Gregmal Posted January 28 Posted January 28 On 1/22/2026 at 1:14 PM, gfp said: And before someone flames me for including Truflation - just forget about it Don’t tell Powell…retard still sees inflation everywhere. Would be great if Trump put him in jail just for being obstinate in the face of sucking at his job….
gfp Posted February 10 Posted February 10 Interesting that US 10-year yields went the opposite direction than almost everyone in the market was expecting this morning... 4.2 was a major line in the sand and everyone was expecting a move to 4.4. Here we are at 4.145
Spooky Posted February 10 Posted February 10 56 minutes ago, gfp said: Interesting that US 10-year yields went the opposite direction than almost everyone in the market was expecting this morning... 4.2 was a major line in the sand and everyone was expecting a move to 4.4. Here we are at 4.145 So much for debasement and hyperinflation...
rogermunibond Posted February 10 Posted February 10 December retail sales were flat. Market just bouncing around. 2026 US gdp is expected to be 4-4.5% this year from fiscal stimulus, tax cuts, capex. I wouldn't get too excited.
Gregmal Posted February 10 Posted February 10 What’s absolutely stunning is how obvious this outcome was, yet how unbelievably arrogant and sure everyone was back in April/May/June about tariffs/inflation. Going back and rereading those threads must be pretty humbling for a lotta folks. As usual, Greg was right again.
Marco Van Basten Posted February 10 Posted February 10 What people forget is that quietly, US budget deficit is declining, and falling sharply as a % of GDP. In Fiscal 2024, ended 09/30/2024, budget deficit = $1.84 trillion or 6.4% of GDP, in fiscal 2025, $1.8 trillion or 5.9% of GDP, calendar 2025 saw $1.7 trillion budget deficit down from $2.0 trillion in calendar 2024. Calendar 2025 budget deficit = 5.5% of GDP. So if you get 4% real and 7% nominal GDP growth, you could see budget deficit falling to $1-1.2 trillion. Still unacceptably high, but between 3-4% of GDP down from 6.4% and may be that is being reflected in the market.
cubsfan Posted February 10 Posted February 10 24 minutes ago, rogermunibond said: December retail sales were flat. Market just bouncing around. 2026 US gdp is expected to be 4-4.5% this year from fiscal stimulus, tax cuts, capex. I wouldn't get too excited. I'm pretty excited about US fiscal policy, seems to be working like a charm. How can one not get excited about 4% GDP, maybe even 5%..
thepupil Posted February 10 Author Posted February 10 40 minutes ago, Gregmal said: What’s absolutely stunning is how obvious this outcome was, yet how unbelievably arrogant and sure everyone was back in April/May/June about tariffs/inflation. Going back and rereading those threads must be pretty humbling for a lotta folks. As usual, Greg was right again. tariffs are inflationary on the prices of goods that are tariffed. First 10 google results all cite an increase in cost of goods that's driven by tariffs. the price of tarriffed goods going up may be offset by other things (home prices/rents going down, for example) longer term, I worry that tariff-ing stuff and kicking out the people who build the houses may lead to housing inflation too...but that's still in the we'll see camp. https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/#:~:text=The Trump tariffs amount to,percent for 2026) since 1993. Quote Key Findings President Trump has imposed International Emergency Economic Powers Act (IEEPA) tariffs on US trading partners, including China, Canada, Mexico, and the EU. In addition, he has threatened and imposed Section 232 tariffs on autos, heavy trucks, steel, aluminum, lumber, furniture, semiconductors, pharmaceuticals, and copper, among others. The Trump tariffs amount to an average tax increase per US household of $1,000 in 2025 and $1,300 in 2026. Under the tariffs imposed and scheduled as of February 6, 2026, the weighted average applied tariff rate on all imports rises to 13.5 percent, and the average effective tariff rate, reflecting behavioral responses, rises to 9.9 percent—the highest average rate since 1946. The Trump tariffs are the largest US tax increase as a percent of GDP (0.54 percent for 2026) since 1993. Trump’s imposed tariffs will raise $2.0 trillion in revenue from 2026-2035 on a conventional basis and reduce US GDP by 0.5 percent, all before foreign retaliation. Accounting for negative economic effects, the revenue raised by the tariffs falls to $1.6 trillion over the next decade. We estimate that the tariffs raised $132 billion in net tax revenue in 2025. The Trump tariffs threaten to offset much of the economic benefits of the new tax cuts, while falling short of paying for them. The US Supreme Court will soon decide whether the president’s emergency powers under IEEPA include the power to impose tariffs. Historical evidence and recent studies show that tariffs are taxes that raise prices and reduce available quantities of goods and services for US businesses and consumers, resulting in lower income, reduced employment, and lower economic output.
