The first year of Trump's term in office he reaped the rewards of the previous administration's actions. This second year he is putting all the blame on the Federal Reserve and China for the havoc he and his minions have wrought with their moronic tariffs and tweetstorms. Things cannot improve until they are a fairly distant memory. Good luck to all of us on that.
3
If Trump's dad had not bailed him out of his failed casino by buying millions of dollars of chips, Trump maybe would of been a different man. As it is, he is always thinking he will be bailed out of his mistakes, this time by the Federal government. He's a wreckless guy, that's all he is.
3
Has it occurred to anyone that he wants to create a crisis so he can profit off it?
4
Neil:
Have you shopped for groceries or gas or autos lately? Clothes?
We have a real inflation rate on basic needs. Many people are employed now - PhDs taking desperation jobs - minimum wage jobs - a family of four still can’t reach “middle class” without holding 3 or 4 of them.
After necessities, let’s take the Toyota Rav-4. Three years ago, a stripped-down new Rav went for $20,000 the price has now doubled. I’m told that size/shape is the hottest seller across brands, which should raise competition and cut prices. It hasn’t.
Corporate and Consumer debt is at what some call all-time highs, while gasoline and home heating oil have hit $3/gal, a 75-cent increase that started in May. Supermarket prices are at all-time highs, blamed on climate change, which promise continued increases. Great Recession over, The Fed is trying to let new real income restore official interest rates.
People took Trump’s lies seriously and credit-leveraged the market to the point where a 50% drop is due in ‘18 - the trouble is we could see it this week, with End of Year portfolio shifts, and realization the President’s lost his mind, shuttling down the government over baseless fear of Latin Americans.
Now he says he signed an illegal-if-true “contract” for his Wall.
If it passes other court tests, an Environment Impact Study will block it.
He will crash the market to blame the Democrats.
He’s already blamed them for his government shutdown, though the GOP controls Congress for another week.
3
In one of your paragraphs, you write: "There are some rumblings...." and you underestimate them in your subsequent remarks that are very difficult to digest. Even some of these inadequacies are palatable to some extent - there are too much debt in the system plus $1 trln more debt is to be taken. Earning growth alone is not the panacea for all the ills...
2
Markets always crash when you deregulate the marketplace. What is wrong with government that they never learn from their mistakes. Closing down the government doesn't instil confidence in the economy. You need stable reliable government for investor confidence to grow and you need regulations in the marketplace, as boring as that sounds. There's massive debt worldwide - though our small country doesn't really get affected by USA domino crashes as our government has laws in place to stop reckless risk taking.
4
Employment may be high but wages are not for many Americans. This "strong" economy is the same one that lead to Trump, Brexit, etc. Immigration, wages, debt, healthcare, and more are all major issues, but for some reason this does not enter the"fundamentals." I respect financial planners and economists and recognize my limited knowledge on the subject, but I am often struck by the way they overlook the social and rhetorical nature of problems in favor of numbers. They are system thinkers, but humans often are not, acting in irrational, unexpected ways.
2
In a very short while the Democrats in the House will be in a position to draw back the veil of obfuscation the Republicans have hidden behind during the past two years, and longer. Drawing reasonable inferences from the unusual conduct of the senior Republican appointees in this Administration, both those remaining in office and the many who have departed, some under clouds, a further crisis of confidence in the Administration is likely to blossom as the country learns that corruption, both petty and large scale is and has been the order of the Administration's day.
1
I keep reading/hearing that unemployment is down and that the economy is strong, yet I can't find full-time employment or a paying wage that actually covers living expenses. This applies to me and almost everyone I know. I just don't understand how these statistics defy my reality.
3
Stephen Bannon and Stephen Miller. (the whisperers) you wanted to destroy the government and I give you credit, you are doing a good job
3
Our two-party system is broken as was demonstrated with clarity in the 2016 coup d'etat.
Trump is merely the face of the rotting Republican Party. What is hard to comprehend is the why the mega-donors who own the Republican Party would allow a complete moron like Trump to create the financial chaos that is directly linked to his mental instability. It is clear that the Republican Party now depends on two powerful foreigners to maintain their political power. Rupert Murdoch poisons the minds of millions with his Big Lie Fox Propaganda Machine - a bullhorn of fake news that stirs up hatred in the closed Red State Universe. Vladimir Putin gives the Republican Party huge support in the form of carefully crafted digital invasion of social media and hacking of politcal databases.
We saw a glimmer of what may help to overcome Republican corruption of the electoral process in 2018: voter turnout. We must go to the polls to vote out the Republican extremists that are destroying our nation. Trump is proof of their success to date.
7
Sorry, there was no coup d'etat in 2016, the election worked as the Founding Father's intended, with the Electoral College deciding who would be president, and that person was none other than Donald Trump, not Hillary Clinton. Thank you.
Thanks to the president's policies the economy and jobs are great.... whether liberals like it not. hohoho
1
@obummer
The obvious racists who make up a significant portion of Trump's base form major part of the rot that has spread within the Republican Party.
3
To use Trump's golf analogy in criticizing Jay Powell, Trump is a guy who can putt but can't drive the ball down the fairway. He can't see the next green so he swings hard, shanks the ball and finds himself in the rough. He is looking in the weeds for his ball, and his caddy is no help because he is a high school kid trying to make a buck at the country club. He thinks his sand wedge is a driver and is baffled that he isn't 300 yards down the middle of the fairway instead of whacking at the weeds in search of the thing that really matters to the game. His administration might be more effective if he could just keep his eye on the ball. Life is real and it has teeth. Twitter is fantasy, and his version is just more lies and fake news. Meanwhile, the grownups have already played through.
3
No matter how many times Republicans destroy the economy or triple the national debt, American voters keep returning them to power after Democrats have cleaned up the crime scene. Why is that? Is it just for sheer entertainment? Is it a national death wish? This time, Republicans have surrendered control of our country to Russia! What more do Republicans have to do to disqualify themselves from governing this nation?
7
The main reason the market is tanking is that Trump is regarded as a loose cannon.
2
Employment is strong. Economy not so strong since the Bush recession and the Obama stimulus to special groups. Trump Tax cuts letting Americans keep some of their own money was appropriate other than it was not paid for by sweeping spending cuts across all Departments. In the end we have a national debt (ND) of 22 trillion dollars most of it from the Bush Obama years regime change wars and bail outs. Trump needs to reduce ND he inherited by rethinking, restructuring and reforming govt to do just essentials.The current partial shut down could be a chance to evaluate what is superfluous and extravagant considering we have piled a sky high ND.
With regard to the stock market (SM) volatility. We should all have known the uncertainty and the risk. The professional millionaires and billionaires know how to play the SM and time their buying and selling and make a ton of money. I am worried about babtboomers like me who have have invested in the SM major portions of their paltry hard earned retirement savings and did not sufficiently diversify and secure their investment portfolio to ensure that they do not retire mainly on social security and afford medicare supplements to insure full coverage of any and all medical issues.
After the 2007/2008 SM crash hit managed retirement portfolios badly, I took control of my own and I benchmark against DOW, NASDAQ, S&P and NYSE and insulate from vagaries. This way I have no one else to blame but myself. By Spring 2019, the SM will swing up.
2
So let me get this straight. First, they loose requirements on banks' liquid reserves. Then, they call to make sure they have those reserves they are not required to have? Or to ask if they are actually complying with current laws, because there has been no oversight? Whichever way you may want to interpret Mnuchin's calls, it looks really, really bad.
3
Republicans always crash the economy, national or state. Democrats always restore prosperity.
There is no mystery here. The economic history since the 1980s paints a very clear picture. Republicans cut taxes for the rich; blow up the deficit; encourage Wall Street recklessness and fraud; and tank the economy and real estate markets. Reagan did it. Bush did it. Now Trump will do it. It's not magic. It doesn't need erratic presidential behavior. The Republican economic recipe is well known, has been consumed again and again, and always make us sick. There is no need for further analysis.
7
Neil, you know this is going to continue. Trump does not care about the country, just himself. He has no reluctance to bringing hardship to people and placing the blame on others.
What an education he got at Wharton!
2
It is an economic axiom and a no brainer that any big organization and especially the US government needs a strong, experienced and steady hand at the helm. Trump supporters had the crazy idea that as a business man their hero would give them that, but they seemed to overlook the fact that Trump's only business experience was with bankruptcies, stiffing people to whom he owed money , scams and court litigations that attempted to blunt his abject failures. Is it any failure that as our corporate
wise men slowly realize their mistake that they would retreat in terror?
3
The economy has been slowing, with some sectors turning down. Auto sales peaked 2 years ago. Housing was slowing down before interest rates were increased. Interest on the rapidly growing government debt issues = bomb waiting to go off. 6 and 7 year long car loans ??
Any tailwinds to our economy Trump inherited from Obama are slowly turning into tornado force headwinds to our economy!!
1
Even with strong economic fundamentals, the basic fact is that we are a global economy and global trade is embedded in almost all major supply chains. A trade war and an attempt to manipulate the Fed is the opposite of what is needed. What Trump wants to do is just as bad as China manipulating it's currency. The tax cuts, a ballooning deficit, and trade wars (which free trade agreements held in check) will eventually bring us down, maybe not today, but it is certain that without competent leadership, very soon.
8
The economy is not strong; it has been revved up by unsustainable fiscal boost. Fed is raising rates to tame expansion, but with global economy slowing and trade war, a downturn is quite likely and could come in time to ruin Trump's re-election which he richly deserves to see happen.
9
An economic slowdown can be counteracted by changes in fiscal and monetary policy. The problem is that taxes have already been lowered, contributing to a ballooned deficit, and interest rates, while having risen, are still not very high. So if the economy gets in a jam, there is little room to maneuver.
10
"strong" really - barely more than 2% GDP growth is just OK - a very subjective description and WRONG.
6
Why do you keep spreading this nonsense about a healthy economy? Wages have been flat for over a decade. New jobs are garbage that do not pay a living wage. People die on a daily basis from lack of adequate health care. The environment is poisoned, a maniac is at the helm, the stock market is falling like a stone, opiate abuse and suicide are at record highs as people recognize there is no future.
18
For the first time in a century, average life expectancy in the US is falling. Despite all the issues around the Trump administration, Trump remains fixated on getting his previously Mexican financed wall, paid for by US taxpayers.
Trump has yet to produce a cost benefit analysis for his wall let alone final costings and funding.
Surely someone in his administration could make up a fake video showing Trump's wall being built to satisfy his wants. It would be a great demonstration of a government that stands for nothing but the further enrichment of the 0.1%.
2
Though leadership is horrendous, of course, there are probably undercurrents that are not yet visible to most of us, as was the case in 2008. Some technicians are forecasting a "bloodbath" in January. There's reason "cash is king" at the moment, but I can't pretend to know what it is.
8
When the Democrats were in power and the ACA was enacted, I was able to obtain individual medical insurance for around $350/month. Since the GOP has taken control over both Congress and the Executive branches, my monthly insurance costs have doubled to $700/month with a high-deductible plan. Meanwhile, my IRA is taking hits due to the tariffs, the rejection of multi-lateral trade agreements and the tax cuts for corporations and the wealthy. This is the "winning" economy the GOP controlled government has provided me which benefits only corporations and the wealthy. Reagan, G.H.W.Bush, G.W. Bush and now Individual-1. Each and every one of them has caused nothing but economic disfunction during their presidency.
147
@June So your IRA did not go up a lot before this adjustment? And blame Obama and the dems for eventually insurance actually costing what it should. I wonder what subsidy on the ACA you get? Obama wasted so much money helping his friends and doing foolish things.
1
Socialism for the wealthy. Capitalism for the rest of you.
27
if you are only paying $350 a month for your health insurance, then you weren't paying for it. You were only paying for part of it, and most of it was subsidized by taxpayers. Now, the subsidies are reduced, and you have to pay more, but still not all, of what your healthcare actually costs. Cry me a river
At the beginning of every economic collapse, there are always authorities and pundits reassuring us that "the fundamentals of the economy are sound.' EVERY time! And it's the only way to tell for sure that the economy is collapsing. Someone is experiencing a margin call. Someone can't pay his or her mortgage or car loan. Someone's fraudulent scheme is no longer working. Someone can no longer qualify for a loan. Someone's house has been on the market too long. The stock market is falling because too many people are selling and not enough people are buying. Why is that? I don't believe it's just some quirk of investor psychology. Someone sees what's coming, and the rest of us will see it when it's too late.
8
Trump has proven that he kills everything he touches. Of course, the Trump Administration will kill the economy. Remember, this is the man who couldn't run a casino profitably.
14
@Lona He didn't have to run anything his entire life since his Dad came behind him and bailed him out. He gave Trump 143Milion over the years. Hardly a successful businessman, more of a son from a criminal enterprise since the Trump family has for years hidden money in shell companies and not paid their taxes. He is a con like his father before him.
2
The stock market is going to crash over the next few months. Just the way it did in 2000 following the dot com bubble and 2008 following the credit bubble (sub prime mortgage fiasco).
The irrational exuberance that had led to the current stock market bubble, due to quantitative easing, has been unsustainable for some time. The recent (CAPE) valuations have exceeded the valuations that preceded the 1929 crash.
Why are people so gullible, don't they ever learn from previous mistakes. You can't have a steep 9 year bull market without having a nasty bear market, regardless the performance of the economy.
The eye watering debt that the US is in is going to make this crash severe. It has been perpetuated by Republicans who have bribed the US with tax cuts when they should have been dealing with the debt.
This debt eventually has to be paid back - who is going to pay it, you or your children and grandchildren.
Why has the NYT failed to identify these problems and instead imply that the stock market is at an appropriate level. Stop living in a fantasy and wake up (like everybody had to in 2000 and 2008)
10
The MSM faithfully parrots the lie that the economy is strong.
Nothing could be further from the truth.
In a strong economy people don't need to take two jobs in order to survive.
Nor are so many restricted to part-time work with no benefits.
Nor are their real wages no better than they were thirty or more years ago.
Nor are they one paycheck away from poverty.
Nor does only a tiny fraction of the workforce have union bargaining power.
Nor do the rich own more than half the country's assets.
Nor does a populist demagogue like Donald Trump sway millions of deluded followers who are dissatisfied with the economy and ready to embrace fascism.
10
The republicans will crash the economy just like Bush did...and trump is even worse...Their policies are old and tired and do not work. Billions now to farmers in bailouts because of trumps insane tariffs....The Stock Market went up every month of Obama's Presidency.....We are just about at the level where it was when he left the White House. Nothing good can come of an administration that tells constant lies about everything....
9
By “highly experienced economic policy makers” do you mean people like Henry Summers and Paul Krugman? They’re the ones whose failed policies kept the recession going for almost ten years. It wasn’t until Trump became President that the economy began to turn around, and then it happened almost immediately. When an idea or policy doesn’t work you get rid of it and the people who proposed it and administered it, which is why the two above mentioned economic thinkers are yesterdays news. Trump owns this current successful economy, Obama owns the stagnant, economic failures of the eight years before Trump. You don’t want to write about that because it would expose the economic shortsightedness of the left.
Interesting how the writers at the NYT will imagine doomsday scenarios then comment on how it’s possible, even likely, that it will happen. When you refuse to report on what’s really happening because it doesn’t fit you political agenda, you bring out your imagined/hoped for wishes. Thinkers don’t believe you anymore Mr Irwin.
2
Put Leeze. The con-artists were rewarded handsomely for committing the crimes that caused (inevitably) the Crash of ‘08. So they went right back to work creating even bigger scams. The entire ‘recovery’ has just been papering over reality. The shoveling of 80% of American‘s wealth into the pockets of the 1% continues.
Tomorrow? Next week? Ten years from now? Who knows. But when you spend decades propping up the economy by effectively putting trillions on... our children‘s and grandchildren‘s credit card...
Get ready for the next “we‘ve all got to tighten our belts”...
8
I'm astounded the Times keeps misunderstanding Brexit! Brexit is nothing; it has always been nothing. When the European Economic Community was founded in 1957, the UK wanted nothing to do with it, and it eventually only joined in 1973, nearly 20 years later! From the perspective of the forerunner, European Coal and Steel Community (1951), more than 20 years later. So the UK's heart was never in this, which is why they ran it down all these years, and their membership matters not at all either way. They'll sort out their mistake in time, which no one here on the Continent cares one whit about. Trump on the other hand is something else altogether. American fascism is very real indeed, and the Times would do better not to conflate the two issues.
3
Ah! The Invisible Hand... When the Market goes down, not, it doesn't represent The Economy. When the Market goes up, Trump and all the 'lucid critics' would claim the The Economy is doing good. In the mean time the 1% doesn't care, the middle class gets dangerously indebted. And the working class? Just surviving... Business as usual.
3
The economy and the 99% have always suffered under republican control while the 1% prosper. Reagan and his “trickle up economics” the 2008 crash thanks to W. This will be no exception.
10
Not to worry . We have the B team in place . Sleep tight y’all.
2
Trump is working hard to destroy American economy. He failed at everything else; this he might succeed at. Ray Sipe
6
When will the NYT write about economic measures in terms of what's happening to 99% of us?
Why do economists insist on conflating the stock markets with the state of our economy? Why do they insist on representing the unemployment rate based on meaningless data? Why do they continue to try to pass off the arcane nonsense of conservative ideology as reality? Apples to oranges.
People aren't buying it anymore because the rest of us who are not in the 1% are living in the malignant reality caused by the GOP, their corporate handlers and the unstable sociopath in the White House, where our nation's flag now flies under a sickle and hammer and dollar signs.
8
Washington?
No
trump and his sycophantic right wing members of Congress?
YES
3
If Trump is able to fire the Fed chief or Mueller, he will not only be impeached, he well may well be indicted and lose his money, all he cares about. The American people really need to see Trump's tax returns and hear Mueller's report. Is he "Treason Trump", or plain old reactive incompetent Trump? What a waste of our tax dollars, not to mention the further erosion of the environment. What American life is being left to our children?
3
Bizzillion microtrades via algo driven bots control this market, invented by astrophysics majors and based on gizmo heads who are too young to remember 2008 much less 1929. They can't find dark energy, but they own your pension.
3
This is what happens when you elect a man who couldn't make money running a casino.
9
When you're having a medical crisis ... or a financial one ... you don't call 911 for a pitch man to regale you with blame deflection and "alternative facts".
3
Perhaps Mnuchin should call in for supporter from his horribly insensitive wife! Surely her flaunting excessive consumption of overpriced consumer goods will restore faith in the economy.
1
Both parties share the blame. Trump shuts down the govt to get his wall. Schumer and the democrats say no wall, but “we’ll pay for a border fence.”
These people are all ridiculous.
1
It seems to me that what had occurred: — the impending withdrawal from Syria and soon Afghanistan ...heralding America in retreat... ; the resignation of Mattis ...and soon Kelly ... heralding a vacation of proper Govt. management and oversight ; the action and threat against the Fed ; the meltdown of the Markets ; an erratic, unpredictable and incompetent President - whose policies are so self centered - without regard for the common good —- has suddenly opened the floodgates for the “perfect storm” ... ... stay tuned for further developments ..
2
Nobody knows why lemmings jump off cliffs either. I suspect self loathing. Exactly the type of thing I want to entrust my money with.
1
This is just unbelievable as many have stated.
Sooooo capitalistic. What all the pure capitalists want us to believe.
You start talking about "the real risk."
The real risk is that any real expert who has studied economics and history and has a fistfull of diplomas, like Richard Wolff, will tell you that for the 300 years or so that capitalism has been in place that there are regular crashes and pain and suffering for the average person. Every 4 to 7 years is the number; a crash, or recession or a "business cycle" (the latter is the word the capitalists use. They are an innate part of this horrid thing we call capitalism and the the thing in something you and the NYTimes must support or you can' survive. In fact you need to promote this horrid system and "manufacture consent" for it among the people with your propaganda, this article being part of it.
So every 4-7 years (we are overdue but I guess its coming next month -- that is in 6 days) things fall-apart and it hurts millions severely. Jobs lost, pay check to pay check becomes instant crisis. Not enough money to buy food for the kids or pay the electric bill; the need arises to charge it, or borrow or beg.
Extremely little rise in wages for decades. Millions living paycheck to paycheck; horrid expenses for health care if you are lucky to even have it. Children without proper dental health. Great anxiety about how to pay the bills next month and highly, highly unlikely that you can afford any emergencies. on and on.
4
These article by Times writers who seem to really know very little about economics go on with, on one hand there is this on the other hand there is that, but one one hand there is this but on the other hand there is that --- and on and on.
2
What planet is the NY Times published on and which one does Neil Irwin live on? To write an article today about the economy, CEO's becoming spooked, and financial crisis without mentioning the FED raising interest rates into an obvious global slowdown is not only reckless but irresponsible. The MSM may wish to make the president responsible for every negative that arises while ignoring his (very rare) positive choices, but the data and evidence show that the recent market meltdown and cascading fears are directly correlated to Powell's obtuse and tone deaf comments beginning on Oct 2 when he stated "we are far from neutral" on the interest rate modifications. And last week when he stated that "QT (quantitative tightening) is on automatic pilot, that created another cascading falling market that has continued to pick up steam. Many presidents throughout history have criticized the fed- Reagan, first Bush, Carter, Wilson- to name a few and it would behoove the readers and the columnists to know a bit more about actual history, rather than simply acting as if the president now is somehow different than the others. He isn't, and nor will the next one. The FED chief may in fact be the most important person in the world (I state that emphatically) and to assume he should be left alone to engage in what may preserve or possibly destroy the finances of the entire planet, is beyond credible. He/she needs to be questioned, evaluated, whenever possible.
Donald Trump's significant behavioral problems began in his childhood, leading to his parents sending him to a military school for correction, then giving him exorbitant amounts of money, the following diagnosis likely indicates his behavioral problems. Oppositional Defiant Disorder; Source- Mayo Clinic: The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, lists criteria for diagnosing ODD. [This is a disorder begins in childhood, and in some adults continues in adulthood]. Angry and irritable mood: • Often and easily loses temper • Is frequently touchy and easily annoyed by others • Is often angry and resentful Argumentative and defiant behavior: • Often argues with adults or people in authority • Often actively defies or refuses to comply with adults' requests or rules • Often deliberately annoys or upsets people • Often blames others for his or her mistakes or misbehavior Vindictiveness: • Is often spiteful or vindictive • Has shown spiteful or vindictive behavior at least twice in the past six months ODD can vary in severity: • Mild. Symptoms occur only in one setting, such as only at home, school, work or with peers. • Moderate. Some symptoms occur in at least two settings. • Severe. Some symptoms occur in three or more settings. For some children, symptoms may first be seen only at home, but with time extend to other settings, at school and with friends: [And then into adulthood].
4
@Lenny
You are too kind with this diagnosis.
Trump meets the criteria for a sociopath or psychopath, about which way too few people have an understanding of the real harms these individuals inflict on others.
Downplaying is a form of denialism. I can understand why people are reluctant to admit what we have gotten ourselves into, but the sooner we pull the rotten tooth, the sooner we can start to heal.
Unfortunately, our president doesn't have a wit to keep about him.
6
The global economy is not strong. It was put on life support by injecting massive amounts of cheap credit through low interest rates and QE. This was the right thing to do to bring the economy out of the worst recession since the 30’s but it now needs to be delicately weaned off this borrowing by raising interest rates and paying off govt debt. This is a hard task to do without causing economic turmoil and will require skilled leadership across the globe. Sadly in a world of Trump, Brexit and nationalism intelligent leadership is a of a bygone era and I fear the worst for 2019. I hope I’m wrong but brace yourselves as the world is being run by idiots.
3
Sorry that Steve M had to take some time off from his vacation in Mexico to place some calls...that poor man works like an animal...I imagine that his lovely wife Louise is busy serving meals to the homeless as she is the very spirit of charity, so kind and generous. Hard not to confuse her with Mother Theresa.
4
We do not need Washington to ruin the economy as the socialist democrats have done so since day #1 after President Trump was elected. If you continually spew hatred and pessimism long enough it usually results. The socialist democrats have only themselves to blame for a crummy candidate, HRC, their problem. It should not be a daily hate commentary by the socialist democrats.
Trump destroys everything he touches; including Xmas Day. He stated no Govt till he gets his wall. Never.NO money ever; ever; ever for the wall. Ray Sipe
1
80% of Americans are living paycheck to paycheck. The economy is only good for a small percentage of the country with most worrying about how to pay the bills and maintain their healthcare coverage.
https://www.theguardian.com/commentisfree/2018/jul/29/us-economy-workers-paycheck-robert-reich
6
“But, other than that,” Mr. Trump concluded, “I wish everybody a Merry Christmas.”
1
DJT is losing sanity by a landslide, everyday. He was proud of shutting government down first, but now blames Dems for not cooperating. By using deliberate self-pity to lure his base, chanting, 'Poor-me, I'm doing so much for this country, stuck in WH, all alone!', he wishes to sound both competent and dedicated; he is neither.
Mr. President, you have done nothing...nothing...for this country. In alt-world, that is called 'winning'.
3
In a month this writer is going to be singing a different tune. My "100% federal bond" transamerica stock fund is down 20 thousand dollars. Are we suposed to believe this? America's doing just fine? With a POTUS surrounded by criminals who's also a one himself it's hard to look the other way...
2
Steve is running for president.
2
This is exactly what Putin had in mind when he put his eggs in Trump’s basket: incompetence, ineptitude and chaos in the United States. Shrewd and malicious.
The question is will Congress do its job and rid this country of an inept, immoral and felonious president and his administration, including VP Pence (who was co-conspirator in the “Flynn lies” cover-up).
6
“Legally dubious”? Is that Timespeak for “illegal”?
2
I believe this reveals that Mnuchin wrote the Sept 5 essay “I am Part of the Resistance Inside the Trump Administration”. Has everyone else left or been fired since then?
The fish rots from the head.
Trump and Pence must be removed along with most of the incompetent cabinet. Then we can talk.
It is fine to be able to run the economy decoupled from the chief executive when he is a non-disruptive team player. Not so good when he's a raving psychopath, traitor and thief.
4
So trump inherits a rising economy, takes credit for it and promptly proceeds to run it into the ground. Why is anyone surprised by this course of events. Even Mnuchin is working his hardest to drive us into the ground with his chicken little routine.
My 401k took a beating this month...these guys are not going to be happy until they have taken everything they can from us.
6
This isn't Washington, it's the US population that votes in these awful creatures. What do we expect when overt criminals sit in the executive office?
3
Trump has no idea what he is doing, and it should have been painfully obvious to everyone, long ago.
We need to get rid of the clown, and all of the people he brought with him.
3
Trump's taking full credit for the rising stock market, then blaming someone else for it's decline simply doesn't work. It was foolish to begin with. Presidents inherit an economy when they start their term & Trump benefitted from the long years of improvement after the Great Recession started during Bush's tenure. Taking full credit OR blame for the US economy's growth or decline is far too simplistic for the largest economy in the world. Not making mistakes that effect the economy are most important & Trump may be making some now. We will see.
33
@Bob @June @markymark @Mr Mark @Blue
Here's why the Republican party won't abandon Trump and why Democrats are frustated:
Economy is growing at 3% GDP. Unemployment is at a 50 year low;consumer confidence at 17 year high. In spite of recent predictable drop, S&P 500 hit historic $20 T. No North Korean tests and they returned American soldiers remains. China proposes lowering US tariffs on autos from 40% to 15%. NAFTA re-negotiated, USMCA helps farmers.
Assad not gassing his people, Missiles worked. Sanctions against Iran and Russia. NATO pledging +$10 B more. ISIS w/o califaith. No US terrorist attack since Jan. 2017. Energy independent, Keystone construction and access to ANWAR. Deregulation: New reg.2 removed. VA able now to fire incompetent.Depleted military "not combat ready" funded. DHS illegal immigration reduced (67%). Deported 2,000 felons making us safer. Bi-partisan "First Step." SCOTUS (Gorsuch & Kavenaugh). US embassy moved to Jerusalem. "Right To Try" Drug law.
These uncontested achievements in less than two years label Trump as "Someone who gets things done." This is why he was elected and if it continues he will be re-elected in 2020. This is why West Virginia Republican is running on Trump, and why Dems are frustrated - Schumer won't budge on wall!
@Frank Leibold: All we got was the biggest stock-buyback binge in history.
1
The almost irrelevant platitude, "The Economy is Strong," irks me. Nobody agrees on what metrics make the economy strong, let alone how a "strong economy" affects ordinary people's everyday lives. The stock market is in free-fall having its worst year since the Great Depression. For the first time in history all 8 major categories of economic investment are finishing the year below where they started. interest rates are rising as is inflation.The annual deficit is now only eclipsed by WW II & all indications are that the next year or two will eclipse that record. National Debt is staggering. When Reagan entered office, the accumulated national debt run up by the first 36 presidents was just under $908 BILLION in real dollars. After 8 years of Reaganomics, the national debt rose to $2.602 TRILLION (286% of the debt of he inherited) - so much for the effect of tax cuts for the rich & corporations. By the end of Trump's first year, the debt was $20.244 TRILLION, more than 20 times what it was before Reagan. Trump's figures for 2018 are skyrocketing because of top-end tax cuts, trade wars, & tariffs. The GDP is NOT a meaningful measure of the economy. The fairness of its distribution is. From 1980, real personal income went down slightly then went up slightly to 108% at Obama's end. Productivity went up 243.1% (wonder where the money for all that increased productivity went?).
