Global/Slant

Headline:
Equity Market AI Bets = Delusion Or Reality?

******************

Much Market AI Chatter…

With Regard To Stampeding 6 Month Price Action…In Technology Equities/Sectors = [See Charts Below]…

While Also Impacting Derivative Industries…

Such As Utilities = AI Energy Consumption…

And…Metals/Mining = AI Enabling Basic Materials…

******************

So…AI Expectations/Fundamental Valuations Have Dramatically Ramped…

In Just 6 Months…

Recently Fueled By OpenAI’s Sam Altman…

Almost Endlessly Announcing Hundreds Of Billions In AI Infrastructure Spend…

To Be Deployed Over The Next 5 Years…

Despite OpenAI’s Staggering Free Cash Burn…

That Is Boldly Set To Sharply Increase…

To Scores Of Billions In Just The Next 24-36 Months…

Strongly Suggesting A Bloated + Debentured Balance Sheet.

******************

Wall Street Skeptics Are Finally Raising Logical Objections/Questions…

As Optimistic AI Platitudes…Thus Far = Too Short On Specific Financial Facts…

Especially With Respect To Underwriting The Construction/Outfitting Of Scores Of Data Centers…

Required To Meet AI’s Massive Computing Requirements.

For Instance…

How Will OpenAI’s Trillions In Capital Expenditures Be Financed?

The Current Answer By Altman = And I Paraphrase…

“We’ll Figure It Out”…

Because According To Altman…OpenAI’s Revenues Are Growing Exponentially…

But Even Altman Admitted In A Recent Interview…

His AI Vision Might Not Materialize As Hoped.

******************

Nevertheless…It Is Full Steam Ahead…

As Almost All Mega-Cap Technology Companies Have Embraced Altman’s/OpenAI’s Boundless Enthusiasm + Optimism…

Chugging Much AI Kool-Aid…

Convinced That AI = A Transformative Technology…

Worthy Of Enormous Financial Resources.

******************

Thus…At A Frenzied Pace…Hyper-Scalers Et Al…Are Announcing/Constructing AI Data Centers…

Stacked + Stuffed With Servers Containing

1. MU Memory +
2. NVDA Chips +
3. STX/WDC Hard Drives

So Much So…That…

1. ANTHROPIC +
2. GOOGL +
3. META +
4. MSFT +
5. ORCL +
6. X [Musk]

…Seem To Be “Betting A Lot Of The Ranch” On AI…

Sacrificing/Swapping Near Term Free Cash Flows + Legacy Balance Sheet/Income Statement Discipline With Debt…

Dramatically Raising The ROIC Bar.

******************

Interestingly…A Significant Catalyst To This Technological Excitement =

U.S. President Trump + His Stargate Blueprint…Announced In Early 2025…

Committing To Global AI Dominace + Superiority…

And Initiating The Federal Government’s Plan To Also Build-Out Dozens Of AI Data Centers…

Acting As A Pretext…To A Warp Speed AI Arms Race…

Between U.S. Based Mega-Cap Technology Companies + The Federal Government.

The President Was Likely/Strongly Influenced + Motivated By Technology Advisor David Sacks…

And His Powerful Mega-Cap Technology CEO Connections…

Whom Might Figure That The Cost Of Paying For A New White House Ballroom Is A Rounding Error…

When Contrasted To 100% AI Policy Support + Accelerated Depreciation Schedules Tied To Costs Associated With The AI Build-Out.

******************

Clearly AI Is Here + Gaining Great Momentum…

With Both Its Virtues [Increased Productivity] + Pitfalls [Massive Power Consumption Requirements]…

Despite Critical Financial Questions Still Outstanding =

1. What Is The Projected ROIC For These Data Centers?

And Maybe More Importantly…

2. Over What Period Of Time Will Returns Accrue?

Yet Oddly….ROIC Has Not Yet Been Specifically Or Publicly Articulated/Mapped Out…

By Any AI Technology Mega-Cap CFO/CEO.

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And Perhaps The Most Peculiar Feature Of This AI Arms Race =

Typically…Companies In A Heightened Capital Expenditure Mode…

Electing To Sacrifice Short Term EPS/FCF For Strategic Opportunity…

See Their Equity Prices Sag…

Until There Is Some Light At The End Of The Capital Expenditure Tunnel…

Rather Than Paradoxically Leap…

While The Recipients Of The Contemporary Capital Expenditure Binge…

Quickly Benefit…As Many Have…Including AI Chip Designer NVDA = The Silicon Engine Of AI.

