RuleNumberOne Posted August 28, 2019 Share Posted August 28, 2019 When a US President gets down on his knees and begs a dictator for a trade deal, this is what it sounds like. The Chinese negotiators must be laughing their ass off with the "three million jobs" line. There is zero probability they are going to give Trump a trade deal. Does Trump have the guts to stick shoppers with the 30% tariff this holiday season? What a "manufactured disaster"! https://theweek.com/speedreads/861116/china-itching-trade-deal-because-cant-lose-3-million-jobs-trump-says "President Trump has nothing but compliments for China's President Xi Jinping — at least today. In a Monday press conference following the end of the G7 summit, Trump discussed his ongoing trade war with China, touching on the increased tariffs both countries levied on each other on Friday. After this many taxes, China "want to make a deal" and doesn't "have a choice," Trump said, because Xi "can't lose three million jobs in a short period of time." Yet as The Washington Post's Aaron Blake notes, while three million jobs would be a huge hit for America's 160-million-person workforce, it's more of a blink for China's 750 million workers. Still, Trump remained convinced that a "brilliant leader" like Xi wouldn't let the continued conflict "break down the Chinese system of trade." Trump then pivoted to slam China for the apparent $500 billion trade deficit it has held over the U.S. for "many many years," which, as CNN's Daniel Dale points out, is not even close to a correct number. Trump went on to pepper Xi with more compliments, calling him a "tough guy" who he respects. And when he was asked why he calls Xi a friend one day and an enemy the next, he quickly said "that's the way I negotiate. It's done very well for me over the years."" Link to comment Share on other sites More sharing options...
DooDiligence Posted August 28, 2019 Share Posted August 28, 2019 When a US President gets down on his knees and begs a dictator for a trade deal, this is what it sounds like. The Chinese negotiators must be laughing their ass off with the "three million jobs" line. There is zero probability they are going to give Trump a trade deal. Does Trump have the guts to stick shoppers with the 30% tariff this holiday season? What a "manufactured disaster"! https://theweek.com/speedreads/861116/china-itching-trade-deal-because-cant-lose-3-million-jobs-trump-says "President Trump has nothing but compliments for China's President Xi Jinping — at least today. In a Monday press conference following the end of the G7 summit, Trump discussed his ongoing trade war with China, touching on the increased tariffs both countries levied on each other on Friday. After this many taxes, China "want to make a deal" and doesn't "have a choice," Trump said, because Xi "can't lose three million jobs in a short period of time." Yet as The Washington Post's Aaron Blake notes, while three million jobs would be a huge hit for America's 160-million-person workforce, it's more of a blink for China's 750 million workers. Still, Trump remained convinced that a "brilliant leader" like Xi wouldn't let the continued conflict "break down the Chinese system of trade." Trump then pivoted to slam China for the apparent $500 billion trade deficit it has held over the U.S. for "many many years," which, as CNN's Daniel Dale points out, is not even close to a correct number. Trump went on to pepper Xi with more compliments, calling him a "tough guy" who he respects. And when he was asked why he calls Xi a friend one day and an enemy the next, he quickly said "that's the way I negotiate. It's done very well for me over the years."" The guy's an ass clown. Link to comment Share on other sites More sharing options...