Gregmal Posted February 10 Posted February 10 17 minutes ago, thepupil said: tariffs are inflationary on the prices of goods that are tariffed. First 10 google results all cite an increase in cost of goods that's driven by tariffs. Nah that sort of cursory first level nerd thinking is why so many people got it wrong. “Inflation” relates to price increases in the context of supply and demand instability. Remember all the lectures about the importance of “price stability”? A one off hike, regardless of how big, isn’t inflation. And it wasn’t even that big either. Remember the “OMG 100% tariffs on Nikes!!!!” groaning…when the real world effect was like a $7 hike on the components that totaled like $18 from Malaysia or whatever.
thepupil Posted February 10 Author Posted February 10 8 minutes ago, Gregmal said: Nah that sort of cursory first level nerd thinking is why so many people got it wrong. “Inflation” relates to price increases in the context of supply and demand instability. Remember all the lectures about the importance of “price stability”? A one off hike, regardless of how big, isn’t inflation. And it wasn’t even that big either. Remember the “OMG 100% tariffs on Nikes!!!!” groaning…when the real world effect was like a $7 hike on the components that totaled like $18 from Malaysia or whatever. Nike is a strange example considering the highly negative trajectory of its fundamentals. I'm not sure what to make of this. tariff enacted. producer profitability impacted..raise prices to try to offset... I guess I'm a nerd / first level thinker. seems to be somewhat straightforward to me...if one asked me based on the below, did tariffs hurt Nike, I'd say "yes". did tariffs hurt consumer, I'd say "yes", did tariffs raise prices, I'd say yes. now perhaps more expensive Nike's are a better way for the governement to get money than other ways. that's a policy debate that can be had, but I'm not quite sure I understand how that's not "inflation". here's a bloombergAI summary of Quote can you find examples of Nike executives discussing the impact on profitability/sales/etc of tariffs Quote Nike Executive Commentary on Tariff Impacts Gross Margin Impact Nike's gross margin declined 300 basis points to 40.6% in Q2 2026, primarily due to increased product costs from higher tariffs in North America and inventory obsolescence in Greater China. (1) Tariffs represented a gross headwind of approximately 320 basis points to gross margin in fiscal 2026, with Nike taking actions to reduce this to a net impact of approximately 120 basis points. (2) Nike's Q1 2026 earnings call indicated that newly issued tariffs represented a gross incremental cost of approximately $1.5 billion annually, up from a previous estimate of $1 billion. (3) Management guided for Q3 gross margins to decline 175 to 225 basis points, which includes a 315 basis point impact from higher product costs related to new tariffs. (4) Management cited a gross headwind of 315 basis points to product costs associated with tariffs, partially offset by tariff mitigation strategies and improved full-price selling in North America. (5) Tariff-related margin pressure is expected to persist into the first half of 2026, with approximately $1.5 billion in tariff pressure equating to about 320 basis points of gross margin pressure in fiscal year 2026. (6) Quarterly and Annual Guidance Nike anticipated a gross margin contraction of 350-425 basis points in fiscal 1Q26, with tariffs expected to have a 75 basis point net impact, prompting a targeted price increase in the US. (7) Management increased tariff guidance to a 120 basis point headwind to FY26 gross margin, up from a previous estimate of 75 basis points, assuming a gross incremental cost increase of approximately $1.5 billion. (8) Management has indicated no change to the tariff guidance, which is expected to impact FY26 by -120 basis points, with a gross impact of -315 basis points for Q3. (9) Mitigation Strategies Nike is being cautious with strategic pricing actions and carefully assessing price