Headline:
Classic Henchmen.
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The U.S. Financial Market’s Capital Destroying Hurricane Was Brutal + Swift…
Unleashed By Trump’s Draconian Country Specific Tariffs =
Self Inflicted Supply Shock = Assigning $$ Burden To U.S. Businesses + Consumers = Indirect Tax.
Naturally…Bonds + U.S. Dollar + Stocks = Mercilessly Liquidated [See Below].
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Yet BHLN’s [Bessent + Hassett + Lutnick + Navarro] Subsequent Public Tariff Commentaries…
Indicate They Were Genuinely Startled By The Magnitude Of Market Declines =
A Huge Problem = As Their Collective Economic Ignorances Demonstrate:
1. Blind Loyalty To Master President Irrespective Of Market Signals Pointing To Likely Failure Of Economic Policy Objectives.
2. Deficient Capital + Financial Market Competencies.
3. Inabilities To Consider Secondary + Tertiary Consequences To Meaningful Economic Policy Pivots.
4. Intellectual Absolutism/Intransigence Toward Desired Economic Outcome In A Dynamic Global Economy With Unpredictable Response Mechanisms.
5. Lack Of Courage To Challenge President Despite Substantial Damage To U.S. = Company/Industry + Economy + Sovereign Brand.
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Furthermore…It Certainly Seems Trump Does Not Fully Comprehend Capital Markets…
And The Fragile Global Inter-Connections Between Bonds + Commodities + Currencies + Equities + Real Estate…
In Many Cases Collateralized + Financed + Margined With Strict Monetary Covenants.
At Their Core…Financial Markets Enable Capital Formation…
In Order To Grow + Innovate + Mitigate Risk…
Of A Consumptive Economy.
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And When These Capital Apparatuses Unusually Contort + Fail To Reliably Fire/Project…
As Currently = Dramatic Fixed Income Yield Spread Widening = Investment Grade + Junk + Municipal + Sovereign…
Markets Transmit A Flashing Red Signal That Economic Instability/Uncertainty Presides And Is Further Anticipated…
Unless Trump Either Soon Capitulates To The Market’s Desires…
Or Dramatically Improves His Economic Policy “Pitch”…
Which Thus Far =
1. Erratic +
2. Hostile +
3. Inconsistent +
4. Intellectually Hollow.
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Plus…That The Rest Of The World Is “Ripping Off” The United States…
Vis-A -Vis Trade Imbalances =
Too Simplistic + Vague.
Moreover…Trump Also Frequently Exaggerates + Mischaracterizes Financial Trade Facts.
For Instance The U.S. Goods Trade Deficit = While Regularly Robust…
Is Countered By A Consistent U.S. Services Surplus Of $20B+/- Per Month.
Further…Trade Deficits Calculate Gross Dollars…Not Profits [Much Smaller Percentage Of Gross Dollars].
And…Of Course…U.S. Goods Deficits Provide Consumers With Price Competitive Products…
Most Of Which Are Not Essential To National Security [Door Hinges + Sneakers].
What’s More = Inexpensive Goods Marginally Reduce = U.S. Inflationary Impulse = Suppressing Interest Rates.
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Nevertheless…Global Goods Trading Metrics Could Be Much Improved [Universal Zero Tariffs = Equitable]…
Especially With China = The #2 Global Economy [GDP] + Large Exporter To U.S…
Yet China = Communist Geo-Political Adversary = An Especially Complicating Factor…
Further Exacerbated By China’s Long Standing Reputation As Dicey Global Business Practitioners =
1. Copyright/Intellectual Property Theft + Patent Infringement [Entertainment/Software] +
2. Currency Manipulation +
3. Energy Purchases From/Enabling Sovereign Bullies [Iran/Russia] +
4. Import Trade Barriers +
5. Questionable Accounting/Financial Statement Principles/Standards +
6. Over-Supplied + Subsidized Materials Industries [Aluminum + Chemicals + Steel]
…Ad Nauseum + Et Cetera.
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So…Despite Trump’s Self Professed Expertise…On All Subjects…
As It Specifically Pertains To The Intersection Of Capital Markets + Geo-Political Dynamics…
TRUMP IS CERTAINLY NOT THE SMARTEST GUY IN THE ROOM…
Because If He Were That Intelligent + Savvy…
He’d Quickly Realize His Extortionary Tariff Tactics Are Broadly Injuring The United States…
1. Economically +
2. Politically +
3. Reputationally
…And In Order To Get Financial Markets “On Board” With His Nationalistic Dealmaking Policies…
The Requirement = A Less Economically Painful + More Judicious Medium Term Path To The Other Side Of Tariff-Ville…
Or He Greatly Risks Achieving Friendlier Financial Policy Objectives [Deregulation + Tax Policy] = Markets Would Welcome.
And That BHLN Appears Not To Have Counseled On These Specific Matters = Enormously Concerning.
Maybe Because Trump Clearly Values Personnel = More Adherent + Loyal To His Idealistic Beliefs…
Rather Than Competent + Professional.
And There Appears To Be Much Incompetence…
Well Beyond Commerce + Economics + Trade + Treasury.
For Example…Health + Human Services Secretary [RFK Jr.] = Prior 14 Year Heroin Addict + Now A Proud Conspiracy Theorist.
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Anyway…Trump’s Haphazard Tariff Policies = Increasingly Criticized + Scrutinized.
No Matter…Zealous Trump Believes He Knows What’s Best For America…
And When He Does Not Get What He Desires =
Trump Morphs Into A Macho Drama Queen…
1. Threatening +
2. Victimizing +
3. Whining
So For Now…The World Economy Is Primarily Beholden To Trump’s…
1. Dubious Emergency Declarations +
2. Emotional Financial Judgments +
3. Random Tariff Pivots
= The Distorted + New Normal For Capital Markets.
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