Observations: Have you understood nothing?
Markets struggle to differentiate setbacks from reversals
“Whoever double-crosses me and leaves me alive, he understands nothing about Tuco. Nothing!”
– Tuco Benedicto Pacifico Juan-Marie Ramírez, known as “the Rat” from “The Good, the Bad and the Ugly”
An unendingly comical aspect of Trump 2.0 is the ridiculous pretzels into which both President Trump’s admirers and opponents twist themselves. The former treats any setback to his agenda as a new move in a complex game of 4D chess that only they and the president understand. The latter somehow see no contradiction between their jubilation that a court’s decision will bring the president to heel and their firm conviction that he is a would-be dictator who stomps on the rule of law.
Markets have rallied on a court ruling against the Trump Administration’s tariff powers – temporarily stayed by an appeals court – and an increasing belief in the “TACO” (Trump always chickens out) trade. Markets loathe both change and Uncertainty, hence naturally chafe at President Trump’s revolutionary agenda. That raises the question: does the market reaction represent sound judgement or the contorted hopes of Trump opponents to halt his platform? A quick Observation on trade law and tacos seems in order.