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TRADE THREAD- President Trump signs Phase One of China agreement, China promises to double its purchases in 2020 (1 Viewer)

mcintyre1 said:
My "long term" concern is that Trump has no idea what his economic policies will do to the country.
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Sure, a single day in the market most likely isn't reflective of anything to do about that concern, despite all the hysteria in here last night.  That's all.  If you feel it's a risky market the next couple years be more conservative in your investing.

 
I have enjoyed watching the Drudge headline change over the last 40 minutes though. From a green "Stocks Recover" around 10am during the brief upward peak, to a red "Stocks Recover?" as it plunged down again to a red "Dow -300" to the current "Stocks Swing" -- I'm sure there's some intern that updates it, but part of me wants to believe that Drudge himself is sitting at his ancient PC, desperately reloading Netscape Navigator to get the latest numbers and updating his headline. 

 
tonydead said:
mcintyre1 said:
My "long term" concern is that Trump has no idea what his economic policies will do to the country.
Click to expand...
Sure, a single day in the market most likely isn't reflective of anything to do about that concern, despite all the hysteria in here last night.  That's all.  If you feel it's a risky market the next couple years be more conservative in your investing.
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mcintyre1 said:
I have enjoyed watching the Drudge headline change over the last 40 minutes though. From a green "Stocks Recover" around 10am during the brief upward peak, to a red "Stocks Recover?" as it plunged down again to a red "Dow -300" to the current "Stocks Swing" -- I'm sure there's some intern that updates it, but part of me wants to believe that Drudge himself is sitting at his ancient PC, desperately reloading Netscape Navigator to get the latest numbers and updating his headline. 
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Shall we take this to the "meaning of stock volativity" thread that either of you should create?

 
jomar said:
I expect he won't get fired this episode but some time in Season 3
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Notsofast  "I think the fed is out of control, I think what they are doing is wrong"  What a putz.  :lmao:

 
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Shula-holic said:
It's the market, these things will happen.  We've had a pretty long run of a bull market already.  People tend to forget that there are going to be longer periods of sideways to down markets over time.  Whether this is the beginning of that I have no idea.  I'm too heavy in cash because I hated the volatility.  The stuff that went on around 2008 was stressful when I was needing cash to try and grow a business so I probably was way too conservative back then and even now I still am.  That's not to say I'm still not invested in the market.  It's cost me some money likely over time to be allocated this way, but I don't sweat these things today because I've stayed liquid enough to cover these market cycles and not feel like I have to cash out.    
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One thing I've seen over the years is that the party with the president in power tends to talk about how awesome the economy is, and the party that doesn't have a president in power tends to be quite bearish and forecast that soon the current "policies" are going to blow things up.

 
shader said:
One thing I've seen over the years is that the party with the president in power tends to talk about how awesome the economy is, and the party that doesn't have a president in power tends to be quite bearish and forecast that soon the current "policies" are going to blow things up.
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It's interesting to note though, not funny mind you, just interesting:

When republicans claim this of the democrats those policies don't "blow things up" but, when the Dems claim this of the GOP, things usually do take a downward turn. So much so that the Dems must rescue the country from the position those stupid GOP policies put us in in the first place. Interesting.

 
Back to the topic of this thread: the reason that I brought up the 800 point drop (it’s currently down another 100 today) here is because according to economists, at least a big part of the reason is the trade war with China. I believe this trade war is stupid. I don’t think it will being about good results, and it’s creating unnecessary economic problems for us. 

 
To emphasize my point about the trade war causing this downturn: this report from the International Monetary Fund came out on Monday, downgrading economic growth for both the USA and China for 2019 as a result of the tariffs: 

https://www.cnn.com/2018/10/08/economy/imf-world-economic-outlook/index.html

And then on Tuesday the sell off started. I believe this may have had much more to do with it than the rising interest rates. It’s been pointed out for months now that the stock market didn’t respond to Trump’s tariffs because they didn’t believe him, didn’t take him seriously. Now they are starting to. 

