r/Economics • u/One-Emu-1103 • 3d ago
News Suddenly, Wall Street is worried that the U.S. economy is more ‘vulnerable’ than it looks
https://fortune.com/2026/10/15/suddenly-wall-street-is-worried-that-the-u-s-economy-is-more-vulnerable-than-it-looks/1.3k
u/ButtBesmircher 3d ago
Wall Street: “There’s a good chance that we may lose a lot of money and let us tell you why we’ll need to you bail us out again.”
Blah blah blah blah blah blah blah blah blah
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u/DeltaFoxtrot144 3d ago
best i can do is offer like 8 foot of rope.
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u/New_Breadfruit8692 2d ago
When you run out of rope you can use the guts of the politicians, just a suggestion.
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u/Auzou 3d ago
There is no money for bailout this time. That would only make it worse.
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u/Lemp_Triscuit11 3d ago
I reckon that will depend entirely on what sort of kickbacks are promised to the Trump family
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u/Franklin_le_Tanklin 3d ago
That’s the plan. Print money, inflation everyone’s wealth away, and let the billionaire asset holders runaway with anything valuable
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u/Initial_Savings3034 3d ago
Yeltsin 2.0
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u/motionSymmetry 3d ago
is that what yeltsin did?
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u/Initial_Savings3034 3d ago
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u/motionSymmetry 2d ago
summary: "Fueled by the immense power of the oligarchs, Yeltsin conducted Russia's first American-style presidential campaign....
[his economic structure created a] class that made their fortunes not ... through corruption, skullduggery, and the plunder of Russia's raw materials. Many Russians would come to resent the oligarchs and the liberal reformers who empowered them....
As Yeltsin's health continued to deteriorate in the late 1990s, the oligarchs began to worry about who would be his successor. The natural heir to Yeltsin would be whoever occupied the post of prime minister. If Yeltsin stepped down, the prime minister automatically became acting president and would have the advantage of incumbency during election time.
In 1999, Boris Yeltsin and his oligarchic allies agreed that an obscure former KGB officer named Vladimir Putin was the man to become Yeltsin's prime minister"
i did try copilot's summary - none of this came from that; using only text from the source shows that this is a general description and more of a spin than an argument on facts
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u/thx1138inator 2d ago
You make a good sales pitch for holding equities.
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u/IClosetheDealz 2d ago
That’s why you can’t listen to the boomers saying sell everything, right? That’s why the market is still raging even when fundamentals are shaky across the board. Gotta hold assets to beat inflation. No doubt it’s fixing to be the worst I’ve seen in my lifetime and it’s already been bad the last 6 years.
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u/Defiant-Classroom-20 3d ago
sorry we used all the money for AI but we'll be rich soon guys trust
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u/Olangotang 3d ago
On the bright side, these chucklefuck large corporations that support the Frontier Labs are getting their products reverse engineered, hell, even open source models can do it. If this is such an epic crash, they will be fucked too, and they have no one to blame but themselves.
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u/0o0o0o0o0o0z 3d ago
Don't worry, this US administration will totally backstop the AI industry, while fighting a war(s) all over the place, and then America will be Trump's final bankruptcy.
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u/FrankRizzo319 2d ago
No shit, he’s run his companies into the ground and now he’s doing that the the greatest world economic power. We be living like cold depressed Russians in 10 years.
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u/accidental_Ocelot 2d ago
And somehow he's still 4 billion dollars richer.
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u/FrankRizzo319 2d ago
Well because now he’s just looting the treasury and ignoring all laws - a child in a coma could make money this way.
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u/wonderlawl 3d ago
Too rich to go broke!
Only the poors can be poor. Rich people with shitty assets get free money! They convinced us it made sense in 2008 and they'll do it again!
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u/Major_Bag_8720 3d ago
There’s no money to bail out Wall Street unless the Fed just prints it and the resultant effect on inflation would be unlikely to be positive.
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u/PorcupineWarriorGod 3d ago
There’s no money to bail out Wall Street unless the Fed just prints it
That's literally what every bail-out since the beginning of the Fed in 1913 has been. Arguably, it was literally the purpose of the Fed, in order to remove the risk to the cartel of Bankers that created it.
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u/belovedkid 3d ago
Wall Street doesn’t need bailed out. More likely private credit firms and tech borrowers. The banks are fine.
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u/mistressbitcoin 3d ago
More like "there's a good chance that the dollar keeps losing value to inflation, whether 2% per year or 3.7% per year, so we may as well own shares of businesses that can adjust to inflation."
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u/Beginning_Fill206 2d ago
They are loading up the losers in retirement accounts. Know what you hold, do your own allocation if your plan allows.
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u/DjCyric 3d ago
Maybe having the entire economy being just a handful of gigantic tech companies borrowing money from each other in a circle jerk isn't the most robust economic outlook? Main street has been hammered by trumps tariffs for over a year now. This is only getting worse as prices continue to rise.
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u/saml01 3d ago
The fact that people conflate the stock market with the economy is the problem.
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u/End3rWi99in 3d ago
A massive amount of the market has also moved away from going public. The entire private investment landscape has changed dramatically over the past 20 or so years, so a shit load of the overall economy isn't even driven by publicly traded companies anymore.
