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On April 05 2025 02:19 oBlade wrote:
When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.)
What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before.
I'm not against the tariffs, just in many cases like China they are too high.Will cause some serious shock, spike inflation.Start with lower tariffs and more importantly only tariffs on finished manufactured goods not blanket tariffs including raw materials for now.US manufacturers using overseas raw materials should not have to bear that extra cost.
As for the debt and the interest, it's a bad situation.The projections i have seen Trump wants around 2.3 trillion in spending cut from federal govt via DOGE, which is great.Problem is he wants over 4 trillion in tax cuts and has repeatedly talked about scrapping income tax.Spending cuts need to be far more than the tax cuts, Very doubtful the tariffs can cover that shortfall.
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United States43210 Posts
On April 05 2025 03:51 oBlade wrote:
Also because they bought back their own stock to prop it up, and then Trump bombed it with tariffs so it dropped anyway which is hilarious
This part was also particularly funny for anyone that understands what a stock buyback is and that companies don't daytrade their own stock. If an individual were to buy Apple shares at a high price only to have the share price nuked then that individual would have an unrealized loss.
If Apple does it then they do not because Apple is not buying Apple shares as an investment because Apple is Apple. When Apple buys Apple shares those shares effectively cease to exist, they're simply reducing the number of shares in circulation, it's a tax efficient way of giving shareholders a constructive dividend, not an investment.
This is admittedly second year accounting stuff but it's still funny.
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On April 05 2025 04:05 KwarK wrote:
Okay but the money they already have that you're going to have them spend on capex is currently in treasuries, right? And your plan is that they're going to take that money out of treasuries and spend it on capex. But your plan is also that they're going to increase the amount of money they hold in treasuries in order to lower rates.
What I'm trying to explain to you is that it can't be both.
I understand you are trying to set up a picture of since I'm saying people sell and move to treasuries, lowering yields, and also people sell treasuries to invest cash in themselves, then yields increase, so in the end nothing would happen because it's a tug of war to nowhere. Is that about right? It's a fine point, from a purely deductive logic standpoint.
At any rate if it were true as such, it would mean while treasuries stay the same, a bunch of speculative capital has been turned into investment via the magic waypoint of treasury bonds. At first glance I'm not convinced that would be a bad thing at all, but your original rebuttal has a more glaring hole.
It's a point so simplified that it's failing to distinguish who holds what money for what reasons, and how much money they hold, and the degree to which different parties are rotating. In a sentence: Investors will put trillions into treasuries and companies will cash out billions for capex as you say. Basically, you didn't include math.
Institutional investors would move to treasuries, lowering yields. Companies holding treasuries might sell them, but companies have cash and liquidities other than treasuries also. The Mag7 I know hold a lot of "cash," pure cash and other liquid assets. I don't know in detail I just know they have more cash than they know what to do with basically. But nowhere near the amount that's at play in the other direction. Not enough to cancel out the yields dropping.
Almost tautologically true. Imagine a hypothetical equities market worth $100 billion. Say the companies within the equities market have all their cash in treasury accounts only. The money they are holding is inherently less than the value of the money that is holding them. Far less. Because they exist as companies outside of the cash in their accounts. If they're at 20x P/E like us now, they might have $10 billion of cash on hand which is a 2 year nestegg. That's a best case picture. The best case is 10:1 imbalance of what you try to tell me is equal to each other and cancel each other out. In the real world that little $10 billion ain't all in treasuries either.
Apple is worth $3 trillion and they have $100 billion in cash not including their debt, which thanks to your assumptive reasoning I've been blessed with the opportunity to look up.
The people holding Apples can sell and move into treasuries at rates grossly exceeding the rate that Apples can sell their measly treasuries to invest in their own operations. There are no flipped examples. That's what the market looks like. There aren't companies that are worth $100 billion but have $3 trillion in treasuries to balance out the scales. Firstly because it's self-evidently preposterous and secondly because Shkreli has already bought and flipped all of them.
On April 05 2025 04:12 KwarK wrote:
Does everyone but oblade understand that the plan of increasing money in the bank is incompatible with the plan of reducing money in the bank? Am I explaining it poorly?
Just like any time you sell a stock, it means someone buys it, so the price never moves!
