Afternoon

enjoy

Leverage

 A 15% market drop is upsetting to normal humans, but catastrophic to people making outsized bets on small swings with borrowed money.

Hedge funds have been hit with the biggest margin calls since Covid shut down huge parts of the global economy in 2020, after Donald Trump’s tariffs triggered a rout in global financial markets.

Wall Street banks have asked their hedge fund clients to stump up more money as security for their loans because the value of their holdings had tumbled, according to three people familiar with the matter. Several big banks have issued the largest margin calls to their clients since the beginning of the pandemic in early 2020.

Stay Away

 You can't travel somewhere there is a nontrivial chance you're going to be thrown in detention for weeks because the TSA guy with a quota has decided your "conference visit" isn't covered by a normal tourist visa, or whatever.

Driving the news: The number of foreigners passing through customs at the 10 busiest U.S. airports fell by over 20% year over year toward late March, based on a seven-day rolling average.

MAGAnomics

To the extent that it's coherent, they seem to believe:

If people get money (wages, whatever) they just eat it directly. They don't pass it on to someone else, who then passes it on to someone else, etc...

Related: there are no gains from trade, individually or between countries.

If the government spends money, it's just fake somehow. All economic activity related to the government is an illusion, except SpaceX and Tesla subsidies.

It takes a few weeks, couple months tops, to set up a "factory."

Morning

Slacker Saturday

Happy Hour

Get happy.

Atrios Loves Tariffs

I think many of you interpreted this to mean that I was somewhat tariff-positive.  My view is more that we have had a tariff policy, as we have had an industrial policy, but since we largely pretended we have neither of those things, it was difficult ever to talk about them.

Our policies are therefore largely a combination of accident and lobbyist rent seeking, though there was a bit more explicit acknowledgment during the Biden years.

The tariff schedule didn't read "zero" across the board before Trump showed up.  Biden's tariffs received surprisingly little pushback from anyone.  I'm not arguing they were good or bad, more that despite decades of Tom Friedman Ruling Our World, they were weirdly off the discussion menu.  

We pretended we had achieved Free Trade like some sort of End Of History thing.

You don't have to be a protectionist to think that we should maintain some onshore productive capacity of for certain things.  I don't even think this is especially controversial, but talking about what and how to achieve that has been hidden behind a lot globollocks.

Cunning Plans

Sometimes I think the rich tech bros have some sort of brilliant evil plan, but then they all say the stupidest shit on twitter and I question the "brilliant" part.

It doesn't need to be brilliant to be damaging, of course, but if it isn't brilliant there's at least some chance they're slamming their own dicks in the car door, too.

Mad King

I have no idea what Trump is open to at this point, but obviously you can't negotiate with someone who changes their mind every 15 minutes.

After multiple White House aides insisted that the new tariffs were not a negotiation, Trump said he would be open to negotiating with other countries about the duties.

Trump said he would be open to tariff talks with other counties if they offer something phenomenal, Reuters reported him saying on Air Force One.

Top trade aide Peter Navarro told CNBC less than an hour earlier that the sweeping tariffs are “not a negotiation.”

You can imagine someone in there has some  specific bribes they wish to demand from some countries, but they obviously aren't organized/smart enough to have thought this through for most of the world. 

Lunch

Someone tell Trump about the platinum coin.

Buy American

The full details are a bit of my pay grade, but there isn't a "100% American" car. It doesn't exist.

If this is to be believed (seems like it!), the most "American" car is the Kia EV6.

Loomered

Amazing scenes.

The Trump administration has fired the director and deputy director of the National Security Agency, the United States’ powerful cyber intelligence bureau, according to members of the Senate and House intelligence committees and two former officials familiar with the matter.

The dismissal of Gen. Timothy Haugh, who also leads US Cyber Command — the military’s offensive and defensive cyber unit — is a major shakeup of the US intelligence community which is navigating significant changes in the first two months of the Trump administration. Wendy Noble, Haugh’s deputy at NSA, was also removed, according to the former officials and lawmakers.

Another Exciting Day At The Dog Track

 About to start!

Yoon Removed

I suppose I've been more interested in this than I normally would've been because I spent some time in Seoul (first time there) not so long ago.

South Korea’s highest court has removed embattled President Yoon Suk Yeol from office, ending months of uncertainty and legal wrangling after he briefly declared martial law in December and plunged the nation into political turmoil.

Not that spending a bit of time somewhere makes me a expert on the place, but it does make things more real. 

Morning

Once a day.

Concerning

😂 

European Union regulators are preparing major penalties against Elon Musk’s social media platform X for breaking a landmark law to combat illicit content and disinformation, said four people with knowledge of the plans, a move that is likely to ratchet up tensions with the United States by targeting one of President Trump’s closest advisers.

The penalties are set to include a fine and demands for product changes, said the people, who declined to be identified discussing an ongoing investigation. These are expected to be announced this summer and will be the first issued under a new E.U. law intended to force social media companies to police their services, they said.

European authorities have been weighing how large a fine to issue X as they consider the risks of further antagonizing Mr. Trump amid wider trans-Atlantic disputes over trade, tariffs and the war in Ukraine. The fine could surpass $1 billion, one person said, as regulators seek to make an example of X to deter other companies from violating the law, called the Digital Services Act.

Happy Hour

Impeachment verdict in S. Korea in a few hours (9 Eastern I think).

Is That Good

 

Pundit Prediction

Let's see how this one, from me, will hold up:

I'm not defending Trump's tariffs - they're dumb - but I think liberals are going too much in on the idea that they will destroy the economy, be instantly unpopular, and tank Trump's approval. There's a lot of econobollocks ALL SENSIBLE PEOPLE KNOW TARIFFS ARE BAD and a lot of ignoring of the Biden administration record's on tariffs. Maybe Joe should've removed some when he had the chance.

There's some revenge fantasy here along the lines of, "you were mad about inflation and now you're going to get inflation," but it isn't going to be that simple or obvious.

More generally, the lessons everyone has "learned" (because it serves their purposes, because they are bad at their jobs and they have boat payments to make) is that there's nothing you can do to convince people who are mad about inflation, so they are hoping Inflation II proves their point.

Always trying to refight the last battle to prove themselves fucking right.

I will add that my intended point was that the impact of tariffs wouldn’t be so awful and self-evident that Dems could just sit back and not do politics.  I was  (wrongly) assuming they wouldn’t be so yuuuuuge (though of course that is still in flux, like everything). 

GO DOWN, LINE, GO DOWN

I am not rooting for economic disaster, but the line can go back up as fast as it went down. Other things can't fix themselves so easily. A stock market crash could force a course correction before the real long term damage (more) is done.