changegonnacome

The democratic collapse and the Trump victory narrative remain completely detached from reality.....as you found out last night in Wisconsin......and as you can see from the Presidential......I agree with your assessment that the Democrats lost their minds with this culture war nonsense......but even with them losing their damn minds down a pointless trans rabbit hole.....Captain Chaos & his version of the Republican party could only pull off a historically narrow popular vote win for the WH and an even more historically narrow majority in the House. This is not what a mandate looks like for radical change........and the GOP are going to get their asses handed to them in Midterms. Closest Presidential Elections by Popular Vote (1900–2024): 1960: John F. Kennedy vs. Richard Nixon — 0.17% 2000: George W. Bush vs. Al Gore — 0.51% 1968: Richard Nixon vs. Hubert Humphrey — 0.70% 2024: Donald Trump vs. Kamala Harris — 1.48% 1976: Jimmy Carter vs. Gerald Ford — 2.06% 2004: George W. Bush vs. John Kerry — 2.46% 7. 1916: Woodrow Wilson vs. Charles Hughes — 3.12%

Agree - if true its beyond aggressive......Chimerica is dead.....long live China v America the UFC edition....sounds like the opening bell in the official overt Cold War 2.0 has just been rung......and done at a time when the Chinese economy is fragile......to the Chinese I'm sure it feels like economic warfare......cause it kinda is. The Taiwan moment inches ever closer.....it feels like a moment when Xi might announce the arrival of China as a peer not a little brother who can be pushed around. Still can't help but feel that Captain Chaos looks at the each of these countries tariff punishments as just a future PR event where he can sell some climbdown as a great deal that only he could have gotten for USA Inc..........all nonsense, all not meaningful in the scheme of things.....but it puts him at the centre of things. The great dealmakers. The saviour of the Republic. I say this because without a relatively quick climbdown on this stuff its political suicide.....that voter in Akron, Ohio is easily two or three years away from even knowing somebody who might have benefited from tariffs whereas in two to three months he going to be staring twice at his Walmart receipt wondering what the fuck is going on.

Exactly right......It's very strange - he just nerfed the Trump/MAGA coalition that put him over the top in 2016 and 2024...which I kind of define as stereotypical non-college educated democratic voter who lost touch with the democratic party in the mid-2010's with the whole DEI thing and liked Trump's plain speak.......their Walmart basket of clothes, home goods, auto repair stuffs.....its Bangladesh / China / Vietnam all the way......its a real kick in the teeth for these folks with the cumulative inflation they've had.....and just as 2024 saw real wage growth kick in for the first time since 2019....Trump decides 2025 would be a good year to murder their household purchasing power.

Explains why the 30-40 page tariff document I was expecting from treasury is never coming. They are literally making this stuff up on the fly….they’re not trying to balance anything….the point of tariffs are tariffs….the real point of tariffs of course is that it puts Captain Chaos at the centre of the world…..a narcissists dream. Can’t wait for the hangover.

True.

" The White House clarified to CNBC’s Eamon Javers that the tariff rate on Beijing comes in addition to existing 20% tariffs on Chinese imports, meaning the true tariff rate on China is 54%." 54%.......on China......

Yep - total information underload from the WH right now...I was expecting a 30 page document......all we got was Captain Chaos holding a piece of cardboard in the wind.....quite funny........but a flat 10% on ALL imports seems to be the base tariff layer.....on top of which countries are getting penalized.

Bangladesh & Vietnam - 37% & 46%........big opportunity to get your kids into the apparel production business.....stitching, sowing, dye-ing......live the American dream MAGA....by going back in history 80yrs....in reality....your kids are gonna need a bigger allowance......cause the basket of clothes, toys they pick up in Target/Walmart is going up, up When you see something as radical as this is - in terms of its impact to everyday American's pocket books just remember this is the Trump mandate has to do this.....to say nothing about the FAKE emergency powers he envoked to do this: Closest Presidential Elections by Popular Vote (1900–2024): 1960: John F. Kennedy vs. Richard Nixon — 0.17% 2000: George W. Bush vs. Al Gore — 0.51% 1968: Richard Nixon vs. Hubert Humphrey — 0.70% 2024: Donald Trump vs. Kamala Harris — 1.48% 1976: Jimmy Carter vs. Gerald Ford — 2.06% 2004: George W. Bush vs. John Kerry — 2.46% 1916: Woodrow Wilson vs. Charles Hughes — 3.12%

