The Wall Street Journal reports U.S. Stocks Slide After Trump Signals Further Delays to China Deal.
The Dow Jones Industrial Average fell more than 400 points Tuesday after President Trump suggested a trade war with China could continue well into next year as he threatened new tariffs on several more countries.
Mr. Trump said he had “no deadline” for reaching a trade accord with China during a meeting with the North Atlantic Treaty Organization secretary-general. He added that he liked “the idea of waiting until after the election” to reach a deal.
“Tariffs will be a part of statecraft from now on,” said Geoffrey Yu, head of the U.K. investment office at the wealth-management arm of UBS Group. “There are no allies when it comes to tariffs right now.”
Trump Blasts French President Emmanuel Macron
Trump is in Europe for a NATO Summit where he also ruffled feather and talked trade.
In Europe for the two-day gathering, Mr. Trump also criticized French President Emmanuel Macron for comments he made about the 29-member military alliance, and expressed frustration with France’s new digital-services tax.
“I don’t want France taxing American companies. If they’re going to be taxed it’s going to be the United States that will tax them,” Mr. Trump said, during a freewheeling exchange with reporters that lasted for over 50 minutes.
Mr. Trump also said the French leader’s comments about NATO were “very insulting.” Ahead of the meeting, Mr. Macron gave an interview to the Economist, warning that the continent was experiencing “the brain death of NATO” and renewing his call for Europe to bolster its own military capabilities.
Turkey’s President Recep Tayyip Erdogan, meanwhile, Tuesday said his country won’t approve a NATO plan to guarantee the defense of Lithuania, Latvia and Estonia unless the military alliance declares a Kurdish militia based in Syria a terrorist organization.
“If our friends in NATO don’t recognize as terrorist organizations those we consider as such, then sorry,” he said, adding that Turkey will oppose any initiative to guarantee the defense of the Baltic nations.
Asked by reporters if he would sanction Turkey for buying Russian military equipment, Mr. Trump said of Mr. Erdogan: “He’s a very good member of NATO, or will be.”
Deal On Hold
Trump accuses China of having no credibility. Of course, Trump has no credibility either.
Both ideas are correct. Neither side can possibly trust each other at this point.
And Trump keeps putting words into China mouth about what China agreed to when it’s clear China made no such commitments.
Deal Still Possible
There still could be a deal. The deadline for further Trump tariffs is December 15. That’s 12 days away and a huge amount of time on the Trumpian Time Scale where his opinions change not day-to-day, but by the hour.
My base idea all along was Trump would produce some essentially irrelevant deal then brag about what would effectively be a return to the status quo. This is what he did with USMCA, his NAFTA replacement that is 95% the same the deal, with the changes arguably worse for US corporations.
Regardless, and as I have commented before, I am tired of these games and the tariffs threats we have seen for nearly two years from the self-proclaimed “tariff man”.
Trump is unquestionably damaging the US with his actions.
Mike “Mish” Shedlock
Mish: “My base idea all along was Trump would produce some essentially irrelevant deal then brag about what would effectively be a return to the status quo.”
Common ground? The dems have been saying that Trump created the trade war to deflect attention from the collusion with Putin re the 2016 election, among other things like him having no basic policy at all. Inventing or creating a problem out of whole cloth then providing a solution that is not significantly different from the original status quo is called gaslighting. The real question is if he did not originally collude with Russia to rig the 2016 election why then did he attempt to blackmail Ukraine into a rigging scheme that benefits only two parties, his and Russia? It does not even matter if you believe the narrative that Russia rigged the election, but, having that out there true or not you would expect all candidates to avoid the appearance of ANY new accusations along those lines as if foreign interference was an actual radioactive pile. For Trump to engage in anything that even gave a hint of foreign interference is beyond stupid, it established a pattern.
There is another consideration though, theories are emerging that support the idea that Trump’s announcements and tweets regarding the possibilities that one day there is a deal at hand, the next that there is no chance of a deal at all, these have been preceded by outsized moves in the options markets and someone is timing this to make historic profits trading which could not be done without foreknowledge of the announcements. We are talking about amounts that on some of the announcements and denials of agreement in the range of billions of dollars in large bets placed. Bets that were only profitable because someone knew in advance when to place them.
“There Is Definite Hanky-Panky Going On”: The Fantastically Profitable Mystery of the Trump Chaos Trades
WILLIAM D. COHAN
OCTOBER 16, 2019 4:25 PM
My bet is on Lindsey Graham, he is clearly being blackmailed and yet cannot be prosecuted for insider trading because members of congress are exempted from insider trading laws. He was a powerful never Trumper till shortly after Trump started the trade war and now is Trump’s most ardent attack dog/protector. But, while it is true he can’t be prosecuted for insider trading the optics are very bad and it is possible that he could be prosecuted under other laws such as conspiracy to commit fraud.
