This Week in Barrons: 6.8.2025

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• The proverbial squeaky wheel.  Per Seth Godin: One strategy is to spend time with that single wheel and make-it-personal.  The alternative is to realize that if there’s one wheel that’s squeaking, it’s likely that all the wheels need to be lubricated.

• Per Fred Krueger: Since 2000:

  - The global money supply has been growing at 8% / yr.

  - The U.S. National Debt has been growing at 8% / yr.

  - The S&Ps (adding dividends) have also grown at 8% / yr.

  - Housing (after rents) but without factoring in property taxes and maintenance has grown at only 6.5% / yr.

     We have a ‘leaky bucket’ because our currency is losing 8% per year.  Stocks almost make up for that loss, but not after taxes.  Housing doesn’t come close to making up for it. Bitcoin is the only asset that has an average 5-year growth rate of +60%/yr., and over the last 10-years of +85%/yr. 

• Tom Thibodeau (N.Y. Knicks coach) was fired last week… as the Knicks “decided to move in a new direction.”  I assume that the new direction did not include a coach who: (a) led his team to the playoffs in 4 out of 5 seasons, (b) had back-to-back 50-win seasons for the first time since 1995, and (c) won the franchise’s first conference finals in 25+ years.  [FYI: If I were a betting man, I’d take the UNDER on next year’s Knicks’ win total.]

• I wonder WHO will win in this divorce… Per Howard L: the billionaire businessman who earned his money through hard work, and has 220m followers on the social media network that he owns, OR a grifter President, who inherited his money, has taken numerous companies bankrupt, and has turned the White House into his personal cash machine?  We’re going to find out.

• Pigs Flew and Hell Froze Over… JPMorgan is allowing its clients to get serious about crypto, by offering them financing against crypto ETFs like BlackRock's IBIT.  They will now treat your crypto like your beachfront mansion or vintage Ferrari.  JPM isn’t about to miss its piece of the institutional money flooding into Bitcoin ETFs.  Wasn’t it Jamie Dimon that called Bitcoin: “worthless”, a “pet rock”, a “fraud”, a “Ponzi scheme”, and “only used by criminals for money laundering, tax avoidance, and sex trafficking?”  Now that they’ve greenlit crypto and allowed it to sit alongside stocks and art on the bank’s loan collateral list – I guess there is hope for pigs to sprout wings after all.

• Inside Trump’s Big Beautiful Bill’s $4T Tax Bill…  is a proposal to open accounts for each new baby born in the US until 2028.  These new accounts would be seeded with $1,000 that gets invested in equities, and locked up until the child’s 18th birthday.  Parents can contribute up to $5,000 annually.  The funds are designed to help parents prepare for their child’s financial futures.  [ChatGPT believes that these accounts are: “Virtually worthless because the wealthy have plenty of options to save, while the less affluent won’t be able to afford the additional contributions.”]

• Amazon is accelerating the development of…  AI-powered software for humanoids tackling the last-mile delivery challenge.  This move will disrupt the jobs of millions of supply-chain/delivery workers.

• The Nintendo Switch 2 is here.  The next-generation hybrid video game console & portable tablet device = is in the hands of its first proud purchasers.

• Outdoor public pickleball courts have rocketed 650%... in the last 7 years, but even that is not enough to keep up with the insane growth in players.

• The U.S. unilaterally introduced new, discriminatory, AI chip export restrictions…Beijing said: “China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests.”

• For Q1, the Mag-7 posted aggregate earnings growth of ~28% YoY… While that’s below the average 32% seen over the last 3 quarters, it still outpaced the ~9% clip of the other 493 companies in the S&P 500.

• SLATE promises a new truck for less than the price of a used car… Slate has received more than 100,000 refundable reservations, and (using Slate Maker) people have customized nearly 8m trucks. 

• If you are between 45 and 75…  and your diet emphasizes: olive oil, berries, leafy greens, and whole grains – you have ~20% LOWER risk of dementia.

