Market Outlook, October 2025

 From our broker's report. "U.S. stocks extended their rally into the third quarter, led by strong recoveries in technology, consumer discretionary, and communication services-sectors previously pressured by tariff concerns. The S&P 500 has surged over 30% since the April 8th low, highlighting the resilience of markets and investor confidence amid ongoing uncertainties like tariffs, Federal Reserve scrutiny, cooling consumer spending, softening job growth, and the recent government shutdown.  Despite volatility, our strategy remains anchored in broad diversification, deliberately avoiding overconcentration in any one sector or stock, while hedging against inflation and stagflation risks."

Then says Yahoo. S&P 500 INDEX (^SPX) Historical Data - Yahoo Finance

Then says U.S. Bank:  "President Donald Trump has prioritized domestic manufacturing while extending key tax cuts from the 2017 Tax Cuts and Jobs Act, leading investors to question the stock market’s direction. After the inauguration, President Trump announced and implemented numerous tariffs, causing the S&P 500 to drop nearly 20% in just seven weeks. However, the market rebounded strongly; after reaching its lowest point of 2025 on April 7, the S&P 500 has surged more than 34% and remains near all time high."  Stock Market Under the Trump Administration | U.S. Bank.

Covid Student Loan Relief

You know, of course, about Biden's plan to forgive students loans and make people who never went to college or who already paid for their college (like the Bruces) pay for those who did borrow. But did you know how much the "pause" or Covid Emergency Relief and Federal Student Aid is costing us? $255 Billion as of March. The good thing is, it makes the $75 billion given to Ukraine not look so bad, right? President Trump began the pause, to last through December 30, 2020. Biden continued it, even though he says the pandemic is over, and even though employers can't find workers to earn the money to pay their loans. It's all part of the inflation which caused the Fed to raise interest rates to cool the economy, which in turn is helping create the bank crisis (and bad management, but that's another story). Everything is connected to everything else. The lockdown's damages in increased death, debts, and divisions among families and friends will not be known for years.

Trump Suspends Student Loan Payments Through December 31 (forbes.com)

Student Loan Forgiveness Debacle Has Already Cost $255 Billion in Lost Federal Revenue - Minding The Campus

More opinions on bank failures

Patrick Bet-David and panel  Barry Habib, Adam Sosnick, and Tom Ellsworth dig into how Dodd-Frank contributed to the SVB collapse. Silicon Valley Bank Collapse | The Patriot Post

                          ******

"Our economic seas are so rough that the financial experts at SVB made a bad bet on U.S. Treasuries — one of the safest asset classes — and sank their bank. At the end of 2022, SVB was holding onto over $17 billion in U.S. Treasuries and another $91 billion in government-issued mortgage-backed securities (MBS) that function similarly to U.S. Bonds. These bonds were purchased when interest rates were 1.5%. As interest rates rose north of 5%, those bonds could only be sold for a substantial loss.

Inflation and rising interest rates killed Silicon Valley Bank, slowly moving their balance sheet out of balance. Depositors became suspicious and withdrew their money.:   Jessica Anderson JESSICA ANDERSON: Congress Killed Silicon Valley Bank | The Daily Caller

                        ******

“Remember that after 2008, the Obama administration, Eric Holder swooped in and imposed DEI, diversity, equity and inclusion standards on the entire financial sector, and that’s one of the main reasons our big banks are now increasingly incompetent and one of reasons Americans are so divided by race,” Tucker Carlson said. “Ideologues who used the 2008 bank bailout to kill American meritocracy, that’s a big step, mostly unacknowledged, but we are living with its consequences. So, you have to ask yourself, what are they going to do this time?” Tucker Carlson Wonders What The Federal Gov’t Will Get In Return For ‘Backstopping’ Deposits At Failed Banks | The Daily Caller

                    *******

“Interest rates spiked, right, because of inflation,” Bill Maher said to former Democratic presidential candidate and Forward Party founder Andrew Yang and Democratic Rep. Elissa Slotkin. “So, when Uncle Sugar was very generous during COVID, right? That was the result of that. That’s what caused the inflation, a lot of what caused the inflation. You cannot put $6 trillion that you don’t have into people’s pockets and not expect some inflation.” ‘Uncle Sugar’: ‘Generous’ Spending During COVID Pandemic Led To Bank Failures, Bill Maher Says | The Daily Caller

                     *******

"There are 186 banks across the country that could fail if half of their depositors quickly withdraw their funds, a new study published on the Social Science Research Network found. Even insured depositors — those with $250,000 or less in the bank — could have problems getting their cash if these institutions face the sort of run that Silicon Valley saw a week ago.

