Lunch time in New York and the S&P 500 has already lost about half its gains from yesterday.
CleverOleg
joined 2 years ago
Oh yeah, me too. If you’re an American (and you probably are, as YEC seems to be a predominantly American thing) I cannot recommend highly enough that you go to Chicago sometime and check out their Natural History Museum; specifically their exhibit on the history of earth. I spent hours in it - the point my gf at the time was like “alright you stay here I’m gonna go walk around Michigan Ave till you’re done”. You start billions of years ago and literally walk through the history of how life on earth evolved. I was completely mesmerized.
I think it’s important to understand that just because Bessent has the title of Treasury Secretary doesn’t mean he actually understands how the economy works. He’s just a finance bro. He’s a guy who made a lot of money in investments. You can make billions in finance but not really understand how the economy works (even by bourgeois economics standards). Contrast that with someone like Powell, who has probably forgotten more than Bessent knows about how the economy works.
I almost made a comment yesterday that when this is all said and done, Xi might need to be the 6th head of Marxism. And he might, but then I thought about it more and I think he still might have a ways to go before he would pass up Deng. And I’m saying this as huge Xi stan.
I was gonna comment but I think you’ve said it all pretty well.
I feel like our resident fed is probably reading and just nodding along and thinking about how much they hate Netanyahu too.
Treasuries are the go-to asset in times of turmoil. The fact that rates went UP (meaning prices went down, meaning more supply than demand) with everything going on shows a shocking lack of confidence globally in the stability and security of the US. That means potentially higher interest rate payments in the future to service debt, but also chips away at the dollar’s privileged status.
The government can create money, sure. But every dollar printed potentially has an inflationary impact, so how you spend that dollar matters. Investing in productive activities - sure that’s good. But interest is 100% unproductive.
Honestly the “smart” move for Trump, if he’s determined to beat China, would be to get China’s other major trading partners to tariff/embargo China. But Trump is absolutely incapable of understanding how to make alliances and focus on a target. The absolute best he could would be to tell the EU they either embargo China or he’ll hit them with a 125% tariff too.
In a normal global crisis of capitalism, investors want to buy Treasury bonds - it's like their security blankie. More investors want Treasuries, the yield on Treasuries go down due to basic laws of supply and demand. The US government has more buyers and more competition for the bonds, so they can pay a lower yield.
Well, we are experiencing a major crisis and yields are going UP. So the opposite is happening. That means despite the current crisis, global investors do NOT want Treasuries right now. That indicates a major loss of faith in the US. Need to see how it plays out, though.
This is the kind of person who thinks it’s us who “DoEsN’t uNdErStAnD bAsIc EcOnOmIcS!”
You’re right that what’s been going on the last 30 years is unsustainable. But what you’ve gotten the last years has been full-on, uncut pure capitalism and Trump is just trying to solve that with even MORE capitalism. Yeah sure that should work…
Should the US start a war with Iran, I fully expect “being opposed to the war against Iran is anti-semitic” to be deployed sincerely.
Safe travels!