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Stock Market/Investing/Fin Planning Catch-All

  • Thread starter Thread starter heelslegup
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So for fun, what are the things that Trump or those under Trump's authority could do to cause a major stock market fall.

Some I can think of:

  1. Fires Powell
  2. Invades a sovereign nation causing sanctions.
  3. Sends Europeans to El Salvador causing sanctions. (This might be a stretch.)
  4. New fed chair slashes rates during rising inflation causing a negative chain effect (after maybe experiencing an initial rise).
  5. Causes the European Union to declare that the US regime is an authoritarian regime.
All just for discussion. I am not interested in arguing about the probability of these occurring.
 
ChapelHillSooner said:
So for fun, what are the things that Trump or those under Trump's authority could do to cause a major stock market fall.

Some I can think of:

  1. Fires Powell
  2. Invades a sovereign nation causing sanctions.
  3. Sends Europeans to El Salvador causing sanctions. (This might be a stretch.)
  4. New fed chair slashes rates during rising inflation causing a negative chain effect (after maybe experiencing an initial rise).
  5. Causes the European Union to declare that the US regime is an authoritarian regime.
All just for discussion. I am not interested in arguing about the probability of these occurring.
Click to expand...
Toggles Trump's economic policy back on.
 
The good news is that Trump will not be able to continue crashing the markets today...

I guess that's why we are calling today Good Friday ?
 
superrific said:
They are wildly fluctuating in value because of complete uncertainty as to what is happening with US economic policy. The problem with debt is that the upside is limited but the downside isn't really. While the treasury isn't going to go bankrupt, there are major concerns about fiscal solvency.

Remember that story about how the IRS says tax collections will decrease by $500B because DOGE? I've been skeptical but let's say it's true. Well, that thrusts the debt ceiling issue to the forefront more quickly than anyone anticipates. Treasury won't run out of money in June; it will run out in early May (perhaps) and suddenly the ceiling needs to be raised. Think the GOP could get that done in an emergency?

Point is, a lot can go wrong with treasuries and you're not getting much upside at 4%.
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But aren’t you locking in the rate with treasury bonds for the duration of the term, just like with CDs? How realistic is it to think that in a 3 or 6 month term, the treasury would run out of money and I’d be shit out of luck and not recover my investment? Is it not federally insured?

I’m admittedly pretty naive to these concepts but this sounds a bit far fetched. Although I understand that with this orange a-hole running wild, strange things are happening.
 
When is the SEC going to start looking into insider trading with these fluctuations of the market caused by changes in tariff policy?
The public is taking a bath, but I sincerely doubt that insiders aren't profiting from advance knowledge.
 
duluoz said:
But aren’t you locking in the rate with treasury bonds for the duration of the term, just like with CDs? How realistic is it to think that in a 3 or 6 month term, the treasury would run out of money and I’d be shit out of luck and not recover my investment? Is it not federally insured?

I’m admittedly pretty naive to these concepts but this sounds a bit far fetched. Although I understand that with this orange a-hole running wild, strange things are happening.
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1. No, US debt is by definition not federally insured. An organization cannot usually insure its own debt.
2. It depends on how you buy them. In an ETF, the term never arrives -- the bonds are just rolled over. So your return is going to be interest and whatever happens to the value of the bonds. The bonds can lose value quickly.

3. If you hold the treasury to term, then yes you've locked in your rate like a CD. I'm personally not a fan of CDs. They are, ironically enough, federally insured, lol (though in a huge crash, federal insurance might not mean much).
 
mynameisbond said:
When is the SEC going to start looking into insider trading with these fluctuations of the market caused by changes in tariff policy?
The public is taking a bath, but I sincerely doubt that insiders aren't profiting from advance knowledge.
Click to expand...
1. The SEC will be taking a four year moratorium on investigating pretty much anything dealing with insider trading.
2. I'm not even sure the SEC has jurisdiction over Congressional insider trading.
 
BlooVooDoo said:
They lurk
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If there's one thing I've learned from 25 years of reading political message boards, it's that many posters who don't post nonetheless continue to read the boards on a regular basis, even while their anger and bile builds up against those who are posting. And in most cases the absent posters who still read the boards are conservatives who are no longer willing to post because they can no longer effectively defend the policies and actions of Republican leaders against the board liberals. So instead, as you said they just lurk, and fume and occasionally do post to lash out at board liberals. When the old IC ZZLP was deactivated it was something over its last couple of weeks reading all of the Trumper posters who flooded the board - many of whom had either never posted but read the board regularly, or Trumpers who had not posted in years but still lurked - to vent and rant and rave about how glad they were that the board was being shut down because it was dominated by liberals and was so unfair to them and they just hated the board even though they couldn't keep themselves from reading it all the time. The resentment of so many Trumpers is very real.
 