In 1981, Brazil's dictator, Gen. Medina said, "The economy is doing great. The people aren't."
6
Neil writes, “It was the kind of disclosure that risked causing more damage than it was intended to prevent. If a top health official announced that he had convened conversations with top pharmaceutical C.E.O.s and was pleased to learn there were no drug shortages, your first response would not be relief but to ask, “Wait, we need to worry about drug shortages?”
However, as Neil’s book about Alchemists should note there has to be some special catalyst abusing the inverted disappearing of virtual ‘gold’ turning into this leaded drop of stock valuations — and IMHO, it is that people (not just professional investors and the UHNWIs who own much this paper gold) are somehow sensing that the catalyst could be that Emperor Trump, and perhaps a previously unseen Empire is starting to adversely effecting both the credibility and the value of this magic market.
2
Trump seems determined to ruin the world's economy. His tariff wars may succeed in doing just that. No markets like uncertainty and Trump exemplifies uncertainty.
7
Determination implies reason. I see no evidence of it. Likewise, the idea of Trump intentionally shorting the market for personal gain is a stretch.
1
@Dan Barthel
He revels in destruction. Personal financial gain is a subtext and energizes and helps permit his penchant for destruction and chaos.
He needs this to feel alive and of value much like other addictions.
100s or thousands perhaps worked to quench the California forest fires limiting the destruction and loss of life.
No one is effectively working to stop the Trump machine which potentially and in real time is infinitely more damaging.
2
@Doug Lowenthal: Maybe it is a pump and dump by people who control enough money to move financial markets.
1
The 2008 economic crisis was managed through a combination of effective economic leadership in the U.S. in concert through extraordinary international cooperation thru the G20 and other processes. Treasury Secretary Mnuchin polled the same banks that were at the heart of the 2008 crisis and they affirmed they were strong. But the strength of a bank or the country is based on expectations rather than on statistics. The standing of the Fed and other economic leadership that remains in the U.S. is being eroded by Trump and the G20 along with other international institutions created to manage global crises are under incessant by Trump and Bannon with Pompeo.
The expectations of most Americans are shaped by the leadership of the President. Rather than "All we have to fear is fear itself" as voiced by FDR for an increasing share of Americans fear is centered on what will Trump do next. Any action that the Fed may take will be in the noise level.
The central problem is Trump. Unaddressed this is spiraling out of control.
The institution that can address the problem of Trump in the short term is Congress. There would be no need for use of the 25th which could be very risky with Trump if Congress would reclaim its status as a coequal branch of government.
If Congress passed a veto-proof budget bill they would put Trump on notice to act like the president of the U.S. rather than a man on the verge of a breakdown. If things get worse the 25th Amendment specifies what to do.
9
@Vid Beldavs
Nice suggestion but in my opinion the country is in an irreversible death spiral.
So as the band plays on, enjoy.
1
Trumpsters trumpet about the gains in the market since election day. These reflected expectations for Trump through 2017. The insanity of 2018 reflects the reality of Trump.
6
The economy isn't strong.
The stock market only effects around 17% of all Americans, directly. The unemployment number is a fantasy number based on household phone survey participation, immediately dismissing the very people most likely to be unemployed -- the homeless. Wages are still at mid-1970s levels. Automation will be able to do every human task inside 50 years -- so all of this can ONLY get worse.
Every indicator of 'economic strength' used to bolster this idea that the economy is strong, is a select indicator that only really affects a small portion of society -- generally the very richest.
For the vast majority of us, we're still broke and we work harder for less than our parents.
27
@J You absolutely hit the nail on the head. The rich are getting richer, the poor are remaining so, and the middle class are trying to afford higher prices with salaries rising very little or not at all. Trump is little more than a snake oil salesman and his inexperienced and inept "advisers" are running this country into the ground. Sometimes I wonder if Trump's the Manchurian Candidate.
3
Speaking for myself, at 66 years old, my confidence in the economy has shrunk considerably especially during the past several weeks. I daresay that there are many others who feel the same way. My husband and I have started to cutback our spending of non-essentials. Overreacting? Ha! Between trump's decompensating (from Merriam Webster's definition: "Decompensation is the psychological term used when a person is showing signs of deterioration regarding their daily functioning....") and Mnuchin's feeble attempt to enable trump's disturbing behaviors not to mention the GOP's failure to act responsibly, I'd say we're in prevention mode. As they say in GofTh, "winter is coming." It's not going to be pretty!
15
A little market downturn is seen as an opportunity by some, others see it as the downfall of capitalism. I prefer this economy over an Obama economy any day of the week. Cheers!
3
@Southern Boy Some people are into self-flagellation. Each to his own. Just look at what the Dow has done in 2018. There is nothing normal about this. It reflects the real effect of Trump’s incompetence and insanity after only one year in office.
6
@Southern Boy
Your statement is factually incorrect. Obama inherited the worst financial crisis since the great depression-- double-digit unemployment, financial markets in turmoil, failures (or near failure but for a bailout or merger) of some of the largest financial companies in amercia-- lehman, gm, chrysler, aig, bear strearsn, freddiemac, fanniemae, countrwide, wama, indymac, new century finance, wachovia, downy savings, merrill lynch, and the list goes on.
Obama approved guaranteed loans to chrysler and gm, passed TARP bill, approved stimulus bill, and worked with federal regulators to calm financial markets. .When Obama left office\, unemployment was at near record low while the stock market was at record high.
Trump inherited a growing economy from Obama and road his coattails. Now his childish, erratic, unstable, unhinged behavior is taking a toll on financial markets. We need am an adult in the white house-- not a mentally unstable man-child who spends half his day tweeting insults to settle scores (because he is so thin skinned) and watching fox news and causing chaos.
9
>>> "A little market downturn is seen as an opportunity by some, others see it as the downfall of capitalism."
And others of us would see the downfall of capitalism as the opportunity of many lifetimes, for a very large majority of humans on the planet. ;^)
3
"Which Will Win Out in 2019?"...I'm betting on neither, if by the "economy" you mean the stock market...the underlying economy will be OK (better than OK if wages rise), the stock market will tank further (back to less exuberant levels), and leadership?...well, good luck with that...
4
@Jim The market reflects investors’ expectations for the economy. They won’t remain detached for long.
2
Strong economy? This is REALLY tiresome. For who? You mean the true Elitist Set of this country who just got another shot of social/corporate welfare while the rest of us are throttled toward a brick wall?
25
The Republican mantra of limited or no government, making tax cuts ostensibly, only for businesses (but practically, mostly for the super-rich), privatizing or eliminating social/ government programs, reducing public education as an unintended step-child of “governing” that may not propagate their philosophy of life, had promoted during the past forty decades! Now, it has come to fruition with unending wars, income disparity of unimaginable proportion between the top 30% and the lower 70% and two Great Recessions or a possible Great Depression in the making! With a clueless and unstable President at the helm, the cow-towing Republicans have gained their pinnacle in GOVERNING!
8
Why did the market drop?
Perhaps the sudden pulling out of Syria, with no advanced planning was one reason. Then Mattis resigned because he was not consulted or asked to make preparations for a complete change in policy. Then when Mattis wrote the reasons for his resignation, Trump got angry and essentially said, "You can't resign, Mattis, because I'm firing you first!"
Then there is the realization that it is this same Donald Trump who is waging an unnecessary trade war with China that is "easy to win," yet may raise prices at Walmart for ordinary Americans, adding inflation to an economy that so far has avoided inflationary pressures.
And then there are tweets from the president proclaiming that the only thing wrong with the economy is the Fed and its raising of the Fed Funds rate by 25 basis points. The market almost started recovering yesterday, but this tweet sent it plunging to a closing loss of over 650 points on the Dow.
Then people say, well at least we can impeach Trump. But that is a drawn out process, during which time Trump can try to deflect from bad news by raising tariffs further on China.
Things like this have an impact on the mood of the market. It isn't rocket science.
The US has had many terrible presidents. But at least previous failures like Nixon had competent people like Kissinger in the cabinet.
This is the first president that can't even run a cabinet successfully. Americans are stunned by Trump's incompetence.
20
@Jake Wagner
Americans are clueless pawns.
3
Close to a million government workers are spending Christmas Day furloughed or not being paid for their work. Likely hundreds of millions are worried about what further the market will do to their retirement and other savings when it opens tomorrow morning. Tens of millions are just "grateful" that the ACA seems to have survived for another year against Trump and the Republicans feverish attempts over the last 2 years to eliminate it.
And what is Trump doing? This "leader" is holed up in the White House and whining nonstop on Twitter about his precious "wall," all so that he can get a pat on the head from Ann Coulter.
14
@Dan88
Christmas furlough a disaster for workers? Humbug!
Many workers would forego a paycheck this week for the opportunity to be free of whatever organization they are required to attend.
@Tim Clark
On what planet do any workers live that they "would forgo a paycheck this week"? If most people fail to receive even one paycheck a YEAR, their lives would be turned upside down. The mortgage, the power bill, the doctor's office--they all still demand to be paid whether we go to work or not.
Are you any different, Tim Clark, that you can willingly give up a paycheck just so you don't have to go in to work for a week? Please to get real.
I, for one, am expecting a very rough 2019. The downturn will not be pretty.
2
@TinyBlueDot
I don't know what to say, except.....Having to work between Christmas and New Years is unamerican.
(I was going to say "uncivilized," but I'll stick with unamerican.)
Do we know whether Trump or anyone in his family or among his intimates has been shorting stocks recently?
7
Market Sell-Off:
1. Federal Reserve Mixed Signals:
- The Federal Reserve raised short-term interest rates to keep the U.S. economy thriving.
- But the Fed also downgraded its economic outlook for 2019, triggering a steep sell-off in markets.
2. The Markets are concerned about future actions by Congresswoman Maxine Waters (D-CA) Ranking Member of the House Committee on Financial Services.
Income disparity, the national debt, the credit card debt, the medical- bankruptcy debt, the college loan debt , corporate debt... all this will lead the such economic disputing equalling the 1930s devastation.
6
Dear Mr. President:
Regarding your claim that the Fed is our only problem, I'd like to respectfully submit the following items for your further consideration:
1) The tax cut that would "pay for itself". But didn't.
The legislation, sold on unrealistic growth forecasts, has punched a hole in the country's finances that will soon require more $$ in federal interest payments than we spend on Medicare or defense. It's the key driver of the inflationary fears that Powell is trying to keep a lid on.
No wonder Ryan's leaving town.
2) Tariff Man
Steel tariffs open a plant in Granite City, Illinois. Net gain, 500 jobs. Increased steel prices push Chevy Cruze profits into negative figures, GM plants close in Ohio and Michigan. Net loss, 1600 jobs.
Total job loss: 1100 jobs.
3) Shutdown Man
By Wednesday morning of last week, stock market had stabilized by 11 AM the day after Fed increases. Prez gets ripped on Fox News, budget deal that Huckabee said was a "go" gets cancelled, stock market plunges and keeps plunging.
4) We're afraid you're losing it
The issue isn't the rate increase anymore. The issue is whether our president is cracking up or Fox News is running the country.
Thank you, sir.
Signed,
Bruised Investor
15
What do you mean when you say the economy is strong?
7
@Deborah Fink Great question, since 80% of Americans are living paycheck to paycheck and worry about paying their bills and healthcare coverage.
https://www.theguardian.com/commentisfree/2018/jul/29/us-economy-workers-paycheck-robert-reich
1
Trying to compare the crash of October, 1987 to today is ridiculous. In 1987, risk free 10-year Treasuries yielded 9%. Today, they yield well less than 3%.
3
This could not be worse if it were the result of foreign planning and execution. The ruination on practically every level of our country. Putin, "The US is done." Stick a fork in US. Will no one act to end this coup?
10
Just ask all of the folks that have to live off of their 401k savings how confident they are in the economy. There will is more to the picture than just the jobs market.
9
Trump taking credit for a booming stock market instantly blames the Fed Chairman for the rapid sell off . Shutting down the government for the wall as he panders to his base thinking about 2020 election. Claims all the laid off workers are telling him to hold out til he gets the wall ,of course this seems another typical Trump lie he is known for. Claiming to know more than economists Trump will run the entire economy and supervise the fortune 500 CEO'S who he feels report to him. The democrats will control the House and the Mueller report will be out soon while investigative journalists will look into his family financial interests in Russia, Turkey and Saudi . Mattis damaged Trump' s foreign policy image. 2019 will not enhance Trump's run for re-election bid in 2020 as more negative info comes out about Trump and his family and cronies.
3
Obama left us on the right track after a disastrous GOP Administration. Now Trump and his GOP Legislative Government are taking us down. My portfolio has taken a huge hit and I am worried about the future. I haven't even seen the impact of the so-called tax cuts yet.
9
Totally disagree with the Author. 1% to 2% GDP is not “normal.” The tax cuts will work, especially over time. I support President Trump and his economic team. I agree Mr.Trump has made some mistakes along the way but I disagree more with the (hate to use this name) Obama administration. To me, and my family he did nothing for us. That’s my view, if you liked him and his policies worked for you then God bless ya. Anyways, the interference of the central bank in 2008 was the beginning of the catastrophe your witnessing (Not all Trump.) and are about to witness. The bond buying by the EU and the Federal Reserve did nothing but kick the can (of market correction) down the road. Lastly, everybody who’s truthful with themselves know that Ms. Yellen should have raised rates back in 2015 but didn’t, because of The Obama Administration. So, get ready...because the inevitable is on its way.
@Michael
The tax cuts will work?
Tax cuts never pay for themselves.
We're seeing a permanent tax cut for the rich and an expiring tax cut for the rest.
And a deficit that will become astronomical.
Meanwhile workers are being laid off as offshoring continues and tariffs force businesses to cut back on production due to the burgeoning price of raw materials.
The goal of Trump's economic team is to maximize profits for the rich at the expense of the rest of us, including you.
3
The corporate tax cuts caused the already inflated stock market to inflate even more as corporations used those cuts to buy back their own stocks. Not a good move by corporations because the tax cut money just evaporated as the market deflated. Are we due for a recession? Yes. Recessions are both expected, natural and generally healthy. Dead-end industries get abandoned and forward industries expand. Sometimes the government in desperation tries to prop up the dying industries like coal and oil pipelines when they should be allowed to die. The transitions from old to new can be painful like going from gasoline to electric cars. We are already seeing this with the major auto industries. GM closing plants to transition to electric cars is an example. Sadly, Trump is mentally stuck and fighting the health transitions. He is propping up the dead-end fossil fuel industries while criticizing and even threatening the companies who are making the transitions necessary for their long term survival.
4
@TimToomey
Can you suggest a fuel which would be consistent and available to run our industrialized, mechanized economy? Solar? Wind? Water? Electric cars need to be charged; what keeps the charging stations operating 24/7? Can we use more natural gas which also uses extraction processes? So far fossil fuels, oil and coal have been available for fuel. Solar is not always available, neither is water power. China uses a lot of natural gas and some solar; however coal fuels her factories in most areas. Norway uses her oil reserves. Denmark uses some wind power. Then there is the necessary infrastructure requiring some new process to store and save energy sources. No doubt energy corporations are doing some intensive research, as are major academic institutions. Industry isn't ignoring the problem; they haven't found a solution for all aspects of clean energy.
The stock market is a casino, backed by little more than delusion. The only thing that one can learn from history is that no one can predict the future.
Beware the false prophets!
Infinite growth is the delusional myth of capitalism, and it's on its death bed, having run into real capacity limits imposed by nature.
In case it wasn't clear, the Western Civilization is slow motion imploding, as it has for decades now.
Merry Xmas!
5
Republican "prosperity." By the time their base figures out what was done to them, the richest of the rich will have picked up all the money and gone home leaving the scraps for everyone else. To respond to the increasingly erratic Emperor Benedict Donald, am I tired of "winning" yet? I sure am.
8
The base will never figure it out. All Trump has to do is start screaming about illegals and the base rallies.
1
Yes, if we resolutely ignore the carnival of sleazy dunces at the very top of our government, and pay zero attention to the wild and unpredictable daily barrage of scandal and screwup, we can be calm and optimistic about the future.
Unfortunately, outside of the economics beat,nobody thinks that it’s a good idea to ignore all that awful stuff. The country where “the economy” lives is deep trouble, and appears likely to go deeper at any moment.Now even Wall Street is concerned that we might have a real problem here.
Just close our eyes, and think happy thoughts? Just read the rest of the paper, and find out why that’s impossible.
5
The only goal of the current administration is to make the obscenely rich richer, no matter what the consequences for the rest of the country.
This is their job:
“ to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity”.
They need to do it.
7
Mnuchin's grandstanding play makes a bad situation worse. The Treasury knows the financial condition of US commercial banks. That's the whole point of bank regulation. Trump, of course, makes a bad situation even more worse. In the normal course of a business cycle, economic growth was bound to slow. So, on top of that, Trump decides to fight a trade war with just about every other economy and tells everyone he's a Tariff Man. Then he picks a fight with the Federal Reserve, probably the only credible institution in Washington. Bottom line is this: equity investors are finally pricing into their valuation the real risk premium of the Trump administration, which is one of chaos and gross incompetence.
2
@Joe Smith
Canada largely avoided the 2008 recession because of the work of our central bank The Bank of Canada, its CEO Mark Carney and the economist who study and manage our Canadian economy.
Mark Carney was hired by the British Government because he is so good at what he does. Mark Carney is the loudest voice opposing Brexit.
Our hubris named us Homo Sapiens but the gods named us homo irrationalis.
Does the President actually believe that any business executive or educated voter will believe he knows what he is doing? Clearly the border debacle is his doing, and the shallow administration does not know how to respond to the market's needs. It certainly didn't need a tariff sponsored trade war. Mr. Trump is that weak golfer who blames his caddy when the ball goes in the rough.
3
President Trump is exactly the same person as candidate Trump. So why the complaints? You knew what you were buying.
MAGA MAGA MAGA
One more slogan and he will be elected with a bigger majority.
2
@Sam Guess what. MAGA is not happening. Not here, not anywhere. There is no evidence of anything getting better anywhere. So, what are you talking about, Sam?
Under Obama the Democratic Party embraced fiscal responsibility, family values, global leadership, steadiness, professional management, and democracy, and it overwhelmingly still does. Under Trump the GOP has engaged mostly in what it used to criticize the Democrats for: reckless government spending, frivolous lawsuits, free sex and open marriage, sympathy toward Russia, and mathless economics leading to poor economic results. We can add to that irresponsible government shutdowns, voter suppression, gender bias, and white supremacy, and it's all because America's bigoted class wanted to send a message in 2016 that this is their country. Trump is an archetypal figure, the big, rich White man who conquers and colonizes and does whatever He wants. The current market downturn is pretty much 100% a product of their insistence on that.
3
So consumers are spending big time this holiday season. Well, not this consumer. Given the staggering incompetence in the White House, as others have pointed out, I am saving my dollars.
8
Minuchin talks to the banks every week. The Times might point that out rather than going along with the idea that this particular week’s talks are ominous.
Let's get real. We're in big trouble. The slightest crisis, economic or international, will overwhelm the Trump administration.
3
The good news is that contrary to popular belief; the Stock Market is NOT the economy. Its a game of speculation driven by either fear or greed; based on, uncertainty or confidence, respectively.
The other good news is that Capitalism has a life of its own. In spite of what politicians do to try to feed it, or the gross errors they make that should cripple it, businesses go on somehow, often at odds with predictions.
Having said that, there is nothing more perilous to an economy than shrinking trade. Trump's off-the-cuff 'Trade Wars' with every nation, could cripple the global and US economies.
Inequities in trade balance and practices do need to be addressed; but in a rational logical way individually with each trade partner. China's theft of IP and patents, currency manipulations and obstructions to imports should be addressed with All our allies together. But Trump just picks fights with everyone, regardless of the facts. Isolated, friendless, its a recipe for failure.
3
Western civilization appears to be following signs of classic decline. I am sure educated elites in great empires watched in impotent horror as their futures were destroyed by a large faction of greedy and illiterate citizens. We do not teach history and the historians of our nation are quite a useless bunch, unable to clearly enunciate warnings in time or offer concrete advice. The great middle eastern civilizations of 1177 BC, the Mayas, The Chinese, the Romans etc. all imploded while steeped in fantastic knowledge, brilliant innovations and technical advances. This is like deja vu.
I resign myself to destiny.
3
Waiting for the real sources of power — the large corporations, banks, etc. — to decide to take action to remove the feckless, existential threat to economic viability and increase in profits — Trump and his band of foolish swamp children playing at managing the economy and governance. Impeachment is “easy” based upon so much fraudulent and self-dealing behavior, but it will take the concerted power of these economic drivers to pressure the current crop of otherwise spineless Republican senators to vote to convict, and save the economy.
3
If the stock market continues to go south and banks become stressed, The Times would be the first media outlet to demonize the Trump administration for not being proactive enough to make sure the banks were in good shape. No matter what Trump, Menuchin and other members of this administration do, Democrats, liberals and progressives will seek to destroy them in the media, as they have from day one of this administration. This is hardball, and Trump is responding in kind. Good for him.
1
Yeah Trade wars are good! Alienating our allies and cozying up to Russia is good. Cutting the safety net is good. Shutting down the government rather than compromising is the greatest.
@paul
Criticizing is not "demonizing."
Trump is responding to legitimate criticism — criticism that was based on his own words and actions.
Trump is only able to "play hardball" because he has a quiescent party of greedy, sniveling sycophants behind him. He has no more ability to play hardball than any other toddler prone to tantrums.
If the Republican Party were made up of principled adult human beings, this narcissistic baby would have been long gone.
@paul What in the world are you talking about? What has the Trump administration done that has improved anything, anywhere? Trump is defending himself against all kinds of hostile forces? The hostile forces are in reaction to his behavior, not the cause of it.
Let's stop beating about the bush. The U.S. is in a severe leadership crisis. Not only do we have a lack of leadership, the people at the helm are destructive and will continue to be until the U.S. falls. This is a distinct possibility.
As it stands now, we have no faith in the govt. and our economic system. The market will continue to drop until this is remedied. Most of Congress has sold out to an ignorant, totally dishonest leader who is likely guilty of treason. Folks, the future is bleak...
2
Really? "Dow Suffers Record Breaking Christmas Eve Losses". Headline from NPR. Additionally because of #45s tariffs on imported steel & aluminium, American manufacturers in those industries are losing business, cutting back on staff. So more and more people are out of work. Don't know what economy you guys are looking at, but y'all might want to get some real journalists back on staff. I'm sure they'd love the work.
3
This media orchestrated diversion campaign that
focuses the usual propaganda outlets attention upon
the tropes that big gut emits in his unending
streams of bizarre and childish tweets is working as it usually does. It creates a media narrative that dictates
a story others feel obliged to report dutifully without
any analysis and contextualization.
How can we break out of this self defeating and deluding
national style of story telling?
Few give the needed analysis to clarify how its goal
is to minimize/divert attention upon the responsibility for the tariff wars and their economic fallout, the clean air regs gutting, the giveaways of mining rights to western private interests, the massive deficits that will assume greater importance upon a slowing of the economy, the puerile derangement by which the climate assessment report was dismissed...why does
such idiocy so easily dictate how the stories are told to
the country and generate so little effective pushback?
The massive transfer of public wealth to large private
interests and the resolute climate change denialism are major stories of the last two years whose consequences will be felt for decades, but who
really can pay attention when there are so many
successful diversions by the master spinmeister and
his media/congressional enablers?
This is the mystery that maybe only the devil can explain to
us.
1
Mr. Trump is clearly the cause for recent market problems. No need to list all the foolish things he's done, as everyone has already listed them. It's enough to say that Trump's capricious, reckless and ignorant tweets and decisions are inconsistent, thereby shaking up everyone and everything.
Meanwhile the GOP sits back and watches, but does nothing to prevent the worst excesses from happening.
As a friend said yesterday, "It's a good thing Trump is staying in Washington, saving us a lot of money that he otherwise would lavish on Mar-A-Lago in the form of lodgings and food for the Secret Service, etc. "
1
A crash in the financial markets that will spill over to the broader economy just the type of Christmas gift I would expect from our president. EnTrumpy economics at its finest!
3
A good article, but somewhat biased in ascribing the current difficulties solely to the administration and not one tiny bit to the the congress. The current "we won't budge an inch" attitude does not bode well for democratic give and take. Also, with the tidal wave of investigations promised by the Dems, will there be any time and will to actually legislate necessary bills that stand a chance of passing?
1
True. Lets put blame on the republicans in congress for passing an enormously detrimental tax cut to the rich. And the pres giving the military even more than they asked for. All this contributing to the record deficit. I am sorry, but that was a partisan effort. They hold the blame or the credit for this, and cannot pass it off.
6
@statesman
"with the tidal wave of investigations promised by the Dems, will there be any time and will to actually legislate necessary bills that stand a chance of passing? "
You're forgetting - Nancy Pelosi will lead the House in January, not the do-nothing, get-me -out-of-here, John Boehner or Paul Ryan. She has an excellent track record at getting bills passed that help the American people. As she has said, she neither wants Trump's help, nor needs it.
4
Sorry i meant detrimental tax cut in favor of the rich
The temporary market gyrations are reactions to human- induced psychological, not fundamental changes in economic forces. Let’s keep a sense of perspective
2
@Tiger shark - revenue shortages due to massive tax cuts to wealthy & corporations, tariffs & realistic fears of more tariffs, trade wars whose parameters are changed by Trump based on what his Fox advisors tell him in the morning, an annual deficit that is approaching the all-time record of WW II & predicted by all non-Trumpist economists to break that record. A president who (with help from his father's money) actually majored in economics at Penn's Wharton School undergraduate program for junior & senior years, but who called General Flynn at 3:00 in the morning his first week in office to ask whether a strong dollar or weak dollar is better for the country - Flynn's answer: "Ask an economist!" Complete chaos in a GOP-led House about how to produce an annual budget. Three partial gov't shutdowns in one year. An out-of-control climbing trade deficit. A rebuilding housing bubble, massive corruption in the govt, massive corruption creating a monster school loan bubble. Median Wage & GDP, which traditionally rose in just about exactly the same percentages, but, since Reagan, real income has gone up to 108% of 1980, while GDP has gone up over 243%, with rigged tax laws & loopholes sending virtually the benefits of all increased earnings from growing GDP going to the top 0.1% of the wealthy & the great majority of that going to the top 0.01%. Wall St. setting up for another crash. Running out of room, but lots more.
Your perspective & $1,00 can't buy you a cup of coffee.
1
My savings in market took a 20% hit, and I am cutting way back. The stock market is not the economy, and seems to be ruled by algorithms these days - which don’t feel unease, just take profit when the opportunity arises. I also think these mathematical models can incorporate much more data quickly and can worm out weaknesses much faster than a whole team of economists.
Consumers face daunting challenges, and are struggling to purchase quality products. Some items are rising in price and consumer paychecks are not. A lot of money in our current economy disappears into warranties for complicated, finicky products that don’t produce as promised. Even more disappears into insurance payments for health and protection from loss and accidents. There is not a lot left over to purchase goods or actual services that employed people can fulfill. Most monies in many people’s paychecks just goes into an insurance company account electronically, which we all hope will not be hacked.
It takes very little to over-leverage this type of economy to one sector, and even less to destablize it with one machine-oriented trade. All it takes is one madman mouthing and tweeting thoughtless indictments to cause the cautious consumer to change habits, develop a wait and see posture. I believe the tipping point for this downturn was the hope that Mueller would be done with his report soon. Contractors and industries want to put money where the next power source is, not in this one.
9
The economy runs just fine without regulatory interference. The normal volatility that regulators feel the need to dampen is a function of human emotion overlaid on the investment cycle. Nine out of the last ten recessions have been caused by faulty monetary or fiscal policy. The Fed needs to keep it's hands off of interest rates and let them go wherever the market wants to take them.
3
Yeah I agree, just let the economy run itself.
Signed,
Herbert Hoover
5
@c smith: Why do you think the time value of money should fluctuate unpredictably?
1
@Steve Bolger Because human economic behavior fluctuates unpredictably, as does the expected and actual success/failure rate of investment. Why do you think a group of (demonstrably fallible) people in Washington, DC should determine the cost of money throughout the economy?
Why in such a hurry to make judgements on Trump's performance? He still has two years to go. The most important thing for his re-election in 2020 will be the stock market performance and economy in 2019.
By preempting the FED chairperson not to raise interest rate, holding Ms Meng as hostage in trade negotiation, and also pushing down the stock market, president Trump will ensure the interest rate under control, complete a trade agreement with China, and have a positive stock market return and good economy in 2019.
And people and voters will be happy to re-elect him as the 2nd term president. What a brilliant strategy!
2
@Usok: Trump's hired help only gets worse with every pick.
