Doom and Gloom and Lord Dread's Lair

First, here's some doom and gloom to kick off your weekend:

Atrios (Duncan Black) / Eschaton

Empty Shelves
Global "just in time" supply chains don't have a lot of wiggle room. Things could get very interesting in ways no one can really predict.

“We’ve halted all shipping plans from the Philippines, Vietnam, Indonesia and Malaysia,” the employee said. “Every factory order is halted. Anything that hasn’t been loaded will be scrapped, and the cargo already at sea is being re-costed.”
One client had told the company it was abandoning goods already on the water and giving them to the shipping company, as “no one will buy them after the tariffs are imposed”.
The company’s leadership had returned to China to manage a flood of order cancellations and had instructed its staff to suspend all container business until tariffs stabilise or alternative markets are secured.

Paul Krugman

The Third-Worlding of America
How to destroy 80 years of credibility in less than 3 months
...savvy traders have realized that there’s no coherent economic strategy. There’s an old line about military analysis: “Amateurs talk about tactics, but professionals talk about logistics.” Well, when it comes to taking the pulse of financial markets, amateurs talk about stocks, but professionals talk about bond and currency markets. That’s because bond and currency markets are generally less driven by emotion. There’s no “meme gambling investing” in bond and currency markets. And these markets are both signaling major loss of faith in America.
...It’s hard to overstate the craziness of announcing a radical tariff plan, then announcing a quite different but equally radical plan just a week later. Furthermore, the claim that the wild zigzags in policy were always part of Trump’s plan just adds to the destruction of the administration’s credibility.
But are these tariffs just an opening gambit for trade negotiations? I doubt it.
...The combination of interest rates soaring amid a slump and the currency plunging despite rising interest rates isn’t what we normally expect for advanced countries, let alone the owner of the world’s leading reserve currency. It is, however, what we often see in emerging-market economies. That is, investors have started treating the United States like a third-world economy.
Did I see this coming? No, not really. Unlike the sanewashers, I knew that Trump’s policies would be irresponsible and destructive. However, even I didn’t expect him to destroy credibility accumulated over 80 years in less than three months. But he has.
And even if Trump were to backtrack on everything he’s done, we wouldn’t get the lost credibility back. The whole world, sanewashers aside, now knows that America is run by a mad king, surrounded by enablers, who can’t be trusted to behave rationally.
I don’t know how this ends. In fact, I don’t know what policy will be next week. But that’s basically the point.

Cole Bennett / Cole.notcole

The Dollar’s Cracking And Canada’s on the Hook
The bond market is screaming, oil is falling, and Canada's bracing for impact 04/11/2025
...All signs point to one thing: the U.S. bond market is in trouble, and that spells real danger for Canada.
Canada holds around $300 billion in U.S. Treasury bonds essentially, we’ve loaned the U.S. money and we earn interest in return. It’s the kind of investment central banks and pension funds love because it’s supposed to be ultra-safe.
But not anymore.
In the last 48 hours, the bond market has started to panic. There’s been a major selloff and it’s not because of some random market mood swing. It’s deeper than that....
And What Happens When Confidence Cracks?
The U.S. dollar weakens. And when that happens, the Canadian dollar rises not because our economy is booming, but because investors are losing faith in the U.S.
But that’s bad news for Canadian exporters. A stronger loonie makes our goods more expensive for American buyers. From cars and tech to wheat and timber suddenly, Canadian exports look overpriced.
Meanwhile in Alberta, Trouble Is Brewing
Oil prices are falling. Fast. And with the U.S. dollar sliding too, Alberta is getting hit from both sides: lower revenue for each barrel sold, and fewer buyers able to afford them.
Don’t expect any new pipelines to get built in this climate no investor is going to fund a long-term energy project with prices this volatile and political risk this high.
And if things don’t stabilize soon, mass layoffs could slam Alberta’s oil and gas industry, just as families are already feeling the pinch.
This Couldn’t Come at a Worse Time All of this the bond selloff, the weak U.S. dollar, trade disruptions, and the threat to pensions is unfolding right now, in real time.
This might be the worst possible moment for anyone to be Prime Minister.
And yet, it might also be the most important time to have the right one.

On the lighter side, a visit from Lord Dread:

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Off-topic, but this is hilarious: