Political Posts

[cwericb]

13 minutes ago, dwy000 said:

Some of this is definitely true (over reaction and ability to undo some of the damage in a couple of years when he's gone) but the ability to do ling term damage during that period is very, very real.

 

The trade agreements being negotiated between EU, China, Canada, Brazil and other countries to remove historic barriers in response to Trumps tariffs is real and very long lasting. This will reshape trade long after Trump is gone.

 

And the trust that underpinned relationships that was supposed to transcend presidents is also gone. Whether it's trade, NATO, Ukraine, Greenland, Panama, Canada, etc, countries can no longer just assume the US will be a supportive partner. The has very long term impacts.

 

If you slap a friend, yes the physical wound will heal but the relationship is altered forever. 

 

 

And to think otherwise is rather arrogant.

[Luke]

17 minutes ago, dwy000 said:

Some of this is definitely true (over reaction and ability to undo some of the damage in a couple of years when he's gone) but the ability to do ling term damage during that period is very, very real.

 

The trade agreements being negotiated between EU, China, Canada, Brazil and other countries to remove historic barriers in response to Trumps tariffs is real and very long lasting. This will reshape trade long after Trump is gone.

 

And the trust that underpinned relationships that was supposed to transcend presidents is also gone. Whether it's trade, NATO, Ukraine, Greenland, Panama, Canada, etc, countries can no longer just assume the US will be a supportive partner. The has very long term impacts.

 

If you slap a friend, yes the physical wound will heal but the relationship is altered forever. 

Precisely. His moves are impacting investment decisions and partnerships everywhere. It will also impact tourism, education, research cooperation, prestige of brands (look at musk and tesla), look at the abolish US products movement.

 

The list is long.

 

Even with a democract who tries to fix things, 4 years mean a lot in a ever faster changing world and the ball might lie somewhere else at that point.

 

But on the other hand company moats are real and i believe 4 years into the future, many moats will continue to exist in US companies.

Edited April 13, 2025 by Luke

[Santayana]

1 hour ago, Peregrine said:

Yeah, China is an autocratic state but China has never imposed unilateral and arbitrary tariffs on anyone,

Isn't China's currency manipulation just a tariff by another name?

[Spekulatius]

1 hour ago, Peregrine said:

 

There has been a very large spread on Canadian oil for years now which has now narrowed this year. WCS is now priced at $9 below WTI whereas it has historically been around $15. So it seems clear that the burden is not being born by just Canadian producers - if anything, I expect US refineries to bear most of it - especially in an environment where gasoline demand shrinks. US refineries (namely those in the Midwest) don't have many alternatives outside of Canadian heavy oil and they've been taking advantage of the discounted oil in the form of higher crack spreads for a long time.

Seem like you are ight. Thanks for the data. Anecdotally, prices at the pump have gone up here in the East coast since the trade war started despite crude oil going lower.

[Spekulatius]

@TwoCitiesCapital well said.

[Castanza]

1 hour ago, dwy000 said:

Some of this is definitely true (over reaction and ability to undo some of the damage in a couple of years when he's gone) but the ability to do ling term damage during that period is very, very real.

 

The trade agreements being negotiated between EU, China, Canada, Brazil and other countries to remove historic barriers in response to Trumps tariffs is real and very long lasting. This will reshape trade long after Trump is gone.

 

And the trust that underpinned relationships that was supposed to transcend presidents is also gone. Whether it's trade, NATO, Ukraine, Greenland, Panama, Canada, etc, countries can no longer just assume the US will be a supportive partner. The has very long term impacts.

 

If you slap a friend, yes the physical wound will heal but the relationship is altered forever. 

Do you trust China more than you trust the US long term?

 

Do you trust China more than you trust the US short term? 
 

 

[Luke]

4 minutes ago, Castanza said:

Do you trust China more than you trust the US long term?

I think right now its 60/40 in favour of China.

 

And you dont know how much power Trump will raise, they are trying to get control of all regulatory bodies, judges etc

 

Maybe he will pull some emergency power move at some point, he has a team working on trying to get around third term etc.

