The goal is to destabilize and crater the economy then have the rich scoop it up for cheap right? With the goal of moving closer and closer to a pure rentier economy?
I think people are a _little_ too eager to jump to "there must be a diabolical master plan". It's _Trump_; it's entirely possible that it's just vibes-based. "Tariffs are good because when I say tariffs the rubes cheer loudly at my rallies" sort of thing.
I don't think cratering the economy actually helps Trump, Musk, or their billionaire friends. Billionaires need a functioning economy to continuously make money. Economic implosion might bring a period of horrible instability after which a few of them may end up at the top, but it's with a non-negligible chance of things like "We triggered a war and all my investment has burnt down" or other nice stuff.
My best guess is that Trump and Musk are led by an intense hatred of everything the "old government" stands for, and acting emotionally, ignoring long term consequences.
These folks want power (control). What's more powerful? Owning 99.99% of all wealth valued at $1 trillion. Or owning 90% of all wealth valued at $100 trillion? Remember it's not about money, it's about power (aka control)...
Well rich people already own most assets. Why would they want their holdings to lose value? Market crashes hurt HNWI's the most, as they have the most exposure.
I am not sure if you feel the second point follows on from the first or stands on its own? I will respond to it as a separate issue and I take it to mean the economy as a whole and not just residences. That being said I agree it is the goal of companies to move that way as they will always push for more control and recurring revenue, but that’s just corporate incentives at play, not global a shadowy plan imho. If we the consumers push back and demand our DVD's and CD's (yes I still use those) there will be players who come forth to take our money for them.
> Market crash won't hurt the super wealthy. Oh no! My assets went to 60m down from 100m!
This is not necessarily the case, due to leverage. For some, it can be "oh, no, my assets went to -200M down from 100M". In particular, it's somewhat common for rich people to fund their lifestyles, and sometimes fund business ventures (this is really playing with fire, but it happens) by borrowing against the stuff they own, which is usually mostly equity. In a really big crash, this can unwind rather messily, as some overstretched super-rich discovered in the previous financial crisis.
Isn't it kind of sad that 100M doesn't even count as super wealthy anymore? That's missing 3 zeros. Yes 100M is enough that you never have to work again and can basically go anywhere and do anything you want in boundless luxury, but it also doesn't even cover the cost of one (1) boat purchased by the actual super wealthy
>Well rich people already own most assets. Why would they want their holdings to lose value?
If wealth is a function of ownership why would you care if your $500m went down to $100m if the purchasing power you cratered is well below what you lost in 'value' while your ownership increased?
Because it's not just the US economy and USD. If a billionaire is over-invested in the US and USD, then a decline in the US economy and global hard and soft power (what we're seeing now) will lead to a decline in their wealth relative to global wealth.
If the global economy shrinks by 80% (using your numbers) then their relative wealth can remain the same. If the US economy shrinks by 80%, then their global wealth has substantially declined while the wealthy in other countries do not suffer as much.
Heh, I just checked and my portfolio peaked on Jan 23 and has been on a downward slope since then. Down about 6%. Wouldn’t have been a bad return if not for a bunch of tax implications.
I cannot entertain any arguments besides rich vs poor when we have arguably the worst income inequality ever. Not that there aren't problems with the "bureaucracy" you mention, but fundamentally these are your friends and coworkers, while billionaires are not. I think your priorities are inverted.
It is always about rich vs poor first because we live in a material world. Everything else is secondary and downstream. I think the wool has been pulled over your eyes by rich con men.
Fundamentally doomed arguing within the existing status quo when we should be moving towards something different entirely seeing as capitalism has served its purpose of seeding the economy ages ago, and now we are 'over the hump' so to speak as we watch wealth concentrate further and its effects.
So long as we live inside a permanent growth mindset anything and everything will be doomed. It makes no sense to live in a system that still rewards rarity rather than celebrating ubiquity, which we cannot escape if the resources we've been seeded with continue to concentrate.
> capitalism has served its purpose of seeding the economy ages ago, and now we are 'over the hump' so to speak as we watch wealth concentrate further and its effects.
