Stock Market and tariffs
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How about the increase in public jobs(irs agents get paid by our taxes they don't produce anything)? What about the massive "stimulus" checks and "loans" during covid? 2020 over 40% of the gdp was government money. Slightly less in 2021 but still government spending was like 37.1% I think. How much of that was what you said? It's a valid point, but it shouldn't be that high ever. Honestly, I'm for heavily reducing DOD expenditures. Hopefully doge hammers away at them.
Have you noticed this thing called BRICS? Guess what their end goal is…to replace the dollar as the world currency.
We’ve lost 90000 manufacturing plants since NAFTA was implemented, 90000.
In the sane time the middle class wealth has gone to the people now telling you that everything is fine and tariffs absolutely will not work.
I honestly don’t understand some of you guys, it’s like you live on a different planet where small towns haven’t died and millions of our citizens arent addicted to drugs because of lost hope, the deadliest of them coming from China.
It truly is interesting. There are many ways this could go bad. The crazy thing is Im not quite sure that Trump wants an agreement of no tariffs both ways with many countries. That would help some exporters but if the imported prices are not tariffed then other countries are still flooding the US with cheaper production and planned mass manufacturing likely does not transpire.
If the market stabilizes too soon, which would be a huge vote of confidence in the admin, but would enough cash have moved into the treasury to force the rates down to refi the 9T debt we have coming due?
The crazy thing is, if these things do happen and derail the President's plan, people that have been buying stocks during the downturn make out like bandits as the market will roar back and consumers will have lower prices across so many sectors. Thus Trump could look good even in failure.
It would not be a win for small towns needing a return of factories but things in essence would be better than they were.
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On that point we agree, and I have a considerable amount in the market. Been investing since high school (almost 50 years ago) and every time the market has tanked in my lifetime (1987, 2000, 2008-09, and 2020), in the long run the smartest thing to do was "NOTHING".
The market was due to correct, had gone up 20% or more two years in a row, one of the best 2 year runs in history, so I am not worried at all about a normal correction, that is just Wall Street being Wall Street. I will say this particular drop was self inflicted, so it is not fair to say that the market was ONLY just correcting. Thursday and Friday were one of the top 3 or 4 worst 2 day drops in history, it is actually quite rare to drop more than 5% two days in a row. Actually, I did sell some stock about four months ago, after the election, to prepare for what I thought would be a correction + the uncertainty and chaos that I expected from the new administration. Glad I did because we now have 2 or 3 years worth of income in cash and bonds, so I really don't have to worry too much about the market this week.
It is no secret how I feel about Trump, but my WAG is that some deals will be cut over the next few weeks and months, and he will promote it like it is the greatest deal in the whole world, just like the USMCA was promoted by him, only now it was a bad deal.
In any event, if I had to bet, we will be largely past this tariff issue by summer or early fall.
I hope.
^^^^^^^^^^^^^^^^^^^^^^^^^^He misses his bubble.
Perhaps I missed it somewhere but has anyone explained what they would do to equal the "fair trade" deficits we have with most countries in the world. What exactly would you do to make it equal or is there an unknown (to me anyway) reason why we (US) must pay higher (in some cases much higher) taxes and tariffs.
Again...What would you do?
Again...What would you do?
Lucked out with a merger at the company I work for that froze my 401k for the first quarter as they switched who manages our investments. Have had a large chunk of money just sitting there for the last few months, started moving everything back into the markets last night and the new company is giving us a ‘bonus’ check this Friday to make up for the lost 401k match in Q1. Fingers crossed this is timed right, but feel pretty good about things at the moment.
I have told both my daughters the same as my post above, I assume you are fairly young like they are, this stuff will blow over eventually (although the Dot Com bust of 2000 took about ten years to recover), there will be many more Presidents and administrations and policies in the next 30 years, don't get consumed by the daily drama in Washington.
I suppose it depends on what the end goal really is. The EU has been offering a free trade deal for quite some time but we haven't pulled the trigger. To hear Trump discuss this, it sounds like he wants them buying Dodge Rams but I'm not convinced that will ever happen. They don't subsidize gas and their roads arent designed for massive trucks.
Again though, a trade deficit isn't bad, it just is. Some countries have products we buy more from than others. Australia has a trade deficit with us and we nailed them too, so I'm a bit confused what exactly the goal is.
Lutnick mentioned tariffing everyone to prevent tariff aversion but didn't mention what would actually stop that from happening which would be to reinforce customs and trade points of entry.