3
@Usok, there is nothing intentional or strategic about the dive the markets have just taken. And since all economic indicators themselves are strong, the blame is on the administration and erratic behavior and 'policies' of Trump. someone who does not, unfortunately, really know how to turn this situation around. Blame other people for it? Sure that he knows how to do. This is the worst president ever.
5
@Usok
The performance of the stock market has nothing to do with what people live on: real wages.
It has nothing to do with affordable health care or education.
It has nothing to do with working class prosperity, or the lack of it.
If the intention is to slow the economy now so it will be in recovery for the next election, then these aren’t mis-steps.
4
That would imply that Trump has a strategy but all the evidence proves that he is not strategic at all.
3
The most worrisome part of this assessment comes in the last six paragraphs: if a major economic crisis occurs in the next two years, I have no confidence that this administration has either the personnel, the intelligence or the discipline to deal with it effectively. Having loaded up debt with an unnecessary tax cut a year ago, how can they have the tools to inject stimulus at a time when the economy needs it? The economic ‘team’ — I use the term facetiously— does not project the technical understanding that will calm markets and restore confidence. And Trump’s two years of scuttling allies around the world suggests that when a crisis occurs, there will be no good will or resolve abroad to come to the aid of the United States. About the only thing that remains as a tool for crisis is the Fed, which having raised interest rates over the past two years could help by easing them in a downturn. But Trump is working hard the destroy even this last line of defense.
8
If Republicans refuse to muzzle Trump (a 2/3 majority in the Senate), chaos will win.
Since they call themselves Christian, I suggest they heed the Christmas message. Some good carols for that:
Peace on Earth, Goodwill Towards Men (and women)
7
What, exactly, does it mean, to say that "the economy is strong?"
Because of 3+ GDP growth? What does it measure? And, what doesn't it measure?
Unemployment rate? For several years, every state has reduced its weekly or bi-weekly unemployment benefits, and reduced the number of weeks for which they pay. Thus, people quickly fall off the unemployed database. And, some people, mostly over 55, who could never get back into the job market after 2008-2010, are among the "uncounted" as far as unemployed. And, so many people are working for minimum wage, or working 2-3 jobs. And, still cannot pay their bills. That's a strong economy?
Worse: Consumers are being driven off a cliff, which they do not know yet, thinking that the stock market gains were a signal that we were in a new financial and economic Camelot. They have been buying like crazy, during this holiday season, and it's not as if statistics show that savings rates have risen. Or that wages have risen enough to justify spending all that money on gifts and personal "wants."
Using savings, credit cards, or raiding your retirement account if you have one, for that new 65 inch TV, or that new cell phone, or ridiculously overpriced gaming devices for kids, and electronics that you can talk to in your house, even if you can actually do what you need to do without leaving the couch or walking more than 10 feet. All will come back to haunt you.
Start saving again.
14
@Alexandra Brockton Especially if you are over 55 and can't find work, you're on counted in the unemployment figures...
2
The GOP wants the economy to go into a downward spin, so they can blame the Democrats. This is an attempt to hold onto power; plain and simple. Never the mind that they are directly, or indirectly, responsible for each 21st century recession since the "dot.com" bust.
They are already blaming the Democrats for the current shutdown, and if it lasts a few weeks, it will be used against them, in 2020.
Never the mind, that the GOP has zero leadership, is spineless, cannot govern, and is incompetent. They are only good at a few thing: chaos, blaming and incompetence.
At the top of the swampy heap is Trump. The perfect personification of today's GOP. Trump is the embodiment of the GOP; including its ills, as well as lust for power.
The GOP spin is already in motion, including that being done by FOX News, and conservative commentators.
I need to add, if Clinton were elected president, she would have been subject to what amounts to political torture by the GOP. What to GOP did to president Obama would pale in comparison to what the GOP would have done to Clinton.
Here we wait, America and the world, for another US created world wide financial crisis and recession. Probably the first time that a president,and his party, have gone out of their way to cause enough uncertainty to create a crisis. All this to retain power and to keep an incompetent lunatic in the presidency.
Merry Christmas and a Happy New Year, America. Thank Trump, and the GOP, for a giant lump of coal.
25
@Nick Metrowsky As McConnell said let's make Trump a one term president!
Yeah sure. The economy is just fine. Most Americans don’t have an spare $400. Millions with no health insurance. Homelessness rising. Shops shuttered. Most workers earning low wages. College graduates burdened with high interest debt. Rents skyrocketing. Stock market plummeting.
Yeah. Everything is fine.
48
@Zejee, That everything is just tip top is the myopic view of those who have no monetary concerns. $600 pocketbooks, $500 shoes. The things we all buy. $1200 for an oil change in your Bentley. I’m sure you are familiar with these expenses, just as I am. Not.
4
@Zejee But we've alienated our allies and appeased our enemies.
4
The stock market is a leading indicator of economic activity. When it falls, it's because the market analysts are fearful of a future drop in business activity and profits. When the public sees the market dropping, it gets rattled. Fear begets a reduction in spending, which feeds the economic downturn.
After the sugar high of the tax cut/deficit bump, the Fed is having to increment interest rates upward to dampen the effects of the poorly-timed fiscal stimulus. These monetary steps affect some sectors more than others, particularly those that are interest rate sensitive, like home buying or auto sales. Both of these industries have been in a slump for months.
Our economy is consumption-driven, with about 70% of economic activity due to consumer spending. If the public gets a whiff of a downturn, it will likely curtain spending, exacerbating the problem.
Trump's random oscillations of policy and personnel don't inspire confidence. The removal of the restrictions on banking practices - the practices that gave us the last recession - have allowed reckless behavior to run rampant, again enriching the few while weakening the stability that helps Joe Average.
Short-term policies that boost the economy often have long-term negative consequences. Trump's inability to see beyond the next news cycle is encouraging such short-term thinking. I'm afraid we might be looking at another 2007.
Of course, he could always start a nuclear war...
17
@Bill McGrath...When Buffet goes bearish on America and starts selling off Berkshire Hathaway companies, I'll start worrying about the economy. Until then, stock market[s] are more a reflection of short-term speculation and greed than a measure of the robustness of an economy.
I couldn't have said it any better. Market valuations now in line with good "normal" economy. Only downside from here is poor politics.
6
@Paul S. Ah, Paul, let’s see, when the markets are up it’s good, when they’ve suffered a record drop, it’s good. When Trump festers in self-pity, throws temper tantrums and tweets or speaks another of his endless series’s of lies, it’s just bad politics. I’m afraid the only bad politics is the existence of this administration. Had the Democrats committed any one of Trumps many crimes you Republicans would have had them pilloried. Merry Christmas, the world thanks you for this giant lump of orange coal.
1
It is hard to have a growing economy when the income of its workers is shrinking every month. It is time to admit the tax break for the rich didn't work and to give that money back to the middle and lowest income group to spend. That will expand the economy.
32
@Joe Barnett. Yes let's hold our breath while the Republicans do anything for the middle class.
2
Not one word about consumer debt which is at an all time high again, just as it was before the 2008 debacle. Government debt is at an all debt high. We seem to be running on the fumes of debt and we keep making it worse.
If a person works one hour, they are considered employed. The unemployment figures are a mirage. Wages have gone up a little but are more than offset by inflation and health expenses. Most Americans are living from paycheck to paycheck and are one medical emergency from insolvency.
50
@Bill
Thanks. I was hoping someone would notice.
2
The late 80s early 90s were a difficult time, and not just because we had to suffer through Saved By The Bell. During that time, I worked for a micromanager with a control issue, a bi-polar manic depressive, a co-dependent who took speed, and a passive aggressive. My life was a pupu platter of employer dysfunction. Scores of employees quit, some crying as they ran out the door. These toxic bosses were eventually removed, not because of their ongoing abuses, but because they did the unthinkable: they lost the company money.
Wait for it.
36
Financial markets are finally waking up to the Trump leadership vacuum, and to the end of the interest free era, and those things - especially the former - has it scared to death. Competence matters. Leadership matters. We have neither. The world has neither.
42
most economists didn't even see 2018 recession coming, so there is lack of trust on that front, but the issue now is, Trump is certainly acting like Erdogan ... it is starting to look like there are no real differentiators between US institutions and those of emerging markets ... that is how low, the president is sinking confidence about the US
16
The economic recovery has been going on for nine years at a consistent unrelenting determined pace since the catastrophic Bush recession. Yet in this ninth year of the recovery trump asserts he inherited "a mess" and incredibly claims ownership for the whole nine years of recovery, including the low unemployment rate. In truth he's been blithely riding the economic recovery success coattails of his predecessor. Now he’s on his own.
55
@John Townsend - proven by fact checkers as well as common sense: Trump lies. That's not news. What is news is the level to which he has dragged us and the world down with no bottom yet in sight. Merry Christmas, eh? Ho. Ho. Ho.
Meanwhile back at the ranch in the US the EPA is being gutted, the CFPB is being dismantled, Dodd–Frank is being compromised, the deficit is going through the roof, huge chunks of public lands are being sold off, world free trade is being seriously assailed, the justice department is being revamped with a slew of GOP biased judicial appointees, and all while the FBI is being disemboweled.
48
@John Townsend
Are you saying that not everything is going well?
2
Stop with the macro economic analysis. The handwriting is on the wall. The spending class is starting to shrink. They form an invisible cohort that is hanging on by a thread with their income being eaten up by inflation while their wages don't keep up.
It is no wonder health insurance cost was a major political issue. Too many people are an illness away from bankruptcy or even death. There are economic undercurrents driving citizens to ruin, not expressed in an unemployment rate.
Supposedly with a less than 4% unemployment rate we sit with a 12% poverty rate, that is one in eight people in this country. Then there is the near poor to add to this travesty.
We can't even educate our citizens properly with student debt and college costs stifling economic progress.
The problem lies in sizing up human worth and how it makes a prosperous society. If letting the business Titans continue to run this country, blinded to their fellow country persons needs, we have fulfilled the Pogo dictum...."We have met the enemy and it is us."
43
A strong economy has to have stability and if there's one thing lacking from Washington, D.C. it's stability.
21
"Moves like Mnuchin’s phone calls to bank C.E.O.s could create a broader crisis of confidence."
Well, when words like "could" are used by professionals, and in this case a journalist, how much confidence is there in their own message ?
9
@MDCooks8...Add "seem", "potentially", "may" and so on to all of the "coulds". Then there are the hypotheticals and counterfactuals. And the buried leads [ledes for the elites]. And, the personal opinions of the writers, editors and media. Then, pass it all off as facts and truth without fear or favor.
It was one thing to short the market based on real estate issues. Trump has figured out how to short the market with his voice and a ventriloquist act with his treasury chief.
10
It’s really quite simple: the stock markets have declined 12 and 20% in 2018 because it has sunk in among investors and business leaders that President Trump lacks the necessary leadership, judgement, and temperament to “make America great again”.
Yes, the unemployment rate has reached historic lows. Profit hindering business regulations have been relaxed. Taxes have been kept in check - however our president has demonstrated that he is a pathological liar without a conscience.
He tinkers with trade agreements without regard or understanding the consequences. People he selects and hires for top level government positions turn over at an alarming rate. So much so that many top replacement prospects are wary of accepting high level positions because they are worried about quickly tarnishing their reputations.
People like General Mattis get lots of praise until the president reads their resignation letters. Then all of a sudden they are labeled by our leader as defective in one way or another.
“No collusion”, “no collusion”, “no collusion” he repeats over and over again, yet the results of the exhaustive Mueller investigation have not yet been announced. At his very core our president seems to believe that saying anything over and over again will make it so.
America is finally waking up! Las Vegas too. The oddsmakers have now pegged chances of him not finishing his 1st term at 40%.
Loss of confidence in our leader has translated to loss of confidence in our economy.
10
@Peter Civardi...those oddsmakers had President Clinton winning in a landslide as late as the afternoon of 11/8/16. I'm betting against the Vegas bookies.
Thank you for your thoughtful and informative article. Perhaps someone should read it to the president...of course, in 280 character bits at a time, otherwise he'll lose focus.
11
Just tell the Fed to take a year long nap. The Fed raised rates when oil was collapsing. Agricultural prices were collapsing , and workers on a whole got a six cent higher wage per hour. The stock market has fallen in value with losses in the trillions due to the rise in rates. The Fed over the last decade has repeatedly destroyed the US economy and has left us with almost a moronic strategy. Go back to Greenspan who was out in left field when real estate prices were increasing by 20% in 2005, 2006 and 2007 and did very little . Bernanke made wealth for the wealthy as the Fed started consuming all types of debt on their balance sheet flooding the system with liquidity. Now the theory is that despite works equity prices falling in value that somehow the system can handle additional rate increases even as asset prices deflate rapidly. The Fed needs a baby timeout and they need to make a statement that they will hibernate for the entire 2019. Apple, Facebook, Google, and Netflix just four companies have lost over one trillion in market cap. The market has lost over 3 trillion in market cap due to rate hikes. Keep going and the system will crash.
2
Ummm no. Remember ´irrational exuberance’? The result? Nah. You can keep it.
2
Of all the delusions that have infected the minds of economists, central bankers, and the investing public in recent years, perhaps none is as short-sighted and pernicious as the idea that aggressively low interest rates are “good” for the economy and the financial markets.
Put simply, the extraordinary and experimental policies of quantitative easing and zero interest rates have not been “good” except in the myopic sense of encouraging a short-term burst of very bad choices and misallocations of capital. While it’s unfortunately necessary to tolerate cartoonish rants by Trump about a potential Fed “policy error” as it normalizes interest rates, the fact is that the policy error is way, way behind us, and the Fed already made it.
The financial markets have already experienced years of aggressive yield-seeking speculation, record valuation extremes, and eager issuance of new “product” – in the form of covenant lite debt and leveraged loans – to satisfy the need of investors to “earn something greater than zero.” Now all we have is an unfortunate situation. With the total capitalization of U.S. corporate equities recently pushing $40 trillion, I expect that $20 trillion or more of what investors count as “wealth” will vanish over the completion of this cycle.
The 'market" is a discounting mechanism and has little or nothing to do with how the "economy" is doing right now.
I do not own a single equity. I am more concerned with return "OF" capital than return "ON" capital.
9
Nobody said “good,” is the thing. They said, “necessary,” as was QE. Our problems, as this rather good article details, is that back around 2008 grownups were running the show.
1
@Mark...You soiled your cogent insights with the remark about Trump. He has the audacity to say what a lot of people feel about the financial cartel and its enablers and sycophants.
Years of free money have created zombie corporations and zombie individuals.
Massive misguided tax cuts (reverse robinhood) have deployed finances wrongly.
Finally, denying healthcare coverage has created another financial problem for millions and millions of Americans. Trouble ahead. Fundamental problems.
Oh, did I mention the realization of the climbing cost of climate change that is a severe drag on the economy and, again, disruptive to individuals.
Yes, the inflated US economy is coming crashing down to earth.
13
Is the economy really all that strong? There are many worrisome signs, and Trump's erratic (irrational) behaviour give real cuase for concern and worry.
14
The economy is very strong. It's hard for business's to hire good employees. Wages finally went up when the Globalist Obama left office.
The economy here will stay strong because our president is focusing on building up our country not the world. We have the strongest economy in the world we are not dependent on anybody.
The president, for all his warts, does do a good job guiding our economy.
2
@Ari
Let’s let history decide this one
If Hillary Clinton were POTUS today there would be no talk of a potential economic disaster and a stock market correction would just be a stock market correction. Trump and his minions are seeding chaos into the economy because of the chaos he is seeding in international affairs and the discord he has been sowing into the American body politic. The worst thing that has happened to the American and the World economy is the presence of Donald J. Trump as the primary spokesman for the American government.
29
How is this article any better than anything Mnuchin has done? How does it counter the pessimism it says is at the root of the problem? Saying "The economy is strong, but poor leadership will make it crash" is still pessimistic and leads people to believe the market will indeed crash. Self-fulfilling prophecy has always been the main driver of the market. People will make happen whatever they think is going to happen. That's why the whole thing is a sham.
1
Before reading the article or the comments; which I often as enlightening as the writings that spawn them, I am going out on a limb and say the turmoil in the markets can be at least partially blamed on chaos created by The Stable Genius.
7
Team Trump, almost entirely due to his self-grandiosity, is in full shrink mode. The Grinch soon will be the only one left as he already bleats of being lonely.
Is it any wonder, as his acid behaviour has burned through an unprecedented massive loss of experience and competence in his organisation which was once ready and willing to contribute to the greater good of the Country?
Even friends and foes seem to agree on this assessment, some of whom are more forthcoming in their conclusions.
Will he be left the do even more damage unless there is serious reflection and action to right the ship of state before it is too late?
4
Trump should be lavishing praise on President Obama. Had Obama not handed over such a robust economy to him, Trumps's bizarre, erratic behavior quite likely would have sent the economy into a tailspin. He still may pull it off, and there is ample evidence that he is making headway, but at least Obama made it harder.
12
I hate to be ‘that guy’ but the President has a point. It’s not just the Fed setting interest rates. The Central Bank concept itself is terribly flawed. Isn’t the argument for a central bank centered on the idea that it stops bank runs? Yet how many banks have failed under the Fed? Can you say Lehman Brothers? Bear Sterns? I could go on. No, the Fed is not a government agency and that is part of the problem. They are nothing but bankers and you can bet they’re doing things that are in their best interest and not necessarily yours. The Federal Reserve should be abolished.
3
On the bright side, people, even those that supported him at first, start to understand that Trump isn't a horse to bet on.
7
@Thomas...I agree. Trump isn't a horse to bet on. That's obvious if one bothered to actual deconstruct this tedious discourse by Mr. Irwin. Somewhere in the middle he bothers with some actual economic analysis of the current state of the American economy. Irwin's editors must have dozed off, because he paints a pretty decent picture. Maybe his editors assumed he would continue with his gloom and doom Krugmanian catastrophe jurinalism. But, Irwin didn't, at least for a couple of objective paragraphs. So, Thomas, if you want to bet on horses, go to the Derby. I'll lay my wager on Trump. Thanks, Mr. Irwin, for a few tidbits of facts and truth. Hope you don't lose your job for violating company policies..
@Albert Edmud,
quite frankly, a bet that has a 100% chance to come true is not a bet.
It's fine for you to wager on Trump as some must wager on a 100% looser.
In his career, if you can call this a career, as a business person, Trump has lost more money than her ever earned and all of his "successes" turned out to be complete losses on the backs of investors and banks.
So before you wager anything on Trump, you might take a closer and educated look on what Trump and his team have done.
You will find that among the 7,000++ lies Trump has told the world and his supporters since his election, the ones about his successes as a business man who understands anything about economics are very prominent lies indeed.
No one would buy a used car from Trump, so why believe in his abilities to run an economy?
If you want to talk about facts and truth, you better have some as all information available about Trump in official records paint him a complete economic failure who has only survived because of crimes, lies, fake news and deceit.
But that may not be a convenient truth about the self styled messiah Trump, which I understand to be more of a cult leader than a politician or a business person in any case.
Tremendous number of Americans are totally aware that the Federal Reserve System, is "...of the Banks, for the Banks...", and not really interested in the welfare of "Joe Lunch Pail".
(Note: the same people who go bananas if someone makes any kind of racial reference, are perfectly OK with the "Joe Lunch Pail" slur, which is exactly why Trump got elected - no Putin action was required)
In their attempt to "impeach" Trump at any cost, the major media has talked up the possibility of a major economic crash - a vulture which has come to roost.
Trump will take all of this, and twist it around on Twitter to his advantage. He is very good at that.
Yes, Trump is 100% garbage, but that is not the point here. We have to deal with the real situation; supporting the impeachment fantasies of the losing candidate leads us to bad places.
When it comes to the economy, if we don't hang together, we will surely starve separately.
1
the economy is a shared belief in a better future, and it is very weak.
7
Democrats winning the House is a factor in the market slide.
3
Huh? This Trump guy has had multiple bankruptcies and nobody other than his immediate family and some fellow grifters want to work in his administration. Wall Street finally got a clear picture of who was in the WH. A guy who pretended to be the boss on a scripted TV show.
1
How so? They haven't even been seated. The story here is the the damage that an inexperienced, short sighted, egotistical and intemperate personality is causing through both his own actions as well as the actions of his inexperienced appointees. While we as citizens are the collateral damage - at least those of us not in the 0.5% that can weather the financial storm - we should not think ourselves innocent bystanders. 2020 is coming and it is incumbent upon us to stay motivated and take action when the next election comes.
1
It's a Wonderful Life, and Potter makes the call: "George, do you have enough money to make it through this financial crisis?" Years of Chicken Little insults of 44 previous presidents and everyone who EVER voted for a single one of them (things have NEVER been worse!) followed by unbelievable boasts
(NO man has ever stimulated an economy in the history of the world as much as ME!). Wow!
3
Senator McConnell, it is time to cauterize the wound. Trump has to go. Give him an exit. Explain how much better it will be for him if he leaves before Mueller releases the investigation. Show him that this is a no-win situation. Guarantee his pardon.
Then we celebrate Pence as a hero. He rights the ship of state. He saves us from another Great Recession. He redeems the party. Heck, he could even win in 2020. Even to this lifetime Lefty, it sounds pretty good at this point. Just get Trump out.
2
Good leadership should always be present. It is, as Mr. Irwin points out, currently thin. And economic realities and fundamentals, good or bad, should be accurately and clearly communicated to the public. This has been lacking with the President who presumes to know more than he does, and is inaccurate and imprecise and therefore dangerous. Secretary Mnunchin’s attempt to bring confidence to the recent sell-off was well-meaning but not well thought out. But then, who among us can recall the need, ever, to correct the inane ramblings and foolish decisions of a President of the United States of America? General Mattis tried and look how he was treated.
2
Well Republicans always celebrate when they win the presidency. Often they regret the celebration. This quarter just reflects the latter, hopefully. The gang that couldn't think straight, as Dr Krugman calls them, can certainly make it worse. Maybe Munchkin can learn from mistakes...
2
The stock market is simply the canary in the coal mine. Everything you say about the U.S. economy is true. All the benchmarks look absolutely rosy. So what is the big problem here? You don't pay enough attention to the impulsive, inexperienced, and hate mongering president who says he, alone, can fix the world. This is a guy who refuses. Let me repeat that, refuses, to listen to experts in any field. All the people echoing Trump are people with extreme or incredibly naive views. Pull out the troops, Syria will fix itself. Run up a huge deficit. No global warming exists. Health care? Snap your fingers and it's fixed. No problem. Allow foreign interference in our elections. Fine as long as he wins. Hire people like Kudlow and Mnuchin. Kudlow. 100% wrong about the great recession. Mnuchin. a movie investor. And then berate anyone who tells you you may be wrong. Oh and by all means yell fire in a crowded theater. And expect an orderly evacuation. Mr. Irwin. You are trying to candy coat a president who will, single handedly, destroy the good economy, world peace, and race relations in America. But, by all means, let's focus on the fact that it is sunny outside. Sorry. The very dark storm clouds with lightning and thunder in the distance and reports of heavy damage in the wake cannot be ignored. When forecasters see bad stuff on the radar, don't ignore it. . Even a five year old knows to head to the basement.
9
We are now in the Chicken Little media phase of the turndown when the press chants “the sky is falling” by publishing opinion pieces like this with ominous headlines that can’t help matters on Wall Street. The American people put a reality show personality in the driver’s seat, and the bus is careening out of control. No surprise there. When GW Bush cut taxes and reduced government regulations, the result was a recession. When Trump cut taxes and reduced government regulations why would anyone expect a different outcome? Buckle your seat belt and hang on.
1
Quite simply, few seem to have confidence that this POTUS has the ability to attract and work with the kinds of mature economic leadership that Reagan, GHWBush, BClinton, GWBush, or Obama led and listened to. That is yet another indicator that Trump is simply not competent to be POTUS. A prior appellation suggested that his temperament makes him.unfit. That is true but his incompetence is a growing international risk not just to the economy but to international order, mature diplomacy, the world’s environment, as well as international trade. He has done some good things, including forcing the Europeans to spend more on defense. True is that China’s egregious trade policies need to be confronted. But how? Ala Trump?
Our constitution seems to envision only removing a POTUS for acts that are in some way criminal. However, at this time, Trump’s criminality and lack of ethics, egregious as some might perceive them to be, are less of an issue than the trillions of dollars of value that the market has lost because of his mismanagement. Thus, on the basis that the World dannot not afford his incompetence, Congress has a duty to impeach him. That may well have to await the Democrats being in control of the House but, if things worsen, will the Republican Senate have the courage to toss Trump out? I surely hope so.
1
The stock market was about 18000 when Trump became president. Now it’s about 22000. That’s about 10% a year. Just a little above normal growth. Will the President who operates by his “ gut” keep that rate. Didn’t his “gut” tell him to buy casinos in Atlantic City, that would go chapter 11.
2
Federal Eeserve decision to keep raising rates was a huge mistake. Second the computer trading with respect to trading is currently insane and the Exchanges allow it to happen. These trading sites get bid and ask pricing at such a fast pace that selling can overflow the markets. NYSE are checking for insider trading while these speedy trading systems just raped the system of $2 to $3 trillion. The old NYSE antiquated system of controls is antiquated and the new CIS is destroying valuation. Third have you heard of Chinese water torture. China is aware of how much distrust there is for Trump. They can delay current negotiations until Trump is out of office. Causing more selling. Trump wants to be a dictator.and his popularity is in free fall . There is a possibility that foreign sovereign funds are all selling including Putin , and China to help them in their negotiations with Trump. Treasury Secretary caused massive selling by acting like the Treasury Department was checking the liquidity of the banking system which brought about confidence check yesterday . It was as if the Treasury wanted the market to crash. The Fed in conclusion is out of touch and may lead to a massive wave of deflation. Who raises interest rates when oil is crashing in price? Only out of touch leaders.
Irwin plumbs irony as he goes down the list of statistics that indicate no fundamental problem with the markets and yet ignores the pachyderm in the room. To him the financial markets chewing their fingernails to the elbow is ominous. Methinks it proves Trump right. He is right that it is Fed monkeying causing this problem. Powell et al are jacking up rates for the coming big bust. The 1MDB scandal in Malaysia is a canary in the coal mine that recently squawked and died. The Fed being the satellite campus of Wall Street is keenly aware of the current continuing party that brought us the GFC in 2007-8. So they are keeping the powder dry. If interest rates are already low then they will look downright silly with nothing to do to prime the economy. Bernanke was a clever dude who pulled the wool over everyone eyes in 2008 by unveiling something called 'quantitative easing' that was basically Keynesian spending for Wall Street and bupkiss for Main street. Powell can't use that trick now. In the coming bust, their actions will be closely watched for any new outrage used to rescue Wall Street. Even one dime in the direction of Wall Street is going to enrage the mob, ergo interest rates are the only recourse and so they are moving them up. It's got nothing to do with inflation but everything to do with discouraging Wall Street excess a la 1MDB. Trump should fire the entire Fed and replace them with people who will bring back Glass Steagall.
The United States under the current leadership has lost all respect abroad. To think otherwise is delusional.
I can’t remember a time when more of my friends outside of the USA were more negative, cynical and outright stunned by the muppet show which is called US government. What surprises us even more is that so many Americans seem to believe that the country is heading in the right direction. From outside it looks very much like you are heading for the wall (pun intended).
4
Methinks the stock market turmoil is intentional on the part of Trump - it's what Putin has told Trump is the next step in bringing down American power.
It's not Trump's incompetence, corruption, and fraud that threatens America - it's that he's a Russian agent, compromised by ties to Putin including getting elected President.
He owes Putin. Now we're going to pay for it.
Mueller has to hurry - the GOP has to wake up - he must be ousted from the White House.
6
I suppose others have considered the possibility that T is a "Manchurian Candidate" as is in power to destroy the US. Most of T's actions could be viewed in this rubric. I could imagine that he is doing this because he needs the Trump Tower Moscow and has several billions of chits out to Putin. It might be a compelling story line, but likely only 50%or less probable. The more likely case for T destroying our nation is that he is mentally ill or suffers Alzheimer's, or that he is way over his head and is so narcissistic that he lives in a fantasy world like Calligula in ancient Rome. In any event, when Thomas Friedman says openly that he needs to be replaces, I think there is evidence out there that it is true and we have to figure out a way to save our nation without breaking it apart like the Civil War. Republicans are in charge and it it up to them to forgo their pride and lead the way, short of that it may be Civil War.
2
You have this wrong about the economy unless you are only focused on the short run. Trump has traded our future prosperity for a strong economy today.
What happens when our huge debt engulfs us? What happens when our present allies look for a more moral and just leader. What happens when we finally realize that Putin was a pulling the strings on his puppet Trump.
it is obvious that Putin played our strongest weakness, greed. Gordon Gecko is leading g our country and his Puppet Master Puttin is pulling the strings.
The bottom line for this country is there is more danger in allowing Trump to remain in office than removing him.
For you Democrats don't declare victory and throw a party. You contributed to the problem. Citizens United and gerrymandering needs repealing. "One man one vote" is no longer reality.
Yes, it is time to."make America great again" and the start, only the start, is removing Trump ASAP.
