What caught my eye this week.<\/em><\/p>\n I<\/span> read a short story when I was a teenager that unsettles me to this day.<\/p>\n It featured an everyday American town, only everyone there was beholden to this one particular kid. Even the adults would watch what they said and did around him.<\/p>\n To spoil the twist, it turned out the kid was born with godlike powers.<\/p>\n The town, and the chunk of the planet it sat on, was adrift in space somewhere after he\u2019d dislocated it from the planet. The lives of the survivors living in this bubble now revolved around the child, although they tried desperately to pretend that life was normal.<\/p>\n Obviously the worst of it was their deity was a three-year old child, not a wise all-seeing superpower.<\/p>\n The kid-god was insecure, arbitrary, unpredictable, spiteful, prone to deadly tantrums, and generally mentally ill-equipped for the job.<\/p>\n I\u2019m sure you can see where I\u2019m going with this.<\/p>\n Look at a chart of the S&P 500 this week and you\u2019ll find that US shares closed much higher.<\/p>\n Perhaps some Panglossian observers see a good week for the markets, like the town folk in that story pretended they were living a good life<\/a>.<\/p>\n Passive purists will see more evidence to ignore the noise and keep buying<\/a>.<\/p>\n But experienced, the week was a rollercoaster ride driven by the kind of crazy plot lines and reversals you\u2019d expect to find \u2013 not coincidentally \u2013 in a season of WWE Wrestling<\/a>.<\/p>\n I won\u2019t run through the ups and downs. If you care about market drama, you saw them unfold.<\/p>\n Ditto Trump\u2019s tariffs. If you haven\u2019t read enough of the millions of words written by now to convince you of their sheer stupidity, this post won\u2019t tip the balance.<\/p>\n But for two weeks the market has given us real-time pricing on just how damaging this plank of Trump\u2019s agenda would be. The Nasdaq and very nearly the S&P 500 plunged into a bear market, before rallying on Trump declaring a 90-day pause for most of them.<\/p>\n Below is a daily price chart of that reaction. Remember these are multi-trillion cap indices \u2013 not illiquid meme coins \u2013 rising as much as 12% in a day:<\/p>\n What a killer run for Trump TV<\/em>, watched around the world!<\/p>\n Personally I found it even more exciting than the one where his supporters invaded the US capital a few seasons ago.<\/p>\n It\u2019s much more thrilling when you\u2019ve skin in the game.<\/p>\n And the subplots!<\/p>\n The pseudonymous \u2018Walter Bloomberg\u2019 X account<\/a> that promoted the \u2018fake\u2019 story the tariffs would be paused for 90-days, whipsawing markets by $2.5 trillion in half an hour as it was believed and then denied!<\/p>\n The arch-villain China slapping back with even more tariffs of its own!<\/p>\n Then Trump apparently being inspired by Walter\u2019s fake \u2018pause\u2019 and actually implementing a 90-day delay. Possibly only after he watched a bank boss fretting<\/a> on Fox TV!<\/p>\n This isn\u2019t even to get into how these enormously consequential announcements are being made via Trump\u2019s Truth Social account. Rather than, you know, the White House.<\/p>\n Or even accusations for potential nation-scale insider trading<\/a> based on Trump telling his supporters it was a good time to buy stocks, shortly before the market ripped 10% on his latest not-Tweet.<\/p>\n Personally, I don\u2019t think it can be insider trading when it\u2019s done in public.<\/p>\n But also, what a quaint thing to worry about these days\u2026<\/p>\n Perhaps my favourite bit involved all the NPCs \/ billionaire tech and finance bros battling on social media. Especially Trump supporter and hedge fund manager Bill Ackman, who went from<\/a> warning the tariffs would cause an \u2018economic nuclear winter\u2019 one day, to praising Trump for a textbook \u2018art of the deal\u2019 later.