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UPDATE:
I have been watching the reaction of the financial class to Trump's tariff policy.
There is a lot of ...should have...Trump must recalibrate...moved too fast...wasn't smart...
Here is the perfect example...
Here's a taste...
The frustrating part is that I was on board for a reset. Truly. I’ve said it publicly. I’ve written about it in this very feed. I understood the need for a detox. For decades, the U.S. economy played the part of the rich guy at the table -- picking up the check for a global order that no longer worked in our favor. We hollowed out our industrial base. We enabled unfair trade imbalances under the illusion of diplomacy. We subsidized demand for cheap imports while outsourcing the hard questions about how our domestic workforce would adapt. Eventually, that had to stop. It was unsustainable -- financially, politically, and morally.
We couldn’t keep pretending that a consumption-led economy held together by zero-interest rates and global fragility was a long-term solution. I wanted a rebalancing. I welcomed the idea of a harder, smarter America-first policy that pushed for fair treatment, reciprocal agreements, and a real industrial strategy rooted in technological superiority, national security, and capital formation. That would’ve been leadership. But that’s not what this is.
Here's the opposite take...
Maybe President Trump’s tariffs will cause a prolonged trade war and a Great Depression in the United States the likes of which we’ve never seen before, sending the nation into a spiral of chaos and hell on earth.
But walking around outside today, three days after the tariffs were announced and barely a day after many of the minimum tariffs went into effect, life seems oddly normal.
I’m in In New York City this morning, so I took a walk around Central Park. Despite the cool, rainy weather, the park was littered with tourists taking photos, New Yorkers playing with their dogs, couples holding hands, and joggers getting in their workout for the day. Yesterday, as I went on my own run up Park Ave. at lunchtime, I watched junior bankers pour out of J.P. Morgan’s office by Grand Central Station, joking with each other, smiling and happily ordering their lunches.
If we’re in the midst of armageddon, it sure doesn’t seem like it...
My sense is many of these pundits have lived their lives in the matrix of the Wall Street squawk box...where phrases like 'present value' and ''recalibration' permeate the consciousness and unconsciousness.
The financial class, which helped create the problem of $7 trillion in sovereign debt that needs to be refinanced in the next few months, is going to be slow to adjust and will fight this with everything they have.
Here's the kill shot -- we cannot refinance that debt at a ten year bond above 4%. We will die of expanding deb service.
So, Trump HAS to get the ten year way down...
So, why not shock the system, and 'recalibrate' the system, and push the ten year down a hundred basis points?
I'm surprised the financial class didn't see this coming...
What I'm thinking about is how for quite some time now--at least several years--a sizeable number of Earth watchers have been saying that what we needed to save the world was #degrowth. And now it looks like that is exactly what we are headed for, thanks to President Trump, who may have been exactly what we all needed to spur us to bite the hard bullets.