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The 90 day pause on tariffs is doing all the heavy lifting right now. We're going back into crisis mode in a few months.
Meanwhile, the stock market isn't the only indicator of economic health. Mass layoffs are still happening, prices aren't falling, inflation is still at risk to blow up again, consumer spending is down, and all the major banks are predicting a recession with better than coin flip odds.
We're absolutely not out of the woods yet.
I think Trump will dump and pump repeatedly until he's stopped. Him and his billionaire bum chums will be absolutely raking it in.
Precisely. Vance will use Trump's erratic behavior as a reason to have him impeached by the mid-terms, and then Vance will fulfill his goal of becoming President.
We're hardly even three months in... We've got a loooong way to go before even the midterms.
What climb? Its still down 8.61% since he took office. Crazy to celebrate losing almost 9%.
By contrast Biden's second to last year was UP 24.23%. His last year was up yet another 23.31%.
To put dollars on this:
I see no cause for celebration here.
And the bond market is in freefall... That's not good, worse than the sp500.
I agree, yet so many are thinking thibgs are okay now, wild
I’m more concerned with the bond sell-off, that’s a very bad sign.
Can you explain a little further? I don't know what you are talking about
The original reply was great, I just want to make it dead simple: if bonds continue to be sold off in these numbers, it indicates investors no longer believe in a future where the US dollar is the international reserve currency. This is very bad if you’re an American.
If you have 20 minutes to spare this video really helped clear it up for me.
It might seem unrelated at first, but bonds will be discussed approx. 5 minutes in, and the preceding parts helps lay the groundwork.
I'd later come to understand this is called Modern monetary theory.
My knowledge is very superficial, but usually government bonds are a very safe investment. It's basically how countries can even go into debt. In times of market uncertainty, you would expect that investors who sell off stocks put their money into bonds. However, investors are also selling US bonds, which means confidence in the US is waining. The US dollar is on track to losing it's place as the world's reserve currency.
This is all very bad for the US, since it also means they have to increase interests in bonds so people keep buying, which leads to more taxes since the interests on the bonds is the interest the US has to pay on their debt.
Please correct me if I am wrong
What Trump is doing now will almost certainly outlast his presidency. One man, just one, has completely betrayed all of the trading relationships this country built over the course of a century, and even better, he did it unconstitutionally and Congress went along with it for their own enrichment, both Democrat and Republican.
Supply lines will be recalibrated. Our foreign partners will make new relationships with more dependable trading partners. (ie, China.) Over the course of the next decade or two, the utter stupidity of what Trump has done will play out to full effect. A few hundred Americans who shoved their heads up Trump's ass will get richer, but long-term, this is going to hurt most Americans.
If you're not diversifying your investments geographically you're no longer diversified at all.
Most shitty things in our life can be traced to Reagan. Trump is going to outdo that legacy by so much.
We'd need an actual left wing president to actually undo the damage, and there's no way the corporate democratic party is going to allow that
You're right.
We needed a Bernie, and Democrats happily subverted their own primary process to prevent it. Now, all you can do is take whatever measures possible you can to ensure your own survival.
I hope people realize that trump was able to do all this because of years of bad law writing and eroding of the balance of powers. All that concentrated power is great until someone you disagree with sits in the throne you built. It would be nice if after trump, we learn our lesson and vastly shrink the power of the office. Unfortunately , I believe it is likely people won’t realize this and will put even more effort into strengthening the power of that throne after trump is gone, in an effort to more quickly undo his work, which of course means someone will be able to redo the damage even faster at a later time.
Biden had the chance to do it and outright refused to place more restrictions on the executive.
I'm not a both-sides'er, but one thing that both parties will absolutely never do is limit their own power, even if it means limiting their opponents simultaneously.
The President and his cabinet are, as we speak, violating the constitution. The Senate is complicit. The House of Representatives is complicit. The Supreme Court is complicit. We are past the point where voting for either Democrat or Republican can meaningfully change anything. We can't vote to stop the assfucking that we're getting, we just get to vote for who gets to be on top while it happens. This downward spiral will continue until a revolution occurs or by some miracle a majority of Americans wake up and start voting for new political parties in numbers that could threaten to topple both establishment parties away and implement sweeping government reforms with a strong mandate. Obviously, the way things are going, revolution is far more likely.
Some of the greatest daily gains in the stock market are during overall crashes.
Increased volatility is generally a bad sign for an economy's health.
The tariffs alone would be enough to cause a recession. It's not just that they're large (even 10% is large by modern standards) it's mostly that they're so chaotic. I've read that most businesses are avoiding hiring, avoiding any expenditures they can, and just waiting to see what happens. Seeing what happens means keeping cash on hand, which means a drop in GDP. The numbers might have been juiced a bit by people making big orders and trying to get them done before the tariffs come into full effect, but once that's done the pain is going to be much more visible.