I think capitalism as a system is capable of serving the general public.
The bigger problem has been that every Republican administration in my lifetime has passed huge tax cuts for the wealthy and both parties have allowed significant consolidation while also falling all over themselves to bail out big business whenever they got in trouble (often due to their own irresponsibility) while wagging their fingers at regular people suffering the downstream effects.
> The bureaucracy is all encompassing; it's in the military industry, healthcare industry, education industry, the consulting industry, and of course, the government.
I wonder why you didn't mention the energy industry. Hmmm.
They were all on stage together during the inauguration. The take down of barely there social programs so that the rich can keep more of their money to loan to you at usurious rates. Why else would Elon Musk be doing it himself. There has to be a lot of upside for him we only see the downside but he sees a bigger picture as far as his finances.
I’m no deal maker, but it could maybe help if the US avoided pissing off its largest customer - Canada:
“ The top five purchasers of U.S. goods exports in 2022 were: Canada ($356.5 billion), Mexico ($324.3 billion), China ($150.4 billion), Japan ($80.2 billion), and the United Kingdom ($76.2 billion). U.S. goods exports to the European Union 27 were $350.8 billion.”
Depends on how you count. There are tariffs on everyone for steel and aluminium. There are specific tarrifs on Canada, Mexico, EU, and China. Trump promises to back off from NATO, which pisses off pretty much everyone on the European continent (EU or otherwise). The recent counch incident in the Oval Office wasn’t taken well in the Europe as well.
I'm just a humble index-fund-liker who tries to avoid checking things more than once a month, but I'd like to add an observation: Employed people should consider their own job-sector as something to diversify against.
In other words, don't be like those poor Enron employees who had all of their company 401k tied up in Enron stock.
If your nest-egg craters but you have a job, you can sustain yourself and wait for market recovery. If your job vanishes, strong investments won't get hurt too much if you sell to cover the gap. However, if both happen simultaneously...
Diversify for a potential tech sector decline would not mean investing in energy companies. The investment in energy companies is largely driven by the tech sector. If you think the tech sector (particularly the AI portions and possibly cloud hosting depending on what foreign companies and other nations do) are at risk, then so are their investments in the energy sector.
The market might still end up for the year, it will just be a more volatile year.
It would be very unlikely to see another double digit gains year in a row.
That being said, it could also crash hard and not recover to these levels for a decade. There is lots of historical precedence for that - especially at these valuations.
I’m chiefly concerned about tariffs, housing market weakness, labor market weakness, and reversing global liquidity flows (maybe by the end of the year).
Just chilling in mostly gold and treasuries is looking very attractive on a risk adjusted basis.
The fear indexes for Stocks and Crypto are near highs, which historically signals buying opportunities rather than reasons to panic.
The old adage "be greedy when others are fearful" holds true, backed by market history.
More money has been lost trying to time the market than simply staying invested. If this is long-term savings/investing, staying in the market is almost always the best move.
If it’s short-term money, it shouldn’t be in stocks anyway. For short-term capital, treasuries and cash-equivalents are safer plays.
That’s an easy way to sit on the sidelines for a decade as the market doubles. I thankfully stayed invested while my tax accountant suggested selling all my stock in 2019…
Tell your representatives to get their head out of their asses?
Democrats: why aren't you more engaged with this?
Republicans: How did lowering grocery prices turn into dismantling the services of our government, kissing Putin's rear, and daydreaming about Trump Hotel Gaza?
Also, let your friends, family, and loved ones know how you feel.
> Democrats: why aren't you more engaged with this?
They have minorities in both houses, and the Republican majority is currently refusing to impeach the president for seizing unconstitutional powers to do things that they want to see done.
This has shattered any sane legislative process: Even if legislators reach a compromise and pass a new law, Republicans will just ignore the parts they strongly dislike. Again.
The problem for the Democrats is on the one hand they just have to wait for Trump to crater everything and then take over or they could work against it and be blamed for preventing the Trumpish golden age.
