Weak beta president deals backed down from the mighty communists across the ocean without getting anything in return, sad!
There are, however, some plainly obvious factors that people who don’t fundamentally misunderstand the concept of a trade deficit could see were setting us on the course to nowhere goodsville yet again. The insider trading meeting Treasury Secretary Scott Bessent had with Wall Street titans at JPMorgan this week was surely focused on at least three pretty obvious “uh oh” developments that required intervention.
There is no larger, more powerful market in the world than the United States Treasury Bond market, and they have already proven once that the Illuminati are real, and they surely did it again here in the insider trading meeting. Apologies to whoever wrote this post I read earlier that I cannot find, but it’s perfect: “the bond market panicking is like seeing your parents cry as a kid, you don’t understand what’s happening, but you know it’s really bad.”
Trump Destroyed His Negotiating Position
I have no doubt that the apocalyptic early shipping figures were brought up during Bessent’s insider trading meeting at JPMorgan. By some estimates, ocean container bookings from China to the United States are down 60 percent industry wide. As Bessent rightly said, this is unsustainable and much less like tariffs and much more like an “embargo” on the engine of global trade. Trump has already hurt the economy with this trade war, simply by telling companies that they can save themselves money by waiting to buy after president deals makes a deal, ensuring that until he does, people and businesses will cut back. This is how recessions happen.
Trump unleashed recessionary dynamics solely with his stupid words, took the economy hostage, then told people it’s his greatest negotiating position, and now president deals is threatening to shoot it in the head unless we impose tariffs that eclipse the scale of the ones that helped fuel the Great Depression. Great job everyone.
Trumpers will contest my assertion that he got nothing in return for being a weak beta male undeserving on the man-o-sphere’s bootlicking, as the stock market is up big today! Tesla, to the bane of all my puts on it, closed up over five percent after its catastrophic earnings report proved that it’s a cult posing as a carbon credits company with a couple of cars for sale. President deals said the deal is changed, and the market went up, what a genius!
Sure, in a market whose charts are permanently stuck on the one-minute ticker, this reasoning might make sense. But for those of us who know how to zoom out and see returns over a period of time the length of a house fly’s life, we can see that the market is still down from the day before Trump announced the most restrictive tariff regime since Smoot-Hawley. The market is leverage that China exerts over Trump, not the other way around. This dynamic is very clear just two weeks removed from liberation day, as the one thing that can get Trump to budge so far is when the market gets noisy about its concerns over the economy. According to Charlie McElligot at Nomura, Japan’s largest investment bank, even after this reduction down to what was their assumed baseline of 60 percent tariffs on China, “it’s still stagflationary, we’ve just moved from the acute ‘Left Tail,’ ‘run the train off the cliff’ risk to instead, the chronic fade ‘into the economic wall’ with the implications being a growth drag and (local) inflation tailwind.”
Gold Looks Like a Bitcoin Bull Rally
It is cooling off today as stock markets are up and bond yields are down, further reinforcing the “Sell America” trade the markets defined by falling stocks, rising yields and a falling dollar are exhibiting. But the story that boring old gold is telling is really striking right now. The first line I put on this chart is election day, and the second is Trump’s inauguration.
Chart via TradingView
It was frankly, adorable when the Wall Street Bets crew thought they could pull the same short squeeze strategy on silver that they did on GameStop. Commodities are a whole different ballgame, especially the greatest one of all. The classic joke is that you can have a great trade idea on gold and be right, you just have to wait a decade for it to happen. That gold is moving this much this fast is a bit scary.
The US dollar, like all fiat money, is a confidence game, and if gold is going semi-parabolic while the dollar is dropping, that says a lot about relative confidence in the dollar. It’s not as simple as “everyone is selling the dollar,” as this great report from Nathan Tankus on part of what is happening to the dollar highlights, but it’s pretty clear the whole world is attaching a larger risk premium to US assets and then adjusting their portfolios accordingly.
Countries, pension funds, and many other big players around the world are undoubtedly asking themselves varying degrees of the question, what happens if the dollar loses its safe haven status? The answer to that from markets so far is a retreat to gold. Bitcoin is even getting frisky in the past week, as the decoupling narrative is spinning up again for what over the course of its entire life has resembled a triple leveraged Nasdaq more than anything.
Gold, alongside a blowout in bond yields and Great Depression-level demand for shipping across the Pacific told a clear tale about a stressed economy over the last week. If any kind of logic is still capable of entering Trump’s rotted brain overflowing with Diet Coke and resentment, some of this dynamic surely helped get president deals to blink.
It is not exactly good news that the market is talking itself into it being a positive sign that grandpa has to actually hit the guardrails to swerve back into the lane and stop from driving us off a cliff, and the nature of these capitulations is one of diminishing returns. You can already see it today where the daily market gains are smaller than they were the last time Trump blinked and the S&P 500 teleported up six percent. At a certain point, even the most delusional market participants are going to see that president deals has been a figment of their imagination all along, and it won’t matter what he says, especially if we ever get the crisis he’s clearly agitating for.
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