Trump/Xi
Will propel markets to Blue Sky parabolic dimensions through 2024 and then by effect into 2032.
The Gateway Process
link to i2.wp.com
Nothing Trump can offer to solve Xi’s crisis in Hong Kong — China loses no matter what. Nothing Xi can offer Trump to solve the collapse in the US education system that used to prepare for good jobs (service and manufacture). Xi and Trump understand this, even if the media is too dumb to see it.
So might as well send out some tweets and see if they can make Andy Schiff’s eyes bug completely out of their sockets. Wouldn’t surprise me if Xi and Trump have a side bet for how long it takes — loser buys the winner a beer.
I guess I misunderstood Kudlow a few week ago when he said that the deal was down to the short hairs. He must have been referring to something else.
Talk is cheap. Trump figured this out years ago–those little puffs of air emitted while breathing could be accompanied by sound–and it was free(!) and easy to do, so he was off to the races. Truth or lie. Serious or ludicrous–it really doesn’t matter.
Sometime later Trump got the idea that talking tariffs was something tough guys do. Like breathing with sound, it’s at no cost to him and easy to talk about. And people and markets react. So he does it all the time now. Truth or lie. Serious or ludicrous–it really doesn’t matter.
I second this emotion too:
“You almost make it sound like Trump has a plan. Sadly, that is a delusion.”
Alternatively, if Trump has a plan, his plan is delusional.
Take your pick
“And Trump keeps putting words into China mouth about what China agreed to when it’s clear China made no such commitments.”
…
Anyone remember “the phone call” this summer?
Had to laugh when Cramer said something along the line of – I sort of doubt there was a phone call, but hey, it made stocks go up …
Yet another perspective: link to youtu.be
Sundance at theconservativetreehouse.com has a very different take. He believes that the goal is a permanent decoupling, a divorce, not a ‘deal.’ Trump has assembled a tight, formidable team on all this trade stuff and it is probably the main reason he got the Presidential bug in the first place (he’s been talking about it since the 80’s). He might well bluster and posture in lots of areas (including this one), but this turf he is taking seriously, playing the long game. Now he and his team may well have read the tea leaves wrong, but I don’t think they are playing on the soundbite level as you state:
“My base idea all along was Trump would produce some essentially irrelevant deal then brag about what would effectively be a return to the status quo. This is what he did with USMCA, his NAFTA replacement that is 95% the same the deal, with the changes arguably worse for US corporations.”
I don’t see decoupling in the cards. Too many big players would lose too much, and that’s not how the game works.
People are still trying to see 4D chess moves in this mess, but after three years a reasonable observer has to switch over to “show me” mode rather than fantasizing indefinitely.
Tengen: I hit the wrong Reply button by mistake. This just to let you know the reply is up above.
Reply to Tengen: You are probably right about too many big players losing too much. And that’s probably a big part of the reason why there is an impeachment process with no-due-process rules, which of course has nothing to do with the flimsy Ukraine phone call pretexts they are nattering about ad nauseam in the House.
One question is, though: leaving aside whether or not Trump is a total idiot as so many insist on (pure luck he won etc.), do he and his trade team and people like Bannon, the so-called ‘economic nationalists,’ have a point? Is running annual 500 billion a year deficits with patent theft and all the rest a good model?
I don’t pretent to know enough about such matters to have an informed opinion; in this sort of realm I mainly just listen to the various narratives.
Mainly, the anti-Trumpers tend to rely on insult more than anything else. I don’t find such things all that convincing. High school peer pressure tactics….
All anyone needs to know about Trump is that he’s not the problem, nor is he the solution.
China’s not the problem either. As long as the Fed runs the show with QE forever and artificially low interest rates, we have a certain future of widening inequality and worsening conditions for the vast majority of Americans. Centrally planned economies don’t work, but we’ve allowed the bankers to anoint winners and losers. We’ve become a kleptocracy and no new policy on China trade is going to change that.
Isn’t it about time for Kudlow to come out and talk about good progress in trade talks?
I second that emotion
In past times whenever the stock market would crash, the FED would cut interest rates and the market would have a huge bounce. The FED can’t reduce rates much, so I suspect every time the market heads south, trump will announce progress on a trade deal and get a bounce. The trade deal for Trump is like impeachment for the democrats. Trump wants to drag this out and never reach a deal and the democrats want to drag out the impeachment process without ever actually impeaching.
About a month ago it came out that Trump and Powell met and negative rates discussed.
It would not surprise me in the lest if the White House has internal numbers showing economy slowing more than expected. DJT might be looking for scapegoat(s) … Xi for not making deal and Powell for not cutting quick / deep enough.
Let’s see what a “Big, beautiful, recession…Very big and beautiful.” does to his beloved stock market. I think we’ve gotten a glimpse over the past few days….