If there is the ability to have sanctions, to freeze assets, why not this then? If there's no law specifically against it. — ssu

14th amendment precludes it. It puts into question the validity of my claim compared to your claim either because of the identity of the holder or the type of instrument. But also, it would breach the terms of the issuance itself and therefore result in a contractual breach.

Are you suggesting he's manning his own boat? Think about all the areas in which he is acting. I think he's one of a committee, or more likely the figurehead, allowed his tantrums. Otherwise it's all his show, and I do not think he is remotely near that able. — tim wood

That’s exactly what I and many economists who know Trump’s advisors are suggesting. There are only a couple of issues Trump is interested in, and the rest he leaves up to others, like when he gave Jared Kushner carte blanche to do what he wanted in the Middle East. The one issue he has obsessed about since the 1980’s is how the rest of the world has cheated and taken advantage of America. On this point he has been extremely consistent, and it is on this issue that he is manning his own boat. That Rose Garden tariff chart reflects his own discombobulated thinking about how to get revenge upon the world’s ‘unfair’ treatment of the U.S., not that of Navarro or any of his other advisors. He likes to run his own show, so everyone else can coming crawling to him as the great dealmaker and shakedown artist.

I think he's one of a committee, or more likely the figurehead, allowed his tantrums. Otherwise it's all his show, and I do not think he is remotely near that able. — tim wood

When you read books about his first administration, they portray a very clear picture, which is repeated again and again.

First of all, every US administration looks to those inside it as chaotic, perhaps with the exception of the Eisenhower administration. This is because there is so much decision making going through the White House all the time. Yet some administration are more chaotic than others. And Trump belongs to the "more chaotic" ones. This is simply because of the man himself. To assume that Trump is a figurehead, then the question is whose figurehead is he? What is the real committee here? Trump holds power in the GOP. At least still.

14th amendment precludes it. It puts into question the validity of my claim compared to your claim either because of the identity of the holder or the type of instrument. But also, it would breach the terms of the issuance itself and therefore result in a contractual breach. — Benkei

Thank's! Learn something new every day.

And naturally it would have a devastating effect even without the legal breaches. Trust in the US would be shaken, even if I'm of the opinion that the US could genuinely default some day and the present monetary system would be abandoned. Then the story about the trustworthiness would be change that US is credible, because it defaults only in few hundred years. And the lenders would come again, after licking their wounds. And if we call the going off the gold standard what it really was, a default, then the US does these defaults only in +50 years or so.

Oh good grief. He's saying that investors are spooked and we might have a recession — frank

Is that how you interpreted this?

… I was looking for guidance about inflation and instead found the telltale signs of an incipient financial crisis….
There are growing signs that we’re at risk of a tariff-induced financial crisis. There are multiple indicators of that risk…

So even though stock prices are dominating the headlines, the real, scary action is in the bond market. The nightmare scenario, which we saw play out in 2008, is that falling asset prices cause a scramble for cash, which leads to fire sales that drive prices even lower, and the whole system implodes. Suddenly, that scenario doesn’t look impossible.

Maybe we’ll steer away from the edge of the abyss. But Trumponomics has already proved worse than even its harshest critics imagined, and the worst may be yet to come.

Seems to me financial crisis and recession are two different things.

So even though stock prices are dominating the headlines, the real, scary action is in the bond market. The nightmare scenario, which we saw play out in 2008, is that falling asset prices cause a scramble for cash, which leads to fire sales that drive prices even lower, and the whole system implodes. Suddenly, that scenario doesn’t look impossible.

And that's exactly what happened today isn't it. Hedge funds selling their treasury bonds. It's absolutely wild. The VIX is up to 2008ish levels (50ish today vs 60sh peak in 2008).

Do you believe that Victor Orban is a dictator? How about Putin? If so, tell me in detail what qualifies these men as autocratic rulers? What strategies and tactics did they use to gradually change a system with checks and balances into an autocracy? What signs would you look for in Trump to convince you that he thinks in similar ways about power as Orban and Putin?

Is it your theory that since Trump “thinks in similar ways about power” to Orban and Putin—something that cannot be proven—he is a dictator like Orban and Putin? For me that doesn’t follow.

Trump cannot become a dictator. All the checks and balances are working, and have continuously been invoked against his authority. Two impeachments, uncountable lawsuits, and so on. The only reason someone would seek to go around these checks, and choose assassination to depose the chosen representative of a majority of Americans, is because the checks and balances have checked them instead. Just take the knee.

