I had said a couple times before, I was using 888 as a long-term marker, when the tariffs had already significantly impacted prices, and saved the number in my feeble brain on the chance CoRev would attempt some kind of “I told you so” at a later date (even though I have been in Menzie’s camp on this from the get go). So, here we are, months later (over a year now?? I guess I can check the futures graphs easy enough) with it about 10% lower than the number I was using as a marker.
You know, some people on this blog are going to find this extremely hard to believe, but generally I’m against pouring salt over open wounds. However, on occasion, some people basically beg to have the salt poured into the wound. And on those occasions it’s just so much fun pouring the salt in. In my analogy it’s important to remember Harold Blume’s character is much more likable than CoRev is, and all apologies to Menzie for sticking him with the young Max, but after all I most identify with Max in the film (I’m also a very socially immature person, like Max, unlike Menzie)
Actually if this was a good analogy there wouldn’t be any back-and-forth between the characters, it would just be one guy dominating. But the truth is, I was just looking for any excuse to put a clip up of one of my favorite movies of all time.
Was that $8.00 per bushel or 8 Euro’s? After all, a Euro could buy $1.25 in early 2018 so that would be $10! CoRev winning – right? Oh wait – the Euro buys only $1.10 now. Judy Shelton could say this is another reason for returning to the gold standard I guess!
But, but, but your prediction was for “the spot price” and the 52 week “low” spot price $7.90, and the last trading day, 5/10/2019, it was $7.97. We’re moving closer to your 7/15/2019 prediction date, and as we get closer your prediction looks to be getting worse. Want to rethink that $8.72 prediction as we go below the $8.00 mark?
With hog production taking average of 6 months to market, what is the likelihood China’s ASF afflicted hog market will generate enough need to exceed the supply of this years 2nd largest Brazilian soybean crop to generate need for the new US crop? What will Brazil do with any excess soybean crop? What will US farmers plant due to this late arriving Spring and the above data inputs? How many more hogs will be produced in the US this year?
As I’ve said all along, there are more factors that impact crop prices than just your tariff “event analyses”.
“But, but, but your prediction was for “the spot price” and the 52 week “low” spot price $7.90, and the last trading day, 5/10/2019, it was $7.97. We’re moving closer to your 7/15/2019 prediction date, and as we get closer your prediction looks to be getting worse. Want to rethink that $8.72 prediction as we go below the $8.00 mark?”
But, but, but – this is just more of your patented babbling. I seriously doubt Menzie has ever written anything as utterly incoherent as that piece of nonsense you just wrote. But I’ll leave it to Menzie to properly inform us of what his alleged prediction really was.
Using today’s 1 year/52 week prices, we find that US soybeans spot prices traded with a +/- ~12.5% range, $10.51 to $7.87. Since Menzie’s $8.72 prediction soybeans spot prices traded in a much narrower band, +/- ~3.6%, $8.14 to $7.87.
The question is will Menzie’s $8.72 prediction fall within the trading range since it was provided, 7/15/2018? The test is whether on 7/15/2019 spot prices fall between $9.04 or $8.4, +/- ~$.32? If measured today, it is a fail.
We’ll just have to wait.
CoRev: I do not understand your comment, at all.
Have you read Fama?
Trust me on this one – CoRev does not understand it either. He is just babbling away hoping to confuse matters.
Pretty sureCoRev is on track to be appointed our next Secretary of Agriculture.
“CoRev: I do not understand your comment, at all.”
this little critter continues to take a beating from the likes of menzie and 2slugs. his brain is close to mush at this point, but he keeps getting up to take another beating. you can expect his comments to become even less coherent with time. i used to think the little critter was brave for continuing to get back up after each beating. now i think he is simply tooo stoooopid to know better. it is a sad and pathetic story…
Menzie, why am I not surprised with your feigned confusion? July 15 is right around the corner. Did you understand the meaning of this question: “The question is will Menzie’s $8.72 prediction fall within the trading range since it was provided, 7/15/2018?”
How many times need I answer the same Fama question, yes! Several times now.
Did you read this opinion piece? https://www.washingtonpost.com/opinions/economists-often-dont-know-what-theyre-talking-about/2019/05/12/f91517d4-7338-11e9-9eb4-0828f5389013_story.html?utm_term=.9d9088f16a60 Economists often don’t know what they’re talking about
Some of its points:
“The most intriguing and indisputable thing we have learned about economists in recent decades is that they don’t know nearly as much as they thought they knew. …
As an economic journalist for roughly half a century, I have slowly and somewhat reluctantly come to the conclusion that many economists (and this applies across the political spectrum) often don’t know what they’re talking about — a shortcoming that is sometimes acknowledged and sometimes isn’t….
To say it is changing in detailed and often-unanticipated ways is simply to affirm that mere mortals, including economists, have never been very good at predicting the future.”
He concludes: “What I think can be held against economists — not all, but many — is that they exaggerate what they know and how much they can influence the economy. The aim is usually to gain and retain political relevance and power. But the result is often disappointment, as government performance falls short of promises. A little more humility might be in order.”
I’ve seen that too many times.
CoRev: If you have read Fama, I don’t think you still don’t understand the efficient markets hypothsis. In addition, I think you should not be reading Robert J. Samuelson for economic analysis. (Maybe try Paul Samuelson; that guy has a Nobel price.)
Agree with Menzie. I have lost count of the number posts I have put up on Econospeak pointing out errors madr by Robert J. Samuelson, who is indeed no relative of the late Paul. I think this column may be an expression of his frustration with having so many economists getting on his case about repeated errors.
And I am one of the ones who did call 2008 and explained it pretty well. I was also warning about negative interest rates, including here way long before most economists or journalists were even aware the were possible.
However, I make no claims on forecasting productivity trends. Have never tried to do that.
As for his opening bit about how employment grew more than forecast last month, that is easily explained largely by the surge in inventories, which will go away nest month. He is simply off on his claim that economists in general have been misforecasting employment growth.
Heck, this column was so bad (although economists as a bunch did do very poorly on forecasting 2008), I may have to put up a post on Econospeak. This is RJS just being pissy and whiny.
Robert – no relationship to Paul – Samuelson is actually paid for writing his insanely dumb opeds on economics. Not sure why anyone pays for his nonsense. Then again – it makes more sense than your standard CoRev rant!
Yves Smith is another one, who has made a mint off naive and illiterate visitors to her blog, by playing coy about economics orthodoxy. She’s very sly about how she talks about economics, trying to make the entire field a joke because “Look folks, I found 3 instances in 100 where economists were wrong!!!” or “Those economist b*stards didn’t scream bloody murder 3 months before the crisis!!!!”. Well, guess what?? Only a very small group of people knew what was going to happen in 2008 who weren’t mostly throwing darts with their eyes closed hoping to hit something. And Yves wasn’t screaming about a crisis pre-July 2008 either, so, maybe as a former Goldman Sachs employee she can do some self-reflection on how that was.
Long story short: “Yves Smith” (and I’m only not mentioning her real name because of the “bloggers’ code of conduct”, not out of respect to her) and Robert Samuelson are of the same ilk. I could probably list 20 of them if I sat and thought about it long enough, but I am too lazy.
Menzie, apparently it is you who do not understand the “efficient market hypothesis”, as I have been discussing the new information and the other factors that influence prices from the beginning. While you have been riveted upon Trump’s tariffs.
BTW, Samuelson’s article wasn’t about economic analysis but about economists’ failures to predict.
Strangely enough, that’s what my comment was about. Who’da guessed?
“Menzie, why am I not surprised with your feigned confusion?”
Feigned? You write utter gibberish which even you do not understand. C’mon CoRev – if you understand this topic, then try writing a coherent comment for a change.
May 13, 2019 at 1:46 pm
Menzie, apparently it is you who do not understand the “efficient market hypothesis”, as I have been discussing the new information and the other factors that influence prices from the beginning.”
Mother of Pearl! #1 – NO ONE denies that prices are affected by a variety of factors. NO ONE. But EMH holds that the forward price incorporates all available information at the time of the forecast. Of course there can be forecast errors if new relevant information becomes available.
Then again CoRev has no clue what these factors are or when relevant events have occurred. No – he just makes garbage up as he goes ignoring the real world around him. And to add to his incessant confusion – CoRev does not even get the difference between a spot price and a forward price.
Expect the following – more incoherent babbling from the CoRev. It is what he do!
“Economists often don’t know what they’re talking about”.
Robert no relationship to Paul Samuelson dared to write this? Only problem here is he knows even less economics than you do!
Always a treat—as well as low comedy—when CoRev delivers econ sermons, while also chastising Dr. Chinn on his failures to grasp Trumponomics.
CoRev recently told us that soybean prices stabilized under Trump. For his reference – here is one accounting of historical spot prices for soybeans:
These prices were near $10/bushel when Trump was elected. They are now near $8/bushel. Stabilized? Seriously?
Yes – lots of factors drive market prices – something NO ONE denies. But our host has provided all sorts of information on the factors that drive this market. CoRev? He just babbles incoherent gibberish!
Pgl, finally admits: “Yes – lots of factors drive market prices – something NO ONE denies.” Except he has denied those other factors and ignored any new information everyone else presented. Remember his incoherent gibberish about storing and delayed selling?
“Except he has denied those other factors and ignored any new information everyone else presented.”
You do lie a lot. But hey – you are only following your leader (Trump).
