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Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

446 points by perihelions 2y ago

deleted 2y ago
[deleted]
jmholla 2y ago
https://archive.is/XMnlS https://archive.is/XMnlS
lenerdenator 2y ago
I was looking at used cars on Carmax about two or three weeks ago. I looked again today. They're another $1-2k. This is the shareholder/political class trying to eat their cake and have it too. Pay people a stagnant wage for 40 years while taking most of the surplus value and dedicating it to equities, then pretend to do something about it, but in a way that passes the buck to the people who have been making a stagnant wage so that the wealthy don't incur actual losses. Share prices will be brought back up through layoffs.
- gU9x3u8XmQNG 2y ago
  100% agree with this perspective. It’s surprising how few others seem to note this. Thanks for posting it.
  - anon291 2y ago
    And what is the solution?
    - noisy_boy 2y ago
      Repeal citizens united, curb campaign and lobbying spending, breaking down of these chaebol-like conglomerates, make healthcare public and tax the rich massively. Something no body seems to want.
      - oblio 2y ago
        Switch to a better voting system to destroy the 2 party system and curb extremists getting into power. At least the state compact voting change to modernize the electoral college.
    - gU9x3u8XmQNG 2y ago
      I’m definitely not qualified to answer this. I would like to say, from my perspective, that it seems to not matter how “good”, even “exceptional”, business listed on the stock market do; the outcome is hostile and negative to the customer/consumer. Costs have only gone up, dramatically so. In my case; entirely disproportionate to, if any, income increase coming in. Market does good. Market does exceptional. The experience has generally been negative? Market does bad? I expect a lot of us can connect the dots, and will no doubt be impacted again. Maybe the market, in my perspective; is not a beneficial experience.
  - JackYoustra 2y ago
    Why would shareholders want to tank the value of their shares?
    - tjbiddle 2y ago
      Buy the dip?
      - otterley 2y ago
        Most wealthy people’s wealth is in investments. If the value of the investments goes down, there are fewer resources to “buy the dip.” It doesn’t hold water as a theory. Basically robbing Peter to pay Paul.
        lenerdenator 2y ago
        They have people whose jobs it is to even out those troughs, and I don't think you realize just how wealthy the wealthiest wealthy really are. Mark Zuckerberg, Elon Musk, and Larry Ellison each have a net worth that is on par with the total gross economic output of a small American metropolitan area.
        tasuki 2y ago
        > Mark Zuckerberg, Elon Musk, and Larry Ellison each have a net worth that is on par with the total gross economic output of a small American metropolitan area. You're comparing apples to oranges. Net worth is in dollars, while economic output is dollars per unit of time. The comparison does not make sense. You didn't even say which unit of time! Hell, I have a higher net worth than the total economic output of the US, given a short enough time frame.
        joquarky 2y ago
        This level of pedantry won't play in reality against someone who just lost everything and is seeking revenge on the tech bros who they perceive as enabling all of this.
- VirusNewbie 2y ago
  Are you claiming that the 'shareholder class' would rather depress the economy and wipe out trillions in shareholder value...over inflating the economy and lowering interest rates?
  - bitmasher9 2y ago
    Agreed. It’s very rare to get a group of shareholders to agree that the price of their stock should go down.
  - SJMG 2y ago
    That is what I believe I also just read... I was just telling my girlfriend that Hackernews is the smarter, tech oriented reddit. Better go fix that.
  - giraffe_lady 2y ago
    Not "the shareholder class" but the actual super wealthy, those few thousand individuals at the top. A way I have recently seen this put is that if you have a billion dollars another billion doesn't do that much for you in real terms. But if you're a billionaire who likes to sexually harass your child's nanny, you would much prefer she be desperate and precarious rather than economically secure or with a lot of other viable options. This is one crude example but the dynamic is in play in many other situations. So idk, it's plausible to me that the class interests of the wealthy extend beyond mere wealth accumulation. I can imagine circumstances where they would be willing to give up some of their absolute wealth in exchange for greater relative wealth.
    - VirusNewbie 2y ago
      Ok, I buy the premise that maybe the top 1000 people are super evil mr. burns type folks. I even buy the fact that they would be giving up absolute wealth for greater relative wealth. But you know the easiest way to do that. Inflation. Expanding the money supply. Increasing the value of their assets at the expense of the working class. not tanking the value of the companies they own!
  - clipsy 2y ago
- JackYoustra 2y ago
  ...or they could've just laid off and gotten even more. maybe, just maybe, trump and the people around him are actually just crazy and there's no big conspiracy.
  - zip1234 2y ago
    It's the simplest explanation and also the one with the most evidence
  - lenerdenator 2y ago
    I don't think of it as the classic conspiracy in the sense of a La Cosa Nostra meeting in Apalachin. It's more like a shared set of ideas, and those ideas are crazy, at least if you don't have a net worth that is enough to ride out all but the most historic of social upheavals. And part of avoiding that most historic of social upheavals is not laying off people for the sole profit of it, at least not without a good excuse.
- ants_everywhere 2y ago
  > while taking most of the surplus value Just FYI, "surplus value" refers a concept Marx made up that is considered in mainstream economics to be an error in reasoning. Even making sense of it requires buying into the labor theory of value that Marx took from Adams and Ricardo, but which is not taken seriously anymore. That doesn't detract from the substance of the point you're making. But it's a little like reading someone say their house is hot because of all the phlogiston. It detracts from the force of the argument.
  - dcre 2y ago
    You haven’t said anything.
    - ants_everywhere 2y ago
      Surely this retort sounded cooler in your head? But also, literally I said a lot. There's enough meat there for someone who hasn't spent much time in the history of economics to spend an entire afternoon going down an enjoyable rabbit hole.
      - polotics 2y ago
        that connection between surplus value and the labour theory of value is fully unexplained in your post, so... you have not said nothing, but you haven't said enough to make your post consequential I'm afraid
- JeremyNT 2y ago
  It amazes me the contortions some people go through to maintain the belief that this administration is competent. Occam's razor suggests that they just have no idea what they're doing.
  - lenerdenator 2y ago
    These people all have a shared idea of what they're doing, and since they sit in financially-backed echo chambers, those ideas eventually turn so absurd that they appear to have no idea of what they're doing.
  - nitwit005 2y ago
    I'm fairly convinced it's easier feel like there is some plan, even if a bad or sinister one, than things being in a state of genuine chaos. You occasionally see the people jumping between different ideas as to what the underlying plan is, once events no longer support their initial idea.
    - thethimble 2y ago
      The plan is crystal clear: 1. When equities crash, market liquidity floods the bond market causing yields to drop 2. Refinance debt at these lower rates massively reducing interest burden 3. Cut government spending to cause rates to drop further 4. Reduced rates with a balanced budget results in non-inflationary borrowing and an economic upswing Along the way, eliminate taxes for those earning below $150k. If all of the above happens at the expense of equity holders so be it. This plan has been made clear by multiple people from within the administration (namely Bessent who is one of the greatest macro investors of all time). Now there’s many things to criticize in this plan (and lots of risk and unknown possible second order effects), but to describe it as “genuine chaos” or ineptitude is strange.
      - piva00 2y ago
        It's not that crystal clear when the ideas from Stephan Miran to reshape the world order by turning allies into vassals is also part of the plan. There's a plan, it's to reshape the global trade à la Bretton-Woods, and the Plaza Accords. The rest is just noise and plausible deniability for people to gobble up and accept to have been shoved into a New World Order.
fulladder 2y ago
Not going to comment on the politics, but I'd point out that recession odds on Kalshi are currently 64% and 58% on Polymarket [1,2]. In other words, recession in 2025 is more likely than not -- though far from guaranteed. My thought relevant to HN is that either way this is likely to decimate venture capital and startups, at least in the short run. Venture capital funds come from limited partners like pensions and endowments, and the professionals I know are all shifting away from growth stocks and into value, international and bonds. VC is already in a drought (except for AI) and now my guess is that it's going to get worse. So many VCs I know have started only in the last 15 years, so they have never seen a real recession like 2009 while working in venture. [1] https://kalshi.com/markets/kxrecssnber/recession https://kalshi.com/markets/kxrecssnber/recession [2] https://polymarket.com/event/us-recession-in-2025 https://polymarket.com/event/us-recession-in-2025
- ijustlovemath 2y ago
  Anyone who's played cards or an MMO know those are insanely good odds -- virtually guaranteed!
  - pinkmuffinere 2y ago
    > virtually guaranteed! I feel like you might be confused about the statement. One platform gives 58% odds, the other gives 64% odds. This is obviously high, but also very far from virtually guaranteed. In 100 trials, we’d expect recession in ~60 events. There is no secret math hidden here, it’s just that.
    - dmoy 2y ago
      GP comment is a joke about gambler fallacy (or also MMO crit, drop, etc rates)
      - pinkmuffinere 2y ago
