Forecasts from both JP Morgan and Goldman Sachs say a recession over the next year has become more likely because of Mr. Trump’s tariffs.
Pimco says his tariffs have raised the probability of a U.S. recession to around 35%.
Delta’s lowered outlook shows economic uncertainty unfolding `in real time,’ says Bank of America. Ditto for American Airlines.
Capital markets are frozen worldwide as investors and lenders contemplate an uncertain future.
This is not the way it was meant to be:
In a October campaign rally, Trump said “We will begin a new era of soaring incomes,” … “Skyrocketing wealth. Millions and millions of new jobs and a booming middle class. We are going to boom like we’ve never boomed.”
Recently, Trump appears to be lowering our expectations. In an interview that aired Sunday on Fox News, Mr. Trump demurred when asked by Maria Bartiromo if he expected a recession this year.
“I hate to predict things like that,” he said. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”
Meanwhile stock prices are tanking.
What do you do?
Cash is King. Warren Buffett has moved heavily into cash.
I’ve also sold many of my stocks — especially the ones I felt uncomfortable holding. I also sold Tesla short. I now have sizeable cash.
I also recognize that long-term markets do recover and rise. So I’ve held Nvidia and the other Magnificent Seven.
I am buoyed by this clip:
In short, go to cash for your next two year’s living expenses.
Hold your favorite stocks as you await the bottom — which may come before the recession. Fingers crossed.
Wonderful story
Latest travel tips (from my quick one-week trip to Australia)
+ Eat as little as possible. You’ll feel better. Trust me. Taste everything. Consume little. (Latest motto.)
+ Don’t eat ice cream. Too much sugar. Too heavy on the tummy.
+ Falling is a huge problem. On stairs. On uneven paths. Getting up from a table. Go careful.
+ Never hoist your own bag into the overhead bin. That’s why God invented young strapping boys. They’ll always help if you ask.
+ You can take an Eagle Creek 25 inch roller bag on board. It’s “illegal.” But I do.
+ Variations in business class ticket prices among the airlines will blow you away. Different days are significant. Buying long in advance can rack up major differences.
+ Always have dinner, lunch or brunch in the airport lounge or airport resteraunt. It will always be better than what you get on the plane — even in first.
+ Don’t expect to be able to get on the Internet from a plane. Maybe it works. Maybe (mostly) it doesn’t. Hint: Try paying with PayPal. It works better than paying directly with your credit card. Why? Nobody knows.
+ You can watch YouTubeTV from most places in the world. Use a VPN. I like Mulvad.
+ Airplane power sockets are worn. Your power supply always falls out. This is a good idea:
Get it am Amazon here.
Hard to see how Australia is ripping us off
In 2024, Australian total goods imported from the U.S. were $34.6 billion,
In 2024 total goods exported to the U.S. were $16.7 billion,
That means that the U.S sold Australia$17.9 billion more than it bought from Australia.
Australia exported $640 million worth of steel and $440 million of aluminum last year to the United States.
On Tuesday the White House announced that 25% tariffs on all imported steel and aluminum products into the U.S. from all countries would take effect on Wednesday. That includes Australia. No exemptions (like in the first Trump presidency.)
The tariffs are causing Australian stocks to tank. Virtually everyone in Australia owns stocks as a result of annual 12% mandated retirement benefits.
Australia is probably America’s best friend, having fought alongside America in every War, including Vietnam.
It’s hard to figure what Trump is doing.
Don’t forget to sign up for Jensen next week
Fun thoughts
I’ve spent much time researching the history of Tariff Trade Wars. I can’t find anything positive to say. Many of the experts interviewed on financial TV are using words like “insane.” Even people who think there is “logic,” are saying the whole thing could be handled a lot better.
For now, the playbook is “The Art of Dealing with Uncertainty.”
My stocks are listed on the website.
See you very soon. — Harry Newton
