Another day and it is not getting better - April 8th, 2025

 April 8^th, 2025

The decline continues today after a rally at the start of the day.  In my opinion this is people buying in because they saw a chance to make a buck.  Having multiple days of large declines is not normal for American markets but the situation is also not normal.  Having an American president accidently starting a recession is something we can not plan for or understand the impacts of it.

With the 104% tariffs being levied on American businesses that buy products from China is going to really mess the American retail sector.  I am not sure how a company like Walmart, or Michaels, or Apple, or any one of a number of companies, will manage to deal with this huge cost increase for them.  Changing to different supplies will take a long time.  There is little choice but to sell the items from China. 

Right now we see the US stock markets reacting.  The people that drive the stock market are by nature centre right pro-business.  They are looking for reasons to be opotmistic about the markets.   This happened yesterday when the markets flew up after a rumour of a pause in the tariffs was going to be announced.  The market makers tend to lean into optimism and that makes what has happened in the markets look worse.  Bu the markets are not the economy.

It takes time for a really stupid policy decision to work its way through to the economy.   It is all about stock on hand.   Retails sales for the last few weeks are likely to be up because the public is forward loading their purchasing because of the fear of the tariffs.  We should then see a lag of a month to three months before retailers need to bring in new stock.  It is in early July the scope and scale of the decline will become public.  Then the Q2 earnings calls from companies will be coming in and there will be some bad ones, really bad ones.

In May and June we will start to hear about layoffs and this will increase each and every week for the rest of the year.  I am not sure how 2026 will look, and I doubt anyone can with any accuracy, but I am leaning towards apocalyptic. 

At what point will Dumpster Don accept he fucked up more than any other American president?  How will he back down?  How will he react when after he backs down things do not get better?

The negotiations Trump speaks of in relation to the tariffs are unlikely to lead anywhere much.  It does mean that he is signalling the tariffs are not intended to last at all, and this flys in the face of using the tariffs to increase manufacturing in the United States.  You can not have both.

How does Dumpster Don negotiate in any case?  The tariff rates that did exist are much smaller than what the Americans have imposed.  In his first term he negotiated NAFTA to create CUSMA.  His negotiation skills did little to make an serious changes to NAFTA in the process.  How does a country like South Korea negotiate with the US?

South Korea and the US have a free trade agreement in place and not most of Suth of Korea’s economy is open to American products.  This was renegoatied by Trump in 2018.  

That did the tough negotiator get in 2018?  Not a lot.  A few more cars.  For a deal Trump said  "It's a horrible deal, and we are going to renegotiate that deal or terminate it.", the results do not reflect the fantasy words as spoken by him.

What is there that South Korea could negotiate away to get Trump to drop his outrageous tariff against a free trade partner?  It is not like Trump even demand South Korea pay for the costs of the American military there because they already do so.

Anyone negotiating with the US is going to want to see this moronic and illegal tariffs to be removed.  They are not going to accept them continuing.  To get deals the US will have to give up their tariffs they announced on April 2^nd, recession day.

Trump has very little to offer.  To get deals he is going to have to remove the tariffs in return for minor concessions.

All that said, I think Trump has no interest in dropping the tariffs because he wants the money to allow for the Oligarchs’ tax break.  I do believe this is all about getting new revenues for the American government more than anything else. 

Something like $10,000,000,000,000 of American wealth is gone.  It is likely that over the next two weeks that this will rise to $20,000,000,000,000 to $50,000,000,000,000.  At this scale of a loss, it will take the American economy 20 to 30 years to make up this lost wealth through growth in the economy. 

•        The world is headed towards a really bad recession

•        Americans have a very large new tax to pay

•        Americans are losing huge amounts of wealth

•        Trump is unlikely to be able to negotiate any sort of a meaningful agreement with any country

•        Recovery will take up to a decade

My Day Off but there is No Peace - April 7th 2025

 April 7th 2025

I have been thinking all day about what to write today.  My goal is to try and write about the events of this crisis each day as long as it lasts.  In part it is because I need to work things out and not go insanes, and in part because when major global events happen, when that change happens, we forget how things felt the day before.

