The Markets Do. Not. Like. Trump’s Tariffs
Saying it again for the folks who can't hear.
It would appear that the only thing that Trump liberated yesterday was more value out of investments.
As of almost 10 am Eastern time, the major US stock indices are all down 3% or more.
Via Fox Business News:
And just to demonstrate the North Korea-esque nature of our current administration, we get this (source: CNN) from the White House Press Secretary.
“To anyone on Wall Street this morning, I would say trust in President Trump,” Leavitt said. “This is a president who is doubling down on his proven economic formula from his first term.”
Sure. That’s how all of this works.
If these measures stay in place, and note that the main hope is that this is all some kind of bluff,* this could end up being one of the biggest self-owns in the history of the world.
Wrecking the US-European military alliance, destroying the rules-based international system, and removing the US as the main driver of the global economy will make America weak, not great.
I marvel that anyone thinks any of this is a good idea.
And while many people tried to warn American voters, here we are.
*Think about it: if your main hope is that the person you support isn’t really going to do the crazy-ass thing they have been promising and are actively doing, then maybe, just maybe, you shouldn’t be supporting this guy. And (spoiler alert!) this isn’t going to bring about some new mythic golden age of manufacturing.
Adam Przreworski’s diary had originally assumed that the only external feedback to which Trump would be responsive would be the markets. I guess we will see. My kids are going to bear the brunt of his idiocy, as will my retirement account. Someone needs to explain to me why we needed this man to be President (other than we apparently can’t elect a woman).
@Kristina Stierholz: I was sitting at a golf course bar a few months ago with a number of older, well off, retired people. They were all grousing about what would happen to their investment portfolios if Kamala won in Novermber.
I keep wondering what those dudes have been thinking over the last six weeks.
I recently retired early and now I am concerned about the long-term health of some of my plans.
This is all so ridiculously stupid.
@Kristina Stierholz:
I’m honestly dubious about how much Trump cares about the markets. They were not the source of his personal wealth and because there is so little insight into his personal finances, it’s unlikely they are currently a major aspect of his personal wealth portfolio.
In the past, while he’s touted when the markets are good, he’s also been critical of markets as a whole for their role in accelerating policies that he sees as being anti-American (or MAGA). Couple that with his inability to admit that he’s wrong and that his views are bouyed by folks like Musk who don’t care about the market and you have a formula where he can easily convince himself that this is just a temporary disruption.
@Steven L. Taylor:
While the majority of seniors in the country don’t have savings, a significant portion still rely on 401 (k) s and other investments. It’s great that the same administration has been gutting social services (both funding and personnel) that are designed to help seniors going through tough times.
Those systems were barely keeping up with things during the last few years… good thing there’s no artificially created financial crisis that could result in a lot more seniors living near the edge to need those services. /s
@Kristina Stierholz:
Well, Kamala’s laugh was bothersome, and the email-lady was just too stiff./s
Trump will stick with this until interest rates drop. He’s been angry about interest rates for a while, and his pea-brain seems to think low interest rates are an easy button for a healthy economy.
I really do wonder how this is all going to play out. This is a MESS. Those “I did that” Biden stickers seem awfully quaint right about now…
@Kristina Stierholz:
I would say that you could peruse the contributions (making a mockery of meaning here) of our resident DJT supporters and one non-supporter (allegedly, but that person carries a large bucket).
But those posts are short on substance, long on bile, and longest on vomit.
You would be better off asking one of the front pagers or any number of the regulars to steelperson Trump support. They would do a better job than the actual DJT voters who comment here.
(Unless one of the silent readers wants to chime in, ya know, one of those lurking uh…principled conserva—er…genuine Christi—eh, eff it.)
In November I put most of my 401k in an insured bond fund (lower return in exchange for insurance coverage if the underlying bonds default) and that’s looking like a better decision every day.
The big chunk of money i put into ISHG (short term treasuries from non-us developed nations) is also looking very good today
Hypothesis without any basis, just a feeling: how is this massive display of stupid economic insanity affecting crypto?
