Rolling US Economy Into The Shitbin Thread

lowest in the industry!

Trump has clearly learned the lesson that he can use trade war to get his rate cuts, so expect more of this!

— Chris Hayes (@chrislhayes) August 5, 2019

An opinion piece in Bloomberg today was entitled "Trump’s Economy Leaves Democrats Speechless: Sorry, candidates, silently hoping for a recession is not a viable campaign policy."

China confirms it is suspending agricultural product purchases in response to Trump's new tariffs

https://fm-static.cnbc.com/awsmedia/chart/2019/7/5/image%20(5).1565046032353.png

pfft who needs six billion dollars

https://www.washingtonpost.com/outlook/2019/08/06/this-trade-war-will-get-out-control/?noredirect=on

Searing

what’s this going to mean for all those dropshippers

Uh oh spaghetti oh!

OK, help me out here. Indicators have been, well, indicating all sorts of shit for years at this point. We've been long overdue a correction. Trump's policies have been economically disastrous, the market has been in flux, doom is just around the corner, inverted yield curve, tariffs, borrowing, and so on. And yet ... people have been saying this since he was elected and started fucking things up, almost on a weekly or bi-weekly basis - this time it's the end! - but each time the market keeps bouncing back from every bit of bad news or Trump bomb, often to all-time highs. So what's going on?

markets assume rational actors

But what does that mean? Trump has been a radically irrational actor for years, so why hasn't that driven the market down?

My take: Despite Trump doing everything in his power to fuck it up, the underlying economy is strong. There isn't a single obvious problem area like the real estate market back in 2008, just lots of smaller areas getting progressively weakened by stupid choices.

It will break eventually though, it can't bounce back indefinitely.

Thank goodness we have a president who knows how to bounce back after flushing all his money down the toilet.

xpost For sure, but you can say that (and others *have* been saying that) for months and years until it actually happens.

The unemployment rate is 3.7%. We’re fine.

And increase in average hourly earnings. And the recession when it occurs is at least a year away.

don't worry Trump figured this all out years ago

Our debt is about to reach $17T. Iraq has $20T in oil reserves. Interesting.

— Donald J. Trump (@realDonaldTrump) June 20, 2013

Oh, but don't you know? The low unemployment rate is actually a problem, because as the economy chugs along there are too few people left to hire! Businesses will wither and die on the vine!

(Let me be clear that I don't want the economy to tank, as much as it may or may not hurt President Asshat. But there is more than a little element of chicken little to some of these hyperbolic headlines and predictions. I was talking to my wife in the car the other day, listening to economists talking about the disastrous new Chinese tariffs. Sure, he soon enough took them off the table - as he did the equally disastrous Mexican tariffs - but I made the argument that the discussion should not be whether new tariffs or bad decisions could be bad for the economy but why so far all the other tariffs and countless other bad decisions *haven't* yet been demonstrably bad for the economy, relatively flat (record) stock market or no.)

Uber has stopped hiring software engineers, surely something is happening

The self driving cars have taken over?

The tariffs ARE bad for the economy, they just aren't destructive enough to bring the whole thing down.

But they really haven't brought any of it down yet, to any noticeable effect, right? If they are bad for the economy, which logically you'd think they would be, then the implication is if the tarrifs were reversed the economy would be doing even better. Which doesn't seem plausible.

Germany looks to be heading into recession and commentators are blaming trade issues. Seems the argument is that it’s a knock-on effect of China weakness.

If they hadn't happened in the first place I do think the market would be going better. The constant back and forth reversals on trade war moves has generated a lot of uncertainty and volatility that was completely unnecessary. They just haven't been enough to break things completely yet.

Trump has made a lot of foolish choices that have kept him from strengthening an already strong economy. But so far we haven't seen anything on the scale of the major cataclysms we had in the aughts: 9/11, multiple wars, the utter decimation of the mortgage industry.

xp

If you trade actively or semi-actively and are not buying big dips, you're crazy

tell me about these big dips.

xpost I guess that's what I'm getting at. If this is how well the economy is doing with all the volatility and uncertainties, what does "better" even look like?

Remember the "irrational exuberance" of the 90s?

Surely there are many ways things could be going better. The stock market could be moving in a straight line up. Employees could be getting real raises. Maybe we wouldn't be subsidizing all our farmers and taking on massive amounts of debt. IDK, just spitballing here...

Like, I think there's a pretty big difference between the economy hasn't tanked YET vs. there's no conceivable way things could possibly be any better.

^^^ it's all just whistling past the graveyard

"There isn't a single obvious problem area like the real estate market back in 2008"

I think this is probably right, but then again, it's a hindsight description. Until 2006 people didn't really sense the real estate market was a problem, and until 2007/08 people didn't realize just how many different ways and how badly the real estate market was poised to fuck the economy.

iirc Americans actually spent a good deal of the interim paying down debt and saving.

But that trend may have long ago reversed, for all I know.

i think there are a lot of new investors who have been conditioned now to think the general market will keep going up/immediately bouncing back and won't know how to weather any real downturn. But then again they are willing to do whatever it takes so that corporations can hoard their money.

i think there are a lot of new investors who have been conditioned now to think the general market will keep going up/immediately bouncing back and won't know how to weather any real downturn.

i think this is true, and also it's interesting how if we zoom out a bit and look at the stock market over the last 50 years, almost everyone is conditioned to believe that the stock market can and will continue to grow indefinitely for the rest of our lives, even as global resource consumption exceeds the earth's resource capacity by around 4x per year and there's no way in hell that can continue

and even as i think there is a strong likelihood that the whole thing will go to blazing hell in my life time, my entire retirement/live savings (down 2.16% today, fuck yeah!) is tied up in the system. it's cognitive dissonance on a global scale

"the trend is your friend" the old adage goes, and we've never seen such a strong, enduring trend. betting on a real marketwide bearish reversal is surely a fool's errand rn

they are willing to do whatever it takes so that corporations can hoard their money.

if you take the viewpoint that the entire economy is basically a scam to funnel money into the offshore tax havens of the 1%, all of this makes sense. they're still sucking up wealth so they need the appearance of functionality.

oh yeah, you have to put money somewhere. But I had to work with the l3hman people for 2 years thougt, that distrust of everything doesn't go away.

xp to myself should probably add "while buying off the remnants of the middle and upper classes" after that comma

that was an xpost to karl.

betting on a real marketwide bearish reversal is surely a fool's errand rn

When you start hearing people on the bus saying this, it's time to sell, sell, sell.

yeah, i was about to say something similar - i hate it, but also i have nowhere else to put my money, so...emoticon shrug guy.

xp to yerac

imo it's perfectly reasonable to invest (passively) in the financial markets b/c there's basically two possibilities for how things go, which is that either the markets continue on average to generate returns either through dividends or speculative growth, in which case you win, or the world financial system conclusively implodes due to global upheaval, which, prepper fantasies aside, is impossible to plan for.

Like I guess the in between scenario would be something like a global turn away from speculation and the concept of "shareholder value", which would probably have your invested principal taking a hit but potentially seeing some cash returned to you by such entities as are hoarding it.

doom is not hard to plan for, you just have to take all of your retirement savings out of the market and reserve a condo room in the doomsday hotel, 13 floors deep in South Dakota

if you call that living!