I actually moved a bunch of money around after the recovery from April 2nd. I just sat their thinking... wow, short term bonds have a really decent interest rate, and I don't think people are taking seriously the fact that the markets can actually fall apart because business is an incredibly complex, multi-variate process, and right now where just throwing wrenches into the gears for funsies.
I'm not even completely anti-tariff. I just think the way we're going about doing these tariffs is pretty much the opposite way anyone who was trying to bring manufacturing back to the US would do them. Low, clear ratcheting up tariffs are tariffs that allow businesses time to change their strategy without disrupting their income streams. Instead, we're going to bankrupt basically anyone who isn't already a multi-national.
Maybe I'm an idiot and I'm missing something clear, but to me, the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years. Other countries' markets have not fared so "efficiently."
Again, maybe I'm missing something, but I'm looking at this much more defensively than I did under the first administration. The one thing I can't figure out is the dollar. My brother is obsessed with the "dollar milkshake" theory, whereas it seems clear that we are messing with reserve status and are trying to intentionally weaken the dollar... I just don't know. It doesn't really make much sense what we're doing, and I haven't found anyone who can make an argument that makes sense to me.
The vibe on /r/wallstreetbets seems to be "this all makes sense as a massive pump and dump". Very useful source of info if you view them as essentially black boxing the stock market.
I mean, WSB isn’t a serious place, but they have their moments. I just have no idea who would or even could “pump” the entire S&P 500. My best theory of the last month is just basic “sell in May and go away” theory where you get rosier fundamentals in spring because everyone buries the bad news in Q1 reports, but it’s more difficult to hide as the fiscal year actually happens.
> I just have no idea who would or even could “pump” the entire S&P 500.
The White House, evidently. After the 90-day pause was "leaked" on Twitter[1], the market gained trillions in value, which it promptly lost when the White House disavowed it, before gaining back after the president posted that "It [was] a good time to buy DJT" (paraphrasing), and then formally announcing the 90-day tariff pause a few hours later.
1. The jury is still out whether that was an actual leak, or a guess that later became policy.
The signal to noise ratio is difficult but now and then a factoid pops up - like the amount of retail investors piling in recently. It aligns with messaging in other forms of media that they, well, only use as indicators and frequently don’t take seriously. I’m using it often as a useful tool for counter-balancing my long term plans with the impatient gambling mentality which feeds the machine there. I learned my lesson ages ago from ZeroHedge about being overly bearish and things didn’t play out, so WSB is helpful in my situation because in principle I agree with the market is distorted assertion but believe the collapse will manifest months from now and this is a sucker’s market. Q2 earnings calls are going to be telling.
Indeed, the suffix '-oid,' when appended to nominal stems, frequently functions as a significant etymological marker, often denoting mere semblance, superficial imitation, or, with particular pertinence to the present deliberation, an inherent spuriousness or ersatz quality. Accordingly, the primordial definition of 'factoid'—a term whose coinage is frequently attributed to Norman Mailer—designates an item of information presented as if it were an established fact but which is, in reality, unverified or demonstrably fallacious, yet achieves widespread acceptance as truth through its persistent promulgation, especially within journalistic or mass media contexts. The subsequent, more contemporary construal of 'factoid' as merely signifying a 'trivial' or 'minor piece of information' represents a notable semantic deviation, a misconception whose widespread dissemination has been paradoxically facilitated by the very media channels implicated in the term's original, pejorative sense. Ergo, in a compelling instance of recursive irony, this now prevalent, albeit technically inaccurate, understanding of 'factoid' (as a diminutive datum) has itself metamorphosed into a quintessential exemplar of a 'factoid' according to its original definition: an unsubstantiated assertion that has gained popular currency through sustained, uncritical repetition.
> the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years
Yes and, to your point, with an independent federal reserve. If that gets messed with, things could get much worse for the U.S..
Same as you I'm in defense mode. I exited the market in early February since something was not right. All I have (not much) sits in money market fund now at 5%.
As a Latin American, I can't help but buy the American Exceptionalism thesis, and seeing you guys in this situation humanizes you so much. The US has such a strong bureaucracy and high bar for competence that you generally lack the immune system required for detecting con artists and social climbers - at least in politics. Ask a random Argentinian or Brazilian what politicians Trump reminds them of, and you'll get a seemingly endless lists of genuinely stupid, borderline sociopath populists. Follow up with a question on what are the consequences of having arbitrary, ever-changing tariffs on most goods for the purpose of industrialization, and you'll get a laugh, then a sad face.
Import-substitution is bad for econ 101 reasons that most people who have an axe to grind against Dems would've been absolutely capable of grasping only a few years ago. Now, it seems so many are willing to turn off a part of their brains for this short-sighted wishful thinking. "Well, the official narrative is that we're doing this to get manufacturing back, so let's wait and see" is something most people would immediately perceive as bs if a Dem was sitting in the Oval Office. Seeing a politician campaign on a stupid platform, and then getting surprised he actually shoots himself in the foot spending political capital pursuing is also very Latin American.
The good part is that the soon-to-be-coming recession the federal government just fabricated out of thin air is fully self-inflicted, and therefore somewhat easy to fix. The bad part is you have (at least) 4 more years of this lunacy, so it might take a while.
As someone who grew up in Eastern Europe, I had a completely identical reaction. We had so many similar populists and idiots in power, one cannot help but recognize the obvious pattern.
