2025: The Vibe Shift

All The World's A Stage: Big Picture Topics For 2025

The Vibe Shift Is Here

Call it a vibe shift, call it woo woo, call it whatever you want. I just have a gut feeling that something major is coming, something that is going to be a culture shock. The last one we had was the government response to COVID (not the actual virus itself, I want to be clear on that), and I just have this feeling that we are going to experience another important event (or series of events) over the next 12 months. Recently, we have bounced from one crisis to the next, and it seems like things have been accelerating over the last couple years.

- 2024: The Beginning Of The End Or The End Of The Beginning? (Part 1)

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I wrote that a year ago, and after Trump’s recent election, I’m optimistic about the direction of the US (and the world) for the first time since the start of 2020. That optimism might be misplaced, but I think a lot of people have woken up in recent years. I like to think that I’m being as objective as possible (I know my biases), but the last four years were eye opening. We went from lockdowns for a cold and experimental “medicine” that was safe and effective, to proxy wars in Eastern Europe and the Middle East, an intensifying economic cold war with China, all while our government and NGOs were opening up the border and importing people into the country as fast as possible.

Did I miss anything? Oh, just a near miss assassination attempt on President Trump. It’s a total coincidence that the first Trump rally in three election cycles with a CNN camera crew happens to be the one where someone takes a shot at him, but I digress. I was hoping it wouldn’t happen, but I did say last year that I wouldn’t be surprised if we saw an assassination attempt in 2024. So all of this has happened in less than four years, and now I’m getting optimistic?

I’m not the pie in the sky type that thinks Trump is going to fix everything overnight. “Emperor Trump will be inaugurated in a couple weeks, end all of the wars and fix things so we get an American Utopia. The S&P is going to 10,000, the economy is going to rip, and 2025 will be smooth sailing from here.” That would be nice, but I don’t think this year is going to be that simple. I think that a huge portion of the US (and a large chunk of the world, if I’m being honest) breathed a sigh of relief when Trump was elected. There has been a spike in small business optimism, but we will see if that lasts. That’s not the only place I have seen Americans being more optimistic, but I think the vibe shift is just getting started.

I’m not superstitious (maybe a little stitious), but last night was New Year’s Eve, and the Capitol Building, the Washington Monument, the Empire State Building, and One World Trade Center all get hit with lightning, right before we kick off 2025? It’s not an omen, it’s just a coincidence, nothing to see here. Absolutely nothing to do with the vibe shift.

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2024: The Beginning Of The End Or The End Of The Beginning? (Part 1)

2024: The Beginning Of The End Or The End Of The Beginning? (Part 2)

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Anyway, if you want to go back to review the other topics I was writing about a year ago, I included links above. I will get into the financial market topics next week, but this piece always gets longer and longer until I have to break it up into multiple pieces. We are a couple weeks away from Trump’s inauguration, and I think he will get into office without incident. With the election results, Trump has his mandate: end the wars, reduce (ideally eliminate) immigration and start deportations, and improve the American economy. There are other things that need fixing, but those are the big three. I don’t think he is going to be an emperor figure (or an American Caesar), but the way I see it is that Trump’s second term is a bridge to whatever comes next. One of the big shifts that is starting become apparent is a realignment of the political sphere in the West.

If he can pull us back from the brink and stop the flood of immigrants, he will have ticked two of the most important boxes for many Americans. Whatever happens, I think we are watching the death of both political parties as we know them. As the younger generations rise in influence, we are going to see massive changes in both parties.

2024: The Beginning Of The End Or The End Of The Beginning? (Part 2)

People talk about The Fourth Turning, cyclical changes, and political upheaval, but I think what we are watching is a shift from the current political establishment towards two main camps: Nationalists and Globalists. It is happening across the West and it will only accelerate as we see a generational changing of the guard. As an aside on tariffs, the all-knowing economists only seem to complain when America starts threatening tariffs versus when other countries put their own tariffs in place. Tariffs are a political tool, and for Trump, it seems like they are an opening point for negotiations and conversations with other countries. I have heard several people say that it’s better to take Trump seriously instead of literally when it comes to his policy proposals.

Don’t listen to what they say, watch what they do.

- Steven Levitt

The Overton Window & The Reverse Fishbowl

We can ignore reality, but we cannot ignore the consequences of ignoring reality.

- Ayn Rand

One of the biggest themes of the election this year was the continued decline of mainstream media. It hasn’t been a secret that cable networks have been on the decline, but I think we will continue to see platforms like Twitter, Substack, as well as podcasts increase their influence. Twitter in particular does create a bit of a reverse fishbowl dynamic, where you can look out at the world and see and comment on anything and everything, from financial markets, geopolitics, to pop culture and memes.

