China Trade deserves its own thread

HelmetBoy

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True


Some are (the market based ones and the manufacturing data). Some are still quite green (consumer sentiment & spending, employment). Now a strong argument can be made that the consumer side of the equation is the "dumb money" that is the most lagging of the leading indicators. That said, yesterday's LEI Index was up half a point, highest level since July 2018. So the basket of indicators is actually still healthy despite being a mixed bag.
Consumer sentiment and employment are the trailing indicators. Business confidence and investment are the leading ones.

Corporate executives have no idea what American trade policy is going to be in any corner of the world and the increasing possibility of mutual tariff escalations globally have them paralyzed. If they commit to invest domestically or abroad they could have their markets cut out from under them and generate massive losses. This was the entire problem with the Obama economy except instead of trade uncertainty it was regulatory uncertainty.

When demand appears strong, this uncertainty causes companies to stop investing. When demand appears to be waning, it will cause them to start reducing capacity (i.e., lay-offs). This process is starting in pockets of the economy which institutional investors are already seeing in their portfolios.
 
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windycityhorn

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Checking in on the trade war, which as promised has proved to be good and easy to win.


"Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue," Trump wrote. "I won’t let that happen! We don’t need China and, frankly, would be far better off without them."

He continued, "The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States."
 

J Galt

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....My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?


Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far....
....better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..
....your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States.
Yeah, this is pretty dumb.
 
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J Galt

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Consumer sentiment and employment are the trailing indicators.
No, they are most definitely leading indicators. Just probably not the vanguard of the LEI


The ten components of The Conference Board Leading Economic Index® for the U.S. include:

1. Average weekly hours, manufacturing

2. Average weekly initial claims for unemployment insurance


3. Manufacturers’ new orders, consumer goods and materials

4. ISM® Index of New Orders

5. Manufacturers' new orders, nondefense capital goods excluding aircraft orders

6. Building permits, new private housing units

7. Stock prices, 500 common stocks

8. Leading Credit Index™

9. Interest rate spread, 10-year Treasury bonds less federal funds

10. Average consumer expectations for business conditions
 

J Galt

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Corporate executives have no idea what American trade policy is going to be in any corner of the world and the increasing possibility of mutual tariff escalations globally have them paralyzed. If they commit to invest domestically or abroad they could have their markets cut out from under them and generate massive losses. This was the entire problem with the Obama economy except instead of trade uncertainty it was regulatory uncertainty.

When demand appears strong, this uncertainty causes companies to stop investing. When demand appears to be waning, it will cause them to start reducing capacity (i.e., lay-offs). This process is starting in pockets of the economy which institutional investors are already seeing in their portfolios.
Yes, this addendum is the crux of the issue. Which is why his complaining about Powell is so ludicrous. No C-suite exec is going to look at this environment and say, "if Fed funds were just 50 bps lower, I'd build that factory, hire 50,000 people and ramp up inventory."
 
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HelmetBoy

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Yes, this addendum is the crux of the issue. Which is why his complaining about Powell is so ludicrous. No C-suite exec is going to look at this environment and say, "if Fed funds were just 50 bps lower, I'd build that factory and hire 50,000 people."
The other reason his publicly attacking/lobbying Powell is so idiotic is that it makes it ***more difficult for the Fed to do what he wants then to do***. If the market believes the Fed is under the thumb of the WH and no longer an independent arbiter responding to economic data to it’s all over. The market will go haywire and stop responding to Fed moves in an orderly and predictable way.

This is real banana republic ****.
 

J Galt

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The other reason his publicly attacking/lobbying Powell is so idiotic is that it makes it ***more difficult for the Fed to do what he wants then to do***. If the market believes the Fed is under the thumb of the WH and no longer an independent arbiter responding to economic data to it’s all over. The market will go haywire and stop responding to Fed moves in an orderly and predictable way.

This is real banana republic ****.
That's been the issue for a couple years now. However, I'm starting to think Powell has been so castigated that, in an odd way, it frees him up to do what he thinks is best. Hell, even if he cuts 50 in September, Trump will cry foul that it should have been 100.
 

kennoisewater

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Checking in on the trade war, which as promised has proved to be good and easy to win.


"Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue," Trump wrote. "I won’t let that happen! We don’t need China and, frankly, would be far better off without them."

He continued, "The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States."
There is absolutely no limit to the level of embarrassment this man brings to our country on a daily basis. After reading yesterday about his struggles reading from a teleprompter and then viewing his tweets today I am very concerned about the possibility of Alzheimer’s or dementia. Healthy people of sound mind simply do not communicate the way President Trump does.
 

