changegonnacome

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.

Armchair psychology is a tough gig - but this guy I think hits on what everybody kinda knows re: Trump. Narcissism gets thrown around too much and this person is right too distinguish between the people with narcissistic traits (we all know them) and those who truly have narcissistic personality disorders (like Trump) who are much much rarer birds. For those that haven't come across a true narcissist I think you might be shocked by the difference between the two - I know Trump cause I worked for a Trump type. We called him 'Captain Chaos' cause as this person pointed out he wasn't really goal oriented but rather his vacuous personality drove all action and decision making. The best heuristic of a true narcissistic personality disorder person - I learned - is that he or she is the VICTIM or HERO of every story they tell. Thats it. That's how you spot them. Every time Trump speaks these are the two stories he tells consistently, repeatedly and without fail.

Well I guess the argument goes that software businesses have winner takes most dynamics...asset light as you said....zero marginal cost products get to be near impossible to compete against.......folks like microsoft, salesforces and various other enterprise providers end up with entrenched positions where they face basically no or limited competitive threats (or they organize into two or three player oligopolies. I guess the internet businesses of Web 2.0 where the product was 'free' and companies won through ads, scale and network effects exacerbated that in the B2C space....the product has close to a zero marginal cost and the network effect is near impossible re-replicate....... The argument against all this is that AI is likely to make creating new software trivial....and agenic AI is likely to upend the ad supported web 2.0 paradigm that gave us Facebook, Google etc.....but I'm way out of my wheelhouse in this space to know how true that might be.....but as my graph shows there's something like 5% of excess profit margins being captured by the corporate sector today versus the past when the mean was closer to ~9%

To add to the evidence pile one need only look at record high corporate margins......there was a time when margins reverting to trend was like the surest data set in all of finance...they'd rise and fallback as each wave of competition came in to erode them...the fact they've been this elevated for this long with no mean reversion tells you that there are large monopolists and oligopolists in the economy extracting excess profits that otherwise would have historically, in a competitive market, resulted in a consumer surplus.....instead of a consumer surplus.....we got American oligarchs. I mean look at the data set - and you realize how unusual it is for the corporate sector to achieve a margin above 10% over time....then you come to the GFC followed by C19....and first 10%+ becomes the norm.....and now 14% margins appear to be the new floor. The concertation in the S&P and the concentration of wealth in the US should come as no surprise when you realize what an unusual period we are living through. https://fred.stlouisfed.org/graph/?g=1p35Y

Fully aware of that - which is what makes this tariff experiment which is impacting the stock market creating a potential negative wealth effect - so self defeating.......if the Top 10% reduce their consumption cause they feel a little poorer, while at the same time the Federal government is implementing austerity.....well we know what that is. But in regard to your middle class comments...wealth inequality has certainly blown out.....but I still think you'll find as regards earned INCOME tax.....that marginal increases in income tax aimed at the middle class drive the highest quantum of tax revenue. I do think however that based on budgetary math in the first place....the US will likely need to put a federal consumption/sales tax in place in time.....Donald is already driving towards that with his Tariff's - its just the federal sales tax wont show up on your receipt and it will fall on foreign produced goods.

Yes and No.......Yes in that you should probably have a more progressive tax system at the extreme higher end......a good start might be to remove the immediate expense deductibility for say private jets that was in Trump's first TCJA for example....these UHNW breaks do nothing for social solidarity. No - because there's simply not quite enough rich people and too many poor people for it to make a real difference. You should still do it from an equity and fairness point of view. In the same way that I firmly believe DOGE is not going to meaningfully change the budgetary math but thats not to say that it still shouldn't be done. The reality always of fiscal budgetary math for most countries....is if you want meaningful amounts of revenues raised......you need to shoot for the middle class.....cause like Jesse James said before re:banks and why he robbed them......"thats where the money is"

Curious if could expand on this? Not quite sure what you mean.

