Gregmal Posted August 23, 2019 Posted August 23, 2019 Generally yes, lower prices are good. And Im all for it, as I've said before, to an extent. The extent, is that these "things" have to be short term issues, or undoable. Trump has gotten so far off base that some of this may be irreversible. Then, "lower prices" just turn into "the prices", or worse, "the high prices". For instance, if you're long some of these companies with China exposure, the rhetoric gets you a nice little entry. If and when things are fixed, you're all good. But to the extent the rhetoric escalates and goes on too long, or like today, becomes real, so then to do the impairments...
Guest Posted August 23, 2019 Posted August 23, 2019 Generally yes, lower prices are good. And Im all for it, as I've said before, to an extent. The extent, is that these "things" have to be short term issues, or undoable. Trump has gotten so far off base that some of this may be irreversible. Then, "lower prices" just turn into "the prices", or worse, "the high prices". For instance, if you're long some of these companies with China exposure, the rhetoric gets you a nice little entry. If and when things are fixed, you're all good. But to the extent the rhetoric escalates and goes on too long, or like today, becomes real, so then to do the impairments... I can think of many things that more irreversible than trade issues. Capitalism tends to heal most wounds long term. ;)
DooDiligence Posted August 23, 2019 Posted August 23, 2019 How do you reverse a brainwashed, irrational electorate?
writser Posted August 23, 2019 Posted August 23, 2019 How do you reverse a brainwashed, irrational electorate? Question of the decade ..
Gregmal Posted August 23, 2019 Posted August 23, 2019 How do you reverse a brainwashed, irrational electorate? Do away with politics! That said, what you described is a predictable element of the equation. We know how both sides react to things typically and adjust our expectations based on such.
Guest Posted August 23, 2019 Posted August 23, 2019 Part of me would kind of like it if Trump just came out of no where and banned all trade with China (though I'd prefer for people not to get hurt in the real world). I can assure you that a lot of people will get hurt in the real world if he were to do this. Job losses, financial losses, inflation, the inability to buy essential goods, ... it will be amazing. If I were President and I wanted to see the country burn I would seriously consider doing this. Maybe launch a few nuclear missiles too while I'm at it, because why not? Yes, I'm sure. That's why the selfish part of me that likes cheap stocks wants that to happen. With that being said, I think the US has had it easy for too long. A bit of economic suffering builds character long term. I know it did for me.
Cardboard Posted August 23, 2019 Author Posted August 23, 2019 "Shouldn't you guys be hoping for lower prices, not higher ones?" Sorry but, this is the Warren Buffett typical line because he sits on billions in cash and has recurring free cash flow coming in weekly which he doesn't know what to do with. Could also be advantageous to a regular salary earner who saves monthly into ETF or funds. I don't think that any of us here are in this situation or at least those actively investing. My view is that if you can't find bargains at our size, you are lazy. Therefore sure, these selloff's offer opportunities but, when you are already close to fully invested (if not at our size you are a market timer or again lazy) it hurts from the process/goal of buying cheap, selling, then repeating. A stable market works better for value to be recognized vs these ups and downs of the general market when everything tends to be heavily correlated. The other logical alternative is to sell something that is cheap to buy something cheaper during these sell-offs. It works but, it is hard and sometimes elusive. Cardboard
John Hjorth Posted August 23, 2019 Posted August 23, 2019 Cardboard's posts today in this topic actually made me - finally - try to read up a bit the Presidential Powers of the POTUS [i used the Wikipedia article about it, just for starters]. I realized the concept of "Commander in Chief" and that declaration of war is a congressional matter. Where is line between these two concepts? How should we think about it in this actual context? [Trump, Xi & the US/China trade dispute]. This "thing" started on March 1st 2018 [Link]. No end/solution/agreement in sight so far. The last couple of days I've been studying a few small Danish banks, that - on surface - seem dirt cheap. Perhaps I should consider one of those Fentanyl patches instead. The user experience reads fantastic.
