China Tariffs Up to 100%? Pillsbury Says Maybe Yes
Is President Donald Trump just playing bad cop, or is he really going to raise tariffs again on China? Nobody knows, probably not even Trump himself. However, according to a report from some guy named Michael Pillsbury, not to be confused with the glutinous consumer-oriented baking supplies company owned by General Mills (NYSE:GIS), Trump has so far gone easy on China. It isn’t clear if Trump sent him out as a trial balloon, but Pillsbury went on to make the ominous claim that Trump was considering raising tariffs as high as 100%. “Does the president have options to escalate the trade war? Yes, the tariffs can be raised higher. These are low-level tariffs that could go to 50 percent or 100 percent,” he said, as reported by the South China Morning Post, in an article written by a non-Chinese person named Birmingham. Negotiations resume today.
Despite the tough talk, it is probably unlikely that Trump would raise tariffs significantly any further, given that he is down in the polls already and his base is starting to complain about hardships from the trade war. Unless Trump wants to go out with a bang and really bring down the Chinese stock market (NYSEARCA:FXI) before he is voted out.
Oracle Founder Says Uber, WeWork, Worthless
Oracle founder Larry Ellison doesn’t have a very good opinion of Uber Technologies (NYSE:UBER), Lyft (NASDAQ:LYFT), or WeWork. The basic problem is that these companies are operating at major losses trying to capture market share while bleeding capital. Even if one of them achieves 100% market share, it will still operate at a loss so it doesn’t really make a difference. The only reason these companies can absorb such consistent losses is that interest rates are so low, and even negative in some cases, that it is very easy to raise more capital to bleed it into nothing. None of this would be possible if interest rates were in any way close to normal. Conclusion being, when interest rates are normalized, these companies will most likely disappear, or at least shrink dramatically and offer services at much higher prices in niche markets, if that much.
Panetta Warns of War Over Saudi Oil Bombing
It’s been a week since Saudi Arabia’s Abqaiq oil processing facility was bombed by somebody or something. The Saudis are pointing their finger at Iran, asking America to pretty much intervene and attack, which would definitely serve the purpose of pushing up oil prices significantly, which is exactly what the Saudis want in advance of the Aramco IPO. It is unclear if Trump cares about doing the Saudis’ bidding for the purpose of pushing up the valuation of their state-owned firm that is already the world’s most profitable by far. Iran denies involvement, but since the country is very bitter, understandably, about US sanctions against their oil exports, it would make sense if Iran were responsible for this. Tehran’s Foreign Minister Mohammad Javad Zarif said any attack targeting Iran would be considered an “all-out war.”
Secretary of State Mike Pompeo, agrees, saying that he already considers the oil attack on Saudi Arabia to be an act of war. He then continued his interview with Fox Business with these wise, analytical words, “With regards to the military option, the problem — as we all know — is that anytime there is a military strike against Iran, just based on my own experience as Secretary of Defense, it was pretty clear that the Iranians would respond to that kind of strike by attacking our forces in the region.” So, basically, he’s saying that from his perch as Secretary of Defense, he now understands that when you attack a country, they tend to – you know – fight back. Someone with a head on his shoulders, that guy.
Amazon Inundated With Job Applications
Amazon (NASDAQ:AMZN) reached out to the labor market looking to hire 30,000 people for expansion. It got 208,000 online applications and counting. “People across the country understand the value of Amazon jobs with a $15 minimum wage, full benefits from day one, and upskilling opportunities,” said Beth Galetti, senior vice president of HR at Amazon. Job fairs were inundated in Boston, Chicago, Dallas, Nashville, and Seattle. New position range from entry level fulfillment to software engineers. They all have 20 weeks of paid parental leave. There are 7.2 million job openings for 6 million unemployed Americans. 3.33% of them just applied to work at Amazon.
US Steel Whacked By Prices, Tariffs
US Steel (NYSE:X) collapsed by 11% yesterday on a profit warning for the second half of the year due to falling steel prices and weak demand. The stock is down more than 60% since last year when President Trump first moved to “protect” the company with steel tariffs. Didn’t work so well. US Steel expects to lose money for the quarter, partially due to a fire that caused $53M in damages. The company plans to downsize by 2,500 in Europe by the end of 2021. Because those operations are in Europe, domestic tariffs have actually hurt the company’s European operations. Trump can take a mulligan on that one.