What is the Definition of a good Deal?

Good Morning Ladies and Gentlemen

”Peter Navarro is ‘truly an idiot’ and ‘dumber than a bag of bricks’.”

Elon Musk

International financial markets represent a significant approximation of a global consensus regarding economic perspectives. The collective knowledge and insights derived from these markets often surpass the understanding of the average political figure, investor, and journalist. In many instances, the predictions and sentiments of the financial crowd prove to be more accurate and insightful than conventional political discourse.

Mister Elon Musk

This week, Mr. Elon Musk delivered a somewhat surprising message on his online platform X, stating that Peter Navarro is “truly an idiot” and “dumber than a bag of bricks”. This comment indicates potential discord between the Tesla CEO and the President of the United States, particularly in light of the high import tariffs. The 75-year-old Navarro is regarded as a key architect of President Trump’s stringent protectionist trade policy.

Peter Kent Navarro

Who is Peter Kent Navarro? Peter Kent Navarro, born in 1949, is an American economist currently serving as the senior counselor for trade and manufacturing to the President of the United States since January 2025. He previously held key positions during the first Trump administration, initially as the director of the White House National Trade Council and later as the director of the newly established Office of Trade and Manufacturing Policy. Navarro is a professor emeritus of economics and public policy at the Paul Merage School of Business at the University of California, Irvine. He has also made five unsuccessful attempts to run for San Diego, California public office.

The Power of Creating a Crisis

Ladies and Gentlemen, much depends now on how the US government further manages import tariffs. Historically, bear markets often arise from specific triggers, such as the new economy bubble in 2000, the securitisation of mortgage loans during the financial crisis from 2007 to 2009, the COVID-19 crash in 2020, and inflation contributing to the bear market in 2022. If President Trump does not make significant adjustments to his tariff policy in the coming weeks, there is a heightened risk of a “2025 tariff recession“. What we saw from the White House yesterday may be the first step in the right direction.

What Truly Defines a Good Deal?

Carl Menger von Wolfensgrün, an Austrian economist, lived in Austria from February 23, 1840, until February 26, 1921. He is recognised as the founder of the Austrian School of Economics and the Austrian marginal utility theory, which brought a transformative perspective to the theory of value and prices. His economic theories concluded, among other insights, that in an environment of free and fair trade, the marginal utility derived from a transaction can exceed the individual value of the transaction object for each participating partner. In simpler terms, the total benefit of the exchange can be greater than the sum of its parts.

Conclusion

I firmly believe an agreement should mutually benefit all parties involved, and I like Carl Menger’s take on it. After negotiating a deal, one partner may feel the terms are no longer favorable. In such instances, it is entirely reasonable to consider renegotiation. However, resorting to force or leveraging supposed strength before negotiation is not a respectable approach to me. What is your take on this?

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li.

Many thanks, indeed!

I wish you an excellent start to the day and weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

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Mail: smk@incrementum.li