The Biden Administration instituted the ban, but turned a blind eye to Chinese shell companies set-up in Singapore to circumvent the ban. The loophole has been closed.
this is not true, for today's Nvidia fall, as far as I can tell. Not an accurate description.
From what I can tell, with 70% confidence, is that Biden OKd this particular chip for sending to China, so Nvidia made a lot of them. Then the Trump admin yesterday said 'nope can't send that chip to china.'
So nvidia is caught with billions of dollars of inventory it can't sell anymore.
This post was edited 26 seconds after it was posted.
Stealing from X for clout, but someone bought a staggering 25% of the *entire* open interest of a semiconductor ETF (which is 20% NVDA) in a single OTM put option yesterday and today. $3.7 billion of underlying stock, 8ish de...
Of course. The goal was to stop AI chips going to China, Biden allowed them to go thru Singapore, hence Deep Seek. Trump closed the loop hole.
I don't see any evidence that closing a loophole is the cause of today's NVDA stock drop. the cause seems to be something different.
but I'm not spending much time looking around.
If AI is the miracle most DGTD posters believe, restricting sales to China would be wise. That said, it is now restricted in some form, which was somewhat predictable thru earlier information I posted. Many ignored the Russian sourcing of the story, referenced from Bloomberg.
Meanwhile, I sold a third of my SOXS, this lot purchased one week ago, and sold up as much as 29%. Not bad for an 85 IQ.
Oh, and stocks do not always go up.
This post was edited 4 minutes after it was posted.
Reuters: “The U.S. House Select Committee on China said in a report that "it has sent a formal letter to Nvidia demanding answers about sales to China and Southeast Asia to examine whether and how its chips ended up powering DeepSeek's AI models—despite U.S. export restrictions".
Nvidia warned on Tuesday of a $5.5 billion hit after Washington restricted exports of its H20 AI chip to China. The move to restrict H20 shipments is Trump's latest effort to limit China's access to advanced semiconductors.
The U.S. has banned exports of Nvidia's most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities.”
Anyone else getting the sense that this time it really might be different? I have lived through 2008, 2020, 2022... I feel like the future of our economy and our position on the world stage is more uncertain now even than it was at the start of the pandemic. I think I am a pretty balanced thinking and investor and have the returns to support that thought, and I feel more unease about the future now than ever before. The market and the economy has been propped up for far too long, national debt has reached a breaking point, the cost of living has exploded over the last few years, and covid did far more damage to our economy than we realized. With China dropping the dollar, people moving out of stocks AND bonds at the same time, and all the layoffs and government funding cutbacks, I could see things developing into a literal crisis. While I'm not necessarily saying that's likely, it would not surprise me if we see things get significantly worse sometime over the next 3-12 months. Also, not sure how aware of this people are, but since investing has become commonplace, there has been a lot more people putting money in the market over the last ~10 years, and also a lot more leveraged money.
Anyone else getting the sense that this time it really might be different? I have lived through 2008, 2020, 2022... I feel like the future of our economy and our position on the world stage is more uncertain now even than it was at the start of the pandemic. I think I am a pretty balanced thinking and investor and have the returns to support that thought, and I feel more unease about the future now than ever before. The market and the economy has been propped up for far too long, national debt has reached a breaking point, the cost of living has exploded over the last few years, and covid did far more damage to our economy than we realized. With China dropping the dollar, people moving out of stocks AND bonds at the same time, and all the layoffs and government funding cutbacks, I could see things developing into a literal crisis. While I'm not necessarily saying that's likely, it would not surprise me if we see things get significantly worse sometime over the next 3-12 months. Also, not sure how aware of this people are, but since investing has become commonplace, there has been a lot more people putting money in the market over the last ~10 years, and also a lot more leveraged money.
every correction, every bear market feels different in this same way, and more important than the last one. While it's happening. It has to, otherwise stocks won't fall sharply. Afterwards we shrug and say 'eh that wasn't a big deal.' That pattern happens every time.
that said...having a corrupt US government fully dedicated to destroying short term value and fully dedicated to overturning the global economic system in a stupid way without the benefit of the legislature being able to moderate things IS new.
Markets don't reflect this reality yet. Markets are on the way to that realization, but so far all we've done is wipe out the enthusiasm investors had for the new admin. Not priced in the damage it is doing to the world economy. The recession isn't priced in yet.
I am down to 35% stocks in my overall portfolio for this reason. A fully a third of my portfolio in money market, not exposed to market swings.
I don't quite see how we get out of this without a 25-35% drop in stock prices.
I have also been selling my generic SP500 position and moving it into tech. If any companies will prosper eventually, I think it will be tech. You put the smartest people in the world into an industry...they will find a way to make a lot of money. And the stocks are much less expensive now.
