Weekly Commentary: The Mania And The Frog

2026-06-07 09:30:00 ET

Monetary disorder evolved to become deeply systemic. It was on full display this week, especially Friday. The mania and the frog in the pot syndrome. Instability has been percolating (fragilities building) for so long that we’re numb to it all. In the markets, it’s more than comfortably - it has become exuberantly, manically numb.

This is an acutely precarious market backdrop. As we’ve witnessed repeatedly, fledgling “risk-off” market pullbacks foreshadow abrupt market reversals, short squeezes, the unwind of bearish hedges, “buy the dip,” FOMO, liquidity overabundance, and intensifying market melt-ups. Market dynamics have dramatically favored risk-taking and speculative leveraging. For a while, disregarding risk has been systematically rewarded.

All that said, we’ve quickly returned to an environment where risk should be taken seriously. Some of the same dynamics that fueled a historic market speculative blowoff could now trigger downside market instability, illiquidity, panic, and dislocation. In recent years, I’ve increasingly drawn parallels between the current Bubble backdrop and the “Roaring Twenties.” It’s worth noting that the 1929 crash lacked a clear catalyst. The fateful final bout of blowoff excess reversed abruptly, completely blindsiding everyone....

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