In addition to the tariffs, there's the firing of federal workers. There are about 3 million in the US, and even if only a fraction have been fired so far, I would bet the rest are cutting back on unnecessary expenses and building up a cash reserve in case they get canned. This will ripple through the economy too.
And then there's the ICE stuff. People with green cards getting deported for exercising their first amendment rights, scientists being refused entry for a post they made on social media in their home countries, Canadian, German and British people being thrown in an ICE detention facility because of a minor paperwork mix-up. This is going to make tourists and business visitors much less willing to take a chance and visit the US, but this won't hit until later. Big tourist season is the summer, and so the lack of business won't show up yet. And some conferences were too close to cancel, but conferences for later in the year might be moved or cancelled.
And there's the invasion threats against Canada and Greenland, and the tariff wars against Canada and Mexico, and the refusal to help Ukraine defend itself against Russia. The biggest visitors to the US were Canadians, Mexicans and Europeans, and all of them are going to be avoiding the country now. And, not just avoiding the country. People are trying to avoid buying US goods and services.
In addition, there are treasuries. Many are held by Japan and China. Even just acting purely rationally, they see the chaos in the US and know the US might not be able to pay its bills, or it might choose not to pay them. The risk has gone up. If they aren't being purely rational and self-interested, they also know that they can hurt the US by dumping treasuries, so they're doing that.
And then there are the scientists leaving the US, or choosing not to come. And there are potential international students who see how risky it is for anybody who isn't white, male and christian. This sort of thing might take decades, but it's going to hurt the US the most. So many of the world's most talented people have come to the US and started businesses, but that is definitely going to slow down now.
Even if Trump were impeached and removed, and all his changes were undone with apologies, there has been some permanent damage done to the US by the MAGA majority. But, since it is a majority, since the MAGAs control the supreme court, the senate, the house and the presidency, there's going to be a lot more damage done before there's even a hint of a stabilization, let alone a recovery.
I think any rational investor is going to get their money out of the US, and the slight recovery the S&P 500 has seen in the last week is going to be dwarfed by the crash over the next few years.
I agree with most of this. However I think there are additional elements that make prediction challenging.
First, if the US undergoes any kind of revolution in the next five years, the cultural effects you mentioned could by overwritten by more recent events. I realize this sounds improbable, but the transition from the New Deal era to global neolibralism was a revolution. "The Reagan Revolution" was an actual economic and social revolution. And we're overdue for another.
Second, both the markets and the real economy were in an unsustainable condition before Trump. The pursuit of endless growth, the disruption of climate breakdown, the end of the US' monopolar hegemony, and the return of extreme wealth inequality in the US made the status quo impossible to simply maintain. Big changes were coming even without Trump.
I maintain some optimism. I think anti trust regulation, climate-based financial regulation, and an embrace of market socialism could render the last three months to be the last gasps of the old order instead of another point in what has been a decline decades in the making. But it depends what happens next.
Almost certain that Trumspki will do something stupid soon and then more stupid shit after that. The S&P will be look like a wild roller coaster.
S&P 500 is still up 5% over the last 12 months. Up 95% over the last 5 years. Any action on a shorter timeline than that is emotionally driven and should be largely ignored. Unless you're day trading of course. You're not, right?
That said, ya. We're probably heading into a rough time.
We're looking at negative GDP growth according to folks smarter than I am. 2 quarters of that and it's probably a recession.
Additionally it looks like foreign investors are leaving the US Treasury market kicking up yields and foreign governments are getting uneasy about purchasing US made weapons or relying on US security guarantees which, again, reduces GDP both directly and indirectly.
2028 can't come fast enough.
Using the stock market growth of the last 2 decades of global, neoliberal economic politics to council people to "think long term" about their investments at the start of isolationist, fascist economics policy is maybe not the best idea.
"Look at the past" only works when the past is still relevant. They are ripping up every norm and institution that made those past gains possible.
Optimistic of you to assume any of this will end in 2028. Trump and his fascist goons are already priming the electorate to accept a 3rd term. He's not going away until he's dead.
If we wait til 2028 we've all failed. He has already stated he's finding a way for a 3rd term and is currently shredding the constitution. If we do not oust the man and his entire heritage foundation crony cuck ball lickers there won't be any voting for you to do in 2027. Their goal is to take complete control and remain in power forever. It's clearly stated in project 2025.
Climbing? Wait the market opening react to the new semiconductor tariff bomb released 10 hours ago
Or walking back the laptop/phone exclusions, or China halting rare earth shipments, or...