******************

Furthermore…The AI Equity Narrative Almost Exclusively Focuses On Demand…

With Not Much Regard To Duplicity Of Products/Services.

Recently AMD’s CEO Lisa Su Communicated That Current Demand For AI Semiconductors = “Insatiable”…

 

While Offering Scant Commentary On An Increasingly Competitive AI Landscape.

From Ms. Su…It Sounded Like An “If We Build It…They Will Come” Moment.

Indeed…It Certainly Seems “They Will Come”…

And In Many Instances…“They” Are Already There…

But At What Ultimate Financial Cost Will “They ALL Come?”

For Now…Nobody Really Knows.

******************

Irrespective Of The Financial + Technological Outcomes…

It Is Certain AI Will Evolve…

Becoming Better + Faster…

Likely…Less Expensive…

Yet Potentially…

AI Could Become So Brilliant That It Will Absurdly Cannibalize + Mutate + Reinvent Itself…

Rendering Today’s AI Spend…In Retrospect…As Monetary Gluttony + Waste.

******************

So…Given All…

Have AI Focused Technology Stocks Already Discounted Much Of The AI Technological Mega-Trend?

In The Short Term…It Seems Like It…

As Price Charts Demonstrate An Everybody Agrees/Too Crowded Trade.

However For The Medium + Long Term…Likely Not.

But That Time Bridge From Short Term To Medium/Long Term…

Will Probably Be A Much More Challenging + Twisted Path For AI Focused Equities…Than The Prior 6 Months.

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Headline:
Just A Matter Of Time.

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It’s Become Irrelevant If Federal Reserve Chair Jerome Powell Fulfills His Entire Term…Concluding May 2026…

As The Federal Reserve’s Legacy Tactics + Strategies Will Soon Be Dramatically Trump-ified…

By A Forceful Executive Branch Make-Over Of The Fed.

*****************

Thus…The Next Appointed Fed Chair…Whomever It Is =

Already 100% Compromised…

As Trump Will ONLY Select Somebody Willing To Capitulate To His Monetary Policy Directives…

Primarily Because Trump = “Control Freak”…

And For Now = He Does NOT Control Monetary Policy…

But In The Near Future…That’ll Change.

*****************

Meanwhile…Trump + His Bullying/Lightweight Economic Cohorts =

1. Navarro +
2. Pulte +
3. Vance +
4. Vought

…Unleash A Relentless Barrage Of Brutal Personal/Professional Criticisms Toward Powell + The Fed…

Intending To Massively Discredit Both…

Setting The Pretext For Dramatic Change…

While Demonstrating…Once Again…

A Requirement For Those Positioned In Trump’s Administration =

Exchanging Any Sense Of Decorum/Respect For…

1. Pair Of Trump Worshiping Knee-Pads +
2. Militant Adherence To Harshly Disparage Those Deviating From Trump’s Commands/Demands

*****************

Anyway…It Seems Trump’s First Order Monetary Policy Motivation =

Substantially Reduce The Costs Of U.S. Debt Service:

From: $1T/Fiscal Year = 16% Of Total Federal Spend
To: A Heck Of A Lot Less = As In 75-90% Less

Of Course = A Noble Objective…

But In The Short Term = Virtually Impossible…

As The Fed Controls Interest Rates Only At The Shortest End Of The Yield Curve…

While The Current Average Maturity Of U.S. Debt = 6 Years = Intermediate Duration.

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So Even If Trump’s New Fed Chair…Follows His Orders…

And Immediately Reduced Interest Rates 300 Basis Points…As Trump Has Publicly Articulated…

The Intermediate + Long Term Portions Of The Yield Curve Would Likely Dive In Price = Sending Yields Much Higher =

Likely Counter-Compensating…Equally Or More…

Any Benefits The U.S. Treasury Would Accrue At The Short End Of The Yield Curve…

Absolutely Reflecting =

1. Direct Political Interference At The Fed +
2. Un-Anchored Inflation Expectations

*****************

Further + Apparently…Trump’s Strategy To Reduce Fiscal Interest Expense…

Includes Several Steps =

First…Bring Down Short Term Interest Rates…

Then…Substantially Reduce Debt Maturities…

To Take Advantage Of The Lower Front End Rates…

Which Sounds Fine In Theory…But It Is Commercially Impractical…

As Global Businesses + Financial Intermediaries Require A Full Spectrum Of Maturities…

Not Just Price/Supply Distorted Short Duration Debt…

From The World’s Largest + Most Liquid Bond Market…

To Operate Their Business Models.

