Thoughts on the Market

April 6, 2026 

Scenarios, Global Consequences, and a Darker Strategic Calculus

I.  Positioning & Market Context

Last week I wrote about taking some profits on my short stock market positions, as I was sure we were due for a period of corrective consolidation. The market responded on cue with a strong bounce that tested the recent downtrend resistance line.  The bounce looks corrective so far, so I have started rebuilding fresh downside limited-risk option plays in anticipation of renewed selling pressure.

My bearishness on stocks is not specifically linked to the Iran war as a cause. Rather, I view the war merely as a trigger. The bubble conditions that have built up in stocks should have led to a major reversal years ago, but the interventionist efforts of the authorities — through massive debt issuances and monetary stimulation — have been able to forestall the eventual cleansing. In doing so, however, they have magnified the scale of the eventual correction far beyond what most people can imagine.

The Debt Spiral

To understand why I believe the coming correction will be catastrophic, consider the trajectory of U.S. net interest payments on the federal debt. In 2007, this figure stood at $163 billion. It took thirteen years to double. Now look at the pace of the last six years: