Shiller CAPE20%
41.1
4.93
—
98th pct since 1881; web 41.1 vs computed 47.9; divergence 6.8 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 47.9; divergence 6.8 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 1.73% (nominal 5.17% - trailing 10y CPI 3.44%)
real price vs its 120-month average; 92nd pct historically
trailing 12m real price change, 70th pct. Froth marker, not a sell signal - the classic top is momentum turning DOWN while valuation stays red
EARLY-WARNING TRIPWIRE. +25bps vs the 2026-09-21 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
Held: new shorts are revealed positioning on semis/AI, but he says new index highs make a short-term bearish call difficult and does not call a top
Substack: added to shorts in Micron, Nebius, Palantir and SOXX; memory stocks at 'ridiculous prices'
Held: AI capex and capital-demand theme (summary from headline only)
CNBC: hyperscaler AI spending could hit $1 trillion next year (JPM India conference)
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'
Held: consistent with his debt-cycle view
WEF video (Fortune): AI drives productivity but is also 'a bubble that is going to have devastating effects on many people'
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
12m trimmed to +1: a 10y near 5% and TIPS ~2.6% compete with equities, equity risk premium ~2.4pp, 'no major near-term upside catalyst'
WisdomTree 'Higher Rates Test Stocks, But Growth Endures': 'If long-term yields decisively move above 5%, it becomes much more difficult for stocks to advance'
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: relative preference for bonds, not a call against stocks
Daily Spark 'Yield Levels Starting To Look Juicy': income without excessive risk even if rates rise further
'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 buying: ~2.7M Lennar shares bought 09-17..09-21, stake ~10% - a contrarian housing bet into the weakness Burry is shorting
SEC filing: Berkshire bought almost 2.7M Lennar class A shares over 3 sessions, now ~23.7M shares (~$1.8bn)
12m cut to -1 as the 10y closed at 5.11%, the highest since July 2007
Says the yield surge 'shouldn't be as big a surprise'; fundamentals evident for some time; 'psychological anchoring' to years of repressed yields
Held: fiscal and long-rate alarm, but explicitly says the problem isn't US stocks and advises against exiting US assets
Oaktree memo 'Shall We Repeal the Laws of Economics - Part III': buybacks are an ice pack on a fever; long rates stay elevated
Held: post-hike newsletter calls the Fed a sideshow next to tech-driven deflation (paraphrase only)
Wood newsletter (via Crypto Briefing): the hike is a sideshow; innovation pushes inflation toward 0-1%
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'
Held: formal note on the cut, 8,400 pushed to mid-2027, 70/30 Roaring-2020s/bear odds
'US MARKET CALL: Investors Curbing Their Enthusiasm...': 'Our new year-end target is 7,900'
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
hold 3.75-4.00% after the 09-16 hike, guidance 'will deliver price stability'. leaning to another hike; October odds drifted to ~64-70% by week's end (approximate - inferred from later articles)
Marks on fiscal, yields and the dollar - the fiscal tile's story - while arguing against selling US stocks
GMO's house view behind Grantham's -3/-4/-3: equity supply as the trigger - not authored by Grantham himself
Fixed income now competing with equities - the Excess CAPE Yield tile in Slok's words
Siegel's 5% 10y threshold and ~2.4pp equity risk premium - why his 12m drops to +1
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 25bps since 2026-09-21, and the 500bps staged-deployment trigger is 207bps away - roughly 8.3 more moves of that size. Have the tranche sizes decided before it gets there, not after. HY spreads at 293bps are still inside 500bps, so the staged dry-powder trigger is not armed. Credit is the tripwire: it goes first.