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 February 17 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 February 17 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 February 17 by SharperDingaan

[Castanza]

https://podcasts.apple.com/us/podcast/the-economics-show/id1746352576?i=1000689712495
 

Very good fair and balanced piece imo. 
 

 

[Ulti]

https://davenadig.substack.com/p/trust-in-a-black-hat-world.

 

just another opine on how the world sees the US now

[Castanza]

Makes me think of WB quote: 

 

“It takes 20 years to build a reputation and 5 minutes to destroy it.” 

[Ulti]

Here’s the wreckage as of Feb. 14, as compiled by the U.S. Global Leadership Coalition.

At least 11,500 Americans and 54,575 foreigners have lost their jobs. Nearly $1 billion in payments for work already done has been frozen. Nearly $500 million in food is sitting in ports, ships and warehouses. In Syria, a country struggling to recover from chaos, food and other support for nearly 900,000 people has been suspended. In West Africa, 3.4 million people in 11 countries have lost drug treatment for deadly tropical diseases. At least 328,000 HIV-positive people in 25 countries aren’t getting lifesaving drugs.

U.S. security will suffer, not just needy foreigners, according to the coalition’s research. Foreign military financing for key regional partners such as Jordan and Taiwan has been frozen. Unpaid guards temporarily walked off their jobs securing the al-Hol and Roj camps in Syria that hold 10,000 Islamic State fighters and 40,000 families. A USAID counterterrorism program that had been training forces in Indonesia, Iraq, Libya, Malaysia, Somalia and Yemen has also been halted.

https://www.washingtonpost.com/opinions/2025/02/21/usaid-trump-freeze-marocco-foreign-aid/

 David Ignatius falls into the George Will and Thomas Friedman… thoughtful , moderate to conservative in views and pragmatic ( just my opinion)

 

[John Hjorth]

Somehow, my ''main fuse' blew' reading your above post, @Ulti 

[Ulti]

Curious as to why?

[Ulti]

https://roughdraftatlanta.com/2025/02/20/usaids-cuts-affect-atlanta-based-nonprofits/

 

Cuts form Cater Center health initiatives among others.

[cubsfan]

3 hours ago, Ulti said:

Here’s the wreckage as of Feb. 14, as compiled by the U.S. Global Leadership Coalition.

At least 11,500 Americans and 54,575 foreigners have lost their jobs. Nearly $1 billion in payments for work already done has been frozen. Nearly $500 million in food is sitting in ports, ships and warehouses. In Syria, a country struggling to recover from chaos, food and other support for nearly 900,000 people has been suspended. In West Africa, 3.4 million people in 11 countries have lost drug treatment for deadly tropical diseases. At least 328,000 HIV-positive people in 25 countries aren’t getting lifesaving drugs.

U.S. security will suffer, not just needy foreigners, according to the coalition’s research. Foreign military financing for key regional partners such as Jordan and Taiwan has been frozen. Unpaid guards temporarily walked off their jobs securing the al-Hol and Roj camps in Syria that hold 10,000 Islamic State fighters and 40,000 families. A USAID counterterrorism program that had been training forces in Indonesia, Iraq, Libya, Malaysia, Somalia and Yemen has also been halted.

https://www.washingtonpost.com/opinions/2025/02/21/usaid-trump-freeze-marocco-foreign-aid/

 David Ignatius falls into the George Will and Thomas Friedman… thoughtful , moderate to conservative in views and pragmatic ( just my opinion)

 

 

Believe me - no one feels sorry for federal government workers having to deal with layoffs.

 

The abuses, waste and corruption being uncovered are extraodinary. Americans are pissed.

[cubsfan]

2 hours ago, Ulti said:

https://roughdraftatlanta.com/2025/02/20/usaids-cuts-affect-atlanta-based-nonprofits/

 

Cuts form Cater Center health initiatives among others.

 

The article forgot to "thank" USAID for funding COVID19 research in the Wuhan Lab with their $40M donation. USAID really did their part in killing millions of people around the world.

[Junior R]

6 hours ago, Castanza said:

Makes me think of WB quote: 

 

“It takes 20 years to build a reputation and 5 minutes to destroy it.” 

I think it is already happening..In Canada people are switching to Canadian Produced or ETFS that are run buy Canadian companies 

[longlake95]

30 minutes ago, Junior R said:

I think it is already happening..In Canada people are switching to Canadian Produced or ETFS that are run buy Canadian companies 

 

Except they are still using Word, google, iPhone and Facebook...

[Junior R]

2 minutes ago, longlake95 said:

 

Except they are still using Word, google, iPhone and Facebook...