Spekulatius Posted August 28, 2019 Share Posted August 28, 2019 When a US President gets down on his knees and begs a dictator for a trade deal, this is what it sounds like. The Chinese negotiators must be laughing their ass off with the "three million jobs" line. There is zero probability they are going to give Trump a trade deal. Does Trump have the guts to stick shoppers with the 30% tariff this holiday season? What a "manufactured disaster"! https://theweek.com/speedreads/861116/china-itching-trade-deal-because-cant-lose-3-million-jobs-trump-says "President Trump has nothing but compliments for China's President Xi Jinping — at least today. In a Monday press conference following the end of the G7 summit, Trump discussed his ongoing trade war with China, touching on the increased tariffs both countries levied on each other on Friday. After this many taxes, China "want to make a deal" and doesn't "have a choice," Trump said, because Xi "can't lose three million jobs in a short period of time." Yet as The Washington Post's Aaron Blake notes, while three million jobs would be a huge hit for America's 160-million-person workforce, it's more of a blink for China's 750 million workers. Still, Trump remained convinced that a "brilliant leader" like Xi wouldn't let the continued conflict "break down the Chinese system of trade." Trump then pivoted to slam China for the apparent $500 billion trade deficit it has held over the U.S. for "many many years," which, as CNN's Daniel Dale points out, is not even close to a correct number. Trump went on to pepper Xi with more compliments, calling him a "tough guy" who he respects. And when he was asked why he calls Xi a friend one day and an enemy the next, he quickly said "that's the way I negotiate. It's done very well for me over the years."" The guy's an ass clown. China never confirmed that negotiation for a new trade deal have restarted after Trump tweeted that “China wants to do a trade deal badly”. I guess Trump probably just wanted the markets to stop tanking after he had been overzealous bashing China and ordering companies to stop doing business in China. https://www.cbsnews.com/news/trump-china-trade-latest-trump-says-china-called-u-s-trade-team-twice-and-wants-to-make-a-deal-as-companies-are-leaving/ Link to comment Share on other sites More sharing options...
DooDiligence Posted August 28, 2019 Share Posted August 28, 2019 When a US President gets down on his knees and begs a dictator for a trade deal, this is what it sounds like. The Chinese negotiators must be laughing their ass off with the "three million jobs" line. There is zero probability they are going to give Trump a trade deal. Does Trump have the guts to stick shoppers with the 30% tariff this holiday season? What a "manufactured disaster"! https://theweek.com/speedreads/861116/china-itching-trade-deal-because-cant-lose-3-million-jobs-trump-says "President Trump has nothing but compliments for China's President Xi Jinping — at least today. In a Monday press conference following the end of the G7 summit, Trump discussed his ongoing trade war with China, touching on the increased tariffs both countries levied on each other on Friday. After this many taxes, China "want to make a deal" and doesn't "have a choice," Trump said, because Xi "can't lose three million jobs in a short period of time." Yet as The Washington Post's Aaron Blake notes, while three million jobs would be a huge hit for America's 160-million-person workforce, it's more of a blink for China's 750 million workers. Still, Trump remained convinced that a "brilliant leader" like Xi wouldn't let the continued conflict "break down the Chinese system of trade." Trump then pivoted to slam China for the apparent $500 billion trade deficit it has held over the U.S. for "many many years," which, as CNN's Daniel Dale points out, is not even close to a correct number. Trump went on to pepper Xi with more compliments, calling him a "tough guy" who he respects. And when he was asked why he calls Xi a friend one day and an enemy the next, he quickly said "that's the way I negotiate. It's done very well for me over the years."" The guy's an ass clown. China never confirmed that negotiation for a new trade deal have restarted after Trump tweeted that “China wants to do a trade deal badly”. I guess Trump probably just wanted the markets to stop tanking after he had been overzealous bashing China and ordering companies to stop doing business in China. https://www.cbsnews.com/news/trump-china-trade-latest-trump-says-china-called-u-s-trade-team-twice-and-wants-to-make-a-deal-as-companies-are-leaving/ He's a legend in his own mind. Link to comment Share on other sites More sharing options...
orthopa Posted August 31, 2019 Share Posted August 31, 2019 Link to comment Share on other sites More sharing options...
orthopa Posted August 31, 2019 Share Posted August 31, 2019 Looking at the US economy as a whole GDP is ~20T right? So is 100-150B of tariffs really that big of a deal in the big picture? That's what, 1-2% of US GDP? Link to comment Share on other sites More sharing options...
LC Posted August 31, 2019 Share Posted August 31, 2019 GDP is only growing 1-3% year so it does drag. Link to comment Share on other sites More sharing options...
