2025 Investment Thread

[GAJ]

That would be fine if we weren't putting tariffs on our allies as well.

 

[OldMadBrit]

Sure but there is one angle that "trumps" this: Japan cannot protect it's interests from China's imperial ambitions, and Europe can't protect it's interest from Russia's imperial interests, without strong US assistance on both fronts. That's more true now, than anytime in the last 30 years. Maybe that will be different in 15-20 years if they invest massively in defense, but that's a long time to be exposed naked?

Unless it escalates to a full nuclear engagement - is which case we are all screwed - I believe Europe will put up a bigger fight than most realize.
The front-line countries have been quietly preparing to fight the next war, while Russia (and to some extent the US) have been preparing for a re-run of WWII.
We are seeing the asymmetry of that playing out in Ukraine now and in the preparations of the Baltic States.

 

[OldMadBrit]

I'm not sure what other choice we had. We wrongly assumed that as China grew, their economy would peacefully transition to an Asian equivalent to the US. Instead, their trade surplus has doubled since 2018. Long held wisdom was that due to the one-child policy, their workforce would age and they'd give up some of their manufacturing dominance. But the curveball is AI/robotics advances, how many more years before we have robot factories that build robots that make factories?

They are going to fucking go for it, and then what for us? They export literally every good for zero marginal labor cost, and we export... mostly arms

There I fixed it for you. Arms and intelligence are our biggest exports, but they mostly don't show up in the balance of trade and few politicians want to acknowledge it. We just screwed this up big time.

 

[mercurial]

That would be fine if we weren't putting tariffs on our allies as well.

The European Allies are relying on US to provide them with a security guarantee but aren't pitching in, contributing to our large and unsustainable fiscal deficits. Or what about how they constantly mettle with our strongest export product, technology services? Our far east allies are allowing Chinese goods to route through their economies and into ours. At some point you do what you gotta do to fix the tails that are wagging the dog?

 

[OldMadBrit]

I just got off a business call where the decision was made to replace the US made products that we exported to Europe, with European produced versions. One key factor is that these include PRC sourced titanium for which there is no US supply and little chance of one for at least 2-3 years.
So here is an example of the end of a US business that until today imported low-cost materials form the PRC, produced high value-added products from these and exported them. In other words, the death of a US based poster child for the free market and its replacement with a new EU based version.
The result is a net loss of high-tech exports for us in the US and pretty much business as usual for the European end-users.
Free trade remains the norm outside the US, the Great Isolation has begun.

 

[OldMadBrit]

The European Allies are relying on US to provide them with a security guarantee but aren't pitching in, contributing to our large and unsustainable fiscal deficits. Or what about how they constantly mettle with our strongest export product, technology services? Our far east allies are allowing Chinese goods to route through their economies and into ours. At some point you do what you gotta do to fix the tails that are wagging the dog?

The US security guarantee was a two-way street, negotiated in the decade after WWII.
Europe undertook to primarily purchase its armaments from the US, hand over its massive lead in aerospace technologies to the US and undertook not to form a single coordinated EU military in favor of a US led NATO.
FWIW, Canada's aerospace industry got burned as well.

 

[GAJ]

The European Allies are relying on US to provide them with a security guarantee but aren't pitching in, contributing to our large and unsustainable fiscal deficits. Or what about how they constantly mettle with our strongest export product, technology services? Our far east allies are allowing Chinese goods to route through their economies and into ours. At some point you do what you gotta do to fix the tails that are wagging the dog?

US defense budget is a larger part of GDP because they don't just defend Europe.

The EU is ramping up but that is not enough.

Lets hit them with tariffs.

Brilliant.

 

[GAJ]

The US security guarantee was a two-way street, negotiated in the decade after WWII.
Europe undertook to primarily purchase its armaments from the US, hand over its massive lead in aerospace technologies to the US and undertook not to form a single coordinated EU military in favor of a US led NATO.
FWIW, Canada's aerospace industry got burned as well.

I expect less reliance on US military hardware moving forward.

 

[Reli]

Huge spike today, tariffs suspended

Shorts gettin' rekt

 

[mercurial]

You guys are spouting

US defense budget is a larger part of GDP because they don't just defend Europe.

The EU is ramping up but that is not enough.

Lets hit them with tariffs.

