Economic, taxes, and tariffs discussion

[OaklandA's]

As for the next 18 months being good, the Congressional Budget Office estimates a 4.8% growth rate for 2019 and a 4.4% growth rate for 2020. Link: https://www.statista.com/statistics/...estic-product/

I'm not sure where your link gets those numbers, but the CBO website projects Real GDP growth of 3.1% for 2018, 2.4% for 2019, and below 2% for 2020.

https://www.cbo.gov/publication/54318

[Bernie Brewer]

The general rule of thumb is an inverted yield curve indicates a recession in about a year. No idea where you're getting 18 months from, or why you believe the next 18 months "look good."

Revo, as you know, I don't like some of the things you post, but you know you're stuff in this thread! You're posting a lot of great information and I think, maybe minus some rhetoric perhaps, that you are pretty much right on the button.

And, sorry for the backhanded compliment! It wasn't intended to be back handed.

[onejayhawk]

The general rule of thumb is an inverted yield curve indicates a recession in about a year. No idea where you're getting 18 months from, or why you believe the next 18 months "look good."

From the article:

I wrote a week ago that the spread between short-term Treasury notes was racing toward inversion, and Bloomberg News’s Katherine Greifeld and Emily Barrett noted the failed break below zero on Friday. Still, I wasn’t necessarily expecting this day to come so soon.

So, it's early the other economic indicators are positive.

I'm not sure where your link gets those numbers, but the CBO website projects Real GDP growth of 3.1% for 2018, 2.4% for 2019, and below 2% for 2020. https://www.cbo.gov/publication/54318

Chancellor's numbers are behind a paywall, but this is sufficient--and conservative.

J

[revo]

Like I continue to say, he’s a one-man wrecking crew. It’s really pretty sad that a large percentage of America still believes his BS:

Bloomberg-
President Donald Trump turned to a familiar playbook after his high-stakes dinner with Chinese President Xi Jinping on Saturday: boast of a big victory first, and let a more nuanced reality sink in later.
Trump followed the same script after trade talks with the European Union and Canada and his nuclear summit with North Korea’s Kim Jong Un. His optimistic comments can send markets soaring, before investors realize the president’s claims of success may have been exaggerated.
The pattern played out again with auto stocks this week. Shares of General Motors Co., Ford Motor Co., Daimler AG and BMW AG surged Monday after Trump tweeted: “China has agreed to reduce and remove tariffs on cars coming into China from the U.S.” But by late Tuesday morning, Trump not only acknowledged there was no deal but questioned whether one was possible. He declared himself “Tariff Man.”
Shares reversed course Tuesday as investors grew skeptical that the U.S. and China made any meaningful breakthrough on trade. The Dow Jones Industrial Average plunged almost 800 points and the S&P 500 lost 3.2 percent -- the biggest rout in almost two months.
It’s not the first time Trump has whipsawed markets, especially carmakers. Trump claimed victory after a July meeting with the European Union’s Jean-Claude Juncker, as he agreed to hold off on imposing tariffs on auto imports from Europe as long as progress was made in negotiations over a limited trade deal. He also claimed that the EU agreed “to purchase almost immediately large amounts of American soybeans” as exports of the commodity were hit by the trade war with China.
The EU Rose Garden truce prompted a bounce in the shares of European carmakers that was short-lived. And the EU’s soybean commitment turned out to be no more than modest bargain-hunting. The small increase in purchases of American beans that followed was attributable to a collapse in prices caused by the trade war with China, not a new deal with the U.S.
The larger trade negotiations with the EU are expected to begin in earnest only next year. Trump has resumed his threats to impose tariffs on European cars, calling German automakers in for a summit at the White House on Tuesday.
Trump is in a similar position with Japan. He portrayed as a major accomplishment an agreement with Japanese Prime Minister Shinzo Abe to start trade talks early next year. But one key condition of a deal is that Tokyo won’t give U.S. farmers any more access to the Japanese market than it negotiated with the Obama administration as part of TPP talks that dragged on for years.
After November’s midterm elections Trump was back to issuing threats. He greeted a Japanese reporter with: “Say hello to Shinzo. I’m sure he’s happy about tariffs on his cars.”
Even when he’s finalized a deal, Trump is inclined to embellish. After he signed a replacement deal for Nafta, Trump declared it “a model agreement that changes the trade landscape forever.”
While it included some significant changes, particularly to auto content rules, the final deal amounted to a rebranding exercise - it is now called the U.S. Mexico Canada Agreement. It also borrowed heavily from another deal that Trump scorned, the 12-country Trans-Pacific Partnership from which he withdrew in one of his first acts in office.
Republican and Democratic lawmakers scoffed at Trump’s portrayal of the Nafta replacement.
“You know 95 percent of what we will be voting on is the same as Nafta," Iowa Senator Chuck Grassley told reporters in October. Nancy Pelosi, the top Democrat in the House, mocked “the trade agreement formerly known as Prince, no, I mean, formerly known as Nafta".
The president’s hyping of his trade deals echoes his nuclear diplomacy with North Korea’s Kim. At a historic June summit in Singapore, Trump repeatedly described the document he and Kim signed as “comprehensive,” and he hailed the North Korean leader’s commitment to remove nuclear weapons from the Korean peninsula.
But few meaningful details, such as a timeline, were ever provided. And since then, talks have appeared to stall. The most recent sign of trouble was the test of a new “advanced tactical” weapon by Pyongyang last month -- the first such demonstration in almost a year and a pointed signal to the U.S. and South Korea.
Yet Trump is publicly unfazed. He has continued to claim that Pyongyang is no longer a threat and said on his way back from his meeting with Xi in Buenos Aires that he is planning a summit with Kim as soon as January.