No doubt - and to it you can add Manhattan, Miami etc real estate…. Lots of US assets have a bid underpinned by recycling - but also underpinned by the predictability/reliability of the sovereign (rule of law, property rights). Those two things are being eroded….the big question is whether MAGA exists without Captain Chaos at the top….if it has no future….for example this tariff gambit blows up in its face….then one could see international folks starting to look through to the midterms first, then 2028 for an off ramp from chaos…big question…. is whether the Trump effect propagates over time or creates a populist/nationalist of the left to replace it…or if we can ever get back to the centre. A lot of the re-shoring is going to be predicated on a political timeline/outlook….pharma plants don’t move in weeks, months or even two years…..if MAGA blows up under the weight of its own hubris…lots of folks in industries with long capital cycles can wait it out.

Also trade deficits leave overseas producers with dollars which flow back into dollar denominated assets (due to reserve currency status)……….becoming an incremental purchaser for sovereign debt….suppressing yields lower than they would be otherwise….crudely but in some respects….Chinese savers working 9-9-6 issued America a super low interest rate China store credit card in the 90’s….lets call it vendor financing….and we went to town on it…. both with import substitution but also increasing fiscal borrowing…it was something of a flywheel. Kind of global savings glut meets U.S. consumption machine feedback loop. Quite ingenious by the Chinese as mechanism by which they accelerated their growth by hitching their communist wagon to a consumerist capitalist engine like the US….. exporting deflation, drove rates lower, dollar recycling lower again which expanded debt to gdp cause servicing costs remained low….but now the parties over as it played out to its natural end…. The Chinese capability scares us…. They are real peer competitor. Big question in a world of shrinking US trade deficits is who in the hell is gonna finance all this US debt coming due….cause you’ve just torched a natural endpoint. To say nothing of the trustworthiness of the US as a counterparty to bilateral agreements of any kind. If you can rip up the freshly inked USMCA, you can rip up a 10yr treasury held in Bejing….maybe those Chinese bond holders deserve to get torched, they turned American consumerism against us and provided us the credit conditions to be reckless.

Really? Then tell me why Trump and the Republican Party is terrified to hold a by-election for Elise Stefanik’s seat right now? if wipeouts are on the cards sounds like a perfect time to do it?…they aren’t…it’s why they’ve pulled her nomination to the U.N. and asked her to sit tight in Congress to shore up the tiny majority there.

Imagine being handed the United States to manage - what a set of cards!........I mean messing that up would be like messing up running a Casino....you simply can't lose. This resounding win and mandate talk is a twisting of reality @cubsfan - the last election across the WH, Senate, Congress was a resoundingly close affair.....historically so in the Presidential and Congressional sense. Let's look at them with FACTS- Presidential: The electoral college was not close. However the popular vote (where true mandates for radical change are made IMO) was amongst the closest in history. Indeed you need to go back to Presidential races in 1960, 1968 and the most recent Gore v Bush election to find a race closer than this one. The margin was simply tiny. Put another way of the 32 total Presidential elections of the 20th and 21st century....Trump v Harris is 4th tightest....which is to say that 27 of the last 32 Presidential races had BIGGER "mandates" than Trump has. Closest Presidential Elections by Popular Vote (1900–2024): 1960: John F. Kennedy vs. Richard Nixon — 0.17% 2000: George W. Bush vs. Al Gore — 0.51% 1968: Richard Nixon vs. Hubert Humphrey — 0.70% 2024: Donald Trump vs. Kamala Harris — 1.48% 1976: Jimmy Carter vs. Gerald Ford — 2.06% 2004: George W. Bush vs. John Kerry — 2.46% 1916: Woodrow Wilson vs. Charles Hughes — 3.12% This not what resounding mandate looks like. I'm sorry Congress: This one is slam dunk to smash the mandate talk. Its the smallest congressional majority since the 1931 congress. Placing it in the 0% percentile for majorities in Congressional history. So small they've had to pull Stefankik going to the UN cause its so "fragile" https://www.foxnews.com/politics/trump-reveals-why-he-pulled-stefaniks-un-ambassador-nomination-cannot-take-chance Senate: Less historically narrow margin here - given that the Senate has 100 seats, a 53-seat majority represents a 6-seat advantage over the opposition. Therefore, the current 53-seat majority falls within the lower range of historical majorities, indicating a relatively narrow control Republican.

