In spite of the lurid numbers the stock markets are putting up, seems we need to sit on our hands, because, whatever the policy is today, it will be different tomorrow.
Steve…oooh, the drama
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The tariff us policy. We won’t tariff you. Thank you for helping us build our economy.
First things first the great depression.
Eventually we will thank you.
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I floated the idea a day or two ago: following the game plan from the early 80s: put the economy in the tank, then let the economy recover, then measure everything from the bottom of the economy and stock market, and crow about the “economic miracle” you worked.
Or, this is an extortion racket of global proportions: threaten tariffs, until the checks come in. Give the marks a reprieve, then demand another round of checks.
Steve
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That is very hard to figure out. Right now, in my IRA, I am 35% cash (45% in total when you count Treasuries and part of the balanced fund), and 12% Europe. The domestic part is low-volatility high quality stocks (think $VFMV and $QUAL). The taxable account is mostly money markets, a few CDs and a Treasury. I’m very low risk right now. Or, at least, very low risk for me historically.
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I’m certainly not sitting on my hands. I am sitting on my cash - the largest percentage I have ever had sitting in cash. This is utter idiocy we are witnessing and I want no part of it. Next stupid bounce back day I am likely to go all cash.
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All cash here. Not as much as y’all probably…for now. My game is inching closer to completion. My income may rocket.
If bottoms make you optimistic, you can imagine my pure joy.
That said I was in grief last Friday in work. It struck me millions of people may be laid off.
You can only make these threats so often without losing credibility when not following through. I suspect we are there already.
We are significantly in cash right now and hopefully soon to add another pile to the account with the sale of our primary home. Properties here are still selling like hotcakes, so fingers crossed. Sign in lawn Monday. Just glad to finally have it ready to roll and find what seems like a good agent. Will post all about the brave new way of selling real estate, after the fact.
IP
getting ready to hit the road
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As long as the threats result in checks, the threats will continue. Once in a while, someone will be “made an example of”, to keep the checks coming. Right now, it seems to be Ukraine that is being made “an example”: pay up or suffer the consequences.
Steve
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Not at all like the schoolyard bully picking the weakest kid.
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Yes. But Canada for example, after Trump again waffled and postphoned tariffs on them, is wisely choosing to punish not the specific extortion attempt but rather the ongoing mode of extortion, treating USA under Trump as a pure extortion racket.
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Has he received checks for the delays on tariffs on Mexico and Canada? I understand he has Ukraine over a barrel, (to edit out another phrase that someone found to offend their sensibilities, but I trust you get the picture.) Tariffs don’t seem to be working so well for him, unless I have missed the payoff. Entirely possible.
IP
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Trump seems essentially incapable of emotions such as loyalty or patriotism, and not understanding these primal experiences he underestimates their existence and power.
Mexicans and Canadians I have spoken with are willing to undergo some actual difficulties/burdens if it means Trump gets a bloody nose.
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He has reportedly had very close consultations with the big three automakers. We know that Ford and GM each “donated” $1M to the inauguration, so their checkbooks are open.
Steve
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‘No room left’ for a deal: Trump says Canada, Mexico tariffs take effect Tuesday
https://www.politico.com/news/2025/03/03/lutnick-trump-canada-mexico-tariffs-00207238
…
“Stories like Jeff’s remind us that tariffs are not just about protecting American jobs,” Trump said. “They’re about protecting the soul of our country.”
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Trump walks back tariffs on a range of goods from Mexico and Canada for one month
Art of the Deal should be retitled, “Seat of my pants.”
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A rational, phased in, domestic content law, could be a rational approach. The USMCA does that, to a degree, increasing NAFTA’s 67% to 75% NAFTA zone content. But the alternative to USMCA compliance was paying a paltry 2.5% tariff on cars, so there was not a lot of incentive for automakers to comply, vs using cheaper parts from elsewhere.
But precipitate and extreme action freaks out a lot of people, and creates opportunities for “gratuities”, and “protected free speech”.
Steve
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Wait, Trump said that was the best deal ever. You can’t say anything negative about USMCA.
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Those two sentences are the definition of cognitive dissonance.