The trade war is escalated to next level. Is this the start of recession? Are you riding out the wave? Transferring to gold? bonds?
Recession?
- Thread starter hununuh
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Bitcoin babaaaaaaaay #blockchain
... Just kidding. Just waiting it out like the other blips.
... Just kidding. Just waiting it out like the other blips.
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Nobody knows anything. Over the remainder of my lifetime I expect the USA to be here and to continue to grow. (I figure if it doesn't, I'll have things other than IRA balances to be concerned about.) Ups and downs in 2019 won't mean much to me in 2049.
I buy every month - tilted toward whatever happens to be down (or up less) in order to maintain approximately the same asset allocation. There's no thought to it so I don't think about it.
I buy every month - tilted toward whatever happens to be down (or up less) in order to maintain approximately the same asset allocation. There's no thought to it so I don't think about it.
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I’m In the market for at least five more years. I have hit my FU acct minimum number this year but I trying to pad it some.
China is a cornered animal, and they're lashing out.
They originally hoped to get a deal after the 2020 election and they hoped for a Democrat that would just bend over like past presidents. Now Trump is turning up the heat and pushing China hard, but China is trying to save face and refusing to give up.
The problem for China is that their economy is dependent on the United States, but the United States is not dependent on China. The US will win.
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I support Trump’s China trade policy. However, Xi Jinping has been in office since 2012. He has overseen a large economic expansion, consolidated power and will most probably remain in power for decades. He’s playing a long game knowing Trump will term out even if he wins re-election. We are handicapped relative to China because of our democratic 2 party system. As we have witnessed over the past 40-50 years, they have organized succession and can execute long term economic and social strategies which are basically impossible for a democracy.
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What gives you the idea of a recession?
China already doesn’t buy much from the US. I can’t imagine much difference between barely nothing and nothing.
Seems like business as usual to me. I wouldn’t be surprised if the stock market makes new record highs as soon as the China news is digested.
I keep buying as usual.
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Unless the next person follows suit
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The last time the stock market was this low was June 5th-6th. If you were not panicking then, do not panic now.
Here is a common Boglehead phrase to help you through. "Don't just do something, stand there!" Turn off your computer. If you follow the financial news, stop. They will not help you one iota. It is like getting medical advice from a seller of essential oils. Do not check your balances for at least a month, possibly a year. Now is not the time to adjust your asset allocation. Re-read your financial plan.
Some definitions.
A recession is a negative GDP for 2 successive quarters.
A correction is a stock market pull back of >10% from a recent peak.
A bear market is a stock market pull back of greater than 20% from a recent peak.
In the course of a normal investing lifespan, you may live through 5-10 bear markets and many more corrections. None of them should trouble you.
Here is a common Boglehead phrase to help you through. "Don't just do something, stand there!" Turn off your computer. If you follow the financial news, stop. They will not help you one iota. It is like getting medical advice from a seller of essential oils. Do not check your balances for at least a month, possibly a year. Now is not the time to adjust your asset allocation. Re-read your financial plan.
Some definitions.
A recession is a negative GDP for 2 successive quarters.
A correction is a stock market pull back of >10% from a recent peak.
A bear market is a stock market pull back of greater than 20% from a recent peak.
In the course of a normal investing lifespan, you may live through 5-10 bear markets and many more corrections. None of them should trouble you.
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This is 100% inaccurate.
The problem with this trade war is that in the US, there is an electorate who will decide if they like the effects of a trade war while in China, there is no electorate. The central planning committee will do what it damn well pleases and if the economy sucks and people lash out, well, that's what the military is for...
It was stupid to enter the trade war and now they're both cornered but Trump has elections to deal with in a year. He'll feel the heat well before China does.
Also, we are DEEPLY dependent on China for both imports but also as a huge market for our exports, including agricultural products.
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Just one example of many. We have forfeited a lot of production capability which has security implications. OTOH they probably need our soy to feed their pigs. We are very much interdependent.
Swine fever in China raises concern over heparin supply for US
The US supply of heparin, an ingredient used in anticoagulant drugs and found in pigs, is under threat due to an outbreak of disease in Chinese herds.
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I think this is much more likely to be the start of a bear market than of a recession. Stock prices may be jittery and they can certainly tank quickly under these scenarios, but that is different than the US GDP tanking. We could have a recession in the next 1-2 years, but the technical indicators of that happening aren't very likely yet.
Xi Jinping is also dealing with social unrest in Hong Kong, millions of uyghurs in concentration camps in Xinjiang, an artificially inflated economy with enormous bubbles in real estate.
The real estate situation in China is likely the downfall of China if it implodes. You think '08 America was bad? China says "hold my tsingtao".
