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Authored by J.B.Shurk via AmericanThinker.com,

Canada’s Liberal Party selected central banker Mark Carney to lead the country as prime minister.  

He only recently became a politician, but already he’s sitting at the head of the class!  No worries, though.  He has the kind of résumé all globalists in good standing with Klaus Schwab’s World Economic Forum would envy.  He ran not only the Bank of Canada, but also the Bank of England.  He’s a central banker extraordinaire!  He loves printing funny money and manipulating markets.  Artificially created inflation is his jam, man!

Carney is the most recent iteration of the World Economic Forum’s standard operating procedure for captured governments (and Canada is most definitely WEF-captured): Whenever possible, put bankers in charge of those pesky territorial designations nostalgically known as nation-states.  France’s petit fromage, Emmanuel Macron, was a Rothschild & Co. investment banker.  Former U.K. prime minister Rishi Sunak was a Goldman Sachs and hedge fund guy.  Don’t be surprised when more transnational bankers seemingly come out of nowhere and immediately dominate the politics of other pseudo-sovereign countries.  Investment banking — and more specifically, central banking — is the lifeblood of globalism.  Why?  Because once a bank is big enough, it gambles with the futures of entire nations (and the millions of individual lives therein) as if they were mere poker chips.

So the globalist cabal claims another section of the world map!  Or retains its claim over Canada, I should say.  Everyone knows that soy-boy Justin Castreau (he cried during his farewell press conference, for Pete’s sake!) and his former deputy prime minister, Chrystia Freeland, call Herr Schwab “Daddy.”  Germany’s Dr. Evil makes a natural father figure for both Canucks.

Kooky Chrystia is that crazy-eyed woke-tard who promised to use nuclear weapons against the United States if President Trump imposes reciprocal tariffs and turns off the American money spigots that have long subsidized Canada’s socialist system.  She is a Canadian Karen not likely to go away.  I’m sure Daddy Klaus will give her another chance to scream, “I am womyn, hear me roar!” after central banker Mark Carney completes Canada’s transition to a “green energy”–reliant vassal state of the international money-printing guild.  When the draft dodgers, hippies, and Chinadians up north have gorged on enough of Carney’s WEF-style globalism for Reichsführer Schwab to deem the peasants sufficiently subjugated, he can install Chrystia as prime minister without any resistance.  Once in place and empowered to finish off what’s left of Trudeau and Carney’s castrated Canada, she will probably rename her censorship-loving slave state “Not-so-Freeland-ia” in honor of her favorite grandpa’s fascist proclivities.  

No wonder President Trump remains worried about the U.S.-Canada border.  King Charles III’s North American refuge has become a hornet’s nest of globalists, communists, and woke Nazis.  Perhaps after the southern wall is finished, the builders should hightail it up to the 49th parallel and get busy.  Forget the “global warming” malarkey.  A WEF-engineered winter is most definitely coming.

Of course, Canada is but one territory being pursued in the globalists’ board game of central bank Risk.  The WEF-ers are rolling the dice and capturing lands all over the planet.  

For three years, the United Kingdom, the European Union, and America’s very own CIA have all been yelling, “Ukraine!  Ukraine!  Ukraine!”  Hoity-toity Davos dandies demand in unison that non-Ukrainians die for the sacred honor of a country known for its vicious gangsters.  Given the Western euphoria for the place that spawned the noxious Tweedle-Vindmans, a naïve observer would erroneously assume that Ukraine must be a bastion of civic virtue and human rights — and not a nation that has outlawed opposition parties, free speech, dissent, religious freedom, and democratic elections.  How jolting it must be for the uninitiated to discover that Volodymyr Zelensky’s fiefdom is not renowned for its “democratic” norms, but is instead considered one of the most irredeemably corrupt crime dens in all of Europe.  If you’ve ever found yourself near any of Europe’s other troubled conflict zones, you know that a reputation for being the continent’s premier destination for depravity is not an easy distinction to claim.  Ukraine had to work hard for its deserved notoriety. 

No matter.  Klaus Schwab’s globalists are good at rebranding.  

When money-printing central bankers fund USAID, and USAID pays Western journalists to run stories about the glorious nobility of Ukraine’s system of government, then the less informed among us eventually start spouting the same thing: Ukraine good.  Russia bad.  We make nuclear war now?  It’s not our fault that we humans can be programmed so easily.  We are biologically wired to trust people in positions of authority.

Here’s the problem: When all the people in positions of authority are either money-printing central bankers or propaganda-spewing espionage chiefs, then the people who die in wars (both soldiers and civilians) do so at the behest of thieves and liars.  Families should not sacrifice their children based on the promises of money-launderers and spies. 

For the jet-set crowd of Davos elites, preserving other people’s freedom is of no concern.  Creating debt slaves is good for their respective family businesses; liberating serfs so that the riffraff can express their low-class opinions is not.  Does anybody believe that the same European countries that regularly censor their own citizens and prevent unapproved political parties from holding power would have any interest in safeguarding the liberties of poor Ukrainians?  European elites (and American warmongers) see Ukrainians as cannon-fodder — which is why they say nothing as Zelensky’s goons abduct men off the street, press-gang them into service, and condemn them to be ripped to shreds.  

War is first and foremost about making money and expanding power.  Elites treat it like a “game” because they risk nothing.  Regular people pray for it to end because they risk everything.  

If the WEF-ers can’t prolong the War in Ukraine long enough to win back some valuable Black Sea coastline, they’ll just stir up trouble in one of the neighboring nations.  Take a look at the board game’s map.  Besides Russia, Ukraine, and Turkey, the region includes Moldova, Romania, Bulgaria, Greece, Armenia, and Georgia.  That’s strange.  Every country either on or near the Black Sea has recently experienced a spate of domestic conflicts, political rebellions, or outright civil wars.  In Romania, globalists not only annulled last year’s presidential election when the “wrong” candidate won, but also threw the winning candidate off this year’s ballot to prevent his repeat victory — all in the name of “protecting democracy”!  

Is there something toxic in the rivers draining into the Black Sea?  Or could it be that the West’s one-world-government zealots and intelligence agents/saboteurs are desperate to maintain influence over territories that could limit Russia’s strategic control of Black Sea trade routes and close off Russia’s access to the wider Mediterranean Sea?  

Perhaps disassembling Russia into a dozen separate WEF-conducive nations first requires WEF-enthusiasts to isolate Russia from half the world.  If they can avoid paying for the mess themselves by tricking the United States into sacrificing Americans in an unnecessary third world war, then all the better.  As they like to ask in Klaus Schwab’s neck of the woods, why fight the Russians or the Americans when you can get them to fight each other?  Cannon fodder does not discriminate by nationality.

If Western-style “democracy” means that central bankers control domestic policy, stifle dissent, and decide when war is “profitable,” then perhaps citizens should start asking who the hell put them in charge.  It certainly wasn’t the people.

It feels like every 3 months China comes up with another zany plan to boost the economy and kickstart consumption, which spikes stocks for a few days, but promptly goes nowhere, is quickly forgotten… only to be replaced with another zany plan 3 months later, and so on.

Today was no exception to this laughable cadence – which has achieved absolutely nothing but unleash core deflation in China for the first time since 2021 – and in a Sunday statement by Beijing State Council we learned that China will take steps to revive consumption by boosting people’s incomes, the official Xinhua News Agency reported.

Other just as vague measures include “stabilizing the stock and real estate markets, and offering incentives to raise the country’s birth rate, as the government tries to ease the deflationary pressures afflicting the economy.”

Of course, we have heard all of these over and over and over, and nothing at all has changed in the past 4 years. So we kinda doubt that anyone will care this time, but we are confident that HFT and various algos who have the memory of a goldfish will push Chinese stocks higher for at least a few days before the sellers inevitably take the upper hand again.

According to Xinhua, Beijing will promote “reasonable growth” in wages and establish a sound mechanism for adjusting the minimum wage. It will also look at setting up a childcare subsidy system, as well as strengthening how investment can support consumption. 

