6 ms·

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty

• kindeyoowee 2y ago
  [dead]
• timewizard 2y ago
  > There are no major economic indicators flashing red. High levels of corporate monopolization, high levels of stock buybacks, and low to no wage growth. They've been flashing for so long people don't even recognize them anymore.
  • ninetyninenine 2y ago
    These aren’t red flags for stock market crashes just red flags for humanity. The status quo can have all these flags raised and still have rising stock prices rise.
    • timewizard 2y ago
      Oh. The stock market and humanity are entirely separate? Cool. Let's end the stock market then. Humanity clearly doesn't need it, and it operates in conflict with it.
      • ninetyninenine 2y ago
        When did I say they are separate? I think you’re confused.
  • TulliusCicero 2y ago
    Wage growth for lower income percentiles has actually been quite good in recent years IIRC.
    • DonnyV 2y ago
      But they haven't kept up with inflation.
      • antisthenes 2y ago
        Not sure why you're being downvoted. None of the wage growth has kept up with inflation, for any quartile of workers. Wages are still down 0.5 to 1.5 % from pre-Covid times adjusted for inflation.
        • ac29 2y ago
          Median real wages are higher than pre-covid: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q Do you have a source for your claim that they aren't?
          • TulliusCicero 2y ago
            Is that huge spike the stimulus money?
      • echelon 2y ago
        Inflation was totally self-inflicted. Both the Trump 2020 and Biden admins went crazy over stimulus when the worst of Covid had already been behind us. Pumping that much free energy into the economy cannot be undone with the simple wave of the austerity wand.
        • TulliusCicero 2y ago
          Some of it was stimulus, but some of it was logistical interruptions caused by covid. You can't just wave away how hard China shut down. Automakers struggling to source chips was not caused by too much stimulus.
  • simonsarris 2y ago
    > and low to no wage growth Huh? There was "low to no wage growth" in the 80's and 90's. We do have wage growth now. https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q Wage growth for over 25 no-college earners has been even better. > high levels of stock buybacks There's nothing economically dire, or even weird, about choosing buybacks over dividends in returning profits to shareholders. It just lets shareholders choose when to sell instead of doing it for them.
    • deleted 2y ago
      [deleted]
    • aetherson 2y ago
      We've propagandized a generation of people into believing that there has been no wage growth for 40 years when the deal was actually that there were falling wages in the 80s, stagnant wages in the 90s, and growth since then (with a recession after 2008 that has been fully caught back up to since).
      • danaris 2y ago
        And is that wage growth consistent across all quintiles of earners? Or is it primarily concentrated in the upper quintiles? (I actually genuinely do not know the answer to this offhand.)
        • aetherson 2y ago
          It's varied a lot in that time period. When people claim that "wages have been stagnant," they're usually referencing this dataset: https://www.ibtimes.com/infographic-real-wages-production-nonsupervisory-employees-us-2784828 https://www.ibtimes.com/infographic-real-wages-production-no... Which is "real average hourly earnings for production and nonsupervisory employees," and is the source of the graph that purports to show stagnation between 1973 and 2017 (it has in fact grown higher than 1973 since then). Why that particular graph? Well, it excludes wages for "the bosses" and such, so perhaps it shows something more like the average person's experience. But also, I think it's cherry-picked because it shows a particularly grim view. For example, here's the real median household income chart instead: https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N And you see that it's by no means stagnant. If you want, you can find income by quintiles. In like the 90's and 2000's, the rise of inequality, top quintile earnings growth was much higher than bottom four. But that largely stopped in the 2010's and has actually reversed in the 2020's, with bottom quintile growth now the strongest. Long story short: income is complicated, there are a lot of ways to dice everything. But if you look into the claim that "wages have stagnated," you will overwhelmingly see the "real average hourly earnings for production and nonsupervisory employees" data line. And regardless of how good or bad that particular choice of data is, it doesn't actually show stagnation -- it shows a big drop in the 70s and 80s, largely stagnant 90s, and then growth since then.
  • worik 2y ago
    > High levels of corporate monopolization, high levels of stock buybacks, and low to no wage growth. Yes But the Elephant on the sofa is a deranged President threatening important trade partners Duh!
• lazide 2y ago
  Hah, do you think Trump can admit he messed up and change course?
  • voidfunc 2y ago
    Sort of, but it won't be framed that way. It will just be "we achieved our objectives and we're moving on"
    • criddell 2y ago
      It will be filed away next to the built a wall that Mexico paid for victory.
  • psygn89 2y ago
    Yes after he and his friends sell their positions. Edit: I think I meant secure..
