So much for the trade war being “good and easy to win.” Let’s be honest. Trump has been grinding away on it for almost a year now, and China has barely flinched in its negotiations. On Friday the tariff war became personal because it will now tap your own budget and every business budget in town.
If you think Trump’s boosting of the amperage means China will settle quickly, you may be one of the people I talked about in my last article, “The Zombie Epocalypse: A River of Denial Floods Markets Everywhere.” Since you are a reader here, however, that is unlikely. In which case, this article is not to restore you sanity but to help you maintain it in an environment where you are surrounded by opiated fools.
To my own surprise, it turned out my last article understated how lulled in denial market madness has become, for Friday yielded a revelation that the Zombie Epocalypse has infected the entire earth when stocks everywhere rose euphorically upon receiving news that the tariff war is fully engaged!
While the US market started off in week-long depression, it ultimately lifted to where the Dow posted its first gain in an otherwise miserable week (+114), though the S&P and Nasdaq barely lifted their heads from their stupor to look around. Bull and bear alike, however, had expected the market to plunge if Trump and Xi failed to find a meeting of the minds, but it didn’t.
Mind you, Friday’s delirium may prove to be transitory. Reality could set in on Monday. At first, people are scared and the market tumbles, as it did at the open; then they see that it isn’t tumbling as badly as they feared, so their drug-addled brains return readily to their former euphoria; and, so, the weekend party begins. However, the hangover and indigestion from the party bombards them all day Monday as they start to think more soberly.
Read the rest here: The Great Recession