US franchises at risk ?

[SharperDingaan]

Canada (and the world) have begun to respond to Trumps attacks via promotion of 'buy local'; essentially, anything that is a US import is toxic. One of the consequences is declining sales at franchisee's that hire local, rent local, buy local (for the most part) ... that are owned by American franchisers; franchiser branding has made them toxic, and global Q1 2024 international sales are likely to take a hit.

 

Within Canada there are quite a few of these franchisees, they collectively add quite a bit of economic activity, and one of the circulating solutions is 'soft nationalisation'. A national government collects the franchisee payments, and temporarily holds them in trust until the tariffs thing is resolved. Franchisee contracts are protected under 'force majeure' provisions, they are now able to brand as 'local' to mitigate disruption and maintain their economic activity ... and the franchiser (primarily US) is now captive to tariff resolution. Share prices drop like a rock, indexes drop, and the more that others follow ... the worse it gets. All hail the orange boy!

 

Tech is particularly vulnerable, there are ready alternatives for most tech things, and few are likely to cry if Elon and the 'magnificent 7' companies are simultaneously targeted by US trade partners. Priced at perfection, quite a few would see a hard sell off on the DOW/NASDAQ as both a desirable thing, and a future buying opportunity. Again, all hail the orange boy! 

 

Trump throws up tariffs, the rest of the world attacks the level of the DOW/NASDAQ .... and shorts on the way down. Inside trading around the sale of meme coin, offset against inside trading around index shorts; not too many are likely to disagree with the 'market' solution.

 

We live in interesting times.

 

SD

 

        

Edited Monday at 05:52 PM by SharperDingaan

[rogermunibond]

It's like the whole world has forgotten the work of Adam Smith.

[John Hjorth]

2 hours ago, rogermunibond said:

It's like the whole world has forgotten the work of Adam Smith.

 

Yes, Roger [ @rogermunibond ],

 

There is to me personally no doubt that SDs [ @SharperDingaans ] starting post in this topic has merit, because of the way all this tariff talk has been communicated by the newly sworn-in POTUS has been highly influential on general sentiment towards USA at the populations in countries being allies with USA and being hit by this tariff talk.

 

To me personally, it's a real and tangible thing building up here in Europe by now.

 

I'm pretty sure for EU, it'll be swift eye-for-an-eye, tooth-for-a-tooth priciples of reactions by measured reponses against USA with regard to tariffs, based on an inner solidarity priciple - 'one for all, - all for one' - not some whining by filing of complaint cases against USA in WTO.

 

- - - o 0 o - - -

 

Posted certainly not with the intent to politicize the topic, and here trying to be careful and conciderate in phrasing, not to stir the pot.

Edited Monday at 09:24 PM by John Hjorth

[SharperDingaan]

The problem with gaming is that there are always people screwing up the pay-offs, and their 'wins' may well be counter-productive to yours. Trying for a 'golden-age' measured by the level of exchange indexes, by risking levels of unemployment and poverty on par with the 1929 Great Depression, is just stupid. You send us to hell, we're taking you with us; in Mutually Assured Destruction (MAD). 

 

Nobody has to roll over maturing US T-Bills, there are a great many alternatives, and there is now a growing need to spread the risk. The US Fed may well be raising rates because it is already hitting a debt-wall, that is only avoidable .... so long as USD remains the dominant reserve currency. Reduce these roll overs in a big way ... and the game changes. Negatively target the indexes to give it a nudge .... 

 

The way out is to end it as soon as possible.

 

SD            

Edited Monday at 11:15 PM by SharperDingaan