Guest Posted August 23, 2019 Posted August 23, 2019 "Shouldn't you guys be hoping for lower prices, not higher ones?" Sorry but, this is the Warren Buffett typical line because he sits on billions in cash and has recurring free cash flow coming in weekly which he doesn't know what to do with. Could also be advantageous to a regular salary earner who saves monthly into ETF or funds. I don't think that any of us here are in this situation or at least those actively investing. My view is that if you can't find bargains at our size, you are lazy. Therefore sure, these selloff's offer opportunities but, when you are already close to fully invested (if not at our size you are a market timer or again lazy) it hurts from the process/goal of buying cheap, selling, then repeating. A stable market works better for value to be recognized vs these ups and downs of the general market when everything tends to be heavily correlated. The other logical alternative is to sell something that is cheap to buy something cheaper during these sell-offs. It works but, it is hard and sometimes elusive. Cardboard Are you retired?
Spekulatius Posted August 23, 2019 Posted August 23, 2019 Got to admit that it is fun to watch a “presidential meltdown”. Will pop a beer tonight and turn on Fox News.
KCLarkin Posted August 23, 2019 Posted August 23, 2019 Doubling down! https://twitter.com/realDonaldTrump/status/1165005927864512512 Respect. Dude knows how to escalate a trade war!
meiroy Posted August 24, 2019 Posted August 24, 2019 Surprisingly, there was no meltdown. He handled it quite decently. #SupportTheExpansion
DooDiligence Posted August 24, 2019 Posted August 24, 2019 Surprisingly, there was no meltdown. He handled it quite decently. #SupportTheExpansion You must be talking about Xi.
Jurgis Posted August 24, 2019 Posted August 24, 2019 Civ VI: Donald vs. Xi I've got tariffs! I've got tariffs! I've got nukes and tariffs! I've got nukes and tariffs! I've got space program, nukes, and tariffs! I've got space program, nukes, and tariffs! I've got Greenland, space program, nukes, and tariffs! ... ... ...
wescobrk Posted August 24, 2019 Posted August 24, 2019 Next week should be interesting. Trump is the greatest gift for traders.
abitofvalue Posted August 24, 2019 Posted August 24, 2019 Part of me would kind of like it if Trump just came out of no where and banned all trade with China (though I'd prefer for people not to get hurt in the real world). I can assure you that a lot of people will get hurt in the real world if he were to do this. Job losses, financial losses, inflation, the inability to buy essential goods, ... it will be amazing. If I were President and I wanted to see the country burn I would seriously consider doing this. Maybe launch a few nuclear missiles too while I'm at it, because why not? But Trade is a congressional power. They have delegated it to the president but it would be relatively straight forward to change back to Congress. If Trump banned all trade with China after loosing the election, you would hope the Republicans who survived would band together with Dems to reverse course and take trade powers back - it would serve their donors, constituencies and limit powers of the next dem president.. Got to love the party that is constantly warning the other party is a socialist, standing by and supporting the 'hereby ordering' of private companies to work against their own economic interests.
orthopa Posted August 24, 2019 Posted August 24, 2019 There is no reason to give in to China and honestly you wont see Congress act. Because this needs to be done. Where is everyone speaking out against this? Dems? Repubs? No one. This needs to be done. Plain and simple. Trump has tied himself to the market but volatility is a necessary price to pay at this point. Raise em again if you have to, crush the fucking Chinese.
SharperDingaan Posted August 24, 2019 Posted August 24, 2019 The reality of course is that the 2 largest economies need each other. China needs the US to buy their goods, and the US needs China to finance its deficit. However, just as in a bar fight, there comes a point when the smartest thing is to just let them slug it out - until only one is left standing. Most would think that per the pending election, if this continues, it will be the Republicans/Trump leaving the ring. In the meantime ... let the trading gifts continue. Per those 100 year bonds, we need the market YTM driven to zero. Cut that fed rate baby, cut! SD
meiroy Posted August 25, 2019 Posted August 25, 2019 The reality of course is that the 2 largest economies need each other. China needs the US to buy their goods, and the US needs China to finance its deficit. However, just as in a bar fight, there comes a point when the smartest thing is to just let them slug it out - until only one is left standing. Most would think that per the pending election, if this continues, it will be the Republicans/Trump leaving the ring. In the meantime ... let the trading gifts continue. Per those 100 year bonds, we need the market YTM driven to zero. Cut that fed rate baby, cut! SD Nonsense. What a bunch of bollocks. Not only the US does not need it to "finance its deficit" it should tax capital inflows. If treasuries are sold, either there's no impact on the US or there's a positive impact. Either that or all the surplus countries, including Germany and Japan increase local demand via adjusting local regulation (this is the reason for the imbalances, suppression of local demand via local regulation). This is not going to happen, of course, any time soon.