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Trump Also Indicates The Fed’s Current Interest Rate Policy = Unjustifiably High…

Thereby...Unfairly Penalizing U.S. Government Finances…

As Restrictive Interest Rates =

1. Increase The Cost Of Servicing U.S. Debentures +
2. Subdue Economic Activity/Tax Receipts

However…That The Current U.S. Fiscal Budget = Hamstrung By High Interest Payments =

More Reflective Of The $36T Mountain Of Absolute Debt To Service…

Accumulated EVERY YEAR Since 2001= Both Democrat + Republican Controlled Congresses…

Rather Than The Absolute Interest Rate.

*****************

Still…Despite Many Legitimate + Practical High Hurdles…

There Is No Doubt = Trump Will Attempt To Stamp His Brand Of Monetary Policy On Global Financial Markets…

With Potential Draconian Maneuvers Including =

1. Declaring U.S. Deficits/Debts As Another National Emergency…

Thereby “Clearing The Decks” For

2. Merging U.S. Treasury + Fed Functions = Working In Concert To Manage National Deficits/Debt +
3. Yield Curve Control = 10 Year Duration = Critical Focus

*****************

So…Trump Will Further Shake The Economic Snow-Globe…

Eradicating + Flipping The Notion Of Fed Independence =

As Trump’s =

1. Framework +
2. Narrative +
3. Path

…For The Next Generation Federal Reserve = Appears To Have Already Been Set.

*****************

Headlines:
1.  Power Corrupts +
2. Large Scale Voter Illiteracy = Enables.

****************************

No Matter The Idealistic Beliefs And/Or Political Party…

Eventually…“Bought + Paid For” U.S. Presidential Politicians =

1. Stumble Badly +
2. Disappoint Constituents +
3. Backpedal/Defend/Rationalize

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So Almost All Excell At Playing =

The Dirty Political Survival Game…

“Horse-Trading” Their Intellectual Dogma…

In Order To Exclusively Enrich Themselves With…

1. Power +
2. Prestige +
3. Privilege +
4. Recognition

…Irrespective Of The Collateral Damage =

1. Economically +
2. Geo-Politically.

…To Sovereign “Stars + Stripes.”

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Nevertheless Elected U.S. Presidents Earn Majority Support…At The Ballot Box.

However…Much Of That Support Now Originates From A…

1. Dubious +
2. Growing +
3. Trending

 …43 Million “Functionally Illiterate” = 21% Of U.S. Voting Eligible Adults…

According To Department Of Education’s = National Center For Education Statistics [NCES]…

Characterized As Those Having Substantal Difficulty With Basic Literacy Tasks =

1. Comparing/Contrasting Information +
2. Making Low-Level Inferences +
3. Paraphrasing

As Well As Lacking Elementary Abilities To =

1. Calculate +
2. Read +
3. Write

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Thus…The U.S.’s Enormously Embarrassing  43 Million “Functionally Illiterate” Voting Block…

By Definition = Not So Challenging To…

1. Angle +
2. Deceive +
3. Persuade

…Easily Facilitating U.S. Presidents’ Insatiable Thirst For Populous Votes + Political Power.

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Headline:
Classic Henchmen.

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The U.S. Financial Market’s Capital Destroying Hurricane Was Brutal + Swift…

Unleashed By Trump’s Draconian Country Specific Tariffs =

Self Inflicted Supply Shock = Assigning $$ Burden To U.S. Businesses + Consumers = Indirect Tax. 

Naturally…Bonds + U.S. Dollar + Stocks = Mercilessly Liquidated [See Below].

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Yet BHLN’s [Bessent + Hassett + Lutnick + Navarro] Subsequent Tariff Commentaries…

Indicate They Were Genuinely Startled By The Magnitude Of Market Declines =

A Huge Problem = As Their Collective Economic Ignorances Demonstrate:

1. Blind Loyalty To Master President Irrespective Of Market Signals Pointing To Likely Failure Of Economic Policy Objectives.
2. Deficient Capital + Financial Market Competencies.
3. Inabilities To Consider Secondary + Tertiary Consequences To Meaningful Economic Policy Pivots.
4. Intellectual Absolutism/Intransigence Toward Desired Economic Outcome In A Dynamic Global Economy With Unpredictable Response Mechanisms.
5. Lack Of Courage To Challenge President Despite Substantial Damage To U.S. = Company/Industry + Economy + Sovereign Brand.