<\/p>\n I\u2019m with AQR founder Cliff Asness who replied<\/a> that:<\/p>\n \u201cFor me, one of the main benefits of making some money is not having to wear a gimp suit for anybody.\u201d<\/p>\n<\/blockquote>\n But I suppose Ackman is in too deep to recant.<\/p>\n At the risk of sounding exactly like someone who complains that WWE Wrestling is not a real sport \u2013 and thus who piously reveals that they don\u2019t get the joke \u2013 it\u2019s a bit sickening to me that this entire charade has become normalised in just a few short months.<\/p>\n Well I\u2019m having none of it. This is not normal, and it\u2019s not a brilliant way to shape US economic policy, let alone re-route the world.<\/p>\n It\u2019s mindlessly stupid. The tariffs would plunge us into a depression<\/a> if implemented, whereas they only have us flirting with recession when teased and (partly) retracted.<\/p>\n Listen, if the US wants to turn itself into an autarky run by an autocrat, go for it. I don\u2019t believe the US public voted for that \u2013 and it would impoverish most people there, especially the poor \u2013 but that\u2019s its (bad) business.<\/p>\n But let\u2019s not pretend the case for free trade wasn\u2019t made 200 years ago. And not just in theory \u2013 the world, and especially the US, has mostly grown crazy rich on the benefits.<\/p>\n You might as well declare you\u2019ve doubts about the theory of steam engines.<\/p>\n Then again, 10% of the US electorate believes<\/a> the Earth is flat, so perhaps they would.<\/p>\n In most cases for most countries at most times tariffs are bad.<\/p>\n Trump\u2019s sky-high tariffs for the US are idiotic, and even as a threat they will have consequences.<\/p>\n No serious CEO will have begun to move factories to the US last weekend based on Trump\u2019s earnest declarations that tariffs were \u2018beautiful\u2019 and here to stay and set to reinvigorate US manufacturing and all the rest.<\/p>\n Yet the unfolding farce will still be affecting millions of decisions up and down the supply chain.<\/p>\n To give one tiny example, the UK\u2019s Character Group \u2013 the maker of Peppa Pig<\/em> plushies \u2013 withdrew market guidance this week.<\/p>\n As This Is Money<\/em><\/a> reports:<\/p>\n Character, which manufactures Teletubbies toys and the largest range of Peppa Pig products, told investors on Friday its \u2018ability to assess the financial implications\u2019 of tariffs has been \u2018considerably obscured\u2019 by escalating retaliatory measures.<\/p>\n The New Malden-based group predominantly counts the UK and Scandinavia as its key markets, but US sales made up about 20% of turnover last year.<\/p>\n The UK will face so-called \u2018baseline\u2019 tariffs of 10%, but much of Character\u2019s manufacturing comes from China where exporters to the US now face levies of 145%.<\/p>\n<\/blockquote>\n Character Group is set-up just like millions of other companies around the world that took advantage of global trade to improve production and lower prices.<\/p>\n So we can only imagine all the similar decisions being made globally to pause output, and to suspend investment and expansion.<\/p>\n It sums up why markets hate uncertainty. It\u2019s not because traders are lily-livered. It\u2019s because the economic damage is real, and just as bad un-priceable.<\/p>\n There\u2019s not point re-litigating the brutal inanity of US policy every Saturday morning. This is going to go on for years, and attention is all Trump wants anyway.<\/p>\n But on that note perhaps the one good development this week was the potential re-emergence<\/a> of the so-called bond vigilantes:<\/p>\n We all know former real estate bankruptcy Donald Trump loves cheap debt. So maybe rising bond yields did force his hand towards a pause, rather than, say, Ackman\u2019s whining.