RuleNumberOne Posted August 31, 2019 Share Posted August 31, 2019 Corporate profits are only $2.1 trillion. $150 billion in tariffs is 7% of corporate profit. It should be viewed as a %age of corporate profits because that is exactly where it is coming out of. For example, AAPL could announce next week that it is going to eat the tariffs rather than pass it on. That is a transfer from AAPL's bottomline to the government. Or AAPL could pass the tariffs to the consumer in which case fewer consumers upgrade to new iPhones/Macbooks. This is a transfer from AAPL's topline to the government. The tariffs are supposed to incentivize American companies to move by penalizing their profits. But where exactly are they supposed to move? Does anyone want to buy a $2000 iPhone? If they move to another cheap country, Trump may target the new country with tariffs. Viewing it as a %age of GDP is Peter Navarro's line and doesn't make sense. We will find out over the next few quarters how much the impact on the topline and bottomline is going to be. Link to comment Share on other sites More sharing options...
RuleNumberOne Posted August 31, 2019 Share Posted August 31, 2019 Over the very long-term it should be modeled as a %age of GDP. But right now, if the government doesn't spend the tariffs it collects and just reports a smaller budget deficit, it is a hit to GDP. (Since government debt doesn't get counted in GDP but government spending does.) Right now, for investors it is best modeled as a hit to profits. Has AAPL given any tariff-related guidance yet? Link to comment Share on other sites More sharing options...
DooDiligence Posted August 31, 2019 Share Posted August 31, 2019 Haven't the corporate tax cuts been largely nullified by tariffs? --- This guy is running the US just like he's handled all of his businesses. I wouldn't be at all surprised if he started blowing hard about defaulting on US debt. Wouldn't that be fun? --- As to how the Chinese are handling taxation. https://www.cnbc.com/2019/07/24/china-tax-cuts-may-offset-the-effects-of-trade-tariffs-economist.html Link to comment Share on other sites More sharing options...
Spekulatius Posted August 31, 2019 Share Posted August 31, 2019 Haven't the corporate tax cuts been largely nullified by tariffs? --- This guy is running the US just like he's handled all of his businesses. I wouldn't be at all surprised if he started blowing hard about defaulting on US debt. Wouldn't that be fun? --- As to how the Chinese are handling taxation. https://www.cnbc.com/2019/07/24/china-tax-cuts-may-offset-the-effects-of-trade-tariffs-economist.html You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo. Link to comment Share on other sites More sharing options...
SHDL Posted August 31, 2019 Share Posted August 31, 2019 Also if you think 1-2% of GDP is trivial you may want to know that that is roughly how much nominal GDP declined YoY between 2008/9. Not enough to end the world of course but it will be noticeable. Link to comment Share on other sites More sharing options...
DooDiligence Posted August 31, 2019 Share Posted August 31, 2019 Haven't the corporate tax cuts been largely nullified by tariffs? --- This guy is running the US just like he's handled all of his businesses. I wouldn't be at all surprised if he started blowing hard about defaulting on US debt. Wouldn't that be fun? --- As to how the Chinese are handling taxation. https://www.cnbc.com/2019/07/24/china-tax-cuts-may-offset-the-effects-of-trade-tariffs-economist.html You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo. Our era will be henceforth be known as the Limbo rate years. Trump may not be able to claim the largest real estate transaction ever with a Greenland purchase but he's highly likely to go down as the man who filed the GOAT bankruptcy. Just doing my part to stoke fear. :o (there's no goofy googley eyed emoji so this one will have to do...) Link to comment Share on other sites More sharing options...
