Open Thread - 04-11-25 - Shorting America
Definition
Short selling is a trading strategy in which a trader aims to profit from a decline in a security's price by borrowing shares and selling them, hoping the stock price will then fall, enabling them to purchase the shares back for less money.
In the simple form shorting the stock market is tantamount to betting against it.
I'm going to try to be as unbiased as possible in this opinion piece.
Words matter when you're the president. Introduction of policy can sway the markets one way or another, up or down. Shorting the market relies on timing. Get it right and there's mucho money to be made.
I have to admit when I heard that Donald Trump was pulling back on his tariffs, except for China, the first thing I thought of was he was manipulating the market with his words and his actions. That's nothing new, I remember thinking the same thing during his first term.
And, to be fair, I remember thinking the same thing about Joe Biden.
They (politicians) all do it, mostly. How do you think elected officials exit politics so much richer than when they entered, aside from kickbacks and lobbyist's gratuities? It's easy money if one knows what is going to happen in advance.
National politics has grown so tribal and short sighted that the parties ignore the fact that they do the same thing when they are in power. So, I find it very hypocritical when one side accuses the other of insider trading. Go ahead, expose the dirty underbelly of politics, just make sure there's no mirrors around when you do it.
I can't help but feel that the tribalism blinds people from the fact that we're all in this together. Right or wrong, sincere or not, if Trump follows through on his promise of tariffs to the end, then we all better hope that it works or we're all screwed, more than we already are. We all know that eventually the economy is going down anyway, tariffs or not.
Following the status quo of decades of over spending guarantees that an economic implosion will happen, when the can runs out of road. Maybe, just maybe, the tariffs will work, putting my doubts aside. Trump's tariffs may be a hail mary, but we're down to just a few seconds left in the game and we've run out of conventional plays.
I say that not as a Republican and not as a Democrat, I consider myself a non-tribalist. I say that as an American that hopes for the best.
You all may not agree with my assessment, that's OK. But, we will all share the future, together.
Let's not short America for the sake of partisan politics.
Comments
Good morning Free Rangers...
Please don't take this piece wrong, I'm not touting Trump's tariffs, I'm full of doubt about them as well. What I'm saying is if Trump is sincerely going to follow through on this last ditch effort to turn the economy around, then we need to put politics aside and hope that it works, for our own sake. If he's going to go all the way there's not much we can do about it.
Now, if Trump pulls back on all of the tariffs then all bets are off, he will expose himself as the king of all grifters.
As I said above, let's not short America for the sake of partisan politics. For our children's children's, children.
Let me suggest an alternate strategy:
(in response to)
Go to ground.
Perhaps Trump thinks, in those few of his brain cells which have not drifted off toward his diet of junk food and golf, that if he makes out-of-country goods more expensive (which is to say if he makes their buyers pay a TAX upon them) while projecting a social-media profile of unwavering optimism, that all kinds of American businesses will magically arise from the ground.
He no doubt also believes that with the same magical thinking that cements his faith in the theories of Steve Miran, or his faith that the Federal Government is burdened with too many workers and can thus (outside of the Pentagon) be safely destroyed.
I don't always vote with gjohnsit, but here I do: this is the Golden Age of Stupid, and the solution to this Golden Age should be obvious to casual observers of recent Mexican history: the US needs a Morena, a party that will begin out of the realization that the existing parties are pointless and which will soon thereafter capitalize upon the failures of the existing parties to become the majority party.
I do realize that this vast display of adequate IQ is quite an ask for Americans. But I think there are two basic steps toward that end, plainly visible now: realizing that the Democrats gave us Trump, and that Trump is an idiot. Perhaps we are some ways away from joining Workers Strike Back or something like that. But those two basic steps are a start.
"To watch the leader of the most powerful nation on earth endorse and finance a genocide prompts not a passing kind of disgust or anger, but a severance." -- Omar el Akkad
I knew this post would be unpopular..
I don't disagree with gjohnsit's take, and again, I'm not an advocate of the tariffs.
My point is that one can bark and scream about it all as much as one wants, but we are stuck with Trump and his tariffs, for now, and let's hope that they get it right.
It is what it is.
