Monday, April 02, 2018

Bullying the bully

A school yard bully's entire calculation rests on the other kid not standing up to him.

If the kid doesn't submit to the bullying - the bully is SOL.

If the kid then bullies the bully - the bully is fucked.

That is what has happened to Trump.

He thought he could continue to shoot his mouth off and all the idiots he had at his beck and call at CNBCs squawk desk would keep parroting the line that "China is too weak to respond".

Well.. China responded - with 126 sanctions on US imports from states the voted for Trump.

I don't think this train will slide very far - but Trump is stuck high up on the escalation ladder with the states that voted for him racking up the economic costs.

I suppose Trump could have taken a hint from

a) The fact that the French threatened GWB with the same thing when he tried to get pushy with them for not supporting the Iraq invasion. Today the Trumpers are all constantly trying to point out that they "were against the Iraq invasion" - but I am old enough to recall which exact folks were talking about renaming "French Fries" as "Freedom Fries". (Hint - its the same exact people as the Trumpers of today).

b) The fact that the MSS picked up the Anbang chairman and told Kushner to forget about getting money for his failed property deals.

But why learn from history when you can repeat it?

Why bother learning anything when you can just fake news with Sean Hannity?

So where does this leave us

A) The tariffs are not as bad as the sore on Trump's ego. That is going to fuel a hostility all its own. I mean come on - for a guy who exudes manliness out of every pore - he looks Xi Jinping's bitch now. He's not going to like being owned like that. (*)
B) The mercantile or commercial banks which supply the ultra large capacity shipping companies (like Hanjin) with operating capital are now at risk of facing defaults. This is going to make lending to them toxic (No one in their right minds will be willing to dole out capital to large volume shipping when there is such a high risk of a major trade war breaking out).
C) The overt engagement of DPRK by the Chinese shows that China is far from out of options even if Trump escalates.

(*) - whatever the fuck that was with Mexico last week - yeah lets see how that plays out. A Chinese Tariff and a collapse of NAFTA should guarantee a famine in the Midwest - but who knows maybe Trump will shit out cake from his ass and his voters can eat that instead of bread.

The Dow will wobble in a completely reasonable fashion, as realization of the toxicity and subsequent exposure to mercantile/commercial debt in the shipping sector becomes known in detail.


At 8:15 AM, Blogger Ralphy said...

in matters of trade, it is china who is the bully. and a bully with no real muscle. its all payola from them whether the clinton crime family foundation or mitch mcconnel's (senate majority leader) wife raking in chinese graft, it simply makes no difference. joe biden's family is not immune nor is john kerry. they're all slurping at the chinese trough betraying their fellow citizens, dumb suckers everyone of them.


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