Bring on the Trump-GOP recession. I can see the Blue Tsunami forming now. By November 2020 it will wash the Trump-Kushner crime family & their abettors out to sea & hopefully into a jail.
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Part of this is Trump's doing. His constant tweets, his back and froth, the tariffs, China trade, trying to wreck NAFTA, etc. makes him a one man wrecking machine. Much of the market uncertainty, since January, 2018, has been the result of the actions an d words of Trump and his Administration. These action, and words, forced the Federal Reserve to be cautious on raising interest rates, in 2019. That is, to prevent a recession.
Besides Trump, corporate profits are expected to decline, because the Trump Tax Law has run its course. Corporations sued profits to buy back stock, keep money overseas, and to give one time bonuses to employees.
Trump, and his administration, are doing all the wrong things to send the US, and world, economy into a recession. Why? Just like Trump's wall, he became fixated on so called "unfair trade agreements" and "Chinese Economic Dominance" to make the United States an industrial power, like it was 50 years ago. Even though manufacturing jobs will never come back to the US.
Trump's "rule by fear, lies and deceit" has damaged this country, and the US presidency, for a number of years to come. If Trump has been successful in one thing he has debased this country and is slowly morphing this country intoa second rate democracy/economic power.
5
Why all the Uber fascination and concern over big corporate profits declining 1 or 2 percent when they were supposed to go up 1 or 2 percent over a 3 month period? All it means is that the top 1 or 2 percent of the economic ladder (and Wall Street inhabitants) have their net worth increase 1 or 2 percent less which is where all big corporate profits go in any case. For the great majority of Americans these are meaningless statistics which only distract from the truly meaningful economic news. Read Paul Krugman and you will have a better understanding of what matters economically.
The tax scam passed by the GOP has caused people in NYC to get crushed, but the joke is on everyone else because all of those people who would normally spend their refund will no longer do so and that's going to cause a big problem. At least the Koch's got their cut!
4
The tech wreck of 2000-01 was ultimately a profits / earnings recession.
And layoffs were the result.
Has the corporate script changed? I doubt it.
3
QE4? Neg interest rates? Another tax cut? Or is it time for an adult finally to remove the Kool Aid?
1
This is all the Democrats' fault. If only they'd approve funding for the wall, the economy would start booming.
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@qisl
oh so the lack of a wall is causing trade to blowup (Trump), the tax cut to blowup the deficit (Trump) and international order to erode to the point where the US is a laughing stock (Trump)
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@qisl
"This is all the Democrats' fault. If only they'd approve funding for the wall, the economy would start booming."
I hope you have your tongue in your cheek .
Or did you mean it is Mexico`s fault because they decided to not pay for the wall like they said they would do ?
If stock prices tumble over oil prices, causing a drop over 2 quarters , isn’t that an argument for a green new deal? Have mobile Exxon and all the huge oil companies become “energy companies “- geothermal, solar, wave, sun power. We can do this! And they will STILL be filthy rich!
3
Stock buybacks have soared in recent years. That reduces the number of shares outstanding. That inflates the earnings per share. Therefore, the earnings recession might already be in-progress. And, without commensurate stock buybacks in the future, and that is unlikely, the earnings recession will probably be even more severe than predicted. That inevitably will lead to an economic recession at-large since the American public can only cut-back, not buy-back, their share of the American spending pie.
5
The "Washington Post" reports today that an alarming number of people are 90-days late on car payments. Such may be another warning sign that a downturn is coming. The logic is inescapable. Trump's economic "policies," including his tax cut for the wealthy and his tariffs have had a negative effect on the economy. Trump believed the tariffs would bring new deals, but except for Mexico and Canada, that "idea" has failed. Now it's time to pay the piper.
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The CEOs will not stand for lower profitability. Their income and jobs depend on ever increasing growth. So how do they get profitable again. Reorganize aka Lay offs. I'm now very sad!
4
Into the mix goes heavy political risk, consisting of incompetent leadership, irrational behavior, Mueller evidence, more Congressional investigations and staunch opposition from THE NANCY.
Without a government shutdown there won't be a repeat of the small economic but big psychological effects on the economy, BUT agreement on immigration fencing is NOT a deal with China - another big risk.
Add BREXIT to deteriorating political conditions in Europe and the clouds suggest a possible perfect storm of economic turbulence...
CASH is GOOD.
