Becker Private Equity & Business Podcast
The Markets Are Crashing & We’re Going to Get Tired of Winning 3-10-25
Mon, 10 Mar 2025
In this episode, Scott Becker discusses the sharp market downturn, the impact of government spending cuts, and the ongoing trade war, highlighting how uncertainty fuels market instability.
Chapter 1: What is causing the current market downturn?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's subject is the markets plunge and we can only take so much winning. So here's the thesis today. The markets are down about 2.5% to 4%. The S&P about 2.5% as we record this. The NASDAQ around 4%.
Chapter 2: What are the implications of government spending cuts?
Those are big, bad numbers and not fun numbers, particularly on the eve of last week where we had a very challenging, a follow-up to last week, we had a very challenging week in the market. So very challenging numbers. The concept of winning is President Trump often talks about getting sick of winning and winning so much you're going to get sick of it. And here's the reality.
Chapter 3: How is the trade war affecting the markets?
There are three different big threads that are causing market challenges. One is the threat of government shutdown. Two is the concern about the government actually reducing spending. And so much of spending has kept us out of a recession, largely wrongly so, but deficit spending has helped that. And third is this ongoing tariff war.
Chapter 4: What are the challenges of fighting multiple economic issues?
Now, the reality of this is we do need to reduce government spending. do we have lower tariffs than almost every other country? So there's not that there's not good reasons for some of these things, but there's also a concept called channel capacity. And there's two things that I think are problematic. One, there's only so many wars and challenges you could fight at one time.
Chapter 5: Why is reducing government spending necessary?
Like that's the old adage of Germany getting itself into two front war in World War II, both Russia and on the Eastern front and then the Western front. You can only fight so many wars at a time Second is the markets can't handle this.
And third, President Trump, one of the challenges with President Trump, and again, I'm not particularly an anti-Trump person, is he does an absolutely poor job of explaining why he's doing what he's doing and thinks it should be apparently obvious to the rest of us. Now, on the reducing government spending and that potentially causing a recession is,
You might as well say it out loud that we need to reduce government spending, and this may cause a slowdown in growth, and the argument being we've had artificial growth through deficit spending. Rational. Second, on tariffs, you might lay out the case for why we have tariffs and why we're still going to have lower tariffs than most of the rest of the world is
But you've got to explain it rationally to people so we can all digest it and the markets can digest it. What are the challenges we have right now? And I joke when I see the market go down that we're going to get so tired of winning. Many of the different things that President Trump does have some sense or theory behind them.
The challenge is often how it's explained and the way that it's gone about doesn't feel like it's done in a very systematic, thoughtful way. And that makes those of us that follow the markets, those of us that follow the world, those that are business people, and almost everybody else a little bit raised trying to understand what's going on, and that's a little scared.
So we've got three big pieces of the puzzle today. Potential looming government shutdowns. potential reductions in government deficits and spending, which we'll see if that comes to pass. And then the trade war and all those things are weighing and providing a lot of uncertainty on the market. And the markets like certainty. Again, the markets crash and we're going to get tired of winning.
Thank you for listening to the Becker Private Equity and Business Podcast.
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