I don’t see how an interest rate cut is going to bail us out of any of this. It will just help private equity gobble up more companies (and practices/hospitals like it’s doing in healthcare), companies finance more investment in AI technology so they can cut headcount, and a create a potential bubble in the real estate industry. It’s not going to lower the price of my groceries, goods I buy, or create a job for me. All it’s going to do it lower the amount of money the bank (or the Treasury) has to pay me on my savings and try to send me to the stock market to help me prop up Wall Street and the over inflated value of stocks. I agree that our economy is like old people in church and not only praying for the divine but trying to use old tools (rate cuts, tariffs) to manage a new world economy. We need to admit to ourselves that we are in one of those many periods in American history that our capitalistic DNA has run amok and reign it back in to allow its consumers to continue to exist.
turn the Immigration and Customs Enforcement department into an extralegal paramilitary force that raided farm workers, construction workers, and manufacturing plants
"
This isn't my preferred policy, but it's not paramilitary.
In fact, workplace raids used to be very common.
People that are here illegally should be deported
If you don't want them deported, then we should change the law
To your point about inflicting stagflation on yourself, I would add you would pass a bill that dramatically expands the debt and relies on cuts that probably won’t ever materialize. You would also threaten the central bank’s independence and browbeat it publicly to do your bidding. You would also announce suspect investigations of its members and attempt to fire them.
These wounds are self-inflicted as you say, but if Trump’s actions are any indication of the future, he won’t reverse course. He’ll shoot the messenger like he did with the BLS and continue on his path.
Derek. In your note you both mention shrinking new payrolls and a shrinking population from immigration. It’s plausible as Matt Klein just argued that this does not imply a real slowdown of jobs but rather immigration reducing how many jobs are needed for equilibrium.
Obviously this reduces the overall potential of the economy but points to slowdown rather than recession. Additionally, financial conditions are super loose and nominal wage growth is super strong in both jobs data and government withholding data.
This doesn’t necessarily point to stagflation (although that term has been used for everything) but more of an emerging market type scenario. Where due to loose economic policy we grow faster than potential and that manifests in lots of inflation and overheating.
Yep. Ignorant insecure non-serious men were elected, and now all of us will suffer the consequences. Unless you are a compromised Russian asset, you would not pursue the present international and domestic policies. Too many folks call such a belief a lefty conspiracy theory. Think about what's happening and one finds that there are few alternative reasons.
One tidbit from the jobs report that suggests a nasty drop in an upcoming report -
“Federal government employment continued to decline in August (-15,000) and is down by 97,000
since reaching a peak in January. (Employees on paid leave or receiving ongoing severance pay are
counted as employed in the establishment survey.)”
So the ~150K federal employees who took the DOGE “deferred resignation” are still being counted as employed - but will come off en masse on the October report two months from now.
It's pretty bleak. Gonna be wild when the Republicans successfully separate themselves from Trump when he's gone and the Dems still get tagged with whatever wild shit is going on at a small college deep in rural New England.
I don’t see how an interest rate cut is going to bail us out of any of this. It will just help private equity gobble up more companies (and practices/hospitals like it’s doing in healthcare), companies finance more investment in AI technology so they can cut headcount, and a create a potential bubble in the real estate industry. It’s not going to lower the price of my groceries, goods I buy, or create a job for me. All it’s going to do it lower the amount of money the bank (or the Treasury) has to pay me on my savings and try to send me to the stock market to help me prop up Wall Street and the over inflated value of stocks. I agree that our economy is like old people in church and not only praying for the divine but trying to use old tools (rate cuts, tariffs) to manage a new world economy. We need to admit to ourselves that we are in one of those many periods in American history that our capitalistic DNA has run amok and reign it back in to allow its consumers to continue to exist.
“Liked” but ugh this is terrible. Who, apart from the president and his cronies, is benefiting from/enjoying this?
I don't even think his cronies benefit from this. This is just pure stupidity.
"
turn the Immigration and Customs Enforcement department into an extralegal paramilitary force that raided farm workers, construction workers, and manufacturing plants
"
This isn't my preferred policy, but it's not paramilitary.
In fact, workplace raids used to be very common.
People that are here illegally should be deported
If you don't want them deported, then we should change the law
But we shouldn't ignore the law
To your point about inflicting stagflation on yourself, I would add you would pass a bill that dramatically expands the debt and relies on cuts that probably won’t ever materialize. You would also threaten the central bank’s independence and browbeat it publicly to do your bidding. You would also announce suspect investigations of its members and attempt to fire them.
These wounds are self-inflicted as you say, but if Trump’s actions are any indication of the future, he won’t reverse course. He’ll shoot the messenger like he did with the BLS and continue on his path.
What is the common man to do with his money in such an environment?
If we’re looking towards the ‘70s as a comparison, Gold was by far the best performing asset: https://testfol.io/?s=g3SZ6UsdH0H
Funny enough, it just reached ATH this week. I wonder what the market is trying to tell us…
I would suggest farmland and learn the ability to grow their own food.In case we hit another depression
Derek. In your note you both mention shrinking new payrolls and a shrinking population from immigration. It’s plausible as Matt Klein just argued that this does not imply a real slowdown of jobs but rather immigration reducing how many jobs are needed for equilibrium.
Obviously this reduces the overall potential of the economy but points to slowdown rather than recession. Additionally, financial conditions are super loose and nominal wage growth is super strong in both jobs data and government withholding data.
This doesn’t necessarily point to stagflation (although that term has been used for everything) but more of an emerging market type scenario. Where due to loose economic policy we grow faster than potential and that manifests in lots of inflation and overheating.
We will definitely know in the next 3-5 months.
Yep. Ignorant insecure non-serious men were elected, and now all of us will suffer the consequences. Unless you are a compromised Russian asset, you would not pursue the present international and domestic policies. Too many folks call such a belief a lefty conspiracy theory. Think about what's happening and one finds that there are few alternative reasons.
One tidbit from the jobs report that suggests a nasty drop in an upcoming report -
“Federal government employment continued to decline in August (-15,000) and is down by 97,000
since reaching a peak in January. (Employees on paid leave or receiving ongoing severance pay are
counted as employed in the establishment survey.)”
So the ~150K federal employees who took the DOGE “deferred resignation” are still being counted as employed - but will come off en masse on the October report two months from now.
It's pretty bleak. Gonna be wild when the Republicans successfully separate themselves from Trump when he's gone and the Dems still get tagged with whatever wild shit is going on at a small college deep in rural New England.