Prof G Markets – Episode Summary

Podcast: Prof G Markets
Episode: Nasdaq Posts Best Day Since May as Fear & Greed Collide
Date: November 25, 2025
Hosts: Ed Elson (Vox Media Podcast Network)
Featured Guests: Robert Armstrong (Financial Times), Catherine Ann Edwards (Labor Economist)

Episode Overview

This episode dives into the tumultuous market action that saw the Nasdaq notch its best day since May amid a broader context of volatility. Host Ed Elson is joined by Financial Times commentator Robert Armstrong to unpack the driving forces behind the "fear and greed" dynamic in stocks, and later by labor economist Catherine Ann Edwards to dissect the latest, mixed U.S. jobs report. The episode closes with a sharp critique of the recently-disbanded Department of Government Efficiency (DOGE) and its fiscal impact.

Key Discussion Points & Insights

1. Market Volatility & Whipsaw Moves

[03:03–14:55]
Participants: Ed Elson & Robert Armstrong

The Big Picture

• The market has been highly volatile, whipsawing between deep declines and sharp rallies, particularly as earnings from giants like Nvidia reset market sentiment.
• Quote:

  "These are the kinds of days, as several of my readers have pointed out, that are designed to make market commentators like me look stupid... the volatility is telling you something here, which is there is... a market in conflict with itself where strong fear is meeting strong greed." —Robert Armstrong [03:35]

Fear vs. Greed

• Investors feel compelled to be "in" the market due to FOMO (fear of missing out) but are simultaneously aware that valuations are stretched and risks abound.
• Quote:

  "If you're not in the market right now, you're missing out on a huge opportunity... And, you know, there may be some truth to that. And we know that the market is expensive and there are some scary things going on we don't quite understand." —Robert Armstrong [03:54]

On Market Valuations

• High market valuations (like elevated P/E ratios) do not predict short-term returns but become significant over longer horizons (5–10 years).
• Quote:

  "Over the short term, like a year or two or three years, that [valuation] is not predictive information... It's only after 5, 7, 10 years that the valuation... really matters." —Robert Armstrong [05:40]

Policy and Fiscal Stimulus

• Armstrong posits that the political environment is likely to remain risk-friendly as the administration seeks to stimulate the economy before the midterms, especially through deficit spending. This could boost markets in the short run, even if longer-term concerns loom.
• Quote:

  "If the government spends money, history shows us over the short term, that's good for the stock market." —Ed Elson [07:54]

The Bear Case for 2026

• If inflation rises above 4%, it becomes politically difficult for both the administration and the Fed to continue aggressive stimulus.
• Risks include a large correction in Nvidia or other mega-cap stocks, and potential trade policy shocks.
• Quote:

  "If we have inflation run past, say, four, then... the wheels really come off." —Robert Armstrong [09:46] "Nvidia, look, company's worth $4.5 trillion. Right. Like that's a mighty big boat if it hits an iceberg." —Robert Armstrong [10:06]

On 'TANKO' and Political Risks

• Armstrong references his coined term "TANKO" (Trump Always Never Kicks Out), warning that real ideological or trade confrontations with China, instead of mere posturing, could be destabilizing.
• Quote:

  "If he... gets into a real ideologically driven trade war with China rather than a posturing war, I don't like that much." —Robert Armstrong [11:33]

Bitcoin’s Wild Ride

• Bitcoin is behaving as a highly speculative asset, dismissing narratives that frame it as “digital gold.”
• Quote:

  "It just looks like it trades like NASDAQ after 10 drinks, basically." —Robert Armstrong [12:45]

What to Watch Going Forward

• Armstrong is watching for signs that strong corporate earnings no longer move share prices—a classic sign the market is “fully saturated” and vulnerable to exits.
• Quote:

  "When companies do well and the stocks don't respond that much, as was the case with Nvidia, that tells you something... everybody who can be in the market is in the market." —Robert Armstrong [13:53] "The only door that works is the exit door because everybody is inside." —Robert Armstrong [14:46]

2. U.S. Labor Market & Jobs Report

[18:15–27:56]
Participants: Ed Elson & Catherine Ann Edwards

September Jobs Report—Mixed Signals

• U.S. employers added 119,000 jobs (stronger than expected), but the unemployment rate ticked up to 4.4%, the highest in four years.
• The labor market is “cooling” but not crashing—akin to cars slowing at different rates at a red light.
• Quote:

  "The labor market is cooling, it's slowing down... We're just seeing it cool kind of at different paces according to different metrics." —Catherine Ann Edwards [19:38]

Is 4.4% Unemployment Cause for Alarm?

