But see how even WSB idiots could see this coming and they are making a lot of money on shorts. And the premiums are sky high, meaning the big players are shorting like crazy. Easiest money to be made in decades for the Wall Street sharks.
You don't know if there will be a u-turn. There's no logic at all to this administration, they could just announce the "Biden correction" is over and that the tariffs have now worked, plus the government is buying stocks.
If they do some corrections, the big guys will use it as a window to get rid of high risk investments onto smaller inexperienced investors riding the hype. That'll just blast the market further.
The confidence is gone. The risk is high whatever happens. The lowest risk strategy is now betting on market failure.
Notably, Warren Buffett essentially exited the stock market over the last few years because he believes all his investments were massively overvalued.
That does paint a pretty grim picture wrt potential stock growth, if this finally triggers the correction back to a more sane stock price (last I read about it, you'd have to hold the stock for 65 years for the investment to break even).
The current stock valuations are essentially based purely on the same mechanic that makes Ponzi schemes to successful... At least short term.
What I've been wondering since April 2nd is if this will be the nail in the coffin for the AI-hype bubble, everything is drying up very quickly, all those risky investments (hundreds of billions USD) in bullshit AI will be the first to completely go into the drain when everything else that is producing actual real value at present is going to the drain.
This stupids-in-charge administration might just have brutally popped the AI bubble.
I agree. I'm afraid I will lose an AI-driven app I count on daily (Aqua speech recognition). Bubble-popping cleans out the bad but also washes away the good.
> They are all crying for the audience, the losers.
There is an opinion that making them (a big business, and overseas players too), crying for audience is a way to make them loyal to a regime. So they come to the audience, they kiss the ring, they get some preference, and the regime becomes even stronger. I'd not name Trump crazy as some do, but simply a person presenting and promoting the interests of a certain entity. I won't name my guesses about the possible entity.
I would love it if you would. I can't promise how it will be viewed in this space but I find the best way to educate myself is to be wrong on the internet. :)
That is gambling, not investing. And you can lose lots of money by gambling.
I don't believe it's the case, but what if Trump and friends are just wishing to play the markets and he will back off with tarrifs? We will see a massive short squeeze and lots of people taking huge losses.
most stocks pay dividends. The others tend to do buybacks. The only exceptions are recently IPOd companies. All the big tech companies are returning capital to shareholders.
For whatever reason, people did not believe Trump would be this crazy. In fact, people in the stock market still do not believe he is this crazy. If they did, the stock market would drop much lower. From what I've heard from people in finance, the bond market is indicating some economic growth this year. If this goes on, expect a financial crisis which rivals that of the Great Depression.
It's not a lack of foresight, it's just that they do not believe him or believe that someone will stop him. People have just misread Donald Trump and his intentions.
To be fair, he said he would do all this crazy stuff the first time but didn't. So there's some evidence for the position that he wouldn't do crazy stuff.
Also, it's hard for people to understand that someone in power might just not understand why their decisions are a terrible, terrible idea (see politicians and backdooring encryption for a tech example of this).
He didn't do those things, or he couldn't? Not too familiar with American politics, but AIUI his majority was much weaker last time round, possibly resulting in some of his crazy being kept under control?
Yes the latest Goldman Sachs recession forecast is 45% probability, which is what makes it into the headlines.
However the report says this is assuming the tariffs won't go into effect. The flagship policy Trump just announced after going on about how the most beautiful word is "tariff" for four decades.
If they go into effect it goes higher. But why assume that the President of the USA will actually do what he just said he'd do in a big speech with giant printed props.
Trump was taking about tariffs, but nobody thought he’d take them this far, this fast.
To be fair, it makes sense that if his…plan… is going to work, he needs to get in it quickly. 4 years isn’t a long period of time and if the country doesn’t recover economically before then the next president will absolutely just undo whatever he did.
Even the midterms are a time limit. If things are bad enough then it would absolutely get people to vote for those that’ll take the power of tariffs back out of the president’s hands and back into congress’s.
It’s actually kind of a big flaw with our system as a whole. Countries like China can do more long-term plans without worrying about silly things like electability. In this case, in theory I think Trump is right to wave our big economic stick around. In reality it won’t work because everyone can just wait for his time to be up. Even if countries negotiate there’s no reason to think they won’t reneg in 5 years.
I think that you are ignoring Newton's 3rd law, which pretty much can be applied to economics in this case. What made the US really great was the fact that it was the center of the liberal world order and the coalition of friends that it built around itself, including the EU countries. Let's see how well the US does when it loses most of its friends. Focusing on the EU, the US wants to balance the goods trade deficit with the EU, but it has a services surplus with the EU. Goods deficit vs services surplus roughly balanced each other before the tariffs. Guess what we in the EU will need to do? In the end it will be loose-loose for everyone, but in the long run the then friendless US will be the biggest loser.
We do not want manufacturing jobs, they suck. America has an amazing thing going on where we can trade 1s and 0s in exchange for physical goods. We have an infinite renewable resource which costs nearly nothing to reproduce infinitely. We have a defacto monopoly on technology and digital services.
I understand the national security reasons for having a domestic commercial manufacturing base. However, there is ZERO economic reasons to bring back manufacturing jobs.
I hear this repeated, “we don’t want manufacturing jobs, they suck”.
I work in manufacturing, and my job definitely does NOT suck!
That short sighted western leadership were so eager to ship off manufacturing jobs to China has been a disaster for the west. I can’t be the only one who sees this?
> That short sighted western leadership were so eager to ship off manufacturing jobs to China has been a disaster for the west.
In what way are you quantifying this? Would you agree that the quality of life has improved significantly compared to the 1980s or whatever period you want to compare to?
For many people, sure. I can always find exceptions to the rule. I am talking statistically. Fact of the matter is, the bottom 20% QoL has improved significantly, correct?
Frankly looking at many indicators it would seem large chunks of the US is doing terrible, not just the bottom 20%.
You now have enormous piles of debt, obesity, millions hooked on drugs, a blossoming private prison industry and a nation without a future?
I quote from Wikipedia:
‘In 2013, George Friedman, the head of Stratfor, wrote that the middle class' standard of living was declining, and that "If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated."[54]’
Sure, but most of that has nothing to do with the loss of manufacturing jobs. It has much more to do with the tremendous transfer of wealth from the bottom quintiles to the top, enabled by the gutting of unions, the destruction of regulations, and the abandonment of any kind of effective antitrust policy.
Some, yes, but the cause and effect are somewhat blurred because both were happening over a long period of time. They each contributed to each other in a feedback loop, and I don't claim to be enough of a scholar of that period to know for sure which one started first.
If you were serious about improving the lives of normal people you would be voting for Bernie Sanders. Not the party handing out tax cuts for the rich, that is against the minimum wage and destroyed the pension system.
> For many people, sure. I can always find exceptions to the rule. I am talking statistically. Fact of the matter is, the bottom 20% QoL has improved significantly, correct?
That's really a decision each person should make for themselves, and it was a big part of the reason Trump won the election. Most people don't think their QoL has improved.
Obviously the perspective here is different due to the success of the US software industry, but that industry only employs a tiny fraction of the population.
So the idea is to destroy 75% of the economy that is the service/tech economy? I'm sure that will work out well for all of us. He could have had more pro business, less regulations, trade agreements, but he didn't he just set the house on fire and wants to see what he can make out of the ashes. I guess we can all get jobs in construction to build the newest 3rd world nation on the world playing field?
The exception, of course, are the poor and lower working class who have no technical expertise or training, or would be unable to learn same... for those individuals the prospect of a manufacturing job is a step-up.
The types of manufacturing jobs which would be a step up would be high-tech and high gross-margins manufacturing (which we already do), not whatever crap China is producing. If you want the quality of life of a Chinese manufacturing worker - which is still much worse than that of a retail worker in America - sure. There is no basis in reality that the kind of jobs Chinese manufacturers would yield a higher quality of life for a blue collar worker.
Furthermore, those kinds of jobs are not long for this world. They're inevitably going to be automated away and the replacement jobs robotics maintainers are not ever going to be in numbers great enough to replace those manufacturing jobs. It's beyond stupid especially when you consider that the labor market was already incredibly strong at ~5% unemployment.
I keep hearing this BS, but unskilled manufacturing jobs are a downgrade from unskilled service jobs, and if official statistics aren’t lying, there’s been a growing shortage of unskilled labor in service. Expecting people without a skill and can’t even bother to flip burgers to want to do heavy labor in factories is ridiculous.
Depends very much on the assembly line. Some are quite reasonable, especially in smaller firms where you don't have a completely detached management in their ivory tower passing efficiency edicts for grinding through disposable anonymous minions. You can't abuse your staff too much if you have to sit next to them in the canteen! It's not exactly stimulating work and obviously not a rockstar salary, but it's comfortable enough indoor work and you don't have to pee in bottles and have a psychopathic delivery schedule every day.
>We have an infinite renewable resource which costs nearly nothing to reproduce infinitely. We have a defacto monopoly on technology and digital services.
That doesn't work for ever. And Trump was voted by the blue collars. So he wants to create more blue collar jobs.
> Trump was taking about tariffs, but nobody thought he’d take them this far, this fast.
Stop saying "nobody". People predicted this. The people who are blindsided by this dismissed the people who predicted it as crazy, hyperbolic doom casters. Yet today, when their predictions come to fruition, they don't even exist.
Here's a wild idea: let's start listening to the people who had the foresight to predict this instead of pretending they don't exist because it soothes our own egos for having missed this.
He's not doing tariffs though. He's doing some kind whacked out plan that he can somehow correct decades of trade imbalance with "tariffs" when all he can do really is start a second Great Depression by riding the nuke all the way to ground zero like Major "King" Kong in Dr. Strangelove
He has at most 3 to 6 months to get this sorted. After that a recession is all but guaranteed. His voters may not own stocks, but the people who own stocks are responsible for a huge part of consumer spending, and when they cut on spending, it is Trump voters who lose their jobs. As Cruz said, he has a very narrow window to not be wiped out at the midterms. I don't think anyone who voted Trump signed up for a recession.
>Countries like China can do more long-term plans without worrying about silly things like electability.
China always does long term and very long term plans and executes them. US, on the other hand, is much more agile and reacts very fast to changes and opportunities.
Probably the best strategy is a mix of both, have long term plans but be able to react fast when needed.
I’m about to sound like a China shill, but China reacts and executes very fast when they need to. A stupid example is both implementation and removal of pandemic protocols. The second society started protesting, they acted pretty fast.
not really, they had 4 years of trump before and they figured that was what going to happen. Instead his crazy train completely went off the rails and now he's just a bull in a china shop, showing his true level of idiocy because he surround himself with sycophants.
> my first thought is "my favorite store is having a sale."
This gets repeated a lot, but unless you already had most of your portfolio in cash it’s not actually a net win to see a drawdown like this.
The course of the global economy was just altered. The best case scenario would be if the proposed tariffs go away completely, but even then the markets will be cautious for the next 4 years at minimum.
The market is down because the future prospects for those businesses just got much worse. Yeah you can buy them at a cheaper price, but their corresponding future output remains down as well.
It’s like seeing a thing you wanted to buy go on sale, but upon closer inspection it’s on sale because it became damaged and you’re buying damaged goods.
The best case scenario is that the administration pulls the “just kidding” card, reverses course, and claims some sort of victory while returning to the previous status quo. If that happens, stocks were briefly on sale even though they’re not rebounding back right away. However, if the administration digs their heels in and tries to push forward then the market is going to continue downward.
This isn’t a normal drawdown. This is a crisis with the leadership of the United States.
> The market is down because the future prospects for those businesses just got much worse. Yeah you can buy them at a cheaper price, but their corresponding future output remains down as well.
It should be noted that these moronic "buy the dip" claims are happening when Dow Jones is in a freefall, so the poor people who bought the dip on Friday will today wake up with a portfolio loss of >5% without the market even reopening.
It's funny when these chants take place when prices start to plummet. It's like investors are screaming for unwitting people to buy the bag off their hands.
> will today wake up with a portfolio loss of >5% without the market even reopening.
That's pretty much irrelevant unless you opt out next reopening. If you have your portfolio down 15%, 20% or 30% it does not matter. That's the short term picture. If you're investing and looking at how those numbers fluctuate to make decisions and panic you will lose money for sure. No different like going to the casino. You're supposed to buy and hold forever, regardless the market crashes or rises. That's Bogle's advice and I believe is sound advice. So, there could be an opportunity to buy lower now if you are playing the long game.
> That's pretty much irrelevant unless you opt out next reopening.
Not really. If your goal as an investor is to maximize your returns. Obviously, buying a security when it's value is cratering is the worst time to buy simply due to the fact that, in a scenario of an unavoidable bounce back, waiting out while doing nothing is more profitable. Buying earlier in the crash simply means the profitability of your hypothetical scenario is lowered.
> If you have your portfolio down 15%, 20% or 30% it does not matter. That's the short term picture.
I don't think you fully grasp the implications. Even assuming a simplistic interpretation of an unavoidable bounce back, if you postpone buying after the price craters 30% then you're guaranteeing your investment will be more profitable. Remember, the trick is to buy low and sell high, not buy high and hope it will somehow get higher.
Problem is that no-one knows when that's going to happen and it can bounce back as fast as it went down, meaning in that situation you would be missing the opportunity too. The investor strategy as per Bogle is simple: buy regularly, regardless the market and hold it forever (until you retire). I don't want to speculate, because that is known to be a losers game. I read some time ago "The Little Book of Common Sense Investing" and to me that seems to be good enough advice to stick with. It's simple and as for what I read from other sources it works.
> Remember, the trick is to buy low and sell high, not buy high and hope it will somehow get higher.
If you take a look at the historical S&P500 (1926-2016) trend even taking into account market crashes the curve always goes up in the long term. That's why Bogle's strategy works.
We can fall a lot more, and people who are buying the dip on credit aren't necessarily taking a long term view of the market. Who is keeping a few hundred K in their bank account just in case the market crashes so they can take advantage of it?
Also, 2008 you needed 5 years to recover if you bought at peak (buying as it was lower of course means less time to recover). In 1930, you were looking at 20 years. You could also lose your job if the market really tanks, and buying the dip just means you are less liquid at a time when you need money for living expenses.
You're assuming something like all or nothing. As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account. Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly. If people are taking credits to do that, well they are making an extremely risky move as well. Just because the market could go down doesn't mean that you have to make an all-in move.
I'm assuming worst case, which is what you have to prepare to survive through.
> As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account.
You are supposed to have 3-6 months of living expenses in your savings account just in case you lose your job. Is that what you are talking about using to invest in a dip?
> Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly.
Yes, but you are also saving money for events where you need liquidity right?
If the tariffs go on for awhile and consumption becomes expensive, we can always just cut back on consumption and invest that money instead (Americans consume a lot anyways), that is what the Chinese have been doing all along at least (although they wished their consumers would start consuming more). We are basically going to swap places with the Chinese, the writing on the wall is clear.
To be honest, “buy the dip” is generally cope that people tell themselves.
The average investor isn’t sitting on a pile of cash just waiting to move it into the market. People investing periodically over decades have far more in the market than out. The “buy the dip” stuff ends up being a little bit here or there so they can convince themselves not to worry, not an appreciable swing in their portfolio.
> "Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash.
Not really. It's literally a call to action to counter what the market is doing, in hopes that it can prevent and recover trends. They are literally telling others to buy when everyone around them is selling.
My two favorite trading terms: “catching a falling knife” and “dead cat bounce”. You don’t want to buy until you’re sure it’s reached bottom. So you look for signs of rebound, but you can be fooled by a dead cat bounce. Because if dropped from high enough, even a dead cat will bounce before coming to rest.
Being able to do the opposite of what others do is a useful quality to have as an investor.
I don't tell random people to "buy the dip" because I don't want to be responsible for the myriad dumb ways people interpret that advice, but it's not at all an unreasonable thing to say to someone who knows what they're doing.
> To be honest, “buy the dip” is generally cope that people tell themselves.
I don't think so. "Buy the dip" is a call to action to third parties to irrationally invest their resources in a way that benefits you personally. It's a call to not believe what they are seeing, and that doing the opposite of what would be prudent or reasonable is somehow something that is in their best interests.
You already hear fantastic claims like "buying the dip is what rich people do to get rich". Yeah, buy low-sell high is good business. But that only works when you actually buy low. If you buy in when the freefall starts, aren't you buying high? How is that good business?
To buy the dip you need liquid cash sitting around earning very little, hoping the market goes down.
Reallocate portfolios if that makes sense, but much of the “buy the dip” stuff implies good market timing: To do it in meaningful amounts you’d have to pick the right times to not invest, accumulating cash at a lower rate, then you’d have to know precisely when to invest it again, switching it back into the stock market.
Yes. This is one of the reasons 80 stocks / 20 bonds is a common strategy. The rebalancing "forces" you to buy low and sell high.
When stocks dip, your portfolio might become unbalanced at 70/30, so you reallocate funds to buy stock bringing you back to 80/20. Conversely, if stock market soars, you might get to 90/10, and selling stocks would bring you back to 80/20. Performing this balancing is, in effect, "buying the dip"
This opinion is even worse ^; Literally nobody can predict what the bottom is (except magically the group with strong political opinions /s), but what amazes me is people are willing to give out bad advice in an attempt to create a realization of the ideology.
>This isn’t a normal drawdown. This is a crisis with the leadership of the United States.
The same thing happened just 4 short years ago when covid hit. Mass panic and then intervention kicked in. The intervention could have been taken away at any time but the market went extremely risk-on anyway and you would have gotten left behind if you sold out.
>but even then the markets will be cautious for the next 4 years at minimum.
You are overestimating the cautiousness of the market. Unless there are better returns offered in some other investment, the capital is going to pile back in if something like tariff deals start getting announced.
>>This isn’t a normal drawdown. This is a crisis with the leadership of the United States.
>The same thing happened just 4 short years ago when covid hit.
If by "same thing" you mean the market crashing, then yes, it's similar. But the cause of this isn't the "same thing" at all. For the next 4 years, the USA will have a president who wants to annex Greenland and Canada, who hates most (all?) US traditional allies and trading partners, who doesn't believe in free trade. The effects on the world economy are going to be slower to take effect compared to COVID, but they're going to be much deeper and long lasting.
The effects of covid were literally being talked about as the entire world economy grinding to a halt overnight. It was mass panic beyond high tariffs for a foreseeable future.
The market was in straight free-fall until all of the major govts stepped in to print trillions. It was like a light switch made the “end of capitalism” disappear in a day.
> The same thing happened just 4 short years ago when covid hit.
COVID was a natural disaster. Leadership responded to it.
This is the opposite. Markets were going well. Leadership intervened to crash them.
Do you see the difference? It’s not the same.
> You are overestimating the cautiousness of the market.
You are underestimating the impacts of risk premia.
This administration just showed that they don’t know what they’re doing, but they’re willing to go all-in on disastrous economic policy. They’ve already waffled on previous policy and then came back and doubled down. They’re still talking about more tariffs.
This isn’t a little “oopsie” any more. It’s a pattern. It’s going to be a long 4 years until we can get back to stability.
> Unless there are better returns offered in some other investment
You are so close. It’s not just returns, it’s risk. Trump just made the market hyper risky.
Yeah, I think it’s worth emphasizing: we are in Month 4 and there’s already been an enormous amount of chaos.
We haven’t even seen the effects of the agencies getting cut. Sure they’re running for now, but burnout can set in quick for the remaining employees and some YC investor-clown’s delusional dream of an “AI” workforce isn’t going to save us.