• Consumers are cooking at home at the highest levels since early 2020.

• Meta may have virtually purchased a nuclear power plant… by agreeing to pay billions to keep an Illinois reactor online through 2047.

• Winnebago revealed disappointing earnings… and a slumping RV industry has historically tracked with recessions.

• ADP reported that private sector hiring… dropped by 70% - to its lowest level since March 2023.

• Friday’s JOBS Report showed that May created 139k jobs… but when you subtract the ‘birth/death model’ fake jobs – We actually LOST 60,000 jobs in May.

• TIP #1:  The chart above… The most interesting aspect to me is how massive the drawdowns / losses are (periods where the stock price declined from its previous peak) for some of the best stocks.  NOT only do you have to pick the right stock, but you have to be able to TIME-n-HODL through catastrophic declines in your portfolio.

• BitBonds:  Per Sam Lyman: “BitBonds are like regular bonds in the sense that Treasury would allocate 90% of the bond to fund the government.  But it would then use the remaining 10% of funds to purchase bitcoin.  Upon maturity, investors would receive 100% of the bitcoin upside up to 4.5% of the total compounded return.  After this benchmark is reached, investors would receive 50% of all remaining bitcoin upside.  Meanwhile, the government would keep the other 50% of remaining bitcoin upside to supply the strategic bitcoin reserve.”

• Circle’s IPO raised $1.1B in a deal that kept on giving… as CRCL continues its climb on into Friday’s close - pushing its valuation to $32B.

  o The stock opened Thursday at $69… after its IPO priced at $31.

  o Shares traded as high as $103.75… on its first day of public listing.

  o Circle (CRCL) gained ~170% in NYSE debut.

• X is joining forces with PolyMarket… which is great news for not just X and Polymarket - but for crypto and specifically 2 alts: UMA and Polygon (MATIC).   Polymarket is built on Polygon and relies on it to handle fast and low-cost transactions.  And Polymarket uses UMA’s Optimistic Oracle as its backstop for resolving tricky market disputes when official sources can’t settle a bet.

• Monday: Remember that “maintaining purchasing power is more important than chasing fake returns.”  Factually:

  - Bonds are being sold by the Chinese and Japanese to support their currency and equity markets.

  - This is sending shockwaves through the currency markets.

  - The breakdown in the SPY-to-GLD ratio will cause Gold-n-Silver to move higher.

  -  TIP #2: BUY the Sept 19: $54 / $59 Call Spread in GDX.

  The same fundamental pressures that drove gold higher in Jan. thru March, 2025 – are Rinse-n-Repeating as we speak. 

• Friday: Why did markets RALLY, when we actually LOST JOBS in May? Every month our Bureau of Labor & Statistics (BLS) injects ‘fake jobs’ into the monthly JOBS Report via the ‘birth/death model’.  These made-up jobs allow analysts to show that our economy is growing, and then next month the BLS will ‘revise’ previous month’s gains – lower. Recently, March & April were revised lower for a net minus of -95,000 jobs. If you subtract the ‘fake jobs’ from the real number, we would have actually LOST60,000 JOBS in May. But, we rallied because: European money is back to flowing into the U.S. If war breaks out between: Ukraine (NATO) and Russia, ‘capital controls’ will be put in place.  Exchanges will be shut down, banks will be closed, and nobody will be allowed to leave the country with large amounts of cash. The players are being proactive, and moving their money around. Foreign investors are buying the stability of the ‘best’ companies on earth – hence the DOW and the Mag-7 strength.  If a major war erupts, our markets could easily make new all-time-highs.

In summary, the Musk/Trump alliance collapsed in dramatic and public fashion.

• One point of contention was Trump’s new budget, which Musk said would “add to the govt’s debt, and undercut DOGE’s mission to reduce govt spending”.

• Trump responded: “I’m very disappointed in Elon. I’ve helped Elon a lot.”

• Musk quickly posted: “Without me, Trump would have lost the election.  Dems would control the House.  Such ingratitude.”

