Fasten Your Seatbelts

It's Probably Nothing Trump 50 Comments

And place your trays in the upright position.

Update (from the comments): In other news, President Trump has ordered the seizure of all Venezuelan assets in the US. Of course, Venezuela has no assets not mortgaged to the Chinese several times over, so this amounts to seizure of Chinese assets in the US.

More: So you thought the trade war would settle down, did you?

Here’s the plot twist:
 
Treasury just hit China with currency manipulator status after market hours on Monday. It came at a time when nothing was trading. Investors were stuck in the Twilight Zone. Tuesday morning is going to be a madhouse rush for “sell China” orders by the algos. Wait for it.
 

As one hedge fund manager told me, “we’ve just thrown gasoline on the fire.”

50 Replies to “Fasten Your Seatbelts”

  1. I thought the US would wait until the Chinese move into Hong Kong.

    Maybe this will remind the Chinese Communist Government how valuable the rebellious Hong Kong bankers really are? Naaah.

    Chinese President Xi called this the equivalent of Mao’s Long March. I think he is willing to ride the Chinese Economy all the way into the ground. The question is will the Chinese Politiburo let him auger in?

    1. “I think he is willing to ride the Chinese Economy all the way into the ground. ”

      Works for me.

  2. The renminbi, legal tender since ’48, is a currency used less than 2% of the time in foreign transaction.
    The renminbi is used domestically to stabilize the domestic economy by separating what Beijing does with Yuan manipulation on international markets to improve it’s international standing, and prevent Yuan manipulation from impacting the PRC’s internal economy.

    The weakening of the renminbi(domestic inflation) is a sign that President Trump’s tariffs are biting hard.

      1. Larry Laborde has already shown that those three data points are irrelevant. The grown-ups know what’s going on while the scribes keep trying to sell information.

  3. No one is a bigger ‘currency manipulator’ than the US. The USD is worth far less than in 1999 as the price of gold objectively measures. Then there’s QE.

    Turmp is probably emboldened by the Fed’s rate cut, seeing it as capitulation and bail out (the only things he wants from others) and now wants to go Full Metal Retard on trade. Fasten your seatbelts? More like ‘reach for your wallet’. And prepare to watch your portfolio get crunched.

    1. Still peddling UNFORMATION I see. The USD is still the reserve currency of the world and they can print as much as they want and the world just has to suck it up and live with it. Gold and the Canuckistanian dollar are still priced in US dollars last time I checked.

      1. ” The USD is still the reserve currency of the world”

        The USD is the ‘tallest dwarf’. That can end.

        “they can print as much as they want and the world just has to suck it up and live with it”

        That kind of MMT-tier idiocy is one way it comes to an end. If China smartened up, made the Yuan a gold proxy (it’s been damn close for long periods of time since 2015!) and opened that reserve account, WOOSH!

        1. Dear President Xi and Glorious Comrade Soros:

          I’d like to remind you once again to pay me for my lame trolling in US dollars. The coupons for free Pizza Hut and free samples at the local Cannabis dispensary just don’t cut it.

          Insincerely,
          UnMeTard

          2. Don’t pretend to be UnMe please. There is enough of his genuine brand of idiocy floating around already. None here wants to waste time figuring out if somebody is parodying him or if he again tries to sound eloquent (with the usual results).

  4. As Glenn Reynolds at Insta pundit says, the US must decouple its economy from China since they’ve chosen to become a geopolitical threat to the United States. US corporations have fueled China’s rise by shipping US high technology jobs to China and transfering all sorts of sensitive technology to them. It’s much easier to do it now rather than pretend nothing is wrong as the last two administrations did.

    The Chinese intend to supplant the US as the sole superpower, and it is easier to confront them now, than when they have had decades more time to prepare for war.

    Shame on George W. Bush and Barack Obama for not confronting Chinese violations of the trade agreements they agreed to earlier.

    1. Glenn should decouple himself. I’m not interested in being ‘decoupled’. I like my Chinese made things and Chinese investment. It’s your drama I have no interest in indulging it.

          2. YEAH UnMe is ALL IN on his Chinese investments.
            Hope you reap your just reward…

            Obviously, a well die worsified portfolio!

            Cheers

            Hans Rupprecht, Commander in Chief
            1st Saint Nicolaas Army
            Army Group “True North”

          3. While my hand is in your shorts. What brand of toilet paper are you using? I use the best but here is a quarter for your Chinese investments anyway.

    2. ” US corporations have fueled China’s rise by shipping US high technology jobs to China and transfering all sorts of sensitive technology to them.”

      Again, oft stated never actually demonstrated.

      Re: geopolitical ‘threat’: that’s what the military’s for. The one China funded by buying so many treasuries.

  5. ” I like my Chinese made things and Chinese investment.”

    Sucker. I hope the Communists ruin you when they nationalize all of the companies you’re invested in. And the PRC makes crap goods.

    1. “the PRC makes crap goods”

      Oft stated, never demonstrated.