Cigarbutt Posted August 31, 2019 Share Posted August 31, 2019 Haven't the corporate tax cuts been largely nullified by tariffs? --- This guy is running the US just like he's handled all of his businesses. I wouldn't be at all surprised if he started blowing hard about defaulting on US debt. Wouldn't that be fun? --- As to how the Chinese are handling taxation. https://www.cnbc.com/2019/07/24/china-tax-cuts-may-offset-the-effects-of-trade-tariffs-economist.html You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo. 1-Our era will be henceforth be known as the Limbo rate years. 2-Trump may not be able to claim the largest real estate transaction ever with a Greenland purchase but he's highly likely to go down as the man who filed the GOAT bankruptcy. 3-Just doing my part to stoke fear. :o (there's no goofy googley eyed emoji so this one will have to do...) 1-It's possible that a temporary truce can be reached with no material effect on the trade balance going forward so we may be in limbo for a while but the best limbo playing show that I've seen was in Hawai'i two years ago. It felt like the fire dancer was able to lower the ground. But it must have been an illusion. 2-Your previous reference to a default is interesting and, in 2016, this issue was 'discussed'. The USA defaulting on its debt sounds outrageous but the following reference originates from May 2016, at a time when negative interest rates were still not considered business as usual and when the left-leaning publication felt that the candidate did not stand a chance to win the contest. https://www.npr.org/2016/05/09/477350889/donald-trumps-messy-ideas-for-handling-the-national-debt-explained 3-Yeah, perhaps the idea is to be able to smile whatever happens and one way for this to happen is to be ready for any eventuality and to remember what Ferris said: "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." On a more serious note (keeping in mind the long tariff thread), I continue to think that the outcome will be highly conditional on the direction of the global economy as tariffs may only be a side show and not necessarily a precipitating factor. To those who say that walking on the edge of the precipice is OK if you know what you're doing, I can't help thinking about the Smoot-Hawley Act and Mr. Smoot's reaction to the reactions: those who don't support tariffs are un-Americans and use fake-news to spread their weakness. https://www.piie.com/blogs/trade-and-investment-policy-watch/trumps-2019-protection-could-push-china-back-smoot-hawley Here's a reference from one of my favorite movies that I saw as a young adult and that offered one of the first glimpses into the American Psyche. So, can anyone explain what will happen in the event that the global economy really starts to lose steam. Anyone? Link to comment Share on other sites More sharing options...
RuleNumberOne Posted August 31, 2019 Share Posted August 31, 2019 The reported GDP is real GDP (2.0%). In the example below, nominal GDP would be 3.8%, not 2.0%. Looking at the US economy as a whole GDP is ~20T right? So is 100-150B of tariffs really that big of a deal in the big picture? That's what, 1-2% of US GDP? Q2 GDP was 2.0% annualized. Q2 inflation was 1.8% annualized. The economy is basically already flat in real economic terms and any additional pile on, or reduction in economic activity, will result in an economic contraction. Link to comment Share on other sites More sharing options...
RuleNumberOne Posted August 31, 2019 Share Posted August 31, 2019 Another unreported deflationary effect is Silicon Valley housing. Home prices in some areas have fallen 20% from the peak. I myself took a nearly 20% hit compared to the peak when I sold a house recently. This hasn't been accounted for in the tariffs line item. Most engineers here are foreigners (eg. China/India) and Trump's administration has made it very painful to switch jobs and has been threatening to rescind the H4 work authorization (the threat is to rescind by the end of every month - i.e. the month never comes but the sword hangs above people's necks.) Earlier it would take a visa holder a few days to switch jobs, whereas now it takes maybe 6 months or more. This removes job security. If an engineer runs into a crazy manager, he finds it will take him 6 months to move to a secure job at another company. If their spouse's H4 work authorization is rescinded, it halves their income. Most people have just stopped buying homes over the past year. Some young Chinese engineers get their downpayment funded completely from their parents back in China, so the sentiment back home matters too. The green card for Indian engineers takes many decades now instead of years. There is too much fear and uncertainty in Silicon Valley real estate because nobody can be sure what Trump may do next. Link to comment Share on other sites More sharing options...
