Economy Update April 6th (Futures down 4% - Nasdaq projected to open down 25% from February highs)

mkess101 said:
IMO the difference is that the downturn on that was more globally organic. Meaning there was less tendency to "blame" a specific nation etc.

With this...every finger is pointed directly at the US. Basically the rest of the world is saying "Everything was okay...and YOU fucked it up."
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We will are the only place in the world with a real market. It will bounce way sooner.
 
Seano said:
eh, thats false. We still have some industry in the states, just not anything near what we did at our peak and people make decent wages.
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Sure, but it's more specialized manufacture, high end capital goods mostly.

When it comes to large scale production of consumer goods, it's much more effective to produce them through automatization or low-skill cheaper labor. This is the production that will not come back to the US, or to any other wealthy country for that matter.

The ship of having a large industrial-based middle class has sailed many years ago.
 
mkess101 said:
Dude believe me, I'm rooting for your scenario a million percent.
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This isn’t the same as an organically grown meltdown. It’s not institutional issues. It’s tariffs that will likely go away in a month. Then M2 will grow. Rates go down. Liquidity goes up. The fear is unsubstantiated IMO.
 
Rob Battisti said:
This isn’t the same as an organically grown meltdown. It’s not institutional issues. It’s tariffs that will likely go away in a month. Then M2 will grow. Rates go down. Liquidity goes up. The fear is unsubstantiated IMO.
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Food for thought... The Donald has bankrupted 6 times. I wouldn't put to much faith in somebody with that kind of track record in turning things around

. <scurred>
 
Rob Battisti said:
This isn’t the same as an organically grown meltdown. It’s not institutional issues. It’s tariffs that will likely go away in a month. Then M2 will grow. Rates go down. Liquidity goes up. The fear is unsubstantiated IMO.
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I tend to agree these tariffs aren't exactly here to stay, but Trump can't really afford to rescind them all.

There's going to be some pointless remaining pain, surely?
 
Rob Battisti said:
This isn’t the same as an organically grown meltdown. It’s not institutional issues. It’s tariffs that will likely go away in a month. Then M2 will grow. Rates go down. Liquidity goes up. The fear is unsubstantiated IMO.
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If these tarriffs are rescinded yeah I can see it. Trust has still been hurt, but can be repaired. If this isn't some ploy to force negotiations and they stick with it...?
 
mkess101 said:
If these tarriffs are rescinded yeah I can see it. Trust has still been hurt, but can be repaired. If this isn't some ploy to force negotiations and they stick with it...?
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It’s all negotiation tactics and he is a wimp so they aren’t staying.
 
Rob Battisti said:
This isn’t the same as an organically grown meltdown. It’s not institutional issues. It’s tariffs that will likely go away in a month. Then M2 will grow. Rates go down. Liquidity goes up. The fear is unsubstantiated IMO.
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The US economy was already dogshit and in a massive bubble before the tariffs went in, you are in for a world of pain regardless of whether the tariffs stay or go away. You have massive structural issues in your economy which have not been addressed in any way, there will not be sustainable grown until you've gotten your deficit under control and chopped down healthcare and finance to ~5% each of GDP instead of ~20% each where they are now. Until you chop those parasitic sectors down to size you won't get any lasting investment or growth in the economy, all you'll have is speculative bubbles masquerading as growth.

Tariffs are not the problem. Tariffs are merely the trigger that caused enough people to remove their blindfolds and go "shit, we've got a problem".

BTW. TOPIX and Nikkei just tripped the breakers and went lock limit down. Gonna be a fun day tomorrow, got lots of dry powder ready.
 
aerius said:
The US economy was already dogshit and in a massive bubble before the tariffs went in, you are in for a world of pain regardless of whether the tariffs stay or go away. You have massive structural issues in your economy which have not been addressed in any way, there will not be sustainable grown until you've gotten your deficit under control and chopped down healthcare and finance to ~5% each of GDP instead of ~20% each where they are now. Until you chop those parasitic sectors down to size you won't get any lasting investment or growth in the economy, all you'll have is speculative bubbles masquerading as growth.

Tariffs are not the problem. Tariffs are merely the trigger that caused enough people to remove their blindfolds and go "shit, we've got a problem".

BTW. TOPIX and Nikkei just tripped the breakers and went lock limit down. Gonna be a fun day tomorrow, got lots of dry powder ready.
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Lots of volatility. Calls on VIX @HOLA
 
Rob Battisti said:
Expand on this

And this
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Mortgage, consumer, CRE, corporate, and pretty much all other debt levels are at record highs. All major banks are more highly leveraged than they were in 2008. CRE is already seeing elevated delinquency & defaults and it'll likely bleed over to residential RE in the near to mid term. We've also reached the end of a 40 year secular decline in interest rates, the Fed is out of ways to ZIRP the rates again unless it wants to go with the full zombie Japan model where it buys every asset on the market and becomes the first, last, and only buyer. If it tries that the USD just might lose its reserve status and then you're really fucked.

Then you have healthcare & banking making up ~40% of your economy. Both sectors are parasitic in that they impose large costs on all other sectors of the economy which takes away from their competitiveness. Both are required to have a modern economy, but every dollar which a bank or hospital takes in as revenue is a dollar which comes out of the actual wealth producing sectors of the economy.

If you want a far more in depth yet easy to understand explanation of things, I'll refer you to the following book. Mr. Denninger wrote a book on it so that I don't have to.
 
aerius said:
Mortgage, consumer, CRE, corporate, and pretty much all other debt levels are at record highs. All major banks are more highly leveraged than they were in 2008. CRE is already seeing elevated delinquency & defaults and it'll likely bleed over to residential RE in the near to mid term. We've also reached the end of a 40 year secular decline in interest rates, the Fed is out of ways to ZIRP the rates again unless it wants to go with the full zombie Japan model where it buys every asset on the market and becomes the first, last, and only buyer. If it tries that the USD just might lose its reserve status and then you're really fucked.

Then you have healthcare & banking making up ~40% of your economy. Both sectors are parasitic in that they impose large costs on all other sectors of the economy which takes away from their competitiveness. Both are required to have a modern economy, but every dollar which a bank or hospital takes in as revenue is a dollar which comes out of the actual wealth producing sectors of the economy.

If you want a far more in depth yet easy to understand explanation of things, I'll refer you to the following book. Mr. Denninger wrote a book on it so that I don't have to.
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I’ve said exactly what you’re saying for years yet I was ridiculed. We are in a turning that’s for sure. I don’t think this is the end of times though.
 
Rob Battisti said:
I’ve said exactly what you’re saying for years yet I was ridiculed. We are in a turning that’s for sure. I don’t think this is the end of times though.
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No one can predict the future 100%. However, pretty much every economic indicator is at 1929 levels or worse. End of times? Possible, but probably not. A world of pain like you've never seen in your trading life? Pretty much guaranteed.
 
Congress is either going to have to act to take back the power to levy tariffs or use the 25th amendment to get rid of this fucking moron.

He's torching the economy and has no idea how trade works on a fundamental level.

This isn't a fucking joke anymore. All of this is lunacy.

 
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