Im with you both on the bottom 50% doing better - Bessent is also correct in saying the current development model with all the economic returns accruing to the top 10% is an unstable equilibrium…let them eat cake doesn’t work out well in the end….ask the Queen of France. The grand plan may work in theory but in practice you’ve got some serious potential timing /implementation mismatches….for example….higher prices on imports but the tax cuts don’t work out….or maybe they do….but the retaliatory tariffs from other countries hurt existing exporting US industry before the theoretical tariff protected ones get to be scaled up. Big picture however is quite simple - a tariff is a tax….if you want less of something (production/consumption) you tax it….this plan at its heart is trading productivity growth & efficiency which equates to broad GDP growth for something akin to tariff welfare payments to the bottom 50%. The real implementation issues are huge (1) it takes time for the above, years (2) it only works if you shrink the federal & state budgets to free up the space….the problem with this is that IMO this plan requires a MAGA controlled WH, Senate, House for more than four years to get it fully implemented such that the benefits of re-shoring can be felt by Joe Sixpack….the timing mismatches, the dislocations just don’t allow you to land the airplane in a country with an election cycle & margins like the US….. Joe 401k who starts hurting & Joe Sixpack who doesn’t quite understand why he lost his job at Jim Beam…is going to be voting the MAGA’s out at the mid-terms & then at the next Presidential (& don’t forget so much of this plan relies on the Presidents executive authority re:tariffs) This whole thing will turn out to be a highly disruptive but ultimately failed economic experiment…the US political system just doesn’t allow for something as radical as this to get completed in its entirety such that all the costs and benefits can fully flow through to the underlying voter as the theory suggests it might.

Something old and something new below- "The trouble with tariffs, to be succinct, is that they raise prices, slow economic growth, cut profits, increase unemployment, worsen inequality, diminish productivity and increase global tensions. Other than that, they're fine." David Kelly, JP Morgan Chief Economist, 2025 Ronald Reagan, Former President and GOP Conservative Hero 1987 on tarrifs: Big picture - I'm with Reagan. On the macro - the market is sniffing out trouble.....the re-privatization of the US as Bessent says is inherently rocky....you really are trying to transition a significant portion of the workforce from one sector to another while also chopping off the flow of cheap labor at the bottom of the labor pyramid...the reason it is a pyramid is BECAUSE of immigration....without it , due to demographics it starts looking like an inverted pyramid..a bunch of old people collecting cheques supprted by a smaller and smaller base of workers......if that weren't enough....that they are also embarking on a kind of import substitution strategy via tariff's is quite novel. I can see the grand vision (kind of): - shrinking immigration twinned with import substitution for domestically produced goods should see the bottom quartile or bottom half's bargaining power increase resulting in real wages increases in this segment (big Q is whether real wages can outpace tariff price increases on the basket of goods this group consumers) - tax cuts, Bessent would argue, will see tariff revenue re-distributed to folks feeling the pain of said tariffs related price increases....tax cuts plus increased bargaining power on real wages.....might see "main street' win for the first time in a couple of decades - the re-privatisation of the US will see Government workers off the the Treasury payrolll transferred into this re-industrialization wave that will require more private sector workers...such that the deficit shrinks - Rates - the above will come with economic weakness in the short term perhaps creating the backdrop to allow Powell to cut short term rates.......the fiscal budget deficit shrinking or on a more sustainable path plus changes to bank holding rules - will allow for long term treasuries to fall The plan has merit - i think the issue with it.....is (1) for all the talk of fiscal spending discipline I'll believe it when I see it - this is Pork barrel DC....not too mention medicare & social security (the untouchables) are on a predetermined unstoppable climb (2) all this tariff revenue talk assumes that other countries don't have agency - as Reagan said we are very likely to see very very damaging retaliatory escalations here.....net net you may end up with higher prices & given the puts/takes a static industrialized base.....higher prices, domestic producers protected from competition and so less efficient leading to lower overall aggregate consumption.......this is how this experiment goes wrong. Trump is rolling the dice on a plan which to my mind is quite contrary to free market ideals.......the target of this plan is bottom 50% of Americans......put another way the stock market is a secondary or tertiary measure fo the success of this plan.

