I read Lucky Loser last Fall, it details Trump’s business career, analyzed his decision making. To say that Trump is a loose cannon is a massive understatement. The main method of his madness is bankruptcy. I do not put it past him to take the Country down the same road he took in his personal dealings. He will not hesitate for a second to squirm out of any of the Social Safety nets that we all hope to benefit from ( and paid into our entire working lives ).
And he will break any contract, even the ones that he initiated ( see first USMCA ).
Why would anybody in the world trust anything that or says, or any document that he signs ??
Credit ratings giant S&P Global has said it is reviewing all its macro economic forecasts in the wake of Donald Trump’s sweeping world trade tariffs this week, a move likely to fuel concerns of a renewed wave of credit score downgrades.
The firm, whose ratings judge the creditworthiness of thousands of companies and more than 130 countries, said the scope and size of U.S. President Trump’s new tariffs had exceeded most expectations.
It said it would publish its revised forecasts next week, although initial assumptions include a jump in U.S. inflation that leaves it closer to 4% by the end of the year compared with the 3% it had previously factored in.
Just after the US election, when Wall Street was all-in on the prospects of a business-friendly President Donald Trump, Peter Berezin was sounding the alarm.
Berezin and his team at the research shop BCA predicted that broad-based unilateral tariffs were coming — and that the new administration’s proposals would go well beyond what had been implemented in Trump’s first term. After this week’s tariff drama, Berezin’s December call has proved prescient. And if he’s also right about what’s next, then US stocks are nowhere near a bottom.
The strategist is sticking to his projection – among the most bearish on Wall Street last year – that the S&P 500 will decline to 4,450 by year-end. That would mark a nearly 18% drop from current levels. The price of oil, meanwhile, may fall to $50 a barrel from around $63 currently “for bad reasons: lack of demand.”
One of the Federal Reserve’s preferred recession indicators has this week deteriorated as fast as it did in 2008, the latest sign that bond investors are bracing for a sharp economic slowdown as a result of U.S. President Donald Trump’s sweeping tariffs.
There are many metrics economists and investors use to try to predict a downturn. The gap between two-year and 10-year Treasury yields for instance, is a bond market favourite.
Fed Chair Jerome Powell is said to favour the difference between the yield on three-month Treasury bills and their expected yield in 18 months.
The rationale is that this spread best reflects very near-term rate expectations in a way the gap between two-year and 10-year Treasuries does not.
When recession is looming, the spread narrows and turns negative. However, the Fed’s rate-hiking cycle that started in March 2022 flipped this spread into negative territory and kept it there as yields on T-bills were still high.
On Friday, this spread was at minus 113 basis points, its most negative since last October, but crucially, set for its biggest one-day increase since late 2008, when the global financial crisis roiled markets.
'Nam 46%. Some flannel shirts I bought at Penny’s were name in 'Nam.
India 27%
Mex 25%
Interesting that the tariffs on the big guns of South America, Brazil, Chile, and Argentina, are on 10%. It is hypothetically possible to import cars more cheaply from Brazil, than Mexico.
In my yute, I played around with trying to time the market. Failed miserably and became a believer in LTB&H. Sure, I’ve sold stocks along the way when the company started heading in a direction I’m not comfortable with. However, I still have some stocks I’ve owned for 30+ years.
I’ve held through presidents I liked and disliked and have done pretty well.
But I’m with Goofy here. As I stated back in January, something feels very different about the current administration, and I’ve followed politics for over 60 years (yes, I started young).
I adjusted my portfolio (yes, I still own stocks) in January knowing full well I might be screwing myself. But it let me sleep at night.
Will I know the market bottom to use some of my dry powder? Highly unlikely. But at some point I will put my cash back in the market when I get more comfortable.
So far, it’s working out OK.
A guy jumped off the top of the building and as he passed by the 84th floor someone asked him “How are you doing?” The jumper replied, “So far, so good.”
Sure, me too. I’ve had several batches of Berkshire since the 90’s. Not much else for that long (if anything) but I still have some others: Costco, Exxon, etc. But I moved out of other stuff, just to clear the debris if nothing else. Meanwhile the market is throwing up all over itself, and I’m off less than 1%.
They tell us most fasteners like nuts and bolts are imported. Why? That’s not a labor intensive business. Mostly keep the machines running and package the product.
But then you realize most manufacturing has moved to Asia. If nuts and bolts are made in USA, most get shipped to Asia. So easier to make in Asia.
If the process is not labor intensive and most of the product gets sent to Asia, what would be the benefit of manufacturing it here where it would be more expensive?
With economies of scale we can be the lower cost global supplier.
We have to produce more to stabilize our economy and afford our part of the global environmental cleanup. We also need to get a few socialized programs going.
I was listening to the Slate Money podcast this morning and the discussion of Trump’s desire to bring manufacturing back to the US was one of the topics they covered. There were several interesting points.
One that is getting ignored is that there has been a manufacturing boom in the US. The jobs are not being created in huge factories of the 50s and 60s employing thousands of workers. The workforce is largely robots. The dozens or hundreds of humans mostly have the jobs of programming and maintaining the “workers.”
Yes, work that can be done by 'bots can be cost effective in the US. But an auto assembly line, the focus of the current issue, is different. Stamping lines have been reduced to one person in a booth watching the bots move the steel from press to press. The welding and painting is done by bots. But, when you get to final assembly, it’s all humans.
VW Mk 8 Golf production in Wolfsburg. Hardly anyone around, until the cars get to final assembly.
Very short video of the VW plant in Puebla, Mexico. Much the same process, hardly anyone around, until the cars reach final assembly.
The Germans have learned nothing from the US’ experience with NAFTA. While the Mk 8 Golfs, in the video above, are built in Wolfsburg, for EU sale, the Mk 9, will be built in Puebla, for shipment to the EU. Meanwhile, VW lays off 35,000 Germans…and no-one can understand why the AfD is getting traction.
Already we have two companies saying they will not sell some vehicles in the US or will make more in the US. One effect is to increase production in the US. And that should mean more hours for workers and if the trends continue adding additional shifts.
Unless the USA goes into a bad recession, and that is looking entirely possible, not from macroeconomic mechanics, but from collapses of confidence due to uncertainties and inanities.
