The Dow dropped 180 points yesterday – or about 1%.

And another clever billionaire says he is looking elsewhere for profits. Reuters:

Activist investor Carl Icahn on Monday said there was a chance the stock market could suffer a big decline, saying valuations are rich and earnings at many companies are fueled more by low borrowing costs than management’s efforts to boost results.

“I am very cautious on equities today. This market could easily have a big drop,” Icahn said.

Yes, dear reader, the smart money is getting out of U.S. stocks. And here’s our old friend Rob Marstrand explaining why:

Right now, every measure that analyzes the S&P 500 says it’s expensive. Prices are high relative to earnings, net assets, sales, and cash flow.

What’s more, there’s plenty of evidence that the main thing propping up the stock prices is heavy buying by the companies themselves [via share repurchases].

And now, that prop is getting kicked out from under the stock market. Bloomberg:

After snapping up trillions of dollars of their own stock in a five-year shopping binge that dwarfed every other buyer, U.S. companies from Apple Inc. to IBM Corp. just put on the brakes.

Announced repurchases dropped 38% to $244 billion in the last four months, the biggest decline since 2009…

Pareto’s “Foxes”

Although the bull market in U.S. stocks is probably near its end, the bull market in the Deep State shows no sign of weakening.

Year after year, the power of the “foxes” grows.

It was the great Italian economist Vilfredo Pareto who noticed – among other things – that no matter what kind of government you think you have, there are always some crafty insiders, the “foxes,” who take control of it.

Policies are set, programs are started… decisions are made… with no consent of the people or their elected officials; the foxes work the angles.