Other highlights of the plan include:

• Enlarge variety of bond-related products suitable for individual investors
• Adopt multiple measures to promote increase in farm incomes
• Raise financial help for some students
• Appropriately increase the basic pension for retirees
• Ensure timely and full distribution of unemployment benefits
• Support tourist attractions in expanding services and the reasonable extension of business hours
• Support opening of duty-free shops in cities where conditions permit
• Boost support for trade-in programs
• Lower the interest rate on housing provident fund loans at an appropriate time
• Scale back restrictions on consumption in an orderly manner
• Accelerate the development of new technologies and products such as smart wearables and autonomous driving

More details are available here, but they may well be moot: after all, invigorating consumption has been a challenge for the government since the end of the pandemic and everything Beijing has thrown at the problem has sunk into a seemingly unquenchable deflationary vortex. Retail sales have been anemic while consumer prices fell into deflation in February for the first time in over a year, although the latest macroeconomic dump suggests that things may be turning after all key data printed just slightly better than expected:

• *CHINA JAN.-FEB. RETAIL SALES RISE 4% Y/Y; EST. 3.8%
• *CHINA JAN.-FEB. FIXED INVESTMENT RISES 4.1% Y/Y; EST. 3.2%
• *CHINA JAN.-FEB. INDUSTRIAL OUTPUT RISES 5.9% Y/Y; EST. 5.3%

At annual parliamentary meetings this month, the country’s leadership made boosting consumption their top priority for the first time since President Xi Jinping came to power over a decade ago.

Ahead of the announcement, Chinese stocks rallied the most in two months on Friday after the State Council, China’s cabinet, announced that officials from the finance ministry, the central bank and other government departments plan to hold a press conference Monday on measures to boost consumption.

In a series of posts on X, China watcher Michael Pettis shared his skeptical view on the latest events in China, explaining why so far all attempts to kickstart the economy have failed. 

He starts by observing the above – namely that the government and Communist Party issued a lengthy list of planned initiatives on Sunday to get people to spend more, including larger pensions, better medical benefits and higher wages, but they “assigned many of these tasks to the country’s local governments, many of which are struggling under enormous debts and plummeting revenues from the sale of state land.”

This, according to Pettis, is the problem with every attempt to boost the consumption share of GDP.

He then notes that the sustainable way to boost consumption is to increase the share of GDP retained by households. But increasing their share requires explicit or implicit transfers from either businesses or government. If the household share rises, after all, someone else’s share must decline.

And while Beijing wants local governments to absorb said transfers, given their precarious cashflow positions, for now they can do so mainly by placing new burdens on households or businesses, e.g. through taxes, layoffs, fees, or cutbacks on existing services.

As a result, the net impact on households is reduced, and the remaining costs are absorbed by businesses. The former doesn’t help boost consumption, and the latter, by indirectly forcing businesses to absorb the costs, is bad for the economy.

The only other way to do so involves forcing local governments either to transfer to households a large part of the substantial assets they control, or to liquidate those assets in order directly or indirectly pay for higher household income.

The problem, according to Pettis, is that this implies a radical transformation of the relationship between Beijing and local governments and between local governments and the households and businesses in their jurisdiction, and given the sheer extent of the needed transfers, it will be very difficult.

This is why, for all the years of posturing and promising to boost consumption, it has been impossible for China to make much progress to reboot the economy. Since Beijing has to raise the household share of GDP by 10% at the very least, that means an equivalent reduction of someone else’s share.

Pettis also notes that many analysts insist that China will choose to avoid rebalancing altogether, but they miss the point. These levels of imbalance simply cannot be sustained if neither China nor the rest of the world can absorb the growing gap between consumption and production.

At the end of the day, China will rebalance one way or another. The important question is how it rebalances: whether an increase in the household share of GDP will occur in the form of a debt crisis and a sharp contraction in GDP, as occurred in the US in the early 1930s… or through many years of stable consumption growth and much lower GDP growth, as occurred in Japan after 1990, or of a surge in consumption that keeps GDP growth stable (which would be historically unprecedented).

These are arithmetically the only three ways to rebalance. And since all are extremely painful, either acutely now or chronically over the long-term, no surprise then that Beijing just keeps pretending it will do something while merely kicking the can until it is finally one day forced to do something.

Authored by Don McGregor via RealClearDefense,

A Pragmatic Approach to Protecting U.S. Security Interests

Introduction

Since the 9/11 attacks, the United States has been mired in “forever wars”—prolonged conflicts with no clear victory, draining trillions of dollars, thousands of lives, and economic vitality. A 2023 Pew poll shows 54% of Americans favor reducing overseas military commitments, with 83% prioritizing domestic needs—a clear call for change.

The U.S. can no longer afford years of military overreach. A pragmatic strategy emphasizing diplomacy, allied burden-sharing, and strategic restraint is essential to protect national interests without exhausting finite resources.

The Overwhelming Cost of War

The post-9/11 wars have exacted a staggering toll. Brown University’s Costs of War Project estimates the U.S. has spent $8 trillion—38% of 2020’s GDP—on conflicts in Iraq, Afghanistan, Pakistan, and Syria, equating to $24,000 per citizen.

Future interest on this debt could add $2.2 trillion to the national debt by 2050, burdening future generations. Human losses are equally dire: 7,000 service members and 8,000 contractors killed, 55,000 injured, and 940,000 total deaths from direct violence, with 3.6 million more dying indirectly in war zones.

Beyond numbers, the mental health crisis is profound. Veterans and active-duty personnel from these conflicts have died by suicide at four times the rate of combat losses—over 28,000 since 2001, according to 2022 VA data – mainly driven by post-traumatic stress disorder and repeated deployments.

Adding to the exhausting cost of conflict, caring for these veterans will cost $2.2-$2.5 trillion by 2050. These financial and human costs prove the wars’ unsustainability; constrained resources and public concerns require the U.S. to reassess its global security approach.

Rethinking Overseas Commitments

The U.S. maintains 750 military facilities across 80 countries, per a 2021 International Institute of Strategic Studies, at an annual cost of $80 billion—$55 billion for bases alone. The Quincy Institute reports that 91% of post-9/11 operations relied on these bases. Yet, they’ve often fueled instability—think of the disorder stemming from Iraq’s insurgency or Afghanistan’s collapse—rather than the security they were supposed to provide. This sprawling footprint, born of Cold War logic, no longer aligns with today’s fiscal environment, demanding a leaner, more practical approach.

A Pragmatic Path Forward

Some argue that overseas military bases help deter terrorism, but the evidence suggests otherwise. According to the Cato Institute (2023), the probability of dying in a U.S. terrorist attack is just 1 in 150 million.

Since 9/11, America has experienced nine terrorist attacks, resulting in a total of 44 deaths. In contrast, during the same period, the U.S. military suffered over 7,000 fatalities and 55,000 injuries in Iraq and Afghanistan, raising questions about the purpose of military operations overseas.

The cost alone is staggering. According to a Cato Institute report, a conservative baseline for total overseas basing costs is $80 billion annually, with some estimates reaching $100-$150 billion. This reflects differing indirect expenses, like troop support, highlighting the obscurity of overseas spending.

A 2023 RAND study also found that 30% of bases lack strategic purpose. A 25% reduction, focusing on outdated Cold War sites and unproductive Middle East efforts, would save $15 billion annually.

However, completely withdrawing is unwise; bases in Japan and Germany still deter Russia and China and allow forces to posture when needed. Closing outdated posts in stable regions—like parts of Europe or Asia—frees billions for pressing domestic defense needs.

The use of hard power has become overextended, yielding little success and eventually weighing heavily on the American public. A more effective strategy entails carefully reducing America’s overseas presence, reallocating resources, and reprioritizing homeland defense.

Strengthening Homeland Defense

President Trump’s campaign emphasized ending long-term military engagements, reducing overseas commitments, and reprioritizing defense strategies to enhance defending the homeland.

His 2025 executive order for an “Iron Dome” system reflects this shift, focusing on missile defense against nuclear and newer hypersonic weaponry from advancing adversaries. However, these initiatives currently face funding challenges.

The FY2024 defense budget ($850 billion) allocates $69 billion to overseas operations—defending allies—while just $29.8 billion (3.5%) boosts missile defense, unchanged since 2019.

