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Old 02-24-2020, 03:02 PM
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Stock Markets, Tariffs, Coronavirus


Question: if Trump hadn't started a trade war with China, would the stock market have responded any differently to the coronavirus outbreak?

Caveats: I'm virulently anti-Trump, so I'd love to lay some of this at his feet. But I also try to be aware of my biases, and also of my ignorance, so I'm nowhere near ready to do that. I also know that this sort of counterfactual is impossible to prove.

What I'm interested in is informed speculation on the matter. Has the trade war decreased backup inventory, such that workplace stoppages from illness have more immediate effects on supply chains? Are heightened tensions more easily triggered into panics? Or are there countervailing forces that mean that without the trade war, the stock market would be even more volatile?

I really don't know, and would love to hear some informed and well-cited opinion.
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Old 02-24-2020, 03:35 PM
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This article suggests that Federal Reserve policy is also gonna matter:
Quote:
Originally Posted by WaPo
But central bank chiefs may be ill-equipped to battle the economic consequences of the flu-like illness. Interest rates are already in negative territory in Europe and near historic lows in the United States. And making credit less expensive -- the Fed’s standard tool for combating a slump -- may offset some of the financial upheaval, but will do little to remedy broken supply chains or ease worker and consumer fears of contagion.
AIUI, the Federal Reserve has already lowered interest rates to near-zero. There have been cautions that they shouldn't do so, since it removes their ability to respond to economic turmoil; but Trump has badgered them into keeping rates very low because it'll keep the economy thrumming along.
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Old 02-24-2020, 03:43 PM
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You ask if the stock market would have responded differently - I'm not sure of your premise here. So far the stock market has not reacted much at all to the coronavirus outbreak, at least in terms of the major indices (including China).

It may be completely wrong, of course, and the economy may be about to implode - but the market consensus right now is that this is no big deal.

Last edited by Riemann; 02-24-2020 at 03:44 PM.
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Old 02-24-2020, 03:47 PM
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You ask if the stock market would have responded differently - I'm not sure of your premise here. So far the stock market has not reacted much at all to the coronavirus outbreak, at least in terms of the major indices (including China).

It may be completely wrong, of course, and the economy may be about to implode - but the market consensus right now is that this is no big deal.
Have you watched the news today? Dow Jones is down 3.5%, and plenty of other markets are down as well.
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Old 02-24-2020, 03:50 PM
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Have you watched the news today? Dow Jones is down 3.5%, and plenty of other markets are down as well.
Have you looked at a chart for 3 months, 6 months - any period you choose - to see how insignificant a drop that is? It has been a very modest reaction.
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Old 02-24-2020, 04:02 PM
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Has the trade war decreased backup inventory, such that workplace stoppages from illness have more immediate effects on supply chains? .
In the US or in China? If anything Chinese inventories were above normal. The annual build-up of inventory to cover the impact of Chinese New Year being one factor.

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Are heightened tensions more easily triggered into panics?
Undoubtedly.

Quote:
Or are there countervailing forces that mean that without the trade war, the stock market would be even more volatile?
Intuitively, if economic growth was curtailed, then the impact of COVID-2019 off a smaller base would be less.
There’d be more volatility if the markets were betting on a truce in the trade war, and therefore were gearing up for resumption of “normal” trade when COVID-2019 impacted the supply chain.


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the Federal Reserve has already lowered interest rates to near-zero. There have been cautions that they shouldn't do so, since it removes their ability to respond to economic turmoil;
This is standard monetary policy thinking from the Central Bank's playbook, but that book was written before policy setting of negative interest rates became an serious option.