• Historically, 4.4% is still low, but context matters: this number is rising, not falling, and signals a softening relative to the very tight labor market of 2022 and 2023.
• Prior downturns (pandemic, financial crisis) caused sharp spikes; today’s trend is a slow, steady rise—potentially masking growing trouble.
• Quote:

  “The unemployment rate has been rising for three months... 1980 doesn't matter to what's going on in the economy right now.” —Catherine Ann Edwards [21:50]

Manufacturing Weakness

• Ongoing losses in manufacturing jobs (third straight monthly decline) contrast sharply with the administration’s promises.
• Tariffs alone are not enough to boost the sector; uncertainty and higher input costs are cited as barriers to growth and hiring.
• Quote:

  "Tariffs are not an industrial policy. If you want to have revitalized manufacturing in the United States, you can't just put up a poster board in the Rose Garden and then clap yourself on the back and say, I did it." —Catherine Ann Edwards [23:17]

Data Gaps & Fed Policy

• Due to a government shutdown, several key pieces of economic data (October jobs, CPI, GDP) are missing or delayed, clouding the upcoming Fed rate decision.
• Catherine argues this is a deliberate political choice, not an act of God.
• Quote:

  "Our hands are not tied. The federal government could have had emergency operations include data collection at this time. ...they chose not to." —Catherine Ann Edwards [25:55] “I would be surprised if [the Fed] actually moved rates with this much data uncertainty.” —Catherine Ann Edwards [26:42]

• Particularly concerning is that a larger share of unemployment is due to permanent layoffs, not temporary factors.

3. The Department of Government Efficiency (DOGE) Post-Mortem

[28:08–30:45]
Host Monologue: Ed Elson

Summary & Analysis

• DOGE (Department of Government Efficiency) is officially disbanded, ending months of headline-grabbing yet ultimately unproductive attempts at fiscal restraint.
• Ed highlights how the cuts produced immediate savings but led to greater long-term losses by undermining federal agency function, reducing productivity, and ultimately adding to the deficit.
• Criticizes the administration’s penchant for highly-publicized but ineffectual gestures.
• Quote:

  "It was an inconsequential agency that got nothing done. No one will recognize the name Doge... But for those of us who care about America... Doge must be remembered. Because it's movements like Doge that slowly but surely ruin America." —Ed Elson [30:00–31:00]

4. Notable, Lighthearted Close

[34:35–36:00]
Participants: Ed Elson & Robert Armstrong

• Robert Armstrong recounts the legend of D.B. Cooper, as an almost patron saint of those who “try to get away with it”—prompting a playful exchange about the “terrible moral” of the story.
• Quote:

  “D.B. Cooper is like the patron saint of people who are trying to get away with it.” —Robert Armstrong [35:32]
  “The worst fable of all time.” —Ed Elson [35:58]

Notable Quotes & Timestamps

• "The volatility is telling you something here... strong fear is meeting with strong greed." —Robert Armstrong [03:35]
• "Over the short term... valuation is not predictive information." —Robert Armstrong [05:40]
• "If the government spends money, history shows us over the short term, that's good for the stock market." —Ed Elson [07:54]
• "Tariffs are not an industrial policy." —Catherine Ann Edwards [23:17]
• "I would be surprised if [the Fed] actually moved rates with this much data uncertainty." —Catherine Ann Edwards [26:42]
• "Doge is waste in its purest form... a blueprint for how not to run government." —Ed Elson [30:00–31:00]
• "D.B. Cooper... is like the patron saint of people who are trying to get away with it." —Robert Armstrong [35:32]

Key Segment Timestamps

• Market Volatility & Fear vs. Greed: [03:03–08:58]
• Bull/Bear Case for 2026: [08:59–11:44]
• Bitcoin as a Risk Asset: [12:02–13:00]
• What to Watch in Equities: [13:53–14:55]
• September Jobs Report Analysis: [18:15–22:41]
• Manufacturing Weakness & Tariffs: [22:41–24:50]
• Fed Policy & Data Gaps: [24:50–27:56]
• DOGE Recap & Critique: [28:08–30:45]
• D.B. Cooper Anecdote: [34:35–36:00]

Takeaways

• Recent sharp rallies mask deep market uncertainty, with both bullish and bearish narratives rooted in legitimate concerns.
• Policy stimulus, especially deficit spending, may keep markets buoyant in the run-up to the U.S. midterms, but inflation is the key risk.
• The labor market is cooling in a slow, incremental way, with particular weakness in manufacturing; headline jobs data is less telling amid missing context and government data gaps.
• Politics and publicity stunts (like DOGE) may grab headlines but risk long-term harm through inefficiency and performative governance.
• Investors and observers should focus on economic fundamentals, the risk of over-saturated markets, and the broader implications of political and fiscal maneuvering.