Shiller CAPE20%
41.1
4.93
—
98th pct since 1881; web 41.1 vs computed 47.4; divergence 6.2 pts - earnings vintage suspect; 10yr real earnings carried from 2023-06-01 (39 months)
Eight valuation, credit and fiscal instruments plus a nineteen-voice sentiment roster, read against the deployment rules.
At composite 4.5+, historically a 40% probability that a 20%+ real decline begins within 36 months (29% for 30%+) - but 4.5+ zones also produced the longest melt-ups. The signal is regime, not timing.
98th pct since 1881; web 41.1 vs computed 47.4; divergence 6.2 pts - earnings vintage suspect; 10yr real earnings carried from 2023-06-01 (39 months)
median ~85%, dotcom peak 146-172%; 200%+ is the top of the historical range
1/CAPE 2.43% - real 10y 1.57% (nominal 5.01% - trailing 10y CPI 3.44%)
real price vs its 120-month average; 91st pct historically
trailing 12m real price change, 68th pct. Froth marker, not a sell signal - the classic top is momentum turning DOWN while valuation stays red
EARLY-WARNING TRIPWIRE. +3bps vs the 2026-09-14 report (WIDENING). Tight = complacent; past 500bps alongside an equity drawdown is the staged-deployment trigger
positive after a post-inversion re-steepening = 3.0 (*) - recessions historically arrive 12-18 months AFTER un-inversion, not during the inversion
federal debt/GDP 123%. ~6% deficits at full employment scores 4.5
Scion stopped filing 13Fs in Nov 2025 - positions now come from his Cassandra Unchained Substack, so the disclosure lag is his choice and the newest trades (Aug 4) are paywalled
Disclosed bearish book: puts on NVDA and PLTR at up to ~80% of the portfolio (~$1.1bn notional), plus TSLA, CAT, AMAT, SMH and MU opened 30 June and added 24 July
Held: inflation 'not clear it's over'; prepare for rate volatility; no recession call
Yahoo Finance interview hours after the hike: 'it's not clear to me it's over yet'; 'a lot of things out there which are quite dangerous'
latest sourced statement is June 2026 - inside the 6-month window but not fresh this fortnight
Calls this 'the most expensive market in American history'; a reversion to trend would be closer to a wipeout than a correction, and the odds an AI bubble does not bust are 'slim to none'
Held: Fed commentary, no equity view
Yahoo Finance interview: Warsh's speech 'utterly conventional' - 'tight money until we see a lot better data'
conviction up: says his own indicators already put AI stocks in bubble territory, and the next crisis is sovereign rather than banking
Late-stage debt cycle; Fed balance-sheet expansion is 'stimulus into a bubble'; most likely path is a 1970s-style stagflationary spiral with the Fed monetising
Held: bonds over stocks, a recession surprise ahead; talk only, no positioning
Kitco interview: one hike is not a mistake but four or five would be; 'block your nose and buy' Treasuries; expects bonds to outperform stocks within months
Held: probably not one-and-done, but not a long cycle either
Schwab Market Perspective: stocks fell sharply after Warsh's press conference; slow hiking cycles have historically produced milder declines
CUT and GAP CLOSED: reportedly cut AI holdings to ~20% of their level six months earlier (FT, via secondary source), calls AI a likely 'profit bubble' and rates too low
Piper Sandler closed-door meeting (FT): Fed members calling policy restrictive are 'just ridiculous'; 'We are likely in a profit bubble because this AI construction boom will eventually end'
Held: backs the hike, no equity call (summary from headline only)
CNBC: 'Market clearly saying the Fed rate hike was a good decision'
Conviction up: more bond-bearish, AI market path getting bumpier; no explicit equity call
CNBC at Cernobbio: global bond sell-off not over; 'I don't see any appetite in the U.S. for immediate fiscal consolidation'
'No crash, just a forward weave requiring a cane'; bearish long Treasuries on deficits, prefers energy infrastructure and MLPs to exuberant tech
Valuation casts a shadow over 2026; the record rally is at risk of stalling unless AI earnings show up
REVEALED PREFERENCE FLIPPED: first net buying in 15 quarters. Cash still $365bn, so the caution is real - but the direction of travel reversed
Q2-26: ~$19.8bn net equity purchases after 14 straight quarters of net selling; cash $397.4bn -> $365.5bn; $4.5bn of buybacks; Alphabet now the third-largest holding at $36.6bn
current worry is private credit, not public equity: fast capital deployment into direct lending, with PE portfolio-company performance as the hinge
Memo 'What's Going On in Private Credit?' - direct lending's growth, and the issues rapid deployment created
Held: rotation within megacaps (out of GOOGL, into META), not de-risking
ARK sold ~$28.7M of Alphabet (09-09/09-11) and bought ~$27.9M of Meta
Held: the loudest bull, now openly split from Yardeni
CNBC Closing Bell: S&P could 'easily be above 8,200 by the end of the year' as long as the AI trade isn't extinguished; Q4 'one of the biggest rallies'
DOWNGRADE: the Street-high bull cut his own target; bearish-scenario odds raised from 20% to 30% on 09-12
Cut YE S&P target 8,400 -> 7,900, 'proceed with caution' as the 10y passed 5%
Held: expects a hike, a 'shudder' and sell-off, then a range-bound market
CNBC Closing Bell: Warsh will 'bite the bullet and raise rates'; 'you'll see a sell off'
RAISED from +1: not worried about an AI bubble; rising real yields reflect AI capex and growth, not a bond crisis
Cernobbio interview (Bloomberg video 'Roubini Says He's Not Concerned About an AI Bubble'): stocks rise with growth, though 'some corrections' possible
HIKED 25bps to 3.75-4.00% on 2026-09-16, 12-0 - the first increase since 2023. Warsh: 'removing accommodation', no forward guidance; median dot 4.125% end-2026, 16 of 18 officials see at least one more 2026 hike. the headwind became an actual tightening; October hike odds ~51% on 09-17
The first hike since 2023, 12-0 - the 10y crossed 5% the same week, moving the Excess CAPE Yield and curve tiles
The Street-high bull cutting his own target - the first big roster move of the hiking cycle
Composite 4.37 (frothy / hold dry powder). Base DCA continues regardless of score. Above 3.5, so the DCA-doubling rule stays dormant; it arms at 3.5 (+0.87 away). Hold dry powder. Direction matters more than the level here: spreads widened 3bps since 2026-09-14, and the 500bps staged-deployment trigger is 232bps away - roughly 77.3 more moves of that size. Have the tranche sizes decided before it gets there, not after. HY spreads at 268bps are still inside 500bps, so the staged dry-powder trigger is not armed. Credit is the tripwire: it goes first.