HHH

[HHH @Hich9NYC]

@thisguyknowsai Send

[Gavin Baker @GavinSBaker]

Geopolitically, nothing matters more than winning AI.

These tariffs, as constructed, essentially guarantee that America will lose “AI” by making America the most expensive place on earth to build AI datacenters.

The semiconductor exemption was irrelevant for AI. Datacenter semiconductors come into America in finished goods from Taiwan and other Asian countries: servers, storage systems and networking switches. By the time we have developed the capacity to domestically produce these systems, we will have lost the AI race.

Outside of this dynamic, the assumption - or wild gamble - that other large countries would not retaliate and instead come meekly to the negotiating table was erroneous.

That was the off ramp and Bessent did his best to encourage the world to take it. China, understanding how awesome all of this is for them, did not take the off ramp.

Epic win for China.

Best outcome from here - that is in the realm of the possible - would be to quickly cut “deals” with friendly Asian countries - Japan, Taiwan, South Korea, Thailand, Malaysia, Vietnam, Indonesia, etc. Something like a 10% tariff plus true reciprocal tariffs (which would quickly go to zero) would be reasonable.

I say all of this as someone who was open-minded to tariffs that were thoughtfully constructed, gradually phased in and accompanied by massive deregulation. Ideal outcome would have been some combination of reshoring, revenue generation and seeing our largest trading partners lower their barriers to American goods. It is a fact that until yesterday we generally had much lower tariff rates than other countries.

My sense is that is where Bessent was, but he clearly lost an internal battle. Hopefully the market helps the President realize that a course correction is needed and the necessary changes are made relatively quickly.

The sooner, the better.

As a sidenote, I can only imagine how Bessent felt when he understood the way the reciprocal tariffs were calculated, that an LLM had generated the tariffs and that islands inhabited only by Penguins were being tariffed as a result.

[HHH @Hich9NYC]

@MBjegovic @threadreaderapp unroll

[HHH @Hich9NYC]

@MBjegovic @threadreaderapp unroll

[joshua steinman (🇺🇸,🇺🇸) @JoshuaSteinman]

Listen up and listen good.

International Longshoreman's Association President Harold J. Daggett is about to give you a master class in power.

Not fake, op/ed writing, Davos-flying, “Adults are back!” power,

Not Harvard-educated “norms of state behavior” power.

Real power.

[HHH @Hich9NYC]

@MBjegovic @threadreaderapp unroll

[HHH @Hich9NYC]

@VrntPerception @threadreaderapp unroll

[HHH @Hich9NYC]

@wesbury The TGA goes up in April around tax date when people pay their taxes. Balances go up, then TGA goes down again as Treasury needs to pay government employees...there is a good amount of seasonality to it its not all political

[HHH @Hich9NYC]

@larryswedroe Larry thabk you for a great article I agree with many of the arguments stated and do like private credit interval funds where you are more than fairly compensated for that illiquidity premium. Shouldn't we add leverage difference when comparing CCLFX and FLOT?

[HHH @Hich9NYC]

@QCompounding @readwise save

[HHH @Hich9NYC]

@skhetpal @readwise save thread

[HHH @Hich9NYC]

@Johncomiskey77 Great tedious work aggregating, I am confused on the x-date, you mentioned not in June but closest June 9th? what's your projected x-date please? Thank you

[Bob Elliott @BobEUnlimited]

CRE loans by small banks have gotten a lot of attention from the ‘bank crisis’ crowd so lets get sense of largest possible risk:

2tln outstanding, a 5yr x 3% charge off is 300bln.

NIM to 2pct on 5tln loans yields 100bln/yr.

200bln cushion before touching 700bln of capital.

[HHH @Hich9NYC]

@Credit_Junk What are the inputs to your model?

[HHH @Hich9NYC]

LEI (Leading Economic Indicators) <1 and Recessions, pretty much 1 for 1
Source: Bloomberg

[HHH @Hich9NYC]

@AndreasSteno If you add all sources you get just over 700bn= 378bn TGA (Treasury cash at Fed) + 294bn G Fund (Government pensions) + 19bn ESF (exchange stabilization fund) + 8bn/mo from CSRDF/PSRHBF (Civil and Postal pensions)

[HHH @Hich9NYC]

@shaneparrish @shaneparrish The Gain and the Gap ... great reminder that everyday make conscious decision to live in the gain...there is always a gain focus on that not the gap ...and the discussion format for the audio book is awesome

[HHH @Hich9NYC]

@AndreasSteno Clearly macro trends turned that's what @AndreasSteno charts show...CPI is a bottom up approach not a top down approach...for food we could use ppi supermarket or German food which tell different story. Energy commos down 2.5 not 5. Seasonality is +0.2 maybe missing link here too

[HHH @Hich9NYC]

@nickrgrs @readwise

[HHH @Hich9NYC]

@nic_carter @Robg0711 Buy real yields instead, they shot up 10y to .8%, looking at correlation they are saying gold should be at 1400