• Musk: “Trump, has 3.5 years left as president, but I will be around for 40+ more.”

• Trump: “The easiest way to save money would be to cut the many government contracts and subsidies that benefit Musk’s businesses.”

• Then Musk burned the bridge by calling for Trump’s impeachment, accusing him of hiding Epstein ties, and pledging to decommission SpaceX’s Dragon spacecraft – after Trump threatened to axe his government contracts.

• Bottom Line: It took months to build the Trump/Musk relationship, and just a few internet hours to break it apart.  Without that relationship, what’s left are policies that mostly hurt Tesla. 

• We’re inside a Volatility Box…  that has existed for over a month and is ping-ponging us between 5,800 and 6,000.  Every day that we remain inside this 200-point range, we are accumulating more and more open interest / risk.  The scary part is that the last several volatility boxes have resulted in a head-fake rip to the upside – prior to a downside resolution. 

• Bonds will threaten the S&Ps …  and bonds could blow this whole thing wide open.  We clipped above 4.5% on the 10-year on Friday, and when Treasury starts rolling debt at these levels – Tres. Sec. Scott Bessent won't be sleeping well.  TIP #3: If we break the $110 level on 30-Year bonds (/ZB), "all heck will break loose” in the S&Ps, and we’re just one or two trading sessions away from that happening.

• Volatility is too low to believe … With all the risks swirling around tariffs, wars, and the Musk/Trump soap opera – our VIX (volatility index) dropped to 16.77.  Are you kidding me?  This market is pricing in a $90 move for next week, and on Friday alone we moved $100.  The math just doesn’t add up.  TIP #4: The VIX (volatility) spread that is ridiculously cheap for next week is the: +$16.5 / -$19 Call Spread for $1.25. 

• Summary: ‘Volatility Boxes’ are binary events, and when they break – they break. We either explode to all-time-highs or get absolutely annihilated to the downside.  For some reason, volatility is priced for a very different market than what I’m seeing – and that’s an opportunity. This is not calm, summer trading.  This is the calm before the storm.

• Investors remain uninterested in silver.  Silver allocations are less than half the long-term average, and a fraction of where they were during the last big silver bull market. TIP #5: BUY Silver (SLV) and the Silver Miners (SILJ) and HODL.

• Factually: (a) The S&Ps closed back above 6,000 on Friday.  (b) The third year of a bull market (this year) will be messy.  (c) Small caps remain unloved and undervalued. It’s become common-place in the 2020’s to follow a rapid collapse with even a faster recovery.  Per Callum Thomas: Third-year bull markets have a range-bound / volatility behavior that produces interesting opportunities – hiding-out in plain sight.

• HODL’s: (Hold-On for Dear Life)

-  (+) IBIT – Blackrock’s Spot Bitcoin ETF ($59.26 / in at $24)

- (+) Physical Commodities = Gold @ $3331/oz. & Silver @ $36/oz.

- Bitcoin (BTC = $105,700 / in at $4,310)

- Ethereum (ETH = 2,510 / in at $310)

- (+) GLD – Gold ETF ($305.1 / in at $212)

• Options for Income:  De-Risking a Portfolio… (using IBIT for example)

- BUY-n-HOLD the IBIT ETF

- BUY PUTs: 1 Std. Dev. Lower, Expiring = 3-weeks away, OTM (out-of-the-money) for protection.

- SELL Covered CALLs: 0.75 to 1 Std. Dev. Higher, Expiring = 2-weeks away, OTM for income and to finance the PUTs.

• ‘De-Gen’ Economy:

- SE:   ($165 / in at $107)

- SSRM: ($12.7 / in at $10.90)

- MPLX: ($51.3 / in at $50.4 w/ 8% Dividend Yield)

- SILJ: ($15 / in at $11.24)

Please be safe out there!

_{Expressed thoughts offered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews.  You can subscribe by visiting: https://rfsfinanicalnews.beehiiv.com/subscribe.}

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