@Jen:
Alas, with stagflation, you are more likely to get rising interest rates to battle the inflation rather than lower rates to boost investment. That was the lesson from the Ford-Carter period of stagflation. The inflation was finally killed by Volker raising interest rates to 20% in the first year of Reagan’s admin. That 81-82 recession was brutal.
@Matt Bernius: I’m also getting more and more cynical about businessmen who wildly overestimate their own economic smarts.
@Kurtz – no thanks on hearing from a Trump explainer. See above comment about businessmen.
@Steven L. Taylor:
My father in law, even before he went full MAGA, would go on and on about how Dems will ruin the economy and something something go GOP! He still doesn’t believe that his daughter moved to England.
He got fired during the 08 crisis because he was too old. He didn’t believe it was because he was too old. I mean, it was immediately obvious to me.
Another conversation I had with him I remarked that real estate developers were some of the dumbest people in the country. He got mad and me and said look at all the money they had. I, a real estate attorney, told him “yes, the smart 10% make money, the rest are morons that are just good at running scams. They all implode sooner or later.” He said I was an idiot.
He was warned that we were going to leave if Trump one. He said we wouldn’t and we were overreacting. We did and we weren’t.
I’m reminded of that joke where the guy refused all help and just said “god will save me”. I’m not God, and I’m pretty pissed. I’m just gonna call him a dumbass and laugh.
This is so fucking stupid. I have a job, and I’m trying to do it, but also looking around and wondering if it will still exist in six months? I mean, the work will still need to be done, and I’ve been doing it, well, for 25 years, but a large portion of the business is selling things to other countries, and . . . who knows? My wife’s a doctor, normally a stable job, there’s a pediatrician shortage, but a lot of her patients are on Medicaid, so it’s not clear if her employer will have money. We were talking about summer vacation, and I’ve made reservations, but that’s three months away. I have some RSUs that will have a strike date at the end of July, and our stock is at a record high, but who knows what it will be then. We were going to take some of that money and take our kids to Disneyland in the winter, but can’t plan for that, because I have no idea what’s going to happen to those.
The US economy may or may not be getting destroyed right now, but we’re all expected to just continue on like things are normal. This is conservatism? Is this what people felt like a few weeks or months before the start of the Great Depression? Are we all going to move to Trumptowns soon? So fucking stupid.
This was why I started referring to January 20th as the Singularity. It wasn’t clear how bad things were going to be, so you can’t really prepare for anything, but it was going to be bad. We’re putting tariffs on islands that are inhabited by penguins.
The only slight upside to all of this is that my father-in-law lost his retirement savings to a scam, but maybe it all would have been destroyed in the upcoming financial crisis anyway, so what did he really lose? So fucking stupid.
Unless one of Trump’s defenders of other things can come and defend this, I don’t want to hear from you ever again. Hillary had many flaws. Biden and Obama could have been better in various ways. But they didn’t burn the country down.
https://bsky.app/profile/did:plc:t6ubj2wlhc34awzcymh3qpur/post/3llvswqx4bk23
https://nomoremister.blogspot.com/2025/04/one-reason-were-in-this-mess-rich-dont.html
snip
Currently rather glad that I did not take out that shares ISA I was thinking of late last year.
I just saw someone on Bluesky suggest that tariffs are basically a Trump shakedown. Tariffs on all, cut a deal with him (aka, write a check or invest in one of his properties) and he’ll carve out an exception. Basically, bribes via tariff policy.
We still have to see the harrowing of the MAGAts. As markets fall the cultie retail investors will go bargain shopping. Then the markets will fall again and the MAGAts will get hit again. Will they learn? Nope.
BTW, it’s not just the stock markets, it’s also currency. The dollar is dropping like a rock as investors worldwide conclude that the US is not a place to bet on. Bad news for @Beth: and for me, as London rents will climb.
The only thing President Trump liberated me from was a bit over 40k in gains to my portfolio since July 2023, and I might be below the amount my portfolio was worth in July 2023 by the end of this week.
Kind of reeling from coming to this realization after I checked on my brokerage account yesterday evening.
