A Market Still Trying to Find a Catalyst (Live in 45)Everyone, everywhere about to become a labor economist...
I’ll be live at 8:45 with the breakout lists and the full rundown. This is a really important conversation today about trading, volatility, and what to expect through mid-March. Click here, and I’ll see you shortly. Good Morning: What has been the most important debate in economics for the last 300 years? Some people might go back to the Reagan years to debate the divide between the Keynesian influence on U.S. spending and the Austrian economists. That’s not the story that will matter over the next 36 months… I want you to think deeper… because Jack Dorsey and this age of AI have opened up a different conversation today. Shares of Block (XYZ) are up 30% this morning after Dorsey (founder of Twitter) announced he would cut about 40% of his workforce. The reason? AI will require fewer people… The company will run leaner… a lot of people are going home. Some will consult. And, as he noted, the company is healthy… Dorsey decided to cut employees all at once rather than over multiple rounds. That’s the right decision… because cutting over three or four rounds can and will impact morale of a business. I’ve worked in a public company that downsized multiple times… It’s stressful. These cuts come as other names like eBay, Cigna, and Amazon also make cuts… Look at every fintech company… and everyone else to see that Dorsey is the first mover. This provides permission to start the process… let the speculation begin. Which brings me back to my point… What is the most important economic debate of the last 250 years? Well… it comes down to the very uncomfortable conversation about labor and capital… And it is a reminder that every hire at a business… every person… is part of a company's portfolio. Businesses hire workers, produce, and keep the profit or eat the loss between the cost of employment and the outcome. Yes, I know that a certain bearded fellow wrote about this… but so did virtually every major economist of the 17th and 19th centuries… Some people make it rain and generate lots of money for a company. Some people breakeven… and some people steal staplers at best… or $4 million at worst to launch music careers (true story). It is at the heart of capital formation… at the center of labor formation… and it will now, very likely, reintroduce all of these concepts again… And given my background and studies of political economy, I’m sure I’ll be dragged into these conversations. I just don’t plan to do it here unless it centers squarely on the financial markets, your investments, and trading. This subject likely won’t be at the heart of this year’s elections… but I can see it now at the center of people’s concerns come 2028. For investors and for work… As I’ve said repeatedly, the best place to focus your attention is on places that can’t be automated… I’ve highlighted that in a world that we live in today… AI is deflationary, we still have a fiat currency… we must print to prevent a debt crisis… and the generation with the most political power and financial firepower will remain people over 65. So invest there… I talked about this on Sunday… Next week… the Hedge of Tomorrow 2.0 report will come out. Capital Wave readers will get access to it first. Everyone else will have to wait and download it… Now… let’s get to the premarket updates…... Continue reading this post for free in the Substack app
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