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Is buying Tesla a rational act?

Tesla is a very strange company. Its P/E ratio is 146 meaning it is still a darling in the market. This puts it in the greater fool territory. It would take a 146 years for a buyer of the stock to regain the amount purchased. I doubt if there is anyone optimistic enough to think that they will be around 146 years from now. Rather the investor knows that the only way to recoup the investment will be through capital gains meaning that there is a greater fool out there willing to pay even more for the stock. I know that Tesla is depicted as not being valued as a car company. Rather it is depicted as being valued as a high tech firm. Well don’t you think that most high tech firms are also in the greater fool territory too?

Tesla’s market cap is an astounding $871 billion making it the twelfth “most valued” company in the world. Veteran automobile companies have a much smaller market cap. Ford has a market cap of only $36 billion while GM has a market cap of $49 billion. Mind you Tesla makes about 1.5 million vehicles a year. Ford makes 4.5 million and GM makes over 6 million. So obviously Tesla is not being evaluated as a car company.

But the sharp knives are coming out for Tesla. Is this because of Elon Musk? It is rapidly losing sales in Europe. It has encountered stiff competition in China. Here in the states, several high profile personalities have made a big show out of getting rid of their Teslas. However, I think Tesla’s main troubles will arise from it not being very good at making cars. Its frequency of repair record is the worse among all vehicles, Yet its owners remain fiercely loyal. That is why I said that they are a cult. If any other manufacturer had that distinction, it would lose sales in droves. Motor Trend just reported that the national highway statistics reveal that Tesla is now the deadliest car in America. How will that affect its followers? Elon Musk is a lot smarter than I am but I think he ought to spin off his car company from the rest of his enterprise and sell it to a company that is good at making cars. I know that people will be saying that Ford or GM or any other car company is too small to by Tesla but that ignores what the car only company would be valued.

Tesla has been losing market value as its car sales have fallen. Registrations in Europe have fallen a staggering 45 percent January year to date. Tesla stock is off 25 percent and Musk has found his personal wealth falling $100 billion. Ho hum. Although it is possible that Musk’s prominent role in the Trump administration and his meddling in German politics are reasons for the decline the greater fool hypothesis also makes sense. Stockholders may be cashing in capital gains because the stock is still up 52 percent from last year. 

Selling Tesla will still leave Musk with Space X, the media platform X, an artificial intelligence company and Neuralink. Musk could still pioneer automobile technology such as self-driving and its robo-taxi service. There is no reason to own a car company just to bring that technology to the market. Rather Musk could sell that technology to the automobile industry. No longer will he have to deal with what seems like a daily recall to fix fit of finish, power steering, rear view cameras, tire pressure monitoring systems, power trains, hood latches, windshield wipers, seat belt warning, accelerator pedal malfunctions, autosteer, dashboard font system, faulty door latches and other stuff. Fierce customer loyalty in the face of all this? Did I say cult? Seriously, wouldn’t Musk be better served if he sold Tesla and concentrated on being a technology company? BTW, there is no way I would want to hitch a ride on Space X.

and Trump’s weird nominees

I really don’t have much to say about Trump’s address to the congress and the democrat reaction to it. Except the democrats showed out (to quote my sainted mother). Al Green – the representative from Texas – not the singer was “Full of Fire.” He started shouting at the beginning of Trump’s speech and would not shut up. He was escorted out of the chamber by the sergeant at arms, probably not singing “Let’s stay together” or “Take me to the river”. Green hates Trump and has put forth articles of impeachment. However, Green should be embarrassed (which he is not). The young boy that Trump made a member of the Secret Service lives in Green’s district. Yet Green chose to act out rather than to stay and congratulate his young constituent. Some democrat women wore pink to symbolize their “protest of Trump’s policies which are negatively impacting women and families.” Huh? Since when have democrat women politicians given a hoot about women? Didn’t all of them vote against the resolution to prohibit males from participating in women’s sports? And what’s with the ping pong paddles? Didn’t they get humiliated enough when Rashida Tlaib waved her ping pong paddle at Netanyahu during his speech back in July? Yet there they were, the women looking like a Pepto Bismol commercial waving ping pong paddles. Tlaib? She was waving a whiteboard (is that racist?) on which she wrote cryptic messages like “That’s a lie”, “Start by paying your taxes”, “Stop lying to the American people” and “No king” whatever that meant. Such deep thoughts from one of congress’s deepest thinkers.

I am certain that the petulance shown by the democrats only registered with their Trump hating constituents but not the American people writ large. Again this is the crew who are protesting and resisting for big government, big spending, big duplication, continued fraud and waste, DEI, ESG, men competing in women’s sports, men in women’s private places, open borders, benefits for illegals, higher taxes, more regulations, killing babies and subsidizing the greenie weenies. What’s not to love? Has ever there been a sharper division between the democrats and republicans since the Civil War? There almost were confrontations on the chamber floor. When Green was ousted, the republicans sang “Hey, hey good bye.” Several dems turned their backs to Trump displaying the message “resist”. Some yelled at Trump during the speech evoking images of the British House of Commons. Nancy Mace and MTG yelled at Green during his outburst. Melanie Stansbury (D-NM) had a sign that said “This is not normal” – whatever that meant – and Lance Gooden (R-TX) ripped the sign from her and tossed it away. At least Pelosi was no longer on the dais ripping up the speech. The next day the AP reported that a screaming match erupted on the House floor in the vote to censure Green. During the reading of the resolution the dems broke out in song singing “We shall overcome” while the republicans yelled “order”.  Squad members Pressley and Tlaib shouted at the republicans who shouted back. I am waiting for the members to start beating up each other with Al Green’s canes and maybe a duel or two. Is it now accurate to say that the parties hate each other? Regardless, what is going on now is infantile. A pox on both of their houses.

