Political Posts

[SharperDingaan]

So far it's Orange Boy throwing the punches, and the resultant US unemployment and earnings hits haven't arrived yet. All honeymoons eventually end ... then the bills have to be paid.

 

It ain't gonna be pretty.

 

SD

 

[Spooky]

https://www.wsj.com/opinion/donald-trump-tariffs-peter-navarro-6-trillion-tax-increase-2e5cc39d?st=FUy4Hn&reflink=desktopwebshare_permalink

 

Administration claiming the tariffs will raise $6 trillion over the next 10 years.

[Hektor]

On 3/30/2025 at 4:26 PM, Pelagic said:

The NYT piece today is fascinating. The bit about the Biden admin being furious the Ukrainians sunk the Moskva without telling them seems to have attracted most of the attention but there's a lot more to it. 

+1. It seems there are good reasons for the recent push for peace. Thanks for posting @Pelagic

[changegonnacome]

1 hour ago, Spekulatius said:

The trade deficit and the fiscal deficit are too different things but there is a correlation. A fiscal deficit means more private sector spending (since a deficit brings money in the private sector) which also tends to lead to more imports.

Also trade deficits leave overseas producers with dollars which flow back into dollar denominated assets (due to reserve currency status)……….becoming an incremental purchaser for sovereign debt….suppressing yields lower than they would be otherwise….crudely but in some respects….Chinese savers working 9-9-6 issued America a super low interest rate China store credit card in the 90’s….lets call it vendor financing….and we went to town on it…. both with import substitution but also increasing fiscal borrowing…it was something of a flywheel. Kind of global savings glut meets U.S. consumption machine feedback loop. 

 

Quite ingenious by the Chinese as mechanism by which they accelerated their growth by hitching their communist wagon to a consumerist capitalist engine like the US….. exporting deflation, drove rates lower, dollar recycling lower again which expanded debt to gdp cause servicing costs remained low….but now the parties over as it played out to its natural end…. The Chinese capability scares us…. They are real peer competitor.

 

Big question in a world of shrinking US trade deficits is who in the hell is gonna finance all this US debt coming due….cause you’ve just torched a natural endpoint. To say nothing of the trustworthiness of the US as a counterparty to bilateral agreements of any kind. If you can rip up the freshly inked USMCA, you can rip up a 10yr treasury held in Bejing….maybe those Chinese bond holders deserve to get torched, they turned American consumerism against us and provided us the credit conditions to be reckless.

 

[crs223]

33 minutes ago, changegonnacome said:

who in the hell is gonna finance all this US debt coming due

 

 

On 3/30/2025 at 6:46 AM, lnofeisone said:

the system need some minor tuning

 

[rogermunibond]

Federal debt is 85% held by US entities (Fed, Treasury, SS Trust Fund, Corporations, Pensions, investors, etc. etc.).

 

15% is held by foreign entitites of which half is foreign investors.

[Spekulatius]

54 minutes ago, changegonnacome said:

Also trade deficits leave overseas producers with dollars which flow back into dollar denominated assets (due to reserve currency status)……….becoming an incremental purchaser for sovereign debt

Not just debt, but US equities have also benefited from the  USD “ recycling”. I think part of the US equity premium is due to this factor.

[Hektor]

https://www.politico.com/news/2025/03/31/trump-hints-musk-doge-end-of-the-road-00262675

 

Trump hints that Musk and DOGE may be coming to the end of the road

“At some point Elon’s gonna want to go back to his company,” the president said.

 

President Donald Trump hinted Monday that his close ally Musk may have to go back to running his companies full time and that the tumultuous mission of DOGE will have been accomplished after firing tens of thousands of government employees.

 

“I think he’s amazing but I also think he’s got a big company to run and so at some point he’s going to be going back,” Trump said of the Tesla CEO. “He wants to. I’d keep him as long as I could keep him.”

 

Musk appeared to set the stage for his departure at the 130-day mark in an interview with Fox News last week, saying “I think we will have accomplished most of the work required to reduce the deficit by a trillion dollars within that time frame.”

 

[changegonnacome]

1 hour ago, Spekulatius said:

Not just debt, but US equities have also benefited from the  USD “ recycling”. I think part of the US equity premium is due to this factor.

No doubt - and to it you can add Manhattan, Miami etc real estate….

 

Lots of US assets have a bid underpinned by recycling - but also underpinned by the predictability/reliability of the sovereign (rule of law, property rights). Those two things are being eroded….the big question is whether MAGA exists without Captain Chaos at the top….if it has no future….for example this tariff gambit blows up in its face….then one could see international folks starting to look through to the midterms first, then 2028 for an off ramp from chaos…big question…. is whether the Trump effect propagates over time or creates a populist/nationalist of the left to replace it…or if we can ever get back to the centre.

 

A lot of the re-shoring is going to be predicated on a political timeline/outlook….pharma plants don’t move in weeks, months or even two years…..if MAGA blows up under the weight of its own hubris…lots of folks in industries with long capital cycles can wait it out.

[Hektor]

And the Fox News interview referenced above

 

 

 

[John Hjorth]

In my opinion, Elon Musk has already inflicited irreparable and irrevocable commercial damages to his bussinesses by assuming this DOGE gig, thereby siding POTUS. Europeans don't forget.

