President Trump Revives the Monroe Doctrine

Jan 05, 2026

∙ Paid

Key Takeaways

Markets Calm, Risk-On Intact: The market reaction to the capture of Maduro and the “regime change” in Venezuela has been fairly muted so far. We have risk-off reactions in the dollar and precious metals, but risk-on moves in the broad equity and base metal markets. The surge in the oil major stocks is understandable but likely overdone. Our sense from the historical record is to never change your investment strategy based on geopolitical events.
Effective Tariff Rate at 14%, Half the Earlier Headline: A great article on the tariff file — and why the bite has been mild so far — showed up on page B1 of today’s New York Times. In a nutshell, after adjusting for all the exemptions and reprieves, a new working paper from Harvard and University of Chicago economists shows that the actual tariff rate is only 14%, half of what was being advertised several months ago.
OBBBA to Widen the Divide in a K-Shaped Economy: Another nifty press clipping today, this time courtesy of page B12 of the WSJ, details how the major theme of the tax effects from the Big Beautiful Bill will be to exacerbate the K-shaped consumer base in 2026. In fact, all the policy changes, including the lingering tariff effect, reduced benefits, and surging student loan defaults, will end up acting as a drag on overall consumer pocketbooks this year (but not for the very high end).