2
Dear editors,
I know it hurts, but we must give credit where it belongs, hold on to your seats, it began with the Trump Tax cut , which said we are bringing back overseas business.This is the first time in my life that I dread a strong economy, as it may give Trump another 4 years.The only problem I see for the Trump economy is the enormous Federal Debt, & inflation caused by the strength of American Companies that will profit from tariffs, & keep raising prices that will restrain middle class purchasing.The economy is fragile & fickle anything can happen in the next two years.
2
Two more years of a Trump administration and backward-looking tea party Republicans in the Congress will destroy the 10 years of economic growth that resulted from Obama's rescue of the whole economic system against the advice of Congressional Republicans. Remember who was responsible for the 2008 Great Recession, under whose administration investment banks failed, which party was responsible for the De-regulation that led to bank failures. Then remember who bailed us out and set us on the greatest economic growth since the Great Depression. Give credit where credit is due and place blame where it belongs. Trump, the under-educated, ignorant narcissist and the 19th Century thinking in the current Republican Part is bad for the Economy and bad for ALL Americans. Does History have to repeat itself again? Will Americans never learn that elections have consequences?
8
This "super-prosperity" is based on three things that Republicans used to abhor -- cheap money, massive debt and increased government spending. Now that the fed is saying "the party is over" and you have to pay your bills, the stocks and bonds are heading for the door. It is really not that complicated.
1
The economy as described here provides a completely clear illustration of what weak leadership looks like —for anyone who is paying attention. The economy is the one thing this President has going for him at this point. It’s the one area where he has a modicum of experience. But instead of nurturing it, it’s become one more thing for him to destroy. He hasn’t bothered to understand its complexities beyond his own portfolio, and instead of imagining how he might use the power available to him to guide it along when it falters, he chooses to rant at others and look for ways to blame. Which as you point out, is destroying our confidence in it.
Take this model, spread it across all areas of government, and multiply times four years.
I’m not an economist but I have enough common sense to notice the indicators are pointing to disaster.
Wake up Republican Congress! And put a stop to this catastrophe in the making.
4
It's odd that the "market" reacts like an over emotional teenagers. I think it's more likely that people of great wealth have hedged on a down turn and Mnuchin with a couple key words can make his buddies a few billion on short selling. Also maybe the Kushners and the Trumps can scoop up some cheep real estate. That last down turn wiped out the remaining middle class and stole pensions from our retiring generation. My father lost million son in stock option from GM and is now on a fixed income after decades of work. It's a game most of usdon't get to play.
2
It is not the Economy Dummies
It is the lack of confidence in the Leadership and key officers
of the U. S. Government that is the primary contributor to the substantial decline of the financial markets in the past and last quarter of 2018.
1
In 2008 the entire country was was overwhelmed by the financial crisis. The one saving grace was the competence that was shown by government economic leadership (Paulson, Bernanke, Geitner).
Where are those leaders in today’s government? Treasury Secretary Mnuchin frightens the markets by making ridiculous phone calls to the leading financial Institutions. Fed Reserve Chairman Powell is being constantly derided by The President for simply doing his job. Chief WH economic advisor Larry Kudlow (ex television talking head) is nowhere to be seen or heard. So Sad.
2
Mnuchin's phone calls to bankers was done for one of 2 reasons:
1. as a defensive move to protect himself from a Twitter storm against him by Trump.
2. Mnuchin and Trump acted in concert to throw markets around the world into a mini-panic in order for Trump, the master of diversion, to get the Mueller investigation off Trump's back for 24 hours.
As we all know, Trump will stop at nothing, no matter how destructive it is, to make himself look like a victim when things get tough for him.
3
I do not believe the economy is as strong as this article implies. If it was, the market would not have tumbled over 5,000 points in the past several weeks.
1
The Trump presidency is exactly the 21st century idiocracy that Socrates warned of in the Plato's "Politics". This unlearned man with no enlightenment who has cheated throughout his life to have become the President of the United Sates. The sad thing is nearly a half of the American voters and the American system chose him, which means that our democracy is always vulnerable unless citizens are enlightened as Socrates warned.
3
This is by far the best recap of where we are and what is being priced in by the market.
The market, the most direct democracy in the world, the most apolitical voice, neither Republican nor Democrat, has joined in the critique of Trump.
November and December are likely a prelude to the continued angst by investors as the Trump ineptness gets quantified again and again in the coming months. Blaming the respected Fed, and its excellent Chairman is ringing hollow. Mr. Trump: You are the only source of uncertainty. Your ability to port your remarkable indecisiveness and volatility to the equity markets is simply remarkable.
Good luck Mr. President. You are on your way to go down in history books as a captain who destroyed a perfectly fine inherited economy.
5
It reminded me of Mr. Potter making calls in the movie, “It’s a Wonderful Life.”
2
The market rout is painful and just beginning. I am so proud of Chairman Powell for being Volkereske and not motivated by politics. Finally we have someone who wants to quit the decades old charade of bailing out stocks with ridiculously low interest rates that have made corporations just quasi-hedge funds while creating bubble after bubble of outlandish gains buy stockholders and executives while castrating the little guy in the process. The game had to end sometime and the author is very naive to think that the bursting machination wont cause a recession-but this one will be much deeper and longer than the one in 2008
2
I am guessing here, but I don’t think Trump supporters give a whiff about the stock market. Most (my speculation) have nothing saved and nothing invested.
Boy, they do love the turmoil, though.
3
"Self-inflicted wounds", I hear this in discussions of foreign policy blunders, the budget impasse, and now the massive hit on the equity markets.
The election of trump, America's greatest self-inflicted wound?
3
This article is a great example of how Trump's intellectual dishonesty has become the new normal. Remember a couple of years ago when he was constantly criticizing Janet Yellen for refusing to raise interest rates? Now he is criticizing her predecessor for doing exactly that.
The difference, apparently, is now that Trump is president raising the rates has the potential to slow down his economy; slowing down Obama's economy was OK, though.
News reports don't even mention that strange turnaround. I guess Trump's mendacity is not even news anymore.
2
So many “if only”. There lies the problem. The Democratic electorate blaming Trump and his supporters. While they deserve a large part of the blame, let’s not forget who the Democrats put forward as their “can’t lose” candidate: a well seasoned and experienced politician with decades of capital hill connections. And she lost to a reality star with one failed business venture after another. Sure you can blame Russia or China, but at the end of the day Hillary couldn’t beat Trump. Just saying.
1
@I Heart Your comment is strange. We all live in the here and now, not two years past. Move on.
1
"true the global economy is sputtering...the stock market is in its worst pullback in a decade...But this sense of gloom and pessimism has gotten ahead of the facts on the ground, especially concerning the United States economy."
Facts? What, what, what? When have US politicians, and WH Admin "wonks" ever dealt in facts when it comes to how they paint the economy? If its up, the opposing party says its down. When up, the occupiers of the WH oversell and say its the best ever. "Bigliest ever," in the case of this occupier. When down, the WH says its the fault of the other party, or always in the case of Repubs, those "nasty regulations imposed by those Dems."
Those running for office, would typically choose the party lines and say whatever was necessary, to paint the picture of the economy not doing enough for their base, because of the opposing party. Even if the candidates were incumbents and the majority party - they'd spin the numbers in any which way to vilify the oppositions dangers ideas.
The '18 Mids, might have been the first election cycle (in my memory, I'm 55) where the ruling party, during a decent economy and market run, didn't rely on overselling the economic health while running and win on it. Mostly because they had the albatross that is Trump to deal with. (Running scared of the Trumplodites, the Repubs were backed into a corner of their own making.)
I fully expect, with Trump unleashed (Mulvany as leash? Lol) - the missteps will grow exponentially.
2
Although conventional wisdom says hold tight and never sell into a down market, I struggle every day to not liquidate and preserve what capital I have left. I’m a nervous wreck. I was watching CNBC a few day ago and all the commentators were in a tizzy.
I’m way too old to recover if this goes on another few weeks.
Worst Christmas of my life.
1
We are headed for a market crisis worse than we saw in 2008. Crooked, inept leadership from Mnuchin to Trump are largely the reason. Trump's removal would boost the market but the real problem is Republican extremism combined with the longer term effects of the neo-liberal economic policies pursued by both parties since the 1980s.
1
When the claim is made that one man alone can fix everything, and that man is complaining that he is home alone and unhappy, you know you're in trouble. Trump has left the government undermanned because he doesn't trust "the Deep State" that is those competent many who have managed the intricacies of administrative governance. Why not trust them? Too difficult to corrupt, i.e., make "deals." Trump most particularly wants to maintain gate keeper control over everything, to pass through you just have to pay the toll keeper. This simplistic idea applied to a very complex system, human society(ies), may bring the economy low. But try explaining that to Mr. "I, alone" with multiple exclamation points and few points to exclaim.
1
Business people generally prefer a "bad" situation that they understand and can react to over an unknown or unpredictable situation. People can react to "bad". "Unknown"? Not so much. I dislike Trump, a lot, and voted for HRC but I support his pullout in Syria. I think Israel, Turkey, Saudi Arabia, Iran, Russia and Iraq can sort it out there without the heavy hand of the Americans. Our track record in foreign adventures is deplorable.
1
Trump said he’d hire "top, top people" and would fill his administration "with only the best and most serious people."
Serious people, serious trouble.
2
Although one cannot predict the exact economic future these three facts will help determine it.
1-After a boring eight yr run with Obama of steady growth, low inflation, good employment, no recession, an economic downturn was certain as history has taught us in the past no matter who got in as leader.
2-Saddled with an economic incompetent, ego maniac demagogue like Trump, it is starting to look even worse with his trillion dollar corporate welfare hand out to billionaires on the credit card of the average Joe, massive trade wars with no plan that is starting to hurt the economy and stifling common sense immigration that will always hurt the economy.
3-We are saddled with the incompetent for another two yrs. Unless the congress controls him look for the problem to get even worse.
Learn from history or be prepared to repeat its' worst blunders.
3
Who wants to bet members of the trump administration has been selling stock like crazy and the "meeting" with banks was little more than an attempt to gather inside information to see if the financial sector is going to crash again?
3
The absurdity of our Fed or indeed of any other entity trying to "intervene" in something as nebulous as the epiphenomenon we loosely term "economy" is jawdropping in its arrogance. The very failure on the part of the Fed and other gubernatorial economic entites to apprehend that their interventions and initiatives are as meaningless as if they all sat solemnly in theri pompous meetings and blew soap bubbles...and what a scam they perpetrate on the taxpayers to pretend at some level that they may somehow effect any changes...
2
"At a crucial juncture in October 2008, finance ministers of the Group of 20 major economies issued a statement at a meeting in Washington in which they “committed to using all the economic and financial tools to assure the stability and well functioning of financial markets”
Actually, it was TARP I and then TARP II (Troubled Asset Relief Program), passed by Congress in October of 2008 that turned around the markets. TARP 1 essentially paid off institutions around the world that insurance giant AIG couldn't while TARP 2 provided the traction to get the markets moving again in March of 2009.
Donald J. Trump is sabotaging the markets because he is ignorant when it comes to economics. Trump's goal is to maintain the adulation of his 95% (ers) and echo the inaccuracies of his advisors at FOX News. To this day, Trump has not proven that he is a legitimate billionaire because he is, in fact, a pauper with a huge debt/equity gap; emphasis on debt.
Munchkin is cobbling away at tanking the markets so he and his buddies can scoop up stocks and securities at bargain basement prices with no concern for the millions of small investors who are being slaughtered economically. Great tag team.
2
It is time the Media report facts and not opinion. US economy is not strong in a long term view. It is taking on over a trillion in debt. If a person increased their debt ratio while reducing his/her income would you say that was good? NO. Economists are forecasting a 2019 GDP of around 2.5% or less which is less than the forecasted need for tax cuts. Wage growth equals inflation growth. The entire 2018 economic growth was fueled by destructive tax cuts that pumped 1 trillion into economy. Those cuts are gone. It is documented that Corporation invested in stock buy backs and not equipment. Full employment only shows that economy has peaked. No room for growth. No new workers. Retirees equal New workers. Not healthy. It is time NYT report an honest picture of this economy. It is a house of cards. Stop being a tool of Wall Street. The stock market is forward looking. Smart money knows the party is over.
1
We have everything to fear including fear itself.
3
The economy is not a bestial abomination that sometimes escapes its terrified masters and runs amok. Rather, it is a direct reflection of the human psyche that meticulously engineered it and controls it, mostly to be a top down model of exploitation that feeds the rich while the poor suffer as they must. The Invisible Hand is a myth, the wealth of nations predicated by the obvious actions of both, highly visible, hands steered by the minds of men as they manipulate keyboards to the gain or detriment of the rest of us. The markets, as a result, are reactionary and opportunistic, taking their cue from inspirations and excuses to react to opportunities. Trump and Mnuchin have just, quite consciously, provided another.
When the markets crashed in 2008, the Dow was hot at around 10,000 points. In 2018, it is at critical mass hovering near 25,000. The dire danger is that the hands and minds who moulded 2008 are still the same ones in charge in 2018. No one learned anything from a decade ago except how to react again at an opportune moment. Capitalism is predatory, for every winner, sometimes many losers, and this is why it cries out for stern regulation.
Trump needs a diversion: his presidency is teetering on the abyss. It is an obvious time to create a crisis for a man bereft of conscience and inured to consequences. There are those in the financial sector who see these traits as positive factors in the creation of wealth.
Merry Christmas to one and all.....
1
re "... poor leadership converts moderate economic shocks into a crisis."
trump insists "The only problem our economy has is the Fed". Really? How about tariffs imposed willy nilly without fore thought? Or government shut downs over a wall that Mexico won’t pay for? Or a ballooning federal deficit because of tax cuts that aren’t paying for themselves? Or a complete disfunction and utter chaos in the WH? This nonesensical twitterlng about firing the chairman of the Federal Reserve doesn’t help either.
3
Well let's look at the resume of our leader---I see numerous bankruptcies, a credit score of 0, a do not lend notice from all NY banks, investments in Russia and Saudi Arabia..what could go wrong.
6
It would help if people stopped confusing 'the economy' with 'the stock market.' Including the people in high office.
Neil: You are, in my eyes, one of the best economic commentators in the business. But, here you are sounding like a return to a 1980s reality. Everything is world macro - a giant equation - and what we are seeing now is an almost certain world recession or even crash when we do ALL the math. DTJ is an accelerator; the destabilizing spark. The only chance of saving the whole game would be to jettison DJT (restore confidence) so that the system could restabilize. Then policies could be enacted that, over time, would be helpful. But we are frozen in our tracks politically. Congress is deadlocked. Rats are running for the exits. DJT is mentally ill and no one wants to deal with that either. Paul Krugman was correct re "The Trump Effect on economics." He was just a bit early - econ is like that, never can predict the exact timing. But the reality ultimately comes home. This is just a replay of everything DJT has ever done and the Americans were incredible saps to fall for his con.
1
What about the 25th Amendment? Maybe Mattis and the disaffected generals could lead the charge. Let’s see Nancy Pelosi as the next POTUS.
1
Are there still people who believe in stock-market predictions?
The only truth are the words attributed to J. P. Morgan about the stock prices, "They will fluctuate".
Be a believer in life as Eternal Struggle of Good and Evil, grind the teeth, gripe, grin, and pray when things go wrong for you.
Since Trump never learned a thing after five bankruptcies, there is no hope he will do any better in this instance.
2
Hmmm, I wonder why people are being pessimistic? What could it be that gives that feeling of impending doom? How did we get this sense of chaos everywhere?
Oh. Duh.
Trump
2
Don’t say Washington’s missteps. That sounds like Trump talk. (Washington, the swamp, the politicians...)
It’s not “Washington”: it’s solely Trump and the GOPs missteps.
3
Is it possible that Trump, Mnuchin and the president's other enablers and underwriters are making money on this financial disaster?
5
Thank you, voice of reason. We need more of you to step up and be heard.
1
Trump as a candidate said we would be winning so much that we'd be sick of it. I'm officially sick of winning.
1
The economy is starting to say what most already knew - we have hit the wall (no pun intended) because of our POTUS' arrogance, ignorance and completely inept foreign policy. I get sick of hearing what a great business sense he had - laughable as we don't see the tax returns, the clever, smoke and mirror (probably illegal) deals and the $43 million dad gave him to repeatedly bail him out over the course of his faux business career. His omnipotent, riverboat gambler gambits impress few and the chickens are now coming home to roost.
6
Not only are you right, but this article precisely inverts the two sides of this economic coin. It leads with all the positive, but ephemeral, data points, while relegating to space “below the fold” the enormous dangers arising from the criminal mismanagement of the economy by Trump and his appointees. I am one of those “cranks” who has been arguing with my broker for over a year that this Administration’s policies were going to crash the economy. I took some money off the table, but not nearly enough. And to this day, the financial guys who planned to get fat off of Trump’s policy gluttony - joined at the feasting table by the Republican Congress - have yet to admit that while they may have gotten fat from their clients fees, they totally sold out their clients in their failure to warn of the coming crash. And we are barely at the beginning.
3
Given the mediocrity of the members of the Trump Administration, the answer is clear.
1
Contrary to Trump's delusion, the problem is Trump and only Trump: his asinine trade wars with everyone, his irrational unpredictable decision making, and his declining mental health in general, as illustrated by his ever more unhinged tweets. The FED could have skipped the 0.25% interest rate increase, but this was not the underlying cause of the market's volatility and decline. It was all Trump and his generally incompetent cabinet members, e.g., Navarro, etc.
4
There's a cure to the economic worry alright, it's called impeachment and removal from office of the most incompetent president ever to serve (or rather, to have the country serve him). Mnuchin will inspire as much confidence as anyone in the Trump clan, because they are each as incapable of leading as the other.
4
How come when Elon Musk tweeted they asked him to step down as chairman? But not Trump?????
5
Who could have ever imagined that "the best and brightest" would all come from the Island of Misfit toys?
1
I see a slew of foolish comments here. The fact is that we are at the end of a business cycle that also happens to coincide with the onslaught of baby boomer retirement. With or without Trump get ready for a nasty 10-15 years. Blame the orange one if it makes you feel better but what started in q1 of 2018 will start to accelerate. Get ready baby boomers to see your stock portfolios fall by 75% the next years. With or without the orange one...
Trump has bankrupted the country in less time than it took to destroy his casinos, while the republicans stood by and did nothing except vote in judges. How many republicans have a campaign finance problem? I am betting most of them.
2
The economy is good ? For whom? What's missing from the statistics is the following: those who are no longer eligible for unemployment and never found a job, those who are STILL underemployed almost a decade after the Recession, those who were forced to retire early, the effects of stagnant wages and excessive income inequality, the increasing number of bankruptcies (corporate and individual) and the highest credit card debt ever confronted in this country. And this doesn't even include the fact that we have a mentally ill maniac in the WH appointing incompetent self-serving individuals to key positions.....its a House of Cards waiting to fold.....except the cards are the size of a tsunami. G-d help us all.....
3
Maybe we should be grateful (for now, anyway)
that as unsettling as things look at this point in time, it could be worse; the combined incompetence and ignorance between Mnuchin and Trump took this long to wreak this havoc.
And, Trump voters and supporters are likely too dimwitted to care; let alone fully understand what's happening.
1
When you have a kleptocrat being instructed by Fox journalists with no elected authority or knowledge of economics, when the oaf in charge cares more Trump Inc. than the country, and when all the adults supervising the nursery have left, then it’s surely hardly surprising the world has lost confidence, sees the reality of the dangerous future, and the very real threat of war, you will have markets running for the hills. America is beginning to see the Emperor has no clothes and, as a matter of face, not even a brain. An empty vessel directed by Fox on the one hand and Putin on the other. The ignorant “base” may not see it but everyone else does. The irony is that very few of his base have money in the stock market but they are poropimg up a chimpanzee who is ruining it for the rest of the world.
1
I'd forgotten, amid all the sturm und drang at the top, what a liability to decent governance Mnuchin is.
2
Strong for the rich only.
1
Trade wars are the Grinch that stole Xmas.
Trump if he has a strength is that he has common sense, as businessman must be to survive. But not everything in economics involves common sense.
The Keynesian notion that in times of a depression and massive unemployment, and less tax money available the government should go into debt to right the economy is very counter intuitive. That is why the economist who proved it John Maynard Keynes is now revered.
The thing about Trump is he doesn’t get that even if China for the time being is getting the better part of our trading relationship, we still very much benefit by it. Here are a few of the reasons.
First, if Chinese workers are ready to work for less pay than ours, we benefit by letting them do that work and we can do other work.
But the biggest reason of all is that science and technology are producing an entirely new mega nation that is built on artificial intelligence and automation and robots. Cooperation hastens work in that area and means we have a non disgruntled mega nation of slave robots that can help us all.
When we cooperate this brings benefits in everything from medicine, to space exploration, to agriculture for us all. Don’t worry if the benefits are 60/40. That is 40% we are losing as trade wars become the operative word.
The only threat is human over population. IN our country we are not allowed by liberals to discuss it However, right wingers want a winner take all. Hence the voters dilemma.
2
There is no "normal" state of moderate economic growth, or at least such a state has never been sustained. The normal pattern is more or less rapid growth - faster than the long-term average - followed intermittently by rapid decline or crashes. The growth segments of this sawtooth pattern have almost never exceeded the length of the current expansion which started in 2010. There will be another recession sooner or later, whether Irwin and others understand why recessions happen or not. The rational response to this inevitable pattern would be to make plans, both economic and political, for the next recession, understanding that we don't know when it will happen. In particular, what will be the economic legislative proposals of the parties in the next recession? Of course what is likely to happen is more panic reactions, perhaps involving more bailouts depending on which party happens to be in power, if either does have control. Denying that there is danger is not constructive in the long run.
3
The economy is NOT strong. While surface measures appear favorable, Trump and the Republicans have pushed it to a crisis point. With record federal debt and exorbitant federal deficits, real wage growth stagnant or receding and record personal debt, this is NOT a strong economy. This is an economy teetering on the edge, and there is no doubt a downturn or recession (or worse) will occur because of Trump and GOP policies.
17
That record federal debt was created in the Obama years. Shame in Trump & the GOP for not doing anything about it but this problem was not born in 2017. The economy is quite strong. The private sector is the economy - not Washington DC.
We've reached a point in the consumption/production cycle in which a sound government would have paid back the debt taken on in recovery from the last recession. Rather than behave like actual fiscal conservatives, the GOP goosed the economy with more deficit-based stimulus. This pushed unemployment rates even lower to near records lows - the 1968 UER was 3.4%, three-tenths lower than today's value but our population is 64% larger, while our GDP is twenty times larger than it was in 1968.
The same stimulus applied earlier in the cycle would have produced the same results. The GOP couldn't get behind that! It might help the nation but it would worsen their chances at the voting booth.
There's a word for that and it isn't 'patriot'.
14
The stock market is driven by emotion and computers. The real economy is driven by other things. If more jobs exist in the US the economy will improve, not at the same rate all the time. The world economy is less a factor for us because we can produce almost everything we need and buy anything that foreigners do.
2
The global economy is a major factor. The USA cannot produce everything it needs (textiles, electronics etc.) and certainly not at the prices required to sustain inflation rates that have been held low largely because of foreign cheap labor.
3
One thing that could come home to roost in 2019 is the elimination of SALT deductions. It will have a big impact in California and New York where property and state income taxes are high. California’s economic performance is usually a harbinger for the rest of the nation.
6
@Paco I agree those wealthy folks might be paying more federal income taxes, and the subsidy that their state governments get will be reduced.
2
It’s a misconception to think that everyone in NY or California or other blue states are wealthy. There are counties in NJ where property taxes are $20,000 or more. These are based on assessments. Not everyone with high property taxes is rich. People struggle to pay these and the deduction helped. Now the federal government, in order to punish the blue states, is effectively making people suffer unfairly.
What type of government goes out of its way to punish half of the country because the politics of the states they live in? It’s disgusting. The GOP governs in bad faith.
3
@Paco
State property taxes are high in Texas. We are getting hit with the same limitation. Although we have no income taxes, our tax rate on real estate is high.
1
Some perspective: the Dow Jones Industrial Average was 18,000 and change on the day that Trump defeated Clinton; it rose roughly 50% in the two years that followed, despite overwhelming evidence of presidential incompetence and corruption coupled to the assumption of utterly irresponsible levels of national debt in an effort to transfer wealth from the 98% to the 2%.
I ask you? Was that 50% rise in the Dow Jones justified? Was it a reflection of our authentic national mood; or was it instead evidence of an unsustainable bubble in equities once again forming - a bubble that was sure to deflate sooner rather than later, especially with the master of disaster, Donald Trump, at the helm of our ship of state?
https://youtu.be/DjbCNQRiy4A
13
Who - or what - is telling you that "Economy Is Strong"?
Is it so - or do some "official" numbers tell it so?
Are these statistics sustainable? "Holiday sales" are definitely not. (Is it backed by real production statistics?) What when the deficit caused by tax cuts fueling such "flash in the pan" effects is starting to raise significantly in this situation due to shrinking revenues? (Remember: French deficit regarded as "sign of European crisis" in US is just as high as US deficit. Mr. Macron had stopped it in the meantime while Mr.Trump had increased US deficitin this period).
What about US house credits - the source of the 2008 global crisis? What about consumer credits?
Much more questions than answers by the article.
6
@ws And even better are any of these measures accurate. We have an underground economy in some ways that can't be measured, we have some (perhaps many) who are actually unemployed but not counted. We have massive debt among the people for various things, especially for education which in some (or many) cases is for things that are not that valuable (like a liberal arts degree or law).
1
@vulcanalex
Just take the GDP index . GDP is up to 2,x% higher. Fantastic. We all are doing better.
We all? Nope. When, say, gas is higher, rents are higher and cars are higher because of 10 % higher tariffs on steel all consumer prices are also higher and all this is driving GDP 2,x % higher as a result of all these higher prices.
GDP and stock prices of oil companies, real estate corporatios and auto industry will go up then. It´s undeniably shown by all indices: We all must doing better. Hurray!
1
The writer thinks the market technicals are out of sync with the fundamentals of the US economy. But traders don't bet on the past, they bet on the future.
In this case, the fundamentals indicate a worldwide slowdown is in the horizon, and the technicals of stocks are dropping below the closely watched 200 day moving average. When both sync, they will max their bet in a bear market. With Trump in charge, it's easy money !
9
Here's a little perspective for the hand wringers in the media: A similar but far more shocking stock market crash occurred briefly during the Reagan administration on October 19, 1987--Black Monday--when the Dow plunged 22.6% IN ONE DAY!
President Reagan's comment was, "More people are working than ever before in history. Our productivity is up. So is our manufacturing product up. There is no runaway inflation, as there has been in the past...I don’t think anyone should panic because all the economic indicators are solid."
Sounds a lot like today. Fed Chairman Greenspan, speaking at the strong urging of the administration, released a one sentence statement: "The Federal Reserve, consistent with its responsibilities as the nation's central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system."
Just like today. Sometimes the stock market panics, powered by unreasonable fears. Then it comes back.
2
@Micoz In October of 1987, you could essentially buy 10-year Treasuries yielding 9%. What did you think was going to happen when risk free bonds yielded that much? A crash was all but inevitable.
2
@Micoz
Reagan another bad GOP . The latest theory out is when he started deregulating businesses that is when the medical hospital costs started to get out of this world. He had more homeless people in California also. His trickle down fake economic idea was just that a fake and it was proven years later.
5
@Micoz.
No, not “just like today”. 1987 was a response to a perfect storm of international economic events, an accident of weather, and potential war.
This time it’s one incompetent politician subverting confidence in what was once the most powerful nation on the earth, all for self-gratification.
1
How is the economy good in America. Trump is giving billions to welfare aid to the corporations ,rich and farmers since his Tarif war with China is affecting them. The businesses refuse to raise the minimum wage to 15.00 an hour across the country for a livable wage. I recently heard our local Rehoboth Super Giant is only paying 8.50 an hour and you have to wait 3 years to get a health care plan. Don't forget a recent NYT article from Wallstreet that said Trumps recession is coming. The damage to the climate from coal use needs to be included . Every hurricane ,flood ,and tornado takes billions away from profits. The US economy may be strong for the rich 1 percent not for us 99 percent who always struggle more in a GOP lead leadership.
12
I was thrilled yesterday to drive by a train switching yard and see multiple flatbed rail cars loaded with new farm tractors for delivery. That is the economy - not the prognostications of government bureaucrats. US economic data remains strong hence there is a disconnect between the data and market activity. I agree that actions like Mnuchin’s do nothing but cause unease & doubt. Earnings drive markets, not government.
6
Why do we all think the economy looks strong when we have a deficit spending of over 3.9% of GDP in 2018 and an estimated 4.7% in 2019 and most of the deficit spending is not going towards investments that can fuel GDP growth in future years to overcome the deficits?
Investments in clean energy, education and healthcare are key for growth.
However, the same conservatives who are causing this runaway deficit will turn around now and put the brakes on the same investment areas that can foster growth.
We are simply going back to 2000 to 2008 when the GOP took a wrecking ball at the economy and the Dems spent 8 years fixing it and received zero credit!!!
