Democrats have a message this week:
Look at the damage Trump is doing. He is killing the stock market.
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| Market Watch |
I understand why Democrats would feel hopeful and happy. Turnabout is fair play. Blaming a bad stock market on a rival president is exactly what Trump would do, and what he did do. Trump used the stock market rise in the days following his election as evidence of his popularity and success. Democrats are getting their turn to shape public opinion, using the stock market as evidence. Trump is destroying the economy because he is crazy, incompetent, pig-headed about tariffs, disruptive to our allies and trade partners, and certain to bring about either a recession or runaway inflation or both.
Donald Trump did not inherit an economy in carnage. He inherited a stock market that was hitting all-time highs. Nervous stock market observers -- there are always nervous stock market observers -- worried that the Biden stock market was too high. Company profits were unsustainably high because profit margins were unsustainably high. Eventually competition should squeeze out that excess and stock prices will fall. And investors were overly optimistic generally, having pushed P/E ratios to about 28, a level higher than at the market top in 1929 and the tech bubble top in March 2000. There is reason to think AI will be disruptive before it will be productive.
Goldman Sachs predicted a lost decade for stock market returns. When one starts from price levels this high, it may take a decade for company earnings to catch up.
Trump set himself up for a fall. Maybe it is starting now. With federal layoffs, with state grants and contracts cancelled, with universities announcing job freezes, with trading partners confused and angry, with consumers wondering about Social Security and Medicaid cuts, and with essential workers in agriculture, construction, and hospitality hearing TV ads in Spanish telling them to leave right now on their own, or get deported and forever lose their right to return to their families, there is reason to think that the economy would sputter.
I have an opinion. I thought the stock market was overpriced when Biden was president. I thought, along with Ed Easterling of Crestmont Research and with bearish John Hussman, that the stock market measured by P/E ratios and overall sentiment, was "not cheap." I didn't need to overanalyze it, but I was skeptical of the AI euphoria. I saw that rodeo back in the tech boom of the late 1990s. The market took 14 years to get even. I remember the mortgage boom and bust, when the stock market lost half its value. Some companies will never recover.
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| Citibank, my employer in 2007, lost 95% of its value. |
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7 comments:
During Trump’s first term, he lied about everything from the size of his inauguration crowd to the 2020 election results, with over 30,000 false or misleading statements in between. And, of course, he’s a convicted criminal. Why anybody would believe anything he says is a mystery, but voters ignored his rap sheet and swallowed his campaign promise: “When I win, I will immediately bring prices down, starting on Day One.”
Sorry, folks, but that was a lie too. He’s busy wreaking havoc on our economy and dismantling the government that provides you VA benefits, Social Security and Medicare, so prices are up and the stock market is down. Making America great again will have to wait for a real leader to repair the damage, but at least Trump supporters no longer need to worry about immigrants eating their cats and dogs.
Why does it always have to be about keeping score? People are hurting and will hurt more from a crash and economic stagflation. Hallelujah, more misery!
Trumps said “we are going to boom like we never had before.” Well let’s hope he is right and we don’t copy 1929’s stock market. Unpredictably is bad for the market and economy and I don’t think anyone including Trump himself can predict his actions. America is getting what it deserves.
Department of Agriculture Cancels Grant that Recognizes the Menstrual Cycles of ‘Transgender Men’
Trumps gets lucky, then the Democrats get lucky, all while Americans are suckers and losers. We focus way too much on our leaders. Where are my gas pump (and egg) stickers with Trumps saying "I did that!"? Better yet, where is John Kenneday, " Ask not what your country can do for you--ask what you (we) can do for your country?"
The above comment perpetuates an error caused by a DOGE misreading of a grant request for a study of the safety of menstrual products.
Grateful for Snopes these days https://www.snopes.com/fact-check/menstrual-cycles-in-trans-men-research/. It’s hard to fact-check every bit of nonsense being spread on social media.
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