        Ah lol, I just totally missed the joke
lwansbrough 2y ago
So where is the bottom? I don’t actually believe there is one, I’m just curious to hear what other people think.
- UncleOxidant 2y ago
  Sure, there's a bottom, but we're not close to it yet.
- WorkerBee28474 2y ago
  It could be down another 50%, it could already have passed. Historically, troughs in P/E ratios have occurred all over the place. https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...
- Spooky23 2y ago
  This weekend is going to determine that. There’s a pretty blood chance we’ll see the real crash Monday.
- hackly 2y ago
  Only one man knows the answer to this question.
  - outer_web 2y ago
    He doesn't know either.
- whatever1 2y ago
  The vision is to convert the American economy from one with infinite profit margins (ads and software) to a manufacturing one with single percentage profit margins and limited growth potential due to tariff environment. So I think a 80-90% drop in the overall market value is justified.
  - khazhoux 2y ago
    I don't think these tariffs would affect software. ?
jarym 2y ago
It is interesting that tech (Nasdaq) is the hardest hit here. The real engine of US exports for recent decades and likely to be a casualty as other countries plan their trade-war retaliation. And that's not even taking into consideration what might happen in the domestic market should there be a real recession - consumers will cut down their consumption and that'll filter back to lower corporate earnings. In previous economic stumbles, US exports abroad were able to buffer domestic weakness. Probably not anymore...
- xh-dude 2y ago
  Petulantly, I’d observe Trump hates or doesn’t believe in knowledge economies. He’s delivering pain to a lot of people in my circles. For all that, a strategic goal of ensuring trade is sustainable is probably worth sane discussion.
  - chuckadams 2y ago
    > Trump hates or doesn’t believe in knowledge shortened that for you
- wtcactus 2y ago
  This all tariff imbecility created solely by Trump it’s atrocious, still, if EU response is to hit the main players in Nasdaq - where there are a lot of chip producers necessary for the ongoing AI revolution - we are just shooting ourselves majorly in the foot. Surely there are much better companies for the EU to apply directed tariffs. EU absolutely has their weaknesses, but giving blunt responses (like China just did and put tariffs on everything) is not really our way. Expect EU answer to be well crafted and directed at very specific areas.
  - Terr_ 2y ago
    > created solely by Trump Nitpick: No, the entire Republican party is at fault here. They willfully ignored every warning, and attacked the people giving the warnings. They promoted him, protected him in two impeachments, eventually re-elected him, and actively confirmed his cabinet of sycophants instead of requiring some adults in the Oval Office. Then they took specific steps to block anyone from challenging his "national emergency" against our neighbors, by declaring that the rest of the year simply "doesn't count" for the 15 day timer in the original legislation. [0] Some Republican legislators may have had hard-choices for securing their own re-elections, but they still chose this route. [0] https://thehill.com/homenews/house/5189410-house-gop-democrats-repealing-trump-tariffs/ https://thehill.com/homenews/house/5189410-house-gop-democra...
beloch 2y ago
This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb. I'm simply not seeing even a glimmer of a possible upside right now. I see even less possibility of an upside for those of us North of the border or pretty much anywhere else on the globe.
- Apreche 2y ago
  [flagged]
- fulladder 2y ago
  The belief of Trump and his allies is that the last 40 years of free trade has been extremely favorable to college educated "elites" and extremely unfavorable to the working class. They see foreign trade as having hollowed out American manufacturing, and therefore they see the shutting down foreign trade as a way to reverse this decline. While they are aware that doing so will hurt college educated professionals, they don't care because they feel those people have had it too good for too long.
  - techpineapple 2y ago
    the irony is I don’t think there’s any way this hurts the college educated more than the working classes, as most things do.
  - lenerdenator 2y ago
    I think that's the belief of his voters in the Upper Midwest, but not necessarily Trump himself. He's the college-educated elite. He's playing them like a fiddle. He knows that they will absorb the damage from this, not the elites, who are far more connected than they are college educated.
  - ViktorRay 2y ago
    But these beliefs have been core to the American left for decades. Even left wing intellectuals like Noam Chomsky have attacked the neoliberal trade agreements I think. Trump’s populist right wing fans have adopted traditionally left wing views. What’s surprising is so many left wing people are supportive of free trade when they were against free trade during the Reagan era.
monkburger 2y ago
1930 all over again.
lreeves 2y ago
You know the craziest thing about watching this as an outsider in Canada is that we as a nation are losing one reliable trading partner (and obviously losing an ally but that's another conversation). Germany - losing a trade partner. Japan? And so on. But the US has lost 180 reliable trading partners. You're already seeing in the first week burgeoning trade alliances between nations who wouldn't have cooperated before, and the amount of resentment against America from this is going to take a generation to heal. Of course I'm sure some people would claim this is 4D chess or what not but.. sometimes the person doing something crazy is just crazy at the end of the day.
- monero-xmr 2y ago
  [flagged]
  - sorcerer-mar 2y ago
    Are globalist multinational corporations the main ones that get hurt by tariffs?
    - monero-xmr 2y ago
      Yes, in the current American system!
      - sorcerer-mar 2y ago
        Do those giant corporations employ any Americans? Are they gonna struggle to feed their families?
        monero-xmr 2y ago
        They do employ Americans! And now they will employ fewer Americans! This is bad!
      - californical 2y ago
        Very untrue. Major corporations can absorb the damage for a few months without raising their prices, since they have more inventory, bulk discounts, etc. Small companies are often running nearly paycheck-to-paycheck, which requires them to raise prices immediately, making them completely uncompetitive with the large corporations. The large corporations know this and are happy to keep their prices low and burn money until the small business competition dies, then they can raise their prices.
csense 2y ago
So honest question: A bunch of people who currently own stock are deciding they'd rather have cash instead -- that much is obvious. But what exactly are they doing with the cash? Don't want to hold onto it, everyone says devaluation and inflation is coming. Bitcoin and gold are kinda flat. I expected them to shoot up as uncertainty hedges. What gives?
- mixmastamyk 2y ago
  Gold is up 14% this year, and up last year as well. A lot for something not inclined to move.
- some_furry 2y ago
  If I had $1000 in cash, and inflation hits 10%, the purchasing power is equivalent to (1000 / 1.1 = ~$909) in 2026. If I had the same $1000 in stock, and it lost 11% of its value in 2 days, I might worry about it being worth close to $0 by the end of the month.
  - bawolff 2y ago
    If stocks hit $0, you probably have more immediate concerns - like where you are going to get your next meal and if someone is going to shoot you for the contents of your fridge. Stocks could still continue to fall, but they aren't going to slide to zero.
    - some_furry 2y ago
      Stocks overall? No. The few stocks I might have specifically invested in? Possible.
      - mathfailure 2y ago
        Then it'll be a good lesson for you to diversify investments.
        2y ago
ein0p 2y ago
WAI. Trump is crashing the T-note yield to refinance $9T (which is how much US debt is going to mature in 2025) at a lower rate. That, for those of us who know arithmetic, is approximately one quarter of all US debt. It seems to be working.
- butterlettuce 2y ago
  Is that really what he’s doing? If so, then that’s some 5d chess right there.
  - ein0p 2y ago
    It's 1D chess, really, and it isn't really Trump who came up with the idea. We're between a rock and a hard place. If we refinanced at 4.8%, the interest payment would go to $1.2T per year. If we refinance at a lower rate, it's lower. Note that we're not just refinancing either, we'll have to borrow about $1.8T, too, unless DOGE miraculously achieves its $1T/yr savings (doesn't look like it will, if the current trends are anything to go by). Tariff revenues would help to plug that hole somewhat. Then there's the issue of many countries having higher tariffs for our stuff than we have for theirs. That's not "free" trade. Then, finally, there's the issue of the near-irreversible erosion of the industrial base. Warren Buffett warned about this back in 2003, and proposed an elegant solution, which, unfortunately, would require Congress to implement it through legislation: https://faculty.washington.edu/ss1110/IF/Buffett%20Fortune%202003%20(6).pdf https://faculty.washington.edu/ss1110/IF/Buffett%20Fortune%2... But we do not have a functioning congress, so Buffett's solution is impossible.
    - bigyabai 2y ago
      > Tariff revenues would help to plug that hole somewhat. "Somewhat" being a key operand here. America is a net importer globally, a protracted trade war is inherently leveraged against us. Neither the rock nor the hard place is forcing anyone to harass our trade partners and abandon our defensive alliances.
      - 2y ago
no_free_speech 2y ago
[dead]
walterbell 2y ago
