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23 thoughts on “TACO Stall”

  1. As you pointed out, he overplayed his hand. The big beautiful bill is going to be much different when it comes out of the Senate. We will be lucky to get a budget by labor day, let alone by July 4th. How do you think the house is going to react when the bill comes back with a much lower salt cap and fewer cuts to domestic spending?

  2. Trump will never admit a mistake, so tariffs are going to be in the headlines for the rest of 2025 and into 2026. That is not going to help growth or inflation. Especially bad for growth. Fomc is going to wait as long as they can and then cut rates quickly….

  3. Trump probably can’t take China tariffs back to 125% or where-ever they were (lost track), or rather he can’t take the resulting consumer and market punishment.

    China’s exporters can survive at 30%, and if Trump slaps other Asian countries with 10-20% then they can thrive (a mere 10-20% tariff differential is easily manageable, especially when China provides the capital, robots, raw materials and intermediate goods for much of the manufacturing in Vietnam, Indonesia, etc, and Chinese companies get much of the profit).

    Trump can target specific Chinese industries, like pharma and semi and electronics, but there will be punishment for that too, and China has weapons it can use, like critical minerals and Treasuries and whatever remaining commodity buying China hasn’t already moved away from the US.

    Xi can slow-walk and stonewall Trump until the midterms, and maybe drive Bessent into a chronic stutter. By end 2026, Huawei will have a capable AI accelerator with homegrown HBM and the PLA will be ready to blockade or invade Taiwan – that is the kind of thing Xi is focusing on, while Trump rants and flails and continues mentally decomposing.

  4. I find the appellate court ruling to be incredibly ironic given that the activity they stayed was deemed illegal, by the court who has jurisdiction on the matter. In effect the appellate court is saying “well it might be illegal but we need to let the loser in the case have the time to challenge and thus the illegally ruled activity can continue until such time as that is completed.”

    So imagine you’re Bernie Madoff and you are prosecuted for running a ponzi scheme and instead of having your assets frozen and being sent to jail, you get a Trump appellate ruling that says “well go ahead and keep that scheme running while you slow walk your appeals”.

    This once again demonstrates how justice is not blind and that the law is hardly unimpeachable. Everyone currently paying tariffs that are illegal will never be compensated for the court’s decision to let Trump keep stealing from them while he appeals for months/years.

    1. Same with all the immigrants who will have their protected status revoked. Instead of allowing them to stay until the matter is settled in courts, the Trump admin can just start deporting them.

    2. I wouldn’t count out a ton of litigation over this, whether importers seek full or partial refunds, or even try to establish private rights of action to pursue monetary damages. Not saying any of that will be successful, but will certainly be more sand in the gears for both beleaguered importers and an overwhelmed and now under-staffed Customs Bureau. In the end, no one will have saved anything, and both of the twin deficits will likely have worsened. MAGA it be.

  5. I needed to hop on Facebook today (I know), and the algorithm served me up a legendary scene from the 1988 World’s Series of Poker. The algo knows I made a living playing poker back in the day, so it’s always offering up such vignettes. (If this begins to sound familiar to you, it’s the scene Matt Damon’s character Will Hunting obsessively rewatches in the eponymous movie).

    The hand is justifiably famous. A relatively young up-and-comer, Eric Seidel, is heads-up against living legend Johnny Chan at the final table of the WSOP. Seidel was no lucky upstart, the man has skill: today he currently has 10 WSOP bracelets, tied for 3rd all time, but he has never won the main event. Chan, on the other hand, won the main event in 1987, and was gunning for #2 (he’d also won a bracelet in 1985 in the $1,000 NLHE event. Chan also wears 10 bracelets today. He’s one of the people with whom Eric Seidel is tied. The other is the late Dolly Brunson). Chan was a legit contender at the time for greatest living poker player with the only real competition being 2 time main event winner Doyle Brunson. Texas Dolly had already bombed out of the ’88 event though, and it was down to Chan and Seidel.

    Chan had the button, and just called to open the action. Today that would be considered a weak opening, but Chan was confident he could outplay his opponent after the flop and saw no reason to build the pot. Seidel checked his option to raise out of the big blind. Pretty standard really.

    The flop was Q-10-8 rainbow (i.e. 3 different suits). Seidel, holding Q-7, had just flopped top pair. (Fun digression: Q7 has the nickname “The computer hand” in Texas hold’em. That’s because legend has it that a computer had determined that Q7 was precisely the 50% middle strength hand of all 169 possible starting hands in hold’em. This is completely incorrect–that’s neither true head’s-up nor full ring. But that’s the power of rumors). Seidel’s play was pretty straightforward for a head’s-up unraised pot. He checked his top pair. Chan’s action was pretty standard too. He bet. This is basically a play to take away an uncontested pot and move on to the next hand. Seidel then made a pretty standard check-raise for value with his top pair.