I completely agree with you. The real shit show hasn't even started. The waves from the tsunami will take a while to hit.
Wait for some stupidity to reverse it again. Markets like predictability. This president is anything but.
Nahman. It’s the shaft
Yah, I'll trust him like running into a dog that nipped my hand before.
The problem is not Trump. America would be in the same predicament no matter who was leading or what party or what ideology they had. Obama hit the nail on the head when he talked about the dangers of financializing America - making money on money instead of making product. A substantia portion of the American GDP has nothing to do with generating tangible wealth, it is a result of inflating paper wealth - the value pf stocks, the price of gold, the value of real estate, the interest payments from other people on borrowed money, interest on your savings account that is only as valuable as the bank that holds the account. None of this wealth can actually buy anything tangible, except more paper wealth. Eventually, the country begins to look like Musk - on paper, enormously wealthy, but in terms of liquid money, unable to buy very much. Musk has to use his paper asset wealth to BORROW real money on, if he wants to do anything big.
Generally, Trump is not alone. All of America is just running around stupidly cuckoo crazy because they realize there is not a single thing they can do to actually stop the decline. They are in pure panic mode, grasping at anything that comes along, and panic is always chaotically unpredictable except for the nature of the outcome.. All they can do is to position themselves individually so that when the country goes 'splat' they have a chance of surviving.
For Canada to avoid the splat, we need to put as much distance between us and the 'splat' as we can, instead of being at ground zero of the impact.
So it's like you're saying that the gold rush AI craze, crypto, meme stocks, property bubble inflation, money printing, uber and airbnb, side hustles and crowd funded health care aren't as good as a real growing economy?
Like and subscribe.
Absolutely, You have the concept down pat. They are like a 'condom' economy - they give you a sense of comfort, security, and safety while you are being screwed. Except for the 'crowd funded health care' - that is an American hangup.
You are correct about the lack lf practical value in the american capitalism, but that is the much bigger picture and while what is going on right now is only possible because of this system, it is happening now and in this way because of trump.
It's like saying that if I shot someone in the head it wasn't because of me that they died, but because of the nature of life which must conclude in death. Like, yeah, they died because everyone dies, but they died now and in this way because of me.
It's not the tip of the shitberg, it's the edge of the shittacane, Randy.
Wake up, people.
Taiwan makes 50% of the world's semiconductor 'chips'. They just announced a US$100 billion investment to build a fab plant in the US, to manufacture chips in the US. A few things about that.
No American company has anywhere close to $100 billion to invest in anything, The American corporations used their profits to buy back their stock not to invest n production. What cash they had left over, they invested in stocks and bonds, which they have to try and sell before they can use the money. American corporations are. essentially, cash liquidity poor despite their huge profits. They do not have the liquidity to build anything. Musk may be the world's richest man on paper, but a few Chinese financiers have much greater liquidity wealth than he does, and they are actually able to BUILD things. It is the difference between financialized wealth and actual money.
South Asia has enough investment money to build more kilometers (miles, if you are American) of high speed rail every year for the last several years than the US has TOTAL, and this money is just a drop in the bucket to them. There just is not enough liquidity in American corporations to build anywhere close to what China can do. American corporations squandered their wealth in the pursuit of maximizing profit payouts to shareholders, and the shareholders just used this capital to buy the same shares at higher and higher prices Not a penny of that money went into building new plant, it just went to increasing the price of existing shares.
Essentially, America is becoming a branch plant operation of Chinese corporations with profits going back to South Asian investors, and Americans get stupidly low wages. America is rapidly becoming the low-wage country of the world. The lower the stock market goes, the cheaper it is for South Asian money to buy up control of American corporations. When GM went bankrupt, China bought the restructured shares. When Ford almost went bankrupt, China bought the non-American Ford subsidiaries to save Ford, but essentially gained complete control of Ford. All profits from Ford auto sales go back to China. Haier now owns General Electric Appliance Division, and is now making what are essentially Haier appliances in America, using cheap slave-labor-wage Americans to build them cheaper than they can in China. All the profits, however, go back to China.
The Law of Unintended Consequences. The Trump misguided policies are just accelerating the sell-off of America. Trump wants foreign corporations to build their product in America, using cheap American labor, ignoring completely that the profits all flow out of America and the foreign investors now control American production.
Like Trump said, it is a good time to get rich. Like Trump dd NOT say, it is the South Asians that are getting rich. China owns most of the American treasury bills, now China will soon own most of the American production plant.
I have a very hard time believing that the rest of the world will trust the US for a very long time, if ever, so I can't imagine our financial situation is going to improve for anyone except maybe the ultra wealthy (as usual). I haven't even looked at my retirement because it's not like there's much I can do besides stress about it.
