I was looking forward to today’s sell-off as I had a list of companies I wanted to buy. However, the selloff that was anticipated over the weekend didn’t come to pass. The Nasdaq couldn’t even give me a 2% before turning around.
Rumor had it that stocks were going to crater due to Trump implementing 10% tariffs on China and 25% tariffs on both Canada and Mexico. This was on top of hostile rhetoric about invading Panama and Greenland.
We’ve invaded Panama before, so it is not surprising that they were the first country to cave. They announced that Panama would exit China’s Belt and Road initiative, which the press talks about as an evil plot to encircle the world in infrastructure and trade. And maybe it is, but it is also a way for China to use its excess capacity.
China lends money to emerging market countries and then builds them top-notch trains or ports. The problem of course is that half the money is stolen by corrupt bureaucrats and the rest can’t be paid back due to the new infrastructure being unprofitable. They did this in Kenya which has a beautiful train that no one uses.
Trump’s Bluster Works
Meanwhile back at the ranch, after much ado, the Trump administration announced that they would delay imposing tariffs on Mexican goods imported into the U.S. after Mexico said it would rush ten thousand troops to the border to prevent drug trafficking and illegal immigration.
Both President Trump and Mexican President Claudia Sheinbaum separately confirmed on X that the tariffs will be delayed by one month for negotiations.
Trump’s focus on the tariffs is due to the drug fentanyl which in 2021 became the number one killer of Americans between the ages of 18 and 45. The chemicals are made in China and the drug itself makes its way to the U.S. through Mexico and Canada.
Canada is a bigger deal than you would think. A few years ago, Canada deregulated its trucking industry. Historically the handful of Canadian trucking companies were very concerned about smuggling because they didn’t want to be blocked from entering the U.S.
However, since the rule changed in 2019, fake trucking schools and companies with ever-changing names popped up to give unearned licenses to new immigrants with free state money and no oversight. These quickly turned into criminal money laundering and smuggling operations. Their business is fentanyl, and business is good.
Canadian Prime Minister Justin Trudeau has resigned pending the election of a new Prime Minister which I believe will be on March 9. This means that Trudeau has nothing to lose by adding a bit of his own bluster…
CNBC News has reported we are on the brink of a “full-scale trade war between Canada and the U.S.” as Prime Minister Justin Trudeau announced Canada will launch retaliatory tariffs on $155 billion worth of American goods in the coming days. To start, Canada will slap 25 percent tariffs on $30 billion worth of a far-reaching list of American goods coming into Canada as of Tuesday.
Sooner rather than later, this will be sorted out and the market can start to fret about something else entirely.
All the best,
Christian DeHaemer
Outsider Club
Masa What?:
https://www.outsiderclub.com/the-masa-son-top/
What if the Fed Met and No One Showed Up:
https://www.outsiderclub.com/fed-day-and-no-one-cares/
Boomer Time:
https://www.outsiderclub.com/foghat-really/
