Just one thing: WOW
Well THAT was one of the most insane days in the market I've ever seen, ending with the third-largest rally since World War II for the S&P (though I'm not sure how they figure that out since the S&P isn't that old) and the speed of at least the first 2/3 of it was remarkable. Especially because the bond market was sending a VERY dangerous signal with oil and stocks showing recession but bond yields rising. Which is exactly why Trump had to act.
Charlie Gasparino said on Fox News that his sources tell him the Japanese were selling bonds. Whether it was a real sign of lack of confidence in owning US debt or an aggressive and angry message to Trump (which they'd be right to send) about what could happen if Trump doesn't back off, it sure seemed to work.
Treasury Secretary Scott Bessent said Trump's move was because lots of countries called to negotiate. I believe they did but I don't believe that's what moved Trump. He was channeling Navarro and wanted to keep pushing, I believe. Bessent must have explained the risks to him. Trump needs to rid himself of the harmful Navarro and the clownish Lutnick. In any case, what an incredible day. I admit Trump backed off sooner than I thought he would. I've said for a few days that Trump should just "take the win" and do lots of deals to reduce tariffs with as many countries as possible. There was no indication that he had any interest and plenty of indication that he didn't. But Bessent probably explained to Trump that while it didn't matter too much if the stock market went down, an aggressively declining bond market (rising interest rates) poses an existential threat to the country. While Trump doesn't understand much about economics or markets, as a builder of large real estate projects he definitely understands the financial harm that borrowers face from higher interest rates and there's no bigger borrower than the United States. His trade wars were courting fiscal disaster beyond anything the stock market, as bad as it was, was signaling.
I hope you don't actually believe that this was all part of a big negotiating strategy by Trump. He doesn't have strategies. He has whims. When asked how he came to yesterday's decision, he replied, "Instinctively, more than anything else, You almost can't take a pencil to paper. It's really more of an instinct, I think, than anything else." That's fine if you're betting your own money on a football game. It's not fine if you're betting the fiscal stability and prosperity of a nation.
So, repeating what I've said for a few days, Trump's graceful way out of a disaster of his making is to pretend that this was always about negotiating. People who are paying attention know it's not true but his supporters will buy it. And more importantly he'll take his boot off the neck of the US economy. I also note that I got a text promoting Truth Social (and presumably from them) crowing about how much the market went up after Trump announced the policy change on his social network as he tries to build its relevance and value. Trump likes to win. Now he's seen one of the biggest market rallies of all time based on stopping the idiocy and he may be rather hesitant to go back to the idiocy. Finally, the current stance is at least somewhat closer to the proper policy. Stop beating our allies over the head for no legit reason but do take on China which is somewhere between an competitor and an enemy, which steals our intellectual property, which is supporting Russia's invasion of Ukraine, which threatens Taiwan and much of that part of the world, etc. China poses a serious threat. Tariffs from the EU don't. Of course Trump should try to get EU (and other) tariffs lowered but it was always REALLY stupid to treat our friends the same way (or worse) that he treated our enemies.
And for cryin' out loud, Donald, if you're gonna put tariffs on every imported thing, don't exclude Russia. That's just a REALLY bad look.
Why Trump decided to take the win and paused tariff war
Inside the Oval Office: 3 factors that led to Trump's tariff pause
Hill Republicans fume as Trump blindsides them with tariff pause
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Trade and National Security (from ADM Stavridis)
Worth your time: Tariffs: US Defense Is Collateral Damage With China - Bloomberg
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Who did it better?
The Marty vs Jeana edition...
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Today's Guests
Colorado State Rep Ty Winter (R-HD47) is Assistant Minority Leader, a fellow graduate of the Leadership Program of the Rockies, and represents Las Animas, Baca, Prowers, Bent, Otero, Crowley, and Kiowa counties, along with part of Pueblo and Huerfano counties. With Dems going absolutely crazy, Ty will give us a (probably painful) legislative update.
Ty Winter | Colorado General Assembly
Ty Winter for Colorado House District 47 | Colorado
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Kathleen Chandler is Director of the Citizen Involvement Project at the Independence Institute. She'll remind us about her online class you could/should take tomorrow evening if you're interested in getting involved in local politics and trying to improve your community.
Citizen Involvement Project - Independence Institute
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George Brauchler is the first DA of the 23rd Judicial District. We'll discuss a shocking piece he wrote for The Denver Gazette entitled "A cop-out on child rape"
I'll also ask George if he's thought about running for state Attorney General as he did, unsuccessfully, in 2018. (If I were George, I wouldn't run.)
