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“Either the entire street is wrong, or the good times will continue to roll.”

So said a top hedge fund manager, remarking recently to On The Money about the weird disconnect he’s seeing lately in how the market is pricing in Trump’s trade war. 

What surprised him is the latest iteration of the market zig-zagging is that after freaking out, investors appear to be pricing in the Trump tariffs as a big bowl of nothing.

The recent maybe irrational exuberance comes even as Trump keeps throwing fuel on the tariff fire.

After pausing them on the world, including the most draconian levies on China, which supplies the US with cheap goods and keeps our inflation rate stable, he just blurted out that he’s doubling tariffs on steel and aluminum.

The market didn’t tank as it did during the early days of the tariff tantrum. In fact, there’s green on the screen for a policy that is supposed to slow growth and/or increase inflation, according to most economists.

So, what gives?

First, economists arent making the market bets you’re seeing. Asset managers, hedge funders, traders and a bunch of so-called mom-and-pop investors continue to show an appetite to buy, and digest bad news in the most favorable light.

The best I can tell is that they’re making a forward-looking bet that Trump, through his trusty and highly competent Treasury Secretary Scott Bessent, will negotiate all of the tariffs — even against super adversaries like China — down to something either meaningless or manageable for the economy to absorb. 

Stocks will then trend higher on his deregulation and tax policy found in the Big Beautiful Bill, the thinking goes.

Commerce Secretary Howard Lutnick’s MAGA-inspired dream that tariffs on foreign goods will create a domestic manufacturing utopia will never materialize, because Lutnick is largely out of the picture. Bessent has taken the reins, and hes crafting trade deals that will lead to stable economic growth, low inflation and high-tech manufacturing jobs the Trump tax and regulatory policy will create, or so the thinking goes.

So, what could go wrong? A lot, according to a few smart Wall Streeters I know as they look back at recent market history and figure out when was the last time the markets defied conventional wisdom and got things so wrong before an economic storm hit.

One big misread came in the run-up to the 2008 financial crisis. Every major CEO and most large investors (not all but most) viewed the 2007 “credit crunch,” where banks cut back lending as housing prices tanked, as simply a downturn in the economic cycle. A few Fed rate cuts, and presto, things would be back to normal.

Recall how the Dow hit then historic highs in October 2007 (around 14K), just before the bottom fell out early the following year. It began with bond insurers imploding, then subprime lenders, then Bear Stearns and Lehman Brothers.

By the end of September 2008, the meltdown hit nearly ever bank and Wall Street firm because the housing downturn was more than a downturn, it impaired the balance sheets of major financial institutions so much that most (except Jamie Dimons fortress balance sheet at JPMorgan) were on the verge of insolvency

After the financial collapse, and the government bailouts, came the Great Recession, which forever altered the political landscape. It ushered in a wave of left-wing (Barack Obama) and later right-wing populism (Donald Trump).

There are plenty of structural differences between 2008 and today. Our banks are pretty sound, but we have more debt, a lot more. We are more dependent on foreign buyers of the debt, without whom interest rates would be much higher as debt payments continue to grow.

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The trade war has pissed off some of our foreign bond buyers, namely Japan and China. 

Plus markets hate being surprised. If we’re experiencing a bit of irrational exuberance before the reality of higher baseline tariffs kick in no matter what deals are cut, if the economy does begin to falter and inflation does pickup, if foreign buyers dont keep buying our debt and interest rates spike, the correction could be pretty brutal if history is any guide, traders tell On The Money.

Until that happens, it’s all blue skies ahead.

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Taliban internet blackout has created an extreme scenario in Afghanistan with far-reaching consequences

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Taliban internet blackout has created an extreme scenario in Afghanistan with far-reaching consequences

At Kabul International Airport, there are dozens of confused looking families.

Many are holding flowers, waiting and hoping their loved ones will touch down.

Others came here hoping to take-off but are now sitting bewildered in the hot sun.

After the Taliban imposed a nationwide shutdown of the internet, no one knows if any flights are still operating and no one can use their phones to find out.

The Taliban caught many in the country off-guard with their shutdown. File pic: West Asia News Agency via Reuters
Image:
The Taliban caught many in the country off-guard with their shutdown. File pic: West Asia News Agency via Reuters

“I am waiting for my brother from Australia,” one man tells me, “but I don’t know if he’s coming”.

Beyond the gates, the runway is full of grounded planes.

After hours of waiting on Tuesday, no international flights took off or arrived at Kabul Airport, despite some airlines scheduling departures.

The Taliban caught many in the country off-guard with their shutdown – reportedly even some of their own ministers.

