Elon Musk predicts a stock-market crash if Trump wins!

What does it means?
Why Musk is saying it just before elections?
Any explanations?


https://www.morningstar.com/news/ma...urmoil-and-a-stock-market-crash-if-trump-wins
Elon Musk predicts 'hardship,' economic turmoil and a stock-market crash if Trump wins
Oct 31, 2024 6:52am

By Brett Arends

Musk's shocking austerity message is an unusual one to send voters a week before what is likely to be a close election

The word "bombshell" has been so grossly overused for so long that it is guaranteed to make anyone's eyes roll. But what other word fits?

With just a week until the presidential election, Donald Trump's close ally and major economic adviser Elon Musk is warning supporters to expect economic chaos, a crashing stock market and financial "hardship" - albeit "temporary" - if Trump wins.

It sounds so extreme that Trump fans must either wonder why he had been so foolish as to say the silent part out loud, or maybe hope that the whole story is made up - "fake news."

But it's very real.

Billionaire Musk, Trump's would-be budget-cutting and government-efficiency czar, also says there will be "no special cases" and "no exceptions" when he starts slashing federal spending after Trump takes office.

And he predicts he will need "a lot of security" personally because of the likely reaction to his policy moves.

Speaking Tuesday on a "telephone town hall" with supporters, Musk promised deep federal budget cuts, austerity and economic pain ahead in a new Trump administration.

"We have to reduce spending to live within our means," Musk said. "That necessarily involves some temporary hardship, but it will ensure long-term prosperity."

Describing government spending as "a room full of targets," Musk said: "Like, you can't miss. Fire in any direction, and you're going to hit a target."

He said, "I think once the election takes place we'll immediately begin looking at where to take the most immediate action."

And, he added, "obviously a lot of people who are taking advantage of the government are going to be upset about that. I'll probably need a lot of security."

"Everyone," he said, will be taking a "haircut."

On his social-media platform X, the former Twitter, the Tesla (TSLA) CEO went further and agreed with a supporter who predicted "an initial severe overreaction in the economy" and that "Markets will tumble."

"Sounds about right," Musk replied.

Yikes.

Trump has already said he wants Musk to head up a commission on government efficiency. Trump says the billionaire tech entrepreneur would be his "Secretary of Budget-Cutting," implying a possible cabinet position. Musk himself has described his prospective role as running a "Department of Government Efficiency," though he admits the title is an inside joke - the acronym spells DOGE, the name of a cryptocurrency he has referenced often over the years.

Musk's shocking austerity message is an unusual one to send voters a week before what is likely to be a close election.

Especially when America is booming.

The job market is growing so strongly it has wrong-footed the Federal Reserve, which got worried a month ago and slashed interest rates to prevent a slowdown that didn't happen. Third-quarter economic growth was a thumping 3%. The latest inflation figures, while higher than expected, nonetheless show a dramatic fall from the postpandemic peak. Average weekly wages, after adjusting for inflation, are now (slightly) higher than before COVID-19.

Meanwhile, investors in the S&P 500 SPX have gained 54%, including dividends, since the start of the Biden administration - or 30% after deducting inflation. And the International Monetary Fund says the U.S. has the best major economy in the world.

This is not the usual picture when a politician and his campaign promise austerity, hardship, deep budget cuts, a likely economic "overreaction" and a slump in the stock market. You usually hear those things proposed during a deep crisis, when desperate times supposedly demand desperate measures.

Instead, Musk's agenda is like your new family doctor promising a major dose of brutal chemotherapy when you are perfectly healthy and cancer-free.

It can hardly help that Trump and Musk themselves are billionaires, and wouldn't experience any of the hardship predicted for ordinary Americans. Musk, with an estimated net worth of $270 billion, is the richest man in the world.

See: 'DJT' stock's tripling in October is adding $4 billion to Trump's coffers

Musk told supporters that the measures were needed because of the crisis of the skyrocketing federal debt.

He compared the U.S. to an individual, even though a country that controls its own currency cannot go bankrupt because of owings to itself. At one point he said spending was "bankrupting the company," before correcting himself and saying "country."

Musk did not address the issue of Trump's proposed tax cuts, which the Committee for a Responsible Federal Budget says would add about twice as much to the national debt as the proposals of Democratic rival Kamala Harris. Musk's concern with the ballooning national debt was focused entirely on cutting spending.

Musk also said cutting federal spending was needed to bring down inflation, even though it has already fallen to 2.4%.

The Trump campaign did not immediately respond to a request for comment.

Wall Street economists are warning that Trump's tax cuts and tariffs would add more to inflation than Harris's proposals.

As reported here at MarketWatch just one day ago, Musk's brutal budget-cutting math is way more severe than most Americans, including most MAGA fans, realize. Two-thirds of the entire federal budget already goes toward Social Security, Medicare, debt interest, defense, and veterans. (Note that does not include Medicaid.)

Everything else (including Medicaid) adds up to $2.35 trillion this year. So Musk's promise to cut "at least $2 trillion" from the federal budget either means he is going to abolish pretty much everything else - Medicaid, Transportation, Justice, Homeland Security, Agriculture, the Food and Drug Administration, and so on - or he is going to cut Social Security and Medicare.

Or, as Musk put it, when it comes to cutting federal programs there will be "no special cases ... no exceptions."

-Brett Arends

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


(END) Dow Jones Newswires

 

Economists warned long ago, get it under control or suffer the consequences later..

