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The 90 day pause on tariffs is doing all the heavy lifting right now. We're going back into crisis mode in a few months.
Meanwhile, the stock market isn't the only indicator of economic health. Mass layoffs are still happening, prices aren't falling, inflation is still at risk to blow up again, consumer spending is down, and all the major banks are predicting a recession with better than coin flip odds.
We're absolutely not out of the woods yet.
We're hardly even three months in... We've got a loooong way to go before even the midterms.
Nahman. It’s the shaft
Yah, I'll trust him like running into a dog that nipped my hand before.
The problem is not Trump. America would be in the same predicament no matter who was leading or what party or what ideology they had. Obama hit the nail on the head when he talked about the dangers of financializing America - making money on money instead of making product. A substantia portion of the American GDP has nothing to do with generating tangible wealth, it is a result of inflating paper wealth - the value pf stocks, the price of gold, the value of real estate, the interest payments from other people on borrowed money, interest on your savings account that is only as valuable as the bank that holds the account. None of this wealth can actually buy anything tangible, except more paper wealth. Eventually, the country begins to look like Musk - on paper, enormously wealthy, but in terms of liquid money, unable to buy very much. Musk has to use his paper asset wealth to BORROW real money on, if he wants to do anything big.
Generally, Trump is not alone. All of America is just running around stupidly cuckoo crazy because they realize there is not a single thing they can do to actually stop the decline. They are in pure panic mode, grasping at anything that comes along, and panic is always chaotically unpredictable except for the nature of the outcome.. All they can do is to position themselves individually so that when the country goes 'splat' they have a chance of surviving.
For Canada to avoid the splat, we need to put as much distance between us and the 'splat' as we can, instead of being at ground zero of the impact.
So it's like you're saying that the gold rush AI craze, crypto, meme stocks, property bubble inflation, money printing, uber and airbnb, side hustles and crowd funded health care aren't as good as a real growing economy?
Like and subscribe.
Absolutely, You have the concept down pat. They are like a 'condom' economy - they give you a sense of comfort, security, and safety while you are being screwed. Except for the 'crowd funded health care' - that is an American hangup.
You are correct about the lack lf practical value in the american capitalism, but that is the much bigger picture and while what is going on right now is only possible because of this system, it is happening now and in this way because of trump.
It's like saying that if I shot someone in the head it wasn't because of me that they died, but because of the nature of life which must conclude in death. Like, yeah, they died because everyone dies, but they died now and in this way because of me.
No, it is not happening now because of Trump. Trump s happening now because of the way America works. No matter who was in charge, the panic and outcome would be the same. America was at the breaking point, and nothing could have prevented it. Even Obama made that clear. Individually, yes you are correct about 'If I shot''''. The reality is 'EVERYONE collectively in America is doing the shooting, because 'shooting' has become culturally acceptable. So holding the individual accountable for herd action is just insanity. You stop the herd action at the herd level. Changing the action of an individual just does not make a difference in herd action. When Trump is deposed, Vance will be far worse than Trump could ever be. Vance is focused. Blaming Trump just makes it easier for Vance.
Isn't that just a deterministic nihilistic world view? I mean it just sounds like you are saying that nothing could have been different and that it was allways going to be like that.
I don't see why that would be true, Harris was very close to winning. not all broken systems have to end in an extreme collapse, it's not impossible that things could have been fixed over time.
I just don't think that everything is doomed to fail and that Trump is nothing but a vessel for the inevitable.
If you are in a car, and the tires are going flat, is it a deterministic, nihilistic, view that inevitably, no matter who the driver is, the car will soon have to come to a stop? The choice, of course, is how catastrophic the stop will be - a controlled stop or a calamitous stop?
The trouble with America is that, even if Harris won, the entire American system is still based on an adversarial, winner-take-all system. In that regard, as Obama found out, the system is inherently unstable and unsteerable. Every move Harris tried to make, would be opposed and every attempt made by the opposition to undermine it. Under such conditions, progress is impossible. But even a controlled landing is impossible. No matter how much time America had, the fundamental problem was unfixable without a complete reset. The American governance system is basically unworkable and dysfunctional. The Civil War proved it, and the Civil War never really did end.
America has to split up in order for the parts to function properly again. The two sides are basically incompatible, and divorce is the only viable solution, apart from continuing the fighting, hating, and constant battling. Prolonging the situation will only lead to both sides destroying each other.
In point of fact, when Trump is deposed by Vance, the inevitable split will accelerate. Half of America will never live under the 2025 Manifesto, and the other half will never allow it to be undone once Vance puts it in place.
What climb? Its still down 8.61% since he took office. Crazy to celebrate losing almost 9%.
