Just 10 years ago, the huge global bank Bear Stearns collapsed, the first in a chain of events that eventually triggered the Great Recession — since then, the S&P 500 has risen more than 300%, but some analysts are leery of the recent stock gains, warning the markets could be headed toward another collapse.
.. Gartman warned the possibility of a market bubble was “very serious” at this point, citing a nine-year bull market that was predominantly predicated on the Federal Reserve’s aggressive force-feeding of reserves into the system in the U.S.
Trump’s Tough Talk on Trade Rattles Investors
White House decision to impose tariffs on steel and aluminum imports raises concern that a broader protectionist trade policy may be in the offing
.. Low interest rates have long been a justification for stocks’ lofty valuations, and investors say higher rates will make equities less attractive as borrowing costs and Treasury yields rise.
.. Despite the retreat, the Dow is still up 34% since its election day close in 2016.
.. He thinks the prospects of a trade war are very small and that when the market realizes that, stocks will bounce back again.
.. European officials raised the prospect that they would challenge the tariffs at the World Trade Organization and could impose their own tariffs. Canadian officials also said they would “take responsive measures” against the U.S.
.. “I believe these tariffs on their own will push inflation higher, and higher inflation is a threat to the valuations of more or less all financial assets today,”
Trade Wars Are Destructive. Of Course Trump Wants One.
.. as with so many other policies he has supported, he appears to have little understanding of this one.
.. Many White House aides, including Mr. Trump’s chief economic adviser, Gary Cohn, appeared to be caught off guard by the decision; on Wednesday, Mr. Cohn had warned that he might resign if Mr. Trump went through with the tariff plan.
.. The stock market fell sharply after the announcement because investors feared that the move was the first of several that could result in escalating disputes
.. The steel and aluminum tariffs are ostensibly aimed at punishing China, which has been driving down prices for those commodities by producing far more metal than the world can use. But Mr. Trump’s move will have a limited effect on China because much of the steel and aluminum the United States imports actually comes from allies like Canada, Brazil, South Korea and Mexico.
.. the move could hurt American businesses that use these metals, including auto and construction companies
.. If Mr. Trump were truly interested in getting China to reduce its excess production, he would have worked with the European Union, Canada, Japan, South Korea and other countries to put pressure on Beijing. Those nations tend to be closely aligned with the United States and have also been hurt by China’s mercantilist economic policies.
.. threatening to retaliate forcefully against the new Trump tariffs. They could do so by bringing cases against the United States at the World Trade Organization, or by doing what Mr. Trump did and unilaterally imposing new tariffs on American exports like soybeans and Boeing planes.
.. Canada imports more American Steel than it exports to the United States, giving it the ability to hurt the very industry Mr. Trump claims to want to help.
.. Chrystia Freeland, says Canada buys about half of American steel exports.
.. for every new job at a steel mill or aluminum smelter that is created by this trade decision, the country could lose as many or more jobs at businesses that use those metals, which will now cost more. This is one of the reasons that trade wars are, in fact, not easy to win.
.. Mr. Trump clearly sees trade as a zero-sum game.
.. He and some of his most protectionist advisers, including Peter Navarro, think that if China and Mexico sell the United States more things than they import from America, they are winning.
Thomas Friedman: Everyone Is Going All the Way
It is hard to spend a week in Israel and not come away feeling that Israelis have the wind at their backs.
- They’ve built an awesome high-tech industry
- Regionally, the Arabs and Palestinians have never been weaker
- Israel has never had a more unquestioningly friendly United States.
- Trump recognized Jerusalem as Israel’s capital, asking Israel for nothing in return. The Arab states barely made a peep.
this wind has whetted the appetite of Israel’s settlers and ruling Likud Party to go to extremes
.. the “Likud Party unanimously urged legislators in a nonbinding resolution … to effectively annex Israeli settlements in the occupied West Bank, land that Palestinians want for a future state.”
