I had been preparing a post on the updated state of the economy, especially post-SOTU last Tuesday. I got side-tracked with tasks around the glamstead and postponed the article. And then the war started with Iran on Saturday. I postponed again waiting to see how the markets and economy projections would play out after Monday. Why Monday? I figured there would be “panic” at the start of the week and then level off after folks composed themselves. So here is the updated article. However, I will write it as if the war hadn’t started…then add a small section at the end for the war effects.
Let’s hear from some experts and major players in the game…
February 24th – JPMorgan Chase CEO Jamie Dimon said Monday, “…the financial world looks a lot like the heyday in the years ahead of the global financial crisis [2007 – 2009].” He went on to say, “Take a deep breath and watch out.”
February 24th – Moody’s Analytics economist, Mark Zandi, says that “the market is disconnected from the US economy.” He goes on to say, “Falling asset prices threaten an already vulnerable economy,” and “thinks that a major sell-off could be coming that would impact the broader economy.”
He explains, “Real GDP is the strongest indicator, and it is growing just over 2%, below the economy’s potential, estimated to be near 2.5%,” he said, “Employment has flat-lined, and unemployment continues to creep higher. Inflation, as measured by the Fed’s preferred consumer expenditure deflator, remains stubbornly and uncomfortably high at 3%.”
He says, “The stock market is wavering this year as investors fret over everything from tariffs to AI,” but Mark Zandi, goes on to say, “thinks things could soon get a lot worse.”
February 22th – Citrini Research published the “Doomsday Report” outlined a terrifyingly plausible scenario of imminent, global financial chaos brought about by artificial intelligence. Citrini outlined a harrowingly reasonable chain of routine market fluctuations that would culminate in chaos as agentic AI consumed and confounded the global economy.
They went on to explain, “A scenario that began with unprecedented white-collar layoffs quickly devolved into mortgage meltdowns as capital continued to concentrate in the tech and AI sectors.”
The scary part, “The system wasn’t designed for a crisis like this…This is a credible, ongoing concerns about AI’s potential to unleash global economic unrest.”
February 26th – Block, Inc. said Thursday it’s laying off more than 4,000 employees, or about half of its head count. Jack Dorsey, Block’s co-founder and CEO, wrote in a letter to shareholders. “We’re reducing Block by nearly half.” He explained, “the job cuts would enable it to move faster with smaller, highly talented teams using AI to automate more work.”
Block’s CFO said, “We are choosing to shift how we operate at a time when our business is accelerating and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work.”
Who is Block, Inc.? Block, Inc. -formerly Square, Inc.- is an American technology company and a financial services provider for consumers and merchants. It was Founded in 2009 by Jack Dorsey, it is the U.S. market leader in point-of-sale systems. Block serves nearly 60 million users and more than 4 million sellers, processing about $300 billion in payments annually.
February 27th – TheStreet published the following…”new government data revealed that producers are facing higher price tags. The Producer Price Index (PPI), which tracks what businesses pay one another for goods and services, climbed 0.5% last month. This was a notable increase from the 0.4% seen in December. While the annual inflation rate slowed slightly to 2.9% from 3%, it still landed well above the 2.6% that economists had predicted.”
They went on, “When the volatile categories of food and energy are removed, the ‘core’ PPI—which provides a clearer look at long-term inflation trends—showed an even sharper rise. This underlying measure jumped 0.8% in January, compared to 0.6% in December. This pushed the annual core rate to 3.6%, marking the highest level seen in 10 months.” The stock markets lost almost 1% that day.
February 27th – Recent poll shows:
- 53 percent of adults say they have just enough money to maintain their standard of living but spending on going out to dinner, vacations and new cars is unaffordable.
- 74 percent say a new car is not affordable.
- less that 30% say they are “getting ahead”
- 3 in 4 renters say they would like to be homeowners, 65 percent say they won’t be able to buy a home in the foreseeable future. That’s true even for 57 percent of renters who earn more than $100,000 a year
February 26th – Dario Amodei, the chief executive officer of Anthropic, warned that artificial intelligence (AI) power and wealth are concentrating rapidly among a small group of companies, raising concerns about economic and political influence, and has done so almost overnight.
He also warned that AI advancement resembles an approaching “tsunami,” arguing that many people underestimate its impact. Amodei has previously published an essay cautioning that unchecked growth could generate “personal fortunes well into the trillions” and outsized political leverage.
[This came out the day before Anthropic refused to allow the US federal government, specifically the Pentagon, to use its AI program for “autonomous weapons or mass domestic surveillance of Americans.” This was Anthropic’s attempt to protect Americans from the extreme dangers of AI. The next day Trump ordered all Federal agencies to cease using Anthropic AI. Anthropic simply wanted to prevent further implementation by the US federal government of a combination of “1984” and “Terminator”. So why would the federal government object to that?]
Last but not Least…the US War with Iran –
Estimates of the US-Iranian War will negatively impact the US economy are now more than $200billion and rising each day.
The actual military cost to taxpayers is somewhere north of $2billion per day for total costs to destroy Iran. F-35 fighters are a real deal at $42,000 per hour, $60,000 – $175,000 per hour for a B-1 bomber, and only $1,400,000 – $16,000,000 per missile depending on the version. The real deal are air craft carries…$7,000,000 for the ship and crew. The entire air craft carrier strike group (carrier and supporting ships) runs about $13,000,000 per day. But the cost-savings was getting all this ships, planes, and people over there and on-station…that was a measly $200million per day.
So what do you think…about $10billion so far, including the build-up…maybe closer to $30billion for only 4 days of our war against Iran? Gee, what a great way to spend taxpayer money! Or, just borrow it and add those 10’s of billions to the national debt…no one notice…or care.
But no big deal…the war is a bargain for US taxpaying citizens…oil is only up 22% since last week ($64-$78). But gasoline at the pump only jumped 20cents per gallon, and expected to go up another 30cents within the week. Yeah, closing off 20% of the world’s oil supply will just be a minor irritation for you, yeah? But not to worry, since the war started there was only a single night where the price of gasoline jumped 11cents per gallon…surely that won’t repeat…and it’s nothing but a minor inconvenience to you, yes?
And why did we go to war with Iran again…Trump initially stated their growing nuclear capability was the problem, then it changed to regime change. Ironically and understandably, Senator Ted Cruz said yesterday there was no indication Iran was anywhere close to getting nuclear weapons.” And didn’t we just bomb the hell out of Iran last year to destroy Iran’s nuclear capability? No biggie, it will only be a multi-multi-hundreds of BILLIONS of dollar hit to the US economy. A small price to pay for killing over a thousand Iranian civilians so far, including 170 people at an elementary school in Minab, Iran. And really no worry…only about 100 of them were young children…and fortunately it was a girl’s school and all the dead children were girls. That is nothing compared to the US economy hit…right? Yes? Ever think WWJD?
Summary –
‘Black Swan’ author had some interesting things to say about the threat of AI and the fast growing number of corporate bankruptcies in the US. But, I’ve said enough already. And don’t worry that the markets are only down 1.5% – 2.5% today. And I am sure that oil up more than 6% today, and natural gas up 5% today is no harbinger of things to come. Everything is fine…move along.
There is nothing you can do to stop or even influence the madness in the world today in Washington DC…nothing. The US voted for this (sort of) and we got it. The next time your voice will count is in November for the mid-term elections.
MAKE YOU VOICE HEARD THEN!!!
In the mean time I would think you should look at ways to prepare for some kind of market…economic…employment…banking issue. Just saying…
No Panic
No Fear – if ye are prepared ye shall not fear.
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