I’m just one fish in the sea of retail investors but I won’t be in any rush to convert cash savings into investments with this current trajectory.
Besides, cash is infinitely more useful for my mortgage payments — especially if layoffs in the private sector start.
The covid crisis was an actual event in physical reality not caused by admin policies.
This crisis is the admin taking a sledgehammer to international capitalism. No obvious intervention other than "stop doing that".
I'm sure at some point the fed would have some kind of response but inflation of tariffs is a huge risk and that limits what the fed can do unless they have co-ordination with the admin.
> The covid crisis was an actual event in physical reality not caused by admin policies.
Sortof yeah, but also sortof not. Basically any non-Trump president would have been briefed about Covid in January 2020, and most of the previous ones invested a bunch of resources into making sure that the disease was contained far away from US shores.
Even Bush II would have done that (and did, I believe for SARS).
It's a possibility. SARS II was much harder to contain though. The first SARS actually made it to North American hospitals, but was contained. It didn't spread in the populace.
Once SARS II made it out of China, only globally coordinated net 0 case policies could have stopped it. I think it would have been worth trying for but there was no appetite for it.
> It's a possibility. SARS II was much harder to contain though. The first SARS actually made it to North American hospitals, but was contained. It didn't spread in the populace.
Totally fair, but as I recall he didn't even try to keep it away from US soil (which had always been the CDC approach).
Let's remember that it was much worse than it had to be, because the same President actively causing this current catastrophe thought he could just ignore the problem and it would go away.
> (...) the capital is going to pile back in if something like tariff deals start getting announced.
What leads you to believe that scenario is realistic?
I mean, the list of US trading partners is dominated by less than a dozen trading blocks: EU, Mexico, Canada, ASEAN, China. That's it. Trade with India is as significant as trade with Italy alone, and a massive deal with them would barely move the needle in this trade war.
Unless the US somehow makes it's own trade war go away with the likes of Canada and the EU, there is no bright outlook for the market and economy. Trump's administration is repeatedly threatening both with annexation.
To make matters worse, do you really believe any trading block will move back to preserve economic ties with the US after this mess? Not a chance in hell.
The EU, which thanks to the Trump administration is already scrambling to prepare for a war with Russia, is excluding the US from supplying them arms. This is the extent to which these trading blocks are going to shed ties with the US.
Do you think things will just go back to how things were 6 months ago? The Trump administration ensured this is impossible.
> the list of US trading partners is dominated by less than a dozen trading blocks: EU, Mexico, Canada, ASEAN, China. That's it.
ASEAN countries are eager to make a deal. The USMCA deal is still in tact with Mexico and Canada.
> The EU, which thanks to the Trump administration is already scrambling to prepare for a war with Russia, is excluding the US from supplying them arms. This is the extent to which these trading blocks are going to shed ties with the US.
Germany is in an energy crisis and a few other members are close to a sovereign debt crisis. Domestic production of weapons will be tough and expensive. The EU’s plan to sell bonds to pursue war with Russia looks horrid. They’re in no position to be in a trade war. In a few months time when this reality sinks in, they will have to make a trade deal and remove US tariffs.
> Germany is in an energy crisis and a few other members are close to a sovereign debt crisis. Domestic production of weapons will be tough and expensive. The EU’s plan to sell bonds to pursue war with Russia looks horrid. They’re in no position to be in a trade war. In a few months time when this reality sinks in, they will have to make a trade deal and remove US tariffs.
This really, really depends on how things evolve this week. Like, the EU will 100% tarriff the US (and probably China to prevent dumping) this week.
The big question is whether or not they use the Anti-Coercion Instrument, and hit US tech and financial services. Selfishly, I hope they don't (as I work for a US fintech while I am based in the EU), but this will probably happen if Trump retaliates to this week's sanctions (which he probably will).
This is gonna get a lot worse before it gets better, unless there's a unilateral pullback on the part of the US (which seems very unlikely).
> But why does the EU even want a manufacturing sector, don’t you all realize that no sane person wants those jobs?
Why do you equate responding to Trump's tariffs with "want a manufacturing sector"? Trump is pushing the US to isolate itself from the world, not the EU. A few years ago the likes of Volkswagen were investing in auto factories in Morocco.
> Indeed. That's especially true on the NATO side. This is a historical event on the scale of the breakup of the USSR.
Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
In March 2020, people were convincing themselves that the global economy was flying straight into the ground, but people who didn't lose their minds made a lot of money, quickly.
IMO, there was a better case for that panic, given the context (they were partly right! the lockdown stuff was incredibly costly!), than there is that this particular spasm is meaningful. Only time will tell.
> Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
I don't think you fully grasp the gravity of Trump's actions.
For the first time in its history, NATO is excluding the US from arms purchase programs. This takes place at a time where the EU is scrambling to prepare for a war with Russia, which is also caused by Trump's action of abandoning it's allies,
The Trump administration is also heavily invested in annexation rhetoric targeting multiple NATO members.
Then there's the whole tarrif absurdity.
These sequence of moronic steps individually represent world-changing events. They all took place in a couple of months into the Trump administration's takeover.
This goes well beyond the suspicion that Trump is a Russian stooge. This changes the way the world was structured after WW2. The fall of the soviet union might even have a smaller impact in world history.
> I don't think you fully grasp the gravity of Trump's actions.
I "grasp the gravity", to the extent that anyone is actually able to do so at this time. I am unwilling to engage in hyperbole in order to create the illusion of a nearby black hole.
This is a non-partisan reaction. I am opposed to tariffs; I am also opposed to panic and exaggeration.
> This goes well beyond the suspicion that Trump is a Russian stooge.
Your choice of neutral, unbiased language is compelling.
The first man on the moon, the breakup of the Soviet Union, September 11 - these were all things that people predicted would be monumental world-changing events at that point in history, and also proved to be after the fact. Maybe history will prove us wrong, but this feels like one of those moments to me.
I mean we correctly estimated that the breakup of the USSR was a big deal without hindsight.
People who didn't panic during the covid crash made money not because they understood the situation but rather because the money supply went into the stratosphere.
The closest modern analogy might be Liz Truss’ short tenure in the U.K. Her actions paled in comparison to this absurd tariff situation but the only way to resolve it and restore confidence was for her to resign.
The problem in the US is that the tariff situations is bonkers insane, was clearly not thought out at all, and the person controlling the strings is talking about ways to run for a 3rd term instead of considering resignation.
This is a political crisis. The best we can hope for is that the Senate pushes forward with attempts to reign in the president’s tariff powers and the House actually goes along, which is unlikely right now.
I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
Yeah really, Truss really is the most salient yardstick, with the complication that any analogous action in the mechanisms of american politics feels slightly unfathomable. And I was shocked enough at Truss' ouster.
It's all so divisive, but it frustrates me to no end that likely the biggest end that people trying to defend this, without any admission this is a crisis of confidence waiting to happen if it's not already there.
The amount of political capital immolated for the sake of this course of action is flatly embarrassing.
It doesn't really matter what they want or how long they think it's going to take to get it, the damage is already done.
> I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
This is already happening. The snag is, until the break adds up to a 2/3 majority in both House and Senate, a presidential veto of a bill reversing the tariffs cannot be overridden. And to get to 2/3, a lot more pain is going to have to be felt in Trumpland.
If people start turning against Trump, Congress will follow. Look what happened after the 2022 terms. Dems over performed and everyone immediately tried to make Ron Desantis a thing.
Sharks will always be in the water around Trump waiting for him to slip. The question is, will Independents(maybe even some of the base) shift hard away when they start feeling the pain of the tariffs.
Loss of trust and finding other sources for the things they used to buy from the US, perhaps even producing those things themselves and becoming a new competitor the US didn't have before.
If it's reversed faster than alternatives are in place, then it won't matter too much if the trust is there because what alternative is there? The logistics and stuff take time to change. If it persists long enough, then the trust piece will be more of a factor.
Mone of that really has to do with the tariffs. Consumers will continue to buy what they can afford. This won't reduce that much, probably by about 5% is my guess based on multiple factors. Most healthy companies will continue to operate just fine. Market confidence is down, but it's been fragile due to it's overvalued state for a while. Aside from tariffs, policy outlook is very business friendly.
This mostly a market overreaction or correction from being overvalued if we look at the past. This Chinese trade war has been going on since Trumps first term (at least). The rates on the top import/exports have been around or over 25% for a while. It's also interesting how much China is hurting itself with pork. The Chinese own Smithfield and are a huge importer of pork from the US, yet they slapped an 80% tarriff on it?
It will affect if people buy a Honda they don't 100% need right now, or keep emergency money in case things go worse. Which on larger scale will still affect prices of everything.
Every time this happens people say it’s different. See: COVID pandemic. And we know the V shaped recovery that came after that. Of course that shouldn’t be interpreted as a predictor of what’s to come next (because it’s not), my only point is to say that the same rhetoric pops up frequently during downtowns since forever.
This is different. It was entirely avoidable. Entirely predictable. Entirely preventable.
Hell, it’s mostly reversible if the administration would own their mistake. But they won’t.
That’s the problem: This is not a natural disaster or even a reaction to a market-created crash. It was orchestrated by the people who were supposed to be doing the opposite.
I don’t believe claims that the United States is doomed or other hyperbole. I do believe that this is firmly different than anything we’ve seen in our lifetimes though.
After the initial COVID phases nothing major really changed long term as far as the world balance goes though. Everyone got affected, everyone started recovering. Things may have been uneven, but not like now, right?
Up until WWII happened I doubt many people would have believed that sort of death and destruction was right around the corner. They'd just had WWI and weren't expecting that settling the unsettled business from that would be around 3x worse, break the European colonialists and ... I don't know how wiped out Jews in Europe were, but it was a painful experience although I assume some survived. The property damage was also extensive.
High tariffs isn't going to be the end of the world & this particular stage of crisis doesn't look very important. But the overall geopolitical crisis we're in as everyone realigns certainly could end the world as we know it. Both in the literal and worst case senses. Few went in to WWII chuckling and saying that they were going to break their own power permanently, but that is what a lot of participants ended up doing.
Just a comment, every catastrophe has victims, survivors, and lasting consequences. I didn't mean to trivialize that in my response. Regardless, life goes on.
In the sense that members of the human race will survive, sure. That Woodward book out recently was suggesting a double-digit chance for a nuke to get used in Ukraine. Hopefully he is prone to making things up - seems possible that life would not have been going on in at least some regions.
I simultaneously take comfort from the fact that no-one else seems as worried as me and dread from the fact that it'd be the 3rd world war that people just walked into because they weren't taking the threat seriously enough. We appear to have been watching insane policy come out of the US diplomatic establishment for a good decade now. And the crisis is still escalating.
A disease did that. Nobody knew the details, there was fear it wouldn't stop. The markets groaned and creaked under the weight of the fear and uncertainty. But with the vaccine and the reduced lethality of new strains, a disease becomes a nothing. Recovery began because nothing was in the way, the bad thing was gone.
The people in charge of the government did this. The people who will still be in charge of the government. The bad thing is not gone. The bad thing has no end in sight. And the bad thing is doubling down.
The bad thing is saying it’s no problem to stick around for a third term and beyond, and that it wants to go to war to annex territories from the closest trading partners who might be able to mitigate the impact of the trade war.
The cause really was not the disease and even loss of life from it. It was actual real world disruptions shutting down normal operations. Lockdowns, quarantines and so on. Goods stopped moving. So it is obvious that trade would slow down and thus profits would be hit, directly leading to stock prices correcting.
At the time, there was trust that the government wanted to assist the recovery. They have lost the benefit of the doubt. This actually feels malicious.
With Covid, recovery came as Covid was removed. With Trump, recovery can come with…
Did anybody actually “trust” other countries to start with? I’m reminded of the cynical yet accurate quote that nations don’t have friends, they have interests. I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests, it seems admin doesn’t know?) and foreign nations to do the same.
This point is especially hollow because it is true that many countries have maintained asymmetric tariffs on us. Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them. I’d take their cries of “lost trust” more seriously if they hadn’t shown with their actions they will pursue their own advantage too.
US has been very successfully exporting its debt (quite literally, almost no other country can run such high deficits for so long) and services.
What do you think happens with all that money if Americans can’t buy those cheap imported goods anymore?
Also other countries like China or Japan won’t be able to continue buying US bonds. Basically Americans are getting free stuff funded by debt they are never going to pay back and still you have people whinning…
> larger %
US decided to charge e.g. 15 times higher tariffs on the EU than the EU does. You believe that’s even remotely reasonable?
Or do you actually trust Donald’s table that they made to confuse clueless idiots?
Successfully? We blew 3.1% of our GDP on debt service alone in 2024. This is insane, irresponsible, and unnecessary. We are mortgaging our children and grandchildren’s futures. Just like young folks like me correctly complain that old people are leeches sucking America dry - social security, medicare, housing price subsidies, decade after decade, despite a what, $1.7mm average net worth - my generation shows no signs of doing anything differently. “Screw them kids. Boomers got theirs, I’ll get mine.” If our interest burden keeps growing from 20% of federal revenues we could end up spiraling into more and more debt. Or worse we could get to a place where the fed can’t feasibly raise rates to level out the economy and moderate inflation because that would balloon interest payments to a ridiculous degree.
Where Trump is fundamentally correct is that a trade imbalance means selling pieces of your country off to compensate. Equities, bonds, land. All a claim against future money that sucks those returns out to go to foreigners. America has been lucky in the past, in that the huge market for dollars helped us avoid some of this, but that’s not a limitless solution.
Obviously the answer is not that we must make Nikes here. It’s also not that we must have zero trade deficit with any single nation. But we probably should focus on exporting more advanced goods and more services to bring our overall trade deficit down, focusing on a net zero or overall trade surplus outcome.
> We blew 3.1% of our GDP on debt service alone in 2024
As long as GDP growth outpaces (or is even) the increase in debt it’s not a big issue. Some spending cuts and mild tax increases (maybe not so mild for the higher brackets) would solve that.
> focusing on a net zero or overall trade surplus outcome.
If you looked at the countries pursuing such policies like Germany or Japan they haven’t been doing that well at all over the past 20 years. Basically no real growth and they are permanently stuck in the early 2000s. US on the other hand has been doing extremely well (lack of redistribution is another issue).
Debt growth is massively outpacing growth in GDP. You're right that it's less of an issue if we grow quickly and effectively keep leverage the same but that's not what's happening.
Germany and Japan haven't focused super heavily on achieving a trade deficit. As you said, Germany has huge problems with her welfare state and Japan has huge demographic issues. I'm not saying we should achieve a trade balance by tariffing everything to death; I am saying we should focus on faster growth to get there and reduce our insane level of consumerism. I don't have an issue with a temporary trade deficit for growth-oriented reasons, but I have little save contempt for people ordering packages of chinesium temu crap.
> Germany and Japan haven't focused super heavily on achieving a trade deficit
They have. For Germany maximizing their trade surplus was one of their primary goals for many decades. Amongst other things that’s why they accepted the Euro (easier than devaluing DM).
> As you said, Germany has huge problems with her welfare state
I never said that.
And Germany specifically has quite low government debt and a very high trade surplus. Yet.. it’s not doing better economically than the US. Welfare hardly has much to do with that.. e.g. US government excluding all private spending spends about the same as Germany as % of GDP on healthcare. Total social spending is not that massively higher either (~23% vs ~28%).
> ordering packages of chinesium temu crap
Sure, but that’s by and large insignificant. If we look up US imports by category consumer goods don’t really make up that much.
Also, I don’t really see how can tariffs do much besides lowering productivity and increasing prices.
Like that complete nutjob Lutnick said they want “millions and millions of people in America screwing in little screws to make iPhones”. That just makes no sense, you want to minimize the amount of easily outsourcable low productivity jobs in your country.
The “reciprocal” tariffs are nothing close to reciprocal. I hope you know by now that the numbers Trump presented were not actual tariff numbers that other countries put on us.
The trust issue is domestic, too. Businesses just got slapped with the largest tax increase in history at home. Pointing fingers at other countries is a distraction. It’s ridiculous to think that this will encourage companies to start building factories here when even the raw materials are now heavily taxed on their way in to the country. Any sane company is going to pause US factory investment until there is some clarity and predictability.
I think I miscommunicated my support for some trade policy change as support for Trump’s “liberation day” tariffs. Here are things I think we should fix:
- America and Hypotheticalstan each export $1T to each other with a bunch of tariffs on various things. America raises $50B in tariff revenue on Hypotheticalstan’s imports while Hypotheticalstan raises $100B on American imports.
- America doesn’t make enough defense-critical stuff: steel, solar panels, chips, aluminum, rare earths, etc.
- America has a ~$918B trade deficit.
Things I do not care about:
- Vietnam makes our Nikes.
- We have a trade deficit with specifically Vietnam.
> Why should you care how much another country charges its residents to import stuff from the US?
Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.
> Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Sometimes it's hard to tell if the US public is even aware of this. I mean, what is the point of tarrifs other than raising the prices in the domestic market of imported goods and services? That's all they do.
The rationale from the perspective of the central government is that this will finally make foreign goods and services uncompetitive with regards to domestic alternatives, and thus will finally render them viable. But that childish assumption is based on so many absurd notions that are plainly unrealistic. The only thing that's real is the direct impact of tarrifs: increase the price of goods and services in the domestic market.
I think the problem is that because of the huge disparity between the cost of imported and domestic goods which has developed over decades, the choice that people face is not 'oh, now imported goods are a little more expensive, I will instead buy American', it's 'now I can't afford to buy anything at all.'
You have to get more money into the hands of the consumers in order to be able to implement something like this.
Wine is a good example because it’s not fungible: one bottle of red wine is not like any others. If you have a domestic wine industry, it likely can’t compete on quality with French wine.
So if France can export wine at a price that’s reasonable enough, your domestic wine industry will fail, undercut completely by cheap French imports.
Tariffs in and of themselves are not all dreadful. They help level the playing field and support domestic industry.
But you can’t go from decades of offshoring manufacturing to suddenly charging punitive tariffs without making imported goods (which were the only ones your citizens could afford) much more expensive, and therefore, yes, folks might buy wine less often altogether.
IMHO it’s pretty fungible at least outside the high-end stuff. Most people would hardly notice where the wine comes from (aside from specific types of grapes and such)
I'm surprised to hear that. In my experience, most people tend towards the other end (believing themselves to be connoisseurs, etc.) rather than 'just give me the house red'.
Because tariffs aren’t actually a good thing. If you hurt my producers by $1, I should hurt yours by $1 to maintain some level of credibility in our repeated game. If I don’t punish foreigners for tariffing my guys they have no incentive to reduce or remove those tariffs.
I don’t actually care about t-shirts being made in china. That’s not an industry that matters at all. I do care about china closing her entire market to American tech, for instance.
If you start looking for justice in the world economy, you've already lost the game. The only thing that matters is money. You can stick tariffs on left, right and centre, and all you'll end up doing is pushing goods out of the hands of your consumers.
You can try to 'hurt' another country's producers, but they're likely to just go and find another market for their goods.
I'm not really looking for "justice", I'm looking to uphold our interests. I don't particularly care if we raise more revenue than some other country does from our imports. I don't think tariffs are the best or only weapon to fix our problems. I do think they have a place, that selling off more and more of our country via trade deficit is unsustainable, and that our priorities as a nation are beyond screwed up.
> I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests
I think that's the thing — you plan in business for people to operate in _their own_ best interests. If people stop doing that & their behaviour is volatile, then you're going to put your own mid-term plans on pause until you know what's what.
> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.
Is that happening, trade deficit aside, & when you factor in services as well as goods?