 
timschochet said:
To emphasize my point about the trade war causing this downturn: this report from the International Monetary Fund came out on Monday, downgrading economic growth for both the USA and China for 2019 as a result of the tariffs: 

https://www.cnn.com/2018/10/08/economy/imf-world-economic-outlook/index.html

And then on Tuesday the sell off started. I believe this may have had much more to do with it than the rising interest rates. It’s been pointed out for months now that the stock market didn’t respond to Trump’s tariffs because they didn’t believe him, didn’t take him seriously. Now they are starting to. 
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because it's now starting to result in actual consequences...Ford laying people off, farmers getting crushed, etc..the market thought it was a Trump bluster as no one could be that stupid due to the real economic consequences of tariffs but here we are....

 
timschochet said:
Question: if Democrats take control of the House can they stop the tariffs? 
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All these tariffs are being done under the guise of national security.  Under normal circumstances, tariffs would have to go through the standard hoops.  I don't know what the process is to get the president in check under circumstances like this, but i suspect that process does exist.

 
The Commish said:
All these tariffs are being done under the guise of national security.  Under normal circumstances, tariffs would have to go through the standard hoops.  I don't know what the process is to get the president in check under circumstances like this, but i suspect that process does exist.
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They'd have to repeal or change section 232 of the Trade Expansion Act of 1962.

 
timschochet said:
Question: if Democrats take control of the House can they stop the tariffs? 
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Congress has to pass a measure with a veto-proof majority that either overturns Trump's authority to impose section 232 of the Trade Expansion Act of 1962.  This is what allows the president to bypass Congress and via executive order impose tariffs.

 
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The Commish said:
All these tariffs are being done under the guise of national security.  Under normal circumstances, tariffs would have to go through the standard hoops.  I don't know what the process is to get the president in check under circumstances like this, but i suspect that process does exist.
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I think we Californians ought to adopt old John C Calhoun’s principle of nullification. He didn’t put up with tariffs. 

 
I'm certainly no economist, but based on what I'm reading this doesn't seem tied to the tariffs except, maybe very indirectly in ways I don't understand.  It seems to be a response to rising interest rates setting off a panic overseas, and also increasing concerns about inflation outstripping wages and how that will impact retail?  So if you want to pin it on a Trump policy it's maybe more tied to the tax bill than tariffs? But like I said I don't know what the hell I'm talking about, so feel free to educate me.

 
TobiasFunke said:
I'm certainly no economist, but based on what I'm reading this doesn't seem tied to the tariffs except, maybe very indirectly in ways I don't understand.  It seems to be a response to rising interest rates setting off a panic overseas, and also increasing concerns about inflation outstripping wages and how that will impact retail?  So if you want to pin it on a Trump policy it's maybe more tied to the tax bill than tariffs? But like I said I don't know what the hell I'm talking about, so feel free to educate me.
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It's some of each, I'd imagine.  Tariffs raise prices on products.  The interest rate increase lowers available credit and increases its price and therefore lowers available discretionary income and purchasing power for consumers.  A combination of lower purchasing power and higher prices is a tough combination.

 
TobiasFunke said:
I'm certainly no economist, but based on what I'm reading this doesn't seem tied to the tariffs except, maybe very indirectly in ways I don't understand.  It seems to be a response to rising interest rates setting off a panic overseas, and also increasing concerns about inflation outstripping wages and how that will impact retail?  So if you want to pin it on a Trump policy it's maybe more tied to the tax bill than tariffs? But like I said I don't know what the hell I'm talking about, so feel free to educate me.
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I think it’s both but I pointed out that this started right after the IMF news. 

 
Just hit 2% drop again... guess it'll be interesting to see if it bounces again in the last 50 minutes or falls through the floor.

 
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TobiasFunke said:
I'm certainly no economist, but based on what I'm reading this doesn't seem tied to the tariffs except, maybe very indirectly in ways I don't understand.  It seems to be a response to rising interest rates setting off a panic overseas, and also increasing concerns about inflation outstripping wages and how that will impact retail?  So if you want to pin it on a Trump policy it's maybe more tied to the tax bill than tariffs? But like I said I don't know what the hell I'm talking about, so feel free to educate me.
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What I'm seeing as well.  Again, this is minor stuff if you've been in the market the past 2 years.  The S&P began November 2016 at 2164.  November 2013 began at 1783.  We are still at 2732 as I'm typing this.  Those are some pretty fat annualized returns.  You can't expect to get all the upside with no bumps along the way forever and shouldn't be feeling too bad for yourself if you've been in over this time.