On April 05 2025 05:08 KwarK wrote:Show nested quote +On April 05 2025 03:51 oBlade wrote:
Also because they bought back their own stock to prop it up, and then Trump bombed it with tariffs so it dropped anyway which is hilarious This part was also particularly funny for anyone that understands what a stock buyback is and that companies don't daytrade their own stock. If an individual were to buy Apple shares at a high price only to have the share price nuked then that individual would have an unrealized loss. If Apple does it then they do not because Apple is not buying Apple shares as an investment because Apple is Apple. When Apple buys Apple shares those shares effectively cease to exist, they're simply reducing the number of shares in circulation, it's a tax efficient way of giving shareholders a constructive dividend, not an investment. This is admittedly second year accounting stuff but it's still funny.
I didn't say Apple took possession of shares of their own stock.
Apple burned their own money to make a number go up for shareholders, and Trump made the number go down, and now Apple also can't unburn the money.
That is funny.
Thinking you're the only one that passed second year accounting so you're forced to misunderstand something fairly obvious is funny too.
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United States43210 Posts
It doesn't matter what happens to the share price after the stock buyback. The process is complete. They didn't burn their money, they returned it to shareholders.
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On April 05 2025 05:21 KwarK wrote:
It doesn't matter what happens to the share price after the stock buyback. The process is complete. They didn't burn their money, they returned it to shareholders.
They returned money to sharesellers. The other point of a buyback is shareholders are now holding fewer shares outstanding, so their shares are supposed to be worth more as well because EPS is higher since the denominator decreased.
That process is poetically sabotaged when an orange guy breaks your supply chain and you're down 25% or more from ATH.
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On April 05 2025 02:19 oBlade wrote:
When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.)
What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before.
The end of the world is nigh! Jesus will return! The War of the Worlds is upon us.
I've been hearing about the dire financial straits of the USA requiring radical change in government behaviour since 1964 though. I can only hear so many of those rousing, stirring speeches before I tune out.
Its like the atomic bomb. People kept hearing about it... and it never happened. For 35 years the media and US government was able to scare people. By the late 80s a nuclear holocaust became a joke of a threat. My dad's university residence held an "End Of the World" party. "Party like there is no tomorrow". Giant posters of mushroom clouds... by 1984 people could not continue taking the nuclear threat seriously. It can only be "2 minutes to midnight" for so long.
The same thing is happening right now with the environment. Sensational media reports of imminent global doom wind up numbing us to standard ecological maintenance we should be doing every week of every year. Things like fisheries management... etc.
The US financial system has been a house of cards for a very long time. The best move: a substantial portion of your life savings should be in precious metals. You'll never get rich and you'll never go poor. Do not wait for the geniuses running the USA to save you. They won't.
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United States43210 Posts
On April 05 2025 05:30 oBlade wrote:Show nested quote +On April 05 2025 05:21 KwarK wrote:
It doesn't matter what happens to the share price after the stock buyback. The process is complete. They didn't burn their money, they returned it to shareholders. They returned money to sharesellers. The other point of a buyback is shareholders are now holding fewer shares outstanding, so their shares are supposed to be worth more as well because EPS is higher since the denominator decreased. That process is poetically sabotaged when an orange guy breaks your supply chain and you're down 25% or more from ATH.
I really struggle to keep up with your moving goalposts but if I'm following you then it's good because although Apple just returned the money to their shareholders and didn't actually lose any money you're still cheering the process on because earnings are down which is good?
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On April 05 2025 05:35 KwarK wrote:Show nested quote +On April 05 2025 05:30 oBlade wrote:On April 05 2025 05:21 KwarK wrote:
It doesn't matter what happens to the share price after the stock buyback. The process is complete. They didn't burn their money, they returned it to shareholders. They returned money to sharesellers. The other point of a buyback is shareholders are now holding fewer shares outstanding, so their shares are supposed to be worth more as well because EPS is higher since the denominator decreased. That process is poetically sabotaged when an orange guy breaks your supply chain and you're down 25% or more from ATH. I really struggle to keep up with your moving goalposts but if I'm following you then it's good because although Apple just returned the money to their shareholders and didn't actually lose any money you're still cheering the process on because earnings are down which is good?
The denominator of earnings per share is not earnings.
When you "return" money to a shareseller buying a share to take it out of the market, the money stops being yours. If part of the reason behind that is to raise stock prices against selling pressure and show how well your company is doing by making the share price go up because you decreased the number of shares (artificially during years of stagnant earnings with no new products), and then shortly thereafter the share price you pushed up drops a large amount anyway, that is funny because you have failed in one of the goals you spent money for, and the lit on firetorcheddonated returned money is also irretrievable.
