Political Posts

[Castanza]

19 minutes ago, LC said:

 

Not sure I agree. Actual taxes are under congressional power. Which ironically may be blue-leaning in 2 years. Kamala alone wouldn't have been able to enact a wealth or unrealized gain tax, for example. Even if she wanted to (which I am not sure she did)

 

There is some good context here on political control over tariffs and taxes:

https://www.brookings.edu/articles/why-does-the-executive-branch-have-so-much-power-over-tariffs/

Yeah that’s how it’s supposed to work. But that doesn’t mean that’s how it’s does work. Plenty of presidents have used past acts and laws on the books to “skirt” around Congress with different provisions. 
 

I should probably take some of my own advice and stop bitching and start buying….although I’m not buying much yet…..

 

Plus Trout season starts here in PA so I’ll be occupied for a bit. My elderly neighbors gave me a vintage R.L. Winston 4wt this past winter since he can’t get out anymore. Keen on putting it to work. 

Edited April 7, 2025 by Castanza

[LC]

To my knowledge a President hasn't yet attempted to use an EO to control taxes. Not that it couldn't be tried - but it hasn't yet. 

Tariffs on the other hand have been enacted by Presidents on and off for decades now. 

 

I think my (moot) point remains: Way less likely Kamala would've attempted an executive order to raise taxes. At the very least it would've been fought tooth-and-nail from a Republican Congress as unconstitutional. Tariffs have already been delegated to the President, so Congress just rolls over.

 

Just my two cents. 

[Ulti]

https://indianexpress.com/article/world/tsunami-coming-chinas-global-exports-9930207/
 

With China’s overcapacity in industrial, low spending on its citizens and increased military spending…. I’m not sure what else the current administration can do to protect our dwindling industrial base…And as the article mentioned, other countries are coming to the same conclusions…..it’s just unfortunate that the tariffs approach is similar to the DOGE approach…. Private equity slash and burn rather than  

the thoughtful surgical…. And it’s a shame that we have alienated our traditional allies… a coordinated approach would have been much better

 

as an aside , I kinda wonder how the TPP would have done

https://en.m.wikipedia.org/wiki/Trans-Pacific_Partnership

[formthirteen]

1 hour ago, Ulti said:

other countries are coming to the same conclusions

 

Meanwhile in the EU:

https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5589

 

Quote

The investigation was announced by Ursula von der Leyen, President of the European Commission, on 13 September 2023 during her State of the European Union (SOTEU) speech. This decision was based on growing evidence about the recent and rapid rise in low-priced exports of electric vehicles coming from China to the EU. The Commission followed strict legal procedures in line with EU and WTO rules, allowing all parties concerned, including the Chinese government and companies/exporters, to present comments, evidence and arguments.

 

Too little, too late according to plans.

Edited April 7, 2025 by formthirteen

[Blake Hampton]

"The United States has had a rather healthy and steady economy for years, although it was already weakening as I began writing this letter — and that was before the recent tariff announcement. 

 

The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility.

 

Before I get into some of these issues, there is a really big “BUT” about what is considered America’s exceptional economic performance: Part of this performance has been driven by extraordinary deficit spending and the quantitative easing that took place. Since COVID-19, the federal government has borrowed and spent almost $11 trillion, and the Federal Reserve bought over $4.5 trillion in securities, creating huge liquidity in the financial system. Some of the results are exactly what you would expect: strong growth, inflation and higher corporate profits due to all the spending. But the U.S. deficit remains very large at just below $2 trillion, or 6.6% of GDP, which is the highest peacetime level ever not driven by recessionary needs (as, for example, during the pandemic). This high U.S. deficit also is associated with large trade deficits and is happening while our debt-to-GDP ratio is already over 100%, which is another peacetime high. The rest of the world has elevated debt levels and high fiscal deficits as well, although few as large as those of the United States. These large deficits are not sustainable—I do not know whether it will cause a real problem in six months or six years—the sooner we deal with it, the better.

 

Tariffs and non-tariff barriers have always been hotly contested in trade negotiation. Non-tariff barriers come in many forms and have been growing over time (regulatory barriers, government procurement, export subsidies, food restrictions, etc.). Recently, value-added taxes (VAT) have entered this debate. Economists generally see VATs as a tax on domestic expenditures that does not discriminate on the source of spending. But since the VAT does not tax exports, some see them as a non-tariff trade barrier. In any event, their effect on trade may not be very large.