2024 paper (40 pages) by Stephen Miran, current chair of the Council of Economic Advisers, which has influenced tariff policy, https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese... The root of the economic imbalances lies in persistent dollar overvaluation that prevents the balancing of international trade, and this overvaluation is driven by inelastic demand for reserve assets. As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella, as the manufacturing and tradeable sectors bear the brunt of the costs... Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects.. Finally, I discuss a variety of financial market consequences of these policy tools, and possible sequencing. blog review/opinion, https://simplicius76.substack.com/p/trumps-liberation-day-another-pr https://simplicius76.substack.com/p/trumps-liberation-day-an... > One of the core tenets of the document is the deliberate devaluation of the US dollar in order to make US exports favorable again.. a country which holds the world’s reserve currency faces a significant dilemma.. to keep its currency as reserve status—and reap all the geopolitical benefits this creates—the country must hamstring its own economic output by running a huge trade deficit, which means the country imports far more than it exports, which hurts—or in the case of the US, kills—domestic manufacturing. >... if a French person buys a $50K Ford truck and imports it to France, that’s $50K USD that leaves France and goes back to the US, lowering France’s dollar holdings. If an American buys a $50K French Peugeot to import it to the US, he sends his $50K USD to France, which increases its dollar holdings.. to maintain the dollar’s reserve status.. US dollars are constantly flooding the world.. running a massive trade deficit where imports of foreign goods (outflow of USD) far outweigh exports of domestic goods (inflow of USD).
- Centigonal 2y ago
  > As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella I don't understand. US share of global GDP is around where it was in 1980, and in 1995[1]. Is Miran arguing that America's "exorbitant privilege" of being the source of the world's reserve currency, literally being able to buy goods from any country in the world with money printed out of thin air, is actually a liability? [1] Page 8 of his paper EDIT after reading through Chapter 2 of the paper: Thank you for sharing this. I don't agree with many of the arguments Miran is throwing out so far, but at least it's self consistent. He is saying: 1. If the US's global share of GDP decreases, then a set of global economic factors will cause the US to keep having to take on deficits to fund the rest of the world's desire for USD (because that is the world's reserve currency). If the US becomes small enough relative to the world economy, then this pressure will cause the US to risk defaulting on its debt. 2. The US's status as the reserve currency issuer means US dollars are artificially expensive. This means that low margin, high-labor industries like manufacturing can't thrive in the US. This is a national security risk because China/Russia can make lots of tanks/drones/etc and we can't. 3. The US benefits from being the reserve currency issuer because it can use that power to project force worldwide and maintain national security. 4. (He doesn't say this, but implies it in that coy way that people who read The New Criterion like to do) #1 is an unacceptable risk for America, and the US should employ a range of unilateral or multilateral measures to reshape the global financial system in a way that devalues the US Dollar, strengthens US manufacturing, and forces US trading partners (esp. other liberal democracies) to subsidize the US's status as the reserve currency issuer, since the US provides a global hegemony that is beneficial to them. Also, having read portions of the Project 2025 "Mandate for America," it's really interesting to me how all of these right wing thinktank writers (Russ Vought, Max Primorac, and now Miran) seem to share the same writing style.
rtp4me 2y ago
On the bright side, this may be a good opportunity to convert 401(K) or IRA funds into a ROTH account.
- huevosabio 2y ago
  Why?
  - eclipticplane 2y ago
    You owe tax on the difference between contributed dollars and converted dollars. So if you contributed $100 and it historically had grown to $150, you would owe tax on $50 to convert. If that $150 in value is suddenly $120 instead, your tax bill to convert is significantly cheaper.
  - joshuamcginnis 2y ago
    ROTH contributions grow tax-free. Doing your conversions now allows you to buy equities are they're currently discounted prices, maximizing your potential long-term tax-free gains.
    - rtp4me 2y ago
      Especially if you hit the RMD threshold in retirement. Even more important is how RMDs affect Medicare premiums(1). The best advice I have is to avoid RMDs as much as possible since they can/will affect other parts of your retirement strategy. Thus, converting to ROTH today may save you lots of cash in the future. (1) https://www.fedsmith.com/2024/10/23/rmds-are-silently-increasing-medicare-premiums/ https://www.fedsmith.com/2024/10/23/rmds-are-silently-increa...
  - cortesoft 2y ago
    Because you have to pay taxes on it when you convert, and you will have less to pay taxes on if you do it now.
  - dgunay 2y ago
    Rebuy equities/reinvest dividends at reduced prices, pay taxes now, enjoy tax-free growth. If the current admin is serious about trying to get rid of income tax, then that would eliminate a major advantage of trad vs roth.
deleted 2y ago
[deleted]
biglyburrito 2y ago
https://archive.md/XMnlS https://archive.md/XMnlS
duxup 2y ago
“The Stock Market(s) are literally crashing. There was no reason for this, all self inflicted!” - Trump….https://truthsocial.com/@realDonaldTrump/posts/108469860787607968 https://truthsocial.com/@realDonaldTrump/posts/1084698607876...
- Cerium 2y ago
  What's that supposed to mean? He is saying the quiet part out loud?
  - adt 2y ago
    Jun/2022
  - xnx 2y ago
    The tweet is from June 13, 2022.
asdev 2y ago
Tech really needs to fall another 50% at least. I think when the big AI bust happens(unless it's happening now), we will see that
- markus_zhang 2y ago
  With this kind of free fall it's going to trigger a lot of busts.
  - colechristensen 2y ago
    The last market crash was caused by the very economically unnatural COVID and the global response to it. This one is caused by insane foreign policy. Both of these are weird recessions because they don't have anything to do with real market conditions or even stupid pathological market conditions (housing crash).
- colechristensen 2y ago
  The covid response of printing trillions of dollars and other currencies around the world meant that there was way more money and it had to end up somewhere. There's just way more money to invest than there are productive companies to invest in. So you get crazy P/E ratios in the best bets available. The "fix" is to inflate that money away (or maybe to tax it and pay down deficits?) but it's not an easy monetary policy or a familiar one.
Aeolun 2y ago
Don’t worry. President Trump knows what he’s doing. If anything, this is a perfect time to invest before the markets inevitably recover.
- Aeolun 2y ago
  Should have /s’ed that. To be fair, I do think the markets will eventually recover. If not soon, then in 4 years time. Assuming democracy hasn’t eroded to the point that timeline is meaningless.
- rsynnott 2y ago
  So your theory is that there’s an amazing master plan, but only insane people on Twitter (and notably, not, say, _Wall Street_, or any economists) are smart enough to see its ineffable wisdom?
  - Aeolun 2y ago
    Wall Street and economists have a vested interest in keeping their precious theories alive.
deleted 2y ago
[deleted]
jckrichabdkejdb 2y ago
And no tariffs on Russia, oh I wonder why...
breadwinner 2y ago
There is away out of this mess: A U.S. Senate bill that would require congressional approval for new tariffs gained more Republican support on Friday [1]. Trump is not going to back down since that will make him look like a loser. Neither is China. But GOP can help Trump out by creating a new law that automatically expires all new tariffs after 60 days unless approved by congress. This will let Trump extricate his head from this mess without losing face. [1] https://www.reuters.com/world/us/more-us-senate-republicans-voice-support-congressional-oversight-tariffs-2025-04-04/ https://www.reuters.com/world/us/more-us-senate-republicans-...
- deleted 2y ago
  [deleted]
- Trasmatta 2y ago
  Trump would surely veto, and I currently have doubts there will ever be enough Republican votes to override
- Tadpole9181 2y ago
  To be clear, this is going to have to pass the house. Then, Trump will veto it. Then, the senate will need 16 Republican senators (30% of the party) to vote against it. And it's still a toss-up if Trump will even obey it or if he'll executively order customs to continue the Tariffs. So unless Republicans suddenly grow a spine, which is unlikely given their current strategy is "hide the stock ticket on Fox news" and pretend glorious leader is a genius, this is a token effort that will do nothing. And even if the tariffs are revoked, we've destroyed our reputation. You think countries will want to continue on like nothing happened after this? The only thing that might stop the impending collapse of the US economy as 180 nations divest from the empire we built is if we were to impeach and convict Trump immediately and set an example that this economic chaos will not be tolerated; that allies are not fair game to bully. But, honestly, I think that ship has already sailed. It needed to happen immediately, not after a week of testing the waters.
  - almog 2y ago
    I absolutely agree that impeachment and conviction is the only way to restore the world's trust in the US. If this bill passes and Trump vetos it, don't you think that could raise the odds for a 3rd impeachment process?
hackly 2y ago
I’m tired of winning boss.
- bigyabai 2y ago
  - Xi Jinping, 2027
xyst 2y ago
Don’t check your 401K accounts, Americans. This idiocracy administration is single handedly ruining both _public_ and _private_ safety nets. To my fellow Americans that helped vote this dipshit into office, please fuck off.
inatreecrown2 2y ago
Isn't it obvious that Trump's goal are not these tariffs, but renegotiated trading agreements? But everybody just seems to love to proclaim this the end of US.
- kstrauser 2y ago
  No. It's not obvious that there's any lucid end goal whatsoever.
- JackYoustra 2y ago
  How is that obvious? Why would your 'negotiating stance' be 'give no demands and tariff the entire world, including islands with just penguins, a nonsensical rate?' I mean sure I guess you can say he's negotiating, in which case I'd like you to admit he's a terrible negotiator.
  - inatreecrown2 2y ago
    because that's the way he likes to do things?
    - JackYoustra 2y ago
      "it's obvious that he's negotiating because he likes to negotiate in an incoherent way" I don't really know how to read what you're saying