DooDiligence Posted August 25, 2019 Posted August 25, 2019 The reality of course is that the 2 largest economies need each other. China needs the US to buy their goods, and the US needs China to finance its deficit. However, just as in a bar fight, there comes a point when the smartest thing is to just let them slug it out - until only one is left standing. Most would think that per the pending election, if this continues, it will be the Republicans/Trump leaving the ring. In the meantime ... let the trading gifts continue. Per those 100 year bonds, we need the market YTM driven to zero. Cut that fed rate baby, cut! SD Nonsense. What a bunch of bollocks. Not only the US does not need it to "finance its deficit" it should tax capital inflows. If treasuries are sold, either there's no impact on the US or there's a positive impact. Either that or all the surplus countries, including Germany and Japan increase local demand via adjusting local regulation (this is the reason for the imbalances, suppression of local demand via local regulation). This is not going to happen, of course, any time soon. Once again, in plain English.
Cigarbutt Posted August 25, 2019 Posted August 25, 2019 The reality of course is that the 2 largest economies need each other. China needs the US to buy their goods, and the US needs China to finance its deficit. However, just as in a bar fight, there comes a point when the smartest thing is to just let them slug it out - until only one is left standing. Most would think that per the pending election, if this continues, it will be the Republicans/Trump leaving the ring. In the meantime ... let the trading gifts continue. Per those 100 year bonds, we need the market YTM driven to zero. Cut that fed rate baby, cut! SD Nonsense. What a bunch of bollocks. Not only the US does not need it to "finance its deficit" it should tax capital inflows. If treasuries are sold, either there's no impact on the US or there's a positive impact. Either that or all the surplus countries, including Germany and Japan increase local demand via adjusting local regulation (this is the reason for the imbalances, suppression of local demand via local regulation). This is not going to happen, of course, any time soon. Once again, in plain English. Since this remains an open-ended question, in relation to the chicken and egg confusion, here goes. Does the trade imbalance come from the rest of the relevant world saving too much and not consuming enough (saving glut, Bernanke 2005 ®) and therefore dependent on the ultimate currency or does it come from the US consuming too much and not saving enough and therefore dependent on the rest of the relevant world to finance the private and public deficits? This is a bilateral dependency but my take is that it is not symmetric (in terms of causes and outcomes) and I side with SD on this one because I think meiroy falls into the now widely defined trap of focusing on the financial aspect of a transaction over the substance of a transaction. In plain English, here's a biased example that hopefully may help. Let's say one has developed a consumer dependency of some kind, let's say an opioid dependence. Let's assume that one has entered the stage where one consumes more than one earns, and one represents the biggest client of the dealer who, somehow, has to accept one's currency and where the dealer has lent one back the currency in order to allow one to continue to consume and the situation has reached a stage where it is felt that the consumption trend is unsustainable. How to deal with this? -The tariff solution Someone figures that the best way to curb the inflow of the currency is to point a finger and to make the drug more expensive. -The meiroy international tax on capital inflows Someone figures that you could point a finger and unilaterally devalue the currency once it has been spent. -Me thinks that diving interest rates will help to extend and pretend but one should do a root cause analysis and deal with the internal saving-consumption imbalance. In all fairness and to balance the biased example above, some 'analysts' whom I respect a lot tend to agree with meiroy. https://carnegieendowment.org/chinafinancialmarkets/79641
John Hjorth Posted August 25, 2019 Posted August 25, 2019 The Emotion Machine - Steven Handel [July 24th 2009] : “Gam zeh ya’avor” - This Too Shall Pass: A Lesson In Impermanence.[1] - - - o 0 o - - - [1] To me, very well written - but at times not easy to practice.
meiroy Posted August 25, 2019 Posted August 25, 2019 Cigarbutt, Pettis is not an analyst. He is one of the best economists in the world with an amazing macro view on things. He's out there with Druckenmiller and Soros. He does have a certain blindspot which distorts his timing, but other than that, he is the best... and for sure, it is not he that agrees with me. At best, it is little me who is trying to understand what he teaches.