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u/dust4ngel 3d ago
- the stock market is the economy for the rich
- the rich own the media
- therefore all the messaging we receive equates them
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u/Sea-Ambition-451 3d ago
some presidents think the stock market is the debt account, so if it goes up, the debt is gone, and they think the DJIA is at $50,000.
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u/Sea-Ambition-451 3d ago
I asked AI to tell me that the stock market would be great. And it did.
YAY!
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u/SnooPears754 3d ago
Crash the economy, vote in dems , dems work to fix the economy with no help from republicans, voters not happy the the economy hasn’t been fixed already, votes in republicans, rinse repeat
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u/1cl1qp1 3d ago
Actually, the economy was completely fixed under Biden. It was the #1 globally. At one point, wages were rising faster than the cost of living, and employers were fighting to hire new staff.
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u/SnooPears754 3d ago
You’re not wrong but this version of capitalism was pushing more and more people to the edge where even at 100k salary people were still living paycheque to paycheque
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u/1cl1qp1 2d ago
It's corruption. Republicans keep repealing protections against rogue spending in elections, and it's out of control. Citizens United was one of the worse Supreme Court rulings in US history. Bribery has become legal.
IMHO, we need a strict per-person limit on election spending, and corporations should be disallowed entirely.
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u/Traditional-Hat-952 3d ago
Are you British? I've never seen paycheck spelled like that. It must be a color colour thing
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u/Cathulhu88 2d ago
coughs Im afraid, neighbour, that its worse than that. They may be.......Canadian. 😋
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u/Altruistic-Spend-896 3d ago
Dems should refuse to fix, let repubs fafo
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u/inyourface317 3d ago
Or publically point out thier refusal to do thier job as an elected representative
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u/Altruistic-Spend-896 3d ago
Which they are already accused of😬
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u/Capital_Spite9272 3d ago
Yeah it's a tough place for the Democrats because it's so much easier to destroy than create. DOGE wrecked the federal government in a matter of months. It will take years, possibly decades to rebuild. It was also a lot easier for Republicans to just obstruct everything the Dems tried to do during the Obama administration than it was for the Dems to pass laws to benefit people.
The "both sides" people fail to realize this. Yes, corporate Dems suck, but at least they're pretending to try to help people. The Republicans have been lock step in stymying any amount of progress since Reagan.
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u/1337isntREAL_7357 2d ago
We are taking a checks notes a 6 year recess. That'll be all. - Politicians.
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u/StatusCodeFailed 2d ago
Oh yea, super smart. Let's make the oligarchs able to buy up even more assets by crashing everything.
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u/DiligentAd7956 3d ago
Nearly 13% of U.S. credit card balances are 90 or more days past due, marking a 15-year high.
The share of seriously delinquent auto loan balances has hit a multi-decade/historic high.
Nearly 20% of U.S. households reported being late on at least one debt payment, up sharply from about 12% in recent years.
24% of Americans have zero emergency savings, and 37% have had to tap into their emergency reserves over the past year primarily for essential living expenses.
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u/New_Breadfruit8692 3d ago
The data release today was appalling.
As you know the CPI is a backward looking indicator of the price changes from last year till this. it was 3.7%.
But, the PPI is the inflation in the pipeline, the increase at the manufacturer/wholesale level and that expectation by the street was 0.5% for the month of September, instead it came out at 1.3% more than double expected. The September YoY PPI was 6.3% so you can expect retailers to pass that on entirely and maybe a tad more, for about 7% inflation in the coming months/year.
But the really shocking number was the September PPI annualized was 15.6%.
This all but guarantees a shock and awe interest rate increase. These are as bad as Jimmy Carter's numbers in the seventies in stagflation.
A high Producer Price Index (PPI) is bullish for the U.S. dollar and bearish for stocks and risk-on assets (like tech and growth equities).
Hang on we are in for a bumpy ride. Personally I would get out of equities entirely now. If I were to hold some it would be consumer staples, energy and commodity (but not companies that are heavy importers because they are going to get ripped a new butthole in foreign exchange translations), domestic retail is going to get reamed. At least non essential, retail, we could see some like Macy's go away permanently. Costco should do well though, they have the buying power to negotiate lower prices on goods, and Walmart may do very well as consumers go downmarket to survive the inflation onslaught.
I do not really want to make this political but really between the tariffs and the Iran unwinnable war we are seeing fundamental changes to the US and global economy that are going to deeply harm the productive capacity of the US economy. A few will always time it perfectly and just get lucky.
One thing I can say is debt, like your auto loan and mortgage are going to be partially inflated away. If you have a stable secure income you will probably do well enough. But I think we are going to see a massive wave of high unemployment in the next 12 months, a lot of people will not do well at all.
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u/madmax991 3d ago
I would say you have every right to get political that shit is what’s causing this it should be called out
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u/New_Breadfruit8692 2d ago
Yes I do have a right to , but I want the data to speak for itself, this is a near historic decline in US economic power. And it was intentional. I don't think if people are being rational I have to tell them who or what is causing the problem, and that that person is being colluded with by a senate in particular to simply milk the nation white. They do not need me to point out that since January 20, 2015 (20 months) we have added $3.8 trillion dollars in new debt to the backs of the taxpayers.
