The stock market plummeted again this morning, in response to a number of factors. Trump’s tariffs (and the extension of tariffs with Mexico and talk of extensions elsewhere) are destabilizing factors. So is the slowing of growth in the economy and the bad jobs report. American auto exports also fell this past quarter. These indicators are like ducks, you get a certain number of them to line up and they spell financial doom.
And remember: Trump’s big tariffs haven’t hit yet. They go into effect tomorrow. That will cause prices to rise and consumers to pull back. Trump has set a 50 percent tariff on semi-finished copper imports. He has also imposed a 50 percent tariff on Brazilian goods, following through with his threat to punish the country over several political disputes. Canada will see tariffs on many of its exports to the United States increased to 35 percent from 25 percent.
Yet despite all this worrisome news, investors are going nuts buying up super-risky assets.
The financial economy is immersed in the kind of wild gambling we saw leading up to the 2008 financial crisis. We’re seeing it all over again — this time with cryptocurrency tokens, meme stocks, junk bonds, shares of Meta and Microsoft, and the reemergence of blank-check entities (better known as SPACs, or special purpose acquisition companies).
I attribute all the high-risk gambling to the high-risk gambling of the gambler-in-chief who sits in the Oval Office. He’s into crypto and meme stocks, and has done well with his own blank-check entity. Plus, he’s a conman’s conman.
Investors figure he must know what he’s doing — and even if he doesn’t, he’s shown no compunctions about using every lever of government power to keep the party going. So investors are following him, although more and more of these investments look like pyramid schemes — whose return depends on recruiting ever more people into buying and selling them, until some schnooks are left holding the bag.
Meanwhile, investors are pouring money into AI, without knowing what it is or which if any corporation will come out on top. Meta’s revenue jumped 22 percent year over year to $47.5 billion and beat Wall Street’s targets by the widest margin in more than four years. Microsoft has also made huge investments in AI.
The AI gold rush started three years ago with the launch of ChatGPT, and most of the financial rewards so far have gone to Nvidia — whose revenue has jumped 10-fold since ChatGPT’s launch, with its market cap crossing the $4 trillion mark earlier this month.
This does feel like a gold rush. And it’s taking place on top of the most blatant corruption this country has witnessed since the first Gilded Age of the late nineteenth century.
And pay attention to the newest player in Trump world, Comptroller of the Currency Jonathan Gould. Expect him to cater to pressure from Trump as the agency begins overseeing the stablecoin market, where not coincidentally the Trump family has its own stablecoin business. This is a new industry we’re looking at here. And Gould is in the early stages of implementing the new stablecoin regulatory regime created under the GENIUS Act, which Trump signed into law earlier this month. The legislation gives the Comptroller expanded oversight of nonbank stablecoin issuers. And you know he’s not going to find fault with any of the Trumpcoins, or how they’re managed, right?
It’s starting to feel as if the financial economy is no longer moored to the real one. Treasury Secretary Scott Bessent went so far yesterday as to characterize the new “Trump accounts” — tax-deferred investment accounts created in Trump’s sweeping Big Ugly tax law earlier this month — as a “transformative tool” for building long-term wealth and a “backdoor for privatizing Social Security.”
Hello? So the Trump regime wants us to give up on Social Security and become gamblers in the stock and bond markets? At the very time when the finance is becoming so frothy that such gambling is exceptionally risky?
What happens next is what happened in 2008, a big bubble bursting, a lot of job instability and layoffs across the boards. And of course the brutual irony is that the top players will end up getting a governmental bailout. So they truly have nothing to lose. It’s the little guys, as usual, that are going to take the brunt of it.
The only silver lining is that the electorate will vote out the bums that hurt them in 2026. Sad that another lesson of this severity had to happen but the electorate is notorious for amnesia.
what I don’t understand is the correction on job losses for may and June. what’s different now than the reporting then? Numbers don’t change just like that. who’s responsible for jimmying those numbers in the first place??
Do you not understand the simple mechanics of an internet search? I did a very simple search and got this result rather quickly:
“Despite uncertainty around tariffs in recent months, the U.S. economy had been largely seen as resilient, thanks in large part to jobs reports that appeared to show a strong rate of job creation.
That narrative shifted suddenly on Friday thanks in large part to revisions to the June and May reports. Revisions to jobs reports are not uncommon and are updated to reflect fuller data from state records. But the changes combined with July’s weak report offer a starkly different overall picture of the U.S. economy, which only added 19,000 jobs in May and June, rather than the 291,000 jobs the reports had initially found.
Most of the gains have been in health care — and without those, the last three months of jobs gains would have shown a net job loss in each of the last three months.”
This is from an NBC article (“The U.S. job market was weak in July, and previous months were worse than thought”; full article at https://www.nbcnews.com/business/economy/us-jobs-report-july-downward-revisions-worse-than-thought-rcna222442). The quoted material comes about halfway down the page. For what it’s worth, might I inquire as to your thoughts on another bit of information found in the article: “Last August, under the Biden administration, the Bureau of Labor Statistics said 818,000 fewer jobs had been created over a 12-month period than initially thought.” (The “818,000 fewer jobs” bit is hyperlinked to another article.)
My original search was simply for “why was the jobs report revised” and the AI overview that apparently is the very first result for any search included
“The jobs report was revised due to updated data from businesses that initially didn’t report their figures. The Bureau of Labor Statistics (BLS) issues revisions as more comprehensive payroll data becomes available. This means the initial report is based on a partial sample, and subsequent revisions provide a more accurate picture of the job market.”
An additional point under the “detailed explanation” section featured this
“The initial jobs report is based on data collected from a portion of businesses, typically around 73%.”
So, again, you could find this information if you really wanted to but it does seem at times that you just want to play gadfly, especially when you focused on the jobs numbers which were not really the focus of this article. A simple mention of “bad jobs report” and you want to know who was “jimmying the numbers” yet you didn’t inquire about the auto exports drop or the “slowing growth in the economy” much less ask about the bulk of the article.
Check out Max’s take on crypto. With all the attention given to Epstein, this monumental scam has gone largely unnoticed.
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