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Isn’t it all circular? We are talking about food. It’s not like China will not buy food anymore. They will buy from another country, let’s say Brazil, who in turn will not be able to sell to another country, let’s say South Africa, who will end up buying from the US.
And if you think the actual Chinese real estate properties are worth anything close to their supposed value, think again. The quality of everything is so subpar that the average example would probably not be approved in inspection in the United States.
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Noyac is FI.....and it’s gone.
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For once I totally agree with you. China is not in an enviable position.
The great Chinese ascendancy is not the inevitable thing people would have us believe. I personally think they're screwed for at least another 2-3 generations. And not just sorta screwed, but Royally Screwed.
the only thing unique to China, though, is that their one political party is insulated from any negative effects to their economy. Politically they can do almost anything they want with no repercussion unless they are overthrown which is relatively unlikely given their stranglehold over the police and military.
The surveillance state in China would make Orwell blush. China's government assumes that with enough control, they can head off and potential rebellion. Unfortunately for the state heads, there's over a billion people in the country, and if the people want a rebellion, they're can make one happen.
Hong Kong is a perfect example of what sheer numbers can be capable of. Would China dare do Tiannamen 2.0?
When China's real estate bubble implodes, full scale rebellion would be highly likely.
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People REALLY are missing this point. This is all that matters.
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It's not all about food at all, see the attachment.
And as for food, it's not at all circular. Not every country out there eats what we're selling, for starters.
Attachments
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The idea that the Chinese populace can overthrow their government is just incredibly naive. What evidence do you have for this being possible?
And Hong Kong is a totally different situation. For starters, it's an relatively autonomous democracy. Politics of Hong Kong - Wikipedia
I didn't say that they could overthrow the government, just that there would be rebellion.
People who lose most of their "wealth", with no hope for the future, can get desperate enough to participate in riots, attacks on police, attacks on government officials and government buildings.
I think you have a naive view to think people won't lash out in desperation, ignoring thousands of years of political history.
There are plenty of government officials in the United States scared about an armed population... No wonder they want to disarm the citizenry.
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Hundreds of millions chinese citizens had no economic prospects for generations. Many still do have very limited prospects. No one came out with pitch forks.
As in many communist countries, the state controls the news and therefore the "facts". Makes rebellion very difficult. As an example, why do you think North Koreans haven't revolted?
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Not sure if you realize that attachment doesn’t shine light into the food component of trade. It doesn’t.
As for the food, do you think Brazil was growing grains to throw them away because China wasn’t buying from them? And once China buys from Brazil now the US will throw the grain away? That’s ******ed. The world consumes an X amount of grain, which is produced by several countries. How they buy from each other is irrelevant.
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I did realize that. I specifically said the trade argument isn't all about food.
As for the food component, the issue is that there are established export markets for a reason, including demand and logistics. Once you alter those markets, you don't just find a new market. It doesn't work that way. US agricultural commodity prices have taken a huge hit since this all began, and it doesn't look too be getting better with China now dropping out of all US agricultural exports.
As for your argument, Brazil isn't throwing away their grain of no one is buying it. They simply don't grow as much. Same will happen to the US if China buys from Brazil instead of us. We'll grow less and Brazil will grow more to meet the demand from their new trade partner.
China's exit from US agriculture is a devastating blow to an already struggling sector
China is officially pulling out of U.S. agriculture and it could cause ripple effects throughout the American economy.
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I’ll raise your doom and gloom article for one with a dose of reality:I did realize that. I specifically said the trade argument isn't all about food.
As for the food component, the issue is that there are established export markets for a reason, including demand and logistics. Once you alter those markets, you don't just find a new market. It doesn't work that way. US agricultural commodity prices have taken a huge hit since this all began, and it doesn't look too be getting better with China now dropping out of all US agricultural exports.
As for your argument, Brazil isn't throwing away their grain of no one is buying it. They simply don't grow as much. Same will happen to the US if China buys from Brazil instead of us. We'll grow less and Brazil will grow more to meet the demand from their new trade partner.
China's exit from US agriculture is a devastating blow to an already struggling sector
China is officially pulling out of U.S. agriculture and it could cause ripple effects throughout the American economy.www.cnbc.com
American farmers say China can't meet its future demand for soybeans without the US
U.S. soy farmers caught up in trade disputes between the U.S. and China that escalated over the weekend say they’re weathering decreased business from the globe’s largest soy importer. But these farmers remain confident China’s tough stance on trade will prove unsustainable.
finance.yahoo.com
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North Koreans haven't lost a so-called high quality of life like the Chinese middle class will soon.