I should have started this sort of thing in 1989 as communism fell.  Or the start of the Ukraine war, Or numerous other events.  But I did not.  All the previous events did not suck the soul out of me each and every day like Trump is.

This crisis is also different because it only exists because the President of the United States is stupid and has no understanding of economics, governance, or business.  We are headed into a recession, which will very likely be the worst one of my life.

A recession will happen because the tariffs will harm the exchange of goods for money.  In theory it is still possible for for Trump to call this off but that would require him to clearly state this week that his strategy is a huge mistake and he will not do this again.

Something like $10,000,000,000,000 has been lost by American investors.  The US GDP is only $28,000,000,000 per year.  In the space of three business days and a weekend, the American economy lost 1/3 of the projected total production of value by the American economy.  The American stock markets have not yet accounted for the coming recession, not really.  The markets have also not accepted that Trump is serious about the tariffs.

I am not sure what it would take for Trump to step back from the brink and stop what he is doing.   Clearly it is not trade negotiations since his tariffs are not connected to the reality of trade.  He is also not treating countries fairly.   Trump only cares about the goods trade deficit, but he still put tariffs on countries that the US has a surplus with.  

Let us say the American economy really crashes, something much worse than 2008/09.  Would that be enough to change his mind?  Will he withdraw his tariffs and declare victory?  I am not expecting him to apologize for the harm he has caused.  Even if he backs down now it is likely too late.

Canada has the longest free trade relationship with the US, the core of which was the 1965 Auto Pact.  The North American car industry has been integrated for 60 years now.   This is what both of the countries wanted and the industry has spent two generations working as if there is no border.

Donald Trump was still in high school when the Auto Pact was signed.  He does not really remember a time when the car industry was not integrated.

I am bothered by Trump constantly saying how the US is suffering and he has to do this to make it the biggest economy on earth.  Did I miss the memo?  Did the US at some point cease to be the large booming economy it is?  The US is a very wealthy country, how will the tariffs make it wealthier?  

One way I can be certain a recession is coming is that the loss of Canadians going to the US and the total drop off of buying American produce is more than amount the American economy was predicted to grow by six months ago,

Attacking Canada he way he has means that alone will start the recession.  Increased cost of Canadian aluminum will hurt.  The car industry will have a drop in sales and that alone would cause a recession.  Now, imagine all the products from China being 50% more expensive.  I do not see how Walmart survives this as they are China's retailer in the United States.  

And then there is the rest of the world.

This is not going to be a recession, this is going to be a bad American depression.  Unemployment like not seen since the early 1930s.

The Day Before - Sunday April 6th 2025 Entry. What will happen to the markets tomorrow? More fall out from Recession Day

The Era Trump is taking the US to

April 6th 2025 

Tomorrow morning we will see what the markets will do. I have no way to know what will happen but here are some scenarios:

1. Trump removes all the tariffs and amidts he was wrong. I think this is highly unlikely but would be best thing Donald Trump could do to stop the economic melt down in the United States. 
2. The market holds for Monday because of value investors buying into the market. This might be possible but I do not think it will happen because there are not enough people willing to do this. The scale of the losses are higher than could be counteracted by some contrarian investors. You would need to mobilize multi trillions of dollars to have this happen. 
3. The sell-off continues and we see another 10% to 15% drop in the markets on Monday. I think this is most likely. Where will the sell-off end? That is a very good question and no one knows the answer to that. Imagine the Big Three and Walmart going bankrupt, what will that do to the American economy and the markets? 
4. The sell off is so bad that trading is halted on American exchanges. A halt would spook the shit out of the markets and when they reopened they would crash harder. I think this is the second most likely outcome. 
5. The Republicans grow a backbone and stop Trump - I think this is highly unlikely. Even if Trump were to take all the tariffs off and apologize for his extreme blunder things will not return back to normal. It will just not get as bad. 