@Spekulatius is right....and some of the European's already have small 2-3% DST's on the books filtered by revenue which only ensnares the US tech giants.......one could see these DST's going much much higher.....they would be hugely tax generative for France/Germany etc.....and the beauty (perhaps) of putting a tariff on a really high margin, almost zero marginal cost product like digital services....is its much more likely the producer will take a large margin hit to maintain market share.......a low margin producer (like a car maker) has no choice on what he/she has to do. Re: Ireland/Luxembourg/Holland and US multinationals.....the loopholes are now gone......there is a 15% global corporate tax minimum for tech giants now in Europe......incl Ireland......now lots of European profits get booked in these jurisdictions like Ireland as the European HQ's are there....these HQ's house large pan-European tech and inside sales teams and at some point in the past the Irish subsidiary bought the international IP rights from the parent company.....these digital services (like Google Adwords) are sold into France etc. The DST's we're an attempt by the French (& others) to more closely align profits with domestic end markets.....versus the usual where was the 'value' created model (in this case at the European HQ). Anyway so US tech/services subsidiaries already pay now pretty much full bore corporate tax in the European Union (lots of it) but alot less if they are in low tax places like Luxemburg, Ireland....the minimum being 15%....but the reality still stands......on an individual country basis or at the European Union level.....the tools are there to squeeze Google, META, Apple etc.

The way Trump goes on you'd swear there was 15% unemployment. Endless activities need doing.....for example.....endless amount of roles coming up in eldercare.....high margin, capital light....its really nuts to go back to panel beating.....when some overseas dummy can do it for you and all the better they take paper printed benjamins in our reserve currency. Sure i get national security concerns - keep a prudent amount of steel making etc. But back to the Ukraine-Russia thing......I think a useful analogy for the American Empire (1945 - 2023 RIP)....was that it was brutal but occasionally kind mob boss that ran the world....it ran a kind of benign protection racket.....and it was handsomely rewarded for it in treasure and control.....and that is being dismantled by Trump.....what mob family gives up its territory as Trump is doing?......doesn't Trump realize how wealthy, safe and powerful its made the USA telling the European's, Asian's what to do because they outsourced their strategic autonomy to us? This approach is a mistake.......acting broke and burning the furniture to stay warm.....when you've got a treasure chest in the basement (social security/medicare) is the height of lunacy. The boomers are going to go down as the sociopath generation - they got fabulously wealthy, had life of pretty much only upward sloping net worth and when push came to shove and the country needed to save a few bucks they kept voting themselves cheques so that in their retirement they had the cash flow to keep feeding the slot machines in Vegas or keep the tequilas flowing at Margaritaville into their 80’s (even though they have assets (their homes/stocks) that have appreciated to an ungodly level during their lifetime. I'm being hyperbolic of course - but you get my point - Trump is rolling the dice on a high risk economic strategy & shrinking the US power and influence overseas to fix the finances at home…..when they aren’t broke .......cause he and his spineless pals in congress on all sides of the isle can't muster the courage to do something truly patriotic - tell their own generation to pull the chair away from the US banquet table and leave some cheese and honey for their kids and their grandkids. Stan Druckenmiller had it precisely right nearly a decade ago.......what your looking at is a sort of generational theft from the young to the old and Trump/Biden as old men enabled that theft to continue.

Yep I watched it - listen these guys hearts (Trump/Lutnick/Bessent) are in the right place.....Lutnick is a patriot.....what he did post-9/11 for Cantor and the families left behind is beyond admirable. He's a hero for what he did. But honestly believe this economic nationalism/isolationism is not the way to go.......as I've said before...even if you believe that it makes sense (big picture - I dont....nobody IMO benefits more from globalization and free trade more than the United States).......but the political timeline (2-4yrs) does not align with the economic timeline......my base case is its going to be a tonne of chaos for the next 2-4yrs.....higher inflation, higher unemployment, lower trend GDP growth...which means the deficit actually gets worse......and the next guy or gal voted in to the WH will be put there to undo it all and go back to something like the 2024 world. I get what they are going for re: Joe Sixpack- I liked Bessents line about "let them eat flat screen TV's" as not being an economic agenda......but really.....its kind of lazy and short-sighted to try to pull back low value industries......stemming the tide of illegal migrants to drive down wage bargaining alone is going to help alot......but you really dont want America's workforce sucked into low value added manufacturing when they are a scarce resource....single digit operating margin crap like autos?......christ almighty you want Joe Sixpack out there building houses that we need....that's a solid 20% margin business when done right. Get Joe Sixpack into genuine federal subsidized vocational programs......plumbers, electricians, carpenters......give em tax breaks......thats how you revitalize Akron, Ohio....you dont make 'USA Corp' that is a high margin, high RoE business better by diversifying it into low margin, low RoE panel bashing. There's a better way.