 

With China you at least have stability.

[dwy000]

14 minutes ago, Castanza said:

Do you trust China more than you trust the US long term?

 

Do you trust China more than you trust the US short term? 
 

 

Probably not but the same can be said of any other country. I would hope you could trust your own leaders more than foreign leaders to do whats in your best interest but that has also been thrown a wrench by Trump.  Right now I'd probably trust Canada and the EU to stick to their word more than Trump.

 

I'm not sure what that has to do with the chaos he is causing and it's impact on our relationships both short and long term. 

[Castanza]

10 minutes ago, Luke said:

I think right now its 60/40 in favour of China.

 

And you dont know how much power Trump will raise, they are trying to get control of all regulatory bodies, judges etc

 

Maybe he will pull some emergency power move at some point, he has a team working on trying to get around third term etc.

 

With China you at least have stability.

I have said already that I think Presidential powers have grown too far since Clinton. Trump is the worst one to have the office who could take advantage. I agree with all that. I also think the tariffs are a net negative in the short term and do slightly change things long term. But I see much more chance of amends being made than some on this forum seem to think. 
 

Everything people are afraid of trump for is something Xi already had and does. So how does that make sense? 
 

It’s putting the cart before the horse imo. 

[cwericb]

6 minutes ago, Castanza said:

 But I see much more chance of amends being made than some on this forum seem to think. 
 

 

 

Easy for you to say, but you are not speaking from the receiving end.

[Peregrine]

2 hours ago, Castanza said:

Mhmm you mean like Covid-19 where global trade came to a complete standstill and killed how many people? 
 

20% more expensive Nike shoes vs that 

 

again…way over emotional….

 

I'm not sure how Covid-19 has anything to do with what we were talking about. Can you elaborate?

[nsx5200]

2 hours ago, TwoCitiesCapital said:

Isn't the Republican party supposed to be the party of individual responsibility and voting with your dollars?

That was the old Republican party.  Would the old Republican party advocate for crypto, or even side with Russia?  The new Republican party is RINO.

[Spooky]

1 hour ago, Spekulatius said:

Seem like you are ight. Thanks for the data. Anecdotally, prices at the pump have gone up here in the East coast since the trade war started despite crude oil going lower.

 

That's interesting, around Toronto gas prices have fallen a decent amount.

[Castanza]

43 minutes ago, Peregrine said:

 

I'm not sure how Covid-19 has anything to do with what we were talking about. Can you elaborate?

Merely a comment about disruption to the supply chains. Obviously in a different manner. From an investment angle I am trying to think about what will be more disruptive. Tariffs or Covid-19. 
 

edit: I also find it fascinating how people can hold two views that are polar opposite of each other. Globalism is in a weird place. Tariffs are bad for both the below as they create more expensive goods and punish poor nations with likely resulting in even worse working conditions. Never the less, people hold both of the below views at the same time. What is the solution? 

- Speaking out against sweat shops and poor working conditions

- While also wanting cheap goods. 
 

 

Edited April 13, 2025 by Castanza

[mattee2264]

Tariffs can be rescinded especially if this trade war does a lot of damage to the global economy over the next few years. Periodically it seems people need a real time economic lesson that despite the emotional appeal of protectionism it does a lot more harm than good. 

 

Oh and the latest from Lutnick is that while semiconductors etc are exempted from the reciprocal tariffs they will be subject to their own special tariff increases which will come into effect in a month or so. Seems to me as if Trump and his team haven't given up on tariffs but are going to phase them in haphazardly and change the rules all the time so no one is able to keep track and there is always a positive headline with the devil buried in the detail and maximum flexibility so any adverse changes never get fully priced in with the markets able to hope for a pivot. Next we'll have tariff "forward guidance" and tariff setting monthly meetings. 

 

I don't see how any businesses can operate in this kind of crazy environment. Businesses are necessarily short term oriented because they have shareholders who care about quarterly results and how the hell are you supposed to plan when you don't know what your prices are going to be over the next few years and all your supplier relationships are being messed up as you have to factor in differential tariff rates. And what are you supposed to do? Take advantage of the pause to front-run potential increases and stockpile and pay the 10%? Or front-wait in the hope that zero-for-zero deals get struck over the 90 days? 