    • catlover76 2y ago
      [dead]
  • snailmailstare 2y ago
    How did he mess up? His goal is to screw up the real economy and sell $Melania coins.
  • tombert 2y ago
    He actually sort of has? In a way. When he failed to "repeal and replace" the Affordable Care Act on "day 1", he goes on the stage a month later and says "Nobody knew that healthcare could be so complicated" [1]. I found this immensely funny, because pretty much every human other than Donald Trump knew that healthcare policy was really complicated, and many people tried telling him this. I'm hoping he goes on stage soon enough and says "no one knew how volatile tariffs could make the economy" or something. Though "volatile" might be too big of a word for him. [1] https://thehill.com/policy/healthcare/321318-trump-nobody-knew-that-healthcare-could-be-so-complicated/ https://thehill.com/policy/healthcare/321318-trump-nobody-kn...
• bdcravens 2y ago
  It's potentially worse, as it points to a distrust of the system, not individual companies or industries. Presumably we'll bottom out, but unless there's a dramatic change in those policies, prices will reflect the "new normal", not the previous status quo.
  • calvinmorrison 2y ago
    so stocks are less related to individual company performance than they should be?
    • klipt 2y ago
      More that, almost all companies are expected to perform worse when you elect an economically incompetent government.
      • stvltvs 2y ago
        What's the opposite of "a rising tide floats all boats"?
        • deleted 2y ago
          [deleted]
        • Yoric 2y ago
          A rising flood drowns all swimmers?
        • YZF 2y ago
          "when the tide goes out, you see who's been swimming naked" - Supposedly Warren Buffet
    • don_neufeld 2y ago
      There is no “should” A big factor of stock performance is the r market’s assessment of risk and its risk tolerance. Both of those can change, and have nothing to do with company performance.
• ren_engineer 2y ago
  just cutting government spending would automatically put the US into recession, deficit spending is the only thing that has kept things going. Huge amount of job growth is either direct government hiring or indirect through businesses hiring off revenue from government contracts
  • cbeach 2y ago
    Migrating employees out of the state (which leeches economic output from the private sector) will have positive long-term economic outcomes.
    • FredPret 2y ago
      Moving some employees from government (which has some economic value and some non-economic value) to the much higher economic productivity private sector will be brilliant for the economy long term. But that doesn't mean the most chaotic approach is the best one. Bill Clinton shrunk the federal workforce by 400k without crashing the economy. I'm a huge free market fan but I note that there's a lot of nice things that come from government jobs, for example clean and safe streets, or well-planned highways, and many others.
      • cbeach 2y ago
        Are you implying that shrinking the federal workforce is responsible for the current stock market correction? Do you have evidence Musk and Trump are firing the people that keep streets clean and safe, and plan highways?
  • darth_avocado 2y ago
    Historic job growth means nothing if everyone needs 3 jobs to earn median household income.
    • ben_w 2y ago
      Tautologically, everyone taking three jobs is what causes median hosehold income to be at that level.
• uoaei 2y ago
  The stock market is, put crudely, a 'vibe check' on investor sentiments more than it is any indication of economic trouble per se, so your take is more reasonable than you let on.
• noleary 2y ago
  I am not sure I agree that we lack major economic indicators flashing red. For instance, GDPNow from the Atlanta Fed looks quite bad at the moment: https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow I also have been looking at deliquency rates on industrial equipment leases lately, and they seem to be trending sharply upward: https://www.fitchratings.com/structured-finance/abs/equipment-indices#abs-equipment-indices https://www.fitchratings.com/structured-finance/abs/equipmen... Major retailers are also managing expectations for the next quarters. It seems like they're bracing for soft aggregate demand.
  • _DeadFred_ 2y ago
    Walmart raising alarms as well: https://www.thestreet.com/retail/walmart-ceo-sounds-alarm-on-a-big-problem-for-customers https://www.thestreet.com/retail/walmart-ceo-sounds-alarm-on... Car loan delinquencies at record level: https://www.axios.com/2025/03/07/car-loan-payment-delinquencies-record-high https://www.axios.com/2025/03/07/car-loan-payment-delinquenc...
  • bjtitus 2y ago
    I keep seeing people post the Atlanta GDP forecast without context around the short term import imbalance. "the January surge in imports - especially for gold - caused the model to move negative. As the Atlanta Fed noted: "the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points". Usually there would be an offsetting increase in inventories, but that is a lagging indicator. This is a short-term distortion and will balance out over the next month or so. I don't expect negative GDP in Q1." [1] 1: https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...