1
My personal choices are only anecdotal. Nonetheless, I've cut discretionary spending until Trump decides to stop threatening federal government shutdowns. Especially air travel. I've not purchased three flights that are not work-related. Amazing he's willing to put the lives of air traffic controllers, TSA, flight personnel and the flying public at risk for his own selfish ego. Ah, to be a plutocrat!
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In his zeal to undo everything Obama did, Trump is actually hurting our economy and, coincidentally, my earings. Because his tax cuts for the rich turned out to be tax increases for the rest of us, I've had to get $200 more a month withheld from my wages -- so he's cost me $2,400 a year in taxes. In the words of the Economist, Trump's "combination of tax cuts and border wall is a losing strategy (that) risks causing his party long-term damage."
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Not surprised. Took the analysts long enough to figure out that a large number of Americans simple don't have the disposable income to buy things and services, and many of those who do have already bought or leased their new car, house and other big-ticket items. Also, many of us did and do what we would told we should do - pay off loans, reduce credit card debt, and put some money into savings. That new realism also means not taking out second mortgages or living large on credit, which also reduces demand. The long-term way out of this was realized long ago by Henry Ford: pay workers enough so they can afford the products they make (he also did it to bust the Unions). While this change (pay people a living wage) would reduce corporate earnings in the short term, it would boost the economy in the long run.
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Ford paid the rates he did to stem the high turnover his new assembly lines were causing. People wouldn’t stay very long under the rapid pace when he paid the same as most other industrial and manufacturing jobs. With the doubling of wages, others had to follow suit and that created the consumer base that kept manufacturing at a high level. The union problems came later when a doubled wage didn’t satisfy the greed of the employees who felt that the new, more profitable Model A should benefit them as well.
@From Where I Sit So, what you are saying is that Ford raised wages out of (enlightened) self-interest - fully agree. However, I am struck by your choice of words about the employees demand for better pay later. Why is it "greed" when employees want a larger share of a company's income, but great entrepreneurship if it's the owners who want to maximize their profit margin? What's good for the goose..
2
@Pete in Downtown
Whether I work eight hours selling cheap toasters and my employer makes $100 or I work eight hours selling expensive jewelry and my employer makes $1,000, I still only worked eight hours.
Thanks for the information. Sadly the great Con has made sure to line his buddies pockets with the money promised to his base.
When his supporters find out they were duped, it will be too
late. Many of his supporters will be without, screaming for
medical care and economic support.
Too late!
15
Trump should have been content with the economy he inherited.Instead he began “ fixing” by passing a big tax cut for the wealthy-the average consumer is not getting a refund this year so will not be doing extra spending.He engaged China in a trade war so American companies were deprived of their predictable supply chain.Trump’s advisors should have advised him that the Chinese economy was slowing-ditto Britain’s.Trump plunged into the world of international economics which he thinks he understands- he does not.
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Is there any consensus on how much Brexit will roil the EU and consequently the global economy? As it stands now it appears a "hard" separation is in the cards. Could it trigger an unforeseen chain reaction of negative events on a global basis?
6
"The S&P 500 last endured an earnings recession in 2015 and 2016. It was set off in large part by tumbling oil prices."
S&P 500 earnings per share dropped more than 30% in that period, while the S&P 500 peak to trough price drop was only 12%.
And from that trough to 3Q2018, EPS has doubled. This article is discussing relatively tiny EPS drops.
We should be more concerned about trade wars creating unfavorable conditions for US businesses. Yesterday the WSJ reported a new steel mill under construction in Alabama because of the steel tariffs, which raised steel price per ton by 18%. Each one of the 150 jobs to be created at the mill will cost the customers of the mill $2.4 million in higher steel prices. (the same mill location had only recently laid off 1,000)
The terrible economic policies of the Trump Administration, like trade wars, subsidizing coal and individual income tax increases on the most economically dynamic metros in the country are what we should be worried about.
12
So profits are declining. Not disappearing, not resulting in losses, just less profits. Wow corporate America, no more huge tax cuts? Less money in your deep pockets? And it hurts stock values? Too bad for retirees with 401ks. But it does seem to support Trump economics. After all, trade wars are so easy to win.
10
So, thanks for the Koch Bros et al, who pushed the GOP, Ryan and McConnell, and our fearless President's tax cuts through, which benefitted themselves personally, and threw the rest of us out.
They cut out dividends and gave buybacks back to themselves, and did not help our economy whatsoever.
And now the IRS noted that the tax cuts for the rest of us will be even less, a few hundred dollars.
Thanks for the memories!
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