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You know, it's rather concerning how much control the president has over the economy. Already, the Fed decided to cut the rates, which prompted calls for an independent Fed. And now, the influence of the stock and bond markets by escalating the trade war is resulting in an inverted yield curve, which is a strong indicator for an upcoming recession.
markets.businessinsider.com
The US economy might be fine. After all, the job market, consumer spending etc. continue to grow strong. But the escalating trade war is resulting in more subsidies being spent on farmers to prevent the damaging impact of China's retaliation. Trump apparently has a lot of control here so he can navigate it to prevent damaging his reelection prospects. But the extent of control over the economy is a bit worrisome, since the economy is getting increasingly politicized.
The market's favorite recession indicator just flashed its starkest warning since 2007
The yield curve's latest signal has been driven by falling 10-year US Treasury yields, which are at their lowest level since November 2016.
markets.businessinsider.com
The US economy might be fine. After all, the job market, consumer spending etc. continue to grow strong. But the escalating trade war is resulting in more subsidies being spent on farmers to prevent the damaging impact of China's retaliation. Trump apparently has a lot of control here so he can navigate it to prevent damaging his reelection prospects. But the extent of control over the economy is a bit worrisome, since the economy is getting increasingly politicized.
You know, it's rather concerning how much control the president has over the economy. Already, the Fed decided to cut the rates, which prompted calls for an independent Fed. And now, the influence of the stock and bond markets by escalating the trade war is resulting in an inverted yield curve, which is a strong indicator for an upcoming recession.
The market's favorite recession indicator just flashed its starkest warning since 2007
The yield curve's latest signal has been driven by falling 10-year US Treasury yields, which are at their lowest level since November 2016.
The US economy might be fine. After all, the job market, consumer spending etc. continue to grow strong. But the escalating trade war is resulting in more subsidies being spent on farmers to prevent the damaging impact of China's retaliation. Trump apparently has a lot of control here so he can navigate it to prevent damaging his reelection prospects. But the extent of control over the economy is a bit worrisome, since the economy is getting increasingly politicized.
The best time to make big moves is when you're doing very well since you can absorb the downside more easily.
Tiananmen 2.0? Would they? They could do that any time they wanted and wouldn't bat an eye. They don't even have a free internet in China. The people could have a rebellion if they wanted, but they can't even figure out who is on their side since China has so many internet monitors and censors patrolling everything from chatrooms to text messages. They bribe people to spy on their own neighbors so nobody can trust anybody. Hard to organize a billion people to rebel when you can't trust more than maybe 3 or 4 people.
China doesn't have a real estate bubble in the sense that the US did since they have state control of so many industries and companies. The government can internally prop up whatever they want including housing prices.
You cannot apply basic economic theory to a state like China.
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In Venezuela, they have lost more than most Chinese will ever have. Who's still in charge there? And that's in a democracy!
Venezuela is a communist dictatorship with sham elections, and they're in the throes of revolution....
China can try all the central government controls they want, but when people stop paying their mortgages because they're 50% underwater, those controls will fail. What are they going to try instead? Imprisoning people who don't pay their mortgages?
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I think close to 90% of homeowners in China don’t have mortgages although their government is trying to get young people to borrow money for real estate as an economic stimulus. Average Chinese don’t have any debt. China is truly a different world.
It's silly to use percentages when 10% is 138,000,000 people. That's a lot of people.
And what happens when banks are insolvent? When people stop spending money? You think only 10% are affected by that?
as pointed out, mortgages in China are rare. And if someone doesn't pay? The government will do whatever they want. It's not like a government owned bank can fail if people aren't paying back loans. It can't go "insolvent" because they can just print more money.
It's a different set of rules when you can nationalize whatever company or industry you want.
As long as the rest of the world continues to buy all the cheap stuff they make, they will have all the economic tools they need to do whatever the hell they want.
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deleted50478
China is not and has never been a communist country. Their single party does call itself communist but has never worked toward proletarian rule, much less a communist state.
their communisty party is dedicated solely to preserving their own power. They don't really care who has to suffer inside or outside China as long as they meet that goal.
Did that work out ok for Zimbabwe?
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All land, banks, and media in China are 100% owned by the state. The economy is "planned" by the state. There is absolutely zero opportunity for dissent or opposition voices. There is one political party.
Seems pretty communist to me.
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deleted50478
You need to review the definition of communism.
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deleted171991
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deleted171991
All single-party (and all autocratic) systems are dedicated to preserving their own power. Obviously.
you ever bought something made in Zimbabwe? Probably not. Yet I'm pretty sure you are replying to this thread with at least some component produced in China.
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I think nimbus's account has been taken over by Russian bots.
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Agree if he’s gonna play tough guy, he needs to be tougher than this.
www.cnbc.com
Trump just blinked, giving China a possible edge in trade war, Jim Chanos and others say
"Tell me why Xi should not continue to wait out The World's Greatest Negotiator, who keeps 'dealing' with himself?" says Jim Chanos.
