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Healing said:
Racing to build up inventory seems an impossible calculation. Trump likely folds on nearly all these tariffs; that’s what the market’s non-response is essentially predicting. What then? Suppliers have a boatload of inventory in an environment of wavering consumer confidence, persistent 7% interest rates, political unrest, and slow rolling fallout of the worst economic budget bill ever penned?
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Yeah, that's kind of what I'm saying. I have no idea how to weigh all the dynamics happening right now. It's absolute chaos. But while the raw numbers are holding up fairly well for now, I just can't figure out a path that allows them to stay strong 12 months from now. Barring something massively disruptive and unlikely, such as the complete collapse of Russia or China.
 
Healing said:
I mean, the top line seems great and all, until you see that demand fell in industries reliant on consumer confidence and discretionary income.
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Does bring up the question, how do you raise prices with a weakening consumer?
BillOfRights said:
If tariff inflation does ramp up, does trump's administration go down as clueless? Remember who voted for him.
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Not me. And I smugly explained to MAGA tariffs that they were a horrible idea if they wanted lower prices. Oh and Trump initially appointed him. Trump’s track record of choosing competent people is ungood. Bigly.
 
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Purple Nurple said:
Does bring up the question, how do you raise prices with a weakening consumer?
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Word of the day: STAGFLATION

Not me. And I smugly explained to MAGA tariffs that they were a horrible idea if they wanted lower prices. Oh and Trump initially appointed him. Trump’s track record of choosing competent people is ungood. Bigly.
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Obama originally nominated Powell to the Fed board. trump nominated him for Fed chair, and Biden re-nominated him.
 
BillOfRights said:
Word of the day: STAGFLATION


Obama originally nominated Powell to the Fed board. trump nominated him for Fed chair, and Biden re-nominated him.
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Correct. Trump was the one who decided he should lead the fed. Biden favored continuity as he tried to manage out of the pandemic.

I’m sorry. For me, the mere fact that Trunp chooses you, and thinks you’ll be good at your job, is a red flag for me. So if it turns out that the Powell led fed was clueless, I won’t be surprised.
 
Death of an Empire, Exhibit No 322
The independence of the Fed is one of those sacred safeguards of the American economy. If Trump goes through with this (and he certainly seems like he really wants to do so), it will signal to the world that the Fed is subject to political whim.

I'm not sure you want to fuck with the world's confidence in the US dollar or Treasury notes...the implications could be catastrophic.
 
Purple Nurple said:
Correct. Trump was the one who decided he should lead the fed. Biden favored continuity as he tried to manage out of the pandemic.

I’m sorry. For me, the mere fact that Trunp chooses you, and thinks you’ll be good at your job, is a red flag for me. So if it turns out that the Powell led fed was clueless, I won’t be surprised.
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1. Trump didn't choose Powell. Someone told him that Powell was the guy.
2. I don't care if Trump chose Powell or not. Powell's successes or failures are his.
3. No, if tariff inflation doesn't show up, Powell will not be a fool. 95% of economists believe that the tariffs will cause inflation. If that is wrong, then it's the economics profession and not any economist to blame.
4. Inflation can manifest itself in many ways. The dollar is already down by 10% since Trump took office. That means we are 10% poorer relative to the rest of the world than we were in January.
5. Remember that economics is a "all things equal" discipline, which is why actual economic measurement and analysis is more difficult than comparing two lines on a spreadsheet. You have to do multivariate regression, at the very least, to examine the effects of different policies.

Right now, there is inflationary pressure from tariffs and disinflationary pressure from the recession that we are either in or will be soon. Remember -- the jobs report last month was sneakily terrible. The job "gains" were illusory or temporary: almost entirely from fewer school teachers moving jobs and increased revenue from the soccer events here. Interest rates are shockingly high and long term they are unlikely to go down no matter what Powell does. It costs money to keep interest rates low, and we don't have much of that any more after the stupid fucking enormously wasteful and mind bogglingly stupid "beautiful" bill.
 
superrific said:
1. Trump didn't choose Powell. Someone told him that Powell was the guy.
2. I don't care if Trump chose Powell or not. Powell's successes or failures are his.
3. No, if tariff inflation doesn't show up, Powell will not be a fool. 95% of economists believe that the tariffs will cause inflation. If that is wrong, then it's the economics profession and not any economist to blame.
4. Inflation can manifest itself in many ways. The dollar is already down by 10% since Trump took office. That means we are 10% poorer relative to the rest of the world than we were in January.
5. Remember that economics is a "all things equal" discipline, which is why actual economic measurement and analysis is more difficult than comparing two lines on a spreadsheet. You have to do multivariate regression, at the very least, to examine the effects of different policies.