Last edited by penultima thule; 02-24-2020 at 04:03 PM.
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Old 02-24-2020, 05:41 PM
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Have you looked at a chart for 3 months, 6 months - any period you choose - to see how insignificant a drop that is? It has been a very modest reaction.
I agree that it's premature to declare that the market has reacted in a major way to the coronavirus outbreak. That said, I believe quite strongly that the market has not been pricing risk effectively since - well, for a few years now, but in particular since the outbreak started causing a major world economy to shut down major cities. If the market shrugs off this drop and continues its climb upwards, then you will have been right. But I think LHOD's question - whether or not there is intersectionality between Trump's trade war and the pandemic shock - is quite interesting if you presume that today's drop is more than a temporary blip. I don't have much to offer on the specific question at the moment, but if I can get some free minutes, I might try doing a bit of digging.
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Old 02-24-2020, 05:50 PM
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Question: if Trump hadn't started a trade war with China, would the stock market have responded any differently to the coronavirus outbreak?
While some details might differ... no. Not really. It was inevitable that an epidemic fucking up the Chinese economy and manufacturing was going to screw with the economy of the rest of the world.
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Old 02-24-2020, 06:15 PM
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I agree that it's premature to declare that the market has reacted in a major way to the coronavirus outbreak.
How can it ever be premature to declare whether the market has reacted? We can see where it's trading right now. It's an objective fact that it has not reacted very much.

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If the market shrugs off this drop and continues its climb upwards, then you will have been right.
I will be neither right nor wrong, because I made no prediction. I just stated that the market has not reacted significantly, implying that the market consensus at present is that this is no big deal.

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But I think LHOD's question - whether or not there is intersectionality between Trump's trade war and the pandemic shock - ...
That wasn't exactly LHoD's question. He seemed to start from a premise that the market was in chaos, and asked if there would have been less chaos without Trump. I rejected his premise that the market is in chaos. Right now, it's not.

Now, we can have a discussion about whether the market is pricing the risk correctly, but let's be clear to distinguish factual reporting on the state of the market and our opinions on whether the market is wrong.

Last edited by Riemann; 02-24-2020 at 06:18 PM.
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Old 02-24-2020, 06:28 PM
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How can it ever be premature to declare whether the market has reacted? We can see where it's trading right now. It's an objective fact that it has not reacted very much.
Perhaps everyone reporting on today's drop is overreacting. But it looks more to me like you're underreacting. *Shrug*. You don't think the question is interesting. Noted; moving on.
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Old 02-24-2020, 08:03 PM
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This article suggests that Federal Reserve policy is also gonna matter:

AIUI, the Federal Reserve has already lowered interest rates to near-zero. There have been cautions that they shouldn't do so, since it removes their ability to respond to economic turmoil; but Trump has badgered them into keeping rates very low because it'll keep the economy thrumming along.
That's generally what I've read from economists. Two things are generally relied on in capitalistic economies when there is a downturn in the economy, interest rates are lowered, and they borrow more. Trump did this when the economy was already stabilized. Most he got was for one year 2.9% GDP (same as Obama), last year was 2.3%, and trillion dollar annual deficits back on the rise. And he's also pushing for negative interest rates next.
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Old 02-24-2020, 08:26 PM
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It's not like I'm making this up.
Questioning the facts of your premise has nothing to do with whether I think your question is interesting. I think the question of the impact of the pandemic on the world economy is extremely important.

But getting away from today's scary headlines (you always get them on down days) these are the facts:

S&P 500 on Dec 31st = 3231

News of the outbreak in Wuhan starts to come out in the first week of January

S&P 500 at today's close = 3226, unchanged from Dec 31st

So I think the right way to frame the question is to ask why the market has thus far reacted so little to what could be an economic disaster. I think it's quite odd, and I am surprised that the market in the U.S. isn't down 10% on the year, and in China 20%. Even China is only down a few percent on the year, or back to where it was mid-December.

Last edited by Riemann; 02-24-2020 at 08:30 PM.
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Old 02-24-2020, 08:34 PM
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And he's also pushing for negative interest rates next.
Being a property developer, having a business model of being in hock to the gunnels, the prospect of negative interest rates would be the very definition of money for jam.
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Old 02-24-2020, 09:00 PM
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Originally Posted by Left Hand of Dorkness View Post
Question: if Trump hadn't started a trade war with China, would the stock market have responded any differently to the coronavirus outbreak?

