Miscellaneous And Off Topic Subjects

[Jeff Buchanan]

China is correct to wait out PDJT. .......

Dunno, it's an open question as I see it.

The article below describes the various D presidential candidate's positions on China Trade. Some, if elected US president, will make it easier for China to obtain it's trade objectives, some won't.

https://www.scmp.com/comment/opinion/article/3015984/will-us-policy-china-change-if-trump-loses-2020-presidential

My view is that the current (and past) US administrations have, more or less, thrown their hands up in exasperation with the WTO as a means of curtailing what most trade experts believe is China's blatantly unfair trade practices. The Trump administration has taken the unusual step of actually neutering the WTOs' dispute resolution arm forcing the world's trading nations to find other ways of resolving trade disputes using arbitrators. It's an interesting anvil upon which to keep hammering the Chinese. I support it.

This article below casts a question mark on the viability of what some think is Xi's "wait it out" strategy with Trump. The central theme suggesting it's harder for China to deal with the status-quo anti of the May blow-up of a trade deal than it is for the US is this. The risk to China of continuing the status-quo-anti, which will likely precipitate large international corporations either not expanding investments in China or withdrawing from China markets altogether is real. It's estimated this issue is already costing China one-trillion dollars in trade inflow.

As well, if Trump is re-elected because voters reject the D's preference for socialist policies in the US, a very real possibility at this point, where does this leave Xi? He doesn't want to be there. These two potential realities are likely to be driving Xi's position and that of his trade negotiators going forward. While, as I have said, I don't seen any major concessions on either side coming out of Shanghai this week, the author of the linked article thinks that if China wants respect from the US, something it has been demanding of late, it needs to show respect by doing what global trading partners have long expected them to do: make their markets more open to global traders.

https://thefederalist.com/2019/05/29/china-trying-wait-trump-trade-deal-cost/

[Dr. Strangelove]

[Kapture1]

Snopes fact-checking is now like this:

Did Bernie Sanders say Baltimore was like a Third World country? Yes. [Insert long-winded explanation as to why it was ok for him to say replete with opining.]

DId Obama use the Betsy Ross flag at his inauguration? Well, yes [but, -- insert "times have changed!" opining]

Fact-checking seems like it ought to be free of opinion, but it's obviously not. Snopes is part of the media industrial complex working so hard to get us all to embrace Communism.

[Hannibal]

The truth remains that other countries practice protectionism, and we don't. This has caused the country to hemorrhage middle class manufacturing jobs for a long time. I see a ton of open blue collar jobs in Ohio right now, but I think that what they pay relative to minimum wage is probably way less than what General Motors pays their assembly line workers.

Anyhow, I have never been in favor of tariffs, but I don't think that you can ignore the down sides of free trade either. The country's strategy for dealing with free trade has largely been to encourage everyone to get a college degree and do something that doesn't involve punching a time clock (and this is where the "learn to code" meme comes from). But not everyone should get a college degree and thanks to our "everyone gets a student loan" attitude, it's now outrageously expensive to do so. There needs to be a path to a decent middle class life for people who aren't cut out to be engineers or accountants. I don't know if we have that. In the 1950s, you didn't need two working parents to support a middle class household, but we're mostly there right now. I don't know if we can get back to the way that things were back then, but I can't fault people for wanting it to be that way.

[Ghengis Jon]

Tariffs punish American business, not the Chinese. My company buys electro-pneumatic devices from China for less than what we can buy just raw materials for. If trump warts to impose a 100% tariff, China would still be cheaper than anywhere else for us. It is the importation company that pays the tariff. This Trump Tax means my company has less money for 401(k)s, less money for wage increases or workforce expansion, less funding for domestic R&D. In China's case, tariffs are optics for Trump's slack jawed cult followers. Buying materials at the highest quality for the lowest price is a capitalist tenet that commie Trump wants to undermine. Then he abuses the money he has ripped off from US businesses. Has he paid down national debt with the money? Has he funded R&D with an eye on creating US jobs? What has he done with it? He tries to buy votes. Oh, I'm helping the farmers my policies have ass raped, he says. But 80+% goes to corporate mega farms, not the little guys - you remember them - the backbone of our nation who suffers the most under Trump.

We need cooperation from other industrial nations in a concerted response to Chinese intellectual property theft, currency manipulation, and export subsidies. But noooooo, we have to insult our allies, renege on treaties, stir divisions, support murderous regimes, undermine our alliances, and demand fawning statements in praise of Dear Leader. We wonder why the United States is the laughingstock of the world and gets no cooperation even on common sense issues?

Donald Trump is a clear and present danger to this nation. His cult following in the Senate will not put country over partisanship. His rotating carousel of acting cabinet members remains a series of boot licking sycophants as a backstop against the 25th amendment. We are only left with the ballot box to correct this evil, so Democrats, please do not fuck it up by nominating an idiot. Donald Trump is living proof that an enemy of the state can be elected as President. I'm hoping the electorate can demonstrate the maturity to correct that grievous error given the cowardice of the so-called Congressional check-and-balance.

[iam416]

DSL:

You should always read Williamson.

I also find it interesting that, say, Columbus isn't representative of flyover country, but that, e.g., Yellow Springs is.

The path for Ds runs straight through Columbus and Cincinnati suburbs. Period.