Only John Fetterman had the guts to call out the members of his party saying “A sad cavalcade of self owns and unhinged petulance. It only makes Trump look more presidential and restrained. We’re becoming the metaphorical car alarms that nobody pays attention to—and it may not be the winning message.” Fetterman continues to surprise. He is still a liberal and will vote with the majority of his party most of the time. But he is definitely his own man. Who would have thunk it? I am starting to be glad he beat Dr Oz because the dems need more like him. Fetterman is rare because he has guts and doesn’t care what the Bernie Sanders/AOCs of the world think about him.

Dr Oz? Trump picked him to head the Centers for Medicare and Medicaid Services. I have no idea how he will perform his duties but his boss will be RFK, Jr who is still a kook. Let’s just chalk this up as Trump continuing to find a place for losers. Recall he even appointed Kari Lake who almost single handedly flipped Arizona from republican to democrat to be head of Voice of America and changed it to something called “Special advisor for the US Agency for Global Media” whatever that is. I think this is the Orwellian foreign propaganda arm of the US government which includes Radio Marti broadcasting son cubano to Cuba. Does this agency do any good? Or is it just another black hole to toss money into?

The Bully in the China shop

Trump is truly the bull in the china shop. Or should I say Trump is truly the bully in the china shop? Now if he would only impose a 1000 percent tariff on all things Chinese…..

Trump has declared war on the world. Trump says he will impose his magic 25% tariffs because they won’t buy our cars and impose a 25 percent tariff on Europe but nothing on Russia.. This shows the stupidity of the Europeans. Why impose a 10 percent tariff on American cars when they won’t fit on Europe’s narrow streets? When I was living in Germany, the biggest car I saw was a Camaro that barely could fit on the streets of Konstanz. Look for Europe to put big tariffs on Harleys, bourbon, agriculture and other American goods.

I wonder if the Europeans impose tariffs on European cars made in America? BMW exports 225,000 cars from its Spartanburg, South Carolina plant with a value of over $10 billion. The cars are exported to 115 countries, including Germany and the UK. Will Trump cut a deal with BMW, Mercedes and the other foreign companies with plants in the US? Look for carveouts.

Of course all this is stupid. Why didn’t Trump just say that he was going to impose reciprocal tariffs on all trading partners by a certain date unless they agreed to either the same tariff or no tariff at all? But then again, Trump is obsessed with the trade deficit and reciprocal tariffs do not address the deficit. But if we insisted that the rest of the world buy as many US goods as we buy from them, even if they could (which they can’t) they would all be crushed to death by all the stuff piled up on them. Think Viet Nam. What we need to do is to convince Trump that the trade deficit is actually an American export. More on that later.

The pro-Hamas mob at Columbia University is back at it. When Barnard, its sister college, expelled two students for disrupting a Jewish history class, around 100 Columbia and Barnard college students protested by occupying a Barnard campus building and sending one security guard to the hospital. Naturally, the students were wearing masks and keffiyehs. The students chanted their standard antisemitic slogans. Barnard college officials sat on their thumbs, did not have the protestors arrested and waited for them to leave the building. 

This nonsense has got to stop. The students say that “unmasking exposes them to greater risk of doxxing, violence, and disciplinary action.” Damn right. All students wearing masks should be expelled with no exceptions. All students disrupting campus life should be expelled with no exceptions. Those on student visas should be kicked out of the country. Quit coddling these spoiled tyrants. Of course, many of the faculty and administrators at Columbia and Barnard are more sympathetic to the protestors than with the Jewish students which may be a reason for the wimpy response. 

But Trump is coming to the rescue! Leo Terrell, one of many Fox commentators tabbed by Trump, heads a Justice Department task force charged with bringing “the full force of the federal government to bear in an effort to eradicate antisemitism in schools like Columbia and Barnard”. Is there anyone left at Fox? Terrell’s task force will visit at least 10 schools that have been soft on these protests. It is not certain what disciplinary actions will be taken. But this antisemitic harassment has got to stop. Maybe if Terrell recommended that the endowments of these schools be taxed or that all federal funds would be terminated, the protests would end immediately. I bet if the students were harassing trans students, that the universities would have been arresting and expelling. What is interesting is that Jews are overwhelmingly democrats with 79 percent voting for Kamala Harris. College professors and administrators are the most loyal democrat constituency with 92% supporting Harris. Yet these leftists are idly sitting by while a bunch of rowdy left wing socialists are harassing their fellow left wingers who happen to be Jewish. And Trump is riding to the rescue? I thought he was a Nazi? Go figure.