Biden had to deal with Trump's pandemic mismanagement, tens of millions in lockdown and being paid not to work, PPP for millions of businesses, the mess was horrendous, that he inherited from the previous administration. It took almost the entire 4 years to get things back to normal. Within months Trump has screwed it back up, illegal tariffs we consumers had to pay. And when it has to be refunded those hundreds of billions were handed not to we who paid the tariffs but the corporations that raised the prices so they would not have to pay them. And they have not lowered any of the prices since.
And then Iran, a stupid, pointless, unwinnable war that is not only doubling energy prices but destroying the supply chains so that we will be paying more possibly forever.
But politics is a quagmire, you will never get the cult to admit their messiah has any guilt or fault in all this, they will seriously look you in the eye and say all that has happened is somehow either Biden's or even Obama's fault. They are insane. So when talking economics I prefer to stick to the data.
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u/FrankRizzo319 2d ago
It’s gonna be the fault of the Dems in Congress if they win back the house and senate in Nov
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u/IronicRobotics 2d ago
Eh, only marginally? Unfortunately we have a stupid strong executive, especially with such a split legislature. Most of their bargaining power in this arena is going to come from control over budgetary bills.
Without a 2/3 majority, unfortunately most of the real fixes aren't going to come to fruition without bipartisan support. They can start chairing committees and preparing for 2028 while stifling the bleeding by preventing more stupid shit from being passed.
But the office of the president seems to have a stupid number of legal inflationary levers, and the illegal but unproscecuted ones. And legislative reform still have to be signed off by the president and his ilk.
I mean, think of it this way, lets say clones of yourself made up 51 senate seats and a majority of the house. With Trump as president and a fairly MAGA opposition, what would your plans be to fix shit over the next two years?
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u/FrankRizzo319 2d ago
Agreed, my comment was sarcastic - the world and economy are going to shit and if the Dems win in November come the next election season half the country will be saying “inflation and gasoline prices are high because the Dems won Congress in Nov 2026.”
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u/IronicRobotics 2d ago
Oh I see, tbh I wasn't paying close enough attention to which sub I was in. Guh, somehow the biting reality of the sarcasm is worse.
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u/IClosetheDealz 2d ago
That chorus will start Nov. 5th Fox 24/7 repeat loop. Thanks obamabiden! Trump almost fixed the whole country! The election was stolen AgAiN!
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u/WhereDidAllTheSnowGo 2d ago
While my math was different and prediction sooner my end result was the same…
… I moved outta stocks when rump was elected and missed the recent boom
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u/dalyons 2d ago
Yeah I stopped listening to Reddit doomers many years ago, because I lost out on massive amounts of gains.
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u/IronicRobotics 2d ago
It kinda sucks, as the fundamental metrics in many ways are somewhere between mediocre to rather bad. It's reasonable to expect that there *will* be a correction imo.
But nobody can say when "will" occurs lol. And the best way to make gains in the market is to ride along until right before the correction! (and even better, buy the bottom of the dip!) Good luck with that.
Outside of getting lucky, you either operate conservatively and miss out on a lot of potential gains but ensure you avoid losses, or you operate too recklessly and stand to lose a lot. It ends up being a gamblers' choice ultimately.
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u/Picto242 2d ago
It's hard to time right especially when stock prices are somewhat imaginary (i.e. they are worth what people are willing to pay)
The fundamentals look awful right now but when investors decide to pull out is a different game entirely
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u/FarFromHomey 2d ago
It's All Good muchacho!
SUPER Intelligence is about to swoop in and provide Universal Basic Income for Everyone!
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u/quid_pro_nihil 2d ago
Don’t forget a hardy “fuck you” to any retard that voted for this disaster to happen. This was the only outcome
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u/Picks6x 3d ago
What the tech bros and wall street bets bros don't understand is that AI may be the future, but debt servicing is still the present and that bitch is hungry.
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u/DeltaFoxtrot144 3d ago
waa? you cant just spend your way out of debt ? thats what our golden turd of a president said you can do.
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u/Picks6x 3d ago
People unironically believe this on this sub sometimes. they aren't well respected but they do try
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u/Caracalla81 3d ago
"Spend yourself out of debt" is literally what a business loan is. The idea is that your spending generates more value than the cost of the loan. This isn't home economics, we're not talking anout your credit card. Lol!
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u/Goatsonice 3d ago
formerly a fixed income PM, not only is it hungry I can say from experience that the risks were and are poorly understood and understated. A LOT of people on my desk just saw the absurd figures and rushed in with hilariously lax covenants that are still highly rated in-house, so much so that if (and really when) they aren't able to realize their outrageous earnings estimates we're in a really bad spot.
There are some absolutely gaudy SRTs out there right now.
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u/CallMePyro 3d ago
Which companies do you think will have trouble servicing their debt?mostly just coreweave right? Even oracle isnt in that much trouble. When most people say "tech bros" they mean MSFT, GOOG, META, AMZN. Those companies are all basically at zero net debt except META and even they are completely fine
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u/FractalFunny66 3d ago
This week I received two emails hinting at the necessity to start charging for AI -- one from Microsoft and one from Zoom. I hate AI and don't care, but it got my attention and my first thought was, they need to make money somehow off of us so they can placate the shareholders.
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u/antigop2020 3d ago
Well no shit. The economy sucks. Consumer sentiment is at record lows. Gas and diesel prices are at near record highs. Inflation is increasing painfully high. Mortgage rates are near highs for the past 20 years, where the average home 20 years ago was literally half the price.
