5 ms·

I actually moved a bunch of money around after the recovery from April 2nd. I just sat their thinking... wow, short term bonds have a really decent interest rat

by scoofy 1y ago

I actually moved a bunch of money around after the recovery from April 2nd. I just sat their thinking... wow, short term bonds have a really decent interest rate, and I don't think people are taking seriously the fact that the markets can actually fall apart because business is an incredibly complex, multi-variate process, and right now where just throwing wrenches into the gears for funsies. I'm not even completely anti-tariff. I just think the way we're going about doing these tariffs is pretty much the opposite way anyone who was trying to bring manufacturing back to the US would do them. Low, clear ratcheting up tariffs are tariffs that allow businesses time to change their strategy without disrupting their income streams. Instead, we're going to bankrupt basically anyone who isn't already a multi-national. Maybe I'm an idiot and I'm missing something clear, but to me, the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years. Other countries' markets have not fared so "efficiently." Again, maybe I'm missing something, but I'm looking at this much more defensively than I did under the first administration. The one thing I can't figure out is the dollar. My brother is obsessed with the "dollar milkshake" theory, whereas it seems clear that we are messing with reserve status and are trying to intentionally weaken the dollar... I just don't know. It doesn't really make much sense what we're doing, and I haven't found anyone who can make an argument that makes sense to me.

pstuart 1y ago
> I haven't found anyone who can make an argument that makes sense to me. The goal is to eliminate income taxes and replace it with tariffs. An added bonus (for the administration), is that tariffs can be changed if the party in question pays for access to make their case. The stated reasoning of supporting domestic industry is a smoke screen for the above.
- scoofy 1y ago
  Right, except that’s self-defeating and won’t work. The idea that we can plausibly generate enough revenue from tariffs to replace the income tax is inherently self-defeating, because if the tariffs work at bringing back manufacturing, we’ll stop imports. If they don’t, we’ll consume significantly less, more people will become poorer, and expenditures will increase as revenues decrease. Maybe there is an equilibrium in there, but I don’t see it.
  - pupperino 1y ago
    Baked in this plan is the idea that the revenue from tariffs will be much smaller than income tax revenues, and therefore that the federal government will also get smaller.
    - scoofy 1y ago
      Right, but that implies that spending is controlled by revenues… when it’s clearly not. That just means higher deficits, threatening a default of US Bonds, which is a worst case scenario for American prosperity.
      - pupperino 1y ago
        I'm confident the people pursuing this mad agenda don't know the first thing about US budget laws and think they can just cut spending DOGE-style forever.
        pstuart 1y ago
        Considering that the driver of all this is surrounded by yes-men and has spent his entire entitled life getting his way, I think their goal is to will it into being. And when it fails, blame the other party.
  - cosmicgadget 1y ago
    I don't think the policy working out for the country was considered in deciding to go this route.
- beAbU 1y ago
  Replacing taxes with import tarriffs will dramatically reduce consumption, and therefore tax revenue. Taxes don't incentivise earning less, but tarriffs most definitely incentivises spending less! This theory does not make sense.
  - pstuart 1y ago
    > This theory does not make sense. The theory "makes sense" in that it's what he's stated as a goal. But as policy, it's nonsensical. This is our world now.
pupperino 1y ago
As a Latin American, I can't help but buy the American Exceptionalism thesis, and seeing you guys in this situation humanizes you so much. The US has such a strong bureaucracy and high bar for competence that you generally lack the immune system required for detecting con artists and social climbers - at least in politics. Ask a random Argentinian or Brazilian what politicians Trump reminds them of, and you'll get a seemingly endless lists of genuinely stupid, borderline sociopath populists. Follow up with a question on what are the consequences of having arbitrary, ever-changing tariffs on most goods for the purpose of industrialization, and you'll get a laugh, then a sad face. Import-substitution is bad for econ 101 reasons that most people who have an axe to grind against Dems would've been absolutely capable of grasping only a few years ago. Now, it seems so many are willing to turn off a part of their brains for this short-sighted wishful thinking. "Well, the official narrative is that we're doing this to get manufacturing back, so let's wait and see" is something most people would immediately perceive as bs if a Dem was sitting in the Oval Office. Seeing a politician campaign on a stupid platform, and then getting surprised he actually shoots himself in the foot spending political capital pursuing is also very Latin American. The good part is that the soon-to-be-coming recession the federal government just fabricated out of thin air is fully self-inflicted, and therefore somewhat easy to fix. The bad part is you have (at least) 4 more years of this lunacy, so it might take a while.
- shantara 1y ago
  As someone who grew up in Eastern Europe, I had a completely identical reaction. We had so many similar populists and idiots in power, one cannot help but recognize the obvious pattern. Many people in America seem to be convinced that their involvement in the democracy ended after voting in the elections, and cannot conceptualize how to deal with an adversarial government. The scale of the protests and pushback Trump administration has received is laughably small compared to the scale of America as a country. People are lacking a basic political immune system, or even a sense of self preservation. And the most puzzling part is that the entire situation is 100% self-inflicted. It usually takes a major war or a sustained external campaign to inflict the kind of damage Trump administration has done to the country in such a short period of time.
gopher_space 1y ago
The vibe on /r/wallstreetbets seems to be "this all makes sense as a massive pump and dump". Very useful source of info if you view them as essentially black boxing the stock market.
- scoofy 1y ago
  I mean, WSB isn’t a serious place, but they have their moments. I just have no idea who would or even could “pump” the entire S&P 500. My best theory of the last month is just basic “sell in May and go away” theory where you get rosier fundamentals in spring because everyone buries the bad news in Q1 reports, but it’s more difficult to hide as the fiscal year actually happens.
  - 6stringmerc 1y ago
    The signal to noise ratio is difficult but now and then a factoid pops up - like the amount of retail investors piling in recently. It aligns with messaging in other forms of media that they, well, only use as indicators and frequently don’t take seriously. I’m using it often as a useful tool for counter-balancing my long term plans with the impatient gambling mentality which feeds the machine there. I learned my lesson ages ago from ZeroHedge about being overly bearish and things didn’t play out, so WSB is helpful in my situation because in principle I agree with the market is distorted assertion but believe the collapse will manifest months from now and this is a sucker’s market. Q2 earnings calls are going to be telling.
    - scoofy 1y ago
      I don’t think any collapse is coming. I just think the risk profile doesn’t justify many of my smaller cap investments, and where I am in life.
    - inamorty 1y ago
      A factoid is something that is masquerading as a fact, not a small fact.
      - 1y ago
spacemadness 1y ago
I think the burden of proof is entirely on the admin in the White House who seem completely incapable of keeping their story straight and providing anything of value to sooth anyones fears other than "trust me, bro!"
datavirtue 1y ago
I don't think the metric of success is how much mfg comes back to America, it's just a simple slogan that plays well. The real movement is the mfg flocking out of China and into our allies countries.
- _t9ow 1y ago
  > The real movement is the mfg flocking out of China and into our allies countries. If Trump cared so much about America's allies, why has he also imposed tariffs on Canada and repeatedly threatened to annex it? Why has he repeatedly talked about annexing Greenland?
- yupitsme123 1y ago
  Is this actually happening? I figured the result would be China simply swooping in and picking up all the trade partners we've alienated. And also all the soft power we've abandoned.
- worik 1y ago
  The USA is 20% of Chinese exports China has been moving the manufacturing to their allies for years, as their labour force climbs the value chain. Here in Aotearoa I am looking forward to continued booming trade with China and it's allies, hoping our government (we have a particularly bad one too currently) do not try to suck up to Mr Trump. But the insanity in USA is bad for everyone. Hopefully we will get used to it soon and adjust to living without USA trade, and dollars That will be good for everyone but the USA
ruraljuror 1y ago
> the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years Yes and, to your point, with an independent federal reserve. If that gets messed with, things could get much worse for the U.S..
helij 1y ago
Same as you I'm in defense mode. I exited the market in early February since something was not right. All I have (not much) sits in money market fund now at 5%.