May we have a caption for this figure, please?
What are the 3 time series shown?
Left Coast Bernard
Bernark Leikind: Top indicator – range for trading session, with tick on right at close. Red means closed down; green means closed up. Purple line is “open interest” (outstanding contracts), bottom bars, volume.
CoRev What in the hell are you talking about? Are you now trying to convince us that you were predicting even lower soybean prices all along???
If you were a farmer (and I mean a real farmer and not just some hobby farmer), why would you vote to re-elect Trump after the mess he’s made of agriculture? I realize that many farmers will vote for him again in 2020, but people do lots of stupid things all the time. I’m just wondering why a farmer would want to vote for him. Is it because Ann Coulter tells them too? Television permanently tuned to Fox & Friends? What gives?
2slugs, there you go again making inane and inaccurate comments. Still denying the impacts of insurance and Government subsidies? You still don’t understand the complexities of making a living as a farmer.
CoRev Still denying the impacts of insurance and Government subsidies?
You’ve hit your quota of imbecilic comments today. When has anyone denied that farmers get far too much love and attention from GOP politicians? That’s not the issue. This is an economics blog, so the focus is on the economic effects of tariffs. The markets are telling us that we need fewer farmers and less government subsidies. Why should the rest of us subsidize an already overprivileged and overrepresented bloc of rural voters? One of Trump’s complaints about China is that they subsidize certain industries, but yet you don’t seem to have any problem with Trump subsidizing farmers. Why is that?
2slugs, as someone recently said: “You’ve hit your quota of imbecilic comments today…. (too much) focus is on the economic effects of tariffs. ” (There fixed it for you.)
You too seem to misunderstand Fama and the efficient markets hypothesis. Not all information affecting soybean prices is due to tariffs. One day your Trump hatred will be resolved, but “not today.”
“You too seem to misunderstand Fama and the efficient markets hypothesis. Not all information affecting soybean prices is due to tariffs.”
Now the 2 year olds are laughing at you. What part of relevant information at the time of the forecast did you not understood? Maybe we should stop asking you to read Fama (1970) and have you go back to the early 1960’s and John Muth:
C’mon CoRev – stop the embarrassing babble of yours and actually READ some basics!
To get more to the point, while CoRev is trying to make a big deal that soybean prices may end up in July below what Menzie forecast, this whole ongoing thread has been about CoRev claiming that Trump’s trade war with China was not hurting soybean farmers in the US and was not substantially responsible for the price decline that came after China put tariffs on US soybeans after Trump hit them with tariffs. All those price declines were due to weather and other things.
So now he is trying to somehow claim a victory because soybean prices may be lower than Menzie forecast, meaning that in fact Trump’s trade war has probably had an even more damaging impact than Menzie forecast, and meaning that CoRev was and is even more wrong in his basic argument. Do you understand this, CoRev?
Barkley, you’ve almost got it. But I never claimed agriculture commodity prices ” All those price declines were due to weather and other things. From the beginning I admitted that the tariffs had lowered prices, but it was Menzie and you other Trump haters that ignored or diminished the value of weather and other things. Then we started to see articles here and other places similar to Menzie’s recent ASF influence on China’s demand.
Your comment above: “…soybean prices may be lower than Menzie forecast, meaning that in fact Trump’s trade war has probably had an even more damaging impact than Menzie forecast…” is just too simple to be of value. Do you understand that your single point analysis is wrong today as Menzie’s was last year?
Please keep it up, as you confirm the article: Economists often don’t know what they’re talking about. Color me unimpressed.
CoRev ignored or diminished the value of weather and other things.
Ugh. This is another one of your famous strawman arguments. Weather events happen all the time and they happen all over the globe. We have plenty of historical data…more than enough to price in the risk of weather on crop yields and global harvests. The point of doing an event analysis is to isolate the effects of specific and exogenous shocks. Doing analysis means decomposing phenomena. It doesn’t mean what you’re doing, which is to throw up your hands and say it’s all complicated and lots of things affect lots of other things and gee whiz who knows why it’s this or that or some other thing. Instead of presenting analysis you’re just trying to throw up smoke. The bottom line is that China’s retaliatory tariffs have reduced soybean prices below what they would have been absent Trump’s unsuccessful trade war. Trade wars are not easy to win, as farmers are finding out. Trump is not and never has been a believer in free trade, as farmers are finding out. A year ago you were fairly confident that Trump’s trade war would be resolved fairly quickly and that Trump would emerge as some kind of victor. You were wrong.
2slugs, and again you deny Fama. “We have plenty of historical data…more than enough to price in the risk of weather on crop yields and global harvests.” Prices change nearly every time they happen. Why deny Fama and what we have been saying about agriculture pricing. Moreover why are you denying the impact of supply and demand? I thought this was an economics blog, but lately it has primarily been a TDS blog.
“2slugs, and again you deny Fama. ”
WTF? No he is not somehow denying Fama. But then it is crystal clear you have no clue what Fama’s paper was even about. 2slugs is making the mistake of trying to explain these concepts to you. But you could care less what Fama’s insights have to say about these issues as your Prime Directive is clearly to be Trump’s #1 troll.
Stop pretending you even care about what this discussion is about as EVERYONE knows you are nothing but a clown. Everyone addressing you in this thread is either asking you to stop or they are outright mocking your incessant stupidity.
Look, CoRev, I have actually worked on research projects studying the impact of climate change on agricultural production and prices. I am fully aware of the role of weather, and I have not said a word about it in this whole debate one way or the other. Indeed, I have largely stayed out of this discussion.
The problem is that you cannot see that this weird arguing by you that somehow prices perhaps being lower at some specific single point in the future than Menzie supposedly forecast somehow strengthens your main argument that Trump’s tariffs are not hurting soybean farmers that much is just dead wrong. You are the one focusing on a “single point,” not me.
I have mostly stayed out of arguing with you because you are so screamingly wrong and apparently blazingly stupid. But here I am letting myself get dragged into debating with you when you say rankly idiotic things. It is really a waste of time.
Barkley says: “Look, CoRev, I have actually worked on research projects studying the impact of climate change on agricultural production and prices. I am fully aware of the role of weather, and I have not said a word about it in this whole debate one way or the other. Indeed, I have largely stayed out of this discussion.”
So what is it climate change or weather you studied the impact of? Or like so many others do you not realize they are different?
Let me guess what your study concluded: At the fringes of the temperature optimum for crops production falls. Other than being a big DUH finding, what value did your study provide for science? That there is an optimum? Temperature and other things matter? Or did you NOT study the other things, as we have been discussing here. Only temperature and tariffs matter?
Color me unimpressed.
Google/Scholar is a wonderful tool:
Hey CoRev – some home work for you. Find the articles he wrote or co-authored, read them, and provide a summary. Do this before your next childish insult of someone who knows a lot more than you could ever grasp.
Pgl, I’ll take this conclusion: “… The greater threat comes from catastrophic discontinuities associated with crossing critical threshold levels or from non-chaotic oscillations of much greater amplitude that can emerge in coupled systems out of chaotic underlying subsystems….” as onfirmation of my plainer English prediction. Although the use of “catastrophic discontinuities” is a typical exaggeration of possible GW outcomes.
The more obvious question is why does he now not understand the “non-chaotic oscillations” of the soybean prices, Fama and efficient markets don’cha know?
BTW, you can find the referenced report yourself, since you have had the time to read them all by now.
May 15, 2019 at 11:16 am
Pgl, I’ll take this conclusion”
I see you managed to cut and paste even more word you have no clue what they mean. What’s the point CoRev? That you are a clown? Guess what – we all have known that for a long time.
You are not in Barkley’s league but like your master (Trump) you do fire off a lot of pointless and childish insults. Troll extraordinaire you are!
Actually my work on actually modeling this stuff was done during 1973-75 as part of a large multi-disciplinary team that was modeling wheat production as a function of climate (with, yes, weather being the local day to day manifestations of climate), with a climatologist, the late Reid Bryson as our leader at the Institute for Environmental Studies at the UW-Madison, where Menzie lurks about. None of that ever appeared as a journal article by me. There was one IES Working Paper that had me as one of a long list of coauthors. I was still a grad student then, and this was before I began publishing journal articles, which only began in 1978.
Yes,CoRev, indeed for a given soil type and type of wheat, there is an optimum temperature-precipitation combination, deviations from which lower output. You are right about that, although you continue to make a fool of yourself by attempting to understate the impact of Trump’s tariff policies on soybean prices.
One of the things I Iearned from Reid Bryson while working on that project was about chaos theory, which had been studied in the 1960s by the climatologist Edward Lorenz, he who coined the “butterfly effect.” That was actually before they were calling it “chaos theory,” which did not start to begin until 1975. And indeed, I have published quite a bit on chaos theory, some of it about climate and its interaction with economics, as that Google Scholar link does show.
Pgl, more dodging and weaving. We all know, due to your laziness, you didn’t look for, read and understand his report I referenced. Worse you didn’t even understand my comment.
At least I read what I thought was relevant to the discussion. Show us you did also. Nah, that’s too hard.
Pgl, read Barkley’s response. Told you! BTW, you seem to have missed the meaning of both my comment and Barkley’s conclusion.
Barkley, I find it difficult to relate chaos to highly auto-correlated temperature data. The other major climate components are also auto-correlated, so, for me, chaos is also a stretch for climate change. Where I think chaos comes in is in the hows and why’s those climate components interact, or to put it more succinctly chaos can be used to fill the huge knowledge gaps in those hows and whys.