Speaking of “is anyone left at Fox?”, Trump selected Dan Bongino to be FBI deputy. That makes 21 Fox personalities tabbed so far. So Fox has announced it is hiring Trump’s people. Former DOGE co-chief Vivek Ramaswamy will have a show on Fox Nation. Fox is hiring Trump’s family members too. My other half who watches Fox when she is not watching Antiques Roadshow was looking a show hosted by Lara Trump. Who’s next? Melania?

A Trump recession? You heard it here first.

If Trump loves tariffs so then why doesn’t he use them to try to alter Chinese behavior? I don’t mean this piddling 10 percent increase either. China is a bad actor.  It is rattling its swords in the South China sea. It continues to threaten Taiwan. Trump’s actions toward Ukraine may have emboldened the Chinese to become even more aggressive towards Taiwan. Trump is not going to come to Taiwan’s rescue militarily. So what is there that will slow them down? Tariffs. If Trump told China that he was going to impose a 1000 percent levy on all Chinese imports if they didn’t quit the threats in the South China Sea and toward Taiwan. I bet that would get their attention. For good measure, I would tell them to stop all the hacking and quit harassing the Uyghurs. Do it.

Stop with the Trump worship already! One lawmaker wants Trump’s face chiseled into Mount Rushmore. Another wants to make his birthday a federal holiday. Still another wants to change the name of Washington Dulles Airport.

Tennessee’s Andy Ogles wants to amend the Constitution to allow only presidents who have served nonconsecutive terms to seek a third term. Hello Donald Trump. Hello Grover Cleveland. What about adding his likeness to Mount Rushmore? What about renaming Greenland as “Red, White and Blue land?” Mark Alford (R., Mo.) has proposed Feb. 9 as “Gulf of America Day.” Some have even talked about renaming their state as “The State of Donald Trump”! How about Trump City, Tennessee? One of my granddaughters is named Reagan. Pity the poor child who is named “Trump”. Good grief! Want to bet that all this will change as Trump wears out his welcome? 

All this embarrassing – but not to Trump – hero worship will quickly vanish if Trump’s policies result in this country going into a recession. Trump’s tariff war is not confined to Mexico, Canada and China. It is with the entire world. He has threatened Europe, the BRICs countries and anyone that trades with America with tariffs. Increased tariffs in the past have led to job loss in the United States and in our trading partners. He is ignoring the Smoot-Hawley Act and ignoring what happened during his first term. This time the impacts will be magnified and will be Smoot-Hawley on steroids. He wants the Fed to ward off any recession by lowing interest rates and goosing up the money supply. This is a toxic mix that will lead to an inflationary recession. When, not if, all of this occurs then even the biggest Trump apologists will regret all the adoration that they are lavishing on him.

My next lectures will be on the stock market being overvalued. Irrational exuberance anyone? The P/E ratios all point to an overvaluation. On the S&P 500, its P/E ratio is around 37 which is 80 percent above its long term average of 20. A P/E ratio is a measure of how many years of profits will be required to recoup one’s initial investment in the stock. Tech stocks are all above the S&P average of 37. Tesla’s P/E ratio is 161. This is greater fool territory. No longer are buyers expecting that when they purchase a stock that they will recoup the cost with the anticipated flow of dividends. Rather they can only profit by selling the stock at an even higher price hoping that there is a bigger fool out there that is willing to buy it at a higher prices. This is dangerous territory and is ripe for a correction that will shave trillions of dollars off of wealth. Will it trigger a recession is the question. Losing two trillion dollars in the dot.com bubble of 2000 triggered a major recession – P/E ratios were over 100. A similar plunge by Amazon, Apple, Meta and the rest of big tech coupled with Trump’s tariffs would be recessionary and lead to democrats coming back into power in the midterms.

Canada is gearing up to match Trump’s tariffs and Trump has caused the polls in Canada to swing wildly. A month ago the conservatives were 20 points ahead of the liberals with elections coming due to Trudeau’s resignation. Now the liberals are 2 points ahead. Trump saying that he was going to use tariffs to force Canada to become the 51^st state has engendered latent patriotism and a massive pushback. Trump saying that “Tariffs will make it impossible

for them to sell cars…lumber or anything else into the U.S.” and “If we don’t support them they don’t subsist as a nation.” Mark Carney, the favorite to lead Canada’s liberals has said that Trump’s threats are “one of the greatest crises in our history. I know how to manage crises, I know how to build strong economies.” So thank Trump for the resurgence of the liberals. One observer said “If the next election is about who’s best able to handle all the turmoil that Trump is creating, then the Liberals can win that election.” All this means is that Canada will retaliate. It will impose retaliatory tariffs. It will cut off the flow of oil and electricity to the U.S. The conservatives have tried to counter the liberals with a Canada first agenda and its leader saying “Let me be clear: We will never be the 51st state. We will bear any burden and pay any price to protect our sovereignty and independence.” However, this may be too little, too late.