By contrast Biden's second to last year was UP 24.23%. His last year was up yet another 23.31%.
To put dollars on this:
I see no cause for celebration here.
And the bond market is in freefall... That's not good, worse than the sp500.
I agree, yet so many are thinking thibgs are okay now, wild
What Trump is doing now will almost certainly outlast his presidency. One man, just one, has completely betrayed all of the trading relationships this country built over the course of a century, and even better, he did it unconstitutionally and Congress went along with it for their own enrichment, both Democrat and Republican.
Supply lines will be recalibrated. Our foreign partners will make new relationships with more dependable trading partners. (ie, China.) Over the course of the next decade or two, the utter stupidity of what Trump has done will play out to full effect. A few hundred Americans who shoved their heads up Trump's ass will get richer, but long-term, this is going to hurt most Americans.
If you're not diversifying your investments geographically you're no longer diversified at all.
Most shitty things in our life can be traced to Reagan. Trump is going to outdo that legacy by so much.
We'd need an actual left wing president to actually undo the damage, and there's no way the corporate democratic party is going to allow that
You're right.
We needed a Bernie, and Democrats happily subverted their own primary process to prevent it. Now, all you can do is take whatever measures possible you can to ensure your own survival.
I hope people realize that trump was able to do all this because of years of bad law writing and eroding of the balance of powers. All that concentrated power is great until someone you disagree with sits in the throne you built. It would be nice if after trump, we learn our lesson and vastly shrink the power of the office. Unfortunately , I believe it is likely people won’t realize this and will put even more effort into strengthening the power of that throne after trump is gone, in an effort to more quickly undo his work, which of course means someone will be able to redo the damage even faster at a later time.
Biden had the chance to do it and outright refused to place more restrictions on the executive.
I'm not a both-sides'er, but one thing that both parties will absolutely never do is limit their own power, even if it means limiting their opponents simultaneously.
The President and his cabinet are, as we speak, violating the constitution. The Senate is complicit. The House of Representatives is complicit. The Supreme Court is complicit. We are past the point where voting for either Democrat or Republican can meaningfully change anything. We can't vote to stop the assfucking that we're getting, we just get to vote for who gets to be on top while it happens. This downward spiral will continue until a revolution occurs or by some miracle a majority of Americans wake up and start voting for new political parties in numbers that could threaten to topple both establishment parties away and implement sweeping government reforms with a strong mandate. Obviously, the way things are going, revolution is far more likely.
The tariffs alone would be enough to cause a recession. It's not just that they're large (even 10% is large by modern standards) it's mostly that they're so chaotic. I've read that most businesses are avoiding hiring, avoiding any expenditures they can, and just waiting to see what happens. Seeing what happens means keeping cash on hand, which means a drop in GDP. The numbers might have been juiced a bit by people making big orders and trying to get them done before the tariffs come into full effect, but once that's done the pain is going to be much more visible.
In addition to the tariffs, there's the firing of federal workers. There are about 3 million in the US, and even if only a fraction have been fired so far, I would bet the rest are cutting back on unnecessary expenses and building up a cash reserve in case they get canned. This will ripple through the economy too.
And then there's the ICE stuff. People with green cards getting deported for exercising their first amendment rights, scientists being refused entry for a post they made on social media in their home countries, Canadian, German and British people being thrown in an ICE detention facility because of a minor paperwork mix-up. This is going to make tourists and business visitors much less willing to take a chance and visit the US, but this won't hit until later. Big tourist season is the summer, and so the lack of business won't show up yet. And some conferences were too close to cancel, but conferences for later in the year might be moved or cancelled.
And there's the invasion threats against Canada and Greenland, and the tariff wars against Canada and Mexico, and the refusal to help Ukraine defend itself against Russia. The biggest visitors to the US were Canadians, Mexicans and Europeans, and all of them are going to be avoiding the country now. And, not just avoiding the country. People are trying to avoid buying US goods and services.
In addition, there are treasuries. Many are held by Japan and China. Even just acting purely rationally, they see the chaos in the US and know the US might not be able to pay its bills, or it might choose not to pay them. The risk has gone up. If they aren't being purely rational and self-interested, they also know that they can hurt the US by dumping treasuries, so they're doing that.
And then there are the scientists leaving the US, or choosing not to come. And there are potential international students who see how risky it is for anybody who isn't white, male and christian. This sort of thing might take decades, but it's going to hurt the US the most. So many of the world's most talented people have come to the US and started businesses, but that is definitely going to slow down now.
Even if Trump were impeached and removed, and all his changes were undone with apologies, there has been some permanent damage done to the US by the MAGA majority. But, since it is a majority, since the MAGAs control the supreme court, the senate, the house and the presidency, there's going to be a lot more damage done before there's even a hint of a stabilization, let alone a recovery.