 

He should have simply just implemented 10% tariffs across the board (perhaps 20% for China) and then launched proper trade talks over a course of months. At least it would have allowed businesses to anchor on the 10% rate and then considered the possibility of modest increases or decreases depending on the outcome of trade talks. 

 

I'm not worried about markets. They will do what they did before Liberation day and assume Trump is bluffing and look through to an expected total capitulation. 

But I do not think businesses will be so blasé and they will look to try to reduce their reliance on USA and defensively stockpile which if enough companies try to do will mess up supply chains or they will cut investment and employment. And various other responses which while individually rational will collectively put a major dent on global growth and could increase short term inflationary pressures. 

 

 

[Luke]

Always a pleasure to read things on this board. So many diverse standpoints, really helps me shaping my opinion on this topic. Keep it up everyone. Fully mean it  

Edited April 13, 2025 by Luke

[Spekulatius]

2 hours ago, Castanza said:

Do you trust China more than you trust the US long term?

 

Do you trust China more than you trust the US short term? 
 

 

I would trust neither right now as an independent country. The long term depends on if the USA remains a Republic. The chance that the USA is not a Republic any more a decade from now is higher than it has been since the civil war.

Right now, I think there is a risk that we go down an Imperialistic path which seems to be the MAGA vision. China is already imperialist country with a thin veil. No good choices.

 

Welcome to the multipolar world. US hegemony for sure has ended regardless what is happening next.

[cubsfan]

5 hours ago, TwoCitiesCapital said:

Elon Musk may not be a white supremacist, but he is continuing a line of failing to condemn/distance from white supremacists while dog-whistling for them. We have dozens of examples of this under the Trump administration from both times around. 

 

I have an autistic brother. He doesn't Nazi salute. Any body with eyes knows what they saw and doesn't need to make excuses about it or blame it on his Asperger's. The man is a certified genius - there is no way that was accidental or unintentional. 

 

The movement in no way conveys 'my heart goes out to you' and is dramatically different than the motion he did in Asia for the same line. He knows what he did and he did it intentionally. 

 

I don't know his personal beliefs. I can believe the Nazi stuff is overplayed and exaggerated for what he did. But I can also believe a wealthy white man from apartheid South Africa who is claiming genocide against white farmers doing a Nazi salute isn't something that should be so easily dismissed. 

 

I also believe there are consequences to your actions. Isn't the Republican party supposed to be the party of individual responsibility and voting with your dollars? It would be nice to see them acknowledge that what is happening  is just those sMs principles instead of pretending this a baseless witch-hunt from the left. 

 

He's definitely a white supremacist, NAZI and KKK member, all rolled in to one.

He probably hates gays and women as well. 

 

Look for him to continue supporting genocide for anyone that does not agree with him.

 

You've really nailed him.

[cubsfan]

6 hours ago, Sinbius said:

 

Do you realize that Trump represent US? ...so when he is trying to bully Canada, China Eu etc...it is US that is doing it...

When Trump calls EU parasites...It is US that is calling EU parasites...

When he show he is not a trustworthy business partner to make a deal with...it is US that is not a trustworthy partner to make a deal with...

 

Put your trust in President Xi! 

 

Don't forget to thank him for unleashing a virus that killed millions worldwide.

[cubsfan]

3 hours ago, Luke said:

I think right now its 60/40 in favour of China.

 

And you dont know how much power Trump will raise, they are trying to get control of all regulatory bodies, judges etc

 

Maybe he will pull some emergency power move at some point, he has a team working on trying to get around third term etc.

 

With China you at least have stability.

 

Oh yeah.  The regime in China had NO problem killing 60 million of it's own citizens during the purges.

 

You can have stability when you crush everyone in your path, including your own citizens.

 

 

[Spekulatius]

2 hours ago, mattee2264 said:

Tariffs can be rescinded especially if this trade war does a lot of damage to the global economy over the next few years. Periodically it seems people need a real time economic lesson that despite the emotional appeal of protectionism it does a lot more harm than good. 

