Trump Knows How to Win China Trade War: CUT INTEREST RATES NOW FED!

This is bordering on inane, already.

Trump just tweeted this.

China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing. If the Federal Reserve ever did a “match,” it would be game over, we win! In any event, China wants a deal!

— Donald J. Trump (@realDonaldTrump) May 14, 2019

You know, I put up with a lot of nonsense from POTUS and he makes me laugh a great deal — but enough it enough with asking the Fed to cut rates while markets are at record highs. Do I think the Fed should’ve hiked rates? No. But they’re already there now and you can’t just cut them for the sake of winning trade wars or to get stock prices to go even higher.

I suppose I hate the Fed anyway, so maybe all of this Fed trolling is a good thing to undermine them and cause the public to lose faith in them. Nevertheless, it seems like a great big waste of fucking time and makes us look like jackasses on a grande giant stage — sucking Fed dick for a few points in the Spoos.

Remember when Morgan Stanley said Uber was worth $120 billion last year? Two days trading on the public markets and Uber is now worth just $61 billion, which is down $15 billion from the IPO valuation that Morgan Stanley thrusted upon the market.

Lucky for the Martha Vineyard faggots at MS — the market had been crashing the past few days and the UBER IPO debacle was back burner news. Now with markets set to bounce, I’m hoping we can properly execute them.

Where was the stabilization for the UBER IPO? What the fuck was Morgan Stanley doing — those greenshoe motherfuckers? They said the order book was 3x oversubscribed and yet here we are -18% from the IPO price.

Morons

It’s worth noting, Morgan Stanley was also lead underwriter for Facebook, which previous to this shit was the single worst IPO I could remember in modern times. The share price has since recovered nicely and time has allowed all previous transgressions go forgiven. But let’s never forget this one and make sure the cuckholds at Morgan Stanley never get to lead an important IPO ever again. Let’s all pray for the immediate demise of Morgan Stanley and hope good minded executives choose Goldman Sachs for all of their banking needs going forward.

This post was paid for by the wonderful gents at Goldman Sachs (kidding, don’t sue me bro).

I have a Capstone session after the bell — so I’ll make this brief.

I bought RIOT and more NUGT into the bell. And I held onto DRIP, SOXS, LABD, and GROW — like a fucking man today. My NUGT position is now a 10% holding. My sense, panic is just around the bend. I can smell it.

The TIPs have been heading higher all year, in spite of tepid CPI data.

President Donald Trump’s latest tariff increase on Chinese goods will drive up the Federal Reserve’s preferred measure of underlying inflation, and a further escalation of the trade war will have an even greater impact on prices as well as economic growth, according to Goldman Sachs Group Inc.

Goldman revised up its estimate of the tariff impact on core personal consumption expenditures inflation to 0.2 percentage point, according to a note Saturday. The firm estimates if the U.S. imposes tariffs on the roughly $300 billion remaining in Chinese goods, the effect would increase to 0.5 point. Should core inflation rise “noticeably” above 2% next year, that would “slightly increase the likelihood” of an interest-rate increase by the central bank.

The investment bank cited new evidence of the effects of the 2018 tariffs from two studies published in March by the National Bureau of Economic Research. It also broke out consumer prices on categories affected by tariffs, showing costs had increased sharply in the last year for such sectors while declining in non-tariff categories of items.

“The costs of the tariffs have fallen entirely on U.S. businesses and households,” the Goldman economists said, contrasting with Trump’s contention that China pays the levies. “Further escalation of the trade war could result in a hit to GDP as large as 0.4%, and if trade tensions sparked a major sell-off in the equity market the growth impact could worsen considerably.”

China’s Ministry of Finance said Monday the country will raise tariffs on American goods starting June 1 after the U.S. increased tariffs on 5,700 different product categories from China to 25 percent from 10 percent.

While consumer goods account for about 25% of the items targeted in Friday’s escalation of U.S. tariffs, consumer products make up about 60% of the remaining tranche of about $300 billion in Chinese goods, according to the note by analysts David Choi, David Mericle, Blake Taylor and Ronnie Walker.

There’s about a 30% chance that Trump slaps tariffs on the remaining $300 billion of imports that aren’t yet targeted, Goldman said.

On the China trade war news, gold caught a bid too. Does it mean inflation will finally rear its ugly head? No fucking idea. However, what I do know is the perception is there now and the trade is long NUGT — taking advantage of the fear and the greed.

Economic cycles aren’t permitted to exist in this dojo. The market is now pricing in a sharp December rate cut — because that’s what the Fed does — bail out those in need of bailing out.

72% chance of it happening now. And the odds of a rate cut earlier than December are rising sharply today — thanks to traders sperging out.

This is not a new paradigm. The entire run up in BTC during the 2016 melt up started when there was significant capital flight out of China. Do you remember that?

CASHIN: "There's even speculation that Bitcoin's big weekend rally might be Chinese citizens trying to get money out of the country."@CNBC

— Carl Quintanilla (@carlquintanilla) May 13, 2019

It should come as no surprise to see the Yuan weaken against the dollar.

