What To Do Now — And What Might Happen A Week From Sunday April 10, 2025 Dave P.: “I have a friend who manages a small portfolio of stocks for me. A recently sent me a market commentary, understandably focused on the tariff issue. My response: My own thinking is that the tariffs, though significant per se, are just a sliver of the angst the market is now processing. They are just one weapon of potential self-harm for America, its people, and its corporations, and the valuation of those corporations. If Trump tomorrow declares victory, says every country in the world has kowtowed, they all have offered “great deals” which he graciously has accepted, so consider Liberation Day as being on rollback, the market will celebrate temporarily.* But it soon will reprocess the bigger message, that the Administration’s malevolence, mendacity, fecklessness, recklessness in matters of security as well as finance, incompetence, blindness, distrust of science, cruelty, pathological absence of empathy, disloyalty to friends, cozying up to tyrants, etc., etc. etc., are a recipe for catastrophes that to most remain unimaginable. *Someday, likely in the near future, the stock market will have a very large gain. Surely we don’t want to miss that! And that gain should signal “all clear,” right? Well, not exactly. If we look at the 20 best one-day gains in the DJIA, fully 40% of them, 8 separate days, occurred after the October 28, 1929 crash, and before the ultimate bear market low, 89% lower than pre-crash, in July, 1932. Had you bought following any of those big up days, you would have lost at least 16% to the bottom (from whence it would take another 22 years to recoup the pre-crash level). Excluding that (16)% day, buying at the close of any of those other 7 big up days would have led to losses of (29)-(84)%. Lest you think these archaic examples are long-bygone, two of the market’s 7 best single days occurred in October, 2008, following the commencement of the bear market foreshadowed by the September Lehman Brothers bankruptcy. The ultimate declines from each of those closing levels was (29)-(31)% to the March 6, 2009 closing low. “I sent that Monday.” → Two days later — yesterday — we got that “very large gain.” Far from breathing a sigh of relief, I’d take yesterday’s market leap as an opportunity to sell some of your holdings . . . or, if they’d be subject to large capital gains taxes, buy some long-term puts like the ones I suggested last month. That’s what I’d do now. (Late yesterday, I bought more puts.) Of course, I’d love Dave’s caution — and my own — to prove unwarranted. Yet it‘s very hard to see how this ends well In the best-case scenario, where Trump gets countries to lower their tariffs, that will be nice and allow him to declare victory. (Europe can “slash” its from 1.7% tariff to zero, but can he get them to lower it below zero?) But even then, so much damage has been done. In a few short weeks, he has transformed America from a rock of stability into an unpredictable, unreliable, flailing bully, whose leader says — in public! on camera! — that countries are “coming to kiss [his] ass.” Publicly humiliating people — or nations — has a strange way of making them hate you. (Obama’s mocking Trump at the 2011 Correspondents’ dinner may have persuaded him to run; Hillary’s “basket of deplorables” remark five years later may have cost her the election.) Having most of the world hate you — and distrust you — is probably not a great long-term strategy for success. Putin and Xi are thrilled. The stock market — and bond market — not so much. And of course the idea that we have 50 or 100 million Americans available to replace the labor of the 50 or 100 million foreign workers who sew our clothes and assemble our iPhones, make our umbrellas, toys, and Christmas tree ornaments — and make the merchandise Trump sells his followers — is just ridiculous. Our work force is only 170 million, of whom 8 million are unemployed. And Trump plans to deport millions of workers who pick our fruit, trim our hedges, build our homes, and care for our elderly, which will further shrink the pool available to do the work the Chinese and Vietnamese (and the penguins he is tariffing) currently do for us. How we even get through the next 19 months to the mid-terms is not clear . . . let alone to 2028. And does anyone doubt that he aspires to the models of strong men like Putin and Xi who rule for life? Which brings me to what one guy thinks will happen April 20. I doubt it will come that fast if it comes at all. Maybe in May or June or July?) But: a) It’s an interesting read. b) The more people aware of this fantastical scenario, the less likely it is to happen. c) It’s happened lots of other places. (Have I ever mentioned the book that Trump, famously a non-reader, long kept by his bedside?) So please read this: On April 20th, 2025, the United States may Cross the Point of No Return
