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Trump Era 2025-2029 : Stock and Economic Comment

There's a lot of froth that still needs to come off the top of the market. From 2009 to the top we had about a 5-6x gain in the dow. Crazy stuff really. I'm trying to figure out if the good times are over or this is just another blip.

Money contracting and countries beginning to move against the US makes me wonder. But tech advances are what is the backstop in the story.
 
12.27 am here in Queensland and I've been watching CNBC US Squawk on the Street as the US market is now in official bear territory. It is incredible what lack of knowledge there is of countries outside the US and the reaction to retaliatory tariffs from China. China is being blamed, and their solution is all internal via Congress, the Fed and the world "understanding" the US position.

The US has lost not just financially from electing a moron who introduced tariffs, poorly estimated, contrary to economic advice and with impunity on former close friends.

America just doesn't get it.

Their solution iss similar to that of their gluttony leading to weight gain. Rather than lose weight by cutting back on calories and exercising more, they go for a market solution via a drug in short supply for diabetics who need it for their health.

Good night America.

gg
 
Or it's a negotiating tactic. Let everyone else know you are more than willing to throw the baby out with the bathwater if they won't give you what you want.

It's the geopolitical equivalent of letting them know they are arguing with a toddler and that you really will cut off your nose to spite your face. When you know the other person can withstand the hurt far less than you can, it'll work.

The gambit is that you need to be absolutely certain that they will crack first. Time's obviously going to tell on that but trump is obviously very confident the other side is going to give in before he does.



It's a technique used in business all the time and I have no doubt he's used it in business himself when trying to grind someone down into accepting some kind of lowball offer - have both of you lose money knowing you can withstand the pain far longer than he can so he just gives in and makes the deal.

If you're buying a "distressed asset" or a house that someone's having to sell to cover a debt or something then it's a very effective technique because if they don't take the offer they'll have no choice but to lose money hand over fist until they either get another one or accept yours.

At which point, if you really want to turn the screws, you can just tell them "nah mate, that was two months ago, my offer is now even less".

Deal from a position of strength
 
Alright lads we've cracked 525 (spy is currently at 514), where do we think the bottom is going to be?

The maths (which assumes a normal distribution) says around the 450 mark. What do we think?
 
Plastics are petroleum based. The yanks are now oil independent.

The only thing they really needed from the rest of the world was microchips and they made the moves on that years ago.
well since they don't have the worker-base of India or China ... not soon enough , then you have the crumbling bridges and rail-lines

Australia has to opportunity to ride some coat-tails here but probably won't
Mexico does. Mexico is a very young country and it's right next door - hence they can plumb oil pipelines across the border, build railways across it, so on and so forth.
With what though?
More instability/less certainty. Hence the military buildouts.
Abysmally. AI is a program like any other.

Maths only works under normal market conditions. Several quantitative firms/trading houses went bust during covid for example, and the ones that did survive trailed the market by miles.
Credit markets may give a warning
Mentioned this a few posts back. Credit spreads are the best indicator of general sentiment.
Worst case scenario, Europe, UK, Canada, Japan etc. do tariffs of their own to punish, USA doubles up.
This is what I mentioned earlier - who's going to give in/crack first?

Trump has made it more than clear that counterattacks will be met with even larger responses.

Even in a simple temperamental sense, does trump strike you as the kind of person to just let someone else strongarm him? If everyone else keep raising their own tariffs in response then I'm not being funny when I say I think he'll keep raising tariffs until he's impeached and I'm also not being funny when I say that considering the amount of guns in the USA and the types of people that own them I would be genuinely concerned about civil war at that point.

There's just no way they could do it without some kind of massive propaganda campaign that turned his supporters against him.
There's a lot of froth that still needs to come off the top of the market.
Also this. Markets were way ahead of themselves IMO.

We're actually back to trend about now, the question is whether we're going to dip any further and if so, by how much.

A normal distribution says about 15% more but this situation is anything but normal.
 
Meanwhile, currencies across the world are PLUMMETING against the U.S dollar, a dead giveaway that these tariffs are not the footshot a lot of people are claiming they are.



The yanks/trump are dealing from a position of far greater strength than people realise.

Please please please please stop thinking that trump is stupid.
 
Yes. The rest of the world's products will be less expensive countering the tariffs. The USA people will be the main sufferers as prices rise.

There are other real dangers.

A war might be a useful distraction and allow Trump some freedom from constraints of Congress and the House so he can keep this insanity going.

Any Republicans in particular that resist will automatically be traitors who must be dealt with.

I am picking Iran.
But who knows? Could be Canada.
 
Don't know how he's going to throw a war when he's defunding their nato commitments
 
Long overdue, but then are we talking regular recession or "technical" recession?
Never a good thing. Serious recession, long unemployment queues, etc. Worldwide but particularly in the USA

Australia is in a better position than most but I know a US firm that just laid off many of their Australian workers.
 
Never a good thing. Serious recession, long unemployment queues, etc.
Nah, often a good thing.

Some type of recession was (is) going to happen either way. The longer you ignore/delay the inevitable, the worse it gets. The national debts and fiscal positions of governments across the world are rapidly approaching the point of being unignorable.

This means either steep tax increases, monetisation of the debt (print money to pay it off), major cuts to government expenditure, or some combination 2 of 3 or 3 of 3.

Trump's gone for tax increases through the imposition of tariffs and a cut in government expenditure. The only alternative was currency devaluation which they actually tried first and just the inflation of the past 2-3 years has been enough to be political suicide (anathema to the general public) leaving them with no other options.

You can very easily avoid an on-paper recession if inflation runs rampant but the public showed they weren't willing to endure that particular type of pain so they're trying the other options now instead.

The piper must be paid one way or another.
 
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