*Investors Blog*

[SC Maintenance]

Automation works just as well overseas.

In the US, our environmental laws, declining workforce, along with the extreme expense of construction get in the way.

CEO's believe these policies are temporary & are unwilling to spend big (on new US factories) in the event the tariffs stick around more than 4 years.

Aluminum and steel tarrif's went into affect in 2018 and stayed in place. Here are some current projects I know about:

Steel Dynamics is building a brand new aluminum mill in Mississippi. Opens this year
Novelis is building a brand new aluminum mill in Alabama. Opens next year.
Arcelor is just finishing a electric furnace in Alabama - I believe its operating or close. They used to ship slabs in from off-shore.
Steel dynamics opened a brand new rolling mill in Texas in 2023
Nucor built a new mill in Florida - opened 2020
Nucor just announced a new mill to be built in WV and Hyundai just said there building a new mill in Louisiana.

These are just the ones I know about. There are lots more outside my neck of the woods.

I believe your assumption is wrong

 

[ZeeOSix]

No doubt, but I was making a point. If you shrunk imports by say $100B, you simultaneously shrink the trade deficit by $100B, and Increase GDP by $100B.

I think this is the part most don't understand. Lowering imports is an automatic 2 for 1 benefit.

Assuming product supply can magically and instantly switch from being imported to building them all here - and building them here costing the manufacturing companies the same as if not made here, and they therefore cost the same to the consumer. How's that going to happen? If that can even happen without magic, it's going to take a very long time (possibly years) to make it happen. And the prices of those goods has to go up for obvious reasons (capital investment recovery, higher worker wages, maybe higher operating costs, etc). The same products made here are not going to be the same price or cheaper. In the transition phase of moving manufacturing here, the prices are still going to go up because of the tariffs and people jumping on the inflation train again due to some possible supply shortage factors.

 

[JeffKeryk]

As of right now, if you consider "the market" to be the S&P 500, It is flat on a 1 year measure, and up 100%, or double, in 5 years.

Really, no one has anything to complain about. If you have been in the market for a while, you have gotten way outsized gains over the last 5 years still. If you just started in the market, you get to dollar cost average in at a lower base going forward.

What kind of return should these people expect in the stock market? If they can't handle this draw down, they should not have been in the stock market at all. T-bills have been paying South of 4% for at least 2 years.

I have commented many times of how shocked I am that people close or even in retirement are 100% in stocks.

About 35% of the S&P is comprised of 15 companies. And it would be higher if it weren't for the past few weeks.

I complain because this did not have to happen. And I fear the uncertainty. What happens if and when the bad things happen?
I prefer the incentives TSMC was given in Arizona over this mess.

 

[JeffKeryk]

Aluminum and steel tarrif's went into affect in 2018 and stayed in place. Here are some current projects I know about:

Steel Dynamics is building a brand new aluminum mill in Mississippi. Opens this year
Novelis is building a brand new aluminum mill in Alabama. Opens next year.
Arcelor is just finishing a electric furnace in Alabama - I believe its operating or close. They used to ship slabs in from off-shore.
Steel dynamics opened a brand new rolling mill in Texas in 2023
Nucor built a new mill in Florida - opened 2020
Nucor just announced a new mill to be built in WV and Hyundai just said there building a new mill in Louisiana.

These are just the ones I know about. There are lots more outside my neck of the woods.

I believe your assumption is wrong

Targeted, surgical tariffs are one thing. I suggest the current global tariffs are on a completely different level.

 

[SC Maintenance]

I prefer the incentives TSMC was given in Arizona over this mess.

So you are OK with handing $6.6 Billion of taxpayer money directly to a Taiwanese company, and then at the same time make it pretty much illegal for any semiconductor equipment OEM to sell the highest end equipment to China - so that big tech in silicon valley doesn't have to compete and make sure IC's are artificially expensive.

But it is not acceptable to try to level the playing field for other industries because it might raise the price of walmart trinkets a couple pennies?

I think I am fine with both - for the record.

Targeted, surgical tariffs are one thing. I suggest the current global tariffs are on a completely different level.

