Coming almost on the exact 50th anniversary of the Yom Kippur War, the attack on Israel by Hamas conjures comparisons with a half-century ago. The consensus view is that it is different this time, and for once the Wall Street cliché is right.
But then came the gasoline lines, a symbol of the economic malaise that came to be known as stagflation. In the wake of the oil shock, the U.S. economy contracted 3%, adjusted for inflation, sending unemployment up to 9%, while inflation topped 12% in 1974. What didn’t inflate was stock prices: The Dow Jones Industrial Average shed 45% in the brutal bear market of 1973-74.
The red ink in the fiscal year ended in September topped $2 trillion, after the effects of the proposed student-loan forgiveness plan rejected by the Supreme Court are excluded. This is the more relevant measure because it represents Washington’s actual cash shortfall, according to Strategas’ Washington analysis team led by Daniel Clifton.
Newsletter Sign-up Investors should consider second-order effects from the Hamas-Israel conflict, Singh writes: “National security experts are abuzz with discussion about whether the U.S. defense-industrial base has sufficient throughput capacity to back Ukraine, Israel, and possibly Taiwan with artillery and munitions in a simultaneous and extended conflict scenario.
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