July 2
US President Donald Trump has made no secret of his disdain for Fed Chair Jerome Powell, whom he has repeatedly criticized for not cutting interest rates. But his plan to name Powell’s successor ten months early risks discrediting his own nominee, undermining confidence in the Fed, and destabilizing the economy.
But Trump is right to lift restrictions on Syria. Bring Syria into the western orbit. Kick Russia and Iran out of Syria.
Congressional Republicans are playing hide and seek with how their Reconciliation bill will affect the deficit. The Republican members of Congress can shovel BS about the deficit and the bill, but the reality is that the bill will increase the deficit by up to $3.9 trillion over a 10 year period.
https://www.crfb.org/blogs/cbo-score-shows-senate-obbba-adds-over-39-trillion-debt
Higher deficits raise interest rates and crowd out productive private investment.
For now the market is shrugging about deficits but at some point in the future, the bill will come due. The reckoning will be painful.
Taxes must increase on everyone and entitlements must be reformed.
The first half of 2025 was the best period for Treasuries since 2020. With inflation at around 2.5%, Treasuries across the yield curve are attractive.
https://www.barrons.com/articles/bond-market-yields-inflation-tariffs-1850a1e1
I am not a believer in Crypto but Robin Hood is a great derivative play on the crypto asset class. See below.
Because of capital deregulation, money flows into the biggest banks are the strongest in 9 years. See below.
SW Florida is ground zero for the intersection of hurricanes and soaring home owners insurance premiums.
Home prices for Cape Coral-Fort Myers have tumbled 11% in the two years through May, the most of any major metro area, according to an analysis for The Wall Street Journal by the listing site Homes.com. See WSJ.
Markets and Stocks
Equities go up over time but at the moment, U.S. equities are a little expensive. Invest in high quality stocks, don’t speculate and don’t trade.
Robinhood is now offering tokenized shares of OpenAI and SpaceX to users in Europe, sending shares up 10% to a new all-time high.
This marks the first time Robinhood has tokenized private companies, enabled by the EU’s looser investor restrictions.
While U.S. users can’t access tokenized equity yet, Robinhood has reintroduced crypto staking — previously blocked by the SEC — for Ethereum and Solana. See CNBC.
Micron remains a great investment. It is the world leader in SOCAMM memory modules, which are used in Nvidia’s most advanced GPU platforms.
Lower power, higher performance memory innovation for AI data centers
Micron SOCAMM is the industry’s first data center class modular form factor low-power memory module designed specifically for the AI data center. Featuring Micron’s industry-leading LPDDR5X combined with CAMM memory modules, this next generation of memory sets the stage for more efficient AI data centers.
https://www.micron.com/products/memory/lpddr-modules/socamm
The largest banks are a bit extended. They remain attractive but they would not be my first choice for new money.
Amazon has deployed one million robots, almost as many machines as employees in its warehouses. AI and robotics will save the United States from the demographic doom loop.
https://www.wsj.com/tech/amazon-warehouse-robots-automation-942b814f
Economics
In 1830 in the U.S. firewood accounted for 30% GDP.
https://www.nber.org/papers/w33974
Parenting matters. Does giving parents more money improve parenting?
This chapter argues that parenting choices are a central force in the joint evolution of culture and economic outcomes.
We present a framework in which parents-motivated by both their children’s future success and their own normative beliefs-choose parenting styles and transmit cultural traits responding to economic incentives.
Values such as work ethic, patience, and religiosity are more likely to be instilled when their anticipated returns, economic or otherwise, are high.
The interaction between parenting and economic conditions gives rise to endogenous cultural and economic stratification.
We extend the model to include residential sorting and social interactions, showing how neighborhood choice reinforces disparities in trust and human capital.
Empirical evidence from the World Values Survey supports the model’s key predictions. We conclude by highlighting open questions at the intersection of parenting, culture, and inequality.
https://www.nber.org/papers/w33963
Parents who believe that they are victims of society are unlikely to value the work ethic, deferred gratification and positive cultural values.
Politics
China is an enemy of the United States. American business needs to wake up about that. I support the provision of the Reconciliation bill which would include a new excise tax on wind and solar projects with certain Chinese components.
China is holding the United States hostage on rare earths. Congress should ensure that China does not gain leverage on power transmission.