I do not see a path in which the United States does not avoid a bad recession. I do not see how they avoid 10% to 15% unemployment. I do not see how they avoid high inflation for the next year or more. 

The crazy part is that the US is putting tariffs on things the US can not produce. Bananas, chocolate, and coffee are all being tariffed. It means the prices for all of these things will rise 10% or more in the next MONTH, not year or decade, MONTH. 

 The only saving grace for the Americans is that new tariffs on Canada and Mexico were not introduced on Recession Day. Still, the impact on the American car industry is catastrophic and will likely lead to a 30% to 50% drop in car sales in the US in the next year.

Enough for today.

Trying to Enjoy My Weekend - April 5th 2025

April 5th I am wrting these posts mainly for me to look back on ho wthings went day by day. I did not do this in 1989-1992, when I should have. It woudl have been good to do this with the pandemic as well as the Russian invasion. I am going to do it this time documenting how this Trump sit plays out over time. I need to not be thinking about this stuff everyday and all the time, but it is hard not to. When I go out I see the world as it is right now, which is not yet a dramatic change from where it has been for the last four years but I know dramtic change is coming. My own life will be in a relatively good place. If I was just thinking about myself this chaos does not impact me directly. But I do not think like that. I am always think about the bigger picture and how others will suffer. I can see so much suffereing coming. Needless suffering, and that is what bothers me more than anything is that all the coming economic depression was entirely the creation of one human being. I am not going to wrote anything more for today. Tomorrow there will be more. Look after yourselves, be safe.

Trump Stock Market Crash - April 4th 2025

 

View of the BC Legislature from in front
of my office building

April 4th 2025

The American markets have dropped about 10% in the last two days.  That last time there was a drop like this was during the pandemic, and that was unexpected and surprising and no one knew how it would play out.

This is market crash is the first time it was caused by a single dumbass mistake.   This crash was 100% unnecessary and only exists because Donald Trump decided to engineer it. Everyone who understands economics pointed out this would happen.

The US imposed massive tariffs on all the world except for a few exceptions.  Israel and Australia did not have tariffs on American products, still they were hit with tariffs.

Canada and Mexico got no new ones, but the cars and car parts tariff along with the steel and aluminum tariff were quite specifically aimed towards Canada and Mexico.  

Remember store shelves during COVID?

Russia was not tariffed because Donald Trump is under the control of Putin and is going to have a lot more trade with Russia as soon as Trump can get away with it.  At the same time Ukraine was remtariffed!?!?!?!?!?!!!!???

Things are going to get really bad.  Everything the economy goes downhill the one single constant is that everyone underestimates how bad it will get.  Everyone in the media talks about how it will be bad but not that bad.  The American March jobs report come in positive but that is a really bad thing to happen right now.

This market crash and economic depression is completely and totally created through incompetence.  This makes it hard to understand how bad it will get bad but I am certain it is going to be a lot worse than anyone expects.

This is no longer the 1990s when the US was globally dominant in a way that was unbelievable.  China was not a factor yet, the Soviet Union and Eastern Bloc were gone, Japan was no longer the economic super power, and so on and so on.  The Us is big but no longer the only axis the world's economy needs to operate on.

There are two countries that are still very tied to the American economy, Canada and Mexico.  I am not sure what is going on in Mexico but here in Canada there is a strong appetite to end the relationship with the US. OK, not end, but accept the US walked away from Canada.   Canada is not going to beg for the US to come back.  Instead Canadian PM Carney is talking about Canada taking the mantle of the US as leader of the free world.   

Let me say that again.  Mark Carney has stated Canada is ready and willing to step to be the leader of the free world.   Wow!  Canada has a very long history of acting like it is a small country like the Netherlands or Denmark when it comes to global affairs, and not act like it is one of the biggest economies on earth and part of the G7.   Will Canada now be a major global player?  

