December 7, 2018
During the last presidential election, I expressed sympathy for either candidate because he or she would inherit an economy that had been growing for eight years. We had very low unemployment and interest rates. There were inequalities, but there was no “carnage.” The country was doing well. As a former investment advisor, I suggested that people be careful with their money because markets cannot go up forever. There was no reason to believe that this time would be any different. What I did not anticipate was a reckless and irresponsible tax cut that was paid for by issuing more debt. In the world of finance, it would have been called a leveraged buyout with the American tax payer forced to hold junk bonds.
Well, as it turns out, this time is not different. Many economists, even those from Trump’s favorite investment bank, Goldman Sachs, are predicting a slow down in 2019 with a possible recession in 2020. The threat of tariffs just adds fuel to the fire. The stock market has dropped, and volatility has increased. Unfortunately, the Fed is out of bullets because it cannot lower interest rates, and Congress is out of bullets because it spent all the money. Ironically, it’s Pearl Harbor Day.
The Spin Doctor 