      - inatreecrown2 2y ago
        No, I was replying to you second question.
- acidmath 2y ago
  This is what all of the smart people have been saying. So pretty much yeah.
  - kstrauser 2y ago
greenchair 2y ago
[flagged]
markus_zhang 2y ago
Whatever, I'm in Canada and decided to cut down all costs. Fully expecting a recession as well as a depression. We thought about getting a new car, but not going to do that until in a few years when car sellers are begging me to take one. Right now they are so arrogant that they charge high rates and popular cars takes months to deliver. I'm gonna sit for another 3-4 years. Also decided to remove all travel plans from the near future. Purchases higher than $100 are going to require a stamp from the financial department ($wifie). All purchases re-directed to local second hand market as mu as possible. Thought about buying a MacBook for RE but to hell with it. No new phones, no nothing until something breaks and evaluated by the financial department to be "essential". Fuck it. I just got a small raise and bonus but feel so insecure. I expect to lose job at any moment.
- owebmaster 2y ago
  > Fuck it. I just got a small raise and bonus but feel so insecure. I expect to lose job at any moment. just today 3 people from my network messaged me about losing their job and asking about some opportunity. They worked remotely for American companies (from Brazil).
  - markus_zhang 2y ago
    Yeah, that's the uncertainty we all have to face. I hope they find some local jobs at least. I don't even know what I can do if I can't find an IT job. I don't have any other skills.
    - senordevnyc 2y ago
      I feel similarly, and I actually just got laid off last week. However, I don’t think tariffs are going to result in no more IT jobs, I’m sure there will be jobs available, they might just not pay as much as they have.
      - markus_zhang 2y ago
        I wish you good luck. Man I don't know what I can do. I can't Uber because I only have one car. I can't onlyfan because I'm not a nude female. I can't twitch because there are already millions out there. I don't know what I can do. Seriously.
jmward01 2y ago
This is the payout difference between perato optimal and minmax solutions. Trust is gone so the sum value to all players is lower overall than it was before. The only thing is the rest of the world still has trust with each other so the ultimate looser is just the US. I just wish that the devastation this is causing could only impact those that caused it but the reality is that those responsible, those that voted for this, won't admit or learn from this, or the hundreds of other devastating acts going on, and will keep inflicting this type of pain. We really did have it all.
insane_dreamer 2y ago
I don’t expect Trump to make sane or rational decisions. But can anyone explain why the GOP senate is just standing by? Surely they are getting hit on the effects of the tariffs like everyone else. Doesn’t compute.
- Vegenoid 2y ago
  Because opposing Trump risks becoming an outcast, which is the thing that humans want least, and losing their job. There is not yet the sign that their voting base actually wants them to do anything to oppose Trump.
  - insane_dreamer 2y ago
    But what about those who are not up for re-election soon (unlike Representatives). If they're in for another 3-5 years regardless, by then things will have changed anyway.
blatantly 2y ago
Cheap stocks people. Got my eye on some that below a certain price it would be a no brainer to buy. Global trade is rerouting around the bottleneck. Didn't think there would be an opportunity so soon after March 2020. Got my eye on a tech stock that has dropped about 40% already but was undervalued before IMO.
- roflyear 2y ago
  This is a fine idea, but having the cash during a recession to buy stocks is not always easy.
kaycebasques 2y ago
A simple but profound idea that has stuck with me from the days when I religiously listened to The Macro Tourist's podcast: who's on the other side of the trade? In order for AAPL to drop 7% today, someone of course had to agree to sell their shares at a price that is 7% lower than yesterday's. But perhaps more interesting, someone else agreed to buy the shares at that price. Who's buying here and who's selling? Who's more composed? What is the investment timeframe of the seller versus the buyer? It takes two to make a market.
- neogodless 2y ago
  Presumably most 401(k) contributions and dividend reinvestments happening automatically create a large volume of buying power. While some people freak out, call an agent, sell stocks, I'd imagine this is mostly actively managed (by humans and software) investments doing the selling. Beyond that, when you sell something, maybe it felt like it was worth $10. But you offer it for $9.95. Maybe someone buys it, maybe not. Maybe you drop it to $9.80? Then someone buys it. Rinse and repeat until the price is now $8. When you sell a "$10" stock, if you say you won't sell it for less than $10, you might not be able to do so. It's all more complicated than that, and there are limit and market orders, etc. that affect how much the price will vary from when you initiate it. But if you're like "hmm, this is horrible news for the economy" you probably press the "sell as fast as possible" order, and your $10 stock might actually sell instantly for $9.50 because for someone with a "smart" algorithm, $9.50 looks pretty good when the stock still seems valued at $9.75+. But then a few million shares sell at prices lower than $9.75 and now the same system that thought it was a good idea to buy at $9.50 thinks it's a good idea to turn around and sell it... for even less.
- darkwizard42 2y ago
  Some people have an obligation to sell (option contracts must be honored, ETFs must be rebalanced, etc.) and this creates liquidity. Some people also have a lower risk tolerance (or want the money to put into something with more predictable returns like say treasuries) and want out now.
- verteu 2y ago
  There was widespread institutional selling, and typically dip buyers are non-professional traders who underperform the market [1] [2] At the end of the day, does it really matter who's the marginal buyer and who's the marginal seller? Do we learn anything about the value of Apple Inc by learning that the marginal buyer was an HFT hoping to offload inventory in 500ns, a mid-frequency shop who will hedge delta at end-of-day, or a value investor who will hold for a lifetime? I claim any such information would be rapidly priced in by flow-analysis algos, and thus reflected in the closing price. [1] https://www.reuters.com/markets/retail-bought-stocks-largest-level-over-past-decade-jpmorgan-says-2025-04-04/ https://www.reuters.com/markets/retail-bought-stocks-largest... [2] https://www.businessinsider.com/retail-investors-buy-dip-trump-tariff-trade-war-tsla-nvidia-2025-4 https://www.businessinsider.com/retail-investors-buy-dip-tru...
tetrisgm 2y ago
Response from friends who voted for this because of Elon: “let them cook“. This doesn’t seem to shock them
- arcastroe 2y ago
  do these friends participate in the market?
  - tetrisgm 2y ago
    They do. I think it’s one of these beliefs vs logic things
linotype 2y ago
Aren’t the tariffs that the US is imposing half of what other countries have? Or was that fake news from the admin?
- vitaflo 2y ago
  They aren’t the tariffs other countries are imposing, they are basically the trade deficit ratio instead. A country could have a 0% tariff on American goods but if Americans had a trade deficit with that country they would have been slapped with a tariff.
  - linotype 2y ago
    Ah thanks for the explanation. Definitely a ridiculous metric to go off of to determine tariffs.
- rsynnott 2y ago
  Fakest of fake news; no developed country (except a few weird microstates) has effective tariffs higher than about 3%. Bizarrely, he based it on _trade deficits_. Today, only two countries have effective tariffs rates >20% (Bermuda and the Cayman Islands), though it will be three next week. (Based on the World Bank metric; WTO uses a slightly different metric and says there are three; Bahamas, Sudan and Iran.)
OhioMan2943 2y ago
Does anyone have any idea where all of this tarrif(tax) revenue is going? I think it's a little more creative than just increasing wealth. Are there any bold visions or grand plans/futures in the works that this could be going towards?
- gitremote 2y ago
  Tax cuts for the rich. Defunding the IRS, cutting social services, and pushing tariffs to tax the working class are all consistent with needing to keep the government running without taxing the billionaires.
- Tadpole9181 2y ago
  They just signed the budget, it's not a secret. They're giving $2.5 trillion in tax cuts to the wealthiest Americans.
mertleee 2y ago
Assuming we don't give all of the jobs generated to h1b's and O1's I think this could do very good things for the country. Dollars staying within the US and not going to other countries is good.
deleted 2y ago
[deleted]
windex 2y ago
Iam amazed at the epic levels of ruin one man can bring upon a country and how a whole country of people can elect someone so utterly out of depth. This level of idiocy wouldnt be tolerated in companies if done by an intern.
- disqard 2y ago
  But what if a significant fraction of the employees believed in some message being spread that intern? Whether the intern is an inveterate grifter, and/or happens to be personally sponsored by a powerful mob boss, does not matter for the employees latching onto that message. In that context too, I have a feeling these flaws would be tolerated/overlooked.
parski 2y ago
Must feel good to be great again.
heigh 2y ago
Has anyone checked out Fox News recently? There is zero, and I mean zero coverage of the implications of the tariffs. W.T.F. At what point do you go “okay, we’re actually on par with North Korea”?
- scoofy 2y ago
  Freedom of the press means you have dishonest press. Fox News is just ESPN for news consumption. Out of sight, out of mind. If they reported the bad news, these people would change the channel anyway.
- mvdtnz 2y ago
  jfc do some reading about North Korea before making idiotic comparisons like that.
- IAmGraydon 2y ago
  Fox News is irrelevant when Americans see their retirement account lose 65% between now and late 2026.
- lippihom 2y ago
  They removed their stock ticker that runs at the bottom of the screen for the first time in 30 years. They're a Trump propaganda machine.

