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China warned us, now it's on. US Markets crashing today.

1,559 360 August 5, 2019 at 12:08 PM
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A few days ago, China said something like "If you want trade discussions, let's have trade discussions. If you want a trade war, then let's have a trade war."

DOW down over 950 points right now. Will we crack 1000 by market close? Hopefully the DOW will only be down 1000 points.

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Profit taking. Sell stocks. Stocks drop. Reinvest at lower rates. Profit.
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It's striking the difference between CNBC and CNBC world. CNBC, which should be called CNBC US, has such a US bias. They have US pundits say things like the US holds all the cards, the Chinese economy is crashing, China is manipulating it's currency and on and on. CNBC world on the other hand, has pundits from all over the world. They say things like China has the advantage in the trade war, the US has taken more of a hit from the trade war than China, by the accepted criteria China is not a currency manipulator, the US is the currency manipulator and on and on.

The striking thing is the discussion about the Yuan's fall. CNBC US and it's pundits accuse China of manipulating it's currency when the fact is the Yuan fell because China didn't manipulate it. It just let it fall. So the US tagged them as a currency manipulator because they didn't manipulate their currency. Huh? Yes, a few people on CNBC US make that point. On CNBC world though, all pundits make that point. They find it laughable that the US calls China a currency manipulator. They make the point that if anyone is manipulating their currency, it's the US because we have had such low interest rates for so long and just lowered them again.

It just underscores how everyone should get as much info as possible from as many sources as possible.
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Quote from PX4shooter
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Profit taking. Sell stocks. Stocks drop. Reinvest at lower rates. Profit.
This isn't normal profit taking. The DOW dropped so much yesterday because China let it's currency fall. DOW futures were down 600 points overnight UNTIL China stepped it to support it's currency. Then the DOW futures turned around on a dime. China made it's point.
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I just watched a panel of 4 pundits on CNBC US talk. That was depressing. These guys aren't doom and gloomers either. Their point was that the US economy is slowing and there's not much we can do about it. The "tax cut" stimulus effect is over. Traditionally, the FED could stimulate the economy by lowering interest rates. But interests rates are already so low that there's not much to lower. Which means the US will probably have to go with negative rates, the government pays people to take money. That would be a disaster. Otherwise, not one of the 4 could offer up anything else to do. They all agreed that lowering interest rates would be a mistake. They all agreed that that's what we will do because there is nothing else to do.

This has been my concern for about 5 years. The US having a strong economy is an illusion. It's an illusion created by cheap money and government stimulus. That's a problem on so many levels. The big one is that if we have a systemic shock like in 2008, there is nothing we can do about it. All our tools are being use to just keep us where we are.
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I read CNN and I can't believe. "Trump's trade war with China will be worth the fight". The fight with whom? Why is it happening?
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Quote from WilliHolder
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I read CNN and I can't believe. "Trump's trade war with China will be worth the fight". The fight with whom? Why is it happening?
"the United States has naively looked the other way while China cheated its way to an unfair advantage in the international trade market. It took a long time to get to this point, and it's not going to turn around overnight. "

That opening of the article should give a pretty clear idea on whom the fight is with.

Supporters of the trade war will say the trade war is a long term solution to the money the US has been losing to China because of the <insert many reasons here>. And that we are currently at the best position for this fight with the economy at its peak and the unemployment rate at its lowest.

Politics aside, it's difficult (at least for me) to come up with a better strategy than putting tax on Chinese imports with the same level effect and efficiency and less harm to get back at China. I am saying this as a person originally from south east Asian region and have been a US citizen for the past several years.

From stock market perspective, the trade war is not a news. People who put money in the stocks for the long term and not affected by its ups and downs will win. People who rely on stock value to survive will lose. It helps to be the ostrich with the head in the sand for the market downturns to save yourself from all the worrying. The market will go up eventually unless sudden and significant events occur near term (mass killings, natural disasters, nuclear war, etc) before the climate change wipes us all from the face of the earth.
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Face it, we live in a global economy now. What happens on the other side of the globe impacts us as well. Manufacturing jobs and intellectual property are long gone. The time to act was decades ago. You can't put the genie back in the bottle. What we can do is incentivize innovation and keeping existing jobs and IP here.
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Quote from theST0RM
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Face it, we live in a global economy now. What happens on the other side of the globe impacts us as well. Manufacturing jobs and intellectual property are long gone. The time to act was decades ago. You can't put the genie back in the bottle. What we can do is incentivize innovation and keeping existing jobs and IP here.
Exactly. That's how the US has kept our economy going. Not by going after $1/hour jobs, but going after $100/hour tech jobs. Do the design and let the cheap labor build it. Bring manufacturer jobs back to the US doesn't make sense. Where are you going to legally find people willing to sit there with a screwdriver 12 hours at day for $1/hour? Otherwise all the cheap goods we've become used to won't be cheap anymore.

That is, if there are any manufacturing jobs left. Even in China, they are disappearing. Automation is the future. There is no future for humans there. Foxxconn recently replaced 56,000 workers with robots. Even in China, manufacturing jobs are going away.

That's the reality. It's not that manufacturing jobs are only disappearing in the US. Manufacturing jobs are disappearing period.
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Quote from teetee1
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Politics aside, it's difficult (at least for me) to come up with a better strategy than putting tax on Chinese imports with the same level effect and efficiency and less harm to get back at China. I am saying this as a person originally from south east Asian region and have been a US citizen for the past several years.
Tariffs are all politics. It's a fallacy that we weren't on a level playfield. Yes you can cherry pick various tariffs here and there where China charges us a big tariff and we charge them nothing. But you can also find goods where China charges us nothing and we charge them a lot. Overall, the level of tariffs China charged us was the same as what we charged them. In fact, they were even thinking about lowering some tariffs for US exports to China. Tariffwise, we had a level playing field. Now with the US implementing higher tariffs, we don't.

As for all the other issues, China was already making reforms in many of the areas we want to "force" them to make reforms on. For example, they had already been strengthening IP laws since China generates much of the world's IP now. Manufacturing jobs are already in decline in China if for no other reason that Chinese labor isn't that cheap anymore.
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