ElFrefro

@TMTLongShort Haven't confiscated a single ship yet... what are they waiting for?

Unsanctioning Iranian oil doesn’t mean letting the IRGC collect dollars it means seal team six taking possession of Iranian tankers at sea. I thought that was obvious.

@jawillick @TMTLongShort how does this type of thing fit into your vision?

First a THAAD system pulled from South Korea, now Marines pulled from Japan — both to Middle East. I have seen arguments that Trump is going to war in Iran to deter China. Concretely, the East Asia power balance is shifting in China's favor every day. wsj.com/livecoverage/u…

I remember Harald Malmgren (may he RIP) once told me a story he heard personally from young Putin whom he met in St. Petersburg as part of US Delegation at the beginning of the 90s. According to this story Putin told Harald, when major disputes occurred in Russia, the two sides would send their representatives to a dinner. They would be heavily armed. Facing the serious risk of lethal outcome, they usually could find a mutually acceptable solution to avoid death. According to Harald, Putin who at that time hadn’t been in power yet, told him this story to make the point that fear always provides the catalyst for common sense. Trump intuitively knew that he could only deal with Putin and Xi by instilling genuine fear. For this reason, he put his guns on the table.

Some people suggest that Trump's China strategy is hard to spot and foreign officials can't detect it. I don’t know what they’re looking at, because the strategy has been stated openly and repeatedly. It’s not subtle. It’s a full stack industrial plan to unwind US dependence on China across every chokepoint supply chain, starting with critical minerals and rare earths. Read the administration’s speeches from the Critical Minerals Ministerial last month because it makes the logic explicit. The minerals market isn't a normal market. It's been systematically distorted by subsidies for years. Projects get years into development, financing nearly in place, and then foreign supply floods in, prices collapse, and the project dies. It's a price weapon. And as long as that weapon exists, private capital can't solve the problem, no investor will commit to a decade long project if China can always dump and destroy your economics. So the administration is doing the only thing that actually works. Direct investment, offtakes, stockpiles, and enforceable price floors. Public balance sheets underwriting long duration capacity. A preferential trade zone where strategic dumping becomes a sanctionable offense. A national strategic reserve as an offtake signal so projects can finally clear financing. They announced two primary rare earth smelters last month, the first built in this country since 1980. Also read Jamieson Greer's Davos speech to see the intellectual logic underneath it all. He frames the entire strategy as a return to the American System (Hamilton, Clay, Carey, Lincoln) and argues that hyperglobalization was the historical aberration. Every major industrial power learned the Hamiltonian playbook from us and never stopped using it. We forgot it for thirty years but we're finally remembering. Countering China and reducing US supply chain dependence isnt just a part of the administrations economic and security strategy it IS the strategy. When you realize that a lot of things that look like noise stop looking like noise and you can see it fits into a coherent strategy. The administration is instituting an investment growth model, which is a set of policies that incentivizes production relative to consumption, and ensures that higher savings (savings = production - consumption) gets recycled into fixed investment. One of those tools are tariffs. And every investment growth model in history has used them. Tariffs are certainly disruptive, but that disruption serves the vital purpose of forcing companies to rebuild resilient, secure supply chains before a crisis makes orderly transition impossible. The administration's defense reindustrialization push is the capex engine. It forces factories to get built, it anchors demand, and it creates export demand from allies who are rearming. They are also attempting to redesign the global trading and capital flow system that has been defined by mercantilist policies and created structural capital inflows into dollar assets that kept currencies from clearing properly, and resulted in persistent current account deficits and industrial hollowing out. The entire stablecoin push is an attempt to build a payments rail so they can price foreign hoarding of US assets without blowing up the dollar payments system. The goal is to keep the dollar as the world's transaction rail without agreeing to absorb unlimited foreign savings into Treasuries, and the structural trade deficit that comes attached. Stablecoins separate these two functions. Dollar denominated tokens circulate globally for payments but carry no yield and accumulate no claims on US assets. So the dollar maintains its position as a medium of exchange but without the burden of being the financial asset held to balance trade. The fight over Fed comes back to China as well. The entire point is to coordinate monetary and fiscal policy. You can’t run this shift if monetary policy is acting like it operates in a vacuum while fiscal and industrial policy are trying to redirect the economy’s demand mix. Meanwhile they need Fed cooperation on financial deregulation in order to free private balance sheets help fund the buildout. This isn’t just an economic program. The administration continuously touts the slogan that economic security is national security. The entire US military strategy is organized around the central objective of countering China and denying them regional hegemony in Asia. That requires allies who can defend their own regions, a home base that isn't strategically exposed, and the industrial depth to sustain a long conflict. Defense and economic vulnerability aren’t separate problems. They’re the same problem viewed from two angles. The US is strategically vulnerable because it offshored the upstream capacity that underwrites both economic resilience and military power. The administration is moving to rectify that across every dimension simultaneously. Every piece points at the same objective. Rebuild the defense industrial base so that deterrence rests on actual production capacity, not platforms we can't replace. Massive military buildout. Make long duration projects financeable through price support and demand guarantees. Shift spending from consumption to investment. Shrink the external deficit. Eliminate China's leverage over the chokepoints. This is an economic and military reorganization two centuries in the making that was interrupted for thirty years and is now being resumed. The China strategy is the industrial policy is the defense strategy. If you can’t detect the strategy, that says more about you than it does about the administration.

@GoForGrubes2 anyway to DM with you?

@TheMichaelEvery Let's assume we're able to re industrialize and lower our trade deficits, wouldn't that lead to less dollars circulating abroad/rally for the USD which would crush foreign nations and pressure the system itself?

So, what many fail to understand is that our economic interests are what keep things peaceful. But keeping the peace does not supercede domestic wellbeing. 🇺🇸The US must derisk supply chains, raise quality of life and ensure security for Americans. 🇨🇳China has the same interests, and Chinese leaders know they dominate - too much - certain aspects of global supply chains. Many understand their centrality will erode but they don't want it to happen so quickly that it hurts their economy. 🇨🇳I've never met a Chinese bureaucrat who wanted war with the US. 🇺🇸I've also never met anyone at DoD who wanted war with China. ➡️Amateurs on both sides will say this is total victory for their side. It's not. For either side. ✅This is a short term agreement. Much of this will not be delivered. 🇨🇳China will play along until Spring Festival then deviate from agreements 🇺🇸The US will delay compliance on key items until after CNY to ensure some soybean buys, fentanyl precursor chemical factories are closed, etc. 😐It's the best we can hope for. That's real diplomacy. Nobody is happy, everyone is wary and each side sells it to the home audience as victory.

@michaeljmcnair @TheMichaelEvery @vtchakarova

A theory on why the US is surging military forces and focus around Venezuela. The drug interdiction story doesn’t even begin to hold water. We do not fly F-35s to Puerto Rico and move an ARG/MEU for cocaine skiffs, we have not surged comparable force for larger narcotics flows elsewhere, and reporting on the draft National Defense Strategy says the homeland and Western Hemisphere are being elevated. That is the posture you would choose if you were worried about a nearby maritime denial threat, like Venezuela being used as a launch pad for undersea warfare. That lens fits the visible moves far better than cocaine skiffs. I have no inside information and I do not want to be a hammer looking for a nail just because I have been writing and researching about autonomous underwater vehicles (AUV). But the AUV explanation fits the facts and should be taken seriously. Venezuela and AUVs could be to the second Cold War what Cuba and ballistic missiles were to the first. AUVs are game changing (see my previous posts linked in this thread for an explanation). They are relatively cheap, silent, and nearly impossible to find. They act autonomously and can wait in preloaded kill boxes for weeks. A small number can shut key lanes into the Gulf and East Coast, threaten or cut undersea cables, spike war risk premiums, and paralyze commerce. For pennies on the dollar they create coercive leverage over the US economy and our ability to project power. Venezuela is especially attractive for adversaries because it sits beside choke points that funnel traffic to the US market, it has ports and fishing fleets that provide plausible deniability to launch AUVs, it is close to multiple cable approaches, and Caracas already works with Moscow and Beijing. The popular claim that this is about oil also doesn’t make sense. Any serious pressure on Maduro would likely reduce Venezuelan supply in the near term and lift prices prior to mid-terms. The long-run payoff from rehabilitating PDVSA would take years and lands after Trump’s term is over. IMO, oil is the lazy explanation. But if this AUV thesis is right, the odds that the Washington will accept anything short of regime change fall sharply, and the willingness to use military force to achieve it rises exponentially. A hostile AUV launch pad operating at the base of critical Gulf Coast shipping lanes and cable approaches is not something a US administration can tolerate. I could be wrong. But if you ask, what is the cheapest and most effective way for our adversaries to pressure the US from nearby waters, launching AUVs out of Venezuela is the obvious answer. I believe it explains the recent actions far better than drugs or oil.

In the last few years we've seen: - The plot to kidnap Gretchen Whitmer - The Storming of the Capitol and pipe bombs left at the RNC and DNC - The break-in to kidnap Nancy Pelosi and the brutal on Paul Pelosi - Multiple assassination attempts against Trump - The assassination of Minnesota House Speaker Melissa Hortman and her husband and the shooting of on State Senator John Hoffman and his wife - Luigi Mangione's assassination of Brian Thompson - The assassination of Charlie Kirk Political violence is contagious. It is spreading. It is not confined to one side or belief system. It should terrify us all. The foundation of a free society is the ability to participate in it without fear of violence. Political violence is always an attack against us all. You have to be so blind not to see that.