No way @cubsfan you know my posts.....I was critical of the last President too..I'm not some blind partisan hack......wouldn't wish ill on him.....he's the President.....in fact I'm a big supporter of his DOGE initiative and deregulation agenda...(while recognizing reality which is in $2T deficit DOGE is not going to change the math enough)...but its good they are being tackled....so I'll give him his due on that stuff.....much needed and he has the balls to tackle it. My issue with Trump - is that his economic plan (re-industrialization via tariff's) is poorly thought out and doomed IMO to failure and 2nd/3rd order effects are yet to be seen. I'd go as far to say they are crazy. Let's see - I stand ready to be wrong. As it pertains to foreign policy well you know my thoughts. I hated the idealistic liberal foreign policy that helped get Ukraine wrecked......and I despised the hubristic doubling down Biden did post-March 2022......I applaud Trump for trying to end the pointless conflict....but I've issues with the skills of a negotiator who concedes every point to his opponent before even getting to the table. It is not in America's long term national security interest to roll over so quickly to get its belly tickled. JD Vance spoke about deterrence in Signal-gate......capitulating in a proxy war to an enemy so easily is not a good deterrence 'look'. I want Trump to end the war in Ukraine.....but the correct posture was to escalate to de-escalate....to ensure the best deal is being got at the table. I saw none of that which was poor policy. Finally - as I've articulated before the benign alliance regime the US had up until recently in NATO and Asia.....cost a few lousy hundred billion dollars a year....but its dominance in trade, reserve currency status and global affairs was re-paid ten fold for that investment.......not to the mention the hard reality.....that every nation in the international system should seek to maximize its relaitive power....the era of the American empire (the hidden empire - https://www.amazon.com/How-Hide-Empire-History-Greater/dp/0374172145) best maximized this. So what is Trump doing......big picture.....cause he's unwilling to tackle social security/medicare.....he putting on tariff's and dismantling the American Empire.....for what? To save a few bucks....so they can keep sending the same cheques to retirees down in the Villages in Florida so the Margarteville parties can continue uninterrupted. Its the final boomer betrayal - to pretend like we're broke (when we aren't).....and to dismantle the post-WWII economic & alliance system (the American Empire) that gave those same boomers like Trump a lifetime of economic opportunity and peace.

I saw that and laughed.....companies who at the very best can produce a car that is maybe 60% in-sourced in the USA and who operate on single digit margins....tells them to not raise prices.....while putting a 25% tariff on half the value of the car. The math dont math. Last I checked Republican principles I subscribed too are in the trash- I thought they we're for small government?......everywhere I look the Government is now involved in the car I buy to the Mexican vine ripened tomatoes I'm buying for dinner. I also thought that the government shouldn't pick winners and losers.......shielding your domestic companies from overseas competition makes them inefficient while delivering crappier products per dollar to your citizens.

Do you feel liberated yet? Don't worry if not - full liberation day is coming April 2nd

Putin Tests How Far Trump Will Go Against Europe on Sanctions https://www.bloomberg.com/news/articles/2025-03-28/putin-tests-how-far-trump-will-go-against-europe-on-sanctions Very interesting to see how Trump feels when his Nobel peace prize is being blocked by the same Europe he derides - in fact perhaps Europe’s best tariff negotiating position now (jokingly) is that it simply won’t play ball with the Trump/Putin peace bromance by dropping sanctions….till the US’s ‘sanctions’ on Europe i.e. tariffs are lifted in a comprehensive deal What a strange new adversarial tit-for-tat world Captain Chaos has opened up. The post-WWII era of multilateralism, cooperation across allies will be looked back on fondly….the bull case IMO is that Captain Chaos messes things up so profoundly in the next 18 months that the electorate in the mid-terms and then the next Presidential race put a centrist, dare I say it, globalist back in power who just unwinds this stuff with the stroke of pen ( cause remember all this stuff all sits under executive orders). In some respects I’m routing for Trump to go buck wild and create an economic mess….getting this US isolationist, mercantilist mind virus out of the system quickly might be the best outcome longer term.