[chancellor]

I'm not sure where your link gets those numbers, but the CBO website projects Real GDP growth of 3.1% for 2018, 2.4% for 2019, and below 2% for 2020.

https://www.cbo.gov/publication/54318

The link is using non-inflation corrected figures. Real GDP growth based on CBO calculations corrects for adjusted inflation. Even using those figures, OneJ's assertion that the next 18 months should be OK still fits pretty well, and a below 2% growth following that fits his assertion that it's pretty cloudy after those 18 months.

[revo]

Merrill Lynch reported today that Trump's Trade War Debacle has cost the market 6% this year. While it hasn't affected GDP yet, it is expected to by next spring. #thanksdonald

[chancellor]

And reinforcing that the auto sector is engaging in more of a customer/market-driven correction moreso than a tariff impact:

Fiat Chrysler plans to open factory in Detroit to build new three-row, Jeep Grand Cherokee:

https://www.cnbc.com/2018/12/06/fiat-chrysler-reportedly-plans-to-open-new-assembly-factory-in-detroit-to-build-suv.html

[revo]

"U.S. government debt is on track this year to rise at the fastest pace since 2012, as a stronger economy fails to keep pace with the wave of red ink that’s rising under the Trump administration.

Total public debt outstanding has jumped by $1.36 trillion, or 6.6 percent, since the start of 2018, and by $1.9 trillion since President Donald Trump took office, according to the latest Treasury Department figures. The latter figure is roughly the size of Brazil’s gross domestic product.

If this year’s growth rate is sustained through the end of the year, it would be the biggest jump in percentage terms since the last year of President Barack Obama’s first term, at a time when the economy needed fiscal stimulus in the aftermath of the financial crisis.

As of Monday, the nation’s debt stood at a record $21.9 trillion.

The borrowing is needed to cover a budget deficit that expanded by an estimated $779 billion in Trump’s first full fiscal year as president, the widest fiscal gap in six years. By the end of Trump’s first term, the debt is expected to rise by $4.4 trillion despite historically low unemployment, and relatively low interest rates and robust growth."

https://www.bloomberg.com/news/articles/2018-12-12/u-s-debt-under-trump-has-swelled-by-size-of-brazil-s-economy

[onejayhawk]

I would be more worried if you said the fastest pace since 2010.

Accusing Republicans of spending like Democrats is hardly new. It's sad, but both parties give only lip service to restraint. At least we can look forward to is less spending in 2019 and 2020. The divided Congress will see to it.

J

[revo]

Stock buybacks in Q3 were up 58% over Q3-2017 to a quarterly record of $208Bn. This is the third consecutive record-breaking quarter for buybacks.


In addition, to show what a folly Trump's Trade War is, he stupidly tweets out that the US is "rolling in the bucks" from collecting tariffs -- which again, mind you, are paid by AMERICAN businesses. The US Treasury has now collected almost $8Bn in tariffs YTD from American businesses.

But yesterday, he approves the second round of bailout welfare to the farming industry ravaged by his stupidity. The total amount of the two bailouts? $11.2Bn, or $3.2Bn MORE than what he's collected in tariffs.

Trumponomics 101
- create a crisis where none existed
- boast you're the only one who can fix it
- get backed up against the wall
- innocents become collateral damage
- come to some kind of "agreement" where you're either worse off than before, back to square, or a smidge better
- declare victory

[Moonlight J]

Stock buybacks in Q3 were up 58% over Q3-2017 to a quarterly record of $208Bn. This is the third consecutive record-breaking quarter for buybacks.


In addition, to show what a folly Trump's Trade War is, he stupidly tweets out that the US is "rolling in the bucks" from collecting tariffs -- which again, mind you, are paid by AMERICAN businesses. The US Treasury has now collected almost $8Bn in tariffs YTD from American businesses.

But yesterday, he approves the second round of bailout welfare to the farming industry ravaged by his stupidity. The total amount of the two bailouts? $11.2Bn, or $3.2Bn MORE than what he's collected in tariffs.

Trumponomics 101
- create a crisis where none existed
- boast you're the only one who can fix it
- get backed up against the wall
- innocents become collateral damage
- come to some kind of "agreement" where you're either worse off than before, back to square, or a smidge better
- declare victory

Fast forward to 2020

[onejayhawk]

Fast forward to 2020

Meh. The next two years will be very different because of the divided Congress.

J

[revo]

NASDAQ officially enters a bear market.

[onejayhawk]

Meh. Bear markets don't start with a mass of worry. Bull markets do. Bear markets start with a mass of enthusiasm. It's like the old saw that Bears feast at Thanksgiving and Bulls at Christmas. It probably won't happen this year but there is a lot of buying opportunity. Based on both current and projected earnings, the market is undervalued across the board.

I heard something on the radio just now--the lagging indicators are very positive, indicating market momentum. I checked and the LAG is at 106 and the CEI is at 104.9 (2016 base). What do you make of that? https://www.conference-board.org/dat...ntry.cfm?cid=1

J

[nullnor]

don't buy stocks in a bear market unless you're shorting. i remember when i worked at Corning during the dot com bubble burst. watching GLW go from $100 (really $300 but they did a 3 for 1 split right before the collapse) to $1.10. probably took a year to hit bottom. and during that whole time it was a so-called 'buying opportunity'. if you want to lose you're entire 401k.

you can time tops and sell and wait for a pull back and jump in again, but you can't time bottoms. the only rally's are shorts covering and then it's back to jumping off the cliff.

winter is coming