Fed And Trump May No Longer Rescue Markets As Bottom 50% Of Americans Have ‘Zero Interest’ In Stocks
As global markets experience their worst selloff since March 2020, venture capitalist Chamath Palihapitiya suggests traditional stock market bailouts may no longer be politically viable.
What Happened: The former Facebook executive wrote on X Sunday that “the top 10% of American households own 88% of the total equities owned by American households” while “the next 40% of households own 12%.” This means “the bottom 50% of Americans have zero interest in the stock market,” Palihapitiya noted.
His comments followed Treasury Secretary Scott Bessent‘s remarks that market volatility is “more a MAG Seven problem than a MAGA one,” referring to major tech companies Microsoft Corp. , Apple Inc. , NVIDIA Corp., Alphabet Inc. , Amazon.com Inc., Meta Platforms Inc., and Tesla Inc..
Palihapitiya agreed with Bessent’s assessment, adding that Americans in the bottom half of the economic spectrum “are likely in debt and, simply, just want to do better.”
Why It Matters: The venture capitalist challenged market orthodoxy, suggesting “conventional wisdom has been that there is always a Fed put or a White House put if the stock market contracts enough,” but warned investors that “this may be a moment to hold a radical new view which is that the put is off the table.”
Palihapitiya’s comments come amid significant market turmoil. The S&P 500 plunged 6% Friday, pushing two-day losses past 10%, while the Nasdaq entered bear market territory after falling 22% from its record high. On Sunday, Dow futures fell 3.26%, extending the selloff.
President Donald Trump has shown limited concern about market losses, saying on Sunday, “I don’t want anything to go down, but sometimes you have to take medicine to fix something,” according to Reuters.
Meanwhile, Fed Chair Jerome Powell has emphasized caution, noting the Fed “does not need to be in a hurry” to cut rates despite Trump’s public pressure. Powell warned that Trump’s tariff package could raise inflation with “more persistent effects possible.”
Seems like some big whale is backstopping the stock market fall right now as the S & P 500 and Nasdaq are in the green. The Fed may be stepping in. I had a feeling there would not be a bloodbath today as there was a lot of hype about this over the weekend. I still see a bear market unless Trump suddenly relents on the tariffs or gets put into a corner.
This is a controlled demolition playing out.
I have a gut feeling this time that if the stock market crashes there will be NO bailout of Wall Street like what happened in 2008 with the Federal Government bailout of banks. There will be no Federal Reserve interest rate cuts to accommodate the markets.
The top 1% have already consolidated their wealth so there is no need for them to generate more wealth with QE. QE has been played out.
They will leave the retail investor holding the bag.
Those up top have a way of pulling out the carpet from under the masses by suddenly changing the rules.
I would say, precisely!
Trump is bashing China this morning on social media. I’m warning the readers that the ultimate outcome will be a complete separation from CCP China. That is the ultimate goal.
A typical Trump voter hates China and what the CCP has done to this country. The massive trade imbalances, the buying up a farmland, the drug crisis, etc, is all being blamed on the CCP.
Trump is spinning is the right way. I’m not supporting him, but he is appealing to his voter base. This is mostly the bottom half of the population. Actually, those who don’t own stocks, which are the bottom 80%.
The EU and European nations know better. The ultimate goal is to get rid of CCP in all of the western hemispheric affairs. The CCP will never negotiate and will drag their economy into the cesspool rather than deal with Trump.
Trump is more intelligent than the alt media give him credit for. The CCP will be gone and will eventually bomb America out of sheer frustration. The CCP is run by the devil.
100 % truth that the CCP is run by satan. In fact the Synagogue of Satan helped set up the CCP in the 40s as there were some “Jews” that were involved in advising chairman Mao.
Indeed. Xi’s days are probably numbered. He’s beginning to look foolish, while it’s domestic economy continues to burn. I suspect we may begin to see rumblings of his replacement as the top of CCP
Yes,China will take this treatment as a direct confrontation and when backed into the corner, (think Japan 1941) we get the surprise attack!
Ya, right…
Donald Jr became known as “Diaper Don” for his penchant for
regularly falling asleep drunk on someone’s bed and wetting himself.
“Diaper Don would wake up in some stranger’s dorm room or off
campus apartment or bedroom in his frat house, covered in piss,
walk back to his own room, and get blitzed that evening or the next
anew,” — Emily Jane Fox
His other children that attended did better; Ivanka graduated Cum
Laude with a degree in economics, and Tiffany Trump graduated and
graduated from Georgetown Law School. Despite Donald J Trump’s
claims of being “first in his class” at U Penn, we know he never received
any honors or made the dean’s list. One professor had this to say about
Donald.
“Donald Trump “was the dumbest goddamn student I ever had!” —
William T. Kelley
I’ve seen this “theory” also. Drive people into treasuries, drive down interest rates, help our debt payment interest paid, etc.
I understand that the “reason” given is to level the playing field because we have been taken advantage of, but the USA created this monster in the first place!
Therefore, I believe there are underlying real reasons which we have discussed.
I think it’s more the reality. Trump has a lot of leverage here and his voter base will eventually come around. He just needs to position himself properly.
The European Union is now negotiating with Trump. They have to as the EU runs a couple hundred billion dollar a year trade surplus against the United states.
With the E.U. surplus, they have some room to negotiate, although their economies are already stalling, so they are in a tough spot. If Trump continues pushing for more of their budgets to go to defense…
It’s not really about the EU, but CCP China.
Rumor has it that CCP China is dumping their Treasuries in retaliation for the tariffs. This is the reason for the huge spike in bond yields.
And Trump is threatening 50% more on tariffs! If this keeps going to its logical conclusion look out! I wonder if other Brics nations will line up to support China? I would think China doesn’t want to stand alone in this.
Oh my Lord! Smoot-Hawley Act again! What a bunch of stupid retards. Apples and oranges.
Trump may actually come out looking better if he can position himself properly. The bottom 90% of the population own only 12% of the stock market. The bottom 50% own nothing in the stock market.
Most of these people who are barely scraping by view the top 10% with contempt anyway. I know firsthand as a property manager. That’s why I drive my 2002 F150 to meet tenants. I pretend I’m one of them.
Most working class people aren’t trading or have stock portforlios, but many do have retirement accounts that are connected to it. Shorts are doing fantastic, as long as they covering and cashing out.
I’m wondering if a military conflict with CCP would boost oil and other commodity stocks or everything tanks, and if stocks crash, how long would it take to recover. At that worst case scenario, I don’t think the stock market would be taken offline and brokerage accounts forced to close….or maybe…
This would be an interesting test! Taiwan has just moved further into U.S. allegiance. No retaliation and more U.S. investment. What if China moves against Taiwan? Would that cause a regional, boots on the ground inflict? China doesn’t need much of an excuse now.