28
@Jay Raju Sure they are!! Investments in health care are an expense, now investments in good health are really investments. Investments in education can be good if they are in areas of need, and not those of little to no need. Investments in clean energy are good when their costs are not due to subsidies, and have actual value.
I've heard it suggested that the negative words by Mnuchin and his associates may be market manipulation, to knock down the market and profit from selling short. That type of action would no doubt be carefully hidden, but manipulation certainly could be done by people in their position to influence markets.
6
@Garlic Toast "I've heard it suggested" ... the source of most fake news on the internet and elsewhere. Who suggested this? The Russians? or the Deep State? Give us a break. We have enough hubris in the Trump administration and the Congress to take economy destroying actions on the grounds of pure ignorance and stupidity. They don't need avarice to goad them.
Market nose dives do not occur necessarily because of problems in the economy, but because of gamblers betting against one another in the roll of the dice.
7
Talk about a self -fulfilling prophesy. This has been Trump's business mantra for decades and it is no wonder why no US banks would loan money to him.
" Confidence" in our economy is a word that has nothing to do with current free market capitalism, it is a complete and utter illogical explanation, that we are forced fed on a daily basis by for the 1% to justify the depletion of wealth away governments, states, cities and town all across our country,
along with tens of millions of working and middle class people, to the plutocrats and multinational corporation.
Now through AI trading the erasure of wealth can now occur in nanoseconds, $1 trillion and counting so far.
The bottom line is that this current economic paradigm is not sustainable nor is it the most logical and effective economic system to move humanity forward in the 21st century.
After Trump's unfunded $2 trillion tax giveaway the wild west is back and there is nothing President Trump can do about it.
Careful what you wished for Mr. President.
26
Trump worries that the Fed will turn him into another Herbert Hoover. The reality is that Hoover, while he was good for the US and Europe during and after WWI, when he ascended to the presidency, he was too focused on the narrow view of what is best for the United States during the start of the Great Depression to be successful. Trump did not even have a “Hoover” level of a favorable an economic reputation from before he declared his candidacy in 2015 (six bankruptcies, hummm...), to say nothing about each president’s real understanding of the economy.
Trump does not need to worry about the Fed turning him into a Hoover. If that happened, it would be an improvement on his economic reputation. In many ways, today seems far too similar to December 1928 for any optimism on my part. I’m just worried that it will not be just a “Black Thursday”, but more like a “Black October” given Trump’s economic acumen.
25
The pessimism is entirely warranted. Business and industry (brexit is an excellent parallel) require time to plan and to know what the rules are moving forward. Good deal or not so great terms are matters business is accustomed to manage - as long as we can plan. We knew Iran’s oil was being cut, so we planned. We knew (like the either last half dozen) the fed was raising rates so we planned. We knew tariffs were going in effect. He agrees to a CR. Then trump decides being unpredictable is best. So he waived certain tariffs - so much for our planning. He waives Iranian oil - so we have glut and billions are lost in options and shale is now stressed. He shows he thinks about destroying the fed. Then he cancels his support for the CR. Mr Trump, you are the cause.
18
It is different this time. The market as we knew it has been broken. There are no longer specialists who would bid for stocks in order to maintain an orderly market. We no longer have the uptick rule so stocks can be pounded down relentlessly. This is all about computers recognizing the weakest stocks and piling on. We may have to close the exchanges if new rules aren't applied.
13
Much of the economy is about confidence in stable government and stable international relations. We are now feeling the true Trump effect.
27
@dave
Hello Dave. Yes, I think nobody understands this better than those of us in Michigan. Everything is international / macro. Virtually all business relies on world-wide enterprise. Cheap labor drives the macro economy - GM et al. Huge "equation" with everything effecting everything. Stability is crucial.
2
@dave Absolutely wrong, the economy is about jobs, income, and having things that the people want to buy. The stock market is about those things somewhat.
The, up to recently most powerful country in the world, has no functioning executive branch. It’s also as yet unquantified how much damage this has already caused, will continue to cause, and even how it will get back to getting a functional government.
Yet we keep saying that because the economy is good so we shouldn’t really worry about this other thing.
Riiiiiight.
21
@Miguel sanchez How foolish, the federal government is in fact functioning, in fact it is functioning too much in some areas.
"The real risk is not that insurmountable challenges knock the economy off course. It is that poor leadership converts moderate economic shocks into a crisis."
I think the phone calls by Steve Mnuchin will go down in the annals of economic history as one of the most bone-headed moves ever.
Didn't the man every study stock market crises in courses in economic history? Didn't he know that expressing anxiety is bound to generate it in the public, as if to say, "we know something you don't?"
From everything I've seen, the recent cratering of the economy has no basis in fundamentals, at least not yet. Nobody is predicting crisis now, perhaps recession in 2020.
But so much of the stock market depends on people's emotions--the administration should be providing a sound, sober analysis of fundamentals, not calling banks to assess their liquidity.
This administration, is the "gang that couldn't shoot straight", coupled with a mean-spirited, selfish egomaniac at the top who wants to make the mess worse by threatening the Chairman of the Fed.
Thanks a bunch, Donald and Steve--you've just added to the panic everyone feels about your actions.
33
@ChristineMcM I agree the phone call was un-needed, and a mistake. But it is just a phone call, basically nothing other than emotion.
@ChristineMcM
He’s not an economist. He’s an investment banker and hedge fund manager and movie producer. He likes playing with other people’s money.
And his boss is a B-list real estate speculator.
What could possibly go wrong?
3
The FED has done a great job of helping the economy recover from the Great Recession despite incorrect criticism from the likes of CNBC's Rick Santelli and now Trump.
I have a lot of faith in Jay Powell but he is going to have to learn to be more careful in some of the things he says.
The FED just needs to keep on following the data and acting accordingly and ignore the uninformed remarks of the President who goes by feel instead of reading & studying.
16
@Bob in Pennsyltucky
First, let's make clear that if we want to make changes in the the Fed operates, it should be done with deliberative debate in Congress, not by tweet from the Oval Office.
I will also agree that under the assumptions that the Fed has been operating under for decades, they did at least help get the economy back to where it was before the Great Recession in less than 10 years.
But, considering the amount of new money they gave away global banks to get to where we are, it was extremely inefficient.
Quantitative Easing II lent out over $19 trillion and bought trillions in junk Collateralized Debt Obligations at face value.
Under this program the Federal Reserve gave away about $3 trillion NET in new money to global banks, who proceeded to not invest it in the U.S. economy, while they waited for demand to come back (which they openly said), even though the whole point was to increase demand.
$3 trillion divided equally among all citizens comes to $9,000 each, or $36,000 for a family of four.
If the Fed had given that money directly to each citizen, it would have created demand far more efficiently, because most people would have either bought stuff directly, or paid down, mortgage, health, education, or other debt, making them able to spend more of their income on stuff.
A $13 trillion injection of cash on the demand side of the economy would have meant rapidly decreasing inventories, which would have been met by rapidly increasing production!
FED REFORM
1
He doesn't read. he goes by his gut .....and it's a big one.
Why are some commenter's mentioning "Trump tariffs" as part of the "crisis of confidence" when Congress has the "express power" to impose tariffs and regulate trade?
The real danger is misguided information....
5
@MDCooks8
The legislative branch long ago gave the executive branch authorization to conduct trade negotiations and levy tariffs.
The Department of Commerce and Office of the United States Trade Representative have legal authorization to impose tariffs when ordered to do so by the president.
So while you can argue that the legislative branch is indirectly responsible for giving away its power to the executive branch (although in general the whole point of the executive is to put laws into action), it is not responsible for the recent decisions to impose tariffs on our trading partners.
These are indeed "Trump Tariffs," because they were his idea and he ordered them, and they were implemented under his authority.
2
@MDCooks8, maybe you're the one who's misguided? Yes, Congress could castrate Trump and future presidents on tariffs, but the same laws are in force now as they have been for multiple presidents, and this one is the only one who's gone rogue, unilaterally.
@MDCooks8 - Not exactly. "Mr. Trump has used Section 232 to impose tariffs on foreign steel and aluminum after a Commerce Department investigation determined the metals pose a threat to national security by degrading the American industrial base"
https://www.nytimes.com/2018/12/19/us/politics/trump-national-security-tariffs.html
"It is true that the global economy is sputtering, and that the stock market is in its worst pullback in a decade, with the Standard & Poor’s 500 index down more than 19 percent since Sept. 20 as of Monday’s close. But this sense of gloom and pessimism has gotten ahead of the facts on the ground, especially concerning the United States economy."
A question concerning the stock market should be who are the investors behind the recent sell off; are these wealthy investors, institutional investors or the average Joe?
14
Finally someone mentions the "average Joe" (and Judy). So many of these comments, such as the "stress" on options , affect only the top 10-15%, not so much the med tech or warehouse staff. More educated than me on these matters, I do learn from comments like we see here. Still, more than a few folks would call some of the narrower concerns a "first word problem. "
1
@MDCooks8 Good point, but I bet nobody knows except it is not the average Joe, they don't own stocks enough to do this.
@MDCooks8
The big players always get out first. That is how they turn the money of panicked small investors (who should be waiting not selling) into their money.
Most small investors don't profit from volatility because most small investors cannot keep up with short term movements, and shouldn't try.
But many do try, and they are extremely vulnerable to being out maneuvered by computerized trading, and manipulations by big investors.
In the panicked sell off after the Great Recession, many small investors got out after the market had already dropped.
The big investors had already sold and were holding cash (or bidding up commodities (which indirectly caused the Arab Spring, btw.)
Then they buy back at a discount.
The big investors know that they can create bubbles, pop them, and use that movement to transfer wealth to them from small investors.
The global banks created a massive real estate bubble based on fraud at every level of the mortgage industry, from liar loans to AAA rated junk Collateralized Debt Obligations, then popped the bubble and profited from the panic they caused. Then they were not prosecuted, but rewarded by the Federal Reserve with near zero interest loans, and the purchase of their junk securities at face value, NETTING then another $3 trillion in free money. (That cost American citizens $9,000 each, or $36,000 for a family of four.)
Trump is a shock generator making it even easier for global invested to steal.
Market manipulation is not free.
1
Yes, the economy is still strong, historically so. That's why it's so odd to see intelligent partisan Democrats making the classic error of conflating the economy with the stock markets. When the various financial markets were in a boom cycle, partisan Democrats were quick to point out to a boasting Trump that markets are not economies. So what changed as the markets made a long-predicted correction? Could it be that partisan Democrats are doing what partisans always do -- arguing from emotion and bias, not objective reality?
8
No.
But it could be that they’re saying what this excellent article is.
And I’ll add that your insistence on blaming Democrats for what Trump’s clearly done is the sort of refusal of reality that is a big chunk of the current oroblem.
32
@Ed L.
This is one "intelligent partisan" voicing concern that much of his accumulated savings (pension AND 401) are in the control of Groucho and his brothers who are below decks "disrupting" with no one on the bridge as we sail into troubled seas.
1
@Ed L. As I recall Trump is the one has been boasting and taking full credit for the rising bull market, all while explicitly touting them as the measure of his economy. So why now would he not get the blame when they are in freefall? Tariffs, Tax cuts for the wealthy, unstable leadership and absolute corruption, all on Trump. You don’t get to have it both ways.
5
We keep being told that 70% of the U.S. economy is the "consumer". Most consumers are appreciating employment (if they want to work), lower energy costs in 2018 (gasoline prices are down about 10%), relatively low interest rates to purchase a car or a home... Since the dollar is strong relative to a basket of currencies and the U.S. maintains a trade deficit with China, Japan, South Korea, the E.U., Mexico ... and the consumer consumes all these imported products with more spending money (tax cuts, lower gasoline prices, full employment, moderate wage growth)... then why is the stock market behaving as if there is a major recession anticipated for 2019?
The U.S. consumer has no VAT (unlike all other OECD nations -- average is 19.3% BTW) and has always enjoyed the cheapest, minimally taxed access to goods (regardless if sourced from a country that has no child labor laws or environmental requirements). Now the U.S. consumer is facing some increases for some goods as the tariffs wind through the supply chain. But what about 2019? Isn't there a new trade agreement with Mexico and Canada? Everyone kept tooting that North America represented an enormous component of American trade. That trade pact now goes to Congress in 2019 for ratification. Will they vote for or against increasing trade with Mexico and Canada?
As U.S. pulls out of Syria and Afghanistan this could save taxpayers almost $50 billion/year and less troops being killed or injured too.
5
@Stephen Orr
The problem is that we have been moving income away from the American Consumer for forty years, and giving it to the owners of capital. Profits are at record highs, and the .1% owns more than half of the entire world's wealth.
The unemployment number hides the fact that over forty years many Americans have been losing steady high paying jobs with benefits and pensions, and replacing them with work in the "gig" economy, with no steady hours, benefits, or pension. You cannot replace a union job in a car factory with driving Under, and call it even.
Despite, a recent, small boost in pay at the bottom, (probably mostly created by higher minimum wages forced by the left) the real incomes of workers is essentially flat for forty years, while the owned of capital have kept all of the gains in productivity for themselves.
The workers are the consumers and consumer spending IS 70% of the economy. The centralization of the world economy under the global billionaires, and their ability to legally bribe politicians to put their interests ahead of We the People, is a long term drag on the economy.
We had higher growth under stagflation than under supply side economics!
If you don't believe me, Google the data and do the math.
When the top tax rate was 70% and the corporate rate was 50%, average growth was 3.51%. After decades of tax cuts and deregulation, average growth is 2%, which is 40% lower.
Recent tax cuts for the rich will make it worse, not better.
2
@Stephen Orr
Why? Because the stock market history suggests a mild recession is expected soon, speculators trade on confidence, and the actions of absolute beginners Trump and Mnuchin are sending confidence down the loo.
1
@Stephen Orr re: "then why is the stock market behaving as if there is a major recession anticipated for 2019?"
There is a massive debt bubble, here and elsewhere, that is likely to pop (whether you want to blame the Fed, or the borrowers who got in over their heads, is up to you).
re: "As U.S. pulls out of Syria and Afghanistan this could save taxpayers almost $50 billion/year and less troops being killed or injured too. "
This 'windfall' will be squandered on another tax break for the wealthy and corporations (at least if the Republicans have their say). Count on it; rational people see it coming.
2
In spite of slowdown in the world economy and overall slide in the stock and asset markets the US economy is relatively doing well maintaining its steady growth momentum. However, things might change if Trump continues to spoil the party with his usual policy flip-flops and misplaced priorities of development., specially on trade and environment fronts.
17
Excellent article!
Mnuchin's braggadocio, re calling Money Center banks to ask about their liquidity, backfired in spectacular fashion. It is difficult to believe a Treasury Secretary undermined market confidence in such a blatant and obvious way. Is it possible Mnuchin does not understand 'market liquidity' is the lynchpin in stock AND bond markets and to suggest lack of same immediately injects uncertainty in an already technically weakened market? Given his career, the answer is NO. Something else is going on here. Congress needs to exam portfolios of Mnuchin, his wife, relatives, acquaintances...including Trump. Market manipulation for profit is HIGHLY plausible in this administration.
64
The market, even when certain fundamentals are askew, as was the case in 2008, is driven by the desire for gain or the fear of loss. For example, a 10% point loss in value can become a 15% point loss, the extra 5% driven by fear based on non-fundamental (sensible) elements. This direction can become geometric when you add multiple players whose combined actions accelerate the trend. Add an overall lack of confidence in government leadership and the market move can be greater. Many fear the current occupant of 1600 Pennsylvania's access to the "red button" a major concern. Definitely a concern. But we also see a more realistic concern is the PONTUS's inability to lead, both personally and in choosing his managers. Without this confidence the current dip might be very precipitous. Whatever your politics, imagine what might have happened in 2008 if President Bush A) not provided careful and targeted communications regarding the market behavior, B) had not appointed good leadership in the Treasury and other key posts, C) had not listened and been willing to be guided by these leader's advice, and D) had not been willing to go even against his own party leaders to craft a political coalition. Who knows what the bottom will be for this current market movement? And it is this question which helps drive the movement. A circular and self fulfilling fear.
11
@JRR Can we imagine if GWB had not invaded Iraq.
Much like in 1929 and 2008, a so-called vibrant economy sits atop a house of cards that was built atop a HUGE pile of debt at all levels from college students to Fortune 500 companies to sovereign countries. Keep whistling while you pass the graveyard, but that pile of debt is smoldering and when it ignites, there will be an inferno. Unfortunately, we do not have the leadership to respond like we did in 2009.
52
@Mister Ed
Agree with everything, except for the last sentence.
The response of the "leadership" we had in 2009 is what built the house of cards that is now collapsing, and created the mountain of tinder that is about to become an inferno.
@Mister Ed You mean like cash for clunkers, shovel ready projects, bribes to your friends, saving GM to help your union friends, and many other ineffective actions by Obama?
@TB Agree except it is not collapsing, and there is no "inferno" either. Just overly emotional reactions to whatever you don't like.
From 1951-1975 the average annual increase in GDP was 3.78%, the national debt grew on average measured by the GDP was 1.13%. Rather simplistic look at this it took just 30 cents of new debt to obtain $1 in new growth. From 1976-2000 the average annual increase in GDP was 3.46%, the national debt grew on average measured by the GDP was 4.05%. It took $1.17 in new debt to obtain $1 in new growth. From 2001-2018 the average annual increase in GDP was 1.98%, the national debt grew on average measured by GDP was 5.72%. It now takes $2.89 on new debt to grow the economy by $1. Since 2001 the national debt has grown from $5.8 trillion or 55% of GDP to $21.5 trillion or just over 104% of GDP (Sept 30th, 2018). Since 2001 no President, nor political party or Congress has been able to grow the economy faster than the growth in the national debt. America's greatness was from 1951-1975, we are not on the right path.
51
I am, by nature, an optimist. That said, I cannot think that either the markets or the economy will become or remain stable under constant threat that the occupant of the White House and his sycophants can throw the country (or even world) into chaos at any moment either out of sheer ignorance or in a fit of pique.
61
Trump's entire strategy revolves around flooding the basement to distract everyone, each time it becomes obvious that he has also set the house on fire. Unprecedented, and unpresidented.
56
The stock market has been trading at ultra high levels, and needs to drop even further, just to bring a little sanity to the values.
7
@Bill Barbour: If you look at valuations today, especially indexed to the present still low interest rates, valuations are not high. The problem is Trump.
21
@Eva
You are on target. The market has a 15 PE which is very low.
president hoover put tariffs on foreign products. same thing is happening now. perhaps the interest rates shouldn't have been raised right at this time. they should have been raising them all along to avoid inflation. growth is slowing. if they had raised them in November the one quarter percent that would have made people calmer instead of raising them right before Christmas.
posting on twitter he wants to fire the fed doesn't help. it has to be for cause. so unless P is a cannibal and has uneaten people in his basement that is not going to happen. there is a board of governors that has to remove the fed head for cause.
2
Rates reflect profitability which is high in financial sectors. Or the cost of money capital, the Fed only acts to confirm a trend that no single individual can control. Non financial corporations is other story. Almost half of it is BBB and further increases may topple many of them. World markets are slowing, so tariffs only reflect the narrow and selfish vision of those who see phenomena from their own little corner. But it has negligible effects as studied ad nausea. The thing is seemingly healthy from a very narrow vision stand point. The whole thing is full of contradictions which may result in recession or correction going back to the normal and stagnant situation of the post 2008 crash. There’s also the possibility that things become worse than the rosy outcome posed by Irwin.
4
@jennifer t. schultz So you actually think that the world economy today is similar to way back then? How foolish!!!
Market pricing of equities is driven as much by psychosocial perceptions of future performance as by business fundamentals.
When broad market indices, such as the Dow, S&P and Nasdaq rise and/ or fall with generally the same shaped curves mass psychology rather than fundamentals are driving valuations.
Jerome Powell and the Fed have said as much.
Further, early in the process speculators attempted to profit by buying and selling market swings. Paradoxically the sustained general downward trend in a thinly traded market will hopefully mitigate that influence.
That said, uncertainty and the psychological fear uncertainty breeds ultimately leads to investor caution and incentive to remove capital from a perceived market at risk. As this article and Mr Powell have opined market performance in and of itself may not necessarily reflect actual economic conditions.
However over the long term chronic levels of uncertainty driven by a continuous drum beat of pessimism across mainstream media can lead to self fulfilling prophecy.
15
Value and price are different although they may coincide briefly and rarely. Price is the phenomenon of markets, value is the essence of production by human labor. The former visible and empirical, the latter has to be found through the congruent concept. Political economy gets bogged down in the empirical evidence with little skill on the conceptual essence, which true to its nature is dialectic and changing. Only someone trained in this Hegelian art can capture the moving complexity.
4
@Enri Yep. Just like a stopped clock, right for two minutes every 24 hours. Fool to plan the rest of your day based on the clock saying noon if the sun is about to set.
Mr. Irwin, you are over complicating the situation. The market is falling for 2 reasons. 1.) Stocks became overpriced because the tax cut did not super charge the economy. 2.) It is hard to see a reason that the economy can continue to expand much for the next 2-3 years.
16
Stocks have been overpriced for quite a while, if one takes the Shiller PE ratio seriously. When it's this high, it doesn't take much of a perturbation to precipitate a fall.
1
The economy may be great but everyone is a nervous wreck and going broke, except the 1%
I don’t see how we, as a society are going to avoid the conversation of a redistribution of the wealth in this country.
We are, after all, a consumer driven economy, and the consumer is the 99%
112
@New World I think your point here is really good. We are measuring our economy primarily on the unemployment %. While important it is not the bellweather that it once was because the jobs are more often service industry, entry level, low paying gigs. Not careers. Consequently consumer confidence is not high when only the - I would argue top 10%, not just the 1% - are benefiting and 90% are struggling still.
7
@New World
Hopefully it is a conversation, the cooler heads prevailing. Imagine Warren Buffet, Bernie Sanders, Ocasio-Cortez, and maybe a couple really smart, geeky high-schoolers off in a retreat with the assigned task of drawing the master plan. Imagine a really wonderful Christmas gift—the powers that be putting the plan into practice.
4
@New World They are?? I don't know any 1% folks and all I know have jobs and are optimistic about the future.
Mnunchin was probably just trying to cover himself avoiding criticism regarding being in Mexico while this stock market meltdown was underway. He calls the banks with a made up need of reassurance, the information is released to the media and it looks like he’s working rather than playing at a resort. Just like all Trump people he’s so full of himself he missed the fact that the general public was more concerned about the stock market and financial system than where the Treasury Secretary was playing at the time. As they say in the financial world, his usefulness in the situation had already been discounted and “baked in”.
46
@John Neff
Another unqualified Trump appointee messing this up...
The analogy is a top health official called pharmaceutical companies and assured the public there was enough vaccine.
What is the epidemic?
30
Stop talking about how great the economy is. Only the wealthy are doing good. The rest of us have a stagnant incomes, work two jobs to pay for food, college, healthcare and rent or mortgage.
150
@RMB Well... the economy appears to be going strong for the people who pay for advertisements. That is, sadly, what matters to many.
7
@RMB I am retired and not that wealthy. Sure my income is not increasing, but my expenses are not either. I don't work any jobs, I would like to do so. I don't go to college, and really nobody has to do that. I don't have a mortgage, I do have house expenses. Of course I don't pay for health care, but rather insurance, having Medicare helps a lot. My food bill is lower as I get rid of some stuff I should not eat. I bet many are in as good or better shape, yet not wealthy.
@RMB
You speak for everyone ("the rest of us") when you claim that the majority of Americans are working two jobs to make ends meet? I would reply that, like Trump, you have a casual relationship with facts of reality.
I am disappointed in the New York Times. The only way anyone can define the economy as being strong.is by taking the short view.
Our infrastructure is in bad repair. In a relatively short time period our allies have concluded we can no longer be the guiding light for democracy and working with allies. The country is fractured between the haves and have nots and you say we are in good shape.
Our financial debts are mounting. China is gaining on us every day. Europeon leaders are ignoring us.
Whatever you are drinking pass it on to your readers. please NYT don't lose your sense of reality.
83
Two things are happening at once. Trump debacle based on neoliberal idiocy. And a growth spurt that is incremental and only now revving up. Soon energy will be manifestly free and prosperity manifestly available to all. The the adjustment will be done no matter what. The present economy, its premises about society and civilization is over. A better day beckons.
7
Wooden. It's the only description to characterize Mnuchin, he's as stiff as a Russian carved figurine.
30
@Martin X
Most likely friends of ztrumo and Mnuchin are profiting from the fall for Mnuchin statement that he was asking the banks for their cash flow during a market Rout added to speculation that all was not wellZ
1
It is not the economy, stupid. It is trump and his merry band of scrooges.
Every time he tweets or opens his mouth to spew falsehoods and hatreds the markets go down, the nation's pride and greatness diminishes, civility evaporates, hatred and division intensifies, wealth becomes more corrupt and the environment that cares for us is destroyed.
Happy holidays.
70
It’s the trade war stupid!
End the trade war with Canada, EU, Mexico, China and others. Become a responsible member of WTO again. And, watch the markets rebound to new highs!
25
@M
Agreed there is a war.
A war that we are losing because we have refused to fight back.
A war that we can't win by fighting but will lose if we don't and when we lose there will be no tomorrow so we need to fight back if we want to have a future.
2
@lucky. Equity in trade is as important as in person-person relationships. The US trade is like its healthcare system pricing - those who can fight [ie have good insurance] get ‘reasonable’ care. The rest must pay ‘list price’.
Another example of the US mafia-like rules: Iran had paid for some military goods in 1979, but that deal was never consummated; ie goods not delivered, deposit not returned - finally was ‘refunded’ the $1.7billion [~1.4b was interest]. Similar deal with Pakistan - delivery of some fighters was delayed about 15 years - in which time they were obsolete - yet eventually those planes were transferred to a 3rd country at much lower value.
2
@M Somehow you missed the new deal with Mexico and Canada??? We are working on the EU, and China needs a massive correction. The president is just doing the difficult work nobody else has the guts to even try, as usual.
The economy is strong? I need to have criteria. Huge and growing deficit. Little leeway for the Fed to fight a recession. More and more jobs have wages that don’t allow workers to escape poverty. Even Amazon-The-Great doesn’t pay a living wage at their fulfillment centers (warehouses) for a family. And these are the sought-after jobs. How is this a strong economy?
48
@James Byerly
More and more jobs have wages that don’t allow workers to escape poverty? More jobs are supposed to reduce poverty. Is it better there are fewer jobs, and more people on government programs? A living wage is an oxymoron. The FED sees higher wages as inflation waiting to happen. The notion that higher wages cause inflation is old school. We live in a society that is demanding higher wages while policy makers see increases as future indicators. Millions of people enter this country eager to work for lower wages. How can the FED support ‘living wages’ and then use them to forecast inflation at the same time? It can’t. Proactive moves by the FED to stifle growth is what happening. Intentionally slowing growth will lower income growth, increase unemployment, and cause stagnation. People at Amazon make more than the people at Sears and Toys R Us did. Why, when the past has kept incomes low for the last 50 years, is the FED using history to shape our future? If $15 an hour ever became the minimum wage, should the Fed double borrowing rates, or support the companies that need a break to pay their workers?
6
@Jay. You don’t know nuttin and you probably have s stone for a heart. The whole capital system has become corporatized - privatized profit, socialized risk. Wage income taxed at 2x rate of capital income etc.
2
@James Byerly
They also need 3 billion in subsidies in NYC . Very poor political leader all around.
It's time to run this country like a business, not a game show.
If Trump and Mnuchin were CEO and CFO of a real (public) company with real shareholders, the board would be sending them both out on their heels without a severance package for gross malfeasance, not to mention complete ineptitude.
Both of them were born on third base and thought they hit a home run in their private business bubbles. That led them both to magical thinking that they could continue to throw dice and repeatedly come up 7s.
79
Excellent perspective and correct.
11
@GCM The USA is not a corporation and certainly does not need a CEO.
16
@GCM Steve Mnuchhin was on the Sears board...look how great that turned out.
1
One trillion dollar deficit so we could withdraw from Syria, give tax cuts to the wealthy, argue with a moronic executive leader who seems to lie all the time, change his mind, and will not show his past tax statements. It is not credible that we are in this situation. The Treasury Secretary made a huge mistake today like he was taking part in bringing down the stock market. Checking to make sure that the banks were solid in an outlaid fashion. If you do not respect your military and the leadership , while insulting all in your path, there are few left to respect you. If the negotiations fail with China, then all will have been a failure for the stock market might fall by 40%. China may delay a settlement for Trump may be impeached. The stock market will not understand if there is n to a settlement. It may fall another 20%. there are few buyers right now just confusion. Trump should resign and let the control get stable.
22
Markets are trying to find a bottom. Of course they are oversold. Perhaps it will be a give back all the way to November 2016 levels. Powell is following the Bernanke Yellen playbook - that shouldn’t be news. Mnuchin is a rank amateur of a treasury secretary. Meanwhile, the spoiled brat president continues apace with his crew of crackpots and crooks.