Right now, there is inflationary pressure from tariffs and disinflationary pressure from the recession that we are either in or will be soon. Remember -- the jobs report last month was sneakily terrible. The job "gains" were illusory or temporary: almost entirely from fewer school teachers moving jobs and increased revenue from the soccer events here. Interest rates are shockingly high and long term they are unlikely to go down no matter what Powell does. It costs money to keep interest rates low, and we don't have much of that any more after the stupid fucking enormously wasteful and mind bogglingly stupid "beautiful" bill.
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I think things are deteriorating. I think the consumer has been stressed for a while, as evidenced by the pace of credit card balance increases, higher loan delinquency rates, and my experience owning retail stores. Rates needs to come down and they would be absent Trump’s tariffs. He has thrown a monkey wrench in the normal order of operations and how we respond as we move through the business cycle.

Okay, but as you say Powell will stand on his record. If tariffs don’t increase inflation significantly he will have made his second blunder. And this leads to your 3rd point above. Do we need to rethink economic theory?
 
superrific said:
4. The dollar is already down by 10% since Trump took office. That means we are 10% poorer relative to the rest of the world than we were in January.
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Dollar weakening could contribute to inflation, which is your main point. But to say that the dollar declining 10% makes us 10% poorer is misleading. The vast majority of products and services we purchase are American based, and the dollar weakening is irrelevant to those transactions. And when the dollar weakens, it makes American exports more competitive (and domestic alternatives to imports more attractive), which has a beneficial impact on the economy.

Sure, we can afford 10% less foreign assets than January 2025, but that is not a very meaningful way to measure wealth.
 
ChileG said:
If it drops 2% and then TACO happens and it rebounds and goes up 1.5%, the MAGAs will point to the increase and call Trump a genius.
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... but the domestic economy and this country's standing in the world's economic order will be irrevocably damaged.
 
Purple Nurple said:
Okay, but as you say Powell will stand on his record. If tariffs don’t increase inflation significantly he will have made his second blunder. And this leads to your 3rd point above. Do we need to rethink economic theory?
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I suppose. We needed to rethink physics when we discovered that energy was quantized. But let's wait to see if the theory fails. It's not soon enough, given that Trump keeps putting off tariffs and making chaos out of economic policy.

Also, one explanation for lack of tariff-caused inflation (if such a thing were to come about) would be that there's far less market competition than perhaps we thought.
 
lawtig02 said:
Yeah, that's kind of what I'm saying. I have no idea how to weigh all the dynamics happening right now. It's absolute chaos. But while the raw numbers are holding up fairly well for now, I just can't figure out a path that allows them to stay strong 12 months from now. Barring something massively disruptive and unlikely, such as the complete collapse of Russia or China.
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Listening to Mark Cuban on Pod Save America, he agrees that small businesses are hurting and will not have the capital to survive the uncertainty and chaos the tariffs are producing.
 
Calheel said:
Dollar weakening could contribute to inflation, which is your main point. But to say that the dollar declining 10% makes us 10% poorer is misleading. The vast majority of products and services we purchase are American based, and the dollar weakening is irrelevant to those transactions. And when the dollar weakens, it makes American exports more competitive (and domestic alternatives to imports more attractive), which has a beneficial impact on the economy.

Sure, we can afford 10% less foreign assets than January 2025, but that is not a very meaningful way to measure wealth.
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I'm actually thinking more of interest rates. My analysis was of course oversimplified but it's not wrong -- it just depends on why the dollar is falling.

If the dollar falls because foreigners no longer want to buy our stuff, including our sovereign debt, then we have lost wealth relative to the rest of the world. All bonds that were worth X will be worth less than X. I'm talking about wealth, not income. If the dollar falls as part of natural market vagaries -- that's just fluctuations around a mean and the mere fact of fluctuation would not cause us to reevaluate the mean.
 
UNCatTech said:
I really like Cuban. He's got a lot of good ideas and seems to accept and be able to talk with all people.
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He's not a politician, which is good. He's extraordinarily wealthy, and that shapes his view on a lot of policy questions. But I have no doubt his raw intelligence is greater than 99.999% of the population, and he's a bonafide liberal, which makes his voice really important in these conversations, in my opinion.
 
lawtig02 said:
He's not a politician, which is good. He's extraordinarily wealthy, and that shapes his view on a lot of policy questions. But I have no doubt his raw intelligence is greater than 99.999% of the population, and he's a bonafide liberal, which makes his voice really important in these conversations, in my opinion.
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Intelligence is what I look for in leaders above everything else. Communication skills are a close second. He has both in abundance.

I believe had the Harris campaign listened to him more they would have won.
 
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