Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today
Already have an account? log in
Tell That To Rain Man
Late last week, I wondered if maybe -- just maybe -- the trade charade was drama for the sake of it.
If I headed a compliance department, I would string up any analyst who even suggested that Trump has improved or strengthened anything. He’s a tee-totaling drunk uncle. The whole thing was ass-backwards from the jump. You want to encourage re-industrialization or at least some re-shoring of critical industries? How about we dismantle and suspend the IRA, and instead impose draconian tariffs that could have been lifted from a Cheesecake Factory menu for all we know. (Actually we know, and it’s sadder than that – all you need to know is 1/4 * 4 = 1).
So what do we REALLY have as it stands on this day? We have one pre-liberation import surge, followed by a slashing of US exports to anyone that mattered (including foreign visitors) and now a second front-running import surge to come now that the diaper-sourced tariffs have been modified, all to detriment of the trade deficit.
And are the factories being built yet, or are we still wasting literally millions of man-hours across the country just trying to understand and stay apprised? If he wanted to encourage re-shoring, he would have started low and slowly ramped up the tariffs over time. But of course, he does the complete opposite, dramatically increasing frictions and costs to the entire economy, to no apparent benefit other than fleeting relief that the worst may be over. And now that we have sub-embargo tariffs, I am fairly confident that we’ll end up pretty much where we started except with more price inflation led by imports. I mean just look at all the calories burned in the stock market. Trillions of dollars of equities sold off then repurchased until we’re right back at pre-Liberation Day levels with nothing else to show for it except a lot of wasted time and energy.
“Again, you won’t get anywhere near that kind of acerbic truth-telling from Wall Street. About the closest they’ll come is expressions of incredulity at the head-spinning nature of Trump’s various and sundry about-faces.”
Yeah, and it’s maddening for a non-pro like myself, as my last decade plus of educating myself (thanks, H!) seems wasted. Case in point, I had to stop listening to a fave podcast, really my only other source of learning after this site for years now, as the guests have ALL been making up backwards looking excuses, reformulations and re-tellings of what was the ‘plan’ since the election. I dipped a toe back in when I saw a trusted name finally back on, and I expected good stuff. (Can I name names, H? Or would you rather we didn’t flame others in your comment section?)
It took me 2 days of mulling over a couple of points that I thought made some sense, but even I was able to poke holes in much of his theories. I really wanted to just email the transcript to H and ask him to shred it faster and better than I could. Suffice it to say, the full on retreat that all readers here knew was coming pretty much wiped out most of that argument, anyway. It’s just so frustrating! And now to hear Trumpcult members swoon in the coming days….. ugh.
That was a waste of time on the China front, now some prices will go from 40% cheaper to consume and more profitable for Walmart to sell to only 25% cheaper but “so what?”. It is Canada, Mexico, and our allies that are the losers – the road-kill in Trump’s idiocy with tariffs. Tariffs have always been a paperwork disaster. The US is not a loser in trade. PERIOD. What we have is a US citizenry that is entering a severe recession thanks to the destructuin of the American system – whatever that was.
Yes exactly. This is all just a load of sh*t ’cause he has no actual governing capacity. He is a human episode of contrived, boring, godless drama. Look at the top line on all of the major news sites right now. It’s either first word “Trump,” about him doing something – action man! – or about stocks ripping.
Calling trump a bull in a china shop, would be insulting bulls. This is a child needing a nap, throwing a tantrum, and nobody wants to ever play with him.
I’m calling (it) bull$hi$ in China—full Stop (er…slop).
Tariffs going cold, budget fight getting hot – on to the next media hyped red herring debacle. There will be lots of stupid stuff said about rich, poor, medicaid and etc., lots of media attention. The Senate fights and it passes, then tRump will step in via X or wait and veto it to save the poor on medicaid, of course keeping the tax reduction for the rich. He is now a hero to all. And the Dems will fight the red herring all along, making the big media save of medicaid more impactful. Then on to the next media managed red herring BS. Ukraine? Next tariff problem, I mean heck, why not be the tariff hero time and time again, say every 90 days? Tariffs could be the gift that keeps giving – China would love it!
According to Jason Miller on The War Room podcast (https://x.com/i/broadcasts/1lDxLlrOkNaxm), the total U.S. tariff rate on Chinese goods now stands at 50%: 10 percent baseline tariff rate plus the 20 percent fentanyl tariff rate plus the 20 percent tariff rate from Trump’s first term. (I have not listened to that broadcast, but it was mentioned by another commentator.)
Not sure the “just in time” inventory restocking, for “just in time” buying before the 90 day pause period assures no recession. Granted, the new deal decreases the probability of a deeper recession, but I’m not sure the behavioral impact is much different. At some point, trump’s unpredictability and “incompetence” (see H’s May 12 article) approaches its devastating limit on consumers’ psyche and willingness to keep preparing for the worst. Inventory build, then buying, followed by inventory restocking, then buying, followed by a sharp decrease in spending (leading to a recession). Unlike post-covid, there is no fiscal stimulus repeatedly appearing in consumers’ mailboxes or Federal reserve willing to maintain ZIRP.
One of the ongoing risks caused by Trump is a gradual diminution of ‘appreciation’ let alone understanding of the risks he poses to the rule of law, economic conditions, markets, etc., b/c taking away the worst case causes many people to mistakenly conclude everything is ok or at least not that bad. Arguably, pre(total)power totalitarianism strategy 101.