And a big position in utilities.
This post was edited 8 minutes after it was posted.
Since this tweet small caps underperformed by another 700 basis points.
maybe now buy small caps? Hard to believe anyone has much faith in them. Which is usually a good time to buy something. Small caps have already had their bear market and washout...big caps have only had a correction.
Yaron Naymark @1MainCapital Jefferies: We believe the longer-term case for small caps is very bright given the extremes the size segment is seeing: • The rolling 5-year relative return stands at -7.8% and ranks in the 7th percentile going back to 1930. • This underperformance cycle is 2nd longest in the history of small caps, which dates back to 1926. • The size segment is less than 4% of the US equity market and the Russell 2000 is just 5.7% of the Russell 3000.
Is it different this time? I dunno, it always seems to be different this time, and most times it’s the same as it ever was. I think we are certain to see continued volatility. I think some of the following are likely to happen and if so would move markets in big ways:
- Trump fires Powell
- Trump openly defies a clear and direct Supreme Court decision
- Trump launches direct military action against a legitimate, credible enemy force
- Trump uses force (military or economic) to annex Panama, Greenland and/or Canada
- Trump sends troops into Mexico to go after “terrorists”
- Trump pulls the US out of NATO
- Trump jails a political enemy without charges and due process
- Trump jails US citizens in foreign prisons
- Trump lifts sanctions against Russia
- BRICS launches a new currency
- major US note holders (Japan, China, etc) accelerate selling US dollar debt and buying alternate sovereign debt
- major US trading partners accelerate the development of ex-US trade deals
While I don’t know that any or all of these things will happen, I expect that several will, and US markets will likely suffer to some degree. I’m not prepared to guess how bad things will get in US markets, but I’m keeping my money out of US equities until / unless SP500 gets below 4000.
Anyone else getting the sense that this time it really might be different? I have lived through 2008, 2020, 2022... I feel like the future of our economy and our position on the world stage is more uncertain now even than it was at the start of the pandemic. I think I am a pretty balanced thinking and investor and have the returns to support that thought, and I feel more unease about the future now than ever before. The market and the economy has been propped up for far too long, national debt has reached a breaking point, the cost of living has exploded over the last few years, and covid did far more damage to our economy than we realized. With China dropping the dollar, people moving out of stocks AND bonds at the same time, and all the layoffs and government funding cutbacks, I could see things developing into a literal crisis. While I'm not necessarily saying that's likely, it would not surprise me if we see things get significantly worse sometime over the next 3-12 months. Also, not sure how aware of this people are, but since investing has become commonplace, there has been a lot more people putting money in the market over the last ~10 years, and also a lot more leveraged money.
every correction, every bear market feels different in this same way, and more important than the last one. While it's happening. It has to, otherwise stocks won't fall sharply. Afterwards we shrug and say 'eh that wasn't a big deal.' That pattern happens every time.
that said...having a corrupt US government fully dedicated to destroying short term value and fully dedicated to overturning the global economic system in a stupid way without the benefit of the legislature being able to moderate things IS new.
Markets don't reflect this reality yet. Markets are on the way to that realization, but so far all we've done is wipe out the enthusiasm investors had for the new admin. Not priced in the damage it is doing to the world economy. The recession isn't priced in yet.
I am down to 35% stocks in my overall portfolio for this reason. A fully a third of my portfolio in money market, not exposed to market swings.
I don't quite see how we get out of this without a 25-35% drop in stock prices.
I have also been selling my generic SP500 position and moving it into tech. If any companies will prosper eventually, I think it will be tech. You put the smartest people in the world into an industry...they will find a way to make a lot of money. And the stocks are much less expensive now.
And a big position in utilities.
Literally nothing will change unless unemployment goes up.
When actual unemployment numbers start shooting up across all sectors, not just bloated tech positions, that's when we panic
Is it different this time? I dunno, it always seems to be different this time, and most times it’s the same as it ever was. I think we are certain to see continued volatility. I think some of the following are likely to happen and if so would move markets in big ways:
- Trump fires Powell
- Trump openly defies a clear and direct Supreme Court decision
- Trump launches direct military action against a legitimate, credible enemy force
- Trump uses force (military or economic) to annex Panama, Greenland and/or Canada
- Trump sends troops into Mexico to go after “terrorists”
- Trump pulls the US out of NATO
- Trump jails a political enemy without charges and due process
- Trump jails US citizens in foreign prisons
- Trump lifts sanctions against Russia
- BRICS launches a new currency
- major US note holders (Japan, China, etc) accelerate selling US dollar debt and buying alternate sovereign debt
- major US trading partners accelerate the development of ex-US trade deals
While I don’t know that any or all of these things will happen, I expect that several will, and US markets will likely suffer to some degree. I’m not prepared to guess how bad things will get in US markets, but I’m keeping my money out of US equities until / unless SP500 gets below 4000.