    At this point, Seidel has essentially declared he has a decent hand. That said, these aren’t beginners. They are always seeking to balance their ranges. You would check-raise a strong pair here for value, but you have to always check-raise some percentage of the time with nothing so as to make it impossible for your opponent to exploit by always folding. Similarly, Chan’s bet on the flop is pretty automatic. He would do it with air, but also with strong hands occasionally to balance his range. He would likewise check a strong hand so as not to bet his opponent off a losing chase but occasionally bet it to avoid being exploited by always telegraphing when strong.

    Chan Hollywoods a bit here–there are some definite weakness tells you can pick up on at this moment. He’s not happy about getting check-raised. When he calls, he somewhat aggressively fires his chips in. It’s an anger thing, and in the classic parlance of poker tells, strong means weak, but he mostly keeps his poker face intact.

    The turn is a brick. A completely innocuous 2. It changes nothing. Seidel checks. This is the first interesting moment in the hand from the perspective of an observer who can’t see their cards. Information is being conveyed. For Seidel this is a case of pot control. The problem he faces is that he has a decent hand, but he doesn’t want to inflate the pot to the point where he becomes pot committed with only top pair and a mediocre kicker. Chan’s range could be essentially any two cards. There’s no hand, from pocket aces to deuce-seven that Chan wouldn’t occasionally open-limp the button with (did you know deuce-tre’ is a worse hand than 2-7 when head’s up? 2-7 is the worst hand in full ring hold’em, but head’s up, it so often happens that neither player makes a pair, so high card value becomes more important than the distant chance of making a straight). He would have folded the weakest part of his range to the check-raise, but would still balance that by occasionally floating with an intent of taking the hand away on a later street with a bluff. For Chan, he can read that his opponent probably has something, but it’s hard to pin down exactly what. A stone bluff would have been more likely to fire one more time. Seidel has represented a strong hand, and a strong hand would keep betting, so that’s what a bluff would also do. Chan now knows Seidel probably has a medium strength hand. Chan checks it back, revealing very little about his hand. He could have something with weak show-down value that he just wants to get past the river. He could be hiding a monster. He could just be waiting for more information before trying to take it away with a river bluff. He has position–the chance to act last every betting round–so he takes advantage of it and checks.

    The river was an offsuit 6. That doesn’t really change anything apart from some random lucky two-pair spike. Seidel checks again. Chan, last to act, makes a standard bet. He’s trying to get at least a little value from his hand or pick up the pot uncontested. It’s what he would do with any two cards that have no show-down value. He either has serious value or zilch at this point.

    Then Seidel makes his mistake. The mistake he has never forgotten. The mistake he will never live down. He check-raises all-in. Chan, respecting the unwritten rules of poker etiquette, does not slow-roll Seidel. He immediately calls and turns up his hand: J-9. Chan has the nuts (the best possible hand in a given situation). A straight to the queen. Seidel, disgusted, flings his cards into the muck having just pissed away nearly half a million 1988 dollars.

    The movie Good Will Hunting gets something pretty big wrong. They mischaracterize Seidel’s action here as a failed bluff. That’s an inaccurate description of what happened. Seidel had top pair. That’s a good hand, especially in head’s-up hold’em. What Seidel did is what’s known as “turning your hand into a bluff”. He created a situation where no inferior hand could pay him off, and very few superior hands could fold. He might have folded out a few queens with a better kicker. But no overpair, two-pair, three-of-a-kind, or straight would ever fold here. It was a mind-blowing blunder from a man who would go on to become one of tournament poker’s most accomplished players.

    He could have just called for value with his solid hand, seen Chan’s cards, lost a small pot, and moved on to the next hand after breathing a sigh of relief that he lost the minimum with a classic trap hand. Instead, he blitzed away days worth of work and accumulated chips in a single entirely unnecessary blunder.

    I was thinking about that hand a few hours later as I read the post up here from our host Walt Whitman (everyone’s favorite WW). It’s hard to miss that recently Trump has really latched onto using “holding cards” as a metaphor. He berated Vlodymyr Zelenskyy to his face, “You don’t have the cards!” When it comes to trade, the United States really does hold the strongest hand. That’s what happens when you have the world’s largest economy and 2nd place is only 60% of your size. Trump’s epic bungling of the trade war–which he started sans casus belli–is so monumental that he has somehow managed to turn the strongest hand into a bluff. Compounding his gobstopping compendium of misplays, he then folded before the showdown. Now he’s shouting that he wants to be dealt back in while failing to understand the ultimate law of high stakes cards: it doesn’t matter how good your cards are when you’re all out of chips.

          3. Ha! No, I’m no one you ever would have heard of.

            That said, I am Facebook friends with Phil. I mean, so are 4,400 other people, but still.

    6. Excellent post. Imagine a world in which the globe’s greatest dealmaker and most powerful man could: a) read that entire comment start to finish; and, 2) generally understand it.

  6. Like all of Trump’s team Bissent is way over his head. He has been a loser almost everywhere he went, bouncing from job to job. His track recoed is very weak talking with those who have a far wider and long-lasting experience with global finance.

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