RuleNumberOne Posted August 31, 2019 Share Posted August 31, 2019 IMO, Software Tariffs on Canada may happen sometime in the future. The bad immigration situation for foreign engineers in the US has led to a boom in Canada. Who Just Beat the Bay Area in Tech Jobs? Toronto https://www.bloomberg.com/news/articles/2018-07-24/toronto-beats-bay-area-in-new-tech-jobs-and-new-york-in-talent Toronto’s tech scene is so hot the city created more jobs than the San Francisco Bay area, Seattle and Washington, D.C., combined last year, while leapfrogging New York in a ranking of “talent markets.” https://www.seattletimes.com/business/microsoft/microsoft-moving-canadian-headquarters-into-toronto-as-it-expands/ "As part of its investment in the country, Microsoft will spend $570 million on office expansions, including the Toronto headquarters and new offices for its Vancouver sales team and Montreal lab." Toronto tech: why Canada is attracting the ‘best’ people https://www.ft.com/content/de63f33c-34e6-11e9-bd3a-8b2a211d90d5 "82,100: The number of tech jobs added in Toronto in 2012-17, according to CBRE. That compares with 77,830 in the San Francisco Bay Area and 34,730 in Atlanta." https://press.aboutamazon.com/news-releases/news-release-details/amazon-expands-toronto-tech-hub-and-announces-plans-create-600 "With this expansion in Toronto, Amazon has this year alone announced plans to create more than 6,000 new jobs in Canada, from cloud computing and engineering roles to customer fulfillment positions" Silicon Valley Looks North as Tech Giants Expand in Toronto https://www.wsj.com/articles/silicon-valley-looks-north-as-tech-giants-expand-in-toronto-11566054001 "Silicon Valley is invading Toronto. Intel Corp. has announced plans to build a graphics-chip design lab in Canada’s largest city. Car-hailing service Uber Technologies Inc. will be opening an engineering hub. Google’s parent, Alphabet Inc., proposed building a new Toronto campus as part of a sensor-laden “smart city” on the Lake Ontario waterfront, and Microsoft Corp. said it would expand its Canadian workforce by more than 20%." Link to comment Share on other sites More sharing options...
DooDiligence Posted August 31, 2019 Share Posted August 31, 2019 Haven't the corporate tax cuts been largely nullified by tariffs? --- This guy is running the US just like he's handled all of his businesses. I wouldn't be at all surprised if he started blowing hard about defaulting on US debt. Wouldn't that be fun? --- As to how the Chinese are handling taxation. https://www.cnbc.com/2019/07/24/china-tax-cuts-may-offset-the-effects-of-trade-tariffs-economist.html You know what Venezuelans said about Chávez early on: “ He runs the country like his hacienda”. The problem with the tariffs and the game of chicken that is played are the knock on effects on confidence. Now China is slowing down, Europe is slowing down and now the US is slowing down as well. How much of this is trade war and how much is just the long economic upturn petering out is hard to know. I don’t think that interest rates and rate cuts at this point are going to make much of a difference, rates are already too low to matter, imo. 1-Our era will be henceforth be known as the Limbo rate years. 2-Trump may not be able to claim the largest real estate transaction ever with a Greenland purchase but he's highly likely to go down as the man who filed the GOAT bankruptcy. 3-Just doing my part to stoke fear. :o (there's no goofy googley eyed emoji so this one will have to do...) 1-It's possible that a temporary truce can be reached with no material effect on the trade balance going forward so we may be in limbo for a while but the best limbo playing show that I've seen was in Hawai'i two years ago. It felt like the fire dancer was able to lower the ground. But it must have been an illusion. 2-Your previous reference to a default is interesting and, in 2016, this issue was 'discussed'. The USA defaulting on its debt sounds outrageous but the following reference originates from May 2016, at a time when negative interest rates were still not considered business as usual and when the left-leaning publication felt that the candidate did not stand a chance to win the contest. https://www.npr.org/2016/05/09/477350889/donald-trumps-messy-ideas-for-handling-the-national-debt-explained 3-Yeah, perhaps the idea is to be able to smile whatever happens and one way for this to happen is to be ready for any eventuality and to remember what Ferris said: "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." On a more serious note (keeping in mind the long tariff thread), I continue to think that the outcome will be highly conditional on the direction of the global economy as tariffs may only be a side show and not necessarily a precipitating factor. To those who say that walking on the edge of the precipice is OK if you know what you're doing, I can't help thinking about the Smoot-Hawley Act and Mr. Smoot's reaction to the reactions: