Beyond the Mag 7: Unmasking the Stark Reality of a Troubled Market

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In the dazzle of the Mag 7’s soaring earnings, a hidden truth emerges. For the 384 out of 1,946 companies comprising the Russell 2000, Q4 earnings reveal a shocking -53% QoQ growth. Is the market poised for something far more ominous than we think?

It’s not just a concern for investors; it’s a national security issue. The capital markets’ inability to efficiently allocate capital raises alarms. Equally unsettling is the fact that the equity market cap stands at 185% of GDP, a perilous 40% higher than the Dotcom Bubble Peak.

The question looms: Should Powell be trembling or rejoicing? As Warren Buffett wisely said, “The market can remain irrational longer than you can remain solvent.” The room for further distortion exists, and we’re caught in the midst of it. The chart tells a story, one that might not end well for valuations.

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