Chaos is a ladder

plus: even recessions are different, stubborn bond yields, and more

"Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude." – Thomas Jefferson ||

Helloooo everyone! I hope you’re all hanging in there! I’m relieved to report my flu is almost gone, just lingering wooziness and breathlessness, BUT most importantly coffee doesn’t taste terrible anymore.

I do hope none of you or your loved ones have been affected by the floods in Texas – so frightening. 🙏

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IN THIS NEWSLETTER:

• Chaos is a ladder

• Markets: those bond yields

• Podcast notes: Even recessions have changed

If you’re not a premium subscriber, I hope you’ll consider becoming one! You get ~daily commentary on markets, tokenization, regulation and other signs that crypto IS impacting the macro landscape. As well as relevant links and music recommendations ‘cos why not.

WHAT I’M WATCHING:

“Chaos is a ladder”

The above phrase, attributed to George R. R. Martin, serves as a reminder that the trade confusion buffeting the world can be seen less as an end and more as a beginning. A cute sentiment, sure, that hardly does justice to the colossal size of the economies involved, and the cost of the chaos; but it is no less appropriate given the bigger arc of global realignment already underway.

It turns out, to the surprise of many, that this time Trump actually meant what he said – yesterday he sent out letters to 14 countries informing them of the tariffs to be applied as of August 1st. Maybe. The date might change. So might the amount. But whatever, the spectacle was delivered, which is what matters.

So far, the assigned levels are (in alphabetical order):

• Bangladesh - 35%

• Bosnia & Herzegovina - 30%

• Cambodia - 36%

• Indonesia - 32%

• Japan - 25%

• Kazakhstan - 25%

• Laos - 40%

• Malaysia - 25%

• Myanmar - 40%

• Serbia - 35%

• South Africa - 30%

• South Korea - 25%

• Thailand - 36%

• Tunisia - 25%

And here is an example of one of the letters sent:

(via @NickTimiraos)

Even beyond the random capitalization, bizarre all-caps and eighth-grade syntax, the eye-watering arrogance of the language portrays a leader in a bubble, a master of bluster or both, which must surely further weaken American’s standing in the world of strategic diplomacy.

I mean:

“It is a Great Honor for me to send you this letter”

“the United States of America has agreed to continue working with Korea”

“we invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far”

And the absolute kicker:

“You will never be disappointed with The United States of America.”

As always, the antidote to the cringe and the noise lies in focusing on the bigger picture.