Oh Boy, Oh Boy! Listen Or Watch April 8, 2025 Last night’s Lawrence O’Donnell, if you missed it, was a home run. Here is the first segment, which seems to be unrestricted. To watch the full episode, you need to jump through a hoop or two . . . but can listen to it all without commercials here. It seems Musk may actually be doing something good, pressing Trump for free trade, not tariffs. So far, that’s been in private. But look what his brother Kimbal Musk, a Tesla and SpaceX board member, posted: Who would have thought that trump was actually the most high tax president in generations? Through his tariff strategy, Trump has implemented a structural, permanent tax on the American consumer. Even if he is successful in bringing jobs on shore through the tariff tax, prices will remain high and the tax on consumption will remain in the form of higher prices because we are simply not as good at making all things. A tax on consumption also means less consumption. Which means fewer jobs. Should turn leads to less consumption. Then even fewer jobs. America has incredible strengths. We should play to those strengths and not be forced to play to our weaknesses. Same with the rest of the world. So Peter Navarro (recently released from prison and again a key advisor to the convicted felon in the Oval office) may not win the tariff policy battle after all. He bases a lot of his trade theory on the work of economist Ron Vara — just read his book and you’ll see — but it turns out, as Rachel Maddow explains*, economist Ron Vara does not exist. He is just an anagram for Navarro. So the expert on whom he bases his world view that currently threatens global depression is . . . himself. Maybe economic sanity will prevail? One can hope, anyway. *And yes, of course, Rachel is almost always, a must-watch, too.
Fareed Makes Everything Clear April 6, 2025 Chris Murph says Trump’s tariffs are another tool for staying in power forever. Watch (2 minutes). I think he’s right but note that Trump’s tariff-philia pre-dates his megalomania. One of the few things he’s been consistent about throughout his life, along with his discomfort with non-whites, be they tenants or generals — is tariffs. Not least because he remembers reading (hearing?) about a time when there was no income tax, just tariffs. Fareed Zakaria explains: The real economic story of the past three decades is that the United States has surged ahead of all its major competitors. In 2008, the U.S. economy was about the same size as the euro zone’s; now, it is nearly twice the size. In 1990, average U.S. wages were about 20 percent greater than the overall average in the advanced industrial world; they are now about 40 percent higher. In 1995, a Japanese person was 50 percent richer than an American in terms of GDP per capita; today, an American is about 150 percent richer than a Japanese person. In fact, the poorest American state, Mississippi, has a higher per capita GDP than Britain, France or Japan. And yet Trump has been convinced that through all these decades, America is actually in steep decline. . . . But while America is the world’s dominant power, it is not so strong that it can act this irrationally. The world economy has grown to a size and scale that it will find ways around American protectionism, which is now among the world’s most egregious. Contrary to Trump’s stubborn beliefs, the United States was in fact already somewhat protectionist, with tariff and nontariff trade barriers greater than in 68 other countries. With these new tariffs, American protectionism is off the charts, with higher rates than the Smoot-Hawley ones of 1930 that exacerbated the Great Depression. In the short run, everyone will suffer. But in the medium to long run, countries will start trading around the United States. China will clearly be the big winner in this new world economy because it will position itself as the new center of trade. Add to this Trump’s hostility toward America’s closest allies, and you will likely see Europe, Canada and even some of America’s Asian allies find a way to work with China. Trump’s nostalgic worldview is rooted even further back than the 1960s. He looks fondly on the late 19th century, when, as he described this week, the United States had only tariffs and no income tax, and America was stronger economically than it has ever been compared with the rest of the world. This history is nonsense. In 1900, the United States accounted for about 16 percent of the global economy by one measure; it is now about 26 percent of it. Americans’ standards of living and health are much higher today. But in acting out on his nostalgic fantasy, Trump might well end up dragging America back to what it was then: a poorer country, dominated by oligarchs and corruption, content to swagger around its backyard and bully its neighbors but marginal to the great currents of global economics and politics. Is this what his fans voted for? He promised to lower prices on day one. Who knew he meant stock prices? At least someone’s doing well: Trump Family’s Cash Registers Ring as Financial Meltdown Plays Out. Tony S.: “The New York City protest was huge. It stretched nearly 40 blocks. The Times should have led with it. Instead, there was a photo below the fold, with the story — Mass Protests Across the Country Show Resistance to Trump — on page A18.” Kristina M.: “I saw these as I was scrolling through photos from various cities. The first is from a member of a group called Dentists for Democracy: Fight Truth Decay – No more lies or democracy dies. “And this one: They’re eating the checks! They’re eating the balances! “And for Youngblood fans, this one . . . . . . which can be sung while marching.”
