It's not just the airlines, the trucking index has collapsed as well.
This decline is already as bad as all of 2022.
But notice the amount of complacency now versus back then vis-a-vis the high yield spread. https://x.com/SuburbanDrone/status/1901724261573705741
The Trump administration is predicating austerity.
The Germans are about to pass a massive fiscal package.
And as a smart gal once said ''when facts change, you should change your mind'' https://x.com/MacroAlf/status/1901683951950774568
...Austerity guarantees a moribund economy.
No one (from individuals to companies to Govts) spends because everyone is worried of the uncertainties that follow- no jobs, lower demand, loss of contracts, higher prices
...Germany was well known for austerity - how the tables have turned.
Seniors/boomers can relate to this austerity policy because we come from that era.
Excessive spending under Biden was bad, in fact terrible but austerity is worse. The economy does not work like our individual/corporate savings account. It works on Multiplier effects that high velocity of money that increases economic activity. Austerity reduces it, people hoard/save money like they will face tough times ahead.
Austerity in Govt policy means:
> Layoffs in public sector;
> Reduced/unwinding of Govt contracts
> Scale back in social programmes (welfare, pension, education, health)
> Scale back in development/infrastructure projects