Correct Americas biggest key is technology...There is really no Western competitor to any of those technologies 

Edited Saturday at 11:58 PM by Junior R

[Ulti]

2 hours ago, cubsfan said:

Believe me - no one feels sorry for federal government workers having to deal with layoffs.

 

I respectfully disagree… I have friends both at NIH and CDC…. While I agree , as do they , that there is a tremendous amount of waste ….a more rational business approach of say, 10% budget reduction for all departments the 1st year in combination of learning where the waste is and trimming over a period of months would have been better.. Obviously smarter people can come up with better solutions… carpet bombing 

the federal government haphazardly just doesn’t seem rational( again just my opinion)

[Ulti]

https://warontherocks.com/2025/02/from-strategy-to-action-rethinking-how-the-state-department-works-2/
 

Rubio acknowledges and recognizes the need to revamp streamline and maybe downsize the State Department…. Some rational thinking as to how

 

[Ulti]

https://www.state.gov/priorities-and-mission-of-the-second-trump-administrations-department-of-state/?utm_source=homepage&utm_medium=hero&utm_campaign=s_priorities
 

fund, and every policy we pursue must be justified with the answer to three simple questions:

Does it make America safer?  

Does it make America stronger?  

Does it make America more prosperous?  

 To advance our national interest, we will build a more innovative, nimble, and focused State Department. This will require replacing some priorities, deemphasizing some issues, and eliminating some practices.

 

sounds pretty rational 

[SharperDingaan]

The reality is that Americans voted for Orange Boy in all categories; like it or not, one has to respect the decision.

 

Tariffs are sold to the US public as a 'negotiation tactic'; outside of the US it's just plain old-fashioned blackmail ..... by an old man who thinks he's a mafia 'don of dons'. Yet in most mafia movies, it's almost always the old don who gets replaced .... and by a series of new ones.  Orange Boy is 78; Biden was 81 when he had his 'senior's moment' in the election debates .... Orange Boy may well not even make it to the end of his term. An opportunity 

 

Real 'don of dons' do not make career ending mistakes. Trying to take over Greenland, or make Canada the 51st state; is a act of aggression as per the NATO defence treaty ... that automatically triggers a NATO response. Greenland is a DENMARK protectorate, and each of Denmark, Canada, and the US are members of NATO. Declaring retaliation on yourself? .... planning on pulling out of NATO .... and letting NATO ordinance fall on the US? .... or just planning on leaving the world early 

 

Blackmail only works if the target can't afford to call the bluff, your security is very good, and the multiple 'targets' can't gang up on you. But it's a whole different thing when the other 'targets' are also don's, and also very well versed in both blackmail and the tenets of the Dictator's Handbook. You may be big and strong, but economics is very much like air; restrict it, and you suffocate.

 

The US is toxic; per the tariffs, all across Canada every business has been actively looking at minimising it's exposure to the US. Sometimes it's diverting to non-US suppliers, sometimes it's financial engineering (with government assistance), and sometimes its just relocating. Sometimes the tariffs are actually beneficial, as things that were never possible previously are now practical, and in scale. It's the same story all across Europe, and it will be US workers who pay the price.

 

Foreign buyers do not have to roll maturing US T-Bills, and there are a multitude of similar instruments in other currencies; as with the weaponization of tariffs, money flows can be weaponized as well ... the cost of which is interest. The big difference today is existence of BTC, and the BTC-ETF; the more that nations go at each other, the more valuable these become.

 

Trade partners do not have to maintain their US FX rate; again, as with the weaponization of tariffs, FX rates can be weaponized as well ... the cost of which is a strangle on US exports. When the domestic European landed cost of a Tesla is more than a high-end BMW, it ain't selling; and if you ain't allowed to manufacture in Europe ... that market 'shut-out' is permanent. Our sandbox, our rules ... goes both ways.

 

Today, a US signature on a trade agreement is no longer trustworthy. One simply files for a tariff resolution as per the existing agreement, walks away until the existing agreement is near expiry, and retaliates at will however is deemed necessary ... netting the penalties against whatever you are owed. Tariff threats do nothing more than raise unemployment on both sides of the border; there is no 'negotiation', as your signature is worthless.    

 

Much as in a bar-fight, if you're friend has too much to drink and insists on getting into a fight ... there's not a lot you can do; stay out of the way, run a betting book on the outcome, safely get him/her to an emergency room/dentist afterwards, and get them home, is about as far as it goes. Whatever made on the betting book given to the bar owner to pay for damages.