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Furthermore…It Certainly Seems Trump Does Not Fully Comprehend Capital Markets…

And The Fragile Global Inter-Connections Between Bonds + Commodities + Currencies + Equities + Real Estate…

In Many Cases Collateralized + Financed + Margined With Strict Monetary Covenants.

At Their Core…Financial Markets Enable Capital Formation…

In Order To Grow + Innovate + Mitigate Risk…

Of A Consumptive Economy.

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And When These Capital Apparatuses Unusually Contort + Fail To Reliably Fire/Project…

As Currently = Dramatic Yield Spread Widening = Investment Grade + Junk + Municipal + Sovereign…

Markets Transmit A Flashing Red Signal That Economic Instability/Uncertainty Presides And Is Further Anticipated…

Unless Trump Either Soon Capitulates To The Market’s Desires…

Or Dramatically Improves His Economic Policy “Pitch”…

Which Thus Far =

1. Erratic +
2. Hostile +
3. Inconsistent +
4. Intellectually Hollow.

****************************

Plus…That The Rest Of The World Is “Ripping Off” The United States…

Vis-A -Vis Trade Imbalances =

Too Simplistic + Vague.

Moreover…Trump Also Frequently Exaggerates + Mischaracterizes Financial Trade Facts.

For Instance The U.S. Goods Trade Deficit = While Regularly Robust…

Is Countered By A Consistent U.S. Services Surplus Of $20B+/- Per Month.

Further…Trade Deficits Calculate Gross Dollars…Not Profits [Much Smaller Percentage Of Gross Dollars].

And…Of Course…U.S. Goods Deficits Provide Consumers With Price Competitive Products…

Most Of Which Are Not Essential To National Security [Door Hinges + Sneakers].

What’s More = Inexpensive Goods Marginally Reduce U.S…

1. Inflationary Impulse +
2. Interest Costs/Rates

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Nevertheless…Global Goods Trading Metrics Could Be Much Improved [Universal Zero Tariffs]…

Especially With China = The #2 Global Economy [GDP] + Large Exporter To U.S…

Yet China = Communist Geo-Political Adversary = An Especially Complicating Factor…

Further Exacerbated By China’s Long Standing Reputation = Dicey Global Business Practitioners =

1.  Copyright/Intellectual Property Theft + Patent Infringement [Entertainment/Software] +
2.  Currency Manipulation +
3.  Energy Purchases From/Enabling Sovereign Bullies [Iran/Russia] +
4.  Import Trade Barriers +
5.  Questionable Accounting/Financial Statement Principles/Standards +
6.  Over-Supplied/Subsidized Industrialized Materials [Aluminum + Chemicals + Solar Panels + Steel]

…Ad Nauseum + Et Cetera.

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So…Despite Trump’s Self Professed Expertise…On All Subjects…

As It Specifically Pertains To The Intersection Of Capital Markets + Geo-Political Dynamics…

TRUMP IS CERTAINLY NOT THE SMARTEST GUY IN THE ROOM…

Because If He Were That Intelligent + Savvy…

He’d Quickly Realize His Extortionary Tariff Tactics Are Broadly Injuring The United States…

1. Economically +
2. Politically +
3. Reputationally

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…And In Order To Get Financial Markets “On Board” With His Nationalistic Dealmaking Policies…

The Requirement = A Less Economically Painful + More Judicious Medium Term Path To The Other Side Of Tariff-Ville…

Or He Greatly Risks Achieving Friendlier Financial Policy Objectives [Deregulation + Tax Policy] = Markets Would Welcome.

And That BHLN Appears Not To Have Counseled On These Specific Matters = Enormously Concerning.

Maybe Because Trump Clearly Values Personnel = More Adherent + Loyal To His Idealistic Beliefs…

Rather Than Competent + Professional.

And There Appears To Be Much Incompetence…

Well Beyond Commerce + Economics + Trade + Treasury.

For Example…Health + Human Services Secretary [RFK Jr.] = Prior 14 Year Heroin Addict + Now A Proud Conspiracy Theorist.

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Anyway…Trump’s Haphazard Tariff Policies = Increasingly Criticized + Scrutinized.

No Matter…Zealous Trump Believes He Knows What’s Best For America…

And When He Does Not Get What He Desires =

Trump Morphs Into A Macho Drama Queen…

1. Threatening +
2. Victimizing +
3. Whining

So For Now…The World Economy Is Primarily Beholden To Trump’s…

1. Dubious Emergency Declarations +
2. Emotional Financial Judgments +
3. Random Tariff Pivots

= The Distorted + New Normal For Capital Markets.

