It will hit the economy – but probably not the stock market. The Mag 7 has fine-tuned the machine that hoovers up all our money, rain or shine.
EconomistWithaD on
A bit misleading. For the most part, government shutdowns lead to immediate economic growth losses that are mostly made up in future economic quarters. From the article:
“Goldman projected a 1.15 percentage-point reduction in 2025 fourth-quarter growth, followed by a rebound at the start of next year.”
A few key points:
1. Every week of a shutdown reduces economic growth by 0.1-0.2 percentage points in that quarter.
2. The “rebound” effect nearly offsets all growth losses, but the longer it lasts, the less likely full rebound will happen.
Fantastic-Emu-6105 on
Roughly 67% of Americans are living paycheck to paycheck. There isn’t savings or short term debt, like credit cards, available. Those cards likely don’t have a month’s worth of living expenses available. Remember that you can’t pay your mortgage, and likely rent, payment with a credit card. The belt is already tight. The spring isn’t strained, it’s sprung.
HartbrakeFL21 on
Let’s see their positions. Oh, never mind, I know them:
Own some part of everything, have calls and puts on either side of everything owned. America burns, GS wins. America continues to pump the economy, GS wins.
4 Comments
It will hit the economy – but probably not the stock market. The Mag 7 has fine-tuned the machine that hoovers up all our money, rain or shine.
A bit misleading. For the most part, government shutdowns lead to immediate economic growth losses that are mostly made up in future economic quarters. From the article:
“Goldman projected a 1.15 percentage-point reduction in 2025 fourth-quarter growth, followed by a rebound at the start of next year.”
A few key points:
1. Every week of a shutdown reduces economic growth by 0.1-0.2 percentage points in that quarter.
2. The “rebound” effect nearly offsets all growth losses, but the longer it lasts, the less likely full rebound will happen.
Roughly 67% of Americans are living paycheck to paycheck. There isn’t savings or short term debt, like credit cards, available. Those cards likely don’t have a month’s worth of living expenses available. Remember that you can’t pay your mortgage, and likely rent, payment with a credit card. The belt is already tight. The spring isn’t strained, it’s sprung.
Let’s see their positions. Oh, never mind, I know them:
Own some part of everything, have calls and puts on either side of everything owned. America burns, GS wins. America continues to pump the economy, GS wins.
Goldman wins either way.