      “all of the companies you’re invested in”

      Not the investment I’m talking about. I’m talking about the tons of money Chinese investors pour into Canada and America. Did more good than Trump ever will. LOL, nationalization-the way it’s looking, I’m more afraid the USG will go nationalizing than the CCP. Orange Chavez up in the White House and all.

      1. Demonstrated? Everyone who has bought them knows it to be true. The ChiComs do this thing called Quality Fade.
        Western companies come in, set up the technology, and give the specs to make a particular good or goods. The first product run is true to specs. Then each run after is made to “fade” by the ChiComs until the product fails altogether and even the brand may be ruined by this Chinese behavior. The ChiComs may change a metal part for an inferior non-spec metal or one made out of plastic. Or they may make a baby food or dog food product where they change rice or milk for a dangerous non-food component like melamine.
        There is a very informative book, with proof, on the market entitled “Made Badly in China”. Well written, worth reading.

        1. Oh yeah. Uh-huh. There’s this thing called the ‘free market’. It will sort it out. If they really do make bad product, it won’t sell.

          “each run after is made to “fade” by the ChiComs until the product fails”

          This is a Scooby-Doo plot.

        2. I can confirm what you have written about the quality of Chinese goods. It’s a nightmare for machinery manufacturers. We bought a grain auger, brought it home and before we could use it all the Chinese made hydraulic hoses had to be changed out because the machine wouldn’t hold oil. We’ve gotten to the point where we won’t install any Chinese made replacement parts on our equipment. Sometimes an American built part is 3 times the cost of the off-shore part but we’ll go with the domestic part because we know it will last longer and keep us working in the field.

      2. good lord unDork, do you really need to constantly demonstrate your stupid. China builds junk, because that has a higher profit margin than quality, and it keeps the market fluid. If you buy once and never need more, you are out of the market. If you buy junk, you will be a constant customer.

        1. “If you buy once and never need more, you are out of the market. If you buy junk, you will be a constant customer.”

          Yup. Critics called the concept “Planned Obsolescence”. Common concept name today.
          Concept was invented by General Motors in 1924. GM referred to it as ‘Dynamic Obsolescence’. I don’t by GM anything.

      3. Damn, you’re seriously dumb. Please tell me you have neither trading authority, nor power of attorney on ANY trading account. Have you not yet figured out that Chinese capital flows into the West represent MASS chinese capital flight from the failed experiment that is National Socialism, redux (damn, you stupid. Hey I have a nice couple of option trades I’ll sell you right now – real cheap at $0.60 a contract. What do you say?).

        The ChiComms have figured this capital flight as well, which is why they are working feverishly to co-opt local Chinese – so they can institute local “tax” regimes in foreign countries to recoup some of that “domestic demand economy” China is so desperate to build.

        With the tanking of the Yuan, private Chinese capital flows are accelerating, both into foreign real estate as well as crypto, as by now you should know even the Chinese middle class don’t typically buy and hold long positions in Equity or Bond markets to save for retirement. They traditionally buy real estate and jewelry and hard assets, and are relying on their only child to care for them in retirement.

        The capital flows into Western real estate will accelerate, especially after the Chinese military is finished massacring a few thousand protesters in Hong Kong. Unless of course the Chinese government establishes ruthless capital controls, in which case all bets are off, and the Chinese may just have their long overdue revolution.

        The US will survive the collapse of China, as they did the collapse of Japan. No one survives the collapse of the US.

        1. Bdsm, people (I use a lose definition of people) like the unDork do not understand the relationship between the dog and his tail. USA economy can suffer, but destroy the next three economies in size while doing so.

          unDork thinks that Chinese junk is a boat, when actually that is what you call their QC departments!

        2. “Chinese capital flows into the West represent MASS chinese capital flight from the failed experiment that is National Socialism”

          That’s part of it but not all of it. The drying up of Chinese investment into America attests to that. Canada’s gain.

      4. Very much demonstrated.

        Even Chinese parents don’t buy Chinese-made toys due to the lead content in them. Good, old Japanese toys for Christmas (a holiday the Chinese still observe even if the uptight squares in Beijing can’t handle it).

        Enjoy your cheap crap from the paper dragon.

  6. Pretty simple strategy based on a fundamental truth.
    That once folks get those things they desire, such as those in Hong Kong and the swath of Chinese citizens that would love to have that standard of living, they tend to get rebellious if when someone tries to take it away.
    If the PRC can’t put a stop to Trump’s economic sanctions they can’t keep it a secret when there are press in Hong Kong going against the official chicom version of events, then it shows the government as weak and vulnerable.
    Trump is going to win the second war on communism much to the chagrin of his critics.
    And the screams of agony from the left will make election night 2016 look like a mere trifle.

  7. If taking down the ChiComs means a recession on this end I do not care. In my book they have it coming for what they did to my father in Korea on a cold February day in 1951.