The worst part of this is that Trump's followers are never going to blame him for this. They will find someone, anyone else to make responsible. He will stay in power, things will get worse, and they'll keep pointing the finger at absolutely anyone except for him.
We'll be lucky if he and his ilk are out of power sometime in the next decade.
Do you realize how many people don't give two shits about social media or Elon Musk but love to hear from their friends and family?
This is not difficult. There are so many ways to broach the subject. Some examples that I feel: I thought Trump was going to lower grocery prices. Who put Elon in charge of dismantling the US government? Why does Trump want a hotel in Gaza of all the ridiculous things you could possibly want?
Do you realize that this cult has marinated their brain in propaganda, like Fox News, for years/decades and their politic beliefs are now their identity. There is no possible conversion therapy. They have to awake on their own.
I absolutely do, and I know plenty of folks who will express dismay at these issues on the one hand, then turn around and justify Trump and defend him on the other hand. They literally will not connect the dots. Same for folks who think government is corrupt and broken and so choose a corrupt pro-thing-breaker to lead it.
Even though I’m part of the people suffering from his election, over half of US citizens voted for him. They are the only people who can stop him. God bless America.
Your construction is wrong. Just over half of voters selected Trump, about 77 million people. There are about 244 million people that are eligible to vote, and millions more citizens than that.
(The point being, his active support is probably not quite so high as 1/2 the country)
As a general rule, the US economy grinding to a halt would be bad for ~everyone. There'd be specific sectors which might benefit, but for Europe as a whole it would be negative.
One arguable pro for Europe from all of this is that it _does_ seem to be strengthening Europe as an institution a bit.
> I thought that americans would be able to impeach him or congress/senate/judges to stop him, but it seems nothing will stop him.
The Republican party holds the majority (barely) in both houses of Congress. In order to impeach, a majority in the House of Representatives has to vote for it (unlikely) then the Senate becomes the jury for the trial, and needs a two-thirds majority (extremely unlikely) to convict. The only way an impeachment is likely to happen is post-2026 elections. If the Democrats (there is no other party, unfortunately) gain the majority in both houses and a supermajority in the Senate (or the remaining Republicans are more centrist, unlikely), then an impeachment and conviction could happen.
Honestly I don't have any fingers on the pulse right now, but the people still close to watchdog orgs I was once part of seems pretty happy with the effect Trump had in the last week, after a few stressful months. It seems that now, Le Pen will support Macron's government to avoid triggering new elections for sure, as they're now unsure of the effect the US news have on their electorate.
The goal is to destabilize and crater the economy then have the rich scoop it up for cheap right? With the goal of moving closer and closer to a pure rentier economy?
I think people are a _little_ too eager to jump to "there must be a diabolical master plan". It's _Trump_; it's entirely possible that it's just vibes-based. "Tariffs are good because when I say tariffs the rubes cheer loudly at my rallies" sort of thing.
I don't think cratering the economy actually helps Trump, Musk, or their billionaire friends. Billionaires need a functioning economy to continuously make money. Economic implosion might bring a period of horrible instability after which a few of them may end up at the top, but it's with a non-negligible chance of things like "We triggered a war and all my investment has burnt down" or other nice stuff.
My best guess is that Trump and Musk are led by an intense hatred of everything the "old government" stands for, and acting emotionally, ignoring long term consequences.
These folks want power (control). What's more powerful? Owning 99.99% of all wealth valued at $1 trillion. Or owning 90% of all wealth valued at $100 trillion? Remember it's not about money, it's about power (aka control)...
That's just one of many goals. More goals include:
- Selling American assets to billionaires to exploit
- Gutting anything that helps average Americans so as to create justification for lower taxes for the rich.
- Gutting Ukraine so as to cut spending so as to provide tax cuts for the rich.
- Restricting any freedom of speech so that no one may complain about anything.
really, are we trying to model our economy after Russian oligarchy? After free markets have gotten us this far? Quite counter-intuitive and stupid
Well rich people already own most assets. Why would they want their holdings to lose value? Market crashes hurt HNWI's the most, as they have the most exposure.