And mind you, these are our friends. Or should I say, these used to be our friends. Remember the bitter hockey game between the US and Canada where the Canadians booed our national anthem? Almost immediately after the puck dropped so did the gloves as a brawl ensued. Trump taunted Trudeau before the match and when the Canadians won in overtime, Trudeau tweeted “You can’t take our country—and you can’t take our game.”

Then what about our trading partner to the south? All the forecasts are for Mexico to go into a significant recession if hit by Trump’s tariffs. Trump obviously expects them to knuckle under but their socialist president is adamant that they won’t. Trump wants Mexico to do more to stop the illegals and to stop the flow of fentanyl. If not then Pete Hegseth is reported to have told Mexico’s military leaders that the United States is prepared to take unilateral military action. What! I thought that Trump was no neocon. Is Hegseth said that Trump will use the US military to go into Mexico to deal with the cartels? He can’t be serious. There is no way that Mexico will stand to see its sovereignty threatened by a US invasion. Will this be Trump’s Afghanistan and will the American people stand for it? What in the wide world of sports is going on? OK Andy Ogles, still want to kiss Trump’s ring?

Anyway I thought China was the source of all things fentanyl? That’s even more reason for a 1,000 percent tariff. 

Fortress America

It looks like Trump will abandon Ukraine in his pivot toward Russia. That should come as no surprise to the Ukrainians who are accustomed to being abandoned by the United States and left on their own. Ukraine is never going to surrender to Russia who look upon them as inferior second class citizens. From the betrayal of Woodrow Wilson, to Yalta, to Bush, Clinton and Obama the US has lied to Ukraine and/or left it to fend for itself against the Russians who were and are brutal masters. Stalin was responsible for 4 million Ukrainian deaths. Russian brutality has been front and center in this conflict. They have tortured Ukrainians, killed prisoners, abducted their children, conducted sexual violence against men as well as women and children. They have been barbaric overseers in the territory they have seized. Ukrainians have documented over 150,000 war crimes committed by the Russians. The Ukrainians know that the Russians will never be held accountable for these actions and think they can inflict them with impunity. It would be irrational for Zelenskyy to accept a peace without security. Is Ukraine simply going to abandon Luhansk and Donetsk like they abandoned Crimea? Remember those areas contain 40 percent of Ukraine’s mineral wealth.

I would be shocked if the Ukrainians ever trusted the Americans. I would be equally shocked if it isn’t developing its own nuclear weapons after foolishly abandoning them at Clinton’s urging. There is no way Ukraine will accept Russian dominance. Ukraine is not going to join NATO but given all the support coming from Europe look to it joining the EU. If all this Russia mess doesn’t compel Ukraine to continue pivoting toward Europe then nothing will. But a nuclear Ukraine is necessary to keep the Russian bear away from their throats.

What I am wondering is why can’t Europe step in a broker a deal? Brussels was left out of the negotiating table in the talks between Russia and the US. But it is clear that Ukraine would never accept a deal hammered out with those two, given that it doesn’t trust either. It would be fitting if the US were left out of these negotiations. Ukraine should offer to pay the US for replacement parts and upkeep on the materiel it has and pay for anything in the future.

Some observers, more learned than I am, have posited that if the US abandons Ukraine then Russia will be emboldened to invade other countries. I think the chance of this is virtually zero. Russia invaded Ukraine three years ago thinking that it would take only a week or so to subdue the country. Surprise! Russia is a weak big bad bully with only its nukes to try to scare its opponents into submission. If Europe had any backbone it could easily dispense with the Russian threat. But the Europeans are mostly gutless. If Russia did decide to invade the Baltic states, it would probably get its butt kicked. Since Lithuania, Estonia and Latvia are members of NATO then NATO would come to their defense. Would this be Trump’s World War III?  Don’t look for the US to join them. Trump’s America is not going to be drawn into any foreign wars. The neocons be damned. Look for rumblings for Trump to take the US out of NATO.

I actually think the bigger threat is that the Chinese may be emboldened to attack Taiwan. To that end we should make sure that such an invasion will be even more costly to the Chinese than Ukraine is to the Russians. I would arm the Taiwanese to the teeth with air and sea defenses. I would put an iron dome over the island. I would sell them all the missiles and jets they need for their defense and for offense against the Chinese mainland. If all this were put in place, the Chinese would have second thoughts about an invasion. And, of course, I would put a 1000 percent tariff on all Chinese goods and services worldwide.

Trump is the ultimate mercantilist. He is an isolationist. He could easily start winding down US military around the world. He would leave the rest of the world to its own devices. He is building a fortress America. To wit: “We will leave you alone so long as you leave us alone. But mess with us and all hell will rain down on you.” We no longer have any allies and precious few friends. If the politicians home and abroad say otherwise, they are lying.

Trump is upending all our trade agreements, our military alliances and pulling the country back within our own borders. It is not just America first. It is America only. If Trump and his minions stay in power going into the future – which I doubt – I can see an America with zero alliances. The rest of the world can have its territorial disputes, fight its wars and have their own alliances. Just leave us out of it. The percent of US trade to GDP is around 25%. I think Trump would be happy to cut that to zero and have America make up the difference. Tell companies that they can only sell in America what they make in America. No more iphones from China. No more avocados from Mexico. No more imported cars and trucks from Canada. No more imported anything. It would make us poorer and would take time. It would be a different America. But theoretically, it could be done.

