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- Feb 4, 2025
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People who think tariffs are good and will make us rich do NOT understand how tariffs work.
*Investors Blog*
- Thread starter Warstud
- Start date
People who love taxes but hate tariffs are bipolar.
Most all - ALL - countries have some form of tariffs. We should use them as well.
I also think that this is a small blip, but historically speaking after the last 2 years or returns the market needs a rest, so I am expecting the overall market to end the year around where it started. I don't care who is in charge either.
People think the market goes up because APPL or NVDA had a great earnings report. The market goes up because liquidity enters the market. Good earnings simply dictate which specific equities get the most liquidity.
When liquidity drains out of the market - it will be the opposite. Companies with stable earnings with low multiples get hurt less comparatively. But everyone gets hurt. You sell what you can, not what you want to.
So your question - from what I know about liquidity - if its going to make a new high it likely will need to do so before mid summer, otherwise unlikely.
Personally I think we trade sideways with high vol this year. Too many moving parts.
Here we go, up up up, at least for a few minutes. 
Really, not sure how related to liquidity or realistic what I am about to post. Just my thoughts, nothing more.
As far as the pullback of the last week or two is more the uncertainty of tariffs and the massive amount of change happening. I think it will take way more than this to slow things down in the sense that people feel gloom and doom. Heck I think we are already looking forward to interest rate cuts because of it!
Im unsure, I dont have any facts but I question how many people actually tend to their 401k's and pull money out with measurable market moves and back in. I tend to think in our automated society where people dont bother to change their own oil or work on their own cars, cut their own laws, or paint their own homes, even clean their own windows. That they are not contacting their company 401k plans to pull money out and put it in money market funds. I T-H-I-N-K the vast majority just let it ride in whatever fund they are in knowing, history has taught sooner or later it comes back.
So that leads me to this. Dont know how right I am. The masters of Wall Street, which in many cases are computers and fund managers guiding them or the other way around. Have the safety switches in place to pull out of the market to preserve gains and secure future gains. HOWEVER ALL THESE funds, IF I AM CORRECT, can only stay in cash for a limited time (30 days?) otherwise, IF I AM CORRECT they need to stay invested, dont know the number, is it 90% ?? in the area that the fund focuses on.
Meaning, they can pull out during a dip but MUST buy back in a short period of time to satisfy the requirements of the fund.
SO they can sell high and buy back in when low but must do so during a specific time period. If I am correct, isnt most of the market made up from retirement funds and such?
All these crazy swings can be very profitable to a fund. SELLING HIGH, BUYING BACK DURING DIPS. But the bottom line either way, the money has to be fully invested and stay fully invested in the market to satisfy the objectives of the fund.
COMMENTS WELCOME!
Really, not sure how related to liquidity or realistic what I am about to post. Just my thoughts, nothing more.
As far as the pullback of the last week or two is more the uncertainty of tariffs and the massive amount of change happening. I think it will take way more than this to slow things down in the sense that people feel gloom and doom. Heck I think we are already looking forward to interest rate cuts because of it!
Im unsure, I dont have any facts but I question how many people actually tend to their 401k's and pull money out with measurable market moves and back in. I tend to think in our automated society where people dont bother to change their own oil or work on their own cars, cut their own laws, or paint their own homes, even clean their own windows. That they are not contacting their company 401k plans to pull money out and put it in money market funds. I T-H-I-N-K the vast majority just let it ride in whatever fund they are in knowing, history has taught sooner or later it comes back.
So that leads me to this. Dont know how right I am. The masters of Wall Street, which in many cases are computers and fund managers guiding them or the other way around. Have the safety switches in place to pull out of the market to preserve gains and secure future gains. HOWEVER ALL THESE funds, IF I AM CORRECT, can only stay in cash for a limited time (30 days?) otherwise, IF I AM CORRECT they need to stay invested, dont know the number, is it 90% ?? in the area that the fund focuses on.
Meaning, they can pull out during a dip but MUST buy back in a short period of time to satisfy the requirements of the fund.
