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Thread: Black Monday

  1. #5481
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    I see your points on Trump, tariffs, etc. but Trump really can't afford a protracted trade war that tanks the market in America. The days of landslide elections in America are over. The country is going to be split damn near down the middle in the 2020 election, and a crashed market is enough to tip the scales. His likely opponent Joe Biden is from the EXACT region that put Trump over the top in the last election, and neutralizes a lot of his advantage there. I think Trump finds a way out here, if only for his own self-survival (his obvious highest priority).

  2. #5482
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    That's a good point, and i agree. I think that trump is certainly keen to get reelected, but what im not sure about is how his ego will factor into this. From what i can see, trump's ego is one of his largest drivers, and he always needs to win, or convince himself that he's won (which usually involves trying to convince others).

    Given this, and that he seems to be not that smart, and possibly have some mental issues (possibly dementia amongst other things)... I'm not really sure how he's going to act. The result might not be rationalized in his mind, the same way it could be in others.

    I don't think he's going to get another term, but then Americans live stoopid presidents. I suspect (as China seems to) that he'll have to wrap this up closer to the elections. The alternative might be, him not backing down (because then he feels like he's lost) and trying to convince the public that the trade war he put in place is a good looking term solution. (For his ego).

  3. #5483
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    Quote Originally Posted by Lewylewylewy View Post

    I don't think he's going to get another term, but then Americans live stoopid presidents. I suspect (as China seems to) that he'll have to wrap this up closer to the elections. The alternative might be, him not backing down (because then he feels like he's lost) and trying to convince the public that the trade war he put in place is a good looking term solution. (For his ego).
    Why do you think that he will not get another term? He is favoured by the markets to get another term. Admittedly it is close but he is the front runner at this point in time.

  4. #5484
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    Quote Originally Posted by Lewylewylewy View Post

    I guess i should wait to see what China do. Sitting on about 80% cash in my portfolio at the moment and hoping im doing the wrong thing.
    if you have short term commitments, just make sure you have the cash for these (I do and mine sits in a 0% earning account - no interest available to me). Then think that for every 3 steps forward, there may be 2 steps back BUT you are still one step ahead anyway. If you can tolerate that...all may be ok?

    I put cash back into the market on January 3rd, and even as of today, I am ahead of the highs of last year. I bought into three NZ stocks, Asia, topped up UK Property, and got into a USA infrastructure ETF that has a global portfolio (the yield on it is nice)....even if it is backwards, the exchange rates and yields may do me quite nicely....if you are nervous, go back to the fundamentals and steer clear of any inflated past growth stocks. And for sure...keep cash for the short-term. But I can afford to lose all of my portfolio and that won’t happen easily - it didn’t even happen in the GFC because companies till make things and people still buy stuff, and people still generally brush their teeth.

  5. #5485
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    Good advice, and i think the stock market agrees with you today.

    Im thinking that maybe im overly concerned... if the tariffs go onto products that already have exorbitant tariffs on them, then maybe companies effected by this are already ukered. I.e. not much more damage to do. I do anticipate the Chinese to be smarter about their tariff retaliation (assuming they retaliate with tariffs), they won't want to kill the goose, they just want to give it a kick.

    Ty for lending this worrier your clear head.

  6. #5486
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    Quote Originally Posted by Lewylewylewy View Post
    Is anyone else concerned that China will retaliate eye 4 an eye, damaging the two largest economies, sending the world into recession?
    Yes, I think everyone is concerned or should be. However, personally I'm optimistic agreement will be reached as both sides have too much to lose.
    I remember Nicky Haylee (recently retired US UN Ambassador) saying something along the lines of, Trumps unpredictability & impetuousness actually helped their negotiators as the other side found him difficult to read & how far to push.

    What's that saying...'When elephants fight, it's the grass that gets trampled."
    Last edited by Blue Skies; 13-05-2019 at 01:29 PM. Reason: Just added Haylee recently retired

  7. #5487
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    I imagine that trump will end up making some kind of agreement, which will likely having nothing of substance, then tell everyone how he died those Chinese out. Just curious about the state of the grass until then

  8. #5488
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    I think this will fester for quite some time. The Chinese almost did agree to many issues but got brought back by Xi for what I think are other reasons. As for the US why would they be too worried with a GDP growth of 3.2 % and low unemployment. The main losers are US farmers but they live up Trump's.... so why would Trump be worried.

  9. #5489
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    Quote Originally Posted by bohemian View Post
    I think this will fester for quite some time. The Chinese almost did agree to many issues but got brought back by Xi for what I think are other reasons. As for the US why would they be too worried with a GDP growth of 3.2 % and low unemployment. The main losers are US farmers but they live up Trump's.... so why would Trump be worried.
    I suspect that US consumers and companies will find out that many things will get dearer if they have to pay 25% on all Chinese imports like cell phones, computers, other electronics, resources (like rare earths - more than 80% of world production comes from China) and textiles. Even Trumps MAGA caps will be more expensive (which might be a good thing). There is lots of stuff where there is just no alternative to buy somewhere else.

    Trump is basically putting a heavy tax on his people, and while I agree that many of them must be quite stupid (otherwise they would not have picked him in the first place), they can't be that stupid not to notice that their pay check will be rapidly eroding ...

    Just boys playing chicken ...
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  10. #5490
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    Im not concerned about consumer stuff increasing in price, more about costs to companies, making those companies uncompetitive. It's like an ecosystem; you don't know what the effect of killing one business or industry will have on others.

    Consumers can handle more expensive goods, but businesses might not be able to handle increased costs. Especially business relying on volume to make low margin business work.

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