Initially, there appeared to be no official indication of how long the shutdown might last or an explanation for why it was imposed.

A man tries to use Google on his smartphone in the Afghan capital. Pic: Reuters
Image:
A man tries to use Google on his smartphone in the Afghan capital. Pic: Reuters

On Wednesday, the Taliban government rejected reports of a nationwide internet ban, saying old fibre optic cables are worn out and are being replaced.

But, at the airport, people worry it could be indefinite. Others speculate about rumours it’s to do with security protocols and the movement of officials in the country.

No one knows, and the TV and radio stations they get their news from have not been providing the latest information.

Men try to connect their smart TV to the internet. Pic: Reuters
Image:
Men try to connect their smart TV to the internet. Pic: Reuters

The banks are open but no one can get out money. An employee at the bank in our hotel in Kabul told us they haven’t been able to open their operating systems since Tuesday morning and that Western Union isn’t accessible either.

That’s hugely significant in a country where many are reliant on money sent back by relatives abroad and banks are already struggling with sanctions.

No one can call the police, no one can call an ambulance, and hospitals and medical services are wrestling with how to adjust too.

It follows more than a week of temporary connectivity issues in some parts of the country, with the northern region of Balkh among the first to be affected by a ban on fibre optic internet.

Read more: Internet ban ‘extinguishing the only light that still reaches us’

Taliban fighters ride on a pickup truck during celebrations marking the fourth anniversary of the US withdrawal. Pic: AP
Image:
Taliban fighters ride on a pickup truck during celebrations marking the fourth anniversary of the US withdrawal. Pic: AP

In the last 10 days, we have been travelling across Afghanistan. People in Nangarhar, Kunar, Mazar-i-Sharif and Herat all expressed concern about possible impending blackouts, and we personally experienced a slowdown in connectivity in these places. But nothing as widespread or sustained as this shutdown which is nationwide.

Two weeks ago, the Taliban’s provincial government spokesman Haji Attaullah Zaid said leader Hibatullah Akhundzada had imposed a “complete ban” on cable internet access in Balkh.

“This measure was taken to prevent immorality, and an alternative will be built within the country for necessities,” Mr Zaid said.

It was said to be connected to concerns around pornography – but this was never officially stated by the Taliban.

We have tried to reach the government for comment via satellite phone but with no success.

No one knows how long the shutdown will last. Pic: Reuters
Image:
No one knows how long the shutdown will last. Pic: Reuters

The blackout has disrupted phone services. In countries with limited telecom infrastructure, phone networks are often routed through fibre-optic systems which have now been disabled.

The lack of connectivity has raised immediate concern in the aid community. Amnesty International called it “reckless” and said the shutdown would have “far-reaching consequences for the delivery of aid, access to healthcare and girls’ education”.

After the Taliban banned school for girls over the age of 12, many in the country have been secretly studying online.

Read more from Sky News:
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Everyone we’ve spoken to seems dumbfounded.

During the previous temporary blackouts, the Taliban did warn more was to come. But no one appears to have anticipated this – not ordinary citizens, not foreign officials here in Kabul, not big business, not the airlines or the hospitals.

It is an indication of how quickly this country can turn and the power the Taliban has to disrupt and reshape its future.

Internationally, many are raising concerns that this is an attempt by the Taliban at widespread censorship and further restriction of girls’ education.

Whatever the intention of their move, it has created an extreme scenario: no one in this country can currently contact anyone – for an emergency, for a family member, or for guidance – creating a major information vacuum.

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At least 69 dead as earthquake strikes Philippines, as hospital ‘overwhelmed’

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At least 69 dead as earthquake strikes Philippines, as hospital 'overwhelmed'

At least 69 people have been killed in a powerful 6.9-magnitude earthquake that rocked the central Philippines.

The centre of the quake, which knocked out power lines and sent people running out into the streets, was about 12 miles northeast of Bogo, a coastal city of about 90,000 people on the island of Cebu.

Civil defence official Raffy Alejandro told reporters that the city’s hospital has been “overwhelmed,” and that the number of dead remains “fluid”.

Earlier, authorities said at least 14 residents in Bogo had died. Another official said more than 150 people were injured.

The tremor was set off by movement in a local fault at a depth of three miles at around 10pm (3pm in the UK) on Tuesday.

Pic: AP
Image:
Pic: AP

Gemma Villamor, head of the local disaster office, said earlier that in the town of Medellin, near Bogo, at least 12 residents died when the ceilings and walls of their homes collapsed, with some asleep at the time.

And in nearby San Remigio, vice mayor Alfie Reynes added that five people – including three coastguard members, a firefighter, and a child – were killed by collapsing walls while fleeing a basketball game.