  8. The thing with communists is that they don’t much care about their own population.
    The communists themselves are ok and rich.
    The peasants never had anything and if they won’t, no big deal, no change in status.
    It will be interesting to see if the factories that supply the goods to Europe and north America won’t be able to sell, what will happen.
    Remember, the communists and socialists don’t care what happens, they will ride off into their wealthy, protected nebourhoods and the peasants will have to suck it up.

    If you think about it, the ruling class in this country works the same. They impose carbon and all kind of sleight of hand taxes on the plebeians. Then you have the plebeians that want “free stuff”.
    Its like you give us “free stuff” and we will agree to taxes. You see, in the end it all works out for everybody…..No?
    They are well off, mostly avoid taxes and the rest will have to suck it up.
    Did I say that the Chinese peasants have to do that?

    1. You are describing the commies there and here, in it for themselves and power, projecting their miscreance on others, amoral.

  9. There’s not going to be a recession. Not in the US anyway. If you still proudly make, grow, mine or build things in the United States, the corner has been turned.

    If all you do is mark up garbage made by slave labour in China, the jig is up. You are going to have to start paying Americans a honest day’s pay for an honest day’s work.

    What? You can’t do that and stay in business? Certainly you can.

    You just won’t be able to afford to pay cash for a luxury apartment in every financial capital and four years at an Ivy League college for each of your sugar babies, while the sons of the men who made your wealth possible have to hire themselves out as cannon fodder because only the military will pay working-class white men a living wage—in the unlikely event they come back alive, in one piece and with enough of their marbles left to work a desk job stateside.

    High time you learned what the rest of us understand. The Lord giveth and the Lord taketh away. Blessed be the Name of the Lord.

    Your sugar babies will have to pay for their own cellphones from now on out of whatever they make on all fours, and those phones will get a lot more expensive. They’ll get over it. So will you.

  10. In other news, President Trump has ordered the seizure of all Venezuelan assets in the US.

    Of course, Venezuela has no assets not mortgaged to the Chinese several times over, so this amounts to seizure of Chinese assets in the US. A good start, if I may say so.

    1. “Venezuela has no assets not mortgaged to the Chinese”

      Maybe. I like to think some of those assets are “invested in” by people such as Sean Penn, Danny Glover, Barak H. Obama, and UnMe.
      Warms the cockles, it does. …I’m into cheap thrills…

  11. I remind all my learned colleagues that the last time the US economy collapsed (as in collapsed, not just 2007/2008) … we got World War II.

    No one survives the next US economic collapse. No one. And everyone knows this. That puts Uncle Sam in the driver’s seat I’m afraid, UnMe.

    1. The controlled demolition of the world economy in the 1930’s was an excuse for the globalists to try out their attempt to fix the bugs in state socialism, using Germany as their lab rat.

      Long story short, the experiment backfired horribly.

      This is the moral equivalent of the Allies undertaking strategic bombings of Germany in 1935, before Hitler had a chance to fully re-arm Germany. The world would have been spared untold misery had the national socialist experiment been nipped in the bud by a man like Donald Trump.

      Wall Street is panicking because Trump is saving western civilization—from Wall Street and their Chinese business partners. Our grandchildren will revere him as a hero.

      As for the grandchildren of Beijing’s and Wall Street’s elite, what grandchildren?

    2. “No one survives the next US economic collapse. No one. And everyone knows this. ”

      How…does this work? The rest of the world just disappears?

  13. Spent too much time yesterday, a holiday, watching CNBC news discussing the roiling markets. Strangely, the business network remained neutral, full of technical discussion with little Trump-bashing.

    My small, retail portfolio — all-Canadian paying 3.8 in interest and dividends — is about 10% cash, 20% bond ETFs, 70% REITs and utilities, a very defensive portfolio given the oncoming world recession. And the forthcoming Liberal-Green-NDP government will not be that supportive of our economy. About 40% of my portfolio is in apartment REITs: the only sure thing moving forward is that urban apartment rents will rise, given high immigration and urban trends.

    P.s.: as interest rates fall, the value of bond ETFs rises. Investors should have 20-40% of their portfolios in bonds, to survive the oncoming recession.

    1. Depends which bonds. Who is the next Venezuela or Enron? Don’t forget bond ETFs can get murdered in a bond liquidity trap.

      Apartment REITS? Overall performance of the asset class has been less than stellar, as compared to equity long/short trades. Some have skyrocketed to be sure. Others, not so much.
      Have you checked their financial statements recently? As long as they are in a very healthy operating cash flow situation, great.

      If not, look out. They have to fund a LOT of their purchases and in some cases operations too, with debt. Bad purchases on their part can really sink income and any kind of equity growth. And remember, high vacancy rates are often associated with a big recession – regardless of sector. Remember too, SJWs believe minorities should not have to pay “capitalists” rent, so there’s that. All it takes is one rent boycott or slowdown in a big apartment block full of Somali migrants, and … boom. There goes the REITs income and viability. We analyzed the crap outta REITs, and thought we can make more money shorting key market players (using CFDs) when times are tough. Your mileage may vary. Just go in eyes open.

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