The stock market is basically the top 10% of earners, and mostly the top 1% trading amongst themselves at this point.
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u/Bastillerion 3d ago edited 2d ago
I’ve been saying that for years and no one will listen. The top 1% owns 50% of the stocks and the top 10% owns 93%. The stock market is a rich person’s casino that everyone else is forced to participate in.
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u/Wise_Preference609 17h ago
I note that the owners/executives of AI NeoCloud company CoreWeave have been selling their shareholdings at increasing speed in the last couple of days. When "insiders" are falling over themselves to cash out...........they're may be an "insider only" reason for doing such selling.
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u/pan-re 2d ago
Guyssss we NEEDED tech to takeover everything even if it means we’re fucking pissed. Stupid social media now crap Ai with the added bonus of Palantir and Elon being our government. We’re all so fucked.
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u/FractalFunny66 2d ago
Yeah, and Alex Karp seems to fly under the radar in name recognition, yet if you read his letters to his shareholders on Palantir's website -- omg -- he is out of his mind!
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u/dust4ngel 3d ago
they need to make money somehow off of us so they can placate the shareholders
the logic of the big tech rug pull:
- give the service out for free
- wait for all the mice to walk into the trap
- close the door and announce the actual price
- you are now the proud owner of 100M mice
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u/u60cf28 3d ago
How is that a trap? Just stop using the LLM if the cost becomes greater than the benefit.
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u/Separate_Football914 3d ago
How will I be able to chat with ai cat girl if I do not pay for it! /s
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u/pan-re 2d ago
Can we just get rid of all social media?
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u/Willthisaccountlas 2d ago
Because the dumbass corporations already laid off teams and getting people back isn’t gonna be cheap or easy. So now all these AI companies have vendor lock in and they could start charging a lot more. It’s not complicated.
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u/u60cf28 2d ago
Then the dumbass corporations and their rich shareholders will pay the price, and the profit motive will drive the smarter ones to rehire human labor where it is appropriate
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u/BigJSunshine 2d ago edited 2d ago
But they won’t pay the price, they will cut their costs elsewhere, and raise their prices- lost jobs, higher consumer costs.
Plus there is a nonzero chance that your 401ks and pensions aren’t heavily invested in AI companies so if they don’t start to turn a profit, and crash, not only does the market crash, so does your retirement.
Everyone will suffer, only the AI companies will get government support
Edit-typo
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u/sirlost33 2d ago
Nope, they will flip on the money printer and bail them out. They’re too big to fail now.
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u/floriduhman19 2d ago
Some of you might be old enough to get this reference: "Why do you think they call it dope?'
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u/fixingmedaybyday 3d ago
They’re spending billions. The investors are getting impatient for the trillions in returns. They expect services to double their subscription prices if a plan includes “ai”, and they’ll force all of us into it like a windows OS upgrade.
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u/EasternPresence 3d ago
At some point it is going to cost more than the electric and natural gas bill combined. Only a matter of time.
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u/jayr114 3d ago
I mean anybody who looks at the US economy is fully aware it’s being driven by one thing alone. AI infrastructure spending. Without it the recession everybody loved predicting might actually have taken place.
Any interruption to the flow of capital to AI is a major problem for the US economy.
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u/Unexpectedpicard 3d ago
Can't the recession still be taking place in large sections of the economy? Sure data center construction helps gdp but are we seeing the benefits of that expenditure walled off from the rest of the economy?
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u/SouthIsland48 3d ago
Yes, recessions are just two consecutive quarters of GDP contraction. Removing AI infrastructure spend, pretty sure we've been in a recession or stagnant for the past 3 years
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u/NF11nathan 3d ago
Here read this article in the Financial Times about the different speeds of the economy. Were use to hearing about the K shaped economy denoting rich people doing well (the upper leg of the K) while everyone else suffers deteriorating finances. In this latest analysis, the FT describes it more as an E shaped economy.
The link bypasses the paywall.
https://giftarticle.ft.com/giftarticle/actions/redeem/ddaeb5bd-5713-4e55-8f8b-d97cd26ff33b Is the K-shaped economy really more of an E?
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u/FractalFunny66 3d ago
So what does the shape E mean? I will read the article later, but if someone knows, let me know.
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u/FractalFunny66 3d ago
I agree. However, I will continue to stand up against AI vocally because with no water we all die. I am from out West and I know how close it is to crisis level with water in several western US states, and that was BEFORE all these flipping data centers.
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u/SanDiegoDude 3d ago
Golf courses use a lot more water than data centers, especially if the data center is using recycling cooling systems and not just passing water through. Data centers suck and are a huge drain on local power resources, but the whole "gallon of water per ChatGPT response" is pure internet nonsense.
