NOTHING TO DO WITH TARIFFS
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fisky wrote:
seattle prattle wrote:
I think there is a belief that if much of this downturn is "self-inflicted"and can be moderated or reversed, and quickly. Such a strategy seems very consistent with the new administrations's way of doing things.
Early on, I wondered, "Why is Trump doing tariffs? Then later, I wondered, "Why is he stopping and starting tariffs?" I went back and read The Art of the Deal again.
The answer is that tariffs aren't about "tariffs." They're a tool to accomplish something else. Moving manufacturing back to the US isn't practical for many goods when labor is ten times more expensive than the US. So what are the goals?
1) Move the production of imports from China to the US and to a much greater extent, other SE Asian nations with whom we have a friendly relationship.
2) Especially move the production of strategic goods out of China, which has a long term goal of world dominion.
3) Do this FAST, before our POS Republicans and Democrats turn their full attention to mid-term elections, which means NOTHING will be done.
Watch for the US to make a deal with Vietnam. SE Asia nations are wringing their hands in public, but in private they are greedy to get that market share of production from China. Once these deals are negotiated, the market should rebound. A few companies will get hit worse than others, but that's a buying opportunity. I've already repositioned about $100k into stocks that have been hit hard with the talk of tariffs but are well positioned to move rebound over the next few months.
This sounds like magical thinking, fisky.
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agip wrote:
agreed that one of the main goals of the tariffs is to isolate and harm China.
but will the tariffs actually come off? There's a built-in contradiction in the trump position- the WH says deals are coming, which implies lower tariffs...but they are also counting on the tariffs to stay on the books to provide billions of dollars of revenue to 'pay for' the income tax cuts and business tax cuts that Trump thinks he needs, in order to hold the House next year.
so they are trying to take tariffs off but need to keep them on. tariffs are being used as a removable point of pressure to get countries to bend over...but at the same time as a needed source of income.
Hard to see how this resolves.
My going view is that they'll settle in on a global 10% tariff, and then China will get an extra 15% punitive tariff, and probably Europe too, because Trump irrationally hates Europe.
I think part of it is because he believes in tariffs, but he also wants to show and demonstrate the power he has.
I would prefer lower tariff rates so the market does better though.
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agip wrote:
agreed that one of the main goals of the tariffs is to isolate and harm China.
but will the tariffs actually come off? There's a built-in contradiction in the trump position- the WH says deals are coming, which implies lower tariffs...but they are also counting on the tariffs to stay on the books to provide billions of dollars of revenue to 'pay for' the income tax cuts and business tax cuts that Trump thinks he needs, in order to hold the House next year.
so they are trying to take tariffs off but need to keep them on. tariffs are being used as a removable point of pressure to get countries to bend over...but at the same time as a needed source of income.
Hard to see how this resolves.
My going view is that they'll settle in on a global 10% tariff, and then China will get an extra 15% punitive tariff, and probably Europe too, because Trump irrationally hates Europe.
Good thoughtful response.
My advice is to ignore most of what Trump says and ignore what the WH says. I think the whole "use tariffs to pay for tax cuts" is just something to appeal to curry favor among voters.
Instead of trying to make sense of the political doublespeak (from both parties), look at the actions taken and then try to deduce the end game... or games.
My thoughts are similar to yours, but I think Trump will play the tariffs game to get concessions from other countries. Ex: Make it easier and less expensive for US businesses to relocate from China to YOUR country and we'll reduce YOUR country's tariffs more than your neighbor's. You'll get a nearly guaranteed increase in your exports.
With this in mind, I think stocks best suited for this volatile market are stocks with manufacturing in China that 1) have been hit hard by tariff talk and 2) are in a good position to relocate their manufacturing to another SE Asia nation and 3) stocks in a position to benefit from a gain in market share while the tariff thing works itself out.
That said, I like NKE. It's been hit hard due to some mismanagement issues and tariffs, but it already has manufacturing in Vietnam so it should be easier for it to move out of China than for some other companies. It has also held above its 2016 low at 50-ish and that is now a support. I also like ONON. It has less exposure to China and is positioned well to take any market share from competitors as this tariff thing shakes out. If it sounds like I'm playing both ends of this tariff kerfuffle, I am!
This post was edited 1 minute after it was posted.01 -
Dr Prof Racket, PhD wrote:
fisky wrote:
Early on, I wondered, "Why is Trump doing tariffs? Then later, I wondered, "Why is he stopping and starting tariffs?" I went back and read The Art of the Deal again.
