Trump Week 2

Anguishing Evidence

On multiple occasions, we have hypothesized about the potential ramifications of meritocracy's demise. Hiring and promoting based on DEI/Woke priorities, instead of capabilities, is to anyone with common sense not only unfair and stupid, it can be downright lethal. One of the examples used, in addition to engineers building bridges and neurosurgeons was, ironically, Air Traffic controllers. When lives are at stake, only the highest standards must apply.

Now 64 individuals have lost their lives in the horrific crash over Reagan International on Tuesday night. Early evidence suggests the two may be related. Although reports are still filtering in, it appears clear that the control tower was short staff big time when the two planes collided. Staffing at Reagan at the time of the crash called for 30 Air traffic Controllers on duty. There were 19 - down almost 40%. Not sure if the two are connected, but with a billions of planes landing and taking off, it can't be a good thing if 2 out of every 5 controllers are MIA.

It is widely known that the job of ATF is hugely stressful. It requires not only intellect, technological dexterity and multiprocessing skills, it requires a certain type of personality and poise. It is well documented that, despite major shortages, over 1000 candidates were turned down starting in the Obama administration because they were white.

A lawsuit uncovered FAA discrimination in hiring by rejecting over 1,000 qualified air traffic controller applicants based on race.

• Obama-era FAA implemented biographical test favoring diversity over skills, ignored highly qualified candidates from CTI program. CTI is an FAA program that produces air traffic controllers.

• Minority candidates given unfair advantage through "buzz words" and irrelevant questions, while qualified CTI graduates were passed over.

A class-action lawsuit by the Mountain States Legal Foundation has found a substantial amount of documents showing discriminatory hiring practices by the Obama-era Federal Aviation Administration (FAA) initiative, which rejected qualified air traffic controllers based solely on race.

The FAA was under pressure to diversify the overwhelmingly white workforce and began screening applicants using a biographical test. Only after passing this test were they tested on competency.

Hopefully, we won't have to wait years for a watered down explanation of what happened here. I'm sure Trump will have fixed this problem long before. But not soon enough for the 64 souls on board.

Had another troubling thought. You don't think this was a CRINK hack, do you?

The AI Revolution

Disclaimer: this is far from my wheelhouse. I'm certain that numerous CME readers have far more knowledge than I. That being the case, please pass on all corrections deemed necessary.

Artificial Intelligence is the new big thing in tech. Billions (trillions) are being spent to develop this capability. Most major tech players are working 24/7 to carve out their niche. Some hope to dominate. The goal is not only to enhance our knowledge acquisition and decision-making, but to replace great portions of the human necessity. Both participants and onlookers share two emotions. The first is wonder and enthusiasm. Heard someone say AI can help cure cancer. The second is fear. What if AI starts making decisions and spawning actions on its own? What if these are dangerous or even deadly? Both reactions seem legit.

So what is this thing called AI? Well, to my plebian comprehension, it is the ability to access all the information, facts and data known to mankind in a millisecond. Then sort through and select the most relevant information based on the question at hand. Then make a decision or take an action - maybe without human intervention. Think of it as being able to read all the words in all the books in all the libraries of the world in seconds.

So what does AI involve? Software - so functions can be directed and users can access. Insanely powerful chips, which are monstrously expensive and up until this week considered the exclusive domain of chipmaker Nvidia (hottest stock on the Street with market cap - $3 trillion). Massive datacenters and electricity, lots and lots of electricity.

Major players include:

1. Microsoft (NASDAQ: MSFT);

2. Apple (NASDAQ: AAPL);

3. Alphabet (NASDAQ: GOOGL);

4. NVIDIA Corporation (NASDAQ: NVDA);

5. Amazon (NASDAQ: AMZN);

6. Meta (NASDAQ: META);

7. Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM);

8. Broadcom (NASDAQ: AVGO);

9. Oracle Corporation (NYSE: ORCL);

10. Salesforce (NYSE: CRM).

Until this week John Q public and the Biden administration were under the impression the US was in a preeminent position to exploit the potential of this amazing technology. Even Biden understood the significance of advantage in this domain. Accordingly, we restricted the ability of Nvidia to sell its highest power chips to China. They were, however, allowed to offer a less powerful, second rate version. A workaround, if you will. So, not only are a version of our super chips being sold to our #1 enemy, they are manufactured in Taiwan by TSM. Talk about strategic significance.