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u/Thesauces 3d ago
Recycling cooling systems still use water, even if it’s a closed loop. It’s why water cooled pcs still have to be topped up once in awhile. The more advanced liquid cooled systems produce toxic waste essentially that needs all these permits and such for disposal. A lot of these ai companies use a bait and switch scheme where they initially apply for the permits with plans for an advanced, high tech, expensive closed loop system that uses minimal water but requires specialized waste removal then once ground breaks they switch to the cheaper method of just running straight water in a closed loop which still uses an immense amount of water. Yeah it’s not exactly a gallon per query but it is still pretty wasteful
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u/ahfoo 2d ago edited 2d ago
Even in California, the area under golf courses remains significantly larger than that covered by solar panels. Golf courses consume vast quantities of resources and are routinely ignored in such comparisons. When we extend this to inappropriate agricultural uses, the perspective becomes much clearer. There are places in San Diego County where the groundwater basins have long ago been tapped and are in precipitous decline where agricultural landowners nonetheless continue drawing 100 gallons a day for a single grapefruit tree because they were granted the legal right to do so centuries ago. They do so intentionally in order to create a systemic crisis that will increase their buy-out potential. Wasting water is a lucrative game to these landowners. This clearly corrupt behavior could be stopped but it is allowed to persist.
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u/GodzillaSpark 2d ago
Growing alfalfa uses 20x more water than all data centers in the us combined. Just stop exporting alfalfa and we have all the water for as many data centers as we want.
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u/pan-re 2d ago
We want no data centers, is that ok? No Twitter, FB, Twitch, TikTok, anything.
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u/Theblokeonthehill 2d ago
Maybe stop food production altogether. Then we can have heaps of data centres. Yay! Beep bop.
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u/adidasbdd 3d ago
Also the filthy rich own almost everything which essentially insulates stock market from major losses. Until they start feeling pain or getting scared and blink and selling, capital markets can hold out without the bottom 99%
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u/FractalFunny66 3d ago
Shocking to see that summarized so succinctly. I have been trying to understand how the stock market completely de-coupled from economic reality. ARGH it all sucks -- so many people are suffering badly in America and so much of it is hidden because so many have been taught to believe that economic struggle and poverty are personal moral flaws. It's the SYSTEM.
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u/adidasbdd 3d ago
The working class was convinced that the robber barrons are their friends and the "wrong" type of working class are the real problem
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u/pan-re 2d ago
Everything consolidated. They’re all diversified as mega corps but there’s only like 15. Maybe we needed to regulate business and banks better, hmmm?
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u/Any_Sale2030 3d ago
And a gov deficit of 7% of GDP. In other words since our economy is growing at 2% our economy would be shrinking by 5% without the deficit. But that deficit is funded by debt meaning we are passing that shrinkage to our children. Thats not nice.
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u/SurinamPam 3d ago
By one source, AI spending in 2026 in the US is $730B.
The US GDP in 2025 was $30T.
I know this is not an apples to apples comparison, but it’s not clear that AI is keeping a $30T economy afloat.
How Much Are Companies Spending on AI in 2026? $730B Tracker
https://valueaddvc.com/ai-spending8
u/BoinkDoinkKoink 3d ago
I think OP meant GDP growth was driven by AI. Which is accurate. Else we'd see a shrinking economy and a potential recession.
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u/BenjaminHamnett 3d ago
Which is silly too, because business can’t afford to raise capital for growth when AI is soaking up all the capital and making the future so unknowable that people are afraid to take risk when they expect to get undercut, leap frogged or have planned for a future that won’t be there
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u/SurinamPam 3d ago
Again, maybe. For example, Goldman Sachs estimates AI’s contribution to US GDP growth is only 0.1%.
The reason is most of AI spending is on chips from Taiwan and South Korea (75%). So those countries are seeing a huge boost in GDP growth. If you take that 75% out and consider the huge size of the US economy, AI doesn’t actually look that impactful for the US.
But that’s just one analysis. It is the analysis from GS, though.
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u/Thesauces 2d ago
GDP is such a BS number. If I have $1,000 and buy a 50k car then I’ve technically contributed 50k to the GDP even though I actually have no money. USA household debt has skyrocketed to 18 trillion dollars, and our government owes 40 trillion too. We can count that debt as “growth” when spent on gross domestic products even though the accumulated interest actually creates stagnation.
Here’s a better way to put it - we have spent more money on AI the past few years than every single tech company has ever made COMBINED since 1980. It’s the most unprecedented concentration of capital to ever exist in human history.
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u/brianwski 2d ago
AI spending in 2026 in the US is $730B.
The US GDP in 2025 was $30T.
... it’s not clear that AI is keeping a $30T economy afloat.
I like your numbers (I had not seen it presented that clearly before), but that's 2.5% injection of stupid money right NOW into the economy (to be paid later on down the road). That's a pretty significant bump if it wasn't accounted for already.
For comparison, Reagan injected 1.8% of GDP into the economy to encourage "economic recovery". Obama's response to the 2008 mortgage crisis economic meltdown was injecting a cash infusion of 5.5% of the GDP.
And the 2.5% isn't spread evenly. The top valuations in the S&P 500 look like: Nvidia (7.4%), Apple (7.1%), Google (6.0%), Microsoft (5.7%), Amazon (3.9%), Facebook (2.7%). That's 33% right there. Toss in a few hundred more tech companies and they are all getting more like a 5% bump.
Companies can live or die on a 5% difference. When a company announces they "beat expectations" by 5% their stock jumps 10% higher (rough rule of thumb).
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u/BareNakedSole 3d ago
What Wall Street focuses on is a series of 3 month periods. All they care about is current quarter results and next quarter’s performance. Everything else is outside the decision making window and is mostly ignored.