He later told DZMM Radio: “It is raining heavily and there is no electricity so we really need help, especially in the northern part because there’s a scarcity of water after supply lines were damaged by the earthquake.”

Read more from Sky News:
US government shuts down after last-ditch votes fail
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Medical teams in Cebu city, central Philippines, help the injured.  Pic: AP
Image:
Medical teams in Cebu city, central Philippines, help the injured. Pic: AP

Pic: AP
Image:
Pic: AP

Businesses and landmark buildings have suffered damage, including an old Catholic church in the town of Daanbantayan, and roads have shown deep cracks.

The Philippine Institute of Volcanology and Seismology briefly issued a tsunami warning for Cebu and nearby provinces, but later lifted it after no unusual waves were detected.

The quake struck while Cebu and surrounding areas were still recovering from a severe storm that hit the central region days earlier, killing at least 27 people mainly from drownings and fallen trees, cutting power across cities, and forcing evacuations.

The Philippines, located on the Pacific Ring of Fire, is highly prone to earthquakes and volcanic eruptions.

It also faces around 20 typhoons and storms annually, making it one of the world’s most disaster-prone nations.

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Princess Anne makes surprise Ukraine visit – and leaves a personal tribute

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Princess Anne makes surprise Ukraine visit - and leaves a personal tribute

Princess Anne has placed a toy bear as a poignant tribute at a children’s memorial in Ukraine, during an unexpected visit to the war-ravaged country where she also met Volodymyr Zelenskyy.

The King’s sister travelled to the capital Kyiv on Tuesday, at the request of the Foreign Office, in a show of solidarity with children and families facing the horrors of the Russian invasion.

The Princess Royal met Mr Zelenskyy to discuss the UK’s support for Ukraine and its ongoing resistance.

The Princess Royal and First Lady Olena Zelenska laid soft toys during a visit to a memorial for children killed in the war. Pic: PA
Image:
The Princess Royal and First Lady Olena Zelenska laid soft toys during a visit to a memorial for children killed in the war. Pic: PA

Anne’s secret visit, which was not publicised beforehand for security reasons, came just two days after a Russian aerial bombardment killed at least four people in Kyiv, including a 12-year-old girl, and injured at least 70 others.

The attack, which lasted more than 12 hours, was one of the heaviest in recent months.

The purpose of her trip was to highlight the traumatic experiences of children living on the frontline, Buckingham Palace said.

Joining First Lady Olena Zelenska at the children’s memorial, Anne left the teddy in tribute to youngsters killed in the conflict, saying her daughter Zara Tindall had the same bear.

As the 75-year-old princess stepped back after placing the traditional-looking teddy at the base of the memorial alongside scores of other cuddly toys, she told Mrs Zelenska: “That was one that my daughter had.”

Mrs Zelenska also left a bear in tribute.

Anne is the latest British royal to make a trip to Kyiv. Pic: PA
Image:
Anne is the latest British royal to make a trip to Kyiv. Pic: PA

The site commemorates more than 650 children who have died since the start of the conflict in 2022.

In Kyiv, she also met female police and armed forces representatives and heard about their key role protecting women and children.

Visiting the Child Rights Protection Centre, she spoke to families and children who have been returned and reintegrated, and met some of those working to return more Ukrainian children.

Read more:
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Princess Anne spoke to young people who lived under occupation. Pic: PA
Image:
Princess Anne spoke to young people who lived under occupation. Pic: PA

The Princess Royal met Ukrainian war veterans relaxing in a salt therapy room at a rehabilitation centre. Pic: PA
Image:
The Princess Royal met Ukrainian war veterans relaxing in a salt therapy room at a rehabilitation centre. Pic: PA

More than 19,500 Ukrainian children have been forcibly transferred or deported by the Russian authorities to Russia and the occupied territories of Ukraine.

Princess Anne is the second working royal to visit Ukraine.

In April last year, the Duchess of Edinburgh was the first to go and bring a letter of support from the King.

Anne’s trip also follows that of her nephew Prince Harry, who made a surprise visit to the Ukrainian capital just over two weeks ago with a team from his Invictus Games Foundation.

Anne also visited a rehabilitation centre, where she met Ukrainian veterans returning from the frontline.

The King has met Mr Zelenskyy a number of times and marked the country’s independence day in August by sending a message of solidarity.

During Donald Trump’s recent state visit to the UK, Charles also took the opportunity to stress the importance of supporting Ukraine.

He told the US president in his banquet speech: “Today, as tyranny once again threatens Europe, we and our allies stand together in support of Ukraine, to deter aggression and secure peace.”

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