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  • Trade, Debt, and De-Americanization

    From ltlee1@21:1/5 to All on Mon Apr 14 14:49:05 2025
    XPost: alt.politics.usa

    From WSJ, "Will the Last Investor to Leave America Please Turn Out the
    Lights" by James Macintosh

    "Trade, or rather President Trump’s attack on it, provided the basic
    reason to sell. His delay of the bizarrely calculated additional tariffs
    on countries other than China offered midweek relief, and Friday night’s exemption for iPhones and other electronics will offer further respite.
    But investors quickly went back to working out the damage from the
    tit-for-tat trade war across the Pacific. That is in addition to his
    baseline tariff of 10%, even on countries with which the U.S. runs a
    trade surplus.

    Stocks naturally fell as Wall Street strategists upped their probability
    of recession. ...

    Debt reared its head early in the week as hedge funds began to liquidate
    trades deep in the plumbing of the financial system. The unwinding of
    leveraged positions drove big swings in a usually benign corner of
    interest rates known as swap spreads. This led to heavy selling of
    Treasurys that drove up yields and threatened to force more selling.

    The prospect of a self-fulfilling spiral of selling put investors and regulators on edge as a 2020-style panic in the bond market suddenly
    appeared possible. Trump reversed course in time to prevent the worst.
    But investors are again aware of the danger of a near-trillion-dollar hedge-fund unwind. That in itself is a reason to reduce Treasury
    exposure, at least until hedge-fund positions are cleaned out.

    De-Americanization kicked in as investors watched the chaotic
    policymaking from the White House, but it wasn’t only about the U.S.
    losing its aura of economic competence. Far from strengthening as bond
    yields rose, the dollar has fallen sharply. On Friday, it reached its
    weakest level since 2022."

    ------------------
    Trade war is easy to win if and only when competitive gap is small and
    in the absence of financial system ecology depending on persistent
    borrowing by trade surplus nations.

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  • From A. Filip@21:1/5 to ltlee1@hotmail.com on Mon Apr 14 18:37:16 2025
    ltlee1@hotmail.com (ltlee1) wrote:
    From WSJ, "Will the Last Investor to Leave America Please Turn Out the Lights" by James Macintosh
    […]

    Soc.culture.china version:
    Will PRC fare _better than USA_ in consequences of Trump's "follies"?
    IMHO it is quite likely (especially long term) but it is *FAR* from
    being guaranteed.

    "Excessive victory certainty of terrible disasters the reason is."
    [ Google translated ]

    https://en.wikiquote.org/wiki/Julius_Caesar
    "Alea iacta est." [ The die is cast. ]
    -- Gaius Julius Caesar (10 January, 49 BC)

    --
    A. Filip
    | I used to think that the brain was the most wonderful organ in my
    | body. Then I realized who was telling me this. (Emo Phillips)

    --- SoupGate-Win32 v1.05
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  • From ltlee1@21:1/5 to A. Philip on Tue Apr 15 11:55:16 2025
    XPost: alt.politics.usa

    A. Philip wrote

    Will PRC fare _better than USA_ in consequences of Trump's "follies"?
    IMHO it is quite likely (especially long term) but it is *FAR* from
    being guaranteed.

    Have little idea on what constitute Chinese "fare_better." And of course nothing is really "guaranteed."

    The valid question left is to look from the opposite side: To what
    degree would Trump succeed?

    In that regard, I would say "Not much."

    1. US trade deficit is structural with China as well as all other
    nations he has targeted. Very unlikely to disappear simply by Trump's
    say so without American people's full support on both mean and end.

    2. Trump is track record does not look good. He started many thing
    during his first term. The record is clear.

    "When Mr. Trump left Washington in January 2021, many key goals remained
    unmet. There was no “big, beautiful wall” on the U.S. southern border,
    and the check from the Mexicans that was supposed to pay for everything
    was still lost in the mail. North Korea kept its nukes, Iran remained
    unbowed, Russia stayed surly, and American forces were still in
    Afghanistan." (Trump Throws Another Hail Mary by Walter Russell Mead)

    3. 孙子曰："多算胜，少算不胜，而况于无算乎。" In short, more thorough planning would bring
    more success, less thorough planning would bring less success. Given his changing courses, and his team pointing to different objectives, it is
    clear his planning, a Hail Mary per Walter Mead, is hardly sufficient
    for such an great undertaking.

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