<\/p>\n Of course, as Cullen Roche notes<\/a> there\u2019s a lot going on with US bonds:<\/p>\n The 10-year interest rate ripped from 3.9% up to 4.5% in four trading sessions. As I write it\u2019s now back to where it was nine trading sessions ago at 4.3%.<\/p>\n So, we whipped way lower and then went way higher.<\/p>\n Again, it\u2019s all uncertainty. No one knows where inflation and the economy is going. If inflation rips higher then bond yields will follow. If the economy rips lower then bond yields will follow.<\/p>\n But we\u2019re in totally uncharted territory because we\u2019ve never had the entire global economy at the mercy of a single unpredictable person writing Tweets sporadically.<\/p>\n I talked to some of the largest bond traders in the world in recent days and they\u2019re all so perplexed about it. They described it as \u201cchaos\u201d, \u201cuncertainty\u201d, \u201cmadness\u201d. There are theories floating around about carry trade unwinds, funds imploding, China selling and just bidless markets.<\/p>\n I suspect it\u2019s a lot of all of these things. But the uncertainty of it all is the main issue. No one knows where any of this is headed and if you\u2019re someone trying to lend money or set prices in the coming months then good luck guessing where you should be.<\/p>\n<\/blockquote>\n Trump\u2019s supporters don\u2019t care less that China ultimately buying a lot less US stuff would mean it would have far less need to hold shedloads of US treasuries.<\/p>\n Nor that unwinding China\u2019s US debt stockpile would see US rates soar, crippling US households.<\/p>\n Remember, this is television! Don\u2019t get hung up on reality.<\/p>\n Indeed as it\u2019s presently unfolding, US exceptionalism is getting downgraded<\/a> at a speed that would embarrass a B-Movie scriptwriter.<\/p>\n The only thing that\u2019s different about the tariffs mayhem compared to the rest of the MAGA\/Trump agenda, is it comes with real-time pricing. The damage is marked-to-market.<\/p>\n As blogger ermine<\/em> puts it<\/a>, the US is rapidly transitioning from having a POTUS to having a KOTUS, at least in practice.<\/p>\n A man whose daily utterances moves trillions in the markets. And who is checked mostly not by conventional counterbalances, but by the japes of sanctioned court jesters.<\/p>\n So in the spirt of the times \u2013 and since it\u2019s all a game nowadays anyway \u2013 I asked ChatGPT for an appropriate toy:<\/p>\n I can\u2019t wait to play with him next time.<\/p>\n Historians may someday look back and find something good to say about this entire episode.<\/p>\n They turned the murderous Genghis Khan into a nation-builder, after all.<\/p>\n Perhaps in some needlessly damaging way, this week really will eventually be seen as an idiotically-implemented check in the very-definitely authoritarian China\u2019s rise to power, for instance.<\/p>\n Even forest fires do some good<\/a> in the long-run.<\/p>\n It\u2019s just your bad luck to find yourself in the middle of one.<\/p>\n Have a great weekend.<\/p>\n The Slow & Steady Passive Portfolio update: Q1 2025 \u2013 Monevator<\/a><\/p>\n Inheritance tax hacks \u2013 Monevator<\/a><\/p>\n From the archive-ator: Volatility, inflation, and asset class returns \u2013 Monevator<\/a><\/p>\n Note: Some links are Google search results \u2013 in PC\/desktop view click through to read the article. Try privacy\/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.