***** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
For months, we’ve been circling the drain — the median stock peaked back in December, DOGE took office in January, Tariff-talk arrived in February, soft data started screaming in March. Now, it’s April and we’ve passed the point of no return. We’ve entered The Vortex.
Markets are only beginning to price this reality.
I’ve written about the turning cycle — untethered euphoria, the turn of sentiment, the moment of AI disbelief, and “max stupid” ringing the bell. So far, we’ve played it tactically, focusing on the lowest hanging fruit by top-ticking nuclear nonsense, and shorting pre-revenue memes.
Fading momentum alone was enough for a market correction, and the S&P 500 did indeed notch a 10% drawdown by early March. Unsurprisingly, dip buyers held the index in limbo for the past three weeks while traders did their best to explain away the flashing warning signs while calling political bluffs.
But this week’s events change the landscape dramatically. Not only is hard data beginning to confirm a material consumer slowdown, but the hopes of Trade War skeptics were violently squashed in the White House Rose Garden.
What lies ahead is much more daunting than a mean-reversion. Trump’s tariffs represent the most extreme and sudden reversal of US trade policy maybe in the nation’s history. Do not underestimate the significance.
It’s not a negotiation tactic to reduce trade barriers, it’s a retreat from free trade for the purpose of national security and realignment. It’s not a policy to juice economic metrics, it’s one that will bring immediate pain. It’s not a stick or a carrot, its a wrecking ball, intended to dismantle the status quo — a status quo that has supported market gains for decades.
The implications are profound and come at a precarious moment. For the past several years, the US economy has been powered by stimulus, fiscal spending, and the wealth effect, leading to complacency and vulnerability. Now, we are seeing slashed spending, government firings, and tax hikes in the form of aggressive tariffs, while the single largest store of paper value crumbles. At the same time, consumer spending is fading and real GDP may already be in contraction.
These factors are reinforcing and accelerating. The Trade War has only just begun ............
Why I Follow Price
Bubble Fare:
Weeks like this are a great reminder of why I got into technical analysis in the first place. ...........
What technical analysis does is give us tools:
- To measure and manage risk
- To understand participation
- To identify fear and positioning in real time
Tools that often lead the narrative. And this time was no different.
Price has been flashing warning signs all year:
- The bearish rotation (my research note from 2 weeks ago)
- The break below $580 and the 200-day (last week’s note)
- Most stocks trading below their 200-day (note from 3 weeks ago)
All of this before the “tariff” news broke this week.
Convenient how NOW the media has such eloquent explanations.
The signs were already there. We just had to listen.
I’m not saying technical analysis predicts the future.
I’m saying there’s information in price, and it’s worth our time. .........
Capitulation without price confirmation is not how you make money going long. We haven’t seen any real price reversal yet, no positive trend, no fake breakdowns reversing. Until price flips, patience is the trade.
....... Oversold bounce-backs tend to be sharp. Any long trades taken are very short term in nature because in bear phases, these rallies can also be a time to reduce risk. I’m respecting the downtrend until the evidence shifts. Overbought levels is a time to consider trimming risk, or taking profits in longs. .......
Bubble Fare:
Hussman: Humpty Dumpty Was Pushed
(not just) for the ESG crowd:
Action urgently needed to save the conditions under which markets – and civilisation itself – can operate, says senior Allianz figure
It actually makes the case that CO₂ is the dominant control on Earth’s temperature
I’ve seen quite a bit of misinformation crop up surrounding our paper – particularly the claim that we (humans) have nothing to worry about, with respect to climate change, since the Earth has been warmer for much of the last half-billion years. I cannot stress enough how reductive and problematic this viewpoint is. The flaw in this logic boils down to two key points:(1) the resilience of the planet does not directly translate our own species’ ability to adapt and thrive in the face of human-caused climate change, and(2) the impact of anthropogenic climate change is (and will continue to be) determined by the rate of change (meaning how quickly CO2 and temperature change) much more than the absolute temperatures, themselves.
.............. Similarly, author Dr. Jessica Tierney told us:
Joe [Rogan] seems to be saying that because – geologically speaking – we are in a colder climate that we don’t have to worry about human-caused global warming. Nothing could be further from the truth. It certainly has been warmer that today in the deep geological past, but those past warm periods developed slowly over millions of years. As a consequence, life on Earth had time to adapt. The problem with current global warming is the speed. The warming that humans are causing is unbelievably fast, and so humans and the other forms of life that we share the planet with can’t fully adapt. In fact, rapid warmings in the geological past are often associated with mass extinctions – abrupt climate change is hard for life to tolerate. So that underlies the danger in allowing our climate to warm so fast right now.