Redirecting even half of that $69 billion could modernize defenses, aligning spending with existential risks over foreign entanglements.

However, missile defense is not the only way to protect the nation. It also demands attention to vulnerabilities closer to home, such as securing the borders—another pillar of homeland security.

Securing the Border

Border security, a neglected homeland priority, ties directly to resource reallocation. In FY2024, Customs and Border Protection (CBP) logged 3 million encounters at the southern border—up 400% from the 700,000 in the 2020s—costing an estimated $130 billion, challenging public safety and straining national security.

To help tackle this unprecedented challenge, President Trump’s recent executive orders, which declare a national emergency at the southern border and direct the military to support the Department of Homeland Security (DHS) in safeguarding the nation’s territorial integrity, highlight the priority of protecting the homeland.

DHS has also ramped up the activities of Immigration and Customs Enforcement (ICE), leading to a significant 627% increase in the detainment of criminal aliens since January. This surge has prompted DHS to request additional military assistance to aid the detainment process. As a result, more military troops are being deployed to support CBP along the border, and the military detention facility at Guantanamo Bay is being repurposed to accommodate the detention of criminal migrants.

While reallocating military resources from overseas commitments to border security can effectively address domestic threats without requiring additional spending, as illustrated by Secretary of Defense Hegseth’s recent decision to shift eight percent of the FY26 defense budget toward homeland priorities, this approach also highlights a more significant imbalance in U.S. defense spending.

Burden Sharing Security

Disproportionate global security commitments add to the problem, as the U.S. must push NATO allies to meet their 2% GDP defense spending target—America spent twice their combined total from 2014 to 2022.

Leading allies, like the United Kingdom and Germany, spend less as a share of Gross Domestic Product (GDP), with the U.S. shouldering a disproportionate burden of European defense. Additionally, the U.S. upholds numerous other global security agreements that extend well beyond Europe, such as the Pacific Deterrence Initiative—a U.S.-only defense investment and activity used to counter China that costs $10B annually.

The United States can no longer bear the burden of defending others. It must reassess its global security stance and agreements to ensure that costs are shared equitably. A balanced use of projecting power is needed to secure American influence abroad.

Balancing Power Projection

America’s decades-old philosophy of fighting its battles on someone else’s property remains vital to national security. A platform that can project US power quickly and support those efforts remains relevant.

Overseas “power projection platforms”—like overseas mobility bases and carriers in the Pacific—are necessary, enabling rapid response and sustainment to a crisis. However, basing that does not support projecting power should be reconsidered for closure. Trimming these frees funds for soft power—diplomacy and economic leverage—that achieves similar ends at a lower cost.

Harnessing Soft Power

Soft power—persuading through attraction, not force—offers a sustainable edge. Diplomacy can preempt conflicts that mimic hard power wins, such as the ceasefire that paused fighting in Sudan, allowing 150,000 to flee safely and aid to reach 500,000, per UNHCR reports.

Diplomacy can also secure trade deals, such as the 2020 U.S.-Japan Trade Agreement, which cut tariffs and secured U.S. farm exports to counter China’s trade dominance. Yet, while diplomacy can secure trade wins to help balance its trade, its effectiveness diminishes when multilateral agreements lead to persistent inequities.

For example, the Asian-Pacific Economic Cooperation (APEC), a multilateral trade agreement, incurred a deficit of $913 billion in 2024, a 12 percent increase ($97.7 billion) over 2023. Further, according to the Bureau of Economic Analysis, America’s total global goods and services deficit was $918.4 billion in 2024, up $133.5 billion from $784.9 billion in 2023.

This unsustainable trend indicates that the U.S. needs to rethink its negotiating approach in line with more equitable agreements that work directly with each partner, making adherence and fairness more manageable.

However, diplomacy and trade agreements alone cannot guarantee a nation’s security. Economic strength is vitally important and underwrites all its activities, making it essential to influence, leverage, and safeguard its interests.

Prioritizing Economic Security

The U.S. economy—$29 trillion in 2024, 25% of global wealth—thrives on energy, innovation, and resilience. For example, since 2019, an 8-quadrillion-BTU energy surplus has fueled energy exports, supporting Europe against Russia and countering Iran. Energy independence and growth are critical in maintaining America’s edge over rivals and securing its position as a preeminent global power.

However, the U.S. must address significant financial challenges, including its $34 trillion national debt and nearly $2 trillion budget deficit. While the U.S. currently has an economic advantage over China, purchasing power parity, or how much your currency can buy, shows that China leads by 23% and is growing. More concerning is that experts predict that China will surpass the total U.S. economy by 2040.

Remaining a global leader requires economic security and realigning priorities. Protecting against rising financial challenges and economic juggernauts like China means redirecting excessive global commitments to infrastructure and tech, not unproductive overseas commitments.

Conclusion

The post-9/11 wars have cost the United States $8 trillion, nearly a million lives directly and indirectly, and decades of overstretched resources—losses no nation can sustain indefinitely. To secure its interests, the U.S. must pivot from endless military entanglements to a strategy of calculated restraint: reducing outdated overseas commitments, redirecting funds to homeland defense and economic resilience, and leaning on diplomacy and allied cooperation to project influence.

This shift isn’t retreat—it’s recalibration. By prioritizing what strengthens the nation, from border security to soft power, America can safeguard its future without repeating its past mistakes.

Major General Don McGregor (USAF, ret.) is a combat veteran and an F-16 fighter pilot. While serving as a General Officer in the Pentagon, he was the National Guard Director of Strategy, Policy, Plans, and International Affairs, advising a four-star Joint Chiefs of Staff member.

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

Johns Hopkins University said on Thursday that it will lay off over 2,000 workers worldwide following the Trump administration’s termination of $800 million in federal funding for the institution.

The university, along with its affiliates, is the largest private employer in Maryland, contributing to more than 93,600 jobs in the fiscal year 2022, according to its previous economic impact report.

The layoffs involve 247 domestic U.S. workers for the academic institution and 1,975 positions outside the United States in 44 countries.

Johns Hopkins said the job cuts will impact its Bloomberg School of Public Health, its medical school, and an affiliated non-profit for international health, Jhpiego.

“This is a difficult day for our entire community,” the university said in a statement. “The termination of more than $800 million in USAID funding is now forcing us to wind down critical work here in Baltimore and internationally.”

Last week, hundreds of Johns Hopkins affiliates rallied near the Lincoln Memorial in Washington, D.C., to oppose cuts to research funding and resulting layoffs.

The university’s publication, Hub, stated that the Trump administration’s cuts to federal research funding would threaten more than 600 ongoing clinical trials conducted by Johns Hopkins, which were previously supported by the National Institutes of Health (NIH).

“The NIH is the only place that can fund science in the public interest because they don’t have shareholders,” Bloomberg professor Jack Iwashyna, who attended the rally, told Hub. Iwashyna was an NIH funding recipient to research pneumonia recovery.

Johns Hopkins University did not respond to a request for comment by publication time.

The developments at Johns Hopkins University come after the Trump administration canceled $400 million in grants and contracts for New York’s Columbia University due to allegations of anti-Semitism on campus. It stated on March 7 that the school holds about $5 billion in federal grant commitments, and the fund cancelation only marked “the first round of action,” with additional cancellations expected to follow.

The Trump administration is also investigating 60 American universities, including Hopkins, over anti-Semitism on campuses.

This also follows Trump’s announcement of a 90-day freeze on all foreign aid and development funding after taking office on Jan. 20, pending reviews to ensure the programs aligned with U.S. interests under his “America First” policy umbrella.

The Trump administration has suspended most USAID programs and placed its employees on administrative leave. Secretary of State Marco Rubio, who also serves as acting USAID administrator, stated on March 10 that about 83 percent of USAID contracts, or 5,200, have been canceled.

Rubio said the canceled contracts “did not serve (and in some cases harmed) the core national interests of the United States” but added that the government would retain the remaining 1,000 contracts under USAID.

Reuters and Katabella Roberts contributed to this report.