446 points by perihelions 2y ago

deleted 2y ago

[deleted]

jmholla 2y ago

https://archive.is/XMnlS https://archive.is/XMnlS

lenerdenator 2y ago

I was looking at used cars on Carmax about two or three weeks ago. I looked again today. They're another $1-2k. This is the shareholder/political class trying to eat their cake and have it too. Pay people a stagnant wage for 40 years while taking most of the surplus value and dedicating it to equities, then pretend to do something about it, but in a way that passes the buck to the people who have been making a stagnant wage so that the wealthy don't incur actual losses. Share prices will be brought back up through layoffs.

gU9x3u8XmQNG 2y ago
100% agree with this perspective. It’s surprising how few others seem to note this. Thanks for posting it.
- anon291 2y ago
  And what is the solution?
  - noisy_boy 2y ago
    Repeal citizens united, curb campaign and lobbying spending, breaking down of these chaebol-like conglomerates, make healthcare public and tax the rich massively. Something no body seems to want.
    - oblio 2y ago
      Switch to a better voting system to destroy the 2 party system and curb extremists getting into power. At least the state compact voting change to modernize the electoral college.
  - gU9x3u8XmQNG 2y ago
    I’m definitely not qualified to answer this. I would like to say, from my perspective, that it seems to not matter how “good”, even “exceptional”, business listed on the stock market do; the outcome is hostile and negative to the customer/consumer. Costs have only gone up, dramatically so. In my case; entirely disproportionate to, if any, income increase coming in. Market does good. Market does exceptional. The experience has generally been negative? Market does bad? I expect a lot of us can connect the dots, and will no doubt be impacted again. Maybe the market, in my perspective; is not a beneficial experience.
- JackYoustra 2y ago
  Why would shareholders want to tank the value of their shares?
  - tjbiddle 2y ago
    Buy the dip?
    - otterley 2y ago
      Most wealthy people’s wealth is in investments. If the value of the investments goes down, there are fewer resources to “buy the dip.” It doesn’t hold water as a theory. Basically robbing Peter to pay Paul.
      - lenerdenator 2y ago
        They have people whose jobs it is to even out those troughs, and I don't think you realize just how wealthy the wealthiest wealthy really are. Mark Zuckerberg, Elon Musk, and Larry Ellison each have a net worth that is on par with the total gross economic output of a small American metropolitan area.
        tasuki 2y ago
        > Mark Zuckerberg, Elon Musk, and Larry Ellison each have a net worth that is on par with the total gross economic output of a small American metropolitan area. You're comparing apples to oranges. Net worth is in dollars, while economic output is dollars per unit of time. The comparison does not make sense. You didn't even say which unit of time! Hell, I have a higher net worth than the total economic output of the US, given a short enough time frame.
        joquarky 2y ago
        This level of pedantry won't play in reality against someone who just lost everything and is seeking revenge on the tech bros who they perceive as enabling all of this.
VirusNewbie 2y ago
Are you claiming that the 'shareholder class' would rather depress the economy and wipe out trillions in shareholder value...over inflating the economy and lowering interest rates?
- bitmasher9 2y ago
  Agreed. It’s very rare to get a group of shareholders to agree that the price of their stock should go down.
- SJMG 2y ago
  That is what I believe I also just read... I was just telling my girlfriend that Hackernews is the smarter, tech oriented reddit. Better go fix that.
- giraffe_lady 2y ago
  Not "the shareholder class" but the actual super wealthy, those few thousand individuals at the top. A way I have recently seen this put is that if you have a billion dollars another billion doesn't do that much for you in real terms. But if you're a billionaire who likes to sexually harass your child's nanny, you would much prefer she be desperate and precarious rather than economically secure or with a lot of other viable options. This is one crude example but the dynamic is in play in many other situations. So idk, it's plausible to me that the class interests of the wealthy extend beyond mere wealth accumulation. I can imagine circumstances where they would be willing to give up some of their absolute wealth in exchange for greater relative wealth.
  - VirusNewbie 2y ago
    Ok, I buy the premise that maybe the top 1000 people are super evil mr. burns type folks. I even buy the fact that they would be giving up absolute wealth for greater relative wealth. But you know the easiest way to do that. Inflation. Expanding the money supply. Increasing the value of their assets at the expense of the working class. not tanking the value of the companies they own!
- clipsy 2y ago
JackYoustra 2y ago
...or they could've just laid off and gotten even more. maybe, just maybe, trump and the people around him are actually just crazy and there's no big conspiracy.
- zip1234 2y ago
  It's the simplest explanation and also the one with the most evidence
- lenerdenator 2y ago
  I don't think of it as the classic conspiracy in the sense of a La Cosa Nostra meeting in Apalachin. It's more like a shared set of ideas, and those ideas are crazy, at least if you don't have a net worth that is enough to ride out all but the most historic of social upheavals. And part of avoiding that most historic of social upheavals is not laying off people for the sole profit of it, at least not without a good excuse.
ants_everywhere 2y ago
> while taking most of the surplus value Just FYI, "surplus value" refers a concept Marx made up that is considered in mainstream economics to be an error in reasoning. Even making sense of it requires buying into the labor theory of value that Marx took from Adams and Ricardo, but which is not taken seriously anymore. That doesn't detract from the substance of the point you're making. But it's a little like reading someone say their house is hot because of all the phlogiston. It detracts from the force of the argument.
- dcre 2y ago
  You haven’t said anything.
  - ants_everywhere 2y ago
    Surely this retort sounded cooler in your head? But also, literally I said a lot. There's enough meat there for someone who hasn't spent much time in the history of economics to spend an entire afternoon going down an enjoyable rabbit hole.
    - polotics 2y ago
      that connection between surplus value and the labour theory of value is fully unexplained in your post, so... you have not said nothing, but you haven't said enough to make your post consequential I'm afraid
JeremyNT 2y ago
It amazes me the contortions some people go through to maintain the belief that this administration is competent. Occam's razor suggests that they just have no idea what they're doing.
- lenerdenator 2y ago
  These people all have a shared idea of what they're doing, and since they sit in financially-backed echo chambers, those ideas eventually turn so absurd that they appear to have no idea of what they're doing.
- nitwit005 2y ago
  I'm fairly convinced it's easier feel like there is some plan, even if a bad or sinister one, than things being in a state of genuine chaos. You occasionally see the people jumping between different ideas as to what the underlying plan is, once events no longer support their initial idea.
  - thethimble 2y ago
    The plan is crystal clear: 1. When equities crash, market liquidity floods the bond market causing yields to drop 2. Refinance debt at these lower rates massively reducing interest burden 3. Cut government spending to cause rates to drop further 4. Reduced rates with a balanced budget results in non-inflationary borrowing and an economic upswing Along the way, eliminate taxes for those earning below $150k. If all of the above happens at the expense of equity holders so be it. This plan has been made clear by multiple people from within the administration (namely Bessent who is one of the greatest macro investors of all time). Now there’s many things to criticize in this plan (and lots of risk and unknown possible second order effects), but to describe it as “genuine chaos” or ineptitude is strange.
    - piva00 2y ago
      It's not that crystal clear when the ideas from Stephan Miran to reshape the world order by turning allies into vassals is also part of the plan. There's a plan, it's to reshape the global trade à la Bretton-Woods, and the Plaza Accords. The rest is just noise and plausible deniability for people to gobble up and accept to have been shoved into a New World Order.

fulladder 2y ago

Not going to comment on the politics, but I'd point out that recession odds on Kalshi are currently 64% and 58% on Polymarket [1,2]. In other words, recession in 2025 is more likely than not -- though far from guaranteed. My thought relevant to HN is that either way this is likely to decimate venture capital and startups, at least in the short run. Venture capital funds come from limited partners like pensions and endowments, and the professionals I know are all shifting away from growth stocks and into value, international and bonds. VC is already in a drought (except for AI) and now my guess is that it's going to get worse. So many VCs I know have started only in the last 15 years, so they have never seen a real recession like 2009 while working in venture. [1] https://kalshi.com/markets/kxrecssnber/recession https://kalshi.com/markets/kxrecssnber/recession [2] https://polymarket.com/event/us-recession-in-2025 https://polymarket.com/event/us-recession-in-2025

ijustlovemath 2y ago
Anyone who's played cards or an MMO know those are insanely good odds -- virtually guaranteed!
- pinkmuffinere 2y ago
  > virtually guaranteed! I feel like you might be confused about the statement. One platform gives 58% odds, the other gives 64% odds. This is obviously high, but also very far from virtually guaranteed. In 100 trials, we’d expect recession in ~60 events. There is no secret math hidden here, it’s just that.
  - dmoy 2y ago
    GP comment is a joke about gambler fallacy (or also MMO crit, drop, etc rates)
    - pinkmuffinere 2y ago
      Ah lol, I just totally missed the joke

lwansbrough 2y ago

So where is the bottom? I don’t actually believe there is one, I’m just curious to hear what other people think.

