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Remember: ‘The Markets Have No Heart’
I've said it a few dozen times before and I'm sure I'll say it at least as many times again going fo
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In 1983 Pres Reagan introduced his Strategic Defense Initiative, AKA “Star Wars” that would protect us from everything nasty. Never really started. Protected nothing. Then there was this fence on our southern border. Part of it was built but not much protection. Briefly mentioned a few months ago. Don’t get much protection from the red state guys no matter how much they promise. No Snap any more, not much healthcare left. No lower food or drug prices. Inflation still hanging around 4%. Data has been cancelled so we won’t see how bad things are. Ice is shooting our folks on any pretext. We are being protected from finding out what Trump and Epstein got up to back in the day (before Trump had him killed?) We will never see the promised papers. [Trump and Bondi??}
I’m grateful for this piece. I’ve largely stayed the course throughout Trump’s first year, but the start to 2026 has left me rattled and I have struggled to maintain my equity exposure.
The only thing that’s stopped me from taking more chips off the table is that I cannot think of any alternative that doesn’t go down with the U.S. I did open a gold position, but like you said, it’s mostly impossible to hedge the end of Pax Americana.
In 1940 the fall of France forced the US to stop outsourcing its security to Europe (namely Britain and France). Trump seems to be the equivalent of that 1940 moment where Europe will need to spend to handle security (and potentially create their own tech) in-continent so to speak. European equities had a moment a year ago, but think there’s room to run.
The Russell 2K is up 7.5% to start the year.
I believe you nailed it, as the U.S. dis-inegrates to squabbling states and sectors like Europe.