Posted on 12/04/2018 2:20:45 PM PST by Morgana
FULL TITLE: Trump sends Dow Jones plunging nearly 800 points by tweeting 'I am a tariffs man' raising fears his 'truce' with China will be followed by full-scale trade war and recession
U.S. stock markets plummeted Tuesday as a series of tweets from President Donald Trump suggested a trade war with China could resume next year despite claims of a truce and a long-term deal between the two countries.
The Dow Jones closed almost 800 points down at 25,027, a loss of 3.1 per cent of its value, while billions were also wiped off the value of the Nasdaq and the S&P 500, the other two key indices.
The S&P 500 lost 90 points, or 3.2 percent, to 2,700. The Nasdaq fell 283 points, or 3.8 percent, to 7,158.
Trump said in tweets that he and Xi would 'probably' have a deal at the end of a 90-day timetable for talks that began on Saturday - but declared himself against free trade.
The declaration sent shockwaves through stock markets already nervous of a downturn and buffeted by fears of a tech slowdown which has seen Apple and other Silicon Valley firms lose billions off their value.
'Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina,' he asserted. 'China is supposed to start buying Agricultural product and more immediately. President Xi and I want this deal to happen, and it probably will.'
He then proclaimed himself to be a 'tariffs man' in direct contradiction to his own White House's assertions that Trump is a free-trader.
(Excerpt) Read more at dailymail.co.uk ...
I made a little money today selling China Bear Market futures (ETF: YANG). I’ll buy them back when the market comes to its senses again.
Who pays them? The suppliers, the receivers, or both?
If it's the suppliers, what incentives would they have to continue doing business with companies in the U.S.?
If it's the receivers, wouldn't they then have to raise prices on goods coming from specified countries in order to maintain their profit margins? How would consumers be affected by the higher prices?
Who collects them?
If the U.S. government collects them, that should be a windfall for its coffers. Does that mean we going to see a tax reduction in the near future?
So the press now knows why the stock market does what it does? For example, this particular correction is Trump’s fault. If one can reliably know what causes the market to go up or down, one can quickly make a fortune on it, right? Ridiculous!
The rally tomorrow will be epic.
He’s brilliant. He’s signaling that you’ve got 90 days to craft an acceptable end game that doesn’t involve a completely rigged global market.
Freakin’ brilliant. Best president since James K. Polk.
Daily Mail UK celebrates DOW dismal show.....
Wonder what their stock market is doing....don’t recall them celebrating...
Inverted yield curve.
Without snowflakes there would be no good prices.
Market is closed tomorrow due to bush.
I would not listen to the Daily Mail for economic advise.
It is always doom and gloom one day and a few days later it Is a boom.
Complete nonsense.
No, no, no!!!!
it was Kudlow shooting his mouth off about the agreement not being final that caused the decline.
I hope Trump is still kicking his ass.
Time to buy more stock!
SMALL PICTURE
The importer write the checks.
The consumer pay more initially.
In the longer term, the importer looks for a new source of goods, say cheap Vietnam instead of now expensive China.
The consumer pays less.
BIG PICTURE
A government with a $4.4 trillion budget needs tax revenue.
Taxpayers can either have the needed tax taken out of paychecks or pay at the store till.
I am not a fan of tariffs. Tariffs are a tool of government economic planning. Government economic planning seldom works in the long run. We’re seeing that they have a downside even in the short run.
The only argument for tariffs I’ve heard that makes any sense is that you need the threat of tariffs to get trading partners to reduce their tariffs. But whether that’s a good argument depends on whether they actually have that effect. So far I’m not convinced they do.
“Boo. Hoo. The Wall St. wimps made tens of millions during Obama’s zero rate Federal Reserve coddling for eight years. They should suck it up and stop crying like weaned babies about two words…”Tariff Man.” They might have to forego the Lamborgini this Christmas”
Yea sounds like it’s time to pay the piper
Is the Dow drop related to Trump’s tweets?
The receivers.
If it's the receivers, wouldn't they then have to raise prices on goods coming from specified countries in order to maintain their profit margins?
Yes, but they also look for non-tariffed suppliers for the same goods. Consumer prices will go up but not necessarily by the full amount of the tariffs.
How would consumers be affected by the higher prices?
Lower standard of living.
Who collects them?
US Customs and Border Patrol
If the U.S. government collects them, that should be a windfall for its coffers. Does that mean we going to see a tax reduction in the near future?
The money goes into our coffers but it's US consumers ultimately paying the tariffs. There may be some redistribution of the taxes (tariffs vs income tax, etc.) but the total burden will actually increase unless there's a tax cut.
He’s trolling the Fed.
“fair deal”
The global trade goal should be global financial balance, not fairness.
China is simply the world’s most cost-efficient manufacturer by a wide margin, probably over 50%. Even a 40% tariff will be shrugged off by China. It would only be “fair” if China dominated world trade. That would not be acceptable, however.
Trade is not a meaningless but entertaining ball game. People in every country need to eat, etc. Save fairness for the ballpark.
The stock market was lower than this a week ago. People have short memories.
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