• The markets have not yet been affected by the impact of collective cuts Danny Moussa said the “short short” investor. He said luck The Ministry of Governmental efficiency discounts were subjected to private contractors, small companies, and the labor market. He said: “It is not so simple,” we believe that there is fraud, let’s cut off the waste, let’s cut the expenses. “

Investor Danny Moussa, whose proof is famous for the debts backed by mortgage before the 2008 stock market collapsed, warns of the economic red flag.

The founder of Moussa has warned famous projects by the book “The Big Short” that the market has not yet yet been the negative economic impact of collective discounts on government jobs carried out by the government efficiency management mentioned in Elon Musk.

“I think we are killed from the effect on the economy of the discounts we are doing in the federal government, and what might mean that [for] Moses said in a CNBC Interview “Authority lunch” Thursday. “We are hurting the aspect of revenues from the equation.”

“I think we are excessively superior [as to] How will he play this. “

The administration of President Donald Trump has launched more than 24,000 federal workers Court documentsMany of them expect Difficulty finding private sector jobs Because of the privacy of their experience. additional 75,000 employees I took the opportunity to deferred, allowing them to receive wages and benefits until September. The DOGE receipt wall claims that it has been eliminated 115 billion dollars In government spending – despite the validity of its alleged savings Under the fire From experts.

Management Whipsaw on definitions I planted more uncertainty in the market, which prompted companies to reassess their plans. Meanwhile, Federal Reserve Chairman, Jerome Powell, left Useful interest rates did not touch While politics is playing.

“Unstable cycle”

Moussa argued that investors have already begun to see consumer confidence disturbances – which witnessed last month Decrease In four years – you will continue to hear similar trends in the upcoming profit calls. He said that this slowdown was not priced on the market.

“He does not think that there is fraud, let’s cut off the waste, let’s cut the expenses,” Moussa said. luck. “It is not only about federal workers, and it is not only about expenditures from these programs. It is related to contracts with the private sector.”

Moussa said that the signs full of the weak economy will appear in small companies and “private sector contractors who are making legal work services that are now forced to make decisions on their business.”

The government has spent on 759 billion dollars On contracts in the fiscal year 2023, an increase of about 33 billion dollars from the previous year, with about 171.5 billion dollars Go to small companies, according to the US government accountability office. Musk private companies receive At least 20 billion dollars In government contracts.

The collective discounts in Doug have already begun to endanger the main contracts. Tone CEO Julman Sweet Sweet Tell the investors Thursday, federal services, which represents 8 % of global revenues, lost US government contracts as part of Doug’s review. The consulting shares price decreased by 7.3 % after the announcement.

The elimination of both federal jobs and contracts creates what Moses called a “unstable cycle.” Since more federal workers looking for private sector jobs, they may find fewer opportunities due to the contraction of revenue flows in government contracts.

Federal workers’ luck in the labor market

In fact, in addition to clearing government contracts, the economy will also have to confront tens of thousands of federal workers who restore the labor market. Many of these former government employees will face a stable environment, but they have a lot of different possibilities based on the skills of these newly unemployed people, Korean Stalam, an economist for the recruitment laboratory already, luck.

“Can the labor market absorb these workers?” Stall said. “We are not sure if possible.”

Health care jobs currently abundant – good news about about 16 % of the federal workforce In health-related fields, according to the PEW Research Center-but many other white collar functions, especially in technology and data, are rare. Stahle said that since many federal employees who shot their education, they may search for traditional knowledge workers’ jobs are not present at the present time.

One of the reasons why markets may not yet affect the effect of shooting is the delay in government data. While mentioning the work statistics office About 10,000 Less than federal government jobs in February, the survey period for the report It is likely to end Before carrying out many shootings.

“It seems that employers are really frozen, through uncertainty about what will happen about the definitions, what will happen with the offer of employment and immigration, and it is clear that what will happen with these federal workers,” said Stall. “There is a lot of uncertainty that is currently playing that we are not completely able to determine the amount.”

If a large number of federal workers fail to find new jobs, spending is likely to slow down, which is an unimportant success for a component American economy Almost 70 % From the spending on consumers, Kali Cox, the chief market strategy in Rytholz, wrote in February Blog post.

And she said: “The economy is inadvertently consisting of people and their conservatives.” “We disrupt our spending, and growth will decrease, regardless of how much you believe that the cause of the turmoil is.”

This story was originally shown on Fortune.com

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2025-03-21 18:17:00