The concern is that these banks hold a significant amount of their assets in interest-rate sensitive financial instruments like government bonds and mortgage backed securities. The value of those older, low-interest investments dropped sharply as the Federal Reserve hiked interest rates over the past year."

Nearly 200 banks could fail the same way SVB did: study (nypost.com)

                    *******

"Silicon Valley Bank, a lender that was a fixture in the venture capital space for decades, collapsed on Friday. The California Department of Financial Protection and Innovation closed SVB and named the FDIC as the receiver. The trouble started on Wednesday after SVB suddenly announced a plan to raise billions in capital to cover big losses, setting off widespread panic among investors and the tech founders they backed. Shares of the company fell by around 60% in Thursday trading, another 20% in aftermarket trading, and were halted at the open on Friday. Hours later, amid reports that SVB was struggling to attract buyers in a sale, the government took control. In the run-up to all this, SVB’s proxy statement, filed earlier this month, reveals that the firm’s chief risk officer stepped away from her role early last year, and the bank did not hire a replacement until this past January." SVB had no official chief risk officer for 8 months | Fortune

                  *******

"The broader problem, though, is that just as the government had created that brittle 2008 financial industry in the first place, with the too-big-to-fail regime that had begun in 1984, the government also created today’s self-satisfied tech industry. How did SVB’s deposits triple in less than half a decade? Why did Signature Bank start dabbling in crypto? Why on earth did anyone ever trust Sam Bankman-Fried to do anything?

The culprit is all the money the federal government has pumped into the financial system over the past 15 years. After the financial crash of 2008, the Treasury and the Federal Reserve wanted to revive the economy by spurring yet more cheap lending and borrowing, ignoring how it was cheap lending and borrowing that had crashed the economy in the first place; household debt levels already stood at record highs. . . " Silicon Valley Bank: Who's to Blame? | City Journal (city-journal.org)

               ******

"In big, bold type on its website, Silicon Valley Bank bragged that “44% of U.S. venture-backed technology and healthcare IPOs YTD [year-to-date] bank with SVB.”

To put it bluntly, this was a Wall Street IPO machine that enriched the investment banks on Wall Street by keeping the IPO pipeline moving; padded the bank accounts of the venture capital and private equity middlemen; and minted startup millionaires for ideas that often flamed out after the companies went public. These are the functions and risks taken by investment banks. Silicon Valley Bank – with this business model — should never have been allowed to hold a federally-insured banking charter and be backstopped by the U.S. taxpayer, who was on the hook for its incompetent bank management."

Silicon Valley Bank Was a Wall Street IPO Pipeline in Drag as a Federally-Insured Bank; FHLB of San Francisco Was Quietly Bailing It Out (wallstreetonparade.com)

Moody’s Downgrades Entire U.S. Banking System; Credit Suisse Plummets. Welcome to Banking Crisis 3.0 (wallstreetonparade.com)

Democrats wrong about the Trump economic miracle

According to the Federal Reserve’s 2019 Survey of Consumer Finances, the largest growth in household net worth from 2016 to 2019 occurred in households in the lowest 20% of income, 34.3%. And, in 2019, for the first time ever, the percentage of black households earning above $75,000, 29.4%, exceeded the percentage earning below $25,000, 28.7%.

Now doesn't that just defy everything Democrats have said from the beginning about the last four years? From Nancy Pelosi down to my cousin Ron, Democrats have been denying this. 56% of Americans say they are better off now than when he took office, the highest since Gallup started asking the question over 30 years ago.

Read the Star Parker article. Star Parker: President Trump: Promises Made, Promises Kept — The Patriot Post

Dear Shareholder

"For the 12-month reporting period ended December 31, 2015, yields on taxable money market securities remained at historically low levels. Short-term interest rates stayed near zero percent until December, when the Federal Reserve(the Fed) ended months of speculation by raising the target federal funds rate. It was the first time in nine years that the central bank moved to increase rates and it signaled confidence in the U.S. economic recovery."

 

Imagine that.  Nine years to signal confidence in the U.S. economic recovery when the recession was officially over in June 2009.  President Obama has kept the business cycle in constant disarray, especially with the health insurance situation, with investors holding back and small business, the engine of the economy, afraid to hire or expand.  Meanwhile, investors were kept calm by the Fed artificially keeping interest rates low.

