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Welcome to Macro Mashup, the weekly newsletter that distills the content from key voices on macroeconomics, geopolitics, and energy in less than 7 minutes. Thank you for subscribing!
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What Is The Tariff Strategy?
The markets have been waiting for Liberation Day. Now it has arrived, what does it mean?
President Trump said the ‘reciprocal’ tariffs would be 50% of the rate charged to the U.S. The method used by the administration is:
It is cumulative, so the reciprocal rate is stacked on tariffs already levied, e.g. add the reciprocal tariff of 34% to the existing 20% tariff on China, taking the total tariff to 54%
It is not clear how or when this tariff will roll-off
The upside is that this is probably the worst case, so things can only get better from here, and at least we have some certainty now…
What’s The Plan?
Here’s an overview of what Trump is trying to accomplish with his tariff strategy:
The strategy intends to shift the dots toward the reciprocity line. The historical quid pro for this asymmetry has been that the U.S. should receive support from the U.N. votes. This has not worked out so well: most of the beneficiaries of the asymmetrical trade balance with the U.S. have voted with the U.S. less than 50% of the time.
Our post-WWII, post-Bretton Woods deal with the rest of the world is that we buy everyone’s ‘stuff’—which drives the trade deficits—and we ‘export’ premium-priced financial assets such as stocks and bonds.
If this deal is going to change—and President Trump wants it to change—then there will be outflows from stocks and bonds. This is one reason the financial markets are freaking out.
According to Treasury Secretary Scott Bessent, the administration is attempting to significantly reset the economy, but for Main Street, not Wall Street, which is designed to set the U.S. on a much stronger footing.
In the short term, however, the impact on the investment landscape is volatile.
Here are a few screenshots before during and after the tariff announcements:
Before the announcement
SQQQ, the 3x leveraged bet on the NASDAQ going down was down on the day.
After the announcement
SQQQ turned around in the aftermarket yesterday and is now up nearly 14% Thursday afternoon.
I’m Not Smart Enough to Trade This Market - Your Mileage May Differ
Navigating this chaotic market is very hard. The long-term policy post-reset may be a good one, but getting there is like threading the eye of a tiny needle. You have to have great eyes or great trading tools.
The chart above is crazy.
It shows the NASDAQ 100 index and the 3x leveraged inverse ETF SQQQ, which bets on the NDX going down.
The bar at the bottom indicates Relative Strength Index (RSI) divergence. RSI is an indicator of momentum based on price changes in the last 14 days.
The RSI divergence measures divergence from that momentum. Divergence indicates possible reversals of momentum.
Look at the number of bull and bear divergences in the last five days!
Pro Tip: Stay on the sidelines when the market is like this to avoid getting hurt. Bets in either direction could be terribly wrong…or terribly right.
Tools You Can Use If You’re Not a Day Trader
There are two pattern indicators I like over longer cycles:.
Kondratieff Wave
Elliot Wave
Here is a quick compare and contrast:
Kondratieff is a tool for understanding which market season we are in.
Elliot is a way to understand how prices behave within that season.
he chart above shows the gold price over the last five years with Elliot waves plotted.
A quick summary is that a typical wave cycle involves five impulse waves up or down. You can see those waves on the left in 2020 and right since 2024.
There don’t seem to have been many seasons for gold over the last five years: what climate alarmists would describe as a strong secular warming trend!
The fifth wave signals the end of a cycle, where gold seems to be at the moment.
The chart for Bitcoin over a similar period shows many more seasons and waves. The fifth wave occurred at $108,000, followed by a strong movement down, after which it has been range-bound between $80,000 and $90,000.3
Pro Tip: Now might be a good time to realize some gains in gold in anticipation of a possible downward wave—a sell signal, but not all of your position.
Bitcoin is a definite hold at this point. You were wise to sell above $100,000 or even in the 90s, but now, within the $80,000-$90,000 range, no strong trend is visible.
What Is The Genius Act?
It stands for Guiding and Establishing National Innovation for U.S. Stablecoins. Huh?
The legislation is designed to create a sound regulatory framework for stablecoins.
