Trump and Recession

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  • BugI02

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    We were discussing this over adult beverages Saturday night

    What if Trump has concluded that a recession is inevitable; and is trying to provoke one on his own timetable, aiming for short and sharp - like the downturn last November-December that we recovered from pretty quickly

    The discussion has something for everybody; the Trump is stupid people, the Trump is self-centered and only cares about his re-election people, the Trump is an evil genius/dictator wanna be people and the Trump playing 4D chess and/or doing what's best for the country by unorthodox means people

    The proferred datum is that he just can't seem to leave well enough alone vis a vis the economy, that he is roiling it again before the waves of any previous disturbance have a chance to die out. It is difficult to see that as a pathway to stability, more like a stress test

    As a died in the wool Trumper, I was of course arguing that if he was doing it it was for the good of the country to get it over with instead of hanging over our heads in Damoclean fashion. We had a lively discussion of what tools and techniques might give some modicum of predictable control over a downturn and about whether there were in fact any such techniques or if he would just have to wing it (especially in light of
    uncooperative central bankers and supposed allies)
     

    NKBJ

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    President Trump was selected for the job of piloting the ship of state through the coming economic hurricane. He didn't cause the storm. He can't get the ship out of the storm's path. He can make a huge difference in what shape the ship is in after the storm. On board to deal with are enemy agents, mutineers, crooks and hustlers.
    He and we need much prayer.
     

    jsx1043

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    President Trump was selected for the job of piloting the ship of state through the coming economic hurricane. He didn't cause the storm. He can't get the ship out of the storm's path. He can make a huge difference in what shape the ship is in after the storm. On board to deal with are enemy agents, mutineers, crooks and hustlers.
    He and we need much prayer.

    In addition to the media hucksters and apparatchiks who are using ANYTHING negatively perceived to perpetrate an outright coup of a sitting president. There’s always been an ebb and flow of the financial market, they are going to make this one worse by screaming “the sky is falling!”
     

    indykid

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    It never ceases to amaze me that pundits can't understand that the economy is a virtual liquid. While it is expanding it is such a great thing, but like virtually everything, what goes up, usually comes down. With the economy, usually the down turn known as a recession is very short, followed by more expansion. Unfortunately the news media would love to jump on the two month downturn (required to be called a recession) and blame it on Trump and not normal economic flow.

    The fact that the current expansion is beyond amazing lands on deaf media ears.
     

    DoggyDaddy

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    It never ceases to amaze me that pundits can't understand that the economy is a virtual liquid. While it is expanding it is such a great thing, but like virtually everything, what goes up, usually comes down. With the economy, usually the down turn known as a recession is very short, followed by more expansion. Unfortunately the news media would love to jump on the two month downturn (required to be called a recession) and blame it on Trump and not normal economic flow.

    The fact that the current expansion is beyond amazing lands on deaf media ears.
    The thing that's been freaking people out is the "yield inversion" thing - "What's an inverted yield curve? An inverted yield curve occurs when interest rates on bonds with longer maturities are lower than those on bonds with shorter maturities. It occurs because investors are anxious about the economic climate and are pouring money into longer-term bonds, which they see as safe havens."

    I don't know if that's still the case now or not, but I know that's what sparked all the recession predictions last week when that happened.
     

    HKFaninCarmel

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    The thing that freaks me out is China's President doesn't worry about re-election. Ours does. You don't think that'll sway the trade deal?
     

    Kutnupe14

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    I don't think the president understands the economy of the nation. I think his understanding is closer to that of the "Man with the Golden Goose," than Alan Greenspan. I don't know if were heading for a recession, but we are overdue for one. With that in mind, the massive tax cuts we just got, the president want the Fed to manipulate interest rates, an escalating trade war do nothing but ensure that if we do have a recession, it will go on longer than it should, as the conventions meant to mitigate the effects have already been employed.
     

    BugI02

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    That's not what we concluded after quite a bit of discussion. It was thought that if it was apparent to most that recession was the destination and the president wasn't trying too hard to prevent it, then it could be shorter and sharper than what would otherwise be the case. The drop last November/December came within a whisker of being a bear market witha drop of 19.6% from peak for the S&P. It started in early October, took about 2 months to hit bottom and another five months to recover to its pre-drop value. The only thing missing was the two quarters of falling GDP. It is unclear whether something as short and sharp as that can truly deflate the stock bubble, as evidenced by the fact that last years dip certainly didn't wring the volatility out of the markets and launch a new bull run. Could a period twice as long (because if we are to listen to the Trump as self-serving crowd, he would be doing it to get re-elected -so it would need to wrap up by next September or so) serve the purpose if the entry was down sharp enough and it sparked a true bear market with capitulation and panic selling. We concluded Trump would have the most influence over this with his control of tariffs and negotiations with Xi. The controversy was, what were the tools that he might leverage to make sure the recovery was equally sharp/steep. It was not thought he could be anywhere near as effective at encouraging a turnaround as there just isn't much leverage, especially as any US downturn is likely to spread globally. It wasn't thought that there would be much interest rate pressure, because most people still think the US economy will be the 'last man standing' and so will still buy and hold US debt.