 

Whatever you think of the legitimate reasons for the newly announced tariffs—and, of course, there are some—or the long-term effect, good or bad, there are likely to be important short-term effects. As for the short-term, we are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity. Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.

 

There are many uncertainties surrounding the new tariff policy: the potential retaliatory actions, including on services, by other countries, the effect on confidence, the impact on investments and capital flows, the effect on corporate profits and the possible effect on the U.S. dollar. The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse. In the short run, I see this as one large additional straw on the camel’s back.

 

I am hoping that after negotiations, the long-term effect will have some positive benefits for the United States. My most serious concern is how this will affect America’s long-term economic alliances, as I have written about in the first section.

 

Our economy also faces the unknown effects of quantitative tightening—you must remember we have never had this much quantitative easing and, therefore, quantitative tightening before. This introduces another element of uncertainty, which, in my view—particularly in conjunction with the restrictions put on market making by primary dealers—will likely lead to much higher volatility in the treasury markets. This higher volatility is not necessarily bad for JPMorgan Chase, but it is not particularly good for the capital markets. Fortunately, there are many regulatory changes now being discussed that could ameliorate the situation.

 

While inflation has come down, most of what I see in the future is inflationary: continued high fiscal deficits, the remilitarization of the world and the need for infrastructure investment, including the green economy and the restructuring of trade and tariffs.

 

Another critical point: All these factors will impact interest rates. While the Federal Reserve essentially controls short-term interest rates, it does not effectively control 10-year interest rates. The Fed can take actions that can affect the 10-year interest rate in the short run, but, ultimately, the 10-year rate will be based upon inflation, the strength of the U.S. economy and expectations of the future value of the dollar, and the supply and global demand for long-term treasuries. All things being equal, the slower the growth, the lower the interest rates, and the higher the inflation, the higher the interest rates. This tug-of-war can go on for some time, but it’s good to remember that in the stagflation of the 1970s, recessions did not stop the inexorable trend of rising rates. While interest rates have come down recently due to the weakening dollar, the risk off trade and the prospect of slower growth, this trend could still reverse.

 

Moreover, it is worth noting that we enter this time of uncertainty with high equity and debt prices, even after the recent decline. No matter how you measure it, equity valuations are still well above their historical averages. And credit spreads are still near the low end of these same ranges. Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing. I am not so sure.

 

All of these cross currents and turbulence may take years to play out. It is almost impossible to confidently put them into a quarterly or even annual forecast. We always hope for the best, but we are prepared for a full range of outcomes—lower or higher rates and potentially lower asset prices, all of which could be driven by different factors, including inflation, recession, high capital demand, successful trade negotiations, regulatory and/or tax reform, or adverse effects from ongoing wars. Even with fairly extreme outcomes, our company would remain healthy.

 

Finally, I would like to close this section by reiterating that I still have an abiding faith in America—the exceptional strength of our innovative economy and our resiliency."

 

- Jamie Dimon, J.P Morgan Chase 2024 Letter to Shareholders

 

Edited April 7, 2025 by Blake Hampton

[Blake Hampton]

^ I think he sounds optimistic.

[Intelligent_Investor]

The problem with this statement and all statements like this from Dimon and the rest of Wall Street/economists is that they always say "deficit is a problem and unsustainable in the long run" but also don't want to feel the pain of the tariffs in the short run. They also crucially don't give any alternatives to trade barriers in terms of solving the deficit issue. Seems like everyone feels they can continue on at the party and successfully leave one stroke before midnight without being left holding the bag. 

[cubsfan]

4 minutes ago, Intelligent_Investor said:

The problem with this statement and all statements like this from Dimon and the rest of Wall Street/economists is that they always say "deficit is a problem and unsustainable in the long run" but also don't want to feel the pain of the tariffs in the short run. They also crucially don't give any alternatives to trade barriers in terms of solving the deficit issue. Seems like everyone feels they can continue on at the party and successfully leave one stroke before midnight without being left holding the bag. 

 

That is exactly right. No solutions, ever. Just keep kicking the can.

[flesh]

Thought this would be useful to keep account of the madness. From grok3 just now.

