This week’s world-famous-news-haiku-competition™ is about how Bitcoin and Gold are surging against the dollar, following the Treasury’s interventions in the bond market and our national debt surpassing $40 trillion. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers. (Don’t worry if you get a bounceback email. The mailbox is working, it’s just been inundated with haikus lately, thank goodness!)

Matt Davis — Need2Know Chedditor

Table of Contents

• Is Canada a Trendsetter in the Trade Wars?

• The American Consumer Is Splitting in Two

• Let’s Fight Wildfires with Moonshine, Coca-Cola

• The Rise of the Burrito-Bots Continues Unabated

• Can Fed Boss Kevin Warsh Reassure Investors?

• Poll of the Day: Tit-for-Tar-iff

• Poll of the Day: You’re Paying $300-$600/mo

What’s the Stock Market Up To, Eh?

$SPX ( ▼ 0.28% )  $DJI ( ▲ 0.26% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$WMT ( ▲ 2.69% )  $UBER ( ▲ 0.62% )  

Is Canada a Trendsetter in the Trade Wars?

Normally, when we think of international trendsetters, we look to Milan for fashion or Silicon Valley for tech, or Japan for something called “Selvedge denim.” But lately, the hottest trend in global economics is coming straight from Ottawa, and seems to look like standing up to the United States with retaliatory tariffs as the midterms approach.

Yes, Canada, the country world-renowned for aggressive politeness and saying "sorry," is suddenly throwing hands. After the Trump administration slapped a massive 50 percent tariff on $20 billion of Canadian exports, Prime Minister Mark Carney decided that nice-guy diplomacy is officially dead. “You’re at war when you’re attacked, and we got attacked,” Carney declared this past weekend, vowing to match America’s levies “dollar for dollar.”

Canada's bold stand is already reverberating across the globe, with a government-linked newspaper in China praising the pushback as a “Chinese-style counterattack.” You know you’ve truly made it in the geopolitical schoolyard when Beijing starts praising your dairy and appliance duties.

But will others follow this trendy new look? Ontario Premier Doug Ford certainly wants to double down, urging Carney to weaponize Canada's “electricity, energy, and critical minerals” to target Trump’s key political base states like Texas and Florida. Why just retaliate with duties on plywood and winter jackets when you can literally turn off the power grid, with a heat wave looming.

With the cost-of-living crunch weighing heavily on voters in the U.S., playing hardball with Washington is quickly becoming the must-have negotiating tactic of the season. Other trade partners are watching, realizing that if even Canada is trading its olive branches for economic bazookas, maybe it is time to stop playing nice.

Quote of the Day

The American Consumer Is Splitting in Two

In the K-Shaped Economy the "average consumer" is as real as a unicorn. Today's retail landscape is split into two distinct halves: Those who are broke, and those who are also acting broke because they’re terrified of becoming broke.

According to retail expert Jharonne Martis, head of consumer research at LSEG, the days of retail giants easily parting us from our money are gone. “Value is no longer just a promotional tool. It's a competitive advantage,” she said, adding that “consumers are still opening up their wallets, but retailers really have to earn every single dollar.”

And how are they earning them? By selling us cheap stuff quickly. We’re so obsessed with instant gratification that we’ll buy a single screwdriver online and expect it delivered in three hours. Meanwhile, the wealthy are shamelessly "trading down," ditching high-end organic markets to fight over bargain groceries. As Martis notes, “even the high-end consumer and the middle-class consumer... are gravitating towards Walmart.” $WMT ( ▲ 2.69% )  

The horror.

But don’t worry, retailers have a cynical trick up their sleeves to keep us swiping. The amount of merchandise "on sale" is at its highest in six years, yet the actual discounts are minuscule. It’s all about “giving the illusion that they are having a promotion” while protecting those precious gross margins, Jharonne told us. Ultimately, this whole fragile house of credit cards relies on a single thing: People keeping their jobs. As Martis warns, “they will continue to spend as long as they are employed. If they start to feel... their job is in jeopardy, then that's when they're gonna put their hands in their pockets.”

Coincidentally, a new Pew report shows 71% of Americans now believe AI will lead to fewer jobs in the United States over the next 20 years, up from 64% two years ago.

Let’s Fight Wildfires with Moonshine, Coca-Cola

As climate change turns the planet into a giant, dry tinderbox, our approach to fire safety remains reassuringly medieval: Wait for a massive blaze to start, and then panic. But Wes Bolsen, CEO of Citrotech, has a wild new strategy. Instead of playing catch-up, what if we stop fires before they even have a chance to destroy our homes?

Enter Citrotech’s secret weapon, which looks suspiciously like a jar of illegal liquor. “Some people think, I brought a bottle of moonshine,” Bolsen jokes; “it’s actually the product.” This non-toxic, plant-based fluid uses food-grade ingredients, the kind you’d find in a can of Coca-Cola, to coat lumber and vegetation, creating a protective char layer that refuses to burn.