The chaotic nature of the climate system shows up as a key reason why we cannot forecast the weather very well beyond a few days, although we can understand patterns of climate change, which happen on much longer time scales.
What I find odd is how you keep trying to come up with all sorts of odd reasons to deny the impact of Trump’s trade policies on soybean prices. If it is not making silly statements about my research, it is posing as a farmer.
Which brings me to ask. Are you really a farmer or do you just play one in the econoblogosphere, sort of the way JBH plays somebody who “studied math and econometrics in a grad program”?
Barkley, you’re worse than pgl in not reading and understanding: “What I find odd is how you keep trying to come up with all sorts of odd reasons to deny the impact of Trump’s trade policies on soybean prices.” Even in this article’s comments I have admitted SEVERAL TIMES that the US/China tariffs affected soybean prices.
If you can find a comment where I denied this fact please point it out. Apparently, what you don’t like is being questioned about or the pointing to the impact of other real world factors which have also affected prices. That is because you want total blame on Trump.
The irrationality of the TDS drives you folks to make some really outrageous claims or worse accept and believe such claims. You, in particular, can not accept the Mueller findings. Your tribalism is so out of control it is funny for outsiders to watch as y’all chase your tails blaming Trump for everything.
Your tribe’s candidate lost in 2016, and your blindness and actions since can re-elect him in 2020. Please keep it up!
Barkley, we disagree. I still think the main failure is in the gaps of knowledge re: how and why weather factors interact.
Since climate is long term statistical look weather, then, climate too is limited by the same problems.
We can use chaos theory to TRY to fill in the gaps, but chaos is a long way from the auto-correlated nature of those factors.
CoRev: I don’t know what you are talking about. As I understand it, it is extremely difficult to distinguish between some deterministic chaotic systems and truly stochastic series, including autocorrelated. We have some tests (BDS), but I’m not sure about the power/size characteristics.
BTW, did you know that data “randomly generated” by random number generators in most statistical packages are actually deterministic?
Menzie, are you serious? Can you describe any stochastic Major climate variables? Keeping it simple the surface variables are: temperature, humidity, atmospheric pressure, wind, precipitation, atmospheric particle count. There are a larger number of lesser variables.
CoRev: You use the word “stochastic”. I do not think it means what you think it means.
Sorry, CoRev, but it is Menzie who is serious here. You are not, and your attempts at trying make claims about how chaos theory plays a role in understanding climate dynamics are a combination of ignorance and stupidity. No, this is not easy stuff, but I did not bring it up. I did mention that I had been involved in modeling impacts of climate and weather on ag production, which is true, without saying a word about chaos theory. You really need to stop attempting to say anything about it and this topic.
For starters, if you do not know what the BDS test is that Menzie mentioned or how it works, you really need to STFU on this. You really are way in over your head as this is not remotely garden variety econometrics, as Menzie can attest, and which almost certainly JBH never studied, if in fact he actually did study “math and econometrics” at a grad school.
Menzie, you are on the money that there are serious significance test issues regarding BDS. The way around that involves lots of bootstrapping, lots, which has its limits. Ask Buzz if he ever shows up anymore in his office.
Oh, and just to annoy Moses, I note that not only do I know who B and D and S are, but I know all of them, although in the case of D, that would be knew, as he is dead now. It should properly be called BDSL as L helped fix it up to the point that it could finally be published, and I know him also. B is emeritus at UW, and L was at UW also for a period of time, but not recently. D visited there, but, as noted, no longer among the living. B and S are the most widely known.
Menzie, my meanings.
randomly determined; having a random probability distribution or pattern that may be analyzed statistically but may not be predicted precisely.”
Autocorrelation is a mathematical representation of the degree of similarity between a given time series and a lagged version of itself over successive time intervals.
My question was simple. “Can you describe any stochastic Major climate variables” (list followed)? Do you believe they are not auto-correlated?
Barkley, get over yourself. Yes, it was you who brought up climate and your participation in studies.
May 13, 2019 at 11:40 pm
Look, CoRev, I have actually worked on research projects studying the impact of climate change on agricultural production and prices….” I actually worked on landing man on the moon, and it has as much relevance to your bringing up your past experience to this article. NONE!
Explain, exactly, to what you objected. I even agreed that chaos theory was usable, but some how your ego got in the way. Do you believe climate science is settled? If so why the need for chaos theory?
Did you have another meaning?
Oh gag, CoRev, you are just getting worse and worse. You have repeated idiotic drivel attempting to show to Menzie and me that you know what you are talking about. Regarding chaos theory, it is essentially irrelevant to this discussion. I mentioned it after pgl did his Google Scholar link where there were these papers by me about chaos theory and climate change and economics. I then noted that my modeling work on climate and ag was not that work.
The issue is you keep trying to distract from your dumb attempts to minimize the role of Trump’s tariffs on soybean prices. Yes, you have admitted that they may have had some impact, but you have continued to try to minimize that compared to weather, along with a lot of garbage you put forward while pretending to be a farmer. As it is, you have provided no evidence or studies to provide your argument that weather was more important than Trump’s tariff policies regarding soybean prices, and when people here have pointed out that most observers have emphasized that the Trump tariffs (really the Chinese reaction) was the major factor, you have responded with a lot of dumb name calling and ranting about TDS, thereby showing you are the one suffering from it.
Hey, face the facts that even Trump and Perdue accept that his policies are the main reason for why US soybean farmers are hurting, which is why just today we have Trump ordering Perdue to shift another $20 billion over from somewhere to help the hurting soybean farmers because they know full well what you refuse to accept that it has been Trump’s policies that have been causing the soybean farmers all this pain.
Deal with it and stop trying to distract people with irrelevancies such as your completely ridiculous and irrelevant bloviations about chaos theory and climate and agricultural production.
slugs, the word was plateau. Highs and lows are a daily occurrence. Plateaus are for extended periods. As I mentioned earlier the mid-July low was the point that which, I at least, considered the time where the tariffs’ impacts had been priced in. Refer to my comment about your Fama denial. Price fluctuations after reaching the plateau can not be limited to just the tariffs, but other effects , uncertainty over the US/China trade negotiations, and other factors are readily identified.. You do remember menzie’s article on ASF?
You are wrong: “…soybean prices fell after China imposed retaliatory tariffs?”. Most of the price drops occurred months BEFORE the tariff implementations during the initial trade negotiations dance moves., threats of tariffs.
I also answered your question: ” When will soybean prices go up again? When the demand uncertainty is reduced and the tariffs and other factors change to the better.” Your response was just another TDS quip. Do you wonder when called on it?
Most of your follow-on comment is associated with your confusion over timing of the tariffs implementations.
So let me be clear. These series of articles about trade with China are focused to finely on soybeans and the tariffs. They are missing the bigger picture of US/China trade imbalance, China’s unfair trade practices and Trumps attempt to rectify them. He is a confronter, and that seems to annoy you folks partially because he has confronted you too. Soybeans are a small part portion of the industries effected by the US/China negotiations picture. Most of them have access to some level of Govt subsidies to offset their losses.
CoRev: If Trump confronted in a competent and forward-looking manner, I would welcome progress on trade talks. But so far, Trump has executed in a buffoonish manner, squandering the good-will of would-be-allies in the struggle against China. In this respect, Trump *is* a dotard.
Barkley, would you please read and understand instead of just emoting! I’ll repeat my earlier comment: “Barkley, you’re worse than pgl in not reading and understanding: “What I find odd is how you keep trying to come up with all sorts of odd reasons to deny the impact of Trump’s trade policies on soybean prices.” Even after I have admitted just the opposite several times in just this comment string.
Moreover, i agreed with you that chaos theory is a useful tool in climate studies, and yet you say: “Regarding chaos theory, it is essentially irrelevant to this discussion.” We agree. As was your insertion of your climate studies, which was not at all being discussed. We both have experience we bring to the discussion. They are different, but still real and sometimes pertinent.?
Gag! If I have admitted the tariffs impacted soybean prices, how have I minimized tariff impacts? All that is needed is to look at the historical price data to see their impacts. Your comment is just illogical. There are other factors that also impact prices! As an economist do you deny them?
What amazes me is that NO ONE has noted the one major impact. That tariffs have set a new lower price plateau. This is so obvious in the data, but none of the commenters here has even mentioned it. Fama would understand, but trained economists don’t even mention it? All you’re interested in discussing is the cause, Trump, and not the effect. That is the TDS effect, combined with the constant attack of those few still commenting who don’t ride that same, Trump hating, horse.
Deal with TDS and stop trying to distract people with irrelevancies such climate and your completely ridiculous and irrelevant bloviations about chaos theory, and discuss the basics, SUPPLY AND DEMAND, record soybean production and China’s reduced buying of US soybeans. There are sub-components to these, which you seem to ignore and even deny, that affect prices. That’s not a strong position for an economist nor an economics blog.
This is going to be my last post on this thread because you really are hopelessly ill with TDS.
If Trump’s tariffs (and the Chinese reaction to them, shame on those Chinese) are not the main problem causing low incomes for US soybean framers, then why did Trump order Sonny Perdue to move another $20 billion to aid the soybean farmers. If you cannot answer that one, you really should say nothing further.
Although you could also tell us whether or not you have actually done any farming, or has you “thinking like a farmer” just been a lying act your TDS has led you into?
