Anyone watching the emerging markets?

[touchring]

Re: Anyone watching the emerging markets?

This bashing of other countries by the Trump administration in what it thinks is unfair trading will does not take into account the interconnected global economy.

China is the last place where things get assembled the real worth of goods is written in code that is done in the USA or by companies owned by American entities, focusing on the finished article is just pandering to those whom feel left out and not fixing the real problem.

America will lose big time if it tries to take on every where else, Already China is backing countries that America marginalises.

A lot of people mistake Chinese people and panda bears for China. They are different.

PRC = CCP. Unlike bankers, the goal of the CCP is not to make money. Money is not the ends but means to greater glory and power. They could well just decide one day to stop exporting to the US.

[vt]

Re: Anyone watching the emerging markets?

U.S. tariffs are among the lowest in the world and in it's history.

http://www.pewresearch.org/fact-tank...tions-history/

For example EU tariffs on autos is 10% and China's is 25%. Ours is 2.5%. Why wouldn't we want to negotiate for fairer treatment for our exports vs. imports? This is not bashing; this is trade negotiation.

[dcarrigg]

Re: Anyone watching the emerging markets?

U.S. tariffs are among the lowest in the world and in it's history.

http://www.pewresearch.org/fact-tank...tions-history/

For example EU tariffs on autos is 10% and China's is 25%. Ours is 2.5%. Why wouldn't we want to negotiate for fairer treatment for our exports vs. imports? This is not bashing; this is trade negotiation.

VT, this is a case where I'm somewhat with you, or at least more or less agnostic.

You're right that tariffs are very low now. And there are already tariffs on all sorts of weird things now. And other things don't have them.

I don't think we need a lot of tariffs on the EU. Definitely not on Canada. We have a balanced trade relationship with them.

But on the whole, I don't think these little tariffs on one-off items are really big enough to affect too much either.

They will really mess with the day of certain small business owners on the ground, and I really feel for them. If you're an European auto parts distributor or a metals distributor or a solar panel installation company, you're getting broadsided here. On the other side, some folks make out.

Still, we're talking a tax on aluminum that amounts to something like 0.1% of the value of us imports? On steel maybe it's 0.15%? So an overall 0.25% import tax for corporations that just got a 14% profit tax reduction? I'm thinking it's not the end of the world, even if there's a reciprocal 0.25% export tax that gets levied in the process.

Wake me up when/if Trump has the hutzpah to slap a tariff on foreign electrical machinery or oil. Because that's when Apple and Exxon get pissed off. And 10% there actually starts adding up to real bucks--an easy order of magnitude more than the metals. And that's the only way the trade deficit--which is largely with oil producers and east Asian manufacturers--will actually ever really budge. And I don't see that happening any more than I see Mexico paying for a border wall.

This isn't a trade war. It's barely even a trade skirmish. The real fear in the professional class, I think, is that the WTO is already so deeply hated by the left (and has been since the beginning and consistently, remember), that if it becomes also hated by the right, the whole postwar free trade project, which is and always has been heavily dependent on American funding, institutional support, and military protection, may come undone.

[GRG55]

Re: Anyone watching the emerging markets?

Depends on which EM, the EMs that have kids that are not married but got no grandkids are only better than the US because they save on marriage.

Let's assume it takes an average of $1000 a month to rear a kid (including loss of income), if you don't have kids, you save $12000 just for 1 kid and $24000 a year for 2.

If you're not married, stay with mom, you save on housing loan/taxes and rent and probably even food. That's a crazy amount of cash saved.

Imagine a population of 100 million that saves this cash, that's $2.4T a year that goes into the savings.

Yes, $2,400,000,000,000!!!

If everyone stays home with Mom and doesn't have kids, you don't have an economy with a future.

[GRG55]

Re: Anyone watching the emerging markets?

I think I’m starting to have an idea what Trump is trying to do. He wants to transform America’s international trade by rewriting the rules of trade. To do this, he threatens economic war.

