But shouldn’t pension funds buy more due to rebalancing?
No, a lot of pension funds have a more active stance. If they decide there’s bleeding ahead there might be a flight to safety.
I see. Let’s see what happens.
Most likely margin calls are also triggering sell off
Bitcoin is also down a lot.
Where does 45% come from?
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Retiring outside Switzerland in a specific EU country.
I updated my FIRE spreadsheet to record a -6% return for this year instead of the 6% I had pencilled in. For subsequent years, I adjusted to: -6%, -3%, 0%, 3% (and for future).
I was surprised that this small change resulted in a 20% drop in my portfolio at age 65.
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I think if market is down this year then the expected returns for future years would improve.
And if we had 81% return over the last 5 years (including this dip)?
I think long term average of 4-6% real returns should be in play for a 20 year period. However since we had two years of great returns, most wealth managers have been projecting lower returns for 2025-2034 period. Maybe next projections will improve after this 20% ++ rout
Shower thought: if a country struggles more and more to export to the US because of high tariffs, the trade deficit would be steadily be reduced until it’s gone, leading to the US tariffs being lifted, leading to increased exports, leading to a trade deficit, leading to tariffs being imposed, leading…
Oh MAGAd, it’s a vicious cycle 
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Except the last part…. No one is selling to US if the trade deficit goes to zero because this would mean reshaping of global trade in the meantime.
Howard Lutnick confirmed on Sunday that it’s not about tariffs . It’s about trade deficit.
“Vietnam sends us 120 billion and imports only 12 billion from US. We cannot have that. So zero-zero tariff is not a solution”
This means US is not trying to get countries to reduce tariffs. They want countries to stop exporting to USA. This means other countries need to shutdown factories in their local regions and open new ones in US if they want to sell in US. This also means a huge amount of capital deployment which most companies wouldn’t have if the stocks of those same companies get cut in half.
I am actually impressed with China. They have taken a tough stand and are behaving as second largest economy in right way. They are like “you want to produce all the goods we send to you yourself? Go for it and in meantime make your customers pay more for those very imports”
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I can understand what Trump wants to do (bring back manufacturing) but I don’t think he can do it because it takes a long time (this is exactly what China has done and taken decades to do it) and the US political cycle is too short to make these long term changes. And I think the US consumer is too soft to be willing to endure the pain of making this transformation.
Plus, they need to do it bit by bit. How do you expect to have local manufacturing if you tariff all the components you need so that you can’t make a profit? China had to slowly climb up the value chain and live through decades of continuing economic repression to achieve this being forced to ‘eat bitterness’ for a brighter economic future not even for themselves, but their progeny.
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Deng Xiaoping set up China’s economic miracle in the late 70s, early 80s, carefully, strategically and conservatively.
The whole story is so dumb. I mean, the Headquarter of 99% of the problem is in the US. They could just ring Nike’s CEO and tell him/her ot stop producing shoes there and start doing it in the US instead of crashing the markets. Also it won’t happen or the shoes might cost way more. Maybe with the help of Tesla’s robots they can automate it and make it cheaper. It would be easier to just put tariff on tankers..
Also I wonder how much money Vietnamese people spend on US services. Does it count watching ads on youtube?
Made in China 2025 - Wikipedia took roughly 10y to move up the value chain.
(from pure factory to leader in many areas)
Look at GDP per capita, there’s no way the trade is balanced. If the US is not happy from benefiting of cheap labor, it’s their loss?
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Whereby ‚go for it‘ may translate to paying $400 for a pair of sneakers (as some expert just said on TV), and lowering labor standards, as in:
It‘s a brave new world.
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Maybe they could send the kids to Vietnam for factory training?
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this was aired SIXTEEN YEARS AGO 
They still don’t listen.
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