Second Order Effects

Tuesday, April 8th, 2025

World Events - Trump’s Tariff Will Pummel Vietnam 

The Economists

President Trump’s 46% tariffs on Vietnamese exports, set to take effect April 9, threaten to derail Vietnam’s export-driven economy by targeting its $123 billion trade surplus with the U.S., which accounts for 27% of its GDP. While Vietnam has sought to mitigate the impact through negotiations—including offering to reduce U.S. tariffs to zero in exchange for reciprocal treatment—Washington’s focus on non-tariff barriers like alleged currency manipulation and Chinese transshipment through Vietnam complicates talks. The tariffs could slash Vietnam’s growth by half, with Oxford Economics projecting a 3.5% GDP reduction by 2026, while undermining its role in "China-plus-one" supply chain diversification strategies. Though foreign investors may delay relocating due to high sunk costs and potential currency depreciation could boost competitiveness in non-U.S. markets, the measures risk pushing Vietnam closer to China economically and jeopardizing its 8% growth target for 2025.

Tech - Microsoft Used Co-Pilot to Build Quake, a Video Game

The Verge

Microsoft’s experimental AI-generated Quake II demo, powered by its Muse and WHAM models, offers a glitchy glimpse into AI-driven gameplay but highlights significant technical limitations. The browser-based demo dynamically generates sequences in response to player inputs, simulating a traditional game engine, yet struggles with blurry visuals, inconsistent enemy behavior, and a disorienting lack of object permanence—elements vanish if out of sight for 0.9 seconds. While Microsoft positions this as a step toward AI-assisted game preservation and prototyping, critics note its choppy performance and rudimentary interactions, with online debates questioning its practicality compared to conventional engines. The project aligns with broader Copilot for Gaming initiatives, which aim to integrate AI coaching and cross-platform accessibility, though current implementations remain more conceptual than transformative.

Economics - Second Order Effects of Tariff 

The Economists

The real danger in chaotic markets lies in the potential for a self-reinforcing doom loop, where plunging asset prices trigger margin calls, forced liquidations, and cascading volatility. As seen in recent days—with U.S. stocks plummeting at pandemic-era speeds and even haven assets like gold and Treasuries selling off—investors face mounting pressure to offload positions to meet collateral demands, exacerbating downward spirals. Elevated volatility expectations (e.g., the VIX spike) and surging corporate bond yields (junk spreads widening to 4.5 percentage points) amplify systemic risks, as firms face refinancing stress and risk managers unwind leveraged bets. Unlike past crises, central banks now hesitate to intervene, with the Fed prioritizing inflation control over market stabilization, leaving markets vulnerable to feedback loops where panic begets further panic.

Running —  Advice From the Pro

Peloton 

Running is a simple yet rewarding activity, but improving as a runner requires intention and balance. Key tips include maintaining consistency with frequent, shorter runs to build endurance while minimizing injury risk, and embracing easy days to allow your body to recover and adapt. Focus on mindset, breathing, and posture rather than obsessing over perfect form, and listen to your body’s signals to avoid overtraining. Gradually increase mileage to build endurance safely, and incorporate variety, such as hill sprints or interval training, to boost speed. Beyond running, prioritize rest, strength training, and proper recovery routines like stretching to enhance performance and reduce injury risk. With patience and a holistic approach, runners can optimize their training and enjoy the journey toward their goals.

Baking Recipe —  Almond Croissant Recipe 

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Song Rec - Locked Away (R City)

Quote of the Day 

“As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.” ― Albert Einstein