Quo vadis, Donald?

What’s your month?

At the first of each month, I send my children a text wishing them a happy month. This time it was “Happy March!” with an appropriate emoji. Did you know that March is Women’s History Month and March 8 is International Women’s Day? Are we to say “Happy Women’s Day”? Who knew? I have no idea that the Oracle-that-Names had labeled this month as such. But then March is also National Mustache Month and National Colon Cancer Awareness Month. It got me wondering what the OTN has called the other months. Here is a not so comprehensive list.

January

National Slavery and Human Trafficking Prevention Month (hopefully more than just one month)

National Polka Month

February

Black History Month

American Heart Month

National Bird Feeding Month

March 

National Women’s History Month

National Mustache Month

National Colon Cancer Awareness Month

April

Arab American Heritage Month

Jazz Appreciation Month (I love Be-Bop)

Mathematics Awareness Month (OK what’s 5% of 10,000?)

National Child Abuse Prevention Month

National Poetry Month

Sexual Assault Awareness Month

May

ALS Awareness Month (then why is MLB’s Lou Gehrig Day June 2?)

Asian American and Pacific Islander Heritage Month

Brain Tumor Awareness Month

Haitian Heritage Month

Jewish American Heritage Month

Lyme Disease Awareness Month

National Bike Month

National Pet Month

National Stroke Awareness Month

June

African-American Music Appreciation Month (wasn’t Jazz Appreciation Month in April?)

Caribbean American Heritage Month

Pride Month

July

Harold Black Birthday Awareness Month (just saying)

National Ice Cream Month

August

None! (What’s up with that?) Couldn’t the Oracle-that-Names shift a couple names to August?

September

Suicide Prevention Month

Gospel Music Heritage Month (Amen!)

National African Immigrant Heritage Month (who knew?)

National Bourbon Heritage Month (I don’t think they mean the French dynasty)

National Guide Dog Month

National Hispanic Heritage Month

National Honey Month (Hi Sweetie!)

National Prostate Health Month (May all your problems be behind you)

October

Breast Cancer Awareness Month

Country Music Month

Domestic Violence Awareness Month

Filipino American History Month

Italian-American Heritage Month (Columbus Day is October 13)

National Pizza Month (seems reasonable to me)

Polish American Heritage Month (no National Pierogi Month?)

November

Black Catholic History Month (is there a white Catholic history month?)

COPD Awareness Month

National Novel Writing Month

Native American/Alaska Native Heritage Month

December

None! But why don’t we just label it National Merry Christmas Month?

What no Appalachian Appreciation Month? No Western European Heritage Month? No Men’s Heritage Month? No Hip-Hop Month?  No German Shorthaired Pointer Month? No Chocolate Chocolate Chip Appreciation Month? But I guess some republican (hello Andy Ogles) will propose a Donald J. Trump Month.

Trump and Vance vs Zelenskyy Round One

Trump continues to shake up the status quo. Was anyone surprised that the Trump/Vance versus Zelenskyy meeting went off the rails? The surprise is that it occurred in front of the cameras. I was expecting the usual pleasantries and then for the contentiousness to occur off camera. I thought it a bit unusual that Vance was at the meeting. But perhaps Vance, who has never been a fan of aid to Ukraine, wanted in on the meeting and Trump obliged. Recall that in 2022 Vance said to Steve Bannon “I’ve got to be honest with you, I don’t really care what happens to Ukraine one way or the other.” It seemed that Vance intentionally tried to provoke Zelenskyy. It worked. 

As I said previously, Trump was trying to extort an agreement for the Ukraine to give us their minerals in exchange for the weapons we had given them. Zelenskyy had said that the weapons were a grant rather than an IOU. I thought that Zelenskyy would bargain for a low past payment and payment for future deliveries. Moreover, I had said that Zelenskyy would want a security guarantee from Trump if there was to be a truce with Putin and that Trump would not give it. On that point, I was correct. Why would Zelenskyy stop the war under a condition of no security guarantee? He knows that Putin will not give back the territory seized. He knows that Putin would violate the truce at first opportunity. The Russian occupied territory contains 40 percent of Ukraine’s minerals and that Putin has offered Trump a deal for access to those minerals. I would be surprised if Trump and Putin have not been talking about such a deal.

I didn’t expect an agreement with Zelenskyy because Trump is never going to guarantee Ukraine’s safety and Zelenskyy would be fool to sign an agreement without it. Trump looks down on Zelenskyy. He considers him a two-bit dictator who used to be a poor stand up comedian. Trump wants to extricate America from the war and let the burden fall upon the Europeans. The question is that if we stop arming Ukraine and they start losing the war more quickly than they are losing it now, will Europe commit ground troops to the conflict as some have suggested? Didn’t Macron say “We should not exclude that there might be a need for security that then justifies some elements of deployment”? That would embroil Europe in a major land war. Trump calls it World War III. But can it be a world war if we are sitting on the sidelines? Yes I know that much of Ukraine’s support comes from NATO and if NATO gets involved, the US is supposed to enter on their side. With Trump, that won’t happen. 

