Talk to enough Wall Street executives, and you’ll come away with something deeply troubling: No one knows what’s going to happen to the markets and, by extension, the economy — and it’s scary.
I know what you’re saying, these people never know what’s going on, or they would have seen the 2007-08 financial crisis months before it happened.
Truth be told, they saw it coming, but most were too terrified to say anything about it, while others, like hedge funders, didn’t want to draw attention to their bets on the market.
No, this time is different.
Market forecasts are all over the place due to major policy mistakes: spending, money printing and more that screw with their normal analytical tools.
The politics and politics of the two presidential candidates add to the confusion.
In other words, it’s not a good time to be an economic forecaster, or for that matter an American investor, consumer, or worker trying to prepare for the future.
And we can thank clowns for setting public policy and doing some really crazy, unprecedented things.
Yes, the ruling class we have in this country is probably the stupidest that history has offered.
Again, it’s bipartisan idiocy, Wall Street types will tell you, that goes back at least two decades, though the latest vintage of so-called pundits acting like idiots is even more troubling because stocks continue to grow up
Former (and possibly future) President Donald Trump looked steady and confident against a stuttering and outspoken Joe Biden in Thursday’s debate.
But Trump is no bargain either.
Mind you, he promised endlessly to build a wall on the southern border to prevent mass migration with his pressures on the welfare state, but because he spent most of his four years in office spinning his wheels his in petty quarrels, he never succeeded.
Meanwhile, Biden has spent nearly four years as a barely sensible leader of the free world (as his debate performance again showed).
He engineered the immigration disaster because he fears alienating the open-borders, progressive Democratic Party base while the nation’s social fabric erodes under the pressure of importing poverty and high crime.
But it’s the bipartisan stances on the economy that really give the forecasters a run for their money.
Trump added to the estimated and staggering national debt of $8 trillion during his four years in office, and you can’t blame all the COVID relief measures and the shutdowns that stunted growth in his last year in office.
Before that, he did some big things like cut taxes and reduce regulations, and that boosted things like employment and wages.
It was a time of peace and prosperity, perfect for fixing entitlements (ie future Social Security costs and more) and ending the mess of the federal government.
Yet he did just the opposite.
When COVID hit, he continued to spend almost until his last day in office, when it was clear that the economy was recovering and the pandemic was on its way to an end.
Trump offers more of the same if re-elected, which means a whole new level of uncertainty to consider given the size of the debt now on the books, which we will have to pay down at some point.
Biden’s excessive spending
Speaking of debt, the size of it is getting bigger and more worrisome because when it comes to spending, Sleepy Joe is Trump on steroids.
It promises to double down if elected: student debt relief, more spending on useless green energy taxes, an explosion of a dubious industrial EV policy everywhere, and government-subsidized chip manufacturing is just the beginning.
If he is replaced (a real possibility after his debate performance), whoever comes in will offer the same policies without the verbal incoherence.
Recently, the media has been clamoring (no doubt prompted by Sleepy Joe executives) that Trump has increased the debt more than Biden, but Wall Street professionals tell me that’s a bit of an apples-to-oranges comparison since the economy largely came to a halt. during Trump’s last year in office.
When Biden took office while the economy was improving, he bristled at stimulus spending.
The pros point to an overlooked stat.
Early next year, the Congressional Budget Office is projecting that debt growth under Biden will likely match or exceed Trump’s.
It now stands at near-historic levels, 120% of all US Gross Domestic Product.
This is down from its pandemic high, but not by much to be really significant.
What if we have to spend more because of the war?
What happens if our creditors decide that the US dollar is too much of a commodity because of all the expenses?
Biden has injected both our economy and our culture with an overwrought awakening through his appointees to the regulatory state.
Trump is seeking revenge against a political party that is literally trying to put him in jail.
Wall Street is now tearing its collective hair out trying to fit those variables into its computer models, with so many crazy things that have created black box economics where prediction is nearly impossible.
This is why the smart money is so scared.
Charles Gasparino is the author of the forthcoming book Go Woke, Go Broke: The Inside Story of the Radicalization of Corporate America.
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