Two of Mexico’s most notorious former cartel leaders were arraigned in Washington DC on Friday on a range of federal charges that include drug trafficking, firearm possession and money laundering. Because the charges include engaging in a continuing criminal enterprise involving “multiple murder conspiracies,” they face the possibility of federal executions.  

Brothers Miguel Trevino Morales and Omar Trevino Morales — ages 52 and 48, respectively — are the former leaders of the Los Zetas cartel that once dominated Mexico’s northern region along the US frontier. Also known by aliases “Z-40” and “Z-42,” they allegedly led the cartel in succession from October 2012 until March 2015. Miguel’s term ended with his arrest by Mexican police in 2013, when Omar took over until he was similarly nabbed in 2015. Since that time, Los Zetas has faded relative to the Sinaloa and Jalisco New Generation cartels. 

“The defendants represent some of the world’s most vicious cartel leaders, who oversaw Los Zetas’ reign of terror with grotesque impunity and ruthlessness, and a sheer disregard for anything beyond their wealth, power and control,” said Acting Special Agent in Charge Michael Alfonso of New York’s ICE Homeland Security Investigations. 

The Morales brothers are among 29 cartel drug lords extradited to the United States by Mexico in February. “The defendants taken into US custody today include leaders and managers of drug cartels recently designated as Foreign Terrorist Organizations and Specially Designated Global Terrorists,” the DOJ said at the time. 

“The Criminal Division is dedicated to achieving the Attorney General’s goal of the total elimination of cartels,” said Supervisory Official Matthew R. Galeotti. “As alleged, former Zetas cartel leaders Z-40 and Z-42 engaged in conspiracies to kill members of the Mexican government, Mexican citizens, members of rival cartels, members of the Guatemalan government, and Guatemalan drug traffickers.” 

The Zetas were founded by deserters from Mexico’s elite special forces, and had a reputation for fearsome brutality, to include decapitations and hanging corpses from highway overpasses. They were also blamed for killing 52 people via an arson attack on a Monterrey casino, and torturing and murdering 72 Central American migrants who resisted the Zeta’s demands that they become drug mules.  

The US government’s request for the duo’s extradition predates the current Trump administration. Their February transfer came after the State Department announced it had designated eight Latin American drug cartels as foreign terrorist organizations. That move prompted Mexican President Claudia Sheinbaum to warn the White House against taking unilateral military action inside her country. 

Earlier, Sheinbaum said she had approved US surveillance drone flights over Mexico. That claim came after CNN reported that the administration tapped the CIA to use unarmed MQ-9 drones to monitor the cartels. The secret missions were communicated to members of Congress, with the description of the undertaking making no mention of a partnership with the Mexican government.

Earlier today, Morgan Stanley’s Mike Wilson described several of the factors behind the recent market swoon (the 10% drop in 20 days was the 5th fastest ever correction in history; for context the fastest ever was 8 days during the onset of Covid on February 27, 2020), and besides the various fundamental causes, the strategist said that “perhaps more than anything else” what led to the most recent technical breakdown in the S&P 500 was “Trump recently indicating that he is not focused on the stock market in the near term as a barometer of his policies and agenda.” One could go further: and in fact, we did go further last week when we asked if Trump is actively seeking to push the US into a recession (one which he would correctly blame on Biden for reasons described in this post), just that by the time the US economy is once again firing on all cylinders and the market at all time highs, will be just in time for the mid-term elections in 2026.

Well, if Trump’s “let them eat stocks” attitude indeed was the biggest driver behind the recent selloff, then Friday’s furious rally may prove to be very short-lived, because speaking on Sunday’s episode of Meet the Press, Treasury Secretary Scott Bessent, a former hedge fund manager, not only said he’s not worried about the recent market downturn, but added that “there are no guarantees” there won’t be a US recession. In other words, the Trump put remains as nebulous as ever, and meanwhile statements like this one from Howard Lutnick that “the Donald Trump economy” would really start taking off “in the fourth quarter” suggest that pretty much anything goes in Q1, Q2 and Q3…. and whatever does happen will be blamed on Biden. 

“I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy, they are normal,” Bessent said on NBC’s Meet The Press. And what he said next is absolutely spot on and something Biden’s puppetmaster should have been made aware of when they were juicing the economy with $1 trillion in debt every 100 days:

“What’s not healthy is straight up, that you get these euphoric markets. That’s how you get a financial crisis. It would have been much healthier if someone had put the brakes on in ‘06, ‘07. We wouldn’t have had the problems in ‘08. So, I’m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great.”

Bessent’s comments come at amid investor concerns about the economic effects of the Trump administration’s moves around tariffs, immigration and cuts to the federal government, which wiped out trillions in market cap from the S&P 500 and pushed the S&P into a correction. 

Losses deepened with mounting growth concerns and souring consumer sentiment, but Bessent isn’t losing much sleep over the market slide. Asked what he has to “say to Americans who have real concerns that their retirement savings may be in jeopardy”, the Treasury Secretary responded that “one week does not the market make. As Warren Buffett says, over the short term the market is a voting machine. Over the long term, it’s a weighing machine.. It would have been very easy for us to come in, run these reckless policies that have been happening before. We’ve got these large government deficits, 6.7% of GDP. We’ve never seen this when we’re not in war time, not in recession. We are bringing those down in a responsible way. We are going to have a transition. And we are not going to have a crisis.”

This is precisely what we noted last week when we showed that in 2024, one third of GDP came from government spending, a record high excluding periods of war or crisis; this was financed by 6-7% budget deficits, another unwelcome peacetime record, as Bank of America itself admitted.

“We are putting the policies in place that will make the affordability crisis go down, inflation moderate and as we set the sails I am confident that the American people will come our way,” said Bessent, who ran Key Square Group before joining the administration.

As the scope of President Donald Trump’s tariff policy broadens, consumers across the political spectrum have become increasingly concerned that the extra duties will lead to higher costs. Global tariffs are now in place on steel and aluminum and there’s an April 2 deadline pending for even broader levies. And while inflation cooled last month, any sustained pickup in price pressures risks causing households to limit discretionary purchases.

In the interview, Bessent said the American Dream isn’t contingent on being able to buy cheap goods from China. Families instead want to afford a home and see their children do better than they are.

“The American dream is not let them eat flat screens. If American families aren’t able to afford a home, don’t believe that their children will do better than they are, the American dream is not contingent on cheap baubles from China, that it is more than that. And we are focused on affordability, but it’s mortgages, it’s cars, it’s real wage gains… Access to cheap goods is not the essence of the American dream. The American dream is rooted in the concept that any citizen can achieve prosperity, upward mobility and economic security.”

Finally when asked if the US will have a recession, Bessent said “there are no guarantees. Who would have predicted COVID, right? So I can predict that we are putting in robust policies that will be durable.”

“And could there be an adjustment? Because I tell you that this massive government spending that we’d had, that if that had kept going, we have to wean our country off of that. And on the other side, we are going to invigorate the private sector. I had a meeting with small bankers last week. And they are ready to start lending. And I can tell you that Main Street is going to do well.”

Our Administration and the American people are focused on the real economy, not fake news polling or “vibecessions.”

After four disastrous years for families and workers, President Trump has the track record and vision to deliver the most vibrant economy and capital markets in… pic.twitter.com/Z3hdg5Wp39

— Secretary of Treasury Scott Bessent (@SecScottBessent) March 16, 2025

Or as we said on Friday, “Wall Street Finally Admits DOGE’s Work To “Detox” Government Is Critical, But Will Be Brutally Painful.“

Amid concerns about the US economy, the Fed is due to meet this week and keep rates on hold. Fed Chair Powell emphasized earlier this month that the central bank doesn’t need to be in a hurry to cut rates – which is strange since Powell was clearly in a hurry to cut rates back in September ahead of the presidential election when the economy was “supposedly” doing so much better than it is now – and the Fed chair will be pressed about the uncertainty and risks emerging.

Some other highlights from the full 10 minute interview:

I am confident that the American people will come our way” on Trump tariff policy

KRISTEN WELKER: A majority of Americans say they disapprove of President Trump’s handling of the economy. Consumer sentiment plunged this week to a 29-month low. JP Morgan, Goldman Sachs slashed growth expectations. Why are all of those folks wrong and President Trump is right about his tariff policy?