Hang on for a bumpy ride, is my best advice!
If Powell gets fired we'll see the single largest one day % drop on the SP500 in history. So that'll be fun I guess.
every correction, every bear market feels different in this same way, and more important than the last one. While it's happening. It has to, otherwise stocks won't fall sharply. Afterwards we shrug and say 'eh that wasn't a big deal.' That pattern happens every time.
that said...having a corrupt US government fully dedicated to destroying short term value and fully dedicated to overturning the global economic system in a stupid way without the benefit of the legislature being able to moderate things IS new.
Markets don't reflect this reality yet. Markets are on the way to that realization, but so far all we've done is wipe out the enthusiasm investors had for the new admin. Not priced in the damage it is doing to the world economy. The recession isn't priced in yet.
I am down to 35% stocks in my overall portfolio for this reason. A fully a third of my portfolio in money market, not exposed to market swings.
I don't quite see how we get out of this without a 25-35% drop in stock prices.
I have also been selling my generic SP500 position and moving it into tech. If any companies will prosper eventually, I think it will be tech. You put the smartest people in the world into an industry...they will find a way to make a lot of money. And the stocks are much less expensive now.
And a big position in utilities.
Literally nothing will change unless unemployment goes up.
When actual unemployment numbers start shooting up across all sectors, not just bloated tech positions, that's when we panic
Job cuts are a lagging indicator. Companies don’t cut jobs until they really have to. By the time unemployment moves up materially, we’ll be well into a recession.
Literally nothing will change unless unemployment goes up.
When actual unemployment numbers start shooting up across all sectors, not just bloated tech positions, that's when we panic
Job cuts are a lagging indicator. Companies don’t cut jobs until they really have to. By the time unemployment moves up materially, we’ll be well into a recession.
The point is - you need some indicator to know if "this time it's different." There is no crystal ball and yes, you won't know until it's too late.
Job cuts are a lagging indicator. Companies don’t cut jobs until they really have to. By the time unemployment moves up materially, we’ll be well into a recession.
The point is - you need some indicator to know if "this time it's different." There is no crystal ball and yes, you won't know until it's too late.
well ok
depends what we consider 'different'
to me, we're looking at a probability that we won't go back to a 22-25 PE on the SP500 for a long time, unless trump leaves office prematurely I suppose.
it's saying we're in the middle of a rerating of US stocks to a much lower PE. 15 instead of 25, that sort of thing.
And the P in the PE is going to fall when the recession starts, so it's worse than it sounds.
Is that different? or just normal?
I suppose a real 'different' would be if there is a vast change in the political/economic situation in the US and/or world.
Maybe a 50% drop in the SP500 would be different? That's a once in a generation drop.
Reuters: “The U.S. House Select Committee on China said in a report that "it has sent a formal letter to Nvidia demanding answers about sales to China and Southeast Asia to examine whether and how its chips ended up powering DeepSeek's AI models—despite U.S. export restrictions".
Nvidia warned on Tuesday of a $5.5 billion hit after Washington restricted exports of its H20 AI chip to China. The move to restrict H20 shipments is Trump's latest effort to limit China's access to advanced semiconductors.
The U.S. has banned exports of Nvidia's most advanced chips to China since 2022, concerned that advanced technologies could be used by China to build up its military capabilities.”
File under “told you so.”
Before filing under "told you so" you may want to get your facts straight.
In 2022 the Biden administration implement export controls that limited US companies, like Nvidia, from exporting their highest performance chips to China.
In response, Nvidia introduced a new set of chips that had sufficiently lower performance that they could be exported to China.
In October 2023, the Biden administration tightened export controls further that made some of the previously designed China-specific chips ineligible for export.
Predictably, Nvidia responded by designed a second generation of chips for China, for example the H20 that was released in early 2024 and was completely compliant with export controls. Until recently, it is the highest performance chip that could be legally exported to China.
The Trump administration has now banned the export of the H20. I'm not sure if they banned the H20 specifically or more broadly lowered the performance guidelines of what can be exported. It's important the note that there was bipartisan support for blocking H20 exports, and so while I've said "Trump administration", Elizabeth Warren was one of the leading advocates for the block.
So, no nefarious loophole closed. Just a further tightening of what can legally be exported.
Note, Nvidia is sitting on stockpile of more than 1 million H20 chips (hence the $5.5 billion write-off) that they can no longer export to China. American companies would rather pay more for Nvidia's highest performing chips.
As I’ve said many times here and on @CNBC .. the dislike goes both ways. Let’s hope the animosity doesn’t end up bleeding into decision making. https://t.co/BP8qi1nVEW
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