<\/em><\/p>\n UK equity funds suffer worst quarter for outflows ever as clients pull billions \u2013 CityAM<\/a><\/p>\n The homebuyers who lost thousands when their off-plan dream turned sour \u2013 BBC<\/a><\/p>\n \u2018Dire\u2019 UK productivity falls far behind the US\u2026 \u2013 Yahoo Finance<\/a><\/p>\n \u2026but at least GDP surprised with a 0.5% expansion in February \u2013 CNBC<\/a><\/p>\n Pandemic-fuelled shift to coast and country has gone into reverse \u2013 Guardian<\/a><\/p>\n Where living standards are rising fastest in Europe [Infographic]<\/em> \u2013 Visual Capitalist<\/a><\/p>\n Increased state pension will arrive in accounts from next week \u2013 This Is Money<\/a><\/p>\n US Justice Department scaling back crypto investigations \u2013 Washington Post via MSN<\/a><\/p>\n The US is down but not out \u2013 Known Unknowns<\/a><\/p>\n Cash ISA picks for 2024\/2025 \u2013 Be Clever With You Cash<\/a><\/p>\n Six things we\u2019ve learned from a decade of pension freedoms \u2013 Which<\/a><\/p>\n You can get up to \u00a3250 cashback when you open a SIPP with Interactive Investor<\/a>. Terms and fees apply. \u2013 Interactive Investor<\/a><\/p>\n Mortgage rates set to drop after tariff turmoil\u2026 \u2013 BBC<\/a><\/p>\n \u2026and more cuts could be on the way\u2026 \u2013 Which<\/a><\/p>\n \u2026with the gap between two- and five-year fixes now tiny \u2013 This Is Money<\/a><\/p>\n Get up to \u00a34,000 when you transfer your ISA to InvestEngine our link<\/a>. (Minimum deposit of \u00a3100, other T&Cs apply. Capital at risk) \u2013 InvestEngine<\/a><\/p>\n The best ways to earn and use Tesco Clubcard points \u2013 Be Clever With Your Cash<\/a><\/p>\n Five things your estate agent is too afraid to tell you \u2013 Standard<\/a><\/p>\n Get up to \u00a31,500 cashback when you transfer your cash and\/or investments through this link<\/a>. Terms apply \u2013\u00a0Charles Stanley<\/a><\/p>\n Should you ditch the TV licence? \u2013 Be Clever With Your Cash<\/a><\/p>\n Skinny but spacious homes for sale, in pictures \u2013 Guardian<\/a><\/p>\n Off the charts volatility is a sign we\u2019re living in financial history \u2013 Sherwood<\/a><\/p>\n Welcome to the grasslands \u2013 Fortunes & Frictions<\/a><\/p>\n What do the market declines imply about corporate earnings? \u2013 KOI<\/a><\/p>\n How long does it take for the market to recover? \u2013 Of Dollars and Data<\/a><\/p>\n This is what real uncertainty looks like \u2013 Morningstar<\/a><\/p>\n How to survive chaotic markets \u2013 A Wealth of Common Sense<\/a><\/p>\n Are equities \u2018always\u2019 better in the long run? [Search result]<\/em> \u2013 FT<\/a><\/p>\n Let them trade stocks \u2013 Best Interest<\/a><\/p>\n Does financial literacy decrease with age? \u2013 Wharton<\/a><\/p>\n Bear markets and bad decisions \u2013 Behavioural Investment<\/a><\/p>\n Trump\u2019s tariffs are a reminder to investors to diversify \u2013 UK Dividend Stocks<\/a><\/p>\n FIRE vs meaningful retirement: choose wisely \u2013 CFA Institute<\/a><\/p>\n What to think about when leaving a legacy to kids \u2013 Humble Dollar<\/a><\/p>\n The four phases of retirement [Podcast]<\/em> \u2013 Humans vs Retirement<\/a><\/p>\n Portfolio rebalancing: empty calories or free lunch? \u2013 Elm Funds<\/a><\/p>\n How well do you understand rebalancing? \u2013 Robert\u2019s Substack<\/a><\/p>\n The Mag 7 account for 40-50% of S&P 500 volatility \u2013 Verdad<\/a><\/p>\n Best international stocks to own \u2013 Morningstar<\/a><\/p>\n Venture needs to get past its \u2018IPO or bust\u2019 mentality \u2013 Institutional Investor<\/a><\/p>\n A Man for All Markets<\/em>\u00a0by Edward O. Thorp \u2013\u00a0\u00a30.99 on Kindle<\/a><\/p>\n Million Dollar Weekend<\/em>\u00a0by Noah Kagan \u2013\u00a0\u00a30.99 on Kindle<\/a><\/p>\n Great Britain?