Economic, taxes, and tariffs discussion

[nots]

it's moved "a little more" off the highs since your post

What is it less than 4% off its all time high? Up 12% for the year? Is that bad?

[Bernie Brewer]

What is it less than 4% off its all time high? Up 12% for the year? Is that bad?

I was going to post something very similar.

Sometimes it seems like people are cheering for bad things to happen just so they can say “See, look how bad the economy is doing!” The market is only up 12% for the year. OK it is down for the week but as a Banker once told me a four and a half month 12% yield in an investment isn’t the worst thing. Some people are so Fully invested in failure. It’s odd.

[revo]

Sometimes it seems like people are cheering for bad things to happen just so they can say “See, look how bad the economy is doing!” The market is only up 12% for the year. OK it is down for the week but as a Banker once told me a four and a half month 12% yield in an investment isn’t the worst thing. Some people are so Fully invested in failure. It’s odd.

It's odd that someone who’s had a long career in banking has never heard of a Wall Street Bear before!

[DMT]

Using the market as an indicator of economic well-being ignores the (roughly) half of the population that owns zero stocks.

[nullnor]

roughly half the population of the United States have never been inside my kitchen.

[Moonlight J]

is Kudlow going to resign this week after his interview with Chris Wallace? Boy that was bad

[Bernie Brewer]

Using the market as an indicator of economic well-being ignores the (roughly) half of the population that owns zero stocks.

This is very true, but that wasn’t my point, was it?

[Bernie Brewer]

It's odd that someone who’s had a long career in banking has never heard of a Wall Street Bear before!

I hate the Bears, on Wall Street and in Chicago.

[revo]

The never-ending Trade War debacle keeps chugging along (Month #16 for those Trumpies scoring at home), as China retaliates for Dopey's tariff raise by increasing tariffs from 5%-10% to 25% on $60Bn in US imports. #tradewarsaresoeasy


There was a post on here about the stock market and GDP that must have been deleted, but the historical correlation coefficient of GDP growth to the stock market is only about 0.48%, which means it's not greatly correlated (1 to 1 means they move in lockstep, 1 to -1 means they move the opposite of one another). That's due to a number of factors, including the fact many companies are international, and while it's somewhat true the market is an indicator of the economy, it's usually a leading indicator and not a lagging one like GDP is. As such, you get a year like 2018, where the economy was humming yet the stock market fell by 6.5%.

[onejayhawk]

I thought you might be interested that I concede that we are now approaching what may properly be called a trade war with China. It makes me wonder who will step into the gap if this runs very long.

J

[revo]

I thought you might be interested that I concede that we are now approaching what may properly be called a trade war with China. It makes me wonder who will step into the gap if this runs very long.

J

You might want to take swimming lessons, because you seem to have trouble realizing when you’re drowning. We’re actually neck deep, and after today’s unmitigated disaster, Dopey has now raised tariffs on EVERY Chinese import. Just wait....the disaster hasn’t even gotten started yet. The Chinese are digging in, because they realize the stock market, rather stupidly, is Dopey’s achilles heel. They see the market getting killed because, oh, Dopey doesn’t control the market and investors do, and know that Dopey can’t withstand a second consecutive down year.

Keep keeping the faith, Jay. Pretty soon you’ll realize your hero has no clue what he’s doing, that’s he’s right there drowning in the fishbowl with you. That’s OK, we’ll wait.

[onejayhawk]

I swim very well, but thanks for the concern.

Concerning China and trade, this is not the kiddie pool but it is still the shallow end. It can get a lot deeper while we will still be able to touch bottom. If we go past that point, I am betting we can tread water longer than China. I think they know it too. China is a bully and bullies do not do well in games of chicken.

We have been the nice guy a bit too long, so a lot of us (you?) don't understand what a real fight looks like. This isn't it yet. Not quite.

J

[revo]

I swim very well, but thanks for the concern.

Concerning China and trade, this is not the kiddie pool but it is still the shallow end. It can get a lot deeper while we will still be able to touch bottom. If we go past that point, I am betting we can tread water longer than China. I think they know it too. China is a bully and bullies do not do well in games of chicken.

We have been the nice guy a bit too long, so a lot of us (you?) don't understand what a real fight looks like. This isn't it yet. Not quite.

J

Why do you think they’ll fold? Xi is President for life. Dopey is beholden to the stock market’s whims and has a crucial election in 18 months. China has a GDP of over 6%. They can sweat it out. Dopey can’t. The parts of the country getting mangled by his Trade War Debacle are on their wit’s end. China’s strategy of targeting his critical battleground states is paying off.

I’d love to hear your take, it ought to be good.

[onejayhawk]

I never said or implied that they would fold. It is not necessary, probably not even helpful.

As long as they can save face, China can do a wide range of things that are good for us. The tit for tat on tariffs is as costly to their image as to their economy. In any event, we are a long way from a hunker down and ride it out situation. We will look for new markets and so will they, but it will take months to make any major shifts and talks are still ongoing. In the meantime, metal tariff issues with Canada and Mexico work toward amicable resolutions.

J

[revo]

Trump removes the steel & aluminum tariffs from Canada & Mexico without any guarantee that his US-Y-MCA deal will pass Congress, although it certainly wasn't going to pass beforehand. Quotas, another big Trumpian punch, also will not be imposed in their place. So it seems tariffs on these two countries, which strained decades of close alliances, were all for naught.

A typical play out of the Trump Playbook:
1 - Create a crisis where none existed
2 - drag the country(ies) along for the ride
3 - Strain decade-long alliances
4 - Realize after the fact that these countries won't roll over and play dead
5 - Hold out for a deal
6 - Settle for something that's nearly the same as before
7 - Take a very vocal victory lap while everyone realizes nothing at all was accomplished


Also on the Trade War Debacle, it was reported yesterday that China cancelled a US order of over 3.2 metric tons of pork -- the largest cancellation in over a year -- this despite a massive African Swine Fever breakout in China. Looks like they took their business elsewhere. Additionally, it was just reported that they have shown no appetite to re-engage on some of the issues they backtracked on -- and I believe those issues had to do with them changing national laws.

What's the saying? When you play with the bull, you get the horns? I think we're getting the horns up our ass, thanks to Dopey.