What we’re reading (4/12)
“Wall Street’s ‘Smart Money’ Braced for Tariff Chaos. It Was Still Caught Off Guard.” (Wall Street Journal). “Hedge-fund manager Edouard de Langlade had the best trading day of his career after President Trump unveiled his sweeping ‘Liberation Day’ tariffs. Markets plunged the following day, resulting in a huge payoff for Langlade’s multibillion-dollar bet against U.S. stocks and the dollar. ‘When Trump was elected, I thought, ‘The crash is about to come,’’ said de Langlade, founder of Swiss hedge-fund firm EDL Capital, which gained 6% that day. What he didn’t fully see coming: Stocks ripping higher Wednesday after Trump delayed most of his so-called reciprocal tariffs.”
“Investors Are Growing Concerned About A U.S. Asset Exodus As Treasuries And The Dollar Decline” (CNBC). “The April sell-off for financial markets has been wider and more volatile than typical pullbacks, fueling concern that the aggressive and constantly changing trade policy from Washington, D.C. could be doing long-term damage to the financial standing of the U.S.”
“America Risks ‘Moron Premium’ After Trump’s Tariffs Chaos” (The Telegraph). “After Liz Truss’s ill-fated mini-Budget blew up the bond market three years ago, the former prime minister was forced into an embarrassing climbdown. As well as sacking her chancellor Kwasi Kwarteng, she also quickly unwound her package of unfunded tax cuts to keep the markets at bay. However, despite the radical reversal, borrowing costs did not return to their old levels and Britain was left paying what was unkindly dubbed a ‘moron premium’. The US is now at risk of suffering a similar fate.”
“What We’ve Learned From 150 Years Of Stock Market Crashes” (Morningstar). “So, what does this history tell us about navigating volatile markets? Mainly, that they’re worth navigating. The markets recovered after their stressful period in 2022—just as they did after a 79% decline in the early 1930s. And that’s the point: Market crashes always feel scary when they happen, but there’s no way to know right now whether we’re encountering a minor correction or looking down the barrel of the next Great Depression.”
“The Russian Paradox” (Marginal Revolution). “So much education, so little human capital”.
