Foreign investors provide a critical imprimatur of approval when they invest their money in China. Here is what the picture looks like over the past few decades.
This graph shows the magnitude of foreign capital investment in China expressed as a percentage of China GDP.
If you are of a certain age, you will recall the saga of the Pacific Northwest spotted owl — strix occidentalis caurina. This was the classic logging/timber/lumber v environmentalists controversy that castrated the lumber industry in the Pacific Northwest.
It is an apochryphal environmental story and one that demonstrates the impact of regulation on industry and the unanticipated impact on foreign trade. It is also indicative of the “winner-take-all” nature of politics.
In discussions around the issue of the US – China economic relationship much has been said about the threat of the Chinese dumping their extensive portfolio of US Treasuries (bonds, bills, notes). Is it a real threat?
You decide.
OK, dear reader, here are the nascent facts:
If you have been following the events in the global economy since Liberation Day you have undoubtedly been confronted with many opinions as to the wisdom or folly of the actions of President Donald J Trump — the Tariff King/Emperor. Like everything in our complicated trade picture, there is far more than meets the eye.
If you own equities, it is even possible you are choking on some meaningful paper losses.
Well, dear reader, what you are seeing is a massive global trade RESET just like re-booting your computer when it fails to operate as it is supposed to do. President Trump, as he promised, hit the RESET button and imposed tariffs based on a concept of reciprocity.
This is part of Candidate Trump’s suite of financial campaign promises: to right size the government, to get rid of fraud, waste, and corruption, to reduce spending, to conquer inflation, to lower interest rates, and to put international trade on a fair and free footing.
Leader of Israel, Bibi Netanyahu, meeting with President Trump — first in line to discuss tariffs and non-tariff barriers to trade. The parade is coming.
Part of that is fair, reciprocal tariffs. But, it is not just reciprocity, it is also what are called NTBs — non-tariff trade barriers — that have the same impact as tariffs, they restrain the ability of American manufacturers to obtain access to foreign markets and to have a fair chance to do business on a level playing field.
At its core, the Trump RESET is all about fairness. Continue reading
I was talking to the Ayatollah Ali Khamenei the other day. We speak from time to time. Time zone’s a problem.
I said to him, “Ali, my man, you’ve gotten your ass in a crack with the Trump admin, haven’t you, Old Sod?”
He sighed and then whispered (has a shallow, raspy, weak, old-guy voice), “Yes, my dear Big Red Car, we are good and truly fucked, I fear. What can I do?”
“Well, for starters, amigo, how about defunding Hamas, Hezbollah, and the Houthis? Stop firing missiles into Israel and pull out of Syria and Iraq? Stop killing Jews indiscriminately? Quit with the nuclear bomb development?”
The direct and truthful answer to that question, beloved readers, is NO. Not just “no” but fuck no.
The Trump admin — as it promised during the campaign — is pressing hard to arrange a cessation of hostilities starting with a thirty day cease fire between Ukraine and Russia for the purpose of exploring a final resolution to the war.
President Trump promised during the campaign he would negotiate an “end to the war in Ukraine before Inauguration.” That has proven to be more difficult than President Trump imagined, but he is on the job.
Putin giving President Trump the traditional Russian handjob.
Steve Witkoff, 68, is a pal of Donald Trump’s from the rough and tumble of the Manhattan real estate industry. Witkoff, a lawyer (Hofstra University 1983) is an uber successful developer, investor, and financial manager with offices in Manhattan, Miami, and Los Angeles. He is an established and successful heavyweight real estate pro in some of the toughest markets in America.
Witkoff first met Trump when Witkoff was a brand new real estate lawyer with Dreyer & Traub and worked on the Trump account.
President Trump appointed him as the Ambassador to the Middle East to deal with Israel and Hamas. Your Big Red Car gives him high marks for cutting through all the bullshit and forcing Israel to make a ceasefire with Hamas to attempt to attain the release of hostages, particularly American hostages.
Bravo and well played sayeth your Big Red Car. Continue reading
Since President Trump’s inauguration — is it really still less than the first 100 days — there has been much talk of tariffs. Trump has threatened them, imposed them, modified them, and removed them. New concepts — such as “reciprocal” tariffs — have flooded the space.
Tariffs are in play, baby.
Here’s a link to the Federal Register where you can look up all of President Trump 2.0’s Executive Orders. Federal Register
Trump 2.0 has made tariffs into a sharp-edged weapon. And, yet, we are still only in the early innings. Continue reading
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