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Ron Vara’s War And Trump’s Banana Republic
I was pleasantly surprised on Monday: Virtually no one whose job it is to weigh in on matters macro-
If somehow they try to put lipstick on this pig and change the direction of this trainwreck, no one will ever believe anything these trumptards ever say again. About anything. The sun is out. What ? Go check.
The news updates are hilarious. Bessent is on CNBC saying he was surprised stock markets are so “impatient”. Supposedly impatient about tariff negotiations which will last into the summer. 70 countries have supposedly already called.
It’s like they are doing their best to make this more farcical by the hour.
As uninspiring as Navarro is, one could argue that Lutnick is even worse. I’m hopeful that Bessent can get to a resolution of trade issues with Japan ASAP, and even some perhaps partial resolution with EU to build some momentum towards getting beyond all this insanity. Navarro should be limited to only dealing with China, so he doesn’t obstruct resolution with all our other trading partners.
It reminds me of Nixon’s efforts “win the peace,” by expanding the Vietnam War into Cambodia and Laos in the early 1970’s. It was illogical, insincere, and also ended poorly for the US.
“US 10-year yields rose nearly 20bps on Monday,”
Can’t help wondering if our old allies (or new enemies) are dumping treasuries!
https://heisenbergreport.com/2025/04/07/what-just-happened-to-us-treasurys/
Even Kudlow tried to get Bessent to admit the math was beyond fuzzy, and Scott worked around it and made sure not to take credit.
It’s interesting that Bessent is so focused on making a deal with Japan. Makes me wonder if his hedge fund is wrapped up in the yen carry trade?
Hopefully, the US can secure an agreement with Japan ahead of any alliance that China wants to form with Japan.
I think he’s grasping at straws. Trump doesn’t care to negotiate, really. But Bessent is hoping he can get some deal done, so that the market recovers and so that he doesn’t look responsible for one of the biggest policy errors in recent history, nor the annihilation of millions of peoples pensions.
He’s getting desperate and will break soon, once he realizes there is no deal getting done.
H, what do you think about what Ray Dalio has posted about tariffs and the world order?
https://x.com/raydalio/status/1909296189473693729?s=46
I know you didn’t ask me, but I think Dalio’s opinion is hogwash and H’s latest article about Trump potentially repudiating US debt explains why. There was no forcing function that required the US to go down this path and we are in the midst of the stupidest own-goal in history. Meanwhile, Dalio is cherry-picking facts and takes as an assumption that our “debt” is unsustainable while ignoring that his historical analogues were never in charge of the world’s reserve currency and couldn’t dictate their own interest rates.
Maybe we were due for a populist president at some point, but as much as Trump tries to claim a mandate for his trade war, it’s BS. He was (barely) elected due to a damn near perfect storm of events (pandemic-driven inflation, democrat incompetency, massive inequality driven by the very party that got elected by the same people who are getting screwed by those policies). The international political order is only breaking down because we elected a clown (which does lend credence to his claim about domestic political order breaking down).
It is not obvious though that our “debt” levels are unsustainable and any pretense about manufacturing and middle class jobs coming back to the US unless it’s automated or a critical industry is just as silly as saying we should go back to a time when 80% of people worked in agriculture.
My opinion is that Dalio is a poor historian and should stick to his day job (whatever that is).