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 ...
Mnuchin was even worse. He said "...if we can get this negotiated and get a real agreement...".
Didn't instill confidence.
It wasn’t that tweet, it was the realization that Lighthizer is running the trade policy, and that the moderates’ victory against the tariffs are likely to be temporary.
Tariffs are bad for corporate earnings. They may however be necessary to combat China’s evil business practices.
“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.”
The PPACA increased US costs by at least 5%.
A 5% tariff is need to offset PPACA costs to level the playing field.
The PPACA isn’t the only thing making the USA a costly place to manufacture. There are waste disposal laws, Medicare/Medicaid cost shifting, etc.
The PPACA isn’t going away, the EPA isn’t going away, and neither is the need for tariffs on foreign made stuff.
There also Chinese communism. The Chinese government owns all urban land and makes a pretty yuan off of it. The key plank of the Communist Manifesto makes Chinese real property costs $0. This thieving communist cost advantage needs to be offset by tariffs.
Probably not. Did Trump say anything that wasn’t already known? Plus there was some movement in the yield curve today that investors didn’t like.
Where did you hear that?
When the Chinese cry uncle and the market booms these same news fakers will be crying market manipulation by Trump.
Wall Street is being played by Trump - hee, hee; wait till he and China make some agreement and DOW hits an 800 point gain; and Trump takes credit - hee, hee.
Now I feel like I should look into the Polk Presidency. As if I don’t already have enough “extra homework’......
A buying opportunity
Why is Fed Reserve predicting a major recession in 18 - 24 months ??? Planned event ???
I don’t buy the level the playing field argument. As long as the dollar floats anything you do in the way of tariffs will be offset by an adjustment of the dollar. It may benefit the steel industry if you impose steel tariffs. But every other industry will be at a greater disadvantage caused by the adjustment of the dollar—whatever disadvantage is needed to offset the distortion caused by the tariffs on steel. You could impose an across the board tariff of say 10% but the effect of that would be that the dollar would rise by 10% and you’d be right back where you started. You might try to fix the dollar. That’s what the Chinese do with their currency. We used to do that but Nixon abandoned it back in the 70s when the fixed rate got so far out of wack with reality that it could not be sustained. The Chinese will probably have that problem themselves someday.
I thought that was Schumer's job since 2007-8.
The bond yields indicate there may be a recession on the horizon but the market is setting those rates, not the Fed.
RATS on wallstreet
But why is Fed doing the predicting ???
One termer. Got a TON done and then said, “You’ve been great!” and walked off. Didn’t seek a second.
Hated the job, but was there to get it done. Sound familiar?
The Chinese are the toughest negotiators on the planet.
On the opposite end of agressive stocks is VAIPX, a Vanguard fund for Inflation Protected Treasuries. When this jumped up in price yesterday, I suspected the market might fall today.
So weird how trump can send the market plunging all on his own ... it he can’t seem to send it soaring?!?
Where do you see that they are?
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