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Let’s say Powell was fired and the new fed chair tried to lower rates. They could lower the fed funds rate but could their attempts to lower other rates fail as people flee US dominated debt?

They could buy treasuries but if people started fleeing those treasuries wouldn’t that drive up the interest rates anyway?

Inform me please.
 
superrific said:
2. It depends on how you buy them. In an ETF, the term never arrives -- the bonds are just rolled over. So your return is going to be interest and whatever happens to the value of the bonds. The bonds can lose value quickly.
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Not sure what you mean by “how you buy them…” Through a standard retail brokerage/investment firm like Schwab, Fidelity, etc. that offers 3, 6, 9 mo terms and beyond, with rates that appear to me to be locked in for the term.

And no, there would be no need to access those funds ahead of the term’s end… they would stay there for the duration.
 
duluoz said:
Not sure what you mean by “how you buy them…” Through a standard retail brokerage/investment firm like Schwab, Fidelity, etc. that offers 3, 6, 9 mo terms and beyond, with rates that appear to me to be locked in for the term.

And no, there would be no need to access those funds ahead of the term’s end… they would stay there for the duration.
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Well, technically I should have said depends on how you buy the exposure. you can buy T-bills on ETFs, I'm pretty sure.

All government debt has locked-in rates, that's true. And if you're choosing between a T-bill and a CD, I'd agree the T is probably better just for the taxes.
 
Mulberry Heel said:
If there's one thing I've learned from 25 years of reading political message boards, it's that many posters who don't post nonetheless continue to read the boards on a regular basis, even while their anger and bile builds up against those who are posting. And in most cases the absent posters who still read the boards are conservatives who are no longer willing to post because they can no longer effectively defend the policies and actions of Republican leaders against the board liberals. So instead, as you said they just lurk, and fume and occasionally do post to lash out at board liberals. When the old IC ZZLP was deactivated it was something over its last couple of weeks reading all of the Trumper posters who flooded the board - many of whom had either never posted but read the board regularly, or Trumpers who had not posted in years but still lurked - to vent and rant and rave about how glad they were that the board was being shut down because it was dominated by liberals and was so unfair to them and they just hated the board even though they couldn't keep themselves from reading it all the time. The resentment of so many Trumpers is very real.
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Unfortunately, there are no thoughtful and informed conservatives who come to the board who are willing to join with liberal posters and create a dialectic whereby there is a dialogue between posters holding different points of view about various issues but are willing to seek the "truth" through reasoned argument.
 
superrific said:
1. The SEC will be taking a four year moratorium on investigating pretty much anything dealing with insider trading.
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The last week of Trump's term is going to be the most incredible display of pardons the country has ever seen.
 
ChapelHillSooner said:
Let’s say Powell was fired and the new fed chair tried to lower rates. They could lower the fed funds rate but could their attempts to lower other rates fail as people flee US dominated debt?

They could buy treasuries but if people started fleeing those treasuries wouldn’t that drive up the interest rates anyway?

Inform me please.
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The fed has a lot of tools available to manipulate rates. The problem isn't the rates - it's how those tools can lead to other problems in the economy most notably runaway inflation.
 
ChapelHillSooner said:
Let’s say Powell was fired and the new fed chair tried to lower rates. They could lower the fed funds rate but could their attempts to lower other rates fail as people flee US dominated debt?

They could buy treasuries but if people started fleeing those treasuries wouldn’t that drive up the interest rates anyway?

Inform me please.
Click to expand...
1. The Fed is thought to have control over short-term rates through its open market operations. Long term rates, not really. One model of long-term rates is to think of them as a series of short-terms. Thus, if the market thinks a recession is coming, the market then thinks the fed will lower rates in the future and thus long-term rates can plunge below short-term rates -- the so-called inverted yield curve.

But I don't think that's a satisfying model. It's like Newtons laws -- it's fine for ordinary times, but in more extreme situations it breaks down.

2. In general, the Fed cannot defeat the market. If the market wants rates to be 9%, and the Fed tries to hold them at 5%, the Fed will run out of money. This has happened many times in the currency context (which is closely related to interest rates). The Bank Of England kept trying to prop up the pound in the late 80s, and kept failing, and that's how George Soros made so much money (shorting the pound). The Asian financial crisis was set off (not caused by) Korea's attempt to protect its currency rate; it ran out of money and had to come to NY for a bailout.

3. So your last question is best answered in the affirmative.
 
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