Substack and podcasts will continue to play a big role, but Twitter has turned into the de facto town square, especially since Elon Musk bought Twitter. I’m not a huge fan of his, and I certainly won’t be buying an electric vehicle or signing up for a brain chip anytime soon, but it’s hard to overstate the impact he has had on the overall discourse with the changes he has implemented at Twitter. None of the up and coming platforms are perfect, but they are far superior to existing news sources in my opinion. In short, the shift from centralized mainstream media to decentralized forms of media is a trend that is set to continue.

We will see if Trump and RFK can make pharmaceutical advertising illegal (which might be unlikely if you look at Congress), but if he can, it would be a death blow to the cable networks and a big hit to pharmaceutical companies. Two birds with one stone, as they say. I have seen a couple sources that say 75% of ad spend on large news networks comes from pharmaceutical companies, but let’s play it safe and say it’s more than half. When you combine that with the fact that the average age of cable news station viewers is 70 years old, and they haven’t been able to capture a younger audience, it paints a grim picture for establishment media.

This does have drawbacks, however. The shift to Twitter has accelerated the 24 hour news cycle to the constant chase of the shiny object. While this doesn’t help with our collective ADD, it does accelerate the shift in the discourse. Some people like to comment that Twitter’s not real life (and they’re right), but it has turned into the town square. I think we will continue to see the Overton Window (the range of subjects and arguments that are politically acceptable to the mainstream population at a given time) shift rapidly. Topics that were taboo even a couple years ago are probably going to become serious topics of discussion in 2025 and beyond, like we saw in 2024 with immigration.

Immigration / Invasion: Still A Focus For 2025

For what is a nation?

Is it not a people of a common ancestry, culture, and language who worship the same God, revere the same heroes, cherish the same history, celebrate the same holidays, share the same music, poetry, art, literature, held together, in Lincoln's words, by "bonds of affection, mystic chords of memory, stretching from every battlefield, and patriot grave, to every living heart and hearth-stone"?

If that is what a nation is, can we truly say that America is still a nation?

- Pat Buchanan

I predicted that immigration would be one of the biggest topics of the Presidential Election cycle, and it looks like it won’t end there. We went from “they’re eating the dogs, they’re eating the cats” to what we saw on social media in the last couple weeks with the H-1B debate. It turns out that Heritage Americans don’t view our country as just an economic zone, or just a shared set of values. We will see what Tom Homan (Trump’s new border czar and owner of the best title in the new administration) and Stephen Miller, who is expected to be in charge of immigration policy, can do once Trump is in office.

Despite the fact that Elon was on the wrong side of this one, it is worth noting that this debate would not have happened on pre-Elon Twitter. The short version is that Trump wasn’t given a mandate just so he could change the source of mass immigration, and at the end of the day, the only difference between legal and illegal immigration is a signature. If you want a preview of what America might look like, take a peek at Canada, where population has exploded over the last 4 years. Feel free to ask them if they think unlimited H-1Bs is a good idea.

If You Think America Is Just An Economic Zone…

Now I know that recreating Silicon Valley in India isn’t going to happen, but Elon eventually did walk back his position on H-1Bs, and I have seen some people suggest tariffs on H-1Bs (if that happens, Cognizant CTSH 0.00%↑ is probably a short). Some people tried to compare Operation Paperclip to the H-1B program, but that was even more selective than the O-1 visa. The point is that a lot of discussions around immigration are starting now and I don’t think that it will stop in 2025. If you haven’t been on Twitter, or you want a good breakdown, you can check out the podcast below.

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This was just one example of how fast the Overton Window can shift, and I think we might see that continue in 2025 when it comes to immigration. Below is a list of several things related to immigration that could become hot topics next year:

• Deportations

• Birthright citizenship

• A moratorium on immigration

• The Naturalization Act of 1790

• The Immigration Act of 1924 (Johnson-Reed Act)

• The Civil Rights Act (aka the US Constitution of 1964)

• The Immigration and Nationality Act of 1965 (Hart Celler)

• The Immigration Act of 1990 (the start of the H-1B program)

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Geopolitics: More Questions Than Answers

You might not be interested in the political sphere, but the political sphere is interested in you.

- Stormy Waters

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Wars expand, and wars expand unpredictably.

- Michael Yon

I said last year that 2024 would set the table for the rest of the decade, and I think we are we are going to see several big picture shifts by 2030. Like I said earlier, there is a shift happening across the West, a realignment of sorts. Republican or Democrat, conservative or liberal, and other dividing lines are probably going to become obsolete in coming years. Moving forward, I think the political sphere in the West will basically sort into two groups: Nationalists and Globalists.

Over the last decade we have effectively had a uniparty, but as we see generational change in the political sphere, I think that will take a backseat to a different set of priorities. People want leaders that have the best interests of the people and the country in mind, and I think that shift is going to continue to happen across the West. I’m optimistic that Trump is just the start of that change here in the US, but we will have to wait and see how things develop in his second term. I do think he has a chance to accomplish a lot more this time around.

