Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

I feel self driving vehicles can be made very safe, so that may not be a future issue.

I see more rapid adoption. The aging and rebellious baby boom generation will not want to give up any freedom of movement even though they may not have reaction time, vision acuity, or desire to drive interstate racetracks. I envision very rapid adoption by this large generation.

taking away the keys is often a very difficult and upsetting event. a cost-effective alternative that promotes continued independence while maintaining safety will be very welcome. there will be the question of whether to own or use an uber-style service, but that will be secondary.

I also see the millennial generation adopting self driving vehicles based on costs, convenience, and parking fees in cities.

my millenial son lived in dallas for a year- we gave him a car we'd used for a number of years. he then moved to nyc and in the process gave us back the car. he used subways, taxis and uber, plus a lot of walking. having a car there is a nightmare unless you are wealthy enough to afford your own parking space.

e.g. For Parking Space, the Price Is Right at $225,000

[GRG55]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

taking away the keys is often a very difficult and upsetting event. a cost-effective alternative that promotes continued independence while maintaining safety will be very welcome. there will be the question of whether to own or use an uber-style service, but that will be secondary.



my millenial son lived in dallas for a year- we gave him a car we'd used for a number of years. he then moved to nyc and in the process gave us back the car. he used subways, taxis and uber, plus a lot of walking. having a car there is a nightmare unless you are wealthy enough to afford your own parking space.

e.g. For Parking Space, the Price Is Right at $225,000

It was the same for the four years I had a flat in London, UK. It's the one place I have lived where it is a hassle TO have a car (or even a motorcycle). The Underground, the Heathrow Express train, and the occasional taxi worked perfectly. And LOTS of walking. I lived in Kensington, and Central London, with so much green and lots of park space, was very pleasant to walk except on the few days of seriously inclement weather each year.

For those living outside the core of a city, using public transit usually requires a very organized, regimented personal schedule governed by the transit schedules. I am not one who naturally gravitates to that sort of thing.

[llanlad2]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

This is just a face saving move by Xi.

It appears to me that Trump's goal might be to make it more expensive for America companies to bring in goods into the US from China, encouraging them to move some production out of China into the US. For example, assembly might be done in the US or Mexico instead of China.




Europe has already bottomed, hard to imagine what else could cause a new crisis in Europe?

Anyway, I don't think Trump wants a strong US$. He wants Americans to buy less imported crap. A strong US$ will not help.

Here is the full list of food items that are subject to additional tariffs.