You could start making stuff we're willing to buy. I'll give you a qick rundown of what Europeans might want:
* no junk food, no weird GMO garbage.
* road-legal automobiles, no EPA-workaround trucks with shoulder-high hoods.
* advanced tech hardware gadgets.
* entertainment
* no, we're not particularly interested in guns.
Tell me what exactly what aren't we already buying from the US, when it's competitive: quality food we have our own, sorry; cars, well you've gone down a crazy path since I can remember; hardware, well we do, except you chose to offshore manufacturing; entertainment, we do... a lot; guns, be honest, you know you have a problem, not us.
To be fair, the US exports a lot of services to the EU. For some reason these weren't included in the calculations shrug. As an aside, it's hilarious to see loads of Europeans saying that they never use any US products on a bunch of US owned products.
Also, last weekend my son had some weird intestinal flu we couldn’t figure out and ended up visiting the weekend GP. You think we had to pay anything (besides the slippery-slope-ish, pice-controlled, Dutch health insurance system)?
So yeah, I might earn 1/3 an SF developer, and yeah — the startup scene can be frustratingly sterile — but I can afford to not need a Tesla Juniper, though I really love it when I lease it for travel.
And yes, we do do innovative and cool stuff, we just don’t exit with billions.
cali is the butt of half the jokes in America for a reason. i'm glad you like your view though. i'm glad you like your government insurance but my private health insurance is also very good and i don't have to pay much (if anything) for things like that. i'm also alive today thanks to good private insurance and the level of care it afforded, the range of specialists i could see, which most government-run systems would not have covered.
if y'all are content, fine i guess. but it is true that the current european model is sustainable. the FT ran a good piece recently discussing how America reducing or ending the indirect european defense subsidy, combined with slowing growth and an ageing population, means that model must come to an end. i don't begrudge you the years you enjoyed it but certainly not for me.
you were saying you think no GMOs, smaller vehicles, banned guns, and less money are worth this. i think that's a terrible way to live and would hate doing so. my objection was precisely to you applying your lens and values to America, American values, and our way of life.
I’ve had to shut my mouth hard the past week. I went heavily short right before the “liberation day” announcement and doubled my port. My buddies in finance, or my buddies who work elsewhere but whose accounts look rough, don’t want to here me enthuse about the nutty multiple expansion finally reversing so I can take my cash and buy at sale prices.
"Be greedy when everyone else is fearful" isn't just a recipe for profit; it also acts to reduce the size of market crashes and thereby make people get hurt less. Give in to your lizard brain!
The caveat being if you have even a coarse-grained sense of market timing, this works strongly against your own pnl. The optimal strategy is to long the bubble, short the correction, then long the recovery. It’s not possible to do perfectly but you can often sell for part of the way down and skip some of your losses before buying back in. This generally would increase vol but is personally advantageous if you can do it.
It is incredibly to “follow your lizard brain” and destroy your returns. Selloff? “Time to be greedy!” Whoops, caught that falling knife with your hand. Maybe it’s a V-shaped recovery a la corona. Maybe it’s a decade plus like the Nasdaq post-dot-com. Rally? “Time to be fearful!” Wait, it keeps going up? Do you get more fearful? Do you sit in cash for years amidst inflation and high returns?
Where does the cash come from if you’re invested? Are you just keeping huge piles of cash around in low interest accounts in the hopes that a black swan event comes along?
If you had a balanced portfolio a week ago, you're almost certainly overweight bonds today. Rebalance to your target weights and you'll be buying equities.
Wow! Even with the crash, wouldn't you have been better off getting the last five years of gains, especially given interest rates didn't match inflation?
I was curious, so checked - $500,000 in VOO 5 years ago would have been 1.18 million today - already accounting for the crash so far. The market would need to crash an additional 60% starting with the next open to get you back to your $500,000 break even. Maybe this will happen, but that's quite a fall.
You make a personal evaluation that differs from the market and you act on it. You need a model of the world and to believe it is more accurate than the average. A lot of people felt the market was overvalued and would correct during the Trump presidency.
You of course sold all your stocks beginning of November because you knew a deep crash was coming and wanted to be ready to buy into it. And now you have a lot of cash.
Makes me really think what is being sold. A significant discount in stock that continues paying dividends would be actually be reasonable. More return for same money.
But many stocks are more so collectibles... Value going up for sake of it...
The market can keep falling until Trump pulls the lever back or enough of his pet legislators are willing to override him. As a long-term investor, I'm not selling. But we have no idea where the bottom is.
The market is still pricing in the optimistic scenario of tariffs being repealed, either by supreme court (e.g. on the non-delegation doctrine), by congress veto (13 more Republican defectors), by impeachment, or by Trump changing his mind.
If none of these four scenarios come to pass, the market will keep dropping as these possibilities get priced out and the remaining scenarios (escalation or maintenance of the tariffs) become more likely.
> The market is still pricing in the optimistic scenario of tariffs being repealed
"The market" has no idea what the impact of the proposed changes are. Setting aside the obvious questions about whether or not this stuff will even happen, it's just not possible for something this complex to be evaluated so quickly.
This is panic. People are wildly guessing about the "worst case scenario", without any detailed understanding (or even data) on what might happen [1,2]. It's all speculation, but lots and lots of people love to write horror stories for clicks and points.
[1] Just for example: what does it even mean for an "X% tarrif on all products from country Y" to be imposed? The Harmonized Tariff Schedule is hundreds of thousands of line items, each with a different rate. Are they all being replaced with a single number? Is that line item number being multiplied by a factor? Something else? I guarantee that almost nobody knows the answer to that question right now. I'm not even sure an answer exists.
Working through that changeset is a non-trivial operation, and then, working through the impact on something as detailed as a supply chain for any non-trivial product is immensely complicated. Now do it for every product.
> "The market" has no idea what the impact of the proposed changes are. Setting aside the obvious questions about whether or not this stuff will even happen, it's just not possible for something this complex to be evaluated so quickly.
This is just false. Countless people were busy running scenarios based on the expected range of tariffs. It wasn’t a surprise that tariffs were coming. It was a shock that they were so insanely high and that the people putting them forward were so clueless about it.
> [1] Just for example: what does it even mean for an "X% tarrif on all products from country Y" to be imposed? The Harmonized Tariff Schedule is hundreds of thousands of line items, each with a different rate. Are they all being replaced with a single number? Is that line item number being multiplied by a factor? Something else? I guarantee that almost nobody knows the answer to that question right now. I'm not even sure an answer exists.
You’re projecting your own lack of understanding on to everybody else. The changes have been out already and any company that does business has already read through the documents.
Just because you don’t know or understand doesn’t mean that nobody does.
> This is just false. Countless people were busy running scenarios based on the expected range of tariffs.
Appeal to authority ("the experts did the math!"), but OK...
> It wasn’t a surprise that tariffs were coming. It was a shock that they were so insanely high and that the people putting them forward were so clueless about it.
Right. So...they didn't do these scenarios. Which means (repeat after me): everyone is guessing.
Even if I accept your appeal to authority, and even if I assume that their "models" are sufficiently good to predict the future in a chaotic unfolding scenario involving dramatic changes to a complex global trade system [1], I basically guarantee that the average market player is "vibe trading" right now, not working from these models.
I'm not saying that it's impossible to work out the answer. I'm saying that takes time.
Also, no one seems to be taking into account that most countries are in active negotiations to reduce or eliminate the tariffs. So the US may end up getting something else in exchange for them being partially or wholly lifted on countries where a deal can be made.
I'm don't understand the disagreement because it's not like I'm saying that markets perfectly price all available information.
Even if securities are not priced perfectly accurately, it's still a fact that investors know that Trump might change his mind. It's still a fact that investors know that the Supreme Court might strike down the tariffs. These optimistic possibilities reduce the amount of panic and reduce the magnitude of the drop.
If the Supreme Court ruled against the lawsuit brought by New Civil Liberties Alliance tomorrow then the market would drop even more than it otherwise would, because it makes it even more likely that the tariffs will remain.
> I'm struggling to understand the disagreement because it's not like I'm saying that markets perfectly price all available information.
You're being sanguine about the power of markets to react to short-term change. Basically, "all available information" consists, at this time, of what I posted above. Be honest: what can you infer from it regarding the "correct" level of price change in the S&P500? But that's too ambitious: what's the correct level of price changes in, say, machine screws?
You can't know the answer. Nobody can. The best any particular expert analyst might be able to do, right now, is to speculate about the impacts of the top-line tariff rates on a given company's product prices. But they cannot:
* know if those prices are correct
* know how the pricing of other products (which they don't analyze) will materially affect those pricing models.
* know what compensating strategies the company might employ
* know the costs of those compensating strategies
* know the impacts of the price change on the market demand for the product(s)
* know the impact of the price and demand changes on margin
...and so on. There are so many unknowns here. Even the most informed analysts are just wildly guessing based on headlines and vibes. I have 0% faith the "market" is currently providing a useful estimate of the impact of these changes, and I have 100% certainty that the people confidently asserting things (like a market projection) are fools, or simply talking their book.
Keep track of where it has been; you don't need to buy at the absolute lowest point, if it creeps back up you can slowly buy in again.
Have a look at trackers like the S&P 500 after previous crashes, it takes 3-6 years for the market to return to its previous highest value. Or six months in the case of the panny-D crash.
> As for people getting hurt, yeah, that sucks.. but you should never invest what you can’t miss..
You do understand that pension funds are financed through these investments, don't you? This means that the people who will be hurt the most are those who didn't invested. It's not the billions that Bezos and Musk lost that's painful. It's the old mom or pop who worked their whole life and now can't retire because their pension doesn't allow to survive.
And you do realise these are long-term investments by pension funds and governments right?
You aren’t actually getting paid with the actual money invested, they usually already calculate with 108-110% coverage, and already assume life-long coverage with an average far exceeded average lifespan, precisely to take this into account
A reminder that, whilst markets are imperfect and the price is often wrong, the price represents the best guesses of some highly compensated and highly able individuals who do this for a living and, as a consequence, is much more likely to be in the right ballpark than any guess made by someone here.
Well it's nearly 1pm in US Markets :) Reading through the threads here should remind everyone that investing advice on the internet attached to politically charged comments is probably worth stepping over.
The thing that keeps my mind boggled is the sheer number of right wing commentators who appear to genuinely believe that it's even remotely possible for America to build (and grow, and mine) everything they need inside of their wall.
It's a literally ignorant opinion that requires zero perspective on what the supply and manufacturing chain for the stuff they love to buy actually looks like.
All of that doesn't even touch at the jobs Americans clearly do not want part.
While I'm of the opinion that countries should become more self-sufficient for as many things as possible (because pollution of intercontinental shipping and political tensions / leverage... although that goes both ways), I know it's simply not possible since not everything is available everywhere, resource and knowledge / expertise wise.
But if more independence was the goal, they should've made it a long-term goal, not a trap door. China does this a lot better with their 5 year plans in my opinion. I'm not a fan of China either (human rights etc), but they are on track to take over as the world's leading economic force. In fact I think they already are, but the west is sleepwalking. China has got a(n economic) hand in a lot of countries around the world, and I think the raw figures like GPD are only telling part of the story.
Environmental consequences for shipping are very low compared to technologies like "growing things where they do not natively grow", as in heated greenhouses or drying out the desert to grow water-intensive crops.
Many deserts do have a limited amount of ground water. If you keep pumping it to the surface not only will be gone soon, it may never replenish as underground aquifers collapse and the soil compacts. I'm not an expert, but this is what I've been told.
I know your comment is mostly in good faith, but I wish people considered whether it's worth it to use terms like "right wing commentators" instead of the simpler "commentators".
The "right wing" label will just shun around half of Americans from taking your comment in good faith. Is the point to snark or to convince people to change their minds?
I sat with your comment, and here's the thing: if there are "left wing" commentators saying that these tariffs make sense or that America can spin up a manufacturing economy in a few weeks "or just stop buying stuff", I haven't seen/found/heard them.
In other words, it's a genuine false equivalency, at least in this case.
I am most definitely not suggesting that all left-leaning commentators are smart or good-faith actors. The left gets plenty wrong.
However, if you're going to force me to take a side on who is currently winning at stupid, I suppose my cards are on the table.
Let's just say that you're more likely to figure out how to cast spells than replicate the Asian fabrication and manufacturing ecosystem and find skilled workers willing to work them for $1000/month.
Why do you say that? The strong impression I have is that Vance is agreeing with Trump because he has to in order to maintain any influence (and not get Pence'd), is there any indication he actually wants these Tariffs in the same way that Trump does?
Part of what’s going on is that there’s an aura of incompetence and chaos that has everyone confused. Vance is part of that, and he’s on top of it very young so he can’t even claim to have the experience to handle the current crisis, nor would he ever have been elected to do so as POTUS. So to the extent markets are reacting to that aura, Vance does nothing to assuage it.
Honestly the team with the experience, knowledge, and relationships to right this ship was just kicked out of the White House.
Circuit breakers triggered during March of 2020. I believe the idea is that when the market moves that fast, a pause allows investors time to catch up and process the news.
Circuit breakers are now more common. The US has them at whole-market level and individual stock level. Somewhat like an API rate limit, there are tiered penalties - the bigger the intraday drop the longer the time-out period. In the worst case the market will be shut down for the day to cool off. This is one reason you occasionally hear about the exchange ‘stopping trading’ of a security.
More important is why they do it: it's a chance for the market to pause and rationally assess automated trades. The reason we're seeing it more often is because it's a reaction to stuff like "flash crashes", which weren't a thing (as much of a thing, anyway) before bots took over the market.
Of course, journalism remains trapped in a death cycle of click-chasing stupidity. This means that the triggering of the mechanism itself has now become a source of hype to propagate the panic ("OMGOMGOMG the market fell so fast that it tripped the circuit breakers!! Panic! Flee! Run away!"), so it's less clear that the mechanism is a net good.
Maybe this is jealousy from Americans? If we can't have a pension nobody can crash the markets! Everyone is working until they die! No more 36 hour work week!
What's in there for Trump and his friends? There is no way they actually care about bringing back all sorts of sweatshops in the US, and that can't just be blind nationalism. How do they personally benefit from that situation?
I cannot (totally can) imagine the scale of the insider trading going on. There's many plays you can do before and after the policy shocks. Before, you can stock up on puts across various major equities. After, you can buy up cheap stocks and consolidate more capital in the hands of private equity.
Trump seems to have been pro tariffs (for good reasons) since around forty years ago, so I think his misunderstood (no longer for good reasons, as globalism has since then established itself as the infrastructure) focus on tariffs is genuine.
His friends, however, probably understood the situation better and capitalised immensely on his newfound power and intent. The rich is going to continue getting richer by playing the game at tables you're not allowed to.
The true scale of the corruption and insider trading will become apparent soon enough, but we may have to wait until the next president comes along for investigations to pick up pace.
1) Double down because the one with the most money/power will eventually win with that strategy.
2) Bully everyone he thinks has less money/power than him so he can use strategy #1.
The thing about the bully strategy number two though is that you have to keep using your power and keep it on display for it to work. That means he has to keep doing bully like things, over and over, no matter how dumb they are. The thing about strategy 1 is that you can never admit you were wrong/back down because then you loose all the doubling you have put in. We are seeing the result of these two simplistic strategies at play. He will only stop because it has all come crashing down and even then he will not back down. He has never had to use a different strategy because he has been rich his whole life. He has never once been 'smart', just rich and we are all paying the price of that as everyone else has his entire life.
In game theory, he’s grim trigger and it shows in multiple ways. I suppose we’ve never seen him forced to play a game in which he’s not allowed to change the rules.
That’s when war breaks out. If you can’t change the rules, just start lobbing bombs. People quickly forget about whatever it was that they were worried about before.
He has literally been taking about this since the 80’s.
Believe it or not, it’s entirely possible that he’s doing things because he thinks they’re good for the country and its people. Hell, considering he’s not a career politician it’s probably generally more likely he’s doing it for those reasons than most in his position.
I'm not sure I can believe narcissists do things for the good of others. They lack for the capacity to even consider others, let alone make plans and decisions, putting the interests of others above their own.
> Hell, considering he’s not a career politician it’s probably generally more likely he’s doing it for those reasons than most in his position.
that's some prescription strength copium you're passing around there... where'd you get it?
At that age, it could also be about legacy. A narcissist reason, but not directly personal wealth. Instead to be seen as great stateman that fixed the country. Made it great again.
Now the approach is probably incorrect, but it is not that weird goal considering whole world history.
While the market was burning to the ground on Friday he headed off to play golf and then attend multiple campaign fundraisers where it's estimated he brings in $20M per night. That doesn't count all the money he's raking in by forcing the republican party to host events at his properties, where he effectively launders campaign donation to the party into his coffers.
Between that and the crypto scams, likely insider trading going on we don't know about because nobody's home at the SEC or FBI - I would guess that his plan is simply to accumulate oligarch-level wealth so he's well positioned for the coming oligarchy.
He's also extorted his way into hundreds of millions of dollars in legal representation. I imagine that is case people in his administration find themselves facing criminal charges...or to disrupt/challenge as many elections as he can through endless legal challenges.
For Trump this is a quasi-religious quest, that he’s been obsessed with since forever. For everyone else, there’s one or two nutty finance guys who believe in this shit and then exclusively yes men.
Kospi (SK) and Taiex (Taiwan) tripped as well. China's main index dropped 7%. Hong Kong's Hang Seng index dropped 9% at open.
Europe opens pretty soon. That's going to be ugly.
Absolutely insane. We had an economy that was highly stratified with massive wealth inequality but was otherwise growing - pretty good job numbers, inflation was coming down at a healthy rate. We were doing better than almost any other country in the world in terms of recovering from the economic damage from COVID. a geopolitical situation that was very tense in several areas, but not much in the way of actual action except in Palestine.
All that, gone. A recession is guaranteed; businesses started shutting down factories and laying off people almost immediately. Tens of thousands of people likely lost their jobs Friday and I imagine it'll be even worse Monday now that the Orange Turd has made inflammatory comments insisting he's seeing great success.
Now realize that all the social safety net programs that would be vital during a recession? They're gone. Which means there will soon be a lot of very desperate people. And that means crime. And a lot of foreclosures. Guess what that means? Real estate market crash. That means that boomers watch their homes tank in value.
Mr. Very Stable Genius put oil production and export at the top of his list and the price of oil is plunging, too - the market likely anticipates a huge drop in global and local shipping.
To top it all off, while the market tanked, he was golfing and schmoozing with people who had paid millions to his campaign to sit at his table and get a few minutes of his time. Practically playing his violin while the country's economy burns.
He's spent the last 4-5 decades obsessing about this. It's his white whale. He will not blink. He won't surrender. If there's anything he hates more, it's looking weak. The only thing that will stop this is someone pulling him out under the 25th amendment; I think that is the sole reason he's stacked his cabinet with the imbeciles that he has - they're loyal imbeciles.
Putin is laughing his ass off right now. He's won. He's gotten his revenge for the economic damage done to Russia after much of the world slammed the door on them and I'd guess Ukraine falls within months at most.
Pooh Bear is laughing too and will probably try to invade Ukraine.
Israel is going to finish wiping out the Palestinians.
And who do we have in charge of our military? An alcoholic, wife-beating, ultra-right christian white nationalist Army captain who is more concerned about people being clean-shaven than anything else.
Did I mention that US antipiracy efforts are likely being strongly cut which means world shipping is going to get a lot more dangerous, expensive, and unreliable?
I think you went into stable genius territory yourself in the second half.
> I'd guess Ukraine falls within months at most.
