duckdevil.bsky.social
Finance PhD, full professor @ University of Portland, college sports enthusiast (Go Ducks), happy cohabitant with my dogs and family.
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112 following
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Why isn’t leaning into our global service surplus a better strategy than trying to take an economy back to the 1950s?
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The Panic of 1907 would like to have a word regarding this fantasy.
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How can most of these countries, our allies, negotiate trade deals??? Are they going to start refusing offshoring from US companies?
Trade is not a zero-sum game.
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Large majority of trade deficit is w/ China, Vietnam, Mexico, Taiwan, and Germany. Outside of China, the rest are allies and are where US firms offshore. Most of what is left is China, and our deficit with them has dropped 30% since 2022. So what is the major negative systemic issue with trade?
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According to Federal Reserve data, corporate equities valued at $93 trillion end of ‘24. Households and Pension funds about 50% of the total. The feedback loop from a loss of almost $5 trillion in retirement assets over the past two days could create a lot of economic harm.
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Almost 2/3rds of the US trade deficit is with China, Mexico, and Vietnam. Mexico and Vietnam are utilized by US companies to improve profitability. So shouldn’t our trade beef just be with China???
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“ In our opinion, it was “Ruination Day”. Our leader explains why this is “the most profound, harmful and unnecessary economic error in the modern era” “
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Current trade deficit is basically a rounding error in US GDP … and messing with the good deficit could hurt our service surplus.
Do we really prefer a more manufacturing-based economy? Seems like our service-based economy has helped more than it hurt.
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Revisionist History, season 13 episode 3 … around the thirty minute mark it all becomes clear.
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You bring up a good point and inline w/ my second point. Riskier side of the consumer loan market is usually utilized by under-served consumers; likely to be at the lower-end of income distribution. Debt service ratios are relative to discretionary income. Important issues melt into the mean.
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Fed data backs this up. Overall consumer debt service levels remain historically low.
As in most cases, it will be the under-served who will be hit the hardest by a recession, not the upper-end of the income distribution.
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I think the re-inflating Japanese economy … after 30+ years … is going to play a bigger role in the macro than most people think.
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And a feedback loop.
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Spot on. Similar to quarterbacks.
Case in point, highest real GDP growth during a four-year presidential term post WWII was 1961-1964.
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DJT -35%
TSLA -33%
YTD
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YTD
EFA +9%
EEM +3%
AGG +2%
All out-performing Russell 1000 & 2000 growth & value ETFs.
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EU’s stock market is performing very well …
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El-Erian has made the statement for awhile, a data-dependent/fully objective FOMC is going to always be reactionary.
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Agreed. But getting the 10-year yield back in the three’s is going to be difficult without an economic pullback.
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At least we had The Spencer Davis Group in the 60s.
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Cage the Elephant’s 2024 album, Neon Pill … especially track two, Rainbow.
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So much liquidity in US markets now … feels like a casino, with all slot machines and no craps tables.
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Favorite Ska band?