Trump Era 2025-2029 : Stock and Economic Comment

[over9k]

Is this referring to the US tech industry?

Or is it about an awful lot of things in Australia?

Take out the specific details of company names, remove the race references, and the same scenario's played out across much of the economy.

The only saving grace is the few competent ones can generally negotiate ridiculous pay rates.

The whole west in general really.

White collar work/industries will be the next to be offshored, mark my words.

 

[qldfrog]

The whole west in general really.

White collar work/industries will be the next to be offshored, mark my words.

or already are/have been

 

[waterbottle]

View attachment 207272

From twitter:

This is 100% correct. Let me explain how this happened. Might be a bit of a long post but I think worth a read.

Firstly, people have no idea how bad off-shoring has gotten. Especially our government. Trump has been great on protecting the blue collar American worker but so far he is failing miserably at protecting the white collar American worker. He doesn't understand the tech world, it's just not his industry, and the people he has in his orbit who do understand the industry are enemies at worst and neutral at best. Drastic intervention needs to happen but right now they're all asleep at the wheel.

So how did this happen? One thing you need to understand about Silicon Valley is it's always been a mix of cowboys and nerds. Which is actually pretty ideal if you want to create an environment that maximizes innovation. But the risk you take with this kind of wild west environment is you are way more susceptible to corruption. Oversight is minimal and you are basically left to police yourselves.

Now this worked wonderfully when Silicon Valley was like 90% White American nerds and cowboys who loved technology and just wanted to build cool innovative ****. It's one of the great business stories of our age. But as with every other part of society if you lose that base of moral, honorable and homogenous people, corruption and ethnic or political nepotism creeps in.

This started to happen to Silicon Valley in Obama's second term. It dovetailed pretty well with the rise of woke. Silicon Valley companies like Google, Twitter, and others really lead the charge on the woke revolution in the corporate world. One of the advantages (or disadvantages in this case) of the wild west is you can move much quicker.

So Google et al started really ramping up the political and ethnic nepotism. The White men who built Silicon Valley were suddenly public enemy number 1 and the only way for them to absolve themselves of this original sin was to join the color revolution and point the finger at someone else.

Basically overnight the culture inside these companies became extremely far left and a lot less White. The discrimination against straight White men in hiring, promotions and work environment, was some of the worst civil rights violations in the history of our country (a crime that not a single person or company has paid for by the way.) You get the point, I'm sure most of you remember this era anyways.

While this was happening Silicon Valley is enjoying years of free-flowing capital. It was never easier to raise money. This led the industry to make a fatal mistake. They assumed the money would last forever. So they hired, a lot. Their entire business model was predicated on this assumption that the money would never dry up. They turned their efficient, wild west, move fast, startup culture into a jobs program and adult day care for far-left San Francisco communists.

I had a friend at this time who was an enterprise sales guy at google. I had a client he wanted an in with so he asked me to meet him at Googleplex and chat for a bit. He took me for a little tour of the campus which that alone was insane. But what stuck with me about that visit was how I didn't see a single person working. Not one. There were laptops everywhere but not a single keystroke. Until the end of the visit.

Right before I left, we walked past an area with individual work stations. We finally found the White men (and some asians), coding away furiously, keeping the lights on.

This was the reality for most tech companies. Insane amounts of bloat sitting on top of highly productive White guys with unlimited capital to pay for all the dead weight.

There's some debate over this but the money spigot really turned off in Q1 of 2022. Since then what you've seen is the managed decline of the tech industry. As a Silicon Valley CEO if you were one of the majority of companies who over-hired during the previous decade, you were in real trouble. The business model that had been working was suddenly broken. Pockets got tight and decisions needed to be made.

The smart thing to do, the honorable thing to do, would have been to cut the dead weight. Fire the far-left gender goblins and the communists and the diversity hires, and the managerial class who contribute nothing. A perfect example of this was Elon buying twitter and firing 70% of the staff while keeping the lights on. And for most companies it didn't need to be that drastic, Twitter was one of the worst adult day cares in the entire industry.

