chooky
23hr ago
While I would agree that the market does not find the China tariffs very plausible as a long-term policy, we're still well below inauguration asset price levels, so I would interpret the market as mostly saying that a) the 10% tariffs are a major impediment to growth and so are the China tariffs and b) he screwed the business climate up so badly already that there is no fixing it.
chooky
23hr ago
Surely, it is clear now that the market cares only about the negative impact of the tariffs.
chooky
1d ago
But we are talking about a non-US country trying to manipulate its currency so that it is cheaper for them to buy more US stuff.
chooky
1d ago
Yesterday, the morning climb was from the fake news about a 90 day pause. Today, the temporary ascent was from reports of negotiations with various countries before the news of the additional 50% on China sent things back down. There have been numerous headlines on WSJ and Bloomberg. The market absolutely hates the tariffs and loves signs that they might stop.
chooky
1d ago
The way you would make your currency strong is by raising interest rates for your country, which would induce a recession. This is a really bad approach.
chooky
1d ago
What? The market did well at certain points over the past couple of days almost only because it saw a path to ending the tariffs.
chooky
3d ago
You have quite a bit of work to do to claim that the stagnation of manufacturing wages is due to globalization rather than technology, and also to claim that this is a US-specific issue. Lines like "Work that liberals secretly preferred" are just not good.
chooky
4d ago
We know that PCE includes purchases made on behalf of households (most importantly, health insurance) and charitable organizations. But these are not enough to bridge to the BLS numbers of about 80k. I would think that the bridge to income has a lot to do with savings drawdowns by retirees.
I am looking at the BEA vs BLS spending breakdowns right now, and I can tell you that BEA has $29k in 2023 for health vs only $6k for BLS. BEA also has drastically higher food services, "other", recreation, and durable household items.
chooky
4d ago
It's important game theory to punish defectors; here, the US is the defector. There is certainly a question about how long countries like China, already facing weak growth, can keep up the retaliation, but:
A) The US trade war may prompt a reduction of non-US tariffs globally, which will boost growth for all those countries, especially if it results in a wave of investment to avoid US-related supply chains.
B) It is very unclear how long the Trump tariffs can be sustained given that they do not really seem to have a good legal basis. It does not seem ro me like they would win a legal challenge, and I think that Congress will be forced to step in to end the tariffs if Trump does not cave.
C) The US, by engineering itself a recession for goals that are probably unachieveable, is greatly diluting its supposed leverage - access to the US market is less attractive when our economy sucks.
chooky
4d ago
This is what it is saying. PCE is 20 billion and change. The amount of households is around 132k. This works out to about155k per household.
America is richer than most people realize.
chooky
6d ago
Huh? The US has lots of tariffs and has been hypocritically protectionist for decades.
chooky
7d ago
I don't buy that the Dem establishment allows such a destructive policy. The most we should have expected is price gouging investigations into eggs or something. Maybe Harris tries to go for a wealth tax and probably does implement some annoying regulations, but a) Congress would definitely have to sign off on taxes first and b) much less bad than Trump's tariff approach.
Now if we had been talking Sanders vs Trump... I think all bets are off.
chooky
7d ago
Trump was largely talked out of his worst ideas during his first term, so peoplr were accustomed to the idea of taking him "seriously, not literally". This term, we seem to be getting an unadulterated version that is both ill-conceived and embarrassingly executed, a sharp contrast to, for example, the successful TCJA of first term.
chooky
7d ago
For anyone paying attention to economics and business, 2024 was a single issue election: prevent a worst case Trump tariff scenario. Oops.
chooky
10d ago
What's the incentive supposed to be on your end instead of just using a bank?
That would be one of my first questions if you approached me for money!
chooky
26d ago
I suspect the reason that almost all games do this now is that it is much more fun to play them. Donkey Kng Country on SNES, for example, had being able to jump out of a mid-air roll as an almost explicit mechanic. It's similar to how the physics of changing Mario's momentum midair never made any sense - but guees what, Mario is much more fun to control than games with no influence over midair movement.
chooky
30d ago
There is a pretty straight line between the tariffs and the markets' reassessment of near term, and long term, growth prospects. The AI stuff feels like a bubble to me, but the reason things keep going down is that it keepa looking like the Trump administration is actually going to follow through on the tariff thing. I don't know what delusion they are operating under that they think it will work out long term; this is spectacularly ill-conceived and badly executed policy.
chooky
1mo ago
I don't think it's fair to describe any presidential victory margin in the past 25 years as overwhelming. In general, we are usually talking 48% to 49% of the popluar vote.
chooky
1mo ago
I understand that some people would want to leverage this, but surely it is plausible that some people would not? Besides, you are just listing financial rewards that could just be bargained up front; it seems like an extremely rich person probably pays more for surrogacy than the merely upper upper middle class would.
chooky
1mo ago
I don't think this is really in the vein of what you are looking for, but I found the works of Wallace Stevens (or pick some other transcendentalist poet) to be extremely profound.
chooky
1mo ago
What is the benefit supposed to be? The opportunity to turn fame into some kind of influencer money? I think it is easy to see how this would be unattractive to many (and also is somethiny that can be solved with money), especially since being in the position to need to accept a surrogacy contract is potebtially embarrassing.
What event are we reminding for exactly, though? If the China tariffs remain large and the stock market fully recovers despite this? My claim is pretty much just that financial markets think the tariffs are bad for the economy and that they are not pricing in the consequences of them staying long-term.
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