Chapter 1: What is the main topic discussed in this episode?
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Chapter 2: What is the Donroe Doctrine and its implications for markets?
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Today's number, 200. That is how many days of the year the weather is foggy in the Grand Banks in Newfoundland.
Chapter 3: How have recent geopolitical events affected U.S. imperialism?
This makes the Grand Banks the foggiest place on the planet, according to NASA. Scientists have also attempted to catch the fog. However, they missed.
Welcome to Profiteer Markets.
Scott is still on vacation, but he will be back later this week. So today, the person you hear laughing very heavily on the other end of the line, we have Robert Armstrong, U.S. commentator for the Financial Times, favorite of the podcast. Rob, welcome back. Thank you for standing in.
I think you've found such an excellent metaphor for our profession there, Ed. Catching fog. Catching fog. We are fog catchers. It's true. It's what we do. Fog catchers. And we do miss.
Chapter 4: What factors contributed to the surge in bank stocks last year?
It just keeps slipping through the net, you know? That's exactly right. Man, it is. And it's not getting any less foggy out there, I noticed. Not this week. That's right.
We're going to catch something today. I know that. So... We got a lot to talk about here, and we're going to start with our first story, and this is going to be about what we've seen in Venezuela and Greenland. So President Trump opened the year with a dramatic show of force, announcing U.S. troops captured.
Chapter 5: How does deregulation under the Trump administration impact banking?
Venezuela's President Nicolas Maduro, just a few days later, he revived his push to acquire Greenland and signaled that he would consider using military force if necessary. And Trump has framed these moves as part of a broader vision for American power, which he is calling the Donrow Doctrine.
And this is a reference to the Monroe Doctrine, which was first articulated in 1823 when President James Monroe declared that the Western Hemisphere was America's sphere of influence. The idea back then in the 1800s was to kind of fend off colonialism from Europeans and
And it basically holds that any intervention in the Americas, in the Western Hemisphere, is potentially some hostile act against the U.S. So the administration has actually endorsed this publicly, the Monroe Doctrine specifically. They did that in November, and now we're seeing it play out in Venezuela, more recently in
And we're basically seeing the United States is being treated at this point as like an imperial regime. And now Trump is talking about maybe taking action against Cuba as well, maybe against Colombia. Also, we shouldn't forget what he said about Canada last year. He wanted to fold it into the U.S. And MAGA supports this. This was a quote from Representative Andy Ogles, which we're going to play.
We have a greater vested interest in Greenland than, geographically speaking, than Denmark, the Danes have. And so when you look at the Monroe Doctrine, when you look at the Western Hemisphere, we are the dominant predator, quite frankly, force in the Western Hemisphere.
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Chapter 6: Why might consolidation in the banking industry be beneficial?
So all of this begs the question... And I know that we're not geopolitical experts, so we're going to try to tie this into markets as much as we can. But what would an imperial America look like? How would it change the world if we really went out there and decided we are the apex predator? And then how would it affect markets and perhaps the economy? Rob, over to you.
I have two diametrically opposed thoughts about this. Which shows you that I'm intelligent. This is the, I guess it was the Fitzgerald quote, genius is the ability to hold contradictory thoughts in your head at the same time. And my first thought is that people like me, and I think you too, Ed, who believe in
free markets and commerce and letting economics and markets lead how we structure our, at least the commercial part of our lives, we kind of want markets to punish all bad ideas. Right. We want it to be a kind of final court of justice for the world. And I'm afraid that that is not true. You know, what do stocks do?
Chapter 7: What predictions does Robert Armstrong have for the rest of the year?
They discount future cash flows of corporations. What do bonds do? You know, they are a bet on the solvency of a nation, you know, and that could connect to geopolitics a little more closely. But you can have an empire that's plenty solvent. There's been a lot of them in history where you'd want to own their bonds.
So we can't turn to markets to solve these kind of political and moral dilemmas for us. But so that's the thought number one. The contradictory thought is this, where we see markets flourish, in history where, where markets are places where people can make good money over a long time and retire and be happy and compound wealth and all that.
Those almost one-to-one turn out to be places that have rule of law. You can't over time, make money in the Russian stock market. You haven't, you haven't consistently made money over time in the Chinese stock market. And importantly, in the case of China, you haven't made good money there, despite the fact that the economy has grown leaps and bounds, right?
So investors didn't grow with the economy in China, a place where rule of law is an open question. So if you think we're heading in a direction where the rule of law doesn't apply,
Chapter 8: How does market behavior reflect investor sentiment towards geopolitical events?
where the imperial attitude extends not only to other countries but to our own citizens then you might see markets in the long run have a problem but they're not discounting that right now that's for sure hundred percent just to go look at what's actually happening in the markets right now um because it's i mean it's it's true we we
We had this in Liberation Day where Trump does this incredibly stupid thing and the market punishes him severely for it, which is kind of what made taco so great. And for those who don't remember, Robert Armstrong came up with the phrase taco, which took over the world.
Yeah, and now it's possibly obsolete, as my friends on the internet like to remind me. You know, at least in the geopolitical realm, it doesn't look like a taco world anymore. Exactly. Exactly.
But what we're seeing right now is just exactly as you're saying, this administration, despite deciding that they want to go and invade the region of an ally in Denmark, no, they're not really being punished for it. In fact, we're not seeing that much movement overall. We've seen some big moves from some very specific individual names.
So if we look at Venezuela, for example, the oil refinery stocks, climbed a lot. So Phillips 66 up 6%. And have stayed high. Stayed high. Valero up 12%. The oil service stocks also climbing. Halliburton, Schlumberger. There are a few kind of specific names. By the way, the same thing's happening in Greenland, where there are some publicly traded rare earth companies that operate in Greenland.
They've soared. So Critical Metals up 6%. 25%, energy transition minerals up more than 30%. I mean, big, big, big moves, but only in a very, very small handful of stocks. The market as a whole doesn't seem to care that much. The S&P is up a little bit, but overall, I mean, these very cataclysmic events in the world of geopolitics, Venezuela and Greenland, the market doesn't really care.
The most interesting one is, is that Chevron doesn't really care. Chevron, the only American oil company operating in Venezuela, is back to where it started on Thursday. People are like, oh, this is exciting. And then you look at the, you know, we don't have to go into this, but the actual dynamics of oil extraction in Venezuela. uh, in Venezuela.
And you realize this is not a great look for the drillers themselves, the, you know, like the Chevrons and the X-Rons, you know, you might make a joke that it's a lot easier to extract a president from Venezuela than it is to extract oil. So I think that's fascinating.
But there is a kind of side plot that you haven't mentioned that takes us kind of from the macro to the micro that I'd like to mention in this context. Like, while all this stuff has been going on in Venezuela, we have seen the emergence of a character that I am calling Donald Trump with Elizabeth Warren characteristics.
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