US stock market loses as much the entire national debt? Wait . . . that doesn’t sound right.

Some people are cheering yesterday's market bloodbath. “The end of capitalism is nigh!” But, no . . . we could NOT have paid off the national debt with what was erased from our 401Ks, IRAs, bitcoin holdings etc. The S&P 500 lost “just” 5% Thursday. 10% since inauguration day. That’s not enough to pay off the national debt. But if we have another week or two like this, it could be.

Start adding in the losses on all the other investments: Bitcoin (down 30% since inauguration day); the thousands of stocks which AREN’T part of the S&P 500, Treasury Bills . . . well this could run into real money. Raise your hand if you're happy seeing your 401K set on fire by day-trading arsonists.

Things haven’t been this bad since . . . well, since 2022, during the Biden era. The market lost 15% of its value between January and October that year. And then there was the Covid 19 market crash (thanks, China). The mortgage crisis crash (thanks Bush and Obama – markets lost 50%). The 9/11 crash (thanks Saudi Arabia) - markets lost half their value then, too.

No . . . I am NOT trying to minimize yesterday’s market results. If anything, history shows this year’s selloff may just be getting started. US markets are now in a “correction” – stocks are down 10%. When it gets to 20% we rename it a “bear market”. The average bear market has a 35% selloff, and lasts 10 months. If we’re lucky, and this is only an average situation, it could be over by Christmas.
(On the 10th day of Christmas my true love gave to me: ten lords a-leaping, nine ladies dancing...)

At this point someone is going to leap to their feet and say: “Lookit how much Bitcoin went up . . . from $10,000 to $100,000 in just 5 years”. Yes . . thanks for making the case. This is called irrational exuberance. The stock market more than doubled over the same 5-year period, too. That’s even rarer than a bear market.

I don’t think the Wall Street pros are waking up this morning and saying “This is a great day to go bargain hunting. Let me bet trillions on stocks like Apple, Microsoft, Nvidia, Amazon, Meta (Facebook), Alphabet (Google), Tesla . . .”

Theoretically, that COULD happen at any moment someone is taking a random walk down wall street. But only if you actually have trillions in spare cash to invest. I don’t see investors from Europe and the Far East rushing in to pick up US bargains either. Their markets are crashing too. Japan’s Nikkei has lost 15% this year. The FTSE (England) is approaching 10% losses. China manipulates its statistics, so don’t look for any honesty there. They're in a recession, with thousands of unfinished apartment towers.

What IS working? Gold. It’s continually hitting new all-time highs, even as Bitcoin (“better than gold”) crashes. Bitcoin miners are continually producing new Satoshis (their version of a penny) every time they perform a blockchain transaction to keep the system alive. If Bitcoin stops feeding them new Satoshis, everyone will stop doing blockchain calculations, and the whole thing will crash and burn.

If you don’t believe in trickle-down economics, then you probably also don’t believe in trickle down bear market effects. Where the losses in someone's IRA and 401K keep them from visiting car dealerships, and stop them from putting down payments on new homes. If you’re skeptical about this concept, text your cousin who sells cars or homes.

It's correct to acknowledge this sell stock market sell off is a Trump inflicted trauma. The president has threatened the profitability of US corporations, through his ignorance and bad advice. But presumed threats to corporate sales and profits ALWAYS cause bear markets. Whether it's 9/11, or the housing crisis, or Covid 19. And the US markets were priced to perfection on inauguration day, with no allowance for bad news.

Don’t feel bad if you didn’t see this coming. All the brainiacs on wall street who pulled the lever for Trump on election day are just as dim.

I’m just sayin’ . . .

S&P 500 loses $2.4 trillion in market value, biggest one-day loss since 2020 | Reuters