    The average length of post WWII recessions has been 11.5 months with the median being just over 8.5 months. It is possible we're already in the first quarter of a recession and just don't/won't know it for a while. It absolutely could be dione within the available time frame but there is a lot of uncertainty about how it could be done if it could be done at all. It is an interesting thought experiment, and such a project might make for strange economic bedfellows among the players as they support such a market trajectory for reasons of their own
     

    jamil

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    President Trump was selected for the job of piloting the ship of state through the coming economic hurricane. He didn't cause the storm. He can't get the ship out of the storm's path. He can make a huge difference in what shape the ship is in after the storm. On board to deal with are enemy agents, mutineers, crooks and hustlers.
    He and we need much prayer.
    He can also sink the ship. Sometimes the captain hits an iceberg because he really doesn’t know as much as he thinks he knows.

    So generally about this thread, I don’t think Trump is deliberately causing a recession for the purposes of his own timing. But I do think he’s hastening the inevitable unintentionally because of his trade war. It’s possible on the other side of eventuality, when the trade war has claimed all its due victims, it will have been worth it. Maybe China will end up being a much weaker trade partner than they are now. Or maybe they’ll emerge strong as ever. Who knows.

    But claiming some higher purpose whenever Trump appears to be doing things reasonable people question, seems to be the standard tack for the faithful. It’s like you guys use this logic: Trump is doing something I don’t understand. Trump is infallible. Therefor Trump knows what he’s doing.

    Trump isn’t a genius. C’mon. Seriously. Give him some credit for being fallible as a mere mortal. He thinks getting tough with China is going to reap dividends. Maybe it will in the long run. But it’s gonna shake up the economy. And maybe it’ll blow up in his face. I hope not. We’ll see. It would work out for the country in the long run if y’all are right, and he is the political messiah you’re looking for. But I think he’s just a man trying to figure this out. And he gets some stuff wrong.
     

    BugI02

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    There was a wing of our discussion group that felt if Trump concluded a recession was inevitable (and it always is, only the timing is in doubt) that he would have no qualms about provoking one even if he had no idea of how to ride that particular tiger. There was more support for 'he's not an idiot' than I would have thought, but this was a group of professionals and former colleagues. All were technical types, but not unaware of economics in the industrial space because it forms a large part of the value we offer our customers. Probably not a representative sample. What I found fascinating was the idea of trying to use such large scale inputs to such make fine scale adjustments. It's like using tweezers to move your objective in the field of view of an electron microscope, you could probably learn to do it acceptably but likely not the first time. I would absolutely try using a recession as a tool in a decent, realistic simulation because now I'm curious (but I'm unaware of any decent simulation of the system in question)
     

    BugI02

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    I don't think the president understands the economy of the nation. I think his understanding is closer to that of the "Man with the Golden Goose," than Alan Greenspan. I don't know if were heading for a recession, but we are overdue for one. With that in mind, the massive tax cuts we just got, the president want the Fed to manipulate interest rates, an escalating trade war do nothing but ensure that if we do have a recession, it will go on longer than it should, as the conventions meant to mitigate the effects have already been employed.

    You might do well to think of Trump more like a hedge fund manager. He has access to information that you just can't get and he has been inside the system and seen how the gear train is really connected. None of that really confers predictive ability, it just allows them to make smarter or riskier bets according to their predilections. I would caution that holding Greenspan up as an example of a market oracle is tantamount to holding up McNamara as a military strategist
     

    jamil

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    There was a wing of our discussion group that felt if Trump concluded a recession was inevitable (and it always is, only the timing is in doubt) that he would have no qualms about provoking one even if he had no idea of how to ride that particular tiger. There was more support for 'he's not an idiot' than I would have thought, but this was a group of professionals and former colleagues. All were technical types, but not unaware of economics in the industrial space because it forms a large part of the value we offer our customers. Probably not a representative sample. What I found fascinating was the idea of trying to use such large scale inputs to such make fine scale adjustments. It's like using tweezers to move your objective in the field of view of an electron microscope, you could probably learn to do it acceptably but likely not the first time. I would absolutely try using a recession as a tool in a decent, realistic simulation because now I'm curious (but I'm unaware of any decent simulation of the system in question)

    I don't think Trump is an idiot. I don't think he's a genius either. I don't think he thinks that many moves ahead. He just plays it as he sees it.
     

    jamil

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    You might do well to think of Trump more like a hedge fund manager. He has access to information that you just can't get and he has been inside the system and seen how the gear train is really connected. None of that really confers predictive ability, it just allows them to make smarter or riskier bets according to their predilections. I would caution that holding Greenspan up as an example of a market oracle is tantamount to holding up McNamara as a military strategist

    I think Trump has a "working class" knowledge of the economy. That is to say, learned through OJT throughout his career. I don't think I'd want to invest in a hedge fund that he's managing. I'm not a hedge fund investor anyway, but if I were, I think he'd take more risks than is necessary. Somethings they'd pay off. Sometimes not. Depends whether his whims are on or off.

