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With Talks ‘Stalled’, Here’s Why Marko Kolanovic Thinks The Trade War Will Eventually Be Resolved
US stocks on Friday logged their first two-week losing streak of 2019.
A late-session swoon predicated on a largely superfluous CNBC "scoop" didn't help matters.
As you can surmise from the annotation in the bottom panel, CNBC's "scoop" wasn't really a "scoop". Talks with China effectively "stalled" minutes after Donald Trump opened his Twitter app two Sunday evenings ago to inform the world that the US would be more than doubling the tariff rate on $200 billion in Chinese goods within five
I never listen to wall st analysts for political insight given Marko K. comment above is proof. Trump is unstable and reacts in the moment so there is no modeling the outcome of this trade tussle. He is currently behind in the polls to most Democratic challengers right now. A slowing economy, not even a recession will spike his chances at re-election and he knows it. His only out to try to get re-elected in that event, will be to start a war- something I would not rule out. We live in very risky times.
Marko, like so many others on Wall Street, is still assuming that, in the end, everyone will be logical. Mm mm…..
The miscalculation is purely Marko’s. China has no problem riding this all out til Jan 2021. China will not give trump what he wants if for no other reason than his full ask is insane. trump has created a no win for himself, he either relents on his demands and loses face to his childlike base or he willfully tanks the economy.
I guess we can look at that as a long term positive, either way the facist wanna dictator is less likely to get re-elected because of this. I have always believed he was America’s Nero and that he was going to burn it down on the way out. Once he realizes he cornered himself, he will get desperate and we will see “insane” trump. Basically, you ain’t seen nothing yet.
Yes, China wants Trump gone and Obama back.
Now that China talks are down the drain, Trump quickly bows to Nancy and lifts Mexico an Canada steel and aluminum tariffs in order to get at least one trade deal to boast about.
Ok, add ten more dimensions to that analysis and realize the market is likely pricing those, including the extent Marco’s employer is hoarding Treasuries to the clear detriment of liquidity in other key places. And there won’t be any flavor or China resurgence that enables Europe to grow. It is not happening, and it will not happen.
for god’s sake. JPMorgan has nothing to do with this and neither do dealer treasury holdings. please, keep the conspiracy theories in the basement where they belong.
Xi is the head of State, head of the military, and head of the Party. Chinese leaders either serve out their terms, or they serve beyond them until they die or retire. They don’t have to worry about appearing “weak domestically” because Chinese state media is almost as subservient to power as America’s. Xi can make any trade deal, say he is strong, the media will report he is strong, and any blogger thinking otherwise will get arrested until the people too will believe he is strong.
The miscalculation above is thinking that BIDEN won’t appear weak domestically. Polling that supports Biden is based on people who fondly misremember Obama’s Vice President. Once they actually hear him speak, support for him will evaporate.
Trump is doing everything he can to engineer an election victory. He has a few possible “wars” (China, NKorea, Iran, Venezuala, Mexico) and wars are great for presidents. He needs to keep them all viable until 2020 and then escalate the best options at the time. But he also has to keep the stock market and economy floating on air. A fine balance.