Paradigm Shift in the Transatlantic Partnership
Changing priorities, diverging interests and "holier than thou" friction.
Events are moving faster than our ability to think and understand them.
Even if we "understand" them — who is to say markets will react as we expect them to? There are no guarantees.
Therefore the best way forward is to follow the news, list the important events down and form hypotheses (by thinking) on how markets could move and react and what opportunities are lining up.
Then, test our expectations with reality, and repeat. Keep what works, discard what does not. To do this you need first a framework and decades of experience in doing just that.
If you do not — you are bound to be met with challenges and fall into traps along the way.
Emerging Frictions between the EU and Trump’s US.
I believe we sniffed out this theme early on with Battle for Europa from last May, where I pointed out the geo-strategic importance of Europe (and the EU), and how both the West and the East need her to either stay on the top or continue to ascend.
I also touched on the Battle for Europa “from within” — that is to say, Europe’s self-destructive direction and gave my thoughts on the risk/reward that Europe was taking by shutting out Russia economically and shooting for military escalation.
I am happy to say that the (emerging) setup was somewhat already in the minds of many of you — as Battle for Europa was my most monetised geopolitical-oriented piece, by far.
Enter JD Vance
9 months later at the Munich Security Conference (started this Friday and ends today), Trump 2.0’s VP, JD Vance made a speech which threw a sledgehammer in the multi-decade long relationship between the US and Europe.
How does the JD Vance speech shift the (un)official understanding between the US and Europe? How do we expect this to affect markets? What are the themes and trades that could come out of this?
Let’s start with what JD Vance actually said in this speech, the reactions to that and then move to VdL’s speech and what they all mean. After that we will formulate hypotheses on trades that could setup as a consequence of this paradigm change.