I was on a large boat for Liberation Day but, after returning, got caught up on last week's sequential 3% market routs. And now after hours and Asian markets are looking just as bad going into Monday. Kind of feels like covid.

EViLTeW

On the flip side, you have to take everything Trump says literally, because when you don't, he does it. You shouldn't assume it's all true, but you have to assume it could be.

The market is supposed to price in future events as they progressively become more likely. And so I got a chuckle from the fact that after threatening and pausing tariffs with Canada and Mexico a couple of times, the market didn't seem to think Liberation Day was actually going to happen.

In my tariffpost I neglected to mention that trade policy is ordinarily a power of Congress. Trump used the supposed border and fentanyl crises to invoke emergency/wartime powers to impose the import duties. This was addressed pretty directly in his Time interview:

Time

Time: I'm curious. You have control of Congress, both houses. Much of your agenda is executive driven. Why? Trump: Um... Time: You have the power to do things legislatively. Trump: Yeah? Time: So why is so much of your agenda executive driven? Trump: I don't know what you mean by that. Time: Well, you said lots of what you can do is without- Trump: Oh, like executive orders. Time: Yeah. Trump: Well, I think that Congress should have behaved differently when it came to the border. I ended up taking the money. You know, I built, you know, hundreds of miles of wall, but I took it from the military because I considered it an invasion.

Since the president has wide discretion in determining emergencies, I don't imagine we'll see a successful legal challenge to the emergency that has grown from our terrestrial borders to the entire planet.

Outspoken hedge fund manager Bill Ackman took to Twitter to beg for tariff reprieve while being careful not to sound like he was second-guessing the president. The result was a textwall that I am reproducing in its entirety to illustrate the point:

Bill Ackman

The country is 100% behind the president on fixing a global system of tariffs that has disadvantaged the country. But, business is a confidence game and confidence depends on trust. President @realDonaldTrump has elevated the tariff issue to the most important geopolitical issue in the world, and he has gotten everyone's attention. So far, so good. And yes, other nations have taken advantage of the U.S. by protecting their home industries at the expense of millions of our jobs and economic growth in our country. But, by placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital. The president has an opportunity to call a 90-day time out, negotiate and resolve unfair asymmetric tariff deals, and induce trillions of dollars of new investment in our country. If, on the other hand, on April 9th we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate. What CEO and what board of directors will be comfortable making large, long-term, economic commitments in our country in the middle of an economic nuclear war? I don't know of one who will do so. When markets crash, new investment stops, consumers stop spending money, and businesses have no choice but to curtail investment and fire workers. And it is not just the big companies that will suffer. Small and medium size businesses and entrepreneurs will experience much greater pain. Almost no business can pass through an overnight massive increase in costs to their customers. And that's true even if they have no debt, and, unfortunately, there is a massive amount of leverage in the system. Business is a confidence game. The president is losing the confidence of business leaders around the globe. The consequences for our country and the millions of our citizens who have supported the president - in particular low-income consumers who are already under a huge amount of economic stress - are going to be severely negative. This is not what we voted for. The President has an opportunity on Monday to call a time out and have the time to execute on fixing an unfair tariff system. Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down. May cooler heads prevail.

We all remember the tech luminaries - Zuck, Elon, Sundar, Bezos - seated at the inauguration. And the CEO pilgrammages to Mar-a-Lago. It seemed like they had made the Faustian bargain to avoid running afoul of the administration's capricious use of executive power. Were business leaders really not looped in that the tariffs were for real? Were they not the intended beneficiaries? Here's something from a December WSB comment on a Benzinga article about then-prospective tariffs:

bmeisler

The bottom 50 percentile of Americans essentially pay no income tax. They do, of course pay sales, tax, property tax - even if they rent they paying their landlord's property tax - excise taxes, etc., all of which are extremely regressive. Tariffs would be an even more regressive tax., That would barely affect the richest Americans. Agree that we're well on our way to another gilded age - but tariffs would put it into overdrive.

I'm not rooting for a gilded age but I'm confused that a hedge fund manager would be complaining about a market pullback caused by policies promised a year ago.

President Trump

Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months - A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!

We might see Trump attempt to fire Jerome Powell. It wouldn't be legal but the illegality is something that does not sit well with between 2 and 6 Supreme Court justices. Eliminating independent agencies is on the P2025 bucket list so perhaps this will be the firing that escalates the matter to the Roberts court.

orockers

The only presidents I care about are dead and green. Benny Franklin ya feel me???

Before getting on the boat last week I weighed the Liberation Day outlook. Since Trump gave it a stupid name, I was inclined to believe the tariff deadline wouldn't be extended: SH, UVXY. But calls were cheap so I also got some TQQQ in case there was a surprise reversal.

The amount of market pullback and outcry has me expecting a tariff pause from the White House in the coming days. OTM ͥ calls might be my Monday morning buy.


The WSB daily thread will probably be fairly entertaining this week.

BooBrew32

Cramer: (while naked, chugging Jim Beam) THEY KNOW NOTHING!! THEY KNOW NOTHING!!

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