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Other Stuff
Sometimes members of Congress take courageous positions based on principle and good government even when their colleagues or the president (usually of their own party in these situations) oppose them. In those situations, the legislators deserve public recognition and praise for abiding by their oaths of office rather than fealty to one politician or even their party. In this case, the effort is bipartisan in both support and opposition. I want to give a "shout out" and public thank you to Jeff Hurd, freshman (all the more courageous for that) Republican representing Colorado's 3rd Congressional District, for this: Colorado Republican Jeff Hurd leads bipartisan legislation to check Trump's power to impose tariffs | Colorado In DC | coloradopolitics.com
BTW, what I meant by bipartisan support and opposition is that there are members of both parties who know that it's insane for one person to be able to start trade wars the way Trump has. Even though an old Supreme Court case has allowed significant delegation of the tariff power, which is assigned to Congress in the Constitution, to the president I think that delegation is unlawful and I'd like to see SCOTUS look at it again. In any case, it's absolutely clear that Congress can take back tariff authority and they should. The reason there is also bipartisan opposition is twofold: First, plenty of Republicans are afraid to go against Trump and the MAGA base who care as little for the Constitution as their leader does. And second, supporting tariffs is really a Democratic, not Republican, position (historically) and many of them like the idea of a future Democratic president being able to pander to labor unions using tariffs even though tariffs make the rest of the country poorer.
Again, thank you Jeff Hurd.
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Yesterday, in a move that surprised pretty much everyone including financial markets and many people who work in the Trump administration, the president backed down, for now, on "reciprocal tariffs". The stock market had one of its biggest rallies ever. For the S&P it was the biggest since 2008. I've mentioned this already in "Just One Thing". BUT, Trump got MORE aggressive against China and it appears that he's not backing down there. This puts Trump closer to what lots of people thought his policy would be (and should be) all the way along. I don't support tariffs on any friendly nations because the primary victim is American businesses and consumers. But living in a world where Trump was going to impose tariffs no matter what, a relatively low rate is manageable and, again, generally we shouldn't treat our allies as badly (or in some cases worse) than we treat our enemies. So Trump and Chinese President Xi now seem to have their egos fully engaged, neither willing to appear to back down to the other. As with most wars, this one will hurt both sides a LOT. Unclear to me who gets the worst of it. Trump likes to focus on China exporting so much to the US that it must mean that they'll hurt more but we import a lot of stuff that we NEED, not just stuff that we want. Still, China is an increasingly aggressive adversary and it's past time that we do what we can to slow their expansion.
BUT, now that the trade war is fully on, the Chinese will do anything they can to annoy Trump. To start, they will block the sale of the ports at the ends of the Panama Canal from a Hong Kong company to the American firm Blackrock. Second, they will refuse to allow the sale of TikTok by Chinese company ByteDance. Sure, there may be some negotiations involving all these points and it's not impossible that Trump and Xi will reach an agreement that covers this stuff as well as tariffs. I think that's unlikely because of egos and also because Trump understands the threat posed by China and their persistent malign behavior aimed at weakening the United States and threatening our allies. But Trump surprised me today so maybe I'll be wrong. (To be clear, when I say he surprised me I don't mean that I'm surprised he did what he did. But I'm surprised that he did it this soon.)
Commentary: The Panama ports sale isn’t over, but China’s message to the Li family is clear - CNA
Trump Transforms Tariff War Into High-Stakes Showdown With China - WSJ (Gift link; no subscription needed)
Speaking of China: I missed this story…it’s going to be a big deal for a lot of people such as those who buy inexpensive clothes on Shein. Won’t impact me very much…slightly increase my costs to buy some electronic parts. But all of these small (and not so small for other folks) cost increases will massively change how some people shop and how some businesses get their inputs.
De minimis trade loophole to end May 2, White House says
These next two, both at The Free Press, are fascinating to read as a pair:
And the big picture: China and America Fight for the Twenty-First Century
Niall Ferguson: China and America Fight for the Twenty-First Century
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Nerd out with me a bit: (17) The Emperor Has No Lab Coat - by Dr. Matthew Wielicki
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It'll be interesting to watch this play out: House GOP chaos erupts as Johnson pulls budget vote: "Embarrassing"
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A little more "tabloid" than I normally pay attention to but I do think McAfee should lose money and reputation for this: College Student Targeted by Viral Rumor Calls Out ESPN, Pat McAfee
Pat McAfee promises silver lining amid Mary Kate Cornett controversy
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I hope the ballot measure passes but I think it won't because it's Denver and they don't believe in freedom for anything except abortion and hallucinogenic mushrooms: Denver approves ballot petition seeking repeal of flavored tobacco ban (Subscription may be required)
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Good: Before and after photos show Darien Gap migrant route to US a ghost town after Trump's crackdown
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Less good: Chinese restaurant closed down after 'roasted duck' turns out to be street pigeons
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Who would want to be a landlord in Denver now? Colorado lawmakers to decide whether tenants facing evictions have right to jury trial
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I think this is a multifaceted cultural change and that dogs are a symptom, not a cause: More people are choosing to have pets over children: study
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I get that some people have bad allergies but this sure seems like overhyping the issue...I mean, when I read the headline I thought maybe some packets contained arsenic! Frito-Lay Tostitos chip recall upgraded to highest risk level — consumption 'could cause death'
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Today's Videos
Yes, the purple one
AI Evolution of Donald Trump
Pretty good graphics, really