elasticity as a mitigation strategy for tariff impacts. (10) 1. Q2 2026 Earnings Call TRANSCRIPTS 12/18/25 2. Q2 2026 Earnings Call TRANSCRIPTS 12/18/25 3. Q1 2026 Earnings Call TRANSCRIPTS 09/30/25 4. Q2 2026 Earnings Call TRANSCRIPTS 12/18/25 5. [Delayed] NIKE, Inc.: 2Q Beat on Portfolio Progress; Mgmt Follow-Up Takes Matthew Boss | RESEARCH 12/24/25 6. [Delayed] Nike, Inc.: ICR Flash Note Adrienne Yih | RESEARCH 01/21/26 7. Strong Cash Flow Helps Offset Fiscal 2026 Headwinds Mike Campellone | RESEARCH 07/21/25 8. NKE: NKE Topline Inflects in F1Q26; Upside Case Requires Sustained Follow-Through; Reaffirm Hold Peter McGoldrick | RESEARCH 10/01/25 9. [Delayed] NKE: America's Great Again...China Not So Much; Numbers Coming Down, Upside Again Pushed Out Ike Boruchow | RESEARCH 12/26/25 10. [Delayed] Nike, Inc.: ICR Flash Note Adrienne Yih | RESEARCH 01/21/26 Copied from: AskB on 02/10/2026 13:18 here's NKE's gross margins declinging by 300 bps, EBITDA margins declinging by 300 bps and EPS getting cut in half here's Nike massively underperforming the market and peers
Gregmal Posted February 10 Posted February 10 (edited) 9 minutes ago, thepupil said: Nike is a strange example considering the highly negative trajectory of its fundamentals. Again, maybe on some shallow surface levely way where we re trying to backfill narrative. But Nike had major covid hangover issues and has been executing horribly for years prior to tariffs. The 5 year chart is what? $140 to $62? But sure leave it to a poorly managed group to latch onto the flavor of the day excuse for their continued shoddy execution. All their issues just magically appeared when tariffs became a thing lol. Edited February 10 by Gregmal
Gregmal Posted February 10 Posted February 10 But this is also why(with probably the exception of CROX who's had the same post covid execution issues Nike does, that they too are now conveniently blaming on tariffs) I just dont bother owning companies with loser management teams.
thepupil Posted February 10 Author Posted February 10 i don't disagree they've had their issues. honestly, I simply don't understand your point. do you think tariffs decrease prices? I have yet to see an example of that. we could focus on well run companies whos stocks are up. let's take GE Vernova. Its stock is a 6xover last couple years. Quote GE Vernova Executive Commentary on Tariff Impacts Cost Impact and Margin Pressure GE Vernova's 2025 guidance includes the impact of tariffs and resulting inflation, estimated to be between $300 million and $400 million, net of mitigating actions, representing approximately one point of negative EBITDA margin. (1) (2) (3) (4) The tariff impact is expected to trend towards the lower end of the $300-$400 million range, net of mitigation actions. (5) The impact is expected to be relatively similar in each of the last three quarters of 2025. (6) (7) (8) (9) Tariffs are anticipated to result in approximately a 1% decrease in gross margin in 2025. (10) Mitigation Strategies GE Vernova is navigating the dynamic environment by working to mitigate cost pressures through pricing actions, utilizing existing contractual provisions, and implementing disciplined supply chain management. (11) (12) The company is accelerating G&A cost reduction actions and exploring further mitigation steps, viewing this as an opportunity to create a stronger and more durable supply chain and workforce. (13) (14) Approximately two-thirds of the China cost exposure can be moved, with plans underway, and the remaining one-third is primarily related to offshore wind. (15) Segment-Specific Impacts Uncertainty around trade tariffs was weighing on demand for GE Vernova's wind segment orders. (16) The company faces more tariff impact on offshore wind due to less flexible supply chains, compared to gas and electrification where supply chains are more adaptable. 