Kontrarian Korner #47 - Mel Mattison

Yesterday I had Mel Mattison on to talk about the recent chaos in financial markets and Trump’s tariff plan. We talked about how expects a resolution in the next six to eight weeks on tariff negotiations (maybe sooner), and why China is the target of Trump’s recent announcement. We also covered the crosscurrents facing the administration as far as the financial system and geopolitics. It was a great conversation on what is going on today in financial markets, and should provide some perspective on where things might be going. You can find Mel on Twitter, and he’s worth a follow for anyone interested in finance.

Podcast Summary

* Why he was expecting a pullback in the S&P 500 at the start of the year, why he thinks the selloff could continue into May depending on the path of the tariff talks, and how a rally could be coming by year end.

* The crosscurrents of dealing with the debt refinance, tax receipts from capital gains, deficits, and inflation.

* Why the US needs to have a more robust manufacturing base, and how policymakers might pursue that objective.

* Why China is in the crosshairs of Trump’s recent tariff announcements.

* Triffin’s Dilemma, and the tug of war between the US dollar being the world reserve currency and trade deficits, and the move towards a neutral reserve asset like gold.

* Why real wages is a focus of Scott Bessent and the Trump administration, and why they might tolerate more inflation.

* His thoughts on the commodities complex.

* The difference between sharp selloffs and long drawn out bear markets, and what that means for the recovery period.

* Why he isn’t expecting the worst case scenario of a Great Depression type event.

* The geopolitical chessboard, and why he is more worried about the Middle East than the conflict in Ukraine.

* Trump as a showman, and why he will probably decide he doesn’t want to be Herbert Hoover.

* Why he cautions against a doomsday perspective when it comes to markets.

* Book Recommendations: Lords of Finance by Liaquat Ahamed & Quoz by Mel Mattison.

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