This is research from the Federal Reserve Bank of New York. My apologies to those who only trust Brietbart.We directly link these effects to a firm’s market-to-book value, which in turn affects that firm’s investment outlays. The positive relationship between market-to-book values and investment is well established in the literature. What is novel in our study is that we link our estimated effects of the trade war on abnormal returns to firm-level market-to-book value, so that we can calculate the aggregate investment effects of the trade war.
In sum, we find that the U.S.-China trade war lowered the market capitalization of U.S. listed firms by $1.7 trillion and will lower their investment growth rate by 1.9 percentage points by the end of 2020.
The industries first bulldozed by Trump then got crushed by the pandemic.
So here's the list:
- Trump's ill-advised trade war that cost us 1.7 Trillion. Making America great.
- The federal reserve fending off Trump's trade damage by lowering interest rates, while he blasted them for not going even lower -- with what they did, they fueled an asset bubble (Trump wanted to be king of the bubble) in stocks and housing. Higher rent for the average American, but making America great for investors.
- Trillions was created by the Government issuing bonds and the Federal Reserve buying them outright. In Ajax logic, since Trump was president at the time it's all his fault. In reality, it's a shared decision but Trump never complained for a second about spending money on a vote for him.
A big part of the story that is apolitical is the supply chain disruptions. In SSP, it looks like Markk has discovered prices are going up universally, and possibly has figured out that gas isn't an anomaly.
A quick note about perfect economies. In hotly competitive markets, profit margins are razor thin, which makes them vulnerable to disruptions. Shipping is the poster child. Moving boats around isn't that hard to do, and profits are increased only by scale -- building city-size container boats and optimizing cruising speed. So what happens when a boat carrying thousands of containers gets stuck? What happens when ports that could only make a dime when operating at unprecedented efficiency emptying containers get backed up? And so for all these aspects of our economy that have been super efficient and driving profits only happens with even greater efficiency (you can only get so much juice out of an orange), major disruptions won't be solved in a day, and won't be solved by politicians rearranging furniture.