SEC. SCOTT BESSENT: Well, Kristen, and thanks for having me here. And look, what I am not going to say, that went on for a long time under the Biden administration, and for a lot of — lot of the media, and I’m not going to point fingers, but they used to say it was a vibe session, and the American people don’t know what they talk about. And Donald Trump, his administration, myself, all believe that the American people know what they’re feeling and that we believe that our policies will change that. Clearly, they are traumatized from what’s happened with this affordability crisis that was brought on the – by the previous administration. They want relief. We’ve been in for eight weeks. We’re putting the policies in place that will make the affordability crisis go down, inflation moderate, and that the – as we set the sails, I am confident that the American people will come our way, even if some of the media narrative doesn’t.

“I’m not worried about the markets” following worst week in stock market in two years

KRISTEN WELKER: And just to be clear, I mean, these are polls that are taken two months into President Trump’s presidency. But let’s talk about what happened in the stock market this week, worst week for the market in two years. Does that worry you, Mr. Secretary?

SEC. SCOTT BESSENT: Not at all. I’ve been in the investment business for 35 years, and I can tell you that corrections are healthy. They’re normal. What’s not healthy is straight up, that you get these euphoric markets. That’s how you get a financial crisis. It would have been much healthier if someone had put the brakes on in ‘06, ‘07. We wouldn’t have had the problems in ‘08. So, I’m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great. 

“One week does not the market make”

KRISTEN WELKER: I hear you say you’re not worried about the markets, but nearly 60% of Americans are invested in the markets. That’s their retirement savings. What do you say to Americans who have real concerns that their retirement savings may be in jeopardy?

SEC. SCOTT BESSENT: I say that one week does not the market make. As Warren Buffet says, “Over the short term, the market is a voting machine. Over the long term, it’s a weighing machine.” And again, Kristen, it would have been very easy for us to come in, run these reckless policies that have been happening — happening before. We’ve got these large government deficits, 6.7% of GDP. We’ve never seen this when we’re not in war time, not in recession. We are bringing those down in a responsible way. We are going to have a transition, and we are not going to have a crisis

There are no guarantees that there won’t be a recession

KRISTEN WELKER: Mr. Secretary, can you guarantee the American people here and now that there will be no recession on President Trump’s watch?

SEC. SCOTT BESSENT: Well, Kristen, you — you — you know that there — there are no guarantees, like, who — who would have predicted Covid? So I — I can predict that we are putting in robust policies that will be durable. And could there be an adjustment, because I — I tell you, this massive government spending that we’re — we’d had that, if that had kept going, we — we have to wean our country off of that. And on the other side, we are going to invigorate the private sector. I had a meeting with small bankers last week, and they are ready to start lending. And I can tell you that main street is going to do well.

KRISTEN WELKER: So, what exactly do you mean when you say “adjustment?” Could that potentially lead to a recession?

SEC. SCOTT BESSENT: I — there’s no reason that it has to. But, you know, I can tell you that if we kept on this track, what I couldn’t — what I could guarantee is we would have had a financial crisis. I’ve studied it, I’ve taught it, and if we had kept up at these spending levels that — everything was unsustainable. So we are putting that — we are resetting, and we are putting things on a sustainable path.

On “cheap goods” comment from last week: “The American dream is not contingent on cheap baubles from China”

KRISTEN WELKER: Mr. Secretary, are you there essentially saying that the Trump administration is comfortable to have consumers pay more for goods in America?

SEC. SCOTT BESSENT: Not at all, Kristen. What I’m saying is the American dream is not “let them eat flat screens.” That if American — if American families aren’t able to afford a home, don’t believe that their children will do better than they are, the American dream is not contingent on cheap baubles from China, that it is more than that. And we are focused on affordability, but it’s mortgages, it’s cars, it’s real wage gains.

KRISTEN WELKER: Do you acknowledge, though, that tariffs will ultimately drive up prices, at least in the short term? That’s what economists, that’s what business leaders, that’s what CEOs say.

SEC. SCOTT BESSENT: Well, they don’t have to because I believe, especially with the China tariffs, that Chinese manufacturers will eat that – will eat the price or eat the tariffs. I believe that the currency adjust. And I believe if we look during President Trump’s first term, that all the other things we do if we’re deregulating for getting energy prices down, then if we look across the spectrum, Americans will realize lower prices and better affordability.

On IRS job cuts: “We are doing a big review”

KRISTEN WELKER: Let me ask you about some of these cuts to the federal government. Obviously President Trump’s been very clear. He thinks that no agency should be spared, a lot of focus on the IRS. How much of the work force do you think will be cut from the IRS?

SECRETARY SCOTT BESSENT: Well, I will tell you that there were about 15,000 probationary employees that we could have let go. We kept about 7,500, 8,500 because we viewed them as essential to the mission. And, you know, we will know once we get inside. But what I can tell you is that we are doing a big review. We’re not doing anything. Right now is playoff season for us. April 15th is game day. And even employees who could take voluntary retirement, the rest of the federal work force, their date was in February. Our date for them is in May. So I have three priorities for the IRS: collections, privacy, and customer service. And we’ll see what level is needed to prioritize all those.

Strikes on Houthi rebels in Yemen are “not a one-off”: “The Houthis, the Iranians should expect that this is the beginning”

KRISTEN WELKER: I do want to ask you about the breaking news overnight, the Trump administration launching large-scale military strikes against Yemen’s Iranian-backed Houthis. What exactly is the message that President Trump is trying to send to Iran?

SEC. SCOTT BESSENT: So, it’s a very strong message and very different than the previous administration. So the Houthis, the Iranians should expect that this is the beginning, this is not a one-off. And we are doing this because they are blocking freedom of passage for global shipping. And Kristen, back to the economy, back to inflation that closing the Suez Canal slows global commerce and increases inflationary pressure for both us and our allies. So we are sending a message: this is unacceptable. Two weeks ago, the president announced a maximum pressure strategy on Iran. Their economy is in disarray. The previous administration let their oil exports go up to about 1.5 million a day, and our target is to get it to zero.

Full interview below

Former Chicago mayor and Obama White House Chief of Staff Rahm Emanuel is laying the groundwork for a potential 2028 presidential campaign. Almost immediately after that news was broken by Politico, various and sundry Democrats began voicing negative reactions that ranged from exasperated boredom to outright disgust.   

After wrapping up his stint as President Biden’s ambassador to Japan, Emanuel’s flurry of 2028-minded efforts have included landing a CNN contract and a highly-coveted Washington Post columnist slot, hitting the lecture circuit and racking up political podcast appearances. 

In his lengthy profile, Politico‘s Jonathan Martin positively gushed over Emanuel’s resume: 

There’s not another living Democrat who hasn’t already run for president who’d better grasp every dimension of the job. In fact, this side of Leon Panetta, who’s even close? Emanuel worked on campaigns, including a presidential, was a senior aide in two White Houses, did a cameo in high finance, served three terms in Congress, was a big-city mayor for eight years and then envoy to one of the world’s largest economies for nearly four. And he’s only 65.

To say the least, a host of leftists didn’t share Martin’s enthusiasm. Here’s a sampling compiled by Daily Mail:  

• “Eric Adams, Andrew Cuomo, Rahm Emanuel – they are in the corruption wing of the Dem party,” posted Saikat Chakrabarti, former chief of staff to Rep. Alexandria Ocasio-Cortez. “The lesson from Trump cannot be that Dems could win if only they were more corrupt.”
• “Rahm Emanuel is running in 2028. If he’s the candidate I’m leaving the party. I’m not interested in a boring club membership,” wrote Matt Stoller on X. 
• “The generation of leaders that got us into this mess will not be the ones to get us out of it,“ said Amanda Litman, president of Run for Something, a progressive group that says it’s recruited nearly 100,000 people to run for state and local offices. 
• “What if the path to Democratic Party renewal was always just to bring back the biggest a**holes, like Rahm and Andrew Cuomo?” asked pollster Patrick Ruffini. 

Emanuel is perhaps most famous for pointing to the 2008 financial meltdown as an opportunity to advance the leftist agenda. “You never want a serious crisis to go to waste,” he said. “And what I mean by that [is] it’s an opportunity to do things that you think you could not do before.”