CoRev What amazes me is that NO ONE has noted the one major impact. That tariffs have set a new lower price plateau. This is so obvious in the data, but none of the commenters here has even mentioned it.
Huh??? Are you trying to tell us that NO ONE noticed that soybean prices fell after China imposed retaliatory tariffs?
All you’re interested in discussing is the cause, Trump, and not the effect.
I have no idea what point you’re trying to make here. Trump’s tariffs on China are the cause of China’s retaliatory tariffs on US soybeans. The effect is lower soybean prices. What else is there to discuss about “the effect” except that Trump’s actions were the ultimate cause of those lower prices.
record soybean production and China’s reduced buying of US soybeans. There are sub-components to these, which you seem to ignore and even deny, that affect prices.
This is just bizarre. So no one is pointing out that China’s reduced buying of US soybeans affected prices??? Do you agree that China’s reduced buying of US soybeans were in retaliation to Trump’s tariffs on China’s exports? And do you agree that some of Brazil’s increased production was in response to China looking for a new source of soybean imports? You seem to be arguing in circles. As they used to say over at AngryBear many years ago, you’re “pulling a CoRev” on us.
I think I found the Menzie forecast that CoRev keeps saying was very, very wrong. Of course it is heard to tell WTF CoRev is babbling about and he refuses to provide any link whatsoever. As usual. But here goes:
This was a June 29, 2018 and Menzie was using the 6-month forward rate to suggest:
So best guess of soybean prices in January 2019 is 889, down from 1040 that was futures as of beginning of March.
I checked spot prices for January 16, 2019. Soybean prices were $8.93. Oh my – they were 4 CENTS higher than the futures price, which Menzie used for his prediction.
Yes CoRev wins! Menzie and futures markets have NO clue.
Pgl can’t even follow logic when the dates are provide: “it was provided, 7/15/2018?” in my comment. To cease your embarrassing performance, Menzie’s prediction: http://econbrowser.com/archives/2018/07/interpreting-evidence-on-forec
Soybean futures are remarkably good predictors of future spot prices of soybeans. Hence, my best guess of soybean prices one year from today is 872. …”
Pgl, I hope your research techniques are better in your work life than in your blog life. You continuously cover yourself in shame.
BTW, Barkley get it.
CoRev, please stop. It is sooo embarrasing. Your point is wrong. Your conclusions are wrong. Soybean prices have not recovered. Farmers are taking a hit. Agricultural commodities cannot simply be “stored” with no wastage while we wait for this trade war to end.
Dave please think instead of emoting: “Your conclusions are wrong.Soybean prices have not recovered. Farmers are taking a hit.” Really? Prices at the low after tariffs were implemented were, 9/18/2018 $8.22 then by 2/4/2019 they peaked at $9.22. Since, however, they have gone down, yesterday to close at $7.98. so they peaked up ~12% and are currently down by ~2.9% from that low. https://markets.businessinsider.com/commodities/soybeans-price
Your TDS causes you to ignore that price rise, but focus only on the current low without thinking about why prices are moving. (Which for over a year I have tried to explain.) Some how you think they will stay there. When historically they change, sometimes dramatically in a short time frame. Why are you denying history?
CoRev Normally the seasonality effect for soybeans sees a price peak in July and a price nadir during the winter. What we actually saw was a sharp drop in July prices that was almost entirely due to the Chinese tariffs. Prices recovered somewhat in late winter due to expectations that Trump’s trade war was cooling and an agreement was near. Trump and his minions were regularly telling us that “peace is at hand” in the trade war. (You foolishly voted for Nixon twice, so I thought you’d appreciate that “peace is at hand” reference.) Normally we would expect to see rising soybean prices in May, but that’s not what’s happening. The major new news is the escalation in Trump’s trade war and the collapse of a previously expected resolution.
And as several posters have noted, you don’t seem to understand the Efficient Market Hypothesis in either of its forms; i.e., strong EMH or weak EMH. In July 2018 the new information was the Chinese tariffs. In late winter 2018/2019 that July 2018 information was already incorporated into the price, so the price bump was responding to the new late winter (fake) news concerning the expected end of the tariffs. In May 2019 last winter’s fake news was incorporated into the price and the new news was an escalation in the trade war. That doesn’t mean there weren’t additional news events over the last year that might have influenced prices up-and-down, but those events all had relatively small effects and represented the kind of information that tends to be well captured in historical data.
2slugs now adds to the list of things that effect soybean prices. Why am I NOT surprised we agree, and you didn’t realize that fact? We agree: “…that July 2018 information was already incorporated into the price, …” then other things happened some good and some not, and they were also incorporated into the price. Amazing, isn’t it?
Your grasp of the obvious amazes me, fer shur.
“information was already incorporated into the price”.
2slug tried to make a point that comes straight out of Fama (1970). But check out his words that you tried to mock. #1 – you have no clue what he means by information available at the time of the forecast. Which of course is the essence of an event study under the Efficient Markets Hypothesis. You know – we should stop expecting you to grasp any of these basic terms. From here on out we need to do this in terms of emojis so the dumbest troll ever can grasp it!
Pgl, quit it. The embarrassment is too much even for New York. you can’t seem to follow logic in a conversation. You “…he means by information available at the time of the forecast….” and 2slugs: “…that July 2018 information was already incorporated into the price, …”. What part of the event and incorporated prices confuses you. This CURRENT ARTICLE is about a new pricing structure AND A NEW SET OF EVENTS causing it.
Had this been just few articles, then the tariffs , a singular event has already been priced in, as both 2slugs and I agree. The only one questioning or confused about that seems to be you. What even/factors caused all those other price changes since the tariff implementations?
Hint, I’ve provided a list several times now. You need to get out of New York more.
CoRev: your comment would have more credence if you at all understood what an event study was.
Menzie, The event you have been focused has been the implementation of the US/China tariffs on soybean prices 2slugs and I agree that by July the tariffs’ impact on prices had been implemented. In 2slugs words: “What we actually saw was a sharp drop in July prices that was almost entirely due to the Chinese tariffs.” (The important part of his comment) I now realize I grabbed the wrong quote.
Pgl is confused when he tries to talk about 2slugs comment. His limited quote of 2slugs: ““information was already incorporated into the price”. is exactly what we all agree. H then goes on to say: “#1 – you have no clue what he means by information available at the time of the forecast.” AFAIK no one said that but pgl here. Or his “he” is ill used in the sentence. Who is he?
BTW, his inclusion of the event study is not supported. To date I have not seen the results of an event study, but I have seen the results and comments appropriate to an impact study. If you did one, and listed the results here, could you provide the links to the article or comment(s).
Now you join in with your snark. Why? Doing so shows you have not followed the logic of this short comment string.
Get what, CoRev? Has not your main point been precisely that Trump’s tariffs on Chinese imports are not the main reason that soybean prices fell and have remained down? It has been due to weather in Braxil, and, wow, a whole bunch of other things that only you are paying precisely the right amount of attention to, right?
All this carrying on about who is forecasting exactly what the price will be within four cents months ahead of time is just a bunch of vacuous horse manure, with your comments along such lines prime examples.
Oh, and yet again, do you not get it that your jumping up and down and bragging that soybean prices might be lower than previously forecast just makes you look like an utter fool?
You’re being too kind: the FORECAST makes him look like an utter fool?
“Has not your main point been precisely that Trump’s tariffs on Chinese imports are not the main reason that soybean prices fell and have remained down? It has been due to weather in Braxil, and, wow, a whole bunch of other things that only you are paying precisely the right amount of attention to, right?”
Weather in Brazil increasing its supply of soybeans and thereby lowering soybean prices. That is the CoRev magic explanation? One wee problem – Brazilian soybeans are selling for much higher prices. Of course that might be because the Chinese are buying their soybeans and not ours. But shhhh – don’t tell CoRev and this fact might finally blow up his electrical circuits. Russian bots are so messy when they explode!
Lord – the Russian bot babbles on and on without a coherent point. Someone should pull the plug on you.
perhaps soy beans will become baked beans
Some might even say at this point that soybeans have even been refried. It curd happen. It very well curd happen. But it’s bean said many times, “Woulda Curda Shoulda”. Remember that John Lennon and Yoko said we should give peas a chance.
[ if anyone fails to cringe when reading the above please notify me, as I will have fallen short in my goal ]
I am recalling living next to a field in Indiana, one year corn, another soy bean and a third winter wheat, I cannot recall the order…….Reagan was president…..
Closing cash grain bids offered to producers as of 1:30 p.m.
Dollars per bushel, delivered to Interior Iowa Country Elevators.
US 2 Yellow Corn Prices were mostly 5 cents higher for a state average of 3.30.
US 1 Yellow Soybean Prices were mostly 6 cents lower for a state average of 7.18.
Iowa Regions #2 Yellow Corn #1 Yellow Soybeans
Range Avg Range Avg
Northwest 3.29 – 3.56 3.38 7.12 – 7.23 7.15
North Central 3.16 – 3.33 3.28 7.02 – 7.24 7.14
Northeast 3.18 – 3.30 3.24 7.00 – 7.33 7.15
Southwest 3.29 – 3.40 3.36 7.13 – 7.38 7.25
South Central 3.19 – 3.46 3.28 7.12 – 7.44 7.21
Southeast 3.12 – 3.39 3.24 7.15 – 7.36 7.25
Corn basis to STATE AVERAGE PRICE for the CBOT JULY contract -.26
Soybean basis to STATE AVERAGE PRICE for the CBOT JULY contract -.84
Iowa statewide average price for soybeans: $7.18/bushel. The WINNING continues.