Geopolitical Fare:
........................... Third, what Trump is most clearly doing is exonerating capital, to the greatest extent possible, from the costs that climate change and the exaggerated inequality that has been generated in recent decades will inevitably have. His statements on the matter may seem bombastic, exaggerated, incredibly denialist, and even inhumane, given the disdain he uses to talk about poverty or the measures he has taken in environmental, health, and social matters. However, how long did it take large companies to suspend their diversity and inclusion programs? Which major business leaders have expressed their opposition to Trump's measures? Where are the corporations that spoke of responsible capitalism with a human face? How can we explain that, on the fly, all the good intentions and investment programs they had in place to combat climate change until just a few days ago are being eliminated? How is it possible, or can we explain, that a few statements and an executive order from Trump were enough for them to no longer consider it a threat?
Finally, I also believe that what Trump is doing is very similar, if not the same, as what other previous presidents, especially Biden, had already begun to do to confront the decline of the American empire ...................................
....................................... In short, if what we're witnessing is the behavior of a madman who's taking on everyone, it's likely that sooner or later the situation will reverse—at least enough to avoid the inevitable crisis that would ensue with the trade war and the economic collapse that would ensue if Trump isn't stopped as soon as possible.
If my hypothesis is correct, what we're going to see will be something else, and much worse. It will be the same as has happened on previous occasions: a tabula rasa, the deliberate creation of a major economic and democratic crisis that allows everything to change so that what they seek to preserve remains unchanged, the dominance of a power in rapid decline, and even at risk of extinction if it doesn't react, against a rival bloc on the rise and growing in strength. I have my doubts, but if I had to bet, I would go with this second hypothesis.
This tariff sea change reverses the gears of a machine that has been in motion for decades.
.............. Now let’s zoom out and think about what President Trump is trying to accomplish with his tariff agenda. He is essentially saying that the status quo in the United States isn’t working and large changes need to be implemented—changes that will shock the global economy—to remedy the issue.
................... Worse off, it made the United States dependent on adversaries like China to simply go about our day-to-day. When global supply chains were cut off during COVID, it was obvious that our quality of life was 100% dependent on imported goods—everything from consumer electronics to clothing to the ingredients used in pharmaceuticals.
Recalibrating the country away from being dependent on adversarial nations is not a simple and inconsequential thing to do. ................
There are going to be some consequences. Trump knew that in advance. Prices may go up near term, supply of goods may dwindle going forward, and we may go into a recession. But recessions can also create investment opportunities for people that have been priced out of the market for the last 20 years ..............
Yves here. Brian Berletic makes a point of saying, and documenting, how in the foreign policy arena, Trump represents continuity of agenda rather than the sort of break his backers claim he represents. This post makes a similar argument about the Trump tariffs and trade program. ............
"You can't just pour fertilizer into water and get a tree."
............. This is just one of the ways in which Trump is right and the experts are wrong. But… the problem with Trumpian mercantilism is the problem with Trumpian everything.
Trump always has the right reflexes. But a reflex is not a plan. It is not his job, but the job of his administration, to translate reflexes into plans. While executing with great energy and enthusiasm, the administration has had a rocky start in this translation.
A reflex without a plan is not action, but the illusion of action. Action is defined by its purpose. The only purpose of a reflex is to do the right thing. The purpose of an action is a step toward an end state. A reflex has no end or intent. An action is proactive. A reflex is reactive. An action is strategic. A reflex is tactical. And so on. ..............
Sure: mercantilism in the 1970s would have saved America’s industries. Instead, free trade—championed by conservatives—killed them. That was then and this is now. Time does not run backwards. It is hard to heal. It is easy to kill. It is impossible to resurrect. It is difficult to rebuild—maybe even more difficult than building.
Imagine if the US after 1950 had never accepted manufactured imports—that it chose to import only raw materials, not manufactured goods. I am old enough to remember when an imported car was a novelty. What would the downside have been? Answer: the downside would have been purely hedonic. .................
For example: consider a plan to reshore American consumer goods. Everything you can buy in a Wal-Mart will be made in America. Cool! But—by when? By who? How? Where? With what equipment, what personnel, what raw materials? ..............
Most of all: industrial self-sufficiency is only one of the purposes of such a project, and not the main one. The main purpose is to match labor demand to labor supply—to give every American not just a job, but a good job matched to his or her skill set. ................
Doctorow: What's wrong with tariffs
It's not that the Republicans and the Democrats are the same…obviously. But for decades – since Clinton – the Dems have sided with neoliberal economics, just like their Republican counterparts, so the major differences between the two related to overt discrimination, to the exclusion of the economic policies that immiserated working people, with the worst effects landing on racial minorities, women, and gender minorities.
