The equity rally off the “Liberation Day” panic lows sure is exhibiting a lot of staying power for an “unsustainable” phenomenon.

That’s a straw man. I don’t know who said it was unsustainable. Not me. I spent the better part of my summer carrying on ceaselessly about systematic re-leveraging into stocks against a backdrop of receding realized volatility. So much so that by September I’d run out of ways to paraphrase myself.

It wasn’t just systematics buying. Retail rode the wave, at least according to some flow metrics, even as sentiment wasn’t always especially rosy. (Watch what they do, not what they say. Same with the American consumer.) And although some pros (or “asset allocators,” or “discretionary investors,” if you’re not into the whole brevity thing) were reluctant to jump aboard given persistent trade frictions and generalized geopolitical angst, they came around eventually, if not wholeheartedly.

And, so, here we are coming up on the one-year anniversary of Donald Trump’s second presidential election victory with the world’s risk asset benchmark par excellence having notched — checks notes — 31 new records in four months.

The “pullback” catalyzed by Trump’s October 10 China tirade lasted all of 11 sessions and was all of 125 SPX points (not even that) deep on October 16 during the one-day regional bank “mini-crisis.”

There’s virtually no concern among investors about what now seems destined to become the longest US government shutdown on record, nor about the general state of things in the western hemisphere. I both sympathize with that nonchalance and don’t.

On one hand — and I remind readers of this at regular intervals — if there’s not an identifiable, “straight-line” connection to corporate profits, there’s no reason for stocks to trade down on otherwise upsetting headlines. It’d be better, all else equal, if the US had a functioning government, but at least in the very near-term it’s more or less irrelevant for blue-chip corporate bottom lines, absurd as that most assuredly sounds.

On the other hand, the headlines are more than just upsetting at this point. Mike Johnson appears to be in the process of actively undermining the very chamber he chairs. Specifically, the Speaker of the House seems ready and willing not only to close down one chamber of America’s bicameral legislature, but to leave it closed in perpetuity such that the executive branch can claim even more in the way of emergency powers and pursue its agenda unbothered by the famously messy business of democracy.

At the same time, news out of the US Justice Department and Pentagon gets more foreboding by the day, and on some days by the hour. On Friday for example, we learned that the DoJ intends to monitor polling sites in California and New Jersey, and Trump’s “War Department” is dispatching an aircraft carrier to the Caribbean.

It’s not unusual, strictly speaking, for the DoJ to monitor elections, and merely positioning a carrier strike group next to Venezuela doesn’t mean regime change is coming to Caracas but… well, it’s just one thing after another after another, and when taken together, the totality of those things augurs ominous. Or at least on some vectors and interpretations.

But, again, absent a reason to expect a hit to corporate bottom lines, melodrama’s just that for markets: Melodrama. An irrelevant side show that doesn’t matter until it does. And for now, it doesn’t.

Earnings season in the US is going well. It’ll probably keep going well, and thanks to a benign read on September inflation (likely the last official inflation release for months), the Fed’s now virtually certain to cut rates again in December after next week’s guaranteed cut. That, with US financial conditions already as loose as they’ve ever been on some widely-followed indexes.

The figure on the left, above, is pretty remarkable. It shows the rolling sum of global rate cuts delivered over the preceding 24 months. We’ve basically tied the mark set in August of 2010, when the lookback starts to pick up the collapse of Lehman, AIG and all the rest.

“In the 24 months after Lehman’s bankruptcy [there were] 313 global central bank rate cuts as US nominal GDP fell 2.5% peak-to-trough,” BofA’s Michael Hartnett wrote, in his latest. “In the past 24 months [there have been] 312 global rate cuts at the same time as US nominal GDP rose 11%,” he went on. “Little wonder the world’s positioned for booms, bubbles and debasement.”

Yes, “little wonder.” And as the chart on the right shows, BofA’s expecting another six-dozen global cuts in 2026, which either counts as the fewest in three years or the third-most since the pandemic, depending on how you want to look at it.

Forgive me for being cold-hearted vis-à-vis the degradation of American democracy, but record profits, record rate cuts and the dawn of a new tech epoch don’t exactly shout “Sell!”

If that assessment turns out to be wrong, you can thank me for ringing a bell at the top.