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The ‘Science Fiction’ Scenario’s Upon Us
What happened to that long bond call, Mike?
I'm just kidding. But BofA's most prominent "strategist
Unpopular opinion, but my hypothesis is that the de-dollarisation narrative has always sounded appealing to a lot of people and now when there are some signs that fit with that narrative, it’s gaining further momentum in the media. While all complaints about the breakdown of decency, democracy, rule of law etc. are true, I posit investors are way more cynical and don’t believe this storyline.
I think they’re pricing in the stagflation story hard. If nothing changes, inflation goes up, recession hits, Fed can’t cut, dollar might still weaken, imported inflation goes up, lower demand for treasuries from foreign trade partners and US investors who are battling recession and thus further increase in yields, warranting a bigger recession due to subsequent budget cuts or tax increases. If that were to happen, it wouldn’t go well.
And thus I think the bond market will already push the government to come to the same conclusion by pushing yields higher in the short term, forcing Trump to fold like wet card board to the Chinese as well. And after the Chinese, the bond market will force Trump again, but then to lower the universal tariffs from 10% to 5%.
When US retreats on China and later also on the universal ones, inflation expectations come down, Fed can cut again, dollar becomes popular again due to increased trade and lower angst for recession aaaaand we’re back.
Another fold; smartphones and other consumer electronics are exempted. The folding will continue.
Does anyone have access to the nature of the deals being made? Does Trump benefit personally from every tariff he inclicts on his citizens? What did Tim Cook offer to Donald Trump in order to get this exemption?
Well, we know what Jensen Huang did.
https://www.npr.org/2025/04/09/nx-s1-5356480/nvidia-china-ai-h20-chips-trump
I have been reading “The Power Broker”. Amazing how much things do not change.
Thank god Trump appointed Amy Coney Barrett.
I am sure everyone has seen this, but this look says it all.
https://x.com/Boatstory1/status/1897136772817281094?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1897136772817281094%7Ctwgr%5Ea37489da95f6ba061a8e4312a522efe57d8ad2eb%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fabovethelaw.com%2F2025%2F03%2Fthe-amy-coney-barrett-clip-that-will-have-scotus-followers-talking%2F
I think that was Pam from The Office. (Ok, maybe side-by-side Amy the Rabbit and Jenna Fischer don’t actually look alike)
Unfortunately I one of those souls who was leveraged long TLT. I took a loss on 1/2 my position at the close today, but I’m holding the other half in hopes that it isn’t the end of the world as we know (and I don’t feel fine).
It won’t be long until higher reals dent risk assets ‘bigly’. The fomc despite protestations will be easing shortly bigtime. The longer they wait, the bigger and faster they will have to ease.
Back in the mid 1980s I’d sometimes alight at King Tut’s Wah Wah Hut on Avenue A before moving across the avenue A to the Pyramid Club.
I only mention that because I have a clinging memory of a piece of graffiti in the men’s room at the Hut:
It’s the end of the world as we know it and i feel like shit.
It must have been 1987 or later, because “Document” was released in 1987.
Amusing to see the haunts of my early adulthood mentioned in such a context.
Joey is right on the timing. It was between my two overseas postings.
Tim – my #1 favorite then and earlier was Downtown Beirut on First Avenue between 9th & 10 streets. When I returned from the offshore the second time they had been forced to move to a new location. Nice, large and clean which left it devoid of character. A sad passing.
Fed’s balance sheet is “down” to $6.7T. What is the likelihood that the Fed starts buying longer dated UST’s?
Well, that depends on how things go. My guess is they were ready to step in on April 9 had that 10-year sale gone poorly. Maybe not immediately, but I imagine they were drawing up contingency plans.
I bought a CHF index fund because watching the dollar collapse seemed more fun when I benefited from it.
Seriously, WTF, how does this not end with a global financial crisis and Americans dying in combat in service to a man who hates the military?
This is the stupidest moment in modern human existence.
Well said!
Since the first six months of his first term my brain has seen DJT as the “antichrist.” Conservative religious types seem to share a certain rigid view of the end of the world as we know it. The thing is that kind of violent end is not really likely. Instead, it turns out the AC is a oversized monster with the mind of a petulant school child who is bent on a single-minded idea. Take away everything we believe to make us great and you will rule the world. So far the Congress is effectively no longer operational, one third down. The SCOTUS has been taken over and is hanging on by a thread, two thirds down. Even the administrative branch is being dismantled and sent home. The trouble is, that single-minded idea is a flop and already exposed. I read a glimmer today that said there is evidence that at least some of the guys who are supposed to collect the new tariffs from exporters, are ignoring the rules and not collecting anything. So now we get to see, can the people (that’s us) defeat the real “Great Satan” or will he win? (I’m really not crazy, just sayin’)