Trump’s Tariffs

[Bitjuggler]

Trump going all Sharia Law on the Invisible Han of the Market; amputating it because said Hand is evil and self-serving, and can neither be trusted or relied upon by those in his cult.

[Brad R]

Hmmm.  I can imagine Trump embracing Sharia Law, since that law prohibits charging interest, and I gather that Trump's business empire was partly fueled by his borrowing and then defaulting on loans.  (During his first "45" term, I expected him to run the country the same way, by defaulting on obligations.  This time "47" looks like he's going to borrow more than ever before.)

[Bitjuggler]

Seen on Reddit

Biden wiped out my student debt; Trump wiped out my 401K

[Brad R]

First snap reaction to this guy: Biden didn't "wipe out" your student debt; he transferred it to someone else.  Trump might have "wiped out" your 401K investments, but I expect for that to happen, you'd have to be an active investor with a poor selection of stocks.  (Such as investing heavily in Electric Vehicle makers.) 

Second reaction: you have money to put into your 401(k), but not to retire your debt?  (Upon reflection, I'll grant that this is not necessarily inconsistent, depending on the terms of the 401(k).)

[Bitjuggler]

I kind of followed Warren Buffet’s lead. He!s got about 29% of his portfolio in cash instruments. So I pulled out about a third of my equities and put it into cash. Since then, the non-cash has dropped by 16%; so I regret not moving more.

The thing is, it’s one man who’s had this negative impact. It’s because Congress granted the President the power to do what he’s done. But I suspect Congress will never pull those powers (and others) back.

I was thinking market manipulation long before Adam Schiff came out with it. But the other reason for Trump caving makes more sense - the overnight T-Bill market collapsed. I still don’t doubt some insider information had spread though.

I hope it all settles down and recovers before I have to start taking RMD’s when I turn 73.

[Brad R]

The thing is, it’s one man who’s had this negative impact. It’s because Congress granted the President the power to do what he’s done. But I suspect Congress will never pull those powers (and others) back.

Agreed, all points.  No one person should have that kind of power.  And the members of Congress will not do anything that jeopardizes their personal re-election.

I was thinking market manipulation long before Adam Schiff came out with it. But the other reason for Trump caving makes more sense - the overnight T-Bill market collapsed.

I need to pay more attention to this.

I hope it all settles down and recovers before I have to start taking RMD’s when I turn 73.

RMDs?

[Bitjuggler]

I hope it all settles down and recovers before I have to start taking RMD’s when I turn 73.

RMDs?

Required Minimum Distributions. The IRS doesn’t allow you to shelter your retirement funds forever. You have to pull a minimum amount of money out starting in the year you turn 73 and every year after that.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds

[Bitjuggler]

But the other reason for Trump caving makes more sense - the overnight T-Bill market collapsed.

I need to pay more attention to this.

Yeah, the bond market recovered a bit after the 90-day tariff suspension; but then it continued its slide on Friday.

The upheaval in stocks has been grabbing all the headlines, but there is a bigger problem looming in another corner of the financial markets that rarely gets headlines: Investors are dumping U.S. government bonds.
 
Normally, investors rush into Treasurys at a whiff of economic chaos but now they are selling them as not even the lure of higher interest payments on the bonds is getting them to buy. The freak development has experts worried that big banks, funds and traders are losing faith in America as a stable, predictable, good place to store their money.
 
“The fear is the U.S. is losing its standing as the safe haven,” said George Cipolloni, a fund manager at Penn Mutual Asset Management. “Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”
 
That could be bad news for taxpayers paying interest on the ballooning U.S. debt, consumers taking out mortgages or car loans — and for President Donald Trump, who had hoped his tariff pause earlier this week would restore confidence in the markets.
...
A week ago, the yield on the 10-year Treasury was 4.01%. On Friday, the yield shot as high as 4.58% before sliding back to around 4.50%. That’s a major swing for the bond market, which measures moves by the hundredths of a percentage point.
 
Among the possible knock-on effects is a big hit to ordinary Americans in the form of higher interest rates on mortgages and car financing and other loans.
 
“As yields move higher, you’ll see your borrowing rates move higher, too,” said Brian Rehling, head of fixed income strategy at Wells Fargo Investment Institute. “And every corporation uses these funding markets. If they get more expensive, they’re going to have to pass along those costs customers or cut costs by cutting jobs.”