Trump and Putin and assorted thoughts

Random thoughts and wild speculations

Mortgage rates fell last week. I thought the Fed left rates unchanged? What’s up with that? A 30-year fixed rate mortgage is at 6.58%, it’s lowest level since October 2024. A 15-year fixed is at 5.83%. So if the Fed didn’t lower rates, then how can this miracle occur? Its because the mortgage rates are more influenced by long term Treasurys than by the short term Fed funds rate and the poor jobs numbers were met will falling bond yields. Hence, lower mortgage rates. ATTENTION: The Fed doesn’t “control” interest rates. Markets do. If those mortgage rates look attractive to you then you had better move fast. The inflation numbers are starting to come in and they show prices going up. Fears of inflation will cause bond yields to go up. So refinance now!

Two republican senators, Grassley of Iowa and Curtis of Utah have been captured by the wind industry. Do you mean that wind bags are in cahoots with windmills? So it seems. Both Grassley and Curtis have put a hold on some of Trump’s nominees because they want to protect tax credits for wind projects that have been authorized but not funded. Apparently these sweetheart projects are in Iowa and Utah. Grassley and Curtis obviously have no shame.

The Trump’s administration rollback of the fleet milage standards with a penalty of zero has ended the fuel credit gravy train subsidizing EV manufacturers. Just in case you had forgotten, the EV companies get millions of dollars from fuel credits paid by the automobile companies.  Auto manufacturers are required to produce a certain number of so-called zero-emission vehicles (ZEVs). These carmakers are required to have a certain amount of regulatory credits each year. If they can’t meet the target, they have to buy them from companies that have excess credits. Since Tesla, Rivian and Lucid only make electric vehicles, they always have excess regulatory credits and sell them to the other car makers. Because Trump ended the EV penalty, Rivian says it will cost them $100 million in lost “revenue”. Lucid has only said that it will suffer a significant lost. Tesla has said that it expects to “lose” about $1.2 billion from the loss of “revenue” from selling the credits to other car companies. Mind you, the car companies have been losing billions on making EVs and that loss has been compounded by their not being able to sell enough vehicles to get out of having to pay Elon Musk, et. al. even more money. Even at that Rivian reports losing $39,000 per vehicle which is significantly down from losing over $100,000 per vehicle two years ago. Lucid loses $300,000 per vehicle. Rivian now expects an overall loss of $2.5 billion for the year.

Reports are that on average 22 percent of the tariffs have been passed on to consumers. Projections are that number will soon be 67 percent. Some of this has caused the producer price index to rise in the past month. The annual rate is 3.3 percent and rising. More troubling is that a good deal of the rise is in services and not in goods. This is a bad sign. It also means that the Fed, which was widely expected to cut the Fed funds rate by 50 basis points, may now cut 25 basis points if at all. See Trump go even more out of his mind – if that is possible. Also troubling is that prices are going up faster than wages meaning a decline in real wage growth. A lot of people voted for Trump because of Biden’s inflation and now if his policies continue the republicans will pay the price for Trump’s tariffs at the midterms.

Since Trump is getting rid of the temporary protected status, 259,000 Ukrainians are in danger of being deported. I previously mention the same was true for the Afghans who fled here under that program. Are we sending these people back? I know some progressives who would say “well he is sending the Haitians back, so why not some white or semi-white folk too?”

By the way, when did white cease being a color? Saying “people of color” excludes white people. At the Westminster Dog show the categories of cocker spaniels are black, black and tan, parti-color (two or more colors one of which must be white) and ASCOB (any color other than black). Maybe we ought to do the same and have a ASCOW category.

I previously wrote about Trump shaking down countries and companies. Now he was a piece of Intel. Not content in trying to oust their CEO, now the government wants a financial stake in the company. Good grief. Why doesn’t Trump just get Taiwan Semiconductor to move all its operations here in exchange for us guaranteeing total protection of the island.

Speaking of Taiwan, I also mentioned that China could be doing a rope-a-dope and actually has its sights on Upper Manchuria and Siberia. It makes infinitely more sense to put 100,000 troops on the border and walk into those countries rather than trying to negotiate the 100 miles of the Taiwan Strait. Do you think that China might be worried that in the Trump-Putin only talks that the fate of Siberia might be discussed. I have wonder why Trump has been soft on Russia. It has imposed punitive tariffs on our one allies and all of the world save Russia. Trump has been putting tariffs on Russia’s trading partners – like India – but not on Russia itself. He has been saying that if Russia doesn’t agree to a truce on Ukraine that he will be REALLY REALLY MAD and will hit them with REALLY REALLY BIG TARIFFS! So he is going to negotiate a true without Ukraine being in the room? Shades of Neville Chamberlain. Does this mean that if the Ukraine doesn’t agree to whatever truce is negotiated in their absence that he will impose REALLY REALLY BIG TARIFFS on Ukraine. JD Vance has already said that the US may stop shipping arms to Zelenskyy via Europe. Of course Trump doesn’t like Zelenskyy in the first place and even less when he said that no cease fire can exist if Ukraine has to cede territory to Russia.

Again way back when I wondered why Russia would invade Ukraine. It is obvious – at least to me – that it was to capture the vast riches of the country especially its oil and rare earth minerals. The territory that the Russians are demanding as a condition of a cease fire, the Donetsk Oblast, is sitting astride $5.7 trillion in rare earth minerals.

Trump said that he was meeting Putin in Russia. “You know, I’m going to see Putin. I’m going to Russia on Friday.” If Biden had said that, the MAGAs would have been loudly questioning his mental acuity. Not so with Trump. Now consider that Trump negotiates a “truce” totally unacceptable to Ukraine and ceases furnishing weapons, leaving it all up to the Europeans who are also excluded from the talk. if Trump makes an alliance with Putin, then the Chinese will be upset because of the possibility that the US would also aid Russia in repelling any Chinese aggression in Siberia and Manchuria. Also the Europeans would be left out to dry. The only reason the Europeans pay any respect to the Americans is that we keep the Russians at bay and pay for the privilege of defending them.. A Putin-Trump alliance would devastate Europe even more that the ridiculous 39% tariff on Switzerland. Vance went over there and chided the Europeans about their behavior. Trump has shown distain for virtually every European leader except Italy’s Meloni, Hungary’s Orban and Poland’s Duda.

So there are obvious benefits with an alliance for the Russians but what about for the United States. Little was said about the talks that Marco Rubio had with his Russian counterparts in London. But Rubio talked about the “extraordinary opportunities,” economic and geopolitical, that the United States and Russia could both seize once the war in Ukraine was over.” Trump also said that he was “trying to do some economic development deals” with Moscow. Russia was once a place to do business, despite all the pitfalls, mainly because of its energy sector. However, America is now the major competitor in the world with Russian energy. Trump is talking about “economic development deals”. Will that be enough for a Putin-Trump pact? I don’t know but I do know that such a deal would only last while both are in office. Just like Trump’s handshake deals with companies and countries, once he is gone all that goes away. I also can guarantee that Trump’s dominance also goes away once he leaves office. But a Putin-Trump alliance would really be interesting. Wouldn’t it?