1. GEV US Equity: Earnings Call 2025/04/23 TRANSCRIPTS 04/23/25 2. Finl Press Release 10/22/2025 FILINGS 10/22/25 3. Earnings Call 08/02/2025 FILINGS 08/02/25 4. Annual General Meeting TRANSCRIPTS 05/14/25 5. GE Vernova Orders Robust, Margin May Follow: Earnings Outlook Mustafa Okur | RESEARCH 10/22/25 6. GEV US Equity: Earnings Call 2025/04/23 TRANSCRIPTS 04/23/25 7. Finl Press Release 10/22/2025 FILINGS 10/22/25 8. Earnings Call 08/02/2025 FILINGS 08/02/25 9. Annual General Meeting TRANSCRIPTS 05/14/25 10. [Delayed] GEV: Q1'25 Beat—2025 Guidance Maintained; Q2'25 Guidance In Line—Order Growth Below Consensus Michael Blum | RESEARCH 04/30/25 11. GEV US Equity: Earnings Call 2025/04/23 TRANSCRIPTS 04/23/25 12. Annual General Meeting TRANSCRIPTS 05/14/25 13. GEV US Equity: Earnings Call 2025/04/23 TRANSCRIPTS 04/23/25 14. Annual General Meeting TRANSCRIPTS 05/14/25 15. [Delayed] GE Vernova: Solid 1Q Results and Capital Return; FY25 Guide Maintained Including Tariff Impact; Reiterate Top Pick Mark Strouse | RESEARCH 04/28/25 16. GE Vernova Orders, Execution Key Short-Term Signals: 3Q Preview Mustafa Okur | RESEARCH 10/14/25 Copied from: AskB on 02/10/2026 13:36
Gregmal Posted February 10 Posted February 10 7 minutes ago, thepupil said: honestly, I simply don't understand your point. do you think tariffs decrease prices? I have yet to see an example of that. Tariffs need context but in general tariffs are not inflationary. No, not at all. If anything they create a setup for deflation. Inflation again, as Jerry has said every presser has to do with price stability. A one off increase is not unstable. For instability, see 2x4s during covid. $2 to $7 to $5, to $12 to $9...with empty shelves regardless. The whole ecosystem and cogs related to 2x4 market was in chaos. Thats instability. If today, a $3 2x4 is hiked to $5, there will be no supply issues. Demand will either meet it, and assuming that tariff remains, the price will just stay there, +/- "real" inflation adjustments going forward. If the consumer no longer needs/wants/can afford the $5 2x4, youre actually setting up a situation where deflation might occur. Which if anything, is basically whats eroding Nikes business. Not their Vietnamese and Malaysian inputs being taxes a few extra bucks...it's the fact that have way too much overpriced inventory nobody wants.
RichardGibbons Posted February 10 Posted February 10 This argument makes no sense to me. I think because it doesn't make sense.
thepupil Posted February 10 Author Posted February 10 (edited) I guess, I think of inflation as "does this thing cost more in nominal dollars today than it did yesterday/last years"...there's something getting lost in the semantics... perhaps I'll rephrase as "tarriffs appear to be causing one-off increases in prices / changes to how production is organized / and that on balance has caused households and corporations to pay more for stuff than they likely otherwise would have, for better or worse"...that way i won't use the inflation word which seems to be the cause of debate. I agree tariffs can be deflationary in the event of demand destruction (but that hasn't happened yet...in part because tarriff burden is much lower than the wild initial proposals) Edited February 10 by thepupil
Gregmal Posted February 10 Posted February 10 1 minute ago, thepupil said: I guess, I think of inflation as "does this thing cost more in nominal dollars today than it did yesterday/last years"...there's something getting lost in the semantics... I think Covid just boggled perceptions and in general how people approach things. There seems to have developed this newer and simpler idea after 2021s inflation bonanza that “increase = inflation” and that “fed job = 0-2% inflation”. But inflation is not just simply “today, how much more than yesterday?”. It’s really simple but like I said, COVID kinda scrambled brains and reinvented a lot of theories more academic and less real world in nature and folks get confused.
Gregmal Posted February 10 Posted February 10 1 minute ago, gfp said: A tax is not inflation Simple enough right? Or so we’d think. At least it was for us….like I joked in the other thread with @Mephistopheles, this is why we prosper.