 

A lot of Orange Boys objections are actually valid (defence spending, government waste, money-laundering, DEI, etc.); but there are better ways of going about it, that don't create as much bad will. All that a retaliatory G-7 need do is selectively tariff anything Musk related out of the market, ban Musk platforms within their borders, boost spending on their public communication vehicles (BBC, ABC, CBC, etc) and re-categorise that spending as military (countering cyber influence). NATO spending as % of GNP rises, and if the Tesla share price collapses .... so much the better.

 

Orange Boy isn't going away, but he can be used ....

 

SD

   

 

 

 

  

Edited Sunday at 07:51 PM by SharperDingaan

[cwericb]

10 hours ago, SharperDingaan said:

The reality is that Americans voted for Orange Boy in all categories; like it or not, one has to respect the decision.

 

Tariffs are sold to the US public as a 'negotiation tactic'; outside of the US it's just plain old-fashioned blackmail ..... by an old man who thinks he's a mafia 'don of dons'. Yet in most mafia movies, it's almost always the old don who gets replaced .... and by a series of new ones.  Orange Boy is 78; Biden was 81 when he had his 'senior's moment' in the election debates .... Orange Boy may well not even make it to the end of his term. An opportunity 

 

Real 'don of dons' do not make career ending mistakes. Trying to take over Greenland, or make Canada the 51st state; is a act of aggression as per the NATO defence treaty ... that automatically triggers a NATO response. Greenland is a DENMARK protectorate, and each of Denmark, Canada, and the US are members of NATO. Declaring retaliation on yourself? .... planning on pulling out of NATO .... and letting NATO ordinance fall on the US? .... or just planning on leaving the world early 

 

Blackmail only works if the target can't afford to call the bluff, your security is very good, and the multiple 'targets' can't gang up on you. But it's a whole different thing when the other 'targets' are also don's, and also very well versed in both blackmail and the tenets of the Dictator's Handbook. You may be big and strong, but economics is very much like air; restrict it, and you suffocate.

 

The US is toxic; per the tariffs, all across Canada every business has been actively looking at minimising it's exposure to the US. Sometimes it's diverting to non-US suppliers, sometimes it's financial engineering (with government assistance), and sometimes its just relocating. Sometimes the tariffs are actually beneficial, as things that were never possible previously are now practical, and in scale. It's the same story all across Europe, and it will be US workers who pay the price.

 

Foreign buyers do not have to roll maturing US T-Bills, and there are a multitude of similar instruments in other currencies; as with the weaponization of tariffs, money flows can be weaponized as well ... the cost of which is interest. The big difference today is existence of BTC, and the BTC-ETF; the more that nations go at each other, the more valuable these become.

 

Trade partners do not have to maintain their US FX rate; again, as with the weaponization of tariffs, FX rates can be weaponized as well ... the cost of which is a strangle on US exports. When the domestic European landed cost of a Tesla is more than a high-end BMW, it ain't selling; and if you ain't allowed to manufacture in Europe ... that market 'shut-out' is permanent. Our sandbox, our rules ... goes both ways.

 

Today, a US signature on a trade agreement is no longer trustworthy. One simply files for a tariff resolution as per the existing agreement, walks away until the existing agreement is near expiry, and retaliates at will however is deemed necessary ... netting the penalties against whatever you are owed. Tariff threats do nothing more than raise unemployment on both sides of the border; there is no 'negotiation', as your signature is worthless.    

 

Much as in a bar-fight, if you're friend has too much to drink and insists on getting into a fight ... there's not a lot you can do; stay out of the way, run a betting book on the outcome, safely get him/her to an emergency room/dentist afterwards, and get them home, is about as far as it goes. Whatever made on the betting book given to the bar owner to pay for damages.

 

A lot of Orange Boys objections are actually valid (defence spending, government waste, money-laundering, DEI, etc.); but there are better ways of going about it, that don't create as much bad will. All that a retaliatory G-7 need do is selectively tariff anything Musk related out of the market, ban Musk platforms within their borders, boost spending on their public communication vehicles (BBC, ABC, CBC, etc) and re-categorise that spending as military (countering cyber influence). NATO spending as % of GNP rises, and if the Tesla share price collapses .... so much the better.

 

Orange Boy isn't going away, but he can be used ....

 

SD

   

 

 

 

  

 

 

One really has to wonder where the value is of having the President of the United States constantly insulting Canada and threatening to attempt to annex the country. Canada? One of the United States biggest trading partners and their closest ally for over 100 years?

 

These insults and threats are creating a wave of nationalism in Canada and boycotts of American products and American companies that is sweeping the country. Is the U.S. goal to encourage Canada to import more from China, Europe, South America, etc, rather than buy U.S. products. What is the value in that? 

Why start a trade war that is going to raise prices for American citizens on a wide range of goods and perhaps force American auto plants to shut down? Americans don't seem to realize how important are the goods that the US imports from Canada. You know, Canada can probably get by without Peanut Butter, Florida Oranges and Kentucky bourbon.