Even if Trump agreed to provide security to Ukraine in exchange for its minerals, I would not be shocked if he broke it much like he renegotiated NAFTA and proceeded to break the agreement that he put in its place. If I were Zelenskyy I would be cautious in thinking that Trump can be trusted to keep his word.

It was actually fun watching all the Trumpers falling over themselves defending Trump while all the Trump haters were assailing Trump and Vance. I don’t know about you but I don’t make apologies for the behavior of others. The first polls indicate that Zelenskyy actually increased his support among his countrymen. One said “Our leader, despite the pressure, stands firm in defending the interests of Ukraine and Ukrainians. … We need only a just peace with security guarantees.” Another said that there was “complete disrespect” from the United States in the Oval Office exchange, despite the fact that Ukraine “was the first country that stood up to Russia.” The Ukrainians know that Putin will violate any agreement if he can and cannot be trusted. I think Trump knows that too, but he simply doesn’t care what happens to Ukraine.

On the home front: Lindsey Graham, who never saw a war he didn’t like actually defended Trump. “Somebody asked me, am I embarrassed about Trump. I have never been more proud of the president. I was very proud of JD Vance standing up for our country. We want to be helpful. What I saw in the Oval Office was disrespectful, and I don’t know if we can ever do business with Zelenskyy again. The way he handled the meeting, the way he confronted the president, was just over the top.” Tennessee’s Diane Harshberger said “Zelenskyy could have left the White House today with a peace deal for his country, ending this conflict. Instead, he chose to disrespect our President and nation. Thank you, President Trump and Vice President Vance, for standing up for our country!” Contrast this with democrat senator Sheldon Whitehouse “Our leaders acting like ventriloquist dummies for Putin. Disgusting,” Or democrat Chris Murphy’s “What an utter embarrassment for America.” Here is a quote China’s favorite congressman Eric Swalwell (D-CA) saying Zelenskyy “went into the Oval Office and stood up to Russia’s best negotiators.”

Over in Europe, their leaders are solidly behind Zelensky. European president Ursula von der Leyen posted on X, “Be strong, be brave, be fearless. You are never alone, dear President Zelenskyy. Zelenskyy’s “dignity honors the bravery of the Ukrainian people. We will continue working with you for a just and lasting peace.” Freidrich Merz, the next chancellor of Germany said that “we must never confuse aggressor and victim in this terrible war.” Then there is this, European Union foreign minister Kaja Kallas said that “today it became clear that the free world needs a new leader. It’s up to us, Europeans, to take this challenge.” The free world needs a new leader? Wow!

If Trump’s goal was to splinter our European alliances, then he is succeeding with his tariff war, confrontation with Zelenskyy and JD Vance’s speeches in European castigating our allies. It is clear that Trump wants the Europeans to be on their own, develop their own defense capabilities and wind down US involvement. The EU’s defense budget is about the same as Russia’s despite being a much larger and richer entity. The bully in Washington seems to be forcing them to have to depend more on themselves than on the US to protect themselves from the bully in Moscow.

More thoughts from the classroom

In my first class after coming out of retirement to teach one section of Financial Markets and Institutions, I told the students that I was an unapologetic capitalist. I told them I loved this country and that I was going to work to help them understand how to separate truth from propaganda. I said that they need to examine everything with a skeptical mind. Did they believe in global warming? Why? Did they think America was racist? Why? Did they hate capitalism? Why? How do they define freedom? I told them that yes, my African ancestors went through hell in this country as slaves. But they would have gone through a greater hell had they remained ”free” in Congo under the yoke of Leopold. I said that if you combined the household income from my African countries, Congo, Mali and Cameroon you would be able to buy groceries at Publix for a couple of months and then you would starve. So I am blessed and awfully lucky to be here. I said that I see ads touting pizzas for $9.99 which much of the world would look upon as a luxury. I said would you rather be in Gaza? In Sudan? In South Africa? In Libya? In Russia? In China? In the Congo, heaven’s forbid! Is there anywhere else in the world where you would rather be than here? Why? Is there an economic system you prefer? Why? Aren’t you really lucky in the randomness of your birth? What do you think about Critical Race Theory? Is Trump a bigot for dismantling DEI? What do you think about ESG? Now what evidence do you have to support your opinions?

Of course hardly any have thought about any of this. At this stage of their maturity they have just adopted views and opinions that feel good to them. They do not care about current events. I am trying to get them to at least read the Wall Street Journal daily. Yes I know that the Journal has devolved into being a quasi-leftwing paper but it still reports valuable news and events. In class I was talking about municipal bonds, state income taxes and local property taxes as collateral for certain issues. I said that Ron DeSantis is floating the idea of the state, rather than the municipality, controlling property taxes. I asked a student “Who is Ron DeSantis?” She didn’t know. I then asked the class if they knew to raise their hands. Only 5 raised their hands. I told them that I felt like crying. 

I talked about bond covenants, both affirmative and negative covenants. I talked about ESG and whether the author of an article that the students should have read is correct in classifying ESG as an affirmative covenant. Spoiler alert: I bet that only a couple of students read the article and most have not heard of ESG. We talked about JP Morgan and Blackrock dropping ESG and why I think Larry Fink is the most dangerous person on the planet. BTW, I also mentioned that I was in a high school band with two of the Pips. Only one had heard of the Pips. The others probably thought my two band members were soliciting for Atlanta’s red light ladies.