Brilliant.

The US security guarantee was a two-way street, negotiated in the decade after WWII.
Europe undertook to primarily purchase its armaments from the US, hand over its massive lead in aerospace technologies to the US and undertook not to form a single coordinated EU military in favor of a US led NATO.
FWIW, Canada's aerospace industry got burned as well.

Why are you continuing to quote a strategic agreement from 1945 that Europe has been essentially violating since 1990 (as soon as it was in their perceived interests to do so.) Going to post the relevant stat again: Europe has been underperforming on military budgets since 1990. They affirmed their commitment to improve in 2014 and totally failed to follow through. These are both cold, hard facts.

 

[OldMadBrit]

You guys are spouting




Why are you continuing to quote a strategic agreement from 1945 that Europe has been essentially violating since 1990 (as soon as it was in their perceived interests to do so.) Going to post the relevant stat again: Europe has been underperforming on military budgets since 1990. They affirmed their commitment to improve in 2014 and totally failed to follow through. These are both cold, hard facts.

Again, facts are largely irrelevant at this point. Its political and that is entirely down to how voters feel

 

[N4teTheGreat]

Didn't take long for Trump to blink, guess I should have waited, not that anyone can predict bone he'll wake up needing to chase.

 

[mercurial]

Did he blink? Looking past all the trader exuberance, now we have 500B in dislocated China->US trade. Rest of world will now decide how/if that gets absorbed.

I can't pretend to understand the decision making behind his tactics, let alone where he might go next. But after this reversal, we are still at day 0 in a different world.

 

[Mike95060]

The term "We are diminished" applies to this situation, methinks. How sad.

My son's spouse is coming to the U.S.A. from Germany next week after a lengthy immigration proceeding. There are concerned about entering the U.S.A. Again, how fucking sad.

As a naturalized citizen, I am concerned how far the deportations will run, although I have never run afoul of the law. Hey, I get to write "how sad" again!

Tell Geoffrey Congrats for me!!

 

[Caddywumpus]

Sure but there is one angle that "trumps" this: Japan cannot protect it's interests from China's imperial ambitions, and Europe can't protect it's interest from Russia's imperial interests, without strong US assistance on both fronts. That's more true now, than anytime in the last 30 years. Maybe that will be different in 15-20 years if they invest massively in defense, but that's a long time to be exposed naked?

Europe is already rearming. SAAB is going to make the next generation air systems for the EU. The Eu is pouring billions into their own defense. Yes the results wont be seen today but in a few years it will.

Todays spike made me glad I sold half my TSLA put position at a 110% gain. The rest are free and ride to July. They lost a senior CFO/Controller type which is what the third one to resign in the past few years? Q1 Results will be a bloodbath and Q2 deliveries will be horrid. As far as I know they are still producing the CT and those things are just clogging up lots. Demand is nil.

I probably have a few covered calls to roll on Friday but the week is not nearly over.

 

[GAJ]

Again, facts are largely irrelevant at this point. Its political and that is entirely down to how voters feel

The idea that the US has underperformed economically in recent years/decades is hogwash.

I think I may have posted this before here. Fareed Zakaria.

“The real economic story of the past three decades is that the United States has surged ahead of all its major competitors. In 2008, the U.S. economy was about the same size as the euro zone’s; now, it is nearly twice the size. In 1990, average U.S. wages were about 20 percent greater than the overall average in the advanced industrial world; they are now about 40 percent higher. In 1995, a Japanese person was 50 percent richer than an American in terms of GDP per capita; today, an American is about 150 percent richer than a Japanese person. In fact, the poorest American state, Mississippi, has a higher per capita GDP than Britain, France or Japan.”

 

[N4teTheGreat]

If only GDP was evenly distributed, I don't really look to Mississippi as a bastion of wealth and high living standards.

 

[Das MotorRad]

i think that's the point, our 'worst' state in gdp per capita is higher than britain, france, or japan

 

[N4teTheGreat]

I'm clearly missing the point, I've been to those places and there's no chance you'd mistake them to Mississippi.

 

[Das MotorRad]

I'm clearly missing the point, I've been to those places and there's no chance you'd mistake them to Mississippi.

that's a good point, they mention that after Purchase Power Parity adjustments the figures are much closer