I think any rational investor is going to get their money out of the US, and the slight recovery the S&P 500 has seen in the last week is going to be dwarfed by the crash over the next few years.
I was so focused on the tarrifs this week that I forgot about the actual fucking threats of war against close allies 🤦
The close allies didn't forget, trust me.
I agree with most of this. However I think there are additional elements that make prediction challenging.
First, if the US undergoes any kind of revolution in the next five years, the cultural effects you mentioned could by overwritten by more recent events. I realize this sounds improbable, but the transition from the New Deal era to global neolibralism was a revolution. "The Reagan Revolution" was an actual economic and social revolution. And we're overdue for another.
Second, both the markets and the real economy were in an unsustainable condition before Trump. The pursuit of endless growth, the disruption of climate breakdown, the end of the US' monopolar hegemony, and the return of extreme wealth inequality in the US made the status quo impossible to simply maintain. Big changes were coming even without Trump.
I maintain some optimism. I think anti trust regulation, climate-based financial regulation, and an embrace of market socialism could render the last three months to be the last gasps of the old order instead of another point in what has been a decline decades in the making. But it depends what happens next.
I completely agree with you. The real shit show hasn't even started. The waves from the tsunami will take a while to hit.
Some of the greatest daily gains in the stock market are during overall crashes.
Increased volatility is generally a bad sign for an economy's health.
S&P 500 is still up 5% over the last 12 months. Up 95% over the last 5 years. Any action on a shorter timeline than that is emotionally driven and should be largely ignored. Unless you're day trading of course. You're not, right?
That said, ya. We're probably heading into a rough time.
We're looking at negative GDP growth according to folks smarter than I am. 2 quarters of that and it's probably a recession.
Additionally it looks like foreign investors are leaving the US Treasury market kicking up yields and foreign governments are getting uneasy about purchasing US made weapons or relying on US security guarantees which, again, reduces GDP both directly and indirectly.
2028 can't come fast enough.
Using the stock market growth of the last 2 decades of global, neoliberal economic politics to council people to "think long term" about their investments at the start of isolationist, fascist economics policy is maybe not the best idea.
"Look at the past" only works when the past is still relevant. They are ripping up every norm and institution that made those past gains possible.
I have a very hard time believing that the rest of the world will trust the US for a very long time, if ever, so I can't imagine our financial situation is going to improve for anyone except maybe the ultra wealthy (as usual). I haven't even looked at my retirement because it's not like there's much I can do besides stress about it.
Climbing? Wait the market opening react to the new semiconductor tariff bomb released 10 hours ago
Or walking back the laptop/phone exclusions, or China halting rare earth shipments, or...
i mean he postponed it for 80/90 days or something so i guess this exact thing is going to repeat itself, because to me that looks like it would be the most profitable for trump
I think Trump will dump and pump repeatedly until he's stopped. Him and his billionaire bum chums will be absolutely raking it in.
Precisely. Vance will use Trump's erratic behavior as a reason to have him impeached by the mid-terms, and then Vance will fulfill his goal of becoming President.
It's not the tip of the shitberg, it's the edge of the shittacane, Randy.
I’m constantly amazed by people who don’t remember his first term.
Are you people on dope?!
Well, there are a lot of factors here that I expect would be factors, both increasing and decreasing what he does over the course of the term.
Right now, the Republican Party has a trifecta, and thus even GOP legislators who are not very happy with aspects of Trump are going to be very loathe to have fights with Trump, because this trifecta lets it pass lots of legislation that the Democrats would otherwise block; getting in a fight with Trump could mess that up. The incentives there will decline over the course of the term, since they'll have increasingly gotten through the legislation that they want; Trump being happy becomes less-important.
A major reason for Trump doing well in the presidential election was public unhappiness with inflation under Biden. Major global tariffs would also tend to drive up prices, and Republican legislators are not going to be happy about that, even aside from recession issues. I've seen both Republican and Democratic legislators commenting on the fact that this would probably be politically-damaging to the Republican Party; that's probably a source of pushback.
One threat that Trump has frequently made is to endorse a primary election competitor to a Republican legislator who doesn't get along with them. This meaning something is contingent on Trump's endorsement bearing weight, which requires sufficiently-high public approval of Trump in the district. If Trump takes unpopular actions, that endorsement matters less.
Just because you don't see a lot of Republican legislators arguing with Trump doesn't mean that it's not happening, quietly. The Republican Party has good political reasons to keep disagreements behind closed doors. Mike Johnson has made a number of statements about how he has had an extremely difficult job dealing with people getting along; he's an interface between the House and the White House.