1	Dried coconut	15%
2	Coconut without inner shell	15%
3	Other coconut	15%
4	Unhulled Brazilian nuts	15%
5	Shelled Brazilian nuts	15%
6	Unshelled cashews	15%
7	Shelled cashew	15%
8	Unshelled almonds	15%
9	Shelled almonds	15%
10	Hazelnuts	15%
11	Unshelled hazelnuts	15%
12	Unshelled walnuts	15%
13	Walnut kernels	15%
14	Unhulled chestnut	15%
15	Other shelled chestnuts	15%
16	Unhulled pistachio fruit	15%
17	Hulled pistacchio nut	15%
18	Other unhulled macadamia nuts	15%
19	Roasted macadamia nuts	15%
20	Betel nut fruit	15%
21	Pine nuts	15%
22	Other fresh or dried nuts	15%
23	Fresh or dried plantain	15%
24	Other fresh or dried bananas, except for plantains	15%
25	Fresh or dried dates	15%
26	Fresh or dried figs	15%
27	Fresh or dried pineapple	15%
28	Fresh or dried avocado	15%
29	Fresh or dried guava	15%
30	Fresh or dried mango	15%
31	Fresh or dried mangosteen	15%
32	Fresh or dried orange	15%
33	Other citrus (including mandarin orange and satsuma orange)	15%
34	Clementine orange	15%
35	Virgin orange and similar hybrid citrus	15%
36	Grapefruit, including pomelo	15%
37	Lemons and limes	15%
38	Unlisted citrus fruits	15%
39	Fresh grapes	15%
40	Raisins	15%
41	Fresh watermelon	15%
42	Fresh cantaloupe	15%
43	Papaya	15%
44	Fresh apples	15%
45	Fresh pears and pears	15%
46	Other fresh pears	15%
47	Fresh sour cherries	15%
48	Other fresh cherries	15%
49	Peaches, including nectarines	15%
50	Fresh plum and prunes	15%
51	Fresh strawberries	15%
52	Fresh raspberry, blackberry, mulberry and loganberry	15%
53	Fresh cranberry and cowberry	15%
54	Kiwi	15%
55	Fresh durian	15%
56	Persimmon	15%
57	Fresh lychee	15%
58	Fresh longan	15%
59	Rambutan	15%
60	Fresh sweet lychee	15%
61	Fresh carambola	15%
62	Fresh lotus fog	15%
63	Fresh pitaya	15%
64	Fruits not listed	15%
65	Frozen strawberries	15%
66	Frozen raspberries, blackberries, mulberries, rose hips, currant and gooseberries	15%
67	Frozen fruits and nuts, not listed	15%
68	Temporarily preserved cherries	15%
69	Other temporarily preserved fruits and nuts	15%
70	Dried apricots	15%
71	Mei qiang and li gan	15%
72	Dried apples	15%
73	Dried longan and pulp	15%
74	Dried persimmons	15%
75	Red dates	15%
76	Dried lychee	15%
77	Unlisted dried fruit	15%
78	Assorted nuts or dried fruits	15%
	Wine
79	Sparkling wine	15%
80	Other fresh brewed wines packed in containers of two liters or less, or brewed with alcohol inhibiting fermentation of grape juice	15%
81	Wines brewed with other fresh grapes packed in two-litre containers, but not more than 10 litres, or containing alcohol brewed from fermented grape juice	15%
82	Wines made from other fresh grapes packed in containers of 10 liters or more, or brewed with alcohol, which inhibits grape juice fermentation	15%
83	Other items from grape juice wine	15%
	Modified ethanol
84	Modified ethanol and other alcohols of any concentration	15%
	Ginseng
85	American ginseng	15%
86	Other fresh ginseng	15%
87	Unlisted ginseng	15%
	Stainless steel pipes
88	Stainless steel oil and gas pipeline pipe, 215.9mm ≤ outside diameter ≤ 406.4mm	15%
89	Stainless steel oil and gas pipeline pipe, 114.3mm < outside diameter < 215.9mm	15%
90	Stainless steel oil and gas pipeline pipe, outside diameter ≤114.3mm	15%
91	Stainless steel oil and gas pipeline pipe, outside diameter > 406.4mm	15%
92	Other steel oil and gas pipeline pipes, 215.9mm ≤ outside diamteter ≤ 406.4mm	15%
93	Pipes for other steel, oil and gas pipelines, 114.3mm < outside diameter <215.9mm	15%
94	Pipes, other steel, petroleum and natural gas, outside diameter ≤ 114.3mm	15%
95	Other steel oil and gas seamless pipe, external diameter > 406.4mm	15%
96	Oil and gas drilling pipes made of stainless steel, outside diameter ≤ 168.3mm	15%
97	Oil and gas drilling pipes made of stainless steel, outside diameter>168.3mm	15%
98	Other steel drilling oil and gas drilling pipes, outside diameter ≤ 168.3mm	15%
99	Other steel drilled oil and gas drilling pipes, external diameter>168.3mm	15%
100	Seamless casing and conduits for drilled petroleum or natural gas made of stainless steel	15%
101	Other seamless steel casings for oil and gas drilling with a yield strength of less than 552 MPa catheter	15%
102	Other steel drilling oils with a yield strength of 552 MPa or more but less than 758 MPa and seamless casing and conduits for natural gas	15%
103	Seamless sets for oil and gas drilling of other steels with a yield strength of 758 MPa or more Tubes, catheters	15%
104	Seamless boiler tubes for cold drawn or cold rolled iron or ordinary steel	15%
105	Seamless or cold-rolled iron or common steel seamless geologic drill pipe, casing	15%
106	Undrawn or cold-rolled iron or plain steel seamless circular cross-section tubes	15%
107	Non-cold drawn or cold rolled iron or ordinary steel seamless boiler tubes	15%
108	Non-cold-drawn or cold-rolled iron or ordinary steel seamless geologic drill pipe, casing	15%
109	Non-cold drawn or cold-rolled iron or plain steel seamless circular cross-section tubes, not elsewhere specified	15%
110	Cold drawn or cold rolled stainless steel seamless boiler tubes	15%
111	Undrawn or cold-rolled stainless steel seamless circular cross-section tubes	15%
112	Non-cold drawn or cold rolled stainless steel seamless boiler tubes	15%
113	Non-cold drawn or cold rolled stainless steel seamless circular cross-section tubes	15%
114	Cold-drawn or cold-rolled other alloy steel seamless boiler tubes	15%
115	Seamless steel alloys, cold drawn or cold rolled	15%
116	Unalloyed cold-drawn or cold-rolled alloy steel seamless circular cross-section tubes	15%
117	Other alloy steel seamless boiler tubes, not drawn or cold-rolled	15%
118	Non-cold-drawn or cold-rolled seamless steel tubes and casings for other alloy steels	15%
119	Non-cold drawn or cold rolled alloy steel seamless circular cross-section tubes	15%
120	Other seamless steel tubes and hollow profiles (except cast iron)	15%
	Pork products
121	Fresh or cold boned pig forelegs, hindquarters and their meat	25%
122	Other fresh or cold pork	25%
123	Other frozen whole head and half pork	25%
124	Frozen bone forelegs, pigs’ legs and their meat	25%
125	Other frozen pork	25%
126	Frozen pork liver	25%
127	Other frozen pork chops	25%
	Scrap aluminum
128	Aluminum scrap	25%