    • noleary 2y ago
      They have published 'gold-adjusted' figures which are still qualitatively quite bad. https://x.com/AtlantaFed/status/1898126061184971150 https://x.com/AtlantaFed/status/1898126061184971150
  • 2y ago
• throwaway5752 2y ago
  The US is losing innovation talent, guest laborers, export markets, and allies. The federal workforce contributes to the economy, and many federal programs have strongly net positive economic impact. We have threatened to militarily invade 3-4 countries in the last month and publicly betrayed Ukraine. We have instigated trade wars with 3, including our contiguous neighbors who have been remarkably stable friendly for a century. No country will depend on our technology if it can be removed on the whim of a single person who has demonstrated a willingness to abuse this power. Same for our defense industry. Same for military and economic alliances. Countries won't want to import our goods if the regulatory framework ensuring their quality and safety is dismantled. I agree with you that today is more a move based on perception than a change in current fundamentals, but I also believe this the beginning of a re-rating of the US as a superpower and it has a very, very long way to run, edit: I'm not going to vouch for the dead reply. But they jokingly say "if you need an f 35 you'll buy it" as though they missed the news this weekend https://eutoday.net/germany-concerned-over-f-35-kill-switch/ https://eutoday.net/germany-concerned-over-f-35-kill-switch/. The economic impact of that program is projected to be close to $100B per year on its own beyond the value of airspace superiority. There are already signs of purchasers reconsidering.
  • kindeyoowee 2y ago
    [dead]
• panarky 2y ago
  It's surreal watching all the analysts stumble around trying to explain market behavior with half-baked explanations. One says it's tariffs, another says it's "uncertainty", a third worries about "recession", others say "inflation" or "stagflation". But none of them show logically or quantitatively how tariffs or "uncertainty" or vague, unsubstantiated worries about recession reduce the present value of future cash flows. Meanwhile, the new regime's playbook is clear for all to see: Deep cuts of 50% of more to government employment, selective default on government obligations, convert formerly independent institutions to ideological organs, devaluation of the dollar, and picking winners and losers based on ideology and diktat instead of merit and market forces. If this is the playbook, who would want to own a broad basket of US equities instead of the politically favored names? Why can't analysts connect the dots?
  • Swizec 2y ago
    > reduce the present value of future cash flows > Deep cuts of 50% of more to government employment, selective default on government obligations, convert formerly independent institutions to ideological organs, devaluation of the dollar, and picking winners and losers based on ideology and diktat All of these reduce the present value of future cash flows by reducing said future cash flows. Like a sibling poster said: If the government stops spending, the US economy is screwed. The US is a lot less "free market" than most realize. Much of the economy is propped up by various subsidies at the raw inputs level. Also when you choose winners and losers by diktat, this inadvertendly reduces the present value of future cashflows for any company that doesn't get picked.
  • WorkerBee28474 2y ago
    > none of them show [how uncertainty etc.] reduce the present value of future cash flows. They don't reduce the value of future cash flows, but they reduce the certainly of future cash flows that are discounted to present value. Additionally it's widely demonstrated that people will accept lower returns for lower risk/volatility. That's why T-bill have the lowest return, then bonds, then equities.
  • abirch 2y ago
    The present value of future cashflows is vague at best. The market was overpriced and is correcting now. Look at the Shiller PE.
• ozim 2y ago
  Have you seen what was going on when Trump win was confirmed? Stocks that day shot up. Now it is correction time both on going back to indicators instead of hype and correction based on newly elected administration actions instead of people hopes.
  • burkaman 2y ago
    I noticed this with Tesla, at a glance it looks like it is in freefall, but it's actually just returned to the relatively stable level it was at before the election. It seems like investors were hoping Elon would be able to leverage his position for some kind of large-scale corruption in Tesla's favor, and are now deciding that isn't going to happen.
    • svara 2y ago
      Your whole thesis rests on assuming that the price will stay where it just so happened to be at stock market closing yesterday. It's a bit early to say that, don't you think?