I am not sure if you feel the second point follows on from the first or stands on its own? I will respond to it as a separate issue and I take it to mean the economy as a whole and not just residences. That being said I agree it is the goal of companies to move that way as they will always push for more control and recurring revenue, but that’s just corporate incentives at play, not global a shadowy plan imho. If we the consumers push back and demand our DVD's and CD's (yes I still use those) there will be players who come forth to take our money for them.
Market crash won't hurt the super wealthy. Oh no! My assets went to 60m down from 100m!
Day to day spending pressure is what tanks. Economy depends on money flow. Most of that flow is necessities (shelter, food)
> Market crash won't hurt the super wealthy. Oh no! My assets went to 60m down from 100m!
This is not necessarily the case, due to leverage. For some, it can be "oh, no, my assets went to -200M down from 100M". In particular, it's somewhat common for rich people to fund their lifestyles, and sometimes fund business ventures (this is really playing with fire, but it happens) by borrowing against the stuff they own, which is usually mostly equity. In a really big crash, this can unwind rather messily, as some overstretched super-rich discovered in the previous financial crisis.
Isn't it kind of sad that 100M doesn't even count as super wealthy anymore? That's missing 3 zeros. Yes 100M is enough that you never have to work again and can basically go anywhere and do anything you want in boundless luxury, but it also doesn't even cover the cost of one (1) boat purchased by the actual super wealthy
>Well rich people already own most assets. Why would they want their holdings to lose value?
If wealth is a function of ownership why would you care if your $500m went down to $100m if the purchasing power you cratered is well below what you lost in 'value' while your ownership increased?
Because it's not just the US economy and USD. If a billionaire is over-invested in the US and USD, then a decline in the US economy and global hard and soft power (what we're seeing now) will lead to a decline in their wealth relative to global wealth.
If the global economy shrinks by 80% (using your numbers) then their relative wealth can remain the same. If the US economy shrinks by 80%, then their global wealth has substantially declined while the wealthy in other countries do not suffer as much.
If I understand your argument it is that the rich should want to crater the market because even if they lose money, their purchasing power increases?
That would only work if they have large cash reserves, we have data that shows most billionaires/millionaires don't their wealth is tied up in assets.
Because of that if the market does crater their businesses/assets may in fact get wiped out.
The rich don't want volatility or crashes, it rarely benefits them.
i guess you converted all your investments to cash then?
Heh, I just checked and my portfolio peaked on Jan 23 and has been on a downward slope since then. Down about 6%. Wouldn’t have been a bad return if not for a bunch of tax implications.
I haven't had anything resembling cash or investments in years!
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I cannot entertain any arguments besides rich vs poor when we have arguably the worst income inequality ever. Not that there aren't problems with the "bureaucracy" you mention, but fundamentally these are your friends and coworkers, while billionaires are not. I think your priorities are inverted.
It is always about rich vs poor first because we live in a material world. Everything else is secondary and downstream. I think the wool has been pulled over your eyes by rich con men.
Fundamentally doomed arguing within the existing status quo when we should be moving towards something different entirely seeing as capitalism has served its purpose of seeding the economy ages ago, and now we are 'over the hump' so to speak as we watch wealth concentrate further and its effects.
So long as we live inside a permanent growth mindset anything and everything will be doomed. It makes no sense to live in a system that still rewards rarity rather than celebrating ubiquity, which we cannot escape if the resources we've been seeded with continue to concentrate.
It is and has always been labour vs capital.
> capitalism has served its purpose of seeding the economy ages ago, and now we are 'over the hump' so to speak as we watch wealth concentrate further and its effects.
I think capitalism as a system is capable of serving the general public.
The bigger problem has been that every Republican administration in my lifetime has passed huge tax cuts for the wealthy and both parties have allowed significant consolidation while also falling all over themselves to bail out big business whenever they got in trouble (often due to their own irresponsibility) while wagging their fingers at regular people suffering the downstream effects.
> The bureaucracy is all encompassing; it's in the military industry, healthcare industry, education industry, the consulting industry, and of course, the government.
