Market Musings 4/9/25: "My Bad"
Trusting your portfolio to a higher power
In yesterday's post, I said step 1 of dealing with a crisis is admitting that you have a problem. Taking that analogy one step further, step 2 of Alcoholics Anonymous, states that one must “become aware of a power greater than ourselves that could restore us to sanity”.
On his twitter page just 3 days ago, Bill Ackman in a late night text apologized to the world for putting too much faith in the higher power of “economic rationality”.
“I don’t think this was foreseeable. I assumed economic rationality would be paramount. My bad.”
After months of being one of the most public cheerleaders for the economic agenda for the 47th President, Ackman humbly admitted that “economic rationality” was nowhere to be found in the tariff plan about to go into effect on April 9th.
Three days later at 6:34 AM the morning the full slate reciprocal tariffs went into effect, Ackman wrote a 600+ word essay on Twitter practically begging the gods of “economic rationality” to step in and save his investment portfolio from eternal damnation!
He prayed for a 90 day tariff pause, so that his cold brew coffee startup would be spared Armageddon.
And then at 1:18 PM today, his prayers were answered. Not by God, but the next best thing. In a post on “Truth” Social, the social media equivalent of a burning bush, the President announced that the world's dumbest game of chicken was coming to an end, at least temporarily.
The President said “I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
This applied to everyone EXCEPT China. Global equity markets exploded higher; more than making up losses from the night before.
To paraphrase from Psalm 30:5: “For his anger is but for a moment…Weeping may endure for a night….but joy comes in the morning.”
Now while I am thrilled that the worst case scenario, DEEP Global recession, has been taken off the table, the spectacle that we've seen this week is no way to manage the world's biggest economy.
Trillions of dollars of capital should not ebb and flow based on the whims of one man. He may consider himself a god, but caving on his signature policy after about 12 hours proves he is indeed a mere mortal.
As always, the devil will be in the details. Before I can even consider buying stocks again, I will have to re-examine the tariffs that are still in place and what that means for the economy for the rest of the year.
90 days from today is July 8th, which is pretty close to the start of when public companies announce their second quarter earnings. I know from experience working under CFOs, the summer is also when many companies begin to contemplate their 2026 budgets. Without firm details by then, we can find ourselves right back in the same hell of uncertainty.
Who knows what new issues we will be dealing with by the summer?! But for now, today is the day that the orange man has made. Let us rejoice today and be glad.
-Accrued Interest