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Headline:
Trump’s Chaotic Economic + Political Strategy.

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The 24/7 U.S. Political Drama…

With It’s Substantial Economic Impacts…

Sure Is Dramatic + Entertaining.

But Not Sure Which U.S. Political Party…Thus Far…Has Been More Pathetic…

**********************

The Republicans’ Endless Victory Laps…

Proselytized By Conservative Media + Egomaniac Trump On Truth Social…

Or Donny T’s Ridiculously Heeling Henchmen…

Regurgitating Pre-Ordained “America First” Talking Points…

With Mechanical Stepford-Esque Style…

Their Blind Loyalty Soaking In Trump’s MAGA Kool-Aid…

Especially Trump’s

1. Annoying +
2. Defensive +
3. Forceful +
4. Loud +
5. Righteous

Female Mini-Me = White House Press Secretary Leavitt

Or

…The Democrats’ Constant Whining About The Deconstruction Of The Money Shredding Federal Administrative State…

As Their Front Row Seat To The Swift Dismemberment Of A Mostly Bloated Federal Bureaucracy Horrifies + Paralyzes Them.

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No Doubt = These 2 U.S. Political Parties Are Idealogically Polarized…

As Any Cordial Political Co-Existence = Pipe-Dream…

Unless…Somehow Trump Becomes A Political Unifier…But Don’t Bet On It…

As His Scorched Earth And Shock/Awe Tactics To Dismantle DC’s Status Quo…

Combined With His Frequent + Public Humiliations Of His Political Opponents…

Only Widen An Already Gargantuan Political Chasm.

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The Democrats…For Some Odd Reason…

Cannot Accept What The Republicans Have FINALLY Acquiesced To…

That Is…The Federal Government’s Grim Financial Reality…

For 24+ Years…Under Both Political Party’s Executive + Legislative Leadership…

Federal Spending Has Far Outstripped Federal Revenue…

Continually Building A Mountain Of National Debt [$36T+]…

Now Even Greater Than Nominal GDP…

Requiring Active + Urgent Measures To…

At The Very Least…Minimize Annual Budget Deficits…

So That Aggregated Debt…Grows More Slowly…

Which…Even With DOGE…Will Be Difficult To Achieve…

As Annual Interest Payments On The National Debt…

Now Approximate $1T Or Close To 50% Of Recent Nominal Budget Deficits…

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And Will Soon Increase = Hockey Sticking The Cost Of Debt…

As Current Interest Rates [4%+] Tower Over Rates Attached To Previously Issued + Now Maturing Federal Debentures…

From 2010-2022…[See Below].

Plus…Higher U.S. Interest Rate Payments Are Compounded By An Ever Increasing Absolute Stack Of U.S. Debt [See Below].

Essentially A Double Edged Debt Sword…That Cuts Twice Deep =

Knee-Capping The U.S. Budget From Day #1 Of Each Fiscal Year.

**********************

Therefore The Democratic Party’s Desperate Quest To Clench Onto The Federal Government’s Prior Fiscal Standard =

Print Money + Spend Money…

Is A Much Flawed + Self-Immolating Strategy…

Because JOHN Q. PUBLIC… Naturally…Is Really Pissed Off…

That A Lot Of His Tax Dollars Were Carelessly + Idealogically [i.e. USAID] Spent…

As Already Demonstrated By DOGE’S $55B+ In Cost Saves…

Though Legitimate + Necessary + Tangible…

Are A Rounding Error When Contrasted To The $36T+ Stockpile Of U.S. Debt.

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All Of Which Lays Bare A Convoluted + Murky Domestic/Global Economic Picture…

Certainly Transmitting To Almost All International Financial Markets…

Primarily Because Of Uncertainties Linked To Proposed U.S. Policies =

Some Of Which BRAKE The Economy=

1. Fiscal Spending Cuts +
2. Immigration +
3. Tariffs

And Some Of Which ACCELERATE The Economy

1. Deregulation +
2. Tax Cuts

**********************

Meanwhile…Perpetually

1. Opinionated +

2. Transactional 

3. Victimized

Trump…Keeps Markets On Edge…

With Every Social Media Post + Spoken Word.