I have given up on predicting what it would take for folks to genuinely turn on President Trump, and I can just only hope that there are limits to how much financial pain folks tolerate before they turn against the GOP, MAGA, President Trump.
Ugh, this is so frustrating. I will just focus on what I can control in my life.
@charontwo:
A true picture would require far more than what I did—I chose this particular fund to search because I have read more about it than, say, Ackman’s Pershing Square Holdings. A rigorous examination is way beyond my expertise.
Take all of this with caution. Matter of fact, think of it as nothing more than snack for thought.
Links at the top:
S&P percent change by year from Macrotrends
Prof. Bradford Cornell of UCLA and Cornell Capital Group on Renaissance Technologies/Medallion Fund:
2019 paper, “Medallion Fund: The Ultimate Counterexample?” (I have not read much beyond the abstract, yet. I found it looking for a chart showing returns by year of Medallion Fund.) Covers 1988 to 2018.
Over those years, the S&P saw a negative percent change 8 times. 4 were single digit drops (90, 94, 15, 18) double digit drops (00-02, 08), one year (11) at 0.0%:
Medallion had one year with a negative net return*: 1989, its second year of existence; Taylor Swift’s year of birth.
Year S&P%/Medallion net%
89 27.25/-3.20
(Gross was still positive: 1.00%)
90 -6.56/58.24
94 -1.54/70.72
15 -0.73/36.01
18 -6.24/39.98
00 -10.14/98.48 (!!!)
01 -13.04/33.02
02 -23.37/25.82
08 -38.49/82.38 (!!!)
Separate from a hedge fund:
If one is heavily in the market, and can avoid getting wiped out during a recession, one stands to make a shit ton of money during the rebound.
At some point along the wealth curve, the performance of the market is almost, if not completely, decoupled from lifestyle.
At some point along the wealth curve, market downturns are little more than an opportunity to buy assets at deep discounts.
Either this market ain’t actually free or the theoretical underpinnings of Capitalism are dead wrong.
Take your pick, @Connor. Hemlock or arsenic for your worldview.
@Stormy Dragon:
As soon as it became clear that Zwitter Drumpf was going to be even more unhinged than Erster Drumpf, my wife and I moved most of our savings into a mix of money markets, TIPS, fixed-rate annuities, Treasury funds, etc. If we were overreacting, we’d miss out on some nice-but-not-necessary growth. If we weren’t, we’d dodge enormous losses.
The smart money so far is on “dodge enormous losses” — assuming the US can avoid complete system collapse. I’m not willing to go full Doomsday Prepper; I don’t have the skills for it.
@Kurtz:
You might find these interesting:
“Monthly variance”
“Yearly variance“
Donald J. Trump is creating a wonderful buying opportunity that can enrich all Americans, if they have the gumption to take it. He is making it easier to pull yourself up by your bootstraps by putting your bootstraps within reach
Some headlines from The National Review:
Americans Will Pay the Price for Reckless Tariffs
Pat Toomey Saw the Tariff Madness Coming
Vance Defends Trump Tariffs as Overdue Escape from ‘Globalist Pathway’ as Markets Plummet
Trump’s Tariffs Are a Historic Tax Hike
The answer is: 6, 5, 4 and 3.
The question is: List the percentage drop in the Russell, the NASDAQ, the S&P and the Dow.
@Matt Bernius: “I’m honestly dubious about how much Trump cares about the markets. They were not the source of his personal wealth and because there is so little insight into his personal finances, it’s unlikely they are currently a major aspect of his personal wealth portfolio.”
He’s got to be making many, many billions off of corruption given his situation.
@Kristina Stierholz:
I am fortunate in that I recalibrated my retirement investment assets just after the election, and so I will probably be able to withstand Trump’s ego-fueled ignorance attack on investment accounts.
Wall Street always worries about Democratic Party fiscal policies, and yet the evidence over the last 30-plus years shows that they should be worried a lot more about Republicans. One of the biggest institutional investors, Vanguard, estimates that over $16 Trillion in retirement fund assets as of 2024 invested in the stock market. Trump seems pleased with himself, he’s ignited a wildfire that is going to burn for a while. Wall Street seems down with it, very down.
