Investors were surprised first by the magnitude of certain rates applied to trading partners that appeared to be based on a formula without a valid rationale based on established economic theory. They were rattled further when China on Friday decided to retaliate first with a 34% tariff on all U.S. imports, instead of negotiating.That was last week. Then Trump quit playing golf:
Investors did not receive the news over the weekend they were wishing for that the Trump administration was having successful negotiations with countries to lower the rates, or at the very least, was considering delaying the set of so-called reciprocal tariffs due to take effect April 9. The initial unilateral 10% tariff went into effect Saturday.Dow futures are down 1600 points on Sunday evening. The Dow dropped over 2300 points on Friday. Monday is already saying: “Hold my beer.” 🍺
Instead the president and his key advisors played down the sell-off:
Trump said Sunday evening on the market sell-off: "I don't want anything to go down, but sometimes you have to take medicine to fix something."
Trump added, "We have a trillion-dollar trade deficit with China, hundreds of billions of dollars a year we lose with China. And unless we solve that problem, I'm not going to make a deal."
Commerce Secretary Howard Lutnick told CBS News that the tariffs would not be postponed. "The tariffs are coming... They are definitely going to stay in place for days and weeks."
Treasury Secretary Scott Bessent noted to NBC News that more than 50 countries have approached the administration for negotiations, but cautioned "they've been bad actors for a long time, and it's not the kind of thing you can negotiate away in days or weeks."
I guess the bit tonight about “medicine” was not reassuringly rational. I’m also sure the nearly 3 million people in the streets will not speak with a louder voice than investors will to Congress in the coming days.
The only question is, how long will the powers that be let this madman think he’s in charge? Who will ask: “At long last, sir, have you no shame?”
I really don’t think he can defy reality with his bullshit for very long. This is much bigger than he realizes:
5:50 pm PST:
Japan’s banking sector in free fall.
Complete meltdown across all major financial institutions with 14-17% drops not seen since 2008 financial crisis.
I really don’t think he can handle it for very long.
The future knows; the rest of us have to live through it.
It's stunning how dangerous the American presidency is. Bush II-Cheney blowing up the entire middle east and beyond by illegally invading Iraq, the near Depression 2 and literally everything Trump's done. It's always been dangerous, especially after the beginning of nuclear weapons, but it's too dangerous for a democracy to exist with it. That's my conclusion. And that's not to mention the cabinet made up of those the president owes or likes who have no real business being part of the government as opposed to those who are long-time elected politicians like those who make up the Canadian or British governments. We used to at least have a long-time, experienced civil service who could be counted on for basic competence but it's clear, now, that under the presidential system, we don't have that anymore. Once the jars and bottles that Trump has broken are broken, it's easier for the next one to do it.
ReplyDeleteOur Constitution has failed catastrophically. I hope the world gives us an ultimatum to change it but I doubt that's going to happen.