I see a situation where the paradigm of the past 30 years could be flipping. Long rates have stopped going down, even during the largest economic event in history (note bunds). Price action has been telling, and the insurgence of fiscal via deficit blow out is new.
I’m writing up bits and pieces of tomorrow morning's analysis as I head to bed late here in Copenhagen—fully aware that Donald the Flip-Flopper is still wide awake. And that, in a nutshell, is the problem all of us investors are facing right now.
Can we trust what happens the next day—or even the next hour—as the headline hockey intensifies from the White House? Or should I say, the toilets of the White House?
Right now, we’re witnessing a masterclass in flip-flopping from The Donald. Just hours ago, we heard that 50% tariffs on Canada were set to go live tomorrow due to (potential) retaliation from Ontario on electricity exports. While Canadian electricity exports aren’t a game-changer, they do make up a few percentage points in some of the targeted regions—and Trump is apparently fuming.
Meanwhile, as Marco Rubio and his team lock in an outright victory with the Ukrainians in the Saudi Arabian talks, Nasdaq is still in the red. That tells you everything: markets hate the bizarre trade-policy whiplash coming from the White House.
Is Canada facing 25% or 50% tariffs on steel and aluminum as of this moment? Good question—no one knows. Including the president.
You can't buy U.S. risk assets as long as this remains the modus operandi.
What a joke.
$GDX trading at a 25% discount to $GLD.
Don't see a reason why the majority of this gap can't close in shortish order.
[assumes non material eqty weakness]
@hump_bear I’m trying to understand how you see it as net stimulative. Just wondering if you had done the work hence the q. Your logic seems to imply that hiking rates drives the economy higher and therefore cutting would do the opposite: the exact opposite of monetary policy?