35
@George. Markets are NOT oversold; they have been overbought the last 7-9 years. Valuations need to get back to roughly 2012 trend line - dow about 14000, nasdaq about 4000, S&P about1450.
When armies begin marching across borders in the Ukraine, Syria, Iraq, Tibet and other countries and the US response is to stand behind the authoritarians doing the marching, the well researched data of the academics will mean little.
38
Who might have derived financial benefit from this? Is Mnuchin really that foolish to not know the impact of his weekend phone calls to major bank execs, and his subsequent tweet?
25
@Don, I am betting the Trump gang is short the market.
Stop complaining. Everything is going according to Trump's plan to make the ungovernable and broke at home and impotent abroad.
His tariffs, repudiation of the TPP and "renegotiation of NAFTA were not enough, hence his withdrawal from Syria and Afghanistan and this attack on the Fed.
17
@John Goudge; Agreed. The only question is who generated Trump's plan, because he is not capable to do such a thing, for sure.
5
Wall Street was perfectly willing to let Trump do Trump, until it started to hit their bottom line. Seems like Mnuchin was trying to reassure them that the 'grown ups' were still in charge -- and they're not buying it. Now we'll see who REALLY runs this country -- and it ain't Trump, the GOP or the Dems.
20
@Annie; With Mattis gone there are no more grown-ups in Trump's cabinet or WH. Mnuchin is certainly not one, as Trump could not care less about his opinion or advice.
2
@Annie Exactly. When the market is up, we are to believe it is all due to Trump's leadership, yet when it plummets towards Bear territory, he had nothing to do with it.
1
“Shaky”? How about “utterly incompetent, corrupt, and totally off the rails”?
38
Trump will screw this up. He can't stand shutting up long enough to tie his shoes let alone let the markets calm.
17
40% over valuation based on free money, no taxes and stock buybacks is not viable as an economy.
17
@northlander
The Fed has the impossible task of slowing the herd (40% delusion) without causing a stampede in the opposite direction. A very tough job, especially following the tax-cut adrenaline shot of a year ago.
I'm struck by Mr. Irwin's lionization of US government leadership in the 2008 crisis. The truth is that the Bush administration responded long after it was obvious that they had created a monster; they succeeded in not letting that monster destroy the world, and they deserve some credit for it. But not destroying the world is an awful low bar to set for good leadership.
In fact the global ruling class, and especially financiers, has covered itself in bipartisan disgrace over the last 15 years or so. Let's not make the mistake of seeing as our white knights those who almost destroyed the world, but averted that fate at the last minute, however relatively appealing they may seem next to the epic catastrophe of Trump.
25
I'm afraid the munchkin is just not smart. After all, look who hired him. The market is forward looking (unlike the Fed which uses backward looking data and its models) and is trying to tell us something. When he reveals these contacts it only serves to amplify peoples' concerns. Let's try to discern what the market is saying.
14
You can spin this as you like. But the facts are cheap money, QE, and stock buy backs enabled by corporate tax cuts have created a bubble in stocks. And the great unwinding can't be delayed indefinitely.
Add the nagging feeling that a "growing economy" is in fact just enabling ourselves to destroy the planet even faster and inequality continues to rise is any wonder that we're starting to teeter?
25
@Richard Smith. 30-50% further correction/ie reduction/ will bring back to trend line.
CHILDREN
Let a child drive a car and it will crash. Let a child drive the economy and it too will crash. Maybe not today or tomorrow, but soon, and decisively. All those good economic numbers weren’t Trump’s economy, they were an inheritance from Obama’s economy. The Trump tax cut was just a small steroids injection for a one time spike—not even a very big one for the 99%—and have set us up for catastrophic debt in the future. Quite an accomplishment, really: the child crashes the present economy and sets up even worse crashes for the future economy.
All because 60 million Americans threw a temper tantrum when they elected a child in their own image.
58
@H. A. Sappho: Actually, I believe that a rational smart child would do a MUCH better job than Trump has been doping.
America thought they wanted a businessman in charge of the country; his tax cuts were like throwing gasoline on a fire that was already burning, no surprise now the flames are fading. Until the economy is rebalanced with higher pay for people who work, healthcare that isn't a ripoff, and the end of the irresponsible casino culture of Wall Street, we will be seeing more and more economic and social instability. It's time now for progressive leadership that is willing to represent the people, not just business. It's that, or pitchforks.
65
Fox and Friends could be quickly be replaced by Fox and Enemies. The Fox hosts and their multi million dollar investment portfolios have to be way down. Not to mention Rupert Murdoch's net worth.
Oddly, support for Donald Trump seem to be less "enthusiastic" recently.
19
@Sam
I suspect Murdoch and even some Fox friends are on trump's nightly phone call list and know when a big policy tweet is on the way. Some people know more about when to buy and sell stock than the rest of us do.
For the first time in my LIFE I am 100% in muni money markets. The funny part is that the economy is good. Am I wrong?
4
@Scott B. Don’t be too cocky - muni bonds can tank to zero.
As Obama said, Trump does not have the temperament to be president. God help us.
37
This is what happens when the country “hired” a bankruptcy expert.....
30
@Jackyou mean a morally bankrupt bankrupt king
15
Trump and his administration - whatever is left of it - are a complete train wreck.
16
By nature I'm not an alarmist.... but I now fear a nuclear event. It will be wrongfully blamed on some nation (Iran ? NK ?) and then used to justify a reaction....
sumpy CANNOT be trusted... and I believe he will do ANYTHING to forestall his coming day of reckoning... including murdering thousands upon thousands of innocents....
Thanks mitch.... thanks paul...
28
President Trump received a call from NASA during a Christmas party at the white house. He was singing and dancing when he was told that the moon of Jupiter Io is covered with gold.
It is fool's gold composed of Iron and Sulfur.
4
This lunatic needs to go! He should know all about bad golfing. Like so many other things in his life, he can only "win" if he cheats at golf- a well known fact in his golfing circle . He is the cause of the market decline; he has not a single clue how to be a leader.
17
@shep
Do you think elections do not count.
The country voted and Trump won.
If you want him to go you need to defeat him in a election
not demand that he has to go.
You described Mnuchin's move as shaky. A better word would be shady.
24
@Juliana Sadock Savino
AKA The Foreclosure King in CA: Greenspan's home loan policies, shady mortgage brokers, foreclosures which left miles of vacant, run down properties in SoCal, and finally rolling across the country, failed mortgages bundled and sold all over the world. Trump is so tainted he cannot get reputable people to join his Cabinet, Mattis being the most recent example of one fleeing Trump's criminal Administration. D.C. is a small town; gossip will now destroy Trump and those who stay with him. All hope now rests with the very tough, experienced Pelosi to halt his train wreck. She will have a Democratic Congress which holds the purse strings. The "Wall" will be repaired fencing, more high tech observation, and children no longer caged. Immigration policies will have to be addressed; jail terms for low level violations will have to be addressed; for profit prisons and guard training should be addressed. Our criminal justice system appears to have gone off the rails; this is a major social problem.
Sure. And on October 2, Trump economics were preaching, "hop aboard, don't miss out."
Random global stupidity that Trump exacerbates with his need for constant attention and panic/hysteria over his criminal exposure, argue for a world-wide contraction. Tariffs didn't help matters. Tariffs magnified by Trump's retrogressive tax moves that are just now starting to fall into play are going to make it infinitely worse. Note, China cut it's losses on the NYC luxury and commercial hi-end real estate market, with a fire-sale on its positions here.
Real estate, nationally in the priciest markets is entering a recession, propelled in major measure by the 10% tax cap and the reverberations it has put in place.
Trump, stupidly, as usual, thinks he will profit. In the long term there will be tax benefits accruing to the Trumps passive parasite model under the new tax structure. But, longer term, they will go bankrupt, . . . again. Ditto his licensed garbage.
16
This White House is the gang that couldn't shoot straight. Give them anything that is in fair to good shape and they will absolutely trash it, dissemble it, spit on it and ruin it in no time. I hope we all have some money left before Trump sees the exit sign in the oval office in January 2021.
14
Perhaps Mnuchin's problem right now is related to the fact that nearly all of his skilled career staff has stayed home, shut down and shut out leaving solely political hacks and lackeys to to advise him?
Amateur hour.
15
I keep hearing Lewis Rukeyser (PBS Wall Street Week, ca. 1990s) weekly asking his guests to predict when the Dow Jones Industrial Average (DJIA) will hit 10,000. That was on its way up.
If he was still alive I wonder if he would be asking the same question.
How prescient he was about the market reacting to “hair” brains:
“If your money seems to be hair today and gone tomorrow, we’ll try to make it grow back by giving the bald facts on how to get your investments toupee.” Wikipedia.
3
As economic news surely in the foreseeable future there is a responsible way DJT's (victim-in-chief) senseless and irresponsible tweets can be related from a constant front-page obsession to a back page side-bar.
3
Trump's either sincere but unbalanced, or he's just a completely incompetent flimflammer. It's still a tough call.
8
When is the disastrous Mnuchin going to be removed from office, already? He has no concept of how to run the treasury!
11
Is Commerce Secretary, Wilbur Ross, selling stocks short this time around? I wouldn't be surprised. When the dust settles, this administration and their mafiosos need to be called to the carpet and fully investigated.
https://www.nytimes.com/2018/06/19/us/politics/wilbur-ross-shorted-stock.html
15
It’s Bernie Madoff all over again!
6
The Ship of State (Fools?) sails on....skippered by the reality showman, hotelier, and scratch golfer...crewed by his adoring Cabinettiere, including the new, temporary (but aren't they all?) ex-Executive-VP Secretary of Defense, the "Sure, I've Got Your Back, But Do I Really Need to Cover You?" Secretary of Treasury, the just-stepped-down-to-spend-more-time-with-the-prosecutors former Secretary of the Interior, etc., etc.
Sailing in this fashion (adrift from our friends; held close by our enemies; our Captain attending to a Siren Call), we careen from one looming rock to another--and the clever ones among us have stopped our ears with wax, sure, but we haven't lashed ourselves to the mast.
4
I find the behavior of many Bull-Market types strange. They remain convinced that nothing negative will ever happen to the market. This goes against all of the math. Statistically speaking, extreme situations excepted, you should almost always bet on the stock market going down towards a general asymptote that models the growth of the economy over time. It is the only thing that has any grounding in reality. The performance of the stock market tomorrow is pure luck, while the performance in the past is 100% assured.
Furthermore, does anyone else find it strange that the Stock Market does not obey traditional laws of economics? Most markets have a Nash equilibrium, but not the stock market. In the stock market a Nash equilibrium would exist if all stock traders realized that they should just continue to bid up the price of stocks forever, and never short anything. Theoretically this is possible, as the price of a stock is largely disconnected from the performance of a company. Such a Nash equilibrium exists in all other markets, but not the stock market.
Also, is "It is quite a contrast with the 2008 crisis, when the United States government was stocked with highly experienced economic policymakers and a president who trusted their judgment" the NYT equivalent of a 'sick burn' that people keep talking about?
1
Trump is turning into the most incompetent buffoon of a president in history.
16
Mnuchin.
It amazes me that anyone that oily is able to snatch up so many government resources.
6
Trust Mnuchin, he was the producer of Mad Max: Fury Road. You can see we're in good hands.
6
My god! We have an idiot running the Treasury Department! Does he know nothing? Did he learn nothing from the financial crisis.
He just injected concern about the liquidity of the banks - something that strikes horror in the financial community - into the conversation - where there was none before.
It's not just that it was a stupid thing to say. His saying it indicated we have some running the Treasury Dept who can't be trusted and is ignorant.
How scary is that? Cross your fingers that the next financial crisis doesn't come down the pike while Trump and Minuchin are in office.
10
Just one of dozens of imbeciles in this administration that are only in it for self-enrichment/aggrandizement. The next (new) president cannot come fast enough for the safety and well-being of all Americans.
6
He bankrupt Atlantic City. For years he cheated on his taxes. He had to settle by paying millions for his fake university. His foundation has been shut down. Wire fraud money laundering and his other crimes are being investigated. He didn’t shot anyone on 5th Avenue as yet, but when he does the 20 % of the people in middle America who are living on federal aid according to NYT will still vote for him. For them He does nothing wrong. The only time I heard he uses the word “poor” is in a tweet this morning when he referred to him self as “poor me” as if he knows what poor is? Such a con man we have as president, I’m ashamed.
8
The Trump presidency will be compared to Hoover. His legacy is grift, fraud and self dealing
10
Trump can’t even read a 2-pager resignation letter that explicitly calls him out as a moron.
And we are to believe he understands economics? This man who has six bankruptcies? And who squandered millions of dollars in inheritance?
17
Strong? For who?
3
It’s not just skaky leadership. The market “recovery” has largely resulted from artificially low interest rates for an unprecedented period of time. The market is now adjusting to Fed tightening and slowing earnings growth following the corporate tax cuts of 2018. Expect consumer sentiment (and spending) to add further to downside momentum after people check their 401ks and realize they are down 10%+ year-over-year. After 10 years of gains, people are looking for any excuse to sell.
The fact that Trump is unhinged and unpredictable is only accelerating the process.
8
In 2007, we seem to have gone from having a "strong" economy to the start of a severe downturn in about three months - roughly the period between Labor Day and Christmas, with a full-fledged recession underway by spring. With a volatile ignoramus in charge and increasing inequality that leaves more and more working class Americans behind, does anyone seriously believe that it is not likely for the economy to quickly turn negative?
8
It's very simplistic but my thoughts are this is similar to a child who's coming down from a sugar high. The Trump, GOP gift last year to corporations gave the stock market and investors a sugar boost of stock buy backs while not strengthening the economy in any significant way. Now as the reality sets in of paying for that massive giveaway enhanced by Trump's childish actions on the economy and all the other stupid and cruel policies the investment and business communities are reacting like the standard kid who no longer has that sugar boost.
10
Greedy Republicans convinced greedy shareholders to demand a sugar high in the form of massive tax cuts to corporations, instead of being grateful for the moderate growth and strong underpinnings of the economy from 2010-2017. Wages didn’t rise, stockholders profited at the expense of workers and meanwhile, our infrastructure is crumbling, our healthcare costs are soaring, and every profiteer and grifter imaginable is stealing this country blind. Putin has certainly gotten all he paid for.
15
Steven Mnuchin has to go and replaced by a competent person. He is a man who rose to the top by being the son of the right man and st the right time.
Those who know him from GS and after could tell you that he was a mediocre intellect who is opportunistic, unreliable and outright sleazy.
You have all seen him sneering and smirking while satisfying his and his Marie Antoinette in photo ops and free trips to see the eclipse from a close by gold depository (really needed for the sake of the nation and its welfare).
I would recommend bringing back some decent and experienced person like Hank Paulson if it has to be a Republican and an ex-GS.
18
"... he was a mediocre intellect who is opportunistic, unreliable and outright sleazy."
But that's just how the mango man likes his sycophantic yes-men - you know, people just like himself.
8
The idea of a competent trump cabinet member is ludicrous by itself.
6
@Blunt Was he justified in making these calls? CLOs, leveraged loans tanking, shadow banking, high yields jumping, gold rising..... Just sayin.
1
Nothing concerns investors trust and belief like learning the Treasury Secretary Mnuchin has called 6 major banks to seek assurance that their institutions were sufficiently liquid to keep lending to consumers and businesses. Or the president's repeated attacks and scapegoating a Fed Reserve Chairman who is focused on doing his job well. The president's and Sec. Mnuchin's actions are sending shivers to the stock market and banks and investors confidence.
9
Whichever way you look, all the major institutions of this nation are under Trump's relentless attack - national security, intelligence, military, law enforcement, human services, on and on. And now, Trump is poking his dirty finger in to muddle up the pool of stock market. I would not be surprised that Mnuchin and Powell will soon be fired in the new year. Once that idea of firing someone gets into his head, he will act on it sooner and later. When that happens, Trump will single handedly crash the stock market and stall the economy.
11
Like screaming, “There is no fire!” In a smoking theater. (Or a smocking theater.)
8
I have a real bone to pick with the use of a stock photo of Mnuchin in D.C. it gives the false impression that he is in charge in Washington. The reality is that he is on vacation in Cabo San Lucas in Mexico. I mean seriously, he is calling the major banks on the telephone from Mexico. I have no idea if he’s in his bathing suit drinking a mai tai. But let them eat cake!
11
When Trump was elected I cut back on my equity percentage. I made the judgment at that time he was a fool and a grifter. I ask you if he was a CEO of a stock exchange company how long would he last? You don’t have to answer. Politics is one thing and my money is another. Well unfortunately my judgment was right. Maybe we can have a military coup?
6
Except all the generals have left the building and aren’t coming back.
5
Washington? No. Trump and his Republican lackeys? Yes.
6
When you realize that the blimp of leadership is untethered from reality, you look for parachutes. Funny, though, how tax cuts that weren't needed and exploded the deficit were lauded. No problem with an alternative reality then.
9
This doesn't have so much to do with the Fed, but more with the catastrophic decisions by Trump and the Republicans to give such a big tax cut at the current time. You can't fool the markets. They do the math. So the bonds have had to increase their yields, the stock prices will come down (as was predicted already years ago) and thanks to Trump's personal greed and Republican stupidity, the US Treasury will be so broke in two years time that we will all be facing a depression, the likes of which we haven't seen in our lifetime. Seen against the backdrop of where we are likely heading, Powell's and the Fed's decision was the only right thing to do. This sort of math is too hard for most of us, and for Trump it is a book with seven seals. God help us if he fires Powell.
9
Strong economy? Delusion sponsored by America's enemies at home.
5
Why is the title “Washington Missteps “? Wouldn’t “Republican Missteps “, or “Trumpian Missteps” be more accurate, considering how little influence Democrats have had for 2 years? Isn’t this just more nonsensical both-sides-ism?
19
Everyone who has access to some coal should deliver it to the White House tonight and tomorrow!
5
I have confidence in Mnuchin. He is checking banks to be sure all is basically OK. A prudent, responsible move. Uncharacteristic of the Trump team, I suspect. God bless him.
@BlueGoose
Checking with a phone call?
That's called busy work in the real world.
8
“Economy Is Strong. Leadership Is Shaky”.
The understatement is suffocating. There is no leadership. Mnuchin is an incompetent also. Two wrongs (Trump & Mnuchin) do not make a right.
6
Leadership? What leadership?
4
Gee, Republicans driving the economy into a ditch? That never happens!!
6
Steve Mnuchin is a whizbang movie producer. End of story.
3
Perhaps the single most laughable statement in this cheerleading exercise was where all the financial captains of the world got together and claimed to be willing to do anything to save us from the storm. Of course they caused the storm, but forgot to mention that. And despite their proclamations they took we the people down. Yeah their buddies at the corner of Broad and Wall made out, but we the people suffered. (Some still are or are dead) So pardon me if I laugh at this pile of garbage. Funny I used to respect this guy.
5
Think amateur hour. The pros have left the building.
7
The economy is strong!
The unemployment rate is one of history’s lowest. Underemployment is widespread because the jobs are mostly low-paying. Simultaneously, well-paying jobs are vacant for lack of qualified applicants. The reason: Free and almost free, quality education in schools and colleges which welded the immigrants into the mighty American nation were deliberately ignored or trashed by Rightwing ideologues!
The markets are evaporating! The 401-K accounts, the market-friendly replacements for the ‘pensions’ of middle-lower class retirees, are burning --- like the summer fires of California. The Republican Congressmen who abolished Obamacare, the meager healthcare for the working poor, to fund the largest Tax Cuts for the billionaires, are laughing out their guts --- while the POTUS tries to bully the Democrats and the Fed!
“The economy is strong” ---The Treasury Secretary”!
7
Is the economy strong for the majority of America's workers, whose purchasing power has barely changed since 1964? Obviously not.
Is the economy strong for the nearly one-third of Americans living in poverty or near-poverty? I assure you that they don't think it is.
How about the more than 15 million American children who live in "official" (that is, quite extreme) poverty, as determined by our Census Bureau? If they knew what an "economy" is, do you think they would tell you that the one they live in is strong?
To babble about a strong economy in the face of the never-ending struggle that defines the lives of so many of our fellow citizens is simply . . . obscene.
14
For all the data, metrics and computer programs, the stock market still remains like a Woody Allen character: neurotic, self-doubting and constantly driven to wild extremes of joy or fear.
5
Economy is strong? If so, might want to re-examine the metrics of this conclusion. Hard to see anything other than a false narrative that misguides decision making when personal and institutional debt levels are factored in!
4
Republicans protected Trump from himself in the past but now they have completely stepped away and are allowing him to govern on his own-I guess the plan is to let him sink and then after the Mueller report they will impeach him and install Pence. I am sure they have a timeline for this... to coordinate with the next election or perhaps they are now In firm control of the voting machines and it doesn’t matter because they will always win
4
Remember Bear Stearns had around $18 billion of cash on its balance sheet and three days of announcing that on CNBC they where bankrupt. I clearly remember that interview on TV. A run on any bank can lead to insolvency. Any major person with responsibility yells fire altogether will lead to a system failure. This is either a tremendous buying opportunity or the worst Dessert about to happen.
Best regards World
S R
1
Could we finally bury "trickle down" economics? Trump and the GOP dumped $1.6 trillion in tax cuts on an already healthy economy. Guess what happened? Corporations bought their stock back. The 1% bought more real estate. Middle-class jobs and wages barely budged.
7
Since the phrase ‘trickle down’ is an insulting pejorative invented by the Democrats, I favor abandoning it. It never accurately described a free market economy.
@Alan - Yes, the proponents call it "supply side". So what? It still doesn't work for the rest of us.
1
Economy is strong? Tell that to my nest egg. My portfolio is looking very sad indeed.
3
President Donald Trumps shaky leadership and his lack of thought before he makes decisions are the cause of the financial problems.
The investors cannot decide what is going to happen because of the poor decisions of our president.
4
Mnuchin made his call from Cabo. That's reassuring,..yeah. Is he there negotiating with AMLO for the wall payment? Is he coming back? The most important thing to note about the US government is that now that Mr. Trump has a couple years in the job he has gained confidence that he knows what he is doing, so he thinks it is time to kick all the adults out the control room and take the wheel himself. Somehow, I think Mr. Irwin is overly sanguine. I am more concerned about the next two years the last two. How good will the economic future look when Mr. Trump sends a few missiles Iran's way? Or when, to make a name for themselves, the Dems initiate impeachment proceedings without the votes in the Senate to convict? Oh, where is Al Haig when we need him? Did I just write that?
1
The entire premise of this article is absurd.
You still just don't get it.
The economy is not as strong as you think.
What's happening is that the historic and massive asset bubble that those "highly experienced economic policymakers and the president that trusted them" created with their "steady and calm" response to the catastrophic crisis in 2008, which those very same genius policymakers were responsible for in the first place, is finally popping.
Meanwhile the West is imploding as a result of the consequences of an utterly and spectacularly failed decades-long implementation of neoliberal economics, shareholder capitalism, and globalization. Again, the blame rests with the economists, finance ministers, and economic policymakers that collectively built an inherently unstable global economy and financial system.
The house of cards is simply collapsing.
We need a new economic paradigm for the 21st century if we're to avoid a cataclysm.
6
Prices are extremely high. And about-to-retire-boomers are pulling their money out of the market. Who are the buyers at these prices?
2
It's time for good souls wherever they are in government and business to step up and act as the adults. There has been too much child's play lately.
1
NOW is the time to raise the top rates of progressive personal income taxes, raise estate taxes and cut loopholes (R/E, carried interest, etc.) and REDUCE the DEFICIT.
Due to Trump & Republican's insane tax redux and wealth support for the .1% at middle America's expense, we've blow out the budget deficit and national debt. Result: We are woefully unprepared and in poor financial shape to deal w/ the next recession. Way to go... not.
6
Pattern: elect Republicans, we get a downturn!
Then we elect, the Democrats and they have to clean up for the the financial disaster the a Republicans left behind!
Look at the deficit Paul Ryan left behind!
8
OK, so the “unemployment rate” is at a five year low. What about the underemployment rate? What about the job seekers who have given up looking for work, especially the older population? The “unemployment rate” is a cruel joke, designed to pacify - everyone. 2019, Happy New Year? I guess we’ll find out.
4
" The question is which will prove more important, the economic fundamentals or leadership."
The problem is there is no leadership!
There is no leadership in the White House. There is no leadership in Treasury Department. There is no leadership at the Fed.
Furthermore there is no leadership in the Congress.
No economy, no matter how strong can fight those monumental headwinds. Mr. Trump needs to stop tweeting and if there are any adults anywhere in this administration they need to take charge. The sky is not falling but the stock market just ended the day 653 points down.
If there is no restoration of real leadership then look for Hoovervilles coming to cities and communities near you in 2019. Once again Republicans are devastating America. A corrupt, inept and chaotic administration is not a hopeful sign for the new year.
5
I was treated with disdain and was scoffed at when I sounded more than alarmed when this doofus was elected. My so called financial advice was to roll in all your chips, that investing was safe as ever. Now they are concerned about confidence and stability, now!
1
"... the 2008 crisis, when the United States government was stocked with highly experienced economic policymakers and a president who trusted their judgment..."
Yes. The good old days, with "liar loans" and "financial weapons of mass destruction." When we could trust the administration to multi-task (bailing out banks, while throwing families out of their homes) and restore the same rotten economic system that failed. All without so much as messing a hair on the head of the rich how created it.
3
This is sheer, utter incompetence, or it is something much more sinister.
In Steve Mnuchin we have a Secretary of the Treasury who has no idea what he is doing. He fits right in with Donald Trump’s Tariff Boy, Peter Navarro.
But, we also know from the way that Mnuchin and his wife like the good life with executive jets at taxpayer expense and enjoy flashing designer clothes and price tags flapping in the wind, there may be a streak of dishonesty at play.
Are we sure that Mnuchin’s inappropriate and well-publicized calls to financial institutions about liquidity weren’t ordered by some big Republican donors with short positions who want the market to tank temporarily, providing them with windfall profits?
10
When the national security of a nation is in doubt, the financial security of the nation follows. This has nothing to do with with the Feds. This has everything to do with Trump trying to deflect the Flynn court confessions on Tuesday by pulling the troops out (probably after checking in with Hannity overnight) on Wednesday. His attempt to change the subject of the news cycle made the country less safe and less rich. I'm sure he doesn't care and considers his actions a success. Merry 401K cliff dive everyone!
5
It seems that at a certain point, stupid mistakes can be disastrous, if not fatal. Maynard Keynes had the idea that when the economy is strong and expanding, governments should increase taxes to moderate the rate of growth so as to permit an orderly growth and avoid distortions and inflationary bubbles from fomenting. When the economy slows down, the government increases its spending, if necessary, going into deficit, to stimulate the economy and ensure it doesn’t fall into deflation. It made sense to FDR, whose government implemented Keynes ideas and pulled the US out of the Great Depression, maintaining a stable economy for almost a half a century.
Unfortunately Keynes has been supersede by Arthur Laffer and “Supply side economics”.
Now in 2017, while the economy was booming, the supply siders gave themselves a huge tax break, and the country a major deficit. Now in 2019 it looks like the economy is slowing, the recession is on the horizon, and the government has no tools left with which to deal with it.
5
Although Trump and his kitchen cabinet have no idea what economic fundamentals are, they continue to use their uninformed guts to lead the country than attempting to learn what their jobs are about. This is more than shaky leadership, it is a clear lack of leadership and we will pay the price not matter how strong the economic fundamentals are.
2
This is far far worse than I imagined the night my husband gave me the bad news about the election.
Can't anyone doing anything about that man?
1
I usually like Neil Irwin's columns, but this one is not wrong, but too naive. I wouldn't ascribe positive motives to Mnuchin's calls and subsequent tweet without clear evidence. Here is my interpretation: By suggesting that there may have been a problem with banks having enough cash on hand, Mnuchin (at the behest of his Lord and master) alledges that the Federal Reserve had fallen down on one of its key jobs - keeping retail banks solvent. That, logically, then means that Powell is not a competent leader of the Fed. And that undermining of Powell was, I believe, the reason for this reckless and downright stupid move, which has now made the markets even more jittery than they were already. Also, I wouldn't be surprised if this also impacted last minute holiday sales.
5
“…in October 2008, finance ministers of the Group of 20 major economies issued a statement at a meeting in Washington in which they “committed to using all the economic and financial tools to assure the stability and well functioning of financial markets…
In the US, of course, this meant continuing to print one trillion dollars more each year than taken in by taxes, for a couple more presidential terms – while pretending there’d been some enlightened sea change in domestic monetary strategy…
Sort of like the Fed’s Roe v Wade moment…
With each passing year, the approach becomes more and more settled precedent…
Fake news, real news-- I get it. Many don't understand the difference. But can people in this country understand basic timelines? Every time a Democratic president comes and stays in power, he pulls the nation out of a crisis, generally a recession caused by the actions of a Republican president due to his love for war or feuds. Clinton came after HW Bush in 1992 and repaired the damages of Iraq war. He managed to increase the minimum wage and create an economy where people from all strata were able to thrive. Then W Bush came and took the country to war--who benefited? No one but his VP Dick Cheney of Halliburton and it they sent the country back into recession in 2008, at the end of their term. It took Obama 6 years to pull the country out and while Trump could not do much damage in the first two years to the thriving economy, he is now threatening to ruin it. So typical of GOP. As long as they and their cronies are happy--the entire country can be in ruins. But how can you convince the rust belt? They keep voting on religious lines despite the fact that Democrats spend more on social infrastructure and education for their kids. Education as J.D. Vance says, is the only ticket for the midwest to come out of it's grim situation.
