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Is there a specific aspect of the administration's policies which you believe are causing this? Candidates would include "actual impact of tariffs enacted" or

Is there a specific aspect of the administration's policies which you believe are causing this? Candidates would include "actual impact of tariffs enacted" or "uncertainty about future tariffs" or the same things but with "geopolitical decisions" instead of tariffs. Or similarly "fiscal solvency" or "profile of government spending" etc. It's all well and good to make untestable post facto explanations based on vibes but I'd be interested in whether you (or other people in the thread) have specifics, so we can think about backtesting and prediction. Do you predict that these phenomena will have long-term implications or if they will self-correct? Any assertion of the causation of a market movement is itself pretty economically tenuous. I think any of the above policies can be criticized on principled grounds; if the stock market is the arbiter of whether economic policy is correct I do not think that anyone would be happy with where this leads.

xnx 2y ago
The stock market is based on and is a measure of vibes/confidence. Deliberately diminishing the importance of the richest and most powerful nation in the world doesn't seem like the move if you want to inspire confidence.
Aunche 2y ago
Tariff may be worse for the economy, but threatening tariffs as a "negotiating tactic" with Canada and Mexico is just plain stupid. Unless if they have insider information, businesses simply have no idea how to operate. For example, it would take years to build a factory, and they don't want to sink hundreds of millions in a factory in the US if tariffs don't actually go through or vice versa.
- andrewla 2y ago
  I completely agree, but I would argue this whether or not the stock market is going up or down in the immediate term.
- rayiner 2y ago
  That makes building the factory in the U.S. the safe choice whether tariffs are implemented or not.
  - Aunche 2y ago
    How is it safe to spend all this money on a domestic factory just for it to be cheaper to import everything anyways? The safe choice is to hoard cash and inventory until they have certainty of whether tariffs will happen or not. All Trump is doing is creating unnecessary deadweight loss when he can just negotiate without threatening a suicide pact.
  - lostdog 2y ago
    The safe choice is not to build the factory. Even if you build the factory in the US to avoid tariffs on the goods you sell, did all your inputs also get built in the US? Are the tariffs on your inputs going to wipe out your profits? To build a factory you want to predict out the cost vs benefit. But if the costs are highly uncertain, then the numbers in your spreadsheet fluctuate wildly. So you just sit on the money you have and wait to build the factory until things are more certain.
intended 2y ago
Tariffs are a well known ineffectual move by anyone with any experience in finance. They are simply the addition of inefficiency to a market. You are taught this in any 101 Econ course, its part and parcel of learning how to draw supply and demand curves. It is SO basic, that discussion of this on educated forums, is fear inducing. Furthermore, this is a trade war based on vibes. This is not implemented with something like anti-dumping in mind. It’s not based on real flaws that the target countries can address. It’s based on a fabricated alternate reality. This means that retaliatory tariffs have no economic cut off / threshold. It is only measured in behavioral and political stances. This is now a question of faith and pain tolerance, and not economic rationality. This was already a possibility, known in November. At this point, for many institutional investors, worst case scenario contingency plans are being put into play. Markets are a well known measure of whether economic policy is sound. IT isn’t the ONLY measure however, but it is one of several markers that are tracked to understand what people forecast outcomes, growth and expectations of the future are.
- andrewla 2y ago
  It sounds like you're making a principled argument against tariffs. That's great, and whether you're right or wrong is independent of the stock market reaction. And there's a fine discussion to be had on the merits of tariffs and tariff uncertainty on economic activity. But attributing short-term market movement to a specific phenomenon is, to put it bluntly, plain foolishness. Ex post facto reasoning is almost always an absurd task and it's important to push back on it, *especially* when it confirms your own biases.
  - intended 2y ago
    This is not a principled argument. This is the actions people I know are taking to manage investments. Look - I can’t help you if you wish to believe something. That’s an issue of faith. I have no idea why you believe that this is ex post facto reasoning. Tariffs cause recessions, it’s not even correlation. Let me elaborate - the moment Trump was elected, I knew that he was going to impose tariffs, and that it was going to tank the US economy. If you want logic, I can debate. If this is a matter of faith and belief that this is some error on my part and that no one can know things are causative - then that’s a matter of faith and religion.

xnx 2y ago

The stock market is based on and is a measure of vibes/confidence. Deliberately diminishing the importance of the richest and most powerful nation in the world doesn't seem like the move if you want to inspire confidence.

Aunche 2y ago

Tariff may be worse for the economy, but threatening tariffs as a "negotiating tactic" with Canada and Mexico is just plain stupid. Unless if they have insider information, businesses simply have no idea how to operate. For example, it would take years to build a factory, and they don't want to sink hundreds of millions in a factory in the US if tariffs don't actually go through or vice versa.

andrewla 2y ago
I completely agree, but I would argue this whether or not the stock market is going up or down in the immediate term.
rayiner 2y ago
That makes building the factory in the U.S. the safe choice whether tariffs are implemented or not.
- Aunche 2y ago
  How is it safe to spend all this money on a domestic factory just for it to be cheaper to import everything anyways? The safe choice is to hoard cash and inventory until they have certainty of whether tariffs will happen or not. All Trump is doing is creating unnecessary deadweight loss when he can just negotiate without threatening a suicide pact.
- lostdog 2y ago
  The safe choice is not to build the factory. Even if you build the factory in the US to avoid tariffs on the goods you sell, did all your inputs also get built in the US? Are the tariffs on your inputs going to wipe out your profits? To build a factory you want to predict out the cost vs benefit. But if the costs are highly uncertain, then the numbers in your spreadsheet fluctuate wildly. So you just sit on the money you have and wait to build the factory until things are more certain.

intended 2y ago

Tariffs are a well known ineffectual move by anyone with any experience in finance. They are simply the addition of inefficiency to a market. You are taught this in any 101 Econ course, its part and parcel of learning how to draw supply and demand curves. It is SO basic, that discussion of this on educated forums, is fear inducing. Furthermore, this is a trade war based on vibes. This is not implemented with something like anti-dumping in mind. It’s not based on real flaws that the target countries can address. It’s based on a fabricated alternate reality. This means that retaliatory tariffs have no economic cut off / threshold. It is only measured in behavioral and political stances. This is now a question of faith and pain tolerance, and not economic rationality. This was already a possibility, known in November. At this point, for many institutional investors, worst case scenario contingency plans are being put into play. Markets are a well known measure of whether economic policy is sound. IT isn’t the ONLY measure however, but it is one of several markers that are tracked to understand what people forecast outcomes, growth and expectations of the future are.

andrewla 2y ago
It sounds like you're making a principled argument against tariffs. That's great, and whether you're right or wrong is independent of the stock market reaction. And there's a fine discussion to be had on the merits of tariffs and tariff uncertainty on economic activity. But attributing short-term market movement to a specific phenomenon is, to put it bluntly, plain foolishness. Ex post facto reasoning is almost always an absurd task and it's important to push back on it, *especially* when it confirms your own biases.
- intended 2y ago
  This is not a principled argument. This is the actions people I know are taking to manage investments. Look - I can’t help you if you wish to believe something. That’s an issue of faith. I have no idea why you believe that this is ex post facto reasoning. Tariffs cause recessions, it’s not even correlation. Let me elaborate - the moment Trump was elected, I knew that he was going to impose tariffs, and that it was going to tank the US economy. If you want logic, I can debate. If this is a matter of faith and belief that this is some error on my part and that no one can know things are causative - then that’s a matter of faith and religion.