I wonder why you didn't mention the energy industry. Hmmm.
https://www.opensecrets.org/industries/summary?cycle=2024&in...
are you okay?
Assuming you're correct, Elon Musk and Donald Trump are about the least qualified individuals in the America to resist them.
We need accountable politicians, not businessmen and property moguls running things.
They were all on stage together during the inauguration. The take down of barely there social programs so that the rich can keep more of their money to loan to you at usurious rates. Why else would Elon Musk be doing it himself. There has to be a lot of upside for him we only see the downside but he sees a bigger picture as far as his finances.
I’m no deal maker, but it could maybe help if the US avoided pissing off its largest customer - Canada:
“ The top five purchasers of U.S. goods exports in 2022 were: Canada ($356.5 billion), Mexico ($324.3 billion), China ($150.4 billion), Japan ($80.2 billion), and the United Kingdom ($76.2 billion). U.S. goods exports to the European Union 27 were $350.8 billion.”
https://ustr.gov/countries-regions
lol, they're pissing off 4 of those actively, or am I getting the count wrong?
Depends on how you count. There are tariffs on everyone for steel and aluminium. There are specific tarrifs on Canada, Mexico, EU, and China. Trump promises to back off from NATO, which pisses off pretty much everyone on the European continent (EU or otherwise). The recent counch incident in the Oval Office wasn’t taken well in the Europe as well.
I’m seriously concerned that the market is going you crater in the next year, do what is the rational investment strategy?
Trust Buffett and buy BRKB?
Try to weather the storm with VOO?
Buy treasury bonds?
I'm just a humble index-fund-liker who tries to avoid checking things more than once a month, but I'd like to add an observation: Employed people should consider their own job-sector as something to diversify against.
In other words, don't be like those poor Enron employees who had all of their company 401k tied up in Enron stock.
If your nest-egg craters but you have a job, you can sustain yourself and wait for market recovery. If your job vanishes, strong investments won't get hurt too much if you sell to cover the gap. However, if both happen simultaneously...
Weirdly, if you work in tech, that would be energy companies I guess?
Diversify for a potential tech sector decline would not mean investing in energy companies. The investment in energy companies is largely driven by the tech sector. If you think the tech sector (particularly the AI portions and possibly cloud hosting depending on what foreign companies and other nations do) are at risk, then so are their investments in the energy sector.
The market might still end up for the year, it will just be a more volatile year.
It would be very unlikely to see another double digit gains year in a row.
That being said, it could also crash hard and not recover to these levels for a decade. There is lots of historical precedence for that - especially at these valuations.
I’m chiefly concerned about tariffs, housing market weakness, labor market weakness, and reversing global liquidity flows (maybe by the end of the year).
Just chilling in mostly gold and treasuries is looking very attractive on a risk adjusted basis.
Or it could be down for many decades. The Nikkei 225 is only just this year reaching where it was in 1989.
Cash or treasury bonds, if you believe the thesis.
https://www.reuters.com/markets/rates-bonds/bond-traders-wav...
The fear indexes for Stocks and Crypto are near highs, which historically signals buying opportunities rather than reasons to panic.
The old adage "be greedy when others are fearful" holds true, backed by market history.
More money has been lost trying to time the market than simply staying invested. If this is long-term savings/investing, staying in the market is almost always the best move.
If it’s short-term money, it shouldn’t be in stocks anyway. For short-term capital, treasuries and cash-equivalents are safer plays.
If you seriously believe the market is going to crater, save up some money to snatch up bargains in the aftermath.
That’s an easy way to sit on the sidelines for a decade as the market doubles. I thankfully stayed invested while my tax accountant suggested selling all my stock in 2019…
Tell your representatives to get their head out of their asses?
Democrats: why aren't you more engaged with this?
Republicans: How did lowering grocery prices turn into dismantling the services of our government, kissing Putin's rear, and daydreaming about Trump Hotel Gaza?
Also, let your friends, family, and loved ones know how you feel.
> Democrats: why aren't you more engaged with this?