The answer is that tariffs aren't about "tariffs." They're a tool to accomplish something else. Moving manufacturing back to the US isn't practical for many goods when labor is ten times more expensive than the US. So what are the goals?
1) Move the production of imports from China to the US and to a much greater extent, other SE Asian nations with whom we have a friendly relationship.
2) Especially move the production of strategic goods out of China, which has a long term goal of world dominion.
3) Do this FAST, before our POS Republicans and Democrats turn their full attention to mid-term elections, which means NOTHING will be done.
Watch for the US to make a deal with Vietnam. SE Asia nations are wringing their hands in public, but in private they are greedy to get that market share of production from China. Once these deals are negotiated, the market should rebound. A few companies will get hit worse than others, but that's a buying opportunity. I've already repositioned about $100k into stocks that have been hit hard with the talk of tariffs but are well positioned to move rebound over the next few months.
You see, here we have a faulty line of reasoning that, despite all evidence to the contrary, and despite an entire 4 years proving otherwise, still persists to this day.
"Why is Trump doing tariffs?" we wonder to ourselves. "There surely must be some bigger picture or motive!" we desperately try to reason. "Yes! I bet this is a game of 8-dimensional Yahtzee! Trump has them right where he wants them!"
But the answer is, of course, far simpler: Donald Trump, and the people he surrounds himself with, especially now in his second term, are actually just that straight up fvcking retarded.
I buy that, but based on everything we've seen regarding Trump, I think David Brooks called it a few weeks ago when ascribing the motives behind the tarrifs, and I quote: "...but mostly it's an excuse for him to exercise power and gin up opportunities for corruption, because it's — tariffs are hyperpoliticized, and it gives him all the power, and lots of people have to do lots of favors so we don't tariff them."
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seattle prattle wrote:
Dr Prof Racket, PhD wrote:
You see, here we have a faulty line of reasoning that, despite all evidence to the contrary, and despite an entire 4 years proving otherwise, still persists to this day.
"Why is Trump doing tariffs?" we wonder to ourselves. "There surely must be some bigger picture or motive!" we desperately try to reason. "Yes! I bet this is a game of 8-dimensional Yahtzee! Trump has them right where he wants them!"
But the answer is, of course, far simpler: Donald Trump, and the people he surrounds himself with, especially now in his second term, are actually just that straight up fvcking retarded.
I buy that, but based on everything we've seen regarding Trump, I think David Brooks called it a few weeks ago when ascribing the motives behind the tarrifs, and I quote: "...but mostly it's an excuse for him to exercise power and gin up opportunities for corruption, because it's — tariffs are hyperpoliticized, and it gives him all the power, and lots of people have to do lots of favors so we don't tariff them."
"Pure corruption" is also an acceptable answer
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Dr Prof Racket, PhD wrote:
seattle prattle wrote:
I buy that, but based on everything we've seen regarding Trump, I think David Brooks called it a few weeks ago when ascribing the motives behind the tarrifs, and I quote: "...but mostly it's an excuse for him to exercise power and gin up opportunities for corruption, because it's — tariffs are hyperpoliticized, and it gives him all the power, and lots of people have to do lots of favors so we don't tariff them."
"Pure corruption" is also an acceptable answer
Exactly. The whole process lacks transparency, by design. A field day, and nothing less.
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I happened to see Belichick's interview on CBS Sunday. This should be mandatory viewing for any male over 50 considering hooking up with a woman in her 20s. I can't imagine a better cautionary tale of the perils of young tail.
Next, we have Karoline Leavitt cutting Bessent off to answer a question about Amazon's proposed tariff price contribution indicator ( they caved and walked it back ).
That's back to back Boomer guys being stifled by a GenZ woman!
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Dr Prof Racket, PhD wrote:
"Pure corruption" is also an acceptable answer
I think this is the easy answer but not the heart of the matter. Trump has been musing about tariffs for decades. On some level, he believes in tariffs. I think opportunity for corruption is more of a side benefit.
"steal a little and they throw you in jail, steal a lot and they make you king" according to the greatest American philosopher
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comfortably retired from home wrote:
Dr Prof Racket, PhD wrote:
"Pure corruption" is also an acceptable answer
I think this is the easy answer but not the heart of the matter. Trump has been musing about tariffs for decades. On some level, he believes in tariffs. I think opportunity for corruption is more of a side benefit.