So the Dems stood against discrimination in mortgage lending – but not for the minimum wage that would have lifted the lowest paid workers out of poverty so the could afford a mortgage. They stood for abortion rights, but against Medicare For All, which meant all women had the right to an abortion, but the poorest women couldn't afford one. And of course, in a country where racial and gender discrimination were still the order of the day, the poorest and most vulnerable Americans were racialized, women, disabled, and/or queer.
The Dems' embrace of Reaganomics meant that working people of all types experienced steady decline over 40 years: stagnating wages, economic precarity, increased indebtedness, and rising prices for health care, education, and housing. When Trump figured out that he could campaign on these issues, Dems had no response. Trump's "Make America Great Again" was meant to appeal to a time when working Americans were – on average, depending on their whiteness, maleness and straightness – better housed, better paid, and better cared for.
Of course, those benefits were unevenly felt: America was slow to extend the New Deal to racial minorities, women, disabled people, and other disfavored groups. Trump's genius was to marry white supremacy to economic grievance, tricking white workers into blaming their decline on women, brown and Black people, and queers – and not on the billionaires who had grown so much richer even as workers got poorer.
But Trump couldn't have pulled this trick off without the Dem establishment's total unwillingness to confront the hollowness of their economic policies. From Pelosi's "We're capitalists and that's the way it is" to Hillary Clinton's catastrophic campaign slogan, "America is already great," the Dems' answer to workers' fear and anger was, "You are wrong, everything is fine." Imagine having had your house stolen in the foreclosure crisis after Obama decided to "foam the runways" for the banks by letting them steal their borrowers' homes and then hearing Hillary Clinton tell you "America is already great" ..................................
........................... Economics has an assumptions problem. The foundational method of economic practice is to create models grounded in assumptions that are either not known, not knowable, or – incredibly – known to be wrong. As Milton Friedman famously wrote:
Truly important and significant hypotheses will be found to have "assumptions" that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions (in this sense)
......................
***** Bardi: The Fall of the American Empire
Growth is Sluggish, but Ruin is Rapid (Lucius Annaeus Seneca)
In his madness, there is some method (Shakespeare, “Hamlet”)
It is starting to appear clear that Donald Trump is following a plan much more detailed and comprehensive than it would appear from simple slogans such as “MAGA.” Those who are behind the plan — whoever they are, oligarchs, dark elites, or Reptilians — are moving away from the neocons’ “Project for a New American Century” (PNAC) proposed in the late 1990s. It was a bold plan for world domination, and it was nearly realized in economic terms: it was just called by a different name: “Globalization.” For several decades, it was a successful mechanism that pumped wealth into the US economy out of the work of the rest of the world.
The next step of the PNAC project was the global military domination by the US, an idea related to the one expressed as “full spectrum dominance.” But that turned out to be too expensive. After a series of failed attempts from Iraq to Afghanistan, it was clear that it was not just difficult but impossible. The US economy couldn’t support the huge military costs of occupying and controlling the whole world.
Hence, the need for retrenching, abandoning unsustainable positions and concentrating on what the US can actually control: its national territory and the nearby regions. It is what Trump’s government is engaged in doing. The latest bout of the maneuver is the heavy tariffs imposed by the US on imports. It is supposed to be aimed at China, but it is a deadly blow to globalization. The idea is to return the US to a largely domestic economy.
It is nothing unexpected; in 1972, the calculations of The Limits to Growth had foreseen the collapse of the global economic system for the early decades of the 21st century. It is happening.
Crushed by the deadly mix of resource depletion, pollution, global warming, and overpopulation, the world’s economic machine is sinking fast. Governments are now acting as passengers of the Titanic, scrambling to save themselves the best they can. The US government is doing nothing different. Once you decide that the ship is sinking, you do what’s to be done, even if that means pushing someone else underwater. It is, more or less, what the US is doing by retreating inside its immediate sphere of influence. The idea is that the US still has considerable mineral resources that can be used to rebuild its industrial system, so it makes no sense to squander them to help other countries — what did they do to deserve the US help, anyway? Western Europe is among the big losers: it is the passenger of the Titanic who couldn’t grab a life jacket and now is going to sink. Europe’s madness is not feigned; it is real. Only true madness can explain ideas such as “Rearm Europe.”
The switch to MAGA implies profound changes in the US policies. The idea of rebuilding the US industrial infrastructure requires getting rid of parasitic and obsolete bureaucratic structure structures such as USAID and eliminating the competition from cheap imports ..............