Caveats: I'm virulently anti-Trump, so I'd love to lay some of this at his feet. But I also try to be aware of my biases, and also of my ignorance, so I'm nowhere near ready to do that. I also know that this sort of counterfactual is impossible to prove.

What I'm interested in is informed speculation on the matter. Has the trade war decreased backup inventory, such that workplace stoppages from illness have more immediate effects on supply chains? Are heightened tensions more easily triggered into panics? Or are there countervailing forces that mean that without the trade war, the stock market would be even more volatile?

I really don't know, and would love to hear some informed and well-cited opinion.
The stock market jitters have nothing to do with trade wars; they're a reaction to concern that global supply chains have been disrupted, as well as the concern that the second largest economy could be headed to some serious economic problems. Many small Chinese businesses operate with about a month's cash on hand. If there's a weeks-long disruption in consumption, production, and trade, that's a serious blow to the Chinese economy, and that would bring pain that would linger well beyond the coronavirus season. China's banks have already used a ton of stimulus to deal with the trade conflicts, so in that sense, yes, the trade wars are a problem in that China's chief tool to deal with this problem has already been used to deal with tariffs. But COVID is a problem by itself.
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Old 02-24-2020, 09:01 PM
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So I think the right way to frame the question is to ask why the market has thus far reacted so little to what could be an economic disaster. I think it's quite odd, and I am surprised that the market in the U.S. isn't down 10% on the year, and in China 20%. Even China is only down a few percent on the year, or back to where it was mid-December.
A few days ago the outbreak was mostly confined to China, with the expectation that an in-control Chinese government could limit the effects of it.
Yesterday it was in Italy, and no one has ever accused the Italian government of being in control.
Last week the news was of Chinese manufacturing starting up again. If it does, and the virus spreads, then there will be an even more significant impact on the supply chain.
Asian tourism is way, way down. What's the impact going to be on countries that depend on Chinese tourism?
So the question is, whether traders are going to see the market as a bargain, and buy, or will they wake up to the possible impact, and keep selling? If the former, then this drop is insignificant. If the latter, this could be the start of something big.
I sure don't know. If I did I'd be rich.
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Old 02-24-2020, 09:04 PM
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This article suggests that Federal Reserve policy is also gonna matter:

AIUI, the Federal Reserve has already lowered interest rates to near-zero. There have been cautions that they shouldn't do so, since it removes their ability to respond to economic turmoil; but Trump has badgered them into keeping rates very low because it'll keep the economy thrumming along.
The current fed funds rate is about 1.55-1.60 IIRC. It's not zero, and it's not negative rates, but it's hard for the banks and people saving for retirement to make money on cash in vaults. Trump wants negative rates because, well, he's forever in debt - go figure.
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Old 02-24-2020, 09:10 PM
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That's generally what I've read from economists. Two things are generally relied on in capitalistic economies when there is a downturn in the economy, interest rates are lowered, and they borrow more. Trump did this when the economy was already stabilized. Most he got was for one year 2.9% GDP (same as Obama), last year was 2.3%, and trillion dollar annual deficits back on the rise. And he's also pushing for negative interest rates next.
We can lower interest rates, but that would only push us deeper into a hole in the long term.

The real problem with the Trump economy is that it's only working for the economic elite.

Unemployment is at 50-year lows. Yay! How's labor participation? How's inflation for consumers?

We have wage growth? Yay! But why isn't that wage growth translating into more purchase power for the lower-level earners - that's a deadly serious question that needs to be answered before we start patting ourselves on the backs for our "growth."