But Silicon Valley by this time was run by idiots. Like truly stupid people. You'll see some of the usual suspects on here (*cough* Jason Calacanis.) There were some incredibly smart people too, the Marc Andreesens, the Palmer Luckeys, the Elon Musks, but they were few and far between.

So stupid people do stupid things. They kept the adult day care, kept the HR bureaucracy, and instead decided we'll just replace these expensive Americans (mostly White guys) who are keeping the lights on with indians halfway across the world. We'll get the Americans to train their replacements and we'll keep one or two to manage the team out of india.

This strategy took off like wildfire. Everyone needed to cut headcount, by this point you had a lot of major Silicon Valley companies who had transitioned their leadership away from the original founders to indian strivers who were more than happy to fire Americans en masse and hire as many co-ethnics as they could. H1B, india office, remote off-shoring, it was all on the table.

The result? The largest single case of mass immigration fraud and selling out of the American worker since the hollowing out of our manufacturing base. Which happens to be the perfect analogy because what I've coined the great tech replacement is our generations version of the factory in Detroit you relied on to put on the table being shipped off to China.

So unless the Trump admin wakes up and takes drastic action to block the off-shoring epidemic we're going to have an incredible amount of pain in the next few years. This problem will only get worse and it will be targeted at our best and brightest people. The future of our country will fail to launch unless something is done.


I could see a "wage tariff" type of law put in place that adds some kind of tax/cost to whatever you're paying someone to perform mental labour overseas, i.e you pay your indian accountant to do your books $10/hour but a 20% tariff means you must pay the government $2 per hour to do it.

I saw the first rumblings of this phenomenon before covid (mrs over9k is an accountant and their firm sends all the grunt work off to a firm in india and they then do the higher skilled stuff here once they get the grunt-work-completed files back from them) and alarm bells went off for me then.

Fact is if your job can be done by you from home it can be done by someone else in india or wherever.

Trash piece. Stopped reading once it tried to somehow blame Silicon valley's downfall on Indian immigration as if nepotism and corruption were somehow imported? Please. AI is 2020's snake oil.

The only person to blame here is Trump. Only an idiot would have thought there'd be no blow-back from implementing tariffs on the rest of the world. Only an entitled idiot would have thought that these tariffs were necessary because the literal owner of the global monetary system i.e. America, was somehow being unfairly treated.

 

[The Triangle]

Trash piece. Stopped reading once it tried to somehow blame Silicon valley's downfall on Indian immigration as if nepotism and corruption were somehow imported? Please. AI is 2020's snake oil.

The only person to blame here is Trump. Only an idiot would have thought there'd be no blow-back from implementing tariffs on the rest of the world. Only an entitled idiot would have thought that these tariffs were necessary because the literal owner of the global monetary system i.e. America, was somehow being unfairly treated.

Wait... What are we blaming on trump? (other than neo Nazis and the fall of democracy) white collar jobs outsourced to SE Asia + India has been going on for 15 years. Call centres for 25?

What do tariffs have to do with white collar jobs? I don't understand the twitter post or the point being made connecting the issues.

All I read is that trump and all political parties ignore outsourced white collar jobs but focus on outsourced blue collar jobs. My opinion on why... is that blue-collar jobs get lost in big blocks... Destroy a whole business and towns... White collar job loss is small and selective in mega metropolitan areas.

It's not indians at faultits the greedy drug addict whites who enable all of this.

 

[over9k]

All I read is that trump and all political parties ignore outsourced white collar jobs but focus on outsourced blue collar jobs.

This. This was the point.

 

[finicky]

Who does this future provider of goods and services to society vote for? Maybe she'll (they'll) write for @basilio's Politico, Wapo or NYT and he can reproduce 'their' thoughts on ASF. 'Them' the ramparts!

 

[Smurf1976]

All I read is that trump and all political parties ignore outsourced white collar jobs but focus on outsourced blue collar jobs. My opinion on why... is that blue-collar jobs get lost in big blocks... Destroy a whole business and towns... White collar job loss is small and selective in mega metropolitan areas.