For 70 years, governments have dropped chemical fertilizers from airplanes to suppress active blazes. But a Bolsen observes, “Once a fire starts, no one asks, do we have enough money to put it out?” Yet, spending money to prevent them is treated like a bizarre luxury. It’s a classic case of public policy shortsightedness. Bolsen argues that we need a shift: “Maybe for every dollar that we spend to prevent it, we could save six or seven dollars that we're already spending to suppress those fires.” After all, “Every fire, funnily enough, starts about two inches tall.”

Instead of waiting for the next catastrophe, Citrotech also wants to bake fire-retardants directly into our building materials. Through a joint venture with Hexion Corporation, they plan to infuse wood during manufacturing. In this economy, where communities lose billions to fires, Bolsen notes, “it's almost you can't afford not to do it.”

Unless, of course, you prefer the thrill of evacuation drills?

Song of the Day: Sam Amidon & Sam Wilkes, ‘Froggy’

Here’s a collaborative track off the new EP by fiddle maestro Sam Amidon and multi-instrumentalist Sam Wilkes. It’s earning warm praise for its futuristic blend of traditional folk roots, ambient electronic soundscapes, and experimental jazz. So, it’s just like this newsletter.

The Rise of the Burrito-Bots Continues Unabated

Serve Robotics is rapidly scaling up its fleet of autonomous sidewalk delivery robots, despite letting its exclusive Uber $UBER ( ▲ 0.62% ) contract expire when it comes up next year. As CEO Ali Kashani puts it, it’s about a “portfolio decision of where do we focus our resources.” Translation: The company is seeing other people. They've already partnered with Grubhub and expanded their DoorDash delivery services into Washington, D.C. and San Jose, bringing "physical AI" straight to a sidewalk near you.

Kashani’s crusade is driven by one undeniable truth: “using a car to deliver a burrito doesn't make sense... two-pound burritos in a two-ton car.” And he’s not wrong. Burning fossil fuels to transport a single lukewarm carnitas bowl is a thermodynamic tragedy. Then again, I do worry about the displaced gig-workers. Kashani is confident that rolling out sidewalk robots will actually be “net positive for jobs,” invoking the classic corporate reassurance: “ATMs were the same thing. Everybody thought ATMs are going to kill jobs.” 

I feel like this argument doesn’t necessarily hold water, but still. Burrito robots!

These robots also double as rolling digital billboards. Currently, 50% of Serve’s fleet revenue comes from advertising. Kashani warns that in the next five to 10 years, we’ll experience “the ChatGPT moments of robotics,” which I think he meant as a good thing. You be the judge…

Free Yourself From Advertising Forever!

Can Fed Boss Kevin Warsh Reassure Investors?

Have you ever tried to fix a rocky relationship by simply refusing to speak to your partner? Me either. Because it rarely works in romance. But new Federal Reserve Chair Kevin Warsh is bet-the-ranch convinced that giving investors the silent treatment is the key to global financial stability.

As U.S. public debt surges to a record $40 trillion and bond yields hit a 19-year high, investors are naturally looking for a reassuring word. Instead, Warsh has opted to treat Wall Street like a bad Tinder date, drastically stripping back interest rate guidance and breaking the traditional communication feedback loop.

Economists are nervous. Christiane Baumeister of the University of Notre Dame told the Financial Times, “What is unsettling is Warsh’s unwillingness to provide a clear and open assessment of the current situation,” arguing his silent treatment “gives rise to unnecessary speculation.” Former Boston Fed Chief Eric Rosengren agrees, pointing out that “the communication strategy is driving a loss of Fed credibility.”

But maybe Warsh is just playing hard to get? MIT Professor Deborah Lucas thinks the Fed’s old habit of micromanaging markets was toxic, praising Warsh, because he “is willing to stand up against the vested interests in the status quo... I commend him for it.” Plus, Jon Faust, former adviser to Jay Powell, notes that we should celebrate because Warsh has “pretty much overcome the sock-puppet fears” that he would merely do President Trump’s bidding.

No sock puppets here. Just a very quiet sock. As Warsh and his colleagues prepare to gather at the Jackson Hole symposium this week, we can’t wait to see how Warsh explains... well, you know…absolutely nothing.

Should You Check Your 401(k) Today?

👎️ 

Nope.

Poll of the Day: Tit-for-Tar-iff

Poll of the Day: You’re Paying $300-$600/mo

We asked: How much do you pay for your family's health insurance coverage each month?

You answered:

🟨⬜️⬜️⬜️⬜️⬜️ Less than $100 (55)
🟨🟨🟨⬜️⬜️⬜️ $100-$300 (114)
🟩🟩🟩🟩🟩🟩 $300-$600 (217)
🟨🟨🟨⬜️⬜️⬜️ $900-$1,500 (98)
🟨⬜️⬜️⬜️⬜️⬜️ More than $1,500 (52)
⬜️⬜️⬜️⬜️⬜️⬜️ We don't have health insurance coverage. It's too expensive. (25)
561 Votes via @beehiiv polls

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