I have told the students to not believe anything that I say. I don’t want them to blindly nod their heads. I know that what I say will go against most of what they have been fed by their media sources,Tik Tok, teachers K-12 to the university and what feels right. Even after class discussions I don’t know if they really believe that usury laws and minimum wage laws are harmful to the poor. They probably still believe, despite my best efforts, that if you have no usury laws that the poor will be forced to pay predatory rates and if there were no minimum wages, the poor would be forced to work for $2 an hour. I have told them not to believe me. Just prove me wrong and if they do I will adopt their opinion. 

I told them the first day that I tested using short answers, problems and essays. That their grades would be lower than if I used multiple choice/true false but they would learn more. Seven students immediately dropped. After the first exam, 17 students failed to come to the next class to pick up their papers. At the last class there were only 32 students out of the original 59. I actually was a bit depressed that they would opt to run away rather than face the challenge. However, one student came by my office and said that although she had made the lowest grade on the exam than she had ever made, that this was the first exam in four years that tested her knowledge and that she would do better. Yet another student said that I was being unfair in how I tested. I told her that she could drop the course.

But should I get depressed because the students don’t know Ron DeSantis? Should I get depressed because they can’t figure out what 5 percent of $10,000 is? Should I get depressed because they are college seniors and will join the workforce this naïve? Should I get depressed because almost half the class has dropped? I know that once they start working for a living that many will morph into something other than what they are now. But it gives me no small comfort that they are basically clueless. BTW this is nothing new. Before I retired I had a student chide me for expecting him to know stuff. He said “Why should I know geography when I have mapquest?” “Why should I know how to spell when I have spell check?” “Why should I know anything since I can google it?” Why indeed? 

This all, of course, is a result of our dumbing down curricula. Many school systems no longer teach reading, writing and arithmetic and those that do teach it badly. Many systems no longer give grades. I had French and Latin in my segregated high school. How many schools offer Latin? I once had a student say to me “How do you know so much?” I told him that he was not asking the right question.

This is what the liberals have given us. If this were a corporate product, it would be driven out of business and the company would declare bankruptcy. Yet we allow this to happen to our children. Isn’t it time to completely blow up the education-industrial complex?

Resistance is Futile!

Kelly Loeffler, Trump’s nominee to head the Small Business Administration, was in the news. When she showed up at the SBA, she was struck by how few employees were at work in the office. She posted a video of empty cubicles and said that over 90 percent of the employees were absent from the office. Loeffler went on to say that she was fully supportive of Trump’s (actually Elon Musk’s) order to return to work. My question is why couldn’t she have ordered that the workers come back to the office herself? It will be interesting to see how many federal employees quit. Some have whined that their commute will be four hours and they will quit first rather than have to face the DC traffic. Gee, why do you live four hours away from your job in the first place? Have you been on the Beltway? Its brutal almost 24/7. 

During my years in DC I lived in the city and my son went to public schools. But I lived in the Palisades area near Georgetown University and not across the Anacostia River. Certainly, those government employees could have found suitable housing west of Rock Creek Park. But I wager that these liberal democrats are terrified at living in mostly black DC and sending their kids to public schools. Don’t they know that most black DC politicians send their kids to private schools? I am now waiting to see the reaction when Trump – having read my blog? – orders the agencies out of DC. He wants to drain the swamp and that is the way to do it. I bet that at least 50 percent will quit.

Loeffler was confirmed by a vote of 52-46. I went “huh”? Why did 46 democrats vote against her? Jacky Rosen was the only democrat who voted for her. I thought it would be unanimous since she served in the senate from my home state of Georgia. Didn’t Marco Rubio get confirmed unanimously? So why not Loeffler? 

I wondered about the other nominees. Turns out that ten democrats only voted for one nominee (Marco Rubio). Five democrats voted for two. Bernie Sanders is one of these along with Chuck Schumer. The only nominees not to get a single democrat vote were Pete Hegseth, Russell Voight (called the most dangerous nominee), Tulsi Gabbard, RFK, jr and Howard Lutnick. Howard Lutnick? Among the republicans Mitch McConnell voted against three while Susan Collins and Lisa Murkowski voted against two (Hegseth and Kash Patel). Kristin Guillibrand was the senator one who voted against most of the nominees. Four democrats voted for ten of the nominees. They were John Fetterman (no surprise), Maggie Hassan, Rueben Gallego (big surprise) and Jeanne Shaheen (again no surprise). The nominee getting the next most votes was Brooke Rollins with 72-28. Again the opposition was symbolic rather than substantial. Rollins should have been unanimously confirmed.

