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Originally Posted by ToothSayer
Tariffs aren't bad enough to crash anything that quickly. The hit to confidence is worse than the tariff impact for now.
More interest rate hikes will crash the corporate debt bubble at some point, but did you see Powell's comments on Wednesday? The market certainly did. That was some pretty dovish comments and a rather fast reversal. There's no way this doesn't give confidence to those who want to buy, which is most of the market. It's got another FOMO bubble in it.
Now all of those orders in anticipation of the tariffs are no longer necessary. Asia already teetering will have another leg chopped out from under it. Europe has no shot of standing without the US and Asia.
Kiss the manufacturing bubble goodbye, the only last real bubble at the moment aside from the employment bubble, which also goes. They were the primary beneficiaries of the tariffs.
Interest rates stay up, so heavy goods and real estate keep crashing.
The credit cycle is in free fall, world wide.
The last to go are stock and real estate prices. Dallas will be annihilated again like in 2015-2016 due to oil prices, and that will sink the heartland.
The stock market is fighting the economy now.
These past two years, best what is this timeline ever. If Trump truly did blink, it was fun while it lasted. Tariffs would have made up for crashing corporate profits with higher employment income. Oh well.
Quote:
Originally Posted by ToothSayer
Long term, as I've correctly said from the beginning to howls of complaint at first, Trump is very serious about bringing China to its knees over its various large scale thefts. And China is not going to give up its theft as it has serious plans to become the 21st century Asian version of 20th century Nazi Germany, and stealing Western tech and manufacturing by theft and extortion is the only way it can get there. China also wants to weaken America economically in furtherance of its aims. Trump will win that fight but it'll involve a lot of pain which will be bad for the markets until China capitulates.
But for now, we have a reprieve.
Trump was serious. He no longer is if he blinked.
The Trump tariffs were the only things keeping the US economy alive. Now we get sucked down with China. They haven't turned their financial system back on yet, so their downturn should go on for another year or two.
He lost his balls.