There’s another major reason.

Manufacturing is strategically and economically important at the macro level.

White collar work in cities “it varies”. Some of it’s important, some of it nobody would miss if it stopped being done.

Talking about jobs is just a politically convenient approach but the West needs the factories back regardless. Not least because it’s damn hard to maintain technical and scientific competency just sitting in an office, it needs real world application at scale.

 

[farmerge]

There’s another major reason.

Manufacturing is strategically and economically important at the macro level.

White collar work in cities “it varies”. Some of it’s important, some of it nobody would miss if it stopped being done.

Talking about jobs is just a politically convenient approach but the West needs the factories back regardless. Not least because it’s damn hard to maintain technical and scientific competency just sitting in an office, it needs real world application at scale.

The horse has certainly bolted but the stable door is ajar ever slightly.

 

[Smurf1976]

The horse has certainly bolted but the stable door is ajar ever slightly.

The way I see it at the macro level is this is a battle for leadership. That is, it's a battle as to whether the US remains at "great power" versus whether it becomes just another country in someone else's empire akin to the way Britain has gone.

Key economic themes that'll determine the outcome:

Trade balance.

Government budget deficit / surplus.

Energy both in terms of physical supply and price.

Technological leadership both design and ability to implement on shore.

Access to natural resources both with the supply of raw minerals and the ability to refine them to usable form.

That's ultimately what Trump is trying to pull off in my view. Whether he succeeds or not, that's what I perceive he's trying to do. It's that or bust basically, there's no alternative.

 

[qldfrog]

Who does this future provider of goods and services to society vote for? Maybe she'll (they'll) write for @basilio's Politico, Wapo or NYT and he can reproduce 'their' thoughts on ASF. 'Them' the ramparts!

I'd like to laugh but thus is way past laughing matter when it actually destroys and kills our society

 

[Craton]

Some may say we live in interesting times, others may qualify that and say we're living in scary, troubling and very uncertain times.

From Alan Kohler and in the article, the following to me, it's straight out of the Project 2025 playbook: "I have the right to do anything I want to do. I'm the President of the United States."
Yeah, and all without due process and scant regard for all or any laws, federal or state huh... sigh.

I've underlined the following in the article as this alone is one big impact, across all fronts globally:
If they were watching the world, they would see a highly focused, carefully planned and very significant change in the way government is carried out in the United States.

Donald Trump is taking over the US Federal Reserve and financial markets have missed the point​

Financial markets are missing the point about Donald Trump's takeover of the Federal Reserve.

It's not really about getting interest rates down or even just about the Fed. America is in the midst of an authoritarian revolution with global implications, especially for dependent allies like Australia.
Last week, Trump announced that he was removing Lisa Cook, who is one of the seven governors of the US central bank, the Federal Reserve. The reason: "for cause", based on an unproven allegation of fraud in mortgage applications while she was a professor.
Markets did not freak out, surprising analysts everywhere, even after Trump followed up by telling a televised cabinet meeting that: "We'll have a majority [on the FOMC — the Fed's Federal Open Market Committee] very shortly. Once we have a majority, housing is going to swing, and it's going to be great. People are paying too high an interest rate."

But it's not about housing, which is already too pricey, or the interest rate, about which Trump has been badgering and insulting Fed chairman Jerome Powell for months. It's another step, albeit a big one, in America's slide into authoritarianism and the Trump/MAGA regime's takeover of every aspect of government.

Most mortgages in the US are on a 30-year fixed rate and are set according to the market rate of longer-term government securities, not what the central bank does to the cash rate, as in Australia.

Also, almost everyone switched to a new 30-year mortgage in 2020-21 when rates were super low and they won't rollover until 2050.

The announcement about Lisa Cook came after Trump had said: "I have the right to do anything I want to do. I'm the President of the United States."

Trump's statement needed more attention​

It was a statement that did not get the attention it deserved.