    I don't think he has a good academic understanding of the Economy, and I think that does him some good. The academics tend to be idealistic, and the way they were taking the economy wasn't working. So I think he does have some good instincts about how to make our economy strong, but then he has some tendencies that undermine that. Like the tariffs. And the trade war.
     

    NKBJ

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    Warning:
    The following spleen ventings are my own, may disturb the comforts zones of others and are in no way intended to reflect the false realities presented in daily broadcasts.

    The economic storm was made inevitable a long time ago with the pieces set in place before any of us were born. Because of the faction (#1) that has done this we're gonna get smacked with the hockey stick chart when we can no longer make the world support the lead backed reserve currency. The faction (#2) who put President Trump in place cannot prevent that. Whether they can derail the plans of faction #1 or to what extent remains to be seen. When Greenspan set up the economic planning for the chicoms it was based upon using them as the model for globgov, transferring manufacturing there and collapsing the US so that the globgov power was Eurasian "world island"-centric. But now (oopsie!), faction #2 is insisting upon preserving Oceania and my oh my Gramma what big teeth they have. All this other stuff about are we gonna have a recession, did the president do this or should he have tweeted that, that's all hooey.
     

    Leadeye

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    Meh. I figured big media's best move to unhorse the President would be to talk up economic gloom. How well it works we'll just have to see.
     

    amboy49

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    It’s been a LONG time since my college Econ classes so my view and opinion on the economic factors relevant to a recession may well be either outdated or even forgotten. However, from long term observation economists, as a group, seem to be unable to agree on whether its daylight or dark let alone what causes a recession, supply economics, or any of a hundred other variables. I am hard pressed to deny my instinct that the Democrat forces that be are fully intent on ensuring we go into a recession prior to the 2020 election regardless of hat or how it occurs.
     

    JettaKnight

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    The thing that's been freaking people out is the "yield inversion" thing - "What's an inverted yield curve? An inverted yield curve occurs when interest rates on bonds with longer maturities are lower than those on bonds with shorter maturities. It occurs because investors are anxious about the economic climate and are pouring money into longer-term bonds, which they see as safe havens."

    I don't know if that's still the case now or not, but I know that's what sparked all the recession predictions last week when that happened.

    You been listening to Planet Money / The Indicator?

    President Trump was selected for the job of piloting the ship of state through the coming economic hurricane. He didn't cause the storm. He can't get the ship out of the storm's path. He can make a huge difference in what shape the ship is in after the storm. On board to deal with are enemy agents, mutineers, crooks and hustlers.
    He and we need much prayer.

    LOLWUT?

    This seems like a history revision - Trump was elected to stick it the liberals. Nothing more.


    When he was elected, we were in an upturn in the economy that, we all hoped would continue. There was no "economic hurricane" on the horizon. There is now, but a lot of that has to do with these stupid tariffs and lower taxes without lower spending - and that's strictly his own doing.

    Tax cuts? Good of Trump. Failing to cut spending? Bad of Trump. The tariffs? We'll see if they have the desired effect, but economic trouble is an inescapable of effect.



    As to Bug's theory about Trump ripping the bandaid off quickly, well, that seems to be a preemptive claim from Trump apologists.



    All I know for sure, is that people are going to be telling me I need to buy gold now.
     

    Leadeye

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    You been listening to Planet Money / The Indicator?



    LOLWUT?

    This seems like a history revision - Trump was elected to stick it the liberals. Nothing more.


    When he was elected, we were in an upturn in the economy that, we all hoped would continue. There was no "economic hurricane" on the horizon. There is now, but a lot of that has to do with these stupid tariffs and lower taxes without lower spending - and that's strictly his own doing.

    Tax cuts? Good of Trump. Failing to cut spending? Bad of Trump. The tariffs? We'll see if they have the desired effect, but economic trouble is an inescapable of effect.



    As to Bug's theory about Trump ripping the bandaid off quickly, well, that seems to be a preemptive claim from Trump apologists.



    All I know for sure, is that people are going to be telling me I need to buy gold now.

    Buy Gold!!!!!!!

    Where's Howard Ruff when you need him?;)
     
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