Rahm Emanuel was a NAFTA architect, cheerleader of the Iraq War, proponent of Wall St dereg that created the financial crisis & mayor whose administration covered up the murder of a teenager.

Him being a presidential contender is a perfect commentary on today’s Democratic Party.

— David Sirota (@davidsirota) March 12, 2025

Late last month, the 65-year-old Emanuel used an appearance on “Realtime with Bill Maher” to stake out a socially conservative position, distancing himself from the breed of Democrats who’ve failed to focus on what’s important to most people and ruined US cities: 

“We’ve gone through five years where people became way too permissive as a culture, which is why everything is locked up at Walgreens and CVS, that’s a disaster. And I’ll say this about our schools: I don’t want to hear another word about the locker room, I don’t want to hear another word about the bathroom. You better start focusing on the classroom…In 7th grade if I had known I could have said ‘they’ and got in the girls bathroom, I would have done it.”

Bill Maher asks Rahm Emanuel why Chicago’s mayor has such a low approval rating, and the panel agrees that Democrat policies have ruined large American cities:
Bill Maher: “I read that the current mayor of Chicago has an approval rating of 6.6%. What’s going on in Chicago?”
Rahm… pic.twitter.com/Wn3rj5kQ9v

— Eric Abbenante (@EricAbbenante) March 1, 2025

For those across the political spectrum who think US presidents cater far too much to the State of Israel, Emanuel’s family history isn’t exactly encouraging. His father, Benjamin Emanuel, was a member of the Zionist terrorist Irgun organization that used murder and the destruction of infrastructure to bring about the creation of the country. Most notoriously, Irgun carried out the 1946 bombing of the King David Hotel that killed 91 soldiers and civilians, including 28 British, 41 Arabs and 17 Jews. 

In polling that surely gives Vice President JD Vance cause for both hope and laughter, the most popular 2028 pick for Democrats is the demonstrably terrible Kamala Harris. In a February Echelon Insights poll, she commanded 36% support. Former Transportation Secretary Pete Buttigieg was a distant second, at 10%, followed by California Governor Gavin Newsom. There was no sign of a Rahm Emanuel presidential pulse, but this donkey show has barely begun.  

Last week we noted reporting by journalist Alex Berensen, who cited two large German newspapers in revealing that Germany’s Federal Intelligence Service (BND) has long had evidence that the Covid-19 virus originally came from a US-funded lab in Wuhan, China.

According to these reports, at the beginning of the Covid-19 pandemic in Europe in 2020, the German government commissioned a secret intelligence operation under the codename of Saaremaa to investigate the origins of the Covid-19 virus, also known as SARS-CoV-2. When they concluded that a lab leak was most likely, the German Chancellery ordered that the results were to be kept hidden from the public.

The UK Knew Too…

Now, the Daily Mail reports that “a former spy chief submitted a secret dossier to No 10 early in the pandemic reporting that the virus had originated with a leak from a Wuhan facility.” 

Except that Patrick Vallance, the UK’s equivalent of Anthony Fauci, quashed it.

A classified dossier compiled by Sir Richard Dearlove, the former head of MI6, was passed to then-Prime Minister Boris Johnson at the start of the outbreak in March 2020 which stated: ‘It is now beyond reasonable doubt that Covid-19 was engineered in the Wuhan Institute of Virology’.

The file, marked ‘Secret – Recipient’s Eyes Only’ argued that Beijing was pushing a fake narrative that the virus had originated in an animal market. The dossier, compiled by a group of eminent academics and intelligence experts and seen by The Mail on Sunday, said China even retrospectively manipulated viral samples to give credence to the deception.

But the argument is said to have been dismissed by Patrick Vallance, who was a familiar face during the pandemic as he flanked Mr Johnson at No 10 news conferences.

In a new statement from Dearlove, he writes that “Boris himself was persuaded by its argument. But the weight of the Government’s scientific establishment, already signed up to the Chinese narrative, prevailed.”

Last night, a source close to Mr Johnson pointed the finger at Lord Vallance for rubbishing the lab-leak theory in order to appease the Chinese government. The source said: ‘Boris repeatedly asked the [intelligence] agencies to do more work on the origins of Covid. It struck him as simply too much of a coincidence that a mutant Covid virus appeared in a city that just happened to possess one of the only labs in the world that engineered mutant Covid viruses.

This is pretty huge, also personally disconcerting because this is what I also suspected in 2020, but would have been basically impossible to report and maintain a career at that time: Western intelligence not only asserted with high probability WIV leaked Covid, but knew PRC… https://t.co/FVnCP1QO77

— Sam Cooper (@scoopercooper) March 16, 2025

NYT Offers Lame ‘Mea Culpa’

In light of the two reports, the NY Times – which peddled natural origin propaganda while slamming lab-leak proponents, has penned a mea culpa of sorts that boils down to ‘we had bad information, oops!’

We have since learned, however, that to promote the appearance of consensus, some officials and scientists hid or understated crucial facts, misled at least one reporter, orchestrated campaigns of supposedly independent voices and even compared notes about how to hide their communications in order to keep the public from hearing the whole story. And as for that Wuhan laboratory’s research, the details that have since emerged show that safety precautions may have been terrifyingly lax.

Let’s Review

Baric asked Shi if he could have the genetic data for SHC014. “She was gracious enough to send us those sequences almost immediately,” he says. His team introduced the virus modified with that code into mice and into a petri dish of human airway cells. Sure enough, the chimera exhibited “robust replication” in the human cells—evidence that nature was full of coronaviruses ready to leap directly to people.

emails released a year after the pandemic’s beginning showed that Andersen initially thought the virus had been genetically engineered. However, after a phone call with Fauci and another major virology funder, Jeremy Farrar, then with the Wellcome Trust, Andersen reversed course.

By Peter Tchir of Academy Securities

From Grok:

“For Soviet youth especially, blue jeans represented more than just fashion; they embodied individuality, rebellion, and a connection to the freedoms of the West, standing in stark contrast to the collectivist and restrictive Soviet system. Owning or wearing them became a subtle act of defiance, reflecting a broader yearning for personal expression and a lifestyle beyond the constraints of Soviet rule.”

We will circle back to why I think this is very important but let’s set the stage:

Two weeks ago we published Where the Economy is Headed.

• One point was that much of the current data, particularly on the job front, seemed “optimistic” and would likely decline and/or be revised down.
• We highlighted several areas of the economy that were causing concern, and those concerns have only increased in the past two weeks.

Last weekend we published You Ain’t Seen Nothing Yet.

• We presented our arguments for why there is no Trump Put, at least anywhere near today’s levels.
• We first started to fixate on the risk that all the attention on trade deficits would impact capital flows, which have materially helped the U.S. and were a part of the American Exceptionalism trade.
• We highlighted that a large percentage of revenue for companies in the S&P 500 comes from other countries! (This will tie into today’s title).
• We laid out two scenarios that could turn markets around, and we haven’t seen either occur yet.

On Friday, we published An American Brand, which to some extent was a prelude to today’s report.

• Is the American Brand being affected in such a way that it could hurt sales of American brands?

As I am increasingly nervous about the steps being taken and their impact on our economy and brands, and want to take the time to re-iterate why late last year and early this year we were optimistic.

We specifically use Grok as a source in this piece, under the assumption that of all the AI out there, Grok is most aligned with the administration.

The Goal

The working assumption, one that has solidified over time, is that:

• The president wants to return manufacturing to the U.S. and leave a legacy of rebuilding the middle class!

Fully in support of rebuilding the middle class. How can you not be? A middle class that feels safe and secure in their jobs, a middle class that can afford the American Dream, etc. would be awesome. It is not like the middle class is non-existent, but there is room for improvement.

Completely support the need to manufacture more, especially things we need to ensure safety and security. We’ve been pounding the table from an investment standpoint that anything that can be construed as important to National Security should equate to National Production. “Drill Baby Drill” is merely the tip of the iceberg. We’ve argued for “Refine Baby Refine,” where it is not just the extraction of commodities, but the extraction AND processing that is crucial to our success from a National Security standpoint. But it goes well beyond raw materials and their processed or refined versions. It extends to other areas, most noticeably the semiconductor industry, AI, medicine, and space (to name a few).