So what happened this week to change the landscape? In a word - DeepSeek. DeepSeek is a Chinese start up in the AI space. It offers capability now thought comparable to Open AI (Chat GPT). You may ask, and rightly, how could this happen when only we supposedly have access to the super chips, which robust AI demands?

Seems we don't really know. Did the DeepSeek create software that uses the theoretically less powerful chips Nvidia sold them as powerfully as the high powered ones we use? Did they create or have access to much less expensive chips that are as powerful as Nvidia's top shelf ones? Did they actually get their hands on the top shelf Nvidia chips somehow? Is it something else?

Lots of opinions floating about. Be interesting to learn what the real situation is - if we ever do.

Lots of knowitalls are saying the Disrupter (Nvidia) has been Disrupted.

Bottom line is this sounds like Tic Tok. Will China take the lead here too? Some are calling DeepSeek a "Sputnik moment". For those too young to remember that was when the Russia gave the US a kick in teeth by launching the "first ever" Earth satellite. October 1957. Knocked us right off our perch as numero uno.

Apparently the Tech biggies have pledged $500 billion to a new AI initiative they call Stargate. Looks like we'll need all of it.

NJ's Drones

Took Trump not a week to figure out These are FAA test drones. Properly authorized, not a threat. For weeks, Biden said he didn't know.

Better to Do a 100...

things and get 95 right than do 10 and get them all right. It is inevitable, when you are turning a battleship around and taking hundreds and hundreds of decisions, that not all will turn out to be spot on. Some will retracted and others modified. Some will provide Schumer, The View, CNN etc. with I Told You So opportunities. Who cares? Turn the page. Course correct and move on.

Better, in fact, absolutely necessary, to gets LOTS done, instead of going 10 for 10 while protecting your flank from opposition fire.

Panama pledges to end key canal deal with China, work with US after Rubio visit

The US State Department estimates around 72% of all vessels that travel through the Panama Canal are coming from or going to a US port. China controls the ports at both ends through the Belt & Road Initiative (remember that one?). China is also building steel bridges over the waterway, which it could bring down at will. In other words, China could SHUT Panama Canal traffic whenever it wants.

After Marco's visit, Panama committed to not renewing its participation in the BRI. Let's see what happens. Maybe we won't have to take over. More Trump effect.

Malicious Compliance

Get ready for this. We have already seen Biden and unelected bureaucrats in dozens of government agencies shoveling cash out in advance of Trump. One agency staffer labeled it - throwing gold bricks off the Titanic.

At every turn, these soon to be history (or at least have to show up at work) pencil pushers will be twisting Trump directives to sabotage them or grease the skids for their own personal gain down the road.

Example - Minneapolis mayor told illegals, "We love you." Promises to to resist Trump's deportation policy at every turn. Wonder how his already depleted police force feels about that?

I'm so sick of these talking heads thinking they're smarter than Donald. Cheap shot after cheap shot maligning his decisions, directives and assertions as though he's not smart enough to understand their ramifications. Most of these clowns never ran a decent size business, managed a large group of people or made a sizeable deal in their lives. Hypocritical morons.

Are you kidding? Are voters in Vermont and Massachusetts brain dead or just masochists? Bernie & Pocahontas made fools of themselves in the confirmation hearings. Along with Adam Schiff and Dick Durbin whom you can always count on to nauseate.

Hard change means hard changes. You know - gotta break some eggs to make an omelet. Like Chemo, which causes you to vomit and lose your hair, before it stops the cancer. Don't these lefties know by now it's dumb to try and Trump Trump.