Hey kids, never say Uncle Moses sometimes didn’t make things easier for you.
It is the FULL program people. And you have my personal promise there will be no Lifeline commercials with an old lady saying she has fallen and can’t get up. Plus if you each of you send $10 cash to my home address I will personally edit out the Tom Selleck advert for reverse mortgages from the PBS show. That offer is only for a limited time, and….. you must act now. I may or probably not hold a raffle later for some recyclable materials I have strewn around the house, but probably not for the first 5 callers and probably not for any caller after the first 5 callers. Call 1-800-CoRevMunchesHeinie again that’s 1-800-CoRevMunchesHeinie and most likely I will give you our grand prize of nothing. That’s right!!!! Call now and you get nothing!!!!
Also, we promise never to give personal material to Lifelock. Why would I give my personal info to Lifelock, what do I look like a damned IDIOT??
CoRev claims he has read Fama but I doubt it as he clearly has no idea what an event study is, which our host has patiently explained in terms of what happened in July 2018 – the tariff wars smacked U.S. soybean producers. Here is an interesting paper on point by economists at the Department of Agricultural and Consumer Economics, University of Illinois (September 26, 2018):
“Evaluating Potential Long-Run Impacts of Chinese Tariff on US Soybeans”
This paper has lots of information and sources but permit me to quote one key portion:
In July 2018, Soybean prices in the U.S. fell to the lowest point in almost a decade, lowest since March 2009 (Parkin, July 2, 2018). In Illinois, soybean prices have declined $2.50 per bushel from a high of $10.34 to a low of $7.84 in the middle of July (farmdoc daily, August 16, 2018).
The knock-on effect from weaker soybean prices also impacts other grain products. Corn prices have fluctuated over the last five months from a high of $3.78 per bushel down to a low of $3.09. The financial hit from a lower soybean price could push farmers away from soybeans and back toward traditional crops of choice, like corn and cotton (Patterson, July 9, 2018).
The reason for the price drop is mixed. Soy futures have been in decline for years due to large harvests in Brazil and the U.S., the two largest producers. In the 2018 crop year, production of corn and soybeans in Argentina and Brazil is expected to increase by 17% and 13%, respectively (farmdoc daily, August 16, 2018). Figure 1 provides a comparison between U.S. and Brazilian soybean prices and it indicates that the Chinese tariff is having a negative impact on U.S. soybean prices. Since April 2018, the U.S. soybean price is on the decline while the Brazil price increases.
Along with the low soybean price in the U.S. is a record $2 price spread (shown as the gray line in Figure 1), which is very close to the 25% price difference that would be predicted by the tariff. Soy prices are around $8.38 a bushel in the U.S. and over $10.50 per bushel in Brazil (Mano, Sep. 10, 2018). (Figure 1). This price divergence between the worlds’ two largest soybean producers, U.S. and Brazil, reflects a potential shift in global agricultural trade flow.”
Yes – lots of things may affect soybean prices but the big EVENT during July 2018 was China’s decision to place a 25% tariff on U.S. soybeans but not on soybeans from Brazil. What happened when this happened? Prices ROSE in Brazil but plummeted in the U.S. What other event at the time could have been the cause of this divergence in soybean prices? With all of his inconsistent and incoherent babbling – CoRev clearly has no clue. Of course CoRev never grasped the concept of event studies!
Pgl again has failed to read and understand what he referenced and presented. From his own quote from that reference: “…The reason for the price drop is mixed. Soy futures have been in decline for years due to large harvests in Brazil and the U.S., the two largest producers. In the 2018 crop year, production of corn and soybeans in Argentina and Brazil is expected to increase by 17% and 13%, respectively (farmdoc daily, August 16, 2018). Soy futures have been in decline for yearsdue to large harvests in Brazil and the U.S. the two largest producers. …” He then can not understand the impacts of demand change during these early months of the Chinese tariffs.
His memory is also wanting. How many times have I admitted that the tariffs affected soybean prices in the US before he remembers it? He also can not admit, even when referencing sources that The reason for the price drop is mixed. Mixed means NOT ONLY DUE TO THE TARIFFS. I’ve provided a list of several major factors, and Menzie has reported in several articles other reasons.
I wish the world was as simple as you seem to think it is, but even Fama thought otherwise. Have the tariffs been lifted? No! Are prices reflecting this? Yes! When will soybean prices go up again? When the demand uncertainty is reduced and the tariffs and other factors change to the better.
Why do the TSD afflicted not understand logic?
Oh yes – we knew you would cherry pick what you wanted to see. Of course this is exactly like you. Ignore everything else except for what Trump tells you to read. The true mark of a Trumpian troll. Of course the rest of us can read the entire article. Too bad for you but there is hope. Have AG Barr imposed an injunction at all reporting except what Herr Trump wants. And yea – when the real economists at the Ag Department leave, you can take over and spread the usual Trumpian trash!
Pgl, my comment was based JUST your quoted section of the article confirming you don’t read and understand your own material.
Please stop. Between AOC and you, New Yorkers are becoming the laughing stock of the nation. Of course New York’s political leaders are setting the example for your ineptitude.
Lord – you are either the dumbest person on the planet or just your standard lying troll. Yes the fall from $15 to $10 from 2014 to early 2018 was due to other factors. The ISSUE has always been what happened in July 2018. On this issue – the facts are clear, which is why you have to waste all of our time with millions of words that range from utter gibberish to outright lies.
Pgl, sigh, quit trying to make points which you do not understand. ” Yes the fall from $15 to $10 from 2014 to early 2018 was due to other factors. The ISSUE has always been what happened in July 2018.” On July 15 2018 Menzie made a hard prediction.
The lead up issue to that prediction was the impacts of soybean tariffs and tariff threats. If you were paying attention you would know what month that occurred.
What amazes me is the time it took for the prices to adjust. Had you been paying attention you would know that the post tariff low happened in July 2018. What you also seem to not understand is that we just went through another, lower than the July 2018. Just like in 2018, when the prices largely recovered from that low within a couple of weeks, we are seeing prices recovering again. What we will not see is a full recovery for the reasons I stated earlier.
Lord – you must be the dumbest person on the planet or just your standard lying troll if you didn’t understand the fundamental timing for price impact factors of this whole long discussion.
May 15, 2019 at 11:41 am
Pgl, sigh, quit trying to make points which you do not understand. ”
I see CoRev has mastered the old “I’m rubber and you’re glue” trick. This was followed by his usual style of cutting and pasting words he does not understand as he accuses those of us who make the mistake of patiently trying to explain basics to him.
Look – it is clear CoRev is nothing but a troll who just wants to argue nonsense all the live long day. I’m down with this stupid lying clown. Lots of luck to the rest of those who actually try to engage with his insanity.
“How many times have I admitted that the tariffs affected soybean prices in the US before he remembers it?”
Really. I guess it was that other CoRev who said soybean prices would start to rise this year. Huh – I guess beling below $8 a bushel is seen as an increase to you as you are standing on your head reading all those charts!
Read just this line if you will:
“Along with the low soybean price in the U.S. is a record $2 price spread (shown as the gray line in Figure 1), which is very close to the 25% price difference that would be predicted by the tariff. Soy prices are around $8.38 a bushel in the U.S. and over $10.50 per bushel in Brazil (Mano, Sep. 10, 2018). (Figure 1). This price divergence between the worlds’ two largest soybean producers, U.S. and Brazil, reflects a potential shift in global agricultural trade flow.”
If world supplies increasing were the dominant factor, prices for Brazilian soybean prices would have also declined. But they increased. The spread between Brazilian and U.S. soybean prices matches the tariffs.
Do we need to draw this in crayon for you. Or maybe you can go out to the sand box and have the 2 year olds help you understand it by drawing appropriate pictures in the sand!
Pgl, most economists understand the terms supply AND DEMAND! You need to go back and complain to your instructors, because they failed you miserably. Or, maybe they didn’t and it just your failure.
“most economists understand the terms supply AND DEMAND!”
We do but you do not. Repeat after me – shift of a supply curve along a demand curve versus shift of a demand curve along a supply curve. Oh I’m sorry – this is WAY above your head. Now go back to those 2 year olds who are laughing at you right now and beg them to explain this to you!
CoRev When will soybean prices go up again? When the demand uncertainty is reduced and the tariffs and other factors change to the better.
In other words, when Trump is booted out of office and not until then.
Soy futures have been in decline for years due to large harvests in Brazil and the U.S.
So do you think commodity traders were unaware of this long run trend and the growing size of Brazilian harvests? Wouldn’t that well known decline have already been incorporated into soybean futures long before Trump started his trade war?
Last summer you were confident that the Chinese would cave and they would lift their tariffs on soybeans. You made quite a point of how farmers could store soybeans as a hedging strategy until that happened, which you assured us would happen soon. Howz that working out? We both agreed that by late winter row crop farmers would have to commit to how many acres they would plant. Howz that working out for row crop farmers? Now Trump wants the rest of us to pony up yet another $15B in his “No Farmer Left Behind” program for farmers who were stupid enough to vote for him.