[Hektor]

8 minutes ago, John Hjorth said:

In my opinion, Elon Musk has already inflicited irreparable and irrevocable commercial damages to his bussinesses by assuming this DOGE gig, thereby siding POTUS. Europeans don't forget.

Elon is good for business 

 

https://www.morningstar.com/news/marketwatch/20250326100/this-guy-makes-over-100000-a-month-selling-anti-elon-musk-stickers-for-teslas

[Hektor]

9 minutes ago, John Hjorth said:

Europeans don't forget

Neither will many in the US, some of whom might return to power....in my opinion.

[cubsfan]

4 minutes ago, Hektor said:

Neither will many in the US, some of whom might return to power....in my opinion.

 

Good luck with that. The democrats are in serious trouble. 

[John Hjorth]

5 minutes ago, Hektor said:

Elon is good for business 

 

https://www.morningstar.com/news/marketwatch/20250326100/this-guy-makes-over-100000-a-month-selling-anti-elon-musk-stickers-for-teslas

 

@Hektor,

 

USD 100 K a month isen't bad, for starters.

 

He should consider adding that kind of film added to taxis etc. with commercials, but focused on and for Tesla owners, who are afraid of getting their Teslas keyed.

 

[I.e. a DUREX commercial would be perfect : 'DUREX - We protect your Tesla!']

 

That would be an awesome addition to his business. 

[cubsfan]

17 hours ago, LC said:

Sure - let's just ignore American society's massive wealth inequality and gutting of public educational and medical services.

 

Ignore the 1% who are gutting this country for profit - it's all the pronouns fault!

 

Those poor illegals - bring them back to Colorado, where you can take care of them!

 

 

[RichardGibbons]

16 hours ago, Spekulatius said:

I think as a group, legal immigrants are more productive than the existing citizens.

 

I'm curious why you think this. My guess would be that immigrants work harder, but are less productive than existing citizens. My reasoning would be that the USA has a decent education system--making the population more productive--and many of the really low productivity jobs seem to be done by immigrants.

 

Is your logic that the highly educated immigrants (e.g. doctors, silicon valley types, etc) and medium education immigrants (e.g. tradespeople) are just so much more hard working than citizens that they more than balance out the low-productivity immigrant workers?

[Hektor]

57 minutes ago, John Hjorth said:

He should consider adding that kind of film added to taxis etc. with commercials,

Commercials might not be required. Elon is the brand ambassador for Tesla and the stickers  

[Milu]

Anybody making predictions on Q1 deliveries for Tesla?

 

”Wall Street expects Tesla to have delivered about 373,000 vehicles in the January-March period, according to an average of 15 analysts' estimates from Visible Alpha that were refreshed in the past 30 days to reflect growing demand concerns. That would be a 3.6% drop from the same period a year ago, when it delivered 386,810 vehicles.”

 

If deliveries are actually down less than 5% year over year considering all the firebombing, swastikas and other negative headlines perhaps things aren’t so bad at all. 

 

[LC]

18 minutes ago, Milu said:

If deliveries are actually down less than 5% year over year considering all the firebombing, swastikas and other negative headlines perhaps things aren’t so bad at all. 

I think you'll have to parse any sales release carefully. I would imagine Elon would engage in some sale/repurchase agreement to juice numbers - similar to Tesla's fraud in Canada for 11th hour EV credits.

[Spekulatius]

15 hours ago, RichardGibbons said:

 

I'm curious why you think this. My guess would be that immigrants work harder, but are less productive than existing citizens. My reasoning would be that the USA has a decent education system--making the population more productive--and many of the really low productivity jobs seem to be done by immigrants.

 

Is your logic that the highly educated immigrants (e.g. doctors, silicon valley types, etc) and medium education immigrants (e.g. tradespeople) are just so much more hard working than citizens that they more than balance out the low-productivity immigrant workers?

It’s a combination of harder work and better education. While there is a cohort of immigrants with low education, the percentage of people with bachelors degrees is about the same than for the US (~35%) about 13% of legal immigrants have an postgraduate degree which is far higher than the US average. If you visit any company in high tech or even tech related sector, you will see a staggering amount of immigrants working in engineering and management.

Edited April 2, 2025 by Spekulatius

[Spekulatius]

Good one:

 

[Sweet]

On 3/30/2025 at 3:07 AM, Spekulatius said:

 

The only way out of this dilemma here is a massive productivity boom, because that is what is creating wealth.

 

This is why I believe the trade deficit talk is a bit of a misnomer.  Wealth is created.  Trade balances assumes that wealth is passed around.

 

Balancing the federal books, or at least having GDP growing faster than the debt, is far more important.  None of this would be a problem if the deficit was under control.

 

But I do believe trade with China (and other countries) should have faced tariffs many years ago.  Certain industries should be protected and national security is reason enough.

[John Hjorth]

Well, it isen't 1^st April any longer, but for entertainment purposes, from 1^st April, a thread on X, while the man is dead serious. ... -Enjoy!, and Happy Liberation Day! :

 

 

 

[rogermunibond]

The Jones Act which is ostensibly to protect US shipping has shown that it doesn't work.

 

Raised costs to the point that certain US states like Hawaii and Puerto Rico don't buy oil, LPG, or propane from the US.