The politics of self-congratulation
:
Alright you morons, listen up. You all need to get your heads out of your asses, and pretend you have an adequate IQ and join our political party modeled after a party in Mexico.
I suppose in action this new party will figure out a way to recruit members who aren't bright enough. All you have to do is hire Barack Obama as Party Chair.
I cried when I wrote this song. Sue me if I play too long.
The elites have nothing but condescension and contempt for us.
The masses need to be upbraided now and then for loving their so-called leaders and for having to be told such obvious truths as: they're all careerists because the system selects for careerists, to oppose Trump you actually have to oppose Trump, and so on. "Hey! You're insulting our intelligence!" needs the response of "that horse left the barn some time ago. Don't act all surprised."
The masses in the US have been stupefied by an incessant barrage of propaganda. Perhaps we will have to wait until life in the ground in the US is controlled by drug gangs -- as it is in parts of Mexico -- before anything changes. Things are changing rapidly -- the US becomes less powerful by the day.
The Morena moment is important because it shows that party systems are not eternal. The "we have to work within the Democratic Party" crowd would have you believe that such systems are eternal. But this is another obvious truth, and for me to continue along those lines would be condescending. You should, in short, know this stuff already.
"To watch the leader of the most powerful nation on earth endorse and finance a genocide prompts not a passing kind of disgust or anger, but a severance." -- Omar el Akkad
Nothing to argue about
Just like when I blew a razzberry at your brainchild of soliciting big money from disappointed Harris angels -- I am not joking when I say, "good luck with that."
I am highly skeptical of the efficacy of your propositions, but I would sincerely love to see your ideas blossom into a new government.
Nothing is lamer than message board characters citing their qualifications for their opinions, and I do not claim that my experience as a professional organizer makes me "qualified" on this subject. I mention it just to show why I hold my own opinions on this topic.
Whether persuasive or just irritating, I offer my opinion here that organizing demands that we stifle the urge to tell potential supporters that their IQs are inadequate. And if we really believe that to be the case, we need to realize that our own elitism is a handicap when it comes to challenging the Empire.
I cried when I wrote this song. Sue me if I play too long.
That’s 1 of the main reasons for the rise of the AfD in Germany
The (self-styled) non-evil, non-stupid camp has to have a better engagement line than, “Well, the reason you don’t already agree with us is because you’re all morons and Nazis, see? You over there in eastern Germany, you’re poor? You deserve it for being a moron and a Nazi.”
Well, China has
raised their tariffs on US goods to 125%, which is their way of saying "We don't need American goods at all any more". They have also stated that they don't care what Trump does, and will no longer react to further increases on the US side. As far as they are concerned, that game is now over.
So, he's certainly hurting the farming community, and that will hasten the final consolidation of agriculture under the corporate umbrella. And US companies that use Chinese-sourced components will definitely take a beating, and some will not survive this.
I suppose that when you are that stinking rich, you start to actually think like a hedge fund person. So what if that portion of your portfolio takes losses, because the other portions of your portfolio are making bank, somehow- and in this case, generally by shorting America.
The problem is that little folks like us are just not diversified enough. We only have one job, you see, instead of having paid Board of Directors gigs with 15 or 20, or a massive wad inherited from the previous generation. And it doesn't matter if the Malibu house burns down, or if that other house is in a country that is no longer inhabitable due to civil war, as long as you have 5 or 6 others to live in. Right?
Tl,dr; We little folks are not the ones who are shorting America. We might make money at it, and that sort of activity is reserved for the Owners.
But I absolutely agree- we need to put partisan politics aside. We will need all the help that we can give ourselves.
Twice bitten, permanently shy.
To be fair...
none of us really know how this will shake out until it shakes out. It's not hard to find articles that are directly oppositional to one another, depending on the author's bias. If one searches enough they will find a opinion that matches their own.
The US doesn't produce much anymore, but if there is one thing that we are, its the largest consumer population in the world. If you are a country that manufactures products and you want to sell them, then you need the US, for now anyway, and until BRICs gets its act together. So I don't think it's fair to say that China no longer needs the US. I think the US and China are playing a game of chicken to see which one blinks first. Time will tell.
Entering politics at this stage is like entering a casino where the politicians are the house, where they always win in the end. It's the rai·son d'ê·tre for entering that corrupt world. There are few exceptions in that regard.