by scoofy 1y ago

pstuart 1y ago

> I haven't found anyone who can make an argument that makes sense to me. The goal is to eliminate income taxes and replace it with tariffs. An added bonus (for the administration), is that tariffs can be changed if the party in question pays for access to make their case. The stated reasoning of supporting domestic industry is a smoke screen for the above.

scoofy 1y ago
Right, except that’s self-defeating and won’t work. The idea that we can plausibly generate enough revenue from tariffs to replace the income tax is inherently self-defeating, because if the tariffs work at bringing back manufacturing, we’ll stop imports. If they don’t, we’ll consume significantly less, more people will become poorer, and expenditures will increase as revenues decrease. Maybe there is an equilibrium in there, but I don’t see it.
- pupperino 1y ago
  Baked in this plan is the idea that the revenue from tariffs will be much smaller than income tax revenues, and therefore that the federal government will also get smaller.
  - scoofy 1y ago
    Right, but that implies that spending is controlled by revenues… when it’s clearly not. That just means higher deficits, threatening a default of US Bonds, which is a worst case scenario for American prosperity.
    - pupperino 1y ago
      I'm confident the people pursuing this mad agenda don't know the first thing about US budget laws and think they can just cut spending DOGE-style forever.
      - pstuart 1y ago
        Considering that the driver of all this is surrounded by yes-men and has spent his entire entitled life getting his way, I think their goal is to will it into being. And when it fails, blame the other party.
- cosmicgadget 1y ago
  I don't think the policy working out for the country was considered in deciding to go this route.
beAbU 1y ago
Replacing taxes with import tarriffs will dramatically reduce consumption, and therefore tax revenue. Taxes don't incentivise earning less, but tarriffs most definitely incentivises spending less! This theory does not make sense.
- pstuart 1y ago
  > This theory does not make sense. The theory "makes sense" in that it's what he's stated as a goal. But as policy, it's nonsensical. This is our world now.

