1Wk·

Dependence of the financial market on an unstable country

If I am wrong somewhere, please correct me.


Due to the great dependence of the capital markets on America, political or structural changes in the USA represent a major risk for the entire market.


Trump and Musk are radically abolishing (or further reducing) controls on large companies in addition to creating a perfect divide in society.


Shareholders are reacting positively at first, which is why the market initially reacted so well to Trump's appointment.


But seriously: in the US, there were already only the absolutely necessary controls regarding the environment and social compatibility before, with the abolition of entire authorities, it is only a matter of time before a company causes great damage to the social environment or the environment due to pure greed for profit, which then has a massive impact on companies in the medium term.


The regulatory authorities are there for something, they are not an invention of the evil left to steal money.


In addition, Trump's tax cuts will probably exceed the debt savings. Contrary to expectations, inflation has not decreased, especially food prices have continued to rise, tariffs will not cause these prices to fall again.


I will $VEU (-0.07%) into the portfolio and thus slightly reduce the US $VWCE (-0.92%) slightly.

Additionally:

Good time to buy commodities? (Gold has also been on fire, apparently someone with big pockets has a lot of interest here at the moment).


You can also find an extreme example of this on YT:

https://www.youtube.com/watch?v=mYbbov5Oajg

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46 Comments

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I will not tell you that you are wrong, because I don’t think you are wrong.
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I don't believe in a second American Civil War, but yes, I'm also quite worried about how reactionary and short-sighted authorities, offices and posts are being abolished. And the fact that Musk is now bouncing around the White House as First Lady is unbelievable in my opinion, it feels like an oligarchy in the germination phase.
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@Nick-investing Boy, oligarchy do you even think about what that means or have you just picked up the word? The last time someone who wasn't a millionaire became president in the USA was Harry S. Truman - in 1945.

For 80 years you didn't care that politics in the White House was made by the 1% for the 1%. But now that the public broadcasters have found their red book of fighting words, it's suddenly the "KEIMPHASE of the oligarchy". All right.
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@Soprano bad day? I think if the richest man in the world is supposed to regulate himself and check the implementation of the laws relevant to his companies because he is both the CEO and the federal employee, that's different from a president being influenced by the rich upper class. Or where exactly is he different from Russian oligarchs, for example?
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@leveragegrinding It is no different from the Russian "oligarchy" - but not just since yesterday, but for decades. We have an oligarchy when I can call the president to get a law passed. This has not just been possible since the day before yesterday. We've had Nancy Pelosi insider trading for years. We have the Ukraine affair and the Hunter Biden laptop thing and the pardon from daddy. We've had a United States that invades countries at the behest of billionaires. In 1954 Eisenhower overthrew the democratic government of Guatemala and set up a military dictatorship just because the CEO of the United Fruit Company wanted it!

Where do you draw the line?
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@Soprano Anyone who doesn't exactly agree with you is a communist or what? And just because I have a different opinion I am "influenced" by the ÖRR? You're a great democrat. And if you burn your toast in the morning, it's probably the fault of the evil Greens, isn't it?
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@Nick-investing You can have any opinion you want, you can be a communist and demand a soviet republic for all I care. I'm totally cool with that. It just doesn't give you the right to distort historical facts.
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@Soprano Your list is incomplete, for example the overthrow of Iranian democracy is missing ... We would have saved ourselves some trouble if America had agreed that the oil revenues should go to the Iranian people. 1953 under Eisenhower

https://youtu.be/57fMqUl-sng?si=Zc7P2-6k-NeCb6M3
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@Soprano We're not talking about small millionaires here, add another six zeros.
You can shift a lot in the world with that.
And the fact that such a man is in first place and Trump is just his puppet in front of the camera doesn't worry you!
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@Soprano your problem is that you don't take in condideration quantity. America has always been influenced by super rich and corporations, the fact is that what we're seeing now is more than what we saw in the last decades. The same error you do by comparing russia and the us: one is totally controlled by the elite, the other has a big influence from them (you will never find a country where the rich and powerful have no influence at all). It's a huge difference
Sounds strange. The USA is heavily in debt. Trump has the spending audited and realizes it's being squandered around the world and stops spending. Biden screwed up food prices but Trump is to blame three days after taking office?