How far will the markets fall?   That is a very good question and I have no clear sense of where it will all end.  I suspect retailers and manufactures that rely on China may go bankrupt in the next six months and their stocks will collapse.  American Big Three auto makers could very well go bankrupt given that this will be worse than 2008/09.  Do not forget that Canada and Ontario did a lot to bail out GM, much more than the Canadian share of the industry would warrant.  The Big Three stocks could go way down.

To reiterate, this will be worse than 2008/09 and COVID combined.  50% to 70% fall in markets is not unrealistic but no one wants to think about that happening so they ignore the possibility of it.  

Time to stop writing because my blood is boiling and I need to calm down.

Welcome to the Recession, will it be a Depression? Entry for April 3rd 2025

 April 3rd 2025

This was public sentiment in Canada in mid March

Where does one even start when the most powerful man on earth decides that starting a bad recession is the right thing to do?

It is not just one thing but a multitude of things Trump is doing that causing a recession:

• The dramatic rise in taxes on Americans will drop the growth in their economy
• Ongoing uncertainty on what the American Administration will do, about anything
• Incompetence in the senior staff of the administration
• A fall is US exports
• A dramatic drop in tourism 
• More inflation - the huge tariffs on China will raise the prices of everyday goods in places like WalMart buy 30% to 50%
• Layoffs - they are already happening today and will increase a lot among car manufacturers.  This will lead to rising unemployment
• Loss of arms sales
• Falling oil prices
• Flight of capital - investors are moving their money out of the US because they are not sure what will happen next
• The flight of highly educated people to other countries
• Global shift away from dealing with the US
• Lower consumer spending
• Higher taxes on the bottom 95% of the population

Each of the items above could put a weak economy into a recession.  Two or three of them would put an okay economy.  With all of these things happening at once, the US economy will be determined to be in a recession now in the fall when the data is in.  

In 2008/09, the US caused a global recession because of its badly managed housing mortgage system. This recession is going to be many times worse.  

With a recession started, we will see:

• Rising unemployment
• A fall in capital for projects
• Mortgage foreclosures
• Business bankruptcies
• Personal bankruptcies
• A fall in government revenues
• Falling exports
• Rising interest rates due to inflation
• Falling housing prices making people feel much poorer
• Falling stock prices making people feel poorer and causing problems with retirement

These factors will all make the recession a much worse one.  So how bad?

This is a very hard thing to estimate because we have never seen the President of the United States deliberately cause an economic meltdown. Here aser my estimates through to the end of 2025:

•  US unemployment 11% to 15% this is based on the early 80s recession, 2008/09 and COVID.  
• Fall in the US GDP between 5% and 10%

OK, this is officially very depressing for me, time to stop writing for today. There are more things that will happen with a bad US recession.

I only added this pic of Bernie because
dogs make things better

Depression

Where do I start?  

I have bad depression.   It has been very bad for the last five months but it has been around consistently for years.   How bad?   I am not sure I can admit that in public.

I was in denial about it for most of my adult life, even when I got some treatment in 2009 I do not think I truly accepted it.

Denial happened because to admit it was to say I am a flawed person, that I am a failure.  I was ashamed that I was weak.   I also grew up in a family where we should be able to suck it up.   I made bad decisions because I was trying to keep up appearances.  

I have to admit I have a mental health problem. I have to admit my mind is not right.   This has been the single hardest thing I have done in my life.

The first step is that I have to admit it to myself.  Admitting to myself works best when I am open about it to others.   I have to allow my public persona match my private one enough to be vulnerable.

Depression has been very lonely and isolating as well.   This year I have been telling people and I have had many people to do not understand it but others who get it because they have been through it.  It has been good to connect with friends that have been through serious depression as well.  

As part of my process to try and improve my mental health I am going to try and write about my depression.  I hope that by expressing in written word what has been going on I can understand what is going on with me and find ways to cope.