DooDiligence Posted August 25, 2019 Posted August 25, 2019 The reality of course is that the 2 largest economies need each other. China needs the US to buy their goods, and the US needs China to finance its deficit. However, just as in a bar fight, there comes a point when the smartest thing is to just let them slug it out - until only one is left standing. Most would think that per the pending election, if this continues, it will be the Republicans/Trump leaving the ring. In the meantime ... let the trading gifts continue. Per those 100 year bonds, we need the market YTM driven to zero. Cut that fed rate baby, cut! SD Nonsense. What a bunch of bollocks. Not only the US does not need it to "finance its deficit" it should tax capital inflows. If treasuries are sold, either there's no impact on the US or there's a positive impact. Either that or all the surplus countries, including Germany and Japan increase local demand via adjusting local regulation (this is the reason for the imbalances, suppression of local demand via local regulation). This is not going to happen, of course, any time soon. Once again, in plain English. Since this remains an open-ended question, in relation to the chicken and egg confusion, here goes. Does the trade imbalance come from the rest of the relevant world saving too much and not consuming enough (saving glut, Bernanke 2005 ®) and therefore dependent on the ultimate currency or does it come from the US consuming too much and not saving enough and therefore dependent on the rest of the relevant world to finance the private and public deficits? This is a bilateral dependency but my take is that it is not symmetric (in terms of causes and outcomes) and I side with SD on this one because I think meiroy falls into the now widely defined trap of focusing on the financial aspect of a transaction over the substance of a transaction. In plain English, here's a biased example that hopefully may help. Let's say one has developed a consumer dependency of some kind, let's say an opioid dependence. Let's assume that one has entered the stage where one consumes more than one earns, and one represents the biggest client of the dealer who, somehow, has to accept one's currency and where the dealer has lent one back the currency in order to allow one to continue to consume and the situation has reached a stage where it is felt that the consumption trend is unsustainable. How to deal with this? -The tariff solution Someone figures that the best way to curb the inflow of the currency is to point a finger and to make the drug more expensive. -The meiroy international tax on capital inflows Someone figures that you could point a finger and unilaterally devalue the currency once it has been spent. -Me thinks that diving interest rates will help to extend and pretend but one should do a root cause analysis and deal with the internal saving-consumption imbalance. In all fairness and to balance the biased example above, some 'analysts' whom I respect a lot tend to agree with meiroy. https://carnegieendowment.org/chinafinancialmarkets/79641 The Carnegie article is very interesting. I had never thought about the effects of inflows. I feel like there's a very influential human factor which also contributes to the low US savings rate. We are constantly being sold to & our hot buttons have been pushed so hard that they are stuck. "You'll be happy if you buy, buy, buy." I constantly feel the need to buy a bunch of crap but, like many here on CoBF, have developed a filter and prefer the "feel good" of saving over consumption. CNBC & the like are constantly pushing a similar set of buttons with, so called, investors. "Can't stand still. Bye bye savings." I've mentioned Frederic Pohl's "Midas World" before & believe it's the best satirical illustration of consumerism run amuck. --- Back to the Carnegie piece. If we restrict capital inflow, China will invest heavily in Brasil or India, for example, & create another huge consumption based economy? Seems to me that if China were to keep more capital in their own economy they would accomplish the same thing at home, yes? Why don't they do this? --- My limited understanding inclines me towards the authors arguments in favor of restricting inflows but I do not believe the present administration would understand the authors proposals. They don't present any obvious pain points & he seems to enjoy inflicting pain.
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