We have called him the whirling dervish of policy incoherence, caprice, cocaphony—-and, when push comes-to-shove, cowardice. So yesterday’s Keystone Kops maneuvers on the China tariffs could not be more dispositive.
Suddenly, it seems, the 10% tariff on China-made shoes and shirts scheduled for September 1 is just fine—-since there are so many alternative sources of supply that Chinese producers and US vendors will be forced to eat the tariff, not retail customers.
But when it comes to toys and iPhones, which overwhelming come from China, not so much. The 10% tax is now delayed until December 15 so that Christmas stockings won’t be stuffed with inflated price tags and reminders that the madman in the Oval Office is attacking the American economy in his mindless war against trade.
Accordingly, we must repeat: Why would anyone in their right mind be buying the dip when the stock indices are in the nosebleed section of history, while the White House is occupied by an utterly unpredictable whirling dervish and the central banks of the world have finally pitched the bond markets into the drink of negative yields and inverted yield curves?
It is perhaps a measure of the degree to which the speculators and gamblers who inhabit the casino have been zombified by 10 years of monetary insanity that there is any bid left at all. Still, the chart below should scare the living bejesus out of anyone who has even a passing acquaintance with the fundamentals of rational finance.
Alas, it apparently hasn’t–as bubblevision this AM will filled with talking heads saying this yield curve inversion is different and not to worry.
Actually, it is different, and for the worse. That’s because what lies directly ahead is a triple whammy. To wit, the global economy is visibly sliding into recession and the Donald is getting ever more desperate because he knows a stock market crash/recession will mean a thumping defeat in 2020 and a subsequent long visitation to the Jeffrey Epstein Memorial Cell. Fully staffed and camera’d.
So if you combine the Donald’s unhinged Twitter keyboard with the Wall Street flavor of the day—the statistical inversion of the 2s-to-10s yield curve—you’ve got a whopping pack of troubles and an exceedingly slim chance that anything can now be done by the authorities to avert the on-rushing financial conflagration.