Tesla Investor's General Macroeconomic / Market Discussion

[Intl Professor]

There's a lot of concern in traditional diplomatic circles about Trump's negotiating skills, especially his tendency to impulsive behavior and simple solutions in complex situations. Withal he is reported to get most of his information from TV and even shuns reading the daily intelligence report. (That was the job of Porter and/or Kushner until the latter lost his top secret clearance.)

These concerns may be overstated. Deep down, bullies are really fearful cowards. When they are lucky they eventually can be rescued by changing the frame of reference from a test of deadly force to a symbolic fight of less import. In nature we have examples of peacocks who strut around in beautiful displays of dignity as they parade. Neither Trump nor Kim would win a fair beauty contest but they both have a flair for the dramatic and perhaps that can have a positive result.

If it happens the summit may only be a symbolic photo opportunity for the principal players in this Kabuki show. They could announce their peaceful intention by promising to support the goal of further negotiations by North and South Korea of the peace treaty elaborated above. By focusing on a peace treaty without reservations the bullies can let their diplomats work out the details and the pressure will be on them to get something more responsible and realistic done that is more than showboating. Trump's real gift is conning the public. Of course all of this will be naught if John Bolton becomes the next national security advisor to the President. His role, as with Stephen Miller on immigration, would be to maintain the traditional road to war. I remember then Secretary of State Dean Rusk being asked his solution to the problem of Berlin: "My goal is to see the problem of Berlin remains a problem"

Edit: A quick search reveals my memory of Rusk was correct and this recent study nails the dangers of preconceptions on the U.S. and Soviet sides respectively.

http://rhpsnet.com/journals/rhps/Vol_2_No_1_March_2014/1.pdf

 

[sundaymorning]

The economy is looking strong, the jobs report crushed expectations for March. Overall market up on this news:

U.S. economy adds 313,000 jobs in February, crushing expectations

 

[Starno]

The economy is looking strong, the jobs report crushed expectations for March. Overall market up on this news:

U.S. economy adds 313,000 jobs in February, crushing expectations

This year is going to be really strong. Lot of cash on the sidelines, still low interest rates, and tax cut who's going to boost everything.

This is truly the year Tesla needs to take advantage of to get on the right track (production wise).

 

[Intl Professor]

And the next Nobel peace prize goes jointly to Kim, Trump and

The Man Bringing Trump and Kim Jong-un Together

Stranger things have happened. The first winner was Teddy Roosevelt. What is it he said, "shout loudly and threaten a big stick"? Or was it speak softly, persistently, and let others wave their big whatevers. If the NYT report is accurate, Trump's gracious letting South Korea announce the summit was really deft and a good omen. If this is to be Trump's "Nixon moment" the nuclear issue is a side one. It must begin with a peace treaty then, of course, a complete nuclear cool down can be achieved. Talk peace, make it happen. Peace can never be obtained by weapons alone unless it is Carthaginian. Good intentions have to be established first; weapons later. Moon understands this.

 

[Curt Renz]

...The first winner was Teddy Roosevelt. What is it he said, "shout loudly and threaten a big stick"? Or was it speak softly, persistently, and let others wave their big whatevers...

New York Governor Theodore Roosevelt in a 1900 letter: I have always been fond of the West African proverb: "Speak softly and carry a big stick; you will go far."

 

[elasalle]

This year is going to be really strong. Lot of cash on the sidelines, still low interest rates, and tax cut who's going to boost everything.

This is truly the year Tesla needs to take advantage of to get on the right track (production wise).

Isn't that what also sparked the inflation fears a couple of weeks back ? If Fed again digests the data and goes with 4 rate hikes, we will be back to square 1 or worse ..

 

[Intl Professor]

The unemployment rate remained steady at 4.1% If I remember correctly, in the fifties or sixties our healthy unemployment rate was on the order of 2% while critics complained the Germans and some other Europeans were nearer 1% so we could do better. The current rate by those ancient standards does not predict an imminent sharp jump in interest rates. There's a lot of discretion the Fed can exercise.

 

[anticitizen13.7]

I’ve taken the opportunity to re-balance my retirement accounts (index funds) while the markets are hot.

 

[sundaymorning]

Isn't that what also sparked the inflation fears a couple of weeks back ? If Fed again digests the data and goes with 4 rate hikes, we will be back to square 1 or worse ..

Despite the jobs numbers providing a healthy outlook to the overall economy, what drove the market up today was due to a much lower than expected increase on individual income. Had personal income also sharply rose, then the Feds would be eyeing a rate hike. But due to income numbers coming in flat, the market see’s it as sign that the Feds won’t be hiking rates too much. Base on today’s data, we won’t be at “square one” imo, we have the clear pathway for the market to be bullish, at least for now.