SO they can sell high and buy back in when low but must do so during a specific time period. If I am correct, isnt most of the market made up from retirement funds and such?
All these crazy swings can be very profitable to a fund. SELLING HIGH, BUYING BACK DURING DIPS. But the bottom line either way, the money has to be fully invested and stay fully invested in the market to satisfy the objectives of the fund.
COMMENTS WELCOME!
We are almost there!!
Obviously the point is not to do this. However I looked at my Vanguard options the other day and there is not even the option of a money market. There are a couple Vanguard active managed bond funds with awful performance. Its really a joke. There literally is no cash option.
Come on BITOG whales, scare the sludge out of the shorts!
*stares at TEMU tariff bill and returns to sender*
Personally my crystal ball thinks the markets will be fine once adjusted to the changing world events.
No matter what happens as even mentioned by another, funds have to stay invested and many 401's do not even have a way to go into cash.
Also I can see the writing on the wall and imagine with this shake up Wall Street Celebrating the chances of interest rate cuts!
This thread was started THREE YEARS AGO! Amazing and even then, there are those (and possibly me at times too, cant remember) calling for a market crash, going into cash I never did and here we are still at the levels we are at. Those who got out 1,2,3 years ago missed a massive up market. Anyway, I think way too much, Im glad I dont act on my thoughts day to day. Except as posted Im back in the market 100% and staying there forever or another day or two *LOL*
No matter what happens as even mentioned by another, funds have to stay invested and many 401's do not even have a way to go into cash.
Also I can see the writing on the wall and imagine with this shake up Wall Street Celebrating the chances of interest rate cuts!
This thread was started THREE YEARS AGO! Amazing and even then, there are those (and possibly me at times too, cant remember) calling for a market crash, going into cash I never did and here we are still at the levels we are at. Those who got out 1,2,3 years ago missed a massive up market. Anyway, I think way too much, Im glad I dont act on my thoughts day to day. Except as posted Im back in the market 100% and staying there forever or another day or two *LOL*
Yup. Started with an impending recession... I saw a strong, recovering economy.
Hopefully post #1 will still be in error....
Last time the fed cut rates, the bond vigilantes revolted and the long end went up.
Bessent made a big deal prior to November 5th about the treasury selling the bulk of debt in Bills, contrary to long history of selling Coupons. But no one wants to buy coupons which is why Janet was doing it. Now that he is in charge guess what's for sale. 85% bills. New boss same as old boss.
Rates aren't going down because no one wants the debt on the long end. People like me will take it at 13 week chunks, thank you very much.
So either we keep higher for longer on the long end, or the fed starts buying again and we get inflation.
And now you know the reason for all the saber rattling.
Most countries use targeted tariffs with quotas. For instance it was stated by the US government yesterday that Canada has a +200% tariff on dairy. What was omitted was there is a quota that needs to be met first for tariff-free sales before the tariffs go into effect and to date, in any given year, we haven't even reached half the quota needed to trigger the tariff. Let me also say the same administration negotiated that tariff 4 years ago. Targeted and smart tariffs are very different than broad/blanket tariffs.
Also people forget to mention the de minimus- maybe on purpose
4WD
$50 site donor 2025
Thanks Jeff …
4WD
$50 site donor 2025
I have no idea how this stays open … rich in politics
You have stated you hate your customers with a burning passionI'm thinking of tariffing my own USA
customers.
Most countries have VAT's. A VAT is essentially a tariff, when it comes to 2 way trade between countries - ie when Canadians sell to USA they pay no VAT, when we sell to Canada we do. I explained it above.
You can disagree, but most economists agree with me. Although most economists disagree with tariff's also. They don't like Tariff's or VAT's or really any tax - there unproductive. Milton Friedman is famous for railing on taxes, tariff's, VATS and government unproductive spending in general.
Also, in a sound money system a trade deficit would mean your currency would fall, and would help balance trade between two countries. However the US dollar keeps getting stronger even with ever bigger trade deficits. The downside of the reserve currency.
But none of the current moves are really about tariff's. There about too much debt, a shrinking populace and a dieing system.
So are you shorting the market?