UncleOxidant 2y ago
Sure, there's a bottom, but we're not close to it yet.
WorkerBee28474 2y ago
It could be down another 50%, it could already have passed. Historically, troughs in P/E ratios have occurred all over the place. https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...
Spooky23 2y ago
This weekend is going to determine that. There’s a pretty blood chance we’ll see the real crash Monday.
hackly 2y ago
Only one man knows the answer to this question.
- outer_web 2y ago
  He doesn't know either.
whatever1 2y ago
The vision is to convert the American economy from one with infinite profit margins (ads and software) to a manufacturing one with single percentage profit margins and limited growth potential due to tariff environment. So I think a 80-90% drop in the overall market value is justified.
- khazhoux 2y ago
  I don't think these tariffs would affect software. ?

jarym 2y ago

It is interesting that tech (Nasdaq) is the hardest hit here. The real engine of US exports for recent decades and likely to be a casualty as other countries plan their trade-war retaliation. And that's not even taking into consideration what might happen in the domestic market should there be a real recession - consumers will cut down their consumption and that'll filter back to lower corporate earnings. In previous economic stumbles, US exports abroad were able to buffer domestic weakness. Probably not anymore...

xh-dude 2y ago
Petulantly, I’d observe Trump hates or doesn’t believe in knowledge economies. He’s delivering pain to a lot of people in my circles. For all that, a strategic goal of ensuring trade is sustainable is probably worth sane discussion.
- chuckadams 2y ago
  > Trump hates or doesn’t believe in knowledge shortened that for you
wtcactus 2y ago
This all tariff imbecility created solely by Trump it’s atrocious, still, if EU response is to hit the main players in Nasdaq - where there are a lot of chip producers necessary for the ongoing AI revolution - we are just shooting ourselves majorly in the foot. Surely there are much better companies for the EU to apply directed tariffs. EU absolutely has their weaknesses, but giving blunt responses (like China just did and put tariffs on everything) is not really our way. Expect EU answer to be well crafted and directed at very specific areas.
- Terr_ 2y ago
  > created solely by Trump Nitpick: No, the entire Republican party is at fault here. They willfully ignored every warning, and attacked the people giving the warnings. They promoted him, protected him in two impeachments, eventually re-elected him, and actively confirmed his cabinet of sycophants instead of requiring some adults in the Oval Office. Then they took specific steps to block anyone from challenging his "national emergency" against our neighbors, by declaring that the rest of the year simply "doesn't count" for the 15 day timer in the original legislation. [0] Some Republican legislators may have had hard-choices for securing their own re-elections, but they still chose this route. [0] https://thehill.com/homenews/house/5189410-house-gop-democrats-repealing-trump-tariffs/ https://thehill.com/homenews/house/5189410-house-gop-democra...

beloch 2y ago

This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb. I'm simply not seeing even a glimmer of a possible upside right now. I see even less possibility of an upside for those of us North of the border or pretty much anywhere else on the globe.

Apreche 2y ago
[flagged]
fulladder 2y ago
The belief of Trump and his allies is that the last 40 years of free trade has been extremely favorable to college educated "elites" and extremely unfavorable to the working class. They see foreign trade as having hollowed out American manufacturing, and therefore they see the shutting down foreign trade as a way to reverse this decline. While they are aware that doing so will hurt college educated professionals, they don't care because they feel those people have had it too good for too long.
- techpineapple 2y ago
  the irony is I don’t think there’s any way this hurts the college educated more than the working classes, as most things do.
- lenerdenator 2y ago
  I think that's the belief of his voters in the Upper Midwest, but not necessarily Trump himself. He's the college-educated elite. He's playing them like a fiddle. He knows that they will absorb the damage from this, not the elites, who are far more connected than they are college educated.
- ViktorRay 2y ago
  But these beliefs have been core to the American left for decades. Even left wing intellectuals like Noam Chomsky have attacked the neoliberal trade agreements I think. Trump’s populist right wing fans have adopted traditionally left wing views. What’s surprising is so many left wing people are supportive of free trade when they were against free trade during the Reagan era.

monkburger 2y ago

1930 all over again.

lreeves 2y ago

You know the craziest thing about watching this as an outsider in Canada is that we as a nation are losing one reliable trading partner (and obviously losing an ally but that's another conversation). Germany - losing a trade partner. Japan? And so on. But the US has lost 180 reliable trading partners. You're already seeing in the first week burgeoning trade alliances between nations who wouldn't have cooperated before, and the amount of resentment against America from this is going to take a generation to heal. Of course I'm sure some people would claim this is 4D chess or what not but.. sometimes the person doing something crazy is just crazy at the end of the day.

monero-xmr 2y ago
[flagged]
- sorcerer-mar 2y ago
  Are globalist multinational corporations the main ones that get hurt by tariffs?
  - monero-xmr 2y ago
    Yes, in the current American system!
    - sorcerer-mar 2y ago
      Do those giant corporations employ any Americans? Are they gonna struggle to feed their families?
      - monero-xmr 2y ago
        They do employ Americans! And now they will employ fewer Americans! This is bad!
    - californical 2y ago
      Very untrue. Major corporations can absorb the damage for a few months without raising their prices, since they have more inventory, bulk discounts, etc. Small companies are often running nearly paycheck-to-paycheck, which requires them to raise prices immediately, making them completely uncompetitive with the large corporations. The large corporations know this and are happy to keep their prices low and burn money until the small business competition dies, then they can raise their prices.

csense 2y ago

So honest question: A bunch of people who currently own stock are deciding they'd rather have cash instead -- that much is obvious. But what exactly are they doing with the cash? Don't want to hold onto it, everyone says devaluation and inflation is coming. Bitcoin and gold are kinda flat. I expected them to shoot up as uncertainty hedges. What gives?

mixmastamyk 2y ago
Gold is up 14% this year, and up last year as well. A lot for something not inclined to move.
some_furry 2y ago
If I had $1000 in cash, and inflation hits 10%, the purchasing power is equivalent to (1000 / 1.1 = ~$909) in 2026. If I had the same $1000 in stock, and it lost 11% of its value in 2 days, I might worry about it being worth close to $0 by the end of the month.
- bawolff 2y ago
  If stocks hit $0, you probably have more immediate concerns - like where you are going to get your next meal and if someone is going to shoot you for the contents of your fridge. Stocks could still continue to fall, but they aren't going to slide to zero.
  - some_furry 2y ago
    Stocks overall? No. The few stocks I might have specifically invested in? Possible.
    - mathfailure 2y ago
      Then it'll be a good lesson for you to diversify investments.
      - 2y ago

ein0p 2y ago

WAI. Trump is crashing the T-note yield to refinance $9T (which is how much US debt is going to mature in 2025) at a lower rate. That, for those of us who know arithmetic, is approximately one quarter of all US debt. It seems to be working.

butterlettuce 2y ago
Is that really what he’s doing? If so, then that’s some 5d chess right there.
- ein0p 2y ago
  It's 1D chess, really, and it isn't really Trump who came up with the idea. We're between a rock and a hard place. If we refinanced at 4.8%, the interest payment would go to $1.2T per year. If we refinance at a lower rate, it's lower. Note that we're not just refinancing either, we'll have to borrow about $1.8T, too, unless DOGE miraculously achieves its $1T/yr savings (doesn't look like it will, if the current trends are anything to go by). Tariff revenues would help to plug that hole somewhat. Then there's the issue of many countries having higher tariffs for our stuff than we have for theirs. That's not "free" trade. Then, finally, there's the issue of the near-irreversible erosion of the industrial base. Warren Buffett warned about this back in 2003, and proposed an elegant solution, which, unfortunately, would require Congress to implement it through legislation: https://faculty.washington.edu/ss1110/IF/Buffett%20Fortune%202003%20(6).pdf https://faculty.washington.edu/ss1110/IF/Buffett%20Fortune%2... But we do not have a functioning congress, so Buffett's solution is impossible.
  - bigyabai 2y ago
    > Tariff revenues would help to plug that hole somewhat. "Somewhat" being a key operand here. America is a net importer globally, a protracted trade war is inherently leveraged against us. Neither the rock nor the hard place is forcing anyone to harass our trade partners and abandon our defensive alliances.
    - 2y ago

no_free_speech 2y ago

[dead]

walterbell 2y ago

2024 paper (40 pages) by Stephen Miran, current chair of the Council of Economic Advisers, which has influenced tariff policy, https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese... The root of the economic imbalances lies in persistent dollar overvaluation that prevents the balancing of international trade, and this overvaluation is driven by inelastic demand for reserve assets. As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella, as the manufacturing and tradeable sectors bear the brunt of the costs... Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects.. Finally, I discuss a variety of financial market consequences of these policy tools, and possible sequencing. blog review/opinion, https://simplicius76.substack.com/p/trumps-liberation-day-another-pr https://simplicius76.substack.com/p/trumps-liberation-day-an... > One of the core tenets of the document is the deliberate devaluation of the US dollar in order to make US exports favorable again.. a country which holds the world’s reserve currency faces a significant dilemma.. to keep its currency as reserve status—and reap all the geopolitical benefits this creates—the country must hamstring its own economic output by running a huge trade deficit, which means the country imports far more than it exports, which hurts—or in the case of the US, kills—domestic manufacturing. >... if a French person buys a $50K Ford truck and imports it to France, that’s $50K USD that leaves France and goes back to the US, lowering France’s dollar holdings. If an American buys a $50K French Peugeot to import it to the US, he sends his $50K USD to France, which increases its dollar holdings.. to maintain the dollar’s reserve status.. US dollars are constantly flooding the world.. running a massive trade deficit where imports of foreign goods (outflow of USD) far outweigh exports of domestic goods (inflow of USD).