It struck me - the USA is having its BREXIT moment….if you want to see what the future looks like….the buyers remorse is quite profound in the UK as the public finances there deteriorate YoY. To the topic at hand - I can’t think of many industries that benefited in the UK….the isolationist zeal there led to some uptick in domestic tourism…but over time this didn’t mean much as domestic tourists were less wealthy and so spent less and there was downward shift in international tourists (slightly). Right now maybe DG is a marginally better business with the Temu loophole closed. I’d also expect SNAP payments to increase as unemployment rises which should be good for DG as a SNAP beneficiary.

Captain Chaos strikes again How quaint it will be to look back at this NHTSA document on the foreign content in various car models....and see a single column that has "US/Canada" written in it....cause Canada wasn't considered a foreign place up until very recently. https://www.nhtsa.gov/sites/nhtsa.gov/files/2024-10/MY2025-AALA-Alphabetical-10.30.24.pdf The best a car manufacturer seems to be able to do is show 70% of vehicle coming from "US/Canada"....so of those 70% vehicles I guess the Q is how much is Canadian sourced?....I'm gonna guess best case maybe 10%......so lets says the most American car you can buy today on the market is 60% US sourced!.......40% coming from overseas.....lets call it a $50k ASP......40% of 50k....is $20k....stick 25% on top.....gets $25k.....$5k federal sales tax. Ouch. So you know even the most American car you can buy right now is going up 10% in the near future or by $5k (rough).....your BMW M3 Sedan at 0% American content....is going to da moon.

Know there’s those couldn’t even bring themselves to listen to a NYT podcast but put simply….Friedman has it about right. a lot of first order thinking involved in the current administration…..they are going to be brilliantly surprised when their first order thinking & plans make contact with the real world….and 2nd order & 3rd order effects play out in ways that confound them. Case in point today…..you want a ceasefire/peace in Ukraine….you bring the European’s along with you or you as their boss tell them that’s the way it is…..instead Trump/Vance alienated and insulted them ….so today the European’s didn’t agree to lift their sanctions on Russia as part of any potential ceasefire….a prerequisite according to Putin to a full ceasefire…. https://www.themoscowtimes.com/2025/03/26/eu-says-no-sanctions-relief-for-russia-until-full-military-withdrawal-from-ukraine-a88494 “The European Union said Wednesday that it would not lift or amend sanctions on Russia unless Moscow agrees to unconditionally withdraw its forces from Ukraine.” I can assure you……six months ago if the previous administration had wanted it….Europe would have acquiesced to America’s desire. THIS is what diminishing relative power in the global system looks like…..as I said earlier in the thread….this is mana from heaven for adversaries & enemies…that it’s been actively precipitated by unforced US actions is the great travesty…the greater one is that many American’s somehow beleive that MAGA is indeed making America greater (in projecting international power & influence) when in fact it’s making the relative power of the US weaker and weaker in the system. Sad.

Yep.....if you we're to design a tax system from a blank page.....you wouldn't tax labor, capital or corporations at all....you would simply tax consumption.

Yep - administratration officials have been spouting on about this on various business programs and to my amazement not a single business 'journalist' has raised the obvious flaw in using VAT/sales taxes in other jurisdictions as some sort of tariff reciprocity yardstick. I'll wait till April 2nd - if I'm being kind perhaps the VAT/sales tax talk is just lazy language and what they really mean are the digital services taxes (DST's) many individual European countries levied on digital services but only for groups with large revenues....in effect the only companies captured we're the Mag7. Many of these we're to disappear anyway as part of BEPS OECD process....which given its multilateral nature is probably dead now.....as every global multilateral institution is deemed by the current President to be a scam designed to rip off America. https://taxfoundation.org/data/all/eu/digital-tax-europe-2024/

The record on this is poor - you protect an industry and shield it from global competition….and like tenured government employee…they become fat, lazy and complacent…domestic consumers pay more and get a poorer product relative to what they could have bought absent tariffs. Bessent has called their plan a re-privatization of the US economy….when you take a step back and think about it….what your doing with tariffs is governmentizing the US economy…putting domestic producers behind artificial walls such that they DONT have to compete in a fully private market. The ‘tell’ on some of this nonsense talk re: non-trade barriers….is this administrations focus on sales taxes in other jurisdictions…and using them as some kind of reciprocal yardstick measure…when everybody knows that sales taxes in Europe, for example, fall on domestic and international producers equally. Making them non-discriminatory re:imports. Crazy stuff.