Bear in mind, during market pullbacks, all of the worst news and rumors come to surface. Most of it is bullshit and the chances of Bitcoin supplanting the dollar are exactly zero. But even during the Oct-Jan 2018 market rout that so many of you were mocking last week and the week prior — that shit lasted 3 months. Are you prepared for an extended move lower and possible retest of those lows?

Can’t happen?

Why not?

The Dow is -600.

Markets are down more than 500 and my initial sense was to sell and book gains in my inverse ETFs; but then I realized if I did that I’d be left without hedges and the market doesn’t look all that fucking great now.

We have a classic risk off environ, with Utes, Treasuries and Gold strong — everything else down.

My two major tells in this tape are NVDA and AAPL. Keep it simple. I am not, however, looking at crude today, due to mid-east tensions.

If you’re buying dips, you’re assuming today is a one off event and somehow Trump will get the art of the deal mojo going again. My sense is this cannot be resolved right away and might elongate itself for quite some time. Then again, Trump is an Apex Narcissist and might pull a rabbit out of his asshole in order to buoy stocks.

One thing I know for sure, betting against stocks for a long period of time is a fool’s errand. I just think, or hope, for more pain and rough shaking of the tree before we bounce. Bear in mind, a lot of fucking retards are long stocks now. They deserve to lose.

China is renowned for talking shit via certain media puppets. Here’s one of them on Twitter and this is what he’s saying today.

China hasn’t released countermeasures immediately. I believe the reason is that China is drafting a plan that will have precise effects, making sure it hits the US while minimizing damage to itself.

— Hu Xijin ??? (@HuXijin_GT) May 13, 2019

China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China. Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.

— Hu Xijin ??? (@HuXijin_GT) May 13, 2019

So much winning.

Here’s why crude is higher — two Saudi tankers attacked.

Saudi energy minister Khalid Al-Falih revealed the tankers suffered “significant damage” – although it was unclear what the attack involved.

He said: “Fortunately, the attack didn’t lead to any casualties or oil spill; however, it caused significant damage to the structures of the two vessels.”

Trading and shipping sources identified the Saudi ships as Bahri-owned very large crude carrier (VLCC) tanker Amjad and crude tanker Al Marzoqah.

Dow futs -444.

UPDATE: Fed cut being priced in now as a foregone conclusion.

Traders are pricing in a 73.6% chance the Fed will cut rates by January. pic.twitter.com/KTxiTP6MoE

— Lisa Abramowicz (@lisaabramowicz1) May 13, 2019

UPDATE:

CHINA SAYS TO RAISE TARIFFS ON 2493 U.S. GOODS TO 25%

— zerohedge (@zerohedge) May 13, 2019

According to Trump, tariffs boosted economic growth. BOOSTED!

The unexpectedly good first quarter 3.2% GDP was greatly helped by Tariffs from China. Some people just don’t get it!

— Donald J. Trump (@realDonaldTrump) May 13, 2019

He calls out President Xi by name.

….completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!…

— Donald J. Trump (@realDonaldTrump) May 13, 2019

What the fuck is going on here. Oh, by the way, good morning. My coffee is hot as shit and futures are now -320. But, WTI is +1%, which is odd. Bond yields are sinking again too. I don’t think anyone should panic while WTI is higher. Nevertheless, this calling out of Xi can’t bode well for a deal any time soon. Will this pass and people just carry on like it never happened — or will it wreck markets?

STAY TUNED!!!

Goldman is out with a pleasant note this evening, laying waste to Trump’s claims that the trade war is advantageous to America — because it’s brining in BILLIONS in new tax dollars. According to Goldman, the entirely of the brunt is falling onto the backs of Americans.

Goldman Sachs said the cost of tariffs imposed by President Donald Trump last year against Chinese goods has fallen “entirely” on American businesses and households, with a greater impact on consumer prices than previously expected.

The bank said in a note that the trade war’s impact on U.S. consumer prices is now higher than previously expected, partly because Chinese exporters have not lowered their prices to better compete in the US market

“One might have expected that Chinese exporters of tariff-affected goods would have to lower their prices somewhat to compete in the US market, sharing in the cost of the tariffs,” Goldman said.

Futures are off by 200.

I’m mature enough to know -215 on the Dow futures on a Sunday night means nothing. By the time markets open tomorrow, they could be +200. However, in the off-chance these losses hold and heighten, Le Fly stands to make a large dicked gain in the morning — presently long SOXS, LABD, DRIP, and NUGT. My cash, which is currently at 50%, will be put to good use.

Truth is, you should’ve went away in May. I did warn you and if you’re getting BTFO in this market — you have no one to blame but yourself. Just know and understand, “The Fly” is mastering this market and will making live calls inside of Exodus tomorrow morning. I’d be interested to see if we edge towards oversold tomorrow and might even flip to extreme long if that should happen.

Although it looks ominous now, with Trump’s trade war boring horrible fruits — it’s literally a self-inflicted wound that could be resolved with one press conference and one deal with the Chinese. Be careful about overstaying your welcome on the short side — for when this squall is over — we’re going to springboard higher with an extreme vengeance.