By Paul Krugman, Paul Krugmanโs Substack, 10/9/2025
MarketMinder’s View: Put aside the political barbs here—MarketMinder’s analysis is nonpartisan, as political bias blinds investors from making rational portfolio decisions. This post nicely captures the mixed sentiment backdrop today. As the introduction acknowledges, US tariffs haven’t been as damaging across the economy as many feared back in April—but it immediately argues artificial intelligence (AI) investment has been the sole support for the economy and, “Without the data center boom, we’d probably be in recession.” Look, we agree tech spending has driven business investment recently, but a look under the GDP hood suggests this isn’t only an AI story—especially given consumer spending’s resilience. The second half of the post then observers that despite all this AI-related investment, most folks aren’t feeling chipper about the economy. “It’s hard to convey to people under the age of 50 just how upbeat Americans in the late 1990s were feeling about the economy and the future in general. … Today corporations are, once again, pouring vast sums into technology, but they’re doing it against a background of extraordinary pessimism. And the question I want to ask is why we’re seeing 90s-type hype without a return of 90s-type hope. Why aren’t we partying like it’s 1999?” There are likely many reasons for that, from economic (e.g., we aren’t far removed from the hottest inflation in 40 years) to sociological (e.g., anxiety surrounding today’s political discourse). This piece hypothesizes that the gloom is tied to fears that the same item generating this investment—AI—will wreck employment prospects. It notes, quite sensibly, that fears of automation destroying jobs are over a century old and have never come true, as automation has replaced and created jobs. But people tend to forget what markets long know, so fears weigh on sentiment. We would add that the wealth of “bubble” chatter, of which this piece is also an example, weighs on moods, too. Regardless of the why, these points do indicate moods haven’t shifted to broad optimism quite yet—there is still plenty of wall of worry for the bull market to climb, and those worries include AI bubble fears.
Can France Learn From Italy to Overcome Its Fiscal Crisis?
By Arthur Sullivan, Deutsche Welle, 10/9/2025
MarketMinder’s View: Please note MarketMinder is nonpartisan, and our analysis focuses on politics’ economic and market implications only. This article’s first half runs through France’s public debt and political turmoil, which many have covered extensively already (including us). Our interest is in the second half, which suggests former eurozone problem child Italy could serve as a model for France to get its fiscal house in order. Per the economist interviewed here, both France and Italy, “… suffer from structural challenges related to chronically high, and rising spending and future liabilities, and a weak supply side in the economy which is struggling to raise enough revenue to cover committed spending.” Rewind to the 2010s and even early 2020s, when headlines worried Italy’s fiscal issues could even lead to Italy ditching the euro (an “Italexit,” or more poetically, a Quitaly)—an overstated fear even then, though it has faded in recent years. Yes, some pension reform helped—the aforementioned expert points out that, “Italy has managed pensions since the sovereign debt crisis in the early 2010s, raising the age by three months every two years, except in certain special years when the increase has been frozen.” Prime Minister Giorgia Meloni and her Brothers of Italy party also have governed like your run-of-the-mill center-right administration, dampening fears that a right-wing populist government would roil Italy’s finances. Most importantly, topsy-turvy politics may have spooked many in the short term, but as worries passed, better-than-appreciated fundamentals emerged (namely, Italian debt service was fine)—and everyone moved on. We aren’t saying that exact script will play out with France, but that perspective can help investors see this time may not be so different. For more, see this week’s commentary, “The Revolving Doors Turn Again.”
Reminder: Gold Is Not a Risk-Free Asset
By Allison Schrager, Bloomberg, 10/9/2025
MarketMinder’s View: Gold has been on a tear lately, with prices topping $4,000 an ounce yesterday. When headlines cheer gold’s ascent, many want the supposed green associated with the precious yellow metal in their portfolio. We get it, but while we aren’t inherently against gold, some of the standard reasons to own fall flat on their face—as this article shows. “A dollar can buy things. The stock market offers ownership in profitable companies. A bond promises a stream of payments. What does gold offer? It has some industrial uses, but a lot of its appeal seems to be that it is both shiny and scarce. When times are uncertain, the most primitive parts of our brain find these qualities compelling. … There is nothing safe about gold as an asset. Like any other commodity, its prices are extremely volatile.” That c-word (commodity) is key here. Strip away the historical association and gold behaves like any other metal: subject to big booms and busts, with a lot of volatility along the way. Now, we do quibble with the claim gold has done well against stocks over the last six decades, for two reasons: One, all the legal restrictions and pegged prices of the gold standard mean you couldn’t actually trade it in 1962, when this article starts its comparison from. Two, the comparison excludes S&P 500 dividends. Adjust for all that and gold lags stocks pretty badly since the gold standard ended. Our research shows sentiment is the biggest demand over the short term, and good luck trying to forecast how investors’ moods may change over days, weeks or even months. Buy gold if you like to rock some bling, but for long-term investors, we think better options exist. For more, see yesterday’s related commentary, “Silver, Revisited.”