It all sounds like a conspiracy. What Trump is doing should be done here. Tackle the spending problem, not rake in more revenue and throw it out the window. In my opinion, America will come out of this stronger
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@Madhatter5566 What nonsense. Trump wants to spend a lot more, he doesn't deny that.
Musk is cutting back on government agencies that are needed to control the economy, while at the same time Trump is ordering, for example, 400 million Tesla armored government vehicles.
In addition, he is introducing tariffs on many things, which will increase prices in the USA even more than they are now. Why is that swearing?
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@leveragegrinding I'm undecided, but Doge has exposed and stopped more than enough wasteful spending. What you think Trump will spend and what is currently happening seem to be two different things.

The climate agreement was also a waste of money.

Tariffs are also partly important and right.

And your current prices are Biden. Trump is on for how long?
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@Madhatter5566 Interesting that you would consider the Consumer Financial Protection Bureau “wasteful spending”. Interesting that you think cancer research is “wasteful spending”. You know what is a waste? Trump halting USAID, which now caused millions of dollars worth of food to rot in ports.
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@leveragegrinding 400 million dollars in Tesla e.g. Cybertrucks are without discount only 10,000 units for the entire USA, in comparison only in Bavaria are about 7,000 cars in the service of different authorities. And you can see, especially in Germany, what advantage it has for an economy when it is over-bureaucratized and full of authorities for every nonsense.
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@Doja of course, because USAID is an agency for all kinds of nonsense, just like American air safety, etc. Who needs cancer research, people with cancer should just die if they don't have enough money, right?

Lost in political views, you can no longer see reality
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@leveragegrinding I agree with you that there are certain government services that would not need to be cut but actually need more funding. To pick out exactly these 2 examples here.... Not every authority, standard, rule and regulation makes sense and helps the economy, which is why it certainly wouldn't hurt to take a look at the USA and learn some ideas instead of always having to know everything better.
@leveragegrinding Um. Have you seen what usaid has paid for. Mostly nonsense. That's exactly the point.

It has nothing to do with cancer research.
@TAHT USAID has nothing to do with cancer resaerch, it was a vehicle for wide spread corruption. And I think wasting billions just for others isnt the right thing when you have a debt problem. Stopping Usaids was the right move.
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@Madhatter5566 The entire attitude of the authorities is simply stupid in the long term. Even if you completely ignore the social aspect. The USA is withdrawing and someone is stepping into the breach. Who will it be? China. They're already known for prowling around like hyenas. If you help them out as a country, then you have first choice when it comes to exploiting resources. The USA will no longer have them, but hey, China will be happy.
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@devnerd_daddy It's an audit and the USa will continue to pay for the important things. Just don't fund the behavioral research of autistic gnomes in Uganda with a kickback to Pocahontas. Secondly, you should only give money if you can. A highly indebted country cannot do that.
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Uuuuuand there it is again, the usual hypocritical "I'm worried about the US economy" post that's about everything but the US economy. Actually, you just wanted to tell us that you really, really hate Trump. Yeah, fine, now what?

Your core thesis is that we should perhaps be more cautious with investments in the US. But you're just going completely off topic. Starting with this democracy blah blah blah argument. That has no connection whatsoever to the economy or investments. The US could be a constitutional monarchy and it wouldn't be an argument. Monaco is also a constitutional monarchy and you're not worried about their prosperity. So tell me specifically what do you care about their form of government?

From an economic point of view, deregulation is also a positive thing. Please tell me one advantage I could have as an investor through regulation and taxes. You say you are worried about environmental pollution and groundwater poisoning. Same principle: Firstly, what do you care about their groundwater? Secondly, what are you actually doing to ensure that the groundwater in other countries or in your own country remains clean?

The Greens had in their 2021 election manifesto that they would enforce a ban on groundwater privatization. The Greens haven't bothered for 4 years now. Have you criticized them for that so far? Oh no, they're the good guys and you've never once thought about the damn groundwater in your everyday life. And that's what I mean by hypocrisy. In your entire life, you've never shown any interest in the global spread of democracy or the protection of groundwater - not even your own.