As I said, this is a fake bull market economy - absolutely fake. It's fake growth and fake prosperity. Most people in this country are just too dumb to realize that their jobs are temporary and that the only ones really benefiting are the plutocrats.
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Old 02-24-2020, 09:32 PM
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Note the strategic use of "on" and "as" instead of "because of". It's such a headline cliche do avoid outright saying that any particular news event is definitely the cause of a stock market rise/fall.
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Old 02-24-2020, 09:45 PM
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Note the strategic use of "on" and "as" instead of "because of". It's such a headline cliche do avoid outright saying that any particular news event is definitely the cause of a stock market rise/fall.
And, of course, although it's certainly true that the worsening news about the coronavirus caused today's drop, the headlines are always focused on the single day's move, and framed as though it's a straightforward causal connection that any fule could have foreseen in both timing and magnitude, as though the market is simply a totally rational processor of facts.
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Old 02-25-2020, 12:25 AM
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You have to go all the way back to January 2020 to find the stock market as low as it is today!
Even after this slump, the three major U.S. indexes are all higher than they were anytime in history prior to 2020.

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... So I think the right way to frame the question is to ask why the market has thus far reacted so little to what could be an economic disaster. I think it's quite odd, and I am surprised that the market in the U.S. isn't down 10% on the year, and in China 20%. Even China is only down a few percent on the year, or back to where it was mid-December.
Part of the explanation, at least in some analysts' views, is that stock prices are increasingly disconnected from reality: they are buoyed up by low interest rates and buybacks.

Gold, OTOH, just set a seven-year high.
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Old 02-25-2020, 07:15 AM
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Part of the explanation, at least in some analysts' views, is that stock prices are increasingly disconnected from reality: they are buoyed up by low interest rates and buybacks.
Those things aren't disconnected from reality.

When interest rates are low, investors tend to move from bonds into stocks, which causes stocks to rise, everything else being equal.

Likewise, stock buybacks reduce the number of shares outstanding generally causing the remaining shares to go up in price.
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Old 02-25-2020, 09:50 AM
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Yeah. We're quibbling about my phrase "disconnected from reality." The point is that stock values continue to be buoyed up even in sectors which are seeing drops in earnings.

Any smart players out there with specific advice on buying Put options?
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Old 02-25-2020, 10:41 AM
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Hell if my crystal ball worked I'd already have my own island.
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Old 02-25-2020, 10:49 AM
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Didn't Paul Samuelson say 50 years ago that the stock market correctly predicted 9 of the last 5 recessions?

Not sure the market is "increasingly" disconnected from things. Though maybe it is true that with computers and the internet, sudden swings can happen faster or more efficiently.
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Old 02-25-2020, 11:15 AM
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Yeah. We're quibbling about my phrase "disconnected from reality." The point is that stock values continue to be buoyed up even in sectors which are seeing drops in earnings.

Any smart players out there with specific advice on buying Put options?
While interest rates have something to do with reality, stock buybacks in the present environment don't. If the money came from profits that would be one thing, but the recent buybacks were funded by a tax cut that was sold as going into investment.
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Old 02-25-2020, 11:23 AM
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You have to go all the way back to January 2020 to find the stock market as low as it is today!
Even after this slump, the three major U.S. indexes are all higher than they were anytime in history prior to 2020.
Would you believe 12/3/19? At the moment, with the Dow down another 340 points after being mildly positive in the morning.
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Old 02-25-2020, 11:33 AM
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We can lower interest rates, but that would only push us deeper into a hole in the long term.

The real problem with the Trump economy is that it's only working for the economic elite.

Unemployment is at 50-year lows. Yay! How's labor participation? How's inflation for consumers?

We have wage growth? Yay! But why isn't that wage growth translating into more purchase power for the lower-level earners - that's a deadly serious question that needs to be answered before we start patting ourselves on the backs for our "growth."

