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

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