Danny Moses, renowned for his accurate prediction of the 2008 financial crisis, has voiced concerns over the economic impact of recent federal job cuts.
What Happened: The founder of Moses Ventures cautioned that the market has not fully considered the economic repercussions of the job cuts initiated by the Department of Government Efficiency (DOGE), a move supported by Elon Musk.
Moses expressed concerns about the negative effects on the economy, stating, “We’re hurting the revenue side of the equation.”
Under President Donald Trump‘s administration, over 24,000 federal employees have been dismissed, with an additional 75,000 opting for deferred resignation.
The cuts are part of efforts to reduce government spending, which DOGE claims to have decreased by $115 billion. However, experts question the accuracy of these savings.
Moses noted that the cuts have begun to impact major contracts, with Accenture Plc ACN losing U.S. government contracts, causing its share price to drop by 7.3%.
The elimination of federal jobs and contracts creates an “unvirtuous cycle,” affecting both small businesses and private contractors.
The influx of former federal workers into the job market raises concerns about their ability to find new employment, particularly in sectors like tech and data science. The uncertainty surrounding tariffs, labor supply, and immigration further complicates the situation, leaving employers hesitant to make hiring decisions.
Why It Matters: Danny Moses is not new to making bold predictions. Known for his role in shorting the U.S. housing market before its crash in 2008, Moses and his colleagues at FrontPoint Partners gained fame through Michael Lewis’ book, “The Big Short,” later adapted into a film.
Recently, Moses and his peers have shifted their focus to long positions, particularly in Asian stocks and gold.
Meanwhile, Michael Burry, another “Big Short” alum, is betting on Chinese tech companies, anticipating potential gains if China cuts interest rates.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
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