https://qz.com/1242652/china-tariffs...lass-of-goods/

Without doubt the US has the whiphand. For a start the US can manufacture whatever it likes(much of it internally without dependancy on imports), whilst China cannot manufacture demand.
Secondly, and I've not seen this mentioned or any statistics on it, but I'm pretty sure $50 billion manufacturing jobs is far more high value labour intensive than $50 billion of agricultural jobs. And doesn't the US subsidise agriculture to the hilt anyway?

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

recommend this article on china re-orienting itself from growth at all costs. implication => inflationary, as are tariffs.

[Techdread]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

recommend this article on china re-orienting itself from growth at all costs. implication => inflationary, as are tariffs.

Brilliant Read, more please.

Summary of what I have read.
1. China moves away from over-capacity.
2. China uses financial engineering to trade it's currency for energy, become another reserve currency with a healthy bond market, move away from US$ for trade.
3. US embarks on weak U$ policy, should be good for exports if especially if they limit the trade war.
4. US runs expanding deficits by spending too much on the military.
5. Inflationary pressure because of 1 and 3, 4 means US Bonds are going to come under pressure.
6. Go long Chinese Bonds.
7. Go long manufacturing in Japan, Korea and the US(though dollar deprecation will mute returns)
8. Hedge with Gold.

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

7. Go long manufacturing in Japan, Korea and the US(though dollar deprecation will mute returns)

u.s. demand for goods manufactured abroad will be reduced with a weaker dollar. otoh there are a lot em countries with dollar denominated debt. their situation will improve markedly and they will be a growing source of demand.

[touchring]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

How about the 20-30 times annual income for 800 sq ft apartment in China?

This time is different?

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

How about the 20-30 times annual income for 800 sq ft apartment in China?

This time is different?

what's the connection to manufacturing in japan, korea and the u.s.? spell it out.

[GRG55]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

recommend this article on china re-orienting itself from growth at all costs. implication => inflationary, as are tariffs.

Not surpringly I am somewhat sceptical of this thesis:
1) China's long track record has been one of attempting to curb credit growth and the associated overcapacity additions, and immediately opening the taps and gushing out money at the first sign of a slowdown in domestic growth rates. It always found it difficult to wean itself wholesale from that. Now it doesn't have to.
2) I've always thought the OBOR initiative was in part to absorb that overcapacity in steel, in cement, in everything...to avoid having to undertake a significant rationalization. This massive infrastructure initiative will consume enormous resources. Now that China has solved the funding problem (buy raw materials from OBOR participants with RMB, have them redeem those for Chinese OBOR construction contracts) it should accelerate the addition of even more capacity.
3) To the degree China intends to clean up its own environment it seems most likely to relocate necessary smokestack industries into OBOR participating countries. Now that Sub-Saharan Africa no longer enjoys a monopoly on Presidents For Life (witness Turkey as a recent example), China will face few obstacles to that in greater Asia. Whether that overcapacity is in China itself, or in the hands of Chinese Govt. & private interests abroad makes no difference. The world will still have a surplus.

