WTF happened since yesterday?

Here is the daily update on what happened while you were sleeping.

> Tariff war:  Trump’s representatives said yesterday that Chinese-made smartphones and other electronics would not be fully exempted from the blanket tariffs levied by the US against Chinese goods, but that these products might be subjected to a “semiconductor tariff” (link). No details were provided on how that would be implemented, or when. It also appears as though Trump is caving on the tariffs levied against auto parts from Canada [link], but like with everything else, the details of how he wants to move forward with amending his own decrees are not clear. 

> Bond market:  Lots of financial analysts are looking at the bond market as the thing “running the show” right now. Trump even talked about the rising yields in the bond market (the result of bond prices falling due to selling pressure) as the main reason for his hastily announced 90-day tariff pause. While the pause momentarily tempered the rising yields in the bond market, the yields are again climbing, suggesting that the “sell everything American” theme is still in place. 

> Gold:  The price of gold continues to cause alarm. It’s come off all-time highs, but it’s still sitting at $3,212/ounce as of this writing. Goldman Sachs just raised its year-end spot gold price target to $3,700/ounce [link].  While that’s only a 15% rise from where we are now, those are basically shitcoin numbers for gold, which tends to move in much smaller increments over a much longer period of time. The velocity of the gold price is unnerving to me. If I worked in Macro Data Refinement, I’d probably click on those numbers and chuck them in the bin. They’re scary. I don’t know why. They’re just scary.

> Bitcoin:  Crypto as a whole has not done well through this crisis of US confidence, but Bitcoin (of all the crypto assets) has done well to hold. Keen observers will note that Bitcoin is not the flight-to-safety that bonds were or that gold is right now, and that Bitcoin’s value relative to gold has been falling over the past couple of years. That said, most long-term Bitcoin investors I know are still looking at what could happen with the Chinese yuan as a potential catalyst for a big move if there’s another wave of capital flight from China to escape a devaluation in the currency. That pumped Bitcoin significantly last time.

> American markets:  They’re up today, thanks to Trump caving on his own tariffs to exclude certain categories of goods from the blanket tariffs on China. Companies like Apple and NVIDIA bounced.

MB bottom-line: The US markets feel good today in the way that it predictably feels good to stop bashing your own head against a wall. “Art of the Deal”, my friends... AOTD! A useful thought exercise is to eliminate the Trump name from the equation, and try to evaluate the actual moves of the US Government objectively. When I do that, the US comes across like a rogue nation ripping down Chesterton’s Fences and already shadowboxing demons in the dust storm caused by its own seizures and outbursts. Adding Trump’s name to the equation does little to improve the outcome, like how the US Government tried to paint over its reckless and misleading “reciprocal tariff” formula with that abomination of fancy mathematical symbols that changed nothing. Truly S-tier levels of gaslighting, but more importantly, to me this is a strong signal of bad faith and one that requires claims to be backed by evidence and action rather than faith. Maybe it’s a silver lining that it’s a short trading week? 

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