Who Knows What Tomorrow Brings?

The stock market is more fragile than a newborn baby or a piece of fine china.  A word, a look can cause market fluctuations, sending analysts to their desks to … well, analyze.  The most recent example is the roller coaster ride the market took this week (and it’s only Wednesday, folks).  Volatility is the buzz word of the week on Wall Street.

Last weekend, during his trip to participate in the G20 in Buenos Aires, Argentina, Trump announced that he and China’s President Xi Jinping had reached an agreement of sorts.  My own thoughts were that it wasn’t anything more than smoke and mirrors, Trump’s attempt to make it appear as if he had at least done something to justify the cost of himself, his wife, daughter, and son-in-law travelling all that distance on our dime.  The agreement seemed to be a non-agreement, for the only thing they actually agreed to was to try to come to some agreement on trade and tariffs within the following 90-day period.  Big deal.  Whoopee.  They could have done that without announcing that they agreed to do it.  Oh yeah, and Trump also said he told Xi that he wouldn’t add any new or additional tariffs on China during the 90 days.  No doubt that had Xi wiping the sweat off his brow.

Some people are apparently not as cynical about these things as I am, for they took great joy in calling their brokers and saying, “BUY, BUY, BUY!!!”  And thus, the stock market climbed on Monday, enough to wipe out the losses of the previous few weeks … losses that had wiped out the gains from the entire year.

But then, Trump appeared to waffle about the “agreement” with a Tuesday morning tweet …Trump tariff manAnd those same people who called their brokers on Monday, placed yet another call saying, “SELL, SELL, SELL!!!”  And thus was born an all new level of volatility in the S&P, the Dow Jones, and Nasdaq, with two-day losses thus far, more than wiping out Monday’s gains and then some.  You know those playground things, basically a board on a fulcrum that are called teeter-totters, or see-saws?  They go up-down-up-down …teeter-totterThat is what the U.S. economy is on.  Market fluctuations based on anticipation of economic or political events are not unusual.  However, rarely are they as significant and immediate based on naught more than a word or a tweet from a madman!  If … IF Donald Trump were a mentally and emotionally stable leader, one might understand why such a remark would set the wheels in motion for a market tumble.  But, given his rarely-coherent state of mind, his lies and reversals, I cannot imagine why anybody would base financial decisions on one of his multitude of daily tweets.

The internet is having great fun with Trump’s new nickname, Tariff Man …Tariff Mantweet-1

tweet-2tweet-3Once again, Trump has made himself, and by extension all of us, a laughingstock.  But it goes deeper than that.  He is playing a game, the rules of which he is ignorant.  And the stakes, for the average person like you and I, are our 401(k)s, our pensions and retirement plans.  On an even larger scale, he is playing with the economic well-being of not only the U.S., but global economies as well.

Our nation is going through enough turbulence at the moment without the person who should be reliable and steadfast creating so much chaos that the major indicator of our economy is swinging on a pendulum.  I am reminded of a line from a song, Up Where We Belong by Joe Cocker and Jennifer Warnes:  Who knows what tomorrow brings?

Why Stocks Are Falling

Curious as to why the stock market is plunging? I am not an economist, and while I have some understanding of the way the market works, I know just enough to be dangerous. So, I turn the explanations over to friend Erik Hare, who IS an economist and understands far better than I. Thank you, Erik, for well-written, understandable post!

Barataria - The work of Erik Hare

As the eight year old bull on Wall Street is slaughtered for its meat, several questions come to mind. Is the fall likely to continue? Where will it stop? And, for those on the sidelines looking to score political points, who is to blame?

The answers to these questions are easy and a little terrifying. Yes, this is going to go on for a while. It may not stop until a lot of money is lost. And while you can’t blame anyone for actions which are cyclical, you can blame those who make things worse. The US economy is a large engine, and any good mechanic knows that while you can do a few small, smart things to make it run better it is much easier to really screw it up.

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