They could have just kept the money and let the share price drop with the same result.
There are no goalposts, I said something was funny and we're on a quest to explain to you what it is. There's no goalposts because there's no argument.
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United States43210 Posts
Ok, you're still just not understanding what a buyback is so let's go back to the last one.
The plan is to increase domestic manufacturing by increasing investment in domestic manufacturing by increasing the costs of investment for US companies, reducing their available capital, and creating a high degree of uncertainty? Do you see why the capital flight to treasuries, the reduced available capital for corporate bonds, the reduced investment in equities, and the uncertainty, all of which you're cheering on as part of the master plan to reduce borrowing costs, might not align with the master plan for manufacturing?
If we're going to make all this stuff locally rather than importing it then we're going to need some capital investment. And if we're not going to do the capital investment anymore then the tariffs are just huge tax hikes on Americans with no purpose.
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Ontario Canada has started floating this same idea. I hope a few countries agree to this ... Trump declares "victory" ... and we can go back to living a normal life.
I suspect history will put these tariffs right up their with the Reagan regime's laffer curve.
Trump does not realize it ... he is worshipping his hero in real time.
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Usually it‘s simpler than it appears. If the market crashes, it means that people who know their shit are getting into cash.
When there‘s the opportunity to buy on the cheap again, Trump‘s billionaire pals swoop in and increase wealth disparity further. Because Trump doesn‘t want a balanced economy with actual competition, he wants the ones loyal to him to succeed and dominate it.
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Down from the oppressive whopping ~5% they were before 🤦♂️ (not the 90% from Trump's made up numbers)
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United States24740 Posts
On April 04 2025 19:46 Sent. wrote:
I agree that bringing up uninhabited islands is a bad argument in this context. It's easy to counter and doesn't do much to convince people on the fence.
Normally when you roll out a bunch of high-profile things and one of them is obviously really stupid, it calls into question the legitimacy of the other things. Like, when I'm preparing a to-be-published report, and I have a stupid typo on page 1, my boss gets very upset with me because now the public won't trust the contents of pages 2-50.
I actually agree there's not much point in focusing on how stupid it is to tariff penguins at this point. It's not a "bad argument." It's that the opposing side you are arguing against is immune to arguments, whether good or bad, and they actually have obviously much more egregious typos on later pages that have already been identified, so who cares about the small typo on page 1.
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IF THE NATION CUTS THEIR TARIFF ON US IMPORTS TO ZERO! The mindfuck of people who can't consider the possibility that the other nation either won't or can't do that for their own survival. Politically it would be suicide for any democracy to capitulate to the great power and any autocracy knows they just have to survive a year and a half for the midterms to come to America and watch the republicans get swept out of power in the greatest landslide ever.
You can't use leverage when you're telling someone you're just doing this for leverage. You're not going to come to a mutally agreeable solution if you're so much of an asshole you decide to go golfing isntead of overseeing war dead coming back to the states.
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On April 05 2025 02:19 oBlade wrote:Show nested quote +On April 04 2025 22:57 JimmyJRaynor wrote:another perspective from "the right" on Trump's tariffs. Thomas Sowell... + Show Spoiler +There are many hard right tall foreheads like Thomas Sowell and Warren Buffett who normally speak in very restrained measured ways screaming from the hilltops that Trump's tariff policies are very bad. It is one thing when moron talk show hosts on CNN or MSNBC read the hyperbole on the teleprompter and adhere to a set of pre-written talking points made for them by the producers. It is a whole other ball game when guys like Warren Buffett and Thomas Sowell trash your policies. Sowell does give Trump one out. If these tariffs are temporary to achieve a very specific goal. Goals such as getting Canada to spend 2.5% of GDP on military or the goal of getting Mexico to secure the border. So far, the tariffs seem more like Trump and his team are fumbling around in the dark with no end game. The tariffs have a very accessible justification, and endgame, which was figured out months ago by most people who were just open minded and paying attention and not wearing any blinders or looking too deep. This is not a dig at anyone, I just mean there have been people since last year going oh his plan must be this. The uncertainty, and decrease in demand, hurt revenues of people doing business in ways that send money abroad (in general). They hurt stocks as people move from speculation to safety, which is treasury bonds. Because of the increased demand of treasury bonds, yield rates fall. (If this seems counterintuitive, or doesn't add up, imagine this. You