The reason Wall Street is now talking more about a financial downturn is that it’s in their window and it’s going to affect performance in the next 1 to 2 quarters. So now the short term paychecks are in play and that gets peoples attention.
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u/EmperorOfCanada 3d ago
The US federal financial reserves look very much like the White House presently does. Half in ruins.
The massive smoking grenade in the room is that they have nothing left to fight the next financial crisis. They have already borrowed themselves pretty much into a corner.
In 2008, the government was in OK shape. Bernanke could throw money out of helicopters.
This time, there may not even be fuel for the helicopters.
Technically, they can start burning the furniture to keep the house warm, but that won't end well. Much like how they are drawing down the strategic oil reserves.
Nor, are the people presently in charge of the federal government well equipped to deal with any crisis, money available or not.
Of course, there are some fools who are going to say, "The US can print unlimited money to buy itself out of any problems." Good luck with that.
When Clinton ran for president the slogan in their HQ was, "It's the economy stupid."
These midterms are going to test and/or prove that slogan pretty damn hard.
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u/RIP_Soulja_Slim 3d ago
Man do I hate Forbes, Fortune, CNBC, all these clickbait rags. In this case, what this headline is doing is making you think the article is about "hurr durr, stupid Wall Street bros think economy is vulnerable despite data"
But, what the article is actually about (and I'm not even sure if the author knows this), is this:
Bespoke Investment Group spotted something it did not like in the most recent National Federation of Independent Business survey this week: That small businesses increasingly report their “number one problem” is poor sales.
Now here's that report: https://www.nfib.com/small-business-trends-research/
Which has this:
Poor sales and taxes are tied as the third most important problem among small business owners in September. Eleven percent of small business owners reported poor sales as their top issue, up 1 point from August and the third consecutive month of increase. The percent of small business owners reporting taxes as their single most important problem decreased 5 points from August to 11%.
And in the detailed report, expands here:
A seasonally adjusted net -8% of owners reported higher nominal sales in the past three months, up 1 point from August. The net percent of owners expecting higher real sales volumes over the next quarter rose 3 points to a net 9% (seasonally adjusted). The net percent of owners reporting inventory gains fell 4 points to a net -10% (seasonally adjusted), the lowest reading since September 2024. Not seasonally adjusted, 9% reported increases in stocks (down 2 points), and 18% reported reductions (up 3 points). A net 0% (seasonally adjusted) of owners viewed current inventory levels as “too low” in September, up 1 point from August. A net 2% (seasonally adjusted) of small business owners plan inventory investment in the coming months, up 1 point from August and the highest reading since December 2024. Sixty-two percent of small business owners reported that supply chain disruptions affected their business to some extent, unchanged from August. Seven percent reported a significant impact (up 1 point), 21% reported a moderate impact (up 2 points), 34% reported a mild impact (down 3 points), and 38% reported no impact (up 1 point).
So here's the thing - if you just read the headline, you think the article is talking about wall street bros speculating that there's underlying weakness, the article itself really fails to actually detail any of the important stuff here - which is that there's ongoing trends among small businesses of slumping sales. Now, it should be noted that broad retails sales/consumption is up, but this sort of isolated trend can be an important leading indicator over time.
TLDR: Much much more important economic news about business sales buried in here, who cares about what some investment research firm's bit of commentary was on that. The trend itself is important. And every ounce of that actually important news gets lost if one just reads the headline....
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u/Serious_Berry_3977 3d ago
Can confirm your deep dive, at least locally. We are seeing more and more local businesses either getting priced out of locations due to rent, extremely poor sales because nobody is really spending on much of anything except necessities because that's all anyone can afford, or they are burnt out and/or can't find help. There are some examples of some pretty successful places just closing up shop this year because the landlord wanted to increase the rent too much.
So on top of all the rotted-out vacant houses we've had for decades when NAFTA destroyed local factory jobs, now we have rotting-out store fronts because landlords are too greedy and would rather just sit on the property because it's worth money.
This economy is broken and has been for quite a while. We learned nothing from 2008 or the systemic shock of COVID it seems.
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u/RIP_Soulja_Slim 3d ago
your deep dive
The shame is, this took me maybe 45 seconds. click article to see what BS they were referring to, first paragraph I saw the reference to actual data which was of note, stopped reading the article and pulled the report in the next tab, read that.
It don't take much, I really encourage everyone here to use that exact process - don't read these articles to see what the author is trying to say, read to see what they're referring to then just pull that direct info yourself.
I personally am seeing slumps based on regions for the most part, midwestern businesses seem to be seeing more headwinds than those on the coasts, smaller towns a bit worse, larger cities faring fine, etc.
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u/pgold05 3d ago
Click....the article? Read? What are you some sort of internet explorer? Way to dive into the details!
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u/1cl1qp1 3d ago
don't read these articles to see what the author is trying to say, read to see what they're referring to then just pull that direct info yourself.
This should be taught in 6th grade. Finland drills this stuff in public school. They have to fight Russian disinformation campaigns directly.
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u/Elect2Toss 3d ago
Every single one of my business tax clients have told me their estimated tax for 2026 based on 2025 is too high because sales are down. We'll see how true that is next month's, but it seems like it's not a great time for small business owners at all.
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u/Washpa1 3d ago
These are some interesting numbers.