 

Oh and the latest from Lutnick is that while semiconductors etc are exempted from the reciprocal tariffs they will be subject to their own special tariff increases which will come into effect in a month or so. Seems to me as if Trump and his team haven't given up on tariffs but are going to phase them in haphazardly and change the rules all the time so no one is able to keep track and there is always a positive headline with the devil buried in the detail and maximum flexibility so any adverse changes never get fully priced in with the markets able to hope for a pivot. Next we'll have tariff "forward guidance" and tariff setting monthly meetings. 

 

I don't see how any businesses can operate in this kind of crazy environment. Businesses are necessarily short term oriented because they have shareholders who care about quarterly results and how the hell are you supposed to plan when you don't know what your prices are going to be over the next few years and all your supplier relationships are being messed up as you have to factor in differential tariff rates. And what are you supposed to do? Take advantage of the pause to front-run potential increases and stockpile and pay the 10%? Or front-wait in the hope that zero-for-zero deals get struck over the 90 days? 

 

He should have simply just implemented 10% tariffs across the board (perhaps 20% for China) and then launched proper trade talks over a course of months. At least it would have allowed businesses to anchor on the 10% rate and then considered the possibility of modest increases or decreases depending on the outcome of trade talks. 

 

I'm not worried about markets. They will do what they did before Liberation day and assume Trump is bluffing and look through to an expected total capitulation. 

But I do not think businesses will be so blasé and they will look to try to reduce their reliance on USA and defensively stockpile which if enough companies try to do will mess up supply chains or they will cut investment and employment. And various other responses which while individually rational will collectively put a major dent on global growth and could increase short term inflationary pressures. 

 

If you yourself in the shoes of a businessman l you would think the world has gone nuts. There is no way to predict  anything due to the haphazard way of the administration doing things. So the best option is to hunker down and if this is what is collectively is occurring we are looking at a severe recession.

 

Take the recent U- turn roe semiconductor or electronics imports from China. While this fine for Dell and Apple for the time being, if you are an US business that actually assembles components and produces computers, you are absolutely getting screwed here . Why - because your components gets tariff taxed, while the finished goods from Dell or Apple get zero tariffs. No way you can stay in business like that.. This is just a  microcosm what it happening all over the place.

 

About 40% of the exports from China are components that got used for finished goods. These components  gets tariff taxed tariff taxes by 145% now. Some of those compete with competitors from other countries which may get lower tariffs. Even if not, exporting these out from the US now is pretty much impossible if the bill of material  contains significant amount of good from China.

 

I think it’s preset clear that the Trump administration went into this tariff & trade war without much thinking and preparation  and now just makes up more stuff partly to reduce the damage from prior decisions.

 

Seems like “Art of the deal” versus “Art of War”. I have read both and I have a strong opinion which one is better. I think it’s possible that Xi Jinping baited Trump into raising the tariffs so high with counter tariffs that the outcome is ridiculous and very damaging.

 

The next few month will be very interesting. Put your life jacket on, or get a parachute if flying and make sure you get through the bumpy ride with little damage or even benefit from the U-turns and foibles that I think going to unfold.

Perhaps we get a de- escalation and Xi Jinping and Trump become best buddies. I don’t think that’s too likely though because a decoupling that we have seen is very hard to reverse. Same with Europe in terms of security.

Edited April 13, 2025 by Spekulatius

[John Hjorth]

32 minutes ago, Spekulatius said:

If you yourself in the shoes of a businessman l you would think the world has gone nuts. There is no way to predict  anything due to the haphazard way of the administration doing things. So the best option is to hunker down and if this is what is collectively is occurring we are looking at a severe recession.

 

Take the recent uturn to semimonthly electronics imports from China. While this fine for Dell and Apple for the time being, if you are an US business that actually assembles components and produces computers, you are absolutely getting screwed here . Why - because your components gets tariff taxed, while the finished goods from Dell or Apple get zero tariffs. No way you can stay in business like that.. This is just. A microcosm what it happening all over the place.

