President Trump: The NEW one and only politics thread

Ya'll are going to have fun with your "dip" thing. But what is happening to the equity markets is symptomatic of a much more consequential debt / credit unwind. The thing CNBC is not breathlessly talking about right now is that credit spreads have been blowing out. Everyone is focused on the stock market. It's sad, because this is really about a self-inflicted global credit crisis. It is going to have profound consequences for people's lives, and it's really sucks. The U.S. equity market was inflated to bubble levels on the back of excessive leverage -- our debt markets were manipulated to a degree we have never seen, and they kept the phoniness intact for a period of years. It created massive misallocations of capital. A stock market bubble cracking shouldn't be the focal point, because that leverage permeates a lot of areas way more consequential for the lives of everyday people. The amount of corporate credit that is poised to default, and the zombie companies that are going to go down if the unwind continues in an unruly way, for example, are going to have profound consequences for economies around the world (and people's livelihoods). We are likely on the cusp of nasty credit events that are going to seemingly come out of nowhere, the way the housing crisis did in 2007/2008. This is an extension of it. We needed a very serious and painful develeraging in 2008. Instead, a bunch of clueless and politicized monetary mandarins made things much, much worse by selling the fantasy that they could bypass the necessary pain (that they had caused in the first place). And an ignorant public let them pass off monetary inflation as economic activity, as they flooded the world with an insane amount of leverage and dept to prop up their fantasy for several years. They no longer can do that. I hope people come to realize that the shitty economic reality that is coming in the next few years as a result was avoidable, and reflect on the fact that the long economic expansion they manufactured after the financial crisis amounted to stagnation and a depressed economy (growing well below trend) that left millions of people behind anyhow, as the rich got richer (on paper at least, because a lot of wealth is going to be proven to be phony). When the Bernakes and Yellens and Powells come in to save the day (the arsonist riding in on the fire truck) with quantitative easing, other types of asset purchases with money freshly conjured out of thin air, and negative interest rates -- and that is what is next -- it would be great if people had a clue and finally told them to stop and let the market set the price of money. Of course, that is not going to happen easily, because it will also mean everyone -- including our government -- living within their means. And if a market was assessing risk and setting lending rates accordingly, last call would have been long ago.