A week earlier, Trump announced that National Guard troops would be deployed in Washington DC to quell a fabricated crime wave, before flying to Alaska for a red-carpet welcome onto American soil of Russian President Vladimir Putin, applauding him as he approached.

Then last week he announced that the US government would take — for free — a 10 per cent stake in Intel Corporation, instructed restaurant chain Cracker Barrel to abandon its new logo, mandated that federal architecture must be "beautiful again", played a round of golf with former New York Yankees pitcher and accused drug cheat Roger Clemens before demanding that he be admitted into the Baseball Hall of Fame and then announced that he had sacked Lisa Cook.

Obviously, the last of those was the most consequential, although nationalising a 10th of a big company is a weird sort of capitalism.

Markets were untroubled. Why?​

The fact that markets were untroubled by an attempted political takeover of monetary policy is probably explained by a few things:

• Markets like it when interest rates come down, until the economy gets hit by higher inflation and has to have a recession;
• They're obsessed with AI, helped by AI chip maker Nvidia last week reporting a $39.8 billion ($US26 billion) quarterly profit, one of the biggest by any company in history;
• Lisa Cook is challenging her sacking in court so there is some way to go with that;
• Trump won't actually have a majority on the FOMC, which sets interest rates, only on the Fed's seven-person board of governors.

The FOMC has 12 members: the seven Fed governors, the president of the New York Federal Reserve Bank, and four of the 12 other regional Federal Reserve Banks rotating through 12-month terms.

If Trump succeeds in getting rid of Cook, he'll have appointed four of the seven governors, which will become five next May when chairman Jerome Powell's term ends.
The regional Fed presidents serve concurrent five-year terms, with the next big switch due at the end of February 2026 when they all must be renewed or replaced.

Trump does not get to appoint them — they are chosen by the directors of each regional Fed — but they do have to be approved by the main Fed's board of governors, so if Trump controls that he could keep knocking them back till he gets those he likes.

But that's all a way off, at least six months, which is a long time in the markets these days, and their habit is to remain optimistic until the last possible moment.

Market traders are watching each other, not the world, or as JM Keynes put it, what matters for investors is understanding the average opinion of the average opinion.

If they were watching the world, they would see a highly focused, carefully planned and very significant change in the way government is carried out in the United States.

A strategy to remove independence​

The animating idea behind Project 2025, which contained the blueprint for the second Trump presidency, is called Unitary Executive Theory, which is based on the proposition that the president should have complete executive authority over every part of the federal government.

That means eliminating the customary independence of any government institutions, such as the Department of Justice, FBI, the Bureau of Labor Statistics and the Federal Reserve and bringing them under the direct control of the president.

It's based on what's called the Executive Vesting Clause, which is Article II, Section 1, Clause 1 of the constitution, which says simply: "The executive Power shall be vested in a President of the United States of America."

Article I gives legislative power to Congress and Article III vests judicial power in the courts, specifically the Supreme Court, and "such inferior Courts as the Congress may from time to time ordain and establish".

The Trump/MAGA regime has made no secret of its belief that Article II should be taken literally and that all executive power should be vested in the president and his cabinet and staff.

Also note that no government institution, including the Federal Reserve, has legislative independence from the White House.

In line with that, Trump's sacking of several normally independent commissioners has been supported by the Supreme Court, up-ending long-standing practice.

"Now it's the Fed's turn and given its revered independence from the caprices of politics — along with that of most other central banks, including Australia's — it is a Rubicon once crossed there will be no part of the government not under the president's direct day-to-day control."
Democrats, other Trump opponents and most economists decry all this, but it does seem, at least on the surface, to be what the drafters of the constitution had in mind — as long as there are meaningful checks and balances from Congress and the Supreme Court.

It's not just the Fed​

The trouble is Trump has also stacked the Supreme Court and is ignoring or bypassing Congress, which was not anticipated back in 1787 when the constitution was signed.