 

But Canada provides their U.S. 'friends' with massive amounts of electricity to help run their East coast and central cities. Canada supplies water to the Central U.S. and the West Coast - essentially free due to an agreement signed many years ago. Of course now it seems the U.S. has deemed it is acceptable to rip up agreements whenever the mood hits so one would guess that Canada might have to do this as well. Canadian oil keeps American refineries running with a necessary quality of oil that the US has difficulty or is unable to produce. And, it is sold to the US at a discounted price . Who benefits if the U.S. has to import oil from Venezuela or the Middle East? Canada also provides natural gas, lumber and minerals, that contrary to what the President may say, the US simply doesn't have the resources to produce.  

 

The sad part of this is that some in the US believe that Canada is taking advantage of the United States? Really? 

Edited yesterday at 01:22 AM by cwericb

[DooDiligence]

2 hours ago, cwericb said:

 

 

One really has to wonder where the value is of having the President of the United States constantly insulting Canada and threatening to attempt to annex the country. Canada? One of the United States biggest trading partners and their closest ally for over 100 years?

 

These insults and threats are creating a wave of nationalism in Canada and boycotts of American products and American companies that is sweeping the country. Is the U.S. goal to encourage Canada to import more from China, Europe, South America, etc, rather than buy U.S. products. What is the value in that? 

Why start a trade war that is going to raise prices for American citizens on a wide range of goods and perhaps force American auto plants to shut down? Americans don't seem to realize how important are the goods that the US imports from Canada. You know, Canada can probably get by without Peanut Butter, Florida Oranges and Kentucky bourbon.

 

But Canada provides their U.S. 'friends' with massive amounts of electricity to help run their East coast and central cities. Canada supplies water to the Central U.S. and the West Coast - essentially free due to an agreement signed many years ago. Of course now it seems the U.S. has deemed it is acceptable to rip up agreements whenever the mood hits so one would guess that Canada might have to do this as well. Canadian oil keeps American refineries running with a necessary quality of oil that the US has difficulty or is unable to produce. And, it is sold to the US at a discounted price . Who benefits if the U.S. has to import oil from Venezuela or the Middle East? Canada also provides natural gas, lumber and minerals, that contrary to what the President may say, the US simply doesn't have the resources to produce.  

 

The sad part of this is that some in the US believe that Canada is taking advantage of the United States? Really? 

 

Noam Chomsky's Propaganda Model in action. Personally, I think the end goal is widespread social unrest to consolidate power.

[james22]

On 2/22/2025 at 6:04 PM, Ulti said:

I respectfully disagree… I have friends both at NIH and CDC…. While I agree , as do they , that there is a tremendous amount of waste ….a more rational business approach of say, 10% budget reduction for all departments the 1st year in combination of learning where the waste is and trimming over a period of months would have been better.. Obviously smarter people can come up with better solutions… carpet bombing 

the federal government haphazardly just doesn’t seem rational( again just my opinion)

 

 

[Ulti]

When I heard private equity and cutting in the same sentence…. I tuned out… I’ve seen 1st hand how private equity has destroyed healthcare…. Again I’m not arguing against the need for massive 

cuts and upgrades thruout government…and everyone I know who works at a fed state county and local government agrees……it’s going about it as rationally, efficiently, and openly as possible…..and not letting unknowns sysadmins have access to sensitive information without a check in place and being vetted…  Otherwise you run.  a greater risk of a Snowdenesque event…

(Just an opinion )

[kab60]

It's pretty insane to watch what's going on. I struggle to see any significant gains, but I can see a lot of un-intended consequences of making everyone, apparently save for Russia, your public enemy.

 

I am a Dane, and most of my neighbours drive Teslas. I doubt anyone will buy a new one, as they're embarrassed to support Elon and Tesla. 

 

While Tesla is small in the big scheme of things, every allied country has to rethink their relationship with the US and US companies. The US, accounting for 70% of global stock market value, is suddenly a Pariah in Europe and Canada. Can investment managers sleep well with 70% of their assets in US equities? Record-high equity markets and massive in flows from around the global has given US companies a huge funding advantage as well as boosted local wealth. No wonder Europe has outperformed US equities YTD. What happens to inflated assets when buyers go elsewhere? I don't know the answer to any of this, but it seems to me like the US is making a huge own-goal. 

 

I have always been bullish the US, much less so Europe. That's changing these days, as I think there is finally a chance that Europe gets (some of) its shit together or just muddles along while stuff gets incrementally worse in the US.

Edited 19 hours ago by kab60