What happens at midterms is going to be, I think, consequential. The Republican Party has good political reasons not to jam sticks in Trump's wheels as long as he at least keeps things within bounds, and certainly not to do so publicly. The Democratic Party has good political reasons to constantly visibly jam sticks in Trump's wheels. If the Democrats take the House in 2026, they have a lot of room to do things like initiate inquiries and demand information that they just don't have right now.
Late in the term, Trump is going to care less about popularity; that's why Presidents tend to do politically-controversial pardons right at the end. So he might be willing to take some particularly controversial actions at the end.
Late in the term, Trump is going to have a harder time making changes that last, because it'll be easier to just reverse them or slow them from having effect. Trump laying off people at the beginning of his term is hard to reverse; said laid-off people probably aren't going to just stick around for four years hoping to get their job back. If he does so three months before leaving office and his successor doesn't like that, they're probably largely just going to be rehired. So he has a hard time making lasting actions at the end.
Trump's tariff policy is based on a very weak legal structure. Normally Congress sets tariff policy, not the President, but Congress passed a law some decades back that permits the President to impose tariffs in emergencies. Trump proceeded to declare that fentanyl was an emergency and then started declaring that he'd throw up tariffs left and right. Whether or not the tariffs on even Mexico have any real basis in addressing fentanyl is questionable. Tariffs on Canada on fentanyl grounds are extremely questionable, as very little fentanyl enters the US from Canada, and tariffs on most of the world are even more decoupled from that. There's a pretty strong argument that he's got no legal authority there, and the only reason that he's able to do it is because Congress hasn't taken action against it. Congress can, if it wants, simply terminate the emergency he declared, at which point his power also evaporates (and has some more-forceful options as well, like taking issue at the Supreme Court with whether-or-not his use of that power is actually in line with even the declared emergency, or, if a supermajority in both the House and Senate want, simply entirely terminating the Presidential authority to impose tariffs at all, and then override a Presidential veto). The Senate already had a bipartisan bill pass about terminating the emergency over the Canada tariffs; last I looked, it was expected to fail in the House
that is, this is a public statement rather than aiming to force an end
but it's a shot across the bow where the Senate is taking issue with some of his tariff policy. Trump's ability to take action on tariffs is deeply dependent upon Congress choosing not to involve itself. I'm skeptical that Congress will accept global tariffs, even if Trump wants them, and Congress has pretty straightforward routes to avoid them. My guess is that Congress has probably communicated some things about what it'll actually accept to Trump.
Speaking even more-broadly, if it actually comes to some kind of real arm wrestling...the President has very extensive direct control over a large organization with millions of people, the Executive Branch. That's what makes him powerful. But the reason that he has virtually all of that power is because Congress gave it to him in the past ("we authorize the President to have this much money to create a department and then tell it what to do"). Congress can take it away, and with a supermajority in each house, override Trump's veto of such legislation. Even in areas where the Constitution very explicitly gives a power to the President, like commanding the military, Congress has written legislation to limit ways in which he can act, like the War Powers Resolution:
https://en.wikipedia.org/wiki/War_Powers_Resolution
The War Powers Resolution requires the president to notify Congress within 48 hours of committing armed forces to military action and forbids armed forces from remaining for more than 60 days, with a further 30-day withdrawal period, without congressional authorization for use of military force (AUMF) or a declaration of war by the United States. The resolution was passed by two-thirds each of the House and Senate, overriding the veto of President Richard Nixon.
During Trump's first term, Congress passed legislation that disallowed the President from removing sanctions on Russia without going back to Congress and getting an okay.
Hypothetically, I imagine that Congress could probably impose a lot of restrictions on Trump, or even shift direct authority over Executive Branch departments to itself; it has, in the past, created a small amount of the bureaucracy that reports directly to Congress.
My guess is that the Republican Party does not want to see any kind of an arm-wrestling scenario like that, though, as it'd be really politically bad. It'd instead warn behind closed doors that it might be willing to do that, and ward off things reaching that point. Hell, the Democratic Party doesn't want things reaching that kind of point either. But my point is, Trump's got real constraints on what he can do. He cannot just go ignore Congress.
That's mostly talking about constraints on Trump's power. So, there's a broader question here: will Trump continue to say outrageous things? My guess is almost certainly yes. He's shown no interest in stopping doing so for either of his terms, and kept doing so right through his first term, so I doubt that that's going to go anywhere.
EDIT: Looking at the executive orders and correcting an error above, the emergency that Trump declared to justify the global tariffs was a separate emergency from the one that he declared over fentanyl.
Wait for some stupidity to reverse it again. Markets like predictability. This president is anything but.