Media Spotlights Now Increasingly Shine On Foreign Leaders Too…

Addressing How They Intend To Reciprocate…To Proposed U.S. Tariffs And…

Quickly Shifting Overseas Sovereign Fiscal Plans…

Especially Europe…To Counter The U.S’s Surely Culled Monetary Support For NATO…

Re-Positioning + Reinvigorating Defense Budgets…That Have Atrophied For Many Years.

So…Fiscal Spending Priorities Are Drastically Pivoting…

Which For Any G-7 European Sovereign = Massive Economic Implications…

**********************

Ultimately…Markets Will Have A Clearer Sense Of U.S. Policy…

Allowing For More Aggressive + Directional Asset Price Positioning.

To That End…Until Very Recently The Bond Market’s Bet =

A U.S. Inflationary Impulse…

Primarily Tied To Trump’s Immigration + Damocles Sworded Tariff Policies…

Explaining Much Of The 10 Year Treasury Yield Launch…Its Highest Levels Since 2009 [See Above]…

A Yield Dynamic Initiated Just Prior To The U.S. Presidential Election In November ’24.

**********************

However…That Trade Has Recently Come Into Question…

And 10 Year Bonds Have Been Marginally Bid + Gaining Momentum…

As Last Week’s Typically Reliable Atlanta Fed GDP Estimate For Q1 ’25 Was Revised Substantially Lower…

From: +2.30% = Annualized Rate Of Growth…

To: -1.50% = Annualized Rate Of Contraction

…Equating To An Enormous Downside Revision.

**********************

Coupled With Recently Dismal Consumer Confidence Readings…

From Both The University Of Michigan + Conference Board…

And…S&P’s Flash U.S. PMI Commentary For February…

Which Was Particularly Bleak =

A Sour Recipe For Near Term U.S. Economic Activity.

**********************

Essentially…Consumers + Businesses Have Been Overwhelmed With A Tsunami Of DC “Snow Globe” Shaking…

Initiating…

1. Apprehensions +
2. Fears +
3. Uncertainties

…About Future U.S. Economic Performance…

Primarily Due To U.S. Policy Dynamics + It’s Wide Range Of Potential Outcomes…

Focusing…For Now…On The Bad Potential Outcomes Rather Than The Potentially Good.

So That The 10 Year Treasury Yield Has Retreated By 40 Basis Points …Since Trump’s Inauguration…

Is More Reflective Of U.S. Economic Growth Concerns vs. Reduced Inflation Fears.

**********************

Moreover…Trump Executive Order’s His Economic + Social Policies On All Americans…

Despite A Very Marginal Popular Vote Victory = 77.3M Vs. 75.01M…

Which…Incidentally…Is Neither A Mathematical Landslide Nor A Legislative Mandate.

Nevertheless…The Republicans Do Control…

1. The Executive Office +
2. Both Legislative Branches +
3. The Supreme Court

Which = Both Powerful + Rare.

So…Continue To Expect More…

1.  Bullying +
2.  Extorting +
3.  Intimidating Tactics

From The U.S. President…On All Policy Fronts…Domestically + Internationally…

As His Idealogical Righteousness Only Ramps With His Number Of Days In Office + Political Allies’ Adulations.

**********************

Still…It Is Likely That Trump’s

1. Aspirational +
2. Expectational +
3. Preferred Outcomes

…For His Visioned U.S. Economy Characterized By…

1. Isolationism +
2. Nationalism +
3. Tariff-ism

Will Not Unfold Precisely As He And His Advisor’s Have Calculated + Mapped.

Transitions Of Any Type Are Always Potholed + Tricky…

Especially For The Globe’s Largest Sovereign.

Therefore…Almost All Economic Outcomes…Will Include…

Intended + Unintended Consequences…

Some Of Which = Negative + Some Of Which = Positive.

The Economic Magnitude Of The Ultimate Policy Transitions =

Nobody Truly Knows…Just Too Many Moving Parts…

As Well As…Currently…Not Too Many Stable Parts Either.

**********************

And In Spite Of The Administration’s Urgency To Tackle…What They Consider…

Countless + Legitimate National Issues/Problems…

In All Likelihood…Trump’s Executive Team = Spreading Themselves Too Thin…

Because Usually…

Too Much + Too Fast = Too Sloppy Outcomes.

