BeeLine: This and That---April 7, 2025 Edition

A few random observations, charts and factoids to provide some context on what is going on in the world.

Stock Market Perspective

There was a lot of angst over the stock market meltdown on Thursday and Friday of last week.

The S&P 500 was down 9.1% over those two days.

However, it is easy to forget that the stock index was up over 50% in 2023 and 2024 alone.

Over the last ten years the S&P 500 is up over 150%.

S&P 500 Index 10 Year Chart
Source: https://tradingeconomics.com/united-states/stock-market

Context is everything when assessing anything.

Eggs, Oil and 10-Year Yields

Stocks are not the only things that have been moving down.

All the media could talk about six weeks ago was the price of eggs and why Donald Trump was not getting the price down.

You are not hearing about eggs any more.

Eggs are down 60% since February 24.

Source: https://tradingeconomics.com/commodity/eggs-us

Oil prices have also dropped to their lowest since August, 2021 at below $60/barrel.

Source: https://tradingeconomics.com/commodity/crude-oil

The yields on 10-year Treasury bonds have dropped from 4.8% to below 4.0% since the middle of January.

Source: https://tradingeconomics.com/united-states/government-bond-yield

This rate is critical for mortgage rates and financing the nearly $37 trillion of federal debt.

A 1% point saving in interest on the federal debt is equal to $370 billion in annual savings.

To put that it context, California's entire state budget is shy of $300 billion.

New York's budget is $132 billion, Texas is $110 billion and Florida is $79 billion.

$370 billion is a huge sum of money tied to a mere 1% decrease in interest rates when the federal debt is concerned.

Yes, the stock market losses are significant but there are much bigger factors in play here.

Keep in mind what I wrote on March 18 in these pages.

There are a lot of factors at play here but my view is that President Trump and Treasury Secretary Bessent are not adverse to bringing the economy down a notch or two right now
First, they understand that the concentration of wealth and income at the top in not a healthy situation for the United States long-term. Trump also understands that a good deal of his support did not come from Wall Street and that top 10%.
Second, the large amount of government spending and money printing has fueled large increases in housing prices and stock prices in recent years that has disproportionately benefited the top 10% but has disadvantaged large groups of people (particularly the young).
Third, the federal government desperately needs interest rates to come down in order to finance the $36+ trillion of federal debt.

Fourth, there are only two ways out of the gigantic deficit and debt hole that Trump has inherited. The most obvious path is for government to inflate the debt away. The federal debt becomes manageable by destroying the currency. Of course, this also destroys the wealth of much of the population. The second option is to constrain spending going forward (DOGE), seek new revenue sources (tariffs) and grow the economy at a faster rate than government spending. Trump is totally focused on the second option.

Fifth, Trump and Bessent also understand if there has to be some pain it is far better from a political standpoint to take it early in this term. To fully implement the Trump agenda is going to require stronger Republican majorities in the 2026 mid-term elections. Better to clear the decks now so that any pain is in the real view mirror than front and center in 2026.

Protests Against Eliminating Fraud and Waste

What a world we live in.

There were protests around the country this weekend.

What were they protesting?

At their core, they were demanding that Trump and Elon Musk stop all efforts to eliminate fraud and waste in the federal government.

Who ever thought that Americans would be protesting that their tax dollars need to fund more fraud and waste?

However, this is apparently where we are.

Link: https://x.com/CollinRugg/status/1908611839094865956

What Goes Around Comes Around

Letitia James ran for Attorney General of New York promising that she would prosecute Donald Trump for something... or anything.

In the end, all she could come up was to charge him in a civil fraud charge case arguing that he defrauded his bankers based on inflated real estate values in his financial statements. This case was brought even though the bankers had done their own due diligence on the real estate values, the bankers had been paid in full on all the loans in question and the bankers testified they had made a profit on the loans.

Despite this, a New York jury found Trump liable for $350 million of supposed ill-gotten gains.

That case is on appeal for which Trump has posted a bond while awaiting a final decision.

What I find interesting is that information has just come to light that at the same time Letitia James was pursuing the fraud case against Trump she had applied for a mortgage on a house in Norfolk, Virginia with a relative in which James declared would be used as her principal residence.

How can New York's Attorney General have a principal residence in Virginia?

She can't.

WhiteCollarFraud.com has the full story.

Source: https://www.nysenate.gov/legislation/laws/PBO/30

This would appear to put Letitia James in an interesting predicament.

Has she committed fraud herself by falsely attesting to the bank that she would occupy the Virginia home as her principal residence?

Or, if she really did intend to change her principal residence to Virginia, she was obligated to resign her position as Attorney General of New York because she could no longer legally hold the position.