http://www.multpl.com/s-p-500-historical-prices/table/by-month

 
shader said:
One thing I've seen over the years is that the party with the president in power tends to talk about how awesome the economy is, and the party that doesn't have a president in power tends to be quite bearish and forecast that soon the current "policies" are going to blow things up.
Click to expand...
True.  I'm on the record that I've been underweighted in the market for too long now so any pullback I'll still be long term on the wrong side of this.  I had other reasons for it.  But we've had about 10 years now of pretty much up up and away in the market.  It can't and won't last forever regardless of who is in office.  I still feel pretty good about the market returns I've gotten over that term and am ok with sticking out some turbulence that may be coming ahead.  Nobody likes to see the red though and especially when you start stringing days or weeks or even months of days like we've had in the past couple days it can weigh on the minds of people.  2008 taught me a painful lesson in the way I looked at it.

 
Shula-holic said:
What I'm seeing as well.  Again, this is minor stuff if you've been in the market the past 2 years.  The S&P began November 2016 at 2164.  November 2013 began at 1783.  We are still at 2732 as I'm typing this.  Those are some pretty fat annualized returns.  You can't expect to get all the upside with no bumps along the way forever and shouldn't be feeling too bad for yourself if you've been in over this time.

http://www.multpl.com/s-p-500-historical-prices/table/by-month
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Of course, all about when you got in.

If you got in January of this year, you may have lost money so far.  January 23 when the tariffs were announced, S&P was over 2800.

 
Henry Ford said:
Of course, all about when you got in.

If you got in January of this year, you may have lost money so far.  January 23 when the tariffs were announced, S&P was over 2800.
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Sure.  If you are someone buying in monthly into your 401K though you should be fine as you've got the weighted average working for you.  If you tried to time the market and were in cash and decided to move in back in January, then you bet on the wrong hand of blackjack.  

 
The Left as the market skyrockets: "These gains have nothing to do with Trump and would have happened regardless (ignoring their cries before election it would tank if Trump elected)"

The Left when market drops a fraction of ganis: "It's all Trumps fault! The world is ending and it's Trumps fault!"

:lmao:

 
GoBirds said:
The Left as the market skyrockets: "These gains have nothing to do with Trump and would have happened regardless (ignoring their cries before election it would tank if Trump elected)"

The Left when market drops a fraction of ganis: "It's all Trumps fault! The world is ending and it's Trumps fault!"

:lmao:
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I gave you my reasons for giving Trump some credit when the market went up, and you liked my posts. Now I’ve given you my reason for blaming Trump some for what’s happening now. Are my reasons valid? 

 
GoBirds said:
The Left as the market skyrockets: "These gains have nothing to do with Trump and would have happened regardless (ignoring their cries before election it would tank if Trump elected)"

The Left when market drops a fraction of ganis: "It's all Trumps fault! The world is ending and it's Trumps fault!"

:lmao:
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Neither of these are really fair IMO. 

On the first one- people generally only bring up the fact that the gains are part of a longer bull market in response to Trump and his supporters trying to take credit for the gains or talking about it as if it validates their support for him. Usually it's something along the lines of "where were you when we had similar gains throughout the Obama administration?" or some such thing.  This seems like a fair assessment.

On the second one- nobody sounds anything like that here. I think it's been a pretty reasonable discussion of the factors involved. If you disagree feel free to call out some chicken little posts, but it doesn't seem like a fair characterization to me at all.

You are correct that many people, myself included, wrongly predicted the market reaction to a Trump win. I very much overestimated their concern for volatility and underestimated the reaction to effectively removing federal oversight of business practices. Most of those people (again, myself included) have repeatedly acknowledged they were wrong about this.

 
GoBirds said:
The Left as the market skyrockets: "These gains have nothing to do with Trump and would have happened regardless (ignoring their cries before election it would tank if Trump elected)"

The Left when market drops a fraction of ganis: "It's all Trumps fault! The world is ending and it's Trumps fault!"

:lmao:
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The right as the market continues to go up since the Obama recovery "Trump turned this thing around, MAGA!"

The right as the market drops "Deep state Feds are out to make Trump look bad"

 
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