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By request, I am writing my Control Panel posts on Shrewd'm because the links don't function if I post on TMF and then copy/paste the entire post. The downside to Shrewd'm is that, like the old TMF boards, it's not possible to paste screen shots. So I will post here first and then copy to TMF. If there are visuals I will post them there. Trying to satisfy everyone. [sigh]

Although we banned partisan politics on METAR many years ago to prevent squabbling that only annoys while being worthless vis-a-vis investing, President Trump's daily deep meddling in economic affairs makes this impossible to avoid.

In less than a year Trump has transitioned the U.S. government from a democracy to an authoritarian system where one mercurial psychopath's whims to unilaterally impose massive tariffs, buy stakes in public companies on behalf of the government and pressure the Federal Reserve to cut interest rates despite rising inflation affects trillions of dollars in the economy and asset markets.

https://reason.com/2025/08/15/intel-is-reportedly-...


Intel Is Reportedly the Latest Company Trump Wants a Piece Of
Since returning to office in January, Trump has floated several deals that would involve the feds taking a piece of an American company.

by Joe Lancaster, reason.com, 8.15.2025

After meeting with the CEO of a major tech firm [Intel] this week, President Donald Trump is apparently set to demand a piece of the company. Unfortunately, it's hardly the first time....

Last week, Trump agreed to exempt tech firms like Nvidia and Advanced Micro Devices from export controls and allow them to sell semiconductor chips to China, after a meeting with Nvidia CEO Jensen Huang. In exchange, the companies agreed to forfeit 15 percent of the revenues from those sales to the government.

MP Materials, which operates the only mine for rare earth minerals in the country, announced in July that the U.S. Department of Defense had agreed to "a multibillion-dollar package of investments and long-term commitments," including a $400 million stock investment that would see the Pentagon "become the Company's largest shareholder."...

President Donald Trump will personally control the so-called 'golden share' that his administration has forced U.S. Steel to accept as part of the terms of a deal" to be acquired by Nippon Steel... [end quote]

On Friday, Trump met in Alaska (a U.S. state which Russia claimed in the 19th century) with Russian Vladimir Putin to discuss the fate of Ukraine. These two authoritarians enjoyed their imperialistic chitchat without the acquiescence of Ukraine.

https://www.nytimes.com/live/2025/08/17/us/trump-n...
European leaders said Sunday (8/17/2025) that they will join President Volodymyr Zelensky of Ukraine on Monday when he meets with President Trump at the White House, as they strive to present a united front against Russia and avoid being sidelined in talks aimed at ending the war in Ukraine.

German Chancellor Friedrich Merz, President Emmanuel Macron of France and Prime Minister Keir Starmer of Britain, were among the leaders who announced that they will join Mr. Zelensky in Washington. Giorgia Meloni, Italy’s prime minister, will also join, as will NATO’s secretary general, Mark Rutte, and Ursula von der Leyen, the president of the European Union’s executive arm.

Monday’s meeting at the White House comes after talks in Alaska between Mr. Trump and President Vladimir V. Putin of Russia ended inconclusively, and amid concerns in Europe that Mr. Trump’s thinking may have tilted toward Russia’s position.... [end quote]

I'm sure that Trump's ego will get a boost from all these leaders coming to him, hat in hand, begging to know what Trump will say. That isn't the same as knowing what Trump will do because he generally doesn't do what he says he will and even then he changes his mind. Trump never had any intention of defending Ukraine. He is isolationist so any suggestion that he may put American boots on the ground would go against everything he ever said.

The entire world order has shifted from the post-World War 2 rule of law and respect for national orders back to the 19th century rule of imperialist conquest. I'm sure that China's President Xi is watching with great interest as the Middle Kingdom strategizes to resorb Taiwan.

The asset markets completely ignored these alarming geopolitical trend changes.

Trump's major economic moves -- imposing tariffs and removing immigrants -- are both inflationary. These will take time to bite since importers built up inventory before the tariffs were imposed. Now the inventories are being drawn down and inflation is beginning to rise. The Consumer Price Index, Producer Price Index and Import/Export Price Index all rose in July.

The Atlanta Fed's Underlying Inflation Dashboard was in the red all the way down with CPI, PCI and sticky inflation all more than 0.5% above the Fed's goal of 2.0%. The Cleveland Fed's Inflation Nowcast Quarterly annualized percent change concurs.

Quarter	   CPI	   Core CPI	PCE	Core PCE	Updated
2025:Q3	   2.85	   3.11	        2.77	3.02	        08/15

Despite high inflation the options market gives a 92% probability of the Fed cutting the fed funds rate in September. One of the Fed governors quit and Trump appointed a stooge which makes 3 Trump appointees on the FOMC. Fed Chair Jerome Powell is a Trump appointee but fortunately anything but a stooge.

Trump fired the head of the BLS on the basis of lower-than-expected employment numbers. Since the BLS reports inflation as well as employment numbers it's impossible to say whether those numbers can be trusted in the future. Trump appointed a totally unqualified stooge to head the BLS. Maybe the Senate won't approve him. The acting head is experienced and highly qualified but temporary.

https://www.nytimes.com/2025/08/12/business/trump-...