those who don't support tariffs are un-Americans and use fake-news to spread their weakness. https://www.piie.com/blogs/trade-and-investment-policy-watch/trumps-2019-protection-could-push-china-back-smoot-hawley Here's a reference from one of my favorite movies that I saw as a young adult and that offered one of the first glimpses into the American Psyche. So, can anyone explain what will happen in the event that the global economy really starts to lose steam. Anyone? Wow. I was unaware of the Smoot-Hawley tariffs of the 30's. History sometimes repeats & rhymes (minus the horrible economy for now.) I had seen the piece on Trumps "renegotiation" / "discounting" of US debt instruments. Being able to buy back at a discount seems at odds with his call for rate cuts. I'm going to go out on a limb here & say that we've elected Zippy the pinhead. Bueller's 1st name is my last. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted August 31, 2019 Share Posted August 31, 2019 The reported GDP is real GDP (2.0%). In the example below, nominal GDP would be 3.8%, not 2.0%. Looking at the US economy as a whole GDP is ~20T right? So is 100-150B of tariffs really that big of a deal in the big picture? That's what, 1-2% of US GDP? Q2 GDP was 2.0% annualized. Q2 inflation was 1.8% annualized. The economy is basically already flat in real economic terms and any additional pile on, or reduction in economic activity, will result in an economic contraction. You're right. My bad. Link to comment Share on other sites More sharing options...
SHDL Posted September 1, 2019 Share Posted September 1, 2019 So, can anyone explain what will happen in the event that the global economy really starts to lose steam. Anyone? Companies lose money, workers lose jobs, asset prices drop, everyone panics, governments try to save the day and end up making things worse, and Buffett goes shopping. But I have the feeling you already knew that... I think we’re seeing plenty of signs that this is already happening. The only question to me at this point is how bad is it going to get. Link to comment Share on other sites More sharing options...
SharperDingaan Posted September 1, 2019 Share Posted September 1, 2019 IMO, Software Tariffs on Canada may happen sometime in the future. The bad immigration situation for foreign engineers in the US has led to a boom in Canada. Who Just Beat the Bay Area in Tech Jobs? Toronto https://www.bloomberg.com/news/articles/2018-07-24/toronto-beats-bay-area-in-new-tech-jobs-and-new-york-in-talent Toronto’s tech scene is so hot the city created more jobs than the San Francisco Bay area, Seattle and Washington, D.C., combined last year, while leapfrogging New York in a ranking of “talent markets.” https://www.seattletimes.com/business/microsoft/microsoft-moving-canadian-headquarters-into-toronto-as-it-expands/ "As part of its investment in the country, Microsoft will spend $570 million on office expansions, including the Toronto headquarters and new offices for its Vancouver sales team and Montreal lab." Toronto tech: why Canada is attracting the ‘best’ people https://www.ft.com/content/de63f33c-34e6-11e9-bd3a-8b2a211d90d5 "82,100: The number of tech jobs added in Toronto in 2012-17, according to CBRE. That compares with 77,830 in the San Francisco Bay Area and 34,730 in Atlanta." https://press.aboutamazon.com/news-releases/news-release-details/amazon-expands-toronto-tech-hub-and-announces-plans-create-600 "With this expansion in Toronto, Amazon has this year alone announced plans to create more than 6,000 new jobs in Canada, from cloud computing and engineering roles to customer fulfillment positions" Silicon Valley Looks North as Tech Giants Expand in Toronto https://www.wsj.com/articles/silicon-valley-looks-north-as-tech-giants-expand-in-toronto-11566054001 "Silicon Valley is invading Toronto. Intel Corp. has announced plans to build a graphics-chip design lab in Canada’s largest city. Car-hailing service Uber Technologies Inc. will be opening an engineering hub. Google’s parent, Alphabet Inc., proposed building a new Toronto campus as part of a sensor-laden “smart city” on the Lake Ontario waterfront, and Microsoft Corp. said it would expand its Canadian workforce by more than 20%." A good part of this is the FX difference, and otherwise US bound talent staying in Canada instead. The same thing routinely happens in the film and media production house industries. A software engineer in Canada will often only get paid 2/3 to 3/4 of thier US eqjuivalent, and in CAD versus USD. Hence a US engineer costing 100K USD/year, will cost the equivalent of roughly 56K USD/year if he's sourced in Canada (100x.75x1/1.3300). Even if you throw in telecom and 3 face/face visits/year, it's still a lot cheaper. To some extent Canada is also a lot more immigrant friendly. If you're likely to have your kids while working in Canada, they will automatically be dual-national. SD Link to comment Share on other sites More sharing options...