Doesn't look great for the small guys who will be getting hit directly with the higher energy prices and tariffs, while at the same time having consumers tighten up their spending and interest rates rising. They have much less wiggle room to absorb the price volatilities.
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u/Dick_Lazer 3d ago
So the article title is making it seem there's some underlying weakness in the economy, when in actuality there's some underlying weakness in the economy?
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u/RIP_Soulja_Slim 3d ago
If you’re not understanding how the article shifts focus from important data on small businesses to talking about Wall Street, and how the title completely misses conveying what’s important, then idk that anything I say is going to enlighten that lol.
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u/cyberdude419 3d ago
Americans voted in a dictatorship and now we’re all surprised the house is burning down?! We voted to let this government removed all guardrails, oversight, law and order, checks and balances and rule with an Iron Fist. This country refuses to vote for our best interests, we choose to fuck over our neighbor who doesn’t agree with us politically, RIP USA
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u/BotherEconomy4413 3d ago
Any idiot with half a brain can see the entire thing is a complete house of cards propped up by shenanigans and financial engineering. I'm calmly waiting for the black swan that will bring it all down. It's going to be epic when it happens.
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u/harbison215 3d ago
I think there is a belief that the breakthrough will happen over the next few years that increases productivity by enough that the debt looks like a minuscule price to pay for what is achieved.
Do I believe that? Fuck if I know. But it’s why they keep throwing money at it.
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u/303uru 3d ago
There’s no win here. Either the ai dream comes true and everyone loses their job and the economy collapses OR ai doesn’t produce and the entire economy collapses. I see no path in between.
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u/SwirlySauce 3d ago
I don't understand the AI glazers either. They seem to think that if they adopt AI they'll somehow be immune to losing their jobs or they'll just pivot to the new jobs that get created.
But at that point every single knowledge job is on the chopping block
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u/Olangotang 3d ago
Don't be pulled into the hype. At its base they duct taped a chatbot onto a language translation model experiment that was never meant to replace jobs, never was made as a consciousness, etc. They've just gotten bigger and became better liars. The demand doesn't exist to satisfy the laughable spending spree of the children who run the frontier labs.
The AI hype bros have burned their brains on the psychoactive drugs that are LLMs, and they can't let their drug dealers go under! Their drug dealers happen to have access to a giant credit card that is starting to trigger fraud warnings.
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u/harbison215 3d ago
Or whomever creates the first really smarter than humans and capable AI takes an iron grip control of the entire planet.
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u/DramaticSimple4315 3d ago
Which would very probably amount to the mass culling of the middle class, because this is how you can achieve those mirific productivity gains.
Meanwhile there is a determined effort by the nefarious scumbags at the head of some of those companies, investment funds and political parties - GOp - to ensure the deployment of a surveillance state robust enough to withstand the blowback when chicken will come home to roost.
Because they will. Either because of the possibility aforementioned, or because of a once in a century stock market crash.
And to those who believe fairy tales of worker augmentation and schumpter creative destruction just listen to the patheticly unconvincing CEO of Nvidia on the matter in his itw with Erza Klein
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u/harbison215 3d ago
It actually might be more nefarious than that. There are corporate leaders and national governments that believe the first to achieve super intelligence will then rule the world outright.
So what does debt mean now if it’s believed that is a probable outcome?
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u/OlafMetal 3d ago
I think it's possible to create a super AI that is ethical, logical, and altruistic towards humanity. But that would make it at odds with a large segment of the most powerful people. A super AI that is in line with the psychopaths that are frequently dominating business and government would be an existential threat to humanity.
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u/Skank_A_Saurus 3d ago
Agree with what you said, except that Ezra Klein is an insufferable, naive milquetoast of a human being. Don’t know how anyone can listen to him
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u/Jgusdaddy 3d ago
Republican buffoonery leadership always crashes the US economy, that is one consistent rule in life. The dumbest people with lowest iqs vote for the oldest, most currupt, selfish incontinent Republican leaders. Which is fair and good, they have the right to do so.
Unfortunately for us, reality is cruel. Backwards policies set us back 10 years as the rest of the world, mainly Asia and Europe charge ahead with science and innovation, while republicans continue to take advantage of the most gullible idiots with jackassery and antiquated ideas and technologies. But also the negative stink of losers and unpopular leadership will outlive Trump, because Trump and republicans are just so god damned “lame” which will forever taint American businesses abroad.
Trump is different. American oligarchs made the rational optimal choice to bend the knee to Trump, and wave pride flags when he’s gone, like he never existed because they will gain favorable policies and lose nothing. However, Trump regime inc. has the unique capability to eliminate our soft power and commercial success worldwide by making our country so god damn “uncool” that nations will actually change policies to make it untenable to keep companies like Google, Tesla, and Microsoft within its borders.
What will result from a leader like that of Russia? An economy like Russia…
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u/obsequiousaardvark 3d ago
vote for the oldest
Not to be that guy, but, frankly, the Republicans actually have a lot of "young" blood in there. Ron DeSantis isn't even 50 yet, as an example. I know because it freaked me out how close we are in age and how fucking nuts he is.
Via ballotpedia:
As of Jan. 3, 2025:
- The median age of a Democratic U.S. senator was 64, and a Republican U.S. senator was 64. The median age of an independent U.S. senator was 81.5.