7
@APS
Didn't Pence cut a deal with corporations? Low or no corporate taxes. Even so, a lot of jobs went to Mexico; factories closed, some stayed open with engineers, robotics, and some workers. Pence received the princely sum of 7M. How many jobs can Wal-Mart provide? Or The Dollar Stores? How can Main St. survive without small businesses? How does a State finance good public education up through college with reduced revenue? If young workers leave for better job markets, will they return to help rebuild their former communities? Plutocracies never work in favor of those who do not own the means of production, have weak union representation, or no unions at all. This an old story.
Mnunchin wasn’t calling banks to reassure them. He was calling so he can get a job when Trump blames him for the market collapse and fires him.
4
Sounds a little off here. Isn’t investing about the future not the current economy. One doesn’t invest on today’s economy but what one thinks tomorrow’s is going to be. Just because today looks good it doesn’t portend a sunny tomorrow. We all know one horrible event can change everything in a day. That horrible event is sitting in the White House and investors are finally taking note. Soon they will run for the hills.
2
The GOP donor class will only put up with Trump's shenanigans as long as the economy is booming. The moment their bottom line is seriously threatened, congressional Republicans will suddenly grow a spine and move to get rid of him. Do you really think the Kochs, Adelsons, Mercers, etc., will stick with Trump and do nothing if their vast fortunes are at risk?
If the economy eventually does tank, here's what will happen: the Democrats in the House will pass some kind of stimulus bill and House Republicans, egged on by the insane Freedom Caucus, will once again become deficit hawks and vote against it, knowing it will pass on a party-line vote. It'll then go to the Senate, where Susan Collins and a few other swing state senators will defect and join the Democrats to pass it by a thin majority. McConnell will scream about ballooning deficits but he'll let it come to a floor vote, knowing that his masters would cut him off if he stopped the government from stepping in and saving the reckless corporations who just spent $1 trillion on stock buy-backs. Trump, who doesn't read and has no idea what's going on, will reluctantly sign whatever bill hits his desk, setting himself up perfectly to either (a) take the credit when it stabilizes the economy or (b) blame the Democrats if it fails.
The whole thing is like bad theater at this point: utterly predictable and painful to watch.
4
What about the skyrocketing national deficit and US credit rating been in question?
1
The Dunning Kruger effect in full operation: Incompetence does not recognize itself.
1
The markets have reacted to the incompetence and turmoil in the White House that has accelerated in the past month or so. As usual Trump blames anyone and anything but himself. This all was bound to eventually happen when a petulant, childish, intellectually challenged bully sits in the White House. Where this is all going and how it will end up is a difficult thing to predict, even for the 'experts'. Republicans should be very concerned and be ready to do what's necessary and what's right to bring stability back to the Presidency. Impeach. Period.
2
@Yamahama
Impeachment is a long and expensive process; the 25th, "Unfit to Serve" might be possible, depending on what Mueller reports to Congress. Hopefully Mueller hedges his bet by presenting the same report to the NYC AG.
1
Trumps analogy of the Feds as a golf player with a powerful game but no”feel” sums up pretty much of his ignorance and truly lack of understanding of how America’s policies and the effect it has on the world economy works. How any of his supporters think he is a “great” businessman is beyond comprehension as it is self evident that he is clueless in everything. If this is MAGA, it’s not working.
4
Is there a question in this headline?
YES. And the Recession that has been coming for a while, after the steady progress under Obama (though one still built on escalating debt) can only be blamed on Trump and his party of toadies.
How many rats will stay on his sinking ship? Now that is a better question that what is driving this market downturn. The Fed might--might--have cost the indices 1 or 2% but the rest?
Mister Promises Kept. It's his fault and OUR money.
4
"Could make routine economic challenges turn into something worse?" We went past could a long time ago. Trump with his erratic, impulsive, ignorant leadership has sent us on a downward spiral. Stubborn Republican teaparty types and his diehard supporters refuse to see it. Trump has said he wants Powell gone. We've seen this scene before so he will pressure him until he resigns or he outright fires him and Mnuchin's assurances that he won't are hollow.
Jeb Bush put it best, " He is a chaos candidate, He'd be a chaos President." Not that Bush is especially insightful, all anyone had to do was read Trump's record of business failures, multiple bankruptcies, sham businesses, lies, illicit deeds, cheating, and failed marriages.
The Americans that voted for Trump are the same gullible types that throw their money into pyramid schemes, multi-level marketing, waste money on weight loss and reverse aging cures, dreams of instant riches with cryptocurrencies. They all fell prey to thinking that a man who professes to know more than the Generals, had no experience in government,claims to have better instincts than everyone else would lead us to some illusory greatness. The sad thing is the rest of us, the overwhelming majority of Americans who hate this man and see through him shouldn't have to suffer.
2
Trump is exactly as he appears to be, there’s no mystery to it. Here’s hoping that 200 years of history (bad and good) cannot be undone by one man.
3
Mnuchin is a third rate buffoon who would never have been nominated by any prior president for his current position. In fact, I doubt he would have been included in any of the 3,000 positions a president gets to nominate as a political appointee because all prior presidents - regardless of party - were interested in having competent people in their administrations. Trump's ego requires him to focus on subordinates who are not a threat to him in any way - hence the box of broken toys he calls a cabinet. Now that Mattis has departed - there is no one able to run any department in government with any degree of authority and ability. Time to impeach not only Trump but every single one of his appointees and let that robot Pence try to rebuild a government that can limp into the 2020 election.
4
Wow! you just completely missed the point. Putin has come that much closer to toppling the capitalist free market global economy. His success with Brexit and installing a incompetent puppet in as the chief executive of the country at the center of a rules based global free market has created immense risk to global markets. Trump is not only unwilling to support the values that have brought so much prosperity to so many, he is openly opposed to them.The world is hurtling toward nationalist dictatorships instead of free democracies. Strongmen not shareholders will reap whatever profits are left in an increasingly corrupt, inefficient,and rapidly shrinking global economy
4
If this is what winning feels like, Trump is right. I am tired of it.
4
There is no plan, understanding, conceptualization or historical knowledge utilized or consulted before engaging anyone let alone corporate executives about the economy and the associated chaos. Surprised Mnuchin didn’t send viral dollar bill photo of himself and wife to further inflame the situation. Logically the corporate executives should have contacted Trump/Mnuchin if concerned, and not vice versa. Mnunchin called while on vacation in Cabo causing further consternation that there was something untold that the administration is concerned about. Guess last two is a "Holiday present" to the world. Happy Holidays!
1
50K of my pension gone in 4 weeks. This is what will ruin Trump, when people start realizing how his dysfunction and incompetence are impacting their finances. Thank goodness I’m ~25 years from retirement.
3
To me the biggest issue is, although we have a strong economy now, there will be shocks, some of which we will know and some of which we cannot anticipate.
And the leader ship we have in Washington is Bteam at best and thin as irwin states accurately. That combined with fractured international Goodwill, treaties, cooperation, will make it effective coordinated response infinitely less likely when it’s really needed, which is not now but it will come
Some day we’re going to need the Yankees of the early 2000’s in DC and what we got Now is single A oneonta
3
I'd be wiling to bet 1/2 my retirement portfolio that the "very stable genius" in the White House instructed Mnuchin to call the banks, thinking it would spur the economy.
3
Economic stability requires sound analysis and responses to the variables that direct the economy. When does anyone hear the term “stability” and “Trump” in the same sentence.
1
See dreams and wishes do come true. This is exactly what the NYT and their esteemed Editorial Board have been hoping for, for the last two years. Patience is the skeleton key to everything. Merry Christmas!
The economy is NOT strong. Trump is sacrificing everything for short term profits and gifts to his loyalists. The future is an ecological disaster, an outrageously high deficit and ultimately the destruction of the US.
The only thing standing between the US and a homegrown disaster created by a madman is the fed, all other adults have left the room...isn’t that correct you corrupt senators and corrupt supreme court justices?
1
I agree with the fundamental tenant of this article that: the conomy's worst enemy might just be Trump and his incompetent gang. However, not all is great. Cherry-picking statistics is misleading and dishonest.
The big issue is that the jobless claims says nothing about the quality of jobs (low-paying with no future or professions) or regional/age/education stresses that is part of what created the hopelessness spurring the opioid crisis.
Mnuchin's calls demonstrate his utter lack of understanding about his job. His ignorant stunt could have led to a banking industry catastrophe and warrants being summarily fired. Unfortunately, there are no adults left in the administration.
1
We are due for a pull-back, but the clown car that is this administration could transform that into a full-blown recession. Trump, who laid claim to the Dow's rise, is now in need of somebody to blame because nothing bad could ever be his fault; so the the Fed Chair is the target of the week. Mnuchin goes around asking the ship's captains if they have enough life vests. Meanwhile, some serious indicators are starting to slip. Are we great yet?
1
When arrogance collides with ignorance, as they have with a kind of fearful symmetry not seen in any president of recent times, we need to sharpen our scythes, light our torches, ready our tumbrels, and march on 1600 Pennsylvania Avenue -- just as soon as the resident--I can't call him president -- returns from his winter retreat in Palm Beach. The man who said he knows every subject better than anyone else, it turns out knows less than nothing on every subject.
1
Eighty per cent of the country is living paycheck-to-paycheck, and couldn't survive a $400 unexpected expense, but Neil wants to tell us everything is hunky - dory!
1
The equity market peaked when Amazon announced its wage hike.
Wall Street, buy and sell sides, absolutely LOATH rank and file wage hikes. 3 generations of "supply side" doctrine has been pounded into their soft heads.
So, even though the American Consumer is reacting as expected and spending more on goods and services, analysts and fund managers (and algorithms) choose to ignore that and focus on phantom "margin compression higher labor costs!"
It's pathetic!
1
No matter how strong the economy is at the moment, it is just common sense that having an ignorant, petulant childlike grifter in the Oval Office, who surrounded himself with like-minded grifters and is now unable to actually fill key positions in the government with competent people will eventually bring it down. The only difference between now and the period leading up to the Great Recession is that now all of the corruption and malfeasance is in plain sight.
1
Right, to the establishment, you're a crank if you call the future too early. Galbraith had a slur for those whom Irwin looks up to: adherents to conventional wisdom.
Utterly unimaginative, incapable of thinking outside the box their education said held all the thoughts they'd ever need, the establishment is named so because they are immoveable. They lack the liberty to think in ways that track with the growth and expansion of society. They fear reality that exists outside their box and deny it, hoping it will all go away.
And this is dangerous because they manage the political economy. Susanne Langer said language is a tiny island in an ocean of emotion. To the obdurates: learn to swim, it's never too late.
2
Secretary Mnuchin - Please pretend your phone does not work in Mexico while on a family vacation!! For Steve Mnuchin to make the bank CEO calls from Cabo San Lucas on a beautiful Sunday was clearly seen by many investors as just another disjointed and crazy Trump directive/order. Frankly, every banker in the world knows NEVER to talk outside of the bank about ANY potential liquidity problems. The major drop in the markets today should only be seen as another result of Mr. Trump's continuing downward damage to our great and financially strong country; and, no fault of our good Secretary Mnuchin trying to take a simple vacation.
3
"Surveys show rising pessimism among top corporate executives".
Some of those same executives voted this incompetent reality TV star into office. What did they expect from a con man running a criminal enterprise?
1
@Jacquie
Corporate tax cuts and deregulation of any regs which inhibit their predatory financial policies. They flattered this simpleton, bribed him with campaign contributions, and laughed all the way to the bank. The unemployed in W. Va, Kentucky, PA, Ohio, Indiana, Kansas et al loved how he used GOP talking points to trash a qualified, experienced, educated "elite". They thought his lies were original ideas; they were impressed that this grifter flew in on his private plane to hold rallies for them to attend; they were uninformed, angry, and ready to be stroked. They would vote for him again.
The dark clouds of a major Trump recession are moving in fast. It’s going to make the Great Recession look like the fool old days. The strong Xmas shopping season will be the final gasp before companies and individuals drastically cut their spending. The stock market is telling us that a major storm is coming. You simply can’t have investors losing 20-30% of their net worth and not have it impact the real economy. Fasten your seatbelts for a very bumpy ride courtesy of Dangerous Donald and his terrorist Republican enablers in Congress.
1
Markets do not like insecurity of leadership. The news was how did Trump get 22 months of a rising stock market? Now the chickens come home.
The Trump base may finally see their man-child leader for what he really is: incompetent, surly, unread, undisciplined, inept. Who could imagine that a President would allow an economic shut-down because of the criticism of talk show hosts and right wing zealots? He did it to save face with his odd political base who sees all of this as hurting 'the elites'. They feel that there is finally someone in the Oval Office who understands them.
Trump has never been successful at anything before. However due to our odd electoral methodology he got elected, as maybe the least qualified person to hold the office in the last 130 years. We consoled ourselves with the fact he had some good people around him: McMaster, Kelly, Mattis and Comey. All gone now. Moreover he does not seek nor listen to his advisors.
He is corrupt, ran businesses that were corrupt and surrounded himself with inept punks. Meanwhile we saw Congress relinquish its role as a check and balance with Republicans in lock step with Trump. Now that they are home in their districts one can only hope they will get a sense of how their constituents feel about Trump and return and do their jobs. Thirteen Republican Senators hold our future security in their hands. Let them know how you feel if you live in a state with Republican senators.
1
It was almost 40 years ago when I first said the tag team of Ronald Wilson Reagan and Tip O'Neil would destroy America. With apologies to Oscar Wilde and Reading Gaol I knew it would be with a kiss.
This is the first time in almost 40 years that I am optimistic on Christmas Eve and will admit my optimism is not shared by most thinking Americans.
Reagan and O'Neil were the perfect tandem a stupid and confused CEO and a House Speaker who as the perfect politician was always making nice. Trees do not create pollution and solar panels not fossil fuels were the future.
Donald Trump is the perfect President for a country too long in denial. Morning in America is long gone and the evening and the morning is the next day. It is time to get back to work after an all day binge and Donald Trump is the only cup of coffee that can do the trick. He is the bitterest and strongest cup of coffee at this morning's breakfast. He will open the sluices at both ends so America might eliminate all the conservative poisons from it body politics or America will really die. After too much time of short term gain for long term pain the short term pain will require heavy pain killers but the choice is life or death. Trump may taste, smell and look like the worst cup of coffee ever created but forty years of remaining in the pot makes this cup of coffee desperately needed.
2
We read that #1 was a sociopath a while ago. Now we can be
sure. the chaos he has created in Washington and in the world , his support for only autocrats and his treatment of those around him including his appointees is most dangerous for our nation. it certainly means that we cannot wait until 2020 to say goodby to him.
2
"erratic behavior from the president and a thinly staffed government in the United States"
Maybe people will from Trump that government is too important to leave to amateurs and sycophants.
1
@HapinOregon
Fat finger alert:
My comment should read "will LEARN from Trump"
Sigh
1
Unlike most I see real reasons why most should be very scared as to what is happening to our economy. It is not incompetence but deliberate acts that are increasing income inequality and shredding the safety net
Is it truly lost on people that as soon as Trump's tax cuts were passed Ryan McConnell began seeking cuts to Medicare Medicaid and Social Security as well as gutting the ACA
The huge boon to the 1% and the large corps wasn't shared with workers; over 97% was spent on stock buybacks and special dividends
Our economy is at least 70% dependent on consumer spending by the bottom 90%
1
I look at RV sales as the indicator of the general state of the economy. The industry has started a slow sales decline which will accelerate towards layoffs and foreclosures. Feeling great again Indiana?
1
I seem to remember we were all assured everything was OK when the Bush Recession set upon us. I also remember being told that Hillary was going to win the Presidency in a walk come November.
I was skeptical then and I am skeptical of anyone telling me how good things are. Out where I live, we did not get free money from the Federal Reserve for a decade. Our wages are flat and everything- including taxes- are higher.
2
As income and wealth inequality intensifies, inevitably those with the most will not be able to find productive investment. Thus, they will put their resources into enterprises that will fail, as happened in the dot.com crash. We are already seeing overbuilding in the real estate sector and money flowing into start-ups that will never prove profitable. There is a huge debt overhang, especially in auto and education loans. When defaults occur, the dynamic of the mortgage crisis of 2007-8 will begin. We are not seeing inflation in consumer goods but rather in capital outlets, I.e. in the cost of stock and private equity. Can anyone seriously say the economy is strong?
4
If you want to challenge the metrics that are used to determine whether or economy is healthy, that’s a perfectly valid debate. But by any or all of the standard economic metrics the United States economy is strong.
At the same time there is staggering inequality. In the midst of a strong economy. That may be a paradox, it may be morally wrong, and it may be ultimately self-destructive of the economy, but in any technical sense those signs are not even on the horizon.
@Louis
How can a consumer based economy remain strong with a decimated middle class and a small business economy based on bank loans. If you think all is well, you might have missed the boxes next to Wal-Mart check-outs asking for donations to provide health care for its employees. The richest corporation in the country throws its employees on to local safety nets, already stretched. It not only drives local businesses into bankruptcy, it then asks for money from the unemployed, or under employed. That is feral plutocracy on steroids.
Much of the economic expansion of 2018 was a direct result of the so called "Trump Tax Cuts", as corporations used their windfall to increase dividends and buy back their own stock. None of which really helped the overall economy beyond inflating the value of stocks. Certainly the benefits were not as helpful, in the long term, as an equal investment in the nation's crumbling infrastructure would have been.
Still, I expect Mr. Trump will soon call for yet another unfunded, deficit busting tax cut for the wealthy and corporations in an effort to create another phantom bubble of prosperity for the 2020 election cycle.
6
Yes it is possible.
Wrong question.
Is it likely is a better question.
I think not.
There are real reasons the health of the economy can change.
We know the economy has been going up for a record period of time.
Everyone knows that can not go on for ever.
So it is safe to assume the economy will change directions and there is no reason to think Trump should be blamed.
I would say in addition that this article trying to create a issue where there isn't one can be more of a problem.
Some people actually believe the Times can be trusted to tell us the truth so assume if they see it in the paper there has to be a good reason it is there.
So this article can be a self fulfilling one.
It's not a self fulfilling issue when the secretary the Treasury Inserts an issue which nobody has concerns about until he brought it up. Now everyone is wondering if this guy knows what hes talking about. That's not a good thing to wonder about regarding the Treasury secretary of the United States. That itself will cause problems.
1
@lucky: So according to your analysis, Lucky, the New York Times will be to blame if the economy tanks. Trump will have had no part and, in fact, everything would have been just dandy if the New York Times simply reported that Trump must always be right and the country should follow him without reservation. Never mind his six bankruptcies--meaningless fake news of course.
Perhaps that is actually this brilliant businessman's plan: bankrupt the United States of America to wipe out all its debt to England, China, and of course to all those trusting little Americans who bought government bonds for their retirement or for their kid's education. How kind. How thoughtful.
2
We were told that the global economy was also strong ahead of 2008. Why should we trust these talking heads now? If the market cannot stand minor interest rates - why do we think it is as strong as everyone says it is?
8
"Strong" is not the same as healthy. Long term damage is being done to the United States in trade, immigration, tourism, and fiscal policy.
22
In economics it is called the psychological effect and this why economics will never be an exact science.Trump is doing things differently and this results in a lot of uncertainty. The Fed is not taking this into account and since there is no measurable inflation maybe they could put the brakes on the interest rate increases until a new trade deal is reached with China or there is a threat of inflation. Hopefully a trade deal comes first.
1
@Sean Mulligan
As a well known economist once said, economics is neither exact nor a science.
Unfortunately trade is only one of the many aspects of uncertainty caused by Trump. Add national security, the government shutdown, the lack of an attorney general or chief of staff, and a president that a majority believes is a liar.
1
A major factor in the economy is "sentiment." Sentiment in the market appears to be extremely negative. There is no way to counteract this while the insanity of Trump's economic policies are in place. Trump has created extreme uncertainty. For investors, the better course is to get out until things stabilize.
13
"Still strong"- be careful how much you rely on this. It may not have been as strong as people have been saying. When an economy is driven by false expectations of the future, heavy borrowing at the consumer level, one-time over-played tax breaks, and complete denial of ever-present "usual" uncertainty, serious trouble is bound to emerge. So was the economy strong: yes, but living in a moment of fantasy... and that's a quick flex of big arm muscles and not good progress in an endurance-and-strength-requiring decathlon. Start stuffing your mattresses.
11
@Swamp Fox
The $600/yr tax breaks for the 99% will end in 2027. The much larger corporate tax breaks are permanent until repealed. The bill for the tax breaks has been estimated at close to one trillion. None of those who shoved this through in the middle of the night with no Democrats present will be in office. How much will taxes be raised on the middle class and working poor to pay for this tax heist? Future generations will be stuck unless they take Congress and repeal this tax crime.
The sub prime problem is contained
I’ll take growth over profits
Computer algorithms will prevent losses if there is a downturn
We’ve achieved a new high plateau
...
5
Wasn't it Trump who claimed there was a war on Christmas? He waging war on Christmas by throwing insulting tweets at the Fed on Christmas Eve and making government employees go without paychecks during the holidays. How does Trump think that insulting people and not paying people will make the economy better?
50
@Linda don't forget that he also turned down the scheduled raises for Federal workers last year because he didnt think it was "sustainable". This is after the government-crippling tax cuts were approved.
5
Good article. The index of supply managers being in positive optimistic range means the real party of the e economy continues to humm along, but as Neil writes it is the financial sector and stock market that is cratering. However, the real productive portion of the economy is flashing other warning signs too--lower new auto sales; lower new and existing home sales, low commodity prices like oil, metals, farm products indicating soft conditions in goods producers and consumer sales. I think a mild recession is likely and as Neil indicates the incompetent leadership in the White House and Fed Reserve will make it worse. A recession in 2019 just means Trump's impeachment is more likely.
25
Centuries before, even in the 20th, war was the way to 'solve' economic or financial's disputes. Now, with the world settled on nuclear equilibrium there're local minor wars only but even those are becoming too entangled and prolonged that become unsustainable. And the world economy is thus in uncharted territory depending only on 'treaties' and to some extent on 'good will'. It requieres skillful and serene people, but these are being too easily challenged under short sighted nationalism and 'populism'. News media should be clearly and forcefully engaged to be able to correct course.
6
Trump is the opposite of FDR who had reassuring Fireside Chats. Trump has midnight tweets that shake the confidence of normal people. His minion Mnuchin's calls don't inspire confidence either. What a pathetic mess.... A comedy of tragedies....
67
@Shelley Diamond
FDR was also rescued by WWII and full industrial employment in factories and ship building. We now have never ending wars, already factored into the economy, draining as they are.
The economy and other aspects of the government do not go well when the leader of that country is increasing paranoid and unstable. Is Congress waiting for Trump to implode before they do something about his bizarre behavior?
31
Climb down from your Ivory Tower and ask working class people in this country if they think the economy is strong. What does 4% unemployment mean when the labor market participation rate remains at historic lows, wage growth remains essentially flat and the #1 economic challenge - health care - becomes less accessible and affordable. Full employment with low wages, flat hours, no benefits and no room to climb is not a strong economy.
172
@ten organic farms
"Full employment with low wages, flat hours, no benefits and no room to climb is not a strong economy."
I'm not well educated in matters of the economy (other than whatever is directly in my pocket, so I thought it was my own myopic view that prevented me from being all enthusiastic about job reports and what is supposed to be an economic boom time. Stagnant wages in low paying jobs, even if there is full employment, feels like a bad thing to me. I'm happy that I'm not 20 - 40+ years old and looking at what the economic future holds for me. I would be even more depressed than I am now over our cratering country.
23
Trump was never the intelligent businessman his narcissistic self claimed to be. Indeed, his reputation among other business executives is that of mediocrity and dishonesty. Add to this the idiotic attraction to disruption and chaos he believes makes him more effective, and you have self-created economic failure by the incompetent-in-chief. He's the dumbest, most mercurial person in the room — a fool who believes his beliefs are superior to all others. Inferior is the actual reality.
Eclectic Pragmatism — http://eclectic-pragmatist.tumblr.com/
Eclectic Pragmatist — https://medium.com/eclectic-pragmatism
40
@Eduardo B Who bankrupts a casino???
1
@Eduardo B This is one of the more accurate and direct comments on the danger of Trump. To repeat, he is a narcissist to the nth degree. So everything revolves around him and any attention he gets is magnified positively in his eyes. He can't recognize a sycophant - he thinks anyone around him who says something nice is a wonderful person. Just as when someone says anything the least bit negative (about him) he sees it as a threat that must be removed.
He lives in his own world and sees actions only as they relate to himself. Attention is good. So the chaos and disruption generates attention on him. The fact that it harms others is of no importance, as he lacks any empathy. He simply has no capacity to care for others.
Of course, the real problem is we have a Republican party that seems to also only care about themselves and their donor class. So they stand silent. It's conceivable the market collapse will get their attention, but only if their donors force their hand.
I am not optimistic. I am 66 and continue to work, planning to retire the end of 2022. I hope we survive this pathologically sick, twisted clown.
2
@Doug Poole
We will survive him; however it will take years to repair the damage he has done to our institutions, the environment, and to the Office of President. Add in his strange relationship with Putin, Russian financiers, and the corrupt murderous Saudis. Historians will write about this time for years to come. Trump will not fare well. Currently, most of us can't keep up; we just suspect that bad things are happening behind closed doors.
No talk of how the short-term interest rate has gone above the long term? That's an indicator of a recession historically coming. The insiders are getting out of the market leaving the institutional investors holding the bag like people with pensions and 401Ks. Upper-income people are buying gold and silver. Something nasty this way comes. Always look at what the insiders are doing.
21
Mnuchin mistake (at Trump's direction??) was to publicize his calls. No reason to alarm traders. No reason not to make the calls. Trump mistake is on going by taking aim at Powell & Fed via social media. The markets cannot be controlled, will not be controlled, cannot be used for political gain. They exact gain & pain objectively. Hopefully Trump understands that playing the political blame game with the markets is destabilizing a market already fragile.
20
@Northcountry Trump doesn't seem to understand much of anything.
37
@Northcountry
trump's mistake is that he ever ran for, let alone let Putin select him, to the presidency. He thinks he can control everything.
Aren't we glad that he was the one who picked Powell? Otherwise he would be blaming Yellen who was chosen by President Obama as deliberately sabotaging "his" economy!
In terms of "leadership", as some readers responded to the propaganda article by one Keith Kellogg about trump "leading us" to defeat ISIS, he couldn't lead any one out of a paper bag! So if any one is looking for "leadership" look elsewhere, anywhere but the current "administration". They cannot even administer, let alone lead!
1
"The question is which will prove more important, the economic fundamentals or leadership. And to be an economic optimist means counting on the fundamentals to prevail."
This dichotomy is an oversimplification. In an economy driven by consumer spending, national psychology becomes an economic fundamental. If consumers become afraid for the future (for whatever reason), they will save rather than spend. If investors become afraid, they will withdraw from markets -- and computerized programs allow institutional investors to all register algorithmic fear simultaneously. If manufacturers become afraid, they will defer capital investments.
And as Trump has become more confident in his presidential powers and judgment, and has cleared the deck of dissonant voices and contrary expertise of every kind, we have all become terrified. The solipsistic lunacy of Donald Trump is now an economic fundamental.
32
The economy is doing fine, both in the U.S. and around the world, although it is slowing a bit as expected. The CBO August forecast had the economy slowing over the next few years as stimulus becomes steady-state, for instance. The Fed has explained its rationale and the consensus is that reasoning is sound.
Trump needs to stop tweeting and just be quiet for about 3 months, without doing more damage via unforced errors like trade wars, shutdowns, and chaos within his administration. This decline in the markets after October is just as much about his behavior and legal woes as it is about interest rate hikes. He inherited the incredible Obama Boom and just needs to let it be.
A few statistics:
1. Real median household income hit its all-time record high in 2016 and continued that record into 2017 and most likely 2018.
2. The total number of persons with jobs has been setting records since May 2014. Job creation (using a six-month rolling average) is about average for 2012-2018, a very healthy 200,000 jobs per month.
3. The unemployment rate has fallen for all racial groups since 2010.
4. Corporate profits after-tax are at an all-time record high in nominal dollars and are very strong as % GDP, following a roughly 30% cut in their taxes.
Rather than kill the wealth generating engine that is globalization, Trump should be working on making sure we address anyone left behind, via higher taxes on the rich to fund healthcare and higher education, for instance.
32
@David Doney
The chances of Trump being quiet and not tweeting for 3 months is essentially zero.
Enough stuff naturally and unexpectedly happens to stymie economies, the problem here is mostly due to self inflicted wounds by a know nothing who thinks he's the smartest guy in the room.