One caveat of this policy is that the Trump Put is not going to be executed any time soon.

• If we are going to see a transfer of wealth to the middle class (and growth in that class) it is likely to come somewhat from overseas, but possibly, at least in the short term, at the expense of profit margins. The administration believes that to achieve their goal, they must be comfortable with rattling markets (equities more so than bonds). I cannot disagree with this, but it does make me bearish on risk assets.

A separate goal, not quite related to the economy, but one that I think needs to be stated is that:

• This administration abhors the loss of life.

Members of our Geopolitical Intelligence Group consistently say that when they have worked directly with President Trump, he truly does not like risking lives in conflict. Not just our own, but also those of civilians and victims in conflict zones.

Since the tone of this report is negative on many of the steps taken (particularly on the economic front), I wanted to highlight this, as it is yet another laudable goal and characteristic that is good. I am not completely sure how it is affecting our negotiations in conflict zones, but one can take some degree of comfort that the president has this value.

Since I’m on board with the goals, why am I so bearish?

• If the current policies work in the long run there is still plenty of risk in the short run, especially if the state of the economy is weaker and more susceptible to a recession than many in D.C. (including the Fed) believe.
• Increasingly, when I examine the range of possible outcomes of the policies being implemented (and discussed openly about being implemented), the “good” or “great outcomes” have a reduced probability of occurring and the tail risk scenarios seem to be getting more plausible by the day.

Basically, I think the policies were due to disrupt the economy and markets even if they work out, and I have less conviction that the policies, as implemented, will achieve the stated goals.

Steel

I had a pleasant chat with Grok about the steel industry. I will paraphrase and use some rough estimates of the numbers as it would take too much space to cut and paste all the conversations, and the numbers weren’t always consistent anyways.

The good news:

• The maximum production would be around 115 million metric tons (I’m a bit surprised Grok would use metric measurements).
• Based on current usage, that would leave around 35 million tons of excess capacity.
• The U.S. imports 20-30 million metric tons of steel annually.

At a first glance, we should be able to tariff the heck out of steel and replace it with existing facilities!

But it may not be so simple:

• Utilization rates of over 90% have been cited during boom times. Typically, 70% to 80% utilization is the norm for several reasons.
  • Maintenance, repairs, and inefficiencies keep utilization typically below.
  • Scaling is not as easy for some types of operations as others.
  • The availability of scrap steel or iron ore often restricts production.
• There are various grades of steel and certain specialty steels that are imported that are not likely to be replaceable with current domestic production capabilities.

Even if we don’t increase steel demand in this country (which presumably we would as the U.S. manufactures more) we will still need imports until we build more mills.

Grok thinks it takes 3 to 7 years from concept to full operation to build a steel mill in the U.S. (depending on the type of mill, etc.).

• Planning and permits (1-2 years). In theory permits could be fast-tracked, but the issue we hear from a variety of industries is that they need a degree of certainty that these permits and any regulatory waivers will last for the shelf life of their projects (typically measured in decades, not two-year midterm and four-year presidential election cycles).
• Design and Engineering (6 months to 1 year). Maybe AI speeds it up?
• Construction (2-3 years). Mini-mills, which often just melt scrap, can go up sometimes in the 2 year range, but 3 years might be optimistic for a large facility (and it sounds like that would require ordering things well in advance, performing grading of the land, etc., which would require a fairly high degree of certainty of the project’s success).
• Commissioning and Testing (6 months to 1 year). Not something that I had even thought about.

So, even if the tariffs are massively successful on steel alone, we would need to import reasonably high levels. I have not done the full analysis of how much could be reduced, but it seems reasonable to assume only a portion, until more mills come online, potentially some that specialize in grades the U.S. currently doesn’t produce.

If the policies are successful, we will need even more steel (presumably demand for steel would increase). That would certainly require more plants (which require steel to be built). Leaving the U.S. potentially importing as much or more steel than before (for a number of years) but at a higher price.

That is assuming that the plans to grow production in the U.S. work and other countries don’t respond in ways that make it more difficult to achieve the goals here.

Maybe I’m thinking too linearly here (or circularly) and don’t understand 3D chess, but there seem to be a lot of timing issues that make the policy goals difficult to achieve, without a “measured” transition period. Assuming every country will fall in line with the “trap” being set for them, this also seems a bit difficult to swallow.

And this is just one industry, while we are potentially going to be doing something similar across so many more industries with so many more countries if the reciprocal tariffs are implemented (and they do something about the VAT).

I am finding it incredibly difficult to see how the tariffs are certain to achieve the desired goals as they are currently being presented and implemented.

What vs. How

Basically my “disagreement” has less to do with the what (the goals) and more to do with the how.

This applies to the handling of tariffs, DOGE, and conflict zones. I know there is going to be a range of opinions on this, so I’m not even going to get into any detail.

What I can say is that:

• In Trump 1.0 the how didn’t seem to affect the what. In many cases the goals, at least on a transactional level, seemed to be achieved regardless of the process of getting there.
• While it might be too early to tell, the how this time might get in the way of the what. We will discuss that a bit more in the final section, but it is important. It seemed like during Trump 1.0, there were not as many agenda items (so global and so early) in his administration, so there was less time for the “how” of one deal to affect the “what” of the next deal. Also, it felt like world leaders had no idea how to respond (or play) Trump 1.0, whereas they seem to be deploying different strategies (and not everyone is rushing to the table begging for a deal).

Maybe I’m reading too much into this next chart, but I find it interesting and wonder if it isn’t just starting to express concern about polices, but also concerns about the “how.”

We have highlighted in the CONsumer CONfidence report the difference by party. (I really don’t love the report, but sometimes it has the data you need).

It is almost comical (if it wasn’t kind of scary) that Republicans “boosted” their 1-year inflation expectation from 0.1 deflation to 0.1 inflation, while Democrats chimed in at 4.9% (up from 4.3% last month and 3.3% the prior month). That gap is unusually large.

But today we use the example of the sentiment data. We compare the sentiment data to the average of the Republican/Democrat data and to the Independents.

In theory you would expect to see them all roughly aligned. The Independents should, in theory, be in around the Dem/Rep average which should also be the survey result.

You get that a lot. We had a deviation where the average of the two parties was much higher than the Independents, presumably because both sides thought they were going to win and were optimistic.

What I found most interesting is how after seeing rising sentiment post-election, we have started to see a decline. Initially led by Independents and now, not just followed by, but led by, the overall number.

That data is not encouraging, especially as sentiment can affect behavior.

Something not good is happening out there and the Independents are leading the way lower, which I think means something as they should be less subjective about the party in charge and more focused on actual policies.

Again, I have lots of issues with these surveys, but I feel it is capturing something this time around that we should all watch for, and unfortunately fits many of the themes we’ve been writing about – especially the state of the economy and about the impact of policies so far.

The American Brand

I’ve seen very little discussion about the risk to sales of American brands globally. Even we didn’t focus on that too much last week. We focused more on the potential costs incurred by U.S. companies with global businesses, than the possible damage to brands.

While jeans and the Soviet Union might be too specific of a case, I think there is a lot that is relevant to today’s global marketplace.

American brands still have a certain je ne sais quoi about them (I probably shouldn’t use a foreign language in this section, but if Grok can use metric and spell tonne incorrectly, why not?).

There is an “aspirational” quality associated with American brands. The power, the lifestyle, so many things feed into that global demand for U.S. goods. Yes, quality, and other things are incredibly important, and while the “USSR and Jeans” is a likely overstatement on today’s global demand for U.S. brands, I would be shocked if it had zero impact!
 

There is, I believe, a risk that sales of U.S. brands could be adversely affected. I cannot believe I am about to quote Warren Buffett two weeks in a row (I must be getting old), but here it goes (from Grok):

“It takes 20 years to build a reputation and five minutes to destroy it. If you think about that, you’ll do things differently.”