Why the wealthy have done well under Obama

It’s a puzzle considering how Obama demonizes the “fat cats” that the upper 20% have done so well the last 4-5 years (aka the recovery) and the rest of the economy flounders. Record numbers are on food stamps, and many college new graduates are discouraged. Unemployment among young black men is much higher than before the recession.  This semi-annual report from Blackrock gives a pretty good explanation of how quantitative easing has helped the investors in stocks.  Now, this is a policy of the Federal Reserve, not the President’s, but at least he didn’t nix it.  If you are invested in a pension, 401-k or 401-b or IRAs, you’ve seen a similar, but smaller advance. People with CDs or savings accounts (usually less wealthy) have seen their savings eroded.

“One year ago, US financial markets were improving despite a sluggish global economy, as easy monetary policy gave investors enough conviction to take on more risk in their portfolios. Slow but positive growth in the US was sufficient to support corporate earnings, while uncomfortably high unemployment reinforced expectations that the Federal Reserve would continue its aggressive monetary stimulus programs. International markets were more volatile given uneven growth rates and
more direct exposure to macro risks such as the banking crisis in Cyprus and a generally poor outlook for European economies. Emerging markets significantly lagged the rest of the world amid fears over slowing growth and debt problems.

Global financial markets were rattled in May when then-Fed Chairman Bernanke mentioned the possibility of reducing (or “tapering”) the central bank’s asset purchase programs — comments that were widely misinterpreted as signaling an end to the Fed’s zero-interest-rate policy. US Treasury yields rose sharply, triggering a steep sell-off across fixed income markets. (Bond prices move in the opposite direction of yields.) Equity prices also suffered as investors feared the implications of a
potential end of a program that had greatly supported the markets. Markets rebounded in late June, however, when the Fed’s tone turned more dovish, and improving economic indicators and better corporate earnings helped extend gains through most of the summer.

Although autumn brought mixed events, it was a surprisingly positive period for most asset classes. Early on, the Fed defied market expectations with its decision to delay tapering, but higher volatility returned in late September when the US Treasury Department warned that the national debt would soon breach its statutory maximum. The ensuing political brinksmanship led to a partial government shutdown, roiling global financial markets through the first half of October. Equities and other
so-called “risk assets” managed to resume their rally when politicians engineered a compromise to reopen the government and extend the debt ceiling, at least temporarily.

The remainder of 2013 was generally positive for stock markets in the developed world, although investors continued to grapple with uncertainty about when and how much the Fed would scale back on stimulus. When the long-awaited taper announcement ultimately came in mid-December, the Fed reduced the amount of its monthly asset purchases but at the same time reaffirmed its commitment to maintaining low short-term interest rates. Markets reacted positively, as the taper signaled the Fed’s perception of real improvement in the economy, and investors were finally relieved from the anxiety that had gripped them for quite some time.

The start of the new year brought another turn in sentiment, as heightened volatility in emerging markets and mixed US economic data caused global equities to weaken in January while bond markets found renewed strength. Although these headwinds persisted, equities were back on the rise in February thanks to positive developments in Washington, DC. For one, Congress extended the nation’s debt ceiling through mid-March 2015, thereby reducing some degree of fiscal uncertainty for
the next year. Additionally, investors were encouraged by market-friendly comments in new Fed Chair  Janet Yellen’s Congressional testimony, giving further assurance that short-term rates would remain low for a prolonged period.

While accommodative monetary policy was the main driver behind positive market performance over the period, it was also a key cause of investor uncertainty. Developed market stocks were the strongest performers for the six- and 12-month periods ended February 28. In contrast, emerging markets were weighed down by uneven growth, high levels of debt and severe currency weakness, in addition to the broader concern about reduced global liquidity. The anticipation of Fed tapering during 2013 pressured US Treasury bonds and other high-quality fixed income sectors, including tax-exempt municipals and investment grade corporate bonds. High yield bonds, to the contrary, benefited from income-oriented investors’ search for yield in the low-rate environment. Short-term interest rates remained near zero, keeping yields on money market securities close to historic lows.”

The “fat cats” will love Obama’s choice

The wealthiest should love Obama's choice of Janet Yellen to head the fed. She will continue the easy money policy. And predictably, Obama will continue to demonize the "fat cats" because it plays well among his supporters. http://www.mrt.com/business/article_60e80d86-57b4-11e3-8100-0019bb2963f4.html

To the extent they pay any attention to the Fed, most Americans think the Federal Reserve system is part of our government.  It isn't.  Although the president appoints the Chair and members of the board, it is a private institution owned by private member banks (a non-profit!). Yes, indeed, it  controls our lives, but it's not part of our three branches of government, it is not part of the civil service system, you'll never see a budget or an audit (although it has been called for) and no one in government monitors it. Confusing?  Yes.