 

As of April 7, 2025, news reports indicate that President Trump has made headway with several countries regarding trade deficits and tariff rates, primarily in response to his aggressive tariff policies introduced earlier this month. Here’s a breakdown based on available information:

    1.    Argentina: Reports suggest Argentina has engaged in negotiations with the U.S., with some sources claiming a zero-tariff deal has been struck. This aligns with Trump’s strategy of using tariff threats to force concessions, though official confirmation remains pending.
    2.    Israel: Similar to Argentina, Israel is mentioned as one of the countries potentially securing a zero-tariff arrangement with the U.S. This is part of Trump’s broader push to reduce trade deficits, though specific details on the agreement are not fully verified in the news yet.
    3.    Thailand: News and posts on X indicate Thailand may also have negotiated a zero-tariff deal, reflecting Trump’s approach of softening terms after initial hardline stances. However, this is based on unverified claims and lacks detailed substantiation in major outlets.
    4.    India: India is reportedly making moves toward concessions, with discussions suggesting it might reduce tariffs on U.S. goods to avoid higher retaliatory tariffs. Trump’s team has highlighted India’s engagement as a success, though no final agreement has been widely confirmed.
    5.    Canada: Canada has shown signs of flexibility, with Trump demanding a balancing of trade deficits to avoid a 25% tariff on automobiles and parts. While Canada has filed a dispute with the World Trade Organization and imposed new duties on certain U.S. vehicles, negotiations are ongoing, indicating some headway.
    6.    Taiwan: Taiwan is cited in some analyses as engaging with the U.S. to mitigate tariff impacts, though specifics are sparse. This suggests preliminary progress in addressing trade imbalances.
    7.    South Korea: There’s mention of South Korea pledging to adjust trade terms, potentially lowering tariffs on U.S. goods, as part of efforts to appease Trump’s demands and avoid escalated tariffs.
    8.    Mexico: Despite being covered under the USMCA trade pact, which initially offered a reprieve, Mexico is reportedly negotiating to “make nice” and address Trump’s trade deficit concerns, possibly through increased U.S. exports.

Additionally, broader reports indicate that over 50 countries have reached out to negotiate following Trump’s tariff announcements, as noted by White House National Economic Council Director Kevin Hassett. This includes major players like Japan, where Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to lead talks, and Vietnam, which faces a steep 46% tariff but is showing willingness to adjust trade practices.

 

 

[Gregmal]

First useful thing posted on this site in a week. Thanks!

[73 Reds]

11 minutes ago, flesh said:

Thought this would be useful to keep account of the madness. From grok3 just now.

 

As of April 7, 2025, news reports indicate that President Trump has made headway with several countries regarding trade deficits and tariff rates, primarily in response to his aggressive tariff policies introduced earlier this month. Here’s a breakdown based on available information:

    1.    Argentina: Reports suggest Argentina has engaged in negotiations with the U.S., with some sources claiming a zero-tariff deal has been struck. This aligns with Trump’s strategy of using tariff threats to force concessions, though official confirmation remains pending.
    2.    Israel: Similar to Argentina, Israel is mentioned as one of the countries potentially securing a zero-tariff arrangement with the U.S. This is part of Trump’s broader push to reduce trade deficits, though specific details on the agreement are not fully verified in the news yet.
    3.    Thailand: News and posts on X indicate Thailand may also have negotiated a zero-tariff deal, reflecting Trump’s approach of softening terms after initial hardline stances. However, this is based on unverified claims and lacks detailed substantiation in major outlets.
    4.    India: India is reportedly making moves toward concessions, with discussions suggesting it might reduce tariffs on U.S. goods to avoid higher retaliatory tariffs. Trump’s team has highlighted India’s engagement as a success, though no final agreement has been widely confirmed.
    5.    Canada: Canada has shown signs of flexibility, with Trump demanding a balancing of trade deficits to avoid a 25% tariff on automobiles and parts. While Canada has filed a dispute with the World Trade Organization and imposed new duties on certain U.S. vehicles, negotiations are ongoing, indicating some headway.
    6.    Taiwan: Taiwan is cited in some analyses as engaging with the U.S. to mitigate tariff impacts, though specifics are sparse. This suggests preliminary progress in addressing trade imbalances.
    7.    South Korea: There’s mention of South Korea pledging to adjust trade terms, potentially lowering tariffs on U.S. goods, as part of efforts to appease Trump’s demands and avoid escalated tariffs.
    8.    Mexico: Despite being covered under the USMCA trade pact, which initially offered a reprieve, Mexico is reportedly negotiating to “make nice” and address Trump’s trade deficit concerns, possibly through increased U.S. exports.

Additionally, broader reports indicate that over 50 countries have reached out to negotiate following Trump’s tariff announcements, as noted by White House National Economic Council Director Kevin Hassett. This includes major players like Japan, where Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to lead talks, and Vietnam, which faces a steep 46% tariff but is showing willingness to adjust trade practices.