Even if the US stops all deliveries -- which is far from certain, judging by the noise Trump made in the past week -- Ukraine won't run out of supplies. They'll keep trading territory and even if that accelerates, it will take a long time to reach Kiev (which isn't guaranteed to lead to capitulation anyway, Ukrainians are pretty determined). Meanwhile it looks like Russia is running out of armaments itself and the domestic situation is heating up such that another mobilization is quite risky.
> Pooh Bear is laughing too and will probably try to invade Ukraine.
This is a laughable suggestion. Sure, if Russia annexes parts of Ukraine, China will gladly send construction and mining crews for a friendly price and a cut of the profits, but they have absolutely no reason to send soldiers to Ukraine. In the first place it is not their conflict. They are only "allied" to Russia until they can fully bring Central Asia under their control and build up the infrastructure to replace Russian hydrocarbons and raw materials.
Sending the PLA also runs the risk of exposing their weakness, which would damage China's position in the region. Much better to keep it as the huge threat it is on paper.
> Did I mention that US antipiracy efforts are likely being strongly cut which means world shipping is going to get a lot more dangerous, expensive, and unreliable?
Yes, but the PLN is more than ready to take up this role. They have the bases, the ships and have been training like mad. Since freedom of navigation is very important to China (for now), we might see some strange bedfellows there.
That's a bad guess. Ukraine has destroyed ~4000 Russian main battle tanks, a 3rd of the Black Sea fleet and many more thousands of pieces of equipment so far. They have proven how effective they can be defending their country. US cutting their support would be a big blow, no doubt, but Ukrainians can stay in this fight for a long, long time just with the EU support.
Since no one is mentioning it I will. If the stock market crashes, dollars move to treasuries. If the demand for treasuries skyrocket, the interest rate on treasuries drops dramatically. There's 9.2 trillion dollars US debt in the form of low interest treasuries up for refinancing this year. Refinancing them at the current treasury rate will add a huge burden to government expenditures.
However, if you drop the nominal interest rate to say 2%, that saves about $460 billion a year in interest on the 9.2 trillion, or $3.58 trillion over the life of the treasuries.
It's just a dumb theory, but blow the stock market up, lower treasury rates, refinance, prop the market back up again.
Seem's like a buying opportunity ahead perhaps.
Fun fact since you bring up treasuries, Marjorie Taylor Greene appears to have moved several hundred thousand dollars (probably most of her assets) into treasury bills a few days before the tariffs announcement, pretty much like she knew exactly what was coming. I noticed that tonight with a new site someone else here made: https://www.capitoltrades.com/politicians/G000596
I suspect there's real corruption to be found, anyone who knew the contents of "Liberation Day" could make millions off a very obvious bet. Too bad we don't care about corruption anymore!
I am no fan of the administration or Greene, but the tariff day was well communicated beforehand (though, not the magnitude). Getting out of the market before the chaos hit the fan, seems like a fiscally savvy move.
Not really. Nothing has been removed. So far everything is just a panic. Anything critical will continue to flow, just at a higher cost. Most already healthy companies will survive. This is bad, but it's not as terrible as the panick is making it out to be. The thing that's making it look worse is how overvalued the market has been.
Not many people realize that the Fed can’t really increase rates any more, because of that debt service. That’s a problem because if inflation comes back with a vengeance, the Fed can’t pull its anti-inflation lever.
It’ll be interesting to see what the Fed does but I’m inclined to think they’ll be dropping rates to near-zero sometime this year like they did in 2020. That would at least somewhat offset increased prices from the tariffs, while applying “expansionary” force on the economy through cheap money. There’s a nonzero chance this tariff game ends up reviving the economy (let’s be real, Biden Admin avoided a “recession” but the economy was/is on life support) by encouraging companies to spend more on expansion while simultaneously suppressing consumer spending. I’m no economist but it’s actually low-key genius… if it works. It probably won’t work.
Yes Trump came up with his tariff plan in the 1980s (and explained it on Opra) because he knew it would help with interest on bonds in 2025. Just more Trump 5d chess.
Personally I can't wait for the 'defend everything' theory as to why penguins on their own islands are bad. It looks like it's going to be 'those penguins were going to arbitrage Chinese goods into the USA'.
In 2024, the United States recorded imports valued at approximately $1.4 million from Heard Island and McDonald Islands, according to World Bank data. These figures are likely the result of misclassified shipments rather than actual trade with these uninhabited territories.
Just adding some context, not saying I agree with tarrifing penguin island.
I feel like most rooms containing republicans could be talked into grabbing power that's just sitting there waiting to be grabbed at a rate of 50% or better. I'm not sure what's wrong with this one.
They are more alike as an investor class than different because of party affiliation.
At the end of the day they all like being rich more than anything else.
Which aligns them with their voters -- voters don't like expensive goods and stock market crashes. The stock-owning coalition of Americans alone is bigger than either party, and everyone pays for goods.
It's the messaging which you need to apply a reality check: how is it going to happen?
Let's say I'm an industrialist, I have an HQ in the USA while my products are made in factories around Asia (China, Vietnam, Taiwan), I invested some US$ dozens of millions to setup production where labour costs are lower, my whole pricing depends on comparative advantages: my USA HQ does R&D by well-paid workers, the designs are then dispatched to be produced at lower cost factories.
Now my products will be taxed some 30-50% more, I will have a big drop in sales so the forecast for the foreseeable future is looking like a loss for many quarters, I'd need to invest some US$ dozens of millions to setup factories in the USA, hire people to do the work that Vietnamese workers do but paying US salaries, or invest a ton more in automation and robots to run these factories as cheap as I currently can in Asia. But my financial outlook is pretty bad, I won't be able to sell my products, there's a major risk there so I can't get very low interest loans since no bank can know if I'll be able to pay it. Also, should I invest this in case it will take some 5-10 years to recoup the investment? How will tariffs look like in that time frame? If I invest and competitors don't and tariffs get struck down/removed I will have just burnt money, evaporated it, while my competitors get an advantage by saving it. Repeat this across thousands of companies to get the scale of the dilemma.
I will need to put more collateral to get cheaper rates, while it's looking like I will be potentially losing money until I manage to setup these factories. I also need suppliers, and they need to setup shop in the USA as well because if not my inputs will all be more expensive anyway from the tariff tax, so I'm being squeezed in that direction as well.
Multiply this by thousands and thousands of companies, all depending on a global supply chain, how the actual fuck will this work out in reality to onshore production when these companies all got squeezed all at the same time?
There is no basis in reality for the messaging, it's devoid of any actual plan, any regards for the potential impact not to the "economy™" but to all the people employed by all the affected companies who will see a massive drop in sales, the workers are the consumers and when they get laid off because the companies can't keep paying salaries it will further depress outlooks on sales, turning into even riskier deals for financiers to take to support the necessary investments to onshore production of entire supply chains.
To top it all off there will be massive inflation since all prices went up overnight by being taxed through tariffs, less consumer spending, fewer products being purchased, companies earning less, firing people, less consumer spending, fewer purchases, so on and so forth.
It's a death spiral completely triggered by maniacs, no confidence crisis, no major shock from a natural disaster (i.e.: a pandemic), just a bunch of lunatics trying to impose a new world order through decree.
And stupid people eat this messaging up, they want to believe it will be all fine and dandy even if it's one of the stupidest acts ever taken by a major government...
It's all just so fucking stupid, I still can't believe how it is all just plainly so stupid.
I mentioned this before, and once again, it makes more sense if you look at all of this as side effects of the American population and leaders not accepting that they have lost global leadership by any meaningful metrics. It’s like everyone is freaking out, getting angrier and angrier, and throwing the sink out as well. From outside, it just looks sad. All I can think is, they’re trying to rewrite the rules that they came up with, but this time around, it is less likely for others to fold.
I might be wrong. Well, I actually hope I’m wrong. But it is what it is.
Last year I finally got to read a copy of Hunter S. Thompson's "Hell's Angels" that I had purchased while on a trip in San Francisco back in 2015, and just last week I bumped into this quote that is absolutely prescient for the current state of American society which gave power to Trump:
> "To see the Hell’s Angels as caretakers of the old 'individualist' tradition 'that made this country great' is only a painless way to get around seeing them for what they really are, the first wave of a future that nothing in our history has prepared us to cope with. The Angels are prototypes. Their lack of education has not only rendered them completely useless in a highly technical economy, but it has also given them the leisure to cultivate a powerful resentment... and to translate it into a destructive cult. The people who are being left out and put behind won't be obvious for years. Christ only knows what'll happen in, say, 1985 — a million Hell's Angels. They won't be wearing the colors; they'll be people who are just looking for vengeance because they've been left behind."
The USA in its everlasting quest of creating wealth without caring for the effects of blind wealth accumulation on its citizens, where good financial outcomes trumps over good societal outcomes, has created this monster. People who are left behind won't be all re-trained to do high-skill jobs, they will be poor, uneducated, they will be angry and resentful, they will want vengeance.
This is the vengeance, the wrath from a system who doesn't care for you as a person, only caring for you as means of production.
Like you said, the whole system was engineered by the same nation who now hates the system because their leaders focused on perpetuating the system's worst sides in pursuit of wealth instead of caring for them.
Thank you but I really don't think it should be considered "good analysis". It's an extremely basic analysis made by a layman (me) with just a cursory knowledge of macroeconomics, and average reasoning skills.
The case that I could come up with it in 5 minutes while writing a comment on a forum just showcases how braindead this policy is, more than braindead, how one needs to be ideologically compromised to even float this idea as something that could work in reality.
Whatever "model" the dumbfucks in the USA administration came up with to justify to themselves any support for this will meet with reality very, very fast, and the major problem here is that they are stubbornly ideological, Trump won't change his fucking demented mind when reality hits, he will double down like he usually does, and all of us will feel the pain, a large majority of the world's population will feel the impacts of this, layoffs are coming if this policy continues even for just a few months, businesses closing (big and small), lots and lots of suffering will be inflicted because Americans decided to elect a stupid man, surrounded by stupid sycophants.
Just compare the current administration's background with any other serious nation on Earth, it's bonkers that the Americans are accepting being led by absolutely incompetent people: Education being led by an entertainment business person, Defence being led by a TV host, Health being led by an anti-science person whose claim to fame is being a relative of assassinated politicians, the list goes on and on.
It's so absurd that I lost any respect I had left for the USA as a society, it's deathly sick and already rotting... Maybe this is the time it will be put in the coffin, just fucking sucks to feel that my loved ones will all feel the pain of this rotting.
Edit:
Just as an example of the idiocy, this is a comment from Bessent, probably the person in this administration who is the closest to being more technical:
> Treasury Secretary Scott Bessent insisted there didn’t need to be a recession and dismissed the long-term impact of stock market losses, using words like “choppiness” and “adjustment process” to explain the panic. And speaking on NBC’s “Meet the Press,” Bessent rejected the idea that people who want to retire soon had taken a serious blow. “Americans who have put away for years in their savings accounts, I think they don’t look at the day-to-day fluctuations of what’s happening,” Bessent said. He added: “The reason the stock market is considered a good investment is because it’s a long-term investment. If you look day-to-day, week-to-week, it’s very risky. Over the long term, it’s a good investment.”
The absolute denial of reality, coming from what most would consider the "competent grown up" in the whole administration. Absolute shambles...
Burning it all down to go back to making shoes and socks domestically is pure economic illiteracy.
Literally any introductory Econ book would explain why this is nonsense. It’s depressing that this mindset is resonating with so many people who think it’s better to put massive taxes on basic necessities (tariffs are taxes) and destroy the economy.
The goal isn’t to repatriate low value manufacturing, it’s simply to create negotiating leverage to discourage other countries from applying asymmetric tariffs on the US.
It doesn’t make sense for the US to allow other exporters in other countries free access to US consumers, while other countries charge US exporters for the same privilege.
What countries were applying “asymmetric tariffs” to the US before?
I think you misunderstood the message you’re trying to stand behind: when they talk about reciprocity they mean trade deficits (as if that made sense), not import tariffs. The majority of the world had very low import taxes on US products before this happened, and now they are only going up.
A grain of truth (onshoring more real production being desirable) doesn't really justify the "process" (which obviously isn't actually a process).
And the understanding of the problem exhibited being so infantile it can't even conceive of circular trade does not give one confidence that there's any sort of great game theory happening.
How did the Tech & Finance Leaders fall for this during the election? Amazing lack of foresight.
They are all crying for the audience, the losers.
But see how even WSB idiots could see this coming and they are making a lot of money on shorts. And the premiums are sky high, meaning the big players are shorting like crazy. Easiest money to be made in decades for the Wall Street sharks.
That's exactly what I've been doing. It was a no brainer. Made enough in 2 days to buy me a new car.
It's not THAT easy.
You don't know if there will be a u-turn. There's no logic at all to this administration, they could just announce the "Biden correction" is over and that the tariffs have now worked, plus the government is buying stocks.
Any fantasy scenario is possible.
If they do some corrections, the big guys will use it as a window to get rid of high risk investments onto smaller inexperienced investors riding the hype. That'll just blast the market further.
The confidence is gone. The risk is high whatever happens. The lowest risk strategy is now betting on market failure.
Notably, Warren Buffett essentially exited the stock market over the last few years because he believes all his investments were massively overvalued.
That does paint a pretty grim picture wrt potential stock growth, if this finally triggers the correction back to a more sane stock price (last I read about it, you'd have to hold the stock for 65 years for the investment to break even).
The current stock valuations are essentially based purely on the same mechanic that makes Ponzi schemes to successful... At least short term.
Yeah exactly that with Buffet. He was dumping Apple recently as well as he knows it’s going to burn when the AI hype crashes.
What I've been wondering since April 2nd is if this will be the nail in the coffin for the AI-hype bubble, everything is drying up very quickly, all those risky investments (hundreds of billions USD) in bullshit AI will be the first to completely go into the drain when everything else that is producing actual real value at present is going to the drain.
This stupids-in-charge administration might just have brutally popped the AI bubble.
I agree. I'm afraid I will lose an AI-driven app I count on daily (Aqua speech recognition). Bubble-popping cleans out the bad but also washes away the good.
> They are all crying for the audience, the losers.
There is an opinion that making them (a big business, and overseas players too), crying for audience is a way to make them loyal to a regime. So they come to the audience, they kiss the ring, they get some preference, and the regime becomes even stronger. I'd not name Trump crazy as some do, but simply a person presenting and promoting the interests of a certain entity. I won't name my guesses about the possible entity.
I would love it if you would. I can't promise how it will be viewed in this space but I find the best way to educate myself is to be wrong on the internet. :)
There is an unlimited amount of money you can lose when shorting stocks.
Not if you use put options like almost everyone. 99% of WSB are options trading.
That is gambling, not investing. And you can lose lots of money by gambling.
I don't believe it's the case, but what if Trump and friends are just wishing to play the markets and he will back off with tarrifs? We will see a massive short squeeze and lots of people taking huge losses.
Buying stocks expecting them to go up is also gambling. How many stocks pay decent dividend these days?
most stocks pay dividends. The others tend to do buybacks. The only exceptions are recently IPOd companies. All the big tech companies are returning capital to shareholders.
> That is gambling, not investing. And you can lose lots of money by gambling.
Most trading professionals would not call it gambling if you have positive expectation and a process.
Positive expectation properly and repeatedly executed over time is a business.
Would you say a casino is gambling by offering table games to customers?
> Most trading professionals would not call it gambling if you have positive expectation and a process.
Most gamblers have a positive expectation and a process.
It's not gambling capitalising on stupid people's response to stupid people. Watch the market open today :)
Shorting also isn't investing. Try and stay on topic.
For whatever reason, people did not believe Trump would be this crazy. In fact, people in the stock market still do not believe he is this crazy. If they did, the stock market would drop much lower. From what I've heard from people in finance, the bond market is indicating some economic growth this year. If this goes on, expect a financial crisis which rivals that of the Great Depression.
It's not a lack of foresight, it's just that they do not believe him or believe that someone will stop him. People have just misread Donald Trump and his intentions.
To be fair, he said he would do all this crazy stuff the first time but didn't. So there's some evidence for the position that he wouldn't do crazy stuff.
Also, it's hard for people to understand that someone in power might just not understand why their decisions are a terrible, terrible idea (see politicians and backdooring encryption for a tech example of this).
He didn't do those things, or he couldn't? Not too familiar with American politics, but AIUI his majority was much weaker last time round, possibly resulting in some of his crazy being kept under control?
Yes, he couldn't. Anyone paying attention knows he tried.
Well it was more that basically all the people he appointed talked him down last time.
This time he picked based on loyalty, so it's pretty much whatever he wants (apparently tariffs).
Yes the latest Goldman Sachs recession forecast is 45% probability, which is what makes it into the headlines.
However the report says this is assuming the tariffs won't go into effect. The flagship policy Trump just announced after going on about how the most beautiful word is "tariff" for four decades.
If they go into effect it goes higher. But why assume that the President of the USA will actually do what he just said he'd do in a big speech with giant printed props.
If you ever though any of these guys makes their money because they are smarter, just watch this:
https://youtu.be/bPdsN_YmP60?t=74
https://youtu.be/JOBs27jckCo
Trump was taking about tariffs, but nobody thought he’d take them this far, this fast.
To be fair, it makes sense that if his…plan… is going to work, he needs to get in it quickly. 4 years isn’t a long period of time and if the country doesn’t recover economically before then the next president will absolutely just undo whatever he did.
Even the midterms are a time limit. If things are bad enough then it would absolutely get people to vote for those that’ll take the power of tariffs back out of the president’s hands and back into congress’s.
It’s actually kind of a big flaw with our system as a whole. Countries like China can do more long-term plans without worrying about silly things like electability. In this case, in theory I think Trump is right to wave our big economic stick around. In reality it won’t work because everyone can just wait for his time to be up. Even if countries negotiate there’s no reason to think they won’t reneg in 5 years.
I think that you are ignoring Newton's 3rd law, which pretty much can be applied to economics in this case. What made the US really great was the fact that it was the center of the liberal world order and the coalition of friends that it built around itself, including the EU countries. Let's see how well the US does when it loses most of its friends. Focusing on the EU, the US wants to balance the goods trade deficit with the EU, but it has a services surplus with the EU. Goods deficit vs services surplus roughly balanced each other before the tariffs. Guess what we in the EU will need to do? In the end it will be loose-loose for everyone, but in the long run the then friendless US will be the biggest loser.
We do not want manufacturing jobs, they suck. America has an amazing thing going on where we can trade 1s and 0s in exchange for physical goods. We have an infinite renewable resource which costs nearly nothing to reproduce infinitely. We have a defacto monopoly on technology and digital services.
I understand the national security reasons for having a domestic commercial manufacturing base. However, there is ZERO economic reasons to bring back manufacturing jobs.
I hear this repeated, “we don’t want manufacturing jobs, they suck”. I work in manufacturing, and my job definitely does NOT suck! That short sighted western leadership were so eager to ship off manufacturing jobs to China has been a disaster for the west. I can’t be the only one who sees this?
> That short sighted western leadership were so eager to ship off manufacturing jobs to China has been a disaster for the west.
In what way are you quantifying this? Would you agree that the quality of life has improved significantly compared to the 1980s or whatever period you want to compare to?
For many people, no.
https://en.m.wikipedia.org/wiki/Rust_Belt
For many people, sure. I can always find exceptions to the rule. I am talking statistically. Fact of the matter is, the bottom 20% QoL has improved significantly, correct?
Frankly looking at many indicators it would seem large chunks of the US is doing terrible, not just the bottom 20%.
You now have enormous piles of debt, obesity, millions hooked on drugs, a blossoming private prison industry and a nation without a future?