About all we can do as citizens is sit back and watch the show and hope upon hope that they know what they're doing in their Rube Goldberg machinations.
It’s much too early to know,
how this administration’s attempt to drain-the-swamp will end. There are too many moving pieces and the process, assuming it is allowed to continue, is likely an exploratory operation to using the threat of executive actions to reveal likely responses. Eggs have been broken, but the omelet is a long way from being cooked.
Efforts to reduce waste and corruption are dramatic and substantial enough to be significant. Similarly the “liberation” of troves of formerly “secret” reports being made available to the public are transforming many “conspiracy theories” into well supported realities.
Unfortunately the carnage in Ukraine continues and the genocide in Palestine is an ongoing and unforgivable horror.
Would we have been any better off with Harris continuing the Clinton-Obama-Biden version of well greased hands government? I don’t know, and I don’t believe anyone who believes they can see our future. Lots of uncertainty brings lots of questions and fear, and very little comfort.
“The story around the world gives a silent testimony:
— The Beresovka mammoth, frozen in mud, with buttercups in his mouth…..”
The Adam and Eve Story, Chan Thomas 1963
In electrical terms
A short is also known as an early ground.
A fairly close analogy to our economic death.
For a circuit to operate, a load (like a light bulb)
needs to be in place to complete the circuit.
Therefore translating to useful 'work'. This is
perhaps too sideways to relate to your point.
The policy of shorting US capital is akin to interrupting
the circuit of money in - money out framework.
Thanks for the OT!
A mind that does not detest bad government is foolish.
That's a workable analogy...
what's needed is a circuit breaker to cut the power under an overload. In other words, a way to prevent the manipulation of markets at the highest level, or as you put it, "akin to interrupting
the circuit of money in - money out framework."
There may be a circuit breaker
Built-in to the stock market for
when thing go south too quickly,
trading is halted. It is the slow bleed
that is unregulated.
A mind that does not detest bad government is foolish.
Hard for me to say
I'm down 20% and if I had any sense I'd of bought Treasuries back in January. Obviously I'm not real good at predicting, but neither is wall street.
I have lots of very liberal and fairly well to do friends, often the beneficiaries of intergenerational wealth. Every liberal cause, they are up for it. Environment, entitlements, diversity, immigration, you name it, they support it. This week I've heard things like "f... those factory workers" etc. They are probably in much less risky investments than I am, but then they've probably lost seven or more figures to my six. The goal of returning manufacturing jobs to the USA isn't as important as losing a lot of money they didn't earn.
I kick myself in the butt...
for not buying some gold a few days ago when it was under $3,000.00. I just looked, it's $3,252.00 right now, a jump of over $250.00 in just a couple of days. But, it's not easy to judge where the bottom is, nor the top.
If there is one thing that's non-partisan, it is greed. That greed is driven by the fact that as the US no longer manufactures things, the stock market is now considered the "economy".
@JtC I've got a good friend
I've got a good friend whose family has been in the fine jewelry business for decades. She and her partner have been telling me about gold going over $3K an ounce months ago. Not good for the independent businesses, but we all know the "mighty multinational craporations" are god (snort!). Rec'd!!
Inner and Outer Space: the Final Frontiers.
Gold going up...
is an indicator that the dollar is in the crapper, along with just about everything else..
Good morning Johnny, thanks for the OT and the great metaphor.
"Oh, I say, I say," who was it that said eat my shorts? The sad truth is that one can't, not one's long's either. Gaming the securities markets simply isn't nutritious, not like, maybe soybeans. Last night, Joe linked an Ian Welsh column [ https://www.ianwelsh.net/china-cuts-the-legs-out-underneath-the-us-lng-i... ] wherein a commented noted that North Dakota doesn't produce much but soybeans, and that it normally sells 60% of them to China and it got tres seriously hurt last time Trump pulled this dumb shit and almost certainly will again. (If it is not too late, one could short soybeans on the appropriate exchange.
The Welsh article deals with China slamming the door on US LNG imports and, to make matters worse, selling LNG to Europe which needs to replace Rus LNG and hopes to replace US LNG which has been priced outrageously high since the US took Nordstream down. Big double hit to a multibillion $ annual sales industry now dead stalled. So, negligible LNG sales and all the associated revenue streams. Not good . We can all see that and more or less imagine the repercussions and ramifications. More or less ...