pupperino 1y ago

As a Latin American, I can't help but buy the American Exceptionalism thesis, and seeing you guys in this situation humanizes you so much. The US has such a strong bureaucracy and high bar for competence that you generally lack the immune system required for detecting con artists and social climbers - at least in politics. Ask a random Argentinian or Brazilian what politicians Trump reminds them of, and you'll get a seemingly endless lists of genuinely stupid, borderline sociopath populists. Follow up with a question on what are the consequences of having arbitrary, ever-changing tariffs on most goods for the purpose of industrialization, and you'll get a laugh, then a sad face. Import-substitution is bad for econ 101 reasons that most people who have an axe to grind against Dems would've been absolutely capable of grasping only a few years ago. Now, it seems so many are willing to turn off a part of their brains for this short-sighted wishful thinking. "Well, the official narrative is that we're doing this to get manufacturing back, so let's wait and see" is something most people would immediately perceive as bs if a Dem was sitting in the Oval Office. Seeing a politician campaign on a stupid platform, and then getting surprised he actually shoots himself in the foot spending political capital pursuing is also very Latin American. The good part is that the soon-to-be-coming recession the federal government just fabricated out of thin air is fully self-inflicted, and therefore somewhat easy to fix. The bad part is you have (at least) 4 more years of this lunacy, so it might take a while.

shantara 1y ago
As someone who grew up in Eastern Europe, I had a completely identical reaction. We had so many similar populists and idiots in power, one cannot help but recognize the obvious pattern. Many people in America seem to be convinced that their involvement in the democracy ended after voting in the elections, and cannot conceptualize how to deal with an adversarial government. The scale of the protests and pushback Trump administration has received is laughably small compared to the scale of America as a country. People are lacking a basic political immune system, or even a sense of self preservation. And the most puzzling part is that the entire situation is 100% self-inflicted. It usually takes a major war or a sustained external campaign to inflict the kind of damage Trump administration has done to the country in such a short period of time.

gopher_space 1y ago

The vibe on /r/wallstreetbets seems to be "this all makes sense as a massive pump and dump". Very useful source of info if you view them as essentially black boxing the stock market.

scoofy 1y ago
I mean, WSB isn’t a serious place, but they have their moments. I just have no idea who would or even could “pump” the entire S&P 500. My best theory of the last month is just basic “sell in May and go away” theory where you get rosier fundamentals in spring because everyone buries the bad news in Q1 reports, but it’s more difficult to hide as the fiscal year actually happens.
- 6stringmerc 1y ago
  The signal to noise ratio is difficult but now and then a factoid pops up - like the amount of retail investors piling in recently. It aligns with messaging in other forms of media that they, well, only use as indicators and frequently don’t take seriously. I’m using it often as a useful tool for counter-balancing my long term plans with the impatient gambling mentality which feeds the machine there. I learned my lesson ages ago from ZeroHedge about being overly bearish and things didn’t play out, so WSB is helpful in my situation because in principle I agree with the market is distorted assertion but believe the collapse will manifest months from now and this is a sucker’s market. Q2 earnings calls are going to be telling.
  - scoofy 1y ago
    I don’t think any collapse is coming. I just think the risk profile doesn’t justify many of my smaller cap investments, and where I am in life.
  - inamorty 1y ago
    A factoid is something that is masquerading as a fact, not a small fact.
    - 1y ago

spacemadness 1y ago

I think the burden of proof is entirely on the admin in the White House who seem completely incapable of keeping their story straight and providing anything of value to sooth anyones fears other than "trust me, bro!"

datavirtue 1y ago

I don't think the metric of success is how much mfg comes back to America, it's just a simple slogan that plays well. The real movement is the mfg flocking out of China and into our allies countries.

_t9ow 1y ago
> The real movement is the mfg flocking out of China and into our allies countries. If Trump cared so much about America's allies, why has he also imposed tariffs on Canada and repeatedly threatened to annex it? Why has he repeatedly talked about annexing Greenland?
yupitsme123 1y ago
Is this actually happening? I figured the result would be China simply swooping in and picking up all the trade partners we've alienated. And also all the soft power we've abandoned.
worik 1y ago
The USA is 20% of Chinese exports China has been moving the manufacturing to their allies for years, as their labour force climbs the value chain. Here in Aotearoa I am looking forward to continued booming trade with China and it's allies, hoping our government (we have a particularly bad one too currently) do not try to suck up to Mr Trump. But the insanity in USA is bad for everyone. Hopefully we will get used to it soon and adjust to living without USA trade, and dollars That will be good for everyone but the USA

ruraljuror 1y ago

> the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years Yes and, to your point, with an independent federal reserve. If that gets messed with, things could get much worse for the U.S..

helij 1y ago

Same as you I'm in defense mode. I exited the market in early February since something was not right. All I have (not much) sits in money market fund now at 5%.