I quote from Wikipedia: ‘In 2013, George Friedman, the head of Stratfor, wrote that the middle class' standard of living was declining, and that "If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated."[54]’
https://en.m.wikipedia.org/wiki/Standard_of_living_in_the_Un...
Looks like most of the gains since the 80s have been concentrated to the top.
Sure, but most of that has nothing to do with the loss of manufacturing jobs. It has much more to do with the tremendous transfer of wealth from the bottom quintiles to the top, enabled by the gutting of unions, the destruction of regulations, and the abandonment of any kind of effective antitrust policy.
> enabled by the gutting of unions, the destruction of regulations, and the abandonment of any kind of effective antitrust policy.
Isn't this what happened because companies moved their manufacturing to other countries?
Some, yes, but the cause and effect are somewhat blurred because both were happening over a long period of time. They each contributed to each other in a feedback loop, and I don't claim to be enough of a scholar of that period to know for sure which one started first.
If you were serious about improving the lives of normal people you would be voting for Bernie Sanders. Not the party handing out tax cuts for the rich, that is against the minimum wage and destroyed the pension system.
If you listen to Bernie's speeches, he talked about high tariffs too.
Link to a speech where he does this? I’d love to see receipts.
I’m not allowed to vote in the US. I’m not American.
> For many people, sure. I can always find exceptions to the rule. I am talking statistically. Fact of the matter is, the bottom 20% QoL has improved significantly, correct?
That's really a decision each person should make for themselves, and it was a big part of the reason Trump won the election. Most people don't think their QoL has improved.
Obviously the perspective here is different due to the success of the US software industry, but that industry only employs a tiny fraction of the population.
So the idea is to destroy 75% of the economy that is the service/tech economy? I'm sure that will work out well for all of us. He could have had more pro business, less regulations, trade agreements, but he didn't he just set the house on fire and wants to see what he can make out of the ashes. I guess we can all get jobs in construction to build the newest 3rd world nation on the world playing field?
The exception, of course, are the poor and lower working class who have no technical expertise or training, or would be unable to learn same... for those individuals the prospect of a manufacturing job is a step-up.
The types of manufacturing jobs which would be a step up would be high-tech and high gross-margins manufacturing (which we already do), not whatever crap China is producing. If you want the quality of life of a Chinese manufacturing worker - which is still much worse than that of a retail worker in America - sure. There is no basis in reality that the kind of jobs Chinese manufacturers would yield a higher quality of life for a blue collar worker.
Furthermore, those kinds of jobs are not long for this world. They're inevitably going to be automated away and the replacement jobs robotics maintainers are not ever going to be in numbers great enough to replace those manufacturing jobs. It's beyond stupid especially when you consider that the labor market was already incredibly strong at ~5% unemployment.
A lot of skilled jobs were shipped of to China, particularly heavy industry.
Then the solution is targetted tariffs such as the ones they placed on BYD, not across the board tariffs.
I keep hearing this BS, but unskilled manufacturing jobs are a downgrade from unskilled service jobs, and if official statistics aren’t lying, there’s been a growing shortage of unskilled labor in service. Expecting people without a skill and can’t even bother to flip burgers to want to do heavy labor in factories is ridiculous.
I don't believe that working on a assembly line is better than driving for Uber or delivering for Amazon.
An assembly line still gives you a path to management, and possibly insurance / healthcare and maybe a 401k or some retirement.
With gig work you get none of that.
Depends very much on the assembly line. Some are quite reasonable, especially in smaller firms where you don't have a completely detached management in their ivory tower passing efficiency edicts for grinding through disposable anonymous minions. You can't abuse your staff too much if you have to sit next to them in the canteen! It's not exactly stimulating work and obviously not a rockstar salary, but it's comfortable enough indoor work and you don't have to pee in bottles and have a psychopathic delivery schedule every day.
Wait till they hear that it pays $1.50 an hour, and if they dont make 1,000 pairs of sneakers every shift they dont get paid for the month.
That's why they'll find a way to make and label more criminals to throw them in prison where they will be out to work for those minimal wages...
I don't doubt part of making America great in their minds includes bringing debtor prisons back too.
So what you’re saying is, Trump fights for the poor and underprivileged.
Just wait until we ramp up the t shirt manufacturing. Dozens of dollars will flow. DOZENS!
>We have an infinite renewable resource which costs nearly nothing to reproduce infinitely. We have a defacto monopoly on technology and digital services.
That doesn't work for ever. And Trump was voted by the blue collars. So he wants to create more blue collar jobs.
We have the Senate for these long term decisions. But somehow it has become a useless bureaucracy due to the partisanship.
Technically the President is not allowed to dictate financial policy. The current actions are done in the name of “emergency”, bypassing the Senate.
> Trump was taking about tariffs, but nobody thought he’d take them this far, this fast.
Stop saying "nobody". People predicted this. The people who are blindsided by this dismissed the people who predicted it as crazy, hyperbolic doom casters. Yet today, when their predictions come to fruition, they don't even exist.
Here's a wild idea: let's start listening to the people who had the foresight to predict this instead of pretending they don't exist because it soothes our own egos for having missed this.
He's not doing tariffs though. He's doing some kind whacked out plan that he can somehow correct decades of trade imbalance with "tariffs" when all he can do really is start a second Great Depression by riding the nuke all the way to ground zero like Major "King" Kong in Dr. Strangelove
He has at most 3 to 6 months to get this sorted. After that a recession is all but guaranteed. His voters may not own stocks, but the people who own stocks are responsible for a huge part of consumer spending, and when they cut on spending, it is Trump voters who lose their jobs. As Cruz said, he has a very narrow window to not be wiped out at the midterms. I don't think anyone who voted Trump signed up for a recession.
>Countries like China can do more long-term plans without worrying about silly things like electability.
China always does long term and very long term plans and executes them. US, on the other hand, is much more agile and reacts very fast to changes and opportunities.
Probably the best strategy is a mix of both, have long term plans but be able to react fast when needed.
I’m about to sound like a China shill, but China reacts and executes very fast when they need to. A stupid example is both implementation and removal of pandemic protocols. The second society started protesting, they acted pretty fast.
This reminds me of an amusing anecdote in Dutch history.
In the late 1930s the queen of the Netherlands asked her prime minister if he had read a certain book written by the German leader. He had not.
not really, they had 4 years of trump before and they figured that was what going to happen. Instead his crazy train completely went off the rails and now he's just a bull in a china shop, showing his true level of idiocy because he surround himself with sycophants.
[flagged]
I probably have terminal "investor brain," but whenever this stuff happens my first thought is "my favorite store is having a sale."
Then I think about everyone that's getting hurt by this and kick myself for giving into my lizard brain.
> my first thought is "my favorite store is having a sale."
This gets repeated a lot, but unless you already had most of your portfolio in cash it’s not actually a net win to see a drawdown like this.
The course of the global economy was just altered. The best case scenario would be if the proposed tariffs go away completely, but even then the markets will be cautious for the next 4 years at minimum.
The market is down because the future prospects for those businesses just got much worse. Yeah you can buy them at a cheaper price, but their corresponding future output remains down as well.
It’s like seeing a thing you wanted to buy go on sale, but upon closer inspection it’s on sale because it became damaged and you’re buying damaged goods.
The best case scenario is that the administration pulls the “just kidding” card, reverses course, and claims some sort of victory while returning to the previous status quo. If that happens, stocks were briefly on sale even though they’re not rebounding back right away. However, if the administration digs their heels in and tries to push forward then the market is going to continue downward.
This isn’t a normal drawdown. This is a crisis with the leadership of the United States.
> The market is down because the future prospects for those businesses just got much worse. Yeah you can buy them at a cheaper price, but their corresponding future output remains down as well.
It should be noted that these moronic "buy the dip" claims are happening when Dow Jones is in a freefall, so the poor people who bought the dip on Friday will today wake up with a portfolio loss of >5% without the market even reopening.
It's funny when these chants take place when prices start to plummet. It's like investors are screaming for unwitting people to buy the bag off their hands.
> will today wake up with a portfolio loss of >5% without the market even reopening.
That's pretty much irrelevant unless you opt out next reopening. If you have your portfolio down 15%, 20% or 30% it does not matter. That's the short term picture. If you're investing and looking at how those numbers fluctuate to make decisions and panic you will lose money for sure. No different like going to the casino. You're supposed to buy and hold forever, regardless the market crashes or rises. That's Bogle's advice and I believe is sound advice. So, there could be an opportunity to buy lower now if you are playing the long game.
> That's pretty much irrelevant unless you opt out next reopening.
Not really. If your goal as an investor is to maximize your returns. Obviously, buying a security when it's value is cratering is the worst time to buy simply due to the fact that, in a scenario of an unavoidable bounce back, waiting out while doing nothing is more profitable. Buying earlier in the crash simply means the profitability of your hypothetical scenario is lowered.
> If you have your portfolio down 15%, 20% or 30% it does not matter. That's the short term picture.
I don't think you fully grasp the implications. Even assuming a simplistic interpretation of an unavoidable bounce back, if you postpone buying after the price craters 30% then you're guaranteeing your investment will be more profitable. Remember, the trick is to buy low and sell high, not buy high and hope it will somehow get higher.
Problem is that no-one knows when that's going to happen and it can bounce back as fast as it went down, meaning in that situation you would be missing the opportunity too. The investor strategy as per Bogle is simple: buy regularly, regardless the market and hold it forever (until you retire). I don't want to speculate, because that is known to be a losers game. I read some time ago "The Little Book of Common Sense Investing" and to me that seems to be good enough advice to stick with. It's simple and as for what I read from other sources it works.
> Remember, the trick is to buy low and sell high, not buy high and hope it will somehow get higher.
If you take a look at the historical S&P500 (1926-2016) trend even taking into account market crashes the curve always goes up in the long term. That's why Bogle's strategy works.
We can fall a lot more, and people who are buying the dip on credit aren't necessarily taking a long term view of the market. Who is keeping a few hundred K in their bank account just in case the market crashes so they can take advantage of it?
Also, 2008 you needed 5 years to recover if you bought at peak (buying as it was lower of course means less time to recover). In 1930, you were looking at 20 years. You could also lose your job if the market really tanks, and buying the dip just means you are less liquid at a time when you need money for living expenses.
You're assuming something like all or nothing. As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account. Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly. If people are taking credits to do that, well they are making an extremely risky move as well. Just because the market could go down doesn't mean that you have to make an all-in move.
> You're assuming something like all or nothing.
I'm assuming worst case, which is what you have to prepare to survive through.
> As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account.
You are supposed to have 3-6 months of living expenses in your savings account just in case you lose your job. Is that what you are talking about using to invest in a dip?
> Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly.
Yes, but you are also saving money for events where you need liquidity right?
If the tariffs go on for awhile and consumption becomes expensive, we can always just cut back on consumption and invest that money instead (Americans consume a lot anyways), that is what the Chinese have been doing all along at least (although they wished their consumers would start consuming more). We are basically going to swap places with the Chinese, the writing on the wall is clear.
To be honest, “buy the dip” is generally cope that people tell themselves.
The average investor isn’t sitting on a pile of cash just waiting to move it into the market. People investing periodically over decades have far more in the market than out. The “buy the dip” stuff ends up being a little bit here or there so they can convince themselves not to worry, not an appreciable swing in their portfolio.
"Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash.
> "Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash.
Not really. It's literally a call to action to counter what the market is doing, in hopes that it can prevent and recover trends. They are literally telling others to buy when everyone around them is selling.
My two favorite trading terms: “catching a falling knife” and “dead cat bounce”. You don’t want to buy until you’re sure it’s reached bottom. So you look for signs of rebound, but you can be fooled by a dead cat bounce. Because if dropped from high enough, even a dead cat will bounce before coming to rest.
Being able to do the opposite of what others do is a useful quality to have as an investor.
I don't tell random people to "buy the dip" because I don't want to be responsible for the myriad dumb ways people interpret that advice, but it's not at all an unreasonable thing to say to someone who knows what they're doing.
> Being able to do the opposite of what others do is a useful quality to have as an investor.
Textbook example of survivorship bias.
> To be honest, “buy the dip” is generally cope that people tell themselves.
I don't think so. "Buy the dip" is a call to action to third parties to irrationally invest their resources in a way that benefits you personally. It's a call to not believe what they are seeing, and that doing the opposite of what would be prudent or reasonable is somehow something that is in their best interests.
You already hear fantastic claims like "buying the dip is what rich people do to get rich". Yeah, buy low-sell high is good business. But that only works when you actually buy low. If you buy in when the freefall starts, aren't you buying high? How is that good business?
Buy the dip is what rich people do to get richer.
Rich people already had their money invested.
To buy the dip you need liquid cash sitting around earning very little, hoping the market goes down.
Reallocate portfolios if that makes sense, but much of the “buy the dip” stuff implies good market timing: To do it in meaningful amounts you’d have to pick the right times to not invest, accumulating cash at a lower rate, then you’d have to know precisely when to invest it again, switching it back into the stock market.
> Reallocate portfolios if that makes sense
Yes. This is one of the reasons 80 stocks / 20 bonds is a common strategy. The rebalancing "forces" you to buy low and sell high.
When stocks dip, your portfolio might become unbalanced at 70/30, so you reallocate funds to buy stock bringing you back to 80/20. Conversely, if stock market soars, you might get to 90/10, and selling stocks would bring you back to 80/20. Performing this balancing is, in effect, "buying the dip"
Survivorship bias
This opinion is even worse ^; Literally nobody can predict what the bottom is (except magically the group with strong political opinions /s), but what amazes me is people are willing to give out bad advice in an attempt to create a realization of the ideology.
Statistics say sitting members of Congress and their families are pretty good at knowing when the best time is to buy and sell. I wonder why...
Also true, hah. Guess they’re also just lucky
>This isn’t a normal drawdown. This is a crisis with the leadership of the United States.
The same thing happened just 4 short years ago when covid hit. Mass panic and then intervention kicked in. The intervention could have been taken away at any time but the market went extremely risk-on anyway and you would have gotten left behind if you sold out.
>but even then the markets will be cautious for the next 4 years at minimum.
You are overestimating the cautiousness of the market. Unless there are better returns offered in some other investment, the capital is going to pile back in if something like tariff deals start getting announced.
>>This isn’t a normal drawdown. This is a crisis with the leadership of the United States.
>The same thing happened just 4 short years ago when covid hit.
If by "same thing" you mean the market crashing, then yes, it's similar. But the cause of this isn't the "same thing" at all. For the next 4 years, the USA will have a president who wants to annex Greenland and Canada, who hates most (all?) US traditional allies and trading partners, who doesn't believe in free trade. The effects on the world economy are going to be slower to take effect compared to COVID, but they're going to be much deeper and long lasting.
The effects of covid were literally being talked about as the entire world economy grinding to a halt overnight. It was mass panic beyond high tariffs for a foreseeable future.
The market was in straight free-fall until all of the major govts stepped in to print trillions. It was like a light switch made the “end of capitalism” disappear in a day.
The rally back today on just a pause illustrates my point. No permanent fixes at all, just a pause and the market went up 10% in a day.
Who intervenes if it’s the leadership manufacturing the crisis?
Pressure from the electorate, business leaders and foreign governments could spur Congress to act.
> The same thing happened just 4 short years ago when covid hit.
COVID was a natural disaster. Leadership responded to it.
This is the opposite. Markets were going well. Leadership intervened to crash them.
Do you see the difference? It’s not the same.
> You are overestimating the cautiousness of the market.
You are underestimating the impacts of risk premia.
This administration just showed that they don’t know what they’re doing, but they’re willing to go all-in on disastrous economic policy. They’ve already waffled on previous policy and then came back and doubled down. They’re still talking about more tariffs.
This isn’t a little “oopsie” any more. It’s a pattern. It’s going to be a long 4 years until we can get back to stability.
> Unless there are better returns offered in some other investment
You are so close. It’s not just returns, it’s risk. Trump just made the market hyper risky.
Yeah, I think it’s worth emphasizing: we are in Month 4 and there’s already been an enormous amount of chaos.
We haven’t even seen the effects of the agencies getting cut. Sure they’re running for now, but burnout can set in quick for the remaining employees and some YC investor-clown’s delusional dream of an “AI” workforce isn’t going to save us.
I’m just one fish in the sea of retail investors but I won’t be in any rush to convert cash savings into investments with this current trajectory.
Besides, cash is infinitely more useful for my mortgage payments — especially if layoffs in the private sector start.
> we are in Month 4
I know this is shocking, but it hasn't even been 3 months yet. 2 months and 18 days.
The market returns today should make you re-evaluate your position on this. Anyone following your thesis would have sold out at the bottom.
>but they’re willing to go all-in on disastrous economic policy.
They did it to stem the covid bleeding too.
>It’s not just returns, it’s risk. Trump just made the market hyper risky.
What market do you think Trump didn’t make risky that this capital will flight to? All kinds of bond default risk shot up across the board as well.
The covid crisis was an actual event in physical reality not caused by admin policies.
This crisis is the admin taking a sledgehammer to international capitalism. No obvious intervention other than "stop doing that".
I'm sure at some point the fed would have some kind of response but inflation of tariffs is a huge risk and that limits what the fed can do unless they have co-ordination with the admin.
> The covid crisis was an actual event in physical reality not caused by admin policies.
Sortof yeah, but also sortof not. Basically any non-Trump president would have been briefed about Covid in January 2020, and most of the previous ones invested a bunch of resources into making sure that the disease was contained far away from US shores.
Even Bush II would have done that (and did, I believe for SARS).
It's a possibility. SARS II was much harder to contain though. The first SARS actually made it to North American hospitals, but was contained. It didn't spread in the populace.
Once SARS II made it out of China, only globally coordinated net 0 case policies could have stopped it. I think it would have been worth trying for but there was no appetite for it.
> It's a possibility. SARS II was much harder to contain though. The first SARS actually made it to North American hospitals, but was contained. It didn't spread in the populace.
Totally fair, but as I recall he didn't even try to keep it away from US soil (which had always been the CDC approach).
COVID keeps getting brought up.
Let's remember that it was much worse than it had to be, because the same President actively causing this current catastrophe thought he could just ignore the problem and it would go away.
> (...) the capital is going to pile back in if something like tariff deals start getting announced.
What leads you to believe that scenario is realistic?
I mean, the list of US trading partners is dominated by less than a dozen trading blocks: EU, Mexico, Canada, ASEAN, China. That's it. Trade with India is as significant as trade with Italy alone, and a massive deal with them would barely move the needle in this trade war.
Unless the US somehow makes it's own trade war go away with the likes of Canada and the EU, there is no bright outlook for the market and economy. Trump's administration is repeatedly threatening both with annexation.
To make matters worse, do you really believe any trading block will move back to preserve economic ties with the US after this mess? Not a chance in hell.
The EU, which thanks to the Trump administration is already scrambling to prepare for a war with Russia, is excluding the US from supplying them arms. This is the extent to which these trading blocks are going to shed ties with the US.
Do you think things will just go back to how things were 6 months ago? The Trump administration ensured this is impossible.
> the list of US trading partners is dominated by less than a dozen trading blocks: EU, Mexico, Canada, ASEAN, China. That's it.
ASEAN countries are eager to make a deal. The USMCA deal is still in tact with Mexico and Canada.
> The EU, which thanks to the Trump administration is already scrambling to prepare for a war with Russia, is excluding the US from supplying them arms. This is the extent to which these trading blocks are going to shed ties with the US.
Germany is in an energy crisis and a few other members are close to a sovereign debt crisis. Domestic production of weapons will be tough and expensive. The EU’s plan to sell bonds to pursue war with Russia looks horrid. They’re in no position to be in a trade war. In a few months time when this reality sinks in, they will have to make a trade deal and remove US tariffs.
