In Reply to: Trump put us into a K economy. That's why the posted by Bruinfan4ever on December 05, 2025 at 15:32:50
I think the current strength of the U.S. economy for the rich is temporary. A market correction has been overdue for some time, even before the recent Trump-related policy changes. The new tariff policies simply increase the potential depth of the eventual downturn.
Right now, the broader market is being propped up by a small group of roughly ten major AI-related companies that make up a disproportionately large share of the S&P 500. The concentration risk is enormous. Recent internal messaging from OpenAI—an “all hands on deck” notice—suggests growing concern about justifying its valuation, something the CEO has effectively acknowledged in recent comments.
NVIDIA’s earnings beat last week prevented what could have been a significant market drop. Many sophisticated investors had been shorting the market ahead of that report, expecting a miss, but one strong earnings release doesn’t change the underlying issue: the market’s resilience is heavily dependent on a handful of companies and the assumption that AI will replace large numbers of workers.
If AI doesn’t replace substantial labor, the growth narrative weakens and the market likely falls. If AI does replace substantial labor, we could face a recession driven by unemployment and reduced consumer demand. Either way, the current setup has structural vulnerabilities.
Markets can stay inflated longer than logic might suggest, but not indefinitely. When the correction comes, the top 10% of earners—currently responsible for much of the buying activity—are likely to pull back. And when we refer to that top 10%, we’re talking about households earning roughly $170K and above.