And that's exactly what happened today isn't it. Hedge funds delevered by selling their treasury bonds. It's absolutely wild. — fdrake

The safety trade is being out of the dollar. Gold has been a great asset of safety.

And people are buying necessities before the prices start rising.

This user has been deleted and all their posts removed.

Yes liquidity, I hadn’t got as far as that. I’m not an economist.

This user has been deleted and all their posts removed.

So even though stock prices are dominating the headlines, the real, scary action is in the bond market. The nightmare scenario, which we saw play out in 2008, is that falling asset prices cause a scramble for cash, which leads to fire sales that drive prices even lower, and the whole system implodes. Suddenly, that scenario doesn’t look impossible.

In 2008 the entire financial sector appeared to be in a state of collapse, so the Chairman of the Fed and the Secretary of the Treasury went to Congress to ask for money. Krugman knows very well that markets couldn't self-stabilize in 2008, the way they usually do.

Krugman is not saying we're back to 2008. He's saying he's concerned. If you want to go further and say we actually are experiencing a crisis of that magnitude, you'll have to explain why you think the markets can't recover on their own.

↪Christoffer Good questions. Ciceronianus@Hanover@Maw any view on this as US based lawyers? Because I don't. — Benkei

lol I am not a lawyer

During a recent speech at the American Bankers Association, Treasury Secretary Scott Bessent said this:

"For the next four years, the Trump agenda is focused on Main Street. It's Main Street's turn. It's Main Street's turn to hire workers. It's Main Street's turn to drive investment. And it's Main Street's turn to restore the American dream."

"For too long, financial policy has served large financial institutions at the expense of smaller ones. No more. No more. This administration aims to give all banks the chance to succeed, whether it's JP Morgan or your local mortgage and loan."

"It aims to get capital to Americans who need it by getting bureaucracy out of the way. For the last four decades, basically since I began my career in Wall Street, Wall Street has grown wealthier than ever before, and it can continue to grow and do well.

(I would post the video, but these kinds of facts are now verboten).

Given that wealth inequality has been on the lips of progressives for who knows how long, if this plan bears fruit for the working class, will it change some minds here? Or is it anti-Trump all the way down?

Anyway @Benkei, I appreciate your post on the origins and likely outcomes of Trump's Tariff policy. The genesis of his polices stemming from the misguided perception that America is "losing" strikes me as far more accurate and aligned with Trump's visio mundi than alternative hypothesis, such as crashing the stock market so that the bourgeoisie can snatch up stock for cheap, or so that corporations will become obsequious to Trump, strike me as conspiratorial and far beyond competency of the upper class or the Trump administration.

Given that wealth inequality has been on the lips of progressives for who knows how long, if this plan bears fruit for the working class, will it change some minds here? Or is it anti-Trump all the way down? — NOS4A2

It's going to take a while for people to realize that Trump's tariffs actually have the potential to help Main St. But NOS, you know he wants to be a king. It's a time honored strategy of dictators to give the people what they want as they're taking over. Are you going to be pro-Trump all the way down?

Apologies for misremembering!

During a recent speech at the American Bankers Association, Treasury Secretary Scott Bessent said this:

“For the next four years, the Trump agenda is focused on Main Street. It's Main Street's turn. It's Main Street's turn to hire workers. It's Main Street's turn to drive investment. And it's Main Street's turn to restore the American dream." — NOS4A2

And yesterday he told Trump to given clear objectives to investors about his ultimate intentions for the new tariffs or stock markets will keep spiralling down. You notice that it is Trump’s intentions, not Bessent’s, that are behind the current tariff policy. Economists who know Bessent well say that his approach to tariffs is substantially different than Trump’s, and he is frantically trying to avert an economic and political disaster by getting Trump to moderate his approach, and at the very least, to explain its endgoals coherently.

It's Main Street's turn to drive investment. — Bessent

He's declaring war on Wall St. He's saying neoliberalism is over.