**********************

But It Seems Trump Could Not Care Any Less…

As He Now Absolutely + Zealously Articulates The Reason His Life Was Spared From A Western Pennsylvania Rooftop Rally Shooter Last Summer = 

Apparently…The Almighty Himself Saved Donny T. From That Volley Of Bullets…

So That Trump Could Specifically Fulfill His MAGA Political Agenda…

Which If Trump Truly Believes =

Is Quite Motivating For Him + Quite Scary For His Political Opponents.

So Brace Yourself…

For Many More Snow Globe Shakes To Come.

**********************

Headline:
Neither Political Party Has A Scintilla Of Fiscal Discipline.

******************************

Market Structures Are Broadly Defined By The Following =

1. Perfectly Competitive +
2. Oligopoly +
3. Monopoly

******************************

Governments [Federal + State + Local] = Necessary Monopolies.

And Since Monopolies Are Inherently Inefficient [i.e. No Competition]…

They Ought To Be As Small As Possible + Strictly Managed…

So Their Inefficiencies Are Minimized…

Thereby Enabling The Majority Of Capital To Flow Toward Competitive + Efficient Private Markets.

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Consider The U.S. Government’s Monopolistic Financial Impacts On The U.S. Economy.

Most Recent Data Compiled By The U.S. Government’s Bureau Of Economic Analysis Estimates…

Q2 2024 Non Inflation Adjusted Annualized GDP = $28.652T+

Federal Government’s Annualized GDP Contribution = $1.865T Or 6.509%

State + Local Government’s Annualized GDP Contribution = $3.134T Or 10.938%

So…Combined = Total U.S. Government Contribution To GDP = $4.999T/17.44%.

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Also…According To The August 2024 U.S. Treasury Statement = Fiscal Year 9/24 To Date…

The P&L Of Just The Federal Government…With 1 Fiscal Month Still Remaining…

Has Generated A Deficit = -$1.897T…

Based On Tax Receipts = $4.391T
+
Total Federal Spend = $6.288T.

Almost Mirroring The Federal Governments Annualized GDP Contribution Of +1.865T…

Which = Pretty Darn Inefficient.

Yet The 2024 Federal Fiscal Deficit Is Not Idiosyncratic…

As Federal Deficits For The Prior 11+ Fiscal Years Are Also Consistent + Significant:

Fiscal 2023 = -$1.695T
Fiscal 2022 = -$1.375T
Fiscal 2021 = -$2.772T
Fiscal 2020 = -$3.132T
Fiscal 2019 = -$.984T
Fiscal 2018 = -$.778T
Fiscal 2017 = -$.665T
Fiscal 2016 = -$.587T
Fiscal 2015 = -$.439T
Fiscal 2014 = -$.483T
Fiscal 2013 = -$.680T

These Annual Deficits Compound To Build A Mountain Of Federal Debt…

Currently $36T…And Counting.

Naturally…The Debt Must Be Serviced…With Interest Payments…

Which Are Now The U.S. Federal Government’s Third Largest Budget Expense…

More Than Defense + Health + Approximating Medicare.

******************************

Further…Close Examination Of The Above Data Paint A Considerably Bleak Qualitative Picture Of The U.S. Government’s Spending Habits…

That Is…Entitlements + Giveaways = 67.41% Of Federal Spend.

So Basically The U.S. Federal Government Might Just Be…

THE WORLD’S LARGEST CHARITY.

Therefore…It Ought To Be No Surprise That This Bloated Monopolistic Charity…

Repeatedly Produces Enormous Budget Deficits.

******************************

Plus…These Fiscal Deficits…Unfortunately…Are A Gift That Keeps Giving…

Or More Accurately…A Gift That Keeps Taking Away…

As Serial Deficits Only Augment An Accumulating Federal Debt Load…

Certainly Contributing To Higher Long Term Interest Rates…

Increasing Borrowing Costs For Almost All U.S. Individuals + Businesses…

Federal + State + Local Governments Too.

******************************

And Although Sovereigns Have Power To Tax…

It Is Ludicrous That All Major Credit Rating Agencies Assign Investment Grade Ratings To Uncle Sam’s Debentures…

Especially Considering The United States’ Consistent + Un-Interrupted Budget Deficits For Almost 2 Decades…

Well Before + Subsequent To COVID.

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Not Surprisingly…ALL Fiscal Red Ink Was Agreed To And Codified By The Legislative + Executive Branches Of Federal Government.

In Fact On Any TTM Basis Since 2001…The Federal Government Has Posted Fiscal Deficits…At Any Point On The 23 Year Timeline…

ORCHESTRATED BY BOTH DEMOCRATIC + REPUBLICAN…PRESIDENTS + CONGRESSES…

Thus…That Both Current U.S. Presidential Candidates Tout Any Fiscal Acuity And/Or Discipline…Is Plain Ridiculous.

