Thoughts for the Day, April 10, 2025: Check out my Video of the Day. A great performance of American Pie by John Mayer

The cleanup has begun

That buzzing sound you hear coming from the northern part of the state is the sound of chainsaws and woodchippers as the cleanup in many areas has begun.

This will be Phase I of many phases. Phase I will take care of the branches on the ground. Phase II will consist of pruning the trees of broken branches in neighborhoods and public spaces.

Phase III will occur overtime as the dead branches that are still way up in the trees in wooded areas will eventually fall to the ground during future windstorms. These branches are known as widow-makers because if one falls on you, it will probably kill you. Looking up before entering a wooded area will save lives.

Reality hits the markets today.

Yesterday’s stock market rally was short-lived as the elation of Trump pausing the tariffs for 90 days gave way to the facts. Analysts realized today, that 10% across the board tariffs remain in place for all countries and the tariffs on China have been increased to 145%. In essence, Trump has started a trade war with China. A trade war that will have no winners. The major losers will be we the people because the cost of the tariffs will be passed on to us in the form of higher prices.

The analyst realized the impact to the economy will be detrimental. Increased inflation and a near-term recession remain strong possibilities. The S&P dropped 3.6%, the Dow dropped 3.2% and the NASDAQ dropped 4.5%

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Uncertainty matters

Here are personal examples as to why economic uncertainty leads to downturns in the economy and markets.

I have a car that is eight years old with over 105,000 miles on it. I just had it painted and had my 100,000-mile check-up so the car is in great condition. Normally I would be planning on replacing the car in the next year, but because of the uncertainty of the future value of our retirement funds and because of the uncertainty of how tariffs will affect the price of cars. I have decided to keep the car for at least two more years.

Leah and I were planning on upgrading our finished basement this year since everything in it, including the paint, is over twenty years old. The room is still very functional, but it is not a room we use much. It primarily serves as a place for Katy’s family to stay when they come up. Because of the future value of retirement funds, and because it is not necessary for us to upgrade the basement this year, we are considering deferring any upgrade to next year or the year after.

After getting hit by the ice storm and having to live with no power for seven days, Leah and I are considering installing a natural gas generator which can provide for all of our electrical needs in case of future power outages. The cost including installation will be somewhere around $10,000. We remain undecided on whether to purchase now or wait for a year when we have a better understanding of the future value of our retirement funds.

If one out of ten families who were going to purchase a car this year decide to defer the purchase this year, it will have a major impact on the auto industry. Production will be reduced. Layoffs will occur. Discretionary spending by autoworkers and their families will be reduced. The economy will slow down.

No automaker will invest in future capital expansion if they are uncertain of the direction of the economy. Without the automakers’ expansion, the construction industry will slow down, and the downward spiral will continue.

The same goes for home improvements, and major purchases such as a generator. All it takes is a 10% reduction in purchases because of the uncertainty created by Trump’s tariffs to cause a recession.

Trump has created this uncertainty because he is stuck on his incorrect perceived value of tariffs. He is ignoring his advisors. He is ignoring history. He is not ignoring his gut, which is the basis for most of his decisions. Since his gutfeel changes from day to day, he has created uncertainty. And nothing spooks individuals and the markets like uncertainty.

A little bit of normalcy

Today I was able to take a 40-minute bike ride. I wasn’t dodging ice and broken tree limbs. The temperature was in the mid-40s. Most of the snow is off the golf course and temperatures are forecasted to be in the 50s over the weekend. It felt good to be getting back into my normal routine. No chainsaws today. No moving tree limbs. It was a normal day.

If the superintendents can get the broken tree limbs off the courses, the courses may open on time if the weather continues to hold.

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Quote of the Day: “This causes analysis paralysis. We cannot operate in this type of environment. Businesses need clarity.” A business analyst on CNN tonight.

Orchid of the Day: The landscape companies who have done yeoman’s work in starting the cleanup process in Northern Michigan.

Onion of the Day: President Trump for starting a trade war with China.

Lyrics of the Day: You're a real tough cookie with a long history
Of breaking little hearts like the one in me That's OK, let's see how you do it Put up your dukes, let's get down to it

Answer to Lyrics of the Day for April 9, 2025: Benny and the Jets, Elton John

Question of the Day: How do you feel about Trump’s handling of the economy so far?

Video of the Day: This is special. Enjoy.

Fan Request: John Mayer Performs "American Pie" | Letterman

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