Obama and fiscal responsibility

“But I am absolutely committed to fiscal responsibility, which is why I’ve already proposed freezing all discretionary spending unrelated to national security for the next three years. And once the bipartisan fiscal commission finishes its work, I’ll spend the next year making the tough choices necessary to further reduce our deficit and lower our debt — whether I get help from the other side or not.” (President Barack Obama at Cuyahoga Community College, Parma, OH, 9/8/10)

1952-2012: U.S. Government Debt vs. Household Debt

The Fed, Fannie and Fred

"[Tim Geithner, Ben Bernanke and Barney Frank] are calling to raise the debt ceiling. This will assist them with perpetuating the biggest legal government scam in history [financial institution bailouts of over $12 trillion]. Meanwhile, responsible middle class Americans are barely making it, as their investments are devalued and government expands, finding more ways to collect money from them to support its Ponzi scheme.

This is not capitalism gone amuck, as Barney Frank claims. The government bailing out private banks is not capitalism but quasi-socialism. There is a simple solution to fix this: the banks must be held accountable. There should be a way to sue the banks that originate the irresponsible investments and loans, even if they transfer their risky ventures to other banks. Nor should they be bailed out when they fail. For every bank that fails, another one that is more financially responsible is ready to step up and take its place. Fannie Mae and Freddie Mac are quasi-governmental lending agencies, so suing them would only hurt the taxpayers. They were responsible for the highest rates of foreclosures. They have grossly failed, and represent government at its worst, so the only solution is to eliminate them." Rachel Alexander

The Biggest Legalized Theft of Middle Class American Wealth - Page 1 - Rachel Alexander - Townhall Conservative

The Federal Reserve

A friend at the coffee shop alerted me that Glenn Beck would be covering the Federal Reserve on his program tonight. So I guess that means we'll be late for our Friday night date. Even if you can't stand him, this would be a good thing for you to know. The Federal Reserve is not a government agency, but a private for profit bank. The Federal government only recommends the chairman--and that's Ben Bernanke, who seems to have more power than Barack Obama and also served "under" George W. Bush.

"On Friday 2011 March 25, the entire Glenn Beck show will be devoted to an exposé of the Federal Reserve. I was invited to be a guest on the program and, when it was taped last Tuesday, I was amazed to find that Beck, not only has read the book but praised it highly. In fact, almost his entire opening monologue was based on the information and, in some cases, the very same phrases used in the book and in my lectures. I was delighted to know that someone, either Beck or his researchers, had spent a great deal of time studying The Creature from Jekyll Island. But what is even more encouraging is that several million viewers will be exposed to an hour of economic and monetary truth. This will bring us a giant step closer to actually slaying the Creature." G. Edward Griffin

Ron and Rand Paul Introduce “Audit the Fed” Legislation

It's about time somebody did it.

"The Federal Reserve cherishes its privacy and has fought tooth and nail to keep it. Nevertheless, its ability to shower greenbacks on favored corporations and foreign banks may soon be drawing to a close thanks to the 2010 elections.

On January 26 the father-and-son team of Rep. Ron Paul (R-Texas) and Sen. Rand Paul (R-Ky.) “introduced companion legislation in both chambers of the United States Congress to require a full and thorough audit of the Federal Reserve,” according to Business Wire. Officially titled the Federal Reserve Transparency Act of 2011, the House and Senate versions of the bill are numbered H.R. 459 and S. 202, respectively."

Ron and Rand Paul Introduce “Audit the Fed” Legislation

Jon Stewart agrees with Glenn Beck--finally

This is really funny, even if he is a little late to the party.

No, Mitch. He needs to fail.

It seems that, like Obama, Mitch McConnell doesn't get it either. What is it? Is the air too thin in Washington? Why is it people don't get the Tuesday message?

"Senate GOP Leader Mitch McConnell (Ky.) said Thursday he wants President Obama to “change,” not fail, and said Republicans will force him from office in 2012 if he does not. “I don’t want the president to fail, I want him to change,” McConnell said in remarks at the Heritage Foundation, a conservative think tank in Washington."

What good is a "changed" failure who doesn't know he failed? I do not want Obamacare, I do not want Cap and Tax which will further destroy the economy, I do not want a bazillion sneaky regulations brought to us by his appointed czars, I do not want more leftist, squishy judges on the Supreme Court. No, Obama needs to fail at trying to destroy our country. If it isn't too late.