Krugman is not saying we're back to 2008. He's saying he's concerned. If you want to go further and say we actually are experiencing a crisis of that magnitude, you'll have to explain why you think the markets can't recover on their own — frank

It’s not just Krugman who’s concerned. And this is why markets may not be able to recover on their own:

President Donald Trump’s “Liberation Day” tariffs are hiking up the cost of American consumer goods and roiling the markets. The word roiling undersells what is happening, though. Investors are dumping American government bonds, normally the safest of safe harbors; the plunge in bond prices is causing knock-on effects in market after market. A financial crisis—today or in the coming weeks—is a tangible possibility.
In the event of such a catastrophe, the Federal Reserve would step in with trillions of dollars of liquidity, buying up the assets that traders are dumping and acting as a purchaser of last resort. In time, Congress might try to help support the economy too, by cutting taxes or sending out checks. But such accommodative policies would pump up consumer prices, already rising because of the tariffs. And they would do nothing to change the fundamental fact driving countless panicked and chaotic trades: Investors do not trust the United States and its political system anymore.
Annie Lowrey, Atlantic Monthly

Soybeans from Trump country will go up in price in the EU.

EU targets Trump’s red states with tariffs on US trucks, cigarettes and ice cream
^{— Giovanna Coi, Paroma Soni, Camille Gijs · POLITICO · Apr 9, 2025}

Targeted towards Trump voters. Will it make a difference?


On a separate note, I don't think Trump cares so much about a topic or cause, as he cares about taking the task + asserting himself + stomping someone or making big waves + getting credits applause cheers. And he'll roll with it, tossing weight around as he sees fit. Hostile towards whoever has criticized him, regardless of reason. If so, then there's a chance he could be won over to whatever cause (well, not any cause). I suppose there could be something more meaningful to him. His relationship with Putin is odd, if not suspicious. (end unsolicited assessment :smile:)

Tariffs are going to make American government bonds less attractive. That's a long range factor. I'm a day trader and I'm watching the futures markets as we speak, and yes, there's low liquidity. It's so low I'm not touching it, which is the kind of sentiment that drives it even lower. Still, there was just a surge as stock market traders decided there were deals down in the valley that formed yesterday.

There will be FOMC meeting minutes at 2:00. Should be worth listening to.

Still, there was just a surge as stock market traders decided there were deals down in the valley that formed yesterday. — frank

The surge was because of the 90-day pause in tariffs.

I think he realized he fucked up, and that his advisor is even more stupid than he is. Maybe someone told him that the source of reasoning for why to install the tariffs comes from a crackpot who invented an expert for his book to look factual. That all of this is based on that non-existing person. And now that he knows this, he tries to back out in a way that doesn't paint him as a damn moron (more than usual).

:rofl: These fucking people.

Exactly.

Trump finally blinked.

But let's remember that now Trump has that trade war with China and still he has those tariffs with everybody at 10%. That 10% + China trade war will have an effect on the US economy.

It's not going to be the absolute disaster of a lifetime. Just your normal Trump disaster. :wink:

The surge was because of the 90-day pause in tariffs. — Christoffer

Yea, I figured that out eventually. :lol:

But let's remember that now Trump has that trade war with China and still he has those tariffs with everybody at 10%. That 10% + China trade war will have an effect on the US economy. — ssu

As long as his followers suffer economically, but the economy doesn't crash, that's all good. The only way to get rid of him in a normal democracy is to hope fewer supports him, and with how bad people have it economically, and that his followers are mostly the people who are close to the bottom, it doesn't take much to make them suffer from their own vote.

It is beyond obvious that Trump found the ultimate grift and power trip. He is the greatest market manipulator of all time. There is a 0% chance that he is not profiting enormously from these massive market moves that he is engineering. 0%.

It is all a grift and power trip. Hilarious that Trumpys are falling over themselves trying to rationalize his absurd "plans".

As long as his followers suffer economically — Christoffer

That is completely guaranteed. A lot of these people are truly living precariously. Trump simultaneously, by imperial decree:
* Threw a wrecking ball at the US and global economy
* Instituted severe austerity onto what little safety net we have
* Guaranteed a dramatic resurgence of inflation.
* Threw hundreds of thousands of workers out on their asses.

A lot of them are on the margins, with a poor paying job, or not job at all. A lot of them are small business owners that struggle even during "good" times. Any one of these three events would push many over the edge. All four, at the same time? They will suffer enormously for this.

The easiest thing to do would be to devalue their own currencies relative to the dollar. Trump has already issued a warning to them not to do that. There aren't any countries whose trade with the US is large enough to make that option reasonable though. — frank

I'm not sure how this relates to what I said. Devaluing a currency doesn't make it more interesting to use as a reserve currency; stability does.

