I think Trump is going to use the tarrifs in order to bargain deals with each country, and I think he wants to start with a strong hand, that serves his interest in negotiating. I think it's also in his interest to back the hell off of a steep tarrif stance, so we will see action sooner rather than later.
But there will still be a fair amount of residual tarrifs, and there will be a new way of doing business internationally, which will both create a lot of animosity and will discourage investment in our markets.
I think the big things that will move markets in the coming weeks and months will be economic indicators that point to a much softer economy, rising inflation, and diminishing consumer confidence and spending.
Ah, a common mistake that we still see to this day in the year 2025.
"I think there's something here to what Trump is doing, some sort of motive or purpose."
No. He and everyone around him are actually just that fvcking retarded, and it's as simple as that.
Nasdaq is now in a bear market... S&P 500 isn't too far behind... Seems like the pain of tariffs and budget cuts, layoffs, etc is really only beginning. That begs the question, "How low will things go?" I didn't expect drops this big for another couple months. If we're still on the same course, that could mean falls of another 10% or more from all time highs. If things fall more than 30%, it would be a tremendous buying opportunity for those holding cash.
While I wait for my earlier snarky nonsense to be removed, I’ll add some clearer thoughts:
- being trans, or living with some form of gender dysphoria, has nothing to do with sexual deviancy. To claim otherwise is a lie
- fentanyl is not streaming into the US from Canada, nor are illegal immigrants. That said, illegal guns (and drugs) are streaming into Canada from the US
- being pro-Palestine is not the same as being pro-Hamas. Similarly, being anti-settlement or anti-Netanyahu is not the same as anti-semitism. Nuance matters
- restricting “appropriate” historical narratives in universities and at other institutions, like the Smithsonian, is a mark of the beginning of autocracy
- current attacks on academia are in fact anti-semitism under the guise of fighting anti-semitism, a particularly nefarious tactic
- arbitrary arrests by non-uniformed people for exercising free speech is a particularly heinous assault on democracy
- many people like autocrats. I’ll claim without proof that a significant plurality of Americans, namely committed MAGA and MAGA-leaning, want autocracy as it represents the best way of achieving their aims. I expect they will get what they wish for, probably well before mid-terms can be held. I’d guesstimate you are 70-80% of the way there already
While I wait for my earlier snarky nonsense to be removed, I’ll add some clearer thoughts:
- being trans, or living with some form of gender dysphoria, has nothing to do with sexual deviancy. To claim otherwise is a lie
- fentanyl is not streaming into the US from Canada, nor are illegal immigrants. That said, illegal guns (and drugs) are streaming into Canada from the US
- being pro-Palestine is not the same as being pro-Hamas. Similarly, being anti-settlement or anti-Netanyahu is not the same as anti-semitism. Nuance matters
- restricting “appropriate” historical narratives in universities and at other institutions, like the Smithsonian, is a mark of the beginning of autocracy
- current attacks on academia are in fact anti-semitism under the guise of fighting anti-semitism, a particularly nefarious tactic
- arbitrary arrests by non-uniformed people for exercising free speech is a particularly heinous assault on democracy
- many people like autocrats. I’ll claim without proof that a significant plurality of Americans, namely committed MAGA and MAGA-leaning, want autocracy as it represents the best way of achieving their aims. I expect they will get what they wish for, probably well before mid-terms can be held. I’d guesstimate you are 70-80% of the way there already
Sleep tight everybody!
Nicely written, reasoned, and something I can and do agree with.
I’ve been playing with numbers. Last week’s (so far) mini crash knocked 10.53% off the SP500 over two days. Since 1950, there have been only four worse 2-day periods: -24.5% to 20 Oct 87, -16.23% to 21 Oct 24 (both included the worst single day loss of -20.39% on 20 Oct), -12.01% to 21 Nov 08 and -13.93% to 12 Mar 20.
So, the end-week rout was a pretty rare event. That said, we’ve been hovering in elevated index values a long time, so the balloon still has a lot of air it might lose. If the index dips below 4000 this year I will be moving as much money as I can back into the markets, as that would set up the next 5-25 years, give or take, for stronger than average returns, after which I can die peacefully.
Nasdaq is now in a bear market... S&P 500 isn't too far behind... Seems like the pain of tariffs and budget cuts, layoffs, etc is really only beginning. That begs the question, "How low will things go?" I didn't expect drops this big for another couple months. If we're still on the same course, that could mean falls of another 10% or more from all time highs. If things fall more than 30%, it would be a tremendous buying opportunity for those holding cash.
Kevin Hassett, head of the White House’s National Economic Council, acknowledged that US consumer prices “might go up some” as a result of Trump’s tariffs, but suggested that concern among economists, the Federal Reserve and some lawmakers was overblown.
Now, for those that don't recognize that name, Kevin Hassett is the coauthor of Dow 36,000, published in 1999, in which he argued that the stock market was about to have a massive swing upward and would reach 36,000 by 2004. Shortly thereafter, the dot-com bubble burst, causing a massive decline in stock market prices. The Dow did not reach 36,000 until late 2021.
So, if you have a hard time taking his word over that of hundreds of economists, it's not you. It's because he literally wrote the book on being wrong.
I'm usually not one to try timing the market, but when Trump announced his "reciprocal" tariffs after close on Wednesday, it was obvious what was coming. I should have moved all my 401K out of Vanguard Institutional Index VINIX and Extended Market Index VIEIX (boglehead's 80/20) into bonds VBTLX right away.
Yesterday, seeing "futures plunge" and "markets have ample space to keep selling off" and especially Trump doubling down, saying he's now backing down, I did the switch now. I won't be able to switch back for 30 days due to market timing rules, but I feel safer already stopping the bleeding. If he calls off the tariffs before 30 days, I can always switch to the Fidelity versions of the low-load total stock market index funds in my 401K (luckily I have good choices).
feeling 'safer' is rarely a good plan when markets are plunging. Sometimes, sure. But usually it means you are just one of the masses rushing to one side of the boat just before it starts lunging back in the other direction. Comfort in being with the masses.
As for me, I'm done selling...starting to buy tech. All the junk bonds are gone, I'm down to 37% stocks. So I have a lot of rebuilding to do.
I wonder when my 401K change executes. Hopefully at the beginning of the day rather than the end, but oh well.
If it's a Vanguard mutual fund, it trades at the value at closing on the day of the trade. So if you trade at 9:45 am, it's the same as if you trade at 3:59:59 pm.
I can't remember exactly how it works with after hours, but I think it's as if you traded on the next business day. So a Saturday trade would be the value at 3:59 on Monday.
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