Unfortunately, you didn't do yourself any favors with the edit and made your post even more ridiculous. So now the really glaring problem that speaks against US investments is the lack of abortions? I really can't think of anything more to say. Abortions are not a significant economic factor nor is anyone here invested in abortion clinics.

Boy, why don't you save yourself the beating around the bush and just say you're on a big hate kick for Trump and be done with it. There's nothing to it.

This entire text is completely about every random topic in the world except investing.
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@Soprano Was your dinner too hot?
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@Soprano you start a very long comment, which is hardly about the content in my post, but only about your feelings towards me (because I really didn't mention the green ones anywhere in the post) by accusing ME of simply writing directly that I'm pushing a hate kick at Trump.

Also, you ask why I care more about the US than Monaco (I'm sure you can figure that out on your own), or why I care about changing the system. Just for you in case you don't get it quickly: system changes are very rarely good for the economy and peaceful, I have no idea how you don't come to these two conclusions on your own.

But you won't come to anything on your own anyway, because the next question is "why do you care about their groundwater?"
People drink poison, people fall over, people no longer consume and no longer buy the new iPhone -> bad for Apple.

All the following nonsense that refers to my alleged political orientation drifts completely off into a weird green bashing in the form of a topic that I really have nothing to do with. Due to its absurdity, I would nevertheless spontaneously say (since you don't seem to have come up with the idea yourself): In a government with the FDP, no ban against privatization was enforced, but if one had wanted that, one should certainly blame the Greens.

If you think a text on political security in the USA is not about investing, I really can't help you.

The only spark of rational criticism that I was able to glean from somewhere I will of course take as an opportunity to change the post. So that my intentions become clearer.
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@leveragegrinding Well, you've really toned down your text. Weak. Now it just says that deregulation will not exceed other expenses. Huh? Of course it will go further and only the waste will be removed. That's the nature of audits. But running up less debt than before is always positive. Also the control of companies, yes, that's good for the economy. Bad at best for the environment (not interesting for investors)
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@leveragegrinding Well, to be honest, how am I supposed to respond to the content of the post if there is no content? I would have liked to remain factual, but unfortunately the text hardly contained any factual arguments before editing.

If you put it so diplomatically now, I can hardly disagree with you about the system change. So the toxic groundwater harms Apple okay. But what about the pharmaceutical industry? What about companies that sell water treatment plants? I'm not making this up now, but that's how politicians really think. They don't necessarily have a primary interest in the health of their citizens. In Canada, active euthanasia was legalized in 2015 and since then there have already been cases of people being advised to use it (on the grounds that it would relieve the burden on health and pension insurers). That is absolutely beyond words. What I'm saying is that if the US decides to destroy its nature, that's certainly not cool and perhaps even immoral. But it's not a negative economic factor per se - which was supposedly the point of the text.

Well, I could edit my post now and take out the TWO sentences about the Greens. Then we'd be even. But I think the part about the "political (in)security" of the USA was perfectly countered by JD Vance yesterday at the Munich Security Conference. Ultimately, he said that exactly the same things we say about US democracy could also be said about our German and European democracy. I don't want to open a big can of worms here, because I think you can really argue for a long time about whether the USA or the EU is more undemocratic.
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I think we are in for some very turbulent years. I don't know what that means in terms of the stock market. My hope would be that it is an opportunity for Europe to position itself intelligently and leanly. I don't know whether the Americans will be dented. Deregulation is not wrong at first. But if I shut down consumer protection agencies, it could lead to unhealthy growth and bubbles. But as is so often the case, politics does not mean economic power and a country's economic power is not necessarily indicative of stock market prices.
Nevertheless, I sleep better because I have a slightly lower US exposure.
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I think thanks to Trump and Musk the horse could still run further. Even if you don't like them
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@Gehebeltes-EFH Excuse me?
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A little exaggerated and dystopian😂
I can let my imagination run wild on every subject/country/leader.

Luckily and sadly that imagination has no influence on the real world.
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@di_marcello well let's hope it stays like that for the us.
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I completely agree with you.
I am also very concerned about legal certainty in the USA.
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