Stablecoins are a convenient way to trade in and out of Bitcoin—or any cryptocurrency—without converting funds back into fiat currency via traditional banking systems.
It sounds boring, but moving cash around into and out of the banking system takes time. With stablecoins, it’s more or less instantaneous.
Stablecoins need to be backed by undoubted collateral, usually T-bills, to make people feel secure doing this.
Tether is the most well-known stablecoin
Tether’s margins exploded since T-Bills started earning 4%+ interest. They hold T-Bills to back the stablecoins and pay no interest, so…$144 billion of market cap at 4% interest margin…
A cynic might say that regulation is about allowing banks to enter this very lucrative business. Here’s the legislative language.
To qualify as a permitted payment stablecoin issuers, a person would have to incorporate in the US and then be either:
A federal qualified nonbank payment stablecoin issuer that have been approved by the Office of the Comptroller of the Currency (OCC) pursuant to terms set forth in the Act.
A subsidiary of an insured depository institution that has been approved by the depository institution’s primary federal regulator (e.g., the Board of Governors of the Federal Reserve System (“Federal Reserve”) for state member banks) pursuant to terms set forth in the Act.
A state qualified payment stablecoin issuer that have been approved by a state payment stablecoin regulator.
Here’s how vital Tether is…and how important stablecoins are about to become.
Takeaway: This is how the government finds another buyer for all the T-bills it needs to issue after it tells China to take back all its surplus capital.
In The Markets
I snapped this image around midday Wednesday, four hours before the formal Whitehouse announcement of tariffs. It captures the mood perfectly.
Volatility is up over 28%
Major indices are sharply down by 3.5-4.5%
Precious metals have had a more volatile week, especially silver, down nearly 6%
BTC has traded relatively better than the stock indices, and credit spreads have tightened a bit
Markets are in the process of repricing earnings to reflect the impact of tariffs. This is going to take a while.
What’s Next/What To Follow?
If you have so far buried your head in the sand on robots, it might be time to start paying attention, because
This excellent piece by The Oregon Group provides a crash course with charts. It’s worth a click.
If you enjoy this newsletter, please email it to a friend by clicking on the button below.
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The Yen Carry Wobbles, China Steps Back, and Sovereign Duration Stops Feeling Frictionless
Welcome to MacroMashup — where we track the plumbing beneath the headlines.
We focus on funding markets, sovereign balance sheets, and the structural flows that determine which assets become collateral — and which become narratives.
If you’re new here, subscribe for weekly macro breakdowns that connect policy, capital flows, and portfolio positioning — before the consequences become obvious.
Calm Surface, Cracked Foundations
This week’s macro tape looks calm on the surface.
The Fed is in blackout mode, parked at 3.50–3.75%. No new dot plot. No press conference shock. Just a steady drip of inflation and labor data for markets to over-interpret.
There is good and bad in the delayed non-farm payrolls numbers:
Good enough to push back on imminent recession/hard-landing narratives (headline beat, unemployment down, participation up).
Not good enough to erase the story of a materially cooled labor market once you incorporate the 2025 revisions (-900k) and very narrow sector leadership.
For markets: bullish for near-term risk sentiment vs "jobs scare" scenarios, but mildly bearish for front-end duration versus hopes of rapid cuts, with a tilt toward a slow-grind softening rather than a cliff.
January is a volatile month, and not that reliable.
Equities rotate instead of breaking, though the AI scare continues to create anxiety at the white-collar end. The market is beginning to try picking winners and losers.
The 10-year chops around.
Nobody says they’re de-risking — but positioning keeps getting tighter.
Then geopolitics delivers peak 2026 energy: a political standoff over a literal bridge.
The Gordie Howe International Bridge — one of the most important trade crossings between Detroit and Windsor — is now a bargaining chip. The White House is threatening to block its opening unless the U.S. gets a “better deal,” up to and including revisiting permits.
When a concrete span becomes leverage, you’re being reminded of something bigger:
Critical infrastructure is no longer sacred.
It’s collateral.
Under the surface, the real story isn’t about bridges.
It’s about who funds what — and who stops funding it.