After Bernanke's move this week--the additional $600 billion--I'm not sure any of it matters at this date. Hasn't anyone read what the Fed did in the 1920s which brought on the Great Depression? John Maynard Keynes who advocated "managed currency" and constant government interference neither foresaw that the Depression was coming, nor how long it would last.

"A country that doesn’t understand its own history is not well equipped to deal with its future. The Great Depression was not a failure of the old order. It was the failure of the new order that had just begun. The Federal Reserve is the most powerful institution of a new order that believed in the efficacy of government and its ability to do good. The same Federal Reserve caused the Great Depression when its wise men made a series of cumulative mistakes that contracted the money supply by one-third and wiped out purchasing power in an unprecedented fashion." The Fed's Depression and the New Deal

Federal Reserve weighs steps to offset slowdown in economic recovery

Slowdown? What recovery? Do we really need the Fed? And just what is it, anyway? Does anyone know? Do you think the "recovery" is slowing down, or do you think there really hasn't been a recovery? Bernanke thinks FDR didn't do enough! 14 years he diddled and fiddled. Bernanke loved the guy. No wonder. . .

Federal Reserve weighs steps to offset slowdown in economic recovery

Fed Loses Secrecy Suit, Considering Options

The Federal Reserve lost an appeal March 19 in a bid to keep hidden the details of its estimated $2 trillion in bailouts to bankers around the world, prompting celebration among anti-Fed campaigners and promises of a continued fight from the banking cartel.


Read the story here

Believing Ben

Justin Fox writes: "Yesterday afternoon, TIME.com's business editor, John Curran, recommended that I take a look at Ben Bernanke's speech at the Brookings Institution. I glanced at the text, saw that it was an exact repeat of the speech he'd given at Jackson Hole in August, and thought, naaaaah. A couple hours later I read online that in the Q&A after the speech Bernanke had said the recession was "very likely" over. Which is what everybody and his brother—including, I thought, Bernanke—has been saying for weeks. No news there, either, I figured.

So I when I picked up my NYT this morning I was a little surprised to see Bernanke's words highlighted on the front page (although at least the actual story was relegated to the front of the business section). Then I'm walking Curious Capitalist Jr. to school and I see the FT at a newsstand. The lead story: "Recession likely over in US, says Bernanke." When I got to work I checked the WaPo and WSJ. Front page of the WaPo: "Recovery Underway, Bernanke Suggests." Top of the "What's News" box in the WSJ (with the actual story at the top of A2): "Bernanke: Recession 'Likely Over.'"

Why on earth would all these newspapers, struggling to survive in straitened times, devote valuable space and reporting time to this non-news? It certainly can't be because of Ben "the impact ... of the problems in the subprime market seems likely to be contained" Bernanke's brilliant record as an economic forecaster. Bernanke's words also didn't mark any sort of major change in his outlook. If Peter Schiff announced that he thought happy days were here again, now that would be news. Bernanke's Fed, meanwhile, has been giving pretty clear signals over the past couple of months that it thinks the recession is ending but the recovery will be weak. Which is exactly what Bernanke said yesterday. So again, why all the coverage? I can think of three main reasons." See what they are at Curious Capitalist

Ben said it, not Obama

But markets respond to positive, upbeat messages, not gloom and doom, it'll-be-years talk.

"Bank stocks on Tuesday posted their best performance in almost a month, and their seventh biggest percentage gain ever, after Federal Reserve Chairman Ben Bernanke reiterated that the government would keep banks solvent and said he saw no need to nationalize some firms.

Investors rushed to buy bank shares after Bernanke said there is no benefit from nationalizing the biggest U.S. banks."

And Newsweek certainly didn't help the mood blasting us with this cover. Why would they decide to say what he is now? The authors sound like whiny kids--"Well, Bush did it first." Then why didn't they love Bush? They slobber over Obama!

"We got into this mess largely because of government meddling in the economy, and because of regulations, policies and agencies that have no business existing in a capitalist society in the first place." Newsbusters

And I don't trust Ben either. He and Hank laid the ground work.

What if there were a recession

and the federal government and the Fed did nothing, with Congress going home on an extended vacation. Based on what has happened in the last 8 months (and what happened 1929-1943), we'd be way ahead. The stock market has done nothing but drop since the markets woke up one day and realized Obama would be president after the Democrats met in the summer. When the congressional whiz kids decided to bail out the banks with the Ben and Hank (Fed + fed govt) dog and pony show, nothing recovered and everything got worse. The President's solution? Do more interfering. If a lot didn't work, much more might! Obama's numbers are dropping like a Bush in Iraq, and he's heading for the heartland to drum up support. Hope and Change.
Hopeless change.
Less change,
changing hope.