As I said, this is a fake bull market economy - absolutely fake. It's fake growth and fake prosperity. Most people in this country are just too dumb to realize that their jobs are temporary and that the only ones really benefiting are the plutocrats.
Labor participation is at a 7 year high. CPI has inflation at 2.5% yearly which is average for recent history and low for history. Meanwhile wage growth is the highest it has been in a decade. What are metrics are you using as purchasing power for lower level earners?
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Old 02-25-2020, 11:35 AM
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Given that the trade war made some industries source to countries other than China, it probably had a small positive effect on the stock market. In the long term anything that disrupts global trade is going to be bad for everybody but we will have to see how bad it gets.
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Old 02-25-2020, 11:54 AM
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While interest rates have something to do with reality, stock buybacks in the present environment don't. If the money came from profits that would be one thing, but the recent buybacks were funded by a tax cut that was sold as going into investment.
Many of the buybacks are funded directly by increasing long-term debt.

I don't know how to Google to find exact numbers, but I read that a record percent of corporate debt now has specifically BBB rating — the lowest rating considered "investment grade." Are the ratings agencies goosing their ratings again?
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Old 02-25-2020, 01:57 PM
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How can it ever be premature to declare whether the market has reacted? We can see where it's trading right now. It's an objective fact that it has not reacted very much.
I thought I was being clear, but let me try again: it's premature to say that the market has had a large reaction, because it has not yet had a large reaction. In two months, it might be fair to say it has had a significant reaction. In other words, it seems to be reacting now, with what currently appears to be back-to-back 1000 point drops, but it is still premature to call it a big reaction.

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I will be neither right nor wrong, because I made no prediction.
Ok, my apologies for putting words in your mouth.

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That wasn't exactly LHoD's question. He seemed to start from a premise that the market was in chaos, and asked if there would have been less chaos without Trump. I rejected his premise that the market is in chaos. Right now, it's not.
It's premature to say if it's in chaos. It might be. And also, it pretty much was LHOD's question. His specific questions were both about the market, but also about the real, underlying economy:

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Has the trade war decreased backup inventory, such that workplace stoppages from illness have more immediate effects on supply chains?
To the degree that the market is rational in the long-run, it responds to real, underlying fundamentals, and LHOD had an interesting question about whether or not there is an interesting nexus between a pandemic-based shock and the pre-existing trade war.
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Old 02-25-2020, 09:03 PM
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Labor participation is at a 7 year high. CPI has inflation at 2.5% yearly which is average for recent history and low for history. Meanwhile wage growth is the highest it has been in a decade. What are metrics are you using as purchasing power for lower level earners?
Labor participation has been under 64% since 2010; we're where we were at in 1980. Real wages haven't changed that much, either. Debt is growing. But most importantly, the gap between the rich and the un-rich is growing.

As I said, fake economy.
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Old 02-25-2020, 11:22 PM
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The trade war has hurt a lot of the smaller component manufacturers in China. They already have a very competitive market with razor thin margins, and the trade war certainly exacerbated their normally precarious situation. Supply chains had their seasonal disruption for Chinese New Year, which was extended more than a week. And now there is a massive labor shortage in the factories. The supply chain in China is going to be disrupted thru at least the end of April in the most optimistic case.

All it takes is a 20 cent spring to shut down an automotive line or a 2 cent screw to stop a laptop. These guys go bankrupt and there will be a disruption to find an alternative supplier or to increase capacity among those that don't go bankrupt.

The labor shortage means that big players such as Apple, who are willing to pony up cash to entice workers back to the factory, will crowd out the marginal component suppliers that are bidding for the same workers.

Net net, Trumps trade war(s) have not helped the situation.
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Old 02-26-2020, 12:08 PM
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Labor participation has been under 64% since 2010; we're where we were at in 1980. Real wages haven't changed that much, either. Debt is growing. But most importantly, the gap between the rich and the un-rich is growing.

