Spekulatius

It’s a combination of harder work and better education. While there is a cohort of immigrants with low education, the percentage of people with bachelors degrees is about the same than for the US (~35%) about 13% of legal immigrants have an postgraduate degree which is far higher than the US average. If you visit any company in high tech or even tech related sector, you will see a staggering amount of immigrants working in engineering and management.

Not just debt, but US equities have also benefited from the USD “ recycling”. I think part of the US equity premium is due to this factor.

Private markets= lots of fees and no liquidity. Stuff them in target date funds which already have a fee layer on top of the mutual fund fees. Exit from private equity funds at Target date TBD. Great for Blackrock but my guess is that customers won’t be able to afford yachts.

Yes, the tariffs are coming no matter what. It seems to make no sense to even make a deal with Trump because the outcome is the same. I think the trade alliances will form around and without the US. Nothing nefarious about it if the US exits NAFTA, the NAFTA remains and evolves, makes an alliance with the EU, maybe South America. The US become a trade Island with expensive goods compared to world market prices. US soft power around the globe will wane.

The trade deficit and the fiscal deficit are too different things but there is a correlation. A fiscal deficit means more private sector spending (since a deficit brings money in the private sector) which also tends to lead to more imports. I think as a group, legal immigrants are more productive than the existing citizens. The best way to improve economic outcomes is to increase legal immigration, imo. Birth rates are hard to move upwards. On the hypergamous issue of woman, I think some perceptions will need to change because I can see that within 10 years, the younger cohort women will earn more than comparable men of same age , due to better education. I think better wages will most likely mean better wages for both men and women so that most likely wont solve the problem.

I don’t know if it’s dumb or ignorant or just propaganda. probably all of the above : it’s actually quite simple. SS has nothing to do with being a citizen. As a legal resident, you need to get one to have a legal job. When I gets my greencard and started my job walked in the local SS admin building and got one right away on my first day.

That’s a pretty good take on what I think will happen to Elon:

Would be nice to have a candidate to vote for that most people would like. Thats really the democratic parties job. Hoping that enough people hate MAGA to vote for anybody that evolves through the party ranks to become a candidate is strategy at best. It would also a good opportunity to get rid of some undemocratic wrinkles like the supermandates.

This article from the NYT is one of best reports on the war I have read. The level of detail is astonishing. Thank you for sharing.

Looks like the drug industry is next with a tariff bomb. That actually makes more sense to me than the auto tariffs. Most Pharma ingredients come from China and India which to me seem to me much more of a potential security problem than cars and car parts from Mexico and Canada.

Yes, but tariffs for solar cells from China were already at 50% under Biden and now up another 10% under Trump. I am not sure incremental new tariffs are going to do much here.

Tesla market shares in Europe overall have shrunk by ~40% and, despite the EV market recovering. baically this means that Tesla market share has halved. People are well aware of Elon role in politics and are acting accordingly. Europeans are shocked about the Trump government and I don’t think this will change. Teslas sales in China are also shrinking but for differnt reasons- the market has become hypercompetiive and BYD cars have caught up with Teslas and maybe even have become better. In any case, the Chinese have started to prefer domestic products.

If we balance both the budget and the trade deficit, the standard of living for most people will go down, there is almost no question about it. Think about this - Both deficits mean that we can consume more than we can produce right now. It doesn’t even matter how you balance be ot tariffs, tax consumption l tax income etc. They mean that goods will get more expensive and the average person will have to consume less. Even if we manage to move manufacturing back to the US, it does not mean that the GDP will grow. It will just move some jobs from the service to the manufacturing sector for little gain in wages. I mentioned before that the good paying manufacturing jobs really don’t exist any more. The entry level jobs in manufacturing pay about as well as service sector jobs. The only one paying better are where the unions have power (think longshoremen ). Most jobs moved to the US due to tariffs will be lower productivity jobs, otherwise they would exist already without tariffs (for the most part) It is fine if you phrase it like this and say - we have been living above our means and need to tighten our belts and that’s just how it is. Instead Bessent talks about taking a bit of pains here but he doesn’t say pain is likely permanent. The only way out of this dilemma here is a massive productivity boom, because that is what is creating wealth. Not tariffs , bringing manufacturing home (at higher cost= lower productivity). Deregulation could help here, new technologies like AI potentially, new drugs like the GLP-1 (game changer for many people) or in the long run building run just build human capital (education and qualifications). The rest is just noise.

The easiest way to devalue a reserve currency to make it not a reserve currency any more, by making it unattractive for foreigners to hold it. This will balance the trade balance..

This debatable a view. if you agree with the policies of a person but that person has a personality that you think is unsuited for public office at the same time, than it is dangerous to vote for this person.

Just my guess, but I think we will wish that Trump concentrates on the same things way before his presidency is over.

And revised them down afterwards. The employment data is based on surveys that later get corrected. Surveys are inherently imprecise.

Very well written article on why MAGA hates Europe.I mentioned this before - Trump particularly hates the EU: https://www.wsj.com/politics/what-does-maga-have-against-europe-96416042?mod=hp_lead_pos5

Fake job numbers?

My sons state college (Umass Amherst) in on the list. I have no idea why. I followed what happened there and IMO there is no evidence of antisemitic discrimination there from the Umass leadership whatsoever. Are we becoming a totalitarian state where free speech isn’t allowed any more? I also found this article where a young Russian scientist (who fled Russia) was detained by ICE and is threatened to be sent back to a Russia because she did not declare frog embryos at customs? I guess ICE is just looking for excuses to detain and expel people now. https://www.msn.com/en-us/news/crime/russian-scientist-working-at-harvard-medical-school-detained-by-ice-at-boston-airport/ar-AA1BQ2Xe?ocid=BingNewsSerp&cvid=1b3c74a6788049e789fb62b294216c1d&ei=33

What has the one to do with the other?

Maybe the Trump administration will give us adjusted inflation, GDP growth and unemployment numbers, as if Trump wasn't elected.

80% of Teslas value related to Elon Musk and the project he promised ( self autonomy, Optimismus robots). This is what the bulls think. Without Musk, Tesla is just a car company that would trade for 10-15x earnings, maybe less. His job is safe.

I bought added a bit $GPC based on the thesis that car repair shops and car parts retailer will do well. I know there are more pure plays out there but $AZO is too expensive (and ran already) and $AAP too iffy and crappy. I had already a bit of $GPC and decided to add a bit today when the stock is down but should be up (imo).

It will create quite a bit of work for manufacturers to account for all those tariffs in their supply chain so the tariff calculation for a car is correct, based on country of origin and what part it is. Also the customs service or whoever does the calculation and audits will have their hands full and probably need to be expanded. People forget this about free trade, it not just get rid of tariffs but also makes trade easier, lowering the actual costs of doing business. The USA is a huge market , so creating a trade Island is actually possible for many product unlike the UK. On the other hand, the tariff and trade barriers seem much higher than what the UK actually incurred. I do think the retaliation will most likely taget US service exports where the US has a large trade surplus ( that is often neglected when trade balances are discussed). That’s could hit tech companies.