Hell, even Trumps old commerce secretary said he expects China to use LATAM now to avoid tariffs. It's why they don't seem to care what number Trump threatens them with.
But, again, are we basing the much higher tariff rate on that chart or the actual tariff rates before this stuff started breaking out? Some countries have stiff tariffs to protect their local production because they don't have much else. That has been around for centuries. The notion that we are getting ripped off just doesn't make as much sense (excluding China) without specific examples.
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And a news article just came out stating Bessent flew to Florida this weekend to convince Trump that the messaging needs to be more about the endgame of these tariffs to quell market fears.
Bessent is not a tariff hawk so, while speculative, this does seem in line with what many have been saying.
Apparently Bessent wants Trump to play up the tariffs as a negotiating tool, but I think it's been made obvious that that would defeat the point.
Bessent is not a tariff hawk so, while speculative, this does seem in line with what many have been saying.
Apparently Bessent wants Trump to play up the tariffs as a negotiating tool, but I think it's been made obvious that that would defeat the point.
No offense but this is nothing to what most people have lost. What I lost last Thursday and Friday was a **** ton but since I cant touch the funds for another 20+ yrs, its no big deal to me. If I was a year or two away from retirement, i wouldnt have had the funds tied up in certain stocks and had in a more conservative vehicle. I am fine with the tarriff negotiations. It was a buying opportunity that presented itself and I took advantage of it. I am ready if there is more but look at the opening futures right now.
Agreed, I saw Trump posted that China is begging for a deal but won't call.
Honestly though, the markets are reacting to the news that Bessent seems to be waving the flag a bit on this being a long term solution and that negotiations will soon begin with Japan and perhaps South Korea.
Probably also helps that Elon is calling Navarro Retarrdo on Twitter this morning.
Just talked to my daughter about the all hands meeting yesterday. (I am intentionally not going to say what company she works for)
Said the mood was very somber. CEO told her group that he believes that the real goal for Trump may be to eventually eliminate income taxes via tariffs and so there may not be any real lowering of tariffs in the relatively short run. Their strategy is to get as much product "on the water" as possible to avoid the tariffs, of course that may lead to inventory imbalances, but not much else that they can do at the moment.
In the longer run, he said that he expects costs due to tariffs to add 35% to cost of goods imported, which obviously cannot be absorbed by her company. In raw numbers, she was told that company goal for year was $135M EBITDA, and the additional expected cost attributable to tariffs alone is $165M. Will have to increase prices considerably just to keep head above water, and that is assuming that sales stay the same even with cost hikes.
She was on her way to work, may get more details later
Said the mood was very somber. CEO told her group that he believes that the real goal for Trump may be to eventually eliminate income taxes via tariffs and so there may not be any real lowering of tariffs in the relatively short run. Their strategy is to get as much product "on the water" as possible to avoid the tariffs, of course that may lead to inventory imbalances, but not much else that they can do at the moment.
In the longer run, he said that he expects costs due to tariffs to add 35% to cost of goods imported, which obviously cannot be absorbed by her company. In raw numbers, she was told that company goal for year was $135M EBITDA, and the additional expected cost attributable to tariffs alone is $165M. Will have to increase prices considerably just to keep head above water, and that is assuming that sales stay the same even with cost hikes.
She was on her way to work, may get more details later
Europe will not be buying American vehicles simply because the quality is not as good nor is the brand really but you still should give them better chance with equal trade. Had not heard where Europe has wanted "free trade" for years, news to me.
Most trade deficits are bad when it gives what some consider an unfair advantage to the nation who charge more. The "is just is" comment doesn't really make sense to me.
Some countries with higher tariffs because they have nothing else? OK, maybe, I would like to see what they charge other countries with good economies and how they respond. I don't mind helping out other countries that really need it. Just hopefully not full on exploiting the US charitable nature concerning this type of trade.
The US getting ripped off makes a lot of sense to me given the current fraud, waste, and abuse being uncovered reference USAID.
edited: To qualify my statements I would like to point out that I really don't follow Stocks, trade, and the economy all that close (wife does). I simply am too lazy to look at everything so, a lot of my thoughts on this are based solely on surface indicators unless it is something I am really interested in and then I might go in depth, such as the gold and silver markets. I have looked into that. While not extensively it has been with some depth. Still looking and following.
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For years are your words, not mine. But it was reported that the EU offered 0 for 0 tariffs back in early March and were rejected. Given that Trump stated he also wants 350b in energy sold in the EU or the tariffs stay, it makes you wonder if this was about reciprocal tariffs or just strong arming industry.