Bob’s Sandwich / So Awful, Even Introverts Are Here April 5, 2025April 5, 2025 Condensed from the Winnipeg Free Press: Chaos follows Trump’s ‘Liberation Day’ . . . Trump claims that the U.S. is being raped and pillaged — his words — by foreign nations, that Americans were subsidizing economies all over the world, because Americans buy more foreign products than foreign nations buy American. But there’s a clear problem with that analysis. A trade deficit is not a debt or a subsidy. Let’s say you want a good sandwich. Bob can make it better or more cheaply or more conveniently than you can. You pay Bob $5. Bob hands you your sandwich. Yes, Bob gets your money, but you get the sandwich you wanted at the price you were willing to pay. You arguably have a $5 trade deficit with Bob, because Bob didn’t buy anything from you. Donald Trump would argue that you’re propping Bob up with a $5 subsidy. But you didn’t subsidize Bob. Bob did not steal anything from you. You didn’t give Bob a gift — you chose to buy his sandwich for your own reasons. Much the way Americans have chosen to buy products from Canada or any other nation — because the value or quality was worth the money. Trump has decided to add a tariff, a tax on Bob’s sandwiches. A host of economists have suggested what’s likely to come next — significant inflation for American consumers, chaos in the global supply chain, and, most likely, layoffs and business closures. Stock markets are already delivering their verdicts. The irony is that, as president, Trump’s ability to levy tariffs is tangential at best — he has had to manufacture emergencies to justify his actions. And there’s been a gross failure by the legislative branch in the United States to rein him in and represent the interests of their own constituents. The real question now is whether anyone in America will stand up to him. The damage to Canada’s relationship is obvious and will be long-lasting — one can only imagine what that damage will be to the reputation of the U.S. globally. The damage to America — and Americans — may be incalculable. Which is why so many Americans joined more than 1,200 protests throughout the country yesterday, many carrying home-made signs like this one: Mine said: NATO NOT PUTIN on the front and . . . . . . on the back. There were lots about Social Security and Medicare and Veterans and Fascists and . . . LEASH YOUR DOGE One of my favorites summed it up: WAY TOO MUCH FOR ONE SIGN Inflation rising, recession looming, stocks plunging, measles spreading, medical research slashed . . . and tariffs slapped on islands from whom we import nothing (including the one with only penguins) . . . but not on Russia (from whom we imported $3.27 billion worth of goods last year). Michael K.: “I think of you every time I see Scott Bessent interviewed in this debacle. You’re not still a fan, are you?” → I’ve read that he’s trying to quit and move over to the Fed. I wish he had been strong enough to prevent — or denounce — this insanity. He’s on Meet the Press this morning and I can’t say I have high hopes.
Ah, Liberation Day! Things Not To Sell April 4, 2025April 4, 2025 We’ve been under Vietnam’s thumb for so long. It’s about time we stood up for ourselves and made our own sneakers. Which will give the laid-off cancer researchers something to do. Drew W.: “The thing about people with his brand of personality disorder is that it can be really hard to tell when he’s lying, when he’s come to believe his lies, when he’s psychotic, or when he’s just an idiot.” Bob F.: “The tariff rates were calculated based on the trade deficit? Trade deficit divided by trade volume? This is crazy! This has to be worse than most people could have envisioned.” Kevin R.: “Well, now the economists and bankers know what the scientists and doctors felt like when he told everyone to inject bleach to ward off COVID.” Thomas Friedman: Trump Just Bet the Farm — our farm. . . . If Trump turns out to be right — that we’ll still enjoy the economic benefits and stability we’ve had for nearly a century even if America suddenly shifts from a benign hegemon to a predator, from the world’s most important proponent of free trade to a global tariffing giant, from the protector of the European Union to telling Europe it’s on its own and from a defender of science to a country that forces out a top vaccine specialist like Dr. Peter Marks for refusing to go along with quack medicine — I will stand corrected. But if Trump turns out to be wrong, he will have sown the wind, and we as a nation will reap the whirlwind. But so, too, will the rest of the world. And I can tell you, the world is worried. When I was in China last week, more than a few people asked me if Trump was launching a “cultural revolution” the way that Mao did. Mao’s lasted 10 years — from 1966 to 1976 — and it wrecked the whole economy after he instructed his party’s youth to destroy the bureaucrats that he thought were opposing him. If the Republican Congress wants to save the country and the world, it had better find its spine really fast. Putin and