Analysis of current economic conditions and policy
Up, Up and Away
Economic Policy Uncertainty, 5 December 2018:
Figure 1: US Economic Policy Uncertainty Daily Index, accessed 12/5/2018. Source: policyuncertainty.com via FRED.
7 thoughts on “Up, Up and Away”
pgl
Is the trade war with China over (Monday’s Trump tweeting leading to stock market surges) or back on (the Tuesday stock crash)? If I were a shareholder of a U.S> steel company, I would sue Trump.
Both rose Monday when Trump told them that the trade war with China was going to be put on hold. Less expensive aluminum and steel!
Of course by Tuesday the market realized that Trump was lying as usual as no deal had been reached with China. So both stocks plummeted.
The SEC needs to monitor the stock trades of this motley crew in the White House. They are one corrupt brunch.
Moses Herzog
If I was the Chinese Politburo, I think I would just go ahead with whatever increased tariffs I had anticipated doing regardless of USA moves just to watch donald trump crap his pants when he realizes this is going to have a real impact on late 2019 GDP.
I don’t know the correct economic term for this, but there has to be a term for what would be the reverse of fiscal stimulus’ “multiplier effect” where these tariffs start jamming up the global value chain. A “reverse multiplier” type thing. You can’t have margins squeezed (or demolished into negative territory where farmers literally go bankrupt) in large segments of agriculture and autos and not have significant spillovers, not to mention your input components on things like your Apple laptop or i-Phone.
Hope Xi disembowels the bastard known as the “VSG”. I wanna see it and I want the still photo of trump’s midsection when Xi’s done. I really do.
baffling
trump has backed himself into a corner with china and the next elections. he needs to have a growing economy for any chance of reelection. and the chinese know this. but his problems are coming home to roost. he was acting without long term thoughts going into the first midterm, and already overspent on a fiscal stimulus to create a “strong” economy for the midterms-but that did not really work out. now the chinese have the upper hand. they can suffer longer than trump, and could continue the trade war, knowing the end will occur when trump is not reelected. trump had a stronger economy, but his policies are making it weaker. that will hurt him in the long term-a concept trump never considers. which makes me concerned he will take some unexpected, drastic action in the next year to overcome his past mistakes.
5-star comment Sir. Any idea where our usual suspects are who love MAGA so much?? They seem to be so quiet on the blog here lately…….
pgl
“The U.S. trade deficit jumped to a 10-year high in October as soybean exports continued to fall and imports of consumer goods rose to a record high, suggesting the Trump administration’s tariff-related measures to shrink the trade gap likely have been ineffective.”
Now this is in nominal terms but I might caution do this in real terms (the article sort of admits this later). But Trump being ineffective – gotta love the writing here.
Look imports are up in part because Trump has not yet crashed the Obama recovery. But the fact that real exports are lower is very telling!
Is the trade war with China over (Monday’s Trump tweeting leading to stock market surges) or back on (the Tuesday stock crash)? If I were a shareholder of a U.S> steel company, I would sue Trump.
GM’s stock price:
https://finance.yahoo.com/quote/GM/
Ford’s stock price:
https://finance.yahoo.com/quote/F/
Both rose Monday when Trump told them that the trade war with China was going to be put on hold. Less expensive aluminum and steel!
Of course by Tuesday the market realized that Trump was lying as usual as no deal had been reached with China. So both stocks plummeted.
The SEC needs to monitor the stock trades of this motley crew in the White House. They are one corrupt brunch.
If I was the Chinese Politburo, I think I would just go ahead with whatever increased tariffs I had anticipated doing regardless of USA moves just to watch donald trump crap his pants when he realizes this is going to have a real impact on late 2019 GDP.
I don’t know the correct economic term for this, but there has to be a term for what would be the reverse of fiscal stimulus’ “multiplier effect” where these tariffs start jamming up the global value chain. A “reverse multiplier” type thing. You can’t have margins squeezed (or demolished into negative territory where farmers literally go bankrupt) in large segments of agriculture and autos and not have significant spillovers, not to mention your input components on things like your Apple laptop or i-Phone.
Hope Xi disembowels the bastard known as the “VSG”. I wanna see it and I want the still photo of trump’s midsection when Xi’s done. I really do.
trump has backed himself into a corner with china and the next elections. he needs to have a growing economy for any chance of reelection. and the chinese know this. but his problems are coming home to roost. he was acting without long term thoughts going into the first midterm, and already overspent on a fiscal stimulus to create a “strong” economy for the midterms-but that did not really work out. now the chinese have the upper hand. they can suffer longer than trump, and could continue the trade war, knowing the end will occur when trump is not reelected. trump had a stronger economy, but his policies are making it weaker. that will hurt him in the long term-a concept trump never considers. which makes me concerned he will take some unexpected, drastic action in the next year to overcome his past mistakes.
Total (goods & services) trade deficit rises:
https://www.cnbc.com/2018/12/06/international-trade-surges-to-highest-in-a-decade-as-imports-rise.html
Winning! Tiger Blood!
5-star comment Sir. Any idea where our usual suspects are who love MAGA so much?? They seem to be so quiet on the blog here lately…….
“The U.S. trade deficit jumped to a 10-year high in October as soybean exports continued to fall and imports of consumer goods rose to a record high, suggesting the Trump administration’s tariff-related measures to shrink the trade gap likely have been ineffective.”
Now this is in nominal terms but I might caution do this in real terms (the article sort of admits this later). But Trump being ineffective – gotta love the writing here.
Look imports are up in part because Trump has not yet crashed the Obama recovery. But the fact that real exports are lower is very telling!