 

About 40% of the exports from China are components that got used for finished goods. These components  gets tariff taxed tariff taxes by 145% now. Some of those compete with competitors from other countries which may get lower tariffs. Even if not, exporting these out from the US now is pretty much impossible if the bill of material  contains significant amount of good from China.

 

I think it’s preset clear that the Trump administration went into this tariff & trade war without much thinking and preparation  and now just makes up more stuff partly to reduce the damage from prior decisions.

 

Seems like “Art of the deal” versus “Art of War”. I have read both and I have a strong opinion which one is better. I think it’s possible that Xi Jinping baited Trump into raising the tariffs so high with counter tariffs that the outcome is ridiculous and very damaging.

 

The next few month will be very interesting. Put your life jacket on, or get a parachute if flying and make sure you get through the bumpy ride with little damage or even benefit from the U-turns and foibles that I think going to unfold.

Perhaps we get a de- escalation and Ci Jinping and Trump become best buddies. I don’t think that’s too likely though because a decoupling that we have seen is very hard to reverse. Same with Europe in terms of security.

 

 

Exellent post, @Spekulatius,

 

The damages to global order flow, supply chains, flows of cash and liquidity because of the decisions made on 2 April 2025 by POTUS, his cabinet and administration, and the following corrections, roll backs deferrals of those decisions ndl all that, are already done.

 

And by now nobody have a clue - or even just an overall picture - of these damages, but they are likely already huge, and likely still growing by the day - tick-tack -  counting.

[Viking]

4 minutes ago, Spekulatius said:

If you yourself in the shoes of a businessman l you would think the wold had gone nuts. There is no way to predict  anything due to the haphazard way of the administration doing things. So the best option is to hunker down and if this is what is collectively is occurring we are looking at a severe recession.

 

Take the recent uturn to semimonthly electronics imports from China. While this fine for Dell and Apple for the time being, if you are an US business that actually assembles components and produces computers, you are absolutely getting screwed here . Why - because your components gets tariff taxed, while the finished goods from Dell or Apple get zero tariffs. No way you can stay in business like that.. This is just. A microcosm what it happening all over the place.

 

About 40% of the exports from China are components that got used for finished goods. These components  gets tariff taxed tariff taxes by 145% now. Some of those compete with competitors from other countries which may get lower tariffs. Even if not, exporting these out from the US now is pretty much impossible if the bill of material  contains significant amount of good from China.

 

I think it’s preset clear that the Trump administration went into this tariff & trade war without much thinking and preparation  and now just makes up more stuff partly to reduce the damage from prior decisions.

 

Seems like “Art of the deal” versus “Art of War”. I have read both and I have a strong opinion which one is better. I think it’s possible that Xi Jinping baited Trump into raising the tariffs so high with counter tariffs that the outcome is ridiculous and very damaging.

 

The next few month will be very interesting. Put your life jacket on, or get a parachute if flying and make sure you get through the bumpy ride with little damage or even benefit from the U-turns and foibles that I think going to unfold.

Perhaps we get a de- escalation and Ci Jinping and Trump become best buddies. I don’t think that’s too likely though because a decoupling that we have seen is very hard to reverse. Same with Europe in terms of security.

+1 , I agree. With the announcements last week (reciprocal) and the one Saturday (electronics), it does not appear to me that Trump is actually changing anything. In both cases he is simply delaying the implementation. IMHO, the risks have not changed. As you said in an earlier post, rallies are a wonderful opportunity to tweak portfolios. 

[Blake Hampton]

See my question is can the United States even handle a severe recession?

[Malmqky]

5 minutes ago, Blake Hampton said:

See my question is can the United States even handle a severe recession?

 

Handled plenty in the past just fine.

 

1929, 2001, 2008, etc.

 

Maybe this time is different. But we've survived a civil war, two world wars, 9/11, the aforementioned recessions, etc. and have come through fine every time.

 

It pays to be an optimist, and as Buffet says, bet on America.

 

I'll continue to remain agile and invest around the macro environment. Even in recessions there's lots of money to be made.