> Germany is in an energy crisis and a few other members are close to a sovereign debt crisis. Domestic production of weapons will be tough and expensive. The EU’s plan to sell bonds to pursue war with Russia looks horrid. They’re in no position to be in a trade war. In a few months time when this reality sinks in, they will have to make a trade deal and remove US tariffs.
This really, really depends on how things evolve this week. Like, the EU will 100% tarriff the US (and probably China to prevent dumping) this week.
The big question is whether or not they use the Anti-Coercion Instrument, and hit US tech and financial services. Selfishly, I hope they don't (as I work for a US fintech while I am based in the EU), but this will probably happen if Trump retaliates to this week's sanctions (which he probably will).
This is gonna get a lot worse before it gets better, unless there's a unilateral pullback on the part of the US (which seems very unlikely).
> (and probably China to prevent dumping)
But why does the EU even want a manufacturing sector, don’t you all realize that no sane person wants those jobs? I kid, of course.
It’s truly a sad state of affairs and I hope that we all come to an understanding this week.
> But why does the EU even want a manufacturing sector, don’t you all realize that no sane person wants those jobs?
Why do you equate responding to Trump's tariffs with "want a manufacturing sector"? Trump is pushing the US to isolate itself from the world, not the EU. A few years ago the likes of Volkswagen were investing in auto factories in Morocco.
> What leads you to believe that scenario is realistic
It literally just happened today.
Makes no sense whatsoever. I bet you did not think the course of the global economy was also altered in the many rallies before this crash.
I'm bouncing between this and thinking that "this time it's different". You can reverse tariffs policy, but a lost trust is very hard to repair.
> You can reverse tariffs policy, but lost trust is very hard to repair.
Indeed. That's especially true on the NATO side. This is a historical event on the scale of the breakup of the USSR.
> Indeed. That's especially true on the NATO side. This is a historical event on the scale of the breakup of the USSR.
Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
In March 2020, people were convincing themselves that the global economy was flying straight into the ground, but people who didn't lose their minds made a lot of money, quickly.
IMO, there was a better case for that panic, given the context (they were partly right! the lockdown stuff was incredibly costly!), than there is that this particular spasm is meaningful. Only time will tell.
> Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
I don't think you fully grasp the gravity of Trump's actions.
For the first time in its history, NATO is excluding the US from arms purchase programs. This takes place at a time where the EU is scrambling to prepare for a war with Russia, which is also caused by Trump's action of abandoning it's allies,
The Trump administration is also heavily invested in annexation rhetoric targeting multiple NATO members.
Then there's the whole tarrif absurdity.
These sequence of moronic steps individually represent world-changing events. They all took place in a couple of months into the Trump administration's takeover.
This goes well beyond the suspicion that Trump is a Russian stooge. This changes the way the world was structured after WW2. The fall of the soviet union might even have a smaller impact in world history.
> I don't think you fully grasp the gravity of Trump's actions.
I "grasp the gravity", to the extent that anyone is actually able to do so at this time. I am unwilling to engage in hyperbole in order to create the illusion of a nearby black hole.
This is a non-partisan reaction. I am opposed to tariffs; I am also opposed to panic and exaggeration.
> This goes well beyond the suspicion that Trump is a Russian stooge.
Your choice of neutral, unbiased language is compelling.
The first man on the moon, the breakup of the Soviet Union, September 11 - these were all things that people predicted would be monumental world-changing events at that point in history, and also proved to be after the fact. Maybe history will prove us wrong, but this feels like one of those moments to me.
I mean we correctly estimated that the breakup of the USSR was a big deal without hindsight.
People who didn't panic during the covid crash made money not because they understood the situation but rather because the money supply went into the stratosphere.
In many ways the spasms we have seen globally the last few years are all downstream of the lockdowns and their damage.
The closest modern analogy might be Liz Truss’ short tenure in the U.K. Her actions paled in comparison to this absurd tariff situation but the only way to resolve it and restore confidence was for her to resign.
The problem in the US is that the tariff situations is bonkers insane, was clearly not thought out at all, and the person controlling the strings is talking about ways to run for a 3rd term instead of considering resignation.
This is a political crisis. The best we can hope for is that the Senate pushes forward with attempts to reign in the president’s tariff powers and the House actually goes along, which is unlikely right now.
I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
Yeah really, Truss really is the most salient yardstick, with the complication that any analogous action in the mechanisms of american politics feels slightly unfathomable. And I was shocked enough at Truss' ouster.
It's all so divisive, but it frustrates me to no end that likely the biggest end that people trying to defend this, without any admission this is a crisis of confidence waiting to happen if it's not already there.
The amount of political capital immolated for the sake of this course of action is flatly embarrassing. It doesn't really matter what they want or how long they think it's going to take to get it, the damage is already done.
> I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
This is already happening. The snag is, until the break adds up to a 2/3 majority in both House and Senate, a presidential veto of a bill reversing the tariffs cannot be overridden. And to get to 2/3, a lot more pain is going to have to be felt in Trumpland.
> I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
Been hearing that weekly for 8 years. If everything before this didn't trigger significant action, I doubt this will.
This.
When people this committed to crazy are shown [more] evidence, they just double down.
If people start turning against Trump, Congress will follow. Look what happened after the 2022 terms. Dems over performed and everyone immediately tried to make Ron Desantis a thing.
Sharks will always be in the water around Trump waiting for him to slip. The question is, will Independents(maybe even some of the base) shift hard away when they start feeling the pain of the tariffs.
[flagged]
Loss of trust and finding other sources for the things they used to buy from the US, perhaps even producing those things themselves and becoming a new competitor the US didn't have before.
I really doubt they will reverse things. It will take impeachment or a new election before they admit they were wrong.
I strongly suspect they still wouldn’t admit they were wrong.
If it's reversed faster than alternatives are in place, then it won't matter too much if the trust is there because what alternative is there? The logistics and stuff take time to change. If it persists long enough, then the trust piece will be more of a factor.
The alternative is to not spend and not invest and not hire because confidence is down and policy uncertainty is high, leading to a recession.
Mone of that really has to do with the tariffs. Consumers will continue to buy what they can afford. This won't reduce that much, probably by about 5% is my guess based on multiple factors. Most healthy companies will continue to operate just fine. Market confidence is down, but it's been fragile due to it's overvalued state for a while. Aside from tariffs, policy outlook is very business friendly.
This mostly a market overreaction or correction from being overvalued if we look at the past. This Chinese trade war has been going on since Trumps first term (at least). The rates on the top import/exports have been around or over 25% for a while. It's also interesting how much China is hurting itself with pork. The Chinese own Smithfield and are a huge importer of pork from the US, yet they slapped an 80% tarriff on it?
The lost trust won't affect the price of eggs or Honda Accord in Waukeekee
It will affect if people buy a Honda they don't 100% need right now, or keep emergency money in case things go worse. Which on larger scale will still affect prices of everything.
Every time this happens people say it’s different. See: COVID pandemic. And we know the V shaped recovery that came after that. Of course that shouldn’t be interpreted as a predictor of what’s to come next (because it’s not), my only point is to say that the same rhetoric pops up frequently during downtowns since forever.
This is different. It was entirely avoidable. Entirely predictable. Entirely preventable.
Hell, it’s mostly reversible if the administration would own their mistake. But they won’t.
That’s the problem: This is not a natural disaster or even a reaction to a market-created crash. It was orchestrated by the people who were supposed to be doing the opposite.
I don’t believe claims that the United States is doomed or other hyperbole. I do believe that this is firmly different than anything we’ve seen in our lifetimes though.
After the initial COVID phases nothing major really changed long term as far as the world balance goes though. Everyone got affected, everyone started recovering. Things may have been uneven, but not like now, right?
That's his point. In the moment, everyone panics and thinks XYZ catastrophe is the end of the world as we know it. In hindsight, it never is.
But who knows?! Maybe this is the time...
> In hindsight, it never is.
Up until WWII happened I doubt many people would have believed that sort of death and destruction was right around the corner. They'd just had WWI and weren't expecting that settling the unsettled business from that would be around 3x worse, break the European colonialists and ... I don't know how wiped out Jews in Europe were, but it was a painful experience although I assume some survived. The property damage was also extensive.
High tariffs isn't going to be the end of the world & this particular stage of crisis doesn't look very important. But the overall geopolitical crisis we're in as everyone realigns certainly could end the world as we know it. Both in the literal and worst case senses. Few went in to WWII chuckling and saying that they were going to break their own power permanently, but that is what a lot of participants ended up doing.
Just a comment, every catastrophe has victims, survivors, and lasting consequences. I didn't mean to trivialize that in my response. Regardless, life goes on.
In the sense that members of the human race will survive, sure. That Woodward book out recently was suggesting a double-digit chance for a nuke to get used in Ukraine. Hopefully he is prone to making things up - seems possible that life would not have been going on in at least some regions.
I simultaneously take comfort from the fact that no-one else seems as worried as me and dread from the fact that it'd be the 3rd world war that people just walked into because they weren't taking the threat seriously enough. We appear to have been watching insane policy come out of the US diplomatic establishment for a good decade now. And the crisis is still escalating.
A disease did that. Nobody knew the details, there was fear it wouldn't stop. The markets groaned and creaked under the weight of the fear and uncertainty. But with the vaccine and the reduced lethality of new strains, a disease becomes a nothing. Recovery began because nothing was in the way, the bad thing was gone.
The people in charge of the government did this. The people who will still be in charge of the government. The bad thing is not gone. The bad thing has no end in sight. And the bad thing is doubling down.
The bad thing is saying it’s no problem to stick around for a third term and beyond, and that it wants to go to war to annex territories from the closest trading partners who might be able to mitigate the impact of the trade war.
The cause really was not the disease and even loss of life from it. It was actual real world disruptions shutting down normal operations. Lockdowns, quarantines and so on. Goods stopped moving. So it is obvious that trade would slow down and thus profits would be hit, directly leading to stock prices correcting.
At the time, there was trust that the government wanted to assist the recovery. They have lost the benefit of the doubt. This actually feels malicious.
With Covid, recovery came as Covid was removed. With Trump, recovery can come with…
Did anybody actually “trust” other countries to start with? I’m reminded of the cynical yet accurate quote that nations don’t have friends, they have interests. I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests, it seems admin doesn’t know?) and foreign nations to do the same.
This point is especially hollow because it is true that many countries have maintained asymmetric tariffs on us. Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them. I’d take their cries of “lost trust” more seriously if they hadn’t shown with their actions they will pursue their own advantage too.
> Trade deficit aside, we shouldn’t
US has been very successfully exporting its debt (quite literally, almost no other country can run such high deficits for so long) and services.
What do you think happens with all that money if Americans can’t buy those cheap imported goods anymore?
Also other countries like China or Japan won’t be able to continue buying US bonds. Basically Americans are getting free stuff funded by debt they are never going to pay back and still you have people whinning…
> larger %
US decided to charge e.g. 15 times higher tariffs on the EU than the EU does. You believe that’s even remotely reasonable?
Or do you actually trust Donald’s table that they made to confuse clueless idiots?
Successfully? We blew 3.1% of our GDP on debt service alone in 2024. This is insane, irresponsible, and unnecessary. We are mortgaging our children and grandchildren’s futures. Just like young folks like me correctly complain that old people are leeches sucking America dry - social security, medicare, housing price subsidies, decade after decade, despite a what, $1.7mm average net worth - my generation shows no signs of doing anything differently. “Screw them kids. Boomers got theirs, I’ll get mine.” If our interest burden keeps growing from 20% of federal revenues we could end up spiraling into more and more debt. Or worse we could get to a place where the fed can’t feasibly raise rates to level out the economy and moderate inflation because that would balloon interest payments to a ridiculous degree.
Where Trump is fundamentally correct is that a trade imbalance means selling pieces of your country off to compensate. Equities, bonds, land. All a claim against future money that sucks those returns out to go to foreigners. America has been lucky in the past, in that the huge market for dollars helped us avoid some of this, but that’s not a limitless solution.
Obviously the answer is not that we must make Nikes here. It’s also not that we must have zero trade deficit with any single nation. But we probably should focus on exporting more advanced goods and more services to bring our overall trade deficit down, focusing on a net zero or overall trade surplus outcome.
> We blew 3.1% of our GDP on debt service alone in 2024
As long as GDP growth outpaces (or is even) the increase in debt it’s not a big issue. Some spending cuts and mild tax increases (maybe not so mild for the higher brackets) would solve that.
> focusing on a net zero or overall trade surplus outcome.
If you looked at the countries pursuing such policies like Germany or Japan they haven’t been doing that well at all over the past 20 years. Basically no real growth and they are permanently stuck in the early 2000s. US on the other hand has been doing extremely well (lack of redistribution is another issue).
What projection suggests GDP growth will be even with the increase in debt? FRED data suggests the opposite is happening: https://fred.stlouisfed.org/series/GFDEGDQ188S
Debt growth is massively outpacing growth in GDP. You're right that it's less of an issue if we grow quickly and effectively keep leverage the same but that's not what's happening.
Germany and Japan haven't focused super heavily on achieving a trade deficit. As you said, Germany has huge problems with her welfare state and Japan has huge demographic issues. I'm not saying we should achieve a trade balance by tariffing everything to death; I am saying we should focus on faster growth to get there and reduce our insane level of consumerism. I don't have an issue with a temporary trade deficit for growth-oriented reasons, but I have little save contempt for people ordering packages of chinesium temu crap.
> Germany and Japan haven't focused super heavily on achieving a trade deficit
They have. For Germany maximizing their trade surplus was one of their primary goals for many decades. Amongst other things that’s why they accepted the Euro (easier than devaluing DM).
> As you said, Germany has huge problems with her welfare state
I never said that.
And Germany specifically has quite low government debt and a very high trade surplus. Yet.. it’s not doing better economically than the US. Welfare hardly has much to do with that.. e.g. US government excluding all private spending spends about the same as Germany as % of GDP on healthcare. Total social spending is not that massively higher either (~23% vs ~28%).
> ordering packages of chinesium temu crap
Sure, but that’s by and large insignificant. If we look up US imports by category consumer goods don’t really make up that much.
Also, I don’t really see how can tariffs do much besides lowering productivity and increasing prices.
Like that complete nutjob Lutnick said they want “millions and millions of people in America screwing in little screws to make iPhones”. That just makes no sense, you want to minimize the amount of easily outsourcable low productivity jobs in your country.
The “reciprocal” tariffs are nothing close to reciprocal. I hope you know by now that the numbers Trump presented were not actual tariff numbers that other countries put on us.
The trust issue is domestic, too. Businesses just got slapped with the largest tax increase in history at home. Pointing fingers at other countries is a distraction. It’s ridiculous to think that this will encourage companies to start building factories here when even the raw materials are now heavily taxed on their way in to the country. Any sane company is going to pause US factory investment until there is some clarity and predictability.
I think I miscommunicated my support for some trade policy change as support for Trump’s “liberation day” tariffs. Here are things I think we should fix:
- America and Hypotheticalstan each export $1T to each other with a bunch of tariffs on various things. America raises $50B in tariff revenue on Hypotheticalstan’s imports while Hypotheticalstan raises $100B on American imports.
- America doesn’t make enough defense-critical stuff: steel, solar panels, chips, aluminum, rare earths, etc.
- America has a ~$918B trade deficit.
Things I do not care about:
- Vietnam makes our Nikes.
- We have a trade deficit with specifically Vietnam.
> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.
Why should you care how much another country charges its residents to import stuff from the US?
Just sell at the price you want to sell at and who cares what goes on after your goods land.
> Why should you care how much another country charges its residents to import stuff from the US?
Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.
> Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Sometimes it's hard to tell if the US public is even aware of this. I mean, what is the point of tarrifs other than raising the prices in the domestic market of imported goods and services? That's all they do.
The rationale from the perspective of the central government is that this will finally make foreign goods and services uncompetitive with regards to domestic alternatives, and thus will finally render them viable. But that childish assumption is based on so many absurd notions that are plainly unrealistic. The only thing that's real is the direct impact of tarrifs: increase the price of goods and services in the domestic market.
I think the problem is that because of the huge disparity between the cost of imported and domestic goods which has developed over decades, the choice that people face is not 'oh, now imported goods are a little more expensive, I will instead buy American', it's 'now I can't afford to buy anything at all.'
You have to get more money into the hands of the consumers in order to be able to implement something like this.
> Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.
And with this, we’re almost getting to realizing why tariffs in the United States are a bad thing.
Cutting off your own nose to spite your face.
Wine is a good example because it’s not fungible: one bottle of red wine is not like any others. If you have a domestic wine industry, it likely can’t compete on quality with French wine.
So if France can export wine at a price that’s reasonable enough, your domestic wine industry will fail, undercut completely by cheap French imports.
Tariffs in and of themselves are not all dreadful. They help level the playing field and support domestic industry.
But you can’t go from decades of offshoring manufacturing to suddenly charging punitive tariffs without making imported goods (which were the only ones your citizens could afford) much more expensive, and therefore, yes, folks might buy wine less often altogether.
IMHO it’s pretty fungible at least outside the high-end stuff. Most people would hardly notice where the wine comes from (aside from specific types of grapes and such)
I'm surprised to hear that. In my experience, most people tend towards the other end (believing themselves to be connoisseurs, etc.) rather than 'just give me the house red'.
Yeah, but they mostly can't tell the difference in blind tests.
Because tariffs aren’t actually a good thing. If you hurt my producers by $1, I should hurt yours by $1 to maintain some level of credibility in our repeated game. If I don’t punish foreigners for tariffing my guys they have no incentive to reduce or remove those tariffs.
I don’t actually care about t-shirts being made in china. That’s not an industry that matters at all. I do care about china closing her entire market to American tech, for instance.
If you start looking for justice in the world economy, you've already lost the game. The only thing that matters is money. You can stick tariffs on left, right and centre, and all you'll end up doing is pushing goods out of the hands of your consumers.
You can try to 'hurt' another country's producers, but they're likely to just go and find another market for their goods.
I'm not really looking for "justice", I'm looking to uphold our interests. I don't particularly care if we raise more revenue than some other country does from our imports. I don't think tariffs are the best or only weapon to fix our problems. I do think they have a place, that selling off more and more of our country via trade deficit is unsustainable, and that our priorities as a nation are beyond screwed up.
Looking at the stock market, do you believe that tariffs are upholding US interests?
> I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests
I think that's the thing — you plan in business for people to operate in _their own_ best interests. If people stop doing that & their behaviour is volatile, then you're going to put your own mid-term plans on pause until you know what's what.
> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.
Is that happening, trade deficit aside, & when you factor in services as well as goods?
You could start making stuff we're willing to buy. I'll give you a qick rundown of what Europeans might want:
* no junk food, no weird GMO garbage. * road-legal automobiles, no EPA-workaround trucks with shoulder-high hoods. * advanced tech hardware gadgets. * entertainment * no, we're not particularly interested in guns.
Tell me what exactly what aren't we already buying from the US, when it's competitive: quality food we have our own, sorry; cars, well you've gone down a crazy path since I can remember; hardware, well we do, except you chose to offshore manufacturing; entertainment, we do... a lot; guns, be honest, you know you have a problem, not us.
So what's the point of this tantrum?
To be fair, the US exports a lot of services to the EU. For some reason these weren't included in the calculations shrug. As an aside, it's hilarious to see loads of Europeans saying that they never use any US products on a bunch of US owned products.
