The Macro Market Crash and the End of the Old Order

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, January 21, and today, we are talking about a macro market crash. Before we get into that, however, if you enjoy the breakdown, please go subscribe to it, give it a rating, give it a review, or if you wanna dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly/breakdownpod. Hey, friends. Quick notes. I am dealing with a family emergency down in Florida this week. So the shows are a little bit wonky. They might be out at weird times, and they might be a little bit shorter than normal. Apologies for that, but we will try to continue getting you this content. Now to this show, markets are crashing as the world order unravels. How about that for a starting line? This week has seen a huge sell off with the S and P falling 2% on Tuesday, which is its worst day since October. Stocks, bonds, the dollar are all going down together to find traditional correlations, which could be the start of a major macro event. Now, sometimes draw downs are difficult to diagnose with a range of conflicting causes being debated in the headlines. It's rarely correct to point to a single driver with many theories being possible all at once, But occasionally, there's a moment where each cause is actually a small part of a much broader shift that's happening in the world, a regime change in both markets and global systems. This macro event certainly feels like one of those moments, with the US government deliberately and irrevocably changing the terms of the global order. Commerce secretary Howard Lutnick said as much during his appearance at the World Economic Forum in Davos on Tuesday. Lutnick declared, the Trump administration and myself are here to make a very clear point. Globalization has failed the West and The United States Of America. It's a failed policy. More concretely, the immediate drivers that most are pointing to are Trump's threatened annexation of Greenland and disruption in the Japanese bond market. But both of these seem like symptoms of the global order that govern the post cold war era coming apart. And that, of course, didn't happen all in one weekend. The Trump administration has been discussing the concept since the beginning of their campaign. You could even trace this notion back to the Russian invasion of Ukraine, the pandemic, or even earlier. What changed this week was that the cracks turned into a yawning split. It's no longer possible for markets to shrug off the fractures that make the state of the world far less certain. Still, many debated whether to blame the Greenland annexation or troubles in Japan. Even treasury secretary Scott Bessette weighed in on the issue, stating …