Orange Monday or MAGA Monday?

Time will tell which name will go down in history books. But April 7, 2025 will be up there with Black Monday (October 19, 1987) and Black Thursday (October 18, 1929).

Trump wants everyone to just calm down, already, in his own ever-weirdly worded way. But he said this just before millions of Americans died of Covid, too. 

This is a guy who, by all appearances, staged an assassination attempt that actually took the lives of two people. He doesn't care about people dying. He's not making any decisions to help anyone but himself. 

Lots of people predicted this crash, but lots more are shocked that it actually happened. I feel really sorry for some because they were duped by the performance and chanting and reassurances, but some really should have known better, like Bill Ackman. He's one of the guys who warned about the mortgage crisis before it happened in 2007. He was one of the good guys in Inside Job. Now, after supporting Trump, he's saying this isn't what we voted for.  Except it really is.

Two takes on the tariffs from before the market closed on Friday. I have no idea what's the truth, but they're both terrifying.

Joeri Schasfoort, of Money & Macro Media, thoroughly explains his theory that the tariffs are just step one of creating a new global order along the magnitude of Reagan/Thatcher's economic shift. Tariffs are the means to create economic leverage. The goal is to undo deindustrialization in the US. This time all countries will be divided into three groups: green, yellow, and red, as determined by the US, in which some get all the goodies, and the others get little or nothing. Step two is reciprocal tariffs used to even the playing field by suggesting that, if currency deals can be made, then tariffs can be lower. And then the third step is the "Mar-a-Lago Accord" in which the US becomes an empire, and all non-US-aligned countries will become like vassal states. 

"I do believe that if enough countries join the new MAGA World Order as green countries that peg their currency to the US dollar this does indeed mean that Trump can have his weaker dollar while maintaining its status as a reserve currency. This could help re-industrialize the US, at least to a certain extent, in theory. But, of course, all of this depends on the US making it attractive enough for countries to become a green country." 

David Rosenberg's take is that the US wants to be "liberated from bilateral deficits with all countries running such gaps against the U.S." Trump's reciprocal tariffs are clearly outrageous.

"None of this is 'reciprocal,' and none of it makes any sense. At least to me. So, I must make this very clear. These are not really 'tariffs' that are being imposed. These are actions aimed at completely eliminating the U.S. bilateral trade deficit with every country. That is why the 'tariff' is really not that at all but rather a 'ratio' of every country's trade surplus with the U.S. divided by the exports of that country. ... And the question is, why? Because the president and his team believe that trade deficits are 'subsidies,' pure and simple. And that, my friends, is patently absurd. ... 

Given the relative size of the U.S. to many other countries, it makes zero sense to expect anything but deficits with these nations. In other words, the law of large and small numbers here is going to make it next to impossible for every bilateral deficit to banish. A wholly unrealistic expectation. ...  The U.S. dollar is the reserve currency of the world. It is perfectly normal for the reserve currency country to be running current account deficits with other countries. ... This new trade policy is not gong to end up getting rid of the deficits. ... These punitive 'tariff' rates -- more like forced relative price changes -- are very likely here to stay."

So, as far as I understand it all (and that might not be very far), some people think the reciprocal tariffs are a gross calculation error, but these guys think it's entirely intentional either to provoke individual negotiation so that the US can essentially own these countries or because of a warped understanding of what a deficit is. 

Either way, Robert Reich's proposed solution to it all is, basically, to refuse to negotiate with terroristic governments: 

"My strong recommendation to Canada, Mexico, Japan, the United Kingdom, and the European Union is to join together to create a free trade zone that excludes the United States, imposing at least a 10% tariff on all imports from America. ... They [we] will be tempted to negotiate and do so individually. They should not. They need to negotiate from a position of strength. A non-U.S. free trade union will give them that strength."

Also, from Clinton:

 

I'm reminded of my parents' longstanding advice. They were born it the 1920s and lived through the Great Depression, and always said, in times of chaos, stand still. Tighten your belts, but don't do anything. Don't move your money or buy or sell or make any big decisions. Just let the dust settle. And we have to come to terms with the reality that money comes and money goes. (Not financial advice, just some personal mom-and-pop-isms!)

Here's hoping we can stand strong together! (Things aren't great when they break out the turnip photos.)

ETA: And from The Toronto Star last week (click and save for easier reading) -- and check out this Lever Time podcast with David Sirota (Bernie Sanders' former speechwriter) AND Yanis Varoufakis's take!

ETA April 9th: Didn't market manipulation used to be illegal?