Pretty clear that Europe is finally headed for strategic autonomy from the US.......the reality & realpolitik is that this diminishes the US's power and influence on an absolute and relative basis in the global system ......it's an outstanding day in the office for Putin & Xi when your principal opponent so roundly diminishes itself like this. Trump is the first president in my lifetime through his own actions to so irrefutably shrink the USA's power & influence like this. That this is being done under the banner of 'Make America Great Again' is the hilarious part. It should be more like Make America Just Another Country Again (less catchy I know!). Put another way - on China and Russia's foreign policy wishlist each year for the last 80 years would have been trying to figure out methods by which to separate the European's from the American's or vice versa. Such that the USA's power would be diminished. Trump has made their wish come through. When you think about the future likely outcome now based on all the 'peace deal' noises I dont think anyone could not come to the conclusion that the Feb 2022 invasion has turned out to be a very successful mission for Russia/China: - Four oblasts & Crimea likely officially acknowledged, by the US/EU/Ukraine, as being annexed - a demilitarized Ukraine - No NATO expansion into Ukraine - Indeed to go a step further - one might argue that NATO's Article Five is toast which means NATO is toast - a permanent splintering in the post-WWII alliance structure between the USA and Europe - the US's China containment deterrence in Asia IMO is in tatters......who for example in Taiwan, South Korea, Philippines, Japan or Australia feels MORE confident now after the Ukraine debacle that the US has the stomach for fights in far flung places? The answer is nobody - which means China's aspirational journey to regional hegemon in Asia (on the way to global hegemon) has been advanced. All told this is turning out to be a hugely successful military operation for Putin and well worth the price he's paid. I would also say that Xi & China owe him a beer the next time they see him. China is the big winner from the fracturing of the European/US alliance.

@Parsad why not grab the bull by the horns and create a - “Trump Policy Discussion - Trade, Foreign Affairs etc (Political).” thread? It can be like a super massive black hole sucking in all the political energy on the forum.…or like a sink hole where you dump toxic battery waste

Totally agree - Trump is going for it this time.....his grand unifying theory of the world has been consistent and unchanging since at least the mid-1980's and this is his last chance to make it happen. I think it gets lost on people who think he's somehow all over the map on trade and international relations.....far from it. Trump developed an idea of the world in the early 1980's and it hasn't changed an iota since. See Sept, 1987 NY Times Ad below that he took out (it could have been written yesterday. Note that he’s always been a kind fatalist doomsayer around where the US is headed….1987 Donald ex-ante was clearly wrong on America’s economic prospects…perhaps he’s right this time

They want it so badly - they look and smell desperate….when has looking desperate headed into a negotiation ever been the best strategy? Regardless based on the last few weeks relations between the US, EU & Ukraine - impending trade wars, accusations of ungratefulness, press conference melt downs….twinned with Russia’s current undoubted artillery and man power advantage’s on the battlefield….you really do have to ask yourself why would Putin acquiesce to US desires for a peace deal???…..unless it was deeply deeply favorable to the Russian’s….and that type of deal would be so deeply embarrassing to Trump the ‘deal maker’ that I can’t see him signing it. So as I’ve said - why the hell would Putin agree to anything right now….he’s the upper hand on the battlefield and his opponents are fighting amongst themselves like kids on international TV. Think of it from his point of view - at a minimum you put this so called ‘alliance’ through the meat grinder of at least one more spring/summer/fall offensive of defeats on the battlefield, take another 5-10% of Ukraine before you agree to give back anything….in say early 2026 just as the incumbent Republican’s in Congress have to head back to their constituents to explain why the forever wars are still going on for forever and Trump didn’t solve Ukraine on Day One like he said he would.

I'm sorry @cubsfan Trump has defacto capitulated publicly.....he did so re:Ukraine during the campaign as a popular America First political strategy....but I really expected a change in messaging once he was in office to actually HELP bring about his desired outcome of ending the war.....escalate to de-escalate type thing...what we've got is capiltuation which doesn't as I've laid out advance the peace.......this tack he's taking is really counterproductive to his own agenda. Guess you'd say he's crazy like a fox...playing 4D chess......I hope you right....what I've seen so far on both the micro level (Ukraine-Russia) and on the macro level (NATO / EU Canada / Mexico Trade War/ / UN / Israel - Gaza) is simply crazy.....I'm failing to see an overarching plan that optimizes for the US's safety, security, prosperity and economic dominance over the next hundred. I'm seeing a guy roll the dice on whats worked astoundingly well for the USA over the last hundred years (if you go and look at the relative out-performance of this country versus everywhere else on Earth!).