Last week the Feds were looking at a whole different set of data, this week they are looking at a different set, this will ultimately change from month to month. Things are headed in the right direction imo. The Korean threat seems to withering as well.

 

[elasalle]

Despite the jobs numbers providing a healthy outlook to the overall economy, what drove the market up today was due to a much lower than expected increase on individual income. Had personal income also sharply rose, then the Feds would be eyeing a rate hike. But due to income numbers coming in flat, the market see’s it as sign that the Feds won’t be hiking rates too much. Base on today’s data, we won’t be at “square one” imo, we have the clear pathway for the market to be bullish, at least for now.

Last week the Feds were looking at a whole different set of data, this week they are looking at a different set, this will ultimately change from month to month. Things are headed in the right direction imo. The Korean threat seems to withering as well.

If market had not relieved a sigh of relief due to North Korea and Tariffs with exemptions - Would market still have viewed this the same way? OR - used it as another data point to say that market was over-heating and more to come with tax relief rally and inflation woes?

 

[sundaymorning]

If market had not relieved a sigh of relief due to North Korea and Tariffs with exemptions - Would market still have viewed this the same way? OR - used it as another data point to say that market was over-heating and more to come with tax relief rally and inflation woes?

Predicting what the market does on a day to day basis is not something we’re capable of. What matters for me at least is the ‘sentiment’ of how things are going and ‘where’ the macros are headed. Right now the macros are looking way too good for a recession, should a North Korean-like threat arises, the market will pullback and correct itself, once the threat passes, it’ll bounce nicely. The term ‘overheating’ is thrown out every now and then bc we’ve had such an exceptional run and that ‘somthing’ is bound to pull us back, that ‘something’ many people fear is a recession. However, a recession does not hit us unexpectedly, there will be signs such as inflation/deflation, GDP data, jobs report, etc. This is why the Feds manipulate interest rates to avoid catastrophe as they see fit. Once we are in a recession, the Feds will likely lower interest rates to stimulate spending. Currently, the catch phrase on Wall Street is ‘rising interest rates’, which to some economists is bad, while others see it as a ‘strengthening economy’ and confidence in consumer spending (we are spending so much that the Feds are worried—think about this...), which is why the Feds are raising rates... A slow raise in rates is best, and that is what we are seeing now. With the abundance of media content to listen to, investors just have to pick which side of the playing field they’re comfortable with. From my perspective, the data is looking solid, not only from the US perspective, but from Asia as well.

 

[elasalle]

Predicting what the market does on a day to day basis is not something we’re capable of. What matters for me at least is the ‘sentiment’ of how things are going and ‘where’ the macros are headed. Right now the macros are looking way too good for a recession, should a North Korean-like threat arises, the market will pullback and correct itself, once the threat passes, it’ll bounce nicely. The term ‘overheating’ is thrown out every now and then bc we’ve had such an exceptional run and that ‘somthing’ is bound to pull us back, that ‘something’ many people fear is a recession. However, a recession does not hit us unexpectedly, there will be signs such as inflation/deflation, GDP data, jobs report, etc. This is why the Feds manipulate interest rates to avoid catastrophe as they see fit. Once we are in a recession, the Feds will likely lower interest rates to stimulate spending. Currently, the catch phrase on Wall Street is ‘rising interest rates’, which to some economists is bad, while others see it as can as a ‘strengthening economy’ and confidence in consumer spending, which is why the Feds are raising rates... A slow raise in rates is best, and that is what we are seeing now. With the abundance of media content to listen to, investors just have to pick which side of the playing field they’re comfortable with. From my perspective, the data is looking solid, not only from the US perspective, but from Asia as well.

I decided to play it a bit safer and moved to 30% money market
Market has baked in 3 hikes but not the 4th

Thanks

 

[dmckinstry]

Peace can never be obtained by weapons alone unless it is Carthaginian. Good intentions have to be established first; weapons later. Moon understands this.

I'm a little shaky on my world history, so I might be incorrectly quoting.
"Carthage must be nuked out of existence."

 

[Reciprocity]

This thread is.. How to say... Entertaining. Like watching an episode of West wing while dropping LSD. @Intl Professor must know what I'm talking about. He is from the 60s.

 

[Intl Professor]

I had vast experience with only one drug, something taken in liquid form with meals, but in the late stages, without meals. I used to run three ten minute miles a few days a week. Once a colleague conned me into a "jog" of much greater length. In the "cool down," and away from his insufferable conversation, I think I experienced what was called a runner's high. The grass was greener than ever—no pun intended.

If you think our political environment is ruckus, here's one from the investment field more titillating than porn and the White House. We have a virtual bustup, er, dustup, that might be labelled Stormy McSilicon.