I have no control whatsoever over policy. I do endeavor to understand it objectively however.

 

[SC Maintenance]

Under things that make you go hmmmm.

You would think "flight to safety" would include utilities - which are often referred to as bonds masquerading as stocks. But utilities sold off hard today.

 

[Jerrysends]

Aluminum and steel tarrif's went into affect in 2018 and stayed in place. Here are some current projects I know about:

Steel Dynamics is building a brand new aluminum mill in Mississippi. Opens this year
Novelis is building a brand new aluminum mill in Alabama. Opens next year.
Arcelor is just finishing a electric furnace in Alabama - I believe its operating or close. They used to ship slabs in from off-shore.
Steel dynamics opened a brand new rolling mill in Texas in 2023
Nucor built a new mill in Florida - opened 2020
Nucor just announced a new mill to be built in WV and Hyundai just said there building a new mill in Louisiana.

These are just the ones I know about. There are lots more outside my neck of the woods.

I believe your assumption is wrong

Your examples are of large, heavy commodities that are expensive to ship, not cheap widgets.

And yes, Metal production fall squarely into the national security category for building ships & military vehicles. One of the few industries that should be prioritized onshore- besides food.

our production of consumer products should be outsourced to the lowest bidder overseas while we produce high value IT, services & precision manufacturing.

Best to let the corporate free market work without any government intervention in the form of tariffs &/or quotas. Globalism benefits everyone.

 

[Jerrysends]

As of right now, if you consider "the market" to be the S&P 500, It is flat on a 1 year measure, and up 100%, or double, in 5 years.

Really, no one has anything to complain about. If you have been in the market for a while, you have gotten way outsized gains over the last 5 years still. If you just started in the market, you get to dollar cost average in at a lower base going forward.

What kind of return should these people expect in the stock market? If they can't handle this draw down, they should not have been in the stock market at all. T-bills have been paying South of 4% for at least 2 years.

I have commented many times of how shocked I am that people close or even in retirement are 100% in stocks.

Investors should be more concerned about the VIX & oil markets. These indicators mimic the start of the great recession & Covid-19 crash.

 

[JeffKeryk]

So you are OK with handing $6.6 Billion of taxpayer money directly to a Taiwanese company, and then at the same time make it pretty much illegal for any semiconductor equipment OEM to sell the highest end equipment to China - so that big tech in silicon valley doesn't have to compete and make sure IC's are artificially expensive.

But it is not acceptable to try to level the playing field for other industries because it might raise the price of walmart trinkets a couple pennies?

I think I am fine with both - for the record.



I have no control whatsoever over policy. I do endeavor to understand it objectively however.

Absolutely.
Fremont gave Tesla a sweetheart deal and the results have been stellar.
Yes, I am very pro incentive, in fact I consider it government's responsibility to incentivise objectives that the private sector would not or could not do in their own.

China wants Taiwan. China is our enemy and Semiconductors are a critical industry. FYI, TSMC AZ is having troubles. On-shoring and reshoring is not a slam dunk for a myriad of reasons.

Another horrible problem with the global tariffs is we are alienating allies and top trading partners. In what world does this make sense?

 

[SC Maintenance]

Investors should be more concerned about the VIX & oil markets. These indicators mimic the start of the great recession & Covid-19 crash.

Sound observations, but I am not sure how much I would read into either relative to 2008.

The VIX has saved my bottom the last 2 days. Its not a tool for everyone for sure, but it saved me. But its just a measure of herd mentality - not a real indicator of anything.

The oil price drop was because Saudi said this AM there going to start supplying more oil, I don't think it has anything to do with tariff's. Were awash in oversupply - and have been for a while. I am not surprised by the drop - Saudi has been holding back 2M BPD for years. If Opec is done trying to push oil up, then we might be in for some cheap gas, and a lot of out of work oil workers in the USA.

 

[SC Maintenance]

Your examples are of large, heavy commodities that are expensive to ship, not cheap widgets.

And yes, Metal production fall squarely into the national security category for building ships & military vehicles. One of the few industries that should be prioritized onshore- besides food.

our production of consumer products should be outsourced to the lowest bidder overseas while we produce high value IT, services & precision manufacturing.

