Happy Tariff Tuesday!

Well I was dumb enough to jump in on Tarriff Tuesday with a SPX options play. Really was trying to avoid it. But after being correct on my trend calls earlier in the day and missing out on some quick gains. I felt this thing was going to really start heading up. So bought 5 SPX 5820 calls for $6.80 at 12:30 and 2 more at $5.00 at 12:50...at 1:13 sold 4 at $12 and 3 at $11.90.

@BLING would not approve and honestly he is probably right. But this is not retirement money. Scared money don't make money?! Do I ever hate that phrase now as I unfortunately would be heavy on the short side of Billy Napier succeeding.

Go Gators on Tarriff Tuesday!

 

Worth reading to remind everyone what we can expect coming out of the tariffs if they remain in place: Voodoo Trade Policy Comes to America

The damage done by tariffs isn’t proportional to the tariff rate; 20 percent is something like 4 times as bad as 10 percent, 25 percent something like 6 times as bad.

Why? I’ll do a longer-form explainer at some point, but maybe this will help readers’ intuition. Any tariff causes consumers to shift from imported goods to domestically produced alternatives that are more expensive, inferior in quality, or just not quite what they want. But with a low tariff domestic alternatives will be only a little bit worse than the imports they replace; with a high tariff many of the domestic goods consumers buy will be a lot worse than the imports they replace. (Some readers may know that I’m talking about Harberger triangles; never mind.)

Whew! The second point is easier. Imports of goodsare about 11 percent of GDP. While you can tell stories under which import prices wouldn’t rise by the full amount of the tariff, they’re weak and poorly supported by evidence. So a first-pass estimate would be that tariffs on the scale Trump is threatening would be a 25 percent sales tax on goods that account for 11 percent of consumer spending, raising the cost of living by almost 3 percent — well over 3 percent if, as he says he intends, he puts much higher tariffs on imports from China.

Since median household income is more than $80k, that’s around $2500 a year for the typical household. People who voted for Trump because they believed he would bring prices down are in for a rude shock.
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Oh & any jobs they may create belong in the loss column too.
but, but econ policy that creates jobs must be good, right?

He asked why there were so few machines. The government bureaucrat explained: “You don't understand. This is a jobs program.” To which Milton replied: "Oh, I thought you were trying to build a canal. If it's jobs you want, then you should give these workers spoons, not shovels.”

 

Well Tarriff Tuesday is really turning into a flop for the OP who apparently wants things to fail?!

Those call options I sold for $12 are trading for $24 right this moment. Wish I held in but have to stay disciplined to my approach.

 

I love that the best argument for supporting tariffs is that an individual won money at the casino today.

I'm convinced!

 

Dump or revise the Dodd-Frank Act... watch the U.S. economy grow. There is much that can be done to fix that messy legislation.

But the tariffs will last as long as Canada rips us off to the tune of $100+ billion per year with their onerous tariffs.

 

Trump signed the last free trade agreement with Canada and Mexico in 2018. He said whoever did that deal was an idiot, terrible deal. You can't make this stuff up.

 

Canada's tariffs are only in retaliation, it's like saying how dare you hit me back after I punched you in the face.

 

Fail in one thread. Try in another, I guess.

 

This is a REALLY SCARY THOUGHT. This is EXACTLY what Hitler did in 1933 to seize all power and suspend all civil rights , when the Reichstag (their Congress) burned. Hitler likely caused the building to burn, but blamed the communists, and then introduced the Enabling acts which seized all power due to the National exigencies.

I’M NOT STATING TRUMP IS SETTING UP THE SCENARIO TI SEIZE ALL POWER, I’m suggesting that Homer’s above comment is very scary, in context.

 

What tariffs are those, specifically?

 

You completely missed the point! The OP was the one talking about the market crashing. But carry on…

And by the way. Those options are probably selling for $50 at this moment now.

 

I'm missing the point?

Congrats on your options paying off.

 

Bearish sentiment is at the highest level since COVID and before that the financial crisis. Overdone based simply on fundamentals. Even with retaliatory tariffs it won’t impact the 15% earnings growth the market just posted. Maybe it throws it to 8-10% earnings growth; even still it’s the best market to be invested in the world.

 

Bearish or bullish?

 

Link to $100B a year?

 

Bearish. The other two time periods there were ascertainable reasons for the bearishness. We are less than 5% off all time S&P 500 highs. The fear is overblown.

 

You know you're clueless when you're whining about the "restrictive nature" of Dodd Frank, which was literally hand written by bankers for bankers. Let me guess, you believe the 2008 crisis was about "woke" people trying to let poor people buy houses? LOL!

 

WTF are you are going on about, man? The DOW is down 450 points and you are talking like it’s an up day… TDS at its finest.

Edit… make that 550 points… markets probably thought would be another one of those tariffs Donny walks back in 15 minutes, but now are selling into the close.