The True Sport of MAGA

Acting-Man

 

Chest Bumps

One of the more extraordinary things that investors have seen in living memory is unfolding at this precise moment. This goes for business leaders, money managers, veteran Wall Streeters, value investors, 401(k) holders, momentum traders, FX guys, gold bugs, technical gurus, chartists, pork belly speculators, quants, astrologists, Larry Summers, put option sellers, dweebs and geeks, millennial index fund enthusiasts, and everyone in between.

Pork belly speculators were among those waking up to a nasty surprise as China retaliated by imposing its own list of tariff duties. Soybean traders were also forced to rapidly adjust to an unexpected change in export fortunes (see further below). Farmers are presumably none too happy at this point. [PT]

They’re all craning their necks in unison.  They can hardly believe their eyes.  Up on the world stage, and on a daily basis, President Donald Trump chest bumps international leaders with wanton abandon.

Donald Tusk, Justin Trudeau, Xi Jinping, Angela Merkel, and even the new leftist Mexican victor, Juan Trump, have President Trump posturing towards them as if they’re facing off at a weigh in for a heavyweight fight.  The sight is absolutely ludicrous, if one is in the mood for a reality TV show – or a practical joke.

This, of course, is all in line with Trump’s fiery brand of gamesmanship.  The strategy goes something like this: Shock.  Confuse.  Backtrack.  Counter.  More shock.  The more astonishing, the better the outcome will be.  The more rapid the sequence, the more power it displays.

But it’s not without the potential for major upset.  The stakes are high.  The term is young.  Something startling is bound to happen.

Say hello to Juan Andres Manuel Lopez Obrador-Trump. [PT]

Photo credit: Carlos Tischler / Getty Images

Opening Jabs

Several opening jabs were aimed by Trump at China on July 6.  A 25 percent tariff on $34 billion of Chinese goods entering the U.S. took effect, including duties on farm plows and airplane parts.  China quickly countered with retaliatory tariffs on U.S. soybeans and automobiles.

Soybean farmer nightmare comes true, courtesy of “easy to win trade war”. [PT]

Billionaire investor Ray Dalio commemorated the July 6 skirmish by tweeting: “Today is the first day of the war with China.”  Markets, however, didn’t share Dalio’s sentiments.  In fact, they didn’t flinch.

Both the S&P 500 and the Shanghai Composite Index finished the day higher than where they started.  Somehow, the consensus opinion was that Trump will be more talk than action. The consensus opinion was quickly thrown into question.

On July 11, Trump went full MAGA.  He identified plans to tack on 10 percent tariffs to an additional $200 billion in Chinese goods.  The S&P 500 finished the day down 19 points.  By Thursday, however, everything was hunky-dory; the S&P 500 gained back the prior day’s losses and then some, closing up 24 points.

Naturally, China said there will be further retaliatory measures. As of this writing, these new measures haven’t been revealed. However, many reports have been presented to document China’s deep …read more

Source:: Acting Man