"steal a little and they throw you in jail, steal a lot and they make you king" according to the greatest American philosopher
He has been musing about them (tariffs) because he comes from a business background and this is how a small or medium sized business negotiates its deals and agreements. He is trying to upsize this to a global scale and we can see just how well that is faring.
Maybe I am agreeing with you but the whole thing lack transparency, lacks a plan and adaquate disclosure, lacks guidelines, and is ripe for "deal making" - however the deal maker defines that.
My point is that it is a strategy inappropriate for the task at hand, and while we can postulate about the intent (which is what we are doing), the cogent point is that the strategy is ill-suited on this scale and the effect is the same. And my point is that one of the reasons it is ill-suited is exactly for this reason that it is an easy opportunity for corruption, whether or not it is his prime motivation.
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comfortably retired from home wrote:
Dr Prof Racket, PhD wrote:
"Pure corruption" is also an acceptable answer
I think this is the easy answer but not the heart of the matter. Trump has been musing about tariffs for decades. On some level, he believes in tariffs. I think opportunity for corruption is more of a side benefit.
"steal a little and they throw you in jail, steal a lot and they make you king" according to the greatest American philosopher
One evening, back in the late 80s, my wife was working and after cooking. cleaning up and getting the kids to bed, I sat down to watch TV and unwind. Flicking the channels, I came upon the Mort Downey Jr Show. I've might have seen a total of 3 shows in my entire life, but he said Trump was coming on next and I said to myself, this might be funny and left it on. Well it turns out Trump wasn't on the set but called in from his phone. He starts raving about the Japanese, especially the way they bid up the price of commercial real estate in the US. He says we need to put a 20% surcharge on any US asset they purchase. I'm LMAO, he isn't concerned about Japan taking over the US, it was all about eliminating competition so he could pay less. Ironically, they both were buying at a market top and went bust shortly after.
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Earnings on tap after close for some biggies ("megacaps")- Microsoft, Meta, Catapilar, Qualcom.
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seattle prattle wrote:
Earnings on tap after close for some biggies ("megacaps")- Microsoft, Meta, Catapilar, Qualcom.
...that's what I'm talking about!
Will surely help out the overall markets tomorrow atleast Nasdaq.
MSFT and META quite good, CAT and QLCM not good.
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agip wrote:
So we might get a negative 1Q GDP print tomorrow...that could make some big headlines, which would probably be bad for the market. Since it seems that retail buying is what is keeping the market up and a headline implying recession might break through the noise, scaring mom and pop away from the market.
But who knows with this crazy market..a negative 1Q GDP .could make the market rise 2% because that would imply lower interest rates.
heh we got both a 2% drop then a 2% rise today.
that's this market eh
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agip wrote:
agip wrote:
So we might get a negative 1Q GDP print tomorrow...that could make some big headlines, which would probably be bad for the market. Since it seems that retail buying is what is keeping the market up and a headline implying recession might break through the noise, scaring mom and pop away from the market.
But who knows with this crazy market..a negative 1Q GDP .could make the market rise 2% because that would imply lower interest rates.
heh we got both a 2% drop then a 2% rise today.
that's this market eh
This market is just nuts.
I agree with your outlook for a imminent downturn but it just seems to shake off just about everything - well, maybe except Powell's tenure being challenged and bonds going soft.
I have a premonition that months from now it all goes to hell and I am kicking myself for not being better prepared. But it just doesn't seem to be acting like that is where it's headed.
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seattle prattle wrote:
agip wrote:
heh we got both a 2% drop then a 2% rise today.
that's this market eh
This market is just nuts.
I agree with your outlook for a imminent downturn but it just seems to shake off just about everything - well, maybe except Powell's tenure being challenged and bonds going soft.
I have a premonition that months from now it all goes to hell and I am kicking myself for not being better prepared. But it just doesn't seem to be acting like that is where it's headed.
yeah you can just feel the underlying strength of the market. just keeps muscling up when you think it's going to slide down.
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This is May 2008.
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fisky wrote:
With this in mind, I think stocks best suited for this volatile market are stocks with manufacturing in China that 1) have been hit hard by tariff talk and 2) are in a good position to relocate their manufacturing to another SE Asia nation
That can take a long time and cost a lot of money. You want to look at companies that already did that 4 years ago, not ones that are just starting now.
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agip wrote:
yeah you can just feel the underlying strength of the market.
That seems like a superpower that I don't possess :-)
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