Especially Since Both Served At The Highest Levels In The Executive Branch…

And One Also…As A U.S. Senator.

Frankly…It Appears Both Harris + Trump…

With Respect To The Fiscal Dumpster Fires They Both Ignored + Proliferated…

Are Either In Total Fiscal Denial…

Or More Likely…

A Pair Of Colossal Budgetary/Economic Idiots.

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So…Rather Than Promoting Some Semblance Of Fiscal Austerity + Discipline To The Unsustainable U.S. Fiscal Trajectory…

Both Candidates Proudly Stump To SPEND MORE + MORE + MORE…

Toward Any + Every Special Interest Group…

Selling Their Influence To The Highest Bidder…

Domestic + Foreign…

And Whether Their High Priced Campaign Promises Are Ultimately Fulfilled Or Not = Irrelevant…

As Long As They WIN.

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Furthermore…Both Candidates Cannot Seem To Grasp Onto A Basic Economic Principle…

That Is…Resources Are Finite…Especially Money.

And That There Is No Fiscal “Free Lunch.”

Rather…Fiscal Spending Must Be Massively + Necessarily Reeled In…

No Matter The Political Fall-Out…

Starting + Ending With The Lengthy List Of Entitlement Programs…

Which Can Be Immediately + Properly Addressed With A “Zero Based Budgeting” Approach…

That Neither Candidate…Probably…Can Either Define Or Understand…Let Alone Execute.

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This Is Especially Unfortunate Because The Broad Contemporary Perception That The U.S. Government Ought To…

1. Bail Out +
2. Legislatively Address +
3. Remedy

The Majority Of Business + Societal Disputes/Issues/Problems =

NOT FISCALLY TENABLE…

Whether It Be Harris’ Classic Tax + Spend Democratic Tendency…

Blaming The Wealthy For Their Successes While Commanding The Affluent To Pay Their “Fair Share”…

Even Though The Top 5% Of Earners Already Pay 66% Of The National Individual Tax Total…

Or Trump’s Contorted Nationalistic Economic Policies…

That May Be Superficially Appealing [i.e. Tariffs] But Are Ultimately Inflationary To The U.S. Economy…

Although His Prior Campaign Mantra Of “Deconstructing The Administrative State”…

Resonates With Many.

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Meanwhile…The Media Aggressively Fans The Political Battle Winds.

Advocacy Network Anchors Lecturing 24/7…

As To Why The “Other” Candidate Will Be A Political And Societal Disaster + Nightmare…

Regularly Wrapping The “Other” Candidate In A Cloak Of Fear + Uncertainty + Doubt.

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In Stark Contrast…

I Was Not Yet Born When JFK Was Sworn In As The 35th U.S. President…In January 1961.

He Served For Just 2+ Years…Then Was Brutally Assasinated.

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Still…A Singular Message From His Inaugural Address…More Than 63 Years Ago…

Recognizing The Humility + Limitations…Even Of A Powerful U.S. President…

Deserves A Giant Electoral Remembrance…

“ASK NOT WHAT YOUR COUNTRY CAN DO FOR YOU…ASK WHAT YOU CAN DO FOR YOUR COUNTRY.”

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Considering The Collective Narcissism + Entitlement Expectations Of A Predominantly Mediocre American Population…

I Suppose Many Have Never Contemplated The Concept Of Actually Doing Anything For The United States…

To Improve The Nation…

Beyond Their Righteous + Selfish Motivations…

Such As…Serving In The U.S. Military…

Or Even Something As Simple As Picking Up Litter While Walking Or Hiking At A Local + State + National Park…

Perhaps…Even Becoming More Physically Fit + Healthy…

To Decrease National Healthcare Costs…

Since 75% Of The U.S. Adult Population Is Either Overweight Or Obese … According To The CDC’s Most Recent Body Mass Index Statistics.

But Maybe…It Ought To Be Considered…

Because The U.S.A. Requires More Courageous High Achievers [Personal + Professional]…From The Ground-Up To Leadership…

In Order To Dramatically Pivot From An Increasingly Bureaucratic And Wilting Status Quo…Fiscal + Societal…

To A Less Suppressive Ethos Strictly Encouraging Legitimate + Paramount Successes…

Where The Expected Standard = Excellence…

Rather Than Just Showing Up + Participating.

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