TwoCitiesCapital Posted February 10 Posted February 10 (edited) Definitely a strange argument to me - tarriffs are absolutely inflationary to the extent they raise prices. It's not a persistent inflation - it's a one-off which is why bonds don't get shocked when it happens. But this IS a rise in prices or a reduction in margin or a lower quality of living pending which part of the supply/consumption chain gets stuck with bearing the cost. 1) S&P 500 inflation adjusted profits are still basically flat to 12/31/2021 and only re-achieved that level in Q2 2025. Even with all of the Mag7, AI-led 'growth', inflation adjusted earnings basically match 12/31/2021 in Q2 2025 and have stagnated there for Q3. We'll see what Q4 holds, but has basically been a 3-4 year long earnings contraction as a result of inflation and tarriffs. 2) the vast majority of that GDP/corporate growth has come from infrastructure spending for AI - which remains to be seen how impactful, effective, and economically viable that is as a business model. It could be much of that GDP growth that is booked today (like NVDA revenues) gets written off over the next 3-5 years as those chips get depreciated. Unless if they start generating an economic return, much of this GDP growth will prove ephemeral and will have simply pulled future growth back into 2025. 3) inflation in goods has been offset by decreases in volumes of products sold, substitution to cheaper goods OR domestic inventories being exhausted without replacement, reduction in margins by importers/retailers eating a portion of the price hike, and other falling prices (like imputed rent). But there is absolutely no debate that tarriffs have led to higher prices, lower profits, and a lower quality of living. A real world example - If printing in Weimar Republic raises the price of beef to unaffordable levels, and large portion of the population switches en masse to bread, rice, and chicken - then beef becomes a smaller portion of the consumer bucket, bread/rice/chicken a larger portion, and the CPI index reflects this new weighting and understates the inflation by ignoring beef. And while that reweighting DOES reflect changing consumer consumption basket and real world consumer behavior - it ignores the reasons causing it. This isn't consumers choosing a better/cheaper/new alternative - it's consumers being forced to buy cheaper quality goods because they can no longer afford the other stuff due to government policy of tarriffs/taxes/printing/etc. CPI index has many components, some offsetting the rise from consumer goods. But as soon as rents rise again, that inflation bleeds back through as rising rents (even though it occurred years earlier and were just masked by falling rents). And even before the numbers reflect it, a significant reduction in quality of living has occurred and is seen by everyone living in the country. Edited February 10 by TwoCitiesCapital
Spooky Posted February 10 Posted February 10 Guys, is there a real argument to buy bonds now? AI could be hugely deflationary or if there are mass layoffs tank the economy. With the S&P at a 30x P/E, maybe there is an alternative to stocks.
Gregmal Posted February 10 Posted February 10 (edited) 5 minutes ago, Spooky said: Guys, is there a real argument to buy bonds now? AI could be hugely deflationary or if there are mass layoffs tank the economy. With the S&P at a 30x P/E, maybe there is an alternative to stocks. This was the question I recall that started most/a lot of the debate. And unfortunately many are only bound to their forecasts, predictions, etc…by words. Much similar to how in retrospect, everyone and their mother was a raging bull in March, April, May 2020….if you go back to April-June of 2025, the overwhelming consensus was 1) do NOT even think of touching bonds of any duration. 2) Tariffs equal price increase which equals inflation which forces fed to raise rates per their mandate, 3) the whole scenario will create stagflation and we ll have a depression by fall, 4) cash isn’t trash. 5) do not touch the stock market All I’ll say is for the folks talking that game, if they actually had the nuts to put money behind those convictions….. oopsy daisy! Edited February 10 by Gregmal
Spooky Posted February 10 Posted February 10 1 minute ago, Gregmal said: This was the question I recall that started most a lot of the debate. And unfortunately many are only bound to their forecasts, predictions, etc…by words. Much similar to how in retrospect, everyone and their mother was a raging bull in March, April, May 2020….if you go back to April-June of 2025, the overwhelming consensus was 1) do NOT even think of touching bonds of any duration. 2) Tariffs equal price increase which equals inflation which forces fed to raise rates per their mandate, 3) the whole scenario will create stagflation and we ll have a depression by fall, 4) cash isn’t trash. All I’ll say is for the folks talking that game, if they actually had the nuts to put money behind those convictions….. oopsy daisy! I agree - the right call was to look through the tariffs as a one time thing. They did have some knock on effects which were somewhat harder to predict. I struggle with investing based on macro, especially since we haven't gone through a real deflationary period for a long time so the recent past would lead you to be in 100% stocks. Even if you break down inflation there is deflation in certain segments like household electronics / TVs etc. and the inflation is within other categories like education, healthcare etc... Just seems like there is a lot of uncertainty and volatility out there, maybe I should spend some more time looking at bonds...
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