  • immibis 2y ago
    My impression, as someone who bought USA index funds after the Trump election, and then sold them (at a loss) a few days ago, was that the Trump administration would do everything it can to funnel money from average people to investors. My impression now is that the Trump regime is too incompetent to achieve that, and might even just throw away the USA's exorbitant privilege of being the global reserve currency. Note that being the global reserve currency is the same thing as having a colossal trade deficit, and that a colossal trade deficit is the same thing as a colossal surplus of goods and services. I wonder if Trump thinks it's bad just because of the word "deficit". [e^iπ]: https://en.wikipedia.org/wiki/Exorbitant_privilege https://en.wikipedia.org/wiki/Exorbitant_privilege
• scarface_74 2y ago
  This is the only administration that will be able to get away with being this incompetent hopefully. Even if the stock market does go in a free fall this administration, in four years, it should start recovering. Looking at the rest of the leading Republicans, most of them are spineless. But don’t have the same belief system as Trump. You didn’t see any of them parroting Trump’s economic policies during the primaries. As long as you have at least a ten year time horizon - and you should if you are investing in the broad stock market - you should be fine. From a completely selfish standpoint, the stock market being down is great - it’s time to buy. I do feel sorry (not really) for anyone who invested in Tesla. Its brand value is shit globally and the fundamentals aren’t good.
• rat87 2y ago
  > especially if the catalyst was some poorly timed or thought out US policy decisions. Is there any indication this will change or that worse decisions won't come out next week?
• Yoric 2y ago
  Well, the fact that Trump is breaking all the treaties one after the other are certainly not encouraging for markets, but there are also many signs that suggest that: 1. Trump is planning to deflate the dollar (not the least of which being that this his Secretary of Treasury wrote a plan to do this); 2. Trump might be planning to re-negotiate the US debt, for what I believe is the first time in history. Neither is the kind of thing that the markets enjoy seeing. After all, if the dollar is deflated by 50% (I'm inventing that number), all the money invested in Wall Street suddenly loses 50% of its value. Also, I've read a few economists, and they seem to agree that the prosperity of the US is largely a bubble based on the (artificially) strong dollar, but that the same strong dollar is killing US exports. By these accounts, Trump's maneuvers are an attempt to pop that bubble, which might be good, but will destroy the prosperity bubble, which nobody really wants. Whether it's true or not, that hypothesis is a good reason to not invest in US economy. And none of these three points can be fixed easily.
  • rat87 2y ago
    > Also, I've read a few economists, and they seem to agree that the prosperity of the US is largely a bubble based on the (artificially) strong dollar, but that the same strong dollar is killing US exports. By these accounts, Trump's maneuvers are an attempt to pop that bubble, which might be good, but will destroy the prosperity bubble, which nobody really wants. Whether it's true or not, that hypothesis is a good reason to not invest in US economy. Not a bubble, can argue what artificially means but crashing the economy to get slightly more manufacturing is obviously bad short and long term
• koonsolo 2y ago
  Belgian here: I'm moving away from US products and services, wherever possible. My close contacts are doing the same. And have you seen the Canadians? They are at another level! Also, buying US military equipment will definitely need to be reconsidered, if you look at how fast your position can switch. Tesla and Starlink, good luck getting any new orders outside of US. This is not some temporary one off, this is party moving away from US products (good luck getting us back once we found a good replacement), and party the idea that US can turn on you with a single stupid election. This damage will take a long time to recover from. We really consider this a friends betrayal.
  • chneu 2y ago
    I don't think a lot of Americans realize that this might be the real end of the post WW economic/military dominance for the US. The world has never been less confident in the US. Much of our world dominance was based on protection and inclusion in our economic dominance.
• xnx 2y ago
  > If stocks can drop that fast in a couple weeks, they can also (hopefully) rise just as fast, “Trust takes years to build, seconds to break, and forever to repair”
  • ac29 2y ago
    The average bear market lasts less than a year and we aren't even in a correction.
• oliwarner 2y ago
  > they can .. rise just as fast That's not how confidence scares work though. A panicked flee from the market doesn't end with somebody going "oh it'll be okay", it's a very different buyer trying to buy the dip. My point is this will be different people, different money, and likely not as fast to return as it leadenly dropped out.
• ethan_smith 2y ago
  This isn't just about policy uncertainty. Looking at the hard data (Atlanta Fed GDP forecasts, rising delinquency rates on industrial equipment leases, and major retailers' warnings), there are actual economic indicators flashing red. While sentiment certainly matters in markets, we're seeing legitimate signals of weakening fundamentals beyond just reaction to policy shifts. We live in a world that is way more fragmented than it was 5 years ago. The market isn't just responding emotionally - it's pricing in real economic risks.
  • jaybrendansmith 2y ago
    So everything was going great, with some of the best employment and GDP numbers we've ever had, and now suddenly every economic indicator is flashing red. But let's not ignore the elephant in the room: That the President and his administration is behaving erratically, scaring the free world, breaking with 75 years of foreign policy, threatening abusive tariffs, threatening people's livelihoods and ability to stay working in this country. And let's not ignore the fact that the most damaging 3 things you can introduce to an economy are: Political instability, a harmful Fiscal Policy, and Tariffs.