[Techdread]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

what's the connection to manufacturing in japan, korea and the u.s.? spell it out.

Pages 13, 14 of your linked report.

If China does not add to capacity others will/are.

[thriftyandboringinohio]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

Very good find, jk.


GRG55, to your points I came away from the article with a slightly different interpretation.
Using your numbers:

1) China was only paying lip service to curbing credit growth and overcapacity for the past ten years, with a wink and a nudge. Recall the authors early points that the incentive structure for the Chinese technocrats compelled them to deliver the growth target despite expanding borrowing or overcapacity. Because it is a command economy, it can in fact wean itself away when commanded to do so. Technocrats now get rewarded for reducing credit and capacity, command obeyed.

2) Yes OBOR is designed to absorb the excess capacity as you say. But since the new emperor of China has commanded that capacity stop expanding, it will stop expanding.

3) Yes, as you say China's apparent new drive to clean up the toxic pollution seems to push towards a relocation of smokestacks. But combined with the command to reduce capacity it means the worst smokestacks can close and not be replaced by relocation anywhere else. Since it is true excess capacity in steel and cement, reducing the tons of output capacity has no adverse effect. The market is not starved of the missing goods, nobody really need them anyway. And it should be possible for China to pay for upgrading coal power plants to natgas , and to add pollution control equipment to mines, refineries, and manufacturing plants. Your comments in point 2 fits here when adjusted a bit. OBOR funding will be used, but to make jobs upgrading pollution control rather than moving high emitting plants to Africa.
.
.
.

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

demographics say that chinese working population must be feeling the consequences of the 1 child policy.

a quick google gets this:
The number of working age people in China is set to fall to 700 million by 2050 – a decline of nearly a quarter, according to a government spokesman. The working-age population has been in decline since 2012, with the number of people aged 16-59 predicted to be 830 million in 2030.Jul 25, 2016

thus closing some factorieswon't create a labor problem.

[thriftyandboringinohio]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

demographics say that chinese working population must be feeling the consequences of the 1 child policy.

a quick google gets this:
The number of working age people in China is set to fall to 700 million by 2050 – a decline of nearly a quarter, according to a government spokesman. The working-age population has been in decline since 2012, with the number of people aged 16-59 predicted to be 830 million in 2030.Jul 25, 2016

thus closing some factorieswon't create a labor problem.

Yes, China's famous one-child policy shows they don't seek additional workers.

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

here's gavekal's china argument complete with charts

https://blog.evergreengavekal.com/a-...eration-shift/

[dcarrigg]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

here's gavekal's china argument complete with charts

https://blog.evergreengavekal.com/a-...eration-shift/

Not sure what's up with this part of the thesis:

• The red periods represent “disinflationary busts”, or phases of falling growth and falling inflation. These were bad times for equity investors and horrible for commodity investors.

Seems to me if you bought commodities in 2007 and sod them in 2011, you'd have made a pretty penny...not so horrible in the last big red band. Ditto with 2002 to 2004. 1988 to 1991 didn't fare too badly either. In fact, the red times seem to not be horrible for commodity investors at all.

• The yellow bands represent “inflationary boom” periods, or times of rising growth and inflation. At such times, the best place to be was usually value stocks, commodities and emerging markets.

You would have not done well being in commodities and emerging markets from 62 to 68. You would have made a killing from 68 to 74. The band colors are interesting, but the yellow advice is working better in the red again, and pretty terrible for the yellow, I think.

• The blue bands represent “inflationary bust” periods, or phases of rising inflation and falling growth. At such times, investors should have taken refuge in gold, or in the cash of countries running large current account surpluses and/or large fiscal surpluses

The big run-up in gold was '78 to '80. If you bought in '80 and sold in '82 along with the blue stripe here, you'd be taking a bath...

Not trying to be a jerk, and I this isn't really a researched post meant to poke holes in the thesis, so maybe I'm wrong somewhere, but the advice here just doesn't correspond with my sense of price history...