The "it just is" comment is exactly that. A trade deficit is about a consumer, not trade policy. If China makes something that industry wants to, and can, sell for a profit, there isn't a policy change that can really change that. It's why tariffs on Vietnam seem foolish because they can do things (with the labor force and lack of environmental restrictions) that we simply can't.
Omitting China, who steals our IPs and is a bad faith trade partner, how are Mexico and Canada ripping us off? They abide by the USMCA that Trump signed. I know Brian thinks that was a mistake but I don't see how slapping tariffs on them fixes trade when you already did this to get a deal done.
I just don't buy that everyone is ripping us off. Our debt has a lot more to do with how we manage entitlements, our military industrial complex and straight pork barrel spending than international trade.
Edit : To respond to your edit, I will also note that I just follow a few economists (both conservative and liberal) and have a background in trading as an RIA (but no longer work in that field). I'm no expert and mostly relaying the opinions of information I've consumed contextualized with my own (semi-formed) opinion. I could be way off, this could be genius and do all of the things that they claim it will do. I'd gladly eat crow as it's a benefit to our country, but it seems unlikely and will possibly cause us more harm which is why I'm concerned. Happy to talk with someone about it though, many in my immediate family hate financials.
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I've read that
If tariffs are to eliminate income tax, that means that we have to keep buying foreign made items. If we do that to the level that income tax isn't needed, that means that we really aren't expanding on making things in America. Conversely, if we move to buying USA only, then we won't raise much from tariffs. I suppose reality is a mix of both, but those two goals seem opposed to each other.
I've read many different reasons for tariffs, one was as you say, elimination of income tax. Others have been to create more manufacturing in the US, or to get better deals.
If tariffs are to eliminate income tax, that means that we have to keep buying foreign made items. If we do that to the level that income tax isn't needed, that means that we really aren't expanding on making things in America. Conversely, if we move to buying USA only, then we won't raise much from tariffs. I suppose reality is a mix of both, but those two goals seem opposed to each other.
When they buy all of it with borrowed money it’s as fake as hell. I’m not sure what you’re thinking here.
Luckily, no currency has ever been replaced as the primary global tender.
That’s why I’m hanging on to this chest of guilders and florins.
Whether the money spent was borrowed or already in hand doesn't matter when it comes to GDP. If I borrow money to build a house, the goods and services rendered to build the house still count in the GDP. Same thing if businesses borrow money for capital expenditures.
But even if you think borrowed money shouldn't count towards GDP we are still only talking about 5% of Real GDP being from the Federal Government spending borrowed money which would leave over 20 trillion of GDP.
Agree Canada is not "ripping us off" (not really a choice definition, more about fairness in trade once again). Mexico's tariffs are close to twice as much, however. Among favored nations the average difference is US 3.3 vs 2.2. What it all boils down for me is that I think we need less/no tariffs. I believe his main intent (has stated so) is more about bringing jobs and companies back to the US.
For quoted words in bold: Everyone ripping us off? No, probably not. Taking advantage of with bad agreements? Maybe. But I do totally agree on what our debt has more to do with and have said that for years now. You hit the big 3 with that. Military waste/abuse being a very big part of the problem with how much is wanted/spent/wasted there.
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Everything is green today amidst rumors of deals with a few nations. I agree the tariff issue will likely be done by summer. Even though there are rumors of some tariffs ending, we are still seeing domestic investment increase.
? You cannot borrow in perpetuity.
Again, what you’re saying makes no sense. There has been no real growth in GDP in this country for a couple of decades.
It’s like saying my wealth is increasing because I borrow from the bank.
Dude, I know people that refinance their home over and over to pull cash out of it. Usually the most conservative “fiscal” debt hawks I’ve ever met.
I've got a Trump dancing gif ready for tomorrow. If China bends the knee, it'll come in handy. If China doesn't and tomorrow is a disaster, it'll still come in handy. It's one of those rare gifs you can use for both good and bad news. For good news, it's like, hey, this old man got it right. Dance old man dance! For bad news, it's like, look at this fool dancing while his stupid and reckless decisions are tanking the economy as his most loyal followers online continue to spin this as beautiful and great.
The stock market isn't the economy. Oil is cratering which will help things. Just be patient.
There was absolutely 0.0% chance you'd show up if Trump got it right.
Can you expand on what you mean in the highlighted section above. Are you saying GDP outside of government spending is stagnant? What is real GDP growth?
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