And he's right, honesty. No one wants to face reality..

 

I think that's a pretty solid prediction.

 

Yes, MAGA doesn't want to face reality. They think cutting the budget to the bone is easy and it's only the "others" that will face the consequences. They'll have a hard wakeup call. Of course, they'll claim that it's all the Dems' fault.

 

as opposed to bubblehead who wants to buy votes with student loan forgiveness and forgivable loans to black (I repeat Black) start up businesses. Not only is that pandering, it violates several laws and constitutional provisions

 

Musk is going to use the same trial by error approach to fix the US deficit as he used building rockets.

 

We can't keep going how we are. It's really as simple as that.

 

Oh hell, MAGA MAGA MAGA, this sort of wild ass spending has no innocents.. That's the real problem with this country, finger pointing and the not addressing and demanding our leaders get spending under control.

Blame away, but in the end, we will be the suckers that get in the end

 

the market goes up and down regardless of who is president

I have watched the market make "adjustments" more than once

being a boomer, I will never understand the tech market

for example , Mcdonalds is a company with over 38,000 locations at mostly prime locations

yet Facebook has a higher value,

38,000 locations world wide compared to whatever Facebook has as hard assets

seems macadoos would have more value than a Websight that produces nothing

another example is Tesla...in 2023 it was the 15th highest selling brand with just under 2 million cars produced

Toyota produced 5 times that at just under 10 million cars

tesla is by far the highest valued car company despite 14 other car companies produce more cars

seems a market adjustment is inevitable ..it is just a matter of time

 

Facebook is a platform for extremely well targeted ads. There's that saying about how if you're getting a service for free, you're not the customer, you're the product. That's the case with Facebook's users. Their real customers are companies looking to advertise to specific audiences. If I make something that is most likely to be purchased by middle aged women, with a high school education, who have more than two kids, and are Lutheran, I can advertise on Facebook and know that 90% of the people who see the ads for my product fit those demographics exactly.

 

I understand what the purpose of Facebook is .
I just do not understand the valuation of the company ..it produces nothing but advertisements ..advertising a product has more value than producing a product

again. One day the market will adjust ..

and investors will look at hard assets and act accordingly.

at this point the stock market is basically a big casino .. and the biggest players are card counters

 

Until AI kills the Internet, they're going to have one of the largest pools of eyeballs to get ads in front of. That's extremely valuable to companies. Only TikTok is possibly larger, right now, but they don't have quite as accurate data in terms of demographics. Although interest data is possibly more valuable.

Anyway, yes, McDonald's has physical assets, but their product is cheap. Information is more valuable and the overhead to accumulate/produce it is less.

 

I think Kroc once said that his team is on of the greatest...property owners...in the world. He considered the burger business secondary.

 

the only way we ever pay off the debt is to increase wages

but with AI around the corner, the jobs won't be there, so yes, eventually the world crashes

what comes next...?



Though the rich and powerful may try to restrict resources as they want them for themselves, the transition not gonna be fun for many, glad I am old, but fear future generations

 

On a seperate but salient note, Joe Biden's economy after Covid is the envy of any first world nation!

 

So, what do YOU think what will happen if Musk comes in and cuts the budget to the bone? Just want to see if you have realistic expectations. Are you ready for a deep recession?

 

If the Congress supports Trump economic agenda, then the market will indeed crash, along with the rest of the economy. It cannot withstand that level of government interference.

Heck, Trump is pre-emptively promising bail-outs because he knows his policies will crush many sectors of the economy.

Fortunately Congress is not going to support his agenda (trade wars + massive tax hikes on imports).

It's not for him to cut. Congress does the cutting, but history shows GOP does the opposite when they are in power. In 2017 they hiked spending by 20% as soon as they were in power, and Trump in the WH

 

The anticipation of a Trump win is sending mortgage rates soaring. Top economists say scorching inflation is very likely to go with it
https://www.msn.com/en-us/money/mar...n&cvid=2ec8cd6756d047948c55b72060d09a7e&ei=20
In June, 16 Nobel-prize winning economists signed a letter expressing their concern that Trump’s proposals could reignite inflation. Earlier this month, 68% of economists surveyed by the Wall Street Journal said inflation would likely be higher under a Trump presidency. On the other hand, 12% said the same for a Kamala Harris presidency. Hot, hot inflation is kind of what got us in the mess, the frozen housing landscape that is. Home prices had already soared during the pandemic, but when inflation reached a four-decade high, pushing the Fed to aggressively raise interest rates, mortgage rates indirectly followed: the housing market was paralyzed.

 

Vote MAGA if you want the markets to crash.

 

Realistically?

I don't think Musk is going to do anything..

Am I ready for whatever, hopefully! Then again, eventually all this printing money and debt is going to come to a head.

And the SOONER its addressed aggressively the less of a impact we will feel..

 

(D) in 2016: "If Trump wins WW3 will start and we all die"

"Russia, Russia, Russia" lol

The only people doing serious damage to the country were all the far leftists freaking out over an election.

 

Ron Paul had a solution in 2008, but he was not allowed to speak at the RNC debates. His air time was a fraction of those of the main candidates. I remember Romney and McCain snickering while Paul tried to make his points.

 

Vote for Trump if you want the markets to crash.

Says Elon.

 

Best job growth DEBT and 1.9 TRILLION can buy.. So with all this economic growth under joetato why hasn't our debt been paid down or at least balanced our deficit?

 

And your point is?