Why Trump's tariff chaos makes sense (big picture) | Hacker News Reader

Why Trump's tariff chaos makes sense (big picture)

moneymacro.rocks

7 pointswalterbell16 comments

I love how we're back to oracles interpreting sheep's entrails again. Goes to show how unilateral this all is when nobody knows what is going on. Do yourself a favor and stop trying to make sense of any of it. It doesn't.

I wonder what the over/under is on the number of banks that will fail in the next 7 days and whether it will precipitate into a contagion vector.

Why would banks fail in the next 7 days?

All of the major Wall Street banks called in their staff over the weekend. Lots of margin calls going out due to the market losses so far. Monday will be another bloodletting day, so there will be a chance that some customers may go unrecoverable net negative. This raises the issue of counterparty risk, and everyone tightens up as a result. Capitalization then becomes key, and with losses flying around, the first one to breach will end up cascading the risk to others. 2008 all over again, and oh yeah, weren't there mass layoffs on the government regulators side a few months ago - so who's answering the phone or running due diligence on the government side to figure out who is salvagable and who isn't?

Currently we're observing a "normal" panic sell-off. This has nothing to do with what's happened in 2008, at this point it is more similar to the dotcom bubble burst or 2020 (market sell-off).

One might go even further and say that this crash is over-due and somewhat preditable. This doesn't put banks in immediate danger.

Or, this the beginnings of a sell-off as the rest of the world realizes that the US is no longer a reliable (trading/military/alliance) partner, and will move to mitigate the dependency for the rest of the world's mutual preservation.

Also - this implosion is happening WAY faster than the dotcom bubble pop and even 2020 COVID lockdown selloff, and there is no stimulus coming to save the market this time.

This was somewhat predictable, as Trump doing illogical Trumpian things, but somehow he even exceeded the maximum irrationality predicted by the market, thus, the heightened adverse reaction.

"Market" predicted he will remove consumer protections, environmental protections and that some companies will be able to profit from top level corruption. There fore "market" thought this will be good for them in the short term and went up.

He went off like an idiot on tariffs the very first weekend. Canada & Mexico if you recall.

I recall. They went up after election, before they realized he will do more then just enable white collar crime.

“he uses it for negotiating”

My second piece of evidence to suggest the current chaos is temporary is that before being part of the administration, Miran said that the Dollar policies that he proposed would likely be.

“Miran: pursued later in an Administration after tariffs had produced the sufficient negotiating leverage”

So both Miran and Bessent are essentially telling us that the current Tariff chaos is just about creating leverage that can be used when implementing the rest of the plan.

Ok, just a few minutes ago trump said: Trump: "I spoke to a lot of leaders -- European, Asian, from all over the world. They are dying to make a deal, but I said 'we're not gonna have deficits with your country' ... to me a deficit is a loss. We're gonna have surpluses or at worst we're gonna be breaking even."

I don't see any way he wants to actually use the leverage he "created"

Yesterday peter navarro also said, i'm copying a tweet: Peter Navarro responds to Vietnam’s offer to remove all tariffs: “This is not a negotiation. This is a national emergency based on a trade deficit that’s gotten out of control because of cheating,” Trump’s trade adviser says on Fox News. “Don’t say you want to lower the tariffs and be done with it. It’s the non-tariff cheating. Stop manipulating your currencies. Stop dumping stuff in.” [1]

[1] https://x.com/LucasFoxNews/status/1908900999449763931

Pascal Lammy (former WTO head and former EU commissioner) described Trump bluntly but perhaps not far from the truth in response to the new tariffs:

"“I think Mr Trump learned to do business in the New York mafia-influenced real estate market and that his tactics are based on extortion – you hit and keep hitting for as long as you do not get a good price for stopping."

Why Trump's tariff chaos makes sense --- for China.

Once the US restricts trade with most of the world, who are they going to align themselves with?

Tearing down economic and military alliances that took a generation to build will only result in an isolated, poorer, weaker, less relevant America. And it is entirely self inflicted.

Perfect opportunity for China to become the world's dominate super power. They are the most likely winner, everyone else loses.

China has already announced that from 1st December they will abolish tariffs on imports from the 43 poorest countries.

It probably does not represent that much trade at the moment but it is very good PR at this time, and in the longer term it means that those countries will develop by growing links with China, not the US.

Why do CONSERVATIVE journalists always use CAPS LOCK to try and get their POINT ACROSS like children?

It makes it harder to read while make parts of text feel IMPORTANT. The combination makes their regular readers feel like IMPORTANT stuff was being said while making it slightly harder to notice that it was not.

I hate how there is a continued "good faith" assumption in Trump's behavior.

We know Project 2025 is a thing and we know their goals.

We know his ties to Putin, and his playbook for dismantling Western Hegemony (e.g. Foundations of Geopolitics by Dugin)

We know his ties to billionaires who are in favor of collapsing US intuitions in order to take over (e.g. Peter Thiel, Curtis Yarvin, and the "Dark Enlightenment" -- and the VP of the US, Vance, is Thiel's desciple)

Stop pretending there is 4D chess. He's an old man with dementia and profound narcissism being used by other power-players to achieve their goals. Everything else is window dressing.

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