Many people in America seem to be convinced that their involvement in the democracy ended after voting in the elections, and cannot conceptualize how to deal with an adversarial government. The scale of the protests and pushback Trump administration has received is laughably small compared to the scale of America as a country. People are lacking a basic political immune system, or even a sense of self preservation.
And the most puzzling part is that the entire situation is 100% self-inflicted. It usually takes a major war or a sustained external campaign to inflict the kind of damage Trump administration has done to the country in such a short period of time.
There has been a sustained campaign of propaganda, stoking division and culture wars. There has also been a sustained class warfare and concentration of wealth at the very top as most people can't seem to get ahead. Both political parties sold out their constituents a long time ago and the supreme court has been stacked with several criminally corrupt and treacherous villains.
I'm definitely no economist but the current administration doesn't seem to listen to them anyway. To me, this is going to be an extremely high tax on lower and middle income people, as well as small businesses. Most of us buy Chinese products all the time or, at least, ones that have Chinese in the supply chain somewhere. I know there has been a trade imbalance and maybe tariffs is a tool that could have been used, but I learned in high school(maybe in collage too) that it's most effective when you present a united front with other allies. Unfortunately, we really don't have allies like we used to. The current admin has destroyed, or at least highly eroded trust and partnerships we had in the past. By attacking almost every country, we stand truly alone. There was an article about Vietnam recently which explained that because we have/are fighting with them too, they have great leverage to get what they want by leveraging the U.S. against China. To me, we've just given away all our leverage by not being trustworthy and attacking all other countries at once (figuratively, for now at least). I'm simply not hopeful for our future from a majority of citizens point of view. For our GDP per capita, we do absolutely horrible, in what seems like most international indexes, comparatively. The areas we do "well" are not good ones. Like number of our citizens incarcerated. I think we beat China, Russia, and most every country in that. From the perspective of "life, liberty, and the pursuit of happiness", I think we've failed. I don't know, exactly, but from what I've read our Cost/Benefit ratio on healthcare is one of the most dismal in the world. We don't rate well, in almost any category that is a positive for our populous, especially considering our GDP per capita.
I think the burden of proof is entirely on the admin in the White House who seem completely incapable of keeping their story straight and providing anything of value to sooth anyones fears other than "trust me, bro!"
> I haven't found anyone who can make an argument that makes sense to me.
The goal is to eliminate income taxes and replace it with tariffs. An added bonus (for the administration), is that tariffs can be changed if the party in question pays for access to make their case.
The stated reasoning of supporting domestic industry is a smoke screen for the above.
Right, except that’s self-defeating and won’t work. The idea that we can plausibly generate enough revenue from tariffs to replace the income tax is inherently self-defeating, because if the tariffs work at bringing back manufacturing, we’ll stop imports. If they don’t, we’ll consume significantly less, more people will become poorer, and expenditures will increase as revenues decrease.
Maybe there is an equilibrium in there, but I don’t see it.
Baked in this plan is the idea that the revenue from tariffs will be much smaller than income tax revenues, and therefore that the federal government will also get smaller.
Right, but that implies that spending is controlled by revenues… when it’s clearly not. That just means higher deficits, threatening a default of US Bonds, which is a worst case scenario for American prosperity.
I'm confident the people pursuing this mad agenda don't know the first thing about US budget laws and think they can just cut spending DOGE-style forever.
Considering that the driver of all this is surrounded by yes-men and has spent his entire entitled life getting his way, I think their goal is to will it into being. And when it fails, blame the other party.
I don't think the metric of success is how much mfg comes back to America, it's just a simple slogan that plays well. The real movement is the mfg flocking out of China and into our allies countries.
Is this actually happening? I figured the result would be China simply swooping in and picking up all the trade partners we've alienated. And also all the soft power we've abandoned.
> The real movement is the mfg flocking out of China and into our allies countries.
If Trump cared so much about America's allies, why has he also imposed tariffs on Canada and repeatedly threatened to annex it? Why has he repeatedly talked about annexing Greenland?
China has been moving the manufacturing to their allies for years, as their labour force climbs the value chain.
Here in Aotearoa I am looking forward to continued booming trade with China and it's allies, hoping our government (we have a particularly bad one too currently) do not try to suck up to Mr Trump.
But the insanity in USA is bad for everyone. Hopefully we will get used to it soon and adjust to living without USA trade, and dollars
I'm not even completely anti-tariff. I just think the way we're going about doing these tariffs is pretty much the opposite way anyone who was trying to bring manufacturing back to the US would do them. Low, clear ratcheting up tariffs are tariffs that allow businesses time to change their strategy without disrupting their income streams. Instead, we're going to bankrupt basically anyone who isn't already a multi-national.
Maybe I'm an idiot and I'm missing something clear, but to me, the reason why the S&P500 and passive investing have been so successful since basically the 1940's is simply that we have had competent, technocratic administrations for the last hundred years. Other countries' markets have not fared so "efficiently."
Again, maybe I'm missing something, but I'm looking at this much more defensively than I did under the first administration. The one thing I can't figure out is the dollar. My brother is obsessed with the "dollar milkshake" theory, whereas it seems clear that we are messing with reserve status and are trying to intentionally weaken the dollar... I just don't know. It doesn't really make much sense what we're doing, and I haven't found anyone who can make an argument that makes sense to me.