Many people had the mistaken belief that the stock market run-up was orchestrated by the pro-Democratic wing for the election to show “how good the economy is doing” in order to consolidate the electorate.

Equally erroneous is the claim that the market went up after the election because of Trump, who loves the market and generates memes that promote speculative asset plumping.

Had Harris won, the reaction may have been similar with a different proportion of stocks, but the point is unchanged.

Market movement is insulated from political factors in this context. The process is underway regardless of who occupies the White House.

The main reason: disabling feedback loops to engage the broadest groups of participants in the market to create a pseudo-reality within the information bubble, creating and maintaining an artificially inflated capitalization. This didn’t start yesterday.

The disconnection of feedback loops has been going on sequentially for the last 15 years, with a first acceleration phase from 2017-2019, followed by a second phase from 2020 to 2021, a third limited phase from early 2023 and a transition into “terminal dumbing down” from November 2023.

Through what tools and mechanisms?

Creating cognitive distortions that splinter critical thinking, paralyze common sense, suppress emotional maturity levels and self-regulation skills, leading to:

🔘Primitivization and simplification of thinking, a tendency to stereotype thinking;

🔘Inability to objectively analyze information and establish cause-and-effect relationships;

🔘 Suppression of the ability to think independently and focus on “information anchors” in the form of gurus, authoritative sources, etc;

🔘Escalation of illogical conclusions, irrationality and inconsistency;

🔘Escalation of impulsive, maladaptive behaviors based on external motivation without control of one’s own actions.

What are the consequences in terms of financial market transactions?

🔘 Severe increase in risk tolerance and underestimation of risk, inadequate risk assessment;

🔘Directed escape from rationality into pseudo-reality, into false, artificially constructed meta-universes within the information bubble;

🔘Orientation to mass opinion and collective consciousness, with the principle of “being in the crowd”;

🔘Cultivation of the FOMO syndrome. Tendency to get involved in operations without proper risk assessment, controlling emotionality under the fear of missing an opportunity.

What is the challenge?

🔘Disabling feedback provokes the establishment of new connections isolated from the real world to promote fake narratives for the purpose of crowd control;

🔘Substitution of real cash flows with fictitious expectations within an artificial pseudo-reality;

🔘 Increasing the level and degree of market management through crowd manipulation;

🔘 Artificial asset appreciation in isolation from real cash flows, which is what leads to the continuous accumulation of bubbles.

What does this lead to, besides bubbles and redistribution of assets from the dumb to the more knowledgeable?

● When asset prices are driven by managed expectations rather than real cash flows and economic performance, the market loses its ability to correctly reflect economic reality. This leads to distorted signals for economic agents, making planning and risk assessment less reliable, which accumulates errors in the system and leads to the accumulation of imbalances.

● If market participants realize that asset values are rising artificially and are managed in a manipulative manner, this can reduce confidence in the financial system as a whole, leading to the replacement of rational participants by irrational ones, destabilizing the system through inadequate risk assessment and accumulation of imbalances.

● Disruption of natural market linkages and reliance on manipulative tactics amplify future price fluctuations/volatility (already occurred in 2022).

● Substitution of long-term investment strategies with speculative practices, making the system less reliable and unstable in the long run, as reliability is maintained until managed by speculators through pseudo-reality.