<\/em>\u00a0by Torsten Bell \u2013\u00a0\u00a31.99 on Kindle<\/a><\/p>\n The Moneyless Man<\/em>\u00a0by Mark Boyle \u2013\u00a0\u00a30.99 on Kindle<\/a><\/p>\n Or pick up one of the all-time great investing classics \u2013 Monevator<\/em> store<\/a><\/p>\n Government may extent domestic energy grants to heat batteries \u2013 Guardian<\/a><\/p>\n \u2018Greenhushing\u2019: companies hiding their environmental concerns \u2013 Grist<\/a><\/p>\n China can win an energy war with the US \u2013 Semafor<\/a><\/p>\n UK planning bill throws protections to wind, say nature chiefs \u2013 Guardian<\/a><\/p>\n Experts dispute claim that dire wolf has been brought back from extinction \u2013 BBC<\/a><\/p>\n Many US EV and battery factories are being cancelled under Trump \u2013 MSN<\/a><\/p>\n Is legal action the only way to save the planet? \u2013 Guardian<\/a><\/p>\n \u2018Dark diversity\u2019: the invisible threat to nature \u2013 Science Alert<\/a><\/p>\n Shopify looking to AI to keep its workforce lean \u2013 Sherwood<\/a><\/p>\n Algorithms locking up US prisoners for life \u2013 Pro Publica<\/a><\/p>\n The colours of her coat \u2013 Astral Codex Ten<\/a><\/p>\n AI model passes Turing Test \u2018better than a human\u2019 \u2013 Independent<\/a><\/p>\n Tariffs are kryptonite to the AI business \u2013 Axios<\/a><\/p>\n AI-human teams and the future of work [Research]<\/em> \u2013 Fork Lightning<\/a><\/p>\n What it feels like right now \u2013 Terrible Minds<\/a><\/p>\n All the arguments for Trump\u2019s tariffs are wrong and bad \u2013 Noahpinion<\/a><\/p>\n The market check \u2013 Roger Lowenstein<\/a><\/p>\n The Trussing of Donald Trump \u2013 Drezner\u2019s World<\/a><\/p>\n Decision making under uncertainty \u2013 The Pursuit of Happiness<\/a><\/p>\n I should have seen this coming \u2013 Atlantic<\/a> [h\/t Abnormal Returns<\/a>]<\/em><\/p>\n Trump may have just ended globalisation as we know it \u2013 Washington Post via MSN<\/a><\/p>\n The new right\u2019s cult of domesticity \u2013 Emily Amick<\/a><\/p>\n Good example of how PR campaigns delude the online masses \u2013 Guardian<\/a><\/p>\n The long history of Korea explained \u2013 Unchartered Territories<\/a><\/p>\n Happy, joyous, and free \u2013 We\u2019re Gonna Get Those Bastards<\/a><\/p>\n The West is bored to death \u2013 The New Statesman<\/a><\/p>\n Translated fiction is so on-trend \u2013 GQ<\/a><\/p>\n The English neighbourhood that claims to hold the key to fixing the NHS \u2013 BBC<\/a><\/p>\n Doing more is often easier \u2013 Raptitude<\/a><\/p>\n Seth Godin on thinking long-term \u2013 Big Think<\/a><\/p>\n 20 dogs sitting in a row with their leashes on the ground next to them \u2013 Zoe Mendelson<\/a><\/p>\n US tourist takes wrong boat, ends up a Southend fan \u2013 BBC<\/a><\/p>\n \u201cAs long as the odds are in our favor and we\u2019re not risking the whole company on one throw of the dice or anything close to it, we don\u2019t mind volatility in results. What we want are the favorable odds. We figure the volatility over time will take care of itself.\u201d Like these links? Subscribe<\/a> to get them every Saturday. Note this article includes affiliate links, such as from Amazon<\/a> and Interactive Investor<\/a>.<\/em><\/p>\nTrump TV<\/h3>\n
We\u2019re all degenerate meme traders now<\/h4>\n
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<\/a><\/p>\nDo you even lift, bro?<\/h4>\n
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Black Mirror Monday<\/h3>\n
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<\/a><\/p>\n\n
Ah, Mr Bond Vigilantes, we\u2019ve been expecting you<\/h4>\n
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<\/a><\/p>\n\n
The Mad King<\/h4>\n
Fun and games<\/h3>\n
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<\/a><\/p>\nFrom Monevator<\/h3>\n
News<\/h3>\n
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<\/a><\/p>\nProducts and services<\/h3>\n
Market movements mini-special<\/h3>\n
Comment and opinion<\/h3>\n
Rebalancing frequency mini-special<\/h3>\n
Naughty corner: Active antics<\/h3>\n
Kindle book bargains<\/h3>\n
Environmental factors<\/h3>\n
Robot overlord roundup<\/h3>\n
Not at the dinner table<\/h3>\n
Off our beat<\/h3>\n
And finally\u2026<\/h3>\n
\u2013 Charlie Munger, Damn Right!<\/em><\/a><\/p>\n