[flagged]
Europoor? My apartment in Amsterdam is way “poorer” than whatever this is, but hey I love my canal view: https://www.reddit.com/r/zillowgonewild/s/RlIauTsaqD
Also, last weekend my son had some weird intestinal flu we couldn’t figure out and ended up visiting the weekend GP. You think we had to pay anything (besides the slippery-slope-ish, pice-controlled, Dutch health insurance system)?
So yeah, I might earn 1/3 an SF developer, and yeah — the startup scene can be frustratingly sterile — but I can afford to not need a Tesla Juniper, though I really love it when I lease it for travel.
And yes, we do do innovative and cool stuff, we just don’t exit with billions.
cali is the butt of half the jokes in America for a reason. i'm glad you like your view though. i'm glad you like your government insurance but my private health insurance is also very good and i don't have to pay much (if anything) for things like that. i'm also alive today thanks to good private insurance and the level of care it afforded, the range of specialists i could see, which most government-run systems would not have covered.
if y'all are content, fine i guess. but it is true that the current european model is sustainable. the FT ran a good piece recently discussing how America reducing or ending the indirect european defense subsidy, combined with slowing growth and an ageing population, means that model must come to an end. i don't begrudge you the years you enjoyed it but certainly not for me.
you were saying you think no GMOs, smaller vehicles, banned guns, and less money are worth this. i think that's a terrible way to live and would hate doing so. my objection was precisely to you applying your lens and values to America, American values, and our way of life.
I’ve had to shut my mouth hard the past week. I went heavily short right before the “liberation day” announcement and doubled my port. My buddies in finance, or my buddies who work elsewhere but whose accounts look rough, don’t want to here me enthuse about the nutty multiple expansion finally reversing so I can take my cash and buy at sale prices.
"Be greedy when everyone else is fearful" isn't just a recipe for profit; it also acts to reduce the size of market crashes and thereby make people get hurt less. Give in to your lizard brain!
The caveat being if you have even a coarse-grained sense of market timing, this works strongly against your own pnl. The optimal strategy is to long the bubble, short the correction, then long the recovery. It’s not possible to do perfectly but you can often sell for part of the way down and skip some of your losses before buying back in. This generally would increase vol but is personally advantageous if you can do it.
It is incredibly to “follow your lizard brain” and destroy your returns. Selloff? “Time to be greedy!” Whoops, caught that falling knife with your hand. Maybe it’s a V-shaped recovery a la corona. Maybe it’s a decade plus like the Nasdaq post-dot-com. Rally? “Time to be fearful!” Wait, it keeps going up? Do you get more fearful? Do you sit in cash for years amidst inflation and high returns?
Where does the cash come from if you’re invested? Are you just keeping huge piles of cash around in low interest accounts in the hopes that a black swan event comes along?
If you had a balanced portfolio a week ago, you're almost certainly overweight bonds today. Rebalance to your target weights and you'll be buying equities.
> Where does the cash come from if you’re invested?
The next paycheck. I don't go all in to one thing, but shift where it goes depending on what's generally going on.
Yeah. I have 5 years salary in cash, and know many people who also pulled out of the market over the last 6 months.
Hell, warren buffet is sitting on 350 billion in cash waiting for this exact scenario.
Wow! Even with the crash, wouldn't you have been better off getting the last five years of gains, especially given interest rates didn't match inflation?
I was curious, so checked - $500,000 in VOO 5 years ago would have been 1.18 million today - already accounting for the crash so far. The market would need to crash an additional 60% starting with the next open to get you back to your $500,000 break even. Maybe this will happen, but that's quite a fall.
I'm not saying I have been sitting on them for 5 years, just that they are in cash now. 10/10 agree sitting out the last 5 years would be a mistake.
How do you know ahead of time when to pull it out?
You make a personal evaluation that differs from the market and you act on it. You need a model of the world and to believe it is more accurate than the average. A lot of people felt the market was overvalued and would correct during the Trump presidency.
You of course sold all your stocks beginning of November because you knew a deep crash was coming and wanted to be ready to buy into it. And now you have a lot of cash.
If my favorite store went on sale, I'd be especially happy if the sale never ended and the prices never came back up.
But it's hard to feel the same way about my investments.
Makes me really think what is being sold. A significant discount in stock that continues paying dividends would be actually be reasonable. More return for same money.
But many stocks are more so collectibles... Value going up for sake of it...
The phrase "don't catch a falling knife" has been uttered quite a lot the last few days
The market can keep falling until Trump pulls the lever back or enough of his pet legislators are willing to override him. As a long-term investor, I'm not selling. But we have no idea where the bottom is.
The market is still pricing in the optimistic scenario of tariffs being repealed, either by supreme court (e.g. on the non-delegation doctrine), by congress veto (13 more Republican defectors), by impeachment, or by Trump changing his mind.
If none of these four scenarios come to pass, the market will keep dropping as these possibilities get priced out and the remaining scenarios (escalation or maintenance of the tariffs) become more likely.
> The market is still pricing in the optimistic scenario of tariffs being repealed
"The market" has no idea what the impact of the proposed changes are. Setting aside the obvious questions about whether or not this stuff will even happen, it's just not possible for something this complex to be evaluated so quickly.
This is panic. People are wildly guessing about the "worst case scenario", without any detailed understanding (or even data) on what might happen [1,2]. It's all speculation, but lots and lots of people love to write horror stories for clicks and points.
[1] Just for example: what does it even mean for an "X% tarrif on all products from country Y" to be imposed? The Harmonized Tariff Schedule is hundreds of thousands of line items, each with a different rate. Are they all being replaced with a single number? Is that line item number being multiplied by a factor? Something else? I guarantee that almost nobody knows the answer to that question right now. I'm not even sure an answer exists.
[2] This is the only thing I've found that comes close to answering the question: https://hts.usitc.gov/reststop/file?release=currentRelease&f...
Starting just from the first line item leads to a branching set of changes, many of which have exceptions and dependencies on other changes:
https://hts.usitc.gov/search?query=9903.01.25
Working through that changeset is a non-trivial operation, and then, working through the impact on something as detailed as a supply chain for any non-trivial product is immensely complicated. Now do it for every product.
> "The market" has no idea what the impact of the proposed changes are. Setting aside the obvious questions about whether or not this stuff will even happen, it's just not possible for something this complex to be evaluated so quickly.
This is just false. Countless people were busy running scenarios based on the expected range of tariffs. It wasn’t a surprise that tariffs were coming. It was a shock that they were so insanely high and that the people putting them forward were so clueless about it.
> [1] Just for example: what does it even mean for an "X% tarrif on all products from country Y" to be imposed? The Harmonized Tariff Schedule is hundreds of thousands of line items, each with a different rate. Are they all being replaced with a single number? Is that line item number being multiplied by a factor? Something else? I guarantee that almost nobody knows the answer to that question right now. I'm not even sure an answer exists.
You’re projecting your own lack of understanding on to everybody else. The changes have been out already and any company that does business has already read through the documents.
Just because you don’t know or understand doesn’t mean that nobody does.
> This is just false. Countless people were busy running scenarios based on the expected range of tariffs.
Appeal to authority ("the experts did the math!"), but OK...
> It wasn’t a surprise that tariffs were coming. It was a shock that they were so insanely high and that the people putting them forward were so clueless about it.
Right. So...they didn't do these scenarios. Which means (repeat after me): everyone is guessing.
Even if I accept your appeal to authority, and even if I assume that their "models" are sufficiently good to predict the future in a chaotic unfolding scenario involving dramatic changes to a complex global trade system [1], I basically guarantee that the average market player is "vibe trading" right now, not working from these models.
I'm not saying that it's impossible to work out the answer. I'm saying that takes time.
[1] LOL.
Also, no one seems to be taking into account that most countries are in active negotiations to reduce or eliminate the tariffs. So the US may end up getting something else in exchange for them being partially or wholly lifted on countries where a deal can be made.
Unclear if Trump would accept that, given (1) that these tariffs are being imposed even on countries without tariffs on US goods and (2) statements by other members of the admin: https://www.newsweek.com/vietnam-offer-remove-tariff-trump-t...
I'm don't understand the disagreement because it's not like I'm saying that markets perfectly price all available information.
Even if securities are not priced perfectly accurately, it's still a fact that investors know that Trump might change his mind. It's still a fact that investors know that the Supreme Court might strike down the tariffs. These optimistic possibilities reduce the amount of panic and reduce the magnitude of the drop.
If the Supreme Court ruled against the lawsuit brought by New Civil Liberties Alliance tomorrow then the market would drop even more than it otherwise would, because it makes it even more likely that the tariffs will remain.
> I'm struggling to understand the disagreement because it's not like I'm saying that markets perfectly price all available information.
You're being sanguine about the power of markets to react to short-term change. Basically, "all available information" consists, at this time, of what I posted above. Be honest: what can you infer from it regarding the "correct" level of price change in the S&P500? But that's too ambitious: what's the correct level of price changes in, say, machine screws?
You can't know the answer. Nobody can. The best any particular expert analyst might be able to do, right now, is to speculate about the impacts of the top-line tariff rates on a given company's product prices. But they cannot:
* know if those prices are correct
* know how the pricing of other products (which they don't analyze) will materially affect those pricing models.
* know what compensating strategies the company might employ
* know the costs of those compensating strategies
* know the impacts of the price change on the market demand for the product(s)
* know the impact of the price and demand changes on margin
...and so on. There are so many unknowns here. Even the most informed analysts are just wildly guessing based on headlines and vibes. I have 0% faith the "market" is currently providing a useful estimate of the impact of these changes, and I have 100% certainty that the people confidently asserting things (like a market projection) are fools, or simply talking their book.
Right.
> 13 more Republican defectors
In the Senate, but we still need an even bigger chunk in the House.
For me, it's trying to gauge how deep the rabbit hole is.
Yes, I'm tempted to buy the dip but as a novice how do I know I'm not just hopping in the down elevator.
Keep track of where it has been; you don't need to buy at the absolute lowest point, if it creeps back up you can slowly buy in again.
Have a look at trackers like the S&P 500 after previous crashes, it takes 3-6 years for the market to return to its previous highest value. Or six months in the case of the panny-D crash.
Experts also do not know the answer to that.
One way to do it is pile into something with strong fundamentals you think will survive.
Be the first into a rowboat that’s not leaking. Others will join you.
Eh, just invest in the volatility.
It being your favorite store implies you buy there a lot, which means you're already losing out so I don't get your reasoning.
I also try to think about things this way. Be careful though. When the stock market crashes everyone is negative and the pressure is on.
How many times have you "bought the dip" in the last 30%?
Well that includes you getting hurt too so don't feel too bad.
Cool, what are your trades going to be tomorrow?
Same. Sounds like the next four year will be nice to buy on a discount. I’m okay with that.
As for people getting hurt, yeah, that sucks.. but you should never invest what you can’t miss..
> As for people getting hurt, yeah, that sucks.. but you should never invest what you can’t miss..
You do understand that pension funds are financed through these investments, don't you? This means that the people who will be hurt the most are those who didn't invested. It's not the billions that Bezos and Musk lost that's painful. It's the old mom or pop who worked their whole life and now can't retire because their pension doesn't allow to survive.
And you do realise these are long-term investments by pension funds and governments right?
You aren’t actually getting paid with the actual money invested, they usually already calculate with 108-110% coverage, and already assume life-long coverage with an average far exceeded average lifespan, precisely to take this into account
I mean, a lot of people who never invested in anything are going to get hurt by the incoming trade war as well tbh
A reminder that, whilst markets are imperfect and the price is often wrong, the price represents the best guesses of some highly compensated and highly able individuals who do this for a living and, as a consequence, is much more likely to be in the right ballpark than any guess made by someone here.
See also: GameStop
High probability the US trips tomorrow as well.
I assume dark pools keep trading?
Futures already softening, VIX is falling too. pre-market anyways
Well it's nearly 1pm in US Markets :) Reading through the threads here should remind everyone that investing advice on the internet attached to politically charged comments is probably worth stepping over.
Related:
U.S. stock futures tumble indicating another plummet on Wall Street
https://news.ycombinator.com/item?id=43605670
Something even crazier happened today, all based off of a single tweet.
> At 10:10 AM ET, rumors emerged that the White House was considering a "90-day tariff pause."
> At 10:15 AM ET, CNBC reported that Trump is considering a 90-day pause on tariffs for ALL countries except for China.
> By 10:18 AM ET, the S&P 500 had added over +$3 TRILLION in market cap from its low.
> At 10:25 AM ET, reports emerged that the White House was "unaware" of Trump considering a 90-day pause.
> At 10:26 AM ET, CNBC reports that the 90-day tariff pause headlines were incorrect.
> At 10:34 AM ET, the White House officially called the tariff pause headlines "fake news."
> By 10:40 AM ET, the S&P 500 erased -$2.5 TRILLION of market cap from its high, 22 minutes prior.
https://old.reddit.com/r/wallstreetbets/comments/1jtohbt/a_s...
Orange Monday?
The thing that keeps my mind boggled is the sheer number of right wing commentators who appear to genuinely believe that it's even remotely possible for America to build (and grow, and mine) everything they need inside of their wall.
It's a literally ignorant opinion that requires zero perspective on what the supply and manufacturing chain for the stuff they love to buy actually looks like.
All of that doesn't even touch at the jobs Americans clearly do not want part.
While I'm of the opinion that countries should become more self-sufficient for as many things as possible (because pollution of intercontinental shipping and political tensions / leverage... although that goes both ways), I know it's simply not possible since not everything is available everywhere, resource and knowledge / expertise wise.
But if more independence was the goal, they should've made it a long-term goal, not a trap door. China does this a lot better with their 5 year plans in my opinion. I'm not a fan of China either (human rights etc), but they are on track to take over as the world's leading economic force. In fact I think they already are, but the west is sleepwalking. China has got a(n economic) hand in a lot of countries around the world, and I think the raw figures like GPD are only telling part of the story.
Environmental consequences for shipping are very low compared to technologies like "growing things where they do not natively grow", as in heated greenhouses or drying out the desert to grow water-intensive crops.
How do you dry out a desert?
Many deserts do have a limited amount of ground water. If you keep pumping it to the surface not only will be gone soon, it may never replenish as underground aquifers collapse and the soil compacts. I'm not an expert, but this is what I've been told.
Also, that's how you get sinkholes.
I figure they've been playing Minecraft too much.
I know your comment is mostly in good faith, but I wish people considered whether it's worth it to use terms like "right wing commentators" instead of the simpler "commentators".
The "right wing" label will just shun around half of Americans from taking your comment in good faith. Is the point to snark or to convince people to change their minds?
I sat with your comment, and here's the thing: if there are "left wing" commentators saying that these tariffs make sense or that America can spin up a manufacturing economy in a few weeks "or just stop buying stuff", I haven't seen/found/heard them.
In other words, it's a genuine false equivalency, at least in this case.
I am most definitely not suggesting that all left-leaning commentators are smart or good-faith actors. The left gets plenty wrong.
However, if you're going to force me to take a side on who is currently winning at stupid, I suppose my cards are on the table.
As if you could say anything to convince those people…
[dead]
China does it. America is huge and varied in its resources, whats stopping us exactly?
Let's just say that you're more likely to figure out how to cast spells than replicate the Asian fabrication and manufacturing ecosystem and find skilled workers willing to work them for $1000/month.
Currently? Rare earths. Bauxite. Automobiles (the US auto industry is incredibly intertwined with Canada, and to a lesser degree, Mexico). Diamonds.
I'm sure that there are many others that did not come to my mind...
I mean, China imports nearly all of their oil.
Impeachment (and conviction) would be the best market solution, and I am not joking.
Only if they impeach and convict Vance at the same time.
Why do you say that? The strong impression I have is that Vance is agreeing with Trump because he has to in order to maintain any influence (and not get Pence'd), is there any indication he actually wants these Tariffs in the same way that Trump does?
Part of what’s going on is that there’s an aura of incompetence and chaos that has everyone confused. Vance is part of that, and he’s on top of it very young so he can’t even claim to have the experience to handle the current crisis, nor would he ever have been elected to do so as POTUS. So to the extent markets are reacting to that aura, Vance does nothing to assuage it.
Honestly the team with the experience, knowledge, and relationships to right this ship was just kicked out of the White House.
[dead]
Sir, a king can neither be convicted nor be impeached.
Not. My. King.
China: "See?? we're not the enemy, the US is the enemy."
Refreshing to see the negative number/percentage displayed in green though.
So a circuit breaker is intended to prevent a giant sell off? Did this happen during the giant pandemic sell off? I don’t remember hearing about it.
Can this sort of thing happen multiple times a day?
Circuit breakers triggered during March of 2020. I believe the idea is that when the market moves that fast, a pause allows investors time to catch up and process the news.
Yes and Yes.
Non paywalled link: https://archive.ph/Xo8zg
Endless captcha loops for me.
There isn't a lot more there anyway. The breaker triggers at 8% changes on either direction, and was triggered at ~4:30 am (Tokyo).
The exchange is open now anyway, so you can look how it's going.
Looks pretty bad...
Nikkei -6.6% ... but did rebound a bit from lower.
Either way - that I didn't know. Do they all do this?
Circuit breakers are now more common. The US has them at whole-market level and individual stock level. Somewhat like an API rate limit, there are tiered penalties - the bigger the intraday drop the longer the time-out period. In the worst case the market will be shut down for the day to cool off. This is one reason you occasionally hear about the exchange ‘stopping trading’ of a security.
More details here: https://www.investor.gov/introduction-investing/investing-ba...
More important is why they do it: it's a chance for the market to pause and rationally assess automated trades. The reason we're seeing it more often is because it's a reaction to stuff like "flash crashes", which weren't a thing (as much of a thing, anyway) before bots took over the market.
Of course, journalism remains trapped in a death cycle of click-chasing stupidity. This means that the triggering of the mechanism itself has now become a source of hype to propagate the panic ("OMGOMGOMG the market fell so fast that it tripped the circuit breakers!! Panic! Flee! Run away!"), so it's less clear that the mechanism is a net good.
Don't use Cloudflare DNS.
I would never.
Maybe this is jealousy from Americans? If we can't have a pension nobody can crash the markets! Everyone is working until they die! No more 36 hour work week!
What's in there for Trump and his friends? There is no way they actually care about bringing back all sorts of sweatshops in the US, and that can't just be blind nationalism. How do they personally benefit from that situation?
They can move the market with an announcement. If you have that power it’s quite easy to make money.
I cannot (totally can) imagine the scale of the insider trading going on. There's many plays you can do before and after the policy shocks. Before, you can stock up on puts across various major equities. After, you can buy up cheap stocks and consolidate more capital in the hands of private equity.
Trump seems to have been pro tariffs (for good reasons) since around forty years ago, so I think his misunderstood (no longer for good reasons, as globalism has since then established itself as the infrastructure) focus on tariffs is genuine.
His friends, however, probably understood the situation better and capitalised immensely on his newfound power and intent. The rich is going to continue getting richer by playing the game at tables you're not allowed to.
The true scale of the corruption and insider trading will become apparent soon enough, but we may have to wait until the next president comes along for investigations to pick up pace.
Loyalty and obedience is one possibility. Because if you lobby, your business can be exempted from the tariffs.
Trump has two basic strategies:
1) Double down because the one with the most money/power will eventually win with that strategy.
2) Bully everyone he thinks has less money/power than him so he can use strategy #1.
The thing about the bully strategy number two though is that you have to keep using your power and keep it on display for it to work. That means he has to keep doing bully like things, over and over, no matter how dumb they are. The thing about strategy 1 is that you can never admit you were wrong/back down because then you loose all the doubling you have put in. We are seeing the result of these two simplistic strategies at play. He will only stop because it has all come crashing down and even then he will not back down. He has never had to use a different strategy because he has been rich his whole life. He has never once been 'smart', just rich and we are all paying the price of that as everyone else has his entire life.