Isnt the fear at the moment that the markets are headed for a liquidity crisis, which happened during the 2008 financial crisis? In such a crisis, panicked investors sell everything, even bonds, so instead of what usually happens during a downturn, that investors turn to bonds as a safe haven, lowering their yields, they are sold along with everything else and their yield jumps. In 2008 the Fed has to step in and provide liquidity. — Joshs

The Fed had to step in to provide liquidity because the banks capital and liquidity ratios tanked due to their cross derivatives exposures of worthless MBS on each other in a market where interbank trust had totally evaporated. Secured lending (under GMRAs for instance) was the only way to get a loan for a while. US treasuries, along with other high rated government bonds were still considered a safe haven in 2008. Yields dropped because most investors were prepared to accept even a negative yield as long as they knew for certain their money was safe. Which is precisely why AAA-rated bonds had negative yield at some point, that's how much investors wanted them!

During a recent speech at the American Bankers Association, Treasury Secretary Scott Bessent said this:

"For the next four years, the Trump agenda is focused on Main Street. It's Main Street's turn. It's Main Street's turn to hire workers. It's Main Street's turn to drive investment. And it's Main Street's turn to restore the American dream."

"For too long, financial policy has served large financial institutions at the expense of smaller ones. No more. No more. This administration aims to give all banks the chance to succeed, whether it's JP Morgan or your local mortgage and loan."

"It aims to get capital to Americans who need it by getting bureaucracy out of the way. For the last four decades, basically since I began my career in Wall Street, Wall Street has grown wealthier than ever before, and it can continue to grow and do well.

(I would post the video, but these kinds of facts are now verboten).

Given that wealth inequality has been on the lips of progressives for who knows how long, if this plan bears fruit for the working class, will it change some minds here? Or is it anti-Trump all the way down? — NOS4A2

You are not making any philosophical, political or economic point. Instead, you're just stirring the pot. Would be nice if you'd actually made an effort.

I just shared an extensive economic explanation how this doesn't help any Americans any time soon. If you want to help Main Street, there's myriad ways you can do this without being a communist about it or, in Trump's case, an idiot. Raising tariffs isn't going to help anyone and is more likely to hurt poorer people disproportionally because, well, they're poor and have no budget to absorb price hikes.

Meanwhile, companies in the US are faced with an immediate increase in costs for resources and machinery produced outside of the US. Shareholders and company owners, especially in the US, will just fire people to absorb the increase in cost and expect the remainder to pick up the slack. So you'll see a surge in unemployment, lower tax income through income tax, etc.

That the industrial capacity of the US has gone down is not only the consequence of its unique position having had a trade deficit for 40 years but also policy, where even critical industries or part of the vertical integration for that, has been outsourced (much like most of Western Europe as well). The idea of correcting this through tariffs without dealing with capital flows is idiotic, more so when the expectations is to reverse a process that took decades.

Bessent according to the Guardian:

“This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded. They have shown themselves to the world to be the bad actors, and we are willing to cooperate with our allies and with our trading partners who did not retaliate. It wasn’t a hard message, don’t retaliate, things will turn out well.”

You hit someone in the face, you tell them not to hit back but they do any way because they won't be bullied and then they're the bad actor. Yeah, that makes total sense. And what allies exactly? He shafted Europe with Ukraine already so I'm not sure who he's talking about.

The best part, he's now negotiating from a position of weakness because he admits needing his allies and trade partners. What an insane loser.

EDIT: also I forget but obviously the EU raised retaliatory tariffs as well. So when do we get the 100% tariff?

What they really got scared was the treasury selloff.

(Barrons, 9th April 2025) The selloff in U.S. government bonds gathered speed on Wednesday, with the 30-year Treasury yield set to rise the most in more than 40 years as a paradigm shift in trade policy upends the bond market.

Yields on the 30-year government debt were up 0.144 percentage point to 4.858% on Wednesday morning, putting them on pace to gain 0.467 point over a three-day period. If the market closes at current levels, it would be the largest three-day gain since January 1982.

The Trump administration might not care about the stock market, but the government does care a lot of the interest on the US debt!

EDIT: also I forget but obviously the EU raised retaliatory tariffs as well. So when do we get the 100% tariff? — Benkei

That isn't yet sure. And let's remember that the EU response was for the tariffs raised before Trump's "Liberation Day".

Eu moves a bit slowly.