In this week’s Deep Dive for paid readers, we examine:
Why the yen carry trade just lost its training wheels
Why Japan’s bond market is no longer “sleepy”
Why China is quietly telling banks to temper Treasury exposure
And what happens when sovereign duration stops feeling frictionless
Bitcoin bled lower this week, behaving less like digital gold and more like a liquidity-sensitive risk asset. Hard assets are beginning to diverge — some are collateral, some are narrative.
Markets price stories. Energy prices physics. MacroMashup cuts through hype, coal reality, policy, and capital flows.
Welcome to MacroMashup
A systems-level briefing on markets, energy, geopolitics, and capital flows.
MacroMashup is not a news recap.
We don’t chase headlines, hot takes, or moral theater. We focus on constraints — the physical, financial, and political limits that actually shape markets before narratives catch up.
Each edition connects:
Macro policy and market structure
Energy, infrastructure, and industrial reality
Capital flows across assets, regions, and regimes
The goal isn’t prediction.
It’s orientation — so you can see regime shifts forming while others are still arguing about stories.
If you’re new here, start with the free section below.
👉 Subscribe to MacroMashup to receive:
Weekly free macro briefings
Member-only deep dives into energy, policy, and capital allocation
Private audio notes framing how to read the week calmly
Paid members get the full analysis, charts, and portfolio-level implications.
Markets are trading stories. Energy is trading physics.
The Fed met this week with one objective: don’t spook anyone.
Policy remains nominally unchanged. The language is softer. Powell is stuck in the narrow corridor where inflation isn’t dead, growth isn’t dead — but political tolerance for pain very much is. The only thing reporters really wanted to talk about wasn’t policy at all. It was politics…
And, it was succession.
Rick Rieder at BlackRock is now widely seen as the front-runner to replace Powell, a signal that markets are already gaming the next regime rather than listening to the current one.
Equities keep floating higher for the same reason they’ve been floating all year: relative attractiveness. Compared to everything else on the menu, stocks still look like the least-ugly chaos hedge.
The real tell isn’t in equities.
It’s in shiny rocks.
Gold north of $5,000 and silver above $110 isn’t about CPI prints. It’s about trust.
Central banks keep accumulating quietly.
Retail is finally noticing.
And silver’s industrial role in AI, solar, and electrification is turning a “store of value” into a supply-chain bottleneck.
Meanwhile, Minnesota has become the unwilling focal point of America’s immigration psychodrama.
The killing of Alex Pretti — an ICU nurse and U.S. citizen — by federal immigration officers in Minneapolis detonated a narrative shift. After video evidence dismantled the initial “terrorist” framing, the administration pivoted fast: reviews announced, Tom Homan dispatched, language softened.
State officials are suing. Judges are weighing restraining orders. Even some Republicans are blinking at the optics.
Layer in South Korea slow-rolling U.S. investment commitments — and getting tariff threats in response — and you’re watching an administration try to be pro-market, pro-tariff, tough on immigration, and allergic to viral video all at once.
Then there’s industrial policy.
Washington just wrote another check into the rare-earths casino: up to $277 million in direct support, plus a potential $1.3 billion in additional backing for USA Rare Earth — in exchange for equity and warrants. Venture logic, sovereign balance sheet.
So where does that leave us?
Here’s the MacroMashup snapshot:
Macro regime: shifting from “central banks in charge” to “fiscal math in charge.” Bond markets are slowly realizing they’re financing deficits politics won’t fix.
Policy reality: the tightening narrative is over. De-facto gradual monetization is in. Structurally negative real rates remain the path of least resistance.
Asset implications:
Tailwinds for hard assets, energy, commodities, and durable cash-flow businesses
Bitcoin should benefit eventually — but hasn’t yet
Headwinds for long-duration paper claims dependent on stable real yields
Market behavior:
Mega-caps and Treasuries can levitate on flows and AI narratives
Breadth is improving beneath the Mag 7
Volatility shocks are becoming a feature, not a bug
Capital rotation: slow but real movement away from concentrated U.S. duration risk toward:
Energy and commodities
Geographically diversified real assets
Balance sheets built for financial repression, not perfection
That’s the surface.
Now let’s dig into where the energy story breaks down — and why the narrative no longer matches the operating system.
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