 

 

@flesh Thanks.  Who is grok3?

[Fly]

10 minutes ago, 73 Reds said:

@flesh Thanks.  Who is grok3?

 

Twitter's version of ChatGPT:

 

https://grok.com

 

Also EU seems ready to talk:

 

 

Edited April 7, 2025 by Fly

[John Hjorth]

Please let's discuss the JPM shareholder letter over there instead of here. I also want to discuss it, but not by more or less derailing this topic.

[no_free_lunch]

Just now, Spekulatius said:

Counter tariffs are viable action In a tit for tat game theory game. It encourages others to

do likewise against the US.  If every trade partner does counter tariffs to the US it’s the US versus the rest of the world. All of the sudden the biggest bully is not that big any more.
 

The US become a trade island of sorts. In a way that’s the only way the US get balanced on trade because I doubt that US exports will go up much.

Respectfully, I strongly disagree on the trade.  There were $5T of trade deals announced over the past 3 months.  If that comes to pass, there is going to be significant production in the US and while I dont know how it winds through the stock market and to profits it should benefit the US economy in some way.

[cubsfan]

The letter is a symptom of the tariff bitching and moaning problem.

 

$37T debt, $1T annual debt service - everyone knows it, no one has the courage to solve it.

Or even talk about it.

 

It's why the tariffs exists. 

[cubsfan]

4 minutes ago, no_free_lunch said:

Respectfully, I strongly disagree on the trade.  There were $5T of trade deals announced over the past 3 months.  If that comes to pass, there is going to be significant production in the US and while I dont know how it winds through the stock market and to profits it should benefit the US economy in some way.

 

Right. It benefits the working class with millions of jobs. But it'll take a couple years.

[73 Reds]

10 minutes ago, Fly said:

 

Twitter's version of ChatGPT:

 

https://grok.com

 

Also EU seems ready to talk:

 

 

@FLY TY.  Ignorance is bliss.

[dealraker]

What our forum isn't dealing with (yes John....off topic ;-)) is Trump spending going before Congress presently.  I can't help but fall on the floor belly laughing that guys like cubs think this man is anything but utterly financially illiterate.  Our budget deficit is going up trillions.  No one has yet even approached understanding how bad this era is going to be for your money and lifestyle.  The US is in trouble and a stock market rally and AI isn't going to change anything.

[cubsfan]

3 minutes ago, dealraker said:

What our forum isn't dealing with (yes John....off topic ;-)) is Trump spending going before Congress presently.  I can't help but fall on the floor belly laughing that guys like cubs think this man is anything but utterly financially illiterate.  Our budget deficit is going up trillions.  No one has yet even approached understanding how bad this era is going to be for your money and lifestyle.  The US is in trouble and a stock market rally and AI isn't going to change anything.

 

Of course the deficit is out of control.. But you, like everyone else here does nothing bitch, moan, and criticize with never a solution.  

 

That will never change. 

[John Hjorth]

That's actually on topic, Charlie [ @dealraker ], !

[Parsad]

6 hours ago, no_free_lunch said:

 

Go ask your doctor to provide safety data on the COVID vaccine.  I did.   See what happens.   You will get nothing...

 

https://www.cdc.gov/vaccine-safety/vaccines/covid-19.html

 

You don't need to go to your doctor.  Cheers!

[nsx5200]

classic optimal game theory strategy.  tit for tat, with sporadic room for forgiveness to give the system a chance to move to a better state.

[Paarslaars]

14 minutes ago, dealraker said:

What our forum isn't dealing with (yes John....off topic ;-)) is Trump spending going before Congress presently.  I can't help but fall on the floor belly laughing that guys like cubs think this man is anything but utterly financially illiterate.  Our budget deficit is going up trillions.  No one has yet even approached understanding how bad this era is going to be for your money and lifestyle.  The US is in trouble and a stock market rally and AI isn't going to change anything.

BTC will save you.  

[Parsad]

5 hours ago, John Hjorth said:

 

 - Balsy - Or just balsy, like in balsy, the balls located on the chopping block

 

More like palsy!  Cheers!

[Parsad]

20 minutes ago, cubsfan said:

 

Right. It benefits the working class with millions of jobs. But it'll take a couple years.

 

In the mean time, it might bankrupt and unemploy millions.  Pick your poison!  Cheers!