Centigonal 2y ago
> As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella I don't understand. US share of global GDP is around where it was in 1980, and in 1995[1]. Is Miran arguing that America's "exorbitant privilege" of being the source of the world's reserve currency, literally being able to buy goods from any country in the world with money printed out of thin air, is actually a liability? [1] Page 8 of his paper EDIT after reading through Chapter 2 of the paper: Thank you for sharing this. I don't agree with many of the arguments Miran is throwing out so far, but at least it's self consistent. He is saying: 1. If the US's global share of GDP decreases, then a set of global economic factors will cause the US to keep having to take on deficits to fund the rest of the world's desire for USD (because that is the world's reserve currency). If the US becomes small enough relative to the world economy, then this pressure will cause the US to risk defaulting on its debt. 2. The US's status as the reserve currency issuer means US dollars are artificially expensive. This means that low margin, high-labor industries like manufacturing can't thrive in the US. This is a national security risk because China/Russia can make lots of tanks/drones/etc and we can't. 3. The US benefits from being the reserve currency issuer because it can use that power to project force worldwide and maintain national security. 4. (He doesn't say this, but implies it in that coy way that people who read The New Criterion like to do) #1 is an unacceptable risk for America, and the US should employ a range of unilateral or multilateral measures to reshape the global financial system in a way that devalues the US Dollar, strengthens US manufacturing, and forces US trading partners (esp. other liberal democracies) to subsidize the US's status as the reserve currency issuer, since the US provides a global hegemony that is beneficial to them. Also, having read portions of the Project 2025 "Mandate for America," it's really interesting to me how all of these right wing thinktank writers (Russ Vought, Max Primorac, and now Miran) seem to share the same writing style.

rtp4me 2y ago

On the bright side, this may be a good opportunity to convert 401(K) or IRA funds into a ROTH account.

huevosabio 2y ago
Why?
- eclipticplane 2y ago
  You owe tax on the difference between contributed dollars and converted dollars. So if you contributed $100 and it historically had grown to $150, you would owe tax on $50 to convert. If that $150 in value is suddenly $120 instead, your tax bill to convert is significantly cheaper.
- joshuamcginnis 2y ago
  ROTH contributions grow tax-free. Doing your conversions now allows you to buy equities are they're currently discounted prices, maximizing your potential long-term tax-free gains.
  - rtp4me 2y ago
    Especially if you hit the RMD threshold in retirement. Even more important is how RMDs affect Medicare premiums(1). The best advice I have is to avoid RMDs as much as possible since they can/will affect other parts of your retirement strategy. Thus, converting to ROTH today may save you lots of cash in the future. (1) https://www.fedsmith.com/2024/10/23/rmds-are-silently-increasing-medicare-premiums/ https://www.fedsmith.com/2024/10/23/rmds-are-silently-increa...
- cortesoft 2y ago
  Because you have to pay taxes on it when you convert, and you will have less to pay taxes on if you do it now.
- dgunay 2y ago
  Rebuy equities/reinvest dividends at reduced prices, pay taxes now, enjoy tax-free growth. If the current admin is serious about trying to get rid of income tax, then that would eliminate a major advantage of trad vs roth.

deleted 2y ago

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biglyburrito 2y ago

https://archive.md/XMnlS https://archive.md/XMnlS

duxup 2y ago

“The Stock Market(s) are literally crashing. There was no reason for this, all self inflicted!” - Trump….https://truthsocial.com/@realDonaldTrump/posts/108469860787607968 https://truthsocial.com/@realDonaldTrump/posts/1084698607876...

Cerium 2y ago
What's that supposed to mean? He is saying the quiet part out loud?
- adt 2y ago
  Jun/2022
- xnx 2y ago
  The tweet is from June 13, 2022.

asdev 2y ago

Tech really needs to fall another 50% at least. I think when the big AI bust happens(unless it's happening now), we will see that

markus_zhang 2y ago
With this kind of free fall it's going to trigger a lot of busts.
- colechristensen 2y ago
  The last market crash was caused by the very economically unnatural COVID and the global response to it. This one is caused by insane foreign policy. Both of these are weird recessions because they don't have anything to do with real market conditions or even stupid pathological market conditions (housing crash).
colechristensen 2y ago
The covid response of printing trillions of dollars and other currencies around the world meant that there was way more money and it had to end up somewhere. There's just way more money to invest than there are productive companies to invest in. So you get crazy P/E ratios in the best bets available. The "fix" is to inflate that money away (or maybe to tax it and pay down deficits?) but it's not an easy monetary policy or a familiar one.

Aeolun 2y ago

Don’t worry. President Trump knows what he’s doing. If anything, this is a perfect time to invest before the markets inevitably recover.

Aeolun 2y ago
Should have /s’ed that. To be fair, I do think the markets will eventually recover. If not soon, then in 4 years time. Assuming democracy hasn’t eroded to the point that timeline is meaningless.
rsynnott 2y ago
So your theory is that there’s an amazing master plan, but only insane people on Twitter (and notably, not, say, _Wall Street_, or any economists) are smart enough to see its ineffable wisdom?
- Aeolun 2y ago
  Wall Street and economists have a vested interest in keeping their precious theories alive.

deleted 2y ago

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jckrichabdkejdb 2y ago

And no tariffs on Russia, oh I wonder why...

breadwinner 2y ago

There is away out of this mess: A U.S. Senate bill that would require congressional approval for new tariffs gained more Republican support on Friday [1]. Trump is not going to back down since that will make him look like a loser. Neither is China. But GOP can help Trump out by creating a new law that automatically expires all new tariffs after 60 days unless approved by congress. This will let Trump extricate his head from this mess without losing face. [1] https://www.reuters.com/world/us/more-us-senate-republicans-voice-support-congressional-oversight-tariffs-2025-04-04/ https://www.reuters.com/world/us/more-us-senate-republicans-...

deleted 2y ago
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Trasmatta 2y ago
Trump would surely veto, and I currently have doubts there will ever be enough Republican votes to override
Tadpole9181 2y ago
To be clear, this is going to have to pass the house. Then, Trump will veto it. Then, the senate will need 16 Republican senators (30% of the party) to vote against it. And it's still a toss-up if Trump will even obey it or if he'll executively order customs to continue the Tariffs. So unless Republicans suddenly grow a spine, which is unlikely given their current strategy is "hide the stock ticket on Fox news" and pretend glorious leader is a genius, this is a token effort that will do nothing. And even if the tariffs are revoked, we've destroyed our reputation. You think countries will want to continue on like nothing happened after this? The only thing that might stop the impending collapse of the US economy as 180 nations divest from the empire we built is if we were to impeach and convict Trump immediately and set an example that this economic chaos will not be tolerated; that allies are not fair game to bully. But, honestly, I think that ship has already sailed. It needed to happen immediately, not after a week of testing the waters.
- almog 2y ago
  I absolutely agree that impeachment and conviction is the only way to restore the world's trust in the US. If this bill passes and Trump vetos it, don't you think that could raise the odds for a 3rd impeachment process?

hackly 2y ago

I’m tired of winning boss.

bigyabai 2y ago
- Xi Jinping, 2027

xyst 2y ago

Don’t check your 401K accounts, Americans. This idiocracy administration is single handedly ruining both _public_ and _private_ safety nets. To my fellow Americans that helped vote this dipshit into office, please fuck off.

inatreecrown2 2y ago

Isn't it obvious that Trump's goal are not these tariffs, but renegotiated trading agreements? But everybody just seems to love to proclaim this the end of US.