A Public Service Announcement

I have been investing in the stock market (almost exclusively) for three decades, since I first had a little nest egg. I work with two advisors. My average annual return has been 8% plus a little. Sure there have been some down 15% years but they've been more than offset. This is not a high risk approach. While it's not a Nancy Pelosi (40% a year) portfolio, it's damn solid. If anyone wants to explore, I'm happy to make a connect. My guys laugh because I don't bother to get regular statements or look at the market at all. When I have an idea or they do, we talk. Couple times a year at most. Otherwise, let it ride.

Ukraine - Russia. What's Next.

While Trump would love to get a deal made, he's obviously missed his "within the first 24 hours:" target. The war just meanders on at a horrible cost. Zelensky reports 43,000 dead with 370,000 casualties. He claims 198,000 Russians have died with 550,000 casualties. The population of Ukraine before the war was 41 million. Russia's about 140 million. Ukraine's population has dropped by 10 million with most losses being citizens fleeing.

Russia expert and investor, Bill Browder, painted a dismal outlook on Gerry' Baker's Free Expression podcast earlier this week. He basically says Putin will never quit. He is fighting literally for his own life. In Putin's eyes, if he loses power, he not only loses his wealth (billions), he will likely end up falling out a 5th story window. Pretty stout motivation to fight, no matter the losses of life or unlikely gains. Now he has North Koreans coming in now to supplant Russian troops.

Browder claims the only way to force Putin's capitulation is by squeezing the life out of the Russian economy through every avenue available. Sanctions, freezing cash flow, stop buying energy to name three. Apparently we, along with Euro banks, have $300 billion in Russian assets in our possession. Browder says we should use these to arm Ukraine instead of US taxpayer money. Sounds like a plan to me. Bet those oligarchs will bring Putin to the table them - with a noose around his neck. What's to lose? We all know how effective the Biden approach was. No strategy. No plan. No outcome defined. Slow play weapons. Handcuffs on retaliation in Russia. Brilliant!

Anybody's Dog that'll Take You Huntin'.

Translation - a simp beholdin' to anybody and everybody. Isn't it nice to have a guy in the Oval who owes nuttin' to nobody and has common sense to boot. See what's possible and how fast? It's why I say no one should be able to run for federal office without a net worth of $10M plus.

As predicted...

Powell aggressively cut interest rates to help Biden then Harris win. Since that was a bust, he's "pausing". Hell with the Fed. Let's build an economy that doesn't require manipulation by pols.

Da Bomb

If you ever watched a Biden press briefing with KJP, you need to watch one with Karoline Leavitt. Wow. What a difference. KJP and Psaki before her used to arrive with 6" binders and look stuff up. Karoline has 2 or 3 pages tops.

So now the latest in the Dem's multifaceted smear campaigns is to mock good looking Conservatives. Joy Reid claims Leavitt only got the job because she's a 10. Nobody told them to put up trannies with nose rings and face tattoos. That said, KL is, worst case, a 9.5.

Why We Need Immigration

We need H-1B visas because we can't supply the quantity of highly educated students needed to get our economy firing again. Our tech companies particularly need students with high levels of basic proficiency (math, reading etc.).

Why do we need access to qualified immigrants? Because our poor job public schools do such a lousy job teaching the basics and our universities, when they are not twisting students minds about DEI, Hamas, gender identity and American racism crap, are producing way too many degrees in useless disciplines.

The 2024 Nations Report Card confirmed the dilemma. In 2024, a shocking 72% of eighth-grade students taking the National Assessment of Educational Progress math exam failed to score at the proficient level -- a full 6% increase over the 66% of eighth graders failing to achieve proficiency in 2019. This is four full years after Covid.

Two thirds of H-1B jobs are computer-related. If you can't add and subtract, that's a problem. America has nearly 50 million K-12 students. If schools used proven math instructional methods instead of failed progressive techniques, there would be less need for H-1B visas because there would be more than enough young Americans with the skills companies need. Need more good jobs? Here's one way. The tech titans at Trump's inauguration should lean on schools to do just that. It is time to make math great again.