[Dr. Strangelove]

[Jeff Buchanan]

Looks like the markets didn't like Powell's interest rate cut. Markets just closed with the DOWJ down over 300 points or 1.24%

I don't think that was entirely unexpected. Markets don't always rise attendant to the Fed's rate cuts. In fact, history demonstrates that (1) size matters and (2) 3-6 months after a rate cut, the market's returns are marginal at best around 3-5%; nothing spectacular.

Trump is on a precarious path. He is very likely to produce an anti-Powel Tweet storm exclaiming the rate cut should have been bigger. He will be wrong. Plenty of economists thought there shouldn't be one at all.

Further, he has already sniped at the Chinese even though official reports from both sides in Shanghai have commented that the meeting was "constructive." Talks will resume in September. But if he pushes back harder via a tweet storm on the Chinese in a slowing global economy, they are simply going to laugh at him and wait-out the consequences on him politically of what some think is bad trade policy.

Markets will properly correct on a downward path reflecting the real damage to the global economy that the trade war and it's very public verbal back and forth attacks are doing to it. Trump should and probably will be rightfully assigned blame for that notwithstanding what I believe is a reasonable trade policy when it comes to China given the WTO's lameness in addressing China's own shitty trade policies. Trump is such a loose cannon he can be counted on to utter stupid things that the Chinese don't like. That makes it hard for negotiators on the ground to get to a deal and in that way he just hurts himself and his re-election prospects.

[Dr. Strangelove]

[froot loops]

Literally the 2016 election hinged on Real Americans in a town like Detroit not getting to the polls.

[Jeff Buchanan]

DSL, you are Correct. What bothers me about this dance is that Trump's people can take two steps forward, then he'll say something stupid very publicly precipitating more than 2 steps back. No progress ensues. I still think the China trade policy is reasonable and the anvil that the US is hammering on China with - the comatose WTO dispute resolution arm and the run by trading nations to find other means of legally resolving trade disputes - is a decent one.

I don't think the Chinese want to sit before arbitrators with legal authority to direct changes in a nation's trade policy - such as telling them they have to codify in law some of the trade practices other nations, including the US are wanting the Chinese to do. They rather depend on doing nothing but issuing official directives that mean nothing and have the WTO continue to do the same thing it has been doing for years - nothing.

[Ghengis Jon]

The Chinese will never sit before an arbitrator that can force direct changes in it's trade policy. It will wait until the US is done emasculating the WTO to when it becomes little more than a trading partner glee club with no teeth. Then the WTO can't do anything rather than won't. They might just withdraw altogether and simply use it's economic power to resolve it's disputes. No one will undercut Chinese pricing and its not like they're dependent on the US for anything. Even before the implementation of the Trump Tax, Brazilian soybeans were priced cheaper than American ones. Who do you think is making up the shortfall from the US?

The Chinese will wait out this administration. As I outlined above, China will be content for Trump to play whack-a-mole against NK, Iran, and China policy forays while China expands it's growing sphere of influence. So what happens if Trump is re-elected <shudder>? China could simply announce that in two weeks there will be no further exports to the US of anything. Our stock market would drop 25% and the economy crater overnight. 2 days later, China says 'just kidding' but the damage to the US would be done. China would take a major hit, but not like the US.

The way to deal with China is by concerted international effort, not the current go-it-alone policy. But Trump has fucked over the US every which way on the international stage so that's not a even possibility. Thanks President Dumbass for the mess you're leaving your successor to clean up.

[Dr. Strangelove]

Jeff, as predicted (an easy call), Trump has lashed out at Powell for not giving him the big fast cuts he wanted.

I know many or most have become numb to Trump rants, but Trump apparently believes the Fed should be under his direct control and it should subordinate monetary policy to the President's immediate political goals. That is a very, very bad idea going into the future.

The other side of this is that Trump wants and needs a fall-guy in case the economy really does turn south. He could try to blame Pelosi but that's a harder sell since any bill they pass requires his signature too. Powell's an easier target.

[Da Geezer]

Jeff, as predicted (an easy call), Trump has lashed out at Powell for not giving him the big fast cuts he wanted.

I know many or most have become numb to Trump rants, but Trump apparently believes the Fed should be under his direct control and it should subordinate monetary policy to the President's immediate political goals. That is a very, very bad idea going into the future.

The other side of this is that Trump wants and needs a fall-guy in case the economy really does turn south. He could try to blame Pelosi but that's a harder sell since any bill they pass requires his signature too. Powell's an easier target.

I'd suggest you guys take a look at the dramatic drop in market averages after the December rate hike. That raise of .25% was not justified in any way by the economic data. This cut is best viewed as Powell saying "my bad..." and fixing the mess he made.

The Dow was 18,300 or so on election day and is 26,800 or so today. That is a 46% rise in 2 3/4 years.

[Dr. Strangelove]

Whether Powell made the right decision or not is one thing. Whether the Chair of the Fed should be just another political appointee of the President and interest rates should be changed based on the President's political needs is another thing altogether.

Anyways, from it's low on March 6, 2009 the Dow rose from 6,470 to 18,300 on Election Day 2016. A rise of 282% in 7 3/4 years or 38.39% a year.

The vast majority of the stock market gains under Trump took place in 2017. The same year that Yellin raised rates 3 times from 0.75 to 1.5. BTW, if Trump doesn't like Powell's position on easing maybe he should've paid more attention in the interview rather than replace Yellin because she was short.