kstrauser 2y ago
No. It's not obvious that there's any lucid end goal whatsoever.
JackYoustra 2y ago
How is that obvious? Why would your 'negotiating stance' be 'give no demands and tariff the entire world, including islands with just penguins, a nonsensical rate?' I mean sure I guess you can say he's negotiating, in which case I'd like you to admit he's a terrible negotiator.
- inatreecrown2 2y ago
  because that's the way he likes to do things?
  - JackYoustra 2y ago
    "it's obvious that he's negotiating because he likes to negotiate in an incoherent way" I don't really know how to read what you're saying
    - inatreecrown2 2y ago
      No, I was replying to you second question.
acidmath 2y ago
This is what all of the smart people have been saying. So pretty much yeah.
- kstrauser 2y ago

greenchair 2y ago

[flagged]

markus_zhang 2y ago

Whatever, I'm in Canada and decided to cut down all costs. Fully expecting a recession as well as a depression. We thought about getting a new car, but not going to do that until in a few years when car sellers are begging me to take one. Right now they are so arrogant that they charge high rates and popular cars takes months to deliver. I'm gonna sit for another 3-4 years. Also decided to remove all travel plans from the near future. Purchases higher than $100 are going to require a stamp from the financial department ($wifie). All purchases re-directed to local second hand market as mu as possible. Thought about buying a MacBook for RE but to hell with it. No new phones, no nothing until something breaks and evaluated by the financial department to be "essential". Fuck it. I just got a small raise and bonus but feel so insecure. I expect to lose job at any moment.

owebmaster 2y ago
> Fuck it. I just got a small raise and bonus but feel so insecure. I expect to lose job at any moment. just today 3 people from my network messaged me about losing their job and asking about some opportunity. They worked remotely for American companies (from Brazil).
- markus_zhang 2y ago
  Yeah, that's the uncertainty we all have to face. I hope they find some local jobs at least. I don't even know what I can do if I can't find an IT job. I don't have any other skills.
  - senordevnyc 2y ago
    I feel similarly, and I actually just got laid off last week. However, I don’t think tariffs are going to result in no more IT jobs, I’m sure there will be jobs available, they might just not pay as much as they have.
    - markus_zhang 2y ago
      I wish you good luck. Man I don't know what I can do. I can't Uber because I only have one car. I can't onlyfan because I'm not a nude female. I can't twitch because there are already millions out there. I don't know what I can do. Seriously.

jmward01 2y ago

This is the payout difference between perato optimal and minmax solutions. Trust is gone so the sum value to all players is lower overall than it was before. The only thing is the rest of the world still has trust with each other so the ultimate looser is just the US. I just wish that the devastation this is causing could only impact those that caused it but the reality is that those responsible, those that voted for this, won't admit or learn from this, or the hundreds of other devastating acts going on, and will keep inflicting this type of pain. We really did have it all.

insane_dreamer 2y ago

I don’t expect Trump to make sane or rational decisions. But can anyone explain why the GOP senate is just standing by? Surely they are getting hit on the effects of the tariffs like everyone else. Doesn’t compute.

Vegenoid 2y ago
Because opposing Trump risks becoming an outcast, which is the thing that humans want least, and losing their job. There is not yet the sign that their voting base actually wants them to do anything to oppose Trump.
- insane_dreamer 2y ago
  But what about those who are not up for re-election soon (unlike Representatives). If they're in for another 3-5 years regardless, by then things will have changed anyway.

blatantly 2y ago

Cheap stocks people. Got my eye on some that below a certain price it would be a no brainer to buy. Global trade is rerouting around the bottleneck. Didn't think there would be an opportunity so soon after March 2020. Got my eye on a tech stock that has dropped about 40% already but was undervalued before IMO.

roflyear 2y ago
This is a fine idea, but having the cash during a recession to buy stocks is not always easy.

kaycebasques 2y ago

A simple but profound idea that has stuck with me from the days when I religiously listened to The Macro Tourist's podcast: who's on the other side of the trade? In order for AAPL to drop 7% today, someone of course had to agree to sell their shares at a price that is 7% lower than yesterday's. But perhaps more interesting, someone else agreed to buy the shares at that price. Who's buying here and who's selling? Who's more composed? What is the investment timeframe of the seller versus the buyer? It takes two to make a market.

neogodless 2y ago
Presumably most 401(k) contributions and dividend reinvestments happening automatically create a large volume of buying power. While some people freak out, call an agent, sell stocks, I'd imagine this is mostly actively managed (by humans and software) investments doing the selling. Beyond that, when you sell something, maybe it felt like it was worth $10. But you offer it for $9.95. Maybe someone buys it, maybe not. Maybe you drop it to $9.80? Then someone buys it. Rinse and repeat until the price is now $8. When you sell a "$10" stock, if you say you won't sell it for less than $10, you might not be able to do so. It's all more complicated than that, and there are limit and market orders, etc. that affect how much the price will vary from when you initiate it. But if you're like "hmm, this is horrible news for the economy" you probably press the "sell as fast as possible" order, and your $10 stock might actually sell instantly for $9.50 because for someone with a "smart" algorithm, $9.50 looks pretty good when the stock still seems valued at $9.75+. But then a few million shares sell at prices lower than $9.75 and now the same system that thought it was a good idea to buy at $9.50 thinks it's a good idea to turn around and sell it... for even less.
darkwizard42 2y ago
Some people have an obligation to sell (option contracts must be honored, ETFs must be rebalanced, etc.) and this creates liquidity. Some people also have a lower risk tolerance (or want the money to put into something with more predictable returns like say treasuries) and want out now.
verteu 2y ago
There was widespread institutional selling, and typically dip buyers are non-professional traders who underperform the market [1] [2] At the end of the day, does it really matter who's the marginal buyer and who's the marginal seller? Do we learn anything about the value of Apple Inc by learning that the marginal buyer was an HFT hoping to offload inventory in 500ns, a mid-frequency shop who will hedge delta at end-of-day, or a value investor who will hold for a lifetime? I claim any such information would be rapidly priced in by flow-analysis algos, and thus reflected in the closing price. [1] https://www.reuters.com/markets/retail-bought-stocks-largest-level-over-past-decade-jpmorgan-says-2025-04-04/ https://www.reuters.com/markets/retail-bought-stocks-largest... [2] https://www.businessinsider.com/retail-investors-buy-dip-trump-tariff-trade-war-tsla-nvidia-2025-4 https://www.businessinsider.com/retail-investors-buy-dip-tru...

tetrisgm 2y ago

Response from friends who voted for this because of Elon: “let them cook“. This doesn’t seem to shock them

arcastroe 2y ago
do these friends participate in the market?
- tetrisgm 2y ago
  They do. I think it’s one of these beliefs vs logic things

linotype 2y ago

Aren’t the tariffs that the US is imposing half of what other countries have? Or was that fake news from the admin?

vitaflo 2y ago
They aren’t the tariffs other countries are imposing, they are basically the trade deficit ratio instead. A country could have a 0% tariff on American goods but if Americans had a trade deficit with that country they would have been slapped with a tariff.
- linotype 2y ago
  Ah thanks for the explanation. Definitely a ridiculous metric to go off of to determine tariffs.
rsynnott 2y ago
Fakest of fake news; no developed country (except a few weird microstates) has effective tariffs higher than about 3%. Bizarrely, he based it on _trade deficits_. Today, only two countries have effective tariffs rates >20% (Bermuda and the Cayman Islands), though it will be three next week. (Based on the World Bank metric; WTO uses a slightly different metric and says there are three; Bahamas, Sudan and Iran.)

OhioMan2943 2y ago

Does anyone have any idea where all of this tarrif(tax) revenue is going? I think it's a little more creative than just increasing wealth. Are there any bold visions or grand plans/futures in the works that this could be going towards?

gitremote 2y ago
Tax cuts for the rich. Defunding the IRS, cutting social services, and pushing tariffs to tax the working class are all consistent with needing to keep the government running without taxing the billionaires.
Tadpole9181 2y ago
They just signed the budget, it's not a secret. They're giving $2.5 trillion in tax cuts to the wealthiest Americans.

mertleee 2y ago

Assuming we don't give all of the jobs generated to h1b's and O1's I think this could do very good things for the country. Dollars staying within the US and not going to other countries is good.

deleted 2y ago

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windex 2y ago

Iam amazed at the epic levels of ruin one man can bring upon a country and how a whole country of people can elect someone so utterly out of depth. This level of idiocy wouldnt be tolerated in companies if done by an intern.

disqard 2y ago
But what if a significant fraction of the employees believed in some message being spread that intern? Whether the intern is an inveterate grifter, and/or happens to be personally sponsored by a powerful mob boss, does not matter for the employees latching onto that message. In that context too, I have a feeling these flaws would be tolerated/overlooked.

parski 2y ago

Must feel good to be great again.

heigh 2y ago

Has anyone checked out Fox News recently? There is zero, and I mean zero coverage of the implications of the tariffs. W.T.F. At what point do you go “okay, we’re actually on par with North Korea”?

scoofy 2y ago
Freedom of the press means you have dishonest press. Fox News is just ESPN for news consumption. Out of sight, out of mind. If they reported the bad news, these people would change the channel anyway.
mvdtnz 2y ago
jfc do some reading about North Korea before making idiotic comparisons like that.
IAmGraydon 2y ago
Fox News is irrelevant when Americans see their retirement account lose 65% between now and late 2026.
lippihom 2y ago
They removed their stock ticker that runs at the bottom of the screen for the first time in 30 years. They're a Trump propaganda machine.