I don’t know legislative history but I would guess that these are the most “no” votes ever received by a presidential slate of nominees. The open hostility shown to many of these nominees reflected badly on the democrats. Elizabeth Warren, Mazie Hirono and Guillibrand, in the words of my sainted mother, “showed out”. I guess that they and most on their side of the aisle will be in the resistance and seek to block Trump and his cabinet from reforming the government. But as I have said before, just be cool. When the democrats return to the White House, as eventually they will, all will be restored. DEI and trans policies will be resuscitated, funding will be appropriated and the waste and fraud that the democrats love so well will return. But in the meanwhile, to the surprise of many – including me – Trump has gotten all his people across the finish line. The most intriguing nominee is still to come. Its the nominee for secretary of labor, Lori Chavez-DeRemer who was a sop to the Teamsters. My bet is that she will get more democrat votes than any other nominee and have the most republican opposition. She has been voted out of committee with 8 of the 11 democrats surprisingly voting “no”. Those 8 would vote against the Pope if he were a Trump nominee. Rand Paul was the only republican opposed. She will be easily confirmed. To quote the Borg, “Resistance is futile.”

Wither the neocons?

I am certainly no expert on foreign policy. Much of what I think is probably naïve. Yet it seems to me that the hawks are out of favor in this Trump administration. In the first Trump administration several of those close to him were known as neocons: Mike Pence, Nikki Haley, Mike Pompeo, Jim Mattis and John Bolton were prominent in the administration as were those in the hierarchies of the State Department and the Pentagon. Neocons are supposed to believe in market capitalism. But at their core they are interventionalists and want to spread whatever it is they believe in throughout the world and will use military force to do it. Hence, Viet Nam, Kuwait, Iraq and Afghanistan.

Not so much with the second Trump Administration. There is probably a term for the anti-neocon (and no its not “weenie”). Trump this time is a non-interventionist – except for taking over Greenland, seizing the Panama Canal and making Canada the 51^st state. But who is being picky? Trump is seeking to extricate the country from the morasses in Gaza and in the Ukraine. So where are the neocons wanting to keep feeding the war machine? Even Tom Cotton and Lindsey Graham have been uncharacteristically quiet. Instead we have JD Vance, Pete Hegseth and Tulsi Gabbard who certainly is no neocon and said she was fighting against the “Biden-Clinton-neocon-neolib foreign policy.”

In Gaza Trump has proposed ending the Hamas – Israeli War by expelling all the Palestinians, dispersing them throughout the Arab world and taking control of Gaza. He wants to turn it into the “Riviera of the Middle East”. In Ukraine he is extorting an agreement from Zelenskyy to have Ukraine’s minerals pay for US support (something I broached in an earlier blog). Trump wants $500 billion while Zelenskyy says that the US has given them as a grant “only” $100 billion. The actual figure is close to $200 billion. They will agree soon on a figure. But what will that gain Ukraine? Will Trump say that if you sell us your minerals we will protect you from the big bad wolf Putin? Not likely since Trump insists that Ukraine is NATO’s problem. In fact Putin is offering Trump access to Ukraine’s minerals in the territory seized by Russia. I guess that offer is only if Russia is allowed to keep that territory.

Trump is letting Marco Rubio be the point man in the negotiations over Ukraine. Joining Rubio are national security advisor Michael Waltz and Mideast envoy Steven Witkoff. The Russians are there but not the Ukrainians. Of course Trump has called Zelenskyy a two bit comedian and has chided him for taking the wrong side in our presidential election. But still it is Zelenskyy’s country that the US and Russia are haggling over it so shouldn’t they be at the table? NATO is also excluded. This is reminiscent of Yalta where Roosevelt, Churchill and Stalin decided the fate of Germany and Eastern Europe. The Ukrainians hope for a better fate this time rather than being returned to the Russians under whose yoke they have suffered throughout history. Stalin’s Holodomor is Ukraine’s Holocaust. I don’t know the outcome of the negotiations but somehow the O’Jays “Backstabber” keeps playing in my head. BTW, the lead singer of the O’Jays, Eddie Lavert was a cousin of mine.

Zelenskyy has got to be a bit trepidatious. The US voted with Russia, China and Iran on a rather mild resolution saying that Russia invaded Ukraine with “devastating and long-lasting consequences” and called for an early cessation of hostilities. Sounds right to me. So why did the US vote against it if not to throw Zelenskyy a finger and coddle Putin? Of course, Trump had said that Ukraine was responsible for starting the war. Trump’s nominee for Deputy Defense secretary in his congressional hearings hemmed and hawed and refused to say whether Russia started the war. When asked, the nominee Stephen Feinberg, said diplomatically “I’m not privy to the details of the negotiations between Russia and Ukraine, what the sensitivities are, what the president’s trying to accomplish — so I’d be afraid to speak out of turn and undermine that. I do have confidence that the president is very skillful at this, and he’ll find the right way to help the United States.” The pushback came from the democrats on the committee and not the republicans (who are obviously scared of Trump). Hey, republicans, want to revisit your attack on Ketanji Brown Jackson on what’s a woman?

BTW the democrats all of a sudden care about the welfare of the military. They are pretending to be all in a tizzy over possible cuts in defense. Noted defense hawks (not!) Tim Kaine and Jack Reed all of a sudden argue that cuts would undermine national security and cripple the military. What! The democrats said what? Is this the first time this century that democrats actually made clucking noises on protecting national security and funding the military? Again, the power of Trump continues to amaze.