want a loan, but only one person has money. They will screw you on interest. But if everyone wants to give you the loan, the person you finally get the deal with will end up with a much lower interest rate, and so they will be getting less money from the arrangement than in the less-competed case.) When yield rates fall, the government can refinance debt favorably, saving hundreds of billions/trillions in future budgets, which: 1) combined with savings from cutting waste and streamlining government 2) combined with increased revenues from the tariffs puts the US government in a much more fiscally healthy position, and 3) combined with immigration policy and tax cuts and onshoring because of domestic competition with imports and new trade alignments puts the US worker in a better place, and 4) combined with tax cuts that also become affordable due to having more federal revenue from tariffs, as long as the fed doesn't increase rates, should tentatively lead to (the start of) bull markets and growth in 2026/2027 range. That's approximately the planned trajectory. If the fed were to raise rates in the middle of all this when treasury yields are dropping, that would certainly lead to an unpredictable situation. There is absolutely a risk of pain associated with this. More like an expectation of it, with some chance of lack of it. But the range of possible pain is wide so the severity depends on how markets adapt. The plan as such is simple to digest once it clicks, like I said people worked it out last year or so, it's not something you can run on explicitly, "My fellow Americans, I'm going to tank the stock market to fix the fiscal situation," but putting together the pieces from his different allusions and interviews, people predicted it. When Sowell, et al. criticize tariffs due to the 1930s, while correct, they are being a bit myopic, rigid, and uncreative. Tariffs were very successful in the 19th century, when the US was industrializing, they protected industries and brought in revenue to pay off the massive Civil War debt. In the 1930s the US was an exporter but mostly pretty balanced, and didn't have a huge sustained national debt it needed to pay down. (And you need to pay it down. Governments are not special exceptions as being the only things that don't actually need to pay their debt.) What's different now is debt is approaching 1.5x GDP (by approaching I mean the train is not stopping, national debt will be 150% of GDP) and the government is close to spending $1 trillion per year simply on interest for the debt, which would be higher than defense spending. If you don't fix that now, you quickly get into a runaway situation where all you're doing is paying interest on debt. Trump's plan is untested. The use of tariffs to force treasury yields to plummet has no historical analogue. Because such a move has never been necessary: the confluence of circumstances we have now had never occurred before.
How long will it take for these benefits to occur? Do you believe Trump has the patience? How will you be able to tell if it was worth the economic "pain" that you will all incur in the meantime?
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On April 05 2025 01:37 Falling wrote:
Actually, another piece that fits with the theory that they used AI for their trade policy is I guess the tariffs are not broken down by country but by top level internet domain.
Reunion Island and Gibraltar should not have been separated out from France and the UK if you had humans drafting the trade policies.
But their domain names are .re and .gi respectively.
Penguins have .hm domain
And the military base is .io
AI wouldn't necessarily know the difference. But a human that knew a thing or two about geo-politics (hopefully a requirement in the State department) ought to have spotted the problem with their populated list of tariff targets.
I'm curious if we will look back on this time and see it as big moment in slowing down AI adoption. I think these massive blunders will stick with people when they think of AI and will cause people to be very (maybe overly) cautious in adopting it.
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I dont think most people are paying that close of attention, most people just see the Teehee We're Desecrating Miyazaki Teehee Toys and thats their only direct interfacing with AI.
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On April 05 2025 09:07 Zambrah wrote:
I dont think most people are paying that close of attention, most people just see the Teehee We're Desecrating Miyazaki Teehee Toys and thats their only direct interfacing with AI.
It doesn't have to resonate with everyone just the decision makers.
Like I get how blind people are that when I read JFK jr say that he always planned to fire way to many people and then hire some back, that 50% of America either believes it or pretends they do. But I don't think actual business owners are going to do it themselves. They know deep in their cockles that it was a huge expensive embarrassing mistake.
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I hope the Nintendo Switch 2 ends up being 40% more expensive in the USA than in Canada and people end up smuggling it over the border.  It'll be interesting to see if Nintendo pulls off that kind of "fuck you" move on the US government.
I will start smuggling avocados over the border if i have to if i am "caught" i'll just say i forgot or didn't know or whatever. I ain't payin' whatever the new tariff will be plus $2.25 USD for 1 fucking avocado.
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EPT
