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Well unless you believe the stock market doesn't follow economic signals but instead is in on an elaborate ruse to discredit tariffs, the disaster predicted by the experts is already underway. You also have to engage with the object-level arguments and evidence against tariffs, especially of this extreme nature - it's utterly pathetic to say, well I don't trust experts so I will merely act at random.
I doubt this will be a persuasive argument to consumers when everything goes up in price. If what you do is a complete fuck-up, surely it will only increase the dominance of the status quo. The tariffs will be a disaster and every economist will rightly say I told you so. Pol Pot proved that 'alternatives are possible' too.
Currently SPY is down roughly 3.9% on the day. Which is certainly a bit rough compared to the normal +/- 1% daily churn, but is a roughly 1% type event, so something you would expect to happen more than once a year, but not more than a few times. I am unmoved.
Tariffs have been at least partially priced in for a while, though. And SPY has been sliding since mid February.
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I suspect traders are pricing in the possibility Trump will at least partially reverse course.
Yes, our expectation should be a global recession/depression with lots of international supply chain snafus. The market is currently saying surely Trump isn’t that reckless
I do think that's quite possible, but we lived through a bunch of supply chain snafus in the last five years (toilet paper, unloading at Long Beach, the Ever Given fiasco, Houthis, chip shortages) and I will admit those weren't great times but we did make it through them, and systems (capitalism?) were more robust than at least I expected.
Yes. This should seem to me, on consideration, not quite so dangerous as "shut. down. EVERYTHING" of five years ago. I expected Armageddon then, but things surprised me with their resilience. And this time - well, the question is whether the intransigence of Trump or the coherence of his coalition is greater than the public's fear of The Pandemic, but - it might be more easily taken back.
Of course, the cost of "shut down everything" turned out to be - inflation! Inflation sufficient to take down not just the sitting President, but the President after him! I'd rather we just didn't.
I think the problem is that we honestly just can't not. I think destructive nonsense like this has become an inevitability in some way, and it's going to keep happening until enough destruction has passed.
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As they say in the biz: post shorts.
I've been out of stocks and in treasuries for a while myself, so I'm not about to paint a rosy picture of the coming recession, but if you believe the market is always right you would have to believe they were right about a whole bunch of rate cuts that didn't happen just in the past few years. And if you believed the experts (rather than the market) you'd have been even more wrong.
Markets aren't magic, they're just the aggregate of what people with skin in the game believe. Them being wrong happens all the time.
While I agree with the sentiment here, I think this illustrates why successfully shorting the market is so much harder than it looks. If you looked at Trump’s economic proposals during the campaign, thought “man, this will wreck trade,” and then shorted the market immediately after he got elected, you ate shit. If you shorted the market early February when Trump signed an executive order to impose 25% tariffs on Canada and Mexico, you didn’t make diddly squat. You would have had to short the market the last 6 weeks specifically in order to be in the money. There was no real way a priori to know that this is when the crash would be.
I second all of this. I have messed with shorting a little (although usually by options rather than naked shorts) and it's a lot harder than being long. You're paying interest the entire time, and when it goes against you, you effectively get more leveraged, increasing your risk even while you think "cmon, this price is totally irrational, when is the bubble going to burst already!?" I know some perma-bears who have been predicting doom for the past 10 years (just from market valuations, nothing to do with Trump) and they keep getting proven wrong.
In general shorting macro events is extremely dumb. Some people are super geniuses / very lucky (it is not worth litigating which), but there’s a reason most short strategies are the result of relatively diligent research / low key or high key non-public information, narrowly construed, and limited. “Short the market if you think there will be a crash” is always a dumb thing to say. Unless you have non-public information about a market wide trigger (like a major bank about to report a huge increase in mortgage delinquency) the smart move is probably to take money out and wait.
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Where is your money atm, if not the market?
Bonds, gold and bitcoin. Mostly bonds.
I sold 1/3 of my btc close to the peak, but I wish I had sold more. I don't feel too good about how btc will do during the rest of this year... and if the cycle thing still holds, 2026 will be very red. What is your view on btc in a recession?
There is bound to be pain, but long term Bitcoin trades like an option on its own adoption, and the current administration is quite favorable to the industry in general and to it in particular.
The recession outlook entirely depends on whether or not it's seen as a safe haven. If state and financial system adoption continues or hastens, those shocks won't matter and it'll behave like a better gold.
If it doesn't and nobody cares because everyone is buying a gold backed BRICS currency or gold directly, it'll be the worst asset to hold in 2026, even worse than stocks.
I hold it as a hedge, like the rest. But if you want some real alpha, I think that tokenizing stocks and general financial engineering around bridging crypto and the regular financial system is going to be the next big thing for that industry. Exchanges all have products like that rolling behind the scenes, Blackrock has been positioning itself in that area and with a SEC that isn't persecuting the industry anymore, people can start to do things again.
I'm unsure how that particular kind of financialization will interact with a contracting economy, but it will. GameStop trying to shore up value by buying Bitcoin might be a template for others. Or it might not.
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I think you might need to watch or read The Big Short.
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