themselves undeservedly). Who can ever forget Synthetic CDO Squareds with a CDS kicker?

 

Today, there is excess exuberance (high P/Es), plus a belief---built from extrapolating limited experience into the future---that one is “always” rewarded for buying dips. There may well be fraud, too, but that will not evidence itself until a crash occurs. Like 2008, it’s probably in the $750 trillion in notional value of derivatives throughout the financial system.

 

The other necessary factors are also here. Economic fundamentals are deteriorating by the day, exacerbated by the idiocy of the current Administration. The dollar has already fallen 10%. The flip flop on tariffs has introduced uncertainty that will have business sitting on its hands. Alienating allies has likely made funding the deficit much more difficult, as foreigners have been buyers of upwards of 30% of US Treasuries. Even the across-the-board 10% tariff that remains in place, coupled with the 10% fall in the dollar, means inflation is guaranteed to pick up. Considering the basket of goods the average consumer buys, higher priced imports will produce at least 8% inflation, and much higher if tariffs are upped after this 90 day retreat.

 

What we clearly have in spades, which is a needed factor for a generational market high, is stupidity. It is abundantly clear POTUS has no clue what he has done, and has no realistic idea of where he intends to go. He is the proverbial dog chasing a car, with no plan what to do if he catches it. His idea of building everything in the US is patently absurd. The US lacks some of the key resources required in the modern technological world, so has no choice but to rely on others. Also, even if the US wanted to produce TVs and phones and other things domestically, factories take years to build and get into production. Besides, there’s no way a US-produced TV or iPhone can compete with foreign brands or production in terms of cost. People might pay $1500 for an iPhone, but few would pay $3500, which is the estimate of the cost if built in the US. Foreign producers may also realize the tariff is less than what it would cost to build in the US.

 

China holds far more cards than the US or POTUS, but he is too stupid to know. He also lies about the size of the trade gap, which is not the $1 trillion per year he claims, but was $295 billion in 2024, and about $260 billion after adjustment for services. The US is now only 15% of China trade, as China has diversified. China has the power to affect US interest rates by selling USTs or simply going on a buyer’s strike. China can withhold key things such as chips, aircraft parts and rare earths. China could nationalize all US investments in the Middle Kingdom, too. If the US halts grain sales to China, China will source elsewhere, as it did with soybeans under POTUS 45, which required POTUS to go “Socialist” and bail out US farmers.

 

All of these things point to a generational high in the US equity market. That’s going to hurt 401ks, corporate pensions, and insurance company portfolios. Heaven forbid a natural disaster hits and insurance policy payouts are required.

 

The last factor missing in setting a generational high was stupidity, but with this POTUS, we have more than enough of that.

 

It will probably be Joe Kernen III who finally announces a new market high in 2050 or so….if we get lucky.

I am old enough to remember the "Japan Situation" in 1989. Stock analyst were not bothered by crazy high P/E ratios. "This is a new situation not to be compared to anything before". That was the wisdom of the time. We all know the rest of the story. Rinse and repeat?

[Harrisfan]

3 minutes ago, swissie said:

I am old enough to remember the "Japan Situation" in 1989. Stock analyst were not bothered by crazy high P/E ratios. "This is a new situation not to be compared to anything before". That was the wisdom of the time. We all know the rest of the story. Rinse and repeat?

USA has 7/10 largest companies. This is just a normal bear market. Next year I expect a bull market lasting til 2029.

[swissie]

53 minutes ago, Harrisfan said:

USA has 7/10 largest companies. This is just a normal bear market. Next year I expect a bull market lasting til 2029.

Be advised, it depends only on 1 person. Not God nor the Pope in Rome. The economical faith of the world is in the hands of a New Jersey born real estate guy. You may get your Bull Market, but only if Donald allowes for it.

 

The largest companies are US companies, very true. Operating internationally, no urge to "come home".

 

But women have always told us that "size doesen't matter". This may also apply to companies. Size not automatically assuring sucess.

[Harrisfan]

8 minutes ago, swissie said:

Be advised, it depends only on 1 person. Not God nor the Pope in Rome. The economical faith of the world is in the hands of a New Jersey born real estate guy. You may get your Bull Market, but only if Donald allowes for it.

 

The largest companies are US companies, very true. Operating internationally, no urge to "come home".

 

But women have always told us that "size doesen't matter". This may also apply to companies. Size not automatically assuring sucess.

Not worth worrying about.

[Cryingdick]

These stock threads always end up spectacularly stupid. I stopped reading when the OP said something about 25 years. It would take that long to read the rest. Anyway we can revisit this as needed.

[Harrisfan]

4 minutes ago, Cryingdick said:

These stock threads always end up spectacularly stupid. I stopped reading when the OP said something about 25 years. It would take that long to read the rest. Anyway we can revisit this as needed.

He's a lefty. They can predict climate and stocks for 25 years