Xi are winning. Big time. Tomorrow, April 5, will be the single biggest day of protests since Trump retook office, and if you haven’t found a Hands Off! event to be part of, you can click here to join one near you. THINGS NOT TO SELL A couple of weeks ago, I suggested buying puts on the broad market indexes — the Dow (DIA) or the S&P (SPY) or NASDAQ (QQQ). I hope they expire worthless because — somehow, miraculously — this ends well. But I fear they may grow ever more valuable. Most of my nutty speculations are getting killed, but, for now, at least, my two least nutty and speculative, CHRB and BKUTK, remain strong (the former, because it promises to pay 53 cents a quarter until August of next year when it will be redeemed at $25 . . . though in this crazy world, who knows? . . . the latter, because it is a very conservatively run community bank with a loyal customer and investor base selling for 7 times earnings and less than half its book value). As to the rest (or at least the ones that come to mind) . . . I haven’t sold my CNF, because its business is in China, which may do relatively better than the U.S. in the years to come, if and as they come to be seen as the more stable, reliable trading partner — and sells at less than 3 times earnings. (In fact, a long-standing order I had in to buy yet a little more at 71 cents “good til canceled” was executed this morning — with money I could truly afford to lose.) I haven’t sold my PRKR, because none of what’s going on should affect the outcome of its several patent-infringement claims. So it remains as speculative as ever — heads it’s a quintuple or ten-tuple, tails it’s zero. Or my ANIX (if its cancer treatments prove effective — however long that shot may be — it will surely be worth billions, not today’s $80 million) or my OPRT or SQNS or UNIT or, yes, even my by-now-longest-of-long shots BOREF (not least because no brokerage firm I know of currently accepts orders for it). Needless to say, when things look really bleak and people are panicking, it’s a better time to buy than to sell. And today may be the bottom. But I can see “Dow 26,000” just as easily as a snap back to good times. I hope I’m wrong!
Trade Wars And Real War April 3, 2025 Nobel-prize winning economist Paul Krugman: Trump Goes Crazy on Trade The EU, like the United States, has generally low tariffs; the average tariff it charges on US goods is less than 3 percent. So where does [Trump’s] 39 percent number come from? I have no idea. Many people speculated that Trump would count value-added taxes as tariffs, even though they aren’t — European producers selling to the EU market pay the same VAT as US producers, so it doesn’t discriminate and therefore isn’t protectionist. But even if you get that wrong, EU VAT rates are in the vicinity of 20 percent, so you still can’t get anywhere close to 39 percent. . . . [H]aving once claimed that Europe charges tariffs more than 10 times as high as reality, Trump will never drop that claim. I don’t know how many people noticed, but he’s still claiming that we’re subsidizing Canada by $200 billion a year. Aside from the basic mistake of claiming that a Canadian trade surplus means that we’re somehow subsidizing Canada, he’s inflating the actual trade surplus by a factor of three. Many, many people have pointed out the error, but Trump is sticking with it, the same way Musk is sticking with the millions of dead Social Security beneficiaries thing. If you had any hopes that Trump would step back from the brink, this announcement, between the very high tariff rates and the complete falsehoods about what other countries do, should kill them. It’s one thing to want to bring critical semiconductor manufacturing back to America (especially now that we have no allies) — that was called Biden’s bi-partisan CHIPs Act. It’s quite another to start a global trade war that makes everybody hate us and could set off a global recession or worse. (And are there really 100 million Americans looking for work making t-shirts, sneakers, and all the other low-wage stuff we import? Aren’t we in the midst of deporting the few who might?) And then there’s Iran — and Greenland. Malcolm Nance thinks we’re going to war. If you thought things were bad in the American national security sphere in the last 48 hours, be prepared for another dramatic shift in US policy that will affect every one of you reading this. Apparently, the Trump regime is preparing for two major blows to US foreign policy. They are making it clear they intend to invade and seize Greenland and they are also silently preparing to attack Iran with strategic bombers. . . . He sees oil “quite possibly topping the $150 a barrel mark.” “Worse, is that the Iranian people who have been desperate to break off the chains of the regime and embrace democracy would likely see an American Israeli attack as a provocation. At attack would rally around the regime and set back a decade’s work fostering democracy.” Let’s hope Nance is wrong. Or that it all somehow works out well. When has a Trump enterprise ever failed?