The cutting of taxes and boosting of the domestic economy is all part of the game plan to buttress the home base. You need to fortify your castle first before you send out your troops.

He knows that in a full blown trade war, Europe and China will surely collapse first politically before America does because they are all relying on American consumers ultimately.

Bingo. For years after the financial crisis I have been responding to the China bulls and US bashers ("the US$ will collapse, blah, blah") that China needs the USA a lot more than the USA needs China.

China, which now has a debt to GDP ratio far exceeding the USA, has been the single most disruptive influence in the global economy and for global trade. It has single-handedly, using debt and more debt, installed more capacity for "everything" than the world could ever absorb. This runs from cement (jk posted a chart about this a few years back), to steel manufacturing and practically everything else. This is the so-called "miracle economy".

The worst thing that happened is admitting China to the WTO. It continues to dump product on global markets, it continues to thieve intellectual property, it continues to maintain tariffs that routinely exceed those it complains about in the countries it wishes to sell to. So far its been treated as a poor developing nation. China is finally being called out for this, and not just by the USA. Countries like Canada, which normally take a soft shoe approach to trade as it is so dependent on it itself, are grappling with steel dumping and other seriously disruptive economic issues.

Canada just blocked the Chinese acquisition of a major engineering/construction company. Although left-leaning Canadians seem to enjoy their government owning everything, there is a growing concern about private Canadian companies being purchased by foreign state owned enterprises. I have some sympathy for that view.

Although Canada and Mexico just got caught up in the steel/aluminum dispute with the White House's announcement last Thursday evening, the real target of the steel tariffs is not Chinese steel, its Chinese steel making capacity. That is what has to come out, and this administration seems determined to get that message and more across to China, even if it impairs some US exports due to retaliatory tariffs. The USA has the advantage that it is by far the least dependent on exports of any large economy in the world.

[GRG55]

Re: Anyone watching the emerging markets?

americans have long been the consumers of last resort. however, the u.s. consumer is tapped out- up to his neck in debt, especially non-cancelable student debt, with no growth in income and rising prices for medical insurance, housing, food and fuel.

The employment data that came out Friday morning suggests wages are now rising, employment is at lows we have not seen in decades, black and Hispanic employment, even among men, is up measurably, and optimism about finding employment has risen quite a bit. I think these will offset for a while longer the factors you indicated. The consumer/household debt item you mentioned doesn't compare with the much higher numbers for same in Canada, and the stats show it remains below the 2008 GFC peak.

[touchring]

Re: Anyone watching the emerging markets?

China, which now has a debt to GDP ratio far exceeding the USA, has been the single most disruptive influence in the global economy and for global trade. It has single-handedly, using debt and more debt, installed more capacity for "everything" than the world could ever absorb. This runs from cement (jk posted a chart about this a few years back), to steel manufacturing and practically everything else. This is the so-called "miracle economy".

I can understand what the CCP is trying to do. The one-child policy will eventually hit badly in 15 years and is irreversible. So it's either all in or nothing. The RMB has to become the world reserve currency in less than a generation, otherwise the CCP will collapse because it's impossible to feed 1 billion above 60 years old with only 200 million working adults.

[GRG55]

Re: Anyone watching the emerging markets?

This thread explains a lot imho: https://twitter.com/TheLastRefuge2/s...72142866767872

A superficial analysis at best. The author needs to get his facts straight.

Canada runs a net deficit in steel trade with the USA. It imports about $2B per year more steel from the USA than it sells into the USA.

As for aluminum Canada holds the negotiating advantage. One single Quebec aluminum smelter is equal to the entire USA capacity. Why? Because power costs in the USA are dramatically higher than the hydro in Quebec and BC that is used to smelt aluminum. There's not enough aluminum smelting jobs in the USA to come anywhere near the job losses in all the US manufacturing enterprises that use now higher cost aluminum as an input. The difference in the numbers is staggering. Canadian aluminum producers are already benefiting from being able to raise their prices when the first round of tariffs were imposed on China.