finetrader Posted September 1, 2019 Share Posted September 1, 2019 I think we’re seeing plenty of signs that this is already happening. Could you list some ? Link to comment Share on other sites More sharing options...
SHDL Posted September 1, 2019 Share Posted September 1, 2019 I think we’re seeing plenty of signs that this is already happening. Could you list some ? Yes, for starters we have the various PMI indexes. The recent numbers suggest that we are starting to see general economic weakness around the world. For North America specifically there are things like AAR rail traffic data, which have been meaningfully declining YoY for a while now. There are also some isolated reports that come in every now and then that focus on specific industries. Today there was a story in the WSJ about how new truck purchases are sharply declining. And then there is the inverted yield curve. I actually have mixed feelings about this one because it could well be caused by irrational speculation in the bond market and/or excessive easing by the ECB/BOJ. But still, it has a stellar track record as a recession forecaster, and, more importantly, its message is consistent with the other signals listed above. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted September 1, 2019 Share Posted September 1, 2019 I think we’re seeing plenty of signs that this is already happening. Could you list some ? Yes, for starters we have the various PMI indexes. The recent numbers suggest that we are starting to see general economic weakness around the world. For North America specifically there are things like AAR rail traffic data, which have been meaningfully declining YoY for a while now. There are also some isolated reports that come in every now and then that focus on specific industries. Today there was a story in the WSJ about how new truck purchases are sharply declining. And then there is the inverted yield curve. I actually have mixed feelings about this one because it could well be caused by irrational speculation in the bond market and/or excessive easing by the ECB/BOJ. But still, it has a stellar track record as a recession forecaster, and, more importantly, its message is consistent with the other signals listed above. I'd also add the slowdown in RVs, negative leading indicators, the declining trend in the velocity of money, the continued pressure on real estate (particularly at the high-end), the drop in YOY corporate profits, the massive decline in consumer sentiment we just witnessed for August, and the fact that banks are now reducing the availability of credit and raising cash. All of these indicate a slowing of the economy. Further, it takes MONTHS for any easing to move through the system. That quarter-point cut that we received in July won't really resonate in the economy until later-2019. Any subsequent cuts will also take many months to be felt. As for now, we're still feeling the tightening that was occurring all the way up to the cut. Every pundit/report you see says we're not in recession because employment is still good and the consumer still strong. They're right about not BEING in a recession presently, but that says nothing the direction of an economy that is probably heading into one. Both the drop in consumer spending and the drop in employment will be LAGGING indicators that confirm the onset of the recession - they will NOT warn of its arrival. By the time the recession is confirmed, it may be too late to get out of stocks which will likely have already made significant downward progress in the correction. Link to comment Share on other sites More sharing options...
SHDL Posted September 1, 2019 Share Posted September 1, 2019 Ah yes, RVs. Not sure how I forgot about those. They are supposedly one of the best recession predictors out there. Consumer spending is a key variable to monitor, as that is what seems to be holding the US economy up at the moment. I have the suspicion that it got a temporary boost over the last few quarters because those who were paying close attention to what Trump was up to (including me) front loaded their spending. If I'm right about this we are going to see a sharp drop in consumer spending over the next few quarters, with negative consequences. Link to comment Share on other sites More sharing options...
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