Best to let the corporate free market work without any government intervention in the form of tariffs &/or quotas. Globalism benefits everyone.

I disagree.

On metals, China attempted to take over the metals market. They built hundreds of mills and were dumping all over the world. Steel runs around $1000 a ton, and aluminum around $2500. Shipping is between $100 and $250 a ton from China to USA by ship. So really its not impossible if China was willing to subsidize, which they were.

On cheap consumer goods - thats a bigger picture. Sure, maybe we will never make $4 prescriptions in the USA. But maybe its a carrot. There all currently made in China. Maybe Mexico or Brazil or Indonesia or whomever want to cut a deal. Free trade. Implied defacto security blanket. You can take over the manufacture of Cheap prescriptions and rubber dog toys, your people have jobs, and we are friends - as apposed to dealing with China.

 

[Tundragod]

You two should call on the phone and talk to each other.

 

[99Saturn]

I disagree.

On metals, China attempted to take over the metals market. They built hundreds of mills and were dumping all over the world. Steel runs around $1000 a ton, and aluminum around $2500. Shipping is between $100 and $250 a ton from China to USA by ship. So really its not impossible if China was willing to subsidize, which they were.

On cheap consumer goods - thats a bigger picture. Sure, maybe we will never make $4 prescriptions in the USA. But maybe its a carrot. There all currently made in China. Maybe Mexico or Brazil or Indonesia or whomever want to cut a deal. Free trade. Implied defacto security blanket. You can take over the manufacture of Cheap prescriptions and rubber dog toys, your people have jobs, and we are friends - as apposed to dealing with China.

Or we just keep running huge trade deficits with our enemies with nothing to show for it. I have seen the enemy, and it is us.

Pharmaceuticals were one of the categories that were not included in this round of tariffs, not necessarily the APIs. APIs mostly come from China but a large portion of the generics we consume are manufactured in India.

It'll be interesting to see what impact reciprocal responses have. It'll also be interesting given how tight the pharmaceutical supply chain is for generics what future supply looks like.

 

[SC Maintenance]

Bitcoin is a 24/7 market. Its also very tightly corelated with global liquidity - well documented by people like Lyn Alden and Jim Bianco.

So Bitcoin is flat for 5 days. I take this to mean that the current sell-off is pure headline driven - not a liquidity squeeze.

Anyone?

 

[Pablo]

Say no more.

 

[4WD]

Aluminum and steel tarrif's went into affect in 2018 and stayed in place. Here are some current projects I know about:

Steel Dynamics is building a brand new aluminum mill in Mississippi. Opens this year
Novelis is building a brand new aluminum mill in Alabama. Opens next year.
Arcelor is just finishing a electric furnace in Alabama - I believe its operating or close. They used to ship slabs in from off-shore.
Steel dynamics opened a brand new rolling mill in Texas in 2023
Nucor built a new mill in Florida - opened 2020
Nucor just announced a new mill to be built in WV and Hyundai just said there building a new mill in Louisiana.

These are just the ones I know about. There are lots more outside my neck of the woods.

I believe your assumption is wrong

Late 2017 they opened a fully automated pipe plant in Texas that uses natural gas. This pipe is then used to drill wells in Texas. All shipped by truck or rail - no ocean-going smokers. This is a good example of the right product in the right place.

 

[Zee09]

Elon only owns 12.78% of Tesla

 

[4WD]

Day traders gonna squeal then figure it out - but we can't carry on with both the people and our so-called leaders piling up unheard of debt. All these experts here thinking they could repeat their IT career are dreaming - They can and do software and engineering stuff in India and other places more and more ... We need tangible products to come back - things that can't be done online ...

 

[Zee09]

I'd like too see the word tariff banned here... before we do I heard a neat one liner.... Vietnam T words us 90%... the only American product you can find in Vietnam is an old land mine....

 

[Pablo]

I'd like too see the word tariff banned here... before we do I heard a neat one liner.... Vietnam T words us 90%... the only American product you can find in Vietnam is an old land mine....

I love your layering. Effective or affective?