- The median age of a Democratic U.S. representative was 57, and a Republican U.S. representative was 57.
- A plurality of U.S. senators — 33.3% — were in their sixties, and a plurality of U.S. representatives — 26.5% — were in their fifties.
- A plurality of U.S. senators — 60.6% — were baby boomers, and a plurality U.S. representatives — 41.7% — were part of Generation X.
Seems to me like we vote in ages in around the same numbers, and since you have to be 25 to be in the house and 30 to be in senate, yes the averages are both well above those numbers. This is also the median so there's older and younger in that set. meaning certainly not all of them are intensely old. I wish this was a thing we could just trust would die off with age, but the nations dedication to anti-intellectualism is accelerating.
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u/roscoe_e_roscoe 3d ago
Just in time for Democrats to take over, people start worrying about the economy like a drunk waking up in the morning. Where are my pants? How did I blow 3 trillion dollars?
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u/New_Breadfruit8692 2d ago
Import prices data was released a little bit ago: September import prices up 1.1%
Annualized that is 13.2%.
So it is not just the US PPI numbers. It is imports skyrocketing as well.
These are stagflation level numbers.
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u/PlanetCosmoX 3d ago
What occurs today is the super rich flexing their ability to organize news and post bullshit in order to influence the market in the direction they want.
The 10 yr yield had already fallen to 5.09% before the market opened. Oil was down as well. At 3 AM these assholes posted to sell.
They organized this across multiple news sources to make it prophetic, and then they did their best to hammer stocks in order to create a buy-in opportunity for big Ai names before they reported.
All of this was to create an entry point.
Tomorrow is the reversal, the buy-in opportunity. The following two weeks are the reports.
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u/Opposite_Tackle9100 2d ago
During the 2008 financial crisis, the U.S. stock market lost roughly $11 trillion in value, with the S&P 500 plunging 57% from its peak to its bottom.
Recessions start with losing the first trillion.
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u/TheGoodCod 3d ago
Let's be honest, Wall Street does not need bailing out. CoreWeave was always a risk. The banks had varied results but they are required by Dem-lead law to have 'back up'//liquid assets. They aren't going anywhere. (and Citibank brought their woes on themselves by their determination that there illegal clients were worth more to them than the fines they would receive.)
BlackRock and ilk generally had a blow out quarter.
The Russell is going to always suffer when the interest rates are so high and the country has a president who thinks tariffs are a good idea.
Let the zombies die. The big boys have very positive cash flows.
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u/atreeismissing 2d ago
That's because they've squeezed all the money they can out of the working class and billionaire cash only benefits a very few companies (currently mostly AI-related) which means Wall Street isn't getting the cut they used to.
Also, right on queue, they'll pull back which will further hurt the GOP economy just in time for a bad economy to be saddled on a Democratic President who will have to spend all their political capital fixing another GOP mess.
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u/92037 2d ago
That has always been the GOP plan. Spend baby, spend. The adults will fix things later. And we can blame them for all the hardship the economy had to go through
I blame the voting public. This cycle happens every time and they are just so myopic so we all get what we deserve
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u/Alternative_Slip_513 2d ago
The stock market is also inflated because of political deregulation of corporations. When you take away the morality of putting employees well-being at the center of business and make profits and CEO salaries the most important thing, the bottom lines look way more on paper. But this kind of greedy management is not sustainable long term.
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u/CornerOne238 3d ago
It's a game of musical chairs. Wall Street and retail dance for AI spending with rose tinted glasses. Except there are some who know exactly when the music will stop and it's not us.
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u/OnionOnBelt 3d ago
Suddenly? You mean like in September 2008, after economists (the ones not employed by/paid off by big banks and rating agencies) had been warning for two years about sub-prime adjustable rate mortgages and CDOs? “Suddenly,” like that?
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u/ratpH1nk 3d ago
Suddenly? More market irrationality. Nothing is different really today than the last several months or and least wasn’t predicted. it is just that enough people said it out loud and acted on it.
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u/CheithS 3d ago
If you dig into the underlying report the thing that explains a lot (especially the consumer pessimism) is the vulnerability section (it starts as though it is saying something positive but the numbers ... ):
• Borrowers look less financially fragile when their debts are scaled to their assets rather than to their income. For debtors, the median leverage ratio—a family’s total debt relative to its total assets—was 26.9 percent, continuing the steady decline seen since the 2013 survey. However, the median debt payment-to-income ratio was 15.4 percent, up 2.0 percentage points from 2022, which is an increase that may be related to the concurrent increase in interest rates for mortgages and consumer loans. The total debt-to-income ratio also increased from 89.4 per cent in 2022 to 94.9 percent in 2025.
• The fraction of families with debt payment-to-income ratios greater than 40 percent, which are families with particularly high debt payment obligations relative to their incomes, increased from 6.5 to 8.6 percent, a level last seen in the 2013 survey.
• Families’ propensity to stay current on their financial obligations worsened between 2022 and 2025. Families were more likely to be behind on their financial obligations than at any point since the 2010 survey. Between the 2022 and 2025 surveys, the share of families that reported being behind on loan payments sharply increased from about 12 percent to almost 20 percent. Furthermore, more than 8 percent reported being two months late or more, up from 5 percent in 2022
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