This is where I get back to the quote at the start. Don’t listen to what they say, watch what they do. Is Trump going to slap tariffs on a bunch of different countries all at once on day 1? I doubt it, but I think he is using as an opening salvo of sorts for negotiations with different countries. The same can be said of his demand that NATO member states increase defense spending to 5 percent of GDP. I’ll talk a bit more about the potential impact of tariffs on different investment ideas next week, but I think the first 100 days will tell us a lot about what Trump has planned for the next four years.

I’m optimistic about several parts of Trump’s Agenda 47, but I’m less optimistic about Trump being able to end foreign wars (or at least America’s involvement). There are entrenched interests that seem to want to escalate in the Middle East against Iran, as well as in Eastern Europe against Russia. If wars expand unpredictably (like what happened in Syria recently), and Trump can’t negotiate his way out of those conflicts, then the US is on a collision course with Iran and Russia through proxies in those respective regions. I think that there is a much higher probability that the situation in Ukraine gets resolved in 2025 compared to the Middle East. It will be tough to keep Ukraine limping along next year without direct NATO involvement (some might say we already got involved when “Ukraine” started launching ATACMS into Russia), but hopefully the US can avoid getting dragged further into direct conflict with Russia.

I don’t think China is interested in a hot war over Taiwan, but I think the economic cold war will probably continue. China will probably be one of the main targets of tariffs (not an outlandish prediction), but we will see how effective they are. I know that a huge portion of the D.C. establishment are big China hawks, which shouldn’t be that surprising. I do think a direct confrontation with China is unlikely, because it basically flips the economic and geopolitical game board, and trying to predict what the world looks like if that happens is a fool’s errand (at least for me).

Return Of The Monroe Doctrine?

One of the things that I was thinking about the other day was Trump’s comments on the Panama Canal, Greenland, and Canada. I’m not saying we are going to get a return of the Monroe Doctrine where the US de facto colonizes a huge portion of North and South America, but I think it is interesting to see Trump focusing on areas closer to home. I do think it would be good for the US to stop throwing resources into the void in the Middle East and Ukraine, and turn our geopolitical focus to the Western Hemisphere.

Sticking with the Western Hemisphere, I have to comment on the possibility of an American Civil War since I brought it up last year. I wrote that a Trump victory would probably lower the odds of internal conflict here in America. I’m sticking with that view, and the country is still very divided, but I think there is a path to avoid having the country breaking into several smaller countries. I also think we will see Trudeau get tossed out in Canada in 2025, so I don’t think the Canadian political situation will get worse (admittedly a low bar). We will see if it gets any better, but I do have a couple longer term predictions past 2025.

Long Term Predictions

My first prediction has to do with the European Union and NATO. I think the EU will probably collapse by 2030, and NATO probably won’t be around if that happens. Shorter term, I do think we will start to see cracks in the EU this year, especially if economies like Germany stay weak, and we get more political upheaval in several countries. Just look at Germany’s energy policy, which doesn’t just impact Germany. I’m not saying this is some massive problem today, but Europe has a bunch of problems, many of which go back to the outside reliance on commodities like energy.

If Europe can manage to get a natural gas pipeline from Qatar, through Syria and Turkey and into Europe, then maybe they will be able to replace cheap gas from Russia. That won’t happen overnight, but it is an interesting development to watch when the price of natural gas in Europe is significantly higher than it is here in the US. It will be interesting to see what their economy looks like in a couple years if they have to rely on LNG shipments. If things get bumpy in Europe next year, we will see what happens with Ukraine, the EU, and NATO, but it will be interesting to watch from afar here in the US.

The other long term prediction is one that I can’t put a date on, but I do think it will happen in my lifetime. I think the US will absorb some of Canada. This won’t happen anytime soon, but if you look at how the West subsidizes the East with equalization payments, it doesn’t look like something that will go on forever. Basically, I view Canada as very similar to the US, but they are further down the path we have been on over the last four years. As an American, I wouldn’t mind adding British Columbia, Alberta, and Saskatchewan to the US, but that might take decades. With the way things have been going up there lately, there might be a lot of Canadians that wouldn’t mind joining the US.

Conclusion

Like the posts last year, this one got long enough to break into multiple pieces. The next post will touch on the death of DEI, the Generational Divide, and some of the health stories where I think we will also see a shift in the Overton Window in 2025. The change in the pace of the media environment flows through to all of the different topics that are quickly coming into focus, and I think that is a durable change that we will see over the next several years.

Some of the post will also build on the topic of immigration, but all of these topics directly or indirectly impact financial markets. The geopolitical landscape certainly has an impact on financial markets, and there are just so many moving pieces that it’s hard to put together a comprehensive picture on where we are at today, while keeping a long-term view in mind. I do think 2024 set the table for the rest of the decade, and I think in 2025 we will start to see some of the puzzle pieces start to fit together. We will see what the vibe shift looks like in 2025, but I’m optimistic that things are headed in a better direction for the US.

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