They have minorities in both houses, and the Republican majority is currently refusing to impeach the president for seizing unconstitutional powers to do things that they want to see done.
This has shattered any sane legislative process: Even if legislators reach a compromise and pass a new law, Republicans will just ignore the parts they strongly dislike. Again.
The problem for the Democrats is on the one hand they just have to wait for Trump to crater everything and then take over or they could work against it and be blamed for preventing the Trumpish golden age.
tsla ftw :)
The worst part of this is that Trump's followers are never going to blame him for this. They will find someone, anyone else to make responsible. He will stay in power, things will get worse, and they'll keep pointing the finger at absolutely anyone except for him.
We'll be lucky if he and his ilk are out of power sometime in the next decade.
Nah. Just talk to people. Not behind a screen. So many more people saying wtf than go Trump.
The propaganda machine just needs to kick in. They will all be doing Elon salutes in 6 months.
Personally, I salute only Chairman Steve. All hail!
Do you realize how many people don't give two shits about social media or Elon Musk but love to hear from their friends and family?
This is not difficult. There are so many ways to broach the subject. Some examples that I feel: I thought Trump was going to lower grocery prices. Who put Elon in charge of dismantling the US government? Why does Trump want a hotel in Gaza of all the ridiculous things you could possibly want?
Do you realize that this cult has marinated their brain in propaganda, like Fox News, for years/decades and their politic beliefs are now their identity. There is no possible conversion therapy. They have to awake on their own.
>>This is not difficult
Right! It is impossible not difficult.
I absolutely do, and I know plenty of folks who will express dismay at these issues on the one hand, then turn around and justify Trump and defend him on the other hand. They literally will not connect the dots. Same for folks who think government is corrupt and broken and so choose a corrupt pro-thing-breaker to lead it.
Have you tried lately? Since Elon started being a dumbass?
Even though I’m part of the people suffering from his election, over half of US citizens voted for him. They are the only people who can stop him. God bless America.
Your construction is wrong. Just over half of voters selected Trump, about 77 million people. There are about 244 million people that are eligible to vote, and millions more citizens than that.
(The point being, his active support is probably not quite so high as 1/2 the country)
I am european, and I don't really know if it's really a bad thing for europe.
I would say it's bad to lose an ally like the US, especially for defense, but what about trade?
The problem is that american hegemony also bother some people, and those people dislike Trump but are they still happy for the US to be less strong?
I would bet there are some europeans who are happy about the US slowing down, but I don't think there are many.
I thought that americans would be able to impeach him or congress/senate/judges to stop him, but it seems nothing will stop him.
Maybe american democracy is flawed and russia managed to crack it.
As a general rule, the US economy grinding to a halt would be bad for ~everyone. There'd be specific sectors which might benefit, but for Europe as a whole it would be negative.
One arguable pro for Europe from all of this is that it _does_ seem to be strengthening Europe as an institution a bit.
> I thought that americans would be able to impeach him or congress/senate/judges to stop him, but it seems nothing will stop him.
The Republican party holds the majority (barely) in both houses of Congress. In order to impeach, a majority in the House of Representatives has to vote for it (unlikely) then the Senate becomes the jury for the trial, and needs a two-thirds majority (extremely unlikely) to convict. The only way an impeachment is likely to happen is post-2026 elections. If the Democrats (there is no other party, unfortunately) gain the majority in both houses and a supermajority in the Senate (or the remaining Republicans are more centrist, unlikely), then an impeachment and conviction could happen.
I hope to see before I die a united Europe with zero dependance on the USA, culturally or economically.
Honestly I don't have any fingers on the pulse right now, but the people still close to watchdog orgs I was once part of seems pretty happy with the effect Trump had in the last week, after a few stressful months. It seems that now, Le Pen will support Macron's government to avoid triggering new elections for sure, as they're now unsure of the effect the US news have on their electorate.
Archive link https://archive.ph/GDkyg
https://archive.is/51Zue
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So? The Economist wasn't created one day ago.
I mean, you can say "The Economist, lollz", but that's a separate issue.