@Kathy: “Hypothesis without any basis, just a feeling: how is this massive display of stupid economic insanity affecting crypto?”
Well, adding uncertainty and chaos to the ‘stable’ part of the economy has got to help crypto.
In the end, however, note that these people desperately want a government bailout.
@Michael Reynolds:
Oops, now it’s 7, 6, 5, 4.
Interesting statistic: apparently some 60% of the US adult population now have substantial exposure to investment markets.
iirc the percentage at the outset of the Great Depression it was about 10%
Though far more lost savings due to banking collapses and unemployment, the early-onset impact of wealth loss is going to be sharper.
Combine that with inflation, and little prospect of housing costs declining much, and budgetary problems DOGE is nowhere close to resolving, and you have a recipe for “stagflation”.
Welcome back to the 1970’s, folks.
Countdown to bond market crisis, anyone?
@JohnSF:
Right.
Companies used to fund pensions. Those pensions were replaced by investment accounts. Managers of said investment accounts get to make big bucks.
Axiom in the view of far too many Americans: Income and wealth is a proxy for societal value and intelligence. So to them, managing cash flow provides far more societal value than most other professions.
@Kurtz:
Depends on how long the US administration cleaves to “bugfuck nuts” as a policy.
The old saying I think was:
“The markets are quite capable of staying depressed longer than many investors can stay solvent”
At least this time round, not so many retail investors have bought on leveraged margins, compared to the 1920’s.
So they will be hurt by depressed wealth and returns, especially relative to inflation, but not wiped out.
Some hedge funds might be, but most are likely to be big enough, and hedged enough, survive also.
The interesting political question is: how far along may it be before the level and continuity of economic pain overcomes the Republican base inclination to deny reality at the altar of Donald, in sufficient numbers for the Republicans in Congress to lose fear of a MAGA primary and bridle the administration?
@Kurtz:
The problem of financialization.
Similar in UK, where the decline of “defined benefit” pensions has produced massive growth in tax-friendly ISA’s (Investment Savings Accounts).
otoh, imho, there is not an enormous amount of diffrence between institutional ISA fund managers and the old pension fund managers (which are still around, just not as dominant).
What has really changed the picture is the rise of “private wealth” funds which can tap the surplus of those with enough money to take some risk, which then use that for massively leveraged activity, which often ends up with fundamentally sound companies taken over, piled high with debt and debt-service charges, and then collapsing under the burden and sold of for a pittance for asset-strip.
While the fund investors walk away with handsome profits, and the fund partners/managers walk away with multi-millions.
@Michael Reynolds:
I asked my partner last night if she moved her* Dollars into Pounds. She said yes. Today we put a deposit down on a flat and should sign the lease tomorrow. I think I felt the door slam on my ass on the way out.
@JohnSF:
I think this kind of assumes that there isn’t some bad shit hiding out in the financial weeds. Musk pulled a scam to offload his twitter debt on to some dweebs. I couldn’t tell if the banks were able to do that too.
I have a suspicion that there are lots of overly complicated instruments floating around out there that were made on the assumption that the markets would stay good and the U.S. wouldn’t shit its pants. I don’t think anyone expected the U.S. to actually shit directly into the punch bowl while everyone watched.
The Money and the Guns thought they could harness the Jesus wing and ride those rubes to riches. The didn’t realize that the Jesus freaks found Trump instead. And now we’re all gonna pay.
@Beth:
As they say:
“It’s when the tide goes out you discover who has been swimming without trunks.”
If the markets fall enough, there will be damage on margin calls against speculative positions.
And some will go bust.
But the sheer volume of retail investment is likely to keep the whole ship from sinking as per 1929/30.
At a guess; bwdik?
The real pain is going to be the grinding effect of inflation and likely recession in the “real economy”, for as long an MAGA stupidity reigns in Washington.
The question is: can such pain lever the Republicans in Congress to curb Trump, or will the administration and the MAGA “true believers” in Congress to dial up the authoritarianism to 11 as their escape route from consequences.
“May you live in interesting times”: rather not, on the whole.
