An IMGW News Report
Danny Moses, the investor immortalised in The Big Short for spotting the 2008 crash, is warning markets are misjudging the economic damage wrought by sweeping federal job cuts championed by Donald Trump’s Department of Government Efficiency (DOGE).
Moses rose to prominence after his role in The Big Short—Michael Lewis’s bestselling exposé, later turned into an Oscar-winning film—which detailed how a small group of investors, including Moses, correctly anticipated the collapse of the subprime mortgage market and bet against it.
Now, the founder of Moses Ventures fears history may be repeating itself. Over 24,000 federal workers have been dismissed, with 75,000 more nudged into early resignation schemes. The administration boasts of slashing $115 billion in government expenditure—a figure contested by experts. Moses warns the scale and speed of these cuts are inflicting structural damage far beyond Washington’s corridors.
“This isn’t simply trimming fat. We’re undermining the revenue side of the (US) economy”
“This isn’t simply trimming fat,” Moses told Fortune. “We’re undermining the revenue side of the economy.” Private contractors and small businesses, many reliant on federal contracts, are now wobbling. Labour markets are showing strain, and consumer confidence just suffered its steepest monthly fall in four years.
In an interview with CNBC, Moses cautioned that Wall Street’s exuberance is misplaced. “We are underestimating the knock-on effects. There’s an unvirtuous cycle emerging,” he said, as investors continue to shrug off signals of deceleration ahead of earnings season.
Meanwhile, the Federal Reserve has opted for inaction, keeping interest rates steady as markets digest the policy turmoil. The Trump administration’s erratic tariff policy has further clouded the outlook, prompting firms to rethink capital expenditure.
Moses’s central message: the market’s rose-tinted glasses may soon crack. The impact of ideological cost-cutting, particularly when implemented at breakneck pace, could yet be felt in balance sheets and boardrooms across the nation.