You should worry less about my perceived TDS and worry more about your own Trump Bewitchment Syndrome. You really would support him even if he shot someone in the middle of 5th Avenue.
“So do you think”? Stop right there – it is a proven fact that CoRev is incapable of thinking. So don’t ask too much of the poor lad!
OK, CoRev, I shall waste a bit more time with you. It is because you have invoked “logic.” Sorry, but this is a matter of facts, not logic (and if you wish to argue that, I shall annoy Moses by name dropping all the famous logicians I have known, starting with my late father). You do not have them.
So now here you are confessing that, gosh, you recognize that Trump’s tariffs might play a role in what the price of soybeans might be, along with a whole of other things including weather but not just it. But the bottom line of all this remains that initially you dissed the role of Trump’s tariffs and then you stupidly bought in to his line that trade wars are “easy to win” and that all this would be over quickly thanks to the brilliant deal-making ability of our tradewarmeister, which has in fact so far panned out big time, and in fact soybean prices have fallen hard, especially since just recently Trump has upped the ante in his trad e war with China, but, gosh, he has announced more financial aid for all those soybean farmers in Iowa and neighboring states who have been, and will be more, by his actions towards China.
2slugs and Barkley, yup, an increased incentive is needed for farmers. They have been hurt this past year in this long term, ongoing trade war with China.
You guys seem to think this trade war just began. What has changed is the US, under Trump, has changed to offensive tactics. Before China had been the aggressor while aggressively DEFENDING its internal markets from outsiders. There’s a description for that in economics trade literature. For some reason you don’t want to consider it. Barkley, instead of name dropping, show the logic of that omitted consideration.
Also, Barkley, please find and quote my comment supporting your poor memory: “then you stupidly bought in to his line that trade wars are “easy to win”. I will admit that if US/China talks end without an agreement that we will have graduated from a trade conflict to a trade war, and that is a different stance from yours and most liberals here.
I believe this 2018 article well defines what is going on: http://powerofideas.milkeninstitute.org/asia-summit/2018/trade-is-politics-by-another-means-or-it-is-war-by-another-means-with-apologies-to-carl-von-clausewitz
OK – they were winning the trade war before Trump countered. Only problem is that the Trump counter attack was like shooting one’s own troops in the foot. Trump is the most incompetent trade warrior in the history of time. Then again look at who he chooses as economics advisers. Village idiots like Kudlow and Wilbur Ross who know almost NOTHING about economics. But I will say this in their defense – they clearly know more than you do!
CoRev Please open up an econ textbook and learn something about international trade. Almost everything you think you know about international trade is wrong. It’s very counter-intuitive, which is why the average voter almost always gets it wrong.
an increased incentive is needed for farmers.
Why? Because without a subsidy they might not vote for Trump in 2020? Why should we enable stupid behavior?
You guys seem to think this trade war just began.
That’s because it just did last summer.
What has changed is the US, under Trump, has changed to offensive tactics.
Trump’s “tactics” make about as much sense as bombing Mexico after Japan attacks Pearl Harbor. There were legitimate concerns about some of China’s practices, but launching a tit-for-tat tariff war isn’t a constructive approach. Instead of working to ameliorate the problem Trump’s tariffs have only served to make the problems worse and less likely to be solved in a way that’s favorable to US interests.
Before China had been the aggressor while aggressively DEFENDING its internal markets from outsiders.
That’s primarily China’s problem, not ours. You think like a mercantilist (go look it up). The consequences of protectionist policies are primarily borne by the nation doing the protecting. That’s why Trump’s tariffs against China hurt US consumers, and that’s why China’s retaliatory tariffs against the US primarily hurt Chinese consumers. As a purely rational economic response to Trump’s tariffs, China’s best move would be to do nothing and not respond in kind. But politically that’s not possible so the Chinese are suffering unnecessary economic losses by imposing tariffs on US soybeans. The point of Menzie’s payoff matrix is to show the political incentives and political costs that Trump and Xi face. Economically China is probably in a weaker position; but politically Xi is in a stronger position because he doesn’t have to worry about a 2020 re-election bid…unless of course Trump decides we don’t need to bother with those pesky 2020 elections.
The proper way to address China’s misbehavior over IP theft and other issues is through multilateral agreements like TPP. Yes, I know that kind of brainiac approach to problem solving doesn’t appeal to the typical Trump voter who grew up only understanding the politics of the playground, but it’s still the best approach.
2slugs, how much your TDS affects your thinking is extraordinarily obvious. Your answer to my statment: “an increased incentive is needed for farmers.
Why? Because without a subsidy they might not vote for Trump in 2020?Why should we enable stupid behavior?”
No! they are needed to offset the Chinese subsidies and other actions to its farmers and feed producers.
Also: “You guys seem to think this trade war just began.
That’s because it just did last summer.” Confirming my statement while TOTALLY ignoring the history of US/China trade conflicts is just another indication of you TDS.
The remainder of your response was just more ill formed TDS-driven unrelated analogies.
CoRev No! they are needed to offset the Chinese subsidies and other actions to its farmers and feed producers.
This is nuts. Whether or not the Chinese subsidize their farmers is not a reason why we should subsidize our farmers. In fact, it’s a good reason why we should take advantage of Chinese stupidity and enjoy the windfall. I’m all for the Chinese paying for my consumption. Will it hurt American farmers? Sure, but so what? Farmers are not entitled to a privileged life anymore than anyone else is. Trade creates lots of winners and lots of losers. The usual textbook solution is to use some of the gains and redirect them towards other productive endeavors. And you still haven’t told us why we should be subsidizing stupid voters who knew (or at least should have known) that Trump was going to start a trade war with China.
TOTALLY ignoring the history of US/China trade conflicts is just another indication of you TDS.
No one is ignoring the fact that in the past China has sometimes been a bad actor. They steal IP. They produce counterfeit parts. They strongarm foreign firms. They subsidize certain sectors. In the past they undervalued their currency. But those are not reasons for escalating things to a trade war. And tariffs don’t address the causes of those bad actions. Tariffs appeal to clueless voters who don’t understand how tariffs actually work. If Trump is worried about exchange rates, then maybe he should have thought more about raising taxes and cutting the budget deficit. Trade deficits are a macroeconomic phenomenon, not a bilateral trading arrangement. If Trump is worried about IP theft, then maybe he should have signed onto TPP. It isn’t TDS to point out that Trump’s actions are counter-productive and go against standard textbook economics.
ill formed TDS-driven unrelated analogies.
So TPP and multilateral approaches are “TDS-driven unrelated analogies”? You really shouldn’t be allowed to vote. You’re a menace to the electorate. It’s bad enough that you were a diehard Nixon supporter right down to the bitter end, but even after all these years you still support incompetents like Trump. Funeral by funeral.
Did you read this article you linked to, CoRev? It talks about trade conflict coming in the future, with Trump getting it going with his tariffs. It does not talk about there having been a trade war or conflict already going on. This Hintze guy, an apparently pro-Trump businessman presumably from UK as he is a “Sir,” then proceeds to prove how worthless his commentary is by forecasting that a deal “to deal with the trade imbalance” would be in place in time for the 2018 midterm elections. Yeah, another sucker like you, Corev, for the Trump fantasy of how “easy” it is to win these trade wars.
Oh, and the real Trump Derangement Syndrome is all you fans of his believing piles of his lies and even repeating them in public. Pretty deranged, I would say.
Barkley asks if I read my reference. Indeed I did. You are mostly correct in that he talks about future impacts. Did you note the time frame? Hintze’s views were common outside the Democrats tribal views, even outside the US.
I want to highlight his conclusion: “The rivalry between the U.S. and China is one of the defining issues of our day. It will shape the world we live in, and it is in Asia’s and other emerging market economies and capital markets where its greatest effects will be felt.” To clarify, which economies have grown and which have contracted?
Pgl there was a challenge for you and you again failed.
The only thing I see not addressed in all your tireless and chidish babble was your call for an “impact” study. Like Menzie said – you still have no clue what an event study is.
THE relevant thing in all of this which your incessant whining tries to obscure is what happened in July 2018 that drove down U.S. soybean prices. Menzie’s point from the beginning is that the event was the Trump trade war and China’s imposition of a 25% tariff.
Now to be fair – they MAY have been other significant events in theory. But in the real world what was the big event that drove up Brazilian soybean price but drove down US soybean prices. We have asked you to discuss this hundreds of times and each time you duck like the coward and clown you are.
Yes you chirp a bunch of intellectual garbage in the meantime as you are incapable of addressing the relevant issue. Like I said – you are nothing more than a dishonest troll. And like I also said – I’m not feeding your worthless trolling again.
“… I’m not feeding your worthless trolling again.” BS. you can not resist being a troll.
One strategy used by pgl, the in-house senior TROLL, is to blame others for trolling. It might be a successful strategy, if he wasn’t so often wrong, inaccurate, unable to read and and understand comments, or too lazy to do the needed research to answer. Even this comment is indicative of these personal issues. “THE relevant thing in all of this which your incessant whining tries to obscure is what happened in July 2018 that drove down U.S. soybean prices…. the event was the Trump trade war and China’s imposition of a 25% tariff. ”
He has been consistently confused about the implementation date of Trump trade war and China’s imposition of a 25% tariff. Even after I told him what happened in July US soybean low price and Menzie’s prediction) and challenging him to research the key dates for Trump trade war and China’s imposition of a 25% tariff. THEY DID NOT HAPPEN IN JULY!
