Market On Open, Wednesday 24 September

Last updated on Sep 24, 2025

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The Greenspan Moment

by Alex King, CEO, Cestrian Capital Research, Inc

Yesterday, Chairman Powell didn’t exactly say equity valuations were frothy, but he kind of implied it. Now, strictly speaking, equity valuations have nothing to do with the Fed - their mandate is inflation control and employment maximization - but since as every fule kno the primary determinant of risk asset prices is “how much money can I get ahold of, and how much will it cost me to borrow it” - true for houses, stocks, bonds, everything - then in fact the Fed is as close a thing as you will find to a single point of control in the equities market.

Stocks promptly sold off by a tiny fraction of the amount they have run up in the last few weeks; futures are in the green at the time of writing; probably Mr. Powell’s comments won’t trigger the next bear.

Know what will trigger the next bear? That there are no more buyers. When will that happen? When all the money that is thinking about buying gives up and says, whatever, in for a penny in for a pound, and YOLOs their way into short dated call options on this week’s zero-revenue hot stock. And then when the selling starts, late-levered-longs will panic and sell hard and tell themselves they’ll never dabble with stocks again. Which they won’t. Until the next frothy market.

I don’t think we’re at the top yet, but there are signs, as I mentioned yesterday re. the circular flow of cash between Nvidia, OpenAI, Oracle, Microsoft and others. I would suggest you also read our earnings note on Micron published yesterday, here.

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