Stocks Thumped – Fat Tail Daily

‘I’ve never seen anything like it’, said a guest on a news show yesterday.

‘Canadians feel betrayed by their closest friends and allies. They’re not buying American-made goods… and they’re taking them off the shelves. They’re canceling their vacation plans to go to the US. They’re just really, really angry. It’s the thing they talk about most…’

Today, we write about betrayal and befuddlement. They are all around us.

Yesterday, the media tried to keep up with the stock market. The Dow was down 1%… then 650 points…then…800…finally coming to rest down 890 points.

But any sell-off is treated as a calamity by the media. And any calamity is someone else’s fault. Betrayal…rug pulls…and treachery. Investors, who thought they would make a fortune by buying into the Trump Bump…are now getting Trump Thumped as the entire gain since November has been wiped out.

Who stabbed whom? Did Powell fail to cut rates? Did Trump fail to settle the Ukraine war, get peace in the Mideast, stop inflation, balance the budget or any of the other things he pledged to do? Or did the Democrats sabotage us all?

Crypto investors have felt the sharp blade in their backs too. Decrypt:

Not even the president’s meme coin is weathering the crypto market downturn, with TRUMP now down more than 85% from its all-time high.

Did Trump pull the rug on his coin buyers? Or was it just bad luck?

And last night, Trump went on the attack against Thomas Massie:

‘Congressman Thomas Massie…SHOULD BE PRIMARIED, and I will lead the charge against him.’

Massie’s sin?

A lack of loyalty. He plans to vote ‘no’ on Trump’s big, beautiful bill — which keeps funding in place for trillions’ worth of boondoggles…including those just discovered by Elon Musk.

Trump’s every move seems to bring a new opportunity for accusations of perfidy. Over the weekend, this remarkable headline appeared. Bloomberg:

‘Donald Trump claims his $5M “gold card” visa will “sell like crazy” — and could pay off America’s staggering $36.2T debt load.’

US citizenship…for a price? Pay off the national debt? So, we can buy Treasuries again confident that they will hold their value, right?

Let’s see, how many of these rich foreigners would we have to take in? $36 trillion divided by $5 million = 7.2 million. Are there really that many people with a spare $5 million who want to become US citizens?

If so, native-born Americans might be able to get jobs as their chauffeurs or golf caddies. Some could clean their swimming pools. Others could park their cars.

What?

You say those jobs are already taken by the Mexicans and Guatemalans?

No matter. There’s plenty of room under the Big Tent. And with Social Security in deficit, we need all the contributors we can get — especially if they’re rich. Elon Musk says Social Security is a ‘Ponzi scheme’. He’s right. And it will go broke unless more people get enrolled.

There’s a back-stab waiting right there, too. Millions of people depend on Social Security payments. But the feds will soon begin trimming benefits.

But new citizens at $5 million a pop may not be the answer. Even if the feds could process 100 of those rich peoples’ applications every single day…it still wouldn’t come close to keeping up with the additional US deficit…to say nothing of the principle.

Meanwhile, there are a number of other promises that probably won’t be kept. Trump’s ‘trade war,’ for example, the one that got Canadians so upset. He said it is all about stopping drugs, not trade. And while the yes monkeys were still applauding, he called it off.

From an economic standpoint, this is the worst result possible — neither buyers nor sellers…importers or exporters…can make plans. And the blowback hits before the blow. AP:

‘Ontario’s premier, the leader of Canada’s most populous province, announced that effective Monday it is charging 25% more for electricity to 1.5 million Americans in response to U.S. President Donald Trump’s trade war. “I will not hesitate to increase this charge. If the United States escalates, I will not hesitate to shut the electricity off completely,” Ontario Premier Doug Ford said at a news conference in Toronto.’

More betrayals…tomorrow…

Regards,