1
@David Doney
That recommendation is irrelevant to the issue.
That is your personal position on a social issue.
You have that right to have that opinion.
It's not what this article is about and should not part of your comment as if it does.
@David Doney I admire but do not share your optimism. I think it just as likely that an economic collapse and hyperinflation will follow the Trumpian sugar-high.
But the last paragraph you write? Absolutely correct. Trump has done precious little for the left-behind white working class he so championed, people duped by this pathetic charlatan.
1
The real weakness is that we just gave billionaires a trillion dollars and they kept most of it for themselves. The average American is no better off for the “booming” economy. We are now a gig economy with no real safety net for workers, global warming is costing us a fortune and we now have a trillion dollars of debt to pay interest on. That will be catastrophic when recession comes. And then, the average American will be tasked with bailing out business again.
220
@CA Dreamer
We did not give the wealthy anything.
They are still paying a huge proportion of the revenues collected,
Reducing the amount they pay isn't the same as giving them money.
It's taking less from them.
Big difference.
@Stephanie Wood
They didn't call the ;police because the workers were on strike.
They called the police when those strikers broke the law.
The striker do not have the right to stop the company from doing business when there is a strike.
Wait, apparently we DO need to worry about drug shortages! My pharmacy and others, like WALMART, have morphine sulfate on back-order and do not expect any until after the first of the year. I learned this on December 9, and scrambled to find some. I broke 5 thoracic and lumbar vertebrae 10 years ago, and I've been on it for 8 years. I have a very large hardware construction inside. Is big pharma reacting to threats by AGs to sue them for the epidemic by squeezing patients? Please research this and report on it!
19
@Kathy Bankston - That people are maintained on morphine for a decade (!) after a traumatic injury is another travesty that the Times should research and report on.
1
The fact that the Sec. of Treasury took the extraordinary step to call bankers had to have rattled some nerves. This administration's track record of "alternative facts" couldn't have helped.
44
We as Americans must bear some responsibility for allowing a reality television personality to be taken seriously in our political discourse. We gave the keys to our economy, our global leadership position in the world to someone who has failed in most endeavors he has tried. Two failed marriages, six bankruptcies,Trump University, lack of ethics and moral leadership.He is now in full panic mode, firing every one as he did on the apprentice,. That will not right the ship.The fed chairman is making decisions based on sound data and judgement. We will be facing at least another two years of economic turmoil. As in the poem he often recites "you knew what I was when you picked me up"
150
@bernard oliver
I bear no responsibility. I did not vote for him. I knew what he was as did anyone with eyes and ears. I voted for a well qualified woman who may have had some questionable decisions in the past but was no worse than any man who had held similar positions. I knew he was treasonous long before his collusion with Russians came out. One only had to listen to him belittle our country while praising Putin to know. His voters are to blame. And the GOP who has supported him through all of his terrible tweeting and "gut" decisions. I will have to bear the consequences, as will my children. But I am not to blame.
11
@bernard oliver
Nobody dislikes the president more than I do, you can be sure. You are correct to point out his history of failure but I doubt very much that either he or his first wife Ivana would consider their marriage as having "failed". It seems like they both got what they were looking for - loving children, social prominence (if not status) and a super-rich lifestyle. From all appearances they remain friends. Maybe not happily-ever-after, but in this world, definitely not "failed".
Trump lost the popular vote by more than three million votes. “We” Americans didn’t vote for him. Wisconsin, Michigan, Ohio, Texas and indeed my state of just Florida got what it paid for.
9
The economy is not strong contrary to the headline. Facts:
Home buying is questionable with a shutdown.
Wages are stagnant.
Health insurance issue is not solved with Republican lawsuit, continued rising prices.
Erratic leader in White House.
Huge personal national debt load, including massive student loans.
Tax cut did nothing for financial health for individuals.
National debt at record levels.
Intransigent Republican leaders who do not have interest of country do not negotiate in good faith on most issues, with divided government signaling stagnancy for two years.
The economy is not strong, except for the gilded few and most common people
would be smart not to look to any relief anytime soon.
Not sure what reality the bankers and brokers live in, but it is not
that of the majority of people.
79
The stock market mood can change quickly, depending on a range of factors including investor confidence, economic prospects, as well as intangible factors such as momentum or a herd mentality from investors.
In much of the Trump presidency, there was an air of confidence flowing from the strong economy left by the Obama administration.
Trump's inexperienced administration, were seen as some sort of economic miracle workers. Unemployment continued falling as the stock market gains grew.
Then Trump started unnecessary fiddling with economic fundamentals. Giving a $1500 billion unfunded tax cut, skewed to the mega rich like Trump was a critical error. From a $585 billion budget deficit in 2016, it has ballooned to close to $1000 billion in 2019. Interest rates are rising partly to dampen the stimulus from the tax cuts.
A tariff policy based on spite was another critical error. It will hurt both the US and China and slow economic growth worldwide.
Having a chaotic, dysfunctional administration where the turnover of leadership is increasing, adds to volatility that scares investors.
Now we have confidence declining, and a sense of panic creeping into the stock market.
There is a real danger Trump will create a recession all due to his policies and leadership style. Mueller's investigation is another negative wild card that just throws up the possibility of Trump's presidency being tied up in.legal battles in 2019.
This is not winning. When will confidence return?
71
Excellent summary. Confidence will return when he’s gone. The real question is how bad will this get and how extensive and deep will the lasting damage be?
44
Could be real bad. Trump will get sec of def who will support his use of a nuke.
2
Even with strong economic fundamentals, the basic fact is that we are a global economy and global trade is embedded in almost all major supply chains. A trade war and an attempt to manipulate the Fed is the opposite of what is needed. What Trump is doing is just as bad a China manipulating it's currency. The tax cuts, a ballooning deficit, and trade wars (which free trade agreements held in check) will eventually bring us down, maybe not today, but it is certain that without competent leadership, very soon.
29
Judging by the article and the comments, it seems yet again few understand. The bubble we are in now has been driven by going on now 2 decades of cheap money. Massive levels of debt in every crevice of the world economy, stock buybacks, and loose monetary policy does not make a strong economy. Remember when the Dow was at 14,000 and it was a massive bubble? We almost doubled that and everyone is claiming it should go higher still at ever increasing rates. Just leave it alone they say. Leave what alone? The unsustainable bubble? If you want it left alone, then the Fed needs to raise rates another couple hundred basis points. 30 year mortgages should be going for 7% . Car loans should not be at near zero rates. I could go on. People in general will never learn. As such, those that understand will profit while those that don't will continue to complain every time their bubble is burst.
13
@In Pursuit of Value This market belongs to Mr. Trump. Markets HATE volatility and there is no more volatile human being on earth than this grifter. His instability is directly harming the market.
2
The United States of America is not nor was it ever meant to be a business. The President of the United States is not the Chief Executive Officer of a business. The White House is not a CEO Mansion. America is and always has been a nation state.
Donald Trump is not nor was he ever a successful businessman. Donald Trump inherited his Daddy's money and bankrupted every business he operated on his own while playing a businessman on a reality TV show.
Whether or not the " economy is strong" has little or nothing to do with the White House or scientific objectivity.
Economics is not a science. There are too many variables and unknowns to craft the double-blind experimental controlled tests that provide predictable and repeatable results. Economics is gender, color aka race, ethnicity, national origin, faith, sociology, politics, education and history plus arithmetic .
The only economy that Donald Trump cares about is preserving, protecting and defending whatever he is hiding from the American people in his personal and family income tax returns and business records that reflects the profitable benefits accruing to the Trump Organization from occupying the Oval Office of the White House.
210
@Blackmamba
And the Attorney General is NOT his personal lawyer.
7
The economy is a science, often you have economist forming a hypothesis, then experiment, then do some analyzing and finally coming to a conclusion
2
@Blackmamba Well said and as history has shown us we have always struggled with what our Republic truly represents, the preservation of capitalism or true liberty for all.
Sadly we have enable and embolden the leaders that always are complacent with the former and if you support the latter history has marked you as a radical, a communist, a socialist or now today even as a terrorist.
What we as Americans need to reconcile is that debate is from from over and as the world will change our economic system will have to change not our Constitution or The Bill of Rights.
If we do not make the right and just changes to our Republic then we will fail just as the Roman did...from within.
1
"moderate economic growth that was completely normal from 2010 to 2017."
Anyone who read Irwin's columns during this period will remember he constantly described this growth as weak, disappointing, unsatisfactory and a variety of other negative adjectives. Now we have serious headwinds appearing (most of them the consequence of Trump and the Republican's incompetent management of an economy that was fair to good health when they inherited it) the negatives are being overstated. The economic management of this country is in the hands of most incompetent bunch of administration clowns in my memory...Trump, Kudlow, Hassett, Mnuchin, Mulvaney.
27
The stock indexes might be sliding due to higher interest rates, but look a little farther, and think about the condition of the society, and I see that the whole country is sliding down gradually due to lower and lower level of trust. Peoples' trust in our government, in the justice system, and even in the Constitution to an extent, is now perhaps the lowest in almost a century. Peoples' trust even in their neighbor is now lower, fearing the neighbor might be of opposite political views..
America has become a predator-prey society, I am chagrined to say. How can I avoid being a prey, is what everyone thinks everyday.
This President is in the news 24-7, and it is causing anxiety in otherwise stable people, due to events that build uncertainty about the government among more and more people. it is going to be monumental task rebuilding the social trust even after Trump is gone.
If I do not trust the business model of FB or Google or Amazon or anyone else, I would not want to invest in them. They are just predators on society.
Stock market will bounce back, as it almost always does, but the level of trust will not at the same time. It's a different task to build social trust. Soviets were a big military power but degenerated from within because lack of trust in their government and among themselves. It is still the same way to a large extent that way. Cold war was won not by military conflict, but by a nation confident in its then President and trust in its government.
35
@Vijai Tyagi
FDR built trust with Social Security and his alliance with Churchill during WWII; my parents and uncles understood the need to stop Hitler. Truman built trust when he stood against China, and his gift of Medicare to millions of Americans with no other path to health care. LBJ built trust with his passage of The Voting Rights Act for all Americans. Obama built trust with the ACA, flawed as it was; 22M Americans got access to health care, the trade off with insurers and Big Pharma was lack of pricing control. My daughter can afford disaster coverage, not great, but better than nothing. Some States underwrite coverage for low income workers. I have hope in the next generation. As Churchill said: Americans will do the right thing after they have tried everything else. He was right about that; we instituted Lend Lease, kept England alive until the Axis attack on Pearl Harbor, and then went all in. We are pragmatic; and we are paying attention to the grifter in the WH. We are paying attention to his people in Congress. Paul Ryan is gone; there will be others to follow.
We survived the crash in 2009 only because the Fed “printed money” with low interest rates to keep the economy afloat. This bought us some time, but now that the Fed is getting out of that game, we find that this strategy solved nothing. The middle class is still hurting, and many of our corporations are just zombies who have been surviving on the cheap debt. Instead of a WPA style infrastructure plan to really put Americans to work, Trump went and cut taxes to unsustainably low levels. Piling up more debt. The future does not look bright for American finance.
18
Government debt-fuelled economies have a quick high (like a drug) and then everything seems to be wonderful for a moment until it wears off, until the stimulus of tax-credits no longer has the same euphoria effect like the first time on opioids melts away the daily pains.
The US economy parallels its opioid addiction in so many ways it is uncanny. The 2008 Global Financial Crisis overdose has lots of dependents and addicts with them, this time the US is alone, having alienated its friends and given its enemies opportunities, who is there to rescue the US when its alone and on an economic overdose of debt-fuelled financing? Saudi Arabia? China?
These are countries who have floated the US debt market financially for over a decade now, but how does that make the US financial secure and independent?
5
@James Wallis Martin
The Saudis need our military and our weapons, still the best on offer. China needs our markets, and economic stability ensuring our ability to repay debts.
No one in the Trump administration has the skills/experience to manage the economy, be it domestic or foreign.Because of that, millions of Americans are left watching their investments in the stock market explode in their faces. The old adage is to avoid selling stocks when the market is down because all that does is to lock in losses . But that advice is sagacious only if you have confidence in the administration to put things right. I don't. We all will suffer from the Trump Residency, long after it comes to an end.
26
Incompetence is no excuse for malfeasance.
34
Oh, a " 'Plunge' Protection Team" is without doubt the most reassuring title for the group. Thanks, Steve.
Teeny Donald Trump's admin team is surely among the worst ever.
27
I feel guilty in hoping for a major financial downturn because I know that it would hurt not just the fat cats. But something needs to dislodge the plague of a vile president and a corrupt and cowardly Republican Congress.
31
Poor widdle Donny! Someone kicked sand in his eyes in the sandbox. Sack this child.
23
I'm still waiting for those affluent, smart over educated (especially in the art of leadership) members of the business community, to wake up: absent leadership in Washington, which has been obvious since 2016, what can they do for their country? Something besides hand wringing, nervous stock sales and indulging in an extended anxiety attack. You folks invest billions of dollars in advertising to convince us that you are the lords of the universe and the smartest cards in the deck. And all the while, you have systematically denuded government of the means to pursue the common good, not least by voting for Trump because you thought he would give you a tax break so you could clear a few million more per year.
So get out all those books on leadership that you read in business school and get busy doing something more than selling us sugar water that will kills us. And grow up and take some responsibility for the mess we are in.
55
@Liz O'Connor
"I'm still waiting for those affluent, smart over educated (especially in the art of leadership) members of the business community, to wake up'....
I wonder though. In the short term (pretty much the American way of thinking these days) businesses are doing well. Profits are up as a result of cash flow from corporate tax cuts and a consumer with a little extra cash in their pocket from tax relief. The icing on the cake is corporate stocks can now be bought back at a lower price. For those that can take the money and run, so be it. For retirees and those not fortunate enough to see much benefit in any of this, things are not so good. Meanwhile the debt, both public and private, piles up. And, well, leadership? Not so much these days.
5
The Presidency of the United States of America is too important a position for an amateur. Future office holders should have some senior level experience in government, preferably at the federal level.
37
J Don shut your mouth and let the market work. After 5 bankruptcies you should know that by now!
20
If the economy gets much stronger, people in Poplar Bluff, Missouri are going to start buying fancy cars!
https://www.newyorker.com/news/dispatch/the-small-town-cost-of-donald-trumps-trade-wars
8
This will make 2008 look like a picnic. Well Done, Trump Regime. And who could have guessed ?????
Well, anyone with a triple digit I.Q..
Just saying.
37
Missteps? That's so..polite company? Quaint? How about Incompetence, Gross Negligence, Criminality, Intent to destabilize, and I'm sure we could throw in some nonsense about the End Times too. There is no way all these people are stupid. They're just Crooks.
40
Whatever Trump and his idiotic cabinet touches, turns into epic failures. Now that they have ruined our national security and our standing on the world stage, it is time to ruin an economy that was doing well without their involvement.
65
Unbelievable stupidity on the part of Mnuchin to tweet about his calls to bankers. But perhaps at the plunge party conference call today he discovered that the market plunge is due to trumps infantile and ignorant behavior. Duh!
Please God, give us a new president
46
Everything would be fine if BIG MOUTH would just keep his mouth shut.
12
Everything Trump Touches Dies.
The Trump Administration and the Republican Party are intentionally attempting to sabotage the Economy and destory it.
The kleptocrats will pick up that which is valuable, and tell the rest of us to suffer, Get Sick, Go Broke, and Die.
39
The economy is not as strong as the trump people portray
once you factor in medical, insurance, rent/housing cost inflation.
Aand the removal of tax deductions that favored the middle class (salt tax, etc)
I would say very few are better off
Honestly I make enough to be in the 1% and I am no better off now than two years ago net-net
(mind you I am not complaining)
I actually relish the chaos finally coming to light to purge this country of the gangrene of the GOP
Its like the diabetic who denies the smell, and could have saved his foot, but let it go so far and now its an above the knee amputation
Thanks Trump, Trumpites, Magats, and GOP)
32
Necessary?? trade war??
3
Hey look at what bad leadership did to Venezuela. Only takes a few years.
9
“We” have elected an incompetent (in every sense of that word) ignoramus as POTUS. So please spare us technical analysis of this debacle.
The market pump up and inevitable meltdown merely reflect realization of that overwhelming fact. “We” disregarded ample evidence that Trump topped the naughty list. Our bad... but it must be admitted the man has found a way to bring coal back. Just check your stocking this not so merry Christmas morning.
11
Trump Economic theory stealing defeat from the jaws of victory...... what’s the chances?
7
Yes, the economy seemed on solid ground. Who would have thought it takes just one 'cretin' to ruin the pie by rattling the market, a brutus ignoramus whose superb arrogance won't let him see beyond his stinking nose, trying to take all the credit while things look up...and blame it to any and all but himself when his stupid trade and traffic moves falter? Can't he see (no, he can't) that the market needs stability to function, and that the Fed needs independence from his malevolent big mouth interference? Yes Donald, talking to you! (even though I know you won't listen, you just lack a conscience for that (as a conscience 'knows' right from wrong).
8
@manfred marcus
Manfred, I have said for along time the pie was putrefied. It is the reason I have referred so often to the Irish starvation. In 1845 the Irish economy was based on the export of the world's finest meat, cheese, grain and vegetables. 1845-1850 Ireland's economy boomed yet 2 million people disappeared. One million starved to death and one million found their way to the world's new urban industrial hellholes. Ireland's landowners prospered, it was what we now call neoliberalism and it is a tide that never raises all boats.
2
When Steven Mnuchin completed filing his disclosure documents during his Senate confirmation hearing process he left off millions in assets. When the Senate asked him about the omission, he said he simply forgot he had that money. Seems a red flag for a job interview for Secreatary of the Treasury. Either he lied, or he is an idiot. More generously, he is just so rich he may not have missed that chump change.
Either way it is not surprising his incompetence is now trashing the worlds economy. With Trump and Mnuchin - we might be better off letting their trophy wives run the country. It seems they know something about money.
28
the economy is strong for the rich and privileged, but the blue collar workers and the farmers are getting spanked. For anyone to feel or assume that the country is better is either drinking, smoking weed, doing heavy drugs.
15
Economy is in Trump hands, smothering.
7
The evangelicals are winning! We may be broke, without health insurance, and with anemic retirement accounts, but hey, at least pesky demands by gay couples to make wedding cakes for them no longer plagues us. America will be great again any day now.
89
@Timothy Spradlin Too funny - and sad too. Such is life in the USA nowadays.
3
People are finally realizing that Trump and the people around him are completely incompetent .As the situation get's worse they will continue flailing around it is going to get very ugly.
8
The only problem the Fed has with the economy is an incompetent person in the White House.
17
Ask the average man or woman on the street ... the workers ... the unemployed ... people working two or more jobs just to make ends meet how this "strong economy" is working for them.
This is Trump's Economy ... and he's making it worse for everyone!
8
For investors in the market who are saving for retirement, going long and do not need to access their accounts for income in 10 to 15 years, this is a moment to increase your dollar-cost averaging in a 401k, and to realize that even in an IRA where you may be "all in," but with dividend reinvestments, new shares are being accrued quarterly at a steep discount. When you go long and dollar-cost average, you buy fewer shares at a premium in a frothy market and more in a downturn.
2
This “Christmas present” from Trump will finally incite some leaders to consider seriously the disability clause of the Constitution, but it takes the cabinet as well as Pence to bring it. Trump has “packed” the cabinet with his loyalists. Will it come to a military takeover, Trump dragged away like a South American dictator? Is our democracy finished?
9
The "...Boom of 2018..." is already dead and gone. It was entirely false. It was entirely fueled by a massive explosion of debt and defceit spending.
If the DEms had done this the Tea Party would have marched in the streets.
22
The market is in free fall because people have no confidence in the president, his administration, or his republican party. Their incompetence is truly staggering, and they've put our nation's security and economic well being at extreme risk. Let's see how Trump's support holds up after our economy tanks.
711
@markymark
Sure would seem that the lack of confidence is sending things in that direction. I guess, others have had way more patience and confidence than I did. I would have pegged a significant drop long ago. Like when he won.
39
@markymark@Lefthalfbach@Virginia@weary traveler
Oh Yee Of Little Faith,
Unemployment is at a 50 low. Recent trade deals (USMCA) are better for farmers among others. China lowers our tariff on autos from 40% to 15%. NATO pledges an additional $10 billion for their defense, saving us. The S&P hit 20 trillion for 1st time in history. No tests in North Korea. Now Turkey says they will replace our forces in Syria. For every new reg. 2 have to be removed.etc. etc.
The future is bright! Merry Christmas!
3
Since 1900 the Republican parties economic policies have always been a sham to keep the plantation holders in charge. FDR after Hoover and Coolidge, Clinton after Reagan and Obama after Cheney & Bush. They still listen to the disgraced policies of Friedman and Hayek and even Rand. Now they have a pres. in charge who is not smart enough keep to the usual platitudes that used to manipulate the population to believe that throwing our money at the rich will make us all happy.
We can only hope that 2020 or maybe 2019 will bring in a Pres. who will surround himself with intelligent Keynesian economists who can once again save us from the robber barons of today.
12
Does tanking the global economy violate Twitter's terms of use? Asking for a friend.
24
Remove Trump from office as a Christmas gift to the nation.
13
For once I would like the New York Times to stop looking through the prism of of white, upper crust, urban America.
My wages and benefits have not even caught up with the wages I made ten year ago and are a fraction of what I earned before earned before Dubya Bush tanked the economy a decade and a half ago.
So, New York Times don’t try to sell us the propaganda that the economy is sound, not when wages continue to stagnate, benefits keep getting cut for most workers, income inequality keeps growing with no end in sight and an economy that chuns out more and more gig jobs that lack benefits and job stability.
28
Don't put it past this guy and his father to short the market and then, smiling up their sleeves, call the banks to see if they have enough deck chairs and lifeboats in working order.
6
Hey, Trump, thanks a lot for wrecking the holidays for Fed employees laid off, or working unpaid, and for those planning holiday visits to parks and monuments. And of course, thanks to you and your even dumber (if that's possible) Treasury Secretary tanking the markets.
An impeachment vote would typically rattle the markets and make them drop. My guess is that if impeachment proceedings begin in the new year, the markets will rebound nicely. It would be a fitting legacy for him.
17
Seriously you think Trump can think and will do the right thing.. He does what Fox news pundits ( TV guys with no experience ) tells him..
No wodner he was elected on this huge hope from us americans! Sorry start shopping NOW better luck next time!
Under Bush I lost 35% of my 401K I will be happy if it stops before 50!
9
Not stressed enough watching Trump wreck havoc on our democracy?
The last week (Syria, shut down, Mattis) was a bracing reminder that Trump's ignorance, incompetence and hatred of expertise, may be as dangerous as his attacks on democratic institutions and the rule of law.
Now with the market falling and the panicky reaction by Trump and his adminstration (I want to fire the Fed chairman"! Mnuchin do something! Anything! Don't panic I called bankers!) we see once again that we are in a deadly serious race, and have been since January 20, 2017:
How many crisis's will Trump and his band of d-listers have to address before his time is up?
How much damage will Trump and "his great gut" and delusions of "stability" and "genius" do the economy, international relations, defense against terrorism, climate change, etc?
Can you imagine the economic carnage if Trump was President during the Great Recession?
In many ways, we've been "lucky" in the first two years with a minimum of unexpected crisises. It is unlikely our luck will hold: Trump will need to handle a significant, dangerous, and unexpected crisis (perharps of his own making). And he will fail.
7
This is why actors, celebrities and private business owners should never be in charge of government.
Public administration is a different animal and requires public service oriented people who have an altruist desire to serve the best interests of the public rather than a personally motivated outlook.
17
I would like to know how much money Trump and his family and cronies have made during his "presidency". I guarantee you that they are getting even richer as they make informed bets about what crazy move he will make next. I don't think his chaos is all unplanned. I believe it is exactly calibrated to make money for himself and those in the know with him. It's disgusting.
5
Mnuchin’s move is highly suspicious and may be intentional and/or manipulative. Keep in mind of his previous controversial history of taking advantage of the foreclosure crisis in 2008.
Back then “Mnuchin led a group of investors and bought most of the bank’s assets at an auction held by the FDIC for about $1.3 billion in cash. The FDIC agreed to cover almost all the loan losses from soured mortgages and the lender was renamed OneWest, which soon became profitable again.”
He and his greedy cronies may be shorting the market .
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@Fe R
Don't forget he and his wife went to Ft. Knox.
Has anyone trustworthy taken a look there since to see if it's still full of gold bullion?
Trump is not responsible for the stock market’s rise and fall anymore than he’s responsible for Bitcoin’s rise and fall, each spectacular. His problem is he wanted to take credit for stocks rise and now spread blame for their fall.
2
Yes, yes they will.
For whomever is the Democrat that wins in 2020, will have it worse than Obama picking up,the pieces from the Bush administration. Oh those republicans, the business party. Hahahahaha.
4
Well, Trump looked smart on that TV show!
3
@Sam Kanter, Sam he was only acting, the same thing he's doing right now.
1
Mnuchin is worried about financial institutions; one in particular: Deutches Banke. He thinks it's the mystery company in the Mueller probe.
6
Dear NY Times,
The emperor has no clothes, and the stock market has noticed. And when you write things like, "The boom year of 2018 may be unlikely to repeat itself" you're not quite dressed yourself. This has been a KABOOM! year.
2
History shows time and again that nothing can tank an economy like a shaky, incompetent and corrupt government. Get ready for a slide.
9
The depression in the late 1920's has a similar story, inflated stock values, too much easy money, and then tariffs and trade spats.
So not the first economic set back created by an incompetent person as President. But it will likely will set a record for the incompetence and stupidity of the source (trump). No other person ever elected is so poorly equipped ethically, mentally, and emotionally for office of the President
6
As trump melts down further this is only going to get more interesting. Being a Sociopath the damage to others is of no consequence to him.
The chaos helps draw the conversation from Putin, Collusion and campaign finance theft.
Roller coaster ride time so hang on tight! Mueller time can not come soon enough!
7
What a nice christmas gift to America from Trump.
Tank the Economy.
5
@su
The stock market is not the economy.
2
I think Trump’s promise of “America First,” is more accurately: “Destroy America First.” If Putin’s plan was to help put a complete fool in the White House in order to weaken western civilization, then he’s having quite a victory.
9
"The real fear is that shaky policy allows small shocks to create a broader crisis of confidence."
The good news? The falling stock market is one of the most immediate and certain means of getting rid of Trump in 2020.
Trump tied his wagon to the stock market, NOT the economy. Now he trumpets the dropping stock market as an aberration caused by the Fed. He should have just shut his tweet (his mouth). His yammering about the Fed is like throwing gasoline on a wildfire. As an added accellerant, the Mnuchin announcement regarding the Fed is one of the stupidest maneuvers this administration has pulled, in an administration permeated with stupidity.
Trump hooked his wagon to the market and the more tweeting about the decreases the more he accelerates its drop since listeners have become certain of the continuing trend.
Lack of confidence will step in. As the stock market falls consumers and businesses will reduce expenditures and the chain reaction turns the apparent dip in the economy real.
Trump has sealed his own downfall by announcing to the illiterate masses the fact that the stock market is HIS accomplishment. He can't tweet himself out of the obvious conclusion that the fall of the stock market belongs to him just like its increases.
8
Excellent article but "Divided government could lead to paralysis" is insidious bothsidesism. I think they call this a cockroach idea...no matter how hard you try, you can't get rid of it. Or perhaps a "zombie" idea. If paralysis checks a roque presidency and senate majority methinks markets would appreciate it. And where is the school of thought that divided government was good for markets? Oh, right, that's only during Democratic presidencies.
You're better than that Irwin.
1
When will Trump supporters finally realize that he is NOT a business genius. He was gifted $.5B from his father and still went bankrupt multiple times. The one thing he has done well over the years is create a persona and public image about himself and his name. That was done through payoffs, lawsuits, grifting, and other cons where he used people and the media. He won the presidency by mimicking the Russian bots that targeted Hillary negatively and disinfranchised minorities to vote by using the right wing “news” media like Fixnews and Breitbart. And he hides his tax returns to keep the truth from his base.
In short, Trump is a fraud.
14
Any day now Tweeter in chief will sign one of his stable genius executive disorders to completely dismantle Dodd Frank.
Who needs D-F when Mnuchin has proven to be a very stable telemarketer?
The only refreshing thought about this Trumpian debacle is that he might have to think at least once before blaming Obama or Hillary.
3
It is sort of pathetic, the extent to which the administration doesn’t realize that they are widely regarded as incompetent by professionals who actually know what they are doing. Perhaps Mnuchin should have taken heed of the saying regularly misattributed to Abe Lincoln and Mark Twain goes, “Better to remain silent and be thought a fool, than to open one’s mouth and remove all doubt.”
3
You have to have wits in the first place in order to keep them. We're doomed.
3
Pithy Crow-dancer. I am laughing in the way people do when they helplessly see it coming a mile away.
@crowdancer, he has about half of them and you know what that makes him!
1
The real question is how long can the economy remain strong with a leaderless ship of state? Clearly, the stock market has shown signs there is a problem
4