As of a few years back we had a serious glut of Nat. Gas. because we done fracked damn near everywhere it was conceivably feasible to do so. Funny thing about that was that it was damn near all financed. Uh huh, bazillions of dollars sunk into the ground to retrieve a decidedly non-scarce commodity, on spec. Also as of a few years back, those drillers and producers and all such were, on average, horribly in arrears wrt their borrowings. The banks, by and large secured only by the borrowers' assets didn't foreclose because such assets were pretty much worthless and hence carried all those frakistan fanatics rather than take big hits to their financials and, thereby, to their share price. I theen they're very likely still in pretty much the same boat, which is still barely afloat. Mebbe short the banks? Just sayin'. I mean, Nat Gas is notoriously dangerous stuff to fart around with -
be well and have a good one
That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --
Good morning el...
good points about LNG. That is just one factor proving the volatility of this Game of Thrones we're being subjected to as we in the cheap seats watch our future being bandied about by billionaires.
Let's hope they get it right for we non-billionare's sake.
The problem is that we are run by psychopaths and sociiopaths
who are strung out on the idea of winning, we can never work to find a reasonable way to make everybody's life as good as possible because we have to WIN, even though life isn't a game or a war. That is particularly true of the Dotard in Chaarge (pronounced DICK).
be well and have a good one
That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --
Mine too
.
I have a memory of when I was 3 and my grandpa gave us a tractor that ran on pedal power. This lucky kid is surrounded by animals and he just has to push a button to get going.
The media and Trump are once again hyping the mayhem he causes just like last time. It’s hard not to feel anxiety.
FYI: I couldn’t get the tweet to embed so I embedded just the video.
To learn who rules over you, simply find out who you are not allowed to criticize.
- Kevin Alfred Strom
That is outstanding...
but, how do they keep the bunnies and the chicken in the wagons?
That brings back the lyrics from the song Woodstock:
"And we've got to get ourselves
Back to the garden"
Dunno
The chicken could have easily jumped out or the geese could have jumped in. But the little kid had to be strapped in so he’d stay put.
Maybe the animals are just lazy. It looks like a big farm after all. Why walk when you can ride?
To learn who rules over you, simply find out who you are not allowed to criticize.
- Kevin Alfred Strom
Bissent and Lutnick are options traders
That is far more profitable than straight up shorting the market. With the inside information they have access to, they are ahead of even the program traders. So the insiders, if they are taking advantage of their inside knowledge, and their wall street connections, they can become fantastically wealthy. The program traders will just follow what they do. The average citizen will take all the losses as they are distributed around.
One of the ironic aspects of this, is that without tax increases on corporations and the uber wealthy, there won't be much capital investment in new industrial infrastructure, supply chains, and so on. You can use tariffs to browbeat allies into investing substantial sums inside the US, but the domestic billionaire class probably won't do so. Why? Because the financial incentive isn't there. They are going to get tax cuts whether they invest in the US or not. If you are not paying taxes in the first place, how are tariffs going to change that? In fact tariffs encourage the wealthiest to do less, by replacing the revenues lost by gutting the tax tables. Tariffs are meant to substitute for further decreases in taxes on those holding all the financial cards here domestically. They literally made trillions off of outsourcing and financialization wile otherwise simply ignoring the more tangible aspects of the hollowed out economy. Historically, high marginal rates of taxation, and corporate taxes were associated with growth, because before the outsourcing craze, high taxation encouraged capital investment to. avoid taxes. Financial firms, and services firms don't need much capital investment to do what they do, they pretty much get a free ride from the fed or government legislation and subsidies. Industrial investment and infrastructure is a different story. Without tax holidays, and monopolies bestowed by government they won't invest anything.
You have to tax wealth to force people to invest domestically to get the write offs. If the billionaire class isn't taxed, they won't invest here to avoid taxation, tariffs or no tariffs. They only care about their own bottom lines. I know Hartmann says this is bs, "I invest to make a profit, I don't even look at the tax code when making a business decision." This is nonsense. He said this while the US industrial structure disappeared and hundreds of billions of US capital was invested overseas. This long term trend was associated with the evisceration of the US tax structure. People just don't understand how it works.