Give It Up For Cory! April 2, 2025 I’m sure you know all about it by now, but here is the interview Senator Booker gave after his record-breaking, heroic, historic 25+ hour speech. How he was still coherent, I can’t imagine. This is the sort of extra mile (and then some!) we are now all called upon to go . . . which is why there are now more than 1,000 demonstrations planned for April 5, and why I — who almost never march or demonstrate — will be at one of them. Click here to choose yours! Bring friends! Text from friends who have already sold their New York home and moved to Canada: We’ve heard rumblings about iPhones being searched with potentially negative consequences. I now have first-hand knowledge of such an incident. We just had dinner with our upstairs neighbors. Wonderful people. A colleague of the wife, a 60-year-old White Montreal Physician was headed to a medical conference in NYC. The U.S. Immigration agent was asking to see people’s cell phones. In the Dr.’s phone he found statements critical of the Trump administration. The physician was turned away and not allowed to enter the U.S. to attend his conference. Putin is winning. But in the end, the American people won’t stand for it. Carl sent me a gloating message about the two Republican special election wins in Florida. But in the dark red districts Trump carried by margins of 37% and 30% five months ago, his two candidates won by less than half as much — a huge 15-point swing our way. And in the Wisconsin Supreme Court race, our 55/45 win was 11 points better than the 1% by which Trump won the state five months ago — despite the $26 million Musk poured in last month. Carl is right we were too woke . . . or at least were painted that way. (I don’t know of a single Dem in the House or Senate who wanted literally to defund the police, let alone a majority of us. Or a single Dem who thinks “men should be allowed to compete in women’s sports,” as he oversimplifies it . . . though I do know lots of people who think it should be left up to coaches and local communities to decide what’s fair and makes sense — just as I think Musk’s daughter’s gender-affirming care decisions should be hers and her parents’ and doctors’ rather than Trump’s.) And he is right that the Southern border was in crisis. (In part, this was because the bi-partisan comprehensive immigration reform that passed the Senate 68-32 — and would have passed the House and been signed into law — was denied a vote on the House floor by the Republican speaker in 2013 . . . and in part because the lasting bipartisan legislative solution Biden got took too long to get — but that was then scuttled by Trump so he could use it as a campaign issue.) But how about democracy itself? And Social Security? And veteran’s benefits? And 80 years of the norms-based world order we built? And NATO? And the separation of powers? Does Carl worry about any of that? How about $500 million of food that was already on its way to starving babies? And putting our Defense Department in the hands of a weekend Fox News host with a drinking problem? How about crippling our efforts to fight bird flu and Alzheimer’s? And pardoning violent January 6th rioters, many of whom were sentenced by Trump-appointed judges? The list is practically endless. Yes, there’s inflation . . . but does Carl see signs of its subsiding? And the economy . . . but has he seen the Consumer Confidence Index? An economy that five months ago was “the envy of the world” faces stagflation. And the deficit . . . but (and I will leave you with this, if you missed it yesterday) the DOGE blood baths could actually increase the deficit! See you Saturday at one of the 1,000+ rallies. Cory Booker is an American hero.