Iz of Texas

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There is absolutely no limit to the level of embarrassment this man brings to our country on a daily basis. After reading yesterday about his struggles reading from a teleprompter and then viewing his tweets today I am very concerned about the possibility of Alzheimer’s or dementia. Healthy people of sound mind simply do not communicate the way President Trump does.
Ehh, I don't pay attention to Trump, but do you spend any time on social media? This is literally how most people communicate on that medium. it's the downfall of society.

We've progressed from Publius and Silence Dogood to 140 characters
 

kennoisewater

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Ehh, I don't pay attention to Trump
This is a huge problem. We have normalized his behavior and decided that it’s not relevant to the job. I simply cannot fathom that reaction. At some point in the next election or two we are going to get stuck with a democrat President. If he acts as obnoxious and reckless as Donald Trump we have no one to blame but ourselves.
 

Iz of Texas

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This is a huge problem. We have normalized his behavior and decided that it’s not relevant to the job. I simply cannot fathom that reaction. At some point in the next election or two we are going to get stuck with a democrat President. If he acts as obnoxious and reckless as Donald Trump we have no one to blame but ourselves.
Who is "we"?

And I should clarify. I don't pay attention to Trump on Twitter, specifically.
 
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TEXBTP

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POTUS sounds dumb but its a clear signal that American companies need to start divesting from China. In case they couldn't figure that out over the past 15 months. I'll give POTUS a pass on this one.

The fighting with the fed is just red meat for the red hats, who hate the Fed, and for some reason still scream for the Fed to be audited even though OIG inspects and audits the fed every year. I don't give him a pass on this. I hate how he is always attacking American institutions.
 

scott_tiger

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Starting to get a Hoover/Trump FDR/ Elizabeth Warren vibe here
We’ll be living on ketchup soup and mounds of government soybeans
 
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kennoisewater

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I’m starting to lead more to the idea he really doesn’t wanna win re-election.
That's a disturbing thought but not out of the realm of possibility in 2019. What if President Trump has been behaving so obnoxiously since 2016 for the specific purpose of NOT being elected, but in the Idiocracy culture of today, it only makes him more popular. I can see it...
 

JG

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Trump wants to win. This IS Trump. It's the way he thinks; it's his personality.

This is a spoiled star who has been catered to and deferred to his entire life. When he acts like this, his friends at Fox kiss the ring (and his ass). His people at rallies go crazy with it. He believes this is the way he should be acting.
 
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futures2015

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Trump wants to win. This IS Trump. It's the way he thinks; it's his personality.

This is a spoiled star who has been catered to and deferred to his entire life. When he acts like this, his friends at Fox kiss the ring (and his ass). His people at rallies go crazy with it. He believes this is the way he should be acting.
 
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scout3dave

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After giving the actions of the day some thought, I would be very nervous if I was a H-K protester. This has the makings of quite a diversion by the Chinese government. The retaliatory tariffs they announced were out of the blue given that Trump delayed his tariffs and announced there would be trade meetings next month. The reaction by Trump had to be known so there must be some reason they did what they did.

This is not to excuse Trump's schizo actions, I just think the Chinese think a few steps ahead.
 

JG

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What of that is incorrect, futures? He's not a spoiled star that's been catered to for decades? He doesn't love his people at Fox, and he doesn't eat the cheering crowds up at his rallies?
 

HelmetBoy

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Easy read to me.

The Chinese saw Trump’s delay as a sign of weakness and chose this is their moment to really stick it to Trump and force him to choose between two bad options, which both ultimately accrue to their benefit:

1) force Trump to capitulate to a deal on favorable terms, or more likely,

2) dupe him into continuing escalation ahead of the Christmas shopping season (a revealed weakness), force the recession and doom his re-election. Unwind all this **** quickly with a Democratic successor.

This move was calculated to be as provocative to Trump as possible. There was no chance in hell they didn’t see an escalation by Trump as the most likely outcome.

Hitting the US with tariffs was a direct challenge to his ego and political persona as being “tough on China”. Trump is the easiest read at the poker table. He just got Sonny Corleone’d.
 

Iz of Texas

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Easy read to me.

The Chinese saw Trump’s delay as a sign of weakness and chose this is their moment to really stick it to Trump and force him to choose between two bad options, which both ultimately accrue to their benefit:

1) force Trump to capitulate to a deal on favorable terms, or more likely,

2) dupe him into continuing escalation ahead of the Christmas shopping season (a revealed weakness), force the recession and doom his re-election. Unwind all this **** quickly with a Democratic successor.

This move was calculated to be as provocative to Trump as possible. There was no chance in hell they didn’t see an escalation by Trump as the most likely outcome.

Hitting the US with tariffs was a direct challenge to his ego and political persona as being “tough on China”. Trump is the easiest read at the poker table. He just got Sonny Corleone’d.
China was Barzini all along...not that pimp, Tataglia.