A thinking man would have taken that hint, but pgl’s laziness over rode his brain. You’d think the hint would be enough to not repeat the same mistake, but here is he again repeating it.
LOOK UP THE DATES. At least learn how to do minimal research! Quit making a fool of yourself.
I got an email from one of CoRev’s 3-year old sand box buddies who wants to clarify the utter confusion in CoRev’s mixed up little mind. This 3-year old points out that world soybean prices had declined from $15 a bushel to $10 a bushel over the 3-year period starting in the spring of 2015 to the spring of 2018. All before the Trump trade war and those tariffs imposed by China. Fair enough.
The 3-year old continued, the big EVENT (who knew 3-year olds read and understand Fama) in July 2018 was the tariffs which CoRev wants us to believe did not lower U.S. soybean prices. Funny thing the 3-year old notes is that Brazilian soybean prices rose a bit as U.S. soybean prices have declined substantially. As the 3-year old notes “case closed”. One smart 3-year old!
This is a 14 minute video. To get an idea of what is going on here, imagine what people would say if Rachel Maddow, Judy Woodruff, Tom Brokaw, Scott Pelley, Dan Rather etc were politically stumping for Barack Obama?? The screaming and gnashing of teeth that would have ensued. Rush Limbaugh and Sean Hannity do it and it’s just like we just ate a large piece of apple pie.
Ugggh! Now that I just lost 14 minutes of my life, I need to take a shower to get the filth of Sean Hannity face off of me.
Menzie, with the Govt subsidy, what would today’s, 5/15/2019 at 11:20AM, return per bushel be if he chose to sell using the commodities contract price?
Gee CoRev – do some real research. How does this alleged subsidy translate into dollars per bushel? We’ll wait until you take your shoes off so you can count past 10!
CoRev Why should taxpayers subsidize farmers who voted for Trump? We know the crass political rationale, but what’s the economic rationale?
The rational is easy. If Trump loses in 2020, CoRev becomes unemployed. And we know he is unemployable in the private sector. So if Trump is no longer President, we have to subsidize this internet troll for the rest of his life!
Pgl, I know what the subsidy price was and assume the newest subsidy will be similar. Why don’t you look it up. Even a New Yorker should be able to do that simple math and research to develop the price.
2slugs, what a crass and unfeeling question: “Why should taxpayers subsidize farmers who voted for Trump?” For the same reason the taxpayers subsidize the Hillary voters. They need it, and the taxpayers approved it. What’s the economic rationale for those voters? BTW, which class of voters do you think are more critical to the economy? One class can be considered producers.
You need to practice pgl’s trolling moves.
CoRev Ah…it’s finally out there. Scratch hard enough and you’ll coax CoRev’s inner racist to come out of hiding. It’s always been there, but sometimes you have to work a little harder to get it to come out in the open.
One class can be considered producers.
And other classes don’t produce? In any event, overproducing is just as bad as underproducing.
For the same reason the taxpayers subsidize the Hillary voters. They need it,
If you by “subsidize” you mean stuff like food stamps and healthcare, then I would argue that those kinds of economic transfers at least have the benefit of being morally defensible. And transfers don’t significantly hurt the overall economy, unlike tariffs and subsidies to farmers, which allow them to continue to overproduce and consume input resources for crops that will only rot.
2slugs, only a liberal could equate “voter class” to racism while attacking Trump voters/class/tribe/group/contingent/etc. with prejudice, discrimination, and antagonism. Only a liberal can add race to voters.
Admittedly the liberal mind is a wonder. Only one set of voters, your tribe’s, best deserves Govt entitlements. I guess next you’ll want to take their SS benefits as they, as producers, can do without them.
What a horribly angry and discriminating comment. You’ve out done yourself with tribalism.
OK he is indeed a racist. But let’s be fair – he is also too stupid to answer even the most basic questions. So without government dole – CoRev would starve to death. So morality requires that we subsidize this worthless racist troll.
“Pgl, I know what the subsidy price was and assume the newest subsidy will be similar.”
If you know this – why are you so incredibly incapable of answering the simple question. Bye, bye worthless troll as I’m done with your lying and chirping.
Pgl asks a good question: “If you know this – why are you so incredibly incapable of answering the simple question. (? sic) To challenge you and Menzie to see if you had even the fundamental knowledge after these many articles.
I know you can’t remember your own comment nor will look them up, so I’ll make it easy for you:
May 15, 2019 at 8:31 am
Menzie, with the Govt subsidy, what would today’s, 5/15/2019 at 11:20AM, return per bushel be if he chose to sell using the commodities contract price?
May 15, 2019 at 9:46 am
Gee CoRev – do some real research. How does this alleged subsidy translate into dollars per bushel? We’ll wait until you take your shoes off so you can count past 10!”
Notice, my use of “return” not price. Had you even the basic knowledge you would have known that taking my shoes off was unnecessary.
CoRev I know what the subsidy price was and assume the newest subsidy will be similar.
Or not. The Dept of Agriculture just said that the $15B “No Farmer Left Behind” bailout program will use a different formula than was used last time.
Pgl, you might be interested to know that today’s soybean price at 01:48 is $8.36. Up for the previous 5/10/2019 low of $8.91. If you were a farmer without immediate need to sell, would you be selling today or waiting for this price surge to peak?
Oops, that was supposed to be $7.91. BTW, at 2:20 the3 price is $8.41.
CoRev It’s not clear which soybean price you’re talking about. Cash sale prices depend upon the region. In the prime soybean growing states of Iowa and Illinois today’s prices closed at around $7.58 (Iowa) and in the $7.75 range for Illinois. Soybean prices in both states have ticked up a bit due to reports that planting is far behind the average…especially Illinois with only 11% planted due to the cold soil temps and wet weather.
Politically Illinois is a blue state so what happens to farmers won’t make much difference one way or the other. But Iowa is a battleground state and the low soybean prices could be political issue.
I usually use the daily spot price: https://markets.businessinsider.com/commodities/soybeans-price
Today’s price ended at $8.41
Falling again, down to $8,27, although indeed for the moment above $8.00.
Nevertheless, you need to explain why Trump has ordered Sonny Perdue to move $20 billion from other accounts to help out the soybean farners, CoRev, not to mention come clean on your actual history (ot not) as a farmer, please. Maybe there is more to it than your supposed expertise on chaos theory.
Barkley, now down to $8.24. Latest check $8.21.
You’re now attempting to do what you’ve done with others by shifting to attention to nonsensical points of schooling or background. It’s actually none of your business. If you read through my comments you would have a feel for my background farming and otherwise. I will admit that I have grown up and lived in farming country most of my life, worked on farms and many family members are farmers or worked in the agriculture and agriculture finance industry. As 2slugs has surmised I am a hobby farmer. You seem to think being a farmer is critical to having knowledge about it.
So let me ask you how much farming have you done? If you have done none or little farming then what qualifies you to discuss it at the micro level, the farmers’ eyes? Which I have done since the beginning last Spring. Incidentally, yes, Trump’s tariffs (and the Chinese reaction to them, shame on those Chinese) are the main problem causing low incomes for US soybean framers in 2018-19. The ~$20B is needed to try to make them whole for this period. It looks like weather, again, will be the major driver to the soybean farmers’ upper Midwest, primary soybean growing area, crop selection and income in crop year 2019-20. If the cold and wet conditions don’t change soon, growing options and production will be severely diminished along with income. Can/will you admit that is true?
Why do you try to glorify your chaos theory background? You’ve already admitted it is irrelevant. If you want to play that game, I have a medallion struck from a piece of the Apollo 11 moon lander and a vat of aluminum that never left the planet. Yes, I’m as proud of that as you are of your writings. So what?
CoRev weather, again, will be the major driver to the soybean farmers’ upper Midwest, primary soybean growing area, crop selection and income in crop year 2019-20.
Cold and wet weather could very likely hurt farm income, but it won’t hurt soybean prices.
yes, Trump’s tariffs (and the Chinese reaction to them, shame on those Chinese) are the main problem causing low incomes for US soybean framers in 2018-19. The ~$20B is needed to try to make them whole for this period.
Shame on Trump for starting the trade war.
You can make a good economic case (viz., the “cobweb” model) for price supports due to weather events, but I can’t think of any good reason why farmers should be shielded (or made whole) because of Trump’s trade war, especially since farmers overwhelmingly supported Trump and his trade war. In 2016 Trump was quite upfront about launching a trade war. He bragged about it and called himself “Tariff Man.” So any farmer who didn’t see this coming has no excuse.
For the record, CoRev, I have never been a farmer, but my very oldest friend whom I have frequent conversations with is. Congratulatons on not lying about being a hobby farmer.
2slugs, we’ll have to agree to disagree. One of the early comments last Spring was, (paraphrased) what better time to take on China when our economy is strong and growing and theirs is decelerating or at least the acceleration is slowing?
CoRev One of the early comments last Spring was, (paraphrased) what better time to take on China when our economy is strong and growing and theirs is decelerating or at least the acceleration is slowing?
Actually, that’s probably the worst time to impose tariffs. It’s never a good time to impose tariffs, but if you’re going to do it, then you’d want to do it when your domestic economy is weak and the rest of the global economy is strong. The benefits of free trade are greatest when your domestic economy is operating a full employment. If you understood Ricardo’s simple wine & cloth model then this would be obvious.