@Aureliusltd28 global dollar shortage

@UrbanKaoboy @JPHusker_ Curious what your perspective is on the affordability issue of the Puerto Rican consumer if the settlement is approved? I believe they were staring at an additional 6cents per KWH in an already outrageously expensive electricity costs

@JPHusker_ is absolutely correct about this. Bienenstock tried to sandbag Bondholder recoveries in the GM Restructuring of 2009, which I participated in. Bondholders then convinced the Obama Admin that a prolonged bankruptcy would be to the detriment of the nation and successfully negotiated for a higher cash payout + a significantly higher amount of warrants in Restructured GM. The Trump Admin and the Puerto Rico gov must similarly realize that prolonged PREPA bankruptcy will be to the detriment of the people of PR and to the US Taxpayer. PREPA Bondholders can easily be satiated with cash on hand plus a meaningful CVI (the analog to warrants) on restructured PREPA. It incentivizes all stakeholders on the future success and viability of PREPA and the Commonwealth.

Re: Investing - $MBI: Will Lightning Strike a Third Time? Lightning struck the same place twice in MBI in 2023/2024 and may yet strike a third time. This is a live case study on Restructurings, Creditor-On-Creditor Violence, and “Event Optionality." urbankaoboy.com/p/re-investing…

Pretty sure Trump's cel hasnt gotten this many calls since Jan 6

@ekwufinance @UrbanKaoboy add to that labor supply shortage with the push to jail or deport illegal immigrants.

Three things: 1) Why don’t you think deficits will drive inflation higher? 2) Oil prices at these levels are already bad for U.S. shale. Any attempt to push them even lower could lead to a future price spike. 3) Why don’t you think a top-down policy approach would be inflationary? Reshoring would: - Require enormous CapEx - Increase production costs I’m just having a hard time seeing how we don’t end up with elevated inflation in the years ahead.

Musings of the Day, 5/13/25: As I’ve been postulating, these STNT (Short Term Negotiation Tool) Tariffs have dropped significantly. What I am watching for is where we will come out on what I call LTIM (Long Term Incentive Modifier) Tariffs on Critical Path Industries. I am far less sanguine on an easy solution there, since the US needs to decouple in those areas from a National Security standpoint (think Economic Statecraft vs. Economic Policy) and China wants to climb up the Value Chain and keep its restive masses employed. The only LT Equilibrium where both the US and China achieve some measure of Autarky is a world where the US adopts more Top-Down Economic Statecraft to be less critically dependent on China and China adopts more Bottom-Up Consumer-Driven policies to absorb the goods from their Runaway Assembly Line.

“Nearly all men can stand adversity, but if you want to test a man’s character, give him power.” – Abraham Lincoln

Whether you think JPOW is political or not is moot; the fact is that this guy is always fighting the last battle and WRONG. Consider his track record: In late 2021, he was buying tens of billions of MBS even as Risk Assets were soaring and speculation was rampant due to excess liquidity (remember NFTs?). In 2022, he led Team Transitory to be late in hiking, allowing CPI to hit +9%. In late 2023, well before there was any sign of slowdown, he does a Rhetorical Pivot which caused a resurgence in Inflation, and then Pusillanimous Powell proceeds with an aggressive Premature Pivot — again with sticky Core Inflation and Full Employment. Now in 2025, even as Supercore is plummeting and there are signs of COVID-style drop offs in economic activity due to the Tariff War, Pusillanimous Powell decides to morph into Parsimonious Powell? Again, I value Fed Independence, but I value Fed COMPETENCE more. JPOW = Master of Skating Where The Puck WAS…5 Minutes ago

“The world sells distractions at the cost of your life’s purpose – the wise don’t shop in this market.” #foraconsciousexperience

At some point, and I think that point is very soon, America is going to deeply regret putting short term financial gain ahead of long term community values and national security

So now the left want to buy tanks, the right want to buy EVs, the UK Labour govt is pro-austerity, the Austrians have an affinity for QE, the Chinese are looking to boost consumption & the Germans are fiscal keynesians. And Trump took office less than two months ago

Need a fresh reason to spread kindness? How about my 50th birthday?! In honor of my 50th birthday this month, I’m inviting the X community to participate in spreading acts of kindness. Buy someone a coffee. Write a note. Give to a charity. Why the X community? Because I personally have experienced growth in my craft, kindness from strangers, and friendship with folks I would have never known without this platform. I approach my 50th with a deep sense of gratitude. I would love to see 50 acts of kindness as a result of this invitation. If you feel led, drop it in the comments below. If you’re wondering my favorite cause, look to the students at North Central University! No obligation to give but I will link my giving page in the next post. As a professor, advisor, and mentor to many first generation students, I can personally attest to how $500 to $1,000 can be the literal make or break financial moment for students to continue their education. They borrow textbooks, use friends’ computers, and often take the lowest possible meal plan just to make ends meet. A small gift goes far in being the difference between stopping short of the goal to finishing the journey.

Let’s urge @WhiteHouse & key decision-makers to back #USSteel’s partnership with Nippon Steel. This deal means stronger job, economic, & national security. Don’t let this critical opportunity slip away. This is the #BestDealForUSSteel! Take action 📣: bestdealuss.quorum.us/campaign/Suppo…