The US aircraft manufacturing business, as one example, is going to take another hit on top of the ones it has already endured. It will be cheaper to buy a European made airplane than one from the USA at this rate. How does that help?

[GRG55]

Re: Anyone watching the emerging markets?

A lot of people mistake Chinese people and panda bears for China. They are different.

PRC = CCP. Unlike bankers, the goal of the CCP is not to make money. Money is not the ends but means to greater glory and power. They could well just decide one day to stop exporting to the US.

If the goal isn't to amass money then explain the rampant, institutionalized, ingrained corruption in China?

[vt]

Re: Anyone watching the emerging markets?

Agreed. However can artificial intelligence and other advanced technologies allow a small working population to take care of a larger older cohort? Can the technology grow fast enough to at least reduce the impact.

What has Japan done about this? What is Russia doing? Germany has the worse demographics in Europe. What will they do?

[touchring]

Re: Anyone watching the emerging markets?

If the goal isn't to amass money then explain the rampant, institutionalized, ingrained corruption in China?

This maybe true in the past, but Xi has a different idea.

https://www.bbc.com/news/world-asia-44340439

Weaponization of islands and placing ballstic missiles on it that aims at commercial ships on international waters doesn't sound like corruption, does it?

The Chinese billion strong consumer market is as transient as America's shale oil. Because of rapidly aging population, it won't last more than 15 years. Not to mention the effects of pollution that will have on the 1 billion over 60s by 2040.

In my opinion, America should stop wasting so much time and resources on Russia, and focus on where the future money is, which is India and South East Asia. Let Merkel face Russia since she likes her former master so much.

[dcarrigg]

Re: Anyone watching the emerging markets?

Agreed. However can artificial intelligence and other advanced technologies allow a small working population to take care of a larger older cohort? Can the technology grow fast enough to at least reduce the impact.

What has Japan done about this? What is Russia doing? Germany has the worse demographics in Europe. What will they do?

Even if this could happen, and you know I'm not bullish on big tech marketing voodoo like AI, do you really think the capital generated by the productivity boost would be spread out anywhere approaching evenly enough in any country to actually take care of most of the people? Or would it just create a handful of trillionaires and leave everyone else exactly as poor and miserable as before? 30+ years of productivity gains have led to approximately 0 wage or disposable income gains in most of the developed world now. Even if the economic capacity to handle the problem is there, the political will to let even a dime trickle down from the gilded peaks of Parsenn is non-existent.

[Techdread]

Re: Anyone watching the emerging markets?

Even if this could happen, and you know I'm not bullish on big tech marketing voodoo like AI, do you really think the capital generated by the productivity boost would be spread out anywhere approaching evenly enough in any country to actually take care of most of the people? Or would it just create a handful of trillionaires and leave everyone else exactly as poor and miserable as before? 30+ years of productivity gains have led to approximately 0 wage or disposable income gains in most of the developed world now. Even if the economic capacity to handle the problem is there, the political will to let even a dime trickle down from the gilded peaks of Parsenn is non-existent.

You have the smarts the to be a big player in the coming AI boom, will you hoard the wealth produced?

[Techdread]

Re: Anyone watching the emerging markets?

Good question, my answer is this IF, a Big If, the human race survives another two decades we will be in a post scarcity world.

Healthcare will be transformed in ways we can't imagine inside a decade, the Fed only needs one last push.

And there I was thinking Kurzweil was talking out of his....

[dcarrigg]

Re: Anyone watching the emerging markets?

You have the smarts the to be a big player in the coming AI boom, will you hoard the wealth produced?

You're smart enough to graduate top of your class at an Ivy League school and land a job in finance paying millions. Will you invent new CDOs for mortgage backed securities and trade liar's loans to make yourself millions and your firm billions more?

I think it's easy to mistake intelligence for wisdom or morality, but seldom do they go together...