Everything Is Fine (A Manifesto in Confetti and Smoke)

The market is pricing in a Fed cut so obvious that even a consensus-seeking central bank caught on, and we're supposed to be excited. Thrilled. Let me break down the absurdity: CRH jumps 6% Monday because—hold on—it's being added to the S&P 500. Not because the company got better. Not because building materials suddenly matter more than they did Friday. Because passive funds have to buy it now. That's the trade. That's what moves 23.5 million shares. The index effect is so mechanical, so divorced from utility or reality, that we've stopped pretending there's anything intellectual happening.

Then Carvana. God, Carvana. A company that nearly cremated itself, that was a byword for bankruptcy and hubris, is now worth more than Ford. It trades at 90-100x earnings, which is to say it's trading on the premise that you will either be driving a Carvana or dead by 2027. Up 8,000% from late-2022 lows. Eight thousand percent. The stock hit $448 yesterday. S&P 500 inclusion hasn't even happened yet—it's not until December 22—and retail is already front-running the front-runners. By the time the actual forced buying happens, the stock will be so liquefied that it might actually transmute into Bitcoin.

Netflix got downgraded for losing the Warner Bros. bidding war to Paramount Skydance, because in our current financial comedy, losing billions in a competitive auction is apparently a bear signal. NFLX fell 3.4% Tuesday—not on earnings, not on subscriber loss, but on the idea that someone else wanted what they were selling. That's peak market psychology. That's the sound of sentiment. IBM buys Confluent for $11 billion and IBM stock drops 1% because why would you be excited when you're actually deploying capital in a sensible acquisition? The market prefers companies that trade at 200x earnings doing nothing.

Wave Life Sciences, a Singapore-based biotech you've never heard of, doubled on interim Phase 1 data from an obesity pill. Doubled. Structure Therapeutics nearly doubled on the same vibe. We are now in the phase where a press release about a pilot program showing weight loss of 11% over 36 weeks is enough to lift a biotechs to the moon. This is, without debate, what euphoria looks like.

The Fed's Elaborate Theatre

Wednesday at 2 p.m. ET, Powell walks out and announces a quarter-point cut that nobody doubts. The FedWatch probability has been oscillating between 87-90% for weeks. This is not a revelation. This is theater. Beautiful, necessary theater, but theater nonetheless.

What actually matters—and what the entire market will pretend doesn't matter until it does—is the dot plot. The SEP. What they forecast for 2026. Because Powell's going to sit there and say something like "we see limited room for further cuts" while simultaneously cutting. He's going to nod solemnly about inflation stickiness while core PCE is at 2.8%. He's going to use the word "data-dependent" seven times, which means "we have absolutely no idea."

The Fed is divided. Reportedly, at least three regional presidents think this cut isn't even necessary. Jeff Schmid has already said no to one. Stephen Miran wants to cut 50 basis points, which is the Fed equivalent of showing up to a board meeting with a molotov cocktail. When your committee has both a member demanding half-point cuts and members arguing for a hold, what you have is not a committee. You have a Zoom call that hasn't been cancelled.

Goldman Sachs is already calling it "the most divided committee in recent memory." David Mericle—their chief economist—actually used the phrase "contentious December meeting." In central banking, "contentious" is what they call it when someone mutters. Imagine what it actually means when Goldman is using that word.

The yield curve has been doing its own thing. The 10-year is rising into a quarter-point cut. That's the bond market—the supposedly rational, forward-looking bond market—basically shrugging at monetary easing because it's starting to calculate what happens in 2026, 2027, when inflation is still sitting at 2.8% annualized and the Fed is out of ammunition.

The Collateral We Don't Talk About

Bitcoin is at $90,870 with "extreme fear" in the crypto Fear and Greed Index—literally at 19, which is as low as these things go. Historically, this is where the bottom-fishing begins. Ethereum and Bitcoin are now approved as collateral in U.S. derivatives markets because the CFTC decided that the GENIUS Act made all the old guidance obsolete. We went from "crypto is terrorism" to "yes, put it in the margin account" in about three years. That's not regulation. That's regulatory exhaustion.

The crypto market is in free fall into a place where opportunity might exist, but the sentiment says nobody wants to look. Bitcoin needs to get above $92K to breathe. Everything under that is consolidation or descent.

What's Actually Real

Five Below rose 65% in 2025, and Truist just upgraded it with a $216 price target because it trades "below historical average." The magic words: "unicorn-like growth." We live in a time where a retailer can be up two-thirds for the year and the bank still says it's cheap. That's not analysis. That's capitulation to FOMO.

Broadcom might be getting Microsoft's custom chip business away from Marvell. That's real money. That's real competitive dynamics. Marvell is down 6%. Broadcom is up 2%. Someone is buying and selling based on actual ARM of the business, not narrative flow.

The S&P 500 is up 0.1% Tuesday morning. The Nasdaq is up 0.4%. The Dow is down 0.2%. We are in the mode where intraday moves have become so granular, so dependent on which sectors are rotating into index-addition trades, that traditional price action has become decorative.

The Honest Thing

Trump says he's picked a new Fed chair. Kevin Hassett is emerging as the frontrunner. The current chair's term is up in May. Markets are pricing in that a new chair will deliver rate cuts, because Trump said so on Air Force One, and we are now in the phase where presidential campaign rhetoric has become binding monetary policy expectation.

Everything is fine.

The market is adding Carvana—an online used-car retailer trading at 90x earnings—to the S&P 500, and we're talking about it like it's normal. The Fed is divided and cutting rates into inflation that won't move. Biotech is doubling on press releases. Crypto is at capitulation levels right before the next institution decides these things belong on the balance sheet, and then they go to $120K because they do.

Nothing is broken yet. But nothing is being built either.

What we have is a market on pause, waiting for a central bank decision that nobody doubts, while real players—IBM, Broadcom, Microsoft—move actual business around. That's where the money is. Not in the indices. Not in the sentiment. In the deals that get announced quietly, the acquisitions that move 2% on the names that matter.

Powell will cut Wednesday at 2 p.m. The bond market will shrug. The stock market will pop on the short-term stimulation, then think about what "limited room for further cuts" means. And we'll all wait for 2026, which is when everyone gets to find out whether this landing is soft or just prolonged falling.

Keep your dry powder. Watch the Fed. Ignore CRH's inclusion bounce. There's real money moving elsewhere, and the theatre is so loud you might miss it.