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this post was submitted on 12 Mar 2025
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You need to extend the graph beyond January. The US has been riding an enormous localized wave that crested shortly after Trump's inauguration. American securities (particularly the MAG7) are enormously overvalued, with revenue that is dwarfed by their stock price.
This is a much-needed market correction, not a regional stock performance split from within the US.
Not even suggesting Trump isn't shit. Its very obvious that he's popped the irrational optimism bubble we've been gliding on since even before COVID hit. But we were in a bubble. DOW 43k, never even mind the absurd NASDAQ run up, is not representative of the functional economic capacity of the nation as a whole. Without unlimited free money from the Fed to keep inflating asset prices, we were going to enter a downturn sooner or later.
The real question is whether the DOGE Team will kick the knees out from under our Treasury/Fed countercyclical spending system on the way back to earth and cause us to land harder than necessary.
I doubt they'd do any fiscal spending through safety nets, since they are dismantling them; I suppose bail-outs could be on the table. I've seen some analysts/economists claim that the Trump admin wants to devalue the USD to grow the manufacturing sector, and the admin seems to be pressuring the Fed to lower interest rates. The consensus seems to be that stagflation is what's actually going to happen. I don't quite understand why the admin wants to bring back manufacturing sector, because they're typically low-wage jobs (especially if not unionized), and unemployment was pretty low. Among the billionaire class, there seems to be a concerted effort to shed decent-paying jobs, so I guess the plan is for those people to go work on assembly lines.
Absolutely wild to look at this graph and say 'welp that's the correction we've expected and needed for a long time' when it is quite clear it's a reaction to Trump's totally unnecessary trade war and the uncertainty he is (intentionally?) injecting into markets. There is no reason to expect that if there had been a different President elected, this outcome would have occurred.
The even broader point is that there are a lot of people invested (literally and emotionally) in a continuing bull run. That doesn't mean it's a good idea, but suggesting that Trump or even less likely, DOGE have some master understanding of the economy and are doing this for its long-term health is an absolute fantasy.
I am pretty sure trump warns his friends when he is about to make another irrational stupid statement- they are investing accordingly- taking advantage of an upswing and a downturn
I don't always agree with them but you make such a compelling argument...