Why Aren't Markets Freaking Out?

[applegrove]

Why Aren’t Markets Freaking Out?

August 28, 2025 at 6:44 am EDT By Taegan Goddard 129 Comments

https://politicalwire.com/2025/08/28/why-arent-markets-freaking-out/

Paul Krugman: “Nations in which central banks lose their independence sooner or later suffer high inflation, especially when they are taken over by autocrats who buy into crackpot economic doctrines. And Trump, who has been demanding large rate cuts because, he claims, the economy is running hot — which almost every economist would say is a reason to raise rates, not cut them — certainly fits that pattern. Yet although there have been small tremors in the bond and currency markets, there have been no significant upheavals in financial markets that reflect the severity of the situation we are in. Throughout this episode, the stock market has remained fairly flat and bond yields haven’t spiked.”

“Why not? Do financial markets doubt that Trump will get his way? Or do they reject mainstream economics and the clear examples of countries like Turkey and Argentina?”

“Neither. My read of economic and financial history is that market pricing almost never takes into account the possibility of huge, disruptive events, even when the strong possibility of such events should be obvious. The usual pattern, instead, is one of market complacency until the last possible moment. That is, markets act as if everything is normal until it’s blindingly obvious that it isn’t.”

[Fiendish Thingy]

1. Because Cook is fighting back

If Trump wins and she is fired I expect the markets to react more severely.

I would say there has been more than a “small tremor” in the bond market, but certainly less than what could happen if Trump succeeds.

[unblock]

2. He's right. People get wary, but they generally figure they can pull out of the stock market on a moment's notice

So they don't pull out until the market crashes.

Unfortunately, the first part of the crash looks like random fluctuation

The next part looks like a normal dip, a "buying opportunity" even.

The next part looks concerning, but hey, all the great advisors say buy and hold, don't try to tune the market.

It's not until the programs kick in and the herd capitulates that people realize it's actually a crash. That point, the market craters 10+% in a flash. Then servers get overloaded and you can't even log in to your account....

[hvn_nbr_2]

3. Markets are primarily driven by big money folks

Big money folks--hedge funds, mutual funds, and billionaires--think everything is hunky dory. They got their trillions of tax cuts for the rich, they're rolling in money, and their Klan Messiah is getting his way on everything. Life is beautiful.

So if the middle class is disappearing and descending into poverty, they don't see it, hear it, believe it, or care about it. They believe that they can starve the goose that lays golden eggs and still keep getting golden eggs.

[tanyev]

4. Because *ha, ha* it's just Trump being Trump! *ha, ha, ha* What a card!

*desperate, maniacal laughter finally ending in sobs*

[erronis]

5. And Wall Street types jumping off ledges..... If only.

[jgmiller]

6. I generally agree but I think it's a little different this time

Just like too many people he's still using the old playbook and while I think his logic is correct for smaller investors and even some bigger ones it's not for the real big investors. With them there are two things going on, first they can still make money in volatility and they have so much money that if the market tanks they see it as a buying opportunity. Second they know they can extert a massive amount of pressure on the GOP if push comes to shove and if it looks like it's really going south they believe they can make some calls and Trump will either be shut up or pushed out, that's why Vance is there. They didn't want Vance because he's some brilliant VC guy, he's not, they wanted him there as their safety valve. Trump starts hurting the economy too much just call Vance and the losers Trump put in the cabinet and you can have him out of office in 24 hours.

[Bernardo de La Paz]

9. In 2025, it is the "retail investor" who saw the dips as a buying op while the "real big" guys hedged. . . . nt

[BumRushDaShow]

7. Two things

1.) They are "distracting themselves" with the AI bubble.

2.) They are repeating what they did when COVID hit and the consequences blew them away and they had to scramble to recover -

[Uncle Joe]

8. The markets are controlled by a very small group of oligarchs and corporate conglomerates.

They can't sell out too fast, especially the ones that own a piece of everything ie: Blackrock or their other holdings will drop if a panic ensues.

I believe the other consideration is *rump's age, and rapid deterioration with Satan calling him to bed.

It's also unlikely that Vance will have the same firm grip on the GOP's pubes in Congress should he take over as he was never elected President.

Thanks for the thread applegrove

[Volaris]

10. Because the stock market is THE lagging indicator...

It's the last thing to go south when there's a systemic issue with the overall economy. By the time the Dow tanks five thousand points in a morning, it can't be stopped it can only be bailed out (AGAIN).

[edhopper]

11. If the geniuses on Wall Street

could see the Economic Data for what it was, there would be a slow sell off, not the inevitable crash when the downturn become obvious.

If they had any intelligence, they would not have backed Trump, and fool could see his Economic ideas are disastrous and he is an ignorant buffoon. But they decided a 2% marginal rate cut on taxes they don't pay is more important than the country.