Stonkholm Syndrome ™️
Making money in Trading is great, but coming up with a new Meme? Priceless!
We named our latest as the Stonkholm Syndrome™️, defined as “when an initial, unexpected negative headline moves the Market down, but then when the subsequent outcome isn’t as bad as feared, but still worse than the original expectation, the Market rallies to a higher level than the original starting point” (source: Shrubipedia).
We can better illustrate this with the case of the Nikkei Index, which is now higher than the pre-Liberation Day levels, simply because the US Tariffs on Japan came in "less bad” than expected, at 15% vs 25% originally feared.
We also summarized the Stonkholm Syndrome ™️with this child-friendly Meme:
Of course, the same applies to the S&P, the Nasdaq and the DAX as the Stonkholm Syndrome has spread across the globe.
It seems that overall Tariffs will rise to 15-20%, which was the scenario the Market feared back in April 2025, but is now cheering for because it’s “not as bad as it could have been”. Stonkholm Syndrome!
The “funniest outcome” would be if Tariffs actually do have a negative impact in 3-6 months down the line, and we all wake up to a nasty reality check after the initial sugar-rush of the “Stonkholm Syndrome”.
But for now, we take what the Market gives us today. After all, it could’ve been worse. I mean, we could’ve been like Jerome Powell, forced to give a tour to President Trump of the Fed construction site. The video is just insane, you can see it here. Even the “Coldplay couple” seemed less awkward than poor JPow!
Poor Jerome is going through his own version of the “Stonkholm Syndrome”. His new boss is kinda like his old boss and Bessent has nearly completed his transformation to a Tamagotchi. When I read this comment by Yellen and then Bessent’s reply , I was literally on the floor:
In fact, Bessent and Yellen are becoming indistinguishable in their policies:
The upcoming QRA next week may further prove this point, as we will see whether Bessent goes for a “dovish” mix of Bills vs Coupons, as he recently guided, now that Yellen has shown him the way:
As I said multiple times, I am prepared for any outcome, as the “BBBB-Barbell Portfolio” with a hefty “GAG” allocation is the real All-Weather Portfolio during this Golden Age of Grift. I will give a Portfolio update separately in a future post.
Good luck out there and don’t forget to use sunscreen!
🌳🙏
Disclaimer:
This isn’t financial advice. This is the equivalent of Monty Python for finance but worse: This is the trading blog of a shrub.
Don’t be Stupid. Seriously. How many times do I have to repeat this ….