.. Sure, the world would scream “apartheid,” but Israeli rightists shrug that the world will get used to it.
- Nikki Haley will cover for Israel at the U.N.
- Sheldon Adelson will keep Trump and the G.O.P. in line.
- And the Arab regimes, which need Israel to counter Iran, will look the other away.
They think they can annex the West Bank without giving Palestinians citizenship; they’ll just let the Palestinians vote in their own elections.
.. May 17, 1983 .. Israel (backed by the U.S.) imposed virtually all its security demands on a weak Lebanese government, including a framework for normalizing trade and diplomacy.
.. “Going All The Way: Christian Warlords, Israeli Adventurers and the War in Lebanon.”
I always loved that title — going all the way. It’s a recurring theme out here, and it almost always ends with a “Thelma and Louise” moment — partners driving over a cliff — and so it did with Israel in 1983.
.. everywhere I look today I see people going all the way.
- I see Republicans trashing two of our most sacred institutions — the F.B.I. and the Justice Department — because these agencies won’t bend to Trump’s will.
- I see Iran controlling four Arab capitals: Damascus, Sana, Baghdad and Beirut.
- I see Hamas still more interested in building tunnels in Gaza to kill Israelis than schools to strengthen Palestinian society.
- I see the crown prince of Saudi Arabia with one hand undertaking hugely important steps —
- moderating Saudi Islam,
- letting women drive and
- opening Saudi society culturally to the world
- and, with the other hand,
- abducting the prime minister of Lebanon,
- buying ridiculously expensive paintings and
- seizing businesses in the name of combating corruption
- I see the Taliban killing 103 people in Kabul by packing an ambulancewith explosives and driving it into a crowd.
I see Houthis, Yemeni warlords, Iranians, Saudis and the U.A.E. all tearing Yemen apart in the name of God knows what.
I see Turkey’s president silencing every critical journalist in his country.
I see the Egyptian and Russian presidents eliminating all serious rivals in their upcoming elections.
I see Bibi Netanyahu trying to derail a corruption investigation by weakening Israel’s justice system, free media and civil society — just like Trump and for the same purposes: to weaken constraints on his arbitrary use of political power.
I see an American president threatening to tear up, or actually tearing up, global agreements he doesn’t like —
the Iran nuclear deal,
Nafta,
the Trans-Pacific Partnership,
the Paris climate accord and
aid to Palestinians and Pakistanis —
but without any clear plan or alternative for the morning after that will improve on the status quo.
Worst of all, I see an America — the world’s strongest guardian of truth, science and democratic norms — now led by a serial liar and norms destroyer, giving license to everyone else to ask, why can’t I?
Can anything stop this epidemic of going all the way? Yes: Mother Nature, human nature and markets. They’ll all push back when no one else will.
.. How so?
Gaza has limited hours of electricity each day.
Result: Gaza’s already inadequate sewage plants are often offline, and waste goes untreated straight into the Mediterranean.
Then the prevailing current washes Gaza’s poop north, where it clogs Israel’s big desalination plant in Ashkelon — which provides 15 percent of Israel’s drinking water
.. In both 2016 and 2017, the Ashkelon plant had to close to clean Gaza’s crud out of its filters. It’s Mother Nature’s way of reminding both that if they try to go all the way, if they shun a healthy interdependence, she’ll poison them both.
.. then out of nowhere Iranians back home start protesting against Suleimani’s overreach; they’re tired of seeing their money spent on Gaza and Syria — not on Iranians. And, just as suddenly, the biggest internet meme in Iran becomes an Iranian woman ripping off her veil and holding it upon the end of a stick.
.. And if you don’t think markets have a way of curing excesses, you didn’t read the top story in The Times.
.. Watch out for
- the market,
- Mother Nature and
- human nature.
.. One is the relentless product of chemistry, biology and physics; one is the balance between greed and fear; and the third is the eternal human quest for freedom and dignity. In the end, they’ll shape the future more than any leader or party who tries going all the way.