I’m not saying that we have hit that point, but I certainly think it deserves some thinking about (especially as one of our concerns has been about “re-trading” and in recent social media posts about Panama, the president harps on the sale of the canal for $1. It may have been a bad deal, I have no idea of the context at the time or what (if anything) else was received outside of the $1, but our industry doesn’t like people who re-trade and I find it impossible to believe that nations won’t find it difficult to trust over time.

It is also a good time to point out that I had complaints during the prior administration about how our policies (particularly with Ukraine and Isreal) were affecting how the world perceived the U.S. So not all of the potential reputational damage is new.

I could be wrong about reputational damage risk and its potential to impact how countries deal with us and how it affects our brands globally! But one of the GIG members I was traveling with this past week mentioned this particular quotation at several meetings. You can find in on Yahoo! I will admit that the Singapore Defense Minister is not huge on the world stage, and the event he was speaking at isn’t a global forum for the leaders of the biggest countries, but it is probably worth a minute of your time to read. It is even possible that other important people in their respective countries have a remotely similar view (I wouldn’t be sharing it if I didn’t think it is plausible). He used the phrase “willy-nilly” leading up to this point:

“The image has changed from liberator to great disruptor to landlord seeking rent.”

Two countries, Canada and Portugal, have announced that they are reconsidering purchases of an American made fighter jet. Nothing has changed about the jet or its competitive advantages versus their competition, but something has changed. It could merely be a “reactionary” step with no real teeth that will fail, and they will be embarrassed that they even went down this path. It could be that even after reconsidering they go forward with the purchase. It could also be that they decide to move away from U.S. equipment. Not ideal for U.S. manufacturing, but possible.
There is a risk that how the country implements policies, let alone the policies themselves, will have unintended consequences.

Xi and Taiwan

According to Grok, Taiwan manufactures about 90% of the chips used in AI – the most important growth story across the globe.

Many of our GIG members argued that the isolation Putin faced after his invasion of Ukraine (that was how it used to be described) would give Xi pause. While there are still a lot of questions about China’s ability to take over Taiwan militarily (almost impossible if the U.S. intervenes), he must be watching the potential reintegration of Russia into the global trading community with some “curiosity.” China interfering with Taiwan remains a low risk in most of our assessments, but it is worth taking a fresh look at this in light of what is going on across the globe with U.S. policy – both economically and geopolitically – though the two are difficult to separate.

Bottom Line

Is the U.S. underestimating the intangible benefits from its status (like demand for American brands and capital inflows)?

Maybe the Fed saves the day this week with a strong pivot to rate cuts. I don’t see it. Will go into more detail ahead of the Fed, partly because we’ve already taken too much of your time, and because quite frankly I don’t see the Fed acting in a “big enough” way to offset the risks that I see:

• An economy that was already weaker than the data showed.
• An economy that is getting hit not just by government cost cutting (and how it is being done), but also by companies being “frozen” as they need to have a clear understanding of what policies are here to stay, before making hiring decisions.
• Capital flows, and now the risk to sales globally, compounding the problem.

I am clearly in the “recession” camp. Things could change, but the convergence of so many policies seems to risk a recession before any probability of seeing the benefits (that the administration expects to see) shows up in the economy and markets.

While I’m not there yet, and a lot could change (like backing off from the April 2nd tariffs, an aggressive Fed, or new fiscal spending surprising us all), I wouldn’t be surprised to see some analysts bring up the D word.

With Friday’s bounce and crypto trading well so far this weekend (yeah, we have to keep an eye on it) and the Fed coming up, maybe we’ve bottomed for now. All of the 200-DMA purchases will turn out to be good, and some things like reciprocal tariffs haven’t been implemented yet, providing more breathing room. Buying the dip has been surprisingly strong. TQQQ, mentioned on Friday, now has the most shares outstanding since late September. If inflows keep coming, maybe this rally continues.

However, I remain cautious for all the reasons listed above and cited over the past two weeks. Underweight sectors or factors make sense to own, and I still like the National Security = National Production trades. I’m the most nervous about corporations that rely on global sales. Any near-term benefits from policy are likely to accrue to smaller companies rather than those with a global presence which not only may face issues on the selling side, but are also likely to have a lot to deal with regarding their manufacturing and supply chain.

FX – dollar weakness seems to be the play until the messaging out of D.C. changes. DXY, a basket of currencies at 104, is still above pre-election levels of around 100 and I see no reason why in the coming weeks it won’t succumb to a return to those levels, like so many other asset classes have.

The front end of the yield curve, not pricing in its first cut until June and only getting to 3 cuts by next April, is not aggressive enough. I’d be shocked, given what I see, if the Fed doesn’t cut as early as May (though that may not get telegraphed at this week’s meeting) and if they don’t have to cut 4 times by the end of the year – which fits my outlook for the economy. 10s I suspect won’t respond as positively as commitment to true deficit reduction (or the ability to achieve it) may have been given too much of the benefit of the doubt by the market, and I suspect capital outflows, 10-year German yields at almost 3%, and 40-year JGB yields at almost 3% will compete for funds in their own regions, offsetting some money that used to find its way into Treasuries.

Credit is the lynchpin of so much. We finally saw more people grow concerned and some moments of buyer strikes. We ended the week strong, but given my economic and fund flow outlook, expect to see that widen. If that does happen you can be sure that the “cottage industry” of bond blow up pundits will be out in force, trying to drive already jittery equity markets lower.

While I’m not oblivious to the risk that the rally is real and policies change, I’m glad I got this report off my chest. I would love to see policies more along the lines of what I expected when I was all bulled up. Policies that seem likely to work in the long run and have less short-term risk. Maybe we get that. Maybe I’m horribly wrong in my assessment of whether the current and planned policies will achieve their goals with minimal damage. I’d be happy for that to be the case, but for now, I feel I need to keep sounding the alarm on risk assets.

Yemen’s Health Ministry now says that 32 people, including children, died after Saturday’s major US airstrikes pounded Sanaa, with President Donald Trump warning the Houthis not to attack ships passing through the Red Sea.

But on Sunday, that’s precisely what the Houthis did: a Houthi military announcement claimed the group carried out “a qualitative operation” on the US aircraft carrier Harry S Truman. “Our forces targeted the Truman aircraft carrier with 18 ballistic and cruise missiles and a drone,” a spokesman said.

Nasruddin Amer, deputy head of the Houthi media office, described that Saturday’s US air strikes – which reportedly hit some 170 sites – won’t deter the Shia armed group back by Iran. 

Amer pledged more attacks on Red Sea shipping will come: “Sanaa will remain Gaza’s shield and support and will not abandon it no matter the challenges,” he said.

But later in the day Sunday an unnamed Pentagon official was quoted in Reuters as rejecting the Houthi claim. The official dismissed the claim of that a missile and drone attack came close to hitting the USS Harry S Truman.

A subsequent Fox report said that US warships shot down any inbound Houthi drones, and that they were not a serious threat.

Saturday’s strike on Yemen not only resulted in civilian deaths, but a reported over 100 injured, as President Trump vowed to “use overwhelming lethal force” while warning Iran to “immediately” cut its support.

“Your time is up, and your attacks must stop, starting today. If they don’t, hell will rain down upon you like nothing you have ever seen before,” the president said on Truth Social.

“I have ordered the US military today to launch a decisive and powerful military operation against the Houthi terrorists in Yemen,” he said, adding that he’s willing to use “overwhelming lethal force until we have achieved our objective.”

An American defense official denied the Houthi statement:

Houthis: We attacked the US aircraft carrier USS Harry Truman with 18 BALLISTIC MISSILES and drones

‘We will not hesitate to target all US warships in Red Sea and Arabian Sea’
pic.twitter.com/eOHQ2c5AI4

— Open Source Intel (@Osint613) March 16, 2025

The Houthis’ leader last just Friday had declared a four-day deadline before attacks on shipping would resume. That four day timeline had ended by close of Tuesday, which means the Red Sea could be soon fiery scene of drone and missile attacks out of Yemen once again.

Since 2023 over 100 missile and drone attacks on commercial vessels have occurred in the Red Sea and the Gulf of Aden. The Houthis have also downed several MQ-9 Reaper drones operated by the Pentagon.