The Naked Emperor At Davos
- MAC10
- 2 hours ago
- 3 min read
Trump landed at Davos overnight and proceeded to tell European leaders that the U.S. is a newfound nirvana and Europe is doing everything wrong. Only someone who has never stepped foot out of the U.S. could believe that - which by coincidence happens to be Trump's entire MAGA base. Business leaders in Europe agree with Trump that the U.S. is a much better place to invest because it has a far greater divergence of wealth than Europe. Far friendlier business practices, and far less responsible labor and environmental practices. Money is their sole metric.
The over-arching theme of this blog and one that has kept me consistently bearish for years is the growing idiocy I see in the global "system". Which includes the politics, the fiscal/tax regime, the monetary regime, and of course the existential culture war between liberals and traditionalists. The whole shit pile is disintegrating in broad daylight. No one needs more warning of that fact than the utter buffoonery Trump staged this past week to take over Greenland. At various points he threatened to invade Greenland, take over Canada, and end NATO - but throughout that spectacle, financial market pundits remained complacent. They are frogs in boiling water. Totally desensitized to the unraveling of the system taking place in broad daylight. I used to get a feeling of insanity while enduring this chaos, but not anymore. It all makes sense now. I feel sorry for these people, because they don't see it coming and therefore they have NO plan for when it ends. When this house of cards explodes their lives are effectively over. Those are the stakes we face in confronting this crisis not only economically and financially, but more importantly mentally and spiritually. This farce is ending.
Badly.
Mid-week in Davos let's get back to markets:
All circus aside, one year into Trump's chaotic second term and what really has changed? There is just more risk and more allocation to risk.
Over this past weekend when Trump threatened more tariffs on Europe, what happened when markets opened? Wall Street's consensus 2026 inflation trade went parabolic on the news, but today we learned that those tariffs are not going to happen.
Which has led to an island reversal of fortune for the leading Silver market. A gap up (doji) high followed by a gap down. It's the same for gold and gold stocks.
The AI rally continued this week but the mega caps broke key support this week as well. The hyperscalers that buy all of the AI equipment are getting demolished while the vendors go parabolic:
Sandisk (bottom pane) is now up 100% year to date. That is in less than three full weeks:
My assertion is that Trump's latest "TACO" on Greenland will not have the same effect it had at the lows last April. It will have the opposite effect:
Bitcoins made a second top similar to the all time high back in October:
The semiconductor sector went record overbought on $750 billion of anime porn, which is the latest highlight of the ongoing AI arms race.
And there was one more thing, what was it again?
One day later and bullish pundits have already forgotten that Japan had a credit crisis that imploded global markets on Tuesday.
"Higher JGB yields raise the opportunity cost of funding carry trades and overseas investments that for decades have relied on Japan as the world’s cheapest source of capital," Hansen continued. "As yields rise, capital is pulled back toward home, draining liquidity from global markets"
"Whichever route the Bank of Japan takes, the outcome is the same — tighter global liquidity"
In summary, Trump is a naked emperor, which means that he is an empty shell of a man. Fraudulent in all respects. But unfortunately, many people want to believe him - including all business leaders. They ignore his smoke and mirrors spectacle because he tells them what they want to believe.
But mostly because they don't have a plan for when this all ends.
When this ends they end. They might as well be on stage with Trump.