With hindsight, one might consider Brexit, consummated after long haggling in 2020, the last, and lost, opportunity for the European Union to mend its ways and become a viable political entity, if not community.1 The departure of the United Kingdom did not register as a warning that the Union had become too internally diverse to hold together, having rapidly expanded both territorially and functionally. To the contrary, Germany under Merkel and France under Macron saw an opportunity, or pretended to see one, to push the old integration project—the “ever closer union of the peoples of Europe”—forward, now that “Euroskeptic” Britain, one of the Union’s Big Three, had left. But then, they arguably had little choice as the EU’s de facto constitution (two international treaties each hundreds of pages long) is practically unchangeable as any amendment has to be agreed by all member states, which some can do only after a referendum. One may assume that this rigidity was exactly what was desired when the treaties in their present form were signed in Maastricht in 1992 and Amsterdam in 1997, to cast in stone the logic of neoliberal political economy that was at the time considered the ultimate stage of economic wisdom.
Contrary to what may have been expected, or hoped, internal conflicts intensified after Brexit, between North and South (Germany and Italy) as well as between West and East (Germany and Poland, Germany and Hungary). At the same time, political performance declined dramatically: capital market reform remained stuck, banks continued growing too big to fail, responses to Covid and rising levels of immigration were left to the member states, public debt increased almost everywhere while economic growth declined, and the euphemistically named Next Generation EU (NGEU) recovery vehicle, despite €750 billion of funding, left no traces, not even in Italy, the member state it was above all to put back on its feet.2 All these were cases, one way or another, of internal borders between member states asserting themselves while external borders with the rest of the world failed to be established or policed. ..............................
How did the mainstream media manage to lionize one of the most objectively evil organizations in existence?
The past couple months have been kind of surreal for me to watch unfold. Elon Musk’s Department of Government Efficiency, a government organization made by rebranding the United States Digital Service and utilizing its wide mandate to combat wasteful spending in government, waded right into the United States Agency for International Development, among other agencies accused of wasteful spending, and practically dismantled USAID right in front of us.
People should be celebrating in the streets. After all, USAID was an instrument of colonialist power, acting as a CIA slush fund, propping up the Deep State and their Empire through intelligence skullduggery and overseas nation-building and capacity-building specifically engineered to exert soft power and make third-world countries totally dependent on the West and NATO and pull them away from BRICS influence.
But to hear the media say it, what’s really happening is that an evil fascist maniac is dismantling a completely innocent organization that takes our tax dollars and selflessly provides foreign aid to those in need.
I’m sorry. What are people smoking? Did everyone put stupid juice in their vape pens and I just didn’t notice?
USAID is evil. Like, not a little bit. Hugely, monstrously evil. They have been since their very inception. I don’t use that term lightly, and once I share a selection of articles on the topic, you will understand why that specific choice of words is not hyperbolic. ................
A short comment on economic warfare, the Russian state, and self-defeating Western prejudices
.............................................................. Western commentary still desperately seeking to dismiss the empirical fact of Russia’s economic resilience as “illusory” only shows that it is Western propaganda and, indeed, illusions that cannot adapt to reality. .........
Sci Fare:
Physicists today need to jettison the all-too-attractive myth that they are uncovering the hidden reality of our Universe
................... Over its history, physics has delivered elegant and accurate descriptions of the physical Universe. Today, however, the reality physicists work to uncover appears increasingly removed from the one they inhabit. Despite its experimental successes, physics has repeatedly failed to live up to the expectation of delivering a deeper, ‘final’ physics – a reality to unify all others. As such, physicists appear forced to entertain increasingly speculative propositions.
Yet, with no obvious avenues to verify such speculations, physicists are left with little option but to repeat similar approaches and experiments – only bigger and at greater cost – in the hope that something new may be found. Seemingly beset with a sense of anxiety that nothing new will be found or that future experiments will reveal only further ignorance, the field of fundamental physics is incentivised to pursue ever more fanciful ideas. .............
Other Fare:
Finance is everywhere in the cultural imaginary; it represents itself largely on its own terms, a set of appearances that do not correspond to its practice.—John MacIntosh, entry on “Work” in Finance Aesthetics
There are numerous ways to categorize or periodize present crises. In no particular order: crack-up capitalism (Quinn Slobodian); organized abandonment (Ruth Wilson Gilmore); late fascism (Alberto Toscano, though the term does not name a period but rather sketches a framework of analysis); disaster nationalism (Richard Seymour); enshittification (Cory Doctorow); the financialization of daily life (Randy Martin); neoliberalism from below (Verónica Gago); and so on. ..........................
A UN committee has recommended Canada stop offering MAID for people whose deaths are not reasonably foreseeable