As I said, fake economy.
Labor force participation has been going up for the first time in 20 years, most of the decline was due to Simpsons effect and an aging workforce. The other big reason is the disability system.
Real wages have been going up at a steady rate for almost 8 years.
In a growing economy the gap between the rich and un rich will always grow. Those with 0 shares in the stock market will always have $0 but those with shares in the stock market will get richer when it goes up.
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Old 02-26-2020, 01:36 PM
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Have you looked at a chart for 3 months, 6 months - any period you choose - to see how insignificant a drop that is? It has been a very modest reaction.
Depends on the stock. 2 of mine were absolutely crushed. Of course one is LVS so clearly I bought in at the wrong time (literally the day before Trump announced his tariffs)
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Old 02-26-2020, 01:48 PM
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Have you looked at a chart for 3 months, 6 months - any period you choose - to see how insignificant a drop that is? It has been a very modest reaction.
Depends on the stock. 2 of mine were absolutely crushed. Of course one is LVS so clearly I bought in at the wrong time (literally the day before Trump announced his tariffs)
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Old 02-26-2020, 04:17 PM
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Labor force participation has been going up for the first time in 20 years, most of the decline was due to Simpsons effect and an aging workforce. The other big reason is the disability system.
Real wages have been going up at a steady rate for almost 8 years.
In a growing economy the gap between the rich and un rich will always grow. Those with 0 shares in the stock market will always have $0 but those with shares in the stock market will get richer when it goes up.
The fake doom and gloom about the economy that got Trump elected still runs strong. The median household is pulling in more real income than ever before, but as you see we have posters who feel it's more important to be concerned that other people who aren't them are doing even more betterer.

Last edited by Ruken; 02-26-2020 at 04:18 PM.
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Old 02-27-2020, 03:11 PM
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And down another 1,200 points today. Nobody can say with certainty why the stock market does anything, but coronavirus is pretty clearly the driver of this downward turn.

Again, I don't have opinions on how trade wars intersect with the pandemic. But it's interesting to read responses.
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Old 02-27-2020, 03:15 PM
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Dupe.

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Old 02-27-2020, 03:21 PM
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With something as complex as the stock market which could never be accurately modeled to the point where year by year much less day by day variations could be accurately calculated it’s sort of pointless to speculate.
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Old 02-27-2020, 03:30 PM
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As I said, this is a fake bull market economy - absolutely fake. It's fake growth and fake prosperity. Most people in this country are just too dumb to realize that their jobs are temporary and that the only ones really benefiting are the plutocrats.
Yep. Potemkin Economy.

I wanted to add a couple of observations. First, most American manufacturers are really vulnerable to supply chain disruptions.

They have been streamlining their process for years, moving towards a management philosophy called “just in time”.
Which means they don’t stockpile inventory. This always caused a lot of short delivery delays that drove salespeople like me crazy. But the factories claimed to save a ton of money by not tying up capital in excess inventory.

Second, these tariff wars will ultimately benefit manufacturers at a cost to consumers. Last year the factories I was working with kept raising their prices like crazy, driving up the cost to the end users.

And I can guarantee that when those tariffs go away, those prices aren’t coming back down. The manufacturers will just take more profit.

Last edited by Ann Hedonia; 02-27-2020 at 03:31 PM.
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Old 02-27-2020, 04:37 PM
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With something as complex as the stock market which could never be accurately modeled to the point where year by year much less day by day variations could be accurately calculated it’s sort of pointless to speculate.
On the other hand, when a dip immediately follows the release of bad news about the virus, the cause seems pretty clear.
Why it went down so much is another matter.
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Old 02-27-2020, 04:43 PM
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Would you believe 12/3/19? At the moment, with the Dow down another 340 points after being mildly positive in the morning.
Back to August now, and that's only because there was a slump then.

And the S&P posted its fastest correction in history.
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Old 02-27-2020, 06:46 PM
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On the other hand, when a dip immediately follows the release of bad news about the virus, the cause seems pretty clear.
Why it went down so much is another matter.
Seems clear sure. But how much of that is psychological and how much is fundamental? How much is a bet on others acting psychologically? No one knows and it is in fact fundamentally unknowable.