He is now working on gerrymanders around the country, starting in Texas, to ensure that Republicans are more likely to be elected.

Trump did assure Americans before the election last year that it would be the last one that they'd have to worry about, that there wouldn't be any more elections, but still — it's hard to imagine the United States becoming a fully fledged autocracy.

There will be more elections, so perhaps a more realistic concern for voters is that future presidents might be reluctant to give up the unitary executive power that Donald Trump has bestowed on them.

Political scientists call that "competitive authoritarianism", in which autocrats take turns to rule and plunder.

That may be what the US is heading for unless a future administration and Congress undo Trumpism.

Alan Kohler is finance presenter and columnist on ABC News, and he also writes for Intelligent Investor.

 

[rolly1]

I'd like to laugh but thus is way past laughing matter when it actually destroys and kills our society

I'll laugh for you Frog

 

[finicky]

@Craton

You weren't "scared and troubled" when Joe was selling influence to China and Kamala the Moron was next in line as supreme chief of the armed forces? The judges and the fed director he is replacing, if possible, are Obama/Biden appointees - they are politically obstructive to the current administration and the fed director has allegedly committed a financial felony.

Alan Kohler is a superficial 'their ABC' hack. Obesely bursting the buttons on his business suit and tweeting Bob Dylan lyrics to sound cool and not a middle-aged frump, lol

 

[Craton]

@Craton

You weren't "scared and troubled"

I was scared and troubled when the MAD threat was imminent and hence, joined the anti-nuke protests on the streets of Sydney in the '80s.

when Joe was selling influence to China

Me thinks that all started long before old Joe was POTUS.

and Kamala the Moron was next in line as supreme chief of the armed forces?

LOL and JD Vance isn't a moron?

The judges and the fed director he is replacing, if possible, are Obama/Biden appointees - they are politically obstructive to the current administration

Ow whoa is me

and the fed director has allegedly committed a financial felony.

Oh, so DJT didn't commit any financially fraudulent activities?

Alan Kohler is a superficial 'their ABC' hack. Obesely bursting the buttons on his business suit and tweeting Bob Dylan lyrics to sound cool and not a middle-aged frump, lol

Ah that old tactic eh. Attacking the man not the ball.

Regardless, whether we agree or not, we all have an opinion and points of view. Reading/listening to left, right or the centre wings is a must.

 

[Antirnator]

Nope JD Vance is not a moron. And if you think he is then you have a serious case of ignorance.

 

[Craton]

Nope JD Vance is not a moron. And if you think he is then you have a serious case of ignorance.

Lol... nah, you're right. He's a "POG".

 

[Dona Ferentes]

..
when did Trump get in? end- 2024?

 

[qldfrog]

obNope JD Vance is not a moron. And if you think he is then you have a serious case of ignorance.

definitely far from a moron indeed

 

[qldfrog]

Lol... nah, you're right. He's a "POG".

read his book maybe....
or his recent speech to the Europeans?

 

[Smurf1976]

Key economic themes that'll determine the outcome:

Two other things that come to mind:

They're going to inflate no matter who the president is. Any difference will just be in the detail and what's said about it. The debt's so large there isn't really any alternative.

Aiming to be as neutral as possible politically, comparing now with ~50 years ago one of the big mega trends has been a shift from production to allocation. The focus has shifted from making a bigger pie to arguing over how to cut it and that manifests in all sorts of ways. The normalisation of taking legal action over relatively trivial matters, the corporate focus on the short term share price rather than on the underlying business, the financialization of pretty much everything, the educational arms race, offshoring, the rise of welfare and so on. All are about someone trying to grab a bigger slice, they're not about creating a bigger pie.

If I'm reading the tea leaves correctly, we're seeing at least a partial shift away from that second point. Trump wants physical production to go up far more than he wants the stock price to go up, seeing finance as a means of enabling production not the reverse.

If that's the case then that doesn't kill the stock market but it does mean stock selection becomes more important. Some companies should do better from that change than others, it's not a rising tide lifting all boats situation.

Just my