@JohnSF:
Fair enough, and probably right. Until the sheer weight of bullshit causes the retail investors to have to choose between their investments and their house. I’m pretty sure that if the U.S. government starts bailing out the rich like they did in 08 they’re not going to have a choice but to dial up the authoritarianism. They’re all fanatics after all.
I had a very nice discussion with a guy who had a thick east London accent today. I have a thick Southside accent. It was interesting to me that we both agreed that the French had the right idea with their chopping machine.
*I realized I missed this above. I said her money, because as it was rudely pointed out to me by her, I am functionally insolvent. I get to join a long line of women in my family that are wholly economically dependent on their partner. It never worked out for any of them because their partners were all mercurial assholes. She’s not, but she also doesn’t understand what she said to me and that I have zero power in this relationship. Not pleasant.
The markets have closed.
Today, Trump cost my net worth US $45,000.
Clearly, I have been liberated.
Who the f’k elected that baboon?
I was thinking about buying another Yamaha motorcycle this summer but certainly won’t be if the price jumps on account of these tariffs.
@Steven L. Taylor:
Your selfish positions on the interests of equity markets vs everyday workers are duly noted.
@Beth:
Last year I earned 4% of our household income, but K rejects any suggestion that it’s her money. Over the course of 45 years I’ve carried the ball, then she carried it, then I carried, it and now she’s carrying it. Now I’m getting back in. Some of what’s her work in the last few years was actually mine, but not much. Maybe I earned 8%.
Overall it’s probably roughly 50/50. We’re a tag team, and at this point a well-oiled machine. But that takes time, it doesn’t just immediately fall into place. I’m not pretending there was no stress. Many arguments – writers’ arguments, very verbal, both shouting in complete paragraphs.
@Connor:
Ah hah hah hah hah hah. Pretending to give a shit about working people. Fuck off you fraud.
@Liberal Capitalist:
I lost thrice as much, and I have a very defensive portfolio. But I believe in middle America. We must go through this because Democrats gave away our industrial base.
@Connor: You’re making the assumption that many tariff-approvers make — that somehow we’re better off with manufacturing jobs. But I’ll bet that 90% of elected Republicans haven’t worked a factory or manual labor job after college.
All those immigrants coming here – they’ll do the hard labor because it’s the way to get a foot in the door, but what they really want is what many of us have: A desk job where we enter our retirement years with most of our ligaments and tendons still functioning. Those are the jobs we excel in, and are going to lose by driving away educational and scientific investment.
@Connor: Really funny that you lost roughly $150,000, and you’re still on board with your cult leader. Most people would be hitting the brakes.
Now imagine you’re a person on Medicaid/Medicare/Social Security, paid into it your whole life, and suddenly…..it’s gone. Imagine if that was your entire life savings. I know empathy is hard for you Republicans, but just imagine……
I believe a while back you were “concerned” about the people who didn’t speak English in…..checks notes…..Florida. How’s that going for you?
@Connor:
Ronald Reagan was a Democrat!? I’m gobsmacked!
@Beth:
Shows what you guys know, huh? I have confidence. I knew Trump could do this. Easy peasy.
@Connor: So your position is that politicians forced owners of capital to offshore production?
@DrDaveT: Democrats forced all of those companies to move to China but only after they forced China to pay their workers almost nothing. (Ignore the Republicans passing tax cuts for those companies that moved.)
Tariffs are regressive taxes. They will increase costs for the working class. The wealthy class will lose a lot of money but proportionately less so they will still be OK.
I guess the theory is that there will eventually be some “good” jobs created. So first, this is all theory. Second, we know prices will increase for everyone. Companies may eat some costs initially but no one can eat 46% increases. Next, it wont be the US creating new jobs, it will be individual employers. Many will take a hit since they moved work to Mexico or Canada based upon USMCA. Many will lose money since on the advice of the Trump admin they moved work out of China to places like Vietnam.
So what we likely see is a globally slowing economy with corporation facing higher input costs and trying to hold down costs. Finally, they dont know how long the tariffs will last. In this environment they are expected to build new factories in the US.
Steve
@Connor: Your statement is a non sequitur.