In game theory, he’s grim trigger and it shows in multiple ways. I suppose we’ve never seen him forced to play a game in which he’s not allowed to change the rules.
That’s when war breaks out. If you can’t change the rules, just start lobbing bombs. People quickly forget about whatever it was that they were worried about before.
He has literally been taking about this since the 80’s.
Believe it or not, it’s entirely possible that he’s doing things because he thinks they’re good for the country and its people. Hell, considering he’s not a career politician it’s probably generally more likely he’s doing it for those reasons than most in his position.
I'm not sure I can believe narcissists do things for the good of others. They lack for the capacity to even consider others, let alone make plans and decisions, putting the interests of others above their own.
> Hell, considering he’s not a career politician it’s probably generally more likely he’s doing it for those reasons than most in his position.
that's some prescription strength copium you're passing around there... where'd you get it?
At that age, it could also be about legacy. A narcissist reason, but not directly personal wealth. Instead to be seen as great stateman that fixed the country. Made it great again.
Now the approach is probably incorrect, but it is not that weird goal considering whole world history.
While the market was burning to the ground on Friday he headed off to play golf and then attend multiple campaign fundraisers where it's estimated he brings in $20M per night. That doesn't count all the money he's raking in by forcing the republican party to host events at his properties, where he effectively launders campaign donation to the party into his coffers.
Between that and the crypto scams, likely insider trading going on we don't know about because nobody's home at the SEC or FBI - I would guess that his plan is simply to accumulate oligarch-level wealth so he's well positioned for the coming oligarchy.
He's also extorted his way into hundreds of millions of dollars in legal representation. I imagine that is case people in his administration find themselves facing criminal charges...or to disrupt/challenge as many elections as he can through endless legal challenges.
For Trump this is a quasi-religious quest, that he’s been obsessed with since forever. For everyone else, there’s one or two nutty finance guys who believe in this shit and then exclusively yes men.
Don't let what people who don't know that much more than you say freak you out too much.
Kospi (SK) and Taiex (Taiwan) tripped as well. China's main index dropped 7%. Hong Kong's Hang Seng index dropped 9% at open.
Europe opens pretty soon. That's going to be ugly.
Absolutely insane. We had an economy that was highly stratified with massive wealth inequality but was otherwise growing - pretty good job numbers, inflation was coming down at a healthy rate. We were doing better than almost any other country in the world in terms of recovering from the economic damage from COVID. a geopolitical situation that was very tense in several areas, but not much in the way of actual action except in Palestine.
All that, gone. A recession is guaranteed; businesses started shutting down factories and laying off people almost immediately. Tens of thousands of people likely lost their jobs Friday and I imagine it'll be even worse Monday now that the Orange Turd has made inflammatory comments insisting he's seeing great success.
Now realize that all the social safety net programs that would be vital during a recession? They're gone. Which means there will soon be a lot of very desperate people. And that means crime. And a lot of foreclosures. Guess what that means? Real estate market crash. That means that boomers watch their homes tank in value.
Mr. Very Stable Genius put oil production and export at the top of his list and the price of oil is plunging, too - the market likely anticipates a huge drop in global and local shipping.
To top it all off, while the market tanked, he was golfing and schmoozing with people who had paid millions to his campaign to sit at his table and get a few minutes of his time. Practically playing his violin while the country's economy burns.
He's spent the last 4-5 decades obsessing about this. It's his white whale. He will not blink. He won't surrender. If there's anything he hates more, it's looking weak. The only thing that will stop this is someone pulling him out under the 25th amendment; I think that is the sole reason he's stacked his cabinet with the imbeciles that he has - they're loyal imbeciles.
Putin is laughing his ass off right now. He's won. He's gotten his revenge for the economic damage done to Russia after much of the world slammed the door on them and I'd guess Ukraine falls within months at most.
Pooh Bear is laughing too and will probably try to invade Ukraine.
Israel is going to finish wiping out the Palestinians.
And who do we have in charge of our military? An alcoholic, wife-beating, ultra-right christian white nationalist Army captain who is more concerned about people being clean-shaven than anything else.
Did I mention that US antipiracy efforts are likely being strongly cut which means world shipping is going to get a lot more dangerous, expensive, and unreliable?
> It's his white whale
https://www.youtube.com/watch?v=SEPs17_AkTI
He said "Japan" (it was the 80's, after all), but he's talked about it for a long time.
This is a hit to Russian finances too.
I think you went into stable genius territory yourself in the second half.
> I'd guess Ukraine falls within months at most.
Even if the US stops all deliveries -- which is far from certain, judging by the noise Trump made in the past week -- Ukraine won't run out of supplies. They'll keep trading territory and even if that accelerates, it will take a long time to reach Kiev (which isn't guaranteed to lead to capitulation anyway, Ukrainians are pretty determined). Meanwhile it looks like Russia is running out of armaments itself and the domestic situation is heating up such that another mobilization is quite risky.
> Pooh Bear is laughing too and will probably try to invade Ukraine.
This is a laughable suggestion. Sure, if Russia annexes parts of Ukraine, China will gladly send construction and mining crews for a friendly price and a cut of the profits, but they have absolutely no reason to send soldiers to Ukraine. In the first place it is not their conflict. They are only "allied" to Russia until they can fully bring Central Asia under their control and build up the infrastructure to replace Russian hydrocarbons and raw materials. Sending the PLA also runs the risk of exposing their weakness, which would damage China's position in the region. Much better to keep it as the huge threat it is on paper.
> Did I mention that US antipiracy efforts are likely being strongly cut which means world shipping is going to get a lot more dangerous, expensive, and unreliable?
Yes, but the PLN is more than ready to take up this role. They have the bases, the ships and have been training like mad. Since freedom of navigation is very important to China (for now), we might see some strange bedfellows there.
> I'd guess Ukraine falls within months at most
That's a bad guess. Ukraine has destroyed ~4000 Russian main battle tanks, a 3rd of the Black Sea fleet and many more thousands of pieces of equipment so far. They have proven how effective they can be defending their country. US cutting their support would be a big blow, no doubt, but Ukrainians can stay in this fight for a long, long time just with the EU support.
Also, with oil going down, it will be quite hard for Russia economically...
In other news....
Vietnam Offers to Remove Tariffs on US After Trump’s Action [0] Taiwan eyes zero tariffs with US, pledges more investment [1]
[0]: https://www.bloomberg.com/news/articles/2025-04-06/vietnam-o... [1]: https://www.reuters.com/world/taiwan-wont-take-reciprocal-ta...
[dead]
[flagged]
Since no one is mentioning it I will. If the stock market crashes, dollars move to treasuries. If the demand for treasuries skyrocket, the interest rate on treasuries drops dramatically. There's 9.2 trillion dollars US debt in the form of low interest treasuries up for refinancing this year. Refinancing them at the current treasury rate will add a huge burden to government expenditures.
However, if you drop the nominal interest rate to say 2%, that saves about $460 billion a year in interest on the 9.2 trillion, or $3.58 trillion over the life of the treasuries.
It's just a dumb theory, but blow the stock market up, lower treasury rates, refinance, prop the market back up again. Seem's like a buying opportunity ahead perhaps.
Fun fact since you bring up treasuries, Marjorie Taylor Greene appears to have moved several hundred thousand dollars (probably most of her assets) into treasury bills a few days before the tariffs announcement, pretty much like she knew exactly what was coming. I noticed that tonight with a new site someone else here made: https://www.capitoltrades.com/politicians/G000596
I suspect there's real corruption to be found, anyone who knew the contents of "Liberation Day" could make millions off a very obvious bet. Too bad we don't care about corruption anymore!
I am no fan of the administration or Greene, but the tariff day was well communicated beforehand (though, not the magnitude). Getting out of the market before the chaos hit the fan, seems like a fiscally savvy move.
Treasury interest rates are substantially determined by the perceived reliability of the US govt and the odds of the US paying back its debts.
If the US purposefully blows up its credibility then interest rates eventually go UP.
The US Treasury rate being the "risk free rate" of capital isn't a magic law. It depends on prudence.
If it actually works out, I'd be amazed and happy. I'm not that optimistic though.
It is like you have patient with clogged arteries and your solution is to remove the arteries because the new ones, once rebuilt will be not clogged.
Not really. Nothing has been removed. So far everything is just a panic. Anything critical will continue to flow, just at a higher cost. Most already healthy companies will survive. This is bad, but it's not as terrible as the panick is making it out to be. The thing that's making it look worse is how overvalued the market has been.
Not many people realize that the Fed can’t really increase rates any more, because of that debt service. That’s a problem because if inflation comes back with a vengeance, the Fed can’t pull its anti-inflation lever.
It’ll be interesting to see what the Fed does but I’m inclined to think they’ll be dropping rates to near-zero sometime this year like they did in 2020. That would at least somewhat offset increased prices from the tariffs, while applying “expansionary” force on the economy through cheap money. There’s a nonzero chance this tariff game ends up reviving the economy (let’s be real, Biden Admin avoided a “recession” but the economy was/is on life support) by encouraging companies to spend more on expansion while simultaneously suppressing consumer spending. I’m no economist but it’s actually low-key genius… if it works. It probably won’t work.
Yes Trump came up with his tariff plan in the 1980s (and explained it on Opra) because he knew it would help with interest on bonds in 2025. Just more Trump 5d chess.
Personally I can't wait for the 'defend everything' theory as to why penguins on their own islands are bad. It looks like it's going to be 'those penguins were going to arbitrage Chinese goods into the USA'.
In 2024, the United States recorded imports valued at approximately $1.4 million from Heard Island and McDonald Islands, according to World Bank data. These figures are likely the result of misclassified shipments rather than actual trade with these uninhabited territories.
Just adding some context, not saying I agree with tarrifing penguin island.
> Monday is going to be an absolute bloodbath.
Don't start such rumors. It is not that bad, you can see pre-mkt trading here: https://www.cnbc.com/
Uh… May want to revisit that now.
Current headlines from cnbc.com:
Trump is losing the confidence of business leaders, billionaire investor Bill Ackman says
Dow futures fall 900 points as Trump tariff market collapse worsens
This might age really badly but I have a feeling the market will barely be green by end of day
It wouldn’t be unheard of.
congress is complicit too. this could all be over anytime they want it to be
Would they need a veto-proof majority for that to work? You’d need like half the republicans to go along with that.
I feel like most rooms containing republicans could be talked into grabbing power that's just sitting there waiting to be grabbed at a rate of 50% or better. I'm not sure what's wrong with this one.
Yes. This doesn't contradict GP, though.
They are more alike as an investor class than different because of party affiliation. At the end of the day they all like being rich more than anything else.
Which aligns them with their voters -- voters don't like expensive goods and stock market crashes. The stock-owning coalition of Americans alone is bigger than either party, and everyone pays for goods.
No matter how many upvotes this comment gets it will never be enough.
That doesn't make it any less on them.
Congress doesn't give a damn about this country. If they had even a small amount of respect for it, they would have already impeached the trump.
He's been impeached twice. Didn't seem to help.
They are determined to bring back some of the supply chain back to USA
I don't know much, but this is the messaging
It's the messaging which you need to apply a reality check: how is it going to happen?
Let's say I'm an industrialist, I have an HQ in the USA while my products are made in factories around Asia (China, Vietnam, Taiwan), I invested some US$ dozens of millions to setup production where labour costs are lower, my whole pricing depends on comparative advantages: my USA HQ does R&D by well-paid workers, the designs are then dispatched to be produced at lower cost factories.
Now my products will be taxed some 30-50% more, I will have a big drop in sales so the forecast for the foreseeable future is looking like a loss for many quarters, I'd need to invest some US$ dozens of millions to setup factories in the USA, hire people to do the work that Vietnamese workers do but paying US salaries, or invest a ton more in automation and robots to run these factories as cheap as I currently can in Asia. But my financial outlook is pretty bad, I won't be able to sell my products, there's a major risk there so I can't get very low interest loans since no bank can know if I'll be able to pay it. Also, should I invest this in case it will take some 5-10 years to recoup the investment? How will tariffs look like in that time frame? If I invest and competitors don't and tariffs get struck down/removed I will have just burnt money, evaporated it, while my competitors get an advantage by saving it. Repeat this across thousands of companies to get the scale of the dilemma.
I will need to put more collateral to get cheaper rates, while it's looking like I will be potentially losing money until I manage to setup these factories. I also need suppliers, and they need to setup shop in the USA as well because if not my inputs will all be more expensive anyway from the tariff tax, so I'm being squeezed in that direction as well.
Multiply this by thousands and thousands of companies, all depending on a global supply chain, how the actual fuck will this work out in reality to onshore production when these companies all got squeezed all at the same time?
There is no basis in reality for the messaging, it's devoid of any actual plan, any regards for the potential impact not to the "economy™" but to all the people employed by all the affected companies who will see a massive drop in sales, the workers are the consumers and when they get laid off because the companies can't keep paying salaries it will further depress outlooks on sales, turning into even riskier deals for financiers to take to support the necessary investments to onshore production of entire supply chains.
To top it all off there will be massive inflation since all prices went up overnight by being taxed through tariffs, less consumer spending, fewer products being purchased, companies earning less, firing people, less consumer spending, fewer purchases, so on and so forth.
It's a death spiral completely triggered by maniacs, no confidence crisis, no major shock from a natural disaster (i.e.: a pandemic), just a bunch of lunatics trying to impose a new world order through decree.
And stupid people eat this messaging up, they want to believe it will be all fine and dandy even if it's one of the stupidest acts ever taken by a major government...
It's all just so fucking stupid, I still can't believe how it is all just plainly so stupid.
I mentioned this before, and once again, it makes more sense if you look at all of this as side effects of the American population and leaders not accepting that they have lost global leadership by any meaningful metrics. It’s like everyone is freaking out, getting angrier and angrier, and throwing the sink out as well. From outside, it just looks sad. All I can think is, they’re trying to rewrite the rules that they came up with, but this time around, it is less likely for others to fold.
I might be wrong. Well, I actually hope I’m wrong. But it is what it is.
Last year I finally got to read a copy of Hunter S. Thompson's "Hell's Angels" that I had purchased while on a trip in San Francisco back in 2015, and just last week I bumped into this quote that is absolutely prescient for the current state of American society which gave power to Trump:
> "To see the Hell’s Angels as caretakers of the old 'individualist' tradition 'that made this country great' is only a painless way to get around seeing them for what they really are, the first wave of a future that nothing in our history has prepared us to cope with. The Angels are prototypes. Their lack of education has not only rendered them completely useless in a highly technical economy, but it has also given them the leisure to cultivate a powerful resentment... and to translate it into a destructive cult. The people who are being left out and put behind won't be obvious for years. Christ only knows what'll happen in, say, 1985 — a million Hell's Angels. They won't be wearing the colors; they'll be people who are just looking for vengeance because they've been left behind."
The USA in its everlasting quest of creating wealth without caring for the effects of blind wealth accumulation on its citizens, where good financial outcomes trumps over good societal outcomes, has created this monster. People who are left behind won't be all re-trained to do high-skill jobs, they will be poor, uneducated, they will be angry and resentful, they will want vengeance.
This is the vengeance, the wrath from a system who doesn't care for you as a person, only caring for you as means of production.
Like you said, the whole system was engineered by the same nation who now hates the system because their leaders focused on perpetuating the system's worst sides in pursuit of wealth instead of caring for them.
I’ve never read that book, but this motivated me to look it up once again! Thank you!
All of this but coming on the heels of the largest layoff in history (that was still going on as of last week)
That's a good analysis, better than what I could come up at least.
Trump like tariffs, you can see his old videos about that. There is one offramp, which is that all tariffs come down and trump accepts that as a win.
Also Bessent's friend Druckenmiller likes a consumption tax, and they think tariffs are a good consumption tax.
Thank you but I really don't think it should be considered "good analysis". It's an extremely basic analysis made by a layman (me) with just a cursory knowledge of macroeconomics, and average reasoning skills.
The case that I could come up with it in 5 minutes while writing a comment on a forum just showcases how braindead this policy is, more than braindead, how one needs to be ideologically compromised to even float this idea as something that could work in reality.
Whatever "model" the dumbfucks in the USA administration came up with to justify to themselves any support for this will meet with reality very, very fast, and the major problem here is that they are stubbornly ideological, Trump won't change his fucking demented mind when reality hits, he will double down like he usually does, and all of us will feel the pain, a large majority of the world's population will feel the impacts of this, layoffs are coming if this policy continues even for just a few months, businesses closing (big and small), lots and lots of suffering will be inflicted because Americans decided to elect a stupid man, surrounded by stupid sycophants.
Just compare the current administration's background with any other serious nation on Earth, it's bonkers that the Americans are accepting being led by absolutely incompetent people: Education being led by an entertainment business person, Defence being led by a TV host, Health being led by an anti-science person whose claim to fame is being a relative of assassinated politicians, the list goes on and on.
It's so absurd that I lost any respect I had left for the USA as a society, it's deathly sick and already rotting... Maybe this is the time it will be put in the coffin, just fucking sucks to feel that my loved ones will all feel the pain of this rotting.
Edit:
Just as an example of the idiocy, this is a comment from Bessent, probably the person in this administration who is the closest to being more technical:
> Treasury Secretary Scott Bessent insisted there didn’t need to be a recession and dismissed the long-term impact of stock market losses, using words like “choppiness” and “adjustment process” to explain the panic. And speaking on NBC’s “Meet the Press,” Bessent rejected the idea that people who want to retire soon had taken a serious blow. “Americans who have put away for years in their savings accounts, I think they don’t look at the day-to-day fluctuations of what’s happening,” Bessent said. He added: “The reason the stock market is considered a good investment is because it’s a long-term investment. If you look day-to-day, week-to-week, it’s very risky. Over the long term, it’s a good investment.”
The absolute denial of reality, coming from what most would consider the "competent grown up" in the whole administration. Absolute shambles...
"The Jews are responsible for everything bad in the world".
I don't know much, but this is the messaging (that I'm going to repeat ad nauseam so that more people will believe it).
Don't be a part of the problem.
Trust the plan and the process.We need to start manufacturing shoes and socks here in the US.
Working Uber looks quaint compared to your proposed sock economy.
Burning it all down to go back to making shoes and socks domestically is pure economic illiteracy.
Literally any introductory Econ book would explain why this is nonsense. It’s depressing that this mindset is resonating with so many people who think it’s better to put massive taxes on basic necessities (tariffs are taxes) and destroy the economy.
Fairy certain the post you’re replying to was sarcasm.
The goal isn’t to repatriate low value manufacturing, it’s simply to create negotiating leverage to discourage other countries from applying asymmetric tariffs on the US.
It doesn’t make sense for the US to allow other exporters in other countries free access to US consumers, while other countries charge US exporters for the same privilege.
What countries were applying “asymmetric tariffs” to the US before?
I think you misunderstood the message you’re trying to stand behind: when they talk about reciprocity they mean trade deficits (as if that made sense), not import tariffs. The majority of the world had very low import taxes on US products before this happened, and now they are only going up.
Trade deficits are not tariffs, the average tariff paid by the US to the EU for goods for example is around 1%.
What plan?
A grain of truth (onshoring more real production being desirable) doesn't really justify the "process" (which obviously isn't actually a process).
And the understanding of the problem exhibited being so infantile it can't even conceive of circular trade does not give one confidence that there's any sort of great game theory happening.
Lol, I see in the responses that ppl cannot recognize a joke.