By Paul Krugman, Paul Krugmanโs Substack, 10/9/2025
MarketMinder’s View: Put aside the political barbs here—MarketMinder’s analysis is nonpartisan, as political bias blinds investors from making rational portfolio decisions. This post nicely captures the mixed sentiment backdrop today. As the introduction acknowledges, US tariffs haven’t been as damaging across the economy as many feared back in April—but it immediately argues artificial intelligence (AI) investment has been the sole support for the economy and, “Without the data center boom, we’d probably be in recession.” Look, we agree tech spending has driven business investment recently, but a look under the GDP hood suggests this isn’t only an AI story—especially given consumer spending’s resilience. The second half of the post then observers that despite all this AI-related investment, most folks aren’t feeling chipper about the economy. “It’s hard to convey to people under the age of 50 just how upbeat Americans in the late 1990s were feeling about the economy and the future in general. … Today corporations are, once again, pouring vast sums into technology, but they’re doing it against a background of extraordinary pessimism. And the question I want to ask is why we’re seeing 90s-type hype without a return of 90s-type hope. Why aren’t we partying like it’s 1999?” There are likely many reasons for that, from economic (e.g., we aren’t far removed from the hottest inflation in 40 years) to sociological (e.g., anxiety surrounding today’s political discourse). This piece hypothesizes that the gloom is tied to fears that the same item generating this investment—AI—will wreck employment prospects. It notes, quite sensibly, that fears of automation destroying jobs are over a century old and have never come true, as automation has replaced and created jobs. But people tend to forget what markets long know, so fears weigh on sentiment. We would add that the wealth of “bubble” chatter, of which this piece is also an example, weighs on moods, too. Regardless of the why, these points do indicate moods haven’t shifted to broad optimism quite yet—there is still plenty of wall of worry for the bull market to climb, and those worries include AI bubble fears.
Can France Learn From Italy to Overcome Its Fiscal Crisis?
By Arthur Sullivan, Deutsche Welle, 10/9/2025
MarketMinder’s View: Please note MarketMinder is nonpartisan, and our analysis focuses on politics’ economic and market implications only. This article’s first half runs through France’s public debt and political turmoil, which many have covered extensively already (including us). Our interest is in the second half, which suggests former eurozone problem child Italy could serve as a model for France to get its fiscal house in order. Per the economist interviewed here, both France and Italy, “… suffer from structural challenges related to chronically high, and rising spending and future liabilities, and a weak supply side in the economy which is struggling to raise enough revenue to cover committed spending.” Rewind to the 2010s and even early 2020s, when headlines worried Italy’s fiscal issues could even lead to Italy ditching the euro (an “Italexit,” or more poetically, a Quitaly)—an overstated fear even then, though it has faded in recent years. Yes, some pension reform helped—the aforementioned expert points out that, “Italy has managed pensions since the sovereign debt crisis in the early 2010s, raising the age by three months every two years, except in certain special years when the increase has been frozen.” Prime Minister Giorgia Meloni and her Brothers of Italy party also have governed like your run-of-the-mill center-right administration, dampening fears that a right-wing populist government would roil Italy’s finances. Most importantly, topsy-turvy politics may have spooked many in the short term, but as worries passed, better-than-appreciated fundamentals emerged (namely, Italian debt service was fine)—and everyone moved on. We aren’t saying that exact script will play out with France, but that perspective can help investors see this time may not be so different. For more, see this week’s commentary, “The Revolving Doors Turn Again.”
Reminder: Gold Is Not a Risk-Free Asset
By Allison Schrager, Bloomberg, 10/9/2025
MarketMinder’s View: Gold has been on a tear lately, with prices topping $4,000 an ounce yesterday. When headlines cheer gold’s ascent, many want the supposed green associated with the precious yellow metal in their portfolio. We get it, but while we aren’t inherently against gold, some of the standard reasons to own fall flat on their face—as this article shows. “A dollar can buy things. The stock market offers ownership in profitable companies. A bond promises a stream of payments. What does gold offer? It has some industrial uses, but a lot of its appeal seems to be that it is both shiny and scarce. When times are uncertain, the most primitive parts of our brain find these qualities compelling. … There is nothing safe about gold as an asset. Like any other commodity, its prices are extremely volatile.” That c-word (commodity) is key here. Strip away the historical association and gold behaves like any other metal: subject to big booms and busts, with a lot of volatility along the way. Now, we do quibble with the claim gold has done well against stocks over the last six decades, for two reasons: One, all the legal restrictions and pegged prices of the gold standard mean you couldn’t actually trade it in 1962, when this article starts its comparison from. Two, the comparison excludes S&P 500 dividends. Adjust for all that and gold lags stocks pretty badly since the gold standard ended. Our research shows sentiment is the biggest demand over the short term, and good luck trying to forecast how investors’ moods may change over days, weeks or even months. Buy gold if you like to rock some bling, but for long-term investors, we think better options exist. For more, see yesterday’s related commentary, “Silver, Revisited.”