Posted on 03/14/2018 1:06:52 PM PDT by SoFloFreeper
Back in late January the Atlanta Fed was calling for a 5.4 percent GDP gain, but on Wednesday it said growth likely will be just 1.9 percent.
(Excerpt) Read more at cnbc.com ...
So is the Fed worried? Was the Fed guilty of hubris in January?
Trump is right to demand fair trade from other nations, so maybe the experts are a little too skittish to think he can accomplish his goal.
thoughts?
Unexpected......................
Wait a minute. If it’s from CNBC it must be true. Right?
Weather
No, has nothing to do with CNBC. This is what the threat of slapping tariffs will do. Unlike what Trump says, trade wars are not easy to win. How does raising prices on the American consumer lead to prosperity? The market is expecting retaliatory tariffs hence the drag on growth.
This is strictly anecdotal, but here it is.
For the past several years during the middle of March or thereabouts, Mrs. abb & I go to New Orleans. We come before it gets too hot, and after Mardi Gras when the hotel rates are better. We visit the WW2 Museum, the Cabildo Louisiana State Museum, shopping at the Riverwalk, etc.
But mostly we go to enjoy the restaurants, arguably among the best food in the world.
This year, the place is swarming with people. Restaurants have waiting lines that we’ve never seen before. The French Quarter was bustling with people at mid-morning, again something we’ve never seen.
At dinner last night, we asked our waiter about it. He said since the first of the year, “it’s been crazy busy.”
We asked the hotel manager, and he mentioned conventions, but the folks we’ve seen in the quarter don’t look like convention types, just regular folks.
When the Fed raises the cost of borrowing money, money is less likely to be borrowed.
2. Products may not cost more - The assumption that our products will go up significantly in price is a realistic concern. But it is not an absolute given. In the immediate period of implementation according to some of the best estimates the tariffs may raise the purchase price of a new car something close to $45, and a twenty-four pack of beer by .05 cents. But what happens if steel & aluminum production begins to match volume wise the amount we import from other world sources? Economics 101 teaches us that prices drop as inventory surges. If our steel production grows enough we could wipe out the gains mix-minused in our dependence on China.
3. The world doesn’t like it - Of all the pushback this reasoning is among some of the most inane. When the United States does what we have to do to shore up our markets, jobs, workers, and life we have less and less need to care what the world thinks about it. This isn’t hubris, this is independence. To be tied to China’s cheap steel, Saudi Arabia’s oil reserves, and the good graces of the global community fundamentally puts us at a more vulnerable position from an economic & national security standpoint. Like much of the rest of the Trump focus, America needs to shore up America’s capacity for whatever faces us, and being utterly dependent upon others doesn’t move us in that direction.
4. We shouldn’t pick winners & losers - This is an argument normally made when discussing competition between domestic companies here in the USA. Jonathan Hoenig, appearing on Neil Cavuto on Friday, repeatedly invoked this as some sort of determining factor as to why the tariffs should be prevented. But it’s an illegitimate argument. This isn’t picking one steel factory over another and using tax-payer incentives to cause one or the other to succeed. This is a fight for survival between a metal industry that has suffered enormous loss for the better part of multiple decades, and the slave labor of China. The winners in the near term are steel and aluminum workers.
5. The national security consideration - Those that have argued that a trade war is inevitable, seem to also forget the increasingly perilous hair trigger of real war that the globe is constantly on the edge of. If America were to find itself drawn into a conflict with North Korea or Iran, it is likely whatever degree of imports we get from China and Russia would immediately be frozen. Fifteen years ago more than a dozen aluminum smelters were in operation. Today there are only three and the entire capacity of one of those three is necessary just for the military and related technologies. We are more vulnerable than necessary, and increasing domestic production solves this vulnerability.
6. Had to be (as it was) done in the correct sequence - Because of the rapid growth of the economy by rolling back some 2000+ regulations coupled with the very real impact that Trump tax reform is having now is the absolute right time to push for this “leveling of the playing field.” Most Americans will be more likely to accept an increase in the price of their next car by $45 if they know that Americans are benefitting. They are even more so if they have on average $90 more per week appearing in their pay
What an exceptional presentation. Thank you for sharing!
Makes some sense if all the parties comply not the case.
It’s a setup.
How could unemployment be so low, factory orders so high, etc?
Further...Being off the mark by that much would prove a whole bunch of other things.
Not buying it.
First, the part of the announcement to note carefully:
[…] The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revisionby the source agency (see “Source Data for the Advance Estimate” on page 3). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2018.
Equivocators!!!
The article spells out the rest.
We end up 3.6-4’sh percent....
There were several threads here touting the high GDPNow figure that was based on a single data point. We saw this trend with the 4Q17 numbers as well - a high reading based on the first data point and more moderation as more came in. I warned people not to get too excited about that first number. I’m sure we’ll see this again in late April when they kick off the 2Q18 tracking.
Will a trade war erupt? Most likely it will because countries have in the past, retaliated against tariffs. There is a chance they may not this time but I wouldn't hold my breath. Besides, the major steel/aluminum exporters are Brazil, Canada & Mexico. Chinese steel is less that 3% of our imparts. Even with the Chinese "threat" our steel production was up last year as was profits for US Steel companies. As a side note- Should other countries have slapped additional tariffs on GM productions when Obama bailed them out in 2009? It is/was government subsidies that enabled them to sell their product at a price lower than Honda or Toyota?
Products will cost more - there is just no way around that. When you eliminate cheaper alternatives prices have to rise. That's just an empirical truth.
We definitely are picking winners and losers. Why steel? Why not cars? Computers? The point is, it's not the free market (i.e. the American consumer) that determines the winner and loser.
Speak for yourself when you say that Americans will pay more because it's made in America. The average American consumer sure doesn't feel that way based on the products that are being purchased. I'll speak for myself and say I go for the best value (doesn't necessarily mean the cheapest) and if that means buying from other countries then so be it. If you want my hard earned dollars, then make a better product.
The most disappointing thing to me is that this short sighted policy can very well undo all of President Trump's economic accomplishments.
The trade war erupted 40 years ago, and we are losing.
Sir I ask, how can I have an intelligent conversation about trade when your starting position is so ridiculous - ignorant? Can't you just admit that the USA IS IN A TRADE WAR NOW? After 4 decades of deficits, and and a trade imbalance reaching almost a trillion annually, can we start there?
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