How-Does-This-End Bumper Stickers March 31, 2025 The symbolism of the Voice of America being silenced for the first time in 83 years is both stark and heartbreaking. We can’t have four more years of this — let alone eight. We must return to being the world’s good guy — its hope — not its bombastic bully. To normalcy. All it would take — though we’re clearly not there yet — is 17 Republican senators and 4 House members willing to step up. Granted, a third impeachment seems as likely as tapping a Fox News host with a drinking problem to run the Department of Defense. Even so, those of us who hate what’s happening should make our feelings known. If you can’t bear to sell your Tesla for pennies on the dollar, you could at least affix some bumper stickers to plant the idea. Likewise for whatever other make and model you drive: _________________________ I VOTED FOR TRUMP, NOT PUTIN — IMPEACH! NATO, NOT MOSCOW — IMPEACH! TARIFFS = NATIONAL SALES TAX — IMPEACH! THIS IS NOT WHO WE ARE — IMPEACH! SAVE SOCIAL SECURITY — IMPEACH! GROUP CHAT WAR PLANS? IMPEACH! JAN 6 PARDONS? IMPEACH! END THE CHAOS — IMPEACH! NO DICTATOR HERE — IMPEACH! BULLY PULPIT, NOT +ACTUAL+ BULLY — IMPEACH! SAVE MY 401k — IMPEACH! THIS IS NOT NORMAL — IMPEACH! I ♥ DEMOCRACY — IMPEACH! [With an American flag to the left and right of each.] ____________________________ If it ever did come to impeachment, Vance would have to be included. Which would leave us with Mike Johnson. But at least he’s no megalomaniac. To be clear: I’m not expecting any of this to happen. But bumper stickers on millions of cars would drive home the point: this has to change! If not by impeachment, then by voting in a Democratic majority at the earliest possible moment. MUST-READ BONUS Why DOGE Could Actually Increase the Deficit
Give It Up For George W. Bush March 31, 2025 Here’s what he had to say in 2011. One minute. Worth watching and sharing. Also . . . As physicians, we’re pleading with you to get angry. You heard them: Doctors’ orders. Finally, Fareed Zakaria: Don’t fall for Russian propaganda — even when it comes from the U.S. Putin is on the wrong side of history, freedom and human aspirations. The tragedy is that the United States appears to have now joined his side. Join Indivisible! Attend one of 600 events Saturday! I plan to — and I never do stuff like that. Spread DIS-disinformation!
It’s Just Good Business March 29, 2025 Conservative Andrew Sullivan’s scathing “Two Perfect Months” is a must-read. Among so much else: It is becoming clearer and clearer that Trump’s aim for Ukraine is to divide it between him and his closest ally, Putin. . . . Anyone who believed Trump is merely trying to get a workable peace now looks stupid. He just wants to share in the Ukraine spoils Putin secured by invasion. As I say, a must-read. It begins “in all fairness” by crediting Trump with securing the Southern border (he gives Biden some credit, too) . . . which leads into today’s topic today — undocumented immigrants. Everyone agrees that undocumented criminals should be deported; but what of the 99.9% who are not murderers, rapists, terrorists or drug-dealing cat-eating gang members? Consider: Undocumented Immigrants Pay Higher Tax Rates Than Many Major Corporations In 2022 America’s 10.9 million undocumented immigrants paid $96.7 billion in taxes. It is estimated that $40 to $137 billion of additional revenue could be generated each year if these people were granted work authorization. [A] less exploitable workforce would be paid higher wages (thus pay more taxes) and tax compliance by both employers and employees would increase. According to ProPublica’s released tax data from the 400 highest-income individuals, undocumented immigrants paid a higher effective tax rate than five of the richest Americans. Undocumented immigrants also paid a higher effective tax rate than 55 mega corporations. . . . These corporations had a combined pre-tax income of nearly $200 billion but paid just $3.7 billion in federal income tax, 90% less than undocumented immigrants. Undocumented Immigrants [account for] 1-in-7 construction workers, 1-in-8 agriculture workers, and 1-in-14 hospital workers. Deporting millions of undocumented workers would shrink the economy by $1.1 to $1.7 trillion, a more devastating contraction than what happened during the 2008 financial crisis. So now that we’ve sealed the border, why not grant those who are here work permits and a pathway to citizenship? It’s just good business. > We need their labor. > We need their taxes. > Their lower-than-average crime rate would lower our national averages. > And, argues Karla Cornejo Villavicencio, “Immigrants can be our secret weapon in the fight against authoritarianism. Immigrants love America in a way that America needs to be loved if it is going to survive.” BONUS #1 I’m so proud of Rufus Gifford, our former Ambassador to Denmark. Watch the first few minutes: “This is shameful”: Trump sows animosity and mistrust abroad, degrading Americans in the process. BONUS #2 Woodward on Trump. If you don’t have 24 minutes to watch (16 at 1.5X), the key takeaways are Trump’s view that “trade is bad” . . . that “everything is mine” . . . that “fear” is his superpower.