If I had to guess, I think that a group including Bessant and others made Trump gaze into the abyss of the bond market and make a rhetorical gesture towards tariff repeal. I don't know the degree to which Grandpa Shoutytweet understood the specifics of what he was being told, but I'm sure 2008 was thrown around a lot.
The rally we saw yesterday was the market confirming that it hates tariffs, but the bizarre reality is that we still have a bunch of tariffs in place, and the tariffs on China are literally insane. The last week has proven the following, as Krugman lays out:
Let me make four points about Trump’s post-pause tariff regime.
1. Even the post-pause tariff rates represent a huge protectionist shock
2. Destructive uncertainty about future policy has increased
3. We’re still at risk of a major financial crisis
4. The world now knows that Trump is weak as well as erratic
You can click through to see his explanation of those four points, but they seem pretty self-explanatory. At the moment, markets are in retreat again, because the so-called reductions in tariffs are still disastrously high. What's more, the erratic nature of these "policies" - if we can call them that - means that you can't plan day to day much less quarter to quarter.
The number of MAGA voices out there chirping about "Art of the Deal" is just confirmation that the GOP has become a cult. No deals were cut. No one caved to Trump. The bond market verged on collapse during a stock market crash, and Trump freaked out, because even he could figure out that he was flicking matches at a bunch of gasoline soaked rags in a fireworks factory.
Was there insider trading yesterday? It seems almost naïve and credulous to ask. There almost certainly was. Fraud and corruption are the standard operating procedure for this crew. It's been my contention that we were going to see a financial crisis based on fraud, probably in crypto. I had no idea he would so weaken the markets with this tariff nonsense that it could create that crisis. What I feel will happen is that markets and finance in general will be incredible nervous and conservative, but someone will try and boost their profits by doing some crypto shit and tear the whole thing down.
Are we winning yet?
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