Trump’s Pick to Lead Labor Data Agency Adds to Fears of Political Interference

Economists on the left and right criticized E.J. Antoni for misunderstanding the data he would now oversee. [end quote]

The markets ignored all of this and partied on. The Price-to- earnings ratio based on average inflation-adjusted earnings from the previous 10 years, known as the Cyclically Adjusted PE Ratio (CAPE Ratio), is 38 compared with its long-term median of 16.

The stock market continued its upward trend. VIX was low though bullish percent dropped. The trade is risk-on since stocks and junk bonds are rising faster than the 10 year U.S. Treasury. The Fear & Greed Index is in Greed.

USD, oil and gold are stable in their channels. Copper dropped after Trump announced a 50% tariff and stayed down. Natgas is falling.

The Treasury yield curve is positively sloped over the intermediate durations. The 10YT is stable in its channel.

The Chicago Fed’s National Financial Conditions Index (NFCI), which provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets, and the traditional and “shadow” banking systems, is very loose. This is providing a tsunami of money to borrow which underpins the asset markets. Debit Balances in Customers' Securities Margin Accounts is over $1 Trillion for the first time.

The METAR for next week is sunny.

Wendy


https://www.bls.gov/charts/
https://www.atlantafed.org/research/inflationproje...
https://www.clevelandfed.org/indicators-and-data/i...
https://www.cmegroup.com/markets/interest-rates/cm...

https://stockcharts.com/freecharts/candleglance.ht...
https://stockcharts.com/freecharts/candleglance.ht...
https://stockcharts.com/freecharts/candleglance.ht...
https://stockcharts.com/freecharts/yieldcurve.php
https://www.cnn.com/markets/fear-and-greed
https://www.multpl.com/shiller-pe
https://www.chicagofed.org/research/data/nfci/curr...
https://www.finra.org/rules-guidance/key-topics/ma...

I keep wondering when the first shareholder lawsuit will be filed against a company's management for granting benefits to Trump or the government that should be going to shareholders. I don't understand what the legal basis is for extorting 15% of sales of some types of chips to China.

I don't understand what the legal basis is for extorting 15% of sales of some types of chips to China.

The rationale is not too hard to understand. Supposedly, the sales to be permitted are of an older/previous chip--not the most current "hot" chip. So, this would be sales that would otherwise not be allowed to happen (per the US govt). Of course, that means the now-permitted chip sales *would/could* be used against the US (in weapons, etc). So Spankee's idiocy is on public display for all to see. He is willing to sacrifice US security for personal political gain. His expectation is nothing will happen--at least, NOT WHILE HE IS IN OFFICE. Once he is out, he doesn't give a crap. It is then somebody else's problem.

The rationale is not too hard to understand. Supposedly, the sales to be permitted are of an older/previous chip--not the most current "hot" chip. So, this would be sales that would otherwise not be allowed to happen (per the US govt). Of course, that means the now-permitted chip sales *would/could* be used against the US (in weapons, etc). So Spankee's idiocy is on public display for all to see. He is willing to sacrifice US security for personal political gain. His expectation is nothing will happen--at least, NOT WHILE HE IS IN OFFICE. Once he is out, he doesn't give a crap. It is then somebody else's problem.

Forget about the legal basis, the policy could be counterproductive. This policy is likely to accelerate investment in chips within China, creating more competition and in the long term creating an environment for Chinese innovation that wouldn't be there if they could simply continue to import chips.

I understand there is some potential short term military benefit, but I think this is pretty limited...

tecmo
...

There are more engineering students in China than there are university students in the US. The country with the most engineers is likely to eventually win.

Jeff

I have always been, and continue to be, a partisan for the ideal of democracy. It seemed clear to me that governance by consent of the people is the system most likely to elevate all of humanity.

We have run, though, into an almost insurmountable obstacle; human nature. Now, China is in ascendance, and western democracy, at least in the US, is floundering. The only reason I can fathom for this cruel twist of history, is not that China is less corrupt, but that they keep the corruption better contained.

Corruption in our country is rampant.

fd

The biggest part of our corruption is the corporate tax rate. We are made and broken on that policy alone.

Forget about the legal basis, the policy could be counterproductive. This policy is likely to accelerate investment in chips within China, creating more competition and, in the long term, creating an environment for Chinese innovation that wouldn't be there if they could simply continue to import chips.

That could happen, but it is capital-intensive, and China probably can not go profitably. China is in an economic wilderness, going towards supply-side econ, but the EU is moving into supply-side econ faster and becoming the next tech hub. The EU has a lot more AI data centers than anywhere else. Then the US, and then China.

The issue with AI chips is uselessness. Making the chips and selling them is very profitable. But using them is not profitable. AI is not all it's cracked up to be.

The tax on exports is unconstitutional. That battle will tear down this tax. Words are cheap, and we are hearing plenty of them.

I have mixed emotions on "some" of the items mentioned having both a national security and business background.

The second part of me is in alignment with the sentiments shared. The first part of me diverges. The fact is Covid was a major wake-up call that made it painfully aware to anyone paying attention how vulnerable the US is now economically and strategically. Economics is not everything. There are other considerations like being able to defend yourself and produce oh say important things like medicine and protecting oneself from economic extortion and thievery.

I'd get at the above differently in many ways, but I have zero problem slapping very large tariffs on items produced uneconomically due large state subsidization designed solely to establish market dominance by crushing companies playing by the normal capitalist book.

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