One is either investing in an economy or one is gambling.
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Old 02-27-2020, 09:45 PM
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And down another 1,200 points today. Nobody can say with certainty why the stock market does anything, but coronavirus is pretty clearly the driver of this downward turn.

Again, I don't have opinions on how trade wars intersect with the pandemic. But it's interesting to read responses.
That the stock market went down on reports of a mysterious virus isn't cause for alarm or proof of a 'fake' economy. But the fact that we've gone from a record high...to a correction pretty much proves that I was right - total fucking fake ass economic "growth." You know why? Because it's unprecedented. We've never gone from record high to correction - not even during the depression. It's never, ever happened - like, ever.

Economic growth that looks good on paper, but ain't shit in real life because about half this country would be absolutely feelin' the hurt if employers were to lay them off for the better part of 4-6 weeks - and guess what boys and girls, we just might be about to see that scenario play out.

Moreover, the little stock buyback shell game scam might also be exposed for what it is. See, in economic growth cycles, people don't ask questions, they just take the money and run. But when "growth" stops, like when the tech bubble popped, economists and people with a financial background start, ya know, asking questions - like how the fuck companies like Enron, WorldCom, and Tyco make their money. Once people stop rolling in the over-inflated P/E ratios, they start asking questions, and that's bad fucking news, especially when most of the real "growth" - the wage growth and wealth growth - is happening at the top.

As I said: fake.

Last edited by asahi; 02-27-2020 at 09:46 PM.
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Old 02-27-2020, 09:49 PM
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Back to August now, and that's only because there was a slump then.

And the S&P posted its fastest correction in history.
From record high...to correction - in a week.

Yeah, this is a real economy.

Suckers!
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Old 02-27-2020, 09:52 PM
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Seems clear sure. But how much of that is psychological and how much is fundamental? How much is a bet on others acting psychologically? No one knows and it is in fact fundamentally unknowable.

One is either investing in an economy or one is gambling.
The stock market highs were fueled by l'aissez faire, silent hand, "maestro" policies and this is the result. This is what happens when you prioritize 'growth' over stability, real wages, and a social safety net.
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Old 02-27-2020, 10:40 PM
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Seems clear sure. But how much of that is psychological and how much is fundamental? How much is a bet on others acting psychologically? No one knows and it is in fact fundamentally unknowable.

One is either investing in an economy or one is gambling.
One is always gambling. Sometimes the gamble is an investment (like a lottery ticket supporting schools) but it is always a gamble.
And since any stock sale or purchase is a bet on the future, which we don't know, I think it is safe to say it is all psychological - even if analysts think the market is rational. Which we know it isn't.
What reports represent are triggers. We know a report will cause some action - we just don't know in advance what action.
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Old 02-27-2020, 11:32 PM
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And I can guarantee that when those tariffs go away, those prices aren’t coming back down. The manufacturers will just take more profit.
I work for one of the biggest manufacturers on the planet. We don't make much profit unless you think 5% is a lot of profit? Seriously, manufacturers are at the bottom of the food chain.

I was in investment banking for the 1997 Asian crisis. Things were great until they weren't. IMHO markets are rationale over time but certainly not in the short term. Current markets have been fed by central bank incontinence, deficit spending, high valuations and stock buybacks. Coronavirus is simply pointing out the emperor has no clothes.
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Old 02-28-2020, 01:31 AM
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The stock market highs were fueled by l'aissez faire, silent hand, "maestro" policies and this is the result. This is what happens when you prioritize 'growth' over stability, real wages, and a social safety net.
Tell you all what, you start selling and I’ll keep buying and holding with a nice boring DCA strategy and in 20 years or so let’s compare today’s valuations and purchased or sold shares with the valuation of 2040 or so. Honestly, I wouldn’t mind a 20% drop for a few years. That’s lots of cheap shares to buy.

Last edited by octopus; 02-28-2020 at 01:32 AM.
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