throwaway_srb's comments

Can you please distinguish between the ex-presidents’s words and actions?

He supported domestic production, but failed to do anything meaningful. He claimed to support the working class but then passed the TCJA which benefited the owners of capital more than labor.

He did get a few things right like Operation Warp Speed, but it’s overshadowed by the sheer incompetence of the implementation of other actions (ref. CARES act).

I’m not trying to start a flame war nor am I insinuating that you are presenting arguments in bad faith; I’m merely stating that the actions need to be contrasted with the words.

The real puzzle to me is the level of support he enjoys after a term in the office. IMO there are much better people to implement the policies that he claims to champion (eg Ron DeSantis, Tom Cotton) who also happen to be vastly more competent.

This is horrible advice.

Hmm, some low effort comments here.

Here's a different perspective (fully admitting that I only read the headline, it seems to be paywalled): I think the causality is reversed here. Low interest rates are a mere symptom of the lower natural rate of interest (r*). The Fed can do all it wants to the short term interest rates, but the long term rates are ultimately set by the market. 30y treasuries are being traded today for 1.9%. Even if you believe that the Fed is manipulating things in the short end, there's nothing it can do in the long end (well, technically it can carry out QE and buy 30ys and suppress yields, but the WAM of the SOMA[0] has been falling since the COVID crisis, so I don't think that's what's happening here).

Okay, so why is the r* low? I personally ascribe it to demographic shifts (older population -> more savings -> savings glut -> capital is cheap -> rates low). Atif Mian and Amir Sufi presented some work at Jackson Hole this weekend that claims that it's all about inequality, not demographics. I'm not entirely convinced just reading the headline result, but it's plausible, and Atif and Amir are serious researchers, so I would give them a non-zero weight in forming your world view.

EDIT: [0] WAM = weighted average maturity SOMA = Fed's System Open Market Account

Basically a shorthanded way of saying that the average maturity of the Fed's holdings are not constant, but rather shortening, indicating that the Fed is not purchasing new 30y paper (at least, not at the same clip) and simply letting the existing debt roll off the books.

Based on my experience, I think the phrasing[0] is pretty much par for the course for equity research reports, and does not indicate any sort of orientation in their value system. I can see how it can appear malicious or pejorative for people who don't write and consume these reports on a day to day basis. That being said, I think the author and you are reading too much into the particular words here.

In any event, if I haven't managed to convince you, let us agree to disagree :). Cheers.

[0] Threat, for example, is one of the components of SWOT analysis, and is used in the sense of a downside risk factor and doesn't imply anything malicious.

They are calling them a "threat" to equity valuations. The job of a sell-side analyst is assess upside and downside risks to equity market returns, and in this case, the analyst is contending that a potential decline corporate profit margin driven by an increase in wages is a "threat" to _equity valuations_, and not so to society at large (one can make arguments about the interaction between society and equity markets, but that is not the point they are making here).

I would recommend that you spend some time learning a little more about the sell-side world before throwing barbs at internet strangers. I'm not currently associated with that world in any way, shape or form, but I know enough to question the "Finance is evil/Goldman is the devil" meme.

Is this what happens when someone reads a sell side report for the first time? The author is having a fit merely over choice of words in the GS report. The GS analysts aren't passing a moral judgement as to whether rising wages are a good thing or a bad thing. They are merely pointing out that current stock market valuations are baking in a corporate profit margin that may not hold in the face of rising wages. That's it.