2slugbaits: Concur. Expenditure switching via tariffs probably hardest to effect when aggregate demand alreasy exceeds full-employment levels.
Price fluctuations after reaching the plateau can not be limited to just the tariffs, but other effects
No one has ever said that there haven’t been other factors contributing to normal price fluctuations. The main point has always been that the tariffs are the principal and dominant reason for today’s lower prices. You keep trying to divert the discussion by pretending that people are arguing something that they’re not.
Trump announced tariffs against Chinese exports in early July 2018. Soybean prices plunged shortly afterwards. China then formally announced tariffs against US soybeans in early August 2018. If you really understood Fama and the EMH, as you claim (or at least pretend), then you would know that markets are forward looking and knew that China would retaliate with its own tariffs. The Chinese were very open about this long before they formally announced their own tariffs. The “event” is with Trump’s announcement, not China’s announcement a month later.
Since Trump is the source of demand uncertainty, I don’t think there’s any TDS going on here. It’s perfectly rational. Indeed, soybean futures show a pretty good uptick after Jan 2021. Coincidence?
No, most of the confusion is over your continued misunderstanding of how event studies work within an EMH framework of forward looking agents.
They are missing the bigger picture of US/China trade imbalance, China’s unfair trade practices and Trumps attempt to rectify them. He is a confronter,
Trump is a confronter, but he’s also an incompetent bungler. He does not understand international trade. He thinks China pays for tariffs. He and his supporters mistakenly believe that imposing tariffs is an effective way to deal with the legitimate issues concerning China. He doesn’t understand that China’s subsidies primarily hurt the Chinese, not the US. He doesn’t understand the connection between his budget deficits and the exchange rates. He is obsessed with bilateral trade balances. He doesn’t understand game theory. He’s also a horrible businessman whose motto appears to be “buy high, sell low.” His approach to trade relations mirrors the playground bully; all brawn & bluster, no brains. What you see with Trump is movement substituting for action.
Bound To Happen: Headline in Sac Bee/McClatchy afternoon update
“Fruit and Nut Farmers in California
plead for Trump tariff relief”
“California fruit and nut farmers want the USDA to provide some relief to more farm industries that are affected by the Trump administration’s trade war with China, especially those that employ thousands of people in the Central Valley.
They are asking USDA Secretary Sonny Perdue to make more specialty crops such as grapes and walnuts, eligible for a trade relief program that gives some farmers direct payments to offset losses to their income.
….An estimated 287,000 people in California work in industries exposed to being affected by Chinese tariffs on a range of US exports to China–by far the largest amount of employees at risk in the nation, according to…Brookings Institution.”
Well, well, well. Shouldn’t we expect to hear from congressional reps whose districts will suffer plenty like “My Kevin” McCarthy, and his next door pal, the dimwit Devin Nunes?
Right. I’m not holding my breath either.
2slugs, please do due diligence. This is not true: “Trump announced tariffs against Chinese exports in early July 2018. ‘ Trump and China ANNOUNCED their intent to impose tariffs months earlier, March and April. Trump placed a ntariff on solar panels and washing machines in January 2018. This 4/4/2018 article shows when China specifically announced soybean tariffs. https://markets.businessinsider.com/news/stocks/tariff-china-tax-us-soybeans-2018-4-1020455587
“Soybeans are down more than 4% after China announced a 25% tariff.’ This CNN article shows a history of early 2018 actions:https://money.cnn.com/2018/04/04/news/economy/trump-china-us-tariffs-trade-timeline/index.html
So the tariff price impact started almost immediately after China’s announcement. Prices recovered and stabilized until late May, when they started their precipitous drop at 7/15/2018. I believe China imposed its announced soybean tariffs on 7/6/2018. Most of the soybean price drop occurred BEFORE China imposed its tariff.
Care to show me where you got this bit of conjecture? “Indeed, soybean futures show a pretty good uptick after Jan 2021. Coincidence?”
I’ve seen much conjecture over the event study, but don’t ever remember seeing any such study referenced. Care to show me where it is referenced by Menzie and its results are shown here.
I take it you don,t like Trump because he doesn’t follow the standard economics path as taught today. We’ll just have to wait and see how it all works out, but his economic performance exceeds that of your preferred President.
CoRev No, the April 2018 announcements were threats and proposed actions, but nothing was definite. Prices dropped, but nothing like the big drop in July 2018. The US announced the first round of tariffs on 6 July 2018. China announced retaliatory tariffs on 7 August 2018 on the same day that the US announced a second list of tariffs. Here’s a detailed timeline:
2slugs from your own reference: “April 2, 2018: China imposes tariffs (ranging 15-25 percent) on 128 products (worth US$3 billion) including fruit, wine, seamless steel pipes, pork and recycled aluminium in retaliation to the US’ steel and aluminium tariffs.” That’s imposes not announces.
Also check the prices after 5/21/2018. https://markets.businessinsider.com/commodities/soybeans-price It confirms my comment: “Prices recovered and stabilized until late May, when they started their precipitous drop at 7/15/2018.” They dropped starting 5/21 until 7/02 where Fama would say the new information had been implemented in the prices. BEFORE THE US IMPLEMENTATION. Had you read my earlier 4/2018 references you would have seen the China importers had already canceled existing orders and stop making new.
Chinaimposed its announced soybean tariffs on 7/6/2018.” It was the US.
I would still like answers to these questions:
“Care to show me where you got this bit of conjecture? “Indeed, soybean futures show a pretty good uptick after Jan 2021. Coincidence?”
I’ve seen much conjecture over the event study, but don’t ever remember seeing any such study referenced. Care to show me where it is referenced by Menzie and its results are shown here.”
If one starts from the turnaround from the Great Recession that Obama inherited from W. Bush, then sorry but no, you are wrong. GDP growth rate since Trump came in is not noticeably higher than Obama from 2010 on.
I am going to indulge in commenting on this matter of “Derangement Syndrome” that you have made a lot of fuss about and I consider to be a ridiculous hypocritical joke. So, this whole Syndrome thing started with the Obama Derangement Syndrome, ODS. I confess I never liked this terminology. But indeed there was this large group of people who were simply out to dunk on Obama no matter what, irrespective of facts, and portions of this were strongly supported by the whole Fox News and related creeps bubble. What made this a “syndrome” was that almost all of the main accusations it brought forth were either totally or mostly just plain false.
The earliest and loudest manifestation of this was “birtherism,” which was appropriately prominently led by none other than Donald J. Trump. Only portions of the Fox bubble supported this, but those that did such as Lou Dobbs apparently have a huge influence with old fellow ODS birtherist president Trump. Needless to say, this was a total lie, and Trump at a certain point in his campaign very quietly admitted it.
A less important one was the whole “guns at the border” scandal. Old ODS people, now strong Trump suporters all believed this one. Supposedly Obama let guns get in the hands of bad Mexican criminals that killed Americans. But close analysis found that the program had been started under Bush, not a particularly Obama program at all, although he allowed it to continue. Frankly, this is probably the one of these where at least some Obama admin input can be discerned, maybe a bit of a plus for the ODS crowd.
Then there was the matter of the IRS going after GOP groups. Unlike the more murky matter discussed above, this one was just a total fantasy pushed and still believed by the whole ODS crowd. The rules are that to get a tax break a group must be non political. So at a certain point a large bunch of blatantly GOP groups formed and demanded these tax breaks. A Republican in the IRS in Cincinnati saw what was up and initiated an investigation. This became a scandal and cause celebre, and in response the IRS just caved and gave all of them tax breaks. But ODS crazies turned this into a monument of awful Obama political interference in the IRS, although all careful studies of this found that he did not interfere at all, and the whole thing had been played completely straight. So, the ODS story was just a total lie from top to bottom.
Finallly we have the matter that involved both Obama and Hillary Clinton, the Benghazi “scandal.” Ultimately why the GOP in Congress just would not let this go and spent millions of dollars and Hannity spent countless hours pushing bs lies, was that the Benghazie incident happened a month before Obama’s reelection, so this matter got both the ODS group and the Hillary Clinton Derangement Syndrome group both involved. The sign of just how insane this matter got was that of all 8 of the House committee investigations that happened, the most thoroughly done was the 7th by the House Intelligence Committee, with all of these run by GOP Committee chairs, which in the end found nothing except for Congress led by the GOP cutting State Dept security budget. Despite the deep credibility of this study, the minute it came out it was rejected by Speaker of the House Boehner, who immediately appointed the Trey Gowdy special committee that eventually immolated itself in the infamous 11 hour interrogation of Hillary Clinton that ended in…nothing.
So now Trump is president, and this collection of lying clowns who were derided as ODS have decided that they will accuse critics of Trump as being like them, a bunch of lying losers with not a single win to all their conspiracy theories. The problem is that the people they choose to criticize, as CoRev has done here, have no factual support for their claims. They defend a man who had publicly uttered more than 10,000 lies since taking office, and they repeat his lies, just as some did back when he was pushing birtherism. There is yet to be a single win for those like CoRev who accuse those who show they are just factually wrong of suffering from “TDS.” So, in fact, the people suffering from a syndrome that is disconnected from facts it is the old ODS crowd, who have now become the Real Trump Derangement Syndrome, let us call them the RTDS.
Barkley give it up. I’m not going down your path of rationalizations for bad behavior performed by both parties. You’ve been in denial about the Mueller report and will probably continue so when the new DOJ investigations are completed.
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