The incredible multi-dimensional chess of Qualcomm vs. Broadcom

Lots of political insight into what the big boys do behind the scenes.

Maybe your equanimity about trade wars and presumably what is going on with a resolution of the nuclear crisis and Korea is right. I bought some Qualcomm nearly five years ago at around $63. The first purchase was at $63.03, precisely Friday's close. The proxy war has been furious. Daily I throw away solicitations, having already voted.

 

[Intl Professor]

Einstein on Math

Einstein famously said “As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.” I read somewhere decades ago that there are no mathematical solutions to non-zero sum games. Perhaps that is because of the great one’s statement above. When we talk about reality we are always dealing with uncertainty and should take any mathematical similarity as a confidence builder about the wisdom of a course of action, or not, with a grain, even boulder, of uncertainty.

Math and Tariffs

Today Krugman has a piece in the NYTimes.

Opinion | Trump’s Negative Protection Racket (Wonkish)

I think his charts are unnecessary since Trump’s initial formulation of his tariff stand was clearly based on a narrow case by case proposal cast in generic terms. As recently modified by exemptions for Mexico and Canada, reality is creeping in reminding us of the uncertainty of outcome and its danger. As the saying goes, the devil is in the details. These are particularly hellish.

Generic Interpretation

Politics, economics, business, and investing are not zero-sum games although we can measure ex post the outcome, sometimes even in numbers. Like all decisions non-zero sum games can have at least two outcomes based on cooperation. If players contribute to each other’s negative perceptions negative outcomes are to be expected. (E.g., the 2016 election and the failure of both parties to put forward their best candidates.) If players all cooperate in positive perceptions positive outcomes are to be expected. Alternatively, if players do not cooperate the outcomes will be unexpected for good or bad. In the case of Tesla and Elon’s approach we can have some confidence of success because it is based on physics first principles as is stated here ad infinitum. These speculations are also consistent with Prigogine's interpretation of fluctuations and inputs/outputs leading to disruption at a "bifurcation point."

Consequences

The fatal mistake in Trump’s approach—or ICE manufacturers—is they are locked into past investments, intellectually or real, redolent of the status quo, against a tide in energy sourcing and information distribution. They are constantly neglecting subsequent events connected to past decisions. As Buddhists say, that is karma: good for Tesla, bad for ICE. Bad for Trump, good for Stormy, or at least the lawyers involved. (Middle men usually win, some more than others—another BFO.)

 

[DragonWatch]

Spiraling out of control is probably our one biggest fear. The spiraling in-turn causes a weightlessness feeling among almost every one of us. Or, bottom line, we are no longer in control.

Death of a career chosen or forced, the death of a deep involved relationship, the death of a child, the death of a religion, or death of a government forces us to the face our worst nightmares and eventually the emptiness, the weightlessness, and into the void of not knowing where we go from here.

This is where our economy is today, I cannot say it is in the last throws, but it does not take long for an unbalanced tire to crash a car. Okay, more than likely an ICE car

Try to put into your perspective that the "Only thing we have to fear is fear itself." No, I am not silver tongued, that was a quote from Franklin D. Roosevelt's first inaugural address.

 

[Intl Professor]

Lyndon Johnson once said of FDR, "he is the only man I have met who was not afraid." So he used that insight and for good and bad was perhaps the most effective president in using the instruments of power to accomplish his goals. Unfortunately that talent in the case of the Vietnam War got us into deeper trouble. So it may be with Pompeo at State in dealing with Iran on Trump's terms.

As FDR's address reminds us some vision is required by the office of the presidency. His full address is worth reading and thinking about in our times, as any other. It is remarkable for the use of language, as one should expect from a person who read books and enjoyed the company of intellectuals. As the mathematician Paul Erdős famously joked, "the Russians invented television in order to destroy American education." That transition from Kennedy, through Reagan, has now reached fruition in creating a presidency for the age of the reality show. If TV has not already blurred our vision too much, behold, twitter has become reality and so true vision is considered unbecoming. Nuance is gone as the graffiti said in the sixties, "nostalgia isn't what it used to be." I used to tell my students in those days, remember—"these are the good old days."

See: "Only Thing We Have to Fear Is Fear Itself": FDR's First Inaugural Address

 

[sundaymorning]

With Tillerson out I’m guessing the overall market will be down a bit tomorrow, Tesla might frack the Naz, still waiting on more positive news regarding invites and VINs, any day now..

 

[Intl Professor]

This applies to investing as well as politics. Courtesy of the New York Times summary of juicy quotes from Stephen Hawking

Stephen Hawking, in His Own Words

My favorite is his take on knowledge: “The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.” Just as Hawking married quantum mechanics and gravity he somehow corrected Buddha using his contemporary, Socrates, in one sentence. What can you imagine the two might talk about next?