a different take on concept vs. valuation

The stock market rarely stands still. It’s either going up or going down. Given the sharp recent drop, however–and especially when comparing the weak performance of the US market in comparison with foreign bourses–(my) experience says that we’ve stopped going down for now. If so, this has less to do with ideas about what the economic future may hold than on the belief that stocks are now “cheap” vs. their own recent past as well as vs. foreign alternatives.

What happens from this point will depend, I think, about how the passage of time will reveal/flesh out the likely near-term future for the US economy.

The cultural portents aren’t good. Over the weekend, a highly decorated African American war hero’s Medal of Honor was denigrated as a DEI award and his website taken down. Stories of random ICE detentions abound, as are suggestions that the administration is ignoring court orders to cease deportations of residents it describes as military invaders.

If we confine ourselves to economic matters, two factors stand out to me:

–in a Paul Krugman interview of an economist whose specialty is interpreting the arcana of federal government economic reports, the interviewee, Neil Dutta, argues that the outlook is weaker than the consensus realizes

–in the same interview Krugman also notes that the Treasury Secretary is essentially clueless about the effect of tariffs on inflation (Scott Bessent, a former hedge fund manager, says there are none). Hard to figure out what President Trump is thinking about, either, or what he believes about tariffs other than that they’re a panacdea.

So maybe we’re not as secure as we should be in thinking that a rebound–at least a partial one– is in the offing. Personally, this is one of the few times I genuinely don’t know. So I’m remaining (for me, anyway) defensive.