Author Topic: trade war  (Read 2975 times)

aaron

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Re: trade war
« Reply #30 on: June 24, 2018, 05:51:28 PM »
The simple rules of thumb—sell China, sell Korea, sell emerging markets, prefer smaller to larger U.S. stocks and buy the safe-haven dollar and bonds—have been working better than detailed analysis so far, in part because the prospects for a trade war are still so uncertain. If it becomes clear that new trade barriers are here to stay, understanding both the details of which companies will be hit and the knock-on effects on the economy will matter more.

Back in January (when the Dollar was widely heated) a guy named Brent Johnson from Santiago CApital put out a video stating he thought the Federal Reserve going from QE to QT would cause capital flight into the US as the rate differentials had the US sucking the QE milkshake of other central banks.
https://www.youtube.com/watch?v=m6RZIbUvTXU

Tariffs from the US are leading to China preemptively easing their monetary policy
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Under the reserve cut, some 500 billion yuan ($76.86 billion) will be released for 17 large banks, including the Big Five state-owned banks, the central bank said. It said the banks are to use the freed-up funds by converting bad loans into equity in companies that default on their debts. ... Following the reduction in banks’ reserve-requirement ratio, analysts expect more loosening, including increasing lending quotas for banks, relaxing mortgage restrictions for home buyers in some cities and easing limits on local governments to borrow.
China is trying to use Yuan denominated bilateral trade deals and launch exchanges for key commodities like oil to set commodity prices in something other than Dollars.
https://www.reuters.com/article/us-china-oil-futures/shanghai-crude-futures-roar-into-action-as-global-merchants-dominate-trade-idUSKBN1H207T

They've also used debt to weigh down many smaller neighboring countries...debt trap diplomacy
http://www.atimes.com/article/sri-lanka-latest-victim-chinas-debt-trap-diplomacy/
http://www.businessinsider.com/chinas-debt-trap-diplomacy-hits-philippines-with-exorbitant-loans-2018-3
https://www.afr.com/news/politics/world/us-secret-report-china-debt-trap-on-australias-doorstep-20180513-h0zzwd
« Last Edit: June 24, 2018, 06:05:36 PM by aaron »

littleman

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Re: trade war
« Reply #31 on: September 18, 2018, 05:56:25 PM »
Trump Hits China With Tariffs on $200 Billion in Goods, Escalating Trade War

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The tariffs on $200 billion worth of products comes on top of the $50 billion worth already taxed earlier this year, meaning nearly half of all Chinese imports into the United States will soon face levies. The next wave of tariffs, which are scheduled to go into effect on Sept. 24, will start at 10 percent before climbing to 25 percent on Jan. 1. The timing of the staggered increase will partially reduce the toll of price increases for holiday shoppers buying Chinese imports in the coming months.


rcjordan

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Re: trade war
« Reply #32 on: September 18, 2018, 06:33:28 PM »
Commerce Secretary Wilbur Ross Speaks With CNBC's "Squawk Box" Today

https://www.valuewalk.com/2018/09/commerce-secretary-wilbur-ross-cnbc/

Personally, I dislike the trade war but am undecided as to whether it will be effective.

Debbie says it'll be cathartic.

ergophobe

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Re: trade war
« Reply #33 on: September 18, 2018, 08:37:25 PM »
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The timing of the staggered increase will partially reduce the toll of price increases for holiday shoppers buying Chinese imports in the coming months.

That is to say, the timing of the staggered increase was calculated so that the effects would not be known in time to be an issue for the 2018 elections. Which, frankly, if I was an incumbent worried that the tariffs might turn out bad for likely donors to my party's candidates, that's how I would time it.

aaron

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Re: trade war
« Reply #34 on: September 18, 2018, 10:15:17 PM »
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That is to say, the timing of the staggered increase was calculated so that the effects would not be known in time to be an issue for the 2018 elections. Which, frankly, if I was an incumbent worried that the tariffs might turn out bad for likely donors to my party's candidates, that's how I would time it.
I think the reason they left more stages was so they left more layers of uncertainty & had more in the bottle of pain to leverage later.

They could have waited an extra month from now and started with 25%, but by doing things in smaller stages they have better control of the narrative.

The lobbying flows pre-date the passage of anything significant.  Even rumor of a scent of potential costs or regulations drive intense spending on the GET THE FACTS styled political (dis)information campaign front.

It is already over half-way through September. Elections are November 6th. That is a 50-day window.

If the tariffs came through full right away, much of them likely would not have been passed onto consumers that quickly. Retailers can show margin pressures so long as they show e-commerce growth (or spin the cause as being associated with heavy investment in growing ecommerce), but retailers can't show low margins, declining sales & limited ecommerce growth. Until Amazon's stock price seriously heads south (which might not happen anytime soon) retailers will do anything to hype their ecommerce growth, cross claim sales that touch a computer in any way as being ecommerce, lose money to keep volumes up at least until the holiday shopping season is through, etc.

Mackin USA

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Re: trade war
« Reply #35 on: September 19, 2018, 10:38:10 AM »
"Debbie says it'll be cathartic."

Short term pain for long term gain.
Mr. Mackin

aaron

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Re: trade war
« Reply #36 on: September 20, 2018, 06:11:17 PM »
So much for the trade war destroying the capital markets (at least not happening in the short run). US stock market back on fire again yesterday and today.

Tilray longs and shorts are both smoking very large bowls throughout the trading day
https://www.cnbc.com/2018/09/20/pot-stock-tilray-set-to-open-higher-after-more-wild-trading-overnight.html
CPG companies should trade in tandem with Tilray as shareholders get rich & cash in a bit to buy some munchies.  Couple more strong weeks by Tilray and they'll be able to buy out the (then lower valued) FANG players in stock for stock transactions. :D

Dollar General (import cheap stuff from China retailer without the diversified supply chains a Walmart has) is within 3% of their all-time high.

Even the Chinese internet-related companies have jumped.

Baidu $217 to $231
Alibaba $156 to $166
JD.com $25.75 to $27.15
Tencent ADR $41 to $42

And even some bland/boring/cathartic value stocks have been going up in spite of the 10-Year rising to a 4 month high
https://www.marketwatch.com/story/10-year-treasury-yield-inch-toward-7-year-high-2018-09-19

I was hoping for a downdraft as political ugliness leading into midterms couples with trade war narrative & rising bond yields to whack the stock market, but it keeps going from strength to strength. Maybe political outrage fatigue has simply made the media a bit impotent with all the doommongering stuff.

Drastic

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Re: trade war
« Reply #37 on: September 25, 2018, 09:40:58 PM »
lol on the tilray comments.

>I was hoping for a downdraft as political ugliness leading into midterms couples with trade war narrative & rising bond yields to whack the stock market, but it keeps going from strength to strength.
I don't follow things to the technical degree that you do, but it seems to me the longer it takes to get into our next correction, the more it's going to hurt.

>Maybe political outrage fatigue has simply made the media a bit impotent with all the doommongering stuff.
I think this could be shortened to media outrage fatigue. They are constantly blowing their wad on anything so when something real happens it just blends in. More and more news headlines are reading like national enquirer to me.

ergophobe

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Re: trade war
« Reply #38 on: September 26, 2018, 12:51:04 AM »
They are constantly blowing their wad on anything so when something real happens it just blends in.

https://www.gradesaver.com/amusing-ourselves-to-death/study-guide/summary