語必忠信 行必正直
Great insight, soryang...
yeah, that is the big question, how to bring manufacturing back to the US.
Trump is done in less than four years, a new president may reverse the tariffs. I've seen it said that it would take 5 years to build a new factory and then there's the problem of finding labor cheap to make it profitable enough to bring the factories back.
Your proposition about taxing the billionaire class makes sense, if that is even doable with an administration lead by billionaires.
Thanks, my friend.
Manufacturing is not coming back
It would take decades to build factories and our education system has been gutted so much we’d have to hire people from other countries to work in them. Taiwan tried to build a chip factory in Arizona and it failed miserably because no one knew how to build it.
Plus in order to make it work well for the workers the companies would either have to pay high wages or to get the government to offer free healthcare and such. I posted a video yesterday that explains it better. Michael discussed this at the 30 minute mark.
I just watched this and it’s along the same lines. As Richard stated, no one held a gun to the capitalist’s heads to make them offshore the jobs. Greed did.
Oh yeah. He said that Trump put 27% tariffs on Chinese EVs and then Biden upped them to 100%.
To learn who rules over you, simply find out who you are not allowed to criticize.
- Kevin Alfred Strom
That part does seem...
to be pie in the sky.
Thanks for the video, snoops.
Brutal Truth of our Time
As a union contract negotiator in the 1980s, I saw our current impossible economic situation coming when I saw the idea of a pension get mulched by Neo-Liberal ideology. The unknown length of time between retirement and death shows the virtue of a pension as opposed to lump sum. If you are lucky enough to die within 24 months of cashing in your 401(K), you can live like a plutocrat for two years. But if you hang around into or beyond your 80s, it will run out and leave you in need of charity.
This is perfectly rational if you own a bank and don't want to get stuck paying some schmuck like me thousands of dollars a month until 2050. But it has always meant that us Baby Boomers would come to a very ugly end. You can't have an economy with more than a third of the population consuming without producing. Chez moi, I finished my earning years in The Entertainment Industry and I got a hybrid retirement with a small supplemental pension and my wife and I are relatively secure until the whole world blows itself up.
Maybe this month or maybe a decade from now.
As always, hope for the best and be ready for whatever.
I cried when I wrote this song. Sue me if I play too long.
There are a lot of people...
in that boat, wondering if they have enough as inflation steals it away.
We all know the implosion is coming, what is unknown is what comes after. Larry Ellison and the Tech Bros have their version of the future all worked out for us.
How do they think they'll be able to implement their plans? Economic collapse is on the table.
Not that it matters, but
the economic catastrophe is already less bad than I thought it would be as of 2021. My paranoia was based on the absurdity of the Covid Campaign featuring mass unemployment coupled with "stimulus" fiat money pumped into the markets, driving the Dow from around 20,000 in March of 2020 to 35,000 in August of 2021. That bubble of funny money is never mentioned in the news or by Trump haters who now fret about the markets zigging and zagging this spring around 40,000.
Somehow, the system has kept the inflation within tolerable limits so far, uncomfortable and ominous, to be sure -- but tolerable.
But robbing Peter to pay Paul has to end at some point.
We'll see, won't we?
I cried when I wrote this song. Sue me if I play too long.
$$ Detumescence $$ — what goes up must come down
All the TARP stuff and bank bailouts, the “quantitative easing” (money printing by the Fed), and the quadrillion-dollar morass of unregulated derivatives that Clinton facilitated via the CFMA pumped up the 0.01%’s fortunes without any real increase in the productive basis — is anyone surprised that all the air-filled bouncy financial castles can deflate, and numbers and trends can go down, as fast as they grew?
Round and round it goes how it ends nobody knows?
Some people on the internet and cartoonists are having a field day.
A little perspective.
Good ones humphrey...
the internet is buzzing with opinions about the tariffs pro and con, while it matters not to the Trump administration.
I just can't get worked up
I just can't get worked up over out-of-control human greed and stupidity anymore. Pollution caused climate change gets my attention. Nature could give a rat's azz about some homo sapien's (inflated) bank account.
Inner and Outer Space: the Final Frontiers.
Heh...